Results to 30 June 2000

Broken Hill Proprietary Co Ld 4 September 2000 The Broken Hill Proprietary Company Limited 1999/2000 FINANCIAL RESULTS The following additional information is provided in relation to the results for the thirteen months ended 30 June 2000. This information should be considered in conjunction with the information released on 27 July 2000. Profit and loss statement 30 June 31 May for the financial period ended (a) 2000 2000 $m $m Operating revenue Sales 21 506 19 229 Interest revenue 96 175 Other revenue 2 081 2 517 23 683 21 921 Operating profit including abnormal items, before depreciation, amortisation and borrowing costs 4 725 805 Deduct Depreciation and amortisation 2 292 2 218 Borrowing costs (1) 723 732 Operating profit/(loss) before income tax 1 710 (2 145) Deduct Income tax expense including abnormal items attributable to operating profit/(loss) 117 164 Operating profit/(loss) after income tax 1 593 (2 309) Outside equity interests in operating loss/ (profit) after income tax 34 (3) Operating profit/(loss) after income tax, attributable to members of the BHP Entity 1 627 (2 312) Retained profits at the beginning of the financial period 1 826 4 826 Adjustment for initial adoption of revised accounting standard AASB 1016: Accounting for Investments in Associates 250 - Total available for appropriation 3 703 2 514 (deduct)/add Dividends provided for or paid (903) (766) Aggregate of amounts transferred from reserves 41 78 Retained profits at the end of the financial period 2 841 1 826 The operating profit/(loss) after income tax, attributable to members of the BHP Entity comprises: Operating profit before abnormal items and income tax 2 965 934 Income tax expense attributable to operating profit before abnormal items (967) (566) Operating profit after income tax before abnormal items 1 998 368 Outside equity interests in operating loss/(profit) after income tax before abnormal items 34 (3) Operating profit after income tax, before abnormal items, attributable to members of the BHP Entity 2 032 365 Abnormal items included in operating profit/(loss) before income tax (1 255) (3 079) Abnormal income tax benefit 850 402 Abnormal items after income tax (405) (2 677) Operating profit/(loss) after income tax, attributable to members of the BHP Entity 1 627 2 312 (1) Excludes capitalised interest of 19 194 (a) 30 June 2000 refers to the thirteen months ended 30 June 2000. 31 May refers to the year ended 31 May. Refer 'Change of financial year' on page 12. -- 2 -- Balance sheet as at (a) 30 June 31 May 30 Nov 2000 1999 1999 $m $m $m Assets Current assets Cash 684 460 464 Receivables 2 629 2 661 2 634 Investments 359 273 481 Inventories 2 138 2 262 2 239 Other 271 196 228 Total current assets 6 081 5 852 6 046 Non-current assets Receivables 189 323 189 Investments 1 131 483 683 Inventories 159 187 172 Property, plant and equipment 17 567 20 465 19 839 Exploration, evaluation and development 2 019 2 166 2 115 Intangibles 130 175 168 Other (1) 2 068 1 836 1 704 Total non-current assets 23 263 25 635 24 870 Total assets 29 344 31 487 30 916 Liabilities Current liabilities Accounts payable 2 566 2 635 2 308 Borrowings 2 530 1 381 1 918 Provisions 1 727 2 178 1 564 Total current liabilities 6 823 6 194 5 790 Non-current liabilities Accounts payable 45 156 76 Borrowings 5 868 9 990 9 010 Provisions 5 603 5 786 5 526 Total non-current 11 516 15 932 14 612 Total liabilities 18 339 22 126 20 402 Net assets 11 005 9 361 10 514 Shareholders' equity Shareholders' equity attributable to members of the BHP Entity Share capital 7 093 6 533 6 944 Reserves 419 287 309 Retained profits 2 841 1 826 2 590 10 353 8 646 9 843 Shareholders' equity attributable to outside equity interests 652 715 671 Total shareholders' equity 11 005 9 361 10 514 (1) 'Other' comprises of the following amounts:- - future income tax benefits 1 268 1 110 958 - deferred charges, prepayments and other 800 726 746 (a) Refer 'Change of financial year' on page 12. -- 3 -- Statement of cash flows for the financial period ended (a) 30 June 31 May 2000 1999 $m $m Cash flows related to operating activities Receipts from customers 20 959 19 331 Payments to suppliers, employees, etc: (16 210) (15 248) Dividends received 46 20 Interest received 91 221 Borrowing costs (916) (1 087) Proceeds from gas sales contract price re-negotiation 231 708 Other 337 348 Operating cash flows before income tax 4 538 4 293 Income taxes paid (600) (708) Net operating cash flows 3,938 3,585 Cash flows related to investing activities Purchases of property, plant and equipment (1 102) (2 608) Exploration expenditure (373) (643) Purchases of investments (438) (137) Purchases of, or increased investment in, controlled entities net of their cash - (75) Investing outflows (1 913) (3 463) Proceeds from sale of property, plant and equipment 741 548 Proceeds from sale or redemption of investments 242 361 Proceeds from sale or partial sale of controlled entities and joint venture interests net of their cash 698 1 290 Net investing cash flows (232) (1 264) Cash flows related to financing activities Proceeds from ordinary share issues, etc 275 149 Borrowings 1 658 2 018 Repayment of borrowings (4 867) (4 310) Dividends paid (498) (520) Other 82 (14) Net financing cash flows (3 350) (2 677) Net increase/(decrease) in cash and cash equivalents 356 (356) Cash and cash equivalents at beginning of period 573 949 Effect of foreign currency exchange rate changes on cash and cash equivalents 8 (20) Cash and cash equivalents at end of period 937 573 (a) 30 June 2000 refers to the thirteen months ended 30 June 2000. 31 May refers to the year ended 31 May. Refer 'Change of financial year' on page 12. -- 4 -- Statement of cash flows (continued) 2000 1999 Reconciliation of cash $m $m Cash and cash equivalents comprise: Cash 684 460 Short term deposits 355 270 Bank overdrafts (102) (157) Total cash and cash equivalents 937 573 Non-cash financing and investing activities Shares issued: Bonus Share Plan 61 107 Dividend Investment Plan 341 279 Other: Employee Share Plan loan instalments 28 36 The Bonus Share Plan (BSP) is in lieu of dividends and the Dividend Investment Plan (DIP) is an application of dividends. The DIP was suspended following payment of the November 1999 half yearly dividend. Since that dividend was unfranked the BSP was suspended in accordance with the Company's Constitution and Rule 8 of the BSP on 17 September 1999. The Employee Share Plan loan instalments represent the repayment of loans outstanding with the Company, by the application of dividends. Control gained over entities having material effect No major acquisitions. Loss of control over entities having material effect No material disposals. Franking credits The BHP Group had a franking account balance of $24 million at 36 cents in the dollar available at 30 June 2000. The extent to which future dividends will be franked is uncertain, but the current outlook is for no franking of dividends for at least the next twelve months. (The BHP Group had a franking account balance of $230 million available at 31 May 1999. An amount of $453 million was used as a result of the 2 June 1999 dividend payment.) 2000 refers to the thirteen months ended 30 June 2000. 1999 refers to the year ended 31 May 1999. Refer 'Change of financial year' on page 12. -- 5 -- Income tax 2000 1999 $m $m Income tax arising from items taken to operating profit The prima facie tax on operating profit before abnormal items differs from the income tax provided in the accounts and is calculated as follows: Operating profit before abnormal items and income tax 2 965 934 Prima facie tax calculated at 36 cents in the dollar on operating profit before abnormal items 1 067 336 deduct tax effect of Investment and development allowance 56 39 Rebate for dividends 2 2 Amounts over provided in prior years 103 100 Recognition of prior year tax losses 187 85 Overseas tax rate change - 5 Research and development incentive 1 9 718 96 add/(deduct) tax effect of Non-deductible accounting depreciation and amortisation 60 67 Non-deductible dividends on redeemable preference shares 67 65 Non tax effected operating losses 28 213 Foreign expenditure including exploration not presently deductible 66 134 Foreign exchange/other 28 (9) Income tax attributable to operating profit before abnormal items 967 566 deduct tax effect of abnormal items 850 402 Income tax attributable to operating profit 117 164 2000 refers to the thirteen months ended 30 June 2000. 1999 refers to the year ended 31 May 1999. Refer 'Change of financial year' on page 12. -- 6 -- Exploration, evaluation and development expenditure capitalised 2000 1999 $m $m Exploration, evaluation and development expenditure - not yet in production 598 616 - in production 1 421 1 550 Total exploration, evaluation and development expenditure capitalised 2 019 2 166 Details of exploration, evaluation and development expenditure not yet in production: In exploration and/or evaluation stage In development stage 2000 1999 2000 1999 Opening balance 486 465 130 313 Expenditure incurred during the period 373 630 43 27 Expenditure expensed during the period (309) (475) - - Transferred from evaluation to development (146) (25) 146 25 Transferred to production 9 - (92) (226) Disposals (46) (42) - (1) Depreciation (13) (35) (4) - Exchange fluctuations and other movements 21 (32) - (8) Closing balance 375 486 223 130 2000 refers to the thirteen months ended 30 June 2000. 1999 refers to the year ended 31 May 1999. Refer 'Change of financial year' on page 12. -- 7 -- Depreciation and amortisation 2000 1999 $m $m Depreciation relates to Buildings 132 123 Plant, machinery and equipment 1 857 1 780 Mineral rights 69 61 Exploration, evaluation and development expenditures carried forward 213 213 Capitalised leased assets 4 8 Total depreciation 2 275 2 185 Amortisation (a)(b) 17 33 Total depreciation and amortisation 2 292 2 218 2000 $m Before Related Related Amount (after tax tax Tax outside attributable to equity members interests (a) Amortisation relates to Amortisation of goodwill 16 - - 16 Amortisation of other intangibles 1 - - 1 Total amortisation 17 - - 17 2000 1999 $m $m (b) Operating profit/(loss) restated to exclude amortisation of goodwill Operating profit/(loss) after tax before outside equity interests 1 593 (2 309) add amortisation of goodwill 16 31 Operating profit/(loss) after tax before outside equity interests and amortisation of goodwill 1 609 (2 278) add/(deduct) outside equity interests 34 (3) Operating profit/(loss) after tax (before amortisation of goodwill) attributable to members of the BHP Entity 1 643 (2 281) 2000 refers to the thirteen months ended 30 June 2000. 1999 refers to the year ended 31 May 1999. Refer 'Change of financial year' on page 12. -- 8 -- Segment results Industry classification $m Profit after Profit after income tax, income tax before Abnormal and Gross External Intersegment abnormal items net abnormal segment operating operating items (a) tax items (a) assets revenue revenue Industry 2000 classification Minerals 1 224 (744) 480 11 917 8 860 356 Steel (b) 410 (159) 251 7 673 8 569 27 Petroleum 1 155 171 1 326 7 401 5 625 14 Services 73 42 115 553 824 1 271 Net unallocated interest (512) (3) (515) 65 Group and unallocated (352) 288 (64) 1 800 (260) 7 items (c) BHP Group 1 998 (405) 1 593 29 344 23 683 1 675 1999 (d) Minerals 678 (2 649) (1 971) 13 187 9 730 498 Steel (b) 268 (105) 163 8 673 8 158 26 Petroleum 321 (89) 232 7 826 3 203 10 Services 97 173 270 756 1 267 1 500 Net unallocated interest (449) - (449) 111 Group and unallocated (547) (7) (554) 1 045 (548) 3 items (c) BHP Group 368 368 (2 677) (2 309) 31 487 21 921 2 037 (a) Operating profit after income tax is before deducting outside equity interests. (b) Includes the OneSteel business, to be spun-out in the second half of calendar 2000 year. (c) Includes consolidation adjustments. (d) Comparative figures have been restated to reflect the transfer of internal currency hedging results from Minerals, Steel and Petroleum to Group and unallocated items where they now eliminate. 2000 refers to the thirteen months ended 30 June 2000. 1999 refers to the year ended 31 May 1999. Refer 'Change of financial year' on page 12. -- 9 -- Segment results Geographical classification $m Profit after Profit after tax, before Abnormal tax and Gross External Intersegment abnormal items net abnormal segment operating operating items (a) of tax items (a) assets revenue revenue Geographical 2000 classification Australia 1 466 (323) 1 143 17 358 14 573 263 North America 301 (228) 73 2 531 3 299 - United Kingdom 226 - 226 2 225 968 - South America 389 69 458 4 150 1 986 1 Papua New Guinea (9) 80 71 979 1 161 - New Zealand 59 - 59 602 682 - South East Asia 22 - 22 1 030 704 - Other countries 56 - 56 469 245 - 2 510 (402) 2 108 29 344 23 618 264 Net unallocated interest (512) (3) (515) 65 BHP Group 1 998 (405) 1 593 29 344 23 683 264 1999 Australia 933 (96) 837 19 225 14 043 199 North America (236) (2 013) (2 249) 3 135 2 889 27 United Kingdom 71 (75) (4) 2 575 594 5 South America 190 (91) 99 3 394 1 558 33 Papua New Guinea 65 - 65 1 100 859 - New Zealand 15 (105) (90) 697 836 1 South East Asia (29) 70 41 930 786 - Other countries (192) (367) (559) 431 245 - 817 (2 677) (1 860) 31 487 21 810 265 Net unallocated interest (449) - (449) ill BHP Group 368 (2 677) (2 309) 31 487 21 921 265 (a) Operating profit after income tax is before deducting outside equity interests. 2000 refers to the thirteen months ended 30 June 2000. 1999 refers to the year ended 31 May 1999. Refer 'Change of financial year' on page 12. -- 10 -- Issued and quoted securities at end of financial period Paid-up Number Of which value on issue quoted cents Ordinary shares Fully paid 1,781,493,241 1,781,493,241 100 Partly paid 6,286,500 6,286,500 1 Partly paid 415,000 415,000 5 of which issued during period Dividend Investment Plan 21,234,886 21,234,886 100 Bonus Share Plan 3,718,755 3,718,755 100 ESP Options exercised 9,309,031 9,309,031 100 Performance Rights exercised 75,000 75,000 100 Options and Performance Rights Options and Performance Rights Outstanding at Number Shares Month Number of Number issued on Number Balance date of issue issued recipients exercised exercise (1) lapsed Employee Share Plan April 2000 30 000 3 - - - 30 000 April 2000 454 000 5 - - - 454 000 Dec 1999 200 000 1 - - - 200 000 Dec 1999 150 000 1 - - - 150 000 Oct 1999 60 000 6 - - - 60 000 Oct 1999 51 000 3 - - 15 000 36 000 July 1999 100 000 1 - - - 100 000 April 1999 21 536 400 45 595 - - 4 956 200 16 580 200 April 1999 8 184 300 944 - - 822 950 7 361 350 April 1998 177 500 16 - - - 177 500 April 1998 140 000 23 15 000 15 000 5 000 120 000 Nov 1997 7 910 900 16 411 1 712 100 1 712 100 522 000 5 676 800 Nov 1997 1 579 400 3 501 345 000 345 000 106 400 1 128 000 Oct 1997 3 992 000 379 555 750 555 750 105 000 3 331 250 Oct 1997 5 440 000 511 677 000 677 000 18 000 4 745 000 July 1997 395 500 36 - - 24 000 371 500 July 1997 200 000 1 - - - 200 000 Oct 1996 848 100 46 244 000 244 000 186 500 417 600 Oct 1996 1 086 700 66 172 600 172 600 10 000 904 100 April 1996 295 000 5 - - 260 000 35 000 April 1996 45 500 6 18 000 18 000 - 27 500 Oct 1995 17 000 3 - - - 17 000 Oct 1995 38 500 5 5 500 5 500 - 33 000 July 1995 48 000 2 - - - 48 000 July 1995 76 000 9 16 000 16 000 13 000 47 000 May 1995 10 565 900 9 187 4 106 300 4 516 930 6 459 600 - May 1995 2 574 800 194 1 524 728 1 677 201 1 050 072 - May 1994 5 782 100 5 802 4 120 200 4 532 220 1 661 900 - ---------- 42 250 800 ========== Month Date of Director's Exercise of issue Report(2) Price Exercise period (3) Employee Share Plan April 2000 30,000 $17.79 April 2003 - April 2010 April 2000 454,000 $17.78 April 2003 - April 2010 Dec 1999 200,000 $19.87 April 2002 - April 2009 Dec 1999 150,000 $17.58 April 2002 - April 2009 Oct 1999 60,000 $17.72 April 2002 - April 2009 Oct 1999 36,000 $17.71 April 2002 - April 2009 July 1999 100,000 $17.79 April 2002 - April 2009 April 1999 15,798,100 $16.39 April 2002 - April 2009 April 1999 7,112,150 $16.38 April 2002 - April 2009 April 1998 177,500 $15.40 April 2001 - April 2003 April 1998 120,000 $15.39 April 2001 - April 2003 Nov 1997 5,388,250 $16.22 Nov 2000 - Nov 2002 Nov 1997 1,050,900 $16.21 Nov 2000 - Nov 2002 Oct 1997 3,266,000 $15.99 Oct 2000 - Oct 2002 Oct 1997 4,644,300 $15.98 Oct 2000 - Oct 2002 July 1997 357,000 $19.63 July 2000 - July 2002 July 1997 200,000 $19.62 July 2000 - July 2002 Oct 1996 401,600 $16.22 Oct 1999 - Oct 2001 Oct 1996 840,100 $16.21 Oct 1999 - Oct 2001 April 1996 27,500 $18.29 April 1999 - April 2001 April 1996 27,500 $18.28 April 1999 - April 2001 Oct 1995 12,000 $18.23 Oct 1998 - Oct 2000 Oct 1995 11,000 $18.22 Oct 1998 - Oct 2000 July 1995 - $18.59 July 1998 - July 2000 July 1995 - $18.58 July 1988 - July 2000 May 1995 - $19.10 May 1998 - May 2000 May 1995 - $19.09 May 1998 - May 2000 May 1994 - $17.06 May 1997 - May 1999 ----------- 40,463,900 =========== Performance Rights Number Shares Month Number of Number issued on Number Balance date of issue issued recipients exercised exercise (1) lapsed March 1 000 000 1 200,000 175,000 - 800 000 1999 ------- 800,000 ======= Month Date of Director's Exercise of issue Report(2) Price Exercise period (3) March 700,000 - March 1999 - March 2009 1999 ------- 700,000 ======= (1) Shares issued on exercise of performance Rights include shares purchased on market. (2) Following the 1995 bonus issue, holders of options issued in May 1995 and prior received 11 shares for each 10 options exercised. (3) Unexercised options and Performance Rights will expire at the end of the exercise period. 2000 refers to the thirteen months ended 30 June 2000. 1999 refers to the year ended 31 May 1999. Refer 'Change of financial year' on page 12. -- 11 -- Investments in associated entities Details of aggregate share of profits/(losses) of associates 2000 1999(1) Entity's share of associates' $m $m Operating profit/(loss) before income tax 49 Income tax expense (19) ---------------------- 30 ====================== Material interests in entities which are not controlled entities Percentage (%) of ownership Contribution to operating Name of Entity interest held at end of profit/(loss) after income period tax 2000 1999 2000 1999(1) Equity accounted % % $m $m associates Samarco Mineracao S.A. 50 49 46 Orinoco Iron C.A. 50 50 (16) Total (2) ----------------------- 30 ======================= (1) Comparative data has not been provided as AASB 1016: Accounting for Investments in Associates did not apply to the BHP Group for the year ended 31 May 1999. (2) There are no other material interests in entities that are not controlled entities. 2000 refers to the thirteen months ended 30 June 2000. 1999 refers to the year ended 31 May 1999. Refer 'Change of financial year' on page 12. -- 12 -- Significant events after balance date On 28 August 2000 BHP announced a joint cash offer of $1.20 per share for QCT Resources Limited (QCT). QCT holds a non-operating 32.37% interest in the Central Queensland Coal Associates and Gregory joint venture and 100% of the South Blackwater coal mining operation in the Bowen Basin (Queensland). The bidding vehicle, MetCoal Holdings (Qld) Pty Ltd, is 50/50 owned by BHP and Mitsubishi Development Pty Ltd (Mitsubishi). The offer values QCT's equity at $830 million. BHP and Mitsubishi, who own the remaining interests in these joint ventures, have agreed to form a strategic alliance, designed to ensure the future competitiveness of Bowen Basin metallurgical coal assets. This offer is the first step in furthering this alliance. Revised Accounting Standards - Revised Australian Accounting Standard AASB 1004: Revenue was first adopted for the period ended 30 June 2000. There was no material effect on profits. - Revised Australian Accounting Standard AASB 1016: Accounting for Investments in Associates was adopted for the period ended 30 June 2000, resulting in the application of the equity method of accounting for investments in associates. Previously the cost method was used. Change in accounting policies With the exception of the above revised Accounting Standards, the significant accounting policies adopted in the current period are consistent, in all material respects with those applied in the prior year. Change of financial year Directors announced on 17 December 1999 that the financial year end for the BHP Group would change from 31 May to 30 June with effect from 30 June 2000. All subsequent financial years will commence on 1 July and end on 30 June. - Australian Securities and Investments Commission (ASIC) Pursuant to Section 340 of the Corporations Law ('the Law'), ASIC has granted relief from the requirements of paragraph 323D(2)(b) of the Law permitting The Broken Hill Proprietary Company Limited to change its financial year end and adopt a transitional thirteen month financial year of 1 June 1999 to 30 June 2000. - Australian Stock Exchange (ASX) The ASX has provided The Broken Hill Proprietary Company Limited relief from listing rule 4.4 to the extent that an Appendix 4B is not required for the period ended 31 May 2000 following the change in balance date from 31 May to 30 June. This supplementary release for the thirteen months ended 30 June 2000 is in lieu of a 31 May 2000 Appendix 4B. For information contact: Investor Relations: Robert Porter - Vice President Investor Relations (BH) (613) 9609 3540 Mobile (61) 0419 587 456 E-mail: porter.robert.r@bhp.corn.au

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