Summarised consolidated income statement – Group MCEV basis

For the half year ended 30 June 2010

Half year
ended
30 Jun 2010
£m		 Pro forma
Half year
ended
30 Jun 2009
£m		 Pro forma
Year
ended
31 Dec 2009
£m
Life MCEV operating earnings/(loss) 304 (22) 380
Management services operating profit/(loss) 7 (7) 14
Ignis Asset Management operating profit 22 16 34
Corporate costs (33) (18) (54)
Group MCEV operating earnings/(loss) before tax1 300 (31) 374
Economic variances on covered business1 106 (35) 701
Economic variances on non-covered business (14) (46) (245)
Non-recurring items (22) (62) (78)
Gain on debt refinancing – – 491
Finance costs attributable to owners (81) (125) (390)
Group MCEV earnings/(loss) before tax 289 (299) 853
Tax (charge)/credit on operating earnings/loss (84) 9 (105)
Tax (charge)/credit on non-operating earnings/loss (13) 14 (197)
Total tax (97) 23 (302)
Group MCEV earnings/(loss) 192 (276) 551

1 The Group has moved to calculating the expected contribution on existing business using longer term expectations of investment returns. The pro forma ‘Group MCEV operating earnings/(loss) before tax’ and ‘Economic variances on covered business’ before tax would have been positive £51 million and negative £117 million respectively for the half year ended 30 June 2009 (positive £538 million and £537 million respectively for the year ended 31 December 2009) if the expected contribution had been calculated using longer term rates of return

The earnings on covered business are calculated on a post-tax basis and are grossed up at the effective rate of shareholder tax for presentation in the income statement. The tax rate used is the UK corporate tax rate of 28 percent.