REG - Rio Tinto - Rio Tinto 2015 half year results <Origin Href="QuoteRef">RIO.L</Origin> - Part 3
06/08/2015 07:30
- Part 3: For the preceding part double click ID:nRSF2757Vb
(17)
Operating profit 3,318 5,583
Share of profit after tax of equity accounted units 344 306
Profit before finance items and taxation 3,662 5,889
Finance items
Net exchange (losses)/gains on external debt and intragroup balances (1,410) 707
Net (losses)/gains on derivatives not qualifying for hedge accounting (23) 19
Finance income 25 32
Finance costs (c) (318) (367)
Amortisation of discount (191) (188)
(1,917) 203
Profit before taxation 1,745 6,092
Taxation (946) (1,807)
Profit for the period 799 4,285
- attributable to owners of Rio Tinto (net earnings) 806 4,402
- attributable to non-controlling interests (7) (117)
Basic earnings per share from continuing operations (d) 43.8c 238.2c
Diluted earnings per share from continuing operations (d) 43.5c 237.0c
(a) The impairment charge in the period related primarily to the decrease in carrying value of Energy Resources of
Australia Ltd (ERA), following a Rio Tinto Board decision not to support any future study or development of Ranger 3 Deeps.
The cash inflows from processing low grade stockpile ore are not expected to be sufficient to meet the cost of
rehabilitation and therefore the property, plant and equipment and intangible assets of ERA have been fully impaired,
resulting in a US$260 million pre-tax charge.
Other impairment charges during the period reflect challenging economic conditions at Carbone Savoie and an anticipated
disposal in the Aluminium portfolio.
In 2014 the pre-tax impairment charge of US$1,142 million related to the Group's aluminium business. As a result of further
revisions to future capital required to complete the modernisation project at Kitimat in British Columbia, and related
impacts on the project, the recoverable value of the Kitimat cash-generating unit diminished. The consequent fall in fair
value less costs of disposal ('FVLCD') below carrying value resulted in a pre-tax impairment charge to property, plant and
equipment of US$1,092 million.
Group income statement (continued)
(b) The 2015 gain related mainly to the sale by Turquoise Hill Resources Ltd (TRQ) of 25.7 per cent of its holdings in
SouthGobi Resources (SGR) on 23 April 2015. