Appendix A - Group Capital Structure


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A5 – Analysis of return on capital employed

For the six months ended 30 June 2008

  Operating return1 Opening shareholders’ funds including minority interests
£m		 Annualised return on capital
%
Before tax £m After tax £m
Notes
  1. The operating return is based upon Group EEV operating profit, which is stated before impairment of goodwill, amortisation of intangibles, exceptional items, investment variance and tax including policyholder tax.
  2. The net internal debt return loss before tax of £51 million comprises investment return of £44 million offset by Group internal debt costs and other interest of £95 million.
Life assurance  
United Kingdom 471 339 8,108 8.4%
France 297 195 2,661 14.7%
Ireland 30 26 1,138 4.6%
Italy 89 60 1,224 9.8%
Netherlands (including Belgium and Germany) 139 103 4,146 5.0%
Poland 103 84 947 17.7%
Spain 157 110 1,752 12.6%
Other Europe 8 6 256 4.7%
Europe 823 584 12,124 9.6%
North America 139 90 2,356 7.6%
Asia Pacific 47 35 684 10.2%
  1,480 1,048 23,272 9.0%
General insurance and health  
United Kingdom 282 198 2,960 13.4%
France 30 19 301 12.6%
Ireland 41 36 423 17.0%
Netherlands 44 32 756 8.5%
Other Europe 22 15 295 10.2%
Europe 137 102 1,775 11.5%
North America 76 49 726 13.5%
Asia Pacific (1) (1) 26 (7.7)%
  494 348 5,487 12.7%
Fund management 30 21 355 11.8%
Other business (57) (40) 701 (11.4)%
Corporate (49) (54) (31) 348.4%
External debt (34) (24) (1,257) 3.8%
Net internal debt2 (51) (36) (899) 8.0%
Subordinated debt (94) (67) (3,054) 4.4%
  1,719 1,196 24,574 9.7%
Less:  
Minority interests   (149) (3,131) 9.6%
Direct capital instrument   - (990) -
Preference capital   (9) (200) 8.6%
Return on equity shareholders’ funds   1,038 20,253 10.3%

For the year ended 31 December 2007

  Operating return1 Opening shareholders’ funds including minority interests
£m		 Return on capital
%
Before tax £m After tax £m
Notes
  1. The operating return is based upon Group EEV operating profit, which is stated before impairment of goodwill, amortisation of intangibles, exceptional items, investment variance and tax including policyholder tax.
  2. The net internal debt return loss before tax of £53 million comprises investment return of £127 million and Group internal debt costs and other interest of £180 million.
Life assurance        
United Kingdom 864 605 7,160 8.4%
France 537 351 2,291 15.3%
Ireland 77 67 1,019 6.6%
Italy 137 85 803 10.6%
Netherlands (including Belgium and Germany) 352 261 3,837 6.8%
Poland 206 167 719 23.2%
Spain 239 167 1,375 12.1%
Other Europe (5) - 106 -
Europe 1,543 1,098 10,150 10.8%
North America 255 165 2,288 7.2%
Asia Pacific 91 68 496 13.7%
  2,753 1,936 20,094 9.6%
General insurance and health  
United Kingdom 306 214 2,887 7.4%
France 70 45 333 13.5%
Ireland 162 142 423 33.6%
Netherlands 169 123 684 18.0%
Other Europe 41 29 161 18.0%
Europe 442 339 1,601 21.2%
North America 154 100 666 15.0%
Asia Pacific 4 3 22 13.6%
  906 656 5,176 12.7%
Fund management 90 63 305 20.7%
Other business (70) (49) 754 (6.5)%
Corporate (82) (95) (19) 500.0%
External debt (79) (55) (1,258) 4.4%
Net internal debt2 (53) (37) (1,257) 2.9%
Subordinated debt (179) (125) (2,937) 4.3%
  3,286 2,294 20,858 11.0%
Less:        
Minority interests   (259) (2,137) 12.1%
Direct capital instrument   (37) (990) 3.7%
Preference capital   (17) (200) 8.5%
Return on equity shareholders’ funds   1,981 17,531 11.3%

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