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BIL
BIBLT
BIL - Bhp Billiton Results For The Year Ended 30 June 2008
and dividend declaration
BHP Billiton Plc
Share code: BIL
ISIN: GB0000566504
18 August 2008
Number 30/08
BHP BILLITON RESULTS FOR THE YEAR ENDED 30 JUNE 2008
* Record attributable profit delivered for the seventh consecutive year.
* Underlying EBITDA up 22.1% to US$28.0 billion and Underlying EBIT up
21.0% to US$24.3 billion.
* Attributable profit up 12.4% to US$15.4 billion and EPS up 17.5%,
benefiting from buy-backs (both measures excluding exceptionals).
* Record Underlying EBIT in the Petroleum, Base Metals, Iron Ore,
Manganese and Energy Coal Customer Sector Groups (CSGs).
* Strong Underlying EBIT margin(6) of 47.5% despite unexpected disruptions
and accelerated cost inflation.
* Return on Capital Employed(7) of 37.5% despite unprecedented level of
capital investments.
* Record net operating cash flow(1) of US$18.2 billion, up 13.8%.
* Annual production records for petroleum, copper, iron ore, manganese ore
and alloy, alumina and molybdenum(2).
* Commissioning of six major growth projects in our high margin oil and
gas, iron ore and manganese businesses expected in 2009.
* Dividend rebased for the second consecutive year, a strong signal of our
confidence in the outlook. Final dividend rebased to 41.0 US cents per
share. We delivered a significant 150.0% increase in annual dividend
over the past three years.
Year ended 30 June 2008 2007
US$M US$M Change
Revenue 59,473 47,473 25.3%
Underlying EBITDA (3) 28,031 22,950 22.1%
Underlying EBIT (3) (4) 24,282 20,067 21.0%
Profit from operations 24,145 19,724 22.4%
Attributable profit - excluding
exceptional items 15,368 13,675 12.4%
Attributable profit 15,390 13,416 14.7%
Net operating cash flow (1) 18,159 15,957 13.8%
Basic earnings per share - excluding
exceptional items (US cents) 274.9 233.9 17.5%
Basic earnings per share (US cents) 275.3 229.5 20.0%
Underlying EBITDA
interest coverage (times) (3)(5) 49.4 43.6 13.3%
Dividend per share (US cents) 70.0 47.0 48.9%
Refer to page 16 for footnotes, including explanations of the non-GAAP
measures used in this announcement.
The above financial results are prepared in accordance with IFRS and are
unaudited. All references to the prior period are to the year ended 30 June
2007 unless otherwise stated.
RESULTS FOR THE YEAR ENDED 30 JUNE 2008
Commentary on the Group Results
A seventh consecutive record
We have achieved another year of record earnings, driven by excellent
operating performance, cost control and the delivery of high margin growth
projects into strong market conditions.
Underlying EBIT increased by 21.0 per cent to US$24.3 billion, with an
excellent margin of 47.5 per cent. Base Metals, Iron Ore, Manganese and
Energy Coal had record Underlying EBIT at a time when prices were high and
the demand outlook remains very strong. In Petroleum, newly commissioned
projects in fiscally stable regimes, 93.8 per cent operational up time and
record high oil prices led to record Underlying EBIT.
Annual production records were set in seven commodities and production
increased in a further six commodities. Strong volume growth has allowed us
to capture the benefits of very high prices. Most of the records were set in
consecutive years, as we reaped the benefit of our drive to deliver
consistent, predictable and sustainable performance across all of our
businesses. This provides a stable platform as we continue to develop and
deliver world class projects that are expected to add significant shareholder
value.
First product was delivered from 10 major projects across five commodities
with a further seven major projects sanctioned, during the year. Neptune
(US), our first operated development in the deepwater Gulf of Mexico (US),
achieved first production on 6 July 2008. All newly commissioned projects
will play a pivotal role in our growth strategy; our commitment of
"resourcing the future".
Our results were outstanding in the context of a challenging supply
environment which was characterised by unexpected disruptions, rising input
prices, skills shortages and the further devaluation of the US dollar.
Our strong performance demonstrates the power of our uniquely diversified and
high margin portfolio across the energy, steelmaking and non-ferrous product
suites. This performance also reflects the success of our unrelenting focus
on our strategy to create lasting shareholder value by owning and operating a
diversified portfolio of upstream, large, long-life, low-cost, expandable,
export-oriented assets.
Resourcing the future
The world is confronting supply constraints for energy and mineral resources.
While there are enough resources to satisfy the world`s appetite, the
industry has not moved quickly enough to meet the growth in demand. We are
continuing our efforts to meet these needs through a deep inventory of growth
options. We have an abundance of tier one resources in fiscally stable
regimes that provide us with a unique set of options to deliver decades of
lower risk brownfield growth. We also have an extensive experience operating
in emerging resource regions and the capability to capture additional
opportunities as they arise. This experience enables us to continue to build
and strengthen our position for long term value creation.
Our gross exploration expenditure was US$1.4 billion for the year ended 30
June 2008. The success of our exploration efforts is evident through the
significant increase in our iron ore and manganese resources and reserves,
and the discovery of the Pampa Escondida copper prospect (Chile). We
increased our exploration expenditure in Petroleum to US$692 million for the
year. We successfully captured significant acreage in two Gulf of Mexico
lease sales; discovered the large Thebe gas field (Australia); and continued
to build a solid portfolio of future growth opportunities in Colombia,
Malaysia, Falklands, Australia and Gulf of Mexico.
On 12 May 2008, we announced an arrangement to acquire Anglo Potash Limited
(completed on 10 July 2008). This has increased our interest in 7,338 square
kilometres of highly prospective exploration permits in the immediate
vicinity of existing major Saskatchewan potash mines from 75 per cent to 100
per cent. Potash will further enhance our diversification.
In addition, BHP Billiton Mitsubishi Alliance (BMA) entered into a
conditional agreement to acquire 100 per cent of the New Saraji Coal Project
for a cash consideration of approximately US$2.4 billion (US$1.2 billion, BHP
Billiton share).
Growth Projects
We continue to invest substantially in our future. Our project pipeline
focuses on high-margin commodities that are expected to create significant
future value. We have 28 projects in either execution or feasibility, which
represents an expected capital investment of US$24.8 billion. We also have
other medium-term growth options with expected capital commitments in excess
of US$90 billion.
During the 2008 financial year we completed 10 major growth projects. In
addition, Neptune (oil and gas) delivered first production on 6 July 2008.
Completed projects
Customer Project Capacity (iv) Capital Date of initial
Sector expenditure production (i)
Group (US$ million)
(iv)
Budget Actual Target Actual
Base Pinto 70,000 tonnes 140 144 Q4 2007 Q4 2007
Metals Valley per annum of
(US) copper in
BHP concentrate
Billiton -
100%
Petroleum Atlantis 200,000 1,630 1,630 H2 2007 H2 2007
South barrels of (iii) (ii) (iii)
(US) oil and 180
BHP million cubic
Billiton - feet of gas
44% per day
(100%)
Stybarrow 80,000 380 389 Q1 2008 Q4 2007
(Australia) barrels of
BHP oil per day
Billiton - (100%)
50%
Genghis 55,000 365 365 H2 2007 H2 2007
Khan barrels of (ii)
(US) oil per day
BHP (100%)
Billiton -
44%
Neptune 50,000 405 418 Q1 2008 Q3 2008
(US) barrels of (iii)
BHP oil and 50
Billiton - million cubic
35% feet of gas
per day
(100%)
Iron Ore WA Iron Ore 20 million 1,300 1,300 Q4 2007 Q4 2007
Rapid tonnes per (ii)
Growth annum of iron
Project 3 ore
(Australia) (100%)
BHP
Billiton -
85%
Samarco 7.6 million 590 740 H1 2008 H1 2008
(Brazil) tonnes per (ii)
BHP annum of iron
Billiton - pellets
50% (100%)
Stainless Ravensthorp Up to 50,000 2,200 2,086 Q1 2008 Q4 2007
Steel e Nickel tonnes per (iii) (ii)
Materials (Australia) annum of
BHP contained
Billiton nickel in
-100% concentrate
Yabulu 45,000 tonnes 556 580 Q1 2008 Q1 2008
Extension per annum of (iii) (iii)
(Australia) nickel
BHP
Billiton -
100%
Cliffs 360,000 139 139 H1 2008 H1 2008
(Australia) tonnes per (ii) (iii)
BHP annum nickel
Billiton - ore
100%
Diamonds Koala 3,300 tonnes 200 176 End End 2007
and Underground per day of 2007
Specialty (Canada) ore processed
Products BHP (100%)
Billiton -
80%
7,905 7,967
(i) References to quarters and half-years are based on calendar years.
(ii) Number subject to finalisation. For projects where capital expenditure
is required after initial production, the costs represent the estimated total
capital expenditure.
(iii) As per revised budget or schedule.
(iv) All references to capital expenditure and capacity are BHP Billiton`s
share unless noted otherwise.
Projects currently under development (approved in prior years)
Customer Sector Project Capacity (i) Budgeted Target
Group capital date for
expenditure initial
(US$ production
million) (ii)
(i)
Petroleum North West LNG
Shelf 5th processing 350 Late 2008
Train capacity 4.2
(Australia) million
BHP Billiton - tonnes per
16.67% annum (100%)
North West 800 million
Shelf Angel cubic feet 200 End 2008
(Australia) of gas per
BHP Billiton - day and
16.67% 50,000
barrels of
condensate
per day
(100%)
Shenzi (US) 100,000
BHP Billiton - barrels of 1,940 Mid 2009
44% oil and 50
million
cubic feet
of gas per
day (100%)
Pyrenees 96,000
(Australia) barrels of 1,200 H1 2010
BHP Billiton - oil and 60
71.43% million
cubic feet
gas per day
(100%)
Aluminium Alumar 2 million
Refinery tonnes per 725 Q2 2009
Expansion annum of
(Brazil) alumina
BHP Billiton - (100%)
36% (iii)
Iron Ore WA Iron Ore 26 million
Rapid Growth tonnes per 1,850 H1 2010
Project 4 annum of
(Australia) iron ore
BHP Billiton - (100%)
86.2%
6,265
(i) All references to capital expenditure and capacity are BHP Billiton`s
share unless noted otherwise.
