Section B: Summary of results
B1: Supplementary analysis of profit from continuing operations before tax attributable to shareholders
This information is provided as supplementary information under the Group’s accounting policies. It is not required by IFRS standards.
| 2006 £m |
2005 £m |
|
|---|---|---|
| UK operations | ||
| UK insurance operations (note ii) | 500 | 400 |
| M&G | 204 | 163 |
| Egg | (145) | 44 |
| Total | 559 | 607 |
| US operations | ||
| Jackson (notes ii and iii) | 398 | 348 |
| Broker-dealer and fund management (including Curian losses of £8m (2005: £10m)) | 10 | 14 |
| Total | 408 | 362 |
| Asian operations | ||
| Long-term business (note ii) | 189 | 195 |
| Fund management (note iv) | 50 | 12 |
| Development expenses | (15) | (20) |
| Total | 224 | 187 |
| Other income and expenditure | ||
| Investment return and other income | 58 | 87 |
| Interest payable on core structural borrowings | (177) | (175) |
| Corporate expenditure: | ||
| Group Head Office | (83) | (70) |
| Asia Regional Head Office | (36) | (30) |
| Charge for share-based payments for Prudential schemes (note viii) | (10) | (11) |
| Total | (248) | (199) |
| UK restructuring costs (note ix) | (50) | – |
| Operating profit from continuing operations based on longer-term investment returns (note i) | 893 | 957 |
| Goodwill impairment charge (note v) | – | (120) |
| Short-term fluctuations in investment returns on shareholder-backed business (note vi) | 162 | 211 |
| Shareholders’ share of actuarial and other gains and losses on defined benefit pension schemes (note vii) | 167 | (50) |
| Profit from continuing operations before tax attributable to shareholders | 1,222 | 998 |
Notes
(i) Operating profit based on longer-term investment returns
Operating profit based on longer-term investment returns is a supplemental measure of results. For the purposes of measuring operating profit, investment returns on
shareholder-financed business are based on expected long-term rates of return. The expected long-term rates of return are intended to reflect historical real rates of return
and, where appropriate, current inflation expectations adjusted for consensus economic and investment forecasts. The significant operations that require adjustment for the
difference between actual and long-term investment returns are Jackson and certain businesses of the Group’s Asian operations. The amounts included in operating results for
long-term capital returns for debt securities comprise two components. These are a risk margin reserve based charge for expected defaults, which is determined by reference
to the credit quality of the portfolio, and amortisation of interest-related gains and losses for operating results based on longer-term results to the date when sold bonds would
otherwise have matured.
(ii) Effect of changes to assumptions, estimates and bases of determining life assurance liabilities
The results of the Group’s long-term business operations are affected by changes of assumptions and bases of preparation. These are described in notes D2(f), D3(f) and D4(f).
In particular, the operating result for UK insurance operations for 2006 has benefited from a credit of £46 million due to altered regulatory requirements, as explained in note
D2(f), whilst the operating result for Asian long-term business in 2005 benefited by a net of £52 million for changes in Singapore and Taiwan as described in note D4(f).
(iii) Jackson – Summary of operating results
(a) IFRS basis operating profits include the following longer-term investment returns (net of related change in amortisation of deferred acquisition costs)
| 2006 £m |
2005 £m |
|
|---|---|---|
| Longer-term returns on debt securities: | ||
| Amortisation of interest-related gains (net of related change in amortisation of deferred acquisition costs) | 38 | 46 |
| Risk margin reserve charge in respect of credit-related losses (net of related change in amortisation of deferred acquisition costs) (note b) | (44) | (45) |
| Total | (6) | 1 |
| Longer-term returns on equity type investments | 45 | 38 |
(b) The risk margin reserve (RMR) charge for 2006 is based on an average annual RMR of 23 basis points (2005: 24 basis points) on a book value of US$43.9bn (2005: US$43.3bn)
(iv) Asian fund management business
Operating profit for the Asian fund management business of £12 million for 2005 was determined after an exceptional cost of £16 million incurred in Taiwan due to bond fund
restructuring required as a result of industry-wide regulatory change.
