Edgar Filing: AEGON NV

6-K

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

May 2014

AEGON N.V.

Aegonplein 50

2591 TV THE HAGUE

The Netherlands

Aegon’s condensed consolidated interim financial statements Q1 2014, dated May 15, 2014, 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: May 15, 2014	By	/s/ J. H. P. M. van Rossum
		J. H. P. M. van Rossum
		Senior Vice President and Corporate Controller

LOGO

Table of contents



Condensed consolidated income statement			2

Condensed consolidated statement of comprehensive income			3

Condensed consolidated statement of financial position			4

Condensed consolidated statement of changes in equity			5

Condensed consolidated cash flow statement			6

Notes to the condensed consolidated interim financial statements			7


Unaudited		1

LOGO


Condensed consolidated income statement

EUR millions	Notes	Q1 2014		Q1 2013

Premium income	4	5,265		6,267
Investment income	5	1,948		2,013
Fee and commission income		466		466
Other revenues		1		2
Total revenues		7,680		8,748
Income from reinsurance ceded		699		803
Results from financial transactions	6	2,228		7,731
Other income		8		87
Total income		10,614		17,369

Benefits and expenses	7	10,013		16,881
Impairment charges / (reversals)	8	8		25
Interest charges and related fees		116		103
Other charges		2		95
Total charges		10,140		17,104

Share in net result of joint ventures		5		(8	)
Share in net result of associates		8		5
Income before tax		488		262
Income tax (expense) / benefit		(96	)	(38	)
Net income		392		224

Net income attributable to:
Equity holders of Aegon N.V.		392		224
Non-controlling interests		-		-

Earnings per share (EUR per share)	15
Basic earnings per common share		0.16		0.09
Basic earnings per common share B		-		-
Diluted earnings per common share		0.16		0.09
Diluted earnings per common share B		-		-

Amounts for 2013 have been restated for the voluntary changes in accounting policies for deferred policy acquisition costs and longevity reserving. Refer to note 2.1 for details about these changes.


2		Unaudited

LOGO


Condensed consolidated statement of comprehensive income
EUR millions	Q1 2014			Q1 2013

Net income		392			224

Other comprehensive income:
Items that will not be reclassified to profit or loss:
Changes in revaluation reserve real estate held for own use		-			1
Remeasurements of defined benefit plans		(234	)		122
Income tax relating to items that will not be reclassified		66			(50	)

Items that may be reclassified subsequently to profit or loss:
Gains / (losses) on revaluation of available-for-sale investments		1,819			(347	)
(Gains) / losses transferred to the income statement on disposal and impairment of available-for-sale investments		(112	)		(113	)
Changes in cash flow hedging reserve		198			(95	)
Movement in foreign currency translation and net foreign investment hedging reserve		(19	)		260
Equity movements of joint ventures		6			10
Equity movements of associates		(1	)		10
Income tax relating to items that may be reclassified		(580	)		169
Other		(1	)		3
Other comprehensive income for the period		1,142			(30	)
Total comprehensive income		1,534			194

Total comprehensive income attributable to:
Equity holders of Aegon N.V.		1,535			195
Non-controlling interests		(1	)		(1	)

Amounts for 2013 have been restated for the voluntary changes in accounting policies for deferred policy acquisition costs and longevity reserving. Refer to note 2.1 for details about these changes.


Unaudited		3

LOGO


Condensed consolidated statement of financial position
		Mar. 31, 2014		Dec. 31, 2013
EUR millions	Notes

Assets
Intangible assets	9		2,192		2,272
Investments	10		138,567		135,409
Investments for account of policyholders	11		167,903		165,032
Derivatives	12		16,965		13,531
Investments in joint ventures			1,450		1,426
Investments in associates			482		470
Reinsurance assets			9,771		10,344
Deferred expenses	14		9,909		10,006
Other assets and receivables			6,958		7,586
Cash and cash equivalents			7,116		5,691
Total assets			361,314		351,767

Equity and liabilities
Shareholders’ equity			19,129		17,601
Other equity instruments	16		4,580		5,015
Issued capital and reserves attributable to equity holders of Aegon N.V.			23,709		22,616
Non-controlling interests			8		10
Group equity			23,718		22,626

Trust pass-through securities			123		135
Subordinated borrowings			45		44
Insurance contracts			102,630		101,769
Insurance contracts for account of policyholders			87,031		84,311
Investment contracts			13,742		14,545
Investment contracts for account of policyholders			83,025		82,608
Derivatives	12		14,765		11,838
Borrowings	17		13,033		12,020
Other liabilities			23,202		21,871
Total liabilities			337,596		329,141
Total equity and liabilities			361,314		351,767

Amounts for 2013 have been restated for the voluntary changes in accounting policies for deferred policy acquisition costs and longevity reserving. Refer to note 2.1 for details about these changes.


