Slide 1: Annual results 2005
Annual results 2005 Andrew Mohl Chief Executive Officer 16 February 2006
Slide 2: Summary of 2005 full year results
Summary of 2005 full year results « Strong growth in earnings > Underlying contribution up 24% to A$801m « Encouraging results in all key performance indicators vv Ww Vv Underlying return on equity up from 21.2% to 25.0% AFS value of new business up 11%; AFS embedded value up 28%, before transfers O
Slide 3: Outline
Outline =» Group overview « Capital management = Business unit review = Value metrics » Value sensitivities « Strategic overview
Slide 4: Overview — 2005 full year profit summary
Overview — 2005 full year profit summary ASm FY 05 FY 04 % change AMP Financial Services 516 415 + 24% AMP Capital Investors 92 73 + 26% Cobalt/Gordian 74 51 + 45% BU operating margins 681 539 + 26% Discontinued businesses! - (2) - Group office costs (34) (35) -3% Total operating margins 647 502 + 2
Slide 5: Overview — growth in double digits
Overview — growth in double digits AUM # Group AUM up 16% to A$104b # AMPCI AUM up 13% to A$91b # AFS AUM up 16% to A$67b Net cashflows « AFS net cashflows up A$1.1b to A$2.3b «= AMPCI net cashflows (A$0.4b) — A$2.2b net external cashflows offset by internal net outflows Risk premiums # Individual r
Slide 6: Overview — group cost ratio down to 40.6%
Overview — group cost ratio down to 40.6% 3,500 3,131 80 3,000 70 2,500 60 2,000 50 — 45.5% © 740 1,500 ° 40.6% 30 1,000 833 7 20 500 440 AgSm 0 of ae 0% FY 04 FY 05 Controllable costs Om Cost to income ratio * AMP group including previously owned HHG entities * Demerged basis, exciuding UK costs an
Slide 7: Overview — underlying contribution up 24%
Overview — underlying contribution up 24% 645 ASSOOm FY 04 AES AES mature AFS NZ AMPCI Cobait} ‘Transitional! Lower interest Underlying FY 05 underlying contemporary — margins margins margins Gordian tax relief expense on investment = —underlying contribution margins margins and other* Group debt in
Slide 8: Overview — underlying return on equity up to 25%
Overview — underlying return on equity up to 25% 30 4 % 0 FY 014 FY 024 FY 03* FY 04 FY 05 * AMP group including previously owned HHG entities * Demerged AMP
Slide 9: Overview — dividend up 19%
Overview — dividend up 19% 2005 2004 Average shares on issue 1,864m 1,853m Earnings per share (underlying) A$0.43 A$0.35 Dividend per share A$0.32 A$0.27 Payout ratio 75% 75% Franking 75% 75% Capital return’ A$0.40 1 Paid in June 2005
Slide 10: Good progress on goal to double the value of an investment in AMP
Good progress on 5 year goal to double the value of an investment in AMP by mid 2010 16% change in six months over opening value 47 13.5 11.6 0.2 euugeecuecueuscueesl COE et eeeeeceecnss A$b Opening value - June 05 Dividend - 2H 05 Change in median Value at Dec 05 using median analysts' valuation an
Slide 11: Capital management
Capital management
Slide 12: Group shareholder capital resources
Group shareholder capital resources Notional allocation at 31 December 2005 31 December 2004 il ql wii if mm EEC Agm mm) i AMP Financial Services 668 1,551 450 2,001 509 1,603 450 2,053 AMP Life 540 1,393 450 1,843 382 4,448 450 4,898 AMP Banking 128 188 - 158 127 165 {56 AMP Capital Investors. 28 1
Slide 13: Continued improvement in credit rating metrics
Continued improvement in credit rating metrics 14.0 31 Dec 2005 12.0 30 June 2005 10.0 8.0 31 Dec 2003 31 Dec 2004 5.0 30 June 2004 Underlying interest cover 4.0 30 June 2003 2.0 0.0 60% 50% 40% 30% 20% 10% 0% S&P gearing | S&P indicative A range
Slide 14: Group office capital A$1.95b at end 2005
Group office capital A$1.95b at end 2005 2,140 (265) 1,948 A$m Group office AMP income = Capital Dividends Transfers Movements Group office Group office capitalat Securities return paid less from BUs in Cobalt/ netearnings capital at 41 Jan 05 repayment dividends Gordian foan 31 Dec 05 reinvested
Slide 15: Capital management — initiatives and next steps
