Final Results - Year Ended 31 Dec 1999, Part 1

Anglo American PLC 22 March 2000 Part 1 ANGLO AMERICAN PLC REPORTS FIRST FULL YEAR RESULTS * Headline profit* increased by 13% to US$1,308 million; * Profit for the financial year of US$1,552 million (1998 pro forma: US$1,252 million); * Total operating profit before exceptional items increased by 14% to US$2,142 million; * Significant progress in strategic initiatives: - Acquisitions: Skorpion/Reunion Mining (US$82 million), Amcor Fibre Packaging (US$240 million), 23% of Anaconda Nickel (US$170 million), 40% of Australian Manganese (US$159 million), Acacia Resources (US$443 million); - Acquisition of Tarmac for US$1.9 billion, completed in March 2000; - Increase of interest in Anglo American Platinum to 50.3% (US$270 million), purchase of 1.9 million AngloGold shares (US$100 million; current stake 50.4%); - Significant disposals of non-core assets: Terra's distribution business (US$452 million), AECI's interest in Polifin (US$345 million), part of stake in SA Breweries (US$159 million) as well as the reduction early in 2000 of interests in McCarthy and Samcor; * Final dividend of 108 US cents per ordinary share recommended - giving a total dividend for the year of 150 US cents per ordinary share - an increase of 21% over 1998 pro forma estimate. HIGHLIGHTS TO 31 DECEMBER 1999 1999 1998 Change (US$ million except per share amounts) pro forma Total operating profit before exceptional items 2,142 1,879 14% Profit for the financial year 1,552 1,252 24% Headline profit *for the financial year 1,308 1,159 13% Earnings per share (US$) 4.03 3.32 21% Headline profit per share (US$) 3.40 3.07 11% Total dividend for the year (US cents per 150 124 21% ordinary share) * - See note 6 for the basis of calculation of headline profits Commenting on the results, Julian Ogilvie Thompson, chairman and chief executive of Anglo American said: 'Anglo American plc's maiden set of full year results were very pleasing, with total operating profit before exceptional items increasing by 14%. The good operating performance by all divisions took place against a background of strong platinum, diamond and, in the fourth quarter, base metals markets and strengthening steel and pulp markets. The US$1.9 billion acquisition of Tarmac in March 2000 was a major highlight, and makes Anglo Industrial Minerals the largest producer of aggregates and coated stone in the UK. The outlook for commodities in the year ahead is positive with the US economy continuing to grow strongly while Europe generally shows positive signs of recovery.' For further information, please contact: London Nick von Schirnding Misha Nagelmackers + 44 171 698 8540 (w) + 44 171 698 8567 (w) + 44 7818 438 274 9 (mob) Johannesburg Michael Spicer Anne Dunn + 27 11 638 3870 (w) + 27 11 638 4730 (w) + 27 83 227 1319 (mob) + 27 82 448 2684 (mob) AA plc website: www.angloamerican.co.uk Anglo American plc is a leading mining and natural resources company with its primary listing in London and secondary listings in Johannesburg and Switzerland. Anglo American's mining assets include interests in AngloGold, the world's largest gold producer, Anglo Platinum, the world's largest primary producer of platinum, De Beers, the world's largest producer and marketer by value of gem diamonds, Anglo Coal, one of the world's largest private sector coal producers as well as a substantial spread of base metal operations and projects. Anglo American also has significant interests in industrial minerals, ferrous metals and forest products and packaging activities. FULL YEAR 1999 FINANCIAL RESULTS Basis of preparation Anglo American plc was listed in May 1999 following the acquisition of Anglo American Corporation of South Africa Limited (AAC) and Minorco Societe Anonyme (Minorco). In order to provide shareholders with a proper basis for comparison, the 1999 financial statements for Anglo American have been compared with pro forma financial statements for the year ended 1998. These pro forma financial statements have been prepared to reflect the restructuring of AAC and Minorco as if these restructuring transactions had occurred at the beginning of 1998. The principal adjustments in 1998 comprise: - The full consolidation of Minorco; - The acquisition of an additional interest in Samancor; - The purchase of the minority interest in Amcoal; - The purchase of the minority interest in Amic; - The disposal of Minorco's gold interests and their acquisition by AngloGold; - The disposal of the Group's interest in Engelhard Corporation; - The purchase of the minorities in Anamint and Amgold; - The treatment