(v) Goodwill impairment charge
The charge for goodwill impairment of £120 million in 2005 related to the Japan life business. There was no impairment charge for goodwill in 2006. Further details of the Group’s
goodwill are shown in notes H1 and H2.
(vi) Short-term fluctuations in investment returns on shareholder-backed business
The fluctuations arise as follows:
| 2006 £m |
2005 £m |
|
|---|---|---|
| US operations: | ||
| Movements in market value of derivatives (other than equity-based) used for economic hedging purposes | 34 | 122 |
| Actual less longer-term investment returns for other items | 20 | 56 |
| Asian operations | 134 | 32 |
| Other operations | (26) | 1 |
| 162 | 211 |
(vii) Shareholders’ share of actuarial and other gains and losses on defined benefit pension schemes
| 2006 £m |
2005 £m |
|
|---|---|---|
| Actuarial gains and losses | ||
| Actual less expected return on scheme assets | 156 | 544 |
| Experience gains on liabilities | 18 | 1 |
| Gains (losses) on changes of assumptions for scheme liabilities | 311 | (489) |
| 485 | 56 | |
| Less: amount attributable to the PAC with-profits sub-fund | (318) | (58) |
| 167 | (2) | |
| Non-recurrent credit (charge) | ||
| Shareholders' share of credit arising from reduction in level of assumed future discretionary increases for Prudential Staff Pension Scheme (PSPS) for pensions in payment to 2.5% | – | 35 |
| Losses on re-estimation of shareholders’ share of deficits arising from the PSPS (a) | – | (63) |
| Strengthening in actuarial provisions for increase in ongoing contributions for future service of active scheme members (b) | – | (20) |
| – | (48) | |
| Total | 167 | (50) |
(a) Up to 31 December 2004, the deficits arising on the PSPS had been assessed as being 80 per cent attributable to the PAC with-profits fund and 20 per cent to shareholder
operations. In 2005, following additional analysis this apportionment was altered so that a ratio of 70/30 was applied to the PSPS deficit at 31 December 2005. For 2006, the
opening deficit of the PSPS scheme has been allocated in the ratios 70/30 between the with-profits fund and shareholder-backed operations. The ratio has continued to be
applied to movements in the financial position that relate to opening assets and liabilities. However, the service charge and contributions for ongoing service are allocated by
reference to the cost allocation for current business.
(b) As a result of the April 2005 scheme valuation and subsequent discussions, the contribution levels for future ongoing service of active members were approximately doubled.
The charge of £20 million in 2005 reflected the actuarial provision for this increase in expenses for certain insurance contracts.
Further details on the Group’s defined benefit pension schemes are shown in note I1.
(viii) Share-based payments
The charge for share-based payments for Prudential schemes is for the SAYE and Group performance-related schemes.
(ix) UK restructuring costs are allocated as follows:
£m |
|
|---|---|
| UK insurance operations | 31 |
| M&G | 2 |
| Egg | 12 |
| Unallocated corporate | 5 |
| 50 |
B2: Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, excluding those held in employee share trusts, which are treated as cancelled.
For diluted earnings per share, the weighted average number of shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The Group’s only class of dilutive potential ordinary shares are those share options granted to employees where the exercise price is less than the average market price of the Company’s ordinary shares during the year.
