THE HAGUE, Netherlands, August 10 / --
- NET INCOME DOWN 9%; OPERATING EARNINGS UP 67%
- Decrease in net income reflects lower gains on investments and the gain
on the sale of the Spanish general insurance business in the first half of
2005
- Operating earnings performance driven by increases in all major country
units
- New life sales(1) up 6% helped by record sales in the UK
- VALUE OF NEW BUSINESS TOTALS EUR 346 MILLION
- Increase of 26% compared to pro forma first half 2005 value of new
business(2)
- Internal rate of return improved to 14.8% from 12.4%, exceeding
internal return targets
- EXPANSION STRATEGY ON TRACK
- Agreement to acquire 49% of Seguros Argos in Mexico
- Memorandum of understanding signed with Religare in India
- New bank distribution partnerships in Spain began writing business
- INTERIM DIVIDEND INCREASED 9% TO eur 0.24 PER SHARE- Value of stock dividend to be set approximately 5% lower than the cash
dividend
- AEGON intends to purchase an equivalent amount of stock on the open
market to neutralize the effect of stock dividend, subject to certain tax
considerations
1 New life sales refers to standardized new premium production and is
defined as new recurring premium + 1/10 of single premium
2 Pro forma first half 2005 value of new business is equal to half of the
full year 2005 value of new business
EARNINGS SUMMARY Q2 2006 Q2 2005 % H1 H1 % Constant
2006 2005 currency
Amounts in EUR exchange
millions, rates %
except per share
data
Operating 680 475 43 1,507 905 67 62
earnings before
tax
Net gains/losses 119 529 (78) 93 826 (89) (88)
on investments
and impairment
charges before
tax
Other (22) 38 (158) 22 245 (91) (91)
non-operating
income/(charges)
and share in
profit/(loss) of
associates
Income before tax 777 1,042 (25) 1,622 1,976 (18) (20)
Net income 664 751 (12) 1,294 1,428 (9) (11)
- per share 0.35 0.41 (15) 0.73 0.84 (13) (15)
Note: This press release includes non-GAAP financial measures: operating
earnings before tax and value of new business. The reconciliation of
operating earnings before tax to the most comparable GAAP measure and an
explanation for its use is provided on page 29. Value of new business is not
based on IFRS, which are used to report AEGON's quarterly statements and
should not be viewed as a substitute for IFRS financial measures. On pages 24
and 25, a further breakdown is given and reference is made to the assumptions
included in the Embedded Value disclosure document. AEGON believes the value
of new business, together with the GAAP information, provides a meaningful
measure for the investment community to evaluate AEGON's business relative to
the businesses of our peers.
Chairman's Overview
Commenting on AEGON's results for the first half of the year, Donald J.
Shepard, Chairman of the Executive Board, stated:
"AEGON's half-year results for 2006 demonstrate our continuing focus on
profitability, both in terms of operating earnings and in the value of new
business. We have also made good progress in expanding our presence
internationally.
"Operating earnings for the Group improved by 67%, reflecting increases
within all of AEGON's major country units. The 26% increase in the value of
new business for the Group during the first half of the year was driven by
the Americas, the United Kingdom and Central and Eastern Europe. New life
sales for the Group increased by 6% during the first half of the year, led by
a record performance in the UK. The 14.8% internal rate of return for the
first half of 2006 compared to 12.4% for the full year in 2005 reflects our
ongoing commitment to writing profitable business.
"Pensions continue to offer strong growth opportunities for AEGON. In the
US, our pension business experienced a 17% increase in sales. In the UK, life
sales increased 55%, driven primarily by sales of individual and group
pensions as well as exceptional activity that occurred as a result of Pension
A-Day. In Slovakia, membership in AEGON's pension fund has grown to over
150,000 members.
"AEGON's broad distribution capability remains strong. In the US, our
agent force serving the middle market grew further during the first part of
the year, particularly in our World Financial Group division. In the UK, our
IFA distribution platform, Positive Solutions, produced another record
earnings quarter. Also, our new bank distribution partnerships in Spain with
Caja Badajoz and Caja Navarra have recently begun writing business and are
off to a promising start.
"We recently announced new agreements in Mexico and India, regions that
we have identified as growth markets. Our 49% acquisition of Seguros Argos
will enable us to re-establish our presence in Mexico. Additionally, our
announced intention to partner with Ranbaxy Promoter Group in India to
provide life insurance and asset management products through its financial
services company Religare will provide AEGON a strong platform in this
fast-developing market.
"As a result of our solid capital position and strong cash flows, we have
raised the interim dividend by 9% to EUR 0.24 per common share. To encourage
the election of cash dividend, the value of the stock dividend will be
approximately 5% lower than the cash dividend. AEGON intends to purchase
shares on the open market to neutralize the effect of stock dividend.
"In summary, increases in operating earnings and value of new business,
enhanced distribution capability and continued international expansion
indicate that we are on track in implementing AEGON's growth strategy."
EARNINGS
OVERVIEW
amounts in millions
EUR EUR
Second quarter First six months
2006 2005 % 2006 2005 %
By product
segment
Traditional life 182 241 (24) 338 366 (8)
Life for account
of policyholders 127 14 N.M. 447 74 N.M.
Fixed annuities 125 113 11 231 168 38
Variable
annuities 56 (32) N.M. 138 (2) N.M.
Institutional
guaranteed
products 58 62 (6) 138 126 10
Fee - off
balance sheet
products 14 32 (56) 28 52 (46)
Reinsurance 42 21 100 97 50 94
Accident and
health insurance 107 96 11 186 183 2
General
insurance 23 18 28 34 35 (3)
Banking
activities 12 (10) N.M. 16 (3) N.M.
Other (1) (1) 0 (1) (1) 0
Interest charges
and other (65) (79) (18) (145) (143) 1
Operating
earnings before
tax 680 475 43 1,507 905 67
Gains/(losses)
on investments 150 508 (70) 118 815 (86)
Impairment
charges (31) 21 N.M. (25) 11 N.M.
Other non
operating
income/(charges) (29) 27 N.M. 9 231 (96)
Share in
profit/(loss) of
associates 7 11 (36) 13 14 (7)
Income before
tax 777 1,042 (25) 1,622 1,976 (18)
Income tax (113) (293) (61) (328) (549) (40)
Minority
interest 0 2 N.M. 0 1 N.M.
Discontinued
operations after
tax 0 0 0 0
Net income 1 664 751 (12) 1,294 1,428 (9)
Net income in
USD 834 948 (12) 1,592 1,836 (13)
Income before
tax
geographically
Americas 438 475 (8) 1,000 944 6
The Netherlands 379 569 (33) 605 815 (26)
United Kingdom 26 98 (73) 121 160 (24)
Other countries 6 10 (40) 33 221 (85)
Holding and
other activities (76) (111) (32) (125) (161) (22)
Eliminations 4 1 N.M. (12) (3) N.M.
Income before
tax 777 1,042 (25) 1,622 1,976 (18)
Amounts per
common share of
EUR 0.12
Net income in
EUR 2 0.35 0.41 (15) 0.73 0.84 (13)
Net income fully
diluted in EUR 2 0.35 0.41 (15) 0.73 0.84 (13)
Net income in
USD 0.44 0.52 (15) 0.90 1.08 (17)
Net income fully
diluted in USD 0.44 0.52 (15) 0.90 1.08 (17)
At At
June 30 Dec. 31
2006 2005
Shareholders'
equity in EUR 3 9.63 10.89 (12)
Shareholders'
equity in USD 3 12.24 12.85 (5)
1 Net income refers to net income attributable to equity holders of AEGO
N.V.
2 After deduction of preferred dividend and coupons on perpetuals.
3 Shareholders' equity per share is calculated after deduction of the
preferred share capital of EUR 2.1 billion (at Dec. 31, 2005: EUR 2.1
billion) and considering the number of treasury shares. The number of
common shares used in the calculation of shareholders' equity per share
is 1,581 million (at Dec. 31, 2005: 1,576 million).
FIRST SIX MONTHS 2006 GROUP HIGHLIGHTS
Value of new businessThe value of new business for the first six months of 2006 amounted to
EUR 346 million. This is an increase of 26% compared to EUR 275 million for
one-half of the full year 2005 value of new business. The internal rate of
return (IRR) on new business amounted to 14.8% compared to 12.4% for the full
year 2005. The Other countries, outside the three major country units,
accounted for 20% of the total first six months value of new business.
Sales
During the first six months of 2006, new life sales increased 6% to EUR
1,423 million, primarily due to record sales in the United Kingdom. In the
UK, new life sales increased 55% for the period, as a result of strong
pension sales, partly attributable to Pension A-Day, and growth in bonds and
annuities. New life sales in the Americas decreased 8%. The majority of the
decline reflects a decrease in production within the Transamerica agency
channel and lower sales of BOLI/COLI business. The prospect of new
legislative and regulatory changes to investor owned life insurance has
created considerable uncertainty within the older age life market. This
uncertainty is likely to continue for the remainder of the year. AEGON
continues to focus on profitability and strict underwriting disciplines which
has resulted in improved value of new business and profits but somewhat lower
production. While BOLI/COLI sales were lower in the first half of the year
the US operations have already secured a significant BOLI/COLI case early in
the third quarter of this year. New life sales in the Netherlands increased
2%, reflecting strong growth in individual life and pension sales through
intermediaries, while group pension sales were lower because of the absence
of large group pension contracts. New life sales in Other countries in the
first six months of 2006 decreased 58% due to lower sales in Taiwan, partly
offset by the inclusion of AEGON Poland.
