The Hartford (HIG) Transaction presentation summary

Strategic rationale and transaction overview

• Sale of Hartford Funds to Wellington Management marks a strategic monetization of a non-core asset, with continued economic participation for up to seven years.

• Transaction leverages a four-decade partnership, creating a single, integrated U.S. wealth platform with expanded investment capabilities and distribution.

• Expected to drive long-term growth through broader access to investment strategies and a scaled advisor platform.

• The deal is valued at a $1.9 billion net present value, with $300 million in cash at closing and estimated initial quarterly payments of $65 million.

• Closing anticipated in Q1 2027, subject to regulatory and shareholder approvals.

Financial implications and structure

• Hartford Funds' results will be reclassified as discontinued operations effective Q2 2026, with economic benefits retained until closing.

• Pre-closing dividend of approximately $170 million and $300 million cash at close, resulting in an estimated $150 million after-tax realized loss.

• Estimated $250 million deferred tax asset to be recorded in Q2 2026, impacting net income but not core earnings.

• After-tax cash flows distributed quarterly over seven years, with payments tied to business performance and subject to extension if thresholds are not met.

• Transaction costs through close estimated at $55 million after-tax.

Non-GAAP financial measures and performance

• Core earnings exclude discontinued operations, realized gains/losses, restructuring, and other non-recurring items to better reflect ongoing business performance.

• For 2025, pro forma core earnings are $3,633 million, with a core earnings ROE of 18.3% and core earnings per share of $12.68.

• Net income and net income ROE remain unchanged by the transaction, while core earnings metrics reflect the reclassification.

• Core earnings ROE for the last twelve months ended March 31, 2026, is 19.2%, compared to net income ROE of 23.0%.

• Reconciliations of net income to core earnings and per share metrics are provided to enhance transparency for investors.