Interim Results - Part 2
Anglo American PLC
04 August 2006
PART 2
Notes to financial Information
1. General information
The financial information for the year ended 31 December 2005 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. This information was derived from the statutory accounts for the year
ended 31 December 2005, a copy of which has been delivered to the Registrar of
Companies. The auditor's report on those accounts was unqualified and did not
contain a statement under Section 237 (2) or (3) of the Companies Act 1985.
Investors should consider non-GAAP financial measures in addition to, and not as
a substitute for or as superior to, measures of financial performance reported
in accordance with International Financial Reporting Standards (IFRS). The IFRS
results reflect all items that affect reported performance and therefore it is
important to consider the IFRS measures alongside the non-GAAP measures.
Reconciliations of key non-GAAP data to directly comparable GAAP financial
measures are presented in notes 4, 9 and 13 to this report.
2. Basis of preparation
These June 2006 interim consolidated financial statements ('the interim
financial statements') are for the six months ended 30 June 2006 and have been
prepared in accordance with IFRS including International Accounting Standard
(IAS) 34, Interim Financial Reporting. The interim financial statements have
been prepared under the historical cost convention as modified by the recording
of pension liabilities and revaluation of biological assets and certain
financial instruments.
The accounting policies applied are consistent with those adopted and disclosed
in the Group's annual financial statements for the year ended 31 December 2005,
with the exception of adopting the Amendment to IAS 21 The Effects of Changes in
Foreign Exchange Rates (with effect from 1 January 2006). IAS 21 provides
additional guidance that allows the net investment in a foreign operation to
include loans between sister companies in the Group. This has not had a
material impact on the Group.
3. Segmental information
Based on risks and returns the directors consider that the primary reporting
format is by business segment and the secondary reporting format is by
geographical segment.
The analysis of associates' revenue by business segment is provided here for
completeness and consistency.
On 20 April 2006 the Group completed the sale of 19.7 million ordinary shares
held in AngloGold Ashanti Limited for cash of $978 million. This, together with
the Group's non-participation in the issue of additional ordinary shares by
AngloGold Ashanti, diluted the Group's percentage investment from 50.9% to
41.8%.
As a result of this, the Group is no longer considered to 'control' AngloGold
Ashanti and therefore our investment is now reflected in the Group accounts on
an equity accounted basis. This change in accounting treatment is effective from
the date of sale and therefore the current period includes AngloGold Ashanti's
100% contribution to profit for the period 1 January to 20 April 2006 and a
41.8% share of associate's profit for the period 20 April 2006 until the period
end.
3. Segmental information (continued)
Primary reporting format - by business segment
Segment result before Segment result after
Segment special items and special items and
Revenue(1)(2) remeasurements(4) remeasurements(4)
6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended
US$ million 30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Subsidiaries and joint ventures
Platinum 2,623 1,738 3,646 914 405 835 914 405 835
Gold 857 1,325 2,629 228 171 332 (142) 115 (50)
Coal 1,293 1,191 2,766 227 243 752 103 243 753
Base Metals 2,967 1,629 3,647 1,854 721 1,678 1,838 721 1,667
Industrial Minerals 1,989 2,021 4,043 150 191 366 (128) 175 350
Ferrous Metals and Industries 2,931 3,175 6,030 612 667 1,308 618 666 1,312
Paper and Packaging 3,515 3,431 6,673 205 226 484 133 226 401
Exploration - - - (66) (67) (150) (66) (67) (150)
Corporate Activities - - - (118) (131) (261) (118) (131) (261)
Total subsidiaries and joint 16,175 14,510 29,434 4,006 2,426 5,344 3,152 2,353 4,857
ventures
Revenue and net income from
associates
Platinum 41 29 68 12 3 12 12 3 12
Gold 245 8 15 38 1 - (2) 1 (2)
Diamonds 1,635 1,628 3,316 143 163 386 239 155 257
Coal 297 288 583 91 92 192 91 92 192
Industrial Minerals 6 14 30 1 2 3 1 2 3
Ferrous Metals and Industries 273 519 743 23 83 96 23 150 189
Paper and Packaging 153 149 283 5 4 7 5 4 6
Total associates 2,650 2,635 5,038 313 348 696 369 407 657
Total Group operations 18,825 17,145 34,472 4,319 2,774 6,040 3,521 2,760 5,514
including net income from
associates
Net profit/(loss) on disposals 927 (1) 87
Total profit from operations 4,448 2,759 5,601
and associates
As further additional information, a segmental analysis of associates' operating profit is set out below to show
operating profit for total Group operations including associates.
Operating profit before Operating profit after
special items and special items and
remeasurements(4) remeasurements(4)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
US$ million
Total subsidiaries and joint ventures 4,006 2,426 5,344 3,152 2,353 4,857
Associates
Platinum 20 5 19 20 5 19
Gold 75 1 - 2 1 (2)
Diamonds 293 297 583 276 297 431
Coal 129 131 267 129 131 267
Industrial Minerals 1 2 4 1 2 4
Ferrous Metals and Industries 32 124 148 32 124 149
Paper and Packaging 7 7 11 7 7 11
Total associates 557 567 1,032 467 567 879
Total Group operations including operating profit from 4,563 2,993 6,376 3,619 2,920 5,736
associates
(1) Revenue is measured at the fair value of consideration received or receivable for all significant
products. Where a by-product is not regarded as significant, then revenue may be credited against cost of sales.
The amount credited to Group cost of sales for the 6 months ended 30 June 2006 was $34 million (6 months ended 30
June 2005: $36 million; year ended 31 December 2005: $76 million) and related principally to AngloGold Ashanti, who
credit uranium, silver and acid revenues to cost of sales in accordance with the Gold Industry Standard on
production cost.
(2) Base Metals' turnover is stated net of treatment and refining charges on concentrate sales to external
parties and refining charges on copper anode sales from Chagres to refineries.
(3) Segment result is defined as being segment revenue less segment expense; that is, operating profit. In
addition net income from associates is shown by segment. There are no material inter-segment transfers or
transactions that would affect the segment result.
(4) Special items and remeasurements are set out in note 6.
3. Segmental information (continued)
Primary reporting format - by business segment (continued)
Associates' operating profit is reconciled to 'Net income from associates' as follows:
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
US$ million
Operating profit from associates before special items and remeasurements 557 567 1,032
Operating special items and remeasurements (see note 6) (90) - (153)
Operating profit from associates after special items and remeasurements 467 567 879
Net profit on disposals (see note 6) 108 68 98
Financing remeasurements (see note 6) 20 (9) 7
Net finance costs (before remeasurements) (50) (31) (51)
Income tax expense (after special items and remeasurements) (166) (185) (274)
Underlying minority interest (after special items and remeasurements) (10) (3) (2)
Net income from associates 369 407 657
The segment result and associates' operating profit before special items and
remeasurements, as shown above, is reconciled to 'Profit for the financial
period' as follows:
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
US$ million
Operating profit, including associates, before special items and 4,563 2,993 6,376
remeasurements
Operating special items and remeasurements (see note 6):
Subsidiaries and joint ventures (854) (73) (487)
Gold (370) (56) (382)
Coal (124) - 1
Base Metals (16) - (11)
Industrial Minerals (278) (16) (16)
Ferrous Metals and Industries 6 (1) 4
Paper and Packaging (72) - (83)
Associates (90) - (153)
Gold (73) - (2)
Diamonds (17) - (152)
Ferrous Metals and Industries - - 1
Operating profit, including associates, after special items and 3,619 2,920 5,736
remeasurements
Net profit on disposals
Subsidiaries and joint ventures 927 (1) 87
Associates 108 68 98
Associates' net finance costs (50) (31) (51)
Associates' financing remeasurements 20 (9) 7
Associates' income tax expense (166) (185) (274)
Associates' underlying minority interests (10) (3) (2)
Total profit from operations and associates 4,448 2,759 5,601
Net finance costs before remeasurements (88) (224) (428)
Financing remeasurements 13 122 35
Profit before tax 4,373 2,657 5,208
Income tax expense (1,202) (526) (1,275)
Profit for the financial period 3,171 2,131 3,933
3. Segmental information (continued)
Primary reporting format - by business segment (continued)
Primary segment disclosures for segment assets, liabilities and capital
expenditure are as follows:
Segment assets(1) Segment liabilities(2) Net segment assets Capital expenditure (3)
US$ million 6 months 6 months Year 6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended ended ended ended
30.06. 30.06. 31.12. 30.06. 30.06. 31.12. 30.06. 30.06. 31.12. 30.06. 30.06. 31.12.
06 05 05 06 05 05 06 05 05 06 05 05
Platinum 7,009 6,907 7,550 (494) (336) (532) 6,515 6,571 7,018 286 247 685
Gold - 7,545 7,890 - (752) (908) - 6,793 6,982 196 311 721
Coal 3,052 2,927 3,024 (853) (803) (780) 2,199 2,124 2,244 290 126 331
Base Metals 5,467 5,143 5,358 (614) (467) (573) 4,853 4,676 4,785 109 109 273
Industrial 5,201 5,243 5,041 (813) (988) (1,059) 4,388 4,255 3,982 194 151 312
Minerals
Ferrous 3,163 4,798 5,341 (675) (658) (902) 2,488 4,140 4,439 298 139 376
Metals and
Industries
Paper and 7,717 7,426 7,400 (1,046) (1,067) (1,035) 6,671 6,359 6,365 333 388 703
Packaging
Exploration - - - (2) (5) (3) (2) (5) (3) - - -
Corporate 221 154 251 (294) (229) (310) (73) (75) (59) 9 8 27
Activities
31,830 40,143 41,855 (4,791) (5,305) (6,102) 27,039 34,838 35,753 1,715 1,479 3,428
Unallocated:
Investment in 4,620 3,269 3,165 - - - 4,620 3,269 3,165
associates
Financial 712 856 915 - - - 712 856 915
asset
investments
Deferred tax 280 226 337 (3,472) (5,022) (5,201) (3,192) (4,796) (4,864)
assets/
(liabilities)
Cash and cash 2,638 2,788 3,430 - - - 2,638 2,788 3,430
equivalents
Other 351 793 930 (694) (953) (1,794) (343) (160) (864)
financial
assets/
(liabilities)
- (derivatives)
Other 3,520 1,981 1,258 (3,557) (2,275) (2,420) (37) (294) (1,162)
non-operating
assets/
(liabilities)(4)
Provisions - - - (312) (379) (356) (312) (379) (356)
Borrowings - - - (5,020) (9,873) (8,439) (5,020) (9,873) (8,439)
Net assets 43,951 50,056 51,890 (17,846) (23,807) (24,312) 26,105 26,249 27,578
1) Segment assets at 30 June 2006 are operating assets and
consist primarily of tangible assets ($21,848 million), intangible assets
($2,056 million), biological assets ($314 million), environmental rehabilitation
trusts ($166 million), inventories ($2,836 million), pension and post-retirement
healthcare assets ($57 million) and operating receivables ($4,552 million).
