e6vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 or 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Report on Form 6-K dated September 7, 2010
This Report on Form 6-K shall be incorporated by reference in
our automatic shelf Registration Statement on Form F-3 as amended (File No. 333-161634) and our Registration
Statements on Form S-8 (File Nos. 333-10990 and 333-113789) as amended, to the extent not superseded by
documents or reports subsequently filed by us under the Securities Act of 1933 or the Securities Exchange Act
of
1934, in each case as amended
Commission file number: 1-14846
AngloGold Ashanti Limited
(Name of Registrant)
76 Jeppe Street
Newtown, Johannesburg, 2001
(P O Box 62117, Marshalltown, 2107)
South Africa
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or
Form 40-F:
Form 20-F: þ Form 40-F: o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation
S-T Rule 101(b)(1):
Yes: o No: þ
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation
S-T Rule 101(b)(7):
Yes: o No: þ
Indicate by check mark whether the registrant by furnishing the information contained in this form is also
thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934.
Yes: o No: þ
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Enclosures: |
|
Unaudited condensed consolidated financial statements as of June 30, 2010 and December 31,
2009 and for each of the six month periods ended June 30, 2010 and 2009, prepared in accordance with U.S.
GAAP, and related managements discussion and analysis of financial condition and results of operations. |
TABLE OF CONTENTS
ANGLOGOLD ASHANTI LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Prepared in accordance with US GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
|
|
(in US Dollars, millions, except for share data) |
|
|
Sales and other income |
|
|
|
2,406 |
|
|
|
1,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
|
|
2,370 |
|
|
|
1,441 |
|
|
Interest, dividends and other |
|
|
|
36 |
|
|
|
60 |
|
|
|
|
|
|
|
Cost and expenses |
|
|
|
2,312 |
|
|
|
1,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs |
|
|
|
1,196 |
|
|
|
955 |
|
|
Exploration costs |
|
|
|
94 |
|
|
|
51 |
|
|
Related party transactions |
|
|
|
(8 |
) |
|
|
(7 |
) |
|
General and administrative |
|
|
|
100 |
|
|
|
73 |
|
|
Royalties |
|
|
|
58 |
|
|
|
36 |
|
|
Market development costs |
|
|
|
5 |
|
|
|
6 |
|
|
Depreciation, depletion and amortization |
|
|
|
336 |
|
|
|
285 |
|
|
Impairment of assets (see note D) |
|
|
|
19 |
|
|
|
|
|
|
Interest expense |
|
|
|
67 |
|
|
|
57 |
|
|
Accretion expense |
|
|
|
10 |
|
|
|
8 |
|
|
Employment severance costs |
|
|
|
10 |
|
|
|
6 |
|
|
Loss/(profit) on sale of assets, realization of loans, indirect
taxes and other
(see note F) |
|
|
|
16 |
|
|
|
(83 |
) |
|
Non-hedge derivative loss/(gain) (see note G) |
|
|
|
409 |
|
|
|
(239 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income tax and equity
income in affiliates |
|
|
|
94 |
|
|
|
353 |
|
|
Taxation expense (see note H) |
|
|
|
(106 |
) |
|
|
(154 |
) |
|
Equity income in affiliates |
|
|
|
39 |
|
|
|
44 |
|
|
|
|
|
|
|
Net income |
|
|
|
27 |
|
|
|
243 |
|
|
Less: Net income attributable to noncontrolling interests |
|
|
|
(23 |
) |
|
|
(13 |
) |
|
|
|
|
|
|
Net income attributable to AngloGold Ashanti |
|
|
|
4 |
|
|
|
230 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per share attributable to AngloGold Ashanti
common stockholders: (cents)
(see note J) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Ordinary shares |
|
|
|
2 |
|
|
|
65 |
|
|
E Ordinary shares |
|
|
|
1 |
|
|
|
33 |
|
|
Ordinary shares diluted |
|
|
|
2 |
|
|
|
64 |
|
|
E Ordinary shares diluted |
|
|
|
1 |
|
|
|
32 |
|
|
|
|
|
|
|
Weighted average number of shares used in computation |
|
|
|
|
|
|
|
|
|
|
Ordinary shares |
|
|
|
363,477,634 |
|
|
|
354,588,988 |
|
|
E Ordinary shares basic and diluted |
|
|
|
3,483,676 |
|
|
|
3,918,250 |
|
|
Ordinary shares diluted |
|
|
|
363,477,634 |
|
|
|
355,496,294 |
|
|
|
|
|
|
|
Dividend declared per ordinary share (cents) |
|
|
|
10 |
|
|
|
5 |
|
|
Dividend declared per E ordinary share (cents) |
|
|
|
5 |
|
|
|
3 |
|
|
|
|
|
|
|
2
ANGLOGOLD ASHANTI LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
Prepared in accordance with US GAAP
|
|
|
|
|
|
|
|
|
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|
|
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|
At June 30, |
|
|
At December 31, |
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
(in US Dollars, millions) |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
2,471 |
|
|
|
2,758 |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
866 |
|
|
|
1,100 |
|
|
Restricted cash |
|
|
|
14 |
|
|
|
12 |
|
|
Receivables |
|
|
|
209 |
|
|
|
206 |
|
|
|
|
|
|
|
Trade |
|
|
|
45 |
|
|
|
45 |
|
|
Recoverable taxes, rebates, levies and duties |
|
|
|
63 |
|
|
|
82 |
|
|
Related parties |
|
|
|
3 |
|
|
|
5 |
|
|
Other |
|
|
|
98 |
|
|
|
74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories (see note C) |
|
|
|
718 |
|
|
|
663 |
|
|
Materials on the leach pad (see note C) |
|
|
|
73 |
|
|
|
40 |
|
|
Derivatives |
|
|
|
150 |
|
|
|
330 |
|
|
Deferred taxation assets |
|
|
|
369 |
|
|
|
333 |
|
|
Assets held for sale |
|
|
|
72 |
|
|
|
74 |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
|
5,420 |
|
|
|
5,454 |
|
|
Acquired properties, net |
|
|
|
815 |
|
|
|
831 |
|
|
Goodwill and other intangibles, net |
|
|
|
170 |
|
|
|
180 |
|
|
Derivatives |
|
|
|
2 |
|
|
|
5 |
|
|
Other long-term inventory (see note C) |
|
|
|
23 |
|
|
|
26 |
|
|
Materials on the leach pad (see note C) |
|
|
|
307 |
|
|
|
324 |
|
|
Other long-term assets (see note M) |
|
|
|
1,043 |
|
|
|
1,022 |
|
|
Deferred taxation assets |
|
|
|
18 |
|
|
|
62 |
|
|
|
|
|
|
|
Total assets |
|
|
|
10,269 |
|
|
|
10,662 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
3,195 |
|
|
|
4,475 |
|
|
|
|
|
|
|
Accounts payable and other current liabilities |
|
|
|
556 |
|
|
|
607 |
|
|
Derivatives |
|
|
|
2,575 |
|
|
|
2,525 |
|
|
Short-term debt (see note E) |
|
|
|
24 |
|
|
|
1,292 |
|
|
Tax payable |
|
|
|
30 |
|
|
|
42 |
|
|
Liabilities held for sale |
|
|
|
10 |
|
|
|
9 |
|
|
|
|
|
|
|
Other non-current liabilities |
|
|
|
170 |
|
|
|
163 |
|
|
Long-term debt (see note E) |
|
|
|
1,668 |
|
|
|
667 |
|
|
Derivatives |
|
|
|
112 |
|
|
|
176 |
|
|
Deferred taxation liabilities |
|
|
|
1,145 |
|
|
|
1,171 |
|
|
Provision for environmental rehabilitation |
|
|
|
393 |
|
|
|
385 |
|
|
Provision for labor, civil, compensation claims and settlements |
|
|
|
29 |
|
|
|
33 |
|
|
Provision for pension and other post-retirement medical benefits |
|
|
|
144 |
|
|
|
147 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
3,413 |
|
|
|
3,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
|
|
|
|
|
|
|
|
|
Share capital - 600,000,000 (2009 600,000,000) authorized
common stock of 25 ZAR cents each. Stock issued 2010 362,752,860
(2009 362,240,669) |
|
|
|
12 |
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid in capital |
|
|
|
7,866 |
|
|
|
7,836 |
|
|
Accumulated deficit |
|
|
|
(3,945 |
) |
|
|
(3,914 |
) |
|
Accumulated other comprehensive income (see note K) |
|
|
|
(679 |
) |
|
|
(654 |
) |
|
Other reserves |
|
|
|
36 |
|
|
|
37 |
|
|
|
|
|
|
|
Total AngloGold Ashanti stockholders equity |
|
|
|
3,290 |
|
|
|
3,317 |
|
|
Noncontrolling interests |
|
|
|
123 |
|
|
|
128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
|
10,269 |
|
|
|
10,662 |
|
|
|
|
|
|
|
3
ANGLOGOLD ASHANTI LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Prepared in accordance with US GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
|
|
(in US Dollars, millions) |
|
|
Net cash provided by operating activities |
|
|
|
577 |
|
|
|
327 |
|
|
|
|
|
|
|
Net income |
|
|
|
27 |
|
|
|
243 |
|
|
Reconciled to net cash provided by operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other |
|
|
|
15 |
|
|
|
(83 |
) |
|
Depreciation, depletion and amortization |
|
|
|
336 |
|
|
|
285 |
|
|
Impairment of assets |
|
|
|
19 |
|
|
|
|
|
|
Deferred taxation |
|
|
|
(21 |
) |
|
|
57 |
|
|
Movement in non-hedge derivatives |
|
|
|
268 |
|
|
|
(35 |
) |
|
Equity income in affiliates |
|
|
|
(39 |
) |
|
|
(44 |
) |
|
Dividends received from affiliates |
|
|
|
79 |
|
|
|
77 |
|
|
Other non cash items |
|
|
|
15 |
|
|
|
(34 |
) |
|
Net increase in provision for environmental rehabilitation, pension and other
post-retirement medical benefits |
|
|
|
13 |
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of changes in operating working capital items: |
|
|
|
|
|
|
|
|
|
|
Receivables |
|
|
|
(64 |
) |
|
|
(74 |
) |
|
Inventories |
|
|
|
(69 |
) |
|
|
(117 |
) |
|
Accounts payable and other current liabilities |
|
|
|
(2 |
) |
|
|
44 |
|
|
|
|
|
|
|
Net cash (used)/generated in investing activities |
|
|
|
(319 |
) |
|
|
292 |
|
|
|
|
|
|
|
Increase in non-current investments |
|
|
|
(59 |
) |
|
|
(22 |
) |
|
Additions to property, plant and equipment |
|
|
|
(381 |
) |
|
|
(499 |
) |
|
Proceeds on sale of mining assets |
|
|
|
3 |
|
|
|
895 |
|
|
Proceeds on sale of investments |
|
|
|
24 |
|
|
|
25 |
|
|
Proceeds on sale of affiliate |
|
|
|
1 |
|
|
|
|
|
|
Cash inflows/(outflows) from derivatives purchased |
|
|
|
94 |
|
|
|
(98 |
) |
|
Loans receivable advanced |
|
|
|
(5 |
) |
|
|
|
|
|
Change in restricted cash |
|
|
|
4 |
|
|
|
(9 |
) |
|
|
|
|
|
|
Net cash (used)/generated by financing activities |
|
|
|
(481 |
) |
|
|
1,039 |
|
|
|
|
|
|
|
Net repayments of debt |
|
|
|
(1,315 |
) |
|
|
(1,135 |
) |
|
Issuance of stock |
|
|
|
4 |
|
|
|
14 |
|
|
Share issue expenses |
|
|
|
|
|
|
|
(1 |
) |
|
Net proceeds from debt |
|
|
|
1,029 |
|
|
|
1,961 |
|
|
Debt issue costs |
|
|
|
(7 |
) |
|
|
(11 |
) |
|
Cash (outflows)/inflows from derivatives with financing |
|
|
|
(133 |
) |
|
|
229 |
|
|
Dividends paid to common stockholders |
|
|
|
(35 |
) |
|
|
(18 |
) |
|
Dividends paid to noncontrolling interests |
|
|
|
(24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)increase in cash and cash equivalents |
|
|
|
(223 |
) |
|
|
1,658 |
|
|
Effect of exchange rate changes on cash |
|
|
|
(11 |
) |
|
|
72 |
|
|
Cash and cash equivalents January 1, |
|
|
|
1,100 |
|
|
|
575 |
|
|
|
|
|
|
|
Cash and cash equivalents June 30, |
|
|
|
866 |
|
|
|
2,305 |
|
|
|
|
|
|
|
4
ANGLOGOLD ASHANTI LIMITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
Prepared in accordance with US GAAP
FOR THE SIX MONTHS ENDED JUNE 30, 2010
(unaudited)
(In millions, except share information)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AngloGold Ashanti stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common |
|
|
paid in |
|
|
comprehensive |
|
|
Accumulated |
|
|
Other |
|
|
Noncontrolling |
|
|
|
|
|
|
|
|
|
|
stock |
|
|
capital |
|
|
income |
|
|
deficit |
|
|
reserves |
|
|
interests |
|
|
Total |
|
|
|
Common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Balance December 31, 2009 |
|
|
361,574,807 |
|
|
|
12 |
|
|
|
7,836 |
|
|
|
(654 |
) |
|
|
(3,914 |
) |
|
|
37 |
|
|
|
128 |
|
|
|
3,445 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
23 |
|
|
|
27 |
|
|
Translation loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(54 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(54 |
) |
Net loss on cash flow hedges removed from other comprehensive
income and reported in income, net of tax of $32 million
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20 |
|
Net gain on available-for-sale financial assets arising during the
period, net of tax of $nil million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 |
|
Release on disposal of available-for-sale financial assets during
the period, net of tax of $2 million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
Share of equity accounted joint ventures other comprehensive
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
(1 |
) |
Stock issues as part of Share Incentive Scheme |
|
|
512,191 |
|
|
|
|
|
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19 |
|
Stock issues in exchange for E Ordinary shares cancelled |
|
|
|
|
|
|
|
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8 |
|
Stock issues transferred from Employee Share Ownership Plan to
exiting employees |
|
|
39,098 |
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
Stock based compensation expense |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(35 |
) |
|
|
|
|
|
|
(28 |
) |
|
|
(63 |
) |
|
|
|
Balance June 30, 2010 |
|
|
362,126,096 |
|
|
|
12 |
|
|
|
7,866 |
|
|
|
(679 |
) |
|
|
(3,945 |
) |
|
|
36 |
|
|
|
123 |
|
|
|
3,413 |
|
|
|
|
5
ANGLOGOLD ASHANTI LIMITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
Prepared in accordance with US GAAP
FOR THE SIX MONTHS ENDED JUNE 30, 2009
(unaudited)
(In millions, except share information)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AngloGold Ashanti stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common |
|
|
paid in |
|
|
comprehensive |
|
|
Accumulated |
|
|
Noncontrolling |
|
|
|
|
|
|
Common |
|
|
stock |
|
|
capital |
|
|
income |
|
|
deficit |
|
|
interests |
|
|
Total |
|
|
|
stock |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Balance December 31, 2008 |
|
|
352,627,761 |
|
|
|
12 |
|
|
|
7,502 |
|
|
|
(1,148 |
) |
|
|
(3,044 |
) |
|
|
84 |
|
|
|
3,406 |
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
230 |
|
|
|
13 |
|
|
|
243 |
|
Translation gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
296 |
|
|
|
|
|
|
|
4 |
|
|
|
300 |
|
Net loss on cash flow hedges removed from other
comprehensive income and reported in income, net of tax
of $27 million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65 |
|
|
|
|
|
|
|
1 |
|
|
|
66 |
|
Net gain on cash flow hedges, net of tax of $6 million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
12 |
|
Hedge ineffectiveness on cash flow hedges, net of tax
of $nil million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
5 |
|
Net gain on available-for-sale financial assets arising
during the period, net of tax of $nil million |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
647 |
|
|
Stock issues as part of Share Incentive Scheme |
|
|
757,011 |
|
|
|
|
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 |
|
Stock issues in exchange for E Ordinary shares cancelled |
|
|
1,181 |
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Stock issues transferred from Employee Share Ownership
Plan to exiting employees |
|
|
29,199 |
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
Stock based compensation expense |
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
Dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18 |
) |
|
|
|
|
|
|
(18 |
) |
|
|
|
Balance June 30, 2009 |
|
|
353,415,152 |
|
|
|
12 |
|
|
|
7,533 |
|
|
|
(749 |
) |
|
|
(2,832 |
) |
|
|
102 |
|
|
|
4,066 |
|
|
|
|
6
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note A. Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of America
(US GAAP) for interim financial information. Accordingly, they do not include all of the
information and footnotes required by US GAAP for annual financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the six-month period ended June
30, 2010 are not necessarily indicative of the results that may be expected for the year ending
December 31, 2010.
The balance sheet as at December 31, 2009 has been derived from the audited financial statements at
that date but does not include all of the information and footnotes required by US GAAP for
complete financial statements.
For further information, refer to the consolidated financial statements for the years ended
December 31, 2009, 2008 and 2007 and as at December 31, 2009 and 2008 and footnotes thereto
included in the Companys Form 6-K dated August 11, 2010.
Note B. Accounting developments
Recently adopted pronouncements
Amendments and technical corrections to various codification topics
In February 2010, the Financial Accounting Standards Board (FASB) updated Accounting Standards
Codification (the Codification or ASC) guidance which contains amendments and technical
corrections to certain Codification topics. While the guidance does not significantly alter
US GAAP, it may result in limited change to existing practice.
