As describe above, the Life & Savings VIF valuation under AXA’s market-consistent framework does not depend on assumed future asset returns, but rather on the actual risk-free yield curves observable in the market on each valuation date. The Life & Savings VIF valuation also depends on stochastic projections of multiple scenarios, rather than a single scenario. For comparison to traditional Embedded Values and other techniques, AXA performs a calculation that determines the “Implied Risk Discount Rate” (IDR) which would equate the cashflows from a single scenario with “real world” economic assumption to the Life & Savings VIF. The following table summarizes the “real world” assumptions for 2005 and 2006 used in determining the IDRs: Life & Savings EEV
Underlying performance from existing business considers the movements in EEV related to the business inforce at the beginning of the year, excluding the investment impacts that are shown below. The total operating performance of €2,252 million is analyzed in several components: – Expected return on VIF + Required Capital
Adjusted opening Life & Savings EEV 30,534 Operating performance from existing business: 2,252
Operating Return on Life & Savings EEV 3,752 Current year investment experience 2,311
2006 New Business Value reflects the strain (first year loss) and VIF impacts described above.
Change in investment assumptions is zero. This line would reflect changes to investment assumptions such as volatilities and correlations between asset classes, which are not directly driven by investment market data observed at yearend. For 2006 no such changes were made.
Capital flows of €–1,162 million reflect net transfers out of the Life segment in 2006.
Life & Savings EEV of Winterthur at the end of 2006 calculated consistently with AXA methodology and segmentation amounted to €4,134 million.
Group EV at 12/31/05 29,489 (1,923) 27,565 Modeling changes and opening adjustments 1,045 180 1,224
Total Return on Group EV 6,063 1,973 8,036 Dividends paid – received (1,472) (137) (1,609)
(a) Other Business operating return = underlying earnings (€1,685 million) + normative 4.5% capital growth on equity investments (€328 million) – Net interest charge on TSS&TSDI (€161 million) + other (€49 million).
Estimated downward parallel shift of 100 bp in risk-free rates (1,453) (306)
Upward parallel shift of 10% of the volatility on equity markets (320) (41)
Upward parallel shift of 10% of the volatility on bonds (163) (20)
The Other Business Tangible Net Asset Value’s decrease of 11% (76% increase at constant FX and scope) to €–2,138 million was due to the elimination of intangibles, principally Winterthur related, which more than offset the positive contribution of the operating return and exchange rates movements of other business.
The 20% operating return on Group EV was driven by the very solid business performance of the year in all business segments (Life &
Tillinghast has concluded that the methodology and assumptions comply with the EEV Principles. In particular: – The methodology makes allowance for the aggregate risks in the covered business through the market consistent methodology as described in [Section V] of the Report, which includes a stochastic allowance for the cost of financial options and guarantees.
– The operating assumptions have been set with appropriate regard to past, current and expected future experience.
In arriving at these conclusions, Tillinghast relied on data and information provided by AXA.”
SALARIED EMPLOYEES As at December 31, As at December 31, As at January 1, As at December 31,
Of which Australia/New Zealand 2,210 2,274 2,344 2,530 Of which Hong Kong 823 1,043 1,125 1,067
AXA RE 445 463 – – AXA Corporate Solutions Assurance 1,167 1,159 1,159 1,171
Other Financial services (excluding AXA Bank Belgium) (c) 559 568 568 625
– AXA RE business disposal (–365 salaried employees taking into account 98 salaried employees transferred to AXA Liability Managers (other transnational activities)). – Acquisition of Citadel (316 salaried employees). – The launch of the Avanssur platform in Poland (164 salaried employees). – Tynan McKenzie minority interests’ buyout and BNZ acquisition in Australia (70 salaried employees). – Transfer of some salaried employees of Southen Europe and Japan entities to AXA Tech (respectively 116 and 34 salaried employees).
I have obtained from the Statutory Auditors of the Company a letter attesting to the completion of their assignment, stating that they have verified the information pertaining to the financial condition and financial statements provided in the registration document, (with the exception of information pertaining to European Embedded Value (EEV) which they have not reviewed but which they have checked for consistency with the work performed by the independent actuary Tillinghast and dated April 6, 2007) and have carried out the overall reading of this document.
The historical financial information presented in this document is discussed in a report issued by the Statutory Auditors.
Membership in a professional body: PricewaterhouseCoopers Audit is registered as a statutory auditor with the Compagnie Régionale des Commissaires aux Comptes de Versailles.
Mr. Jean Louis Simon: 61, rue Henri Régnault – 92075 Paris-La Défense Cedex, first appointed on April 21, 2004. The current appointment is for a period of 6 years, until the Annual General Meeting of the shareholders called to approve the financial statements for the fiscal year 2009.
Expenses and VAT were excluded in 2006 and 2005. In 2005, these fees included VAT and amounted to €48,269 million for PricewaterhouseCoopers and €6,839 million for Mazars & Guérard.
Information Items – Annex 1 of the Commission Regulation n° 809/2004 3. Selected financial information ......................................................................................................................................... 12 to 15 4. Risk factors...................................................................................................... 143 to 168, 297, 323 to 327, 370 and 376 5. Information about the issuer 5.1. History and development of the issuer ......................................................................................... 04 to 05 and 76 6. Business overview ........................................................................................................................ 100 to 132 and 171 to 176 7. Organizational structure 7.1. Brief description of the Group............................................................................................................................... 06 to 07 7.2. List of significant subsidiaries ......................................................................................................................... 282 to 288 8. Property, plants and equipment ................................................................................................................................................ n/a 9. Operating and financial review.................................................................................................................................. 184 to 242 10. Capital resources 10.1. Capital resources.............................................................................................................. 256 to 261 and 339 to 346 10.2. Sources and amounts of cash flows................................................................................... 254 to 255 and 338 10.3. Borrowing requirements and funding structure.......................................... 137 to 140 and 368 to 376 10.4. Restrictions on the use of capital resources ...................................................................................................... 138 10.5. Anticipated sources of funds needed......................................................................................................................... 93 11. R&D, patents and licenses ............................................................................................................................................................ n/a
Annual Information Document (art. 222-7) ....................................................................................................................... 90 to 93 Compensation paid to Statutory Auditors in 2006 and 2005 (art. 222-8)............................................................. 468 Description of the Company’s own shares buyback program (art. 241-2)................................................ 82 to 83
Supervisory Board Chairman’s report on the conditions of preparation and organization of the Board’s work and on internal control procedures
Report on the conditions of preparation and organization of the Board’s work ................................... 20 to 34 Report on internal control procedures ................................................................................................................................ 41 to 54 Report of the Statutory Auditors on the Supervisory Board Chairman’s report.................................... 55 to 56
Pursuant to AMF regulations no. 212-13, this shelf registration document was registered with the Autorité des Marchés Financiers (AMF) on April 20, 2007. It may be used in connection with a financial transaction only if accompanied by a transaction memorandum registered with the Autorité des Marchés Financiers.
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GGrroouuppee AAXXAA Direction de la communication et du développement durable 25, avenue Matignon – 75008 Paris – France billion euros (1)
in net income, Group share +18% at constant exchange rates euro dividend per share pending shareholder approval on May 14, 2007 million customers (1)