The Hartford 2015 Annual Report Download - page 229

Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
18. Discontinued Operations and Business Dispositions (continued)
F-98
The Consolidated Statements of Operations include a net realized gain on disposal of $9 for the year ended December 31, 2015 related to
discontinued operations. Amounts related to discontinued operations included in the Consolidated Statements of Operations for the year
ended December 31, 2014 and 2013 are summarized in the following table.
For the years ended December 31,
2014 2013
Revenues
Earned premiums $(1)$ (1)
Fee income and other 239 713
Net investment income
Securities available-for-sale and other 18 96
Equity securities, trading 134 6,200
Total net investment income 152 6,296
Net realized capital losses (157) (1,340)
Total revenues 233 5,668
Benefits, losses and expenses
Benefits, losses and loss adjustment expenses 7(98)
Benefits, losses and loss adjustment expenses - returns credited on international variable
annuities
134 6,200
Amortization of DAC — 907
Insurance operating costs and other expenses 23 127
Total benefits, losses and expenses 164 7,136
Income (loss) before income taxes 69 (1,468)
Income tax benefit (2) (521)
Income (loss) from operations of discontinued operations, net of tax 71 (947)
Net realized capital loss on disposal, net of tax [1] (622) (102)
Loss from discontinued operations, net of tax $ (551) $ (1,049)
[1] Includes income tax benefits of $265 on the sale of HLIKK and $219 on the sale of HLIL for the years ended December 31, 2014 and 2013,
respectively.
Business Dispositions
Sale of Retirement Plans
On January 1, 2013, the Company completed the sale of its Retirement Plans business to MassMutual for a ceding commission of $355.
The business sold included products and services provided to corporations pursuant to Section 401(k) of the Internal Revenue Code of
1986, as amended (the “Code”), and products and services provided to municipalities and not-for-profit organizations under Sections
457 and 403(b) of the Code, collectively referred to as government plans. The sale was structured as a reinsurance transaction and
resulted in an after-tax loss of $24 for the year ended December 31, 2013. The after-tax loss is primarily driven by the reduction in
goodwill that is non-deductible for income tax purposes. The Company recognized a reinsurance loss on disposition of $634 offset by
$634 in net realized capital gains for the year ended December 31, 2013.
Upon closing, the Company reinsured $9.2 billion of policyholder liabilities and $26.3 billion of separate account liabilities under an
indemnity reinsurance arrangement. The reinsurance transaction does not extinguish the Company's primary liability on the insurance
policies issued under the Retirement Plans business. The Company also transferred invested assets with a carrying value of $9.3 billion,
net of the ceding commission, to MassMutual and recognized other non-cash decreases in assets totaling $200 relating to deferred
acquisition costs, deferred income taxes, goodwill, property and equipment and other assets associated with the disposition. The
Company continued to sell retirement plans during the transition period which ended on June 30, 2014. MassMutual has assumed all
expenses and risks for these sales through the reinsurance agreement.