4		Unaudited

LOGO


Condensed consolidated statement of changes in equity
EUR millions	Share capital ¹		Retained earnings			Revaluation reserves			Remeasurement of defined benefit plans			Other reserves			Other equity instruments			Issued capital and reserves ²			Non- controlling interests			Total

Three months ended March 31, 2014

At beginning of year		8,701		8,361			3,023			(706	)		(1,778	)		5,015			22,616			10			22,626

Net income recognized in the income statement		-		392			-			-			-			-			392			-			392

*Other comprehensive income:*
*Items that will not be reclassified to profit or loss:*
Remeasurements of defined benefit plans		-		-			-			(234	)		-			-			(234	)		-			(234	)
Income tax relating to items that will not be reclassified		-		-			-			66			-			-			66			-			66

*Items that may be reclassified subsequently to profit or loss:*
Gains / (losses) on revaluation of available-for-sale investments		-		-			1,819			-			-			-			1,819			-			1,819
(Gains) / losses transferred to income statement on disposal and impairment of available-for-sale investments		-		-			(112	)		-			-			-			(112	)		-			(112	)
Changes in cash flow hedging reserve		-		-			198			-			-			-			198			-			198
Movement in foreign currency translation and net foreign investment hedging reserves		-		-			-			(1	)		(18	)		-			(19	)		-			(19	)
Equity movements of joint ventures		-		-			-			-			6			-			6			-			6
Equity movements of associates		-		-			-			-			(1	)		-			(1	)		-			(1	)
Income tax relating to items that may be reclassified		-		-			(577	)		-			(3	)		-			(580	)		-			(580	)
Other		-		-			-			-			-			-			-			(1	)		(1	)
Total other comprehensive income		-		-			1,328			(169	)		(16	)		-			1,143			(1	)		1,142
Total comprehensive income/ (loss) for 2014		-		392			1,328			(169	)		(16	)		-			1,535			(1	)		1,534

Treasury shares		-		1			-			-			-			-			1			-			1
Other equity instruments redeemed		-		35			-			-			-			(438	)		(403	)		-			(403	)
Coupons on non-cumulative subordinated notes		-		(6	)		-			-			-			-			(6	)		-			(6	)
Coupons on perpetual securities		-		(41	)		-			-			-			-			(41	)		-			(41	)
Share options and incentive plans		-		4			-			-			-			3			7			-			7
At end of period		8,701		8,748			4,351			(875	)		(1,795	)		4,580			23,709			8			23,718

Three months ended March 31, 2013

At beginning of year (as previously stated)		9,099		10,446			6,073			(1,085	)		(1,045	)		5,018			28,506			13			28,519

Changes in accounting policies relating to deferred policy acquisition costs		-		(1,472	)		43			-			(58	)		-			(1,487	)		-			(1,487	)
Changes in accounting policies relating to policy longevity methodology		-		(925	)		-			-			-			-			(925	)		-			(925	)

At beginning of year, restated		9,099		8,049			6,116			(1,085	)		(1,103	)		5,018			26,094			13			26,107

Net income recognized in the income statement		-		224			-			-			-			-			224			-			224

Other comprehensive income:
Items that will not be reclassified to profit or loss:
Changes in revaluation reserve real estate held for own use		-		-			1			-			-			-			1			-			1
Remeasurements of defined benefit plans		-		-			-			122			-			-			122			-			122
Income tax relating to items that will not be reclassified		-		-			-			(50	)		-			-			(50	)		-			(50	)

Items that may be reclassified subsequently to profit or loss:
Gains / (losses) on revaluation of available-for-sale investments		-		-			(347	)		-			-			-			(347	)		-			(347	)
(Gains) / losses transferred to income statement on disposal and impairment of available-for-sale investments		-		-			(113	)		-			-			-			(113	)		-			(113	)
Changes in cash flow hedging reserve		-		-			(95	)		-			-			-			(95	)		-			(95	)
Movement in foreign currency translation and net foreign investment hedging reserves		-		-			-			(7	)		267			-			260			-			260
Equity movements of joint ventures		-		-			-			-			10			-			10			-			10
Equity movements of associates		-		-			-			-			10			-			10			-			10
Income tax relating to items that may be reclassified		-		-			192			-			(23	)		-			169			-			169
Transfer from / to other headings		-		(2	)		2			-			-			-			-			-			-
Other		-		4			-			-			-			-			4			(1	)		3
Total other comprehensive income		-		2			(360	)		65			264			-			(29	)		(1	)		(30	)
Total comprehensive income / (loss) for 2013		-		226			(360	)		65			264			-			195			(1	)		194

Coupons on non-cumulative subordinated notes		-		(6	)		-			-			-			-			(6	)		-			(6	)
Coupons on perpetual securities		-		(43	)		-			-			-			-			(43	)		-			(43	)
Share options and incentive plans		-		3			-			-			-			12			15			-			15
At end of period		9,099		8,229			5,756			(1,020	)		(839	)		5,030			26,255			12			26,267

¹	For a breakdown of share capital please refer to note 15.

²	Issued capital and reserves attributable to equity holders of Aegon N.V.

Amounts for 2013 have been restated for the voluntary changes in accounting policies for deferred policy acquisition costs and longevity reserving. Refer to note 2.1 for details about these changes.


