|
Platinum (494) (336) (532) 6,515
Gold - (752) (908) -
Coal (853) (803) (780) 2,199
Base Metals (614) (467) (573) 4,853
Industrial Minerals (813) (988) (1,059) 4,388
Ferrous Metals and (675) (658) (902) 2,488
Industries
Paper and Packaging (1,046) (1,067) (1,035) 6,671
Exploration (2) (5) (3) (2)
Corporate Activities (294) (229) (310) (73)
(4,791) (5,305) (6,102) 27,039
Unallocated:
Investment in - - - 4,620
associates
Financial asset - - - 712
investments
Deferred tax (3,472) (5,022) (5,201) (3,192)
assets/(liabilities)
Cash and cash - - - 2,638
equivalents
Other financial (694) (343)
assets/(liabilities) (953) (1,794)
- (derivatives)
Other non-operating (3,557) (37)
assets/ (liabilities) (2,275) (2,420)
(4)
Provisions (312) (379) (356) (312)
Borrowings (5,020) (9,873) (8,439) (5,020)
Net assets (17,846) (23,807) (24,312) 26,105
Capital expenditure (3)
Net segment assets
US$ 6 months 6 months Year 6 months 6 Year
million ended ended ended ended months ended
30.06.06 30.06.05 31.12.05 30.06.06 ended 31.12.05
30.06.0
5
Platinum 6,515 6,571 7,018 286 247 685
Gold - 6,793 6,982 196 311 721
Coal 2,199 2,124 2,244 290 126 331
Base 4,853 4,676 4,785 109 109 273
Metals
Industrial 4,388 4,255 3,982 194 151 312
Minerals
Ferrous 2,488 4,140 4,439 298 139 376
Metals and
Industries
Paper and 6,671 6,359 6,365 333 388 703
Packaging
Exploratio (2) (5) (3) - - -
n
Corporate (73) (75) (59) 9 8 27
Activities
27,039 34,838 35,753 1,715 1,479 3,428
Unallocate
d:
Investment 4,620 3,269 3,165
in
associates
Financial 712 856 915
asset
investment
s
Deferred (3,192) (4,796) (4,864)
tax
assets/
(liabiliti
es)
Cash and 2,638 2,788 3,430
cash
equivalent
s
Other (343) (864)
financial (160)
assets/(li
abilities)
-
(derivativ
es)
Other non- (37)
operating (294) (1,162)
assets/
(liabiliti
es) (4)
Provisions (312) (379) (356)
Borrowings (5,020) (9,873) (8,439)
Net assets 26,105 26,249 27,578
Segment assets at 30 June 2006 are operating assets and consist primarily f
tangible assets ($21,848 million), intangible assets ($2,056 million),
biological assets ($314 million), environmental rehabilitation trusts ($166
million), inventories ($2,836 million), pension and post-retirement
healthcare assets ($57 million) and operating receivables ($4,552 million).
Segment assets at 30 June 2005 consist of tangible assets ($29,604
million), intangible assets ($2,588 million), biological assets ($331
million), environmental rehabilitation trusts ($217 million), inventories
($3,180 million), pension and post-retirement healthcare assets ($2
million) and operating receivables ($4,221 million). Segment assets at 31
December 2005 consist of tangible assets ($30,796 million), intangible
assets ($2,572 million), biological assets ($350 million), environmental
rehabilitation trusts ($288 million), inventories ($3,569 million), pension
and post-retirement health care assets ($77million) and operating
receivables ($4,203 million).
(2) Segment liabilities are operating liabilities and consist primarily of
non-interest bearing current liabilities, restoration and decommissioning
provisions and provisions for post-retirement benefits.
(3) Capital expenditure reflects cash payments, capitalised interest and
accruals in respect of additions to tangible assets of $1,473 million (30
June 2005: $1,441 million; 31 December 2005: $3,373 million) and intangible
assets of $14 million (30 June 2005: $2 million; 31 December 2005: $4
million) and includes additions resulting from acquisitions through
business combinations of $228 million (30 June 2005: $36 million; 31
December 2005: $51 million).
(4) Other non-operating assets/(liabilities) includes $2,498 million
assets (30 June 2005: $757 million; 31 December 2005: $nil), $1,184 million
liabilities (30 June 2005: $283 million; 31 December 2005: $nil), net
segment assets $1,314 million relating to assets classified as held for
sale (30 June 2005: $474 million; 31 December 2005: $nil). For segmental
split see note 16.
