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35. Discontinued operations

On 2 July 2007 the Paper and Packaging business, Mondi, was demerged from the Group by way of a dividend in specie paid to shareholders.

On 2 October 2007 the Group sold 67.1 million shares in AngloGold Ashanti Limited which reduced the Group's shareholding from 41.6% to 17.3%. The Group's representation on the company's board was also withdrawn at this time. The remaining investment is accounted for as a financial asset investment.

Both of these operations are presented as discontinued.

The results of the discontinued businesses are shown below:

  Before special items
and remeasurements
Special items and
remeasurements
   
US$ million 2008 2007 2008 2007 2008 2007
Revenue 4,062 4,062
Total operating costs (3,741) (10) (3,751)
Operating profit from subsidiaries and joint ventures – discontinued operations 321 (10) 311
Net profit on disposals 119 119
Share of net income from associates 97 (187) (90)
Total profit from discontinued operations and associates 418 (78) 340
Net finance costs (19) (19)
Profit before tax – discontinued operations 399 (78) 321
Income tax expense (81) 1 (80)
Profit for the financial year – discontinued operations 318 (77) 241
Profit on partial disposal of AngloGold Ashanti(1) 1,970 1,970
Transaction costs relating to the demerger of Mondi(1) (10) (10)
Tax on net profit on disposal and demerger of discontinued operations (157) (157)
Net profit after tax on disposal and demerger of discontinued operations 1,803 1,803
 
Total profit for the financial year – discontinued operations 318 1,726 2,044
(1)
For further details of the demerger of the Paper and Packaging business and disposal of AngloGold Ashanti refer to note 33.

Summary discontinued segment information

Segment revenue and segment result by discontinued business segment were:

  Segment revenue Segment result before special
items and remeasurements(1)
Segment result after special
items and remeasurements(1)
US$ million 2008 2007 2008 2007 2008 2007
Subsidiaries and joint ventures
Paper and Packaging 4,062(2) 321 311
Revenue and net income from associates
Gold 1,004 95 (92)
Paper and Packaging 49 2 2
Total associates 1,053 97 (90)
Total discontinued operations including net income from associates 5,115 418 221
Net profit on disposals     119
Total profit from discontinued operations and associates     418 340
(1)
Segment result is defined as being segment revenue less segment expense; that is operating profit.
(2)
This represents segment revenue; the Group's share of associates of discontinued operations and discontinued associates' revenue figures are provided for additional information.

Summary discontinued special items and remeasurements

The following tables provide an analysis of special items and remeasurements for discontinued operations:

Subsidiaries and joint ventures' special items and remeasurements - discontinued operations

US$ million 2008 2007
Operating special items (13)
Operating remeasurements 3
Net profit on disposals 119
Financing special items (2)
Financing remeasurements 2
Total special items and remeasurements before tax – discontinued operations 109
Tax 1
Net total special items and remeasurements attributable to equity shareholders of the Company – discontinued operations 110

Associates' special items and remeasurements – discontinued operations

US$ million 2008 2007
Associates' operating special items and remeasurements (225)
Associates' net profit on disposals 7
Associates' financing remeasurements 13
Total associates' special items and remeasurements before tax – discontinued operations (205)
Tax 18
Net total associates' special items and remeasurements – discontinued operations (187)

Employee numbers and costs – discontinued operations

The average number of employees, excluding associates' employees and including a proportionate share of employees within joint ventures, was:

Thousands 2008 2007
By business segment
Paper and Packaging(1) 16
Discontinued operations 16
(1)
2007 includes employee numbers for Mondi for the period it was held as a subsidiary pro rated over the full year.

Payroll costs in respect of the employees included in the table above were:

US$ million 2008 2007
Wages and salaries 473
Social security costs 95
Post retirement healthcare costs 1
Defined benefit pension plan costs 2
Share-based payments 4
Discontinued operations 575

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