The clarifications of the guidance on embedded derivatives and hedging are effective for fiscal
years beginning after December 15, 2009. The adoption of the updated guidance had no impact on the
Companys financial statements.
Distributions to shareholders
In January 2010, the FASB ASC guidance for accounting for distributions to shareholders with
components of stock and cash was updated to clarify that the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a potential limitation on the
total amount of cash that all shareholders can elect to receive in aggregate is considered a share
issuance that is reflected in EPS prospectively. The guidance is effective for interim and annual
reporting periods beginning after December 15, 2009, and should be applied retrospectively to all
prior periods. The adoption of the updated guidance had no impact on the Companys financial
statements.
Fair value measurements
In January 2010, the FASB ASC guidance for disclosures about fair value measurements was updated,
providing amendments to the guidance which requires entities to disclose separately the amounts of
significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the
reasons for the transfers. In addition, entities are required to present separately information
about purchases, sales, issuances, and settlements in the reconciliation of fair value measurements
using significant unobservable inputs (Level 3). The updated guidance further clarified the level
of disaggregation required for assets and liabilities and the disclosures required for inputs and
valuation techniques used to measure the fair value of assets and liabilities that fall in either
Level 2 or Level 3. The disclosures related to Level 1 and Level 2 fair value measurements are
effective for interim and annual reporting periods beginning after December 15, 2009. The adoption
of the updated guidance had no material impact on the Companys financial statements. The
disclosures related to Level 3 fair value measurements are effective for interim and annual
reporting periods beginning after December 15, 2010. The Company does not expect the adoption of
this guidance to have a material impact on the Companys financial statements.
7
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note B. Accounting developments (continued)
Recently adopted pronouncements (continued)
Variable interest entities
In June 2009, the FASB ASC guidance for consolidation accounting was updated to require an entity
to perform a qualitative analysis to determine whether the enterprises variable interest gives it
a controlling financial interest in a variable interest entity (VIE). This analysis identifies a
primary beneficiary of a VIE as the entity that has both of the following characteristics: (i) the
power to direct the activities of a VIE that most significantly impact the entitys economic
performance and (ii) the obligation to absorb losses or receive benefits from the entity that could
potentially be significant to the VIE. The updated guidance is effective as of the beginning of
each reporting entitys first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period, and for interim and annual reporting
periods thereafter. The adoption of this guidance had no impact on the Companys financial
statements.
Subsequent events
In May 2009, the FASB updated the ASC guidance for subsequent events to establish general standards
of accounting for, and disclosures of, events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. In February 2010, the FASB amended
the ASC guidance for subsequent events. As a result, SEC registrants will not disclose the date
through which management evaluated subsequent events in the financial statements. This change for
SEC registrants was effective immediately. The adoption of the updated guidance had no impact on
the Companys financial statements.
8
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note B. Accounting developments (continued)
Recently issued pronouncements
Disclosures about the credit quality of financing receivables and the allowance for credit
losses
In July 2010, the FASB issued guidance to address concerns about the sufficiency, transparency, and
robustness of credit risk disclosures for financing receivables and the related allowance for
credit losses. The guidance requires that entities disclose information at disaggregated levels.
The expanded disclosures include roll-forward schedules of the allowance for credit losses and
information regarding the credit quality of receivables as of the end of a reporting period.
Certain financing receivables that were modified during a reporting period and those that were
previously modified and have re-defaulted require enhanced disclosures.
The new disclosure requirements apply to all entities that have lending arrangements in the form of
receivables or a lessors right to lease payments (other than operating leases), although
disclosures for trade accounts receivable with a contractual maturity of one year or less are
exempt. For public entities, the new disclosures are required for interim and annual periods ending
on or after December 15, 2010, although the disclosures of reporting period activity (i.e.,
allowance roll-forward and modification disclosures) are required for interim and annual periods
beginning on or after December 15, 2010. The Company is currently assessing the impact of the
guidance on the Companys financial statements.
Compensation stock compensation
In April 2010, the FASB issued guidance for stock compensation. The amendments clarify that a
share-based payment award with an exercise price denominated in the currency of a market in which a
substantial portion of the entitys equity securities trades should not be considered to contain a
condition that is not a market, performance, or service condition. Therefore, such an award should
not be classified as a liability if it otherwise qualifies as equity. The guidance also clarifies
that disclosures currently required are applicable to a share-based payment award, including the
nature and terms of share-based payment arrangements. The amendments are effective for fiscal
years, and interim periods within those fiscal years, beginning on or after December 15, 2010. The
amendments will be applied prospectively. A cumulative-effect adjustment will be calculated for all
awards outstanding as of the beginning of the fiscal year in which the amendments are initially
applied, as if the amendments had been applied consistently since the inception of the award. The
cumulative-effect adjustment should be presented separately. The Company does not expect the
adoption of this guidance to have a material impact on the Companys financial statements.
Embedded credit derivatives scope exception
In March 2010, the FASB updated ASC guidance which addresses application of the embedded
derivative scope exception. The updated guidance primarily affects entities that hold or issue
investments in financial instruments that contain embedded credit derivative features and its
provisions could affect the accounting for many types of investments.
The updated guidance is effective on the first day of the first fiscal quarter beginning after June
15, 2010. For a calendar-year-end entity, the guidance becomes effective on July 1, 2010. The
Company does not expect the adoption of this guidance to have a material impact on the Companys
financial statements. At adoption, any difference shall be recognized as a cumulative-effect
adjustment to beginning retained earnings for the period of adoption.
9
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note C. Inventories
The components of inventory consist of the following:
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(in US Dollars, millions) |
|
Short-term |
|
|
|
|
|
|
|
|
Gold in process |
|
|
151 |
|
|
|
115 |
|
Gold on hand (doré/bullion) |
|
|
84 |
|
|
|
75 |
|
Ore stockpiles |
|
|
256 |
|
|
|
227 |
|
Uranium oxide and sulfuric acid |
|
|
43 |
|
|
|
34 |
|
Supplies |
|
|
257 |
|
|
|
252 |
|
|
|
|
|
|
|
791 |
|
|
|
703 |
|
Less: Heap leach inventory(1) |
|
|
(73 |
) |
|
|
(40 |
) |
|
|
|
|
|
|
718 |
|
|
|
663 |
|
|
|
|
|
|
|
(1) |
|
Short-term portion relating to heap leach inventory classified separately, as materials on the leach pad. |
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(in US Dollars, millions) |
|
Long-term |
|
|
|
|
|
|
|
|
Gold in process |
|
|
307 |
|
|
|
324 |
|
Ore stockpiles |
|
|
22 |
|
|
|
25 |
|
Supplies |
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
330 |
|
|
|
350 |
|
Less: Heap leach inventory(1) |
|
|
(307 |
) |
|
|
(324 |
) |
|
|
|
|
|
|
23 |
|
|
|
26 |
|
|
|
|
|
|
|
(1) |
|
Long-term portion relating to heap leach inventory classified separately, as materials on the leach pad. |
Note D. Impairment of assets
Impairments are made up as follows:
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
South Africa |
|
|
|
|
|
|
|
|
Impairment of Tau Lekoa (held for sale) |
|
|
8 |
|
|
|
|
|
|
Continental Africa |
|
|
|
|
|
|
|
|
Write-off of tailings storage facility at Iduapriem |
|
|
8 |
|
|
|
|
|
Write-off of vehicles and heavy mining equipment at Geita |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
19 |
|
|
|
|
|
|
|
|
10
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note E. Debt
Loan facilities
During the second quarter of 2010, the Company repaid and cancelled the 2009 Term Facility and the
$1.15 billion syndicated loan facility, and in addition, cancelled the 2009 Revolving Credit
Facility which was undrawn. The Company entered into a new $1.0 billion four year revolving credit
facility to replace these facilities. The cancellation of these debt facilities resulted in a
once-off charge to earnings of $8 million related to accelerated amortization of fees.
Amounts outstanding under the $1.0 billion facility bear interest at a margin of 1.75 percent over
the London Interbank Offered Rate (LIBOR). A commitment fee of 0.70 percent is payable on the
undrawn portion of the facility.
As of June 30, 2010, $nil million was drawn under the $1.0 billion revolving credit facility.
Convertible bonds
On May 22, 2009, the Company concluded an issue of convertible bonds, in the aggregate principal
amount of $732.5 million at an interest rate of 3.5 percent convertible into American depositary
shares (ADSs) of AngloGold Ashanti at an initial conversion price of $47.6126. The conversion
price is subject to standard weighted average anti-dilution protection. The convertible bonds were
issued by AngloGold Ashanti Holdings Finance plc, a finance company wholly-owned by AngloGold
Ashanti Limited. AngloGold Ashanti Limited has fully and unconditionally guaranteed the convertible
bonds issued by AngloGold Ashanti Holdings Finance plc. There are no significant restrictions on
the ability of AngloGold Ashanti Limited to obtain funds from its subsidiaries by dividend or loan.
The Company is separately accounting for the conversion features of the convertible bonds at fair
value as a derivative liability, which was determined to be $142.2 million on May 22, 2009, with
subsequent changes in fair value recorded in earnings each period. The fair value of the
derivative liability was $175 million as of December 31, 2009. As at June 30, 2010, the fair value
of the derivative liability was $111 million and the $64 million decrease in fair value was
recorded during the six months ended June 30, 2010 as a non-hedge derivative gain. The difference
between the initial carrying value and the stated value of the convertible bonds, $732.5 million,
is being accreted to interest expense using the effective interest method over the 5 year term of
the bonds, resulting in a carrying value as at June 30, 2010 of $622 million.
Rated bonds
On April 22, 2010, the Company announced the pricing of an offering of $1.0 billion of 10-year and
30-year unsecured notes. The notes were issued by AngloGold Ashanti Holdings plc, a wholly-owned
subsidiary of AngloGold Ashanti, and are fully and unconditionally guaranteed by AngloGold Ashanti
Limited. The offering closed on April 28, 2010.
The offering consisted of $700 million of 10 year unsecured notes at a semi-annual coupon of 5.375
percent and $300 million of 30 year unsecured notes at a semi-annual coupon of 6.50 percent.
As at June 30, 2010, the total carrying value of the $1.0 billion notes (including accrued interest
of $10 million) amounted to $1,004 million.
11
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note F. Loss/(profit) on sale of assets, realization of loans, indirect taxes and other
The Company recorded a loss of $16 million (before taxation of $1 million) in the six months
ended June 30, 2010, compared to a profit of $83 million (before taxation of $23 million) recorded
in the corresponding period in 2009, consisting of:
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
Reassessment of indirect taxes payable in Continental Africa |
|
|
11 |
|
|
|
(1 |
) |
Impairment of debtors |
|
|
7 |
|
|
|
6 |
|
Profit on disposal of investments |
|
|
(6 |
) |
|
|
|
|
Loss on disposal of land, equipment and assets in South Africa, Continental Africa and the Americas |
|
|
4 |
|
|
|
2 |
|
Mining contractor termination costs |
|
|
1 |
|
|
|
|
|
Profit on disposal of 33.33 percent joint venture interest in Boddington Gold Mine in Australia |
|
|
|
|
|
|
(104 |
) |
Insurance claim recovery |
|
|
(1 |
) |
|
|
(1 |
) |
Loss on consignment stock |
|
|
|
|
|
|
15 |
|
|
|
|
|
|
|
16 |
|
|
|
(83 |
) |
|
|
|
12
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note G. Non-hedge derivative loss/gain
The hedge buy-back during July 2009 resulted in the re-designation of all contracts that were
previously designated as normal purchase and sale exempted (NPSE) as non-hedge derivatives,
which resulted in an increase in current non-hedge derivative liabilities and a consequential loss
on non-hedge derivatives of $556 million as of December 31, 2009. During the six months ended June
30, 2010, the fair value of contracts that were previously designated as NPSE further increased by
$96 million (recorded as a non-hedge derivative loss), while settlements amounted to $233 million
resulting in a $419 million derivative liability balance as at June 30, 2010.
A loss on non-hedge derivatives of $409 million was recorded in the six months ended June 30, 2010
compared to a gain of $239 million in the same period of 2009 relating to the use of non-hedging
instruments.
The net loss recorded in the six months ended June 30, 2010 relates to realized losses on non-hedge
derivatives, the revaluation of non-hedge derivatives resulting from changes in the prevailing spot
gold price, exchange rates, interest rates and volatilities during the six months ended June 30,
2010, partially offset by the fair value gain of the conversion features of convertible bonds
amounting to $64 million (as described in note E).
Note H. Taxation
The net taxation expense of $106 million in the six months ended June 30, 2010 compared to a
net expense of $154 million for the same period in 2009, constitutes the following:
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
Charge for current taxation(1) |
|
|
127 |
|
|
|
97 |
|
(Benefit)/charge for deferred taxation(2) |
|
|
(21 |
) |
|
|
57 |
|
|
|
|
|
|
|
106 |
|
|
|
154 |
|
|
|
|
|
|
|
(1) |
|
The higher current taxation in 2010 is mainly due to higher
taxable earnings partially offset by benefits from ongoing
hedge restructures. |
|
(2) |
|
Includes deferred taxation credits of $31 million on
unrealized non-hedge derivative losses (2009: $nil
million). |
Uncertain taxes
As at June 30, 2010, the Company had $151 million of total unrecognized tax benefits which, if
recognized, would affect the Companys effective income tax rate.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|
|
|
|
|
|
|
(in US Dollars, millions) |
|
Balance at January 1, 2010 |
|
|
149 |
|
Additions for tax positions of prior years |
|
|
6 |
|
Translation |
|
|
(4 |
) |
|
|
|
|
Balance as at June 30, 2010 |
|
|
151 |
|
|
|
|
|
The Companys continuing practice is to recognize interest and penalties related to unrecognized
tax benefits as part of its income tax expense. During the six months ended June 30, 2010, the
Company recognized approximately $4 million in interest. As at June 30, 2010, the Company had
accrued $56 million in interest.
13
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note I. Segment information
The Company produces gold as its primary product and does not have distinct divisional segments
in terms of principal business activity, but manages its business on the basis of different
geographic segments. During 2010, the Companys Chief Operating Decision Maker, defined as the
Executive Management team, changed the basis of segment reporting as a result of a re-alignment of
the management reporting structure. Navachab which was previously included with Southern Africa
forms part of Continental Africa and North and South America have been combined into the Americas.
Southern Africa (previously South Africa and Navachab) has been renamed to South Africa. Where
applicable, the corresponding items of segment information for prior periods presented have been
restated to reflect this.
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
Revenues by area |
|
|
|
|
|
|
|
|
South Africa |
|
|
871 |
|
|
|
777 |
|
Continental Africa |
|
|
818 |
|
|
|
727 |
|
Australasia |
|
|
213 |
|
|
|
168 |
|
Americas |
|
|
496 |
|
|
|
355 |
|
Other, including Corporate and Non-gold producing subsidiaries |
|
|
4 |
|
|
|
(19 |
) |
|
|
|
|
|
|
2,402 |
|
|
|
2,008 |
|
Less: Equity method investments included above |
|
|
(172 |
) |
|
|
(169 |
) |
Plus/less: Loss/(gain) on realized non-hedge derivatives included above |
|
|
176 |
|
|
|
(338 |
) |
|
|
|
Total revenues |
|
|
2,406 |
|
|
|
1,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
Segment income/(loss) |
|
|
|
|
|
|
|
|
South Africa |
|
|
285 |
|
|
|
215 |
|
Continental Africa |
|
|
215 |
|
|
|
48 |
|
Australasia |
|
|
77 |
|
|
|
2 |
|
Americas |
|
|
266 |
|
|
|
114 |
|
Other, including Corporate and Non-gold producing subsidiaries |
|
|
(102 |
) |
|
|
(91 |
) |
|
|
|
Total segment income |
|
|
741 |
|
|
|
288 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
Reconciliation of segment income to Net income attributable to AngloGold Ashanti |
|
|
|
|
|
|
|
|
Segment total |
|
|
741 |
|
|
|
288 |
|
Exploration costs |
|
|
(94 |
) |
|
|
(51 |
) |
General and administrative expenses |
|
|
(100 |
) |
|
|
(73 |
) |
Market development costs |
|
|
(5 |
) |
|
|
(6 |
) |
Non-hedge derivative (loss)/gain |
|
|
(409 |
) |
|
|
239 |
|
Taxation expense |
|
|
(106 |
) |
|
|
(154 |
) |
Noncontrolling interests |
|
|
(23 |
) |
|
|
(13 |
) |
|
|
|
Net income attributable to AngloGold Ashanti |
|
|
4 |
|
|
|
230 |
|
|
|
|
14
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note I. Segment information (continued)
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(in US Dollars, millions) |
|
Segment assets |
|
|
|
|
|
|
|
|
South Africa(1) |
|
|
3,215 |
|
|
|
3,355 |
|
Continental Africa |
|
|
3,982 |
|
|
|
4,054 |
|
Australasia |
|
|
394 |
|
|
|
496 |
|
Americas |
|
|
2,013 |
|
|
|
2,012 |
|
Other, including Corporate and Non-gold producing subsidiaries |
|
|
665 |
|
|
|
745 |
|
|
|
|
Total segment assets |
|
|
10,269 |
|
|
|
10,662 |
|
|
|
|
|
|
|
(1) |
|
Includes properties held for sale of Tau Lekoa of $61 million (2009: $73 million). |
15
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note J. Income per share data
The following table sets forth the computation of basic
and diluted income per share (in US dollars millions, except per
share data):
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Numerator |
|
|
|
|
|
|
|
|
Net income attributable to AngloGold Ashanti |
|
|
4 |
|
|
|
230 |
|
|
Less Dividends: |
|
|
|
|
|
|
|
|
Ordinary shares |
|
|
35 |
|
|
|
18 |
|
E Ordinary shares |
|
|
|
|
|
|
|
|
|
|
|
Undistributed (losses)/income |
|
|
(31 |
) |
|
|
212 |
|
|
|
|
|
Ordinary shares undistributed (losses)/income |
|
|
(31 |
) |
|
|
211 |
|
E Ordinary shares undistributed income |
|
|
|
|
|
|
1 |
|
|
|
|
Total undistributed (losses)/income |
|
|
(31 |
) |
|
|
212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Denominator for basic income per ordinary share |
|
|
|
|
|
|
|
|
Ordinary shares |
|
|
362,413,862 |
|
|
|
353,918,523 |
|
Fully vested options(1) |
|
|
1,063,772 |
|
|
|
670,465 |
|
|
|
|
Weighted average number of ordinary shares |
|
|
363,477,634 |
|
|
|
354,588,988 |
|
|
|
|
|
|
|
|
|
|
Effect of dilutive potential ordinary shares |
|
|
|
|
|
|
|
|
Dilutive potential of stock incentive options(2) |
|
|
|
|
|
|
907,306 |
|
Dilutive potential of convertible bonds(3) |
|
|
|
|
|
|
|
|
Dilutive potential of E Ordinary shares |
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted income per share adjusted weighted average number of ordinary shares and assumed conversions |
|
|
363,477,634 |
|
|
|
355,496,294 |
|
|
|
|
Weighted average number of E Ordinary shares used in calculation of basic and diluted income per E Ordinary share |
|
|
3,483,676 |
|
|
|
3,918,250 |
|
|
|
|
|
|
|
(1) |
|
Compensation awards are included in the calculation of
basic income per common share from when the necessary
conditions have been met, and it is virtually certain that
shares will be issued as a result of employees exercising
their options. |
|
(2) |
|
The calculation of diluted income per common share for the
six months ended June 30, 2010 did not assume the effect of
971,993 shares, issuable upon the exercise of stock
incentive options as their effects are anti-dilutive. |
|
(3) |
|
The calculation of diluted income per common share for the
six months ended June 30, 2010 and 2009 did not assume the
effect of 15,384,615 shares, issuable upon the exercise of
convertible bonds as their effects are anti-dilutive. |
16
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note K. Accumulated other comprehensive income
Accumulated other comprehensive income, net of related taxation, consists of the following:
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
Opening balance |
|
|
(654 |
) |
|
|
(1,148 |
) |
Translation (loss)/gain |
|
|
(54 |
) |
|
|
296 |
|
Financial instruments |
|
|
29 |
|
|
|
103 |
|
|
|
|
Total accumulated other comprehensive income |
|
|
(679 |
) |
|
|
(749 |
) |
|
|
|
Total accumulated other comprehensive income as at June 30, 2010 includes a net cumulative loss in
respect of cash flow hedges of $2 million (December 31, 2009: $22 million), net of deferred tax of
$1 million (December 31, 2009: $33 million).
