2020430962-532-155Portugal1 4532 237-784-154Ireland8891 309-420-92Total3 1085 068-1 960-493(in Euro million) Amortized cost of securities issued by government and related in Ireland and Portugal with maturities below 10 years amounted to €2,361 million with a net unrealized loss of €170 million as of June 30, 2011. Page 41 (in Euro million) % (value balance sheet) 2.87% 0.19% 3.06% 52.81% 5.03% 0.04% 1.75% 59.63% 3.19% 1.03% 0.01% 4.22% 1.22% 0.86% 0.06% 2.13% 0.88% 0.23% 66.63% 0.00% - 0.00% - 7.14% 0.00% 7.14% 23.17% 100.00% The holdings in Greek sovereign debt scheduled to mature before 2020, subject to the private sector initiative to support Greece announced on July 21, 2011 involving voluntary exchanges and roll-overs of existing Greek government bonds into a combination of four instruments together with a Greek buyback facility, were impaired at fair value, resulted in €-92 million net charge for the period ended June 30, 2011. Net amounts may evolve depending on the timing of realization of these potential losses and on the local regulation environment. In addition debt securities issued by government and related in Greece, Ireland and Portugal classified under Fair value option amounted to €28 million as of June 30, 2011. 5.2. Investment in real estate properties Investment in real estate properties include buildings owned directly and through real estate subsidiaries. Breakdown of the carrying value and fair value of investments in real estate properties at amortized cost, excluding the impact of all derivatives: (in Euro million) June 30, 2011 (a) December 31, 2010 (a) (b) Gross value Amortization Impairment Carrying value Fair value Gross value Amortization Impairment Carrying value Fair value Investment in real estate properties at amortized cost Insurance 17,141 (1,651) (463) 15,027 19,062 16,636 (1,569) (438) 14,628 18,505 Banking and other activities 2,959 (164) (235) 2,560 3,179 2,833 (169) (230) 2,435 3,003 All activities 20,100 (1,815) (697) 17,588 22,241 19,469 (1,737) (668) 17,063 21,509 (a) Assets and liabilities related to discontinued Canadian operations, and some UK Life & Savings portfolios for which the d isposal process is not finalized are classified as held for sale including discontinued operations as of June 30, 2011. As of December 31, 2010, this classification applied to Australian and New Zealand operations and to UK Life & Savings portfolios for which the disposal process was not finalized (see Note 4). (b) Following the refinement of the IFRS chart of accounts in 2011, in order to have a comparable basis, some aggregates of December 31, 2010 statement of financial position have been reclassified (see Note 1.20). Fair value is generally based on valuations performed by qualified property appraisers. They are based on a multi-criteria approach and their frequency and terms are often based on local regulations. Change in impairment and amortization of investments in real estate properties at amortized cost (all activities): (in Euro million) Impairment - Investment in real estate properties Amortization - Investment in real estate properties June 30, 2011 (a) June 30, 2011 (a) Opening value 668 1,737 Increase for the period 39 121 Write back following sale (3) (7) Write back following recovery in value (2) Others (b) (6) (37) Closing value 697 1,815 (a) Assets and liabilities related to discontinued Canadian operations, and some UK Life & Savings portfolios for which the disposal process is not finalized are classified as held for sale including discontinued operations as of June 30, 2011 (see Note 4). (b) Mainly includes change in scope and the effect of changes in exchange rates. As of December 31, 2010, the end of year balance of impairment on investment in real estate properties amounted to €668 million and the amortization balance amounted to €1,737 million. Page 42 5.3. Unrealized gains and losses on financial investments Excluding the effect of derivatives, unrealized capital gains and losses on financial investments, when not already reflected in the income statement, are allocated as follows: June 30, 2011 (a) December 31, 2010 (a) (b) INSURANCE Amortized cost (c) Fair value Carrying value (d) Unrealized gains Unrealized losses Amortized cost (c) Fair value Carrying value (d) Unrealized gains Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale Non controlled investment funds available for sale 294,510 9,028 11,526 5,679 300,905 8,977 14,582 6,703 300,905 9,028 14,582 6,703 13,095 35 3,477 1,482 6,700 86 421 458 296,425 8,227 11,335 5,672 306,408 8,230 15,900 6,621 306,408 8,227 15,900 6,621 15,973 71 4,702 1,037 June 30, 2011 (a) December 31, 2010 (a) (b) BANKING AND OTHER ACTIVITIES Amortized cost (c) Fair value Carrying value (d) Unrealized gains Unrealized losses Amortized cost (c) Fair value Carrying value (d) Unrealized gains Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale 7,708 629 2,685 7,584 629 2,912 7,584 629 2,912 112 - 234 236 - 7 6,326 2,235 2,635 6,099 2,235 2,860 6,099 2,235 2,860 26 - 226 Non controlled investment funds available for sale 173 183 183 10 0 227 237 237 13 June 30, 2011 (a) December 31, 2010 (a) (b) TOTAL Amortized cost (c) Fair value Carrying value (d) Unrealized gains Unrealized losses Amortized cost (c) Fair value Carrying value (d) Unrealized gains Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale Non controlled investment funds available for sale 302,218 9,657 14,211 5,852 308,490 9,606 17,494 6,886 308,490 9,657 17,494 6,886 13,207 35 3,711 1,493 6,936 86 428 458 302,751 10,462 13,970 5,900 312,507 10,465 18,760 6,858 312,507 10,462 18,760 6,858 15,999 71 4,928 1,050 (a) Assets and liabilities related to discontinued Canadian operations, and some UK Life & Savings portfolios for which the d isposal process is not finalized are classified as held for sale including discontinued operations as of June 30, 2011. As of December 31, 2010, this classification applied to Australian and New Zealand operations and to UK Life & Savings portfolios for which the disposal process was not finalized (see Note 4). (b) Following the refinement of the IFRS chart of accounts in 2011, in order to have a comparable basis, some aggregates of December 31, 2010 statement of financial position have been reclassified (see Note 1.20). (c) Net of impairment - including premiums/discounts and related accumulated amortization. (d) Net of impairment (details in Note 5.4). See also table 5.4.1 Breakdown of financial assets subject to impairment. Page 43 (in Euro million) Unrealized losses 5,990 67 137 88 (in Euro million) Unrealized losses 254 - 1 3 (in Euro million) Unrealized losses 6,244 67 138 92 5.4. Financial assets subject to impairment 5.4.1. Breakdown of financial assets subject to impairment (excluding investment in real estate properties) Each investment item is presented net of the effect of related hedging derivatives (IAS 39 qualifying hedges or economic hedges) except derivatives related to macro hedges shown separately. June 30, 2011 (a) December 31, 2010 (a) (b) Cost before impairment and revaluation to fair value (c) Impairment Cost after impairment but before revaluation to fair value (d) Revaluation to fair value Carrying value Cost before impairment and revaluation to fair value (c) Impairment Cost after impairment but before revaluation to fair value (d) Revaluation to fair value Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market 303,229 9,658 (1,451) 301,778 9,658 7,165 3 308,943 9,661 305,083 10,424 (1,567) 303,516 10,424 10,450 8 Debt instruments 312,887 (1,451) 311,436 7,168 318,604 315,507 (1,567) 313,939 10,458 Equity instruments available for sale 16,748 (2,533) 14,214 3,345 17,559 16,604 (2,848) 13,757 5,194 Non controlled investment funds available for sale 6,931 (1,079) 5,852 1,166 7,018 6,517 (1,107) 5,410 1,825 Loans Held To Maturity (0) (0) Loans Available For Sale Loans at cost (e) 42,573 (553) 42,021 (109) 41,911 42,509 (521) 41,988 449 Loans 42,573 (553) 42,021 (109) 41,911 42,509 (521) 41,988 449 TOTAL 379,139 (5,615) 373,523 11,570 385,093 381,137 (6,043) 375,094 17,926 (a) Assets and liabilities related to discontinued Canadian operations, and some UK Life & Savings portfolios for which the disposal process is not finalized are classified as held for sale including discontinued operations as of June 30, 2011. As of December 31, 2010, this classification applied to Australian and New Zealand operations and to UK Life & Savings portfolios for which the disposal process was not finalized (see Note 4). (b) Following the refinement of the IFRS chart of accounts in 2011, in order to have a comparable basis, some aggregates of December 31, 2010 statement of financial position have been reclassified (see Note 1.20). (c) Asset value including impact of discounts/premiums and accrued interests, but before impairment and revaluation to fair value of assets available for sale. (d) Asset value including impairment, discounts/premiums and accrued interests, but before revaluation to fair value of assets available for sale. (e) Including policy loans. (in Euro million) Carrying value 313,966 10,431 324,397 18,951 7,235 (0) 42,438 42,438 393,021 44 5.4.2. real estate properties) Change in impairment on invested assets (excluding investment in January 1, 2011 Increase for the period Write back following sale or reimbursement Write back following recovery in value Other (a) Impairment - Debt instruments 1,567 164 (211) (29) (40) Impairment - Equity instruments 2,848 237 (393) (158) Impairment - Non controlled investment funds 1,107 81 (31) (78) Impairment - Loans 521 31 (3) (13) 16 TOTAL 6,043 513 (638) (42) (260) (a) Mainly relates to changes in the scope of consolidation and impact of changes in exchange rates. (b) Assets and liabilities related to discontinued Canadian operations, and some UK Life & Savings portfolios for which the d isposal process is not finalized as of June 30, 2011 are classified as held for sale including discontinued operations. As of December 31, 2010, this classification applied for Australian and New Zealand operations and for UK Life & Savings portfolios for which the disposal process was not finalized (see Note 4). As of December 31, 2010, the end of year balance of impairment on invested assets excluding real estate properties amounted to €6,043 million. 5.5. Financial assets recognized at fair value Amounts presented below exclude the impact of derivatives and investment funds consolidated by equity method. Among invested financial investments measured at fair value in the consolidated statement of financial position (excluding derivatives, investment funds consolidated by equity method and contracts where the financial risk is borne by policyholders), i.e. €375.9 billion as of June 30, 2011 (€383.4 billion as of December 31, 2010): - €250.6 billion were determined directly by reference to an active market (€271.7 billion at the end of 2010), i.e. level 1 assets and - €125.2 billion related to assets not quoted in an active market/no active market (€111.8 billion at the end of 2010), i.e. level 2 and level 3 assets, of which level 3 assets amounted to €10.0 billion (€10.5 billion at the end of 2010). Fair values determined in whole directly by reference to an active market relate to prices which are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis, i.e. the market is still active. Such assets are categorized in the level 1 of the IAS 39 fair value hierarchy. Fair values for level 2 and 3 assets include: ■ values provided at the request of the Group by pricing services and which are not readily publicly available or values provided by external parties which are readily available but relate to assets for which the market is not always active; and ■ assets measured on the basis of valuation techniques including a varying degree of assumptions supported by market transactions and observable data. For all assets not quoted in an active market/no active market, the classification between level 2 and level 3 depends on the proportion of assumptions used supported by market transactions and observable data: ■ assumed to be used by pricing services; or ■ used by the Group in the limited cases of application of mark to model valuations. As at June 30, 2011, some corporate bonds were reclassified out of level 1 into level 2 because of the widening of bid/ask spreads for such bonds reflecting a decrease in liquidity. Since June 30, 2010 some government bonds (Greece, Ireland, Portugal, Spain) have been transferred out of level 1 into level 2 because of an increased illiquidity observed in the market for such instruments. Further illiquidity was observed throughout the first half of year 2011 for most of these instruments, especially for Greek bonds. However, the pricing policy for such instruments was not modified so far (mark to market prices). Page 45 (in Euro million) June 30, 2011 (b) 1,451 2,533 1,079 553 5,615 Note 6 : Shareholders’ equity and minority interests 6.1. Impact of transactions with shareholders The Consolidated Statement of Changes in Equity is presented as a primary financial statement following the amendment to IAS 1 as described in note 1. 6.1.1. Change in shareholders’ equity Group share for the first half of 2011 a) Share capital and capital in excess of nominal value During the first half of 2011, the following transactions had an impact on AXA’s share capital and capital in excess of nominal value: Share-based payment for €+22 million Realized losses on AXA shares for €-35 million b) Treasury shares As of June 30, 2011, the Company and its subsidiaries owned approximately 18 million AXA shares, representing 0.8% of the share capital, a decrease of 8 million shares compared to December 31, 2010, impacting shareholders’ equity by €+107 million. As of June 30, 2011, the carrying value of treasury shares and related derivatives was €388 million. This figure included €0.8 million relating to AXA shares held by consolidated mutual funds (51,158 shares) not backing contracts where financial risk is borne by policyholders. As of June 30, 2011, 2.3 million treasury shares backing contracts where financial risk is borne by policyholders held in controlled investment funds were not deducted from shareholders’ equity. Their total estimated historical cost was €48 million and their market value €35 million at the end of June 2011. c) Undated subordinated debt and related financial expenses As described in note 1.12.2 of the accounting principles, undated subordinated debts issued by the Group do not qualify as liabilities under IFRS. Undated subordinated debt instruments are classified in shareholders’ equity at their historical value as regards credit spread and interest rates and their closing value as regards exchange rates. The corresponding exchange differences are cancelled out through the translation reserve. During the first half of 2011, the change in other reserves was due to €-140 million in interest expense related to the undated subordinated debt (net of tax), and €-249 million in exchange rate differences. As of June 30, 2011 and December 31, 2010, undated subordinated debt recognized in shareholders’ equity broke down as follows: Page 46 (in Euro million) June 30, 2011 December 31, 2010 Value of the undated subordinated debt in currency of issuance Value of the undated subordinated debt in Euro million Value of the undated subordinated debt in currency of issuance Value of the undated subordinated debt in Euro million October 29, 2004 - 375 M€ 6.0% 375 375 375 375 December 22, 2004 - 250 M€ 6.0% 250 250 250 250 January 25, 2005 - 250 M€ 6.0% 250 250 250 250 July 6, 2006 - 1000 M€ 5.8% 1,000 994 1,000 994 July 6, 2006 - 500 M£ 6.7% 500 549 500 575 July 6, 2006 - 350 M£ 6.7% 350 388 350 407 October 26, 2006 - 600 M A$ (of which 300M A$ 7.5%) 600 442 600 454 November 7, 2006 - 150 M A$ 7.5% 150 111 150 114 December 14, 2006 - 750 M US$ 6.5% 750 516 750 559 December 14, 2006 - 750 M US$ 6.4% 750 516 750 559 October 5, 2007 - 750 M€ 6.2 % 750 746 750 746 October 16, 2007 - 700 M£ 6.8 % 700 773 700 811 Undated notes - variables rates in € 660 660 660 660 Undated notes - 3.3% in JPY 27,000 232 27,000 249 Undated notes - (of which 500 M US$ at 7.1%) in US$ 875 605 875 655 Sub-Total undated subordinated debt 7,408 7,656 Equity component of convertible debt (2017) 95 95 95 95 TOTAL 7,502 7,751 In addition to the nominal amounts shown above, shareholders’ equity included net accumulated financial expenses of: €-1,683 million as of June 30, 2011; €-1,543 million as of December 31, 2010. Undated subordinated debt often contains the following features: Early redemption clauses (calls) at the Group’s option, giving AXA the ability to redeem the principal amount before settlement without penalty on certain dates, and Interest rate step-up clauses with effect from a given date. d) Dividends paid At April 27, 2011 shareholders’ meeting, shareholders approved a dividend distribution of €1,601 million with respect to the 2010 financial year. e) Transaction AXA APH On April 1, 2011, AXA announced that it has successfully completed the AXA APH transaction, whereby it has disposed of its Australian & New Zealand operations and acquired the AXA APH Asia Life operations. This transaction had an impact on AXA Group of €0.7 billion realized capital gains recorded in net income regarding the sale of its Australian and New Zealand operations and €2.5 billion reduction in shareholders’ equity mainly related to the buy-out of minority interests in AXA APH Asian operations in accordance with the application of the new accounting principles on Business Combinations. The ownership increase in a controlled company while maintaining the control is accounted for in shareholders’ equity and no additional goodwill is recognized. 6.1.2. Change in shareholders’ equity Group share for the first half of 2010 a) Share capital and capital in excess of nominal value During the first half of 2010, the following transactions had an impact on AXA’s share capital and capital in excess of nominal value: Share-based payments for €23 million, Realized losses on AXA shares for €-18 million. Page 47 b) Treasury shares As of June 30, 2010, the Company and its subsidiaries owned approximately 27 million AXA shares, representing 1.2% of the share capital, a decrease of 1 million shares or €13 million compared to December 31, 2009. As of June 30, 2010, the carrying value of treasury shares and related derivatives was €421 million. This figure included €0.3 million relating to AXA shares held by consolidated mutual funds (15,492 shares) not backing contracts where financial risk is borne by policyholders. As of June 30, 2010, 2 million treasury shares backing contracts where financial risk is borne by policyholders held in controlled investment funds were not deducted from shareholders’ equity. Their total estimated historical cost was €51 million and their market value €27 million at the end of June 2010. c) Undated subordinated debt and related financial expenses During the first half of 2010, the change in other reserves was due to the redemption of undated subordinated debt (€-33 million) in accordance with the redemption option granted to the issuer ten years after the issue date, €-155 million in interest expense related to the undated subordinated debt (net of tax), and €+535 million in exchange rate differences. d) Dividends paid At the April 29, 2011 shareholders’ meeting, shareholders approved a dividend distribution of €1,259 million with respect to the 2009 financial year. 6.2. Comprehensive income for the period The Statement of Comprehensive Income, presented as primary financial statements, includes net income for the period, the reserve relating to the change in fair value of available for sale financial instruments, the translation reserve, and actuarial gains and losses on employee benefit obligations. 6.2.1. Comprehensive income for the first half of 2011 a) shareholders’ equity Reserve related to changes in fair value of available for sale financial instruments included in The decrease of gross unrealized gains and losses on assets available for sale totaled €-4,915 million, mainly due to €-1,516 million lower unrealized capital gains on equity securities, mainly driven by the sale of Taikang Life stake, as well as other realized capital gains; €-3,484 million on debt instruments primarily due to interest rates increase mainly impacting Japan, France, and Belgium. The following table shows reconciliation between gross unrealized gains and losses on available for sale financial assets and the corresponding reserve recognized in shareholders’ equity: (in Euro million) June 30, 2011 December 31, 2010 Gross unrealized gains and losses (a) 10,589 15,505 Less unrealized gains and losses attributable to: Shadow accounting on policyholders' participation (3,971) (5,801) Shadow accounting on Deferred Acquisition Costs (b) (378) (478) Shadow accounting on Value of purchased Business In force (363) (629) Unallocated unrealized gains and losses before tax 5,877 8,597 Deferred tax (1,299) (1,979) Unrealized gains and losses (net of tax) - Assets available for sale 4,578 6,618 Unrealized gains and losses (net of tax) - Equity accounted companies (c) 100 33 Unrealized gains and losses (net of tax) – 100% - Total 4,677 6,651 Minority interests' share in unrealized gains and losses (d) (17) (203) Translation reserves (e) (102) (262) Unrealized gains and losses (Net Group share) (c) 4,558 6,186 (a) Unrealized gains on total available for sale invested assets including loans and URGL on equity pick up but excluding URG L on CFH. (b) Net of shadow accounting on unearned revenues and fees reserves. (c) Including unrealized gains and losses on assets from discontinued operations (d) Including foreign exchange impact attributable to minority interests. (e) Group share. Page 48 At June 30, 2011, most of the unrealized gains on assets available for sale related to the Life & Savings segment, leading to significant movements in shadow policyholders’ participation. In jurisdictions where participating business represents an important portion of contracts in force and where required minimum local policyholders’ share in the entities’ results (limited to investment or not) are significant, the reconciliation between gross unrealized gains and losses on available for sale financial assets and the corresponding net reserve recognized in shareholders’ equity were as follows as of June 30, 2011: (in Euro million) June 30, 2011 France Life & Savings Germany Life & Savings Switzerland Life & Savings Gross unrealized gains and losses (a) 3,991 247 1,268 Less unrealized gains and losses attributable to: Shadow accounting on policyholders' participation (2,154) (202) (968) Shadow accounting on Deferred Acquisition Costs (b) (85) (6) Shadow accounting on Value of purchased Business In force (19) (39) Unallocated unrealized gains and losses before tax 1,732 45 255 Deferred tax (134) (13) (51) Unrealized gains and losses (net of tax) - Assets available for sale 1,598 33 204 Unrealized gains and losses (net of tax) - Equity accounted companies 4 Unrealized gains and losses (net of tax) – 100% - Total 1,602 33 204 Minority interests' share in unrealized gains and losses (c) (4) (0) Translation reserves (d) (148) Unrealized gains and losses (Net Group share) 1,598 33 56 (a) Unrealized gains and losses on total available for sale invested assets including loans. (b) Net of shadow accounting on unearned revenues and fees reserves. (c) Including foreign exchange impact attributable to minority interests. (d) Group share. The change in reserves related to changes in fair value of available for sale financial instruments included in shareholders’ equity relating to changes in fair value of assets in June 30, 2011 and December 31, 2010 broke down as follows: (in Euro million) June 30, 2011 December 31, 2010 Unrealized gains and losses (net of tax) 100%, opening 6,651 4,687 Transfer in the income statement on the period (a) (906) (878) Investments bought in the current accounting period and changes in value (619) 2,519 Foreign exchange impact (278) 388 Change in scope and other changes (171) (66) Unrealized gains and losses (net of tax) 100%, closing 4,677 6,651 (a) Transfer induced by disposal of financial assets, impairment write-back following reevaluation, or transfer of expenses following impairment charge during the period, and debt instruments discount premium impacts. b) Translation reserve The total impact of foreign exchange rate movement was €-2,069 million (of which €-1,945 million from group share and €- 124 million from minority interest rates) as of June 30, 2011. The group share translation reserves movement (€-1,945 million) was mainly driven by the United States (€-773 million), Japan (€-518 million), the United Kingdom (€-211 million), by the impact of the AXA APH transaction with AMP (€-471 million), partly offset by the Company (€+410 million) driven by change in fair value of derivatives and debts hedging net investments in foreign operations. Page 49 c) Employee benefits actuarial gains and losses The total impact of employee benefits actuarial gains and losses for the first half year 2011 amounted to €+12 million net group share. 6.2.2. Comprehensive income for the first half of 2010 a) shareholders’ equity Reserve related to changes in fair value of available for sale financial instruments included in The change in reserves for unrealized gains and losses on assets available for sale totaled €+1,177 million (net Group share), mainly attributable to the United States (€+448 million), France (€+263 million), Belgium (€+209 million) and Germany (€+192 million). The increase of gross unrealized gains and losses on assets available for sale totaled €+6,031 million, mainly due to debt securities (€+6,714 million) primarily following the decreases on interest rates, partly offset by a €-822 million decrease from equity securities. b) Translation reserve The total impact of foreign exchange rate movements was €+2,025 million (of which group share was €+1,613 million). The group share translation reserve movement (€+1,613 million) was mainly driven by the United States (€+1,570 million), Japan (€+979 million), Switzerland (€+786 million), and the United Kingdom (€+354 million), which was partly offset by the Company (€-2,733 million driven by the change in fair value of currency hedges set up to hedge net investments in foreign operations). c) Employee benefits actuarial gains and losses The group share change in employee benefits actuarial losses for the first half year 2010 amounted to €-487 million, mainly due to the decrease of discount rates especially in the United Kingdom (€-335 million) and in the United States (€-132 million), partly offset by lower long term inflation rates in the United Kingdom. 6.3. Change in minority interests Under IFRS, minority interests in most investment funds in which the Group invests consist of instruments that holders can redeem at will at fair value, and qualify as a liability rather than shareholders’ equity items. The same is true for puttable instruments held by minority interest holders. 6.3.1. Change in minority interests for the first half of 2011 The €1,694 million decrease in minority interests to €2,476 million was due to transactions with shareholder for €-1,598 million as a result of AXA APH transaction and comprehensive income for €-96 million. The comprehensive income for the period notably included the following: - Net income attributable to minority interests for €+209 million; - Change in translation reserves for €-124 million, including €+248 million following the transaction with AXA APH - Reserves relating to changes in fair value through shareholders’ equity for €-181 million, including €-152 million following the transaction with AXA APH 6.3.2. Change in minority interests for the first half of 2010 The €+516 million increase in minority interests to €4,209 million was mainly due to transactions with shareholder for €-196 million, and comprehensive income for €+712 million. Transactions with shareholders included mainly dividends paid to minority interests holders for €-227 million. The comprehensive income for the period notably included the following: - Net income attributable to minority interests for €+198 million; and - Change in translation reserves for €+412 million. Page 50 Note 7 : Financing debt (in Euro million) Carrying value June 30, 2011 December 31, 2010 AXA Debt component of subordinated notes due 2014 (€) Debt component of subordinated notes, 3.75% due 2017 (€) Subordinated notes due 2020 (€) Subordinated notes, 5.75% due 2040 (€) U.S. registered redeemable subordinated debt, 8.60% 2030 (US$) U.S. registered redeemable subordinated debt, 7.125% 2020 (£) 6,467 1,935 1,390 - 1,300 821 360 6,401 1,901 1,360 50 1,300 890 378 Derivatives on debts instruments issued (a) 662 522 AXA Financial 139 150 Surplus Notes, 7.70 %, due 2015 138 149 MONY Life 11.25% Surplus Notes due 2024 1 1 AXA Bank Europe 389 366 Subordinated notes Subordinated undated notes, variable 145 219 366 Derivatives relating to subordinated debts 25 AXA-MPS Vita and Danni 108 108 Subordinated Notes, euribor 6 months + 81bp 108 108 Other subordinated debt (under €100 million) 27 41 SUBORDINATED DEBT 7,131 7,066 AXA 1,910 1,892 Euro Medium Term Notes, 6.0% due through 2013, and BMTN Commercial paper 890 20 892 - Euro Medium Term Notes, due through 2015 1,000 1,000 AXA Financial 240 260 Senior notes, 7%, due 2028 240 260 AXA UK Holdings 169 178 GRE : Loan Notes, 6.625%, due 2023 169 178 Other financing debt instruments issued (less than €100 million) 150 170 Other financing debts instruments issued under euro 100 million 124 135 Derivatives relating to other financing debts instruments issued (a) 26 35 FINANCING DEBT INSTRUMENTS ISSUED 2,470 2,500 AXA 745 785 Morocco 67 68 Other financing debts owed to credit institutions (under €100 million) 13 34 FINANCING DEBT OWNED TO CREDIT INSTITUTIONS 825 887 TOTAL FINANCING DEBT 10,426 10,454 (a) Hedging instruments according to IAS 39 and economic hedge derivatives which are not acting as hedge under IAS 39. Total financing debt decreased by €28 million between December 31, 2010 and June 30, 2011, or increased by €57 million at constant exchange rates, to €10,426 million. The increase at constant exchange rates was mainly due to: i. €140 million increase in fair value of cross currency and interest rate swaps. Partly offset by: ii. iii. €50 million decrease following the early repayment of a subordinated debt; €32 million decrease in the Mediterranean and Latin America region reflecting repayment of financing debt owed to credit institutions. Page 51 Note 8 : Net income per ordinary share The Group calculates a basic net income per ordinary share and a diluted net income per ordinary share: • number of outstanding ordinary shares during the period. • The calculation of diluted net income per ordinary share takes into account shares that may be issued as a result of stock option plans. The effect of stock option plans on the number of fully diluted shares is taken into account only if options are considered to be exercisable on the basis of the average stock price of the AXA share over the period. The calculation of the basic net income per ordinary share assumes no dilution and is based on the weighted average (in Euro million) (a) June 30, 2011 June 30, 2010 NET INCOME GROUP SHARE 3,999 944 Undated subordinated debt financial charge (140) (155) NET INCOME INCLUDING IMPACT OF UNDATED SUBORDINATED DEBT A 3,859 789 Weighted average number of ordinary shares (net of treasury shares) - opening 2,294 2,264 Increase in capital (excluding stock option exercised) (b) Stock options exercised (b) Treasury shares (b) 4 (0) Share purchase program (b) WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES B 2,298 2,263 NET INCOME PER ORDINARY SHARE C = A / B 1.68 0.35 Potentially dilutive instruments : Stock options 3 3 Other 1 4 FULLY DILUTED - WEIGHTED AVERAGE NUMBER OF SHARES (c) D 2,302 2,271 NET INCOME INCLUDING IMPACT OF UNDATED SUBORDINATED DEBT E 3,859 789 FULLY DILUTED NET INCOME PER ORDINARY SHARE F = E / D 1.68 0.35 (a) Except for number of shares (million of units) and earnings per share (Euro). (b) Weighted average. (c) Taking into account the impact of potentially dilutive instruments. Page 52 Statutory auditors’ review report on the 2011 Half Year Financial Information PricewaterhouseCoopers Audit 63, rue de Villiers 92208 Neuilly-sur-Seine Cedex Mazars 61, rue Henri Régnault 92075 Paris La Défense Cedex STATUTORY AUDITORS’ REVIEW REPORT ON THE 2011 HALF-YEAR FINANCIAL INFORMATION This is a free translation into English of the Statutory Auditors’ review report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France. To the Shareholders AXA S.A. 25 avenue Matignon 75008 Paris In compliance with the assignment entrusted to us by your General Meeting and in accordance with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code (Code monétaire et financier), we hereby report to you on: - the review of the accompanying condensed half-year consolidated financial statements of AXA SA, for the six months ended June 30, 2011 ; the verification of the information contained in the half-year management report. These condensed half-year consolidated financial statements are the responsibility of the Board of Directors, in a context characterised by a public debt crisis in certain euro-zone countries and in particular in Greece, the effects of which are described in notes 5.1 and 5.5 to the financial statements.. Our role is to express a conclusion on these financial statements based on our review. 1. Conclusion on the financial statements We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, 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 professional standards applicable in France 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. Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-year consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 - the standard of IFRSs as adopted by the European Union applicable to interim financial information. 2. Specific verification We have also verified the information given in the half-year management report on the condensed half-year consolidated financial statements subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-year consolidated financial statements Neuilly sur Seine and Courbevoie, August 4, 2011 The Statutory Auditors French original signed by PricewaterhouseCoopers Audit Mazars Michel Laforce Pierre Coll Philippe Castagnac Gilles Magnan Statement of the person responsible for the Half Year Financial Report Statement of the person responsible for the Half Year Financial Report I, the undersigned, hereby certify that, to the best of my knowledge, the consolidated summarized financial statements for the first half of the fiscal year 2011 have been drawn up in accordance with applicable accounting standards and give an accurate view of the assets and liabilities, the financial position and the profit or loss of the Company and of all businesses and firms included within the scope of the consolidated Group and that the half year activity report, to be found in the first part of this Report, accurately reflects the significant events which occurred during the first six months of the fiscal year as well as their impact on the financial statements, the main related-parties transactions and the principal risks and uncertainties for the remaining six months of the fiscal year. Paris, August 5, 2011. Henri de Castries Chairman & Chief Executive Officer Person responsible for financial information Denis Duverne Deputy Chief Executive Officer, in charge of Finance, Strategy and Operations"},"Input":{"kind":"string","value":"Semestriel, 2011, Insurance, AXA"},"Query":{"kind":"string","value":"write me a financial report"}}},{"rowIdx":297,"cells":{"Period":{"kind":"string","value":"Semestriel"},"Year":{"kind":"number","value":2012,"string":"2,012"},"Subject":{"kind":"string","value":"Insurance"},"Company":{"kind":"string","value":"AXA"},"Prompt":{"kind":"string","value":"Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.\n\n### Instruction:\nWrite a detailed financial report on the given subject and company.\n\n### Subject:\nInsurance\n\n### Company:\nAXA\n\n### Response:\n"},"Response":{"kind":"string","value":"Half Year Financial Report June 30, 2012 Table of contents I Activity Report ...................................................................... II Consolidated financial statements ...................................... III Statutory auditors’ review report on the 2012 Half Year Financial Information .................................................... IV Statement of the person responsible for the Half Year Financial Report ...................................................................... Activity Report______________________________________________________________________Half Year 2012 Activity Report / Half Year 2012 Page 1 Activity Report______________________________________________________________________Half Year 2012 Cautionary statements concerning forward-looking statements This report includes certain terms that are used by AXA in analyzing its business operations and, therefore, may not be comparable with terms used by other companies; these terms are defined in the glossary provided at the end of this document. Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Please refer to AXA’s Registration Document for the year ended December 31, 2011, for a description of certain important factors, risks and uncertainties that may affect AXA’s business. AXA undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. Cautionary statements concerning forward-looking statements ..................................................................... 2 Financial market conditions in first half of 2012 ........................................................................................... 3 Operating highlights ..................................................................................................................................... 5 Consolidated gross revenues ......................................................................................................................... 6 Consolidated underlying earnings, adjusted earnings and net income .......................................................... 11 Life & Savings Segment ............................................................................................................................. 17 Property & Casualty Segment ..................................................................................................................... 41 International Insurance Segment ................................................................................................................. 61 Asset Management Segment ....................................................................................................................... 65 Banking ...................................................................................................................................................... 67 Holdings and other companies .................................................................................................................... 71 Outlook ...................................................................................................................................................... 74 Glossary ..................................................................................................................................................... 75 Page 2 Activity Report______________________________________________________________________Half Year 2012 Financial market conditions in first half of 2012 In the United States and in Europe, economic indicators generally improved over the first quarter of 2012. In the United States, the manufacturing ISM index continued to deliver an optimistic message of expansion with external demand showing strength. In Europe, the situation from one country to another was quite mixed with sharp recessions in most of the peripheral nations and better performances in France and Germany. Banking and sovereign tensions continued to dissipate in the Euro area due to injections of long term liquidity by the ECB and progress on the reform front. After an encouraging first quarter for the global state of the economy, in the second quarter, a generalized slowdown affected developed as well as developing economies. In the United States, poor prospects in domestic demand, along with uncertainties in global markets, took a toll on companies’ confidence. The manufacturing ISM index declined in June, below 50, for the first time in three years, showing contraction in the industrial production. In the Euro zone, after a calmer period, concerns about the political situation in Greece, and the possibility of that country exiting the Euro zone, added to difficulties in the Spanish banking sector, resulted in new tensions on bond markets and on credit conditions. Economic indicators deteriorated everywhere in Europe. Even Germany, a country which, so far, had succeeded in maintaining growth amid the current economic setback, recorded a slowdown in May and June, according to the IFO Index. In this environment, Japanese investors remained cautious and scaled down capital expenditure. After the resurgence of automobile sales during the first quarter, private expenditure slowed down. Indeed, the labour market remained weak as wages and employment were nearly stagnant. Against this unfavourable environment, emerging countries were also affected. China showed signs of slowdown, while Brazil and India registered disappointing growth rates. Poor economic performance in their main partner countries finally depressed economic activity in emerging countries, in particular on investment. STOCK MARKETS Equity markets performance was mixed during the first half of this year. The MSCI World Index increased by 5% with good performance in the United States and in Japan. However, in Europe the performance was weak and very contrasted from one country to another (negative performance in the periphery, especially in Spain and Italy). The Dow Jones Industrial Average Index in New York increased by 5% in the first half of 2012 and the S&P 500 Index by 8%. The FTSE 100 Index in London ended the first half of 2012 almost exactly flat compared to December 31, 2011. The CAC 40 Index in Paris increased by 1% and the Nikkei Index in Tokyo appreciated by 7%. The MSCI G7 Index increased by 6% and the MSCI Emerging Index appreciated by 3%. The S&P 500 implied volatility Index decreased from 23.4% to 17.1% between December 31, 2011 and June 30, 2012. BOND MARKETS The US 10-year T-bond ended the half year at 1.66%, a decrease of 22 bp compared to December 31, 2011. The 10- year German Bund yield decreased by 23 bp to 1.60%. The France 10-year government bond yield decreased by 46 bp to 2.69%. The 10-year Japanese government bond ended the half year at 0.85 %, a decrease of 14.5 bp. The 10-year Belgium government bond ended the half year at 3.03%, a 106 bp decrease compared to December 31, 2011. Regarding the evolution of 10-year government bonds on European peripheral countries: Italy ended the half year at 5.82% (a decrease of 120 bp compared to December 31, 2011), Spain ended the half year at 6.33% (an increase of 124 bp compared to December 31, 2011), Greece ended the half year at 25.83% (a decrease of 913 bp compared to December 31, 2011), Ireland ended the half year at 8.21% (stable compared to December 31, 2011), Portugal ended the half year at 10.16% (a decrease of 320 bp compared to December 31, 2011). In Europe, the iTRAXX Main spreads decreased by 7 bp compared to December 31, 2011 and ended half year at 166 bp while the iTRAXX Crossover decreased by 93 bp to 662 bp. In the United States, the CDX Main spread Index decreased by 8 bp to 112 bp. Page 3 Activity Report______________________________________________________________________Half Year 2012 EXCHANGE RATES In this context, the Euro decreased against the main currencies during the first half of 2012 reflecting fears that Greece exits from the monetary union, and disappointing economic results. Compared to December 31, 2011, the US Dollar gained 2% against the Euro (closing exchange rate moved from $1.30 at the end of 2011 to $1.27 at the end of June 2012). The Yen decreased by 1% against the Euro (closing exchange rate moved from Yen 99.88 at the end of 2011 to Yen 101.26 at the end of June 2012). The Pound Sterling gained 3% against the Euro (closing exchange rate moved from £0.835 at the end of 2011 to £0.809 at the end of June 2012). The Swiss Franc gained 1% against the Euro (closing exchange rate moved from CHF 1.21 at the end of 2011 to CHF 1.20 at the end of June 2012). On an average rate basis, the US Dollar gained 7% against the Euro (from $1.40 over the first half of 2011 to $1.30 over the first half of 2012). The Yen gained 8% against the Euro (from Yen 112.4 over the six months to March 31, 2011 used for half year 2011 accounts to Yen 103.4 over the first half of 2012). The Pound Sterling gained 5% (from £0.869 over the first half of 2011 to £0.823 over the first half of 2012) and the Swiss Franc gained 5% against the Euro (from CHF 1.27 over the first half of 2011 to CHF 1.20 over the first half of 2012). Page 4 Activity Report______________________________________________________________________Half Year 2012 Operating highlights Significant acquisitions AXA and HSBC long-term partnership in Property & Casualty in Asia and Latin America On March 7, 2012, AXA and HSBC announced they have entered into an agreement whereby AXA would acquire HSBC’s P&C businesses in Hong Kong, Singapore and Mexico. In addition, AXA would benefit from a 10-year exclusive P&C bancassurance agreement with HSBC in these countries as well as in India, Indonesia and China. This transaction will position AXA as the number one P&C player in Hong Kong, and strengthen its leading positions in Mexico and Singapore. The Hong Kong and Singapore businesses to be acquired benefit from multi-channel distribution, including through HSBC Bank branches, as well as strong agent and broker networks. The net upfront cash consideration for AXA is USD 494 million or ca. Euro 374 million, and will be funded through internal resources. The closing of the transaction is subject to regulatory approvals and is expected in the course of the second half of 2012. Significant disposals There were no significant disposals in the first half of 2012. Other AXA Rosenberg In the first half of 2011 a number of class action law suits were filed against AXA Rosenberg on behalf of certain AXA Rosenberg clients. These suits made various allegations including breach of fiduciary duty, negligence/gross negligence in connection with the coding error and requested damages in an unspecified amount to be determined at trial. In the last quarter of 2011, the parties entered into a settlement agreement following a nonbinding mediation process. In March 2012, the Federal District Court for the North District of California approved a settlement of these class actions under the terms of which AXA Rosenberg paid USD 65 million. Launch of the Joint-Venture in China between ICBC, AXA and Minmetals On July 19, 2012, ICBC-AXA Life, a Life Insurance joint-venture between Industrial and Commercial Bank of China Co. Ltd (ICBC), AXA and China Minmetals Corporation (Minmetals), announced its official launch in China. It has received approval from China’s State Council and all relevant regulatory bodies. ICBC-AXA Life succeeds AXA-Minmetals Assurance (AXA-Minmetals), established in 1999. Following the equity transfer agreement reached on October 28, 2010 between ICBC , AXA and Minmetals, ICBC bought 60% of shares of AXA-Minmetals and became the majority shareholder of the company. AXA owns 27.5% and Minmetals owns 12.5%. AXA rating On January 27, 2012, S&P affirmed the 'AA-' long-term ratings on AXA Group, assigning a negative outlook, and removing the CreditWatch with negative implications under which AXA Group and other financial institutions were placed on December 9, 2011 following the rating actions on the Eurozone sovereigns. In February 2012, Moody’s Investors Services reaffirmed the Aa3 rating for counterparty credit and financial strength on AXA’s principal insurance subsidiaries, and A2 for counterparty credit rating on the Company, assigning a negative outlook. Related-party transactions During the first half of the fiscal year 2012, there were (1) no modifications to the related-party transactions described in Note 28 \"Related-Party transactions\" of the audited consolidated financial statements for the fiscal year ended December 31, 2011 included in the full year 2011 Registration Document (pages 392 and 393) filed with the Autorité des marchés financiers and available on its website (www.amf-france.org) as well as on the Company's website (www.axa.com), which significantly influenced the financial position or the results of the Company during the first six months of the fiscal year 2012, and (2) no new transaction concluded between AXA SA and related parties that significantly influenced the financial position or the results of the Company during the first six months of 2012. Page 5 Activity Report______________________________________________________________________Half Year 2012 Risk factors The principal risks and uncertainties faced by the Group are described in detail in Section 3.1 “Regulation” and Section 3.2 \"Risk factors\" included in the full year 2011 Registration Document (respectively on pages 172 to 184 and pages 185 to 204) filed with the Autorité des marchés financiers and available on its website (www.amf-france.org) as well as on the Company's website (www.axa.com). The description contained in these Sections of the 2011 Registration Document remains valid in all material respects at the date of this Report regarding the appreciation of the major risks and uncertainties affecting the Group at June 30, 2012 and which management expects may affect the Group during the remainder of 2012. Page 6 Activity Report______________________________________________________________________Half Year 2012 Consolidated gross revenues Consolidated Gross Revenues (a) HY 2012 HY 2011 FY 2011 Life & Savings 28,607 27,841 52,431 of which Gross written premiums 27,889 27,010 50,918 of which Fees and revenues from investment contracts with no participating feature 164 182 350 Property & Casualty 16,173 15,350 27,046 International Insurance 1,825 1,739 2,876 Asset Management 1,575 1,658 3,269 Banking (b) 226 248 485 Holdings and other companies (c) 0 0 0 TOTAL 48,405 46,836 86,107 (a) Net of intercompany eliminations. (b) Excluding (i) net realized capital gains or losses and (ii) change in fair value of assets under fair value and of option s and derivatives, net banking revenues and total consolidated revenues would respectively amount to €224 million and €48,403 million for half year 2012 and €479 million and €86,101 million for full year 2011. (c) Includes notably CDOs and real estate companies. (d) Changes are on a comparable basis. On a comparable basis means that the data for the current year period were restated using the prevailing foreign currency exchange rates for the same period of prior year (constant exchange rate basis). It also means that data in one of the two periods being compared were restated for the results of acquisitions, disposals and business transfers (constant structural basis) and for changes in accounting principles (constant methodological basis). In particular, comparable basis for revenues and APE1 in this document means including, in both periods, acquisitions, disposals and business transfers, and net of intercompany transactions. Consolidated gross revenues for half year 2012 reached €48,405 million, up 3% compared to first half year 2011. The restatements to a comparable basis were mainly driven by the depreciation of Euro against most of major currencies (€+1,365 million or +2.9 points) and the impact of the disposal of Australia and New Zealand operations in 2011 (€-352 million or -0.8 point). On a comparable basis, gross consolidated revenues were up 1%. 1 Annual Premium Equivalent (APE) is a new regular premiums plus are tenth of single premiums, in line with EEV methodology. APE is Group share. Page 7 (in Euro million) HY 2012/ HY 2011 (d) 0.8% 3.7% 2.4% 10.1% 7.7% n.a. 1.4% Activity Report______________________________________________________________________Half Year 2012 Annual Premium Equivalent Annual Premium equivalent (in Euro million) HY 2012 HY 2011 FY 2011 HY 2012/HY 2011 (a) TOTAL France United States United Kingdom Japan Germany Switzerland Belgium Central & Eastern Europe Mediterranean and Latin American Region Hong Kong South-East Asia, India and China Mature markets High growth markets (a) Changes are on a comparable basis. 3,075 641 599 283 269 258 256 119 78 190 180 201 2,590 485 2,948 664 502 296 212 258 277 80 129 202 166 162 2,467 481 5,733 1,340 1,018 535 463 506 397 173 213 432 330 326 4,808 925 0.0% -5.2% 10.0% -9.3% 17.3% 0.2% -12.3% 49.6% -36.2% -6.0% -0.4% 18.0% 0.6% -3.0% Total Life & Savings New Business APE amounted to €3,075 million, up 4% on a reported basis or stable on a comparable basis. This was mainly driven by Belgium, South-East Asia, India and China, Japan and the United States, offset by Central & Eastern Europe, Switzerland, the United Kingdom, Mediterranean and Latin American Region and France. High growth markets decreased by 3% as strong growth in South-East Asia, India and China (€+29 million or +18%) was more than offset by Central & Eastern Europe (€-47 million or -36%), negatively impacted by regulatory developments in Poland. The United States APE increased by €50 million (+10%) to €599 million reflecting higher sales of unit-linked products (€+49 million) as a consequence of both higher (i) non GMxB Variable Annuity product sales (+31% or €+29 million) driven by the availability of Structured Capital Strategies product and the new Retirement Gateway product in the wholesale channel, and (ii) GMxB Variable Annuity product sales (+17% or €+20 million) mainly on new Accumulator 11 product. Belgium APE increased by €40 million (+50%) to €119 million, mainly driven by higher sales of Crest Classic G/A Savings product as a result of a two-month sales campaign in January and February, as well as G/A Protection & Health products reflecting the acquisition of a large Group contract. Japan APE increased by €37 million (+17%) to €269 million driven by higher sales of Variable Annuity products (€+18 million) as well as sales of G/A Protection & Health products (€+17 million) driven by Term Rider and LTTP products which were actively promoted. South-East Asia, India and China APE increased by €29 million (+18%) to €201 million mainly driven by (i) Thailand (€+15 million) reflecting higher sales of G/A Protection with Savings and G/A Pure Protection products, (ii) Indonesia (€+7 million) due to sales of unit-linked products through the bancassurance channel, and (iii) Singapore (€+4 million) driven by unit-linked products through the broker channel. Central & Eastern Europe APE decreased by 47 million (-36%) to €78 million. The decrease was driven by (i) Pension Funds (€- 32 million) as a result of the change in regulation in Poland and (ii) lower Life sales (€-15 million) mainly driven by unit-linked sales due to the end of cooperation with lower profitability brokers in the Czech Republic and Slovakia. Page 8 Activity Report______________________________________________________________________Half Year 2012 France APE decreased by €36 million (-5%) to €641 million mainly due to (i) lower sales of G/A Individual Savings (-10% or €-39 million) reflecting the negative trend in the French market, partly offset by (ii) an increase in G/A Protection & Health and Group retirement sales. Switzerland APE decreased by €34 million (-12%) to €256 million mainly driven by Group Life after exceptionally strong sales of full coverage insurance contracts in the first half of 2011. UK APE decreased by €28 million (-9%) to €283 million driven by unit-linked products (€-37 million) as a result of lower volumes in Individual Pension business and in Offshore Bond business written through Isle of Man. This was partly mitigated by Mutual Funds sales (€+10 million) through the Elevate wrap platform. Mediterranean and Latin American Region APE decreased by €12 million (-6%) to €190 million mainly due to mature markets (€-16 million) reflecting (i) a significant decrease in G/A Savings products (€-36 million or -38%) as a result of the increased focus on unit-linked products and high competitive environment from banks, partly offset by (ii) unit-linked products (€+21 million or +36%). Property & Casualty Revenues Property & Casualty Revenues (in Euro million) HY 2012 HY 2011 FY 2011 HY 2012/ HY 2011 (a) TOTAL . Mature markets Direct High growth markets 16,173 13,259 1,085 1,829 15,350 12,726 1,059 1,564 27,046 21,609 2,102 3,335 3.7% 2.4% -1.1% 17.4% (a) Changes are in comparable basis Property & Casualty gross revenues were up 5% to €16,173 million or up 4% on a comparable basis. Personal lines increased by 3% especially in Germany, the United Kingdom & Ireland, the Mediterranean and Latin American Region partly offset by Direct. Commercial lines increased by 5%, primarily in the Mediterranean and Latin American Region, the United Kingdom & Ireland, France and Asia. Personal lines (58% of P&C gross revenues) were up by 3% on a comparable basis, stemming from both Motor (+2%) and Non-Motor (+5%), primarily as a result of tariff increases in mature markets and higher volumes in high growth markets. Motor revenues grew by €105 million or +2% mainly driven by: Germany (+8%) mainly as a result of tariff increases and successful turn of year business, - the Mediterranean and Latin American Region (+4%), primarily driven by higher volumes in Turkey (+30%) and Mexico (+13%), tariff increases in Italy (+10%), partly offset by Spain (-9%) due to a competitive market in a depressed economic environment, Asia (+14%) driven by strong volume increase in Malaysia (+8%), - partly offset by Direct (-3%) reflecting a 35% decrease in the United Kingdom as a result of portfolio pruning and repricing with lower retention as well as lower new business, partly offset by significant growth in other countries (+10%) with Italy, Poland and France (+70%, +37% and +10% respectively) as well as higher volumes in Japan (+5%). Non-Motor revenues increased by €163 million or +5% mainly due to: the United Kingdom & Ireland (+8%) mainly in Household, driven by the United Kingdom with new partnerships and improved retention, Germany (+5%) and France (+2%) mainly due to tariff increases in Household. Commercial lines (41% of P&C gross revenues) increased by 5% on a comparable basis with Motor and Non- Motor up by 12% and 3% respectively. Motor revenues increased by €157 million or +12%, mainly driven by: the Mediterranean and Latin American Region (+23%) notably in Mexico (+40%) fuelled by positive portfolio developments, and in Turkey (+27%) reflecting more competitive products, - France (+14%) mainly as a result of both tariff increases and higher volumes, Page 9 Activity Report______________________________________________________________________Half Year 2012 - the United Kingdom (+14%) mainly driven by tariff increases and increased retained business in Motor fleet. Non-Motor revenues increased by €156 million or +3% reflecting growth in: the United Kingdom (+9%) primarily due to Health portfolio development in the United Kingdom and abroad, - France (+4%) mainly following tariff increases in Construction and Property, partly offset by lower volumes, - the Mediterranean and Latin American Region (+3%) mainly driven by new business in Health in the Gulf. International Insurance revenues International Insurance gross revenues were up 5% or 2% on comparable basis to €1,825 million mainly driven by (i) AXA Corporate Solutions up 2% to €1,334 million mainly as a result of positive portfolio developments and tariff increases in Construction, Property and Marine, partly offset by non renewal of a large contract in Liability and tariff decrease in Aviation, and (ii) AXA Assistance up 4% to €401 million. Asset management revenues Asset Management gross revenues decreased by 5% or 10% on a comparable basis to €1,575 million mainly driven by a decrease in management fees (€-117 million) at AllianceBernstein and lower performance fees and real estate transaction fees at AXA IM (€-35 million). AllianceBernstein revenues were down 13% to €965 million primarily due to lower management fees (-17%), resulting from lower bps (-3.6 bps) reflecting change in business mix, and lower average assets under management (-9%) versus 1H 2011. Assets Under Management (AUM) increased by 3% or €11 billion from year-end 2011 to €346 billion driven by (i) €+13 billion from market appreciation, (ii) €+8 billion favorable foreign rate exchange impact, partly offset by (iii) €- 5 billion net outflows (€5 billion net inflows from Retail clients offset by €-7 billion net outflows from Institutional clients and €-3 billion net outflows from Private Clients) and (iv) €-5 billion change in scope due to the disposal of AXA Canada and AXA Australia operations. AXA Investment Managers revenues were down 6% to €610 million. Excluding distribution fees (retroceded to distributors), net revenues decreased by €31 million (-6%) mainly resulting from lower performance and Real Estate transaction fees while management fees remained stable. AUM increased by 6% or +30 billion from year-end 2011 to €542 billion mainly as a result of (i) €+28 billion market appreciation, (ii) €+4 billion favorable foreign exchange rate impact, partly offset by (iii) €-2 billion outflows. Net outflows of €-2 billion were mainly driven by the voluntary exit from unprofitable employee shareholding plan schemes (€-4 billion) and outflows at AXA Rosenberg (€-1 billion), partly offset by net inflows mainly on AXA Private Equity, AXA Framlington and AXA Fixed Income. Net banking revenues Net banking revenues were down 9% to €226 million or down 8% on a comparable basis, mainly driven by France (- 43%) due to higher interest paid to customers on savings account as a result of the promotional campaign realized during the first half of 2012, while AXA Bank Belgium increased by 13% to €153 million mainly due to higher realized capital gains, partly offset by higher impairments on fixed income assets. Page 10 Activity Report______________________________________________________________________Half Year 2012 Consolidated underlying earnings, adjusted earnings and net income IASB and FASB deliberations regarding the Insurance Contracts Phase II project as well as change in USGAAP indicate that accounting standards are moving to lower capitalization and therefore less deferral of acquisition expenses. In this context, the Group changed its accounting policy on deferred acquisition costs as of January 1, 2012 and retrospectively restated comparative information related to previous periods. The impact of this change led to a reduction of total shareholders’ equity of €1,913 million (of which €1,910 million group share) as of January 1, 2011. In the tables of the document, “restated” refers to this voluntary change in accounting policy. HY 2012 HY 2011 published HY 2011 restated (b) FY 2011 published Gross written premiums 45,749 43,959 43,959 80,570 Fees and revenues from investment contracts without participating feature 164 182 182 350 Revenues from insurance activities 45,913 44,141 44,141 80,920 Net revenues from banking activities 204 245 245 414 Revenues from other activities 2,268 2,449 2,449 4,708 TOTAL REVENUES 48,385 46,835 46,835 86,042 Change in unearned premium reserves net of unearned revenues and fees (4,069) (3,740) (3,740) (547) Net investment result excluding financing expenses (a) 14,209 11,065 11,065 15,114 Technical charges relating to insurance activities (a) (c) (45,494) (40,351) (40,351) (75,623) Net result of reinsurance ceded (572) (571) (571) (733) Bank operating expenses (47) (44) (44) (87) Insurance acquisition expenses (4,258) (4,345) (4,332) (8,160) Amortization of value of purchased life business in force (37) (87) (87) (241) Administrative expenses (c) (4,529) (5,047) (5,047) (9,552) Valuation allowances on tangible assets (0) (0) (0) 29 Change in value of goodwill (0) (1) (1) (0) Other (143) (158) (158) (388) Other operating income and expenses (55,081) (50,605) (50,592) (94,755) OPERATING EARNINGS BEFORE TAX 3,445 3,556 3,569 5,854 Net income from investments in affiliates and associates 44 46 46 85 Financing expenses (275) (196) (196) (360) UNDERLYING EARNINGS BEFORE TAX 3,214 3,406 3,420 5,579 Income tax expenses (791) (1,040) (1,048) (1,453) Minority interests (118) (145) (143) (224) Other UNDERLYING EARNINGS 2,305 2,222 2,228 3,901 Net realized capital gains or losses attributable to shareholders 123 171 174 (312) ADJUSTED EARNINGS 2,427 2,393 2,402 3,589 Profit or loss on financial assets (under fair value option) & derivatives 291 165 170 114 Exceptional operations (including discontinued operations) (8) 1,543 1,543 2,069 Goodwill and other related intangible impacts (56) (50) (50) (1,167) Integration and restructuring costs (69) (52) (52) (281) NET INCOME 2,586 3,999 4,013 4,324 (a) For the periods ended June 30, 2012 and December 31, 2011, the change in fair value of assets backing contracts with fin ancial risk borne by policyholders impacted the net investment result for respectively €+6,224 million and €+4,977 million, and benefits and claims by the offsetting amounts respectively. (b) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (c) For the period ended December 31, 2011, €201 million have been reclassified from administrative expenses to technical charges relating to i nsurance activities to ensure consistency of the information. Page 11 (in Euro million) FY 2011 restated (b) 80,570 350 80,920 414 4,708 86,042 (547) 15,114 (75,623) (733) (87) (8,352) (241) (9,552) 29 (0) (388) (94,947) 5,662 85 (360) 5,386 (1,392) (222) 3,772 (312) 3,460 110 2,069 (1,167) (281) 4,190 Activity Report______________________________________________________________________Half Year 2012 Underlying, Adjusted earnings and Net Income HY 2012 HY 2011 published HY 2011 restated (b) FY 2011 published Life & Savings 1,411 1,310 1,316 2,267 Property & Casualty International Insurance 1,044 118 989 143 989 143 1,848 276 Asset Management Banking 159 5 157 8 157 8 321 32 Holdings and other companies (a) (433) (384) (384) (843) UNDERLYING EARNINGS 2,305 2,222 2,228 3,901 Net realized capital gains or losses attributable to shareholders 123 171 174 (312) ADJUSTED EARNINGS 2,427 2,393 2,402 3,589 Profit or loss on financial assets (under Fair Value option) & derivatives 291 165 170 114 Exceptional operations (including discontinued operations) Goodwill and related intangibles impacts (8) (56) 1,543 (50) 1,543 (50) 2,069 (1,167) Integration and restructuring costs (69) (52) (52) (281) NET INCOME 2,586 3,999 4,013 4,324 (a) Includes notably CDOs and real estate companies. (b) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. Group underlying earnings amounted to €2,305 million up 3% versus 1H 2011. On a constant exchange rate basis, underlying earnings remained stable driven by Property & Casualty and Life & Savings, partly offset by a decrease in Holdings and International Insurance. Life & Savings underlying earnings amounted to €1,411 million. On a constant exchange rate basis Life & Savings underlying earnings were up €40 million (+3%). On a comparable scope basis, restated for the sale of Bluefin and portfolios transferred in November 2011 to Resolution in the UK, and for the AXA APH Asian entities minority interest buy-out and disposal of Australia and New Zealand operations on April 2, 2011, Life & Savings underlying earnings were up €45 million (+3%) mainly attributable to Japan (€+135 million), Switzerland (€+23 million), the Mediterranean and Latin American Region (€+21 million), South-East Asia India and China (€+13 million), partly offset by the United States (€-156 million) mainly resulting from: (i) Lower Investment margin (€-25 million or -2%), mainly as a result of (i) lower investment income partly offset by lower allocation to policyholders in France (€-32 million), (ii) the United States (€-23 million) due to a decrease in investment income, partly offset by (iii) the Mediterranean and Latin American Region (€+8 million) mainly due to an exceptional release of policyholder bonus, and (iv) Switzerland (€+8 million) as a result of higher investment income mainly on real estate as well as lower interest credited. (ii) Higher fees & revenues (€+50 million or +1%) mainly driven by: a. Unit-linked management fees were down €27 million, mainly driven by France (€-18 million) due to lower average asset base and the United States (€-16 million) due to lower Separate Account balances, b. Loadings on premiums and mutual funds were up €75 million mainly driven by (i) France (€+100 million) due to an adjustment on Unearned Revenue Reserve (€+69 million) fully offset by DAC amortization, as well as higher loadings on premiums in Group Protection (€+23 million), (ii) Hong Kong (€+28 million) driven by higher new business and in-force growth, partly offset by (iii) the United States (€-69 million) due to the non repeat of a favourable change in assumptions in 1H 2011 related to Unearned Revenue Reserve amortization (€-71 million), c. Other fees were up €2 million. (iii) Net technical margin was down €608 million (or -93%) mainly driven by (i) the United States (€-724 million), primarily due to (a) higher Variable Annuity GMxB losses mainly resulting from reserve adjustments for lower partial withdrawal, partly offset by premium suspension on old contracts and other model and assumption refinements, as well as higher hedging losses, and due to (b) unfavorable mortality experience on Life products, partly offset by (ii) Japan (€+96 million) mainly due to the non repeat of the Great East Japan earthquake. (iv) Expenses decreased by €488 million (or -14%) as a result of: a. €393 million lower acquisition expenses, primarily driven by the United States (€+560 million) as a result of lower DAC amortization notably following the decrease in technical margin, partly offset by (i) France (€-64 million) mainly driven by higher DAC amortization (€-69 million) fully offset by Page 12 (in Euro million) FY 2011 restated (b) 2,138 1,848 276 321 32 (843) 3,772 (312) 3,460 110 2,069 (1,167) (281) 4,190 Activity Report______________________________________________________________________Half Year 2012 higher Unearned Revenue Reserve amortization, (ii) the Mediterranean and Latin American Region (€-33 million) due to higher DAC amortization reflecting increase in surrenders, b. €94 million lower administrative expenses reflecting both positive one-off impacts, as well as various efficiency programs net of inflation. (v) Lower tax expenses and minority interests (down €94 million) mainly driven by more favorable tax one-offs in Japan (€+59 million in 1H 2012 versus €-15 million in 1H 2011), as well as a change in country mix. Property & Casualty underlying earnings amounted to €1,044 million. On a constant exchange rate basis, Property & Casualty underlying earnings increased by €41 million (+4%) mainly driven by: (i) Higher net technical result (including expenses) up €127 million (or +35%) driven by: a. Current year loss ratio improving by 0.2 point driven by tariff increases and lower claims frequency, partly offset by higher large claims, notably from freeze, and higher Nat Cat charge (+0.4 point), b. Higher positive prior year reserve developments by 0.1 point, c. Lower expense ratio improving by 0.5 point to 26.3%, reflecting (i) 0.4 point reduction in acquisition ratio mainly driven by productivity gains and a decrease in commission rate driven by a favorable product and business mix effect in the United Kingdom, and (ii) 0.1 point reduction in administrative expenses ratio benefiting from various efficiency programs net of inflation. d. As a result, the combined ratio improved by 0.8 point to 96.4%. (ii) Investment result remained stable at €1,033 million, as lower dividends in Germany and lower revenues on fixed rated bonds in France were offset by higher yields in Mediterranean and Latin American Region and the United Kingdom. (iii) Higher income tax expense and minority interests (up €76 million) mainly driven by higher pre-tax underlying earnings and unfavorable country mix while negative tax one-offs remained stable. International Insurance underlying earnings amounted to €118 million. On a constant exchange rate basis, underlying earnings decreased by €25 million (or -18%) mainly due to AXA Liabilities Managers, down €31 million, following lower favorable positive settlements on Property & Casualty run-off portfolios. Asset Management underlying earnings amounted to €159 million. On a constant exchange rate basis, underlying earnings decreased by €6 million (-4%) driven by (i) AXA IM (€-17 million or -17%) reflecting lower revenues partly offset by lower variable compensations, and partly offset by (ii) AllianceBernstein (€+11 million or +19%) as a result of lower variable compensations and staff reduction more than offsetting revenues decrease. Banking underlying earnings amounted to €5 million. On a constant exchange rate basis, underlying earnings decreased by €3 million (-39%). Holdings and other companies underlying earnings amounted to €-433 million. On a constant exchange rate basis, holdings underlying earnings decreased by €-48 million (12%) mainly driven by (i) AXA SA (€-69 million) due to an increase in financial charge and a lower income from net participation in BNP Paribas, partly offset by (ii) Other French Holdings (€+11 million) following an increase in operating profit of non consolidated entities. Group net capital gains attributable to shareholders amounted to €123 million. On a constant exchange rate basis, Group net capital gains and losses attributable to shareholders were down €55 million mainly due to: (i) €-142 million lower realized capital gains, to €+369 million in the first half of 2012, mainly driven by lower realized gains on equities (€-134 million) and real estate (€-102 million), partly offset by higher realized gains on fixed income assets (€+80 million), (ii) €+58 million lower impairments to €-185 million in the first half of 2012, mainly driven by the non repeat of €-92 million net impairment charge on Greece government bonds, partly offset by higher impairments on equities and real estate, (iii) €+29 million higher intrinsic value related to equity hedging derivatives. As a result, adjusted earnings amounted to €2,427 million. On a constant exchange rate basis, adjusted earnings decreased by €56 million (-2%). Page 13 Activity Report______________________________________________________________________Half Year 2012 Net Income amounted to €2,586 million. On a constant exchange rate basis, net income decreased by €1,514 million (-38%) mainly as a result of: (i) Lower exceptional operations: down €1,550 million to €-8 million, mainly due to the non repeat of first half of 2011 exceptional capital gains of €1,440 million relating to the disposal of the stake in Taikang Life as well as Australia and New Zealand operations, (ii) Lower adjusted earnings : down €56 million, partly offset by (iii) More favorable change in fair value of financial assets and derivatives: up €114 million to €+291 million which can be analyzed as follows: a. €+191 million from decrease in interest rates and corporate spreads, b. €+99 million positive performance from private equity, equities and hedge funds, c. €+47 million positive change in fair value mainly from Asset Backed Securities mainly in Belgium, partly offset by d. €-47 million following foreign exchange rate movements, mainly on JPY. Page 14 Activity Report______________________________________________________________________Half Year 2012 Consolidated Shareholders’ Equity As of June 30, 2012, consolidated shareholders' equity totaled €48.7 billion. The movements in shareholders' equity since December 31, 2011 are presented in the table below: (in Euro million) FY 2011 published Change in DAC accounting methodology adopted retrospectively as at 01/01/2012 FY 2011 restated HY 2012 Shareholders' Equity 48,562 (2,104) 46,458 48,687 Shareholders' Equity At December 31, 2011 46,458 Share Capital 0 Capital in excess of nominal value 1 Equity-share based compensation 16 Treasury shares sold or bought in open market 17 Deeply subordinated debt (including interests charges) (148) Fair value recorded in shareholders' equity 1,788 Impact of currency fluctuations 609 Payment of N-1 dividend (1,626) Other (82) Net income for the period 2,586 Actuarial gains and losses on pension benefits (933) At June 30, 2012 48,687 Shareholder Value EARNINGS PER SHARE (“EPS”) (in Euro million except ordinary shares in million) HY 2012 HY 2011 published HY 2011 restated (a) FY 2011 published FY 2011 restated (a) Var. HY 2012 versus HY 2011 restated (a) Basic Fully diluted Basic Fully diluted Basic Fully diluted Basic Fully diluted Basic Fully diluted Basic Fully diluted Weighted average number of shares 2,340.3 2,343.3 2,298.4 2,302.5 2,298.4 2,302.5 2,301.0 2,305.0 2,301.0 2,305.0 Net income (Euro per Ordinary Share) 1.04 1.04 1.68 1.68 1.69 1.68 1.75 1.75 1.69 1.69 38% 38% Adjusted earnings (Euro per Ordinary Share) 0.97 0.97 0.98 0.98 0.98 0.98 1.43 1.43 1.38 1.37 1% 1% Underlying earnings (Euro per Ordinary Share) 0.92 0.92 0.91 0.90 0.91 0.91 1.57 1.57 1.51 1.51 1% 2% (a) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. Page 15 Activity Report______________________________________________________________________Half Year 2012 RETURN ON EQUITY (“ROE”) (in Euro million) Period ended , June 30, 2012 Period ended , June 30, 2011 published Period ended , June 30, 2011 restated ( c) Change in % points ROE 11.1% 17.3% 18.0% 7.0 pts Net income group share 2,586 3,999 4,013 Average shareholders' equity 46,620 46,349 44,482 Adjusted ROE 13.8% 13.5% 14.3% 0.6 pts Adjusted earnings (a) Average shareholders' equity (b) 2,280 33,104 2,253 33,356 2,262 31,572 Underlying ROE 13.0% 12.5% 13.2% 0.2 pts Underlying earnings (a) Average shareholders' equity (b) 2,157 33,104 2,081 33,356 2,088 31,572 (a) Including adjustement to reflect net financial charges related to undated debt (recorded through shareholders' equity). (b) Excluding fair value of invested assets and derivatives and undated debt (both recorded through shareholders' equity). (c) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. Page 16 Activity Report______________________________________________________________________Half Year 2012 Life & Savings Segment The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income attributable to AXA’s Life & Savings segment for the periods indicated: Life & Savings segment HY 2012 HY 2011 published HY 2011 restated (b) FY 2011 published Gross revenues (a) 28,642 27,879 27,879 52,481 APE (Group share) 3,075 2,948 2,948 5,733 Investment margin 1,234 1,248 1,248 2,428 Fees & revenues 3,623 3,675 3,675 7,160 Net technical margin 16 645 645 (205) Expenses (3,001) (3,636) (3,623) (6,236) Amortization of VBI (37) (86) (86) (239) Other 25 22 22 43 Underlying earnings before tax 1,860 1,867 1,880 2,951 Income tax expenses / benefits (418) (495) (503) (597) Minority interests (31) (62) (61) (87) Underlying earnings Group share 1,411 1,310 1,316 2,267 Net capital gains or losses attributable to shareholders net of income tax 145 243 246 (35) Adjusted earnings Group share 1,556 1,553 1,562 2,232 Profit or loss on financial assets (under FV option) & derivatives 300 171 177 273 Exceptional operations (including discontinued operations) (26) 763 763 745 Goodwill and other related intangibles impacts (19) (15) (15) (1,015) Integration and restructuring costs (14) (16) (16) (42) Net income Group share 1,797 2,457 2,471 2,193 (a) Before intercompany eliminations. (b) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. Consolidated Gross Revenues HY 2012 HY 2011 France 6,754 7,105 United States 5,567 4,754 United Kingdom 317 327 Japan 3,180 2,865 Germany 3,290 3,328 Switzerland 4,838 4,544 Belgium 1,225 1,111 Central & Eastern Europe (d) 222 277 Mediterranean and Latin American Region (a) 2,258 2,338 Hong Kong 796 703 South-East Asia, India and China (c) 140 128 Other countries (b) 55 400 TOTAL 28,642 27,879 Intercompany transactions (35) (38) Contribution to consolidated gross revenues 28,607 27,841 of which high growth markets 1,350 1,296 of which mature markets 27,257 26,544 (a) Mediterranean and Latin American Region includes Italy, Spain, Portugal, Greece, Turkey, Morocco and Mexico. (b) Other countries correspond to Australia / New Zealand, Luxembourg, AXA Global Distributors, AXA Life Europe, Architas and Family Protect . (c) South-East Asia revenues include Indonesia and Singapore. (d) Includes Poland, Hungary, Czech Republic and Slovakia. Page 17 (in Euro million) FY 2011 restated (b) 52,481 5,733 2,428 7,160 (205) (6,428) (239) 43 2,759 (536) (84) 2,138 (36) 2,102 269 745 (1,015) (42) 2,059 (in Euro million) FY 2011 13,658 9,657 651 5,747 7,001 6,158 2,142 514 4,796 1,465 255 436 52,481 (50) 52,431 2,617 49,814 Activity Report______________________________________________________________________Half Year 2012 Underlying earnings HY 2012 HY 2011 published HY 2011 restated (b) FY 2011 published France 375 379 374 632 United States 237 345 375 312 United Kingdom (13) (8) (8) (6) Japan 281 133 125 323 Germany 66 82 80 192 Switzerland 157 125 125 293 Belgium 77 82 82 155 Central & Eastern Europe (d) 17 7 7 9 Mediterranean and Latin American Region (a) 76 56 55 104 Hong Kong 119 89 83 224 South-East Asia, India and China (c) 35 18 18 50 Other countries (e) (14) 1 1 (19) UNDERLYING EARNINGS 1,411 1,310 1,316 2,267 of which high growth markets 178 121 115 295 of which mature markets 1,234 1,189 1,201 1,973 (a) Mediterranean and Latin American Region includes Italy, Spain, Portugal, Greece, Turkey, Morocco and Mexico. (b) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (c) South-East Asia earnings include Indonesia, Thailand, Philippines and Singapore. (d) Includes Poland, Hungary, Czech Republic and Slovakia. (e) Other countries correspond to Australia / New Zealand, Luxembourg, AXA Golbal Distributors, AXA Life Europe, Architas and Family Protect. Underlying, Adjusted earnings and Net Income HY 2012 HY 2011 published HY 2011 restated (a) FY 2011 published UNDERLYING EARNINGS 1,411 1,310 1,316 2,267 Net realized capital gains or losses attributable to shareholders 145 243 246 (35) ADJUSTED EARNINGS 1,556 1,553 1,562 2,232 Profit or loss on financial assets (under Fair Value option) & derivatives 300 171 177 273 Exceptional operations (including discontinued operations) (26) 763 763 745 Goodwill and related intangible impacts (19) (15) (15) (1,015) Integration and restructuring costs (14) (16) (16) (42) NET INCOME 1,797 2,457 2,471 2,193 (a) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. Page 18 (in Euro million) FY 2011 restated (b) 620 235 (6) 303 188 293 155 9 102 210 50 (19) 2,138 281 1,857 (in Euro million) FY 2011 restated (a) 2,138 (36) 2,102 269 745 (1,015) (42) 2,059 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations – France (in Euro million) HY 2012 HY 2011 restated (a) FY 2011 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 6,754 641 554 828 273 (1,170) - 3 489 (113) (1) 375 49 424 77 - - - 7,105 664 587 749 253 (1,106) (7) 4 481 (106) (1) 374 146 520 37 - - - 13,658 1,340 1,111 1,520 449 (2,209) (69) 6 808 (187) (2) 620 193 812 (84) - - - Net income Group share (a) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. 501 557 728 Gross revenues decreased by €352 million (-5%) to €6,754 million 1 . On a comparable basis, gross revenues decreased by €348 million (-5%) mainly due to: G/A Savings sales down €348 million (-11%) mainly driven by Individual Savings (-14%) affected by continued selective sales and negative performance of the French traditional savings market (-14%2), partly offset by higher large contracts in Group Retirement (+13%), Unit-Linked sales down €35 million (-4%) affected by the negative performance of the French Individual Unit-Linked Savings market (down 33%2). Unit-Linked share in Savings premiums increased by 1 point to 23% (above market of 13%2), G/A Protection and Health increased by €35 million (+1%) driven by €38 million in Group Protection and €8 million in Individual Protection both reflecting positive portfolio developments. Individual Health decreased by €10 million negatively impacted by the stop of assumed business with Mutuelle Mieux Etre. APE decreased by € 22 million (-3%) to €641 million. On a comparable basis, APE decreased by €36 million (-5%): G/A Savings sales down €36 million (-12%) driven down by Individual Savings (-14%) affected by continued selective sales and negative performance of the French traditional savings market, partly offset by higher large contracts in Group Retirement (+12%), Unit-Linked sales down € 7 million (-7%) affected by the negative performance of the French Individual Unit- Linked Savings market, G/A Protection and Health increased by €7 million (+3%) driven by €3 million in Group Protection and €4 million in Individual Protection both reflecting new long term care product success. Investment margin decreased by €32 million (-6%) to €554 million due to lower investment income (€-41 million), partly offset by lower amounts allocated to policyholders. Fees & revenues increased by €79 million (+11%) to €828 million. Excluding a €+69 million adjustment on URR reserves (fully offset in DAC), fees and revenues increased by €10 million driven by higher loadings on premiums in Group protection (€+25 million), partly offset by lower united-linked management fees due to a lower average asset base. 1 €6,746 million after intercompany eliminations. 2 Source: FFSA as of end of June 2012. Page 19 Activity Report______________________________________________________________________Half Year 2012 Net technical margin rose by €20 million (+8%) to €273 million driven by higher positive prior year reserve developments partly offset by lower current year result in Group Protection (€-24 million). Expenses increased by €64 million (+6%) to €-1,170 million. Excluding a €-69 million adjustment on DAC (fully offset in URR), expenses decreased by €-5 million driven by lower administrative expenses reflecting continuing efforts to contain expenses, while acquisition expenses remained stable. Amortization of VBI decreased by €7 million (-100%) to €0 million as a result of the accelerated amortization of the remaining balance of VBI in 2011. As a result, the underlying cost income ratio increased by 0.6 point to 70.6%. Excluding the above mentioned adjustment on DAC and URR, the underlying cost income ratio decreased by 0.6 point. Income tax expenses increased by €7 million (+7%) to €-113 million, mainly due to an increase in corporate tax rate (from 34.43% to 36.10%, enacted in the second half of 2011). As a result, underlying earnings marginally increased by €1 million (0%) to €375 million. Adjusted earnings decreased by €97 million (-19%), mainly due to lower realized capital gains (€-89 million) mostly on real estate and higher impairments (€-7 million) mainly on equities. Net income decreased by €56 million (-10%) to €501 million, reflecting lower adjusted earnings and lower foreign exchange rate impact (€-13 million), partly offset by the favorable change in fair value of freestanding derivatives and mutual funds (€+54 million) mainly driven by the credit spread tightening. Page 20 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations - United States (in Euro million) HY 2012 HY 2011 restated (a) FY 2011 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 5,567 599 233 995 (580) (315) 7 - 340 (103) - 237 (26) 211 97 - (1) (8) 4,754 502 239 1,013 188 (898) 1 - 543 (168) - 375 (9) 365 51 - (1) (12) 9,657 1,018 474 1,931 (1,192) (1,028) (5) - 180 54 - 235 (11) 223 326 - (944) (29) Net income Group share 300 404 (424) Average exchange rate : 1.00 € = $ (a) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. 1.2969 1.4042 1.3867 Gross revenues increased by €813 million (+17%) to €5,567 million 1. On a comparable basis, gross revenues increased by €388 million (+8%): Variable Annuity revenues (62% of gross revenues) increased by 25% reflecting strong sales results for non GMxB Variable Annuity Structured Capital Strategies and GMxB Accumulator products, as well as additional contributions received for certain old Accumulator contracts prompted by an announced deadline for acceptance of additional contributions, Life revenues (25% of gross revenues) increased by 1% driven by an increase in sales of the Indexed Universal Life (product launched in August 2010 and represents 43% of the half year 2012 Life sales) and an increase in renewal premiums reflecting strong first year sales last year, partially offset by lower Athena Universal Life and Term sales this year, Fees on Asset Management business (7% of gross revenues) decreased by 3% driven by lower average assets under management, Mutual Funds revenues (1% of gross revenues) increased by 5% reflecting higher advisory fees. APE increased by €96 million (+19%) to €599 million. On a comparable basis, APE increased by €50 million (+10%): Variable Annuity increased by 24% to €304 million reflecting higher sales of Accumulator mainly through the third party channels and non GMxB Structured Capital Strategies product partially offset by lower sales on GMxB Retirement Cornerstone. The new products launched in 2010, Retirement Cornerstone and Structured Capital Strategies, represented a combined 39% of the half year 2012 Variable Annuity APE, Life increased by 3% to €118 million reflecting increased sales of Indexed Universal Life primarily in third party channels, Mutual Funds decreased by 3% to €175 million. Investment margin decreased by €5 million (-2%) to €233 million. On a constant exchange rate basis, investment margin decreased by €23 million (-10%) driven by a decrease in investment income of €25 million reflecting lower yields on fixed income assets and alternative investments. Interest credited was flat reflecting higher balances offset by lower crediting rates. 1 €5,567 million after intercompany eliminations. Page 21 Activity Report______________________________________________________________________Half Year 2012 Fees & revenues decreased by €18 million (-2%) to €995 million. On a constant exchange rate basis, fees & revenues decreased by €94 million (-9%) primarily driven by the non repeat of 1H 2011 assumption change on Unearned Revenue Reserve (more than offset in DAC amortization) and by lower unit-linked management fees from lower average Separate Account balances. Net technical margin decreased by €768 million (-408%) to €-580 million. On a constant exchange rate basis, net technical margin decreased by €724 million (-385%) primarily due to GMxB reserve adjustments for partial withdrawals partially offset by premium suspension on old contracts, other model and assumption refinements, higher GMxB hedge losses resulting from increased volatility and basis losses, and the impact on life products of unfavorable mortality experience. Expenses decreased by €582 million (-65%) to €-315 million. On a constant exchange rate basis, expenses decreased by €607 million (-68%): Expenses, net of capitalization (including commissions and DAC capitalization) decreased by €60 million (- 10%) to €592 million mainly due to productivity actions (reduction of FTE, changes to benefit plan and staff relocation savings) implemented in 2011 and 2012, DAC amortization decreased by €547 million to €+277 million following higher GMxB losses partially offset by higher baseline amortization. Amortization of VBI decreased by €6 million to €7 million. On a constant exchange rate basis, amortization of VBI decreased by €5 million following a change in assumption reflecting higher expected margins on MONY in-force contracts. As a result, the underlying cost income ratio decreased by 14.7 points to 47.6%. Income tax expense decreased by €65 million to €-103 million. On a constant exchange rate basis, income tax expense decreased by €73 million which reflects lower underlying earnings. Underlying earnings decreased by €138 million (-37%) to €237 million. On a constant exchange rate basis, underlying earnings decreased by €156 million (-42%). Adjusted earnings decreased by €155 million (-42%) to €211 million. On a constant exchange rate basis, adjusted earnings decreased by €171 million (-47%) mainly reflecting the decrease in underlying earnings and higher impairments on fixed income assets. Net income decreased by €104 million (-26%) to €300 million. On a constant exchange rate basis, net income decreased by €127 million (-31%). This was primarily driven by lower adjusted earnings partially offset by higher gains on interest related derivatives due to lower interest rates. Page 22 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations - United Kingdom HY 2012 HY 2011 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = £ 317 283 2 168 1 (220) - - (49) 36 0 (13) - (13) 1 (0) (4) (3) (19) 0.8226 327 296 6 185 (0) (219) (1) - (31) 23 0 (8) 2 (6) 3 17 (6) (0) 7 0.8686 In the table above, HY 2011 and FY 2011 figures are not restated for scope effects. For consistency, 2012 figures have been compared to the same scope for 2011, i.e. excluding portfolios transferred to Resolution in November 2011 and Bluefin Corporate Consulting which was sold in April 2012. This is referred to as “comparable scope basis” in the commentary below. Half-year 2011 underlying earnings amounted to €-8 million, corresponding approximately to €18 million from the sold business and €-26 million from the retained business. Gross revenues decreased by €11 million (-3%) to €317 million1. On a constant exchange rate and comparable scope basis, gross revenues increased by €45 million (+18%) mainly attributable to €42 million premiums from Variable Annuity product sold through AXA Global Distributors, €10 million increased regular premiums on Sun Life Direct Protection business and €8 million increased revenues on the Elevate and Architas funds business. This was partially offset by €7 million lower revenues through the bancassurance channel. APE decreased by €13 million (-4%) to €283 million. On a constant exchange rate and comparable scope basis, APE was 9% (€-28 million) lower than prior year. New sales through the Elevate platform have increased significantly, up by €10 million (11%) as the platform continues to establish itself as one of the leaders in the growing UK platform market. This platform growth has been more than offset by reductions in sales of individual pensions due in part to the market shift to platforms. In addition economic uncertainty has led to a fall in sales of offshore business. Investment margin decreased by €4 million (-73%) to €2 million. On a constant exchange rate and on a comparable scope basis, the investment margin decreased by €2 million (-61%). Fees & revenues decreased by €17 million (-9%) to €168 million. On a constant exchange rate and on a comparable scope basis, fees & revenues increased by €3 million (2%) mainly due to an increase in Elevate revenues due to growth of new business. 1 €317 million after intercompany eliminations. Page 23 (in Euro million) FY 2011 651 535 15 375 23 (454) (2) - (43) 37 0 (6) 2 (5) 3 (37) (50) (3) (93) 0.8663 Activity Report______________________________________________________________________Half Year 2012 Net technical margin increased by €2 million to €1 million (384%). On a constant exchange rate and on a comparable scope basis, net technical margin remained stable. Expenses increased by €1 million (1%) to €220 million. On a constant exchange rate and on a comparable scope basis, expenses increased by €5 million (2%) due to investment in Wealth business growth and inflation, partly offset by expense savings reflecting continued cost management. As a consequence, the underlying cost income ratio increased by 12.8 points to 128.9%. On a constant exchange rate and on a comparable scope basis, the underlying cost income ratio increased by 2.1 points. Income tax benefits increased by €13 million to €36 million. On a constant exchange rate and on a comparable scope basis, income tax benefits increased by €17 million reflecting decrease in pre-tax underlying earnings as well as €19 million one-off tax benefit in 1H 2012. Underlying earnings decreased by €5 million to €-13 million. On a constant exchange rate and on a comparable scope basis, underlying earnings increased by €13 million. Adjusted earnings decreased by €7 million to €-13 million. On a constant exchange rate and on a comparable scope basis, adjusted earnings increased by €13 million due to the underlying earnings movement. Net income decreased by €26 million to €-19 million. On a constant exchange rate, net income decreased by €3 million. Page 24 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations – Japan (in Euro million) HY 2012 HY 2011 restated (a) FY 2011 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 3,180 269 (0) 765 44 (447) (17) - 345 (61) (3) 281 67 348 41 - - - 2,865 212 (0) 727 (55) (418) (25) - 229 (103) (2) 125 81 206 105 - - - 5,747 463 0 1,456 (23) (890) (56) - 487 (180) (3) 303 12 315 19 - - - Net income Group share 389 310 335 Average exchange rate : 1.00 € = Yen (a) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. 104.1900 112.3500 112.9700 Gross revenues increased by €315 million (+11%) to €3,180 million1. On a comparable basis, revenues increased by €84 million (+3%): Protection revenues (38% of gross revenues) decreased by €16 million (-2%) mainly due to lower Group Life sales (€-15m), lower Increasing Term Riders (€-44 million) due to a peak in surrenders partly offset by strong new business sales of LTTP (€+26 million) and increase in Whole Life products driven by better retention (€+27 million), Investment & Savings revenues (33% of gross revenues) increased by €109 million (+13%) mainly due to higher sales of Variable Annuity products driven by a continuous expansion of bank partnerships, Health revenues (29% of gross revenues) decreased by €8 million (-1%) driven by lower in-force not fully offset by new products notably in Cancer. APE increased by €57 million (+27%) to €269 million. On a comparable basis, APE increased by €37 million (+17%): - Protection (45% of APE) increased by €17 million (+16%) mainly supported by higher sales of LTTP products, - Investment & Savings (30% of APE) increased by €18 million (+39%) due to strong Variable Annuity sales. - Health (26% of APE) increased by €2 million (+3%) driven by the new Cancer product launched in 2011 and strongly promoted in all sales channels, partly offset by old products with lower profitability, Investment margin remained stable at €0 million. Fees & revenues increased by €37 million (+5%) to €765 million. On a constant exchange rate basis, fees & revenues remained stable. Net technical margin increased by €100 million to €44 million. On a constant exchange rate basis, net technical margin increased by €96 million mainly due to the 2011 impact of the Great East Japan earthquake (€+80 million) and better mortality experience (€+16 million). 1 € 3,180 million after intercompany eliminations. Page 25 Activity Report______________________________________________________________________Half Year 2012 Expenses increased by €29 million (+7%) to €-447 million. On a constant exchange rate basis, expenses decreased by €4 million (-1%) mainly due to lower advertising expenses. Amortization of VBI decreased by €7 million (-29%) to €-17 million. On a constant exchange rate basis, VBI amortization decreased by €8 million (-34%) mainly driven by the natural decline of VBI balance. As a result, the underlying cost income ratio improved by 8.5 points to 57.4%. Income tax expenses decreased by €40 million to €-61 million. On a constant exchange rate basis, income tax expenses decreased by €46 million due to a 2012 positive tax one-off (€+59 million) and non repeat of a 2011 negative tax one-off (€+15 million) partly offset by higher underlying pre-tax earnings (€-32 million). Underlying earnings increased by €156 million (+125%) to €281 million or increased by €135 million (+108%) on a constant exchange rate basis. Adjusted earnings increased by €142 million (+69%) to €348 million or increased by €117 million (+57%) on a constant exchange rate basis, due to higher underlying earnings, partly offset by lower realized capital gains on fixed income assets. Net income increased by €79 million to €389 million. On a constant exchange rate basis, net income increased by €51 million, due to higher adjusted earnings (€+116 million), partly offset by unfavorable change in mark-to-market of interest rate derivatives (€-14 million) and the Japanese Yen depreciation against major currencies (€-31 million). Page 26 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations – Germany (in Euro million) HY 2012 HY 2011 restated (a) FY 2011 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 3,290 258 57 157 4 (102) (11) - 105 (39) (0) 66 (8) 57 24 - - - 3,328 258 50 150 35 (111) (10) - 114 (35) (0) 80 (7) 72 8 - - - 7,001 506 113 325 77 (260) (32) - 223 (34) (0) 188 (42) 147 2 - - (1) Net income Group share (a) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. 81 80 148 Gross revenues decreased by €37 million (-1%) to €3,290 million1: Life revenues (61% of gross revenues) decreased by €95 million (-4%) to €2,017 million due to lower single premiums from G/A short-term investment products and unit-linked Savings as well as lower regular premiums from Protection partly compensated by higher regular premiums from G/A Savings products, Health revenues (39% of gross revenues) increased by €57 million (+5%) to €1,273 million mainly from higher new business and premium adjustments. APE increased by €1 million (+0%) to €258 million: Life decreased by €15 million (-10%) mainly due to lower new business from unit-linked Savings attributable to prevailing market conditions and curtailment of “Twinstar” Variable Annuity product production, as well as decreasing single premiums from G/A short term investment products, partly compensated by higher new business from Pure Protection as well as G/A Savings, Health increased by €15 million (+14%) driven by strong sales supported by brokers’ anticipation of a change in regulation capping their commissions effective from April 1, 2012. Investment margin increased by €6 million (+13%) to €57 million due to a lower share allocated to policyholders, while investment income remained flat as higher distributions from private equity funds were offset by exceptional coupon payments in the previous year. Fees & revenues increased by €7 million (+5%) to €157 million mainly due to higher loadings on Health business in line with the portfolio growth. Net technical margin fell by €30 million (-87%) to €4 million mainly due to a decrease in the hedging margin on GMxB products (€-27 million) largely driven by higher interest rate volatility. Expenses decreased by €9 million (-8%) to €102 million due to productivity programs and lower amortization of deferred acquisition expenses due to one-off effects deriving from model refinements. 1 €3,281 million after intercompany eliminations. Page 27 Activity Report______________________________________________________________________Half Year 2012 Amortization of VBI increased by €1 million (+13%) to €-11 million. As a result, the underlying cost income ratio increased by 0.5 point to 52.0%. Income tax expenses increased by €4 million (+13%) to €-39 million due to higher effective tax rate as a result of a different legal entity mix. Underlying earnings decreased by €14 million (-18%) to €66 million. Adjusted earnings decreased by €15 million (-20%) to €57 million mainly due to lower underlying earnings. Net income increased by €1 million (+1%) to €81 million, as lower adjusted earnings were partly offset by favorable change in fair value of interest rate derivatives notably due to lower interest rates. Page 28 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations – Switzerland HY 2012 HY 2011 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = Swiss Franc 4,838 256 63 141 111 (108) 1 - 208 (52) - 157 3 160 15 - (3) - 172 1.2046 4,544 277 52 131 130 (106) (35) - 172 (47) - 125 20 145 (1) 749 (3) - 890 1.2700 Gross revenues increased by €294 million (+6%) to €4,838 million1. On a comparable basis, gross revenues increased by €45 million (+1%): Group Life revenues increased by €23 million (+1%) to €4,402 million as a result of higher regular premiums from full protection schemes contracts (€+111 million) driven by lower surrenders and the strong new business written in prior year, Individual Life revenues increased by €22 million (+6%) to €437 million as a consequence of higher single premiums (€+25 million) mainly resulting from Protect Invest and the newly launched product Protect Star. APE decreased by €21 million (-8%) to €256 million. On a comparable basis, APE decreased by €34 million (-12%): Group Life decreased by €40 million (-17%) mainly due to the decrease of full-protection schemes (€-39 million) after the exceptional growth in prior year, Individual Life increased by €6 million (+12%) as a result of higher regular premiums mainly resulting from the success of the Protect Plan product. Investment margin increased by €11 million (+22%) to €63 million. On a constant exchange rate basis, investment margin increased by €8 million (+16%) as a result of a higher investment income mainly driven by income from real estate as well as lower interest credited. Fees & revenues increased by €10 million (+7%) to €141 million. On a constant exchange rate basis, fees & revenues increased by €2 million (+2%) mainly resulting from both Group Life and Individual Life. Net technical margin fell by €19 million (-14%) to €111 million. On a constant exchange rate basis, net technical margin decreased by €25 million (-19%) mainly driven by the non-recurrence of 1H 2011 favorable mortality margin in Individual Life as well as a gain of €8 million from the cancellation of a large internal co-insurance contract (offset by a corresponding VBI amortization). 1 €4,838 million after intercompany eliminations. Page 29 (in Euro million) FY 2011 6,158 397 118 265 270 (202) (59) - 392 (99) - 293 (13) 280 100 798 (7) - 1,172 1.2366 Activity Report______________________________________________________________________Half Year 2012 Expenses increased by €2 million (+2%) to €-108 million. On a constant exchange rate basis, expenses decreased by €3 million (-3%) mainly driven by lower administrative expenses (€-4 million) reflecting ongoing cost management and slightly higher acquisition costs (€+1 million). Amortization of VBI decreased by €36 million (-102%) to €1 million. On a constant exchange rate basis, amortization of VBI decreased by €36 million (-101%) mainly impacted by updated actuarial assumptions in Group and Individual Life (€+24 million) as well as the cancellation of the above-mentioned internal co-insurance contract in 1H 2011. As a result, the underlying cost income ratio decreased by 11.0 points to 34.0%. Income tax expenses increased by €5 million (+10%) to €-52 million. On a constant exchange rate basis, income tax expenses increased by €2 million (+4%) mainly due to higher pre-tax underlying earnings, partly offset by a lower withholding tax charge on dividends received from consolidated foreign subsidiaries. Underlying earnings increased by €31 million (+25%) to €157 million. On a constant exchange rate basis, underlying earnings increased by €23 million (+19%). Adjusted earnings increased by €15 million (+10%) to €160 million. On a constant exchange rate basis, adjusted earnings increased by €6 million (+4%) mainly driven by higher underlying earnings, partly offset by lower net realized capital gains mainly on equities. Net income decreased by €718 million (-81%) to €172 million. On a constant exchange rate basis, net income decreased by €727 million (-82%) mainly driven by the non-recurrence of the exceptional gain from the sale of the stake in Taikang Life (€+749 million) in 2011. Page 30 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations – Belgium (in Euro million) HY 2012 HY 2011 restated (a) FY 2011 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 1,225 119 155 69 15 (129) (4) - 105 (28) (0) 77 44 121 59 (8) - (2) 1,111 80 148 65 25 (131) (3) - 104 (22) (0) 82 0 82 (24) - - (3) 2,142 173 288 163 34 (278) (5) - 203 (48) (0) 155 (88) 68 (70) - - (7) Net income Group share (a) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. 170 56 (9) Gross revenues increased by €114 million (+10%) to €1,225 million1: Individual Life & Savings increased by 11% (or €90 million) to €908 million mainly driven by the increase in G/A Investment & Savings products by €129 million (21%) mainly Crest Classic, partly offset by other Crest products, Group Life & Savings revenues increased by 8% (or €24 million) to €317 million. APE increased by €40 million (+50%) to €119 million: Individual Life & Savings APE increased by 36% (or €26 million) mainly driven by Crest Classic as a result of a two-month sales campaign in January and February, partly offset by other Crest products, - Group Life & Savings APE increased by 160% (or €14 million) to €23 million mainly driven by the acquisition of a large contract. Investment margin increased by €7 million (+5%) to €155 million mainly as a result of a higher asset base. Fees & revenues increased by €4 million (+6%) to €69 million mainly due to higher fees and loadings (+€3 million). Net technical margin decreased by €11 million (-43%) to €15 million mainly due to the contribution to the new policyholder protection fund (€-13 million) which was booked in expenses in 1H 2011. Excluding this impact, the net technical margin increased by €2 million due to a more favorable mortality experience. Expenses decreased by €2 million (-1%) to €-129 million mainly driven by the reclassification to technical margin of the contribution to the new policyholder protection fund (€+13 million). Excluding this impact, expenses increased by €11 million due to higher amortization of deferred acquisition costs following 2H 2011 update of actuarial assumptions (€-8 million) and higher general expenses (€-4 million), partly offset by lower commissions expenses (€+1 million). Amortization of VBI increased by €1 million to €-4 million. 1 €1,225 after intercompany eliminations. Page 31 Activity Report______________________________________________________________________Half Year 2012 As a result, the underlying cost income ratio improved by 0.4 point to 55.9%. Income tax expenses increased by €6 million to €-28 million due to lower equities dividends with a more favorable taxation rate. Underlying earnings decreased by €5 million to €77 million. Adjusted earnings increased by €38 million to €121 million, due to higher realized capital gains mainly on fixed income assets and a favourable change in intrinsic value of equity hedging derivatives, partly offset by lower underlying earnings. Net income increased by €114 million to €170 million mainly driven by higher adjusted earnings, a positive change in fair value on fixed income mutual funds and interest rate derivatives, partly offset by €-8 million from the disposal of “Vie Populaire” product portfolio. Page 32 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations – Central & Eastern Europe HY 2012 HY 2011 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 222 78 14 56 18 (68) (1) - 19 (2) (0) 17 2 19 0 - (1) - 18 277 129 14 65 16 (85) (1) - 9 (2) (0) 7 1 8 0 - (1) - 7 Gross revenues decreased by €54 million (-20%) to €222 million1. On a comparable basis, gross revenues decreased by €42 million (-15%), mainly driven by lower insurance revenues in Czech Republic, Slovakia and Hungary (€-36 million) and by the decrease in Pension Fund products sales in Poland (€-3 million) due to a change in regulation. APE decreased by €51 million (-40%) to €78 million. On a comparable basis, APE decreased by €47 million (-36%) due to the a change in regulation in Poland affecting pension fund new business (€- 32 million or -57%), and lower Life & Savings APE (€-15 million or -20%) primarily in unit-linked (€-11 million or -19%) mainly in Czech Republic and Slovakia as a result of the decision to stop the cooperation with low quality brokers. Underlying earnings increased by €10 million to €17 million. On a constant exchange rate basis, underlying earnings increased by €11 million mainly due to both positive one-offs and productivity actions, partly offset by lower fees and revenues (€-6 million). As a result, the underlying cost income ratio improved by 12.0 points to 78.1%. Adjusted earnings increased by €11 million to €19 million. On a constant exchange rate basis, adjusted earnings increased by €11 million driven by higher underlying earnings and higher realized capital gains (€+1 million) mainly in the Czech Pension Fund portfolio. Net income increased by €11 million to €18 million. On a constant exchange rate basis, net income increased by €11 million driven by higher adjusted earnings. 1 €222 million after intercompany eliminations. Page 33 (in Euro million) FY 2011 514 213 29 115 35 (162) (2) - 15 (6) (0) 9 (0) 8 (0) - (2) - 6 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations – Mediterranean and Latin American Region (in Euro million) HY 2012 HY 2011 restated (a) FY 2011 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 2,258 190 144 178 73 (235) (7) - 153 (50) (27) 76 3 79 (11) (0) (10) (1) 2,338 202 137 155 42 (220) (7) - 106 (29) (22) 55 4 59 (6) - (4) (1) 4,796 432 264 320 73 (448) (14) - 195 (52) (41) 102 (80) 22 14 (0) (12) (2) Net income Group share (a) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. 56 49 22 Gross revenues decreased by €80 million (-3%) or €75 million (-3%) on a comparable basis to €2,258 million1: Mature markets were down €81 million (-4%), mainly driven by a decrease of €507 million in G/A Savings products, mainly in Italy, in a context of high competitive environment from banks and the curtailment of Variable Annuity products (€-208 million), partly offset by higher sales in unit-linked Savings products (€+642 million), mainly driven by the success of new “Protected Unit” product at AXA MPS, High growth markets increased by €6 million (+3%) mainly driven by higher Group Protection new business in Morocco. APE decreased by €13 million (-6%) or €12 million (-6%) on a comparable basis to €190 million: Mature markets were down €16 million (-9%), mainly reflecting a strong decrease in G/A Savings products (€-36 million), partly offset by a better performance on unit-linked products (€+19 million), mainly at AXA MPS, in line with the strategy to focus on improving the business mix, High growth markets increased by €4 million (+15%) mainly driven by unit-linked Protection with Savings in Mexico (€+2 million). Investment margin increased by €7 million (+5%) or €8 million (+6%) on a comparable basis to €144 million, in both (i) mature markets (€+7 million) driven by non recurring policyholders bonus reserve release at AXA MPS and (ii) high growth markets (€+1 million) thanks to higher asset base. Fees & revenues increased by €23 million (+15%) or €24 million (+15%) on a comparable basis to €178 million: Mature markets up €23 million (+21%) notably at AXA MPS (€+24 million) driven by higher unearned revenues reserves amortization mainly reflecting higher surrenders combined with strong sales of new “Protected Unit” unit-linked product, High growth markets up €1 million (+2%) driven by Individual Protection with Savings in Mexico (€+1 million). Net technical margin rose by €30 million (+72%) or €31 million (+73%) on a comparable basis to €73 million: 1 €2,253 million after intercompany eliminations. Page 34 Activity Report______________________________________________________________________Half Year 2012 - Mature markets up €22 million mainly driven by higher GMxB margin (€+16 million) due to an improved basis risk as well as by an increase in surrender margin (€+5 million) mainly driven by Greece (€+4 million) due to a non-recurring favorable reserve development, High growth markets increased by €9 million reflecting improved mortality margin on Protection business in Mexico (€+5 million) and in Morocco (€+5 million). Expenses increased by €14 million (+7%) or €16 million (+7%) on a comparable basis to €-235 million: Mature markets up €5 million driven by AXA MPS reflecting higher deferred acquisition costs amortization following higher surrenders, High growth markets up €11 million mainly due to Mexico reflecting non recurring commission adjustments. Amortization of VBI decreased by €1 million (-8%) or €1 million (-8%) on a comparable basis to €-7 million, mainly due to the natural decline of VBI balance at AXA MPS. As a result, underlying cost income ratio decreased by 6.9 points to 61.2%. Income tax expenses increased by €21 million (+72%) or €21 million (+72%) on a comparable basis to €-50 million reflecting higher pre-tax underlying earnings. Underlying earnings increased by €21 million (+38%) or €21 million (+38%) on a comparable basis to €76 million. Adjusted earnings increased by €20 million (+33%) or €20 million (+33%) on a comparable basis to €79 million driven by equities due to higher realized capital gains, partly offset by higher impairment. Net income increased by €8 million (+16%) or €8 million (+16%) on a comparable basis to €56 million, reflecting unfavorable change in fair value of interest rate derivatives and accelerated amortization of the distribution agreement in Greece. Page 35 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations – Hong Kong (in Euro million) HY 2012 HY 2011 restated (a) FY 2011 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 796 180 2 214 28 (107) (5) (4) 128 (9) - 119 11 130 (5) (13) - - 703 166 6 170 14 (85) 7 - 112 (7) (22) 83 4 87 (1) - - - 1,465 330 4 385 45 (185) 9 (7) 251 (17) (24) 210 (13) 197 (49) (1) - - Net income Group share (a) Restated means comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. 113 86 147 Gross revenues increased by €93 million (+13%) to €7961 million. On a comparable basis, gross revenues increased by €31 million (+4%) mainly due to higher revenues from G/A Protection & Health products (€+51 million) driven by strong renewal and high agency focus partly offset by lower revenues from unit-linked products (€-12 million) in line with the Hong Kong market trend, as well as G/A Savings products (€-9 million) following the non repeat of some 2011 large cases. APE increased by €14 million (+8%) to €180 million. On a comparable basis, APE remained stable as the higher demand for G/A Protection & Health products was offset by lower unit-linked sales. Investment margin decreased by €4 million (-62%) to €2 million. On a constant exchange rate basis, investment margin decreased by €4 million (-65%) as average asset yield decreased while interest crediting rate to policyholders remained stable. Fees & revenues increased by €43 million (+25%) to €214 million. On a constant exchange rate basis, fees & revenues increased by €26 million (+15%) driven by an increase in loadings on premiums (€+28 million) stemming from new business and growing in-force. Net technical margin rose by €14 million (+101%) to €28 million. On a constant exchange rate basis, net technical margin increased by €12 million (+85%) mainly due to the non-repeat of 2011 exceptional items: - a €7 million loss from early termination of an internal co-insurance treaty (offset in amortization of VBI), a €4 million GMxB hedge reserve adjustment reflecting better persistency. Expenses increased by €22 million (+26%) to €-107 million. On a constant exchange rate basis, expenses increased by €13 million (+16%) mainly due to higher investments in business infrastructure and higher acquisition expenses driven by new business and in-force growth. 1 € 796 million after intercompany eliminations. Page 36 Activity Report______________________________________________________________________Half Year 2012 Amortization of VBI increased by €11 million to €-5 million. On a constant exchange rate basis, amortization of VBI increased by €11 million due to the non-repeat of 2011 exceptional items: - the revised projection of future profits (€7 million), the early termination of an internal co-insurance treaty (€6 million). As a consequence, the underlying cost income ratio increased by 4.7 points to 46.1%. Income tax expenses increased by €2 million (+21%) to €-9 million. On a constant exchange rate basis, income tax expenses increased by €1 million (+15%) reflecting a higher taxable income. Underlying earnings increased by €36 million (+43%) to €119 million. On a constant exchange rate and scope basis, following the AXA APH minority interests buy-out in April 2011, underlying earnings increased by €3 million (+3%). Adjusted earnings increased by €43 million (+50%) to €130 million. On a constant exchange rate and scope basis, adjusted earnings decreased by €7 million (-6%) as higher underlying earnings were more than offset by lower realized capital gains and higher impairments on equities. Net income increased by €27 million (+31%) to €113 million. On a constant exchange rate and scope basis, net income decreased by €23 million (-18%) mainly reflecting the closure of two distribution networks (€-12 million) and lower adjusted earnings (€-7 million). Page 37 Activity Report______________________________________________________________________Half Year 2012 Life & Savings operations – South-East Asia, India and China (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues APE (Group share) Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 140 201 35 (0) 35 (1) (4) - - 30 128 162 18 2 20 1 (4) - - 16 255 326 50 2 52 4 (17) - - 39 Gross Revenue increased by €12 million (+9%) to €140 million1. On a comparable basis, gross revenues increased by €7 million (+6%) mainly driven by higher revenues from unit-linked products in Singapore driven by higher new business, partly offset by a temporary slowdown in sales force recruitment in Indonesia. APE increased by €39 million (+24%) to €201 million. On a comparable basis, APE increased by €29 million (+18%) mainly driven by: - strong sales of G/A Protection with Savings and Whole Life products in Thailand (€+15 million), and higher sales of unit-linked products through the bancassurance channel in Indonesia (€+7 million) and through the broker channel in Singapore (€+4 million). Underlying earnings increased by €17 million (+97%) to €35 million. On a constant exchange rate and scope basis, following the AXA APH minority interests buy-out in April 2011, underlying earnings increased by €13 million mainly due to: - - China (€-10 million) due to a change in accounting methodology and unfavorable claims experience. Indonesia (€+11 million), Thailand (€+4 million) and Philippines (€+4 million) driven by growth in business, India (€+3 million) following lower operational losses, Adjusted earnings increased by €15 million (+77%) to €35 million. On a constant exchange rate and scope basis, adjusted earnings increased by €12 million primarily driven by underlying earnings growth. Net income increased by €14 million (+89%) to €30 million. On a constant exchange rate and scope basis, net income increased by €11 million mainly reflecting growth in adjusted earnings. 1 €140 million after intercompany eliminations. Page 38 Activity Report______________________________________________________________________Half Year 2012 Life & Savings Operations - Other Countries The following tables present the operating results for the other Life & Savings operations of AXA: Consolidated Gross Revenues (in Euro million) HY 2012 HY 2011 FY 2011 Australia / New Zealand 352 355 Luxembourg 41 46 78 AXA Global Distributors 13 1 3 Family protect 1 0 Other (0) (0) (0) TOTAL 55 400 436 Intercompany transactions (12) (2) (3) Contribution to consolidated gross revenues 44 399 433 Underlying, Adjusted earnings and Net Income (in Euro million) HY 2012 HY 2011 FY 2011 Australia and New Zealand 12 12 Luxembourg 3 3 4 AXA Global Distributors (7) (14) (27) Family Protect (9) (7) Other (1) (1) (2) UNDERLYING EARNINGS (14) 1 (19) Net realized capital gains or losses attributable to shareholders 0 2 2 ADJUSTED EARNINGS (13) 3 (18) Profit or loss on financial assets (under Fair Value option) & derivatives 0 5 5 Exceptional operations (including discontinued operations) 2 2 Goodwill and related intangible impacts Integration and restructuring costs (0) NET INCOME (13) 10 (11) AXA GLOBAL DISTRIBUTORS1 Underlying earnings as well as adjusted earnings and net income increased by €6 million to €-7 million due to higher commissions received and lower IT expenses. FAMILY PROTECT Direct protection activities were launched during the second semester of 2011. As a consequence, underlying earnings as well as adjusted earnings and net income reached €-9 million 1H 2012, reflecting continued investment in the transversal multi-country platform, progressive ramp-up of activity and direct marketing spend. 1 AXA Global Distributors was formed in March 2009 and is 100% owned by AXA SA. The AXA Global Distributors’ initiative aim is to distribute variable annuity products through third party partnerships, specifically large banks. P&L excluding infrastructure costs are reflected within AXA France and AXA UK Life & Savings segments. In the tables, AXA Global Distributors notably includes AXA Life Europe. Page 39 Activity Report______________________________________________________________________Half Year 2012 AUSTRALIA / NEW ZEALAND Following the disposal of the Australia and New Zealand operations on April 1 , 2011, Australia and New Zealand contributed only to the first quarter of 2011. Page 40 Activity Report______________________________________________________________________Half Year 2012 Property & Casualty Segment The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income attributable to AXA’s Property & Casualty segment for the periods indicated. Property and Casualty Segment HY 2012 HY 2011 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 16,391 72.2% 70.1% 4,174 26.3% 1,033 1,533 (488) 16 (17) 1,044 45 1,089 (3) 8 (37) (41) 1,017 15,540 72.4% 70.4% 3,887 26.8% 1,025 1,392 (404) 21 (20) 989 111 1,100 82 93 (35) (29) 1,212 Page 41 (in Euro million) FY 2011 27,286 72.6% 70.9% 7,807 27.0% 2,034 2,591 (748) 38 (33) 1,848 (62) 1,786 (90) 147 (66) (78) 1,700 Activity Report______________________________________________________________________Half Year 2012 Consolidated Gross Revenues HY 2012 HY 2011 France 3,186 3,078 United Kingdom & Ireland 2,194 1,975 Germany 2,402 2,271 Switzerland 2,460 2,309 Belgium 1,146 1,138 Central & Eastern Europe (c) 35 28 Mediterranean and Latin American Region (a) 3,555 3,402 Direct (b) 1,085 1,059 Other countries (d) 329 279 TOTAL 16,391 15,540 Intercompany transactions (219) (190) Contribution to consolidated gross revenues 16,173 15,350 of which high growth markets of which Direct of which mature markets 1,829 1,085 13,259 1,564 1,059 12,726 (a) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region and Mexico. (b) Direct business in France, Belgium, Spain, Portugal, Italy, Poland, United Kingdom, South Korea and Japan. (c) Includes Ukraine and Reso (Russia). (d) Other countries correspond to Luxembourg and Asia. Combined Ratio Total HY 2012 HY 2011 96.4% 97.2% France 94.8% 96.5% United Kingdom & Ireland 99.9% 100.0% Germany 97.4% 99.3% Switzerland 89.8% 87.4% Belgium 93.1% 100.2% Central & Eastern Europe 103.2% 98.7% Reso (Russia) 97.0% 103.1% Mediterranean and Latin American Region (a) 97.1% 96.5% Direct (b) 101.8% 102.0% Other countries ( c ) 95.8% 97.2% Mature Direct 95.7% 101.8% 97.0% 102.0% High growth 97.5% 96.0% (a) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region and Mexico. (b) Direct business in France, Belgium, Spain, Portugal, Italy, Poland, United Kingdom, South Korea and Japan. (c) Other countries correspond to Luxembourg and Asia. Page 42 (in Euro million) FY 2011 (a) 5,596 3,772 3,638 2,643 2,100 65 6,848 2,102 522 27,286 (240) 27,046 3,335 2,102 21,609 (in Euro million) FY 2011 97.9% 95.7% 98.4% 103.2% 89.2% 99.1% 102.3% 97.7% 97.6% 105.4% 96.3% 97.2% 105.4% 98.2% Activity Report______________________________________________________________________Half Year 2012 Underlying earnings HY 2012 HY 2011 France 247 240 United Kingdom & Ireland 94 78 Germany 143 145 Switzerland 198 209 Belgium 114 72 Central & Eastern Europe ( c) 17 19 Mediterranean and Latin American Region (a) 198 202 Direct (b) 19 14 Other countries (d) 14 10 UNDERLYING EARNINGS 1,044 989 of which high growth markets 109 112 of which Direct 19 14 of which mature markets 916 863 (a) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region, and Mexico. (b) Direct business in France, Belgium, Spain, Portugal, Italy, Poland, the United Kingdom, South Korea and Japan. (c) Includes Ukraine and Reso (Russia). (d) Other countries correspond to Luxembourg and Asia. Underlying, Adjusted earnings and Net Income HY 2012 HY 2011 UNDERLYING EARNINGS 1,044 989 Net realized capital gains or losses attributable to shareholders 45 111 ADJUSTED EARNINGS 1,089 1,100 Profit or loss on financial assets (under Fair Value option) & derivatives (3) 82 Exceptional operations (including discontinued operations) 8 93 Goodwill and related intangibles impacts (37) (35) Integration and restructuring costs (41) (29) NET INCOME 1,017 1,212 Page 43 (in Euro million) FY 2011 496 211 221 397 142 37 353 (33) 23 1,848 178 (33) 1,703 (in Euro million) FY 2011 1,848 (62) 1,786 (90) 147 (66) (78) 1,700 Activity Report______________________________________________________________________Half Year 2012 Property & Casualty Operations – France (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 3,186 72.9% 70.7% 825 24.1% 270 417 (170) - (0) 247 16 263 (7) - - - 256 3,078 74.0% 71.8% 759 24.7% 282 378 (138) - (0) 240 10 250 37 - - - 287 5,596 73.5% 71.1% 1,609 24.6% 550 791 (294) - (1) 496 (52) 445 (14) - - - 431 Gross revenues increased by €108 million (+4%) to €3,186 million1: Personal lines (57% of gross revenues) were up 2% to €1,796 million as a consequence of tariff increases, partly offset by negative net new contracts notably in Motor and Household, Commercial lines (43% of the gross revenues) were up 6% to €1,342 million mainly driven by tariff increases partly offset by lower volumes in a context of selective underwriting. Net technical result increased by €66 million (+9%) to €825 million: Current accident year loss ratio decreased by 1.1 points to 72.9% mainly driven by tariff increases and more favorable claims frequency, partly offset by the higher attritional claims ratio due to climatic events, impacting especially Household, All accident year loss ratio decreased by 1.2 points to 70.7% as a result of the decrease in current accident year loss ratio, while positive prior year reserve developments were stable. Expense ratio decreased by 0.6 point to 24.1% mainly driven by a contained cost base as well as a higher non- recurring positive impact on tax contribution (€+23 million in 1H 2012 versus €+10 million in 1H 2011). Enlarged expense ratio was down 1.7 points to 31.1%, driven by the improvement in expense ratio as well as a decrease in claims handling costs which included some seasonality effects. As a consequence, the combined ratio was down 1.8 points to 94.8%. Net investment result decreased by €12 million (-4%) to €270 million mainly due to lower yields on fixed income assets, partly compensated by higher distribution of dividends from credit funds. Income tax expenses increased by €32 million (+23%) to €-170 million mainly reflecting higher pre-tax underlying earnings, a higher corporate tax rate (€-7 million) (from 34.43% to 36.10%, enacted in the second half of 2011), as well as a tax one-off of €-11 million. As a result, underlying earnings increased by €7 million (+3%) to €247 million. 