Exhibit 99.1
NEWS RELEASE
Date: November 4, 2004
For Release: Upon Receipt
Contact(s): Media Investors
Cynthia Michener Hans Miller
860/547-5624 860/547-2751
cynthia.michener@thehartford.com hmiller@thehartford.com
Joshua King Kim Johnson
860/547-2293 860/547-6781
joshua.king@thehartford.com kimberly.johnson@thehartford.com
THE HARTFORD REPORTS THIRD QUARTER 2004 NET INCOME OF $494 MILLION OR $1.66 PER
DILUTED SHARE
Double-digit written premium growth in property-casualty and
record life assets under management;
$216 million in prior-year tax benefits and $263 million in catastrophe impacts
HARTFORD, CONN. - The Hartford Financial Services Group, Inc. (NYSE: HIG), one
of the nation's largest financial services and insurance companies, today
reported third quarter 2004 net income of $494 million, or $1.66 per diluted
share. Net income includes net realized capital gains of $29 million
(after-tax).
SUMMARY (IN MILLIONS EXCEPT PER SHARE NUMBERS) 3Q '04 3Q '03 CHANGE
- ---------------------------------------------- ------ ------ ------
Revenues $5,416 $4,947 9%
Net income 494 343 44%
Net income per diluted share 1.66 1.20 38%
Operating income(1) 468 335 40%
Operating income per diluted share 1.57 1.18 33%
Assets under management 274,961 232,112 18%
Book value per share (ex. AOCI) 41.70 35.33 18%
- ----------
(1) Operating income is not calculated based on generally accepted accounting
principles ("non-GAAP"). Information regarding non-GAAP financial measures used
in this release is provided in the Discussion of Non-GAAP Measures section
below.
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The Hartford - Third Quarter 2004 Earnings /2
The third quarter of 2004 included a total of $263 million (after-tax) in
catastrophe losses and related reinstatement premiums for reinsurance. In
addition, the quarter included a tax benefit of $216 million stemming from the
favorable resolution of various tax items relating to tax years prior to 2004,
and a previously announced $49 million (after-tax) increase in prior-year
environmental reserves.
In the third quarter of 2003, net income was $343 million, or $1.20 per diluted
share, which included net realized capital gains of $15 million (after-tax), and
a $40 million (after-tax) charge for an increase in Bancorp litigation reserves.
The Hartford's operating income was up 40 percent to $468 million in the third
quarter of 2004, or $1.57 per diluted share, compared to $335 million, or $1.18
per share, in the third quarter of 2003.
"Our underlying property-casualty and life businesses each executed well during
a quarter that included both significant catastrophe losses and tax benefits,"
said Ramani Ayer, chairman and CEO of The Hartford. "The company recorded an
operating return on equity of 16.2 percent over the last 12 months, including
catastrophes and tax benefits, and revenues were up 9 percent year-over-year.
"Currently, there is a spotlight on our industry. In recent weeks, we have been
addressing the issues raised by the inquiries being conducted by the state
attorneys general and others. We are committed to a comprehensive assessment of
these issues and a thorough and complete resolution," said Ayer.
REVIEW OF BUSINESS UNIT RESULTS
PROPERTY-CASUALTY
"The unparalleled series of hurricanes this quarter should not mask the sound
business fundamentals that resulted in continued double-digit written premium
growth, reaching nearly $2.6 billion," said Ayer, adding that written premium
for ongoing property-casualty operations was up 12 percent, reflecting strong
growth in business insurance and personal lines.
The company recorded operating income of $13 million in the third quarter of
2004, including the catastrophe impact of $263 million (after-tax), of which $65
million (after-tax) was for Hurricane Jeanne. "Our catastrophe adjusters and
claim representatives across the country are doing a tremendous job handling
some 46,000 claims from the hurricanes alone this season. We've heard many kind
words from customers helped in their time of need by our adjusters, some of whom
continue to work in Florida in the aftermath of the storms," Ayer said.
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The Hartford - Third Quarter 2004 Earnings /3
Operating income for the third quarter of 2004 also included a $26 million tax
benefit stemming from prior years and an increase in prior-year environmental
reserves of $49 million (after-tax). In the third quarter of 2003, operating
income was $209 million.
