United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 6-K

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d/16 of

the Securities Exchange Act of 1934

August 2009

AEGON N.V.

AEGONplein 50

2591 TV THE HAGUE

The Netherlands

 

 

 

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AEGON’s unaudited condensed consolidated interim financial statements for the six month period ended June 30, 2009 are included as appendix and incorporated herein by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

				AEGON N.V.
				(Registrant)
Date: August 13, 2009				By		/s/ E. Lagendijk
						E. Lagendijk
						Executive Vice President and
						General Counsel

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TABLE OF CONTENTS

 

Consolidated balance sheet		p 4
Condensed consolidated income statement		p 5
Condensed consolidated statement of comprehensive income		p 5
Condensed consolidated statement of changes in equity		p 6
Condensed consolidated cash flow statement		p 7
Notes to the condensed consolidated interim financial statements		p 8

 

 

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CONDENSED CONSOLIDATED BALANCE SHEET

 

EUR millions		Notes		June 30, 2009		Dec. 31, 2008
ASSETS
Intangible assets		6		5,182		5,425
Investments		4		131,533		130,481
Investments for account of policyholders		5		112,107		105,400
Derivatives				2,981		8,057
Investments in associates				660		595
Reinsurance assets				5,086		5,013
Defined benefit assets				403		448
Deferred tax assets				1,337		1,447
Deferred expenses and rebates		7		12,160		12,794
Other assets and receivables				7,178		7,376
Cash and cash equivalents				6,816		10,223
Total assets				285,443		287,259
EQUITY AND LIABILITIES
Shareholders’ equity				7,642		6,055
Convertible core capital securities				3,000		3,000
Other equity instruments				4,703		4,699
Minority interest				7		6
Group equity				15,352		13,760
Trust pass-through securities				137		161
Subordinated borrowings				8		41
Insurance contracts				94,081		97,377
Insurance contracts for account of policyholders				63,622		60,808
Investment contracts				32,424		36,231
Investment contracts for account of policyholders				50,116		45,614
Derivatives				3,974		6,089
Borrowings		9		7,867		5,339
Provisions				484		495
Defined benefit liabilities				2,088		2,080
Deferred revenue liability				35		42
Deferred tax liabilities				406		424
Other liabilities				14,507		18,237
Accruals				342		561
Total liabilities				270,091		273,499
Total equity and liabilities				285,443		287,259

 

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CONDENSED CONSOLIDATED INCOME STATEMENT

 

EUR millions (except per share data)		Notes		Q2 2009			Q2 2008			Ytd 2009			Ytd 2008
Premium income		10		4,550			5,592			10,540			11,907
Investment income		11		2,191			2,436			4,441			4,858
Fee and commission income				380			424			780			858
Other revenues				—			2			1			3
Total revenues				7,121			8,454			15,762			17,626
Income from reinsurance ceded				454			414			915			749
Results from financial transactions		12		7,022			(2,308	)		(232	)		(11,208	)
Other income				—			—			2			—
Total income				14,597			6,560			16,447			7,167
Benefits and expenses				14,041			6,016			15,797			6,286
Impairment charges / (reversals)		13		413			101			843			135
Interest charges and related fees				106			111			226			206
Other charges		14		385			—			386			—
Total charges				14,945			6,228			17,252			6,627
Share in result of associates				10			11			12			20
Income / (loss) before tax				(338	)		343			(793	)		560
Income tax				177			(67	)		459			(131	)
Net income / (loss)				(161	)		276			(334	)		429
Net income / (loss) attributable to:
Equity holders of AEGON N.V.				(161	)		276			(334	)		429
Earnings and dividend per share (EUR per share)
Basic earnings per share*				(0.21	)		0.08			(0.36	)		0.15
Diluted earnings per share*				(0.21	)		0.08			(0.36	)		0.15
Dividend per common share				—			0.30			—			0.30
Net income per common share calculation
Net income				(161	)		276			(334	)		429
Preferred dividend				(122	)		(112	)		(122	)		(112	)
Coupons on perpetuals				(45	)		(45	)		(93	)		(91	)
Net income / (loss) attributable to common shareholders				(328	)		119			(549	)		226
Weighted average number of common shares outstanding				1,516			1,499			1,516			1,499
*  After deduction of preferred dividend and coupons on perpetuals   CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR millions				Q2 2009			Q2 2008			Ytd 2009			Ytd 2008
Net income / (loss)				(161	)		276			(334	)		429
Other comprehensive income:
Gross movement in foreign currency translation reserve				(447	)		123			31			(970	)
Gross movement in revaluation reserves				4,691			(1,292	)		2,945			(3,561	)
Tax relating to components of other comprehensive income				(1,188	)		354			(838	)		1,140
Other				17			13			(2	)		—
Other comprehensive income for the period				3,073			(802	)		2,136			(3,391	)
Total comprehensive income				2,912			(526	)		1,802			(2,962	)
Total comprehensive income attributable to:
Equity holders of AEGON N.V.				2,912			(527	)		1,801			(2,962	)
Minority interest				—			1			1			—

 

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

EUR millions		Total Share capital		Retained earnings			Revaluation and hedging reserves			Other reserves			Convertible core capital securities		Other equity instruments		Issued capital and reserves 1			Minority interest		Total
Six months ended June 30, 2009
At beginning of year		7,347		8,093			(7,167	)		(2,218	)		3,000		4,699		13,754			6		13,760
Revaluations		—		—			2,656			—			—		—		2,656			—		2,656
Disposal of group assets		—		—			59			—			—		—		59			—		59
Gains/(losses) transferred to income statement on disposal and impairment		—		—			355			—			—		—		355			—		355
Equity movements of associates		—		—			—			(11	)		—		—		(11	)		—		(11	)
Foreign currency translation differences		—		—			(132	)		—			—		—		(132	)		—		(132	)
Movement in foreign currency translation reserve and net foreign investment hedging reserves		—		—			—			82			—		—		82			—		82
Aggregate tax effect of items recognized directly in equity		—		—			(889	)		—			—		—		(889	)		—		(889	)
Other		—		8			7			—			—		—		15			1		16
Net income / (loss) recognized directly in equity		—		8			2,056			71			—		—		2,135			1		2,136
Net income / (loss) recognized in the income statement		—		(334	)		—			—			—		—		(334	)		—		(334	)
Total comprehensive income / (loss) for the first six months ended June 30, 2009		—		(326	)		2,056			71			—		—		1,801			1		1,802
Treasury shares		—		2			—			—			—		—		2			—		2
Preferred dividend		—		(122	)		—			—			—		—		(122	)		—		(122	)
Coupons on perpetuals		—		(93	)		—			—			—		—		(93	)		—		(93	)
Share options		—		—			—			—			—		4		4			—		4
Other		—		(1	)		—			—			—		—		(1	)		—		(1	)
At end of period		7,347		7,553			(5,111	)		(2,147	)		3,000		4,703		15,345			7		15,352
1        Issued capital and reserves attributable to equity holders of AEGON N.V.
EUR millions		Total Share capital		Retained earnings			Revaluation and hedging reserves			Other reserves			Convertible core capital securities		Other equity instruments		Issued capital and reserves 1			Minority interest		Total
Six months ended June 30, 2008
At beginning of year		7,359		10,349			(516	)		(2,041	)		—		4,795		19,946			16		19,962
Revaluations		—		—			(3,608	)		—			—		—		(3,608	)		—		(3,608	)
Gains/(losses) transferred to income statement on disposal and impairment		—		—			23			—			—		—		23			—		23
Equity movements of associates		—		—			—			(11	)		—		—		(11	)		—		(11	)
Foreign currency translation differences		—		—			82			—			—		—		82			—		82
Movement in foreign currency translation reserve and net foreign investment hedging reserves		—		—			—			(948	)		—		—		(948	)		—		(948	)
Aggregate tax effect of items recognized directly in equity		—		—			1,118			—			—		—		1,118			—		1,118
Other		—		11			(58	)		—			—		—		(47	)		—		(47	)
Net income / (loss) recognized directly in equity		—		11			(2,443	)		(959	)		—		—		(3,391	)		—		(3,391	)
Net income / (loss) recognized in the income statement		—		429			—			—			—		—		429			—		429
Total comprehensive income / (loss) for the first six months ended June 30, 2008		—		440			(2,443	)		(959	)		—		—		(2,962	)		—		(2,962	)
Treasury shares		—		(75	)		—			—			—		—		(75	)		—		(75	)
Dividends paid on common shares		—		(290	)		—			—			—		—		(290	)		—		(290	)
Preferred dividend		—		(112	)		—			—			—		—		(112	)		—		(112	)
Coupons on perpetuals		—		(91	)		—			—			—		—		(91	)		—		(91	)
Share options		—		—			—			—			—		10		10			—		10
At end of period		7,359		10,221			(2,959	)		(3,000	)		—		4,805		16,426			16		16,442

 

1	Issued capital and reserves attributable to equity holders of AEGON N.V.

 

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CONDENSED CONSOLIDATED CASH FLOW STATEMENT

 

EUR millions		Ytd 2009			Ytd 2008
Cash flow from operating activities		(5,450	)		4,779
Purchases and disposals of intangible assets		(3	)		(4	)
Purchases and disposals of equipment and other assets		(20	)		104
Purchases, disposals and dividends of subsidiaries and associates		(55	)		(177	)
Cash flow from investing activities		(78	)		(77	)
Issuance and purchase of share capital		2			(75	)
Dividends paid		(122	)		(402	)
Issuances, repayments and coupons of convertible capital securities		(121	)		—
Issuances, repayments and coupons of perpetuals		(125	)		(123	)
Issuances, repayments and finance interest on borrowings		1,912			179
Cash flow from financing activities		1,546			(421	)
Net increase/(decrease) in cash and cash equivalents		(3,982	)		4,281
Net cash and cash equivalents at January 1		9,506			7,385
Effects of changes in exchange rate		127			(103	)
Net cash and cash equivalents at end of period		5,651			11,563

 

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Notes to the condensed consolidated interim financial statements

Amounts in EUR million, unless otherwise stated

1. Basis of presentation

The condensed consolidated interim financial statements as at and for the 6 month period ended June 30, 2009, have been prepared in accordance with IAS 34 ‘Interim financial reporting’ as adopted by the European Union (EU), with IFRS as issued by the International Accounting Standards Board (IASB). It does not include all of the information required for full financial statements and should therefore be read together with the 2008 consolidated financial statements of AEGON N.V. as included in AEGON’s Annual Report for 2008.

The condensed consolidated interim financial statements have been prepared in accordance with the historical cost convention as modified by the revaluation of investment properties and those financial instruments (including derivatives) and financial liabilities that have been measured at fair value.

The published figures in these condensed consolidated interim financial statements are unaudited. The condensed consolidated financial statements were approved by the Executive Board on August 12, 2009.

