The Hartford 2012 Annual Report Download - page 149

Table of Contents
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(Dollar amounts in millions, except for per share data, unless otherwise stated)
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The Hartford Financial Services Group, Inc. is a holding company for insurance and financial services subsidiaries that provide investment products and life
and property and casualty insurance to both individual and business customers in the United States (collectively, “The Hartford”, the “Company”, “we” or
“our”). In 2012, The Hartford concluded an evaluation of its strategy and business portfolio. The Company is currently focusing on its Property & Casualty,
Group Benefits and Mutual Fund businesses. Also, the Company continues to administer life and annuity products previously sold.
On January 1, 2013, the Company completed the sale of its Retirement Plans business to Massachusetts Mutual Life Insurance Company ("MassMutual")
and on January 2, 2013 the Company completed the sale of its Individual Life insurance business to The Prudential Insurance Company of America
("Prudential"), a subsidiary of Prudential Financial, Inc. For further discussion of these and other such transactions, see Note 2 - Business Dispositions of
the Notes to Consolidated Financial Statements.
The Consolidated Financial Statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“U.S.
GAAP”), which differ materially from the accounting practices prescribed by various insurance regulatory authorities.
On January 1, 2012, the Company retrospectively adopted Accounting Standards Update (“ASU”) No. 2010-26, Financial Services – Insurance (Topic
944): Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts which clarifies the definition of policy acquisition costs that are
eligible for deferral. Previously reported financial information has been revised to reflect the effect of the Company’s adoption of this accounting standard. As a
result of this accounting change, total stockholders’ equity as of January 1, 2010, decreased by approximately $1.7 billion, after-tax from $17.9 billion, as
previously reported, to $16.2 billion due to a reduction of the Company’s deferred acquisition cost asset ("DAC") balance related to certain costs that do not
meet the provisions of the revised standard.
The effect of adoption of this accounting standard on the Company’s Consolidated Balance Sheet and Consolidated Statements of Operations was as follows:
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Deferred policy acquisition costs and present value of future profits $8,744 $ (2,188) $ 6,556
Deferred income taxes, net $1,398 $733 $ 2,131
Other liabilities $8,443 $(31) $ 8,412
Retained earnings $12,519 $(1,518) $ 11,001
Accumulated other comprehensive income, net of tax $1,157 $ 94 $ 1,251
Total stockholders’ equity $22,910 $(1,424) $ 21,486
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