| 2006 | Before tax (note B1) £m |
Tax (note F5) £m |
Minority interests £m |
Net of tax and minority interests £m |
Basic earnings per share Pence |
Diluted earnings per share Pence |
|---|---|---|---|---|---|---|
| Based on operating profit based on longer-term investment returns | 893 | (257) | 1 | 637 | 26.4p | 26.4p |
| Short-term fluctuations in investment returns on shareholder-backed business | 162 | (40) | (2) | 120 | 5.0p | 5.0p |
| Shareholders' share of actuarial and other gains and losses on defined benefit pension schemes | 167 | (50) | – | 117 | 4.8p | 4.8p |
| Based on profit for the year | 1,222 | (347) | (1) | 874 | 36.2p | 36.2p |
| 2005 | Before tax (note B1) £m |
Tax (note F5) £m |
Minority interests £m |
Net of tax and minority interests £m |
Basic earnings per share Pence |
Diluted earnings per share Pence |
|---|---|---|---|---|---|---|
| Based on operating profit based on longer-term investment returns | 957 | (186) | (10) | 761 | 32.2p | 32.2p |
| Adjustments arising from: | ||||||
| Goodwill impairment charge | (120) | – | – | (120) | (5.1)p | (5.1)p |
| Short-term fluctuations in investment returns on shareholder-backed business | 211 | (70) | (2) | 139 | 5.9p | 5.9p |
| Shareholders' share of actuarial and other gains and losses on defined benefit pension schemes | (50) | 15 | – | (35) | (1.5)p | (1.5)p |
| Based on profit for the year from continuing operations | 998 | (241) | (12) | 745 | 31.5p | 31.5p |
| Adjustment for post-tax results of discontinued operations | 3 | 0 | 0 | 2 | 0.1p | 0.1p |
| Based on profit for the year | 1,001 | (241) | (12) | 748 | 31.6p | 31.6p |
Number of shares
A reconciliation of the weighted average number of ordinary shares used for calculating basic and diluted earnings per share is set out as below:
| 2006 (millions) |
2005 (millions) |
|
|---|---|---|
| Weighted average shares for calculation of basic earnings per share | 2,413 | 2,365 |
| Shares under option at end of year | 10 | 13 |
| Number of shares that would have been issued at fair value on assumed option exercise | (7) | (9) |
| Weighted average shares for calculation of diluted earnings per share | 2,416 | 2,369 |
B3: Dividends
| 2006 £m |
2005 £m |
|
|---|---|---|
| Dividends declared and paid in reporting period | ||
| Parent company: | ||
| Interim dividend (2006: 5.42p, 2005: 5.30p per share) | 131 | 126 |
| Final dividend for prior period (2005: 11.02p, 2004: 10.65p per share) | 267 | 252 |
| Subsidiary company payment to minority interests | 1 | 2 |
| Total | 399 | 380 |
As a result of shares issued in lieu of dividends of £76 million (2005: £52 million), dividends paid in cash, as set out in the consolidated
cash flow statement, were
| 2006 £m |
2005 £m |
|
|---|---|---|
| Parent company dividends relating to reporting period: | ||
| Interim dividend (2006: 5.42p, 2005: 5.30p per share) | 131 | 126 |
| Final dividend (2006: 11.72p, 2005: 11.02p per share) | 287 | 267 |
| Total | 418 | 393 |
A final dividend of 11.72 pence per share was proposed by the directors on 14 March 2007. Subject to shareholders’ approval, the dividend will be paid on 22 May 2007 to shareholders on the register at the close of business on 13 April 2007. The dividend will absorb an estimated £287 million of shareholders’ funds. A scrip dividend alternative will be offered to shareholders.
B4: New business
Insurance products and investment products*
| Insurance products gross premiums |
Investment products gross inflows |
Total | ||||||
|---|---|---|---|---|---|---|---|---|
| 2006 £m |
2005 £m |
2006 £m |
2005 £m |
2006 £m |
2005 £m |
|||
| UK operations | 7,192 | 7,193 | 13,486 | 7,916 | 20,678 | 15,109 | ||
| US operations | 5,981 | 5,023 | – | – | 5,981 | 5,023 | ||
| Asian operations | 1,921 | 1,485 | 20,408 | 18,457 | 22,329 | 19,942 | ||
| Group total | 15,094 | 13,701 | 33,894 | 26,373 | 48,988 | 40,074 | ||