2. Significant accounting policies

Except for the changes highlighted below, all accounting policies and methods of computation applied in the condensed consolidated interim financial statements are the same as those applied in the 2008 consolidated financial statements, which were prepared in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and adopted by the European Union.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning January 1, 2009:

IFRS 8 ‘Operating segments’. This standard requires disclosure of information about the Group’s operating segments and replaces the requirement to determine primary (geographical) and secondary (business) reporting segments of the Group.

Under IFRS 8, AEGON’s operating segments are based on the businesses as presented in internal reports that are regularly reviewed by the executive board which is regarded as the “chief executive decision maker”. The operating segments are:

 

•

AEGON Americas. Main business lines include life and protection, individual savings and retirement, pensions and asset management, institutional products and life reinsurance.

 

•

AEGON The Netherlands. Main business lines include life and protection, individual savings and retirement, pensions and asset management, distribution and general insurance.

 

•

AEGON United Kingdom. Main business lines include life and protection, pensions and asset management and distribution.

 

•

Other countries. Other countries include the country units Central and Eastern Europe, other European countries, European variable annuities and Asia. Main business lines include life and protection, pensions and asset management and general insurance.

 

•

Holding and other activities. Includes finance, employee and other administrative expenses of the group staff functions.

This report includes a non-IFRS financial measure: Underlying earnings before tax. AEGON believes this non-IFRS measure, together with the IFRS measure (Net income), provides a meaningful measure for the investing public to evaluate AEGON’s business relative to the businesses of our peers. In addition, underlying earnings is a key performance indicator on which the executive board manages AEGON’s performance. The reconciliation of this measure to the most comparable IFRS measure is shown in table Segment reporting on page 11.

The adoption of IFRS 8 did not have any impact on equity or net income. In accordance with the transitional requirements of the standard, AEGON has provided full comparative information.

 

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Underlying earnings

Certain assets held by AEGON Americas, AEGON The Netherlands and AEGON UK are carried at fair value and managed on a total return basis, with no offsetting changes in the valuation of related liabilities. These includes assets such as hedge funds, private equities, real estate limited partnerships, convertible bonds and structured products. Underlying earnings exclude any over- or underperformance compared to management’s long-term expected return on assets. Based on current holdings and asset returns, the long-term expected return on an annual basis is 8-10%, depending on asset class, including cash income and market value changes. The expected earnings from these asset classes are net of DPAC where applicable.

In addition, certain products offered by AEGON Americas contain guarantees and are reported on a fair value basis, including the segregated funds offered by AEGON Canada and the total return annuities and guarantees on variable annuities of AEGON USA. The earnings on these products are impacted by movements in equity markets and risk free interest rates. Short-term developments in the financial markets may therefore cause volatility in earnings. Included in underlying earnings is a long-term expected return on these products and any over- or underperformance compared to management’s expected return is excluded from underlying earnings. The fair value movements of certain guarantees and the fair value change of derivatives that hedge certain risks on these guarantees of AEGON The Netherlands and Variable Annuities Europe (included in Other countries) are excluded from underlying earnings. The long-term expected return for these guarantees is set at zero.

The Holding includes certain issued bonds that are held at fair value through profit or loss. The interest rate risk on these bonds is hedged using swaps. The fair value movement resulting from changes in AEGON’s credit spread are excluded from underlying earnings.

IAS 1 (revised) ‘Presentation of financial statements’ The revised standard separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with non-owner changes in equity presented as a single line.

In addition, the standard introduces the statement of comprehensive income: it presents all items of recognized income and expenses, either in one single statement, or in two linked statements. AEGON has elected to present two statements. The adoption of this standard did not have any impact on equity or net income. In accordance with the transitional requirements of the standard, AEGON has provided full comparative information.

IFRS 2 ‘Share-based Payment – Vesting Conditions and Cancellations’

The Standard has been amended to clarify the definition of vesting conditions and to prescribe the accounting treatment of an award that is effectively cancelled because a non-vesting condition is not satisfied. The adoption of this amendment did not have any impact on the financial position or performance of the Group.

Amendment to IFRS 7 ‘Financial Instruments: Disclosures’. The amendment increases the disclosure requirements about fair value measurement and amends the disclosure about liquidity risk. The amendment introduces a three-level hierarchy for fair value measurement disclosures about financial instruments and requires some specific quantitative disclosures for those instruments classified in the lowest level in the hierarchy. These disclosures will help to improve comparability between entities about the effects of fair value measurements. In addition, the amendment clarifies and enhances the existing requirements for the disclosure of liquidity risk primarily requiring a separate liquidity risk analysis for derivative and non-derivative financial liabilities. It also requires a maturity analysis for financial assets where the information is needed to understand the nature and context of liquidity risk. The Group will make additional relevant disclosures in its consolidated financial statements ending December 31, 2009.

IAS 23 ‘Borrowing Costs (revised)’

The standard has been revised to require capitalization of borrowing costs on qualifying assets. This amendment is not relevant to the Group as the Group already has a policy to capitalize borrowing costs.

In addition, the following new standards, amendments to existing standards and interpretations are mandatory for the first time for the financial year beginning January 1, 2009 but are not currently relevant for the Group:

 

•

IFRIC 16 ‘Hedges of a net investment in a foreign operation’;

 

•

Amendments to IAS 39 ‘Eligible hedged items’;

 

•

Improvements to IFRS (2008).

 

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Critical accounting estimates

Certain amounts recorded in the condensed consolidated interim financial statements reflect estimates and assumptions made by management. Actual results may differ from the estimates made. Interim results are not necessarily indicative for full year results.

