The Hartford 2008 Annual Report Download - page 450

Table of Contents
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
14. Debt (continued)
Capital Lease Obligations
The Company recorded capital leases of $92 and $128 in 2008 and 2007, respectively. Capital lease obligations are included
in long-term debt, except for the current maturities, which are included in short-term debt, in the consolidated balance sheet
as of December 31, 2008 and 2007, respectively. See Note 12 for further information on capital lease commitments.
Shelf Registrations
On April 11, 2007, The Hartford filed an automatic shelf registration statement (Registration No. 333-142044) for the
potential offering and sale of debt and equity securities with the Securities and Exchange Commission. The registration
statement allows for the following types of securities to be offered: (i) debt securities, preferred stock, common stock,
depositary shares, warrants, stock purchase contracts, stock purchase units and junior subordinated deferrable interest
debentures of the Company, and (ii) preferred securities of any of one or more capital trusts organized by The Hartford
(“The Hartford Trusts”). The Company may enter into guarantees with respect to the preferred securities of any of The
Hartford Trusts. In that The Hartford is a well-known seasoned issuer, as defined in Rule 405 under the Securities Act of
1933, the registration statement went effective immediately upon filing and The Hartford may offer and sell an unlimited
amount of securities under the registration statement during the three-year life of the shelf.
Contingent Capital Facility
On February 12, 2007, The Hartford entered into a put option agreement (the “Put Option Agreement”) with Glen Meadow
ABC Trust, a Delaware statutory trust (the “ABC Trust”), and LaSalle Bank National Association, as put option calculation
agent. The Put Option Agreement provides The Hartford with the right to require the ABC Trust, at any time and from time
to time, to purchase The Hartford’s junior subordinated notes (the “Notes”) in a maximum aggregate principal amount not to
exceed $500. Under the Put Option Agreement, The Hartford will pay the ABC Trust premiums on a periodic basis,
calculated with respect to the aggregate principal amount of Notes that The Hartford had the right to put to the ABC Trust
for such period. The Hartford has agreed to reimburse the ABC Trust for certain fees and ordinary expenses. The Company
holds a variable interest in the ABC Trust where the Company is not the primary beneficiary. As a result, the Company did
not consolidate the ABC Trust, as they did not meet the consolidation requirements under FASB Interpretation No. 46
(revised December 2003), “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51” (“FIN 46(R)”).
Commercial Paper, Revolving Credit Facility and Line of Credit
The table below details the Company’s short-term debt programs and the applicable balances outstanding.
Maximum Available As of Outstanding As of
Effective Expiration December 31, December 31,
Description Date Date 2008 2007 2008 2007
Commercial Paper
The Hartford 11/10/86 N/A $ 2,000 $ 2,000 $ 374 $ 373
Revolving Credit
Facility
5-year revolving
credit facility 8/9/07 8/9/12 1,900 2,000 — —
Line of Credit
Life Japan Operations
[1] 9/18/02 1/4/10 55 45 — —
Total Commercial
Paper, Revolving
Credit Facility and
Line of Credit $ 3,955 $ 4,045 $ 374 $ 373
[1] As of December 31, 2008 and 2007, the Company’s Japanese operation line of credit in yen was ¥5 billion.
The revolving credit facility provides for up to $1.9 billion of unsecured credit, which excludes a $100 commitment from an
affiliate of Lehman Brothers. Of the total availability under the revolving credit facility, up to $100 is available to support
letters of credit issued on behalf of The Hartford or other subsidiaries of The Hartford. Under the revolving credit facility,
the Company must maintain a minimum level of consolidated net worth. In addition, the Company must not exceed a
maximum ratio of debt to capitalization. Quarterly, the Company certifies compliance with the financial covenants for the
syndicate of participating financial institutions. As of December 31, 2008, the Company was in compliance with all such
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009