of Terra as an associate. The effects of the Anamint and Amgold purchases which occurred in May 1999 and the reclassification of Terra were not reflected in the unaudited pro forma combined financial information contained in the Anglo American Prospectus issued in April 1999. Results for 1999 Turnover, including share of associates and joint ventures, fell by US$136 million to US$19,245 million. This decrease was primarily due to the impact of the disposal in 1999 by AngloGold of its interest in Driefontein and, in the second half of the year, by Terra of its distribution business and by AECI of its associate Polifin. This decline was offset by increased revenues from base metals and diamonds. The breakdown of turnover including the share of associates and joint ventures is set out below: Analysis of turnover by business division, US$ million: 1999 1998 Gold 2,235 2,650 Platinum 1,428 1,250 Diamonds 1,809 1,543 Coal 787 912 Base Metals 1,163 760 Industrial Minerals 1,008 1,073 Ferrous Metals 1,457 1,665 Forest Products 2,464 2,282 Industries 6,894 7,246 19,245 19,381 Total operating profit before exceptional items increased from US$1,879 million (including US$101 million from joint ventures and US$581 million from associates) to US$2,142 million (including US$245 million from joint ventures and US$592 million from associates). Acquisitions and disposals in 1999 contributed a net operating profit of US$26 million and therefore underlying operating profit increased by US$237 million. The factors contributing to this US$237 million increase were a US$400 million currency gain arising principally from the strength of the US dollar relative to the South African rand and higher contributions from De Beers and FirstRand (US$137 million). These positive factors were offset by the net impact of lower prices (US$109 million), lower sales (US$98 million) and higher costs (US$75 million) and other items (US$18 million). The higher costs represent an increase of less than 1% over 1998, significantly below the overall rate of cost inflation. The breakdown of operating profit, including Anglo American's share of joint ventures and associates, is set out below: Analysis of total operating profit before exceptional items by business division, US$ million 1999 1998 Gold 452 489 Platinum 480 331 Diamonds 245 148 Coal 114 166 Base Metals 174 86 Industrial Minerals 118 95 Ferrous Metals 75 164 Forest Products 272 232 Industries 358 318 Financial Services 138 98 Exploration (138) (137) Amortisation of goodwill (25) (21) Corporate activities Recurring (108) (98) Non-recurring (13) 8 2,142 1,879 The increase in costs in corporate activities is primarily the result of the impact of a number of non-recurring items and the establishment of the London office. Exploration expenditure of US$138 million was unchanged from 1998 but with an increasing emphasis on activities in base metals. The goodwill generated on the restructuring of the group is being amortised on a straight- line basis over 20 years. The depreciation charge in 1999 (excluding joint ventures and associates) remained broadly similar to 1998 at US$640 million. Total goodwill amortisation at US$96 million was also in line with 1998. The analysis by business division is as follows: Analysis of depreciation by business division, US$ million 1999 1998 Gold 175 177 Platinum 57 51 Coal 35 43 Base Metals 91 53 Industrial Minerals 67 68 Ferrous Metals 27 40 Forest Products 57 50 Industries 119 129 Other 12 17 640 628 Investment income net of interest payable fell from US$332 million to US$265 million. This was the result of lower rand interest rates, the weakening of the rand versus the US dollar and the impact of the disposal of non-core investments on the level of dividend income. The tax charge for the year was US$481 million which included a net US$18 million credit in respect of exceptional items. Excluding the impact of exceptional items, the tax charge for the year represented an effective tax rate of 21% compared with 26% in the previous year. The decline in the rate was primarily due to the impact of the reduction in the South African corporate tax rate from 35% to 30%, and high capital expenditure reducing the amount of current tax payable. Exceptional items contributed a net profit of US$410 million compared with US$165 million in 1998. The gains in 1999 arose primarily from the sale of AngloGold's interest in Driefontein, the sale of Polifin by AECI and the sale of part of Anglo American's interest in South African Breweries and other non- core investments. These gains were partly offset by the loss incurred by Terra in disposing of its distribution business and restructuring costs in AECI. The profit for the period at US$1,552 million was US$300 million or 24% higher than in 1998. Headline profit at US$1,308 million, which excludes the impact of exceptional items and adjusts for the amortisation of goodwill, was US$149 million higher than in 1998. An analysis by business division is set out below: Analysis of headline profit by business division, US$ million 1999 1998 Gold 210 261 Platinum 200 133 Diamonds 162 87 Coal 79 102 Base Metals 97 62 Industrial Minerals 116 106 Ferrous Metals 67 100 Forest Products 199 125 Industries 82 98 Financial Services 112 79 De Beers investments 151 148 Exploration (112) (116) Corporate activities (55) (26) 1,308 1,159 Earnings per share at 403 US cents were 71 US cents higher than in 1998. Headline profit per share at 340 US cents in 1999 was 11% higher than in 1998. Cash flow The following table summarises the major elements of Anglo American's cash flow: Cash flow analysis, US$ million 1999 1998 Group operating profit 1,305 1,197 Depreciation and amortisation 736 717 Movement in working capital (268) (128) Other non cash items 77 73 Net cash inflow from operating activities 1,850 1,859 Taxation (273) (395) Net interest and dividend income 245 253 Disposal of fixed assets 84 161 Available cash flow 1,906 1,878 Dividends paid - company and minorities (656) (877) Net acquisitions and disposals (134) 114 Capital expenditure (1,251) (1,441) Other 415 (378) Movement in net funds/(debt) 280 (704) Net (debt)/funds at start of the year (199) 505 Net funds/(debt) at end of the year 81 (199) Net cash flow from operations at US$1,850 million, was little changed from the previous year's level of US$1,859 million. Anglo American's continued expansion programme resulted in capital expenditure of US$1,251 million. Fixed asset disposals contributed US$84 million. Significant acquisitions during 1999 included the purchase of the Skorpion project (Reunion Mining) in Namibia, the increase in the interests in Anglo Platinum and AngloGold and Forest Products' purchase of Amcor and Kohler. Capital expenditure An analysis by business division is set out below: Analysis of capital expenditure by business division, US$ million 1999 1998 Gold 223 235 Platinum 239 252 Coal 26 32 Base Metals 257 329 Industrial Minerals 70 85 Ferrous Metals 47 52 Forest Products 181 165 Industries 175 256 Other 33 35 1,251 1,441 Dividends A final dividend of 108 US cents per ordinary share has been recommended by the Board, making a total for the year of 150 US cents per ordinary share. In the cash flow the total equity dividend paid by Anglo American in 1999 of US$276 million represents the final dividends paid by AAC and Minorco in the first quarter of 1999 and the interim dividend of 42 US cents per ordinary share paid by Anglo American in respect of 1999. This compares with a combined dividend payment by AAC and Minorco in 1998 of US$517 million. The board intends in future years to pay approximately one third of the annual dividend at the interim stage. Net cash At the end of the year Anglo American held net funds of US$81 million. This comprised US$3,618 million of cash and current asset investments offset by US$3,537 million of total debt. The US$633 million proceeds from the sale of 12.6 million Anglo American shares in May were used to reduce sterling borrowings. A US$750 million syndicated loan facility, which will mature in 2004, was arranged later in the year to fund future acquisitions. This facility will be used to help finance the acquisition of Tarmac. The financial completion of the Collahuasi project in November resulted in US$449 million of debt no longer being recourse to Anglo American. Exchange rates used in preparing the accounts Against the US dollar 1999 1998 Average South African rand 6.09 5.48 Pound sterling 0.62 0.60 Euro 0.94 0.90 Year end South African rand 6.15 5.88 Pound sterling 0.62 0.60 Euro 0.99 0.86 Y2K The systems and contingency plans that were put in place to counter the year 2000 computer problem ('Y2K') were effective and there was no impact on the Group during the millennium changeover. Anglo American has spent US$36 million on the programme and does not envisage any significant expenditure in the future. Ongoing scrutiny of potential Y2K impacts will be maintained until all processing cycles have been completed. Opportunities were taken to improve existing IT facilities in various businesses and to improve asset management and business continuity planning. DIVISIONAL HIGHLIGHTS Gold Turnover: US$ 2,235 million Total operating