Insurance products and investment products*
| Single | Regular | Annual premium and contribution equivalents | ||||||
|---|---|---|---|---|---|---|---|---|
| 2006 £m |
2005 £m |
2006 £m |
2005 £m |
2006 £m |
2005 £m |
|||
| UK insurance operations | ||||||||
| Direct to customer | ||||||||
| Individual annuities | 816 | 720 | – | – | 82 | 72 | ||
| Individual pensions and life | 60 | 29 | 9 | 11 | 15 | 14 | ||
| Department of Work and Pensions rebate business | 161 | 244 | – | – | 16 | 24 | ||
| Total | 1,037 | 993 | 9 | 11 | 113 | 110 | ||
| Business to business | ||||||||
| Corporate pensions | 536 | 242 | 162 | 146 | 216 | 170 | ||
| Individual annuities | 264 | 212 | – | – | 26 | 21 | ||
| Bulk annuities | 85 | 511 | – | – | 8 | 51 | ||
| Total | 885 | 965 | 162 | 146 | 250 | 242 | ||
| Intermediated distribution | ||||||||
| Life | 961 | 1,112 | 5 | 6 | 101 | 118 | ||
| Individual annuities | 919 | 995 | – | – | 92 | 100 | ||
| Individual and corporate pensions | 130 | 108 | 22 | 25 | 35 | 36 | ||
| Total | 2,010 | 2,215 | 27 | 31 | 228 | 254 | ||
| Partnerships | ||||||||
| Life | 840 | 814 | 3 | 3 | 87 | 84 | ||
| Individual and bulk annuities: | ||||||||
| Bulk annuity reinsurance from the Scottish Amicable Insurance Fund* | 560 | – | – | – | 56 | – | ||
| Individual and other bulk annuities | 1,500 | 1,814 | – | – | 150 | 182 | ||
| Total | 2,900 | 2,628 | 3 | 3 | 293 | 266 | ||
| Europe | ||||||||
| Life | 159 | 201 | – | – | 16 | 20 | ||
| Total UK insurance operations | 6,991 | 7,002 | 201 | 191 | 900 | 892 | ||
| US operations | ||||||||
| Fixed annuities | 688 | 788 | – | – | 69 | 79 | ||
| Fixed index annuities | 554 | 616 | – | – | 55 | 62 | ||
| Variable annuities | 3,819 | 2,605 | – | – | 382 | 261 | ||
| Life | 8 | 11 | 17 | 14 | 18 | 15 | ||
| Guaranteed investment contracts | 458 | 355 | – | – | 46 | 35 | ||
| GIC – Medium Term Notes | 437 | 634 | – | – | 44 | 63 | ||
| Total US operations | 5,964 | 5,009 | 17 | 14 | 614 | 515 | ||
| Asian operations | ||||||||
| China | 27 | 17 | 36 | 23 | 39 | 25 | ||
| Hong Kong | 355 | 289 | 103 | 83 | 139 | 112 | ||
| India (Group’s 26% interest) | 20 | 4 | 105 | 57 | 107 | 57 | ||
| Indonesia | 31 | 42 | 71 | 42 | 74 | 46 | ||
| Japan | 68 | 30 | 7 | 4 | 14 | 7 | ||
| Korea | 103 | 29 | 208 | 132 | 218 | 135 | ||
| Malaysia | 4 | 9 | 72 | 66 | 72 | 67 | ||
| Singapore | 357 | 284 | 72 | 58 | 108 | 86 | ||
| Taiwan | 92 | 124 | 139 | 150 | 148 | 162 | ||
| Other | 15 | 9 | 36 | 33 | 37 | 34 | ||
| Total Asian operations | 1,072 | 837 | 849 | 648 | 956 | 731 | ||
| Group total | 14,027 | 12,848 | 1,067 | 853 | 2,470 | 2,138 | ||
Investment products – funds under management*
| 2006 | 1 Jan 2006 £m |
Gross inflows £m |
Redemptions £m |
Market and other movements £m |
31 Dec 2006 £m |
|---|---|---|---|---|---|
| UK operations | 36,196 | 13,486 | (7,385) | 2,649 | 44,946 |
| Asian operations | 10,132 | 20,408 | (17,876) | (411) | 12,253 |
| Group total | 46,328 | 33,894 | (25,261) | 2,238 | 57,199 |
| 2005 | 1 Jan 2005 £m |
Gross inflows £m |
Redemptions £m |
Market and other movements £m |
31 Dec 2005 £m |
|---|---|---|---|---|---|
| UK operations | 28,705 | 7,916 | (4,054) | 3,629 | 36,196 |
| Asian operations | 8,538 | 18,457 | (17,876) | 267 | 10,132 |
| Group total | 37,243 | 26,373 | (21,184) | 3,896 | 46,328 |
*The format of the tables shown above is consistent with the distinction between insurance and investment products as applied for previous financial reporting periods. With the exception of some US institutional business, products categorised as ‘insurance’ refer to those classified as contracts of long-term insurance business for regulatory reporting purposes, i.e. falling within one of the classes of insurance specified in part II of Schedule 1 to the Regulated Activities Order under FSA regulations.
