|
REVIEW OF OPERATIONS
 |
|
|
|
| RESULTS OF OPERATIONS |
2004 |
20031 |
|
| |
in million
EUR |
in million
EUR |
% |
| INCOME BY PRODUCT SEGMENT |
|
|
|
| Traditional life |
726 |
778 |
(7) |
| Fixed annuities |
313 |
282 |
11 |
| GICs and funding agreements |
204 |
164 |
24 |
| Life for account of policyholders |
355 |
248 |
43 |
| Variable annuities |
161 |
60 |
|
| Fee business |
54 |
5 |
|
| LIFE INSURANCE |
1,813 |
1,537 |
18 |
| Accident and health insurance |
294 |
275 |
7 |
| General insurance |
107 |
60 |
78 |
| TOTAL INSURANCE ACTIVITIES |
2,214 |
1,872 |
18 |
| Banking activities |
22 |
20 |
10 |
| Interest charges and other |
(453) |
(429) |
6 |
| INCOME BEFORE REALIZED GAINS AND LOSSES |
|
|
|
| ON SHARES AND REAL ESTATE |
1,783 |
1,463 |
22 |
| Realized gains and losses on shares and real estate |
600 |
(270) |
|
| INCOME BEFORE TAX AND EXCEPTIONAL ITEMS |
2,383 |
1,193 |
100 |
| Exceptional items |
(218) |
0 |
|
| INCOME BEFORE TAX |
2,165 |
1,193 |
81 |
| Corporation tax |
(511) |
(378) |
35 |
| Non-consolidated ventures |
9 |
218 |
|
| NET INCOME |
1,663 |
1,033 |
61 |
| NET INCOME BEFORE REALIZED GAINS AND LOSSES |
|
|
|
| ON SHARES AND REAL ESTATE AND BEFORE EXCEPTIONAL ITEMS |
1,386 |
1,277 |
9 |
|
1 The 2003 results have been adjusted to reflect the changes in accounting principles implemented as of January 1, 2004. See also the Accounts section for a reconciliation from 2003 reported numbers to adjusted numbers.
|
| INCOME GEOGRAPHICALLY |
|
|
|
|
| Americas |
1,775 |
1,260 |
41 |
| The Netherlands |
720 |
112 |
|
| United Kingdom |
218 |
173 |
26 |
| Other countries |
123 |
77 |
60 |
| INCOME BEFORE TAX BUSINESS UNITS |
2,836 |
1,622 |
75 |
| Interest charges and other |
(453) |
(429) |
6 |
| INCOME BEFORE TAX AND EXCEPTIONAL ITEMS |
2,383 |
1,193 |
100 |
| Exceptional items |
(218) |
|
|
| INCOME BEFORE TAX |
2,165 |
1,193 |
81 |
| Corporation tax |
(511) |
(378) |
35 |
| Non-consolidated ventures |
9 |
218 |
|
| NET INCOME |
1,663 |
1,033 |
61 |
|
|
|
|
|
|
|
REVENUES GEOGRAPHICALLY 2004
|
|
|
|
|
|
| in million EUR |
Americas |
The
Netherlands |
United
Kingdom |
Other
countries |
Total |
| Total life insurance gross premiums |
6,517 |
3,079 |
5,898 |
875 |
16,369 |
| Accident and health insurance premiums |
2,043 |
187 |
|
88 |
2,318 |
| General insurance premiums |
|
445 |
|
368 |
813 |
| Total gross premiums |
8,560 |
3,711 |
5,898 |
1,331 |
19,500 |
| Investment income insurance activities |
5,377 |
1,479 |
152 |
144 |
7,152 |
| Fees and commissions |
811 |
297 |
120 |
16 |
1,244 |
| Income from banking activities |
|
|
284 |
|
284 |
| Total revenues business units |
14,748 |
5,771 |
6,170 |
1,491 |
28,180 |
| Income from other activities |
|
|
|
|
333 |
| TOTAL REVENUES |
|
|
|
|
28,513
|
| Number of employees, |
|
|
|
|
|
| including agent-employees |
14,209 |
5,954 |
4,513 |
2,770 |
27,446 |
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 and exceptional items. Net income before realized gains and losses on shares and real estate and before exceptional items 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 below.
|
|
|
| |
2004
in million
EUR |
2003
in million
EUR |
| Net income before realized gains and losses on shares and real estate |
|
|
| and before exceptional items |
1,386 |
1,277 |
| Realized gains and losses on shares and real estate |
600 |
(270) |
| Corporation tax on realized gains and losses on shares and real estate |
(105) |
26 |
| Exceptional items |
(218) |
0 |
| NET INCOME |
1,663 |
1,033 |
RESULTS
Income before realized gains and losses on shares and real estate increased 22% to EUR 1,783 million in 2004. The increase, to which all major country units contributed, mainly reflects improved credit and equity markets and actions taken by management to improve product spreads and overall profitability.
Net income before realized gains and losses on shares and real estate and before exceptional items increased 9% to EUR 1,386 million in 2004. This increase reflects the improved results from AEGON’s country units, which more than offset the lower income from Transamerica Finance Corporation (a net loss of EUR 20 million compared to a net profit of EUR 218 million in 2003). Net income, which includes realized gains and losses on shares and real estate and an EUR 218 million exceptional charge, increased to EUR 1,663 million compared to EUR 1,033 million in 2003. The exceptional charge relates to the agreement with Dexia to resolve the dispute over the sale of Labouchere to Dexia in 2000. The effective tax rate declined to 24% in 2004 from 32% in 2003 primarily reflecting higher realized gains on tax preferred investments in the Netherlands and a one-time reduction in taxes in the United States.
Commission and expenses increased 8% to EUR 5,756 million in 2004. Total operating expenses were 10% higher than in 2003 at EUR 3,111 million. However, EUR 291 million of the increase was caused by the consolidation of the remaining TFC activities in 2004. Excluding this effect operating expenses were level with 2003. Main factors impacting expenses include additional employee pension expense, post-retirement benefits costs and increased regulatory and compliance costs, offset by expense savings in operating units.
Revenue generating investments amounted to EUR 296 billion on December 31, 2004. This represents an increase of 4% over the prior year.
Read more on our operations in the Americas, Netherlands, UK, and other countries. |