profit before exceptional items: US$452 million Headline profit: US$210 million Net operating assets: US$2,990 million Share of headline profit: 16% The Gold division, consisting primarily of the Group's 50.4% interest in the independently managed AngloGold, contributed US$452 million to total operating profit before exceptional items for 1999 - a decrease of 8%. This reduction was as a result of lower realised gold prices (averaging US$314 per ounce during the year against US$330 per ounce for 1998) and lower production (down 6% to 6.9 million ounces - principally as a result of AngloGold's gold production in South Africa decreasing by 10% to 5.7 million ounces). US production totalled 485,000 ounces. South American operations exceeded expectations by producing 426,000 ounces including 151,000 ounces from Cerro Vanguardia in its first full year of production. Platinum Turnover: US$1,428 million Total operating profit before exceptional items: US$480 million: Headline profit: US$200 million Net operating assets: US$1,519 million Share of headline profit: 15% The Platinum division, principally consisting of the Group's 50.3% interest in Amplats reported total operating profit before exceptional items of US$480 million, 45% higher than in 1998, mainly because of higher palladium, rhodium and nickel prices and greater platinum and palladium sales volumes. Increases in rand costs were largely offset by the weakening of the South African currency against the US dollar. In 1999 Amplats has reduced both the operating cost and cash costs per platinum equivalent unit by 11%. In December 1999 Amplats announced the development of a 162,000 ounce per year mine at Maandagshoek at a capital cost of some US$200 million. Diamonds Turnover: US$1,809 million Total operating profit before exceptional items: US$245 million Headline profit: US$162 million Net operating assets: US$131 million Share of headline profit: 12% Anglo American's diamond interests are represented by its 32.2% shareholding in the independently managed De Beers group which, with its partners, is the largest producer by value of gem diamonds in the world. De Beers sorts, values and markets nearly 60% of the world's rough diamonds. Anglo American's share of De Beers' total operating profit before exceptional items for 1999 increased by 66% to US$245 million from US$148 million in 1998. The improved performance resulted from strong global demand for diamonds in the retail markets and a successful millennium marketing campaign. Coal Turnover: US$787 million Total operating profit before exceptional items: US$114 million Headline profit: US$79 million Net operating assets: US$708 million Share of headline profit: 6% Anglo Coal's total operating profit before exceptional items for the year decreased by 31% from US$166 million to US$114 million. Earnings from collieries supplying Eskom, the South African power utility, were 5% lower and earnings from the South African trade collieries decreased by 38% owing mainly to lower prices in the export markets. Total production of 61.8 million tonnes was 2.0 million tonnes higher than 1998. The trade collieries' total sales for the year increased by 2% over 1998 to 19.6 million tonnes. Production at Carbones del Cerrejon in Colombia was reduced from a total of 3 million tonnes per annum in 1998 to 1 million tonnes in 1999 owing to the high cost of haulage by road. Access by rail to the port of Puerto Bolivar from May 1999 resulted in transportation cost savings. In January 2000, Anglo Coal increased its interest in Carbones del Cerrejon to 50% with the purchase of half of Rio Tinto's 33% interest. Base Metals Turnover: US$1,163 million Total operating profit before exceptional items: US$174 million Headline profit: US$97 million Net operating assets: US$1,606 million Share of headline profit: 7% Anglo Base Metals' total operating profit before exceptional items of US$174 million more than doubled from 1998, mainly because of the first full year's contribution from Collahuasi and Black Mountain. Copper Combined copper output from Mantos Blancos' two operations in Chile was a record 151,600 tonnes of copper of which 106,700 tonnes was in cathode copper and the balance high-grade concentrates. Attributable production from the Collahuasi open-pit copper mine in Chile was 168,600 tonnes of copper contained in concentrates and 22,600 tonnes of copper in cathodes. Attributable production from Palabora Mining in South Africa was 31,000 tonnes of copper in concentrate. Nickel The Codemin nickel operation in Brazil produced 6,500 tonnes of nickel contained in ferro-nickel. The