Unaudited		5

LOGO


Condensed consolidated cash flow statement
EUR millions	Q1 2014			Q1 2013

Cash flow from operating activities		907			(1,073	)

Purchases and disposals of intangible assets		(2	)		(1	)
Purchases and disposals of equipment and other assets		(15	)		(10	)
Purchases, disposals and dividends of subsidiaries, associates and joint ventures		(16	)		(21	)
Cash flow from investing activities		(32	)		(32	)

Issuances, repurchases and coupons of perpetuals		(451	)		(57	)
Issuances, repurchases and coupons of non-cumulative subordinated notes		(8	)		(8	)
Issuances and repayments of borrowings		923			58
Cash flow from financing activities		465			(7	)

Net increase / (decrease) in cash and cash equivalents		1,340			(1,112	)
Net cash and cash equivalents at January 1		5,652			9,497
Effects of changes in foreign exchange rates		6			(6	)
Net cash and cash equivalents at end of period		6,998			8,379

	Mar. 31, 2014			Mar. 31, 2013
Cash and cash equivalents		7,116			8,572
Bank overdrafts		(118	)		(193	)
Net cash and cash equivalents		6,998			8,379


6		Unaudited

LOGO

Notes to the Condensed Consolidated Interim Financial Statements

Amounts in EUR millions, unless otherwise stated

Aegon N.V., incorporated and domiciled in the Netherlands, is a public limited liability company organized under Dutch law and recorded in the Commercial Register of The Hague under number 27076669 and with its registered address at Aegonplein 50, 2591 TV, The Hague, the Netherlands. Aegon N.V. serves as the holding company for the Aegon Group and has listings of its common shares in Amsterdam and New York.

Aegon N.V. (or “the company”) and its consolidated subsidiaries (“Aegon” or “the Group”) have life insurance and pensions operations in over twenty countries in the Americas, Europe and Asia and are also active in savings and asset management operations, accident and health insurance, general insurance and to a limited extent banking operations. Its headquarters are located in The Hague, the Netherlands. The Group employs over 27,000 people worldwide.

1. Basis of presentation

The condensed consolidated interim financial statements as at, and for the first quarter ended, March 31, 2014, have been prepared in accordance with IAS 34 “Interim Financial Reporting”, as adopted by the European Union (hereafter “IFRS”). They do not include all of the information required for a full set of financial statements prepared in accordance with IFRS and should therefore be read together with the 2013 consolidated financial statements of Aegon N.V. as included in Aegon’s Annual Report for 2013 and the disclosures provided in note 2.1 and 2.2 of this report which disclose the impact of voluntary changes in accounting policies that were made by Aegon effective January 1, 2014. Aegon’s Annual Report for 2013 is available on its website (aegon.com).

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. Certain amounts in prior periods have been reclassified to conform to the current year presentation. These reclassifications had no effect on net income, shareholders’ equity or earnings per share. The condensed consolidated interim financial statements as at, and for the first quarter ended, March 31, 2014, were approved by the Executive Board on May 14, 2014.

The condensed consolidated interim financial statements are presented in euro and all values are rounded to the nearest million unless otherwise stated. The consequence is that the rounded amounts may not add up to the rounded total in all cases.

The published figures in these condensed consolidated interim financial statements are unaudited.

2. Significant accounting policies

All accounting policies and methods of computation applied in the condensed consolidated interim financial statements are the same as those applied in the 2013 consolidated financial statements, except for the newly applied accounting policies as described in note 2.1 and 2.2.

New IFRS accounting standards effective

The following standards, interpretations, amendments to standards and interpretations became effective in 2014:

IFRS 10 Consolidated Financial Statements – Amendment Investment Entities;

IAS 36 Impairment of Assets – Recoverable Amounts Disclosures for Non-Financial Assets; and

IAS 39 – Novation of Derivatives and Continuation of Hedge Accounting.

None of these new or revised standards and interpretations had a significant effect on the condensed consolidated interim financial statements for the period ended March 31, 2014.


Unaudited		7

LOGO

For a complete overview of IFRS standards, published before January 1, 2014, that will be applied in future years, but were not early adopted by the Group, please refer to Aegon’s Annual Report for 2013.

Taxes

Taxes on income for the Q1 2014 interim period are accrued using the tax rate that would be applicable to expected total annual earnings.

Judgments and critical accounting estimates

Preparing the condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions, including the likelihood, timing or amount of future transactions or events, that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from the estimates made.

In preparing the condensed 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 that applied to the consolidated financial statements as at and for the year ended December 31, 2013.

Exchange rates

Assets and liabilities are translated at the closing rates on the balance sheet date. Income, expenses and capital transactions (such as dividends) are translated at average exchange rates or at the prevailing rates on the transaction date, if more appropriate. The following exchange rates are applied for the condensed consolidated interim financial statements:

Closing exchange rates


			USD	GBP
March 31, 2014	1	EUR	1.3783	0.8267
December 31, 2012	1	EUR	1.3780	0.8320

Weighted average exchange rates


			USD	GBP
Q1 2014	1	EUR	1.3695	0.8276
Q1 2013	1	EUR	1.3195	0.8506

Other

Aegon N.V. is subject to legal restrictions on the amount of dividends it can pay to its shareholders. Under Dutch law, the amount that is available to pay dividends consists of total shareholders’ equity less the issued and outstanding capital and less the reserves required by law. The revaluation account and legal reserves, foreign currency translation reserve and other reserves, cannot be freely distributed. In case of negative balances for individual reserves legally to be retained, no distributions can be made out of retained earnings to the level of these negative amounts.

In addition, Aegon’s subsidiaries, principally insurance companies, are subject to restrictions on the amounts of funds they may transfer in the form of cash dividends or otherwise to their parent companies. There can be no assurance that these restrictions will not limit or restrict Aegon in its ability to pay dividends in the future.