(ii) References to quarters and half-years are based on calendar years.
(iii) Schedule and budget are under review following advice from the
Operator.
Projects approved since 30 June 2007
Customer Sector Project Capacity (i) Budgeted Target
Group capital date for
expenditure initial
(US$ production
million) (ii)
(i)
Petroleum Bass Strait 10,000 bpd
Kipper condensate 500 2011
(Australia) and
BHP Billiton - processing
32.5% - 50% capacity of
80 million
cubic feet
gas per day
(100%)
Bass Strait 11,000 bpd
Turrum condensate 625 2011
(Australia) and
BHP Billiton - processing
50% capacity of
200 million
cubic feet
gas per day
(100%)
North West 2,500
Shelf North million 850 2012
Rankin B cubic feet
(Australia) gas per day
BHP Billiton - (100%)
16.67%
Aluminium Worsley 1.1 million
Efficiency and tonnes per 1,900 H1 2011
Growth annum (100%)
(Australia)
BHP Billiton -
86%
Manganese Gemco 1 million
(Australia) tonnes per 110 H1 2009
BHP Billiton - annum
60% manganese
concentrate
(100%)
Energy Coal Klipspruit 1.8 million
(South Africa) tonnes per 450 H2 2009
BHP Billiton annum export
- 100% coal. 2.1
million
tonnes per
annum
domestic
Douglas- 10 million
Middelburg tonnes per 975 Mid 2010
Optimisation annum export
(South Africa) thermal coal
BHP Billiton and 8.5
- 100% million
tonnes per
annum
domestic
thermal coal
(sustains
current
output)
Newcastle Third coal
Third Export berth, 30 390 Late 2010
Coal Terminal million
(Australia) tonnes per
BHP Billiton - annum (100%)
35.5%
5,800
(i) All references to capital expenditure and capacity are BHP Billiton`s
share unless noted otherwise.
(ii) References to half-years and years are based on calendar years.
In addition to the above projects the Board approved pre-expenditure of
US$930 million for Rapid Growth Project 5 (Western Australia Iron Ore).
Dividend and Capital Management
The Board today declared a final dividend of 41.0 US cents per share, the
thirteenth consecutive dividend increase. Today`s declaration is a strong
signal of our confidence in the outlook and our ability to consistently
deliver future earnings and cash flow.
For the second consecutive year we have rebased our dividend. Today`s
dividend is a significant 51.9 per cent increase over last year`s final
dividend of 27.0 US cents per share. The total dividends for the 2008
financial year increased to 70.0 US cents per share, an increase of 23.0 US
cents per share, or 48.9 per cent, over last year and 150.0 per cent over the
past three years.
Our dividend has increased by more than 530 per cent since the interim
dividend paid in 2002. Our compound dividend growth rate has been 32.3 per
cent over the same period. We intend to continue with our progressive
dividend policy from our new base, with further increases dependent upon the
expectations for future market conditions and investment opportunities.
We continued to purchase shares under the previously announced US$13 billion
buy-back program during the year. We repurchased and cancelled 96,904,086 BHP
Billiton Plc shares, via on-market buy-backs, at an approximate average price
of US$31.57 (A$36.46 / GBP 15.51). These shares were purchased via an
independent third party under an irrevocable mandate. When the mandate
expired on 14 December 2007, the buy-back program was suspended. The
suspension was due to the fact that we are prohibited under the insider
trading and market abuse laws in the UK from buying back shares following the
expiry of the mandate, as we are in possession of insider information in
relation to the Rio Tinto pre-conditional offer. At the time of the
suspension, we had returned US$8.8 billion of the US$13 billion.
Since August 2004 we have announced capital management initiatives totalling
US$17 billion. Since the first buy-back in 2004, 680 million shares have been
repurchased, representing approximately 11 per cent of the total shares on
issue at an approximate average price of US$18.53 (A$23.25 / GBP 9.57).
The Income Statement
To provide clarity into the underlying performance of our operations, we
present Underlying EBIT which is a measure used internally and in our
Supplementary Information that excludes any exceptional items. The
differences between Underlying EBIT and Profit from operations are set out in
the following table:
Year ended 30 June 2008 2007
US$M US$M
Underlying EBIT 24,282 20,067
Exceptional items (before taxation) (137) (343)
Profit from operations 24,145 19,724
Underlying EBIT
The following table and commentary describes the approximate impact of the
principal factors that affected Underlying EBIT for the year ended 30 June
2008 compared with last year:
US$ Million
Underlying EBIT for the year ended 30 June 2007 20,067
Change in volumes:
Increase in volumes 805
Decrease in volumes (596)
New operations 1,619
1,828
Net price impact:
Change in sales prices 6,693
Price-linked costs (134)
6,559
Change in costs:
Costs (rate and usage) (1,183)
Exchange rates (1,133)
Inflation on costs (532)
(2,848)
Asset sales 28
Ceased and sold operations (154)
Exploration and business development (404)
Other (794)
Underlying EBIT for the year ended 30 June 2008 24,282
Volumes
Strong volume growth reflected our commitment to deliver more product, more
quickly to our customers. During the year we delivered strong growth in
sales volumes, allowing us to take advantage of continued strong customer
demand.
Newly commissioned petroleum projects and the continued ramp up of the Spence
(Chile) and Pinto Valley copper projects contributed US$1,619 million to
Underlying EBIT.
Higher sales volumes of copper, iron ore, manganese ore, energy coal,
diamonds, alumina, and aluminium increased Underlying EBIT by US$805 million.
This was partially offset by lower nickel and metallurgical coal volumes, as
well as oil and gas volumes from existing operations.
Prices
Net changes in price increased Underlying EBIT by US$6,693 million (excluding
the impact of newly commissioned projects). This was due to higher iron ore,
oil, manganese, energy coal and base metals prices.
Higher price-linked costs reduced Underlying EBIT by US$134 million primarily
due to higher royalties and LME-linked aluminium costs. This was offset by
decreased charges for third party nickel ore and more favourable rates for
copper treatment and refining charges (TCRCs).
Costs
Strong global demand for resources continues to provide cost challenges for
the whole industry. This is mainly due to rising prices for inputs such as
diesel, coke and explosives, and shortages of skilled labour. However, our
world class ore bodies, strong supplier relationships, internal systems and
the capabilities of our people have provided some relief against significant
cost pressures.
In this challenging environment, costs for the Group have increased by
US$1,183 million. The rate of cost increase on the June 2007 total cost base
was 4.3 per cent, excluding non-cash costs of US$216 million. In the current
tight market conditions, this rate of increase is an outstanding performance.
Approximately US$575 million of the increase in costs was due to higher fuel
and energy and raw materials costs. Severe weather interruptions in
Queensland also had an adverse cost impact. Other areas that had a cost
impact included labour and contractor charges, shipping and freight costs.
Our continued focus on Business Excellence has delivered US$225 million of
cost reduction.
Exchange rates
Exchange rate movements had a negative impact on Underlying EBIT of US$1,133
million. All Australian operations were adversely impacted by the stronger
Australian dollar, which reduced Underlying EBIT by US$986 million. The
appreciation of South American currencies against the US dollar also
adversely impacted Underlying EBIT by US$158 million.
The following exchange rates against the US dollar have been applied:
Year ended Year ended
30 June 2008 30 June 2007 30 June 2008 30 June 2007
average average closing closing
Australian 0.90 0.79 0.96 0.85
dollar (i)
Chilean peso 489 534 522 528
Colombian 1,935 2,247 1,899 1,960
peso
Brazilian 1.78 2.10 1.60 1.93
real
South 7.29 7.20 7.91 7.08
African rand
(i) Displayed as US$ to A$1 based on common convention.
Inflation on costs
Inflationary pressures on input costs across all our businesses had an
unfavourable impact on Underlying EBIT of US$532 million. The inflationary
pressures were most evident in Australia and South Africa.
Asset Sales
The sale of assets increased Underlying EBIT by US$28 million. This was
mainly due to the sale of the Elouera mine (Illawarra Coal, Australia) and
other Queensland Coal mining leases. Asset sales in the corresponding period
included the sale of one million tonnes of annual capacity at the Richards
Bay Coal Terminal (South Africa), Moranbah Coal Bed Methane assets
(Australia), the Koornfontein energy coal mine (South Africa), and the
interest in Eyesizwe coal mine in South Africa.
Ceased and sold operations
The unfavourable impact of US$154 million was mainly due to insurance
recoveries and movements in the restoration and rehabilitation provisions for
closed operations in the corresponding period.
Exploration and business development
We continued to focus on finding new long-term growth options for the
business. Exploration expense was US$906 million for the year, an increase of
US$284 million. We increased activity on nickel targets in Western Australia,
Guatemala, Indonesia and the Philippines, on diamond targets in Angola and
iron ore targets in Western Australia. The main expenditure for the Petroleum
CSG was on targets in the Gulf of Mexico, Colombia and Australia.
Expenditure on business development was US$119 million higher than last year.
This was mainly due to the pre-feasibility study on the Olympic Dam expansion
along with earlier stage activities in Base Metals and iron ore.
Other
Other items decreased Underlying EBIT by US$794 million. The start-up of
operations at Ravensthorpe and the Yabulu Expansion Project (both Australia)
adversely impacted earnings by US$313 million and contribution of third party
trading was US$458 million lower compared to last year.
Net finance costs
Net finance costs increased to US$662 million, from US$512 million in the
corresponding period. This was driven predominantly by lower capitalised
interest and foreign exchange impacts.
Taxation expense
The total taxation expense on profit before tax was US$7,521 million,
representing an effective rate of 32.0 per cent.
Excluding the impacts of royalty-related taxation, non tax-effected foreign
currency adjustments, translation of tax balances and other functional
currency translation adjustments and exceptional items the underlying
effective rate was 30.4 per cent compared to the UK and Australian statutory
tax rate (28.0 and 30.0 per cent respectively). Royalty-related taxation
represents an effective rate of 3.1 per cent for the current period.
