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Consolidated cash flow statement
for the year ended 31 December 2006
US$ million Note 2006 2005
Cash inflows from operations 13 10,057 7,265
Dividends from associates 276 461
Dividends from financial asset investments 12 9
Income tax paid (2,035) (954)
Net cash inflows from operating activities 8,310 6,781
Cash flows from investing activities
Acquisition of subsidiaries, net of cash and
cash
equivalents acquired 15 (286) (298)
Investment in associates (11) (29)
Investment in joint ventures (7) -
Purchase of tangible assets 10 (3,686) (3,306)
Investment in biological assets 10 (64) (55)
Purchase of financial asset investments (40) (203)
Loans granted to related parties (72) -
Interest received and other investment income 240 210
Disposal of subsidiaries, net of cash and cash
equivalents disposed 16 1,520 419
Sale of interests in joint ventures 2 2
Sale of interests in associates 40 11
Repayment of loans and capital from associates 394 370
Proceeds from disposal of tangible assets 124 327
Proceeds from sale of financial asset
investments 80 245
Loan repayments from related parties - 1
Utilised in hedge restructure - (69)
Other investing activities (39) (18)
Net cash used in investing activities (1,805) (2,393)
Cash flows from financing activities
Cash inflow from current financial asset
investments 5 13
Issue of shares by subsidiaries to minority
interests 71 73
Sale of treasury shares to employees 259 240
Purchase of treasury shares (3,922) -
Interest paid (426) (547)
Dividends paid to minority interests (383) (421)
Dividends paid to Company shareholders (2,888) (1,137)
Receipt/(repayment) of short term borrowings 197 (1,356)
Receipt/(repayment) of medium and long term
borrowings 386 (632)
Capital element of finance leases (16) -
Other financing activities 42 (19)
Net cash used in financing activities (6,675) (3,786)
Net (decrease)/increase in cash and cash
equivalents (170) 602
Cash and cash equivalents at start of year 13 3,319 2,781
Cash movements in the year (170) 602
Effects of changes in foreign exchange rates (169) (64)
Cash and cash equivalents at end of year 13 2,980 3,319
Consolidated statement of recognised income and expense
for the year ended 31 December 2006
US$ million 2006 2005
Net gains on revaluation of available for sale investments 492 31
Impairment of available for sale investments (13) -
Loss on cash flow hedges (502) (316)
Loss on cash flow hedges - associates (117) -
Exchange losses on translation of foreign operations (439) (2,182)
Actuarial net gains/(losses) on post-retirement benefit
schemes 102 (171)
Actuarial net gains/(losses) on post-retirement benefit
schemes - associates 3 (24)
Deferred tax 60 140
Other movements - 5
Net expense recognised directly in equity (414) (2,517)
Transferred to income statement: sale of available for
sale investments (27) (32)
Transferred to income statement: impairment of available
for sale investments 13 -
Transferred to income statement: cash flow hedges 148 (8)
Transferred to income statement: exchange differences on
disposal of foreign operations 9 -
Tax on items transferred from equity (33) -
Total transferred to/(from) equity 110 (40)
Profit for the year 6,922 3,933
Total recognised income and expense for the year 6,618 1,376
Attributable to:
Minority interests 603 82
Equity shareholders of the Company 6,015 1,294
Notes to the financial information
1. General information
The financial information for the year ended 31 December 2006 does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. Statutory accounts for the year ended 31 December 2005 have been
delivered to the Registrar of Companies and those for 2006 will be delivered
following the Company`s annual general meeting convened for Tuesday, 17 April
2007. The auditors have reported on these accounts; their reports were
unqualified and did not contain statements under Section 237 (2) or (3) of the
Companies Act 1985.
2. Basis of preparation
Whilst the preliminary announcement has been prepared in accordance with
International Financial Reporting Standards (IFRS) and IFRIC interpretations
adopted for use by the European Union and with those parts of the Companies Act
1985 applicable to companies reporting under IFRS, this announcement does not
itself contain sufficient information to comply with IFRS. The Group will
publish full financial statements that comply with IFRS in March 2007. The
financial statements have been prepared under the historical cost convention as
modified by the recording of pension assets and liabilities and the revaluation
of biological assets and certain financial instruments.
