Exhibit 99
207360
PRESS RELEASE
AEGON REPORTS ON FIRST QUARTER 2004 RESULTS
ALL MAJOR COUNTRY UNITS REPORT EARNINGS GROWTH ON
A COMPARABLE BASIS
HIGHLIGHTS – First quarter 2004
(amounts in millions, except per share data, 2003 adjusted for comparability)
First quarter 2004 | First quarter 2003 as adjusted USD | First quarter 2003 as reported USD | First quarter 2004 EUR | First quarter 2003 as adjusted EUR | % | At constant currency exchange rates % | First quarter 2003 as reported EUR | ||||||||||||
522 | 331 | 341 | Income before realized gains and losses / indirect income on shares and real estate(1) | 417 | 309 | 35 | 53 | 318 | |||||||||||
111 | (133 | ) | — | Realized gains and (losses) on shares and real estate | 89 | (124 | ) | — | — | — | |||||||||
135 | Indirect income on shares and real estate | — | — | — | — | 126 | |||||||||||||
633 | 198 | 476 | Income before tax | 506 | 185 | 174 | 242 | 444 | |||||||||||
355 | 307 | — | Net income before realized gains and losses on shares and real estate | 284 | 286 | (1 | ) | 13 | — | ||||||||||
443 | 182 | 421 | Net income | 354 | 170 | 108 | 164 | 393 | |||||||||||
0.23 | 0.19 | — | Net income before realized gains and losses on shares and real estate per share(2) | 0.18 | 0.18 | 0 | 15 | — | |||||||||||
0.28 | 0.11 | 0.27 | Net income per share(2) | 0.22 | 0.10 | 120 | 199 | 0.25 | |||||||||||
Published figures are unaudited |
1) | Indirect income has been deducted from the reported Q1 2003 results |
2) | Net income per share in 2003 is adjusted for 2002 stock dividend |
Important note: Please refer to page 4 for information on accounting changes. Relevant 2003 financial data have been adjusted to reflect these accounting changes for the purpose of comparability. A full reconciliation from ‘as reported’ to ‘as adjusted’ is provided from page 19.
The Hague, the Netherlands, May 12, 2004 - AEGON reports strong increases in net income and net income per share for the first quarter of 2004 on a comparable basis with the first quarter of the prior year. The increases in both measures primarily reflect the variance of realized gains and losses on shares and real estate between reporting periods. We expect that recognition of realized gains and losses on shares and real estate will increase the volatility of net income, in total and per share.
Net income before realized gains and losses on shares and real estate for the first quarter amounted to EUR 284 million, slightly lower than EUR 286 million reported for the same period the prior year on a comparable basis. Included in the net results in both years is the contribution by Transamerica Finance Corporation (TFC). In the first quarter of 2004, TFC reported a net loss of EUR 16 million, compared to a net profit of EUR 73 million in the first quarter of 2003.
Income before realized gains and losses on shares and real estate was EUR 417 million in the first quarter of 2004, an increase of 35% on a comparable basis to the same period in 2003. The increase reflects the continued focus on profitability and the improvements in the equity and credit markets. All major country units contributed to the considerable increase in income before realized gains and losses on shares and real estate. On a comparable basis, the Americas showed an increase of 42%
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to USD 483 million (21% to EUR 386 million), the Netherlands an increase of 81% to EUR 87 million and the United Kingdom reported an increase of 10% to GBP 32 million (9% to EUR 47 million). Other countries rose 21% to EUR 23 million.
Income before tax, which includes realized gains and losses on shares and real estate, amounted to EUR 506 million for the first quarter of 2004, an increase from EUR 185 million on a comparable basis in the first quarter of 2003. Income before tax in the first quarter of 2004 was positively influenced by realized net gains on shares and real estate of EUR 89 million compared to realized net losses of EUR 124 million on a comparable basis in the first quarter of 2003. Income before tax as reported in the first quarter of 2003 amounted to EUR 444 million.
Net income per share, which includes realized gains and losses on shares and real estate, amounted to EUR 0.22 in the first quarter of 2004, an increase from EUR 0.10 on a comparable basis in the first quarter of 2003. Net income per share as reported in the first quarter of 2003 amounted to EUR 0.25.
Donald J. Shepard, Chairman of the Executive Board, said:
“The profitability of our core business continues to improve. Income before realized gains and losses on shares and real estate increased 35% over the comparable 2003 first quarter results. Higher contribution to net income of our business units has compensated the lower contribution to net income from the remaining TFC businesses. While new business production showed mixed results in the first quarter 2004 compared to first quarter 2003, we are particularly pleased with the continued strong production in traditional life products sold through the Agency channel in the Americas as well as increased production in the United Kingdom. And, though lower than the first quarter of last year, variable annuity production is higher than in any of the last three quarters of 2003.”
Included in this report are financial measures, pre-tax as well as after-tax, that exclude realized gains and losses on shares and real estate. Net income before realized gains and losses on shares and real estate is a non-GAAP measure. Management uses this non-GAAP measure, in addition to GAAP measures, as an indicator of AEGON’s financial performance and believes that the presentation of this measure provides useful and important information to analysts and investors. This non-GAAP measure should be seen as part of a range of supplementary measures, that assist in achieving greater transparency and understanding of insurance reporting and can help investors and analysts in comparing AEGON with its peers. Reconciliation of this measure to the most comparable GAAP measure is provided on page 30.
Key points for the first quarter 2004
• | Standardized new life production, when compared to the first quarter of 2003, was down 2% to USD 244 million (down 16% to EUR 195 million) in the Americas, declined 8% to EUR 67 million in the Netherlands, was 9% higher at GBP 176 million (8% higher at EUR 259 million) in the United Kingdom and decreased 29% to EUR 67 million in Other countries primarily due to lower production in Taiwan. |
• | New variable annuity deposits in the Americas, while higher than in the previous three quarters, declined 38% to USD 1,597 million (declined 47% to EUR 1,277 million) compared to the first quarter last year, reflecting the strong sales in the first quarter of 2003 prior to the discontinuation of certain product features. |
• | New fixed annuity deposits in the Americas were significantly lower compared to the first quarter of last year as a result of reductions in policyholder crediting rates and adjustments to compensation structures made last year. However, production of USD 830 million (EUR 664 million) was fairly stable compared to the fourth quarter of 2003. |
• | Additions to the default provision in the United States were USD 50 million (EUR 40 million) compared to USD 149 million (EUR 139 million) in the first quarter of 2003. Actual default losses charged against the provision were USD 50 million (EUR 40 million), compared to USD 150 million (EUR 140 million) in the first quarter of 2003. |
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• | TFC completed the sale of most of its commercial lending activities in January 2004. This resulted in an after-tax book gain of EUR 163 million (USD 204 million) credited directly to shareholders’ equity. On an operating basis, TFC reported an income before tax of EUR 5 million (USD 7 million) in the first quarter of 2004, however interest expense of EUR 31 million (USD 39 million) resulted in a pre-tax loss for TFC of EUR 26 million (USD 32 million). TFC contributed EUR 73 million (USD 78 million) to net income in the first quarter of 2003. TFC’s results are consolidated and included in Interest charges and other as from January 1, 2004. Interest charges and other now also includes high yielding debt related to TFC activities, which proved uneconomical to prepay at the time parts of TFC were sold. |
• | AEGON’s capital leverage ratio improved in the first quarter of 2004. Shareholders’ equity increased by EUR 1,078 million to EUR 15,045 million and represents 73% of the total capital base compared to 71% at year-end 2003. |
• | Implementation of Statement of Position 03-1 in AEGON USA resulted in a decline of EUR 165 million (USD 208 million) in AEGON N.V.’s opening balance of shareholders’ equity and decreased income before tax by EUR 13 million (USD 16 million) in the first quarter of 2004 and EUR 14 million (USD 15 million) in the same period of the prior year. |
• | Exchange rate translation negatively impacted the results reported in euro, which is the currency of our primary financial statements. The table below provides the percentage increases and decreases of a selected number of relevant measures: |
First quarter 2004 | First quarter 2003 as adjusted | At constant currency exchange rates | ||||||||
EUR | EUR | % | % | |||||||
Income before realized gains and losses on shares and real estate | 417 | 309 | 35 | 53 | ||||||
Net income before realized gains and losses on shares and real estate | 284 | 286 | (1 | ) | 13 | |||||
Premium income | 5,287 | 5,653 | (6 | ) | (1 | ) | ||||
Investment income | 1,755 | 1,552 | 13 | 29 | ||||||
Fees and commissions | 308 | 289 | 7 | 18 | ||||||
Total revenues | 7,423 | 7,588 | (2 | ) | 6 | |||||
Commissions and expenses | 1,405 | 1,272 | 10 | 22 | ||||||
New life production | 587 | 640 | (8 | ) | (2 | ) | ||||
Gross deposits | 4,003 | 7,257 | (45 | ) | (37 | ) |
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IMPORTANT NOTE ON ACCOUNTING CHANGES:
As per January 1, 2004 the following accounting principles were adopted:
• | Gains and losses on shares and real estate are now recognized in the income statement when realized rather than by applying the indirect income method, which amortized realized gains and losses into income. |
• | The Statement of Position (SOP) 03-1, issued by the Accounting Standards Executive Committee (AcSEC) of the American Institute of Certified Public Accountants, changed the provisioning for mortality on universal life contracts and for guaranteed living and death benefits on variable annuity and variable life contracts in the United States. The implementation mainly changed the timing of the recognition of mortality profits into earnings. |
For the purpose of comparability and as required under Dutch Law, the reported 2003 results have been adjusted throughout this report to reflect the above accounting changes. Please refer to pages 19 to 29 for the supplemental disclosure regarding the comparability adjustments to the 2003 reported results.
