L&G Half-year Results Part 4c

RNS Number : 6248A

Legal & General Group Plc

05 August 2008

 



International Financial Reporting Standards									Page 53
Notes to the Financial Statements
4.08  Gross written premiums
									Full year
							30.06.08	30.06.07	31.12.07
							£m	£m	£m
From continuing operations
UK life and pensions participating business							249	193	382
UK life and pensions non-participating business							2,418	1,421	3,152
Total UK life and pensions							2,667	1,614	3,534
USA							182	169	345
Netherlands							158	143	259
France							152	205	348
Total life and pensions							3,159	2,131	4,486
General insurance
Household							129	122	255
Other business							13	36	52
Total General insurance							142	158	307
Total gross written premiums							3,301	2,289	4,793
4.09  Acquisitions
									Total net
					Date of	Cash	Transaction	Total	assets
					acquisition	paid	costs	cost	acquired
Company name				Notes		£m	£m	£m	£m
Nationwide Life Limited				(i)	31/01/08	250	2	252	252
Nationwide Unit Trust Managers Limited				(ii)	31/01/08	49	1	50	50
Suffolk Life Group Plc				(iii)	06/05/08	62	1	63	63
The Group has acquired 100% of the shares of each company. No goodwill has arisen in respect of these acquisitions.
(i) Nationwide Life Limited The values of the purchased interest in long term business on acquired insurance and investment contracts have been calculated using discounted cash flow methodology. These contracts were recognised on the balance sheet at £127m and £2m gross of tax respectively (with corresponding deferred liabilities tax of £19m and £1m). The intangible assets will be amortised in line with the expected emergence of profit from the business. With effect from 31 January 2008 it has contributed £8m to the consolidated profit before tax and before amortisation of the purchased interest in long term business. (ii) Nationwide Unit Trust Managers Limited The value of the purchased interest in long term business on investment contracts acquired has been calculated using discounted cash flow methodology. This is recognised on the balance sheet at £29m gross of tax, with corresponding deferred tax liability of £8m. The intangible asset will be amortised in line with the expected emergence of profit from the business. With effect from 31 January 2008 it has contributed £2m to the consolidated profit before tax and before amortisation of the purchased interest in long term business. (iii) Suffolk Life Group Plc The value of the purchased interest in long term business on investment contracts acquired has been calculated using discounted cash flow methodology. This is recognised on the balance sheet at £47m gross of tax, with corresponding deferred tax liability of £13m. The value of the acquired customer relationship intangible has been calculated using the discounted cash flow methodology and recognised on the balance sheet at £15m gross of tax, with a corresponding deferred tax liability of £3m. The intangible assets will be amortised in line with the expected emergence of profit from the business. With effect from 6 May 2008 it has contributed £1m to the consolidated profit before tax and before amortisation of the purchased intangibles.
International Financial Reporting Standards									Page 54
Notes to the Financial Statements
4.09  Acquisitions (continued)
(i) Nationwide Life Limited - Assets and liabilities at date of acquisition
							Book value	Adjustments	Fair value
							£m	£m	£m
Assets
Purchased interest in long term business							-	129	129
Financial investments							1,276	-	1,276
Reinsurers' share of contract liabilities							286	-	286
Deferred acquisition costs							15	(15)	-
Income tax recoverable							15	(15)	-
Other assets							4	-	4
Cash and cash equivalents							599	-	599
Total assets							2,195	99	2,294
Liabilities
Non-participating contract liabilities							1,221	-	1,221
Tax liabilities							8	15	23
Other liabilities							801	(3)	798
Total liabilities							2,030	12	2,042
Net assets							165	87	252
Adjustments include the recognition of acquired intangibles and application of consistent Group accounting policies.
(ii) Nationwide Unit Trust Managers Limited - Assets and liabilities at date of acquisition
							Book value	Adjustments	Fair value
							£m	£m	£m
Assets
Purchased interest in long term business							-	29	29
Deferred acquisition costs							29	(29)	-
Other assets							70	-	70
Cash and cash equivalents							30	-	30
Total assets							129	-	129
Liabilities
Provisions							14	-	14
Deferred income liabilities							1	(1)	-
Tax liabilities							5	5	10
Other liabilities							55	-	55
Total liabilities							75	4	79
Net assets							54	(4)	50
Adjustments include the recognition of acquired intangibles and application of consistent Group accounting policies.
International Financial Reporting Standards									Page 55