The accounting policies applied are consistent with those adopted and disclosed
in the Group`s annual financial statements for the year ended 31 December 2005,
with the exception of adopting the following standards and interpretations as
at 31 December 2006:
IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting
in Hyperinflationary Economies
IFRIC 8 Scope of IFRS 2
IFRIC 9 Reassessment of embedded derivatives
IFRIC 10 Interim Financial Reporting and Impairment
These have not had a material impact on the Group.
3. Segmental information
Based on risks and returns the directors consider the primary reporting format
is by business segment and the secondary reporting format is by geographical
segment.
The analysis of associates` revenue by business segment is provided here for
completeness and consistency.
On 20 April 2006 the Group completed the sale of 19.7 million ordinary shares
held in AngloGold Ashanti Limited for cash of $978 million. This, together with
the Group`s non-participation in the issue of ordinary shares throughout the
year by AngloGold Ashanti, diluted the Group`s percentage investment from 50.9%
to 41.7%.
As a result of this, the Group is no longer considered to `control` AngloGold
Ashanti and therefore the investment is now reflected in the Group accounts on
an equity accounted basis. This change in accounting treatment is effective
from the date of sale and therefore the current year includes AngloGold
Ashanti`s 100% consolidated contribution to profit for the period 1 January to
20 April 2006 and the appropriate share of AngloGold Ashanti`s profit for the
period after 20 April 2006 until the year end.
3. Segmental information (continued)
Primary reporting format - by business segment
Segment
revenue(1)
US$ million 2006 2005
Subsidiaries and joint ventures
Platinum 5,766 3,646
Gold 857 2,629
Coal 2,726 2,766
Base Metals 6,252 3,647
Industrial Minerals 4,274 4,043
Ferrous Metals and Industries 5,973 6,030
Paper and Packaging 7,224 6,673
Exploration - -
Corporate Activities - -
33,072(3) 29,434(3)
Total subsidiaries and joint ventures
Revenue and net income from associates
Platinum 95 68
Gold 883 15
Diamonds 3,148 3,316
Coal 607 583
Industrial Minerals 17 30
Ferrous Metals and Industries 546 743
Paper and Packaging 269 283
Total associates 5,565 5,038
Total Group operations including net income
from associates 38,637 34,472
Net profit on disposals
Total profit from operations and associates
Segment result
before
special items and
remeasurements(2)
US$ million 2006 2005
Subsidiaries and joint ventures
Platinum 2,337 835
Gold 228 332
Coal 607 752
Base Metals 3,876 1,678
Industrial Minerals 334 366
Ferrous Metals and Industries 1,303 1,308
Paper and Packaging 466 484
Exploration (132) (150)
Corporate Activities (277) (261)
8,742 5,344
Total subsidiaries and joint ventures
Revenue and net income from associates
Platinum 40 12
Gold 113 -
Diamonds 199 386
Coal 185 192
Industrial Minerals 1 3
Ferrous Metals and Industries 38 96
Paper and Packaging 6 7
Total associates 582 696
Total Group operations including net income
from associates 9,324 6,040
Net profit on disposals
Total profit from operations and associates
Segment result
after
special items and
remeasurements
US$ million 2006 2005
Subsidiaries and joint ventures
Platinum 2,337 835
Gold (142) (50)
Coal 482 753
Base Metals 3,884 1,667
Industrial Minerals 37 350
Ferrous Metals and Industries 1,324 1,312
Paper and Packaging 374 401
Exploration (132) (150)
Corporate Activities (290) (261)
7,874 4,857
Total subsidiaries and joint ventures
Revenue and net income from associates
Platinum 40 12
Gold 72 (2)
Diamonds 337 257
Coal 185 192
Industrial Minerals 1 3
Ferrous Metals and Industries 44 189
Paper and Packaging 6 6
Total associates 685 657
Total Group operations including net income
from associates 8,559 5,514
Net profit on disposals 1,168 87
Total profit from operations and associates 9,727 5,601
Footnotes (1) and (2) are to be found on the following page.
(3) This represents segment revenue; the Group`s share of associates` revenue
figures are provided for additional information.
For information, a segmental analysis of associates` operating profit is set
out below to show operating profit for total Group operations including
associates.
Operating profit
before
special items and
remeasurements
US$ million 2006 2005
Total subsidiaries and joint ventures 8,742 5,344
Associates
Platinum 61 19
Gold 239 -
Diamonds 463 583
Coal 257 267
Industrial Minerals 2 4
Ferrous Metals and Industries 57 148
Paper and Packaging 11 11
Total associates 1,090 1,032
Total Group operations including operating profit from
associates 9,832 6,376
Operating profit
after
special items and
remeasurements
US$ million 2006 2005
Total subsidiaries and joint ventures 7,874 4,857
Associates
Platinum 61 19
Gold 133 (2)
Diamonds 446 431
Coal 257 267
Industrial Minerals 2 4
Ferrous Metals and Industries 57 149
Paper and Packaging 11 11
Total associates 967 879
Total Group operations including operating profit from
associates 8,841 5,736
3. Segmental information (continued)
Primary reporting format - by business segment (continued)
(1) By-product revenue credited to Group cost of sales for the year ended 31
December 2006 was $34 million (2005: $76 million) and related principally to
AngloGold Ashanti`s contribution as a subsidiary; AngloGold Ashanti credit
sales of uranium, silver and acid to cost of sales in accordance with the Gold
Industry Standard on production cost.
(2) Segment result is defined as being segment revenue less segment expense;
that is operating profit and gains and losses from foreign currency derivatives
that have been recycled in the income statement being cash flow hedges of sales
and purchases. In addition Share of net income from associates is shown by
segment. There are no material inter-segment transfers or transactions that
would affect the segment result. Special items and remeasurements are set out
in note 6. Associates` operating profit is reconciled to `Share of net income
from associates` as follows:
US$ million 2006 2005
Operating profit from associates before special items and
remeasurements 1,090 1,032
Operating special items and remeasurements (123) (153)
Operating profit from associates after special items and
remeasurements 967 879
Net profit on disposals 199 98
Financing remeasurements 26 7
Net finance costs (before remeasurements) (101) (51)
Income tax expense (after special items and remeasurements) (368) (274)
Underlying minority interest (after special items and
remeasurements) (38) (2)
Share of net income from associates 685 657
The segment result and associates` operating profit before special items and
remeasurements, as shown above, is reconciled to `Profit for the financial
year` as follows:
US$ million 2006 2005
Operating profit, including associates, before special
items and remeasurements
9,832 6,376
Operating special items and remeasurements:
Subsidiaries and joint ventures (868) (487)
Gold (370) (382)
Coal (125) 1
Base Metals 8 (11)
Industrial Minerals (297) (16)
Ferrous Metals and Industries 21 4
Paper and Packaging (92) (83)
Corporate Activities (13) -
Associates (123) (153)
Gold (106) (2)
Diamonds (17) (152)
Ferrous Metals and Industries - 1
Operating profit, including associates, after special
items and remeasurements 8,841 5,736
Net profit on disposals
Subsidiaries and joint ventures 1,168 87
Associates 199 98
Associates` net finance costs (101) (51)
Associates` financing remeasurements 26 7
Associates` income tax expense (369) (281)
Associates` tax on special items and remeasurements 1 7
Associates` minority interests (38) (4)
Associates` minority interests on special items and
remeasurements - 2
Total profit from operations and associates 9,727 5,601
Net finance costs before special items and
remeasurements (165) (428)
Financing special items (4) -
Financing remeasurements 4 35
Profit before tax 9,562 5,208
Income tax expense (2,640) (1,275)
Profit for the financial year 6,922 3,933
3. Segmental information (continued)
Primary reporting format - by business segment (continued)
