| Wed 21 Feb 2007, 11:03 | | Anglo final results cont. 4 |
|
4. Profit for the financial year
The table below analyses the contribution of each business segment to the
Group`s operating profit including operating profit from associates for the
financial year 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 year` to `Underlying earnings for the financial year`
is given in note 9. Group operating profit including operating profit from
associates is reconciled to `Profit for the financial year` in the table below:
Operating Operating
profit/(loss) before profit/(loss) after
special items and special items and
remeasurements(1) remeasurements
US$ million
By business segment
Platinum 2,398 2,398
Gold 467 (9)
Diamonds 463 446
Coal 864 739
Base Metals 3,876 3,884
Industrial Minerals 336 39
Ferrous Metals and Industries 1,360 1,381
Paper and Packaging 477 385
Exploration (132) (132)
Corporate Activities (277) (290)
Total / Underlying earnings 9,832 8,841
Underlying earnings adjustments
Profit for the financial year
attributable to
equity shareholders of the
Company
Operating special
items and Net profit on
remeasurements(2) disposals(2)
US$ million
By business segment
Platinum - -
Gold 476 -
Diamonds 17 -
Coal 125 -
Base Metals (8) -
Industrial Minerals 297 -
Ferrous Metals and Industries (21) -
Paper and Packaging 92 -
Exploration - -
Corporate Activities 13 -
Total / Underlying earnings 991 -
Underlying earnings adjustments (991) 1,367
Profit for the financial year
attributable to
equity shareholders of the Company
Net interest,
Financing tax and
special items and minority 2006
remeasurements (2) interests Total
US$ million
By business segment
Platinum - (1,133) 1,265
Gold - (289) 178
Diamonds - (236) 227
Coal - (224) 640
Base Metals - (1,229) 2,647
Industrial Minerals - (70) 266
Ferrous Metals and Industries - (777) 583
Paper and Packaging - (203) 274
Exploration - 19 (113)
Corporate Activities - (219) (496)
Total / Underlying earnings - (4,361) 5,471
Underlying earnings
adjustments 26 313 715
Profit for the financial
year attributable to
equity shareholders of the
Company 6,186
Operating profit/(loss) Operating
before profit/(loss) after
special items and special items and
remeasurements(1) remeasurements
US$ million
By business segment
Platinum 854 854
Gold 332 (52)
Diamonds 583 431
Coal 1,019 1,020
Base Metals 1,678 1,667
Industrial Minerals 370 354
Ferrous Metals and
Industries 1,456 1,461
Paper and Packaging 495 412
Exploration (150) (150)
Corporate Activities (261) (261)
Total / Underlying earnings 6,376 5,736
Underlying earnings
adjustments
Profit for the financial
year attributable
to equity shareholders of
the Company
Operating special
items and Net profit on
remeasurements(2) disposals(2)
US$ million
By business segment
Platinum - -
Gold 384 -
Diamonds 152 -
Coal (1) -
Base Metals 11 -
Industrial Minerals 16 -
Ferrous Metals and Industries (5) -
Paper and Packaging 83 -
Exploration - -
Corporate Activities - -
Total / Underlying earnings 640 -
Underlying earnings adjustments (640) 185
Profit for the financial year
attributable
to equity shareholders of the Company
Net interest,
Financing tax and
special items and minority 2005
remeasurements (2) interests Total
US$ million
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
42 198 (215)
Underlying earnings
adjustments
Profit for the financial
year attributable
to equity shareholders of
the Company 3,521
(1) Operating profit includes associates` operating profit which is reconciled
to `Share of net income from associates` in note 3.
(2) Special items and remeasurements are set out in note 6.
5. Exploration expenditure
US$ million 2006 2005
By business segment
Platinum 30 21
Gold(1) 16 45
Coal 24 13
Base Metals 53 50
Ferrous Metals and Industries 9 21
132 150
(1) Relating to the period that AngloGold Ashanti was held as a subsidiary.