Total accumulated other comprehensive income as at June 30, 2010 includes a net cumulative gain in
respect of available for sale financial assets of $78 million (December 31, 2009: $69 million), net
of deferred tax of $nil million (December 31, 2009: $3 million).
Comprehensive income consists of the following:
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
Net income |
|
|
27 |
|
|
|
243 |
|
Translation (loss)/gain |
|
|
(54 |
) |
|
|
300 |
|
Financial instruments |
|
|
29 |
|
|
|
104 |
|
|
|
|
Total comprehensive income |
|
|
2 |
|
|
|
647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
Total comprehensive income attributable to: |
|
|
|
|
|
|
|
|
AngloGold Ashanti |
|
|
(21 |
) |
|
|
629 |
|
Noncontrolling interests |
|
|
23 |
|
|
|
18 |
|
|
|
|
|
|
|
2 |
|
|
|
647 |
|
|
|
|
17
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note L. Employee benefit plans
The Company has made provision for pension and provident schemes covering substantially all
employees.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
|
|
Pension |
|
|
Other |
|
|
Pension |
|
|
Other |
|
|
|
benefits |
|
|
benefits |
|
|
benefits |
|
|
benefits |
|
Service cost |
|
|
4 |
|
|
|
1 |
|
|
|
2 |
|
|
|
|
|
Interest cost |
|
|
9 |
|
|
|
6 |
|
|
|
6 |
|
|
|
4 |
|
Expected return on plan assets |
|
|
(13 |
) |
|
|
|
|
|
|
(8 |
) |
|
|
|
|
|
|
|
Net periodic benefit cost |
|
|
|
|
|
|
7 |
|
|
|
|
|
|
|
4 |
|
|
|
|
Employer contributions
As disclosed in the consolidated financial statements for the years ended December 31, 2009,
2008 and 2007 and as at December 31, 2009 and 2008 and footnotes thereto included in the Companys
Form 6-K dated August 11, 2010, the Company expected to contribute $6 million to its pension plan
in 2010. As at June 30, 2010, the Company had contributed $4 million during 2010.
18
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note M. Other long-term assets
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(in US Dollars, millions) |
|
Investments in affiliates unlisted |
|
|
7 |
|
|
|
6 |
|
Investments in affiliates listed |
|
|
5 |
|
|
|
2 |
|
Investments in equity accounted joint ventures |
|
|
619 |
|
|
|
659 |
|
|
|
|
Carrying value of equity method investments |
|
|
631 |
|
|
|
667 |
|
|
Investment in marketable equity securities available for sale |
|
|
124 |
|
|
|
111 |
|
Investment in marketable debt securities held to maturity |
|
|
13 |
|
|
|
10 |
|
Investment in non-marketable assets held to maturity |
|
|
2 |
|
|
|
2 |
|
Investment in non-marketable equity securities available for sale |
|
|
4 |
|
|
|
4 |
|
Investment in non-marketable debt securities held to maturity |
|
|
55 |
|
|
|
48 |
|
Restricted cash |
|
|
45 |
|
|
|
53 |
|
Other non-current assets |
|
|
169 |
|
|
|
127 |
|
|
|
|
|
|
|
1,043 |
|
|
|
1,022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(in US Dollars, millions) |
|
Investment in marketable equity securities available for sale |
|
|
124 |
(1) |
|
|
111 |
|
Available for sale investments in marketable equity securities consists of investments in ordinary
shares.
Total gains, net of related taxation, on marketable equity securities included in accumulated
other comprehensive income during the six months ended June 30, 2010 amount to $14 million. Total
losses, net of related taxation, on marketable equity securities included in accumulated other
comprehensive income during the six months ended June 30, 2010 amount to $1 million. The Company
holds various equities as strategic investments in gold exploration companies. Four of the
strategic investments are in an unrealized loss position and the Company has the intent and
ability to hold these investments until the losses are recovered.
The following tables presents the gross unrealized losses and fair value of the Companys
investments with unrealized losses that are not deemed to be other-than-temporarily impaired,
aggregated by length of time that the individual securities have been in a continuous unrealized
loss position:
19
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note M. Other long-term assets (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 |
|
|
More than 12 |
|
|
|
|
|
|
months |
|
|
months |
|
|
Total |
|
|
|
(in US Dollars, millions) |
|
|
At June 30, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate fair value of investments with unrealized losses |
|
|
1 |
|
|
|
|
|
|
|
1 |
|
Aggregate unrealized losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2009 (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate fair value of investments with unrealized losses |
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate unrealized losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
During 2010, the Company disposed of the shares
held in Red 5 Limited. The sale resulted in a transfer
of fair value adjustments of $4 million (net of
taxation) previously included in accumulated other
comprehensive income to the income statement in 2010. |
|
(2) |
|
In aggregate, the fair value of strategic
investments in an unrealized loss position, as well as
the aggregate unrealized losses amount to less than $1
million, respectively. |
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(in US Dollars, millions) |
|
Investment in marketable debt securities held to maturity |
|
|
13 |
|
|
|
10 |
|
Investments in marketable debt securities represent held to maturity government and corporate
bonds. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in non-marketable assets held to maturity |
|
|
2 |
|
|
|
2 |
|
Investments in non-marketable assets represent secured loans and receivables secured by pledge
of assets. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in non-marketable equity securities available for sale |
|
|
4 |
|
|
|
4 |
|
Investments in non-marketable equity securities mainly represent shares held in XDM Resources
Limited. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in non-marketable debt securities held to maturity |
|
|
55 |
|
|
|
48 |
|
Investments in non-marketable debt securities represent the held to maturity fixed-term
deposits required by legislation for the Environmental Rehabilitation Trust Fund and Nufcor
Uranium Trust Fund. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2010 the contractual maturities of debt securities were as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Up to three years |
|
|
3 |
|
|
|
|
|
Three to seven years |
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-marketable debt securities |
|
|
|
|
|
|
|
|
Less than one year |
|
|
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair values of the held to maturity debt securities at June 30, 2010 and December 31, 2009
approximate cost. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash |
|
|
45 |
|
|
|
53 |
|
Restricted cash represent cash balances held by Environmental Rehabilitation Trust Funds. |
|
|
|
|
|
|
|
|
20
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note N. Derivative instruments
In the normal course of its operations, the Company is exposed to gold and other commodity
price, currency, interest rate, liquidity and non-performance risk, which includes credit risk. The
Company is also exposed to certain by-product commodity price risk. In order to manage these risks,
the Company enters into derivative transactions and has developed a risk management process to
facilitate, control and monitor these risks. The board has approved and monitors this risk
management process, inclusive of documented treasury policies, counterpart limits, controlling and
reporting structures. The Company does not acquire, hold or issue derivatives for trading purposes.
Contracts that meet the criteria for hedge accounting are designated as the hedging instruments
hedging the variability of forecasted cash flows from the sale of production into the spot market
and capital expenditure and are classified as cash flow hedges under the FASB ASC guidance on
derivatives and hedging. The ineffective portion of matured and existing cash flow hedges
recognized in loss on non-hedge derivatives in the income statement during the six months ended
June 30, 2010 was $nil million. As at June 30, 2010, the Company does not have any cash flow hedge
contracts relating to product sales. Cash flow hedge contracts pertaining to capital expenditure,
with a maturity value of $3 million as at June 30, 2010, are currently recorded in accumulated
other comprehensive income and are expected to be reclassified from accumulated other comprehensive
income and recognized as an adjustment to depreciation expense, until 2012.
A loss on non-hedge derivatives of $409 million was recorded in the six months ended June 30, 2010
compared to a gain of $239 million in the same period of 2009. See note G Non-hedge derivative
loss for additional information.
Gold price and currency risk management activities
Gold and currency derivative instruments are denominated in South African rands, US dollars and
Australian dollars. The derivative instruments utilized are forward sale and purchase contracts,
purchased and sold put options, and purchased and sold call options. The Companys reserve and
financial strength has allowed it to arrange unmargined credit lines with counterparts.
Reduction in derivatives position
During the quarter ended June 30, 2010, the Company continued to deliver into hedge
commitments, as part of its strategy to reduce its overall position and increase exposure to spot
gold prices. As a result, the net delta of the hedge book decreased (from March 31, 2010) by
290,000 ounces, or 9 percent, to 3.06 million ounces or 95 tonnes (at March 31, 2010: 3.35 million
ounces or 104 tonnes), with total commitments of 3.22 million ounces, reflecting a decline of
330,000 ounces, or 9 percent, at June 30, 2010 over committed ounces of 3.55 million ounces as of
March 31, 2010.
Net delta open hedge position as at June 30, 2010
The negative marked-to-market value of all hedge transactions making up the hedge positions as
at June 30, 2010 was a $2.41 billion (liability), which increased by $0.34 billion over the quarter
ended March 31, 2010. This value was based on a gold price of $1,241 per ounce, exchange rates of
R7.63/$ and A$/$0.84 and the prevailing market interest rates and volatilities at that date.
These marked-to-market valuations are not predictive of the future value of the hedge position, nor
of the future impact on the revenue of the Company. The valuation represents the theoretical cost
of exiting all hedge contracts at the time of valuation, at market prices and rates available at
that time.
The following table indicates the Companys unaudited gold hedge position at a weighted average
settlement price as at June 30, 2010.
21
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note N. Derivative instruments (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
2010 |
|
|
2011 |
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
|
2015 |
|
|
Total |
|
|
US DOLLAR GOLD |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward contracts |
|
Amount (oz) |
|
|
* (538,542 |
) |
|
|
60,000 |
|
|
|
122,500 |
|
|
|
119,500 |
|
|
|
91,500 |
|
|
|
|
|
|
|
* (145,042 |
) |
|
|
US$/oz |
|
*$ |
1,128 |
|
|
$ |
227 |
|
|
$ |
418 |
|
|
$ |
477 |
|
|
$ |
510 |
|
|
|
|
|
|
*$ |
3,025 |
|
|
|
|
Put options sold |
|
Amount (oz) |
|
|
177,930 |
|
|
|
148,000 |
|
|
|
85,500 |
|
|
|
60,500 |
|
|
|
60,500 |
|
|
|
|
|
|
|
532,430 |
|
|
|
US$/oz |
|
$ |
938 |
|
|
$ |
623 |
|
|
$ |
538 |
|
|
$ |
440 |
|
|
$ |
450 |
|
|
|
|
|
|
$ |
674 |
|
|
|
|
Call options sold |
|
Amount (oz) |
|
|
492,340 |
|
|
|
776,800 |
|
|
|
811,420 |
|
|
|
574,120 |
|
|
|
680,470 |
|
|
|
29,000 |
|
|
|
3,364,150 |
|
|
|
US$/oz |
|
$ |
588 |
|
|
$ |
554 |
|
|
$ |
635 |
|
|
$ |
601 |
|
|
$ |
604 |
|
|
$ |
670 |
|
|
$ |
598 |
|
|
RAND/GOLD |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward contracts |
|
Amount (oz) |
|
|
* (20,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* (20,000 |
) |
|
|
ZAR/oz |
|
|
*R7,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*R7,064 |
|
|
|
|
Put options sold |
|
Amount (oz) |
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
|
ZAR/oz |
|
|
R7,525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R7,525 |
|
|
|
|
Call options sold |
|
Amount (oz) |
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
|
ZAR/oz |
|
|
R8,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R8,350 |
|
|
** Total net gold: |
|
Delta (oz) |
|
|
61,073 |
|
|
|
(820,484 |
) |
|
|
(888,798 |
) |
|
|
(661,884 |
) |
|
|
(726,053 |
) |
|
|
(26,462 |
) |
|
|
(3,062,608 |
) |
|
|
Committed (oz) |
|
|
46,202 |
|
|
|
(836,800 |
) |
|
|
(933,920 |
) |
|
|
(693,620 |
) |
|
|
(771,970 |
) |
|
|
(29,000 |
) |
|
|
(3,219,108 |
) |
|
|
|
|
* |
|
Represents a net long gold position and net short US Dollars and Rands position resulting from
both forward sales and purchases for the period. |
|
** |
|
The Delta of the hedge position indicated above is the equivalent gold position that would have
the same marked-to-market sensitivity for a small change in the gold price. This is calculated
using the Black-Scholes option formula with the prevailing market prices, interest rates and
volatilities as at June 30, 2010. |
22
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note N. Derivative instruments (continued)
Foreign exchange price risk protection agreements
The Company enters into currency forward exchange and currency option contracts to hedge
certain anticipated transactions denominated in foreign currencies. The objective of the Companys
foreign currency hedging activities is to protect the Company from the risk that the eventual cash
flows resulting from transactions denominated in US dollars will be adversely affected by changes
in exchange rates.
The following table indicates the Companys unaudited currency hedge position at June 30, 2010
(references to ''$ are to the US dollar and references to ''A$ are to the Australian dollar).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
2010 |
|
|
2011 |
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
|
2015-2016 |
|
|
Total |
|
|
RAND DOLLAR (000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Call options sold |
|
Amount ($) |
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
|
US$/ZAR |
|
|
R8.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R8.08 |
|
|
A DOLLAR (000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Put options purchased |
|
Amount ($) |
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
|
A$/US$ |
|
$ |
0.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.82 |
|
Put options sold |
|
Amount ($) |
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
|
A$/US$ |
|
$ |
0.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.86 |
|
Call options sold |
|
Amount ($) |
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000 |
|
|
|
A$/US$ |
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.79 |
|
|
Interest and liquidity risk
Fluctuations in interest rates impacts interest paid and received on the short-term cash
investments and financing activities, giving rise to interest rate risk. The Company utilizes money
market and debt instruments to manage its interest rate and liquidity risk.
In the ordinary course of business, the Company receives cash from the proceeds of its gold sales
and is required to fund working capital requirements. This cash is managed to ensure surplus funds
are invested in a manner to achieve market related returns while minimizing risks. The Company is
able to actively source financing at competitive rates. The counterparts are financial and banking
institutions and their credit ratings are regularly monitored by the Company.
23
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note N. Derivative instruments (continued)
Non-performance risk
Realization of contracts is dependent upon the counterparts performance. The Company has not
obtained collateral or other security to support financial instruments subject to non-performance
risk, but regularly monitors the credit standing of counterparts. The Company spreads its business
over a number of financial and banking institutions and believes that little to no concentration of
non-performance risk exists. Limits for each counterpart are based on the assessed credit quality
of each counterpart. The AngloGold Ashanti Treasury Committee makes recommendations for board
approval of all counterparts and the limits to be applied to each counterpart. Where possible,
management puts ISDA netting agreements in place.
