Old Mutual PLC Interim Results 2014 - Part 3 | Company Announcement

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MCEV Information
At 30 June 2014

The table below indicates the value attributable to each line of business and provides the adjusted Group MCEV, where Old Mutual Wealth is restated to an MCEV basis.

				£m
		At	At	At
	Notes	30 June 2014	30 June 2013	31 December 2013
Emerging Markets		3,562	3,967	3,559
Life insurance business		2,894	3,245	2,953
Asset management and other business		419	456	364
Property & Casualty		162	209	183
Banking business		87	57	59

Old Mutual Wealth	A1	2,219	2,069	2,243

Old Mutual Bermuda		376	713	365

Nedbank		3,257	2,997	3,113

Institutional asset management		895	1,153	1,058

Net other business¹		573	381	610
Adjustment for present value of BEE scheme deferred consideration		183	219	201
Adjustment for value of own shares in ESOP schemes		116	120	123
Perpetual preferred callable securities		(596)	(708)	(582)
Subordinated debt		(868)	(861)	(838)
Adjusted Group value		9,717	10,050	9,852

Old Mutual Wealth MCEV basis adjustments	A2	356	215	310

Adjusted Group MCEV		10,073	10,265	10,162

Adjusted Group value per share (pence)		198.1	205.3	201.2
Adjusted Group MCEV per share (pence)		205.4	209.7	207.5

Number of shares in issue at the end of the financial period less treasury shares - millions		4,905	4,896	4,897
¹Net other business is the aggregate of other Group assets and liabilities not included elsewhere, including net inter-segment funding adjustments (except for Old Mutual Wealth) and holding company cash. Old Mutual Wealth inter-segment funding was £192 million (June 2013: £533 million; December 2013: £244 million).

MCEV Information
At 30 June 2014

A1: Analysis of Old Mutual Wealth IFRS net asset value between covered and non-covered
The table below provides an analysis of IFRS net asset value between covered and non-covered business for Old Mutual Wealth.
			£m

Old Mutual Wealth	At 30 June 2014	At 30 June 2013	At 31 December 2013
IFRS net asset value of covered business	2,066	1,979	2,129
IFRS net asset value of non-covered business	153	90	114
IFRS net asset value	2,219	2,069	2,243

	A2: Old Mutual Wealth MCEV information
	The IFRS net asset value for Old Mutual Wealth covered business is £2,066 million at 30 June 2014. Including the MCEV basis adjustments of £356 million gives an MCEV value for Old Mutual Wealth covered business of £2,422 million. The differences between IFRS net asset value and MCEV for Old Mutual Wealth are summarised below.
							£m
	Old Mutual Wealth		At 30 June 2014		At 30 June 2013		At 31 December 2013
	Adjustments to adjusted net worth		(1,463)		(1,765)		(1,664)
	Adjustment to include long-term business on a statutory solvency basis		(797)		(1,006)		(917)
	Goodwill		(674)		(767)		(761)
	Inclusion of Group equity and debt instruments held in life funds		8		8		14
	Value of in-force business		1,819		1,980		1,974

	Total adjustments		356		215		310


A3: Emerging Markets MCEV information

Embedded value information continues to be relevant for Emerging Markets and we would expect it to be a central part of appraising the valuation and performance of this business. As such we have prepared MCEV disclosures for the covered business in Emerging Markets for the six months ended 30 June 2014 on a consistent basis to those historically presented. These can be found on the Old Mutual website (http://www.oldmutual.com/media/reporting-centre.jsp). We continue to assess the basis of preparation of embedded value information for Emerging Markets in view of changes in the composition of that business and information reported by our South African peer group. We anticipate that South African peer group reporting practices are likely to change following the introduction of the Solvency Assessment and Management (SAM) regime. In view of changes in the mix of business, including the growth of lending, wealth management and property & casualty businesses, we may provide additional information to assist with developing more appropriate valuations in future according to the 'sum of the parts' approach.
Analysis of Emerging Markets IFRS net asset value between covered and non-covered
The table below provides an analysis of IFRS net asset value between covered and non-covered business for Emerging Markets.
						£m
		At		At		At
Emerging Markets		30 June 2014		30 June 2013		31 December 2013
IFRS net asset value of covered business		1,237		1,353		1,212
IFRS net asset value of non-covered business		668		722		606
Adjustments to include debt		(165)		(199)		(172)
Adjustments for inter-segment capital funding and minority interests¹		7		16		8
IFRS net asset value		1,747		1,892		1,654
¹The minority interest adjustment relates to the Zimbabwe non-covered business in December 2013 and June 2014.

Old Mutual PLC Interim Results 2014 - Part 3

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