Annual Report and Financial Statements 2012

ANNUAL REPORT AND FINANCIAL STATEMENTS 2012 | 57

2. Net revenue

2012 £m

Base management fees

Performance-related management fees Total investment management fees

Other income Total revenue

Renewal commission on open-ended investment products Other selling expenses

Fee and commission expenses Net revenue

243.1 9.5

252.6 4.8

257.4 (8.0)

(5.9) (13.9) 243.5

Other income in 2012 includes £2.0m (2011: £1.4m) of compensation in respect of the withdrawal of strategic partner assets. 3. Net gains and investment income on unit-linked assets

Interest income on financial instruments attributable to policyholders Dividend income

Movement in fair values of unit-linked assets 28 Note 17(a)(i)(1) gives further background to the unit-linked assets held by the Group.

4. Expenses (a) Total operating expenses Total operating expenses, including exceptional costs, can be summarised into the following categories:

2012 £m

Employee and member benefits and related expenses* Premises expenses

Communication and information technology expenses Third-party administration expenses Promotional and client servicing expenses Depreciation and amortisation expenses Other expenses

Total operating expenses

(b) Operating expenses Operating expenses include the following:

Depreciation of owned tangible property, plant and equipment Amortisation of software and licences Auditor’s remuneration

Operating lease rentals – land and buildings (head leases) Operating lease rentals – vehicles Operating lease rentals – other*

Rentals receivable – operating leases (sub-leases) Loss on disposal of property, plant and equipment Other foreign exchange losses

* Stated net of amounts receivable from brokers under Commission Sharing Arrangements.

Sub-lease rentals of £3.6m (2011: £3.9m) were received during the year, of which £3.3m (2011: £3.7m) relates to guaranteed payments and £0.3m (2011: £0.2m) relates to contingent payments. All amounts included within operating lease and sub-lease rental payments represent minimum lease payments.

Notes 12

13 4(c)

2012 £m

3.0 0.6 1.2

10.3 0.4 2.7

(3.6) 0.9 2.0

2011 £m

3.2 0.6 1.3

10.7 0.4 2.3

(3.9) 0.3 –

131.6 10.7 15.1 11.0 5.1

46.1 18.9

238.5 * This includes £5.4m (2011: £7.4m) of employment-related expenses, which are not included in the employee benefit expense table in note 5.

2011 £m

149.4 12.6 16.6 8.5 7.1

49.6 23.1

266.9

Notes 7

2012 £m

6.3 6.8

27.5 40.6

2011 £m

7.2 7.3

(0.8) 13.7

2011 £m

267.2 11.8

279.0 4.2

283.2 (8.8)

(7.4) (16.2) 267.0

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