Segment assets at 30 June 2005 consist of tangible assets ($29,604 million),
intangible assets ($2,588 million), biological assets ($331 million),
environmental rehabilitation trusts ($217 million), inventories ($3,180
million), pension and post-retirement healthcare assets ($2 million) and
operating receivables ($4,221 million). Segment assets at 31 December 2005
consist of tangible assets ($30,796 million), intangible assets ($2,572
million), biological assets ($350 million), environmental rehabilitation trusts
($288 million), inventories ($3,569 million), pension and post-retirement health
care assets ($77million) and operating receivables ($4,203 million).
(2) Segment liabilities are operating liabilities and consist
primarily of non-interest bearing current liabilities, restoration and
decommissioning provisions and provisions for post-retirement benefits.
(3) Capital expenditure reflects cash payments, capitalised
interest and accruals in respect of additions to tangible assets of $1,473
million (30 June 2005: $1,441 million; 31 December 2005: $3,373 million) and
intangible assets of $14 million (30 June 2005: $2 million; 31 December 2005: $4
million) and includes additions resulting from acquisitions through business
combinations of $228 million (30 June 2005: $36 million; 31 December 2005: $51
million).
(4) Other non-operating assets/(liabilities) includes $2,498
million assets (30 June 2005: $757 million; 31 December 2005: $nil), $1,184
million liabilities (30 June 2005: $283 million; 31 December 2005: $nil), net
segment assets $1,314 million relating to assets classified as held for sale (30
June 2005: $474 million; 31 December 2005: $nil). For segmental split see note
16.
Other primary segment items included in the income statement are as follows:
US$ million
Depreciation and (Impairments)/reversal (1) Other non-cash expense (2)
amortisation
6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Platinum 237 198 428 - - - 40 53 55
Gold 183 261 538 - (38) (96) 12 22 50
Coal 85 85 188 (122) - - 13 10 14
Base Metals 169 155 312 - - 1 44 32 68
Industrial Minerals 124 124 248 (278) (16) (16) 14 25 36
Ferrous Metals and 137 158 300 9 (1) 8 7 50 56
Industries
Paper and Packaging 218 211 411 (71) - (83) 15 12 17
Exploration - - - - - - 1 1 1
Corporate Activities 10 7 16 - - - 20 19 41
1,163 1,199 2,441 (462) (55) (186) 166 224 338
(1) Includes restructuring charges. See operating special items in
note 6.
(2) Other non-cash expenses include share-based payments and charges
in respect of environmental rehabilitation provisions and other provisions.
3. Segmental information (continued)
Secondary reporting format - by geographical segment
The Group's geographical analysis of revenue, allocated based on the country in
which the customer is located, is as follows. The geographical analysis of the
Group's attributable revenue from associates is provided for completeness and
consistency.
US$ million
Revenue
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Subsidiaries and joint ventures
South Africa 2,930 2,474 5,280
Rest of Africa 363 247 505
Europe 6,943 7,112 13,629
North America 1,296 1,375 2,740
South America 1,190 810 1,723
Australia and Asia 3,453 2,492 5,557
Total subsidiaries and joint ventures 16,175 14,510 29,434
Associates
South Africa 143 406 169
Rest of Africa 454 6 40
Europe 740 680 1,500
North America 498 811 1,768
South America 15 14 29
Australia and Asia 800 718 1,532
Total associates 2,650 2,635 5,038
Total Group operations including associates 18,825 17,145 34,472
The Group's geographical analysis of segment assets, liabilities and capital
expenditure, allocated based on where assets and liabilities are located is:
Segment assets Segment liabilities Net segment assets Capital expenditure
US$ million 6 months 6 months Year 6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
South 13,106 16,459 18,965 (1,792) (2,043) (2,689) 11,314 14,416 16,276 740 821 1,890
Africa
Rest of 734 4,360 4,142 (82) (239) (298) 652 4,121 3,844 58 92 261
Africa
Europe 10,657 10,699 10,048 (1,655) (1,932) (1,926) 9,002 8,767 8,122 425 310 658
North 307 488 500 (114) (46) (59) 193 442 441 109 30 28
America
South 4,871 4,927 5,124 (594) (514) (543) 4,277 4,413 4,581 145 132 317
America
Australia 2,155 3,210 3,076 (554) (531) (587) 1,601 2,679 2,489 238 94 274
and Asia
31,830 40,143 41,855 (4,791) (5,305) (6,102) 27,039 34,838 35,753 1,715 1,479 3,428
3. Segmental information (continued)
Secondary reporting format - by geographical segment (continued)
Additional disclosure of secondary segmental information by origin is as
follows:
US$ million Operating profit Operating profit
Revenue before special items after special items
and remeasurements(1) and remeasurements(1)
6 months 6 months Year 6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Subsidiaries and joint
ventures
South Africa 6,444 5,849 11,981 1,691 1,144 2,651 1,523 1,124 2,482
Rest of Africa 465 553 1,193 94 34 63 (102) 15 (156)
Europe 5,337 5,085 9,748 404 370 694 77 354 600
North America 201 342 531 24 21 27 (14) 14 (11)
South America 2,796 1,742 3,873 1,683 757 1,732 1,650 755 1,704
Australia and 932 939 2,108 110 100 177 18 91 238
Asia
Total subsidiaries and 16,175 14,510 29,434 4,006 2,426 5,344 3,152 2,353 4,857
joint ventures
Associates
South Africa 636 768 1,479 119 139 217 90 139 193
Rest of Africa 1,158 1,065 2,138 220 192 468 190 192 356
Europe 380 359 753 71 60 47 71 60 30
North America 6 - - 3 - - (22) - -
South America 290 263 525 95 107 189 92 107 189
Australia and 180 180 143 49 69 111 46 69 111
Asia
Total associates 2,650 2,635 5,038 557 567 1,032 467 567 879
Total Group operations 18,825 17,145 34,472 4,563 2,993 6,376 3,619 2,920 5,736
including associates
(1) Special items and remeasurements are set out in note 6.
4. Profit for the financial period
The table below analyses the contribution of each business segment to the
Group's operating profit including operating profit from associates for the
financial period and its underlying earnings, which the directors consider to be
a useful additional measure of the Group's performance. A reconciliation from
profit for the financial period to underlying earnings is given in note 9. Group
operating profit including operating profit from associates is reconciled to '
Underlying earnings' and 'Profit for the financial period attributable to equity
shareholders of the Company' in the table below:
6 months ended 30.06.06
Operating
profit before Operating Special Net
special items profit after items Net profit interest,
US$ million and special items and on Financing tax and
remeasurements and remeasurements: disposals Remeasurements minority
(1) remeasurements operating(2) (2) and other(2) interests Total
By business segment
Platinum 934 934 - - - (442) 492
Gold 303 (140) 443 - - (201) 102
Diamonds 293 276 17 - - (129) 164
Coal 356 232 124 - - (96) 260
Base Metals 1,854 1,838 16 - - (577) 1,277
Industrial Minerals 151 (127) 278 - - (39) 112
Ferrous Metals and 644 650 (6) - - (351) 293
Industries
Paper and Packaging 212 140 72 - - (92) 120
Exploration (66) (66) - - - 13 (53)
Corporate (118) (118) - - - (147) (265)
Activities
Total/Underlying 4,563 3,619 944 - - (2,061) 2,502
earnings
Underlying earnings (944) 1,035 33 317 441
adjustments
(note 9)
Profit for the financial year attributable to equity 2,943
shareholders of the Company
6 months ended 30.06.05
Operating
profit before Operating Special Net
special items profit after items Net profit interest,
US$ million and special items and on Financing tax and
remeasurements and remeasurements: disposals Remeasurements minority
(1) remeasurements operating(2) (2) and other(2) interests Total
By business segment
Platinum 410 410 - - - (154) 256
Gold 172 116 56 - - (103) 69
Diamonds 297 297 - - - (109) 188
Coal 374 374 - - - (111) 263
Base Metals 721 721 - - - (196) 525
Industrial Minerals 193 177 16 - - (53) 140
Ferrous Metals and 791 790 1 - - (378) 413
Industries
Paper and Packaging 233 233 - - - (100) 133
Exploration (67) (67) - - - 17 (50)
Corporate (131) (131) - - - (107) (238)
Activities
Total/Underlying 2,993 2,920 73 - - (1,294) 1,699
earnings
Underlying earnings
adjustments
(note 9) (73) 67 113 32 139
Profit for the financial period attributable to equity 1,838
shareholders of the Company
4. Profit for the financial period (continued)
Year ended 31.12.05
Operating
profit before Operating Special Net
special items profit after items Net profit interest,
US$ million and special items and on Financing tax and
remeasurements and remeasurements: disposals Remeasurements minority
(1) remeasurements operating(2) (2) and other(2) interests Total
By business segment
Platinum 854 854 - - - (371) 483
Gold 332 (52) 384 - - (227) 105
Diamonds 583 431 152 - - (153) 430
Coal 1,019 1,020 (1) - - (295) 724
Base Metals 1,678 1,667 11 - - (438) 1,240
Industrial Minerals 370 354 16 - - (103) 267
Ferrous Metals and 1,456 1,461 (5) - - (699) 757
Industries
Paper and Packaging 495 412 83 - - (199) 296
Exploration (150) (150) - - - 35 (115)
Corporate Activities (261) (261) - - - (190) (451)
Total/Underlying 6,376 5,736 640 - - (2,640) 3,736
earnings
Underlying earnings
adjustments
(note 9) (640) 185 42 198 (215)
Profit for the financial year attributable to equity 3,521
shareholders of the Company
(1) Operating profit includes associates' operating profit which is
reconciled to 'Net income from associates' in note 3.
(2) Special items and remeasurements are set out in note 6.