Before catastrophes, the company recorded a combined ratio in ongoing operations
of 93.3 percent in the 2004 third quarter, a two-point improvement over the
third quarter of 2003. Catastrophes added 15.6 points in the current quarter
versus 3.4 points in the third quarter of 2003. The expense ratio in ongoing
operations improved modestly from the corresponding 2003 quarter, reflecting
continued efforts to limit expense growth and the increase in earned premium.
"Spreads between earned pricing and loss costs remain favorable in most lines of
business, even as pricing continued to moderate during the quarter. In lines
such as large-risk property and professional liability, prices are declining,"
said Ayer.
BUSINESS INSURANCE
Written premium grew 16 percent to $1.15 billion during the third quarter of
2004, driven primarily by 21 percent growth in small commercial. Sales of small
commercial's Spectrum Xpand product contributed to the strong written premium
growth, while some 2,860 agency locations during the quarter signed up for The
Hartford's enhanced, Web-based policy tool that speeds small business
application submissions.
Middle market written premium grew 12 percent over the 2003 period, reflecting
excellent retention rates and a refined approach in pricing and product
packaging for profitable industry sectors.
The business insurance combined ratio, before catastrophes, in the current
quarter was 94.2 percent, up from 93.3 percent in the third quarter last year.
Included in the 2004 period combined ratio was approximately two points of
prior-year commercial auto reserve strengthening. Catastrophes totaled 8.1
points during the current quarter versus 3.2 points in the third quarter of
2003.
PERSONAL LINES
The continued success of The Hartford's Dimensions auto and homeowners products
led to an increase in premium written through independent agents of 17 percent
in the third quarter of 2004. Overall, personal lines written premium rose to
$920 million, an increase of 9 percent versus a year ago.
The personal lines combined ratio, before catastrophes, remained a strong 90.6
percent in the current quarter versus 90.8 percent in the third quarter of 2003,
mostly due to continuing
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The Hartford - Third Quarter 2004 Earnings /4
favorable claim frequency. Catastrophes during the current quarter totaled 25.1
points, compared with 4.2 points in the third quarter of 2003.
SPECIALTY COMMERCIAL
In the competitive specialty product environment, The Hartford continued to
exercise strict underwriting discipline during the quarter. Specialty commercial
reported a combined ratio, before catastrophes, of 95.7 percent compared with
108.2 a year ago. Catastrophes totaled 15.7 points in the current quarter versus
2.5 points in the third quarter of 2003.
LIFE
Third quarter 2004 life operating income was up 38 percent to $306 million from
$221 million in the 2003 period, before a $190 million prior-year tax benefit
recorded in the current quarter and a $40 million Bancorp settlement expense
recorded in the 2003 quarter. Including these items, life operating income in
the current quarter was $496 million, compared to operating income of $181
million in the third quarter of 2003.
"These tremendous operating results were based on a new record in assets under
management and strong earnings in group benefits," Ayer said, noting that assets
under management reached $233 billion in the current quarter, up 21 percent from
September 30, 2003. "In addition to variable annuities, our other asset
accumulation businesses continued to grow in assets under management. I'm
pleased that Japan, 401(k) and mutual funds together generated net flows of $3
billion in the quarter.
"Asset accumulation and life insurance products are an integral part of our
long-term, strategic growth," he said. The company recently announced the launch
of a new variable annuity rider, Principal First Preferred. "The Hartford once
again is anticipating market needs, as evidenced by the development of Principal
First Preferred, which provides customers with low cost, basic income protection
benefits.
"In Japan, building on our blockbuster variable annuities, we began sales of our
first fixed annuities in September," said Ayer.
RETAIL PRODUCTS GROUP
The company's variable annuity sales were $3.3 billion in the current quarter,
and variable annuity net flows were $963 million. Assets under management for
other retail products, which include mutual funds, 401(k) and 529 college
savings plans, reached nearly $30 billion in the quarter, up 36 percent from one
year ago. Mutual fund wrap accounts contributed to an 11 percent year-over-year
growth in retail mutual funds, as sales topped $1.2 billion in the quarter.