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 year`s results and require separate disclosure in accordance with IAS 1
Presentation of financial statements paragraph 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 year end and the reversal of the historical
marked-to-market value of the instruments settled in the year, such that the
full realised gain or loss is recorded in underlying earnings in the same year
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)
Subsidiaries and joint ventures
US$ million 2006 2005
Operating special items
Impairment of Tarmac assets and restructuring costs (278) (12)
Impairment and closure costs of Dartbrook (125) -
Impairment of Packaging assets (80) -
Impairment of Business Paper assets (24) -
Impairment of Corrugated assets, goodwill and restructuring
costs - (77)
Impairment of Bibiani - (38)
Closure of Ergo - (31)
Other (17) (28)
Total operating special items (524) (186)
Taxation 114 14
Minority interests 2 38
Total attributable to equity shareholders of the Company (408) (134)
Operating remeasurements
Unrealised net losses on non-hedge derivatives (344) (301)
Taxation 42 22
Minority interests 159 130
Total attributable to equity shareholders of the Company (143) (149)
Financing special items
Financing special items (4) -
Taxation - -
Minority interests - -
Total attributable to equity shareholders of the Company (4) -
Financing remeasurements
Fair value loss on AngloGold Ashanti convertible bond (43) (32)
Foreign exchange gain on De Beers` preference shares 40 72
Unrealised net gains/(losses) on non-hedge derivatives 7 (5)
Total financing remeasurements 4 35
Taxation (1) (2)
Minority interests 21 16
Total attributable to equity shareholders of the Company 24 49
6. Special items and remeasurements (continued)
US$ million 2006 2005
Profits and (losses) on disposals
Part disposal of AngloGold Ashanti(1) 737 -
Deemed disposal of AngloGold Ashanti(1) 172 -
Part disposal of Highveld(1) 301 -
Part disposal of Kumba non-iron ore(1) (52) -
Bakgatla-Ba-Kgafela BEE transaction (84) -
Part disposal of Western Areas 31 14
Disposal of mineral rights - Anglo American Brazil 14 -
Disposal of interests in Eyesizwe 17 -
Disposal of Ferroveld joint venture 13 -
Formation of Marikana joint venture - 27
Disposal of Acerinox - 25
Disposal of Wendt - 21
Disposal of Boart Longyear - 21
Disposal of Elandsfontein - 18
Disposal of Columbus - 14
Disposal of Hope Downs - (57)
Part disposal of Mondi Packaging South Africa - (12)
Other items 19 16
Net profit on disposals(2) 1,168 87
Taxation (32) (26)
Minority interests 7 (3)
Total attributable to equity shareholders of the Company 1,143 58
Total special items and remeasurements before tax and
minority interests 300 (365)
Taxation 123 8
Minority interests 189 181
Total special items and remeasurements attributable to
equity shareholders
of the Company 612 (176)
(1) See disposals of subsidiaries and businesses note 16.
(2) Includes associated IFRS 2 charges on BEE transactions of $34 million
(2005: nil).
Associates
US$ million 2006 2005
Associates` special items and remeasurements
Share of De Beers` class action payment and related costs (25) (113)
Unrealised net losses on non-hedge derivatives (85) (16)
Other impairments and restructuring costs (13) (24)
Operating special items and remeasurements (123) (153)
Associates` financing remeasurements
Fair value gain on AngloGold Ashanti convertible bond 25 -
Unrealised net gains on non-hedge derivatives 1 7
Total financing remeasurements 26 7
Associates` profits on disposals
Part disposal of De Beers Consolidated Mines 103 -
Disposal of Fort a la Corne 69 -
Disposal of Samancor Chrome - 52
Disposal of Wonderkop joint venture interest - 20
Other items (net) 27 26
Net profit on disposals 199 98
6. Special items and remeasurements (continued)
US$ million 2006 2005
Total associates` special items and remeasurements 102 (48)
Taxation 1 7
Minority interests - 2
Net associates` special items and remeasurements 103 (39)
Group
US$ million 2006 2005
Operating special items (524) (186)
Operating remeasurements (344) (301)
Total operating special items and remeasurements
(excluding associates) (868) (487)
Associates` operating special items (38) (137)
Associates` operating remeasurements (85) (16)
Total associates` operating special items
and remeasurements (123) (153)
Total operating special items and remeasurements
(including associates) (991) (640)
Operating special items including associates (562) (323)
Operating remeasurements including associates (429) (317)
Total operating special items and remeasurements
(including associates) (991) (640)
Special items and remeasurements
Operating special items of $524 million (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 $125 million have been
recognised.
