AXA Financial, Inc.
Reconciliation of the Contribution to IFRS Underlying Earnings
to AXA Financial's US GAAP Net Earnings
(in millions)
December
---------------------------
2004 2005
------------ ---------
Contribution to IFRS Underlying Earnings per AXA Press Release in Euro
US Life & Savings 664 866
Asset Management 204 240
AXA Financial Holding Company (78) (110)
------------ ---------
Total Contribution to IFRS Underlying Earnings 790 996
Total after-tax capital Gains (losses), net 50 14
------------ ---------
Total Contribution to IFRS Adjusted Earnings in Euro 840 1,010
Average exchange rate US$1.00 = 0.804 0.803
in US$ 1,045 1,256
Reconciling items:
(A) GMIB/DB Reserves & Reinsurance Assets (47) (33)
(B) Investment income & capital gains (losses) 29 4
(C) Interest rate swap contracts (12) 19
(D) Gains on Transfers of Alliance Cash Management Services and India /
South Africa mutual fund management 10
(E) AXF Holding - reduction of state tax on DLJ sale 54
(F) Amortization of goodwill & other intangible assets (29) (30)
(G) Employee Benefits Plan - Fresh Start, net of DAC capitalization (36) (50)
(H) Employee stock based compensation 19 13
(I) Other Reserve adjustment - incuding SOP 03-01 (12) (7)
(J) Amortization of DAC & VOBA 10 12
(K) MONY integration expense (52) (11)
(L) Tax benefits on Goodwill amortization (15) (15)
(M) Loss from sale of Advest (89)
Other (9) (5)
------------ ---------
Total Reconciling items (100) (182)
------------ ---------
Consolidated US GAAP Net Earnings $ 945 $ 1,074
============ =========
(A) Reflects the accounting for reinsurance contracts ceding variable
annuity Guaranted Minimum Income Benefit ('GMIB') risks and the
program to hedge certain risks associated with Guaranteed Minimum
Death Benefit ("GMDB") features as derivative contracts at fair value
under US GAAP vs. ceded reinsurance reserves and derivative contracts
qualifying for hedge accounting, respectively, under IFRS.
(B) Primarily reflects accounting for certain equity investments on the
equity method of accounting under US GAAP vs. historical cost less
cash distributions and valuation allowances under IFRS.
(C) Reflects the accounting for interest rate swaps contracts as
derivative contracts at fair value under US GAAP which changes in fair
value are excluded from IFRS Adjusted Earnings.
(D) Represents the after-tax and after minority interest gains which are
excluded from IFRS Adjusted Earnings.
(E) Reflects the earnings impact of the reduction of state tax liabilities
associated with the 2000 sale of DLJ, treated as a "one off item" and
excluded from IFRS Adjusted Earnings.
(F) Reflects amortization of acquisition related intangible assets
excluded from IFRS Adjusted Earnings.
(G) 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.
(H) Represents adjustments to reverse the IFRS accounting for post-2002
stock option awards at fair value.
(I) 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.
(J) Represents DAC and VOBA reactivity to other IFRS adjustments.
(K) Represents integration related expenses that were excluded from IFRS
Adjusted Earnings.
(L) Represents the tax benefit associated with the Bernstein goodwill
recognized in IFRS Adjusted Earnings which is excluded from GAAP
net earnings due to the elimination of Goodwill amortization under
SFAS No.142.
(M) Represents the after-tax loss which is excluded from IFRS Adjusted
Earnings.
AXA Financial, Inc.
Reconciliation of the Contribution to IFRS Net Income, Group Share
to AXA Financial's US GAAP Net Earnings
(in millions)
December
---------------------------
2004 2005
------------ ---------
Contribution to IFRS Net Income, Group Share per AXA Press Release in Euro
US Life & Savings 577 872
Asset Management 207 254
AXA Financial Holding Company (43) (170)
------------ ---------
Total Contribution to IFRS Net Income, Group Share in Euro 741 956
Average exchange rate US$1.00 = 0.804 0.803
in US$ 922 1,191
Reconciling items: - -
(A) GMIB/DB Reserves & Reinsurance Assets (47) (33)
(B) Investment income & capital gains (losses) 7 1
(C) Amortization of goodwill & other intangible assets (23) (20)
(D) Employee Benefits Plan - Fresh Start, net of DAC capitalization (36) (50)
(E) Employee stock based compensation 19 13
(F) Other Reserve adjustment - including SOP 03-01 (12) (7)
(G) Amortization of DAC & VOBA 10 12
(H) MONY integration expense 130 (11)
(I) Tax benefits on Goodwill amortization (15) (15)
Other (9) (5)
------------ ---------
Total Reconciling items 23 (117)
------------ ---------
Consolidated US GAAP Net Earnings $ 945 $ 1,074
============ =========
(A) Reflects the accounting for reinsurance contracts ceding variable
annuity Guaranted Minimum Income Benefit ("GMIB") risks and the
program to hedge certain risks associated with Guaranteed Minimum
Death Benefit ("GMDB") features as derivative contracts at fair value
under US GAAP vs. ceded reinsurance reserves and derivative contracts
qualifying for hedge accounting, respectively, under IFRS.
(B) Primarily reflects different accounting methodologies for impairments
under IFRS and US GAAP.
(C) Reflects amortization of acquisition related intangible assets in
US GAAP 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) Represents adjustments to reverse the IFRS accounting for post-2002
stock option awards at fair value.
(F) 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.
(G) Represents DAC and VOBA reactivity to other IFRS adjustments.
(H) Represents differences in accounting methodologies for acquisition
related expenses under US GAAP and IFRS.
(I) Represents the tax benefit associated with the Bernstein goodwill
recognized in IFRS Net Income which is excluded from US GAAP net
earnings due to the elimination of Goodwill amortization under SFAS
No.142.