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The Hartford - Third Quarter 2004 Earnings /5
Strong 401(k) sales and deposits grew 28 percent over the prior year to $595
million. The company is seeing the benefits of its move this year to increase
the number of retirement plan specialists, who are successfully teaming with
PLANCO wholesalers to reach the small business market.
Operating income for the retail products group was $140 million, up from $107
million in the corresponding 2003 quarter. The current period included $18
million in tax benefits for the first nine months of 2004.
INSTITUTIONAL SOLUTIONS GROUP
The company's Hartford Income Notes product, launched in mid-September, reported
strong sales of more than $300 million in the current quarter. Total assets
under management for the institutional solutions group rose 11 percent year over
year to $49 billion. Operating income of $33 million was relatively flat to the
third quarter of 2003. The institutional solutions group includes investment
products sold to institutions and governmental entities, and private placement
life insurance.
INDIVIDUAL LIFE
Individual life's refreshed product portfolio and marketing efforts, along with
favorable investment and mortality results, paid off as the company marked the
fifth consecutive quarter of double-digit growth. Sales were up 12 percent year
over year to $56 million, led by 19 percent growth in variable life sales.
Operating income in the third quarter increased 22 percent over the third
quarter of 2003 to $44 million.
GROUP BENEFITS
Rising 84 percent over the prior year, group benefits operating income was a
record $70 million for the quarter, while fully insured premiums were up 56
percent in the same period. Operating income benefited from significantly higher
premiums primarily due to the CNA acquisition and favorable mortality. The
company's integration of CNA's group operations remains on track.
Sales for the quarter were up 7 percent led by group disability and group life,
up 22 percent and 34 percent respectively. Reinforcing its leading position in
the group benefits marketplace, The Hartford stepped up to fifth in industry
rankings for group life premium in force and maintained its number two slot in
group disability.
JAPAN
Achieving another record-breaking quarter, Japan annuity sales reached nearly
$2.3 billion in the quarter ended September 30, 2004, driven by a growing
distribution network. Assets under
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The Hartford - Third Quarter 2004 Earnings /6
management at September 30, 2004, marked an impressive record at $11.1 billion,
up 132 percent from a year ago.
NINE-MONTH RESULTS
For the nine months ended September 30, 2004, net income was $1.5 billion, or
$5.04 per diluted share, compared to a loss of $545 million in the year-ago
period, or ($2.03) per diluted share, which included a $1.7 billion (after-tax)
addition to asbestos reserves. Total revenues for the 2004 period were $16.6
billion, up 19 percent from the corresponding 2003 period.
2004 AND 2005 GUIDANCE
Based on current information, The Hartford expects 2004 earnings per diluted
share to be between $5.60 and $5.75. This estimate includes the impact of
catastrophes, including the four major hurricanes of the third quarter, the
impact of the company's reinsurance recoverable charge in the second quarter and
the impact of the company's increase in environmental reserves in the third
quarter. This estimate excludes realized capital gains and losses, the company's
$216 million prior-year tax benefit recorded in the third quarter, the
cumulative effect of accounting changes and any unusual or unpredictable
benefits or charges that might occur in the fourth quarter.
For 2005, The Hartford expects earnings per diluted share to be between $7.15
and $7.45. This amount excludes realized capital gains or losses and any unusual
or unpredictable benefits or charges that might occur during the year. Among
other assumptions, this 2005 guidance assumes the following:
- Equity market appreciation at an annual rate of 9 percent from
levels at the end of October 2004;
- Continued written premium growth in business insurance and personal
lines (in the range of 8 to 12 percent), with negative written
premium growth in specialty commercial insurance; and
- Stable underwriting returns in personal lines, stable to slightly
decreased underwriting returns in business insurance and stable
underwriting returns (supported by a change in mix) in the specialty
commercial insurance segment.
These estimates are highly likely to change. The company's actual experience in
2005 will almost certainly differ from many of the assumptions utilized above
and the company's expectations for these and a large number of other factors
will probably change, leading us to revise our estimates over time. These
factors include but are not limited to significant changes in estimated future
earnings on investment products caused by changes in the equity markets, changes
in loss-cost trends in the property-casualty businesses, catastrophe losses at
levels different from expectations and developments emerging as a result of
changes in estimates
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The Hartford - Third Quarter 2004 Earnings /7
arising from the company's regular review of its prior-period loss reserves for
all lines of insurance, including annual grounds-up reviews of long-term latent
casualty exposures, including asbestos and environmental claims.
