FINANCIAL HIGHLIGHTS - 31 december 2012

Operating companies’ cash generation £690 million (31 December 2011: £810 million)

Continued strong cash generation of £690 million by the Group's operating companies enabled the Group to achieve the upper end of its 2012 target for cash generation of £600 million to £700 million.  Management actions in themselves generated cash flows of £209 million, mainly relating to fund mergers and other de-risking activities.

Group MCEV £2,122 million (31 December 2011: £2,118 million)

MCEV remained stable in the period as value enhancing management actions delivered an incremental uplift to MCEV of £167 million against an average target of £100 million per annum, offset by the recognition of actuarial losses as the Pearl Group Staff Pension Scheme moved to an IFRS deficit, and the payment of the shareholder dividend.

Group IFRS operating profit £410 million (31 December 2011: £387 million)

Group IFRS operating profit has increased to £410 million despite the natural life company run-off and the annuity transfer transaction, primarily due to one-off benefits generated from ongoing system and modelling improvements of £117 million.

Asset management IFRS operating profit £43 million (31 December 2011: £46 million)

Ignis' IFRS operating profit of £43 million was impacted by lower performance fees generated by one of the joint ventures managing life company assets, the restructuring of the joint ventures and life company run-off, partly offset by growth in third party business.

Group assets under management £68.6 billion (31 December 2011: £72.1 billion)

Total Group assets under management decreased by £3.5 billion to £68.6 billion.

IGD surplus (estimated) £1.4 billion (31 December 2011: £1.3 billion)

The estimated IGD surplus has increased to £1.4 billion with capital generation items of £0.6 billion offsetting the recognition of the IFRS deficit on the Pearl Group Staff Pension scheme of £0.2 billion and the payment of dividends, debt interest and debt repayments of £0.3 billion.  The surplus of £1.4 billion represents headroom of £0.6 billion over the Group's IGD capital policy.

Gearing ratio - new methodology
55% (31 December 2011: 57%)

The Group has revised its definition of gearing during the period in order to adopt a calculation that is more consistent with the gearing calculations typically used by credit rating agencies.

Interim dividend per share 47.7 pence per share (31 December 2011: 42 pence per share)

The Board has recommended a final dividend of 26.7 pence per share bringing the total dividend for the year to 47.7 pence.

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