The combined maximum credit risk exposure of the Company as at June 30, 2010 is as follows.
|
|
|
|
|
|
|
At June 30, |
|
|
|
2010 |
|
|
|
(unaudited) |
|
|
|
(In US Dollars, millions) |
|
Forward sales type agreements commodity |
|
|
150 |
|
Warrants on shares |
|
|
2 |
|
|
|
|
|
|
|
|
152 |
|
|
|
|
|
The fair value of derivative assets and liabilities reflects non-performance risk relating to the
counterparts and the Company, respectively, as at June 30, 2010.
Fair value of financial instruments
The estimated fair values of financial instruments are determined at discrete points in time based
on relevant market information. The estimated fair values of the Companys financial instruments,
as measured at June 30, 2010 and December 31, 2009, are as follows (assets (liabilities)):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2010 |
|
|
December 31, 2009 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
(in US Dollars, millions) |
|
|
|
Carrying |
|
|
|
|
|
|
Carrying |
|
|
|
|
|
|
amount |
|
|
Fair Value |
|
|
amount |
|
|
Fair Value |
|
|
Cash and cash equivalents |
|
|
866 |
|
|
|
866 |
|
|
|
1,100 |
|
|
|
1,100 |
|
Restricted cash |
|
|
14 |
|
|
|
14 |
|
|
|
12 |
|
|
|
12 |
|
Short-term debt |
|
|
(24 |
) |
|
|
(24 |
) |
|
|
(1,292 |
) |
|
|
(1,292 |
) |
Long-term debt |
|
|
(1,668 |
) |
|
|
(1,905 |
) |
|
|
(667 |
) |
|
|
(889 |
) |
Derivatives |
|
|
(2,535 |
) |
|
|
(2,535 |
) |
|
|
(2,366 |
) |
|
|
(2,366 |
) |
|
24
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note N. Derivative instruments (continued)
The following methods and assumptions were used to estimate the fair value of each class of
financial instrument:
Cash restricted for use, cash and cash equivalents and short-term debt
The carrying amounts approximate fair value because of the short-term duration of these
instruments.
Long-term debt
The fair values of the convertible and rated bonds are shown at their quoted market value. Other
long-term debt re-prices on a short-term floating rate basis, and accordingly the carrying amount
approximates to fair value.
Derivatives
The fair value of volatility-based instruments (i.e. options) are estimated based on market
prices, volatilities, credit risk and interest rates, while the fair value of forward sales and
purchases are estimated based on the quoted market prices and credit risk for the contracts at
June 30, 2010 and December 31, 2009. The Company uses the Black-Scholes option pricing formula to
value option contracts.
Fair value of the derivative assets/(liabilities) split by accounting designation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2010 |
|
|
|
|
|
(unaudited) |
|
|
|
|
|
(in US Dollars, millions) |
|
|
|
|
|
Non-hedge |
|
|
|
|
|
|
Balance Sheet location |
|
accounted |
|
|
Total |
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
Forward sales type agreements commodity |
|
Current assets - derivatives |
|
|
150 |
|
|
|
150 |
|
|
|
|
Total hedging contracts |
|
|
|
|
150 |
|
|
|
150 |
|
Warrants on shares |
|
Non current assets - derivatives |
|
|
2 |
|
|
|
2 |
|
|
|
|
Total derivatives |
|
|
|
|
152 |
|
|
|
152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2010 |
|
|
|
|
|
(unaudited) |
|
|
|
|
|
(in US Dollars, millions) |
|
|
|
|
|
Non-hedge |
|
|
|
|
|
|
Balance Sheet location |
|
accounted |
|
|
Total |
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
Forward sales type agreements commodity |
|
Current liabilities - derivatives |
|
|
(396 |
) |
|
|
(396 |
) |
Option contracts commodity |
|
Current liabilities - derivatives |
|
|
(2,179 |
) |
|
|
(2,179 |
) |
|
|
|
Total hedging contracts |
|
|
|
|
(2,575 |
) |
|
|
(2,575 |
) |
Embedded derivatives |
|
Non-current liabilities - derivatives |
|
|
(1 |
) |
|
|
(1 |
) |
Option component of convertible bonds |
|
Non-current liabilities - derivatives |
|
|
(111 |
) |
|
|
(111 |
) |
|
|
|
Total derivatives |
|
|
|
|
(2,687 |
) |
|
|
(2,687 |
) |
|
|
|
25
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note N. Derivative instruments (continued)
Fair value of the derivative assets/(liabilities) split by accounting designation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2009 |
|
|
|
|
|
(in US Dollars, millions) |
|
|
|
|
|
Cash flow |
|
|
|
|
|
|
|
|
|
|
|
hedge |
|
|
Non-hedge |
|
|
|
|
|
|
Balance Sheet location |
|
accounted |
|
|
accounted |
|
|
Total |
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward sales type agreements commodity |
|
Current assets - derivatives |
|
|
|
|
|
|
283 |
|
|
|
283 |
|
Option contracts commodity |
|
Current assets - derivatives |
|
|
|
|
|
|
47 |
|
|
|
47 |
|
|
|
|
Total hedging contracts |
|
|
|
|
|
|
|
|
330 |
|
|
|
330 |
|
Warrants on shares |
|
Non-current assets - derivatives |
|
|
|
|
|
|
5 |
|
|
|
5 |
|
|
|
|
Total derivatives |
|
|
|
|
|
|
|
|
335 |
|
|
|
335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2009 |
|
|
|
|
|
(in US Dollars, millions) |
|
|
|
|
|
Cash flow |
|
|
|
|
|
|
|
|
|
|
|
hedge |
|
|
Non-hedge |
|
|
|
|
|
|
Balance Sheet location |
|
accounted |
|
|
accounted |
|
|
Total |
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward sales type agreements commodity |
|
Current liabilities - derivatives |
|
|
(37 |
) |
|
|
(441 |
) |
|
|
(478 |
) |
Option contracts commodity |
|
Current liabilities - derivatives |
|
|
|
|
|
|
(2,034 |
) |
|
|
(2,034 |
) |
Interest rate swaps Gold |
|
Current liabilities - derivatives |
|
|
|
|
|
|
(13 |
) |
|
|
(13 |
) |
|
|
|
Total hedging contracts |
|
|
|
|
(37 |
) |
|
|
(2,488 |
) |
|
|
(2,525 |
) |
Embedded derivatives |
|
Non-current liabilities - derivatives |
|
|
|
|
|
|
(1 |
) |
|
|
(1 |
) |
Option component of convertible bonds |
|
Non-current liabilities - derivatives |
|
|
|
|
|
|
(175 |
) |
|
|
(175 |
) |
|
|
|
Total derivatives |
|
|
|
|
(37 |
) |
|
|
(2,664 |
) |
|
|
(2,701 |
) |
|
|
|
26
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note N. Derivative instruments (continued)
Non-hedge derivative gain/(loss) recognized
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
Location of gain/(loss) in income |
|
(in US Dollars, millions) |
|
|
Realized |
|
|
|
|
|
|
|
|
|
|
Forward sales type agreements commodity |
|
Non-hedge derivative gain/(loss) |
|
|
(5 |
) |
|
|
222 |
|
Option contracts commodity |
|
Non-hedge derivative gain/(loss) |
|
|
(157 |
) |
|
|
18 |
|
Forward sales agreements currency |
|
Non-hedge derivative gain/(loss) |
|
|
(1 |
) |
|
|
93 |
|
Option contracts currency |
|
Non-hedge derivative gain/(loss) |
|
|
2 |
|
|
|
3 |
|
Interest rate swaps Gold |
|
Non-hedge derivative gain/(loss) |
|
|
(15 |
) |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
(176 |
) |
|
|
338 |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
|
|
|
|
Forward sales type agreements commodity |
|
Non-hedge derivative gain/(loss) |
|
|
(87 |
) |
|
|
(93 |
) |
Option contracts commodity |
|
Non-hedge derivative gain/(loss) |
|
|
(222 |
) |
|
|
11 |
|
Forward sales agreements currency |
|
Non-hedge derivative gain/(loss) |
|
|
|
|
|
|
(7 |
) |
Option contracts currency |
|
Non-hedge derivative gain/(loss) |
|
|
1 |
|
|
|
3 |
|
Interest rate swaps Gold |
|
Non-hedge derivative gain/(loss) |
|
|
14 |
|
|
|
2 |
|
Option component of convertible bonds |
|
Non-hedge derivative gain/(loss) |
|
|
64 |
|
|
|
(15 |
) |
Warrants on shares |
|
Non-hedge derivative gain/(loss) |
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(233 |
) |
|
|
(99 |
) |
|
|
|
|
|
(Loss)/gain on non-hedge derivatives |
|
|
|
|
(409 |
) |
|
|
239 |
|
|
|
|
|
|
27
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note N. Derivative instruments (continued)
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2010 |
|
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
|
|
Cash flow |
|
|
|
|
|
|
|
|
|
hedges, before |
|
|
Cash flow hedges removed from |
|
|
|
|
|
|
taxation |
|
|
equity, before taxation |
|
|
Hedge ineffectiveness, before taxation |
|
|
|
|
|
|
|
|
|
Amount of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(gain)/loss |
|
|
|
|
|
|
|
|
|
|
|
|
Location of |
|
reclassified |
|
|
|
|
|
|
|
|
Gain/(loss) |
|
|
(gain)/loss |
|
from |
|
|
|
|
|
|
|
|
recognized in |
|
|
reclassified from |
|
accumulated |
|
|
|
|
|
|
|
|
accumulated |
|
|
accumulated |
|
other |
|
|
|
|
Amount of |
|
|
|
other |
|
|
other |
|
comprehensive |
|
|
|
|
(gain)/loss |
|
|
|
comprehensive |
|
|
comprehensive |
|
income into |
|
|
|
|
recognized in |
|
|
|
income |
|
|
income into |
|
income |
|
|
Location of (gain)/loss |
|
income |
|
|
|
(effective |
|
|
income (effective |
|
(effective |
|
|
recognized in income |
|
(ineffective |
|
|
|
portion) |
|
|
portion) |
|
portion) |
|
|
(ineffective portion) |
|
portion) |
|
|
Forward sales type
agreements commodity |
|
|
|
|
|
Product sales |
|
|
52 |
|
|
Non-hedge derivatives gain/(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2009 |
|
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
|
|
Cash flow |
|
|
|
|
|
|
|
|
|
hedges, before |
|
|
Cash flow hedges removed from |
|
|
|
|
|
|
taxation |
|
|
equity, before taxation |
|
|
Hedge ineffectiveness, before taxation |
|
|
|
|
|
|
|
|
|
Amount of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(gain)/loss |
|
|
|
|
|
|
|
|
|
|
|
|
Location of |
|
reclassified |
|
|
|
|
|
|
|
|
Gain/(loss) |
|
|
(gain)/loss |
|
from |
|
|
|
|
|
|
|
|
recognized in |
|
|
reclassified from |
|
accumulated |
|
|
|
|
|
|
|
|
accumulated |
|
|
accumulated |
|
other |
|
|
|
|
Amount of |
|
|
|
other |
|
|
other |
|
comprehensive |
|
|
|
|
(gain)/loss |
|
|
|
comprehensive |
|
|
comprehensive |
|
income into |
|
|
|
|
recognized in |
|
|
|
income |
|
|
income into |
|
income |
|
|
Location of (gain)/loss |
|
income |
|
|
|
(effective |
|
|
income (effective |
|
(effective |
|
|
recognized in income |
|
(ineffective |
|
|
|
portion) |
|
|
portion) |
|
portion) |
|
|
(ineffective portion) |
|
portion) |
|
|
Forward sales type
agreements commodity |
|
|
16 |
|
|
Product sales |
|
|
92 |
|
|
Non-hedge derivatives gain/(loss) |
|
|
5 |
|
Foreign exchange contracts |
|
|
2 |
|
|
Product sales |
|
|
|
|
|
Non-hedge derivatives gain/(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18 |
|
|
|
|
|
92 |
|
|
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note N. Derivative instruments (continued)
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in fair |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
value and other |
|
|
|
|
|
|
|
|
|
|
Accumulated other |
|
|
movements |
|
|
|
|
|
|
Accumulated other |
|
|
comprehensive income |
|
|
recognised in |
|
|
Reclassification |
|
|
comprehensive income |
|
|
as of January 1, 2010 |
|
|
2010 |
|
|
adjustments |
|
|
as of June 30, 2010 |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
Derivatives designated as |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold sales |
|
|
(52 |
) |
|
|
|
|
|
|
52 |
|
|
|
|
|
Capital expenditure |
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
(3 |
) |
|
|
|
Before tax totals |
|
|
(55 |
) |
|
|
|
|
|
|
52 |
|
|
|
(3 |
)(1) |
|
|
|
After tax totals |
|
|
(22 |
) |
|
|
|
|
|
|
20 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in fair |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
value and other |
|
|
|
|
|
|
|
|
|
|
Accumulated other |
|
|
movements |
|
|
|
|
|
|
Accumulated other |
|
|
comprehensive income |
|
|
recognised in |
|
|
Reclassification |
|
|
comprehensive income |
|
|
as of January 1, 2009 |
|
|
2009 |
|
|
adjustments |
|
|
as of June 30, 2009 |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
Derivatives designated as |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold sales |
|
|
(178 |
) |
|
|
18 |
|
|
|
97 |
|
|
|
(63 |
) |
Capital expenditure |
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
Before tax totals |
|
|
(180 |
) |
|
|
18 |
|
|
|
97 |
|
|
|
(65 |
)(1) |
|
|
|
After tax totals |
|
|
(112 |
) |
|
|
12 |
|
|
|
70 |
|
|
|
(30 |
) |
|
|
|
|
|
|
(1) |
|
Includes adjustment for cumulative net translation differences of $nil million (2009: $25 million) resulting from the revaluation and settlement of
non US dollar denominated cash flow hedge contracts. |
29
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note O. Commitments and contingencies
Capital expenditure commitments
Capital commitments and contingent liabilities of the Company
include total contracted capital expenditure of $237 million and
total authorized capital expenditure not yet contracted of
approximately $1,444 million as of June 30, 2010. The Company
intends to finance these capital expenditures from cash on hand,
cash flow from operations, the proceeds from the sale of the Tau
Lekoa mine, existing and new replacement credit facilities and
long-term debt financing and, potentially if deemed appropriate,
the issuance of equity and equity linked instruments.
Ground water pollution
The Company has identified groundwater contamination plumes at
certain of its operations, which have occurred primarily as a
result of seepage from mine residue stockpiles. Numerous
scientific, technical and legal studies have been undertaken to
assist in determining the magnitude of the contamination and to
find sustainable remediation solutions. The Company has
instituted processes to reduce future potential seepage and it has
been demonstrated that Monitored Natural Attenuation (MNA) by the
existing environment will contribute to improvement in some
instances. Furthermore, literature reviews, field trials and base
line modeling techniques suggest, but are not yet proven, that the
use of phyto-technologies can address the soil and groundwater
contamination. Subject to the completion of trials and the
technology being a proven remediation technique, no reliable
estimate can be made for the obligation.
Deep ground water pollution South Africa
The Company has identified a flooding and future pollution risk
posed by deep groundwater in the Klerksdorp and Far West Rand gold
fields. Various studies have been undertaken by AngloGold Ashanti
since 1999. Due to the interconnected nature of mining operations,
any proposed solution needs to be a combined one supported by all
the mines located in these gold fields. As a result, the
Department of Mineral Resources and affected mining companies are
involved in the development of a Regional Mine Closure Strategy.
In view of the limitation of current information for the accurate
estimation of a liability, no reliable estimate can be made for
the obligation.
Sales tax on gold deliveries Brazil
Mineração Serra Grande S.A. (MSG), received two tax assessments
from the State of Goiás related to payments of sales taxes on gold
deliveries for export. AngloGold Ashanti Brazil Mineração Ltda.
manages the operation and its attributable share of the first
assessment is approximately $49 million. In November 2006, the
administrative councils second chamber ruled in favor of MSG and
fully cancelled the tax liability related to the first period.
The State of Goiás has appealed to the full board of the State of
Goiás tax administrative council. The second assessment was
issued by the State of Goiás in October 2006 on the same grounds
as the first assessment, and the Companys attributable share of
the assessment is approximately $30 million. The Company believes
both assessments are in violation of federal legislation on sales
taxes.
Other tax disputes Brazil
MSG received a tax assessment in October 2003 from the State of
Minas Gerais related to sales taxes on gold. The tax
administrators rejected the Companys appeal against the
assessment. The Company is now appealing the dismissal of the
case. The Companys attributable share of the assessment is
approximately $9 million. Subsidiaries of the Company in Brazil
are involved in various disputes with tax authorities. These
disputes involve federal tax assessments including income tax,
royalties, social contributions and annual property tax. The
amount involved is approximately $21 million.
30
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note O. Commitments and contingencies (continued)
Indirect taxes Ghana
AngloGold Ashanti (Ghana) Limited received a tax assessment for $10
million during September 2009 following an audit by the tax
authorities related to indirect taxes on various items. Management
is of the opinion that the indirect taxes are not payable and the
Company has lodged an objection.
Royalty Boddington Gold Mine
As a result of the sale of the interest in the Boddington Gold Mine
during 2009, the Company is entitled to receive a royalty on any gold
recovered or produced by the Boddington Gold Mine, where the gold
price is in excess of Boddington Gold Mines cash costs plus $600 per
ounce. The royalty is payable in each quarter from and after the
second quarter in 2010, within forty five days of reporting period
close and is capped at a total amount of $100 million. During August
2010, the Company received $2 million in royalties.
