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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$386 million for the year ended 31 December 2003 from its investment in DBI, as reconciled in the table below:

Reconciliation of headline earnings for the year ended 31 December 2003

(1) The GAAP adjustments include +US$39 million relating to the mark-to-market of interest rate hedging contracts referred to in Dbsa's press release. Whereas in Dbsa's earnings, the full amount of US$70 million is charged against earnings in 2003, under UK GAAP only US$31 million is charged against earnings in 2003, being the portion that was realised in the year.

(2) As a result of the 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$70 million preference share income are arrived at by adjusting for a proportion of exceptional items (+US$2 million) and goodwill amortisation (+US$23 million) in the same way as the ordinary share interest is calculated.

In the year ended 31 December 2003, AA plc received a total of US$238 million in dividends from DBI, consisting of US$56 million dividends on ordinary shares relating to FY 2002, a US$112 million interim dividend on ordinary shares for 2003, US$35 million dividends representing the second US$35 million payment on preference shares for 2002, and a US$35 million interim dividend on preference shares for 2003. A US$68 million final dividend on ordinary shares relating to FY 2003 and the second US$35 million payment on preference shares for 2003 are expected to be received in early 2004.

In the year ended 31 December 2002, AA plc received a total of US$106 million in dividends from DBI, consisting of US$29 million dividends on ordinary shares relating to FY 2001, US$42 million dividends on preference shares (representing 7 months of 2001 following the De Beers transaction), and a US$35 million interim dividend on preference shares for 2002.

Reconciliation of headline earnings for the year ended 31 December 2002 (4)

(4) As explained in Dbsa's press release, Dbsa's headline earnings for the year ended 31 December 2002 have been restated to US$575 million (previously reported as US$570 million) following its adoption of International Financial Reporting Standards. 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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