Sales of annuity and institutional guaranteed products in the Americas
increased 15% to USD 11.1 billion. Variable annuity sales increased 14% as a
result of the introduction of enhanced withdrawal benefit riders and
increased wholesaling capacity. As anticipated, sales of fixed annuities were
lower and reflect AEGON's pricing discipline and the challenging interest
rate environment. Total pension sales in the US increased 17% to USD 4,997
million. Deposits in institutional guaranteed products increased 19% in part
due to strong medium term note funding agreements issued by the Ireland
platform.
Off balance sheet production for the Group decreased 2%, reflecting lower
sales of managed assets, partly offset by strong sales in both synthetic GICs
and retail mutual funds in the US.
Operating earnings before tax
Operating earnings before tax in the first six months of 2006 increased
67% to EUR 1,507 million (and increased 62% at constant currency exchange
rates), with increases in all three major country units. Operating earnings
in the Americas were positively affected by strong business growth in the
variable annuity and reinsurance lines of business and improved mortality in
the traditional life and reinsurance lines. In addition, the positive impact
of items that receive fair value treatment has contributed to the significant
earnings growth.
The increase in operating earnings in the Netherlands is mainly a result
of the positive effect of a release of guarantee provisions for unit-linked
business following rising interest rates. In the United Kingdom, the increase
in operating earnings before tax mainly reflects business growth and the
positive effect of higher equity and bond markets. The decrease of operating
earnings before tax in Other countries primarily reflects lower results in
Taiwan and higher start-up costs due to investments in growth in China and
Slovakia, partly offset by higher earnings in Hungary and Spain.
Net income
Net income decreased 9% to EUR 1,294 million (11% at constant currency
exchange rates) in the first six months of 2006. Higher operating earnings
were more than offset by lower net gains/losses on investments and lower
other non-operating income. Lower other non-operating income primarily
reflects the gain on the sale of the Spanish general insurance business last
year. The effective tax rate decreased to 20% from 28% in the first six
months of 2005, as a result of higher tax exempt gains. Net income per share
decreased 13% to EUR 0.73, reflecting lower net income and a slightly higher
average number of ordinary shares outstanding.
Non-operating income
Net gains/losses on investments (before tax) and impairment charges
together amounted to a gain of EUR 93 million compared to a gain of EUR 826
million in the first six months of 2005. The decline primarily reflects a
negative fair value change in derivatives used for asset and liability
management in the Netherlands and normal trading activity in the US in a
higher interest rate environment, offset by net gains on the sale of shares
in the Netherlands.
Other non-operating income/(charges) and share in profit/(loss) of
associates together amounted to EUR 22 million, mainly attributed to the book
gain on the sale of Scottish Equitable International Luxembourg and the
charges made to AEGON UK policyholders with respect to income tax. The
comparable period in 2005 contained the book gain on the sale of the general
insurance activities in Spain.
Commissions and expenses
Commissions and expenses increased 9% to EUR 2,983 million (6% at
constant currency exchange rates). This is mostly the result of a change in
business mix and growth in the business.
Revenue generating investments
Total revenue generating investments amounted to EUR 346 billion at June
30, 2006, compared to EUR 358 billion at December 31, 2005.
Shareholders' equity
Shareholders' equity at June 30, 2006 amounted to EUR 17.3 billion, a
decrease of 10% compared to December 31, 2005. The increase from net income
was more than offset by foreign currency translation effects and a decrease
in revaluation reserves, reflecting higher interest rates.
Dividend
An interim dividend of EUR 0.24 per common share has been declared, a 9%
increase compared to the interim dividend of 2005. The interim dividend will
be paid in cash or shares, at the election of the shareholder. The value of
the stock dividend will be approximately 5% lower than the cash dividend.
AEGON intends to purchase an equivalent amount of stock on the open market to
neutralize the effect of stock dividend, subject to certain tax
considerations.
REPORT OF THE COUNTRY UNITS
AMERICAS
amounts in millions
USD USD EUR
Second quarter First six months First six months
2006 2005 % 2006 2005 % 2006 2005 %
Income by
product segment
190 150 27 Traditional life 346 293 18 281 228 23
Life for account
21 28 (25) of policyholders 47 58 (19) 38 45 (16)
156 144 8 Fixed annuities 284 216 31 231 168 38
Variable
71 (41) N.M. annuities 170 (2) N.M. 138 (2) N.M.
Institutional
guaranteed
74 78 (5) products 170 162 5 138 126 10
Fee - off
balance sheet
21 31 (32) products 34 44 (23) 28 34 (18)
53 26 104 Reinsurance 119 64 86 97 50 94
Accident and
117 94 24 health insurance 205 198 4 167 154 8
Operating
earnings before
703 510 38 tax 1,375 1,033 33 ,118 803 39
Gains/(losses)
(126) 48 N.M. on investments (119) 122 N.M. (97) 95 N.M.
Impairment
(23) 41 N.M. charges (26) 59 N.M. (21) 46 N.M.
Other
non-operating
0 0 0 income/(charges) 0 0 0 0 0 0
Share in
profit/(loss) of
0 0 0 associates 0 0 0 0 0 0
Income before
554 599 (8) tax 1,230 1,214 1 1,000 944 6
(155) (161) (4) Income tax (346) (352) (2) (281) (274) 3
Minority
0 2 N.M. interest 0 2 N.M. 0 2 N.M.
399 440 (9) Net income 884 864 2 719 672 7
Revenues
Life general
account single
250 201 24 premiums 415 420 (1) 337 327 3
Life general
account
recurring
1,447 1,373 5 premiums 2,866 2,721 5 2,330 2,116 10
Life
policyholders
account single
148 31 N.M. premiums 273 345 (21) 222 268 (17)
Life
policyholders
account
recurring
290 289 0 premiums 598 580 3 486 451 8
Total life
insurance gross
2,135 1,894 13 premiums 4,152 4,066 2 3,375 3,162 7
Accident and
641 628 2 health insurance 1,258 1,236 2 1,023 961 6
Total gross
2,776 2,522 10 premiums 5,410 5,302 2 4,398 4,123 7
Investment
1,830 1,603 14 income 3,589 3,270 10 2,918 2,543 15
Fee and
commission
297 258 15 income 586 525 12 476 408 17
4,903 4,383 12 Total revenues 9,585 9,097 5 7,792 7,074 10
Commissions and
1,024 1,050 (2) expenses 2,222 2,083 7 1,806 1,620 11
Standardized new
premium
production
insurance
Life single
269 206 31 premiums 520 698 (26) 423 543 (22)
Life recurring
premiums
255 272 (6) annualized 502 529 (5) 408 411 (1)
Life total
recurring plus
282 293 (4) 1/10 single 554 599 (8) 450 465 (3)
Gross deposits
507 524 (3) Fixed annuities 987 1,025 (4) 802 797 1
Institutional
guaranteed
2,160 2,521 (14) products 6,769 5,698 19 5,503 4,431 24
Variable
1,599 1,423 12 annuities 3,373 2,951 14 2,742 2,295 19
Total production
4,266 4,468 (5) on balance sheet 11,129 9,674 15 9,047 7,523 20
Off balance
sheet production
2,345 1,724 36 Synthetic GICs 3,895 3,308 18 3,166 2,572 23
Mutual funds/
Collective
Trusts and
other managed
2,631 2,393 10 assets 5,400 5,952 (9) 4,390 4,629 (5)
Total production
off balance
4,976 4,117 21 sheet 9,295 9,260 0 7,556 7,201 5
THE AMERICAS- Value of new business amounted to USD 223 million, an increase of 31%
compared to one-half of the full year 2005 value of new business.
- The IRR on new business improved to 12.7% from 11.3% for full year 2005.
- Operating earnings before tax increased 33% to USD 1,375 million in the
first six months of 2006 compared to the same period in 2005.
- Variable annuity sales increased 14% to USD 3,373 million, compared to
the first half of 2005.
- Total revenue generating investments amounted to USD 269 billion at
June 30, 2006, an increase of 1% compared to year-end 2005.
Results
Operating earnings before tax for the first six months of 2006 increased
33% to USD 1,375 million. The increase in earnings was led by strong business
growth in the variable annuity and reinsurance lines of business and improved
mortality in the traditional life and reinsurance lines. In addition, the
continued favorable returns on hedge funds, limited partnership and
convertible bond investments, and the valuation of certain annuity products,
all of which receive fair value treatment, have contributed to the
significant earnings growth.
Net income, which includes net gains/losses on investments and impairment
charges, increased 2% to USD 884 million. Net gains on investments amounted
to a loss of USD 119 million in the first six months of 2006 compared to a
gain of USD 122 million in the same period during 2005. This change is due to
normal trading activity in the rising interest rate environment. Net
impairment charges of USD 26 million in the first half of this year were well
below long-term expectations, but less favorable than the net impairment
recoveries of USD 59 million recorded in the first half of 2005. The
effective tax rate of 28% is slightly lower than the effective rate of 29% in
the comparable period.
Value of new business
Value of new business amounted to USD 223 million for the first six
months of 2006 compared to USD 170 million for one-half of the full year 2005
value of new business. The IRR for the first half of 2006 was 12.7% compared
to 11.3% for the full year of 2005. The increase in returns in nearly every
line of business more than offset lower sales production in certain lines,
including traditional life and fixed annuities. Please refer to pages 24 and
25 for more detailed information on value of new business.
Traditional life / Life for account of policyholders
New life sales for retail and BOLI/COLI products decreased 16% to USD 390
million compared to the first half of 2005. The majority of the decrease
reflects lower sales within the Transamerica agency channel. The prospect of
new legislative and regulatory changes to investor owned life insurance has
created considerable uncertainty within the older age life market. AEGON
continues to focus on profitability and strict underwriting disciplines which
has resulted in improved value of new business and profits but somewhat lower
production. In the US, the agent force serving the middle market grew further
during the first part of the year, particularly in the World Financial Group
division. While BOLI/COLI sales were lower in the first half of the year the
US operations have already secured a significant BOLI/COLI case early in the
third quarter.
