The Hartford 2008 Annual Report Download - page 401

Table of Contents
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. Investments and Derivative Instruments
For the years ended December 31,
2008 2007 2006
Components of Net Investment Income
Fixed maturities [1] $ 4,310 $ 4,653 $ 4,266
Equity securities, available-for-sale 167 139 92
Equity securities, held for trading (10,340) 145 1,824
Mortgage loans 333 293 158
Policy loans 139 135 142
Limited partnerships and other alternative investments (445) 255 133
Other investments (72) (161) (13)
Gross investment income (5,908) 5,459 6,602
Less: Investment expenses 97 100 87
Net investment income $ (6,005) $ 5,359 $ 6,515
Components of Net Realized Capital Gains (Losses)
Fixed maturities $ (3,012) $ (357) $ (113)
Equity securities (1,201) (43) (11)
Foreign currency transaction remeasurements (459) (109) 17
Derivatives and other [2] (1,246) (485) (144)
Net realized capital gains (losses) $ (5,918) $ (994) $ (251)
[1] Includes income on short-term bonds.
[2] Primarily consists of changes in fair value on non-qualifying derivatives, hedge ineffectiveness on qualifying derivative
instruments, foreign currency gains and losses, and other investment gains and losses.
Components of Net Unrealized Gains (Losses) on
Available-for-Sale Securities
Fixed maturities $ (13,126) $ (669) $ 1,466
Equity securities (96) (16) 204
Net unrealized gains (losses) credited to policyholders (101) 3 (4)
Net unrealized gains (losses) (13,323) (682) 1,666
Deferred income taxes and other items (5,837) (323) 608
Net unrealized gains (losses), net of tax — end of year (7,486) (359) 1,058
Net unrealized gains (losses), net of tax — beginning of year (359) 1,058 969
Change in unrealized gains (losses) on available-for-sale
securities $ (7,127) $ (1,417) $ 89
The change in net unrealized gain (loss) on equity securities, classified as held for trading, included in net investment
income during the years ended December 31, 2008, 2007 and 2006, was $(9,626), $(539), and $1.3 billion, respectively,
substantially all of which have corresponding amounts credited to policyholders. This amount was not included in the gross
unrealized gains (losses) in the table above.
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009