24th Feb 2005 07:01
Legal & General Group PLC24 February 2005 Part 3Legal & General Group Plc P1Consolidated Profit and Loss Account - Modified Statutory Solvency BasisYear ended 31 December 2004-------------------------------------------------------------------------------- Notes 2004 2003 Restated £m £mProfit on continuing operationsLife and pensions 1 466 443Institutional fund management 69 55General insurance 32 36Other operational income 34 18 --------- ---------Operating profit on continuing operations 601 552Profit on discontinuing operationsGeneral insurance - Gresham 7 5 --------- ---------Operating profit 608 557Variation from longer term investment return 32 56Change in equalisation provision (7) (7)Shareholder retained capital (SRC) movement 2 13 (137) --------- ---------Profit on ordinary activities before tax 646 469Tax charge on profit on ordinary activities 3 (182) (65) --------- ---------Profit for the financial period 464 404Dividends (329) (318) --------- ---------Retained profit 135 86================================================================================Earnings per share 4 p pBased on operating profit after tax 6.75 6.10Based on profit for the financial period 7.15 6.22Diluted earnings per shareBased on operating profit after tax 6.61 6.00Based on profit for the financial period 7.00 6.12Dividend per share 5.06 4.90================================================================================These financial statements were approved by the Board on 23 February 2005 andhave been prepared for long term business using the Modified Statutory Solvency(MSS) basis. The Achieved Profits (AP) results are included in Part 2. Theresults constitute non statutory accounts within the meaning of Section 240 ofthe Companies Act 1985 and are extracted from the Group's financial statementsfor the year ended 31 December 2004.Urgent Issues Task Force abstract 38 'Accounting for ESOP trusts' has beenadopted, and the shareholders investment return for Institutional fundmanagement has been reported as a longer term rate of return within operatingprofit. 2003 comparatives have been restated accordingly.The Group's financial statements for 2004 include the auditor's unqualifiedreport and do not contain a statement under either Sections 237(2) or 237(3) ofthe Companies Act 1985. ================================================================================Legal & General Group Plc P2Consolidated Balance Sheet - Modified Statutory Solvency BasisYear ended 31 December 2004-------------------------------------------------------------------------------- Notes At 31.12.04 At 31.12.03 RestatedAssets £m £mInvestments 38,336 35,268Assets held to cover linked liabilities 108,297 84,308Other assets 5,002 5,349 --------- --------- 151,635 124,925 ========= =========LiabilitiesShareholders' funds 5 3,376 3,248Fund for future appropriations 2,456 1,498Technical provisions 139,534 117,341Borrowings and other creditors 6,269 2,838 --------- --------- 151,635 124,925================================================================================Statement of Total Recognised Gains and Losses 2004 2003 £m £mProfit for the financial period 464 404Exchange losses (7) (11) --------- ---------Total recognised gains and losses 457 393================================================================================ Legal & General Group Plc P3Notes to Financial Statements - Modified Statutory Solvency BasisYear ended 31 December 2004--------------------------------------------------------------------------------1. 'Life and pensions operating profit 2004 2003 £m £mWith-profits business 67 74Non profit business 324 295 --------- ---------UK 391 369USA 55 57Netherlands 20 17France 0 0 --------- --------- 466 443 ========= ========= UK life and pensions operating profit is the accrued distributable transfer,grossed up at the corporate tax rate, and for non profit business is augmentedby the distribution in respect of the intra-group subordinated debt capitalincluded within the SRC. Profits for international life and pensions businessare reported on bases consistent with MSS.================================================================================2. Change in SRC 2004 2003 £m £mInvestment income 60 73Interest expense and charges (2) (2)Realised investment gains 100 20Unrealised investment appreciation 51 230 --------- ---------Investment return on SRC 209 321Net capital released from/(invested in) non-profit business 128 (163)Distribution of operating profit from non-profit business (324) (295) --------- ---------SRC movement before tax 13 (137) ========= =========SRC at 1 January 2,212 2,259 ######### #########SRC movement before tax : 13 : : (137):Tax credit : 8 : : 90 : ######### #########SRC movement after tax 21 (47) --------- ---------SRC at end of period 2,233 2,212 SRC includes intra-group subordinated debt capital of £602m.================================================================================ Legal & General Group Plc P4Notes to Financial Statements - Modified Statutory Solvency BasisYear ended 31 December 2004--------------------------------------------------------------------------------3. Analysis of tax 2004 2004 2003 2003 Profit Tax Profit Tax before (charge)/ before (charge)/ tax credit tax creditProfit on continuing operations £m £m £m £mUK life and pensions 391 (117) 369 (110)International life and pensions 75 (25) 74 (28) -------- -------- -------- -------- 466 (142) 443 (138)Institutional fund management 69 (21) 55 (16)General insurance 32 (9) 36 (12)Other operational income 34 4 18 6 -------- -------- -------- --------Operating profit on continuing operations 601 (168) 552 (160)Profit on discontinuing operationsGeneral insurance -Gresham Insurance Company 7 (2) 5 (1) -------- -------- -------- --------Operating profit 608 (170) 557 (161)Variation from longer term investment return 32 (22) 56 4Change in equalisation provision (7) 2 (7) 2SRC movement 13 8 (137) 90 -------- -------- -------- --------Profit on ordinary activities and tax 646 (182) 469 (65) ======== ======== ======== ======== Although the SRC has been recognised as profit in these financial statements,there has been no corresponding recognition in the FSA regulatory returns, onwhich the taxation of life assurance business is currently based. As the paymentof incremental tax on this profit depends upon a future event, the occurrence ofwhich is under the company's control, no event giving rise to the need toprovide deferred tax has occurred. Accordingly no additional deferred tax hasbeen provided. The maximum amount of such deferred tax not provided at 31.12.04was £630m (2003: £668m).