Operating earnings before tax for traditional life increased 18% to USD
346 million compared to the same period last year. Mortality results for the
first six months of 2006 improved from the unfavorable results in the first
half of 2005. In addition, the valuation of certain financial assets carried
at fair value contributed USD 32 million to operating earnings before tax in
the first half of 2006 compared to USD 14 million in the same period last
year.
Operating earnings before tax from life for account of policyholders
decreased USD 11 million to USD 47 million compared to the first six months
of 2005.
Fixed annuities
Fixed annuity new deposits of USD 987 million decreased 4% compared to
the first half of 2005. Retail fixed annuity new deposits declined 15%
reflecting continued increased competition from other products due to the
flat yield curve. However, new deposits in the pension channel increased 33%
to USD 321 million, including a terminal funding sale of USD 98 million in
the second quarter. Fixed annuity account balances of USD 50.2 billion were
USD 2.7 billion lower than year-end as new deposits were more than offset by
higher withdrawals. The total decrement rate on the retail annuity segment
increased to an annualized rate of 23% for the second quarter of 2006 but
continues to be within expectations. This brings the total decrement rate for
the first six months of 2006 to 20%.
Fixed annuity operating earnings before tax increased 31% to USD 284
million compared to the same period last year. This increase reflects a
positive impact from total return annuities and fair value movements of
certain financial assets. Lower amortization of deferred policy acquisition
cost (DPAC) on the retail block has been partially offset by declining
earnings due to modest spread compression and lower account balances. Fair
value movements of certain financial assets contributed USD 70 million to
operating earnings before tax, compared to USD 22 million in the first two
quarters of 2005. The contribution to operating earnings before tax from
total return annuities amounted to a negative USD 3 million compared to a
negative USD 12 million in the same period last year.
Product spreads on the largest segment of the fixed annuity book were 229
basis points on an pre-tax operating basis compared to 245 basis points in
the first quarter of 2006. Product spreads in the second quarter include 23
basis points from the impact of valuation of certain financial assets carried
at fair value compared to 41 basis points in the first quarter. On a
normalized basis, the expected contribution to product spreads from the
valuation of these assets is approximately 15 basis points.
Variable annuities
Variable annuity new deposits of USD 3.4 billion increased 14% compared
to the first half of 2005. The retail segment showed continued strong growth
with an increase of 19% over the last year. Sales in the pension segment were
10% higher than last year, with most of this growth due to strong first
quarter deposits. Variable annuity balances of USD 49.3 billion increased 3%
compared to year-end 2005.
Variable annuity operating earnings before tax were USD 170 million in
the first half of 2006 relative to a loss of USD 2 million in the comparable
2005 period. This includes the impact of the valuation of Canadian segregated
funds, which contributed USD 40 million to operating earnings before tax in
the first half of 2006, compared to a loss of USD 65 million in the same
period last year. Growth in assets under management due to favorable equity
markets and continued favorable persistency have contributed to the growth in
earnings. The remaining increase is primarily related to a negative DPAC
adjustment of USD 25 million in 2005 in addition to a positive DPAC
adjustment of USD 13 million in the second quarter of 2006.
Institutional guaranteed products
Sales of institutional guaranteed products amounted to USD 6.8 billion,
an increase of 19% compared to the first half of 2005. The higher sales were
primarily due to medium term note funding agreements issued by the new
Ireland platform through the first two quarters of 2006 and higher sales of
short term products in the first quarter. The balance of institutional
guaranteed products increased to USD 34.6 billion compared to USD 32.9
billion at year-end 2005.
Operating earnings before tax of institutional guaranteed products
increased 5% to USD 170 million compared to the same period last year. The
increase reflects the higher contribution from the valuation of certain
financial assets carried at fair value, which amounted to USD 64 million in
the first half of 2006, and USD 18 million in the first half of 2005. This
was nearly offset by the impact of decreased product spreads resulting from
the continued rise in short-term interest rates.
Fee - off balance sheet products
Off balance sheet sales for the first half of 2006 was USD 9.3 billion,
slightly higher than the comparable 2005 period. Retail mutual fund deposits
of USD 1.7 billion increased 53% compared to first half of 2005 due primarily
to increased sales in the wirehouse and fee planner channels. Pension mutual
funds increased 20% to USD 3.1 billion, primarily due to strong takeover
deposits during the first quarter of 2006. Synthetic GIC sales of USD 3.9
billion in the first six months of 2006 increased 18% from USD 3.3 billion.
Institutional asset management sales decreased from USD 2.3 billion to USD
0.6 billion in the first half of 2006 due to a strong first quarter of 2005.
Off balance sheet assets have increased 5% compared to year-end 2005 and
totaled USD 84.6 billion on June 30, 2006.
Operating earnings before tax from fee - off balance sheet products of
USD 34 million declined by USD 10 million compared to the first six months of
2005. This decrease includes a one-time release of USD 20 million during the
second quarter of 2005 from a long-term deferred compensation plan. This was
partly offset by higher fees from the growth in assets under management.
Reinsurance
Reinsurance new life sales of USD 164 million increased USD 27 million or
20% over the same period in 2005 due primarily to continued strong
international sales.
Reinsurance operating earnings before tax increased 86% to USD 119
million compared to the same period in 2005. The increase in earnings
primarily reflects continued growth in this business and favorable mortality
during the first half of 2006. In addition, earnings from the total return
annuity product amounted to USD 15 million in the first half of 2006 compared
to a loss of USD 8 million in the first half of 2005.
Accident and health business
Accident and health premiums of USD 1,258 million increased 2% compared
to the same period last year. Accident and health operating earnings before
tax increased 4% to USD 205 million compared to the first six months of 2005.
The increase in earnings is primarily due to favorable claims experience
relative to the same period in 2005 and continued growth.
Commissions and expenses
Commissions and operating expenses of USD 2,222 million increased 7%
compared to the first half of 2005. Operating expenses of USD 947 million
were up 11% compared to the same period last year. This increase includes the
impact of a one-time release of USD 20 million during the second quarter of
2005 from a long-term deferred compensation plan included in the fee - off
balance sheet line of business. Operating expenses increased over the prior
year primarily due to growth initiatives in variable annuities, off balance
sheet asset management, and international expansion, as well as increased
regulatory and compliance costs.
Normalized return expectations for fair-valued assets in operating
earnings
AEGON provides normalized return expectations for certain financial
assets that are managed on a total return basis with no offsetting changes to
the fair value of liabilities. Normalized annual earnings on these assets, as
described in more detail below, are based on long-term expected returns in
financial markets, but should not be used as an explicit forecast for the
year as actual results can and will deviate from these expectations. These
levels of normalized annualized earnings will be revisited and updated at the
end of 2006.
These assets include certain hedge funds, real estate limited
partnerships and convertible bonds, with assets totaling approximately USD
3.3 billion as of June 30, 2006. Operating earnings for the first half of
2006 include USD 219 million (USD 260 million before DPAC offsets) related to
these asset classes, including fair valuation of assets of USD 194 million
and cash income of USD 25 million. Based on current holdings and asset class
returns consistent with long-term historical experience, the long-term
expected return on an annual basis is 8-10%, including fair valuation and
cash income, before tax and DPAC offsets. The impact of the fair valuation of
assets is most notable in the traditional life, fixed annuity and
institutional guaranteed products lines of business.
THE NETHERLANDS
amounts in millions
EUR EUR
Second quarter First six months
2006 2005 % 2006 2005 %
Income by
product
segment
Traditional
24 116 (79) life 47 127 (63)
Life for
account of
60 (58) N.M. policyholders 302 (67) N.M.
Fee - off
balance sheet
9 5 80 products 17 14 21
Accident and
health
12 20 (40) insurance 17 28 (39)
General
13 10 30 insurance 17 20 (15)
Banking
12 (10) N.M. activities 16 (3) N.M.
Operating
earnings
130 83 57 before tax 416 119 N.M.
Gains/(losses)
260 495 (47) on investments 190 729 (74)
Impairment
(13) (10) (30) charges (4) (34) 88
Share in
profit/(loss)
2 1 100 of associates 3 1 200
Income before
379 569 (33) tax 605 815 (26)
(40) (144) (72) Income tax (68) (214) (68)
Minority
0 0 0 interest 0 0 0
339 425 (20) Net income 537 601 (11)
Revenues
Life general
account single
100 93 8 premiums 295 227 30
Life general
account
recurring
69 51 35 premiums 339 341 (1)
Life
policyholders
account single
116 107 8 premiums 444 383 16
Life
policyholders
account
recurring
205 240 (15) premiums 844 964 (12)
Total life
insurance
490 491 (0) gross premiums 1,922 1,915 0
Accident and
health
40 36 11 insurance 125 131 (5)
General
115 117 (2) insurance 254 260 (2)
Total gross
645 644 0 premiums 2,301 2,306 (0)
Investment
517 599 (14) income 983 1,106 (11)
Fee and
commission
90 80 13 income 177 160 11
1,252 1,323 (5) Total revenues 3,461 3,572 (3)
Commissions
237 291 (19) and expenses 522 591 (12)
Standardized
new premium
production
insurance
Life single
229 188 22 premiums 628 583 8
Life recurring
premiums
27 30 (10) annualized 65 67 (3)
Life total
recurring plus
50 49 2 1/10 single 128 126 2
Non-life
20 12 67 premiums 46 27 70
Gross deposits
Saving
662 642 3 deposits 1,370 1,501 (9)
Total
production on
662 642 3 balance sheet 1,370 1,501 (9)
Off balance
sheet
production
Mutual funds
and other
9 17 (47) managed assets 134 495 (73)
Total
production off
9 17 (47) balance sheet 134 495 (73)
AEGON THE NETHERLANDS- Value of new business for the first six months of 2006 amounted to EUR
20 million, stable compared to one-half of the full year 2005 value of new
business.
