Financial highlights

Results Summary

International Financial Reporting Standards (IFRS) Basis Results Full year
2013
Full year
2012
Operating profit based on longer term investment returnsnote (i) £ 2,954m £ 2,520m
Earnings per share based on operating profit 90.9p 76.9p
European Embedded Value (EEV) Basis Results Full year
2013
Full year
2012
New business profit £ 2,843m £ 2,452m
Operating profit based on longer term investment returnsnote (i) £ 5,580m £ 4,313m
Earnings per share based on operating profit 165.0p 124.9p
EEV shareholders' funds per share (including goodwill attributable to shareholders) 971p 878p
Cash Full year
2013
Full year
2012
Underlying free surplus generatednote (ii) £ 2,462m £ 2,080m
Net cash remitted by business units £ 1,341m £ 1,200m
Dividend per share relating to the reporting period 33.57p 29.19p

Note

(i) For IFRS reporting purposes, the Group adopted new and amended accounting standards in 2013. Accordingly, the IFRS elements and EEV basis shareholders’ interest for the comparative results have been adjusted for the retrospective application of this adoption of IFRS accounting policies, as discussed in note A2 of the IFRS financial statement and note 1 of EEV basis results. In addition, following its reclassification as held for sale during 2013, operating results exclude the results of the Japan Life insurance business. 2012 comparatives have been retrospectively adjusted on a comparable basis.

(ii) Underlying free surplus generated comprises underlying free surplus generated from the Group's long-term business (net of investment in new business) and that generated from asset management operations. In addition, following its reclassification as held for sale during 2013, operating results exclude the results of the Japan Life insurance business. 2012 comparatives have been retrospectively adjusted on a comparable basis.

Basis of preparation

Results bases
The IFRS basis results have been prepared in accordance with the accounting policies discussed in note A of the IFRS financial statements.

Life insurance products are, by their nature, long-term and the profit on this business is generated over a significant number of years. Accounting under IFRS alone does not, in Prudential’s opinion, fully reflect the value of future profit streams. Prudential considers that embedded value reporting provides investors with a measure of the future profit streams of the Group’s in-force long-term businesses and is a valuable supplement to statutory accounts. The EEV basis results have been prepared in accordance with the EEV principles discussed in note 1 of EEV basis supplementary information.

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 per share is calculated using operating profits based on longer-term investment returns, after related tax and non-controlling interests. In 2013 operating profit excludes the results of the Japan Life insurance business, together with effect of it being classified as held for sale and written down to fair value less costs to sell at 30 June 2013. 2012 comparatives have been retrospectively adjusted on a comparable basis.

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.