Insurance claim Savuka Gold Mine
On May 22, 2009, an insurable event occurred at Savuka Gold Mine.
The amounts due from the insurers are subject to a formula based on
lost production, average gold price and average exchange rates
subject to various excesses and the production and the preparation of
supportable data. The insurable amount is not yet determinable, but
management expects the amount to exceed $40 million, of which $23
million has been received during the latter part of 2009 and in 2010
(1).
Oro Group surety
The Company has provided surety in favor of the lender in respect of
gold loan facilities to wholly-owned subsidiaries of Oro Group
(Proprietary) Limited, an affiliate of the Company. The Company has a
total maximum liability, in terms of the suretyships, of R100 million
($13 million). The probability of the non-performance under the
suretyships is considered minimal.
AngloGold Ashanti USA reclamation bonds
Pursuant to US environmental and mining requirements, gold mining
companies are obligated to close their operations and rehabilitate
the lands that they mine in accordance with these requirements.
AngloGold Ashanti USA has posted reclamation bonds with various
federal and state governmental agencies to cover potential
rehabilitation obligations in amounts aggregating approximately $84
million. The Company has provided a guarantee for these obligations
which would be payable in the event of AngloGold Ashanti USA not
being able to meet its rehabilitation obligations. As at June 30,
2010, the carrying value of these obligations amounted to $32 million
and is included in the Provision for environmental rehabilitation in
the Companys consolidated balance sheet. The obligations will expire
upon completion of such rehabilitation and release of such areas by
the applicable federal and/or state agency. AngloGold Ashanti is not
indemnified by third parties for any of the amounts that may be paid
by AngloGold Ashanti under its guarantee.
(1) |
|
Amounts received during 2010 include $1 million
for business interruption (included in Loss/profit on sale of assets,
realization of loans, indirect taxes and other) and $11 million as
reimbursement of costs (included in Production costs). |
31
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note O. Commitments and contingencies (continued)
AngloGold Ashanti environmental guarantees
Pursuant to South African mining laws, mining companies are obligated
to close their operations and rehabilitate the lands that they mine
in accordance with these laws. Provision for environmental
rehabilitation in the Companys consolidated balance sheet as at June
30, 2010 includes an amount of $117 million for future costs,
excluding premature closure costs. In order to cover against
premature closure costs, the Company has secured bank guarantees to
cover potential rehabilitation obligations of certain mines in South
Africa. The Company has provided a guarantee for these obligations
which would be payable in the event of the South African mines not
being able to meet such rehabilitation obligations. As at June 30,
2010, the value of these obligations amounted to $130 million. The
obligations will expire upon compliance with all provisions of the
environment management program in terms of South African mining laws.
AngloGold Ashanti is not indemnified by third parties for any of the
amounts that may be paid by AngloGold Ashanti under its guarantee.
32
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note O. Commitments and contingencies (continued)
Guarantee provided for revolving credit facility
AngloGold Ashanti Limited, AngloGold Ashanti Holdings plc
and AngloGold Ashanti USA Incorporated, as guarantors, have
each guaranteed all payments and other obligations of the
borrowers and the other guarantors under the $1.0 billion
four year revolving credit facility. The total amount
outstanding under this facility as at June 30, 2010
amounted to $nil million.
Guarantee provided for rated bonds
AngloGold Ashanti Limited has fully and unconditionally
guaranteed all payments and other obligations of AngloGold
Ashanti Holdings plc regarding the issued $700 million
5.375 percent rated bonds due 2020 and the issued $300
million 6.5 percent rated bonds due 2040.
Guarantee provided for convertible bonds
AngloGold Ashanti Limited has fully and unconditionally
guaranteed all payments and other obligations of AngloGold
Ashanti Holdings Finance plc regarding the issued $732.5
million 3.5 percent convertible bonds due 2014.
Hedging guarantees
The Company has issued gold delivery guarantees of $418
million to several counterpart banks pursuant to which it
guarantees the due performance of its subsidiaries
AngloGold (USA) Trading Company, AngloGold South America
Limited and Cerro Vanguardia S.A. under their respective
gold hedging agreements.
Ashanti Treasury Services Limited (ATS) hedging guarantees
The Company together with its wholly-owned subsidiary
AngloGold Ashanti Holdings plc has provided guarantees to
several counterpart banks for the hedging commitments of
its wholly-owned subsidiary ATS. The maximum potential
amount of future payments is all moneys due, owing or
incurred by ATS under or pursuant to the hedging
agreements. At June 30, 2010 the marked-to-market valuation
of the ATS hedge book was negative $568 million.
Geita Management Company Limited (GMC) hedging guarantees
The Company and its wholly-owned subsidiary AngloGold
Ashanti Holdings plc have issued hedging guarantees to
several counterpart banks in which they have guaranteed the
due performance by GMC of its obligations under or pursuant
to the hedging agreements entered into by GMC, and to the
payment of all money owing or incurred by GMC as and when
due. The maximum potential amount of future payments is
all moneys due, owing or incurred by GMC under or pursuant
to the hedging agreements. At June 30, 2010 the
marked-to-market valuation of the GMC hedge book was
negative $460 million.
The Company assesses the credit quality of counterparts at
least on a quarterly basis. As at June 30, 2010, the
probability of non-performance is considered minimal.
Vulnerability from concentrations
There is a concentration of risk in respect of recoverable
value added tax and fuel duties from the Tanzanian
government. Recoverable value added tax due from the
Tanzanian government to the Company amounts to $47 million
at June 30, 2010 (March 31, 2010: $42 million). The
amounts outstanding have been discounted to their present
value at a rate of 7.82 percent.
Recoverable fuel duties from the Tanzanian government to
the Company amounts to $49 million at June 30, 2010 (March
31, 2010: $49 million). Fuel duty claims are required to be
submitted after consumption of the related fuel and are
subject to authorization by the Customs and Excise
authorities. The outstanding amounts have been discounted
to their present value at a rate of 7.82 percent.
33
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note P. Recent developments
Announcements made after June 30, 2010:
On February 17, 2009, AngloGold Ashanti announced the terms of
the sale of its Tau Lekoa mine together with the adjacent
properties of Weltevreden, Jonkerskraal and Goedgenoeg (Tau
Lekoa) to Simmer & Jack Mines Limited (Simmers). The sale was
concluded effective August 1, 2010, following the transfer of the
mineral rights of Tau Lekoa to Buffelsfontein Gold Mines Limited,
a wholly-owned subsidiary of Simmers, on July 20, 2010. Tau Lekoa
is classified as held for sale in the balance sheets as at June
30, 2010 and December 31, 2009. The selling price of R600 million
is payable in two tranches, R450 million was paid in cash on
August 4, 2010 with the remaining R150 million payable either in
cash or Simmers shares and is subject to offset adjustments in
respect of the free cash flow generated by Tau Lekoa during the
period January 1, 2009 to July 31, 2010, up to a maximum of R150
million and any offset for royalty payable during the period
January 1, 2010 to June 30, 2010. This balancing amount will be
determined based upon a final audit of the July 2010 production
figures.
Note Q. Declaration of dividends
On February 16, 2010, AngloGold Ashanti declared a final dividend of
70 South African cents (9.496 US cents) per ordinary share for the
year ended December 31, 2009 with a record date of March 12, 2010 and
payment dates of March 19, 2010 (for holders of ordinary shares and
CDIs), March 22, 2010 (for holders of GhDSs) and March 29, 2010 (for
holders of ADSs). Also on February 16, 2010, AngloGold Ashanti
declared a dividend of 35 South African cents (4.748 US cents) per E
ordinary share, paid on March 19, 2010 to employees participating in
the Bokamoso ESOP and Izingwe Holdings (Proprietary) Limited.
On August 10, 2010, AngloGold Ashanti declared an interim dividend of
65 South African cents (approximately 9 US cents) per ordinary share
for the six months ended June 30, 2010 with a record date of
September 3, 2010 and payment dates of September 10, 2010 (for
holders of ordinary shares and CDIs), approximately September 13,
2010 (for holders of GhDSs) and approximately September 20, 2010 (for
holders of ADSs). In addition, on August 10, 2010, AngloGold Ashanti
declared a dividend of 32.5 South African cents (approximately 4 US
cents) per E ordinary share, payable on September 10, 2010 to
employees participating in the Bokamoso ESOP and Izingwe Holdings
(Proprietary) Limited.
In addition to the cash dividend, an amount equal to the dividend
paid to holders of E ordinary shares will be offset when calculating
the strike price of E ordinary shares.
Each CDI represents one-fifth of an ordinary share and 100 GhDSs
represents one ordinary share. Each ADS represents one ordinary
share.
34
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note R. Fair value measurements
The FASB ASC guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs
and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that
may be used to measure fair value:
Level 1 Quoted prices in active markets for identical assets or liabilities.
Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices
in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities.
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value
of the assets or liabilities.
The Company utilizes the market approach to measure fair value. The market approach uses prices and other relevant
information generated by market transactions involving identical or comparable assets or liabilities.
The following table sets out the Companys financial assets and (liabilities) measured at fair value by level within the
hierarchy as at June 30, 2010 (in US Dollars, millions):
Items measured at fair value on a recurring basis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
Cash and cash equivalents |
|
|
866 |
|
|
|
|
|
|
|
|
|
|
|
866 |
|
Marketable equity securities |
|
|
124 |
|
|
|
|
|
|
|
|
|
|
|
124 |
|
Derivatives, net |
|
|
|
|
|
|
(2,425 |
) |
|
|
|
|
|
|
(2,425 |
) |
Embedded derivative |
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
(1 |
) |
Warrants on shares |
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
2 |
|
Option component of convertible bonds |
|
|
|
|
|
|
(111 |
) |
|
|
|
|
|
|
(111 |
) |
The Companys cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using
quoted market prices. The cash instruments that are valued based on quoted market prices in active markets are primarily
money market securities. Due to the short maturity of cash, carrying amounts approximate fair values.
The Companys marketable equity securities are included in Other long-term assets in the Companys consolidated balance
sheet. They consist of investments in ordinary shares and are valued using quoted market prices in active markets and as
such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities is
calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the
Company.
The Companys derivative instruments are valued using pricing models and the Company generally uses similar models to value
similar instruments. Options associated with marketable equity securities and the conversion features of convertible bonds
are included as derivatives on the balance sheet. Valuation models require a variety of inputs, including contractual
terms, market prices, yield curves, credit spreads, measures of volatility and correlations of such inputs. The Companys
derivatives trade in liquid markets, and as such, model inputs are observable. Such instruments are typically classified
within Level 2 of the fair value hierarchy.
35
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2010
Prepared in accordance with US GAAP
Note R. Fair value measurements (continued)
Items measured at fair value on a non-recurring basis
During the six months ended June 30, 2010, the Company fully impaired
the tailings storage facility at Iduapriem and wrote-off certain
vehicles and heavy mining equipment at Geita, resulting in a loss of
$11 million which is included in earnings for the period.
Long-lived assets held for sale (Tau Lekoa) with a carrying amount of
$69 million were written down to fair value less costs to sell of $61
million. This resulted in a loss of $8 million which is included in
earnings for the six months ended June 30, 2010. Fair values of these
assets were based on sales agreements with third parties and as such
are classified within Level 2 of the fair value hierarchy. These are
summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value/fair |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
value less costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to sell (on held |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
for sale) |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
gain/(loss) |
|
Description |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Long-lived assets abandoned |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11 |
) |
Long-lived assets held for sale |
|
|
61 |
|
|
|
|
|
|
|
61 |
|
|
|
|
|
|
|
(8 |
) |
|
|
|
|
|
|
61 |
|
|
|
|
|
|
|
61 |
|
|
|
|
|
|
|
(19 |
) |
|
|
|
Note S. Supplemental condensed consolidating financial information
AngloGold Ashanti Holdings plc (IOMco), a wholly-owned subsidiary
of AngloGold Ashanti, has issued debt securities which are fully and
unconditionally guaranteed by AngloGold Ashanti Limited (being the
Guarantor). Refer to Notes E Debt and O Commitments and
Contingencies. IOMco is an Isle of Man registered company that
holds certain of AngloGold Ashantis operations and assets located
outside South Africa (excluding certain operations and assets in the
Americas, Australasia and Continental Africa). The following is
condensed consolidating financial information for the Company as of
June 30, 2010 and December 31, 2009 and for the six months ended June
30, 2010 and 2009, with a separate column for each of AngloGold
Ashanti Limited as Guarantor, IOMco as Issuer and the other
subsidiaries of the Company combined (the Non-Guarantor
Subsidiaries). For the purposes of the condensed consolidating
financial information, the Company carries its investments under the
equity method. The following supplemental condensed consolidating
financial information should be read in conjunction with the
Companys condensed consolidated financial statements.