- The IRR on new business for the first six months of 2006 was 8.5%,
compared to 9.2% for the full year 2005, but up from 7.9% in the first
quarter of 2006.
- New life sales increased by 2% to EUR 128 million.
- Non-life sales increased 70% to EUR 46 million, due to successful sales
of new disability products.
- Operating earnings before tax amounted to EUR 416 million, compared to
EUR 119 million in the first six months of 2005.
- Total revenue generating investments increased to EUR 63.7 billion at
June 30, 2006, up 2% from year-end 2005 levels.
Results
Operating earnings before tax amounted to EUR 416 million in the first
six months of 2006, compared to EUR 119 million in the first six months of
2005. The increase in operating earnings in the Netherlands includes the
positive effect of a EUR 236 million release of guarantee provisions for
unit-linked business (of which EUR 31 million was recorded in the second
quarter of 2006), whereas EUR 83 million was added to these provisions in the
first six months of 2005. The release of guarantee provisions reflects the
effect of the increase in interest rates on the risk-neutral market valuation
of these guarantees. The comparable period also included EUR 41 million in
provisions for improvements of "Spaarkas" products. Certain financial assets
that are carried at fair value with no offsetting changes in the fair value
of liabilities contributed a negative EUR 1 million to operating earnings
before tax, compared to a positive EUR 44 million in the first six months of
2005.
Net income, which includes net gains/losses on investments, impairment
charges and the share in profit of associates, decreased 11% to EUR 537
million. Net gains/losses on investments (before tax) amounted to EUR 190
million compared to EUR 729 million in the first six months of 2005. The
gains and losses on investments (before tax) include a negative EUR 346
million from the decrease in market value of derivatives used for asset and
liability management purposes, compared to a positive contribution of EUR 293
in the first half of 2005. The effective tax rate amounted to 11% compared to
26% in the first six months of the prior year. The decrease is largely the
result of substantially higher tax-exempt gains from the sale of shares.
Value of new business
The value of new business for the first six months of 2006 amounted to
EUR 20 million, stable compared to one-half of the full year 2005 value of
new business. The IRR amounted to 8.5% compared to 9.2% for the full year
2005, but up from 7.9% in the first quarter of 2006. The lower IRR mainly
reflects a change in the economic assumptions compared to 2005. Please refer
to pages 24 and 25 for more detailed information on value of new business.
Traditional life / Life for account of policyholders
New life sales increased 2% to EUR 128 million. The strong growth in
individual life and pension sales and in SME pensions more than compensated
for the absence of large group pension contracts in the first six months of
2006. The pipeline of new group pension sales is promising.
Operating earnings before tax for traditional life amounted to EUR 47
million for the first six months of 2006, compared to EUR 127 million in the
same period in 2005. The decrease mainly reflects lower investment income,
including a smaller contribution from assets carried at fair value with no
offsetting changes in the fair value of liabilities, and lower technical
results.
Operating earnings before tax from life for account of policyholders
amounted to EUR 302 million, compared to a loss of EUR 67 million in the
first six months of 2005. This reflects the release of provisions for
guarantees and the absence of additions to provisions for "Spaarkas" products.
Fee - off balance sheet products
Off balance sheet product sales amounted to EUR 134 million compared to
EUR 495 million in the first six months of 2005. The comparable period
included a number of large mandates.
Operating earnings before tax from fee business amounted to EUR 17
million, compared to EUR 14 million in the first six months of 2005, as a
result of improved performance of Meeus and the asset management activities.
Non-life insurance
Accident and health premiums decreased 5% to EUR 125 million as a result
of high lapse rates in the sickness benefits market due to new legislation.
Sales of the new WIA disability product developed favorably and represented
57% of all new non-life production in the first six months of 2006. Accident
and health operating earnings before tax were EUR 17 million compared to EUR
28 million in the first six months of 2005. Technical results were lower
compared to the favorable results in 2005, mainly because of higher claim
experience and high lapse rates in the sick leave market related to
legislative changes.
General insurance premiums decreased 2% to EUR 254 million. General
insurance operating earnings before tax amounted to EUR 17 million compared
to EUR 20 million in the comparable period, mainly due to higher claims and
increased competition.
Banking activities
At the end of the second quarter of 2006, over 1,000 Levensloop contracts
have been signed with employers, representing well over 600,000 employees.
Currently more than 20,000 Levensloop accounts have been opened. Until July
2006, employees had the opportunity to open an account and save for this
year. New Levensloop deposits, largely recurring, amounted to EUR 43 million
in the first six months of 2006. The pipeline of new contracts represents 500
companies.
Operating earnings before tax from banking activities amounted to EUR 16
million, compared to a loss of EUR 3 million in the first six months of 2005.
The increase reflects the absence of additions to provisions for equity lease
products.
Commissions and expenses
Commissions and expenses decreased 12% to EUR 522 million in the first
six months of 2006. Operating expenses amounted to EUR 341 million, 14% lower
than in the comparable period of 2005. This is primarily due to no additional
provisions for "Spaarkas" and equity lease products. On a like for like
basis, operating expenses were up by approximately 5%, due to the additional
costs of external staffing and professional services.
Normalized return expectations for fair-valued assets in operating
earnings
AEGON provides normalized return expectations for certain financial
assets that are managed on a total return basis with no offsetting changes to
the fair value of liabilities. Normalized annual earnings on these assets, as
described in more detail below, are based on long-term expected returns in
financial markets, but should not be used as an explicit forecast for the
year as actual results can and will deviate from these expectations. These
levels of normalized annualized earnings will be revisited and updated at the
end of 2006.
These assets include an investment in a private equity fund and totaled
EUR 199 million as of June 30, 2006. Operating earnings for the first six
months of 2006 include a loss of EUR 1 million related to these asset
classes. Based on current holdings and asset class returns consistent with
long-term historical experience, the long-term expected return on an annual
basis is 8% before tax. The impact of the fair valuation of assets is notable
in the traditional life and life for account of policyholders lines of
business.
UNITED KINGDOM
amounts in millions
GBP GBP EUR
Second quarter First six months First six months
2006 2005 % 2006 2005 % 2006 2005 %
Income by
product segment
4 1 N.M. Traditional life 6 2 200 9 3 200
Life for account
35 33 6 of policyholders 72 64 13 105 94 12
Fee - off
balance sheet
(1) 1 N.M. products (3) 2 N.M. (5) 3 N.M.
Operating
earnings before
38 35 9 tax 75 68 10 109 100 9
Gains/(losses)
0 2 N.M. on investments (2) 4 N.M. (3) 6 N.M.
Impairment
(1) (1) 0 charges (1) (1) 0 (1) (1) 0
Other
non-operating
income/(charges)
(19) 30 N.M. 1 11 38 (71) 16 55 (71)
Share in
profit/(loss) of
0 0 0 associates 0 0 0 0 0 0
Income before
18 66 (73) tax 83 109 (24) 121 160 (24)
Income tax
attributable to
policyholder
19 (30) N.M. return 0 (38) N.M. 0 (55) N.M.
Income before
income tax on
shareholders
37 36 3 return 83 71 17 121 105 15
Income tax on
shareholders
(1) (8) (88) return (8) (18) (56) (12) (26) (54)
Minority
0 0 N.M. interest 0 0 N.M. 0 (1) N.M.
36 28 29 Net income 75 53 42 109 78 40
Revenues
Life general
account single
222 68 N.M. premiums 372 112 N.M. 542 163 N.M.
Life general
account
recurring
60 47 28 premiums 110 91 21 160 133 20
Life
policyholders
account single
899 284 N.M. premiums 1,513 680 123 2,203 994 122
Life
policyholders
account
recurring
325 308 6 premiums 645 607 6 939 886 6
Total gross
1,506 707 113 premiums 2,640 1,490 77 3,844 2,176 77
Investment
421 371 13 income 834 767 9 1,215 1,120 8
Fee and
commission
43 41 5 income 84 74 14 122 109 12
0 0 0 Other revenues 0 0 0 0 0 0
1,970 1,119 76 Total revenues 3,558 2,331 53 5,181 3,405 52
Commissions and
144 117 23 expenses 279 225 24 406 329 23
Standardized new
premium
production
insurance 2
Life single
1,350 741 82 premiums 2,417 1,367 77 3,520 1,996 76
Life recurring
premiums
147 103 43 annualized 257 184 40 375 269 39
Life total
recurring plus
282 177 59 1/10 single 499 321 55 727 469 55
Off balance
sheet production
Mutual funds and
other managed
226 589 (62) assets 529 669 (21) 770 977 (21)
Total production
off balance
226 589 (62) sheet 529 669 (21) 770 977 (21)
1) Included in other non-operating income/(charges) are charges made to
policyholders with respect to income tax. There is an equal and opposite tax
charge which is reported in the line Income tax attributable to policyholder
return.
2) Includes production on investment contracts without a discretionary
participation feature of which the proceeds are not recognized as revenues
but are directly added to our investment contract liabilities.
AEGON UNITED KINGDOM
- Value of new business amounted to GBP 53 million, an increase of 61%
compared to one-half of the full year 2005 value of new business.
- The IRR on new business increased to 11.5% from 11.0% for the full year
2005.
- New life sales increased 55% to GBP 499 million.
- Operating earnings before tax increased 10% to GBP 75 million, or 26%
when excluding the effect of an incentive plan charge of GBP 11 million.
- Total revenue generating investments of GBP 45.2 billion were stable
compared to year-end 2005 levels.