Annual premium and contribution equivalents are calculated as the aggregate of regular new business amounts and one-tenth of single new business amounts.
The tables shown above are provided as an indicative volume measure of transactions undertaken in the reporting period that have the potential to generate profits for shareholders. The amounts shown are not, and not intended to be, reflective of premium income recorded in the IFRS income statement.
The tables above include a bulk annuity transaction with the Scottish Amicable Insurance Fund (SAIF) with a premium of £560 million. The transaction reflects the arrangement entered into in June 2006 for the reinsurance of non-profit immediate pension annuity liabilities of SAIF to Prudential Retirement Income Limited (PRIL), a shareholder-owned subsidiary of the Group. SAIF is a closed ring-fenced sub-fund of the PAC long-term fund established by a Court approved Scheme of Arrangement in October 1997, which is solely for the benefit of SAIF policyholders. Shareholders have no interest in the profits of this fund, although they are entitled to investment management fees on this business. The inclusion of the transaction between SAIF and PRIL as new business in the tables reflects the transfer from SAIF to Prudential shareholders’ funds of longevity risk, the requirement to set aside supporting capital, and entitlement to surpluses arising on this block of business from the reinsurance arrangement. For Group reporting purposes the amounts recorded by SAIF and PRIL for the premium are eliminated on consolidation.
The details shown above for insurance products include contributions for contracts that are classified under IFRS 4 ‘Insurance Contracts’ as not containing significant insurance risk. These products are described as investment contracts or other financial instruments under IFRS. Contracts included in this category are primarily certain unit-linked and similar contracts written in UK insurance operations and Guaranteed Investment Contracts and similar funding agreements written in US operations.
New business premiums for regular premium products are shown on an annualised basis. Department of Work and Pensions rebate business is classified as single recurrent business. Internal vesting business is classified as new business where the contracts include an open market option.
UK and Asian investment products referred to in the table for funds under management above are unit trust, mutual funds and similar types of retail fund management arrangements. These are unrelated to insurance products that are classified as ‘investment contracts’ under IFRS 4, as described in the preceding paragraph, although similar IFRS recognition and measurement principles apply to the acquisition costs and fees attaching to this type of business. US investment products are no longer included in the table above as they are assets under administration rather than funds under management.
In previous periods new business premiums for intermediated distribution of UK insurance operations have included Department of Work and Pensions (DWP) rebate business
for SAIF. As shareholders have no interest in SAIF, these are now excluded from the table above with comparatives restated accordingly. The amounts of new SAIF DWP rebate
business written were £60 million for 2006, and
B5: Group balance sheet
The Group’s primary reporting segments are long-term business, banking, and broker-dealer and fund management. The Group’s secondary reporting segments are geographical namely the UK, the US, and Asia. Details of disclosures in accordance with the requirements of IAS 14 for segment assets and liabilities are shown below.
Details of the primary reporting segments are as follows:
Long-term business
This segment comprises long-term products that contain both a significant and insignificant element of insurance risk. The products are managed together and not classified in this way other than for accounting purposes. This segment also includes activity of the PAC withprofits funds’ venture investments managed by PPM Capital and other investment subsidiaries held for the purpose of supporting the Group’s long-term business operations.
Banking
This segment consists of products provided by the Group’s online banking subsidiary, Egg. The nature of these products and the managing of the business differ from the risks inherent in the other business segments, and the regulatory environment of the banking industry differs from that of the other business segments. Note I8 includes details of the agreement in January 2007 to sell Egg Banking plc.