Exchange rates

The following exchange rates are applied for the condensed consolidated interim financial statements:

Income statement items: average rate 1 EUR = USD 1.3349 (2008: USD 1.5309); 1 EUR = GBP 0.8920 (2008: GBP 0.7763).

Balance sheet items: closing rate 1 EUR = USD 1.4134 (2008: USD 1.5764; year-end 2008: USD 1.3917); 1 EUR = GBP 0.8521 (2008: GBP 0.7923; year-end 2008: GBP 0.9525).

 

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3. Segment information

3.1 Income statement

Three months ended June 30, 2009

Segment information

EUR millions		Americas			The Netherlands			United Kingdom			Other countries			Holding and other activities			Eliminations			Total
Three months ended June 30, 2009
Underlying earnings before tax geographically		280			129			20			47			(68	)		(4	)		404
Over/(under) performance of fair value items		181			(53	)		2			2			(163	)		—			(31	)
Total operating earnings before tax		461			76			22			49			(231	)		(4	)		373
Gains/(losses) on investments		(3	)		(42	)		28			2			50			—			35
Impairment charges		(349	)		(31	)		(35	)		—			—			—			(415	)
Impairment reversals		19			3			—			—			—			—			22
Other income/(charges)		(1	)		—			33			(385	)		—			—			(353	)
Income before tax		127			6			48			(334	)		(181	)		(4	)		(338	)
Income tax		155			(2	)		(28	)		(9	)		61			—			177
Net income		282			4			20			(343	)		(120	)		(4	)		(161	)
Inter-segment underlying earnings		(21	)		(13	)		1			(2	)		35			—			—
Revenues
Life insurance gross premiums		1,472			442			1,796			185			—			—			3,895
Accident and health insurance		439			40			—			13			—			—			492
General insurance		—			128			—			35			—			—			163
Total gross premiums		1,911			610			1,796			233			—			—			4,550
Investment income		991			572			578			40			49			(39	)		2,191
Fee and commission income		218			93			42			27			—			—			380
Total revenues		3,120			1,275			2,416			300			49			(39	)		7,121
Inter-segment revenues		1			(2	)		1			—			39			—			39
Three months ended June 30, 2008
EUR millions		Americas			The Netherlands			United Kingdom			Other countries			Holding and other activities			Eliminations			Total
Three months ended June 30, 2008
Underlying earnings before tax geographically		441			116			48			29			(40	)		2			596
Over/(under) performance of fair value items		100			(37	)		—			—			(15	)		—			48
Total operating earnings before tax		541			79			48			29			(55	)		2			644
Gains/(losses) on investments		(47	)		(115	)		—			5			(55	)		—			(212	)
Impairment charges		(84	)		(4	)		(12	)		—			—			—			(100	)
Impairment reversals		2			—			—			—			—			—			2
Other income/(charges)		—			—			9			—			—			—			9
Income before tax		412			(40	)		45			34			(110	)		2			343
Income tax		(115	)		45			(13	)		(14	)		30			—			(67	)
Net income		297			5			32			20			(80	)		2			276
Inter-segment underlying earnings		(60	)		(37	)		(1	)		(3	)		101			—			—
Revenues
Life insurance gross premiums		1,420			570			2,527			451			—			—			4,968
Accident and health insurance		409			34			—			14			—			—			457
General insurance		—			129			—			38			—			—			167
Total gross premiums		1,829			733			2,527			503			—			—			5,592
Investment income		1,082			581			687			65			53			(32	)		2,436
Fee and commission income		230			101			63			30			—			—			424
Other revenues		1			—			—			1			—			—			2
Total revenues		3,142			1,415			3,277			599			53			(32	)		8,454
Inter-segment revenues		—			1			—			—			31			—			32

 

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Six months ended June 30, 2009

Segment information

 

EUR millions		Americas			The Netherlands			United Kingdom			Other countries			Holding and other activities			Eliminations			Total
Six months ended June 30, 2009
Underlying earnings before tax geographically		212			201			27			77			(134	)		(1	)		382
Over/(under) performance of fair value items		149			(243	)		(1	)		3			(136	)		—			(228	)
Total operating earnings before tax		361			(42	)		26			80			(270	)		(1	)		154
Gains/(losses) on investments		25			68			38			6			71			—			208
Impairment charges		(635	)		(109	)		(49	)		(5	)		(5	)		—			(803	)
Impairment reversals		21			3			—			—			—			—			24
Other income/(charges)		—			—			9			(385	)		—			—			(376	)
Income before tax		(228	)		(80	)		24			(304	)		(204	)		(1	)		(793	)
Income tax		377			43			2			(30	)		67			—			459
Net income		149			(37	)		26			(334	)		(137	)		(1	)		(334	)
Inter-segment underlying earnings		(13	)		(9	)		1			(3	)		24			—			—
Revenues
Life insurance gross premiums		2,971			2,010			3,616			525			—			—			9,122
Accident and health insurance		892			146			—			42			—			—			1,080
General insurance		—			266			—			72			—			—			338
Total gross premiums		3,863			2,422			3,616			639			—			—			10,540
Investment income		2,133			1,074			1,095			117			119			(97	)		4,441
Fee and commission income		440			199			86			55			—			—			780
Other revenues		—			—			—			1			—			—			1
Total revenues		6,436			3,695			4,797			812			119			(97	)		15,762
Inter-segment revenues		1			(1	)		2			—			95			—			97
Six months ended June 30, 2008
		Americas			The Netherlands			United Kingdom			Other countries			Holding and other activities			Eliminations			Total
Six months ended June 30, 2008
Underlying earnings before tax geographically		919			229			93			68			(63	)		8			1,254
Over/(under) performance of fair value items		(274	)		(191	)		—			—			72			—			(393	)
Total operating earnings before tax		645			38			93			68			9			8			861
Gains/(losses) on investments		(94	)		(39	)		3			5			(1	)		—			(126	)
Impairment charges		(103	)		(21	)		(12	)		(1	)		—			—			(137	)
Impairment reversals		7			—			—			—			—			—			7
Other income/(charges)		—			—			(45	)		—			—			—			(45	)
Income before tax		455			(22	)		39			72			8			8			560
Income tax		(184	)		46			34			(24	)		(3	)		—			(131	)
Net income		271			24			73			48			5			8			429
Inter-segment underlying earnings		(39	)		(20	)		—			(2	)		61			—			—
Revenues
Life insurance gross premiums		2,894			2,028			4,785			834			—			—			10,541
Accident and health insurance		831			152			—			43			—			—			1,026
General insurance		—			263			—			77			—			—			340
Total gross premiums		3,725			2,443			4,785			954			—			—			11,907
Investment income		2,284			1,128			1,283			126			113			(76	)		4,858
Fee and commission income		472			212			123			51			—			—			858
Other revenues		2			—			—			1			—			—			3
Total revenues		6,483			3,783			6,191			1,132			113			(76	)		17,626
Inter-segment revenues		1			—			—			—			75			—			76