Results
Operating earnings before tax amounted to GBP 75 million compared to GBP
68 million in the first six months of 2005. The increase mainly reflects
business growth, the positive effect of higher equity and bond markets and
positive mortality experience. Earnings are negatively impacted by a GBP 11
million charge for the incentive plan for registered individuals (RIs) and
staff related to the accelerated acquisition of the remaining 40% of Positive
Solutions (GBP 4 million in the second quarter). Excluding the effect of the
incentive plan charge, operating earnings before tax increased 26%.
Net income, which includes net gains/losses on investments and impairment
charges, increased 42% to GBP 75 million. Other non-operating income includes
a gain of GBP 11 million in the first quarter of 2006 related to the sale of
the Luxembourg-based subsidiary Scottish Equitable International to La
Mondiale Participations. In the consolidated earnings for the Group, 35% of
this gain has been eliminated to reflect AEGON's 35% share in La Mondiale
Participations.
The effective tax rate in the first six months of 2006 decreased from 25%
to 10%. This reflects the tax-free disposal gain on the Luxembourg subsidiary
and a change in the mix of profits from business lines.
Operating earnings before tax in the second quarter of 2006 increased 9%
to GBP 38 million. Net income amounted to GBP 36 million for the period, a
29% increase over the comparable period last year.
Value of new business
The value of new business for the first six months of 2006 increased 61%
to GBP 53 million compared to GBP 33 million for one-half of the full year
2005 value of new business. The IRR on new business increased to 11.5%
compared to 11.0% for the full year 2005. The increase in value of new
business reflects higher production, a more profitable mix of business as
well as commission reductions and charge increases introduced in 2005 on some
of the pension business. Please refer to pages 24 and 25 for more detailed
information on value of new business.
Traditional life / Life for account of policyholders
New life sales in the first six months of 2006 increased 55% and the
second quarter of this year represented the highest quarterly sales result
ever. The growth in sales is driven by increased activity in the pension
business and strong sales in bonds and annuities. Part of the higher pension
sales can be attributed to exceptional activity due to Pension A-Day.
Operating earnings before tax for traditional life amounted to GBP 6
million compared to GBP 2 million in the first six months of 2006, due to
positive mortality experience in the second quarter of 2006. Operating
earnings before tax from life for account of policyholders was GBP 72
million, a 13% increase. This increase mainly reflects business growth and
the impact of the higher equity and bond markets on fund related charges.
Fee - off balance sheet products
In asset management, the retail business continued its trend from 2005
and showed strong performance, with the majority of sales coming from bond
funds emphasizing the strength of AEGON's fixed income offering.
Institutional sales were lower as two large institutional mandates were won
in the first half of 2005. Total off balance sheet production amounted to GBP
529 million compared to GBP 669 million in the first six months of 2005.
In the owned distribution businesses, Positive Solutions had another
strong quarter generating its highest-ever quarterly income. The number of
RIs reached 1,423 at the end of the second quarter, an increase of
approximately 110 RIs compared to the end of 2005. Average productivity
remains high.
Operating earnings before tax from the fee business segment amounted to a
negative GBP 3 million, compared to a positive contribution of GBP 2 million
in the first six months of 2005. The lower result was due to the charge of
GBP 11 million for the incentive plan related to Positive Solutions.
Commissions and expenses
Commissions and expenses increased 24% to GBP 279 million including the
GBP 11 million incentive cost related to Positive Solutions. Other factors
affecting commissions and expenses include growth in the distribution
businesses, leading to an increase of GBP 10 million in paid-out commissions.
Operating expenses increased by 7% to GBP 174 million, reflecting investment
and growth in the businesses, including protection and Positive Solutions.
OTHER COUNTRIES
amounts in millions
EUR EUR
Second quarter First six months
2006 2005 % 2006 2005 %
Income by
product segment
1 5 (80) Traditional life 1 8 (88)
Life for account
0 0 N.M. of policyholders 2 2 0
Fee - off
balance sheet
(10) 1 N.M. products (12) 1 N.M.
Accident and
1 1 0 health insurance 2 1 100
General
10 8 25 insurance 17 15 13
(1) (1) 0 Other (1) (1) 0
Operating
earnings before
1 14 (93) tax 9 26 (65)
Gains/(losses)
1 2 (50) on investments 15 6 150
Impairment
0 0 0 charges 0 0 0
Other
non-operating
(1) (16) 94 income/(charges) (1) 176 N.M.
Share in
profit/(loss) of
5 10 (50) associates 10 13 (23)
Income before
6 10 (40) tax 33 221 (85)
(2) 0 N.M. Income tax (9) (34) (74)
4 10 (60) Net income 24 187 (87)
Revenues
Life general
account single
6 4 50 premiums 14 9 56
Life general
account
recurring
279 299 (7) premiums 452 443 2
Life
policyholders
account single
110 3 N.M. premiums 207 11 N.M.
Life
policyholders
account
recurring
58 32 81 premiums 112 62 81
Total life
insurance gross
453 338 34 premiums 785 525 50
Accident and
13 13 0 health insurance 40 39 3
General
32 31 3 insurance 66 65 2
Total gross
498 382 30 premiums 891 629 42
Investment
45 40 13 income 87 75 16
Fee and
commission
9 5 80 income 17 11 55
(1) 0 N.M. Other revenues 0 0 N.M.
551 427 29 Total revenues 995 715 39
Commissions and
110 67 64 expenses 194 127 53
Standardized new
premium
production
insurance
Life single
124 7 N.M. premiums 231 20 N.M.
Life recurring
premiums
40 190 (79) annualized 95 281 (66)
Life total
recurring plus
52 191 (73) 1/10 single 118 283 (58)
Gross deposits
0 0 0 Fixed annuties 0 0 0
0 0 0 Institutional 0 0 0
Variable
2 1 100 annuities 3 2 50
Total production
2 1 100 on balance sheet 3 2 50
Off balance
sheet production
Mutual funds and
other managed
107 49 118 assets 221 159 39
Total production
off balance
107 49 118 sheet 221 159 39
OTHER COUNTRIES- Value of new business amounted to EUR 68 million compared to EUR 70
million for one-half of the full year 2005.
- The IRR on new business increased for all regions.
- New life sales in the first six months of 2006 decreased 58% to EUR 118
million.
- Operating earnings before tax amounted to EUR 9 million, compared to
EUR 26 million in the first six months of 2005.
- Total revenue generating investments increased 8% to EUR 5.9 billion
compared to year-end 2005 levels.
Results
Operating earnings before tax in Other countries amounted to EUR 9
million compared to EUR 26 million in the first six months of 2005. Higher
earnings in Hungary and Spain were more than offset by lower results in
Taiwan and higher start-up costs due to investments in growth in China and
Slovakia.
Net income, which includes net gains/losses on investments, amounted to
EUR 24 million compared to EUR 187 million in the first six months of 2005.
The comparable period included a book gain on the sale of the Spanish general
insurance activities for EUR 176 million before tax. AEGON's share in the
profit (and loss) of associates (after tax) amounted to EUR 10 million,
compared to EUR 13 million in the first six months 2005.
Value of new business
The value of new business coming from Other countries for the first six
months of 2006 amounted to EUR 68 million, compared to EUR 70 million for
one-half of the full year 2005 value of new business. This reflects lower
volumes in Taiwan due to re-pricing. Other countries accounted for 20% of
total value of new business for the Group. Asia accounted for 41% of value of
new business coming from Other countries, while Central and Eastern Europe
(CEE) and Other European Countries accounted for 31% and 28% respectively.
The IRR amounted to 21.2% for Asia, against 10.6% for the full year 2005.
The improvement is driven by Taiwan, mainly due to re-pricing. For CEE, the
IRR of 38.0% compares to 33.4% for the full year 2005. This reflects an
improvement in Poland. Finally, the IRR for Other European Countries amounted
to 18.6%. This compares to 17.5% for the full year 2005 and mainly reflects
an improvement at the Caja de Ahorros del Mediterraneo (CAM) partnership in
Spain.
Please refer to pages 24 and 25 for more detailed information on value of
new business.
Traditional life / Life for account of policyholders
New life sales in Taiwan in the first six months of 2006 decreased 76% to
NTD 2.6 billion (EUR 64 million), reflecting the high levels of sales through
the broker channel in the comparable period. Unit-linked sales increased for
the sixth consecutive quarter, accounting for 44% of total new life sales in
the first six months of 2006. The fall in traditional life sales is due to
re-pricing of the products following the revised reserving requirements
introduced in 2005, and price competition. Total gross premiums increased 8%
to NTD 16.6 billion (EUR 417 million) in the first six months of 2006, mainly
due to growth in recurring premiums of the life for account of policyholder
business.
In Hungary, new life sales increased 5% to HUF 2.1 billion (EUR 8
million). The new risk product showed good sales momentum and various
products have been repositioned in order to increase sales through the
independent network.
AEGON Poland had its third consecutive record sales quarter, with new
life sales amounting to PLN 104 million (EUR 27 million). However, sales
towards the end of the quarter were affected by increased equity market
volatility.
In Spain, new life sales increased 44% to EUR 14 million, reflecting
growth in recurring premium sales and the proportional inclusion of the sales
of Badajoz Vida, the joint venture with Caja de Badajoz. New premium
production has been adversely affected by changes in tax law, effective in
2007, delaying the closing of several agreements on group policies.
The partnership with CAM saw a decrease of 31% in new life sales to EUR
89 million (on a 100% basis), but the quality of the sales and returns
improved. Premium income for the partnership with CAM amounted to EUR 247
million (on a 100% basis). The partnership with CAM is not consolidated in
AEGON's accounts. AEGON includes its share in the results of the partnership
in the line share in profit / (loss) of associates.