Other primary segment items included in the income statement are as
follows:
US$ million
Depreciation and amortisation
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Platinum 237 198 428
Gold 183 261 538
Coal 85 85 188
Base Metals 169 155 312
Industrial Minerals 124 124 248
Ferrous Metals and Industries 137 158 300
Paper and Packaging 218 211 411
Exploration - - -
Corporate Activities 10 7 16
1,163 1,199 2,441
US$ million (Impairments)/reversal (1) Other non-cash expense (2)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Platinum - - - 40 53 55
Gold - (38) (96) 12 22 50
Coal (122) - - 13 10 14
Base Metals - - 1 44 32 68
Industrial (278) (16) (16) 14 25 36
Minerals
Ferrous Metals 9 (1) 8 7 50 56
and Industries
Paper and (71) - (83) 15 12 17
Packaging
Exploration - - - 1 1 1
Corporate - - - 20 19 41
Activities
(462) (55) (186) 166 224
338
(2)Other non-cash expenses include share-based payments and charges in
respect of environmental rehabilitation provisions and other provisions.
(1)Includes restructuring charges. See operating special items in note 6.
3. Segmental information (continued)
Secondary reporting format - by geographical segment
The Group"s geographical analysis of revenue, allocated based on the
country in which the customer is located, is as follows. The geographical
analysis of the Group"s attributable revenue from associates is provided
for completeness and consistency.
US$ million
Revenue
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Subsidiaries and
joint ventures
South Africa 2,930 2,474 5,280
Rest of Africa 363 247 505
Europe 6,943 7,112 13,629
North America 1,296 1,375 2,740
South America 1,190 810 1,723
Australia and Asia 3,453 2,492 5,557
Total subsidiaries and 16,175 14,510 29,434
joint ventures
Associates
South Africa 143 406 169
Rest of Africa 454 6 40
Europe 740 680 1,500
North America 498 811 1,768
South America 15 14 29
Australia and Asia 800 718 1,532
Total associates 2,650 2,635 5,038
Total Group operations 18,825 17,145 34,472
including associates
The Group"s geographical analysis of segment assets, liabilities and
capital expenditure, allocated based on where assets and liabilities are
located is:
.
US$ million
Revenue
6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Subsidiaries and
joint ventures
South Africa 2,930 2,474 5,280
Rest of Africa 363 247 505
Europe 6,943 7,112 13,629
North America 1,296 1,375 2,740
South America 1,190 810 1,723
Australia and 3,453 2,492 5,557
Asia
Total subsidiaries and 16,175 14,510 29,434
joint ventures
Associates
South Africa 143 406 169
Rest of Africa 454 6 40
Europe 740 680 1,500
North America 498 811 1,768
South America 15 14 29
Australia and 800 718 1,532
Asia
Total associates 2,650 2,635 5,038
Total Group operations 18,825 17,145 34,472
including associates
Segment liabilities
Segment assets
US$ 6 months 6 months Year 6 months 6 months Year
million ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.