8		Unaudited

LOGO

2.1 Voluntary changes in accounting policies

Aegon adopted voluntary changes in accounting policies, effective January 1, 2014 which are applied retrospectively for all periods presented in this document, both in the main schedules and the associated footnotes. Changes to these policies relate to deferred policy acquisition costs and how Aegon accounts for longevity trends in The Netherlands. In the paragraphs below, details are provided for these changes in accounting policies.

Deferred policy acquisition costs

Aegon adopted one single group-wide accounting policy for deferred policy acquisition costs as of January 1, 2014. Upon initial adoption of IFRS, entities were permitted to continue existing accounting policies for insurance contracts even though such policies were often non-uniform between countries. Through adoption of a uniform, group-wide accounting policy, Aegon eliminates this lack of uniformity for the deferral of policy acquisition costs thereby providing the users of the financial statements with more meaningful information.

IFRS 4 neither prohibits nor requires the deferral of policy acquisition costs, nor does it prescribe what acquisition costs are deferrable. Thus, in developing the new policy, Aegon considered and sought alignment with the proposed description of deferrable policy acquisition costs within the IFRS Insurance Contracts Phase II exposure draft (Exposure Draft). In the absence of detailed guidance in the Exposure Draft, Aegon also considered the recently adopted guidance in U.S. GAAP (ASU 2010-26 “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts”), if not conflicting with IFRS 4 or the Exposure Draft. IFRS currently differs from US GAAP by not limiting the deferral to expenses from successful efforts only and in the detail of how that principle is applied. Under the new accounting policy, deferred policy acquisition costs include costs that are directly attributable to the acquisition or renewal of insurance contracts. The previous accounting policy was based on a broader definition of costs that could be deferred.

Details of the impact of applying this voluntary change to previous periods are provided in the tables presented in note 2.2.

Longevity reserving

As of January 1, 2014, Aegon amended its policy to determine the insurance contract liability of Aegon The Netherlands to account for longevity risk assumed by Aegon. This change will provide more current information about the financial effects of changes in life expectancy of the insured population. The change will also increase alignment with market pricing of longevity risk. It will supply users of the financial statements with more relevant decision making information on the insurance contract liability and will improve transparency on the longevity risks assumed by Aegon.

Mortality tables will be updated annually based on the prospective tables taking into account longevity trends. The new methodology will take into account the contractual cash flows related to the longevity risk assumed. Previously the methodology applied by Aegon The Netherlands considered realized mortalities based on retrospective mortality tables.

Details of the impact of applying this voluntary change to previous periods are provided in the tables presented in note 2.2.


Unaudited		9

LOGO

2.2 Impact of voluntary changes in accounting policies


Impact of voluntary changes in accounting policies on consolidated income statement
	Q1 2013 (previously reported)			Change in accounting policy						Q1 2013 (restated)

				Deferred policy acquisition costs			Longevity reserving
EUR millions

Benefits and expenses		16,909			(2	)		(26	)		16,881

Income tax (expense) / benefit		(30	)		(2	)		(6	)		(38	)

Net effect		-			-			20			-

Earnings per share (EUR per share)
Basic earnings per common share		0.08			-			0.01			0.09
Basic earnings per common share B		-			-			-			-
Diluted earnings per common share		0.08			-			0.01			0.09
Diluted earnings per common share B		-			-			-			-

Earnings per common share calculation
Net income attributable to equity holders of Aegon N.V.		204			-			20			224
Preferred dividend		-			-			-			-
Coupons on other equity instruments		(49	)		-			-			(49	)
Earnings attributable to common shareholders		155			-			20			175

Weighted average number of common shares outstanding (in million)		1,943			-			-			1,943


Impact of voluntary changes in accounting policies on condensed consolidated statement of comprehensive income
	Q1 2013 (previously reported)			Change in accounting policy					Q1 2013 (restated)

				Deferred policy acquisition costs			Longevity reserving
EUR millions

Net income		204			-			20		224

Gains / (losses) on revaluation of available-for-sale investments		(334	)		(13	)		-		(347	)
Movement in foreign currency translation and net foreign investment hedging reserves		235			25			-		260
Income tax relating to items that may be reclassified		164			5			-		169
Net effect other comprehensive income for the period					17			-
Net effect comprehensive income					17			20

Total comprehensive income attributable to:
Equity holders of Aegon N.V.		158			17			20		195
Non-controlling interests		(1	)		-			-		(1	)


10		Unaudited

LOGO


Impact of changes in accounting policies on the consolidated statement of financial position
	December 31, 2013¹⁾		Change in accounting policy						Reclassification ²⁾		December 31, 2013 (restated)

			Deferred policy acquisition costs			Longevity reserving
EUR millions

Assets
Intangible assets		2,246		26			-			-		2,272
Investments in joint ventures		1,427		(1	)		-			-		1,426
Reinsurance assets		10,345		(2	)		-			-		10,344
Other assets and receivables		7,429		2			-			156		7,586
Deferred expenses		12,040		(2,035	)		-			-		10,006

Equity and liabilities
Shareholders’ equity		19,966		(1,533	)		(832	)		-		17,601

Insurance contracts		100,642		54			1,073			-		101,769
Other liabilities		22,487		(531	)		(241	)		156		21,871

¹	As reported in Aegon’s Annual Report dated March 19, 2014.

²	As a result of the voluntary accounting changes the balance of the Dutch tax group as at December 31, 2013 changed from a deferred tax liability to a deferred tax asset.


Impact of voluntary changes in accounting policies on consolidated statement of changes in equity
	December 31, 2013¹⁾			Change in accounting policy						December 31, 2013 (restated)

				Deferred policy acquisition costs			Longevity reserving
EUR millions

Share capital		8,701			-			-			8,701
Retained earnings		10,750			(1,557	)		(832	)		8,361
Revaluation reserves		2,998			26			-			3,023
Remeasurement of defined benefit plans		(706	)		-			-			(706	)
Other reserves		(1,777	)		(1	)		-			(1,778	)
Shareholders’ equity		19,966			(1,533	)		(832	)		17,601

¹	As reported in Aegon’s Annual Report dated March 19, 2014.


Unaudited		11

LOGO

3. Segment information

3.1 Income statement


EUR millions	Americas			The Netherlands			United Kingdom			New Markets			Holding and other activities			Eliminations			Segment Total			Joint ventures and associates eliminations			Consolidated
*Three months ended March 31, 2014*

Underlying earnings before tax geographically		302			129			27			61			(21	)		-			498			(8	)		490
Fair value items		(49	)		(36	)		(3	)		7			(36	)		-			(116	)		5			(111	)
Realized gains / (losses) on investments		9			84			16			2			-			-			110			(1	)		109
Impairment charges		(6	)		(4	)		-			(9	)		-			-			(19	)		-			(19	)
Impairment reversals		10			2			-			-			-			-			12			-			12
Other income / (charges)		3			(3	)		(4	)		(2	)		-			-			(6	)		-			(6	)
Run-off businesses		14			-			-			-			-			-			14			-			14
Income before tax		282			172			37			59			(58	)		-			492			(4	)		488
Income tax (expense) / benefit		(63	)		(29	)		(9	)		(16	)		16			-			(100	)		4			(96	)
Net income		219			143			28			43			(42	)		-			392			-			392
Inter-segment underlying earnings		(41	)		(14	)		(14	)		65			5

Revenues
Life insurance gross premiums		1,488			1,499			1,220			373			2			(17	)		4,564			(85	)		4,479
Accident and health insurance		417			130			15			55			1			(1	)		618			(8	)		610
General insurance		-			135			-			58			-			-			194			(18	)		176
Total gross premiums		1,906			1,764			1,234			486			3			(19	)		5,375			(111	)		5,265
Investment income		803			636			465			54			78			(78	)		1,958			(10	)		1,948
Fee and commission income		313			78			10			142			-			(57	)		486			(20	)		466
Other revenues		-			-			-			1			-			-			2			(1	)		1
Total revenues		3,022			2,478			1,709			683			82			(153	)		7,821			(141	)		7,680
Inter-segment revenues		4			-			-			70			79


EUR millions	Americas			The Netherlands			United Kingdom			New Markets			Holding and other activities			Eliminations			Segment Total			Joint ventures and associates eliminations			Consolidated
*Three months ended March 31, 2013*

Underlying earnings before tax geographically		307			114			21			60			(38	)		-			464			(19	)		445
Fair value items		(225	)		(73	)		(3	)		(3	)		25			-			(279	)		16			(263	)
Realized gains / (losses) on investments		46			63			1			2			-			-			112			-			112
Impairment charges		(16	)		(8	)		-			(10	)		-			-			(34	)		-			(34	)
Impairment reversals		16			-			-			-			-			-			16			-			16
Other income / (charges)		(5	)		-			5			(4	)		-			-			(4	)		-			(4	)
Run-off businesses		(10	)		-			-			-			-			-			(10	)		-			(10	)
Income before tax		113			96			24			45			(13	)		-			265			(3	)		262
Income tax (expense) / benefit		(2	)		(15	)		(9	)		(16	)		1			-			(41	)		3			(38	)
Net income		111			81			15			29			(12	)		-			224			-			224
Inter-segment underlying earnings		(46	)		(14	)		(14	)		67			7

Revenues
Life insurance gross premiums		1,545			2,015			1,732			350			-			(19	)		5,623			(142	)		5,481
Accident and health insurance		444			123			-			58			2			(2	)		625			(7	)		618
General insurance		-			128			-			40			-			-			168			-			168
Total gross premiums		1,989			2,266			1,732			448			2			(21	)		6,416			(149	)		6,267
Investment income		841			548			580			65			84			(83	)		2,035			(22	)		2,013
Fee and commission income		297			82			26			134			-			(59	)		480			(14	)		466
Other revenues		1			-			-			1			1			-			3			(1	)		2
Total revenues		3,128			2,896			2,338			648			87			(163	)		8,934			(186	)		8,748
Inter-segment revenues		5			-			-			73			85

Non-IFRS measures

For segment reporting purposes the following non-IFRS financial measures are included: underlying earnings before tax, income tax and income before tax. These non-IFRS measures are calculated by consolidating on a proportionate basis Aegon’s joint ventures and associated companies. Aegon believes that its non-IFRS measures provide meaningful information about the underlying results of Aegon’s business, including insight into the financial measures that Aegon’s senior management uses in managing the business.


12		Unaudited

LOGO

Among other things, Aegon’s senior management is compensated based in part on Aegon’s results against targets using the non-IFRS measures presented here. While many other insurers in Aegon’s peer group present substantially similar non-IFRS measures, the non-IFRS measures presented in this document may nevertheless differ from the non-IFRS measures presented by other insurers. There is no standardized meaning to these measures under IFRS or any other recognized set of accounting standards. Readers are cautioned to consider carefully the different ways in which Aegon and its peers present similar information before comparing them.

Aegon believes the non-IFRS measures shown herein, when read together with Aegon’s reported IFRS financial statements, provide meaningful supplemental information for the investing public to evaluate Aegon’s business after eliminating the impact of current IFRS accounting policies for financial instruments and insurance contracts, which embed a number of accounting policies alternatives that companies may select in presenting their results (i.e. companies can use different local GAAPs to measure the insurance contract liability) and that can make the comparability from period to period difficult.

The reconciliation from underlying earnings before tax to income before tax, being the most comparable IFRS measure, is presented in the tables in this note.

Underlying earnings

Underlying earnings reflect our profit from underlying business operations and exlude components that relate to accounting mismatches that are dependent on market volatility or relate to events that are considered ouside the normal course of business. Below we describe items that are excluded from underlying earnings.

Fair value items

Fair value items include the over- or underperformance of investments and guarantees held at fair value for which the expected long-term return is included in underlying earnings. Changes to these long-term return assumptions are also included in the fair value items.

In addition, hedge ineffectiveness on hedge transactions, fair value changes on economic hedges without natural offset in earnings and for which no hedge accounting is applied and fair value movements on real estate are included under fair value items.

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 include assets such as investments in 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 deferred policy acquisition costs (“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 excluded is any over- or underperformance compared to management’s expected return.


Unaudited		13

LOGO

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 New Markets) are excluded from underlying earnings, and the long-term expected return for these guarantees is set at zero.

Holding and other activities include certain issued bonds that are held at fair value through profit or loss (“FVTPL”). The interest rate risk on these bonds is hedged using swaps. The fair value movement resulting from changes in Aegon’s credit spread used in the valuation of these bonds are excluded from underlying earnings and reported under fair value items.

Realized gains or losses on investments

Includes realized gains and losses on available-for-sale investments, mortgage loans and other loan portfolios.

Impairment charges/reversals

Includes impairments and reversals on available-for-sale debt securities and impairments on shares including the effect of deferred policyholder acquisition costs, mortgage loans and loan portfolios at amortized cost and associates respectively.

Other income or charges

Other income or charges is used to report any items which cannot be directly allocated to a specific line of business. Also items that are outside the normal course of business are reported under this heading.

Other charges include restructuring charges that are considered other charges for segment reporting purposes because they are outside the normal course of business. In the condensed consolidated interim financial statements, these charges are included in operating expenses.

Run-off businesses

Includes underlying results of business units where management has decided to exit the market and to run-off the existing block of business. Currently, this line includes the run-off of the institutional spread-based business, structured settlements blocks of business, Bank-Owned and Corporate-Owned Life Insurance (BOLI/COLI) business, and the sale of the life reinsurance business in the United States. Aegon has other blocks of business for which sales have been discontinued and of which the earnings are included in underlying earnings.

Share in earnings of joint ventures and associates

Earnings from Aegon’s joint ventures and Aegon’s associates are reported on an underlying earnings basis.


14		Unaudited

LOGO

3.2 Investments geographically

Amounts included in the tables on investments geographically are presented on an IFRS-basis.


									amounts in million EUR (unless otherwise stated)
Americas USD		United Kingdom GBP		March 31, 2014	Americas		The Netherlands		United Kingdom		New Markets		Holding & other activities		Eliminations			Total EUR
				Investments
	2,046		95	Shares		1,485		328		115		32		31		(1	)		1,990
	80,426		8,936	Debt securities		58,351		20,120		10,809		3,025		-		-			92,305
	11,056		1	Loans		8,021		25,080		1		514		-		-			33,616
	11,852		53	Other financial assets		8,599		323		64		32		104		-			9,121
	1,011		-	Investments in real estate		733		801		-		1		-		-			1,535
	106,391		9,084	Investments general account		77,190		46,652		10,989		3,603		135		(1	)		138,567
	1,737		13,012	Shares		1,260		8,555		15,740		324		-		(8	)		25,871
	6,523		9,422	Debt securities		4,733		17,607		11,398		291		-		-			34,028
	97,123		21,801	Unconsolidated investment funds		70,466		-		26,371		5,826		-		-			102,663
	376		2,992	Other financial assets		273		393		3,619		10		-		-			4,295
	-		864	Investments in real estate		-		-		1,045		-		-		-			1,045
	105,760		48,091	Investments for account of policyholders		76,732		26,555		58,172		6,450		-		(8	)		167,903

	212,150		57,176	Investments on balance sheet		153,922		73,207		69,161		10,054		135		(9	)		306,470
	159,808		277	Off balance sheet investments third parties		115,945		974		335		57,899		-		-			175,154
	371,958		57,453	Total revenue generating investments		269,867		74,182		69,496		67,953		135		(9	)		481,624