Total traditional life insurance operating earnings before tax from Other
countries amounted to EUR 1 million, compared to EUR 8 million in the first
six months of 2005. This reflects lower results in Taiwan due to the decline
in sales and higher investments in growth in China. Operating earnings from
life for account of policyholders remained stable and amounted to EUR 2
million.
Fee - off balance sheet products
In Hungary, off balance sheet product sales amounted to HUF 50 billion
(EUR 191 million). Sales in the pension fund business continued to grow, with
the number of new members increasing by 38% to almost 28,000. Total pension
fund membership amounted to over 600,000 members at the end of June 2006. Off
balance sheet investments grew by 13% to HUF 317 billion (EUR 1,118 million)
compared to the year-end 2005 level.
In Slovakia, the pension fund business continued to report strong growth.
In the first six months, approximately 100,000 new pension fund members were
registered, bringing the total to over 150,000.
Total fee - off balance sheet operating earnings before tax from Other
countries amounted to a negative EUR 12 million, against a positive EUR 1
million for the first six months of 2005, reflecting investments to grow the
Slovakian pension business.
Non-life insurance
In Hungary, non-life premium income increased by 6% to HUF 17 billion
(EUR 65 million) mainly as a result of increased household insurance sales.
Non-life premiums in Spain, which only include health business, increased 3%
to EUR 39 million.
Accident and health insurance operating earnings before tax in Other
countries amounted to EUR 2 million compared to EUR 1 million in the first
six months of 2005. General insurance operating earnings before tax increased
to EUR 17 million from EUR 15 million in the comparable period last year.
Commissions and expenses
Commissions and expenses increased 53% to EUR 194 million mainly due to
lower deferral of commissions in Taiwan following a change in business mix.
Operating expenses increased 2% to EUR 67 million due to higher expenses in
China, Hungary and new operations in Poland, offset by lower expenses in
Spain.
Associates
AEGON's share in the profit of associates amounted to EUR 10 million
(after tax), compared to EUR 13 million in the first six months of 2005. This
line represents the income from the partnership with CAM (49.99% interest) as
well as the income from the 35% stake in La Mondiale Participations.
CONDENSED
CONSOLIDATED
BALANCE SHEETS
amounts
in
millions
At At At
June 30 June 30 Dec. 31
2005 2006 2005
EUR EUR EUR %
Investments
general account 142,698 137,201 146,075 (6)
Investments for
account of
policyholders 119,061 124,906 127,547 (2)
Investments in
associates 554 469 542 (13)
Other assets
and receivables 36,938 35,904 37,051 (3)
Total assets 299,251 298,480 311,215 (4)
Shareholders'
equity 18,422 17,334 19,276 (10)
Other equity
instruments 3,696 3,782 3,379 12
Minority
interest 16 15 15 0
Group equity 22,134 21,131 22,670 (7)
Trust
pass-through
securities 426 405 437 (7)
Subordinated
borrowings 279 268 284 (6)
Senior debt
related to
insurance
activities 1,514 1,587 2,059 (23)
Total capital
base 24,353 23,391 25,450 (8)
Insurance
contracts
general account 91,726 89,755 95,690 (6)
Insurance
contracts for
account of
policyholders 66,334 68,093 70,280 (3)
Investment
contracts
general account 38,044 37,526 38,842 (3)
Investment
contracts for
account of
policyholders 53,782 58,277 58,724 (1)
Other
liabilities 25,012 21,438 22,229 (4)
Total equity
and liabilities 299,251 298,480 311,215 (4)
SHAREHOLDERS' EQUITY ROLL
FORWARD At At At
June 30 June 30 Dec. 31
2005 2006 2005
EUR EUR EUR
Shareholders'
equity January 1 14,875 19,276 14,875
Net income 1,428 1,294 2,732
Dividend paid (169) (263) (272)
Paid in surplus /
Issuance of new
shares 0 0 0
Movements in
foreign currency
translation
reserve 1,234 (954) 1,515
Repurchased and
sold own shares 72 (96) 76
Movements in
revaluation
reserves 841 (1,787) 152
Coupons on
perpetuals (net of
tax) (59) (63) (132)
Other changes 1 200 (73) 330
Shareholders'
equity end of
period 18,422 17,334 19,276
1 Includes EUR 275 million in 2005 from an agreement between the Dutch
tax authorities and AEGON N.V. on a number of items related to AEGON NV's
corporate income tax filings for the years 1996-2005.
ADDITIONAL BALANCE SHEET INFORMATION
At At At At At At
June 30 Dec. 31 June 30 June 30 June 30 Dec. 31
2006 2005 2005 2005 2006 2005
USD USD % USD EUR EUR EUR %
Assets
Deferred
policy
acquisition
14,025 12,728 10 costs 11,629 9,617 11,032 10,789 2
Equity
Preferred
2,684 2,490 8 shares 2,551 2,110 2,111 2,111 0
Revaluation
643 2,705 (76) reserves 3,606 2,982 506 2,293 (78)
Liabilities
Fixed
50,210 52,907 (5) annuities 53,997 44,655 39,495 44,848 (12)
Institutional
guaranteed
34,574 32,938 5 products 32,370 26,770 27,196 27,921 (3)
Variable
49,254 48,015 3 annuities 44,692 36,960 38,743 40,701 (5)
Savings
6,517 5,954 9 accounts 6,704 5,544 5,126 5,047 2
Number of
employees 27,152 27,290 27,159 0
REPORT OF THE HOLDING COMPANY
Capital and fundingShareholders' equity at June 30, 2006 amounted to EUR 17.3 billion, a
decrease of EUR 1.9 billion or 10% compared to December 31, 2005. The
positive impact of EUR 1.3 billion from net income was more than offset by
negative foreign currency translation effects of EUR 1.0 million, and a
decrease in revaluation reserves of EUR 1.8 billion, primarily reflecting the
impact of higher interest rates on the valuation of bonds.
At June 30, 2006 shareholders' equity represented 74% of the total
capital base, comfortably within target levels. Group equity, which includes
other equity instruments (such as perpetual capital securities) and minority
interests, represented 90% of total capital. The capital leverage to total
capital ratio decreased to 10% from 11% at December 31, 2005. In June 2006
AEGON completed an SEC registered offering of USD 500 million in perpetual
capital securities. The proceeds will be used for general corporate purposes
including the retiring of senior debt, and will further strengthen the
quality of AEGON's capital base in a cost effective, non-dilutive manner.
Dividend
An interim dividend of EUR 0.24 per common share has been declared, a 9%
increase compared to the interim dividend of 2005. The interim dividend will
be paid in cash or shares, at the election of the shareholder. The value of
the stock dividend will be approximately 5% lower than the cash dividend.
AEGON intends to purchase an equivalent amount of stock on the open market to
neutralize the effect of stock dividend, subject to certain tax
considerations. The record date for AEGON shares listed on Euronext Amsterdam
is August 11, 2006. For shares listed on the New York Stock Exchange the
record date is August 16, 2006. AEGON shares will be quoted ex-dividend on
August 14, 2006. The election period will run from August 15 up to and
including September 8, 2006. The stock fraction will be based on the average
share price on Euronext Amsterdam from September 11, 2006 through September
15, 2006. The dividend will be payable as of September 21, 2006.
Interest charges and other
Interest charges and other were stable at EUR 145 million in the first
six months of 2006.
Subsequent events
On July 7, 2006 AEGON and Ranbaxy Promoter Group announced that a
memorandum of understanding has been signed to jointly enter the insurance
and asset management markets in India. The partnership will be implemented by
AEGON and Religare, a Ranbaxy Promoter Group company. Entering the Indian
market continues AEGON's strategy of expanding into countries that offer
long-term growth opportunities for insurance and investment products. India
has long been identified as one of AEGON's target markets given its sizeable
population and rapidly developing economy, the relatively low penetration
level of insurance in the country, and the continued strong growth rates
projected for the insurance sector in coming years. AEGON and Ranbaxy
Promoter Group expect to announce a transaction later this year.
In July 2006 AEGON completed the offering of EUR 200 million in perpetual
capital securities. Additionally the issue of USD 500 million of perpetual
capital securities, offered in June 2006, was subsequently increased by USD
50 million in July 2006. Proceeds of both issues will be used for general
corporate purposes including the retiring of senior debt.
VALUE OF NEW BUSINESS
Starting with the first quarter of 2006, AEGON is providing value of new
business information on a quarterly basis. Value of new business represents
the present value of the future distributable earnings on the block of
business sold in the latest reporting period. Value of new business is
calculated using beginning of year economic assumptions and assumptions
outside of management control, and end of period operating assumptions.
AEGON's management believes that this information, in conjunction with other
publicly disclosed financial information, can provide valuable additional
information for investors and shareholders.
Value of new business should not be viewed as a substitute for AEGON's
primary financial statements. The methodology AEGON uses to calculate value
of new business is consistent with European Embedded Value Principles and
described in more detail in the 2005 Embedded Value disclosure document that
is available on AEGON's website: www.aegon.com.