Primary segment disclosures for segment assets, liabilities and capital
expenditure are as follows:
Segment assets(1)
US$ million 2006 2005
Platinum 7,721 7,550
Gold - 7,890
Coal 3,646 3,024
Base Metals 4,899 5,358
Industrial Minerals 5,487 5,041
Ferrous Metals and Industries 3,529 5,341
Paper and Packaging 8,113 7,400
Exploration 1 -
Corporate Activities 200 251
33,596 41,855
Unallocated
Investment in associates 4,780 3,165
Financial asset investments 1,973 915
Deferred tax assets/(liabilities) 372 337
Cash and cash equivalents 3,004 3,430
Other financial assets/(liabilities) -
(derivatives) 329 930
Other non-operating assets/
(liabilities) 2,429 1,258
Other provisions - -
Borrowings - -
Net assets 46,483 51,890
Segment liabilities(2)
US$ million 2006 2005
Platinum (643) (532)
Gold - (908)
Coal (784) (780)
Base Metals (631) (573)
Industrial Minerals (963) (1,059)
Ferrous Metals and Industries (733) (902)
Paper and Packaging (1,094) (1,035)
Exploration (2) (3)
Corporate Activities (404) (310)
(5,254) (6,102)
Unallocated
Investment in associates - -
Financial asset investments - -
Deferred tax assets/(liabilities) (3,687) (5,201)
Cash and cash equivalents - -
Other financial assets/(liabilities) -
(derivatives) (520) (1,794)
Other non-operating assets/
(liabilities) (3,308) (2,420)
Other provisions (339) (356)
Borrowings (6,248) (8,439)
Net assets (19,356) (24,312)
Net segment assets
US$ million 2006 2005
Platinum 7,078 7,018
Gold - 6,982
Coal 2,862 2,244
Base Metals 4,268 4,785
Industrial Minerals 4,524 3,982
Ferrous Metals and Industries 2,796 4,439
Paper and Packaging 7,019 6,365
Exploration (1) (3)
Corporate Activities (204) (59)
28,342 35,753
Unallocated
Investment in associates 4,780 3,165
Financial asset investments 1,973 915
Deferred tax assets/(liabilities) (3,315) (4,864)
Cash and cash equivalents 3,004 3,430
Other financial assets/(liabilities) -
(864)
(derivatives) (191)
Other non-operating assets/
(liabilities) (879) (1,162)
Other provisions (339) (356)
Borrowings (6,248) (8,439)
Net assets 27,127 27,578
Capital expenditure(3)
US$ million 2006 2005
Platinum 935 685
Gold 196 721
Coal 789 331
Base Metals 298 273
Industrial Minerals 402 312
Ferrous Metals and Industries 660 376
Paper and Packaging 704 703
Exploration - -
Corporate Activities 29 27
4,013 3,428
Unallocated
Investment in associates
Financial asset investments
Deferred tax assets/(liabilities)
Cash and cash equivalents
Other financial assets/(liabilities) -
(derivatives)
Other non-operating assets/
(liabilities)
Other provisions
Borrowings
Net assets
(1) Segment assets at 31 December 2006 are operating assets and consist
primarily of tangible assets ($23,498 million), intangible assets ($2,134
million), biological assets ($324 million), environmental rehabilitation trusts
($197 million), inventories ($2,974 million), pension and post-retirement
healthcare assets ($110 million) and operating receivables ($4,359 million).
Segment assets at 31 December 2005 are operating assets and consist primarily
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 healthcare
assets ($77 million) and operating receivables ($4,203 million).
(2) Segment liabilities at 31 December 2006 are operating liabilities and
consist primarily of non-interest bearing current liabilities ($3,732 million),
restoration and decommissioning provisions ($747 million) and provisions for
post-retirement benefits ($775 million). Segment liabilities at 31 December
2005 are operating liabilities and consist primarily of non-interest bearing
current liabilities ($3,749 million), restoration and decommissioning
provisions ($1,095 million) and provisions for post- retirement benefits
($1,258 million).
(3) Capital expenditure reflects cash payments and accruals in respect of
additions to tangible assets and intangible assets $3,711 million (2005: $3,377
million) and includes additions resulting from acquisitions through business
combinations $302 million (2005: $51 million).