 

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3.2 Investments geograhpically

At June 30, 2009

INVESTMENTS GEOGRAPHICALLY

amounts in million EUR (unless otherwise stated)

 

Americas USD		United Kingdom GBP		At June 30, 2009		Americas		The Netherlands		United Kingdom		Other countries		Holding & other activities		Eliminations			Total EUR
				Investments
1,536		41		Shares		1,086		604		48		54		—		(2	)		1,790
81,833		5,807		Bonds		57,898		19,743		6,815		1,795		1,029		—			87,280
18,270		10		Loans		12,927		11,344		11		702		—		—			24,984
20,795		—		Other financial assets		14,713		142		—		57		—		—			14,912
697		—		Investments in real estate		493		2,074		—		—		—		—			2,567
123,131		5,858		Investments general account		87,117		33,907		6,874		2,608		1,029		(2	)		131,533
—		17,712		Shares		—		6,034		20,786		571		—		(8	)		27,383
—		12,327		Bonds		—		12,987		14,467		342		—		—			27,796
62,000		2,948		Separate accounts and investment funds		43,866		—		3,459		944		—		—			48,269
—		5,468		Other financial assets		—		1,044		6,418		189		—		—			7,651
—		858		Investments in real estate		—		—		1,008		—		—		—			1,008
62,000		39,313		Investments for account of policyholders		43,866		20,065		46,138		2,046		—		(8	)		112,107
185,131		45,171		Investments on balance sheet		130,983		53,972		53,012		4,654		1,029		(10	)		243,640
110,194		1,965		Off balance sheet investments third parties		77,963		11,800		2,306		6,106		—		—			98,175
295,325		47,136		Total revenue generating investments		208,946		65,772		55,318		10,760		1,029		(10	)		341,815
				Investments
98,591		5,769		Available-for-sale		69,754		20,396		6,770		1,705		1,029		—			99,654
18,270		10		Loans		12,927		11,344		11		702		—		—			24,984
—		—		Held-to-maturity		—		—		—		51		—		—			51
67,573		38,534		Financial assets at fair value through profit or loss		47,809		20,158		45,223		2,196		—		(10	)		115,376
697		858		Investments in real estate		493		2,074		1,008		—		—		—			3,575
185,131		45,171		Total investments on balance sheet		130,983		53,972		53,012		4,654		1,029		(10	)		243,640
93		13		Investments in associates		66		55		15		522		4		(2	)		660
31,653		6,245		Other assets		22,394		6,867		7,328		1,240		14,311		(10,997	)		41,143
216,877		51,429		Consolidated total Assets		153,443		60,894		60,355		6,416		15,344		(11,009	)		285,443

At December 31, 2008

INVESTMENTS GEOGRAPHICALLY

amounts in million EUR (unless otherwise stated)

 

Americas USD		United Kingdom GBP		At December 31, 2008		Americas		The Netherlands		United Kingdom		Other countries		Holding & other activities		Eliminations			Total EUR
				Investments
1,436		39		Shares		1,031		1,297		41		183		52		(2	)		2,602
83,846		4,915		Bonds		60,247		18,298		5,161		4,827		20		—			88,553
19,194		10		Loans		13,792		10,416		10		1,116		—		—			25,334
15,635		—		Other financial assets		11,235		112		—		117		—		—			11,464
679		—		Investments in real estate		488		2,040		—		—		—		—			2,528
120,790		4,964		Investments general account		86,793		32,163		5,212		6,243		72		(2	)		130,481
—		17,360		Shares		—		6,416		18,225		167		—		(9	)		24,799
—		12,675		Bonds		—		11,675		13,307		330		—		—			25,312
58,943		2,381		Separate accounts and investment funds		42,353		—		2,500		1,420		—		—			46,273
—		6,376		Other financial assets		—		1,042		6,693		150		—		—			7,885
—		1,077		Investments in real estate		—		—		1,131		—		—		—			1,131
58,943		39,869		Investments for account of policyholders		42,353		19,133		41,856		2,067		—		(9	)		105,400
179,733		44,833		Investments on balance sheet		129,146		51,296		47,068		8,310		72		(11	)		235,881
106,434		2,289		Off balance sheet investments third parties		76,478		11,783		2,403		5,299		—		—			95,963
286,167		47,122		Total revenue generating investments		205,624		63,079		49,471		13,609		72		(11	)		331,844
				Investments
94,444		4,859		Available-for-sale		67,862		19,110		5,101		2,602		72		—			94,747
19,194		10		Loans		13,792		10,416		10		1,116		—		—			25,334
—		—		Held-to-maturity		—		—		—		2,269		—		—			2,269
65,416		38,887		Financial assets at fair value through profit or loss		47,004		19,730		40,826		2,323		—		(11	)		109,872
679		1,077		Investments in real estate		488		2,040		1,131		—		—		—			3,659
179,733		44,833		Total investments on balance sheet		129,146		51,296		47,068		8,310		72		(11	)		235,881
30		13		Investments in associates		21		55		13		503		4		(2	)		594
36,795		7,192		Other assets		26,440		12,460		7,552		1,660		17,395		(14,723	)		50,784
216,558		52,038		Consolidated total Assets		155,607		63,811		54,633		10,473		17,471		(14,736	)		287,259