Exceptional Items
Tax losses incurred by WMC Resources Limited (WMC), acquired by BHP Billiton
in June 2005, were not recognised as a deferred tax asset at acquisition
pending a ruling application to the Australian Tax Office. A ruling was
issued during the year confirming the availability of those losses. This
resulted in the recognition of a deferred tax asset (US$197 million) and a
consequential adjustment to deferred tax liabilities (US$38 million) through
income tax expense at current Australian dollar / US dollar exchange rates.
As a further consequence the Group has recognised an expense for a
corresponding reduction in goodwill measured at the Australian dollar / US
dollar exchange rate at the date of acquisition.
Gross Tax Net
Year ended 30 June 2008 US$M US$M US$M
Exceptional items by category
Recognition of benefit of tax losses in (137) 159 22
respect of the acquisition of WMC and
consequent reduction in goodwill
(137) 159 22
Exceptional items by Customer Sector
Group
Base Metals (99) (34) (133)
Stainless Steel Materials (38) (4) (42)
Group and unallocated - 197 197
(137) 159 22
Refer note 3 in the Financial Information for further details.
Cash Flows
Net operating cash flow after interest and tax increased by 13.8 per cent to
US$18,159 million. Higher profits increased cash generated from operating
activities, offset by an increase in working capital (principally due to
higher prices) and increased taxation payments.
Capital and exploration expenditure totalled US$8,908 million for the period.
Expenditure on major growth projects was US$5,339 million, including US$1,571
million on Petroleum projects and US$3,768 million on Minerals projects.
Capital expenditure on maintenance, sustaining and minor capital items was
US$2,219 million. Exploration expenditure was US$1,350 million, including
US$491 million which has been capitalised.
Financing cash flows include US$6,250 million in relation to the share buy-
backs and increased dividend payments.
Net debt, comprising cash and interest-bearing liabilities, was US$8,458
million, a decrease of US$1,513 million, or 15.2 per cent, compared to 30
June 2007. Gearing, which is the ratio of net debt to net debt plus net
assets, was 17.8 per cent at 30 June 2008, compared with 25.0 per cent at 30
June 2007.
Dividend
A final dividend for the year ended 30 June 2008 of 41.0 US cents per share
will be paid to shareholders on 25 September 2008. Together with the interim
dividend of 29.0 US cents per share paid to shareholders on 18 March 2008,
this brings the total dividend for the year to 70.0 US cents per share.
The dividend paid by BHP Billiton Limited will be fully franked for
Australian taxation purposes. Dividends for the BHP Billiton Group are
determined and declared in US dollar. However, BHP Billiton Limited dividends
are mainly paid in Australian dollar, and BHP Billiton Plc dividends are
mainly paid in pounds sterling and South African rand to shareholders on the
UK section and the South African section of the register, respectively.
Currency conversions were based on the foreign currency exchange rates two
business days before the declaration of the dividend. Please note that all
currency conversion elections had to have occurred by the Currency Conversion
Date, being 14 August 2008. Any currency conversion elections made after
this date will not apply to this dividend.
The timetable in respect of this dividend will be:
Currency conversion - 14 August 2008
Last day to trade cum dividend on JSE Limited - 29 August 2008
Ex-dividend Australian Stock Exchange - 1 September 2008
Ex-dividend JSE Limited - 1 September 2008
Ex-dividend London Stock Exchange - 3 September 2008
Record - 5 September 2008
Payment - 25 September 2008
American Depositary Shares (ADSs) each represent two fully paid ordinary
shares and receive dividends accordingly.
BHP Billiton Plc shareholders registered on the South African section of the
register will not be able to dematerialise or rematerialise their
shareholdings, nor will transfers between the UK register and the South
African register be permitted, between the dates of 1 September 2008 and 5
September 2008.
The following table details the currency exchange rates applicable for the
dividend:
Dividend 41.0 US Exchange Rate Dividend per ordinary
cents share in local currency
Australian cents 0.874160 46.902169
British pence 1.871944 21.902365
South African cents 7.832735 321.142135
New Zealand cents 0.702400 58.371298
Portfolio Management
Portfolio management activities continued during the period with proceeds
amounting to US$180 million being realised from divestments including the
Elouera coal mine (Illawarra Coal Operation, Australia). Other disposals
include mining leases at Poitrel (Queensland Coal, Australia) and Optimum
Colliery (South Africa). Proceeds from the sale or distribution of our assets
and interests since 2001 surpass US$6 billion.
On 12 May 2008, we announced an arrangement to acquire Anglo Potash Limited
which was subsequently completed on 10 July 2008. In addition, BHP Billiton
Mitsubishi Alliance (BMA) entered into a conditional agreement to acquire 100
per cent of the New Saraji Coal Project for a cash consideration of
approximately US$2.4 billion (US$1.2 billion, BHP Billiton share).
Debt Management and Liquidity
No long-term debt securities were issued in the debt capital markets during
the current period. The Group continues to manage its short-term liquidity by
issuing commercial paper in the US market and drawing down from its US$3.0
billion Revolving Credit Facility, which expires in October 2011. Our
liquidity position is supported by our strong and stable credit rating and
committed debt facilities.
Corporate Governance
The following Board changes occurred during the period:
Mr Charles (Chip) Goodyear resigned as an Executive Director of both BHP
Billiton Limited and BHP Billiton Plc on 30 September 2007.
Dr David Brink retired from the Boards of BHP Billiton Limited and BHP
Billiton Plc at the conclusion of the Annual General Meeting of BHP Billiton
Limited on 28 November 2007.
On 17 December 2007, the Board announced the appointment of Dr David Morgan
as a Non-executive Director of BHP Billiton Limited and BHP Billiton Plc with
effect from 1 January 2008.
On 14 August 2008, the Board announced the appointment of Mr Alan Boeckmann
and Mr Keith Rumble as Non-executive Directors of BHP Billiton Limited and
BHP Billiton Plc with effect from 1 September 2008.
Outlook
Global macroeconomic outlook
The global economy has remained resilient in the face of significant
structural weaknesses in developed economies. The continuing massive
industrialisation in China is providing solid support to the global economy.
Over the past financial year there has been considerable weakening in most
major developed economies. The deflation of asset values within these
economies has led to a reduction in wealth effect for consumers. This appears
to have ended the past decade`s unsustainable consumer debt driven economic
growth, particularly in the US.
However, a direct spill over into emerging market economies has remained
largely contained. Emerging market economies have contributed more than their
industrial counterparts to global growth since the year 2000. Led by China
and India, economic growth in these economies has been strong with solid
support from growth in domestic demand and strong trading activity with other
emerging market economies.
We expect short term global economic growth to slow as developed economies
experience further weakening in the coming quarters. Liquidity is likely to
remain low, and risk premia high for some time into the future. Rising
inflation, particularly in food and energy, alongside weakening economic
growth has restricted the flexibility of central banks to inject liquidity
and stimulate their economies.
Higher inflation will also have a likely negative impact on emerging market
economies through their adoption of tighter monetary policies. However,
emerging market economies should remain relatively strong on the back of
continued domestic infrastructure investment and regional trade. While short-
term disruptions may occur, we expect that their long-term economic growth
will remain robust as they continue on the path to industrialisation.
Commodities outlook
The 2008 financial year has seen higher average prices for most of our major
commodities, than in the prior year. Demand for raw materials in the emerging
market economies has remained strong. In particular, China remains a key
driver of global commodity consumption through its position as a net importer
of raw materials. China`s competitiveness and ability to innovate in
downstream processing has been demonstrated again with sustained nickel pig
iron production.
In light of differing activity for the developed and emerging market
economies, there have been mixed spot prices for key commodities. In
particular, bulk and energy related commodities have tended to outperform the
LME traded metals. The effects of current weaknesses in the developed
economies on demand for our commodities should be minimal driven by ongoing
strong demand from the emerging economies. Meanwhile, supply side pressures
remain high. This has led to overestimation of the supply side response, and
thus, price outcomes regularly being underestimated by industry observers. In
the short-term, we expect prices to remain high relative to historical
levels, albeit with higher volatility.
Looking to the longer term, demand for our commodities is expected to remain
strong. We expect that higher long-run raw materials and energy prices and
stronger producer currencies should place upward pressure on industry supply
costs, and hence, prices of minerals commodities. We continue to expect that
commodity prices will be driven by long-run marginal cost of supply.
Annual General Meetings
The Annual General Meeting of BHP Billiton Plc will be held at the Queen
Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P
3EE, UK, on Thursday 23 October 2008, commencing at 10:30am.
The Annual General Meeting of BHP Billiton Limited will be held at the
Melbourne Park Function Centre, Batman Avenue, Melbourne, Australia on
Thursday 27 November 2008, commencing at 10.30am.
Nominations for election as a director of BHP Billiton Limited and BHP
Billiton Plc will be accepted up until 4.30pm (Melbourne time) on 10
September 2008, and should be lodged at the registered offices.
The Annual Report and details of the business to be conducted at the meetings
will be provided to shareholders in mid to late September 2008.
CUSTOMER SECTOR GROUP SUMMARY
The following table provides a summary of the performance of the Customer
Sector Groups for the year ended 30 June 2008 and last year.
Year ended 30 June
(US$ Million) Revenue Underlying EBIT (i)
2008 2007 Change % 2008 2007 Change %
Petroleum 9,547 5,885 62.2 5,489 3,014 82.1
Aluminium 5,746 5,879 (2.3) 1,465 1,856 (21.1)
Base Metals 14,774 12,635 16.9 7,989 6,875 16.2
Diamonds and
Specialty
Products 969 893 8.5 189 197 (4.1)
Stainless Steel
Materials 5,088 6,901 (26.3) 1,275 3,675 (65.3)
Iron Ore 9,455 5,524 71.2 4,631 2,728 69.8
Manganese 2,912 1,244 134.1 1,644 253 549.8
Metallurgical
Coal 3,941 3,769 4.6 937 1,247 (24.9)
Energy Coal 6,560 4,576 43.4 1,057 481 119.8
Group and
unallocated
items (ii) 1,406 770 82.6 (394) (259) N/A
Less: inter-segment
Turnover (925) (603) N/A - - -
BHP Billiton Group 59,473 47,473 25.3 24,282 20,067 21.0
(i) Underlying EBIT includes trading activities comprising the sale of third
party product. Underlying EBIT is reconciled to Profit from operations on
page 5
(ii) Includes consolidation adjustments, unallocated items and external sales
from the Group`s freight, transport and logistics operations.
