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BIL
BIBLT
BIL - BHP Billiton Plc - Preliminary Results for the Year Ended 30 June 2009
BHP Billiton Plc
Share code: BIL
ISIN: GB0000566504
12 August 2009
Announcement to the Market
Name of Companies: BHP Billiton Limited (ABN 49 004 028 077) and BHP Billiton
Plc (Registration No. 3196209)
Report for the year ended 30 June 2009
This statement includes the combined results of the BHP Billiton Group,
comprising BHP Billiton Limited and BHP Billiton Plc, for the year ended 30
June 2009 compared with the year ended 30 June 2008.
The results are prepared in accordance with IFRS and are presented in US
dollars.
Headline Earnings
In accordance with the JSE Listing Requirements, Headline Earnings is
presented below.
Year ended Year ended Year ended
30 June 30 June 30 June 2007
2009 2008
US$M US$M US$M
Earnings attributable 5,877 15,390 13,416
to ordinary
shareholders
Adjusted for:
Cost relating to the 450 - -
lapsed offers for Rio
Tinto
Gain on sale of PP&E, (38) (129) (101)
Investments and
Operations
Impairments 4,640 274 305
Recycling of re- (26) - 6
measurements from
equity to the income
statement
Tax effect of above (1,044) (5) (57)
adjustments
Recognition of tax - (159) -
losses in respect of
business
Subtotal of 3,982 (19) 153
Adjustments
Headline Earnings 9,859 15,371 13,569
Diluted Headline 9,881 15,383 13,583
Earnings
Basic earnings per 5,565 5,590 5,846
share denominator
(millions)
Diluted earnings per 5,598 5,605 5,866
share denominator
(millions)
Headlines Earnings per 177.2 275.0 232.1
share (US cents)
Diluted Headline 176.5 274.4 231.6
Earnings per share (US
cents)
BHP BILLITON RESULTS FOR THE YEAR ENDED 30 JUNE 2009
* A strong financial result, despite very challenging market conditions.
* Record net operating cash flow(1) of US$18.9 billion.
* Underlying EBIT margin(2) of 40.1% and Underlying return on capital of
24.6%.
* Maintained our strong balance sheet, with net debt of US$5.6 billion,
gearing of 12.1% and Underlying EBITDA interest cover of 57 times.
* Full year dividend of 82 US cents per share, an increase of 17.1%.
* Capital and exploration expenditure of US$10.7 billion.
* Four projects approved and formation of the Western Australia Iron Ore
production joint venture with Rio Tinto announced.
Year ended 30 June 2009 2008 Change
US$M US$M %
Revenue 50,211 59,473 (15.6)
Underlying EBITDA(3) 22,275 28,031 (20.5)
Underlying EBIT(3) (4) 18,214 24,282 (25.0)
Profit from operations 12,160 24,145 (49.6)
Attributable profit - excluding 10,722 15,368 (30.2)
exceptional items
Attributable profit 5,877 15,390 (61.8)
Net operating cash flow(1) 18,863 17,817 5.9
Basic earnings per share - 192.7 274.9 (29.9)
excluding exceptional items (US
cents)
Basic earnings per share (US 105.6 275.3 (61.6)
cents)
Underlying EBITDA interest 56.8 49.4 15.0
coverage (times)(3) (5)
Dividend per share (US cents) 82.0 70.0 17.1
Refer to page 15 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
2008 unless otherwise stated.
RESULTS FOR THE YEAR ENDED 30 JUNE 2009
Commentary on the Group Results
BHP Billiton`s 2009 financial year results demonstrate the success of our
strategy in delivering a consistently strong performance throughout the
cycle. Our portfolio of long-life, low-cost and diversified assets continued
to yield strong margins and cash flows, despite the pressures of the current
economic environment. Our low financial and operational leverage and a strong
balance sheet enabled us to continue to invest in future growth.
The past year encompassed both record commodity prices in many products and a
collapse in demand, exacerbated by dramatic movements in inventory levels.
While the impact of weaker commodity prices and collapsing demand presented a
major challenge to many companies, our Underlying EBIT margin and return on
capital remained very healthy at 40.1 per cent and 24.6 per cent
respectively.
While Underlying EBIT decreased by 25.0 per cent to US$18,214 million, we
generated record net operating cash flows (up six per cent to US$18,863
million). The outstanding cash flow result has allowed us to reduce our net
debt to US$5,586 million and continue to invest strongly in our capital and
exploration programs (US$10,735 million).
The Group`s financial strength has been a clear competitive advantage during
the severe economic downturn. It leaves us well positioned to invest in
growth and participate in opportunistic mergers and acquisitions. The Western
Australia iron ore production joint venture with Rio Tinto is an example of
our focused pursuit of capacity growth in Tier One assets. More importantly
for our shareholders, our balance sheet strength has allowed us to maintain
our progressive dividend policy, increasing our full year dividend by 17.1
per cent to US 82 cents per share.
Nevertheless, we were not insulated from the swift and dramatic economic
downturn and took decisive actions in response to changing market conditions.
This included the decision not to proceed with the Rio Tinto takeover offers,
production adjustments to match decreased demand, the suspension and sale of
cash negative operations, and deferral of lower priority capital
expenditures.
Outlook
Economic Outlook
Over the past financial year the global economy deteriorated rapidly as a
result of a significant decline in consumer demand stemming from the
financial crisis. This impacted all countries through lower levels of trade,
compounded by falls in private investment. Although economic data over
recent months indicates a stabilisation across many key indicators, in
general economic indicators remain weak by past standards and any assumption
of a quick return to historical trend growth may be premature.
Governments initiated economic stimulus packages have steadied the financial
markets in the developed and developing economies. Bank funding costs
dropped from recent highs in October 2008 to more normal levels by the end of
June 2009. However, credit growth across developed economies remains weak as
households and businesses attempt to take the risk out of their balance
sheets. Unemployment is still rising in many economies, albeit at a slower
rate.
As with all economic stimulus policies, the degree of support will be
difficult to measure and there remains uncertainty about economic growth
beyond the period of each specific program. In China, the response has been
a sharp increase in investment that has accelerated a range of existing
infrastructure and construction projects. This has provided strong support
to short-term economic growth.
If the recent stabilisation in the key indicators persists, many economies
will improve economic output over the short term to rebuild inventory.
However, structural economic problems will take time to correct and may hold
back growth over the medium term.
Commodities Outlook
The 2009 financial year was a year of two distinct periods. The first period
was typified by steep falls in prices, essentially across all commodity
markets in which BHP Billiton operates. Spot prices for our commodities fell
between 50 to 90 per cent over this period as an aggressive de-stocking
occurred in all regions. Lower prices led to supply-side cuts of five to 25
per cent year on year across the commodity suite.
While demand in developed markets remains constrained, a brighter outlook has
emerged recently from some of the developing markets. China and India demand
returned earlier than many expected, as those economies began to re-stock. In
China in particular, re-stocking coupled with stimulus package spending,
fuelled strong real demand in key commodity-intensive industries such as
infrastructure, construction and real estate. In the second half of the
financial year, spot prices for our commodities increased by up to 90 per
cent from the December 2008 lows. However, despite the recent price rally,
commodity prices at the end of the 2009 financial year were generally 20 to
60 per cent lower than at the start of the year.
The commodity re-stocking in China now appears largely complete with
substantial inventory build in specific commodities over the last three
months at end-user level and in strategic stockpiles. Chinese demand has
been exceptionally strong in cases in which imports have replaced higher cost
domestic production (such as in iron ore) or where commodities have
substituted unavailable products (such as copper cathode for copper scrap).
We expect Chinese demand to more accurately reflect real end-user purchasing
in the near term. After intensive de-stocking, there is emerging evidence of
demand improving in North America, Europe and Japan. It is too early to tell
whether this improvement is driven only by a re-stocking or a combination of
re-stocking and real demand. Real demand following the stimulus spending will
be the key to a sustainable price recovery. However, further improvements in
commodity prices in the short term should be viewed in the context of the
likely supply responses from latent capacity across the industry.
In the long term we continue to expect strong growth in demand for our
commodities. As we have consistently stated, long term prices will continue
to be driven by the long-run marginal cost of supply. With reduced capital
investment over the past year, supply may struggle to keep pace with demand
in the medium term when growth recovers.
Growth Projects
During the period, we completed six major projects (one manganese and five
oil and gas projects). In addition, the Alumar Refinery Expansion (alumina)
delivered first production on 9 July 2009. Highlighting our commitment to
long term growth, we sanctioned a total of US$5,850 million of investments in
one iron ore and three oil and gas projects. Subsequent to the financial year
end on 24 July 2009, we announced the approval of the MAC 20 (energy coal)
project at Hunter Valley Coal (Australia) operations.
