ANNUAL REPORT 2001 - Prudential plc

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NOTES ON THE FINANCIAL STATEMENTS CONTINUED 5. Supplemental Earnings Information continued The Group’s supplemental measure of its results and reconciliation of operating profit based on long-term investment returns before amortisation of goodwill to profit on ordinary activities, including the related basic earnings per share amounts, are as follows: Before Basic tax Tax Minority earnings (note 8) (note 16) interests Net per share £m £m £m £m Pence 2001 Operating profit based on long-term investment returns before amortisation of goodwill 622 (174) 12 460 23.3p Amortisation of goodwill (95) – – (95) (4.8)p Short-term fluctuations in investment returns:* Jackson National Life (368) 129 – (239) (12.1)p Other (principally UK) (112) 30 13 (69) (3.5)p Merger break fee, net of related expenses 338 (6) – 332 16.8p Profit on ordinary activities 385 (21) 25 389 19.7p 2000 (restated†) Operating profit based on long-term investment returns before amortisation of goodwill 840 (260) 11 591 30.2p Amortisation of goodwill (84) – – (84) (4.3)p Short-term fluctuations in investment returns:* Jackson National Life (52) 18 – (34) (1.7)p Other (principally UK) 4 (15) 13 2 0.0p Profit on business disposals 239 (57) – 182 9.3p Profit on ordinary activities 947 (314) 24 657 33.5p * The adjustment from post-tax long-term investment returns to post-tax actual investment returns includes investment return that is attributable to external equity investors in two investment funds managed by PPM America. These two funds are consolidated as quasi-subsidiaries but have no net impact on pre-tax or post-tax operating profit. Total profit, before and after tax, incorporating the adjustment from long-term investment returns to actual investment returns, includes losses of £13m attributable to these minority interests. † Earnings per share for 2000 have been restated for the implementation of FRS 19 on deferred tax. A reconciliation of the weighted average number of ordinary shares used for calculating basic and diluted earnings per share is set out below: 2001 2000 Millions Millions Weighted average shares for basic earnings per share 1,978 1,959 Shares under option at end of year (note 27) 16 20 Number of shares that would have been issued at fair value on assumed option exercise (12) (11) Weighted average shares for diluted earnings per share 1,982 1,968 6. Segmental Information – Gross Premiums Written and Investment Product Contributions by Product Provider Long-term business Investment products General business Total 2001 2000 2001 2000 2001 2000 2001 2000 £m £m £m £m £m £m £m £m UK Insurance Operations 8,198 7,469 – – 390 333 8,588 7,802 M&G – 239 1,084 1,328 – – 1,084 1,567 Total UK Operations 8,198 7,708 1,084 1,328 390 333 9,672 9,369 Jackson National Life 5,008 5,223 – – – – 5,008 5,223 Prudential Asia 1,793 1,076 9,027 2,259 – – 10,820 3,335 Prudential Europe 197 166 – – – – 197 166 Total 15,196 14,173 10,111 3,587 390 333 25,697 18,093 The geographical analysis of premiums and investment product contributions is based on the territory of the operating unit assuming the risk. A similar analysis by territory of risk would not be materially different. 52 Prudential plc Annual Report 2001
7. Segmental Information – New Business by Product Distributor Single Regular Annual equivalents 2001 2000 2001 2000 2001 2000 £m £m £m £m £m £m UK Operations Prudential Intermediary Business Individual pensions 219 196 68 54 90 74 Corporate pensions 82 94 19 15 27 24 Life 2,297 1,660 27 36 257 202 Annuities 1,172 652 – – 117 65 Department of Social Security rebate business 64 59 – – 6 6 3,834 2,661 114 105 497 371 Investment products 70 101 2 3 9 13 Total 3,904 2,762 116 108 Prudential Financial Services Individual pensions 26 30 26 34 29 37 Corporate pensions 469 751 131 93 178 168 Life 226 534 11 28 34 82 Annuities 663 602 – – 66 60 Department of Social Security