5. Exploration expenditure
US$ million 6 months ended 30.06.06 6 months ended 30.06.05 Year ended 31.12.05
By business segment
Platinum 15 9 21
Gold 16 22 45
Coal 10 4 13
Base Metals 19 20 50
Ferrous Metals and Industries 6 12 21
66 67 150
6. Special items and remeasurements
'Special items' are those items of financial performance that the Group believes
should be separately disclosed on the face of the income statement to assist in
the understanding of the underlying financial performance achieved by the Group
and its businesses. Such items are material by nature or amount to the period's
results and require separate disclosure in accordance with IAS 1.86. Special
items that relate to the operating performance of the business are classified as
special operating items and include impairment charges and reversals and other
exceptional items including significant legal provisions. Non-operating special
items include profits and losses on disposals of investments and businesses.
Remeasurements comprise other items which the Group believes should be reported
separately to aid an understanding of the underlying performance of the Group.
This category includes (i) unrealised gains and losses on 'non-hedge' derivative
instruments open at period end and the reversal of the historical
marked-to-market value of instruments settled in the period, such that the full
realised gain or loss is recorded in underlying earnings in the same period as
the underlying transaction for which such instruments provide an economic, but
not formally designated, hedge and (ii) foreign exchange gains and losses
arising on the retranslation of dollar denominated De Beers' preference shares
held by a Rand functional currency subsidiary of the Group. Remeasurements are
defined as operating, non-operating or financing according to the nature of the
underlying expense.
6. Special items and remeasurements (continued)
6 months 6 months Year
ended ended ended
US$ million 30.06.06 30.06.05 31.12.05
Subsidiaries and joint ventures
Operating special items
Impairment of Tarmac assets and restructuring costs (278) (12) (12)
Impairment and closure costs of Dartbrook (122) - -
Impairment of Packaging assets (72) - -
Impairment of Corrugated assets, goodwill and restructuring costs - - (77)
Impairment of Bibiani - - (38)
Closure of Ergo - (31) (31)
Other 10 (12) (28)
Total operating special items (462) (55) (186)
Taxation 97 17 14
Minority interests 2 12 38
Total attributable to equity shareholders (363) (26) (134)
Operating remeasurements
Unrealised net losses on non-hedge derivatives (392) (18) (301)
Taxation 46 (6) 22
Minority interests 160 12 130
Total attributable to equity shareholders (186) (12) (149)
Financing remeasurements
Fair value (loss)/gain on AngloGold Ashanti convertible bond (43) 32 (32)
Foreign exchange gain on De Beers' preference shares 44 91 72
Unrealised net gains and (losses) on non-hedge derivatives 12 (1) (5)
Total financing remeasurements 13 122 35
Taxation (1) - (2)
Minority interests 21 (16) 16
Total attributable to equity shareholders 33 106 49
Profits and (losses) on disposals
Part disposal of AngloGold Ashanti 737 - -
Gain on deemed disposal of AngloGold Ashanti 159 - -
Part disposal of Western Areas 31 7 14
Gain on sale of mineral rights - Anglo American Brazil 14 - -
Formation of Marikana JV - - 27
Sale of Acerinox - 25 25
Disposal of Wendt - 21 21
Disposal of Boart Longyear - - 21
Disposal of Elandsfontein - - 18
Sale of Columbus - 14 14
Disposal of Hope Downs - (50) (57)
Part disposal of Mondi Packaging South Africa - (18) (12)
Other items (14) - 16
Net profit on disposals 927 (1) 87
Taxation (26) 11 (26)
Minority interests - 2 (3)
Total attributable to equity shareholders 901 12 58
Total special items and remeasurements before tax and minority interests 86 48 (365)
Taxation 116 22 8
Minority interests 183 10 181
Total special items and remeasurements attributable to equity shareholders 385 80 (176)
6. Special items and remeasurements (continued)
6 months 6 months Year
ended ended ended
US$ million 30.06.06 30.06.05 31.12.05
Associates' special items and remeasurements
Share of De Beers' class action payment (20) - (113)
Unrealised net losses on non-hedge derivatives (70) - (16)
Other impairments and restructuring costs - - (24)
Operating special items and remeasurements (90) - (153)
Associates' financing remeasurements
Fair value gain on AngloGold Ashanti convertible bond 12 - -
Unrealised net gains and (losses) on non-hedge derivatives 8 (9) 7
Total financing remeasurements 20 (9) 7
Associates' profits and (losses) on disposals
Gain on partial sale of De Beers Consolidated Mines 105 - -
Disposal of Samancor Chrome - 52 52
Disposal of Wonderkop joint venture interest - - 20
Other items 3 16 26
Net profit on disposals 108 68 98
Total associates' special items and remeasurements 38 59 (48)
Taxation 18 - 7
Minority interests - - 2
Net associates' special items and remeasurements 56 59 (39)
Operating special items and remeasurements
6 months 6 months Year
ended ended ended
US$ million 30.06.06 30.06.05 31.12.05
Operating special items (462) (55) (186)
Operating remeasurements (392) (18) (301)
(854) (73) (487)
Associates' operating special items (20) - (137)
Associates' operating remeasurements (70) - (16)
(90) - (153)
Total operating special items and remeasurements (including associates) (944) (73) (640)
Operating special items including associates (482) (55) (323)
Operating remeasurements including associates (462) (18) (317)
Total operating special items and remeasurements (including associates) (944) (73) (640)
Operating special items excluding associates of $462 million (6 months ended 30
June 2005: $55 million; year ended 31 December 2005: $186 million) relate
principally to impairment, restructuring and closure costs.
Following the conclusion of its strategic review, Industrial Minerals has
identified certain non-core assets which are to be sold and other assets which
are to be restructured and, as such, Tarmac has recorded a combined impairment
and restructuring charge of $278 million.
On 18 May 2006 the Group announced that due to ongoing geological difficulties,
Anglo Coal intends to implement a phased reduction of operations at Dartbrook.
As such an impairment charge and closure costs of $122 million have been
recognised.
Paper and Packaging have recorded an additional impairment of $72 million mainly
of downstream converting Packaging assets as a result of continuing challenging
market conditions.
Unrealised net losses excluding associates of $392 million on non-hedge
derivatives (6 months ended 30 June 2005: $18 million; year ended 31 December
2005: $301 million) have been included in operating remeasurements. These
unrealised losses were recorded principally at AngloGold Ashanti, during the
period it was held as a subsidiary prior to 20 April 2006.
6. Special items and remeasurements (continued)
Associates' operating special items and remeasurements include $20 million for
the Group's share of De Beers' payment in respect of class action suits.
Agreement has been reached, and a preliminary order issued, to settle the
majority of civil class action suits filed against De Beers in the United
States. This settlement does not involve any admission of liability on the part
of De Beers and will, when concluded, bring to an end a number of outstanding
class actions. In 2005, De Beers paid $250 million ($113 million attributable
share) into escrow and an additional $45 million ($20 million attributable
share) has been paid by De Beers into escrow pending conclusion of the
settlement process.
The Group's share of unrealised net losses on non-hedge derivatives of AngloGold
Ashanti incurred during the period of ownership as an associate totalled $73
million, partially offset by gains at De Beers.
Financing remeasurements
AngloGold Ashanti records the option element of its convertible bond at fair
value with changes going through the income statement following the adoption of
IAS 32 and IAS 39. As a result, a charge of $43 million (6 months ended 30 June
2005: gain of $32 million; year ended 31 December 2005: charge of $32 million)
has been included in financing remeasurements, relating to the period it was
held as a subsidiary.
The Group holds US dollar preference shares issued by De Beers which are held by
a Rand functional currency subsidiary of the Group. These shares are classified
as 'non-current investments' and retranslated at each period end. As a result, a
gain of $44 million (6 months ended 30 June 2005: $91 million; year ended 31
December 2005: $72 million) has been included in financing remeasurements.
Associates' financing remeasurements
The Group's share of the associates' financing remeasurements includes a share
of the fair value movement of the option element of the convertible bond of
AngloGold Ashanti which generated a gain of $12 million during the period that
this investment was recorded as an associate, and a share of the unrealised
gains on non-hedge financing derivatives of $8 million in De Beers.
Profits and losses on disposals
On 20 April 2006 the Group completed the sale of 19.7 million ordinary shares
held in AngloGold Ashanti for cash of $978 million. This, together with the
Group's non-participation in the issue of additional ordinary shares by
AngloGold Ashanti, diluted the Group's percentage investment from 50.9% to
41.8%.
As such the Group has recorded a profit on disposal of $737 million in respect
of shares sold and a profit on the deemed disposal of $159 million, arising from
the non-participation in the issue of ordinary shares by AngloGold Ashanti.
Further details are provided in note 15.
Associates' profit and losses on disposal
In April, De Beers announced that agreements had been signed in respect of the
implementation of the De Beers' BEE transaction resulting in the sale of an
indirect 26% equity interest in De Beers Consolidated Mines Limited to Ponahalo
Holdings (Proprietary) Limited. The total agreed proceeds for the transaction
were approximately $585 million. The Group's share of the profit realised on the
transaction was $105 million.
7. Net finance costs
Finance costs and foreign exchange gains/(losses) are presented net of effective
cash flow hedges for respective interest bearing and foreign currency
borrowings. Fair value gains/(losses) on derivatives, presented below, include
the mark-to-market value changes of interest rate and currency derivatives
designated as fair value hedges, net of fair value changes in the associated
hedged risk; and fair value changes of non-hedge derivatives of non-operating
items, including the mark-to-market of the conversion option within the
AngloGold Ashanti convertible bond, relating to the period it was held as a
subsidiary.
Before After Before After Before After
remeasure- remeasure- remeasure- remeasure- remeasure- remeasure-
US$ million ments ments ments ments ments ments
30.06.06 30.06.06 30.06.05 30.06.05 31.12.05 31.12.05
Investment income
Interest and other financial 128 128 115 115 227 227
income
Expected return on defined 137 137 106 106 241 241
benefit arrangements
Foreign exchange gains 32 76 - 96 20 92
Dividend income from financial 5 5 3 3 10 10
asset investments
Fair value gains on derivatives - 20 - - - -
Other fair value gains 5 5 - 32 - -
Total investment income 307 371 224 352 498 570
Interest expense
Amortisation discount relating to (17) (17) (10) (10) (42) (42)
provisions
Bank loans and overdrafts (148) (148) (205) (205) (320) (320)
Other loans (80) (80) (116) (116) (167) (167)
Interest paid on convertible (4) (4) - - (71) (71)
bonds
Unwinding of discount on (13) (13) (23) (23) (53) (53)
convertible bonds
Interest on defined benefit (129) (129) (116) (116) (270) (270)
arrangements
Foreign exchange losses (9) (10) - - (33) (33)
Dividend on redeemable preference (5) (5) - - - -
shares
Fair value losses on derivatives (2) (9) (1) (7) (19) (24)
Other fair value losses (1) (44) - - - (32)
(408) (459) (471) (477) (975) (1,012)
Less: interest capitalised 13 13 23 23 49 49
Total interest expense (395) (446) (448) (454) (926) (963)
Net finance cost (88) (75) (224) (102) (428) (393)
The weighted average interest rate applicable to interest on general borrowings
capitalised was 8.1% (6 months ended 30 June 2005: 8.9%; year ended 31 December
2005: 8.7%).
