Aviva 2007 Annual Report Download - page 20
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Please find page 20 of the 2007 Aviva annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Operating profit
Group operating profit – IFRS basis
Restated**
12 months 12 months
2007 2006
£m £m
Long-term business* 1,634 1,334
Fund management* 155 155
General insurance and health 1,033 1,686
Other operations and regional costs* (74) (25)
Regional operating profit before tax 2,748 3,150
Corporate centre (157) (160)
Group debt costs and other interest (363) (381)
IFRS operating profit before tax 2,228 2,609
Group operating profit – EEV basis
Restated**
12 months 12 months
2007 2006
£m £m
Long-term business* 2,753 2,033
Fund management* 90 96
General insurance and health 1,033 1,686
Other operations and regional costs* (70) (23)
Regional operating profit before tax 3,806 3,792
Corporate centre (157) (160)
Group debt costs and other interest (363) (381)
EEV operating profit before tax 3,286 3,251
* The results of the group’s asset management and other operations
that arise from providing fund management and other services to the
life business have been included in the long-term business operating
return on an EEV basis. On an IFRS basis, they are included in fund
management and other operations.
** We have changed the definition of IFRS basis operating profit this year
and restated our 2006 comparatives. This also has a small impact on
the general insurance results shown in the EEV basis. Details are shown
in note 2 to the financial statements.
Our operating profit before tax, including long-term
operating return on an EEV basis, grew to £3,286 million
(2006 restated: £3,251 million). This reflected a strong
result in our life businesses offset by decreased profits
from the general insurance business largely due to the
exceptional adverse weather experienced in the UK
during the year.
On an IFRS basis, operating profit decreased by
15% to £2,228 million (2006 restated: £2,609 million).
The operating results of our long-term savings,
fund management, general insurance and other operations
are discussed in detail in the regional sections of this report.
Corporate centre
Corporate costs for the year were £157 million (2006:
£160 million). Within this, costs relating to staff profit
share and incentive plans remained at £17 million
(2006: £17 million). Central spend decreased to
£114 million (2006: £126 million), reflecting the drive
towards a leaner, activist centre. Project costs increased
to £26 million (2006: £17 million) as we continue to
invest in our brand and global finance strategy.
Group debt costs and other interest
Group debt costs and other interest of £363 million
(2006: £381 million) comprise internal and external
interest on borrowings, subordinated debt and
intra-group loans not allocated to local business
operations. Net pension income is also included,
being the expected return on pension scheme assets
less the interest charge on pension scheme liabilities.
Net income from the staff pension scheme fell to
£75 million (2006: £77 million).
Interest costs in the period were lower at £438 million
(2006: £458 million) reflecting a reduction in internal
interest following the restructuring of internal loan
agreements. This was offset by an increase in the
interest on subordinated debt due to amounts raised
in December 2006 to repay locally held AmerUs debt
and on commercial paper raised to help fund the
AmerUs acquisition.
Interest on the £990 million direct capital instrument
issued in 2004 is not included within group debt costs as
it is instead treated as an appropriation of profits retained
in the period.
Aviva plc
Annual Report and
Accounts 2007
16
Business
review
Business review continued:
Group performance
Region %
Regional analysis of EEV operating profit
4
2
3
1
1 UK 35
2 Europe 52
3 N. America 10
4 Asia Pacific 3
Total 100
Region %
Regional analysis of total sales
4
2
3
1
1 UK 42
2 Europe 40
3 N. America 10
4 Asia Pacific 8
Total 100
0
10,000
20,000
40,000
30,000
2004 2005 2006 2007
50,000
(£m)
Total sales