The Hartford 2014 Annual Report Download - page 202

Table of Contents
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

The carrying value of goodwill allocated to reporting units as of December 31, 2014 and 2013 is as follows:


 
Personal Lines $ 119 $ — $ 119
Mutual Funds 149 — 149
Corporate [1] 585 (355) 230
      
[1] Carrying value as of December 31, 2014 and 2013 includes $138 and $92 for the Group Benefits and Mutual Funds reporting units, respectively.
Year ended December 31, 2014
The annual goodwill assessment for the Group Benefits, Personal Lines, and Mutual Funds reporting units was completed as of October 31, 2014, which
resulted in no write-downs of goodwill for the year ended December 31, 2014. The reporting units passed the first step of their annual impairment test with a
significant margin with the exception of the Group Benefits reporting unit. Group Benefits passed the first step of its annual impairment test with less than a
10% margin. The fair value of the Group Benefits reporting unit is based on discounted cash flows using earnings projections on in force business and future
business growth. There could be a positive or negative impact on the results of step one in future periods if assumptions change about the level of capital,
future business growth, earnings projections or the weighted average cost of capital.
Year ended December 31, 2013
During the first quarter of 2013, the Company completed the sale of its Retirement Plans business to MassMutual. Accordingly, the carrying value of the
reporting unit's goodwill of $156 was reduced and included in reinsurance loss on disposition in the Company's Consolidated Statements of Operations.
The annual goodwill assessment for the Mutual Funds, Group Benefits, and Personal Lines reporting units was completed as of October 31, 2013, which
resulted in no write-downs of goodwill for the year ended December 31, 2013. All reporting units passed the first step of their annual impairment test with a
significant margin.
Year ended December 31, 2012
During the first quarter of 2012, the Company determined that a triggering event requiring an impairment assessment had occurred as a result of its decision
to pursue sales or other strategic alternatives for the Individual Life and Retirement Plans reporting units.
The Company completed interim impairment tests during each of the first three quarters of 2012 for the Retirement Plans reporting unit which resulted in no
impairment of goodwill. The annual goodwill assessment for Retirement Plans was completed as of October 31, 2012 and an additional impairment test was
completed as of December 31, 2012 as a result of the anticipated sale of this business unit. No write-down of goodwill resulted for the year ended December
31, 2012. Retirement Plans passed step one of the goodwill impairment tests with a margin of less than 10% between fair value and book value of the
reporting unit as of both dates. The fair value of the Retirement Plans reporting unit as of October 31, 2012 and December 31, 2012 was based on a negotiated
transaction price.
The Company completed interim impairment tests during each of the first three quarters of 2012 for the Individual Life reporting unit which resulted in no
impairment of goodwill in the first and second quarters of 2012. In the third quarter of 2012, the Individual Life reporting unit failed the goodwill impairment
test as the carrying amount of the Individual Life reporting unit's goodwill exceeded the implied goodwill value. Accordingly, an impairment loss of $342
was recognized, representing the carrying value of the reporting unit's goodwill. The goodwill impairment loss is included with reinsurance loss on
disposition in the Company's Consolidated Statements of Operations. The fair value of the Individual Life reporting unit as of September 30, 2012 was based
on a negotiated transaction price.
The annual goodwill assessment for the Mutual Funds and Personal Lines reporting units and the Group Benefits reporting unit within Corporate was
completed as of October 31, 2012, which resulted in no write-downs of goodwill for the year ended December 31, 2012. The reporting units passed the first
step of their annual impairment test with a significant margin with the exception of the Group Benefits reporting unit. Group Benefits passed the first step of
its annual impairment test with less than a 10% margin. The fair value of the Group Benefits reporting unit is based on discounted cash flows using earnings
projections on in force business and future business growth.
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