Financial highlights

Results summary

  Full year
2014
Full year
2013
International Financial Reporting Standards (IFRS) Basis Results    
Operating profit based on longer term investment returns £ 3,186m £ 2,954m
Earnings per share based on operating profit 96.6p 90.9p
European Embedded Value (EEV) Basis Results * Full year
2014
Full year
2013
New business profit £ 2,126 £ 2,082
Post-tax operating profit based on longer term investment returns £ 4,096 £ 4,204
Earnings per share based on operating profit 160.7p 165.0p
EEV shareholders' funds per share (including goodwill attributable to shareholders) 1,136p 971p
Cash Full year
2014
Full year
2013
Underlying free surplus generated £ 2,579m £ 2,462m
Net cash remitted by business units £ 1,482m £ 1,341m
Dividend per share relating to the reporting period 36.93p 33.57p

* The 2014 EEV results of the Group are presented on a post-tax basis and, accordingly, the 2013 results are shown on a comparable basis - see Basis of preparation below.

Basis of preparation

The 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. Where appropriate, the EEV basis results include the effects of adoption of International Financial Reporting Standards (IFRS). The EEV results are presented on a post-tax basis and, accordingly, the 2013 results are shown on a comparable basis.

The directors are responsible for the preparation of the supplementary information in accordance with the EEV Principles. The auditors have reported on the 2014 EEV basis results supplement to the Company’s statutory accounts for 2014. 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 EEV results from pre-tax to post-tax, as described in the additional unaudited financial information for the 2013 annual report, the 2013 results have been derived from the EEV basis results supplement to the Company’s statutory accounts for 2013. 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. IFRS operating profit per share is calculated after excluding the effect of short-term fluctuations in investment returns against long-term assumptions and the costs arising from the domestication of our Hong Kong business. Additionally, loss attaching to held for sale Japan Life insurance business has been included in the calculation for 2013 profit per share, and the gain on sale of PruProtect and PruHealth has been included in the 2014 equivalent. 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.

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.