Review of the year

Non-GAAP disclosure (PDF - 40 KB)

Non-GAAP disclosure

From time to time we may publicly disclose certain "non-GAAP financial measures" in the course of our financial presentations, earnings releases, earnings conference calls and otherwise.

The group utilises certain non-GAAP performance measures and ratios in managing our business and may provide users of this financial information with additional meaningful comparisons between current results and results in prior operating periods. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, our reported operating results or cash flow from operations or any other measure of performance prepared in accordance with GAAP. In addition, our presentation of these measures may not be comparable to similarly titled measures other companies use.

2004

2005

Figures in million

2005

2004

SA Rands

US Dollars

Headline earnings adjusted for the effect of unrealised non-hedge derivatives, fair value gain (loss) on convertible bond and interest rate swap (adjusted headline earnings)

937

(723)

Headline (loss) earnings

(98)

141

1,147

1,900

Unrealised non-hedge derivative loss

286

198

(226)

(128)

Deferred tax on unrealised non-hedge derivatives (group note 13)

(21)

(40)

(160)

211

Fair value adjustment on option component of convertible bond

(27)

(10)

Fair value gain (loss) on interest rate swap

(2)

–

Deferred taxation on interest rate swap

–

Headline earnings adjusted for the effect of unrealised non-hedge derivatives, fair value gain (loss) on convertible bond and interest rate swaps

1,691

1,265

200

271

⁽¹⁾

Non-hedge derivatives in the income statement comprise the change in fair value of all non-hedge derivatives as follows:

Open positions: The change in fair value from the previous reporting date or date of recognition (if later) through to the current reporting date; and

Settled positions: The change in fair value from the previous reporting date or date of recognition (if later) through to the date of settlement.

Headline earnings adjusted for the effect of unrealised non-hedge derivatives, fair value gains (loss) on convertible bond and interest rate swaps are intended to illustrate earnings after adjusting for:

The unrealised fair value change in contracts that are still open at the reporting date, as well as, the unwinding of the historic marked-to-market value of the positions settled in the period; and

Investment in hedge restructure transaction: During the hedge restructure in December 2004 and March 2005 quarters, $83m, R475m and $69m, R415m in cash were injected respectively into the hedge book in these quarters to increase the value of long-dated contracts. The entire investment in short-dated derivatives (certain of which have now matured) and investment in long-dated derivatives (all of which have not yet matured), for the purposes of the adjustment to earnings, will only be taken into account when the realised portion of long-dated non-hedge derivatives are settled, and not when the short-term contracts are settled.

The unrealised fair value change on the option component of the convertible bond amounting to $32m, R211m (2004: ($27m), (R160m)).

673

478

Cents per share

108

This calculation is based on adjusted headline earnings of $200m, R1,265m (2004: $271m, R1,691m) and 264,635,634 (2004: 251,352,552) shares being the weighted average number of ordinary shares in issue during the financial year.

Gross profit adjusted for the effect of unrealised non-hedge

derivatives (adjusted gross profit)

Reconciliation of gross profit to gross profit adjusted for the effect of

unrealised non-hedge derivatives:

1,697

1,088

Gross profit

183

243

1,147

1,900

Unrealised non-hedge derivatives loss

286

198

2,844

2,988

Gross profit adjusted for the effect of unrealised non-hedge derivatives ⁽¹⁾

469

441

⁽¹⁾

Non-hedge derivatives in the income statement comprise the change in fair value of all non-hedge derivatives as follows:

Open positions: The change in fair value from the previous reporting date or date of recognition (if later) through to the current reporting date; and

Settled positions: The change in fair value from the previous reporting date or date of recognition (if later) through to the date of settlement.

Gross profit adjusted for the effect of unrealised non-hedge derivatives, is intended to illustrate earnings after adjusting for:

The unrealised fair value change in contracts that are still open at the reporting date, as well as, the unwinding of the historic marked-to-market value of the positions settled in the period; and

Investment in hedge restructure transaction: During the hedge restructure in the quarter ended 31 December 2004 and the quarter ended 31 March 2005, $83m and $89m in cash was injected into the hedge book in these quarters to increase the value of long-dated contracts. The entire investment in short-dated derivatives (certain of which have now matured) and investment in long-dated derivatives (all of which have not yet matured), for the purposes of the adjustment to earnings, will only be taken into account when the realised portion of long-dated non-hedge derivatives is settled, and not when the short-term contracts are settled.