Completed projects
Customer Project Capacity(i) Capital Date of initial
Sector expenditure production (ii)
Group (US$M) (i)
Budget Actual Target Actual
Petroleum Neptune 50,000 405(iv) 418 Q1 Q3 2008
(USA) barrels of 2008
BHP oil and 50
Billiton - million
35% cubic feet
of gas per
day (100%)
North West LNG 350 357 H2 H2 2008
Shelf 5th processing 2008
Train capacity
(Australia) 4.4 million
BHP tonnes per
Billiton - annum
6.67% (100%)
North West 800 million 200 168 H2 H2 2008
Shelf cubic feet 2008
Angel of gas per
(Australia) day and
BHP 50,000
Billiton - barrels of
6.67% condensate
per day
(100%)
Shenzi 100,000 1,940 1,940(iii) Mid Q1 2009
(USA) barrels of 2009
BHP oil and 50
Billiton - million
44% cubic feet
gas per day
(100%)
Atlantis Tie back to 185 185(iii) H2 H1 2009
North (USA) Atlantis 2009
BHP South
Billiton -
44%
Aluminium Alumar 2 million 900(iv) 900(iii) Q2 Q3
Refinery tonnes per 2009 2009(iv)
Expansion annum of
(Brazil) alumina
BHP (100%)
Billiton -
36%
Manganese Gemco 1 million 110 93 H1 H1 2009
(Australia) tonnes per 2009
BHP annum
Billiton - manganese
60% concentrate
(100%)
4,090 4,061
(i) All references to capital expenditure and capacity are BHP Billiton`s
share unless noted otherwise.
(ii) References are based on calendar years.
(iii) Number subject to finalisation. For projects where capital expenditure
is required after initial production, the costs represent the estimated total
capital expenditure.
(iv) As per revised budget and schedule.
Projects currently under development (approved in prior years)
Customer Project Capacity (i) Budgeted Target
Sector capital date for
Group expenditure initial
(US$M) (i) production
(ii)
Petroleum Pyrenees 96,000 barrels of oil 1,200 H1 2010
(Australia) and 60 million cubic
BHP Billiton - feet of gas per day
71.43% (100%)
Bass Strait 10,000 barrels of 500 2011
Kipper condensate per day
(Australia) and processing
BHP Billiton - capacity of 80
32.5% - 50% million cubic feet
gas per day (100%)
North West Shelf 2,500 million cubic 850 2012
North Rankin B feet of gas per day
(Australia) (100%)
BHP Billiton -
16.67%
Aluminium Worsley 1.1 million tonnes 1,900 H1 2011
Efficiency and per annum (100%)
Growth
(Australia)
BHP Billiton -
86%
Iron Ore WA Iron Ore 26 million tonnes per 1,850 H1 2010
Rapid Growth annum of additional
Project 4 iron ore system
(Australia) capacity (100%)
BHP Billiton -
86.2%
Energy Klipspruit 1.8 million tonnes 450 H2 2009
Coal (South Africa) per annum export and
BHP Billiton - 2.1 million tonnes
100% per annum domestic
thermal coal
Douglas- 10 million tonnes per 975 Mid 2010
Middelburg annum export thermal
Optimisation coal and 8.5 million
(South Africa) tonnes per annum
BHP Billiton - domestic thermal coal
100% (sustains current
output)
Newcastle Third 30 million tonnes per 390 2010
Port Project annum export coal
(Australia) loading facility
BHP Billiton - (100%)
35.5%
8,115
(i) All references to capital expenditure and capacity are BHP Billiton`s
share unless noted otherwise.
(ii) References are based on calendar years.
Projects approved since June 2008
Customer Project Capacity (i) Budgeted Target
Sector capital date
Group expenditure for
(US$M) (i) initial
production
(ii)
Petroleum Bass Strait 11,000 barrels of 625 2011
Turrum condensate per day
(Australia) and processing
BHP Billiton - capacity of 200
50% million cubic feet
of gas per day
(100%)
North West Shelf Replacement vessel 245 2011
CWLH Extension with capacity of
(Australia) 60,000 barrels of
BHP Billiton - oil per day (100%)
16.67%
Angostura Gas 280 million cubic 180 H1 2011
Phase II feet of gas per
(Trinidad and day (100%)
Tobago)
BHP Billiton -
45%
Iron Ore WA Iron Ore 50 million tonnes 4,800 H2 2011
Rapid Growth per annum
Project 5 additional iron
(Australia) ore system
BHP Billiton - capacity (100%)
85%
5,850
(i) All references to capital expenditure and capacity are BHP Billiton`s
share unless noted otherwise.
(ii) References are based on calendar years.
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 2009 2008
US$M US$M
Underlying EBIT 18,214 24,282
Exceptional items (before taxation) (6,054) (137)
Profit from operations 12,160 24,145
Refer to page 9 for further details of the Exceptional items.
Underlying EBIT
The following table and commentary describes the approximate impact of the
principal factors that affected Underlying EBIT for the year ended June 2009
compared with the year ended June 2008:
US$M US$M
Underlying EBIT for the year ended 30 24,282
June 2008
Change in volumes:
Increase in volumes 158
Decrease in volumes (2,523)
(2,365)
Net price impact:
Change in sales prices (3,994)
Price-linked costs 12
(3,982)
Change in costs:
Costs (rate and usage) (2,528)
Exchange rates 2,456
Inflation on costs (601)
(673)
Asset sales (81)
Ceased and sold operations 15
New and acquired operations (158)
Exploration and business development (104)
Other 1,280
Underlying EBIT for the year ended 30 18,214
June 2009
Volumes
Lower sales volumes (predominantly in Base Metals and Manganese) reduced
Underlying EBIT by US$2,523 million. Copper sales volumes were impacted by
lower ore grade and reduced output from milling operations at Escondida
(Chile). Manganese sales volumes decreased significantly due to weaker
demand.
This was partially offset by stronger volumes, predominantly in Iron Ore,
which increased Underlying EBIT by US$158 million.
Prices
Underlying EBIT decreased by US$3,994 million (excluding the impact of newly
commissioned projects) due to changes in commodity prices. Lower average
realised prices for commodities such as crude oil, copper, nickel, aluminium,
alumina and diamonds reduced Underlying EBIT by US$10,193 million. Despite
the prices rallying in the second half of the financial year, spot commodity
prices as at 30 June 2009 were generally 20 to 60 per cent lower than at the
start of the financial year. This was partially offset by higher average
realised prices for metallurgical coal, iron ore, manganese and thermal coal
which increased Underlying EBIT by US$6,199 million.
Price-linked costs were largely in line with the corresponding period.
Decreased charges for third party nickel ore and more favourable rates for
copper treatment and refining charges (TCRCs) were offset by higher royalty
costs.
Costs
Costs increased by US$2,528 million compared to the corresponding period.
This included the impact of higher non-cash costs of US$153 million. The bulk
of the cost increases took place in the first half of the financial year.
Production costs were well controlled despite the inefficiency of lower
volumes. Discretionary costs previously incurred to maximise production to
realise high prices in the first half of the financial year were successfully
reduced. We have also successfully negotiated lower contract prices for some
of our key supply contracts.
While we continue to focus on cost containment, the benefits of falling input
prices will have a lagged effect on reducing costs. Approximately US$601
million of the increase was due to higher costs for fuel and energy, and raw
materials such as coke, sulphuric acid, pitch and explosives. In addition,
labour and contractor costs have increased by US$578 million.
One-off costs such as the severe weather interruptions in Queensland and the
furnace rebuild at the Kalgoorlie Nickel Smelter (Australia) had an adverse
impact of US$561 million.
Operating costs were largely flat in real terms, including the benefit of
lower exchange rates.
Exchange rates
Despite the recent strength in the Australian dollar and South African rand
versus the US dollar, exchange rate movements positively impacted Underlying
EBIT by US$2,456 million. The Australian operations` Underlying EBIT
increased by US$2,085 million due to a generally weaker Australian dollar.
The depreciation of the South African rand also positively impacted
Underlying EBIT by US$225 million.
The following exchange rates against the US dollar have been applied:
Year ended Year ended
30 June 30 June 30 June 30 June
2009 2008 2009 2008
Average Average Closing Closing
Australian dollar (i) 0.75 0.90 0.81 0.96
Chilean peso 582 489 530 522
Colombian peso 2,205 1,935 2,159 1,899
Brazilian real 2.08 1.78 1.95 1.60
South African rand 9.01 7.29 7.82 7.91
(i) Displayed as US$ 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$601 million. The inflationary
pressures were most evident in Australia, South Africa and South America.
Asset Sales
The sale of assets reduced Underlying EBIT by US$81 million. This was mainly
due to the sale of the Elouera mine (Illawarra Coal, Australia) and other
Queensland Coal mining leases in the corresponding period. However, this was
in part offset by the profit on sale of Petroleum leases located offshore of
Western Australia.