Financing remeasurements are set out in note 6.
8. Tax on profit on ordinary activities
a) Analysis of charge for the period from continuing operations
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
United Kingdom corporation tax at 30% 28 55 15
South Africa tax 361 224 580
Other overseas tax 773 323 721
Current tax (excluding tax on special items and remeasurements) 1,162 602 1,316
Deferred tax 156 (54) (33)
Total deferred tax (excluding tax on special items and remeasurements) 156 (54) (33)
Total tax on special items and remeasurements (116) (22) (8)
Total tax charge 1,202 526 1,275
8. Tax on profit on ordinary activities (continued)
b) Factors affecting tax charge for the period
The effective tax rate for the period of 27.5% (6 months ended 30 June 2005:
19.8%; year ended 31 December 2005: 24.5%), after adjusting profits for the net
income from associates, is lower than the standard rate of corporation tax in
the United Kingdom (30%). The differences are explained below:
IAS 1 requires income from associates to be presented net of tax on the face of
the income statement. The associates' tax is no longer included within the
Group's total tax charge. Associates' tax included within 'Net income from
associates' for the 6 months ended 30 June 2006 is $166 million (6 months ended
30 June 2005: $185 million; year ended 31 December 2005: $274 million).
The effective rate of taxation including share of associates' tax before special
items and remeasurements for the 6 months ended 30 June 2006 was 33.9%. This was
an increase from the effective rate of 26.8% in the 6 months ended 30 June 2005.
The June 2005 tax rate benefited from the one-off impact of a reduction in the
statutory tax rates in South Africa and Ghana. Without this benefit the
effective tax rate would have been 31.7%. The June 2006 tax rate reflects the
relative impact of the statutory tax rates, on a fully distributed basis where
appropriate, of the countries in which the Group operates. In future periods it
is expected that the effective tax rate, including associates' tax, will remain
above the UK statutory tax rate of 30%.
US$ million 6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Profit on ordinary activities before tax 4,373 2,657 5,208
Tax on profit on ordinary activities calculated at United Kingdom 1,312 797 1,562
corporation tax rate of 30%
Tax effect of net income from associates (111) (122) (197)
Tax effects of:
Expenses not deductible for tax purposes
Operating special items and remeasurements 113 11 110
Exploration costs 10 15 21
Other non-deductible expenses 5 55 92
Non-taxable income
Profits and losses on disposals and remeasurements (255) (47) (9)
Other non-taxable income (73) (67) (113)
Temporary difference adjustments
Changes in tax rates - (136) (187)
Movement in tax losses (49) (9) (30)
Other temporary differences 7 1 (23)
Other adjustments
South African secondary tax on companies 144 49 160
Effect of differences between local and UK rates 74 (15) (108)
Other adjustments 25 (6) (3)
Tax charge for the period 1,202 526 1,275
9. Earnings per share
US$ 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Profit for the financial period attributable to equity shareholders
Basic earnings per share 2.00 1.27 2.43
Diluted earnings per share 1.94 1.23 2.36
Headline earnings for the financial period(1)
Basic earnings per share 1.56 1.24 2.43
Diluted earnings per share 1.51 1.19 2.36
Underlying earnings for the financial period(1)
Basic earnings per share 1.70 1.18 2.58
Diluted earnings per share 1.65 1.13 2.50
(1) Basic and diluted earnings per share are shown based on headline and
underlying earnings, which the directors believe to be useful additional
measures of the Group's performance.
The calculation of the basic and diluted earnings per share is based on the
following data:
US$ million (unless otherwise stated)
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Earnings
Basic earnings, being profit for the financial period attributable to equity 2,943 1,838 3,521
shareholders
Effect of dilutive potential ordinary shares
Interest on convertible bonds (net of tax) 2 15 29
Unwinding of discount on convertible bonds (net of tax) - - 20
Diluted earnings 2,945 1,853 3,570
Number of shares (million)
Basic number of ordinary shares outstanding(1) 1,475 1,442 1,447
Effect of dilutive potential ordinary shares(2)
Share options 19 19 18
Convertible bonds 25 48 48
Diluted number of ordinary shares outstanding(1) 1,519 1,509 1,513
(1) Basic and diluted number of ordinary shares outstanding represent
the weighted average for the period. The average number of ordinary shares in
issue excludes own shares held.
(2) Diluted earnings per share is calculated by adjusting the weighted
average number of ordinary shares in issue on the assumption of conversion of
all potentially dilutive ordinary shares.
'Underlying earnings' is an alternative earnings measure, which the directors
believe provides a clearer picture of the underlying financial performance of
the Group's operations. Underlying earnings is presented after minority
interests and excludes special items and remeasurements (see note 6).
Underlying earnings is distinct from 'headline earnings', which is a
Johannesburg Stock Exchange ('JSE Ltd') defined performance measure.
9. Earnings per share (continued)
The calculation of basic and diluted earnings per share, based on headline and
underlying earnings, uses the following earnings data:
Earnings (US$ million) Basic earnings per share (US$)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Profit for the financial period attributable to 2,943 1,838 3,521 2.00 1.27 2.43
equity shareholders
Special items: operating 462 55 186 0.31 0.04 0.13
Net (profit)/loss on disposals (927) 1 (87) (0.63) - (0.06)
Special items: associates (1) (108) (68) (74) (0.07) (0.04) (0.05)
Related tax (71) (28) 6 (0.05) (0.02) -
Related minority interest (2) (14) (36) - (0.01) (0.02)
Headline earnings for the financial period 2,297 1,784 3,516 1.56 1.24 2.43
Unrealised net losses on non-hedge derivatives 442 28 315 0.30 0.02 0.22
Fair value loss/(gain) on AngloGold Ashanti 31 (32) 32 0.02 (0.02) 0.02
convertible bond
Exchange gain/loss on DBI preference shares (44) (91) (72) (0.03) (0.06) (0.05)
Share of De Beers' legal settlement 20 - 113 0.01 - 0.08
Related tax (63) 6 (21) (0.04) - (0.02)
Related minority interest (181) 4 (147) (0.12) - (0.10)
Underlying earnings for the financial period 2,502 1,699 3,736 1.70 1.18 2.58
(1) Excluding legal settlements.
The following instruments are potentially dilutive but have not been included in
the calculation of diluted earnings per share because they are anti-dilutive for
the periods presented:
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Number of shares (million)
Share options - 8 -
Potentially dilutive shares - 8 -
10. Called-up share capital
As at 30.06.06 As at 30.06.05 As at 31.12.05
Number of US$ million Number of US$ million Number of US$ million
shares shares shares
Authorised
5% cumulative preference
shares of £1 each 50,000 - 50,000 - 50,000 -
Ordinary shares of 50 US 2,000,000,000 1,000 2,000,000,000 1,000 2,000,000,000 1,000
cents each
Called-up, allotted and
fully paid
5% cumulative preference
shares of £1 each 50,000 - 50,000 - 50,000 -
Ordinary shares of 50 US 1,530,894,824 765 1,493,849,673 747 1,493,855,896 747
cents each
In the event of winding up, the holders of the cumulative preference shares will
be entitled to the repayment of a sum equal to the nominal capital paid up, or
credited as paid up, on the cumulative preference shares held by them and any
accrued dividend, whether such dividend has been earned or declared or not,
calculated up to the date of the winding up.
11. Reconciliation of changes in equity
Attributable to equity shareholders of the Company
Total Share- Cumulative Fair value
share Retained based translation and
US$ million capital earnings payment adjustment other Minority Total
(1) (2) reserve reserve reserves interests equity
Balance at 1 January 2005 2,380 17,440 55 2,247 998 4,466 27,586
Total recognised income and expense - 1,798 - (2,147) (97) (123) (569)
Dividends paid - (734) - - - - (734)
Shares issued 1 - - - - - 1
Share-based payments - - 44 - - 3 47
Disposal of businesses - - - - - (3) (3)
Issue of shares to minority - - - - - 3 3
interests
Dividends paid to minority interests - - - - - (165) (165)
Exercise of employee share options - 82 - - - - 82
Purchase of minority interests - - - - - 1 1
Balance at 30 June 2005 2,381 18,586 99 100 901 4,182 26,249
Total recognised income and expense - 1,566 - 239 (65) 205 1,945
Dividends paid - (403) - - - - (403)
Shares issued 3 - - - - - 3
Share-based payments - - 56 - - 3 59
Issue of shares to minority - - - - - 13 13
interests
Dividends paid to minority interests - - - - - (256) (256)
Exercise of employee share options - 158 - - - - 158
Purchase of minority interests - - - - - (190) (190)
Balance at 31 December 2005 2,384 19,907 155 339 836 3,957 27,578
Total recognised income and expense - 2,980 9 (946) (222) (8) 1,813
Dividends paid - (1,406) - - - - (1,406)
Shares issued(3) 828 - - - - - 828
Reclassification on conversion of 27 - - - (27) - -
bond(3)
Share-based payments - - 47 - - - 47
Disposal of businesses - - - - - (1,186) (1,186)
Issue of shares to minority - - - - - 12 12
interests
Treasury share buy back - (1,585) - - - - (1,585)
Purchase of treasury shares for - (13) - - - - (13)
share schemes
Convertible bond reserve transfer to - 87 - - (87) - -
retained earnings
Reclassification of vested awards - 20 (20) - - - -
Current tax on share-based payments - 20 - - - - 20
Dividends paid to minority interests - - - - - (193) (193)
Exercise of employee share options - 192 (2) - - - 190
Balance at 30 June 2006 3,239 20,202 189 (607) 500 2,582 26,105
(1) Total share capital comprises called-up share capital $765 million
(30 June 2005: $747 million; 31 December 2005: $747 million) and the share
premium account $2,474 million (30 June 2005: $1,634 million; 31 December 2005:
$1,637 million).
