EEV basis results
Operating profit from continuing operations based on longer-term investment returns*
Results analysis by business area
2007 £m | 2006 £m | 2006 £m | |
|---|---|---|---|
| UK operations | |||
| New business | 108 | 138 | 266 |
| Business in force | 354 | 198 | 420 |
| Long-term business | 462 | 336 | 686 |
| M&G | 140 | 100 | 204 |
| Total | 602 | 436 | 890 |
| US operations | |||
| New business | 144 | 134 | 259 |
| Business in force | 200 | 212 | 449 |
| Long-term business | 344 | 346 | 708 |
| Broker-dealer and fund management | 9 | 8 | 18 |
| Curian | (2) | (4) | (8) |
| Total | 351 | 350 | 718 |
| Asian operations | |||
| New business | 282 | 232 | 514 |
| Business in force | 211 | 127 | 315 |
| Long-term business | 493 | 359 | 829 |
| Fund management | 33 | 22 | 50 |
| Development expenses | (6) | (7) | (15) |
| Total | 520 | 374 | 864 |
| Other income and expenditure | |||
| Investment return and other income | 13 | 18 | 8 |
| Interest payable on core structural borrowings | (88) | (89) | (177) |
| Corporate expenditure: | |||
| Group Head Office | (50) | (46) | (83) |
| Asia Regional Head Office | (17) | (19) | (36) |
| Charge for share-based payments for Prudential schemes | (5) | (5) | (10) |
| Total | (147) | (141) | (298) |
| UK restructuring costs | 0 | (12) | (41) |
| Operating profit from continuing operations based on longer-term investment returns | 1,326 | 1,007 | 2,133 |
| Analysed as profits (losses) from: | |||
| New business | 534 | 504 | 1,039 |
| Business in force | 765 | 537 | 1,184 |
| Long-term business | 1,299 | 1,041 | 2,223 |
| Asia development expenses | (6) | (7) | (15) |
| Other operating results | 33 | (15) | (34) |
| UK restructuring costs | 0 | (12) | (41) |
| Total | 1,326 | 1,007 | 2,133 |
* 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 total EEV profit. The directors believe that operating profit, as adjusted for these items, better reflects underlying performance. Profit on ordinary activities and basic earnings per share include these items together with actual investment returns. This basis of presentation has been adopted consistently throughout this Interim Report.
For half year 2007, the EEV basis operating profit from continuing operations based on longer-term investment returns before tax of £1,326 million includes a credit of £92 million that arises from including the benefits, grossed up for notional tax, of altered corporate tax rates for the UK, Singapore and China. Further details are explained in note 7 to the EEV basis supplementary information.
The results for continuing operations shown above exclude those in respect of discontinued banking operations. On 1 May 2007, the Company sold Egg Banking plc. Accordingly, the presentation of the comparative results for half year and full year 2006 has been adjusted from those previously published.