36
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE
30, 2010
Prepared in accordance with US GAAP
Note S. Supplemental condensed consolidating financial information (continued)
Condensed consolidating statements of income
FOR THE SIX MONTHS ENDED JUNE 30, 2010
(unaudited)
(In US dollars, millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
AngloGold Ashanti |
|
|
IOMco |
|
|
(the Non-Guarantor |
|
|
Consolidation |
|
|
|
|
|
|
|
|
(the Guarantor) |
|
|
(the Issuer) |
|
|
Subsidiaries) |
|
|
adjustments |
|
|
Total |
|
|
|
|
|
|
|
Sales and other income |
|
|
|
970 |
|
|
|
(3 |
) |
|
|
1,490 |
|
|
|
(51 |
) |
|
|
2,406 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
|
|
919 |
|
|
|
|
|
|
|
1,451 |
|
|
|
|
|
|
|
2,370 |
|
|
Interest, dividends and other |
|
|
|
51 |
|
|
|
(3 |
) |
|
|
39 |
|
|
|
(51 |
) |
|
|
36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
934 |
|
|
|
65 |
|
|
|
1,339 |
|
|
|
(26 |
) |
|
|
2,312 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs |
|
|
|
479 |
|
|
|
|
|
|
|
717 |
|
|
|
|
|
|
|
1,196 |
|
|
Exploration costs |
|
|
|
3 |
|
|
|
5 |
|
|
|
86 |
|
|
|
|
|
|
|
94 |
|
|
Related party transactions |
|
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8 |
) |
|
General and administrative expenses/(recoveries) |
|
|
|
77 |
|
|
|
3 |
|
|
|
22 |
|
|
|
(2 |
) |
|
|
100 |
|
|
Royalties paid |
|
|
|
8 |
|
|
|
|
|
|
|
50 |
|
|
|
|
|
|
|
58 |
|
|
Market development costs |
|
|
|
3 |
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
5 |
|
|
Depreciation, depletion and amortization |
|
|
|
166 |
|
|
|
|
|
|
|
170 |
|
|
|
|
|
|
|
336 |
|
|
Impairment of assets |
|
|
|
8 |
|
|
|
|
|
|
|
11 |
|
|
|
|
|
|
|
19 |
|
|
Interest expense |
|
|
|
2 |
|
|
|
33 |
|
|
|
32 |
|
|
|
|
|
|
|
67 |
|
|
Accretion expense |
|
|
|
5 |
|
|
|
|
|
|
|
5 |
|
|
|
|
|
|
|
10 |
|
|
Employment severance costs |
|
|
|
9 |
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
10 |
|
|
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other |
|
|
|
8 |
|
|
|
24 |
|
|
|
8 |
|
|
|
(24 |
) |
|
|
16 |
|
|
Non-hedge derivative loss |
|
|
|
174 |
|
|
|
|
|
|
|
235 |
|
|
|
|
|
|
|
409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) before income tax provision |
|
|
|
36 |
|
|
|
(68 |
) |
|
|
151 |
|
|
|
(25 |
) |
|
|
94 |
|
|
Taxation benefit/(expense) |
|
|
|
9 |
|
|
|
|
|
|
|
(115 |
) |
|
|
|
|
|
|
(106 |
) |
|
Equity income in affiliates |
|
|
|
39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 |
|
|
Equity (loss)/income in subsidiaries |
|
|
|
(54 |
) |
|
|
(57 |
) |
|
|
|
|
|
|
111 |
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from continuing operations |
|
|
|
30 |
|
|
|
(125 |
) |
|
|
36 |
|
|
|
86 |
|
|
|
27 |
|
|
Preferred stock dividends |
|
|
|
(26 |
) |
|
|
|
|
|
|
(26 |
) |
|
|
52 |
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) |
|
|
|
4 |
|
|
|
(125 |
) |
|
|
10 |
|
|
|
138 |
|
|
|
27 |
|
|
Less: Net income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
(23 |
) |
|
|
|
|
|
|
(23 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) attributable to AngloGold Ashanti |
|
|
|
4 |
|
|
|
(125 |
) |
|
|
(13 |
) |
|
|
138 |
|
|
|
4 |
|
|
|
|
|
|
|
37
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE
30, 2010
Prepared in accordance with US GAAP
Note S. Supplemental condensed consolidating financial information (continued)
Condensed consolidating statements of income
FOR THE SIX MONTHS ENDED JUNE 30, 2009
(unaudited)
(In US dollars, millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
AngloGold Ashanti |
|
|
IOMco |
|
|
(the Non-Guarantor |
|
|
Consolidation |
|
|
|
|
|
|
|
|
(the Guarantor) |
|
|
(the Issuer) |
|
|
Subsidiaries) |
|
|
adjustments |
|
|
Total |
|
|
|
|
|
|
|
Sales and other income |
|
|
|
721 |
|
|
|
(66 |
) |
|
|
856 |
|
|
|
(10 |
) |
|
|
1,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
|
|
684 |
|
|
|
|
|
|
|
757 |
|
|
|
|
|
|
|
1,441 |
|
|
Interest, dividends and other |
|
|
|
37 |
|
|
|
(66 |
) |
|
|
99 |
|
|
|
(10 |
) |
|
|
60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
402 |
|
|
|
(290 |
) |
|
|
836 |
|
|
|
200 |
|
|
|
1,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs |
|
|
|
349 |
|
|
|
|
|
|
|
606 |
|
|
|
|
|
|
|
955 |
|
|
Exploration costs |
|
|
|
2 |
|
|
|
1 |
|
|
|
48 |
|
|
|
|
|
|
|
51 |
|
|
Related party transactions |
|
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7 |
) |
|
General and administrative expenses/(recoveries) |
|
|
|
32 |
|
|
|
(88 |
) |
|
|
167 |
|
|
|
(38 |
) |
|
|
73 |
|
|
Royalties paid |
|
|
|
|
|
|
|
|
|
|
|
36 |
|
|
|
|
|
|
|
36 |
|
|
Market development costs |
|
|
|
3 |
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
6 |
|
|
Depreciation, depletion and amortization |
|
|
|
124 |
|
|
|
|
|
|
|
161 |
|
|
|
|
|
|
|
285 |
|
|
Interest expense |
|
|
|
1 |
|
|
|
38 |
|
|
|
18 |
|
|
|
|
|
|
|
57 |
|
|
Accretion expense |
|
|
|
3 |
|
|
|
|
|
|
|
5 |
|
|
|
|
|
|
|
8 |
|
|
Employment severance costs |
|
|
|
4 |
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
6 |
|
|
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other |
|
|
|
7 |
|
|
|
(241 |
) |
|
|
(87 |
) |
|
|
238 |
|
|
|
(83 |
) |
|
Non-hedge derivative gain |
|
|
|
(116 |
) |
|
|
|
|
|
|
(123 |
) |
|
|
|
|
|
|
(239 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) before income tax provision |
|
|
|
319 |
|
|
|
224 |
|
|
|
20 |
|
|
|
(210 |
) |
|
|
353 |
|
|
Taxation expense |
|
|
|
(79 |
) |
|
|
(1 |
) |
|
|
(74 |
) |
|
|
|
|
|
|
(154 |
) |
|
Equity income in affiliates |
|
|
|
44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44 |
|
|
Equity (loss)/income in subsidiaries |
|
|
|
(27 |
) |
|
|
(89 |
) |
|
|
|
|
|
|
116 |
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from continuing operations |
|
|
|
257 |
|
|
|
134 |
|
|
|
(54 |
) |
|
|
(94 |
) |
|
|
243 |
|
|
Preferred stock dividends |
|
|
|
(27 |
) |
|
|
|
|
|
|
(27 |
) |
|
|
54 |
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) |
|
|
|
230 |
|
|
|
134 |
|
|
|
(81 |
) |
|
|
(40 |
) |
|
|
243 |
|
|
Less: Net income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
(13 |
) |
|
|
|
|
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) attributable to AngloGold Ashanti |
|
|
|
230 |
|
|
|
134 |
|
|
|
(94 |
) |
|
|
(40 |
) |
|
|
230 |
|
|
|
|
|
|
|
38
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE
30, 2010
Prepared in accordance with US GAAP
Note S. Supplemental condensed consolidating financial information (continued)
Condensed consolidating balance sheets
AT JUNE 30, 2010
(unaudited)
(In US dollars, millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
AngloGold Ashanti |
|
|
IOMco |
|
|
(the Non-Guarantor |
|
|
Consolidation |
|
|
|
|
|
|
|
|
(the Guarantor) |
|
|
(the Issuer) |
|
|
Subsidiaries) |
|
|
adjustments |
|
|
Total |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
1,572 |
|
|
|
2,715 |
|
|
|
3,221 |
|
|
|
(5,037 |
) |
|
|
2,471 |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
146 |
|
|
|
475 |
|
|
|
245 |
|
|
|
|
|
|
|
866 |
|
|
Restricted cash |
|
|
|
1 |
|
|
|
|
|
|
|
13 |
|
|
|
|
|
|
|
14 |
|
|
Receivables, inter-group balances and other current assets |
|
|
|
1,425 |
|
|
|
2,240 |
|
|
|
2,963 |
|
|
|
(5,037 |
) |
|
|
1,591 |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
|
1,892 |
|
|
|
|
|
|
|
3,528 |
|
|
|
|
|
|
|
5,420 |
|
|
Acquired properties, net |
|
|
|
194 |
|
|
|
|
|
|
|
621 |
|
|
|
|
|
|
|
815 |
|
|
Goodwill |
|
|
|
|
|
|
|
|
|
|
|
168 |
|
|
|
(16 |
) |
|
|
152 |
|
|
Other intangibles, net |
|
|
|
|
|
|
|
|
|
|
|
18 |
|
|
|
|
|
|
|
18 |
|
|
Derivatives |
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
2 |
|
|
Other long-term inventory |
|
|
|
|
|
|
|
|
|
|
|
23 |
|
|
|
|
|
|
|
23 |
|
|
Materials on the leach pad |
|
|
|
|
|
|
|
|
|
|
|
307 |
|
|
|
|
|
|
|
307 |
|
|
Other long-term assets and deferred taxation assets |
|
|
|
2,984 |
|
|
|
(159 |
) |
|
|
919 |
|
|
|
(2,683 |
) |
|
|
1,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
6,642 |
|
|
|
2,556 |
|
|
|
8,807 |
|
|
|
(7,736 |
) |
|
|
10,269 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities including inter-group balances |
|
|
|
2,254 |
|
|
|
810 |
|
|
|
6,724 |
|
|
|
(6,593 |
) |
|
|
3,195 |
|
|
Other non-current liabilities |
|
|
|
151 |
|
|
|
|
|
|
|
77 |
|
|
|
(58 |
) |
|
|
170 |
|
|
Long-term debt |
|
|
|
34 |
|
|
|
994 |
|
|
|
640 |
|
|
|
|
|
|
|
1,668 |
|
|
Derivatives |
|
|
|
|
|
|
|
|
|
|
|
112 |
|
|
|
|
|
|
|
112 |
|
|
Deferred taxation liabilities |
|
|
|
663 |
|
|
|
|
|
|
|
473 |
|
|
|
9 |
|
|
|
1,145 |
|
|
Provision for environmental rehabilitation |
|
|
|
117 |
|
|
|
|
|
|
|
276 |
|
|
|
|
|
|
|
393 |
|
|
Other accrued liabilities |
|
|
|
|
|
|
|
|
|
|
|
29 |
|
|
|
|
|
|
|
29 |
|
|
Provision for pension and other post-retirement medical benefits |
|
|
|
133 |
|
|
|
|
|
|
|
11 |
|
|
|
|
|
|
|
144 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
3,290 |
|
|
|
752 |
|
|
|
465 |
|
|
|
(1,094 |
) |
|
|
3,413 |
|
|
|
|
|
|
|
Stock issued |
|
|
|
12 |
|
|
|
4,937 |
|
|
|
902 |
|
|
|
(5,839 |
) |
|
|
12 |
|
|
Additional paid in capital |
|
|
|
7,866 |
|
|
|
363 |
|
|
|
451 |
|
|
|
(814 |
) |
|
|
7,866 |
|
|
Accumulated (deficit)/profit |
|
|
|
(3,945 |
) |
|
|
(4,548 |
) |
|
|
(3,552 |
) |
|
|
8,100 |
|
|
|
(3,945 |
) |
|
Accumulated other comprehensive income and reserves |
|
|
|
(643 |
) |
|
|
|
|
|
|
2,542 |
|
|
|
(2,542 |
) |
|
|
(643 |
) |
|
|
|
|
|
|
Total AngloGold Ashanti stockholders equity |
|
|
|
3,290 |
|
|
|
752 |
|
|
|
343 |
|
|
|
(1,095 |
) |
|
|
3,290 |
|
|
Noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
122 |
|
|
|
1 |
|
|
|
123 |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
|
6,642 |
|
|
|
2,556 |
|
|
|
8,807 |
|
|
|
(7,736 |
) |
|
|
10,269 |
|
|
|
|
|
|
|
39
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE
30, 2010
Prepared in accordance with US GAAP
Note S. Supplemental condensed consolidating financial information (continued)
Condensed consolidating balance sheets
AT DECEMBER 31, 2009
(In US Dollars, millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
AngloGold Ashanti |
|
|
IOMco |
|
|
(the Non-Guarantor |
|
|
Consolidation |
|
|
|
|
|
|
|
|
(the Guarantor) |
|
|
(the Issuer) |
|
|
Subsidiaries) |
|
|
adjustments |
|
|
Total |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
1,650 |
|
|
|
2,558 |
|
|
|
3,332 |
|
|
|
(4,782 |
) |
|
|
2,758 |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
231 |
|
|
|
578 |
|
|
|
291 |
|
|
|
|
|
|
|
1,100 |
|
|
Restricted cash |
|
|
|
1 |
|
|
|
|
|
|
|
11 |
|
|
|
|
|
|
|
12 |
|
|
Receivables, inter-group balances and other current assets |
|
|
|
1,418 |
|
|
|
1,980 |
|
|
|
3,030 |
|
|
|
(4,782 |
) |
|
|
1,646 |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
|
1,932 |
|
|
|
|
|
|
|
3,522 |
|
|
|
|
|
|
|
5,454 |
|
|
Acquired properties, net |
|
|
|
205 |
|
|
|
|
|
|
|
626 |
|
|
|
|
|
|
|
831 |
|
|
Goodwill |
|
|
|
|
|
|
|
|
|
|
|
425 |
|
|
|
(263 |
) |
|
|
162 |
|
|
Other intangibles, net |
|
|
|
|
|
|
|
|
|
|
|
18 |
|
|
|
|
|
|
|
18 |
|
|
Derivatives |
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
|
|
|
|
5 |
|
|
Other long-term inventory |
|
|
|
|
|
|
|
|
|
|
|
26 |
|
|
|
|
|
|
|
26 |
|
|
Materials on the leach pad |
|
|
|
|
|
|
|
|
|
|
|
324 |
|
|
|
|
|
|
|
324 |
|
|
Other long-term assets and deferred taxation assets |
|
|
|
2,689 |
|
|
|
31 |
|
|
|
1,160 |
|
|
|
(2,796 |
) |
|
|
1,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
6,476 |
|
|
|
2,589 |
|
|
|
9,438 |
|
|
|
(7,841 |
) |
|
|
10,662 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities including inter-group balances |
|
|
|
2,058 |
|
|
|
1,824 |
|
|
|
6,686 |
|
|
|
(6,093 |
) |
|
|
4,475 |
|
|
Other non-current liabilities |
|
|
|
149 |
|
|
|
|
|
|
|
84 |
|
|
|
(70 |
) |
|
|
163 |
|
|
Long-term debt |
|
|
|
34 |
|
|
|
|
|
|
|
633 |
|
|
|
|
|
|
|
667 |
|
|
Derivatives |
|
|
|
|
|
|
|
|
|
|
|
176 |
|
|
|
|
|
|
|
176 |
|
|
Deferred taxation liabilities |
|
|
|
668 |
|
|
|
|
|
|
|
492 |
|
|
|
11 |
|
|
|
1,171 |
|
|
Provision for environmental rehabilitation |
|
|
|
115 |
|
|
|
|
|
|
|
270 |
|
|
|
|
|
|
|
385 |
|
|
Other accrued liabilities |
|
|
|
|
|
|
|
|
|
|
|
33 |
|
|
|
|
|
|
|
33 |
|
|
Provision for pension and other post-retirement medical benefits |
|
|
|
135 |
|
|
|
|
|
|
|
12 |
|
|
|
|
|
|
|
147 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
3,317 |
|
|
|
765 |
|
|
|
1,052 |
|
|
|
(1,689 |
) |
|
|
3,445 |
|
|
|
|
|
|
|
Stock issued |
|
|
|
12 |
|
|
|
4,859 |
|
|
|
1,080 |
|
|
|
(5,939 |
) |
|
|
12 |
|
|
Additional paid in capital |
|
|
|
7,836 |
|
|
|
363 |
|
|
|
698 |
|
|
|
(1,061 |
) |
|
|
7,836 |
|
|
Accumulated (deficit)/profit |
|
|
|
(3,914 |
) |
|
|
(4,457 |
) |
|
|
(3,397 |
) |
|
|
7,854 |
|
|
|
(3,914 |
) |
|
Accumulated other comprehensive income and reserves |
|
|
|
(617 |
) |
|
|
|
|
|
|
2,544 |
|
|
|
(2,544 |
) |
|
|
(617 |
) |
|
|
|
|
|
|
Total AngloGold Ashanti stockholders equity |
|
|
|
3,317 |
|
|
|
765 |
|
|
|
925 |
|
|
|
(1,690 |
) |
|
|
3,317 |
|
|
Noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
127 |
|
|
|
1 |
|
|
|
128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
|
6,476 |
|
|
|
2,589 |
|
|
|
9,438 |
|
|
|
(7,841 |
) |
|
|
10,662 |
|
|
|
|
|
|
|
40
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE
30, 2010
Prepared in accordance with US GAAP
Note S. Supplemental condensed consolidating financial information (continued)
Condensed consolidating statements of cash flows
FOR THE SIX MONTHS ENDED JUNE 30, 2010
(unaudited)
(In US Dollars, millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
AngloGold Ashanti |
|
|
IOMco |
|
|
(the Non-Guarantor |
|
|
Consolidation |
|
|
|
|
|
|
|
|
(the Guarantor) |
|
|
(the Issuer) |
|
|
Subsidiaries) |
|
|
adjustments |
|
|
Total |
|
|
|
|
|
|
|
Net cash provided by/(used) in operating activities |
|
|
|
131 |
|
|
|
(359 |
) |
|
|
857 |
|
|
|
(52 |
) |
|
|
577 |
|
|
|
|
|
|
|
Net income/(loss) |
|
|
|
4 |
|
|
|
(125 |
) |
|
|
10 |
|
|
|
138 |
|
|
|
27 |
|
|
Reconciled to net cash provided by/(used) in operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other |
|
|
|
8 |
|
|
|
24 |
|
|
|
7 |
|
|
|
(24 |
) |
|
|
15 |
|
|
Depreciation, depletion and amortization |
|
|
|
166 |
|
|
|
|
|
|
|
170 |
|
|
|
|
|
|
|
336 |
|
|
Impairment of assets |
|
|
|
8 |
|
|
|
|
|
|
|
11 |
|
|
|
|
|
|
|
19 |
|
|
Deferred taxation |
|
|
|
(37 |
) |
|
|
|
|
|
|
16 |
|
|
|
|
|
|
|
(21 |
) |
|
Other non cash items |
|
|
|
59 |
|
|
|
27 |
|
|
|
403 |
|
|
|
(166 |
) |
|
|
323 |
|
|
Net increase in provision for environmental rehabilitation, pension and other
post-retirement medical benefits |
|
|
|
3 |
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
13 |
|
|
Effect of changes in operating working capital items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net movement inter-group receivables and payables |
|
|
|
(30 |
) |
|
|
(289 |
) |
|
|
319 |
|
|
|
|
|
|
|
|
|
|
Receivables |
|
|
|
(1 |
) |
|
|
3 |
|
|
|
(66 |
) |
|
|
|
|
|
|
(64 |
) |
|
Inventories |
|
|
|
(27 |
) |
|
|
|
|
|
|
(42 |
) |
|
|
|
|
|
|
(69 |
) |
|
Accounts payable and other current liabilities |
|
|
|
(22 |
) |
|
|
1 |
|
|
|
19 |
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
Net cash used in investing activities |
|
|
|
(140 |
) |
|
|
(17 |
) |
|
|
(162 |
) |
|
|
|
|
|
|
(319 |
) |
|
|
|
|
|
|
Increase in non-current investments |
|
|
|
(3 |
) |
|
|
(17 |
) |
|
|
(39 |
) |
|
|
|
|
|
|
(59 |
) |
|
Additions to property, plant and equipment |
|
|
|
(180 |
) |
|
|
|
|
|
|
(201 |
) |
|
|
|
|
|
|
(381 |
) |
|
Proceeds on sale of mining assets |
|
|
|
1 |
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
3 |
|
|
Proceeds on sale of investments |
|
|
|
|
|
|
|
|
|
|
|
24 |
|
|
|
|
|
|
|
24 |
|
|
Proceeds on sale of affiliate |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
Cash inflows from derivatives purchased |
|
|
|
41 |
|
|
|
|
|
|
|
53 |
|
|
|
|
|
|
|
94 |
|
|
Loans receivable advanced |
|
|
|
|
|
|
|
|
|
|
|
(5 |
) |
|
|
|
|
|
|
(5 |
) |
|
Change in restricted cash |
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
Net cash (used)/generated by financing activities |
|
|
|
(71 |
) |
|
|
273 |
|
|
|
(735 |
) |
|
|
52 |
|
|
|
(481 |
) |
|
|
|
|
|
|
Net repayments of debt |
|
|
|
|
|
|
|
(1,000 |
) |
|
|
(315 |
) |
|
|
|
|
|
|
(1,315 |
) |
|
Issuance of stock |
|
|
|
4 |
|
|
|
78 |
|
|
|
(78 |
) |
|
|
|
|
|
|
4 |
|
|
Net proceeds from debt |
|
|
|
|
|
|
|
994 |
|
|
|
35 |
|
|
|
|
|
|
|
1,029 |
|
|
Debt issue costs |
|
|
|
|
|
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
(7 |
) |
|
Cash outflows from derivatives with financing |
|
|
|
(14 |
) |
|
|
|
|
|
|
(119 |
) |
|
|
|
|
|
|
(133 |
) |
|
Dividends (paid)/received |
|
|
|
(61 |
) |
|
|
208 |
|
|
|
(258 |
) |
|
|
52 |
|
|
|
(59 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
|
|
(80 |
) |
|
|
(103 |
) |
|
|
(40 |
) |
|
|
|
|
|
|
(223 |
) |
|
Effect of exchange rate changes on cash |
|
|
|
(5 |
) |
|
|
|
|
|
|
(6 |
) |
|
|
|
|
|
|
(11 |
) |
|
Cash and cash equivalents January 1, |
|
|
|
231 |
|
|
|
578 |
|
|
|
291 |
|
|
|
|
|
|
|
1,100 |
|
|
|
|
|
|
|
Cash and cash equivalents June 30, |
|
|
|
146 |
|
|
|
475 |
|
|
|
245 |
|
|
|
|
|
|
|
866 |
|
|
|
|
|
|
|
41
ANGLOGOLD ASHANTI LIMITED
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE
30, 2010
Prepared in accordance with US GAAP
Note S. Supplemental condensed consolidating financial information (continued)
Condensed consolidating statements of cash flows
FOR THE SIX MONTHS ENDED JUNE 30, 2009
(unaudited)
(In US Dollars, millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
AngloGold Ashanti |
|
|
IOMco |
|
|
(the Non-Guarantor |
|
|
Consolidation |
|
|
|
|
|
|
|
|
(the Guarantor) |
|
|
(the Issuer) |
|
|
Subsidiaries) |
|
|
adjustments |
|
|
Total |
|
|
|
|
|
|
|
Net cash provided by/(used) in operating activities |
|
|
|
280 |
|
|
|
458 |
|
|
|
(357 |
) |
|
|
(54 |
) |
|
|
327 |
|
|
|
|
|
|
|
Net income/(loss) |
|
|
|
230 |
|
|
|
134 |