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Highlights
(2003 adjusted for comparison)
amounts in millions | ||||||||||||||||
USD | EUR | |||||||||||||||
First three months | First three months | |||||||||||||||
2004 | 2003 | % | 2004 | 2003 | % | |||||||||||
Income by product segment | ||||||||||||||||
251 | 208 | 21 | Traditional life | 201 | 194 | 4 | ||||||||||
92 | 64 | 44 | Fixed annuities | 74 | 60 | 23 | ||||||||||
68 | 44 | 55 | GICs and funding agreements | 54 | 41 | 32 | ||||||||||
104 | 63 | 65 | Life for account policyholders | 83 | 59 | 41 | ||||||||||
14 | (4 | ) | Variable annuities | 11 | (4 | ) | ||||||||||
25 | 9 | 178 | Fee business | 20 | 8 | 150 | ||||||||||
554 | 384 | 44 | Life insurance | 443 | 358 | 24 | ||||||||||
93 | 59 | 58 | Accident and health insurance | 74 | 55 | 35 | ||||||||||
26 | 16 | 63 | General insurance | 21 | 15 | 40 | ||||||||||
673 | 459 | 47 | Insurance income | 538 | 428 | 26 | ||||||||||
6 | 0 | Banking activities | 5 | 0 | ||||||||||||
(157 | ) | (128 | ) | (23) | Interest charges and other | (126 | ) | (119 | ) | (6) | ||||||
522 | 331 | 58 | Income before realized gains and losses on shares and real estate | 417 | 309 | 35 | ||||||||||
111 | (133 | ) | Realized gains and losses on shares and real estate | 89 | (124 | ) | ||||||||||
633 | 198 | Income before tax | 506 | 185 | 174 | |||||||||||
(190 | ) | (94 | ) | 102 | Corporation tax | (152 | ) | (88 | ) | 73 | ||||||
— | 78 | Transamerica Finance Corporation | — | 73 | ||||||||||||
443 | 182 | 143 | Net income | 354 | 170 | 108 | ||||||||||
Income geographically | ||||||||||||||||
537 | 331 | 62 | Americas | 429 | 309 | 39 | ||||||||||
162 | (60 | ) | The Netherlands | 130 | (56 | ) | ||||||||||
59 | 41 | 44 | United Kingdom | 47 | 38 | 24 | ||||||||||
32 | 14 | 129 | Other countries | 26 | 13 | 100 | ||||||||||
790 | 326 | 142 | Income before tax business units | 632 | 304 | 108 | ||||||||||
(157 | ) | (128 | ) | 23 | Interest charges and other | (126 | ) | (119 | ) | 6 | ||||||
633 | 198 | Income before tax | 506 | 185 | 174 | |||||||||||
(190 | ) | (94 | ) | 102 | Corporation tax | (152 | ) | (88 | ) | 73 | ||||||
— | 78 | Transamerica Finance Corporation | — | 73 | ||||||||||||
443 | 182 | 143 | Net income | 354 | 170 | 108 | ||||||||||
421 | Net income historically reported | 393 | ||||||||||||||
2,279 | 1,696 | 34 | Gross margin | 1,822 | 1,581 | 15 | ||||||||||
1,757 | 1,365 | 29 | Commissions and expenses | 1,405 | 1,272 | 10 | ||||||||||
Net income before realized gains and losses | ||||||||||||||||
355 | 307 | 16 | on shares and real estate | 284 | 286 | (1) | ||||||||||
Amounts per common share of EUR 0.12 | ||||||||||||||||
0.28 | 0.11 | 155 | Net income1 | 0.22 | 0.10 | 120 | ||||||||||
0.28 | 0.11 | 155 | Net income fully diluted1 | 0.22 | 0.10 | 120 | ||||||||||
Net income before realized gains and losses | ||||||||||||||||
0.23 | 0.19 | 21 | on shares and real estate | 0.18 | 0.18 | 0 | ||||||||||
At March 31 2004 | At Dec. 31 2003 | At March 31 2004 | At Dec. 31 2003 | |||||||||||||
10.63 | 8.46 | 26 | Shareholders’ equity2 | 8.70 | 7.98 | 9 | ||||||||||
10.83 | 8.87 | 22 | Shareholders’ equity after full conversion2 | 8.86 | 8.34 | 6 | ||||||||||
Number of employees3 | 27,407 | 29,017 | (6) | |||||||||||||
Outstanding common shares:4 | ||||||||||||||||
- Number of common shares (millions) | 1,514 | 1,502 | 1 | |||||||||||||
- Weighted average number (millions) | 1,487 | 1,470 | 1 |
1 | Based on the weighted average number of common shares, adjusted for stock dividend and repurchased own shares. |
2 | Based on the number of common shares outstanding at the end of the period, adjusted for stock dividend and repurchased own shares. |
3 | The 2003 figure has been adjusted for self-employed agents which are no longer included and for the consolidation of Meeùs. |
4 | Adjusted for stock dividend. |
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Revenues and production |
(2003 adjusted for comparison) |
amounts in millions | ||||||||||||||||
USD | EUR | |||||||||||||||
First three months | First three months | |||||||||||||||
2004 | 2003 | % | 2004 | 2003 | % | |||||||||||
Revenues | ||||||||||||||||
528 | 539 | (2) | Life general account single premiums | 422 | 502 | (16) | ||||||||||
1,858 | 1,610 | 15 | Life general account recurring premiums | 1,486 | 1,500 | (1) | ||||||||||
1,539 | 1,413 | 9 | Life policyholders account single premiums | 1,231 | 1,317 | (7) | ||||||||||
1,605 | 1,502 | 7 | Life policyholders account recurring premiums | 1,283 | 1,400 | (8) | ||||||||||
5,530 | 5,064 | 9 | Total life insurance gross premiums | 4,422 | 4,719 | (6) | ||||||||||
783 | 753 | 4 | Accident and health insurance premiums | 626 | 702 | (11) | ||||||||||
299 | 249 | 20 | General insurance premiums | 239 | 232 | 3 | ||||||||||
6,612 | 6,066 | 9 | Total gross premiums | 5,287 | 5,653 | (6) | ||||||||||
2,077 | 1,663 | 25 | Investment income insurance activities | 1,661 | 1,550 | 7 | ||||||||||
385 | 310 | 24 | Fees and commissions | 308 | 289 | 7 | ||||||||||
91 | 101 | (10) | Income from banking activities | 73 | 94 | (22) | ||||||||||
9,165 | 8,140 | 13 | Total revenues business units | 7,329 | 7,586 | (3) | ||||||||||
118 | 2 | Income from other activities | 94 | 2 | ||||||||||||
9,283 | 8,142 | 14 | Total revenues | 7,423 | 7,588 | (2) | ||||||||||
Revenues by product segment | ||||||||||||||||
7,736 | 7,026 | 10 | Life insurance | 6,186 | 6,548 | (6) | ||||||||||
911 | 881 | 3 | Accident and health insurance | 728 | 821 | (11) | ||||||||||
316 | 265 | 19 | General insurance | 253 | 247 | 2 | ||||||||||
91 | 101 | (10) | Banking activities | 73 | 94 | (22) | ||||||||||
118 | 2 | Other activities | 94 | 2 | ||||||||||||
111 | (133 | ) | Realized gains and losses on shares and real estate | 89 | (124 | ) | ||||||||||
9,283 | 8,142 | 14 | Total revenues | 7,423 | 7,588 | (2) | ||||||||||
2,281 | (1,662 | ) | Investment income for account of policyholders | 1,824 | (1,549 | ) | ||||||||||
Standardized new premium production life insurance | ||||||||||||||||
1,941 | 1,840 | 5 | Single premiums | 1,552 | 1,715 | (10) | ||||||||||
540 | 503 | 7 | Recurring premiums annualized | 432 | 468 | (8) | ||||||||||
734 | 687 | 7 | Total recurring plus 1/10 single | 587 | 640 | (8) | ||||||||||
Deposits | ||||||||||||||||
830 | 1,705 | (51) | Fixed annuities | 664 | 1,589 | (58) | ||||||||||
2,406 | 2,669 | (10) | GICs and funding agreements | 1,924 | 2,487 | (23) | ||||||||||
1,597 | 2,586 | (38) | Variable annuities | 1,277 | 2,410 | (47) | ||||||||||
4,833 | 6,960 | (31) | Total | 3,865 | 6,486 | (40) | ||||||||||
173 | 827 | (79) | Savings deposits | 138 | 771 | (82) | ||||||||||
5,006 | 7,787 | (36) | Total production on balance sheet | 4,003 | 7,257 | (45) | ||||||||||
Net deposits | ||||||||||||||||
(570 | ) | 782 | Fixed annuities | (456 | ) | 729 | ||||||||||
545 | 672 | (19) | GICs and funding agreements | 436 | 626 | (30) | ||||||||||
401 | 1,577 | (75) | Variable annuities | 321 | 1,470 | (78) | ||||||||||
376 | 3,031 | (88) | Total | 301 | 2,825 | (89) | ||||||||||
(251 | ) | (325 | ) | 23 | Savings deposits | (201 | ) | (303 | ) | 34 | ||||||
125 | 2,706 | (95) | Total net deposits | 100 | 2,522 | (96) | ||||||||||
Off balance sheet production | ||||||||||||||||
1,508 | 3,368 | (55) | Synthetic GICs | 1,206 | 3,139 | (62) | ||||||||||
3,693 | 2,709 | 36 | Mutual funds/Collective Trusts and other managed assets | 2,953 | 2,525 | 17 | ||||||||||
5,201 | 6,077 | (14) | Total production off balance sheet | 4,159 | 5,664 | (27) | ||||||||||
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Investments, assets and capital geographically
amounts in million EUR (unless otherwise stated) | ||||||||||||||||
Americas USD | United Kingdom GBP | At March 31, 2004 | Americas | The Netherlands | United Kingdom | Other countries | Total EUR | Total USD | ||||||||
Investments | ||||||||||||||||
114,908 | 1,356 | Fixed income | 94,002 | 13,026 | 2,035 | 2,057 | 111,120 | 135,833 | ||||||||
4,453 | 71 | Shares and real estate | 3,643 | 5,687 | 106 | 152 | 9,588 | 11,720 | ||||||||
119,361 | 1,427 | Total general account | 97,645 | 18,713 | 2,141 | 2,209 | 120,708 | 147,553 | ||||||||
12,736 | 17,167 | Fixed income | 10,419 | 12,006 | 25,780 | 110 | 48,315 | 59,060 | ||||||||
34,797 | 14,676 | Shares and real estate | 28,466 | 7,334 | 22,039 | 214 | 58,053 | 70,964 | ||||||||
47,533 | 31,843 | Total policyholders account | 38,885 | 19,340 | 47,819 | 324 | 106,368 | 130,024 | ||||||||
166,894 | 33,270 | Total insurance activities | 136,530 | 38,053 | 49,960 | 2,533 | 227,076 | 277,577 | ||||||||
— | — | Banking activities | — | 6,119 | — | — | 6,119 | 7,480 | ||||||||
66,612 | 897 | Off balance sheet assets | 54,493 | 10,993 | 1,347 | 587 | 67,420 | 82,414 | ||||||||
233,506 | 34,167 | Total business units | 191,023 | 55,165 | 51,307 | 3,120 | 300,615 | 367,471 | ||||||||
Other investments | 67 | 82 | ||||||||||||||
Total group | 300,682 | 367,553 | ||||||||||||||
175,400 | 33,925 | Assets business units | 143,488 | 46,502 | 50,946 | 2,869 | 243,805 | 298,027 | ||||||||
Other assets | 372 | 455 | ||||||||||||||
Total assets on balance sheet | 244,177 | 298,482 | ||||||||||||||
17,922 | 2,189 | Capital in units | 14,661 | 3,043 | 3,288 | 522 | 21,514 | 26,299 | ||||||||
Total capital base | 20,713 | 25,320 | ||||||||||||||
Other net liabilities | 801 | 979 | ||||||||||||||
Total | 21,514 | 26,299 | ||||||||||||||
At March 31, 2003 | ||||||||||||||||
Investments | ||||||||||||||||
109,676 | 1,019 | Fixed income | 100,666 | 12,498 | 1,479 | 1,637 | 116,280 | 126,687 | ||||||||
3,520 | 78 | Shares and real estate | 3,231 | 4,649 | 113 | 128 | 8,121 | 8,848 | ||||||||
113,196 | 1,097 | Total general account | 103,897 | 17,147 | 1,592 | 1,765 | 124,401 | 135,535 | ||||||||
12,788 | 15,812 | Fixed income | 11,738 | 11,446 | 22,929 | 312 | 46,425 | 50,580 | ||||||||
23,722 | 12,122 | Shares and real estate | 21,773 | 6,035 | 17,578 | 181 | 45,567 | 49,645 | ||||||||
36,510 | 27,934 | Total policyholders account | 33,511 | 17,481 | 40,507 | 493 | 91,992 | 100,225 | ||||||||
149,706 | 29,031 | Total insurance activities | 137,408 | 34,628 | 42,099 | 2,258 | 216,393 | 235,760 | ||||||||
— | — | Banking activities | — | 6,926 | — | — | 6,926 | 7,546 | ||||||||
53,751 | 821 | Off balance sheet assets | 49,335 | 1,842 | 1,190 | 456 | 52,823 | 57,551 | ||||||||