Broker-dealer and fund management
The investment management segment is comprised of both internal and third-party asset management services, inclusive of portfolio and mutual fund management, where the Group acts as an advisor, and broker-dealer activities. The nature of the products and the managing of the business differ from the risks inherent in the other business segments, and the regulatory environment of the investment management industry differs from that of the other business segments.
| 2006 | Long-term business £m |
Banking £m |
Broker-dealer and fund management £m |
Unallocated to a segment £m |
Intra-group eliminations £m |
Total £m |
|---|---|---|---|---|---|---|
| Consolidated total assets | 201,937 | 9,498 | 5,564 | 3,672 | (4,151) | 216,520 |
| Consolidated total liabilities | (196,651) | (9,206) | (3,922) | (5,272) | 4,151 | (210,900) |
Segment assets by geographical segment |
||||||
| UK | 165,103 | |||||
| US | 39,695 | |||||
| Asia | 15,873 | |||||
| Intra-group eliminations | (4,151) | |||||
| Total assets per balance sheet | 216,520 | |||||
| 2005 | Long-term business £m |
Banking £m |
Broker-dealer and fund management £m |
Unallocated to a segment £m |
Intra-group eliminations £m |
Total £m |
|---|---|---|---|---|---|---|
| Consolidated total assets | 192,944 | 10,752 | 3,208 | 2,768 | (2,236) | 207,436 |
| Consolidated total liabilities | (187,662) | (10,374) | (1,597) | (4,673) | 2,236 | (202,070) |
Segment assets by geographical segment |
||||||
| UK | 154,900 | |||||
| US | 41,700 | |||||
| Asia | 13,072 | |||||
| Intra-group eliminations | (2,236) | |||||
| Total assets per balance sheet | 207,436 | |||||
To explain more comprehensively the assets, liabilities and capital of the Group’s businesses it is appropriate to provide an analysis of the Group’s balance sheet by a mixture of primary and secondary segments.
This analysis is shown below for the Group balance sheet at 31 December 2006.
| UK insurance operations (note D2) £m |
M&G £m |
Egg (note E) £m |
Total UK operations £m |
US operations (note D3) £m |
Asian operations (note D4) £m |
Unallocated to a segment £m |
Intra-group eliminations £m |
Group total £m |
|
|---|---|---|---|---|---|---|---|---|---|
| Assets | |||||||||
| Intangible assets attributable to | |||||||||
| shareholders: | |||||||||
| Goodwill | – | 1,153 | – | 1,153 | 16 | 172 | – | – | 1,341 |
| Deferred acquisition costs and acquired in-force value of long-term business contracts | 167 | 6 | – | 173 | 1,712 | 612 | – | – | 2,497 |
| Total | 167 | 1,159 | – | 1,326 | 1,728 | 784 | – | – | 3,838 |
| Intangible assets attributable to | |||||||||
| PAC with-profits fund: | |||||||||
| In respect of acquired venture fund investment subsidiaries | 830 | – | – | 830 | – | – | – | – | 830 |
| Deferred acquisition costs | 31 | – | – | 31 | – | – | – | – | 31 |
| 861 | – | – | 861 | – | – | – | – | 861 | |
| Total (notes H1 and H2) | 1,028 | 1,159 | – | 2,187 | 1,728 | 784 | – | – | 4,699 |
| Other non-investment and non-cash assets (notes G1 and H3 to H6) | 4,733 | 278 | 342 | 5,353 | 1,671 | 656 | 2,917 | (4,151) | 6,446 |
| Investments of long-term business, banking and other operations (notes G1,H7 and H8) | 138,537 | 2,904 | 8,247 | 149,688 | 36,164 | 13,749 | 240 | – | 199,841 |
| Held for sale assets (note H9) | 463 | – | – | 463 | – | – | – | – | 463 |
| Cash and cash equivalents (note H10) | 1,979 | 852 | 909 | 3,740 | 132 | 684 | 515 | – | 5,071 |