CONFERENCE CALL
The Hartford will discuss the results of the third quarter and the 2004 and 2005
guidance in the quarterly conference call on November 5, 2004, at 9:00 a.m. EST.
The call, along with a slide presentation, can be simultaneously accessed
through the company's Web site at www.thehartford.com/ir/index.html.
DISCUSSION OF NON-GAAP MEASURES
The Hartford uses the following non-GAAP financial measures to analyze the
company's operating performance for the periods presented in this press release.
Because The Hartford's calculation of these measures may differ from similar
measures used by other companies, investors should be careful when comparing The
Hartford's non-GAAP financial measures to those of other companies.
The Hartford uses operating income as an important measure of the company's
operating performance. Operating income is net income, before the after-tax
effect of net realized capital gains and losses other than periodic net coupon
settlements on non-qualifying derivatives, and the cumulative effect of
accounting changes. The company believes operating income provides to investors
a valuable measure of the performance of the company's ongoing businesses
because it excludes the effect of those realized capital gains and losses that
tend to be highly variable from period to period. Net income is the most
directly comparable GAAP measure. A reconciliation of net income (loss) to
operating income (loss) for the quarters and nine months ended September 30,
2004, and 2003 is set forth in the operating results table.
In this release, The Hartford has included the financial measure operating
income, before tax-related items, 2003 asbestos reserve addition, Bancorp
litigation and severance charges. The Hartford has provided this financial
measure to enhance investor understanding of the company's ongoing businesses by
eliminating the effects of the 2003 asbestos reserve addition, which relates
solely to legacy businesses, and the effects of tax-related items, Bancorp
litigation and severance charges because these items either are non-recurring or
are highly variable from period to period. Net income is the most directly
comparable GAAP measure. A reconciliation of net income (loss) to operating
income, before tax-related items, 2003 asbestos reserve addition, Bancorp
litigation and severance charges for the quarters and nine months ended
September 30, 2004, and 2003 is set forth in the operating results table.
The 2004 and 2005 earnings guidance presented in this release is based on the
financial measure operating income, before tax-related items. Net income is the
most directly comparable GAAP measure. A quantitative reconciliation of The
Hartford's net income to operating income,
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The Hartford - Third Quarter 2004 Earnings /8
before tax-related items is not calculable on a forward-looking basis because it
is not possible to provide a reliable forecast of realized capital gains and
losses, which typically vary substantially from period to period.
Written premiums is a financial measure used by The Hartford as an important
indicator of the operating performance of the company's property-casualty
operations. Because written premiums represents the amount of premium charged
for policies issued during a fiscal period, The Hartford believes it is useful
to investors because it reflects current trends in The Hartford's sale of
property-casualty insurance products. Earned premiums, the most directly
comparable GAAP measure, represents all premiums that are recognized as revenues
during a fiscal period. The difference between written premiums and earned
premiums is attributable to the change in unearned premium reserves. A
reconciliation of written premiums to earned premiums is set forth in The
Hartford's Quarterly Report on Form 10-Q for the quarter ended September 30,
2004.
More detailed financial information can be found in The Hartford's Investor
Financial Supplement for the third quarter of 2004, which is available on the
company's Web site, www.thehartford.com.
The Hartford is one of the nation's largest financial services and insurance
companies, with 2003 revenues of $18.7 billion. As of September 30, 2004, The
Hartford had total assets of $246.5 billion and stockholders' equity of $13.7
billion. The company is a leading provider of investment products, life
insurance and group benefits; automobile and homeowners products; and business
property-casualty insurance. The Hartford's Internet address is
www.thehartford.com.