Other primary segment items included in the income statement are as follows:
Depreciation and amortisation
US$ million 2006 2005
Platinum 444 428
Gold 183 538
Coal 172 188
Base Metals 338 312
Industrial Minerals 244 248
Ferrous Metals and Industries 199 300
Paper and Packaging 439 411
Exploration - -
Corporate Activities 17 16
2,036 2,441
(Impairments)/reversal(1)
US$ million 2006 2005
Platinum - -
Gold - (96)
Coal (115) -
Base Metals - 1
Industrial Minerals (283) (16)
Ferrous Metals and Industries 11 8
Paper and Packaging (100) (83)
Exploration - -
Corporate Activities (13) -
(500) (186)
Other non-cash expense(2)
US$ million 2006 2005
Platinum 72 55
Gold 12 50
Coal 27 14
Base Metals 127 68
Industrial Minerals 17 36
Ferrous Metals and Industries 37 56
Paper and Packaging 21 17
Exploration 2 1
Corporate Activities 40 41
355 338
(1) See operating special items in note 6.
(2) Other non-cash expenses include share-based payment charges and charges in
respect of environmental rehabilitation provisions and other provisions.
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.
Revenue
US$ million 2006 2005
Subsidiaries and joint ventures
South Africa 5,788 5,280
Rest of Africa 607 505
Europe 14,640 13,629
North America 2,349 2,740
South America 2,831 1,723
Australia and Asia 6,857 5,557
Total subsidiaries and joint ventures 33,072 29,434
Associates
South Africa 463 169
Rest of Africa 22 40
Europe 1,609 1,500
North America 1,898 1,768
South America 40 29
Australia and Asia 1,533 1,532
Total associates 5,565 5,038
Total Group operations including associates 38,637 34,472
The Group`s geographical analysis of segment assets, liabilities and capital
expenditure, allocated based on where assets and liabilities are located, is:
Segment assets
US$ million 2006 2005
South Africa 14,144 18,965
Rest of Africa 732 4,142
Europe 11,208 10,048
North America 388 500
South America 4,594 5,124
Australia and Asia 2,530 3,076
33,596 41,855
Segment liabilities
US$ million 2006 2005
South Africa (2,056) (2,689)
Rest of Africa (82) (298)
Europe (1,858) (1,926)
North America (108) (59)
South America (646) (543)
Australia and Asia (504) (587)
(5,254) (6,102)
Net segment assets
US$ million 2006 2005
South Africa 12,088 16,276
Rest of Africa 650 3,844
Europe 9,350 8,122
North America 280 441
South America 3,948 4,581
Australia and Asia 2,026 2,489
28,342 35,753
Capital expenditure
US$ million 2006 2005
South Africa 1,935 1,890
Rest of Africa 75 261
Europe 927 658
North America 202 28
South America 301 317
Australia and Asia 573 274
4,013 3,428
Additional geographical analysis by origin is as follows:
Revenue
US$ million 2006 2005
Subsidiaries and joint ventures
South Africa 13,123 11,981
Rest of Africa 717 1,193
Europe 11,178 9,748
North America 386 531
South America 5,786 3,873
Australia and Asia 1,882 2,108
Total subsidiaries and joint ventures 33,072 29,434
Associates
South Africa 1,358 1,479
Rest of Africa 2,365 2,138
Europe 722 753
North America 66 -
South America 647 525
Australia and Asia 407 143
Total associates 5,565 5,038
Total Group operations including associates 38,637 34,472
Operating profit
before special items
and remeasurements(1)
US$ million 2006 2005
Subsidiaries and joint ventures
South Africa 3,969 2,651
Rest of Africa 213 63
Europe 844 694
North America 26 27
South America 3,423 1,732
Australia and Asia 267 177
Total subsidiaries and joint ventures 8,742 5,344
Associates
South Africa 275 217
Rest of Africa 383 468
Europe 108 47
North America 33 -
South America 212 189
Australia and Asia 79 111
Total associates 1,090 1,032
Total Group operations including associates 9,832 6,376
Operating profit
after special items
and remeasurements
US$ million 2006 2005
Subsidiaries and joint ventures
South Africa 3,827 2,482
Rest of Africa 16 (156)
Europe 475 600
North America 3 (11)
South America 3,390 1,704
Australia and Asia 163 238
Total subsidiaries and joint ventures 7,874 4,857
Associates
South Africa 238 193
Rest of Africa 330 356
Europe 107 30
North America 2 -
South America 206 189
Australia and Asia 84 111
Total associates 967 879
Total Group operations including associates 8,841 5,736
(1) Special items and remeasurements are set out in note 6.
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