Ceased and sold operations
The favourable impact of US$15 million was mainly due to higher insurance
recoveries for closed operations.
New and acquired operations
New greenfield operations will remain in new and acquired variance until
there is a full year comparison. Atlantis and Stybarrow operations (both
USA), which were commissioned in the prior year, contributed to a negative
variance of US$258 million. This was due to lower realised prices, partially
offset by higher sales volumes. Shenzi and Neptune (both USA) operations
which were commissioned during the financial year generated US$100 million
Underlying EBIT during the 2009 financial year.
Exploration and business development
Exploration expense for the year was US$1,074 million, an increase of US$168
million. The main expenditure for Petroleum was on targets in the Gulf of
Mexico (USA), Malaysia and Australia. We are also progressing with minerals
exploration activities in Western Australia Iron Ore and potash in
Saskatchewan, Canada. During the financial year, we incurred US$94 million of
exploration expense for potash.
Expenditure on business development was US$64 million lower than last year.
This was mainly due to lower spending on the pre-feasibility study for the
Olympic Dam expansion project and business development activities for
diamonds projects. The draft Environmental Impact Statement (EIS) for the
Olympic Dam expansion has been submitted to the Federal, South Australian and
Northern Territory Governments for review. Project activities have been
modified to that necessary to support the approvals process and the study of
a number of mining and processing technology options.
Other
Other items increased Underlying EBIT by US$1,280 million, predominantly due
to the contribution of third party product sales and the reversal of
unrealised losses on derivative contracts.
Net finance costs
Net finance costs decreased to US$543 million, from US$662 million in the
corresponding period. This was driven predominantly by lower interest rates
and foreign exchange impacts, partly offset by lower capitalised interest.
Taxation expense
The taxation expense including tax on exceptional items was US$5,279 million.
This represents an effective rate of 45.4 per cent on profit before tax
including exceptional items of US$11,617 million. Excluding the impacts of
exceptional items the taxation expense was US$6,488 million.
Exchange rate movements increased the taxation expense by US$444 million. The
weaker Australian dollar against the US dollar has significantly reduced the
Australian deferred tax assets for future tax depreciation since 30 June
2008. This was partly offset by the devaluation of local currency tax
liabilities due to the stronger US dollar. Royalty-related taxation
represents an effective rate of 4.3 per cent for the current period.
Excluding the impacts of royalty-related taxation, the impact of exchange
rate movements included in taxation expense and tax on exceptional items, the
underlying effective rate was 31.4 per cent.
Exceptional Items
On 21 January 2009 the Group announced the suspension of operations at the
Ravensthorpe nickel operations (Australia) and as a consequence stopped the
processing of the mixed nickel cobalt hydroxide product at Yabulu
(Australia). As a result, charges relating to impairment, increased
provisions for contract cancellation, redundancy and other closure costs of
US$3,615 million (US$1,076 million tax benefit) were recognised. This
exceptional item does not include the loss from operations of Ravensthorpe
nickel operations of US$173 million.
On 3 July 2009 the Group announced the sale of the Yabulu nickel operations.
As a result, impairment charges of US$510 million (US$nil tax benefit) were
recognised in addition to those recognised on suspension of the Ravensthorpe
nickel operations. As a result of the sale, deferred tax assets of US$175
million are no longer expected to be realised by the Group and were
recognised as a charge to income tax expense. The remaining assets and
liabilities of the Yabulu operations have been classified as held for sale as
at 30 June 2009.
As part of the Group`s regular review of the long term viability of
operations, a total charge of US$665 million (US$23 million tax expense) was
recognised primarily in relation to the decisions to cease development of the
Maruwai Haju trial mine (Indonesia), sell the Suriname operations, suspend
copper sulphide mining operations at Pinto Valley (US) and cease the pre-
feasibility study at Corridor Sands (Mozambique). The remaining assets and
liabilities of the Suriname operations have been classified as held for sale
as at 30 June 2009.
A further charge of US$306 million (US$86 million tax benefit) was recognised
primarily in relation to the deferral of expansions at the Nickel West
operations (Australia), deferral of the Guinea Alumina project (Guinea) and
the restructuring of the Bayside Aluminium Casthouse operations (South
Africa).
The Group recognised a charge of US$508 million (US$152 million tax benefit)
for additional rehabilitation obligations in respect of former operations at
the Newcastle steelworks (Australia). The increase in obligations relate to
changes in the estimated volume of sediment in the Hunter River requiring
remediation and treatment, and increases in estimated treatment costs.
The Group`s offers for Rio Tinto lapsed on 27 November 2008 following the
Board`s decision that it believed that completion of the offers was no longer
in the best interests of BHP Billiton shareholders. The Group incurred fees
associated with the US$55 billion debt facility (US$156 million cost, US$31
million tax benefit), investment bankers`, lawyers` and accountants fees,
printing expenses and other charges (US$294 million cost, US$62 million tax
benefit) up to the lapsing of the offers which have been expensed in the year
ended 30 June 2009.
Year ended 30 June 2009 Gross Tax Net
US$M US$M US$M
Exceptional items by
category
Suspension of Ravensthorpe (3,615) 1,076 (2,539)
nickel operations
Announced sale of Yabulu (510) (175) (685)
refinery
Withdrawal or sale of other (665) (23) (688)
operations
Deferral of projects and (306) 86 (220)
restructuring of operations
Newcastle steelworks (508) 152 (356)
rehabilitation
Lapsed offers for Rio Tinto (450) 93 (357)
(6,054) 1,209 (4,845)
Exceptional items by segment
Aluminium (313) 14 (299)
Base Metals (295) (14) (309)
Diamonds and Specialty (70) - (70)
Products
Stainless Steel Materials (4,332) 964 (3,368)
Metallurgical Coal (86) - (86)
Group and unallocated (958) 245 (713)
(6,054) 1,209 (4,845)
Cash Flows
Net operating cash flow after interest and tax increased by 5.9 per cent to
US$18,863 million. This was primarily attributable to higher cash generated
from operating activities and a decrease in receivables, partly offset by
increases in other working capital items.
Capital and exploration expenditure totalled US$10,735 million for the
period. Expenditure on major growth projects was US$7,464 million, including
US$1,851 million on Petroleum projects and US$5,613 million on Minerals
projects. Capital expenditure on sustaining and other items was US$2,028
million. Exploration expenditure was US$1,243 million, including US$234
million which has been capitalised.
Financing cash flows include net debt proceeds of US$3,929 million and
increased dividend payments of US$4,563 million.
Net debt, comprising cash and interest-bearing liabilities, was US$5,586
million, a decrease of US$2,872 million, or 34.0 per cent, compared to 30
June 2008. Gearing, which is the ratio of net debt to net debt plus net
assets, was 12.1 per cent at 30 June 2009, compared with 17.8 per cent at 30
June 2008.
Dividend
BHP Billiton maintains a progressive dividend policy and our Board today
declared a final dividend for the year of 41 US cents per share. Together
with the interim dividend of 41 US cents per share paid to shareholders on 17
March 2009, this brings the total dividend for the year to 82 US cents per
share.
The dividend to be 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 dollars. However, BHP Billiton Limited
dividends are mainly paid in Australian dollars, 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 will be based on the foreign currency
exchange rates on the Record Date, except for the conversion into South
African rand, which will take place on the last day to trade on JSE Limited,
being 28 August 2009. Please note that all currency conversion elections must
be registered by the Record Date, being 4 September 2009. Any currency
conversion elections made after this date will not apply to this dividend.
The timetable in respect of this dividend will be:
Last day to trade cum dividend on JSE Limited and 28 August 2009
currency conversion into Rand
Ex-dividend Australian Securities Exchange (ASX) 31 August 2009
Ex-dividend Johannesburg Stock Exchange (JSE) 31 August 2009
Ex-dividend London Stock Exchange (LSE) 2 September 2009
Ex-dividend New York Stock Exchange (NYSE) 2 September 2009
Record date (including currency conversion and 4 September 2009
currency election dates, except for Rand)
Payment date 25 September 2009
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 between the dates of 31 August and 4 September 2009, both dates
inclusive. Transfers between the UK and South African sections of the
register will not be permitted between the dates of 28 August and 4 September
2009, both dates inclusive.
Details of the currency exchange rates applicable for the dividend will be
announced to the relevant stock exchanges following conversion and will
appear on the Group`s website.
Debt Management and Liquidity
Despite the challenging market environment, our strong credit rating has
enabled us to access the debt capital markets in order to diversify our
funding sources and maturity profiles. These funds were raised on very
attractive terms.
In March 2009, we issued a two tranche Global Bond under a debt shelf
registration statement, which had been previously filed with the US
Securities and Exchange Commission. The Global Bond comprises US$1,500
million 5.5 per cent Senior Notes due 2014 and US$1,750 million 6.5 per cent
Senior Notes due 2019.
