Anglo American Annual Report 2008
12. Earnings per share
| 2008 | 2007 | |||||
|---|---|---|---|---|---|---|
| US$ | Continuing operations | Discontinued operations | Total Group | Continuing operations | Discontinued operations | Total Group |
| Profit for the financial year attributable to equity shareholders of the Company |
||||||
| Basic earnings per share | 4.34 | – | 4.34 | 4.04 | 1.54 | 5.58 |
| Diluted earnings per share | 4.29 | – | 4.29 | 3.99 | 1.51 | 5.50 |
| Headline earnings for the financial year(1) | ||||||
| Basic earnings per share | 3.78 | – | 3.78 | 4.10 | 0.08 | 4.18 |
| Diluted earnings per share | 3.74 | – | 3.74 | 4.04 | 0.08 | 4.12 |
| Underlying earnings for the financial year(1) | ||||||
| Basic earnings per share | 4.36 | – | 4.36 | 4.18 | 0.22 | 4.40 |
| Diluted earnings per share | 4.31 | – | 4.31 | 4.13 | 0.21 | 4.34 |
- (1)
- Basic and diluted earnings per share are shown based on headline earnings, a Johannesburg stock exchange (JSE Limited) defined performance measure, and underlying earnings, which the directors consider to be a useful additional measure of the Group's performance. Both earnings measures are further explained below.
The calculation of the basic and diluted earnings per share is based on the following data:
| 2008 | 2007 | |||||
|---|---|---|---|---|---|---|
| US$ million (unless otherwise stated) | Continuing operations | Discontinued operations | Total Group | Continuing operations | Discontinued operations | Total Group |
| Basic and diluted earnings | ||||||
| Profit for the financial year attributable to equity shareholders of the Company |
5,215 | – | 5,215 | 5,294 | 2,010 | 7,304 |
| Number of shares (million) | ||||||
| Basic number of ordinary shares outstanding(1) | 1,202 | 1,309 | ||||
| Effect of dilutive potential ordinary shares(2) |
||||||
| Share options and awards | 13 | 18 | ||||
| Diluted number of ordinary shares outstanding(1) |
1,215 | 1,327 | ||||
- (1)
- Basic and diluted number of ordinary shares outstanding represent the weighted average for the year. The average number of ordinary shares in issue excludes the shares held by the employee benefit trusts and other Anglo American plc shares held by the Group.
- (2)
- Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all potentially dilutive ordinary shares. All outstanding share options and awards are potentially dilutive and have been included in the calculation of diluted earnings per share. No instruments are anti-dilutive for the year ended 31 December 2008 (2007: nil).
The weighted average number of ordinary shares, and accordingly earnings per share, of the Group have been impacted by the effect of the share buyback programme as well as the Anglo American share consolidation which on 2 July 2007 resulted in 100 existing Anglo American ordinary shares being exchanged for 91 new Anglo American ordinary shares.
‘Underlying earnings' is an alternative earnings measure which the directors believe provides a clearer picture of the underlying financial performance of the Group's operations. Underlying earnings is presented after minority interests and excludes special items and remeasurements (see note 7). Underlying earnings is distinct from ‘Headline earnings', which is a JSE Limited defined performance measure.