05
South 13,106 16,459 18,965 (1,792) (2,043) (2,689
Africa )
Rest of 734 4,360 4,142 (82) (239) (298)
Africa
Europe 10,657 10,699 10,048 (1,655) (1,932) (1,926
)
North 307 488 500 (114) (46) (59)
America
South 4,871 4,927 5,124 (594) (514) (543)
America
Australia 2,155 3,210 3,076 (554) (531) (587)
and Asia
31,830 40,143 41,855 (4,791) (5,305) (6,102
)
Net segment assets
Capital expenditure
US$ 6 months 6 months Year ended 6 months 6 months Year
million ended ended 31.12.05 ended ended ended
30.06.06 30.06.05 30.06.06 30.06.05 31.12.05
South 11,314 14,416 16,276 740 821 1,890
Africa
Rest of 652 4,121 3,844 58 92 261
Africa
Europe 9,002 8,767 8,122 425 310 658
North 193 442 441 109 30 28
America
South 4,277 4,413 4,581 145 132 317
America
Australia 1,601 2,679 2,489 238 94 274
and Asia
27,039 34,838 35,753 1,715 1,479 3,428
3. Segmental information (continued)
Secondary reporting format - by geographical segment (continued)Additional
disclosure of secondary segmental information by origin is as follows:
US$ million Operating profit
Revenue before special items and
remeasurements(1)
6 months 6 months Year 6 months 6 months Year
ended ended ended ended ended ended
30.06.06 30.06.05 31.12.05 30.06.06 30.06.05 31.12.05
Subsidiaries
and joint
ventures
South 6,444 5,849 11,981 1,691 1,144 2,651
Africa
Rest of 465 553 1,193 94 34 63
Africa
Europe 5,337 5,085 9,748 404 370 694
North 201 342 531 24 21 27
America
South 2,796 1,742 3,873 1,683 757 1,732
America
Australia 932 939 2,108 110 100 177
and Asia
Total 16,175 14,510 29,434 4,006 2,426 5,344
subsidiaries
and joint
ventures
Associates
South 636 768 1,479 119 139 217
Africa
Rest of 1,158 1,065 2,138 220 192 468
Africa
Europe 380 359 753 71 60 47
North 6 - - 3 - -
America
South 290 263 525 95 107 189
America
Australia 180 180 143 49 69 111
and Asia
Total 2,650 2,635 5,038 557 567 1,032
associates
Total Group 18,825 17,145 34,472 4,563 2,993 6,376
operations
including
associates
US$ million Operating profit
after special items and
remeasurements(1)
Year 6 months 6 months Year ended
ended ended ended 31.12.05
31.12.05 30.06.06 30.06.05
Subsidiaries and
joint ventures
South 2,651 1,523 1,124 2,482
Africa
Rest of 63 (102) 15 (156)
Africa
Europe 694 77 354 600
North 27 (14) 14 (11)
America
South 1,732 1,650 755 1,704
America
Australia 177 18 91 238
and Asia
Total subsidiaries 5,344 3,152 2,353 4,857
and joint ventures
Associates
South 217 90 139 193
Africa
Rest of 468 190 192 356
Africa
Europe 47 71 60 30
North - (22) - -
America
South 189 92 107 189
America
Australia 111 46 69 111
and Asia
Total 1,032 467 567 879
associates
Total Group 6,376 3,619 2,920 5,736
operations including
associates
(1) special items and remeasurements are set out in note 6
4. Profit for the financial period
The table below analyses the contribution of each business segment to the
Group"s operating profit including operating profit from associates for the
financial period and its underlying earnings, which the directors consider
to be a useful additional measure of the Group"s performance. A
reconciliation from profit for the financial period to underlying earnings
is given in note 9. Group operating profit including operating profit from
associates is reconciled to `Underlying earnings" and `Profit for the
financial period attributable to equity shareholders of the Company" in the
table below:
6 months ended 30.06.06
Operating Operatin Net
US$ profit g profit Special Financin interest
million before after items and Net g , tax
special special remeasure profit Remeasur and Total
items and items ments: on ements minority
remeasure- and operating( disposa and interest
ments remeasur 2) ls(2) other(2) s
e-
ments
By
business
segment
Platinum 934 934 - - - (442) 492
Gold 303 (140) 443 - - (201) 102
Diamonds 293 276 17 - - (129) 164
Coal 356 232 124 - - (96) 260
Base 1,854 1,838 16 - - (577) 1,277
Metals
Industrial 151 (127) 278 - - (39) 112
Minerals
Ferrous 644 650 (6) - - (351) 293
Metals and
Industries
Paper and 212 140 72 - - (92) 120
Packaging
Exploratio (66) (66) - - - 13 (53)
n
Corporate (118) (118) - - - (147) (265)
Activities
Total/ 4,563 3,619 944 - - (2,061) 2,502
Underlying
earnings