Petroleum
Underlying EBIT was a record US$5,489 million, an increase of US$2,475
million, or a significant 82.1 per cent, compared to last year.
Record production and a 13 per cent year on year volume growth is a strong
start to our expected 10 per cent compound annual growth rate through to
financial year 2011. Strong growth in production was achieved due to the
newly commissioned Stybarrow (Australia), Genghis Khan and Atlantis (both
US), excellent operated performance and record natural gas volumes. Ramp up
of these projects and future growth options will continue to increase the
weighting of high margin liquids in our portfolio mix.
Underlying EBIT was positively impacted by higher average realised oil prices
per barrel of US$96.27 (compared with US$63.87), higher average realised
natural gas prices of US$3.87 per thousand standard cubic feet (compared with
US$3.19) and higher average realised prices for liquefied natural gas of
US$8.95 per thousand standard cubic feet (compared with US$6.97).
Gross exploration expenditure was US$692 million, US$297 million higher than
last year. Exploration expenditure charged to profit was US$359 million,
including US$47 million of previously capitalised exploration now written
off. During the year, we successfully captured significant acreage in the
Gulf of Mexico lease sale process, made the large Thebe gas discovery
(offshore Australia) and continued to build a solid portfolio of
opportunities with seismic data acquired in Colombia, Malaysia, Falklands,
Australia and the deepwater Gulf of Mexico.
In addition, for the second consecutive year we achieved greater than 100 per
cent reserve replacement.
Aluminium
Underlying EBIT was US$1,465 million, a decrease of US$391 million or 21.1
per cent over the corresponding period. Unfavourable exchange rate movements
as a result of a weaker US dollar and foreign exchange gains in the prior
period associated with the Alumar (Brazil) refinery expansion had a negative
impact on Underlying EBIT.
Inflationary pressures and industry wide costs escalation for energy and
fuel, coke, pitch and caustic soda had an adverse impact on earnings. The
costs for the closure of the B and C potlines at Bayside (South Africa) also
reduced Underlying EBIT. However, an intensive focus on cost containment
through various Business Excellence initiatives mitigated the full impact of
cost increases.
Full year production records were achieved at Worsley (Australia), Paranam
(Suriname) and Alumar. However, Southern African smelters operated at reduced
levels to comply with the mandatory reduction in power consumption.
The average LME aluminium price of US$2,668 per tonne was in line with last
year`s price of US$2,692 per tonne.
Base Metals
Underlying EBIT was US$7,989 million, an increase of US$1,114 million, or
16.2 per cent, over the corresponding period. Copper production was a record
for the third consecutive year, largely due to the continued ramp-up of
Spence and the Escondida Sulphide Leach Project (both Chile) and the
commissioning of Pinto Valley concentrate operations. This record was
achieved despite two earthquakes in Chile, unplanned SAG mill outages at
Antamina (Peru) and lower volumes at Olympic Dam (Australia).
Higher average prices for copper, lead, silver, molybdenum and gold increased
Underlying EBIT, partially offset by lower average zinc prices. Lower TCRCs
also positively impacted Underlying EBIT.
Price and volume gains were partially offset by higher costs, mostly due to
higher energy, shipping, fuel, sulphuric acid and labour charges. The effect
of inflation and the weaker US dollar against the Australian dollar and
Chilean peso also impacted negatively. Higher costs were partially mitigated
by cost reductions achieved through several Business Excellence projects. In
addition, the Olympic Dam Expansion pre-feasibility study expenditures have
increased as the project studies progress. Underlying EBIT was also impacted
by the purchase of third party uranium from the spot market to meet
contractual requirements.
Provisional pricing of outstanding copper shipments, including the impact of
finalisations, resulted in the average realised price for the reporting
period being US$3.62/lb versus an average LME price of US$3.53/lb. The
average realised price was US$3.24/lb in the corresponding period last year.
The positive impact of provisional pricing and finalisations for the period
was US$225 million. Outstanding copper volumes, subject to the fair value
measurement, amounted to 327,941 tonnes at 30 June 2008. These were re-
valued at a weighted average price of US$8,555 per tonne.
Diamonds and Specialty Products
Underlying EBIT was US$189 million, a decrease of US$8 million, or 4.1 per
cent compared with last year. Strong operating earnings at Ekati (Canada)
resulted from higher realised diamond prices and lower unit costs mainly due
to higher value per carat and higher grade underground production, tight cost
control and improved plant recoveries. Higher earnings were offset by an
increase in exploration and development expense for diamonds (Angola), potash
(Canada) and titanium minerals (Mozambique) and unfavourable exchange rate
movements for the Canadian dollar against the US dollar.
Stainless Steel Materials
Underlying EBIT was US$1,275 million, a decrease of US$2,400 million or 65.3
per cent, compared with the corresponding period. This was mainly due to
lower average LME prices for nickel of US$13.00/lb (compared to US$17.21/lb).
Lower prices (net of price-linked costs) reduced Underlying EBIT by US$1,021
million. The positive impact on price-linked costs was US$367 million.
Higher operating costs had an adverse impact and were largely due to a
strengthening Australian dollar and higher charges for fuel, energy and
labour reflecting industry wide cost pressures. Costs were also impacted by
the start up of operations at Ravensthorpe and the Yabulu Expansion Project,
higher use of third party ore at Nickel West (Australia) and increased
exploration activity in Australia, South America and Asia.
In addition, sales volumes decreased reflecting lower production volumes.
Production was impacted by an industrial stoppage at Cerro Matoso (Colombia),
wet weather interruptions at Yabulu, scheduled maintenance across all
operations and the shutdown of the Kalgoorlie Nickel Smelter (Australia) for
a furnace rebuild.
Iron Ore
Underlying EBIT of US$4,631 million increased significantly by US$1,903
million or 69.8 per cent, mainly driven by higher iron ore prices and sales
volumes.
An eighth consecutive production record was achieved at our Western Australia
Iron Ore operations, following the successful commissioning of the RGP3
project and business improvement initiatives. Samarco (Brazil) operations
also achieved record production as a result of production efficiencies and
commissioning of the third pellet plant. Record sales volumes reflected
business improvement initiatives undertaken to enhance shipping efficiency.
Higher operating costs were largely attributable to the weaker US dollar
against the Australian dollar and Brazilian real, higher price linked ore
costs, fuel, freight and demurrage. In the face of tight labour conditions
and rising input prices, our Western Australia Iron Ore operations held
domestic currency cash production costs to only a three per cent increase. A
number of cost saving initiatives such as negotiation of contract mining
rates and strategic sourcing of input materials and services have mitigated
the full impact of external cost pressures on the business.
Depreciation was higher, due to the successful commissioning of a series of
expansions at Western Australia Iron Ore.
Manganese
Underlying EBIT was US$1,644 million, a significant increase of US$1,391
million or 549.8 per cent compared to the year ended 30 June 2007. This
increase was mainly due to higher sales prices achieved for alloy and ore as
well as record manganese ore and alloy sales volumes.
Manganese alloy production at 775,000 tonnes was 5.9 per cent higher than the
previous year mainly as a result of operating efficiencies at the alloy
plants and reduced down time for major rebuilds. Production was slightly
offset by Metalloys Plant (South Africa) operating at lower levels to comply
with the mandatory reduction in power consumption. Manganese ore production
was 6.6 million tonnes, an increase of 9.4 per cent compared to the
corresponding period. Both were production records.
This positive result was slightly offset by increased distribution costs,
unfavourable exchange rate impacts and higher ore development, coke and
labour costs. A portion of the increase in costs was deliberately incurred to
maximise production to take advantage of the high prices.
Metallurgical Coal
Underlying EBIT was US$937 million, a decrease of US$310 million, or 24.9 per
cent from the same period last year. The decrease in Underlying EBIT was
mainly due to the significant rainfall events in January and February 2008,
which unfavourably impacted sales volumes at Queensland Coal (Australia).
This was partially offset by an increase in volumes from the full year of
production from the Poitrel (Australia) mine.
Costs attributable to the recovery from the rainfall events at Queensland
Coal were approximately US$40 million in the period, with an additional US$80
million of cost inefficiencies associated with lower volumes. Recovery
efforts continue and on average, mines are operating at approximately 90 per
cent capacity.
Other operating costs were higher due to increased demurrage and labour costs
which were offset by improved mining conditions and operating efficiencies at
Illawarra Coal. A weaker US dollar against the Australian dollar and
inflationary pressures also had an unfavourable impact on Underlying EBIT.
Higher average realised prices for metallurgical coal (3 per cent) and
thermal coal (52 per cent) had a favourable impact on the Underlying EBIT.
Profits on the sale of the Elouera mine and the sale of mining leases to
Millennium were realised in the current period.
Energy Coal
Underlying EBIT was US$1,057 million, an increase of US$576 million, or 119.8
per cent, from last year. This was due to higher export prices from continued
strong demand in the Atlantic and Pacific markets, record production at
Hunter Valley Coal (Australia) and Cerrejon Coal (Colombia) and weakening of
the South African rand against the US dollar.
Price and volume gains were partially offset by higher costs due to
inflationary pressures, weakening of the US dollar against the Australian
dollar and Colombian peso, and increased diesel, labour and contractors,
maintenance and demurrage costs. Lower earnings from trading activities also
negatively impacted Underlying EBIT.
The purchase price adjustments associated with the sale of the Optimum asset,
and the cessation of contribution from the Koornfontein mine (South Africa)
following its divestment last year also reduced Underlying EBIT. The
comparative period included US$67 million profit on the sale of Koornfontein,
Eyesizwe investment and Richards Bay Coal Terminal entitlement.
