RBS 2012 Annual Report Download - page 104

Reconciliations of managed to statutory income statements
Basis of preparation of managed results
The financial information on a managed basis, prepared using the Group’s accounting policies, shows the underlying performance of the Group which
excludes certain one-off and other items which are listed on page 38. This information is provided to give a better understanding of the results of the
Group’s operations.
Income statement for the year ended 31 December 2012
Managed
Reallocation
of one-off
items
Direct Line
Group Statutory
£m £m £m £m
Net interest income 11,695 (15) (278) 11,402
Non-interest income (excluding insurance net premium income) 10,374 (4,129) 294 6,539
Insurance net premium income 3,718 — (3,718) —
Non-interest income 14,092 (4,129) (3,424) 6,539
Total income 25,787 (4,144) (3,702)17,941
Operating expenses (14,619) (4,220)1,012 (17,827)
Profit before insurance net claims and impairment losses 11,168 (8,364) (2,690)114
Insurance net claims (2,427) — 2,427 —
Operating profit before impairment losses 8,741 (8,364) (263) 114
Impairment losses (5,279) — — (5,279)
Operating profit/(loss) 3,462 (8,364) (263) (5,165)
Own credit adjustments (4,649) 4,649 — —
Asset Protection Scheme (44) 44 — —
Payment Protection Insurance costs (1,110)1,110 — —
Interest Rate Hedging Products redress and related costs (700)700 — —
Regulatory fines (381)381 — —
Amortisation of purchased intangible assets (178) 178 — —
Integration and restructuring costs (1,550)1,550 — —
Gain on redemption of own debt 454 (454) — —
Strategic disposals 113 (113) — —
Bank levy (175) 175 — —
Write-down of goodwill and other intangible assets (518) 518 — —
RFS Holdings minority interest (20)20 — —
Operating loss including the results of Direct Line Group discontinued operations (5,296) 394 (263) (5,165)
Direct Line Group discontinued operations (1) 131 (394) 263 —
Operating loss before tax (5,165) — — (5,165)
Tax charge (469) — — (469)
Loss from continuing operations (5,634) — — (5,634)
(Loss)/profit from discontinued operations, net of tax
- Direct Line Group (184) — — (184)
- Other 12 — — 12
Loss from discontinued operations, net of tax (172)— — (177)
Loss for the year (5,806) — — (5,806)
Non-controlling interests 123 — — 123
Preference share and other dividends (288) — — (288)
Loss attributable to ordinary and B shareholders (5,971)— — (5,971)
Note:
(1) Included within Direct Line Group discontinued operations are the managed basis divisional results of Direct Line Group (DLG), certain DLG related activities in Central items; and related one-off and
other items including write-down of goodwill, integration and restructuring costs and strategic disposals.
102
Business review continued