Capital management — initiatives and next steps * Capital return of A$750m >» Proposal to May 18 AGM >» Subject to shareholder approval, payment of A$0.40 a share in June >» Subject to ATO ruling that capital return is a reduction in shareholder cost base and not a taxable dividend (ruling in progre
Slide 16: Business unit review
Business unit review
Slide 17: AMP Financial Services (AFS) — summary
AMP Financial Services (AFS) — summary » Further improvement in all Business Unit KPIs >» Operating margins >» Costs and cost ratio » Cashflows and persistency » Value of New Business (VNB) and Embedded Value (EV) » Return on Business Unit Equity (ROBUE) = Business transformation continues apace >»
Slide 18: AFS — operating margins up 24%
AFS — operating margins up 24% 17 (12) 13 515 AG250m FY 04 Growth in Market Repricing Persistency Mortality 7 Lower Expected Other FY 05 operating business movements morbidity _controflable mature operating margins volumes and costs run-off margins AUM
Slide 19: AFS — volumes and profit margins growing
AFS — volumes and profit margins growing 70 4120 °° 56.3 53.0 54.4 100 50 80 40 60 30 40 20 40 20 $b 0 0% FY 01 FY 02 FY 03 FY 04 Average AUM in period (excl capital) “®" Operating margin after tax - basis points All numbers restated to exclude transitional tax relief. FY 03 and FY 02 numbers are on
Slide 20: AFS — costs falling for five years
AFS — costs falling for five years 700 70 600 60 500 50 400 40 300 30 200 20 100 10 Agm 04 0% FY 014 FY 02 FY 03 FY 04 Controllable costs “= Cost to income ratio AFS cost numbers restated for all previous periods to include AMP Banking and exclude transitional tax relief, FY 03, FY 02 and FY 01 numb
Slide 21: AFS — strong growth in cashflows
AFS — strong growth in cashflows = Cash inflows up 18% to A$11.2b >» AMPFP up 7% to A$5.8b; net cashflows up 22% >» Direct Corporate Super sales up from A$646m in FY 04 to A$2,072m « Cash outflows up 7% to A$8,928m >» improved persistency at 84.2%, up 1 percentage point on FY 04 «= Net cashflows up
Slide 22: AFS — net retail cashflows vs. major competitors
AFS — net retail cashflows vs. major competitors Total retail managed funds (excl CMTs) quarterly net cashflows ($m) of six largest participants by FUM — distributor view AMP Group AXA Australia BT/ Westpac Commonwealth / ING Australia National Australia Group Group Colonial Group Group 7 MLC Group
Slide 23: AFS - ranking first in net retail annual cashflows
AFS - ranking first in net retail annual cashflows since 3Q 04 Awe net AMP rolling 12 month net retail cashflows (excl CMTs), AMP ranking % of industry AgSm and AMP net cashflows as % of industry total ~- distributor view total 3,500 4 r 16% 3 3 3,000 | 2 ; 14% L 9X 2,500 4 Wig, 2 12% r 10% 2,000 +
Slide 24: Australian contemporary — diversified, high growth, high return business
Australian contemporary — diversified, high growth, high return business Contemporary Change 2005 2004 Operating margins A$294m H A$203m + 45% Controllable costs’ A$405m AS427m -5% Cost to income ratio 44.8% 54.8% - 10 percentage points Net cashflows AS$3,626m A$2,624m + 38% Risk annual premium inco
Slide 25: Australian mature — slowly declining, large scale, outstanding return business
Australian mature — slowly declining, large scale, outstanding return business Mature Change 2005 2004 Operating margins AS171m A$172m ~ 0.6% Controllable costs AS66m AS6OM ~ 4% Controllable costs/AUM" 0.36% 0.36% Net cashflows (A$1,279m) (A$1,393m) + B% Persistency” 87.3% 86.7% + 0.6 percentage poi
Slide 26: New Zealand — risk insurance driven, high return business
New Zealand — risk insurance driven, high return business 2005 2004 Operating margins AS5Om A$S40m + 25% Controliable costs ASS7m A$60m ~ 5% Cost to income ratio 41.4% 45.8% - 4.4 percentage points Net cashflows (A$44m) (A$55m) + 20% Risk annual premium income AS84m A$70m +20% Persistency 85.4% H 87
Slide 27: AMP Capital Investors (AMPCI) — summary