				Investments
	87,965		8,939	Available-for-sale		63,822		20,302		10,813		3,041		9		-			97,986
	11,056		1	Loans		8,021		25,080		1		514		-		-			33,616
	112,118		47,372	Financial assets at fair value through profit or loss		81,345		27,025		57,303		6,497		126		(9	)		172,287
	1,011		864	Investments in real estate		733		801		1,045		1		-		-			2,580
	212,150		57,176	Total investments on balance sheet		153,922		73,207		69,161		10,054		135		(9	)		306,470

	13		-	Investments in joint ventures		10		819		-		621		-		-			1,450
	117		17	Investments in associates		85		19		20		358		-		-			482
	29,767		4,412	Other assets		21,597		21,803		5,337		2,953		31,959		(30,742	)		52,912
	242,048		61,604	Consolidated total assets		175,614		95,848		74,518		13,986		32,094		(30,751	)		361,314


									amounts in million EUR (unless otherwise stated)
Americas USD		United Kingdom GBP		December 31, 2013	Americas		The Netherlands		United Kingdom		New Markets		Holding & other activities		Eliminations			Total EUR
				Investments
	2,007		46	Shares		1,456		447		55		45		36		(2	)		2,036
	78,719		8,719	Debt securities		57,125		19,095		10,479		2,812		-		-			89,511
	11,289		1	Loans		8,192		24,708		1		508		-		-			33,409
	11,418		173	Other financial assets		8,286		293		208		30		103		-			8,920
	993		-	Investments in real estate		721		810		-		1		-		-			1,532
	104,425		8,938	Investments general account		75,780		45,354		10,743		3,396		139		(2	)		135,409
	1,804		12,792	Shares		1,309		8,450		15,375		297		-		(8	)		25,423
	6,675		9,643	Debt securities		4,844		16,791		11,590		307		-		-			33,531
	94,950		21,776	Unconsolidated investment funds		68,905		-		26,173		5,744		-		-			100,822
	230		3,062	Other financial assets		167		405		3,680		9		-		-			4,261
	-		828	Investments in real estate		-		-		996		-		-		-			996
	103,659		48,101	Investments for account of policyholders		75,224		25,646		57,813		6,357		-		(8	)		165,032

	208,084		57,039	Investments on balance sheet		151,004		70,999		68,556		9,754		139		(10	)		300,441
	155,179		239	Off balance sheet investments third parties		112,611		994		287		60,951		-		-			174,843
	363,262		57,277	Total revenue generating investments		263,616		71,993		68,843		70,705		139		(10	)		475,285

				Investments
	86,347		8,892	Available-for-sale		62,661		19,452		10,687		2,827		8		-			95,635
	11,289		1	Loans		8,192		24,708		1		508		-		-			33,409
	109,455		47,318	Financial assets at fair value through profit or loss		79,430		26,029		56,872		6,418		131		(10	)		168,870
	993		828	Investments in real estate		721		810		996		1		-		-			2,528
	208,084		57,039	Total investments on balance sheet		151,004		70,999		68,556		9,754		139		(10	)		300,441

	-		-	Investments in joint ventures		-		819		-		607		-		-			1,426
	112		16	Investments in associates		81		19		20		350		1		-			470
	31,112		4,227	Other assets		22,577		17,067		5,080		2,936		32,327		(30,561	)		49,430
	239,307		61,282	Consolidated total assets		173,663		88,903		73,656		13,647		32,466		(30,571	)		351,767

4. Premium income and premium to reinsurers



EUR millions	Q1 2014	Q1 2013

Gross
Life	4,479	5,481
Non-Life	786	786
Total	5,265	6,267

Reinsurance
Life	645	671
Non-Life	78	90
Total	722	761


Unaudited		15

LOGO

5. Investment income



EUR millions	Q1 2014	Q1 2013

Interest income	1,697	1,691
Dividend income	220	292
Rental income	30	30
Total investment income	1,948	2,013

Investment income related to general account	1,394	1,384
Investment income for account of policyholders	553	629
Total	1,948	2,013

6. Results from financial transactions



EUR millions	Q1 2014		Q1 2013

Net fair value change of general account financial investments at FVTPL other than derivatives	69		144
Realized gains and (losses) on financial investments	110		113
Gains and (losses) on investments in real estate	(5	)	(15	)
Net fair value change of derivatives	89		(265	)
Net fair value change on for account of policyholder financial assets at FVTPL	1,946		7,743
Net fair value change on investments in real estate for account of policyholders	6		(10	)
Net foreign currency gains and (losses)	6		2
Net fair value change on borrowings and other financial liabilities	7		19
Total	2,228		7,731

Net fair value change on for accounts of policyholder financial assets at FVTPL is offset by amounts in the Claims and benefits line reported in note 7 - Benefits and expenses.

7. Benefits and expenses



EUR millions	Q1 2014		Q1 2013

Claims and benefits	9,332		16,193
Employee expenses	475		512
Administration expenses	276		249
Deferred expenses	(317	)	(314	)
Amortization charges	247		241
Total	10,013		16,881

Claims and benefits includes claims and benefits in excess of account value for products for which deposit accounting is applied and the change in valuation of liabilities for insurance and investment contracts. In addition, commissions and expenses and premium paid to reinsurers are included. Claims and benefits fluctuates mainly as a result of changes in technical provisions resulting from fair value changes on for account of policyholder financial assets included in Results from financial transactions (note 6).