Underlying (944) 1,035 33 317 441
earnings
adjustment
s(note 9)
Profit for the financial year 2,943
attributable to equity
shareholders of the Company
6 months ended 30.06.05
Operating Operating Net
US$ million profit profit Special Financing interes
before after items Net Remeasure t,tax
special special and profit ments and Total
items and items and remeasu on and minorit
remeasure remeasure rements disposal other(2) y
ments(1) ments : s interes
operati (2) t
ng(2)
By business
segment
Platinum 410 410 - - - (154) 256
Gold 172 116 56 - - (103) 69
Diamonds 297 297 - - - (109) 188
Coal 374 374 - - - (111) 263
Base Metals 721 721 - - - (196) 525
Industrial 193 177 16 - - (53) 140
Minerals
Ferrous 791 790 1 - - (378) 413
Metals and
Industries
Paper and 233 233 - - - (100) 133
Packaging
Exploration (67) (67) - - - 17 (50)
Corporate (131) (131) - - - (107) (238)
Activities
Total/Under 2,993 2,920 73 - - (1,294) 1,699
lying
earnings
Underlying
earnings (73) 67 113 32 139
adjustments
(note 9)
Profit for the financial period 1,838
attributable to equity shareholders
of the Company
4. Profit for the financial period (continued)
Operating Operating
US$ million profit profit Special Financing
before after items and Net remeasurements
special special remeasure profit on and other(2)
items and items and ments: disposals
remeasure remeasure operating (2)
ments(1) ments (2)
By business
segment
Platinum 854 854 - - -
Gold 332 (52) 384 - -
Diamonds 583 431 152 - -
Coal 1,019 1,020 (1) - -
Base Metals 1,678 1,667 11 - -
Industrial 370 354 16 - -
Minerals
Ferrous Metals 1,456 1,461 (5) - -
and Industries
Paper and 495 412 83 - -
Packaging
Exploration (150) (150) - - -
Corporate (261) (261) - - -
Activities
Total/ 6,376 5,736 640 - -
Underlying
earnings
Underlying
earnings (640) 185 42
adjustments(no
te 9)
Net interest,
US$ million tax and
minority
interests Total
By business segment
Platinum (371) 483
Gold (227) 105
Diamonds (153) 430
Coal (295) 724
Base Metals (438) 1,240
Industrial Minerals (103) 267
Ferrous Metals and Industries (699) 757
Paper and Packaging (199) 296
Exploration 35 (115)
Corporate Activities (190) (451)
Total/Underlying earnings (2,640) 3,736
Underlying earnings adjustments(note
9) 198 (215)
Profit for the financial year attributable to equity
Shareholders of the Company 3,521
5. Exploration expenditure
US$ million 6 months 6 months Year ended
ended ended 31.12.05
30.06.06 30.06.05
By business segment
Platinum 15 9 21
Gold 16 22 45
Coal 10 4 13
Base Metals 19 20 50
Ferrous Metals and 6 12 21
Industries
66 67 150
6. Special items and remeasurements
`Special items" are those items of financial performance that the Group
believes should be separately disclosed on the face of the income statement
to assist in the understanding of the underlying financial performance
achieved by the Group and its businesses. Such items are material by nature
or amount to the period"s results and require separate disclosure in
accordance with IAS 1.86. Special items that relate to the operating
performance of the business are classified as special operating items and
include impairment charges and reversals and other exceptional items
including significant legal provisions. Non-operating special items include
profits and losses on disposals of investments and businesses.
Remeasurements comprise other items which the Group believes should be
reported separately to aid an understanding of the underlying performance
of the Group. This category includes (i) unrealised gains and losses on
`non-hedge" derivative instruments open at period end and the reversal of
the historical marked-to-market value of instruments settled in the period,
such that the full realised gain or loss is recorded in underlying earnings
in the same period as the underlying transaction for which such instruments
provide an economic, but not formally designated, hedge and (ii) foreign
exchange gains and losses arising on the retranslation of dollar
denominated De Beers" preference shares held by a Rand functional currency
subsidiary of the Group. Remeasurements are defined as operating, non-
operating or financing according to the nature of the underlying expense.6.