1 €3,138 million after intercompany eliminations. Page 44 Activity Report______________________________________________________________________Half Year 2012 Adjusted earnings increased by €13 million (+5%) to €263 million as a consequence of higher realized capital gains on equities and fixed income assets (€+18 million), and a favorable change of the intrinsic value of equity hedging derivatives (€+10 million), partly offset by higher impairments (€-23 million) of equities and real estate and lower underlying earnings. Net income decreased by €31 million (-11%) to €256 million mainly due to a lower change in fair value of mutual funds (€-26 million), less favorable foreign exchange impact (€-18 million), partly compensated by higher adjusted earnings. Page 45 Activity Report______________________________________________________________________Half Year 2012 Property & Casualty Operations - United Kingdom & Ireland (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 2,194 71.2% 71.1% 581 28.9% 121 123 (28) - (0) 94 21 116 (17) - (1) (5) 93 1,975 69.2% 68.8% 567 31.1% 108 109 (30) - (0) 78 (2) 77 (11) - (1) (7) 58 3,772 67.6% 68.0% 1,181 30.4% 225 284 (73) - (0) 211 (26) 184 (120) 53 (1) (20) 97 Gross revenues increased by €218 million (+11%) to €2,194 million 1. On a comparable basis, gross revenues increased by €109 million (+6 %) mainly driven by: Personal Lines (50% of the total premiums) were up 3% at €1,093 million. Motor was down 7% to €276 million due to a downturn in market conditions in the UK increasing competitiveness and resulting in lower new business volumes, a reduction in retention levels and lower average premiums. Non-Motor was up 8% to €817 million. Property was up 19% to €310 million principally due to new schemes, increased volumes and improved retention in the UK. Healthcare was up 2% at €323 million following further expansion of the International business. Personal Other was up 1% to €184 million due to a new travel scheme, partially offset by continuing difficult market conditions, Commercial Lines (49% of the total premiums) were up 10% to €1,068 million. Motor was up 14% to €194 million mainly driven by tariff increases and increased retained business in UK fleet. Non-Motor was up 9% to €874 million. Property was up 4% to €280 million reflecting strong performance in a highly competitive market. Health was up 13% to €469 million mainly reflecting continued growth in UK and International Corporate business. Net technical result increased by €14 million (+2%) to €581 million. On a constant exchange rate basis, net technical result decreased by €13 million (-2%): Current year loss ratio increased by 2.0 points to 71.2% due to the impact of 1H 2012 Nat Cat charge (+1.3 points) and increased reinsurance costs (+0.5 point) reflecting the change in business mix and increased coverage. Improvements in Motor and Property following tariff increases and underwriting activity were offset by a change in business mix and an increase in bodily injury costs, All accident year loss ratio increased by 2.2 points to 71.1% mainly reflecting the movement in current year loss ratio. Expense ratio decreased by 2.3 points to 28.9 %.The administrative expense ratio decreased by 1.4 points to 8.1%, largely due to the sale of Denplan in December 2011 and non repeat of 1H 2011 decommissioning of an IT platform. The acquisition ratio was down 0.9 point to 20.7% driven by efficiency programs and a decrease in commission rate driven by favorable product and business mix effects. Enlarged expense ratio was down 2.2 points to 32.1%. 1 €2,108 million after intercompany eliminations. Page 46 Activity Report______________________________________________________________________Half Year 2012 As a result, the combined ratio was down 0.1 point to 99.9%. Net investment result increased by €14 million (+13%) to €121 million. On a constant exchange rate basis, net investment result increased by €9 million (+8%) mainly due to higher bond yields as a result of a portfolio repositioning and increased income from equity funds and other alternative asset classes. Income tax expenses decreased by €2 million (-6%) to €-28 million. On a constant exchange rate basis, income tax expenses decreased by €3 million (-10%) reflecting higher pre-tax underlying earnings more than offset by a decrease in one-off tax charges (€5 million). Underlying earnings increased by €16 million (+21%) to €94 million. On a constant exchange rate basis, underlying earnings increased by €14 million (+17%). Adjusted earnings increased by €39 million (+51%) to €116 million. On a constant exchange rate basis, adjusted earnings increased by €37 million (+48%) reflecting higher underlying earnings (+17%) as well as higher realized capital gains mainly on fixed income assets. Net Income increased by €34 million (+59%) to €93 million. On a constant exchange rate basis, net income increased by €33 million (+56%) due to the improvement in adjusted earnings and a reduction in restructuring costs (€2 million), partly offset by unfavorable change in fair value of financial assets and derivatives (€-10 million). Page 47 Activity Report______________________________________________________________________Half Year 2012 Property & Casualty Operations – Germany (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 2,402 70.5% 67.8% 606 29.6% 162 211 (68) - (0) 143 (0) 142 24 - (2) - 164 2,271 70.5% 71.0% 518 28.4% 185 197 (53) 2 (0) 145 19 164 43 - (2) - 206 3,638 73.4% 73.0% 975 30.2% 369 253 (34) 2 (0) 221 (49) 172 25 - (4) (8) 186 Gross revenues increased by €130 million (+6%) to €2,402 million1 : Personal Lines (57% of gross revenues) increased by 7% to €1,352 million 2 driven by a successful development in Motor (+8 %) and Property (+9%) triggered by tariff increases for both in-force and new business as well as positive net new contracts, Commercial Lines (37% of gross revenues) rose by 2% to €866 million resulting from new business especially in Motor (+3%) and Property (+3%), Other Lines (6% of gross revenues) rose by 17% to €152 million, mainly driven by higher assumed business in Legal Protection and other treaty business. Net technical result: increased by €88 million to €606 million: Current accident year loss ratio remained stable at 70.5%, as tariff increases were offset by higher average costs in Motor, an increase in freeze claims in Property due to the severe winter, as well as higher large claims, All accident year loss ratio decreased by 3.2 points to 67.8% mainly due to higher positive prior year reserve developments. Expense ratio increased by 1.2 points to 29.6% due to the non-recurrence of a positive one-off impact in 1H 2011 as well as a change in the expense pattern over the year. Enlarged expense ratio was up 0.5 point to 32.7% due to a decrease in claims handling costs driven by productivity programs. As a result, the combined ratio was down 1.9 points to 97.4%. Net investment result decreased by €23 million (-13%) to €162 million mainly due to a lower distribution from private equity (€ -13 million) as well as the non-recurrence of exceptional coupon payments in the previous year (€5 million). 1 € 2,374 million after intercompany eliminations. 2 On a comparable basis, after reclassification of small and medium enterprises from Commercial lines to Personal lines Page 48 Activity Report______________________________________________________________________Half Year 2012 Income tax expenses increased by €15 million (+28%) to €-68 million mainly due to lower tax free investment income in 1H 2012 and lower tax loss carry forward. Underlying earnings decreased by €3 million (-2%) to €143 million. Adjusted earnings decreased by €22 million (-13%) to €142 million mainly due to lower realized capital gains on equities. Net income decreased by €42 million (-20%) to €164 million mainly due to lower adjusted earnings as well as less favorable change in fair value of equity and foreign exchange derivatives. Page 49 Activity Report______________________________________________________________________Half Year 2012 Property & Casualty Operations – Switzerland (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 2,460 72.2% 65.5% 475 24.4% 113 252 (52) - (2) 198 1 199 10 - (14) - 195 2,309 69.4% 62.1% 486 25.4% 104 266 (55) - (2) 209 18 227 (5) - (14) - 207 2,643 68.9% 63.1% 976 26.1% 217 503 (103) - (3) 397 5 402 2 - (29) - 375 Gross revenues increased by €151 million (+7%) to €2,460 million1. On a comparable basis, gross revenues increased by €21 million (+1%): Personal lines (52% of gross revenues) increased by 2% to €1,284 million as a consequence of volume increase in all major business lines, Commercial lines (48% of gross revenues) slightly decreased to €1,183 million mainly resulting from a focus on profitability. Net technical result decreased by €11 million (-2%) to €475 million. On a constant exchange rate basis, the net technical result decreased by €36 million (-7%): Current accident year loss ratio increased by 2.8 points to 72.2% mainly driven by a higher Nat Cat charge (+1.8 points), higher large claims (+0.5 point) and a higher number of freeze claims in Property (+0.6 point), - All accident year loss ratio increased by 3.4 points to 65.5% as a consequence of the current accident year loss ratio development and lower positive prior year reserve developments. Expense ratio decreased by 1.0 point to 24.4% driven by lower administrative expenses reflecting ongoing strict cost management as well as by lower acquisition expenses. Enlarged expense ratio was down 1.0 point to 28.2%. As a result, the combined ratio was up 2.4 points to 89.8%. Net investment result increased by €8 million (+8%) to €113 million. On a constant exchange rate basis, the net investment result increased by €2 million (+2%) mainly driven by higher income from fixed-income funds. Income tax expenses decreased by €3 million (-6%) to €-52 million. On a constant exchange rate basis, income tax expenses decreased by €6 million (-10%) driven by lower pre-tax underlying earnings. Underlying earnings decreased by €10 million (-5%) to €198 million. On a constant exchange rate basis, underlying earnings decreased by €21 million (-10%). 1 €2,452 million after intercompany eliminations. Page 50 Activity Report______________________________________________________________________Half Year 2012 Adjusted earnings decreased by €27 million (-12%) to €199 million. On a constant exchange rate basis, adjusted earnings decreased by €37 million (-17%) mainly driven by lower underlying earnings and lower net realized capital gains mainly on equities. Net income decreased by €12 million (-6%) to €195 million. On a constant exchange rate basis, net income decreased by €22 million (-11%) mainly driven by lower adjusted earnings, partly offset by higher foreign exchange impacts and a more favorable change in fair value of fixed income funds. Page 51 Activity Report______________________________________________________________________Half Year 2012 Property & Casualty Operations – Belgium (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 1,146 70.3% 63.6% 381 29.5% 97 170 (55) - (0) 114 (1) 114 (19) - (1) (5) 88 1,138 73.6% 70.2% 307 30.1% 99 96 (24) - 0 72 42 114 7 - (1) (7) 112 2,100 73.6% 68.5% 659 30.6% 185 204 (62) - 0 142 98 240 17 - (2) (22) 233 Gross revenues increased by €9 million (+1%) to €1,146 million1: Personal lines (47% of the gross revenues) were up +2% to €546 million following tariff increases for both Motor and Household partly offset by negative net new contracts, Commercial lines (51% of the gross revenues) were stable at €589 million, the decrease in Health (€-8 million) due to the non-renewal of a large portfolio was partly offset by an increase in Workers’ Compensation (€+6 million) mainly driven by tariff increases. Net technical result increased by €74 million (+24%) to €381 million: Current accident year loss ratio decreased by 3.3 points to 70.3% mainly driven by a tariff increase (-1.6 points) and a lower Nat Cat charge (-1.2 points), All accident year loss ratio decreased by 6.6 points to 63.6% due to higher positive prior year reserve developments (mainly in Motor and Property personal lines) and an improved current accident year loss ratio. Expense ratio decreased by 0.6 point to 29.5% due to a non-recurring reclassification from acquisition costs to claims handling costs (-0.3 point) as well as a decrease of commission rates (-0.3 point) following revision of commission schemes. Enlarged expense ratio decreased by 0.3 point to 36.7% due to the decrease of commission rates. As a result, the combined ratio was down by 7.2 points to 93.1%. Net investment result decreased by €2 million (-2%) to €97 million mainly due to a lower asset base. Income tax expenses increased by €31 million (+127%) to €-55 million due to higher pre-tax underlying earnings and the non-recurrence of a 1H 2011 positive tax impact (€6 million). Underlying earnings increased by €43 million (+59%) to €114 million. Adjusted earnings were stable at €114 million, as higher underlying earnings were offset by lower realized capital gains on real estate and equities as well as higher realized capital losses on fixed income assets. Net income decreased by €24 million (-22%) to €88 million mainly reflecting an unfavorable change in fair value of 1 € 1,129 million after intercompany eliminations. Page 52 Activity Report______________________________________________________________________Half Year 2012 inflation derivatives mainly on long term business. Page 53 Activity Report______________________________________________________________________Half Year 2012 Property & Casualty Operations – Central & Eastern Europe Consolidated Gross Revenues (in Euro million) HY 2012 HY 2011 FY 2011 Ukraine Reso (Russia) TOTAL Intercompany transactions 35 - 35 - 28 - 28 - 65 - 65 - Contribution to consolidated gross revenues 35 28 65 Underlying, Adjusted earnings and Net Income (in Euro million) HY 2012 HY 2011 FY 2011 Ukraine Reso (Russia) (a) 1 16 0 19 1 36 UNDERLYING EARNINGS 17 19 37 Net realized capital gains or losses attributable to shareholders (5) (14) (19) ADJUSTED EARNINGS 12 6 18 Profit or loss on financial assets (under Fair Value option) & derivatives Exceptional operations (including discontinued operations) Goodwill and related intangibles impacts Integration and restructuring costs 5 - (2) - 0 - (2) - 2 - (3) - NET INCOME (a) Reso accounted for using the equity method. AXA's share of profit is recognized in income statement. 15 4 17 RESO Underlying earnings decreased by €3 million to €16 million on a constant exchange rate basis, driven by higher acquisition expenses in a strong portfolio growth context (+34% in GWP) and lower investment result, partly offset by a lower all year loss ratio. The combined ratio was down 1.7 points to 97.0%. Adjusted earnings increased by €6 million to €11 million on a constant exchange rate basis, driven by lower net realized capital losses (€+14 million) mainly on fixed income assets, partly offset by higher impairments (€-5 million) and lower underlying earnings (€-3 million). Net income increased by €10 million to €15 million on a constant exchange rate basis, mainly due to higher adjusted earnings (€+6 million). UKRAINE Gross revenues increased by €7 million (+24%) to €35 million. On a comparable basis, gross revenues increased by €4 million (+15%) driven by the positive development of proprietary network, partly offset by lower premiums in bancassurance channel. Underlying earnings as well as adjusted earnings and net income increased by €1 million to €1 million on a constant exchange rate basis, due to a higher net investment result from fixed-income assets while the combined ratio remained stable at 103.2%. Page 54 Activity Report______________________________________________________________________Half Year 2012 Property & Casualty Operations – Mediterranean and Latin American Region (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 3,555 72.3% 71.6% 980 25.5% 206 305 (96) - (11) 198 13 210 4 8 (15) (16) 192 3,402 73.4% 70.7% 957 25.8% 192 306 (88) 0 (16) 202 34 235 12 - (14) (14) 220 6,848 73.4% 71.6% 1,884 25.9% 378 540 (162) - (24) 353 (17) 336 14 - (22) (21) 306 Gross revenues increased by €153 million (+4%) to €3,555 million1. On a comparable basis, gross revenues increased by €186 million (+6%) driven by strong contribution from high growth markets (+18% or €+237 million), partly offset by mature markets (-2% or €-51 million), mainly in Spain and Portugal which suffer from a difficult environment: Personal lines (59% of the gross revenues) were up 4% to €2,091 million driven by Motor lines (+4% or €+59 million) mainly in high growth markets (€+75 million) coming from a positive volume effect principally in Turkey and Mexico, partly offset by mature markets (€-16 million) mainly in Spain. Non Motor lines (+2% or €+15 million) were mainly driven by tariff increase in Health in Mexico (€+10 million), Commercial lines (41% of the gross revenues) were up 9% to €1,451 million driven by Motor lines (+23% or €+93 million) in Mexico (€+76 million) and Turkey (€+21 million). Non Motor lines (€+31 million) were driven by an increase in high growth markets (€+52 million) mostly related to new business in Health in Gulf, partly offset by an overall mitigated performance in Spain (€-18 million) and Portugal (€-6 million). Net technical result increased by €23 million (+2%) to €980 million. On a constant exchange rate basis, net technical result increased by €28 million (+3%), with high growth markets up 6% (or €+23 million) mainly reflecting increase in volumes and mature markets up 1% (or €+5 million): Current accident year loss ratio decreased by 1.0 point to 72.3%, including a Nat Cat charge of 0.5 point, mainly in Italy and Turkey. Mature markets decreased by 2.2 points while high growth markets increased by +0.4 point. Excluding Nat Cat charge, decrease in mature markets was mainly driven by lower frequency in Motor lines and the decrease of average costs in Health, partly offset by higher large losses. All accident year loss ratio increased by 0.9 point to 71.6% as less favorable prior year reserve developments (€-63 million) mainly in Spain and Mexico more than offset the improvement in current accident year loss ratio. Expense ratio decreased by 0.2 point to 25.5% driven by a positive volume effect in high growth markets (-0.5 point). Mature markets expense ratio was flat reflecting benefits from productivity programs offsetting lower volumes. Enlarged expense ratio was down 0.4 point to 28.5%. 1 €3,530 million after intercompany eliminations. Page 55 Activity Report______________________________________________________________________Half Year 2012 As a result, the combined ratio was up 0.7 point to 97.1%. Net investment result increased by €13 million (+7%) to €206 million. On a constant exchange rate basis, net investment result increased by €15 million (+8%) driven by higher yields on fixed income assets in Mexico (€+11 million) and Turkey (€+6 million), partly offset by a lower asset base in Spain (€-7 million). Income tax expenses increased by €8 million (+9%) to €-96 million. On a constant exchange rate basis, income tax expenses increased by €8 million (+9%) due to the increase of effective tax rate reflecting unfavorable country mix, partly offset by lower pre-tax underlying earnings. Underlying earnings decreased by €4 million (-2%) to €198 million. On a constant exchange rate basis, underlying earnings decreased by €5 million (-2%). Adjusted earnings decreased by €25 million (-11%) to €210 million. On a constant exchange rate basis, adjusted earnings decreased by €25 million (-11%), reflecting lower realized capital gains mainly on equities, unfavorable change in intrinsic value of equity hedges and lower underlying earnings, partly offset by lower impairments mainly on real estate funds. Net income decreased by €28 million (-13%) to €192 million. On a constant exchange rate basis, net income decreased by €29 million (-13%) mainly reflecting lower adjusted earnings combined with unfavorable foreign exchange impact (€-5 million), mainly in Turkey and Mexico. Page 56 Activity Report______________________________________________________________________Half Year 2012 Property & Casualty Operations – Direct business (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 1,085 78.3% 79.9% 216 21.9% 50 31 (12) - (0) 19 (2) 17 (1) - (2) - 14 1,059 78.7% 80.0% 197 21.9% 43 23 (10) - (0) 14 3 16 (2) - (2) - 13 2,102 80.5% 84.2% 321 21.2% 86 (25) (8) - 0 (33) (4) (36) (15) - (4) (7) (63) Direct business includes operations in France (22% of total Direct gross revenues), the UK (21%), Japan (18%), South Korea (16%), Spain (9%), Italy (5%), Belgium (4%), Poland (3%) and Portugal (1%). Gross revenues increased by €25 million (+2%) to €1,085 million1. On a comparable basis, gross revenues decreased by €12 million (-1%): Personal Motor (88% of gross revenues) was down €33 million (-4%) to €951 million driven by the UK (€-99 million) as a result of lower volumes and a change in business mix reflecting selective underwriting and portfolio pruning as well as increased competitiveness of the market, partly offset by significant growth in other countries (+10% or €+66 million) supported by higher net new contracts leading to €+45 million in continental Europe with strong growth in France, Italy and Poland, €+14 million in Japan and €+7 million in South Korea, Personal Non-Motor (12% of gross revenues) was up €21 million (+19 %) to €131 million mainly supported by growth in the UK and in France. Net technical result increased by €18 million (+9%) to €216 million. On a constant exchange rate basis, net technical result increased by €10 million (+5%): Current accident year loss ratio decreased by 0.3 point to 78.3% mainly driven by tariff increases in Motor partly offset by unfavorable weather conditions in the UK leading to a higher Nat Cat charge (+0.3 point), - All accident year loss ratio decreased by 0.2 point to 79.9% as a result of the decrease in current accident year loss ratio and broadly stable negative prior year reserve developments. Expense ratio was stable at 21.9% (with a stable acquisition ratio and an administrative expense ratio up 0.1 point) reflecting operational leverage outside the UK following portfolio growth offset by lower average premium and higher IT costs in the UK. Enlarged expense ratio was up by 0.3 point to 27.7%. 1 €1,085 million after intercompany eliminations. Page 57 Activity Report______________________________________________________________________Half Year 2012 As a result, the combined ratio was down by 0.2 point to 101.8%. UK combined ratio was up 7.3 points to 108.8%. Other countries combined ratio was down 2.8 points to 99.3%. Net investment result increased by €7 million (+17%) to €50 million. On a constant exchange rate basis, net investment result increased by €6 million (+14%) mainly reflecting a higher asset base. Income tax expenses increased by €2 million to €-12 million. On a constant exchange rate basis, income tax expenses increased by €2 million mainly reflecting higher pre-tax underlying earnings. Underlying earnings increased by €5 million to €19 million. On a constant exchange rate basis, underlying earnings increased by €5 million. Adjusted earnings increased by €1 million to €17 million. On a constant exchange rate basis, adjusted earnings increased by €1 million mainly due to higher underlying earnings, €2 million lower impairment charges, partly offset by €6 million lower realized capital gains mainly on equities. Net income increased by €1 million to €14 million. On a constant exchange rate basis, net income increased by €1 million due to higher adjusted earnings. Page 58 Activity Report______________________________________________________________________Half Year 2012 Property & Casualty Operations - Other Countries Consolidated Gross Revenues (in Euro million) HY 2012 HY 2011 FY 2011 Asia (a) 266 218 425 Luxembourg 63 61 97 TOTAL 329 279 522 Intercompany transactions (6) (6) (6) Contribution to consolidated gross revenues 323 273 516 (a) Includes Hong Kong, Singapore and Malaysia. Underlying, Adjusted earnings and Net Income (in Euro million) HY 2012 HY 2011 FY 2011 Asia (a) 11 5 13 Luxembourg 3 4 10 UNDERLYING EARNINGS 14 10 23 Net realized capital gains or losses attributable to shareholders 1 2 2 ADJUSTED EARNINGS 15 11 25 Profit or loss on financial assets (under Fair Value option) & derivatives (0) 0 (0) Exceptional operations (including discontinued operations) 93 93 Goodwill and related intangibles impacts Integration and restructuring costs (14) NET INCOME 0 105 118 (a) Includes Hong Kong, Singapore and Malaysia. ASIA1 Gross revenues increased by €48 million (+22%) to €266 million2. On a comparable basis, gross revenues increased by €30 million (+14%): Personal lines (45% of the gross revenues) were up €12 million (+12%) mainly due to new business in personal motor in both Malaysia and Singapore, Commercial lines (55% of the gross revenues) were up €18 million (+15%) mainly due to growth in commercial motor (€7 million) and health (€7 million) with new large accounts in Malaysia and Singapore as well as in workers compensation (€5 million) in Singapore and Hong Kong mainly due to new large accounts. Net technical result increased by €16 million (+25%) to €78 million. On a constant exchange rate basis, net technical result increased by €10 million (+17%): Current accident year loss ratio was stable at 68.3%, - All accident year loss ratio decreased by 1.5 points to 66.7% due to more favorable prior year reserve developments in Hong Kong and Singapore. Expense ratio decreased by 1.0 point to 28.6% mainly driven by productivity gains with strong increase in volumes across the board as well as lower commission rate in Hong Kong. Enlarged expense ratio decreased by 0.8 point to 31.2%. 1 Includes Hong Kong, Singapore and Malaysia. 2 €260 million after intercompany eliminations. Page 59 Activity Report______________________________________________________________________Half Year 2012 As a result, the combined ratio was down by 2.4 points to 95.3%. Net investment result increased by €2 million to €6 million. On a constant exchange rate basis, net investment result increased by €1 million mainly from a higher asset base in Malaysia. Income tax expenses increased by €2 million to €-3 million. On a constant exchange rate basis, income tax expenses increased by €1 million due to higher pre-tax underlying earnings. Underlying earnings increased by €5 million to €11 million. On a constant exchange rate basis, underlying earnings increased by €5 million. Adjusted earnings increased by €5 million to €11 million. On a constant exchange rate basis, adjusted earnings increased by €4 million driven by higher underlying earnings partially offset by lower net realized capital gains on equity. Net income decreased by €10 million to €-4 million. On a constant exchange rate basis, net income decreased by €10 million driven by higher adjusted earnings more than offset by €14 million of costs incurred to date related to the future integration of portfolio transferred from HSBC1. 1 The closing of the transaction is subject to regulatory approvals and is expected in the course of the second half 2012. Page 60 Activity Report______________________________________________________________________Half Year 2012 International Insurance Segment The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income for the International Insurance Segment for the periods indicated: Consolidated Gross Revenues (in Euro million) HY 2012 HY 2011 FY 2011 AXA Corporate Solutions Assurance 1,339 1,286 2,003 AXA Global Life and AXA Global P&C (a) 53 51 73 AXA Assistance 474 460 911 Other (b) 38 34 70 TOTAL 1,904 1,831 3,057 Intercompany transactions (79) (92) (182) Contribution to consolidated gross revenues 1,825 1,739 2,876 (a) Formerly AXA Cessions. (b) Including AXA Liabilities Managers and AXA Corporate Solutions Life Reinsurance Company. Underlying, Adjusted earnings and Net Income (in Euro million) HY 2012 HY 2011 FY 2011 AXA Corporate Solutions Assurance 80 81 150 AXA Global Life and AXA Global P&C (a) 11 10 55 AXA Assistance 11 11 21 Other (b) 15 42 50 UNDERLYING EARNINGS 118 143 276 Net realized capital gains or losses attributable to shareholders 5 3 17 ADJUSTED EARNINGS 122 146 294 Profit or loss on financial assets (under Fair Value option) & derivatives 15 (7) (15) Exceptional operations (including discontinued operations) 0 1 Goodwill and related intangibles impacts Integration and restructuring costs (2) (4) NET INCOME 135 139 276 (a) Formerly AXA Cessions. (b) Including AXA Liabilities Managers and AXA Corporate Solutions Life Reinsurance Company. Page 61 Activity Report______________________________________________________________________Half Year 2012 AXA Corporate Solutions Assurance (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 1,339 82.3% 82.4% 200 15.1% 101 129 (47) - (1) 80 2 83 14 - - - 96 1,286 85.9% 82.9% 183 14.5% 99 128 (46) - (1) 81 (1) 79 (4) - - - 75 2,003 84.7% 82.1% 360 15.8% 199 242 (90) - (2) 150 5 155 (13) - - - 142 Gross revenues increased by €54 million (+4%) to €1,339 million1. On a comparable basis, gross revenues increased by €25 million (+2%) mainly driven by Construction (+22% mainly driven by portfolio development and tariff increases), Property (+6%) and Marine (+4%), partly offset by a decrease in Liability (-12% mainly due to the non- renewal of a large contract) and Aviation (-4% mainly due to tariff decrease following favorable trend on large claims). Net technical result increased by €17 million (+9%) to €200 million. On a constant exchange rate basis, net technical result increased by €16 million (+9%): Current accident year loss ratio improved by 3.6 points to 82.3%. Excluding a change in cost allocation from claims handling costs to commissions (-0.8 point), current accident year loss ratio improved by 2.8 points mainly driven by lower Nat Cat charges and positive price effect in all lines of business (except Aviation). - All accident year loss ratio improved by 0.5 point to 82.4% as a result of improvement in the current year loss ratio partly offset by lower prior year reserve developments. Expense ratio increased by 0.7 point to 15.1% explained by the above mentioned change in cost allocation from claims handling costs to commissions. On a comparable basis, expense ratio decreased by 0.1 point. Enlarged expense ratio was down 1.0 point to 18.2%. As a result, the combined ratio was up 0.2 point to 97.5%. Net investment result increased by €2 million (+2%) to €101 million. On a constant exchange rate basis, net investment result increased by €1 million (+1%) mainly driven by higher income from real estate and higher distributions from mutual funds, partly offset by lower income from fixed income assets. Income tax expenses increased by €1 million (+2%) to €-47 million mainly due to higher corporate tax rate in France (€-2 million). Underlying earnings remained stable at €80 million. 1 €1.334 million after intercompany eliminations. Page 62 Activity Report______________________________________________________________________Half Year 2012 Adjusted earnings increased by €4 million (+5%) to €83 million. On a constant exchange rate basis, adjusted earnings increased by €3 million (+4%) mainly driven by a favorable effect on intrinsic value of equity hedging derivatives. Net income increased by €21 million (+29%) to €96 million. On a constant exchange rate basis, net income increased by €21 million (+28%) driven by positive foreign exchange impact (€+8 million), higher adjusted earnings and favorable change in fair value on mutual funds (€+6 million). Page 63 Activity Report______________________________________________________________________Half Year 2012 AXA Global Life and AXA Global P&C1 Underlying earnings increased by €2 million to €11 million as a result of higher technical result in AXA Motor cover as well as higher result in AXA Global Life, partly offset by higher expenses. Adjusted earnings increased by €1 million to €11 million as a result of higher underlying earnings. Net income increased by €4 million to €13 million mainly due to higher adjusted earnings and a €3 million more favorable change in fair value of financial assets and derivatives. AXA Assistance Gross revenues increased by €13 million to €474 million2. On a comparable basis, gross revenues increased by €16 million (+4%) mainly driven by strong development in Travel activities, higher revenues from a large contract in Spain as well as growth in France, partly offset by lower revenues from a large contract in Mexico. Underlying earnings remained stable at €11 million mainly driven by positive developments in France and Spain and improvement on Travel business offset by higher development costs. Adjusted earnings remained stable at €10 million. Net income decreased by €4 million (-37%) to €6 million mainly due to €3 million lower realized capital gains on foreign exchange rates and €2 million restructuring costs in the first half 2012. Other international activities Underlying earnings decreased by €26 million (-63%) to €15 million. On a constant exchange rate basis, underlying earnings decreased by €26 million (-63%) driven by lower gains on the P&C run-off portfolio, partly offset by lower losses on the Life run-off portfolio. Adjusted earnings decreased by €27 million (-60%). On a constant exchange rate basis, adjusted earnings decreased by €27 million (-60%) as a consequence of lower underlying earnings. Net income decreased by €26 million, (-57%). On a constant exchange rate basis, net income decreased by €26 million (-57%) reflecting lower adjusted earnings. 1 Gathers both central teams from Life & Savings and Property & Casualty global business lines in addition to Group reinsurance operations. 2 €401 million after intercompany eliminations. Page 64 Activity Report______________________________________________________________________Half Year 2012 Asset Management Segment The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income for the Asset Management Segment for the periods indicated: Consolidated Gross Revenues (in Euro million) HY 2012 HY 2011 FY 2011 AllianceBernstein AXA Investment Managers 1,004 730 1,064 759 2,038 1,563 TOTAL 1,734 1,823 3,601 Intercompany transactions (159) (165) (332) Contribution to consolidated gross revenues 1,575 1,658 3,269 Underlying, Adjusted earnings and Net Income (in Euro million) HY 2012 HY 2011 FY 2011 AllianceBernstein 74 57 106 AXA Investment Managers 85 99 215 UNDERLYING EARNINGS 159 157 321 Net realized capital gains or losses attributable to shareholders (1) (2) (2) ADJUSTED EARNINGS 159 154 318 Profit or loss on financial assets (under Fair Value option) & derivatives 3 6 (25) Exceptional operations (including discontinued operations) (0) (0) (3) Goodwill and related intangibles impacts Integration and restructuring costs (10) (0) (137) NET INCOME 152 160 153 Page 65 Activity Report______________________________________________________________________Half Year 2012 AllianceBernstein (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues 1,004 1,064 2,038 Net investment result 0 (6) (27) Total revenues 1,004 1,058 2,011 General expenses Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : (826) 178 (40) (64) 74 0 74 2 0 0 (9) 67 1.297 (892) 166 (44) (64) 57 0 57 (0) 0 0 0 57 1.404 (1,738) 272 (68) (98) 106 0 106 (7) 0 0 (136) (38) 1.387 Assets under Management (\"AUM\") increased by €11 billion from year-end 2011 to €346 billion at June 30, 2012 as a result of €13 billion market appreciation and a €+8 billion favorable foreign exchange rate impact, partly offset by net outflows of €-5 billion (€5 billion net inflows from Retail clients offset by €-7 billion net outflows from Institutional clients and €-3 billion net outflows from Private Clients), and €-5 billion unfavorable change in scope due to the sale of AXA Australia and AXA Canada. Gross revenues decreased by €60 million (-6%) to €1,004 million1. On a comparable basis, gross revenues decreased by €133 million (-13%) primarily due to lower investment management fees resulting from a 9% decrease in average AUM combined with lower average bps (-3.6bps) reflecting a change in business mix from equity services to fixed income services. Net investment result increased by €6 million (+103%) to €0 million. On a constant exchange rate basis, net investment result increased by €6 million (+103%) due to higher unrealized gains related to deferred compensation obligations offset in general expenses, combined with a decrease in financing debt expenses. General expenses decreased by €67 million (-7%) to €-826 million. On a constant exchange rate basis, general expenses decreased by €130 million (-15%) due to lower compensation expenses resulting from lower revenues and staff reductions. As a result, the underlying cost income ratio improved by 2.8 points to 79.4%. Income tax expenses decreased by €4 million (-10%) to €-40 million. On a constant exchange rate basis, income tax expenses decreased by €8 million (-17%) due to a tax one-off of €8 million from a release of deferred taxes. Underlying and adjusted earnings increased by €17 million (+29%) to €74 million. On a constant exchange rate basis, underlying earnings increased by €11 million (+19%). AXA ownership of AllianceBernstein at June 30, 2012 is 63.5%, down 1.1% from December 31, 2011 due to the granting of units in 2012 for 2011 deferred compensation offset by repurchases of AllianceBernstein units during 2012 to fund deferred compensation plans. Net income increased by €9 million (+16%) to €67 million. On a constant exchange rate basis, net income increased by €4 million (+7%) due to the increase in adjusted earnings partly offset by restructuring costs (€-9 million). 1 965 million after intercompany eliminations. Page 66 Activity Report______________________________________________________________________Half Year 2012 AXA Investment Managers (“AXA IM”) (in Euro million) HY 2012 HY 2011 FY 2011 Gross revenues 730 759 1,563 Net investment result (11) (7) (20) Total revenues 718 751 1,543 General expenses Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (579) 139 (50) (4) 85 (1) 85 1 (0) 0 (0) 85 (601) 150 (46) (5) 99 (2) 97 6 (0) 0 (0) 103 (1,239) 304 (79) (10) 215 (2) 212 (18) (3) 0 (1) 191 Assets under Management (\"AUM\") increased by €30 billion from year-end 2011 to €542 billion at the end of June 2012 as a result of €28 billion favorable market impact and €4 billion favorable foreign exchange impact, partly offset by €2 billion net outflows. Net outflows amounted to €-2 billion in the first half of 2012 mainly driven by the voluntary exit from unprofitable employee shareholding plan schemes (€-4 billion), and AXA Main Fund short term investments (€-2 billion), partly offset by net inflows on Retail (€+3 billion) and Institutional (€+1 billion) notably from AXA Fixed Income, AXA Framlington and AXA Private Equity. Gross revenues decreased by €29 million (-4%) to €730 million1. On a constant exchange rate basis and excluding distribution fees (retroceded to distributors), net revenues decreased by €31 million (-6%) to €541 million mainly due to lower performance fees (€-23 million) driven by AXA Private Equity, and lower AXA Real Estate transaction fees (€-12 million). Net investment result decreased by €4 million to €-11 million. On a constant exchange rate basis, net investment result decreased by €6 million mainly driven by higher interest charges. General expenses decreased by €22 million to €-579 million. On a constant exchange rate basis and excluding distribution fees, general expenses decreased by €21 million (-5%) mainly due to lower variable compensations triggered by lower profits. As a result, the underlying cost income ratio increased by 0.8 point to 73.7%. Income tax expenses increased by €4 million (+8%) to €-50 million. On a constant exchange rate basis, income tax expenses increased by €2 million (+4%) mainly due to a less favorable country mix contributing to pre-tax underlying earnings. Underlying earnings decreased by €14 million (-14%) to €85 million. On a constant exchange rate basis, underlying earnings decreased by €17 million (-17%). Adjusted earnings decreased by €12 million (-13%) to €85 million. On a constant exchange rate basis, adjusted earnings decreased by €15 million (-16%) due to lower underlying earnings and €2 million lower impairment charge. Net income decreased by €17 million (-17%) to €85 million. On a constant exchange rate basis, net income decreased by €20 million (-20%) mainly driven by lower adjusted earnings and a less favorable interest rate impact on internal derivatives. 1 €610 million after inter-company eliminations. Page 67 Activity Report______________________________________________________________________Half Year 2012 Banking The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and the net income attributable to AXA’s banking for the periods indicated: Consolidated Gross Revenues (in Euro million) HY 2012 HY 2011 FY 2011 AXA Banks (a) 233 272 523 o/w Belgium (b) 167 169 328 o/w France 36 63 116 o/w Hungary 15 27 54 o/w Germany 12 12 23 o/w Switzerland (0) 0 o/wOthers (c) 2 1 1 Others 2 3 6 TOTAL 236 275 529 Intercompany transactions (9) (26) (44) Contribution to consolidated gross revenues 226 248 485 (a) Of which AXA Bank Europe and its branches: €184 million. (b) Includes commercial activities in Belgium and shared services of AXA Bank Europe (treasury and support functions). (c) Includes Slovakia and Czech Republic. Underlying, Adjusted earnings and Net Income (in Euro million) HY 2012 HY 2011 FY 2011 AXA Banks (a) 7 10 36 o/w Belgium (b) 27 27 55 o/w France (16) (0) 1 o/w Hungary (9) o/w Germany 2 2 4 o/w Switzerland (5) (11) o/w Others (c) (6) (5) (12) Others (2) (2) (4) UNDERLYING EARNINGS 5 8 32 Net realized capital gains or losses attributable to shareholders (11) (3) (5) ADJUSTED EARNINGS (6) 5 27 Profit or loss on financial assets (under Fair Value option) & derivatives 10 1 (13) Exceptional operations (including discontinued operations) (11) (144) Goodwill and related intangibles impacts (0) (86) Integration and restructuring costs (2) (7) (21) NET INCOME (9) (1) (237) (a) of which AXA Bank Europe and its branches: €21 million. (b) Includes commercial activities in Belgium for €7 million and shared services of AXA Bank Europe (treasury and support fun ctions) for €20 million. (c) Includes Slovakia and Czech Republic. Page 68 Activity Report______________________________________________________________________Half Year 2012 AXA Banks BELGIUM Net banking revenues decreased by €2 million (-1%) to €167 million. On a comparable basis1, net banking revenues increased by €17 million (+13%) mainly due to higher realized capital gains (€+20 million) and a lower funding cost (€+5 million), partly offset by higher impairments on fixed income assets (€-8 million). Revenues in retail banking activities remained stable at €169 million. Underlying earnings remained stable at €27 million with a lower commission margin from an internal business unit transfer (€-16 million) and higher taxes (€-8 million) compensating higher realized capital gains (€+20 million) and lower expenses (€+5 million). Adjusted earnings decreased by €8 million (-34%) to €16 million mainly due to above mentioned higher impairments on fixed income assets (€-8 million). Net income increased by €15 million (+78%) to €35 million mainly driven by higher foreign exchange result (€+11 million), deconsolidation of Switzerland (€ +8 million reflecting the transfer of the client portfolio to bank zweiplus on January 1, 2012) and lower restructuring costs (€+5 million), partly offset by lower adjusted earnings (€-8 million). FRANCE Net banking revenues decreased by €27 million (-42%) to €36 million. On a comparable basis1, net banking revenues decreased by €26 million (-43%) mainly due to higher interests paid to customers on savings accounts as a result of a promotional campaign during the first half of 2012 which led to a positive net new money collection of €1.0 billion, partly mitigated by higher interest revenues on mortgages as a result of an increase in new credit production despite a declining market trend. Underlying and adjusted earnings decreased by €15 million to €-16 million, following the decrease in net banking revenues, in a context of stable administrative expenses and cost of risk. Net income decreased by €17 million to €-19 million due to lower adjusted earnings and to unfavorable impact from interest-rate hedging instruments in a context of interest rates decrease. HUNGARY The Hungarian government enacted legislation in September 2011 allowing customers to redeem foreign currency denominated mortgages at non-market rates. In this context, Hungarian credit production has been stopped. Net banking revenues decreased by €12 million to €15 million. On a comparable basis1, net banking revenues decreased by €11 million mainly driven by lower interest income following the discontinuation of the lending activity and higher funding cost. Net income decreased by €11 million to €-20 million. On a constant exchange rate basis, net income decreased by €13 million mainly due to lower interest margin (€-9 million) following the discontinuation of the lending activities leading to a declining loan portfolio, higher provisions for loan losses (€-2 million) and lower foreign exchange result (€-2 million). The discontinuation of the lending activities together with new measures from the Hungarian government are expected to continue to negatively impact the Hungarian revenues and earnings. GERMANY Net banking revenues increased by €1 million (+4%) to €12 million. On a comparable basis1, net banking revenues increased by €2 million (+18%) especially due to an improved commercial margin mainly driven by lower interest paid for deposits and term accounts. Underlying earnings, adjusted earnings and net income remained stable at €2 million. 1 In banking segment, for net banking revenues, “on a comparable basis” means after intercompany eliminations, and other scope effects. Page 69 Activity Report______________________________________________________________________Half Year 2012 CZECH REPUBLIC Underlying earnings as well as adjusted earnings and net income remained stable at €-3 million on a constant exchange rate basis mainly driven by higher commercial margin (€+1 million) offset by higher administrative expenses (€-1 million). SLOVAKIA Underlying earnings as well as adjusted earnings and net income decreased by €1 million to €-3 million on a constant exchange rate basis mainly driven by higher expenses following marketing campaigns to support business growth. SWITZERLAND AXA Bank Switzerland closed its operations on January 1, 2012 following the transfer of its customer portfolio to bank zweiplus. The one-off costs associated with the closure of the Swiss branch booked in FY2011 amounted to €4 million. Page 70 Activity Report______________________________________________________________________Half Year 2012 Holdings and other companies The Holdings and other companies consist of AXA’s non-operating companies, including mainly AXA parent company, AXA France Assurance, AXA Financial, AXA United Kingdom Holdings, AXA Germany Holdings, AXA Belgian Holding, CDOs and real estate companies. Underlying, Adjusted earnings and Net Income HY 2012 HY 2011 AXA (279) (214) Other French holdings companies (33) (38) Foreign holdings companies (122) (134) Others 1 1 UNDERLYING EARNINGS (433) (384) Net realized capital gains or losses attributable to shareholders (60) (180) ADJUSTED EARNINGS (493) (565) Profit or loss on financial assets (under Fair Value option) & derivatives (34) (89) Exceptional operations (including discontinued operations) 21 687 Goodwill and related intangibles impacts 0 0 Integration and restructuring costs (0) (1) NET INCOME (506) 33 AXA1 Underlying earnings decreased by €65 million to €-279 million mainly due to an increase in financial charge driven by €-32 million due to lower income on the net participation in BNP Paribas and by €-28 million as a result of the on- going amendment of the foreign currency hedging policy. Adjusted earnings increased by €26 million to €-339 million. Excluding the €92 million net impairment charge booked in 1H 2011 on Greece government bonds held by operational entities, adjusted earnings decreased by €66 million mainly driven by underlying earnings evolution. Net income decreased by €480 million to €-305 million. Excluding the €+682 million exceptional gain related to the disposal of the Australia & New Zealand operations in 1H 2011, net income increased by €202 million mainly driven by: - €+68 million linked to the sale of Canadian operations in respect of contingent consideration based on profitability metrics, €+68 million change of the mark to market on interest rate and foreign exchange derivatives which are not eligible to hedge accounting, €+38 million on time value related to equity derivatives, €+26 million increase in adjusted earnings. The foreign currency hedging policy has been amended balancing various objectives between net asset value protection, financial charge, liquidity and solvency positions. This new policy was implemented for US dollar and Swiss Franc and is currently being implemented for other currencies hedging (mainly Yen). The impact of this new policy was €-80 million after tax in 1H 2012 net income. 1 All the figures are after tax. Page 71 (in Euro million) FY 2011 (561) (47) (238) 2 (843) (224) (1,067) (17) 1,324 0 (0) 240 Activity Report______________________________________________________________________Half Year 2012 Other French holding companies AXA France Assurance Underlying earnings, adjusted earnings and net income decreased by €6 million to €-24 million mainly due to higher tax expenses resulting from higher inter-company dividends received. Other French holdings Underlying earnings increased by €10 million to €-9 million mainly due to an increase in operating profits from non consolidated entities. Adjusted earnings increased by €10 million to €-9 million mainly driven by underlying earnings evolution. Net income increased by €4 million to €-15 million. Excluding the €+9 million exceptional gain related to the disposal of the Australia & New Zealand operations in 1H 2011, net income increased by €13 million mainly driven by adjusted earnings evolution. Foreign Holding Companies AXA Financial Inc. Underlying earnings decreased by €5 million (-7%) to €-77 million. On a constant exchange rate basis, underlying earnings increased by €1 million (+2%). Adjusted earnings decreased by €5 million (-7%) to €-77 million. On a constant exchange rate basis, adjusted earnings increased by €1 million (+2%), in line with the underlying earnings evolution. Net income decreased by €38 million (-60%) to €-101 million. On a constant exchange rate basis, net income decreased by €30 million (-48%) driven by an unfavorable change in the fair value of the cross currency swaps. AXA UK Holdings Underlying earnings increased by €2 million (+85%) to €5 million. On a constant exchange rate basis, underlying earnings increased by €2 million (+75%) mainly due to a decrease in pension costs (€10 million) offset by lower investment income (€-9 million) following a loan restructuring in 2H 2011. Adjusted earnings increased by €3 million (+85%) to €5 million. On a constant exchange rate basis, adjusted earnings increased by €2 million (+75%) due to the improvement in underlying earnings. Net income increased by €26 million to €15 million. On a constant exchange rate basis, net income increased by €25 million due to the improvement in adjusted earnings (€+2 million), favorable movement on derivatives (€+10 million) and non-repeat of a 1H 2011 tax one-off of €15 million. German Holding companies Underlying earnings remained stable. Adjusted earnings increased by €23 million (+48%) to €-24 million mainly due to a lower impairment charge. Net income increased by €14 million (+31%) to €-30 million mainly due to higher adjusted earnings, partly compensated by an unfavorable change in fair value of derivatives. Belgian Holding company Underlying earnings increased by €1 million (+17%) to €-6 million. Page 72 Activity Report______________________________________________________________________Half Year 2012 Adjusted earnings increased by €1 million (+18%) to €-6 million. Net income increased by €1 million (+9%) to €-5 million. Mediterranean and Latin American Region Holdings Underlying and adjusted earnings increased by €5 million (+13%) to €-30 million. On a constant exchange rate basis, underlying and adjusted earnings increased by €5 million (+13%) reflecting lower financial charges. Net income increased by €3 million (+8%) to €-32 million. On a constant exchange rate basis, net income increased by €3 million (+8%) driven by the increase in adjusted earnings, partly offset by unfavorable change in financing hedges. Other CFP Underlying earnings, adjusted earnings and net income were stable at €1 million driven by stable positive run-off developments. Page 73 Activity Report______________________________________________________________________Half Year 2012 Outlook The macro economic environment will likely remain uncertain in the coming months and should continue to drive financial markets performance across the board. In this context, the Ambition AXA plan continues to be relevant despite the current market environment and AXA will continue to focus on its execution. Building on its financial strength and strong underlying fundamentals, AXA will continue to increase its exposure to the less market sensitive segments of Property & Casualty and Protection & Health. For the remainder of 2012, the business mix in Life & Savings will continue to shift towards more profitable segments, the favorable pricing environment will continue to support the Property & Casualty activity and the focus in Asset Management will be on further improving the investment performance. The delivery of the cost savings plan will also remain a priority, as well as the acceleration in high growth and direct markets. Page 74 Activity Report______________________________________________________________________Half Year 2012 Glossary The split between high growth market and mature market is detailed below: The notion of High Growth market includes the following countries: Central & Eastern countries (Poland, Czech Republic, Slovakia, Hungary, Ukraine, Russia), Hong Kong, South-East Asia (Singapore, Indonesia, Thailand, Philippines, Malaysia) India, China, and the Mediterranean and Latin American Region (Morocco, Turkey, Gulf, Mexico), excluding Direct operations. The notion of Mature Market includes the following countries: the United States, the United Kingdom, Benelux, Germany, Switzerland, Japan, Italy, Spain, Portugal, Greece, France. COMPARABLE BASIS FOR REVENUES AND ANNUALIZED PREMIUMS EQUIVALENT On a comparable basis means that the data for the current period were restated using the prevailing foreign currency exchange rates for the same period of prior year (constant exchange rate basis). It also means that data in one of the two periods being compared were restated for the results of acquisitions, disposals and business transfers (constant structural basis) and for changes in accounting principles (constant methodological basis). ADJUSTED EARNINGS Adjusted earnings represent the net income (Group share) before the impact of: (i) (ii) (iii) (iv) Exceptional operations (primarily change in scope and discontinued operations) Integration and restructuring costs related to material newly acquired companies as well as restructuring and associated costs related to productivity improvement plans Goodwill and other related intangibles, and Profit or loss on financial assets accounted for under fair value option (excluding assets backing liabilities for which the financial risk is borne by the policyholder), foreign exchange impacts on assets and liabilities, and derivatives related to invested assets. Derivatives related to invested assets: include all foreign exchange derivatives, except the ones related to currency options in earnings hedging strategies which are included in underlying earnings, exclude derivatives related to insurance contracts evaluated according to the “selective unlocking” accounting policy, and also exclude derivatives involved in the economic hedging of realized gains and impairments of equity securities and real estate backing general account and shareholders’ funds, for which cost at inception, intrinsic value and pay-off flow though adjusted earnings, and only time value flows through net income when there is no intention to sell the derivatives in the short term (if not, flows through adjusted earnings). UNDERLYING EARNINGS Underlying earnings correspond to adjusted earnings excluding net capital gains or losses attributable to shareholders. Net capital gains or losses attributable to shareholders include the following elements net of tax: realized gains and losses and change in impairment valuation allowance (on assets not designated under fair value option or trading assets), cost at inception, intrinsic value and pay-off of derivatives involved in the economic hedging of realized gains and impairments of equity securities and real estate backing general account and shareholders’ funds, related impact on policyholder participation (Life & Savings business), - DAC and VBI amortization or other reactivity to those elements if any (Life & Savings business) and net of hedging if any. Page 75 Activity Report______________________________________________________________________Half Year 2012 EARNINGS PER SHARE Earnings per share (EPS) represent AXA's consolidated earnings (including interest charges related to undated debts recorded through shareholders’ equity), divided by the weighted average number of outstanding ordinary shares. Diluted earnings per share (diluted EPS) represent AXA's consolidated earnings (including interest charges related to undated debts recorded through shareholders’ equity), divided by the weighted average number of outstanding ordinary shares, on a diluted basis (that is to say including the potential impact of all outstanding dilutive stock options being exercised performance shares, and conversion of existing convertible debt into shares, provided that their impact is not anti-dilutive). RETURN ON EQUITY (“ROE”) The calculation is prepared with the following principles: For net income ROE: Calculation is based on consolidated financial statements, i.e. shareholders’ equity including perpetual debt (“Super Subordinated Debts” TSS / “Perpetual Subordinated Debts” TSDI) and Other Comprehensive Income “OCI”, and net income not reflecting any interest charges on TSS / TSDI. For adjusted and underlying ROE : o All perpetual debts (TSS / TSDI) are treated as financing debt, thus excluded from shareholders’ equity Interest charges on TSS / TSDI are deducted from earnings o o OCI is excluded from the average shareholders’ equity. LIFE & SAVINGS MARGIN ANALYSIS Life & Savings margin analysis is presented on an underlying basis. Even though the presentation of Margin Analysis is not the same as the Statement of Income (underlying basis), it is based on the same GAAP measures as used to prepare the Statement of Income in accordance with IFRS. As a result, the operating income under the Margin Analysis is equal to that reported in AXA’s Statement of Income for the segment. There are certain material differences between the detailed line-by-line presentation in the Statement of Income and the components of Margin Analysis as set out below. o For insurance contracts and investment contracts with Discretionary Participation Features (DPF): (i) Gross premiums (net of deposits), fees and other revenues are allocated in the Margin Analysis based on the nature of the revenue between “Fees and Revenues” and “Net Technical Margin”. Policyholders’ interest in participating contracts is reflected as a change in insurance benefits in the Statement of Income. In the Margin Analysis, it is allocated to the related margin, i.e. primarily “Investment Margin” and “Net Technical Margin”. The “Investment margin” represents the net investment result in the Statement of Income and is adjusted to take into account the related policyholders’ participation (see above) as well as changes in specific reserves linked to invested assets’ returns and to exclude the fees on (or contractual charges included in) contracts with the financial risk borne by policyholders, which are included in “Fees and Revenues”. Change in URR (Unearned Revenue Reserve – capitalization net of amortization) is presented in the line “Change in unearned premiums net of unearned revenues and fees” in the underlying Statement of Income, whereas it is located in the line “Fees & Revenues” in the Margin analysis. (ii) (iii) (iv) o For investment contracts without DPF: (i) Deposit accounting is applied. As a consequence, fees and charges related to these contracts are presented in the underlying Statement of Income within Gross consolidated revenues on a separate line, and in Margin analysis in the lines “Fees & Revenues” and “Net Technical margin”. Change in UFR (Unearned Fees Reserve - capitalization net of amortization) is presented in the line “Change in unearned premiums net of unearned revenues & fees” in the underlying Statement of Income, whereas it is located in the line “Fees & Revenues” in the Margin analysis. (ii) Underlying Investment margin includes the following items: Page 76 Activity Report______________________________________________________________________Half Year 2012 (i) (ii) Net investment income Interests and bonuses credited to policyholders and unallocated policyholder bonuses (and the change in specific reserves purely linked to invested assets returns) related to the net investment income. Underlying Fees & Revenues include: (i) (ii) (iii) (iv) Revenues derived from mutual fund sales (which are part of consolidated revenues), Loadings charged to policyholders on premiums / deposits and fees on funds under management for separate account (unit-linked) business, Loadings on (or contractual charges included in) premiums / deposits received on all general account product lines, Deferral income such as capitalization net of amortization of URR (Unearned Revenue Reserve) and UFR (Unearned Fee Reserve), Other fee revenues, e.g., fees received on financial planning or sales of third party products. (v) Underlying Net Technical margin includes the following components: (i) (ii) (iii) (iv) (v) (vi) Mortality/morbidity margin: The amount charged to the policyholder in respect of mortality/morbidity for the related period less benefits and claims. It is equal to the difference between income for assuming risk and the actual cost of benefits. This margin does not include the claims handling costs and change in claims handling cost reserves, Surrender margin: The difference between the benefit reserve and the surrender value paid to the policyholder in the event of early contract termination, GMxB (Variable Annuity guarantees) active financial risk management is the net result from GMxB lines corresponding to explicit charges related to these types of guarantees less cost of hedge. It also includes the unhedged business result, Policyholder bonuses if the policyholder participates in the risk margin, Ceded reinsurance result, Other changes in insurance reserves are all the reserves strengthening or release coming from changes in valuation assumptions, additional reserves for mortality risk and other technical impacts such as premium deficiency net of derivative if any. Underlying Expenses are: (i) Acquisition expenses, including commissions and general expenses allocated to new business, related to insurance products as well as to other activities (e.g., mutual fund sales), Capitalization of acquisition expenses linked to new business: Deferred Acquisition Costs (DAC) and net rights to future management fees only for investment contracts without DPF, Amortization of acquisition expenses on current year and prior year new business, including the impact of interest capitalized: amortization charge for Deferred Acquisition Costs (DAC) and net rights to future management fees only for investment contracts without DPF, Administrative expenses, Claims handling costs, Policyholder bonuses if the policyholder participates in the expenses of the company. (ii) (iii) (iv) (v) (vi) Underlying VBI amortization includes VBI (Value of Purchased Life Business In-force) amortization related to underlying margins, as well as amortization of other intangibles related to the in-force business Life & Savings underlying cost income ratio: Underlying expenses plus underlying VBI amortization divided by \"underlying\" operating margin, where \"Underlying\" operating margin is the sum of (i) Underlying Investment margin; (ii) Underlying Fees and revenues, and (iii) Underlying Net technical Margin (all items defined above). Page 77 Activity Report______________________________________________________________________Half Year 2012 PROPERTY & CASUALTY (INCLUDING AXA CORPORATE SOLUTIONS ASSURANCE) Underlying net investment result includes the net investment income less the recurring interests credited to insurance annuity reserves Underlying net technical result is the sum of the following components: (i) (ii) (iii) Earned premiums, gross of reinsurance, Claims charges, gross of reinsurance, Change in claims reserves, including claims handling costs reserves, gross of reinsurance, excluding the recurring interests credited to insurance annuity reserves, Claims handling costs, Net result of ceded reinsurance. (iv) (v) Current accident year loss ratio net of reinsurance is the ratio of: (i) current year claims charge gross of reinsurance + claims-handling costs + result of reinsurance ceded on current accident year, excluding the recurring interests credited to the insurance annuity reserves, to Earned revenues, gross of reinsurance. (ii) All accident year loss ratio net of reinsurance is the ratio of: (i) all accident years claims charge gross of reinsurance + claims-handling costs + result of reinsurance ceded on all accident years excluding the recurring interests credited to the insurance annuity reserves, to Earned revenues, gross of reinsurance. (ii) Underlying expense ratio is the ratio of: (i) (ii) Underlying expenses (excluding claims handling costs), to Earned revenues, gross of reinsurance. Underlying expenses include two components: expenses (including commissions) related to acquisition of contracts (with the related acquisition ratio) and all other expenses (with the related administrative expense ratio). Underlying expenses exclude customer intangible amortization and integration costs related to material newly acquired companies. The enlarged expense ratio is the sum of the expense ratio and claims handling cost ratio. The underlying combined ratio is the sum of the underlying expense ratio and the all accident year loss ratio. ASSET MANAGEMENT Net New Money: Inflows of client money less outflows of client money. Net New Money measures the impact of sales efforts, product attractiveness (mainly dependent on performance and innovation), and the general market trend in investment allocation. Underlying Cost Income Ratio: (general expenses net of distribution revenues) / (gross revenues excluding distribution revenues). Assets Under Management (AUM) are defined as the assets whose management has been delegated by their owner to an asset management company such as AXA Investment Managers and AllianceBernstein. AUM only includes funds and mandates which generate fees and exclude double counting. BANKING Net New Money is a banking volume indicator. It represents the net cash flows of customers’ balances in the bank, with cash inflows (collected money) and cash outflows (exiting money). It includes market effect and capitalized interests over the period. Page 78 Consolidated financial statements_______________________________________________________Half Year 2012 Consolidated financial statements / Half Year 2012 Page 1 Consolidated financial statements_______________________________________________________Half Year 2012 Contents CONSOLIDATED STATEMENT OF FINANCIAL POSITION .............................................................................. 4 CONSOLIDATED STATEMENT OF INCOME ....................................................................................................... 6 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME..................................................................... 7 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................... 8 CONSOLIDATED STATEMENT OF CASH FLOWS .......................................................................................... 10 Note 1 : Accounting principles ............................................................................................................................. 12 General information .................................................................................................................................. 12 1.1. General accounting principles ................................................................................................................... 12 1.2. Consolidation ........................................................................................................................................... 15 1.3. Foreign currency translation of financial statements and transactions ......................................................... 18 1.4. Segment reporting ..................................................................................................................................... 18 1.5. Intangible assets........................................................................................................................................ 19 1.6. Investments from insurance, banking and other activities ........................................................................... 20 1.7. Assets backing liabilities arising from contracts where the financial risk is borne by policyholders ............. 22 1.8. Derivative instruments .............................................................................................................................. 22 1.9. Assets / liabilities held for sale and assets / liabilities including discontinued operations ............................. 22 1.10. Cash and cash equivalents ......................................................................................................................... 23 1.11. Share capital and shareholders’ equity ....................................................................................................... 23 1.12. Liabilities arising from insurance and investment contracts ........................................................................ 23 1.13. Reinsurance .............................................................................................................................................. 26 1.14. Financing debt .......................................................................................................................................... 26 1.15. Other liabilities ......................................................................................................................................... 26 1.16. Provisions for risks, charges and contingent liabilities ............................................................................... 28 1.17. Revenue recognition ................................................................................................................................. 28 1.18. Subsequent events ..................................................................................................................................... 29 1.19. Note 2 : 2.1. 2.1.1. 2.1.2. 2.1.3. 2.2. Scope of consolidation ............................................................................................................................. 30 Consolidated companies ............................................................................................................................ 30 Main fully consolidated companies ........................................................................................................... 30 Proportionately consolidated companies .................................................................................................... 33 Main investments in companies accounted for using the equity method...................................................... 33 Consolidated entities relating to specific operations ................................................................................... 33 Note 3 : 3.1. Segment information............................................................................................................................... 34 Segmental consolidated statement of income ............................................................................................. 36 Note 4 : Assets and liabilities held for sale including discontinued operations.................................................... 38 Main Half Year 2012 transactions ............................................................................................................. 38 4.1. Main 2011 transactions ............................................................................................................................. 38 4.2. Note 5 : 5.1. 5.2. 5.3. 5.4. 5.4.1. 5.4.2. 5.5. Investments ............................................................................................................................................. 40 Breakdown of investments ........................................................................................................................ 40 Investment in real estate properties ............................................................................................................ 42 Unrealized gains and losses on financial investments ................................................................................. 43 Financial assets subject to impairment ....................................................................................................... 44 Breakdown of financial assets subject to impairment (excluding investment in real estate properties) ......... 44 Change in impairment on invested assets (excluding investment in real estate properties) ........................... 45 Financial assets recognized at fair value .................................................................................................... 45 Page 2 Consolidated financial statements_______________________________________________________Half Year 2012 Note 6 : 6.1. 6.1.1. 6.1.2. 6.2. 6.2.1. 6.2.2. 6.3. 6.3.1. 6.3.2. Shareholders’ equity and minority interests .......................................................................................... 47 Impact of transactions with shareholders ................................................................................................... 47 Change in shareholders’ equity Group share for the first half of 2012......................................................... 47 Change in shareholders’ equity Group share for the first half of 2011......................................................... 48 Comprehensive income for the period ....................................................................................................... 49 Comprehensive income for the first half of 2012 ....................................................................................... 49 Comprehensive income for the first half of 2011 ....................................................................................... 51 Change in minority interests ...................................................................................................................... 51 Change in minority interests for the first half of 2012 ................................................................................ 51 Change in minority interests for the first half of 2011 ................................................................................ 51 Note 7 : Financing debt ........................................................................................................................................ 52 Note 8 : Net income per ordinary share ............................................................................................................... 53 Page 3 Consolidated financial statements_______________________________________________________Half Year 2012 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (in Euro million) Notes June 30, 2012 (a) December 31, 2011 Restated (a) (b) January 1, 2011 Restated (a) (b) Goodwill 16,094 15,855 16,741 Value of purchased business in force (c) 3,026 3,074 3,105 Deferred acquisition costs and equivalent (b) 19,873 18,688 16,829 Other intangible assets 3,305 3,382 3,648 Intangible assets 42,298 40,999 40,322 Investments in real estate properties 16,208 16,061 15,751 Financial investments 432,239 418,765 409,630 Assets backing contracts where the financial risk is borne by policyholders (d) 142,850 134,230 137,757 5 Investments from insurance activities 591,296 569,056 563,137 5 Investments from banking and other activities 38,154 35,264 31,416 Investments in associates - Equity method 1,258 1,139 1,168 Reinsurers' share in insurance and investment contracts liabilities 10,857 10,698 11,096 Tangible assets 1,638 1,410 1,517 Deferred policyholders' participation assets 749 1,247 636 Deferred tax assets (b) 3,443 3,332 4,370 Other assets 5,831 5,990 6,524 Receivables arising from direct insurance and inward reinsurance operations 15,988 13,346 13,468 Receivables arising from outward reinsurance operations 789 671 1,008 Receivables - current tax 2,094 2,347 1,851 Other receivables 16,642 16,325 13,917 Receivables 35,514 32,689 30,244 4 Assets held for sale including discontinued operations 480 360 22,848 Cash and cash equivalents 30,417 31,072 22,095 TOTAL ASSETS 756,105 727,268 728,851 All invested assets are shown net of related derivative instruments impact. (a) AXA Japan closes its full year accounts at September 30 and its half year accounts at March 31. Given significant movemen t in foreign exchange rates between September 30, 2010 and December 31, 2010, September 30, 2011 and December 31, 2011 and between March 31, 2012 and June 30, 2012, balance sheet items have been translated using respectively December 31, and June 30, exchange rates. (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (c) Amounts gross of tax. (d) Includes assets backing contracts where the financial risk is borne by policyholders with Guaranteed Minimum features. Page 4 Consolidated financial statements_______________________________________________________Half Year 2012 Notes June 30, 2012 (a) December 31, 2011 Restated (a) (b) Share capital and capital in excess of nominal value 25,206 25,188 Reserves and translation reserve (b) 20,895 17,080 Net consolidated income - Group share (b) 2,586 4,190 Shareholders’ equity – Group share 48,687 46,458 Minority interests 2,479 2,367 6 TOTAL SHAREHOLDERS' EQUITY 51,166 48,825 Subordinated debt 7,301 7,108 Financing debt instruments issued 2,492 2,506 Financing debt owed to credit institutions 833 807 7 Financing debt 10,627 10,421 Liabilities arising from insurance contracts 368,470 358,146 Liabilities arising from insurance contracts where the financial risk is borne by policyholders (c) 111,248 104,642 Total liabilities arising from insurance contracts 479,718 462,788 Liabilities arising from investment contracts with discretionary participating features 37,159 37,858 Liabilities arising from investment contracts with no discretionary participating features 403 380 Liabilities arising from investment contracts with discretionary participating features and where the financial risk is borne by policyholders 3,803 3,621 Liabilities arising from investment contracts with no discretionary participating features and where the financial risk is borne by policyholders 28,180 26,336 Total liabilities arising from investment contracts 69,546 68,195 Unearned revenue and unearned fee reserves 2,993 2,975 Liabilities arising from policyholders' participation 22,597 17,938 Derivative instruments relating to insurance and investment contracts (2,514) (2,056) LIABILITIES ARISING FROM INSURANCE AND INVESTMENT CONTRACTS 572,340 549,841 Liabilities arising from banking activities 35,721 34,023 Provisions for risks and charges 12,150 10,760 Deferred tax liabilities (b) 4,096 3,817 Minority interests of controlled investment funds and puttable instruments held by minority interest holders 5,406 3,896 Other debts instruments issued, notes and bank overdrafts (d) 6,126 6,272 Payables arising from direct insurance and inward reinsurance operations 7,040 7,212 Payables arising from outward reinsurance operations 5,449 5,179 Payables – current tax 1,454 1,194 Collateral debts relating to investments under a lending agreement or equivalent 26,349 27,509 Other payables 17,857 18,130 Payables 69,680 69,391 4 Liabilities held for sale including discontinued operations 325 189 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 756,105 727,268 (a) AXA Japan closes its full year accounts at September 30 and its half year accounts at March 31. Given significant movemen t in foreign exchange rates between September 30, 2010 and December 31, 2010, September 30, 2011 and December 31, 2011 and between March 31, 2012 and June 30, 2012, balance sheet items have been translated using respectively December 31, and June 30, exchange rates. (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (c) Also includes liabilities arising from contracts where the financial risk is borne by policyholders with Guaranteed Minimum features. (d) Amounts are shown net of related derivative instruments impact. June 30, 2012 (a) December 31, 2011 (a) Liabilities arising from insurance contracts where the financial risk is borne by policyholders (b) 111,248 104,642 Liabilities arising from investment contracts with discretionary participating features and where the financial risk is borne by policyholders 3,803 3,621 Liabilities arising from investment contracts with no discretionary participating features and where the financial risk is borne by policyholders 28,180 26,336 Total Liabilities arising from contracts where the financial risk is borne by policyholders 143,231 134,599 Liabilities arising from insurance contracts 368,470 358,146 Liabilities arising from investment contracts with discretionary participating features 37,159 37,858 Liabilities arising from investment contracts with no discretionary participating features 403 380 Total Liabilities arising from other insurance and investment contracts 406,032 396,384 (a) AXA Japan closes its full year accounts at September 30 and its half year accounts at March 31. Given significant movement in foreign exchange rates between September 30, 2010 and December 31, 2010, September 30, 2011 and December 31, 2011 and between March 31, 2012 and June 30, 2012, balance sheet items have been translated using respectively December 31, and June 30, exchange rates. (b) Also includes liabilities arising from contracts where the financial risk is borne by policyholders with Guaranteed Minim um features. Page 5 (in Euro million) January 1, 2011 Restated (a) (b) 24,723 23,065 0 47,788 4,167 51,955 7,066 2,500 887 10,454 342,559 108,587 451,146 37,233 720 4,700 25,006 67,659 2,757 15,897 (742) 536,717 27,532 10,495 3,473 4,855 6,504 7,472 5,916 1,348 23,399 18,562 68,058 20,168 728,851 (in Euro million) January 1, 2011 (a) 108,587 4,700 25,006 138,293 342,559 37,233 720 380,512 Consolidated financial statements_______________________________________________________Half Year 2012 CONSOLIDATED STATEMENT OF INCOME (in Euro million, except EPS in Euro) Notes June 30, 2012 June 30, 2011 Restated (a) Gross written premiums 45,749 43,959 Fees and charges relating to investment contracts with no participating features 164 182 Revenues from insurance activities 45,913 44,141 Net revenues from banking activities 224 246 Revenues from other activities 2,268 2,449 Revenues (b) 48,405 46,836 Change in unearned premiums net of unearned revenues and fees (3,962) (3,727) Net investment income (c) 8,023 7,582 Net realized gains and losses relating to investments at cost and at fair value through shareholders'equity (d) (e) 770 2,360 Net realized gains and losses and change in fair value of investments at fair value through profit and loss (f) 6,550 3,588 of which change in fair value of assets with financial risk borne by policyholders (g) 6,224 3,257 Change in investments impairment (h) (390) (380) Net investment result excluding financing expenses 14,953 13,149 Technical charges relating to insurance activities (g) (45,696) (40,577) Net result from outward reinsurance (572) (571) Bank operating expenses (64) (44) Acquisition costs (a) (4,293) (4,373) Amortization of the value of purchased business in force (47) (113) Administrative expenses (4,630) (5,045) Change in tangible assets impairment (0) (1) Change in goodwill impairment and other intangible assets impairment (67) (57) Other income and expenses (175) (91) Other operating income and expenses (55,544) (50,872) Income from operating activities before tax 3,852 5,387 Income arising from investments in associates - Equity method 42 31 Financing debts expenses (i) (289) (320) Net income from operating activities before tax 3,605 5,098 Income tax (a) (919) (976) Net operating income 2,687 4,122 4 Result from discontinued operations net of tax 99 Net consolidated income after tax 2,687 4,221 Split between : Net consolidated income - Group share 2,586 4,013 Net consolidated income - Minority interests 101 208 8 Earnings per share (j) 1.04 1.69 8 Fully diluted earnings per share (j) 1.04 1.68 (a) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (b) Gross of reinsurance. (c) Net of investment management costs. (d) Includes impairment releases on investments sold. (e) As of June 30, 2011, notably includes net realized gains on sale of Autralian and New Zealand operations (€695 million gr oss or €691 million net) and stake in Taikang Life (€779 million gross or €749 million net). (f) Includes realized and unrealized forex gains and losses relating to investments at cost and at fair value through shareholders' equity. (g) Change in fair value of assets with financial risk borne by policyholders is offset by a balancing entry in technical charges relating to insurance activities. (h) Excludes impairment releases on investments sold. (i) Includes net balance of income and expenses related to derivatives on financing debt (however excludes change in fair value of these derivatives). (j) Refer to Note 8 for the split of earnings per share between continuing and discontinued operations. Page 6 Consolidated financial statements_______________________________________________________Half Year 2012 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in Euro million) June 30, 2012 (a) June 30, 2011 Restated (a) (b) Reserves relating to changes in fair value through shareholders' equity 1,810 (1,816) Translation reserves 647 (1,737) Employee benefits actuarial gains and losses (935) 12 Net gains and losses recognized directly through shareholders' equity 1,522 (3,541) Net consolidated income 2,687 4,221 TOTAL COMPREHENSIVE INCOME (CI) 4,209 680 Split between : CI - Group share 4,051 873 CI - Minority interests 158 (193) (a) AXA Japan closes its half year accounts at March 31. Given significant movement in foreign exchange rates since end of March, balance sheet items have been translated using June 30, 2012 exchange rates. As of June 30, 2011, Axa Japan's balance sheet was translated using March 31, 2011 exhange rates. (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. Amounts are presented net of tax, policyholders’ participation and other shadow accounting related movements. Page 7 Consolidated financial statements_______________________________________________________Half Year 2012 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Attributable to shareholders Share Capital Other reserves Number of shares (in thousands) Nominal value (in Euros) Share Capital Capital in excess of nominal value Treasury shares Reserves relating to the change in fair value of financial instruments available for sale Reserves relating to the change in fair value of hedge accounting derivatives (cash flow hedge) Other (a) Shareholders 'equity opening January 1,2012 Restated (b) 2,357,198 2.29 5,398 20,471 (385) 4,838 50 6,059 Capital Capital in excess of nominal value Equity - share based compensation Treasury shares Others reserves - transaction on treasury shares Equity component of compound financial instruments Undated subordinated debt Financial expenses - Undated subordinated debt Others (including impact on change in scope) (c ) 103 - - - - - - - - 2.29 - - - - - - - - 0 - - - - - - - - 1 16 - - - - - - - - 17 - - - - - - - - - - - - (0) - - - - - - - - - - - (16) - - (148) - Dividends paid Impact of transactions with shareholders 103 2.29 0 17 17 (0) (164) Reserves relating to changes in fair value through shareholders' equity Translation reserves Employee benefits actuarial gains and losses (d) Net consolidated income - - - - - - - - - - 1,725 - - 62 - - 135 - - Total Comprehensive Income (CI) 1,725 62 135 Shareholders' equity closing June 30, 2012 2,357,301 2.29 5,398 20,488 (368) 6,563 112 6,031 NB : amounts are presented net of impacts of shadow accounting and its effects on policyholders' participation, deferred acquisition costs, and value of business in force. (a) Mainly undated subordinated debts (TSS, TSDI), and equity components of compounded financial instruments (e.g convertible bonds) (see Note 6.1.1.c). (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (c) Including changes in ownership interest in consolidated subsidiaries without losing control. (d) Actuarial gains and losses accrued since opening January 1, 2012. Page 8 Translation reserves (2,296) - - - - - - - 0 0 474 - - 474 (1,822) (in Euro million, except for number of shares and nominal value) Undistributed profits and other reserves Shareholders' Equity Group share Minority interests 12,323 46,458 2,367 - - - - - - - (66) 0 1 16 17 (16) - - (148) (66) - - - - - - - (47) (1,626) (1,626) (1,692) (1,822) (47) 1,788 23 (933) 2,586 1,653 609 (933) 2,586 4,051 37 (3) 101 158 12,284 48,687 2,479 Consolidated financial statements_______________________________________________________Half Year 2012 Attributable to shareholders Share Capital Other reserves Number of shares (in thousands) Nominal value (in Euros) Share Capital Capital in excess of nominal value Treasury shares Reserves relating to the change in fair value of financial instruments available for sale Reserves relating to the change in fair value of hedge accounting derivatives (cash flow hedge) Other (a) Shareholders 'equity opening January 1, 2011 Restated (b) 2,320,105 2.29 5,313 20,192 (495) 6,272 33 6,208 Capital Capital in excess of nominal value Equity - share based compensation Treasury shares Others reserves - transaction on treasury shares Equity component of compound financial instruments Undated subordinated debt Financial expenses - Undated subordinated debt Others (including impact on change in scope) (c) 327 - - - - - - - - 2.29 - - - - - - - - 1 - - - - - - - - 3 22 - - - - - - - - 107 - - - - - - - - - - - - 152 - - - - - - - (0) - - - (35) - 0 (140) - Dividends paid Impact of transactions with shareholders 327 2.29 1 24 107 152 (0) (175) Reserves relating to changes in fair value through shareholders' equity Translation reserves Employee benefits actuarial gains and losses (d) Net consolidated income - - - - - - - - - - (1,800) - - 13 - - (249) - - Total Comprehensive Income (CI) (1,800) 13 (249) Shareholders' equity closing June 30, 2011 Restated (b) 2,320,432 2.29 5,314 20,216 (387) 4,623 46 5,784 NB : amounts are presented net of impacts of shadow accounting and its effects on policyholders' participation, deferred acquisition costs, and value of business in force. (a) mainly undated subordinated debts (TSS, TSDI), and equity components of compounded financial instruments (e.g convertible bonds) (see Note 6.1.1.c). (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (c)Including changes in ownership interest in consolidated subsidiaries without losing control. Notably include €2.5 billion reduction in shareholders' equity related to the buy-out of minority interests in AXA APH Asian operation. (d) Actuarial gains and losses accrued since opening January 1, 2011. Page 9 Translation reserves (2,075) - - - - - - - (478) (478) (1,117) - - (1,117) (3,669) (in Euro million, except for number of shares and nominal value) Undistributed profits and other reserves Shareholders' Equity Group share Minority interests 12,341 47,788 4,167 - - - - - - - (2,093) (3,693) 1 3 22 107 (35) - 0 (140) (2,419) (1,601) - - - - - - - (1,501) (4,062) (1,501) (1,787) (29) 12 4,013 4,026 (1,365) 12 4,013 873 (372) 0 208 (193) 12,673 44,600 2,473 Avec et sans PB discrétionnaire Consolidated financial statements___________________________________________________Half Year 2012 CONSOLIDATED STATEMENT OF CASH FLOWS (in Euro million) June 30, 2012 (a) June 30, 2011 Restated (a) (b) Operating income including discontinued operation before tax 3,605 5,098 Net amortization expense (c) 305 261 Change in goodwill impairment and other intangible assets impairment (d) 12 3 Net change in deferred acquisition costs and equivalent (1,219) (584) Net increase / (write back) in impairment on investments, tangible and other intangible assets 427 394 Change in fair value of investments at fair value through profit or loss (8,265) (581) Net change in liabilities arising from insurance and investment contracts (e) 14,193 10,337 Net increase / (write back) in other provisions (f) (59) (140) Income arising from investments in associates – Equity method (42) (29) Adjustment of non cash balances included in the operating income before tax 5,353 9,661 Net realized investment gains and losses 859 (5,342) Financing debt expenses 287 325 Adjustment for reclassification to investing or financing activities 1,146 (5,018) Dividends recorded in profit or loss during the period (1,595) (1,618) Investment income & expense recorded in profit or loss during the period (6,959) (6,429) Adjustment of transactions from accrued to cash basis (8,553) (8,047) Net cash impact of deposit accounting 130 (240) Dividends and interim dividends collected 1,797 1,742 Investment income 8,961 8,221 Investment expense (excluding interests on financing and undated subordinated debts, margin calls and others) (1,279) (1,333) Change in operating receivables and payables and net operating cash from banking activities (3,322) (2,100) Net cash provided by other assets and liabilities (g) (804) (1,759) Tax expenses paid (563) (339) Other operating cash impact and non cash adjustment (1,599) (1,360) Net cash impact of transactions with cash impact not included in the operating income before tax 3,322 2,831 NET CASH PROVIDED / (USED) BY OPERATING ACTIVITIES 4,873 4,526 Purchase of subsidiaries and affiliated companies, net of cash acquired (13) 220 Disposal of subsidiaries and affiliated companies, net of cash ceded 178 1,293 Net cash related to changes in scope of consolidation 165 1,512 Sales of debt instruments (g) 34,363 40,985 Sales of equity instruments and non controlled investment funds (g) (h) 9,077 10,073 Sales of investment properties held directly or not (g) 182 392 Sales and/or repayment of loans and other assets (g) (i) 13,445 14,360 Net cash related to sales and repayments of investments (g) (h) (i) 57,067 65,809 Purchases of debt instruments (g) (36,603) (45,367) Purchases of equity instruments and non controlled investment funds (g) (h) (9,806) (8,026) Purchases of investment properties held direct or not (g) (545) (467) Purchases and/or issues of loans and other assets (g) (i) (14,357) (12,735) Net cash related to purchases and issuance of investments (g) (h) (i) (61,310) (66,595) Sales of tangible and intangible assets 3 8 Purchases of tangible and intangible assets (230) (166) Net cash related to sales and purchases of tangible and intangible assets (226) (159) Increase in collateral payable / Decrease in collateral receivable 29,894 37,655 Decrease in collateral payable / Increase in collateral receivable (29,881) (35,861) Net cash impact of assets lending / borrowing collateral receivables and payables 13 1,794 Other investing cash impact and non cash adjustment NET CASH PROVIDED / (USED) BY INVESTING ACTIVITIES (4,291) 2,362 Issuance of equity instruments 266 (14) Repayments of equity instruments (88) (314) Transactions on treasury shares (8) 35 Dividends payout (1,688) (1,682) Interests on undated subordinated debts paid (115) (112) Acquisition / sale of interests in subsidiaries without change in control (76) (3,291) Net cash related to transactions with shareholders (1,708) (5,378) Page 10 Consolidated financial statements___________________________________________________Half Year 2012 Cash provided by financial debts issuance 0 Cash used for financial debts repayments (24) Interests on financing debt paid (j) (238) Net cash related to Group financing (262) Other financing cash impact and non cash adjustment NET CASH PROVIDED / (USED) BY FINANCING ACTIVITIES (1,970) NET CASH PROVIDED BY DISCONTINUED OPERATIONS (0) CASH AND CASH EQUIVALENT AS OF JANUARY 1 (k) 30,033 Net cash provided by operating activities 4,873 Net cash provided by investing activities (4,291) Net cash provided by financing activities (1,970) Net cash provided by discontinued operations (0) Impact of change in consolidation method and of reclassifications as held for sale (322) Net impact of foreign exchange fluctuations and reclassification on cash and cash equivalents 358 CASH AND CASH EQUIVALENT AS OF JUNE 30 (k) 28,680 (a) AXA Japan closes its half year accounts at March 31. Given significant movement in foreign exchange rates since end of Ma rch, balance sheet items have been translated using June 30, 2012 exchange rates. As of June 30, 2011, Axa Japan's balance sheet was translated using March 31, 2011 exhange rates. (b) As described in note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (c) Includes premiums/discounts capitalization and relating amortization, amortization of investment and owner occupied prope rties (held directly). (d) Includes impairment and amortization of intangible assets booked during business combinations. (e) Includes impact of reinsurance and change in liabilities arising from contracts where the financial risk is borne by poli cyholders. (f) Mainly includes change in provisions for risks & charges, for bad debts/doubtful receivables and change in impairment of assets held for sale. (g) Includes related derivatives. (h) Includes equity instruments held directly or by controlled investment funds as well as non controlled investment funds. (i) Includes sales/purchases of assets backing insurance & investment contracts where the financial risk is borne by policyholders. (j) Includes net cash impact of interest margin relating to hedging derivatives on financing debt. (k) Net of bank overdrafts. June 30, 2012 June 30, 2011 Restated (a) Cash and cash equivalent 30,417 Bank overdrafts (b) (1,737) Cash and cash equivalent as of December 31 (c) 28,680 (a) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (b) Included in \"Other debt instruments issued and bank overdrafts\". (c) The \"Cash and cash equivalents\" balances shown in the statement of consolidated cash flows do not include cash balances of consolidated investment funds from th e Satellite Investment Portfolio (see Note 1.7.2). The \"Cash and cash equivalents\" item in the Statement of Consolidated Cash Flows excludes cash backing contracts where the financial risk is borne by policyholders (unit-linked contracts). Page 11 26 (67) (352) (392) (5,770) (68) 21,097 4,526 2,362 (5,770) (68) (0) (320) 21,827 (in Euro million) 22,656 (829) 21,827 Consolidated financial statements___________________________________________________Half Year 2012 Note 1 : Accounting principles 1.1. General information AXA SA, a French “Société Anonyme” (the “Company” and together with its consolidated subsidiaries, “AXA” or the “Group”), is the holding (parent) company for an international financial services group focused on financial protection. AXA operates principally in Europe, North America and Asia. The list of the main entities included in the scope of the AXA’s consolidated financial statements is provided in Note 2 of the notes to the consolidated interim financial statements. AXA operates in the following primary business segments: • Life & Savings, • Property & Casualty, • International Insurance, • Asset Management, • Banking. AXA is listed on Euronext Paris Compartiment A. These consolidated interim financial statements including all notes were finalized by the Board of Directors on August 2, 2012. 1.2. General accounting principles 1.2.1. Basis for preparation AXA’s consolidated interim financial statements are prepared as of June 30. However, certain entities within AXA have a different reporting half year end, in particular AXA Life Japan, which has a March 31 financial half year end. The consolidated interim financial statements are prepared in compliance with IFRS standards according to IAS 34 – Interim Financial Reporting and interpretations of the IFRS Interpretations Committee that are definitive and effective as of June 30, 2012, as adopted by the European Union before the balance sheet date. However, the Group does not use the “carve out” option allowing not to apply all hedge accounting principles required by IAS 39. In addition, the adoption of the new IFRS 9 standard published by the IASB in November 2009, amended in October 2010 and December 2011, has not been yet formally submitted to the European Union. However, the Group would not have used the earlier adoption option as of today. As a consequence, the consolidated interim financial statements also comply with IFRS as issued by the International Accounting Standards Board (IASB). Voluntary change in accounting policy on deferred acquisition costs (DAC) Deliberations at joint meetings of IASB and FASB regarding the Insurance Contracts Phase II project as well as change in USGAAP (ASU-2010-26) applicable as at January 1, 2012 for companies applying US GAAP indicate that accounting standards are moving to lower capitalization and therefore deferral of acquisition expenses. In this context, the Group changed its accounting policy on deferred acquisition costs as of January 1, 2012 and retrospectively restated comparative information related to previous periods. The change applied is in line with the updated draft wording provided at the IASB Insurance Working Group on October 24, 2011 around direct costs of acquiring a portfolio of insurance contracts which so far differs from ASU-2010-26 by not limiting the deferral to expenses from successful efforts only and in the detail of how that principle is applied (incremental direct cost of acquisition and specifying some other costs). The Group was seeking for better alignment with US GAAP applicants starting when the ASU-2010-26 change was applicable for such companies while conscious that the Group would be submitted to IFRS 4 Phase II whenever applicable. The impact of this change led to a reduction of total shareholders’ equity of €1, 913 million (of which €1,910 million group share) as of January 1, 2011. The adjustments on previous periods affected the following line items of the financial statements: Page 12 Consolidated financial statements___________________________________________________Half Year 2012 In Euro millionPublished amountsEffect of the changeRestated amountsPublished amountsEffect of the changeRestated amountsDeferred acquisition costs and equivalents (a) 19,641 (2,813) 16,829 21,785 (3,097) 18,688 Deferred tax assets 4,097 273 4,370 3,052 280 3,332 Deferred tax liabilities (4,098) 626 (3,473) (4,526) 709 (3,817)NET EFFECT (1,913) (2,108)In Euro millionPublished amountsEffect of the changeRestated amountsPublished amountsEffect of the changeRestated amountsAcquisition costs (4,398) 25 (4,373) (8,184) (199) (8,383)Income tax (963) (12) (976) (1,074) 63 (1,011)NET EFFECT 13 (136) June 30, 2011December 31, 2011(a) Corresponds to group Gross DAC amount. DAC assets should be looked at in conjunction with unearned revenues and reserves (URR: Revenues received at inception to cover furture services - see note 1.6.4), policyholder participation and tax. Life and Savings DAC net of URR, PB and tax amounted to €8,509 million as at December 31, 2011.Consolidated statement of financial positionConsolidated statement of incomeJanuary 1, 2011 December 31, 2011 Standards, amendments and interpretations published but not yet effective IFRS 9 - Financial instruments, published on November 12, 2009, amended on October 28, 2010 and December 16, 2011 and applicable to the Group from January 1, 2015 with earlier application permitted, represents the completion of the first part of a three-part project to replace IAS 39. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value. A financial asset is measured at amortized cost if both a) the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. At initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch. For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in other comprehensive income subsequent changes in the fair value of the instruments (including realized gains and losses), dividends being recognized in profit or loss. Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. The adoption date of IFRS 9 including its different phases (the second and third phases respectively relate to the impairment methodology and the hedge accounting), its method of implementation and its impact are currently being examined within the Group. The amendment to IFRS 7 – Disclosures – Transfers of Financial Assets published on October 7, 2010, increases the disclosure requirements for transactions involving transfers of financial assets. The amendment is intended to provide additional information regarding risk exposures when a financial asset is transferred but the transferor retains some level of continuing exposure to the asset. The amendment also requires disclosure where transfers of financial assets are not evenly distributed throughout the period. The disclosure amendment is effective for annual periods beginning on or after July 1, 2011. It is not expected to have a material impact on the Group’s consolidated financial statements as of December 31, 2012. The amendment to IAS 12 – Income Taxes, published on 20 December 2010 addresses the measurement of deferred tax liabilities and deferred tax assets, which depends on whether an entity expects to recover an asset by using the asset or by selling the asset. In some cases, it is difficult and subjective to assess whether recovery will be through use or through sale. The amendment provides a practical approach in such cases, by introducing a presumption that an asset is recovered entirely through sale unless the entity has clear evidence that recovery will occur in another manner. The presumption would apply when investment properties, property, plant and equipment or intangible assets are remeasured at fair value or revalued at fair value. The amendment is effective for annual periods beginning on or after January 1, 2012 and is not expected to have a material impact on the Group’s consolidated financial statements as of December 31, 2012. A package of five new and revised standards were published on May 12, 2011 addressing the accounting for consolidation, involvement in joint arrangements and disclosure of involvements with other entities. Each of the five standards have an effective date for annual periods beginning on or after January 1, 2013, with earlier application permitted so long as each of the other standards in the package is also early applied. The analysis of the potential impact on the Group’s consolidated financial statements with regard to the package of five new and revised standards is currently underway. Page 13 Consolidated financial statements___________________________________________________Half Year 2012 IFRS 10 – Consolidated Financial Statements replaces the consolidation guidance in IAS 27 – Consolidation and Separate Financial Statements and SIC-12 – Special Purpose Entities, by introducing a single consolidation model for all entities based on control, irrespective of the nature of the investee. Under IFRS 10, control is based on whether an investor has 1) power over the investee; 2) exposure, or rights, to variable returns from its involvement with the investee; and 3) the ability to use its power over the investee to affect the amount of the returns. IFRS 11 – Joint Arrangements introduces new accounting requirements for joint arrangements and replaces IAS 31 – Interests in Joint Ventures. IFRS 11 eliminates the option to apply the proportional consolidation method when accounting for jointly controlled entities and focuses on the rights and obligations of the arrangement, rather than the legal form. The application of the equity method instead of the proportional consolidation is not expected to have a material impact on the Group’s consolidated financial statements. IFRS 12 – Disclosures of Interests in Other Entities requires enhanced disclosures for all forms of interest in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. Amended IAS 27 – Separate Financial Statements sets out the unchanged requirements relating to separate financial statements. The other portions of IAS 27 are replaced by IFRS 10. Amended IAS 28 – Investments in Associates and Joint Ventures includes amendments for conforming changes based on the issuance of IFRS 10, IFRS 11 and IFRS 12. IFRS 13 – Fair Value Measurement, published on May 12, 2011, defines fair value, provides guidance on how to determine fair value and requires disclosures about fair value measurements. IFRS 13 does not change the requirements regarding which items should be measured or disclosed at fair value. IFRS 13 is effective for annual periods beginning on or after January 1, 2013, with early application permitted, and it is not expected to have a material impact on the Group’s consolidated financial statements. The amendment to IAS 1 – Presentation of Financial Statements, published June 16, 2011, requires entities to group together items presented within other comprehensive income based on whether they are potentially reclassifiable to profit or loss in a subsequent period. The amendment also preserves the requirement that items in other comprehensive income and profit or loss should be presented as either a single statement or two consecutive statements. The amendment is effective for annual periods beginning on or after July 1, 2012, with early application permitted, and it is not expected to have a material impact on the Group’s consolidated financial statements. The amendment to IAS 19 – Employee Benefits, published June 16, 2011, addresses the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring remeasurements to be presented in other comprehensive income. The amendment also eliminates the corridor method deferral of recognition of gains and losses, which is not applied by the Group. The amendment is effective for annual periods beginning on or after January 1, 2013, with early application permitted. The analysis of the potential impact on the Group’s consolidated financial statements is currently underway. The amendments to IAS 32 – Financial Instruments: Presentation, and the amendments to IFRS 7 – Financial Instruments Disclosure published December 16, 2011, provide clarifications of the application of the offsetting rules and amend the related disclosure requirements. The amendments to IAS 32 clarify that to result in offset of a financial asset and a financial liability, a right to set-off must be available today rather than be contingent on a future event and must be exercisable by any of the counterparties, both in the normal course of business and in the event of default, insolvency or bankruptcy. Additional clarifications are presented regarding the settlement process. The amendments to IFRS 7 require disclosure of information about rights of offset and related arrangements. The amendments to IAS 32 are effective for annual periods beginning on or after January 1, 2014 and the IFRS 7 disclosure amendments are required for annual periods beginning on or after January 1, 2013. The amendments are not expected to have a material impact on the Group’s consolidated financial statements. Annual Improvements 2009 – 2011 Cycle, published on May 17, 2012, includes amendments to IFRSs that are not part of a major project. They are presented in a single document rather than as a series of piecemeal changes. They are applicable for annual periods beginning on or after January 1, 2013. These amendments are not expected to have a material impact on the Group’s consolidated financial statements. Preparation of financial statements The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions. It requires a degree of judgment in the application of Group accounting principles described below. The main balance sheet captions concerned are goodwill (in particular impairment tests described in section 1.6.1), intangible assets acquired in a business combination, the value of acquired business in force, deferred acquisition costs and equivalent, certain assets accounted at fair value, deferred tax assets, liabilities relating to the insurance business, pension benefit obligations and balances related to share-based compensation. The principles set out below specify the measurement methods used for these items. These methods, along with key assumptions where required, are discussed in greater depth in the notes relating to the asset and liability items concerned where meaningful and useful. As recommended by IAS 1, assets and liabilities are generally classified globally on the balance sheet in increasing order of liquidity, which is more relevant for financial institutions than a classification between current and non-current items. As for most insurance companies, expenses are classified by destination in the income statement. Page 14 Consolidated financial statements___________________________________________________Half Year 2012 All amounts in the consolidated statement of financial position, consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of cash flows, consolidated statement of changes in equity and in the notes are expressed in Euro million, and rounded up to the nearest whole unit, unless otherwise stated. 1.2.2. First time adoption of IFRS The AXA Group’s transition date is January 1, 2004. The Group prepared its opening IFRS balance sheet at that date. The Group’s IFRS adoption date was January 1, 2005. The major options elected in accordance with IFRS 1 were the following: Purchase Accounting, goodwill and other intangibles related to past business combinations performed prior to January 1, 2004 AXA chose not to restate past business combinations based on the option available in IFRS 1. As a result, past business combinations prior to January 1, 2004 are accounted for on a previous GAAP basis in the IFRS financial statements, except: Goodwill has been denominated in the functional currency of the acquired entity under IFRS since January 1, 2004 (transition to IFRS), and • Any item recognized under previous GAAP that did not qualify for recognition as an asset or liability under IFRS was reclassified into goodwill. As a result, the goodwill gross value corresponds to the gross value of these goodwill net of cumulated amortization recognized in French GAAP as of December 31, 2003. Currency Translation Differences AXA elected the option to reset to zero all past cumulative currency translation differences for all foreign operations as of January 1, 2004. Pension accounting All cumulative past actuarial gains and losses on all employee benefit plans were recognized in retained earnings as of January 1, 2004. Unless otherwise stated, the AXA’s accounting policies have been consistently applied to all the periods presented in its financial statements, including policies relating to the classification and measurement of insurance contracts, investment contracts and other financial investments and liabilities including derivatives. 1.3. Consolidation 1.3.1. Scope and basis of consolidation Companies in which AXA exercises control are known as subsidiaries. Under the current definition of IAS 27, control is the power to govern the financial and operating policies of a company so as to obtain benefits from its activities. Subsidiaries are fully consolidated from the date on which control according to the IAS 27 / SIC 12 current model is transferred to AXA. Control is presumed to exist when AXA directly or indirectly holds more than 50% of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are also considered when assessing whether AXA controls another entity. Entities that are controlled in substance, even without any ownership interest, are also consolidated, as well as entities that are controlled in substance because of a specific statute or an agreement, even without any ownership interest. In particular this relates to special purpose entities, such as securitization vehicles. Companies over which AXA exercises a joint controlling influence alongside one or more third parties are consolidated proportionately. Companies in which AXA exercises significant influence are accounted for under the equity method. Significant influence is presumed when AXA directly or indirectly holds 20% or more of the voting rights or, for example, when significant influence is exercised through an agreement with other shareholders. AXA’s share of equity associates’ post-acquisition profits or losses is recognized in the income statement, and its share of post-acquisition movements in reserves is stated under “Other reserves”. Page 15 Consolidated financial statements___________________________________________________Half Year 2012 Investment funds and real estate companies are either fully consolidated or proportionately consolidated or accounted for under the equity method, depending on which conditions of IAS 27 / SIC 12 listed above they satisfy. For fully consolidated investment funds, minority interests are recognized at fair value and shown as liabilities in the balance sheet if the companies’ instruments can be redeemed at any time by the holder at fair value. Investment funds accounted by equity method are shown under the balance sheet caption “Financial investments”. 1.3.2. Business combinations and subsequent changes in the Group ownership interest In accordance with the option made available by IFRS 1 – First-time adoption of IFRS, business combinations prior to 2004 were not restated with respect to French accounting principles in force at the time. As the Group decided to early adopt IFRS 3 – Business Combinations and amendments to IAS 27 – Consolidated and Separate Financial Statements from January 1, 2009, the principles described below are those that apply from that date. Valuation of assets acquired and liabilities assumed of newly acquired subsidiaries and contingent liabilities Upon first consolidation, all assets, liabilities and contingent liabilities (unless they are not present obligations) of the acquired company are estimated at their fair value. However, in compliance with an exemption permitted by IFRS 4, liabilities related to life insurance contracts or investment contracts with discretionary participating features are maintained at the carrying value prior to the acquisition date to the extent that this measurement basis is consistent with AXA’s accounting principles. The fair value of acquired business in force relating to life insurance contracts and investment contracts with discretionary participating features is recognized as an asset corresponding to the present value of estimated future profits emerging on acquired business in force at the date of acquisition (also referred to as value of acquired business in force or VBI and reflecting the difference between the fair value and the carrying value of the liabilities). The present value of future profits takes into consideration the cost of capital and is estimated using actuarial assumptions based on projections made at purchase date but also using a discount rate that includes a risk premium. Investment contracts with no discretionary participating features do not benefit from the exemption permitted by IFRS 4 in phase I of the IASB’s insurance project such as described above, i.e. the fair value of acquired liabilities is booked through the recognition of an asset corresponding to the value of acquired business in force. Liabilities relating to investment contracts with no discretionary participating features are measured directly at fair value. In accordance with IAS 39, the fair value of these contracts cannot be less than surrender value when they contain a demand feature. Other identifiable intangible assets such as the value of customer relationships should be recognized. The value of customer relationships intangible represents the value of future cash flows expected from renewals and the cross-selling of new products to customers known and identified at the time of the acquisition. These projections include assumptions regarding claims, expenses and financial revenues, or they can be estimated on the basis of the new business value. In line with accounting practices in force before the adoption of IFRS, which may continue to be applied under IFRS 4, future premiums relating to acquired business may be recognized in the “Value of acquired business in force” item. To the extent that these other intangible assets can be estimated separately, they can also be measured by looking at the purchased marketing resources that will allow to generate these future cash flows. The nature of the intangible assets recognized is consistent with the valuation methods used when purchasing the acquired entity. In the context of a business combination, only restructuring costs that can be measured reliably and which correspond to an existing liability of the acquired company prior to the acquisition date are included in restructuring provisions recognized in the acquired company’s balance sheet at acquisition date. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, the liabilities incurred by the Group to former owners of the acquiree and the equity interests issued by the Group. Purchase consideration includes any contingent element (adjustment in the acquisition price conditional upon on one or more events). In the estimate of the contingent element, attention is paid to use assumptions that are consistent with the assumptions used for the valuation of intangible assets such as VBI. For business combinations that occurred before January 1, 2009, any contingent element was included in the cost of the combination to the extent the adjustment was probable and could be measured reliably. If the future events do not occur or the estimate needs to be revised, the cost of the business combination continues to be adjusted accordingly, taking account of the impact in terms of additional goodwill and/or adjustments of the valuation of acquired assets and liabilities. For business combinations on or after January 1, 2009, any change to the estimate of the contingent element between the acquisition date and the amount actually subsequently paid is recognized in the income statement. Page 16 Consolidated financial statements___________________________________________________Half Year 2012 Direct transaction costs related to a business combination are charged in the income statement when incurred. In step acquisitions, any previously minority interest held by the Group is measured at fair value and the resulting adjustment is recognized through the net income. Similarly, when an additional purchase changes the control from significant influence or joint control to control, any investment pre-existing in a former associate/joint venture is re-measured to its fair value with the gain or loss through net income (consequently also resulting in a new goodwill). According to a decision taken for each acquisition, any minority interest may be measured at fair value or at its proportionate interest in the acquiree’s identifiable net assets. If the transaction is denominated in a foreign currency, the exchange rate used is that in force on the date of the transaction or on the starting date of the transaction (if it occurs over a period). Goodwill Goodwill is measured as the excess of (a) the aggregate of the consideration transferred, the amount of any minority interest in the acquiree and in a business combination achieved in stages, the acquisition-date fair value of the Group’s previously held equity interest in the acquiree over (b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill arising from the acquisition of a foreign entity is recorded in the local currency of the acquired entity and is translated into Euro at the closing date. If the cost of acquisition is less than the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, the difference is directly recorded in the consolidated statement of income. Adjustments can be made to goodwill within twelve months of the acquisition date, if new information becomes available to complete the initial accounting. In this case, comparative information is presented as if the initial accounting had been completed from the acquisition date. If, after the period of twelve months, a deferred tax asset, initially considered as not recoverable, finally meets the recognition criteria, the corresponding tax benefit is recorded in the consolidated statement of income without a corresponding adjustment in goodwill. Goodwill is allocated across operating segments (Life & Savings, Property & Casualty, International Insurance, Asset Management and Banking) to cash generating units corresponding (i) to the companies acquired or portfolios of business acquired according to their expected profitability, and (ii) to the entities already within the AXA Group that will benefit from the synergies of the combination with the activities acquired. This allocation of goodwill is used both for segment reporting and for impairment testing. Purchase and sale of minority interests in a controlled subsidiary Purchase and sale transactions of minority interests in a controlled subsidiary that do not change the conclusion of control are recorded through shareholders’ equity (including direct acquisition costs). If control in a subsidiary is lost, any gain or loss is recognized in net income. Furthermore, if an investment in the entity is retained by the Group, it is re-measured to its fair value and any gain or loss is also recognized in net income. Put over minority interests When control over a subsidiary is acquired, a put option may be granted to minority shareholders. However, the recognition of the puttable instruments as a liability depends on the contractual obligations. When the contract involves an unconditional commitment exercisable by the option holder, it is recognized as a liability. Since the balancing entry to this liability is not specified by current IFRS, the Group’s method is (i) to reclassify minority interests from equity to liability, (ii) to re-measure this liability at the present value of the option price and (iii) to recognize the difference either as an increase in goodwill for puts existing before January 1, 2009 or as a decrease in equity (Group share) for a put granted after January 1, 2009, to the extent there is no immediate transfer of risks and rewards. Similarly, subsequent changes in the liability are recorded against goodwill for puts existing before January 1, 2009 and against equity (Group share) for puts granted after that date. Page 17 Consolidated financial statements___________________________________________________Half Year 2012 Intra-group transactions Intra-group transactions, including internal dividends, payables/receivables and gains/losses on intra-group transactions are eliminated: • in full for controlled subsidiaries, and; • to the extent of AXA’s interest for entities consolidated by equity method or proportionate consolidation. The effect on net income of transactions between consolidated entities is always eliminated. However, in case of a loss, an impairment test is performed in order to assess whether an impairment has to be booked. In the event of an internal sale of an asset that is not intended to be held on the long term by the Group, deferred tax is recognized as the current tax calculated on the realized gain or loss is eliminated. The income statement impact of the potential policyholders’ participation resulting from this transaction is also eliminated, and a deferred policyholders’ participation asset or liability is posted to the statement of financial position. In addition, the transfer of consolidated shares, between two consolidated subsidiaries but held with different ownership percentages, should not impact the Group net income. The only exception would be any related tax and policyholders’ participation recorded in connection to the transaction, which are maintained in the consolidated financial statements. These transfers also have an impact on Group shareholders’ equity (with a balancing entry recorded in minority interests). This impact is identified in the “other” changes of the consolidated statement of shareholders’ equity. 