16		Unaudited

LOGO

8. Impairment charges/(reversals)



EUR millions	Q1 2014		Q1 2013

Impairment charges / (reversals) comprise:
Impairment charges on financial assets, excluding receivables ¹	22		40
Impairment reversals on financial assets, excluding receivables ¹	(12	)	(16	)
Impairment charges / (reversals) on non-financial assets and receivables	(2	)	1
Total	8		25

Impairment charges on financial assets, excluding receivables, from:
Debt securities and money market instruments	5		13
Loans	16		27
Total	22		40

Impairment reversals on financial assets, excluding receivables, from:
Debt securities and money market instruments	(10	)	(14	)
Loans	(2	)	(2	)
Total	(12	)	(16	)

¹Impairment charges / (reversals) on financial assets, excluding receivables, are excluded from underlying earnings before tax for segment reporting (refer to note 3).

9. Intangible assets



EUR millions	Mar. 31, 2014	Dec. 31, 2013

Goodwill	210	211
VOBA	1,695	1,768
Future servicing rights	236	239
Software	47	50
Other	4	4
Total intangible assets	2,192	2,272

10. Investments



EUR millions	Mar. 31, 2014	Dec. 31, 2013

Available-for-sale (AFS)	97,986	95,635
Loans	33,616	33,409
Financial assets at fair value through profit or loss (FVTPL)	5,429	4,833
Financial assets, excluding derivatives	137,032	133,877
Investments in real estate	1,535	1,532
Total investments for general account, excluding derivatives	138,567	135,409


Unaudited		17

LOGO



Total financial assets, excluding derivatives
	AFS		FVTPL		Loans		Total

Shares		749		1,240		-		1,990
Debt securities		90,621		1,684		-		92,305
Money market and other short-term investments		5,449		700		-		6,149
Mortgages		-		-		29,638		29,638
Private loans		-		-		1,785		1,785
Deposits with financial institutions		-		-		149		149
Policy loans		-		-		1,911		1,911
Other		1,167		1,804		134		3,105
March 31, 2014		97,986		5,429		33,616		137,032

		AFS		FVTPL		Loans		Total

Shares		787		1,250		-		2,036
Debt securities		88,162		1,350		-		89,511
Money market and other short-term investments		5,524		449		-		5,974
Mortgages		-		-		29,245		29,245
Private loans		-		-		1,783		1,783
Deposits with financial institutions		-		-		292		292
Policy loans		-		-		1,955		1,955
Other		1,163		1,784		135		3,082
December 31, 2013		95,635		4,833		33,409		133,877

11. Investments for account of policyholders



EUR millions	Mar. 31, 2014	Dec. 31, 2013
Shares	25,871	25,423
Debt securities	34,028	33,531
Money market and short-term investments	967	850
Deposits with financial institutions	2,842	3,006
Unconsolidated investment funds	102,663	100,822
Other	487	404
Total investments for account of policyholders at fair value through profit or loss, excluding derivatives	166,858	164,037
Investment in real estate	1,045	996
Total investments for account of policyholders	167,903	165,032

12. Derivatives

The movements in derivative balances mainly result from changes in interest rates and other market movements during the period.


18		Unaudited

LOGO

13. Fair value

The following tables provide an analysis of financial instruments recorded at fair value on a recurring basis by level of the fair value hierarchy:


Fair value hierarchy
EUR millions	Level I		Level II		Level III		Total
As at March 31, 2014

Financial assets carried at fair value
Available-for-sale investments
Shares		159		272		318		749
Debt securities		22,068		65,481		3,072		90,621
Money markets and other short-term instruments		-		5,449		-		5,449
Other investments at fair value		25		331		811		1,167
March 31, 2014		22,252		71,533		4,202		97,986

Fair value through profit or loss
Shares		1,064		177		-		1,240
Debt securities		72		1,603		9		1,684
Money markets and other short-term instruments		95		605		-		700
Other investments at fair value		1		574		1,230		1,804
Investments for account of policyholders ¹		100,481		64,450		1,927		166,858
Derivatives		32		16,650		283		16,965
March 31, 2014		101,744		84,058		3,449		189,251
Total financial assets at fair value		123,995		155,591		7,651		287,238

Financial liabilities carried at fair value
Investment contracts for account of policyholders ²		13,267		19,738		115		33,120
Borrowings ³		513		497		-		1,010
Derivatives		28		13,072		1,665		14,765
Total financial liabilities at fair value		13,807		33,308		1,780		48,895

As at December 31, 2013

Financial assets carried at fair value
Available-for-sale investments
Shares		202		262		322		787
Debt securities		20,815		64,184		3,162		88,162
Money markets and other short-term instruments		-		5,524		-		5,524
Other investments at fair value		25		312		826		1,163
December 31, 2013		21,043		70,282		4,310		95,635

Fair value through profit or loss
Shares		1,120		130		-		1,250
Debt securities		64		1,268		17		1,350
Money markets and other short-term instruments		95		354		-		449
Other investments at fair value		-		567		1,217		1,784
Investments for account of policyholders ¹		99,040		63,008		1,989		164,037
Derivatives		69		13,134		328		13,531
December 31, 2013		100,388		78,461		3,552		182,401
Total financial assets at fair value		121,431		148,744		7,862		278,036

Financial liabilities carried at fair value
Investment contracts for account of policyholders ²		12,872		19,641

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents