Aviva 2002 Annual Report Download - page 106

Summarised consolidated profit and loss account – achieved profit basis
For the year ended 31 December 2002
Restated*
2002 2002 2001
1m£m £m
Operating profit
2,419 Life achieved operating profit 1,524 1,665
97 Health 61 70
8Fund management 529
1,398 General insurance 881 876
(109) Non-insurance operations (69) 7
(346) Corporate costs (218) (187)
(689) Unallocated interest charges (434) (426)
(48) Wealth management (30) (99)
Operating profit – continuing operations before tax,
2,730 amortisation of goodwill and exceptional items 1,720 1,935
Discontinued operations
124 Australia and New Zealand general insurance operations 78 69
–US general insurance operations –(21)
Operating profit - before tax, amortisation of goodwill and
2,854 exceptional items 1,798 1,983
(214) Amortisation of goodwill (135) (87)
–Financial Services Compensation Scheme levy –(31)
–Integration costs –(59)
2,640 Operating profit before tax 1,663 1,806
(5,564) Variation from longer-term investment return (3,504) (2,584)
(890) Effect of economic assumption changes (561) 1
(90) Change in the equalisation provision (57) (56)
(6) (Loss)/profit on the disposal of subsidiary undertakings (4) 287
(3,910) Loss on ordinary activities before tax (2,463) (546)
Tax on operating profit – continuing operations before amortisation of
(843) goodwill and exceptional items (531) (616)
1,559 Tax on loss on other ordinary activities 982 740
(3,194) Loss on ordinary activities after tax (2,012) (422)
(52) Minority interests (33) (80)
(3,246) Loss for the financial year (2,045) (502)
(27) Preference dividends (17) (17)
(3,273) Loss for the financial year attributable to equity shareholders (2,062) (519)
(824) Ordinary dividends (519) (857)
(4,097) Retained loss (2,581) (1,376)
*Restated for the effect of Financial Reporting Standard 19.
Earnings per share
Operating profit on an achieved profit basis before amortisation of goodwill
and exceptional items, after tax, attributable to equity shareholders in respect of:
76.7c – continuing operations 48.3p 53.7p
81.7c –continuing and discontinued operations 51.5p 55.5p
(145.2)c Loss attributable to equity shareholders (91.5)p (23.1)p
(145.2)c Loss attributable to equity shareholders – diluted** (91.5)p (23.1)p
**As required by FRS14 “Earnings per share”, the impact of the dilutive effect is not recognised as it would result in a smaller loss.
Basis of preparation – achieved profit basis
The achieved profit statement above includes the results of the Group’s life operations reported under the achieved profit basis combined
with the modified statutory basis results of the Group’s non-life operations set out on pages 44 to 90. In the directors’ opinion, the
achieved profit basis provides a more accurate reflection of the performance of the Group’s life operations year on year than results
under the modified statutory basis. The achieved profit methodology used is in accordance with the guidance on “Supplementary
reporting for long-term insurance business (the achieved profits method)” circulated by the Association of British Insurers in December
2001. Further details on the methodology and assumptions are set out on pages 96 to 97.
The results of the Group’s life operations under the modified statutory basis, which is the basis used in the annual statutory accounts,
can be found on pages 44 to 90.
The contribution from the Group’s share of the alliance with The Royal Bank of Scotland Group (RBSG) is incorporated within the
achieved operating profit. Goodwill amortised in the year in respect of the Group’s holding in the associated company, RBS Life
Investments Limited, is included within the ‘Amortisation of goodwill’ above.
The results for 2002 and 2001 have been audited by the auditors Ernst & Young LLP. Their audit report in respect of 2002 is on page 98.
Alternative method of reporting long-term business
92 Aviva plc
Annual report + accounts 2002