1.4. Foreign currency translation of financial statements and transactions The consolidated financial statements are presented in Euro million, the Euro being the Group’s presentational currency. The results and financial position of all Group entities that have a functional currency (i.e. the currency of the primary economic environment in which the entity operates) different from the Group presentational currency are translated as follows: • assets and liabilities of entities in a functional currency different from Euro are translated at the closing rate; • revenues and expenses are translated at the average exchange rates over the period; • all resulting foreign exchange differences are recognized as a separate component of equity (translation differences). At the local entity level, foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at closing rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement, except where hedge accounting is applied as explained in section 1.9. As mentioned in section 1.3.2, goodwill arising on the acquisition of a foreign entity is recorded in the local currency of the acquired entity and is translated into Euro at the closing date. Foreign exchange differences arising from the translation of a net investment in a foreign subsidiary, borrowings and other currency instruments qualifying for hedge accounting of such investment are recorded in shareholders’ equity under translation differences and are recycled in the income statement as part of the realized gain or loss on disposal of the hedge net investment. Foreign exchange differences arising from monetary financial investments available for sale are recognized as income or expense for the period in respect of the portion corresponding to amortized cost. The residual translation differences relating to fair value changes are recorded in shareholders’ equity. Regarding the cumulative amount of the exchange differences related to disposed business, the Group applies the step-by-step consolidation method (IFRIC 16). 1.5. Segment reporting The segmental analysis provided in AXA’s Annual Report and Financial Statements reflects operating business segments; it is based on five business lines: Life & Savings, Property & Casualty, International Insurance, Asset Management and Banking. An additional “Holdings” segment includes all non-operational activities. Page 18 Consolidated financial statements___________________________________________________Half Year 2012 1.6. Intangible assets 1.6.1. Goodwill and impairment of goodwill Goodwill is considered to have an indefinite useful life and is therefore not amortized. Impairment tests are performed at least annually. Impairment of goodwill is not reversible. AXA performs an impairment test of goodwill at least annually based on cash generating units, using a multi-criterion analysis with parameters such as the value of assets, future operating profits and market share, in order to determine any significant adverse changes. It also considers the interdependence of transactions within sub-groups. Within each cash generating unit, a comparison is made between net book value and the recoverable value (equal to the higher of fair value less costs to sell and value in use). Value in use consists of the net assets and expected future earnings from existing and new business, taking into account the cash generating units’ future cash flows. The value of future expected earnings is estimated on the basis of the life insurance and investment contracts embedded value figures published by AXA or similar calculations for other activities. Fair values less costs to sell are based on various valuation multiples. 1.6.2. Value of purchased life insurance business in force (VBI) The value of purchased insurance contracts and investment contracts with discretionary participating features recognized in a business combination (see section 1.3.2) is amortized as profits emerge over the life of the contracts’ portfolio. In conjunction with the liability adequacy test (see section 1.13.2), VBI is subject to annual recoverability testing based on actual experience and expected changes in the main assumptions. 1.6.3. Deferred acquisition costs (DAC) relating to insurance contracts and investment contracts with discretionary participating features – Rights to future management fees, also known as investment contracts with no discretionary Deferred origination costs (DOC) relating to participating features The variable costs of writing insurance contracts and investment contracts with discretionary participating features, primarily related to the underwriting of new business, are deferred by recognizing an asset. In Property and Casualty, DAC are amortized over the terms of the policies, as premium is earned. In Life, the asset is amortized based on the estimated gross profits emerging over the life of the contracts. In conjunction to the liability adequacy test (see section 1.13.2) this asset is tested for recoverability: any amount above future estimated gross profits is not deemed recoverable and expensed. For investment contracts with no discretionary participating features, a similar asset is recognized, i.e. Rights to future management fees, also known as Deferred origination costs (DOC) but limited to costs directly attributable to the provision of investment management services. This asset is amortized by taking into account projections of fees collected over the life of the contracts. The amortization of DOC is reviewed at each closing date to reflect changes in assumptions and experience. This asset is also tested for recoverability. DAC and DOC are reported gross of unearned revenues and fees reserves. These unearned revenues and fees reserves are separately recognized as liabilities and are amortized over the contract term using the same amortization approach used for DAC and DOC. 1.6.4. Unearned revenues reserves Revenues received at contract inception to cover future services are deferred and recognized in the income statement using the same amortization pattern as the one used for deferred acquisition costs. 1.6.5. Other intangible assets Other intangible assets include software developed for internal use for which direct costs are capitalized and amortized on a straight-line basis over the assets’ estimated useful lives. Page 19 Consolidated financial statements___________________________________________________Half Year 2012 They also include customer relationships intangibles as well as distribution agreements recognized as a result of business combinations. If these assets have a finite useful life, they are amortized on a straight-line basis over their estimated life. In all cases, they are subject to impairment tests, at each closing for assets with a finite useful life and at least annually for other assets. In the event of a significant decline in value, an impairment is booked corresponding to the difference between the value on the balance sheet and the higher of value in use and fair value less costs to sell. 1.7. Investments from insurance, banking and other activities Investments include investment in real estate properties and financial instruments including equity instruments, debt instruments and loans. 1.7.1. Investment in real estate properties Investment in real estate properties (excluding investment in real estate properties totally or partially backing liabilities arising from contracts where the financial risk is borne by policyholders) is recognized at cost. The properties components are depreciated over their estimated useful lives, also considering their residual value if it may be reliably estimated. In case of unrealized loss over 15%, an impairment is recognized for the difference between the net book value of the investment property and the fair value of the asset based on an independent valuation. Furthermore, at the level of each reporting entity, if the cumulated amount of unrealized losses under 15% (without offsetting with unrealized gains) represents more than 10% of the cumulated net cost of real estate assets, additional impairment are booked on a line-by-line approach until the 10% threshold is reached. If, in subsequent periods, the appraisal value rises to at least 15% more than the net carrying value, previously recorded impairment is reversed to the extent of the difference between a) the net carrying value and b) the lower of the appraisal value and the depreciated cost (before impairment). Investment in real estate properties that totally or partially back liabilities arising from contracts where the financial risk is borne by policyholders is recognized at fair value with changes in fair value through profit or loss. 1.7.2. Financial instruments classification Depending on the intention and ability to hold the invested assets, financial instruments are classified in the following categories: • assets held to maturity, accounted for at amortized cost; • assets held for trading and assets designated as at fair value with change in fair value through profit or loss; • available-for-sale assets accounted for at fair value with changes in fair value recognized through shareholders’ equity; • loans and receivables (including some debt instruments not quoted in an active market) accounted for at amortized cost. At inception, the option to designate financial investments and liabilities at fair value with change in fair value recognized through income statement is mainly used by the Group in the following circumstances: • financial investments when electing the fair value option allows the Group to solve accounting mismatch, and in particular: – assets backing liabilities arising from contracts where the financial risk is borne by policyholders; – assets included in hedging strategies set out by the Group for economical reasons but not eligible for hedge accounting as defined by IAS 39; – debts held by structured bond funds controlled and consolidated by the Group and made up of CDOs (Collateralized Debt Obligations); portfolios of managed financial investments whose profitability is valued on a fair value basis: mainly securities held by consolidated investment funds, managed according to the Group risk management policy (“Satellite Investment Portfolio”, see definition below). In practice, assets held through consolidated investment funds are classified: • either as assets of the “Core Investment Portfolios” which include assets backing liabilities arising from insurance and investment contracts, managed according to AXA’s ALM strategy; or as assets of the “Satellite Investment Portfolios”, reflecting the strategic asset allocation based on a dynamic asset management aimed at maximizing returns. Underlying financial instruments held in the “Core Investment Portfolios” are classified as available-for-sale unless involved in a qualifying hedge relationship or more broadly when electing the fair value option reduces accounting mismatch. As specified above, the financial instruments held in the “Satellite Investment Portfolios” are accounted for at fair value with changes in fair value recognized through income statement. Page 20 Consolidated financial statements___________________________________________________Half Year 2012 Assets designated as available-for-sale, trading assets, investments designated as at fair value through P&L and all derivatives are measured at fair value, i.e. the amount for which an asset could be exchanged, between knowledgeable, willing parties in an arm’s length transaction. The Group applies the IAS 39 fair value hierarchy. Loans which are not designated under the fair value option are accounted at amortized cost using the effective interest rate method. Impairment of financial instruments AXA assesses at each balance sheet date whether a financial asset or a group of financial investments at (amortized) cost or designated as “available for sale” is impaired. A financial asset or group of financial investments is impaired when there is objective evidence of impairment as a result of one or more events and this event has an impact on the estimated future cash flows of the asset(s) that can be reliably estimated. For debt instruments classified as “held to maturity” or “available for sale”, an impairment based respectively on future cash flows discounted using the initial effective interest rate or on fair value is recorded through the income statement if future cash flows may not be fully recoverable due to a credit event relating to the instrument issuer. A downgrade of an entity’s credit rating is not, of itself, evidence of impairment. If the credit risk is eliminated or improves, the impairment may be released. The amount of the reversal is also recognized in the income statement. For equity instruments classified as available for sale, a significant or prolonged decline in the fair value below its carrying value is considered as indication for potential impairment, such as equity instruments showing unrealized losses over a 6 months period or more (prior to the closing date), or unrealized losses in excess of 20% of the net carrying value at the closing date. If such evidence exists for an available for sale financial asset, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment on that financial asset already booked in the income statement – is removed from shareholders’ equity and an impairment is recognized through the income statement. Equity instruments impairment recognized in the income statement cannot be reversed through the income statement until the asset is sold or derecognized. Impairments of loans available for sale are based on the present value of expected future cash flows, discounted at the loan’s effective interest rate (down to the loan’s observable market price), or on the fair value of the collateral. For financial investments accounted for at amortized cost, including loans and assets classified as “held to maturity” or assets designated as “Loans and receivables”, the impairment test is first performed at the asset level. A more global test is then performed on groups of assets with similar risk profile. Methods for calculating the net book value of assets sold (average cost, first-in first-out, etc.) depend on local Assets and Liabilities Management (ALM) strategies as these strategies have been set up to take into account specific commitments to policyholders. These methods may differ within the Group provided that they are used consistently at each entity level. 1.7.3. Repurchase agreements and security lending The Group is party to repurchase agreements and securities lending transactions under which financial assets are sold to a counterparty, subject to a simultaneous agreement to repurchase these financial assets at a certain later date, at an agreed price. If substantially all of the risks and rewards of the financial assets remain with the Group over the entire lifetime of the transaction, the Group does not derecognize the financial assets. The proceeds of the sale are reported separately. Interest expense from repurchase and security lending transactions is accrued over the duration of the agreements. The Group is also party to reverse repurchase agreements under which financial assets are purchased from a counterparty, subject to a simultaneous agreement to return these financial assets at a certain later date, at an agreed price. If substantially all of the risks and rewards of the securities remain with the counterparty over the entire lifetime of the agreement of the transaction, the securities concerned are not recognized as financial assets of the Group. The amounts of cash disbursed are recorded under financial investments, except for transactions arising from banking activities, which are recorded as separate assets. Interest income on reverse repurchase agreements is accrued over the duration of the agreements. Page 21 Consolidated financial statements___________________________________________________Half Year 2012 1.8. Assets backing liabilities arising from contracts where the financial risk is borne by policyholders Assets backing liabilities arising from insurance or investment contracts where the financial risk is borne by policyholders are presented in a separate aggregate of the balance sheet so that they are shown in a symmetrical manner to the corresponding liabilities. This presentation is considered more relevant for the users and consistent with the liquidity order recommended by IAS 1 for financial institutions, since the risks are borne by policyholders, whatever the type of assets backing liabilities (investment in real estate properties, debt instruments or equity instruments, etc.). Details of these assets are provided in the notes. 1.9. Derivative instruments Derivatives are initially recognized at fair value at purchase date and are subsequently re-measured at their fair value. Unrealized gains and losses are recognized in the statement of income unless they relate to a qualifying hedge relationship as described below. The Group designates certain derivatives as either: (i) hedging of the fair value of recognized assets or liabilities or of a firm commitment (fair value hedge); or (ii) hedging of highly probable expected future transactions (cash flow hedge); or (iii) hedging of net investments in foreign operations. The Group documents, at inception, the hedge relationship, as well as its risk management hedging objectives and strategy. The Group also documents the hedge effectiveness, both at inception and on an ongoing basis, indicating the actual or expected efficiency level of the derivatives used in hedging transactions in offsetting changes in the fair values or cash flows of hedged underlying items. Fair value hedge Changes in the fair value of derivatives designated and qualifying as fair value hedge are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability. Therefore, the gain or loss relating to any ineffective portion is directly recognized in the income statement. Cash flow hedge The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedge is recognized in shareholders’ equity. The gain or loss relating to any ineffective portion is recognized in the income statement. Cumulative gain or loss in shareholders’ equity is recycled in the income statement when the hedged underlying item impacts the profit or loss for the period (for example when the hedged future transaction is recognized). When a hedging instrument reaches its maturity date or is sold, or when a hedge no longer qualifies for hedge accounting, the cumulative gains or losses in shareholders’ equity are held until the initially hedged future transaction ultimately impacts the income statement. Net investment hedge The accounting of net investments in foreign operations hedge is similar to the accounting of cash flow hedge. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in shareholders’ equity; the gain or loss relating to the ineffective portion is recognized in the income statement. Cumulative gains and losses in shareholders’ equity impact the income statement only on disposal of the foreign operations. Derivatives not qualifying for hedge accounting Changes in the fair value of all other derivative instruments that do not qualify for hedge accounting are recognized in the income statement. The Group holds financial investments that include embedded derivatives. Such embedded derivatives are separately recorded and measured at fair value through profit or loss if the impact is deemed material. For the statement of financial position presentation, derivatives are presented alongside with the underlying assets or liabilities for which they are used, regardless of whether these derivatives meet the criteria for hedge accounting. 1.10. Assets / liabilities held for sale and assets / liabilities including discontinued operations These comprise assets, particularly buildings or operations, intended to be sold or discontinued within twelve months. Subsidiaries held for sale remain within the scope of consolidation until the date on which the Group loses effective control. The assets and activities (assets and liabilities) concerned are measured at the lower of net carrying value and fair value net of selling costs. They are presented in separate asset and liability items on the balance sheet. The liabilities of subsidiaries (excluding shareholders’ equity) held for sale are entered separately on the liability side of the consolidated balance sheet, with no netting against assets. Page 22 Consolidated financial statements___________________________________________________Half Year 2012 In the event of a discontinuation of operations representing either a business line, a main and distinct geographical region or a subsidiary acquired solely with a view to reselling, their after-tax contribution is stated on a separate line of the income statement. For comparison purposes, the same applies to the presentation of income statements relating to previous periods that are included in the financial statements. This separate line also includes the post-tax gain / loss recognized on the disposal of the discontinued operation at the date of loss of control. Details on information presented in the statement of financial position and statement of income are provided in the notes to the consolidated financial statements. 1.11. Cash and cash equivalents Cash comprises cash on hand and demand deposits while cash equivalents are short-term, liquid investments that are readily convertible to cash and which are subject to low volatility. 1.12. Share capital and shareholders’ equity 1.12.1. Share capital Ordinary shares are classified in shareholders’ equity when there is no obligation to transfer cash or other assets to the holders. Additional costs (net of tax) directly attributable to the issue of equity instruments are shown in shareholders’ equity as a deduction to the proceeds. 1.12.2. Undated subordinated debt Undated subordinated debt and any related interest charges are classified either in shareholders’ equity (in the “other reserves” aggregate) or as liabilities depending on contract clauses without taking into consideration the prospect of redemption under economic constraints (e.g. step up clauses or shareholders’ expectations). 1.12.3. Compound financial instruments Any financial instrument issued by the Group with an equity component (for example an option granted to convert the debt instrument into an equity instrument of the company) and a liability component (a contractual obligation to deliver cash) is classified separately on the liability side of the balance sheet with the equity component reported in Group shareholders’ equity (in the “other reserves” aggregate). Gains and losses relating to redemptions or refinancing of the equity component are recognized as changes to shareholders’ equity. 1.12.4. Treasury shares Treasury shares and any directly related costs are recorded as a deduction to consolidated shareholders’ equity. Where treasury shares are subsequently sold or reissued, any consideration received is included in consolidated shareholders’ equity, net of any directly related costs and tax effects. However, treasury shares held by controlled investment funds backing contracts where the financial risk is borne by policyholders are not deducted as all risks and income resulting from holding these shares are attributable to policyholders. 1.13. Liabilities arising from insurance and investment contracts 1.13.1. Contracts classification The Group issues contracts that transfer an insurance risk or a financial risk or both. Insurance contracts, including assumed reinsurance contracts, are contracts that carry significant insurance risks. Such contracts may also transfer financial risk from the policyholders to the insurer. Investment contracts are contracts that carry financial risk with no significant insurance risk. A number of insurance and investment contracts contain discretionary participating features. These features entitle the contract holder to receive additional benefits or bonuses on top of these standard benefits: Page 23 Consolidated financial statements___________________________________________________Half Year 2012 they are likely to represent a significant portion of the overall contractual benefits; • their amount or timing is contractually at the discretion of the Group; and • they are contractually based on the performance of a group of contracts, the investment returns of a financial asset portfolio or the company profits, a fund or another entity that issues the contract. In some insurance or investment contracts, the financial risk is borne by policyholders. Such contracts are usually unit-linked contracts. The Group classifies its insurance and investment contracts into six categories: • liabilities arising from insurance contracts, • liabilities arising from insurance contracts where the financial risk is borne by policyholders, • liabilities arising from investment contracts with discretionary participating features, • liabilities arising from investment contracts with no discretionary participating features, • liabilities arising from investment contracts with discretionary participating features where the financial risk is borne by policyholders; these relate to unit-linked contracts or multi-funds contracts containing a non-unit-linked fund with discretionary participating features, liabilities arising from investment contracts with no discretionary participating features where the financial risk is borne by policyholders. 1.13.2. Insurance contracts and investment contracts with discretionary participating features According to IFRS 4, recognition and derecognition are based on the AXA accounting policies existing prior to IFRS and are described below, except for the elimination of equalization provisions, selective changes as permitted by IFRS 4 (see below), the extension of shadow accounting and except where IAS 39 applies. The main characteristics of the accounting principles applied prior to IFRS and retained after the conversion to IFRS are as follows: Reserves must be sufficient, Life reserves cannot be discounted using a discount rate higher than prudently estimated expected assets yield, Acquisition costs are deferred to the extent recoverable and amortized based on the estimated gross profits emerging over the life of the contracts, Claims reserves represent estimated ultimate costs. Post claims reserves are generally not discounted, except in limited cases. Pre-claims reserves Unearned premiums reserves represent the prorated portion of written premiums that relates to unexpired risks at the closing date. For traditional life insurance contracts (that is, contracts with significant mortality or morbidity risk), the future policy benefits reserves are calculated on a prospective basis according to each country regulation provided methods used are consistent with the Group’s policies and using assumptions on investment yields, morbidity/mortality and expenses. Changes in reserves are booked if there are impacts caused by a change in the mortality table. Future policy benefits reserves relating to investment contracts with discretionary participation features (previously called “savings contracts” in AXA’s accounting principles) that carry low mortality and morbidity risk are calculated using a prospective approach based on discount rates set at inception (similar to the retrospective approach, i.e. “account balance” methodology). The discount rates used by AXA are less or equal to the expected future investment yields (assessed on prudent basis). Part of the policyholders participation reserve is included in future policy benefits reserves, according to contractual clauses. For insurance and investment contracts with discretionary participating features, if the contracts include a minimum guaranteed rate, any potential reserve deficiency caused by insufficient future investment return is immediately booked. Except when these guarantees are covered by a risk management program using derivative instruments (see next paragraph), guaranteed minimum benefits reserves relating to contracts where the financial risk is borne by policyholders (insurance contracts because they include such guarantees or investment contracts with discretionary participating features), are build over the life of the contract based on a prospective approach: the present value of future benefit obligations to be paid to policyholders in relation to these guarantees is estimated on the basis of reasonable scenarios. These scenarios are based on assumptions including investment returns, volatility, surrender and mortality rates. This present value of future benefit obligations is reserved as fees are collected over the life of the contracts. Page 24 Consolidated financial statements___________________________________________________Half Year 2012 Some guaranteed benefits such as Guaranteed Minimum Death or Income Benefits (GMDB or GMIB), or certain guarantees on return proposed by reinsurance treaties, are covered by a risk management program using derivative instruments. In order to minimize the accounting mismatch between liabilities and hedging derivatives, AXA has chosen to use the option allowed under IFRS 4.24 to re-measure its provisions: this revaluation is carried out at each accounts closing based on guarantee level projections and takes into account interest rates and other market assumptions. The liabilities revaluation impact in the current period is recognized through income, symmetrically with the impact of the change in value of hedging derivatives. This change in accounting principles was adopted on the first time application of IFRS on January 1, 2004 for contracts portfolios covered by the risk management program at that date. Any additional contracts portfolios covered by the risk management program after this date are valued on the same terms as those that applied on the date the program was first applied. Post claims reserves Claims reserves (life and non life contracts) The purpose of claims reserves is to cover the ultimate cost of settling an insurance claim. Claims reserves are not discounted, except when relating to disability annuities. Claims reserves include the claims incurred and reported, claims incurred but not reported (IBNR) as well as claim handling costs. Claims reserves are based on historical claim data, current trends, and actual payment patterns for all insurance business lines as well as expected changes in inflation, regulatory environment or anything else that could impact amounts to be paid. Shadow accounting and Deferred policyholders Participation Asset (DPA) or Liability (DPL) In compliance with IFRS 4 option, shadow accounting is applied to insurance and investment contracts with discretionary participating features. Shadow accounting is applied to technical liabilities, acquisition costs and value of business in force to take into account unrealized gains or losses on insurance liabilities or assets in the same way as it is done for a realized gain or loss of invested assets. When unrealized gains or losses are recognized, a deferred participating liability (DPL) or asset (DPA) is recorded. The DPL or DPA corresponds to the discretionary participation available to the policyholders and is generally determined by applying on the basis of estimated participation of policyholders in unrealized gains and losses and any other valuation difference with the local contractual basis. Jurisdictions where participating business is significant are Switzerland (for example “legal quote” for group insurance policies), Germany and France where minimum are set to respectively 90%, 90% and 85% of a basis which may include not only financial income but also other components such as in Germany or Switzerland. Participating business is less developed in the United States or in Japan. The estimated discretionary participating feature of such contracts is fully recognized in the liabilities. As a consequence, there is no component recognized as an equity component and AXA does not need to ensure the liability recognized for the whole contract is not less than the amount that would result from applying IAS 39 to the guaranteed element. When a net unrealized loss (unrealized change in fair value, impairment, expense related, …) is accounted, a deferred participating asset (DPA) may be recognized only to the extent that it is highly probable that it can be charged to policyholders, by entity, in the future. This could be the case if the DPA can be offset against future participation either directly through deduction of the DPL from future capital gains or the DPL netted against value of businesses in force or indirectly through deduction of future fees on premiums or margins. Unrealized gains and losses on assets classified as trading or designated at fair value through profit and loss, along with any other entry impacting the income statement and generating a timing difference, are accounted in the income statement of the income with a corresponding shadow entry adjustment in the statement of income. The shadow accounting adjustments relating to unrealized gains and losses on assets available-for-sale (for which change in fair value is taken to shareholders’ equity) are booked through shareholders’ equity. Recoverability tests and liability adequacy test (LAT) Deferred participation When net deferred participation asset is recognized, the Group uses liquidity analyses performed by the entities to assess the capacity to hold assets showing unrealized loss position, if any, generating such debits. The Group then performs projections to compare the value of assets backing policyholders’ contracts with expected payments to be made to policyholders. Liability Adequacy Test In addition, at each balance sheet date, liability adequacy tests are performed in each consolidated entity in order to ensure the adequacy of the contract liabilities net of related DAC and VBI assets and deferred policyholders’ participation asset. To perform these tests, entities group contracts together according to how they have been acquired, are serviced and have their profitability measured. Entities use current best estimates of all future contractual cash flows as well as claims handling and administration expenses, and take into account guarantees and investment yields relating to assets backing these contracts. such tests are based on the intention and capacity of entities to hold financial assets according to various sets of scenarios, excluding the value of new business; Page 25 Consolidated financial statements___________________________________________________Half Year 2012 • they include projections of future investments sales according to estimated surrender patterns; and the extent to which resulting gains/losses may be allocated/charged to policyholders, i.e. profit sharing between policyholders and shareholders. These tests therefore include the capacity to charge estimated future losses to policyholders on the basis of the assessment of the holding horizon and potential realization of losses among unrealized losses existing at closing date. Contract specific risks (insurance risk, asset return risk, inflation risk, persistency, adverse selection, etc.) directly related to the contracts that might make the net liabilities inadequate, are also considered. Depending on the type of business, the future investment cash flows and discounting may be based on a best estimate and risk free rates, with corresponding participation, or in the case of Guaranteed Minimum Benefits, stochastic scenarios. Testing is performed either by a comparison of the reserve booked net of related assets (DAC, VBI, …) to a reserve directly by discounting the cash flows, or by ensuring that the discounted profit net of participation from release of the technical provisions exceeds net related assets. Any identified deficiency is charged to the income statement, initially by respectively writing off DPA, DAC or VBI, and subsequently by establishing a LAT provision for losses arising from the liability adequacy test for any amount in excess of DAC and VBI. For non-life insurance contracts, an unexpired risk provision is accounted for contracts on which the premiums are expected to be insufficient to cover expected future claims and claims expenses. Embedded derivatives in insurance and investment contracts with discretionary participating features Embedded derivatives that meet the definition of an insurance contract or correspond to options to surrender insurance contracts for a set amount (or based on a fixed amount and an interest rate) are not separately measured. All other embedded derivatives are bifurcated and booked at fair value when material (with change in fair value recognized through income statement) if they are not considered as closely related to the host insurance contract and/or do not meet the definition of an insurance contract. 1.13.3. Investment contracts with no discretionary participating features In accordance with IAS 39, these contracts are accounted for using “deposit accounting”, which mainly results in not recognizing the cash flows corresponding to premiums, benefits and claims in the statement of income (see “Revenue recognition” section below). These cash flows shall rather be recognized as deposits and withdrawals. This category includes mainly unit-linked contracts that do not meet the definition of insurance or investment contracts with discretionary participating features. For these unit-linked contracts, the liabilities are valued at current unit value, i.e. on the basis of the fair value of the financial investments backing those contracts at the balance sheet date together with Rights to future management fees, also known as Deferred origination costs (DOC, described in section 1.6.3). Unearned fees reserves Fees received at inception of an investment contract with no discretionary participating features to cover future services are recognized as liabilities and accounted in the income statement based on the same amortization pattern as the one used for deferred origination costs. 1.14. Reinsurance Transactions relating to reinsurance assumed and ceded are accounted in the balance sheet and income statement in a similar way to direct business transactions provided that these contracts meet the insurance contracts classification requirements and in agreement with contractual clauses. 1.15. Financing debt Financing debts issued to finance the solvency requirements of operational entities or to acquire a portfolio of contracts are isolated in a specific aggregate of the statement of financial position. 1.16. Other liabilities 1.16.1. Income taxes The half year income tax charge is based on the best estimate of the expected full year tax rate (if progressive tax rates, based on income levels) for each Group entity and for each tax category. Deferred tax assets and liabilities emerge from temporary differences between the accounting and fiscal values of assets and liabilities, and when applicable from tax loss carry forwards. Page 26 Consolidated financial statements___________________________________________________Half Year 2012 Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available to offset the temporary differences. The recoverability of deferred tax assets recognized in previous periods is re-assessed at each closing. In particular, a deferred tax liability is recognized for any taxable temporary difference relating to the value of shares in a consolidated company held, unless the Group controls at what date the temporary difference will reverse and it is probable that the temporary difference will not reverse in the foreseeable future. If a group company decides to sell its stake in another consolidated entity, the difference between the carrying value and the tax value of these shares for the company that holds them leads to the recognition of a deferred tax (including as part of a business combination when the Group as the buyer intends to sell or carry out internal restructuring of the shares following the acquisition). The same approach applies to dividend payments that have been voted or deemed likely, to the extent that a tax on dividends will be due. Deferred taxes for taxable temporary differences relating to tax deductible goodwill are recognized to the extent they do not arise from the initial recognition of goodwill. These deferred taxes are only released if the goodwill is impaired or if the corresponding consolidated shares are sold. The measurement of deferred tax liabilities and deferred tax assets reflects the expected tax impact, at the balance sheet date. That would follow the way the Group expects to recover or settle the carrying amount of its assets and liabilities. When income taxes are calculated at a different rate if dividends are paid, deferred taxes are measured at the tax rate applicable to undistributed profits. The income tax consequences of dividends are only accounted when a liability to pay the dividend is recognized. 1.16.2. Pensions and other post-retirement benefits Pensions and other post-retirement benefits include the benefits payable to AXA Group employees after they retire (retirement compensation, additional pension benefit, health insurance). In order to meet those obligations, some regulatory framework have allowed or enforced the set up of dedicated funds (plan assets). Defined contribution plans: payments are made by the employer to a third party (e.g. pension trusts). These payments free the employer of any further commitment, and the obligation to pay acquired benefits to the employees is transferred. The contributions paid by the employer are recorded as an expense in the income statement and no liability needs to be recorded once contributions are made. Defined benefit plans: an actuarial assessment of the commitments based on each plan’s internal rules is performed. The present value of the future benefits paid by the employer, known as the DBO (Defined Benefit Obligation), is calculated annually on the basis of long-term projections of rate of salary increase, inflation rate, mortality, staff turnover, pension indexation and remaining service lifetime. The amount recorded in the balance sheet for employee benefits is the difference between the Defined Benefit Obligation and the market value at the balance sheet date of the corresponding invested plan assets after adjustment at fair value. If the net result is negative, a provision is recorded under the provision for risks and charges heading. If the net result is positive, a prepaid asset is recorded in the balance sheet. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in shareholders’ equity (in the Statement of Comprehensive Income) in full in the period in which they occur. Similarly, any adjustment arising from the asset ceiling is recognized in shareholders’ equity. Unrecognized past service cost represents non-vested benefits on the date of a change in the amount of benefits following an amendment to the plan. It is amortized on a straight-line basis over the average vesting period. The impact in the income statement mainly relates to the service cost (annually accruing employee benefit) and the interest cost (unwinding of discount applied to the liability), reduced by the expected return on assets dedicated to the plan. Past service costs, settlements and curtailments also have an impact in the income statement. 1.16.3. Share-based compensation plans Group’s share-based compensation plans are predominantly equity-settled plans. All equity-settled share-based compensation plans granted after November 7, 2002 and not fully vested as of January 1, 2004 are accounted for at fair value at the date they were granted and the fair value is expensed over the vesting period. Cash-settled share-based compensation plans are recognized at fair value, which is remeasured at each balance sheet date with any change in fair value recognized in the statement of income. The AXA Shareplan issued under specific French regulatory framework includes two options: traditional and leveraged options (with an application subject to specific local regulations within the Group). The cost of the traditional option Shareplan is valued according to the specific guidance issued in France by the ANC (Autorité des Normes Comptables). The cost of the leveraged option plan is valued by taking into account the five-year lock-up period for the employees (as in the traditional plan) but adding the value of the advantage granted to the employees by enabling them to benefit from an institutional derivatives-based pricing instead of a retail pricing. Page 27 Consolidated financial statements___________________________________________________Half Year 2012 1.17. Provisions for risks, charges and contingent liabilities 1.17.1. Restructuring costs Restructuring provisions other than those that may be recognized on the balance sheet of an acquired company on the acquisition date are recorded when the Group has a present obligation evidenced by a binding sale agreement or a detailed formal plan whose main features are announced to those affected or to their representatives. 1.17.2. Other provisions and contingencies Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation, and when the provision can be reliably estimated. Provisions are not recognized for future operating losses. The same applies to contingent liabilities, except if identified at the time of a business combination (see section 1.3.2). Provisions are measured at management’s best estimate, at the balance sheet date, of the expenditure required to settle the obligation. 1.18. Revenue recognition 1.18.1. Gross written premiums Gross written premiums correspond to the amount of premiums written by insurance and reinsurance companies on business incepted in the year with respect to both insurance contracts and investment contracts with discretionary participating features, net of cancellations and gross of reinsurance ceded. For reinsurance, premiums are recorded on the basis of declarations made by the ceding company, and may include estimates of gross written premiums. 1.18.2. Fees and revenues from investment contracts with no discretionary participating features Amounts collected as premiums from investment contracts with no discretionary participating features are reported as deposits net of any loadings and policy fees. Revenues from these contracts consist of loadings and policy fees relating to underwriting, investment management, administration and surrender of the contracts during the period. Front-end fees collected corresponding to fees for future services are recognized over the estimated life of the contract (see “Unearned fees reserves” section 1.13.3). 1.18.3. Deposit accounting Investment contracts with no discretionary participating features fall within the scope of IAS 39. Deposit accounting applies to these contracts, which involves the following: • the Group directly recognizes the consideration received as a deposit financial liability rather than as revenues, • claims paid are recognized as withdrawals with no posting in the income statement apart from potential fees. 1.18.4. Unbundling The Group unbundles the deposit component of contracts when required by IFRS 4, i.e. when both the following conditions are met: • the Group can measure separately the “deposit” component (including any embedded surrender option, i.e. without taking into account the “insurance” component); the Group accounting methods do not otherwise require to recognize all obligations and rights arising from the “deposit” component. No such situation currently exists within the Group. In accordance with IFRS 4, the Group continues to use the accounting principles previously applied by AXA to insurance contracts and investment contracts with discretionary participating features. According to these principles, there are no situations in which all rights and obligations related to contracts are not recognized. Page 28 Consolidated financial statements___________________________________________________Half Year 2012 1.18.5. Change in unearned premiums reserves net of unearned revenues and fees Changes in unearned premium reserves net of unearned revenues and fees include both the change in the unearned premiums reserve reported as a liability (see “Unearned premiums reserves” in section 1.13.2) and the change in unearned revenues and fees. Unearned revenues and fees correspond to upfront charges for future services recognized over the estimated life of insurance and investment contracts with discretionary participating features (see “Unearned revenues reserves” in section 1.6.4) and investment contracts with no discretionary participating features (see section 1.13.3 “Unearned fees reserves”). 1.18.6. Net revenues from banking activities Net revenues from banking activities include all revenues and expenses from banking operating activities, including interest expenses not related to financing, banking fees, capital gains and losses on sales of financial assets, change in fair value of assets under fair value option and related derivatives. They exclude bank operating expenses and change in bad debts provisions, doubtful receivables or loans, which are recorded in the item “Bank operating expenses”. 1.18.7. Revenues from other activities Revenues from other activities mainly include: • commissions received and fees for services relating to asset management activities • insurance companies revenues from non insurance activities, notably commissions received on sales or distribution of financial products, and rental income received by real estate management companies. 1.18.8. Policyholders’ participation The half year policyholders’ participation charge is based on the best estimate of the planned full year distribution rate for each portfolio of contracts at each Group entity level. 1.18.9. Net investment result excluding financing expenses The net investment result includes: • investment income from investments from non banking activities, net of depreciation expense on real estate investments (depreciation expense relating to owner occupied properties is included in the “administrative expenses” aggregate); this item includes interest received calculated using the effective interest method for debt instruments and dividends received on equity instruments, investment management expenses (excludes financing debt expenses), • realized investment gains and losses net of releases of impairment following sales, • the change in unrealized gains and losses on invested assets measured at fair value through profit or loss, • the change in impairment of investments (excluding releases of impairment following sales). In respect of banking activities, interest income and expenses are included in the “Net revenue from banking activities” item (see section 1.18.6). 1.19. Subsequent events Subsequent events relate to events that occur between the balance sheet date and the date when the financial statements are authorized for issue: • such events lead to an adjustment of the consolidated financial statements if they provide evidence of conditions that existed at the balance sheet date, such events result in additional disclosures if indicative of conditions that arose after the balance sheet date, and if relevant and material. Page 29 Consolidated financial statements___________________________________________________Half Year 2012 Note 2 : Scope of consolidation 2.1. Consolidated companies 2.1.1. Main fully consolidated companies June 30, 2012 December 31, 2011 Parent and Holding Companies Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France AXA Parent company Parent company AXA Asia 100.00 100.00 100.00 100.00 AXA China 100.00 100.00 100.00 100.00 AXA France Assurance 100.00 100.00 100.00 100.00 Oudinot Participation 100.00 100.00 100.00 100.00 Société Beaujon 100.00 100.00 100.00 100.00 AXA Technology Services 99.99 99.99 99.99 99.99 United States AXA Financial, Inc. 100.00 100.00 100.00 100.00 AXA America Holding Inc. 100.00 100.00 100.00 100.00 United Kingdom Guardian Royal Exchange Plc 100.00 99.98 100.00 99.98 AXA UK Plc 100.00 99.98 100.00 99.98 AXA Equity & Law Plc 99.96 99.96 99.96 99.96 Asia/Pacific (excluding Japan) National Mutual International Pty Ltd 100.00 100.00 100.00 100.00 AXA Financial Services (Singapore) 100.00 100.00 100.00 100.00 AXA India Holding 100.00 100.00 100.00 100.00 Japan AXA Japan Holding 98.95 98.95 98.94 98.94 Germany Kölnische Verwaltungs AG für Versicherungswerte 100.00 100.00 100.00 100.00 AXA Konzern AG 100.00 100.00 100.00 100.00 AXA Beteiligungsgesellschaft mbH 100.00 100.00 100.00 100.00 Belgium AXA Holdings Belgium 100.00 100.00 100.00 100.00 Luxembourg AXA Luxembourg SA 100.00 100.00 100.00 100.00 Finance Solutions SARL 100.00 100.00 100.00 100.00 The Netherlands Vinci BV 100.00 100.00 100.00 100.00 Mediterranean and Latin American Region AXA Mediterranean Holding SA AXA Italia S.p.A. AXA Holding Maroc S.A. 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 AXA Turkey Holding A.S. 100.00 100.00 100.00 100.00 Page 30 Consolidated financial statements___________________________________________________Half Year 2012 June 30, 2012 December 31, 2011 Life & Savings and Property & Casualty Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France AXA France IARD AXA France Vie AXA Protection Juridique 99.92 99.77 98.51 99.92 99.77 98.51 99.92 99.77 98.51 99.92 99.77 98.51 United States AXA Equitable Life Insurance Company Mony Life Insurance Company AXA Financial (Bermuda) Ltd 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 United Kingdom AXA Insurance UK Plc AXA PPP Healthcare Limited Bluefin Group Limited AXA Isle of Man Limited AXA Wealth Limited Architas Multi-Manager Limited 100.00 100.00 100.00 100.00 100.00 100.00 99.98 99.98 99.98 99.98 99.98 99.98 100.00 100.00 100.00 100.00 100.00 100.00 99.98 99.98 99.98 99.98 99.98 99.98 Ireland AXA Insurance Limited AXA Life Europe Limited AXA Reinsurance Ireland Limited 100.00 100.00 100.00 99.98 100.00 100.00 100.00 100.00 100.00 99.98 100.00 100.00 Asia/Pacific (excluding Japan) AXA Life Insurance Singapore AXA China Region Limited AXA General Insurance Hong Kong Ltd. AXA Insurance Singapore PT AXA Life Indonesia MLC Indonesia AXA Affin General Insurance Berhad (a) 100.00 100.00 100.00 100.00 100.00 100.00 42.41 100.00 100.00 100.00 100.00 100.00 100.00 42.41 100.00 100.00 100.00 100.00 100.00 100.00 42.41 100.00 100.00 100.00 100.00 100.00 100.00 42.41 Japan AXA Life Insurance 100.00 98.95 100.00 98.94 Germany AXA Versicherung AG AXA Art AXA Lebenversicherung AG Pro Bav Pensionskasse Deutsche Aerzteversicherung AXA Krankenversicherung AG DBV-Winterthur Lebensversicherung AG Winsecura Pensionskasse AG Rheinisch-Westfälische Sterbekasse Lebensversicherung AG DBV Deutsche Beamten-Versicherung AG 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.74 99.74 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.74 99.74 100.00 100.00 Belgium Ardenne Prévoyante AXA Belgium SA Servis SA Servis Life SA Les Assurés Réunis Merged with AXA Belgium SA 100.00 100.00 100.00 - 99.93 100.00 100.00 100.00 - 99.93 100.00 100.00 100.00 100.00 99.93 100.00 100.00 100.00 100.00 99.93 Luxembourg AXA Assurances Luxembourg AXA Assurances Vie Luxembourg 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Mediterranean and Latin American Region AXA Vida, S. A. de Seguros (Spain) AXA Aurora Vida, S.A. de Seguros (Spain) AXA Seguros Generales, S. A. (Spain) AXA Salud, S. A. (Spain) AXA Interlife (Italy) AXA Assicurazioni e Investimenti (Italy) AXA MPS Vita (Italy) 99.82 99.96 99.90 99.90 100.00 100.00 50.00 + 1 voting right 99.82 99.78 99.90 99.90 99.99 99.99 50.00 99.82 99.82 99.90 99.90 100.00 100.00 50.00 + 1 voting right 99.82 99.82 99.90 99.90 99.99 99.99 50.00 AXA MPS Danni (Italy) AXA Portugal Companhia de Seguros SA AXA Portugal Companhia de Seguros de Vida SA AXA Assurance Maroc AXA Al Amane Assurance (Morocco) AXA Hayat ve Emeklilik A.S. (Turkey) AXA Sigorta AS (Turkey) AXA Cooperative Insurance Company (Gulf) AXA Insurance (Gulf) B.S.C.c. AXA Insurance A.E. (Greece) AXA Seguros S.A. de C.V. (Mexico) 50.00 + 1 voting right 99.73 95.09 100.00 100.00 100.00 72.59 50.00 50.00 99.98 99.94 50.00 99.49 94.89 100.00 100.00 100.00 72.59 34.00 50.00 99.98 99.94 50.00 + 1 voting right 99.73 95.09 100.00 100.00 100.00 72.59 50.00 50.00 99.89 99.94 50.00 99.49 94.89 100.00 100.00 100.00 72.59 34.00 50.00 99.89 99.94 Switzerland AXA Life (previously Winterthur Life) AXA-ARAG Legal Assistance AXA Insurance (previously Winterthur Swiss Insurance P&C) 100.00 66.67 100.00 100.00 66.67 100.00 100.00 66.67 100.00 100.00 66.67 100.00 Central and Eastern Europe AXA Czech Republic Pension Funds AXA Czech Republic Insurance AXA Hungary AXA Poland AXA Poland Pension Funds AXA Slovakia AXA Ukraine 99.99 100.00 100.00 100.00 100.00 100.00 50.17 99.99 100.00 100.00 100.00 100.00 100.00 50.17 99.99 100.00 100.00 100.00 100.00 100.00 50.00 99.99 100.00 100.00 100.00 100.00 100.00 50.00 Direct (b) Avanssur (France and Poland) Kyobo AXA General Insurance Co. Ltd. (South Korea) AXA Non Life Insurance Co. Ltd. (Japan) Touring Assurances SA (Belgium) Minority interests buyout 100.00 98.67 100.00 100.00 100.00 98.67 98.95 100.00 100.00 94.13 100.00 100.00 100.00 94.13 98.94 100.00 Page 31 Consolidated financial statements___________________________________________________Half Year 2012 Hilo Direct SA de Seguros y Reaseguros (Spain) Quixa S.p.A (Italy) Seguro Directo Gere Companhia de Seguros SA (Portugal) 100.00 100.00 100.00 100.00 99.99 100.00 100.00 100.00 100.00 100.00 99.99 100.00 (a) AXA Group has a full control given the shareholders' agreements. (b) UK Direct activities are held by AXA Insurance UK Plc. June 30, 2012 December 31, 2011 International Insurance (entities having worldwide activities) Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests AXA Corporate Solutions Assurance (sub-group) AXA Global P&C (previously AXA Cessions) AXA Global Life (previously Saint-Georges Ré) AXA Assistance SA (sub group) Portman Insurance Ltd. (previously AXA Global Risks UK) Colisée RE (previously AXA RE) AXA Corporate Solutions Life Reinsurance Company 98.75 100.00 100.00 100.00 100.00 100.00 100.00 98.75 100.00 100.00 100.00 100.00 100.00 100.00 98.75 100.00 100.00 100.00 100.00 100.00 100.00 98.75 100.00 100.00 100.00 100.00 100.00 100.00 June 30, 2012 December 31, 2011 Asset Management (entities having worldwide activities) Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests AXA Investment Managers (sub group) AllianceBernstein (sub group) (a) 95.83 63.49 95.82 63.49 95.55 64.60 95.54 64.60 (a) AXA also holds indirectly 100% of the general partner of AllianceBernstein L.P. June 30, 2012 December 31, 2011 Banking Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France AXA Banque AXA Banque Financement 100.00 65.00 99.89 64.93 100.00 65.00 99.89 64.93 Germany AXA Bank AG 100.00 100.00 100.00 100.00 Belgium AXA Bank Europe (sub group) 100.00 100.00 100.00 100.00 June 30, 2012 December 31, 2011 Other Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France CFP Management (a) 100.00 100.00 100.00 100.00 (a) Formerly Compagnie Financière de Paris Consolidated investments and investment funds As of June 30, 2012, consolidated investment funds represented total invested assets of €104 billion (€96 billion at the end of 2011), corresponding to 236 investment funds mainly in France, Japan and Germany and in majority relating to the Life & Savings segment. As of June 30, 2012, the 21 consolidated real estate companies corresponded to total invested assets of €6,448 million (€6,689 million at the end of 2011), mainly in France and Germany. In most investment funds (particularly open-ended investment funds), minority interests do not meet the definition of shareholders’ equity. They are therefore presented as liabilities under “Minority interests of controlled investment funds and puttable instruments held by minority interest holders”. As of June 30, 2012, minority interests in controlled investment funds amounted to €5,406 million (€3,896 million as of December 31, 2011). Page 32 Consolidated financial statements___________________________________________________Half Year 2012 2.1.2. Proportionately consolidated companies June 30, 2012 December 31, 2011 Life & Savings and Property & Casualty Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France Natio Assurances 50.00 49.96 50.00 49.96 2.1.3. Main investments in companies accounted for using the equity method Companies accounted for using the equity method listed below exclude investment funds and real estate entities: June 30, 2012 December 31, 2011 Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France Neuflize Vie (previously NSM Vie) 39.98 39.98 39.98 39.98 Asia/Pacific Philippines AXA Life Insurance Corporation Krungthai AXA Life Insurance Company Ltd AXA Minmetals Assurance Co Ltd (a) PT AXA Mandiri Financial Services 45.00 50.00 51.00 49.00 45.00 50.00 51.00 49.00 45.00 50.00 51.00 49.00 45.00 50.00 51.00 49.00 Bharti AXA Life 26.00 26.00 26.00 26.00 Russia Reso Garantia (RGI Holdings B.V.) (b) 39.34 39.34 39.34 39.34 Asset Management Kyobo AXA Investment Managers Company Limited 50.00 47.91 50.00 47.77 (a) \"AXA Minmetals Assurance Co Ltd\" is accounted for using the equity method as its shareholders' agreements don't provide the Group with controlling power. (b) AXA's group share of interest in operating unit of Reso Garantia is 36.68% Investment funds and real estate entities accounted for using the equity method. As of June 30, 2012, real estate companies accounted for using the equity method represented total assets of €281 million (€306 million at the end of 2011) and investment funds accounted for using the equity method represented total assets of €3,697 million (€3,829 million at the end of 2011), mainly in the United States, Germany, Belgium, Switzerland and the United Kingdom. 2.2. Consolidated entities relating to specific operations Acacia The Acacia SPV was consolidated within the operations of AXA France Life & Savings. This structure was set up in order to improve AXA France Life & Savings assets / liabilities adequacy ratio by ceding receivables resulting from eligible insurance operations against cash. This program was stopped in April 2012 and is no longer consolidated in AXA France Life & Savings operations. Arche Finance In 2008, AXA France invested in Arche Finance, an investment vehicle dedicated to credit investment, which entered the scope of consolidation in June 2008 with a loan of €200 million. Held assets amounted to €1,202 million as of June 30, 2012. Hordle In 2009, AXA set up a Group financing and cash management company which benefited from a loan of £673 million. Page 33 Consolidated financial statements___________________________________________________Half Year 2012 Note 3 : Segment information Given the activities of AXA, the operating results are presented on the basis of five operating business segments: Life & Savings, Property & Casualty, International Insurance, Asset Management and Banking. An additional \"Holding companies\" segment includes all non-operational activities. The financial information relating to AXA's business segments and holding company activities reported to the Board of Directors twice a year is consistent with the presentation provided in the consolidated financial statements. The AXA's Chief Executive Officer and the Deputy Chief Executive Officer are both members of the Board of Directors. They are assisted by a Management Committee in the day-to-day operational management of the Group and by an Executive Committee to consider Group strategy. The Group has built up an organization by Global business lines for both Life & Savings and Property & Casualty in order to improve the speed and effectiveness of the organization and further leverage its size. The Life & Savings Global business line, as part of its role to define a common strategy has set the following priorities: accelerate diversification into Protection and Health; enhance profitability in Savings business; prioritize investments for growth; foster business efficiency. The Property & Casualty Global business line is responsible for: defining common Property & Casualty strategy; accelerating efficiency gains; building common platforms; leveraging global technical expertise. Life & Savings: AXA offers a broad range of Life & Savings products including individual and group savings retirement products, life and health products. They comprise traditional term and whole life insurance, immediate annuities and investment products (including endowments, savings-related products, such as variable life and variable annuity products). The Life & Savings segment aggregates nine geographical operating components: France, the United States, the United Kingdom, Japan, Germany, Switzerland, Belgium, the Mediterranean and Latin American Region, and other countries. Property & Casualty: This segment includes a broad range of products including mainly motor, household, property and general liability insurance for both personal and commercial customers (commercial customers being mainly small to medium- sized companies). In some countries, this segment includes health products. The Property & Casualty segment aggregates seven geographical operating components (France, Germany, the United Kingdom and Ireland, Switzerland, Belgium, the Mediterranean and Latin American Region, and Other countries) and one operating component for the Direct business (previously included within countries and regions and now reported as a separate reporting unit). International Insurance: This segment’s operations include insurance products that specifically relate to AXA Corporate Solutions Assurance. These products provide coverage to large national and international corporations. This segment also includes assistance activities, life reinsurance activities in run-off primarily AXA Corporate Solutions Life Reinsurance Company, and the group Property & Casualty run-off managed by AXA Liabilities Managers, including risks underwritten by Colisée RE (ex AXA RE) relating to 2005 and prior accident years. Years after 2005 are covered by a treaty ceding 100% of the reinsurance business to PartnerRe (ex Paris Ré). It also includes reinsurance activity managed by AXA Global Life and AXA Global P&C (ex AXA Cessions), which write reinsurance treaties of AXA entities after a selection of reinsurers. AXA Global P&C activity is mainly driven by its Property pool which provides AXA entities with cover on natural catastrophes. Activities from both global lines of business are reported in International Insurance. The Asset Management segment includes diversified asset management (including investment fund management) and related services offered by AXA Investment Managers and AllianceBernstein entities, which are provided to a variety of institutional investors and individuals, including AXA’s insurance companies. The Banking segment includes banking activities (mainly retail banking, mortgages loans, savings) conducted primarily in France, Belgium, Switzerland, Germany and Central & Eastern Europe (Hungary, Slovakia and the Czech Republic). The Holding companies segment (that includes all non-operational activities), also includes some investment vehicles including certain Special-Purpose Entities (SPE). Page 34 Consolidated financial statements___________________________________________________Half Year 2012 The inter-segment eliminations include only operations between entities from different segments. They mainly relate to reinsurance treaties, assistance guarantees recharging, asset management fees and interests on loans within the Group. In this document, “Insurance” covers the three insurance segments: Life & Savings, Property & Casualty and International Insurance. The term “Financial Services” includes both the Asset Management segment and the Banking segment. Page 35 Consolidated financial statements___________________________________________________Half Year 2012 3.1. Segmental consolidated statement of income June 30, 2012 Life & Savings Property & Casualty International Insurance Asset Management Banking Holding companies (a) Inter- segment eliminations Gross written premiums 27,903 16,363 1,759 (276) Fees and charges relating to investment contracts with no participating features 164 Revenues from insurance activities 28,067 16,363 1,759 (276) Net revenues from banking activities 233 0 (10) Revenues from other activities 575 28 146 1,734 2 (215) Revenues 28,642 16,391 1,904 1,734 236 0 (501) Change in unearned premiums net of unearned revenues and fees (1,353) (2,427) (276) 94 Net investment income 7,036 1,034 96 1 (1) 265 (408) Net realized gains and losses relating to investments at cost and at fair value through shareholders'equity Net realized gains and losses and change in fair value of other investments at fair value through profit or loss (b) of which change in fair value of assets with financial risk borne by policyholders 496 6,659 6,227 189 (19) 7 27 (2) 21 80 (139) 0 2 (3) Change in investments impairment (269) (102) (5) (1) (14) Net investment result excluding financing expenses 13,922 1,103 125 19 (1) 192 (406) Technical charges relating to insurance activities (35,397) (9,272) (1,163) 135 Net result from outward reinsurance (106) (538) 5 66 Bank operating expenses (64) (0) Acquisition costs (1,712) (2,402) (189) 10 Amortization of the value of purchased business in force (47) Administrative expenses (1,386) (1,308) (198) (1,305) (205) (379) 152 Change in tangible assets impairment (0) Change in goodwill impairment and other intangible assets impairment (20) (47) (0) Other income and expenses (79) 4 5 (128) 22 64 (64) Other operating income and expenses (38,747) (13,563) (1,539) (1,433) (247) (316) 300 Income from operating activities before tax 2,464 1,504 215 319 (12) (124) (514) Income arising from investments in associates – Equity method 26 15 0 (0) 2 Financing debts expenses (77) (3) (1) (22) (9) (658) 481 Net income from operating activities before tax 2,413 1,516 213 297 (21) (780) (33) Income tax (595) (483) (77) (84) 12 274 33 Net operating income 1,818 1,033 137 213 (8) (506) Result from discontinued operations net of tax Net consolidated income after tax 1,818 1,033 137 213 (8) (506) Split between : Net consolidated income - Group share 1,797 1,017 135 152 (9) (506) Net consolidated income - Minority interests 21 16 1 61 1 (0) (a) Includes SPEs. (b) Includes realized and unrealized forex gains and losses relating to investments at cost and at fair value through shareholders'equity. Page 36 (in Euro million) TOTAL 45,749 164 45,913 224 2,268 48,405 (3,962) 8,023 770 6,550 6,224 (390) 14,953 (45,696) (572) (64) (4,293) (47) (4,630) (0) (67) (175) (55,544) 3,852 42 (289) 3,605 (919) 2,687 2,687 2,586 101 Consolidated financial statements___________________________________________________Half Year 2012 June 30, 2011 Restated (a) Life & Savings Property & Casualty International Insurance Asset Management Banking Holding companies (b) Inter- segment eliminations Gross written premiums 27,037 15,502 1,695 (276) Fees and charges relating to investment contracts with no participating features 182 Revenues from insurance activities 27,220 15,502 1,695 (276) Net revenues from banking activities 272 0 (26) Revenues from other activities 659 38 136 1,823 3 (209) Revenues 27,879 15,540 1,831 1,823 275 0 (511) Change in unearned premiums net of unearned revenues and fees (1,190) (2,393) (241) 97 Net investment income 6,396 1,041 134 16 (1) 348 (351) Net realized gains and losses relating to investments at cost and at fair value through shareholders'equity Net realized gains and losses and change in fair value of other investments at fair value through profit or loss (c) of which change in fair value of assets with financial risk borne by policyholders 1,317 3,777 3,261 258 55 9 (6) (4) (3) 780 (249) 0 15 (5) Change in investments impairment (151) (91) (4) (134) Net investment result excluding financing expenses 11,338 1,263 132 9 (1) 744 (336) Technical charges relating to insurance activities (30,875) (8,785) (1,029) 113 Net result from outward reinsurance (65) (469) (111) 74 Bank operating expenses (44) 0 Acquisition costs (a) (1,889) (2,319) (176) 11 Amortization of the value of purchased business in force (113) Administrative expenses (1,869) (1,235) (190) (1,391) (238) (283) 160 Change in tangible assets impairment (1) 0 (0) Change in goodwill impairment and other intangible assets impairment (16) (40) (1) Other income and expenses (9) 0 2 (104) 15 41 (35) Other operating income and expenses (34,836) (12,848) (1,504) (1,496) (269) (241) 322 Income from operating activities before tax 3,191 1,561 218 337 5 503 (428) Income arising from investments in associates – Equity method 26 6 0 (0) Financing debts expenses (48) (3) (4) (17) (9) (676) 437 Net income from operating activities before tax 3,168 1,564 213 320 (4) (173) 9 Income tax (a) (620) (429) (73) (91) 3 243 (9) Net operating income 2,549 1,135 140 229 (0) 69 Result from discontinued operations net of tax 6 93 Net consolidated income after tax 2,555 1,228 140 229 (0) 69 Split between : Net consolidated income - Group share 2,471 1,212 139 160 (1) 33 Net consolidated income - Minority interests 83 17 1 69 1 37 (a) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (b) Includes SPEs. (c) Includes realized and unrealized forex gains and losses relating to investments at cost and at fair value through shareho lders'equity. Page 37 (in Euro million) TOTAL 43,959 182 44,141 246 2,449 46,836 (3,727) 7,582 2,360 3,588 3,257 (380) 13,149 (40,577) (571) (44) (4,373) (113) (5,045) (1) (57) (91) (50,872) 5,387 31 (320) 5,098 (976) 4,122 99 4,221 4,013 208 Consolidated financial statements___________________________________________________Half Year 2012 Note 4 : Assets and liabilities held for sale including discontinued operations 4.1. Main Half Year 2012 transactions AXA BANK SWITZERLAND AXA Bank Switzerland closed its operations on February, 29 2012 following the transfer of its customer portfolio to Bank zweiplus on January 1, 2012. The one-off costs associated with the closure of the Swiss branch booked as of December 31, 2011 amounted to €4 million. The costs of the 2012 residual activity were €1 million. Related assets and liabilities (€189 million) were classified as held for sale at December 31, 2011. “VIE POPULAIRE” PORTFOLIO Belgium Life & Savings agreed to sell its “Vie Populaire” portfolio to DELA. The deal, which is subject to regulatory approvals from the Netherland National Bank and the Belgium National Bank, is expected to be closed before the end of 2012. Related assets and liabilities (€325 million) are classified as held for sale at June 30, 2012. 4.2. Main 2011 transactions CANADA On September 23, 2011, AXA completed the disposal of its Canadian operations in Property & Casualty and Life & Savings insurance to Intact Financial Corporation for a total cash consideration of CAD 2.6 billion (or ca. €1.9 billion). In addition, AXA is entitled to receive up to CAD 100 million (or ca. €72 million) in contingent considerations based on profitability metrics over a period of 5 years. The disposal of the Canadian operations led to a net capital gain of €902 million (or €956 million gross of tax) in AXA Group’s net income as of December 31, 2011. At June 30, 2012, the Company received €+68 million linked to the sale of Canadian operations in respect of contingent consideration based on profitability metrics. The statement of income of the Canadian operations disposed was as follows as of June 30, 2011: (in Euro million) June 30, 2011 Revenues 828 Change in unearned premiums net of unearned revenues and fees (44) Net investment result excluding financing expenses 96 Other operating income and expenses (756) Income from operating activities before tax 125 Income arising from investments in associates - Equity method 0 Financing debts expenses (0) Income from operating activities before tax 125 Income tax (26) Net operating income 99 Split between : Net consolidated income - Group share 99 Net consolidated income - Minority interests 0 Page 38 Consolidated financial statements___________________________________________________Half Year 2012 The statement of cash flows of the Canadian operations disposed was as follows as of June 30, 2011: (in Euro million) June 30, 2011 Net cash provided / (used) by operating activities 62 Net cash provided / (used) by investing activities (42) Net cash provided / (used) by financing activities (7) NET CASH PROVIDED BY DISCONTINUED OPERATIONS 14 Page 39 Consolidated financial statements___________________________________________________Half Year 2012 Note 5 : Investments Certain investment properties (see Note 1), available-for-sale investments, trading assets, instruments designated as at fair value through P&L and all derivatives are measured at fair value in the financial statements. In addition, this note also discloses the fair value of investment properties and financial assets held at cost. Principles applied in measuring fair value generally described in Note 1 are further detailed in Note 5.2 (investment in real estate properties) and 5.5 (financial assets recognized at fair value). 5.1. Breakdown of investments Each investment item is presented net of the effect of related hedging derivatives (IAS 39 qualifying hedges or economic hedges) except derivatives related to macro hedges shown separately. Insurance June 30, 2012 Other activities Total Fair value Carrying value % (value balance sheet) Fair value Carrying value % (value balance sheet) Fair value Carrying value Investment in real estate properties at amortized cost Investment in real estate properties designated as at fair value through profit or loss (a) Macro hedge and other derivatives 19,393 1,272 14,936 1,272 2.53% 0.22% 3,246 2,443 6.40% 22,639 1,272 17,379 1,272 Investment in real estate properties 20,665 16,208 2.74% 3,246 2,443 6.40% 23,911 18,651 Debt instruments held to maturity Debt instruments available for sale Debt instruments designated as at fair value through profit or loss (a) (b) Debt instruments held for trading 335,507 29,559 293 335,507 29,559 293 56.74% 5.00% 0.05% 7,137 55 209 7,137 55 209 18.71% 0.14% 0.55% 342,645 29,615 502 342,645 29,615 502 Debt instruments (at cost) that are not quoted in an active market (c) 5,940 5,831 0.99% 7,121 7,121 18.66% 13,061 12,952 Debt instruments 371,300 371,190 62.78% 14,523 14,523 38.06% 385,823 385,713 Equity instruments available for sale Equity instruments designated as at fair value through profit or loss (a) 11,647 6,063 11,647 6,063 1.97% 1.03% 2,024 418 2,024 418 5.31% 1.09% 13,671 6,480 13,671 6,480 Equity instruments held for trading 40 40 0.01% 40 40 Equity instruments 17,750 17,750 3.00% 2,442 2,442 6.40% 20,192 20,192 Non controlled investment funds available for sale Non controlled investment funds designated as at fair value through profit or loss (a) Non controlled investment funds held for trading 6,468 4,638 6,468 4,638 1.09% 0.78% 189 149 373 189 149 373 0.50% 0.39% 0.98% 6,657 4,787 373 6,657 4,787 373 Non controlled investment funds 11,106 11,106 1.88% 711 711 1.86% 11,817 11,817 Other assets designated as at fair value through profit or loss, held by controlled investment funds 5,598 5,598 0.95% 1 1 0.00% 5,598 5,598 Macro hedge and other derivatives 1,206 1,206 0.20% (2,094) (2,094) 5.49% (888) (888) Financial investments 406,959 406,850 68.81% 15,583 15,583 40.84% 422,542 422,433 Loans held to maturity Loans available for sale Loans designated as at fair value through profit or loss (a) Loans held for trading Loans at cost (d) Macro hedge and other derivatives 0 0 - 26,770 0 0 - 25,388 0.00% 0.00% - 4.29% - - - 21,300 8 - - - 20,120 8 - - - 52.73% 0.02% 0 0 - 48,070 8 0 0 - 45,508 8 Loans 26,771 25,389 4.29% 21,308 20,128 52.75% 48,079 45,517 Assets backing contracts where the financial risk is borne by policyholders 142,850 142,850 24.16% 142,850 142,850 INVESTMENTS 597,245 591,296 100.00% 40,137 38,154 100.00% 637,382 629,450 Investments (excluding those backing contracts where the financial risk is borne by policyholders) 454,395 448,446 75.84% Life & Savings Property & Casualty 390,749 55,438 385,515 54,718 65.20% 9.25% International Insurance 8,209 8,214 1.39% (a) Use of fair value option. (b) Includes notably assets measured at fair value under the fair value option (c) Eligible to the IAS 39 Loans and Receivables measurement category (d) Mainly relates to mortgage loans and policy loans. Page 40 (in Euro million) % (value balance sheet) 2.76% 0.20% 2.96% 54.44% 4.70% 0.08% 2.06% 61.28% 2.17% 1.03% 0.01% 3.21% 1.06% 0.76% 0.06% 1.88% 0.89% 0.14% 67.11% 0.00% 0.00% - 7.23% 0.00% 7.23% 22.69% 100.00% Consolidated financial statements___________________________________________________Half Year 2012 Insurance December 31, 2011 Other activities Total Fair value Carrying value % (value balance sheet) Fair value Carrying value % (value balance sheet) Fair value Carrying value Investment in real estate properties at amortized cost Investment in real estate properties designated as at fair value through profit or loss (a) Macro hedge and other derivatives 19,087 1,243 14,818 1,243 2.60% 0.22% 3,329 2,574 7.30% 22,417 1,243 17,392 1,243 Investment in real estate properties 20,330 16,061 2.82% 3,329 2,574 7.30% 23,660 18,635 Debt instruments held to maturity Debt instruments available for sale Debt instruments designated as at fair value through profit or loss (a) (b) Debt instruments held for trading 325,510 25,775 188 325,510 25,775 188 57.20% 4.53% 0.03% 8,045 72 29 8,045 72 29 22.81% 0.20% 0.08% 333,554 25,847 217 333,554 25,847 217 Debt instruments (at cost) that are not quoted in an active market (c) 6,740 6,789 1.19% 4,364 4,364 12.37% 11,104 11,153 Debt instruments 358,213 358,262 62.96% 12,510 12,510 35.47% 370,723 370,772 Equity instruments available for sale Equity instruments designated as at fair value through profit or loss (a) 11,649 5,391 11,649 5,391 2.05% 0.95% 1,903 425 1,903 425 5.40% 1.21% 13,552 5,816 13,552 5,816 Equity instruments held for trading 35 35 0.01% 35 35 Equity instruments 17,075 17,075 3.00% 2,328 2,328 6.60% 19,404 19,404 Non controlled investment funds available for sale Non controlled investment funds designated as at fair value through profit or loss (a) Non controlled investment funds held for trading 6,672 5,010 6,672 5,010 1.17% 0.88% 179 166 374 179 166 374 0.51% 0.47% 1.06% 6,851 5,176 374 6,851 5,176 374 Non controlled investment funds 11,682 11,682 2.05% 719 719 2.04% 12,401 12,401 Other assets designated as at fair value through profit or loss, held by controlled investment funds 5,413 5,413 0.95% 1 1 0.00% 5,413 5,413 Macro hedge and other derivatives 1,283 1,283 0.23% (2,500) (2,500) 7.09% (1,218) (1,218) Financial investments 393,666 393,715 69.19% 13,057 13,057 37.03% 406,723 406,772 Loans held to maturity Loans available for sale Loans designated as at fair value through profit or loss (a) Loans held for trading Loans at cost (d) Macro hedge and other derivatives - 0 - 26,107 - 0 - 25,050 - 0.00% - 4.40% - - - 21,406 12 - - - 19,621 12 - - - 55.64% 0.03% - 0 - 47,512 12 - 0 - 44,672 12 Loans 26,107 25,050 4.40% 21,418 19,634 55.68% 47,525 44,684 Assets backing contracts where the financial risk is borne by policyholders 134,230 134,230 23.59% 134,230 134,230 INVESTMENTS 574,333 569,056 100.00% 37,804 35,264 100.00% 612,137 604,321 Investments (excluding those backing contracts where the financial risk is borne by policyholders) 440,103 434,826 76.41% Life & Savings Property & Casualty 378,060 53,759 373,471 53,070 65.63% 9.33% International Insurance 8,285 8,285 1.46% (a) Use of fair value option. (b) Includes notably assets measured at fair value under the fair value option (c) Eligible to the IAS 39 Loans and Receivables measurement category (d) Mainly relates to mortgage loans and policy loans. The exposure as of June 30, 2012 and December 31, 2011 to sovereign debt securities issued by governments and related in Greece, Ireland, Italy, Portugal and Spain, and classified as available for sale was as follows: (in Euro million)IssuerFair ValueAmortized Cost / Carrying valueUnrealized losses(Gross value)Unrealized losses (Net value)Fair ValueAmortized Cost / Carrying valueUnrealized losses (Gross value)Unrealized losses (Net value)Greece (a)- - - - 300 300 - - Ireland945 1,014 (69) (6) 970 1,112 (142) (24) Italy13,339 14,679 (1,341) (227) 13,883 16,136 (2,253) (400) Portugal573 942 (369) (54) 1,215 2,037 (822) (188) Spain6,470 7,729 (1,259) (308) 7,885 8,478 (592) (105) Total21,327 24,364 (3,038) (594) 24,255 28,064 (3,809) (716) June 30, 2012December 31, 2011(a) for controlled entities as of June 30, 2012 Net amounts correspond to amounts after the related impacts of deferred tax and shadow accounting on policyholders’ participation, deferred acquisition cost and value of purchased business in force and are presented at 100% share. Net amounts may evolve depending on the timing of realization of these potential losses and on the local regulatory environment. Greek government bonds that were subject to Private Sector Initiatives to support Greece were exchanged on March 12, 2012 against new Greek bonds representing 31.5% of initial nominal value, PSI notes, accrued interest notes and GDP-linked notes. The new Greek government bonds were disposed by the Group with no significant impacts. Page 41 (in Euro million) % (value balance sheet) 2.88% 0.21% 3.08% 55.19% 4.28% 0.04% 1.85% 61.35% 2.24% 0.96% 0.01% 3.21% 1.13% 0.86% 0.06% 2.05% 0.90% 0.20% 67.31% - 0.00% - 7.39% 0.00% 7.39% 22.21% 100.00% Consolidated financial statements___________________________________________________Half Year 2012 In addition debt securities issued by government and related in Greece, Ireland, Italy, Portugal and Spain classified under Fair value option amounted to €398 million as of June 30, 2012 and €737 million as of December 31, 2011. 5.2. Investment in real estate properties Investment in real estate properties include buildings owned directly and through real estate subsidiaries. Breakdown of the carrying value and fair value of investments in real estate properties at amortized cost, excluding the impact of all derivatives: (in Euro million) June 30, 2012 December 31, 2011 Gross value Amortization Impairment Carrying value Fair value Gross value Amortization impairment Carrying value Fair value Investment in real estate properties at amortized cost Insurance 17,211 (1,741) (534) 14,936 19,394 16,957 (1,656) (483) 14,818 19,088 Banking and other activities 3,011 (207) (361) 2,443 3,246 3,103 (191) (339) 2,574 3,329 All activities 20,223 (1,948) (895) 17,379 22,640 20,061 (1,847) (822) 17,392 22,417 Fair value is generally based on valuations performed by qualified property appraisers. They are based on a multi-criteria approach and their frequency and terms are often based on local regulations. Change in impairment and amortization of investments in real estate properties at amortized cost (all activities): (in Euro million) Impairment - Investment in real estate properties Amortization - Investment in real estate properties June 30, 2012 December 31, 2011 June 30, 2012 December 31, 2011 Opening value 822 668 1,847 1,737 Increase for the period 73 163 123 248 Write back following sale or reimbursement (21) (0) (8) (143) Write back following recovery in value (10) (11) Others (a) 30 2 (13) 4 Closing value 895 822 1,948 1,847 (a) Includes change in scope and the effect of changes in exchange rates. Page 42 Consolidated financial statements___________________________________________________Half Year 2012 5.3. Unrealized gains and losses on financial investments Excluding the effect of derivatives, unrealized capital gains and losses on financial investments, when not already reflected in the income statement, are allocated as follows: June 30, 2012 December 31, 2011 INSURANCE Amortized cost (a) Fair value Carrying value (b) Unrealized gains Unrealized losses Amortized cost (a) Fair value Carrying value (b) Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale Non controlled investment funds available for sale 316,677 5,860 9,011 5,645 337,000 5,970 10,848 6,503 337,000 5,860 10,848 6,503 26,279 187 1,958 982 5,956 77 121 124 313,472 6,791 8,988 6,020 326,306 6,742 10,886 6,820 326,306 6,791 10,886 6,820 June 30, 2012 December 31, 2011 BANKING AND OTHER ACTIVITIES Amortized cost (a) Fair value Carrying value (b) Unrealized gains Unrealized losses Amortized cost (a) Fair value Carrying value (b) Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale 7,432 7,121 2,795 7,240 7,121 2,838 7,240 7,121 2,838 78 - 288 269 - 244 8,489 4,364 2,762 8,184 4,364 2,750 8,184 4,364 2,750 Non controlled investment funds available for sale 187 189 189 2 0 175 180 180 June 30, 2012 December 31, 2011 TOTAL Amortized cost (a) Fair value Carrying value (b) Unrealized gains Unrealized losses Amortized cost (a) Fair value Carrying value (b) Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale Non controlled investment funds available for sale 324,109 12,981 11,805 5,832 344,240 13,091 13,686 6,692 344,240 12,981 13,686 6,692 26,356 187 2,246 984 6,226 77 365 124 321,961 11,155 11,749 6,195 334,490 11,106 13,636 7,000 334,490 11,155 13,636 7,000 (a) Net of impairment - including premiums/discounts and related accumulated amortization. (b) Net of impairment (details in Note 5.4). See also table 5.4.1 Breakdown of financial assets subject to impairment. Page 43 Unrealized gains 20,749 97 2,010 895 Unrealized gains 36 - 281 5 Unrealized gains 20,785 97 2,291 900 (in Euro million) Unrealized losses 7,915 146 111 96 (in Euro million) Unrealized losses 340 - 293 0 (in Euro million) Unrealized losses 8,255 146 404 96 Consolidated financial statements___________________________________________________Half Year 2012 5.4. Financial assets subject to impairment 5.4.1. Breakdown of financial assets subject to impairment (excluding investment in real estate properties) Each investment item is presented net of the effect of related hedging derivatives (IAS 39 qualifying hedges or economic hedges) except derivatives related to macro hedges shown separately. June 30, 2012 December 31, 2011 Cost before impairment and revaluation to fair value (a) Impairment Cost after impairment but before revaluation to fair value (b) Revaluation to fair value Carrying value Cost before impairment and revaluation to fair value (a) Impairment Cost after impairment but before revaluation to fair value (b) Debt instruments available for sale 324,723 (1,386) 323,337 19,308 342,645 323,801 (2,474) 321,327 Debt instruments (at cost) that are not quoted in an active market 12,957 12,957 (5) 12,952 11,144 11,144 Debt instruments 337,680 (1,386) 336,294 19,302 355,596 334,945 (2,474) 332,471 Equity instruments available for sale 14,524 (2,716) 11,808 1,863 13,671 14,635 (2,883) 11,752 Non controlled investment funds available for sale 6,938 (1,106) 5,832 825 6,657 7,336 (1,141) 6,195 Loans Held To Maturity Loans Available For Sale 0 0 Loans at cost (c) 46,600 (583) 46,017 (509) 45,508 45,658 (610) 45,048 Loans 46,600 (583) 46,017 (509) 45,508 45,658 (610) 45,048 TOTAL 405,742 (5,791) 399,951 21,482 421,432 402,575 (7,108) 395,467 (a) Asset value including impact of discounts/premiums and accrued interests, but before impairment and revaluation to fair value of assets available for sale. (b) Asset value including impairment, discounts/premiums and accrued interests, but before revaluation to fair value of assets available for sale. (c) Including policy loans. Page 44 Revaluation to fair value 12,227 9 12,237 1,800 656 (377) (377) 14,316 (in Euro million) Carrying value 333,554 11,153 344,707 13,552 6,851 44,672 44,672 409,783 Consolidated financial statements___________________________________________________Half Year 2012 5.4.2. real estate properties) Change in impairment on invested assets (excluding investment in January 1, 2012 Increase for the period Write back following sale or reimbursement Write back following recovery in value Other (a) Impairment - Debt instruments 2,474 59 (1,160) (1) 14 Impairment - Equity instruments 2,883 276 (438) (5) Impairment - Non controlled investment funds 1,141 35 (48) (22) Impairment - Loans 610 115 (3) (99) (41) TOTAL 7,108 485 (1,649) (99) (54) (a) Mainly relates to changes in the scope of consolidation and impact of changes in exchange rates. January 1, 2011 Increase for the period Write back following sale or reimbursement Write back following recovery in value Other (a) Impairment - Debt instruments 1,567 1,175 (240) (43) 15 Impairment - Equity instruments 2,848 773 (764) 26 Impairment - Non controlled investment funds 1,107 87 (76) 23 Impairment - Loans 521 239 (13) (87) (50) TOTAL 6,043 2,273 (1,092) (130) 14 (a) Mainly relates ot changes in the scope of consolidation and impact of changes in exchange rates. 5.5. Financial assets recognized at fair value Among invested financial investments measured at fair value in the consolidated statement of financial position (excluding derivatives, investment funds consolidated by equity method and contracts where the financial risk is borne by policyholders), i.e. €414.1 billion as of June 30, 2012 (€400.2 billion as of December 31, 2011): - €216.2 billion were determined directly by reference to an active market (€192.4 billion at the end of 2011), i.e. level 1 assets and - €197.9 billion related to assets not quoted in an active market/no active market (€207.8 billion at the end of 2011), i.e. level 2 and level 3 assets, of which level 3 assets amounted to €10.6 billion (€10.2 billion at the end of 2011). Fair values determined in whole directly by reference to an active market relate to prices which are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis, i.e. the market is still active. Such assets are categorized in the level 1 of the IAS 39 fair value hierarchy. Fair values for level 2 and 3 assets include: values provided at the request of the Group by pricing services and which are not readily publicly available or values provided by external parties which are readily available but relate to assets for which the market is not always active; and assets measured on the basis of valuation techniques including a varying degree of assumptions supported by market transactions and observable data. For all assets not quoted in an active market/no active market, the classification between level 2 and level 3 depends on the proportion of assumptions used supported by market transactions and observable data: assumed to be used by pricing services; or used by the Group in the limited cases of application of mark to model valuations. As of June 30, 2012, some assets were reclassified out of level 2 into level 1. This was mainly related to some corporate bonds for which bid ask spreads further narrowed throughout the period. Page 45 (in Euro million) June 30, 2012 1,386 2,716 1,106 583 5,791 (in Euro million) December 31, 2011 2,474 2,883 1,141 610 7,108 Consolidated financial statements___________________________________________________Half Year 2012 Since June 30, 2010, some government bonds have been transferred out of level 1 into level 2 because of an increased illiquidity observed in the market for such instruments. The Long Term Refinancing Operation launched in December 2011 by European Central Bank brought liquidity in the market. However, since it is a temporary policy, the classification as of June 30, 2012 of those government bonds was maintained similar to the one as of December 31, 2011, although the quantitative market indications have shown an improved liquidity. Therefore, government bonds issued by Ireland, Portugal, Spain, Italy and Belgium remained classified as level 2 as of June 30, 2012. Page 46 Consolidated financial statements___________________________________________________Half Year 2012 Note 6 : Shareholders’ equity and minority interests 6.1. Impact of transactions with shareholders The Consolidated Statement of Changes in Equity is presented as a primary financial statement following the amendment to IAS 1 as described in Note 1. 6.1.1. Change in shareholders’ equity Group share for the first half of 2012 a) Share capital and capital in excess of nominal value During the first half of 2012, the following transactions had an impact on AXA’s share capital and capital in excess of nominal value: Share-based payment for €+16 million b) Treasury shares As of June 30, 2012, the Company and its subsidiaries owned approximately 16 million AXA shares, representing 0.7% of the share capital, a decrease of 1 million shares compared to December 31, 2011. As of June 30, 2012, the carrying value of treasury shares and related derivatives was €368 million. This figure included €1.0 million relating to AXA shares held by consolidated mutual funds (81,965 shares) not backing contracts where financial risk is borne by policyholders. As of June 30, 2012, 2.0 million treasury shares backing contracts where financial risk is borne by policyholders held in controlled investment funds were not deducted from shareholders’ equity. Their total estimated historical cost was €43 million and their market value €21 million at the end of June 2012. c) Undated subordinated debt and related financial expenses As described in Note 1.12.2 of the accounting principles, undated subordinated debts issued by the Group do not qualify as liabilities under IFRS. Undated subordinated debt instruments are classified in shareholders’ equity at their historical value as regards credit spread and interest rates and their closing value as regards exchange rates. The corresponding exchange differences are cancelled out through the translation reserve. During the first half of 2012, the change in other reserves was due to €-148 million in interest expense related to the undated subordinated debt (net of tax), and €+135 million in exchange rate differences. Page 47 Consolidated financial statements___________________________________________________Half Year 2012 As of June 30, 2012 and December 31, 2011, undated subordinated debt recognized in shareholders’ equity broke down as follows: (in Euro million) June 30, 2012 December 31, 2011 Value of the undated subordinated debt in currency of issuance Value of the undated subordinated debt in Euro million Value of the undated subordinated debt in currency of issuance Value of the undated subordinated debt in Euro million October 29, 2004 - 375 M€ 6.0% 375 375 375 375 December 22, 2004 - 250 M€ 6.0% 250 250 250 250 January 25, 2005 - 250 M€ 6.0% 250 250 250 250 July 6, 2006 - 1000 M€ 5.8% 1,000 994 1,000 994 July 6, 2006 - 500 M£ 6.7% 500 614 500 593 July 6, 2006 - 350 M£ 6.7% 350 434 350 419 October 26, 2006 - 600 M A$ (of which 300M A$ 7.5%) 600 483 600 469 November 7, 2006 - 150 M A$ 7.5% 150 121 150 117 December 14, 2006 - 750 M US$ 6.5% 750 593 750 577 December 14, 2006 - 750 M US$ 6.4% 750 593 750 577 October 5, 2007 - 750 M€ 6.2 % 750 746 750 746 October 16, 2007 - 700 M£ 6.8 % 700 865 700 835 Undated notes - variables rates in € 660 660 660 660 Undated notes - 3.3% in JPY 27,000 270 27,000 269 Undated notes - (of which 500 M US$ at 7.1%) in US$ 875 695 875 676 Sub-Total undated subordinated debt 7,944 7,809 Equity component of convertible debt (2017) 95 95 95 95 TOTAL 8,038 7,903 In addition to the nominal amounts shown above, shareholders’ equity included net accumulated financial expenses of: €-1,982 million as of June 30, 2012; €-1,834 million as of December 31, 2011. Undated subordinated debt often contains the following features: Early redemption clauses (calls) at the Group’s option, giving AXA the ability to redeem the principal amount before settlement without penalty on certain dates, and Interest rate step-up clauses with effect from a given date. d) Dividends paid At the shareholders’ meeting held on April 25, 2012, shareholders approved a dividend distribution of €1,626 million with respect to the 2011 financial year. 6.1.2. Change in shareholders’ equity Group share for the first half of 2011 a) Share capital and capital in excess of nominal value During the first half of 2011, the following transactions had an impact on AXA’s share capital and capital in excess of nominal value: Share-based payment for €+22 million b) Treasury shares As of June 30, 2011, the Company and its subsidiaries owned approximately 18 million AXA shares, representing 0.8% of the share capital, a decrease of 8 million shares compared to December 31, 2010, impacting shareholders’ equity by €+107 million. As of June 30, 2011, the carrying value of treasury shares and related derivatives was €388 million. This figure included €0.8 million relating to AXA shares held by consolidated mutual funds (51,158 shares) not backing contracts where financial risk is borne by policyholders. Page 48 Consolidated financial statements___________________________________________________Half Year 2012 As of June 30, 2011, 2.3 million treasury shares backing contracts where financial risk is borne by policyholders held in controlled investment funds were not deducted from shareholders’ equity. Their total estimated historical cost was €48 million and their market value €35 million at the end of June 2011. c) Undated subordinated debt and related financial expenses During the first half of 2011, the change in other reserves was due to €-140 million in interest expense related to the undated subordinated debt (net of tax), and €-249 million in exchange rate differences. d) Dividends paid At the shareholders’ meeting held on April 27, 2011, shareholders approved a dividend distribution of €1,601 million with respect to the 2010 financial year. e) Transaction AXA APH On April 1, 2011, AXA announced that it has successfully completed the AXA APH transaction, whereby it has disposed of its Australian & New Zealand operations and acquired the AXA APH Asia Life operations. This transaction had an impact on AXA Group of €0.7 billion realized capital gains recorded in net income regarding the sale of its Australian and New Zealand operations and €2.5 billion reduction in shareholders’ equity mainly related to the buy-out of minority interests in AXA APH Asian operations in accordance with the application of the new accounting principles on Business Combinations. The ownership increase in a controlled company while maintaining the control is accounted for in shareholders’ equity and no additional goodwill is recognized. 6.2. Comprehensive income for the period The Statement of Comprehensive Income, presented as primary financial statements, includes net income for the period, the reserve relating to the change in fair value of available for sale financial instruments, the translation reserve, and actuarial gains and losses on employee benefit obligations. 6.2.1. Comprehensive income for the first half of 2012 a) shareholders’ equity Reserve related to changes in fair value of available for sale financial instruments included in The increase of gross unrealized gains and losses on assets available for sale totaled €+7,650 million, of which €+7,601 million higher unrealized capital gains on debt securities was mainly driven by interest rates and corporate spreads decrease. The following table shows reconciliation between gross unrealized gains and losses on available for sale financial assets and the corresponding reserve recognized in shareholders’ equity: (in Euro million) June 30, 2012 December 31, 2011 Restated (a) Gross unrealized gains and losses (b) 22,872 15,221 Less unrealized gains and losses attributable to: Shadow accounting on policyholders' participation (11,611) (6,855) Shadow accounting on Deferred Acquisition Costs (c) (633) (416) Shadow accounting on Value of purchased Business In force (579) (554) Unallocated unrealized gains and losses before tax 10,049 7,396 Deferred tax (3,026) (2,157) Unrealized gains and losses (net of tax) - Assets available for sale 7,023 5,239 Unrealized gains and losses (net of tax) - Equity accounted companies (d) (15) (21) UNREALIZED GAINS AND LOSSES (NET OF TAX) – 100% - TOTAL 7,008 5,218 Minority interests' share in unrealized gains and losses (e) (16) 3 Translation reserves (f) (428) (384) UNREALIZED GAINS AND LOSSES (NET GROUP SHARE) (d) 6,563 4,838 (a) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (b) Unrealized gains on total available for sale invested assets including loans. (c) Net of shadow accounting on unearned revenues and fees reserves. (d) Including unrealized gains and losses on assets from discontinued operations (e) Including foreign exchange impact attributable to minority interests. (f) Group share. Page 49 Consolidated financial statements___________________________________________________Half Year 2012 In the half year leading up to June 30, 2012, most of the unrealized gains on assets available for sale related to the Life & Savings segment, leading to significant movements in shadow policyholders’ participation. In jurisdictions where participating business represents an important portion of contracts in force and where required minimum local policyholders’ share in the entities’ results (limited to investment or not) are significant, the reconciliation between gross unrealized gains and losses on available for sale financial assets and the corresponding net reserve recognized in shareholders’ equity were as follows as of June 30, 2012: (in Euro million) June 30, 2012 France Life & Savings Germany Life & Savings Switzerland Life & Savings Gross unrealized gains and losses (a) 6,471 3,943 2,753 Less unrealized gains and losses attributable to: Shadow accounting on policyholders' participation (4,151) (3,436) (2,250) Shadow accounting on Deferred Acquisition Costs (b) (81) (10) Shadow accounting on Value of purchased Business In force (61) Unallocated unrealized gains and losses before tax 2,238 507 432 Deferred tax (450) (162) (91) Unrealized gains and losses (net of tax) - Assets available for sale 1,788 344 341 Unrealized gains and losses (net of tax) - Equity accounted companies 4 UNREALIZED GAINS AND LOSSES (NET OF TAX) – 100% - TOTAL 1,792 344 341 Minority interests' share in unrealized gains and losses (c) (5) 0 Translation reserves (d) (174) UNREALIZED GAINS AND LOSSES (NET GROUP SHARE) 1,787 345 167 (a) Unrealized gains and losses on total available for sale invested assets including loans. (b) Net of shadow accounting on unearned revenues and fees reserves. (c) Including foreign exchange impact attributable to minority interests. (d) Group share. The change in reserves related to changes in fair value of available for sale financial instruments included in shareholders’ equity relating to changes in fair value of assets in June 30, 2012 and December 31, 2011 broke down as follows: (in Euro million) June 30, 2012 December 31, 2011 Restated (a) Unrealized gains and losses (net of tax) 100%, opening 5,218 6,736 Transfer in the income statement on the period (b) (189) (742) Investments bought in the current accounting period and changes in value 1,924 (533) Foreign exchange impact 51 59 Change in scope and other changes 4 (302) Unrealized gains and losses (net of tax) 100%, closing 7,008 5,218 (a) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (b) Transfer induced by disposal of financial assets, impairment write-back following reevaluation, or transfer of expenses following impairment charge during the period, and debt instruments discou nt premium impacts. b) Translation reserve The total impact of foreign exchange rate movement was €+647 million (of which €+609 million from group share and €+37 million from minority interest rates) as of June 30, 2012. The group share translation reserves movement (€+609 million) was mainly driven by the United States (€+222 million), the United Kingdom (€+126 million), Switzerland (€+87 million), Mexico (€+67 million) and Hong Kong (€+54 million), partly offset by Japan (€-99m) and the Company (€-89 million) driven by change in fair value of derivatives and debts hedging net investments in foreign operations. Page 50 Consolidated financial statements___________________________________________________Half Year 2012 c) Employee benefits actuarial gains and losses The total impact of employee benefits actuarial gains and losses for the first half year 2012 amounted to €-933 million net group share mostly due to the drop in discount rates. 6.2.2. Comprehensive income for the first half of 2011 As described in Note 1.2.1, comprehensive income for the first half of 2011 was retrospectively restated for the voluntary change in accounting policy of deferred acquisition costs. a) shareholders’ equity Reserve related to changes in fair value of available for sale financial instruments included in The decrease of gross unrealized gains and losses on assets available for sale totaled €-4,915 million, mainly driven by: €-1,516 million lower unrealized capital gains on equity securities, mainly from the sale of Taikang Life stake, as well as other realized capital gains; €-3,484 million on debt instruments primarily due to interest rates increase mainly impacting Japan, France, and Belgium. b) Translation reserve The total impact of foreign exchange rate movement was €-1,737 million (of which €-1,365 million from group share and €- 372 million from minority interest rates) as of June 30, 2011. The group share translation reserves movement (€-1,365 million) was mainly driven by the United States (€-699 million), Japan (€-506 million), the United Kingdom (€-211 million), partly offset by the Company (€+410 million) driven by change in fair value of derivatives and debts hedging net investments in foreign operations. c) Employee benefits actuarial gains and losses The total impact of employee benefits actuarial gains and losses for the first half year 2011 amounted to €+12 million net group share. 6.3. Change in minority interests Under IFRS, minority interests in most investment funds in which the Group invests consist of instruments that holders can redeem at will at fair value, and qualify as a liability rather than shareholders’ equity items. The same is true for puttable instruments held by minority interest holders. 6.3.1. Change in minority interests for the first half of 2012 Minority interests increased by €112 million to €2,479 million driven by: Movements in the comprehensive income for the period, mainly: Net income attributable to minority interests for €+101 million; - Change in translation reserves for €+37 million; - Reserves relating to changes in fair value through shareholders’ equity for €+23 million. Transaction with minority interests’ holders, mainly: - Dividend payout to minorities for €-72 million. 6.3.2. Change in minority interests for the first half of 2011 The €1,694 million decrease in minority interests to €2,473 million was due to transactions with shareholder for €-1,501 million mainly related to AXA APH transaction and comprehensive income for €-193 million. The comprehensive income for the period notably included the following: Net income attributable to minority interests for €+208 million; - Change in translation reserves for €-372 million; - Reserves relating to changes in fair value through shareholders’ equity for €-29 million. Page 51 Consolidated financial statements___________________________________________________Half Year 2012 Note 7 : Financing debt (in Euro million) Carrying value June 30, 2012 December 31, 2011 AXA Debt component of subordinated notes, 2.5% due 2014 (€) Debt component of subordinated convertible notes, 3.75% due 2017 (€) Subordinated Notes, 5.25% due 2040 (€) U.S. registered redeemable subordinated debt, 8.60% 2030 (US$) U.S. registered redeemable subordinated debt, 7.125% 2020 (£) Derivatives relating to subordinated debts (a) AXA Financial Surplus Notes, 7,70 %, due 2015 MONY Life 11,25% Surplus Notes due 2024 AXA Bank Europe Subordinated debt maturity below 10 years fixed rate 6,646 2,007 1,450 1,300 951 403 536 159 158 1 360 139 6,452 1,970 1,419 1,300 923 389 451 155 154 1 364 143 Undated Subordinated debt fixed rate 221 221 AXA-MPS Vita and Danni 108 108 Subordinated Notes, euribor 6 months + 81bp 108 108 Other subordinated debt (under €100 million) 28 28 Subordinated debt 7,301 7,108 AXA Euro Medium term Notes, 6.0% due through 2013, and BMTN 1,850 850 1,866 866 Euro Medium term Notes, due through 2015 1,000 1,000 AXA Financial 275 268 Senior notes , 7%, due 2028 275 268 AXA UK Holdings GRE : Loan Notes, 6.625%, due 2023 188 188 183 183 Other financing debt instruments issued (less than €100 million) 176 189 Other financing debts instruments issued under euro 100 million 148 137 Derivatives relating to other financing debts instruments issued (a) 27 52 Financing debt instruments issued 2,489 2,506 AXA 832 806 Other financing debts owed to credit institutions (under €100 million) 1 2 Financing debt owned to credit institutions 833 807 TOTAL FINANCING DEBT (b) 10,624 10,421 (a) Hedging instruments according to IAS 39 and economic hedge derivatives which are not acting as hedge under IAS 39. (b) Excluding accrued interest on derivatives. Page 52 Consolidated financial statements___________________________________________________Half Year 2012 Note 8 : Net income per ordinary share The Group calculates a basic net income per ordinary share and a diluted net income per ordinary share: • number of outstanding ordinary shares during the period. • The calculation of diluted net income per ordinary share takes into account shares that may be issued as a result of stock option plans. The effect of stock option plans on the number of fully diluted shares is taken into account only if options are considered to be exercisable on the basis of the average stock price of the AXA share over the period. The calculation of the basic net income per ordinary share assumes no dilution and is based on the weighted average (in Euro million) (a) June 30, 2012 June 30, 2011 Restated (b) Net income Group share 2,586 4,013 Undated subordinated debt financial charge (148) (140) Net income including impact of undated subordinated debt A 2,438 3,873 Weighted average number of ordinary shares (net of treasury shares) - opening 2,340 2,294 Increase in capital (excluding stock options exercised) (c) 0 0 Stock options exercised (c) 0 0 Treasury shares (c) 0 4 Share purchase program (c) Weighted average number of ordinary shares B 2,340 2,298 BASIC NET INCOME PER ORDINARY SHARE C = A / B 1.04 1.69 Potentially dilutive instruments : Stock options 1 3 Other 2 1 Fully diluted - weighted average number of shares (d) D 2,343 2,303 FULLY DILUTED NET INCOME PER ORDINARY SHARE E = A / D 1.04 1.68 (a) Except for number of shares (million of units) and earnings per share (Euro). (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the voluntary change in accounting policy on deferred acquisition costs. (c) Weighted average. (d) Taking into account the impact of potentially dilutive instruments. In 2012, net income per ordinary share stood at €1.04 on a basic calculation, as well as on a fully diluted basis. In 2011, net income per ordinary share stood at €1.69 on a basic calculation, of which €1.64 attributable to continuing operations and €0.04 from discontinued operations. Fully diluted net income per share stood at €1.68, of which at €1.64 and €0.04 respectively. Before the voluntary change in accounting policy on deferred acquisition costs, 2011 net income per ordinary share stood at €1.68 on a basic calculation, of which €1.64 attributable to continuing operations and €0.04 from discontinued operations. Fully diluted net income per share stood at €1.68, of which at €1.63 and €0.04 respectively. Page 53 Statutory auditors’ review report on the 2012 Half Year Financial Information PricewaterhouseCoopers Audit 63, rue de Villiers 92208 Neuilly-sur-Seine Cedex Mazars 61, rue Henri Régnault 92075 Paris La Défense Cedex STATUTORY AUDITORS’ REVIEW REPORT ON THE 2012 HALF-YEAR FINANCIAL INFORMATION This is a free translation into English of the Statutory Auditors’ review report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France. To the Shareholders AXA S.A. 25 avenue Matignon 75008 Paris In compliance with the assignment entrusted to us by your General Meeting and in accordance with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code (Code monétaire et financier), we hereby report to you on: - the review of the accompanying condensed half-year consolidated financial statements of AXA SA, for the six months ended June 30, 2012 ; the verification of the information contained in the half-year management report. 1. Conclusion on the financial statements We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, 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 professional standards applicable in France 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. Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-year consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 - the standard of IFRSs as adopted by the European Union applicable to interim financial information. 2. Specific verification We have also verified the information given in the half-year management report on the condensed half-year consolidated financial statements subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-year consolidated financial statements Neuilly sur Seine and Courbevoie, August 3, 2012 The Statutory Auditors French original signed by PricewaterhouseCoopers Audit Mazars Michel Laforce Pierre Coll Philippe Castagnac Gilles Magnan Statement of the person responsible for the Half Year Financial Report Statement of the person responsible for the Half Year Financial Report I, the undersigned, hereby certify that, to the best of my knowledge, the consolidated summarized financial statements for the first half of the fiscal year 2012 have been drawn up in accordance with applicable accounting standards and give an accurate view of the assets and liabilities, the financial position and the profit or loss of the Company and of all businesses and firms included within the scope of the consolidated Group and that the half year activity report, to be found in the first part of this Report, accurately reflects the significant events which occurred during the first six months of the fiscal year as well as their impact on the financial statements, the main related-parties transactions and the principal risks and uncertainties for the remaining six months of the fiscal year. Paris, August 6, 2012. Henri de Castries Chairman & Chief Executive Officer Person responsible for financial information Denis Duverne Deputy Chief Executive Officer, in charge of Finance, Strategy and Operations"},"Input":{"kind":"string","value":"Semestriel, 2012, Insurance, AXA"},"Query":{"kind":"string","value":"write me a financial report"}}},{"rowIdx":298,"cells":{"Period":{"kind":"string","value":"Semestriel"},"Year":{"kind":"number","value":2013,"string":"2,013"},"Subject":{"kind":"string","value":"Insurance"},"Company":{"kind":"string","value":"AXA"},"Prompt":{"kind":"string","value":"Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.\n\n### Instruction:\nWrite a detailed financial report on the given subject and company.\n\n### Subject:\nInsurance\n\n### Company:\nAXA\n\n### Response:\n"},"Response":{"kind":"string","value":"Half Year Financial Report June 30, 2013 Table of contents I Activity Report ............................................................. II Consolidated financial statements ............................ III Statutory auditors’ review report on the 2013 Half Year Financial Information ............................................ IV Statement of the person responsible for the Half Year Financial Report .................................................... I Activity Report / Half Year 2013 Half Year 2013 Financial Report ACTIVITY REPORT 1 I I ACTIVITY REPORT Cautionary statements concerning statements forward-looking This report includes certain terms that are used by AXA in analyzing its business operations and, therefore, may not be comparable with terms used by other companies; these terms are defined in the glossary provided at the end of this document. Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Please refer to AXA’s Registration Document for the year ended December 31, 2012, for a description of certain important factors, risks and uncertainties that may affect AXA’s business. AXA undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. 2 Half Year 2013 Financial Report ACTIVITY REPORT Financial Market conditions in the first half of 2013 For much of the first half of 2013, global stock markets pushed ahead to deliver strong positive returns. Underpinning markets was a sense of growing optimism over economic prospects of the United States as well as a widespread feeling that policymakers were managing to contain the sovereign debt crisis in Europe. Emerging markets fared less well than developed, with the slowdown in China acting as a brake on growth. In the early hours of 2013, an agreement was reached over the extension of tax cuts and a delay of the US government debt ceiling negotiations – the first part of the so-called US “fiscal cliff”. This was the key upward driver of world equity markets early in the year. However, with several developed markets reaching multi-year highs in May, anxieties about the potential withdrawal of monetary stimulus in the US led to a sell-off later on in the month and into June, eroding some of the earlier year gains. In the US, the Federal Reserve’s Quantitative Easing program, robust corporate results and a recovering economy, propelled equity markets upwards for much of the period, with equity markets hitting a series of record highs. The European political backdrop was periodically negative for the markets. Italy was left without the formation of a government after its election and Cyprus was forced to negotiate a bailout with the European Union, the International Monetary Fund and the European Central Bank (ECB) as its banking system was close to collapse. Economic news remained very weak; however, investors seemed to look past the -0.2% contraction in Q1 GDP, encouraged by at least a more stable environment, as well as support in the form of an ECB interest rate cut. Japanese equities outperformed all other major markets over the period, boosted by a steady stream of action by Prime Minister Shinzo Abe, with a program aimed at tackling deflation being well received. The announcement of a US$116 billion spending program is hoped to raise Japan’s GDP by around 2%. After seeing steep rises and record highs, the Japanese equity suffered a steep sell-off toward the end of the period. This came as the Yen regained some of its earlier strength and exporters’ shares faced profit-taking. Emerging markets were affected by this environment. After showing signs of renewed vigor early in the year, China’s economic data disappointed during the second quarter. In particular, the manufacturing sector experienced a notable downturn in confidence. Meanwhile, growing signs of a credit crunch in China, causing interbank lending rates to spike, continued to be ignored by the People’s Bank of China. Stock Markets Equity markets performed well in the first half of this year. Earnings were recovering and ample liquidity encouraged repricing risk. The MSCI World Index increased by 10% with good performance in the United States and Japan which benefitted from both ultra-expansionary policies pursued by the central bank and the weak Yen. The Dow Jones Industrial Average Index in New York increased by 14% in the first half of 2013 and the S&P 500 index by 13%. The FTSE 100 Index in London increased by 5% in the first half of 2013. The CAC 40 index in Paris increased by 3% and the Nikkei index in Tokyo appreciated by 32%. The MSCI G7 Index increased by 12% and the MSCI Emerging Index decreased by 6%. The S&P 500 implied volatility Index decreased from 18.0% to 16.9% between December 31, 2012 and June 30, 2013. Bond Markets The US 10-year T-bond ended the half year at 2.52%, an increase of 74 bps compared to December 31, 2012. The 10-year German Bund yield increased by 41 bps to 1.73%. The France 10-year government bond yield increased by 35 bps to 2.35%. The 10-year Japanese government bond ended the first quarter of 2013 at 0.55%, a decrease of 22 bps compared to December 31, 2012. The 10-year Belgium government bond ended the half year at 2.64%, a 58 bps increase compared to December 31, 2012. Half Year 2013 Financial Report 3 I I ACTIVITY REPORT Regarding the evolution of 10-year government bonds on European peripheral countries: Italy ended the half year at 4.55% (an increase of 5 bps compared to December 31, 2012), Spain ended the half year at 4.77% (a decrease of 50 bps compared to December 31, 2012), Greece ended the half year at 10.5% (a decrease of 140 bps compared to December 31, 2012), Ireland ended the half year at 4.10% (a decrease of 100 bps compared to December 31, 2012), Portugal ended the half year at 6.45% (a decrease of 56 bps compared to December 31, 2012). In Europe, the iTRAXX Main spreads increased by 2 bps compared to December 31, 2012 and ended half year at 119 bps while the iTRAXX Crossover decreased by 5 bps to 477 bps. In the United States, the CDX Main spread Index decreased by 7 bps to 87 bps. Exchange rates In this context, the Euro appreciated against main currencies except the Dollar. On an average rate basis, the US Dollar decreased by 1% against the Euro (the US Dollar remained fairly stable at $1.30 over the first half of 2012 and 2013). The Yen decreased by 8% against the Euro (from Yen 104.2 over the six months to March 31, 2012 used for half year 2012 accounts to Yen 113.03 over the six months to March 31, 2013 used for half year 2013 accounts). The Pound Sterling decreased by 3.7% (from £0.82 over the first half of 2012 to £0.85 over the first half of 2013) and the Swiss Franc decreased by 2% against the Euro (from CHF 1.20 over the first half of 2012 to CHF 1.23 over the first half of 2013). 4 Half Year 2013 Financial Report ACTIVITY REPORT Operating highlights Significant acquisitions AXA AND HSBC LONG-TERM PARTNERSHIP IN PROPERTY & CASUALTY IN ASIA AND LATIN AMERICA On March 7, 2012, AXA and HSBC announced they had entered into an agreement whereby AXA would acquire HSBC’s P&C businesses in Hong Kong, Singapore and Mexico. In addition, AXA would benefit from a 10-year exclusive P&C bancassurance agreement with HSBC in these countries as well as in China, India and Indonesia. On November 5, 2012, AXA announced it has completed the acquisition of HSBC’s P&C businesses in Hong Kong and Singapore, and that it has consequently launched its exclusive P&C bancassurance cooperation with HSBC in these countries. On April 1, 2013, AXA finalised the acquisition of HSBC’s P&C operations in Mexico and launched subsequently the exclusive P&C bancassurance cooperation in this country. The P&C bancassurance cooperation in China, India and Indonesia will be launched in due course. AXA TO BUY 50% OF TIAN PING On April 24, 2013, AXA announced it had entered into an agreement with Tian Ping Auto Insurance Company Limited (\"Tian Ping\") shareholders to acquire 50% of the company. Tian Ping is mainly focusing on motor insurance and has Property & Casualty licenses covering most Chinese provinces as well as a direct distribution license covering these provinces. Under the terms of the agreement and subject to regulatory approval, AXA will buy 33% of the company from Tian Ping's current shareholders for RMB 1.9 billion (or Euro 237 million1) and subscribe to a dedicated capital increase for RMB 2.0 billion (or Euro 248 million1) to support future growth. AXA and Tian Ping's current shareholders will jointly control Tian Ping. AXA’s existing Chinese P&C operations are expected to be integrated within the new joint venture. In addition, AXA expects to invest Euro Ca. 0.3 billion over the first 3 years of operations to help further develop the company. AXA should become the largest foreign Property & Casualty insurer in China and consolidate its position as largest international P&C insurer in Asia (excluding Japan). This transaction is subject to customary closing conditions, including the receipt of regulatory approval. Significant disposals AXA ENTERS INTO EXCLUSIVITY IN CONNECTION WITH THE POTENTIAL SALE OF A MAJORITY STAKE IN AXA PRIVATE EQUITY On March 22, 2013, AXA announced that its asset management subsidiary, AXA Investment Managers (“AXA IM”) had received an irrevocable offer from an investor group for its entire stake in AXA Investment Managers Private Equity SA (“AXA Private Equity”). 1 EUR 1 = RMB 8.072 as of April 22, 2013 Half Year 2013 Financial Report 5 I I ACTIVITY REPORT The transaction would enable AXA to monetize its interest in AXA Private Equity, a business successfully developed by the Group since 1996, and would provide a strong foundation for the next growth phase of one of Europe’s leading private equity firms. Upon the completion of the proposed transaction, AXA Private Equity’s voting share capital would be held as follows: AXA Private Equity’s management and employees: 40.00% External investors: 33.14% AXA Group: 26.86% The transaction would value AXA Private Equity at Euro 510 million for 100%. The sale of AXA IM’s entire stake would result in AXA IM receiving a total consideration up to Euro 488 million. The consideration would be divided into an upfront payment of approximately Euro 348 million and a deferred consideration up to Euro 140 million, to be paid in instalments subject to achieving certain targets and meeting certain conditions. The proposed transaction is subject to customary conditions, including obtaining required regulatory approvals and should be finalized before the end of Q3 2013. AXA FINANCIAL SIGNS CLOSED MONY PORTFOLIO TRANSACTION WITH PROTECTIVE FOR USD 1.06 BILLION On April 10, 2013, AXA announced it had entered into definitive agreements with Protective Life Corporation (“Protective”) to sell MONY Life Insurance Company (“MONY”) and to reinsure an in-force book of life insurance policies written by MONY’s subsidiary MONY Life Insurance Company of America (“MLOA”) primarily prior to 2004. Under the terms of the agreements and assuming a closing date of October 1, 2013, the total cash consideration will be USD 1.06 billion (or Euro 0.82 billion1). This consideration corresponds to implied 2012 multiples of 12x IFRS underlying earnings and 1.7x IFRS TNAV2. In 2004, AXA Financial acquired The MONY Group Inc. and its subsidiaries, including MONY, MLOA, U.S. Financial Life Insurance Company and Advest3 for USD 1.5 billion. Subsequent to the acquisition, most new business was written out of other AXA Financial subsidiaries and MONY/MLOA were effectively placed in run- off, with the exception of some new business at MLOA, which is excluded from the transaction. AXA is therefore disposing of a run-off mortality book primarily underwritten before 2004, with USD 10.5 billion (or Euro 8.0 billion) of statutory liabilities as of end of 2012. Other SUBORDINATED DEBT On January 17, 2013, AXA announced the issuance of USD 850 million undated subordinated debt (5.50% annual coupon, fixed for life) and on January 18, 2013 the issuance of €1 billion subordinated debt due 2043 (5.125% annual coupon, fixed until the first call date in July 2023 and floating thereafter with a step up of 100 basis points), to anticipate the refinancing of part of subordinated debt instruments maturing on January 1, 2014. Both transactions have been structured to comply with the expected eligibility criteria for a Tier 2 capital treatment under Solvency II. 1 EUR 1 = USD 1.29, as of April 5, 2013. 2 IFRS Tangible Net Asset Value = IFRS shareholders’ equity + off balance sheet net unrealized capital gains and losses – net intangible assets. 3 In 2005, AXA sold MONY’s brokerage subsidiary Advest to Merrill Lynch for USD 0.4 billion. 6 Half Year 2013 Financial Report ACTIVITY REPORT AXA RATING On April 30, 2013, Moody’s Investors Services reaffirmed the Aa3 insurance financial strength ratings of AXA’s main operating subsidiaries, maintaining a negative outlook. On May 3, 2013, Fitch reaffirmed all AXA entities' Insurer Financial Strength ratings at 'AA-', maintaining a negative outlook. On May 22, 2013, S&P reaffirmed long-term ratings on AXA Group core subsidiaries at 'A+' with a stable outlook. Related-party transactions During the first half of the fiscal year 2013, there were (1) no modifications to the related-party transactions described in Note 28 \"Related-Party transactions\" of the audited consolidated financial statements for the fiscal year ended December 31, 2012 included in the full year 2012 Registration Document (pages 312 and 313) filed with the Autorité des marchés financiers and available on its website (www.amf-france.org) as well as on the Company's website (www.axa.com), which significantly influenced the financial position or the results of the Company during the first six months of the fiscal year 2013, and (2) no new transaction concluded between AXA SA and related parties that significantly influenced the financial position or the results of the Company during the first six months of 2013. Risk factors The principal risks and uncertainties faced by the Group are described in detail in Section 3.1 “Regulation” and Section 3.2 \"Risk factors\" included in the full year 2012 Registration Document (respectively on pages 140 to 142 and pages 143 to 155) filed with the Autorité des marchés financiers and available on its website (www.amf-france.org) as well as on the Company's website (www.axa.com). The description contained in these Sections of the 2012 Registration Document remains valid in all material respects at the date of this Report regarding the appreciation of the major risks and uncertainties affecting the Group at June 30, 2013 and which management expects may affect the Group during the remainder of 2013. Events subsequent to June 30, 2013 There have been no subsequent events to June 30, 2013. Half Year 2013 Financial Report 7 I I ACTIVITY REPORT Revenues & Earnings summary Consolidated gross revenues HY 2013 HY 2012 FY 2012 Life & Savings 29,603 28,607 55,016 o/w. Gross written premiums o/w. Fees and revenues from investment contracts with no participating feature Property & Casualty 28,909 133 16,497 27,889 164 16,173 53,572 334 28,315 International Insurance 1,909 1,825 2,987 Asset Management 1,741 1,575 3,343 Banking (b) 293 226 466 Holdings and other companies (c) 0 0 0 TOTAL 50,044 48,405 90,126 Revenues are disclosed net of intercompany eliminations. (a) Changes are on a comparable basis. (b) Excluding (i) net realized capital gains or losses and (ii) change in fair value of assets under fair value and of options and derivatives, net banking revenues and total consolidated revenues would respectively amount to €291 million and €50,042 million for half year 2013 and €460 million and €90,120 million for full year 2012. (c) Includes notably CDOs and real estate companies. Consolidated gross revenues for half year 2013 reached €50,044 million, up 3.4% compared to half year 2012. The restatements to a comparable basis were mainly driven by the exclusion of the appreciation of Euro against most of major currencies (€-600 million or -1.2 points) and by the impact of the acquisition of ERGO DAUM in South Korea in 2012 (€+30 million or +0.1 point). On a comparable basis, gross consolidated revenues were up 4.4%. LIFE & SAVINGS ANNUAL PREMIUM EQUIVALENT HY 2013 HY 2012 FY 2012 TOTAL 3,310 3,064 6,170 France 690 641 1,378 United States 655 599 1,244 United Kingdom 365 283 535 Japan 240 269 598 Germany 218 258 454 Switzerland 310 256 374 Belgium 94 119 175 Central & Eastern Europe 55 78 136 Mediterranean and Latin American Region 227 190 402 Hong Kong 215 180 408 South-East Asia, India and China 237 190 463 Mature markets 2,773 2,590 5,109 High growth markets 537 474 1,061 (a) Changes are on a comparable basis. 8 Half Year 2013 Financial Report (in Euro million) HY 2013 / HY 2012 (a) 5.1% 2.2% 2.7% 11.8% 29.9% n.a. 4.4% (in Euro million) HY 2013/HY 2012 (a) 9.3% 5.4% 10.7% 33.4% 3.4% 15.6% 23.6% 20.9% 28.8% 19.4% 21.4% 27.4% 8.3% 14.8% ACTIVITY REPORT Total Life & Savings New Business APE amounted to €3,310 million, up 8% on a reported basis or up 9% on a comparable basis. This was mainly driven by the United Kingdom, the United States, Switzerland, South- East Asia, India and China, partly offset by Belgium, Germany and Central & Eastern Europe. High growth markets APE increased by 15% as strong growth in South-East Asia, India and China (+27% or €+52 million) and Hong Kong (+21% or €+38 million) was partly offset by Central & Eastern Europe (-29% or €-22 million), negatively impacted by regulatory developments in Poland and the focus on higher margin products in Czech Republic. The United Kingdom APE increased by €94 million (+33%) to €365 million reflecting higher sales of Unit- Linked products (+44% or €+68 million) as a consequence of large Corporate pension Investment schemes underwritten at the beginning of the year, as well as higher Mutual Fund sales through the Elevate wrap platform (+24% or €+25 million). The United States APE increased by €64 million (+11%) to €655 million reflecting higher sales of Unit-Linked products as a consequence of both higher (i) non GMxB investment only product sales (+21% or €+24 million) in the wholesale channel, and (ii) fixed and floating rate GMxB product sales (+23% or €+35 million). Switzerland APE increased by €61 million (+24%) to €310 million driven by strong G/A Protection & Health sales (+28% or €+66 million), in particular in Group Life business reflecting an exceptional growth in full coverage insurance contracts. South-East Asia, India and China APE increased by €52 million (+27%) to €237 million mainly driven by (i) China (+28 million) reflecting higher sales of G/A Protection & Health products mainly through the newly launched joint-venture ICBC-AXA Life and (ii) Thailand (€+19 million) driven by sales initiatives through the bancassurance channel. Hong Kong APE increased by €38 million (+21%) to €215 million mainly driven by higher sales of Unit-Linked products (+57% or €+31 million) reflecting the establishment of a wider active broker network, while G/A Protection & Health sales were stable demonstrating a shift in mix towards Pure Protection and Health products. Mediterranean and Latin American Region APE increased by €37 million (+19%) to €227 million mainly due to mature markets (€+34 million) reflecting a better performance of Unit-Linked products, mainly at AXA MPS, in line with the strategy to focus on improving the business mix. France APE increased by €36 million (+5%) mainly driven by (i) an increase in Unit-Linked sales (+50% or €+45 million) driven by Group Retirement and Individual Savings, (ii) higher sales of G/A Protection & Health products with the launch of new products and commercial campaigns, partly offset by (iii) lower G/A Savings sales (-5% or €-13 million) in line with the decline of the French traditional savings market. Belgium APE decreased by €25 million (-21%) to €94 million driven by (i) a decrease in G/A Savings (-55% or €-49 million) mainly due to lower “Crest Classic” sales in the context of focusing on improving business mix, partly offset by the launch of a new bundled product and (ii) lower sales in G/A Protection & Health (-66% or €-18 million) after the production of a large contract in June 2012. This was partly offset by the higher focus on Unit-Linked business with the launch of new products generating €42 million of APE. Germany APE decreased by €40 million (-16%) to €218 million driven by (i) G/A Protection & Health (-14% or €-17 million) due to the non-repeat of high Health sales in the first half of 2012 in anticipation of a change in regulation capping brokers’ commissions, (ii) G/A Savings (-24% or €-14 million) due to a decrease in single premium short term investment products and (iii) Unit-Linked (-9% or €-3 million) mainly due to the curtailment of “Twinstar” Variable Annuity product. Central & Eastern Europe APE decreased by €22 million (-29%) to €55 million. The decrease was driven by lower Unit-Linked sales (-49% or €-27 million) mainly as a result of the change in regulation of Pension fund business in Poland and the focus on higher margin products in Czech Republic where the decrease in Unit- Linked sales was partly offset by an increase in G/A Pure Protection business (+98% or €+4 million). Half Year 2013 Financial Report 9 I I ACTIVITY REPORT Japan APE decreased by €9 million (-3%) to €240 million driven by (i) lower Variable Annuity sales (-54% or €-37 million) following product redesign in a more competitive environment, partly offset by (ii) higher G/A Protection & Health sales (+14% or €+26 million) following the successful launch of a new disability product. PROPERTY & CASUALTY REVENUES (in Euro million) HY 2013 HY 2012 FY 2012 HY 2013 / HY 2012 (a) TOTAL . Mature markets Direct High growth markets 16,497 13,073 1,152 2,272 16,173 13,259 1,085 1,829 28,315 22,257 2,215 3,843 2.2% -0.1% 6.6% 14.8% (a) Changes are on a comparable basis. Property & Casualty gross revenues were up 2% on both reported and comparable basis to €16,497 million. Personal lines increased by 1% mainly driven by the Mediterranean and Latin American Region, Direct, Switzerland and Asia. Commercial lines increased by 4%, primarily in the Mediterranean and Latin American Region high growth markets, the United Kingdom & Ireland, France and Asia. Overall average tariff increases amounted to 3%. Personal lines (58% of P&C gross revenues) were up by 1% on a comparable basis, mainly stemming from Motor (+2%) as a result of higher volumes in high growth markets and Direct, and tariff increases across the board, partly offset by lower volumes in mature markets in a difficult economic environment. Motor revenues grew by €99 million or +2% mainly driven by: Mediterranean and Latin American Region (+4%), primarily driven by Turkey (+32%) with strong tariff increases on third party liability products, partly offset by Spain (-6%) due to a competitive market in a depressed economic environment; Direct (+6%) mainly driven by resumed growth in the UK reflecting higher new business and improved retention, as well as in France, Italy and Japan partly offset by Spain; Switzerland (+2%) driven by higher volumes and a higher average premium; Asia (+4%) due to a strong increase in car sales in Malaysia; partly offset by Germany (-2%) reflecting lower volumes following significant tariff increases and Belgium (-3%) driven by portfolio pruning and selective underwriting. Non-Motor revenues decreased by €10 million or -0% mainly driven by: the United Kingdom & Ireland (-10%) mainly in Household, driven by portfolio pruning through tariff increases and exiting of partnerships; partly offset by Germany (+4%) and France (+1%) mainly attributable to tariff increases in Household, and higher volumes in both Direct business (+10%) and high growth markets (+11%). Commercial lines (42% of P&C gross revenues) increased by 4% on a comparable basis mainly driven by tariff increases across the board as well as volume increases in high growth markets. Motor revenues increased by €48 million or +3%, mainly driven by: the Mediterranean and Latin American Region (+9%) notably in Turkey (+50%) and the Gulf Region (+106%) reflecting positive portfolio developments, partly offset by negative volumes in Mexico (-10%) due to a more competitive environment; the United Kingdom & Ireland (+7%) driven by tariff increases and increased retention in fleet. Non-Motor revenues increased by €210 million or +4% reflecting growth in: the United Kingdom (+9%) due to Health portfolio development in the United Kingdom and abroad as well as tariff increases and better retention in Property; Asia (+15%) primarily driven by tariff increases and a new Health large account in Hong Kong; France (+3%) mainly following tariff increases in Construction and Property, partly offset by lower volumes; 10 Half Year 2013 Financial Report ACTIVITY REPORT the Mediterranean and Latin American Region (+11%) mainly driven by positive portfolio developments in Health in the Gulf Region and in Mexico, as well as in Property in Turkey. INTERNATIONAL INSURANCE REVENUES International Insurance revenues were up 5% or 3% on a comparable basis to €1,909 million mainly driven by (i) AXA Assistance up 9% to €487 million driven by higher volumes and (ii) AXA Corporate Solutions up 1% to €1,337 million mainly as a result of positive portfolio developments in Motor and Property and tariff increases in Marine and Motor, partly offset by a decrease in Aviation and Construction. ASSET MANAGEMENT REVENUES AND ASSETS UNDER MANAGEMENT Asset Management revenues increased by 11% or 12% on a comparable basis to €1,741 million mainly driven by higher management fees at both AllianceBernstein and AXA Investment Managers as a result of higher average Assets Under Management (AUM), as well as higher distribution fees at AllianceBernstein and higher real estate transaction fees at AXA Investment Managers. AllianceBernstein revenues were up 10% to €1,047 million primarily due to higher Retail distribution fees (€+43 million) as well as higher management fees (€+36 million) resulting from higher average AUM (+6%). AUM increased by 1% or €+5 billion from year-end 2012 to €354 billion driven by (i) €+5 billion favorable foreign exchange rate impact and (ii) €+2 billion net inflows, partly offset by (iii) €-2 billion from market depreciation. AXA Investment Managers revenues were up 15% to €694 million. Excluding distribution fees (retroceded to distributors), and on a comparable basis, revenues increased by €96 million (+18%) mainly driven by (i) higher management fees (+13%) as a result of higher average AUM (+7%) combined with +0.9bp higher management fees bps and (ii) higher real estate transaction fees. AUM increased by 3% or €+15 billion from year-end 2012 to €568 billion as a result of (i) €+14 billion market appreciation and (ii) €+10 billion net inflows, partly offset by (iii) €-8 billion unfavorable foreign exchange rate impact and (iv) €-2 billion change in scope. NET BANKING REVENUES Net banking revenues increased by 30% on both a reported and a comparable basis to €293 million driven by (i) France (+90%) due to higher net banking product reflecting a softer promotional campaign compared to 2012 and (ii) AXA Bank Belgium (+25%) mainly driven by higher interest margin. Half Year 2013 Financial Report 11 I I ACTIVITY REPORT Consolidated underlying earnings, adjusted earnings and net income The amendment to IAS 19 – Employee Benefits, published on June 16, 2011, became effective since January 1, 2013, and the comparative information in respect of 2012, has been restated (referred as “restated” in the tables of this document) to reflect the retrospective application of the revised standard. HY 2013 HY 2012 published HY 2012 restated (a) FY 2012 published Gross written premiums 47,168 45,749 45,749 84,592 Fees and revenues from investment contracts without participating feature 133 164 164 334 Revenues from insurance activities 47,301 45,913 45,913 84,926 Net revenues from banking activities 283 204 204 426 Revenues from other activities 2,451 2,268 2,268 4,741 TOTAL REVENUES 50,036 48,385 48,385 90,093 Change in unearned premium reserves net of unearned revenues and fees (c) (3,816) (3,970) (3,970) (441) Net investment result excluding financing expenses (b) (c) (d) 13,330 14,234 14,235 28,770 Technical charges relating to insurance activities (b) (c) (45,154) (45,593) (45,593) (91,734) Net result of reinsurance ceded (938) (572) (572) (1,323) Bank operating expenses (44) (47) (47) (96) Insurance acquisition expenses (4,738) (4,258) (4,275) (9,472) Amortization of value of purchased life business in force (50) (37) (37) (179) Administrative expenses (c) (4,491) (4,528) (4,569) (9,033) Valuation allowances on tangible assets (0) (0) 28 Change in value of goodwill (0) (0) (0) (0) Other (136) (143) (143) (293) Other operating income and expenses (55,551) (55,179) (55,237) (112,102) OPERATING EARNINGS BEFORE TAX 3,999 3,471 3,414 6,321 Net income from investments in affiliates and associates 53 44 44 136 Financing expenses (333) (275) (275) (587) UNDERLYING EARNINGS BEFORE TAX 3,719 3,240 3,183 5,870 Income tax expenses (d) (990) (817) (801) (1,409) Minority interests (150) (118) (118) (210) UNDERLYING EARNINGS 2,579 2,305 2,263 4,251 Net realized capital gains or losses attributable to shareholders 375 123 123 297 ADJUSTED EARNINGS 2,954 2,427 2,386 4,548 Profit or loss on financial assets (under fair value option) & derivatives (228) 291 291 45 Exceptional operations (including discontinued operations) (86) (8) (8) (94) Goodwill and other related intangible impacts (54) (56) (56) (103) Integration and restructuring costs (118) (69) (69) (244) NET INCOME 2,467 2,586 2,544 4,152 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) For the periods ended June 30, 2013 and December 31, 2012, the change in fair value of assets backing contracts with financial risk borne by policyholders impacted the net investment result for respectivly €+8,070 million and €+14,186 million by the offsetting amounts respectively. (c) For the period ended June 30, 2012, €100 million have been reclassified from change in unearned premium reserve net of unearned revenues and fees to technical charges relating to insurance activities to ensure consistency of the information. (d) HY 2012 published was adjusted to reflect intercompany elimination of €26 million between net investment result and income tax expenses. 12 Half Year 2013 Financial Report (in Euro million) FY 2012 restated (a) 84,592 334 84,926 426 4,741 90,093 (441) 28,771 (91,734) (1,323) (96) (9,506) (179) (9,131) 28 (0) (293) (112,234) 6,189 136 (587) 5,738 (1,373) (210) 4,155 297 4,452 45 (94) (103) (244) 4,057 ACTIVITY REPORT GROUP UNDERLYING EARNINGS (in Euro million) HY 2013 HY 2012 published HY 2012 restated (a) FY 2012 published FY 2012 restated (a) Life & Savings 1,534 1,411 1,396 2,635 2,603 Property & Casualty 1,128 1,044 1,036 1,895 1,877 International Insurance 103 118 118 167 167 Asset Management 194 159 159 382 379 Banking 61 5 5 5 4 Holdings and other companies (b) (441) (433) (451) (833) (875) UNDERLYING EARNINGS 2,579 2,305 2,263 4,251 4,155 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Includes notably CDOs and real estate companies. Group underlying earnings amounted to €2,579 million up 14% versus half year 2012. On a constant exchange rate basis, underlying earnings increased by 16% driven by Life & Savings, Property & Casualty and Asset Management, partly offset by a decrease in International Insurance. Life & Savings underlying earnings amounted to €1,534 million. On a constant exchange rate basis Life & Savings underlying earnings were up €173 million (+12%) mainly attributable to the United States (€+93 million), Japan (€+36 million), South-East Asia, India and China (€+21 million), Hong Kong (€+15 million), Germany (€+14 million) and the Mediterranean and Latin American Region (€+13 million), partly offset by France (€-23 million) mainly resulting from: Higher investment margin (€+106 million or +9%), mainly as a result of (i) Switzerland (€+42 million) reflecting a policyholder bonus reserve release in Individual Life, (ii) Japan (€+40 million) mainly due to higher dividends from equity funds in a rising Japanese stock market, (iii) the United States (€+27 million) and France (€+14 million) as the decrease in investment income reflecting lower reinvestment yields on fixed income assets was more than offset by lower allocation to policyholders, partly offset by (iv) the Mediterranean and Latin American Region (€-14 million) mainly driven by lower average assets. Higher fees & revenues (€+239 million or +7%) mainly driven by: o Unit-linked management fees were up €100 million, mainly driven by the United States (€+59 million) due to higher Separate Account balances and France (€+22 million) due to a higher average assets base. o Loadings on premiums and mutual funds were up €132 million driven by (i) the United States (€+74 million) reflecting Unearned Revenue Reserve assumption updates, (ii) the Mediterranean and Latin American Region (€+32 million) due to strong Unit-Linked sales and increased surrenders, (iii) Japan (€+28 million) mainly driven by new business and inforce growth in Protection & Health, partly offset by France (€-56 million) mainly due to the non- repeat of 1H 2012 Unearned Revenue Reserve adjustment (fully offset by DAC amortization). o Other fees were up €7 million. Net technical margin was up €405 million mainly driven by the United States (€+497 million), primarily due to (i) higher GMxB margin resulting from the non-repeat of 1H 2012 GMxB reserve strengthening for policyholder behavior assumption changes, as well as lower volatility and basis losses, partly offset by (ii) an adverse mortality experience in the Life business. This was partly compensated by France (€-58 million) driven by lower positive prior year reserve developments. Expenses increased by €479 million (or +16%) as a result of: o €459 million higher acquisition expenses, primarily driven by (i) the United States (€-510 million) mainly as a result of higher DAC amortization notably following the improved GMxB margin, (ii) Central & Eastern Europe (€-24 million) due to higher DAC amortization, partly offset by (iii) France (€+66 million) mainly due to the non-repeat of a 1H 2012 DAC adjustment. Half Year 2013 Financial Report 13 I I ACTIVITY REPORT o €20 million higher administrative expenses mainly reflecting various efficiency programs net of inflation as well as negative one-offs, mainly on tax contributions in France. Higher tax expenses and minority interests, €-97 million, driven by higher pre-tax underlying earnings as well as lower favorable tax one-offs (€+31 million in Japan and €+10 million in Hong Kong in 1H 2013 vs. €+78 million in 1H 2012). Property & Casualty underlying earnings amounted to €1,128 million. On a constant exchange rate basis, Property & Casualty underlying earnings increased by €99 million (+10%) mainly driven by: Higher net technical result (including expenses) up €120 million (or +24%) driven by: o Current year loss ratio improving by 1.0 point driven by tariff increases and lower claims frequency, partly offset by higher large claims, and higher Nat Cat charge (+0.2 point) mainly as a result of floods in Bavaria and Saxony (€73 million charge at Group level); o Lower positive prior year reserve developments by 0.3 point; o Lower expense ratio improving by 0.1 point to 26.2%, with (i) 0.2 point reduction in the administrative expense ratio benefiting from various efficiency programs, partly offset by (ii) 0.1 point increase in the acquisition ratio as productivity gains were more than offset by an unfavorable product and business mix effect; o As a result, the combined ratio improved by 0.8 point to 95.7%. Investment result decreased by €23 million to €1,005 million, mainly driven by lower revenues on fixed income assets in France, Switzerland and the UK & Ireland. Lower income tax expense and minority interests, €+11 million, mainly driven by favorable tax one-offs in the Mediterranean and Latin American Region (€+14 million) and a favorable country mix, partly offset by higher pre-tax underlying earnings. International Insurance underlying earnings amounted to €103 million. On a constant exchange rate basis, underlying earnings decreased by €14 million (or -12%) mainly due to (i) AXA Corporate Solutions, down €8 million, following a decrease in the investment result and (ii) AXA Global P&C, down €2 million, due to the non-repeat of 1H 2012 premium boni on Motor cover. Asset Management underlying earnings amounted to €194 million. On a constant exchange rate basis, underlying earnings increased by €38 million (+24%) mainly driven by (i) AXA IM (€+34 million) reflecting higher revenues from both higher average AUM and improved margins, partly offset by higher variable compensations, and (ii) AllianceBernstein (€+3 million) as a result of higher revenues net of variable compensations and lower general administrative expenses, partly offset by the non repeat of a 1H 2012 positive tax one-off. Banking underlying earnings amounted to €61 million. On a constant exchange rate basis, underlying earnings increased by €55 million driven by (i) Belgium, up €36 million, as a result of higher interest margin and (ii) France, up €16 million, following the rise in operating revenues, in a context of lower cost of risk and administrative expenses. Holdings and other companies underlying earnings amounted to €-441 million. On a constant exchange rate basis, holdings underlying earnings increased by €12 million (+3%) mainly driven by (i) Germany holdings (€+11 million) reflecting lower pension costs, (ii) Mediterranean and Latin American holdings (€+5 million) due to lower financial charges, partly offset by (iii) AXA SA (€-2 million) mainly due to the new French tax of 3% on dividends paid by the company (€-46 million), partly offset by an increase in dividends from non-consolidated subsidiaries and a gain related to the hedging program on Performance Units at Group level. GROUP UNDERLYING EARNINGS TO NET INCOME Group net capital gains attributable to shareholders amounted to €375 million. On a constant exchange rate basis, Group net capital gains and losses attributable to shareholders were up €256 million mainly due to: €+187 million higher realized capital gains, to €555 million in the first half of 2013, mainly driven by higher realized gains on real estate (€+83 million), fixed income assets (€+76 million) and equities 14 Half Year 2013 Financial Report ACTIVITY REPORT (€+12 million), notably driven by the sale of a 2.4% equity stake in BNP Paribas generating a €151 million gain; €+25 million lower impairments to €-160 million in the first half of 2013, mainly driven by more favorable equity market conditions (€+18 million); €+41 million higher intrinsic value related to equity hedging derivatives. As a result, adjusted earnings amounted to €2,954 million. On a constant exchange rate basis, adjusted earnings increased by €618 million (+26%). Net income amounted to €2,467 million. On a constant exchange rate basis, net income decreased by €32 million (-1%) mainly as a result of: higher adjusted earnings: up €618 million, more than offset by an unfavorable change in fair value of financial assets and derivatives in 1H 2013 compared to a favorable change in 1H 2012 that was driven by a general decrease in interest rates: down €-520 million to €-228 million which can be analyzed as follows: o €+15 million from the change in fair value of assets under fair value option, o €-143 million from the change in fair value of hedging derivatives not eligible for hedge accounting under IAS 39, mainly attributable to interest rates increase, o €-100 million following foreign exchange rate movements, mainly from JPY and AUD depreciation, notably driven by an unfavorable change in fair value of economic hedge derivatives not eligible for hedge accounting under IAS 39; lower impact from exceptional operations: down €78 million to €-86 million, mainly due to the estimated net loss associated with the “closed MONY portfolio transaction” (€-32 million). Half Year 2013 Financial Report 15 I I ACTIVITY REPORT Consolidated Shareholders’ Equity As of June 30, 2013, consolidated shareholders' equity totaled €51.5 billion. The movements in shareholders' equity since December 31, 2012 are presented in the table below: (in Euro million) FY 2012 published IAS 19 Restatement FY 2012 restated HY 2013 Shareholders' Equity 53,664 (58) 53,606 51,468 Shareholders' Equity At December 31, 2012 53,606 Share Capital 7 Capital in excess of nominal value 28 Equity-share based compensation 23 Treasury shares sold or bought in open market 165 Deeply subordinated debt (including interests charges) 108 Fair value recorded in shareholders' equity (2,519) Impact of currency fluctuations (1,003) Payment of N-1 dividend (1,720) Other (20) Net income for the period 2,467 Actuarial gains and losses on pension benefits 324 At June 30, 2013 51,468 Shareholder Value Earnings per share (“EPS”) (in Euro million except ordinary shares in million) HY 2013 HY 2012 published HY 2012 restated (a) FY 2012 published FY 2012 restated (a) Var. HY 2013 versus HY 2012 restated (a) Basic Fully diluted Basic Fully diluted Basic Fully diluted Basic Fully diluted Basic Fully diluted Basic Fully diluted Weighted average number of shares 2,380.6 2,388.1 2,340.3 2,343.3 2,340.3 2,343.3 2,342.5 2,348.9 2,342.5 2,348.9 Net income (Euro per Ordinary Share) 0.98 0.97 1.04 1.04 1.02 1.02 1.65 1.64 1.61 1.60 4% 5% Adjusted earnings (Euro per Ordinary Share) 1.18 1.18 0.97 0.97 0.96 0.96 1.82 1.81 1.78 1.77 23% 23% Underlying earnings (Euro per Ordinary Share) 1.02 1.02 0.92 0.92 0.90 0.90 1.69 1.69 1.65 1.64 14% 13% (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. 16 Half Year 2013 Financial Report Return On Equity (“ROE”) Period ended , June 30, 2013 Period ended , June 30, 2012 published ROE 9.5% 11.1% Net income group share 2,467 2,586 Average shareholders' equity 51,714 46,620 Adjusted ROE 16.5% 13.8% Adjusted earnings (b) 2,810 2,280 Average shareholders' equity (c) 34,114 33,104 Underlying ROE 14.3% 13.0% Underlying earnings (b) 2,435 2,157 Average shareholders' equity (c) 34,114 33,104 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Including adjustement to reflect net financial charges related to undated debt (recorded through shareholders' equity). (c) Excluding fair value of invested assets and derivatives and excluding undated debt (both recorded through shareholders' equity). Half Year 2013 Financial Report ACTIVITY REPORT (in Euro million) Period ended , June 30, 2012 restated (a) Change in % points 10.9% 1.4 pts 2,544 46,561 13.5% 2.9 pts 2,238 33,045 12.8% 1.5 pts 2,115 33,045 17 I I ACTIVITY REPORT Life & Savings Segment The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income attributable to AXA’s Life & Savings segment for the periods indicated: HY 2013 HY 2012 published HY 2012 restated (a) FY 2012 published Gross revenues (b) 29,643 28,642 28,642 55,084 APE (Group share) 3,310 3,075 3,064 6,170 Investment margin 1,327 1,234 1,234 2,697 Fees & revenues 3,753 3,623 3,626 7,323 Net technical margin 418 16 16 357 Expenses (3,427) (3,001) (3,027) (6,857) Amortization of VBI (49) (37) (37) (179) Other 44 25 25 86 Underlying earnings before tax 2,067 1,860 1,836 3,427 Income tax expenses / benefits (484) (418) (410) (713) Minority interests (50) (31) (31) (78) Underlying earnings Group share 1,534 1,411 1,395 2,635 Net capital gains or losses attributable to shareholders net of income tax 286 145 145 214 Adjusted earnings Group share 1,820 1,556 1,541 2,849 Profit or loss on financial assets (under FV option) & derivatives (200) 300 300 152 Exceptional operations (including discontinued operations) (24) (26) (26) (54) Goodwill and other related intangibles impacts (15) (19) (19) (34) Integration and restructuring costs (79) (14) (14) (40) Net income Group share 1,501 1,797 1,781 2,873 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Before intercompany eliminations. Consolidated Gross Revenues HY 2013 HY 2012 France 7,211 6,754 United States 5,567 5,567 United Kingdom 285 317 Japan 2,605 3,180 Germany 3,232 3,290 Switzerland 5,206 4,838 Belgium 1,151 1,225 Central & Eastern Europe (a) 195 222 Mediterranean and Latin American Region (b) 3,001 2,258 Hong Kong 983 796 South-East Asia, India and China (c) 133 140 Other (d) 74 55 TOTAL 29,643 28,642 Intercompany transactions (40) (35) Contribution to consolidated gross revenues 29,603 28,607 o/w. high growth markets 1,511 1,350 o/w. mature markets 28,092 27,257 (a) Includes Poland, Hungary, Czech Republic and Slovakia. (b) Mediterranean and Latin American Region includes Italy, Spain, Portugal, Greece, Turkey, Morocco and Mexico. (c) South-East Asia, India and China revenues include Singapore and non bancassurance subsidiaries in Indonesia. (d) Other corresponds to Luxembourg, AXA Life Invest, Architas and Family Protect . 18 Half Year 2013 Financial Report (in Euro million) FY 2012 restated (a) 55,084 6,170 2,697 7,327 357 (6,910) (179) 86 3,377 (696) (78) 2,603 214 2,817 152 (54) (34) (40) 2,841 (in Euro million) FY 2012 13,751 11,229 648 6,725 6,655 6,551 2,088 472 4,836 1,723 295 112 55,084 (68) 55,016 2,887 52,129 Underlying earnings HY 2013 HY 2012 published France 353 375 United States 311 237 United Kingdom (9) (13) Japan 292 281 Germany 79 66 Switzerland 150 157 Belgium 81 77 Central & Eastern Europe (b) 15 17 Mediterranean and Latin American Region (c) 90 76 Hong Kong 132 119 South-East Asia, India and China (d) 54 35 Other (e) (13) (14) UNDERLYING EARNINGS 1,534 1,411 o/w. high growth markets 209 178 o/w. mature markets 1,325 1,234 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Includes Poland, Hungary, Czech Republic and Slovakia. (c) Mediterranean and Latin American Region includes Italy, Spain, Portugal, Greece, Turkey, Morocco and Mexico. (d) South-East Asia, India and China earnings include Indonesia, Thailand, Philippines, China, India and Singapore. (e) Other correspond to Luxembourg, AXA Life Invest, Architas and Family Protect. Half Year 2013 Financial Report HY 2012 restated (a) 376 222 (13) 281 66 155 77 17 76 119 35 (14) 1,396 178 1,218 ACTIVITY REPORT (in Euro million) FY 2012 published FY 2012 restated (a) 706 707 522 492 (17) (17) 374 374 120 120 317 314 150 150 1 1 162 162 252 252 86 86 (38) (38) 2,635 2,603 352 352 2,283 2,251 19 I I ACTIVITY REPORT Life & Savings operations – France (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 7,211 690 568 790 215 (1,124) - 4 454 (101) (1) 353 214 567 12 - (10) - 6,754 641 554 828 273 (1,169) - 3 490 (113) (1) 376 49 425 77 - - - 13,751 1,378 1,210 1,559 514 (2,297) - 7 993 (284) (2) 707 124 830 185 - - - Net income Group share 569 502 1,015 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. Gross revenues increased by €457 million (+7%) to €7,211 million1: Unit-Linked revenues (17% of gross revenues) rose by €406 million (+48%), mainly driven by €+137 million in Individual Savings following Unit-Linked oriented commercial efforts and €+269 million in Group Retirement boosted by several large contracts. Unit-Linked share in Individual Savings premiums increased by 4 points to 28%, 11 points above market average at 17%2; G/A Protection & Health revenues (45% of gross revenues) increased by €204 million (+7%) driven by a €+195 million increase in Group Protection & Health as a result of tariff increases upon renewals and net new business inflows and €+19 million increase in Individual Protection reflecting positive portfolio developments; G/A Savings revenues (37% of gross revenues) decreased by €153 million (-5%) driven by Individual Savings (€-83 million) following the focus on Unit-Linked oriented offers, and Group Retirement (€-70 million) due to fewer G/A large contracts. APE increased by €49 million (+8%) to €690 million. On a comparable basis, APE increased by €36 million (+5%): Unit-Linked sales (20% of APE) rose by €45 million (+50%) mainly driven by €+20 million in Individual Savings reflecting Unit-Linked oriented commercial efforts and €+25 million in Group Retirement boosted by several large contracts; G/A Protection & Health sales (44% of APE) increased by €4 million (+1%) driven by €8 million increase in Individual Health and Protection as a result of the success of new products in Health (Modulango) and in Pure Protection (Long Term Care and Funerals). Group Protection & Health sales 1 €7,202 million after intercompany eliminations. 2 Source FFSA June 2013. 20 Half Year 2013 Financial Report ACTIVITY REPORT decreased by €5 million, following a slowdown on the French market (€-20 million) while international business (Employee Benefits and Mortgage insurance) grew strongly (€+15 million). G/A Savings sales (37% of APE) decreased by €13 million (-5%) driven by Individual Savings (€- 7million) following the focus on Unit-Linked oriented offers, and Group Retirement (€-6 million) due to fewer G/A large contracts. Investment margin increased by €14 million (+3%) to €568 million as lower investment income (€-141 million) notably due to lower reinvestment yields and lower inflation rate on fixed income assets, was more than offset by lower amounts allocated to policyholders. Fees & revenues decreased by €38 million (-5%) to €790 million due to the non recurrence of a €-69 million URR reserve adjustment in 2012 (fully offset in DAC), partly offset by higher fees on both Unit-Linked business, in line with higher average asset base, and Protection business, in line with revenues growth. Net technical margin fell by €58 million (-21%) to €215 million mainly driven by Group Protection and Retirement business due to lower positive prior year reserve development. Expenses decreased by €45 million (-4%) to €-1,124 million: Acquisition expenses fell by €66 million (-9%) to €-693 million, mainly due to the non recurrence of a €+69 million DAC adjustment in 2012 (fully offset in URR); Administrative expenses rose by €20 million (+5%) to €-430 million as continuing efforts to contain expenses were more than offset by higher tax contributions. As a result, the underlying cost income ratio increased by 0.8 point to 71.4%. Income tax expenses decreased by €13 million (-11%) to €-101 million mainly due to lower pre-tax underlying earnings. Underlying earnings decreased by €23 million (-6%) to €353 million. Adjusted earnings increased by €142 million (+33%) to €567 million driven by higher net realized capital gains (€+174 million) mainly on equities and real estate, including a €+151 million realized gains relating to the sale of a 2.4% equity stake in BNP Paribas, partly offset by higher impairment charges and a decrease in the impact of equity hedging derivatives (€-9 million), as well as lower underlying earnings (€-23 million). Net income increased by €68 million (+13%) to €569 million driven by higher adjusted earnings (€+142 million), partly offset by an unfavorable change in the fair value of mutual funds and of economic hedge derivatives not eligible for hedge accounting (€-69 million) mainly driven by higher interest rates. Half Year 2013 Financial Report 21 I I ACTIVITY REPORT Life & Savings operations - United States (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 5,567 655 258 1,120 (82) (845) (11) - 441 (130) - 311 (24) 288 (218) (32) (1) (59) 5,567 599 233 995 (580) (338) 7 - 317 (95) - 222 (26) 196 97 - (1) (8) 11,229 1,244 541 1,993 (632) (1,296) (3) - 602 (110) - 492 (37) 455 (103) - (1) (20) Net income Group share (23) 285 331 Average exchange rate : 1.00 € = $ 1.3129 1.2969 1.2969 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. Gross revenues are level with prior year at €5,567 million 1 . On a comparable basis, gross revenues increased by €68 million (+1%): Variable Annuity revenues (63% of gross revenues) increased by 2% reflecting strong sales results for non GMxB investment only products, floating roll up rate GMxB and Employer Sponsored products, partially offset by lower renewal premiums (additional contributions were received for certain old GMxB fixed rate contracts prompted by the suspension of additional contributions in 1Q 2012); Life revenues (24% of gross revenues) decreased by 2% driven primarily by lower sales of non Unit- Linked life products, in particular the Indexed Universal Life product; Asset Management Fees (7% of gross revenues) increased by 5%, reflecting improvement in market conditions in 1H 2013; Mutual Funds revenues (1% of gross revenues) increased by 20%, reflecting higher advisory fees received and increases in sales volume. APE increased by €56 million (+9%) to €655 million. On a comparable basis, APE increased by €64 million (+11%): Variable Annuity APE increased by 16% to €347 million reflecting higher sales of non GMxB investment only, floating rate GMxB and Employer Sponsored products, partially offset by lower sales of fixed rate GMxB products. Non-GMxB investment only and floating rate GMxB products launched since 2010 represented a combined 60% of 1H 2013 Variable Annuity APE; 1 €5,566 million after intercompany eliminations. 22 Half Year 2013 Financial Report ACTIVITY REPORT Life decreased by 19% to €95 million driven primarily by lower sales of non Unit-Linked life products, in particular on Indexed Universal Life product due to increased competition; Mutual Funds increased by 22% to €211 million, reflecting increased advisory account sales. Investment margin increased by €24 million (10%) to €258 million. On a constant exchange rate basis, investment margin increased by €27 million (+12%) as the decrease in investment income reflecting lower yields on fixed income assets, was more than offset by lower crediting rates . Fees & revenues increased by €126 million (+13%) to €1,120 million. On a constant exchange rate basis, fees & revenues increased by €140 million (+14%) primarily due to higher fees earned on higher average separate account balances and assumption updates of Unearned Revenue Reserve. Net technical margin rose by €498 million to €-82 million. On a constant exchange rate basis, net technical margin increased by €497 million primarily due to higher GMxB margin resulting from the non-repeat of 1H 2012 GMxB reserve strengthening for policyholder behavior assumption changes, as well as lower volatility and basis losses. This was partially offset by an adverse mortality experience in the Life business. Expenses increased by €507 million to €-845 million. On a constant exchange rate basis, expenses increased by €517 million: Expenses, net of capitalization (including commissions and DAC capitalization) increased by €27 million (-4%) to €635 million mainly due to higher commissions net of capitalization from increased asset balances and higher mutual funds sales, partly offset by productivity actions (reduction of FTE, changes to variable compensation program, real estate optimization including staff relocation); DAC amortization increased by €490 million to €-210 million mainly following higher GMxB margin. Amortization of VBI increased by €18 million to €-11 million. On a constant exchange rate basis, amortization of VBI increased by €18 million due the non-repeat of 1H 2012 revisions reflecting higher expected margins on MONY in-force contracts. As a result, the underlying cost income ratio increased by 14.9 points to 66%. Income tax expense increased by €35 million (+36%) to €-130 million. On a constant exchange rate basis, income tax expense increased by €36 million reflecting higher pre-tax underlying earnings. Underlying earnings increased by €89 million (40%) to €311 million. On a constant exchange rate basis, underlying earnings increased by €93 million (42%). Adjusted earnings increased by €92 million (+47%) to €288 million. On a constant exchange rate basis, adjusted earnings increased by €95 million (+48%) mainly reflecting the increase in underlying earnings. Net income decreased by €308 million (-108%) to €-23 million. On a constant exchange rate basis, net income decreased by €308 million (-108%). This was primarily driven by (i) higher adjusted earnings, more than offset by (ii) an unfavorable change in fair value of economic hedge derivatives not eligible for hedge accounting (compared to a favorable change in fair value in 1H 2012), mainly attributable to higher interest rates, (iii) an estimated net loss associated with the ”closed MONY portfolio transaction” (€-32 million) and (iv) higher restructuring costs (€-52 million) driven by a real estate lease write-off, generating relocation savings. Half Year 2013 Financial Report 23 I I ACTIVITY REPORT Life & Savings operations - United Kingdom HY 2013 HY 2012 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = £ 285 365 2 147 (0) (168) - - (19) 10 0 (9) - (9) (1) - - (18) (28) 0.8508 317 283 2 168 1 (220) - - (49) 36 0 (13) - (13) 1 (0) (4) (3) (19) 0.8226 For consistency, 2013 figures have been compared to the same scope for 2012, i.e. excluding Bluefin Corporate Consulting which was sold in April 2012. This is referred to as “comparable scope basis” in the commentary below. Half Year 2012 underlying earnings amounted to €-13 million, corresponding approximately to €-2 million for sold business, and €-11 million for retained business. Gross revenues decreased by €31 million (-10%) to €285 million 1. On a constant exchange rate and comparable scope basis, gross revenues increased by €2 million (+1%). This was driven by growth in funds under management on the Elevate platform, an increase in Variable Annuity premiums and increased revenues through the growth of the Architas business. This was partly offset by lower revenues from bancassurance with this channel now closed to new business. APE increased by €82 million (+29%) to €365 million. On a constant exchange rate and comparable scope basis, APE was up €94 million (+33%) over prior year. New sales through the Elevate platform continued to increase, with IFA sales up by €39 million (+52%) as the platform continues to establish itself as one of the leaders in the UK platform market. The other significant growth was on the Corporate Pension Investment business (€+83 million) reflecting two significant new schemes in 2013. This was partially offset by sales decrease in the individual pensions (€-14 million) and in bancassurance (€-14 million) following the closure of this channel to new business. Investment margin increased by €1 million (60%) to €2 million. On a constant exchange rate and comparable scope basis, the investment margin increased by €1 million. 1 €285 million after intercompany eliminations. 24 Half Year 2013 Financial Report (in Euro million) FY 2012 648 535 3 334 4 (411) - - (71) 54 0 (17) - (17) 2 (2) (4) (11) (33) 0.8138 ACTIVITY REPORT Fees & revenues decreased by €21 million (-13%) to €147 million. On a constant exchange rate and comparable scope basis, fees & revenues increased by €8 million due to the growth of the business, partly offset by a decrease in bancassurance revenues. Net technical margin decreased by €1 million (-106%) to €0 million. On a constant exchange rate and comparable scope basis, net technical margin decreased by €1 million. Expenses decreased by €52 million (-24%) to €-168 million. On a constant exchange rate basis and comparable scope basis, expenses decreased by €20 million due to a €11 million reduction in bancassurance general expenses and further expense savings across the rest of the business. As a consequence, the underlying cost income ratio improved significantly by 15.9 points to 113%. On a constant exchange rate and comparable scope basis, the underlying cost income ratio reduced by 19.1 points. Income tax benefits decreased by €26 million (-72%) to €10 million. On a constant exchange rate and comparable scope basis, income tax benefits decreased by €25 million due to the reduction in one-off tax benefits (€-18 million) and the impact of the lower pre-tax loss. Underlying earnings increased by €4 million to €-9 million. On a constant exchange rate and comparable scope basis, underlying earnings increased by €2 million. Adjusted earnings increased by €4 million to €-9 million. On a constant exchange rate and comparable scope basis, adjusted earnings increased by €2 million due to the underlying earnings movement. Net income decreased by €9 million to €-28 million. On a constant exchange rate, net income decreased by €10 million as a result of higher restructuring costs. Half Year 2013 Financial Report 25 I I ACTIVITY REPORT Life & Savings operations – Japan HY 2013 HY 2012 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = Yen 2,605 240 37 738 28 (390) (14) - 399 (105) (3) 292 33 324 13 - - - 337 113.0264 3,180 269 (0) 765 44 (447) (17) - 345 (61) (3) 281 67 348 41 - - - 389 104.1900 Gross revenues decreased by €574 million (-18%) to €2,605 million1. On a comparable basis, revenues decreased by €354 million (-11%): Protection revenues (44% of gross revenues) increased by €52 million (+4%) mainly due to increased new business sales of Whole Life products (€+62 million) and better retention of Term and Term Riders products (€+47 million), partly offset by lower revenues from Increasing Term products (€-39 million) and Group Life products (€-7 million) which were not actively promoted; Investment & Savings revenues (22% of gross revenues) decreased by €409 million (-39%) mainly due to lower sales of Variable Annuity products following product redesign and increased competition in the bancassurance channel; Health revenues (33% of gross revenues) increased by €3 million (+0%) as new business from Medical Whole Life and Nursing products, boosted by the successful launch of “Disability Income” offset lower retention of Medical Term products. APE decreased by €30 million (-11%) to €240 million. On a comparable basis, APE decreased by €9 million (- 3%): Protection sales (54% of APE) increased by €9 million (+7%) mainly supported by stronger sales of Whole Life products before the discontinuation of Single Premium Whole Life in March 2013; Investment and Savings sales (12% of APE) decreased by €37 million (-54%) due to decreased Variable Annuity sales in bancassurance channel following product redesigned and increased competition; Health sales (34% of APE) increased by €19 million (+28%) driven by the successful launch of Disability Income (€+9 million) and strong sales of the new Medical Whole Life product (€+10 million) launched mid-2012. 1 €2,605 million after intercompany eliminations. 26 Half Year 2013 Financial Report (in Euro million) FY 2012 6,725 598 0 1,606 (31) (994) (89) - 492 (115) (4) 374 13 387 28 - - - 414 102.3473 ACTIVITY REPORT Investment margin increased by €37 million to €37 million. On a constant exchange rate basis, investment margin increased by €40 million mainly due to higher dividend income from equity funds in a rising Japanese stock market. Fees & revenues decreased by €27 million (-3%) to €738 million. On a constant exchange rate basis, fees & revenues increased by €36 million mainly due to higher Unit-Linked management fees driven by increased Variable Annuity inforce and higher loadings coming from a better business mix and increased retention. Net technical margin decreased by €16 million (-36%) to €28 million. On a constant exchange rate basis, net technical margin decreased by €14 million mainly due to a lower surrender margin thanks to an overall better retention. Expenses decreased by €57 million (-13%) to €-390 million. On a constant exchange rate basis, expenses decreased by €24 million (-5%) mainly due to ongoing expense control management and positive one-off effects. Amortization of VBI decreased by €3 million (-17%) to €-14 million. On a constant exchange rate basis, VBI amortization decreased by €2 million (-10%). As a result, the underlying cost income ratio improved by 7.0 points to 50.3%. Income tax expenses increased by €43 million to €-105 million. On a constant exchange rate basis, income tax expenses increased by €52 million due to the non-repeat of a 2012 positive tax one-off (€-49 million) and higher pre-tax underlying earnings (€-29 million), partly offset by a 2013 positive tax one-off (€+31 million). Underlying earnings increased by €11 million (+4%) to €292 million or increased by €36 million (+13%) on a constant exchange rate basis. Adjusted earnings decreased by €24 million (-7%) to €324 million or increased by €4 million (+1%) on a constant exchange rate basis, due to higher underlying earnings partly offset by lower net realized capital gains on fixed income assets. Net income decreased by €52 million to €337 million. On a constant exchange rate basis, net income decreased by €23 million, due to higher adjusted earnings (€+4 million) more than offset by a negative impact from Yen depreciation (€-41 million) mainly against the US dollar, lower favorable change in fair value of credit derivatives (€-23 million), partly offset by a more favorable change in fair value of funds (€+36 million) mainly invested in equity. Half Year 2013 Financial Report 27 I I ACTIVITY REPORT Life & Savings operations – Germany HY 2013 HY 2012 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 3,232 218 51 149 29 (100) (7) - 122 (42) (0) 79 17 96 11 2 - - 109 3,290 258 57 157 4 (102) (11) - 105 (39) (0) 66 (8) 57 24 - - - 81 Gross revenues decreased by €58 million (-2%) to €3,232 million1. Life revenues (59% of gross revenues) decreased by €108 million (-5%) to €1,908 million mainly due to lower single premiums from G/A short term investment products as well as lower regular premiums from G/A Protection products; Health revenues (41% of gross revenues) increased by €50 million (+4%) to €1,323 million due to premium adjustments due to medical inflation. APE decreased by €40 million (-16%) to €218 million. Life decreased by €23 million (-20%) to €114 million, mainly due to decreasing single premiums from G/A short term investment products and conventional annuities, as well as the curtailment of “Twinstar” Variable Annuity product production; Health decreased by €17 million (-14%) to €104 million, due to the non recurrence of strong sales in the previous year driven by brokers’ anticipation of a change in regulation capping their commissions effective April 2012. Investment margin decreased by €6 million (-10%) to €51 million due to a decrease in investment income, mainly on fixed income assets, as a result of lower reinvestment yields. Fees & revenues decreased by €8 million (-5%) to €149 million mainly due to lower loadings on Health business following new business sales decrease. Net technical margin rose by €25 million to €29 million mainly due to (i) an increase in the hedge margin on GMxB products (up €14 million to €-19 million) and (ii) a higher mortality margin in Health business. 1 €3,221 million after intercompany eliminations. 28 Half Year 2013 Financial Report (in Euro million) FY 2012 6,655 454 111 340 6 (267) (23) - 167 (46) (0) 120 5 125 (5) - - (1) 119 ACTIVITY REPORT Expenses decreased by €3 million (-3%) to €-100 million, mainly due to savings derived from productivity programs, partly offset by inflation. Amortization of VBI decreased by €4 million (-34%) to €-7 million. As a result, the underlying cost income ratio decreased by 5.2 points to 46.8%. Income tax expenses increased by €3 million (+8%) to €-42 million, mainly due to higher pre-tax underlying earnings. Underlying earnings increased by €14 million (+21%) to €79 million. Adjusted earnings increased by €39 million (+68%) to €96 million due to higher underlying earnings and higher realized capital gains on fixed income assets. Net income increased by €28 million (+34%) to €109 million as the increase in adjusted earnings was partly offset by a less favorable change in the fair value of fixed income mutual funds and of economic hedge derivatives not eligible for hedge accounting, mostly attributable to higher interest rates. Half Year 2013 Financial Report 29 I I ACTIVITY REPORT Life & Savings operations – Switzerland (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 5,206 310 103 147 73 (125) (1) - 196 (46) - 150 21 170 (13) - (3) - 4,838 256 63 144 111 (112) 1 - 206 (51) - 155 3 158 15 - (3) - 6,551 374 193 283 195 (257) (18) - 396 (83) - 314 23 336 (4) - (7) - Net income Group share 154 170 326 Average exchange rate : 1.00 € = Swiss Franc 1.2295 1.2046 1.2046 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. Gross revenues increased by €367 million (+8%) to €5,206 million1. On a comparable basis, gross revenues increased by €475 million (+10%) driven by both Group Life and Individual Life business: Group Life revenues increased by €444 million (+10%) to €4,748 million driven by premiums from full protection scheme contracts (€+467 million) as aresult of the strong business from both new and existing clients; Individual Life revenues increased by €31 million (+7%) to €458 million mainly due to higher single premiums (€+27 million) resulting from the continuing success of Protect Star product. APE increased by €54 million (+21%) to €310 million. On a comparable basis, APE increased by 61 million (+24%): Group Life increased by €66 million (+33%) driven by a strong growth in full protection scheme contracts (€+62 million); Individual Life decreased by €5 million (-9%) driven by lower Variable Annuity business demand. Investment margin increased by €40 million (+63%) to €103 million. On a constant exchange rate basis, investment margin increased by €42 million (+67%) as a result of a policyholder bonus reserve release on Individual Life (€+29 million), while lower investment income (€-25 million) mainly resulting from lower reinvestment yields on fixed income assets, was more than offset by lower policyholder participation (€+38 million). Fees & revenues increased by €3 million (+2%) to €147 million. On a constant exchange rate basis, fees & revenues increased by €6 million (+4%) mainly resulting from higher Group Life revenues. 1 €5,202 million after intercompany eliminations. 30 Half Year 2013 Financial Report ACTIVITY REPORT Net technical margin decreased by €38 million (-35%) to €73 million. On a constant exchange rate basis, net technical margin decreased by €37 million (-33%), mainly due to a deteriorated disability claims experience and a less favorable mortality margin. Expenses increased by €12 million (+11%) to €-125 million. On a constant exchange rate basis, expenses increased by €15 million (+13%) mainly driven by higher administrative expenses. Administrative expenses increased by €19 million (+26%) mainly driven by higher regulatory project costs and expenses related to new product launches. Amortization of VBI increased by €2 million to €-1 million. On a constant exchange rate basis, amortization of VBI increased by €2 million impacted by non-recurring 2012 positive assumption updates, partly offset by model refinements in Group Life (€+14 million). As a result, the underlying cost income ratio increased by 3.9 points to 39.1%. Income tax expenses decreased by €5 million (-9%) to €-46 million. On a constant exchange rate basis, income tax expenses decreased by €4 million (-7%) mainly driven by lower pre-tax underlying earnings. Underlying earnings decreased by €5 million (-3%) to €150 million. On a constant exchange rate basis, underlying earnings decreased by €2 million (-1%). Adjusted earnings increased by €12 million (+8%) to €170 million. On a constant exchange rate basis, adjusted earnings increased by €16 million (+10%) driven by higher realized capital gains mainly on hedge funds and fixed income assets. Net income decreased by €16 million (-9%) to €154 million. On a constant exchange rate basis, net income decreased by €12 million (-7%), mainly due to a negative change in the fair value of economic hedge derivatives not eligible for hedge accounting, partially offset by higher adjusted earnings. Half Year 2013 Financial Report 31 I I ACTIVITY REPORT Life & Savings operations – Belgium (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 1,151 94 162 61 12 (122) (2) - 110 (29) (0) 81 8 89 (19) - - (1) 1,225 119 155 69 15 (130) (4) - 105 (28) (0) 77 44 121 59 (8) - (2) 2,088 175 306 143 42 (265) (12) - 213 (63) (0) 150 52 201 87 (13) (0) (3) Net income Group share 69 170 272 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. For consistency, 2013 figures have been compared to the same scope for 2012, i.e. excluding “Vie Populaire” product portfolio which was sold in September 2012. This is referred to as “comparable scope basis” in the commentary below. Gross revenues decreased by €74 million (-6%) to €1,151 million1. On a comparable scope basis, gross revenues were €57 million (-5%) lower than prior year: G/A Protection & Health revenues (36% of gross revenues) decreased by €8 million (-2%) mainly due to run-off products in Individual Protection business (€-7 million); Unit-Linked revenues (34% of gross revenues) increased by €349 million mainly driven by the launch of Oxylife hybrid product (€+204 million) and the launch of two structured funds (€+97 million); G/A Savings revenues (31% of gross revenues) decreased by €398 million (-53%) mainly due to lower guaranteed rate on the run-off Crest product line (€-598 million), partly offset by the launch of Oxylife hybrid product (€+186 million). APE decreased by €25 million (-21%) to €94 million. On a comparable scope basis, APE was €23 million (- 20%) lower than prior year: G/A Protection & Health (10% of APE) decreased by €16 million (-63%) mainly due to the non-repeat of a 2012 large Corporate contract; Unit-Linked (48% of APE) increased by €42 million mainly driven by the launch of Oxylife hybrid product (€+28 million) and structured funds (€+10 million); G/A Savings (42% of APE) decreased by €49 million (-55%) mainly due to the curtailment of Crest product line (€-75 million), partly offset by the launch of Oxylife hybrid product (€+22 million). 1 €1,151 million after intercompany eliminiations. 32 Half Year 2013 Financial Report ACTIVITY REPORT Investment margin increased by €7 million (+4%) to €162 million. On a comparable scope basis, investment margin increased by €7 million (+4%). Fees & revenues decreased by €8 million (-12%) to €61 million. On a comparable scope basis, fees & revenues decreased by €4 million (-6%) mainly driven by a decrease in loadings on premiums as a result of lower gross revenues and a change in business mix. Net technical margin decreased by €3 million (-21%) to €12 million. On a comparable scope basis, net technical margin remained stable. Expenses decreased by €7 million (-6%) to €-122 million. On a comparable scope basis, expenses remained stable as lower commissions and expense savings reflecting continued cost management were offset by inflation. Amortization of VBI decreased by €2 million to €-2 million. On a comparable scope basis, VBI decreased by €2 million. As a result, the underlying cost income ratio improved by 2.8 points to 53.1%. On comparable scope basis, the underlying cost income ratio improved by 1.5 points. Income tax expenses increased by €-1 million (+4%) to €-29 million. On a comparable scope basis, income tax expenses increased by €-1 million due to the increase of pre-tax underlying earnings. Underlying earnings increased by €3 million (+5%) to €81 million. On a comparable scope basis, underlying earnings increased by €3 million. Adjusted earnings decreased by €32 million (-27%) to €89 million. On a comparable scope basis, adjusted earnings decreased by €32 million mainly due to lower realized capital gains (€-33 million) principally on fixed income assets and equities. Net income decreased by €101 million to €69 million. On comparable scope basis, net income decreased by €110 million mainly driven by lower adjusted earnings (€-32 million), the non repeat of 2012 favorable change in the fair value of mutual funds and others assets (€-45 million) and by an unfavorable change in fair value of interest rate hedging swaps not eligible for hedge accounting (€-33 million) as a result of the rise in interest rates. Half Year 2013 Financial Report 33 I I ACTIVITY REPORT Life & Savings operations – Central & Eastern Europe HY 2013 HY 2012 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 195 55 5 85 21 (92) (1) - 17 (2) (0) 15 (0) 15 (0) 11 (1) (0) 25 222 78 14 56 18 (68) (1) - 19 (2) (0) 17 2 19 0 - (1) - 18 Gross revenues decreased by €27 million (-12%) to €195 million1. On a comparable basis, gross revenues decreased by €26 million (-12%), mainly driven by the change in accounting (transfer to off-balance sheet) of the “Transformed Funds” in Czech Republic due to regulatory changes effective from January 1st 2013 (€-83 million), partly offset by higher Unit-Linked revenues in the Czech Republic (€+42 million) and from Protection in Poland (€+7 million). APE decreased by €23 million (-29%) to €55 million. On a comparable basis, APE decreased by €22 million (- 29%) driven by Pension Fund activities in quasi run-off following the regulatory changes in Poland and Hungary in the prior years (-45% to €12 million) and Life business (-22% to €43 million) driven by lower Unit- Linked products sales (-56% to €13 million), partly offset by higher Protection sales (+58% to €10 million). Underlying earnings decreased by €2 million (-11%) to €15 million. On a constant exchange rate basis, Underlying earnings decreased by €2 million mainly due to the lower contribution from Pension Fund business in Czech Republic following regulatory changes (€-4 million to €2 million), partly offset by higher contributions from the Polish and the Slovakian operations. Adjusted earnings decreased by €4 million (-20%) to €15 million. On a constant exchange rate basis, Adjusted earnings decreased by €4 million driven by lower underlying earnings and lower realized capital gains (€-2 million). Net income increased by €7 million (+39%) to €25 million. On a constant exchange rate basis, net income increased by €7 million driven by an exceptional result from the change in regulation in the Czech Pension Funds (€11 million), partly offset by lower adjusted earnings. 1 €195 million after intercompany eliminations. 34 Half Year 2013 Financial Report (in Euro million) FY 2012 472 136 28 131 44 (189) (7) - 8 (8) (0) 1 5 5 0 - (12) (1) (8) ACTIVITY REPORT Life & Savings operations – Mediterranean and Latin American Region (in Euro million) HY 2013 HY 2012 FY 2012 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 3,001 227 131 210 83 (245) (6) - 173 (37) (46) 90 11 100 (1) (2) (1) (1) 96 2,258 190 144 178 73 (235) (7) - 153 (50) (27) 76 3 79 (11) (0) (10) (1) 57 4,836 402 288 372 141 (507) (14) - 280 (53) (65) 162 9 171 (26) (3) (10) (3) 129 Gross revenues increased by €743 million (+33%) or €738 million (+33%) on a comparable basis to €3,001 million1: Mature markets were up €735 million (+36%) mainly driven by higher sales in Unit-Linked savings products (€+720 million), stemming from the success of “Protected Unit” product at AXA MPS; High growth markets increased by €3 million (+2%) mainly driven by higher Individual Protection and Pension new business in Turkey (€+12 million) as well as growth in G/A Savings in Morocco (€+7 million), partly offset by lower retention in Protection in Mexico (€-16 million). APE increased by €38 million (+20%) or €37 million (+19%) on a comparable basis to €227 million: Mature markets were up €34 million (+21%) to €197 million, principally reflecting a better performance on Unit-Linked products (€+34 million), mainly at AXA MPS; High growth markets increased by €+2 million (+9%) to €30 million, mainly driven by Turkey (€+5 million) due to a good performance in Pension business, partly compensated by Mexico (€-3 million) which is actively de-emphasizing Protection with Savings products with low profitability. Investment margin decreased by €14 million (-9%) to €131 million. On a constant exchange rate basis, investment margin decreased by €14 million (-10%) mainly due to AXA MPS (€-10 million) driven by lower average assets as a consequence of a high level of surrenders. Fees & revenues increased by €33 million (+19%) to €210 million. On a constant exchange rate basis, fees & revenues increased by €32 million (+18%) largely driven by AXA MPS (€+39 million) from higher unearned revenues reserves amortization (partly offset in deferred acquisition costs) mainly reflecting higher surrenders combined with strong sales of “Protected Unit” unit-linked product. 1 €2,996 million after intercompany eliminations. Half Year 2013 Financial Report 35 I I ACTIVITY REPORT Net technical margin rose by €10 million (+14%) to €83 million. On a constant exchange rate basis, net technical margin increased by €10 million (+14%) with a strong contribution from mature markets (€+11 million) driven by a higher mortality margin (€+8 million) due to better claims experience in protection business as well as by an improved GMxB margin (€+3 million) notably from higher surrenders. Expenses increased by €11 million (+4%) to €-245 million. On a constant exchange rate basis, expenses increased by €9 million (+4%): Mature markets were up €16 million, mainly driven by AXA MPS, reflecting higher deferred acquisition costs amortization in line with increased surrenders; High growth markets decreased by €7 million primarily due to Mexico (€-9 million) mainly from 2012 non recurring commission adjustments partly offset by higher marketing costs to promote pension business in Turkey. Amortization of VBI decreased by €1 million (-8%) to €-6 million. On a constant exchange rate basis, amortization of VBI decreased by €1 million (-9%). As a result, underlying cost income ratio decreased by 2.1 points to 59.2%. Income tax expenses decreased by €13 million (-25%) to €-37 million. On a constant exchange rate basis, income tax expenses decreased by €13 million (-26%), despite higher pre-tax underlying earnings, due to higher tax benefits from technical reserves evolution at AXA MPS. Underlying earnings increased by €13 million (+18%) to €90 million. On a constant exchange rate basis, underlying earnings increased by €13 million (+17%). Adjusted earnings increased by €22 million (+27%) to €100 million. On a constant exchange rate basis, adjusted earnings increased by €21 million (+27%) driven by higher underlying earnings and higher realized capital gains. Net income increased by €39 million (+70%) to €96 million. On a constant exchange rate basis, net income increased by €39 million (+70%) mainly driven by higher adjusted earnings and a favorable change in the fair value of interest rates hedging derivatives not eligible for hedge accounting, mainly at AXA MPS, as well as the non repeat of 2012 accelerated amortization of a distribution agreement in Greece. 36 Half Year 2013 Financial Report ACTIVITY REPORT Life & Savings operations – Hong Kong (in Euro million) HY 2013 HY 2012 FY 2012 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = Hong Kong Dollar 983 215 6 241 21 (132) (7) - 130 2 - 132 6 138 16 (0) - - 154 10.1862 796 180 2 214 28 (107) (5) (4) 128 (9) - 119 11 130 (5) (13) - - 113 10.0651 1,723 408 9 444 42 (229) (13) (1) 251 1 - 252 21 273 (10) (29) - - 235 9.9938 Gross revenues increased by €187 million (+23%) to €983 million1. On a comparable basis, gross revenues increased by €198 million (+25%) due to higher revenues from Unit-Linked products (€+99 million) driven by higher new business sales reflecting a wider broker network and some large contracts in 2013, higher revenues from G/A Protection & Health products (€+73 million) mainly driven by in-force growth, and G/A Savings (€+25 million) with higher sales of retirement products. APE increased by €36 million (+20%) to €215 million. On a comparable basis, APE increased by €38 million (+21%) mainly due to higher sales of Unit-Linked products (€+31 million) reflecting a wider broker network and some large contracts in 2013, while G/A Protection & Health sales were stable with a change in mix towards Pure Protection and Health. Investment margin increased by €4 million to €6 million. On a constant exchange rate basis, investment margin increased by €4 million driven by higher investment income from investing in longer-term fixed income securities. Fees & revenues increased by €27 million (+13%) to €241 million. On a constant exchange rate basis, fees & revenues increased by €30 million (+14%) mainly driven by an increase in loadings on premiums stemming from new business and in-force growth. Net technical margin fell by €7 million (-24%) to €21 million. On a constant exchange rate basis, net technical margin decreased by €6 million (-23%) mainly driven by lower surrender margin following improved retention. 1 €983 million after intercompany eliminations. Half Year 2013 Financial Report 37 I I ACTIVITY REPORT Expenses increased by €24 million (+22%) to €-132 million. On a constant exchange rate basis, expenses increased by €26 million (+24%) mainly due to higher investments in business infrastructure and higher acquisition expenses driven by new business and in-force growth. Amortization of VBI increased by €2 million (+39%) to €-7 million. On a constant exchange rate basis, amortization of VBI increased by €2 million (+41%). As a consequence, the underlying cost income ratio increased by 5.5 points to 51.6%. Income tax expenses decreased from €9 million charge in 1H 2012 to a €2 million benefit in 1H 2013. On a constant exchange rate basis, income tax expenses decreased by €12 million, mainly due to a tax benefit (€10 million) driven by a change in the tax base for a block of insurance business in the context of the merger of two insurance entities. Underlying earnings increased by €14 million (+11%) to €132 million. On a constant exchange rate basis, underlying earnings increased by €15 million (+13%). Adjusted earnings increased by €8 million (+7%) to €138 million. On a constant exchange rate basis, adjusted earnings increased by €10 million (+8%) driven by higher underlying earnings (€+15 million), partly offset by lower net realized capital gains, mainly on equities. Net income increased by €41 million (+37%) to €154 million. On a constant exchange rate basis, net income increased by €43 million (+38%) driven by a favorable change in the fair value of interest rate derivatives (€+23 million), the non-repeat of 2012 losses related to the closure of two distribution networks (€+12 million), and higher adjusted earnings (€+10 million). 38 Half Year 2013 Financial Report ACTIVITY REPORT Life & Savings operations – South-East Asia, India and China (in Euro million) HY 2013 HY 2012 FY 2012 Gross revenues APE (Group share) Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 133 237 54 0 54 0 (2) - (0) 52 140 190 35 (0) 35 (1) (4) - - 30 295 463 86 (1) 85 (1) (7) - - 77 Note: For consistency, 2013 figures have been compared to the same scope for 2012, i.e. adjusted for (i) Group share change in China from 51% to 27.5% as of July 2012, and (ii) alignment of reporting period with group calendar year in Indonesia, China and Thailand since full year 2012. Gross Revenues1,2 decreased by €6 million (-5%) to €133 million. On a comparable basis, gross revenues increased by €2 million (+1%) mainly driven by higher revenues from G/A Protection & Health mainly in Singapore with the launch of new products, partly offset by the slowdown in Unit-Linked business in both Indonesia and Singapore. APE2 increased by €47 million (+24%) to €237 million. On a comparable basis, APE increased by €52 million (+27%) mainly driven by sales growth in G/A Protection & Health business in particular in China with continued momentum (€+28 million) reflecting ICBC-AXA Life joint venture which commenced in July 2012, and Thailand (€+19 million) driven by sales initiatives through both the agency and bancassurance channels. Underlying earnings2 increased by €19 million (+54%) to €54 million. On a constant exchange rate and scope basis, underlying earnings increased by €14 million (+32%) mainly due to business growth in Indonesia (€+8 million), China (€+1 million) and Philippines (€+1 million). Adjusted earnings2 increased by €19 million (+56%) to €54 million. On a constant exchange rate and scope basis, adjusted earnings increased by €14 million (+33%), driven by underlying earnings growth. Net income2 increased by €22 million (+74%) to €52 million. On a constant exchange rate and scope basis, net income increased by €16 million (+42%), mainly reflecting growth in adjusted earnings. 1 Gross revenues of €133 million is after intercompany eliminations and include Singapore and non-bancassurance subsidiaries in Indonesia. 2 South-East Asia, India & China Life & Savings scope: (i) for gross revenues: Singapore and non-bancassurance subsidiaries in Indonesia, on a 100% share basis; (ii) for APE, NBV, underlying earnings, adjusted earnings and net income: China, India, Indonesia, Thailand, Philippines and Singapore, on a group share basis. Malaysia operations are not consolidated. Half Year 2013 Financial Report 39 I I ACTIVITY REPORT Life & Savings Operations - Other The following tables present the operating results for the other Life & Savings operations of AXA: Consolidated Gross Revenues HY 2013 HY 2012 Luxembourg 61 41 AXA Life Invest 11 13 Family protect 3 1 Other (0) (0) TOTAL 74 55 Intercompany transactions (10) (12) Contribution to consolidated gross revenues 64 44 Underlying, Adjusted earnings and Net Income HY 2013 HY 2012 Luxembourg 3 3 AXA Life Invest (7) (7) Family Protect (8) (9) Other (1) (1) UNDERLYING EARNINGS (13) (14) Net realized capital gains or losses attributable to shareholders 0 0 ADJUSTED EARNINGS (13) (13) Profit or loss on financial assets (under Fair Value option) & derivatives 0 0 Exceptional operations (including discontinued operations) (1) Goodwill and related intangible impacts Integration and restructuring costs NET INCOME (14) (13) FAMILY PROTECT Underlying earnings as well as adjusted earnings and net income reached €-8 million in 1H 2013, reflecting continued investments and direct marketing expenditure to ensure the progressive ramp-up of the activity. AXA LIFE INVEST Underlying earnings as well as adjusted earnings were stable at €-7 million following lower revenues offset by lower expenses. Net income decreased by €1 million to €-8 million due to exceptional compensation. 40 Half Year 2013 Financial Report (in Euro million) FY 2012 82 27 3 (0) 112 (24) 87 (in Euro million) FY 2012 6 (19) (22) (2) (38) 1 (37) 0 (37) ACTIVITY REPORT Property & Casualty Segment The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income attributable to AXA’s Property & Casualty segment for the periods indicated. (in Euro million) HY 2013 HY 2012 published HY 2012 restated (a) FY 2012 published FY 2012 restated (a) Gross revenues (b) 16,693 16,391 16,391 28,559 28,559 Current accident year loss ratio (net) 71.3% 72.2% 72.2% 72.0% 72.0% All accident year loss ratio (net) 69.5% 70.1% 70.1% 70.8% 70.8% Net technical result before expenses 4,329 4,174 4,172 8,292 8,288 Expense ratio 26.2% 26.3% 26.4% 26.8% 26.9% Net investment result 1,005 1,033 1,033 2,007 2,006 Underlying earnings before tax 1,609 1,533 1,523 2,680 2,657 Income tax expenses / benefits (467) (488) (486) (838) (834) Net income from investments in affiliates and associates 7 16 16 43 43 Minority interests (22) (17) (17) 11 11 Underlying earnings Group share 1,128 1,044 1,036 1,895 1,877 Net capital gains or losses attributable to shareholders net of income tax 102 45 44 171 171 Adjusted earnings Group share 1,229 1,089 1,081 2,066 2,049 Profit or loss on financial assets (under FV option) & derivatives (35) (3) (3) 89 89 Exceptional operations (including discontinued operations) (1) 8 8 8 8 Goodwill and other related intangibles impacts (39) (37) (37) (70) (70) Integration and restructuring costs (24) (41) (41) (119) (119) Net income Group share 1,130 1,017 1,008 1,975 1,957 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Before intercompany eliminations. Consolidated Gross Revenues (in Euro million) HY 2013 HY 2012 FY 2012 France 3,188 3,186 5,730 United Kingdom & Ireland 2,109 2,194 4,150 Germany 2,386 2,402 3,824 Switzerland 2,425 2,460 2,744 Belgium 1,118 1,146 2,087 Central & Eastern Europe - Luxembourg (a) 97 99 173 Mediterranean and Latin American Region (b) 3,775 3,555 7,107 Direct (c) 1,152 1,085 2,215 Asia 444 266 529 TOTAL 16,693 16,391 28,559 Intercompany transactions (196) (219) (244) Contribution to consolidated gross revenues 16,497 16,173 28,315 o/w. high growth markets o/w. Direct o/w. mature markets 2,272 1,152 13,073 1,829 1,085 13,259 3,843 2,215 22,257 (a) Central & Eastern Europe includes Ukraine and Reso (Russia). (b) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region and Mexico. (c) Direct business in France, Belgium, Spain, Portugal, Italy, Poland, United Kingdom, South Korea and Japan. (in Euro million) Half Year 2013 Financial Report 41 I I ACTIVITY REPORT Combined Ratio HY 2013 HY 2012 published HY 2012 restated (a) Total 95.7% 96.4% 96.5% France 92.9% 94.8% 94.7% United Kingdom & Ireland 98.2% 99.9% 99.9% Germany 97.4% 97.4% 97.4% Switzerland 90.5% 89.8% 90.7% Belgium 89.2% 93.1% 93.1% Central & Eastern Europe - Luxembourg (b) 102.0% 100.2% 100.2% Mediterranean and Latin American Region (c) 98.7% 97.1% 97.1% Direct (d) 99.3% 101.8% 101.8% Asia 93.2% 95.3% 95.3% Mature 95.0% 95.7% 95.8% Direct 99.3% 101.8% 101.8% High growth 97.6% 97.5% 97.5% (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Excluding RESO - RESO combined ratio amounted to 104.9% as of June 30, 2013. (c) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region and Mexico. (d) Direct business in France, Belgium, Spain, Portugal, Italy, Poland, United Kingdom, South Korea and Japan. Underlying earnings HY 2013 HY 2012 published HY 2012 restated (a) France 294 247 248 United Kingdom & Ireland 114 94 94 Germany 142 143 143 Switzerland 185 198 189 Belgium 143 114 114 Central & Eastern Europe - Luxembourg (b) 5 20 20 Mediterranean and Latin American Region (c) 173 198 198 Direct (d) 41 19 19 Asia 31 11 11 UNDERLYING EARNINGS 1,128 1,044 1,036 o/w. high growth markets 118 109 109 o/w. Direct 41 19 19 o/w. mature markets 969 916 908 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Central & Eastern Europe includes Ukraine and Reso (Russia). (c) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region, and Mexico. (d) Direct business in France, Belgium, Spain, Portugal, Italy, Poland, the United Kingdom, South Korea and Japan. 42 Half Year 2013 Financial Report FY 2012 published 97.6% 95.1% 100.7% 99.7% 88.7% 93.6% 99.6% 100.5% 100.6% 96.0% 96.3% 100.6% 104.2% FY 2012 published 486 154 251 420 222 52 232 54 23 1,895 77 54 1,763 FY 2012 restated (a) 97.7% 95.1% 100.7% 99.7% 89.6% 93.7% 99.6% 100.5% 100.6% 96.0% 96.4% 100.6% 104.2% (in Euro million) FY 2012 restated (a) 487 154 251 402 221 52 232 55 23 1,877 77 55 1,746 ACTIVITY REPORT Property & Casualty Operations – France (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) Gross revenues Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. 3,188 72.0% 69.2% 866 23.7% 261 462 (168) - (0) 294 (0) 293 (2) - (3) - 288 3,186 72.9% 70.6% 825 24.1% 270 418 (170) - (0) 248 16 264 (7) - - - 257 5,730 73.4% 70.9% 1,667 24.2% 513 793 (306) - (0) 487 58 545 39 - - - 584 Gross revenues increased by €+2 million to €3,188 million1. On a comparable basis, excluding the internal transfer to AXA Assistance of some service guarantees, gross revenues increased by 1% (or €+45 million): Personal lines (56% of gross revenues) were up 0.3% to €1,762 million mainly driven by tariff increases in all segments and positive net new contracts in Motor, despite negative net new contracts in Household; Commercial lines (44% of the gross revenues) were up by 3% to €1,382 million mainly driven by tariff increases, partly offset by lower volumes in a context of selective underwriting. Net technical result rose by €41 million (+5%) to €866 million: Current accident year loss ratio decreased by 0.9 point to 72.0%, mainly driven by tariff increases and lower frequency notably in Personal Motor and Household, especially related to climatic events; All accident year loss ratio decreased by 1.4 points to 69.2%, reflecting the improvement of current accident year loss ratio, as well as €14 million higher positive prior year reserve developments, notably in Liability. Expense ratio decreased by 0.4 point to 23.7% mainly driven by a contained cost base as well as a higher non recurring positive impact from tax contributions (€+24 million in 1H 2013 vs. €+16 million in 1H 2012). Enlarged expense ratio was down 0.8 point to 30.2%, driven by an improved expense ratio as well as lower claims handling costs. As a consequence, the combined ratio was down 1.8 points to 92.9%. 1 €3,143 million after intercompany eliminations. Half Year 2013 Financial Report 43 I I ACTIVITY REPORT Net investment result decreased by €9 million (-3%) to €261 million mainly due to lower yields on fixed income assets (€-8 million) as a result of lower reinvestment yields as well as a lower inflation rate. Income tax expenses decreased by €2 million (-1%) to €-168 million reflecting higher pre-tax underlying earnings, partly offset by the non repeat of 1H 2012 negative tax one-off (€+11 million). As a result, underlying earnings increased by €46 million (+18%) to €294 million. Adjusted earnings increased by €29 million (+11%) to €293 million as a consequence of higher underlying earnings and lower impairments (€+29 million) mainly on equities, reflecting the improved market conditions, partly offset by lower realized capital gains (€-27 million) on equities and by a decrease in the impact of equity hedging derivatives (€-19 million). Net income increased by €31 million (+12%) to €288 million in line with the increase in adjusted earnings. 44 Half Year 2013 Financial Report ACTIVITY REPORT Property & Casualty Operations - United Kingdom & Ireland (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) Gross revenues Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 2,109 69.1% 68.4% 621 29.8% 106 142 (28) - (0) 114 0 114 4 - (1) - 2,194 71.2% 71.1% 581 28.9% 121 123 (28) - (0) 94 21 116 (17) - (1) (5) 4,150 69.4% 70.5% 1,209 30.2% 233 203 (49) - (0) 154 41 195 (26) - (2) (13) Net income Group share 118 93 154 Average exchange rate : 1.00 € = £ (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. 0.8508 0.8226 0.8138 Gross revenues decreased by €85m (-4%) to €2,109 million 1. On a comparable basis, gross revenues increased by €12 million (+1%): Personal lines (48% of gross revenues) were down 8% at €979 million. Motor was down 3% to €265 million due to adverse performance in Ireland as a result of decreases average premium. Non-Motor was down 10% to €714 million. Property was down 22% to €234 million principally due to unfavorable volume negatively impacted by tariff increases and exiting partnerships in the UK. Health was up 4% at €326 million following further growth in both the UK and International businesses. Other Personal lines were down 14% to €153 million following the continued exit from unprofitable schemes. Commercial lines (52% of gross revenues) were up 9% to €1,100 million. Motor was up 7% to €202 million mainly due to renewal tariff increases and higher retention within the UK. Non-Motor was up 9% to €898 million. Property was up 11% to €301 million reflecting improved retention, tariff increases and new e-partner deals. Health was up 7% to €461 million mainly due to continued growth in the UK and International Large Corporate business. Net technical result increased by €40 million (+7%) to €621 million. On a constant exchange rate basis, net technical result increased by €58 million (+10%). Current year loss ratio decreased by 2.1 points to 69.1% mainly driven by a lower Nat Cat charge (- 1.0 point), lower frequency especially in Property and continued price increases across all lines of business. All accident year loss ratio decreased by 2.7 points to 68.4% reflecting 2.1 points improvement of the current year loss ratio and higher positive prior year reserve developments. Expense ratio increased by 1.0 point to 29.8%. The administrative expense ratio was up 0.5 point to 8.6%, largely due to IT investments in Healthcare and the impact of the purchase of “Health on Line” partly offset by expense efficiencies across the UK & Ireland embedded through restructuring programs. The acquisition 1 €2,039 million after intercompany eliminations. Half Year 2013 Financial Report 45 I I ACTIVITY REPORT expense ratio was up 0.5 point to 21.2% mainly driven by 0.4 point increase in non-commission ratio due to the purchase of “Health on Line”, growth in Health International business, partly offset by restructuring programs across the UK and Ireland. Enlarged expense ratio was up 0.5 point to 32.5% as the increase in the expense ratio was partly offset by a 0.4 point improvement in the claims handling costs ratio due to a favorable business mix and lower claims frequency. As a result the combined ratio was down 1.7 points to 98.2%. Net investment result decreased by €15 million (-13%) to €106 million. On a constant exchange rate basis, net investment result decreased by €13 million (-10%) due to lower yields on fixed income assets and lower income from mutual funds. Income tax expenses were in line with the prior year at €-28 million. On a constant exchange rate basis, income tax expenses remained stable (+1%) reflecting higher pre-tax underlying earnings, partly offset by the non-repeat of 1H 2012 one off tax charges (€+5 million). Underlying earnings increased by €19 million (+20%) to €114 million. On a constant exchange rate basis, underlying earnings increased by €22 million (+23%). Adjusted earnings decreased by €2 million (-1%) to €114 million. On a constant exchange rate basis, adjusted earnings increased by €1 million (+1%) reflecting the increase in underlying earnings, and lower impairment charges (€+9 million), partly offset by a reduction in realized capital gains (€-28 million) mainly on fixed income assets. Net income increased by €25 million (+27%) to €118 million. On a constant exchange rate basis, net income increased by €27 million (+29%) due to the increase in adjusted earnings, an improvement in the change in fair value of interest rate derivatives mainly following the increase in interest rates (€+20 million), a reduction in restructuring costs (€+5 million) and a favorable foreign exchange rate impact (€+1 million). 46 Half Year 2013 Financial Report ACTIVITY REPORT Property & Casualty Operations – Germany (in Euro million) HY 2013 HY 2012 FY 2012 Gross revenues Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 2,386 70.0% 68.6% 592 28.8% 159 207 (65) - (0) 142 38 180 (24) 3 (2) - 158 2,402 70.5% 67.8% 606 29.6% 162 211 (68) - (0) 143 (0) 142 24 - (2) - 164 3,824 71.3% 69.4% 1,163 30.4% 332 341 (91) - 0 251 5 255 53 - (4) (12) 292 Gross revenues decreased by € 16 million (-1%) to €2,386 million1: Personal Lines (57% of gross revenues) were stable at €1,355 million as tariff increases were offset by loss of contracts, mainly in Motor; Commercial Lines (36% of gross revenues) decreased by 1% to €858 million mainly in Commercial Motor and Liability, partly compensated by an increase in Property; Other Lines (6% of gross revenues) decreased by 3% to €150 million mainly driven by lower assumed business in Legal Protection. Net technical result decreased by €14 million to €592 million: Current accident year loss ratio decreased by 0.5 point to 70.0% due to improved attritional claims experience (-5.8 points) resulting from tariff increases and lower frequency, despite the floods in Bavaria and Saxony (€50 million), as well as hailstorm events; All accident year loss ratio increased by 0.8 point to 68.6% mainly due to lower positive prior year reserve developments. Expense ratio decreased by 0.8 point to 28.8% due to both lower general expenses as a result of productivity programs and lower commissions reflecting a favorable change in business mix. Enlarged expense ratio was down 0.6 point to 32.1%. As a result, the combined ratio was stable at 97.4%. Net investment result decreased by €3 million (-2%) to €159 million. Income tax expenses decreased by €3 million (-5%) to €-65 million due to a higher share of tax-free investment income. 1 €2,363 million after intercompany eliminations. Half Year 2013 Financial Report 47 I I ACTIVITY REPORT Underlying earnings remained stable at €142 million. Adjusted earnings increased by €38 million (+27%) to €180 million driven by higher realized capital gains mainly on equities. Net income decreased by €6 million (-4%) to €158 million, as increased adjusted earnings were more than offset by a negative change in the fair value of fixed income funds, mainly attributable to the rise in interest rates. 48 Half Year 2013 Financial Report ACTIVITY REPORT Property & Casualty Operations – Switzerland (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) Gross revenues Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs 2,425 72.8% 65.8% 461 24.7% 106 234 (48) - (2) 185 13 198 (10) - (13) - 2,460 72.3% 65.6% 472 25.0% 113 241 (50) - (2) 189 1 191 10 - (14) - 2,744 69.3% 63.4% 1,006 26.2% 218 505 (99) - (3) 402 17 419 (13) - (28) - Net income Group share 175 186 378 Average exchange rate : 1.00 € = Swiss Franc (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. 1.2295 1.2046 1.2069 Gross revenues decreased by €35 million (-1%) to €2,425 million1. On a comparable basis, gross revenues increased by €17 million (+1%): Personal lines (53% of the gross revenues) were up 2% to €1,288 million as a consequence of volume growth in all major business lines; Commercial lines (47% of the gross revenues) were down 1% to €1,144 million mainly resulting from selective underwriting. Net technical result decreased by €12 million (-2%) to €461 million. On a constant exchange rate basis, net technical result decreased by €2 million (0%): Current accident year loss ratio increased by 0.5 point to 72.8% mainly driven by higher natural events charges (+1.5 points) caused by several hail storm events, partly compensated by an improved attritional claims experience, especially in Personal Property; All accident year loss ratio increased by 0.2 point to 65.8% as the slightly higher current accident year loss ratio was partly compensated by more favorable prior year reserve developments. Expense ratio decreased by 0.4 point to 24.7% driven by lower administrative expense ratio following continuing cost management discipline. Enlarged expense ratio was down by 0.7 point to 28.4%. As a result, the combined ratio was down by 0.2 point to 90.5%. 1 €2,418 million after intercompany eliminations. Half Year 2013 Financial Report 49 I I ACTIVITY REPORT Net investment result decreased by €7 million (-6%) to €106 million. On a constant exchange rate basis, net investment result decreased by €5 million (-4%) mainly attributable to a lower reinvestment yield on fixed income assets. Income tax expenses decreased by €2 million (-3%) to €-48 million. On a constant exchange rate basis, income tax expenses decreased by €1 million (-1%) driven by lower pre-tax underlying earnings. Underlying earnings decreased by €5 million (-3%) to €185 million. On a constant exchange rate basis, underlying earnings decreased by €1 million (-1%). Adjusted earnings increased by €7 million (+4%) to €198 million. On a constant exchange rate basis, adjusted earnings increased by €12 million (+6%) mainly driven by higher realized capital gains on fixed income assets. Net income decreased by €11 million (-6%) to €175 million. On a constant exchange rate basis, net income decreased by €8 million (-4%) as the increase in adjusted earnings was more than offset by an unfavorable change in the fair value of fixed income funds, mainly attributable to the rise in interest rates. 50 Half Year 2013 Financial Report ACTIVITY REPORT Property & Casualty Operations – Belgium (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) Gross revenues Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. 1,118 65.7% 58.5% 424 30.7% 103 213 (70) - - 143 29 172 (18) - (1) (3) 150 1,146 70.3% 63.6% 381 29.5% 97 169 (55) - (0) 114 (1) 114 (19) - (1) (5) 88 2,087 68.8% 63.4% 768 30.3% 196 329 (107) - (0) 221 11 232 8 - (2) (23) 214 Gross revenues decreased by €28 million (-2%) to €1,118 million1 : Personal lines (48% of the gross revenues) were down 1% to €538 million following negative net new contracts partly offset by tariff increases in both Motor and Household; Commercial lines (50% of the gross revenues) were down 4% to €565 million due to decreases in Motor (€-9 million) mainly following pruning actions, Workers’ Compensation (€-7 million) due to the economic environment, Health (€-6 million) due to portfolio losses and Marine (€-6 million) due to a transfer of a large contract to AXA Corporate Solutions. Net technical result increased by €43 million (+11%) to €424 million: Current accident year loss ratio decreased by 4.6 points to 65.7% mainly driven by an improved attritional claims experience (-3.4 points) resulting from tariff increases and lower frequency, as well as lower large claims (-1.7 points); All accident year loss ratio decreased by 5.1 points to 58.5% due to an improved current accident year loss ratio and higher positive prior year reserve developments, mainly on annuities. Expense ratio rose by 1.2 points to 30.7% due to lower revenues, higher non commission expenses and an increase in commission rates driven by a change in business mix. Enlarged expense ratio was up 1.6 points to 38.4%. As a result, the combined ratio was down 3.9 points to 89.2%. Net investment result increased by €6 million (+6%) to €103 million due to higher dividends following higher asset allocation in equities partially offset by lower reinvestment yields in fixed income assets. Income tax expenses increased by €15 million (+27%) to €-70 million due to higher pre-tax underlying earnings. 1 €1,098 million after intercompany eliminations. Half Year 2013 Financial Report 51 I I ACTIVITY REPORT Underlying earnings increased by €29 million (+26%) to €143 million. Adjusted earnings increased by €59 million (+52%) to €172 million mainly driven by higher underlying earnings and higher realized capital gains on fixed income assets. Net income increased by €63 million (+71%) to €150 million mainly driven by higher adjusted earnings and a favorable change in the fair value of inflation derivatives, partly offset by an unfavorable change in the fair value of mutual funds, mainly attributable to higher interest rates and widening credit spreads. 52 Half Year 2013 Financial Report ACTIVITY REPORT Property & Casualty Operations – Central & Eastern Europe and Luxembourg Consolidated Gross Revenues (in Euro million) HY 2013 HY 2012 FY 2012 Luxembourg Ukraine Reso (Russia) TOTAL Intercompany transactions Contribution to consolidated gross revenues 63 34 - 97 - 97 63 35 - 99 - 99 99 74 - 173 - 173 Underlying, Adjusted earnings and Net Income (in Euro million) HY 2013 HY 2012 FY 2012 Luxembourg Ukraine Reso (Russia) (a) 2 1 1 3 1 16 8 1 43 UNDERLYING EARNINGS 5 20 52 Net realized capital gains or losses attributable to shareholders 8 (4) (4) ADJUSTED EARNINGS 12 16 49 Profit or loss on financial assets (under Fair Value option) & derivatives Exceptional operations (including discontinued operations) Goodwill and related intangibles impacts Integration and restructuring costs 1 - (1) - 5 - (2) - 10 - (2) - NET INCOME (a) Reso accounted for using the equity method. AXA's share of profit is recognized in income statement. 13 19 57 UKRAINE Gross revenues decreased by €1 million (-4%) to €34 million. On a comparable basis, gross revenues decreased by €1 million (-2%) driven by lower premiums in bancassurance channel, partly offset by positive developments in the proprietary network. Underlying earnings, adjusted earnings and net income were stable at €1 million on a constant exchange rate basis. RESO (RUSSIA) Underlying earnings decreased by €15 million to €1 million on a constant exchange rate basis, mainly driven by higher one-off expenses (€-13 million) and a deterioration in claims experience. As a result, the combined ratio was up 7.9 points to 104.9%. Adjusted earnings decreased by €3 million to €9 million on a constant exchange rate basis, driven by lower underlying earnings, partly offset by higher realized capital gains (€+9 million) and lower impairments (€+6 million). Half Year 2013 Financial Report 53 I I ACTIVITY REPORT Net income decreased by €6 million to €9 million on a constant exchange rate basis, mainly due to lower adjusted earnings. 54 Half Year 2013 Financial Report ACTIVITY REPORT Property & Casualty Operations – Mediterranean and Latin American Region (in Euro million) HY 2013 HY 2012 FY 2012 Gross revenues Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 3,775 72.1% 73.6% 950 25.1% 202 250 (63) 1 (15) 173 15 188 13 (4) (10) (10) 176 3,555 72.3% 71.6% 980 25.5% 206 305 (96) - (11) 198 13 210 4 8 (15) (16) 192 7,107 73.0% 74.8% 1,775 25.7% 384 348 (138) 0 22 232 40 272 19 8 (24) (42) 233 Gross revenues increased by €221 million (+6%) to €3,775 million1. On a comparable basis, gross revenues increased by €204 million (+6%) driven by the acceleration of high growth markets (+16% or €+252 million), partly offset by mature markets (-2% or €-48 million) principally in Spain, continuing to suffer from a difficult economic environment. Personal lines (57% of the gross revenues) were up 3% to €2,152 million driven by Motor lines (+4% or €+58 million) reflecting growth in Turkey (€+81 million) from both tariff increases and positive volume effect, partly offset by a decrease in Spain (€-25 million) as positive net new contracts were more than offset by pricing and mix effects; Commercial lines (42% of the gross revenues) were up 10% to €1,613 million driven by Non-Motor lines (+11% or €+107 million) in high growth markets (€+108 million) with positive volume effect and tariff increases in Health in both the Gulf region (€+49 million) and Mexico (€+14 million) and new business in property in both Turkey (€+23 million) and Mexico (€+16 million). Motor lines were up 9% (or €+43 million) in Turkey (€+46 million) mainly from tariff increases and in the Gulf region (€+25 million) from a new large account, partly offset by high level of cancellations in both Mexico (€-26 million) and Spain (€-5 million); Other lines (1% of the gross revenues) were up 4% to €33 million. Net technical result decreased by €30 million (-3%) to €950 million. On a constant exchange rate basis, net technical result decreased by €36 million (-4%) due to Spain (€-105 million) and Morocco (€-22 million), partly offset by good results in Turkey (€+49 million) and Italy (€+47 million). Current accident year loss ratio decreased by 0.2 point to 72.1% including a 0.4 point Nat Cat charge. Mature markets increased by 0.5 point while high growth markets decreased by 1.3 points. Excluding 1 €3,748 million after intercompany eliminations. Half Year 2013 Financial Report 55 I I ACTIVITY REPORT the Nat Cat charge, improvement in high growth markets was mainly driven by tariff increases in Motor and Commercial Property in Turkey and in commercial health in Mexico. Deterioration in mature markets was mainly driven by an increase in average claim Motor costs in Spain, partly offset by Italy benefitting from lower frequency in personal Motor and Personal Property. All accident year loss ratio increased by 2.1 points to 73.6% with less favorable prior year reserve developments (€-79 million), mainly in Spain (€-52 million) due to an increase of average claim costs in both Motor and Household as well as in high growth markets (€-47 million), partly offset by more favorable prior year reserve developments in Motor in Italy (€+23 million). Expense ratio decreased by 0.5 point to 25.1% mainly driven by improved administrative expense ratio in high growth markets (-1.1 points) thanks to positive volume effect. Mature markets improved by 0.1 point reflecting benefits from productivity plans, partly offset by a negative volume effect. Enlarged expense ratio improved by 0.6 point to 28.0%. As a result, the combined ratio was up 1.5 points to 98.7%. Net investment result decreased by €4 million (-2%) to €202 million. On a constant exchange rate basis, net investment result decreased by €4 million (-2%) mainly driven by a lower asset base in mature markets. Income tax expenses decreased by €33 million (-34%) to €-63 million. On a constant exchange rate basis, income tax expenses decreased by €33 million (-35%) due to lower pre-tax underlying earnings and a decrease in the effective tax rate reflecting positive tax one-offs (€+14 million). Underlying earnings decreased 25 million (-12%) to €173 million. On a constant exchange rate basis, underlying earnings decreased by €25 million (-13%). Adjusted earnings decreased by €23 million (-11%) to €188 million. On a constant exchange rate basis, adjusted earnings decreased by €23 million (-11%) mainly driven by lower underlying earnings. Net income decreased by €16 million (-8%) to €176 million. On a constant exchange rate basis, net income decreased by €17 million (-9%) mainly reflecting lower adjusted earnings combined with lower restructuring costs in mature markets. 56 Half Year 2013 Financial Report ACTIVITY REPORT Property & Casualty Operations – Direct business (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) Gross revenues Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. 1,152 77.4% 76.8% 252 22.5% 51 58 (17) - (0) 41 (1) 41 1 - (1) (1) 39 1,085 78.3% 79.9% 216 21.9% 50 31 (12) - (0) 19 (2) 17 (1) - (2) - 14 2,215 78.9% 79.0% 459 21.6% 98 85 (30) - (0) 55 0 55 (1) - (4) (4) 46 Direct business includes operations in France (25% of total Direct gross revenues), the UK (20%), South Korea (19%), Japan (15%), Spain (8%), Italy (6%), Belgium (4%), Poland (3%) and Portugal (1%). Gross revenues increased by €67 million (+6%) to €1,152 million1. On a comparable basis, gross revenues increased by €72 million (+7%): Personal Motor (87% of gross revenues) was up €58 million (+6%) to €1,002 million mainly driven by higher new business and resilient retention in all markets but Spain (-11% or €-11 million), notably in France (+15% or €+27 million), Italy (+31% or €+15 million), Japan (+7% or €+13 million) and in the UK (+5% or €+10 million); Personal Non-Motor (13% of gross revenues) was up €14 million (+10%) to €148 million mainly supported by both higher volume and tariff increases in France and growth in South Korea. Net technical result increased by €36 million (+17%) to €252 million. On a constant exchange rate basis net technical result increased by €47 million (+22%): Current accident year loss ratio decreased by 1.1 points to 77.4% as a result of continued underwriting improvement, lower frequency in Motor together with a lower Nat Cat charge (-0.3 point) mainly driven by favorable weather conditions in the UK; All accident year loss ratio decreased by 3.2 points to 76.8% as a result of the decrease in current accident year loss ratio and favorable prior year reserve developments. Expense ratio increased by 0.5 point to 22.5%. Acquisition ratio increased by 0.2 point reflecting a lower average premium in the UK, and lower volumes in Spain. Administrative ratio increased by 0.3 point mainly due to the investment in South Korea to integrate the ERGO Datum Direct portfolio. Enlarged expense ratio was up by 0.3 point to 28.0%. 1 €1,152 million after intercompany eliminations. Half Year 2013 Financial Report 57 I I ACTIVITY REPORT As a result, the combined ratio was down by 2.5 points to 99.3%. Net investment result increased by €1 million (+2%) to €51 million. On a constant exchange rate basis, net investment result increased by €2 million (+4%) due to a higher asset base. Income tax expenses increased by €6 million to €-17 million. On a constant exchange rate basis, income tax expenses increased by €6 million reflecting higher pre-tax underlying earnings and an unfavorable country mix. Underlying earnings increased by €22 million to €41 million. On a constant exchange rate basis, underlying earnings increased by €24 million. Adjusted earnings increased by €24 million to €41 million. On a constant exchange rate basis, adjusted earnings increased by €25 million due to higher underlying earnings. Net income increased by €25 million to €39 million. On a constant exchange rate basis, net income increased by €26 million due to higher adjusted earnings. 58 Half Year 2013 Financial Report ACTIVITY REPORT Property & Casualty Operations - Asia (in Euro million) HY 2013 HY 2012 FY 2012 Gross revenues Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 444 68.3% 65.7% 135 27.5% 9 36 (6) 5 (3) 31 (1) 30 0 - (6) (10) 14 266 68.3% 66.7% 78 28.6% 6 17 (3) - (3) 11 0 11 (0) - - (14) (4) 529 69.0% 67.6% 171 28.4% 14 36 (6) - (6) 23 3 27 (0) - (3) (25) (1) Note: Asia Property & Casualty scope (i) for gross revenues and combined ratio: Hong Kong, Malaysia and Singapore, on a 100% share basis; (ii) for underlying earnings, adjusted earnings and net income: India, Hong Kong, Malaysia, Singapore and Thailand, on a group share basis. China and Indonesia operations are not consolidated. Gross revenues increased by €178 million (+67%) to €444 million1. On a constant exchange rate and scope basis2 gross revenues increased by €41 million (+10%): Personal lines (46% of the gross revenues) were up €14 million (+7%) driven by Non Motor (€+10 million) with growth of Health business in Hong Kong notably through the HSBC bancassurance channel and by Motor (€+5 million) as a result of positive net new contracts mainly reflecting the increase in private car sales in Malaysia; Commercial lines (54% of the gross revenues) were up €28 million (+13%) mainly driven by (i) Health (€+16 million) from a large new client account and price increases in Hong Kong as well as volume growth in Singapore, (ii) Workers Compensation (€+4 million) due to price increases in Hong Kong and volume increase in Singapore, and (iii) Property (€+3 million) mainly driven by SME property business in Malaysia. Net technical result increased by €56 million (+72%) to €135 million. On a constant exchange rate and scope basis2, net technical result increased by €8 million (+6%). Current accident year loss ratio remained stable at 68.3%. On a constant scope basis, current accident year loss ratio increased by 0.6 point mainly due to (i) an increase in Personal Motor (+1.4 points to 72.4%) as Singapore suffered from a negative price effect and Malaysia from higher severity, while (ii) Commercial Lines loss ratio remained stable at 72.1% as Workers Compensation 1 €438 million after intercompany eliminations for Hong Kong, Singapore and Malaysia. 2 Restated for HSBC acquired portfolio in Hong Kong and Singapore starting November 2012. Half Year 2013 Financial Report 59 I I ACTIVITY REPORT deteriorated (+2.3 points to 77.5%) notably in Hong Kong, suffering from both higher frequency and severity and was offset by an improvement in Property (-1.4 points to 64.1%) driven by favorable claims experience in Malaysia. All accident year loss ratio decreased by 1.1 points to 65.7%. On a constant scope basis, all accident year loss ratio increased by 0.1 point due to the deterioration of current year loss ratio by +0.6 point, partly offset by higher positive favorable prior year reserve developments of -0.5 point mainly in Singapore. Expense ratio decreased by1.1 points to 27.5%. On a constant scope basis, the expense ratio decreased by 1.4 points mainly driven by lower acquisition expenses (-1.3 points) reflecting the lower commission paid to HSBC bank and a shift of business towards products with a lower commission rate. Enlarged expense ratio decreased by 1.3 points to 30.4% on a constant scope basis. As a result, the combined ratio was down 2.1 points to 93.2%. On a constant scope basis, combined ratio was down 1.2 points. Net investment result increased by €3 million to €9 million. On a constant exchange rate and scope basis, net investment result decreased by €1 million mainly from lower investment income in Hong Kong. Income tax expenses increased by €3 million to €-6 million. On a constant exchange rate and scope basis, income tax expenses increased by €1 million due to higher pre-tax underlying earnings. Underlying earnings increased by €20 million to €31 million1. On a constant exchange rate and scope basis, underlying earnings increased by €11 million. Adjusted earnings increased by €19 million to €30 million1. On a constant exchange rate and scope basis, adjusted earnings increased by €10 million driven by higher underlying earnings. Net income increased by €18 million to €14 million1. On a constant exchange rate basis, net income increased by €9 million driven by the increase in adjusted earnings and lower integration costs, partly offset by an amortization of the distribution agreement from the HSBC portfolio acquisition. 1 Thailand (Group share: 99.3%) and India (Group share : 26%) were consolidated for the first time in 2013. 60 Half Year 2013 Financial Report ACTIVITY REPORT International Insurance Segment The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income for the International Insurance Segment for the periods indicated: Consolidated Gross Revenues (in Euro million) HY 2013 HY 2012 FY 2012 AXA Corporate Solutions Assurance 1,341 1,339 2,072 AXA Global Life and AXA Global P&C 57 53 60 AXA Assistance 555 474 984 Other (a) 28 38 31 TOTAL 1,980 1,904 3,148 Intercompany transactions (71) (79) (161) Contribution to consolidated gross revenues 1,909 1,825 2,987 (a) Including AXA Liabilities Managers and AXA Corporate Solutions Life Reinsurance Company. Underlying, Adjusted earnings and Net Income (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) AXA Corporate Solutions Assurance 72 81 145 AXA Global Life and AXA Global P&C 8 11 22 AXA Assistance 9 11 20 Other (b) 14 15 (20) UNDERLYING EARNINGS 103 118 167 Net realized capital gains or losses attributable to shareholders 16 5 (7) ADJUSTED EARNINGS 119 122 160 Profit or loss on financial assets (under Fair Value option) & derivatives (11) 15 23 Exceptional operations (including discontinued operations) (24) (1) Goodwill and related intangibles impacts Integration and restructuring costs (1) (2) (4) NET INCOME 83 135 178 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Including AXA Liabilities Managers and AXA Corporate Solutions Life Reinsurance Company. Half Year 2013 Financial Report 61 I I ACTIVITY REPORT AXA Corporate Solutions Assurance (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) Gross revenues Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. 1,341 82.4% 81.8% 210 15.3% 90 124 (50) - (1) 72 6 78 (9) - - - 69 1,339 82.3% 82.4% 200 15.1% 101 129 (47) - (1) 81 2 83 14 - - - 97 2,072 83.6% 82.2% 363 15.6% 195 240 (93) - (2) 145 (3) 142 24 - - - 166 Gross revenues increased by €1 million to €1,341 million 1 . On a comparable basis, gross revenues increased by €15 million (+1%) notably in Motor (+12%), Marine (+6%) and Property (+4%), driven by portfolio developments and tariff increases. This growth was partly offset by a decrease in Aviation (-21%) mainly due to tariff decrease following the favorable claims developments in recent years and in Construction (-19%), mainly due to the non-renewal of a large captive contract. Net technical result increased by €10 million (+5%) to €210 million. On a constant exchange rate basis, net technical result increased by €11 million (+5%). Current accident year loss ratio increased by 0.1 point to 82.4% driven by an increase in the frequency of large losses in Construction, partly offset by lower large claims in Property; All accident year loss ratio improved by 0.6 point to 81.8% driven by higher positive prior year reserve developments in Marine and Aviation, partly offset by negative developments, mainly in Liability. Expense ratio increased by 0.2 point to 15.3%. The acquisition expense ratio was up 0.6 point reflecting a shift in the portfolio from captive business whilst the administrative expense ratio was down 0.4 point reflecting efficiency programs, notably on IT. Enlarged expense ratio increased by 1.2 points to 19.5%. As a result, the combined ratio improved by 0.4 point to 97.1%. On both current and constant exchange rate basis, net investment result decreased by €10 million (-10%) to €90 million mainly due to lower income from fixed income assets and mutual funds. 1 €1,337 million after intercompany eliminations. 62 Half Year 2013 Financial Report ACTIVITY REPORT Income tax expenses increased by €3 million (+6%) to €-50 million. On a constant exchange rate basis, income tax expenses increased by €3 million (+7%) mainly due to higher taxes on prior year reserve developments and an unfavorable country mix. As a result, underlying earnings decreased by €8 million (-10%) to €72 million. Adjusted earnings decreased by €5 million (-6%) to €78 million. On a constant exchange rate basis, adjusted earnings decreased by €4 million (-5%) due to lower underlying earnings, partly offset by higher realized capital gains mainly on real estate assets. Net income decreased by €27 million (-28%) to €69 million, on both reported and constant exchange rate basis, due to an unfavorable change in the fair value of mutual funds mainly due to higher interest rates and credit spread widening, as well as a negative foreign exchange rate impact. Half Year 2013 Financial Report 63 I I ACTIVITY REPORT AXA Global Life and AXA Global P&C1 Underlying earnings decreased by €3 million to €8 million as a result of lower technical results in AXA Motor cover as well as a lower result in AXA Global Life and higher expenses. Adjusted earnings decreased by €3 million to €8 million as a result of lower underlying earnings. Net income decreased by €6 million to €7 million mainly due to lower adjusted earnings and a less favorable change in the fair value of financial assets and derivatives (€-2 million). AXA Assistance Gross revenues increased by €81 million (+17%) to €555 million 2 . On a comparable basis, primarily excluding the internal transfer from AXA France of some service guarantees, gross revenues increased by €32 million (+7%) to € 514 million mainly driven by strong developments in Travel and Motor activities, notably reflecting higher revenues from some large contracts in Spain and the US, combined with growth of the in- force base in France, despite lower revenues in the UK. Underlying earnings decreased by €2 million (-17%) to €9 million mainly driven by the non-repeat of a favorable impact in unexpired risk reserve release (€-4 million), partly offset by positive developments in France, new business growth in Spain and the US, and improvements on Auto and Travel businesses in Brazil, mitigated by higher development costs in high growth markets. Adjusted earnings decreased by €1 million to €9 million mainly driven by lower underlying earnings. Net income decreased by €23 million to €-17 million primarily reflecting a €24 million exceptional capital loss following the anticipated disposal of a French based company. Other international activities Underlying earnings decreased by €2 million to €14 million. On a constant exchange rate basis, underlying earnings decreased by €1 million. Adjusted earnings increased by €6 million to €24 million. On a constant exchange rate basis, adjusted earnings increased by €6 million mainly as a result of higher net realized capital gains due to Real Estate restructuring and on fixed maturities. Net income increased by €4 million to €24 million. On a constant exchange rate basis, net income increased by €5 million driven by higher adjusted earnings. 1 Gathers both central teams from Life & Savings and Property & Casualty global business lines in addition to Group reinsurance operations. 2 €487 million after intercompany eliminations. 64 Half Year 2013 Financial Report ACTIVITY REPORT Asset Management Segment The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income for the Asset Management Segment for the periods indicated: Consolidated Gross Revenues (in Euro million) HY 2013 HY 2012 FY 2012 AllianceBernstein 1,087 1,004 2,097 AXA Investment Managers 828 730 1,577 TOTAL 1,915 1,734 3,674 Intercompany transactions (174) (159) (332) Contribution to consolidated gross revenues 1,741 1,575 3,343 Underlying, Adjusted earnings and Net Income (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) AllianceBernstein 76 74 159 AXA Investment Managers 118 85 220 UNDERLYING EARNINGS 194 159 379 Net realized capital gains or losses attributable to shareholders (1) (1) (4) ADJUSTED EARNINGS 194 159 375 Profit or loss on financial assets (under Fair Value option) & derivatives 8 3 13 Exceptional operations (including discontinued operations) 0 (0) 0 Goodwill and related intangibles impacts Integration and restructuring costs (6) (10) (76) NET INCOME 196 152 311 (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. Half Year 2013 Financial Report 65 I I ACTIVITY REPORT AllianceBernstein (in Euro million) HY 2013 HY 2012 FY 2012 Gross revenues 1,087 1,004 2,097 Net investment result (1) 0 2 Total revenues 1,086 1,004 2,100 General expenses Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = $ (880) 205 (58) (71) 76 0 76 2 0 0 (2) 77 1.3129 (826) 178 (40) (64) 74 0 74 2 0 0 (9) 67 1.297 (1,737) 363 (76) (128) 159 0 159 4 0 0 (74) 88 1.288 Assets under Management (\"AUM\") increased by €5 billion from year-end 2012 to €354 billion at June 30, 2013 as a result of €5 billion favorable foreign exchange rate impact and net inflows of €2 billion (€6 billion net inflows from Institutional clients partly offset by €-2 billion net outflows from Private Clients and €-2 billion net outflows from Retail clients), partly offset by €-2 billion market depreciation. Gross revenues increased by €83 million (+8%) to €1,087 million1. On a comparable basis, gross revenues increased by €95 million (+10%) primarily due to higher investment management fees resulting from a 6% increase in average AUM, higher Institutional Research Services fees up 7%, and distribution fees up 30% due to higher Retail average AUM. Net investment result decreased by €1 million to €-1 million. On a constant exchange rate basis, net investment result decreased by €1 million. General expenses increased by €54 million (+7%) to €-880 million. On a constant exchange rate basis, general expenses increased by €65 million (+8%) due to higher compensation expenses resulting from increased revenues partly offset by lower general administrative expenses, primarily office and related expenses as well as professional fees. As a result, the underlying cost income ratio improved by 2.1 points to 77.3%. Income tax expenses increased by €18 million (+46%) to €-58 million. On a constant exchange rate basis, income tax expenses increased by €19 million (+48%) primarily due to higher pre-tax underlying earnings and the non repeat of 2012 positive tax one-offs (€-8 million). Underlying and adjusted earnings increased by €2 million (+3%) to €76 million. On a constant exchange rate basis, underlying and adjusted earnings increased by €3 million (+5%). 1 €1,047 million after intercompany eliminations. 