================================================================================ Legal & General Group Plc P5Notes to Financial Statements - Modified Statutory Solvency BasisYear ended 31 December 2004--------------------------------------------------------------------------------4. Earnings per share (EPS) Weighted Earnings average Profit/ per number (loss) share of shares £m p mYear ended 31.12.04Operating profit after tax on continuing operations 433 6.67 6,491Operating profit after tax on discontinuing operations 5 0.08Variation from longer term investment return 10 0.15Change in equalisation provision (5) (0.07)Change in SRC 21 0.32 --------- --------- ---------Profit for the period/EPS 464 7.15 6,491Net shares under options allocable for no further consideration - (0.01) 22Convertible bonds outstanding 12 (0.14) 285 --------- --------- ---------Diluted profit for the period/EPS 476 7.00 6,798 ========= ========= =========Year ended 31.12.03Operating profit after tax on continuing operations 392 6.04 6,490Operating profit after tax on discontinuing operations 4 0.06Variation from longer term investment return 60 0.92Change in equalisation provision (5) (0.08)Change in SRC (47) (0.72) --------- --------- ---------Profit for the financial year/EPS 404 6.22 6,490Net shares under options allocable for no further consideration - - 15Convertible bonds outstanding 12 (0.10) 285 --------- --------- ---------Diluted profit for the financial year/EPS 416 6.12 6,790================================================================================ Legal & General Group Plc P6Notes to Financial Statements - Modified Statutory Solvency BasisYear ended 31 December 2004--------------------------------------------------------------------------------5. Shareholders' funds At 31.12.04 At 31.12.03 Restated £m £mAt 1 January as originally published 3,248 3,184Prior year adjustment in respect ofUITF 38* - (13) --------- --------- 3,248 3,171Total recognised gains and losses 457 393Dividends (329) (318)Increase in share capital/premium 1 1Allocation of ESOT shares* (1) 1 --------- ---------At 31 December 3,376 3,248 ========= =========Comprising:Share capital 163 163Share premium 907 906ESOT reserve* (13) (12)Profit and loss account 2,319 2,191 --------- --------- 3,376 3,248 ========= =========The number of fully paid ordinary shares of 2.5p in issue at the period end was6,506m (2003: 6,504m). * UITF abstract 38 'Accounting for ESOP trusts' requires that own shares heldwithin the Employee Share Ownership Trust (ESOT) should be accounted for as adeduction from shareholders' funds rather than be disclosed as an investment aswas previously required. The 2003 amounts have been restated accordingly.================================================================================ Legal & General Group Plc P7Notes to Financial Statements - Modified Statutory Solvency BasisYear ended 31 December 2004--------------------------------------------------------------------------------6. Segmental analysis of shareholders' funds At 31.12.03 At 31.12.04 restated £m £mUK solvency capital ######### #########SRC * : 2,233 : : 2,212 :Society shareholder capital (SSC) ** : 1,972 : : 1,905 : :---------: :---------:Society solvency capital : 4,205 : : 4,117 :General insurance : 149 : : 120 : ######### #########UK solvency capital 4,354 4,237International shareholders' funds- USA 475 443- Netherlands 48 36- France 48 45 --------- --------- 4,925 4,761Institutional fund management 199 176Corporate funds *** (1,748) (1,689) --------- ---------Shareholders' funds on the MSS basis 3,376 3,248Less: Purchased interests in long term business included in above (24) (29)AP long term in-force business asset 2,764 2,365 --------- ---------Shareholders' funds on the AP basis 6,116 5,584 ========= =========* Including £602m of intra-group subordinated debt capital attributed to theSRC.** Includes £788m from the 2002 rights issue and aggregate investment returns of£188m (2003: £139m).***Includes the convertible debt of £521m (2003: £518m) and £602m of senior debtwhich has been onlent to the UK LTF. ================================================================================7. UK Long Term Fund At 31.12.04 At 31.12.03 £bn £bnWith-profits business 26.8 25.3Non profit business 17.6 14.3 ######### #########Sub-fund : 0.2 : : 0.2 :SRC : 2.2 : : 2.2 : ######### ######### 2.4 2.4 --------- ---------Value of fund 46.8 42.0================================================================================ Legal & General Group Plc P8Consolidated Cash Flow Statement (excluding long term business)Year ended 31 December 2004-------------------------------------------------------------------------------- 2004 2003 Restated £m £mNet cash inflow from operating activities 437 407Interest paid (63) (58)Tax paid (8) (2)Dividends paid (321) (313) ######### #########Issue of share capital : 1 : : 1 :(Increase)/decrease in shares held by the ESOT : (1): : 1 :Increase/(decrease) in borrowing : 59 : : (76): ######### #########Financing 59 (74) --------- --------- 104 (40) ========= =========Cash flows (not including long term business) were invested/(divested) as follows: (Increase)/decrease in cash holdings (4) 2Net purchase/(sale) of investments 108 (42) --------- ---------Net investment/(divestment) 104 (40) ========= =========Reconciliation of profit before tax to operating cash flowProfit on ordinary activities before tax 646 469Profit relating to life and pensions business (479) (308)Long term business profit included inInstitutional fund management (51) (40)Cash received from life and pensions business 233 275Cash received from Institutional fund management 28 24Increase in other operating creditors 35 19Other items 25 (32) --------- ---------Net cash inflow from operating activities 437 407=============================================================================== This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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