Group and Unallocated items
Underlying net corporate operating costs were US$394 million compared to
US$259 million in the corresponding period, an increase of US$135 million.
This was mainly due to the negative impacts of the stronger Australian dollar
which increased costs by US$94 million. Higher costs for corporate projects
and sponsorships also had an adverse impact.
The following notes explain the terms used throughout this profit release:
(1) Net operating cash flows are after net interest and taxation.
(2) Unless otherwise stated, production volumes exclude suspended and sold
operations.
(3) Underlying EBIT is earnings before net finance costs and taxation and
any exceptional items. Underlying EBITDA is Underlying EBIT before
depreciation, impairments, and amortisation of US$3,749 million
(excluding exceptional items of US$137 million) for the year ended 30
June 2008 and US$2,883 million for the year ended 30 June 2007
(excluding exceptional items of US$176 million). From 1 July 2007, the
Group adopted the accounting policy of recognising its proportionate
interests in the assets, liabilities, revenues and expenses of jointly
controlled entities rather than equity accounting its interest. Jointly
controlled entities` net finance costs and taxation are therefore
included in their respective line items and are no longer reconciling
items between profit from operations and Underlying EBIT or Underlying
EBITDA. Comparative information has been restated on this basis, however
the change did not result in a change to comparative Underlying EBIT and
Underlying EBITDA information contained within this profit release.We
believe that Underlying EBIT and Underlying EBITDA provide useful
information, but should not be considered as an indication of, or
alternative to, attributable profit as an indicator of operating
performance or as an alternative to cash flow as a measure of liquidity.
(4) Underlying EBIT is used to reflect the underlying performance of BHP
Billiton`s operations. Underlying EBIT is reconciled to Profit from
operations on page 5.
(5) Net interest includes capitalised interest and excludes the effect of
discounting on provisions and other liabilities, fair value change on
hedged loans, net of hedging derivatives, exchange differences arising
from net debt and return on pension plan assets.
(6) Underlying EBIT margin is calculated net of third party product
activities.
(7) Return on Capital Employed is calculated as earnings from operations
excluding exceptional items and net finance costs (after tax), divided
by average capital employed. Average capital employed is calculated as
net assets less net debt.
Forward-looking statements: Certain statements in this presentation are
forward-looking statements, including statements regarding the cost and
timing of development projects, future production volumes, increases in
production and infrastructure capacity, the identification of additional
mineral Reserves and Resources and project lives and, without limitation,
other statements typically containing words such as "intends," "expects,"
"anticipates," "targets," plans," "estimates" and words of similar import.
These statements are based on current expectations and beliefs and numerous
assumptions regarding BHP Billiton`s present and future business strategies
and the environments in which BHP Billiton will operate in the future and
such assumptions, expectations and beliefs may or may not prove to be correct
and by their nature, are subject to a number of known and unknown risks and
uncertainties that could cause actual results, performance and achievements
to differ materially.
Factors that could cause actual results or performance to differ materially
from those expressed or implied in the forward-looking statements include,
but are not limited to, the risk factors discussed in BHP Billiton`s filings
with the U.S. Securities and Exchange Commission ("SEC") (including in Annual
Reports on Form 20-F) which are available at the SEC`s website
(http://www.sec.gov). Save as required by law or the rules of the UK Listing
Authority and the London Stock Exchange, the UK Takeover Panel, or the
listing rules of ASX Limited, BHP Billiton undertakes no duty to update any
forward-looking statements in this presentation.
This presentation is for information purposes only and does not constitute or
form part of any offer for sale or issue of any securities or an offer or
invitation to purchase or subscribe for any such securities
References in this presentation to "$" are to United States dollars unless
otherwise specified.
FINANCIAL INFORMATION
For the year ended 30 June 2008
CONTENTS
Financial Information
Consolidated Income Statement - Page 19
Consolidated Statement of Recognised Income and Expense - Page 20
Consolidated Balance Sheet - Page 21
Consolidated Cash Flow Statement - Page 22
Notes to the Financial Information - Page 23
The financial information included in this document for the year ended 30
June 2008 is unaudited and has been derived from the draft financial report
of the BHP Billiton Group for the year ended 30 June 2008. The financial
information does not constitute the Group`s full financial statements for the
year ended 30 June 2008, which will be approved by the Board, reported on by
the auditors, and subsequently filed with the registrar of companies and the
Australian Securities and Investments Commission.
The financial information set out on pages 19 to 31 for the year ended 30
June 2008 has been prepared on the basis of accounting policies consistent
with those applied in the 30 June 2007 financial statements contained within
the Annual Report of the BHP Billiton Group, except for the following
standards which have been adopted for the year ended 30 June 2008:
* IFRS 7/AASB 7 `Financial Instruments: Disclosures`. IFRS 7/AASB 7
modifies the basis and details of disclosures concerning financial
instruments, but does not impact the recognition or measurement of
financial instruments.
* Amendment to IAS 1/AASB 101 `Presentation of Financial Statements`. This
amendment requires new disclosures concerning the objectives, policies
and processes for managing capital.
* AASB 2007-4 `Amendments to Australian Accounting Standards Arising From
ED151 and Other Amendments`. AASB 2007-4 reinstates optional accounting
treatments permitted by IFRS that were not initially available under
Australian Accounting Standards. The impacts on the financial
statements of the Group of adopting AASB 2007-4 are described in Note 1.
The comparative figures for the financial years ended 30 June 2007 and 30
June 2006 are not the statutory accounts of the BHP Billiton Group for those
financial years. Those accounts have been reported on by the Company`s
auditors and delivered to the Registrar of Companies. The reports of the
auditors were (i) unqualified, (ii) did not include a reference to any
matters to which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under Section
237(2) or (3) of the UK Companies Act 1985.
All amounts are expressed in US dollars unless otherwise stated. The BHP
Billiton Group`s presentation currency and the functional currency of the
majority of its operations is US dollars as this is the principal currency of
the economic environment in which it operates.
Amounts in this financial information have, unless otherwise indicated, been
rounded to the nearest million dollars.
Consolidated Income Statement
for the year ended 30 June 2008
2008 2007 2006
Restated Restated
(a) (a)
Notes US$M US$M US$M
Revenue
Group production 51,918 41,271 34,139
Third party products 7,555 6,202 4,960
Revenue 59,473 47,473 39,099
Other income 648 621 1,229
Expenses excluding net finance costs (35,976) (28,370) (24,612)
Profit from operations 24,145 19,724 15,716
Comprising:
Group production 24,529 19,650 15,605
Third party products (384) 74 111
24,145 19,724 15,716
Financial income 5 293 264 222
Financial expenses 5 (955) (776) (822)
Net finance costs 5 (662) (512) (600)
Profit before taxation 23,483 19,212 15,116
Income tax expense (6,798) (5,305) (4,122)
Royalty related taxation (net of (723) (411) (460)
income tax benefit)
Total taxation expense 6 (7,521) (5,716) (4,582)
Profit after taxation 15,962 13,496 10,534
Profit attributable to minority 572 80 84
interests
Profit attributable to members of BHP 15,390 13,416 10,450
Billiton Group
Earnings per ordinary share (basic) 7 275.3 229.5 173.2
(US cents)
Earnings per ordinary share (diluted) 7 275.1 229.0 172.4
(US cents)
Dividends per ordinary share - paid 8 56.0 38.5 32.0
during the period (US cents)
Dividends per ordinary share - 8 70.0 47.0 36.0
declared in respect of the period (US
cents)
The accompanying notes form part of this financial information.
(a) Comparative periods have been restated as described in Note 1.
Consolidated Statement of Recognised Income and Expense
for the year ended 30 June 2008
2008 2007 2006
Notes US$M US$M US$M
Profit after taxation 15,962 13,496 10,534
Amounts recognised directly in equity
Actuarial (losses)/gains on pension and (96) 79 111
medical schemes
Available for sale investments:
Valuation (losses)/gains taken to (76) 147 (1)
equity
Cash flow hedges:
(Losses)/gains taken to equity (383) (50) (27)
Losses transferred to profit and loss 73 - -
(Gains)/losses transferred to the (190) (88) (25)
initial carrying amount of hedged items
Exchange fluctuations on translation of (21) 12 (1)
foreign operations
Tax on items recognised directly in, or 306 82 4
transferred from, equity
Total amounts recognised directly in (387) 182 61
equity
Total recognised income and expense 15,575 13,678 10,595
Attributable to minority interests 9 571 82 84
Attributable to members of BHP Billiton 9 15,004 13,596 10,511
Group
The accompanying notes form part of this financial information.
Consolidated Balance Sheet
as at 30 June 2008
2008 2007
Restated
Notes US$M US$M
ASSETS
Current assets
Cash and cash equivalents 4,237 2,449
Trade and other receivables 9,801 6,239
Other financial assets 2,054 1,059
Inventories 4,971 3,744
Other 498 265
Total current assets 21,561 13,756
Non-current assets
Trade and other receivables 720 642
Other financial assets 1,448 899
Inventories 232 166
Property, plant and equipment 47,332 42,261
Intangible assets 625 713
Deferred tax assets 3,486 2,832
Other 485 135
Total non-current assets 54,328 47,648
Total assets 75,889 61,404
LIABILITIES
Current liabilities
Trade and other payables 6,774 5,137
Interest bearing liabilities 3,461 1,640
Other financial liabilities 2,088 655
Current tax payable 2,022 2,193
Provisions 1,596 1,383
Deferred income 418 299
Total current liabilities 16,359 11,307
Non-current liabilities
Trade and other payables 138 140
Interest bearing liabilities 9,234 10,780
Other financial liabilities 1,260 595
Deferred tax liabilities 3,116 2,260
Provisions 6,251 5,859
Deferred income 488 545
Total non-current liabilities 20,487 20,179
Total liabilities 36,846 31,486
Net assets 39,043 29,918
EQUITY
Share capital - BHP Billiton Limited 1,227 1,221
Share capital - BHP Billiton Plc 1,116 1,183
Treasury shares held (514) (1,457)
Reserves 750 991
Retained earnings 35,756 27,729
Total equity attributable to members of 9 38,335 29,667
BHP Billiton Group
Minority interests 9 708 251
Total equity 39,043 29,918
The accompanying notes form part of this financial information.