 

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4. Investments

INVESTMENTS

 

EUR millions		June 30, 2009		Dec. 31, 2008
Available-for-sale (AFS)		99,654		94,747
Loans		24,984		25,333
Held-to-maturity (HTM)		51		2,270
Financial assets at fair value through profit or loss (FVTPL)		4,277		5,603
Financial assets, excluding derivatives		128,966		127,953
Investments in real estate		2,567		2,528
Total Investments for general account		131,533		130,481

Total financial assets, excluding derivatives

 

		AFS		FVTPL		HTM		Loans		Total
Shares		1,053		737		—		—		1,790
Bonds		85,511		1,718		51		—		87,280
Money market and other short term investments		12,093		81		—		—		12,174
Mortgages		—		—		—		20,824		20,824
Private loans		—		—		—		812		812
Deposits with financial institutions		—		—		—		1,069		1,069
Policy loans		—		—		—		2,068		2,068
Receivables out of share lease agreements		—		—		—		46		46
Other		997		1,741		—		165		2,903
June 30, 2009		99,654		4,277		51		24,984		128,966
		AFS		FVTPL		HTM		Loans		Total
Shares		1,429		1,173		—		—		2,602
Bonds		84,019		2,282		2,255		—		88,556
Money market and other short term investments		8,318		146		—		—		8,464
Mortgages		—		—		—		20,166		20,166
Private loans		—		—		—		822		822
Deposits with financial institutions		—		—		—		1,640		1,640
Policy loans		—		—		—		2,473		2,473
Receivables out of share lease agreements		—		—		—		54		54
Other		981		2,002		15		178		3,176
Dec. 31, 2008		94,747		5,603		2,270		25,333		127,953

5. Investments for account of policyholders

INVESTMENTS FOR ACCOUNT OF POLICYHOLDERS

 

		June 30, 2009		Dec. 31, 2008
Shares		27,383		24,799
Debt securities		27,796		25,312
Money market and short-term investments		3,556		3,761
Deposits with financial institutions		3,038		3,070
Separate accounts and unconsolidated investment funds		48,269		46,273
Other		1,057		1,054
Total investments for account of policyholders at fair value through profit or loss, excluding derivatives		111,099		104,269
Investment in real estate		1,008		1,131
Total investments for account of policyholders		112,107		105,400

 

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6. Intangible assets

INTANGIBLE ASSETS

 

		June 30, 2009		Dec. 31, 2008
Goodwill		720		720
VOBA		3,902		4,119
Future servicing rights		504		522
Software		24		29
Other		32		35
Total intangible assets		5,182		5,425

7. Deferred expenses and rebates

DEFERRED EXPENSES AND REBATES

 

		June 30, 2009		Dec. 31, 2008
DPAC for insurance contracts and investment contracts with discretionary participation features		11,575		12,224
Deferred transaction costs for investment management services		323		307
Unamortized interest rate rebates		262		263
Total Deferred expenses and rebates		12,160		12,794

8. Share capital

SHARE CAPITAL

 

		June 30, 2009		Dec. 31, 2008
Share capital - par value		251		251
Share premium		7,096		7,096
Total share capital		7,347		7,347
Share capital - par value
Balance at January 1		251		258
Withdrawal		—		(12	)
Share dividend		—		5
Balance		251		251
Share premium
Balance at January 1		7,096		7,101
Share dividend		—		(5	)
Balance		7,096		7,096

9. Borrowings

BORROWINGS

 

		June 30, 2009		Dec. 31, 2008
Debentures and other loans		5,878		3,840
Commercial paper		421		428
Short term deposits		403		354
Bank overdrafts		1,165		717
Total borrowings		7,867		5,339

During Q2 2009 AEGON issued senior unsecured notes with a nominal value of EUR 1 billion due April 29, 2012. The notes, issued at a price of 99.675, carry a coupon of 7%. In addition AEGON borrowed EUR 900 million from the European Central Bank, under its Long Term Refinancing Operation (LTRO) program. The borrowing has a 1 year term and bears 1% interest per annum. The borrowing is fully collateralized.