Paper and Packaging have recorded an additional impairment of $80 million
mainly of certain downstream fixed packaging assets as a result of continued
challenging market conditions and $24 million at Mondi Business Paper of fixed
assets at the Austrian businesses.
The impairment of Tarmac assets brings the carrying value in line with fair
value (less costs to sell). Fair value was determined using detailed cash flow
models.
The impairment of Dartbrook and Paper and Packaging assets were based on
`value-in-use` assessments of recoverable amount using a pre-tax, risk free
discount rate which equated to a post tax rate of 6%.
Unrealised net losses of $344 million (2005: $301 million) on non-hedge
derivatives 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 and relate to fair value movements
on commodity derivatives.
6. Special items and remeasurements (continued)
Associates` special items and remeasurements
Associates` operating special items and remeasurements include $25 million for
the Group`s share of De Beers` payment in respect of class action suits ($20
million) and related legal costs ($5 million). 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
partially offset by gains at De Beers, totalled $85 million.
Financing remeasurements
The option element of AngloGold Ashanti`s convertible bond is recorded at fair
value with changes going through the income statement in accordance with IAS 32
Financial Instruments: Disclosure and Presentation and IAS 39 Financial
Instruments: Recognition and Measurement. As a result, a charge of $43 million
(2005: $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
in a rand functional currency subsidiary of the Group. These shares are
classified as `non-current investments` and are retranslated at each period
end. As a result, a gain of $40 million (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 AngloGold Ashanti
convertible bond which generated a gain of $25 million during the period that
this investment was recorded as an associate, and a share of the net unrealised
gains on non-hedge financing derivatives of $1 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 throughout
the year by AngloGold Ashanti, diluted the Group`s percentage investment from
50.9% to 41.7%. 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 $172
million, arising from the non-participation in the issue of ordinary shares by
AngloGold Ashanti.
On 14 July 2006, the Group announced the sale of Anglo American`s 79% stake in
Highveld Steel and Vanadium Corporation Limited to Evraz Group SA and Credit
Suisse for a total consideration of $678 million. An initial 49.8% was sold for
$412 million, with Evraz Group SA and Credit Suisse each acquiring a 24.9%
holding. Evraz Group SA has an option to acquire Anglo American`s remaining
29.2% in Highveld for $266 million. Anglo American and Credit Suisse have
agreed that Anglo American will retain the voting rights in respect of the
shares acquired by Credit Suisse until such time as Anglo American disposes of
all of its shares in Highveld Steel and Vanadium Corporation. As a result, the
Group continues to consolidate Highveld Steel and Vanadium Corporation (while
recording an increase in minority interest) and has recorded a profit on the
disposal of $301 million.
On 28 November 2006 the Kumba Resources BEE transaction was effected. Kumba
Iron Ore was accordingly unbundled from Kumba Resources, with the remainder of
the entity being renamed Exxaro. The Group disposed of part of its investment
in Exxaro through a share buyback and sale of shares and recorded a loss on
disposal of $52 million.
Platinum has recorded a loss of $84 million on the conclusion of the BEE
transaction with the Bakgatla-Ba-Kgafela traditional community, announced on 8
November 2006, in which the Bakgatla has acquired a 15% interest in Anglo
Platinum`s Rustenburg Platinum Mines` Union section mining and concentrating
business and interests in the prospecting rights of the Rooderand 46 JQ,
portion 2 and Magazynskraal 3 JQ properties.
6. Special items and remeasurements (continued)
Associates` profits and losses on disposals
In April 2006, 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 $585 million. The Group`s share of the profit realised on the transaction
was $103 million.
De Beers Canada disposed of its interest in the Fort a la Corne joint venture
for C$180 million in September 2006.