VALUE OF NEW BUSINESS VNB VNB
(amounts in EUR millions) 2006 H1 1/2 of full %
year 2005
Gross value of new business 649 561 16
Tax (191) (180) 6
Cost of capital (112) (106) 5
Value of new business 346 275 26
VALUE OF NEW BUSINESS AND IRR
(amounts in EUR
millions, after-tax) 2006 2005 2006 2005
H1 1/2 of H1 full
full year year
VNB VNB IRR IRR
% %
Americas 181 137 12.7 11.3
The Netherlands 20 20 8.5 9.2
United Kingdom 77 49 11.5 11.0
Asia 28 41 21.2 10.6
China1 0 0 16.1 15.3
Taiwan 28 41 21.3 10.6
Central and Eastern Europe 21 14 38.0 33.4
Czech Republic 0 0 25.0 26.5
Hungary 10 10 40.0 39.9
Poland 7 2 >50 25.8
Slovakia 4 2 10.8 11.7
Other European countries 19 15 18.6 17.5
France2 3 2 9.9 9.1
Spain3 16 13 20.4 19.1
Total 346 275 14.8 12.4
1 AEGON CNOOC joint venture (50%).
2 La Mondiale Partnership (35%).
3 AEGON Spain and 50% of CAM partnership in Spain.
VNB/PVNBP Premium Deposit
SUMMARY business business
(amounts in (TL, LAP, (FA, VA, IGP,
EUR millions) Reins, A&H) Fee)
2006 H1 VNB PVNBP4 VNB/ VNB/ VNB PVNBP VNB/ VNB/ Total Total
PVNBP APE PVNBP Deposits VNB IRR
% % % % %
Americas 91 3,637 2.5 12.6 90 13,235 0.7 0.7 181 12.7
The
Netherlands 20 1,388 1.4 12.1 0 4 6.3 32.2 20 8.5
United
Kingdom 77 4,372 1.8 11.2 0 0 - 0.0 77 11.5
Asia 28 425 6.6 40.9 0 0 - 0.0 28 21.2
China1 0 21 2.3 15.6 0 0 - 0.0 0 16.1
Taiwan 28 404 6.8 42.1 0 0 - 0.0 28 21.3
Central and
Eastern
Europe 13 288 4.6 36.6 8 507 1.5 66.1 21 38.0
Czech
Republic 0 5 5.1 26.6 0 0 - 0.0 0 25.0
Hungary 5 48 9.9 66.0 5 109 4.5 54.6 10 40.0
Poland 7 226 3.2 27.4 0 0 - 0.0 7 >50
Slovakia 1 9 10.8 65.5 3 397 0.7 103.3 4 10.8
Other
European
countries 19 950 2.0 17.9 0 0 - 0.0 19 18.6
France2 3 628 0.5 6.0 0 0 - 0.0 3 9.9
Spain3 16 322 4.9 30.3 0 0 - 0.0 16 20.4
Total 248 11,060 2.2 13.9 98 13,745 0.7 0.8 346 14.8
1 AEGON CNOOC joint venture (50%).
2 La Mondiale Partnership (35%).
3 AEGON Spain and 50% of CAM partnership in Spain.
4 Present Value New Business Premium.
MODELED NEW Premium business Deposit business
BUSINESS VNB VNB
APE4 AND (TL, LAP, Reins, A&H) (FA, VA, IGP, Fee)
DEPOSITS
(amounts in
EUR
millions) APE APE Deposits Deposits
2006 2005 2006 2005 2006 2005
H1 1/2 of full year H1 1/2 of full year H1 1/2 %
of
full
year
Americas 721 709 12,368 11,292 181 137 33
The 20 20 2
Netherlands 163 116 1 11
United 77 49 57
Kingdom 686 492 0 0
Asia 69 158 0 0 28 41 (32)
China1 3 2 0 0 0 0 188
Taiwan 66 156 0 0 28 41 (33)
Central and 21 14 57
Eastern
Europe 36 15 12 13
Czech 0 0 4
Republic 1 1 0 0
Hungary 7 8 9 8 10 10 5
Poland 26 5 0 0 7 2 N.M.
Slovakia 1 1 3 5 4 2 72
Other 26
European
countries 106 87 0 0 19 15
France2 54 46 0 0 3 2 41
Spain3 52 42 0 0 16 13 23
Total 1,780 1,577 12,380 11,316 346 275 26
1 AEGON CNOOC joint venture (50%).
2 La Mondiale Partnership (35%).
3 AEGON Spain and 50% of CAM partnership in Spain.
4 APE = recurring premium + 1/10 single premium.
CONDENSED
CONSOLIDATED
INCOME
STATEMENT
amounts in millions
EUR EUR
Second quarter First six months
2006 2005 % 2006 2005 %
Total
revenues 8,573 6,908 24 17,458 14,826 18
Income from
reinsurance
ceded 376 327 15 776 828 (6)
Fair value
and foreign
exchange
gains (49) 156 N.M. 504 212 138
Total gains
on
investments (1,777) 3,153 N.M. 2,640 3,977 (34)
Other income 0 (16) N.M. 10 176 (94)
Total income 7,123 10,528 (32) 21,388 20,019 7
Benefits and
expenses 1 4,283 9,956 (57) 17,117 17,588 (3)
Fair value
and foreign
exchange
losses 75 100 (25) 125 237 (47)
Total losses
on
investments
and
impairment
charges 1,903 (669) N.M. 2,335 22 N.M.
Interest
charges and
related fees 91 110 (17) 201 210 (4)
Other charges 1 0 N.M. 1 0 N.M.
Total charges 6,353 9,497 (33) 19,779 18,057 10
Share in
profit/(loss)
of associates 7 11 (36) 13 14 (7)
Income before
tax 777 1,042 (25) 1,622 1,976 (18)
Income tax (113) (293) (61) (328) (549) (40)
Minority
interest 0 2 N.M. 0 1 N.M.
Net income 664 751 (12) 1,294 1,428 (9)
1 For the first six months includes Commissions and expenses for
EUR 2,983 million (2005: EUR 2,745 million).
NET INCOME
PER SHARE
(EPS)
CALCULATION
amounts
in
millions
(except
per
share
data)
EUR EUR
Second quarter First six months
2006 2005 % 2006 2005 %
Net income 664 751 (12) 1,294 1,428 (9)
Preferred
dividend (80) (79) (1) (80) (79) (1)
Coupons on
perpetuals (31) (30) (3) (63) (59) (7)
Net income
attributable
to ordinary
shareholders 553 642 (14) 1,151 1,290 (11)
Weighted
average
number of
ordinary
shares
outstanding 1,575 1,531 3
Net income
per share 0.35 0.41 (15) 0.73 0.84 (13)
Quarterly
net income
per share 2006 2005
first
quarter 0.38 0.43 (12)
second
quarter 0.35 0.41 (15)
third
quarter 0.38
fourth
quarter 0.41
REVENUES AND
PRODUCTION
amounts
in
millions
EUR EUR
Second quarter First six months
2006 2005 % 2006 2005 %
Revenues
Life general
account single
premiums 630 357 76 1,188 726 64
Life general
account
recurring
premiums 1,585 1,508 5 3,281 3,033 8
Life
policyholders
account single
premiums 1,652 562 194 3,076 1,656 86
Life
policyholders
account
recurring
premiums 965 955 1 2,381 2,363 1
Total life
insurance gross
premiums 4,832 3,382 43 9,926 7,778 28
Accident and
health insurance 563 546 3 1,188 1,131 5
General
insurance 147 148 (1) 320 325 (2)
Total gross
premiums 5,542 4,076 36 11,434 9,234 24
Investment
income 2,628 2,465 7 5,222 4,860 7
Fee and
commission
income 398 350 14 792 688 15
Other revenues 5 17 (71) 10 44 (77)
Total revenues 8,573 6,908 24 17,458 14,826 18
Total revenues
by product
segment
Life insurance 7,697 6,020 28 15,596 12,964 20
Accident and
health insurance 655 634 3 1,373 1,312 5
General
insurance 160 165 (3) 347 356 (3)
Banking
activities 57 68 (16) 113 135 (16)
Other activities 4 21 (81) 29 59 (51)
Total revenues 8,573 6,908 24 17,458 14,826 18
Standardized new
premium
production
insurance
Life single
premiums 2,531 1,456 74 4,802 3,142 53
Life recurring
premiums
annualized 484 586 (17) 943 1,028 (8)
Life total
recurring plus
1/10 single 737 732 1 1,423 1,343 6
Gross deposits
Fixed annuities 403 415 (3) 802 797 1
Institutional
guaranteed
products 1,670 2,008 (17) 5,503 4,431 24
Variable
annuities 1,269 1,131 12 2,745 2,297 20
Total 3,342 3,554 (6) 9,050 7,525 20
Savings deposits 662 642 3 1,370 1,501 (9)
Total production
on balance sheet 4,004 4,196 (5) 10,420 9,026 15
Net deposits
Fixed annuities (1,560) (1,030) (51) (2,906) (1,940) (50)
Institutional
guaranteed
products (796) 432 N.M. 699 563 24
Variable
annuities 128 118 8 274 317 (14)
Total (2,228) (480) N.M. (1,933) (1,060) (82)
Savings deposits 14 12 17 (21) (121) 83
Total net
deposits (2,214) (468) N.M. (1,954) (1,181) (65)
Off balance
sheet production
Synthetic GICs 1,877 1,364 38 3,166 2,572 23
Mutual
funds/Collective
Trusts and
other managed
assets 2,533 2,842 (11) 5,515 6,260 (12)
Total production
off balance
sheet 4,410 4,206 5 8,681 8,832 (2)
INVESTMENTS GEOGRAPHICALLY
amounts
in
million
EUR
(unless
otherwise
stated)
United
Americas Kingdom The United
USD GBP At June 30, 2006 Americas Netherlands Kingdom
Investments
2,601 36 Shares 2,046 4,967 52
98,850 2,546 Bonds 77,755 15,985 3,679
16,559 0 Loans 13,025 7,803 0
Other financial
7,494 0 assets 5,895 5 0
Investments in
482 0 real estate 379 1,693 0
Real estate held
206 0 for own use 162 135 0
Investments
126,192 2,582 general account 99,262 30,588 3,731
0 21,299 Shares 0 8,782 30,775
0 14,199 Bonds 0 9,366 20,515
Separate accounts
and investment
57,774 675 funds 45,445 0 975
Other financial
0 3,034 assets 0 1,733 4,384
Investments in
0 1,157 real estate 0 0 1,671
Real estate held
0 96 for own use 0 0 139
Investments for
account of
57,774 40,460 policyholders 45,445 19,881 58,459
Investments on
183,966 43,042 balance sheet 144,707 50,469 62,190
Off balance sheet
investments third
84,606 2,115 parties 66,551 13,182 3,056
Total revenue
generating
268,572 45,157 investments 211,258 63,651 65,246
Investments
99,556 2,520 Available-for-sale 78,311 18,783 3,641
16,559 0 Loans 13,025 7,803 0
0 0 Held-to-maturity 0 0 0
Financial assets
at fair value
through profit or
67,163 39,269 loss 52,830 22,055 56,739
Investments in
482 1,157 real estate 379 1,693 1,671
Real estate held
206 96 for own use 162 135 139
Total investments
183,966 43,042 on balance sheet 144,707 50,469 62,190
amounts
in
million
EUR
(unless
otherwise
stated)
Holdings,
other
Other activities & Total
At June 30, 2006 countries eliminations EUR
Investments
Shares 128 (19) 7,174
Bonds 3,129 22 100,570
Loans 190 66 21,084
Other financial
assets 55 0 5,955
Investments in
real estate 1 0 2,073
Real estate held
for own use 33 15 345
Investments
general account 3,536 84 137,201
Shares 119 (37) 39,639
Bonds 133 0 30,014
Separate accounts
and investment
funds 887 0 47,307
Other financial
assets 19 0 6,136
Investments in
real estate 0 0 1,671
Real estate held
for own use 0 0 139
Investments for
account of
policyholders 1,158 (37) 124,906
Investments on
balance sheet 4,694 47 262,107
