REG - Phoenix Grp Hldgs - 2014 Interim Results <Origin Href="QuoteRef">PHNX.L</Origin> - Part 2
29/10/2014 14:21
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258 16
From discontinued operations (27) (28)
231 (12)
Tax charge attributable to owners from continuing operations (49) (2)
Tax credit attributable to owners from discontinued operations 9 6
Profit/(loss) for the period attributable to owners 191 (8)
Phoenix Life
Operating profit for Phoenix Life is based on expected investment returns on financial investments backing owners' and
policyholder funds over the reporting period, with consistent allowance for the corresponding expected movements in
liabilities. The principal assumptions underlying the calculation of the longer-term investment return are set out in note
5 to the IFRS condensed consolidated interim financial statements.
Operating profit includes the effect of variances in experience for non-economic items, such as mortality and persistency,
and the effect of changes in non-economic assumptions. Changes due to economic items, for example market value movements
and interest rate changes which give rise to variances between actual and expected investment returns, and the impact of
changes in economic assumptions on liabilities, are accounted for outside of operating profit.
Phoenix Life operating profit Half year ended Half year ended
30 June 2014 30 June 2013
£m £m
With-profit 36 36
With-profit where internal capital support provided (6) 12
Non-profit and unit-linked 205 105
Long-term return on owners' funds 5 7
Management services 16 18
Phoenix Life operating profit before tax 256 178
The with-profit operating profit of £36 million represents the shareholders' one-ninth share of the policyholder bonuses
and is in line with the comparative period (HY13: £36 million).
The operating profit for with-profit funds where internal capital support has been provided has decreased by £18 million,
resulting in an operating loss for the period of £6 million (HY13: profit £12 million). The decrease compared to the prior
period reflects the one-off adverse impact of modelling enhancements in the period of £24 million partly offset by the
impact of changes to persistency assumptions in light of the pensions reforms announced in the March budget which have
reduced the expected costs of policyholder guarantees.
The operating profit for non-profit and unit-linked funds was £205 million (HY13: £105 million). The increase compared to
the prior period reflects higher one-off positive impacts of £138 million (HY13: £24 million) from modelling enhancements
reflecting the implementation of the Group's new actuarial modelling system and refinements to the modelling of credit
default risk, together with the impact of balance sheet reviews conducted in the period.
Of the £205 million of non-profit and unit-linked IFRS operating profits, £14 million was generated on annuity new business
(HY13: £20 million). Of this, £4 million related to policies without guaranteed annuity rates.
The long-term return on owners' funds of £5 million reflects the asset mix of owners' funds, primarily cash-based assets
and fixed interest securities. The investment policy for managing these funds remains prudent.
The operating profit for the management services companies comprises income from the life companies in accordance with the
respective management services agreements less fees related to the outsourcing of services and other operating costs. The
current period operating profit of £16 million has decreased compared to the prior period (HY13: £18 million), reflecting
the impacts of life company run-off and the transfer of annuity policies to Guardian Assurance Limited in 2013, partly
offset by lower staff costs.
Ignis asset management
The operating profit of the asset management business of £17 million was lower than the comparative period (HY13: £19
million). Operating profit has been impacted by lower life company revenue from asset run-off, higher staff incentive costs
and lower performance fees, partly offset by continued growth in third party business. Ignis has been classified as a
discontinued operation in the period.
Group costs
Group costs were £7 million in the period (HY13: £11 million). The decrease in Group costs compared to the prior period
relates to lower pension scheme costs, reflecting a lower opening IAS 19 pension scheme liability for the Pearl Staff
Pension Scheme and a higher opening IAS 19 pension scheme asset for the PGL Pension Scheme. Group costs in the period have
also benefited from reduced Group recharges reflecting lower staff costs.
Adjusting items
Overall, the life companies had positive investment return variances and economic assumption changes of £59 million in the
period, which includes the minority share of the result of the consolidated UKCPT property investment structure of £37
million. The remaining positive variance reflects the impact of positive property returns and changes in inflation
assumptions, partly offset by losses on equity hedging positions held by certain life funds on an economic basis.
The negative variance on owners' funds of £20 million in the prior period primarily related to fair value losses on swap
and equity hedging positions held within the shareholder funds. Interest rate swaps held by the holding companies and the
life company shareholder funds were closed out in the second half of 2013 and the remaining instruments held have given
rise to minor offsetting movements in the period.