 

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10. Premium income

PREMIUM INCOME

 

		Q2 2009			Q2 2008			Ytd 2009			Ytd 2008
Gross
Life		3,895			4,968			9,121			10,541
Non-Life		655			624			1,419			1,366
Total		4,550			5,592			10,540			11,907
Reinsurance
Life		(370	)		(321	)		(706	)		(618	)
Non-Life		(448	)		(400	)		(862	)		(774	)
Total		3,732			4,871			8,972			10,515
11. Investment income   INVESTMENT INCOME
		Q2 2009			Q2 2008			Ytd 2009			Ytd 2008
Interest income		2,006			2,189			4,080			4,319
Dividend income		144			195			273			427
Rental income		41			52			88			112
Total investment income		2,191			2,436			4,441			4,858
Investment income related to general account		1,542			1,641			3,231			3,370
Investment income account of policyholders		649			795			1,210			1,488
Total		2,191			2,436			4,441			4,858
12. Result from financial transactions   RESULT FROM FINANCIAL TRANSACTIONS
		Q2 2009			Q2 2008			Ytd 2009			Ytd 2008
Net fair value change of general account financial investments at FVTPL other than derivatives		95			40			(34	)		(147	)
Realized gains and losses on financial investments		6			(27	)		126			(69	)
Gains and (losses) on investments in real estate		(29	)		40			(36	)		64
Net fair value change of derivatives		(158	)		(267	)		(910	)		(216	)
Net fair value change on for account of policyholder financial assets at FVTPL		7,274			(2,102	)		854			(10,593	)
Net fair value change on investments in real estate for account of policyholders		(39	)		(18	)		(134	)		(255	)
Net foreign currency gains and (losses)		(7	)		(1	)		(14	)		(74	)
Net fair value change on borrowings and other financial liabilities		(120	)		27			(91	)		82
Realized gains and (losses) on repurchased debt		—			—			7			—
Total		7,022			(2,308	)		(232	)		(11,208	)

In Q2 2009, result from financial transactions included a loss of EUR 163 million in respect of AEGON’s own credit spread, reflecting the narrowing of credit spreads seen in the market in the second quarter of 2009 (Q2 2008: loss of EUR 14 million). For the six month period ended June 30, 2009 the loss amounted to EUR 136 million (2008: gain EUR 72 million).

 

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13. Impairment charges/(reversals)

IMPAIRMENT CHARGES / (REVERSALS)

 

		Q2 2009			Q2 2008			Ytd 2009			Ytd 2008
Impairment charges / (reversals) comprise:
Impairment charges on financial assets, excluding receivables		422			102			855			149
Impairment reversals on financial assets, excluding receivables		(21	)		(2	)		(24	)		(7	)
Impact of the above impairments on the valuation of insurance assets and liabilities		—			—			—			(8	)
Impact charges on non-financial assets and receivables		12			1			12			1
Total		413			101			843			135
Impairment charges on financial assets, excluding receivables, from:
Shares		14			27			81			39
Debt securities and money market instruments		372			70			703			96
Loans		36			5			71			14
Total		422			102			855			149
Impairment reversals on financial assets, excluding receivables, from:
Shares		—			—			—			—
Debt securities and money market instruments		(20	)		(2	)		(23	)		(7	)
Loans		(1	)		—			(1	)		—
Total		(21	)		(2	)		(24	)		(7	)

14. Other charges

In Q2 2009, other charges amount to a loss of EUR 385 million resulting from the sale of AEGON Taiwan. The proceeds from the sale amounted to EUR 11 million. The value of the assets and liabilities sold amounted to EUR 4,457 million and EUR 4,159 million respectively. Unrealized losses for an amount of EUR 94 million, reflecting revaluation reserves, foreign currency translation reserves and net investment hedges were recycled through the income statement. Sales expenses amounted to EUR 4 million.

15. Business combinations

On April 22, 2009 AEGON announced it has agreed to sell its Taiwanese life insurance business to Zhongwei Company Ltd. Upon signing of the agreement the control on AEGON Taiwan was transferred to the acquirer. The sale of the Taiwanese life insurance business is subject to regulatory approval and is expected to close by the end of Q3 2009.

On June 23, 2009 AEGON has completed its acquisition of Banca Transilvania’s 50% shareholding in BT AEGON, the Romanian pension business the two companies set up last year. The agreement to buy Banca Transilvania’s stake was originally announced in January of this year. AEGON paid approximately EUR 11 million for the shareholding, which gives AEGON full control of the pension business. As part of the transaction, AEGON and Banca Transilvania have signed a distribution agreement under which Banca Transilvania will continue to offer AEGON life insurance and pension products.

16. Commitments and contingencies

On May 13, 2009 a lower court in The Netherlands ruled in respect of a dispute regarding AEGON’s KoersPlan product, which is a unit-linked product, sold in substantial volumes in The Netherlands. The dispute regards transparency issues and the charges, including insurance premium included in this product. AEGON believes the court decided incorrectly and intend to appeal. The decision does not have a direct effect on claims brought by individual clients but, if this decision is ultimately upheld on appeal and/or by the Dutch Supreme Court and is followed by other courts in The Netherlands in individual cases, it could have a material adverse effect on AEGON’s financial position or profitability.

On June 5, 2009, the Dutch Supreme Court ruled in three disputes regarding securities lending (aandelenlease), including a dispute regarding AEGON’s Sprintplan product. This product was sold in the past by AEGON the Netherlands. AEGON believes these decisions are broadly in line with the earlier decisions by lower courts regarding these types of products and the policy followed by us in respect of these products which is based upon the arrangement made previously between consumers representative organizations and another supplier of these types of products in The Netherlands. AEGON does not expect the Dutch Supreme Court decision to have a material adverse effect on the company’s financial position or profitability.

 

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There have been no other material changes in contingent assets and liabilities reported in the 2008 consolidated financial statements of AEGON.

