Financial highlights

Results summary

  Full year
2015
Full year
2014
International Financial Reporting Standards (IFRS) Basis Results    
Operating profit based on longer term investment returns £ 4,007m £ 3,186m
Earnings per share based on operating profit 125.8p 96.6p
European Embedded Value (EEV) Basis Results Full year
2015
Full year
2014
New business profit £ 2,617m £ 2,115m
Post-tax operating profit based on longer term investment returns £ 4,881m £ 4,096m
Earnings per share based on operating profit 191.2p 160.7p
EEV shareholders' funds per share (including goodwill attributable to shareholders) 1,258p 1,136p
Cash Full year
2015
Full year
2014
Underlying free surplus generated £ 3,050m £ 2,579m
Net cash remitted by business units £ 1,625m £1,482m
Ordinary dividend per share relating to the reporting period 38.78p 36.93p
Special dividend per share 10.00p -

Basis of preparation

The  results are prepared on two bases: International Financial Reporting Standards (IFRS) and European Embedded Value (EEV).  The IFRS basis results from the basis of the Group’s statutory financial statements. The supplementary EEV basis results have been prepared in accordance with the EEV Principles issued by the European Insurance CFO Forum in May 2004 and subsequently supplemented by Additional Guidance on EEV Disclosure issued in October 2005. The Group’s EEV basis results are stated on a post-tax basis and, where appropriate, include the effects of EU-endorsed IFRS.

The directors are responsible for the preparation of the supplementary information in accordance with the EEV Principles. The auditors have reported on the 2015 EEV basis results supplement to the Group’s statutory accounts for 2015. Their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006. Except for the change in presentation of the operating results for UK operations to show separately the contribution from the sold PruHealth and PruProtect businesses and the presentation of Prudential Capital as a separate segment, the 2014 results have been derived from the EEV basis results supplement  to the Group’s statutory accounts for 2014. The supplement included an unqualified audit report from the auditors.

Operating profit based on longer-term investment returns
The Group provides supplementary analysis of profit before tax attributable to shareholders so as to distinguish operating profit based on longer-term investment returns from the other elements of total profit shown.

Operating profit is determined on the basis of including longer-term investment returns.
EEV and IFRS operating profit is stated after excluding the effect of short-term fluctuations in investment returns against long-term assumptions, the gain on sale of PruProtect and PruHealth and the costs arising from the domestication of our Hong Kong business.  Furthermore, for EEV basis results, operating profit based on longer-term investment returns excludes the effect of changes in economic assumptions and the mark to market value movement on core borrowings.  Separately on the IFRS basis, operating profit also excludes amortisation of accounting adjustments arising principally on the acquisition of REALIC completed in 2012 and the cumulative foreign exchange loss on the disposal of the Japan Life business that has been recycled from Other Comprehensive Income on completion of the sale process.

Exchange translation – Actual Exchange Rate (AER) and Constant Exchange Rate (CER)
The comparative results have been prepared using previously reported exchange rates (AER basis) except where otherwise stated. Results on a CER basis are also shown for the analysis of IFRS and EEV operating profit based on longer-term investment returns.