A profit of $155 million (attributable share $69 million) was generated on the
disposal.
7. Net finance costs
Finance costs and exchange gains/(losses) are presented net of effective cash
flow hedges for respective interest bearing and foreign currency borrowings.
Fair value gains/(losses) on derivatives, presented below, include the
mark-to-market value changes of interest rate and currency derivatives
designated as fair value hedges, net of fair value changes in the associated
hedged risk; and fair value changes of non-hedge derivatives of non-operating
items.
Before special After special
items and items and
remeasurements remeasurements
2006 2006
US$ million
Investment income
Interest and other financial income 269 269
Expected return on defined benefit
arrangements 265 265
Foreign exchange gains 54 94
Dividend income from financial asset
investments 14 14
Fair value gains on derivatives - 17
Other fair value gains 7 7
Total investment income 609 666
Interest expense
Amortisation discount relating to
provisions (39) (39)
Bank loans and overdrafts (294) (294)
Other loans (122) (122)
Interest paid on convertible bonds (5) (5)
Unwinding of discount on convertible bonds (13) (13)
Interest on defined benefit arrangements (274) (274)
Foreign exchange losses (19) (20)
Dividend on redeemable preference shares (22) (22)
Fair value losses on derivatives (2) (11)
Other fair value losses - (47)
(790) (847)
Less: interest capitalised 16 16
Total interest expense (774) (831)
Net finance cost (165) (165)
Before special After special
items and items and
remeasurements remeasurements
2005 2005
US$ million
Investment income
Interest and other financial income 227 227
Expected return on defined benefit
arrangements 241 241
Foreign exchange gains 20 92
Dividend income from financial asset
investments 10 10
Fair value gains on derivatives - -
Other fair value gains - -
Total investment income 498 570
Interest expense
Amortisation discount relating to
provisions (42) (42)
Bank loans and overdrafts (320) (320)
Other loans (167) (167)
Interest paid on convertible bonds (71) (71)
Unwinding of discount on convertible bonds (53) (53)
Interest on defined benefit arrangements (270) (270)
Foreign exchange losses (33) (33)
Dividend on redeemable preference shares - -
Fair value losses on derivatives (19) (24)
Other fair value losses - (32)
(975) (1,012)
Less: interest capitalised 49 49
Total interest expense (926) (963)
Net finance cost (428) (393)
The weighted average interest rate applicable to interest on general borrowings
capitalised was 8.2% (2005: 8.7%).
Financing remeasurements are set out in note 6.
8. Tax on profit on ordinary activities
a) Analysis of charge for the year from continuing operations
US$ million 2006 2005
United Kingdom corporation tax at 30% 28 15
South Africa tax 894 580
Other overseas tax 1,558 721
Current tax (excluding tax on special items and
remeasurements) 2,480 1,316
Total deferred tax (excluding tax on special items and
remeasurements) 283 (33)
Total tax on special items and remeasurements (123) (8)
Total tax charge 2,640 1,275
b) Factors affecting tax charge for the year
The effective tax rate for the year of 27.6% (2005: 24.5%) is lower than the
standard rate of corporation tax in the United Kingdom (30%). The differences
are explained below:
US$ million 2006 2005(1)
Profit on ordinary activities before tax 9,562 5,208
Tax on profit on ordinary activities calculated at
United Kingdom
corporation tax rate of 30% 2,869 1,562
Tax effect of net income from associates (206) (197)
Tax effects of:
Expenses not deductible for tax purposes
Operating special items and remeasurements 104 110
Exploration costs 13 21
Other non-deductible expenses 79 92
Non-taxable income
Profits and losses on disposals and remeasurements (317) (9)
Other non-taxable income (66) (113)
Temporary difference adjustments
Changes in tax rates - (187)
Movement in tax losses (80) (30)
Other temporary differences (13) (23)
Other adjustments
South African secondary tax on companies 228 160
Effect of differences between local and UK rates 53 (108)
Other adjustments (24) (3)
Tax charge for the year 2,640 1,275
(1) The 2005 comparative figures have been reclassified to align with
current year presentation.
