L&G 2001 Results - Part 3

Legal & General Group PLC 28 February 2002 Part 3 Legal & General Group Plc P1 Consolidated Profit and Loss Account Modified Statutory Solvency Basis Year ended 31 December 2001 ---------------------------------------------------------------------- Notes 2001 2000 £m £m Profit on continuing operations Life and pensions 1 414 364 Institutional fund management 41 59 General insurance 37 20 Other operational income 5 42 --------- --------- 497 485 Profit on discontinued operations Other operational income - Fairmount Group 0 2 --------- --------- Operating profit 497 487 Variation from longer term investment return (63) (13) Change in equalisation provision (6) (6) Shareholder retained capital (SRC) contribution 2 (585) 30 Profit on sale of Fairmount Group 8 - --------- --------- (Loss)/profit on ordinary activities before tax (149) 498 Tax on (loss)/profit on ordinary activities (42) (181) --------- --------- (Loss)/profit for the financial period (191) 317 Dividends (261) (243) --------- --------- Retained (loss)/profit (452) 74 ====================================================================== Earnings per share p p Based on operating profit on continuing operations after tax 6.87 6.82 Based on (loss)/profit for the financial period (3.71) 6.18 Diluted earnings per share Based on operating profit on continuing operations after tax 6.55 6.81 Based on (loss)/profit for the financial period (3.71) 6.16 Dividend per share 5.09 4.71 ====================================================================== These financial statements were approved by the Board on 27 February 2002 and have been prepared for long term business using the modified statutory solvency (MSS) basis. The results constitute non-statutory accounts within the meaning of Section 240 of the Companies Act 1985 and are extracted from the Company's financial statements for the year ended 31 December 2001. The financial statements include the auditors' unqualified report and do not contain a statement under either Sections 237(2) or 237(3) of the Companies Act 1985. Legal & General Group Plc P2 Consolidated Balance Sheet Modified Statutory Solvency Basis As at 31 December 2001 ---------------------------------------------------------------------- Notes 2001 2000 Assets £m £m Investments 34,464 35,077 Assets held to cover linked liabilities 70,982 70,678 Other assets 2,834 2,426 --------- --------- 108,280 108,181 ========= ========= Liabilities Shareholders' funds 3 2,762 3,187 Fund for future appropriations 2,250 4,331 Technical provisions 99,720 97,608 Borrowings and other creditors 3,548 3,055 --------- --------- 108,280 108,181 ====================================================================== Statement of Total Recognised Gains and Losses £m £m (Loss)/profit for the financial period (191) 317 Exchange gains 2 17 --------- --------- Total recognised gains and losses (189) 334 ====================================================================== Legal & General Group Plc P3 Notes to Financial Statements Modified Statutory Solvency Basis Year ended 31 December 2001 ---------------------------------------------------------------------- 1. Life and pensions premiums and operating profit 2001 2000 Oper- Oper- Gross ating Gross ating premiums profit premiums profit £m £m £m £m With-profits business 2,471 129 2,173 135 Non-profit business 1,779 224 1,161 177 ------ ------ ------ ------ UK 4,250 353 3,334 312 USA 272 50 256 42 Netherlands 131 12 98 7 France 146 (1) 140 3 ------ ------ ------ ------ 4,799 414 3,828 364 ====== ====== ====== ====== UK life and pensions operating profit is the distributable transfer, grossed up at the corporate tax rate, and for non-profit business is augmented by the distribution in respect of the intra-group subordinated debt capital held within the SRC. Profits for international life and pensions business are reported on bases consistent with MSS or US GAAP. ====================================================================== 2. Change in SRC 2001 2000 £m £m Investment income 51 42 Interest expense and charges (1) (1) Realised investment gains 6 106 Unrealised investment depreciation (203) (171) --------- --------- Investment return on SRC (147) (24) Net capital (invested in)/released from non-profit business (214) 231 Distribution of operating profit from non-profit business (224) (177) --------- --------- SRC contribution before tax (585) 30 ========= ========= SRC at 1 January 2,153 1,981 --------- --------- SRC contribution before tax : (585): : 30 : Tax : 93 : : (44): --------- --------- SRC contribution after tax (492) (14) Change