66 Half Year 2013 Financial Report ACTIVITY REPORT AXA ownership of AllianceBernstein at June 30, 2013 was 64.2%, down 1.3% from December 31, 2012 due to the granting of units in 2013 for 2012 deferred compensation, partly offset by repurchases of AllianceBernstein units during 2013 to fund deferred compensation plans. Net income increased by €11 million (+15%) to €77 million. On a constant exchange rate basis, net income increased by €11 million (+17%) due to the increase in adjusted earnings and lower restructuring costs. Half Year 2013 Financial Report 67 I I ACTIVITY REPORT AXA Investment Managers (“AXA IM”) HY 2013 HY 2012 restated (a) (in Euro million) FY 2012 restated (a) Gross revenues 828 730 1,577 Net investment result (9) (11) (17) Total revenues 819 718 1,560 General expenses Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a)Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (631) 188 (65) (6) 118 (1) 117 6 0 0 (4) 120 (579) 139 (50) (4) 85 (1) 85 1 (0) 0 (0) 85 (1,219) 341 (111) (11) 220 (4) 216 9 0 0 (2) 223 Assets under Management (\"AUM\") increased by €15 billion from year-end 2012 to €568 billion at the end of June 2013 as a result of €14 billion favorable market impact and €10 billion net inflows, partly offset by €-8 billion unfavorable foreign exchange impact, mainly due to GBP weakening vs. the Euro, and €-2 billion negative scope impact, mainly related to the partial sale of the UK Life & Savings operations. Net inflows amounted to €10 billion over the first half of 2013, mainly driven by inflows on (i) Retail (€+4 billion) and (ii) Institutional (€+4 billion), notably from AXA Fixed Income, Asian Joint Ventures, AXA Framlington, AXA Private Equity and AXA Real Estate, as well as on (iii) Main Fund (€+3 billion). Gross revenues increased by €98 million (+13%) to €828 million1. On a constant exchange rate basis and excluding distribution fees (retroceded to distributors), net revenues increased by €96 million (+18%) to €631 million, mainly driven by (i) higher management fees (€+62 million or +13%), driven by +7% higher average AUM and +1.0 higher management fee bps, owing to an improved client and product mix, (ii) higher AXA Real Estate transaction fees (€+18 million) and (iii) higher performance fees (€+13 million) mainly from AXA Structured Finance. Net investment result improved by €2 million (+20%) to €-9 million. On a constant exchange rate basis, net investment result increased by €3 million (+23%) mainly driven by lower debt financing expense. General expenses increased by €51 million (+9%) to €-631 million. On a constant exchange rate basis and excluding distribution fees, general expenses increased by €48 million (+12%) to €-434 million mainly due to variable compensation increases, as well as higher expenses at AXA Private Equity. As a result, the underlying cost income ratio improved by 3.9 points to 69.8%. Income tax expenses increased by €15 million (+30%) to €-65 million. On a constant exchange rate basis, income tax expenses increased by €16 million (+32%) due to higher pre-tax earnings. Underlying earnings increased by €32 million (+38%) to €118 million. On a constant exchange rate basis, underlying earnings increased by €34 million (+40%). 1 €694 million after intercompany eliminations. 68 Half Year 2013 Financial Report ACTIVITY REPORT Adjusted earnings increased by €32 million (+38%) to €117 million. On a constant exchange rate basis, adjusted earnings increased by €34 million (+40%), in line with the improvement in underlying earnings. Net income increased by €34 million (+40%) to €120 million. On a constant exchange rate basis, net income increased by €36 million (+42%) in line with the improvement in adjusted earnings. Half Year 2013 Financial Report 69 I I ACTIVITY REPORT Banking The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and the net income attributable to AXA’s banking activities for the periods indicated: Consolidated Gross Revenues (in Euro million) HY 2013 HY 2012 FY 2012 AXA Banks (a) 287 233 468 Belgium (b) 189 167 312 France 66 36 94 Hungary 19 15 35 Germany 11 12 23 Other (c) 3 2 4 Other 2 2 6 TOTAL 290 236 474 Intercompany transactions 4 (9) (8) Contribution to consolidated gross revenues 293 226 466 (a) Of which AXA Bank Europe and its branches: €211 million. (b) Includes commercial activities in Belgium and shared services of AXA Bank Europe (treasury and support functions). (c) Includes Slovakia and Czech Republic. Underlying, Adjusted earnings and Net Income (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) AXA Banks (b) 62 7 8 Belgium (c) 63 27 31 France 0 (16) (15) Hungary Germany 2 2 3 Other (d) (3) (6) (12) Other (2) (2) (3) UNDERLYING EARNINGS 61 5 4 Net realized capital gains or losses attributable to shareholders 0 (11) (5) ADJUSTED EARNINGS 61 (6) (1) Profit or loss on financial assets (under Fair Value option) & derivatives (13) 10 (3) Exceptional operations (including discontinued operations) (27) (11) (30) Goodwill and related intangibles impacts Integration and restructuring costs (1) (2) (4) NET INCOME 20 (9) (38) (a) Restated means comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) of which AXA Bank Europe and its branches: €60 million. (c) Includes commercial activities in Belgium for €24 million and shared services of AXA Bank Europe (treasury and support functions) for €38 million. (d) Includes Slovakia and Czech Republic. 70 Half Year 2013 Financial Report ACTIVITY REPORT Belgium Net banking revenues increased by €22 million (+13%) to €189 million. Operating net banking revenues1 increased by €40 million (+27%) to €211 million mainly due to higher interest margin (€+39 million). Underlying earnings increased by €36 million (+132%) to €63 million due to higher operating net banking revenues (€+40 million), lower distribution commissions (€+4 million) and tight expense management (€+2 million), partly offset by an increase in provision for loan losses (€-7 million) due to growing loan portfolio and deterioration of the economic environment. Adjusted earnings increased by €48 million to €63 million mainly due to the increase in underlying earnings and the absence of impairments on fixed income assets (€+12 million). Net income increased by €12 million (+33%) to €47 million. Positive evolution of adjusted earnings (€+48 million) and the change in fair value of interest rate derivatives (€+14 million), was partly offset by a negative change in fair value of own debt due to decreasing liquidity spread (€-24 million), lower foreign exchange result (€-17 million) and the non repeat of the deconsolidation of Switzerland (€8 million reflecting the transfer of the client portfolio to Bank zweiplus in 2012). France Net banking revenues increased by €+29 million (+81%) to €66 million. Operating net banking revenues1 increased by €+21 million (+51%) mainly due to lower interests paid to customers on savings accounts following the non repeat of the promotional campaign during the first half of 2012, as well as higher interest income on retail loans (primarily mortgages) as a consequence of increasing new credit production. Underlying earnings and adjusted earnings increased by €+16 million to €+0 million, following the rise in operating net banking revenues, in a context of lower cost of risk and administrative expenses. Net income increased by €21 million to €+2 million as a result of the increase in underlying earnings and the favorable impact from interest-rate hedging instruments. Hungary Net income increased by €2 million to €-17 million due to an increased commercial margin mainly following the repricing of the mortgage book (€+5 million), decreased administrative expenses resulting from implemented cost-cutting program (€+2 million), higher fee income (€+1 million), compensated by an increased provision for loan losses (€-4 million) due to the deteriorating outstanding credit portfolio and the depreciation of Hungarian currency. 1 Before intercompany eliminations and before realized capital gains/losses or changes in fair value of « fair-value-P&L » assets and of hedging instruments. Half Year 2013 Financial Report 71 I I ACTIVITY REPORT Germany Net banking revenues decreased by €2 million (-14%) to €11 million1 mainly due to reduced commissions and less interest received from loan business, partly compensated by lower interest paid. Underlying earnings increased by €1 million (+44%) to €2 million resulting from lower administrative expenses and credit loss allowances, partly offset by lower revenues. Adjusted earnings and net income remained stable at €2 million. Czech Republic and Slovakia On May 21, 2013, AXA signed a partnership agreement with UniCredit Bank (UCB) in Czech Republic and Slovakia. Based on this partnership, AXA’s 120,000 banking clients in Czech Republic and Slovakia were invited to open an account with UCB, while UCB will distribute AXA’s insurance products through its network in both countries. As a result, AXA will cease banking operations in these two countries in the course of the second half of 2013. Net income decreased by €6 million to €-12 million mostly driven by one-off expenses related to the closure of banking activities (€9 million). 1 €15 million after intercompany eliminations. 72 Half Year 2013 Financial Report ACTIVITY REPORT Holdings and other companies The Holdings and other companies consist of AXA’s non-operating companies, including mainly AXA parent company, AXA France Assurance, AXA Financial, AXA United Kingdom Holdings, AXA Germany Holdings, AXA Belgian Holding, CDOs and real estate companies. Underlying, Adjusted earnings and Net Income (in Euro million) HY 2013 HY 2012 restated (a) FY 2012 restated (a) AXA (283) (279) (591) Other French holding companies (28) (33) (39) Foreign holding companies (130) (140) (245) Other 1 1 1 UNDERLYING EARNINGS (441) (451) (875) Net realized capital gains or losses attributable to shareholders (28) (60) (72) ADJUSTED EARNINGS (469) (511) (947) Profit or loss on financial assets (under Fair Value option) & derivatives 23 (34) (228) Exceptional operations (including discontinued operations) (10) 21 (17) Goodwill and related intangibles impacts 0 0 0 Integration and restructuring costs (7) (0) (1) NET INCOME (464) (523) (1,192) (a) Restated means comparative information related to previous periods was retrospectively restated for the IAS19 amendment. AXA1 Underlying earnings decreased by €5 million to €-283 million mainly due to the new French tax of 3% on dividend paid by the Company for €-46 million partly offset by €+17 million increase in dividends from non- consolidated subsidiaries and €+19 million gain related to the hedging program on Performance Units at Group holding level. Adjusted earnings increased by €51 million to €-288 million mainly driven by the end of the premium amortization on equity call options in 2012 (€-48 million in 1H 2012). Net income increased by €81 million to €-224 million. Excluding profits linked to the sale of the Group’s Canadian operations in respect of the deferred contingent consideration (€+8 million in 1H 2013 vs. €+68 million in 1H 2012), Net income increased by €141 million mainly driven by: €+51 million from adjusted earnings evolution; €+128 million from a change in mark to market of interest rate and foreign exchange derivatives which are not eligible to hedge accounting; and €-66 million from the non repeat of 1H 2012 time value of equity options. 1 All the figures are after tax. Half Year 2013 Financial Report 73 I I ACTIVITY REPORT Other French holding companies AXA FRANCE ASSURANCE Underlying earnings, adjusted earnings and net income increased by €1 million to €-23 million mainly due to lower tax expenses (€+2 million) resulting from lower inter-company dividends received. OTHER FRENCH HOLDINGS Underlying earnings increased by €4 million to €-5 million mainly due to lower financial expenses. Adjusted earnings increased by €4 million to €-5 million driven by underlying earnings evolution. Net income decreased by €11 million to €-26 million linked to the restructuring of the participation in Bharti AXA General Insurance (€-21 million vs. €-4 million), partly offset by adjusted earnings evolution. Foreign Holding Companies AXA FINANCIAL INC. Underlying earnings decreased by €1 million (-1%) to €-78 million. On a constant exchange rate basis, underlying earnings decreased by €2 million (-3%) mainly reflecting the impact of higher share-based compensation expenses. Adjusted earnings decreased by €1 million (-1%) to €-78 million. On a constant exchange rate basis, adjusted earnings decreased by €2 million (-3%), in line with underlying earnings evolution. Net income increased by €1 million (+1%) to €-100 million. On a constant exchange rate basis, net income remained stable reflecting adjusted earnings evolution offset by a more favorable change in the fair value of cross currency swaps. AXA UK HOLDINGS Underlying earnings increased by €1 million (+12%) to €-11 million. On a constant exchange rate basis, underlying earnings increased by €1 million. Adjusted earnings increased by €1 million (+11%) to €-11 million. On a constant exchange rate basis, adjusted earnings increased by €1 million in line with the improvement in underlying earnings. Net Income decreased by €18 million to €-20 million. On a constant exchange rate basis, net income decreased by €19 million as the improvement in adjusted earnings (€+1 million) was more than offset by the adverse movements in the fair value attributable to foreign exchange (€-14 million) due to adverse changes in exchange rates as well as higher restructuring costs (€-6 million) relating to central service teams. GERMAN HOLDING COMPANIES Underlying earnings increased by €11 million (+59%) to €-8 million mainly due to lower pension costs and general expenses. Adjusted earnings decreased by €8 million (-32%) to €-32 million mainly driven by higher impairment charges, notably on real estate funds, partly compensated by higher underlying earnings. 74 Half Year 2013 Financial Report ACTIVITY REPORT Net income decreased by €9 million (-31%) to €-39 million mainly due to lower adjusted earnings and an unfavorable change in the fair value of fixed income funds and derivatives. BELGIAN HOLDING COMPANY Underlying earnings were stable at €-6 million. Adjusted earnings increased by €1 million to €-6 million, mainly due to higher realized capital gains. Net income was stable at €-5 million mainly driven by adjusted earnings evolution. MEDITERRANEAN AND LATIN AMERICAN REGION HOLDINGS Underlying and adjusted earnings increased by €5 million (+16%) to €-25 million. On a constant exchange rate basis, underlying and adjusted earnings increased by €5 million (+16%) reflecting lower financial charges. Net income increased by €10 million (+31%) to €-22 million. On a constant exchange rate basis, net income increased by €10 million (+31%) driven by the increase in adjusted earning and a favorable change in fair value of financing hedges. Half Year 2013 Financial Report 75 I I ACTIVITY REPORT Outlook Despite early signs of global recovery in the first half of 2013, the short-term economic outlook remains challenging. In this context, the AXA Group carries on focusing its efforts towards the execution of its Ambition AXA plan whilst preparing for the world of tomorrow, by accelerating digital investments whilst maintaining our efficiency discipline, which will allow to better access and serve our clients. In the second half of 2013, the Life & Savings momentum will continue to be driven by the change in business mix towards selling more profitable Unit-Linked and Protection & Health products. In Property & Casualty, underwriting discipline and efficiency efforts should contribute to sustain profitability, whilst the pricing environment should continue to be supportive overall despite experiencing a slowdown in price increases in certain markets. The Asset Management business should continue to benefit from a good momentum driven by a favorable investment performance whilst remaining sensitive to the evolution of financial markets. 76 Half Year 2013 Financial Report ACTIVITY REPORT Glossary The split between high growth market and mature market is detailed below: The notion of High Growth market includes the following countries: Central & Eastern countries (Poland, Czech Republic, Slovakia, Hungary, Ukraine, Russia), Hong Kong, South-East Asia (Singapore, Indonesia, Thailand, Philippines, Malaysia) India, China, and the Mediterranean and Latin American Region (Morocco, Turkey, Gulf, Mexico), excluding Direct operations. The notion of Mature Market includes the following countries: the United States, the United Kingdom, Benelux, Germany, Switzerland, Japan, Italy, Spain, Portugal, Greece and France. COMPARABLE BASIS FOR REVENUES AND ANNUALIZED PREMIUMS EQUIVALENT On a comparable basis means that the data for the current period were restated using the prevailing foreign currency exchange rates for the same period of prior year (constant exchange rate basis). It also means that data in one of the two periods being compared were restated for the results of acquisitions, disposals and business transfers (constant structural basis) and for changes in accounting principles (constant methodological basis). ADJUSTED EARNINGS Adjusted earnings represent the net income (Group share) before the impact of: (i) (ii) (iii) (iv) Exceptional operations (primarily change in scope and discontinued operations) Integration and restructuring costs related to material newly acquired companies as well as restructuring and associated costs related to productivity improvement plans Goodwill and other related intangibles, and Profit or loss on financial assets accounted for under fair value option (excluding assets backing liabilities for which the financial risk is borne by the policyholder), foreign exchange impacts on assets and liabilities, and derivatives related to invested assets. Derivatives related to invested assets: Include all foreign exchange derivatives, except the ones related to currency options in earnings hedging strategies which are included in underlying earnings, Exclude derivatives related to insurance contracts evaluated according to the “selective unlocking” accounting policy, And also exclude derivatives involved in the economic hedging of realized gains and impairments of equity securities and real estate backing general account and shareholders’ funds, for which cost at inception, intrinsic value and pay-off flow through adjusted earnings, and only time value flows through net income when there is no intention to sell the derivatives in the short term (if not, flows through adjusted earnings). UNDERLYING EARNINGS Underlying earnings correspond to adjusted earnings excluding net capital gains or losses attributable to shareholders. Net capital gains or losses attributable to shareholders include the following elements net of tax: Realized gains and losses and change in impairment valuation allowance (on assets not designated under fair value option or trading assets), Cost at inception, intrinsic value and pay-off of derivatives involved in the economic hedging of realized gains and impairments of equity securities and real estate backing general account and shareholders’ funds, Related impact on policyholder participation (Life & Savings business), Half Year 2013 Financial Report 77 I I ACTIVITY REPORT DAC and VBI amortization or other reactivity to those elements if any (Life & Savings business) and net of hedging if any. EARNINGS PER SHARE Earnings per share (EPS) represent AXA's consolidated earnings (including interest charges related to undated debts recorded through shareholders’ equity), divided by the weighted average number of outstanding ordinary shares. Diluted earnings per share (diluted EPS) represent AXA's consolidated earnings (including interest charges related to undated debts recorded through shareholders’ equity), divided by the weighted average number of outstanding ordinary shares, on a diluted basis (that is to say including the potential impact of all outstanding dilutive stock options being exercised performance shares, and conversion of existing convertible debt into shares, provided that their impact is not anti-dilutive). RETURN ON EQUITY (“ROE”) The calculation is prepared with the following principles: For net income ROE: Calculation is based on consolidated financial statements, i.e. shareholders’ equity including undated subordinated debt (“Super Subordinated Debts” TSS / “Undated Subordinated Debts” TSDI) and Other Comprehensive Income “OCI”, and net income not reflecting any interest charges on TSS / TSDI. For adjusted and underlying ROE: o All undated subordinated debts (TSS / TSDI) are treated as financing debt, thus excluded from shareholders’ equity Interest charges on TSS / TSDI are deducted from earnings o o OCI is excluded from the average shareholders’ equity. LIFE & SAVINGS MARGIN ANALYSIS Life & Savings margin analysis is presented on an underlying basis. Even though the presentation of Margin Analysis is not the same as the Statement of Income (underlying basis), it is based on the same GAAP measures as used to prepare the Statement of Income in accordance with IFRS. As a result, the operating income under the Margin Analysis is equal to that reported in AXA’s Statement of Income for the segment. There are certain material differences between the detailed line-by-line presentation in the Statement of Income and the components of Margin Analysis as set out below. o For insurance contracts and investment contracts with Discretionary Participation Features (DPF): (i) Gross premiums (net of deposits), fees and other revenues are allocated in the Margin Analysis based on the nature of the revenue between “Fees and Revenues” and “Net Technical Margin”. Policyholders’ interest in participating contracts is reflected as a change in insurance benefits in the Statement of Income. In the Margin Analysis, it is allocated to the related margin, i.e. primarily “Investment Margin” and “Net Technical Margin”. The “Investment margin” represents the net investment result in the Statement of Income and is adjusted to take into account the related policyholders’ participation (see above) as well as changes in specific reserves linked to invested assets’ returns and to exclude the fees on (or contractual charges included in) contracts with the financial risk borne by policyholders, which are included in “Fees and Revenues”. Change in URR (Unearned Revenue Reserve – capitalization net of amortization) is presented in the line “Change in unearned premiums net of unearned revenues and fees” in the underlying Statement of Income, whereas it is located in the line “Fees & Revenues” in the Margin analysis. (ii) (iii) (iv) o For investment contracts without DPF: (i) Deposit accounting is applied. As a consequence, fees and charges related to these contracts are presented in the underlying Statement of Income within Gross consolidated revenues on a separate line, and in Margin analysis in the lines “Fees & Revenues” and “Net Technical margin”. 78 Half Year 2013 Financial Report ACTIVITY REPORT (ii) Change in UFR (Unearned Fees Reserve - capitalization net of amortization) is presented in the line “Change in unearned premiums net of unearned revenues & fees” in the underlying Statement of Income, whereas it is located in the line “Fees & Revenues” in the Margin analysis. Underlying Investment margin includes the following items: (i) (ii) Net investment income Interests and bonuses credited to policyholders and unallocated policyholder bonuses (and the change in specific reserves purely linked to invested assets returns) related to the net investment income. Underlying Fees & Revenues include: (i) (ii) (iii) (iv) Revenues derived from mutual fund sales (which are part of consolidated revenues), Loadings charged to policyholders on premiums / deposits and fees on funds under management for separate account (unit-linked) business, Loadings on (or contractual charges included in) premiums / deposits received on all general account product lines, Deferral income such as capitalization net of amortization of URR (Unearned Revenue Reserve) and UFR (Unearned Fee Reserve), Other fee revenues, e.g., fees received on financial planning or sales of third party products. (v) Underlying Net Technical margin includes the following components: (i) (ii) (iii) (iv) (v) (vi) Mortality/morbidity margin: The amount charged to the policyholder in respect of mortality/morbidity for the related period less benefits and claims. It is equal to the difference between income for assuming risk and the actual cost of benefits. This margin does not include the claims handling costs and change in claims handling cost reserves, Surrender margin: The difference between the benefit reserve and the surrender value paid to the policyholder in the event of early contract termination, GMxB (Variable Annuity guarantees) active financial risk management is the net result from GMxB lines corresponding to explicit charges related to these types of guarantees less cost of hedge. It also includes the unhedged business result, Policyholder bonuses if the policyholder participates in the risk margin, Ceded reinsurance result, Other changes in insurance reserves are all the reserves strengthening or release coming from changes in valuation assumptions, additional reserves for mortality risk and other technical impacts such as premium deficiency net of derivative if any. Underlying Expenses are: (i) Acquisition expenses, including commissions and general expenses allocated to new business, related to insurance products as well as to other activities (e.g., mutual fund sales), Capitalization of acquisition expenses linked to new business: Deferred Acquisition Costs (DAC) and net rights to future management fees only for investment contracts without DPF, Amortization of acquisition expenses on current year and prior year new business, including the impact of interest capitalized: amortization charge for Deferred Acquisition Costs (DAC) and net rights to future management fees only for investment contracts without DPF, Administrative expenses, Claims handling costs, Policyholder bonuses if the policyholder participates in the expenses of the company. (ii) (iii) (iv) (v) (vi) Half Year 2013 Financial Report 79 I I ACTIVITY REPORT Underlying VBI amortization includes VBI (Value of Purchased Life Business In-force) amortization related to underlying margins, as well as amortization of other intangibles related to the in-force business Life & Savings underlying cost income ratio: Underlying expenses plus underlying VBI amortization divided by \"underlying\" operating margin, where \"Underlying\" operating margin is the sum of (i) Underlying Investment margin; (ii) Underlying Fees and revenues, and (iii) Underlying Net technical Margin (all items defined above). PROPERTY & CASUALTY (INCLUDING AXA CORPORATE SOLUTIONS ASSURANCE) Underlying net investment result includes the net investment income less the recurring interests credited to insurance annuity reserves Underlying net technical result is the sum of the following components: (i) (ii) (iii) Earned premiums, gross of reinsurance, Claims charges, gross of reinsurance, Change in claims reserves, including claims handling costs reserves, gross of reinsurance, excluding the recurring interests credited to insurance annuity reserves, Claims handling costs, Net result of ceded reinsurance. (iv) (v) Current accident year loss ratio net of reinsurance is the ratio of: (i) current year claims charge gross of reinsurance + claims-handling costs + result of reinsurance ceded on current accident year, excluding the recurring interests credited to the insurance annuity reserves, to Earned revenues, gross of reinsurance. (ii) All accident year loss ratio net of reinsurance is the ratio of: (i) all accident years claims charge gross of reinsurance + claims-handling costs + result of reinsurance ceded on all accident years excluding the recurring interests credited to the insurance annuity reserves, to Earned revenues, gross of reinsurance. (ii) Underlying expense ratio is the ratio of: (i) (ii) Underlying expenses (excluding claims handling costs), to Earned revenues, gross of reinsurance. Underlying expenses include two components: expenses (including commissions) related to acquisition of contracts (with the related acquisition ratio) and all other expenses (with the related administrative expense ratio). Underlying expenses exclude customer intangible amortization and integration costs related to material newly acquired companies. The enlarged expense ratio is the sum of the expense ratio and claims handling cost ratio. The underlying combined ratio is the sum of the underlying expense ratio and the all accident year loss ratio. ASSET MANAGEMENT Net New Money: Inflows of client money less outflows of client money. Net New Money measures the impact of sales efforts, product attractiveness (mainly dependent on performance and innovation), and the general market trend in investment allocation. Underlying Cost Income Ratio: (general expenses net of distribution revenues) / (gross revenues excluding distribution revenues). 80 Half Year 2013 Financial Report ACTIVITY REPORT Assets Under Management (AUM) are defined as the assets whose management has been delegated by their owner to an asset management company such as AXA Investment Managers and AllianceBernstein. AUM only includes funds and mandates which generate fees and exclude double counting. BANKING Net New Money is a banking volume indicator. It represents the net cash flows of customers’ balances in the bank, with cash inflows (collected money) and cash outflows (exiting money). It includes market effect and capitalized interests over the period. Net operating revenues are disclosed before intercompany eliminations and before realized capital gains/losses or changes in fair value of « fair-value-P&L » assets and of hedging instruments. Half Year 2013 Financial Report 81 I II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 II Consolidated financial statements / Half Year 2013 82 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Table of Contents II .1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION .............................................................................. 85 II .2 CONSOLIDATED STATEMENT OF INCOME ..................................................................................................... 87 II .3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ..................................................................... 88 II .4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................... 89 II .5 CONSOLIDATED STATEMENT OF CASH FLOWS ........................................................................................... 91 Note 1 1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 1.7. 1.8. 1.9. 1.10. 1.11. 1.12. 1.13. 1.14. 1.15. 1.16. 1.17. 1.18. 1.19. Accounting principles.................................................................................................................... 93 General information .......................................................................................................................... 93 General Accounting principles ......................................................................................................... 93 Consolidation .................................................................................................................................... 96 Foreign currency translation of financial statements and transactions ............................................ 99 Segment reporting ............................................................................................................................ 99 Intangible assets .............................................................................................................................. 99 Investments from insurance, banking and other activities ............................................................. 100 Assets backing liabilities arising from contracts where the financial risk is borne by policyholders 102 Derivative instruments .................................................................................................................... 102 Assets/liabilities held for sale and assets/liabilities including discontinued operations ................. 103 Cash and cash equivalents ............................................................................................................ 103 Share capital and shareholders’ equity .......................................................................................... 104 Liabilities arising from insurance and investment contracts ........................................................... 104 Reinsurance ................................................................................................................................... 107 Financing debt ................................................................................................................................ 107 Other liabilities ................................................................................................................................ 107 Provisions for risks, charges and contingent liabilities ................................................................... 109 Revenue recognition ...................................................................................................................... 109 Subsequent events......................................................................................................................... 111 Note 2 2.1. 2.2. Scope of consolidation ................................................................................................................ 112 Consolidated companies ................................................................................................................ 112 Consolidated entities relating to specific operations ...................................................................... 115 Note 3 3.1. Consolidated statement of income by segment ....................................................................... 116 Consolidated statement of income by segment ............................................................................. 117 Note 4 4.1. 4.2. 4.3. Transactions announced in consolidated entities ................................................................... 119 MONY Portfolio transaction ............................................................................................................ 119 HSBC Portfolio ............................................................................................................................... 119 AXA Bank Switzerland ................................................................................................................... 120 Note 5 5.1. 5.2. 5.3. 5.4. 5.5. Investments .................................................................................................................................. 121 Breakdown of investments ............................................................................................................. 121 Investment in real estate properties ............................................................................................... 123 Unrealized gains and losses on financial investments ................................................................... 123 Financial assets subject to impairment .......................................................................................... 124 Financial assets recognized at fair value ....................................................................................... 125 Note 6 6.1. 6.2. 6.3. Shareholders’ equity and minority interests ............................................................................. 126 Impact of transactions with shareholders ....................................................................................... 126 Comprehensive income for the period ........................................................................................... 128 Change in minority interests ........................................................................................................... 130 Half Year 2013 Financial Report 83 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Note 7 Financing debt .............................................................................................................................. 131 Note 8 Net income per ordinary share ................................................................................................... 132 84 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 II .1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (in Euro million) Notes June 30, 2013 (a) December 31, 2012 Restated (a) (b) January 1, 2012 Restated (a) (b) Goodwill 15,417 15,754 15,855 Value of purchased business in force (c) 2,458 2,685 3,074 Deferred acquisition costs and equivalent 20,038 19,047 18,624 Other intangible assets 3,271 3,349 3,382 Intangible assets 41,184 40,835 40,935 Investments in real estate properties 17,518 17,192 16,061 Financial investments 426,987 441,469 418,765 Assets backing contracts where the financial risk is borne by policyholders (d) 154,681 147,162 134,230 5 Investments from insurance activities 599,187 605,823 569,056 5 Investments from banking and other activities 38,589 35,199 35,264 Investments in associates - Equity method 1,388 1,312 1,139 Reinsurers' share in insurance and investment contracts liabilities 10,239 10,558 10,698 Tangible assets 1,296 1,457 1,410 Deferred policyholders' participation assets 96 4 1,247 Deferred tax assets 2,660 3,060 3,355 Other assets 4,051 4,522 6,012 Receivables arising from direct insurance and inward reinsurance operations 16,252 14,968 13,346 Receivables arising from outward reinsurance operations 1,002 746 671 Receivables - current tax 1,700 1,855 2,347 Other receivables 16,164 15,318 16,325 Receivables 35,118 32,887 32,689 4 Assets held for sale including discountinued operations (e) 7,054 181 360 Cash and cash equivalents 24,816 30,546 31,072 TOTAL ASSETS 761,627 761,862 727,226 All invested assets are shown net of related derivative instruments impact. (a) AXA Japan closed its 2011 and 2012 full year accounts at September 30 and its 2013 half year accounts at March 31. Given significant movement in foreign exchange rates between September 30, 2011 and December 31, 2011, September 30, 2012 and December 31, 2012 and between March 31, 2013 and June 30, 2013, balance sheet items have been translated using respectively December 31, and June 30, exchange rates. (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (c) Amounts are gross of tax. (d) Includes assets backing contracts where the financial risk is borne by policyholders with Guaranteed Minimum features. (e) Assets and liabilities related to MONY Life Insurance Company portfolio for which the disposal process is not yet finalized were classified as held for sale as of June 30, 2013 (see Note 4.1). Half Year 2013 Financial Report 85 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 (in Euro million) Notes June 30, 2013 (a) December 31, 2012 Restated (a) (b) January 1, 2012 Restated (a) (b) Share capital and capital in excess of nominal value 25,753 25,549 25,188 Reserves and translation reserve 23,247 24,001 21,189 Net consolidated income - Group share 2,467 4,057 n/a Shareholders’ equity – Group share 51,468 53,606 46,377 Minority interests 2,353 2,355 2,367 6 TOTAL SHAREHOLDERS' EQUITY 53,820 55,961 48,745 Subordinated debt 8,197 7,317 7,108 Financing debt instruments issued 1,629 2,514 2,506 Financing debt owed to credit institutions 786 831 807 7 Financing debt 10,613 10,662 10,421 Liabilities arising from insurance contracts 356,075 362,378 358,146 Liabilities arising from insurance contracts where the financial risk is borne by policyholders (c) 120,588 113,921 104,642 Total liabilities arising from insurance contracts 476,663 476,299 462,788 Liabilities arising from investment contracts with discretionary participating features 35,793 36,350 37,858 Liabilities arising from investment contracts with no discretionary participating features 183 251 380 Liabilities arising from investment contracts with discretionary participating features and where the financial risk is borne by policyholders 4,039 4,080 3,621 Liabilities arising from investment contracts with no discretionary participating features and where the financial risk is borne by policyholders 30,643 29,983 26,336 Total liabilities arising from investment contracts 70,658 70,664 68,195 Unearned revenue and unearned fee reserves 3,006 2,897 2,975 Liabilities arising from policyholders' participation 25,423 31,357 17,944 Derivative instruments relating to insurance and investment contracts (1,207) (2,053) (2,056) LIABILITIES ARISING FROM INSURANCE AND INVESTMENT CONTRACTS 574,542 579,165 549,847 Liabilities arising from banking activities (d) 36,428 33,494 34,023 Provisions for risks and charges 11,256 11,952 10,891 Deferred tax liabilities 4,157 5,175 3,793 Minority interests of controlled investment funds and puttable instruments held by minority interest holders 6,244 3,775 3,896 Other debt instruments issued, notes and bank overdrafts (d) 4,495 4,510 6,272 Payables arising from direct insurance and inward reinsurance operations 7,630 8,955 7,212 Payables arising from outward reinsurance operations 5,904 5,352 5,179 Payables – current tax 1,030 1,170 1,194 Collateral debts relating to investments under a lending agreement or equivalent 23,488 24,397 27,509 Other payables 15,862 17,296 18,056 Payables 64,653 65,454 69,317 4 Liabilities held for sale including discontinued operations (e) 6,157 189 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 761,627 761,862 727,226 (a) AXA Japan closed its 2011 and 2012 full year accounts at September 30 and its 2013 half year accounts at March 31. Given significant movement in foreign exchange rates between September 30, 2011 and December 31, 2011, September 30, 2012 and December 31, 2012 and between March 31, 2013 and June 30, 2013, balance sheet items have been translated using respectively December 31, and June 30, exchange rates. (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (c) Includes liabilities arising from contracts where the financial risk is borne by policyholders with Guaranteed Minimum features. (d) Amounts are shown net of related derivative instruments impact. (e) Assets and liabilities related to MONY Life Insurance Company portfolio for which the disposal process is not yet finalized were classified as held for sale as of June 30, 2013 (see Note 4.1). 86 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 II .2 CONSOLIDATED STATEMENT OF INCOME (in Euro million, except EPS in Euro) Notes June 30, 2013 June 30, 2012 Restated (a) Gross written premiums 47,168 45,749 Fees and charges relating to investment contracts with no participating features 133 164 Revenues from insurance activities 47,301 45,913 Net revenues from banking activities 291 224 Revenues from other activities 2,451 2,268 Revenues (b) 50,044 48,405 Change in unearned premiums net of unearned revenues and fees (3,819) (3,962) Net investment income (c) 5,951 8,023 Net realized gains and losses relating to investments at cost and at fair value through shareholders'equity (d) 1,405 770 Net realized gains and losses and change in fair value of investments at fair value through profit and loss (e) 6,500 6,550 of which change in fair value of assets with financial risk borne by policyholders (f) 8,070 6,224 Change in investments impairment (g) (390) (390) Net investment result excluding financing expenses 13,466 14,953 Technical charges relating to insurance activities (f) (45,267) (45,696) Net result from outward reinsurance (938) (572) Bank operating expenses (67) (64) Acquisition costs (4,628) (4,310) Amortization of the value of purchased business in force (59) (47) Administrative expenses (4,770) (4,671) Change in tangible assets impairment (0) (0) Change in goodwill impairment and other intangible assets impairment (46) (67) Other income and expenses (109) (175) Other operating income and expenses (55,884) (55,602) Income from operating activities before tax 3,806 3,795 Income arising from investments in associates - Equity method 62 42 Financing debts expenses (h) (348) (289) Net income from operating activities before tax 3,520 3,548 Income tax (899) (903) Net operating income 2,621 2,645 Net consolidated income after tax 2,621 2,645 Split between : Net consolidated income - Group share 2,467 2,544 Net consolidated income - Minority interests 154 101 8 Earnings per share 0.98 1.02 8 Fully diluted earnings per share 0.97 1.02 (a) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Gross of reinsurance. (c) Net of investment management costs and including gains/losses from derivatives hedging variable annuities. (d) Includes impairment releases on investments sold. (e) Includes realized and unrealized forex gains and losses relating to investments at cost and at fair value through shareholders' equity. (f) Change in fair value of assets with financial risk borne by policyholders is offset by a balancing entry in technical charges relating to insurance activities. (g) Excludes impairment releases on investments sold. (h) Includes net balance of income and expenses related to derivatives on financing debt (however excludes change in fair value of these derivatives). Half Year 2013 Financial Report 87 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 II .3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in Euro million) June 30, 2013 (a) June 30, 2012 Restated (a) (b) Reserves relating to changes in fair value through shareholders' equity (2,526) 1,810 Translation reserves (1,000) 646 Items that may be reclassified subsequently to Profit or Loss (3,526) 2,456 Employee benefits actuarial gains and losses 325 (891) Items that will not be reclassified subsequently to Profit or Loss 325 (891) Net gains and losses recognized directly through shareholders' equity (3,201) 1,565 Net consolidated income 2,621 2,645 Split between: Net consolidated income - Group share 2,467 2,544 Net consolidated income - Minority interests 154 101 TOTAL COMPREHENSIVE INCOME (CI) (580) 4,210 Split between: Total comprehensive income - Group share (731) 4,052 Total comprehensive income - Minority interests 151 158 (a) AXA Japan closed its 2011 and 2012 full year accounts at September 30 and its 2013 half year accounts at March 31. Given significant movement in foreign exchange rates between September 30, 2011 and December 31, 2011, September 30, 2012 and December 31, 2012 and between March 31, 2013 and June 30, 2013, balance sheet items have been translated using respectively December 31, and June 30, exchange rates. (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. Amounts are presented net of tax, policyholders’ participation and other shadow accounting related movements. 88 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 II .4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (in Euro million, except for number of shares and nominal value) Attributable to shareholders Share Capital Other reserves Number of shares (in thousands) Nominal value (in Euros) Share Capital Capital in excess of nominal value Treasury shares Reserves relating to the change in fair value of financial instruments available for sale Reserves relating to the change in fair value of hedge accounting derivatives (cash flow hedge) Other (b) Translation reserves Undistributed profits and other reserves Shareholders' Equity Group share Minority interests Shareholders 'equity opening January 1, 2013 Restated (a) 2,388,611 2.29 5,470 20,749 (364) 10,887 134 5,735 (2,889) 13,885 53,606 2,355 Capital Capital in excess of nominal value Equity - share based compensation Treasury shares Others reserves - transaction on treasury shares Equity component of compound financial instruments Undated subordinated debt Financial expenses - Undated subordinated debt Others (including impact on change in scope) (c) 3,254 - - - - - - - - 2.29 - - - - - - - - 7 - - - - - - - - 28 23 - - - - - - - - 165 - - - - - - - - - - - - (0) - - - - - - - - - - - (19) - 252 (144) - - - - - - - - (0) - - - - - - - (1) 7 28 23 165 (19) - 252 (144) (1) - - - - - - - (153) Dividends paid (1,720) (1,720) Impact of transactions with shareholders 3,254 2.29 7 51 165 (0) 90 (0) (1,721) (1,408) (153) Reserves relating to changes in fair value through shareholders' equity Translation reserves Employee benefits actuarial gains and losses Net consolidated income Total Comprehensive Income (CI) - - - - - - - - - - (2,573) - - (2,573) 53 - - 53 (155) - - (155) (848) - - (848) 324 2,467 2,791 (2,519) (1,003) 324 2,467 (731) (6) 3 0 154 151 Shareholders' equity closing June 30, 2013 2,391,865 2.29 5,477 20,800 (199) 8,314 187 5,670 (3,736) 14,955 51,468 2,353 NB : amounts are presented net of impacts of shadow accounting and its effects on policyholders' participation, deferred acquisition costs, and value of business in force. (a) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Mainly undated subordinated debts (TSS, TSDI), and equity components of compounded financial instruments (e.g convertible bonds) (see Note 6.1.1.c). (c) Including changes in ownership interest in consolidated subsidiaries without losing control. Half Year 2013 Financial Report 89 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Share Capital Number of shares (in thousands) Nominal value (in Euros) Share Capital Capital in excess of nominal value Treasury shares Shareholders 'equity opening January 1, 2012 Restated 2,357,198 2.29 5,398 20,471 (385) Capital Capital in excess of nominal value Equity - share based compensation Treasury shares Others reserves - transaction on treasury shares Equity component of compound financial instruments Undated subordinated debt Financial expenses - Undated subordinated debt Others (including impact on change in scope) (c) 103 - - - - - - - - 2.29 - - - - - - - - 0 - - - - - - - - 1 16 - - - - - - - - 17 - - - - - Dividends paid Impact of transactions with shareholders 103 2.29 0 17 17 Reserves relating to changes in fair value through shareholders' equity Translation reserves Employee benefits actuarial gains and losses Net consolidated income - - - - - - - - - - Total Comprehensive Income (CI) Shareholders' equity closing June 30, 2012 2,357,301 2.29 5,398 20,488 (368) NB: amounts are presented net of impacts of shadow accounting and its effects on policyholders' participation, deferred acquisition costs, and value of business in force. (a) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the amendments to IAS19. (b) Mainly undated subordinated debts (TSS, TSDI), and equity components of compounded financial instruments (e.g convertible bonds) (see Note 6.1.2.c). (c) Including changes in ownership interest in consolidated subsidiaries without losing control. 90 (in Euro million, except for number of shares and nominal value) Attributable to shareholders (a) Other reserves Reserves relating to the change in fair value of financial instruments available for sale Reserves relating to the change in fair value of hedge accounting derivatives (cash flow hedge) Other (b) Translation reserves Undistributed profits and other reserves Shareholders' Equity Group share Minority interests 4,838 50 6,059 (2,298) 12,244 46,377 2,367 - - - - - - - (0) - - - - - - - - - - - (16) - - (148) - - - - - - - - 0 - - - - - - - (66) 0 1 16 17 (16) - - (148) (66) - - - - - - - (47) (1,626) (1,626) (0) (164) 0 (1,692) (1,822) (47) 1,725 62 1,788 23 - - 1,725 - - 62 135 - - 135 474 - - 474 (889) 2,544 1,655 609 (889) 2,544 4,052 37 (2) 101 158 6,563 112 6,031 (1,824) 12,207 48,607 2,479 Half Year 2013 Financial Report Avec et sans PB discrétionnaire II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 II .5 CONSOLIDATED STATEMENT OF CASH FLOWS June 30, 2012 Restated (a) (b) (in Euro million) June 30, 2013 (a) Operating income including discontinued operation before tax 3,520 3,548 Net amortization expense (c) 357 305 Change in goodwill impairment and other intangible assets impairment (d) 12 Net change in deferred acquisition costs and equivalent (782) (1,219) Net increase / (write back) in impairment on investments, tangible and other intangible assets 416 427 Change in fair value of investments at fair value through profit or loss (10,037) (8,265) Net change in liabilities arising from insurance and investment contracts (e) 11,886 14,193 Net increase / (write back) in other provisions (f) (4) (59) Income arising from investments in associates – Equity method (62) (42) Adjustment of non cash balances included in the operating income before tax 1,774 5,353 Net realized investment gains and losses 2,054 859 Financing debt expenses 348 287 Adjustment for reclassification to investing or financing activities 2,401 1,146 Dividends recorded in profit or loss during the period (1,692) (1,595) Investment income & expense recorded in profit or loss during the period (g) (4,825) (6,959) Adjustment of transactions from accrued to cash basis (6,516) (8,553) Net cash impact of deposit accounting 858 130 Dividends and interim dividends collected 1,922 1,797 Investment income (g) 6,730 8,961 Investment expense (excluding interests on financing and undated subordinated debts, margin calls and others) (1,478) (1,279) Net operating cash from banking activities 160 (772) Change in operating receivables and payables (2,111) (2,550) Net cash provided by other assets and liabilities (h) Tax expenses paid (2,055) (765) (804) (563) Other operating cash impact and non cash adjustment 291 (1,542) Net cash impact of transactions with cash impact not included in the operating income before tax 3,552 3,379 NET CASH PROVIDED / (USED) BY OPERATING ACTIVITIES 4,731 4,873 Purchase of subsidiaries and affiliated companies, net of cash acquired (18) (13) Disposal of subsidiaries and affiliated companies, net of cash ceded 5 178 Net cash related to changes in scope of consolidation (13) 165 Sales of debt instruments (h) 30,649 34,363 Sales of equity instruments and non controlled investment funds (h) (i) 10,693 9,077 Sales of investment properties held directly or not (h) 630 182 Sales and/or repayment of loans and other assets (h) (j) 8,255 13,445 Net cash related to sales and repayments of investments (h) (i) (j) 50,228 57,067 Purchases of debt instruments (h) (32,014) (36,603) Purchases of equity instruments and non controlled investment funds (h) (i) (12,028) (9,806) Purchases of investment properties held direct or not (h) (1,236) (545) Purchases and/or issues of loans and other assets (h) (j) (12,416) (14,357) Net cash related to purchases and issuance of investments (h) (i) (j) (57,694) (61,311) Sales of tangible and intangible assets 4 3 Purchases of tangible and intangible assets (200) (230) Net cash related to sales and purchases of tangible and intangible assets (196) (226) Increase in collateral payable / Decrease in collateral receivable 22,171 29,894 Decrease in collateral payable / Increase in collateral receivable (22,693) (29,881) Net cash impact of assets lending / borrowing collateral receivables and payables (522) 13 NET CASH PROVIDED / (USED) BY INVESTING ACTIVITIES (8,197) (4,292) Issuance of equity instruments 678 266 Repayments of equity instruments (382) (88) Transactions on treasury shares 153 (8) Dividends payout (1,873) (1,688) Interests on undated subordinated debts paid (101) (115) Acquisition / sale of interests in subsidiaries without change in control (21) (76) Net cash related to transactions with shareholders (1,546) (1,708) Cash provided by financial debts issuance 881 0 Cash used for financial debts repayments (1,676) (24) Interests on financing debt paid (k) (334) (238) Half Year 2013 Financial Report 91 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Net cash related to Group financing (1,130) NET CASH PROVIDED / (USED) BY FINANCING ACTIVITIES (2,676) NET CASH PROVIDED BY DISCONTINUED OPERATIONS 0 CASH AND CASH EQUIVALENT AS OF JANUARY 1 (l) 30,101 Net cash provided by operating activities 4,731 Net cash provided by investing activities (8,197) Net cash provided by financing activities (2,676) Impact of change in consolidation method and of reclassifications as held for sale (261) Net impact of foreign exchange fluctuations and reclassification on cash and cash equivalents (331) CASH AND CASH EQUIVALENT AS OF JUNE 30 (l) 23,367 (a) AXA Japan closed its 2011 and 2012 full year accounts at September 30 and its 2013 half year accounts at March 31. Given significant movement in foreign exchange rates between September 30, 2011 and December 31, 2011, September 30, 2012 and December 31, 2012 and between March 31, 2013 and June 30, 2013, balance sheet items have been translated using respectively December 31, and June 30, exchange rates. (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (c) Includes premiums/discounts capitalization and relating amortization, amortization of investment and in the contest of owner occupied properties (held directly). (d) Includes impairment and amortization of intangible assets booked in the context of business combinations. (e) Includes impact of reinsurance and change in liabilities arising from contracts where the financial risk is borne by policyholders. (f) Mainly includes change in provisions for risks & charges, for bad debts/doubtful receivables and change in impairment of assets held for sale. (g) Includes gains/losses from derivatives hedging variable annuities. (h) Includes related derivatives. (i) Includes equity instruments held directly or by consolidated investment funds as well as non consolidated investment funds. (j) Includes sales/purchases of assets backing insurance & investment contracts where the financial risk is borne by policyholders. (k) Includes net cash impact of interest margin relating to hedging derivatives on financing debt. (l) Net of bank overdrafts. (in Euro million) June 30, 2013 June 30, 2012 Cash and cash equivalent 24,816 Bank overdrafts (a) (1,449) Cash and cash equivalent as of June 30 (b) 23,367 (a) Included in \"Other debt instruments issued and bank overdrafts\". (b) The \"Cash and cash equivalents\" balances do not include cash balances of consolidated investment funds from the Satellite Investment Portfolio (see Note 1.7.2). The \"Cash and cash equivalents\" item excludes cash backing contracts where the financial risk is borne by policyholders (unit-linked contracts). 92 Half Year 2013 Financial Report (262) (1,970) (0) 30,033 4,873 (4,292) (1,970) (322) 358 28,680 30,417 (1,737) 28,680 CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Note 1 Accounting principles 1.1. GENERAL INFORMATION AXA SA, a French “Société Anonyme” (the “Company” and together with its consolidated subsidiaries, “AXA” or the “Group”), is the holding (parent) company for an international financial services group focused on financial protection. AXA operates principally in Europe, North America and Asia. The list of the main entities included in the scope of the AXA’s consolidated financial statements is provided in Note 2 of the notes to the consolidated interim financial statements. AXA is listed on Euronext Paris Compartiment A. These consolidated interim financial statements including all notes were finalized by the Board of Directors on August 1, 2013. 1.2. GENERAL ACCOUNTING PRINCIPLES 1.2.1. Basis for preparation AXA’s consolidated interim financial statements are prepared as of June 30. However, certain entities within AXA have a different reporting year end, in particular AXA Life Japan, whose interim period ended at March 31. The consolidated interim financial statements are prepared in compliance with IFRS standards according to IAS 34 – Interim Financial Reporting and interpretations of the IFRS Interpretations Committee that are endorsed by the European Union before the balance sheet date with a compulsory date of January 1, 2013. The Group does not use the “carve out” option allowing not to apply all hedge accounting principles required by IAS 39. Amendments to standards published and adopted on January 1, 2013 The amendment to IAS 19 – Employee Benefits, published on June 16, 2011, eliminates the corridor method that allows the deferral of recognition of gains and losses. However, this method was not applied by the Group since all actuarial gains and losses were recognized through shareholders’ equity. The amendment also replaces interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset). In addition, the amendment no longer allows the deferral of past service costs which are immediately to be recognized in Profit or Loss when incurred. The amendment clarifies that the distinction between short-term and long-term benefits is based on whether payment is expected to be within the next 12 months, rather than when payment can be demanded. As a result, the Group reclassified some benefit obligations (mainly unused “vacation accruals”) in the category of other long-term employee benefits. The retrospective application of the amendments to IAS19 led to a reduction of retained earnings in shareholders’ equity of €39 million as of January 1, 2012 as well as a reduction in net consolidated income after tax of €43 million as of June 30, 2012. In Euro millionPublished amountsEffect of the changeRestated amountsPublished amountsEffect of the changeRestated amountsDeferred tax assets 3,332 22 3,355 3,047 13 3,060 Liabilities arising from policyholders' participation (17,938) (6) (17,944) (31,350) (7) (31,357)Provisions for risks and charges (10,760) (131) (10,891) (11,789) (163) (11,952)Deferred tax liabilities (3,794) 1 (3,793) (5,196) 21 (5,175)Other payables (18,130) 74 (18,056) (17,373) 77 (17,296)NET EFFECT (39) (58)In Euro millionPublished amountsEffect of the changeRestated amountsPublished amountsEffect of the changeRestated amountsAcquisition costs (4,293) (17) (4,310) (9,539) (34) (9,574)Administrative expenses (4,630) (41) (4,671) (9,440) (98) (9,538)Income tax (919) 16 (903) (1,135) 36 (1,098)NET EFFECT (43) (96)Consolidated statement of incomeConsolidated statement of financial positionJune 30, 2012December 31, 2012January 1, 2012 December 31, 2012 Half Year 2013 Financial Report 93 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Additionally, the application of the following amendments to standards as of January 1, 2013 had no material impact on the Group’s consolidated interim financial statements: IFRS 13 – Fair Value Measurement, published on May 12, 2011, defines fair value, provides guidance on how to determine fair value and requires disclosures about fair value measurements. IFRS 13 does not change the requirements regarding which items should be measured or disclosed at fair value. The amendment to IAS 1 – Presentation of Financial Statements, published on June 16, 2011, requires entities to group together items presented within Other Comprehensive Income based on whether they are potentially reclassifiable to profit or loss in a subsequent period. The amendment also preserves the requirement that items in Other Comprehensive Income and profit or loss should be presented as either a single statement or two consecutive statements. The amendments to IFRS 7 – Financial Instruments Disclosure, published on December 16, 2011 amend disclosure requirements of information about rights of offset and related arrangements. Annual Improvements 2009 – 2011 Cycle, published on May 17, 2012, includes amendments to IFRS that are not part of a major project. They are presented in a single document rather than as a series of small changes. Standards, amendments and interpretations published but not yet being effective IFRS 9 - Financial Instruments, published on November 12, 2009, amended on October 28, 2010 and December 16, 2011 and applicable to the Group from January 1, 2015 with earlier application permitted, represents the completion of the first part of a three-part project to replace IAS 39. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value. A financial asset is measured at amortized cost if both a) the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. At initial recognition, an entity can use the option to designate a financial asset at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch. For equity instruments that are not held for trading, an entity can also make an irrevocable election to present in Other Comprehensive Income subsequent changes in the fair value of the instruments (including realized gains and losses), dividends being recognized in profit or loss. Additionally, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognized in Other Comprehensive Income, unless the recognition of the effects of changes in the liability’s credit risk in Other Comprehensive Income would create or enlarge an accounting mismatch in profit or loss. Moreover, the IASB issued an Exposure Draft on November 28, 2012 that proposes limited amendments to IFRS9, in particular the introduction of a third category of classification for financial instruments that would correspond to financial instruments held to collect contractual cash flows and for sale. These debt instruments would be measured at fair value with changes recognized in fair value through Other Comprehensive Income and realized gains or losses would be recycled through profit or loss upon sale. The adoption date of IFRS 9 including its different phases (the second and third phases respectively relate to the impairment methodology and the hedge accounting for which exposure drafts were published in 2012 and 2013), its method of implementation and its impact are currently being examined within the Group. A package of five new and revised standards were published on May 12, 2011 addressing the accounting for consolidation, involvement in joint arrangements and disclosure of involvements with other entities. Each of the five standards have an effective date for annual periods beginning on or after January 1, 2013, with earlier application being permitted so long as each of the other standards in the package is also applied early. However, in December 2012, the European Union endorsed these five standards but decided to postpone to 2014 the 2013 mandatory application date required by IASB, still with early application permitted. As a result, the Group has chosen January 1, 2014, as application date. The potential impact on the Group’s consolidated financial statements with regard to the package of five new and revised standards is currently being analysed. IFRS 10 – Consolidated Financial Statements replaces the consolidation guidance in IAS 27 – Consolidation and Separate Financial Statements and SIC-12 – Special Purpose Entities, by introducing a single consolidation model for all entities based on control, irrespective of the nature of the investee. Under IFRS 10, control is based on whether an investor has 1) power over the investee; 2) exposure, or rights, to variable returns from its involvement with the investee; and 3) the ability to use its power over the investee to affect the amount of the returns. IFRS 11 – Joint Arrangements introduces new accounting requirements for joint arrangements and replaces IAS 31 – Interests in Joint Ventures. IFRS 11 eliminates the option to apply the proportional consolidation method when accounting for jointly controlled entities and focuses on the rights and obligations of the arrangement, rather than the legal form. The application of the equity method instead of the proportional consolidation is not expected to have a material impact on the Group’s consolidated financial statements. IFRS 12 – Disclosures of Interests in Other Entities requires enhanced disclosures for all forms of interest in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. Amended IAS 27 – Separate Financial Statements sets out the unchanged requirements relating to separate financial statements. The other portions of IAS 27 are replaced by IFRS 10. 94 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Amended IAS 28 – Investments in Associates and Joint Ventures includes amendments for conforming changes based on the issuance of IFRS 10, IFRS 11 and IFRS 12. The amendments to IAS 32 – Financial Instruments: Presentation published on December 16, 2011, provide clarifications of the application of the offsetting rules. The amendments to IAS 32 clarify that in order to result in an offset of a financial asset and a financial liability, a right to set-off must be available today rather than be contingent on a future event and must be exercisable by any of the counterparties, both in the normal course of business and in the event of default, insolvency or bankruptcy. Additional clarifications are presented regarding the settlement process. The amendments to IAS 32 are effective for annual periods beginning on or after January 1, 2014. An analysis of the amendments is currently in progress. Investment entities (Amendments to IFRS 10, IFRS 12 and IAS 27), published on October 31, 2012, provides an exemption from consolidation of subsidiaries under IFRS 10 – Consolidated Financial Statements for entities which meet the definition of an “investment entity”. Under the amendments, investment entities would measure their investment in subsidiaries at fair value through profit or loss. However, at a higher level, the parent company of an investment entity shall consolidate all entities that it controls, including those controlled through an investment entity, unless the parent itself is an investment entity. For these reasons, the amendments, that are effective for annual periods beginning on or after January 1, 2014, with early application permitted, are not expected to have a material impact on the Group’s consolidated financial statements. The amendments to IAS 36 – Recoverable Amount Disclosures for Non-Financial Assets, published on May 29, 2013, address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. The amendments are to be applied retrospectively for annual periods beginning on or after January 1, 2014, with earlier application permitted if IFRS 13 has already been applied. The amendments are not expected to have a material impact on the Group’s consolidated financial statements. IFRIC 21 – Levies, published May 20, 2013, is an interpretation on the accounting for levies imposed by governments. The interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. The interpretation is effective for annual periods beginning on or after January 1, 2014 and is not expected to have a material impact on the Group’s consolidated financial statements. Narrow-scope amendments to IAS 39 – Novation of Derivatives and Continuation of Hedge Accounting, published on June 27, 2013 provides relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria. The amendments are effective for annual periods beginning on or after January 1, 2014 (with earlier application permitted) and are not expected to have a material impact on the Group’s consolidated financial statements. Preparation of financial statements The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions. It requires a degree of judgment in the application of Group accounting principles described below. The main balance sheet captions concerned are goodwill (in particular impairment tests described in paragraph 1.6.1), intangible assets acquired in a business combination, the value of acquired business in force, deferred acquisition costs and equivalent, certain assets accounted at fair value, deferred tax assets, liabilities relating to the insurance business, pension benefit obligations and balances related to share-based compensation. The principles set out below specify the measurement methods used for these items. These methods, along with key assumptions where required, are discussed in greater depth in the notes relating to the asset and liability items concerned where meaningful and useful. As recommended by IAS 1, assets and liabilities are generally classified globally on the balance sheet in increasing order of liquidity, which is more relevant for financial institutions than a classification between current and non-current items. As for most insurance companies, expenses are classified by destination in the income statement. All amounts in the consolidated statement of financial position, consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of cash flows, consolidated statement of changes in equity and in the notes are expressed in Euro million, and rounded up to the nearest whole unit, unless otherwise stated. 1.2.2. First time adoption of IFRS The AXA Group’s transition date was January 1, 2004. The Group prepared its opening IFRS balance sheet at that date. The Group’s IFRS adoption date was January 1, 2005. Half Year 2013 Financial Report 95 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 The major options elected in accordance with IFRS 1 were the following: Purchase Accounting, goodwill and other intangibles related to past business combinations performed prior to January 1, 2004 AXA chose not to restate past business combinations based on the option available in IFRS 1. As a result, past business combinations prior to January 1, 2004 are accounted for on a previous GAAP basis in the IFRS financial statements, except: goodwill has been denominated in the functional currency of the acquired entity under IFRS since January 1, 2004 (transition to IFRS); and any item recognized under previous GAAP that did not qualify for recognition as an asset or liability under IFRS was reclassified into goodwill. As a result, the goodwill gross value corresponds to the gross value of these goodwill net of cumulated amortization recognized in French GAAP as of December 31, 2003. Currency Translation Differences AXA elected the option to reset to zero all past cumulative currency translation differences for all foreign operations as of January 1, 2004. Pension accounting All cumulative past actuarial gains and losses on all employee benefit plans were recognized in retained earnings as of January 1, 2004. Unless otherwise stated, the AXA’s accounting policies have been consistently applied to all the periods presented in its financial statements, including policies relating to the classification and measurement of insurance contracts, investment contracts and other financial investments and liabilities including derivatives. 1.3. CONSOLIDATION 1.3.1. Scope and basis of consolidation Companies in which AXA exercises control are known as subsidiaries. Under the current definition of IAS 27, control is the power to govern the financial and operating policies of a company so as to obtain benefits from its activities. Subsidiaries are fully consolidated from the date on which control according to the IAS 27/SIC 12 current model is transferred to AXA. Control is presumed to exist when AXA directly or indirectly holds more than 50% of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are also considered when assessing whether AXA controls another entity. Entities that are controlled in substance, even without any ownership interest, are also consolidated, as well as entities that are controlled in substance because of a specific statute or an agreement, even without any ownership interest. In particular this relates to special purpose entities, such as securitization vehicles. Companies over which AXA exercises a joint controlling influence alongside one or more third parties are consolidated proportionately. Companies in which AXA exercises significant influence are accounted for under the equity method. Significant influence is presumed when AXA directly or indirectly holds 20% or more of the voting rights or, for example, when significant influence is exercised through an agreement with other shareholders. AXA’s share of equity associates’ post-acquisition profit or loss is recognized in the income statement, and its share of post-acquisition movements in reserves is stated under “Other reserves”. Investment funds and real estate companies are either fully consolidated or proportionately consolidated or accounted for under the equity method, depending on which conditions of IAS 27/SIC 12 listed above they satisfy. For fully consolidated investment funds, minority interests are recognized at fair value and shown as liabilities in the balance sheet if the companies’ instruments can be redeemed at any time by the holder at fair value. Investment funds accounted by equity method are shown under the balance sheet caption “Financial investments”. 96 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 1.3.2. ownership interest Business combinations and subsequent changes in the Group In accordance with the option made available by IFRS 1 – First-time adoption of IFRS, business combinations prior to 2004 were not restated with respect to French accounting principles in force at the time. As the Group decided to early adopt Revised IFRS 3 – Business Combinations and amendments to IAS 27 – Consolidated and Separate Financial Statements from January 1, 2009, the principles described below are those that apply from that date. Valuation of assets acquired and liabilities assumed of newly acquired subsidiaries and contingent liabilities Upon first consolidation, all assets, liabilities and contingent liabilities (unless they are not present obligations) of the acquired company are estimated at their fair value. However, in compliance with an exemption permitted by IFRS 4, liabilities related to life insurance contracts or investment contracts with discretionary participating features are maintained at the carrying value prior to the acquisition date to the extent that this measurement basis is consistent with AXA’s accounting principles. The fair value of acquired business in force relating to life insurance contracts and investment contracts with discretionary participating features is recognized as an asset corresponding to the present value of estimated future profits emerging on acquired business in force at the date of acquisition (also referred to as value of acquired business in force or VBI and reflecting the difference between the fair value and the carrying value of the liabilities). The present value of future profits takes into consideration the cost of capital and is estimated using actuarial assumptions based on projections made at purchase date but also using a discount rate that includes a risk premium. Investment contracts with no discretionary participating features do not benefit from the exemption permitted by IFRS 4 in phase I of the IASB’s insurance project such as described above, i.e. the fair value of acquired liabilities is booked through the recognition of an asset corresponding to the value of acquired business in force. Liabilities relating to investment contracts with no discretionary participating features are measured directly at fair value. In accordance with IAS 39, the fair value of these contracts cannot be less than surrender value when they contain a demand feature. Other identifiable intangible assets such as the value of customer relationships should be recognized. The value of customer relationships intangible represents the value of future cash flows expected from renewals and the cross-selling of new products to customers known and identified at the time of the acquisition. These projections include assumptions regarding claims, expenses and financial revenues, or they can be estimated on the basis of the New Business Value. In line with accounting practices in force before the adoption of IFRS, which may continue to be applied under IFRS 4, future premiums relating to acquired business may be recognized in the “Value of acquired business in force” item. To the extent that these other intangible assets can be estimated separately, they can also be measured by looking at the purchased marketing resources that will allow to generate these future cash flows. The nature of the intangible assets recognized is consistent with the valuation methods used when purchasing the acquired entity. In the context of a business combination, only restructuring costs that can be measured reliably and which correspond to an existing liability of the acquired company prior to the acquisition date are included in restructuring provisions recognized in the acquired company’s balance sheet at acquisition date. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, the liabilities incurred by the Group to former owners of the acquiree and the equity interests issued by the Group. Purchase consideration includes any contingent element (adjustment in the acquisition price conditional upon on one or more events). In the estimate of the contingent element, attention is paid to use assumptions that are consistent with the assumptions used for the valuation of intangible assets such as VBI. For business combinations that occurred before January 1, 2009, any contingent element was included in the cost of the combination to the extent the adjustment was probable and could be measured reliably. If the future events do not occur or the estimate needs to be revised, the cost of the business combination continues to be adjusted accordingly, taking account of the impact in terms of additional goodwill and/or adjustments of the valuation of acquired assets and liabilities. For business combinations on or after January 1, 2009, any change to the estimate of the contingent element between the acquisition date and the amount actually subsequently paid is recognized in the income statement. Direct transaction costs related to a business combination are charged in the income statement when incurred. In step acquisitions, any previously minority interest held by the Group is measured at fair value and the resulting adjustment is recognized through the net income. Similarly, when an additional purchase changes the control from significant influence or joint control to control, any investment pre-existing in a former associate/joint venture is re- measured to its fair value with the gain or loss through net income (consequently also resulting in a new goodwill). Half Year 2013 Financial Report 97 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 According to a decision taken for each acquisition, any minority interest may be measured at fair value or at its proportionate interest in the acquiree’s identifiable net assets. If the transaction is denominated in a foreign currency, the exchange rate used is that in force on the date of the transaction or on the starting date of the transaction (if it occurs over a period). Goodwill Goodwill is measured as the excess of (a) the aggregate of the consideration transferred, the amount of any minority interest in the acquiree and in a business combination achieved in stages, the acquisition-date fair value of the Group’s previously held equity interest in the acquiree over (b) the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill arising from the acquisition of a foreign entity is recorded in the local currency of the acquired entity and is translated into Euro at the closing date. If the cost of acquisition is less than the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, the difference is directly recorded in the consolidated statement of income. Adjustments can be made to goodwill within twelve months of the acquisition date, if new information becomes available to complete the initial accounting. In this case, comparative information is presented as if the initial accounting had been completed from the acquisition date. If, after the period of twelve months, a deferred tax asset, initially considered as not recoverable, finally meets the recognition criteria, the corresponding tax benefit is recorded in the consolidated statement of income without a corresponding adjustment in goodwill. Goodwill is allocated across operating segments (Life & Savings, Property & Casualty, International Insurance, Asset Management and Banking) to cash generating units corresponding (i) to the companies acquired or portfolios of business acquired according to their expected profitability, and (ii) to the entities already within the AXA Group that will benefit from the synergies of the combination with the activities acquired. This allocation of goodwill is used both for segment reporting and for impairment testing. Purchase and sale of minority interests in a controlled subsidiary Purchase and sale transactions of minority interests in a controlled subsidiary that do not change the conclusion of control are recorded through shareholders’ equity (including direct acquisition costs). If control in a subsidiary is lost, any gain or loss is recognized in net income. Furthermore, if an investment in the entity is retained by the Group, it is re-measured to its fair value and any gain or loss is also recognized in net income. Put over minority interests When control over a subsidiary is acquired, a put option may be granted to minority shareholders. However, the recognition of the puttable instruments as a liability depends on the contractual obligations. When the contract involves an unconditional commitment exercisable by the option holder, it is recognized as a liability. Since the balancing entry to this liability is not specified by current IFRS, the Group’s method is (i) to reclassify minority interests from equity to liability, (ii) to re-measure this liability at the present value of the option price and (iii) to recognize the difference either as an increase in goodwill for puts existing before January 1, 2009 or as a decrease in equity (Group share) for a put granted after January 1, 2009, to the extent there is no immediate transfer of risks and rewards. Similarly, subsequent changes in the liability are recorded against goodwill for puts existing before January 1, 2009 and against equity (Group share) for puts granted after that date. Intra-group transactions Intra-group transactions, including internal dividends, payables/receivables and gains/losses on intra-group transactions are eliminated: in full for controlled subsidiaries, and to the extent of AXA’s interest for entities consolidated by equity method or proportionate consolidation. The effect on net income of transactions between consolidated entities is always eliminated. However, in case of a loss, an impairment test is performed, in order to assess whether an impairment has to be booked. In the event of an internal sale of an asset that is not intended to be held on the long term by the Group, deferred tax is recognized as the current tax calculated on the realized gain or loss is eliminated. The income statement impact of the potential policyholders’ participation resulting from this transaction is also eliminated, and a deferred policyholders’ participation asset or liability is posted to the statement of financial position. 98 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 In addition, the transfer of consolidated shares, between two consolidated subsidiaries but held with different ownership percentages, should not impact the Group net income. The only exception would be any related tax and policyholders’ participation recorded in connection to the transaction, which are maintained in the consolidated financial statements. These transfers also have an impact on Group shareholders’ equity (with a balancing entry recorded in minority interests). This impact is identified in the “other” changes of the consolidated statement of shareholders’ equity. 1.4. FOREIGN CURRENCY TRANSLATION OF FINANCIAL STATEMENTS AND TRANSACTIONS The consolidated financial statements are presented in Euro million, the Euro being the Group’s presentational currency. The results and financial position of all Group entities that have a functional currency (i.e. the currency of the primary economic environment in which the entity operates) different from the Group presentational currency are translated as follows: assets and liabilities of entities in a functional currency different from Euro are translated at the closing rate; revenues and expenses are translated at the average exchange rates over the period; all resulting foreign exchange differences are recognized as a separate component of equity (translation differences). At the local entity level, foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at closing rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement, except where hedge accounting is applied as explained in paragraph 1.9. As mentioned in paragraph 1.3.2, goodwill arising on the acquisition of a foreign entity is recorded in the local currency of the acquired entity and is translated into Euro at the closing date. Foreign exchange differences arising from the translation of a net investment in a foreign subsidiary, borrowings and other currency instruments qualifying for hedge accounting of such investment are recorded in shareholders’ equity under translation differences and are recycled in the income statement as part of the realized gain or loss on disposal of the hedge net investment. Foreign exchange differences arising from monetary financial investments available for sale are recognized as income or expense for the period in respect of the portion corresponding to amortized cost. The residual translation differences relating to fair value changes are recorded in shareholders’ equity. Regarding the cumulative amount of the exchange differences related to disposed business, the Group applies the step- by-step consolidation method (IFRIC 16). 1.5. SEGMENT REPORTING The segmental analysis provided in AXA’s Annual Report and Financial Statements reflects operating business segments; it is based on five business lines: Life & Savings, Property & Casualty, International Insurance, Asset Management and Banking. An additional “Holdings” segment includes all non-operational activities. 1.6. INTANGIBLE ASSETS 1.6.1. Goodwill and impairment of goodwill Goodwill is considered to have an indefinite useful life and is therefore not amortized. Impairment tests are performed at least annually. Impairment of goodwill is not reversible. AXA performs an impairment test of goodwill at least annually based on cash generating units, using a multi-criterion analysis with parameters such as the value of assets, future operating profits and market share, in order to determine any significant adverse changes. It also considers the interdependence of transactions within sub-groups. Within each cash generating unit, a comparison is made between net book value and the recoverable value (equal to the higher of fair value less costs to sell and value in use). Value in use consists of the net assets and expected future earnings from existing and new business, taking into account the cash generating units’ future cash flows. The value of future expected earnings is estimated on the basis of the life insurance and investment contracts embedded value models or similar calculations for other activities. Fair values less costs to sell are based on various valuation multiples. Half Year 2013 Financial Report 99 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 1.6.2. Value of purchased life insurance business in force (VBI) The value of purchased insurance contracts and investment contracts with discretionary participating features recognized in a business combination (see paragraph 1.3.2) is amortized as profits emerge over the life of the contracts’ portfolio. In conjunction with the liability adequacy test (see paragraph 1.13.2), VBI is subject to annual recoverability testing based on actual experience and expected changes in the main assumptions. 1.6.3. Deferred acquisition costs (DAC) relating to insurance contracts and investment contracts with discretionary participating features – Rights to future management fees, also known as Deferred origination costs (DOC) relating to investment contracts with no discretionary participating features The direct costs of acquiring a portfolio of insurance contracts and investment contracts with discretionary participating features, primarily related to the selling, underwriting and initiating the insurance contracts in a portfolio, are deferred by recognizing an asset. In Property and Casualty, DAC are amortized over the terms of the policies, as premium is earned. For Life business, the asset is amortized based on the estimated gross profits emerging over the life of the contracts. This asset is tested for recoverability and any amount above future estimated gross profits is expensed. DAC are also tested through the liability adequacy test (see paragraph 1.13.2). For investment contracts with no discretionary participating features, a similar asset is recognized, i.e. Rights to future management fees, also known as Deferred origination costs (DOC) but limited to costs directly attributable to the provision of investment management services. This asset is amortized by taking into account projections of fees collected over the life of the contracts. The amortization of DOC is reviewed at each closing date to reflect changes in assumptions and experience. This asset is also tested for recoverability. DAC and DOC are reported gross of unearned revenues and fees reserves. These unearned revenues and fees reserves are separately recognized as liabilities and are amortized over the contract term using the same amortization approach used for DAC and DOC. 1.6.4. Unearned revenues reserves Revenues received at contract inception to cover future services are deferred and recognized in the income statement using the same amortization pattern as the one used for deferred acquisition costs. 1.6.5. Other intangible assets Other intangible assets include software developed for internal use for which direct costs are capitalized and amortized on a straight-line basis over the assets’ estimated useful lives. They also include customer relationships intangibles as well as distribution agreements recognized as a result of business combinations. If these assets have a finite useful life, they are amortized on a straight line basis over their estimated life. In all cases, they are subject to impairment tests, at each closing for assets with a finite useful life and at least annually for other assets. In the event of a significant decline in value, an impairment is booked corresponding to the difference between the value on the balance sheet and the higher of value in use and fair value less costs to sell. 1.7. ACTIVITIES INVESTMENTS FROM INSURANCE, BANKING AND OTHER Investments include investment in real estate properties and financial instruments including equity instruments, debt instruments and loans. 1.7.1. Investment in real estate properties Investment in real estate properties (excluding investment in real estate properties totally or partially backing liabilities arising from contracts where the financial risk is borne by policyholders) is recognized at cost. The properties components are depreciated over their estimated useful lives, also considering their residual value if it may be reliably estimated. 100 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 In case of unrealized loss over 15%, an impairment is recognized for the difference between the net book value of the investment property and the fair value of the asset based on an independent valuation. Furthermore, at the level of each reporting entity, if the cumulated amount of unrealized losses under 15% (without offsetting with unrealized gains) represents more than 10% of the cumulated net cost of real estate assets, additional impairment are booked on a line-by- line approach until the 10% threshold is reached. If, in subsequent periods, the appraisal value rises to at least 15% more than the net carrying value, previously recorded impairment is reversed to the extent of the difference between a) the net carrying value and b) the lower of the appraisal value and the depreciated cost (before impairment). Investment in real estate properties that totally or partially back liabilities arising from contracts where the financial risk is borne by policyholders is recognized at fair value with changes in fair value through profit or loss. 1.7.2. Financial instruments classification Depending on the intention and ability to hold the invested assets, financial instruments are classified in the following categories: assets held to maturity, accounted for at amortized cost; assets held for trading and assets designated as at fair value with change in fair value through profit or loss; available-for-sale assets accounted for at fair value with changes in fair value recognized through shareholders’ equity; loans and receivables (including some debt instruments not quoted in an active market) accounted for at amortized cost. At inception, the option to designate financial investments and liabilities at fair value with change in fair value recognized through income statement is mainly used by the Group in the following circumstances: financial investments when electing the fair value option allows the Group to solve accounting mismatch, and in particular: o o assets backing liabilities arising from contracts where the financial risk is borne by policyholders, assets included in hedging strategies set out by the Group for economical reasons but not eligible for hedge accounting as defined by IAS 39, debt held by structured bond funds controlled and consolidated by the Group and made up of CDOs (Collateralized Debt Obligations); o portfolios of managed financial investments whose profitability is valued on a fair value basis: mainly securities held by consolidated investment funds, managed according to the Group risk management policy (“Satellite Investment Portfolio”, see definition below). In practice, assets held through consolidated investment funds are classified: either as assets of the “Core Investment Portfolios” which include assets backing liabilities arising from insurance and investment contracts, managed according to AXA’s ALM strategy; or as assets of the “Satellite Investment Portfolios”, reflecting the strategic asset allocation based on a dynamic asset management aimed at maximizing returns. Underlying financial instruments held in the “Core Investment Portfolios” are classified as available-for-sale unless involved in a qualifying hedge relationship or more broadly when electing the fair value option reduces accounting mismatch. As specified above, the financial instruments held in the “Satellite Investment Portfolios” are accounted for at fair value with changes in fair value recognized through income statement. Assets designated as available-for-sale, trading assets, investments designated as at fair value through profit or loss and all derivatives are measured at fair value, i.e. the amount for which an asset could be exchanged, between knowledgeable, willing parties in an arm’s length transaction. The Group applies the IAS 39 fair value hierarchy. Loans which are not designated under the fair value option are accounted at amortized cost using the effective interest rate method. Impairment of financial instruments AXA assesses at each balance sheet date whether a financial asset or a group of financial investments at (amortized) cost or designated as “available for sale” is impaired. A financial asset or group of financial investments is impaired when there is objective evidence of impairment as a result of one or more events and this event has an impact on the estimated future cash flows of the asset(s) that can be reliably estimated. Half Year 2013 Financial Report 101 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 For debt instruments classified as “held to maturity” or “available for sale”, an impairment based respectively on future cash flows discounted using the initial effective interest rate or on fair value is recorded through the income statement if future cash flows may not be fully recoverable due to a credit event relating to the instrument issuer. A downgrade of an entity’s credit rating is not, of itself, evidence of impairment. If the credit risk is eliminated or improves, the impairment may be released. The amount of the reversal is also recognized in the income statement. For equity instruments classified as available for sale, a significant or prolonged decline in the fair value below its carrying value is considered as indication for potential impairment, such as equity instruments showing unrealized losses over a 6 months period or more (prior to the closing date), or unrealized losses in excess of 20% of the net carrying value at the closing date. If such evidence exists for an available for sale financial asset, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment on that financial asset already booked in the income statement – is removed from shareholders’ equity and an impairment is recognized through the income statement. Equity instruments impairment recognized in the income statement cannot be reversed through the income statement until the asset is sold or derecognized. Impairments of loans available for sale are based on the present value of expected future cash flows, discounted at the loan’s effective interest rate (down to the loan’s observable market price), or on the fair value of the collateral. For financial investments accounted for at amortized cost, including loans and assets classified as “held to maturity” or assets designated as “Loans and receivables”, the impairment test is first performed at the asset level. A more global test is then performed on groups of assets with similar risk profile. Methods for calculating the net book value of assets sold (average cost, first-in first-out, etc.) depend on local Assets and Liabilities Management (ALM) strategies as these strategies have been set up to take into account specific commitments to policyholders. These methods may differ within the Group provided that they are used consistently at each entity level. 1.7.3. Repurchase agreements and security lending The Group is party to repurchase agreements and securities lending transactions under which financial assets are sold to a counterparty, subject to a simultaneous agreement to repurchase these financial assets at a certain later date, at an agreed price. While substantially all of the risks and rewards of the financial assets remain with the Group over the entire lifetime of the transaction, the Group does not derecognize the financial assets. The proceeds of the sale are reported separately. Interest expense from repurchase and security lending transactions is accrued over the duration of the agreements. The Group is also party to reverse repurchase agreements under which financial assets are purchased from a counterparty, subject to a simultaneous agreement to return these financial assets at a certain later date, at an agreed price. If substantially all of the risks and rewards of the securities remain with the counterparty over the entire lifetime of the agreement of the transaction, the securities concerned are not recognized as financial assets of the Group. The amounts of cash disbursed are recorded under financial investments, except for transactions arising from banking activities, which are recorded as separate assets. Interest income on reverse repurchase agreements is accrued over the duration of the agreements. 1.8. ASSETS BACKING LIABILITIES ARISING FROM CONTRACTS WHERE THE FINANCIAL RISK IS BORNE BY POLICYHOLDERS Assets backing liabilities arising from insurance or investment contracts where the financial risk is borne by policyholders are presented in a separate aggregate of the balance sheet so that they are shown in a symmetrical manner to the corresponding liabilities. This presentation is considered more relevant for the users and consistent with the liquidity order recommended by IAS 1 for financial institutions, since the risks are borne by policyholders, whatever the type of assets backing liabilities (investment in real estate properties, debt instruments or equity instruments, etc.). Details of these assets are provided in the notes. 1.9. DERIVATIVE INSTRUMENTS Derivatives are initially recognized at fair value at purchase date and are subsequently re-measured at their fair value. Unrealized gains and losses are recognized in the statement of income unless they relate to a qualifying hedge relationship as described below. The Group designates certain derivatives as either: (i) hedging of the fair value of recognized assets or liabilities or of a firm commitment (fair value hedge); or (ii) hedging of highly probable expected future transactions (cash flow hedge); or (iii) hedging of net investments in foreign operations. 102 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 The Group documents, at inception, the hedge relationship, as well as its risk management hedging objectives and strategy. The Group also documents the hedge effectiveness, both at inception and on an ongoing basis, indicating the actual or expected efficiency level of the derivatives used in hedging transactions in offsetting changes in the fair values or cash flows of hedged underlying items. Fair value hedge Changes in the fair value of derivatives designated and qualifying as fair value hedge are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability. Therefore, the gain or loss relating to any ineffective portion is directly recognized in the income statement. Cash flow hedge The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedge is recognized in shareholders’ equity. The gain or loss relating to any ineffective portion is recognized in the income statement. Cumulative gain or loss in shareholders’ equity is recycled in the income statement when the hedged underlying item impacts the profit or loss for the period (for example when the hedged future transaction is recognized). When a hedging instrument reaches its maturity date or is sold, or when a hedge no longer qualifies for hedge accounting, the cumulative gains or losses in shareholders’ equity are held until the initially hedged future transaction ultimately impacts the income statement. Net investment hedge The accounting of net investments in foreign operations hedge is similar to the accounting of cash flow hedge. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in shareholders’ equity; the gain or loss relating to the ineffective portion is recognized in the income statement. Cumulative gains and losses in shareholders’ equity impact the income statement only on disposal of the foreign operations. Derivatives not qualifying for hedge accounting Changes in the fair value of all other derivative instruments that do not qualify for hedge accounting are recognized in the income statement. The Group holds financial investments that include embedded derivatives. Such embedded derivatives are separately recorded and measured at fair value through profit or loss if the impact is deemed material. For the statement of financial position presentation, derivatives are presented alongside with the underlying assets or liabilities for which they are used, regardless of whether these derivatives meet the criteria for hedge accounting. 1.10. ASSETS/LIABILITIES HELD FOR SALE AND ASSETS/LIABILITIES INCLUDING DISCONTINUED OPERATIONS These comprise assets, particularly buildings or operations, intended to be sold or discontinued within twelve months. Subsidiaries held for sale remain within the scope of consolidation until the date on which the Group loses effective control. The assets and activities (assets and liabilities) concerned are measured at the lower of net carrying value and fair value net of selling costs. They are presented in separate asset and liability items on the balance sheet. The liabilities of subsidiaries (excluding shareholders’ equity) held for sale are entered separately on the liability side of the consolidated balance sheet, with no netting against assets. In the event of a discontinuation of operations representing either a business line, a main and distinct geographical region or a subsidiary acquired solely with a view to reselling, their after-tax contribution is stated on a separate line of the income statement. For comparison purposes, the same applies to the presentation of income statements relating to previous periods that are included in the financial statements. This separate line also includes the post-tax gain/loss recognized on the disposal of the discontinued operation at the date of loss of control. Details on information presented in the statement of financial position and statement of income are provided in the notes to the consolidated financial statements. 1.11. CASH AND CASH EQUIVALENTS Cash comprises cash on hand and demand deposits while cash equivalents are short-term, liquid investments that are readily convertible to cash and which are subject to low volatility. Half Year 2013 Financial Report 103 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 1.12. SHARE CAPITAL AND SHAREHOLDERS’ EQUITY 1.12.1. Share capital Ordinary shares are classified in shareholders’ equity when there is no obligation to transfer cash or other assets to the holders. Additional costs (net of tax) directly attributable to the issue of equity instruments are shown in shareholders’ equity as a deduction to the proceeds. 1.12.2. Undated subordinated debt Undated subordinated debt and any related interest charges are classified either in shareholders’ equity (in the “other reserves” aggregate) or as liabilities depending on contract clauses without taking into consideration the prospect of redemption under economic constraints (e.g. step up clauses or shareholders’ expectations). 1.12.3. Compound financial instruments Any financial instrument issued by the Group with an equity component (for example an option granted to convert the debt instrument into an equity instrument of the Company) and a liability component (a contractual obligation to deliver cash) is classified separately on the liability side of the balance sheet with the equity component reported in Group shareholders’ equity (in the “other reserves” aggregate). Gains and losses relating to redemptions or refinancing of the equity component are recognized as changes to shareholders’ equity. 1.12.4. Treasury shares Treasury shares and any directly related costs are recorded as a deduction to consolidated shareholders’ equity. Where treasury shares are subsequently sold or reissued, any consideration received is included in consolidated shareholders’ equity, net of any directly related costs and tax effects. However, treasury shares held by controlled investment funds backing contracts where the financial risk is borne by policyholders are not deducted as all risks and income resulting from holding these shares are attributable to policyholders. 1.13. LIABILITIES ARISING FROM INSURANCE AND INVESTMENT CONTRACTS 1.13.1. Contracts classification The Group issues contracts that transfer an insurance risk or a financial risk or both. Insurance contracts, including assumed reinsurance contracts, are contracts that carry significant insurance risks. Such contracts may also transfer financial risk from the policyholders to the insurer. Investment contracts are contracts that carry financial risk with no significant insurance risk. A number of insurance and investment contracts contain discretionary participating features. These features entitle the contract holder to receive additional benefits or bonuses on top of these standard benefits: they are likely to represent a significant portion of the overall contractual benefits; their amount or timing is contractually at the discretion of the Group; and they are contractually based on the performance of a group of contracts, the investment returns of a financial asset portfolio or the Company profits, a fund or another entity that issues the contract. In some insurance or investment contracts, the financial risk is borne by policyholders. Such contracts are usually Unit- Linked contracts. 104 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 The Group classifies its insurance and investment contracts into six categories: liabilities arising from insurance contracts; liabilities arising from insurance contracts where the financial risk is borne by policyholders; liabilities arising from investment contracts with discretionary participating features; liabilities arising from investment contracts with no discretionary participating features; liabilities arising from investment contracts with discretionary participating features where the financial risk is borne by policyholders; these relate to Unit-Linked contracts or multi-funds contracts containing a non-Unit- Linked fund with discretionary participating features; liabilities arising from investment contracts with no discretionary participating features where the financial risk is borne by policyholders. 1.13.2. participating features Insurance contracts and investment contracts with discretionary Except where IAS 39 applies, according to IFRS 4, recognition and derecognition are based on the AXA accounting policies existing prior to IFRS and are described below, except for the elimination of equalization provisions, selective changes as permitted by IFRS 4 (see below), and the extension of shadow accounting . The main characteristics of the accounting principles applied prior to IFRS and retained after the conversion to IFRS are as follows: reserves must be sufficient; life reserves cannot be discounted using a discount rate higher than prudently estimated expected assets yield; acquisition costs are deferred to the extent recoverable and amortized based on the estimated gross profits emerging over the life of the contracts; property and casualty claims reserves represent estimated ultimate costs. Post claims reserves are generally not discounted, except in limited cases. PRE-CLAIMS RESERVES Unearned premiums reserves represent the pro rata portion of written premiums that relates to unexpired risks at the closing date. For traditional life insurance contracts (that is, contracts with significant mortality or morbidity risk), the future policy benefits reserves are calculated on a prospective basis according to each country regulation provided methods used are consistent with the Group’s policies and using assumptions on investment yields, morbidity/mortality and expenses. Changes in reserves are booked if there are impacts caused by a change in the mortality table. Future policy benefits reserves relating to investment contracts with discretionary participation features (previously called “savings contracts” in AXA’s accounting principles) that carry low mortality and morbidity risk are generally calculated using a prospective approach based on discount rates usually set at inception (similar to the retrospective approach, i.e. “account balance” methodology). The discount rates used by AXA are less or equal to the expected future investment yields (assessed on prudent basis). Part of the policyholders participation reserve is included in future policy benefits reserves, according to contractual clauses. Except when these guarantees are covered by a risk management program using derivative instruments (see next paragraph), guaranteed minimum benefits reserves relating to contracts where the financial risk is borne by policyholders (insurance contracts because they include such guarantees or investment contracts with discretionary participating features), are build over the life of the contract based on a prospective approach: the present value of future benefit obligations to be paid to policyholders in relation to these guarantees is estimated on the basis of reasonable scenarios. These scenarios are based on assumptions including investment returns, volatility, surrender and mortality rates. This present value of future benefit obligations is reserved as fees are collected over the life of the contracts. Some guaranteed benefits such as Guaranteed Minimum Death or Income Benefits (GMDB or GMIB), or certain guarantees on return proposed by reinsurance treaties, are covered by a risk management program using derivative instruments. In order to minimize the accounting mismatch between liabilities and hedging derivatives, AXA has chosen to use the option allowed under IFRS 4.24 to re-measure its provisions: this revaluation is carried out at each accounts closing based on guarantee level projections and considers interest rates and other market assumptions. The liabilities revaluation impact in the current period is recognized through income, symmetrically with the impact of the change in value of hedging derivatives. Half Year 2013 Financial Report 105 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 This change in accounting principles was adopted on the first time application of IFRS on January 1, 2004 for contracts portfolios covered by the risk management program at that date. Any additional contracts portfolios covered by the risk management program after this date are valued on the same terms as those that applied on the date the program was first applied. POST CLAIMS RESERVES Claims reserves (life and non life contracts) The purpose of claims reserves is to cover the ultimate cost of settling an insurance claim. Claims reserves are generally not discounted, except in cases such as disability annuities. Claims reserves include the claims incurred and reported, claims incurred but not reported (IBNR) as well as claim handling costs. Claims reserves are based on historical claim data, current trends, actual payment patterns for all insurance business lines as well as expected changes in inflation, regulatory environment or anything else that could impact amounts to be paid. Shadow accounting and Deferred policyholders Participation Asset (DPA) or Liability (DPL) In compliance with IFRS 4 option, shadow accounting is applied to insurance and investment contracts with discretionary participating features. Shadow accounting is applied to technical liabilities, acquisition costs and value of business in force to take into account unrealized gains or losses on insurance liabilities or assets in the same way as it is done for a realized gain or loss of invested assets. When unrealized gains or losses are recognized, a deferred participating liability (DPL) or asset (DPA) is recorded. The DPL or DPA corresponds to the discretionary participation available to the policyholders and is generally determined by applying on the basis of estimated participation of policyholders in unrealized gains and losses and any other valuation difference with the local contractual basis. Jurisdictions where participating business is significant are Switzerland (for example “legal quote” for group insurance policies), Germany and France where the minimum is set to 90%, 90% and 85% respectively, of a basis which may include not only financial income but also other components such as in Germany or Switzerland. Participating business is less prevalent in the United States or in Japan. The estimated discretionary participating feature of such contracts is fully recognized in the liabilities. As a consequence, there is no component recognized as an equity component and AXA does not need to ensure the liability recognized for the whole contract is not less than the amount that would result from applying IAS 39 to the guaranteed element. When a net unrealized loss (unrealized change in fair value, impairment, expense related, …) is accounted, a deferred participating asset (DPA) may be recognized only to the extent that it is highly probable that it can be charged to policyholders, by entity, in the future. This could be the case if the DPA can be offset against future participation either directly through deduction of the DPL from future capital gains or the DPL netted against value of businesses in force or indirectly through deduction of future fees on premiums or margins. Unrealized gains and losses on assets classified as trading or designated at fair value through profit and loss, along with any other entry impacting the income statement and generating a timing difference, are accounted in the income statement of the income with a corresponding shadow entry adjustment in the statement of income. The shadow accounting adjustments relating to unrealized gains and losses on assets available-for-sale (for which change in fair value is taken to shareholders’ equity) are booked through shareholders’ equity. Recoverability tests and liability adequacy test (LAT) Deferred participation When net deferred participation asset is recognized, the Group uses liquidity analyses performed by the entities to assess the capacity to hold assets showing unrealized loss position, if any, generating such debits. The Group then performs projections to compare the value of assets backing policyholders’ contracts with expected payments to be made to policyholders. Liability Adequacy Test In addition, at each balance sheet date, liability adequacy tests are performed in each consolidated entity in order to ensure the adequacy of the contract liabilities net of related DAC and VBI assets and deferred policyholders’ participation asset. To perform these tests, entities group contracts together according to how they have been acquired, are serviced and have their profitability measured. Entities use current best estimates of all future contractual cash flows as well as claims handling and administration expenses, and take into account guarantees and investment yields relating to assets backing these contracts. such tests are based on the intention and capacity of entities to hold financial assets according to various sets of scenarios, excluding the value of new business; they include projections of future investments sales according to estimated surrender patterns; and the extent to which resulting gains/losses may be allocated/charged to policyholders, i.e. profit sharing between policyholders and shareholders. 106 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 These tests therefore include the capacity to charge estimated future losses to policyholders on the basis of the assessment of the holding horizon and potential realization of losses among unrealized losses existing at closing date. Contract specific risks (insurance risk, asset return risk, inflation risk, persistency, adverse selection, etc.) directly related to the contracts are also considered. Depending on the type of business, the future investment cash flows and discounting may be based on a deterministic best estimate rate, with corresponding participation, or in the case of Guaranteed Minimum Benefits, stochastic scenarios. Testing is performed either by a comparison of the reserve booked net of related assets (DAC, VBI, etc.) directly with discounted cash flows, or by ensuring that the discounted profit net of participation from release of the technical provisions exceeds net related assets. Any identified deficiency is charged to the income statement, initially by respectively writing off DPA, DAC or VBI, and subsequently by establishing a LAT provision for losses arising from the liability adequacy test for any amount in excess of DPA, DAC and VBI. For non-life insurance contracts, an unexpired risk provision is accounted for contracts on which the premiums are expected to be insufficient to cover expected future claims and claims expenses. Embedded derivatives in insurance and investment contracts with discretionary participating features Embedded derivatives that meet the definition of an insurance contract or correspond to options to surrender insurance contracts for a set amount (or based on a fixed amount and an interest rate) are not separately measured. All other embedded derivatives are bifurcated and booked at fair value when material (with change in fair value recognized through income statement) if they are not considered as closely related to the host insurance contract and/or do not meet the definition of an insurance contract. 1.13.3. Investment contracts with no discretionary participating features In accordance with IAS 39, these contracts are accounted for using “deposit accounting”, which mainly results in not recognizing the cash flows corresponding to premiums, benefits and claims in the statement of income (see “Revenue recognition” paragraph below). These cash flows shall rather be recognized as deposits and withdrawals. This category includes mainly Unit-Linked contracts that do not meet the definition of insurance or investment contracts with discretionary participating features. For these Unit-Linked contracts, the liabilities are valued at current unit value, i.e. on the basis of the fair value of the financial investments backing those contracts at the balance sheet date together with Rights to future management fees, also known as Deferred origination costs (DOC, described in paragraph 1.6.3). UNEARNED FEES RESERVES Fees received at inception of an investment contract with no discretionary participating features to cover future services are recognized as liabilities and accounted in the income statement based on the same amortization pattern as the one used for deferred origination costs. 1.14. REINSURANCE Transactions relating to reinsurance assumed and ceded are accounted in the balance sheet and income statement in a similar way to direct business transactions provided that these contracts meet the insurance contracts classification requirements and in agreement with contractual clauses. 1.15. FINANCING DEBT Financing debt issued to finance the solvency requirements of operational entities or to acquire a portfolio of contracts are isolated in a specific aggregate of the statement of financial position and are accounted for at amortized cost. 1.16. OTHER LIABILITIES 1.16.1. Income taxes The half year income tax charge is based on the best estimate of the expected full year tax rate (if progressive tax rates, based on income levels) for each Group entity and for each tax category. Deferred tax assets and liabilities emerge from Half Year 2013 Financial Report 107 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 temporary differences between the accounting and fiscal values of assets and liabilities, and when applicable from tax loss carry forwards. Deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available to offset the temporary differences. The recoverability of deferred tax assets recognized in previous periods is re- assessed at each closing. In particular, a deferred tax liability is recognized for any taxable temporary difference relating to the value of shares in a consolidated company held, unless the Group controls at what date the temporary difference will reverse and it is probable that the temporary difference will not reverse in the foreseeable future. If a group company decides to sell its stake in another consolidated entity, the difference between the carrying value and the tax value of these shares for the company that holds them leads to the recognition of a deferred tax (including as part of a business combination when the Group as the buyer intends to sell or carry out internal restructuring of the shares following the acquisition). The same approach applies to dividend payments that have been voted or deemed likely, to the extent that a tax on dividends will be due. Deferred taxes for taxable temporary differences relating to tax deductible goodwill are recognized to the extent they do not arise from the initial recognition of goodwill. These deferred taxes are only released if the goodwill is impaired or if the corresponding consolidated shares are sold. The measurement of deferred tax liabilities and deferred tax assets reflects the expected tax impact, at the balance sheet date. That would follow the way the Group expects to recover or settle the carrying amount of its assets and liabilities. When income taxes are calculated at a different rate if dividends are paid, deferred taxes are measured at the tax rate applicable to undistributed profits. The income tax consequences of dividends are only accounted when a liability to pay the dividend is recognized. 1.16.2. Pensions and other post-retirement benefits Pensions and other post-retirement benefits include the benefits payable to AXA Group employees after they retire (retirement compensation, additional pension benefit, health insurance). In order to meet those obligations, some regulatory framework have allowed or enforced the set up of dedicated funds (plan assets). Defined contribution plans: payments are made by the employer to a third party (e.g. pension trusts). These payments free the employer of any further commitment, and the obligation to pay acquired benefits to the employees is transferred. The contributions paid by the employer are recorded as an expense in the income statement and no liability needs to be recorded once contributions are made. Defined benefit plans: an actuarial assessment of the commitments based on each plan’s internal rules is performed. The present value of the future benefits paid by the employer, known as the DBO (Defined Benefit Obligation), is calculated annually on the basis of long-term projections of rate of salary increase, inflation rate, mortality, staff turnover, pension indexation and remaining service lifetime. The amount recorded in the balance sheet for employee benefits is the difference between the Defined Benefit Obligation and the market value at the balance sheet date of the corresponding invested plan assets after adjustment at fair value. If the net result is negative, a provision is recorded under the provision for risks and charges heading. If the net result is positive, a prepaid asset is recorded in the balance sheet but not more than its recoverable amount (asset ceiling). Actuarial gains and losses (now termed remeasurments under IAS19 revised) arising from experience adjustments and changes in actuarial assumptions are recognized in shareholders’ equity (in Other Comprehensive Income) in full in the period in which they occur. Similarly, the actual return on assets and any change in asset ceiling, excluding the net interest income on assets, is recognized in shareholders’ equity. The regular impact in the income statement mainly relates to the current service cost (annually accruing employee benefit) and the net interest on the amount recorded in the opening balance sheet (unwinding of discount applied to the liability/asset at start of the annual period, taking account contributions and benefits payments during the period). Past service cost represents the change in the present value of the defined benefit obligation resulting from a plan amendment or curtailment to a plan. It is recognized totally and immediately in the income statement when incurred. Gains and losses on the settlement of a defined benefit plan also have an impact in the income statement when the settlement occurs. 