ANNUAL REPORT 2001 - Prudential plc

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FIVE YEAR REVIEW 2001 2000 1999 1998 1997 Group Summary* £m £m £m £m £m Results for the year Long-term business including investment products: New business of continuing operations: Single 20,741 13,354 11,834 7,189 6,780 Regular 711 569 509 468 487 Premium income: Continuing operations 25,307 17,760 16,133 11,009 9,989 Discontinued operations – – – 456 788 General business premiums written: Discontinued operations 390 333 318 310 306 Operating profit before amortisation of goodwill: Long-term business 718 988 961 842 773 Investment management and products 75 90 70 28 20 US broker dealer and fund management 16 7 (6) – – Banking (88) (155) (150) (77) (22) Shareholders’ investment return and other income* 51 64 84 181 137 Interest payable on core structural borrowings* (118) (131) (122) (97) (71) Corporate expenditure* (63) (56) (52) (56) (41) UK re-engineering costs (41) – (70) – – Continuing operations 550 807 715 821 796 Discontinued operations 72 33 61 47 68 Total operating profit (based on long-term investment returns) before amortisation of goodwill 622 840 776 868 864 Amortisation of goodwill (95) (84) (54) – – Short-term fluctuations in investment returns (480) (48) 28 24 83 Merger break fee, net of related expenses 338 – – – – Profit on business disposals – 239 – 249 18 Reclassification of shareholder reserves of discontinued Australian operation – – – – 204 Profit on ordinary activities before tax (including actual investment returns) 385 947 750 1,141 1,169 Profit after tax and minority interests: Operating profit (including post-tax long-term investment returns)* 460 591 507 620 580 Profit for the year (including post-tax actual investment returns)* 389 657 472 853 811 Shareholders’ funds and borrowings Statutory basis: Employed in business units* 4,161 3,955 3,444 2,353 2,124 Retained centrally* 1,769 1,584 1,720 2,168 1,739 5,930 5,539 5,164 4,521 3,863 Borrowings of holding company and related finance subsidiaries (1,980) (1,568) (1,760) (1,223) (1,002) Total statutory basis capital and reserves 3,950 3,971 3,404 3,298 2,861 Additional achieved profits basis retained profit* 4,200 4,805 4,884 4,165 4,007 Achieved profits basis capital and reserves* 8,150 8,776 8,288 7,463 6,868 Insurance and investment funds under management (£bn) 163 165 170 128 119 Share statistics Earnings per share: Based on operating profit after tax and related minority interests before amortisation of goodwill 23.3p 30.2p 26.0p 31.9p 30.0p Based on profit for the year after tax and minority interests 19.7p 33.5p 24.2p 43.9p 42.0p Dividend per share 25.4p 24.5p 23.0p 21.0p 19.1p Market price at 31 December 796p 1,077p 1,220p 908p 734p Average number of shares 1,978m 1,959m 1,947m 1,942m 1,932m * Comparative results have been restated for the reallocation of Asia Regional Head Office costs from Asia development expenses to Corporate expenditure, the reallocation of interest payable on non-core borrowings to shareholders’ investment return and other income, and for the implementation of FRS 19 on deferred tax. 72 Prudential plc Annual Report 2001
2001 2000 1999 1998 1997 Analysis by Business Area £m £m £m £m £m UK Operations Long-term business including investment products: New business: Single 6,394 5,976 6,995 4,230 3,638 Regular 300 293 359 350 328 Premium income 9,282 9,036 10,279 7,114 5,969 General business premiums written 390 333 318 310 306 Operating profit, before re-engineering costs: Long-term business 435 503 471 404 385 General business 79 33 61 39 38 Investment management and products 75 90 70 28 20 Banking (88) (155) (150) (77) (22) Total operating profit 501 471 452 394 421 Statutory basis capital and reserves* 1,203 1,247 1,229 533 404 Additional achieved profits basis retained profit* 3,162 3,882 3,884 3,386 3,321 Achieved profits basis capital and reserves* 4,365 5,129 5,113 3,919 3,725 Insurance and investment funds under management (£bn) 120 129 142 105 93 US Operations Long-term business: New business: Single 4,612 4,830 4,062 2,835 2,914 Regular 22 25 24 28 37 Premium income 5,008 5,223 4,449 3,237 3,340 Operating profit (including long-term investment returns): Jackson National Life 282 459 457 411 367 US broker dealer and fund management 16 7 (6) – – Total operating profit 298 466 451 411 367 Statutory basis capital and reserves* 2,498 2,333 1,945 1,660 1,422 Additional achieved profits basis retained profit* 319 423 588 506 424 Achieved profits basis capital and reserves* 2,817 2,756 2,533 2,166 1,846 Insurance and investment funds under management (£bn) 34 30 25 21 19 Prudential Asia Long-term business including investment products: New business: Single 9,677 2,534 765 114 226 Regular 369 229 106 79 120 Premium income 10,820 3,335 1,237 532 653 Operating profit before development expenses 44 39 27 23 20 Development expenses* (19) (3) – – – Net operating profit 25 36 27 23 20 Statutory basis capital and reserves 402 315 217 123 46 Additional achieved profits basis retained profit 687 478 376 255 214 Achieved profits basis capital and reserves 1,089 793 593 378 260 Insurance and investment funds under management (£bn) 8.3 5.6 2.7 1.7 1.5 Prudential Europe Long-term business: New business: Single 58 14 12 10 2 Regular 20 22 20 11 2 Premium income 197 166 168 126 27 Operating profit before development expenses 5 8 6 4 1 Development expenses (29) (18) 0 0 0 Net operating profit (24) (10) 6 4 1 Statutory basis capital and reserves 58 60 53 37 29 Additional achieved profits basis retained profit 32 22 15 9 2 Achieved profits basis capital and reserves 90 82 68 46 31 Insurance and investment funds under management (£bn) 0.6 0.6 0.5 0.4 0.3 73 Prudential plc Annual Report 2001
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PRUDENTIAL PLC ANNUAL REPORT 2001
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PRUDENTIAL AT A GLANCE PRUDENTIAL
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GROUP FINANCIAL HIGHLIGHTS 2001 200
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GROUP CHIEF EXECUTIVE’S REVIEW WE
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The fastest growing age group in th
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est growth prospects in the market
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Egg 2001 was another year of outsta
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Over the last five years, JNL has m
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equivalent (APE) basis were £434 m
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69 per cent). The new business marg
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differences and other items. The in
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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 and 56: 5. Supplemental Earnings Informatio
Page 57 and 58: 7. Segmental Information - New Busi
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: INDEPENDENT AUDITORS’ REPORT TO T
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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