25 AEGON WORLDWIDE  OUR BUSINESSES  ANNUAL REPORT 2010  Results from fair value items amounted to EUR 221 million  compared with a loss for the previous year of EUR 544  million. Most of the turnaround was attributable to an  improvement in the fair value of guarantees net of  related hedges in the Netherlands.  Impairments totaled EUR 452 million, a significant  improvement in 2010 that reflected better market  conditions. This was the lowest level of impairments in  three years, but is still above AEGON’s long-term  expectations. Impairments were primarily related to  US real estate related securities.  Other charges amounted to EUR 309 million and included  a one-time payment for settlement of a dispute related to  a bank-owned life insurance policy in the United States  and restructuring charges in the United States, the  United Kingdom and Hungary. The charges were partly  offset by a book gain from the sale of AEGON’s funeral  insurance business in the Netherlands. Income tax amounted to EUR 165 million for 2010, while  2009 had included a tax credit of EUR 658 million.  Operating expenses increased 3% in 2010 to  EUR 3.4 billion. The results of expense savings in AEGON’s  main operations in the United States, the Netherlands  and the United Kingdom were more than offset by  restructuring charges, project related costs (e.g.  Solvency II) and investments in growth markets. At  constant currency, excluding restructuring charges,  operating expenses declined 2% in 2010 compared with  the previous year. AEGON’s new life sales in 2010 increased 5% compared  with 2009 to EUR 2.2 billion. Sales across the company  showed improvements during the year. Spain was an  exception, as a consequence of continued weak  economic conditions that affected one of AEGON’s joint  venture partners.  Gross deposits – excluding run-off businesses – increased  18% to EUR 32.6 billion in 2010 as a result of continued  strong growth in variable annuity, retail mutual fund and  pension deposits in the United States, as well as new  mandates for AEGON Asset Management. Evidence of  the strategic shift from spread to fee-based businesses. AEGON’s value of new business declined 28% to  EUR 555 million in 2010, mainly as a result of strategic  decisions. In the United States, the value of new business  was impacted by the decision to de-emphasize the sale of  fixed annuities. In the United Kingdom the main reason  for the decline was repricing of immediate annuities.  AEGON’s revenue-generating investments increased 14%  to EUR 413 billion during the year. The increase was due  to new business growth, stronger financial markets and  the positive effects of currency movements.  AEGON is setting  its sight toward  sustainable growth Source: United Nations World Population Prospects.   18.4%  28.9% Western Europe United States Japan  China India 2010 2050  13.0%  21.6%  22.6%  37.8%  8.2%  23.3%  4.9%  13.7% Rising retirement populations In % of population above 65 Sales and deposits Operating expenses Revenue-generating investments Value of new business SHARPENING OUR FOCUS