In the same month we issued a two tranche Euro Bond. This comprises of _1,250
million of 4.75 per cent Euro Bonds due April 2012 and _1,000 million of
6.375 per cent Euro Bonds due April 2016.
The proceeds for both were used for general corporate purposes.
The Group currently has access to the US commercial paper market and a
committed and undrawn US$3.0 billion Revolving Credit Facility, which expires
in October 2011.
Corporate Governance
On 14 August 2008, the Board announced the appointment of non-executive
Directors Mr Alan Boeckmann and Mr Keith Rumble to the BHP Billiton Board
with effect from 1 September 2008.
On 18 June 2009, the Board announced the appointment of non-executive
Director Mr Wayne Murdy to the BHP Billiton Board with effect from 18 June
2009.
On 4 August 2009, the Board announced that Mr Jac Nasser will succeed Mr Don
Argus as Chairman when Mr Argus retires as Chairman and a Non-executive
Director in early 2010.
CUSTOMER SECTOR GROUP SUMMARY
The following table provides a summary of the performance of the Customer
Sector Groups for the year ended 30 June 2009 and the corresponding prior
year.
Year ended 30 June Revenue Underlying EBIT (i)
(US$M) 2009 2008 Change 2009 2008 Change
% %
Petroleum 7,211 8,382 (14.0) 4,085 5,485 (25.5)
Aluminium 4,151 5,746 (27.8) 192 1,465 (86.9)
Base Metals 7,105 14,774 (51.9) 1,292 7,989 (83.8)
Diamonds and 896 969 (7.5) 145 189 (23.3)
Specialty Products
Stainless Steel 2,355 5,088 (53.7) (854) 1,275 (167.0)
Materials
Iron Ore 10,048 9,455 6.3 6,229 4,631 34.5
Manganese 2,536 2,912 (12.9) 1,349 1,644 (17.9)
Metallurgical Coal 8,087 3,941 105.2 4,711 937 402.8
Energy Coal 6,524 6,560 (0.5) 1,460 1,057 38.1
Group and 1,469 1,805 N/A (395) (390) N/A
unallocated
items(ii)
Less: inter-segment (171) (159) N/A - - -
revenue
BHP Billiton Group 50,211 59,473 (15.6) 18,214 24,282 (25.0)
(i) Underlying EBIT includes trading activities comprising the sale of third
party product. Underlying EBIT is reconciled to Profit from operations on
page 6.
(ii) Includes consolidation adjustments, unallocated items and external
sales from the Group`s freight, transport and logistics operations.
Petroleum
Underlying EBIT was US$4,085 million, a decrease of US$1,400 million, or 25.5
per cent, compared to last year. The decrease in Underlying EBIT was mainly
due to lower average realised oil prices per barrel of US$66.18 (compared
with US$96.27), lower average realised natural gas prices of US$3.68 per
thousand standard cubic feet (compared with US$3.87) partially offset by
higher average realised prices for liquefied natural gas (LNG) of US$12.07
per thousand standard cubic feet (compared with US$8.95). LNG prices for the
year were favourably impacted by the recognition of pricing settlements
related to prior periods.
Production was a record of 137.2 million barrels of oil equivalent, which was
six per cent higher than the prior year. We have achieved a nine per cent
compound annual growth rate for production between the 2007 to 2009 financial
year. This was due to a series of growth projects in the Gulf of Mexico (USA)
and Western Australia, and excellent uptime performance from operated
facilities. This strong growth was achieved despite the impact of hurricanes
and natural field declines.
Gross exploration expenditure was US$548 million, of which US$400 million was
expensed. We have continued to replenish our exploration inventory and
acquired exploration rights to seven deepwater blocks offshore Western India
and were awarded an additional 28 leases in the Gulf of Mexico lease sale
process. Evaluation work has commenced, or continues, on the significant
acreage position we have acquired over recent years.
Aluminium
Underlying EBIT was US$192 million, a decrease of US$1,273 million or 86.9
per cent from the corresponding period. Lower LME prices and premiums for
aluminium had an unfavourable impact of US$1,293 million. This was partially
offset by a US$131 million positive impact of price-linked costs. The average
LME aluminium price decreased to US$1,862 per tonne (compared with US$2,668
per tonne).
Higher operating costs also had an adverse impact. This was due to higher
charges for raw materials, mainly as a result of increased coke and caustic
prices and higher energy costs. Underlying EBIT was also adversely impacted
by the closure of the B and C potlines at Bayside Aluminium. However, the
benefit of a stronger US dollar and a strong focus on business improvement
initiatives reduced the full impact of cost increases.
Favourable embedded derivatives revaluation increased Underlying EBIT by
US$170 million.
Base Metals
Underlying EBIT was US$1,292 million, a decrease of US$6,697 million or 83.8
per cent from the corresponding period.
A significant reduction in average realised prices decreased Underlying EBIT
by US$5,532 million. This includes the impact of Escondida forward contracts
losses which decreased Underlying EBIT by US$269 million. With the exception
of gold, average realised prices for all the commodities in Base Metals were
lower compared to last year.
Lower sales volumes reduced Underlying EBIT by US$1,211 million. Copper sales
volumes were impacted by lower ore grade and reduced output from milling
operations at Escondida. This was partially offset by the continued ramp up
of Spence and Escondida Sulphide Leach (both Chile).
Also impacting Underlying EBIT were higher costs in the period, mostly due to
the impact of lower grades at Escondida and higher energy, acid and labour
charges. The effect of inflation in Chile and Australia also impacted costs
negatively. Cost increases were partially mitigated by continued cost
reduction programs particularly in unwinding discretionary costs previously
incurred to take advantage of high prices. This has resulted in unit cost
improvements, especially in the second half of the year. A stronger US dollar
and lower purchases of third party uranium from the spot market also reduced
costs.
Provisional pricing of outstanding copper shipments, including the impact of
finalisations, resulted in the average realised price for the reporting
period being US$1.92/lb versus an average LME price of US$2.23/lb. The
average realised price was US$3.62/lb for the corresponding period last year.
The negative impact of provisional pricing and finalisations for the period
was US$936 million. Outstanding copper volumes, subject to the fair value
measurement, amounted to 234,871 tonnes at 30 June 2009. These were re-
valued at a weighted average price of US$4,946 per tonne, or US$2.24/lb.
Diamonds and Specialty Products
Underlying EBIT was US$145 million, a decrease of $44 million compared with
last year. Underlying EBIT at EKATI (Canada) was impacted by lower diamonds
sales volumes and a reduction in average realised prices. This was offset by
a stronger US dollar, higher value per carat of production and improved plant
recoveries. There was also an increase in exploration costs due to increased
spending on potash in Canada which was offset by lower diamonds exploration.
Stainless Steel Materials
Underlying EBIT was a loss of US$854 million, a decrease of US$2,129 million
compared with the corresponding period. This was mainly due to lower average
LME prices for nickel of US$6.03/lb (compared to US$13.00/lb) reducing
Underlying EBIT (net of price linked costs) by US$1,995 million. The positive
impact of price-linked costs was US$496 million.
The furnace rebuild at the Kalgoorlie Nickel Smelter and concurrent
maintenance at the Kwinana Nickel Refinery (both Australia) adversely
impacted Underlying EBIT by US$338 million.
Operational costs were largely flat, as increased mining costs and
inflationary pressures in Australia, were offset by a favourable impact of
the weaker Australian dollar against the US dollar.
Underlying EBIT was higher due to increased production at Cerro Matoso
(Colombia), which had been impacted by an industrial stoppage in the 2008
financial year. Underlying EBIT was also positively impacted by US$46 million
following the indefinite suspension of operations at Ravensthorpe and the
Yabulu Extension Project in January 2009. Total operating loss for the year
from these operations was US$267 million.
Iron Ore
Underlying EBIT of US$6,229 million increased significantly by US$1,598
million or 34.5 per cent. This was mainly driven by higher average realised
prices, which increased the Underlying EBIT by US$939 million.
Our Western Australian Iron Ore operations achieved record production and
sales due to the full ramp up of Rapid Growth Project 3. However, our
operations were interrupted by safety incidents, maintenance and tie-in
activities associated with Rapid Growth Project 4. During the period, 68 per
cent of Western Australia Iron Ore shipments on a wet metric tonne basis were
based on annually agreed pricing.
Samarco (Brazil) production and sales were adversely impacted by weaker
pellets demand.
Overall operating costs were lower than last year and increased Underlying
EBIT. The favourable impact of the stronger US dollar was partially offset by
higher costs associated with the uncommissioned projects and safety
initiatives.
Manganese
Underlying EBIT was US$1,349 million, a decrease of US$295 million or 17.9
per cent.
