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
=====================================================================
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