(a) Comparative periods have been restated as described in Note 1.
Consolidated Cash Flow Statement
for the year ended 30 June 2008
2008 2007 2006
Restated Restated
(a) (a)
US$M US$M US$M
Operating activities
Profit before taxation 23,483 19,212 15,116
Adjustments for:
Depreciation and ummarized expense 3,612 2,754 2,613
Exploration and evaluation expense 859 539 566
(excluding impairment)
Net gain on sale of non-current assets (129) (101) (600)
Impairments of property, plant and 274 305 163
equipment, investments and intangibles
Employee share awards expense 97 72 61
Financial income and expense 662 512 600
Other (629) (382) 32
Changes in assets and liabilities:
Trade and other receivables (4,787) (1,282) (1,226)
Inventories (1,313) (732) (427)
Net financial assets and liabilities 512 26 (58)
Trade and other payables 1,661 462 (52)
Provisions and other liabilities 1,188 589 (520)
Cash generated from operations 25,490 21,974 16,268
Dividends received 51 38 27
Interest received 169 139 132
Interest paid (799) (633) (590)
Income tax paid (5,867) (5,007) (3,853)
Royalty related taxation paid (885) (554) (659)
Net operating cash flows 18,159 15,957 11,325
Investing activities
Purchases of property, plant and equipment (7,558) (7,129) (5,876)
Exploration expenditure (including amounts (1,350) (805) (771)
expensed)
Purchase of intangibles (16) (18) -
Purchases of financial assets (166) (38) (65)
Purchases of, or increased investment in, (154) (701) (531)
subsidiaries, operations and jointly
controlled entities, net of their cash
Cash outflows from investing activities (9,244) (8,691) (7,243)
Proceeds from sale of property, plant and 43 77 103
equipment
Proceeds from sale of financial assets 59 98 153
Proceeds from sale or partial sale of 78 203 844
subsidiaries, operations and jointly
controlled entities, net of their cash
Net investing cash flows (9,064) (8,313) (6,143)
Financing activities
Proceeds from ordinary share issues 24 22 34
Proceeds from interest bearing liabilities 9,478 7,395 6,273
Repayment of interest bearing liabilities (10,228) (5,781) (7,518)
Purchase of shares by Employee Share (250) (165) (187)
Ownership Plan Trusts
Share buy-back - BHP Billiton Limited - (2,824) (1,619)
Share buy-back - BHP Billiton Plc (3,115) (2,917) (409)
Dividends paid (3,135) (2,271) (1,936)
Dividends paid to minority interests (115) (68) (190)
Net financing cash flows (7,341) (6,609) (5,552)
Net increase/(decrease) in cash and cash 1,754 1,035 (370)
equivalents
Cash and cash equivalents, net of 2,398 1,351 1,720
overdrafts, at beginning of period
Effect of foreign currency exchange rate 21 12 1
changes on cash and cash equivalents
Cash and cash equivalents, net of 4,173 2,398 1,351
overdrafts, at end of period
The accompanying notes form part of this financial information.
(a) Comparative periods have been restated as described in Note 1.
Notes to the Financial Information
1 Changes in accounting policy
Proportionate consolidation
As permitted by AASB 2007-4 `Australian Accounting Standards Arising From
ED151 and Other Amendments` and IAS 31 `Interests in Joint Ventures`, the
Group has adopted the policy of ummarized its proportionate interests in the
assets, liabilities, revenues and expenses of jointly controlled entities
within each applicable line item of the financial statements. All such
interests were previously ummarized using the equity method. The Group
believes the change in policy to proportionate consolidation of jointly
controlled entities provides more relevant information about the financial
performance and financial position of the Group.
Following this change in policy, comparative information has been restated
for all periods included in this financial information, with the impact
ummarized below. There was no impact on profit after taxation, profit
attributable to members of the Group, total equity or the Group`s earnings
per share in the current or comparative periods.
Consolidated Income Statement Year ended 30 June Year ended 30 June
2007 2006
Restated Published Restated Published
US$M US$M US$M US$M
Revenue 47,473 39,498 39,099 32,153
Other income 621 588 1,229 1,227
Expenses excluding net finance (28,370) (26,352) (24,612) (22,403)
costs
Share of profits from jointly - 4,667 - 3,694
controlled entities
Net finance costs (512) (390) (600) (505)
Total taxation expense (5,716) (4,515) (4,582) (3,632)
Profit after taxation 13,496 13,496 10,534 10,534
Consolidated Balance Sheet 30 June 2007
Restated Published
US$M US$M
Current and non-current assets:
Cash and cash equivalents 2,449 1,937
Trade and other receivables 6,881 5,499
Other financial assets 1,958 1,968
Inventories 3,910 3,409
Investments in jointly - 4,924
controlled entities
Property, plant and equipment 42,261 36,705
Intangible assets 713 615
Deferred tax assets 2,832 2,810
Other assets 400 301
Total assets 61,404 58,168
Current and non-current
liabilities:
Trade and other payables 5,277 4,869
Interest bearing liabilities 12,420 10,643
Other financial liabilities 1,250 1,107
Current tax payable 2,193 2,102
Deferred tax liabilities 2,260 1,822
Provisions 7,242 6,860
Deferred income 844 847
Total liabilities 31,486 28,250
Net assets / Total equity 29,918 29,918
Consolidated Cash Flow Year ended 30 June Year ended 30 June
Statement 2007 2006
Restated Published Restated Published
US$M US$M US$M US$M
Net operating cash flows 15,957 15,595 11,325 10,476
Net investing cash flows (8,313) (7,624) (6,143) (5,512)
Net financing cash flows (6,609) (6,843) (5,552) (5,412)
Cash flow presentation
The Group has also elected to adopt the indirect method of cash flow
presentation as permitted by AASB 2007-4 `Australian Accounting Standards
Arising From ED151 and Other Amendments` and IAS 7 `Cash Flow Statements`.
The Group believes this change in presentation more effectively conveys the
relationship between its financial performance and operating cash flows.
2 Business segments
The BHP Billiton Group has grouped its major operating assets into the
following Customer Sector Groups:
CSG Principal Activities
Petroleum Oil and gas exploration, production, development
and marketing
Aluminium Mining of bauxite, refining of bauxite into
alumina and smelting of alumina into aluminium
metal
Base Metals Mining of copper, silver, lead, zinc,
molybdenum, uranium and gold
Diamonds and Mining of diamonds and titanium minerals
Speciality Products
Stainless Steel Production of nickel products
Materials
Iron Ore Mining of iron ore
Manganese Mining of manganese ore and production of
manganese metal and alloys
Metallurgical Coal Mining of metallurgical coal
Energy Coal Mining and marketing of thermal (energy) coal
Group and unallocated items represent Group centre functions and certain
comparative data for divested assets and investments. Exploration and
technology activities, which were previously recognised as part of Group and
unallocated items, are now recognised within relevant segments as a result of
a change in management responsibilities over such activities. This change in
segment reporting has been reflected in all periods presented and resulted in
operating costs of US$149 million (2007: US$139 million, 2006: US$134
million) being reported in individual segments rather than Group and
unallocated items. Amounts allocated to any individual segment are not
material.
It is the Group`s policy that inter-segment sales are made on a commercial
basis.
