Financial Highlights

Results Summary

	2008 £m	2007* £m
Asian operations	1,335	1,099
US operations	593	635
UK operations:
UK insurance operations	1,081	859
M&G	286	254
	1,367	1,113
Other income and expenditure	(302)	(297)
Restructuring costs	(32)	(20)
Operating profit from continuing operations based on longer-term investment returns**	2,961	2,530
Short-term fluctuations in investment returns	(5,127)	174
Mark to market value movements on core borrowings	656	223
Shareholders' share of actuarial gains and losses on defined benefit pension schemes	(15)	(5)
Effect of changes in economic assumptions and time value of cost of options and guarantees	(581)	748
(Loss) Profit from continuing operations before tax (including actual investment returns)	(2,106)	3,670
Operating earnings per share from continuing operations after related tax and minority interests**	88.6p	74.5p
Basic earnings per share	(54.1)p	121.2p
Shareholders' equity, excluding minority interests	£15.0bn	£14.6bn

Statutory IFRS basis results	2008	2007
(Loss) profit after tax attributable to equity holders of the Company	£(396)m	£947m
Basic earnings per share	(16.0)p	38.7p
Shareholders' equity, excluding minority interests	£5.1bn	£6.1bn
Supplementary IFRS basis information	2008	2007
Operating profit from continuing operations based on longer-term investment returns**	£1,347m	£1,201m
Operating earnings per share from continuing operations after related tax and minority interests**	42.5p	33.3p
	2008	2007
Dividends per share declared and paid in reporting period	18.29p	17.42p
Dividends per share relating to reporting period	18.90p	18.00p
Funds under management	£249bn	£267bn

*The Company has adopted the principles of IFRIC 14 in accounting for pension schemes. The adoption and other minor presentational changes give rise to consequential changes to the comparative results for 2007 (see notes 4, 5 and 10).

**Basis of preparation
Results bases
The EEV basis results have been prepared in accordance with the European Embedded Value Principles issued by the CFO Forum of European Insurance Companies in May 2004 and expanded by the Additional Guidance on EEV disclosures published in October 2005. The basis of preparation of statutory IFRS basis results and supplementary IFRS basis information is consistent with that applied for the 2007 results and financial statements.

Operating profit based on longer-term investment returns
Consistent with previous reporting practice, the Group analyses its EEV basis results and provides supplementary analysis of IFRS profit before tax attributable to shareholders, so as to distinguish operating profit based on longer-term investment returns from other elements of total profit. On both the EEV and IFRS bases, operating earnings per share are calculated using operating profits from continuing operations based on longer-term investment returns, after related tax and minority interests. These profits exclude short-term fluctuations in investment returns and the shareholders' share of actuarial and other gains and losses on defined benefit pension schemes. Under the EEV basis, where additional profit and loss effects arise, operating profit based on longer-term investment returns also excludes the mark to market value movements on core borrowings and 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. After adjusting for related tax and minority interests, the amounts for these items are included in the calculation of basic earnings per share.

Discontinued operations
The results for continuing operations shown above and throughout this preliminary announcement exclude those in respect of discontinued banking operations, which were sold on 1 May 2007.