1.16.3. Share-based compensation plans The Group’s share-based compensation plans are predominantly settled in equities. All equity-settled share-based compensation plans granted after November 7, 2002 and not fully vested as of January 1, 2004 are accounted for at fair value at the date they were granted and the fair value is expensed over the vesting period. Cash-settled share-based compensation plans are recognized at fair value, which is remeasured at each balance sheet date with any change in fair value recognized in the statement of income. The AXA Shareplan issued under a specific French regulatory framework includes a traditional and a leveraged formula (with an application subject to specific local regulations within the Group). 108 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 The cost of the traditional formula of Shareplan is valued according to the specific guidance issued in France by the ANC (Autorité des Normes Comptables). The cost of the leveraged formula plan is valued by taking into account the five-year lock-up period for the employees (as in the traditional plan) but adding the value of the advantage granted to the employees by enabling them to benefit from an institutional derivatives-based pricing instead of a retail pricing. 1.17. PROVISIONS FOR RISKS, CHARGES AND CONTINGENT LIABILITIES 1.17.1. Restructuring costs Restructuring provisions other than those that may be recognized on the balance sheet of an acquired company on the acquisition date are recorded when the Group has a present obligation evidenced by a binding sale agreement or a detailed formal plan whose main features are announced to those affected or to their representatives. 1.17.2. Other provisions and contingencies Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation, and when the provision can be reliably estimated. Provisions are not recognized for future operating losses. The same applies to contingent liabilities, except if identified at the time of a business combination (see paragraph 1.3.2). Provisions are measured at management’s best estimate, at the balance sheet date, of the expenditure required to settle the obligation, discounted at the market risk-free rate of return for long term provisions. 1.18. REVENUE RECOGNITION 1.18.1. Gross written premiums Gross written premiums correspond to the amount of premiums written by insurance and reinsurance companies on business incepted in the year with respect to both insurance contracts and investment contracts with discretionary participating features, net of cancellations and gross of reinsurance ceded. For reinsurance, premiums are recorded on the basis of declarations made by the ceding company, and may include estimates of gross written premiums. 1.18.2. discretionary participating features Fees and revenues from investment contracts with no Amounts collected as premiums from investment contracts with no discretionary participating features are reported as deposits net of any loadings and policy fees. Revenues from these contracts consist of loadings and policy fees relating to underwriting, investment management, administration and surrender of the contracts during the period. Front-end fees collected corresponding to fees for future services are recognized over the estimated life of the contract (see “Unearned fees reserves” paragraph 1.13.3). 1.18.3. Deposit accounting Investment contracts with no discretionary participating features fall within the scope of IAS 39. Deposit accounting applies to these contracts, which involves the following: the Group directly recognizes the consideration received as a deposit financial liability rather than as revenues; claims paid are recognized as withdrawals with no posting in the income statement apart from potential fees. Half Year 2013 Financial Report 109 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 1.18.4. Unbundling The Group unbundles the deposit component of contracts when required by IFRS 4, i.e. when both the following conditions are met: the Group can measure separately the “deposit” component (including any embedded surrender option, i.e. without taking into account the “insurance” component); the Group accounting methods do not otherwise require to recognize all obligations and rights arising from the “deposit” component. No such situation currently exists within the Group. In accordance with IFRS 4, the Group continues to use the accounting principles previously applied by AXA to insurance contracts and investment contracts with discretionary participating features. According to these principles, there are no situations in which all rights and obligations related to contracts are not recognized. 1.18.5. and fees Change in unearned premiums reserves net of unearned revenues Changes in unearned premium reserves net of unearned revenues and fees include both the change in the unearned premiums reserve reported as a liability (see “Unearned premiums reserves” in paragraph 1.13.2) and the change in unearned revenues and fees. Unearned revenues and fees correspond to upfront charges for future services recognized over the estimated life of insurance and investment contracts with discretionary participating features (see “Unearned revenues reserves” in paragraph 1.13.2) and investment contracts with no discretionary participating features (see paragraph 1.13.3 “Unearned fees reserves”). 1.18.6. Net revenues from banking activities Net revenues from banking activities include all revenues and expenses from banking operating activities, including interests expenses not related to financing, banking fees, capital gains and losses on sales of financial assets, change in fair value of assets under fair value option and related derivatives. They exclude bank operating expenses and change in bad debt provisions, doubtful receivables or loans, which are recorded in the item “Bank operating expenses”. 1.18.7. Revenues from other activities Revenues from other activities mainly include: commissions received and fees for services relating to asset management activities; insurance companies revenues from non insurance activities, notably commissions received on sales or distribution of financial products; and rental income received by real estate management companies. 1.18.8. Policyholders’ participation The half year policyholders’ participation charge is based on the best estimate of the planned full year distribution rate for each portfolio of contracts at each Group entity level. 110 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 1.18.9. Net investment result excluding financing expenses The net investment result includes: investment income from investments from non banking activities, net of depreciation expense on real estate investments (depreciation expense relating to owner occupied properties is included in the “administrative expenses” aggregate); this item includes interest received calculated using the effective interest method for debt instruments and dividends received on equity instruments; investment management expenses (excludes financing debt expenses); realized investment gains and losses net of releases of impairment following sales; the change in unrealized gains and losses on invested assets measured at fair value through profit or loss; the change in impairment of investments (excluding releases of impairment following sales). In respect of banking activities, interest income and expenses are included in the “Net revenue from banking activities” item (see paragraph 1.18.6). 1.19. SUBSEQUENT EVENTS Subsequent events relate to events that occur between the balance sheet date and the date when the financial statements are authorized for issue: such events lead to an adjustment of the consolidated financial statements if they provide evidence of conditions that existed at the balance sheet date; such events result in additional disclosures if indicative of conditions that arose after the balance sheet date, and if relevant and material. Half Year 2013 Financial Report 111 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Note 2 Scope of consolidation 2.1. CONSOLIDATED COMPANIES 2.1.1. Main fully consolidated companies June 30, 2013 Parent and Holding Companies Change in scope Voting rights percentage Group share of interests France AXA AXA Asia AXA China AXA France Assurance Oudinot Participations Société Beaujon Parent company 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 AXA Technology Services 99.99 99.99 United States AXA Financial, Inc. 100.00 100.00 AXA America Holding Inc. 100.00 100.00 United Kingdom Guardian Royal Exchange Plc AXA UK Plc 100.00 100.00 99.98 99.98 AXA Equity & Law Plc 99.96 99.96 Asia/Pacific (excluding Japan) National Mutual International Pty Ltd AXA Financial Services (Singapore) 100.00 100.00 100.00 100.00 AXA India Holding 100.00 100.00 Japan AXA Japan Holding 99.02 99.02 Germany Kölnische Verwaltungs AG für Versicherungswerte 100.00 100.00 AXA Konzern AG 100.00 100.00 Belgium AXA Holdings Belgium 100.00 100.00 Luxembourg AXA Luxembourg SA 100.00 100.00 Finance Solutions SARL 100.00 100.00 The Netherlands Vinci BV 100.00 100.00 Mediterranean and Latin American Region AXA Mediterranean Holding SA AXA Italia S.p.A. AXA Holding Maroc S.A. 100.00 100.00 100.00 100.00 100.00 100.00 AXA Turkey Holding A.S. 100.00 100.00 112 Half Year 2013 Financial Report December 31, 2012 Voting rights percentage Group share of interests Parent company 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.99 99.99 100.00 100.00 100.00 100.00 100.00 100.00 99.98 99.98 99.96 99.96 100.00 100.00 100.00 100.00 100.00 100.00 99.02 99.02 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Life & Savings and Property & Casualty France AXA France IARD AXA France Vie AXA Protection Juridique United States AXA Equitable Life Insurance Company Mony Life Insurance Company (a) AXA Re Arizona Company United Kingdom AXA Insurance UK Plc AXA PPP Healthcare Limited AXA Isle of Man Limited AXA Wealth Limited Architas Multi-Manager Limited AXA Portfolio Services Limited Ireland AXA Insurance Limited AXA Life Europe Limited AXA Reinsurance Ireland Limited Asia/Pacific (excluding Japan) AXA Life Insurance Singapore AXA China Region Limited AXA General Insurance Hong Kong Ltd. AXA Insurance Singapore PT AXA Life Indonesia MLC Indonesia AXA Affin General Insurance Berhad (b) AXA Insurance Public Company Limited (Thailand) (c) Japan AXA Life Insurance Germany AXA Versicherung AG AXA Art AXA Lebensversicherung AG Pro Bav Pensionskasse Deutsche Ärzteversicherung AXA Krankenversicherung AG DBV-Winterthur Lebensversicherung AG Winsecura Pensionskasse AG Rheinisch-Westfälische Sterbekasse Lebensversicherung AG DBV Deutsche Beamten-Versicherung AG Belgium Ardenne Prévoyante AXA Belgium SA Servis SA Les Assurés Réunis Luxembourg AXA Assurances Luxembourg AXA Assurances Vie Luxembourg Mediterranean and Latin American Region AXA Vida, S. A. de Seguros (Spain) AXA Aurora Vida, S.A. de Seguros (Spain) AXA Seguros Generales, S. A. (Spain) AXA Interlife (Italy) AXA Assicurazioni e Investimenti (Italy) AXA MPS Vita (Italy) AXA MPS Danni (Italy) AXA MPS Financial (Italy) AXA Portugal Companhia de Seguros SA AXA Portugal Companhia de Seguros de Vida SA AXA Assurance Maroc AXA Hayat ve Emeklilik A.S. (Turkey) AXA Sigorta AS (Turkey) AXA Cooperative Insurance Company (Gulf) AXA Insurance (Gulf) B.S.C.c. AXA Insurance A.E. (Greece) AXA Seguros S.A. de C.V. (Mexico) AXA Middle East SAL (Lebanon) (c) Switzerland CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 June 30, 2013 December 31, 2012 Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests 99.92 99.77 99.92 99.77 99.92 99.77 99.92 99.77 98.51 98.51 98.51 98.51 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.98 99.98 99.98 99.98 99.98 100.00 100.00 100.00 100.00 100.00 99.98 99.98 99.98 99.98 99.98 100.00 99.98 100.00 99.98 100.00 100.00 99.98 100.00 100.00 100.00 99.98 100.00 100.00 100.00 100.00 100.00 Minority interests buyout 100.00 100.00 100.00 100.00 100.00 100.00 42.48 100.00 100.00 100.00 100.00 100.00 100.00 42.48 100.00 100.00 100.00 100.00 100.00 100.00 42.41 100.00 100.00 100.00 100.00 100.00 100.00 42.41 Newly consolidated 99.31 99.31 100.00 99.02 100.00 99.02 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 - 100.00 100.00 100.00 100.00 100.00 100.00 99.74 100.00 - 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.74 99.74 100.00 Disposal 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Minority interests buyout 100.00 100.00 99.95 99.95 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.82 99.96 99.90 100.00 100.00 99.82 99.78 99.90 99.99 99.99 99.82 99.96 99.90 100.00 100.00 99.82 99.78 99.90 99.99 99.99 50.00 + 1 voting right 50.00 50.00 + 1 voting right 50.00 50.00 + 1 voting right 50.00 50.00 + 1 voting right 50.00 50.00 + 1 voting right 50.00 50.00 + 1 voting right 50.00 Minority interests buyout 99.73 95.09 100.00 100.00 89.80 50.00 50.00 99.98 99.97 99.49 94.89 100.00 100.00 89.80 34.00 50.00 99.98 99.97 99.73 95.09 100.00 100.00 72.59 50.00 50.00 99.98 99.97 99.49 94.89 100.00 100.00 72.59 34.00 50.00 99.98 99.97 Newly consolidated 51.00 51.00 Half Year 2013 Financial Report 113 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 AXA Life (previously Winterthur Life) AXA-ARAG Legal Assistance 100.00 66.67 100.00 66.67 100.00 66.67 100.00 66.67 AXA Insurance (previously Winterthur Swiss Insurance P&C) 100.00 100.00 100.00 100.00 Central and Eastern Europe AXA Czech Republic Pension Funds AXA Czech Republic Insurance AXA Hungary AXA Poland AXA Poland Pension Funds AXA Slovakia 99.99 100.00 100.00 100.00 100.00 100.00 99.99 100.00 100.00 100.00 100.00 100.00 99.99 100.00 100.00 100.00 100.00 100.00 99.99 100.00 100.00 100.00 100.00 100.00 AXA Ukraine 50.17 50.17 50.17 50.17 Direct (d) Avanssur (France and Poland) Kyobo AXA General Insurance Co. Ltd. (South Korea) AXA Non Life Insurance Co. Ltd. (Japan) Touring Assurances SA (Belgium) Hilo Direct SA de Seguros y Reaseguros (Spain) Quixa S.p.A (Italy) 100.00 99.52 100.00 100.00 100.00 100.00 100.00 99.52 99.02 100.00 100.00 100.00 100.00 99.52 100.00 100.00 100.00 100.00 100.00 99.52 99.02 100.00 100.00 99.99 Seguro Directo Gere Companhia de Seguros SA (Portugal) 100.00 100.00 100.00 100.00 (a) Assets and liabilities related to MONY Life Insurance Company portfolio for which the disposal process is not yet finalized were classified as held for sale as of June 30, 2013 (see Note 4.1). (b) AXA Group exercises control in accordance with shareholders' agreements. (c) Consolidation through Equity Method as a proxy due to low materiality. (d) UK Direct activities are held by AXA Insurance UK Plc. June 30, 2013 December 31, 2012 International Insurance (entities having worldwide activities) Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests AXA Corporate Solutions Assurance (sub-group) AXA Global P&C AXA Global Life AXA Assistance (sub group) Portman Insurance Ltd. Colisée RE 98.75 100.00 100.00 100.00 100.00 100.00 98.75 100.00 100.00 100.00 100.00 100.00 98.75 100.00 100.00 100.00 100.00 100.00 98.75 100.00 100.00 100.00 100.00 100.00 AXA Corporate Solutions Life Reinsurance Company 100.00 100.00 100.00 100.00 June 30, 2013 December 31, 2012 Asset Management (entities having worldwide activities) Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests AXA Investment Managers (sub group) 95.87 95.82 95.87 95.82 AllianceBernstein (sub group) (a) 64.20 64.20 65.51 65.51 (a) The decrease in the Group share of interest is mainly due to the granting of holding units to the employees in relation with the share-based compensation programs June 30, 2013 December 31, 2012 Banking Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France AXA Banque 100.00 99.89 100.00 99.89 AXA Banque Financement 65.00 64.93 65.00 64.93 Germany AXA Bank AG 100.00 100.00 100.00 100.00 Belgium AXA Bank Europe (sub group) 100.00 100.00 100.00 100.00 June 30, 2013 December 31, 2012 Other Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France CFP Management 100.00 100.00 100.00 100.00 Consolidated investments and investment funds As of June 30, 2013, consolidated investment funds represented total invested assets of €109 billion (€104 billion at the end of 2012), corresponding to 298 investment funds mainly in France, Japan and Germany and in majority relating to the Life & Savings segment. 114 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 As of June 30, 2013, the 30 consolidated real estate companies corresponded to total invested assets of €6,481 million (€6,717 million at the end of 2012), mainly in Germany and France. In most investment funds (particularly open-ended investment funds), minority interests do not meet the definition of shareholders’ equity. They are therefore presented as liabilities under “Minority interests of consolidated investment funds and puttable instruments held by minority interest holders”. As of June 30, 2013, minority interests in consolidated investment funds amounted to €6,244 million (€3,775 million as of December 31, 2012). 2.1.2. Proportionately consolidated companies June 30, 2013 December 31, 2012 Life & Savings and Property & Casualty Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France Natio Assurances 50.00 49.96 50.00 49.96 2.1.3. method Main investments in companies accounted for using the equity Companies accounted for using the equity method listed below exclude investment funds and real estate entities: June 30, 2013 December 31, 2012 Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France Neuflize Vie 39.98 39.98 39.98 39.98 Asia/Pacific Philippines AXA Life Insurance Corporation Krungthai AXA Life Insurance Company Ltd (Thailand) ICBC-AXA Life Insurance Co. Ltd (China) PT AXA Mandiri Financial Services (Indonesia) Bharti AXA Life (India) 45.00 50.00 27.50 49.00 26.00 45.00 50.00 27.50 49.00 26.00 45.00 50.00 27.50 49.00 26.00 45.00 50.00 27.50 49.00 26.00 Bharti AXA General Insurance Company Limited (India) Newly consolidated 26.00 26.00 Russia Reso Garantia (RGI Holdings B.V.) 39.34 39.34 39.34 39.34 Asset Management AXA Investment Managers Asia Holdings Private Limited 49.00 46.95 49.00 46.95 Kyobo AXA Investment Managers Company Limited 50.00 47.91 50.00 47.91 Investment funds and real estate entities accounted for using the equity method. As of June 30, 2013, real estate companies accounted for using the equity method represented total assets of €274 million (€296 million at the end of 2012) and investment funds accounted for using the equity method represented total assets of €4,728 million (€4,900 million at the end of 2012), mainly in the United States, Germany, Belgium, Switzerland and the United Kingdom. 2.2. CONSOLIDATED ENTITIES RELATING TO SPECIFIC OPERATIONS Arche Finance In 2008, AXA France invested in Arche Finance, an investment vehicle dedicated to credit investment, which entered the scope of consolidation in June 2008 with a loan of €200 million. Held assets amounted to €1,200 million as of June 30, 2013. Hordle In 2009, AXA set up a Group financing and cash management company which benefited from a loan of £673 million. Half Year 2013 Financial Report 115 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Note 3 Consolidated statement of income by segment Given the activities of AXA, the operating results are presented on the basis of five operating business segments: Life & Savings, Property & Casualty, International Insurance, Asset Management and Banking. An additional \"Holding companies\" segment includes all non-operational activities. The financial information relating to AXA's business segments and holding Company activities reported to the Board of Directors twice a year is consistent with the presentation provided in the consolidated financial statements. The Group has set up an organization by Global business lines for both Life & Savings and Property & Casualty in order to improve the speed and effectiveness of the organization and further leverage its size. The Life & Savings Global business line, as part of its role to define a common strategy has set the following priorities: accelerate diversification into Protection and Health; enhance profitability in Savings business; prioritize investments for growth; foster business efficiency. The Property & Casualty Global business line is responsible for: defining common Property & Casualty strategy; accelerating efficiency gains; building common platforms; leveraging global technical expertise. Life & Savings: AXA offers a broad range of Life & Savings products including individual and group savings retirement products, life and health products. They comprise traditional term and whole life insurance, immediate annuities and investment products (including endowments, savings-related products, such as variable life and variable annuity products). The Life & Savings segment aggregates nine geographic operating components: France, the United States, the United Kingdom, Japan, Germany, Switzerland, Belgium, the Mediterranean and Latin American Region and other countries. Property & Casualty: This segment includes a broad range of products including mainly motor, household, property and general liability insurance for both personal and commercial customers (commercial customers being mainly small to medium-sized companies). In some countries, this segment includes health products. The Property & Casualty segment aggregates nine geographical operating components (France, Germany, the United Kingdom and Ireland, Switzerland, Belgium, the Mediterranean and Latin American Region, Central Eastern Europe, Asia and Other countries) and one operating component for the Direct business (previously included within countries and regions and now reported as a separate reporting unit). International Insurance: This segment’s operations include insurance products that notably relate to AXA Corporate Solutions Assurance. These products provide coverage to large national and international corporations. This segment also includes assistance activities, life reinsurance activities in run-off primarily AXA Corporate Solutions Life Reinsurance Company and the Group Property & Casualty run-off managed by AXA Liabilities Managers. The Asset Management segment includes diversified asset management (including investment fund management) and related services offered by AXA Investment Managers and AllianceBernstein entities, which are provided to a variety of institutional investors and individuals, including AXA’s insurance companies. The Banking segment includes banking activities (mainly retail banking, mortgage loans, savings) conducted primarily in France, Belgium and Germany. The Holding companies segment (that includes all non-operational activities), also includes some investment vehicles and Special-Purpose Entities (SPE). The inter-segment eliminations include only operations between entities from different segments. They mainly relate to reinsurance treaties, assistance guarantees recharging, asset management fees and interests on loans within the Group. In this document, “Insurance” covers the three insurance segments: Life & Savings, Property & Casualty and International Insurance. The term “Financial Services” includes both the Asset Management segment and the Banking segment. 116 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 3.1. CONSOLIDATED STATEMENT OF INCOME BY SEGMENT (in Euro million) June 30, 2013 Life & savings Property & Casualty International Insurance Asset Management Banking Holding companies Inter- segment eliminations TOTAL Gross written premiums 28,927 16,665 1,843 (267) 47,168 Fees and charges relating to investment contracts with no participating features 133 133 Revenues from insurance activities 29,060 16,665 1,843 (267) 47,301 Net revenues from banking activities 287 0 4 291 Revenues from other activities 583 28 137 1,915 2 (214) 2,451 Revenues 29,643 16,693 1,980 1,915 290 0 (477) 50,044 Change in unearned premiums net of unearned revenues and fees (1,178) (2,496) (236) 90 (3,819) Net investment income (a) 4,849 1,008 78 4 (0) 307 (295) 5,951 Net realized gains and losses relating to investments at cost and at fair value through shareholders'equity Net realized gains and losses and change in fair value of other investments at fair value through profit or loss (b) of which change in fair value of assets with financial risk borne by policyholders 1,201 6,573 8,072 180 (109) 8 (7) (4) 24 19 32 (13) (3) 1,405 6,500 8,070 Change in investments impairment (296) (48) (9) (0) (38) (390) Net investment result excluding financing expenses 12,328 1,031 71 24 (0) 320 (307) 13,466 Technical charges relating to insurance activities (35,047) (9,433) (932) 146 (45,267) Net result from outward reinsurance (173) (415) (391) 41 (938) Bank operating expenses (68) 1 (67) Acquisition costs (1,984) (2,451) (222) 29 (4,628) Amortization of the value of purchased business in force (59) (59) Administrative expenses (1,488) (1,295) (111) (1,418) (206) (397) 145 (4,770) Change in tangible assets impairment (0) (0) Change in goodwill impairment and other intangible assets impairment (6) (40) (0) (46) Other income and expenses (74) (10) (0) (102) 13 108 (43) (109) Other operating income and expenses (38,832) (13,644) (1,656) (1,520) (261) (288) 317 (55,884) Income from operating activities before tax 1,961 1,585 158 418 28 33 (377) 3,806 Income arising from investments in associates – Equity method 46 15 0 0 0 62 Financing debt expenses (63) (3) (1) (17) (8) (663) 407 (348) Net income from operating activities before tax 1,944 1,597 157 402 20 (630) 30 3,520 Income tax (390) (445) (73) (128) 1 166 (30) (899) Net operating income 1,554 1,152 84 273 21 (464) 2,621 Net consolidated income after tax 1,554 1,152 84 273 21 (464) 2,621 Split between : Net consolidated income - Group share 1,501 1,130 83 196 20 (464) 2,467 Net consolidated income - Minority interests 54 22 1 77 1 (0) 154 (a) Includes gains/losses from derivatives hedging variable annuities within Life & Savings and International Insurance segments. (b) Includes net realized and unrealized foreign exchange gains and losses relating to investments at cost and at fair value through shareholders'equity. Half Year 2013 Financial Report 117 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 June 30, 2012 (a) Life & savings Property & Casualty International Insurance Asset Management Banking Gross written premiums 27,903 16,363 1,759 Fees and charges relating to investment contracts with no participating features 164 Revenues from insurance activities 28,067 16,363 1,759 Net revenues from banking activities 233 Revenues from other activities 575 28 146 1,734 2 Revenues 28,642 16,391 1,904 1,734 236 Change in unearned premiums net of unearned revenues and fees (1,353) (2,427) (276) Net investment income (b) 7,036 1,034 96 1 (1) Net realized gains and losses relating to investments at cost and at fair value through shareholders'equity Net realized gains and losses and change in fair value of other investments at fair value through profit or loss (c) of which change in fair value of assets with financial risk borne by policyholders 496 6,659 6,227 189 (19) 7 27 (2) 21 Change in investments impairment (269) (102) (5) (1) Net investment result excluding financing expenses 13,922 1,103 125 19 (1) Technical charges relating to insurance activities (35,394) (9,274) (1,163) Net result from outward reinsurance (106) (538) 5 Bank operating expenses (64) Acquisition costs (1,724) (2,407) (189) Amortization of the value of purchased business in force (47) Administrative expenses (1,401) (1,311) (198) (1,305) (205) Change in tangible assets impairment (0) Change in goodwill impairment and other intangible assets impairment (20) (47) (0) Other income and expenses (79) 4 5 (128) 22 Other operating income and expenses (38,771) (13,573) (1,539) (1,433) (247) Income from operating activities before tax 2,441 1,493 215 319 (12) Income arising from investments in associates – Equity method 26 15 0 (0) Financing debts expenses (77) (3) (1) (22) (9) Net income from operating activities before tax 2,389 1,505 213 297 (21) Income tax (587) (480) (77) (84) 13 Net operating income 1,802 1,025 137 213 (9) Net consolidated income after tax 1,802 1,025 137 213 (9) Split between : Net consolidated income - Group share 1,781 1,008 135 152 (9) Net consolidated income - Minority interests 21 16 1 61 1 (a) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (b) Includes gains/losses from derivatives hedging variable annuities within Life & Savings and International Insurance segments. (c) Includes net realized and unrealized foreign exchange gains and losses relating to investments at cost and at fair value through shareholders'equity. 118 Half Year 2013 Financial Report Holding companies 0 0 265 80 (139) (14) 192 (0) (402) 64 (339) (147) 2 (658) (803) 279 (523) (523) (523) (0) Inter- segment eliminations (276) (276) (10) (215) (501) 94 (408) 0 2 (3) (406) 135 66 10 152 (64) 300 (514) 481 (33) 33 (in Euro million) TOTAL 45,749 164 45,913 224 2,268 48,405 (3,962) 8,023 770 6,550 6,224 (390) 14,953 (45,696) (572) (64) (4,310) (47) (4,671) (0) (67) (175) (55,602) 3,795 42 (289) 3,548 (903) 2,645 2,645 2,544 101 CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Note 4 Transactions announced in consolidated entities 4.1. MONY PORTFOLIO TRANSACTION On April 10, 2013, AXA announced that it had entered into definitive agreement with Protective Life Corporation to sell MONY life Insurance Company (“MONY”) and to reinsure an in-force book of life insurance policies written by MONY’s subsidiary MONY Life Insurance Company of America (”MLOA”) primarily prior to 2004. Under the terms of the agreements and assuming a closing date of October 1, 2013, the total cash consideration will be $1.06 billion that corresponds to €0.81 billion using the foreign exchange rate as of June 30, 2013. This announced transaction led to recognize an estimated €-32 million exceptional loss in AXA interim consolidated financial statements as of June 30, 2013, resulting mainly from intangibles impairment, as well as associated costs with the announced transaction. The assets and liabilities of the MONY operations that are subject to the sale transaction were classified as held for sale separately from other assets and liabilities in the consolidated statement of financial position as of June 30, 2013. They related to the following main classes of assets and liabilities (amounts are presented net of intercompany balances with other AXA entities): (in Euro million) June 30, 2013 Intangible assets Investments 256 5,839 Other assets 621 TOTAL ASSETS HELD FOR SALE 6,716 Liabilities arising from insurance and investment contracts Provisions for risks and charges Other liabilities 6,240 10 (94) TOTAL LIABILITIES HELD FOR SALE 6,157 As of June 30, 2013, comprehensive income amounted to €25 million. 4.2. HSBC PORTFOLIO On March 7, 2012, AXA and HSBC announced they had entered into an agreement whereby AXA would acquire HSBC’s P&C businesses in Hong Kong, Singapore and Mexico. In addition, AXA would benefit from a 10-year exclusive P&C bancassurance agreement with HSBC in these countries as well as in China, India and Indonesia. On November 5, 2012, AXA announced it has completed the acquisition of HSBC’s P&C businesses in Hong Kong and Singapore, and that it has consequently launched its exclusive P&C bancassurance cooperation with HSBC in these countries. This operation resulted in a goodwill of €169 million. The value of the distribution agreement was recognized as an intangible asset of €145 million and will be amortized over 10 years. On April 1, 2013, AXA finalised the acquisition of HSBC’s P&C operations in Mexico and launched subsequently the exclusive P&C bancassurance cooperation in this country. The value of the distribution agreement is recognized as an intangible asset of €44 million and will be amortized over 10 years. The P&C bancassurance cooperation in China, India and Indonesia will be launched in due course. Half Year 2013 Financial Report 119 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 4.3. AXA BANK SWITZERLAND AXA Bank Switzerland closed its operations on February 29, 2012 following the transfer of its customer portfolio to Bank zweiplus on January 1, 2012. Related assets and liabilities (€189 million) were classified as held for sale as of January 1, 2012. 120 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Note 5 Investments Certain investment properties (see Note 1), available-for-sale investments, trading assets, instruments designated as at fair value through P&L and all derivatives are measured at fair value in the financial statements. In addition, this note also discloses the fair value of investment properties and financial assets held at cost. Principles applied in measuring fair value generally described in Note 1 are further detailed in Note 5.2 (investment in real estate properties) and 5.5 (financial assets recognized at fair value). 5.1. BREAKDOWN OF INVESTMENTS Each investment item is presented net of the effect of related hedging derivatives (IAS 39 qualifying hedges or economic hedges) except derivatives related to macro-hedges shown separately. Insurance June 30, 2013 (a) Other activities Total (in Euro million) Fair value Carrying value % (value balance sheet) Fair value Carrying value % (value balance sheet) Fair value Carrying value Investment in real estate properties at amortized cost Investment in real estate properties designated as at fair value through profit or loss (b) Macro-hedge and other derivatives 20,895 1,056 16,462 1,056 2.75% 0.18% 3,176 2,080 5.39% 24,071 1,056 18,542 1,056 Investment in real estate properties 21,951 17,518 2.92% 3,176 2,080 5.39% 25,127 19,598 Debt instruments held to maturity Debt instruments available for sale Debt instruments designated as at fair value through profit or loss (c) Debt instruments held for trading Debt instruments (at cost) that are not quoted in an active market (d) 324,190 33,329 314 6,828 324,190 33,329 314 6,950 54.10% 5.56% 0.05% 1.16% 9,512 71 22 2,603 9,512 71 22 2,603 24.65% 0.18% 0.06% 6.75% 333,702 33,400 335 9,432 333,702 33,400 335 9,554 Debt instruments 364,661 364,783 60.88% 12,208 12,208 31.63% 376,869 376,991 Equity instruments available for sale Equity instruments designated as at fair value through profit or loss (b) Equity instruments held for trading 13,209 6,755 96 13,209 6,755 96 2.20% 1.13% 0.02% 2,856 475 2,856 475 7.40% 1.23% 16,064 7,230 96 16,064 7,230 96 Equity instruments 20,060 20,060 3.35% 3,330 3,330 8.63% 23,390 23,390 Non consolidated investment funds available for sale Non consolidated investment funds designated as at fair value through profit or loss (b) Non consolidated investment funds held for trading 5,996 5,028 5,996 5,028 1.00% 0.84% 265 328 320 265 328 320 0.69% 0.85% 0.83% 6,261 5,356 320 6,261 5,356 320 Non consolidated investment funds 11,024 11,024 1.84% 912 912 2.36% 11,936 11,936 Other assets designated as at fair value through profit or loss, held by consolidated investment funds 4,843 4,843 0.81% 1 1 0.00% 4,844 4,844 Macro-hedge and other derivatives 1,278 1,278 0.21% (1,452) (1,452) 3.76% (174) (174) Financial investments 401,866 401,989 67.09% 14,999 14,999 38.87% 416,865 416,987 Loans held to maturity Loans available for sale Loans designated as at fair value through profit or loss (b) Loans held for trading Loans at cost (e) Macro-hedge and other derivatives 0 0 - 25,999 0 0 - 24,998 0.00% 0.00% - 4.17% - - - 22,981 7 - - - 21,504 7 - - - 55.72% 0.02% 0 0 - 48,980 7 0 0 - 46,501 7 Loans 25,999 24,998 4.17% 22,989 21,511 55.74% 48,988 46,509 Assets backing contracts where the financial risk is borne by policyholders 154,681 154,681 25.82% 154,681 154,681 INVESTMENTS 604,499 599,187 100.00% 41,163 38,589 100.00% 645,662 637,776 Investments (excluding those backing contracts where the financial risk is borne by policyholders) 449,817 444,505 74.18% Life & Savings Property & Casualty 383,999 58,307 379,455 57,541 63.33% 9.60% International Insurance 7,511 7,510 1.25% (a) Assets and liabilities related to MONY Life Insurance Company portfolio for which the disposal process is not yet finalized were classified as held for sale as of June 30, 2013 (see Note 4.1). (b) Assets measured at fair value under the fair value option. (c) Includes assets measured at fair value notably under the fair value option. (d) Eligible to the IAS 39 Loans and Receivables measurement category. (e) Mainly relates to mortgage loans and policy loans. Half Year 2013 Financial Report % (value balance sheet) 2.91% 0.17% 3.07% 52.32% 5.24% 0.05% 1.50% 59.11% 2.52% 1.13% 0.02% 3.67% 0.98% 0.84% 0.05% 1.87% 0.76% 0.03% 65.38% 0.00% 0.00% - 7.29% 0.00% 7.29% 24.25% 100.00% 121 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Insurance December 31, 2012 Other activities Total (in Euro million) Fair value Carrying value % (value balance sheet) Fair value Carrying value % (value balance sheet) Fair value Carrying value Investment in real estate properties at amortized cost Investment in real estate properties designated as at fair value through profit or loss (a) Macro-hedge and other derivatives 20,348 1,224 15,968 1,224 2.64% 0.20% 3,487 2,461 6.99% 23,835 1,224 18,429 1,224 Investment in real estate properties 21,572 17,192 2.84% 3,487 2,461 6.99% 25,059 19,653 Debt instruments held to maturity Debt instruments available for sale Debt instruments designated as at fair value through profit or loss (b) Debt instruments held for trading Debt instruments (at cost) that are not quoted in an active market (c) 341,965 29,861 405 6,191 341,965 29,861 405 5,998 56.45% 4.93% 0.07% 0.99% 8,372 63 21 1,817 8,372 63 21 1,817 23.78% 0.18% 0.06% 5.16% 350,336 29,924 426 8,008 350,336 29,924 426 7,815 Debt instruments 378,421 378,228 62.43% 10,273 10,273 29.19% 388,694 388,501 Equity instruments available for sale Equity instruments designated as at fair value through profit or loss (a) Equity instruments held for trading 12,630 6,635 45 12,630 6,635 45 2.08% 1.10% 0.01% 2,413 411 2,413 411 6.85% 1.17% 15,042 7,046 45 15,042 7,046 45 Equity instruments 19,309 19,309 3.19% 2,824 2,824 8.02% 22,133 22,133 Non consolidated investment funds available for sale Non consolidated investment funds designated as at fair value through profit or loss (a) Non consolidated investment funds held for trading 6,381 5,326 6,381 5,326 1.05% 0.88% 386 287 339 386 287 339 1.10% 0.82% 0.96% 6,767 5,613 339 6,767 5,613 339 Non consolidated investment funds 11,707 11,707 1.93% 1,013 1,013 2.88% 12,720 12,720 Other assets designated as at fair value through profit or loss, held by consolidated investment funds 4,777 4,777 0.79% 1 1 0.00% 4,778 4,778 Macro-hedge and other derivatives 1,675 1,675 0.28% (1,988) (1,988) 5.65% (314) (314) Financial investments 415,889 415,697 68.62% 12,122 12,122 34.44% 428,012 427,819 Loans held to maturity Loans available for sale Loans designated as at fair value through profit or loss (a) Loans held for trading Loans at cost (d) Macro-hedge and other derivatives (0) 0 - 27,324 (0) 0 - 25,772 0.00% 0.00% - 4.25% - 0 - 22,333 3 - 0 - 20,613 3 - 0.00% - 58.56% 0.01% (0) 1 - 49,657 3 (0) 1 - 46,385 3 Loans 27,324 25,772 4.25% 22,336 20,616 58.57% 49,660 46,388 Assets backing contracts where the financial risk is borne by policyholders 147,162 147,162 24.29% 147,162 147,162 INVESTMENTS 611,948 605,823 100.00% 37,945 35,199 100.00% 649,893 641,022 Investments (excluding those backing contracts where the financial risk is borne by policyholders) 464,786 458,661 75.71% Life & Savings Property & Casualty 398,682 58,126 393,367 57,317 64.93% 9.46% International Insurance 7,978 7,977 1.32% (a) Assets measured at fair value under the fair value option. (b) Includes assets measured at fair value notably under the fair value option. (c) Eligible to the IAS 39 Loans and Receivables measurement category. (d) Mainly relates to mortgage loans and policy loans. The exposure as of June 30, 2013 and December 31, 2012 to sovereign debt securities issued by governments and related in Greece, Ireland, Italy, Portugal and Spain, and classified as available for sale was as follows: Issuer(in Euro million)Fair ValueAmortized Cost / Carrying valueUnrealized gains and losses(Gross value)Unrealized gains and losses (Net value)Fair ValueAmortized Cost / Carrying valueUnrealized gains and losses(Gross value)Unrealized gains and losses (Net value)Greece- - - - - - - - Ireland3,040 2,871 169 69 2,786 2,686 100 39 Italy17,715 17,440 275 11 16,214 15,881 332 63 Portugal622 735 (113) (9) 677 862 (185) (18) Spain9,227 9,210 17 81 7,160 7,552 (392) (60) Total30,605 30,255 349 151 26,837 26,981 (145) 24 June 30, 2013December 31, 2012 Net amounts correspond to amounts after the related impacts of deferred tax and shadow accounting on policyholders’ participation, deferred acquisition cost and value of purchased business in force and are presented at 100% share. Net amounts may evolve depending on the timing of realization of these potential gains and losses, and depending on the local regulatory environment. 122 Half Year 2013 Financial Report % (value balance sheet) 2.87% 0.19% 3.07% 54.65% 4.67% 0.07% 1.22% 60.61% 2.35% 1.10% 0.01% 3.45% 1.06% 0.88% 0.05% 1.98% 0.75% 0.05% 66.74% 0.00% 0.00% - 7.24% 0.00% 7.24% 22.96% 100.00% CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 5.2. INVESTMENT IN REAL ESTATE PROPERTIES Investment in real estate properties include buildings owned directly and through real estate subsidiaries. Breakdown of the carrying value and fair value of investments in real estate properties at amortized cost, excluding the impact of all derivatives: June 30, 2013 (a) December 31, 2012 (in Euro million) Gross value Amortization Impairment Carrying value Fair value Gross value Amortization impairment Carrying value Fair value Investment in real estate properties at amortized cost Insurance 18,986 (1,925) (599) 16,462 20,895 18,358 (1,850) (541) 15,968 20,348 Other activities 2,713 (218) (415) 2,080 3,176 3,019 (209) (350) 2,461 3,487 All activities 21,699 (2,143) (1,014) 18,542 24,071 21,377 (2,058) (890) 18,429 23,835 (a) Assets and liabilities related to MONY Life Insurance Company portfolio for which the disposal process is not yet finalized were classified as held for sale as of June 30, 2013 (see Note 4.1). Fair value is generally based on valuations performed by qualified property appraisers. Valuations are based on a multi- criteria approach and their frequency and terms are often based on local regulations. Change in impairment and amortization of investments in real estate properties at amortized cost (all activities): Impairment - Investment in real estate properties Amortization - Investment in real estate properties (in Euro million) June 30, 2013 (a) December 31, 2012 June 30, 2013 (a) December 31, 2012 Opening value 890 822 2,058 1,847 Increase for the period 111 91 131 266 Write back following sale or reimbursement (1) (23) (27) (29) Write back following recovery in value (6) (28) Others (b) 20 28 (19) (25) Closing value 1,014 890 2,143 2,058 (a) Assets and liabilities related to MONY Life Insurance Company portfolio for which the disposal process is not yet finalized were classified as held for sale as of June 30, 2013 (see Note 4.1). (b) Includes change in scope and the effect of changes in exchange rates. 5.3. UNREALIZED GAINS AND LOSSES ON FINANCIAL INVESTMENTS Excluding the effect of derivatives, unrealized capital gains and losses on financial investments, when not already reflected in the income statement, are allocated as follows: (in Euro million) June 30, 2013 (a) December 31, 2012 INSURANCE Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale 301,022 6,961 10,851 325,118 6,839 13,036 325,118 6,961 13,036 26,830 111 2,350 2,734 233 165 308,760 6,010 9,547 342,815 6,203 11,757 342,815 6,010 11,757 36,295 232 2,257 2,240 39 47 Non consolidated investment funds available for sale 5,214 6,042 6,042 938 109 5,513 6,368 6,368 940 84 (in Euro million) June 30, 2013 (a) December 31, 2012 OTHER ACTIVITIES Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale 9,656 2,603 3,005 9,617 2,603 3,223 9,617 2,603 3,223 133 259 171 41 8,539 1,817 3,108 8,615 1,817 3,483 8,615 1,817 3,483 250 380 174 5 Non consolidated investment funds available for sale 264 265 265 1 0 386 386 386 Half Year 2013 Financial Report 123 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 (in Euro million) June 30, 2013 (a) December 31, 2012 TOTAL Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale 310,677 9,565 13,856 334,735 9,443 16,259 334,735 9,565 16,259 26,963 111 2,609 2,905 233 206 317,299 7,827 12,655 351,430 8,020 15,241 351,430 7,827 15,241 36,545 232 2,637 2,414 39 52 Non consolidated investment funds available for sale 5,478 6,307 6,307 939 109 5,899 6,754 6,754 940 84 (a) Assets and liabilities related to MONY Life Insurance Company portfolio for which the disposal process is not yet finalized were classified as held for sale as of June 30, 2013 (see Note 4.1). (b) Net of impairment - including premiums/discounts and related accumulated amortization. (c) Net of impairment. 5.4. FINANCIAL ASSETS SUBJECT TO IMPAIRMENT 5.4.1. investment in real estate properties) Breakdown of financial assets subject to impairment (excluding Each investment item is presented net of the effect of related hedging derivatives (IAS 39 qualifying hedges or economic hedges) except derivatives related to macro hedges shown separately. June 30, 2013 (a) December 31, 2012 Cost before impairment and revaluation to fair value (b) Impairment Cost after impairment but before revaluation to fair value (c) Revaluation to fair value Carrying value Cost before impairment and revaluation to fair value (b) Impairment Cost after impairment but before revaluation to fair value (c) Revaluation to fair value Carrying value (in Euro million) Debt instruments available for sale 311,013 (1,254) 309,759 23,943 333,702 317,609 (1,340) 316,269 34,067 350,336 Debt instruments (at cost) that are not quoted in an active market (e) 9,557 9,557 (4) 9,554 7,806 7,806 9 7,815 Debt instruments 320,570 (1,254) 319,316 23,940 343,256 325,415 (1,340) 324,076 34,076 358,151 Equity instruments available for sale 16,308 (2,452) 13,857 2,208 16,064 15,144 (2,488) 12,656 2,386 15,042 Non consolidated investment funds available for sale 6,464 (986) 5,478 783 6,261 6,937 (1,038) 5,899 868 6,767 Loans held to maturity Loans available for sale 4 (4) 0 0 0 (0) 0 0 0 Loans at cost (d) (e) 47,511 (621) 46,890 (388) 46,501 47,496 (601) 46,895 (510) 46,385 Loans 47,515 (626) 46,890 (388) 46,501 47,497 (601) 46,895 (510) 46,385 TOTAL 390,858 (5,318) 385,540 26,542 412,082 394,993 (5,467) 389,526 36,820 426,346 (a) Assets and liabilities related to MONY Life Insurance Company portfolio for which the disposal process is not yet finalized were classified as held for sale as of June 30, 2013 (see Note 4.1). (b) Asset value including impact of discounts/premiums and accrued interests, but before impairment and revaluation to fair value of assets available for sale. (c) Asset value including impairment, discounts/premiums and accrued interests, but before revaluation to fair value of assets available for sale. (d) Including policy loans. (e) Revaluation to fair value for instruments at cost related to the application of hedge accounting. 5.4.2. in real estate properties) Change in impairment on invested assets (excluding investment (in Euro million) January 1, 2013 Increase for the period Write back following sale or reimbursement Write back following recovery in value Other (b) June 30, 2013 (a) Impairment - Debt instruments 1,340 66 (91) (4) (57) 1,254 Impairment - Equity instruments 2,488 225 (230) (32) 2,452 Impairment - Non consolidated investment funds 1,038 54 (64) (42) 986 Impairment - Loans 601 76 (4) (42) (6) 626 TOTAL 5,467 422 (389) (46) (136) 5,318 (a) Assets and liabilities related to MONY Life Insurance Company portfolio for which the disposal process is not yet finalized were classified as held for sale as of June 30, 2013 (see Note 4.1). (b) Mainly relates to changes in the scope of consolidation and impact of changes in exchange rates. 124 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 (in Euro million) January 1, 2012 Increase for the period Write back following sale or reimbursement Write back following recovery in value Other (a) December 31, 2012 Impairment - Debt instruments 2,474 127 (1,226) (25) (11) 1,340 Impairment - Equity instruments 2,883 411 (760) (47) 2,488 Impairment - Non consolidated investment funds 1,141 81 (155) (30) 1,038 Impairment - Loans 610 172 (6) (121) (54) 601 TOTAL 7,108 792 (2,147) (145) (141) 5,467 (a) Mainly relates ot changes in the scope of consolidation and impact of changes in exchange rates. 5.5. FINANCIAL ASSETS RECOGNIZED AT FAIR VALUE Among financial investments measured at fair value in the consolidated statement of financial position (excluding derivatives, investment funds consolidated by equity method and contracts where the financial risk is borne by policyholders), i.e. €410 billion as of June 30, 2013 (€423 billion as of December 31, 2012): €259 billion were determined directly by reference to an active market (€252 billion at the end of 2012), i.e. level 1 assets and €151 billion related to assets not quoted in an active market/no active market (€171 billion at the end of 2012), i.e. level 2 and level 3 assets, of which level 3 assets amounted to €10 billion (€10 billion at the end of 2012). Fair values determined in whole directly by reference to an active market relate to prices which are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis, i.e. the market is still active. Such assets are categorized in the level 1 of the IAS 39 fair value hierarchy. Fair values for level 2 and 3 assets include: values provided at the request of the Group by pricing services and which are not readily publicly available or values provided by external parties which are readily available but relate to assets for which the market is not always active; and assets measured on the basis of valuation techniques including a varying degree of assumptions supported by market transactions and observable data. For all assets not quoted in an active market/no active market, the classification between level 2 and level 3 depends on the proportion of assumptions used supported by market transactions and observable data: assumed to be used by pricing services; or used by the Group in the limited cases of application of mark to model valuations. As of June 30, 2013, some assets were reclassified out of level 2 into level 1. This was mainly related to some corporate bonds for which spreads tightened throughout the period. For sovereign bonds, trends observed in 2012 were confirmed in the first semester 2013 with an acceleration of peripheral countries spread contraction and liquidity improvement. These market indicators will continue to be followed to assess the sustainability of those improvements. Therefore, the classification as at June 30, 2013 is maintained similar to the one as at December 31, 2012 levels. Half Year 2013 Financial Report 125 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Note 6 Shareholders’ equity and minority interests 6.1. IMPACT OF TRANSACTIONS WITH SHAREHOLDERS The Consolidated Statement of Changes in Equity is presented as a primary financial statement following the amendment to IAS 1 as described in Note 1. 6.1.1. 2013 Change in shareholders’ equity Group share for the first half of a) Share capital and capital in excess of nominal value During the first half of 2013, the following transactions had an impact on AXA’s share capital and capital in excess of nominal value: Share-based compensation for €+23 million. Increase in capital €+36 million; b) Treasury shares As of June 30, 2013, the Company and its subsidiaries owned approximately 4 million AXA shares, representing 0.2% of the share capital, a decrease of 12 million shares compared to December 31, 2012. As of June 30, 2013, the carrying value of treasury shares and related derivatives was €197 million. This figure included €0.8 million relating to AXA shares held by consolidated mutual funds (61,455 shares) not backing contracts where the financial risk is borne by policyholders. In addition, as of June 30, 2013, 1.6 million treasury shares backing contracts where the financial risk is borne by policyholders held in controlled investment funds were not deducted from shareholders’ equity. Their total estimated historical cost was €32 million and their market value €21 million at the end of June 2013. c) Undated subordinated debt and related financial expenses As described in Note 1.12.2 of the accounting principles, undated subordinated debts issued by the Group do not qualify as liabilities under IFRS. Undated subordinated debt instruments are classified in shareholders’ equity at their historical value as regards credit spread and interest rates and their closing value as regards exchange rates. The corresponding exchange differences are cancelled out through the translation reserve. During the first half of 2013, the change in other reserves was due to: €+634 million from the issuance of a new undated subordinated debt; €-381 million following the exercise of an early redemption call on an undated subordinated debt; €-144 million in interest expense related to the undated subordinated debt (net of tax); €-155 million in exchange rate differences. 126 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 As of June 30, 2013 and December 31, 2012, undated subordinated debt recognized in shareholders’ equity broke down as follows: (in Euro million) June 30, 2013 December 31, 2012 Value of the undated subordinated debt in currency of issuance Value of the undated subordinated debt in Euro million Value of the undated subordinated debt in currency of issuance Value of the undated subordinated debt in Euro million October 29, 2004 - 375 M € 6.0% 375 375 375 375 December 22, 2004 - 250 M € 6.0% 250 250 250 250 January 25, 2005 - 250 M € 6.0% 250 250 250 250 July 6, 2006 - 1000 M € 5.8% 1,000 994 1,000 994 July 6, 2006 - 500 M £ 6.7% 500 578 500 607 July 6, 2006 - 350 M £ 6.7% 350 408 350 429 October 26, 2006 - 600 M A$ (of which 300M A$ 7.5%) 600 420 600 469 November 7, 2006 - 150 M A$ 7.5% 150 105 150 118 December 14, 2006 - 750 M US$ 6.5% 750 571 750 566 December 14, 2006 - 750 M US$ 6.4% 750 571 750 566 October 5, 2007 - 750 M€ 6.2% 750 746 750 746 October 16, 2007 - 700 M £ 6.8% 700 814 700 855 January 22, 2013 - 850 M US$, 5.50% 850 644 Undated notes - variables rates in € 660 660 660 660 Undated notes - 3.3% in JPY 27,000 209 27,000 238 Undated notes (of which 500 M US$ at 7.1% as of December 31, 2012) in US$ 375 287 875 663 Sub-Total Undated Subordinated Debt 7,238 7,786 Equity component of convertible debt (2017) 95 95 95 95 TOTAL 7,333 7,880 In addition to the nominal amounts shown above, shareholders’ equity included net accumulated financial expenses of: €-2,269 million as of June 30, 2013; €-2,125 million as of December 31, 2012. Undated subordinated debt often contains the following features: Early redemption clauses (calls) at the Group’s option, giving AXA the ability to redeem the principal amount before settlement without penalty on certain dates, and Interest rate step-up clauses with effect from a given date. d) Dividends paid At the shareholders’ meeting held on April 30, 2013, shareholders approved a dividend distribution of €1,720 million with respect to the 2012 financial year. 6.1.2. 2012 Change in shareholders’ equity Group share for the first half of a) Share capital and capital in excess of nominal value During the first half of 2012, the following transactions had an impact on AXA’s share capital and capital in excess of nominal value: Share-based payment for €+16 million. b) Treasury shares As of June 30, 2012, the Company and its subsidiaries owned approximately 16 million AXA shares, representing 0.7% of the share capital, a decrease of 1 million shares compared to December 31, 2011. Half Year 2013 Financial Report 127 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 As of June 30, 2012, the carrying value of treasury shares and related derivatives was €368 million. This figure included €1.0 million relating to AXA shares held by consolidated mutual funds (81,965 shares) not backing contracts where financial risk is borne by policyholders. As of June 30, 2012, 2.0 million treasury shares backing contracts where financial risk is borne by policyholders held in controlled investment funds were not deducted from shareholders’ equity. Their total estimated historical cost was €43 million and their market value €21 million at the end of June 2012. c) Undated subordinated debt and related financial expenses During the first half of 2012, the change in other reserves was due to €-148 million in interest expense related to the undated subordinated debt (net of tax), and €+135 million in exchange rate differences. d) Dividends paid At the shareholders’ meeting held on April 25, 2012, shareholders approved a dividend distribution of €1,626 million with respect to the 2011 financial year. 6.2. COMPREHENSIVE INCOME FOR THE PERIOD The Statement of Comprehensive Income, presented as primary financial statements, includes net income for the period, the reserve relating to the change in fair value of available for sale financial instruments, the translation reserve, and actuarial gains and losses on employee benefit obligations. 6.2.1. Comprehensive income for the first half of 2013 a) Reserve related to changes in fair value of available for sale financial instruments included in shareholders’ equity The decrease of gross unrealized gains and losses on assets available for sale totaled to €-10,282 million, of which €- 10,222 million lower unrealized capital gains on debt securities which was mainly driven by interest rates increase. The following table shows the reconciliation between gross unrealized gains and losses on available for sale financial assets and the corresponding reserve recognized in shareholders’ equity: (in Euro million) June 30, 2013 December 31, 2012 Gross unrealized gains and losses (a) 27,290 37,572 Less unrealized gains and losses attributable to: Shadow accounting on policyholders' participation (14,162) (20,116) Shadow accounting on Deferred Acquisition Costs (b) (596) (801) Shadow accounting on Value of purchased Business In force (561) (651) Unallocated unrealized gains and losses before tax 11,970 16,004 Deferred tax (3,666) (4,831) Unrealized gains and losses (net of tax) - Assets available for sale 8,304 11,173 Unrealized gains and losses (net of tax) - Equity accounted companies (c) 49 4 UNREALIZED GAINS AND LOSSES (NET OF TAX) – 100% - TOTAL 8,353 11,177 Minority interests' share in unrealized gains and losses (d) (68) (78) Translation reserves (e) 29 (211) UNREALIZED GAINS AND LOSSES (NET GROUP SHARE) (c) 8,314 10,887 (a) Unrealized gains on total available for sale invested assets including loans. (b) Net of shadow accounting on unearned revenues and fees reserves. (c) Including unrealized gains and losses on assets from discontinued operations. (d) Including foreign exchange impact attributable to minority interests. (e) Group share. 128 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 As of June 30, 2013, most of the unrealized gains on assets available for sale related to the Life & Savings segment, leading to significant movements in shadow policyholders’ participation. In jurisdictions where participating business represents an important portion of contracts in force and where required minimum local policyholders’ share in the entities’ results (limited to investment or not) are significant, the reconciliation between gross unrealized gains and losses on available for sale financial assets and the corresponding net reserve recognized in shareholders’ equity were as follows as of June 30, 2013: (in Euro million) June 30, 2013 France Life & Savings Germany Life & Savings Switzerland Life & Savings Gross unrealized gains and losses (a) 8,472 4,190 2,108 Less unrealized gains and losses attributable to: Shadow accounting on policyholders' participation (6,065) (3,659) (1,731) Shadow accounting on Deferred Acquisition Costs (b) (113) (10) Shadow accounting on Value of purchased Business In force (53) Unallocated unrealized gains and losses before tax 2,294 530 314 Deferred tax (704) (170) (66) Unrealized gains and losses (net of tax) - Assets available for sale 1,590 361 248 Unrealized gains and losses (net of tax) - Equity accounted companies 19 UNREALIZED GAINS AND LOSSES (NET OF TAX) – 100% - TOTAL 1,609 361 248 Minority interests' share in unrealized gains and losses (c) (4) 0 Translation reserves (d) (165) UNREALIZED GAINS AND LOSSES (NET GROUP SHARE) 1,605 361 83 (a) Unrealized gains and losses on total available for sale invested assets including loans. (b) Net of shadow accounting on unearned revenues and fees reserves. (c) Including foreign exchange impact attributable to minority interests. (d) Group share. The change in reserves related to changes in fair value of available for sale financial instruments included in shareholders’ equity relating to changes in fair value of assets in June 30, 2013 and December 31, 2012 broke down as follows: (in Euro million) June 30, 2013 December 31, 2012 Unrealized gains and losses (net of tax) 100%, opening 11,177 5,218 Transfer in the income statement on the period (a) (513) (469) Investments bought in the current accounting period and changes in fair value (2,095) 6,659 Foreign exchange impact (238) (231) Change in scope and other changes 21 (1) Unrealized gains and losses (net of tax) 100%, closing 8,351 11,177 (a) Transfer induced by disposal of financial assets, impairment write-back following reevaluation, or transfer of expenses following impairment charge during the period, and debt instruments discount premium impacts. b) Translation reserve The total impact of foreign exchange rate movement was €-1,000 million (of which €-1,003 million from group share and €+3 million from minority interest rates) as of June 30, 2013. The group share translation reserves movement (€-1,003 million) was mainly driven by Japan (€-808 million), the United Kingdom (€-229 million) and Switzerland (€-172 million), partly offset by the Company (€+222 million) driven by change in fair value of derivatives and debts hedging net investments in foreign operations, and the United States (€+122 million). c) Employee benefits actuarial gains and losses The total impact of employee benefits actuarial gains for the first half year 2013 amounted to €+324 million net group share mostly due to the increase in discount rates. Half Year 2013 Financial Report 129 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 6.2.2. Comprehensive income for the first half of 2012 As described in Note 1.2.1, comprehensive income for the first half of 2012 was retrospectively restated for the amendments to IAS 19. a) Reserve related to changes in fair value of available for sale financial instruments included in shareholders’ equity The increase of gross unrealized gains and losses on assets available for sale totaled €+7,651 million, of which €+7,601 million higher unrealized capital gains on debt securities was mainly driven by interest rates and corporate spreads decrease. b) Translation reserve The total impact of foreign exchange rate movement was €+646 million (of which €+609 million from group share and €+37 million from minority interest rates) as of June 30, 2012. The group share translation reserves movement (€+609 million) was mainly driven by the United States (€+221 million), the United Kingdom (€+126 million), Switzerland (€+87 million), Mexico (€+67 million) and Hong Kong (€+54 million) partly offset by Japan (€-99 million) and the Company (€-89 million) driven by change in fair value of derivatives and debts hedging net investments in foreign operations. c) Employee benefits actuarial gains and losses The total impact of employee benefits actuarial gains and losses for the first half year 2012 amounted to €-889 million net group share mostly due to the drop in discount rates. 6.3. CHANGE IN MINORITY INTERESTS Under IFRS, minority interests in most investment funds in which the Group invests consist of instruments that holders can redeem at will at fair value, and qualify as a liability rather than shareholders’ equity items. The same is true for puttable instruments held by minority interest holders. 6.3.1. Change in minority interests for the first half of 2013 Minority interests decreased by €2 million to €2,353 million driven by: Movements in the comprehensive income for the period, mainly Net income attributable to minority interests for €154 million; Transaction with minority interests’ holders, mainly Dividend payout to minorities for €-158 million. 6.3.2. Change in minority interests for the first half of 2012 Minority interests increased by €112 million to €2,479 million driven by: Movements in the comprehensive income for the period, mainly: o Net income attributable to minority interests for €+101 million; o Change in translation reserves for €+37 million; o Reserves relating to changes in fair value through shareholders’ equity for €+23 million. Transaction with minority interests’ holders, mainly: o Dividend payout to minorities for €-72 million. 130 Half Year 2013 Financial Report CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Note 7 Financing debt (in Euro million) Carrying value June 30, 2013 December 31, 2012 AXA Debt component of subordinated notes, 2.5% due 2014 (€) Debt component of subordinated convertible notes, 3.75% due 2017 (€) Subordinated notes, 5.25% due 2040 (€) Subordinated notes, 5.125% due 2043 (€) U.S. registered redeemable subordinated debt, 8.60% 2030 (US$) U.S. registered redeemable subordinated debt, 7.125% 2020 (£) Derivatives relating to subordinated debts (a) AXA Financial Surplus notes, 7.70 %, due 2015 MONY Life 11.25% Surplus notes due 2024 AXA Bank Europe Subordinated debt maturity below 10 years fixed rate 7,582 2,082 1,515 1,300 1,000 916 379 389 154 154 - 328 106 6,682 2,043 1,482 1,300 - 907 398 553 153 152 1 347 126 Undated Subordinated debt fixed rate 221 221 AXA-MPS Vita and Danni 108 108 Subordinated notes, euribor 6 months + 81bp 108 108 Other subordinated debt (under €100 million) 26 26 Subordinated debt 8,197 7,317 AXA Euro Medium Term Notes, 6.0% due through 2013, and BMTN 1,000 - 1,841 841 Euro Medium Term Notes, due through 2015 1,000 1,000 AXA Financial 268 264 Senior notes, 7%, due 2028 268 264 AXA UK Holdings GRE: Loan Notes, 6.625%, due 2023 178 178 188 188 Other financing debt instruments issued (under €100 million) 183 221 Other financing debt instruments issued (under €100 million) 211 220 Derivatives relating to other financing debt instruments issued (a) (28) 1 Financing debt instruments issued 1,629 2,514 AXA 785 830 Other financing debt owed to credit institutions (under €100 million) 1 1 Financing debt owed to credit institutions 786 831 TOTAL FINANCING DEBT (b) 10,613 10,662 (a) Hedging instruments according to IAS 39 and economic hedge derivatives which are not qualified as hedge under IAS 39. (b) Excluding accrued interest on derivatives. Main movements on financing debt during the period were the following: The issuance of €1 billion subordinated debt due 2043 (5.125% annual coupon, fixed until the first call date in July 2023 and floating thereafter with a step up of 100 basis points), to anticipate the refinancing of part of subordinated debt instruments maturing on January 1, 2014. The repayment of €841 million Euro Medium Term Note maturing in 2013. Half Year 2013 Financial Report 131 II II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2013 Note 8 Net income per ordinary share The Group calculates a basic net income per ordinary share and a diluted net income per ordinary share: The calculation of the basic net income per ordinary share assumes no dilution and is based on the weighted average number of outstanding ordinary shares during the period. The calculation of diluted net income per ordinary share takes into account shares that may be issued as a result of stock option plans. The effect of stock option plans on the number of fully diluted shares is taken into account only if options are considered to be exercisable on the basis of the average stock price of the AXA share over the period. (in Euro million) (a) June 30, 2013 June 30, 2012 Restated (b) Net income Group share 2,467 2,544 Undated subordinated debt financial charge (144) (148) Net income including impact of undated subordinated debt A 2,323 2,396 Weighted average number of ordinary shares (net of treasury shares) - opening 2,372 2,340 Increase in capital (excluding stock options exercised) (c) 0 0 Stock options exercised (c) 2 0 Treasury shares (c) 6 0 Share purchase program (c) Weighted average number of ordinary shares B 2,381 2,340 BASIC NET INCOME PER ORDINARY SHARE C = A / B 0.98 1.02 Potentially dilutive instruments : Stock options 2 1 Other 6 2 Fully diluted - weighted average number of shares (d) D 2,388 2,343 FULLY DILUTED NET INCOME PER ORDINARY SHARE E = A / D 0.97 1.02 (a) Except for number of shares (million of units) and earnings per share (Euro). (b) As described in Note 1.2.1, comparative information related to previous periods was retrospectively restated for the amendments to IAS 19. (c) Weighted average. (d) Taking into account the impact of potentially dilutive instruments. As of June 30, 2013, net income per ordinary share stood at €0.98 on a basic calculation, and at €0.97 on a fully diluted basis. As of June 30, 2012, net income per ordinary share stood at €1.02 on a basic calculation, as well as on a fully diluted basis. Before the restatement required by the amendments to IAS 19, Half-Year 2012 net income per ordinary share stood at €1.04 on a basic calculation as well as on a fully diluted basis. 132 Half Year 2013 Financial Report STATUTORY AUDITORS’ REVIEW III Statutory auditors’ review report on the 2013 Half Year Financial Information Half year 2013 Financial Report 133 III III STATUTORY AUDITORS’ REVIEW PricewaterhouseCoopers Audit 63, rue de Villiers 92208 Neuilly-sur-Seine Cedex Mazars 61, rue Henri Régnault 92075 Paris La Défense Cedex STATUTORY AUDITORS’ REVIEW REPORT ON THE 2013 HALF-YEAR FINANCIAL INFORMATION This is a free translation into English of the Statutory Auditors’ review report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France. To the Shareholders AXA S.A. 25 avenue Matignon 75008 Paris In compliance with the assignment entrusted to us by your General Meeting and in accordance with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code (Code monétaire et financier), we hereby report to you on: - the review of the accompanying condensed half-year consolidated financial statements of AXA SA, for the six months ended June 30, 2013 ; the verification of the information contained in the half-year management report. 1. Conclusion on the financial statements We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, 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 professional standards applicable in France 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. Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-year consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 - the standard of IFRSs as adopted by the European Union applicable to interim financial information. 2. Specific verification We have also verified the information given in the half-year management report on the condensed half-year consolidated financial statements subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-year consolidated financial statements Neuilly sur Seine and Courbevoie, August 2, 2013 The Statutory Auditors French original signed by PricewaterhouseCoopers Audit Mazars Michel Laforce Pierre Coll Philippe Castagnac Gilles Magnan Half year 2013 Financial Report 134 STATEMENT OF THE PERSON RESPONSIBLE FOR THE HALF YEAR FINANCIAL REPORT IV Statement of the person responsible for the Half Year Financial Report Half Year 2013 Financial Report 135 IV IV STATEMENT OF THE PERSON RESPONSIBLE FOR THE HALF YEAR REPORT Statement of the person responsible for the Half Year Financial Report I, the undersigned, hereby certify that, to the best of my knowledge, the consolidated summarized financial statements for the first half of the fiscal year 2013 have been drawn up in accordance with applicable accounting standards and give an accurate view of the assets and liabilities, the financial position and the profit or loss of the Company and of all businesses and firms included within the scope of the consolidated Group and that the half year activity report, to be found in the first part of this Report, accurately reflects the significant events which occurred during the first six months of the fiscal year as well as their impact on the financial statements, the main related-parties transactions and the principal risks and uncertainties for the remaining six months of the fiscal year. Paris, August 5, 2013. Henri de Castries Chairman & Chief Executive Officer Person responsible for financial information Denis Duverne Deputy Chief Executive Officer, in charge of Finance, Strategy and Operations Half Year 2013 Financial Report 136"},"Input":{"kind":"string","value":"Semestriel, 2013, Insurance, AXA"},"Query":{"kind":"string","value":"write me a financial report"}}},{"rowIdx":299,"cells":{"Period":{"kind":"string","value":"Semestriel"},"Year":{"kind":"number","value":2014,"string":"2,014"},"Subject":{"kind":"string","value":"Insurance"},"Company":{"kind":"string","value":"AXA"},"Prompt":{"kind":"string","value":"Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.\n\n### Instruction:\nWrite a detailed financial report on the given subject and company.\n\n### Subject:\nInsurance\n\n### Company:\nAXA\n\n### Response:\n"},"Response":{"kind":"string","value":"Half Year Financial Report June 30, 2014 Table of contents I Activity Report ............................................................. II Consolidated financial statements ............................ III Statutory auditors’ review report on the 2014 Half- Year Financial Information ............................................ IV Statement of the person responsible for the Half- Year Financial Report .................................................... ACTIVITY REPORT I Activity Report / Half-Year 2014 Half Year 2014 Financial Report 1 I ACTIVITY REPORT CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS This report includes certain terms that are used by AXA in analyzing its business operations and, therefore, may not be comparable with terms used by other companies; these terms are defined in the glossary provided at the end of this document. Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Please refer to AXA’s Registration Document for the year ended December 31, 2013, for a description of certain important factors, risks and uncertainties that may affect AXA’s business. AXA undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise. Half Year 2014 Financial Report 2 I ACTIVITY REPORT FINANCIAL MARKET CONDITIONS IN THE FIRST HALF OF 2014 The first half of 2014 has been largely defined by central bank monetary policy, particularly in the US, UK and Europe, as well as the geopolitical risk in Russia, Ukraine and Iraq. Global stock markets rose to deliver +4.3% over the period (MSCI World Index) although in some areas returns were weaker than anticipated. Emerging markets experienced a weak start as growth in China slowed and several emerging economies were impacted as the US started to taper quantitative easing. This has seen fixed income markets rise and remain strong throughout the first half of the year, much in contrast to the bond sell-off that characterised the final months of 2013. As government bonds have rallied, their yields have fallen significantly causing investors to look to credit and high yield assets in search of yield. The US Federal Reserve maintained consistent monetary policy by steadily tapering quantitative easing and keeping the base rate at 0.25% throughout the period. The US, however, was hit by extremely harsh winter conditions that were largely cited as the cause of the softer economic data readings that emerged during the first half of the year. New Fed Chair Yellen caused some market fluctuations when she implied that interest rates might rise sooner than expected, but her long-term message was ultimately dovish. Recovery in Europe, although apparent, has been sluggish, with weak Eurozone GDP figures. The biggest threat, however, was the worryingly low levels of inflation. The European Central Bank took drastic actions to avoid potential deflation by introducing a number of measures, the most significant of which were cutting both the base and deposit rates to 0.15% and -0.10% respectively, and introducing a “targeted” long-term refinancing operation in order to stimulate growth and bank lending. Emerging markets struggled towards the start of the period as China released disappointing economic news and the US started tapering quantitative easing. Russia suffered on the back of its issues with Ukraine: its credit rating was downgraded and its growth forecast cut by Standard & Poor’s and the IMF respectively. However, India saw an exceptionally strong rebound in industrial production and Colombia and Mexico benefitted from improving economic data. Several regions struggled with inflation over the period, such as Brazil and Turkey. The Bank of Japan (BoJ) opted to continue its monetary easing policy as the economy showed distinct signs of recovery, inflation data being particularly encouraging. By period-end inflation had shown its fastest increase in 32 years. Stock Markets Equity markets had mixed performance in first half of 2014 across the globe with modest gains in US and European markets and decline in major Asian markets. The MSCI World Index increased by 4.3%. The Dow Jones Industrial Average Index in New York increased by 1.5% and the S&P 500 index increased by 6.1% in first half of 2014. The FTSE 100 Index in London decreased by 0.1% in first half of 2014. The CAC 40 index in Paris increased by 3.0% and the Nikkei index in Tokyo decreased by 6.9%. The MSCI G7 Index increased by 4.2% and the MSCI Emerging Index increased by 3.3%. The S&P 500 implied volatility Index decreased from 13.7% to 11.6% between December 31, 2013 and June 30, 2014. The S&P 500 realized volatility index increased from 10.3% to 11.3% between December 31, 2013 and June 30, 2014. Bond Markets The US 10-year T-bond ended the first half of 2014 at 2.53%, a decrease of 51 bps compared to December 31, 2013. The 10-year German Bund yield decreased by 68 bps to 1.25%. The France 10-year government bond yield decreased by 85 bps to 1.71%. The 10-year Japanese government bond ended the first half at 0.57%, a decrease of 18 bps compared to December 31, 2013. The 10-year Belgium government bond ended the first half at 1.70% (86 bps decrease compared to December 31, 2013). The 10-year government bonds in Eurozone peripheral countries decreased sharply: Italy ended the first half at 2.85% (a decrease of 128 bps compared to December 31, 2013), Spain ended the first half at 2.67% (a decrease of 149 bps compared to December 31, 2013), Greece ended the first half at 5.96% (a decrease of 246 bps compared to December 31, 2013), Ireland ended the first half at 2.36% (a decrease of 111 bps compared to December 31, 2013), Portugal ended the first half at 3.65% (a decrease of 248 bps compared to December 31, 2013). Half Year 2014 Financial Report 3 I ACTIVITY REPORT In Europe, the iTRAXX Main spreads decreased by 8 bps to 62 bps compared to December 31, 2013 while the iTRAXX Crossover decreased by 45 bps to 242 bps. In the United States, the CDX Main spread Index decreased by 4 bps to 59 bps. Exchange rates In this context, exchange rates were relatively stable during 1H 2014, but the Euro appreciated against main currencies compared to 1H 2013, as shown below: End of Period Exchange Rate Average Exchange Rate June 30, 2014 December 31, 2013 June 30, 2014 June 30, 2013 (for €1) (for €1) (for €1) (for €1) U.S. Dollar 1.37 1.38 1.37 1.31 Japanese Yen (x100) (a) 1.39 1.45 1.40 1.13 British Sterling Pound 0.80 0.83 0.82 0.85 Swiss Franc 1.21 1.23 1.22 1.23 (a) Yen average exchange rate for the six months ending March 31, 2013 used for half year 2013 accounts profit or loss. OPERATING HIGHLIGHTS Significant acquisitions AXA COMPLETED THE ACQUISITION OF 50% OF TIAN PING On April 24, 2013, AXA announced it had entered into an agreement with Tian Ping Auto Insurance Company Limited (\"Tian Ping\") shareholders to acquire 50% of the company. Tian Ping is mainly focusing on motor insurance and has Property & Casualty licenses covering most Chinese provinces as well as a direct distribution license covering these provinces with a market share of 0.8%(1). On February 20, 2014, AXA announced the finalization of the acquisition. AXA has acquired 33% of the company from Tian Ping's current shareholders for RMB 1.9 billion (or Euro 240 million(2)) and subsequently subscribed to a capital increase for RMB 2.0 billion (or Euro 251 million(2)) to support future growth, raising its stake to 50%. AXA and Tian Ping's current shareholders jointly control Tian Ping. AXA’s previously existing Chinese P&C operations have been integrated within the new joint venture. AXA becomes the largest foreign Property & Casualty insurer in China and consolidates its position as the largest international P&C insurer in Asia (excluding Japan). The acquired operations are consolidated through the equity method since February 20, 2014. AXA COMPLETED THE ACQUISITION OF 51% OF COLPATRIA'S INSURANCE OPERATIONS IN COLOMBIA On November 11, 2013, AXA announced it had entered into an agreement with Grupo Mercantil Colpatria to acquire a 51% stake in its composite insurance operations in Colombia (“Colpatria Seguros”)(3). On April 2, 2014, AXA announced it had completed the acquisition for a total consideration of COP 672 billion (or Euro 248 million(4)). The acquired operations are integrated within the Mediterranean & Latin American Region and fully consolidated since April 2, 2014. (1) Source: CIRC, December 2013. (2) 1 EUR = RMB 7.982 as of February 19, 2014. (3) The scope of the transaction includes the four insurance companies of Grupo Mercantil Colpatria: Seguros Colpatria S.A. (Property & Casualty), Seguros de Vida Colpatria S.A. (Life, Workers Compensation), Capitalizadora Colpatria S.A. (Capitalization) and Colpatria Medicina Prepagada S.A. (Voluntary Health). (4) EUR 1 = COP 2,711.67 as of March 31, 2014. Half Year 2014 Financial Report 4 I ACTIVITY REPORT Colpatria Seguros is the #4(1) insurance player in Colombia (7% market share), with operations in both Property & Casualty and Life & Savings. It enjoys strong positions in Property & Casualty (#2 with 9% market share), Workers Compensation (#4 with 14% market share) and Capitalization (#2 with 42% market share). The transaction allows AXA to enter the attractive Colombian market and benefit from its strong growth prospects through developed and profitable operations with a well-established local partner. AXA Colpatria Seguros will benefit from AXA’s strong know-how to accelerate further its development and leverage its competitive advantages in the Colombian market. Significant disposals AXA COMPLETED THE SALE OF ITS HUNGARIAN LIFE & SAVINGS INSURANCE OPERATIONS On June 3, 2014, AXA announced it had completed the sale of its Life & Savings operations in Hungary(2) to Vienna Insurance Group. AXA continues to have banking operations in the country. This transaction triggered an exceptional capital loss, which was accounted for in Net Income in 2013. Other PLACEMENT OF GBP 750 MILLION SUBORDINATED NOTES On January 9, 2014, AXA announced the successful placement of GBP 750 million of Reg S subordinated notes due 2054 to institutional investors. The initial coupon has been set at 5.625% per annum. It will be fixed until the first call date in January 2034 and floating thereafter with a step up of 100 basis points. The initial spread over Gilt was 215 basis points. The notes are treated as capital from a regulatory and rating agencies’ perspective within applicable limits. The transaction has been structured to comply with the expected eligibility criteria for Tier 2 capital treatment under Solvency II. PLACEMENT OF EUR 1 BILLION UNDATED SUBORDINATED NOTES On May 16, 2014, AXA announced the successful placement of EUR 1 billion of Reg S undated subordinated notes to institutional investors. The initial spread over swap is 225 basis points. The initial coupon has been set at 3.875% per annum. It will be fixed until the first call date in October 2025 and reset thereafter every 11 years with a 100 basis points step-up. The notes are treated as capital from a regulatory and rating agencies' perspective within applicable limits. The transaction has been structured to comply with the eligibility criteria for the 50% perpetual subordinated debt limit under Solvency 1 and in order to be eligible as capital under Solvency II. AXA Rating On March 11, 2014, Fitch reaffirmed all AXA entities' Insurer Financial Strength ratings at ‘AA-’. Outlook was revised to Stable from Negative. On May 9, 2014, Moody’s Investors Services reaffirmed the ‘Aa3’ insurance financial strength ratings of AXA’s main operating subsidiaries. The rating agency has also changed the outlook from negative to stable on all ratings. On May 26, 2014, S&P reaffirmed long-term ratings on AXA Group core subsidiaries at ‘A+’ with a stable outlook. Related-party transactions During the first half of the fiscal year 2014, there were (1) no modifications to the related-party transactions described in Note 28 \"Related-party transactions\" of the audited consolidated financial statements for the fiscal year ended December 31, 2013 included in the full year 2013 Registration Document (pages 320 and 321) filed with the Autorité des marchés financiers and available on its website (www.amf-france.org) as well (1) Based on information furnished by Colpatria and on Superintendencia Financiera de Colombia publicly available information. (2) AXA Insurance Company and AXA Money & More. Half Year 2014 Financial Report 5 I ACTIVITY REPORT as on the Company's website (www.axa.com), which significantly influenced the financial position or the results of the Company during the first six months of the fiscal year 2014, and (2) no new transaction concluded between AXA SA and related parties that significantly influenced the financial position or the results of the Company during the first six months of 2014. Risk factors The principal risks and uncertainties faced by the Group are described in detail in Section 3.1 “Regulation” and Section 3.2 \"Risk factors\" included in the full year 2013 Registration Document (respectively in pages 152 to 154 and pages 155 to 167) filed with the Autorité des marchés financiers and available on its website (www.amf-france.org) as well as on the Company's website (www.axa.com). The description contained in these Sections of the 2013 Registration Document remains valid in all material respects at the date of the publication of this Report regarding the appreciation of the major risks and uncertainties affecting the Group on June 30, 2014 or which management expects could affect the Group during the remainder of 2014. EVENTS SUBSEQUENT TO JUNE 30, 2014 There has been no event subsequent to June 30, 2014. Half Year 2014 Financial Report 6 I ACTIVITY REPORT REVENUES & EARNINGS SUMMARY The application of IFRS 10 and 11 has become effective since January 1, 2014, and the comparative information in respect of 2013 has been restated (referred as “restated” in the tables of this document) to reflect the retrospective application of the new standards which in particular led to the change in consolidation method of a Property and Casualty company (Natio Assurances reported within the Direct segment) from proportionate consolidation to equity method. This change in consolidation method has no impact on the profit or loss for the current year or prior year. Consolidated gross revenues Consolidated Gross Revenues (in Euro million) June 30, 2014 June 30, 2013 published June 30, 2013 restated (a) December 31, 2013 published December 31, 2013 restated (a) June 30, 2014 / June 30, 2013 restated (b) Life & Savings 29,039 29,603 29,603 55,331 55,331 1.8% o/w. gross written premiums o/w. fees and revenues from investment contracts with no participating feature Property & Casualty 28,300 159 16,820 28,909 133 16,497 28,909 133 16,483 53,861 323 28,791 53,861 323 28,763 2.2% International Insurance 1,966 1,909 1,909 3,143 3,143 4.5% Asset Management 1,593 1,741 1,741 3,461 3,461 4.1% Banking (c) 287 293 293 524 524 3.3% Holdings and other companies (d) 0 0 0 0 0 n/a TOTAL 49,705 50,044 50,030 91,249 91,221 2.1% Revenues are disclosed net of intercompany eliminations. (a) Restated means comparative information related to previous periods was retrospectively restated for the application of IFRS10 and 11. (b) Changes are on a comparable basis. (c) Excluding (i) net realized capital gains or losses and (ii) change in fair value of assets under fair value and of options and derivatives, net banking revenues and total consolidated revenues would respectively amount to €286 million and €49,703 million for half year 2014 and €291 million and €50,028 million for half year 2013. (d) Includes notably CDOs and real estate companies. Consolidated gross revenues for half year 2014 reached €49,705 million, up 2.1% compared to half year 2013 on a comparable basis. The comparable basis mainly consisted in the adjustment of: (i) the foreign exchange rate movements (€-1.0 billion or -1.9 points), mainly Euro appreciation against JPY and USD, (ii) the alignment of closing dates in Japan(1) (€-0.2 billion or -0.4 point), (iii) the closed MONY portfolio transaction in 2013 (€-0.1 billion or -0.3 point), (iv) the disposal of AXA Private Equity (€-0.1 billion or -0.3 point), (v) the acquisition of Colpatria's insurance operations in Colombia in 2014 (€+0.2 billion or +0.4 point) and (vi) the restatement of the retrospective application of IFRS 10 and 11 as mentioned above. (1) AXA Life Japan aligned its closing date with the Group calendar year starting with 2013 annual accounts. In the comparable basis, half year 2013 contribution was restated to cover January 1, 2013 to June 30, 2013 period. Half Year 2014 Financial Report 7 I ACTIVITY REPORT Life & Savings Annual Premium Equivalent (1) Annual Premium Equivalent (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 June 30, 2014 / June 30, 2013 (a) TOTAL 3,181 3,310 6,335 0.2% France 765 690 1,431 10.6% United States 634 655 1,322 1.2% United Kingdom 369 365 647 2.3% Japan 175 240 504 1.1% Germany 176 218 385 19.2% Switzerland 222 310 430 28.9% Belgium 72 94 151 23.5% Central & Eastern Europe 41 55 108 20.0% Mediterranean and Latin American Region 271 227 443 20.7% Hong Kong 226 215 443 9.3% South-East Asia, India and China 225 237 463 13.7% Mature markets 2,668 2,773 5,265 1.1% High growth markets 513 537 1,070 6.9% (a) Changes are on a comparable basis. Total Life & Savings New Business APE amounted to €3,181 million, down 3.9% on a reported basis or up 0.2% on a comparable basis. The increase in sales of G/A Savings and Unit-Linked products was offset by lower sales of G/A Protection & Health explained by the repositioning of the Group Life product mix in Switzerland and the non-repeat of 1Q13 strong Health sales recorded in Germany. High growth markets APE increased by 7% as strong growth in South-East Asia, India & China (+14% or €+31 million) and Hong Kong (+9% or €+20 million) was partly offset by a slowdown in Central & Eastern Europe (-20% or €-10 million). Protection & Health APE (38% of total) was down 4%, driven by (i) Switzerland, following the repositioning of the Group Life product mix towards more profitable semi-autonomous schemes (pure mortality and disability insurance contracts generating relatively lower APE but higher margins) and voluntary reduction in sales of full protection schemes, which have a capital intensive general account savings component, by (ii) Germany mainly in Health due to the non-repeat of 1Q13 strong sales resulting from the anticipation of a change in regulation and by (iii) the US mainly due to increased competition in Indexed Universal Life. This was partly offset by increased volumes in South-East Asia, India & China, France and Hong Kong. Unit-Linked APE (35% of total) was up 2% mainly driven by (i) the US primarily reflecting the continued success of the floating roll up rate GMxB product, and (ii) Germany and Italy mainly following the successful launch of new hybrid(2) products. This increase was partly offset by Belgium; General Account Savings APE (15% of total) was up 9% mainly driven by higher sales of hybrid products notably in France and Italy, partly offset by Germany mainly due to a voluntary shift in business mix towards Unit-Linked products. (1) Annual Premium Equivalent (APE) represents 100% of new regular premiums plus 10% of single premium, in line with EEV methodology. APE is Group share. (2) Hybrid products: savings products allowing clients to invest in both Unit-Linked and General Account funds. Half Year 2014 Financial Report 8 I ACTIVITY REPORT Property & Casualty Revenues Property & Casualty Revenues (in Euro million) June 30, 2014 June 30, 2013 published June 30, 2013 restated (a) December 31, 2013 published December 31, 2013 restated (a) June 30, 2014 / June 30, 2013 restated (b) TOTAL . Mature markets Direct High growth markets 16,820 13,349 1,202 2,269 16,497 13,073 1,152 2,272 16,483 13,073 1,138 2,272 28,791 21,996 2,274 4,520 28,763 21,996 2,247 4,520 2.2% 1.2% 7.0% 4.8% (a) Restated means comparative information related to previous periods was retrospectively restated for the application of IFRS10 and 11. (b) Changes are on a comparable basis. Property & Casualty gross revenues were up 2% on a reported basis, and on a comparable basis to €16,820 million. Personal lines increased by 1% mainly driven by France, Direct and Switzerland. Commercial lines increased by 3%, primarily in the Mediterranean and Latin American high growth markets, the United Kingdom & Ireland, France and Asia. Overall, average tariff increases amounted to 2%. Personal lines (57% of P&C gross revenues) were up by 1% on a comparable basis. Motor revenues grew by €61 million or +1% as a result of tariff increases in mature markets and higher volumes in Direct business and Asia, partly offset by lower average premiums with: Direct (+7%) driven by improved retention in the United Kingdom and South Korea, new business growth in France and Japan, partly offset by slowdown in Spain in a difficult market environment; France (+3%) driven by both tariff increases and higher volumes; Switzerland (+2%) driven by higher volumes; Asia (+7%) due to a strong increase in car sales in Malaysia; partly offset by Mediterranean and Latin American Region (-5%), primarily driven by Turkey (-14%) due to increased competition combined with a decrease in private car sales and by Italy (-5%) reflecting tariff decreases and a lower average premium. Non-Motor revenues increased by €58 million or +2% mainly driven by tariff increases across the board and higher volumes, partly offset by lower average premiums with: France (+3%) mainly driven by tariff increases in Household; Switzerland (+5%) reflecting tariff increases in Property and Liability; Direct (+9%) mainly attributable to Household in France and Accident and Health in South Korea; partly offset by the United Kingdom & Ireland (-5%) mainly due to the exit from unprofitable schemes and partnerships in the second half of 2013. Commercial lines (43% of P&C gross revenues) increased by 3% on a comparable basis mainly driven by tariff increases across the board as well as volume increases in high growth markets. Motor revenues increased by €33 million or +2%, mainly driven by: The United Kingdom & Ireland (+11%) principally due to increased new business volumes; France (+6%) mainly due to tariff increases; partly offset by Germany (-6%) reflecting stricter underwriting and pruning measures. Non-Motor revenues increased by €207 million or +4% mainly driven by: Mediterranean and Latin American Region (+8%) mainly driven by positive portfolio developments in Health in the Gulf Region and in Property in Turkey; France (+5%) following tariff increases in Property and positive developments in Creditor business; The United Kingdom & Ireland (+4%) as a result of new business increase in Property. Half Year 2014 Financial Report 9 I ACTIVITY REPORT International Insurance revenues International insurance revenues were up 5% on comparable basis to €1,966 million, mainly driven by (i) AXA Assistance up 7% to €558 million driven by higher volumes and (ii) AXA Corporate Solution Assurance up 3% to €1,379 million mainly as a consequence of positive portfolio developments and tariff increases in Construction, Marine and Property, partly offset by Aviation and Liability in a soft market environment. Asset management revenues and Assets under Management Asset Management revenues decreased by 9% on reported basis, or increased by 4% on a comparable basis, to €1,593 million mainly driven by higher management fees at both AllianceBernstein and AXA IM as a result of higher average Assets Under Management (AUM). AllianceBernstein revenues were up 3% (or €+28 million) on a comparable basis to €1,029 million mainly driven by higher management fees (€+22 million) resulting from higher average AUM (+4%), as well as higher performance fees (€+10 million). AUM increased by 7% or €25 billion from year-end 2013 to €371 billion mainly driven by (i) €+18 billion from market appreciation primarily on Fixed Income assets, (ii) €+3 billion net inflows, (iii) €+2 billion favorable foreign exchange rate impact and (iv) €+2 billion change in scope related to the acquisition of a Danish global equity asset management firm (CPH Capital). AXA Investment Managers revenues decreased by 15% (or €-121 million) on a reported basis to €707 million. Excluding distribution fees (retroceded to distributors) and on a comparable basis, net revenues increased by 5% (or €+27 million) mainly driven by higher management fees (€+26 million) resulting from higher average AUM (+3%). AUM increased by 6% or €35 billion from year-end 2013 to €582 billion mainly driven by (i) €+21 billion from market appreciation mainly on AXA’s insurance companies assets as a result of the decrease in interest rates and rising stock markets since end of 2013, (ii) €+11 billion net inflows and (iii) €+5 billion favorable foreign exchange rate impact. Net banking revenues Net banking revenues decreased by 2% on a reported basis or by 3% on a comparable basis to €274 million. Operating net banking(1) revenues were stable. (1) Before intercompany eliminations and before realized capital gains/losses or changes in fair value of fair value option assets and of hedging instruments. Half Year 2014 Financial Report 10 I ACTIVITY REPORT Consolidated Underlying Earnings, Adjusted Earnings And Net Income The application of IFRS 10 and 11 has become effective since January 1, 2014, and the comparative information in respect of 2013 has been restated (referred as “restated” in the tables of this document) to reflect the retrospective application of the new standards which in particular led to the change in consolidation method of a Property and Casualty company (Natio Assurances reported within the Direct segment) from proportionate consolidation to equity method. This change in consolidation method has no impact on the profit or loss for the current year or prior year. (in Euro million) June 30, 2014 June 30, 2013 published June 30, 2013 restated (a) December 31, 2013 published December 31, 2013 restated (a) Gross written premiums 46,944 47,168 47,154 85,509 85,481 Fees and revenues from investment contracts without participating feature 159 133 133 323 323 Revenues from insurance activities 47,103 47,301 47,287 85,832 85,804 Net revenues from banking activities 244 283 283 517 517 Revenues from other activities 2,316 2,451 2,451 4,900 4,900 TOTAL REVENUES 49,663 50,036 50,022 91,248 91,220 Change in unearned premium reserves net of unearned revenues and fees (4,266) (3,816) (3,816) (296) (298) Net investment result excluding financing expenses (b) 14,066 13,330 13,328 33,254 33,249 Technical charges relating to insurance activities (b) (45,895) (45,154) (45,148) (96,098) (96,087) Net result of reinsurance ceded (363) (938) (935) (1,209) (1,205) Bank operating expenses (37) (44) (44) (80) (80) Insurance acquisition expenses (4,607) (4,738) (4,736) (9,902) (9,899) Amortization of value of purchased life business in force (57) (50) (50) (167) (167) Administrative expenses (4,428) (4,491) (4,489) (9,231) (9,227) Valuation allowances on tangible assets (0) (0) Change in value of goodwill (1) (0) (0) (0) (0) Other (75) (136) (136) (240) (240) Other operating income and expenses (55,463) (55,551) (55,539) (116,928) (116,906) OPERATING EARNINGS BEFORE TAX 4,001 3,999 3,994 7,277 7,265 Net income from investments in affiliates and associates 91 53 56 119 127 Financing expenses (266) (333) (333) (601) (601) UNDERLYING EARNINGS BEFORE TAX 3,826 3,719 3,718 6,794 6,790 Income tax expenses (900) (990) (989) (1,761) (1,757) Minority interests (148) (150) (150) (305) (305) UNDERLYING EARNINGS 2,777 2,579 2,579 4,728 4,728 Net realized capital gains or losses attributable to shareholders 335 375 375 434 434 ADJUSTED EARNINGS 3,112 2,954 2,954 5,162 5,162 Profit or loss on financial assets (under fair value option) & derivatives 37 (228) (228) (317) (317) Exceptional operations (including discontinued operations) (45) (86) (86) 38 38 Goodwill and other related intangible impacts (55) (54) (54) (138) (138) Integration and restructuring costs (41) (118) (118) (263) (263) NET INCOME 3,008 2,467 2,467 4,482 4,482 (a) Restated means comparative information related to previous periods was retrospectively restated for the application of IFRS10 and 11. (b) For the periods ended June 30, 2014 and June 30, 2013, \"the change in fair value of assets backing contracts with financial risk borne by policyholders\" impacted the net investment result for respectivly €+5,613 million and €+8,070 million, and benefits and claims by the offsetting amounts respectively. Half Year 2014 Financial Report 11 I ACTIVITY REPORT Group underlying earnings Underlying earnings (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Life & Savings 1,651 1,534 2,793 Property & Casualty 1,226 1,128 2,105 International Insurance 135 103 202 Asset Management 184 194 400 Banking 68 61 78 Holdings and other companies (a) (486) (441) (851) UNDERLYING EARNINGS 2,777 2,579 4,728 (a) Includes notably CDOs and real estate companies. Group underlying earnings amounted to €2,777 million, up 8% versus half year 2013. On a constant exchange rate basis, underlying earnings increased by 11% driven by growth in most business segments. Life & Savings underlying earnings amounted to €1,651 million. On a constant exchange rate basis, Life & Savings underlying earnings increased by €198 million (+13%). On a comparable scope basis, mainly restated for the closed MONY portfolio transaction, Life & Savings underlying earnings were up €228 million (+15%) mainly attributable to the United States (€+170 million), France (€+44 million), the United Kingdom (€+22 million) and South-East Asia, India and China (€+17 million), partly offset by Japan (€-48 million) mainly resulting from: Higher investment margin (€+22 million or +2%) mainly attributable to (i) France (€+21 million) and (ii) Germany (€+16 million) both mainly reflecting lower crediting rates and (iii) the United States (€+15 million) driven by higher equity returns, partly offset by (iii) Japan (€-37 million) mainly due to the non-repeat of 2013 high dividends from equity and private equity funds following Japanese stock market rally. Higher Fees and Revenues (€+60 million or +2%): o Unit-Linked management fees were up €90 million mainly driven by (i) the United States (€+63 million) and (ii) France (€+17 million) as a consequence of higher average Separate Account balances following 2013 equity market rally; o Loadings on premiums and mutual funds were down €41 million mainly driven by lower Unearned Revenues Reserves amortization in the US (€-101 million) and France (€-64 million) due to assumptions and model updates. Excluding those impacts (largely offset in DAC), loadings on premiums and mutual funds were up €124 million driven by (i) Mediterranean and Latin American Region (€+49 million) mainly from increased surrenders at AXA MPS, (ii) Japan (€+40 million) due to higher loadings reflecting a better business mix and increased retention and (iii) Hong Kong (€+15 million) due to higher loadings on premiums stemming from new business and in-force growth; o Other revenues were up €11 million mainly driven by higher mutual funds product fees in the United States. Higher net technical margin (€+86 million or +23%) mainly attributable to (i) France (€+100 million) driven by a more favorable current year claims experience mainly in Group and Individual Protection business, and by higher positive prior year reserve developments in Retirement business, (ii) Germany (€+13 million) mainly driven by a higher mortality margins in all business lines, partly offset by the United States (€-23 million) primarily from lower life mortality margins, partly offset by an improvement in GMxB margin. Lower expenses (€+53 million or -2%) as a result of: o €+98 million lower acquisition expenses primarily driven by €+122 million lower DAC amortization mainly in the US (€+104 million) and France (€+72 million) due to assumptions and model updates, partly offset by Mediterranean and Latin American Region (€-26 million) reflecting increased surrenders. Excluding DAC amortization (largely offset in Unearned Revenues Reserves), acquisition expenses increased by €24 million mainly driven by higher commissions in line with activity growth mainly in Group Protection & Health business in France and Hong Kong; €-46 million higher administrative expenses as inflation, one-offs and business growth effects were partly offset by ongoing cost management efforts. o Half Year 2014 Financial Report 12 I ACTIVITY REPORT Higher tax expenses and minority interests (€-8 million or +2%) driven by higher pre-tax underlying earnings, partly offset by more favorable tax one-offs (€+121 million in the US in 1H 2014 vs. €+41 million in Japan and Hong Kong in 1H 2013). Property & Casualty underlying earnings amounted to €1,226 million. On a constant exchange rate basis, Property & Casualty underlying earnings increased by €105 million (+9%) mainly attributable to Germany (€+50 million), Switzerland (€+37 million), the Mediterranean and Latin American Region (€+18 million), and Direct (€+12 million), partly offset by France (€-20 million) mainly resulting from: Lower net technical result (€-5 million or -1%) driven by: o Current year loss ratio improving by 0.1 point as a result of tariff increases and lower claims frequency, partly offset by higher severity and higher Nat Cat charges (+1.0 point to 1.7%) that amounted to €245 million largely as a result of ELA hailstorm (€241 million at Group level or +1.7 points) mainly impacting France, Belgium and Germany while Half Year 2013 was mainly impacted by floods in Bavaria and Saxony (€73 million charge at Group level); o Lower positive prior year reserve developments by 0.6 point to -1.3 points (compared to 1.8 points in 1H 2013); o Lower expense ratio improving by 0.4 point to 25.9% with (i) 0.3 point reduction in the acquisition ratio driven by both productivity gains and decrease in commission ratio and (ii) 0.1 point decrease in the administrative expenses ratio benefitting from various efficiency programs net of inflation; o As a result, the combined ratio deteriorated by 0.2 point to 95.8% while current year combined ratio improved by 0.4 point to 97.1%. Higher investment result (€+125 million or +12%) mainly driven by (i) France (€+64 million) driven by higher exceptional distributions from mutual funds and (ii) the Mediterranean and Latin American Region (€+46 million) mainly in Turkey reflecting higher interest rates and increased average asset base. Higher tax expenses and minority interests (€-38 million or +8%) driven by higher pre-tax underlying earnings as well as less favorable tax one-offs (€-3 million in 1H 2014 vs. €+14 million in 1H 2013 in the Mediterranean and Latin American Region). International insurance underlying earnings amounted to €135 million. On a constant exchange rate basis, underlying earnings increased by €32 million (or +31%) mainly attributable to (i) lower taxes on prior year reserve developments at AXA Corporate Solutions and (ii) favorable developments on the run-off portfolios. Asset Management underlying earnings amounted to €184 million. On a constant exchange rate basis, underlying earnings decreased by €8 million (or -4%). On a comparable scope basis, restated for the sale of AXA Private Equity, Asset Management underlying earnings were up €19 million (+11%) attributable to AllianceBernstein (€+10 million) and AXA IM (€+8 million), both due to higher revenues net of variable compensation. Banking underlying earnings amounted to €68 million. On a constant exchange rate basis, underlying earnings increased by €7 million (+12%) mainly attributable to (i) Belgium (€+3 million) as a result of a higher interest margin and (ii) France (€+2 million) due to a rise in net operating revenues reflecting higher interest income on retail loans. Holdings and other companies underlying earnings amounted to €-486 million. On a constant exchange rate basis, underlying earnings decreased by €51 million mainly attributable to AXA SA (€-79 million) mainly reflecting (i) Group investments to support advertising campaigns across the Group and increase digital capabilities, (ii) a decrease in dividends received from non-consolidated subsidiaries and (iii) an increase in the French tax on dividends of 3% due to higher dividend paid by the Company. Group adjusted earnings to net income Group net capital gains attributable to shareholders amounted to €335 million. On a constant exchange rate basis, Group net capital gains and losses attributable to shareholders decreased by €42 million mainly due to: Half Year 2014 Financial Report 13 I ACTIVITY REPORT €-117 million lower realized capital gains to €439 million mainly driven by lower realized gains on fixed income assets (€-63 million), real estate (€-33 million) and equities (€-30 million); €+68 million lower impairments to €-91 million mainly driven by equities (€+45 million) and real estate (€+16 million); €+7 million less unfavorable intrinsic value to €-13 million related to equity hedging derivatives. As a result, adjusted earnings amounted to €3,112 million. On a constant exchange rate basis, adjusted earnings increased by €241 million (+8%). Net income amounted to €3,008 million. On a constant exchange rate basis, net income increased by €618 million (+25%) mainly as a result of: higher adjusted earnings (€+241 million); a favorable change in fair value of financial assets and derivatives in half year 2014 compared to an unfavorable change in half year 2013; a change of €+269 million to €37 million which can be analyzed as follows: accounting under IAS 39, mainly attributable to interest rates decrease; o €+46 million from the change in fair value of assets accounted for as under fair value option; o €-87 million following foreign exchange rate movements notably driven by an unfavorable change in fair value of economic hedge derivatives not eligible for hedge accounting under IAS 39. lower negative impact from exceptional operations (€+40 million) mainly driven by the non-repeat of the realized loss from the closed Mony portfolio transaction (€+32 million); lower restructuring costs (€+78 million) mainly driven by the non-repeat of 2013 real estate lease write-off in the United-States. Half Year 2014 Financial Report 14 I ACTIVITY REPORT CONSOLIDATED SHAREHOLDERS’ EQUITY As of June 30, 2014, consolidated shareholders' equity totalled €58.9 billion. The movements in shareholders' equity since December 31, 2013 are presented in the table below: Shareholders' Equity At December 31, 2013 52,923 Share Capital 9 Capital in excess of nominal value 31 Equity-share based compensation 15 Treasury shares sold or bought in open market 28 Deeply subordinated debt (including interests charges) 814 Fair value recorded in shareholders' equity 3,950 Impact of currency fluctuations 530 Payment of N-1 dividend (1,960) Other 10 Net income for the period 3,008 Actuarial gains and losses on pension benefits (455) At June 30, 2014 58,903 SHAREHOLDER VALUE Earnings per share (“EPS”) June 30, 2014 June 30, 2013 published June 30, 2013 restated (a) December 31, 2013 published December 31, 2013 restated (a) Var. June 30, 2014 versus June 30, 2013 restated (a) (in Euro million except ordinary shares in million) Basic Fully diluted Basic Fully diluted Basic Fully diluted Basic Fully diluted Basic Fully diluted Basic Fully diluted Weighted average number of shares 2,417.9 2,432.9 2,380.6 2,388.1 2,380.6 2,388.1 2,383.9 2,397.2 2,383.9 2,397.2 Net income (Euro per Ordinary Share) 1.18 1.18 0.98 0.97 0.98 0.97 1.76 1.75 1.76 1.75 21% 21% Adjusted earnings (Euro per Ordinary Share) 1.23 1.22 1.18 1.18 1.18 1.18 2.05 2.03 2.05 2.03 4% 4% Underlying earnings (Euro per Ordinary Share) 1.09 1.08 1.02 1.02 1.02 1.02 1.86 1.85 1.86 1.85 6% 6% (a) Restated means comparative information related to previous periods was retrospectively restated for the application of IFRS10 and 11. Half Year 2014 Financial Report 15 I ACTIVITY REPORT Return On Equity (“ROE”) (in Euro million) June 30, 2014 June 30, 2013 published June 30, 2013 restated (a) Change in % points ROE 11.1% 9.5% 9.5% 1.6 pts Net income group share 3,008 2,467 2,467 Average shareholders' equity 54,107 51,714 51,714 Adjusted ROE 16.8% 16.5% 16.5% 0.3 pts Adjusted earnings (b) 2,964 2,810 2,810 Average shareholders' equity (c) 35,315 34,114 34,114 Underlying ROE 14.9% 14.3% 14.3% 0.6 pts Underlying earnings (b) 2,629 2,435 2,435 Average shareholders' equity (c) 35,315 34,114 34,114 (a) Restated means comparative information related to previous periods was retrospectively restated for the application of IFRS10 and 11. (b) Including adjustement to reflect net financial charges related to undated debt (recorded through shareholders' equity). (c) Excluding fair value of invested assets and derivatives and undated debt (both recorded through shareholders' equity). Half Year 2014 Financial Report 16 I ACTIVITY REPORT LIFE & SAVINGS SEGMENT The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income attributable to AXA’s Life & Savings segment for the periods indicated: Life & Savings segment (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues (a) 29,100 29,643 55,433 APE (Group share) 3,181 3,310 6,335 Investment margin 1,314 1,327 2,710 Fees & revenues 3,561 3,753 7,706 Net technical margin 461 418 726 Expenses (3,207) (3,427) (7,274) Amortization of VBI (57) (49) (167) Other 57 44 85 Underlying earnings before tax 2,129 2,067 3,787 Income tax expenses / benefits (429) (484) (905) Minority interests (49) (50) (89) Underlying earnings Group share 1,651 1,534 2,793 Net capital gains or losses attributable to shareholders net of income tax 163 286 332 Adjusted earnings Group share 1,813 1,820 3,125 Profit or loss on financial assets (under FV option) & derivatives 79 (200) (270) Exceptional operations (including discontinued operations) 28 (24) (70) Goodwill and other related intangibles impacts (8) (15) (65) Integration and restructuring costs (8) (79) (107) Net income Group share 1,906 1,501 2,614 (a) Before intercompany eliminations. Consolidated Gross Revenues (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 France 7,535 7,211 14,131 United States 5,489 5,567 11,304 United Kingdom 303 285 569 Japan 1,895 2,605 5,579 Germany 3,308 3,232 6,542 Switzerland 4,878 5,206 7,067 Belgium 1,041 1,151 2,012 Central & Eastern Europe (a) 152 195 389 Mediterranean and Latin American Region (b) 3,366 3,001 5,581 Hong Kong 892 983 1,849 South-East Asia, India and China (c) 157 133 268 Other (d) 84 74 141 TOTAL 29,100 29,643 55,433 Intercompany transactions (61) (40) (103) Contribution to consolidated gross revenues 29,039 29,603 55,331 o/w. high growth markets 1,441 1,511 2,884 o/w. mature markets 27,598 28,092 52,447 (a) Includes Poland, Hungary, Czech Republic and Slovakia. (b) Mediterranean and Latin American Region includes Italy, Spain, Portugal, Greece, Turkey, Morocco, Mexico and Colombia. (c) South-East Asia revenues include Singapore and non bancassurance subsidiaries in Indonesia. (d) Other correspond to Luxembourg, AXA Life Invest Services, Architas and Family Protect. Half Year 2014 Financial Report 17 I ACTIVITY REPORT Underlying earnings (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 France 397 353 708 United States 431 311 559 United Kingdom 13 (9) (12) Japan 198 292 447 Germany 84 79 138 Switzerland 150 150 277 Belgium 88 81 167 Central & Eastern Europe (a) 24 15 32 Mediterranean and Latin American Region (b) 91 90 174 Hong Kong 136 132 251 South-East Asia, India and China (c) 60 54 92 Other (d) (21) (13) (41) UNDERLYING EARNINGS 1,651 1,534 2,793 o/w. high growth markets 232 209 394 o/w. mature markets 1,419 1,325 2,399 (a) Includes Poland, Hungary, Czech Republic and Slovakia. (b) Mediterranean and Latin American Region includes Italy, Spain, Portugal, Greece, Turkey, Morocco, Mexico and Colombia. (c) South-East Asia earnings include Indonesia, Thailand, Philippines, China, India and Singapore. (d) Other correspond to Luxembourg, AXA Life Invest Services, Architas and Family Protect. Half Year 2014 Financial Report 18 I ACTIVITY REPORT Life & Savings operations – France (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 7,535 765 589 741 316 (1,091) - 4 559 (161) (1) 397 66 463 10 - (4) - 469 7,211 690 568 790 215 (1,124) - 4 454 (101) (1) 353 214 567 12 - (10) - 569 14,131 1,431 1,179 1,583 455 (2,285) - 11 943 (232) (2) 708 295 1,003 47 - (9) - 1,042 Gross revenues increased by €324 million (+4%) to €7,535 million(1): Unit-Linked revenues (16% of gross revenues) decreased by €22 million (-2%) despite the strong performance in Individual Savings (€+225 million or +25%) following Unit-Linked oriented commercial efforts, as Group Retirement sales decreased due to non-recurring large contracts signed during the first semester of 2013. Individual Unit-Linked share in Savings premiums increased by 3 points to 31%, above market average of 17%(2); G/A Savings revenues (39% of gross revenues) increased by €249 million (+9%) benefiting from growth in hybrid(3) product (€+214 million) and Group Retirement (€+35 million) sales; G/A Protection and Health revenues (45% of gross revenues) increased by €94 million (+3%) driven by a €56 million increase in Group Protection and a €12 million increase in Individual Protection reflecting positive portfolio developments. Individual Health increased by €26 million driven by tariff increases. APE increased by €75 million (+11%) to €765 million: Unit-Linked sales (18% of APE) increased by €5 million (+4%) driven up by a strong performance in Individual Savings (€+26 million) reflecting the focus of the sales force towards Unit-Linked offers; G/A Savings sales (37% of APE) increased by €33 million (+13%), benefiting from growth in hybrid products (€+22 million) and Group Retirement business (€+10 million); G/A Protection and Health sales (44% of APE) increased by €37 million (+12%) driven by €27 million increase in Group Protection & Health reflecting developments in both international (Employee Benefits and Mortgages) and traditional French businesses. Individual Health sales increased by €7 million (+14%) reflecting volume growth, increase in average premiums and tariff increases. Individual Protection sales increased by €3 million (+9%) mainly driven by strong volumes growth. (1) €7,523 million after intercompany eliminations. (2) Source FFSA June 2014. (3) Hybrid products: savings products allowing clients to invest in both Unit-Linked and General Account funds. Half Year 2014 Financial Report 19 I ACTIVITY REPORT Investment margin increased by €21 million (+4%) to €589 million reflecting lower crediting rates, while investment results remained stable. Fees & revenues decreased by €49 million (-6%) to €741 million due to €-78 million Unearned Revenues Reserves impact mainly resulting from a €-66 million adjustment (fully offset in deferred acquisition costs), partly offset by higher fees both on Unit-Linked business, in line with a higher average asset base, and on Protection business, in line with revenues growth. Net technical margin increased by €100 million (+47%) to €316 million driven by an increased current year result, mainly in Group and Individual Protection business due to a more favorable claims experience and by higher positive prior year reserve developments in Retirement business. Expenses decreased by €33 million (-3%) to €-1,091 million: Acquisition expenses fell by €50 million (-7%) to €-643 million, driven by a €+76 million positive deferred acquisition costs impact mainly resulting from a €+66 million adjustment (fully offset in Unearned Revenues Reserves) and by lower general acquisition expenses (€+11 million), partly offset by higher commissions (€-37 million) in line with business growth; Administrative expenses rose by €17 million (+4%) to €-447 million driven by higher asset based commissions in Savings business in line with higher assets under management. As a result, the underlying cost income ratio decreased by 5.1 points to 66.3%. Income tax expenses increased by €61 million (+60%) to €-161 million mainly due to higher pre-tax underlying earnings combined with a lower level of non taxable revenues (€-21 million). Underlying earnings increased by €44 million (+12%) to €397 million. Adjusted earnings decreased by €104 million (-18%) to €463 million driven by lower net realized capital gains (€-160 million) mainly due to the sale of a 2.4% equity stake in BNP Paribas in the first half of 2013 (€- 151 million), partly offset by higher underlying earnings (€+44 million). Net income decreased by €100 million (-18%) to €469 million driven by lower adjusted earnings (€-104 million) and an unfavorable change in fair value of economic hedge derivatives not eligible for hedge accounting mainly as a consequence of lower interest rates (€-30 million), partly offset by a more favorable change in fair value of Mutual funds (€+27 million). Half Year 2014 Financial Report 20 I ACTIVITY REPORT Life & Savings operations - United States (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = $ 5,489 634 241 1,034 (139) (700) (9) - 427 4 (0) 431 (13) 418 11 21 (1) (1) 449 1.371 5,567 655 258 1,120 (82) (845) (11) - 441 (130) - 311 (24) 288 (218) (32) (1) (59) (23) 1.313 11,304 1,322 502 2,211 (113) (1,833) (20) - 746 (187) - 559 (47) 511 (301) (11) (1) (65) 133 1.327 On October 1, 2013, AXA Financial completed the closed MONY portfolio transaction. In 2013, MONY generated €131 million of Gross Revenues and €30 million of Underlying Earnings. Commentary below on a comparable basis reflects the exclusion of MONY and the change at constant exchange rate. Gross revenues decreased by €78 million (-1%) to €5,489 million(1). On a comparable basis, gross revenues increased €296 million (5%): Variable Annuity revenues (70% of gross revenues) increased by 8% reflecting strong sales results for non-GMxB investment only, floating roll up rate GMxB, and Employer Sponsored products; Life revenues (21% of gross revenues) decreased by 2% primarily driven by lower sales of Protection products; Asset Management fees (7% of gross revenues) increased by 5%, reflecting improved market conditions and sales; Mutual Fund revenues (2% of gross revenues) increased by 17%, reflecting higher advisory fees received driven by higher average assets. APE decreased by €21 million (-3%) to €634 million. On a comparable basis, APE increased by €8 million (+1%): Variable Annuity sales were up 6% to €353 million due to sales growth in the non-GMxB Investment only products (+5% versus 2013), in line with the strategy. Non-GMxB investment only and floating rate GMxB products launched since 2010 represented a combined 65% of first half 2014 Variable Annuity sales; Life sales decreased by 21% to €72 million driven by a decrease in G/A Protection products which were down 37% from the prior year, partly reflecting product repricing and the adverse interest rate environment impacting the competitivity of products as well as the non-repeat of a 2013 large case sale; (1) €5,488 million after intercompany eliminations. Half Year 2014 Financial Report 21 I ACTIVITY REPORT Mutual Funds sales were at €209 million, 3% better than prior year reflecting increased advisory account sales. Investment margin decreased by €17 million (-7%) to €241 million. On a comparable basis, Investment margin increased by €15 million (6%) principally due to higher equity returns, partially offset by lower balances and fixed income yields. Fees & revenues decreased by €86 million (-8%) to €1,034 million. On a comparable basis, fees & revenues decreased by €24 million (-2%) driven by the non-repeat of favorable assumption updates of Unearned Revenues Reserves in 2013 offset by higher fees reflecting higher average Separate Account balances. Net technical margin decreased by €57 million (-70%) to €-139 million. On a comparable basis, net technical margin decreased by €23 million (-19%) due to lower life mortality margins, partly offset by an improvement in GMxB margin. Expenses decreased by €145 million (-17%) to €-700 million. On a comparable basis, expenses decreased by €98 million (-12%): Expenses excluding DAC amortization increased by €7 million driven by higher asset based commissions on higher balances and mutual fund product sales, partially offset by continued expense management; DAC amortization of €96 million decreased €104 million from prior year, primarily driven by the non- repeat of unfavorable changes in expected future margins on variable and interest-sensitive life products due to updated mortality assumptions in 2013. Amortization of VBI decreased by €2 million (-15%) to €-9 million. On a comparable basis, amortization of VBI decreased by €1 million (-12%). As a result, the underlying cost income ratio decreased by 5.7 points to 62.4%. Income tax expenses decreased by €134 million from a tax expense of €130 million to a tax benefit of €4 million. On a comparable basis, income tax expenses decreased by €113 million, reflecting a €121 million benefit mainly from a tax settlement in 2014, partially offset by tax expenses from higher pre-tax underlying earnings. Underlying earnings increased by €120 million (+38%) to €431 million. On a comparable basis, underlying earnings increased by €170 million (+61%). Adjusted earnings increased by €130 million (+45%) to €418 million. On a constant exchange rate basis, adjusted earnings increased by €170 million (+64%) in line with higher underlying earnings. Net income increased by €472 million to €449 million. On a constant exchange rate basis, net income increased by €466 million primarily driven by (i) higher adjusted earnings, (ii) a favorable change in fair value of economic hedge derivatives mainly attributable to lower interest rates and (iii) the non-repeat of 2013 real estate lease write-off. Half Year 2014 Financial Report 22 I ACTIVITY REPORT Life & Savings operations - United Kingdom (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = £ 303 369 2 153 2 (150) - - 7 6 (0) 13 1 14 1 - (0) (3) 11 0.821 285 365 2 147 (0) (168) - - (19) 10 0 (9) - (9) (1) - - (18) (28) 0.851 569 647 4 296 2 (326) - - (24) 13 0 (12) 0 (11) (2) - - (25) (38) 0.846 Gross revenues increased by €18 million (+6%) to €303 million(1). On a comparable basis, gross revenues increased by €5 million (+2%). Revenues on Variable Annuity products were €8 million higher due to new business growth with a further €6 million increase driven by the growth of regular premiums on SunLife protection business. Recurring revenue streams on investment business also increased as a result of 10% growth in funds under management. This was partially offset by the one-off impact of exiting the Bancassurance channel in April 2013. APE increased by €4 million (+1%) to €369 million. On a comparable basis, APE was down 2% compared to prior year. New business through the Elevate platform continued to perform strongly with IFA APE up by €9 million (+8%) as the platform continues to establish itself as one of the leaders in the UK platform market. This growth was more than offset by lower APE from the Corporate Pension Investment business, which saw two very large schemes sold in the first half of 2013, and by the exit of Bancassurance channel. Investment margin was in line with prior year at €2 million. Fees & revenues increased by €6 million (+4%) to €153 million. On a constant exchange rate basis, fees & revenues were in line with prior year. The growth of regular fees from Elevate business broadly offset the reduction in initial revenues following the closure of the Bancassurance channel and the impact of the industry Retail Distribution Review (RDR). Net technical margin increased by €2 million on a constant exchange rate basis to €2 million. (1) €300 million after intercompany eliminations. Half Year 2014 Financial Report 23 I ACTIVITY REPORT Expenses decreased by €18 million (-11%) to €-150 million. On a constant exchange rate basis, expenses decreased by €24 million due to €15 million of recurring savings and a reduction in costs following the closure of the Bancassurance channel, partly offset by increases due to inflation and business growth. As a consequence, the underlying cost income ratio improved significantly, decreasing by 17.4 points to 95.6%. Income tax benefits decreased by €4 million (-40%) to €6 million. On a constant exchange rate basis, income tax benefit decreased by €4 million (-42%) due to the increase in pre-tax earnings. Underlying earnings increased by €22 million to €13 million. On a constant exchange rate basis, underlying earnings increased by €22 million. Adjusted earnings increased by €23 million to €14 million. On a constant exchange rate basis, adjusted earnings increased by €22 million mainly due to higher underlying earnings. Net income increased by €39 million to €11 million. On a constant exchange rate basis, net income increased by €38 million as a result of lower restructuring costs (€+15m) and higher adjusted earnings (€+23m). Half Year 2014 Financial Report 24 I ACTIVITY REPORT Life & Savings operations – Japan (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 (a) Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = Yen (a) The contribution of AXA Life Japan to the AXA consolidated result for 2013 annual accounts exceptionally covered a period of fifteen months. 