2 Business segments continued
US$M Petroleum Aluminium Base Diamonds Stainless Iron
Metals and Steel Ore
Speciality Materials
Products
Year ended
30 June 2008
Revenue
Group 7,997 4,675 13,231 969 5,040 9,246
production
Third party 653 1,071 1,543 - 48 108
products
Rendering of 10 - - - - 63
services
Inter- 887 - - - - 38
segment
revenue
Segment 9,547 5,746 14,774 969 5,088 9,455
revenue
Segment 5,486 1,427 7,890 180 1,237 4,631
result
Other 3 38 - 9 - -
attributable
income (a)
Profit from 5,489 1,465 7,890 189 1,237 4,631
operations
Net finance
costs
Taxation
Royalty
related
taxation
Profit after
taxation
Adjusted 6,679 1,774 8,557 367 1,743 5,086
EBITDA
Other (22) 1 100 (3) (4) (124)
significant
non-cash
items
EBITDA (b) 6,657 1,775 8,657 364 1,739 4,962
Depreciation (1,113) (309) (658) (142) (450) (331)
and
amortisation
Impairment (55) (1) (109) (33) (52) -
(losses) /
reversals
recognised
Profit from 5,489 1,465 7,890 189 1,237 4,631
operations
Profit from 5,483 1,445 8,091 189 1,237 4,748
group
production
Profit from 6 20 (201) - - (117)
third party
production
Capital 2,116 556 989 123 1,191 1,832
expenditure
Segment 11,973 7,672 15,356 1,964 8,477 8,656
assets
Segment 3,037 1,308 4,197 270 1,202 1,862
liabilities
US$M Manganes Metallurgical Energy Group and BHP
e Coal Coal unallocated Billiton
items/ Group
elimination
s
Year ended 30 June
2008
Revenue
Group production 2,844 3,818 3,921 - 51,741
Third party products 68 61 2,639 1,364 7,555
Rendering of - 62 - 42 177
services
Inter-segment - - - (925) -
revenue
Segment revenue 2,912 3,941 6,560 481 59,473
Segment result 1,644 936 1,057 (343) 24,145
Other attributable - 1 - (51) -
income (a)
Profit from 1,644 937 1,057 (394) 24,145
operations
Net finance costs (662)
Taxation (6,798)
Royalty related (723)
taxation
Profit after 15,962
taxation
Adjusted EBITDA 1,694 1,236 1,306 (242) 28,200
Other significant (2) (27) 20 (108) (169)
non-cash items
EBITDA (b) 1,692 1,209 1,326 (350) 28,031
Depreciation and (48) (272) (241) (48) (3,612)
amortisation
Impairment (losses) - - (28) 4 (274)
/ reversals
recognised
Profit from 1,644 937 1,057 (394) 24,145
operations
Profit from group 1,644 941 1,146 (395) 24,529
production
Profit from third - (4) (89) 1 (384)
party production
Capital expenditure 155 500 438 29 7,929
Segment assets 1,688 3,916 5,173 11,014 75,889
Segment liabilities 534 1,269 3,174 19,993 36,846
2 Business segments continued
US$M Petroleum Aluminium Base Diamonds Stainless Iron
Metals and Steel Ore
Speciality Materials
Products
Year ended
30 June 2007
Revenue
Group 4,846 4,564 10,756 893 6,800 5,421
production
Third party 454 1,315 1,879 - 101 29
products
Rendering of 7 - - - - 55
services
Inter- 578 - - - - 19
segment
revenue
Segment 5,885 5,879 12,635 893 6,901 5,524
revenue
Segment 3,007 1,833 6,875 189 3,665 2,728
result
Other 7 23 - 8 10 -
attributable
income (a)
Profit from 3,014 1,856 6,875 197 3,675 2,728
operations
Net finance
costs
Taxation
Royalty
related
taxation
Profit after
taxation
Adjusted 3,794 2,111 7,309 317 3,946 2,972
EBITDA
Other (4) 28 139 (2) 4 (24)
significant
non-cash
items
EBITDA (b) 3,790 2,139 7,448 315 3,950 2,948
Depreciation (694) (268) (565) (118) (275) (220)
and
amortisation
Impairment (82) (15) (8) - - -
(losses) /
reversals
recognised
Profit from 3,014 1,856 6,875 197 3,675 2,728
operations
Profit from 3,010 1,830 6,963 197 3,675 2,729
group
production
Profit from 4 26 (88) - - (1)
third party
production
Capital 1,703 369 868 164 1,509 1,517
expenditure
Segment 9,588 7,184 14,459 1,979 7,745 5,467
assets
Segment 2,527 1,006 3,505 220 1,150 1,211
liabilities
US$M Manganes Metallurgical Energy Group and BHP
e Coal Coal unallocated Billiton
items/ Group
eliminations
Year ended 30 June
2007
Revenue
Group production 1,149 3,712 2,980 14 41,135
Third party 95 10 1,595 724 6,202
products
Rendering of - 41 1 32 136
services
Inter-segment - 6 - (603) -
revenue
Segment revenue 1,244 3,769 4,576 167 47,473
Segment result 253 1,246 255 (327) 19,724
Other attributable - 1 50 (99) -
income (a)
Profit from 253 1,247 305 (426) 19,724
operations
Net finance costs (512)
Taxation (5,305)
Royalty related (411)
taxation
Profit after 13,496
taxation
Adjusted EBITDA 294 1,510 761 (318) 22,696
Other significant (1) (3) 10 (60) 87
non-cash items
EBITDA (b) 293 1,507 771 (378) 22,783
Depreciation and (40) (238) (290) (46) (2,754)
amortisation
Impairment - (22) (176) (2) (305)
(losses) /
reversals
recognised
Profit from 253 1,247 305 (426) 19,724
operations
Profit from group 251 1,246 175 (426) 19,650
production
Profit from third 2 1 130 - 74
party production
Capital 72 557 316 41 7,116
expenditure
Segment assets 971 3,083 4,122 6,806 61,404
Segment 381 910 2,276 18,300 31,486
liabilities
2 Business segments continued
US$M Petroleum Aluminium Base Diamonds Stainless Iron
Metals and Steel Ore
Speciality Materials
Products
Year ended
30 June 2006
Revenue
Group 4,797 3,704 9,034 1,263 2,916 4,735
production
Third party 321 1,374 1,259 - 37 15
products
Rendering of 3 6 1 - - 32
services
Inter- 109 - - - 2 -
segment
revenue
Segment 5,230 5,084 10,294 1,263 2,955 4,782
revenue
Segment 2,963 1,149 5,873 281 878 2,533
result
Other 5 37 - 6 - -
attributable
income (a)
Profit from 2,968 1,186 5,873 287 878 2,533
operations
Net finance
costs
Taxation
Royalty
related
taxation
Profit after
taxation
Adjusted 3,802 1,456 6,159 407 1,115 2,697
EBITDA
Other (7) 46 286 (3) 6 9
significant
non-cash
items
EBITDA (b) 3,795 1,502 6,445 404 1,121 2,706
Depreciation (724) (266) (564) (117) (243) (173)
and
amortisation
Impairment (103) (50) (8) - - -
(losses) /
reversals
recognised
Profit from 2,968 1,186 5,873 287 878 2,533
operations
Profit from 2,963 1,110 5,877 287 878 2,531
group
production
Profit from 5 76 (4) - - 2
third party
production
Capital 1,133 377 1,292 215 1,423 1,017
expenditure
Segment 7,559 6,943 13,690 1,973 5,692 4,073
assets
Segment 2,236 1,048 3,383 218 898 1,229
liabilities
US$M Manganese Metallurgical Energy Group and BHP
Coal Coal unallocated Billiton
items/ Group
elimination
s
Year ended 30 June
2006
Revenue
Group production 965 3,926 2,713 5 34,058
Third party 72 1 1,252 629 4,960
products
Rendering of - 6 - 33 81
services
Inter-segment - 8 - (119) -
revenue
Segment revenue 1,037 3,941 3,965 548 39,099
Segment result 124 1,833 326 (244) 15,716
Other attributable 8 1 - (57) -
income (a)
Profit from 132 1,834 326 (301) 15,716
operations
Net finance costs (600)
Taxation (4,122)
Royalty related (460)
taxation
Profit after 10,534
taxation
Adjusted EBITDA 172 2,006 596 (185) 18,225
Other significant (1) (6) 13 (76) 267
non-cash items
EBITDA (b) 171 2,000 609 (261) 18,492
Depreciation and (38) (166) (283) (39) (2,613)
amortisation
Impairment (1) - - (1) (163)
(losses) /
reversals
recognised
Profit from 132 1,834 326 (301) 15,716
operations
Profit from group 137 1,834 289 (301) 15,605
production
Profit from third (5) - 37 - 111
party production
Capital 45 677 181 41 6,401
expenditure
Segment assets 859 2,649 3,726 4,179 51,343
Segment 344 791 1,798 14,943 26,888
liabilities
(a) Other attributable income represents external dividend income and
profit from the sale of investments that do not form part of the segment
result.
(b) EBITDA is profit from operations, before depreciation, amortisation and
impairments.
3 Exceptional items
Exceptional items are those items where their nature and amount is considered
material to the financial information. Such items included within the BHP
Billiton Group profit for the period are detailed below.
Year ended 30 June 2008 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Recognition of benefit of tax losses in respect (137) 159 22
of the acquisition of WMC and consequent
reduction in goodwill
(137) 159 22
Exceptional items by Customer Sector Group
Base Metals (99) (34) (133)
Stainless Steel Materials (38) (4) (42)
Group and unallocated - 197 197
(137) 159 22
Recognition of benefit of tax losses in respect of the acquisition of WMC and
consequent reduction in goodwill
Tax losses incurred by WMC Resources Limited (WMC) were not recognised as a
deferred tax asset at acquisition pending a ruling application to the
Australian Tax Office. The ruling has now been issued confirming the
availability of those losses. This has resulted in the recognition of a
deferred tax asset (US$197 million) and consequential adjustment to deferred
tax liabilities (US$38 million) through income tax expense at current
exchange rates. As a further consequence the Group has recognised an expense
for a corresponding reduction in goodwill measured at the exchange rate at
the date of acquisition.
Year ended 30 June 2007 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Impairment of South African coal operations (176) 34 (142)
Newcastle steelworks rehabilitation (167) 50 (117)
(343) 84 (259)
Exceptional items by Customer Sector Group
Energy Coal (176) 34 (142)
Group and unallocated (167) 50 (117)
(343) 84 (259)
Impairment of South African coal operations
As part of the Group`s regular review of assets whose value may be impaired,
a charge of US$176 million (US$34 million tax benefit) was recorded in 2007
in relation to coal operations in South Africa.
Newcastle steelworks rehabilitation
The Group recognised a charge against profits of US$167 million (US$50
million tax benefit) for additional rehabilitation obligations in respect of
former operations at the Newcastle steelworks (Australia). The increase in
obligations relate to increases in the volume of sediment in the Hunter River
requiring remediation and treatment, and increases in treatment costs.
Year ended 30 June 2006 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Sale of Tintaya copper mine 439 (143) 296
Exceptional items by Customer Sector Group
Base Metals 439 (143) 296
Sale of Tintaya copper mine
Effective 1 June 2006, BHP Billiton sold its interests in the Tintaya copper
mine in Peru. Gross consideration received was US$853 million, before
deducting intercompany trade balances. The net consideration of US$717
million (net of transaction costs) included US$634 million for shares plus
the assumption of US$116 million of debt, working capital adjustments and
deferred payments contingent upon future copper prices and production
volumes.
4 Interests in jointly controlled entities
Major shareholdings Ownership interest at Contribution to profit
in jointly controlled BHP Billiton Group after taxation
entities reporting date (a)
2008 2007 2006 2008 2007 2006
% % % US$M US$M US$M
Samarco Mineracao SA 50 50 50 279 239 262
Minera Antamina SA 33.75 33.75 33.75 615 506 437
Carbones del Cerrejon 33.3 33.3 33.3 183 112 97
LLC
Minera Escondida 57.5 57.5 57.5 3,930 3,442 2,595
Limitada
Mozal SARL 47.1 47.1 47.1 207 259 185
Valesul Aluminio SA - - 45.5 - - 8
(b)
Other (c) 90 109 110
Total 5,304 4,667 3,694
(a) The ownership interest at the BHP Billiton Group`s and the
jointly controlled entity`s reporting date are the same. When the
annual financial reporting date is different to the Group`s,
financial information is obtained as at 30 June in order to report
on a consistent basis with the Group`s reporting date.
(b) Subsequent to 30 June 2006, the BHP Billiton Group sold its
interest in Valesul Aluminio SA.
(c) Includes immaterial jointly controlled entities including the
Richards Bay Minerals joint venture owned 50 per cent (2007: 50 per
cent; 2006: 50 per cent).
