This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Hartford Reports Second Quarter 2014 Financial Results And Expansion Of 2014-2015 Capital Management Plan

The Hartford (NYSE:HIG) reported core earnings of $144 million for the three months ended June 30, 2014 (second quarter 2014), down 38% from $231 million in second quarter 2013. Core earnings declined as the increase in core earnings from Property & Casualty (P&C) Commercial, Group Benefits and Mutual Funds was more than offset by higher prior year loss and loss adjustment expense reserve development (PYD) for asbestos and environmental (A&E) compared with second quarter 2013. Second quarter 2014 core earnings per diluted share were $0.31, a 34% decrease from $0.47 in second quarter 2013 due to the decline in core earnings, which was slightly offset by the accretive impact of equity repurchases over the past 12 months.

Second quarter 2014 net loss totaled $467 million, or $1.00 per diluted share, compared with a second quarter 2013 net loss of $190 million, or $0.39 per diluted share. Second quarter 2014 net loss includes $617 million of loss on discontinued operations, after-tax, from the sale of the company's Japan annuity business. As a result of the sale, the financial results of this business have been reclassified as discontinued operations for all periods presented.

*Denotes financial measure not calculated in accordance with generally accepted accounting principles (non-GAAP).

"This quarter marks a significant milestone in The Hartford's transformation," said The Hartford’s CEO Christopher J. Swift. “With the completion of the sale of the Japan annuity business, we have significantly reduced the size and risk of Talcott Resolution and expanded our 2014-2015 capital management plan, including a 20% increase in the quarterly common dividend. Going forward, we will continue to emphasize profitable growth in P&C, Group Benefits and Mutual Funds and improved operating effectiveness and efficiency."

"Although asbestos and environmental prior year development and elevated weather losses impacted The Hartford's second quarter results, the underlying business trends reflect the continued improvement in our operating fundamentals," said The Hartford's President Doug Elliot. "The P&C business delivered 3% written premium growth and both the P&C and Group Benefits businesses delivered continued underlying margin improvement, and we are pleased that Standard Commercial pricing remains strong and ahead of loss cost trends."

($ in millions except per share data)   Three Months Ended

June 30, 2014

June 30, 2013
  Change 2
Core earnings (loss):    
P&C Commercial $213 $198 8%
Consumer Markets $(27) $15 NM
P&C Other Operations   $(146)   $(73)   (100)%
Property & Casualty (Combined)   $40   $140   (71)%
Group Benefits   $52   $37   41%
Mutual Funds   $21   $20   5%
Sub-total   $113   $197   (43)%
Talcott Resolution   $101   $103   (2)%
Corporate   $(70)   $(69)   (1)%
Core earnings   $144   $231   (38)%
Net income (loss)   $(467)   $(190)   (146)%
Net income (loss) available to common shareholders per diluted share 1   $(1.00)   $(0.39)   (156)%
Weighted average diluted common shares outstanding   467.9   489.0   (4)%
Core earnings available to common shareholders per diluted share 1   $0.31   $0.47   (34)%

[1] Includes dilutive potential common shares [2] The Hartford defines increases or decreases greater than or equal to 200%, or changes from a net gain to a net loss position, or vice versa, as "NM" or not meaningful

Second quarter 2014 financial results included the following items that had an adverse $178 million, after-tax, or $0.38 per diluted share, impact on both net income and core earnings. This compares with unfavorable items in second quarter 2013 that decreased net income and core earnings by a total of $95 million, after-tax, or $0.19 per diluted share:
  • Catastrophe losses of $127 million, after-tax, in second quarter 2014 were $7 million, after-tax, or $0.01 per diluted share, higher than the company's $120 million, after-tax, outlook. Second quarter 2013 catastrophe losses of $121 million, after-tax, were in-line with the company's outlook;
  • Unfavorable PYD for A&E reserves of $164 million, after-tax, or $0.35 per diluted share, in second quarter 2014 compared with $91 million, after-tax, or $0.19 per diluted share, in second quarter 2013; and
  • Excluding A&E, P&C (Combined) unfavorable PYD of $7 million, after-tax, or $0.01 per diluted share, compared with second quarter 2013 unfavorable PYD of $4 million, after-tax, or $0.01 per diluted share, which included unfavorable PYD of $52 million, after-tax, due to the closing of the New York Fund for Reopened Cases (NY25A) in 2013.

Sale of Japan Annuity Business and Expansion of 2014-2015 Capital Management Plan

The Hartford also announced today a $1.275 billion increase in its existing $2.656 billion 2014-2015 capital management program to a total of $3.931 billion. In addition, the board of directors has declared a quarterly common dividend of $0.18 per share, a 20% increase, payable Oct. 1, 2014 to shareholders of record as of Sept. 2, 2014.

1 of 14

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,812.19 +19.51 0.11%
S&P 500 2,089.14 +2.55 0.12%
NASDAQ 5,102.8080 +0.33 0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs