Final Results - Part 2

Anglo American PLC 14 March 2001 PART 2 1. Basis of preparation The financial statements have been prepared in accordance with generally accepted accounting principles in the United Kingdom. The accounting policies applied in preparing the financial information are consistent with those adopted and disclosed in the statutory accounts for the year ended 31 December 1999. 2. Segmental information Turnover Operating profit Net operating assets(1) Before Exceptional After exceptional items exceptional items (note 7) items US$ million 2000 1999 2000 2000 2000 1999 2000 1999 By business segment Group subsidiaries Gold 2,082 2,102 353 (29) 324 404 2,667 2,990 Platinum 2,318 1,428 1,314 - 1,314 480 1,327 1,519 Diamonds - - (6) - (6) (7) 101 131 Coal 889 731 170 - 170 121 1,580 708 Base metals 1,015 740 45 (4) 41 49 2,102 1,606 Industrial 2,310 988 138 - 138 116 3,196 1,184 minerals Ferrous 796 839 55 - 55 40 390 470 metals Forest 2,529 1,307 327 - 327 149 3,054 1,348 products Industries 2,885 3,443 225 - 225 222 1,317 2,137 Financial - - 4 - 4 19 - - services Exploration - - (116) - (116) (138) - - Corporate - - (141) - (141) (150) 406 441 activities 14,824 11,578 2,368 (33) 2,335 1,305 16,140 12,534 Joint ventures Gold 129 108 53 - 53 44 Coal 20 43 2 - 2 5 Base metals 398 307 112 (123) (11) 95 Industrial 65 20 11 - 11 2 minerals Ferrous 205 149 8 - 8 (12) metals Forest 773 1,093 96 - 96 111 products 1,590 1,720 282 (123) 159 245 Associates Gold - 25 4 - 4 4 Platinum 50 - 22 - 22 - Diamonds 2,034 1,809 497 - 497 252 Coal 58 13 (3) - (3) (12) Base metals 90 116 39 (110) (71) 30 Industrial 19 - 1 - 1 - minerals Ferrous 509 469 64 - 64 47 metals Forest 86 64 35 - 35 12 products Industries 1,310 3,451 47 - 47 136 Financial - - 124 - 124 119 services Corporate - - - - - 4 activities 4,156 5,947 830 (110) 720 592 20,570 19,245 3,480 (266) 3,214 2,142 (1) Net operating assets consist of tangible and intangible assets (excluding investments in joint ventures and associates), stocks and debtors less non-interest bearing current liabilities. 2. Segmental information (continued) Turnover Operating profit Net operating assets(1) Before Exceptional After exceptional items exceptional items (note 7) items US$ million 2000 1999 2000 2000 2000 1999 2000 1999 By geographical segment (by origin) Group subsidiaries South Africa 8,512 8,258 2,127 (26) 2,101 1,173 6,062 8,039 Rest of 390 259 (41) - (41) (30) 433 150 Africa Europe 3,953 1,442 194 - 194 50 5,989 1,864 North 695 708 (28) - (28) 7 727 502 America South 693 614 105 (4) 101 114 1,392 1,431 America Australia 581 297 11 (3) 8 (9)1,537 548 and Asia Joint ventures South Africa 242 192 19 - 19 (7) Rest of 86 64 41 - 41 35 Africa Europe 851 1,113 80 (81) (1) 113 South 408 351 141 (42) 99 104 America Australia 3 - 1 - 1 - and Asia Associates South Africa 1,169 3,108 300 - 300 388 Rest of 1,253 1,075 315 - 315 163 Africa Europe 141 123 36 (19) 17 13 North 425 797 28 - 28 9 America South 152 88 36 (9) 27 2 America Australia 1,016 756 115 (82) 33 17 and Asia 20,570 19,245 3,480 (266) 3,214 2,142 16,140 12,534 By geographical segment (by destination) Group subsidiaries South Africa 3,619 5,522 Rest of 375 462 Africa Europe 6,665 2,632 North 1,648 1,441 America South 411 497 America Australia 2,106 1,024 and Asia Joint ventures South Africa 83 87 Rest of 25 86 Africa Europe 1,109 1,176 North 169 111 America South 35 75 America Australia 169 185 and Asia Associates South Africa 569 1,906 Rest of 37 52 Africa Europe 683 562 North 1,702 1,871 America South 119 51 America Australia 1,046 1,505 and Asia 20,570 19,245 1. Net operating assets consist of tangible and intangible assets (excluding investments in joint ventures and associates), stocks and debtors less non-interest bearing current liabilities. 