Special items and remeasurements (continued)
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Subsidiaries and joint ventures
Operating special items
Impairment of Tarmac assets and (278) (12) (12)
restructuring costs
Impairment and closure costs of Dartbrook (122) - -
Impairment of Packaging assets (72) - -
Impairment of Corrugated assets, goodwill - - (77)
and restructuring costs
Impairment of Bibiani - - (38)
Closure of Ergo - (31) (31)
Other 10 (12) (28)
Total operating special items (462) (55) (186)
Taxation 97 17 14
Minority interests 2 12 38
Total attributable to equity shareholders (363) (26) (134)
Operating remeasurements
Unrealised net losses on non-hedge (392) (18) (301)
derivatives
Taxation 46 (6) 22
Minority interests 160 12 130
Total attributable to equity shareholders (186) (12) (149)
Financing remeasurements
Fair value (loss)/gain on AngloGold (43) 32 (32)
Ashanti convertible bond
Foreign exchange gain on De Beers" 44 91 72
preference shares
Unrealised net gains and (losses) on non- 12 (1) (5)
hedge derivatives
Total financing remeasurements 13 122 35
Taxation (1) - (2)
Minority interests 21 (16) 16
Total attributable to equity shareholders 33 106 49
Profits and (losses) on disposals
Part disposal of AngloGold Ashanti 737 - -
Gain on deemed disposal of AngloGold 159 - -
Ashanti
Part disposal of Western Areas 31 7 14
Gain on sale of mineral rights - Anglo 14 - -
American Brazil
Formation of Marikana JV - - 27
Sale of Acerinox - 25 25
Disposal of Wendt - 21 21
Disposal of Boart Longyear - - 21
Disposal of Elandsfontein - - 18
Sale of Columbus - 14 14
Disposal of Hope Downs - (50) (57)
Part disposal of Mondi Packaging South - (18) (12)
Africa
Other items (14) - 16
Net profit on disposals 927 (1) 87
Taxation (26) 11 (26)
Minority interests - 2 (3)
Total attributable to equity shareholders 901 12 58
Total special items and remeasurements 86 48 (365)
before tax and minority interests
Taxation 116 22 8
Minority interests 183 10 181
Total special items and remeasurements 385 80 (176)
attributable to equity shareholders
6. Special items and remeasurements (continued)
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Associates" special items and
remeasurements
Share of De Beers" class action (20) - (113)
payment
Unrealised net losses on non-hedge (70) - (16)
derivatives
Other impairments and restructuring - - (24)
costs
Operating special items and (90) - (153)
remeasurements
Associates" financing remeasurements
Fair value gain on AngloGold Ashanti 12 - -
convertible bond
Unrealised net gains and (losses) on 8 (9) 7
non-hedge derivatives
Total financing remeasurements 20 (9) 7
Associates" profits and (losses) on
disposals
Gain on partial sale of De Beers 105 - -
Consolidated Mines
Disposal of Samancor Chrome - 52 52
Disposal of Wonderkop joint venture - - 20
interest
Other items 3 16 26
Net profit on disposals 108 68 98
Total associates" special items and 38 59 (48)
remeasurements
Taxation 18 - 7
Minority interests - - 2
Net associates" special items and 56 59 (39)
remeasurements
Operating special items and remeasurements
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Operating special items (462) (55) (186)
Operating remeasurements (392) (18) (301)
(854) (73) (487)
Associates" operating special items (20) - (137)
Associates" operating remeasurements (70) - (16)
(90) - (153)
Total operating special items and (944) (73) (640)
remeasurements (including associates)
Operating special items including (482) (55) (323)
associates
Operating remeasurements including (462) (18) (317)
associates
Total operating special items and (944) (73) (640)
remeasurements (including associates)
Operating special items excluding associates of $462 million (6 months
ended 30 June 2005: $55 million; year ended 31 December 2005: $186 million)
relate principally to impairment, restructuring and closure costs.
Following the conclusion of its strategic review, Industrial Minerals has
identified certain non-core assets which are to be sold and other assets
which are to be restructured and, as such, Tarmac has recorded a combined
impairment and restructuring charge of $278 million.
On 18 May 2006 the Group announced that due to ongoing geological
difficulties, Anglo Coal intends to implement a phased reduction of
operations at Dartbrook. As such an impairment charge and closure costs of
$122 million have been recognised.
Paper and Packaging have recorded an additional impairment of $72 million
mainly of downstream converting Packaging assets as a result of continuing
challenging market conditions.