Tati nickel mine in Botswana produced 3,700 attributable tonnes of nickel and 1,300 attributable tonnes of copper by product. Zinc The Hudson Bay operation in Canada produced 82,800 tonnes of zinc metal and 50,300 tonnes of copper cathode. The Black Mountain mine in South Africa produced 31,200 tonnes of zinc and 73,800 tonnes of lead. Analysis of total operating profit before exceptional items US$ million Collahuasi 96 Mantos Blancos 27 Hudson Bay 6 Other 45 174 Industrial Minerals Turnover: US$1,008 million Total operating profit before exceptional items: US$118 million Headline profit: US$116 million Net operating assets: US$1,184 million Share of headline profit: 9% Anglo Industrial Minerals' operating profit before exceptional items was US$118 million in 1999, an increase of US$23 million over 1998. 1998 included non-recurring charges of US$41 million. The underlying contribution of the division fell by US$18 million as a result of a fall of US$11 million in the European construction materials operations and a fall of US$7 million at Cleveland Potash, which suffered from flooding during the first half of the year. The European operations were affected by a change in accounting policy in respect of the depletion of mineral reserves in order to comply fully with UK GAAP's FRS 15. The cost of reserves is now written off over the full life of the operations rather than over the last 20 years, which was previous policy. An increased contribution from the STTP and fertiliser operations of Copebras offset the loss of income from the sale of the carbon black operations in 1998. The depreciation of the Brazilian real in January 1999 gave Copebras a very competitive position compared with imported products and enabled it to increase sales volumes. Copebras' operating profit was further boosted by productivity gains leading to reduced fixed costs and lower usage of raw materials. Analysis of total operating profit before exceptional items US$ million United Kingdom 84 Europe 9 South America 25 118 Ferrous Metals Turnover: US$1,457 million Total operating profit before exceptional items: US$75 million Headline profit: US$67 million Net operating assets: US$470 million Share of headline profit: 5% Anglo Ferrous Metals' total operating profit before exceptional items decreased by 54% to US$75 million mainly owing to the poor results of Highveld Steel and Columbus - a consequence of low vanadium prices and weak steel demand. Likewise, manganese demand was affected by the poor steel market and weakened during the year leading to an oversupply of manganese alloys. Chrome ore production in Samancor reduced by 6%. Productivity improvements to reduce unit costs continued. South African manganese production incurred higher production costs resulting from the restart of one of Samancor's furnaces in the second half of 1999. Forest Products Turnover: US$2,464 million Total operating profit before exceptional items: US$272 million Headline profit: US$199 million Net operating assets: US$1,348 million Share of headline profit: 15% Anglo Forest Products' total operating profit before exceptional items of US$272 million was 17% higher than in 1998, mainly as a result of further cost savings, higher pulp prices in the second half of the year and the inclusion of Amcor Fibre Packaging Europe, acquired during the year. As a result, Mondi Europe's operating profit increased to US$124 million. Mondi South Africa's operating profit rose slightly to US$136 million. Mondi has a 12% shareholding and a 28% voting participation in Aracruz in Brazil, which contributed operating profit for the year of US$12 million compared to a loss of US$5 million in 1998. Industries Turnover: US$6,894 million Total operating profit before exceptional items: US$358 million Headline profit: US$82 million Net operating assets: US$2,137 million Share of headline profit: 6% Anglo Industries showed an improvement in total operating profit before exceptional items of 13% to US$358 million in 1999 despite a fall in turnover. Results included a disappointing performance from Terra Industries, which continued to suffer from depressed nitrogen markets. The inclusion of Tongaat- Hulett as a subsidiary for the first full year contributed US$41 million to the division's total operating profit before exceptional items. As a result of the continued refocusing of investment on mining and natural resources, profits on the sale of businesses lifted the net profit of the division. Progress was achieved in further disposals during the year, including Terra selling its distribution business in May for US$452 million, AECI