Off balance sheet
investments third
parties 1,163 0 83,952
Total revenue
generating
investments 5,857 47 346,059
Investments
Available-for-sale 2,018 18 102,771
Loans 190 66 21,084
Held-to-maturity 1,257 0 1,257
Financial assets
at fair value
through profit or
loss 1,195 (52) 132,767
Investments in
real estate 1 0 3,744
Real estate held
for own use 33 15 484
Total investments
on balance sheet 4,694 47 262,107
ASSETS AND
CAPITAL
GEOGRAPHICALLY
amounts
in
million
EUR
(unless
otherwise
stated)
United
Americas Kingdom The United Other Total
USD GBP Americas Netherlands Kingdom countries EUR
At June 30,
2006
Assets
business
211,885 47,251 units 166,668 55,894 68,272 5,990 296,824
Other
assets 1,656
Total
assets on
balance
sheet 298,480
Capital in
18,223 2,195 units 14,334 4,569 3,172 1,053 23,128
Total
capital
base 23,391
Other net
liabilities (263)
Total 23,128
At June 30,
2005
Assets
business
207,535 43,309 units 171,630 54,753 64,238 4,767 295,388
Other
assets 3,863
Total
assets on
balance
sheet 299,251
Capital in
18,763 2,057 units 15,517 5,013 3,051 1,292 24,873
Total
capital
base 24,353
Other net
liabilities 520
Total 24,873
At December
31, 2005
Assets
business
210,458 47,319 units 178,400 55,474 69,049 5,720 308,643
Other
assets 2,572
Total
assets on
balance
sheet 311,215
Capital in
19,149 2,124 units 16,232 5,011 3,100 1,155 25,498
Total
capital
base 25,450
Other net
liabilities 48
Total 25,498
Cautionary note regarding Regulation G (non-GAAP financial measure)This press release includes a non-GAAP financial measure: operating
earnings before tax. The reconciliation of this measure to the most
comparable GAAP measure is shown below in accordance with Regulation G. AEGON
believes the non-GAAP measure shown herein, together with the GAAP
information, provides a meaningful measure for the investing public to
evaluate AEGON's business relative to the businesses of its peers.
RECONCILIATION
OPERATING
EARNINGS TO
INCOME BEFORE
TAX
amounts
in
millions
EUR EUR
Second quarter First six months
2006 2005 % 2006 2005 %
Operating
earnings
before tax 680 475 43 1,507 905 67
Gains on
investments 690 540 28 660 848 (22)
Other income 0 (16) N.M. 10 176 (94)
Losses on
investments (540) (32) N.M. (542) (33) N.M.
Impairment
charges (31) 21 N.M. (25) 11 N.M.
Other charges (1) 0 N.M. (1) 0 N.M.
Policyholder
tax (28) 43 N.M. 0 55 N.M.
Share in
profit/(loss)
of associates 7 11 (36) 13 14 (7)
Income before
tax 777 1,042 (25) 1,622 1,976 (18)
Explanatory notes
The published figures are unaudited.
Traditional life includes income on traditional and fixed universal life
products.
Life for account of policyholders includes income on variable universal
life, unitised
pension (UK), other unit-linked products with investments for account of
policyholders and with profit fund in the UK.
Variable annuities includes segregated funds.
Institutional guaranteed products includes income on GICs and funding
agreements.
Fee business includes income on off balance sheet type products.
Reinsurance includes income on reinsurance business assumed from direct
writers.
Other is currently used to report any items which cannot be directly
allocated to a specific line of business.
Currencies
Income statement items: average rate 1 EUR = USD 1.2301 (2005: USD
1.2859).
Income statement items: average rate 1 EUR = GBP 0.6867 (2005: GBP
0.6847).
Balance sheet items: closing rate 1 EUR = USD 1.2713 (2005: USD 1.2092;
year-end 2005: USD 1.1797).
Balance sheet items: closing rate 1 EUR = GBP 0.6921 (2005: GBP 0.6742;
year-end 2005: GBP 0.6853).
DISCLAIMERS
Local currencies and constant currency exchange ratesThis press release contains certain information about our results and
financial condition in USD for the Americas, GBP for the United Kingdom, HUF
for Hungary and NTD for Taiwan because those businesses operate and are
managed primarily in those currencies. Certain comparative information
presented on a constant currency basis eliminates the effects of changes in
currency exchange rates. None of this information is a substitute for or
superior to financial information about us presented in EUR, which is the
currency of our primary financial statements.
Forward looking statements
The statements contained in this press release that are not historical
facts may be forward-looking statements as defined in the U.S. Private
Securities Litigation Reform Act of 1995. Words such as 'believe',
'estimate', 'intend', 'may', 'expect', 'anticipate', 'predict', 'project',
'counting on', 'plan', 'continue', 'want', 'forecast', 'should', 'would', 'is
confident' and 'will' and similar expressions as they relate to us are
intended to identify such forward-looking statements. These statements are
not guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. We undertake no obligation to
publicly update or revise any forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of their dates.
All forward-looking statements are subject to various risks and
uncertainties that could cause actual results to differ materially from
expectations, including, but not limited to, the following:
- Changes in general economic conditions, particularly in the United
States, the Netherlands and the United Kingdom;
- Changes in the performance of financial markets, including emerging
markets, including:
- The frequency and severity of defaults by issuers in our fixed income
investment portfolios; and
- The effects of corporate bankruptcies and/or accounting restatements on
the financial markets and the resulting decline in value of equity and debt
securities we hold;
- The frequency and severity of insured loss events;
- Changes affecting mortality, morbidity and other factors that may
affect the profitability of our insurance products;
- Changes affecting interest rate levels and continuing low interest rate
levels and rapidly changing interest rate levels;
- Changes affecting currency exchange rates, including the EUR/USD and
EUR/GBP exchange rates;
- Increasing levels of competition in the United States, the Netherlands,
the United Kingdom and emerging markets;
- Changes in laws and regulations, particularly those affecting our
operations, the products we sell and the attractiveness of certain products
to our consumers;
- Regulatory changes relating to the insurance industry in the
jurisdictions in which we operate;
- Acts of God, acts of terrorism, acts of war and pandemics;
- Changes in the policies of central banks and/or governments;
- Litigation or regulatory action that could require us to pay
significant damages or change the way we do business;
- Customer responsiveness to both new products and distribution channels;
- Competitive, legal, regulatory, or tax changes that affect the
distribution cost of or demand for our products;
- Our failure to achieve anticipated levels of earnings or operational
efficiencies as well as other cost saving initiatives;
- The impact on our reported financial results and financial condition as
a result of our adoption of International Financial Reporting Standards.
ABOUT AEGON
AEGON is one of the world's largest life insurance and pension companies,
and a strong provider of investment products. We empower our local business
units to identify and provide products and services that meet the evolving
needs of our customers, using distribution channels best suited to their
local markets. We take pride in balancing a local approach with the power of
an expanding global operation.
With headquarters in The Hague, the Netherlands, AEGON companies employ
approximately 27,000 people. AEGON's three major markets are the United
States, the Netherlands and the United Kingdom. In addition, the Group is
present in a number of other countries including Canada, China, Czech
Republic, Hungary, Poland, Slovakia, Spain and Taiwan.
Respect, quality, transparency and trust constitute AEGON's core values
as the company continually strives to meet the expectations of customers,
shareholders, employees and business partners. AEGON is driven to deliver new
thinking and our ambition is to be the best in the industry.
PRESS CONFERENCE AND WEBCAST DETAILS
Press conference call
A press conference call on the first six months 2006 results will be held
this morning at 10.30 hrs (Dutch time). This conference call and Q&A session
will be webcast live on AEGON's website: www.aegon.com.
Analyst and investor conference call
An analyst and investor conference call on the first six months 2006
results will be held today at
Amsterdam 15.00 hrs
London 14.00 hrs
New York 09.00 hrs
The listen-only phone numbers for the conference call are as follows:
+31-(0)45-631-6903 (the Netherlands)
+44-(0)20-7154-2666 (United Kingdom)
+1-480-293-1741 (United States and Canada)The conference call and Q&A session can be followed simultaneously via an
audio webcast on AEGON's website www.aegon.com.
