| Fri 10 Feb 2006, 9:32 | | Anglo American Plc - Anglo American - De Beers Fin |
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AGL
ANAAL
Anglo American Plc - Anglo American - De Beers Final Results
Anglo American plc
(Incorporated in the United Kingdom)
Registration number: 3564138
Share code: AGL
ISIN: GB0004901517
DE BEERS RESULTS - ANGLO AMERICAN PLC HEADLINE EARNINGS
De Beers Societe Anonyme ("Dbsa") today reported headline earnings before class
action payment for the year ended 31 December 2005 of US$824 million.
Anglo American plc ("AA plc") arrives at its headline and underlying earnings in
respect of De Beers by accounting for the interests arising from the ordinary
shares and the 10% preference shares it holds in DB Investments ("DBI").
AA plc will therefore report underlying earnings of US$430 million for the year
ended 31 December 2005 from its investment in DBI, as reconciled in the table
below:
Reconciliation of underlying earnings for the year
ended 31 December 2005
US$ million Total
DBI headline earnings before class action 824
payment (100%)
Adjustments (1) 34
DBI underlying earnings before class action 858
payment - AA plc basis (100%)
AA plc"s 45% ordinary share interest 386
Income from preference shares 44
AA plc underlying earnings 430
(1) Adjustments include unrealised gains and losses on non-hedge derivative
instruments and the reclassification of the actuarial gains and losses booked to
the income statement by Dbsa under the corridor mechanism of IAS19. As AA plc
has early adopted the amended version of IAS19, this charge has been included in
the deficit booked to reserves in prior years.
On 30 June 2005, Dbsa redeemed a second 25% of the preference shares originally
in issue and on that date AA plc received US$175 million, representing 25% of
its original US$701 million preference share interest. AA plc now holds US$350
million of preference shares in Dbsa.
In the year ended 31 December 2005, AA plc received a total of US$322 million in
distributions from DBI, consisting of a US$90 million final dividend on ordinary
shares relating to FY 2004, a US$68 million interim dividend on ordinary shares
relating to FY 2005, US$26 million dividends representing the second payment on
preference shares for 2004, interim dividends totalling US$26 million on
preference shares for 2005, and a combined ordinary dividend and share premium
repayment of $112 million relating to FY 2005.
In the year ended 31 December 2004, AA plc received a total of US$250 million in
dividends from DBI, consisting of US$68 million dividends on ordinary shares
relating to FY 2003, a US$112 million interim dividend on ordinary shares for
2004, US$35 million dividends representing the second US$35 million payment on
preference shares for 2003, and interim dividends totalling US$35 million on
preference shares for 2004.
Reconciliation of underlying earnings for the year
ended 31 December 2004
US$ million Total
DBI headline earnings (100%) 652
Adjustments (1) 3
DBI underlying earnings - AA plc basis (100%) 655
AA plc"s 48.65% ordinary share interest (2) 319
Income from preference shares 61
AA plc underlying earnings 380
(1) Adjustments include the impact of IAS32 and IAS39 which applied to Dbsa in
2004, but have only been adopted by AA plc in 2005, as well as the
reclassification of the actuarial gains and losses booked to the income
statement by Dbsa under the corridor mechanism of IAS19.
(2) As a result of De Beers" partial interest in Debswana Diamond Company
(Proprietary) Limited (one of the shareholders in DBI), AA plc accounted for an
additional 3.65% of DBI"s post-tax earnings attributable to ordinary shares. As
previously announced, the Debswana interest in DBI was ceded to the Government
of the Republic of Botswana as part of a renewal of De Beers" mining licences in
Botswana, agreed on 20 December 2004. Accordingly, from this date AA plc no
longer accounts for this additional 3.65% interest.
Underlying Earnings
In previous reporting periods the Group has reported Headline Earnings as its
primary earnings measure, using the definition of Headline Earnings which is
required to be disclosed by the Johannesburg Stock Exchange Limited (`JSE Ltd"),
consistent with that given by the Institute of Investment Management and
Research (`IIMR").*
Following the adoption of International Financial Reporting Standards, as well
as consideration of other restrictions of the definition, the Group believes
that an alternative measure would provide a clearer picture of the underlying
performance of the Group.
Consequently, the Group has adopted `Underlying Earnings" as its principal
measure of earnings. Underlying Earnings is net profit attributable to equity
shareholders, adjusted for the effect of special items and remeasurements, and
any related tax and minority interests. Special items are those items of
financial performance which the Group believes should be excluded from
performance earnings, and principally relate to impairment and significant
closure costs, exceptional legal provisions and profit or loss on disposals.
Remeasurements include unrealised gains and losses on non-hedge derivative
instruments that are recorded in the income statement, and foreign exchange
gains and losses on US$ denominated De Beers preference shares held by a Rand
functional subsidiary of the Group.
Headline Earnings and Headline EPS for the Group will also continue to be
reported to comply with JSE Ltd listing requirements, and a full reconciliation
will be provided between Underlying Earnings and Headline Earnings.
The above figures are unaudited.
*Statement of Investment Practice No. 1, September 1993.
Date: 10/02/2006 09:32:05 AM Produced by the JSE SENS Department