The 2009 financial year was a year of two distinct periods for manganese. The
year started with record demand and sales prices for alloy and ore. As such,
the Underlying EBIT for the first half of the financial year was US$1,245
million. However, as a result of the sharp contraction in demand exacerbated
by dramatic de-stocking activities, average realised ore prices fell by 63
per cent and alloy prices by 48 per cent in the second half of the 2009
financial year.
In addition, production and sales decreased in line with weaker demand.
Manganese ore sales were 37.9 per cent lower and alloy sales were 37.1 per
cent lower than the comparative period. Production costs were well controlled
despite the inefficiency of reduced volumes. Discretionary costs previously
incurred to maximise production to realise record prices were successfully
unwound.
Metallurgical Coal
Underlying EBIT was US$4,711 million, an increase of US$3,774 million, or
402.8 per cent from the corresponding period. This increase was mainly due to
the higher realised prices for hard coking coal (125 per cent), weak coking
coal (121 per cent) and thermal coal (17 per cent). This was partly offset by
a negative impact of price-linked royalty costs. Higher royalty costs
associated with the introduction of a new royalty structure in Queensland and
New South Wales reduced Underlying EBIT by US$144 million.
The cost impact attributable to the recovery from the rainfall events at
Queensland Coal had an unfavourable impact of US$122 million in the period.
Other operating costs were higher due to inflationary pressures, and
increased labour and contractor charges. This was offset by a favourable
impact of the weaker Australian dollar against the US dollar.
In addition, in the corresponding period, profit on the sales of Elouera mine
(Australia) and Queensland coal mining leases were realised.
Energy Coal
Underlying EBIT was US$1,460 million, an increase of US$403 million, or 38.1
per cent from the corresponding period. This was mainly due to higher average
export prices in the first half of the financial year. In addition,
favourable exchange rate movements, earnings on trading activities and record
sales volumes from Hunter Valley Coal (Australia) and Cerrejon Coal
(Colombia) also increased Underlying EBIT.
These gains were partially offset by lower production at BECSA (South
Africa), higher costs due to inflationary pressures, increased raw materials
and labour and contractor costs.
Group and Unallocated items
Underlying EBIT was a loss of US$395 million, which was in line with the
corresponding period. This was due to higher insurance costs, offset by
favourable exchange rate movements.
The following notes explain the terms used throughout this profit release:
(1) Net operating cash flows are after net interest and taxation.
(2) Underlying EBIT margin is calculated net of third party product
activities.
(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$4,061 million (excluding exceptional items
of US$4,450 million) for the year ended 30 June 2009 and US$3,749 million for
year ended 30 June 2008 (excluding exceptional items of US$137 million). 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 6.
(5) Net interest includes capitalised interest and excludes the effect of
discounting on provisions and other liabilities, net fair value change on
hedged loans, net of hedging derivatives, exchange differences arising on net
debt and return on pension plan assets.
(6) Unless otherwise stated, production volumes exclude suspended and sold
operations.
Forward-looking statements: Certain statements in this release are forward-
looking statements within the meaning of the US Private Securities Litigation
Reform Act of 1995, 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). BHP Billiton undertakes no duty to update any forward-
looking statements in this release.
This release is for information purposes only and should not be construed as
either an offer to sell or a solicitation of an offer to buy or sell
securities in any jurisdiction.
****
Further information on BHP Billiton can be found on our website:
www.bhpbilliton.com
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Registered in Australia
Registered Office: 180 Lonsdale Street
Melbourne Victoria 3000 Australia
Tel +61 1300 55 4757 Fax +61 3 9609 3015
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A member of the BHP Billiton group which is headquartered in Australia
BHP BILLITON GROUP
FINANCIAL INFORMATION
For the year ended 30 June 2009
Contents
Financial Information
Consolidated Income Statement
Consolidated Statement of Recognised Income and Expense
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Notes to the Financial Information
The financial information included in this document for the year ended 30
June 2009 is unaudited and has been derived from the draft financial report
of the BHP Billiton Group for the year ended 30 June 2009. The financial
information does not constitute the Group`s full financial statements for the
year ended 30 June 2009, which will be approved by the Board, reported on by
the auditors, and subsequently filed with the UK Registrar of Companies and
the Australian Securities and Investments Commission.
The financial information set out on pages 20 to 34 for the year ended 30
June 2009 has been prepared on the basis of accounting policies consistent
with those applied in the 30 June 2008 financial statements contained within
the Annual Report of the BHP Billiton Group, except for the following
standards and interpretations which have been adopted for the year ended 30
June 2009:
* Amendments to IAS 27/AASB 127 `Consolidated and Separate Financial
Statements` which have been early adopted remove the definition of the cost
method resulting in all dividends being recognised as income as well as
prescribing accounting for the insertion of new parent entities into a group.
* IFRIC 12/AASB Interpretation 12 `Service Concession Arrangements` addresses
accounting for obligations undertaken and the rights received in service
concession arrangements by service concession operators.
* IFRIC 14/AASB Interpretation 14 `IAS 19 - The Limit on a Defined Benefit
Asset, Minimum Funding Requirements and their Interaction` explains how to
assess the limit on the amount of the surplus that can be recognised as an
asset for defined benefit funds in IAS 19/AASB 119 `Employee Benefits`.
The comparative figures for the financial years ended 30 June 2008 and 30
June 2007 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.
Where applicable, comparatives have been adjusted to disclose them on the
same basis as current period figures. 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 2009
Notes Year Year Year
ended ended ended
30 June 30 June 30 June
2009 2008 2007
US$M US$M US$M
Revenue
Group production 44,113 51,918 41,271
Third party product 1 6,098 7,555 6,202
Revenue 1 50,211 59,473 47,473
Other income 589 648 621
Expenses excluding net finance (38,640) (35,976) (28,370)
costs
Profit from operations 1 12,160 24,145 19,724
Comprising:
Group production 11,657 24,529 19,650
Third party product 503 (384) 74
12,160 24,145 19,724
Financial income 4 309 293 264
Financial expenses 4 (852) (955) (776)
Net finance costs 4 (543) (662) (512)
Profit before taxation 11,617 23,483 19,212
Income tax expense (4,784) (6,798) (5,305)
Royalty related taxation (net of (495) (723) (411)
income tax benefit)
Total taxation expense 5 (5,279) (7,521) (5,716)
Profit after taxation 6,338 15,962 13,496
Profit attributable to minority 461 572 80
interests
Profit attributable to members of 5,877 15,390 13,416
BHP Billiton Group
Earnings per ordinary share 6 105.6 275.3 229.5
(basic) (US cents)
Earnings per ordinary share 6 105.4 274.8 228.9
(diluted) (US cents)
Dividends per ordinary share - 7 82.0 56.0 38.5
paid during the period (US cents)
Dividends per ordinary share - 7 82.0 70.0 47.0
declared in respect of the period
(US cents)
The accompanying notes form part of this financial information.
Consolidated Statement of Recognised Income and Expense
for the year ended 30 June 2009
Notes Year Year Year
ended ended ended
30 June 30 June 30 June
2009 2008 2007
US$M US$M US$M
Profit after taxation 6,338 15,962 13,496
Amounts recognised directly in
equity
Actuarial (losses)/gains on (227) (96) 79
pension and medical schemes
Available for sale investments:
Net valuation gains/(losses) taken 3 (76) 147
to equity
Net valuation losses transferred 58 - -
to the income statement
Cash flow hedges:
Gains/(losses) taken to equity 710 (383) (50)
Realised losses transferred to the 22 73 -
income statement
Unrealised gain transferred to the (48) - -
income statement
Gains transferred to the initial (26) (190) (88)
carrying amount of hedged items
Exchange fluctuations on 27 (21) 12
translation of foreign operations
Tax on items recognised directly (253) 306 82
in, or transferred from, equity
Total amounts recognised directly 266 (387) 182
in equity
Total recognised income and 6,604 15,575 13,678
expense
Attributable to minority interests 8 458 571 82
Attributable to members of BHP 8 6,146 15,004 13,596
Billiton Group
The accompanying notes form part of this financial information.
Consolidated Balance Sheet
as at 30 June 2009
Notes 30 June 30 June
2009 2008
US$M US$M
ASSETS
Current assets
Cash and cash equivalents 10,833 4,237
Trade and other receivables 5,153 9,801
Other financial assets 763 2,054
Inventories 4,821 4,971
Assets held for sale 213 -
Current tax assets 424 119
Other 279 498
Total current assets 22,486 21,680
Non-current assets
Trade and other receivables 762 720
Other financial assets 1,543 1,448
Inventories 200 232
Property, plant and equipment 49,032 47,332
Intangible assets 661 625
Deferred tax assets 3,910 3,486
Other 176 485
Total non-current assets 56,284 54,328
Total assets 78,770 76,008
LIABILITIES
Current liabilities
Trade and other payables 5,619 6,774
Interest bearing liabilities 1,094 3,461
Liabilities held for sale 363 -
Other financial liabilities 705 2,088
Current tax payable 1,931 2,141
Provisions 1,887 1,596
Deferred income 251 418
Total current liabilities 11,850 16,478
Non-current liabilities
Trade and other payables 187 138
Interest bearing liabilities 15,325 9,234
Other financial liabilities 142 1,260
Deferred tax liabilities 3,038 3,116
Provisions 7,032 6,251
Deferred income 485 488
Total non-current liabilities 26,209 20,487
Total liabilities 38,059 36,965
Net assets 40,711 39,043
EQUITY
Share capital - BHP Billiton Limited 1,227 1,227
Share capital - BHP Billiton Plc 1,116 1,116
Treasury shares held (525) (514)
Reserves 1,305 750
Retained earnings 36,831 35,756
Total equity attributable to members of 8 39,954 38,335
BHP Billiton Group
Minority interests 8 757 708
Total equity 40,711 39,043
The accompanying notes form part of this financial information.