3. 4. Profit for the financial year The table below analyses the contribution of each division to the Group's headline profit. Profit Net Equity Profit before for the interest investment minority financial year US$ million 2000 income Tax interests 2000 By business segment Gold 437 (15) (69) (152) 201 Platinum 1,353 38 (394) (497) 500 Diamonds 497 30 (200) (6) 321 Coal 175 27 (64) - 138 Base metals 193 (45) (25) 9 132 Industrial minerals 194 (5) (16) (14) 159 Ferrous metals 127 (15) (19) (7) 86 Forest products 477 (46) (78) (45) 308 Industries 279 (15) (36) (129) 99 Financial services 128 9 (30) (7) 100 De Beers investments(1) - 428 (120) (105) 203 Exploration (see note 4) (116) - - 24 (92) Corporate activities (118) (83) 46 - (155) Headline profit for the financial 3,626 308 (1,005) (929) 2,000 year (see note 6) Headline profit adjustment (see (89) - - 46 (43) note 6) Profit for the financial year 3,537 308 (1,005) (883) 1,957 Profit Net Equity Profit before for the interest investment minority financial year 1999 income Tax interests 1999 By business segment Gold 469 38 (90) (207) 210 Platinum 495 20 (97) (218) 200 Diamonds 252 - (77) (13) 162 Coal 122 3 (46) - 79 Base metals 175 (64) (6) (8) 97 Industrial minerals 131 7 (15) (7) 116 Ferrous metals 80 (14) 3 (2) 67 Forest products 275 (47) (21) (8) 199 Industries 367 (39) (78) (168) 82 Financial services 131 21 (35) (5) 112 De Beers investments(1) - 296 (61) (84) 151 Exploration (see note 4) (138) 2 - 24 (112) Corporate activities (121) 42 24 - (55) Headline profit for the financial 2,238 265 (499) (696) 1,308 year (note 6) Headline profit adjustment (note 6) 314 - 18 (88) 244 Profit for the financial year 2,552 265 (481) (784) 1,552 (1) Represents De Beers' share of Anglo American plc earnings for the 12 months to 31 December. 4. Exploration expenditure US$ million 2000 1999 Business segment Gold 43 48 Platinum 9 3 Base metals 60 85 Other 4 2 116 138 5. Tax on profit on ordinary activities US$ million 2000 1999 United Kingdom corporation tax at 30% (1999: 30.25%) 1 10 South Africa corporation tax at 30% (1999: 30%) 468 237 Other overseas taxation 165 62 Share of joint ventures' taxation 25 18 Share of associates' taxation 376 186 Deferred taxation (30) (14) Tax on exceptional items - (18) 1,005 481 6. Headline profit Basic Basic earnings earnings Earnings per share Earnings per share US$ million 2000 2000 1999 1999 Profit for the financial year 1,957 5.01 1,552 4.03 Operating exceptional items 266 0.68 - - Non-operating exceptional items (323) (0.83) (410) (1.06) Amortisation of goodwill 146 0.37 96 0.25 Related tax and minority interests (46) (0.11) 70 0.18 Headline profit for the financial year 2,000 5.12 1,308 3.40 Headline profit per share is calculated in accordance with the definition in the Institute of Investment Management and Research ('IIMR') Statement of Investment Practice No. 1, 'The Definition of IIMR Headline Earnings', which the directors believe to be a useful additional measure of the Group's past performance. 7. Exceptional items Operating exceptional items US$ million 2000 1999 Gold Impairment provision in respect of Ergo and other gold assets (29) - Base metals Impairment provision in respect of Lisheen zinc/lead mine in (100) - Ireland Impairment provision in respect of Anaconda nickel project in (82) - Australia Total impairment of the investment in Salobo copper/gold project in (46) - Brazil Other impairment provisions (9) - Total operating exceptional items (266) - Minority interests 12 - (254) - Non-operating exceptional items US$ million 2000 1999 Partial disposal of interest in Li & Fung Limited 211 - Disposal