Press Release Archive - 2004

Anglo American plc (“AA plc”) arrives at its headline 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 headline earnings of US$217 million for the six months ended 30 June 2004 from its investment in DBI, as reconciled in the table below:

Reconciliation of headline earnings for the 6 months ended 30 June 2004

(1) The GAAP adjustments include -US$31 million relating to the mark-to-market of interest rate hedging contracts referred to in Dbsa's 2003 year end press release. Whereas in Dbsa's earnings, the full amount of US$70 million was charged against earnings in 2003, under UK GAAP US$31 million is charged against earnings in the first six months of 2004, being the portion that was realised in the period.

(2) As a result of De Beers' partial interest in Debswana Diamond Company (Proprietary) Limited (one of the shareholders in DBI), AA plc accounts for an additional 3.65% of DBI's post-tax earnings attributable to ordinary shares.

(3) AA plc grosses up its preference share income to the operating profit level and accounts for its preference share interest in operating profit, exceptional items, investment income and net interest, tax and minorities, in the same way as it accounts for its ordinary share interest in these balances. This treatment is in accordance with FRS9, paragraph 33, which indicates that where preference shares are an integral part of the investor's long-term interest, it is appropriate to include the preference share interest with the ordinary share interest in determining the investor's overall share of an associate's results. The headline earnings attributable to AA plc's US$35 million preference share income are arrived at by adjusting for a proportion of exceptional items (-US$1 million) and goodwill amortisation (+US$9 million) in the same way as the ordinary share interest is calculated.

As noted in Dbsa's press release, on 30 June 2004 Dbsa redeemed 25% of its preference shares and on that date AA plc received US$175 million, representing 25% of its US$701 million preference share interest.

In the six months ended 30 June 2004, AA plc received from DBI a US$68 million final dividend on ordinary shares relating to FY 2003, US$35 million dividends representing the second US$35 million payment on preference shares for 2003, and US$9 million representing the first dividend for 2004 on the redeemed preference shares. A US$26 million first dividend for 2004 on the remaining preference shares and a US$112 million interim dividend on ordinary shares relating to FY 2004 are scheduled for payment on 2 August 2004.

In the six months ended 30 June 2003, AA plc received from DBI a US$56 million final dividend on ordinary shares relating to FY 2002 and US$35 million dividends representing the second US$35 million payment on preference shares for 2002. A US$35 million first dividend on preference shares for 2003 and a US$112 million interim dividend on ordinary shares were received from DBI during the second half of 2003.

Reconciliation of headline earnings for the 6 months ended 30 June 2004

(4) As explained in Dbsa's press release, Dbsa's headline earnings for the six months ended 30 June 2003 have been restated to US$376 million (previously reported as US$414 million). As the restatement does not affect the UK GAAP figures previously reported by AA plc, the GAAP adjustment has also been restated accordingly.

The above figures are unaudited.

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The information contained in press releases, annual or interim reports, analyst presentations, and financial information should not be deemed accurate or current except as of the date of issue. Anglo American plc does not, does not intend to, and specifically disclaims any duty to, update or correct such information.