203,457 | 29,852 | Total business units | 186,743 | 43,396 | 43,289 | 2,714 | 276,142 | 300,857 | ||||||||
Other investments | 25 | 27 | ||||||||||||||
Total group | 276,167 | 300,884 | ||||||||||||||
157,175 | 29,530 | Assets business units | 144,263 | 44,148 | 42,822 | 2,601 | 233,834 | 254,762 | ||||||||
Other assets | 3,408 | 3,713 | ||||||||||||||
Total assets on balance sheet | 237,242 | 258,475 | ||||||||||||||
16,583 | 2,036 | Capital in units | 15,221 | 2,084 | 2,953 | 416 | 20,674 | 22,524 | ||||||||
Total capital base | 18,723 | 20,399 | ||||||||||||||
Other net liabilities | 1,951 | 2,125 | ||||||||||||||
Total | 20,674 | 22,524 | ||||||||||||||
As at December 31, 2003 | ||||||||||||||||
Investments | ||||||||||||||||
113,396 | 1,316 | Fixed income | 89,783 | 12,330 | 1,868 | 1,846 | 105,827 | 133,660 | ||||||||
3,831 | 76 | Shares and real estate | 3,033 | 5,502 | 108 | 141 | 8,784 | 11,094 | ||||||||
117,227 | 1,392 | Total general account | 92,816 | 17,832 | 1,976 | 1,987 | 114,611 | 144,754 | ||||||||
12,478 | 16,592 | Fixed income | 9,880 | 11,096 | 23,542 | 427 | 44,945 | 56,766 | ||||||||
33,472 | 15,085 | Shares and real estate | 26,502 | 7,032 | 21,403 | 207 | 55,144 | 69,647 | ||||||||
45,950 | 31,677 | Total policyholders account | 36,382 | 18,128 | 44,945 | 634 | 100,089 | 126,412 | ||||||||
163,177 | 33,069 | Total insurance activities | 129,198 | 35,960 | 46,921 | 2,621 | 214,700 | 271,166 | ||||||||
— | — | Banking activities | — | 6,360 | — | — | 6,360 | 8,033 | ||||||||
63,750 | 954 | Off balance sheet assets | 50,475 | 10,514 | 1,354 | 509 | 62,852 | 79,382 | ||||||||
226,927 | 34,023 | Total business units | 179,673 | 52,834 | 48,275 | 3,130 | 283,912 | 358,581 | ||||||||
Other investments | 223 | 281 | ||||||||||||||
Total group | 284,135 | 358,862 | ||||||||||||||
168,993 | 33,681 | Assets business units | 133,803 | 45,855 | 47,788 | 3,059 | 230,505 | 291,128 | ||||||||
Other assets | 3,471 | 4,384 | ||||||||||||||
Total assets on balance sheet | 233,976 | 295,512 | ||||||||||||||
17,517 | 2,173 | Capital in units | 13,869 | 2,865 | 3,083 | 481 | 20,298 | 25,636 | ||||||||
Total capital base | 19,632 | 24,795 | ||||||||||||||
Other net liabilities | 666 | 841 | ||||||||||||||
Total | 20,298 | 25,636 | ||||||||||||||
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REPORT OF THE COUNTRY UNITS
Americas
(2003 adjusted for comparison)
amounts in millions | ||||||||||||||||
USD | EUR | |||||||||||||||
First three months | First three months | |||||||||||||||
2004 | 2003 | % | 2004 | 2003 | % | |||||||||||
Income by product segment | ||||||||||||||||
199 | 162 | 23 | Traditional life | 159 | 151 | 5 | ||||||||||
92 | 64 | 44 | Fixed annuities | 74 | 60 | 23 | ||||||||||
68 | 44 | 55 | GICs and funding agreements | 54 | 41 | 32 | ||||||||||
21 | 21 | 0 | Life for account of policyholders | 17 | 19 | (11) | ||||||||||
14 | (4 | ) | Variable annuities | 11 | (4 | ) | ||||||||||
6 | 4 | 50 | Fee business | 5 | 4 | 25 | ||||||||||
400 | 291 | 37 | Life insurance | 320 | 271 | 18 | ||||||||||
83 | 50 | 66 | Accident and health insurance | 66 | 47 | 40 | ||||||||||
483 | 341 | 42 | Insurance income | 386 | 318 | 21 | ||||||||||
442 | 320 | 38 | of which general account | 353 | 299 | 18 | ||||||||||
41 | 21 | 95 | of which policyholders account1 | 33 | 19 | 74 | ||||||||||
483 | 341 | 42 | Income before realized gains and losses on shares and real estate | 386 | 318 | 21 | ||||||||||
54 | (10 | ) | Realized gains and losses on shares and real estate | 43 | (9 | ) | ||||||||||
537 | 331 | 62 | Income before tax | 429 | 309 | 39 | ||||||||||
(178 | ) | (102 | ) | (75) | Corporation tax | (142 | ) | (96 | ) | 48 | ||||||
359 | 229 | 57 | Net income | 287 | 213 | 35 | ||||||||||
Revenues | ||||||||||||||||
231 | 187 | 24 | Life general account single premiums | 185 | 174 | 6 | ||||||||||
1,212 | 1,143 | 6 | Life general account recurring premiums | 969 | 1,065 | (9) | ||||||||||
140 | 131 | 7 | Life policyholders account single premiums | 112 | 122 | (8) | ||||||||||
228 | 239 | (5) | Life policyholders account recurring premiums | 182 | 223 | (18) | ||||||||||
1,811 | 1,700 | 7 | Total life insurance gross premiums | 1,448 | 1,584 | (9) | ||||||||||
630 | 637 | (1) | Accident and health insurance premiums | 504 | 594 | (15) | ||||||||||
2,441 | 2,337 | 4 | Total gross premiums | 1,952 | 2,178 | (10) | ||||||||||
1,632 | 1,485 | 10 | Investment income insurance activities | 1,305 | 1,384 | (6) | ||||||||||
254 | 206 | 23 | Fees and commissions | 203 | 192 | 6 | ||||||||||
4,327 | 4,028 | 7 | Total revenues | 3,460 | 3,754 | (8) | ||||||||||
1,228 | (543 | ) | Investment income for account of policyholders | 982 | (506 | ) | ||||||||||
Gross margin, commissions and expenses | ||||||||||||||||
1,525 | 1,222 | 25 | Gross margin | 1,219 | 1,139 | 7 | ||||||||||
1,042 | 881 | 18 | Commissions and expenses | 833 | 821 | 1 | ||||||||||
Standardized new premium productionlife insurance | ||||||||||||||||
229 | 302 | (24) | Single premiums | 183 | 281 | (35) | ||||||||||
221 | 220 | 0 | Recurring premiums annualized | 177 | 205 | (14) | ||||||||||
244 | 250 | (2) | Total recurring plus 1/10 single | 195 | 233 | (16) | ||||||||||
Deposits | ||||||||||||||||
830 | 1,705 | (51) | Fixed annuities | 664 | 1,589 | (58) | ||||||||||
2,406 | 2,669 | (10) | GICs and funding agreements | 1,924 | 2,487 | (23) | ||||||||||
1,597 | 2,586 | (38) | Variable annuities | 1,277 | 2,410 | (47) | ||||||||||
4,833 | 6,960 | (31) | Total production on balance sheet | 3,865 | 6,486 | (40) | ||||||||||
Off balance sheet production | ||||||||||||||||
1,508 | 3,368 | (55) | Synthetic GICs | 1,206 | 3,139 | (62) | ||||||||||
3,285 | 2,281 | 44 | Mutual funds/Collective Trusts and other managed assets | 2,627 | 2,126 | 24 | ||||||||||
4,793 | 5,649 | (15) | Total production off balance sheet | 3,833 | 5,265 | (27) | ||||||||||
1 | Includes also variable annuities and fee business. |
Page 8
The Americas (the AEGON USA companies and AEGON Canada)
Income before realized gains and losses on shares and real estate in the first quarter rose 42% to USD 483 million compared to USD 341 million in the first quarter of 2003. Net income, which includes realized gains and losses on shares and real estate, increased 57% to USD 359 million compared to USD 229 million in the first quarter of 2003 when adjusted for comparison. Results have primarily been influenced by lower additions to the asset defaults provision and increased spreads.
Traditional/Account of Policyholders
Life production (standardized new premium) decreased 2% to USD 244 million. While the Agency Group continued the strong sales of traditional, universal and term life, up 18% in both recurring and single premiums, the decline in life production primarily reflects the lower sales (USD 27 million) of company-owned life insurance (COLI), where sales tend to fluctuate more unevenly.
Traditional life income before realized gains and losses on shares and real estate of USD 199 million in the first quarter of 2004 was 23% higher on a comparable basis than in the same period last year, reflecting lower credit losses and improved mortality profits. Life for account of policyholders was unchanged at USD 21 million.
Fixed annuities
Fixed annuity account balances of USD 44.7 billion at the end of the first quarter of 2004 were slightly lower than year-end 2003. Fixed annuity deposits of USD 830 million decreased 51% compared to the first quarter in 2003, due largely to lower policyholder crediting rates and lower commissions. However, compared to the fourth quarter last year, production was relatively stable. Withdrawals continue to be at low levels.
Fixed annuity income before realized gains and losses on shares and real estate of USD 92 million increased 44% compared to the first quarter of 2003, adjusted for comparability, primarily reflecting lower credit losses and higher product spreads. Policyholder crediting rates were lowered on existing contracts. As of the end of the first quarter, crediting rates on the majority of the existing book have been reset to contractual minimum crediting rates. Product spreads during the first quarter of 2004 on the largest segment of the fixed annuity book, after reduction of 35 basis points for defaults, increased 17 basis points since the fourth quarter of 2003 to 209 basis points. The product spread includes 8 basis points of realized gains on equity-like investments. The increase reflects lower crediting rates on both existing and new business. Spreads on new fixed annuity deposits remain within pricing targets.
GICs and funding agreements
GIC and funding agreement account balances increased 3% to USD 28 billion since year-end 2003. GICs and funding agreements production was down 10% to USD 2,406 million compared to the first quarter of 2003, primarily due to disciplined pricing to achieve returns and fewer contract renewals due to an increase in longer-term business sold over the past year.
GICs and funding agreements income before realized gains and losses on shares and real estate increased 55% to USD 68 million compared to the adjusted 2003 results. The increase is due primarily to a one-time positive effect related to the performance of a loan portfolio (USD 16 million) along with lower additions to the default provision that resulted from the improved credit environment.
Variable annuities
Variable annuity account balances increased 3% to USD 43.7 billion since year-end 2003. However, deposits of USD 1,597 million decreased 38% compared to the first quarter of 2003. The decrease is primarily due to the strong sales prior to the discontinuance of the guaranteed minimum income benefit (GMIB) feature in the first quarter of 2003. Total sales of AEGON’s new Guaranteed Principal Solution (GPS), which features a guaranteed minimum withdrawal benefit (GMWB), were USD 102 million in the first quarter of 2004 and were in line with our expectations.
Page 9
Income before realized gains and losses on shares and real estate in the variable annuity line of business increased from a loss of USD 4 million in the first quarter of 2003 to a profit of USD 14 million in the first quarter of 2004. The increase reflects the higher fees related to higher fund balances and improved persistency. Included in the first quarter results is a mark to market loss on a minimum guarantee liability.