| Total assets | 146,740 | 5,193 | 9,498 | 161,431 | 39,695 | 15,873 | 3,672 | (4,151) | 216,520 |
| UK insurance operations (note D2) £m |
M&G £m |
Egg (note E) £m |
Total UK operations £m |
US operations (note D3) £m |
Asian operations (note D4) £m |
Unallocated to a segment £m |
Intra-group eliminations £m |
Group total £m |
|
|---|---|---|---|---|---|---|---|---|---|
| Equity and liabilities | |||||||||
| Equity | |||||||||
| Shareholders’ equity (note H11) | 1,263 | 1,383 | 292 | 2,938 | 2,713 | 1,437 | (1,600) | – | 5,488 |
| Minority interests | 79 | 52 | – | 131 | 1 | – | – | – | 132 |
| Total equity | 1,342 | 1,435 | 292 | 3,069 | 2,714 | 1,437 | (1,600) | – | 5,620 |
| Liabilities | |||||||||
| Banking customer accounts (note G1) | – | – | 5,554 | 5,554 | – | – | – | – | 5,554 |
| Policyholder liabilities and unallocated surplus of with-profits funds: | |||||||||
| Insurance contract liabilities (note H12) | 80,323 | – | – | 80,323 | 30,184 | 12,706 | – | – | 123,213 |
| Investment contract liabilities with discretionary participation features (note G1) | 28,665 | – | – | 28,665 | – | 68 | – | – | 28,733 |
| Investment contract liabilities without discretionary participation features (note G1) | 11,453 | – | – | 11,453 | 1,562 | 27 | – | – | 13,042 |
| Unallocated surplus of with-profits funds (reflecting application of ‘realistic' basis provisions for UK regulated with-profits funds (notes D2(d)(ii) and H12) | 13,511 | – | – | 13,511 | – | 88 | – | – | 13,599 |
| Total policyholder liabilities and unallocated surplus of with-profits funds | 133,952 | – | – | 133,952 | 31,746 | 12,889 | – | – | 178,587 |
| Core structural borrowings of shareholder-financed operations (note H13): | |||||||||
| Subordinated debt (other than Egg) | – | – | – | – | – | – | 1,538 | – | 1,538 |
| Other | – | – | – | – | 127 | – | 947 | – | 1,074 |
| – | – | – | – | 127 | – | 2,485 | – | 2,612 | |
| Egg subordinated debt (note H13) | – | – | 451 | 451 | – | – | – | – | 451 |
| Total | – | – | 451 | 451 | 127 | – | 2,485 | – | 3,063 |
| Operational borrowings attributable to shareholder-financed operations (notes G1 and H13) | 11 | 4 | 2,819 | 2,834 | 743 | – | 2,032 | – | 5,609 |
| Borrowings attributable to with-profits funds (notes G1 and H13) | 1,776 | – | – | 1,776 | – | – | – | – | 1,776 |
| Other non-insurance liabilities (notes G1, H4, H9, H14 and H15) | 9,659 | 3,754 | 382 | 13,795 | 4,365 | 1,547 | 755 | (4,151) | 16,311 |
| Total liabilities | 145,398 | 3,758 | 9,206 | 158,362 | 36,981 | 14,436 | 5,272 | (4,151) | 210,900 |
| Total equity and liabilities | 146,740 | 5,193 | 9,498 | 161,431 | 39,695 | 15,873 | 3,672 | (4,151) | 216,520 |
| UK insurance operations (note D2) £m |
M&G £m |
Egg (note E) £m |
Total UK operations £m |
US operations (note D3) £m |
Asian operations (note D4) £m |
Unallocated to a segment £m |
Intra-group eliminations £m |
Group total £m |
|
|---|---|---|---|---|---|---|---|---|---|
| Assets | |||||||||
| Intangible assets attributable to shareholders: | |||||||||
| Goodwill | – | 1,153 | – | 1,153 | 16 | 172 | – | – | 1,341 |
| Deferred acquisition costs and acquired in-force value of long-term contracts | 199 | 6 | – | 205 | 1,634 | 566 | – | – | 2,405 |
| Total | 199 | 1,159 | – | 1,358 | 1,650 | 738 | – | – | 3,746 |
| Intangible assets attributable to PAC with-profits fund: | |||||||||