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The Hartford - Third Quarter 2004 Earnings /9
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
Third Quarter Ended Nine Months Ended
September 30, September 30,
OPERATING RESULTS BY SEGMENT *
2004 2003 Change 2004 2003 Change
Life [1]
Individual Annuity [2] $127 $98 30% $351 $281 25%
Other Retail [2] 13 9 44% 42 24 75%
Total Retail Products Group 140 107 31% 393 305 29%
Institutional Solutions Group[2] 33 (8) NM 90 52 73%
Individual Life [2] 44 36 22% 115 104 11%
Group Benefits 70 38 84% 165 107 54%
Other [2] [3] 209 8 NM 242 19 NM
Total Life operating income
[2] [4] 496 181 174% 1,005 587 71%
Tax related items 190 - - 190 30 NM
Bancorp litigation - (40) 100% - (40) 100%
Life operating income, before
tax related items and Bancorp
litigation [4] 306 221 38% 815 597 37%
Property & Casualty
Ongoing Operations Underwriting Results
Business Insurance (25) 34 NM 297 91 NM
Personal Lines (137) 40 NM 44 104 (58%)
Specialty Commercial (58) (46) (26%) (139) (16) NM
Total Ongoing Operations
underwriting results (220) 28 NM 202 179 13%
Other Operations underwriting
results (110) (22) NM (389) (2,762) 86%
Total Property & Casualty
underwriting results (330) 6 NM (187) (2,583) 93%
Net investment income 309 297 4% 915 864 6%
Periodic net coupon settlements
on non-qualifying derivatives,
before-tax 1 5 (80%) 8 14 (43%)
Net servicing and other income 10 9 11% 40 15 167%
Other expenses [5] (53) (38) (39%) (181) (172) (5%)
Income tax (expense) benefit [3][5] 76 (70) NM (97) 739 NM
Total Property & Casualty
operating income (loss) [3] [4] 13 209 (94%) 498 (1,123) NM
Tax related items 26 - - 26 - -
2003 asbestos reserve addition - - - - (1,701) 100%
Severance charges - - - - (27) 100%
Property & Casualty operating
income, before tax related
items , 2003 asbestos
reserve addition, and
severance charges [4] [5] (13) 209 NM 472 605 (22%)
Interest and Other Corporate (41) (55) 25% (131) (150) 13%
Operating income, before tax
related items, 2003 asbestos
reserve addition,
Bancorp litigation,
and severance
charges [2] [3] [4]
[5] [6] 252 375 (33%) 1,156 1,052 10%
Tax related items 216 - - 216 30 NM
2003 asbestos reserve addition - - - - (1,701) 100%
Bancorp litigation - (40) 100% - (40) 100%
Severance charges - - - - (27) 100%
- -
Operating income (loss) [2] [3]
[4] [5] [6] 468 335 40% 1,372 (686) NM
Add: Net realized capital
gains, after-tax [4] 29 15 93% 155 162 (4%)
Less: Periodic net coupon
settlements on non-qualifying
derivatives, after-tax [4] 3 7 (57%) 9 21 (57%)
Add: Cumulative effect of
accounting changes, after-tax - - - (23) - -
Net income (loss) $494 $343 44% $1,495 (545) NM
PER SHARE DATA
Diluted earnings (loss) per
share
Operating income, before tax
related items, 2003 asbestos
reserve addition,
Bancorp litigation, and
severance charges [6] $0.85 $1.32 (36%) $3.90 $3.89 -
Operating income (loss) [6] $1.57 $1.18 33% $4.63 $(2.55) NM
Net income (loss) $1.66 $1.20 38% $5.04 $(2.03) NM
[1] Life allocates the net realized gains and losses from periodic net
coupon settlements on non-qualifying derivatives to its segments.
[2] Life includes $30 in 2003 of tax benefit related to the favorable
treatment of certain tax items arising during the 1996-2002 tax years.
The benefit was recorded in Life as follows: $19 in Individual Annuity,
$1 in Other Retail, $1 in Institutional Solutions Group, $2 in
Individual Life and $7 in Other.
[3] Life includes $190 and Property and Casualty includes $26 in 2004 of tax
benefit related to tax years prior to 2004.
[4] Operating income includes the effect of periodic net coupon settlements
on non-qualifying derivatives, after-tax. Such effects are included in
net realized capital gains and losses.
[5] Property & Casualty includes $27 in 2003 of after-tax severance
charges. The charges were recorded in Property & Casualty as follows:
$41 in other expenses and $14 in income tax benefit.