Fee business
Off balance sheet production was USD 4,793 million, a 15% decrease compared to the first quarter in 2003. Mutual fund sales of USD 3,285 million increased 44% primarily due to a large full service defined contribution plan won by Diversified Investment Advisors. Synthetic GIC sales of USD 1,508 million decreased 55% compared to the first quarter last year as equity selections are now attracting more funds than stable value alternatives in defined contribution plans.
Fee business reported income before realized gains and losses on shares and real estate of USD 6 million an increase of 50% compared to the first quarter of 2003, and reflects growth in assets under management.
Accident and Health Business
Accident and health premiums were slightly lower than in the first quarter of 2003. The new telemarketing regulations, including the national Do Not Call list, resulted in a decline in telemarketing sales.
Accident and health income before realized gains and losses on shares and real estate increased 66% to USD 83 million primarily due to lower default losses, improved claims ratio, and several one-time items (USD 7 million).
Commissions and expenses
Commissions and expenses of USD 1,042 million increased 18% compared to the prior year. While first year commissions declined in the first quarter as a result of lower annuity production, this was more than offset by higher renewal commissions and higher DPAC amortization due to higher gross profits. Operating expenses, which exclude DPAC amortization and commissions, were equal to last year.
Page 10
The Netherlands
(2003 adjusted for comparison)
amounts in millions | ||||||||
EUR | ||||||||
First three months | ||||||||
2004 | 2003 | % | ||||||
Income by product segment | ||||||||
Traditional life | 44 | 38 | 16 | |||||
Life for account of policyholders | 13 | (6 | ) | |||||
Fee business | 11 | 5 | 120 | |||||
Life insurance | 68 | 37 | 84 | |||||
Accident and health insurance | 6 | 6 | 0 | |||||
General insurance | 8 | 5 | 60 | |||||
Insurance income | 82 | 48 | 71 | |||||
of which general account | 58 | 49 | 18 | |||||
of which policyholders account1 | 24 | (1 | ) | |||||
Insurance income | 82 | 48 | 71 | |||||
Banking activities2 | 5 | 0 | ||||||
Income before realized gains and losses on shares and real estate | 87 | 48 | 81 | |||||
Realized gains and losses on shares and real estate | 43 | (104 | ) | |||||
Income before tax | 130 | (56 | ) | |||||
Corporation tax | (28 | ) | (8 | ) | ||||
Net income | 102 | (64 | ) | |||||
Revenues | ||||||||
Life general account single premiums | 182 | 240 | (24) | |||||
Life general account recurring premiums | 355 | 290 | 22 | |||||
Life policyholders account single premiums | 144 | 121 | 19 | |||||
Life policyholders account recurring premiums | 625 | 687 | (9) | |||||
Total life insurance gross premiums | 1,306 | 1,338 | (2) | |||||
Accident and health insurance premiums | 91 | 80 | 14 | |||||
General insurance premiums | 149 | 147 | 1 | |||||
Total gross premiums | 1,546 | 1,565 | (1) | |||||
Investment income insurance activities | 288 | 112 | 157 | |||||
Fees and commissions | 74 | 74 | 0 | |||||
Income from banking activities | 73 | 94 | (22) | |||||
Total revenues | 1,981 | 1,845 | 7 | |||||
Investment income for account of policyholders | 462 | (226 | ) | |||||
Gross margin, commissions and expenses | ||||||||
Gross margin | 339 | 287 | 18 | |||||
Commissions and expenses | 252 | 239 | 5 | |||||
Standardized new premium production life insurance | ||||||||
Single premiums | 297 | 317 | (6) | |||||
Recurring premiums annualized | 37 | 41 | (10) | |||||
Total recurring plus 1/10 single | 67 | 73 | (8) | |||||
Deposits | ||||||||
Savings deposits | 138 | 771 | (82) | |||||
Total production on balance sheet | 138 | 771 | (82) | |||||
Off balance sheet production | ||||||||
Mutual funds and other managed assets | 245 | 161 | 52 | |||||
Total production off balance sheet | 245 | 161 | 52 | |||||
1 | Includes also fee business. |
2 | Includes income on off balance sheet type products. |
Page 11
The Netherlands
Income before realized gains and losses on shares and real estate totaled EUR 87 million in the first quarter of 2004, an 81% increase compared to the same period in 2003. The increase is largely the result of lower additions to provisions for credit risk and minimum guarantees, as well as higher investment income. Net income of EUR 102 million for the first quarter of 2004, which includes realized gains and losses on shares and real estate, improved substantially compared to a loss of EUR 64 million in the same period last year when adjusted for comparability.
Traditional/Account of Policyholders
Traditional life income before realized gains and losses on shares and real estate of EUR 44 million in the first quarter of 2004 increased from the prior year. This was a result of higher investment income and improved mortality experience.
Life for account of policyholders income before realized gains and losses on shares and real estate amounted to EUR 13 million, compared to a loss of EUR 6 million last year, primarily as a result of lower additions to the provision for guaranteed benefits, partly offset by higher amortization of DPAC due to a higher than expected lapse rate.
Overall standardized new life production showed a decline of 8% to EUR 67 million, primarily due to lower individual life production.
Fee business
Income before realized gains and losses on shares and real estate on fee business increased 120% to EUR 11 million. This increase is largely due to better results in the asset management business and the distribution units, as well as higher results due to TKP Pension.
Off balance sheet production rose 52% to EUR 245 million, compared to EUR 161 million in the first quarter of 2003.
Non-life insurance
Accident and health income before realized gains and losses on shares and real estate was EUR 6 million and flat compared to the same period the prior year. General insurance reported an increase of EUR 3 million to EUR 8 million mainly due to favorable claims experience, higher investment income and cost containment.
Banking activities
Savings account balances at the end of the first quarter 2004, compared to year-end 2003, were slightly lower at EUR 5.6 billion. The decline in account balances reflects AEGON’s focus on profitability in a competitive market. New deposits amounted to EUR 138 million, an 82% decrease compared to the first quarter the prior year. Withdrawal rates have declined significantly compared to the first quarter of the prior year.
Income before realized gains and losses on shares and real estate from banking activities increased to EUR 5 million, reflecting lower expenses and interest charges, partly offset by lower investment income.
Commissions and expenses
Commissions and expenses increased 5% to EUR 252 million compared to the first quarter of the prior year. While commissions declined in the first quarter due to lower production, this was more than offset by lower deferral of DPAC and higher DPAC amortization. Operating expenses, which exclude DPAC amortization and commissions, were equal to last year.
Page 12
United Kingdom
(2003 adjusted for comparison) |
amounts in millions | ||||||||||||||||
GBP | EUR | |||||||||||||||
First three months | First three months | |||||||||||||||
2004 | 2003 | % | 2004 | 2003 | % | |||||||||||
Income by product segment | ||||||||||||||||
(4 | ) | (1 | ) | Traditional life | (6 | ) | (2 | ) | ||||||||
35 | 32 | 9 | Life for account of policyholders | 51 | 48 | 6 | ||||||||||
1 | (2 | ) | Fee business | 2 | (3 | ) | ||||||||||
32 | 29 | 10 | Insurance income | 47 | 43 | 9 | ||||||||||
(4 | ) | (1 | ) | of which general account | (6 | ) | (2 | ) | ||||||||
36 | 30 | 20 | of which policyholders account1 | 53 | 45 | 18 | ||||||||||
32 | 29 | 10 | Income before realized gains and losses on shares and real estate | 47 | 43 | 9 | ||||||||||
0 | (4 | ) | Realized gains and losses on shares and real estate | 0 | (5 | ) | ||||||||||
32 | 25 | 28 | Income before tax | 47 | 38 | 24 | ||||||||||
(9 | ) | (7 | ) | (29) | Corporation tax | (13 | ) | (11 | ) | 18 | ||||||
23 | 18 | 28 | Net income | 34 | 27 | 26 | ||||||||||
Revenues | ||||||||||||||||
35 | 56 | (38) | Life general account single premiums | 51 | 83 | (39) | ||||||||||
36 | 21 | 71 | Life general account recurring premiums | 53 | 32 | 66 | ||||||||||
660 | 716 | (8) | Life policyholders account single premiums | 972 | 1,069 | (9) | ||||||||||
307 | 292 | 5 | Life policyholders account recurring premiums | 451 | 437 | 3 | ||||||||||
1,038 | 1,085 | (4) | Total gross premiums | 1,527 | 1,621 | (6) | ||||||||||
23 | 16 | 44 | Investment income insurance activities | 34 | 24 | 42 | ||||||||||
19 | 13 | 46 | Fees and commissions | 28 | 20 | 40 | ||||||||||
1,080 | 1,114 | (3) | Total revenues | 1,589 | 1,665 | (5) | ||||||||||
250 | (530 | ) | Investment income for account of policyholders | 368 | (792 | ) | ||||||||||
Gross margin, commissions and expenses | ||||||||||||||||
137 | 120 | 14 | Gross margin | 202 | 179 | 13 | ||||||||||
105 | 91 | 15 | Commissions and expenses | 155 | 136 | 14 | ||||||||||
Standardized new premium production life insurance | ||||||||||||||||
724 | 741 | (2) | Single premiums | 1,065 | 1,107 | (4) | ||||||||||
104 | 87 | 20 | Recurring premiums annualized | 152 | 129 | 18 | ||||||||||
176 | 161 | 9 | Total recurring plus 1/10 single | 259 | 240 | 8 | ||||||||||
Off balance sheet production | ||||||||||||||||
26 | 127 | (80) | Mutual funds and other managed assets | 38 | 190 | (80) | ||||||||||
26 | 127 | (80) | Total production off balance sheet | 38 | 190 | (80) | ||||||||||
1 | Includes also fee business. |
Page 13
United Kingdom
Income before realized gains and losses on shares and real estate increased 10% to GBP 32 million in the first quarter of this year compared to GBP 29 million in the first quarter of 2003. Net income, which includes realized gains and losses on shares and real estate, amounted to GBP 23 million, an increase of 28% compared to the same period last year. The increase in net income was primarily due to higher management fees on equity linked funds as a result of higher average daily equity markets. On a net basis, there were no realized gains or losses in the first quarter of 2004 while in the first quarter of 2003 AEGON UK showed a realized net loss of GBP 4 million.
Traditional/Account of Policyholders
Standardized new life production in the first quarter of 2004 increased 9% to GBP 176 million compared to GBP 161 million in the same period of the prior year. The increase is primarily driven by higher recurring and single premiums in group pensions business.
Income before realized gains and losses on shares and real estate from life for account of policyholder of GBP 35 million increased 9% in the first quarter of 2004 compared to the same period in the prior year, due primarily to the higher average level of the equity markets.
Income before realized gains and losses on shares and real estate from traditional life amounted to a loss of GBP 4 million in the first quarter of 2004, reflecting a GBP 5 million charge related to the cost reduction program.
Commission and expenses
Commissions and expenses increased 15% to GBP 105 million, due largely to higher DPAC amortization, growth (including two acquisitions) in the distribution companies and restructuring costs for the expense management program. Before deferral of DPAC, expense savings amounted to GBP 6 million.
