IFRS disclosures

Prudential plc 2022 results

International Financial Reporting Standards (IFRS) financial results

Consolidated income statement

			Note	2022 $m	2021 $m
Continuing operations:
Gross premiums earned	B1.3	23,344	24,217
Outward reinsurance premiums	B1.3	(1,943)	(1,844)
Earned premiums, net of reinsurance		21,401	22,373
Investment return	B1.3	(30,159)	3,486
Other income	B1.3	539	641
Total revenue, net of reinsurance		(8,219)	26,500
Benefits and claims	C3.2	17,997	(17,738)
Reinsurers’ share of benefits and claims	C3.2	(6,168)	(971)
Movement in unallocated surplus of with-profits funds	C3.2	1,868	(202)
Benefits and claims and movement in unallocated surplus of with-profits funds, net of reinsurance		13,697	(18,911)
Acquisition costs and other expenditure	B2	(3,880)	(4,560)
Finance costs: interest on core structural borrowings of shareholder-financed businesses		(200)	(328)
Gain (loss) attaching to corporate transactions	D1.1	55	(35)
Total charges net of reinsurance		9,672	(23,834)
Share of profit from joint ventures and associates, net of related tax		29	352
Profit before tax (being tax attributable to shareholders’ and policyholders’ returns)note (i)		1,482	3,018
Tax charge attributable to policyholders’ returns		(21)	(342)
Profit before tax attributable to shareholders’ returns		1,461	2,676
Total tax charge attributable to shareholders’ and policyholders’ returns	B3.1	(475)	(804)
Remove tax charge attributable to policyholders’ returns	B3.1	21	342
Tax charge attributable to shareholders’ returns		(454)	(462)
Profit after tax from continuing operations	B1.4	1,007	2,214
Loss after tax from discontinued US operations note (ii)	D1.2	–	(5,027)
Profit (loss) for the year		1,007	(2,813)

Attributable to:
Equity holders of the Company:
	From continuing operations		998	2,192
	From discontinued US operations		–	(4,234)
				998	(2,042)
Non-controlling interests:
	From continuing operations		9	22
	From discontinued US operations		–	(793)
				9	(771)
Profit (loss) for the year		1,007	(2,813)

Earnings per share (in cents)	Note	2022	2021
Based on profit attributable to equity holders of the Company:
	Basic	B4
		Based on profit from continuing operations		36.5¢	83.4¢
		Based on loss from discontinued US operationsnote (ii)		-¢	(161.1)¢
	Total basic earnings per share		36.5¢	(77.7)¢
	Diluted
		Based on profit from continuing operations		36.5¢	83.4¢
		Based on loss from discontinued US operationsnote (ii)		-¢	(161.1)¢
	Total diluted earnings per share		36.5¢	(77.7)¢

Dividends per share (in cents)	Note	2022	2021
Dividends relating to reporting year:	B5
	First interim dividend		5.74¢	5.37¢
	Second interim dividend		13.04¢	11.86¢
Total relating to the reporting year		18.78¢	17.23¢
Dividends paid in reporting year:	B5
	Current year first interim dividend		5.74¢	5.37¢
	Second interim dividend for prior year		11.86¢	10.73¢
Total paid in the reporting year		17.60¢	16.10¢

Notes

(i)  This measure is the formal profit before tax measure under IFRS. It is not the result attributable to shareholders principally because total corporate tax of the Group includes those taxes on the income of consolidated with-profits and unit-linked funds that, through adjustments to benefits, are borne by policyholders. These amounts are required to be included in the tax charge under IAS 12. Consequently, the IFRS profit before tax measure is not representative of pre-tax profit attributable to shareholders as it is determined after deducting the cost of policyholder benefits and movements in the liability for unallocated surplus of with-profits funds after adjusting for tax borne by policyholders.

(ii)  Discontinued operations for 2021 related to the US operations (Jackson) that were demerged from the Group in September 2021.

Consolidated statement of comprehensive income

			Note	2022 $m	2021 $m
Continuing operations:
Profit for the year		1,007	2,214
Other comprehensive (loss) income:
	Exchange movements arising during the year		(541)	(180)
	Valuation movements on retained interest in Jackson classified as available-for-sale securities:
		Unrealised (loss) gain arising during the year		(125)	273
		Deduct net gains included in the income statement on disposal		(62)	(23)
				(187)	250
Total items that may be reclassified subsequently to profit or loss		(728)	70
Total comprehensive income from continuing operations		279	2,284
Total comprehensive loss from discontinued US operations	D1.2	–	(7,068)
Total comprehensive income (loss) for the year		279	(4,784)
Attributable to:
Equity holders of the Company:
	From continuing operations		280	2,277
	From discontinued US operations		–	(6,283)
				280	(4,006)
Non-controlling interests:
	From continuing operations		(1)	7
	From discontinued US operations		–	(785)
			(1)	(778)
Total comprehensive income (loss) for the year		279	(4,784)

Consolidated statement of changes in equity

			Year ended 31 Dec 2022 $m
	Note	Sharecapital	Sharepremium	Retainedearnings	Translationreserve	Available-for-salesecuritiesreserves	Shareholders’equity	Non-controlling interests	Totalequity
Reserves
Profit for the year		–	–	998	–	–	998	9	1,007
Other comprehensive loss		–	–	–	(531)	(187)	(718)	(10)	(728)
Total comprehensive income (loss) for the year		–	–	998	(531)	(187)	280	(1)	279
Transactions with owners of the Company
Dividends	B5	–	–	(474)	–	–	(474)	(8)	(482)
Reserve movements in respect of share-based payments		–	–	24	–	–	24	–	24
Effect of transactions relating to non-controlling interests		–	–	49	–	–	49	–	49
New share capital subscribed	C8	–	(4)	–	–	–	(4)	–	(4)
Movement in own shares in respect of share-based payment plans		–	–	(3)	–	–	(3)	–	(3)
Net increase (decrease) in equity		–	(4)	594	(531)	(187)	(128)	(9)	(137)
Balance at 1 Jan		182	5,010	10,216	1,430	250	17,088	176	17,264
Balance at 31 Dec		182	5,006	10,810	899	63	16,960	167	17,127

			Year ended 31 Dec 2021 $m
	Note	Sharecapital	Sharepremium	Retainedearnings	Translationreserve	Available-for-salesecuritiesreserves	Shareholders’equity	Non-controlling interests	Totalequity
Reserves
Profit for the year		–	–	2,192	–	–	2,192	22	2,214
Other comprehensive (loss) income		–	–	–	(165)	250	85	(15)	70
Total comprehensive income (loss) from continuing operations		–	–	2,192	(165)	250	2,277	7	2,284
Total comprehensive (loss) income from discontinued US operations	D1.2	–	–	(4,234)	463	(2,512)	(6,283)	(785)	(7,068)
Total comprehensive (loss) income for the year		–	–	(2,042)	298	(2,262)	(4,006)	(778)	(4,784)
Transactions with owners of the Company
Demerger dividend in specie of Jackson	B5	–	–	(1,735)	–	–	(1,735)	–	(1,735)
Other dividends	B5	–	–	(421)	–	–	(421)	(9)	(430)
Reserve movements in respect of share-based payments		–	–	46	–	–	46	–	46
Effect of transactions relating to non-controlling interests*		–	–	(32)	–	–	(32)	(278)	(310)
New share capital subscribed	C8	9	2,373	–	–	–	2,382	–	2,382
Movement in own shares in respect of share-based payment plans		–	–	(24)	–	–	(24)	–	(24)
Net increase (decrease) in equity		9	2,373	(4,208)	298	(2,262)	(3,790)	(1,065)	(4,855)
Balance at 1 Jan		173	2,637	14,424	1,132	2,512	20,878	1,241	22,119
Balance at 31 Dec		182	5,010	10,216	1,430	250	17,088	176	17,264

*  The $(278) million in 2021 related to the derecognition of Athene’s non-controlling interest upon the demerger of Jackson.

Consolidated statement of financial position

				Note	31 Dec 2022 $m	31 Dec 2021 $m
Assets
Goodwill	C4.1	890	907
Deferred acquisition costs and other intangible assets	C4.2	7,155	6,858
Property, plant and equipment		419	478
Reinsurers’ share of insurance contract liabilities		2,807	9,753
Deferred tax assets	C7.2	310	266
Current tax recoverable	C7.1	18	20
Accrued investment income		1,135	1,171
Other debtors		1,694	1,779
Investment properties		37	38
Investments in joint ventures and associates accounted for using the equity method		1,915	2,183
Loans	C1	2,536	2,562
Equity securities and holdings in collective investment schemesnote	C1	57,679	61,601
Debt securitiesnote	C1	76,989	99,094
Derivative assets	C2.2	569	481
Deposits		6,275	4,741
Cash and cash equivalents		5,514	7,170
Total assets	C1	165,942	199,102
Equity
Shareholders’ equity		16,960	17,088
Non-controlling interests		167	176
Total equity	C1	17,127	17,264
Liabilities
Insurance contract liabilities	C3.2	121,213	150,755
Investment contract liabilities with discretionary participation features	C3.2	309	346
Investment contract liabilities without discretionary participation features	C3.2	741	814
Unallocated surplus of with-profits funds	C3.2	3,495	5,384
Core structural borrowings of shareholder-financed businesses	C5.1	4,261	6,127
Operational borrowings	C5.2	815	861
Obligations under funding, securities lending and sale and repurchase agreements		582	223
Net asset value attributable to unit holders of consolidated investment funds		4,193	5,664
Deferred tax liabilities	C7.2	2,872	2,862
Current tax liabilities	C7.1	208	185
Accruals, deferred income and other creditors		8,777	7,983
Provisions		348	372
Derivative liabilities	C2.2	1,001	262
Total liabilities	C1	148,815	181,838
Total equity and liabilities	C1	165,942	199,102

Note

Included within equity securities and holdings in collective investment schemes and debt securities as at 31 December 2022 are $1,571 million of lent securities and assets subject to repurchase agreements (31 December 2021: $854 million).

Consolidated statement of cash flows

			Note	2022 $m	2021 $m
Continuing operations:
Cash flows from operating activities
Profit before tax (being tax attributable to shareholders’ and policyholders’ returns)		1,482	3,018
Adjustments to profit before tax for non-cash movements in operating assets and liabilities:
	Investments		22,374	(14,553)
	Other non-investment and non-cash assets		6,429	2,658
	Policyholder liabilities (including unallocated surplus of with-profits funds)	C3.2	(29,208)	9,095
	Other liabilities (including operational borrowings)		15	16
Investment income and interest payments included in profit before tax		(4,037)	(3,738)
Operating cash items:
	Interest receipts		2,689	2,328
	Interest payments		(16)	(11)
	Dividend receipts		1,523	1,480
	Tax paid		(449)	(453)
Other non-cash items		276	438
Net cash flows from operating activitiesnote (i)		1,078	278
Cash flows from investing activities
Purchases of property, plant and equipment		(34)	(36)
Acquisition of business and intangiblesnote (ii)		(298)	(773)
Disposal of Jackson sharesnote (ii)		293	83
Net cash flows from investing activities		(39)	(726)
Cash flows from financing activities
Structural borrowings of shareholder-financed operations:note (iii)	C5.1
	Issuance of debt, net of costs		346	995
	Redemption of debt		(2,075)	(1,250)
	Interest paid		(204)	(314)
Payment of principal portion of lease liabilities		(101)	(118)
Equity capital:
	Issues of ordinary share capital	C8	(4)	2,382
External dividends:
	Dividends paid to equity holders of the Company	B5	(474)	(421)
	Dividends paid to non-controlling interests		(8)	(9)
Net cash flows from financing activities		(2,520)	1,265
Net (decrease) increase in cash and cash equivalents from continuing operations		(1,481)	817
Net decrease in cash and cash equivalents from discontinued US operations	D1.2	–	(1,621)
Cash and cash equivalents at 1 Jan		7,170	8,018
Effect of exchange rate changes on cash and cash equivalents		(175)	(44)
Cash and cash equivalents at 31 Dec		5,514	7,170

Notes

(i)  Included in net cash flows from operating activities are dividends from joint ventures and associates of $112 million (2021: $175 million).

(ii)  Net cash flows from other investing activities include amounts paid for distribution rights and cash flows arising from the sale of subsidiaries, joint ventures and associates and investments that do not form part of the Group’s operating activities.

(iii)  Structural borrowings of shareholder-financed businesses exclude borrowings to support short-term fixed income securities programmes, non-recourse borrowings of investment subsidiaries of shareholder-financed businesses and other borrowings of shareholder-financed businesses. Cash flows in respect of these borrowings are included within cash flows from operating activities. The changes in the carrying value of the structural borrowings of shareholder-financed businesses for the Group are analysed below:

			Cash movements $m		Non-cash movements $m
		Balance at1 Jan$m	Issuanceof debt	Redemptionof debt		Foreignexchangemovement	Demergerof Jackson	Othermovements	Balance at31 Dec$m
	2022	6,127	346	(2,075)		(147)	–	10	4,261
	2021	6,633	995	(1,250)		(13)	(250)	12	6,127