in the net asset values of SRC subsidiaries 432 39 Movement in subordinated debt 355 147 --------- --------- SRC at end of period 2,448 2,153 ========= ========= On 24 December 2001 the investment management subsidiaries held within the SRC were transferred to new shareholder owned holding companies. SRC includes intra-group subordinated debt capital previously reported within Corporate funds of £502m (2000: £147m). ====================================================================== Legal & General Group Plc P4 Notes to Financial Statements Modified Statutory Solvency Basis Year ended 31 December 2001 ---------------------------------------------------------------------- 3. Shareholders' funds 2001 2000 £m £m At 1 January 3,187 3,085 Total recognised gains and losses (189) 334 Dividends (261) (243) Increase in share capital/premium 5 11 Goodwill written back on sale of Fairmount Group plc 20 - --------- --------- At 31 December 2,762 3,187 ========= ========= Comprising: Share capital 129 129 Share premium 147 142 Profit and loss account 2,486 2,916 --------- --------- 2,762 3,187 ========= ========= The number of fully paid ordinary shares of 2.5p in issue was 5,156m (2000: 5,149m). ====================================================================== 4. Segmental analysis of shareholders' funds 2001 2000 £m £m Life and Pensions - UK (SRC)* 2,380 1,952 - USA 529 483 - Netherlands 20 15 - France 40 43 --------- --------- 2,969 2,493 Institutional fund management** 147 117 General insurance 91 76 Banking 92 92 Corporate funds*** (537) 409 --------- --------- Shareholders' funds on the MSS basis 2,762 3,187 Less: Purchased interests in long term business included in above (30) (48) Achieved Profit (AP) long term in-force business asset 2,262 2,135 --------- --------- Shareholders' funds on the AP basis 4,994 5,274 ========= ========= * Including £502m (2000: £147m) of intra-group subordinated debt capital attributed to the SRC previously reported within Corporate funds. ** The results for 2000 have been restated to exclude the retail investment companies now reported within Corporate funds. *** Corporate funds includes the convertible debt of £515m and the senior debt of £502m (2000: £147m) which has been lent to the UK LTF. ====================================================================== Legal & General Group Plc P5 Notes to Financial Statements Modified Statutory Solvency Basis Year ended 31 December 2001 ---------------------------------------------------------------------- 5. UK Long Term Fund as at 31 December 2001 2000 £bn £bn With-profits business 25.3 27.0 Non-profit business 10.5 9.4 --------- --------- Sub-fund : 0.2 : : 0.3 : SRC : 2.4 : : 2.2 : --------- --------- 2.6 2.5 --------- --------- Value of fund 38.4 38.9 ========= ========= Assets of the fund are valued at market value. ====================================================================== Legal & General Group Plc P6 Consolidated Cash Flow Statement (excluding long term business) Year ended 31 December 2001 ---------------------------------------------------------------------- 2001 2000 £m £m Net cash (outflow)/inflow from operating activities (79) 55 Interest paid (24) (9) Tax paid (20) (12) Capital expenditure - net receipts/(payments) 0 (3) Disposal of Fairmount Group plc 34 - Acquisition of investment management subsidiaries from the long term fund (570) - Dividends paid (250) (223) Financing --------- --------- - Issue of share capital : 5 : : 11 : - Increase in debt : 832 : : 131 : --------- --------- 837 142 --------- --------- (72) (50) ========= ========= Cash flows (not including long term business) were invested/(divested) as follows: Cash holdings (6) 3 --------- --------- Land and buildings : (1): : - : Shares, variable yield securities : : : : and unit trusts : 13 : : (1): Debt and other fixed income securities : (34): : (302): Other loans and investments : (20): : 193 : Deposits with credit institutions : (24): : 57 : --------- --------- Net portfolio divestment (66) (53) --------- --------- Net divestment (72) (50) ========= ========= Reconciliation of profit before tax to operating cash flow Profit on ordinary activities before tax (149) 498 - Profits relating to long term business 143 (454) - Cash (paid to)/received from long term business (137) 49 - Other items 64 (38) --------- --------- Net cash (outflow)/inflow from operating activities (79) 55 ===================================================================== This information is provided by RNS The company news service from the London Stock Exchange

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