Page 14
Other countries
(2003 adjusted for comparison)
amounts in millions | ||||||||
EUR | ||||||||
First three months | ||||||||
2004 | 2003 | % | ||||||
Income by product segment | ||||||||
Traditional life | 4 | 7 | (43) | |||||
Life for account of policyholders | 2 | (2 | ) | |||||
Fee business | 2 | 2 | 0 | |||||
Life insurance | 8 | 7 | 14 | |||||
Accident and health insurance | 2 | 2 | 0 | |||||
General insurance | 13 | 10 | 30 | |||||
Insurance income | 23 | 19 | 21 | |||||
of which general account | 19 | 19 | 0 | |||||
of which policyholders account1 | 4 | 0 | ||||||
Income before realized gains and losses on shares and real estate | 23 | 19 | 21 | |||||
Realized gains and losses on shares and real estate | 3 | (6 | ) | |||||
Income before tax | 26 | 13 | 100 | |||||
Corporation tax | (7 | ) | (3 | ) | 133 | |||
Net income | 19 | 10 | 90 | |||||
Revenues | ||||||||
Life general account single premiums | 4 | 5 | (20) | |||||
Life general account recurring premiums | 109 | 113 | (4) | |||||
Life policyholders account single premiums | 3 | 5 | (40) | |||||
Life policyholders account recurring premiums | 25 | 53 | (53) | |||||
Total life insurance gross premiums | 141 | 176 | (20) | |||||
Accident and health insurance premiums | 31 | 28 | 11 | |||||
General insurance premiums | 90 | 85 | 6 | |||||
Total gross premiums | 262 | 289 | (9) | |||||
Investment income insurance activities | 34 | 30 | 13 | |||||
Fees and commissions | 3 | 3 | 0 | |||||
Total revenues | 299 | 322 | (7) | |||||
Investment income for the account of policyholders | 12 | (25 | ) | |||||
Gross margin, commissions and expenses | ||||||||
Gross margin | 91 | 85 | 7 | |||||
Commissions and expenses | 68 | 66 | 3 | |||||
Standardized new premium production life insurance | ||||||||
Single premiums | 7 | 10 | (30) | |||||
Recurring premiums annualized | 66 | 93 | (29) | |||||
Total recurring plus 1/10 single | 67 | 94 | (29) | |||||
Off balance sheet production | ||||||||
Mutual funds and other managed assets | 43 | 48 | (10) | |||||
Total production off balance sheet | 43 | 48 | (10) | |||||
1 | Includes also fee business. |
Explanatory notes
The published figures are unaudited.
Traditional life includes income on traditional and fixed universal life products.
Life insurance with investments for account of policyholders includes income on variable universal life, unitised pension (UK), other unit-linked products with investments for account of policyholders and with profit fund in the UK.
Fee business includes income on off balance sheet type products.
Gross margin is calculated as the sum of income before realized gains and losses on shares and real estate and commissions and expenses.
Currencies
Income statement items: average rate 1 EUR = USD 1.2506 (2003: USD 1.0730).
Balance sheet items: closing rate 1 EUR = USD 1.2224 (2003: USD 1.0895; year-end 2003: USD 1.2630).
Page 15
Other countries
First quarter 2004 income before realized gains and losses on shares and real estate amounted to EUR 23 million, an increase of 21% from EUR 19 million compared to the first quarter of 2003. The increase mainly reflects improved claims experience in Spain. Net income for the first quarter of 2004, which includes realized gains and losses on shares and real estate, amounted to EUR 19 million, an increase of 90% compared to the prior year. The recognition of EUR 3 million realized gains on shares and real estate in the first quarter of 2004 compared to a EUR 6 million loss in the first quarter of 2003 largely accounts for the increase in net income.
Traditional/Account of Policyholders
Standardized new life production in Other countries decreased 29% to EUR 67 million, largely driven by lower production in Taiwan compared to the very strong first quarter of 2003. New life production in Taiwan declined 21% to NTD 2,256 million (EUR 55 million) during the first quarter of 2004. In Hungary, new standardized life production increased to HUF 1,257 million (EUR 5 million). In Spain, new standardized life production increased EUR 3 million to EUR 8 million.
Commissions & Expenses
Commissions and expenses were up 3% to EUR 68 million for the first quarter of 2004.
Page 16
Summarized consolidated income statements
(2003 adjusted for comparison) |
amounts in millions | ||||||||||||||||
USD | EUR | |||||||||||||||
First three months | First three months | |||||||||||||||
2004 | 2003 | % | 2004 | 2003 | % | |||||||||||
Revenues | ||||||||||||||||
6,612 | 6,066 | 9 | Gross premiums | 5,287 | 5,653 | (6) | ||||||||||
2,195 | 1,665 | 32 | Investment income | 1,755 | 1,552 | 13 | ||||||||||
385 | 310 | 24 | Fees and commissions | 308 | 289 | 7 | ||||||||||
91 | 101 | (10) | Income from banking activities | 73 | 94 | (22) | ||||||||||
9,283 | 8,142 | 14 | Total revenues | 7,423 | 7,588 | (2) | ||||||||||
Benefits and expenses | ||||||||||||||||
689 | 559 | 23 | Premiums to reinsurers | 551 | 521 | 6 | ||||||||||
5,855 | 5,588 | 5 | Benefits paid and provided | 4,682 | 5,208 | (10) | ||||||||||
52 | 52 | 0 | Profit sharing and rebates | 42 | 48 | (13) | ||||||||||
1,757 | 1,365 | 29 | Commissions and expenses for own account | 1,405 | 1,272 | 10 | ||||||||||
223 | 178 | 25 | Interest | 178 | 166 | 7 | ||||||||||
74 | 202 | (63) | Miscellaneous income and expenditure | 59 | 188 | (69) | ||||||||||
8,650 | 7,944 | 9 | Total benefits and expenses | 6,917 | 7,403 | (7) | ||||||||||
633 | 198 | Income before tax | 506 | 185 | 174 | |||||||||||
(190 | ) | (94 | ) | 102 | Corporation tax | (152 | ) | (88 | ) | 73 | ||||||
— | 78 | Transamerica Finance Corporation | — | 73 | ||||||||||||
443 | 182 | 143 | Net income | 354 | 170 | 108 | ||||||||||
Condensed consolidated balance sheets
(2003 adjusted for comparison) |
amounts in millions | ||||||||||||||||||||||
At March 2004 USD | At USD | % | At March 31 2003 USD | At March 31 2003 EUR | At March 31 2004 EUR | At Dec.31 2003 EUR | % | |||||||||||||||
155,115 | 153,068 | 1 | Investments | 143,108 | 131,352 | 126,894 | 121,194 | 5 | ||||||||||||||
208 | 3,643 | (94) | Group companies and participations | 3,715 | 3,410 | 170 | 2,884 | (94) | ||||||||||||||
130,024 | 126,412 | 3 | Investments for account of policyholders | 100,225 | 91,992 | 106,368 | 100,089 | 16 | ||||||||||||||
13,135 | 12,389 | 6 | Other assets | 11,427 | 10,488 | 10,745 | 9,809 | 10 | ||||||||||||||
298,482 | 295,512 | 1 | Total assets | 258,475 | 237,242 | 244,177 | 233,976 | 4 | ||||||||||||||
18,391 | 17,640 | 4 | Total shareholders’ equity1 | 14,301 | 13,126 | 15,045 | 13,967 | 8 | ||||||||||||||
2,369 | 2,431 | (3) | Capital securities | 2,167 | 1,989 | 1,938 | 1,925 | 1 | ||||||||||||||
561 | 571 | (2) | Subordinated loans | 659 | 605 | 459 | 452 | 2 | ||||||||||||||
3,999 | 4,153 | (4) | Senior debt related to insurance activities | 3,272 | 3,003 | 3,271 | 3,288 | (1) | ||||||||||||||
25,320 | 24,795 | 2 | Total capital base | 20,399 | 18,723 | 20,713 | 19,632 | 6 | ||||||||||||||
119,695 | 118,879 | 1 | Technical provisions2 | 111,852 | 102,664 | 97,918 | 94,124 | 4 | ||||||||||||||
130,024 | 126,412 | 3 | Technical provisions with investments for account of policyholders3 | 100,225 | 91,992 | 106,368 | 100,089 | 16 | ||||||||||||||
23,443 | 25,426 | (8) | Other liabilities4 | 25,999 | 23,863 | 19,178 | 20,131 | (5) | ||||||||||||||
298,482 | 295,512 | 1 | Total shareholders’ equity and liabilities | 258,475 | 237,242 | 244,177 | 233,976 | 4 | ||||||||||||||
1 Shareholders’ equity January 1 as reported | 14,231 | 14,132 | 14,231 | |||||||||||||||||||
Effect of SOP 03-1 implementation | (161 | ) | (165 | ) | (161 | ) | ||||||||||||||||
Realized portion of revaluation account transferred to other surplus fund | (2,056 | ) | (1,281 | ) | (2,056 | ) | ||||||||||||||||
Increase in other surplus fund - transferred from revaluation account | 2,056 | 1,281 | 2,056 | |||||||||||||||||||
Shareholders’ equity January 1 adjusted | 14,070 | 13,967 | 14,070 | |||||||||||||||||||
Net income | 170 | 354 | 1,033 | |||||||||||||||||||
Dividend paid | — | — | (147 | ) | ||||||||||||||||||
Paid in surplus / Issuance of new shares | — | — | 3 | |||||||||||||||||||
Currency exchange rate differences | (532 | ) | 463 | (1,730 | ) | |||||||||||||||||
Goodwill | (235 | ) | (89 | ) | (358 | ) | ||||||||||||||||
Repurchased and sold own shares | — | 0 | 19 | |||||||||||||||||||
Change revaluation account | (212 | ) | 208 | 851 | ||||||||||||||||||
Sale TFC businesses | — | 163 | 307 | |||||||||||||||||||
Other changes | (135 | ) | (21 | ) | (81 | ) | ||||||||||||||||
18,391 | 17,640 | Shareholders’ equity end of period5 | 14,301 | 13,126 | 15,045 | 13,967 | ||||||||||||||||
% | % | |||||||||||||||||||||
44,718 | 44,906 | (0) | 2 Of which fixed annuities | 43,551 | 39,973 | 36,582 | 35,555 | 3 | ||||||||||||||
27,955 | 27,209 | 3 | 2 Of which GICs and funding agreements | 26,684 | 24,492 | 22,869 | 21,543 | 6 | ||||||||||||||
(17,251 | ) | (17,260 | ) | 0 | 2 Of which deferred policy acquisition costs | (16,633 | ) | (15,267 | ) | (14,112 | ) | (13,666 | ) | 3 | ||||||||
43,665 | 42,260 | 3 | 3 Of which variable annuities | 33,602 | 30,842 | 35,721 | 33,460 | 7 | ||||||||||||||
6,860 | 7,144 | (4) | 4 Of which savings accounts | 6,844 | 6,282 | 5,612 | 5,656 | (1) | ||||||||||||||
1,957 | 1,759 | 11 | 5 Including revaluation account | 360 | 330 | 1,601 | 1,393 | 15 |
Page 17
REPORT OF THE HOLDING COMPANY
Capital and funding
During the first quarter of 2004 shareholders’ equity increased by EUR 1,078 million to EUR 15,045 million at March 31, 2004. The increase is largely due to positive exchange rate translations of EUR 463 million, an increase in the revaluation reserve of EUR 208 million, the EUR 163 million book gain on the disposal of the majority of TFC’s commercial finance business, and net income of EUR 354 million. In addition, a goodwill charge of EUR 89 million was incurred primarily as a result of the acquisitions of distribution companies in the Netherlands and the United Kingdom. Implementation of Statement of Position (SOP) 03-1 in AEGON USA resulted in a decline of EUR 165 million in the opening balance of shareholders’ equity on January 1, 2004.
