AXA Financial, Inc. | ||||||||||
Reconciliation of the Contribution to IFRS Underlying Earnings, Adjusted Earnings and Net Income, Group Share | ||||||||||
to AXA Financial's US GAAP Net Income | ||||||||||
(in millions) | ||||||||||
12 Months December | ||||||||||
2006 | 2007 | |||||||||
Contribution to IFRS Underlying Earnings, per AXA Press Release | in Euro | |||||||||
US Life & Savings | 1,000 | 883 | ||||||||
Asset Management | 302 | 314 | ||||||||
AXA Financial Holding Company | (135 | ) | (102 | ) | ||||||
Total Contribution to IFRS Underlying Earnings | in Euro | 1,167 | 1,095 | |||||||
Net realized capital gains attributable to shareholders | 31 | (32 | ) | |||||||
Total Contribution to IFRS Adjusted Earnings | in Euro | 1,198 | 1,063 | |||||||
Profit or loss on financial assets (under Fair Value option) and derivatives | 4 | 28 | ||||||||
Exceptional operations and discontinued operations | 145 | (4 | ) | |||||||
Goodwill and related intangibles | (10 | ) | (21 | ) | ||||||
Total Contribution to IFRS Net Income, Group Share | in Euro | 1,337 | 1,066 | |||||||
Average exchange rate | US$1.00 = | 0.796 | 0.730 | |||||||
in US$ | 1,679 | 1,460 | ||||||||
Reconciling items: | ||||||||||
(A) | GMIB/DB Reserves & Reinsurance Asset | (199 | ) | 166 | ||||||
(B) | Investment income & capital gains (losses) | (3 | ) | (12 | ) | |||||
(C) | Amortization of other intangible assets | (19 | ) | (19 | ) | |||||
(D) | Employee Benefits Plan - Fresh Start, net of DAC capitalization | (76 | ) | (49 | ) | |||||
(E) | Employee Benefits Plan - One Time Retiree Plan Adjustment | 20 | �� | - | ||||||
(F) | Employee stock based compensation | (30 | ) | (43 | ) | |||||
(G) | Other Reserve adjustment - including SOP 03-01 | (22 | ) | 20 | ||||||
(H) | Amortization of DAC & VOBA | 66 | (162 | ) | ||||||
(I) | Tax benefits on Goodwill amortization | 36 | - | |||||||
(J) | Gains on issuance of Alliance units | (102 | ) | 17 | ||||||
(K) | Tax Settlement | (34 | ) | - | ||||||
(L) | Tax Reserves Release | - | (45 | ) | ||||||
(M) | MONY Integration Expenses | (6 | ) | 2 | ||||||
Other | (29 | ) | (11 | ) | ||||||
Total Reconciling items | (398 | ) | (136 | ) | ||||||
Consolidated US GAAP Net Earnings | $ | 1,281 | $ | 1,324 | ||||||
(A) | Reflects the accounting for reinsurance contracts ceding variable annuity Guaranted Minimum Income Benefit ('GMIB') features as derivative contracts at fair value under US GAAP vs. ceded reinsurance reserves under IFRS; and insurance reserves for Guaranteed Minimum Death Benefit ("GMDB") and GMIB features subject to economic hedging programs on an SOP 03-1 basis under USGAAP vs. remeasurement to reflect current market conditions under IFRS. |
(B) | Primarily reflects different accounting methodologies for impairments under IFRS and USGAAP. |
(C) | Reflects amortization of acquisition related intangible assets in USGAAP on acquisitions prior to adoption of IFRS. |
(D) | Represents impact of IFRS initial implementation "fresh start" adjustment to eliminate the portion of employee benefit liabilities related to deferred actuarial gains and losses, which has resulted in a reduction of ongoing IFRS employee benefit expenses compared to US GAAP over the period in which those deferred gains and losses would otherwise have been amortized. |
(E) | Relates to the announced freeze on employer contributions to the retiree health plan for participants who retire after December 31, 2006. The IFRS impact was lower than the GAAP impact due to the IFRS "fresh start" adjustment. |
(F) | Primarily reflects different accounting methodologies for share based awards under IFRS and USGAAP. |
(G) | Represents adjustment of MVA liabilities from the IFRS basis accrued account balance (with interest rate floors reflected on a contract-by-contract basis) to the US GAAP basis (which considers the impact of interest rate floors on a block of business basis) and adjustments to the liability related to group pension contracts and certain mortality and annuitization benefits, such as the No Lapse Guarantee feature contained in variable and universal life contracts under SOP03-01. |
(H) | Represents DAC and VOBA reactivity to other IFRS adjustments. |
(I) | Represents the tax benefit associated with the Bernstein goodwill previously recognized in IFRS Net Income which is excluded from GAAP net earnings due to the elimination of Goodwill amortization under SFAS No.142. |
(J) | Represents releases of Federal and State deferred taxes in IFRS on current and prior periods' dilution gains in 2006 and different accounting methodologies related to the issuance of AllianceBernstein units. |
(K) | Represents releases of deferred taxes under IFRS due to settlement. |
(L) | Represents release of tax reserves recognized in IFRS Earnings and credited to Equity under USGAAP upon adoption of FIN 48 as of 01/01/07. |
(M) | Represents releases of integration-related accruals which are excluded from USGAAP Net Earnings. |