17. Events after the balance sheet date

On July 13, 2009, AEGON reached a final agreement with Stichting Verliespolis and Stichting Woekerpolis Claim to reduce charges for customers of its unit-linked insurance policies in the Netherlands. The agreement is part of industry-wide efforts in the Netherlands to address concerns over charges related to unit-linked insurance products. As a result of the final agreement, there will be an additional impact on the company’s embedded value of approximately EUR 70 mln after tax. The cost of improvements will be reflected in AEGON’s earnings over the remainder of the lifespan of affected policies. Consequently, no significant impact on the 2009 income statement is expected as provisions are adequate.

On August 5, 2009, the enterprise chamber of the Amsterdam court of appeals in the Netherlands ruled in favor of AEGON in connection with a dispute with harbor trade unions regarding the consolidation of equity of OPTAS, a life insurance company AEGON acquired at the beginning of 2007. The court rejected a request to order a restatement of AEGON’s financial statements. The ruling is open to appeal to the Dutch Supreme Court.

 

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Cautionary note regarding non-GAAP measures

These condensed consolidated interim financial statements include certain non-GAAP financial measures: underlying earnings before tax and operating earnings before tax. The reconciliation of underlying earnings before tax and operating earnings before tax to the most comparable IFRS measures is provided on page 11 and 12.

AEGON believes that these non-GAAP measures, together with the IFRS information, provide a meaningful measure for the investment community to evaluate AEGON’s business relative to the businesses of our peers.

Local currencies and constant currency exchange rates

These condensed consolidated interim financial statements contain certain information about investments in USD for the Americas and GBP for the United Kingdom, because those businesses operate and are managed primarily in those currencies. None of this information is a substitute for or superior to financial information about us presented in EUR, which is the currency of our primary financial statements.

Forward-looking statements

The statements contained in these condensed consolidated interim financial statements that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following are words that identify such forward-looking statements: believe, estimate, target, intend, may, expect, anticipate, predict, project, counting on, plan, continue, want, forecast, should, would, is confident, will, and similar expressions as they relate to our company. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. AEGON undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which merely reflect company expectations at the time of writing. Actual results may differ materially from expectations conveyed in forward-looking statements due to changes caused by various risks and uncertainties. Such risks and uncertainties include but are not limited to the following:

 

•

Changes in general economic conditions, particularly in the United States, the Netherlands and the United Kingdom;

 

•

Changes in the performance of financial markets, including emerging markets, such as with regard to:

 

•

The frequency and severity of defaults by issuers in our fixed income investment portfolios; and

 

•

The effects of corporate bankruptcies and/or accounting restatements on the financial markets and the resulting decline in the value of equity and debt securities AEGON holds;

 

•

The frequency and severity of insured loss events;

 

•

Changes affecting mortality, morbidity and other factors that may impact the profitability of AEGON’s insurance products;

 

•

Changes affecting interest rate levels and continuing low or rapidly changing interest rate levels;

 

•

Changes affecting currency exchange rates, in particular the EUR/USD and EUR/GBP exchange rates;

 

•

Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets;

 

•

Changes in laws and regulations, particularly those affecting AEGON’s operations, the products AEGON sells, and the attractiveness of certain products to AEGON’s consumers;

 

•

Regulatory changes relating to the insurance industry in the jurisdictions in which AEGON operates;

 

•

Acts of God, acts of terrorism, acts of war and pandemics;

 

•

Changes in the policies of central banks and/or governments;

 

•

Litigation or regulatory action that could require AEGON to pay significant damages or change the way AEGON does business;

 

•

Customer responsiveness to both new products and distribution channels;

 

•

Competitive, legal, regulatory, or tax changes that affect the distribution cost of or demand for AEGON’s products;

 

•

AEGON’s failure to achieve anticipated levels of earnings or operational efficiencies as well as other cost saving initiatives; and

 

•

The impact AEGON’s adoption of the International Financial Reporting Standards may have on AEGON’s reported financial results and financial condition.

Further details of potential risks and uncertainties affecting the company are described in the company’s filings with Euronext Amsterdam and the US Securities and Exchange Commission, including the Annual Report on Form 20-F. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, the company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

 

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CORPORATE AND SHAREHOLDER INFORMATION

HEADQUARTERS

AEGON N.V.

P.O. Box 85

2501 CB The Hague

The Netherlands

Telephone: + 31 70 344 32 10

www.aegon.com

GROUP CORPORATE COMMUNICATIONS & INVESTOR RELATIONS

AEGON N.V.

P.O. Box 85

2501 CB The Hague

The Netherlands

MEDIA

Telephone:     + 31 70 344 83 44

E-mail:          gcc-ir@aegon.com

ANALYSTS AND INVESTORS

Telephone:     + 31 70 344 83 05 or + 1 877 548 96 68 - toll free USA only

E-mail:          ir@aegon.com

PUBLICATION DATE FIGURES IN 2009

 

Thursday, November 12		Results third quarter 2009
Thursday, February 25		Results fourth quarter 2009
Thursday, May 12		Results first quarter 2010

SUPPLEMENTS

AEGON’s Q2 2009 Press Release and Q2 2009 Financial Supplement are available on AEGON’s website www.aegon.com.

ABOUT AEGON

Throughout their working lives and into retirement, millions of people around the world rely on AEGON to help them secure their long-term financial futures.

As an international life insurance, pension and investment company, AEGON has businesses in over twenty markets in the Americas, Europe and Asia. AEGON companies employ approximately 29,500 people and serve over 40 million customers across the globe.

AEGON uses its strength and expertise to create added value for customers, employees, shareholders and the wider community. AEGON does this by encouraging innovation and by growing its businesses profitably and sustainably.

AEGON’s aim is to be a leading force in global financial services.

 

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