Adjusted gross profit (loss) is analysed by origin as follows:

1,462

1,480

South Africa

230

228

202

203

Argentina

390

288

Australia

547

543

Brazil

(130)

(191)

Ghana

(29)

(22)

(93)

Guinea

(16)

306

443

Mali

Namibia

150

Tanzania

107

USA

(9)

–

Zimbabwe

–

(1)

(35)

(96)

Other

(16)

(6)

2,844

2,988

469

441

Non-hedge derivative loss is summarised as follows:

Group:

361

951

Realised non-hedge derivative gain

151

(1,147)

(1,900)

Unrealised non-hedge derivative loss

(286)

(198)

(786)

(949)

Non-hedge derivative loss per the income statement

(135)

(142)

Company:

381

379

Realised non-hedge derivative gain

(904)

(693)

Unrealised non-hedge derivative loss

(104)

(154)

(523)

(314)

Non-hedge derivative loss per the income statement

(42)

(93)

Price received

14,788

16,750

Gold income per income statement

2,629

2,309

(431)

(566)

Adjusted for minority interests

(89)

(67)

14,357

16,184

2,540

2,242

361

951

Realised non-hedge derivative gain

151

14,718

17,135

2,691

2,298

181,585

190,767

Attributable gold sold – kg/– oz (000)

6,133

5,838

81,051

89,819

Revenue price per unit – R/kg/– $/oz

439

394

Total costs

9,914

11,240

Total cash costs (group note 4)

1,768

1,549

(73)

(219)

Adjusted for minority interests and non-gold producing companies

(35)

(11)

Total cash costs adjusted for minority interests and non-gold

9,841

11,021

producing companies

1,733

1,538

168

Retrenchment costs (group note 4)

136

368

Rehabilitation and other non-cash costs (group note 4)

2,423

3,203

Amortisation of tangible assets (group note 4)

503

380

Amortisation of intangible assets (group note 4)

(91)

(102)

Adjusted for minority interests and non-gold producing companies

(16)

(14)

Total production costs adjusted for minority interests and non-gold

12,369

14,671

producing companies

2,305

1,934

181,311

191,783

Gold produced – kg/– oz (000)

6,166

5,829

54,276

57,465

Total cash cost per unit – R/kg/– $/oz

281

264

68,221

76,495

Total production cost per unit – R/kg/– $/oz

374

332

Cash gross profit

2,844

2,988

Gross profit adjusted for the effect of unrealised non-hedge derivatives

469

441

2,423

3,203

Amortisation of tangible assets (group note 4)

503

380

Amortisation of intangible assets (group note 4)

(183)

(130)

Non-cash revenues

(20)

(29)

5,092

6,074

954

793

Cash gross profit is analysed by origin as follows:

2,193

2,562

South Africa

399

342

370

354

Argentina

555

494

Australia

685

687

Brazil

108

107

128

249

Ghana

(81)

258

Guinea

(13)

503

732

Mali

115

110

Namibia

372

289

Tanzania

300

363

USA

–

Zimbabwe

–

(24)

Other

(3)

5,092

6,074

954

793

EBITDA

794

(320)

Operating (loss) profit per the income statement

(36)

102

2,423

3,203

Amortisation of tangible assets (group note 4)

503

380

Amortisation of intangible assets (group note 4)

300

Impairment of tangible assets (group note 15 and 17)

–

125

Impairment of intangible assets (group note 18)

–

200

–

Amortisation of goodwill (group note 18 and 19)

–

1,147

1,900

Unrealised non-hedge derivative loss (note 3 above)

286

198

(5)

Share of associates' EBITDA (group note 9)

(1)

–

(88)

(40)

Profit on disposal of assets' (group note 7)

(5)