In the opening balance of January 1, 2004, the realized part of the revaluation reserve (EUR 1,281 million) has been transferred to Other surplus fund, due to the change in accounting for the realized gains and losses principle on shares and real estate and the discontinuance of the indirect income method. This transfer had no impact on shareholders’ equity. The unrealized revaluation reserve amounted to EUR 1,601 million on March 31, 2004, compared to EUR 1,393 million at year-end 2003.
At March 31, 2004, shareholders’ equity represented 73% of AEGON’s total capital base, while senior and dated subordinated debt comprised 18% of the total capital base. Capital securities accounted for the remaining 9%. AEGON manages its shareholders’ equity to be at least 70% of the total capital base. While shareholders’ equity and debt were influenced by currency exchange rates, the equity to total capital base ratio was not materially affected as the debt is managed in proportion to the local currency of invested capital in the subsidiaries.
Dividend
The proposed 2003 dividend was approved by the shareholders at the Annual General Meeting held on April 22, 2004. After taking into account the interim dividend of EUR 0.20, this represents a final dividend of EUR 0.20 per common share. The final dividend will be paid in cash or shares, at the election of the shareholder. As elected by shareholders, 54% of the final dividend will be paid out in AEGON shares. The final dividend in shares is 4.9% higher than the cash dividend. The stock fraction of 51 for the share dividend was based upon the average price of the AEGON share on the Euronext Amsterdam stock Exchange for the five trading days from May 4 up to and including May 10. The equivalent cash dividend per share in US dollars is approximately USD 0.24 and is based upon the EUR/USD exchange rate of 1.1873 on April 22, 2004.
Interest charges and other
Interest charges and other increased from EUR 119 million to EUR 126 million. Holding company expenses remained flat compared to the same period last year. Interest charges on capital leverage decreased slightly compared to the first three months of last year, with the effect of the lower dollar exchange rate on interest charges related to debt denominated in US Dollars more than off-setting the slightly higher average interest rate on the debt.
The remaining part of TFC is consolidated as of January 1, 2004 and the result on TFC is included in Interest charges and other. TFC’s income before tax amounted to a loss of EUR 26 million, which includes interest charges on high yielding TFC related debt that proved uneconomical to prepay at the time we sold the largest part of TFC. On an operating basis, TFC reported income before tax of EUR 5 million in the first quarter of this year.
European Embedded Value
On May 5, 2004, the CFO Forum published the European Embedded Value Principles. AEGON believes that these principles will provide a consistent basis of reporting companies’ embedded values and lead to greater transparency in insurance reporting. We are fully supportive of this initiative and were actively involved in establishing these principles.
Page 18
Supplemental Disclosure
Comparability Adjustments made to Certain Amounts Reported in the 2003 Financials.
The adjustments made to the 2003 financial amounts presented in this report are made for comparability purposes.
The following adjustments have been made:
1) Accounting changes adopted as of January 1, 2004:
• | Discontinuance of the indirect income method. Gains and losses on shares and real estate are no longer recognized in the income statement by applying the indirect income method, but instead are recognized when realized. |
• | Statement of Position (SOP) 03-1 issued by the Accounting Standards Executive Committee (AcSEC) of the AICPA. SOP 03-1 addresses a number of items within FAS 97, and two elements in particular have an effect on AEGON USA, resulting in a change in the opening balance of shareholders’ equity at January 1, 2004 of EUR 165 million. Firstly, shareholders’ equity has been reduced (EUR 179 million) related to the establishment of additional mortality based reserves on universal life contracts. The implementation changes the timing of the recognition of mortality profits into earnings. Secondly, shareholders’ equity has been increased (EUR 14 million) for the SOP methodology for reserving for minimum guaranteed living and death benefits on variable annuity and variable life contracts. The effects of the adoption of SOP 03-1 are relevant for the Americas and the Group totals only. |
2) The consolidation of Meeùs as of June 30, 2003 was applied retrospectively to January 1, 2003. This change affects the Netherlands and the Group totals only.
Page 19
AEGON reconciliation
amounts in millions | ||||||||||||||||||||||||||||||||
EUR | ||||||||||||||||||||||||||||||||
First Quarter 2003 | Traditional life | Fixed annuities | GICs and funding agreements | Life for account of policyholders1 | Variable annuities | Fee business | Accident health insurance | General insurance | Banking | Interest charges and other | Total | |||||||||||||||||||||
Income before tax as reported | 300 | 60 | 41 | 93 | (4 | ) | 3 | 55 | 15 | 0 | (119 | ) | 444 | |||||||||||||||||||
Indirect income on shares and real estate, before tax | (95 | ) | 0 | 0 | (31 | ) | 0 | 0 | 0 | 0 | 0 | 0 | (126 | ) | ||||||||||||||||||
SOP 03-1 | (11 | ) | 0 | 0 | (3 | ) | 0 | 0 | 0 | 0 | — | 0 | (14 | ) | ||||||||||||||||||
Meeus consolidation | — | — | — | — | — | 5 | — | — | — | — | 5 | |||||||||||||||||||||
Comparable income before realized gains and losses on shares and real estate | 194 | 60 | 41 | 59 | (4 | ) | 8 | 55 | 15 | 0 | (119 | ) | 309 | |||||||||||||||||||
Realized gains and losses on shares and real estate | (124 | ) | ||||||||||||||||||||||||||||||
Corporation tax | (88 | ) | ||||||||||||||||||||||||||||||
Transamerica Finance Corporation | 73 | |||||||||||||||||||||||||||||||
Comparable net income | 170 | |||||||||||||||||||||||||||||||
Second Quarter 2003 | Traditional life | Fixed annuities | GICs and funding agreements | Life for account of policyholders1 | Variable annuities | Fee business | Accident and health insurance | General insurance | Banking | Interest charges and other | Total | |||||||||||||||||||||
Income before tax as reported | 302 | 55 | 55 | 81 | 11 | 17 | 53 | 28 | 2 | (99 | ) | 505 | ||||||||||||||||||||
Indirect income on shares and real estate, before tax | (109 | ) | (17 | ) | (22 | ) | (32 | ) | (1 | ) | 0 | (3 | ) | 0 | 0 | 0 | (184 | ) | ||||||||||||||
SOP 03-1 | (11 | ) | 0 | 0 | (2 | ) | 0 | 0 | 0 | 0 | — | 0 | (13 | ) | ||||||||||||||||||
Meeus consolidation | — | — | — | — | — | (5 | ) | — | — | — | — | (5 | ) | |||||||||||||||||||
Comparable income before realized gains and losses on shares and real estate | 182 | 38 | 33 | 47 | 10 | 12 | 50 | 28 | 2 | (99 | ) | 303 | ||||||||||||||||||||
Realized gains and losses on shares and real estate | (159 | ) | ||||||||||||||||||||||||||||||
Corporation tax | (81 | ) | ||||||||||||||||||||||||||||||
Transamerica Finance Corporation | 96 | |||||||||||||||||||||||||||||||
Comparable net income | 159 | |||||||||||||||||||||||||||||||
Third Quarter 2003 | Traditional life | Fixed annuities | GICs and funding agreements | Life for account of policyholders1 | Variable annuities | Fee business | Accident and health insurance | General insurance | Banking | Interest charges and other | Total | |||||||||||||||||||||
Income before tax as reported | 277 | 100 | 74 | 112 | 14 | 10 | 80 | 17 | 9 | (121 | ) | 572 | ||||||||||||||||||||
Indirect income on shares and real estate, before tax | (98 | ) | (14 | ) | (10 | ) | (30 | ) | (1 | ) | (1 | ) | (2 | ) | (1 | ) | 0 | 0 | (157 | ) | ||||||||||||
SOP 03-1 | (10 | ) | 0 | 0 | (3 | ) | 0 | 0 | 0 | 0 | 0 | 0 | (13 | ) | ||||||||||||||||||
Meeus consolidation | — | — | — | — | — | — | — | — | — | — | 0 | |||||||||||||||||||||
Comparable income before realized gains and losses on shares and real estate | 169 | 86 | 64 | 79 | 13 | 9 | 78 | 16 | 9 | (121 | ) | 402 | ||||||||||||||||||||
Realized gains and losses on shares and real estate | 101 | |||||||||||||||||||||||||||||||
Corporation tax | (111 | ) | ||||||||||||||||||||||||||||||
Transamerica Finance Corporation | 43 | |||||||||||||||||||||||||||||||
Comparable net income | 435 | |||||||||||||||||||||||||||||||
Page 20
AEGON reconciliation
amounts in millions | ||||||||||||||||||||||||||||||||
EUR | ||||||||||||||||||||||||||||||||
Fourth Quarter 2003 | Traditional life | Fixed annuities | GICs and funding agreements | Life for account of policyholders1 | Variable annuities | Fee business | Accident and health insurance | General insurance | Banking | Interest charges and other | Total | |||||||||||||||||||||
Income before tax as reported | 339 | 119 | 43 | 92 | 42 | (24 | ) | 95 | 1 | 9 | (90 | ) | 626 | |||||||||||||||||||
Indirect income on shares and real estate, before tax | (96 | ) | (21 | ) | (17 | ) | (26 | ) | (1 | ) | 0 | (3 | ) | 0 | 0 | 0 | (164 | ) | ||||||||||||||
SOP 03-1 | (10 | ) | 0 | 0 | (3 | ) | 0 | 0 | 0 | 0 | — | 0 | (13 | ) | ||||||||||||||||||
Meeus consolidation | — | — | — | — | — | — | — | — | — | — | 0 | |||||||||||||||||||||
Comparable income before realized gains and losses on shares and real estate | 233 | 98 | 26 | 63 | 41 | (24 | ) | 92 | 1 | 9 | (90 | ) | 449 | |||||||||||||||||||
Realized gains and losses on shares and real estate | (88 | ) | ||||||||||||||||||||||||||||||
Corporation tax | (98 | ) | ||||||||||||||||||||||||||||||
Transamerica Finance Corporation | 6 | |||||||||||||||||||||||||||||||
Comparable net income | 269 | |||||||||||||||||||||||||||||||
Full Year 2003 | Traditional life | Fixed annuities | GICs and funding agreements | Life for account of policyholders1 | Variable annuities | Fee business | Accident and health insurance | General insurance | Banking | Interest charges and other | Total | |||||||||||||||||||||
Income before tax as reported | 1,218 | 334 | 213 | 378 | 63 | 6 | 283 | 61 | 20 | (429 | ) | 2,147 | ||||||||||||||||||||
Indirect income on shares and real estate, before tax | (398 | ) | (52 | ) | (49 | ) | (119 | ) | (3 | ) | (1 | ) | (8 | ) | (1 | ) | 0 | 0 | (631 | ) | ||||||||||||
SOP 03-1 | (42 | ) | 0 | 0 | (11 | ) | 0 | 0 | 0 | 0 | 0 | 0 | (53 | ) | ||||||||||||||||||
Meeus consolidation | — | — | — | — | — | — | — | — | — | — | 0 | |||||||||||||||||||||
Comparable income before realized gains and losses on shares and real estate | 778 | 282 | 164 | 248 | 60 | 5 | 275 | 60 | 20 | (429 | ) | 1,463 | ||||||||||||||||||||
Realized gains and losses on shares and real estate | (270 | ) | ||||||||||||||||||||||||||||||