Acquired in-force business and other intangibles of £2.7 billion were recognised on the acquisition of the operating
companies in 2009. The acquired in-force business is being amortised in line with the run-off of the life companies.
Amortisation of acquired in-force business during the period totalled £48 million (HY13: £51 million). Amortisation of
other intangible assets totalled £7 million in the period (HY13: £9 million).
Non-recurring items includes income received by PGH1 of £68 million in relation to the close-out of the PGL Pension Scheme
longevity indemnity agreement with the with-profit funds, partly offset by costs of £14 million arising from external
regulatory changes with respect to the cap on workplace pension charges, £27 million of capitalised costs in respect of VAT
on future investment management expenses arising as a result of the divestment of Ignis, corporate project costs of £11
million (HY13: £3 million) and £7 million of costs associated with net other items. In 2013 non-recurring items included
arrangement and structuring fees of £21 million associated with the re-terming of the Impala loan facility.
Finance costs attributable to owners
Finance costs attributable to owners comprise:
Half year ended Half year ended
30 June 2014 30 June 2013
£m £m
Debt finance costs1 36 58
Other finance costs 12 7
Finance costs attributable to owners 48 65
1 Finance costs in respect of bank debt (and associated swap interest).
Debt finance costs have decreased by £17 million, mainly reflecting the closure of the Group's interest rate swap
arrangements in the second half of 2013 which were responsible for a net finance charge in the comparative period.
Tax credit attributable to owners
The Company is exempt from tax in the Cayman Islands on any profits, income, gains or appreciations for a period of 30
years from 11 May 2010.
With effect from the acquisition of the operating subsidiaries in the third quarter of 2009, the Company has been managed
and controlled from Jersey, where its permanent office premises are located. As a Jersey resident holding company, the
Company is subject to a 0% tax rate on its income. Consequently tax charged in these accounts primarily represents UK tax
on profits earned in the UK, where the principal operating companies, excluding Opal Re, have their centre of operations.
The Group tax charge for the period attributable to owners is £40 million (£49 million from continuing operations and £9
million tax credit from discontinued operations), based on a profit (after policyholder tax) of £231 million (£258 million
from continuing operations and £27 loss from discontinued operations). The actual charge is lower than the expected charge
(based on the UK corporation tax rate of 21.5%) of £50 million, primarily due to certain profit being either non-taxable or
taxable at rates other than the standard rate (see note 6 to the IFRS condensed consolidated interim financial statements
for analysis with respect to continuing operations).
Capital management
The Group has continued to focus on capital and gearing during the period. Our capital position remains robust, the IGD
surplus is £1.3 billion and the PLHL ICA surplus is £1.0 billion at 30 June 2014. The gearing ratio as at 30 June 2014 is
43%.
Regulatory capital requirements
IGD surplus (estimated)
Each UK life company must retain sufficient capital at all times to meet the regulatory capital requirements mandated by
the PRA. These measures are aggregated under the European Union Insurance Groups' Directive ('IGD') to calculate regulatory
capital adequacy at a group level.
The Group's IGD assessment is made at the level of the highest EEA level insurance group holding company, which is Phoenix
Life Holdings Limited ('PLHL'), a subsidiary of Phoenix Group Holdings.
The estimated IGD surplus at 30 June 2014 is £1.3 billion. The components of the estimated IGD calculation are shown
below:
30 June 2014Pro forma2£bn 30 June 31 December
2014 2013
£bn £bn
Group capital resources ('GCR') 5.1 5.3 5.4
Group capital resource requirement ('GCRR') (4.0) (4.0) (4.2)
IGD surplus (estimated) 1.1 1.3 1.2
2 The pro forma basis assumes that the proceeds from the divestment of Ignis and subsequent £250 million debt prepayment,
the £300 million 5.75% 7 year senior unsecured bond issue and the £900 million unsecured bank refinancing and associated
£206 million debt prepayment had taken place on 30 June 2014.
The key drivers of the increase in the IGD surplus include capital generation items of £0.2 billion including capital
benefits in relation to the close-out of the PGL Pension Scheme longevity indemnity agreement, offset by debt financing and
repayments of £0.1 billion.
The Group's capital policy, which is agreed with the PRA, is to maintain GCR at the PLHL level of:
− 105% of the with-profit insurance component ('WPICC'), being an additional capital requirement in respect of with-profit
funds; plus
− 145% of the GCRR less the WPICC.