IAS 1 requires income from associates to be presented net of tax on the face of
the income statement. The associates` tax is therefore not included within the
Group`s total tax charge. Associates` tax included within `Share of net income
from associates` for the year ended 31 December 2006 is $368 million ($369
million excluding special items and remeasurements) (2005: $274 million; $281
million excluding special items and remeasurements).
The effective rate of taxation before special items and remeasurements
including share of associates` tax before special items and remeasurements was
32.7%. This was an increase from the equivalent effective rate of 26.5% in
the year ended 31 December 2005. The December 2005 tax rate benefited from the
one-off impact of a reduction in the statutory tax rates in South Africa and
Ghana. Without this one-off benefit the effective tax rate for the prior year
would have been 29.7%. In future periods it is expected that the effective tax
rate, including associates` tax, will remain at or above the UK statutory tax
rate of 30%.
9. Earnings per share
US$ 2006 2005
Profit for the financial year attributable to equity
shareholders
Basic earnings per share 4.21 2.43
Diluted earnings per share 4.12 2.36
Headline earnings for the financial year(1):
Basic earnings per share 3.58 2.43
Diluted earnings per share 3.50 2.36
Underlying earnings for the financial year(1):
Basic earnings per share 3.73 2.58
Diluted earnings per share 3.64 2.50
(1) Basic and diluted earnings per share are shown based on headline earnings,
which is a Johannesburg Stock Exchange Limited defined measure and underlying
earnings, which the directors believe to be useful additional measures of the
Group`s performance. Both earnings measures are further explained below.
The calculation of the basic and diluted earnings per share is based on
the following data:
US$ million (unless otherwise stated) 2006 2005
Earnings
Basic earnings, being profit for the financial year
attributable 6,186 3,521
to equity shareholders
Effect of dilutive potential ordinary shares
Interest on convertible bonds (net of tax) 4 29
Unwinding of discount on convertible bonds (net of tax) 3 20
Diluted earnings 6,193 3,570
Number of shares (million)
Basic number of ordinary shares outstanding(1) 1,468 1,447
Effect of dilutive potential ordinary shares(2)
Share options 23 18
Convertible bonds 13 48
Diluted number of ordinary shares outstanding(1) 1,504 1,513
(1) Basic and diluted number of ordinary shares outstanding represent the
weighted average for the year. The average number of ordinary shares in issue
excludes the shares held by the employee benefit trust, Epoch and Tarl.
(2) Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
potentially dilutive ordinary shares.
`Underlying earnings` is an alternative earnings measure, which the directors
believe provides a clearer picture of the underlying financial performance of
the Group`s operations. Underlying earnings is presented after minority
interest and excludes special items and remeasurements (see note 6). Underlying
earnings is distinct from `Headline earnings`, which is a Johannesburg Stock
Exchange Limited (JSE Limited) defined performance measure.
9. Earnings per share (continued)
The calculation of basic and diluted earnings per share, based on headline and
underlying earnings, uses the following earnings data:
Earnings Basic earnings
(US$ million) per share (US$)
2006 2005 2006 2005
Profit for the financial year
attributable to equity shareholders 6,186 3,521 4.21 2.43
Special items: operating 524 186 0.36 0.13
Special items: financing 4 - - -
Net profit on disposals(1) (1,202) (87) (0.81) (0.06)
Special items: associates(2) (186) (74) (0.13) (0.05)
Related tax (57) 6 (0.04) -
Related minority interests (9) (36) (0.01) (0.02)
Headline earnings for the financial
year 5,260 3,516 3.58 2.43
Unrealised losses on non-hedge
derivatives 421 315 0.29 0.22
Fair value loss on AngloGold
Ashanti convertible bond 18 32 0.01 0.02
Exchange gain on DBI preference
shares (40) (72) (0.03) (0.05)
Share of De Beers` legal settlement 25 113 0.02 0.08
IFRS 2 charges on disposals 34 - 0.02 -
Related tax (67) (21) (0.04) (0.02)
Related minority interests (180) (147) (0.12) (0.10)
Underlying earnings for the
financial year 5,471 3,736 3.73 2.58
(1) Excluding associated IFRS 2 charges on BEE transactions.