AMP Capital Investors (AMPCI) — summary # Operating margins up 26% to A$92m « Cost ratio down 5.5 percentage points on FY 04 to 57.8% « 79% of Australian assets under management (AUM) meeting or exceeding benchmarks in year to 31 December # External net cashflows steady at A$2.2b # AUM up 13% on FY
Slide 28: AMPCI — operating margins up 26%
AMPCI — operating margins up 26% 10 (1) (1) 92 73 A$Sm FY 04 operating Higher internal Higher external Lower Higher operating FY 05 operating margins management fees management fees performance & costs margins transaction fees
Slide 29: AMPCI — volumes and profit margins growing
AMPCI —- volumes and profit margins growing 90 80 70 60 50 40 30 20 ASb 9 84.8 FY 01 FY 02* FY 03*4 FY 044 FY 05 Average AUM in period = Operating margins after tax - basis points * FY 01, FY 02 and FY 03 exciude Listed Property Trusts AUM and profit margins as these businesses were divested in FY 0
Slide 30: AMPCI — investment performance again strong
AMPCI —- investment performance again strong Australian AUM 99% 100% Target 75% Listed assets Private capital Property Future Total Directions Funds HB Dec-05 Dec-04 % indicates assets under management meeting or exceeding benchmarks
Slide 31: AMPCI — Balanced Growth fund ranks highly
AMPCI — Balanced Growth fund ranks highly AMP Capital Balanced Growth Rates of Comparison with the Mercer Pooled Fund Survey - Balanced Funds Universe return (%) Performance after tax and after fees for periods ended December 2005 17 | & wRSG P~paeea»wovT 9 5 1 1 Year (%)} 3 Years (%) 5 Years (%) 10
Slide 32: AMPCI - strong value added to Life No Fund
AMPCI - strong value added to Life No 1 Fund 409 403 362 A$m [ag (37) (389) FY 01 FY 02 FY 03 FY 04 FY 05 Fund size 35.9 23.2 22.7 23.5 22.7 A$b
Slide 33: AMPCI — AUM up 13% to A$91b
AMPCI — AUM up 13% to A$91b Opening AUM A$80.3b' Australian external market flows 1.7 Japan / Asia distribution channel 0.7 Australian contemporary internal flows 1.7 Australian mature internal flows (2.2) AMP group (1.7) NZ external market flows (0.2) NZ internal market flows (0.3) Investment retur
Slide 34: Cobalt/Gordian — operating margins up 45%
Cobalt/Gordian — operating margins up 45% 103 Agm FY 04 FY 02 FY 03 FY 04 FY 05
Slide 35: Cobalt/Gordian — surplus capital continues to build
Cobalt/Gordian — surplus capital continues to build A$ms FY 00 FY 04 FY 02 FY 03 FY 04 FY 05 @ Minimum capital requirement Ei Surplus capital
Slide 36: Value metrics
Value metrics
Slide 37: AFS traditional embedded value (EV) up 28%
AFS traditional embedded value (EV) up 28% Traditional EV@ 3% risk discount margin Return on embedded vaiue 28% 25% A$4,500m FY 04 EV Expected FY G5 new investment& Expense Persistency Product Other FY OS EV Nettransfer FY 05 EV restated* return business bondyields assumptions & claim changes {befor
Slide 38: AFS market consistent EV by line of business
AFS market consistent EV by line of business FY 05 FY 05 FY 04 ASm No agency costs RoEV' RoEV! AFS 6,207 28% 24% Contemporary 4,027 31% 28% Mature 1,561 24% 18% NZ 619 20% 31% ' Return on embedded value (RoEV) is the percentage change before net transfers of capital
Slide 39: AFS traditional value of new business (VNB) up 11%
AFS traditional value of new business (VNB) up 11% Traditional VNB@ 3% risk discount margin Growth rates 11% 19% 2 347 286 A$240m FY 04 VNB Volume & mix Expense Persistency & Product changes FY 05 VNB restated” assumptions claim assumptions * Restated due to a change in expense allocation methodolog
Slide 40: AFS market consistent VNB by line of business
AFS market consistent VNB by line of business FY 05 FY 04 % change No agency costs No agency costs Agm AFS 371 326 14% Contemporary 296 258 15% Mature 34 35 (3%) NZ 4 33 24%
Slide 41: Value sensitivities
Value sensitivities
Slide 42: Sensitivity of value metrics to key assumptions
Sensitivity of value metrics to key assumptions Value metrics are an important tool to assist investors in analysing company performance but it is important to understand that: * EV and VNB valuations are the outcomes of actuarial modelling based on a complex set of assumptions » They are not manage