| In respect of acquired venture fund investment subsidiaries | 679 | – | – | 679 | – | – | – | – | 679 |
| Deferred acquisition costs | 35 | – | – | 35 | – | – | – | – | 35 |
| Total | 714 | – | – | 714 | – | – | – | – | 714 |
| Total (notes H1 and H2) | 913 | 1,159 | – | 2,072 | 1,650 | 738 | – | – | 4,460 |
| Other non-investment and non-cash assets (notes G1 and H3 to H6) | 4,457 | 256 | 280 | 4,993 | 1,888 | 566 | 1,059 | (2,236) | 6,270 |
| Investments of long-term business, banking and other operations (notes G1, H7 and H8) | 131,263 | 1,383 | 9,747 | 142,393 | 37,960 | 11,264 | 775 | – | 192,392 |
| Held for sale assets (note H9) | 728 | – | – | 728 | – | – | – | – | 728 |
| Cash and cash equivalents (note H10) | 1,195 | 26 | 725 | 1,946 | 202 | 504 | 934 | 3,586 | |
| Total equity and liabilities | 138,556 | 2,824 | 10,752 | 152,132 | 41,700 | 13,072 | 2,768 | (2,236) | 207,436 |
| UK insurance operations (note D2) £m |
M&G £m |
Egg (note E) £m |
Total UK operations £m |
US operations (note D3) £m |
Asian operations (note D4) £m |
Unallocated to a segment £m |
Intra-group eliminations £m |
Group total £m |
|
|---|---|---|---|---|---|---|---|---|---|
| Equity and liabilities | |||||||||
| Equity | |||||||||
| Shareholders’ equity (note H11) | 1,141 | 1,398 | 303 | 2,842 | 2,969 | 1,288 | (1,905) | – | 5,194 |
| Minority interests | 95 | – | 75 | 170 | 2 | – | – | – | 172 |
| Total equity | 1,236 | 1,398 | 378 | 3,012 | 2,971 | 1,288 | (1,905) | – | 5,366 |
| Liabilities | |||||||||
| Banking customer accounts (note G1) | – | – | 5,830 | 5,830 | – | – | – | – | 5,830 |
| Policyholder liabilities and unallocated surplus of with-profits funds: | |||||||||
| Insurance contract liabilities (note H12) | 79,231 | – | – | 79,231 | 30,479 | 10,726 | – | – | 120,436 |
| Investment contract liabilities with discretionary participation features (note G1) | 26,443 | – | – | 26,443 | – | 80 | – | – | 26,523 |
| Investment contract liabilities without discretionary participation features (note G1) | 10,502 | – | – | 10,502 | 1,502 | 22 | – | – | 12,026 |
| Unallocated surplus of with-profits funds (reflecting application of ‘realistic' basis provisions for UK regulated with-profits funds (notes D2(d)(ii) and H12) | 11,245 | – | – | 11,245 | – | 85 | – | – | 11,330 |
| Total policyholder liabilities and unallocated surplus of with-profits funds | 127,421 | – | – | 127,421 | 31,981 | 10,913 | – | – | 170,315 |
| Core structural borrowings of shareholder-financed operations (note H13): | |||||||||
| Subordinated debt (other than Egg) | – | – | – | – | – | – | 1,646 | – | 1,646 |
| Other | – | – | – | – | 145 | – | 948 | – | 1,093 |
| – | – | – | – | 145 | – | 2,594 | – | 2,739 | |
| Egg subordinated debt (note H13) | – | – | 451 | 451 | – | – | – | – | 451 |
| Total | – | – | 451 | 451 | 145 | – | 2,594 | – | 3,190 |
| Operational borrowings attributable to shareholder-financed operations (notes G1 and H13) | 17 | 2 | 3,856 | 3,875 | 1,085 | – | 1,472 | – | 6,432 |
| Borrowings attributable to with-profits funds (notes G1 and H13) | 1,898 | – | – | 1,898 | – | – | – | – | 1,898 |
| Other non-insurance liabilities (notes G1, H4, H9, H14 and H15) | 7,984 | 1,424 | 237 | 9,645 | 5,518 | 871 | 607 | (2,236) | 14,405 |
| Total liabilities | 137,320 | 1,426 | 10,374 | 149,120 | 38,729 | 11,784 | 4,673 | (2,236) | 202,070 |
| Total equity and liabilities | 138,556 | 2,824 | 10,752 | 152,132 | 41,700 | 13,072 | 2,768 | (2,236) | 207,436 |