Form 8-K HARTFORD FINANCIAL SERVI For: May 31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 31, 2018
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-13958 | 13-3317783 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
The Hartford Financial Services Group, Inc. One Hartford Plaza Hartford, Connecticut | 06155 | |
(Address of Principal Executive Offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (860) 547-5000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
[ ] Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.01 Completion of Acquisition or Disposition of Assets.
On May 31, 2018, Hartford Holdings, Inc., a Delaware corporation (“Seller”) and a direct wholly owned subsidiary of The Hartford Financial Services Group, Inc. (the “Company”), completed its previously announced sale of all of the issued and outstanding equity of Hartford Life, Inc. (“HLI”), which, together with its subsidiaries, comprises the Company’s run-off life and annuity insurance businesses, to Hopmeadow Acquisition, Inc. (“Buyer”), Hopmeadow Holdings, LP (“Buyer Parent”) and Hopmeadow Holdings GP LLC (“Buyer Parent GP”), each of which is funded by a group of investors led by Cornell Capital LLC, Atlas Merchant Capital LLC, TRB Advisors LP, Global Atlantic Financial Group, Pine Brook and J. Safra Group. Brion S. Johnson, Executive Vice President of the Company, will serve on the Board of Managers of Buyer Parent GP.
Total consideration for the sale was $2.05 billion, comprised of $1.443 billion in cash paid by Buyer at closing; $300 million in pre-closing cash dividends; $143 million in aggregate principal of HLI long-term debt included as part of the sale; and equity interests representing 9.7% of the outstanding equity interests of each of Buyer Parent and Buyer Parent GP, valued at $164 million. In addition, the Company will retain tax benefits with an estimated GAAP book value of approximately $700 million, which will be available for realization subject to the level and timing of the Company’s taxable income.
The Company has omitted the inclusion of any pro forma financial information herein with respect to these transactions as it has previously reported discontinued operations reflecting the results of the disposed business in its Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the “2017 10-K”) and its Quarterly Report on Form 10-Q for the three months ended March 31, 2018 (the “1Q 10-Q”). (Loss) income from discontinued operations, net of tax, was $169 million and $75 million of income for the three months ended March 31, 2018 and March 31, 2017, respectively, and a loss of $2.87 billion for the fiscal year ended December 31, 2017, and income of $283 million and $486 million for the fiscal years ended December 31, 2016 and December 31, 2015, respectively. Total assets held for sale had a carrying value of $164.9 billion and $156.6 billion as of December 31, 2017 and March 31, 2018, respectively, and total liabilities held for sale had a carrying value of $162.4 billion and $154.2 billion as of December 31, 2017 and March 31, 2018, respectively. At closing, shareholders’ equity will be reduced by the amount of accumulated other comprehensive income (“AOCI”) of the Company’s run-off life and annuity insurance businesses which was $1 billion and $892 million as of December 31, 2017 and March 31, 2018, respectively.
Please refer to note 20 in the Company’s audited financial statements contained in the 2017 10-K and note 17 in the Company’s unaudited financial statements contained in the 1Q 10-Q for further information.
Item 7.01 Regulation FD Disclosure.
On May 31, 2018, the Company issued a press release announcing completion of the sale of the Company’s run-off life and annuity insurance businesses. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit Number | Description | |
99.1 | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
The Hartford Financial Services Group, Inc. | ||||
May 31, 2018 | By: | /s/ Beth A. Bombara | ||
Name: | Beth A. Bombara | |||
Title: | Executive Vice President and Chief Financial Officer | |||
NEWS RELEASE
The Hartford Closes Sale Of Talcott Resolution
HARTFORD, Conn., May 31, 2018 – The Hartford has completed the sale of Talcott Resolution, its run-off life and annuity businesses, to a group of investors led by Cornell Capital LLC, Atlas Merchant Capital LLC, TRB Advisors LP, Global Atlantic Financial Group, Pine Brook and J. Safra Group as of May 31, 2018.
“This completes our exit from the run-off life and annuity businesses and significantly reduces our capital markets exposure,” said The Hartford’s Chairman and CEO Christopher Swift. “We now have greater financial flexibility and a business mix that will improve our ROE and earnings growth profile over time.”
Total consideration to The Hartford is approximately $2.05 billion, including cash paid by the buyers, a pre-closing cash dividend, debt included as part of the sale and a 9.7 percent ownership stake in the new company. In addition, The Hartford will retain Talcott Resolution tax benefits with an estimated GAAP book value of approximately $700 million, which will be available for realization subject to the level and timing of The Hartford’s taxable income. Total value of the sale is $2.75 billion, including the total consideration and the carrying value of the retained tax benefits.
Hartford Investment Management Company (HIMCO), The Hartford’s investment management group, has a five-year contract to manage a significant portion of Talcott Resolution’s investment portfolio. In addition, The Hartford will provide to and be reimbursed by Talcott Resolution for certain transition services for up to two years.
The new company will operate under the name Talcott Resolution. About 375 of The Hartford’s employees have joined the new company and will be located in offices in Windsor, Connecticut, and Woodbury, Minnesota. “We believe Talcott Resolution is well positioned for continued success with an experienced and talented team with proven operational capabilities, supported by an accomplished investor group,” said The Hartford’s Chief Financial Officer Beth Bombara.
About The Hartford
The Hartford is a leader in property and casualty insurance, group benefits and mutual funds. With more than 200 years of expertise, The Hartford is widely recognized for its service excellence, sustainability practices, trust and integrity. More information on the company and its financial performance is available at https://www.thehartford.com. Follow us on Twitter at www.twitter.com/TheHartford_PR.
The Hartford Financial Services Group, Inc., (NYSE: HIG) operates through its subsidiaries under the brand name, The Hartford, and is headquartered in Hartford, Conn. For additional details, please read The Hartford’s legal notice.
HIG-F
Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. 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 those discussed in our 2017 Annual Report on Form 10-K, subsequent Quarterly Reports on Forms 10-Q, 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.
From time to time, The Hartford may use its website to disseminate material company information. Financial and other important information regarding The Hartford is routinely accessible through and posted on our website at https://ir.thehartford.com. In addition, you may automatically receive email alerts and other information about The Hartford when you enroll your email address by visiting the “Email Alerts” section at https://ir.thehartford.com.
Media Contact: | Investor Contact: | |
Michelle Loxton | Sabra Purtill, CFA | |
860-547-7413 | 860-547-8691 | |