Unrealised net losses excluding associates of $392 million on non-hedge
derivatives (6 months ended 30 June 2005: $18 million; year ended 31
December 2005: $301 million) have been included in operating
remeasurements. These unrealised losses were recorded principally at
AngloGold Ashanti, during the period it was held as a subsidiary prior to
20 April 2006.
6. Special items and remeasurements (continued)
Associates" operating special items and remeasurements include $20 million
for the Group"s share of De Beers" payment in respect of class action
suits. Agreement has been reached, and a preliminary order issued, to
settle the majority of civil class action suits filed against De Beers in
the United States. This settlement does not involve any admission of
liability on the part of De Beers and will, when concluded, bring to an end
a number of outstanding class actions. In 2005, De Beers paid $250 million
($113 million attributable share) into escrow and an additional $45 million
($20 million attributable share) has been paid by De Beers into escrow
pending conclusion of the settlement process.
The Group"s share of unrealised net losses on non-hedge derivatives of
AngloGold Ashanti incurred during the period of ownership as an associate
totalled $73 million, partially offset by gains at De Beers.
Financing remeasurements
AngloGold Ashanti records the option element of its convertible bond at
fair value with changes going through the income statement following the
adoption of IAS 32 and IAS 39. As a result, a charge of $43 million (6
months ended 30 June 2005: gain of $32 million; year ended 31 December
2005: charge of $32 million) has been included in financing remeasurements,
relating to the period it was held as a subsidiary.
The Group holds US dollar preference shares issued by De Beers which are
held by a Rand functional currency subsidiary of the Group. These shares
are classified as `non-current investments" and retranslated at each period
end. As a result, a gain of $44 million (6 months ended 30 June 2005: $91
million; year ended 31 December 2005: $72 million) has been included in
financing remeasurements.
Associates" financing remeasurements
The Group"s share of the associates" financing remeasurements includes a
share of the fair value movement of the option element of the convertible
bond of AngloGold Ashanti which generated a gain of $12 million during the
period that this investment was recorded as an associate, and a share of
the unrealised gains on non-hedge financing derivatives of $8 million in De
Beers.
Profits and losses on disposals
On 20 April 2006 the Group completed the sale of 19.7 million ordinary
shares held in AngloGold Ashanti for cash of $978 million. This, together
with the Group"s non-participation in the issue of additional ordinary
shares by AngloGold Ashanti, diluted the Group"s percentage investment from
50.9% to 41.8%.
As such the Group has recorded a profit on disposal of $737 million in
respect of shares sold and a profit on the deemed disposal of $159 million,
arising from the non-participation in the issue of ordinary shares by
AngloGold Ashanti. Further details are provided in note 15.
Associates" profit and losses on disposal
In April, De Beers announced that agreements had been signed in respect of
the implementation of the De Beers" BEE transaction resulting in the sale
of an indirect 26% equity interest in De Beers Consolidated Mines Limited
to Ponahalo Holdings (Proprietary) Limited. The total agreed proceeds for
the transaction were approximately $585 million. The Group"s share of the
profit realised on the transaction was $105 million.
7. Net finance costs
Finance costs and foreign exchange gains/(losses) are presented net of
effective cash flow hedges for respective interest bearing and foreign
currency borrowings. Fair value gains/(losses) on derivatives, presented
below, include the mark-to-market value changes of interest rate and
currency derivatives designated as fair value hedges, net of fair value
changes in the associated hedged risk; and fair value changes of non-hedge
derivatives of non-operating items, including the mark-to-market of the
conversion option within the AngloGold Ashanti convertible bond, relating
to the period it was held as a subsidiary.
US$ million Before After Before After Before After
remeasu remeas remeasur remeasu remeasu remeasu
re- ur- e-ments re- re- rements
ments ments 30.06.05 ments ments 31.12.0
30.06.0 30.06. 30.06.0 31.12.0 5
6 06 5 5
Investment
income
Interest 128 128 115 115 227 227
and other
financial
income
Expected 137 137 106 106 241 241
return on
defined
benefit
arrangement
s
Foreign 32 76 - 96 20 92
exchange
gains
Dividend 5 5 3 3 10 10
income from
financial
asset
investments
Fair value - 20 - - - -
gains on
derivatives
Other fair 5 5 - 32 - -
value gains
Total 307 371 224 352 498 570
investment
income
Interest
expense
Amortisatio (17) (17) (10) (10) (42) (42)
n discount
relating to
provisions
Bank loans (148) (148) (205) (205) (320) (320)
and
overdrafts
Other loans (80) (80) (116) (116) (167) (167)
Interest (4) (4) - - (71) (71)
paid on
convertible
bonds
Unwinding (13) (13) (23) (23) (53) (53)
of discount
on
convertible
bonds
Interest on (129) (129) (116) (116) (270) (270)
defined
benefit
arrangement
s
Foreign (9) (10) - - (33) (33)
exchange
losses
Dividend on (5) (5) - - - -
redeemable
preference
shares
Fair value (2) (9) (1) (7) (19) (24)
losses on
derivatives
Other fair (1) (44) - - - (32)
value
losses
(408) (459) (471) (477) (975) (1,012)
Less: 13 13 23 23 49 49
interest
capitalised
Total (395) (446) (448) (454) (926) (963)
interest
expense
Net finance (88) (75) (224) (102) (428) (393)
cost
The weighted average interest rate applicable to interest on general
borrowings capitalised was 8.1% (6 months ended 30 June 2005: 8.9%; year
ended 31 December 2005: 8.7%).