|
|
|
(81 |
) |
|
|
(40 |
) |
|
|
243 |
|
|
Reconciled to net cash provided by/(used) in operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss/(profit) on sale of assets, realization of loans, indirect taxes and other |
|
|
|
7 |
|
|
|
(241 |
) |
|
|
(87 |
) |
|
|
238 |
|
|
|
(83 |
) |
|
Depreciation, depletion and amortization |
|
|
|
124 |
|
|
|
|
|
|
|
161 |
|
|
|
|
|
|
|
285 |
|
|
Deferred taxation |
|
|
|
47 |
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
57 |
|
|
Other non cash items |
|
|
|
84 |
|
|
|
(836 |
) |
|
|
968 |
|
|
|
(252 |
) |
|
|
(36 |
) |
|
Net (decrease)/increase in provision for environmental rehabilitation, pension
and other post-retirement medical benefits |
|
|
|
(2 |
) |
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
8 |
|
|
Effect of changes in operating working capital items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net movement inter-group receivables and payables |
|
|
|
(218 |
) |
|
|
1,407 |
|
|
|
(1,189 |
) |
|
|
|
|
|
|
|
|
|
Receivables |
|
|
|
10 |
|
|
|
1 |
|
|
|
(85 |
) |
|
|
|
|
|
|
(74 |
) |
|
Inventories |
|
|
|
(32 |
) |
|
|
|
|
|
|
(85 |
) |
|
|
|
|
|
|
(117 |
) |
|
Accounts payable and other current liabilities |
|
|
|
30 |
|
|
|
(7 |
) |
|
|
21 |
|
|
|
|
|
|
|
44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used) in/generated by investing activities |
|
|
|
(188 |
) |
|
|
|
|
|
|
480 |
|
|
|
|
|
|
|
292 |
|
|
|
|
|
|
|
Increase in non-current investments |
|
|
|
(1 |
) |
|
|
|
|
|
|
(21 |
) |
|
|
|
|
|
|
(22 |
) |
|
Additions to property, plant and equipment |
|
|
|
(156 |
) |
|
|
|
|
|
|
(343 |
) |
|
|
|
|
|
|
(499 |
) |
|
Proceeds on sale of mining assets |
|
|
|
|
|
|
|
|
|
|
|
895 |
|
|
|
|
|
|
|
895 |
|
|
Proceeds on sale of investments |
|
|
|
|
|
|
|
|
|
|
|
25 |
|
|
|
|
|
|
|
25 |
|
|
Cash outflows from derivatives purchased |
|
|
|
(31 |
) |
|
|
|
|
|
|
(67 |
) |
|
|
|
|
|
|
(98 |
) |
|
Change in restricted cash |
|
|
|
|
|
|
|
|
|
|
|
(9 |
) |
|
|
|
|
|
|
(9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used)/generated by financing activities |
|
|
|
(15 |
) |
|
|
336 |
|
|
|
664 |
|
|
|
54 |
|
|
|
1,039 |
|
|
|
|
|
|
|
Net repayments of debt |
|
|
|
|
|
|
|
(1,090 |
) |
|
|
(45 |
) |
|
|
|
|
|
|
(1,135 |
) |
|
Issuance of stock |
|
|
|
14 |
|
|
|
349 |
|
|
|
(349 |
) |
|
|
|
|
|
|
14 |
|
|
Share issue expenses |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
|
Net proceeds from debt |
|
|
|
|
|
|
|
1,000 |
|
|
|
961 |
|
|
|
|
|
|
|
1,961 |
|
|
Debt issue costs |
|
|
|
|
|
|
|
|
|
|
|
(11 |
) |
|
|
|
|
|
|
(11 |
) |
|
Cash inflows from derivatives with financing |
|
|
|
34 |
|
|
|
|
|
|
|
195 |
|
|
|
|
|
|
|
229 |
|
|
Dividends (paid)/received |
|
|
|
(62 |
) |
|
|
77 |
|
|
|
(87 |
) |
|
|
54 |
|
|
|
(18 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
|
|
77 |
|
|
|
794 |
|
|
|
787 |
|
|
|
|
|
|
|
1,658 |
|
|
Effect of exchange rate changes on cash |
|
|
|
50 |
|
|
|
|
|
|
|
22 |
|
|
|
|
|
|
|
72 |
|
|
Cash and cash equivalents January 1, |
|
|
|
154 |
|
|
|
229 |
|
|
|
192 |
|
|
|
|
|
|
|
575 |
|
|
|
|
|
|
|
Cash and cash equivalents June 30, |
|
|
|
281 |
|
|
|
1,023 |
|
|
|
1,001 |
|
|
|
|
|
|
|
2,305 |
|
|
|
|
|
|
|
42
REVIEW OF FINANCIAL AND OPERATING PERFORMANCE FOR THE SIX MONTHS ENDED JUNE 30, 2010 PREPARED
IN ACCORDANCE WITH US GAAP
In the following discussion references to rands, ZAR and R are to the lawful currency of
the Republic of South Africa, references to US dollars, dollar or $ are to the lawful currency of
the United States, references to euro or are to the lawful currency of the European Union,
references to AUD dollars and A$ are to the lawful currency of Australia, references to BRL is to
the lawful currency of Brazil, reference to C$ is to the lawful currency of Canada and references
to GHC or cedi are to the lawful currency of Ghana.
Introduction
AngloGold Ashantis operating results are directly related to the price of gold which can
fluctuate widely and which is affected by numerous factors beyond its control, including
investment, industrial and jewellery demand, expectations with respect to the rate of inflation,
the strength of the US dollar (the currency in which the price of gold is generally quoted) and
of other currencies, interest rates, actual or expected gold sales by central banks and the
International Monetary Fund (IMF), forward sales by producers, global or regional political or
economic events, and production and cost levels in major gold-producing regions. In addition, the
price of gold sometimes is subject to rapid short-term changes because of speculative activities.
The current demand for and supply of gold may affect gold prices, but not necessarily in the same
manner as current supply and demand affect the prices of other commodities. The supply of gold
consists of a combination of new production and fabricated gold held by governments, public and
private financial institutions, industrial organizations and private individuals.
As the amounts produced in any single year constitute a very small portion of the total potential
supply of gold, normal variations in current production do not necessarily have a significant
impact on the supply of gold or on its price. If revenue from gold sales falls for a substantial
period below the Companys cost of production at its operations, AngloGold Ashanti could
determine that it is not economically feasible to continue commercial production at any or all of
its operations or to continue the development of some or all of its projects.
Impact of exchange rate fluctuations
During the first six months of 2010 the rand weakened marginally against the US dollar
(based on the exchange rates of R7.44 and R7.63 per US dollar on January 1, 2010 and June, 30,
2010, respectively). However, the value of the rand strengthened by 18 percent against the US
dollar when compared to the average exchange rates of the rand against the US dollar of R7.52 and
R9.18 during the first six months of 2010 and 2009, respectively. The stronger rand against the
US dollar negatively impacted on the dollar denominated costs and therefore on the profitability
of AngloGold Ashanti.
The value of the Australian dollar strengthened by 20 percent against the US dollar when compared
to the average exchange rate of A$1.12 for the first six months of 2010 against an average
exchange rate of A$1.40 for the same period in 2009. The value of the Brazilian real
strengthened by 18 percent against the US dollar based on the average exchange rates of BRL1.80
and BRL2.20 per US dollar during the first six months of 2010 and 2009, respectively. The
strengthening of these local currencies against the US dollar further negatively impacted the
dollar denominated costs and therefore on the profitability of AngloGold Ashanti.
43
Gold market for the quarter ended June 30, 2010
Gold price movement and investment markets
Gold price data
The gold price averaged $1,198 per ounce during the second quarter of 2010, 8 percent
more than during the previous three-month period amid a continued backdrop of heightened
sovereign-debt risk in Europe, with successive debt downgrades in Greece and Portugal. As this
contagion spread across Mediterranean countries, the equity markets dropped and the euro traded
sharply lower versus the US dollar. Risk aversion in the broader market sent bullion to a record
$1,265 per ounce on June 21 and also to new highs in both euro and Brazilian real terms,
highlighting the metals potential safe haven qualities across several regions.
Investment
While the rate of inflows into exchange traded funds moderated year-on-year, the 10
major Exchange Traded Funds (ETFs) still grew from 57 million ounces at the start of the second
quarter to a high of 65 million ounces. ETF gold holdings represent almost 80 percent of
estimated global annual gold production. Net long positions on the Comex peaked at 34 million
ounces, a level last seen during the fourth quarter of 2009.
The sovereign debt crisis underpinned investment demand in the United States. During the
second quarter of 2010, 191 tonnes were added to the GLD ETF and 13.4 million contracts were
added to COMEX, 15 percent more than the previous quarter. American Eagles registered sales of
12.5 tonnes during the quarter, up from 8.4 tonnes the previous period. Gold investment in the
Middle East market did not experience a particularly notable second quarter on the back of a
reasonable first quarter.
Medallion and bar sales rose strongly in India, with anecdotal evidence suggesting that,
unlike the jewellery sector, investors showed robust demand even as the price rose. This was
further evidenced in large-scale registrations for Jewellery Savings Schemes. Investment demand
in China jumped by half year-on-year and accounted for as much as 40 percent of the total gold
off-take of about 200 tonnes during the quarter. This was nearly equivalent to all of last years
investment-related purchases amid continued declines in the countrys stock market and regulatory
changes that have made property speculation more onerous.
Official sector
As at June 30, 2010, only 39 tonnes of the 400 tonnes annual quota (which expires on
September 27, 2010 under the third Central Bank Sales Agreement) have been sold, comprised of
sales by the IMF. The World Gold Council reports that official sector gold holdings increased by
272 tonnes in the first quarter of 2010, of which 180 tonnes were from a revision of Saudi
Arabias gold holdings.
Jewellery sales
In India the second quarter of 2010 witnessed strong demand in the period leading up to
the Akshaya Thritiya festival in mid-May. Across India the festivities started with the Baisakhi
Vishu and the Bengali New Year festivities, which run from mid-April. Most jewellers reported
higher Akshaya Thritiya sales in volume terms when compared to the same period last year. June is
traditionally the annual off-peak season for the Indian market and this year is no different with
demand slowing.
The increasing gold price took its toll on jewellery demand in India, with the average price
5 percent higher in rupee terms. Consumer sentiment remained sluggish during the off-peak season
amid high price levels, relative volatility and the high rate of inflation. Demand is expected to
recover during the festive season from August until November, which features Diwali-Dhanteras.
Jewellery sales in China showed single-digit percentage increase during the quarter, which is
traditionally a weak sales period in the country. Chinas consumers appeared to have adjusted to
a buying price of around $1,200 per ounce, but retailers and manufacturers remained more
circumspect than during the first quarter. Consumers in the US, however, suffered at the higher
prices and retailers continued to hold smaller inventories.
44
Operating review for the six months ended June 30, 2010
Presented in the table below is selected operating data for AngloGold Ashanti for the
six months ended June 30, 2010 and 2009. The operating data gives effect to acquisitions and
dispositions as of their effective date:
|
|
|
|
|
|
|
|
|
|
|
Operating data for AngloGold Ashanti |
|
Six months ended June 30, |
|
|
|
|
2010 |
|
2009 |
Total gold production (000 oz)(1) |
|
|
2,205 |
|
|
|
2,230 |
|
Capital expenditure ($ million)(1)(2)(3) |
|
|
397 |
|
|
|
502 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Including equity accounted joint ventures. |
|
|
|
|
|
|
|
|
(2) |
|
Including capital expenditure of Boddington in 2009. |
|
|
|
|
|
|
|
|
(3) |
|
Including noncontrolling interests. |
|
|
|
|
|
|
|
|
Gold production
For the six months ended June 30, 2010, AngloGold Ashantis total gold production
decreased by approximately 25,000 ounces, or about 1 percent, to 2.21 million ounces from 2.23
million ounces produced in the same period in 2009. In South Africa, gold production decreased
from 900,000 ounces produced in the six months to June 30, 2009, to 832,000 ounces produced in
the same period in 2010. The decrease is mainly due to lower grades at Mponeng and Surface
operations, at Savuka where production remained constrained following a series of seismic events
that occurred close to the shaft infrastructure on May 22, 2009 and lower production mined at
Great Noligwa in line with a planned downscaling of the operation.
In the Americas, gold production increased from 378,000 ounces produced in the six months to
June 30, 2009 to 428,000 ounces produced in the same period in 2010. The increase is mainly due
to higher volumes and grades in line with the 2010 production program at AngloGold Ashanti Brasil
Mineração and better ounce recovery from pad inventory due to better pad pH chemistry and the
stacking of higher grade ore closer to the pad liner on the new leach pad at Cripple Creek &
Victor.
Capital expenditures
Total capital expenditure of $397 million was recorded during the six months ended June
30, 2010 compared to $502 million in the same period in 2009. This represented a $105 million,
or 20 percent, decrease from the same period in 2009. In Australasia, capital expenditure
decreased from $161 million recorded in the six months ended June 30, 2009 to $19 million in the
same period in 2010 mainly as a result of the sale of Boddington during 2009. In the Americas,
capital expenditure increased in Brazil from $65 million recorded in the six months ended June
30, 2009 to $75 million in the same period in 2010 mainly due to the Córrego do Sítio project at
AngloGold Ashanti Brasil Mineração. In South Africa, at Tau Tona, capital expenditure increased
from $23 million recorded in the six months ended June 30, 2009 to $33 million in the same period
in 2010 due to shaft upgrade costs.
45
Comparison of financial performance on a segment basis for the six months ended June 30,
2010 and 2009
The Company produces gold as its primary product and does not have distinct divisional
segments in terms of principal business activity, but manages its business on the basis of
different geographic segments. During 2010, the Companys Chief Operating Decision Maker, defined
as the Executive Management team, changed the basis of segment reporting as a result of a
re-alignment of the management reporting structure. Where applicable, the corresponding items of
segment information for prior periods presented have been restated to reflect this. Revenues
presented below exclude allocated realized gains/losses on non-hedge derivatives to individual
geographic areas.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
US dollar, |
|
|
|
|
|
|
US dollar, |
|
|
|
|
|
|
millions |
|
|
Percentage |
|
millions |
|
|
Percentage |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Category of activity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
|
2,370 |
|
|
|
|
|
|
|
1,441 |
|
|
|
|
|
Interest, dividends and other |
|
|
36 |
|
|
|
|
|
|
|
60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
2,406 |
|
|
|
|
|
|
|
1,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographical area data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South Africa |
|
|
945 |
|
|
|
39 |
% |
|
|
697 |
|
|
|
46 |
% |
Continental Africa |
|
|
863 |
|
|
|
36 |
% |
|
|
623 |
|
|
|
42 |
% |
Australasia |
|
|
226 |
|
|
|
9 |
% |
|
|
50 |
|
|
|
3 |
% |
Americas |
|
|
540 |
|
|
|
22 |
% |
|
|
319 |
|
|
|
21 |
% |
Other,
including Corporate and Non-gold producing subsidiaries |
|
|
4 |
|
|
|
0 |
% |
|
|
(19 |
) |
|
|
(1 |
%) |
|
|
|
|
|
|
2,578 |
|
|
|
107 |
% |
|
|
1,670 |
|
|
|
111 |
% |
Less: Equity method investments included above |
|
|
(172 |
) |
|
|
(7 |
%) |
|
|
(169 |
) |
|
|
(11 |
%) |
|
|
|
Total revenues |
|
|
2,406 |
|
|
|
100 |
% |
|
|
1,501 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, |
|
|
At December 31, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
US dollar, |
|
|
|
|
|
|
US dollar, |
|
|
|
|
|
|
millions |
|
|
Percentage |
|
millions |
|
|
Percentage |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographical area data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South Africa |
|
|
3,215 |
|
|
|
31 |
% |
|
|
3,355 |
|
|
|
31 |
% |
Continental Africa |
|
|
3,982 |
|
|
|
39 |
% |
|
|
4,054 |
|
|
|
38 |
% |
Australasia |
|
|
394 |
|
|
|
4 |
% |
|
|
496 |
|
|
|
5 |
% |
Americas |
|
|
2,013 |
|
|
|
20 |
% |
|
|
2,012 |
|
|
|
19 |
% |
Other,
including Corporate and Non-gold producing subsidiaries |
|
|
665 |
|
|
|
6 |
% |
|
|
745 |
|
|
|
7 |
% |
|
|
|
Total segment assets |
|
|
10,269 |
|
|
|
100 |
% |
|
|
10,662 |
|
|
|
100 |
% |
|
|
|
46
Comparison of financial performance for the six months ended June 30, 2010 and 2009
Financial performance of AngloGold Ashanti
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
2010 |
|
2009 |
|
|
(unaudited) |
|
(unaudited) |
|
|
(in US Dollars, millions) |
Revenue |
|
|
2,406 |
|
|
|
1,501 |
|
Cost and expenses |
|
|
2,312 |
|
|
|
1,148 |
|
Taxation expense |
|
|
(106 |
) |
|
|
(154 |
) |
Equity income in affiliates |
|
|
39 |
|
|
|
44 |
|
Net income attributable to noncontrolling interests |
|
|
(23 |
) |
|
|
(13 |
) |
Net income |
|
|
4 |
|
|
|
230 |
|
|
Comparison of financial performance on a segment basis for the six months ended June 30,
2010 and 2009
Revenues
Revenues from product sales and other income increased from $1,501 million in the first six
months of 2009 to $2,406 million in the same period of 2010, representing a 60 percent increase
over the period in 2009. This was primarily due to two reasons. Firstly, an increase in the
average spot price of gold from $916 per ounce for the six months ended June 30, 2009, to $1,154
per ounce during the six months ended June 30, 2010. Secondly, product sales into previously
designated Normal Purchase Sale Exempt contracts being recorded at spot price in the six months
ended June 30, 2010, following such contracts being recorded at fair values on the balance sheet.