its 40% interest in Polifin in August for US$345 million, the sale of part of the division's holding in South African Breweries in November 1999 and in early 2000 a reduction of its holdings in McCarthy Retail from 28% to 11% and in Samcor from 45% to 10%. Analysis of total operating profit before exceptional items US$ million Tongaat-Hulett* 121 AECI 95 LTA 40 Other 102 358 *Includes the Group's contribution from the Hulamin Aluminium Joint Venture. Financial Services Total operating profit before exceptional items: US$138 million Headline profit: US$112 million Share of headline profit: 9% Financial Services contributed US$138 million to total operating profit before exceptional items, an increase of 41% over 1998. This is primarily as a result of the increased contribution from FirstRand, which benefited from better margins and restructuring. Consolidated Profit and Loss Account pro forma (unaudited) US$ million Note 1999 1998 Group and share of turnover of joint ventures 2 19,245 19,381 and associates Less: Joint ventures' turnover 2 (1,720) (1,219) Associates' turnover 2 (5,947) (6,543) Group turnover - subsidiaries 2 11,578 11,619 Operating costs (10,273) (10,422) Group operating profit - subsidiaries 2 1,305 1,197 Share of operating profit of joint ventures 2 245 101 Share of operating profit of associates 2 592 581 Total operating profit before exceptional 2 2,142 1,879 items Profit on disposal of fixed assets 7 489 165 Costs of fundamental reorganisation by AECI 7 (79) - Profit on ordinary activities before interest 3 2,552 2,044 Investment income 869 1,045 Interest payable (604) (713) Profit on ordinary activities before taxation 2,817 2,376 Tax on profit on ordinary activities 5 (481) (570) Profit on ordinary activities after taxation 2,336 1,806 Equity minority interests (784) (554) Profit for the financial year 3 1,552 1,252 Equity dividends to shareholders - Paid and (585) (483) proposed Retained profit for the financial year 967 769 Headline profit for the financial year 3 1,308 1,159 Basic earnings per share (US$): Profit for the financial year 4.03 3.32 Headline profit for the financial year 3.40 3.07 Diluted earnings per share (US$): Profit for the financial year 3.98 3.29 Headline profit for the financial year 3.35 3.05 Dividend per share (US cents): 150 124 Basic number of shares outstanding (million) 385 377 Diluted number of shares outstanding (million) 390 380 Turnover and operating profit in respect of acquisitions and disposals in 1999 were not material. Consolidated balance sheet pro forma (unaudited) US$ million 1999 1998 Fixed assets Intangible assets 1,585 1,377 Tangible assets 9,512 8,576 Investments in joint ventures: 1,564 1,409 Share of gross assets 3,394 3,287 Share of gross liabilities (1,830) (1,878) Investments in associates 5,338 5,632 Other financial assets 1,489 1,395 19,488 18,389 Current assets Stocks 1,431 1,507 Debtors 2,060 1,863 Current asset investments 2,315 3,206 Cash at bank and in hand 1,303 1,088 7,109 7,664 Short term borrowings (999) (1,239) Other current liabilities (2,611) (2,426) Net current assets 3,499 3,999 Total assets less current liabilities 22,987 22,388 Long term liabilities (2,538) (3,254) Provisions (1,324) (1,414) Equity minority interests (2,951) (2,704) Net assets 16,174 15,016 Capital and reserves Called up share capital 204 195 Share premium account 1,815 958 Merger reserve 2,424 2,424 Other reserves 1,047 1,059 Profit and loss account 10,684 10,380 Total shareholders' funds (all equity) 16,174 15,016 Consolidated cash flow statement pro forma (unaudited) US$ million Note 1999 1998 Net cash inflow from operating activities 8 1,850 1,859 Expenditure relating to fundamental reorganisation of (46) - AECI Dividends from joint ventures and associates 209 341 Returns on investments and servicing of finance Interest received and other financial income 388 321 Interest paid (402) (493) Dividends received from fixed asset investments 50 84 Dividends paid to minority shareholders (380) (360) Net cash outflow from returns on investments and (344) (448) servicing of finance Taxation UK corporation tax (10) (5) Overseas tax (263) (390) Taxes paid (273) (395) Capital expenditure and financial investment Payments for fixed assets (1,251) (1,441) Proceeds from the sale of fixed assets 84 161 Payments for other financial assets (1) (45) (146) Proceeds from the sale of other financial assets (1) 534 445 Net cash outflow for capital expenditure and financial (678) (981) investment Acquisitions and disposals Acquisition of subsidiaries (889) (477) Disposal of subsidiaries 103 266 Investment in