of interest in Johnnies Industrial Corporation Limited 191 - Disposal of LTA Limited 90 - Sale of mineral rights combined with partial disposal of Northam 49 - Platinum Limited Partial disposal of interest in Gold Fields Limited 36 53 Anticipated disposal of Terra Industries Incorporated (167) - AECI Limited share buy back (50) - Prospective disposal of Elandsrand and Deelkraal gold mines (36) - Disposal of AECI's interest in Polifin Limited - 181 Disposal of interest in Driefontein Consolidated Limited - 89 Partial disposal of interest in South African Breweries plc - 84 Disposal of Terra Industries Incorporated's distribution operations - (33) Disposal of other non-core assets 19 36 Share of associates' exceptional items 59 79 Profit on disposal of fixed assets 402 489 Cost of fundamental reorganisations (1) (79) (79) Total non-operating exceptional items 323 410 Taxation - 18 Minority interests 22 (98) 345 330 Total exceptional items (net of tax and minority interest) 91 330 (1) Following the acquisition of Tarmac on 1 March 2000, a fundamental reorganisation of the industrial mineral business was initiated. This included the merger of the Tarmac and existing operations to form five businesses all trading under the Tarmac name. In 1999 AECI was reorganised. 8. Consolidated cash flow statement analysis a. Reconciliation of group operating profit to net cash inflow from operating activities US$ million 2000 1999 Group operating profit - subsidiaries 2,335 1,305 Depreciation and amortisation charges 928 736 (Increase)/decrease in stocks (230) 30 Increase in debtors (534) (215) Increase/(decrease) in creditors 278 (83) Other items 182 77 Net cash inflow from operating activities 2,959 1,850 a. Financing US$ million 2000 1999 Increase/(decrease) in short term borrowings 1,920 (254) Increase/(decrease) in long term borrowings 948 (705) Repayment of debt acquired (966) - Redemption of minorities - (15) Share issue expenses - (71) Exercise of share options 33 9 Sale of Anglo American plc shares by subsidiaries - 633 Financing 1,935 (403) b. Reconciliation of net cash flow to movement in net (debt)/funds US$ million 2000 1999 (Decrease)/increase in cash in the year (209) 328 Cash (inflow)/outflow from debt financing (1,902) 959 Cash outflow/(inflow) from management of liquid resources 358 (912) Change in net debt resulting from cash flows (1,753) 375 Loans and current asset investments acquired with subsidiaries (2,278) (149) Loans and current asset investments disposed with subsidiaries 241 - Currency translation differences 119 54 Movement in net (debt)/funds (3,671) 280 Net funds/(debt) at start of year 81 (199) Net (debt)/funds at end of year (3,590) 81 9. 10. Movement in net debt/funds Acquisitions Disposals excluding excluding cash and cash and Exchange US$ million 1999 Cash over- over- adjustments 2000 drafts drafts flow Cash at bank and in 1,252 (209) - - (80) 963 hand(1) Debt due after one (2,570) 18 (1,678) 243 390 (3,597) year Debt due within one (916)(1,920) (622) 134 24 (3,300) year (3,486)(1,902) (2,300) 377 414 (6,897) Current asset 2,315 358 22 (136) (215) 2,344 investments Total 81 (1,753) (2,278) 241 119 (3,590) (1) Net of bank overdrafts. 11. Status of financial information The financial information set out herein does not constitute the Company's statutory accounts for the year ended 31 December 2000, but is derived from those accounts which were approved by the board of directors on 13 March 2001. Statutory accounts for the year ended 31 December 1999 have been delivered to the Registrar of Companies, and those for 2000 will be delivered following the Company's annual general meeting convened for 15 May 2001. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. Production statistics 2000 1999 AngloGold (gold in troy ounces) South Africa 5,418,000 5,745,000 North and South America 935,000 911,000 Australia and Asia 524,000 - Rest of the world 366,000 262,000 7,243,000 6,918,000 Anglo Platinum (troy ounces) Platinum 1,915,300 2,022,700 Palladium 967,000 1,017,200 Rhodium 168,700 171,700 Nickel (tonnes) 19,200 19,600 Anglo Coal (tonnes) South Africa: Eskom 36,100,000 41,700,000 Trade 19,100,000 19,600,000 Australia 8,200,000 - Colombia 1,400,000 500,000 64,800,000 61,800,000 Anglo Base metals Copper (tonnes) Collahuasi 191,900 191,200 Mantos Blancos 155,300 151,600 Hudson Bay 53,200 50,300 Konkola 125,400 - Other 33,500 31,000 559,300 424,100 Nickel (tonnes) Codemin 6,300 6,500 Tati 3,700 3,700 Other 4,700 - 14,700 10,200 Zinc (tonnes) Hudson Bay 98,900 82,800 Black Mountain 27,100 31,200 Lisheen 32,200 7,200 158,200 121,200 Lead (tonnes) Black Mountain 68,100 73,800 Lisheen 10,700 3,700 78,800 77,500 Namakwa Sands (tonnes) Chloride slag 112,700 85,700 Sulphate slag 27,200 13,900 Pig iron 71,600 60,200 Zircon 106,800 91,900 Rutile 23,200 17,800 The figures above include the entire output of consolidated entities and the Group's share of joint ventures and associates where applicable. Production statistics (continued) 2000 1999 Anglo Industrial minerals (tonnes) Aggregates 67,815,000 26,701,000 Lime products 928,000 926,000 Concrete (m3) 6,329,000 2,612,000 Potash 966,000 825,000 Sodium tripolyphosphate 86,000 82,000 Phosphates 775,000 589,000 Anglo Ferrous metals (tonnes) Chrome ore 1,476,000 1,360,000 Stainless steel 169,000 143,000 Vanadium slag 70,000 58,000 Chrome alloys 428,000 394,000 Manganese ore 1,474,000 1,462,000 Manganese alloys 287,000 255,000 Steel 1,375,000 1,228,000 Ferro-Alloys 213,000 195,000 Niobium 2,700 2,400 Anglo Forest products (tonnes) South Africa Pulp 343,000 346,000 Graphic papers 415,000 404,000 Packaging papers 523,000 436,000 Corrugated board (000 m2) 166,000 89,000 Lumber (m3) 358,000 385,000 Wood chips (m3) 1,103,000 1,018,000 Mining timber 125,000 133,000 Europe Pulp 110,000 137,000 Graphic papers 863,000 555,000 Packaging papers 765,000 347,000 Corrugated board (000 m2) 625,000 611,000 Paper sacks (000 units) 1,489,000 611,000 Brazil Pulp 154,000 149,000 The figures above include the entire output of consolidated entities and the Group's share of joint ventures and associates where applicable. Reconciliation of subsidiaries profits to those included in the consolidated financial statements For the year to 31 December 2000 Note only key reported lines are reconciled Anglogold Limited 2000 R million Net IAS Profit as published 1,116 US$ million Net IAS profit as published 166 Deferred tax 3 Transfer of exploration (net of minority interest) 23 Amortisation of goodwill (6) Reversal of goodwill amortised on the purchase of Minorco gold 6 assets (net of minority interest) Minority interest (82) Reversal of Jerritt Canyon impairment 29 139 Other gold earnings 6 UK GAAP contribution to net profit 145 Add exceptional losses (net of minority interest) Sale of interest in Elandsrand/Deelkraal 19 Impairment of fixed assets 18 Amortisation of goodwill (net of minority interest) 19 UK GAAP contribution to headline profit 201 Anglo American Platinum Corporation Limited 2000 R million Net IAS profit as published 6,918 US$ million Net IAS profit as published 1,000 Secondary tax on companies (58) Deferred tax 89 Amortisation of goodwill (17) Minority interest (507) Other (15) 492 Less exceptional gain (net of minority interest): Sale of mineral rights to Northam (9) Amortisation of goodwill 17 UK GAAP contribution to headline profit 500

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