Corporation tax | (378 | ) | ||||||||||||||||||||||||||||||
Transamerica Finance Corporation | 218 | |||||||||||||||||||||||||||||||
Comparable net income | 1,033 | |||||||||||||||||||||||||||||||
1 | Reclassification from traditional life as part of indirect income is allocated to life for account of policyholders |
Page 21
Americas reconciliation
amounts in millions | |||||||||||||||||||||||||||
USD | USD | EUR | |||||||||||||||||||||||||
First Quarter 2003 | Traditional life | Fixed annuities | GICs and funding agreements | Life for account of policyholders | Variable annuities | Fee business | Accident and health insurance | Total | Total | ||||||||||||||||||
Income before tax as reported | 174 | 64 | 44 | 24 | (4 | ) | 4 | 50 | 356 | 332 | |||||||||||||||||
Indirect income on shares and real estate, before tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
SOP 03-1 | (12 | ) | 0 | 0 | (3 | ) | 0 | 0 | 0 | (15 | ) | (14 | ) | ||||||||||||||
Comparable income before realized gains and losses on shares and real estate | 162 | 64 | 44 | 21 | (4 | ) | 4 | 50 | 341 | 318 | |||||||||||||||||
Comparable income before realized gains and losses on shares and real estate (EUR) | 151 | 60 | 41 | 19 | (4 | ) | 4 | 47 | 318 | ||||||||||||||||||
Realized gains and losses on shares and real estate | (10 | ) | (9 | ) | |||||||||||||||||||||||
Corporation tax | (102 | ) | (96 | ) | |||||||||||||||||||||||
Comparable net income | 229 | 213 | |||||||||||||||||||||||||
Second Quarter 2003 | Traditional life | Fixed annuities | GICs and funding agreements | Life for account of policyholders | Variable annuities | Fee business | Accident and health insurance | Total | Total | ||||||||||||||||||
Income before tax as reported | 170 | 63 | 62 | 26 | 12 | 6 | 57 | 396 | 349 | ||||||||||||||||||
Indirect income on shares and real estate, before tax | (17 | ) | (19 | ) | (24 | ) | (1 | ) | (1 | ) | 0 | (3 | ) | (65 | ) | (59 | ) | ||||||||||
SOP 03-1 | (12 | ) | 0 | 0 | (3 | ) | 0 | 0 | 0 | (15 | ) | (13 | ) | ||||||||||||||
Comparable income before realized gains and losses on shares and real estate | 141 | 44 | 38 | 22 | 11 | 6 | 54 | 316 | 277 | ||||||||||||||||||
Comparable income before realized gains and losses on shares and real estate (EUR) | 123 | 38 | 33 | 21 | 10 | 5 | 47 | 277 | |||||||||||||||||||
Realized gains and losses on shares and real estate | (19 | ) | (17 | ) | |||||||||||||||||||||||
Corporation tax | (80 | ) | (70 | ) | |||||||||||||||||||||||
Comparable net income | 217 | 190 | |||||||||||||||||||||||||
Third Quarter 2003 | Traditional life | Fixed annuities | GICs and funding agreements | Life for account of policyholders | Variable annuities | Fee business | Accident and health insurance | Total | Total | ||||||||||||||||||
Income before tax as reported | 165 | 112 | 83 | 23 | 15 | 1 | 74 | 473 | 422 | ||||||||||||||||||
Indirect income on shares and real estate, before tax | (14 | ) | (16 | ) | (11 | ) | 0 | (1 | ) | (1 | ) | (3 | ) | (46 | ) | (41 | ) | ||||||||||
SOP 03-1 | (12 | ) | 0 | 0 | (3 | ) | 0 | 0 | 0 | (15 | ) | (13 | ) | ||||||||||||||
Comparable income before realized gains and losses on shares and real estate | 139 | 96 | 72 | 20 | 14 | 0 | 71 | 412 | 368 | ||||||||||||||||||
Comparable income before realized gains and losses on shares and real estate (EUR) | 124 | 86 | 64 | 17 | 13 | 0 | 64 | 368 | |||||||||||||||||||
Realized gains and losses on shares and real estate | 13 | 12 | |||||||||||||||||||||||||
Corporation tax | (113 | ) | (101 | ) | |||||||||||||||||||||||
Comparable net income | 312 | 279 | |||||||||||||||||||||||||
Page 22
Americas reconciliation
amounts in millions | |||||||||||||||||||||||||||
USD | USD | EUR | |||||||||||||||||||||||||
Fourth Quarter 2003 | Traditional life | Fixed annuities | GICs and funding agreements | Life for account of policyholders | Variable annuities | Fee business | Accident health | Total | Total | ||||||||||||||||||
Income before tax as reported | 215 | 139 | 52 | 9 | 48 | (30 | ) | 82 | 515 | 435 | |||||||||||||||||
Indirect income on shares and real estate, before tax | (20 | ) | (23 | ) | (21 | ) | (1 | ) | (2 | ) | 0 | (3 | ) | (70 | ) | (60 | ) | ||||||||||
SOP 03-1 | (12 | ) | 0 | 0 | (3 | ) | 0 | 0 | 0 | (15 | ) | (13 | ) | ||||||||||||||
Comparable income before realized gains and losses on shares and real estate | 183 | 116 | 31 | 5 | 46 | (30 | ) | 79 | 430 | 362 | |||||||||||||||||
Comparable income before realized gains and losses on shares and real estate (EUR) | 155 | 98 | 26 | 3 | 41 | (27 | ) | 66 | 362 | ||||||||||||||||||
Realized gains and losses on shares and real estate | (58 | ) | (51 | ) | |||||||||||||||||||||||
Corporation tax | (95 | ) | (79 | ) | |||||||||||||||||||||||
Comparable net income | 277 | 232 | |||||||||||||||||||||||||
Full Year 2003 | Traditional life | Fixed annuities | GICs and funding agreements | Life for account of policyholders | Variable annuities | Fee business | Accident and health insurance | Total | Total | ||||||||||||||||||
Income before tax as reported | 724 | 378 | 241 | 82 | 71 | (19 | ) | 263 | 1,740 | 1,538 | |||||||||||||||||
Indirect income on shares and real estate, before tax | (51 | ) | (59 | ) | (56 | ) | (2 | ) | (3 | ) | (1 | ) | (9 | ) | (181 | ) | (160 | ) | |||||||||
SOP 03-1 | (48 | ) | 0 | 0 | (12 | ) | 0 | 0 | 0 | (60 | ) | (53 | ) | ||||||||||||||
Comparable income before realized gains and losses on shares and real estate | 625 | 319 | 185 | 68 | 68 | (20 | ) | 254 | 1,499 | 1,325 | |||||||||||||||||
Comparable income before realized gains and losses on shares and real estate (EUR) | 553 | 282 | 164 | 60 | 60 | (18 | ) | 224 | 1,325 | ||||||||||||||||||
Realized gains and losses on shares and real estate | (74 | ) | (65 | ) | |||||||||||||||||||||||
Corporation tax | (391 | ) | (346 | ) | |||||||||||||||||||||||
Comparable net income | 1,034 | 914 | |||||||||||||||||||||||||
Page 23
The Netherlands reconciliation
amounts in millions | ||||||||||||||||||
EUR | ||||||||||||||||||
First Quarter 2003 | Traditional life | Life for account of policyholders1 | Fee business | Accident and health insurance | General insurance | Banking | Total | |||||||||||
Income before tax as reported | 133 | 25 | 0 | 6 | 5 | 0 | 169 | |||||||||||
Indirect income on shares and real estate, before tax | (95 | ) | (31 | ) | 0 | 0 | 0 | 0 | (126 | ) | ||||||||
Meeus consolidation | — | — | 5 | — | — | — | 5 | |||||||||||
Comparable income before realized gains and losses on shares and real estate | 38 | (6 | ) | 5 | 6 | 5 | 0 | 48 | ||||||||||
Realized gains and losses on shares and real estate | (104 | ) | ||||||||||||||||
Corporation tax | (8 | ) | ||||||||||||||||
Comparable net income | (64 | ) | ||||||||||||||||
Second Quarter 2003 | Traditional life | Life for account of policyholders1 | Fee business | Accident and health insurance | General insurance | Banking | Total | |||||||||||
Income before tax as reported | 145 | 21 | 10 | 2 | 12 | 2 | 192 | |||||||||||
Indirect income on shares and real estate, before tax | (93 | ) | (31 | ) | 0 | 0 | 0 | 0 | (124 | ) | ||||||||
Meeus consolidation | — | — | (5 | ) | — | — | — | (5 | ) | |||||||||
Comparable income before realized gains and losses on shares and real estate | 52 | (10 | ) | 5 | 2 | 12 | 2 | 63 | ||||||||||
Realized gains and losses on shares and real estate | (145 | ) | ||||||||||||||||
Corporation tax | (19 | ) | ||||||||||||||||
Comparable net income | (101 | ) | ||||||||||||||||
Third Quarter 2003 | Traditional life | Life for account of policyholders1 | Fee business | Accident and health insurance | General insurance | Banking | Total | |||||||||||
Income before tax as reported | 120 | 46 | 6 | 11 | 7 | 9 | 199 | |||||||||||
Indirect income on shares and real estate, before tax | (85 | ) | (30 | ) | 0 | 0 | 0 | 0 | (115 | ) | ||||||||
Meeus consolidation | — | — | 0 | — | — | — | 0 | |||||||||||
Comparable income before realized gains and losses on shares and real estate | 35 | 16 | 6 | 11 | 7 | 9 | 84 | |||||||||||
Realized gains and losses on shares and real estate | 88 | |||||||||||||||||
Corporation tax | (27 | ) | ||||||||||||||||
Comparable net income | 145 | |||||||||||||||||
Page 24
The Netherlands reconciliation
amounts in millions | |||||||||||||||||||
EUR | |||||||||||||||||||
Fourth Quarter 2003 | Traditional life | Life for account of | Fee business | Accident health | General insurance | Banking | Total | ||||||||||||
Income before tax as reported | 150 | 43 | (3 | ) | 25 | (13 | ) | 9 | 211 | ||||||||||
Indirect income on shares and real estate, before tax | (78 | ) | (25 | ) | 0 | 0 | 0 | 0 | (103 | ) | |||||||||
Meeus consolidation | — | — | 0 | — | — | — | 0 | ||||||||||||
Comparable income before realized gains and losses on shares and real estate | 72 | 18 | (3 | ) | 25 | (13 | ) | 9 | 108 | ||||||||||
Realized gains and losses on shares and real estate | (30 | ) | |||||||||||||||||
Corporation tax | (33 | ) | |||||||||||||||||
Comparable net income | 45 | ||||||||||||||||||
Full Year 2003 | Traditional life | Life for account of policyholders1 | Fee business | Accident and health insurance | General insurance | Banking | Total | ||||||||||||
Income before tax as reported | 548 | 135 | 13 | 44 | 11 | 20 | 771 | ||||||||||||
Indirect income on shares and real estate, before tax | (351 | ) | (117 | ) | 0 | 0 | 0 | 0 | (468 | ) | |||||||||
Meeus consolidation | — | — | 0 | — | — | — | 0 | ||||||||||||
Comparable income before realized gains and losses on shares and real estate | 197 | 18 | 13 | 44 | 11 | 20 | 303 | ||||||||||||
Realized gains and losses on shares and real estate | (191 | ) | |||||||||||||||||
Corporation tax | (87 | ) | |||||||||||||||||
Comparable net income | 25 | ||||||||||||||||||
1 | Reclassification from traditional life as part of indirect income is allocated to life for account of policyholders |
Page 25
United Kingdom reconciliation
amounts in millions | ||||||||||||||
GBP | GBP | EUR | ||||||||||||
First Quarter 2003 | Traditional life | Life for account of policyholders | Fee business | Total | Total | |||||||||
Income before tax as reported | (1 | ) | 32 | (2 | ) | 29 | 43 | |||||||
Indirect income on shares and real estate, before tax | 0 | 0 | 0 | 0 | 0 | |||||||||
Comparable income before realized gains and losses on shares and real estate | (1 | ) | 32 | (2 | ) | 29 | 43 | |||||||
Comparable income before realized gains and losses (EUR) on shares and real estate | (2 | ) | 48 | (3 | ) | 43 | ||||||||
Realized gains and losses on shares and real estate | (4 | ) | (5 | ) | ||||||||||
Corporation tax | (7 | ) | (11 | ) | ||||||||||
Comparable net income | 18 | 27 | ||||||||||||
Second Quarter 2003 | Traditional life | Life for account of policyholders | Fee business | Total | Total | |||||||||