associates (429) (240) Sale of interests in associates 592 266 Net cash outflow from acquisitions and disposals (623) (185) Equity dividends paid to Anglo American shareholders (276) (517) Cash outflow before use of liquid resources and (181) (326) financing Management of liquid resources (2) 912 (518) Financing 8 (403) 934 Increase in cash in the year 328 90 (1) Disposal and acquisition of other financial assets included in fixed assets. (2) Cash flows in respect of current asset investments included in current assets. Consolidated statement of total recognised gains and losses pro forma (unaudited) US$ million 1999 1998 Profit for the financial year 1,552 1,252 Joint ventures 135 48 Associates 565 492 Currency translation differences on foreign currency net (549) (1,257) investments Total recognised gains/(losses) for the financial year 1,003 (5) NOTES TO FINANCIAL INFORMATION 1. Accounting policies The financial information has been prepared in accordance with generally accepted accounting principles in the UK. The accounting policies applied in preparing the financial information are consistent with those adopted and disclosed in the Accountants' Report on the Company included in Part IV of the Listing Prospectus. Status of financial information The financial information set out herein does not constitute the Company's statutory accounts for the year ended 31 December 1999 but is derived from those accounts which were approved by the board of directors on 21 March 2000. These will be delivered to the Registrar of Companies following the Annual General Meeting convened for 16 May 2000. The auditors have reported on those accounts; their report was unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. 2. Segmental information Turnover Operating Net operating profit assets(1) Pro forma pro forma pro forma (unaudited) (unaudited) (unaudited) US$ million 1999 1998 1999 1998 1999 1998 By business segment Group subsidiaries Gold 2,102 2,486 404 428 2,990 2,634 Platinum 1,428 1,250 480 331 1,519 1,159 Diamonds - - (7) - 131 143 Coal 731 874 121 176 708 773 Base Metals 740 657 49 50 1,606 1,292 Industrial Minerals 988 1,072 116 95 1,184 1,243 Ferrous Metals 839 1,174 40 121 470 500 Forest Products 1,307 1,061 149 141 1,348 934 Industries 3,443 3,045 222 120 2,137 2,157 Financial Services - - 19 (15) - (5) Exploration - - (138) (137) - - Corporate activities - - (150) (113) 441 370 11,578 11,619 1,305 1,197 12,534 11,200 Joint ventures Gold 108 7 44 1 Coal 43 - 5 - Base Metals 307 - 95 - Industrial Minerals 20 - 2 - Ferrous Metals 149 132 (12) (12) Forest Products 1,093 1,080 111 112 1,720 1,219 245 101 Associates Gold 25 157 4 60 Diamonds 1,809 1,543 252 148 Coal 13 38 (12) (10) Base Metals 116 103 30 36 Industrial Minerals - 1 - - Ferrous Metals 469 359 47 55 Forest Products 64 141 12 (21) Industries 3,451 4,201 136 198 Financial Services - - 119 113 Corporate activities - - 4 2 5,947 6,543 592 581 19,245 19,381 2,142 1,879 (1) Net operating assets consist of tangible and intangible assets (excluding investments in joint ventures and associates), stocks and debtors less non- interest bearing current liabilities. 2.Segmental information continued Turnover Operating Net operating profit assets pro forma pro forma pro forma (unaudited) (unaudited) (unaudited) US$ million 1999 1998 1999 1998 1999 1998 By geographical segment (by origin) Group subsidiaries: South Africa 8,258 8,710 1,173 1,077 8,039 7,984 Rest of Africa 259 197 (30) 17 150 65 Europe 1,442 1,223 50 18 1,864 1,569 North America 708 725 7 63 502 443 South America 614 694 114 35 1,431 1,097 Australia and Asia 297 70 (9) (13) 548 42 Joint ventures: South Africa 192 132 (7) (6) Rest of Africa 64 - 35 - Europe 1,113 1,080 113 105 South America 351 7 104 2 Associates: South Africa 3,108 4,072 388 432 Rest of Africa 1,075 893 163 102 Europe 123 170 13 15 North America 797 1,103 9 33 South America 88 69 2 (6) Australia and Asia 756 236 17 5 19,245 19,381 2,142 1,879 12,534 11,200 By geographical segment (by destination) Turnover pro forma (unaudited) 1999 1998 Group subsidiaries South Africa 5,522 6,372 Rest of Africa 462 410 Europe 2,632 2,016 North America 1,441 1,612 South America 497 387 Australia and Asia 1,024 822 Joint ventures South Africa 87 37 Rest of Africa 86 19 Europe 1,176 1,047 North America 111 46 South America 75 10 Australia and Asia 185 60 Associates South Africa 1,906 2,517 Rest of Africa 52 8 Europe 562 606 North America 1,871 2,372 South America 51 9 Australia and Asia 1,505 1,031 19,245 19,381 MORE TO FOLLOW FR JBMJTMMITTFM

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