(2) Excluding legal settlements.
All outstanding share options and awards are potentially dilutive and have been
included in the calculation of diluted earnings per share. No instruments are
anti-dilutive for the year ended 31 December 2006 (2005: nil).
10. Capital expenditure on tangible assets and biological assets
US$ million 2006 2005
Platinum 923 616
Gold 196 722
Coal 780 331
Base Metals 298 271
Industrial Minerals 298 274
Paper and Packaging 581 691
Ferrous Metals and Industries 581 373
Other 29 28
3,686 3,306
Investment in biological assets 64 55
Total capital expenditure on tangible assets and biological
assets 3,750 3,361
Capital expenditure shown above comprises cash expenditure on tangible assets
and biological assets.
Segmental capital expenditure shown in note 3 also includes accruals and
expenditure on acquisitions and intangible assets, but excludes expenditure on
biological assets.
11. Disposal groups and non-current assets held for sale
Net assets relating to Kumba (non iron-ore) which were previously classified as
held for sale at 30 June 2006, were disposed of on 28 November 2006 as
disclosed in note 16.
The following assets and liabilities relating to disposal groups are
reclassified as held for sale at 31 December 2006. The Group expects to
complete the sale of these businesses within 12 months of the year end.
Namakwa
US$ million Highveld(1) Sands(2) Other Total
Intangible assets - 2 4 6
Tangible assets 322 278 42 642
Biological assets - - 16 16
Environmental rehabilitation trust - 2 - 2
Investments in asssociate - - 47 47
Financial asset investments 15 - 5 20
Other non-current assets - 1 - 1
Total non-current assets 337 283 114 734
Inventories 116 38 12 166
Trade and other receivables 160 41 24 225
Cash and cash equivalents 60 - 3 63
Total current assets 336 79 39 454
Total assets 673 362 153 1,188
Short term borrowings (134) - (1) (135)
Trade and other payables (166) (21) (46) (233)
Other current financial liabilities (4) - - (4)
Total current liabilities (304) (21) (47) (372)
Medium and long term borrowings (3) - (5) (8)
Provisions (23) (5) (2) (30)
Deferred tax liabilities (43) (72) (4) (119)
Retirement benefit obligations (15) (3) - (18)
Total non-current liabilities (84) (80) (11) (175)
Total liabilities (388) (101) (58) (547)
Net assets 285 261 95 641
(1) Highveld disposal group is included in the Ferrous Metals and Industries
business. Details of impending sale are included in Note 16c.
(2) The Namakwa Sands disposal group is included in the Base Metals business.
The net carrying amount of assets and associated liabilities reclassified as
held for sale during the year were written down by $28 million (after tax)
(2005: $36 million) in the current period to their fair value less costs to
sell.
12. Reconciliation of changes in equity
Attributable to equity shareholders of the Company
Share-
Total based
US$ million share Retained payment
capital(1) earnings(2) reserve
Balance at 1 January 2005 2,380 17,440 55
Total recognised income and expense - 3,364 -
Dividends paid - (1,137) -
Shares issued 4 - -
Share-based payments - - 100
Disposal of businesses - - -
Issue of shares to minority interests - - -
Dividends paid to minority interests - - -
Exercise of employee share options - 240 -
Purchase of minority interests - - -
Balance at 1 January 2006 2,384 19,907 155
Total recognised income and expense - 6,256 -
Dividends paid - (2,839) -
Dividends paid to minority interests - - -
Shares issued and reclassification on
conversion of bond(3) 1,100 - -
Convertible bond reserve transfer to
retained earnings - 109 -
Acquisitions and disposals of
businesses - - -
Issue of shares to minority interests - - -
Treasury share buyback - (3,951) -
Purchase of treasury shares for share
schemes - (19) -
Current tax on exercised employee
share
awards - 34 -
Share-based payments - - 94
Exercise of employee share options - 286 (31)
IFRS 2 charge arising on BEE
transaction - 28 -
Transfer to legal reserve - (3) -
Revaluation reserve arising from
acquisition
of minority interests - - -
Tax charge directly to equity
relating to
transactions with shareholders - (8) -