Consolidated Cash Flow Statement
for the year ended 30 June 2009
Year Year Year
ended ended ended
30 June 30 June 30 June
2009 2008 2007
US$M US$M US$M
Operating activities
Profit before taxation 11,617 23,483 19,212
Adjustments for:
Exceptional items 5,460 137 343
Depreciation and amortisation expense 3,871 3,612 2,754
Exploration and evaluation expense 1,009 859 539
(excluding impairment)
Net gain on sale of non-current assets (38) (129) (101)
Impairments of property, plant and 190 137 129
equipment, investments and intangibles
Employee share awards expense 185 97 72
Financial income and expenses 543 662 512
Other (320) (629) (382)
Changes in assets and liabilities:
Trade and other receivables 4,894 (4,255) (1,118)
Inventories (116) (1,313) (732)
Net financial assets and liabilities (769) 526 224
Trade and other payables (847) 1,824 561
Provisions and other liabilities (497) 137 (39)
Cash generated from operations 25,182 25,148 21,974
Dividends received 30 51 38
Interest received 205 169 139
Interest paid (519) (799) (633)
Income tax paid (5,129) (5,867) (5,007)
Royalty related taxation paid (906) (885) (554)
Net operating cash flows 18,863 17,817 15,957
Investing activities
Purchases of property, plant and (9,492) (7,558) (7,129)
equipment
Exploration expenditure (including (1,243) (1,350) (805)
amounts expensed)
Purchase of intangibles (141) (16) (18)
Purchases of financial assets (40) (166) (38)
Purchases of, or increased investment (286) (154) (701)
in, subsidiaries, operations and jointly
controlled entities, net of their cash
Deferred payment on sale of operations (126) - -
Cash outflows from investing activities (11,328) (9,244) (8,691)
Proceeds from sale of property, plant 164 43 77
and equipment
Proceeds from sale of financial assets 96 59 98
Proceeds from sale or partial sale of 17 78 203
subsidiaries, operations and jointly
controlled entities, net of their cash
Net investing cash flows (11,051) (9,064) (8,313)
Financing activities
Proceeds from ordinary shares 29 24 22
Proceeds from interest bearing 7,323 7,201 2,811
liabilities
Proceeds from debt related swaps 354 342 -
Repayment of interest bearing (3,748) (7,951) (1,197)
liabilities
Purchase of shares by Employee Share (169) (250) (165)
Ownership Plan Trusts
Share buy-back - BHP Billiton Limited - - (2,824)
Share buy-back - BHP Billiton Plc - (3,115) (2,917)
Dividends paid (4,563) (3,135) (2,271)
Dividends paid to minority interests (406) (115) (68)
Net financing cash flows (1,180) (6,999) (6,609)
Net increase in cash and cash 6,632 1,754 1,035
equivalents
Cash and cash equivalents, net of 4,173 2,398 1,351
overdrafts, at beginning of period
Effect of foreign currency exchange rate 26 21 12
changes on cash and cash equivalents
Cash and cash equivalents, net of 10,831 4,173 2,398
overdrafts, at end of period
The accompanying notes form part of this financial information
Notes to the Financial Information
1 Business segments
The Group operates nine Customer Sector Groups aligned with the commodities
which we extract and market:
Customer Sector Group Principal activities
Petroleum Exploration, development and production of
oil and gas
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 Specialty Mining of diamonds and titanium minerals
Products
Stainless Steel Mining and 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 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 are recognised within relevant segments.
It is the Group`s policy that inter-segment sales are made on a commercial
basis.
1. Business segments (continued)
US$M Petroleum Aluminium Base Diamonds Stainless Iron
Metals and Steel Ore
Specialty Materials
Products
Year ended 30
June 2009
Revenue
Group 6,924 3,219 6,616 896 2,202 9,815
production
Third party 192 932 488 - 112 132
product
Rendering of 6 - - - - 61
services
Inter-segment 89 - 1 - 41 40
revenue
Segment revenue 7,211 4,151 7,105 896 2,355 10,048
(a)
Segment result 4,085 (121) 997 75 (5,186) 6,229
Net finance
costs
Income tax
expense
Royalty related
taxation
Profit after
taxation
Adjusted EBITDA 5,428 311 1,915 372 (456) 6,520
Other
significant non- 28 123 (64) (2) (317) 111
cash items
EBITDA (b) 5,456 434 1,851 370 (773) 6,631
Depreciation
and (1,288) (298) (663) (222) (439) (384)
amortisation
Impairment (83) (257) (191) (73) (3,974) (18)
(losses) /
reversals
recognised
Profit from 4,085 (121) 997 75 (5,186) 6,229
operations
Profit from 4,081 (111) 1,031 75 (5,237) 6,022
group
production
Profit from 4 (10) (34) - 51 207
third party
production
Capital 1,905 863 1,018 112 685 1,922
expenditure
Segment assets 12,444 7,575 14,812 2,073 4,767 8,735
Segment 3,388 1,242 2,995 292 1,482 1,501
liabilities
US$M Manganese Metallurgical Energy Group and BHP
Coal Coal unallocated Billiton
items/ Group
eliminations
Year ended 30 June
2009
Revenue
Group production 2,473 7,988 3,830 - 43,963
Third party product 63 18 2,694 1,467 6,098
Rendering of - 81 - 2 150
services
Inter-segment - - - (171) -
revenue
Segment revenue (a) 2,536 8,087 6,524 1,298 50,211
Segment result 1,349 4,625 1,460 (1,353) 12,160
Net finance costs (543)
Income tax expense (4,784)
Royalty related (495)
taxation
Profit after 6,338
taxation
Adjusted EBITDA 1,399 4,961 1,722 (396) 21,776
Other significant
non-cash items (2) (28) (46) (908) (1,105)
EBITDA (b) 1,397 4,933 1,676 (1,304) 20,671
Depreciation and
amortisation (48) (277) (210) (42) (3,871)
Impairment (losses)
/ reversals - (31) (6) (7) (4,640)
recognised
Profit from 1,349 4,625 1,460 (1,353) 12,160
operations
Profit from group 1,358 4,618 1,174 (1,354) 11,657
production
Profit from third
party production (9) 7 286 1 503
Capital expenditure 279 1,562 876 114 9,336
Segment assets 1,454 4,929 4,555 17,426 78,770
Segment liabilities 571 1,249 2,004 23,335 38,059
(a) Revenue not reported in business segments reflects sales of freight and
fuel to third parties. Sales of fuel were previously reported as part of
Petroleum. This change better reflects management responsibilities for these
activities. Comparatives have been restated for all periods presented. The
change in presentation results in revenues of US$994 million for the year
ended 30 June 2009 (2008: US$1,165 million; 2007: US$744 million), being
reported in Group and unallocated items rather than Petroleum. The impact on
profit from operations for Petroleum was immaterial.
(b) EBITDA is profit from operations, before depreciation, amortisation and
impairments.