(13)

–

Abandonment of assets at Malian operations (group note 7)

–

4,494

5,207

818

700

Interest cover

4,494

5,207

EBITDA

818

700

Finance costs and unwinding of decommissioning and restoration

563

690

obligations (group note 8)

108

102

Capitalised finance costs (group note 17)

630

792

124

Interest cover – times

Equity and net capital employed

17,790

16,584

Shareholders' equity per balance sheet

2,614

3,151

Adjusted to exclude:

1,040

1,655

– Other comprehensive income (group note 29)

261

184

122

227

– Actuarial losses (group note 29)

18,952

18,466

2,911

3,357

7,653

7,353

Deferred tax (group note 34)

1,159

1,356

Adjusted to exclude:

(87)

1,015

– Deferred tax on derivatives and other comprehensive income

160

(16)

131

– Deferred tax on actuarial losses

26,581

26,965

Equity

4,252

4,708

327

374

Minorities (group note 30)

7,262

10,825

Borrowings – long-term portion (group note 31)

1,706

1,286

1,800

1,190

Borrowings – short-term portion (group note 31)

188

319

35,970

39,354

Capital employed

6,205

6,371

(1,630)

(1,328)

Cash and cash equivalents (group note 26)

(209)

(289)

34,340

38,026

Net capital employed

5,996

6,082

10.

Net debt

7,262

10,825

Borrowings – long-term portion (group note 31)

1,706

1,286

1,800

1,190

Borrowings – short-term portion (group note 31)

188

319

9,062

12,015

Total borrowings

1,894

1,605

(1,630)

(1,328)

Cash and cash equivalents (group note 26)

(209)

(289)

7,432

10,687

Net debt

1,685

1,316

11.

Net asset value – cents per share

18,117

16,958

Total equity per balance sheet

2,673

3,209

264

265

Number of ordinary shares in issue (group note 28)

265

264

6,850

6,401

Net asset value – cents per share

1,009

1,214

12.

Net tangible asset value – cents per share

18,117

16,958

Total equity per balance sheet

2,673

3,209

2,458

(2,533)

Intangible assets (group note 18)

(399)

(435)

15,659

14,425

2,274

2,774

264

265

Number of ordinary shares in issue (group note 28)

265

264

5,921

5,445

Net tangible asset value – cents per share

858

1,049

13.

Return on equity

Headline earnings adjusted for the effect of unrealised non-hedge

derivatives, fair value gain (loss) on convertible bond and interest

1,691

1,265

rate swap (note 1 above)

200

271

(67)

–

Adjusted for the timing of acquisitions

–

(10)

1,624

1,265

200

261

26,581

26,965

Equity

4,252

4,708

21,851

26,773

Average equity

4,480

3,638

Note – equity for 2003 amounted to $2,568m, R17,120m

Return on equity – %

14.

Return on net capital

Headline earnings adjusted for the effect of unrealised non-hedge

derivatives, fair value gain (loss) on convertible bond and interest

1,691

1,265

rate swap (note 1 above)

200

271

(67)

–

Adjusted for the timing of acquisitions

–

(10)

1,624

1,265

200

261

Finance costs and unwinding of decommissioning and restoration

563

690

obligations (group note 8)

108

–

Adjusted for the timing of acquisitions

–

603

690

108

2,227

1,955

Headline earnings adjusted for the effect of unrealised non-hedge derivatives, fair value gain (loss) on convertible bond and interest rate swap and before finance costs adjusted for the timing of acquisitions

308

354

34,340

38,026

Net capital employed (note 9 above)

5,996

6,082

28,085

36,183

Average net capital employed

6,039

4,678

Note – Net capital employed for 2003 amounted to $3,274m, R21,830m

Return on net capital – %

15.

Free cash flow

3,179

3,892

Net cash inflow from operating activities per cash flow

612

534

(2,119)

(2,879)

Stay-in-business capital expenditure per cash flow

(452)

(329)

1,060

1,013

160

205

Non-GAAP disclosure | Next > One-year forecast - 2006...

^ Back to top...

Annual Report 2005