The Group's headroom at 30 June 2014 was £0.6 billion (31 December 2013: £0.5 billion).
The Group's IGD surplus on a pro forma basis is £0.2 billion lower and this reduction is primarily driven by the £206
million debt prepayment following the £900 million debt facility refinancing. The divestment of Ignis and the subsequent
£250 million prepayment is broadly neutral for IGD.
PLHL ICA surplus (estimated)
In accordance with PRA requirements the Group undertakes an Individual Capital Assessment ('ICA') at the level of the
highest EEA insurance group holding company, which is PLHL. This involves an assessment, on an economic basis, of the
capital resources and requirements arising from the obligations and risks which exist outside the life companies.
As agreed with the PRA, the Group aims to ensure that PLHL maintains an ICA surplus of at least £150 million. PLHL's ICA
position at 30 June 2014 is set out below:
30 June 2014Pro forma1£bn 30 June 31 December
2014 2013
£bn £bn
Capital resources2 1.0 1.4 1.5
Capital resource requirements3 (0.3) (0.4) (0.3)
PLHL ICA surplus (estimated) 0.7 1.0 1.2
1 The pro forma basis assumes that the proceeds from the divestment of Ignis and subsequent £250 million debt prepayment,
the £300 million 5.75% 7 year senior unsecured bond issue and the £900 million unsecured bank refinancing and associated
£206 million debt prepayment had taken place on 30 June 2014.
2 Capital resources includes the surplus over capital policy in the life companies, a prudent assessment of the present
value of future profits of Ignis Asset Management and the net assets of the holding companies less pension scheme
obligations calculated on an economic basis.
3 Capital requirements relate to the risks arising outside of the life companies including those in relation to the
Group's staff pension schemes, offset by Group diversification benefits.
Headroom over the Group's £150 million capital policy was £0.9 billion as at 30 June 2014 (31 December 2013: £1.1
billion).
The reduction in the PLHL ICA surplus and headroom of £0.2 billion primarily reflects the strengthening of the assumptions
related to longevity, credit and correlations. On a pro forma basis the PLHL ICA surplus and headroom both decreased by
£0.3 billion, a combination of the impact arising from the divestment of Ignis and the £206 million prepayment of debt
following the £900 million debt facility refinancing.
Sensitivity analysis
As part of the Group's internal risk management processes, the regulatory capital requirements are tested against a number
of financial scenarios. The results of that stress testing are provided below:
Estimated Estimated
IGD surplus PLHL ICA
30 June 2014 surplus
£bn 30 June 2014
£bn
Sensitivity analysis
Base: 30 June 2014 1.3 1.0
Following a 20% fall in equity markets 1.3 0.9
Following a 15% fall in property values 1.3 0.9
Following a 75 bps increase in nominal yields4 1.3 1.1
Following a 75 bps decrease in nominal yields5 1.4 0.9
Following credit spread widening6 1.4 0.8
4 75 bps parallel increase in nominal yields and a 75 bps increase in inflation.
5 75 bps parallel decrease in nominal yields and a 75 bps decrease in inflation.
6 11-15 year term: AAA 44bps, AA 93bps, A 111bps, BBB 187bps.
The relative insensitivity of the Group's IGD surplus reflects the nature of Pillar 1 rules for with-profit funds, which
stipulate that the surplus estate is treated as policyholder liabilities. The sensitivities reflect the impact of market
movements not only on the Group's life companies, but also on its staff pension schemes.
Shareholder debt
In managing capital the Group seeks to optimise the level of debt in its statement of consolidated financial position. The
Group's closed book business model allows it to operate with higher leverage than life companies that are still writing new
business, as it does not need to fund upfront capital requirements and new business acquisition expenses.
The Group monitors the level of debt in its statement of consolidated financial position by reference to the gearing ratio
calculated as gross shareholder debt7 as a percentage of gross MCEV8. The gearing ratio as at 30 June 2014 under the
Group's methodology is 43% (31 December 2013: 44%). Assuming that the proceeds from the divestment of Ignis and subsequent
£250 million debt prepayment, the £300 million 5.75% 7 year senior unsecured bond issue and the £900 million unsecured bank
refinancing and associated £206 million debt prepayment had taken place on 30 June 2014, the Group's gearing level reduces
to 35%, thus meeting our original 40% target 18 months ahead of schedule.