Deficit on conversion of Platinum`s
preference shares - (62) -
Tax credit on transactions with
equity holders - - 29
Other - - -
Balance at 31 December 2006 3,484 19,738 247
Attributable to equity shareholders of the Company
Cumulative Fair value
translation and
adjustment other
US$ million reserve reserves
Balance at 1 January 2005 2,247 998
Total recognised income and expense (1,908) (162)
Dividends paid - -
Shares issued - -
Share-based payments - -
Disposal of businesses - -
Issue of shares to minority interests - -
Dividends paid to minority interests - -
Exercise of employee share options - -
Purchase of minority interests - -
Balance at 1 January 2006 339 836
Total recognised income and expense (377) 136
Dividends paid - -
Dividends paid to minority interests - -
Shares issued and reclassification on
conversion of bond(3) - (32)
Convertible bond reserve transfer to
retained earnings - (109)
Acquisitions and disposals of businesses - -
Issue of shares to minority interests - -
Treasury share buyback - -
Purchase of treasury shares for share
schemes - -
Current tax on exercised employee share
awards - -
Share-based payments - -
Exercise of employee share options - -
IFRS 2 charge arising on BEE transaction - -
Transfer to legal reserve - 3
Revaluation reserve arising from acquisition
of minority interests - (4)
Tax charge directly to equity relating to
transactions with shareholders - -
Deficit on conversion of Platinum`s
preference shares - -
Tax credit on transactions with equity holders - 10
Other - -
Balance at 31 December 2006 (38) 840
US$ million Minority Total
interests equity
Balance at 1 January 2005 4,466 27,586
Total recognised income and expense 82 1,376
Dividends paid - (1,137)
Shares issued - 4
Share-based payments 6 106
Disposal of businesses (3) (3)
Issue of shares to minority interests 16 16
Dividends paid to minority interests (421) (421)
Exercise of employee share options - 240
Purchase of minority interests (189) (189)
Balance at 1 January 2006 3,957 27,578
Total recognised income and expense 603 6,618
Dividends paid - (2,839)
Dividends paid to minority interests (383) (383)
Shares issued and reclassification on
conversion of bond(3) - 1,068
Convertible bond reserve transfer to
retained earnings - -
Acquisitions and disposals of businesses (1,454) (1,454)
Issue of shares to minority interests 37 37
Treasury share buyback - (3,951)
Purchase of treasury shares for share
schemes - (19)
Current tax on exercised employee share
awards - 34
Share-based payments 14 108
Exercise of employee share options - 255
IFRS 2 charge arising on BEE transaction 6 34
Transfer to legal reserve - -
Revaluation reserve arising from acquisition
of minority interests - (4)
Tax charge directly to equity relating to
transactions with shareholders (3) (11)
Deficit on conversion of Platinum`s
preference shares 62 -
Tax credit on transactions with equity holders - 39
Other 17 17
Balance at 31 December 2006 2,856 27,127
(1) Total share capital comprises called-up share capital $771 million (2005:
$747 million) and the share premium account $2,713 million (2005: $1,637
million).
(2) Retained earnings is stated after deducting $4,218 million (2005: $456
million) of treasury shares. Treasury shares comprise shares of Anglo American
plc held in the employee benefit trust, own shares held by Anglo American plc
and other Group companies and treasury shares held by Epoch Investment Holdings
Limited (Epoch) and Tarl Investment Holdings Ltd (Tarl). Epoch and Tarl are the
vehicles used for the Anglo American share buyback programmes. As at 31
December 2006, the following treasury shares were held: shares held by the
employee benefit trust $247 million (2005: $456 million), own shares held by
Anglo American plc $2,010 million (2005: nil), own shares held by other Group
companies $20 million (2005: nil) and treasury shares held by Epoch and Tarl
$1,941 million (2005: nil).
(3) During the year ended 31 December 2006, the whole of the Anglo America n
plc convertible bond was converted to equity by bondholders. This has resulted
in a reduction in the discounted balance sheet liability of $1,068 millio
