Setting new standards - Friends Life

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FINANCIAL STATEMENTS IFRS FINANCIAL STATEMENTS EEV SUPPLEMENTARY INFORMATION Notes to the consolidated accounts continued 3. Segmental information continued Year ended 31 December 2005 International Elimination of UK Life & Life & Asset inter-segment Pensions Pensions Management amounts Total £m £m £m £m £m Gross earned premiums on insurance and investment contracts 3,122 2,011 170 - 5,303 Less investment contracts premiums (2,153) (2,003) (170) - (4,326) Gross earned premiums 969 8 - - 977 Less premiums ceded to reinsurers (56) - - - (56) Net earned premiums 913 8 - - 921 Fee and commission income and income from service activities 116 124 276 (33) 483 Investment income 5,180 932 175 - 6,287 Total revenue 6,209 1,064 451 (33) 7,691 Net claims and benefits paid 1,528 4 - - 1,532 Movement in insurance and investment contracts liabilities 3,291 888 157 - 4,336 Transfer to fund for future appropriations 187 - - - 187 Movement in net assets attributable to unit holders 136 - - - 136 Acquisition expenses 207 67 11 - 285 Administrative and other expenses 295 121 376 (33) 759 Finance costs 77 11 1 - 89 Total claims, benefits and expenses 5,721 1,091 545 (33) 7,324 Profit before tax from continuing operations 488 (27) (94) - 367 Policyholder tax (218) - - - (218) Shareholder tax 67 2 (29) - 40 Segmental results after tax 337 (25) (123) - 189 Inter segment revenue/(expense) (33) - 33 - - 86 Friends Provident Annual Report & Accounts 2006
PARENT COMPANY ACCOUNTS ABBREVIATIONS AND DEFINITIONS Notes to the consolidated accounts continued 3. Segmental information continued (ii) Underlying profit International UK Life & Life & Asset Pensions Pensions Management Total Year ended 31 December 2006 £m £m £m £m Profit before tax from continuing operations 460 50 (19) 491 Inter segment loan interest 12 - (12) - Policyholder tax (124) - - (124) Returns on Group-controlled funds attributable to third parties (104) - - (104) Profit before tax excluding profit generated within policyholder funds 244 50 (31) 263 Non-recurring items (i) (2) - 19 17 Amortisation of Asset Management acquired intangible assets - - 43 43 Amortisation of acquired present value of in-force business 9 16 - 25 Amortisation of Life & Pensions acquired intangible assets - 7 - 7 Impairment of Asset Management acquired intangible assets - - 58 58 Interest payable on STICS (52) - - (52) Short-term fluctuations in investment return 41 (2) - 39 Underlying profit before tax 240 71 89 400 Tax on underlying profit 6 Minority interest in underlying profit (29) Underlying profit after tax attributable to ordinary shareholders of the parent 377 Earnings per share Underlying earnings per share (pence) 17.9 (i) Non-recurring items Life & Pensions items include costs of £nil (2005: £6m) relating to integration activity following the acquisition of Friends Provident International Limited in August 2002, a credit of £3m (2005: charge of £14m) in respect of the cost to shareholders of mortgage endowment complaints and historic business reviews, a credit of £1m (2005: £7m) in respect of the review conducted into pension transfers and opt-outs and a charge of £2m (2005: £nil) arising from the closure of the Appointed Representative sales channel. Asset Management items include costs of £10m (2005: £22m) incurred integrating, rationalising and reorganising the Asset Management business following the acquisition of F&C Group (Holdings) Limited, £nil (2005: £2m) of other reorganisation costs, £12m (2005: £22m) in respect of issuing shares to employees under the 2004 Re-Investment Plan and £3m (2005: £nil) compensation received on loss of an investment management contract. Discontinued operations are shown in note 42 and the profit after tax from these operations amounted to £nil (2005: £8m). Friends Provident Annual Report & Accounts 2006 87
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Setting new standards Friends Provi
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ANNUAL REVIEW CORPORATE GOVERNANCE
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Group financial highlights Group
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INTERNATIONAL LIFE & PENSIONS ASSET
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Friends Provident plc Pixham End Do
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