The calculation of basic and diluted earnings per share for continuing operations, based on headline and underlying earnings for continuing operations, uses the following earnings data:
| Earnings (US$ million) | Basic earnings per share (US$) | |||
|---|---|---|---|---|
| Continuing operations | 2008 | 2007 | 2008 | 2007 |
| Profit for the financial year attributable to equity shareholders of the Company – continuing operations |
5,215 | 5,294 | 4.34 | 4.04 |
| Operating special items | 209 | 196 | 0.17 | 0.15 |
| Operating special items – tax | (27) | (54) | (0.02) | (0.04) |
| Operating special items – minority interests | (1) | – | – | – |
| Net profit on disposals(1) | (1,009) | (528) | (0.84) | (0.40) |
| Net profit on disposals – tax | 47 | 71 | 0.04 | 0.05 |
| Net profit on disposals – minority interests | 43 | (34) | 0.04 | (0.02) |
| Associates' special items | 67 | 418 | 0.05 | 0.32 |
| Associates' special items – tax | (1) | – | – | – |
| Associates' special items – minority interests | (2) | – | – | – |
| Headline earnings for the financial year(2) – continuing operations | 4,541 | 5,363 | 3.78 | 4.10 |
| Operating special items(3) | 143 | 55 | 0.12 | 0.04 |
| Operating special items – tax | (15) | (6) | (0.01) | – |
| Operating remeasurements | 779 | (5) | 0.65 | – |
| Operating remeasurements – tax | (252) | 1 | (0.21) | – |
| Operating remeasurements – minority interests | (135) | – | (0.11) | – |
| Financing remeasurements | (51) | (29) | (0.04) | (0.02) |
| Financing remeasurements – tax | – | 5 | – | – |
| Tax remeasurements | 153 | – | 0.12 | – |
| Tax remeasurements – minority interests | (52) | – | (0.04) | – |
| Associates' remeasurements | 116 | 7 | 0.10 | – |
| Associates' remeasurements – tax | (9) | – | (0.01) | – |
| Associates' remeasurements – minority interests | (9) | – | (0.01) | – |
| Associates' special items(4) | 40 | 20 | 0.03 | 0.01 |
| Associates' special items – tax | (7) | (2) | (0.01) | – |
| Associates' special items – minority interests | (5) | – | – | – |
| IFRS 2 charges on BBBEE and BEE transactions | – | 68 | – | 0.05 |
| Underlying earnings for the financial year – continuing operations |
5,237 | 5,477 | 4.36 | 4.18 |
| Underlying earnings for the financial year – discontinued operations |
– | 284 | – | 0.22 |
| Underlying earnings for the financial year – total Group |
5,237 | 5,761 | 4.36 | 4.40 |
- (1)
- Excluding associated IFRS 2 charges on BBBEE and BEE transactions.
- (2)
- Headline earnings for the financial year – total Group was $4,541 million (2007: $5,467 million).
- (3)
- Year ended 31 December 2008 includes costs associated with ‘One Anglo' initiatives, Tarmac restructuring and proposed sale of Tarmac as well as provisions for onerous leases. Year ended 31 December 2007 includes costs associated with proposed sale of Tarmac.
- (4)
- Includes restructuring costs and legal settlements.
The calculation of basic and diluted earnings per share for discontinued operations, based on headline and underlying earnings for discontinued operations, uses the following earnings data:
Earnings (US$ million) |
Basic earnings per share (US$) | |||
|---|---|---|---|---|
| Discontinued operations | 2008 | 2007 | 2008 | 2007 |
| Profit for the financial year attributable to equity shareholders of the Company – discontinued operations |
– | 2,010 |
– | 1.54 |
| Operating special items | – | 13 | – | 0.01 |
| Operating special items – tax | – | (2) | – | – |
| Financing special items | – | 2 | – | – |
| Financing special items – tax | – | (8) | – | (0.01) |
| Net profit on disposals | – | (2,079) | – | (1.59) |
| Net profit on disposals – tax | – | 165 | – | 0.13 |
| Associates' special items | – | 1 | – | – |
| Associates' special items – tax | – | 2 | – | – |
| Headline earnings for the financial year – discontinued operations |
– | 104 | – | 0.08 |
| Operating remeasurements | – | (3) | – | – |
| Operating remeasurements – tax | – | 1 | – | – |
| Financing remeasurements | – | (2) | – | – |
| Associates' remeasurements | – | 204 | – | 0.16 |
| Associates' remeasurements – tax | – | (20) | – | (0.02) |
| Underlying earnings for the financial year – discontinued operations |
– | 284 | – | 0.22 |