1,895 175 0 628 33 (347) (17) - 297 (97) (2) 198 0 198 16 - - - 214 140.410 2,605 240 37 738 28 (390) (14) - 399 (105) (3) 292 33 324 13 - - - 337 113.026 5,579 504 153 1,696 (92) (998) (82) - 677 (226) (4) 447 0 447 (9) - - - 438 124.765 AXA Life Japan aligned its closing date with the Group calendar year starting with 2013 annual accounts. Half Year 2013 accounts were covering October 1, 2012 to March 31, 2013 period. For consistency reasons, 2013 APE and Gross revenues have been restated to cover the January 1, 2013 to June 30, 2013 period. This restatement as well as the change at constant exchange rate are refered to as “comparable basis” in the comments below. Gross revenues decreased by €711 million (- 27%) to €1,895 million(1). On a comparable basis, revenues decreased by €68 million (-3%): Protection revenues (45% of gross revenues) decreased by €9 million (-1%) reflecting a decrease in inforce run-off portfolio of Increasing Term products (€-27 million), partly offset by steady in-force growth in Term & Term Rider products (€ +17 million); Health revenues (38% of gross revenues) increased by €12 million (+1%) with higher new business in medical products, partly offset by lower revenues from inforce portfolios; Investment & Savings revenues (17% of gross revenues) decreased by €71 million (-15%) mainly due to lower sales of Variable Annuity products (€-62 million) following product redesign and a shift in client appetite. APE decreased by €65 million (-27%) to €175 million. On a comparable basis, APE decreased by €3 million (-1%): Protection sales (54% of APE) increased by €13 million (+12%) driven by newly launched Simple Underwriting Long Term Life product (€+14 million) and a strong shift of sales to the Low Cash Value Whole Life product (€+14 million) from Long Term Life products (€-21 million) impacted by a regulated repricing; (1) €1,895 million after intercompany eliminations. Half Year 2014 Financial Report 25 I ACTIVITY REPORT Health sales (40% of APE) decreased by €9 million (-9%) reflecting the non-repeat of the successful launch of Disability Income product in 2013 (€-12 million), partly offset by steady growth in Medical product sales; Investment and Savings sales (6% of APE) decreased by €6 million (-33%) due to lower sales of Variable Annuity products in the bancassurance channel following product redesign and a shift in client appetite. Investment margin decreased by €37 million to €0 million. On a constant exchange rate basis, investment margin decreased by €37 million mainly due to the non-repeat of 2013 high dividend income from equity and private equity funds following Japanese stock market rally. Fees & revenues decreased by €110 million (-15%) to €628 million. On a constant exchange rate basis, fees & revenues increased by €42 million (+6%) mainly due to higher loadings driven by a better business mix, increased retention in G/A Protection & Health business (€+19 million) and the non-repeat of 2013 lower Unearned Revenues Reserves amortization following an increase in Variable Annuity account value (mostly offset by deferred acquisition costs amortization). Net technical margin increased by €4 million (+15%) to €33 million. On a constant exchange rate basis, net technical margin increased by €12 million (+43%) mainly driven by improved mortality and surrender margins, partly offset by higher GMxB losses (€-19 million). Expenses decreased by €43 million (-11%) to €-347 million. On a constant exchange rate basis, expenses increased by €41 million (+11%) mainly due to the non-repeat of 2013 positive one-off effects and 2013 lower deferred acquisition costs amortization following an increase in Variable Annuity account value (mostly offset by Unearned Revenues Reserves amortization). Amortization of VBI increased by €2 million (+17%) to €-17 million. On a constant exchange rate basis, VBI amortization increased by €7 million (+45%) mainly driven by various assumption changes. As a result, the underlying cost income ratio worsened by 4.7 points to 55.1%. Income tax expenses decreased by €7 million to €-97 million. On a constant exchange rate basis, income tax expenses increased by €16 million due to the non-repeat of a positive tax one-off in 1H13 (€-31 million), partly offset by lower pre-tax underlying earnings (€+15 million). Underlying earnings decreased by €94 million (-32%) to €198 million or decreased by €48 million (-16%) on a constant exchange rate basis. Adjusted earnings decreased by €126 million (-39%) to €198 million or decreased by €80 million (-25%) on a constant exchange rate basis, due to lower underlying earnings and lower realized capital gains mainly on fixed income assets. Net income decreased by €123 million (-37%) to €214 million. On a constant exchange rate basis, net income decreased by €74 million (-22%) mainly due to lower adjusted earnings (€-80 million). Half Year 2014 Financial Report 26 I ACTIVITY REPORT Life & Savings operations – Germany (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 3,308 176 67 155 42 (118) (10) - 136 (52) (0) 84 (5) 78 9 11 - - 99 3,232 218 51 149 29 (100) (7) - 122 (42) (0) 79 17 96 11 2 - - 109 6,542 385 69 270 41 (158) (33) - 190 (51) (0) 138 4 142 11 0 - (2) 152 Gross revenues increased by €76 million (+2%) to €3,308 million(1): Life revenues (58% of gross revenues) increased by €22 million (+1%) to €1,931 million driven by Unit-Linked single premiums, partly due to the successful launch of a new hybrid(2) product. This was partly offset by lower G/A regular premiums; Health revenues (42% of gross revenues) increased by €54 million (+4%) to €1,377 million mainly due to premium adjustments to cover medical inflation. APE decreased by €42 million (-19%) to €176 million: Life sales decreased by €7 million (-6%) to €107 million due to decreasing G/A regular premiums, partly compensated by the successful launch of a new hybrid product; Health sales decreased by €35 million (-34%) to €69 million due to the non-repeat of strong sales in the first half of 2013 driven by the introduction of unisex tariffs at the end of 2012. Investment margin increased by €16 million (+31%) to €67 million mainly reflecting lower crediting rates. Fees & revenues increased by €6 million (+4%) to €155 million. Net technical margin increased by €13 million (+44%) to €42 million mainly due to a higher mortality margin in all business lines (€+7 million) and lower hedge losses on GMxB products (€+6 million). (1) €3,294 million after intercompany eliminations. (2) Hybrid products: savings products allowing clients to invest in both Unit-Linked and General Account funds. Half Year 2014 Financial Report 27 I ACTIVITY REPORT Expenses increased by €18 million (+18%) to €-118 million mainly due to higher investments in IT systems and health business activities, as well as refinement of cost allocation between AXA Germany entities. Expense reductions from the cost saving program offset overall increase in wages and other expenses due to inflation. Amortization of VBI increased by €3 million (+36%) to €-10 million due to model refinements and assumption changes. As a result, the underlying cost income ratio increased by 1.5 pts to 48.3%. Income tax expenses increased by €10 million (+24%) to €-52 million due to higher pre-tax underlying earnings. Underlying earnings increased by €5 million (+6%) to €84 million. Adjusted earnings decreased by €18 million (-19%) to €78 million due to lower net realized capital gains on fixed income and equity assets. Net income decreased by €10 million (-9%) to €99 million as the decrease in adjusted earnings was partly offset by a positive one-off effect this year following last year’s merger of two AXA pension entities. Half Year 2014 Financial Report 28 I ACTIVITY REPORT Life & Savings operations – Switzerland (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = Swiss Franc 4,878 222 107 149 72 (129) (13) - 186 (37) - 150 43 193 14 - (3) - 204 1.221 5,206 310 103 147 73 (125) (1) - 196 (46) - 150 21 170 (13) - (3) - 154 1.230 7,067 430 193 288 143 (264) (7) - 353 (76) - 277 41 318 (21) - (7) - 290 1.229 Gross revenues decreased by €328 million (-6%) to €4,878 million(1). On a comparable basis, gross revenues decreased by €360 million (-7%): Group Life revenues decreased by €452 million (-10%) to €4,325 million driven by lower single premiums from full protection scheme contracts (€-475million) due to the strategic shift from full protection schemes towards semi-autonomous employee benefit solutions; Individual Life revenues increased by €91 million (+20%) to €553 million mainly due to higher single premiums (€+86 million) resulting from the continuing success of the G/A Protection with Savings product Protect Star. APE decreased by €88 million (-28%) to €222 million. On a comparable basis, APE decreased by €90 million (-29%): Group Life sales decreased by €101 million (-39%) driven by the strategic shift from full protection schemes towards semi-autonomous employee benefit solutions; Individual Life sales increased by €11 million (+23%) driven by the continuing success of the G/A Protection with Savings product Protect Star. Investment margin increased by €5 million (+5%) to €107 million. On a constant exchange rate basis, investment margin increased by €4 million (+4%) resulting from higher investment income mainly from equity investments due to a higher average asset base. Fees & revenues increased by €2 million (+1%) to €149 million. On a constant exchange rate basis, fees & revenues increased by €1 million (+1%) mainly resulting from higher Individual Life revenues. (1) €4,875 million after intercompany eliminations. Half Year 2014 Financial Report 29 I ACTIVITY REPORT Net technical margin remained stable at €72 million. On a constant exchange rate basis, net technical margin decreased by €1 million (-1%). Expenses increased by €4 million (+3%) to €-129 million. On a constant exchange rate basis, expenses increased by €3 million (+3%) mainly due to higher acquisition expenses driven by the success of protection products in Individual Life. Amortization of VBI increased by €12 million to €-13 million. On a constant exchange rate basis, amortization of VBI increased by €12 million mainly impacted by the non-repeat of 2013 model refinements. As a result, the Underlying cost income ratio increased by 4.2 points to 43.3%. Income tax expenses decreased by €10 million (-21%) to €-37 million. On a constant exchange rate basis, income tax expenses decreased by €10 million (-21%) driven by lower pre-tax underlying earnings and non- recurring tax charges from participation dividends in previous years. Underlying earnings remained stable at €150 million. On a constant exchange rate basis, underlying earnings decreased by €1 million (-1%). Adjusted earnings increased by €23 million (+13%) to €193 million. On a constant exchange rate basis, adjusted earnings increased by €21 million (+13%) mainly resulting from higher realized capital gains on equities and private equity investments. Net income increased by €50 million (+32%) to €204 million. On a constant exchange rate basis, net income increased by €48 million (+31%) mainly due to higher adjusted earnings and a positive change in fair value of economic interest rate hedge derivatives not eligible for hedge accounting. Half Year 2014 Financial Report 30 I ACTIVITY REPORT Life & Savings operations – Belgium (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 1,041 72 167 67 10 (121) 0 - 122 (35) (0) 88 71 158 30 - - (1) 186 1,151 94 162 61 12 (122) (2) - 110 (29) (0) 81 8 89 (19) - - (1) 69 2,012 151 339 132 18 (249) (4) - 237 (69) (0) 167 22 190 (15) - - (7) 168 Gross revenues decreased by €110 million (-10%) to €1,041 million(1): G/A Protection & Health revenues (39% of gross revenues) decreased by €5 million (-1%) mainly due to products in run-off in Individual Life Protection (€-4 million); Unit-Linked revenues (31% of gross revenues) decreased by €69 million (-18%) mainly due to a decrease in structured products (€-53 million) and variable annuity products (€-20 million); G/A Savings revenues (30% of gross revenues) decreased by €36 million (-10%) mainly due to the run-off Crest product line (€-14 million), and lower sales of the Oxylife hybrid(2) product (€-13 million). APE decreased by €22 million (-24%) to €72 million: G/A Protection & Health sales (13% of APE) were stable at €10 million; Unit-Linked sales (44% of APE) decreased by €13 million mainly due to a decrease in structured funds (€-5 million) and Oxylife hybrid products (€-4 million); G/A Savings sales (43% of APE) decreased by €9 million mainly due to lower new business in self- employed savings products. Investment margin increased by €6 million (+4%) to €167 million. Fees & revenues increased by €6 million (+10%) to €67 million driven by the growth in Unit-Linked fees as a result of higher assets under management. Net technical margin decreased by €2 million (-17%) to €10 million. (1) €1,041 million after intercompany eliminations. (2) Hybrid products: savings products allowing clients to invest in both Unit-Linked and General Account funds. Half Year 2014 Financial Report 31 I ACTIVITY REPORT Expenses decreased by €1 million (-1%) to €-121 million: Acquisition expenses fell by €3 million (-6%) to €-49 million mainly due to lower commissions on premiums; Administrative expenses increased by €3 million (+4%) to €-72 million mainly as a result of higher overhead costs from salary inflation, partly offset by continued costs management actions. Amortization of VBI decreased by €2 million (-104%) to €0 million. As a result, the underlying cost income ratio improved by 3.3 points to 49.9%. Income tax expenses increased by €6 million to €-35 million due to the increase in pre-tax underlying earnings. Underlying earnings increased by €7 million (+9%) to €88 million. Adjusted earnings increased by €69 million (+78%) to €158 million mainly due to higher realized capital gains (€+49 million) principally on equities and fixed income assets, and to lower impairments (€+16 million) mainly on real estate. Net income increased by €118 million (+172%) to €186 million due to (i) higher adjusted earnings (€+70 million), (ii) a more favorable change in fair value of mutual funds and other assets (€+26 million) mainly driven by a decrease in corporate spreads and (iii) a favorable change in fair value of interest rate hedging derivatives not eligible for hedge accounting (€+27 million). Half Year 2014 Financial Report 32 I ACTIVITY REPORT Life & Savings operations – Central & Eastern Europe (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 152 41 4 79 20 (72) (1) - 30 (5) (0) 24 0 25 (0) - (1) (0) 24 195 55 5 85 21 (92) (1) - 17 (2) (0) 15 (0) 15 (0) 11 (1) (0) 25 389 108 6 175 50 (192) (2) - 37 (6) (0) 32 0 32 (0) (52) (35) (3) (58) Gross revenues decreased by €42 million (-22%) to €152 million(1). On a comparable basis, gross revenues decreased by €16 million (-9%) driven by lower Unit-Linked new business sales in Czech Republic (-36% to €49 million), partly offset by higher revenues from Pure Protection business in Poland (+46% to €36 million), mainly through Bancassurance channel. APE decreased by €14 million (-26%) to €41 million. On a comparable basis, APE decreased by €10 million (- 20%) driven by Pension Fund activities impacted by the regulatory changes in Poland and Czech Republic (- 85% to €2 million). The region is currently focusing on other business lines with a significant increase in Protection business (+24% to €10 million), partly offset by lower production of Unit-Linked products in a continuing difficult economic environment. Underlying earnings increased by €10 million (+64%) to €25 million. On a constant exchange rate basis, underlying earnings increased by €10 million mainly driven by an exceptional result from the change in regulation on Polish Pension Funds. Adjusted earnings increased by €10 million (+65%) to €25 million. On a constant exchange rate basis, adjusted earnings increased by €10 million driven by higher underlying earnings. Net income decreased by €1 million (-3%) to €24 million. On a constant exchange rate basis, net income decreased by €1 million, despite higher adjusted earnings, mainly driven by the non-repeat of an exceptional positive result on Czech Pension Funds in the first half year of 2013 (€11 million). (1) €152 million after intercompany eliminations. Half Year 2014 Financial Report 33 I ACTIVITY REPORT Life & Savings operations – Mediterranean & Latin American Region (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 3,366 271 117 257 77 (266) (6) - 179 (42) (46) 91 (0) 91 (3) (0) 1 (1) 87 3,001 227 131 210 83 (245) (6) - 173 (37) (46) 90 11 100 (1) (2) (1) (1) 96 5,581 443 245 449 159 (509) (12) - 331 (75) (83) 174 17 191 3 (1) (1) (2) 190 Note: (i) Italy, Spain, Portugal, Greece, Turkey, Mexico, Morocco and Colombia are fully consolidated; (ii) Colombia was fully consolidated since April 2, 2014. In the comments below, the comparable basis includes April to June 2013 results of Colombia. Gross revenues increased by €365 million (+12%) or €309 million (+10%) on a comparable basis to €3,366 million(1): Mature markets were up €312 million (+11%) with higher sales of G/A Savings (€+555 million) mainly driven by increased volumes in both hybrid(2) and traditional products at AXA MPS as well as lower competition from bank deposit products in Spain and Italy, partly offset by lower Unit-Linked products sales (€-235 million), mainly due to lower “Protected Unit” product sales at AXA MPS; High growth markets decreased by €3 million (-1%) mainly due to lower sales of Individual Protection products in Turkey, partly offset by higher sales of Individual Protection in Mexico and growth from the newly consolidated entity in Columbia. APE increased by €44 million (+19%) or €47 million (+21%) on a comparable basis to €271 million: Mature markets sales were up €51 million (+26%) to €248 million driven by G/A Savings (€+40 million) from both hybrid and traditional products at AXA MPS as well as lower competition from bank deposit products in Spain and Italy, Unit-Linked products (€+7 million) and Group Protection business (€+4 million); High growth markets sales decreased by €4 million (-14%) mainly due to lower new large Group Protection accounts in Mexico (€-5 million), partly offset by Turkey (€+2 million) driven by Pension business. (1) €3,362 million after intercompany eliminations. (2) Hybrid products: savings products allowing clients to invest in both Unit-Linked and General Account funds. Half Year 2014 Financial Report 34 I ACTIVITY REPORT Investment margin decreased by €14 million (-11%) to €117 million. On a constant exchange rate basis, investment margin decreased by €12 million (-10%) mainly due to AXA MPS driven by a lower average yield as well as a lower average asset base as a consequence of high level of surrenders. Fees & revenues increased by €46 million (+22%) to €257 million. On a constant exchange rate basis, fees & revenues increased by €51 million (+24%) largely driven by AXA MPS (€+37 million) from higher Unearned Revenues Reserves amortization (partly offset in deferred acquisition costs) mainly reflecting higher surrenders combined with higher sales of Unit-Linked products. Net technical margin decreased by €8 million (-9%) to €77 million. On a constant exchange rate basis, net technical margin decreased by €5 million (-5%) mainly due to a deteriorated GMxB margin. Expenses increased by €21 million (+8%) to €-266 million. On a constant exchange rate basis, expenses increased by €27 million (+11%): Mature markets increased by €19 million mainly driven by AXA MPS reflecting higher deferred acquisition costs amortization in line with increased surrenders; High growth markets increased by €8 million primarily due to Mexico mainly due to higher deferred acquisition costs amortization. Amortization of VBI was stable at €-6 million. As a result, the underlying cost income ratio increased by 1.0 point to 60.3%. Income tax expenses increased by €5 million (+12%) to €-42 million. On a constant exchange rate basis, income tax expenses increased by €5 million (+13%), mainly due to higher pre-tax underlying earnings and lower tax benefit on General Account technical reserves evolution at AXA MPS, partly offset by a positive country mix. Underlying earnings increased by €1 million (+1%) to €91 million. On a constant exchange rate basis, underlying earnings increased by €2 million (+3%). Adjusted earnings decreased by €10 million (-10%) to €91 million. On a constant exchange rate basis, adjusted earnings decreased by €9 million (-9%) mainly driven by higher impairments on fixed income assets. Net income decreased by €8 million (-9%) to €87 million. On a constant exchange rate basis, net income decreased by €8 million (-8%) mainly due to lower adjusted earnings and change in fair value of interest rate hedging derivatives. Half Year 2014 Financial Report 35 I ACTIVITY REPORT Life & Savings operations – Hong Kong (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues APE (Group share) Investment margin Fees & revenues Net technical margin Expenses Amortization of VBI Other Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = Hong Kong Dollar 892 226 7 240 24 (125) (2) - 145 (8) - 136 (0) 136 (11) (0) - - 126 10.633 983 215 6 241 21 (132) (7) - 130 2 - 132 6 138 16 (0) - - 154 10.186 1,849 443 6 478 44 (264) (6) - 257 (6) - 251 0 251 18 0 - - 269 10.291 Gross revenues decreased by €91 million (-9%) to €892 million(1). On a comparable basis, gross revenues increased by €24 million (+3%) mainly due to higher revenues from G/A Protection & Health products (€+64 million) driven by strong new business sales and a steady in-force growth, partly offset by lower revenues from G/A Investment & Savings products (€-27 million) with a decrease in retirement product sales and from Unit-Linked products (€-14 million) mainly due to the termination of bancassurance partnership. APE increased by €10 million (+5%) to €226 million. On a comparable basis, APE increased by €20 million (+9%) due to higher sales of G/A Protection with Savings products (€+16 million) driven by successful marketing campaigns, Pure Protection and Health products (€+7 million) demonstrating an increasing focus on this profitable segment, and Unit-Linked products (€+4 million) thanks to strong IFA sales and despite the termination of a bancassurance partnership, partly offset by lower retirement products sales (€-8 million). Investment margin increased by €1 million (+20%) to €7 million. On a constant exchange rate basis, investment margin increased by €2 million (+25%) mainly due to higher investment income boosted by higher dividends from equity, partly offset by higher interest credited to policyholders. Fees & revenues remained stable at €240 million. On a constant exchange rate basis, fees & revenues increased by €9 million (+4%) mainly driven by an increase in loadings on premiums stemming from both new business and in-force growth. Net technical margin rose by €3 million (+15%) to €24 million. On a constant exchange rate basis, net technical margin increased by €4 million (+20%) driven by a higher surrender margin from Unit-Linked products and better claims experience in G/A Protection & Health business. (1) €878 million after intercompany eliminations. Half Year 2014 Financial Report 36 I ACTIVITY REPORT Expenses decreased by €7 million (-5%) to €-125 million. On a constant exchange rate basis, expenses decreased by €1 million (-1%), despite a steady portfolio growth, mainly driven by lower IT costs. Amortization of VBI decreased by €5 million (-74%) to €-2 million. On a constant exchange rate basis, amortization of VBI decreased by €5 million (-73%) driven by favorable assumption changes. As a consequence, the underlying cost income ratio decreased by 5.0 points to 46.7%. Income tax increased from a €3 million benefit in 2013 to a €-8 million charge in 2014. On a constant exchange rate basis, income tax expenses increased by €11 million mainly due to the non-repeat of 2013 tax benefits (€10 million) from the change in the tax base for a block of insurance business in the context of the merger of two insurance entities. Underlying earnings increased by €4 million (+3%) to €136 million. On a constant exchange rate basis, underlying earnings increased by €10 million (+8%). Adjusted earnings decreased by €2 million (-1%) to €136 million. On a constant exchange rate basis, adjusted earnings increased by €4 million (+3%) driven by higher underlying earnings (€+10 million), partly offset by lower net realized capital gains. Net income decreased by €28 million (-18%) to €126 million. On a constant exchange rate basis, net income decreased by €23 million (-15%) as higher adjusted earnings (€+4 million) were more than offset by an unfavorable change in fair value of interest rate hedging derivatives not eligible for hedge accounting (€-23 million). Half Year 2014 Financial Report 37 I ACTIVITY REPORT Life & Savings operations – South-East Asia, India & China (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Gross revenues APE (Group share) Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 157 225 60 (0) 60 1 (3) - (0) 57 133 237 54 0 54 0 (2) - (0) 52 268 463 92 0 92 (1) (5) (13) (3) 70 2014 figures have been compared to the same scope for 2013 i.e. adjusted for alignment of reporting period with Group calendar year in India and Philippines since full year 2013. Gross Revenues(1) increased by €24 million (+18%) to €157 million. On a comparable basis, gross revenues increased by €40 million (+30%) mainly driven by higher revenues from G/A Protection & Health (€+34 million) mainly in Singapore reflecting employee benefits business growth after the acquisition of HSBC portfolio since the last quarter of 2013. Unit-Linked business recorded a growth of €+6 million due to higher single premium sales in Singapore, partly offset by Indonesia. APE(1) decreased by €12 million (-5%) to €225 million. On a comparable basis, APE increased by €31 million (+14%) mainly driven by: Strong performance in Thailand (€+30 million), in particular from G/A Protection with Savings products; China (€+8 million) and Singapore (€+3 million) with continued momentum in G/A Protection & Health business; Partly offset by a slowdown in Unit-Linked business in Indonesia (€-10 million). Underlying earnings(1) increased by €6 million (+11%) to €60 million. On a comparable basis, underlying earnings increased by €17 million (+31%) mainly due to: Business growth and higher investment earnings in Thailand (€+16 million); Improved business mix towards longer term G/A Protection & Health business as well as continuous expense management in India (€+5 million); Partly offset by the reversal of deferred tax assets in Indonesia (€-3 million). Adjusted earnings(1) increased by €6 million (+10%) to €60 million. On a comparable basis, adjusted earnings increased by €17 million (+31%) driven by underlying earnings growth. Net income(1) increased by €5 million (+9%) to €57 million. On a comparable basis, net income increased by €15 million (+29%) mainly due to higher adjusted earnings. (1) South-East Asia, India & China Life & Savings scope: (i) for gross revenues: Singapore and non-bancassurance subsidiaries in Indonesia, on a 100% share basis; (ii) for APE, underlying earnings, adjusted earnings and net income: China, India, Indonesia,Thailand, Philippines and Singapore, on a group share basis. Malaysia operations are not consolidated. Half Year 2014 Financial Report 38 I ACTIVITY REPORT Life & Savings Operations - Other The following tables present the operating results for the other Life & Savings operations of AXA: Consolidated Gross Revenues (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Luxembourg 65 61 112 AXA Life Invest Services 11 11 22 Family Protect 7 3 7 Other 0 (0) TOTAL 84 74 141 Intercompany transactions (10) (10) (21) Contribution to consolidated gross revenues 73 64 121 Underlying, Adjusted earnings and Net Income (in Euro million) June 30, 2014 June 30, 2013 December 31, 2013 Luxembourg 4 3 7 AXA Life Invest Services (8) (7) (17) Family Protect (17) (8) (31) Other (0) (1) (1) UNDERLYING EARNINGS (21) (13) (41) Net realized capital gains or losses attributable to shareholders 0 0 0 ADJUSTED EARNINGS (21) (13) (41) Profit or loss on financial assets (under Fair Value option) & derivatives 1 0 0 Exceptional operations (including discontinued operations) (1) (1) Goodwill and related intangible impacts Integration and restructuring costs (0) NET INCOME (20) (14) (41) FAMILY PROTECT Underlying earnings as well as adjusted earnings and net income were at €-17 million mainly due to higher direct marketing expenditures to ensure the progressive ramp-up of the activity. AXA LIFE INVEST SERVICES (1) Underlying earnings as well as adjusted earnings decreased by €1 million (-11%) to €-8 million. Net income remained stable at €-8 million. (1) AXA Life Invest Services aim to promote Unit-Linked products with guarantees through thid party bank patnerships. Half Year 2014 Financial Report 39 I ACTIVITY REPORT PROPERTY & CASUALTY SEGMENT The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income attributable to AXA’s Property & Casualty segment for the periods indicated. (in Euro million) HY 2014 HY 2013 published HY 2013 restated (a) FY 2013 published FY 2013 restated (a) Gross revenues (b) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Restated means comparative information related to previous periods was retrospectively restated for the application of IFRS10 and 11. (b) Before intercompany transactions 17,044 71.2% 69.9% 4,331 25.9% 1,115 1,719 (502) 29 (19) 1,226 16,693 71.3% 69.5% 4,329 26.2% 1,005 1,609 (467) 7 (22) 1,128 16,679 71.3% 69.5% 4,323 26.2% 1,003 1,605 (465) 10 (22) 1,128 151 102 102 1,378 1,229 1,229 (35) (20) (35) (1) (0) (1) (39) (24) 1,130 (48) (23) 1,286 (39) (24) 1,130 29,079 71.2% 70.1% 8,625 26.5% 2,042 3,028 (911) 29 (41) 2,105 108 2,213 46 20 (73) (121) 2,085 29,052 71.3% 70.1% 8,610 26.5% 2,037 3,016 (907) 37 (41) 2,105 108 2,213 46 20 (73) (121) 2,085 Consolidated Gross Revenues (in Euro million) HY 2014 HY 2013 published HY 2013 restated (a) FY 2013 published FY 2013 restated (a) France 3,355 3,188 3,188 5,942 5,942 United Kingdom & Ireland 2,202 2,109 2,109 3,907 3,907 Germany 2,404 2,386 2,386 3,807 3,807 Switzerland 2,485 2,425 2,425 2,714 2,714 Belgium 1,126 1,118 1,118 2,050 2,050 Central & Eastern Europe - Luxembourg (b) 87 97 97 171 171 Mediterranean and Latin American Region (c) 3,733 3,775 3,775 7,391 7,391 Direct (d) 1,202 1,152 1,138 2,274 2,247 Asia (e) 449 444 444 822 822 TOTAL 17,044 16,693 16,679 29,079 29,052 Intercompany transactions (224) (196) (196) (288) (288) Contribution to consolidated gross revenues 16,820 16,497 16,483 28,791 28,763 o/w. high growth markets o/w. Direct o/w. mature markets 2,269 1,202 13,349 2,272 1,152 13,073 2,272 1,138 13,073 4,520 2,274 21,996 4,520 2,247 21,996 (a) Restated means comparative information related to previous periods was retrospectively restated for the application of IFRS10 and 11. (b) Central & Eastern Europe includes Ukraine and Reso (Russia). (c) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region, Mexico and Colombia. (d) Direct business in France, Belgium, Spain, Portugal, Italy, Poland, United Kingdom, South Korea and Japan. (e) Asia includes Hong Kong, Malaysia, Singapore. Half Year 2014 Financial Report 40 I ACTIVITY REPORT (in Euro million) Combined Ratio HY 2014 HY 2013 published HY 2013 restated (a) FY 2013 published FY 2013 restated (a) Total 95.8% 95.7% 95.8% 96.6% 96.6% France 96.3% 92.9% 92.9% 94.7% 94.7% United Kingdom & Ireland 98.0% 98.2% 98.2% 98.5% 98.5% Germany 94.8% 97.4% 97.4% 98.2% 98.2% Switzerland 86.4% 90.5% 90.5% 88.9% 88.9% Belgium 91.5% 89.2% 89.2% 93.7% 93.7% Central & Eastern Europe - Luxembourg (b) 101.7% 102.0% 102.0% 103.9% 103.9% Mediterranean and Latin American Region (c) 98.8% 98.7% 98.7% 99.3% 99.3% Direct (d) 98.9% 99.3% 99.5% 99.1% 99.5% Asia (e) 93.6% 93.2% 93.2% 93.1% 93.1% Mature 94.9% 95.0% 95.0% 96.0% 96.0% Direct 98.9% 99.3% 99.5% 99.1% 99.5% High growth 99.0% 97.6% 97.6% 98.1% 98.1% (a) Restated means comparative information related to previous periods was retrospectively restated for the application of IFRS10 and 11. (b) Excluding RESO - RESO combined ratio amounted to 98.3% as of June 30, 2014. (c) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region, Mexico and Colombia. (d) Direct business in France, Belgium, Spain, Portugal, Italy, Poland, United Kingdom, South Korea and Japan. (e) Asia includes Hong Kong, Singapore and Malaysia. Underlying earnings (in Euro million) HY 2014 HY 2013 FY 2013 France 274 294 531 United Kingdom & Ireland 116 114 202 Germany 193 142 295 Switzerland 223 185 405 Belgium 131 143 222 Central & Eastern Europe - Luxembourg (a) 17 5 25 Mediterranean and Latin American Region (b) 184 173 281 Direct (c) 53 41 85 Asia (d) 35 31 58 UNDERLYING EARNINGS 1,226 1,128 2,105 o/w. high growth markets 124 118 225 o/w. Direct 53 41 85 o/w. mature markets 1,049 969 1,796 (a) Central & Eastern Europe includes Ukraine and Reso (Russia). (b) Mediterranean and Latin American Region includes other than Direct operations in Italy, Spain, Portugal, Greece, Turkey, Morocco, Gulf Region, Mexico, Lebanon and Colombia. (c) Direct business in France, Belgium, Spain, Portugal, Italy, Poland, the United Kingdom, South Korea and Japan. (d) Asia includes India, Hong Kong, Malaysia, Singapore and Thailand. Half Year 2014 Financial Report 41 I ACTIVITY REPORT Property & Casualty Operations – France (in Euro million) HY 2014 HY 2013 FY 2013 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 3,355 73.8% 73.2% 786 23.1% 325 434 (160) - (0) 274 28 302 (31) - - - 271 3,188 72.0% 69.2% 866 23.7% 261 462 (168) - (0) 294 (0) 293 (2) - (3) - 288 5,942 73.7% 70.9% 1,710 23.7% 522 836 (304) - (1) 531 32 563 20 24 (3) - 604 Gross revenues increased by €167 million (+5%) to €3,355 million(1). On a comparable basis, mainly adjusted for the internal transfer to AXA Assistance of some service guarantees, gross revenues increased by 4% (or €+130 million): Personal lines (56% of gross revenues) were up 3% to €1,845 million mainly driven by tariff increases in all segments and positive net new contracts in Motor, while the portfolio remained stable in Household; Commercial lines (44% of gross revenues) were up by 5% to €1,458 million mainly driven by tariff increases, partly offset by lower volumes notably in Construction in a context of selective underwriting. Net technical result decreased by €80 million (-9%) to €786 million: The current accident year loss ratio increased by 1.8 points to 73.8% mainly reflecting higher attritional claims ratio due to higher Nat Cat charges (€59 million or +2.0 points related to ELA hailstorm) notably impacting Household and Motor, and a less favorable frequency in Bodily Injury mainly in Personal Motor, partly offset by tariff increases; The all accident year loss ratio increased by 3.9 points to 73.2%, due to the increase of current accident year loss ratio, as well as lower prior year reserve developments notably in Construction, partly offset by positive developments on Liability. Expense ratio decreased by 0.6 point to 23.1% mainly driven by a lower cost base reflecting continuous efforts to reduce expenses combined with a positive volume effect due to higher earned premiums. As a result, enlarged expense ratio was down 0.1 point to 30.1%, driven by an improved expense ratio. As a consequence, the combined ratio was up by 3.4 points to 96.3%. (1) €3,303 million after intercompany eliminations. Half Year 2014 Financial Report 42 I ACTIVITY REPORT Net investment result increased by €64 million (+24%) to €+325 million mainly driven by €+67 million higher exceptional distributions from mutual funds. Income tax expenses decreased by €8 million (-5%) to €-160 million mainly reflecting lower pre-tax underlying earnings. As a result, underlying earnings decreased by €20 million (-7%) to €274 million. Adjusted earnings increased by €9 million (+3%) to €302 million driven by higher net realized capital gains (€+28 million), mostly on equities, reflecting improved market conditions, partly compensated by lower underlying earnings (€-20 million). Net income decreased by €18 million (-6%) to €271 million mainly driven by a negative change in fair value of Mutual funds (€-30 million), partly offset by the increase in adjusted earnings (€+9 million). Half Year 2014 Financial Report 43 I ACTIVITY REPORT Property & Casualty Operations - United Kingdom & Ireland (in Euro million) HY 2014 HY 2013 FY 2013 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = £ (a) Before intercompany eliminations. 2,202 70.2% 69.1% 620 28.9% 105 144 (28) - (0) 116 19 135 (11) - (1) (2) 122 0.821 2,109 69.1% 68.4% 621 29.8% 106 142 (28) - (0) 114 0 114 4 - (1) - 118 0.851 3,907 67.2% 67.9% 1,264 30.6% 208 267 (65) - (0) 202 10 212 17 - (2) (12) 216 0.846 Gross revenues increased by €93 million (+4%) to €2,202 million(1). On a comparable basis, gross revenues increased by €26 million (+1%) Personal lines (45% of gross revenues) were down 3% to €974 million as a result of the ongoing strategy to focus on profitable growth. Motor was up 3% to €275 million due to AXA’s improved competitiveness in the UK, partially offset by lower new business volumes within Northern Ireland as AXA has maintained a strong pricing discipline in a softening market. Non-Motor was down 5% to €698 million: Property was down 7% to €224 million due to unfavorable market conditions and exiting of unprofitable schemes within the UK. Health was up 2% to €345 million with growth both in the UK and International business. Personal Other was down 19% to €129 million following the continued withdrawal from unprofitable schemes and the exit from the Pet insurance market in 2013; Commercial lines (55% of gross revenues) were up 5% to €1,197 million. Motor was up 11% to €231 million principally due to increased new business volumes in the UK. Non-Motor was up 4%. Property was up 9% to €340 million due to an increase in new business. Health was down 1% to €472 million due to the internal transfer of Asia business to the local AXA entity. Other was up 10% to €154 million due to new business sales and strong retention in Liability and Workers Compensation. Net technical result remained stable at €620 million. On a constant exchange rate basis, net technical result decreased by €20 million (-3%). The current year loss ratio increased by 1.1 points to 70.2% due to an increased Nat Cat charge (1.2 points). There were also increases in Personal Other from increased travel claims as the economy improves (0.3 point) and in Personal Motor in Ireland following increased weather related claims partly offset by improvements in the UK reflecting underwriting actions and the impact of legal reforms (0.2 point). In Property, increased natural weather events in in both UK and Ireland were more than offset by lower large losses (-0.1 point). Healthcare has decreased the overall loss ratio 0.5 point as International business margins improved ; The all accident year loss ratio increased by 0.7 point to 69.1% reflecting the increase in the current year loss ratio partly offset by higher positive prior year reserves developments (€+7 million). (1) €2,130 million after intercompany eliminations. Half Year 2014 Financial Report 44 I ACTIVITY REPORT Expense Ratio decreased by 0.9 point to 28.9%.The acquisition ratio was down 1.2 points to 20.0% mainly reflecting a decrease in commission ratio (-1.4 points) due to lower profit share costs and an improved business mix. This favorable movement was partly offset by the non-commission acquisition expense ratio up 0.2 point due to growth within UK Healthcare through ‘Health on Line’. The administrative expense ratio was up 0.3 point to 9.0%, reflecting the timing of project spend. As a result the enlarged expense ratio was down 0.8 point at 31.7% and the combined ratio was down 0.1 point to 98.0%. Net investment result decreased by €1 million (-1%) to €105 million. On a constant exchange rate basis, net investment result decreased by €4 million (-4%) mainly due to lower income from fixed maturity assets. Income tax expenses were in line with prior year to €-28 million. On a constant exchange rate basis, income tax expenses decreased by €1 million (-4%). Underlying earnings increased by €3 million (+3%) to €116 million. On a constant exchange rate basis, underlying earnings were in line with prior year. Adjusted earnings increased by €21 million (+19%) to €135 million. On a constant exchange rate basis, adjusted earnings increased by €18 million (+16%) reflecting increased realized capital gains (€+15 million) mainly on debt securities as well as lower impairment charges mainly on equities. Net Income increased by €4 million (+4%) to €122 million. On a constant exchange rate basis, net income increased by €1 million (+1%) due to the increase in adjusted earnings, partly offset by an unfavorable change in the fair value of financial assets and derivatives (€-18 million). Half Year 2014 Financial Report 45 I ACTIVITY REPORT Property & Casualty Operations – Germany (in Euro million) HY 2014 HY 2013 FY 2013 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 2,404 66.9% 66.5% 637 28.3% 178 277 (84) - (0) 193 12 205 14 - (2) (2) 215 2,386 70.0% 68.6% 592 28.8% 159 207 (65) - (0) 142 38 180 (24) 3 (2) - 158 3,807 70.3% 69.0% 1,179 29.2% 360 429 (133) - (0) 295 24 320 (25) 3 (4) (23) 271 Gross revenues increased by €18 million (+1%) to €2,404 million(1) : Personal lines (52% of gross revenues) were up 1% to €1,369 million driven by tariff increases, partly offset by lower volumes, mainly in Motor; Commercial lines (32% of gross revenues) were down 1% to €850 million, mainly in Motor due to stricter underwriting rules whereas Property and Liability increased slightly due to tariff increases; Other lines (16% of gross revenues) were up 7% to €425 million due to fronting business for the AXA Group. Net technical result increased by €45 million (+8%) to €637 million: The current accident year loss ratio decreased by 3.2 points to 66.9% reflecting improved attritional claims experience resulting from tariff increases in all retail lines and a mild winter. Nat Cat events remained stable as Half Year 2014 was impacted by ELA hailstorm (€54 million) while Half Year 2013 was impacted by floods in Bavaria and Saxony (€50 million); The all accident year loss ratio decreased by 2.2 points to 66.5% as the decrease in current accident year loss ratio was partly offset by lower positive prior year reserve developments as a result of reserve strengthening in commercial liability. Expense ratio decreased by 0.5 point to 28.3% mainly due to an administrative expense ratio down 0.6 point as a result of productivity programs and a refinement of cost allocation between AXA Germany entities. Enlarged expense ratio was down by 0.6 point to 31.5%. As a result, the combined ratio was down by 2.6 points to 94.8%. (1) €2,373 million after intercompany eliminations. Half Year 2014 Financial Report 46 I ACTIVITY REPORT Net investment result increased by €19 million (+12%) to €178 million mainly due to an exceptional interest profit on a tax claim. Income tax expenses increased by €19 million (+30%) to €-84 million following higher underlying earnings before tax. Underlying earnings increased by €50 million (+35%) to €193 million. Adjusted earnings increased by €24 million (+13%) to €205 million as the increase of underlying earnings was partly offset by lower net realized capital gains mainly on equities. Net income increased by €57 million (+36%) to €215 million due to the increase in adjusted earnings and favorable change in fair value of fixed income funds due to decreasing interest rates and corporate spreads. Half Year 2014 Financial Report 47 I ACTIVITY REPORT Property & Casualty Operations – Switzerland (in Euro million) HY 2014 HY 2013 FY 2013 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = Swiss Franc (a) Before intercompany eliminations. 2,485 69.3% 62.6% 519 23.8% 93 282 (58) - (2) 223 42 265 (1) - (12) - 252 1.221 2,425 72.8% 65.8% 461 24.7% 106 234 (48) - (2) 185 13 198 (10) - (13) - 175 1.230 2,714 69.1% 64.0% 972 24.9% 207 506 (98) - (3) 405 6 411 (5) - (26) - 379 1.229 Gross revenues increased by €61 million (+3%) to €2,485 million(1). On a comparable basis, gross revenues increased by €41 million (+2%): Personal lines (53% of gross revenues) were up 2% to €1,329 million as a consequence of volume growth, especially in Motor, as well as tariff increases in Household reflecting an increased frequency of theft; Commercial lines (47% of gross revenues) were up 1% to €1,163 million driven by volume growth despite a very competitive market. Net technical result increased by €59 million (+13%) to €519 million. On a constant exchange rate basis, net technical result increased by €55 million (+12%): The current accident year loss ratio decreased by 3.5 points to 69.3% driven by lower large claims as well as an improved attritional claims experience, mainly driven by Personal Motor; The all accident year loss ratio decreased by 3.2 points to 62.6% broadly in line with the improvement in the current accident year loss ratio. Expense ratio improved by 0.9 point to 23.8%. The acquisition ratio was down 0.4 point due to favorable seasonality effects while the administration expense ratio was down 0.5 point mainly driven by continuing cost management discipline. The enlarged expense ratio was down by 0.9 point to 27.5%. As a result, the combined ratio was down by 4.1 points to 86.4%. (1) €2,477 million after intercompany eliminations. Half Year 2014 Financial Report 48 I ACTIVITY REPORT Net investment result decreased by €13 million (-12%) to €93 million. On a constant exchange rate basis, net investment result decreased by €13 million (-12%) mainly attributable to low reinvestment yields on fixed income assets. Income tax expenses increased by €10 million (+21%) to €58 million. On a constant exchange rate basis, income tax expenses increased by €10 million (+20%) driven by higher pre-tax underlying earnings. Underlying earnings increased by €38 million (+21%) to €223 million. On a constant exchange rate basis, underlying earnings increased by €37 million (+20%). Adjusted earnings increased by €67 million (+34%) to €265 million. On a constant exchange rate basis, adjusted earnings increased by €65 million (+33%) mainly driven by higher underlying earnings and higher net realized capital gains, mainly on equities. Net income increased by €77 million (+44%) to €252 million. On a constant exchange rate basis, net income increased by €76 million (+43%) mainly driven by higher adjusted earnings and a positive change in fair value of private equity and hedge funds. Half Year 2014 Financial Report 49 I ACTIVITY REPORT Property & Casualty Operations – Belgium (in Euro million) HY 2014 HY 2013 FY 2013 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 1,126 67.1% 61.6% 393 29.9% 109 195 (65) - - 131 32 163 (4) - (1) (4) 154 1,118 65.7% 58.5% 424 30.7% 103 213 (70) - - 143 29 172 (18) - (1) (3) 150 2,050 66.9% 63.4% 756 30.3% 199 329 (106) - - 222 44 266 (10) - (2) (21) 233 (a) Before intercompany eliminations. Gross revenues increased by €8 million (+1%) to €1,126 million(1): Personal lines (47% of gross revenues) were down 1% to €534 million following negative net new contracts partially offset by tariff increases in both Motor and Household; Commercial lines (51% of gross revenues) were up 2% to €575 million mainly due to an increase in Workers’ Compensation (€+7 million) explained by tariff increases on small business enterprises and more favorable economic environment. Net technical result decreased by €31 million (-7%) to €393 million: The current accident year loss ratio increased by 1.4 points to 67.1% driven by higher natural catastrophe events (+5.1 points) mainly driven by €54 million from the ELA storm, partially offset by an improvement of attritional claims (-3.3 points) as a result of tariff increases and lower frequency; The all accident year loss ratio increased by 3.1 points to 61.6% as a result of the evolution of the current accident year loss ratio and lower positive prior year reserve developments. Expense ratio was down 0.7 point to 29.9% driven by lower administrative costs, reflecting continued costs management actions partially offset by higher overhead costs from salary inflation. Enlarged expense ratio down 0.6 point to 37.7%. As a result, the combined ratio was up 2.4 points to 91.5%. Net investment result increased by €6 million (+6%) to €109 million mainly due to higher dividends on equities and mutual funds. (1) €1,108 million after intercompany eliminations. Half Year 2014 Financial Report 50 I ACTIVITY REPORT Income tax expenses decreased by €5 million to €-65 million due to lower pre-tax underlying earnings. Underlying earnings decreased by €13 million to €131 million. Adjusted earnings decreased by €10 million (-6%) to €163 million due to lower underlying earnings, partially offset by lower impairments on equities (€+3m). Net income increased by €3 million (+2%) to €154 million mainly driven by a favorable change in fair value of private equity mutual funds and inflation derivatives, partially offset by a decrease in adjusted earnings. Half Year 2014 Financial Report 51 I ACTIVITY REPORT Property & Casualty Operations – Central & Eastern Europe and Luxembourg Consolidated Gross Revenues (in Euro million) HY 2014 HY 2013 FY 2013 Luxembourg Ukraine Reso (Russia) TOTAL Intercompany transactions Contribution to consolidated gross revenues 64 23 - 87 - 87 63 34 - 97 - 97 100 71 - 171 - 171 Underlying, Adjusted earnings and Net Income (in Euro million) HY 2014 HY 2013 FY 2013 Luxembourg Ukraine Reso (Russia) (a) 3 0 13 2 1 1 3 2 20 UNDERLYING EARNINGS 17 5 25 Net realized capital gains or losses attributable to shareholders (0) 8 1 ADJUSTED EARNINGS 16 12 26 Profit or loss on financial assets (under Fair Value option) & derivatives Exceptional operations (including discontinued operations) Goodwill and related intangibles impacts Integration and restructuring costs 4 - (20) - 1 - (1) - 15 - (1) (0) NET INCOME (a) Reso accounted for using the equity method. AXA's share of profit is recognized in income statement. (0) 13 39 UKRAINE Gross revenues decreased by €11 million (-32%) to €23 million. On a comparable basis, gross revenues decreased by €3 million (-8%) driven by the political unrest in Ukraine and its consequences on the economic conditions in the country. Underlying earnings and adjusted earnings decreased by €1 million to €0 million due to lower technical result and lower net investment result. As a result, the combined ratio deteriorated by 4.2 points to 109.6%. Net income decreased by €21 million to €-20 million. On a constant exchange rate basis, net income decreased by €28 million driven by a full write-off of goodwill (€-20 million) as a consequence of deteriorated economic perspectives. RESO (RUSSIA) Underlying earnings increased by €14 million to €13 million on a constant exchange rate basis, mainly driven by the non-repeat of higher one-off expenses (€+5 million) in the first half of 2013, higher net technical margin (€+7 million) and higher investment result (€+2 million). As a result, the combined ratio was down 6.6 points to 98.3%. Adjusted earnings increased by €6 million to €13 million on a constant exchange rate basis, driven by higher underlying earnings, partly offset by lower net realized capital gains. Net income increased by €9 million to €16 million on a constant exchange rate basis, mainly driven by higher adjusted earnings. Half Year 2014 Financial Report 52 I ACTIVITY REPORT Property & Casualty Operations – Mediterranean & Latin American Region (in Euro million) HY 2014 HY 2013 FY 2013 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 3,733 72.3% 73.3% 948 25.5% 232 276 (80) 1 (13) 184 14 198 8 - (7) (11) 188 3,775 72.1% 73.6% 950 25.1% 202 250 (63) 1 (15) 173 15 188 13 (4) (10) (10) 176 7,391 72.7% 73.8% 1,901 25.5% 404 453 (150) 2 (24) 281 (9) 272 28 (4) (19) (31) 245 (a) Before intercompany eliminations. Note: (i) Italy, Spain, Portugal, Greece, Turkey, Mexico, Morocco, Gulf region and Colombia are fully consolidated; (ii) Lebanon is consolidated under the equity method and contributes only to the underlying earnings, adjusted earnings and net income; (iii) Colombia was fully consolidated since April 2, 2014. In the comments below, the comparable basis includes April to June 2013 results of Colombia. Gross revenues decreased by €43 million (-1%) to €3,733 million(1). On a comparable basis, gross revenues increased by €41 million (+1%) driven by high growth markets (+5% or €+91 million) principally in the Gulf region (€+75 million) and the newly consolidated entity in Colombia (€+35 million), partly offset by a decline in mature markets (-3% or €-51 million). Personal lines (56% of gross revenues) were down 2% to €2,095 million driven by Motor (-5% or €- 71 million) mainly reflecting a decline in Turkey (€-46 million) from increased market competition and change in mix towards lower average premium products and Italy (€-21 million) from average premium decrease, partly offset by Health (+10% or €+31 million) predominantly from high growth markets (€+23 million) driven by tariff increase in Mexico (€+13 million); Commercial lines (43% of gross revenues) were up 5% to €1,628 million driven by Health (+22% or €+66 million) especially in the Gulf Region (€+55 million) mainly driven by a favorable renewal timing effect and increase in renewals and Mexico (€+12 million) from tariff increase; Other lines (1% of gross revenues) were up 13% to €37 million. Net technical result result decreased by €2 million (-0%) to €948 million. On a constant exchange rate basis, net technical result increased by €40 million (+4%) driven by both mature markets (€+28 million) and high growth markets (€+13 million). The current accident year loss ratio increased by 0.3 point to 72.3%, including a higher Nat Cat charge (+0.3 point). Excluding Nat Cat charge, loss ratio in high growth markets improved by 0.4 point while it remained stable in mature makets. Improvement in high growth markets was mainly driven by (1) €3,698 million after intercompany eliminations. Half Year 2014 Financial Report 53 I ACTIVITY REPORT lower large losses and further optimization of reinsurance partly offset by adverse claims experience in motor in Turkey and higher average costs in health in Mexico. Mature markets were stable driven by lower large losses, partly offset by an increase of average costs and an unfavorable product mix change in motor in Spain; The all accident year loss ratio was stable at 73.3% on a constant exchange basis with less unfavorable prior year reserves developments (€+7 million) mainly driven by Spain (€+42 million) in motor, partly offset by Turkey (€-36 million) due to reserve strengthening reflecting an increase in both frequency and average costs of legal claims in Motor. Expense ratio increased by 0.3 point to 25.5% due to administrative expenses (+0.3 point). Mature markets deteriorated by 0.9 point due to a negative volume effect and higher IT and relocation costs in Italy. High growth markets improved by 0.1 point driven by a positive volume effect. Enlarged expense ratio deteriorated by 0.4 point to 28.4%. As a result, the combined ratio was up 0.3 point to 98.8%. Net investment result increased by €31 million (+15%) to €232 million. On a constant exchange rate basis, net investment result increased by €46 million (+23%) mainly driven by Turkey (€+30 million) as a result of both higher interest rates and average asset base. Income tax expenses increased by €17 million (+27%) to €-80 million. On a constant exchange rate basis, income tax expenses increased by €19 million (+30%) due to both higher pre-tax underlying earnings and an increase in the effective tax rate reflecting unfavorable evolution of tax one-offs (€-3 million negative tax one- off in Half Year 2014 and €+14 million positive tax one-off in Half Year 2013). Underlying earnings increased by €11 million (+6%) to €184 million. On a constant exchange rate basis, underlying earnings increased by €18 million (+10%). Adjusted earnings increased by €10 million (+6%) to €198 million. On a constant exchange rate basis, adjusted earnings increased by €17 million (+9%) driven by underlying earnings increase. Net income increased by €12 million (+7%) to €188 million. On a constant exchange rate basis, net income increased by €18 million (+10%) mainly driven by the non-repeat of an exceptional charge to close a litigation, partly offset by a negative impact from investments in foreign currencies. Half Year 2014 Financial Report 54 I ACTIVITY REPORT Property & Casualty Operations – Direct business (in Euro million) HY 2014 HY 2013 restated (a) FY 2013 restated (a) Gross revenues (b) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 1,202 77.4% 76.5% 265 22.3% 55 68 (18) 4 (0) 53 4 57 2 (0) (1) (1) 56 1,138 77.5% 77.1% 246 22.4% 49 54 (16) 3 (0) 41 (1) 41 1 - (1) (1) 39 2,247 77.1% 77.2% 497 22.3% 100 112 (35) 8 (0) 85 3 88 7 (2) (4) (4) 84 (a) Restated means comparative information related to previous periods was retrospectively restated for the application of IFRS10 and 11. (b) Before intercompany transactions Direct business includes operations in France (23% of total Direct gross revenues), the UK (22%), South Korea (20%), Japan (14%), Spain (7%), Italy (5%), Belgium (5%), Poland (3%) and Portugal (1%). Gross revenues increased by €64 million (+6%) to €1,202 million(1). On a comparable basis, gross revenues increased by €79 million (+7%): Personal Motor (86% of gross revenues) was up €65 million (+7%) to €1,036 million mainly driven by improved retention in the UK (+9% or €+18 million) and South Korea (+9% or €+18 million) as well as new business growth in Japan (+8% or €+14 million) and France (+6% or €+12 million), partly offset by Spain (-12% or €-11 million) following tariff increases and selective underwriting to improve the profitability; Personal Non-Motor (14% of gross revenues) was up €14 million (+9%) to €170 million mainly supported by higher new business in Household in France and in Health in South Korea. Net technical result increased by €19 million (+8%) to €265 million. On a constant exchange rate basis net technical result increased by €22 million (+9%): The current accident year loss ratio decreased by 0.2 point to 77.4% as a result of continued underwriting improvement and lower frequency in Motor, partly offset by higher Nat Cat charge (+1.2 points) following unfavorable weather conditions in France and Belgium ; The all accident year loss ratio decreased by 0.6 point to 76.5% mainly as a result of the decrease in current accident year loss ratio and more favorable prior year reserve developments. Expense ratio decreased by 0.1 point to 22.3% mainly driven by higher volumes. Enlarged expense ratio was increased by 0.1 point to 28.0%. (1) €1,202 million after intercompany eliminations. Half Year 2014 Financial Report 55 I ACTIVITY REPORT As a result, the combined ratio was down by 0.7 point to 98.9%. Net investment result increased by €7 million (+14%) to €55 million. On a constant exchange rate basis, net investment result increased by €6 million (+12%) mainly driven by a higher average asset base and increased returns from fixed income assets. Income tax expenses increased by €3 million (+18%) to €-18 million. On a constant exchange rate basis, income tax expenses increased by €3 million (+19%) reflecting higher pre-tax underlying earnings. Underlying earnings increased by €12 million (+30%) to €53 million. On a constant exchange rate basis, underlying earnings increased by €12 million (+30%). Adjusted earnings increased by €16 million (+40%) to €57 million. On a constant exchange rate basis, adjusted earnings increased by €16 million (+40%) due to higher underlying earnings and net realized capital gains. Net income increased by €18 million (+46%) to €56 million. On a constant exchange rate basis, net income increased by €18 million (+46%) mainly due to higher adjusted earnings. Half Year 2014 Financial Report 56 I ACTIVITY REPORT Property & Casualty Operations - Asia (in Euro million) HY 2014 HY 2013 FY 2013 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share 449 67.8% 65.7% 135 27.9% 11 36 (7) 10 (4) 35 1 36 (0) - (3) (4) 30 444 68.3% 65.7% 135 27.5% 9 36 (6) 5 (3) 31 (1) 30 0 - (6) (10) 14 822 68.0% 66.0% 270 27.0% 19 75 (13) 7 (10) 58 (3) 55 0 - (12) (30) 13 (a) Before intercompany eliminations. Note: Asia Property & Casualty scope (i) for gross revenues and combined ratio: Hong Kong, Malaysia and Singapore, on a 100% share basis; (ii) for underlying earnings, adjusted earnings and net income: China, India, Hong Kong, Malaysia, Singapore and Thailand, on a group share basis. Indonesia operations are not consolidated. China, India and Thailand are consolidated through equity method. China was consolidated for the first time in Half Year 2014 as of February 20th, 2014. In the comments below, the comparable basis includes the restated 4-month (March-June) results in 2013 for China. Gross revenues increased by €6 million (+1%) to €449 million(1). On a comparable basis, gross revenues increased by €36 million(2) (+8%): Personal lines (45% of the gross revenues) were up €10 million (+5%) to €203 million driven by (i) Motor (€+8 million) as a result of positive new inflows notably reflecting an increase in private car sales in Malaysia and by (ii) Non Motor (€+2 million) with a growth in Health business in Hong Kong; Commercial lines (55% of the gross revenues) were up €20 million (+8%) to €246 million mainly driven by (i) Health (€+7 million) from volume increases in Singapore and Malaysia, (ii) Property (€+6 million) mainly driven by higher business volume in Singapore, Hong Kong and Malaysia, (iii) Motor (€+5 million) mainly driven by Malaysia, and (iv) Workers Compensation (€+3 million) from price and volume increases in Hong Kong. Net technical result remained stable at €135 million. On a comparable basis, net technical result increased by €9 million (+6%): The current accident year loss ratio improved by 0.5 point to 67.8% mainly due to (i) Commercial Health (-2.0 points) driven by a favorable portfolio mix and improved reinsurance result in Malaysia, and tariff increases in Singapore, (ii) Commercial Property (-1.9 points) driven by lower attritional losses, (iii) Commercial Motor (-3.6 points) from lower attritional losses in Malaysia and Singapore, (1) €442 million after intercompany eliminations. (2) Including €5 million of fronting business not allocated to Personal and Commercial lines in 2013. Half Year 2014 Financial Report 57 I ACTIVITY REPORT partly offset by (iv) Personal Health (+3.5 points) driven by higher frequency and severity in Hong Kong as well as higher medical inflation in Singapore; The all accident year loss ratio improved by 0.1 point to 65.7% mainly due to the improvement of current accident year loss ratio, partly offset by lower positive prior year reserve developments. Expense ratio deteriorated by 0.4 point to 27.9%. On a comparable basis, expense ratio also deteriorated by 0.4 point mainly driven by higher acquisition expenses (+0.4 point) reflecting higher commissions in Singapore and non-commission expenses in Malaysia. Enlarged expense ratio deteriorated by 0.4 point to 30.8% on a comparable basis. As a result, the combined ratio deteriorated by 0.5 point to 93.6% on a comparable basis. Net investment result increased by €2 million to €11 million. On a comparable basis, the net investment result increased by €3 million mainly from higher yield on fixed income assets in Malaysia and change in asset mix in Singapore. Income tax expenses increased by €1 million to €-7 million. On a comparable basis, income tax expenses increased by €1 million due to higher pre-tax underlying earnings. Underlying earnings increased by €4 million to €35 million(1). On a comparable basis, underlying earnings increased by €2 million. Adjusted earnings increased by €6 million to €36 million. On a comparable basis, adjusted earnings increased by €4 million driven by higher underlying earnings and the non-repeat of 2013 net realized capital losses. Net income increased by €15 million to €30 million. On a comparable basis, net income increased by €13 million driven by the increase in adjusted earnings as well as lower integration costs in Hong Kong and Singapore, partly offset by €1 million integration costs related to AXA Tian Ping. (1) Including Thailand (Group share : 99.3%) and India (Group share: 26%) that were consolidated through equity method for the first time in 2013, and China (Group share : 50%) that was consolidated through equity method for the first time in 2014 as of February 20th. Half Year 2014 Financial Report 58 I ACTIVITY REPORT INTERNATIONAL INSURANCE SEGMENT The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income for the International Insurance Segment for the periods indicated: Consolidated Gross Revenues (in Euro million) HY 2014 HY 2013 FY 2013 AXA Corporate Solutions Assurance 1,379 1,341 2,099 AXA Global Life and AXA Global P&C 77 57 56 AXA Assistance 558 555 1,065 Other (a) 25 28 57 TOTAL 2,039 1,980 3,277 Intercompany transactions (73) (71) (134) Contribution to consolidated gross revenues 1,966 1,909 3,143 (a) Including AXA Liabilities Managers and AXA Corporate Solutions Life Reinsurance Company. Underlying, Adjusted earnings and Net Income (in Euro million) HY 2014 HY 2013 FY 2013 AXA Corporate Solutions Assurance 86 72 149 AXA Global Life and AXA Global P&C 7 8 16 AXA Assistance 11 9 20 Other (a) 32 14 17 UNDERLYING EARNINGS 135 103 202 Net realized capital gains or losses attributable to shareholders 28 16 25 ADJUSTED EARNINGS 163 119 228 Profit or loss on financial assets (under Fair Value option) & derivatives 6 (11) (7) Exceptional operations (including discontinued operations) (0) (24) (32) Goodwill and related intangibles impacts Integration and restructuring costs (2) (1) (4) NET INCOME 166 83 184 (a) Including AXA Liabilities Managers and AXA Corporate Solutions Life Reinsurance Company. Half Year 2014 Financial Report 59 I ACTIVITY REPORT AXA Corporate Solutions Assurance (in Euro million) HY 2014 HY 2013 FY 2013 Gross revenues (a) Current accident year loss ratio (net) All accident year loss ratio (net) Net technical result before expenses Expense ratio Net investment result Underlying earnings before tax Income tax expenses / benefits Net income from investments in affiliates and associates Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (a) Before intercompany eliminations. 1,379 82.5% 81.1% 215 16.0% 95 128 (41) - (1) 86 26 112 6 - - - 118 1,341 82.4% 81.8% 210 15.3% 90 124 (50) - (1) 72 6 78 (9) - - - 69 2,099 85.5% 81.9% 381 15.8% 193 242 (91) - (2) 149 11 160 (11) - - - 150 Gross revenues increased by €38 million (+3%) to €1,379 million(1). On a comparable basis, gross revenues increased by €40 million (+3%) notably in Construction (+26%) from large corporate contracts, Motor (+6%) and Property (+2%) driven by portfolio developments and tariff increases. This growth was partly offset by a decrease in Aviation (-6%) mainly due to tariff decreases following favorable claims developments in recent years and in Liability (-2%) mainly due to cancellations in a soft market environment. Net technical result increased by €5 million (+2%) to €215 million. On a constant exchange rate basis, net technical result increased by €4 million (+2%). The current accident year loss ratio increased by 0.1 point to 82.5% driven by higher large losses in Property and Marine, partly offset by lower large losses in Construction; The all accident year loss ratio improved by 0.6 point to 81.1% mainly driven by higher positive prior reserve developments in Construction and Property. Expense ratio increased by 0.7 point to 16.0% due to a higher acquisition expense ratio resulting from higher commission rate resulting from a change in portfolio mix. Enlarged expense ratio deteriorated by 0.4 point to 19.8%. As a result, the combined ratio is stable at 97.1%. Net investment result increased by €4 million (+5%) to €95 million. On a constant exchange rate basis, net investment result increased by €4 million (+4%) mainly driven by higher dividends on equities. (1) €1,371 million after intercompany eliminations. Half Year 2014 Financial Report 60 I ACTIVITY REPORT Income tax expenses decreased by €10 million (-19%) to €-41 million. On a constant exchange rate basis, income tax expenses decreased by €10 million (-20%) mainly driven by lower taxes on prior year reserve developments. As a result, underlying earnings increased by €13 million (+19%) to €86 million. On a constant exchange rate basis, underlying earnings increased by €13 million (+18%). Adjusted earnings increased by €34 million (+43%) to €112 million. On a constant exchange rate basis, adjusted earnings increased by €33 million (+42%) mainly driven by higher underlying earnings as well as higher net realized capital gains mainly on equities. Net income increased by €49 million (+71%) to €118 million. On a constant exchange rate basis, net income increased by €48 million (+70%) mainly driven by higher adjusted earnings and a positive foreign exchange impact. AXA Global Life and AXA Global P&C(1) Underlying earnings decreased by €1 million (-17%) to €7 million mainly due to lower brokerage income as a result of a decrease in premiums and commissions rate in AXA Global P&C, partly offset by a higher technical result on run off activities in AXA Global Life. Adjusted earnings decreased by €1 million (-16%) to €7 million mainly as a result of lower underlying earnings. Net income increased by €3 million (+42%) to €11 million mainly driven by a favorable change in fair value of Mutual funds and derivatives. AXA Assistance Gross revenues increased by €3 million (+1%) to €558 million. On a comparable basis, mainly adjusted for the internal transfer from AXA France of some service guarantees, the disposal of Cours Legendre and Domiserve, gross revenues increased by €32 million (+7%) mainly driven by strong developments in Travel, Ecommerce Business, Motor and Home activities combined with growth of the in-force base in Spain. Underlying earnings increased by €2 million (+19%) to €11 million mainly driven by strong growth of business and tight control of expenses in Europe. Adjusted earnings increased by €2 million (+22%) to €11 million mainly driven by higher underlying earnings. Net income increased by €22 million to €5 million primarily reflecting the non-repeat of 2013 exceptional capital losses following the disposal of French based companies. (1) Gathers both central teams from Life & Savings and Property & Casualty global business lines in addition to Group reinsurance operations. Half Year 2014 Financial Report 61 I ACTIVITY REPORT Other international activities Underlying earnings increased by €18 million to €32 million. On a constant exchange rate basis, underlying earnings increased by €18 million mainly driven by favorable developments on run-off portfolio. Adjusted earnings increased by €10 million to €34 million. On a constant exchange rate basis, adjusted earnings increased by €10 million driven by higher underlying earnings, partly offset by lower net realized capital gains in corporate debt instruments and on real estate restructuring. Net income increased by €9 million to €33 million. On a constant exchange rate basis, net income increased by €9 million driven by higher adjusted earnings. Half Year 2014 Financial Report 62 I ACTIVITY REPORT ASSET MANAGEMENT SEGMENT The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and net income for the Asset Management Segment for the periods indicated: Consolidated Gross Revenues (in Euro million) HY 2014 HY 2013 FY 2013 AllianceBernstein 1,069 1,087 2,177 AXA Investment Managers 707 828 1,638 TOTAL 1,776 1,915 3,815 Intercompany transactions (183) (174) (354) Contribution to consolidated gross revenues 1,593 1,741 3,461 Underlying, Adjusted earnings and Net Income (in Euro million) HY 2014 HY 2013 FY 2013 AllianceBernstein 83 76 185 AXA Investment Managers 101 118 216 UNDERLYING EARNINGS 184 194 400 Net realized capital gains or losses attributable to shareholders (1) (1) ADJUSTED EARNINGS 184 194 399 Profit or loss on financial assets (under Fair Value option) & derivatives 7 8 13 Exceptional operations (including discontinued operations) (1) 0 180 Goodwill and related intangibles impacts Integration and restructuring costs (2) (6) (15) NET INCOME 188 196 577 Half Year 2014 Financial Report 63 I ACTIVITY REPORT AllianceBernstein (in Euro million) HY 2014 HY 2013 FY 2013 Gross revenues 1,069 1,087 2,177 Net investment result (2) (1) 2 Total revenues 1,067 1,086 2,179 General expenses Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share Average exchange rate : 1.00 € = $ (857) 211 (54) (74) 83 0 83 (2) 0 0 (1) 80 1.371 (880) 205 (58) (71) 76 0 76 2 0 0 (2) 77 1.313 (1,719) 460 (114) (161) 185 0 185 1 0 0 (9) 176 1.327 Assets under Management (\"AUM\") increased by €25 billion from year-end 2013 to €371 billion at June 30, 2014 as a result of €18 billion market appreciation, net inflows of €3 billion (€2 billion net inflows from Institutional clients and €1 billion net inflows from Retail clients), change in scope of €2 billion and a €2 billion favorable foreign exchange rate impact. The positive change in scope related to an increase in AUM from the acquisition in June 2014 of CPH Capital Fondsmaeglerselskab A/S, a Danish global equity asset management firm. Gross revenues decreased by €18 million (-2%) to €1,069 million(1). On a comparable basis, gross revenues increased by €28 million (+3%) primarily due to higher investment management fees (+5%) resulting from a 4% increase in average AUM, higher Institutional Research Services fees up 8%, partly offset by distribution fees (-10%) due to outflows leading to lower average AUM in Retail mutual funds which charge these fees. Net investment result decreased by €1 million (-58%) to €-2 million. On a constant exchange rate basis, net investment result decreased by €1 million (-65%). General expenses decreased by €23 million (-3%) to €-857 million. On a constant exchange rate basis, general expenses increased by €14 million (+2%) due to higher compensation expenses resulting from increased revenues. The underlying cost income ratio improved by 0.4 point to 76.8%. Income tax expenses decreased by €4 million (-7%) to €-54 million. On a constant exchange rate basis, income tax expenses decreased by €2 million (-3%) due to a lower effective rate as a result of a favorable geographical mix of earnings. Underlying earnings and adjusted earnings increased by €7 million (+9%) to €83 million. On a constant exchange rate basis, underlying earnings increased by €10 million (+14%). (1) €1,029 million after intercompany eliminations. Half Year 2014 Financial Report 64 I ACTIVITY REPORT AXA ownership of AllianceBernstein at June 30, 2014 was 63.6%, compared to 63.7% at December 31, 2013. The slight decrease was mainly due to the exercise of options. Net income increased by €3 million (+4%) to €80 million. On a constant exchange rate basis, net income increased by €7 million (+9%) mainly due to the change in adjusted earnings. Half Year 2014 Financial Report 65 I ACTIVITY REPORT AXA Investment Managers (“AXA IM”) (in Euro million) HY 2014 HY 2013 FY 2013 Gross revenues 707 828 1,638 Net investment result (6) (9) (12) Total revenues 700 819 1,626 General expenses Underlying earnings before tax Income tax expenses / benefits Minority interests Underlying earnings Group share Net capital gains or losses attributable to shareholders net of income tax Adjusted earnings Group share Profit or loss on financial assets (under FV option) & derivatives Exceptional operations (including discontinued operations) Goodwill and other related intangibles impacts Integration and restructuring costs Net income Group share (543) 158 (52) (5) 101 0 101 10 (1) 0 (1) 108 (631) 188 (65) (6) 118 (1) 117 6 0 0 (4) 120 (1,281) 345 (119) (11) 216 (1) 214 12 180 0 (6) 401 In order to provide a consistent analysis following the sale of AXA Private Equity (“AXA PE”) on September 30, 2013, commentaries are based on restated figures with all P&L aggregates from revenues to net income excluding AXA PE contribution in 2013. AXA PE underlying earnings amounted to €26 million in the first half of 2013. Comparable basis in the commentaries below refers to AXA PE exclusion in first half of 2013, constant foreign exchange rate restatement, distribution fees netting and fund expenses denetting. Assets under Management (\"AUM\") increased by €35 billion from year-end 2013 to €582 billion at the end of June 2014, mainly as a result of €26 billion combined market and foreign exchange rate impact and €11 billion net inflows. Net inflows of €11 billion in the first half of 2014 were driven by inflows both on (i) Main Fund (€+5 billion) mainly from Real Estate, and (ii) Third party (€+6 billion) mainly from Asian Joint Ventures and Fixed Income. Gross revenues decreased by €121 million (-15%) to €707 million(1). On a comparable basis, net revenues increased by €27 million (+5%) to €541 million, mainly driven by higher management fees (€+26 million or +6%) as a result of 3% increase in average assets and +0.5bp management fee, owing to a better product and client mix. Net investment result increased by €3 million (+31%) to €-6 million. On a comparable basis, net investment result was stable. General expenses decreased by €88 million (-14%) to €-543 million. On a comparable basis, general expenses increased by €20 million (+6%) mainly due to the non-recurrence of a €6 million net insurance receivable in 2013 and a non-recurring provision for risk of €11 million in 2014. (1) €563 million after intercompany eliminations. Half Year 2014 Financial Report 66 I ACTIVITY REPORT The underlying cost income ratio increased by 0.8 point to 70.5%. Excluding the above mentioned non- recurring expenses impacts in 2013 and 2014, and on a comparable basis, the underlying cost income ratio improved by 2.5 points. Income tax expenses decreased by €13 million (-20%) to €-52 million. On a comparable basis, income tax expenses decreased by €4 million (-7%) due to a more favorable country mix, partly offset by higher taxable results. Underlying earnings decreased by €17 million (-14%) to €101 million. On a comparable basis, underlying earnings increased by €8 million (+9%). Adjusted earnings decreased by €16 million (-14%) to €101 million. On a comparable basis, adjusted earnings increased by €8 million (+9%) in line with underlying earnings increase. Net income decreased by €12 million (-10%) to €108 million. On a comparable basis, net income increased by €15 million (+16%) driven by adjusted earnings increase, as well as a more favorable mark-to-market of fixed income funds. Half Year 2014 Financial Report 67 I ACTIVITY REPORT BANKING The following tables present the consolidated gross revenues, underlying earnings, adjusted earnings and the net income attributable to AXA’s banking activities for the periods indicated: Consolidated Gross Revenues (in Euro million) HY 2014 HY 2013 FY 2013 AXA Banks (a) 274 287 507 Belgium (b) 197 189 316 France 50 66 131 Hungary 16 19 37 Germany 11 11 22 Other (c) 3 2 Other 2 2 6 TOTAL 276 290 513 Intercompany transactions 12 4 11 Contribution to consolidated gross revenues 287 293 524 (a) Of which AXA Bank Europe and its branches: €213 million. (b) Includes commercial activities in Belgium and shared services of AXA Bank Europe (treasury and support functions). (c) Includes Slovakia and Czech Republic. Underlying, Adjusted earnings and Net Income (in Euro million) HY 2014 HY 2013 FY 2013 AXA Banks (a) 70 62 80 Belgium (b) 65 63 80 France 2 0 1 Hungary Germany 3 2 5 Other (c) (3) (6) Other (2) (2) (2) UNDERLYING EARNINGS 68 61 78 Net realized capital gains or losses attributable to shareholders (1) 0 1 ADJUSTED EARNINGS 67 61 79 Profit or loss on financial assets (under Fair Value option) & derivatives (14) (13) (35) Exceptional operations (including discontinued operations) (33) (27) (37) Goodwill and related intangibles impacts Integration and restructuring costs (1) (1) (15) NET INCOME 19 20 (8) (a) of which AXA Bank Europe and its branches would amount to €65 million for half year 2014 and €60 million for half year 2013. (b) Includes commercial activities in Belgium for €47 million and shared services of AXA Bank Europe (treasury and support functions) for €18 million. (c) Includes Slovakia and Czech Republic. Half Year 2014 Financial Report 68 I ACTIVITY REPORT Belgium Net banking revenues increased by €8 million (+4%) to €197 million. Operating net banking revenues(1) were stable, as commercial margin increase (€+11 million) was offset by reduced reinvestment revenues due to lower credit spreads (€-11 million). Underlying earnings increased by €3 million (+4%) to €65 million due to lower provisions for loan losses (€+7 million) and lower distribution commissions (€+2 million), partly offset by a regulatory increase of levy rate on retail savings (€-6 million). Adjusted earnings increased by €2 million (+3%) to €66 million due to the increase of underlying earnings. Net income increased by €12 million (+25%) to €58 million. Positive evolution of adjusted earnings (€+2 million) and fair value of own debt (€+24 million), was partly offset by change in fair value of interest rate derivatives (€-16 million). Excluding charges paid by the foreign branches to the Belgian Head Office, net income of Belgian activities stood at €51 million, including realized capital gains and changes in fair values of €46 million. France Net banking revenues decreased by €16 million (-24%) to €50 million. Operating net banking revenues(1) increased by €2 million to €64 million, mainly due to higher interest income on retail loans primarily mortgages, as a consequence of increasing in-force business following the strong level of new credit production during the last two years, partly mitigated by higher commissions paid on new refinancing operations. Underlying earnings increased by €2 million to €2 million, following the rise in operating net banking revenues, while administrative expenses and cost of risks were globally stable. Adjusted earnings increased by €1 million to €1 million. Net income decreased by €9 million to €-7 million, as a result of the unfavorable impact from the decrease in interest rates on hedging instruments not eligible to hedge-accounting, partly offset by the increase in adjusted earnings. Hungary Based on the Hungarian Supreme court decision on June 16th, the Hungarian government enacted a legislation in July 2014 to retroactively correct bid-ask spread applied to retail forex loans and to abolish intransparant unilateral changes to interest rates and fees applied by the banks. As a result, a provision of €-18 million was set up to face the potential costs. Net income were decreased by €17 million at €-33 million. (1) Before intercompany eliminations and before realized capital gains/losses or changes in fair value of fair value option assets and of hedging instruments. Half Year 2014 Financial Report 69 I ACTIVITY REPORT Germany Net banking revenues remained stable at €11 million. Underlying earnings were stable at €3 million. Adjusted earnings and net income were stable at €3 million. Half Year 2014 Financial Report 70 I ACTIVITY REPORT HOLDINGS AND OTHER COMPANIES The Holdings and other companies consist of AXA’s non-operating companies, including mainly the AXA parent company, AXA France Assurance, AXA Financial, AXA United Kingdom Holdings, AXA Germany Holdings, AXA Belgian Holding, CDOs and real estate companies. Underlying, Adjusted earnings and Net Income (in Euro million) HY 2014 HY 2013 FY 2013 AXA (360) (283) (589) Other French holding companies (26) (28) (31) Foreign holding companies (101) (130) (232) Other 0 1 2 UNDERLYING EARNINGS (486) (441) (851) Net realized capital gains or losses attributable to shareholders (6) (28) (31) ADJUSTED EARNINGS (493) (469) (882) Profit or loss on financial assets (under Fair Value option) & derivatives (21) 23 (64) Exceptional operations (including discontinued operations) (39) (10) (22) Goodwill and related intangibles impacts 0 0 0 Integration and restructuring costs (5) (7) (0) NET INCOME (558) (464) (969) AXA SA(1) Underlying earnings decreased by €79 million to €-360 million mainly due to: increased general expenses (€-37 million) in order to support advertising campaigns across the Group and invest in our digital capabilities; lower dividends received from non-consolidated entities (€-17 million); an increase in the French tax of 3% on dividends (€-13 million) due to a higher dividend paid. Adjusted earnings decreased by €86 million to €-371 million mainly driven by underlying earnings evolution. Net income decreased by €186 million to €-407 million. Excluding profits linked to the sale of the Group’s Canadian operations in respect of the deferred contingent consideration (nil in 2014 vs. €+8 million in 2013), net income decreased by €178 million mainly driven by: €-82 million mainly from a change in fair value of interest rate and foreign exchange economic derivatives not eligible for hedge accounting under IAS 39; €-86 million from adjusted earnings evolution. Other French holding companies AXA FRANCE ASSURANCE Underlying earnings increased by € 3 million (+15%) to €-20 million mainly due to dividends received from a non-consolidated entity (€+2 million) and lower taxes (€+1 million) resulting from a decrease in intercompany dividends. (1) All the figures are after tax. Half Year 2014 Financial Report 71 I ACTIVITY REPORT Adjusted earnings and net income increased by €3 million (+15%) to €-20 million in line with the increase in underlying earnings. OTHER FRENCH HOLDINGS Underlying earnings and adjusted earnings were stable at €-6 million. Net income increased by €8 million to €-19 million mainly due to a decrease in costs linked to the restructuring of the participation in Bharti AXA General Insurance. Foreign Holding Companies AXA FINANCIAL INC. Underlying earnings increased by €9 million (+11%) to €-69 million. On a constant exchange rate basis, underlying earnings increased by €6 million (+7%) mainly reflecting the impact of lower share-based compensation expenses. Adjusted earnings increased by €9 million (+11%) to €-69 million. On a constant exchange rate basis, adjusted earnings increased by €6 million (+7%), in line with underlying earnings evolution. Net income increased by €22 million (+22%) to €-78 million. On a constant exchange rate basis, net income increased by €19 million (+19%) reflecting the adjusted earnings evolution and a less unfavorable change in fair value of cross currency swaps. AXA UK HOLDINGS Underlying earnings increased by €6 million (+59%) to €-4 million. On a constant exchange rate basis, underlying earnings increased by €6 million mainly due to lower financing costs (€+3 million) and lower pension costs reflecting the reduction in pension deficit (€+5 million), partly offset by a reduction in investment income (€-3 million). Adjusted earnings increased by €11 million (+99%) to €0 million. On a constant exchange rate basis, adjusted earnings increased by €11 million (+99%) due to the increase in underlying earnings and realized capital gains. Net Income increased by €24 million (+118%) to €4 million. On a constant exchange rate basis, net income increased by €24 million (+117%) mainly driven by the improvement in adjusted earnings, a favorable change in the fair value of derivatives (€+7 million) due to foreign exchange and interest rate movements and non- repeat of 2013 restructuring costs (€+5 million). GERMAN HOLDING COMPANIES Underlying earnings increased by €3 million (+40%) to €-5 million mainly due to a higher investment result. Adjusted earnings increased by €28 million (+86%) to €-4 million mainly due to the non-repeat of impairment charges on real estate in the first half 2013. Net income increased by €31 million (+79%) to €-8 million mainly driven by adjusted earnings evolution. Half Year 2014 Financial Report 72 I ACTIVITY REPORT BELGIAN HOLDING COMPANY Underlying earnings increased by €1 million (+20%) to €-5 million. Adjusted earnings increased by €1 million (+11%) to €-5 million. Net income increased by €1 million (+12%) to €-4 million. MEDITERRANEAN AND LATIN AMERICAN REGION HOLDINGS Underlying earnings and adjusted earnings increased by €6 million (+22%) to €-19 million. On a constant exchange rate basis, underlying earnings increased by €6 million (+22%) mainly due by a higher investment income from interest rate hedging derivatives. Net income decreased by €2 million (-8%) to €-24 million. On a constant exchange rate basis, net income decreased by €2 million (-8%) mainly driven by adjusted earnings more than offset by change in fair value of hedging derivatives. Half Year 2014 Financial Report 73 I ACTIVITY REPORT OUTLOOK In a context of a challenging economic environment and low interest rates, AXA continues to successfully execute on its Ambition AXA plan. AXA is confident about the growth momentum for the year 2014 during which Life & Savings new business volumes and Property & Casualty revenues are expected to increase. The Asset Management business should continue to benefit from a good momentum driven by a favorable investment performance and a strong distribution footprint, whilst remaining sensitive to the evolution of financial markets. Ambition AXA is an important milestone of our long-term journey towards becoming a customer-centric organization, and thus further digital oriented. AXA will also focus on the more profitable market segments and faster growing geographies as well as on delivering the planned efficiency measures. This should enable to create lasting shareholder value and offer an attractive return. Half Year 2014 Financial Report 74 I ACTIVITY REPORT GLOSSARY The split between high growth market and mature market is detailed below: The notion of High Growth market includes the following countries: Central & Eastern countries (Poland, Czech Republic, Slovakia, Ukraine, Russia), Hong Kong, South-East Asia (Singapore, Indonesia, Thailand, Philippines, Malaysia), India, China, and the Mediterranean and Latin American Region (Morocco, Turkey, Gulf, Mexico, Lebanon, Colombia), excluding Direct operations. The notion of Mature Market includes the following countries: the United States, the United Kingdom, Benelux, Germany, Switzerland, Japan, Italy, Spain, Portugal, Greece and France. COMPARABLE BASIS FOR REVENUES AND ANNUALIZED PREMIUMS EQUIVALENT On a comparable basis means that the data for the current period were restated using the prevailing foreign currency exchange rates for the same period of prior year (constant exchange rate basis). It also means that data in one of the two periods being compared were restated for the results of acquisitions, disposals and business transfers (constant structural basis) and for changes in accounting principles (constant methodological basis). ADJUSTED EARNINGS Adjusted earnings represent the net income (Group share) before the impact of: Exceptional operations (primarily change in scope and discontinued operations) Integration and restructuring costs related to material newly acquired companies as well as restructuring and associated costs related to productivity improvement plans Goodwill and other related intangibles, and Profit or loss on financial assets accounted for under fair value option (excluding assets backing liabilities for which the financial risk is borne by the policyholder), foreign exchange impacts on assets and liabilities, and derivatives related to invested assets. Derivatives related to invested assets: Include all foreign exchange derivatives, except the ones related to currency options in earnings hedging strategies which are included in underlying earnings, Exclude derivatives related to insurance contracts evaluated according to the “selective unlocking” accounting policy, And also exclude derivatives involved in the economic hedging of realized gains and impairments of equity securities and real estate backing general account and shareholders’ funds, for which cost at inception, intrinsic value and pay-off flow through adjusted earnings, and only time value flows through net income when there is no intention to sell the derivatives in the short term (if not, flows through adjusted earnings). Underlying earnings Underlying earnings correspond to adjusted earnings excluding net capital gains or losses attributable to shareholders. Net capital gains or losses attributable to shareholders include the following elements net of tax: Realized gains and losses and change in impairment valuation allowance (on assets not designated under fair value option or trading assets), Cost at inception, intrinsic value and pay-off of derivatives involved in the economic hedging of realized gains and impairments of equity securities and real estate backing general account and shareholders’ funds, Related impact on policyholder participation (Life & Savings business), Half Year 2014 Financial Report 75 I ACTIVITY REPORT DAC and VBI amortization or other reactivity to those elements if any (Life & Savings business) and net of hedging if any. Earnings per share Earnings per share (EPS) represent AXA's consolidated earnings (including interest charges related to undated debts recorded through shareholders’ equity), divided by the weighted average number of outstanding ordinary shares. Diluted earnings per share (diluted EPS) represent AXA's consolidated earnings (including interest charges related to undated debts recorded through shareholders’ equity), divided by the weighted average number of outstanding ordinary shares, on a diluted basis (that is to say including the potential impact of all outstanding dilutive stock options being exercised performance shares, and conversion of existing convertible debt into shares, provided that their impact is not anti-dilutive). Return On Equity (“ROE”) The calculation is prepared with the following principles: For net income ROE: Calculation is based on consolidated financial statements, i.e. shareholders’ / “Undated equity including undated subordinated debt (“Super Subordinated Debts” TSS Subordinated Debts” TSDI) and Other Comprehensive Income “OCI”, and net income not reflecting any interest charges on TSS / TSDI. For adjusted and underlying ROE: o All undated subordinated debts (TSS / TSDI) are treated as financing debt, thus excluded from shareholders’ equity Interest charges on TSS / TSDI are deducted from earnings o o OCI is excluded from the average shareholders’ equity. Life & Savings Margin Analysis Life & Savings margin analysis is presented on an underlying basis. Even though the presentation of Margin Analysis is not the same as the Statement of Income (underlying basis), it is based on the same GAAP measures as used to prepare the Statement of Income in accordance with IFRS. As a result, the operating income under the Margin Analysis is equal to that reported in AXA’s Statement of Income for the segment. There are certain material differences between the detailed line-by-line presentation in the Statement of Income and the components of Margin Analysis as set out below. For insurance contracts and investment contracts with Discretionary Participation Features (DPF): o Gross premiums (net of deposits), fees and other revenues are allocated in the Margin Analysis based on the nature of the revenue between “Fees and Revenues” and “Net Technical Margin”. o Policyholders’ interest in participating contracts is reflected as a change in insurance benefits in the Statement of Income. In the Margin Analysis, it is allocated to the related margin, i.e. primarily “Investment Margin” and “Net Technical Margin”. o The “Investment margin” represents the net investment result in the Statement of Income and is adjusted to take into account the related policyholders’ participation (see above) as well as changes in specific reserves linked to invested assets’ returns and to exclude the fees on (or contractual charges included in) contracts with the financial risk borne by policyholders, which are included in “Fees and Revenues”. o Change in URR (Unearned Revenues Reserves – capitalization net of amortization) is presented in the line “Change in unearned premiums net of unearned revenues and fees” in the underlying Statement of Income, whereas it is located in the line “Fees & Revenues” in the Margin analysis. For investment contracts without DPF: o Deposit accounting is applied. As a consequence, fees and charges related to these contracts are presented in the underlying Statement of Income within Gross consolidated revenues on a separate line, and in Margin analysis in the lines “Fees & Revenues” and “Net Technical margin”. Half Year 2014 Financial Report 76 I ACTIVITY REPORT o Change in UFR (Unearned Fees Reserves - capitalization net of amortization) is presented in the line “Change in unearned premiums net of unearned revenues & fees” in the underlying Statement of Income, whereas it is located in the line “Fees & Revenues” in the Margin analysis. Underlying Investment margin includes the following items: Net investment income Interests and bonuses credited to policyholders and unallocated policyholder bonuses (and the change in specific reserves purely linked to invested assets returns) related to the net investment income. Underlying Fees & Revenues include: Revenues derived from mutual fund sales (which are part of consolidated revenues), Loadings charged to policyholders on premiums / deposits and fees on funds under management for separate account (Unit-Linked) business, Loadings on (or contractual charges included in) premiums / deposits received on all general account product lines, Deferral income such as capitalization net of amortization of URR (Unearned Revenue Reserve) and UFR (Unearned Fee Reserve), Other fee revenues, e.g., fees received on financial planning or sales of third party products. Underlying Net Technical margin includes the following components: Mortality/morbidity margin: The amount charged to the policyholder in respect of mortality/morbidity for the related period less benefits and claims. It is equal to the difference between income for assuming risk and the actual cost of benefits. This margin does not include the claims handling costs and change in claims handling cost reserves, Surrender margin: The difference between the benefit reserve and the surrender value paid to the policyholder in the event of early contract termination, GMxB (Variable Annuity guarantees) active financial risk management is the net result from GMxB lines corresponding to explicit charges related to these types of guarantees less cost of hedge. It also includes the unhedged business result, Policyholder bonuses if the policyholder participates in the risk margin, Ceded reinsurance result, Other changes in insurance reserves are all the reserves strengthening or release coming from changes in valuation assumptions, additional reserves for mortality risk and other technical impacts such as premium deficiency net of derivative if any. Underlying Expenses are: Acquisition expenses, including commissions and general expenses allocated to new business, related to insurance products as well as to other activities (e.g., mutual fund sales), Capitalization of acquisition expenses linked to new business: Deferred Acquisition Costs (DAC) and net rights to future management fees only for investment contracts without DPF, Amortization of acquisition expenses on current year and prior year new business, including the impact of interest capitalized: amortization charge for Deferred Acquisition Costs (DAC) and net rights to future management fees only for investment contracts without DPF, Administrative expenses, Claims handling costs, Policyholder bonuses if the policyholder participates in the expenses of the company. Underlying VBI amortization includes VBI (Value of Purchased Life Business In-force) amortization related to underlying margins, as well as amortization of other intangibles related to the in-force business Life & Savings underlying cost income ratio: Underlying expenses plus underlying VBI amortization divided by \"underlying\" operating margin, where \"Underlying\" operating margin is the sum of (i) Underlying Investment margin; (ii) Underlying Fees and revenues, and (iii) Underlying Net technical Margin (all items defined above). Half Year 2014 Financial Report 77 I ACTIVITY REPORT Property & Casualty (including AXA Corporate Solutions Assurance) Underlying net investment result includes the net investment income less the recurring interests credited to insurance annuity reserves Underlying net technical result is the sum of the following components: Earned premiums, gross of reinsurance, Claims charges, gross of reinsurance, Change in claims reserves, including claims handling costs reserves, gross of reinsurance, excluding the recurring interests credited to insurance annuity reserves, Claims handling costs, Net result of ceded reinsurance. Current accident year loss ratio net of reinsurance is the ratio of: current year claims charge gross of reinsurance + claims-handling costs + result of reinsurance ceded on current accident year, excluding the recurring interests credited to the insurance annuity reserves, to Earned revenues, gross of reinsurance. All accident year loss ratio net of reinsurance is the ratio of: all accident years claims charge gross of reinsurance + claims-handling costs + result of reinsurance ceded on all accident years excluding the recurring interests credited to the insurance annuity reserves, to Earned revenues, gross of reinsurance. Underlying expense ratio is the ratio of: Underlying expenses (excluding claims handling costs), to Earned revenues, gross of reinsurance. Underlying expenses include two components: expenses (including commissions) related to acquisition of contracts (with the related acquisition ratio) and all other expenses (with the related administrative expense ratio). Underlying expenses exclude customer intangible amortization and integration costs related to material newly acquired companies. The enlarged expense ratio is the sum of the expense ratio and claims handling cost ratio. The underlying combined ratio is the sum of the underlying expense ratio and the all accident year loss ratio. Asset Management Net New Money: Inflows of client money less outflows of client money. Net New Money measures the impact of sales efforts, product attractiveness (mainly dependent on performance and innovation), and the general market trend in investment allocation. Underlying Cost Income Ratio: (general expenses net of distribution revenues) / (gross revenues excluding distribution revenues). Assets Under Management (AUM) are defined as the assets whose management has been delegated by their owner to an asset management company such as AXA Investment Managers and AllianceBernstein. AUM only includes funds and mandates which generate fees and exclude double counting. Half Year 2014 Financial Report 78 I ACTIVITY REPORT Banking Net New Money is a banking volume indicator. It represents the net cash flows of customers’ balances in the bank, with cash inflows (collected money) and cash outflows (exiting money). It includes market effect and capitalized interests over the period. Net operating revenues are disclosed before intercompany eliminations and before realized capital gains/losses or changes in fair value of « fair-value-P&L » assets and of hedging instruments. Half Year 2014 Financial Report 79 I CONSOLIDATED FINANCIAL STATEMENT HALF-YEAR 2014 II Consolidated financial statements / Half Year 2014 Half -Year 2014 Financial Report 80 II CONSOLIDATED FINANCIAL STATEMENT HALF-YEAR 2014 II.1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................................... 82 II.2 CONSOLIDATED STATEMENT OF INCOME ........................................................................................... 84 II.3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME .......................................................... 85 II.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................... 86 II.5 CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................................. 88 NOTE 1 Accounting principles ........................................................................................................................... 90 1.1 General information ............................................................................................................................ 90 1.2 General accounting principles ............................................................................................................ 90 NOTE 2 Scope of consolidation ........................................................................................................................ 93 2.1 Consolidated companies..................................................................................................................... 93 2.2 Consolidated entities relating to specific operations ........................................................................... 96 NOTE 3 Consolidated statement of income by segment .................................................................................. 97 3.1 Consolidated statement of income by segment .................................................................................. 98 NOTE 4 Transactions in consolidated entities ................................................................................................ 100 4.1 TIAN PING insurance ....................................................................................................................... 100 4.2 COLPATRIA's insurance operations in Colombia ............................................................................ 100 4.3 Hungarian Life & Savings Insurance operations .............................................................................. 100 4.4 MONY Portfolio transaction .............................................................................................................. 100 NOTE 5 Investments ....................................................................................................................................... 102 5.1 Breakdown of investments ................................................................................................................ 102 5.2 Investment in real estate properties .................................................................................................. 103 5.3 Unrealized gains and losses on financial investments ..................................................................... 104 5.4 Financial assets subject to impairment ............................................................................................. 105 5.5 Investments recognized at fair value ................................................................................................ 106 NOTE 6 Shareholders’ equity and minority interests ...................................................................................... 108 6.1 Impact of transactions with shareholders ......................................................................................... 108 6.2 Comprehensive income for the period .............................................................................................. 110 6.3 Change in minority interests ............................................................................................................. 113 NOTE 7 Financing debt ................................................................................................................................... 114 NOTE 8 Net income per ordinary share .......................................................................................................... 115 Half -Year 2014 Financial Report 81 II CONSOLIDATED FINANCIAL STATEMENT HALF-YEAR 2014 II.1 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (in Euro million) Notes June 30, 2014 December 31, 2013 Restated (a) (b) January 1, 2013 Restated (a) (b) Goodwill 15,263 14,819 15,754 Value of purchased business in force (c) 2,317 2,382 2,685 Deferred acquisition costs and equivalent 19,925 19,345 19,042 Other intangible assets 3,098 3,159 3,349 Intangible assets 40,603 39,705 40,830 Investments in real estate properties 18,014 17,479 17,019 Financial investments 451,086 426,310 441,573 Assets backing contracts where the financial risk is borne by policyholders (d) 166,556 162,186 147,162 5 Investments from insurance activities 635,656 605,976 605,754 5 Investments from banking and other activities 36,743 35,790 33,298 Investments accounted for using the equity method 1,929 1,428 1,347 Reinsurers' share in insurance and investment contracts liabilities 18,054 17,808 10,620 Tangible assets 1,277 1,259 1,457 Deferred policyholders' participation assets 4 Deferred tax assets 1,683 2,240 3,054 Other assets 2,959 3,499 4,516 Receivables arising from direct insurance and inward reinsurance operations 15,518 14,096 14,926 Receivables arising from outward reinsurance operations 971 710 745 Receivables - current tax 1,885 1,885 1,855 Other receivables 13,830 12,926 15,315 Receivables 32,204 29,617 32,841 Assets held for sale including discountinued operations 183 164 181 Cash and cash equivalents 21,756 21,455 30,375 TOTAL ASSETS 790,088 755,441 759,762 All invested assets are shown net of related derivative instruments impact. (a) Before 2013, AXA Japan closed its full year accounts at September 30. Given significant movements in foreign exchange rates between September 30, 2012 and December 31, 2012, opening balance sheet items at January 1, 2013 were translated using December 31, 2012 exchange rates. Starting with 2013 annual accounts, AXA Life Japan aligned its closing date with the Group calendar year. (b) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (c) Amounts are gross of tax. (d) Includes assets backing contracts where the financial risk is borne by policyholders with Guaranteed Minimum features. Half -Year 2014 Financial Report 82 II CONSOLIDATED FINANCIAL STATEMENT HALF-YEAR 2014 (in Euro million) Notes June 30, 2014 December 31, 2013 Restated (a) (b) Share capital and capital in excess of nominal value 26,239 26,199 Reserves and translation reserve 29,657 22,242 Net consolidated income - Group share (c) 3,008 4,482 Shareholders’ equity – Group share 58,903 52,923 Minority interests 2,597 2,520 6 TOTAL SHAREHOLDERS' EQUITY 61,500 55,444 Subordinated debt 6,814 7,986 Financing debt instruments issued 1,553 1,568 Financing debt owed to credit institutions 841 853 7 Financing debt 9,208 10,407 Liabilities arising from insurance contracts 361,557 348,334 Liabilities arising from insurance contracts where the financial risk is borne by policyholders (d) 129,900 125,593 Total liabilities arising from insurance contracts 491,457 473,928 Liabilities arising from investment contracts with discretionary participating features 34,041 33,850 Liabilities arising from investment contracts with no discretionary participating features 97 99 Liabilities arising from investment contracts with discretionary participating features and where the financial risk is borne by policyholders 3,946 4,243 Liabilities arising from investment contracts with no discretionary participating features and where the financial risk is borne by policyholders 33,093 32,682 Total liabilities arising from investment contracts 71,177 70,874 Unearned revenue and unearned fee reserves 3,039 2,999 Liabilities arising from policyholders' participation 36,205 26,271 Derivative instruments relating to insurance and investment contracts (1,639) (1,086) LIABILITIES ARISING FROM INSURANCE AND INVESTMENT CONTRACTS 600,238 572,985 Liabilities arising from banking activities (e) 36,297 35,375 Provisions for risks and charges 11,026 10,393 Deferred tax liabilities 5,394 4,223 Minority interests of consolidated investment funds and puttable instruments held by minority interest holders 8,381 7,795 Other debt instruments issued, notes and bank overdrafts (e) 2,848 2,550 Payables arising from direct insurance and inward reinsurance operations 6,717 8,305 Payables arising from outward reinsurance operations 12,297 12,225 Payables – current tax 1,108 968 Collateral debts relating to investments under a lending agreement or equivalent 20,328 20,909 Other payables 14,745 13,862 Payables 66,424 66,615 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 790,088 755,441 (a) Before 2013, AXA Japan closed its full year accounts at September 30. Given significant movements in foreign exchange rates between September 30, 2012 and December 31, 2012, opening balance sheet items at January 1, 2013 were translated using December 31, 2012 exchange rates. Starting with 2013 annual accounts, AXA Life Japan aligned its closing date with the Group calendar year. (b) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (c) AXA Life Japan aligned its closing date with the Group calendar year starting with 2013 annual accounts. Therefore, its contribution to the AXA consolidated result for the 2013 annual accounts exceptionally covered a period of fifteen months. (d) Includes liabilities arising from contracts where the financial risk is borne by policyholders with Guaranteed Minimum features. (e) Amounts are shown net of related derivative instruments impact. Half -Year 2014 Financial Report 83 January 1, 2013 Restated (a) (b) 25,549 28,058 n/a 53,606 2,371 55,977 7,317 2,514 831 10,662 362,292 113,921 476,213 36,350 251 4,080 29,983 70,664 2,897 31,357 (2,053) 579,079 33,495 11,951 5,170 4,005 3,123 8,937 5,350 1,170 24,397 16,446 63,428 759,762 II CONSOLIDATED FINANCIAL STATEMENT HALF-YEAR 2014 II.2 CONSOLIDATED STATEMENT OF INCOME (in Euro million, except EPS in Euro) Notes June 30, 2014 June 30, 2013 Restated (a) Gross written premiums 46,944 47,154 Fees and charges relating to investment contracts with no participating features 159 133 Revenues from insurance activities 47,103 47,287 Net revenues from banking activities 286 291 Revenues from other activities 2,316 2,451 Revenues (b) 49,705 50,030 Change in unearned premiums net of unearned revenues and fees (4,269) (3,820) Net investment income (c) 7,600 5,949 Net realized gains and losses relating to investments at cost and at fair value through shareholders' equity (d) 1,107 1,405 Net realized gains and losses and change in fair value of investments at fair value through profit and loss (e) 6,884 6,500 of which change in fair value of assets with financial risk borne by policyholders (f) 5,613 8,070 Change in investments impairment (g) (221) (390) Net investment result excluding financing expenses 15,370 13,464 Technical charges relating to insurance activities (f) (46,639) (45,261) Net result from outward reinsurance (363) (935) Bank operating expenses (50) (67) Acquisition costs (4,606) (4,626) Amortization of the value of purchased business in force (58) (59) Administrative expenses (4,472) (4,768) Change in goodwill impairment and other intangible assets impairment (69) (46) Other income and expenses (114) (109) Other operating income and expenses (56,371) (55,872) Income from operating activities before tax 4,435 3,801 Income from investment accounted for using the equity method 99 65 Financing debts expenses (h) (365) (348) Net income from operating activities before tax 4,169 3,518 Income tax (1,010) (897) Net operating income 3,159 2,621 Net consolidated income after tax 3,159 2,621 Split between : Net consolidated income - Group share 3,008 2,467 Net consolidated income - Minority interests 151 154 8 Earnings per share 1.18 0.98 8 Fully diluted earnings per share 1.18 0.97 (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Gross of reinsurance. (c) Net of investment management costs and including gains/losses from derivatives hedging variable annuities. (d) Includes impairment releases on investments sold. (e) Includes realized and unrealized forex gains and losses relating to investments at cost and at fair value through shareholders' equity. (f) Change in fair value of assets with financial risk borne by policyholders is offset by a balancing entry in technical charges relating to insurance activities. (g) Excludes impairment releases on investments sold. (h) Includes net balance of income and expenses related to derivatives on financing debt (however excludes change in fair value of these derivatives). Half -Year 2014 Financial Report 84 II CONSOLIDATED FINANCIAL STATEMENT HALF-YEAR 2014 II.3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in Euro million) June 30, 2014 June 30, 2013 Reserves relating to changes in fair value through shareholders' equity 4,047 Translation reserves 546 Items that may be reclassified subsequently to Profit or Loss 4,593 Employee benefits actuarial gains and losses (455) Items that will not be reclassified subsequently to Profit or Loss (455) Net gains and losses recognized directly through shareholders' equity 4,138 Net consolidated income 3,159 Split between: Net consolidated income - Group share 3,008 Net consolidated income - Minority interests 151 TOTAL COMPREHENSIVE INCOME (CI) 7,297 Split between: Total comprehensive income - Group share 7,033 Total comprehensive income - Minority interests 263 Amounts are presented net of tax, policyholders’ participation and other shadow accounting related movements. Half -Year 2014 Financial Report 85 (2,526) (1,000) (3,526) 325 325 (3,201) 2,621 2,467 154 (580) (731) 151 II CONSOLIDATED FINANCIAL STATEMENT HALF-YEAR 2014 II.4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Attributable to shareholders Share Capital Other reserves (in Euro million, except for number of shares and nominal value) Number of shares (in thousands) Nominal value (in Euros) Share Capital Capital in excess of nominal value Treasury shares Reserves relating to the change in fair value of financial instruments available for sale Reserves relating to the change in fair value of hedge accounting derivatives (cash flow hedge) Other (b) Translation reserves Undistributed profits and other reserves Shareholders' Equity Group share Minority interests Restated (a) Shareholders 'equity opening January 1, 2014 2,417,865 2.29 5,537 21,170 (188) 8,488 162 5,418 (4,973) 17,310 52,923 2,521 Capital Capital in excess of nominal value Equity - share based compensation Treasury shares Others reserves - transaction on treasury shares Equity component of compound financial instruments Undated subordinated debt Financial expenses - Undated subordinated debt Others (including impact on change in scope) (c) 3,855 - - - - - - - - 2.29 - - - - - - - - 9 - - - - - - - - 31 15 - - - - - - - - 28 - - - - - - - - - - - - - - - - - - - - - - - - (44) - 962 (148) - - - - - - - - - - - - - - - - 53 9 31 15 28 (44) - 962 (148) 53 - - - - - - - (187) Dividends paid (1,960) (1,960) Impact of transactions with shareholders 3,855 2.29 9 46 28 770 (1,906) (1,053) (187) Reserves relating to changes in fair value through shareholders' equity Translation reserves Employee benefits actuarial gains and losses Net consolidated income Total Comprehensive Income (CI) - - - - - - - - - - 3,943 - - 3,943 8 - - 8 132 - - 132 398 - - 398 (455) 3,008 2,553 3,950 530 (455) 3,008 7,033 97 16 (0) 151 263 Shareholders' equity closing June 30, 2014 2,421,720 2.29 5,546 21,216 (160) 12,430 170 6,320 (4,575) 17,957 58,903 2,597 NB : amounts are presented net of impacts of shadow accounting and its effects on policyholders' participation, deferred acquisition costs, and value of business in force. (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Mainly undated subordinated debts (TSS, TSDI), and equity components of compounded financial instruments (e.g convertible bonds) (see Note 6.1.1.c). (c) Including changes in ownership interest in consolidated subsidiaries without losing control. Half -Year 2014 Financial Report 86 II CONSOLIDATED FINANCIAL STATEMENT HALF-YEAR 2014 Attributable to shareholders Share Capital Other reserves (in Euro million, except for number of shares and nominal value) Number of shares (in thousands) Nominal value (in Euros) Share Capital Capital in excess of nominal value Treasury shares Reserves relating to the change in fair value of financial instruments available for sale Reserves relating to the change in fair value of hedge accounting derivatives (cash flow hedge) Other (b) Translation reserves Undistributed profits and other reserves Shareholders' Equity Group share Minority interests Restated (a) Shareholders 'equity opening January 1, 2013 2,388,611 2.29 5,470 20,749 (364) 10,887 134 5,735 (2,889) 13,885 53,606 2,371 Capital Capital in excess of nominal value Equity - share based compensation Treasury shares Others reserves - transaction on treasury shares Equity component of compound financial instruments Undated subordinated debt Financial expenses - Undated subordinated debt Others (including impact on change in scope) (c) 3,254 - - - - - - - - 2.29 - - - - - - - - 7 - - - - - - - - 28 23 - - - - - - - - 165 - - - - - - - - - - - - (0) - - - - - - - - - - - (19) - 252 (144) - - - - - - - - (0) - - - - - - - (1) 7 28 23 165 (19) - 252 (144) (1) - - - - - - - (71) Dividends paid (1,720) (1,720) Impact of transactions with shareholders 3,254 2.29 7 51 165 (0) 90 (0) (1,721) (1,408) (71) Reserves relating to changes in fair value through shareholders' equity (2,573) 53 (2,519) (6) Translation reserves Employee benefits actuarial gains and losses Net consolidated income Total Comprehensive Income (CI) - - - - - - - - - - - - (2,573) - - 53 (155) - - (155) (848) - - (848) 324 2,467 2,791 (1,003) 324 2,467 (731) 3 0 154 151 Shareholders' equity closing June 30, 2013 2,391,865 2.29 5,477 20,800 (199) 8,314 187 5,670 (3,736) 14,955 51,468 2,450 NB: amounts are presented net of impacts of shadow accounting and its effects on policyholders' participation, deferred acquisition costs, and value of business in force. (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Mainly undated subordinated debts (TSS, TSDI), and equity components of compounded financial instruments (e.g convertible bonds) (see Note 6.1.2.c). (c) Including changes in ownership interest in consolidated subsidiaries without losing control. Half -Year 2014 Financial Report 87 II Avec et sans PB discrétionnaire III CONSOLIDATED FINANCIAL STATEMENT HALF-YEAR 2014 II.5 CONSOLIDATED STATEMENT OF CASH FLOWS (in Euro million) June 30, 2014 June 30, 2013 Restated (a) Operating income including discontinued operation before tax 4,169 3,518 Net amortization expense (b) 278 357 Change in goodwill impairment and other intangible assets impairment (c) 21 Net change in deferred acquisition costs and equivalent (795) (781) Net increase / (write back) in impairment on investments, tangible and other intangible assets 234 416 Change in fair value of investments at fair value through profit or loss (7,639) (10,037) Net change in liabilities arising from insurance and investment contracts (d) 14,230 11,875 Net increase / (write back) in other provisions (e) (57) (4) Income from investment accounted for using the equity method (99) (65) Adjustment of non cash balances included in the operating income before tax 6,173 1,761 Net realized investment gains and losses (364) 2,054 Financing debt expenses 365 348 Adjustment for reclassification to investing or financing activities 1 2,401 Dividends recorded in profit or loss during the period (1,694) (1,692) Investment income & expense recorded in profit or loss during the period (f) (6,537) (4,822) Adjustment of transactions from accrued to cash basis (8,230) (6,514) Net cash impact of deposit accounting 773 858 Dividends and interim dividends collected 1,833 1,922 Investment income (f) 9,572 6,726 Investment expense (excluding interests on financing and undated subordinated debts, margin calls and others) (2,010) (1,478) Net operating cash from banking activities Change in operating receivables and payables Net cash provided by other assets and liabilities (g) Tax expenses paid (902) (2,695) (1,679) (501) 76 (2,100) (2,014) (764) Other operating cash impact and non cash adjustment 154 291 Net cash impact of transactions with cash impact not included in the operating income before tax 4,545 3,517 NET CASH PROVIDED / (USED) BY OPERATING ACTIVITIES 6,657 4,684 Purchase of subsidiaries and affiliated companies, net of cash acquired (483) (17) Disposal of subsidiaries and affiliated companies, net of cash ceded 33 5 Net cash related to changes in scope of consolidation (450) (12) Sales of debt instruments (g) 28,601 30,646 Sales of equity instruments and non consolidated investment funds (g) (h) 12,763 10,675 Sales of investment properties held directly or not (g) 506 631 Sales and/or repayment of loans and other assets (g) (i) 13,131 8,255 Net cash related to sales and repayments of investments (g) (h) (i) 55,001 50,206 Purchases of debt instruments (g) (27,727) (32,009) Purchases of equity instruments and non consolidated investment funds (g) (h) (13,140) (12,005) Purchases of investment properties held direct or not (g) (1,067) (1,236) Purchases and/or issues of loans and other assets (h) (i) (14,653) (12,416) Net cash related to purchases and issuance of investments (g) (h) (i) (56,587) (57,666) Sales of tangible and intangible assets 1 4 Purchases of tangible and intangible assets (162) (200) Net cash related to sales and purchases of tangible and intangible assets (161) (196) Increase in collateral payable / Decrease in collateral receivable 10,684 22,171 Decrease in collateral payable / Increase in collateral receivable (12,599) (22,693) Net cash impact of assets lending / borrowing collateral receivables and payables (1,915) (522) Half -Year 2014 Financial Report 88 CONSOLIDATED FINANCIAL STATEMENT HALF-YEAR 2014 NET CASH PROVIDED / (USED) BY INVESTING ACTIVITIES (4,112) Issuance of equity instruments 1,034 Repayments of equity instruments (35) Transactions on treasury shares 57 Dividends payout (2,156) Interests on undated subordinated debts paid (103) Acquisition / sale of interests in subsidiaries without change in control 4 Net cash related to transactions with shareholders (1,199) Cash provided by financial debts issuance 920 Cash used for financial debts repayments (2,205) Interests on financing debt paid (j) (310) Net cash related to Group financing (1,594) NET CASH PROVIDED / (USED) BY FINANCING ACTIVITIES (2,794) NET CASH PROVIDED BY DISCONTINUED OPERATIONS CASH AND CASH EQUIVALENT AS OF JANUARY 1 (k) 20,477 Net cash provided by operating activities 6,657 Net cash provided by investing activities (4,112) Net cash provided by financing activities (2,794) Impact of change in consolidation method and of reclassifications as held for sale (l) 0 Net impact of foreign exchange fluctuations and reclassification on cash and cash equivalents 537 CASH AND CASH EQUIVALENT AS OF JUNE 30 (k) 20,765 (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Includes premiums/discounts capitalization and relating amortization, amortization of investment and in the contest of owner occupied properties (held directly). (c) Includes impairment and amortization of intangible assets booked in the context of business combinations. (d) Includes impact of reinsurance and change in liabilities arising from contracts where the financial risk is borne by policyholders. (e) Mainly includes change in provisions for risks & charges, for bad debts/doubtful receivables and change in impairment of assets held for sale. (f) Includes gains/losses from derivatives hedging variable annuities. (g) Includes related derivatives. (h) Includes equity instruments held directly or by consolidated investment funds as well as non consolidated investment funds. (i) Includes sales/purchases of assets backing insurance & investment contracts where the financial risk is borne by policyholders. (j) Includes net cash impact of interest margin relating to hedging derivatives on financing debt. (k) Net of bank overdrafts. (l) Assets and liabilities related to MONY Life insurance Company portfolio for which the disposal process was not yet finalized were classified as held for sale as of June 30, 2013 (see Note 4.1). (in Euro million) June 30, 2014 June 30, 2013 Restated (a) Cash and cash equivalent 21,756 Bank overdrafts (b) (991) Cash and cash equivalent as of June 30 (c) 20,765 (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Included in \"Other debt instruments issued and bank overdrafts\". (c) The \"Cash and cash equivalents\" balances do not include cash balances of consolidated investment funds from the Satellite Investment Portfolio (see Note 1.7.2). The \"Cash and cash equivalents\" item excludes cash backing contracts where the financial risk is borne by policyholders (unit-linked contracts). Half -Year 2014 Financial Report 89 (8,190) 677 (382) 154 (1,873) (101) (21) (1,547) 881 (1,676) (334) (1,130) (2,676) 0 29,930 4,684 (8,190) (2,676) (261) (331) 23,155 24,604 (1,449) 23,155 III CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 NOTE 1 ACCOUNTING PRINCIPLES 1.1 General information AXA SA, a French “Société Anonyme” (the “Company” and together with its consolidated subsidiaries, “AXA” or the “Group”), is the holding (parent) company for an international financial services group focused on financial protection. AXA operates principally in Europe, Americas and Asia. The list of the main entities included in the scope of the AXA’s consolidated financial statements is provided in Note 2 of the notes to the consolidated interim financial statements. AXA is listed on Euronext Paris Compartment A. These consolidated interim financial statements including all notes were finalized by the Board of Directors on July 31, 2014. 