(2) Retained earnings is stated after deducting $1,894 million of 'own
shares'. Own shares comprise shares of Anglo American plc held in the employee
benefit trust, treasury shares and those held by Epoch Investment Holdings
Limited (Epoch). Epoch is a South African registered entity owned by a
charitable trust whose trustees are independent of the Group. Although the
Group has no voting rights in Epoch and cannot appoint or remove trustees, it
does meet the accounting definition of a subsidiary in accordance with IAS 27
Consolidated and Separate Financial Statements and as a result is consolidated.
Own shares held by the employee benefit trust were $586 million as at 30 June
2005 and $456 million as at 31 December 2005.
(3) During the 6 months ended 30 June 2006, 77.5% of the Anglo American
plc convertible bond was converted to equity by bondholders. This has resulted
in a reduction in the discounted balance sheet liability of $828 million and a
corresponding increase in issued share capital and share premium. A further
reserve transfer of $27 million has been made from the convertible bond reserve
to share premium to reflect the total fair value of shares issued to
bondholders. During the 6 months ended 30 June 2006, the number of shares
converted was 37,038,523, at a conversion price of $23.12 to 3 May 2006, and
$22.76 subsequently.
Fair value and other reserves comprise:
Convertible Available Cash flow Total fair value
debt for sale hedge Other and other
US$ million reserve reserve reserve reserves(1) reserves
Balance at 1 January 2005 128 48 50 772 998
Total recognised income and expense - (41) (56) - (97)
Balance at 30 June 2005 128 7 (6) 772 901
Total recognised income and expense 3 47 (115) - (65)
Balance at 1 January 2006 131 54 (121) 772 836
Total recognised income and expense 9 89 (320) - (222)
Convertible bond reserve transfer to share (27) - - - (27)
premium
Convertible bond reserve transfer to retained (87) - - - (87)
earnings
Balance at 30 June 2006 26 143 (441) 772 500
(1) Other reserves comprise $690 million (30 June 2005: $690 million; 31
December 2005: $690 million) legal reserve and $82 million (30 June 2005: $82
million; 31 December 2005: $82 million) capital redemption reserve.
12. Consolidated cash flow analysis
a) Reconciliation of profit before tax to cash inflows from operations
US$ million
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Profit before tax 4,373 2,657 5,208
Depreciation and amortisation 1,163 1,199 2,441
Share option expense 47 40 92
Special items and remeasurements of subsidiaries and joint (86) (48) 365
ventures
Net finance costs before remeasurements 88 224 428
Fair value gains before special items and remeasurements (120) (61) (278)
Net income from associates (369) (407) (657)
Additional pension contribution (232) - -
Provisions 31 60 113
Increase in inventories (295) (113) (453)
Increase in operating receivables (698) (471) (600)
Increase in operating payables 197 13 539
Other adjustments (39) (19) 67
Cash inflows from operations 4,060 3,074 7,265
b) Reconciliation to the balance sheet
Cash and cash equivalents Short term borrowings(1) Medium and long term
borrowings
US$ million As at As at As at As at As at As at As at As at As at
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Balance sheet
Continuing operations 2,638 2,788 3,430 (1,710) (2,623) (2,076) (3,310) (7,250) (6,363)
Disposal groups(2) 226 38 - (272) - - (240) (5) -
Bank overdrafts
Continuing operations (175) (143) (111) 175 143 111 - - -
Disposal groups(2) - (7) - - - - - - -
Net debt classification 2,689 2,676 3,319 (1,807) (2,480) (1,965) (3,550) (7,255) (6,363)
(1) Short term borrowings on the balance sheet include overdrafts which are
included within cash and cash equivalents for net debt.
(2) Disposal group balances are shown as 'assets classified as held for sale'
and 'liabilities associated with assets classified as held for sale' on the
balance sheet.
12. Consolidated cash flow analysis (continued)
c) Movement in net debt
Debt due within Debt due after(3)
one year one year
US$ million Cash and Carrying Carrying Current
cash value value financial Total
equivalents Hedge(2) asset net debt
(1) Hedge(2) investments (4)
Balance at 1 January 2005 2,781 (3,272) 55 (7,961) 302 2 (8,093)
Cash flow 52 510 - 33 - 5 600
Acquisition/disposal of - - - 1 - - 1
businesses
Unwinding of discount on - - - (23) - - (23)
convertible bonds
Reclassifications - (59) - 59 - - -
Movement in fair value - - (13) (25) (201) - (239)
Currency movements (157) 341 - 661 - (2) 843
Balance at 30 June 2005 2,676 (2,480) 42 (7,255) 101 5 (6,911)
Cash flow 550 846 25 599 - (18) 2,002
Acquisition/disposal of - 2 - 4 - - 6
businesses
Unwinding of discount on - - - (30) - - (30)
convertible bonds
Reclassifications - (241) - 240 - 1 -
Movement in fair value - - (54) 37 (101) - (118)
Other non-cash movements - - - - - 29 29
Currency movements 93 (92) - 42 - (1) 42
Balance at 31 December 2005 3,319 (1,965) 13 (6,363) - 16 (4,980)
Cash flow (417) 251 - 84 - - (82)
Acquisition/disposal of - 116 - 1,758 - (9) 1,865
businesses
Conversion to equity(3) - - - 828 - - 828
Unwinding of discount on - - - (17) - - (17)
convertible bonds
Reclassifications (270) - 270 - - -
Movement in fair value - - 129 33 (30) - 132
Other non-cash movements - - - - - (6) (6)
Currency movements (213) 61 - (143) - 1 (294)
Closing balance at 30 June 2006 2,689 (1,807) 142 (3,550) (30) 2 (2,554)
(1) The Group operates in certain countries (principally South Africa and
Venezuela) where the existence of exchange controls may restrict the use of
certain cash balances. These restrictions are not expected to have any material
effect on the Group's ability to meet its ongoing obligations.
(2) Derivative instruments that have been designated as hedges of assets and
liabilities included in net debt are included above to reflect the true net debt
position of the Group at the period end. These instruments are classified within
other financial assets and liabilities on the balance sheet.
(3) Debt due after more than one year includes $nil of convertible bond (30
June 2005: $1,954 million; 31 December 2005: $1,975 million). During the 6
months ended 30 June 2006 77.5%, ($828 million), of the convertible bond held by
Anglo American plc was converted to equity. The remaining $239 million is due
to mature in April 2007 and has therefore been reclassified to debt due within 1
year. $924 million of AngloGold Ashanti convertible bond was disposed on the
sale of Anglo American plc's controlling interest.
(4) Net debt excluding the impact of hedges is $2,666 million (30 June 2005:
$7,054 million; 31 December 2005: $4,993 million) and consists of cash and cash
equivalents $2,689 million (30 June 2005: $2,676 million; 31 December 2005:
$3,319 million), short term borrowings $1,807 million (30 June 2005: $2,480
million; 31 December 2005: $1,965 million), medium and long term borrowings
$3,550 million (30 June 2005: $7,255 million; 31 December 2005: $6,363 million)
and current financial asset investments $2 million (30 June 2005: $5million; 31
December 2005: $16 million).
13. EBITDA by business segment
EBITDA is operating profit before special items and remeasurements plus
depreciation and amortisation in subsidiaries and joint ventures and share of
EBITDA of associates:
US$ million
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Operating profit including associates' operating profit before special 4,563 2,993 6,376
items and remeasurements
Depreciation and amortisation
Subsidiaries and joint ventures 1,163 1,199 2,441
Associates 130 75 142
5,856 4,267 8,959
US$ million
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
By business segment
Platinum 1,171 610 1,282
Gold 540 433 871
Diamonds 341 337 655
Coal 464 476 1,243
Base Metals 2,022 875 1,990
Industrial Minerals 275 317 618
Ferrous Metals and Industries 783 961 1,779
Paper and Packaging 435 449 916
Exploration (66) (67) (150)
Corporate Activities (109) (124) (245)
EBITDA 5,856 4,267 8,959
EBITDA is stated before special items and remeasurements and is reconciled to 'Total profit from operations and
associates' as follows:
US$ million
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Total profit from operations and associates 4,448 2,759 5,601
Special items and remeasurements (including associates) 924 82 633
Net profit on disposals (including associates) (1,035) (67) (185)
Depreciation and amortisation: subsidiaries and joint ventures 1,163 1,199 2,441
Share of associates' interest, tax, depreciation, amortisation and 356 294 469
underlying minority interest
EBITDA 5,856 4,267 8,959
EBITDA is reconciled to cash inflows from operations as follows:
US$ million
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
EBITDA 5,856 4,267 8,959
Share of operating profit of associates, before special items and (557) (567) (1,032)
remeasurements
Underlying depreciation and amortisation in associates (130) (75) (142)
Share option expense 47 40 92
Fair value gains before remeasurements (120) (61) (278)
Additional pension contributions (232) - -
Provisions 31 60 113
Increase in inventories (295) (113) (453)
Increase in operating receivables (698) (471) (600)
Increase in operating payables 197 13 539
Other adjustments (39) (19) 67
Cash inflows from operations 4,060 3,074 7,265
14. Acquisition of subsidiaries
The Group made one material acquisition in the 6 months ended 30 June 2006. The
Group acquired a 100% interest in AltaSteel for a total cash consideration of
$85 million (including transaction costs). Net assets acquired in the
transaction were $88 million. $3 million negative goodwill arising on
acquisition has been written back to the income statement as a special operating
item.
The fair values of the acquired assets and liabilities relating to AltaSteel in
the table below are provisional, and will be finalised in the 2006 annual report
when the final values arising from the fair value exercises are confirmed.
US$ million AltaSteel Other Total
Net assets acquired
Tangible fixed assets 74 140 214
Investment in associate - (1) (1)
Deferred tax asset - 1 1
Other financial assets (derivatives) 35 - 35
Inventories 30 19 49
Trade and other receivables 27 37 64
Cash and cash equivalents 8 1 9
Short term borrowings - (31) (31)
Trade and other payables (21) (15) (36)
Provisions for liabilities and charges (43) (2) (45)
Medium and long term borrowings (14) - (14)
Deferred tax liability (8) (17) (25)
Minority interest - (4) (4)
Net assets acquired 88 128 216
Goodwill arising on acquisition - 14 14
Negative goodwill arising on acquisition (3) - (3)
Total cost of acquisition 85 142 227
Satisfied by
Net cash acquired 8 1 9
Deferred consideration - 3 3
Net cash paid 77 138 215
15. Partial and deemed disposals of AngloGold Ashanti shares
On 20 April 2006 the Group completed the sale of 19.7 million ordinary shares
held in AngloGold Ashanti Limited for cash of $978 million. This, together with
the Group's non-participation in the issue of additional ordinary shares by
AngloGold Ashanti, diluted the Group's percentage investment from 50.9% to
41.8%. With effect from that date, the Group ceased to account for AngloGold
Ashanti as a subsidiary and began accounting for it as an associate under the
equity method.
The net asset position at the date of disposal, together with the
reclassification to an associate and resulting gain on disposal of shares and
related net cash inflow are shown below:
US$ million 30.06.06
Tangible assets 6,613
Other non-current assets 856
Current assets 2,162
Current liabilities (2,596)
Non-current liabilities (4,233)
Net assets 2,802
Minority interest (1,101)
Group's share of AngloGold Ashanti net assets immediately prior to 1,701
disposal
Less: Retained investment in an associated undertaking immediately (1,451)
after disposal
Net assets disposed of 250
Cumulative translation differences recycled from reserves (9)
Net gain on disposal 737
Net sale proceeds 978
Less: Net cash and cash equivalents disposed (147)
Add: Costs accrued not yet paid 3
Add: Realised foreign exchange gain 5
Net cash inflow from partial disposal of AngloGold Ashanti 839
The non-participation in the issue of additional shares by AngloGold Ashanti
further diluted the percentage investment and thereby resulted in a deemed
disposal. The gain on deemed disposal is:
30.06.06
US$ million
Movement in share of net assets as a result of share issue 174
Deemed disposal of goodwill and mining properties (17)
Cumulative translation differences recycled from reserves 2
Deemed gain on disposal 159
16. Disposals of subsidiaries
Other than the partial disposal of AngloGold Ashanti in note 15, no significant
disposals were made during the 6 months to 30 June 2006.
The following assets and liabilities relating to disposal groups have been
reclassified as held for sale at 30 June 2006. The Group expects to complete
the sale of these businesses within 12 months of the period end.
US$ million
Kumba Highveld(1) Other(1) Total
(non iron-ore)
(1)
Intangible fixed assets 11 - - 11
Tangible fixed assets 1,222 232 36 1,490
Biological assets 4 - - 4
Environmental rehabilitation trusts 23 - - 23
Investments in associates 20 - - 20
Financial asset investments 23 15 1 39
Deferred tax assets 57 - - 57
Total non-current assets 1,360 247 37 1,644
Inventories 161 119 17 297
Trade and other receivables 177 127 19 323
Other current financial assets 6 2 - 8
Cash and cash equivalents 141 80 5 226
Total current assets 485 328 41 854
Total assets(2) 1,845 575 78 2,498
Short term borrowings (163) (109) - (272)
Trade and other payables (148) (171) (19) (338)
Other current financial liabilities (2) (5) - (7)
Short term provisions (2) (3) - (5)
Total current liabilities (315) (288) (19) (622)
Medium and long term borrowings (233) (5) (2) (240)
Provisions (87) (14) (3) (104)
Deferred tax liabilities (182) (23) - (205)
Retirement benefit obligations - (13) - (13)
Total non-current liabilities (502) (55) (5) (562)
Total liabilities(2) (817) (343) (24) (1,184)
Net assets 1,028 232 54 1,314
(1) Kumba (non iron-ore) and Highveld disposal groups are included in the
Ferrous Metals and Industries business segment. The 'other' disposal group is
included in the Industrial Minerals business segment.
(2) The carrying amount of assets ($757 million) and associated liabilities
($283 million), reclassified as held for sales at 30 June 2005 (31 December
2005: $nil) were held principally within the Ferrous Metals and Industries
business segment.
17. Capital expenditure on fixed assets and biological assets
US$ million 6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Platinum 276 243 616
Gold 196 311 722
Coal 290 126 331
Base Metals 104 100 271
Industrial Minerals 115 120 274
Ferrous Metals and Industries 222 133 373
Paper and Packaging 254 392 691
Other 9 8 28
Purchase of tangible fixed assets 1,466 1,433 3,306
Investment in biological assets 33 26 55
1,499 1,459 3,361
Capital expenditure shown above comprises cash expenditure on fixed assets and
biological assets. Segmental capital expenditure shown in note 3 also includes
accruals and expenditure on acquisitions and intangible assets and capitalised
interest, but excludes expenditure on biological assets.
18. Contingent liabilities and contingent assets
There have been no significant changes in contingent liabilities from those
reported at 31 December 2005, other than reductions arising from the
classification of AngloGold Ashanti as an associate.
The Group is subject to various claims which arise in the ordinary course of
business. Having taken appropriate legal advice, the Group believe that the
likelihood of a material liability arising is remote.
At 30 June 2006, contingent liabilities comprise aggregate amounts of $86
million (30 June 2005: $272 million; 31 December 2005: $163 million) in respect
of loans and performance guarantees given to banks and other third parties.
There were no significant contingent assets in the Group at 30 June 2006, 30
June 2005 or 31 December 2005.
19. Related party transactions
The Group has related party relationships with its subsidiaries, associates and
joint ventures.
At 30 June 2006, Anglo American holds $175 million (30 June 2005: $350 million;
31 December 2005: $350 million) of 10% non-cumulative redeemable preference
shares in DB Investments, the holding company of De Beers Societe Anonyme.
On 20 April 2006 the Group completed the sale of 19.7 million ordinary shares
held in AngloGold Ashanti Limited. This, together with the Group's
non-participation in the issue of additional ordinary shares by AngloGold
Ashanti, diluted the Group's percentage investment from 50.9% to 41.8%. Thus,
effective from that date, the Group ceased to account for AngloGold Ashanti as a
subsidiary and began accounting for it as an associate under the equity method.
The Company and its subsidiaries, in the ordinary course of business, enter into
various sales, purchase and service transactions with joint ventures and
associates and others in which the Group has a material interest. These
transactions are under terms that are no less favourable than those arranged
with third parties. These transactions are not considered to be significant.
Dividends received from associates during the period totalled $100 million (30
June 2005: $300 million; 31 December 2005: $461 million), as disclosed in the
consolidated cash flow statement.
The directors of the Company and their immediate relatives control 4% (30 June
2005: 4%; 31 December 2005: 3%) of the voting shares of the Company.
20. Events occurring after the period end
On 14 July 2006, the Group announced the sale of Anglo American's 79% stake in
Highveld Steel and Vanadium Corporation Limited to Evraz Group SA and Credit
Suisse for a total consideration of $678 million. Following the disposal of the
initial 49.8%, for which Anglo American received $412 million, Evraz has an
option to acquire Anglo American's remaining 29.2% stake in Highveld Steel and
Vanadium Corporation Limited for $226 million. This amount will be reduced by
any dividends paid by Highveld Steel and Vanadium Corporation Limited prior to
Anglo American selling its remaining shares. The deal represents a substantial
foreign direct investment in South Africa.
Since the period ended 30 June 2006, the remaining 22.5% of the Anglo American
plc convertible bond was converted to equity by bondholders. This was completed
on 25 July 2006. The number of shares converted subsequent to the period end
was 10,754,465 at a conversion price of $22.76.
INDEPENDENT REVIEW REPORT TO ANGLO AMERICAN PLC
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 30 June 2006 which comprises the consolidated income
statement, the consolidated balance sheet, the consolidated cash flow statement,
the consolidated statement of recognised income and expense and related notes 1
to 20. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the Company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the Company, for our review work, for this report, or for the conclusions we
have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority and the requirements of IAS 34 Interim
Financial Reporting, which require that the accounting policies and presentation
applied to the interim figures are consistent with those applied in preparing
the preceding annual accounts except where any changes, and the reasons for
them, are disclosed.
Review work performed
We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of Group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2006.
Deloitte & Touche LLP
Chartered Accountants
London
3 August 2006
Production statistics
The figures below include the entire output of consolidated entities and the
Group's share of joint ventures, joint arrangements and associates where
applicable, except for Collahuasi in Base Metals which is quoted
on a 100% basis
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Anglo Platinum (troy ounces)(1)(2)
Platinum 1,368,800 1,291,400 2,502,000
Palladium 743,400 731,700 1,376,700
Rhodium 150,000 175,700 333,500
2,262,200 2,198,800 4,212,200
Nickel (tonnes) 10,900 11,200 20,900
AngloGold Ashanti (gold in troy ounces) (1)(3)
South Africa 965,000 1,330,000 2,676,000
Argentina 88,000 108,000 211,000
Australia 152,000 261,000 455,000
Brazil 116,000 167,000 346,000
Ghana 239,000 342,000 680,000
Guinea 88,000 123,000 246,000
Mali 209,000 261,000 528,000
Namibia 34,000 37,000 81,000
Tanzania 124,000 357,000 613,000
USA 100,000 152,000 330,000
2,115,000 3,138,000 6,166,000
Anglo Coal (tonnes)
South Africa
Eskom 16,141,000 16,585,200 34,327,900
Trade - Thermal 10,331,500 9,170,800 20,281,100
Trade - Metallurgical 723,200 852,800 2,268,800
27,195,700 26,608,800 56,877,800
Australia
Thermal 7,381,100 8,147,700 16,710,300
Metallurgical 4,027,800 4,591,000 9,390,300
11,408,900 12,738,700 26,100,600
South America
Thermal 5,501,000 4,835,300 10,066,000
Total 44,105,600 44,182,800 93,044,400
Anglo Coal (tonnes)
South Africa
Bank 196,400 1,415,600 3,202,200
Greenside 1,151,300 1,345,600 2,730,000
Goedehoop 3,869,800 3,029,100 6,298,600
Isibonelo 1,683,500 - 1,358,300
Kriel 5,805,300 5,918,800 12,030,900
Kleinkopje 1,792,500 2,090,800 4,483,500
Landau 2,000,200 1,760,000 3,682,900
New Denmark 2,591,200 2,007,500 4,139,400
New Vaal 7,451,600 8,066,200 17,100,000
Nooitgedacht 361,000 382,400 794,400
Mafube 292,900 592,800 1,057,600
27,195,700 26,608,800 56,877,800
(1) See the published results of Anglo Platinum Limited, Northam
Platinum Limited and AngloGold Ashanti Limited for further analysis of
production information.
(2) Includes Anglo Platinum's 22.5% share of Northam Platinum Limited's
production.
(3) Gold production for AngloGold Ashanti reflects 100% of that
company's production to 20 April 2006 and 41.8% of production thereafter.
Production statistics (continued)
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Anglo Coal (tonnes) (continued)
Australia
Callide 4,592,800 4,851,500 9,500,000
Drayton 1,877,900 2,043,900 4,099,000
Dartbrook(1) 62,100 501,000 1,495,500
German Creek 1,668,300 1,433,600 3,560,000
Jellinbah East 459,900 461,900 851,100
Moranbah 1,264,600 1,861,400 3,432,800
Dawson Complex 1,483,300 1,585,400 3,162,200
11,408,900 12,738,700 26,100,600
South America
Carbones del Guasare 754,100 748,200 1,409,700
Carbones del Cerrejon 4,746,900 4,087,100 8,656,300
5,501,000 4,835,300 10,066,000
Total 44,105,600 44,182,800 93,044,400
Anglo Base Metals
Copper(2)
Collahuasi
100% basis (Anglo American 44%)
Ore mined tonnes 20,758,000 18,406,000 40,705,000
Ore processed Oxide tonnes 2,884,000 3,172,000 6,461,000
Sulphide tonnes 18,375,000 18,329,000 36,659,000
Ore grade processed Oxide % Cu 1.0 0.8 0.9
Sulphide % Cu 1.1 1.1 1.0
Production Copper concentrate dmt 610,000 594,000 1,234,000
Copper cathode tonnes 29,800 30,100 60,700
Copper in tonnes 176,800 181,200 366,400
concentrate
Total copper production for tonnes 206,600 211,300 427,100
Collahuasi
Minera Sur Andes
Los Bronces mine
Ore mined tonnes 11,355,000 10,729,000 22,146,000
Marginal ore mined tonnes 14,258,000 13,355,000 27,936,000
Las Tortolas concentrator Ore processed tonnes 9,564,000 10,335,000 21,034,000
Ore grade processed % Cu 1.0 1.0 1.0
Average recovery % 88.2 89.4 88.3
Production Copper concentrate dmt 257,400 256,200 510,000
Copper cathode tonnes 20,700 19,800 38,800
Copper in tonnes 83,000 93,000 188,500
concentrate
Total tonnes 103,700 112,800 227,300
El Soldado mine
Ore mined Open pit - ore mined tonnes 2,689,000 1,620,000 2,907,000
Open pit - marginal tonnes 63,000 209,000 384,000
ore mined
Underground tonnes 1,060,000 875,000 1,996,000
(sulphide)
Total tonnes 3,812,000 2,704,000 5,287,000
Ore processed Oxide tonnes 309,000 329,000 665,000
Sulphide tonnes 3,726,000 3,371,000 7,004,000
Ore grade processed Oxide % Cu 1.3 1.2 1.3
Sulphide % Cu 1.0 1.2 1.1
Production Copper concentrate dmt 98,600 117,000 210,500
Copper cathode tonnes 2,800 3,100 6,500
Copper in tonnes 29,100 34,100 60,000
concentrate
Total tonnes 31,900 37,200 66,500
(1) On care and maintenance.
(2) Copper production figures exclude Palabora.
Production statistics (continued)
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Anglo Base Metals (continued)
Chagres Smelter
Copper concentrate smelted tonnes 92,300 82,900 144,800
Production Copper blister/ tonnes 89,900 79,400 138,100
anodes
Acid tonnes 256,900 211,900 371,900
Total copper production for the tonnes 135,600 150,000 293,800
Minera Sur Andes group
Mantos Blancos
Mantos Blancos mine
Ore processed Oxide tonnes 2,264,000 2,243,000 4,535,000
Sulphide tonnes 1,939,000 1,981,000 3,954,000
Marginal ore mined tonnes 2,655,000 3,456,000 5,337,000
Ore grade processed Oxide %Cu 0.8 0.6 0.8
(soluble)
Sulphide %Cu 1.1 1.0 1.1
(insoluble)
Marginal ore %Cu 0.3 0.4 0.4
(soluble)
Production Copper concentrate dmt 56,600 49,100 105,300
Copper cathode tonnes 23,100 22,300 48,600
Copper in tonnes 19,400 18,400 39,100
concentrate
Total tonnes 42,500 40,700 87,700
Mantoverde mine
Ore processed Oxide tonnes 4,655,000 4,533,000 9,439,000
Marginal ore tonnes 2,400,000 2,100,000 3,625,000
Ore grade processed Oxide %Cu 0.7 0.7 0.7
(soluble)
Marginal ore %Cu 0.4 0.3 0.3
(soluble)
Production Copper cathode tonnes 29,200 30,600 62,000
Black Mountain tonnes 1,800 1,300 3,200
Total attributable copper production tonnes 300,000 315,600 634,600
Nickel, Niobium and Mineral Sands
Nickel
Codemin
Ore mined tonnes 194,400 190,400 528,600
Ore processed tonnes 256,700 245,800 521,400
Ore grade processed % Ni 2.1 2.0 2.1
Production tonnes 4,900 4,300 9,600
Loma de Niquel
Ore mined tonnes 695,000 697,300 1,317,000
Ore processed tonnes 620,400 584,000 1,169,000
Ore grade processed % Ni 1.6 1.6 1.6
Production tonnes 8,800 8,300 16,900
Total attributable nickel tonnes 13,700 12,600 26,500
production
Niobium
Catalao
Ore mined tonnes 278,900 237,700 723,100
Ore processed tonnes 398,000 306,500 672,300
Ore grade processed Kg Nb/tonne 10.8 11.3 11.0
Production tonnes 2,200 1,900 4,000
Mineral Sands
Namakwa Sands
Ore mined tonnes 8,700,000 9,000,000 18,100,000
Production Ilmenite tonnes 164,600 162,800 316,100
Rutile tonnes 14,000 14,700 29,100
Zircon tonnes 64,300 63,100 128,600
Smelter production Slag tapped tonnes 81,200 83,600 164,400
Iron tapped tonnes 52,700 53,200 105,400
Production statistics (continued)
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Anglo Base Metals (continued)
Zinc and Lead
Black Mountain
Ore mined tonnes 759,000 714,000 1,413,000
Ore processed tonnes 715,000 648,000 1,350,000
Ore grade processed Zinc % Zn 3.2 3.5 3.3
Lead % Pb 3.9 3.5 3.7
Copper % Cu 0.4 0.4 0.4
Production Zinc in concentrates tonnes 15,200 16,200 32,100
Lead in concentrates tonnes 21,200 19,500 42,200
Copper in tonnes 1,800 1,300 3,200
concentrates
Lisheen
Ore mined tonnes 749,000 726,000 1,527,000
Ore processed tonnes 716,000 709,000 1,461,000
Ore grade processed Zinc % Zn 12.3 12.5 12.0
Lead % Pb 2.3 2.0 2.0
Production Zinc in concentrate tonnes 79,600 81,300 159,300
Lead in concentrate tonnes 12,000 10,300 20,800
Skorpion
Ore mined tonnes 679,100 578,300 1,199,000
Ore processed tonnes 668,000 574,000 1,280,000
Ore grade processed Zinc % Zn 12.3 12.2 12.4
Production Zinc tonnes 75,000 56,300 132,800
Total attributable zinc production tonnes 169,800 153,800 324,200
Total attributable lead production tonnes 33,200 29,800 63,000
Anglo Industrial Minerals
Aggregates tonnes 44,166,200 41,403,700 85,887,000
Lime products tonnes 746,900 751,800 1,428,100
Concrete m3 4,162,100 4,204,000 8,353,200
Sodium tripolyphosphate tonnes 36,900 60,700 106,000
Phosphates tonnes 399,600 377,400 833,500
Production statistics (continued)
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Anglo Ferrous Metals and Industries
Kumba Resources Limited
Iron ore production
Lump tonnes 9,236,000 9,578,000 18,747,000
Fines tonnes 6,093,000 5,933,000 12,240,000
Total iron ore 15,329,000 15,511,000 30,987,000
Coal
Power station coal tonnes 7,550,000 7,331,000 14,573,000
Coking coal tonnes 1,109,000 1,174,000 2,273,000
Steam coal tonnes 1,476,000 1,441,000 2,993,000
Total coal 10,135,000 9,946,000 19,839,000
Zinc metal tonnes 48,000 53,000 119,000
Heavy minerals(1)
Ilmenite tonnes 160,000 153,000 356,000
Scaw Metals
Rolled products tonnes 205,100 179,200 386,500
Cast products tonnes 74,800 63,000 133,900
Grinding media tonnes 228,800 223,500 461,400
Highveld Steel
Rolled products tonnes 385,900 319,600 684,000
Continuous cast blocks tonnes 428,300 421,300 874,900
Vanadium slag tonnes 31,800 32,600 66,800
Samancor
Manganese ore mtu m 32 46 88
Manganese alloys tonnes 93,600 164,400 309,000
Tongaat-Hulett
Sugar tonnes 371,600 388,800 861,000
Aluminium tonnes 99,200 94,300 192,000
Starch and glucose tonnes 272,800 283,400 595,000
Hippo Valley
Sugar tonnes 57,800 74,900 194,000
Anglo Paper and Packaging
Mondi Packaging
Packaging papers tonnes 1,409,946 1,336,298 2,705,691
Corrugated board and boxes m m2 1,071 1,048 2,081
Paper sacks m units 1,799 1,667 3,282
Coating and release liners m m2 1,186 866 1,681
Pulp - external tonnes 89,025 90,475 174,683
Mondi Business Paper
Uncoated wood free paper tonnes 1,015,481 938,582 1,890,079
Newsprint tonnes 92,056 93,384 186,924
Pulp - external tonnes 52,221 66,989 127,745
Wood chips green metric 475,665 877,693 1,747,290
tonnes
Mondi Packaging South Africa
Packaging papers tonnes 149,078 154,323 316,820
Corrugated board and boxes m m2 142 154 330
Newsprint Joint Ventures and other
Newsprint (attributable share) tonnes 162,065 154,252 316,459
Aylesford tonnes 100,272 95,085 193,528
Shanduka (attributable share) tonnes 61,793 59,167 122,932
(1) Further details of heavy minerals production are available in Kumba's published
results.
Reconciliation of subsidiaries' and associates' reported earnings to the
underlying earnings included in the consolidated financial statements
For the six months ended 30 June 2006
Note only key reported lines are reconciled
AngloGold Ashanti Limited
US$ million
IFRS adjusted headline earnings 226
Exploration 15
Depreciation on assets fair valued on acquisition (16)
Deferred tax on depreciation on assets fair valued on acquisition 5
Minorities' share of profit during subsidiary period up to 20 April 2006 (69)
Share of earnings not attributable to Anglo American plc's 41.8% shareholding from 20 April (59)
2006
Contribution to Anglo American plc underlying earnings 102
Anglo Platinum Limited
US$ million
IFRS headline earnings (US$ equivalent of published) 715
Exploration 15
Exchange rate difference (19)
Other adjustments (6)
705
Minority interest (182)
Depreciation on assets fair valued on acquisition (net of tax) (31)
Contribution to Anglo American plc underlying earnings 492
DB Investments (DBI)
US$ million
DBI underlying earnings (100%) 308
Adjustments(1) 9
DBI Underlying earnings - Anglo American plc basis (100%) 317
Anglo American plc's 45% ordinary share interest 143
Income from preference shares 21
Contribution to Anglo American plc underlying earnings 164
(1) Adjustments include the reclassification of the actuarial gains and losses booked to the income
statement by Dbsa under the corridor mechanism of IAS 19.
Kumba Resources Limited
US$ million
IFRS headline earnings (US$ equivalent of published) 247
Exchange rate difference (14)
Depreciation on assets fair valued on acquisition (net of tax) (8)
Exploration 6
Other adjustments (7)
224
Minority interest (77)
Contribution to Anglo American plc underlying earnings 147
Reconciliation of subsidiaries' and associates' reported earnings to the
underlying earnings included in the consolidated financial statements
(continued)
For the six months ended 30 June 2006
Note only key reported lines are reconciled
Highveld Steel and Vanadium Corporation Limited
US$ million
IFRS headline earnings (US$ equivalent of published) 64
Other adjustments (3)
61
Minority interest (13)
Contribution to Anglo American plc underlying earnings 48
The Tongaat-Hulett Group Limited
US$ million
IFRS headline earnings (US$ equivalent of published) 47
Other adjustments 8
55
Minority interest (27)
28
Add Anglo American plc's share of Hulett Aluminium 3
Contribution to Anglo American plc underlying earnings 31
Exchange rates and commodity prices
US$ exchange rates
6 months ended 6 months ended Year ended
30.06.06 30.06.05 31.12.05
Average spot prices for the period
South African rand 6.31 6.21 6.37
Sterling 0.56 0.53 0.55
Euro 0.81 0.78 0.80
Australian dollar 1.35 1.29 1.31
Chilean peso 527 580 559
Closing spot prices
South African rand 7.15 6.68 6.35
Sterling 0.54 0.56 0.58
Euro 0.78 0.83 0.85
Australian dollar 1.35 1.31 1.36
Chilean peso 539 579 512
Commodity prices 6 months ended 6 months ended Year ended
30.06.06 30.6.05 31.12.05
Average market prices for the period
Gold - US$/oz 590 427 445
Platinum - US$/oz 1,111 867 897
Palladium - US$/oz 318 190 201
Rhodium - US$/oz 4,222 1,583 2,056
Copper - US cents/lb 275 151 167
Nickel - US cents/lb 787 720 668
Zinc - US cents/lb 125 59 63
Lead - US cents/lb 53 45 44
European eucalyptus pulp price (CIF) - US$/tonne 617 575 582
Summary by business segment
EBITDA(2) Operating profit/ Underlying earnings/
Turnover(1) (loss)(3) (loss)
US$ million 6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months
ended ended ended ended ended ended ended ended
30.06.06 30.06.05 30.06.06 30.06.05 30.06.06 30.06.05 30.06.06 30.06.05
Platinum 2,664 1,767 1,171 610 934 410 492 256
Gold 1,102 1,333 540 433 303 172 102 69
Diamonds 1,635 1,628 341 337 293 297 164 188
Coal 1,590 1,479 464 476 356 374 260 263
South Africa 673 681 173 231 144 205 107 142
Australia 656 536 159 109 102 48 74 36
South America 261 262 132 136 110 121 79 85
Base Metals 2,967 1,629 2,022 875 1,854 721 1,277 525
Copper 2,238 1,118 1,637 673 1,536 570 993 413
Collahuasi 715 319 537 209 503 174 324 133
Minera Sur Andes 1,115 559 832 355 783 306 501 216
Mantos Blancos 408 240 269 110 251 90 166 64
Other - - (1) (1) (1) - 2 -
Nickel, Niobium, 334 324 167 164 141 141 98 103
Mineral Sands
Catalao 31 25 14 11 13 10 1 6
Codemin 81 65 42 36 38 33 36 34
Loma de Niquel 133 143 85 89 74 79 50 47
Namakwa Sands 89 91 26 28 16 19 11 16
Zinc 395 187 250 56 208 29 214 26
Black Mountain 64 33 13 6 7 6 10 4
Lisheen 156 68 109 23 101 17 113 21
Skorpion 175 86 128 27 100 6 91 1
Other - - (32) (18) (31) (19) (28) (17)
Industrial Minerals 1,995 2,035 275 317 151 193 112 140
Tarmac 1,899 1,921 265 299 152 183 113 136
Copebras 96 114 10 18 (1) 10 (1) 4
Ferrous Metals and 3,204 3,694 783 961 644 791 293 413
Industries
Kumba 1,127 846 457 324 378 246 147 105
Highveld Steel 522 668 112 282 95 261 48 130
Scaw Metals 597 488 87 68 74 58 51 41
Samancor Group 215 466 26 133 26 121 21 33
Tongaat-Hulett 740 658 107 86 78 56 31 85
Boart Longyear - 512 - 72 - 55 - 21
Other 3 56 (6) (4) (7) (6) (5) (2)
Paper and Packaging 3,668 3,580 435 449 212 233 120 133
Mondi Packaging 2,005 1,969 245 250 128 132 88 82
Mondi Business Paper 1,113 1,063 140 164 56 89 20 54
Other 550 548 50 35 28 12 12 (3)
Exploration - - (66) (67) (66) (67) (53) (50)
Corporate - - (109) (124) (118) (131) (265) (238)
18,825 17,145 5,856 4,267 4,563 2,993 2,502 1,699
(1) Turnover includes the Group's share of turnover of joint
ventures and associates. Base Metals' turnover is shown after deduction of
treatment charges and refining charges (TC/RCs).
(2) EBITDA is operating profit before special items, operating
remeasurements, depreciation and amortisation in subsidiaries and share of
EBITDA of joint ventures and associates.
(3) Operating profit includes operating profit before special
items and remeasurements from subsidiaries and joint ventures and share of
operating profit (before interest, tax, minority interests, special items and
remeasurements) of associates.
ANGLO AMERICAN plc
(Incorporated in England and Wales - Registered number 3564138)
(the 'Company')
Notice of Interim (including Special) Dividend
(Dividend No 15)
Notice is hereby given that an interim dividend (including a special dividend) on the Company's ordinary
share capital in respect of the year to 31 December 2006 will be paid as follows
Total amount (interim and special) - United States currency 100 cents per ordinary share
(notes 1 and 2)
Last day to effect removal of shares between the UK and SA registers Friday 4 August 2006
Currency conversion US$:Rand rate determined Monday 7 August 2006
Last day to trade on the JSE Limited ('JSE') to qualify for dividend Friday 18 August 2006
Ex-dividend on the JSE from the commencement of trading on Monday 21 August 2006
Ex-dividend on the London Stock Exchange from the commencement of trading on Wednesday 23 August 2006
Record date (applicable to both the United Kingdom principal register and Friday 25 August 2006
South African branch register)
Currency conversion US$:£/€ rates determined Tuesday 29 August 2006
Removal of shares between the UK and SA registers permissible from Tuesday 29 August 2006
Last day for receipt of Dividend Reinvestment Plan ('DRIP') Mandate Forms by Wednesday 30 August 2006
Central Securities Depository Participants ('CSDPs') (notes 4 and 5)
Last day for receipt of DRIP Mandate Forms by the UK Registrars or the South Thursday 31 August 2006
African Transfer Secretaries (notes 4 and 5)
Dividend warrants posted Wednesday 20 September 2006
Payment date of dividend Thursday 21 September 2006
Notes:
1 This amount includes a special dividend of 67 US cents per ordinary share.
2 Shareholders on the United Kingdom register of members with an address in the United Kingdom will be
paid in pounds sterling and those with an address in a country in the European Union which has adopted the
euro, will be paid in euros. Such shareholders may, however, elect to be paid their dividends in US dollars
provided the UK Registrars receive such election by Friday 25 August 2006. Shareholders with an address
elsewhere will be paid in US dollars except those registered on the South African branch register who will be
paid in South African rand. The currency conversion rates and the amounts per share in South African rand and
in pounds sterling/euros will be announced on Monday 7 August and Tuesday 29 August 2006 respectively.
3 Dematerialisation and rematerialisation of registered share certificates in South Africa will not be
effected by CSDPs during the period from Monday 21 August 2006 to Friday 25 August 2006 (both days
inclusive).
4 Those shareholders who already participate in the DRIP need not complete a DRIP mandate form for each
dividend as such forms provide an on-going authority to participate in the DRIP until cancelled in writing.
Shareholders who wish to participate in the DRIP should obtain a mandate form from the UK Registrars, the
South African Transfer Secretaries or, in the case of those who hold their shares through the STRATE system,
their CSDP.
5 In terms of the DRIP, and subject to the purchase of shares in the open market, share certificates/
Crest notifications are expected to be mailed and CSDP investor accounts credited/updated on Friday 6 October
2006.
6 Copies of the terms and conditions of the DRIP are available from the UK Registrars or the South
African Transfer Secretaries.
By order of the Board
N Jordan
Secretary
3 August 2006
14. Registered office UK Registrars South African Transfer Secretaries
20 Carlton House Terrace Lloyds TSB Registrars Link Market Services South Africa (Pty) Limited
London The Causeway 11 Diagonal Street
SW1Y 5AN Worthing Johannesburg 2001
England West Sussex PO Box 4844, Johannesburg 2000
BN99 6DA South Africa
England
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