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Allianz Annual Report 2012

Operating profit should be viewed as complementary to, and not as a substitute for, income before income taxes or net income as determined in accordance with IFRS. Upcoming change of the reportable segments measure of profit or loss As of the first quarter 2013, all restructuring charges will be presented within operating profit. The Allianz Group be­ lieves this change will result in information that is more relevant to the economic decision-making needs of users of financial statements as it better reflects that restructur­ ing charges relate to improving the competitiveness of or­ dinary business activities. There is neither an impact on recognitionandmeasurementoftherestructuringcharges, nor on the shareholders’ equity or the net income arising out of this change. If this change of the reportable seg­ ments measure of profit or loss had been applied in 2012, the operating profit would have been reduced by € 252 mn (2011: € 167 mn; 2010: € 263 mn). Recent organizational changes At the beginning of 2012, the ­Allianz Group reorganized the structure of its insurance activities to reflect the changes in the responsibilities of the Board of Management. The insur­ ance activities of Spain, Portugal, Mexico and South Amer­ ica were combined in the newly created reportable seg­ ment Iberia & Latin America. As a consequence, the former Europe incl. South America was renamed into Western & Southern Europe and NAFTA Markets was reduced to USA. Previously reported information has been adjusted to re­ flect this change in the composition of the ­Allianz Group’s reportable segments. Additionally, some minor realloca­ tions between the reportable segments have been made. To better understand the ongoing operations of the busi­ ness, the ­Allianz Group generally excludes the following non-operating effects: −− acquisition-related expenses and the amortization of intangible assets, as these relate to business combina­ tions; −− restructuring charges, because the timing of these is largely at the discretion of the ­Allianz Group; −− interest expenses from external debt, as these relate to the capital structure of the ­Allianz Group; −− income from fully consolidated private equity invest­ ments (net), as this represents income from industrial holdings, which is outside the ­Allianz Group’s normal scope of operating business; −− income from financial assets and liabilities carried at fair value through income (net), as this does not reflect the ­Allianz Group’s long-term performance; −− realized capital gains and losses (net) or impairments of investments (net), as the timing of sales that would result in such realized gains or losses is largely at the discretion of the ­Allianz Group and impairments are largely dependent on market cycles or issuer-specific events over which the ­Allianz Group has little or no con­ trol and which can and do vary, sometimes materially, through time. Against this general rule, the following exceptions apply: −− in all segments, income from financial assets and liabil­ ities carried at fair value through income (net) is treated as operating profit if the income refers to operating business; −− forLife/HealthinsurancebusinessandProperty-Casualty insurance products with premium refunds, all items listed above are included in operating profit if the profit sources are shared with policyholders. This is also ap­ plicable to tax benefits, which are shared with policy­ holders. IFRS requires that the consolidated income statements present all tax benefits in the income taxes line item, even though these belong to policyholders. In the segment reporting, the tax benefits are reclassified and shown within operating profit in order to adequate­ ly reflect the policyholder participation in tax benefits. Annual Report 2012    Allianz Group D Consolidated Financial Statements 221 Consolidated Balance Sheets 222 Consolidated Income Statements 223 Consolidated Statements of Comprehensive Income 224 Consolidated Statements of Changes in Equity 225 Consolidated Statements of Cash Flows 228 Notes to the Consolidated Financial Statements 259