1 Business segments (continued)
US$M Petroleum Aluminium Base Diamonds Stainless Iron
Metals and Steel Ore
Specialty Materials
Products
Year ended 30
June 2008
Revenue
Group production 7,997 4,675 13,231 969 5,040 9,246
Third party 254 1,071 1,543 - 48 108
product
Rendering of 10 - - - - 63
services
Inter-segment 121 - - - - 38
revenue
Segment revenue 8,382 5,746 14,774 969 5,088 9,455
(a)
Segment result 5,485 1,465 7,890 189 1,237 4,631
Net finance costs
Income tax
expense
Royalty related
taxation
Profit after
taxation
Adjusted EBITDA 6,651 1,774 8,557 367 1,743 5,086
Other significant 2 1 100 (3) (4) (124)
non-cash items
EBITDA (b) 6,653 1,775 8,657 364 1,739 4,962
Depreciation and (1,113) (309) (658) (142) (450) (331)
amortisation
Impairment (55) (1) (109) (33) (52) -
(losses) /
reversals
recognised
Profit from 5,485 1,465 7,890 189 1,237 4,631
operations
Profit from group 5,483 1,445 8,091 189 1,237 4,748
production
Profit from third 2 20 (201) - - (117)
party production
Capital 2,116 556 989 123 1,191 1,832
expenditure
Segment assets 11,874 7,672 15,356 1,964 8,477 8,656
Segment 2,980 1,308 4,197 270 1,202 1,862
liabilities
US$M Manganese Metallurgical Energy Group and BHP
Coal Coal unallocated Billiton
items/ Group
eliminations
Year ended 30
June 2008
Revenue
Group production 2,844 3,818 3,921 - 51,741
Third party 68 61 2,639 1,763 7,555
product
Rendering of - 62 - 42 177
services
Inter-segment - - - (159) -
revenue
Segment revenue 2,912 3,941 6,560 1,646 59,473
(a)
Segment result 1,644 937 1,057 (390) 24,145
Net finance costs (662)
Income tax (6,798)
expense
Royalty related (723)
taxation
Profit after 15,962
taxation
Adjusted EBITDA 1,694 1,236 1,306 (214) 28,200
Other significant (2) (27) 20 (132) (169)
non-cash items
EBITDA (b) 1,692 1,209 1,326 (346) 28,031
Depreciation and (48) (272) (241) (48) (3,612)
amortisation
Impairment - - (28) 4 (274)
(losses) /
reversals
recognised
Profit from 1,644 937 1,057 (390) 24,145
operations
Profit from group 1,644 941 1,146 (395) 24,529
production
Profit from third - (4) (89) 5 (384)
party production
Capital 155 500 438 29 7,929
expenditure
Segment assets 1,688 3,916 5,173 11,232 76,008
Segment 534 1,269 3,174 20,169 36,965
liabilities
1 Business segments (continued)
US$M Petroleum Aluminium Base Diamonds Stainless Iron
Metals and Steel Ore
Specialty Materials
Products
Year ended 30 June
2007
Revenue
Group production 4,846 4,564 10,756 893 6,800 5,421
Third party product 177 1,315 1,879 - 101 29
Rendering of 7 - - - - 55
services
Inter-segment 111 - - - - 19
revenue
Segment revenue (a) 5,141 5,879 12,635 893 6,901 5,524
Segment result 3,010 1,856 6,875 197 3,675 2,728
Net finance costs
Income tax expense
Royalty related
taxation
Profit after
taxation
Adjusted EBITDA 3,789 2,111 7,309 317 3,946 2,972
Other significant (3) 28 139 (2) 4 (24)
non-cash items
EBITDA (b) 3,786 2,139 7,448 315 3,950 2,948
Depreciation and (694) (268) (565) (118) (275) (220)
amortisation
Impairment (losses) (82) (15) (8) - - -
/ reversals
recognised
Profit from 3,010 1,856 6,875 197 3,675 2,728
operations
Profit from group 3,010 1,830 6,963 197 3,675 2,729
production
Profit from third - 26 (88) - - (1)
party production
Capital expenditure 1,703 369 868 164 1,509 1,517
Segment assets 9,554 7,184 14,459 1,979 7,745 5,467
Segment liabilities 2,504 1,006 3,505 220 1,150 1,211
US$M Manganese Metallurgical Energy Group and BHP
Coal Coal unallocated Billiton
items Group
/eliminations
Year ended 30 June
2007
Revenue
Group production 1,149 3,712 2,980 14 41,135
Third party 95 10 1,595 1,001 6,202
product
Rendering of - 41 1 32 136
services
Inter-segment - 6 - (136) -
revenue
Segment revenue 1,244 3,769 4,576 911 47,473
(a)
Segment result 253 1,247 305 (422) 19,724
Net finance costs (512)
Income tax expense (5,305)
Royalty related (411)
taxation
Profit after 13,496
taxation
Adjusted EBITDA 294 1,510 761 (313) 22,696
Other significant (1) (3) 10 (61) 87
non-cash items
EBITDA (b) 293 1,507 771 (374) 22,783
Depreciation and (40) (238) (290) (46) (2,754)
amortisation
Impairment - (22) (176) (2) (305)
(losses) /
reversals
recognised
Profit from 253 1,247 305 (422) 19,724
operations
Profit from group 251 1,246 175 (426) 19,650
production
Profit from third 2 1 130 4 74
party production
Capital 72 557 316 41 7,116
expenditure
Segment assets 971 3,083 4,122 6,840 61,404
Segment 381 910 2,276 18,323 31,486
liabilities
2 Exceptional items
Exceptional items are those items where their nature or amount is considered
material to the financial report. Such items included within the Group
profit for the period are detailed below.
Year ended 30 June 2009 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Suspension of Ravensthorpe nickel (3,615) 1,076 (2,539)
operations
Announced sale of Yabulu refinery (510) (175) (685)
Withdrawal or sale of other (665) (23) (688)
operations
Deferral of projects and (306) 86 (220)
restructuring of operations
Newcastle steelworks (508) 152 (356)
rehabilitation
Lapsed offers for Rio Tinto (450) 93 (357)
(6,054) 1,209 (4,845)
Exceptional items by segment
Aluminium (313) 14 (299)
Base Metals (295) (14) (309)
Diamonds and Specialty Products (70) - (70)
Stainless Steel Materials (4,332) 964 (3,368)
Metallurgical Coal (86) - (86)
Group and unallocated (958) 245 (713)
(6,054) 1,209 (4,845)
Suspension of Ravensthorpe nickel operations:
On 21 January 2009 the Group announced the suspension of operations at
Ravensthorpe nickel operations (Australia) and as a consequence stopped the
processing of the mixed nickel cobalt hydroxide product at Yabulu
(Australia). As a result, charges relating to impairment, increased
provisions for contract cancellation, redundancy and other closure costs of
US$3,615 million (US$1,076 million tax benefit) were recognised. This
exceptional item does not include the loss from operations of Ravensthorpe
nickel operations of US$173 million.
Announced sale of Yabulu refinery:
On 3 July 2009 the Group announced the sale of the Yabulu nickel operations.
As a result, impairment charges of US$510 million (US$nil tax benefit) were
recognised in addition to those recognised on suspension of the Ravensthorpe
nickel operations. As a result of the sale, deferred tax assets of US$175
million are no longer expected to be realised by the Group and were
recognised as a charge to income tax expense. The remaining assets and
liabilities of the Yabulu operations have been classified as held for sale as
at 30 June 2009.
Withdrawal or sale of other operations:
As part of the Group`s regular review of the long term viability of
operations, a total charge of US$665 million (US$23 million tax expense) was
recognised primarily in relation to the decisions to cease development of the
Maruwai Haju trial mine (Indonesia), sell the Suriname operations, suspend
copper sulphide mining operations at Pinto Valley (US) and cease the pre-
feasibility study at Corridor Sands (Mozambique). The remaining assets and
liabilities of the Suriname operations have been classified as held for sale
as at 30 June 2009.
Deferral of projects and restructuring of operations:
As part of the Group`s regular review of the long term viability of
continuing operations, a total charge of US$306 million (US$86 million tax
benefit) was recognised primarily in relation to the deferral of expansions
at the Nickel West operations (Australia), deferral of the Guinea Alumina
project (Guinea) and the restructuring of the Bayside Aluminium Casthouse
operations (South Africa).
Newcastle steelworks rehabilitation:
The Group recognised a charge of US$508 million (US$152 million tax benefit)
for additional rehabilitation obligations in respect of former operations at
the Newcastle steelworks (Australia). The increase in obligations relate to
changes in the estimated volume of sediment in the Hunter River requiring
remediation and treatment, and increases in estimated treatment costs.
Lapsed offers for Rio Tinto:
The Group`s offers for Rio Tinto lapsed on 27 November 2008 following the
Board`s decision that it no longer believed that completion of the offers was
in the best interests of BHP Billiton shareholders. The Group incurred fees
associated with the US$55 billion debt facility (US$156 million cost, US$31
million tax benefit), investment bankers`, lawyers` and accountants fees,
printing expenses and other charges (US$294 million cost, US$62 million tax
benefit) in progressing this matter over the eighteen months up to the
lapsing of the offers which have been expensed in the year ended 30 June
2009.
Exceptional items are classified by nature of expense as follows:
Year ended Impairment Closure Contract Impairment Rio Gross
30 June 2009 of and cancellatio of Tinto
US$M Property, Rehabil n, inventories Offer
Plant and itation redundancy costs
Equipment provisi and other
ons closure
costs
Suspension of (3,260) - (228) (127) - (3,615)
Ravensthorpe
nickel
operations
Announced (510) - - - - (510)
sale
of
Yabulu
refinery
Withdrawal or (463) (34) (137) (31) - (665)
sale of
other
operations
Deferral of (217) - (80) (9) - (306)
projects and
restructuring
of
operations
Newcastle - (508) - - - (508)
steelworks
rehabilitatio
n
Lapsed offers - - - - (450) (450)
for Rio
Tinto
(4,450) (542) (445) (167) (450) (6,054)
Assets held for sale:
The remaining assets and liabilities of Yabulu and Suriname comprising
inventory of US$131 million, property, plant and equipment of US$55 million,
closure and rehabilitation provisions of US$305 million and working capital
and tax balances of US$31 million have been classified as held for sale at 30
June 2009.