Financing remeasurements are set out in note 6.
8. Tax on profit on ordinary activities
a) Analysis of charge for the period from continuing operations
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
United Kingdom corporation tax at 30% 28 55 15
South Africa tax 361 224 580
Other overseas tax 773 323 721
Current tax (excluding tax on special 1,162 602 1,316
items and remeasurements)
Deferred tax 156 (54) (33)
Total deferred tax (excluding tax on 156 (54) (33)
special items and remeasurements)
Total tax on special items and (116) (22) (8)
remeasurements
Total tax charge 1,202 526 1,275
b) Factors
c) affecting tax charge for the period
The effective tax rate for the period of 27.5% (6 months ended 30 June
2005: 19.8%; year ended 31 December 2005: 24.5%), after adjusting profits
for the net income from associates, is lower than the standard rate of
corporation tax in the United Kingdom (30%). The differences are explained
below:
US$ million 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Profit on ordinary activities before 4,373 2,657 5,208
tax
Tax on profit on ordinary activities 1,312
calculated at United Kingdom 797 1,562
corporation tax rate of 30%
Tax effect of net income from (111) (122) (197)
associates
Tax effects of:
Expenses not deductible for tax
purposes
Operating special items and 113 11 110
remeasurements
Exploration costs 10 15 21
Other non-deductible expenses 5 55 92
Non-taxable income
Profits and losses on disposals and (255) (47) (9)
remeasurements
Other non-taxable income (73) (67) (113)
Temporary difference adjustments
Changes in tax rates - (136) (187)
Movement in tax losses (49) (9) (30)
Other temporary differences 7 1 (23)
Other adjustments
South African secondary tax on 144 49 160
companies
Effect of differences between local 74 (15) (108)
and UK rates
Other adjustments 25 (6) (3)
Tax charge for the period 1,202 526 1,275
IAS 1 requires income from associates to be presented net of tax on the
face of the income statement. The associates" tax is no longer included
within the Group"s total tax charge. Associates" tax included within `Net
income from associates" for the 6 months ended 30 June 2006 is $166 million
(6 months ended 30 June 2005: $185 million; year ended 31 December 2005:
$274 million).
The effective rate of taxation including share of associates" tax before
special items and remeasurements for the 6 months ended 30 June 2006 was
33.9%. This was an increase from the effective rate of 26.8% in the 6
months ended 30 June 2005. The June 2005 tax rate benefited from the one-
off impact of a reduction in the statutory tax rates in South Africa and
Ghana. Without this benefit the effective tax rate would have been 31.7%.
The June 2006 tax rate reflects the relative impact of the statutory tax
rates, on a fully distributed basis where appropriate, of the countries in
which the Group operates. In future periods it is expected that the
effective tax rate, including associates" tax, will remain above the UK
statutory tax rate of 30%.
9. Earnings per share
US$ 6 months 6 months Year
ended ended ended
30.06.06 30.06.05 31.12.05
Profit for the financial period
attributable to equity
shareholders
Basic earnings per share 2.00 1.27 2.43
Diluted earnings per share 1.94 1.23 2.36
Headline earnings for the
financial period(1)
Basic earnings per share 1.56 1.24 2.43
Diluted earnings per share 1.51 1.19 2.36
Underlying earnings for the
financial period(1)
Basic earnings per share 1.70 1.18 2.58
Diluted earnings per share 1.65
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