rebate business 185 175 – – 19 18 1,569 2,092 168 155 326 365 Investment products 15 43 4 12 6 16 Total 1,584 2,135 172 167 M&G Individual life and pensions – 29 – 2 – 5 Investment products 906 1,050 12 16 103 121 Total 906 1,079 12 18 Total UK Operations 6,394 5,976 300 293 Jackson National Life Fixed annuities 1,899 1,056 – – 190 106 Equity linked indexed annuities 271 409 – – 27 41 Variable annuities 768 1,709 – – 77 171 Guaranteed Investment Contracts 170 365 – – 17 36 GIC – European Medium Term Notes 1,504 1,291 – – 150 129 Life – – 22 25 22 25 Total 4,612 4,830 22 25 483 508 Prudential Asia Insurance products 650 275 369 229 434 256 Investment products 9,027 2,259 – – 903 226 Total 9,677 2,534 369 229 Prudential Europe Insurance products 58 14 20 22 26 23 Group total Insurance products 10,723 9,901 693 538 1,766 1,528 Investment products 10,018 3,453 18 31 1,021 376 Total 20,741 13,354 711 569 Annual equivalents are calculated as the aggregate of regular new business contributions and one tenth of single new business contributions. Single new business insurance premiums include increments under existing group pension schemes and pensions vested into annuity contracts (at the annuity purchase price). Regular new business contributions are determined on an annualised basis. Asia mutual funds under management India Taiwan Other Total £m £m £m £m Funds at 1 January 2001 695 934 20 1,649 Net inflow 352 998 45 1,395 Market movement 24 35 (7) 52 Funds at 31 December 2001 1,071 1,967 58 3,096 53 Prudential plc Annual Report 2001
Page 1 and 2:
PRUDENTIAL PLC ANNUAL REPORT 2001
Page 3 and 4:
PRUDENTIAL AT A GLANCE PRUDENTIAL
Page 5 and 6: GROUP FINANCIAL HIGHLIGHTS 2001 200
Page 7 and 8: GROUP CHIEF EXECUTIVE’S REVIEW WE
Page 9 and 10: The fastest growing age group in th
Page 11 and 12: est growth prospects in the market
Page 13 and 14: Egg 2001 was another year of outsta
Page 15 and 16: Over the last five years, JNL has m
Page 17 and 18: equivalent (APE) basis were £434 m
Page 19 and 20: 69 per cent). The new business marg
Page 21 and 22: differences and other items. The in
Page 23 and 24: However, we have not been discussin
Page 25 and 26: CORPORATE SOCIAL RESPONSIBILITY REV
Page 27 and 28: Executive Directors 1. Jonathan Blo
Page 29 and 30: Nomination Committee Sir Roger Hurn
Page 31 and 32: REMUNERATION REPORT The Remuneratio
Page 33 and 34: Directors’ Long-term Incentive Pl
Page 35 and 36: Directors’ Share Options The Rest
Page 37 and 38: DIRECTORS’ REPORT Principal Activ
Page 39 and 40: SUMMARY OF STATUTORY BASIS RESULTS
Page 41 and 42: Restated † 2001 2000 Long-term Bu
Page 43 and 44: CONSOLIDATED STATEMENT OF TOTAL REC
Page 45 and 46: Restated † 2001 2000 Liabilities
Page 47 and 48: CONSOLIDATED CASH FLOW STATEMENT YE
Page 49 and 50: 3. Significant Accounting Policies
Page 51 and 52: Reinsurance In the normal course of
Page 53 and 54: Linked business funds Certain long-
Page 55: 5. Supplemental Earnings Informatio
Page 59 and 60: 9. Segmental Information - Net Asse
Page 61 and 62: 11. Jackson National Life - Additio
Page 63 and 64: 15. Investment Expenses and Charges
Page 65 and 66: 16. Tax continued 2001 2000 £m £m
Page 67 and 68: 21. Fees Payable to Auditors KPMG K
Page 69 and 70: 27. Share Capital and Share Premium
Page 71 and 72: 31. Borrowings continued 2001 2000
Page 73 and 74: 32. Contingencies and Related Oblig
Page 75 and 76: INDEPENDENT AUDITORS’ REPORT TO T
Page 77 and 78: 2001 2000 1999 1998 1997 Analysis b
Page 79 and 80: SUMMARISED CONSOLIDATED PROFIT AND
Page 81 and 82: NOTES ON THE ACHIEVED PROFITS BASIS
Page 83 and 84: 6. Cost of Capital On the achieved
Page 85 and 86: 10. Short-term Fluctuations in Inve
Page 87 and 88: 14. Reconciliation of Movement in S
Page 89 and 90: THE ACHIEVED PROFITS BASIS OF FINAN
Page 91 and 92: HOW TO CONTACT US Prudential plc La
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ANNUAL REPORT 2001 - Prudential plc

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