[6] Operating income and operating income before tax related items, 2003
asbestos reserve addition, Bancorp litigation, and severance charges are
not calculated based on accounting principles generally accepted in the
United States of America (GAAP). Information regarding non- GAAP
financial measures used in this release is provided in the Discussion on
Non-GAAP Measures section of this release.
* The table presents underwriting results for the business insurance,
personal lines and specialty commercial segments; and the other operations
segment. Operating income is presented for life's segments,
property-casualty and corporate.
The Hartford defines the following as "NM" or not meaningful: increases or
decreases greater than 200%, or changes from a net gain to a net loss
position, or vice versa.
The Hartford - Third Quarter 2004 Earnings /10
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
CONSOLIDATED FINANCIAL RESULTS
(IN MILLIONS, EXCEPT PER SHARE DATA)
3Q 4Q 1Q 2Q 3Q
HIGHLIGHTS 2003 2003 2004 2004 2004
-------- -------- ------- -------- --------
Net income (loss) [1] $ 343 $ 454 $ 568 $ 433 $ 494
Operating income (loss) [1] $ 335 $ 433 $ 501 $ 403 $ 468
Operating income, before tax related items, 2003 asbestos reserve
addition, Bancorp litigation, and severance charges $ 375 $ 433 $ 501 $ 403 $ 252
Total revenues $ 4,947 $ 4,773 $ 5,732 $ 5,444 $ 5,416
Total assets $211,362 $225,850 $237,261 $240,219 $246,489
Total assets under management [2] $232,112 $250,365 $263,810 $268,526 $274,961
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PER SHARE AND SHARES DATA
Basic earnings (loss) per share
Net income (loss) [1] $ 1.21 $ 1.60 $ 1.96 $ 1.48 $ 1.68
Operating income (loss) [1] $ 1.19 $ 1.53 $ 1.73 $ 1.38 $ 1.60
Operating income, before tax related items, 2003 asbestos reserve
addition, Bancorp litigation, and severance charges $ 1.33 $ 1.53 $ 1.73 $ 1.38 $ 0.86
Diluted earnings (loss) per share [3]
Net income (loss) [1] $ 1.20 $ 1.59 $ 1.93 $ 1.46 $ 1.66
Operating income (loss) [1] $ 1.18 $ 1.52 $ 1.70 $ 1.35 $ 1.57
Operating income, before tax related items, 2003 asbestos reserve
addition, Bancorp litigation, and severance charges [4] $ 1.32 $ 1.52 $ 1.70 $ 1.35 $ 0.85
Weighted average common shares outstanding (basic) 282.5 283.0 289.9 292.3 293.2
Weighted average common shares outstanding
and dilutive potential common shares (diluted) [3] 284.8 285.6 294.9 297.5 297.5
Common shares outstanding 282.7 283.4 291.7 293.0 293.5
Book value per share (including AOCI) $ 40.13 $ 41.07 $ 46.41 $ 41.89 $ 46.51
Book value per share (excluding AOCI) $ 35.33 $ 36.67 $ 38.97 $ 40.26 $ 41.70
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Year Over NINE MONTHS ENDED
Year Sequential SEPTEMBER 30,
Quarter Quarter -----------------------------
Change Change 2003 2004 Change
--------- ---------- -------- -------- ---------
HIGHLIGHTS
Net income (loss) [1] 44% 14% $ (545) $ 1,495 NM
Operating income (loss) [1] 40% 16% $ (686) $ 1,372 NM
Operating income, before tax related items, 2003 asbestos reserve
addition, Bancorp litigation, and severance charges (33%) (37%) $ 1,052 $ 1,156 10%
Total revenues 9% (1%) $13,960 $ 16,592 19%
Total assets 17% 3%
Total assets under management [2] 18% 2%
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PER SHARE AND SHARES DATA
Basic earnings (loss) per share
Net income (loss) [1] 39% 14% $ (2.03) $ 5.12 NM
Operating income (loss) [1] 34% 16% $ (2.55) $ 4.70 NM
Operating income, before tax related items, 2003 asbestos reserve
addition, Bancorp litigation, and severance charges (35%) (38%) $ 3.91 $ 3.96 1%
Diluted earnings (loss) per share [3]
Net income (loss) [1] 38% 14% $ (2.03) $ 5.04 NM
Operating income (loss) [1] 33% 16% $ (2.55) $ 4.63 NM
Operating income, before tax related items, 2003 asbestos reserve
addition, Bancorp litigation, and severance charges [4] (36%) (37%) $ 3.89 $ 3.90 -
Weighted average common shares outstanding (basic) 10.7 sh 0.9 sh 268.9 291.8 22.9 sh
Weighted average common shares outstanding
and dilutive potential common shares (diluted) [3] 12.7 sh - sh 268.9 296.6 27.7 sh
Common shares outstanding 10.8 sh 0.5 sh 282.7 293.5 10.8 sh
Book value per share (including AOCI) 16% 11%
Book value per share (excluding AOCI) 18% 4%
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[1] The quarter and nine months ended September 30, 2004 include $216 of tax
benefit related to tax years prior to 2004. The nine months ended September
30, 2003 include $30 of tax benefit. The nine months ended September 30,
2003 include $(1,701) resulting from the 2003 asbestos reserve addition. The
quarter and nine months ended September 30, 2003 include $(40) resulting
from the Bancorp litigation settlement. The nine months ended September 30,
2003 include $(27) of severance charges.