Income before tax as reported | 0 | 29 | 0 | 29 | 42 | |||||||||
Indirect income on shares and real estate, before tax | 0 | 0 | 0 | 0 | 0 | |||||||||
Comparable income before realized gains and losses on shares and real estate | 0 | 29 | 0 | 29 | 42 | |||||||||
Comparable income before realized gains and losses (EUR) on shares and real estate | 1 | 41 | 0 | 42 | ||||||||||
Realized gains and losses on shares and real estate | 0 | (1 | ) | |||||||||||
Corporation tax | (9 | ) | (12 | ) | ||||||||||
Comparable net income | 20 | 29 | ||||||||||||
Third Quarter 2003 | Traditional life | Life for account of policyholders | Fee business | Total | Total | |||||||||
Income before tax as reported | 2 | 32 | 0 | 34 | 49 | |||||||||
Indirect income on shares and real estate, before tax | 0 | 0 | 0 | 0 | 0 | |||||||||
Comparable income before realized gains and losses on shares and real estate | 2 | 32 | 0 | 34 | 49 | |||||||||
Comparable income before realized gains and losses (EUR) on shares and real estate | 3 | 46 | 0 | 49 | ||||||||||
Realized gains and losses on shares and real estate | 0 | 0 | ||||||||||||
Corporation tax | (9 | ) | (13 | ) | ||||||||||
Comparable net income | 25 | 36 | ||||||||||||
Page 26
United Kingdom reconciliation
amounts in millions | ||||||||||||
GBP | GBP | EUR | ||||||||||
Fourth Quarter 2003 | Traditional life | Life for account of policyholders | Fee business | Total | Total | |||||||
Income before tax as reported | 0 | 35 | 3 | 38 | 54 | |||||||
Indirect income on shares and real estate, before tax | 0 | 0 | 0 | 0 | 0 | |||||||
Comparable income before realized gains and losses on shares and real estate | 0 | 35 | 3 | 38 | 54 | |||||||
Comparable income before realized gains and losses (EUR) on shares and real estate | 0 | 49 | 5 | 54 | ||||||||
Realized gains and losses on shares and real estate | (6 | ) | (9 | ) | ||||||||
Corporation tax | (9 | ) | (13 | ) | ||||||||
Comparable net income | 23 | 32 | ||||||||||
Full Year 2003 | Traditional life | Life for policyholders | Fee business | Total | Total | |||||||
Income before tax as reported | 1 | 128 | 1 | 130 | 188 | |||||||
Indirect income on shares and real estate, before tax | 0 | 0 | 0 | 0 | 0 | |||||||
Comparable income before realized gains and losses on shares and real estate | 1 | 128 | 1 | 130 | 188 | |||||||
Comparable income before realized gains and losses (EUR) on shares and real estate | 2 | 184 | 2 | 188 | ||||||||
Realized gains and losses on shares and real estate | (10 | ) | (15 | ) | ||||||||
Corporation tax | (34 | ) | (49 | ) | ||||||||
Comparable net income | 86 | 124 | ||||||||||
Page 27
Other countries reconciliation
amounts in millions | ||||||||||||||||
EUR | ||||||||||||||||
First Quarter 2003 | Traditional life | Life for policyholders | Fee business | Accident and health | General insurance | Total | ||||||||||
Income before tax as reported | 7 | (2 | ) | 2 | 2 | 10 | 19 | |||||||||
Indirect income on shares and real estate, before tax | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||
Comparable income before realized gains and losses on shares and real estate | 7 | (2 | ) | 2 | 2 | 10 | 19 | |||||||||
Realized gains and losses on shares and real estate | (6 | ) | ||||||||||||||
Corporation tax | (3 | ) | ||||||||||||||
Comparable net income | 10 | |||||||||||||||
Second Quarter 2003 | Traditional life | Life for policyholders | Fee business | Accident and insurance | General insurance | Total | ||||||||||
Income before tax as reported | 7 | (5 | ) | 2 | 1 | 16 | 21 | |||||||||
Indirect income on shares and real estate, before tax | (1 | ) | 0 | 0 | 0 | 0 | (1 | ) | ||||||||
Comparable income before realized gains and losses on shares and real estate | 6 | (5 | ) | 2 | 1 | 16 | 20 | |||||||||
Realized gains and losses on shares and real estate | 4 | |||||||||||||||
Corporation tax | (7 | ) | ||||||||||||||
Comparable net income | 17 | |||||||||||||||
Third Quarter 2003 | Traditional life | Life for policyholders | Fee business | Accident and health insurance | General insurance | Total | ||||||||||
Income before tax as reported | 7 | 0 | 3 | 3 | 10 | 23 | ||||||||||
Indirect income on shares and real estate, before tax | 0 | 0 | 0 | 0 | (1 | ) | (1 | ) | ||||||||
Comparable income before realized gains and losses on shares and real estate | 7 | 0 | 3 | 3 | 9 | 22 | ||||||||||
Realized gains and losses on shares and real estate | 1 | |||||||||||||||
Corporation tax | (5 | ) | ||||||||||||||
Comparable net income | 18 | |||||||||||||||
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Other countries reconciliation
amounts in millions | ||||||||||||||||
EUR | ||||||||||||||||
Fourth Quarter 2003 | Traditional life | Life for policyholders | Fee business | Accident and health | General insurance | Total | ||||||||||
Income before tax as reported | 7 | (7 | ) | 1 | 1 | 14 | 16 | |||||||||
Indirect income on shares and real estate, before tax | (1 | ) | 0 | 0 | 0 | 0 | (1 | ) | ||||||||
Comparable income before realized gains and losses on shares and real estate | 6 | (7 | ) | 1 | 1 | 14 | 15 | |||||||||
Realized gains and losses on shares and real estate | 2 | |||||||||||||||
Corporation tax | (5 | ) | ||||||||||||||
Comparable net income | 12 | |||||||||||||||
Full Year 2003 | Traditional life | Life for policyholders | Fee business | Accident and health insurance | General insurance | Total | ||||||||||
Income before tax as reported | 28 | (14 | ) | 8 | 7 | 50 | 79 | |||||||||
Indirect income on shares and real estate, before tax | (2 | ) | 0 | 0 | 0 | (1 | ) | (3 | ) | |||||||
Comparable income before realized gains and losses on shares and real estate | 26 | (14 | ) | 8 | 7 | 49 | 76 | |||||||||
Realized gains and losses on shares and real estate | 1 | |||||||||||||||
Corporation tax | (20 | ) | ||||||||||||||
Comparable net income | 57 | |||||||||||||||
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Cautionary note regarding Regulation G (non-GAAP measure)
This press release includes a non-GAAP financial measure: Net income before realized gains and losses on shares and real estate. The reconciliation of this measure to the most comparable GAAP measure is shown below in accordance with Regulation G. AEGON believes the non-GAAP measure shown herein, together with the GAAP information, provides a meaningful measure for the investing public to evaluate AEGON’s business relative to the businesses of our peers.
First quarter 2004 | First quarter 2003 as adjusted | |||||||||
Per common | Per common | |||||||||
In EUR million | share | In EUR million | share | |||||||
Net income before realized gains and losses on shares and real estate | 284 | 0.18 | 286 | 0.18 | ||||||
Realized gains and losses on shares and real estate | 89 | (124 | ) | |||||||
Corporation tax on realized gains and losses on shares and real estate | (19 | ) | 8 | |||||||
Net income | 354 | 0.22 | 170 | 0.10 |
Cautionary note regarding the use of local currencies and constant currency exchange rates
This press release contains certain information about our results and financial condition in USD for the Americas and in GBP for the United Kingdom because those businesses operate and are managed primarily in those currencies. Certain comparative information presented on a constant currency basis eliminates the effects of changes in currency exchange rates. None of this information is a substitute for or superior to financial information about us presented in euro, which is the currency of our primary financial statements.
Cautionary note regarding forward looking statements
The statements contained in this press release that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “believe”, “estimate”, “intend”, “may”, “expect”, “anticipate”, “predict”, “project”, “counting on”, “plan”, “continue”, “want”, “forecast”, “should”, “would”, “is confident” and “will” and similar expressions as they relate to us are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. We undertake no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.
All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations, including, but not limited to, the following:
• | Changes in general economic conditions, particularly in the United States, the Netherlands and the United Kingdom; |
• | Changes in the performance of financial markets, including emerging markets, including: |
• | The frequency and severity of defaults by issuers in our fixed income investment portfolios; and |
• | The effects of corporate bankruptcies and/or accounting restatements on the financial markets and the resulting decline in value of equity and debt securities we hold; |
• | The frequency and severity of insured loss events; |
• | Changes affecting mortality, morbidity and other factors that may affect the profitability of our insurance products; |
• | Changes affecting interest rate levels and continuing low interest rate levels; |
• | Changes affecting currency exchange rates, including the EUR/USD and EUR/GBP exchange rates; |
• | Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets; |
• | Changes in laws and regulations, particularly those affecting our operations, the products we sell and the attractiveness of certain products to our consumers; |
• | Regulatory changes relating to the insurance industry in the jurisdictions in which we operate; |
• | Acts of God, acts of terrorism and acts of war; |
• | Changes in the policies of central banks and/or foreign governments; |
• | Litigation or regulatory action that could require us to pay significant damages or change the way we do business; |
• | Customer responsiveness to both new products and distribution channels; |
• | Competitive, legal, regulatory, or tax changes that affect the distribution cost of or demand for our products; |
• | Our failure to achieve anticipated levels of earnings or operational efficiencies as well as other cost saving initiatives. |
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AEGON N.V.
Group Corporate Affairs & Investor Relations
The Hague, the Netherlands | ||
Analysts & Investors | +31 (0)70 344 83 05 | |
Media | +31 (0)70 344 83 44 | |
gca-ir@aegon.nl | ||
Baltimore, the United States | ||
Analysts & Investors | +1 410 576 4577 | |
Media | +1 410 576 4542 | |
ir@aegonusa.com |
Web site: www.aegon.com
Analyst and investor conference call
An analyst and investor conference call on the first quarter 2004 earnings will be held today at 15.00 CET (14.00 BST; 09.00 a.m. ET).
The phone numbers to listen to the conference call are as follows:
+31 (0) 45 6316901 | (the Netherlands) | |
+44 (0) 208 4006308 | (United Kingdom) | |
+1 303 2622130 | (United States and Canada) |
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