The majority of product sales consisted of US dollar-denominated gold sales.
Production costs
During the six months ended June 30, 2010, AngloGold Ashanti incurred production costs of
$1,196 million representing an increase of $241 million from $955 million recorded for the same
period of 2009. The production costs of most of the operations increased during the six months
ended June 30, 2010 when compared to the same period in 2009. The increase was mainly as a
result of an increase in operational costs including labor, consumables, power and services. The
strengthening of local currencies against the US dollar also adversely impacted US dollar
denominated production costs.
Exploration costs
Exploration costs increased from $51 million in the six months ended June 30, 2009 to $94
million in the same period in 2010 mainly due to an increased level of expenditure at La Colosa
in Colombia, Tropicana in Australia and contractual settlements in the Democratic Republic of the
Congo.
General and administrative
General and administrative expenses increased from $73 million in the six months ended June
30, 2009 to $100 million in the same period in 2010, mainly due to costs relating to labor costs,
roll out of project ONE business improvement initiatives and corporate office costs.
Royalties
Royalties paid by AngloGold Ashanti increased from $36 million in the six months ended June
30, 2009, to $58 million paid in the same period in 2010, mainly due to higher spot prices and an
increase in gold sold at the Geita mine (Tanzania), Cerro Vanguardia (Argentina) and Siguiri
(Guinea). Royalties are predominantly calculated based on a percentage of revenues and are
payable primarily to local governments.
Royalties paid by AngloGold Ashanti further increased in 2010 as a result of the
introduction in the South African Mineral and Petroleum Resources Act of royalties payable in
South Africa from March 1, 2010.
Depreciation, depletion and amortization
Depreciation, depletion and amortization expense increased by $51 million to $336 million in
the six months ended June 30, 2010, compared to $285 million recorded in the same period in 2009,
mainly due to a reduction in estimated lives of certain assets at the South African mines
following annual life-of-mine planning reviews and stronger operating currencies when compared to
the previous year. Depreciation, depletion and amortization expense in South Africa increased by
$42 million to $168 million in the six months ended June 30, 2010, compared to $126 million
recorded in the same period in 2009.
47
Impairment of assets
Impairment charges of $19 million were recorded in the six months ended June 30, 2010,
mainly due to the write-off of assets at Iduapriem and Geita and the impairment of the asset held
for sale -Tau Lekoa.
Interest expense
Interest expense increased by $10 million to $67 million in the six months ended June 30,
2010, compared to $57 million recorded in the same period in 2009. Interest expense recorded in
the six months ended June 30, 2010 includes $8 million related to accelerated amortization of
fees on debt facilities cancelled.
Employment severance costs
Employment severance costs increased to $10 million during the six months ended June 30,
2010 from $6 million in the same period in 2009. Employment severance costs recorded for the six
months ended June 30, 2010 relates to retrenchments in the South Africa region reflecting
rationalization of operations at Great Noligwa, Mponeng, Moab Khotsong and Koponang.
Loss/profit on sale of assets, realization of loans, indirect taxes and other
In the six months ended June 30, 2010, the Company recorded a loss of $16 million (before
taxation of $1 million). The loss mainly related to the impairment of debtors in South Africa and
Tanzania of $7 million and the reassessment of indirect taxes payable in Continental Africa of
$11 million.
In the six months ended June 30, 2009, the Company recorded a profit of $83 million (before
taxation of $23 million). The profit mainly related to the disposal of the indirect 33 percent
joint venture interest in Boddington Gold Mine in Australia to Newmont Mining Corporation offset
by a loss on the impairment of the receivable from Pamodzi Gold, whose operations were liquidated
during October 2009 and a loss on consignment stock.
Non-hedge derivative loss/gain
A loss on non-hedge derivatives of $409 million was recorded in the six months ended June 30,
2010 compared to a gain of $239 million in the same period of 2009 relating to the use of
non-hedging instruments. The net loss recorded in the six months ended June 30, 2010 relates to
realized losses on non-hedge derivatives, the revaluation of non-hedge derivatives resulting from
changes in the prevailing spot gold price, exchange rates, interest rates and volatilities during
the six months ended June 30, 2010, partially offset by the fair value gain of the conversion
features of convertible bonds. Non-hedge derivatives recorded in the six months ended June 30,
2010 and 2009 included:
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
(in US Dollars, millions) |
|
Loss/(gain) on realized non-hedge derivatives |
|
|
176 |
|
|
|
(338 |
) |
Loss on unrealized non-hedge derivatives |
|
|
297 |
|
|
|
84 |
|
Fair value (gain)/loss on option component of convertible bonds |
|
|
(64 |
) |
|
|
15 |
|
|
|
|
Net loss/(gain) |
|
|
409 |
|
|
|
(239 |
) |
|
|
|
Taxation expense
A net taxation expense of $106 million was recorded in the six months ended June 30, 2010
compared to a net expense of $154 million in the same period in 2009. Deferred tax benefit in the
six months ended June 30, 2010 amounted to $21 million compared to deferred tax charges of $57
million in the same period in 2009. Charges for current tax in the six months ended June 30,
2010 amounted to $127 million compared to $97 million in the same period in 2009. Refer to note H
Taxation to the condensed consolidated financial statements for additional information.
Equity income in affiliates
Equity income in affiliates decreased to $39 million in the six months ended June 30, 2010
from $44 million in the six months ended June 30, 2009.
Noncontrolling interests net income
Net income attributable to noncontrolling interests increased from $13 million in the six
months ended June 30, 2009 to $23 million in the six months ended June 30, 2010, mainly due to
increased revenue at Serra Grande and Cerro Vanguardia in South America.
48
Net income
The net income fell from $243 million recorded during the first six months of 2009 to
$27 million during the first six months of 2010, mainly due the unrealized losses on the hedge
book, as the contracts were valued at a higher spot gold price as at June 30, 2010. The net
income attributable to AngloGold Ashanti (after allowing for non-controlling interests) amounted
to $4 million for the six months to June 30, 2010 compared to $230 million for the same period in
2009.
Liquidity and capital resources
Net cash provided by operating activities was $577 million in the six months ended June 30,
2010, $250 million higher than net cash provided of $327 million for the comparable period in
2009, mainly as a result of increased profitability and lower payments to suppliers. Net cash
outflow from operating working capital items amounted to $133 million in the six months ended
June 30, 2010 compared to an outflow of $147 million in the same period in 2009.
Investing activities in the six months ended June 30, 2010 resulted in a net cash outflow of
$319 million compared to a net cash inflow of $292 million in the six months ended June 30, 2009.
Additions to property, plant and equipment, which included capital expenditure of $381 million
compared to $499 million in the same period in 2009, were recorded in the first six months of
2010.
During April 2010, AngloGold Ashanti completed two key financing transactions namely:
|
1. |
|
The issue of two rated bonds maturing in 10 and 30 years aggregating US$1.0 billion.
The proceeds were applied to repay and cancel amounts drawn under the $1.15 billion
syndicated loan facility and the 2009 Term Facility; and |
|
|
2. |
|
The entering of a four year unsecured Revolving Credit Facility with a group of banks for
US$1.0 billion which remained undrawn as at June 30, 2010. |
Net cash generated by financing activities in the six months ended June 30, 2010 amounted to
an outflow of $481 million, which is a decrease of $1,520 million from an inflow of $1,039
million in the six months ended June 30, 2009. Cash inflows from proceeds from loans in the six
months ended June 30, 2010 amounted to $1,029 million and included $994 million raised on the
rated bonds issued during April 2010. Cash outflows from repayment of debt of $1,315 million
during the six months ended June 30, 2010 included capital repayments of $1,060 million on the
$1.15 billion syndicated loan facility and $250 million on the 2009 Term Facility. Financing
activities for non-hedge derivatives maturing resulted in an outflow of $133 million in the six
months ended June 30, 2010 compared to an inflow of $229 million for the same period in 2009.
Debt issuance costs paid during the six months ended June 30, 2010 on the rated bonds amounted to
$7 million. The Company made dividend payments of $59 million (10 US cents per ordinary share) in
the six months ended June 30, 2010.
As a result of the items discussed above, at June 30, 2010 AngloGold Ashanti had $866
million of cash and cash equivalents compared with $1,100 million at December 31, 2009, a
decrease of $234 million. At June 30, 2010, the Company had a total of $1,167 million available
but undrawn under its credit facilities (including its new $1.0 billion Revolving Credit
Facility).
AngloGold Ashanti is currently involved in a number of capital projects. As at June 30,
2010, $237 million of AngloGold Ashantis future capital expenditure had been contracted for and
another approximately $1,444 million had been authorized but not yet contracted for, as described
in note O Commitments and contingencies to the condensed consolidated financial statements.
Cash generated from operations is subject to operational, market and other risks.
Distributions from operations may be subject to foreign investment and exchange control laws and
regulations and the quantity of foreign exchange available in offshore countries. In addition,
distributions from joint ventures are subject to the relevant board approval.
AngloGold Ashanti intends to finance its capital expenditure requirements from cash on hand,
cash flow from operations, the proceeds from the sale of the Tau Lekoa mine, existing and new
replacement credit facilities and long-term debt financing and, potentially if deemed
appropriate, the issuance of equity and equity-linked instruments.
Critical accounting policies
The preparation of AngloGold Ashantis financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the year. For a full discussion of the Companys
critical accounting policies, please see Managements discussion and analysis of financial
condition and results of operations Critical accounting policies in the consolidated
financial statements for the years ended December 31, 2009, 2008 and 2007 and as at December 31,
2009 and 2008 and footnotes thereto included in the Companys Form 6-K dated August 11, 2010.
49
Recently accounting pronouncements adopted and issued
For a description of accounting changes and recent accounting pronouncements, including the
expected dates of adoption and estimated effects, if any, on the Companys financial statements,
see notes A Basis of presentation and B Accounting developments to the condensed consolidated
financial statements.
Contractual obligations
In addition to the contractual obligations as disclosed in the Companys Annual Report on
Form 20-F for the year ended December 31, 2009, during the six months ended June 30, 2010, the
Company drew down $35 million under the $1.15 billion syndicated loan facility and raised $994
million on the rated bonds. The Company repaid the $1.15 billion syndicated loan facility ($1,060
million), the 2009 Term Facility ($250 million) and made normal scheduled loan repayments of $5
million.
An amount of $619 million due on the 2009 convertible bonds is included in long-term debt as
of June 30, 2010.
As at June 30, 2010, the total carrying value of the rated bonds (including accrued interest
of $10 million) amounted to $1,004 million. As at June 30, 2010, the estimated fair value of all
derivatives making up the hedge positions was a negative $2,535 million (at December 31, 2009:
negative $2,366 million).
Recent developments
On April 21, 2010, AngloGold Ashanti announced that it had secured a $1.0 billion, four-year
unsecured revolving credit facility. In addition, the Company also announced the appointment of Mr
Ferdinand (Fred) Ohene-Kena, the former Ghanaian Minister of Mines and Energy, to the board. The
appointment became effective on June 1, 2010.
On April 22, 2010, AngloGold Ashanti announced the pricing of an offering of $1.0 billion of
10 year and 30 year unsecured notes issued by its wholly-owned subsidiary AngloGold Ashanti
Holdings plc and guaranteed by the Company. The issue closed on April 28, 2010.
On June 1, 2010, AngloGold Ashanti announced that it was halting the supply of services,
including water, compressed air, electricity and sewerage, to the mines in Orkney following the
failure by the liquidators of Pamodzi Gold Orkney, to settle debts owed for services supplied to
the operations over the past ten months. AngloGold Ashanti however would continue to supply
potable water and electrical power to Pamodzis mine residences for as long as these were
occupied.
On February 17, 2009, AngloGold Ashanti announced the terms of the sale of its Tau Lekoa mine
together with the adjacent properties of Weltevreden, Jonkerskraal and Goedgenoeg (Tau Lekoa) to
Simmer & Jack Mines Limited (Simmers). The sale was concluded effective August 1, 2010,
following the transfer of the mineral rights of Tau Lekoa to Buffelsfontein Gold Mines Limited, a
wholly-owned subsidiary of Simmers, on July 20, 2010. Tau Lekoa is classified as held for sale
in the balance sheets as at June 30, 2010 and December 31, 2009. The selling price of R600 million
is payable in two tranches, R450 million was paid in cash on August 4, 2010 with the remaining
R150 million payable either in cash or Simmers shares and is subject to offset adjustments in
respect of the free cash flow generated by Tau Lekoa during the period January 1, 2009 to July 31,
2010, up to a maximum of R150 million and any offset for royalty payable during the period January
1, 2010 to June 30, 2010. This balancing amount will be determined based upon a final audit of the
July 2010 production figures.
On August 12, 2010, AngloGold Ashanti announced that it has entered into an agreement with
B2Gold Corp. to amend the Gramalote Joint Venture Agreement. Under the amended terms, AngloGold
will retain its 51 percent interest in the Gramalote Joint Venture and will become manager of the
Gramalote Project in Colombia. The Gramalote Project to date was managed by B2Gold, which will
retain its 49 percent interest in the Gramalote Joint Venture.
On August 12, 2010, AngloGold Ashanti announced the appointment of Mr Rhidwaan Gasant to its
board of directors, In addition to his duties as an independent, non-executive director, Mr Gasant
will also be a member of the Audit and Corporate Governance Committee.
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Forward-looking statements
Except for historical information, there may be matters discussed in this interim report
that are forward-looking statements. In particular, the statements made under Gold market
regarding the future performance of the gold and currency markets and Liquidity and capital
resources regarding sources of financing are forward-looking statements. All statements other
than statements of historical fact are, or may be deemed to be, forward-looking statements,
including, without limitation those concerning: AngloGold Ashantis strategy to reduce its
hedging position including the extent and effect of the reduction of AngloGold Ashantis gold
hedging position; the economic outlook for the gold mining industry; expectations regarding gold
prices, production, costs and other operating results; growth prospects and the outlook of
AngloGold Ashantis operations, individually or in the aggregate, including the completion and
commencement of commercial operations at AngloGold Ashantis exploration and production projects
and the completion of acquisitions and dispositions; AngloGold Ashantis liquidity and capital
resources and expenditure, and the outcome and consequences of any pending litigation
proceedings. These forward-looking statements are not based on historical facts, but rather
reflect AngloGold Ashantis current expectations concerning future results and events. Statements
that describe AngloGold Ashantis objectives, plans or goals are or may be forward-looking
statements.
These forward-looking statements involve known and unknown risks, uncertainties and other factors
that may cause AngloGold Ashantis actual results, performance or achievements to differ
materially from the anticipated results, performance or achievements expressed or implied by
these forward-looking statements. Although AngloGold Ashanti believes that the expectations
reflected in these forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. These statements speak only as of the date they are
given. AngloGold Ashanti undertakes no obligation to publicly update its forward-looking
statements, whether as a result of new information, future events or otherwise.
For a discussion of such risk factors, shareholders should refer to the annual report on Form
20-F for the year ended December 31, 2009, which was filed with the SEC on April 19, 2010, as
amended on May 18, 2010. These factors are not necessarily all of the important factors that
could cause AngloGold Ashantis actual results to differ materially from those expressed in any
forward-looking statements. Other unknown or unpredictable factors could also have material
adverse effects on future results.
51
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this Current Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
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AngloGold Ashanti Limited |
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Date: September 7, 2010
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By:
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/s/ L Eatwell
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Name: L Eatwell |
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Title: Company Secretary |
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52