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European Embedded Value (EEV) basis results

Operating profit from continuing operations based on longer-term investment returns*

Results analysis by business area

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  2008 £m 2007 £m 2007 £m 2007 £m
    CER** RER** RER**
  Half year Half year Half year Full year
  • * EEV basis operating profit from continuing operations based on longer-term investment returns excludes short-term fluctuations in investment returns, the mark to market value movements on core borrowings, the shareholders' share of actuarial gains and losses on defined benefit pension schemes, the effect of changes in economic assumptions and changes in the time value of cost of options and guarantees arising from changes in economic factors. The amounts for these items are included in EEV profit attributable to shareholders. The directors believe that operating profit, as adjusted for these items, better reflects underlying performance. Profit before tax and basic earnings per share include these items together with actual investment returns. This basis of presentation has been adopted consistently throughout these statements.

  • ** The comparative results analysis by business area using previously Reported Exchange Rates (RER), after adjusting for the change in accounting policy for pension schemes, are as shown above. Also, to enable consistency with the basis of presentation of the Operating and Financial Review for profit items, additional half-year 2007 comparative results on a Constant Exchange Rates (CER) basis, calculated by applying average exchange rates for the six months to 30 June 2008 are provided above.
Asian operations        
New business 336 291 282 653
Business in force 217 219 211 393
Long-term business 553 510 493 1,046
Asset management 29 34 33 72
Development expenses (3) (6) (6) (15)
Total 579 538 520 1,103
US operations        
New business 137 144 144 285
Business in force 217 200 200 342
Long-term business 354 344 344 627
Broker-dealer and asset management 6 9 9 13
Curian 0 (2) (2) (5)
Total 360 351 351 635
UK operations        
New business 129 108 108 277
Business in force 375 354 354 582
Long-term business 504 462 462 859
M&G 146 140 140 254
Total 650 602 602 1,113
Other income and expenditure        
Investment return and other income 38 13 13 45
Interest payable on core structural borrowings (82) (88) (88) (168)
Corporate expenditure:        
Group Head Office (79) (58) (58) (129)
Asia Regional Head Office (17) (17) (17) (38)
Charge for share-based payments for Prudential schemes (4) (5) (5) (11)
Total (144) (155) (155) (301)
Restructuring costs (15) 0 0 (20)
Operating profit from continuing operations based on longer-term investment returns 1,430 1,336 1,318 2,530
Analysed as profits (losses) from:        
New business 602 543 534 1,215
Business in force 809 773 765 1,317
Long-term business 1,411 1,316 1,299 2,532
Asset management 181 181 180 334
Other results (162) (161) (161) (336)
Total 1,430 1,336 1,318 2,530