Gross shareholder debt and shareholder debt (including hybrid debt) included in MCEV as at 30 June 2014 are shown below:
30 June 2014Pro forma1£m 30 June 31 December
2014 2013
£m £m
Shareholder debt (including hybrid debt)
Bank debt
Pearl facility - 304 327
Pearl loan notes - 77 76
Impala facility - 1,122 1,182
Royal London PIK notes and facility - 124 121
PGH Capital facility 886 - -
PGH Capital senior bond 296 - -
PLL subordinated debt 155 155 151
Tier 1 bonds at 50% of IFRS carrying value (see note 10 to the IFRS condensed consolidated interim financial statements) 199 199 204
Gross shareholder debt 1,536 1,981 2,061
Adjustments to include the following items at market value:
PLL subordinated debt 59 59 54
PGH Capital senior bond 4 - -
Tier 1 bonds (100% of market value) 190 190 146
Adjustment to include the following item at face value:
PGH Capital facility 14 - -
Shareholder debt (including hybrid debt) included in MCEV 1,803 2,230 2,261
Gross shareholder debt has fallen by £80 million in the period, reflecting a £30 million targeted repayment and a £30
million scheduled repayment made during the period in respect of the Impala facility and a scheduled repayment of £25
million in respect of the Pearl loan facilitiy9.
The Group's shareholder debt decreases on a pro forma basis by £445 million to £1,536 million. This reflects the £250
million prepayment following the divestment of Ignis and the £206 million prepayment relating to the £900 million debt
facility refinancing. The PGH Capital facility and PGH Capital Senior bond are stated at their IFRS value and are therefore
recognised net of fees and commissions associated with the issuance of the instruments. On an MCEV basis, the PGH Capital
facility will be recognised at its face value and the PGH Capital senior bond at its listed market value.
Further detail in respect of shareholder debt is included in note 13 to the IFRS condensed consolidated interim financial
statements.
7 Gross shareholder debt is defined as the sum of the IFRS carrying value of the shareholder debt and 50% of the IFRS
carrying value of the Tier 1 bonds given the hybrid nature of that instrument.
8 Gross MCEV is defined as the sum of Group MCEV and the value of the shareholder and hybrid debt as included in the
MCEV.
9 This includes £2 million paid to Phoenix Life Assurance Limited ('PLAL') a subsidiary undertaking. PLAL was a lender
under the Pearl facility.
The Group operates a Risk Management Framework ('RMF') which seeks to establish a coherent and proactive set of
arrangements and processes to support the effective management of risk throughout the Group. The Board seeks to ensure that
the Group identifies and manages all risks, either to create additional value for its stakeholders or to mitigate any
potentially adverse effects. A summary of the principal risks and uncertainties facing the Group is found below. The
outputs of the RMF provide assurance that risks are being appropriately identified and managed, and that an independent
assessment of management's approach to risk management is being performed.
During the year, the Group has continued to strengthen and embed the components of the RMF to ensure that they are aligned
with evolving regulatory requirements including Solvency II.
This has included, for example, an increasing focus on independent reviews by the Group Risk function of the risk profile
of the Group.
Principal risks and uncertainties facing the Group
Risk Impact Mitigation
The Group is exposed to market risk and in times of severe market turbulence could suffer a loss of value. The emerging cash flows of the Group may be impacted during periods of severe market turbulence by the The Group undertakes regular monitoring activities in relation to market risk exposure, including the monitoring of asset mixes, cash flow forecasting and stress and scenario testing. In response to this, the Group may implement de-risking strategies to mitigate against unwanted outcomes. The Group also maintains substantial cash buffers in its holding companies to reduce reliance on emerging cash flows.
need to maintain appropriate levels of regulatory capital. The impact of market turbulence may also
result in a material adverse impact on the Group's embedded value, financial condition and prospects.
The potential limitation on distributions from the Group's PRA / FCA regulated companies may impair the ability of the Group to meet its cash flow obligations. The Group has cash flow obligations and targets. In the event that transfers from the Group's The Group puts considerable effort into managing relationships with its regulators so that it is able to maintain a forward view regarding potential changes in the regulatory landscape. The Group assesses the risks of regulatory change and their impact on its operations and lobbies where appropriate.
insurance subsidiaries are limited by any law, regulatory action or change in established approach,
this may impair the Group's ability to service these obligations. The implementation of regulatory
directives and other legislative changes such as Solvency II could have this effect and may therefore
have a material adverse effect on the Group's results, financial condition and cash flows.