Slide 43: Key embedded value (EV) assumptions
Key embedded value (EV) assumptions EV estimates at various discount margins are based on key assumptions: * Only the value of inforce AUM at Dec 2005 is used to measure EV for AMP’s Retail Super and Corporate Super businesses * For these business categories, no further contributions from any existi
Slide 44: Embedded value as a multiple of operating margins is relatively low for AMP
Embedded value as a multiple of operating margins is relatively low for AMP 20 Muitipie of opening EV to operating margins 17.4 14.6 13.4 AXA NAB / MLC Tower FY 04 FY 05 FY 05 Source: Investor reports of each company
Slide 45: Key value of new business (VNB) assumptions
Key value of new business (VNB) assumptions 2005 VNB estimates at various discount margins are based on key assumptions: * Contributions in 2005 from new and existing members are used to model VNB for AMP’s Retail Super and Corporate Super businesses - VNB in 2005 therefore includes 2005 contributio
Slide 46: EV and VNB sensitivities using alternative assumptions — preliminary analysis
EV and VNB sensitivities using alternative assumptions — preliminary analysis Corporate Super* ~ 2.5% pa over 10 years Key assumptions Dec 05 EV FY 05 VNB ’ : at 3% dm at 3% dm Baseline Existing methodology for EV and VNB A$5,955m AS$317m Baseline plus EV and VNB also inciude future . recurring cont
Slide 47: Strategic overview
Strategic overview
Slide 48: Australia pension market to triple in years
Australia pension market to triple in 10 years Projected pension assets under management 2015 market Net increase 2004 share to 2015 Country 2015 ‘ ehh “ini Australia 527.5 1,908.7 51.0 1,381.1 Japan 761.1 896.6 23.9 135.5 South Korea 31.4 275.0 7.3 243.6 India 49 162.2 4.3 187.3 China 8.2 134.7 3.6
Slide 49: AMP has strong positioning in this market
AMP has strong positioning in this market AMP holds market-leading AUM positions in fastest growing segments of pension market » Superannuation > Retirement incomes AMP has strong competitive advantage in two key distribution channels > Planners >» Employer sponsored master trusts AMP Capital Invest
Slide 50: Robust growth in open book is being achieved
Robust growth in open book is being achieved while maintaining mature book profit streams 500 400 300 200 100 A$Sm 6 Open business operating margins Closed business operating margins (AFS contemporary, NZ and AMP Capital) (AFS mature, Cobalt/Gordian) @ Fyo2 FY 03 ff FY 04 @ Fy os All numbers exclude
Slide 51: Strategic focus centred on core business
Strategic focus centred on core business =» Focus on “running the business better than it’s ever been run before” to drive shareholder value is working >» Capturing scale benefits from volume and market growth > Reducing costs to drive efficiency >» Driving ongoing business transformation from life
Slide 52: Conclusion
Conclusion Encouraging results in all key performance indicators Sound platform for future growth » Good industry, good operating environment, good business model Sharp focus on the basics of our business >» The better we get at running the business, the more opportunities we find to improve Broad b
Slide 53: Appendix
Appendix Value sensitivities
Slide 54: EV and VNB using alternative assumptions — further detail on measurement basis
EV and VNB using alternative assumptions — further detail on measurement basis astamptions EV definition VNB definition Baseline Existing EV for Retail Super and VNB includes all transfer methodology Corporate Super businesses values* and contributions for EV and VNB | includes only inforce AUM, rec
Slide 55: EV and VNB using alternative assumptions — further detail on measurement basis
EV and VNB using alternative assumptions — further detail on measurement basis Key assumptions EV definition VNB definition Scenario B Scenario A plus EV EV also includes new VNB now includes all for Retailand | and VNB also include Corporate Super members transfer values* plus Corporate future new