Year ended 30 June 2008 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Recognition of benefit of tax (137) 159 22
losses in respect of the
acquisition of WMC and
consequent reduction in
goodwill
(137) 159 22
Exceptional items by segment
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 Ltd (WMC) were not recognised as a
deferred tax asset at acquisition pending a ruling application to the
Australian Taxation Office. The ruling has now been issued confirming the
availability of those losses. This resulted in the recognition of a deferred
tax asset (US$197 million) and consequential adjustment to deferred tax
liabilities (US$38 million) through income tax expense at current exchange
rates. As a further consequence the Group recognised an expense for a
corresponding reduction in goodwill measured at the exchange rate at the date
of acquisition.
Year ended 30 June 2007 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Impairment of South African (176) 34 (142)
coal operations
Newcastle steelworks (167) 50 (117)
rehabilitation
(343) 84 (259)
Exceptional items by segment
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$50
million tax benefit) for additional rehabilitation obligations in respect of
former operations at the Newcastle steelworks (Australia). The increase in
obligations relate to changes in the estimated volume of sediment in the
Hunter River requiring remediation and treatment, and increases in treatment
costs.
3. Interests in jointly controlled entities
Major Ownership interest at Contribution to profit
shareholdings in BHP Billiton after taxation
jointly controlled Group reporting date(a)
entities
2009 2008 2007 2009 2008 2007
% % % US$M US$M US$M
Mozal SARL 47.1 47.1 47.1 84 207 259
Compa?ia Minera 33.75 33.75 33.75 185 615 506
Antamina SA
Minera Escondida 57.5 57.5 57.5 422 3,930 3,442
Limitada
Samarco Mineracao 50 50 50 340 279 239
SA
Carbones del 33.3 33.3 33.3 243 183 112
Cerrej?n LLC
Other(b) 159 90 109
Total 1,433 5,304 4,667
(a) The ownership interest at the 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 basis consistent with the Group`s reporting
date.
(b) Includes immaterial jointly controlled entities and the Richards Bay
Minerals joint venture owned 50 per cent (2008: 50 per cent; 2007: 50 per
cent).
4. Net finance costs
2009 2008 2007
US$M US$M US$M
Financial expenses
Interest on bank loans and 47 52 62
overdrafts
Interest on all other borrowings 527 670 613
Finance lease and hire purchase 15 14 5
interest
Dividends on redeemable 1 1 1
preference shares
Discounting on provisions and 315 310 255
other liabilities
Discounting on pension and 132 138 127
medical benefit entitlements
Interest capitalised (a) (149) (204) (353)
Net fair value change on hedged 13 2 27
loans and related hedging
derivatives
Exchange variations on net debt (49) (28) 39
852 955 776
Financial income
Interest income (198) (168) (155)
Expected return on pension (111) (125) (109)
scheme assets
(309) (293) (264)
Net finance costs 543 662 512
(a) Interest has been capitalised at the rate of interest applicable to the
specific borrowings financing the assets under construction or, where
financed through general borrowings, at a capitalisation rate representing
the average interest rate on such borrowings. For the year ended 30 June 2009
the capitalisation rate was 4.25 per cent (2008: 5.0 per cent; 2007: 5.7 per
cent).
5. Taxation
2009 2008 2007
US$M US$M US$M
Taxation expense including
royalty related taxation
UK taxation expense 319 217 85
Australian taxation expense 3,158 3,397 2,768
Overseas taxation expense 1,802 3,907 2,863
Total taxation expense 5,279 7,521 5,716
Total taxation expense including exceptional items was US$5,279 million,
representing an effective rate of 45.4 per cent (2008: 32.0 per cent, 2007:
29.8 per cent). Excluding the impacts of exceptional items the taxation
expense was US$6,488 million (2008: US$7,680 million; 2007: US$5,800
million).
Exchange rate movements increased taxation expense by US$444 million (2008:
decreased taxation expense by US$229 million, 2007: decreased taxation
expense by US$395 million). The weaker Australian dollar against the US
dollar has significantly reduced the Australian deferred tax assets for
future tax depreciation since 30 June 2008. This was partly offset by the
devaluation of local currency tax liabilities due to the stronger US dollar.
Royalty-related taxation represents an effective rate of 4.3 per cent for the
current period (2008: 3.1 per cent, 2007: 2.1 per cent).
Excluding the impacts of royalty-related taxation, the impact of exchange
rate movements and tax on exceptional items the underlying effective rate was
31.4 per cent (2008: 30.4 per cent, 2007: 29.6 per cent).
6. Earnings per share
2009 2008 2007
Basic earnings per ordinary 105.6 275.3 229.5
share (US cents)
Diluted earnings per ordinary 105.4 274.8 228.9
share (US cents)
Basic earnings per American 211.2 550.6 459.0
Depositary Share (ADS) (US
cents) (a)
Diluted earnings per American 210.8 549.6 457.8
Depositary Share (ADS) (US
cents) (a)
Basic earnings (US$M) 5,877 15,390 13,416
Diluted earnings (US$M) (b) 5,899 15,402 13,430
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:
Weighted average number of 2009 2008 2007
shares Million Million Million
Basic earnings per ordinary 5,565 5,590 5,846
share denominator
Shares and options contingently 33 15 20
issuable under employee share
ownership plans
Diluted earnings per ordinary 5,598 5,605 5,866
share denominator
(a) Each American Depository Share (ADS) represents two ordinary shares.
(b) Diluted earnings are calculated after adding back dividend equivalent
payments of US$22 million (2008: US$12 million; 2007: US$14 million) that
would not be made if potential ordinary shares were converted to fully paid.
7. Dividends
2009 2008 2007
US$M US$M US$M
Dividends paid during the period
BHP Billiton Limited 2,754 1,881 1,346
BHP Billiton Plc 1,809 1,252 923
- Ordinary shares
- Preference shares(a) - - -
4,563 3,133 2,269
Dividends declared in respect of
the period
BHP Billiton Limited 2,754 2,351 1,605
BHP Billiton Plc 1,809 1,545 1,097
- Ordinary shares
- Preference shares(a) - - -
4,563 3,896 2,702
2009 2008 2007
US cents US cents US cents
Dividends paid during the period
(per share)
Prior year final dividend 41.0 27.0 18.5
Interim dividend 41.0 29.0 20.0
82.0 56.0 38.5
Dividends declared in respect of
the period (per share)
Interim dividend 41.0 29.0 20.0
Final dividend 41.0 41.0 27.0
82.0 70.0 47.0
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 12 August 2009, BHP Billiton declared
a final dividend of 41.0 US cents per share (US$2,281 million), which will be
paid on 25 September 2009 (2008: 41.0 US cents per share - US$2,282 million;
2007: 27.0 US cents per share - US $1,528 million).
BHP Billiton Limited dividends for all periods presented are, or will be,
fully franked based on a tax rate of 30 per cent.
2009 2008 2007
US$M US$M US$M
Franking credits as at 30 June 2,506 1,623 144
Franking credits arising from 818 923
the payment of current tax 1,265
payable
Total franking credits 3,771 2,441 1,067
available(b)
(a) 5.5 per cent dividend on 50,000 preference shares of ?1 each declared
and paid annually (2008: 5.5 per cent; 2007: 5.5 per cent).
(b) The payment of the final 2009 dividend declared after 30 June 2009 will
reduce the franking account balance by US$590 million.
8 Total equity
Attributable to members of BHP Minority interests
Billiton Group
2009 2008 2007 2009 2008 2007
US$M US$M US$M US$M US$M US$M
Total equity 38,335 29,667 24,218 708 251 237
opening
balance
Total 6,146 15,004 13,596 458 571 82
recognised
income and
expense for
the period
Transactions - 6 17 (3) (1) -
with owners -
contributed
equity
Dividends (4,563) (3,133) (2,269) (406) (113) (68)
Accrued 185 97 72 - - -
employee
entitlement
to share
awards
Purchases of (149) (231) (165) - - -
shares made
by ESOP
Trusts
BHP Billiton - (3,075) (2,957) - - -
Plc share buy-
back
BHP Billiton - - (2,845) - - -
Limited share
buy-back
Total equity 39,954 38,335 29,667 757 708 251
closing
balance
9. Subsequent events
Other than the matters outlined above, no matters or circumstances have
arisen since the end of the financial year 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.
Date: 12/08/2009 08:55:24 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
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