Notes to the Financial Statements
4.09  Acquisitions (continued)
(iii) Suffolk Life Group Plc - Assets and liabilities at date of acquisition
							Book value	Adjustments	Fair value
							£m	£m	£m
Assets
Purchased interest in long term business							-	62	62
Plant and equipment							1	-	1
Investment property							503	-	503
Financial investments							1,763	(2)	1,761
Income tax recoverable							1	-	1
Other assets							60	-	60
Cash and cash equivalents							738	2	740
Total assets							3,066	62	3,128
Liabilities
Non-participating contract liabilities							2,893	-	2,893
Senior borrowings							153	-	153
Tax liabilities							-	16	16
Other liabilities							3	-	3
Total liabilities							3,049	16	3,065
Net assets							17	46	63
Adjustments include the recognition of acquired intangibles and application of consistent Group accounting policies.
International Financial Reporting Standards									Page 56
Notes to the Financial Statements
4.10  Segmental analysis
The Group is organised into three main business segments: - Long term business  - Investment management - General insurance Other operations comprise estate agencies, regulated mortgage network, corporate expenses and assets held outside the three main business segments, none of which constitute a separately reportable segment. As a result of Society's long term fund restructure, the Society shareholder capital held outside the LTF has been reclassified as attributable to long term business. The comparatives have been restated accordingly.
(i)   Income statement analysed by business segments
				Long term	Investment	General	Other	Elimination	Total
				business	manage-	insurance	operations	of inter
					ment			segment
								amounts
Six months ended 30 June 2008				£m	£m	£m	£m	£m	£m
Total revenue from continuing operations1				(551)	(13,380)	136	122	(112)	(13,785)
Total expenses from continuing operations				(66)	(13,521)	157	141	(112)	(13,401)
(Loss)/profit from continuing operations after income tax				(61)	64	(16)	(14)	-	(27)
Inter segment revenue				(17)	(47)	-	(48)	112	-
Six months ended 30 June 2007				£m	£m	£m	£m	£m	£m
Total revenue from continuing operations1				3,234	5,443	149	242	(110)	8,958
Total expenses from continuing operations				2,842	5,342	196	163	(110)	8,433
Profit/(loss) from continuing operations after income tax				241	50	(33)	71	-	329
Inter segment revenue				(14)	(30)	-	(66)	110	-
Full year ended 31 December 2007				£m	£m	£m	£m	£m	£m
Total revenue from continuing operations1				6,540	11,379	308	233	(258)	18,202
Total expenses from continuing operations				5,793	11,169	384	319	(258)	17,407
Profit/(loss) from continuing operations after income tax				719	109	(55)	(55)	-	718
Inter segment revenue				(40)	(79)	-	(139)	258	-
1. Total revenue from continuing operations includes investment return (further details provided in the consolidated income statement).
(ii)  Balance sheet analysed by business segments
				Long term	Investment	General	Other	Elimination	Total
				business	manage-	insurance	operations	of inter
					ment			segment
								amounts
As at 30 June 2008				£m	£m	£m	£m	£m	£m
Total assets				78,592	194,339	420	3,326	(2,211)	274,466
Total liabilities				73,929	193,457	322	4,119	(2,211)	269,616
Total equity				4,663	882	98	(793)	-	4,850
As at 30 June 2007				£m	£m	£m	£m	£m	£m
Total assets				71,901	165,220	554	4,942	(1,549)	241,068
Total liabilities				68,228	164,445	418	3,555	(1,549)	235,097
Total equity				3,673	775	136	1,387	-	5,971
As at 31 December 2007				£m	£m	£m	£m	£m	£m
Total assets				75,279	204,313	473	3,266	(2,046)	281,285
Total liabilities				70,449	203,550	359	3,349	(2,046)	275,661
Total equity				4,830	763	114	(83)	-	5,624
International Financial Reporting Standards									Page 57
Notes to the Financial Statements
4.10  Segmental analysis (continued)
(iii)  Revenue and assets by geographic segments
				UK	USA	Netherlands	France	Elimination	Total
								of inter
								segment
								amounts
30 June 2008				£m	£m	£m	£m	£m	£m
Total revenue from continuing operations				(14,132)	182	85	81	(1)	(13,785)
Total assets				267,924	2,624	1,751	2,223	(56)	274,466
30 June 2007
Total revenue from continuing operations				8,416	163	173	207	(1)	8,958
Total assets				235,254	2,486	1,495	1,880	(47)	241,068
31 December 2007
Total revenue from continuing operations				17,204	338	290	373	(3)	18,202
Total assets				274,975	2,588	1,663	2,110	(51)	281,285
4.11  Financial investments
							At 30.06.08	At 30.06.07	At 31.12.07
							£m	£m	£m
Equities							133,566	125,932	149,567
Unit trusts							4,716	5,147	4,659
Debt securities							107,501	88,465	104,087
Accrued interest							1,425	1,187	1,363
Derivative assets							2,600	271	694
Loans and receivables							1,439	858	1,348
							251,247	221,860	261,718

 

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IR SSEESLSASEDA