Significant counterparty failure. Assets held to meet obligations to policyholders include debt securities. Phoenix Life is exposed to The Group regularly monitors its counterparty exposure and has specific limits relating to counterparty credit rating. Where possible, exposures are diversified through the use of a range of counterparty providers. All Reinsurance and derivative positions are appropriately collateralised and guaranteed. Outsourcer arrangements are closely monitored.
deterioration in the actual or perceived creditworthiness or default of issuers of relevant debt
securities. Phoenix Life is also exposed to the risk of its trading counterparties failing to meet all
or part of their obligations, such as outsourcers failing to deliver against their commitments or
reinsurers failing to meet obligations assumed under Reinsurance arrangements. An increase in credit
spreads on debt securities, particularly if it is accompanied by a higher level of actual or expected
issuer defaults, could have a material adverse impact on the Group's financial condition.
Adverse changes in experience versus actuarial assumptions. The Group has liabilities under annuities and other policies that are sensitive to future longevity The Group undertakes regular reviews of experience and annuitant survival checks to identify any variances in assumptions.
and mortality rates. Changes in assumptions may lead to changes in the assessed level of liabilities
to policyholders. The amount of additional capital required to meet those liabilities could have a
material adverse impact on the Group's embedded value, results, financial condition and prospects.
Uncertainty in policyholder behaviour in light of the current significant level of change in the regulatory landscape. A significant degree of uncertainty for policyholders has been created by announcements in the first The Group has initiated projects to manage both the operational and strategic implications of these key regulatory changes. It is actively involved in related industry working groups ensuring we gain early insight into emerging thinking, but also providing an opportunity to influence industry direction.
half of 2014 relating to workplace pensions, annuities and products sold to long standing customers.
Helping customers to make informed decisions that are appropriate for their personal circumstances is
a priority for the Group.
IFRS Financial Statements
STATEMENT OF DIRECTORS' RESPONSIBILITIES 20
Auditor'S review report 21
Condensed consolidated interim
financial statements and notes 22
Additional life company asset disclosures 56
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Board of Directors of Phoenix Group Holdings hereby confirms that, to the best of its knowledge:
− the condensed consolidated interim financial statements for the half year ended 30 June 2014, which have been prepared
in accordance with IAS 34 Interim Financial Reporting, gives a fair view of the assets, liabilities, financial position and
results of Phoenix Group Holdings and its consolidated subsidiaries taken as whole;
− the Interim Report includes a fair view of the state of affairs of Phoenix Group Holdings and its consolidated
subsidiaries as at 30 June 2014 and for the financial half year to which the Interim Report relates. This includes a
description of the important events that occurred during the first half of the year and refers to the principal risks and
uncertainties facing Phoenix Group Holdings and its consolidated subsidiaries for the remaining six months of the year;
and
− the Interim Report includes a fair view of the information required on material transactions with related parties and
any material changes in the related party transactions described in the last annual report.
CLIVE BANNISTER JAMES McCONVILLE
Group Chief Executive Group Finance Director
St Helier, Jersey
20 August 2014
Auditor's review report
To: The Board of Directors of Phoenix Group Holdings
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the Interim Report for the six
months ended 30 June 2014 which comprises the condensed consolidated income statement, the condensed statement of
consolidated comprehensive income, the pro forma reconciliation of Group operating profit to result attributable to owners,
the condensed statement of consolidated financial position, the condensed statement of consolidated cash flows, the
condensed statement of consolidated changes in equity and the related notes on pages 31 to 55. We have read the other
information contained in the Interim Report and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with guidance contained in International Standard on Review
Engagements 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the
Entity' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The Interim Report is the responsibility of, and has been approved by, the Directors.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with International
Financial Reporting Standards ('IFRS'). The condensed set of financial statements included in this Interim Report has been
prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting'.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Interim
Report based on our review.
Scope
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board
for use in the United Kingdom. A review of interim information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland)
and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial
statements in the Interim Report for the six months ended 30 June 2014 is not prepared, in all material respects, in
accordance with International Accounting Standard 34.