1.2 General accounting principles AXA’s consolidated interim financial statements are prepared as of June 30. However, until 2013, certain subsidiaries within AXA had a different reporting year end. In particular, AXA Life Japan previously closed its interim accounts on March 31 and its full year accounts on September 30, however it aligned its closing dates with the Group calendar year starting with the 2013 annual accounts. The consolidated interim financial statements are prepared in compliance with IFRS standards according to IAS 34 – Interim Financial Reporting and interpretations of the IFRS Interpretations Committee that are endorsed by the European Union before the balance sheet date with a compulsory date of January 1, 2014. For existing and unchanged IFRS standards and interpretations, the accounting policies applied in the preparation of the consolidated interim financial statements are consistent with those applied in the preparation of the consolidated financial statements for the year ended December 31, 2013. The 2014 half-year consolidated financial statements should be read in conjunction with the consolidated financial statements included in the 2013 annual financial report. Standards, amendments and interpretation published and adopted on January 1, 2014 A package of five new and revised standards was published on May 12, 2011 (followed by amendments for investment entities published on October 31, 2012) addressing the accounting for consolidation, involvement in joint arrangements and disclosure of involvement with other entities. IFRS 10 – Consolidated Financial Statements replaces the consolidation guidance in IAS 27 – Consolidation and Separate Financial Statements and SIC-12 – Special Purpose Entities, by introducing a single consolidation model for all entities based on control, irrespective of the nature of the investee. IFRS 11 – Joint Arrangements replaces IAS 31 – Interests in Joint Ventures. IFRS 11 eliminates the option to apply the proportional consolidation method when accounting for jointly controlled entities and focuses on the rights and obligations of the arrangement, rather than the legal form. IFRS 12 – Disclosures of Interests in Other Entities requires enhanced disclosures for all forms of interest in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. Amended IAS 27 – Separate Financial Statements sets out the unchanged requirements relating to separate financial statements. The other portions of IAS 27 are replaced by IFRS 10. Amended IAS 28 – Investments in Associates and Joint Ventures includes amendments for conforming changes based on the issuance of IFRS 10, IFRS 11 and IFRS 12. The retrospective application of these standards and amendments by AXA resulted in: the change in the consolidation method of a limited number of investment funds and real estate companies (with the full consolidation of some entities previously accounted for under the equity method or not consolidated, and, in contrast, the deconsolidation of others); Half -Year 2014 Financial Report 90 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 the change from the proportionate consolidation method to the equity method for joint ventures, in particular Natio Assurances. The changes have no impact on the total of the profit or loss for the current year and prior year and on shareholders’ equity – Group share reported. The retrospective effect on the aggregates of the consolidated statement of financial position and the consolidated statement of income are as follows: (in Euro million) December 31, 2013 PublishedDecember 31, 2013 RestatedEffect of the changesJanuary 1, 2013 PublishedJanuary 1, 2013 RestatedEffect of the changesIntangible assets 39,71039,705(6)40,83540,830(5)Investments from insurance activities 606,039605,976(64)605,823605,754(69)Investments from banking and other activities (a)37,36035,790(1,570)35,19933,298(1,901)Investments accounted for using the equity method 1,3871,428421,3121,34735Reinsurers' share in insurance and investment contracts liabilities 17,72717,8088210,55810,62063Other assets 3,5053,499(6)4,5224,516(6)Receivables 29,66329,617(46)32,88732,841(46)Assets held for sale including discountinued operations 164164-181181-Cash and cash equivalents 21,58821,455(133)30,54630,375(171)TOTAL ASSETS 757,143755,441(1,701)761,862759,762(2,100)Consolidated statement of financial position Shareholders’ equity – Group share 52,92352,923153,60653,606-Minority interests (b)2,3912,5201302,3552,37116Financing debt 10,40710,407-10,66210,662-Liabilities arising from insurance and investment contracts573,058572,985(73)579,165579,079(86)Liabilities arising from banking activities 35,37435,375233,49433,4951Provisions for risks and charges 10,39310,393(1)11,95211,951-Deferred tax liabilities 4,2264,223(4)5,1755,170(5)Payables (c)68,37166,615(1,756)65,45463,428(2,026)TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 757,143755,441(1,701)761,862759,762(2,100) (a) Changes mainly relate to the Investments in real estate properties resulting from the changes in the consolidation method of some real estate companies. (b) Changes in minority interests relate to the change in consolidation method of some real estate companies. (c) Changes mainly relate to Other debt instruments issued, notes and bank overdrafts (€-1,163 million as of December 31, 2013 and €-1,387 million as of January 1, 2013) and Other payables (€-822 million as of December 31, 2013 and €-850 million as of January 1, 2013). (In Euro million)December 31, 2013 Published December 31, 2013 Restated Effect of the changesJune 30, 2013 PublishedJune 30, 2013 RestatedEffect of the changesRevenues 91,24991,221(28)50,04450,030(14)Change in unearned premiums net of unearned revenues and fees (246)(248)(2)(3,819)(3,820)(1)Net investment result excluding financing expenses 33,95833,953(5)13,46613,464(3)Other operating income and expenses (118,221)(118,199)22(55,884)(55,872)13Income from operating activities before tax 6,7406,727(13)3,8063,801(5)Income from investment accounted for using the equity method 131139862653Financing debts expenses (618)(618)-(348)(348)-Net income from operating activities before tax 6,2536,249(4)3,5203,518(2)Income tax (1,466)(1,462)4(899)(897)2Net operating income 4,7864,786-2,6212,621-Net consolidated income after tax 4,7864,786-2,6212,621-Consolidated statement of income As a result of the application of the new standards IFRS 10 / IFRS 11 and amendments to IAS 27 / IAS 28, the Note 1.3.1. Scope and basis of consolidation included in the consolidated financial statement for the year ended December 31, 2013 is changed as follows: Companies in which AXA exercises control are known as subsidiaries. They are fully consolidated from the date on which control is transferred to AXA. Under IFRS 10, an investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Only substantive rights (i.e. the holder must have the practicability to exercise them) and rights that are not protective shall be considered. An investor can have power with less than a majority of the voting rights of an investee, in particular through: the proportion of ownership with regards to the other investors; rights arising from other contractual arrangements; or Half -Year 2014 Financial Report 91 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 Under IFRS 11, companies over which AXA exercises a joint controlling influence alongside one or more third parties are joint ventures and are accounted for under the equity method. Companies in which AXA exercises significant influence are accounted for under the equity method. Under IAS 28, significant influence is presumed when AXA directly or indirectly holds 20% or more of the voting rights. Significant influence can also be exercised through an agreement with other shareholders. Under the equity method, AXA’s share of equity companies’ post-acquisition profit or loss is recognized in the income statement, and its share of post-acquisition movements in reserves is stated under “Other reserves”. Investment funds and real estate companies are either fully consolidated or accounted for under the equity method, depending on which conditions of IFRS 10 / IFRS 11 / IAS 28 listed above they satisfy. Fees received by asset managers are also taken into account in the assessment of the exposure to variability of returns. For fully consolidated investment funds, minority interests are recognized at fair value and shown as liabilities in the balance sheet if the companies’ instruments can be redeemed at any time by the holder at fair value. Investment funds accounted by equity method are shown under the balance sheet caption “Financial investments”. Additionally, the application of the amendments and interpretations below as of January 1, 2014 had no material impact on the Group’s consolidated interim financial statements. The amendments to IAS 32 – Financial Instruments: Presentation published on December 16, 2011, provide clarifications of the application of the offsetting rules. The amendments to IAS 32 clarify that in order to result in an offset of a financial asset and a financial liability, a right to set-off must be available immediately rather than be contingent on a future event and must be exercisable by any of the counterparties, both in the normal course of business and in the event of default, insolvency or bankruptcy. Additional clarifications are presented regarding the settlement process. The amendments to IAS 36 – Recoverable Amount Disclosures for Non-Financial Assets, published on May 29, 2013, address the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. IFRIC 21 – Levies, published May 20, 2013, is an interpretation on the accounting for levies imposed by governments. The interpretation, early adopted by AXA, clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. Narrow-scope amendments to IAS 39 – Novation of Derivatives and Continuation of Hedge Accounting, published on June 27, 2013 provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging instrument meets certain criteria. Preparation of financial statements The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions. The half year income tax charge is based on the best estimate of the expected full year tax rate. In preparing the consolidated interim financial statements, significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended December 31, 2013. As recommended by IAS 1, assets and liabilities are generally classified globally on the balance sheet in increasing order of liquidity, which is more relevant for financial institutions than a classification between current and non-current items. As for most insurance companies, expenses are classified by destination in the income statement. All amounts in the consolidated statement of financial position, consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of cash flows, consolidated statement of changes in equity and in the notes are expressed in Euro million. Half -Year 2014 Financial Report 92 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 NOTE 2 SCOPE OF CONSOLIDATION 2.1 Consolidated companies 2.1.1 MAIN FULLY CONSOLIDATED COMPANIES June 30, 2014 December 31, 2013 Parent and Holding Companies Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France AXA Parent company Parent company AXA Asia 100.00 100.00 100.00 100.00 AXA China 100.00 100.00 100.00 100.00 AXA France Assurance 100.00 100.00 100.00 100.00 Oudinot Participation 100.00 100.00 100.00 100.00 Société Beaujon 100.00 100.00 100.00 100.00 AXA Technology Services 99.99 99.99 99.99 99.99 United States AXA Financial, Inc. 100.00 100.00 100.00 100.00 AXA America Holding Inc. 100.00 100.00 100.00 100.00 United Kingdom Guardian Royal Exchange Plc 100.00 99.98 100.00 99.98 AXA UK Plc 100.00 99.98 100.00 99.98 AXA Equity & Law Plc 99.96 99.96 99.96 99.96 Asia/Pacific (excluding Japan) National Mutual International Pty Ltd 100.00 100.00 100.00 100.00 AXA Financial Services (Singapore) 100.00 100.00 100.00 100.00 AXA India Holding 100.00 100.00 100.00 100.00 Japan AXA Japan Holding 99.02 99.02 99.02 99.02 Germany Kölnische Verwaltungs AG für Versicherungswerte 100.00 100.00 100.00 100.00 AXA Konzern AG 100.00 100.00 100.00 100.00 Belgium AXA Holdings Belgium 100.00 100.00 100.00 100.00 Luxembourg AXA Luxembourg SA 100.00 100.00 100.00 100.00 Finance Solutions SARL 100.00 100.00 100.00 100.00 The Netherlands Vinci BV 100.00 100.00 100.00 100.00 Mediterranean and Latin American Region AXA Mediterranean Holding SA AXA Holding Maroc S.A. 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 AXA Turkey Holding A.S. 100.00 100.00 100.00 100.00 Half -Year 2014 Financial Report 93 II Life & Savings and Property & Casualty France AXA France IARD AXA France Vie AXA Protection Juridique United States AXA Equitable Life Insurance Company AXA Re Arizona Company United Kingdom AXA Insurance UK Plc AXA PPP Healthcare Limited AXA Isle of Man Limited AXA Wealth Limited Architas Multi-Manager Limited AXA Portfolio Services Limited Ireland AXA Insurance Limited AXA Life Europe Limited AXA Life Invest Reinsurance Asia/Pacific (excluding Japan) AXA Life Insurance Singapore AXA China Region Limited AXA General Insurance Hong Kong Ltd. AXA Insurance Singapore PT AXA Life Indonesia MLC Indonesia AXA Affin General Insurance Berhad (a) Japan AXA Life Insurance Germany AXA Versicherung AG AXA Art AXA Lebensversicherung AG Pro Bav Pensionskasse Deutsche Ärzteversicherung AXA Krankenversicherung AG DBV Deutsche Beamten-Versicherung AG Belgium Ardenne Prévoyante AXA Belgium SA Servis SA Les Assurés Réunis Luxembourg AXA Assurances Luxembourg AXA Assurances Vie Luxembourg Mediterranean and Latin American Region AXA Vida, S. A. de Seguros (Spain) AXA Aurora Vida, S.A. de Seguros (Spain) AXA Seguros Generales, S. A. (Spain) AXA Interlife (Italy) AXA Assicurazioni e Investimenti (Italy) AXA MPS Vita (Italy) AXA MPS Danni (Italy) AXA MPS Financial (Italy) AXA Colpatria Capitalizadora (Colombia) AXA Colpatria Seguros de la vida (Colombia) AXA Colpatria Seguros (Colombia) AXA Portugal Companhia de Seguros SA AXA Portugal Companhia de Seguros de Vida SA AXA Assurance Maroc AXA Hayat ve Emeklilik A.S. (Turkey) AXA Sigorta AS (Turkey) AXA Cooperative Insurance Company (Gulf) AXA Insurance (Gulf) B.S.C.c. AXA Insurance A.E. (Greece) AXA Seguros S.A. de C.V. (Mexico) Switzerland AXA Life (previously Winterthur Life) AXA-ARAG Legal Assistance AXA Insurance (previously Winterthur Swiss Insurance P&C) Central and Eastern Europe AXA Czech Republic Pension Funds AXA Czech Republic Insurance AXA Hungary CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 June 30, 2014 December 31, 2013 Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests 99.92 99.77 98.51 99.92 99.77 98.51 99.92 99.77 98.51 99.92 99.77 98.51 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.98 99.98 99.98 99.98 99.98 99.98 100.00 100.00 100.00 100.00 100.00 100.00 99.98 99.98 99.98 99.98 99.98 99.98 100.00 100.00 100.00 99.98 100.00 100.00 100.00 100.00 100.00 99.98 100.00 100.00 Minority interest buyout 100.00 100.00 100.00 100.00 100.00 100.00 42.51 100.00 100.00 100.00 100.00 100.00 100.00 42.51 100.00 100.00 100.00 100.00 100.00 100.00 42.48 100.00 100.00 100.00 100.00 100.00 100.00 42.48 100.00 99.02 100.00 99.02 Minority interest buyout Minority interest buyout 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.90 99.90 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 99.82 99.96 99.90 100.00 100.00 50.00 + 1 voting right 99.82 99.78 99.90 99.99 99.99 50.00 99.82 99.96 99.90 100.00 100.00 50.00 + 1 voting right 99.82 99.78 99.90 99.99 99.99 50.00 50.00 + 1 voting right 50.00 50.00 + 1 voting right 50.00 Acquisition Acquisition Acquisition Minority interest buyout 50.00 + 1 voting right 51.00 51.00 51.00 99.73 95.09 100.00 100.00 92.61 50.00 50.00 99.98 100.00 100.00 66.67 100.00 50.00 51.00 51.00 51.00 99.49 94.89 100.00 100.00 92.61 34.00 50.00 99.98 100.00 100.00 66.67 100.00 50.00 + 1 voting right - - - 99.73 95.09 100.00 100.00 92.61 50.00 50.00 99.98 99.97 100.00 66.67 100.00 50.00 - - 99.49 94.89 100.00 100.00 92.61 34.00 50.00 99.98 99.97 100.00 66.67 100.00 Disposal 99.99 100.00 - 99.99 100.00 - 99.99 100.00 100.00 99.99 100.00 100.00 Half -Year 2014 Financial Report 94 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 AXA Poland AXA Poland Pension Funds AXA Slovakia AXA Ukraine 100.00 100.00 100.00 50.17 100.00 100.00 100.00 50.17 100.00 100.00 100.00 50.17 100.00 100.00 100.00 50.17 Direct (b) Avanssur (France and Poland) Kyobo AXA General Insurance Co. Ltd. (South Korea) AXA Non Life Insurance Co. Ltd. (Japan) Touring Assurances SA (Belgium) Hilo Direct SA de Seguros y Reaseguros (Spain) Quixa S.p.A (Italy) Seguro Directo Gere Companhia de Seguros SA (Portugal) Minority interest buyout 100.00 99.61 100.00 100.00 100.00 100.00 100.00 100.00 99.61 99.02 100.00 100.00 100.00 100.00 100.00 99.55 100.00 100.00 100.00 100.00 100.00 100.00 99.55 99.02 100.00 100.00 100.00 100.00 (a) AXA Group exercises control in accordance with shareholders' agreements. (b) UK Direct activities are held by AXA Insurance UK Plc. June 30, 2014 December 31, 2013 International Insurance (entities having worldwide activities) Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests AXA Corporate Solutions Assurance (sub-group) AXA Global P&C AXA Global Life AXA Assistance SA (sub group) Portman Insurance Ltd. Colisée RE AXA Corporate Solutions Life Reinsurance Company 98.75 100.00 100.00 100.00 100.00 100.00 100.00 98.75 100.00 100.00 100.00 100.00 100.00 100.00 98.75 100.00 100.00 100.00 100.00 100.00 100.00 98.75 100.00 100.00 100.00 100.00 100.00 100.00 June 30, 2014 December 31, 2013 Asset Management (entities having worldwide activities) Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests AXA Investment Managers (sub group) AllianceBernstein (sub group) (a) Minority interests buyout 96.17 63.55 96.11 63.55 95.87 63.68 95.82 63.68 (a) The decrease in the Group share of interest is mainly due to the granting of holding units to the employees in relation with the share-based compensation programs. June 30, 2014 December 31, 2013 Banking Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France AXA Banque 100.00 99.89 100.00 99.89 Germany AXA Bank AG 100.00 100.00 100.00 100.00 Belgium AXA Bank Europe (sub group) 100.00 100.00 100.00 100.00 June 30, 2014 December 31, 2013 Other Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France CFP Management 100.00 100.00 100.00 100.00 Consolidated investments and investment funds As of June 30, 2014, consolidated investment funds represented total invested assets of €95,041 million (€92,280 million at the end of 2013), corresponding to 255 investment funds mainly in France, Japan and Germany and in majority relating to the Life & Savings segment. As of June 30, 2014, the 24 consolidated real estate companies corresponded to total invested assets of €7,168 million (€5,025 million at the end of 2013), mainly in Germany, Japan and France. In most investment funds (particularly open-ended investment funds), minority interests do not meet the definition of shareholders’ equity. They are therefore presented as liabilities under “Minority interests of consolidated investment funds and puttable instruments held by minority interest holders”. As of June 30, 2014, minority interests in consolidated investment funds amounted to €8,369 million (€7,795 million as of December 31, 2013). Half -Year 2014 Financial Report 95 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 2.1.2 MAIN INVESTMENTS IN COMPANIES ACCOUNTED FOR USING THE EQUITY METHOD Companies accounted for using the equity method listed below exclude investment funds and real estate entities: June 30, 2014 December 31, 2013 Change in scope Voting rights percentage Group share of interests Voting rights percentage Group share of interests France Neuflize Vie (previously NSM Vie) Natio Assurances (a) 39.98 50.00 39.98 49.96 39.98 50.00 39.98 49.96 Asia/Pacific Philippines AXA Life Insurance Corporation Krungthai AXA Life Insurance Company Ltd ICBC-AXA Life Insurance Co. Ltd (previously AXA Minmetals Assurance 45.00 50.00 45.00 50.00 45.00 50.00 45.00 50.00 Co Ltd) 27.50 27.50 27.50 27.50 PT AXA Mandiri Financial Services Bharti AXA Life Bharti AXA General Insurance Company Limited (India) AXA Insurance Public Company Limited (Thailand) 49.00 26.00 26.00 99.31 49.00 26.00 26.00 99.31 49.00 26.00 26.00 99.31 49.00 26.00 26.00 99.31 AXA Tian Ping Acquisition 50.00 50.00 Russia Reso Garantia (RGI Holdings B.V.) 39.34 39.34 39.34 39.34 Asset Management Kyobo AXA Investment Managers Company Limited Shares acquisition 50.00 48.06 50.00 47.91 Mediterranean and Latin American Region AXA Middle East SAL (Lebanon) 51.00 51.00 51.00 51.00 (a) Before the retrospective application of IFRS11 on January 1, 2014 (see note 1.2), Natio Assurances was proportionately consolidated. Investment funds and real estate entities accounted for using the equity method As of June 30, 2014, real estate companies accounted for using the equity method represented total assets of €261 million (€280 million at the end of 2013) and investment funds accounted for using the equity method represented total assets of €3,218 million (€3,076 million at the end of 2013), mainly in the United States, France, Germany, Belgium, Switzerland and the United Kingdom. 2.2 Consolidated entities relating to specific operations Arche Finance In 2008, AXA France invested in Arche Finance, an investment vehicle dedicated to credit investment, which entered the scope of consolidation in June 2008 with a loan of €200 million. On January 14, 2014 the loan was reimbursed. Hordle In 2009, AXA set up a Group financing and cash management company which benefited from a loan of £673 million. Half -Year 2014 Financial Report 96 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 NOTE 3 CONSOLIDATED STATEMENT OF INCOME BY SEGMENT Given the activities of AXA, the operating results are presented on the basis of five operating business segments: Life & Savings, Property & Casualty, International Insurance, Asset Management and Banking. An additional \"Holding companies\" segment includes all non-operational activities. The financial information relating to AXA's business segments and holding Company activities reported to the Board of Directors twice a year is consistent with the presentation provided in the consolidated financial statements. The Group has set up an organization by Global business lines for both Life & Savings and Property & Casualty in order to improve the speed and effectiveness of the organization and further leverage its size. The Life & Savings Global business line, as part of its role to define a common strategy has set the following priorities: accelerate diversification into Protection and Health; enhance profitability in Savings business; prioritize investments for growth; foster business efficiency. The Property & Casualty Global business line is responsible for: defining common Property & Casualty strategy; accelerating efficiency gains; building common platforms; leveraging global technical expertise. Life & Savings: AXA offers a broad range of Life & Savings products including individual and group savings retirement products, life and health products. They comprise traditional term and whole life insurance, immediate annuities and investment products (including endowments, savings-related products, such as variable life and variable annuity products). The Life & Savings segment aggregates ten geographic operating components: France, the United States, the United Kingdom, Japan, Germany, Switzerland, Belgium, the Mediterranean and Latin American Region, Asia (excluding Japan) and other countries. Property & Casualty: This segment includes a broad range of products including mainly motor, household, property and general liability insurance for both personal and commercial customers (commercial customers being mainly small to medium-sized companies). In some countries, this segment includes health products. The Property & Casualty segment aggregates nine geographical operating components (France, Germany, the United Kingdom and Ireland, Switzerland, Belgium, the Mediterranean and Latin American Region, Central Eastern Europe, Asia and Other countries) and one operating component for the Direct business. International Insurance: This segment’s operations include insurance products that notably relate to AXA Corporate Solutions Assurance. These products provide coverage to large national and international corporations. This segment also includes assistance activities, life reinsurance activities in run-off primarily AXA Corporate Solutions Life Reinsurance Company and the Group Property & Casualty run-off managed by AXA Liabilities Managers. The Asset Management segment includes diversified asset management (including investment fund management) and related services offered by AXA Investment Managers and AllianceBernstein entities, which are provided to a variety of institutional investors and individuals, including AXA’s insurance companies. The Banking segment includes banking activities (mainly retail banking, mortgage loans, savings) conducted primarily in France, Belgium and Germany. The Holding companies segment (that includes all non-operational activities), also includes some investment vehicles and Special-Purpose Entities (SPE). The inter-segment eliminations include only operations between entities from different segments. They mainly relate to reinsurance treaties, assistance guarantees recharging, asset management fees and interests on loans within the Group. In this document, “Insurance” covers the three insurance segments: Life & Savings, Property & Casualty and International Insurance. The term “Financial Services” includes both the Asset Management segment and the Banking segment. Half -Year 2014 Financial Report 97 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 3.1 Consolidated statement of income by segment June 30, 2014 (in Euro million) Life & savings Property & Casualty International Insurance Asset Management Banking Holding companies Inter- segment eliminations Gross written premiums 28,333 17,014 1,912 (315) Fees and charges relating to investment contracts with no participating features 159 Revenues from insurance activities 28,492 17,014 1,912 (315) Net revenues from banking activities 274 0 12 Revenues from other activities 608 29 128 1,776 2 (227) Revenues 29,100 17,044 2,039 1,776 276 0 (530) Change in unearned premiums net of unearned revenues and fees (1,433) (2,649) (297) 110 Net investment income (a) 6,467 1,119 115 (6) (0) 220 (316) Net realized gains and losses relating to investments at cost and at fair value through shareholders'equity Net realized gains and losses and change in fair value of other investments at fair value through profit or loss (b) of which change in fair value of assets with financial risk borne by policyholders 829 6,837 5,617 229 (21) 44 11 27 6 34 (4) (4) Change in investments impairment (182) (23) (3) (13) Net investment result excluding financing expenses 13,951 1,303 168 21 (0) 246 (319) Technical charges relating to insurance activities (36,098) (9,666) (1,019) 144 Net result from outward reinsurance 276 (416) (281) 57 Bank operating expenses (50) (0) Acquisition costs (1,932) (2,437) (245) 8 Amortization of the value of purchased business in force (58) Administrative expenses (1,299) (1,320) (120) (1,269) (199) (454) 189 Change in goodwill impairment and other intangible assets impairment (10) (58) (1) Other income and expenses (55) 3 13 (137) (5) 105 (39) Other operating income and expenses (39,176) (13,892) (1,652) (1,407) (254) (349) 358 Income from operating activities before tax 2,443 1,806 258 390 22 (103) (381) Income from investment accounted for using the equity method 63 31 0 0 5 Financing debt expenses (51) (4) (4) (17) (5) (665) 380 Net income from operating activities before tax 2,455 1,833 254 373 17 (762) (0) Income tax (498) (526) (86) (109) 3 205 0 Net operating income 1,957 1,307 168 265 20 (558) Net consolidated income after tax 1,957 1,307 168 265 20 (558) Split between : Net consolidated income - Group share 1,906 1,286 166 188 19 (558) Net consolidated income - Minority interests 51 21 2 76 1 0 (a) Includes gains/losses from derivatives hedging variable annuities within Life & Savings and International Insurance segments. (b) Includes net realized and unrealized foreign exchange gains and losses relating to investments at cost and at fair value through shareholders'equity. Half -Year 2014 Financial Report 98 TOTAL 46,944 159 47,103 286 2,316 49,705 (4,269) 7,600 1,107 6,884 5,613 (221) 15,370 (46,639) (363) (50) (4,606) (58) (4,472) (69) (114) (56,371) 4,435 99 (365) 4,169 (1,010) 3,159 3,159 3,008 151 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 June 30, 2013 Restated (a) (in Euro million) Life & savings Property & Casualty International Insurance Asset Management Banking Holding companies Inter- segment eliminations Gross written premiums 28,927 16,651 1,843 (267) Fees and charges relating to investment contracts with no participating features 133 Revenues from insurance activities 29,060 16,651 1,843 (267) Net revenues from banking activities 287 0 4 Revenues from other activities 583 28 137 1,915 2 (214) Revenues 29,643 16,679 1,980 1,915 290 0 (477) Change in unearned premiums net of unearned revenues and fees (1,178) (2,497) (236) 90 Net investment income (b) 4,849 1,006 78 4 (0) 307 (295) Net realized gains and losses relating to investments at cost and at fair value through shareholders'equity Net realized gains and losses and change in fair value of other investments at fair value through profit or loss (c) of which change in fair value of assets with financial risk borne by policyholders 1,201 6,573 8,072 180 (109) 8 (7) (4) 24 19 32 (13) (3) Change in investments impairment (296) (48) (9) (0) (38) Net investment result excluding financing expenses 12,328 1,029 71 24 (0) 320 (307) Technical charges relating to insurance activities (35,047) (9,427) (932) 146 Net result from outward reinsurance (173) (412) (391) 41 Bank operating expenses (68) 1 Acquisition costs (1,984) (2,449) (222) 29 Amortization of the value of purchased business in force (59) Administrative expenses (1,488) (1,293) (111) (1,418) (206) (397) 145 Change in tangible assets impairment (0) Change in goodwill impairment and other intangible assets impairment (6) (40) (0) Other income and expenses (74) (10) (0) (102) 13 108 (43) Other operating income and expenses (38,832) (13,631) (1,656) (1,520) (261) (288) 317 Income from operating activities before tax 1,961 1,580 158 418 28 33 (377) Income from investment accounted for using the equity method 46 18 0 0 0 Financing debts expenses (63) (3) (1) (17) (8) (663) 407 Net income from operating activities before tax 1,944 1,595 157 402 20 (630) 30 Income tax (390) (444) (73) (128) 1 166 (30) Net operating income 1,554 1,152 84 273 21 (464) Net consolidated income after tax 1,554 1,152 84 273 21 (464) Split between : Net consolidated income - Group share 1,501 1,130 83 196 20 (464) Net consolidated income - Minority interests 54 22 1 77 1 (0) (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Includes gains/losses from derivatives hedging variable annuities within Life & Savings and International Insurance segments. (c) Includes net realized and unrealized foreign exchange gains and losses relating to investments at cost and at fair value through shareholders'equity. Half -Year 2014 Financial Report 99 TOTAL 47,154 133 47,287 291 2,451 50,030 (3,820) 5,949 1,405 6,500 8,070 (390) 13,464 (45,261) (935) (67) (4,626) (59) (4,768) (0) (46) (109) (55,872) 3,801 65 (348) 3,518 (897) 2,621 2,621 2,467 154 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 NOTE 4 TRANSACTIONS IN CONSOLIDATED ENTITIES 4.1 TIAN PING insurance On April 24, 2013, AXA announced it had entered into an agreement with Tian Ping Auto Insurance Company Limited (\"Tian Ping\") shareholders to acquire 50% of the company. Tian Ping is mainly focusing on motor insurance and has Property & Casualty licenses covering most Chinese provinces as well as a direct distribution license covering these provinces with a market share of 0.8%(1). On February 20, 2014, AXA announced the finalization of the acquisition. AXA has acquired 33% of the company from Tian Ping's current shareholders for RMB 1.9 billion (or Euro 240 million(2)) and subsequently subscribed to a capital increase for RMB 2.0 billion (or Euro 251 million(2)) to support future growth, raising its stake to 50%. AXA and Tian Ping's current shareholders jointly control AXA Tian Ping. AXA’s previously existing Chinese P&C operations have been merged within the new joint venture. The acquired operations are consolidated through the equity method since February 20, 2014. Given the short timing between the acquisition and the interim closing, the initial accounting is still on-going as of June 30, 2014. 4.2 COLPATRIA's insurance operations in Colombia On November 11, 2013, AXA announced it had entered into an agreement with Grupo Mercantil Colpatria(3) to acquire a 51% stake in its composite insurance operations in Colombia (“Colpatria Seguros”). On April 2, 2014, AXA announced it had completed the acquisition for a consideration of COP 672 billion (or Euro 248 million(4)). The acquired subsidarieis are fully consolidated. The initial accounting for the assets, liabilities and minorities interests is still on-going as of June 30. In accordance with IFRS 3- Business Combinations, adjustments can be made within twelve months of the acquisition date if new information becomes available to complete the initial accounting. 4.3 Hungarian Life & Savings Insurance operations On June 3, 2014, AXA announced it has completed the sale of its Life & Savings operations in Hungary(5) to Vienna Insurance Group. AXA continues to have banking operations in the country. These transactions led to recognize a €-50 million exceptional loss (net of tax and group share) in AXA consolidated financial statements as of December 31, 2013. 4.4 MONY Portfolio transaction On April 10, 2013, AXA announced it had entered into definitive agreements with Protective Life Corporation to sell MONY Life Insurance Company (“MONY”) and to get reinsurance for an in-force book of life insurance policies written by MONY’s subsidiary MONY Life Insurance Company of America (“MLOA”) primarily prior to 2004. This announced transaction in 2013 led to recognize an estimated €-32 million exceptional loss in AXA interim consolidated financial statements as of June 30, 2013, resulting mainly from intangibles impairment, as well as associated costs with the announced transaction. (1) Source = CIRC, December 2013. (2) EUR = RMB 7,982 as of February 19, 2014. (3) The scope of the transaction includes the four insurance companies of Grupo Mercantil Colpatria: Seguros Colpatria S.A. (Property & Casualty), Seguros de Vida Colpatria S.A. (Life, Workers Compensation), Capitalizadora Colpatria S.A. (Capitalization) and Colpatria Medicina Prepagada S.A. (Voluntary Health). (4) EUR 1 = COP 2,711.67 as of March 31, 2014. (5) AXA Insurance Company and AXA Money & More. Half -Year 2014 Financial Report 100 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 On October 1, 2013, AXA announced it had successfully completed these transactions for a total cash consideration of US$1.06 billion (or €0.79 billion (1)). These transactions led to recognize €-11 million exceptional loss (net of tax and group share) in AXA consolidated financial statements as of December 31, 2013, following the refinement of the June 30, 2013 estimated impact. In AXA interim consolidated financial statements as of June 30, 2014 an exceptional gain of €+21 million (net of tax and group share) has been recognized following the re-evaluation of the transaction as part of the terms of the agreement. (1) EUR 1 = USD 1.35, as of October 1, 2013. Half -Year 2014 Financial Report 101 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 NOTE 5 INVESTMENTS 5.1 Breakdown of investments Each investment item is presented net of the effect of related hedging derivatives (IAS 39 qualifying hedges or economic hedges) except derivatives related to macro-hedges shown separately. Insurance June 30, 2014 Other activities Total (in Euro million) Fair value Carrying value % (value balance sheet) Fair value Carrying value % (value balance sheet) Fair value Carrying value Investment in real estate properties at amortized cost Investment in real estate properties designated as at fair value through profit or loss (a) Macro-hedge and other derivatives 22,445 1,018 16,996 1,018 2.67% 0.16% 1,713 574 1.56% 24,157 1,018 17,570 1,018 Investment in real estate properties 23,463 18,014 2.83% 1,713 574 1.56% 25,175 18,588 Debt instruments held to maturity Debt instruments available for sale Debt instruments designated as at fair value through profit or loss (b) Debt instruments held for trading Debt instruments (at cost) that are not quoted in an active market (c) 339,886 35,691 363 4,700 339,886 35,691 363 4,499 53.47% 5.61% 0.06% 0.71% 9,806 320 21 2,090 9,806 320 21 2,090 26.69% 0.87% 0.06% 5.69% 349,693 36,010 385 6,789 349,693 36,010 385 6,588 Debt instruments 380,640 380,439 59.85% 12,237 12,237 33.30% 392,877 392,676 Equity instruments available for sale Equity instruments designated as at fair value through profit or loss (a) Equity instruments held for trading 14,982 7,745 152 14,982 7,745 152 2.36% 1.22% 0.02% 1,235 374 1,235 374 3.36% 1.02% 16,216 8,118 152 16,216 8,118 152 Equity instruments 22,878 22,878 3.60% 1,608 1,608 4.38% 24,486 24,486 Non consolidated investment funds available for sale Non consolidated investment funds designated as at fair value through profit or loss (a) Non consolidated investment funds held for trading 6,273 5,066 6,273 5,066 0.99% 0.80% 35 255 428 35 255 428 0.09% 0.69% 1.17% 6,308 5,321 428 6,308 5,321 428 Non consolidated investment funds 11,339 11,339 1.78% 718 718 1.95% 12,058 12,058 Other assets designated as at fair value through profit or loss, held by consolidated investment funds 7,633 7,633 1.20% 34 34 0.09% 7,666 7,666 Macro-hedge and other derivatives 620 620 0.10% (1,229) (1,229) 3.35% (609) (609) Financial investments 423,110 422,909 66.53% 13,368 13,368 36.38% 436,478 436,277 Loans held to maturity Loans available for sale Loans designated as at fair value through profit or loss (a) Loans held for trading Loans at cost (d) Macro-hedge and other derivatives 26 0 - 29,429 26 0 - 28,151 0.00% 0.00% - 4.43% - - - 24,501 (3) - - - 22,804 (3) - - - 62.06% 0.01% 26 0 - 53,930 (3) 26 0 - 50,955 (3) Loans 29,455 28,177 4.43% 24,498 22,801 62.06% 53,953 50,978 Assets backing contracts where the financial risk is borne by policyholders 166,556 166,556 26.20% 166,556 166,556 INVESTMENTS 642,583 635,656 100.00% 39,578 36,743 100.00% 682,161 672,399 Investments (excluding those backing contracts where the financial risk is borne by policyholders) 476,028 469,100 73.80% Life & Savings Property & Casualty 404,928 63,949 398,863 63,088 62.75% 9.92% International Insurance 7,151 7,149 1.12% (a) Assets measured at fair value under the fair value option. (b) Includes assets measured at fair value notably under the fair value option. (c) Eligible to the IAS 39 Loans and Receivables measurement category. (d) Mainly relates to mortgage loans and policy loans. Half -Year 2014 Financial Report 102 % (value balance sheet) 2.61% 0.15% 2.76% 52.01% 5.36% 0.06% 0.98% 58.40% 2.41% 1.21% 0.02% 3.64% 0.94% 0.79% 0.06% 1.79% 1.14% 0.09% 64.88% 0.00% 0.00% - 7.58% 0.00% 7.58% 24.77% 100.00% II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 Insurance December 31, 2013 Restated (a) Other activities Total (in Euro million) Fair value Carrying value % (value balance sheet) Fair value Carrying value % (value balance sheet) Fair value Carrying value Investment in real estate properties at amortized cost Investment in real estate properties designated as at fair value through profit or loss (b) Macro-hedge and other derivatives 21,754 1,033 16,446 1,033 2.71% 0.17% 1,617 573 1.60% 23,370 1,033 17,019 1,033 Investment in real estate properties 22,787 17,479 2.88% 1,617 573 1.60% 24,403 18,052 Debt instruments held to maturity Debt instruments available for sale Debt instruments designated as at fair value through profit or loss (c) Debt instruments held for trading Debt instruments (at cost) that are not quoted in an active market (d) 319,473 34,263 251 6,517 319,473 34,263 251 6,410 52.72% 5.65% 0.04% 1.06% 9,515 124 28 1,275 9,515 124 28 1,275 26.58% 0.35% 0.08% 3.56% 328,988 34,387 280 7,792 328,988 34,387 280 7,685 Debt instruments 360,505 360,397 59.47% 10,942 10,942 30.57% 371,447 371,339 Equity instruments available for sale Equity instruments designated as at fair value through profit or loss (b) Equity instruments held for trading 15,154 6,477 140 15,154 6,477 140 2.50% 1.07% 0.02% 2,035 374 2,035 374 5.69% 1.04% 17,189 6,851 140 17,189 6,851 140 Equity instruments 21,771 21,771 3.59% 2,409 2,409 6.73% 24,180 24,180 Non consolidated investment funds available for sale Non consolidated investment funds designated as at fair value through profit or loss (b) Non consolidated investment funds held for trading 6,041 4,396 6,041 4,396 1.00% 0.73% 281 213 388 281 213 388 0.79% 0.59% 1.09% 6,322 4,609 388 6,322 4,609 388 Non consolidated investment funds 10,437 10,437 1.72% 883 883 2.47% 11,320 11,320 Other assets designated as at fair value through profit or loss, held by consolidated investment funds 6,876 6,876 1.13% 13 13 0.04% 6,888 6,888 Macro-hedge and other derivatives 886 886 0.15% (1,362) (1,362) 3.81% (476) (476) Financial investments 400,474 400,366 66.07% 12,885 12,885 36.00% 413,358 413,251 Loans held to maturity Loans available for sale Loans designated as at fair value through profit or loss (a) Loans held for trading Loans at cost (e) Macro-hedge and other derivatives - 0 - 26,714 - 0 - 25,943 - 0.00% - 4.28% - 0 - 23,711 10 - 0 - 22,323 10 - 0.00% - 62.37% 0.03% - 0 - 50,426 10 - 0 - 48,266 10 Loans 26,715 25,944 4.28% 23,722 22,333 62.40% 50,436 48,277 Assets backing contracts where the financial risk is borne by policyholders 162,186 162,186 26.76% 162,186 162,186 INVESTMENTS 612,161 605,976 100.00% 38,223 35,790 100.00% 650,384 641,766 Investments (excluding those backing contracts where the financial risk is borne by policyholders) 449,975 443,789 73.24% Life & Savings Property & Casualty 383,193 59,510 377,779 58,740 62.34% 9.69% International Insurance 7,272 7,270 1.20% (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Assets measured at fair value under the fair value option. (c) Includes assets measured at fair value notably under the fair value option. (d) Eligible to the IAS 39 Loans and Receivables measurement category. (e) Mainly relates to mortgage loans and policy loans. 5.2 Investment in real estate properties Investment in real estate properties include buildings owned both directly and through real estate subsidiaries. Breakdown of the carrying value and fair value of investments in real estate properties at amortized cost, excluding the impact of all derivatives was as follows: June 30, 2014 December 31, 2013 Restated (a) (in Euro million) Gross value Amortization Impairment Carrying value Fair value Gross value Amortization impairment Carrying value Investment in real estate properties at amortized cost Insurance 19,612 (1,984) (632) 16,996 22,445 18,984 (1,904) (633) 16,446 Other activities 785 (210) (0) 574 1,713 781 (208) (0) 573 All activities 20,397 (2,195) (632) 17,570 24,157 19,764 (2,112) (633) 17,019 (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. Fair value is generally based on valuations performed by qualified property appraisers. Valuations are based on a multi-criteria approach and their frequency and terms are often based on local regulations. Half -Year 2014 Financial Report 103 % (value balance sheet) 2.65% 0.16% 2.81% 51.26% 5.36% 0.04% 1.20% 57.86% 2.68% 1.07% 0.02% 3.77% 0.99% 0.72% 0.06% 1.76% 1.07% 0.07% 64.39% - 0.00% - 7.52% 0.00% 7.52% 25.27% 100.00% Fair value 21,754 1,617 23,370 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 Change in impairment and amortization of investments in real estate properties at amortized cost (all activities): Impairment - Investment in real estate properties Amortization - Investment in real estate properties (in Euro million) June 30, 2014 December 31, 2013 Restated (a) June 30, 2014 December 31, 2013 Restated (a) Opening value 633 552 2,112 2,058 Increase for the period 22 134 111 261 Write back following sale or reimbursement (3) (33) (17) (43) Write back following recovery in value (4) (18) Others (b) (16) (1) (11) (165) Closing value 632 633 2,195 2,112 (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Includes change in scope and the effect of changes in exchange rates. 5.3 Unrealized gains and losses on financial investments Excluding the effect of derivatives, unrealized capital gains and losses on financial investments, when not already reflected in the income statement, were allocated as follows: (in Euro million) June 30, 2014 December 31, 2013 Restated (a) INSURANCE Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale 302,159 4,525 11,904 340,121 4,726 15,036 340,121 4,525 15,036 38,898 216 3,193 936 15 61 297,303 6,431 12,222 320,110 6,538 15,158 320,110 6,431 15,158 25,277 141 3,034 2,469 33 98 Non consolidated investment funds available for sale 5,292 6,226 6,226 957 23 5,113 6,002 6,002 901 11 (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (in Euro million) June 30, 2014 December 31, 2013 Restated (a) OTHER ACTIVITIES Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale 9,911 2,089 973 10,065 2,089 1,235 10,065 2,089 1,235 204 272 50 10 9,607 1,275 1,912 9,625 1,275 2,263 9,625 1,275 2,263 136 361 118 10 Non consolidated investment funds available for sale 24 35 35 10 0 276 281 281 6 0 (in Euro million) June 30, 2014 December 31, 2013 Restated (a) TOTAL Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Amortized cost (b) Fair value Carrying value (c) Unrealized gains Unrealized losses Debt instruments available for sale Debt instruments (at cost) that are not quoted in an active market Equity instruments available for sale 312,070 6,614 12,877 350,186 6,816 16,270 350,186 6,614 16,270 39,102 216 3,464 986 15 71 306,910 7,706 14,133 329,735 7,813 17,421 329,735 7,706 17,421 25,413 141 3,395 2,587 33 108 Non consolidated investment funds available for sale 5,316 6,261 6,261 967 23 5,389 6,283 6,283 906 11 (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Net of impairment - including premiums/discounts and related accumulated amortization. (c) Net of impairment. Half -Year 2014 Financial Report 104 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 5.4 Financial assets subject to impairment 5.4.1 BREAKDOWN OF FINANCIAL ASSETS SUBJECT TO IMPAIRMENT (EXCLUDING INVESTMENT IN REAL ESTATE PROPERTIES) Each investment item is presented net of the effect of related hedging derivatives (IAS 39 qualifying hedges or economic hedges) except derivatives related to macro hedges shown separately. June 30, 2014 December 31, 2013 Restated (a) Cost before impairment and revaluation to fair value (b) Impairment Cost after impairment but before revaluation to fair value (c) Revaluation to fair value Carrying value Cost before impairment and revaluation to fair value (b) Impairment Cost after impairment but before revaluation to fair value (c) Revaluation to fair value Carrying value (in Euro million) Debt instruments available for sale 311,942 (931) 311,011 38,682 349,693 306,962 (1,078) 305,884 23,104 328,988 Debt instruments (at cost) that are not quoted in an active market (e) 6,582 6,582 7 6,588 7,694 7,694 (9) 7,685 Debt instruments 318,523 (931) 317,593 38,688 356,281 314,656 (1,078) 313,578 23,094 336,672 Equity instruments available for sale 14,822 (1,945) 12,877 3,339 16,216 16,515 (2,380) 14,135 3,054 17,189 Non consolidated investment funds available for sale 6,283 (967) 5,316 992 6,308 6,418 (1,029) 5,389 934 6,322 Loans held to maturity Loans available for sale 26 (0) 26 26 0 (0) Loans at cost (d) (e) 52,095 (619) 51,475 (520) 50,955 49,235 (621) 48,614 (348) 48,266 Loans 52,121 (620) 51,501 (520) 50,981 49,235 (621) 48,614 (348) 48,266 TOTAL 391,748 (4,462) 387,286 42,499 429,786 386,824 (5,108) 381,715 26,734 408,449 (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Asset value including impact of discounts/premiums and accrued interests, but before impairment and revaluation to fair value of assets available for sale. (c) Asset value including impairment, discounts/premiums and accrued interests, but before revaluation to fair value of assets available for sale. (d) Including policy loans. (e) Revaluation to fair value for instruments at cost related to the application of hedge accounting. 5.4.2 CHANGE IN IMPAIRMENT ON INVESTED ASSETS (EXCLUDING INVESTMENT IN REAL ESTATE PROPERTIES) (in Euro million) January 1, 2014 Increase for the period Write back following sale or reimbursement Write back following recovery in value Other (a) June 30, 2014 Impairment - Debt instruments 1,078 103 (283) (4) 37 931 Impairment - Equity instruments 2,380 78 (527) 14 1,945 Impairment - Non consolidated investment funds 1,029 28 (59) (31) 967 Impairment - Loans 621 64 (4) (50) (11) 620 TOTAL 5,108 273 (873) (54) 9 4,462 (a) Mainly relates to changes in the scope of consolidation and impact of changes in exchange rates. (in Euro million) January 1, 2013 Increase for the period Write back following sale or reimbursement Write back following recovery in value Other (a) December 31, 2013 Restated (b) Impairment - Debt instruments 1,340 76 (203) (6) (129) 1,078 Impairment - Equity instruments 2,488 443 (420) (131) 2,380 Impairment - Non consolidated investment funds 1,027 100 (91) (7) 1,029 Impairment - Loans 601 116 (3) (72) (22) 621 TOTAL 5,456 736 (718) (78) (288) 5,108 (a) Mainly relates to changes in the scope of consolidation and impact of changes in exchange rates. (b) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. Half -Year 2014 Financial Report 105 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 5.5 Investments/Fair value Fair values determined in whole directly by reference to an active market relate to prices which are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis, i.e. the market is still active. Such assets are categorized in the level 1 of the IFRS 13 fair value hierarchy. Fair values for level 2 and 3 assets include: values provided at the request of the Group by pricing services and which are not readily publicly available or values provided by external parties which are readily available but relate to assets for which the market is not always active; and assets measured on the basis of valuation techniques including a varying degree of assumptions supported by market transactions and observable data. For all assets not quoted in an active market/no active market, the classification between level 2 and level 3 depends on the proportion of assumptions used supported by market transactions and observable data (market observable inputs): assumed to be used by pricing services; or used by the Group in the limited cases of application of mark to model valuations. 5.5.1 INVESTMENTS RECOGNIZED AT FAIR VALUE Among financial investments measured at fair value in the consolidated statement of financial position (excluding derivatives, investment funds consolidated by equity method and contracts where the financial risk is borne by policyholders), i.e. €432 billion as of June 30, 2014 (€408 billion as of December 31, 2013): €277 billion were determined directly by reference to an active market (€259 billion at the end of 2013), i.e. level 1 assets and €155 billion related to assets not quoted in an active market/no active market (€149 billion at the end of 2013), i.e. level 2 and level 3 assets of which level 3 assets amounted to €10 billion (€10 billion at the end of 2013). For sovereign bonds, trends observed in 2013 were confirmed in the first semester of 2014 with an acceleration of Eurozone peripheral countries’ spread contraction and liquidity improvement. These market indicators will continue to be followed to assess the sustainability of those improvements. Therefore, the classification as at June 30, 2014 is maintained similar to the one as at December 31, 2013. As of June 30, 2014, some assets were reclassified between levels 1 and 2. This was mainly related to some corporate bonds for which spreads widened and narrowed throughout the period. Transfer in and out of the level 3 category and other movements From January 1, 2014 to June 30, 2014, the amount of level 3 assets remained stable at €10.4 billion, representing 2.4% of the total assets at fair value (2.5% at the end of 2013 i.e. €10.2 billion). Main movements relating to level 3 assets to be noted were the following: €+1.0 billion of new investments; €-0.3 billion of asset sales mainly non consolidated funds AFS and other FVO assets held by controlled investment funds; €-0.3 billion transfers out of level 3 category due to more observable data; €-0.2 billion of change in unrealized gains and losses; €-0.2 billion of other movements (forex impact, changes in scope…). 5.5.2 INVESTMENTS RECOGNIZED AT AMORTIZED COST Among financial investments measured at amortized cost in the consolidated statement of financial position i.e. €85 billion as of June 30, 2014 (€82 billion as of December 31, 2013): €0.2 billion were determined directly by reference to an active market (€1.3 billion at the end of 2013), i.e. level 1 assets and Half -Year 2014 Financial Report 106 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 €85 billion related to assets not quoted in an active market/no active market (€81 billion at the end of 2013), i.e. level 2 and level 3 assets of which level 3 assets amounted to €37 billion (€34 billion at the end of 2013). Half -Year 2014 Financial Report 107 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 NOTE 6 SHAREHOLDERS’ EQUITY AND MINORITY INTERESTS The Consolidated Statement of changes in Equity is presented as a primary financial statement. 6.1 Impact of transactions with shareholders 6.1.1 CHANGE IN SHAREHOLDERS’ EQUITY GROUP SHARE FOR THE FIRST HALF OF 2014 a) SHARE CAPITAL AND CAPITAL IN EXCESS OF NOMINAL VALUE During the first half of 2014, the following transactions had an impact on AXA’s share capital and capital in excess of nominal value: Stock option exercice of 2 million shares for €36 million; Share-based payments for €15 million. b) TREASURY SHARES As of June 30, 2014, the Company and its subsidiaries owned approximately 1 million AXA shares, representing 0.03% of the share capital, a decrease of 3 million shares compared to December 31, 2013. As of June 30, 2014, the carrying value of treasury shares and related derivatives was €160 million. This included €0.9 million relating to AXA shares held by consolidated mutual funds (69,818 shares) not backing contracts where the financial risk is borne by policyholders. In addition, as of June 30, 2014, 2 million treasury shares backing contracts where the financial risk is borne by policyholders held in controlled investment funds were not deducted from shareholders’ equity. Their total estimated historical cost was €40 million and their market value €36 million at the end of June 2014. c) UNDATED SUBORDINATED DEBT AND RELATED FINANCIAL EXPENSES As described in the accounting principles, undated subordinated debt issued by the Group do not qualify as liabilities under IFRS. Undated subordinated debt instruments are classified in shareholders’ equity at their historical value as regards credit spread and interest rates and their closing value as regards exchange rates. The corresponding exchange differences are cancelled out through the translation reserve. During the first half of 2014, the change in other reserves was due to: €+997 million from the issuance of a new subordinated debt (net of fees); €-35 million from the exercice of a redemption call on undated subordinated debt; €-148 million in interest expense related to the undated subordinated debt (net of tax); €+132 million from foreign exchange rate fluctuations. Half -Year 2014 Financial Report 108 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 As of June 30, 2014 and December 31, 2013, undated subordinated debt recognized in shareholders’ equity broke down as follows: June 30, 2014 December 31, 2013 Value of the undated subordinated debt in currency of issuance Value of the undated subordinated debt in Euro million Value of the undated subordinated debt in currency of issuance (a) Value of the undated subordinated debt in Euro million (in Euro million) October 29, 2004 - 375 M € 6.0% 375 375 375 375 December 22, 2004 - 250 M € 6.0% 250 250 250 250 January 25, 2005 - 250 M € 6.0% 250 250 250 250 July 6, 2006 - 1,000 M € 5.8% 1,000 994 1,000 994 July 6, 2006 - 500 M £ 6.7% 500 618 500 594 July 6, 2006 - 350 M £ 6.7% 350 437 350 420 October 26, 2006 - 600 M A$ (of which 300M A$ 7.5%) 600 410 600 386 November 7, 2006 - 150 M A$ 7.5% 150 103 150 97 December 14, 2006 - 750 M US$ 6.5% 750 546 750 541 December 14, 2006 - 750 M US$ 6.4% 750 546 750 541 October 5, 2007 - 750 M€ 6.2% 750 746 750 746 October 16, 2007 - 700 M £ 6.8% 700 871 700 837 May 20, 2014 - 1,000 M€ - 3.9% 1,000 997 January 22, 2013 - 850 M US$, 5.5% 850 617 850 611 Undated notes -625 M €, variables rates 625 625 660 660 Undated notes - 27,000 M JPY, 3.3% 27,000 195 27,000 187 Undated notes- 375 M US$, variables rates 375 275 375 272 Sub-Total Undated Subordinated Debt 8,855 7,761 Equity component of convertible debt (2017) 95 95 95 95 TOTAL 8,949 7,856 In addition to the nominal amounts shown above, shareholders’ equity included net accumulated financial expenses of: €-2,558 million as of June 30, 2014; €-2,410 million as of December 31, 2013. Undated subordinated debt often contains the following features: Early redemption clauses (calls) at the option of the Company, giving AXA the ability to redeem the principal amount before settlement without penalty on certain dates, and Interest rate step-up clauses with effect from a given date. d) DIVIDENDS PAID At the shareholders’ meeting held on April 23, 2014, shareholders approved a dividend distribution of 0.81€ per share corresponding to €1,960 million with respect to the 2013 financial year. 6.1.2 DHANGE IN SHAREHOLDERS’ EQUITY GROUP SHARE FOR THE FIRST HALF OF 2013 a) DHARE CAPITAL AND CAPITAL IN EXCESS OF NOMINAL VALUE During the first half of 2013, the following transactions had an impact on AXA’s share capital and capital in excess of nominal value: Share-based compensation for €23 million. Increase in capital of €36 million; Half -Year 2014 Financial Report 109 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 b) TREASURY SHARES As of June 30, 2013, the Company and its subsidiaries owned approximately 4 million AXA shares, representing 0.2% of the share capital, a decrease of 12 million shares compared to December 31, 2012. As of June 30, 2013, the carrying value of treasury shares and related derivatives was €197 million. This figure included €0.8 million relating to AXA shares held by consolidated mutual funds (61,455 shares) not backing contracts where the financial risk is borne by policyholders. In addition, as of June 30, 2013, 1.6 million treasury shares backing contracts where the financial risk is borne by policyholders held in controlled investment funds were not deducted from shareholders’ equity. Their total estimated historical cost was €32 million and their market value €21 million at the end of June 2013. c) UNDATED SUBORDINATED DEBT AND RELATED FINANCIAL EXPENSES During the first half of 2013, the change in other reserves was due to: €+634 million from the issuance of a new undated subordinated debt; €-381 million following the exercise of an early redemption call on an undated subordinated debt; €-144 million in interest expense related to the undated subordinated debt (net of tax); €-155 million in exchange rate differences. d) DIVIDENDS PAID At the shareholders’ meeting held on April 30, 2013, shareholders approved a dividend distribution of €1,720 million with respect to the 2012 financial year. 6.2 Comprehensive income for the period The Statement of Comprehensive Income, presented as primary financial statements, includes net income for the period, the reserve relating to the change in fair value of available for sale financial instruments, the translation reserve, and actuarial gains and losses on employee benefit obligations. Half -Year 2014 Financial Report 110 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 6.2.1 COMPREHENSIVE INCOME FOR THE FIRST HALF OF 2014 a) RESERVE RELATED TO CHANGES IN FAIR VALUE OF AVAILABLE FOR SALE FINANCIAL INSTRUMENTS INCLUDED IN SHAREHOLDERS’ EQUITY The increase of gross unrealized gains and losses on assets available for sale totaled €+15,447 million, of which €+15,291 million increase in unrealized capital gains on debt securities which was mainly driven by interest rates and corporate spreads decrease. The following table shows the reconciliation between gross unrealized gains and losses on available for sale financial assets and the corresponding reserve recognized in shareholders’ equity: (in Euro million) June 30, 2014 December 31, 2013 Restated (a) Gross unrealized gains and losses 42,455 27,008 Less unrealized gains and losses attributable to: Shadow accounting on policyholders' participation (23,386) (14,270) Shadow accounting on Deferred Acquisition Costs (b) (815) (523) Shadow accounting on Value of purchased Business In force (251) (215) Unallocated unrealized gains and losses before tax (c) 18,003 11,998 Deferred tax (5,475) (3,580) Unrealized gains and losses (net of tax) - Assets available for sale 12,529 8,418 Unrealized gains and losses (net of tax) - Equity accounted companies (d) 28 8 UNREALIZED GAINS AND LOSSES (NET OF TAX) – 100% - TOTAL 12,557 8,426 Minority interests' share in unrealized gains and losses (e) (202) (104) Translation reserves (f) 76 166 UNREALIZED GAINS AND LOSSES (NET GROUP SHARE) (c) 12,430 8,488 (a) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. (b) Unrealized gains on total available for sale invested assets including loans. (c) Including unrealized gains and losses on assets from discontinued and/or held for sale operations. (d) Net of shadow accounting on unearned revenues and fees reserves. (e) Including foreign exchange impact attributable to minority interests. (f) Group share. As of June 30, 2014, most of the unrealized gains on assets available for sale related to the Life & Savings segment. In jurisdictions where participating business represents an important portion of contracts in force and where required minimum local policyholders’ share in the entities’ results (limited to investment or not) are significant, the reconciliation between gross unrealized gains and losses on available for sale financial assets and the corresponding net reserve recognized in shareholders’ equity were as follows as of June 30, 2014: June 30, 2014 (in Euro million) France Life & Savings Germany Life & Savings Switzerland Life & Savings Gross unrealized gains and losses (a) 14,032 6,529 3,112 Less unrealized gains and losses attributable to: Shadow accounting on policyholders' participation (10,452) (5,694) (2,546) Shadow accounting on Deferred Acquisition Costs (b) (184) (16) Shadow accounting on Value of purchased Business In force (71) Unallocated unrealized gains and losses before tax 3,396 836 479 Deferred tax (1,143) (267) (101) Unrealized gains and losses (net of tax) - Assets available for sale 2,253 568 378 Unrealized gains and losses (net of tax) - Equity accounted companies 23 UNREALIZED GAINS AND LOSSES (NET OF TAX) – 100% - TOTAL 2,276 568 378 Minority interests' share in unrealized gains and losses (c) (6) 0 Translation reserves (d) (169) UNREALIZED GAINS AND LOSSES (NET GROUP SHARE) 2,270 568 209 (a) Unrealized gains and losses on total available for sale invested assets including loans. (b) Net of shadow accounting on unearned revenues and fees reserves. (c) Including foreign exchange impact attributable to minority interests. (d) Group share. Half -Year 2014 Financial Report 111 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 The change in reserves related to changes in fair value of available for sale financial instruments included in shareholders’ equity relating to changes in fair value of assets in June 30, 2014 and December 31, 2013 broke down as follows: (in Euro million) June 30, 2014 December 31, 2013 Unrealized gains and losses (net of tax) 100%, opening 8,426 Transfer in the income statement on the period (a) (335) Investments bought in the current accounting period and changes in fair value (b) 4,418 Foreign exchange impact 86 Change in scope and other changes (b) (39) Unrealized gains and losses (net of tax) 100%, closing 12,556 (a) Transfer induced by disposal of financial assets, impairment write-back following reevaluation, or transfer of expenses following impairment charge during the period, and debt instruments discount premium impacts. (b) As described in Note 1.2, comparative information related to previous periods was retrospectively restated for the application of IFRS 10 and 11. b) CURRENCY TRANSLATION RESERVE The total impact of foreign exchange rate movement was €+546 million (of which €+530 million from group share and €+16 million from minority interests) as of June 30, 2014. The group share translation reserves movement (€+530 million) was mainly driven by Japan (€+238 million), the United Kingdom (€+193 million), Switzerland (€+89 million), the United States (€+71 million), Medla (€+45 million) and Asia excluding Japan (€+28 million), partly offset by Russia (€-72 million), and by the Company (€-121 million) driven by a change in fair value of hedging of net investments in foreign operations. c) EMPLOYEE BENEFITS ACTUARIAL GAINS AND LOSSES The total impact of employee benefits actuarial loss for the first half year 2014 amounted to €-455 million net group share, mostly due to the decrease in discount rates. 6.2.2 COMPREHENSIVE INCOME FOR THE FIRST HALF OF 2013 a) RESERVE RELATED TO CHANGES IN FAIR VALUE OF AVAILABLE FOR SALE FINANCIAL INSTRUMENTS INCLUDED IN SHAREHOLDERS’ EQUITY The decrease of gross unrealized gains and losses on assets available for sale totaled to €-10,282 million, of which €-10,222 million lower unrealized capital gains on debt securities which was mainly driven by interest rates increase. b) CURRENCY TRANSLATION RESERVE The total impact of foreign exchange rate movement was €-1,000 million (of which €-1,003 million from group share and €+3 million from minority interest rates) as of June 30, 2013. The group share translation reserves movement (€-1,003 million) was mainly driven by Japan (€-808 million), the United Kingdom (€-229 million) and Switzerland (€-172 million), partly offset by the Company (€+222 million) driven by change in fair value of derivatives and debts hedging net investments in foreign operations, and the United States (€+122 million). c) EMPLOYEE BENEFITS ACTUARIAL GAINS AND LOSSES The total impact of employee benefits actuarial gains for the first half year 2013 amounted to €+324 million net group share mostly due to the increase in discount rates. Half -Year 2014 Financial Report 112 11,177 (472) (1,866) (386) (27) 8,426 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 6.3 Change in minority interests Under IFRS, minority interests in most investment funds in which the Group invests consist of instruments that holders can redeem at will at fair value, and qualify as a liability rather than shareholders’ equity items. The same is true for puttable instruments held by minority interest holders. As described in Note 1.2, minority interests for the first half of 2013 were retrospectively restated for the application of IFRS 10 and IFRS 11. 6.3.1 CHANGE IN MINORITY INTERESTS FOR THE FIRST HALF OF 2014 The €76 million increase in minority interests to €2,597 million was mainly driven by the comprehensive income and transactions with minority interests’ holders: The comprehensive income for the period notably included the following: o Net income attributable to minority interests for €+151 million; o Reserves relating to changes in fair value through shareholders’ equity for €+97 million; o Foreign exchange movements for €+16 million; Transactions with minority interests’ holders, mainly included: o Dividend payout to minorities for €-197 million; o The acquisition of Colpatria in Colombia for €+43 million. 6.3.2 CHANGE IN MINORITY INTERESTS FOR THE FIRST HALF OF 2013 Minority interests increased by €79 million to €2,450 million including: Movements in the comprehensive income for the period, mainly Net income attributable to minority interests for €+154 million; Transaction with minority interests’ holders, mainly the dividend payout to minorities for €-158 million. Half -Year 2014 Financial Report 113 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 NOTE 7 FINANCING DEBT Carrying value (in Euro million) June 30, 2014 December 31, 2013 AXA Debt component of subordinated notes, 2.5% due 2014 (€) Debt component of subordinated convertible notes, 3.75% due 2017 (€) Subordinated notes, 5.25% due 2040 (€) Subordinated notes, 5.125% due 2043 (€) U.S. registered redeemable subordinated debt, 8.60% 2030 (US$) U.S. registered redeemable subordinated debt, 7.125% 2020 (£) Subordinated debt, 5.625% due 2054 (£) Derivatives relating to subordinated debts (a) AXA Financial Surplus notes, 7.70 %, due 2015 AXA Bank Europe Subordinated debt maturity below 10 years fixed rate 6,363 - 1,585 1,300 1,000 878 405 936 258 146 146 201 87 Undated Subordinated debt fixed rate 115 AXA-MPS Vita and Danni 79 Subordinated notes, euribor 6 months + 81bp 79 Other subordinated debt (under €100 million) 25 Subordinated debt 6,814 AXA 1,000 Euro Medium Term Notes, due through 2015 1,000 AXA Financial 255 Senior notes, 7%, due 2028 255 AXA UK Holdings GRE: Loan Notes, 6.625%, due 2023 190 190 Other financing debt instruments issued (under €100 million) 108 Other financing debt instruments issued (under €100 million) 155 Derivatives relating to other financing debt instruments issued (a) (47) Financing debt instruments issued 1,553 AXA 841 Other financing debt owed to credit institutions (under €100 million) 1 Financing debt owed to credit institutions 841 TOTAL FINANCING DEBT (b) 9,208 (a) Hedging instruments according to IAS 39 and economic hedge derivatives which are not qualified as hedge under IAS 39. (b) Excluding accrued interest on derivatives. Main movements on financing debt during the period were the following: the repayment of €2,122 million subordinated debt maturing on January 1, 2014. Issuance, on January 9, 2014, of £750 million (€936 million as of June 30, 2014 foreign exchange rate) subordinated debt due 2054 with an initial coupon at 5.625% per annum fixed until the first call date in January 2034 on January 9, 2014. Half -Year 2014 Financial Report 114 7,492 2,122 1,549 1,300 1,000 868 390 - 264 145 145 245 98 147 79 79 25 7,986 1,000 1,000 253 253 183 183 132 185 (53) 1,568 809 44 853 10,407 II CONSOLIDATED FINANCIAL STATEMENTS – HALF YEAR 2014 NOTE 8 NET INCOME PER ORDINARY SHARE The Group calculates a basic net income per ordinary share and a diluted net income per ordinary share: The calculation of the basic net income per ordinary share assumes no dilution and is based on the weighted average number of outstanding ordinary shares during the period. The calculation of diluted net income per ordinary share takes into account shares that may be issued as a result of stock option plans. The effect of stock option plans on the number of fully diluted shares is taken into account only if options are considered to be exercisable on the basis of the average stock price of the AXA share over the period. (in Euro million) (a) June 30, 2014 June 30, 2013 Net income Group share 3,008 2,467 Undated subordinated debt financial charge (148) (144) Net income including impact of undated subordinated debt A 2,860 2,323 Weighted average number of ordinary shares (net of treasury shares) - opening 2,414 2,372 Increase in capital (excluding stock options exercised) (b) 1 0 Stock options exercised (b) 1 2 Treasury shares (b) 2 6 Share purchase program (b) Weighted average number of ordinary shares B 2,418 2,381 BASIC NET INCOME PER ORDINARY SHARE C = A / B 1.18 0.98 Potentially dilutive instruments : Stock options 7 2 Other 8 6 Fully diluted - weighted average number of shares (c) D 2,433 2,388 NET INCOME INCLUDING IMPACT OF UNDATED SUBORDINATED DEBT 2,860 2,323 FULLY DILUTED NET INCOME PER ORDINARY SHARE E = A / D 1.18 0.97 (a) Except for number of shares (million of units) and earnings per share (Euro). (b)Weighted average. (c) Taking into account the impact of potentially dilutive instruments. As of June 30, 2014, net income per ordinary share stood at €1.18 on a basic calculation, and at €1.18 on a fully diluted basis. As of June 30, 2013, net income per ordinary share stood at €0.98 on a basic calculation, and at €0.97 on a fully diluted basis. Half -Year 2014 Financial Report 115 II STATUTORY AUDITORS’REVIEW III Statutory auditors’ review report on the 2014 Half-Year Financial Information Half -Year 2014 Financial Report 116 III STATUTORY AUDITORS’REVIEW PricewaterhouseCoopers Audit 63, rue de Villiers 92208 Neuilly-sur-Seine Cedex Mazars 61, rue Henri Regnault 92075 Paris La Défense Cedex STATUTORY AUDITORS’ REVIEW REPORT ON THE 2014 HALF-YEAR FINANCIAL INFORMATION To the Shareholders AXA S.A. 25 avenue Matignon 75008 Paris In compliance with the assignment entrusted to us by your General Meeting and in accordance with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code (Code monétaire et financier), we hereby report to you on: the review of the accompanying condensed half-year consolidated financial statements of AXA SA, for the six months ended June 30, 2014 ; the verification of the information contained in the half-year management report. 1. CONCLUSION ON THE FINANCIAL STATEMENTS We conducted our review in accordance with professional standards applicable in France. A review of interim financial information consists of making inquiries, 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 professional standards applicable in France 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. Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-year consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34 - the standard of IFRSs as adopted by the European Union applicable to interim financial information. 2. SPECIFIC VERIFICATION We have also verified the information given in the half-year management report on the condensed half-year consolidated financial statements subject to our review. We have no matters to report as to its fair presentation and consistency with the condensed half-year consolidated financial statements Neuilly-sur-Seine and Courbevoie, August 1, 2014 The Statutory Auditors French original signed by* PricewaterhouseCoopers Audit Mazars Michel Laforce Xavier Crépon Philippe Castagnac Gilles Magnan This is a free translation into English of the Statutory Auditors’ review report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France. Half -Year 2014 Financial Report 117 III STATEMENT OF THE PERSON RESPONSIBLE FOR THE HALF-YEAR REPORT IV Statement of the person responsible for the Half-Year Financial Report Half -Year 2014 Financial Report 118 IV STATEMENT OF THE PERSON RESPONSIBLE FOR THE HALF-YEAR REPORT Statement of the person responsible for the Half-Year Financial Report I certify, to the best of my knowledge, that the condensed financial statements for the past half-year have been prepared in accordance with applicable accounting standards and give a fair view of the assets, liabilities and financial position and profit or loss of the Company and all the undertakings included in the consolidation, and that the interim management report, to be found in the first part of this Report, presents a fair review of the important events that have occurred during the first six months of the financial year, their impact on the financial statements, major related-party transactions, and a description of the principal risks and uncertainties for the remaining six months of the financial year. Paris, August 4, 2014. Henri de Castries Chairman & Chief Executive Officer Person responsible for financial information Denis Duverne Deputy Chief Executive Officer, in charge of Finance, Strategy and Operations Half -Year 2014 Financial Report 119 IV"},"Input":{"kind":"string","value":"Semestriel, 2014, Insurance, AXA"},"Query":{"kind":"string","value":"write me a financial report"}}}],"truncated":false,"partial":false},"paginationData":{"pageIndex":2,"numItemsPerPage":100,"numTotalItems":355,"offset":200,"length":100}},"jwt":"eyJhbGciOiJFZERTQSJ9.eyJyZWFkIjp0cnVlLCJwZXJtaXNzaW9ucyI6eyJyZXBvLmNvbnRlbnQucmVhZCI6dHJ1ZX0sImlhdCI6MTc3NjgxMTgwMywic3ViIjoiL2RhdGFzZXRzL2VsaWVtL2ZpbmFuY2lhbF9yZXBvcnRzIiwiZXhwIjoxNzc2ODE1NDAzLCJpc3MiOiJodHRwczovL2h1Z2dpbmdmYWNlLmNvIn0.3gWLuupa5FcUfL2AoWzLhqfZZkN2nS-Zh-K2rK15viCmGdEr03EeGputBCdASQWa98ZnzEHf4wp8WsV8JLlJDQ","displayUrls":true,"splitSizeSummaries":[{"config":"default","split":"train","numRows":355,"numBytesParquet":23512906}]},"discussionsStats":{"closed":0,"open":1,"total":1},"fullWidth":true,"hasGatedAccess":true,"hasFullAccess":true,"isEmbedded":false,"savedQueries":{"community":[],"user":[]}}">
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Semestriel | 2,022 | Operator | MT | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
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Operator
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MT
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| FINANCIAL REPORT RAPPORT FINANCIER 1 Maroc Telecom • Financial report HY 2022 1 HY 2022 S1 2022 Preliminary remarks: This financial report and the condensed financial statements for the half year ended June 30th, 2021 were approved by the Management Board on July 22th, 2022, and reviewed by the Audit Committee at its m... | Semestriel, 2022, Operator, MT | write me a financial report |
Semestriel | 2,021 | Operator | MT | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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| 1 FINANCIAL REPORT HY 2021 Maroc Telecom • Financial Report HY 2021 1 Preliminary remarks: This financial report and the condensed financial statements for the half year ended June 30th, 2021 were approved by the Management Board on July 16th, 2021, and review by the Audit Committee at its meeting on July 26th, 2021. T... | Semestriel, 2021, Operator, MT | write me a financial report |
Semestriel | 2,020 | Operator | MT | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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| 1 FINANCIAL REPORT First Half of 2020 Maroc Telecom • Financial Report H1 2020 1 Preliminary remarks: This financial report and the condensed financial statements for the half year ended June 30th, 2020 were approved by the Management Board on July 16th, 2020, and reviewed by the Audit Committee at its meeting on July ... | Semestriel, 2020, Operator, MT | write me a financial report |
Semestriel | 2,019 | Operator | MT | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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| 1 FINANCIAL REPORT First Half of 2019 Maroc Telecom • Financial Report H1 2019 1 Preliminary remarks: This financial report and the condensed financial statements for the half year ended June 30th, 2019 were approved by the Management Board on July 16th, 2019. They were submitted to the Supervisory Board on July 19, 20... | Semestriel, 2019, Operator, MT | write me a financial report |
Semestriel | 2,024 | Healthcare | SiemensHealthineers | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Healthcare
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SiemensHealthineers
### Respon... | Siemens Healthineers Half-Year Financial Report First half of fiscal year 2024 siemens-healthineers.com Table of contents A. Interim group management report B. Half-year consolidated financial statements C. Additional information Page 3 A.1 Results of operations Page 13 B.1 Consolidated statements of Page 29 C.1 Respon... | Semestriel, 2024, Healthcare, SiemensHealthineers | write me a financial report |
Semestriel | 2,023 | x | x | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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| T R O P E R R A E Y F L A H (3) The Group’s orderbook is the contract value of assignments acquired as of 30 June (Half Year reporting), and 31 December (Full Year reporting) but that is not yet accounted for as turnover because of non-completion. The orderbook also includes the Group’s share in the orderbook of joint ... | Semestriel, 2023, x, x | write me a financial report |
Semestriel | 2,023 | x | vallourec | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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| 2023 Interim Financial Report Half-year ended June 30, 2023 1. 2. 3. 4. Summary STATEMENT BY THE PERSON RESPONSIBLE FOR THE INTERIM FINANCIAL REPORT HALF-YEAR ACTIVITY REPORT CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS OF THE VALLOUREC GROUP AS AT JUNE 30, 2023 STATUTORY AUDITORS’ REVIEW REPORT ON THE HALF-YEAR... | Semestriel, 2023, x, vallourec | write me a financial report |
Semestriel | 2,018 | Technology | SAP | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Technology
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SAP
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| January–June 2018 Half-Year Report Table of Contents Introductory Notes Consolidated Half-Year Management Report Consolidated Half-Year Financial Statements – IFRS Notes to the Consolidated Half-Year Financial Statements Supplementary Financial Information General Information Additional Information Half-Year Report Jan... | Semestriel, 2018, Technology, SAP | write me a financial report |
Semestriel | 2,018 | Healthcare | SiemensHealthineers | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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### Respon... | Half-year financial report | Siemens Healthineers P. 3 P. 19 P. 33 A.1 Business environment B.1 Consolidated Statements of C.1 Responsibility statement Income P. 5 P. 20 P. 34 A.2 Economic environment B.2 Consolidated Statements of Comprehensive Income C.2 Review report P. 6 P. 21 P. 35 A.3 Financial performance sys- B... | Semestriel, 2018, Healthcare, SiemensHealthineers | write me a financial report |
Semestriel | 2,017 | Technology | SAP | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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| Impact Through Innovation Half-Year Report January – June 2017 Society Economy Environment Table of Contents Introductory Notes Consolidated Half-Year Management Report Consolidated Half-Year Financial Statements – IFRS Notes to the Consolidated Half-Year Financial Statements Supplementary Financial Information General... | Semestriel, 2017, Technology, SAP | write me a financial report |
Semestriel | 2,016 | Technology | SAP | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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SAP
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| HALF-YEAR REPORT JANUARY – JUNE 2016 Reimagine Your Business Table of Contents Half-Year Report January – June 2016 Introductory Notes ..................................................................... 3 Half-Year Financial Report (unaudited) Consolidated Half-Year Management Report ......................... 4 Conso... | Semestriel, 2016, Technology, SAP | write me a financial report |
Semestriel | 2,023 | x | atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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| Half-Year Financial Report June 30, 2023 This Half-Year Financial Report is a translation into English of the official version of the Rapport Financier Semestriel which has been prepared in French for the semester ended June 30, 2023 filled with the AMF on July 31, 2023 and available on the AMF’s website (www.amf-franc... | Semestriel, 2023, x, atos | write me a financial report |
Semestriel | 2,023 | Technology | SAP | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Technology
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SAP
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| SAP Half-Year Report 2023 SAP Half-Year Report 2023 Table of Contents Introductory Notes Consolidated Half-Year Management Report Consolidated Half-Year Financial Statements – IFRS Supplementary Financial Information General Information Additional Information 3 4 23 49 55 57 2/59 SAP Half-Year Report 2023 Introductory ... | Semestriel, 2023, Technology, SAP | write me a financial report |
Semestriel | 2,023 | Healthcare | SiemensHealthineers | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Healthcare
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SiemensHealthineers
### Respon... | Siemens Healthineers Half-Year Financial Report First half of fiscal year 2023 siemens-healthineers.com Table of contents A. Interim group management report B. Half-year consolidated financial statements C. Additional information Page 3 A.1 Business principles Page 16 B.1 Consolidated statements of Page 31 C.1 Responsi... | Semestriel, 2023, Healthcare, SiemensHealthineers | write me a financial report |
Semestriel | 2,022 | Technology | SAP | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Technology
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SAP
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| SAP Half-Year Report 2022 2/57 Integrated Report 2021 SAP Half-Year Report 2022 Table of Contents Introductory Notes Consolidated Half-Year Management Report Consolidated Half-Year Financial Statements – IFRS Supplementary Financial Information General Information Additional Information 3 4 22 48 54 56 SAP Half-Year Re... | Semestriel, 2022, Technology, SAP | write me a financial report |
Semestriel | 2,022 | Healthcare | SiemensHealthineers | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Healthcare
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SiemensHealthineers
### Respon... | Siemens Healthineers Half-Year Financial Report First half of fiscal year 2022 siemens-healthineers.com Table of contents A. Interim group management report B. Half-year consolidated financial statements C. Additional information Page 3 A.1 Market development Page 14 B.1 Consolidated statements of Page 29 C.1 Responsib... | Semestriel, 2022, Healthcare, SiemensHealthineers | write me a financial report |
Semestriel | 2,021 | Technology | SAP | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Technology
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SAP
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| Table of Contents Introductory Notes Consolidated Half-Year Management Report Consolidated Half-Year Financial Statements – IFRS Supplementary Financial Information General Information Additional Information 2 3 4 18 41 47 48 SAP Half-Year Report 2021 Introductory Notes This half-year group report meets the requirement... | Semestriel, 2021, Technology, SAP | write me a financial report |
Semestriel | 2,021 | Healthcare | SiemensHealthineers | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Healthcare
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SiemensHealthineers
### Respon... | Siemens Healthineers Half-Year Financial Report First half of fiscal year 2021 siemens-healthineers.com Table of contents A. Interim group management report B. Half-year consolidated financial statements C. Additional information Page 3 A.1 Business principles Page 13 B.1 Consolidated statements of income Page 28 C.1 R... | Semestriel, 2021, Healthcare, SiemensHealthineers | write me a financial report |
Semestriel | 2,020 | Technology | SAP | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Technology
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SAP
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| Table of Contents Introductory Notes Consolidated Half-Year Management Report Consolidated Half-Year Financial Statements – IFRS Supplementary Financial Information General Information Additional Information 2 3 4 18 41 47 48 SAP Half-Year Report 2020 Introductory Notes This half-year group report meets the requirement... | Semestriel, 2020, Technology, SAP | write me a financial report |
Semestriel | 2,020 | Healthcare | SiemensHealthineers | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Healthcare
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SiemensHealthineers
### Respon... | Siemens Healthineers Half-Year Financial Report First half of fiscal year 2020 siemens-healthineers.com Table of contents A. Interim group management report B. Half-year consolidated financial statements C. Additional information Page 3 A.1 Market development Page 10 B.1 Consolidated statements of income Page 24 C.1 Re... | Semestriel, 2020, Healthcare, SiemensHealthineers | write me a financial report |
Semestriel | 2,019 | Technology | SAP | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Technology
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SAP
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| Table of Contents Introductory Notes Consolidated Half-Year Management Report Consolidated Half-Year Financial Statements – IFRS Notes to the Consolidated Half-Year Financial Statements Supplementary Financial Information General Information Additional Information 2 3 4 20 26 43 48 49 SAP Half-Year Report 2019 Introduc... | Semestriel, 2019, Technology, SAP | write me a financial report |
Semestriel | 2,019 | Healthcare | SiemensHealthineers | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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Healthcare
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SiemensHealthineers
### Respon... | Siemens Healthineers Half-Year Financial Report First half of fiscal year 2019 siemens-healthineers.com Table of contents A. Interim group management report B. Half-year consolidated financial statements C. Additional information Page 3 A.1 Results of operations Page 9 B.1 Consolidated statements of income Page 22 C.1 ... | Semestriel, 2019, Healthcare, SiemensHealthineers | write me a financial report |
Semestriel | 2,023 | Energy | TaqaMorocco | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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### Subject:
Energy
### Company:
TaqaMorocco
### Response:
| RAPPORT FINANCIER SEMESTRIEL 2023 TOUTE NOTRE ÉNERGIE POUR FAIRE BRILLER LE MAROC DE DEMAIN sommaire 04 Présentation de TAQA Morocco 04 Activité de la société durant le semestre écoulé 04 Évènements importants survenus depuis la date de clôture du semestre écoulé 05 Présentation des comptes semestriels 10 Comptes conso... | Semestriel, 2023, Energy, TaqaMorocco | write me a financial report |
Semestriel | 2,022 | Energy | TaqaMorocco | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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### Subject:
Energy
### Company:
TaqaMorocco
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| TOUTE NOTRE ÉNERGIE POUR FAIRE BRILLER LE MAROC DE DEMAIN Rapport Financier Semestriel 2022 1 - TAQA MOROCCO - Rapport Financier Semestriel 2022 sommaire P3 Présentation de TAQA Morocco P4 Activité de la société durant le semestre écoulé P4 Évènements importants survenus depuis la date de clôture du semestre écoulé P5 ... | Semestriel, 2022, Energy, TaqaMorocco | write me a financial report |
Semestriel | 2,021 | Energy | TaqaMorocco | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
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### Subject:
Energy
### Company:
TaqaMorocco
### Response:
| R E I C N A N 1 2 0 2 N I I F U J TOUTE NOTRE ENERGIE POUR FAIRE BRILLER LE MAROC T R O P P A R 0 3 U A 2 2 E R I A M M O S P6 P6 P7 P7 P13 1 PRÉSENTATION DE TAQA MOROCCO 2 ACTIVITÉ DE LA SOCIÉTÉ DURANT LE SEMESTRE ÉCOULÉ 3 ÉVÉNEMENTS IMPORTANTS SURVENUS DEPUIS LA DATE DE CLÔTURE DU SEMESTRE ÉCOULÉ 4 PRÉSENTATION DES C... | Semestriel, 2021, Energy, TaqaMorocco | write me a financial report |
Semestriel | 2,020 | Energy | TaqaMorocco | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TaqaMorocco
### Response:
| RAPPORT FINANCIER AU 30 JUIN 2020 2 2 Sommaire I • PRÉSENTATION DE TAQA MOROCCO II • ACTIVITÉ DE LA SOCIÉTÉ DURANT LE SEMESTRE ÉCOULÉ III • ÉVÉNEMENTS IMPORTANTS SURVENUS DEPUIS LA DATE DE CLÔTURE DU SEMESTRE ÉCOULÉ IV • PRÉSENTATION DES COMPTES ANNUELS V • COMPTES CONSOLIDÉS ET SOCIAUX AU 30 JUIN 2020 06 06 07 07 12 3... | Semestriel, 2020, Energy, TaqaMorocco | write me a financial report |
Semestriel | 2,019 | Energy | TaqaMorocco | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TaqaMorocco
### Response:
| R a p p o r t F i n a n c i e r au 30 Juin 2019 1 22 Sommaire I • PRÉSENTATION DE TAQA MOROCCO II • ACTIVITÉ DE LA SOCIÉTÉ DURANT LE SEMESTRE ÉCOULÉ III • ÉVÉNEMENTS IMPORTANTS SURVENUS DEPUIS LA DATE DE CLÔTURE DU SEMESTRE ÉCOULÉ IV • PRÉSENTATION DES COMPTES ANNUELS V • COMPTES SOCIAUX ET CONSOLIDÉS AU 30 JUIN 2019 0... | Semestriel, 2019, Energy, TaqaMorocco | write me a financial report |
Semestriel | 2,007 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| Financial report 1st half 2007 Content 1 Financial report - 1st half 2007 Key figures and consolidated accounts Group results Analysis of business segment results TOTAL S.A. accounts Summary and outlook Other information Main operating information by segment Adjustment items Net-debt-to-equity ratio Return on average c... | Semestriel, 2007, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,008 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| TOTP150-couv_FR_GB 30/07/08 11:45 Page 1 Financial report 1st half 2008 Content 1 Financial report - 1st half 2008 Key figures and consolidated accounts Group results Analysis of business segment results Cancellation of outstanding shares TOTAL S.A. accounts Summary and outlook Other information Main operating informat... | Semestriel, 2008, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,009 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| FINANCIAL REPORT 1st half 2009 Content 1 Financial report - 1st half 2009 Key figures Group results Analysis of business segment results Cancellation of shares TOTAL S.A. — parent company accounts Summary and outlook Other information Main operating information by segment Adjustment items Investments — Divestments Net-... | Semestriel, 2009, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,010 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| Financial report 2010 1st half 1 FINANCIAL REPORT - 1ST HALF 2010 Key figures Group results Analysis of business segment results TOTAL S.A.—parent company accounts Summary and outlook Other information Principal risks and uncertainties for the remaining six months of 2010 Disclaimer p. 3 p. 3 p. 4 p. 6 p. 10 p. 10 p. 1... | Semestriel, 2010, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,011 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| Financial Report 1st half 2011 Contents 1. Financial Report - 1st half 2011 1. Key figures .......................................1 2. Group results ...................................2 2.1. Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 2.2. Net income . . . . . . . . . . . . . . . . .... | Semestriel, 2011, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,012 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| Financial Report 1st half 2012 Contents 1. Financial Report - 1st half 2012 1. Key figures .......................................1 2. Group results...................................2 2.1. Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 2.2. Net income . . . . . . . . . . . . . . . . . ... | Semestriel, 2012, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,013 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| Financial Report 1st half 2013 Contents 1. Financial Report - 1st half 2013 1. Key figures.......................................1 2. Group results...................................2 2.1. Operating income ..............................................................2 2.2. Net income ..................................... | Semestriel, 2013, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,014 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| Financial Report - 1st half 2014 Contents 1. Financial Report - 1st half 2014 1. Key figures.......................................1 2. Group results of first half 2014 ........2 2.1. Net operating income from business segments ..............2 2.2. Net income (Group share) ................................................. | Semestriel, 2014, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,015 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| Financial Report - 1st half 2015 Contents 1. Financial Report - 1st half 2015 1. Key figures.......................................1 2. Highlights since the beginning of 2015............................................2 3. Analysis of business segments ........2 3.1. Upstream .............................................. | Semestriel, 2015, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,016 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| FIRST HALF 2016 financial report Contents 1. Financial Report – 1st half 2016 1. Key figures.......................................1 2. Highlights since the beginning of 2016............................................2 3. Analysis of business segments ........2 3.1. Upstream .............................................. | Semestriel, 2016, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,017 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| FIRST HALF 2017 financial report Contents 1. Financial report 1. Key figures.......................................1 2. Highlights since the beginning of 2017 ...........................................2 3. Analysis of business segments ........2 3.1. Exploration & Production............................................... | Semestriel, 2017, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,018 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| FINANCIAL REPORT FIRST HALF 2018 1 TABLE OF CONTENTS Half-year fi nancial report 1.1 Key fi gures 1.2 Highlights since the beginning of 2018 1.3 Analysis of business segments 1.3.1 Exploration & Production 1.3.2 Gas, Renewables & Power 1.3.3 Refi ning & Chemicals 1.3.4 Marketing & Services 1.4 Group results 1.4.1 Adjusted... | Semestriel, 2018, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,019 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| FINANCIAL REPORT FIRST HALF 2019 1 TABLE OF CONTENTS Certification of the person responsible for the half- year financial report........................................1 Glossary ..........................................................................2 Half year financial report 3 1.1 Key figures......................... | Semestriel, 2019, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,020 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| see you on total.com Financial report first half 2020 Table of contents Certification of the person responsible for the half-year financial report Glossary 1 Half-year financial report 1.1 Highlights since the beginning of 2020 1.2 Key figures from TOTAL Consolidated Financial Statements 1.3 Key figures of environment ... | Semestriel, 2020, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,021 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| Financial report First half 2021 Table of contents Certification of the person responsible for the half-year financial report 1 Glossary 2 01 Half year financial report 3 02 Consolidated Financial Statements as of June 30, 2021 1.1 Highlights since the beginning of 2021 3 2.1 StatutoryAuditors’ReviewReportontheh... | Semestriel, 2021, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,022 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| Financial reportFirst half 2022 Table of contents Certification of the person responsible for the half-year financial report Glossary 3 4 2 Consolidated Financial Statements as of June 30, 2022 1 Half year financial report 1.1 1.2 1.3 Highlights since the beginning of 2022 Key figures from TotalEnergies’ consolidated f... | Semestriel, 2022, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,023 | Energy | TotalEnergies | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Energy
### Company:
TotalEnergies
### Response:
| Financial report First half 2023 Table of contents Certification of the person responsible for the half-year financial report Glossary 1 Half year financial report 1.1 1.2 1.3 Highlights since the beginning of 2023 Key figures from TotalEnergies’ consolidated financial statements Key figures of environment, greenhouse ... | Semestriel, 2023, Energy, TotalEnergies | write me a financial report |
Semestriel | 2,006 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| ADVANCE YOUR BUSINESS 2006 HALF-YEAR REPORT Atos Origin Half-Year Report 2006 1/70 CONTENTS 1 FINANCIAL PERFORMANCE FOR THE SIX MONTHS ENDED 30 JUNE 2006 ........................... 4 2 CEO MESSAGE ............................................................................................................................. | Semestriel, 2006, IT, Atos | write me a financial report |
Semestriel | 2,007 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| TURNING CLIENT VISION INTO RESULTS ADVANCE WITH ATOS ORIGIN 2007 HALF-YEAR REPORT This document is a full free translation of the original French text. The original document has been filed with the Autorité des Marchés Financiers (AMF) on 28 August 2007, in accordance with article 212-13 of the AMF’s general regulation... | Semestriel, 2007, IT, Atos | write me a financial report |
Semestriel | 2,008 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| TURNING CLIENT VISION INTO RESULTS INNOVATION DRIVES TRANSFORMATION 2008 HALF-YEAR REPORT This document is a full free translation of the original French text. The original document has been filed with the Autorité des Marchés Financiers (AMF) on 28 August 2008, in accordance with article 212-13 of the AMF’s general re... | Semestriel, 2008, IT, Atos | write me a financial report |
Semestriel | 2,009 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| TURNING CLIENT VISION INTO RESULTS DELIVERING EXCELLENCE 2009 HALF-YEAR REPORT This document is a full free translation of the original French text. The original document has been filed with the Autorité des Marchés Financiers (AMF) on 31 July 2009, in accordance with article 212-13 of the AMF’s general regulations. At... | Semestriel, 2009, IT, Atos | write me a financial report |
Semestriel | 2,010 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| TURNING CLIENT VISION INTO RESULTS 2010 HALF-YEAR REPORT This document is a full free translation of the original French text. The original document has been filed with the Autorité des Marchés Financiers (AMF) on 30 July 2010, in accordance with article 212-13 of the AMF’s general regulations. Page 1 of 95 CONTENTS FI... | Semestriel, 2010, IT, Atos | write me a financial report |
Semestriel | 2,011 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| SECOND UPDATE OF THE 2010 REFERENCE DOCUMENT (Half -yearly 2011 financial report included) This document is a full free translation of the original French text. This update of the 2010 Reference Document has been filed with the Autorité des Marchés Financiers (AMF) on 29 July 2011 pursuant to article 212-13 of the AMF’... | Semestriel, 2011, IT, Atos | write me a financial report |
Semestriel | 2,012 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Update of the 2011 Reference Document (Including the half-yearly financial report) This document is a full free translation of the original French text. This update of the 2011 Reference Document has been filed with the Autorité des Marchés Financiers (AMF) on 2nd August 2012 pursuant to article 212-13 of the AMF’s gen... | Semestriel, 2012, IT, Atos | write me a financial report |
Semestriel | 2,013 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Update of the 2012 Registration Document Including the half year financial report This document is a full free translation of the original French text. In case of discrepancies, the French version shall prevail. The original French document has been filed with the Autorité des Marchés Financiers (AMF) on July 31st, 201... | Semestriel, 2013, IT, Atos | write me a financial report |
Semestriel | 2,014 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Update of the 2013 Registration Document Including the half year financial report This document is a full free translation of the original French text. In case of discrepancies, the French version shall prevail. The original document has been filed with the Autorité des Marchés Financiers (AMF) on August 5, 2014, in ac... | Semestriel, 2014, IT, Atos | write me a financial report |
Semestriel | 2,015 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Update of the 2014 Registration Document Including the half year financial report This document is a full free translation of the original French text. In case of discrepancies, the French version shall prevail. The original document has been filed with the Autorité des Marchés Financiers (AMF) on August 7, 2015, in ac... | Semestriel, 2015, IT, Atos | write me a financial report |
Semestriel | 2,016 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Update of the 2015 Registration Document Including the 2016 half-year financial report This document is a full free translation of the original French text. In case of discrepancies, the French version shall prevail. The original Update of the 2015 Registration Document has been filed with the Autorité des Marchés Fina... | Semestriel, 2016, IT, Atos | write me a financial report |
Semestriel | 2,017 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Update of the 2016 Registration Document Including the 2017 half-year financial report This document is a full free translation of the original French text. In case of discrepancies, the French version shall prevail. The original Update of the 2016 Registration Document has been filed with the Autorité des Marchés Fina... | Semestriel, 2017, IT, Atos | write me a financial report |
Semestriel | 2,018 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Update of the 2017 Registration Document Including the 2018 half-year financial report This document is a full free translation of the original French text. In case of discrepancies, the French version shall prevail. The original Update of the 2017 Registration Document has been filed with the Autorité des Marchés Fina... | Semestriel, 2018, IT, Atos | write me a financial report |
Semestriel | 2,019 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| 2018 Universal Registration Document (URD) Including the 2019 half-year financial report This document is a free English translation of the original French version. In case of discrepancies, the French version shall prevail. The French version of this Universal Registration Document was filed with the Autorité des Marc... | Semestriel, 2019, IT, Atos | write me a financial report |
Semestriel | 2,020 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Amendment to the 2019 Universal Registration Document (URD) Including the 2020 half-year financial report Only the French version of the amendment to the 2019 Universal Registration Document has been submitted to the Autorité des Marchés Financier (AMF). It is therefore the only version that is legally binding. This am... | Semestriel, 2020, IT, Atos | write me a financial report |
Semestriel | 2,021 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Amendment to the 2020 Universal Registration Document (URD) Including the 2021 half-year financial report Only the French version of the amendment to the 2020 Universal Registration Document has been submitted to the Autorité des Marchés Financier (AMF). It is therefore the only version that is legally binding. This am... | Semestriel, 2021, IT, Atos | write me a financial report |
Semestriel | 2,022 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Amendment to the 2021 Universal Registration Document (URD) Including the 2022 half-year financial report Only the French version of the amendment to the 2021 Universal Registration Document has been submitted to the Autorité des Marchés Financier (AMF). It is therefore the only version that is legally binding. This am... | Semestriel, 2022, IT, Atos | write me a financial report |
Semestriel | 2,023 | IT | Atos | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Atos
### Response:
| Half-Year Financial Report June 30, 2023 This Half-Year Financial Report is a translation into English of the official version of the Rapport Financier Semestriel which has been prepared in French for the semester ended June 30, 2023 filled with the AMF on July 31, 2023 and available on the AMF’s website (www.amf-franc... | Semestriel, 2023, IT, Atos | write me a financial report |
Semestriel | 2,016 | Supplies | BIC | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Supplies
### Company:
BIC
### Response:
| R E R U D R U O P ) S ( T I A F * MADE TO LAST* 6 HALF-YEAR FINANCIAL REPORT S T N E T N O C MANAGEMENT REPORT OF THE BOARD OF DIRECTORS FOR THE 6 MONTHS PERIOD ENDED JUNE 30, 2016 1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 1.7. 1.8. 1.9. 1.10. 1.11. 1.12. 1.13. 1.14. 1.15. Key figures H1 2016 Highlights H1 2016 Group operational t... | Semestriel, 2016, Supplies, BIC | write me a financial report |
Semestriel | 2,017 | Supplies | BIC | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Supplies
### Company:
BIC
### Response:
| For youFor everyoneHALF YEAR FINANCIAL REPORTMade to last2017 CONTENTS MANAGEMENT REPORT OF THE BOARD OF DIRECTORS FOR THE 6 MONTH PERIOD ENDED JUNE 30, 2017 1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 1.7. 1.8. 1.9. 1.10. 1.11. 1.12. 1.13. 1.14. 1.15. 1.16. 1 2 3 4 7 8 9 9 10 11 11 11 12 12 12 12 13 Key Figures H1 2017 Highlights H... | Semestriel, 2017, Supplies, BIC | write me a financial report |
Semestriel | 2,018 | Supplies | BIC | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Supplies
### Company:
BIC
### Response:
| 2018 HALF YEAR FINANCIAL REPORT • CONTENTS MANAGEMENT REPORT OF THE BOARD OF DIRECTORS FOR THE 6-MONTH PERIOD ENDED JUNE 30, 2018 1.1. 1.2. 1.3. 1.4. 1.5. 1.6. 1.7. 1.8. 1.9. 1.10. 1.11. 1.12. 1.13. 1.14. 1.15. 1 2 3 4 7 8 9 9 10 11 11 11 11 11 12 12 Key figures H1 2018 Highlights H1 2018 Group operational trends H1 20... | Semestriel, 2018, Supplies, BIC | write me a financial report |
Semestriel | 2,019 | Supplies | BIC | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Supplies
### Company:
BIC
### Response:
| null | Semestriel, 2019, Supplies, BIC | write me a financial report |
Semestriel | 2,020 | Supplies | BIC | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Supplies
### Company:
BIC
### Response:
| null | Semestriel, 2020, Supplies, BIC | write me a financial report |
Semestriel | 2,021 | Supplies | BIC | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Supplies
### Company:
BIC
### Response:
| SOCIÉTÉ BIC92611 CLICHY CEDEX (FRANCE)www.bic.com HALF-YEAR FINANCIAL2O21Report MANAGEMENT REPORT OF THE BOARD OF DIRECTORS FOR THE 6-MONTH PERIOD ENDED JUNE 30, 2021 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Key figures H1 2021 highlights H1 2021 Group operational trends H1 2021 operational trends by division Group Net Sales by geo... | Semestriel, 2021, Supplies, BIC | write me a financial report |
Semestriel | 2,022 | Supplies | BIC | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Supplies
### Company:
BIC
### Response:
| 2022 HALF-YEAR FINANCIAL REPORT MANAGEMENT REPORT OF THE BOARD OF DIRECTORS FOR THE 6-MONTH PERIOD ENDED JUNE 30, 2022 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Key figures H1 2022 highlights H1 2022 Group operational trends H1 2022 operational trends by division Group net sales by geography 2022 outlook and market assumptions R... | Semestriel, 2022, Supplies, BIC | write me a financial report |
Semestriel | 2,023 | Supplies | BIC | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Supplies
### Company:
BIC
### Response:
| 2023 Half-year financial report S T N E T N O C 1 MANAGEMENT REPORT OF THE BOARD OF DIRECTORS FOR THE 6‑MONTH PERIOD ENDED JUNE 30, 2023 1.1 Key figures 1.2 H1 2023 highlights 1.3 H1 2023 Group operational trends 1.4 H1 2023 operational trends by division 1.5 Group net sales by geography 1.6 2023 Outlook and market ass... | Semestriel, 2023, Supplies, BIC | write me a financial report |
Semestriel | 2,022 | IT | Alten | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Alten
### Response:
| HALF-YEAR FINANCIAL REPORT 2022 TABLE OF CONTENTS 2022 HALF-YEAR BUSINESS REPORT ................................................................................................................. 4 BUSINESS OVERVIEW ............................................................................................................ | Semestriel, 2022, IT, Alten | write me a financial report |
Semestriel | 2,015 | IT | Alten | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Alten
### Response:
| 2015 Half-year financial report ALTEN, French public limited company (Société Anonyme) with capital of €34,181,274.81 Registered Office: 40 Avenue André Morizet 92100 Boulogne Billancourt Listed in the Nanterre Trade and Companies Register under No. 348 607 417 - 1 - Contents 2015 half-year financial report .............. | Semestriel, 2015, IT, Alten | write me a financial report |
Semestriel | 2,019 | IT | Alten | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Alten
### Response:
| Half-Year Financial Report 2O19 www.alten.com Contents 2019 HALF-YEAR MANAGEMENT REPORT ............................................................................................ 4 BUSINESS OVERVIEW........................................................................................................................... | Semestriel, 2019, IT, Alten | write me a financial report |
Semestriel | 2,023 | IT | Alten | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Alten
### Response:
| 1 TABLE OF CONTENTS 2023 HALF-YEAR BUSINESS REPORT ................................................................................................................. 4 BUSINESS OVERVIEW .......................................................................................................................................... | Semestriel, 2023, IT, Alten | write me a financial report |
Semestriel | 2,021 | IT | Alten | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Alten
### Response:
| 1 TABLE OF CONTENTS BUSINESS OVERVIEW 4 FINANCIAL OVERVIEW RELATED-PARTY TRANSACTIONS EVENTS SINCE 30 JUNE 2021 MAIN RISKS AND UNCERTAINTIES IN THE SECOND HALF OF 2021 2021 OUTLOOK 1. HALF-YEAR CONSOLIDATED FINANCIAL STATEMENTS 8 1.1 1.2 1.3 1.4 CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED INCOME STATEMENT... | Semestriel, 2021, IT, Alten | write me a financial report |
Semestriel | 2,018 | IT | Alten | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Alten
### Response:
| Half-year financial report 2018 ALTEN, French limited company (Société Anonyme) with capital of €35,521,455.90 Registered office: 40 Avenue André Morizet 92100 Boulogne Billancourt Listed in the Nanterre Trade and Companies Register under No. 348 607 417 - 1 - Contents 2018 HALF-YEAR MANAGEMENT REPORT .................... | Semestriel, 2018, IT, Alten | write me a financial report |
Semestriel | 2,017 | IT | Alten | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Alten
### Response:
| 2017 half-year financial report ALTEN, French limited company (Société Anonyme) with capital of €34,300,388.92 Registered office: 40 Avenue André Morizet 92100 Boulogne Billancourt Listed in the Nanterre Trade and Companies Register under No. 348 607 417 - 1 - Contents 2017 half-year management report .................... | Semestriel, 2017, IT, Alten | write me a financial report |
Semestriel | 2,016 | IT | Alten | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
IT
### Company:
Alten
### Response:
| 2016 Half-year financial report ALTEN, French public limited company (Société Anonyme) with capital of €34,238,752.31 Registered Office: 40 Avenue André Morizet 92100 Boulogne Billancourt Listed in the Nanterre Trade and Companies Register under No. 348 607 417 - 1 - Contents 2016 half-year financial report .............. | Semestriel, 2016, IT, Alten | write me a financial report |
Semestriel | 2,017 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| FIRST HALF-YEAR 2017 Allianz Group Interim Report 2017 To go directly to any chapter, simply click on the headline or the page number. All references to chapters, pages, notes, internet pages, etc. within this report are also linked. CONTENT A _ Interim Group Management Report Pages 1 - 18 2 Executive Summary 4 Prope... | Semestriel, 2017, Insurance, Allianz | write me a financial report |
Semestriel | 2,018 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| FIRST HALF-YEAR 2018 ALLIANZ GROUP INTERIM REPORT 2018 To go directly to any chapter, simply click on the headline or the page number. All references to chapters, pages, notes, internet pages, etc. within this report are also linked. CONTENT A _ Interim Group Management Report Pages 1 – 18 2 Executive Summary 4 Prope... | Semestriel, 2018, Insurance, Allianz | write me a financial report |
Semestriel | 2,019 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| ALLIANZ GROUP FIRST HALF-YEAR 2019 INTERIM REPORT 2019 To go directly to any chapter, simply click on the headline or the page number. All references to chapters, pages, notes, internet pages, etc. within this report are also linked. CONTENT A _ Interim Group Management Report Pages 1 – 16 2 Executive Summary 4 Prope... | Semestriel, 2019, Insurance, Allianz | write me a financial report |
Semestriel | 2,020 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| ALLIANZ GROUP FIRST HALF-YEAR 2020 INTERIM REPORT 2020 To go directly to any chapter, simply click on the headline. All references to chapters, notes, internet pages, etc. within this report are also linked. CONTENT A _ Interim Group Management Report Pages 1 – 18 2 Executive Summary 5 Property-Casualty Insurance Ope... | Semestriel, 2020, Insurance, Allianz | write me a financial report |
Semestriel | 2,021 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| ALLIANZ GROUP FIRST HALF-YEAR 2021 INTERIM REPORT 2021 To go directly to any chapter, simply click on the headline. All references to chapters, notes, internet pages, etc. within this report are also linked. CONTENT A _ Interim Group Management Report Pages 1 – 18 2 Executive Summary 4 Property-Casualty Insurance O... | Semestriel, 2021, Insurance, Allianz | write me a financial report |
Semestriel | 2,022 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| Allianz Group Interim Report 2022 First Half-Year CONTENT A _ Interim Group Management Report 2 Executive Summary 5 Property-Casualty Insurance Operations 7 Life/Health Insurance Operations 10 Asset Management 12 Corporate and Other 13 Outlook 15 Balance Sheet Review 17 Reconciliations B _ Condensed Consolidated Interi... | Semestriel, 2022, Insurance, Allianz | write me a financial report |
Semestriel | 2,023 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| Condensed C To go directly to any chapter, simply click on the headline or the page number. CONTENT A _ Interim Group Management Report 4 Executive Summary 6 Property-Casualty Insurance Operations 8 Life/Health Insurance Operations 10 Asset Management 12 Corporate and Other 13 Outlook 15 Balance Sheet Review 17 Recon... | Semestriel, 2023, Insurance, Allianz | write me a financial report |
Semestriel | 2,016 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| 6M Allianz Group Interim Report for the First Half-Year of 2016 To go directly to any chapter, simply click on the headline or the page number. All references to chapters, pages, notes, internet pages, etc. within this report are also linked. Content A InterIm Group mAnAGement report pAGes 1 - 18 2 4 6 9 Executive Summ... | Semestriel, 2016, Insurance, Allianz | write me a financial report |
Semestriel | 2,015 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| 2Q Allianz Group Interim Report Second Quarter and First Half Year of 2015 Allianz at a glance Quarterly and half-year results Income statement Total revenues1 € mn Operating profit2 € mn Net income2 € mn thereof: attributable to shareholders € mn Business segments3 Property-Casualty Gross premiums written € mn Operati... | Semestriel, 2015, Insurance, Allianz | write me a financial report |
Semestriel | 2,014 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| 2Q Allianz Group Interim Report Second Quarter and First Half Year of 2014 Allianz at a glance Quarterly aND HalF year results three months ended 30 June six months ended 30 June 2014 2013 Change from previous year 2014 2013 Change from previous year More details on page Income statement Total revenues1 € mN 29,456 26,... | Semestriel, 2014, Insurance, Allianz | write me a financial report |
Semestriel | 2,013 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| 2Q Allianz Group Interim Report Second Quarter and First Half Year of 2013 Allianz at a glance Quarterly and half year results 01 three months ended 30 June six months ended 30 June 2013 2012 Change from previous year 2013 2012 Change from previous year More details on page Income statement Total revenues 1 € mn 26,776... | Semestriel, 2013, Insurance, Allianz | write me a financial report |
Semestriel | 2,012 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| Allianz Group Interim Report Second Quarter and First Half Year of 2012 Allianz at a Glance Three months ended 30 June Six months ended 30 June 2012 2011 Change from previous year 2012 2011 Change from previous year I N C O M E S TAT E M E N T Total revenues 1 Operating profit 2 € mn € mn 25,196 2,364 24,574 2,300 2.5 ... | Semestriel, 2012, Insurance, Allianz | write me a financial report |
Semestriel | 2,011 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| Allianz Group Interim Report Second Quarter and First Half Year of 2011 Content Group Management Report 2 Executive Summary 10 Property-Casualty Insurance Operations 22 Life/Health Insurance Operations 28 Asset Management 32 Corporate and Other 34 Outlook 36 Balance Sheet Review 44 Reconciliations Condensed Consolidate... | Semestriel, 2011, Insurance, Allianz | write me a financial report |
Semestriel | 2,010 | Insurance | Allianz | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
Allianz
### Response:
| Allianz Group Interim Report Second Quarter and First Half Year of 2010 Content Group Management Report 2 10 18 24 Asset Management 28 Corporate and Other Balance Sheet Review 31 Reconciliations 39 Executive Summary and Outlook Property-Casualty Insurance Operations Life/Health Insurance Operations Allianz Share Develo... | Semestriel, 2010, Insurance, Allianz | write me a financial report |
Semestriel | 2,007 | Insurance | AXA | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
AXA
### Response:
| ________________________________________________________________________________________ AXA – Half Year Financial Report – June 30, 2007 Half Year Financial Report June 30, 2007 ________________________________________________________________________________________ AXA – Half Year Financial Report – June 30, 2007 Tab... | Semestriel, 2007, Insurance, AXA | write me a financial report |
Semestriel | 2,008 | Insurance | AXA | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
AXA
### Response:
| Half Year Financial Report June 30, 2008 TABLE OF CONTENTS I Activity report II Consolidated financial report III Half Year financial report Statement IV Report of Statutory Auditors on the Half Year consolidated financial statements ______________________________________________________________________________________... | Semestriel, 2008, Insurance, AXA | write me a financial report |
Semestriel | 2,009 | Insurance | AXA | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
AXA
### Response:
| Half Year Financial Report June 30, 2009 Table of contents I Activity Report....................................................................... II Consolidated financial statements ...................................... III Statement of the person responsible for the Half Year Financial Report......................... | Semestriel, 2009, Insurance, AXA | write me a financial report |
Semestriel | 2,010 | Insurance | AXA | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
AXA
### Response:
| Half Year Financial Report June 30, 2010 Table of contents I Activity Report....................................................................... II Consolidated financial statements ...................................... III Statement of the person responsible for the Half Year Financial Report......................... | Semestriel, 2010, Insurance, AXA | write me a financial report |
Semestriel | 2,011 | Insurance | AXA | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
AXA
### Response:
| Half Year Financial Report June 30, 2011 Table of contents I Activity Report....................................................................... II Consolidated financial statements ...................................... III Statutory auditors’ review report on the 2011 Half Year Financial Information ................. | Semestriel, 2011, Insurance, AXA | write me a financial report |
Semestriel | 2,012 | Insurance | AXA | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
AXA
### Response:
| Half Year Financial Report June 30, 2012 Table of contents I Activity Report ...................................................................... II Consolidated financial statements ...................................... III Statutory auditors’ review report on the 2012 Half Year Financial Information ................. | Semestriel, 2012, Insurance, AXA | write me a financial report |
Semestriel | 2,013 | Insurance | AXA | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
AXA
### Response:
| Half Year Financial Report June 30, 2013 Table of contents I Activity Report ............................................................. II Consolidated financial statements ............................ III Statutory auditors’ review report on the 2013 Half Year Financial Information .................................... | Semestriel, 2013, Insurance, AXA | write me a financial report |
Semestriel | 2,014 | Insurance | AXA | Below is an instruction that describes a reporting task, paired with the specifics of the report. Write a response that appropriately completes the reporting task.
### Instruction:
Write a detailed financial report on the given subject and company.
### Subject:
Insurance
### Company:
AXA
### Response:
| Half Year Financial Report June 30, 2014 Table of contents I Activity Report ............................................................. II Consolidated financial statements ............................ III Statutory auditors’ review report on the 2014 Half- Year Financial Information ................................... | Semestriel, 2014, Insurance, AXA | write me a financial report |
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