[2] Includes mutual fund assets and third party assets managed by HIMCO.
[3] As a result of the antidilutive impact from the net loss in the nine months
ended September 30, 2003, The Hartford is required by generally accepted
accounting principles to use basic weighted average shares in the
calculation of diluted earnings per share for the nine months ended
September 30, 2003. In the absence of the net loss, 270.4 weighted average
common shares outstanding and dilutive potential common shares would have
been used in the calculation for the nine months ended September 30, 2003.
[4] Calculated using weighted average common shares outstanding and dilutive
potential common shares of 270.4 for the nine months ended September 30,
2003.
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The Hartford - Third Quarter 2004 Earnings /11
Some of the statements in this release should be considered forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995.
These include statements about our future results of operations. We caution
investors that these forward-looking statements are not guarantees of future
performance, and actual results may differ materially. Investors should consider
the important risks and uncertainties that may cause actual results to differ.
These important risks and uncertainties include the difficulty in predicting the
company's potential exposure for asbestos and environmental claims and related
litigation; the possible occurrence of terrorist attacks; the response of
reinsurance companies under reinsurance contracts and the availability, pricing
and adequacy of reinsurance to protect the company against losses; changes in
the stock markets, interest rates or other financial markets, including the
potential effect on the company's statutory capital levels; the inability to
effectively mitigate the impact of equity market volatility on the company's
financial position and results of operations arising from obligations under
annuity product guarantees; the difficulty in predicting the company's potential
exposure arising out of regulatory proceedings or private claims relating to
incentive compensation or payments made to brokers and alleged anti-competitive
conduct; the uncertain effect on the company of regulatory and market-driven
changes in practices relating to the payment of incentive compensation to
brokers and other distribution intermediaries, including changes that have been
announced and those which may occur in the future; the uncertain effect on the
company of the Jobs and Growth Tax Relief Reconciliation Act of 2003, in
particular the reduction in tax rates on long-term capital gains and most
dividend distributions; the possibility of more unfavorable loss experience than
anticipated; the incidence and severity of catastrophes, both natural and
man-made; stronger than anticipated competitive activity; unfavorable judicial
or legislative developments, including the possibility that the Terrorism Risk
Insurance Act of 2002 is not extended beyond 2005; the potential effect of
domestic and foreign regulatory developments, including those which could
increase the company's business costs and required capital levels; the
possibility of general economic and business conditions that are less favorable
than anticipated; the company's ability to distribute its products through
distribution channels, both current and future; the uncertain effects of
emerging claim and coverage issues; the effect of assessments and other
surcharges for guaranty funds and second-injury funds and other mandatory
pooling arrangements; a downgrade in the company's claims-paying, financial
strength or credit ratings; the ability of the company's subsidiaries to pay
dividends to the company; and others discussed in our Quarterly Reports on Form
10-Q, our 2003 Annual Report on Form 10-K and the other filings we make with the
Securities and Exchange Commission. We assume no obligation to update this
release, which speaks as of the date issued.
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