5 Net finance costs
2008 2007 2006
US$M US$M US$M
Financial expenses
Interest on bank loans and overdrafts 52 62 167
Interest on all other borrowings 670 613 467
Finance lease and hire purchase interest 14 5 6
Dividends on redeemable preference shares 1 1 17
Discounting on provisions and other 310 255 268
liabilities
Discounting on pension and medical benefit 138 127 108
entitlements
Interest capitalised (a) (204) (353) (167)
Net fair value change on hedged loans and 2 27 (30)
related hedging derivatives
Exchange differences on net debt (28) 39 (14)
955 776 822
Financial income
Interest income (168) (155) (119)
Return on pension plan assets (125) (109) (103)
(293) (264) (222)
Net finance costs 662 512 600
(a) Interest has been capitalised at the rate of interest
applicable to the specific borrowings financing the assets under
construction or, where financed through general borrowings, at a
capitalisation rate representing the average interest rate on such
borrowings. For the year ended 30 June 2008 the capitalisation rate
was 5.0 per cent (2007: 5.7 per cent; 2006: 5.0 per cent).
6 Taxation
2008 2007 2006
US$M US$M US$M
Taxation expense including royalty related
taxation
UK taxation expense 217 85 294
Australian taxation expense 3,397 2,768 2,548
Overseas taxation expense 3,907 2,863 1,740
Total taxation expense including royalty 7,521 5,716 4,582
related taxation
7 Earnings per share
2008 2007 2006
Basic earnings per ordinary share (US cents) 275.3 229.5 173.2
Diluted earnings per ordinary share (US 275.1 229.0 172.4
cents)
Basic earnings per American Depositary Share 550.6 459.0 346.4
(ADS) (US cents)(a)
Diluted earnings per American Depositary 550.2 458.0 344.8
Share (ADS) (US cents) (a)
Basic earnings (US$M) 15,390 13,416 10,450
Diluted earnings (US$M)(b) 15,419 13,434 10,456
The weighted average number of shares used for the purposes of calculating
diluted earnings per share reconciles to the number used to calculate basic
earnings per share as follows:
2008 2007 2006
Weighted average number of shares Million Million Million
Basic earnings per ordinary share denominator 5,590 5,846 6,035
Shares and options contingently issuable under 15 20 31
employee share ownership plans
Diluted earnings per ordinary share 5,605 5,866 6,066
denominator
(a) Each ADS represents two ordinary shares.
(b) Diluted earnings are calculated after adding back dividend
equivalent payments of US$29 million (2007: US$18 million; 2006:
US$6 million) that would not be made if potential ordinary shares
were converted to fully paid.
8 Dividends
2008 2007 2006
US$M US$M US$M
Dividends paid during the period
BHP Billiton Limited 1,881 1,346 1,148
BHP Billiton Plc - Ordinary shares 1,252 923 790
- Preference shares (a) - - -
3,133 2,269 1,938
Dividends declared in respect of the period
BHP Billiton Limited 2,351 1,605 1,275
BHP Billiton Plc - Ordinary shares 1,545 1,097 885
- Preference shares (a) - - -
3,896 2,702 2,160
2008 2007 2006
US cents US cents US cents
Dividends paid during the period (per share)
Prior year final dividend 27.0 18.5 14.5
Interim dividend 29.0 20.0 17.5
56.0 38.5 32.0
Dividends declared in respect of the period
(per share)
Interim dividend 29.0 20.0 17.5
Final dividend 41.0 27.0 18.5
70.0 47.0 36.0
Dividends are declared after period end in the announcement of the results
for the period. Interim dividends are declared in February and paid in March.
Final dividends are declared in August and paid in September. Dividends
declared are not recorded as a liability at the end of the period to which
they relate. Subsequent to year-end, on 18 August 2008, BHP Billiton declared
a final dividend of 41.0 US cents per share (US$2,282 million), which will be
paid on 25 September 2008 (2007: 27.0 US cents per share - US$1,528 million;
2006: 18.5 US cents per share - US$1,100 million).
BHP Billiton Limited dividends for all periods presented are, or will be,
fully franked based on a tax rate of 30 per cent.
2008 2007 2006
US$M US$M US$M
Franking credits as at 30 June 1,623 144 20
Franking credits arising from the payment of 818 923 811
current tax payable
Total franking credits available (b) 2,441 1,067 831
(a) 5.5 per cent dividend on 50,000 preference shares of GBP1 each paid and
declared annually (2007: 5.5 per cent; 2006: 5.5 per cent).
(b) The payment of the final 2008 dividend declared after 30 June 2008 will
reduce the franking account balance by US$590 million.
9 Total equity
Attributable to members Minority interests
of BHP Billiton Group
2008 2007 2006 2008 2007 2006
US$M US$M US$M US$M US$M US$M
Total equity opening balance 29,667 24,218 17,575 251 237 341
Adjustment for adoption of
IAS 39 / AASB 139
- Retained earnings - - 55 - - -
- Hedging reserve - - 30 - - -
- Financial asset reserve - - 116 - - -
Total equity opening balance 29,667 24,218 17,776 251 237 341
after adoption of IAS 39 /
AASB 139
Total recognised income and 15,004 13,596 10,511 571 82 84
expense for the period
Transactions with owners - 6 17 24 (1) - -
contributed equity
Dividends (3,133) (2,269) (1,938) (113) (68) (188)
Accrued employee entitlement 97 72 61 - - -
to share awards
Purchases of shares made by (231) (165) (187) - - -
ESOP Trusts
BHP Billiton Plc share buy- (3,075) (2,957) (409) - - -
back
BHP Billiton Limited share - (2,845) (1,620) - - -
buy-back
Total equity closing balance 38,335 29,667 24,218 708 251 237
Share buy-backs
On 23 August 2006, BHP Billiton announced a US$3 billion capital return to
shareholders through an 18-month series of on-market share buy-backs. On 7
February 2007, a US$10 billion extension to this program was announced. As of
that date, US$1,705 million of shares in BHP Billiton Plc had been
repurchased under the August program, leaving US$1,295 million to be carried
forward and added to the February 2007 program. All BHP Billiton Plc shares
bought back are accounted for as Treasury shares within the share capital of
BHP Billiton Plc. Details of the purchases are shown in the table below. Cost
per share represents the average cost per share for BHP Billiton Plc shares
and final cost per share for BHP Billiton Limited shares. Shares in BHP
Billiton Plc held by BHP Billiton Limited have been cancelled, in accordance
with the resolutions passed at the 2006 Annual General Meetings.
Year Shares Number Cost per share Total cost
ended purchased and discount US$M
30 June BHP Billiton GPB 12.37 3,075
2008 Plc
96,904,086
8.7 per cent (a)
30 June BHP Billiton GBP 10.31 2,957
2007 Plc
146,721,714
8.1 per cent (a)
BHP Billiton A$24.81 2,845
Limited
141,098,555
14.0 per cent
(b)
30 June BHP Billiton GBP 11.54 409
2006 Plc
18,820,000
8.8 per cent
(a)
BHP Billiton A$23.45 1,620
Limited
95,950,979
14.0 per cent
(b)
Continued
Year Shares Purchased by:
ended purchased
BHP Billiton Limited BHP Billiton Plc
Shares US$M Shares US$M
30 June BHP 96,904,086 3,075
2008 Billiton
Plc - -
30 June BHP 140,121,714 2,839 6,600,000 118
2007 Billiton
Plc
BHP 141,098,555 2,845
Billiton
Limited - -
30 June BHP - - 18,820,000 409
2006 Billiton
Plc
BHP 95,950,979 1,620
Billiton
Limited - -
(a) Represents the discount to the average BHP Billiton Limited share price
between 7 September 2006 and the end of the relevant financial period.
(b) Represents the discount to the volume weighted average price of BHP
Billiton Limited shares over the five days up to and including the closing
date of the buy-back.
On 14 December 2007, the share buy back program was suspended in light of the
Group`s offer for Rio Tinto.
10 Subsequent events
Subsequent to 30 June 2008, BHP Billiton Mitsubishi Alliance (BMA) has
entered into a conditional agreement to acquire 100 per cent of the New
Saraji Coal Project. In addition, the acquisition of Anglo Potash Limited was
finalised. These transactions had no impact on the Group`s financial results
or financial position presented in this financial information.
Other than these matters outlined above, no matters or circumstances have
arisen since 30 June 2008 that have significantly affected, or may
significantly affect, the operations, results of operations or state of
affairs of the BHP Billiton Group in subsequent accounting periods.
Further information on BHP Billiton can be found on our Internet site:
www.bhpbilliton.com
Australia
Samantha Evans, Media Relations
Tel: +61 3 9609 2898 Mobile: +61 400 693 915
email: Samantha.Evans@bhpbilliton.com
Leng Lau, Investor Relations
Tel: +61 3 9609 4202 Mobile: +61 403 533 706
email: Leng.Y.Lau@bhpbilliton.com
United Kingdom & South Africa
Andre Liebenberg, Investor Relations
Tel: +44 20 7802 4131 Mobile: +44 7920 236 974
email: Andre.Liebenberg@bhpbilliton.com
Illtud Harri, Media Relations
Tel: +44 20 7802 4195 Mobile: +44 7920 237 246
email: Illtud.Harri@bhpbilliton.com
United States
Scott Espenshade, Investor Relations
Tel: +1 713 599 6431 Mobile: +1 713 208 8565
email: Scott.Espenshade@bhpbilliton.com
BHP Billiton Limited ABN 49 004 028 077
Registered in Australia
Registered Office:
Level 27, 180 Lonsdale Street Melbourne Victoria 3000
Telephone +61 1300 554 757
Facsimile +61 3 9609 3015
BHP Billiton Plc Registration number 3196209
Registered in England and Wales
Registered Office: Neathouse Place London SW1V 1BH United Kingdom
Telephone +44 20 7802 4000
Facsimile +44 20 7802 4111
The BHP Billiton Group is headquartered in Australi
Date: 18/08/2008 12:41:31 Produced by the JSE SENS Department.
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