Ernst & Young LLP
London
20 August 2014
CONDENSED Consolidated income statement
For the half year ended 30 June 2014
Notes Half year Half year Year
ended ended ended
30 Jun 2014 30 Jun 2013 31 Dec 2013
£m Restated Restated
£m £m
Continuing operationsGross premiums written 513 672 1,333
Less: premiums ceded to reinsurers (31) (37) 11
Net premiums written 482 635 1,344
Fees 59 67 132
Net investment income 2,043 942 2,747
Total revenue, net of reinsurance payable 2,584 1,644 4,223
Gain on transfer of business 3 4 - 42
Other operating income 5 4 7
Net income 2,593 1,648 4,272
Policyholder claims (1,888) (2,443) (4,830)
Less: reinsurance recoveries 109 274 464
Change in insurance contract liabilities 56 2,526 3,411
Change in reinsurers' share of insurance contract liabilities 12 (832) (710)
Transfer to unallocated surplus (19) (38) (77)
Net policyholder claims and benefits incurred (1,730) (513) (1,742)
Change in investment contract liabilities (187) (573) (1,156)
Acquisition costs (5) (5) (10)
Change in present value of future profits (8) 6 9
Amortisation of acquired in-force business (53) (58) (111)
Amortisation of customer relationships (7) (7) (16)
Administrative expenses (202) (211) (444)
Net income attributable to unitholders (29) (171) (331)
Total operating expenses (2,221) (1,532) (3,801)
Profit before finance costs and tax 372 116 471
Finance costs (82) (129) (230)
Profit/(loss) for the period before tax 290 (13) 241
Tax attributable to policyholders' returns (32) 29 27
Profit before the tax attributable to owners 258 16 268
Tax (charge)/credit 6.1 (81) 27 1
Add: tax attributable to policyholders' returns 32 (29) (27)
Tax charge attributable to owners (49) (2) (26)
Profit from continuing operations for the period attributable to owners 209 14 242
Discontinued operationsLoss from discontinued operations, net of tax 3.1 (18) (22) (35)
Profit/(loss) for the period attributable to owners 191 (8) 207
Notes Half year Half year Year
ended ended ended
30 Jun 2014 30 Jun 2013 31 Dec 2013
£m Restated Restated
£m £m
Attributable to
Owners of the parent 144 (27) 145
Non-controlling interests 47 19 62
191 (8) 207
Earnings/(loss) per share
Basic earnings/(loss) per share 7.1 64.1p (13.1)p 68.2p
Diluted earnings/(loss) per share 7.2 64.1p (13.1)p 68.1p
Earnings/(loss) per share from continuing operations
Basic earnings/(loss) per share from continuing operations 7.1 72.3p (3.0)p 85.3p
Diluted earnings/(loss) per share from continuing operations 7.2 72.3p (3.0)p 85.2p
Condensed statement of consolidated comprehensive income
For the half year ended 30 June 2014
Notes Half year Half year Year
ended ended ended
30 Jun 2014 30 Jun 2013 31 Dec 2013
£m £m £m
Profit for the period from continuing operationsLoss from discontinued operations 209(18) 14(22) 242(35)
191 (8) 207
Other comprehensive income/(expense):
Items that are or may be reclassified to profit or loss:
Foreign exchange rate movements (8) 13 -
Reclassification adjustments relating to foreign collective investment schemes disposed of in the period - - 8
Items that will not be reclassified to profit or loss:
Remeasurements of net defined benefit asset/liability 71 (9) -
Tax relating to other comprehensive income items 6.2 8 - (12)
Total comprehensive income/(expense) for the period 262 (4) 203
Attributable to:
Owners of the parent 215 (23) 141
Non-controlling interests 10 47 19 62
262 (4) 203
PRO FORMA RECONCILIATION OF GROUP OPERATING PROFIT TO RESULT ATTRIBUTABLE TO OWNERS
For the half year ended 30 June 2014
Notes Half year Half year Year
ended ended ended
30 Jun 2014 30 Jun 2013 31 Dec 2013
£m Restated Restated
£m £m
Operating profit
Phoenix Life 256 178 414
Ignis Asset Management - discontinued operation 17 19 49
273 197 463
Group costs (7) (11) (24)
Total operating profit before adjusting items 266 186 439
Investment return variances and economic assumption changes on long-term business 5.3 59 (13) 64
Variance on owners' funds 5.2 - (20) (31)
Amortisation on acquired in-force business (48) (51) (99)
Amortisation of customer relationships (7) (9) (19)
Non-recurring items 4.2 9 (40) (11)
Profit before finance costs attributable to owners 279 53 343
Finance costs attributable to owners (48) (65) (126)
Profit/(loss) before the tax attributable to owners:From continuing operationsFrom discontinued operations 3.1 258(27)
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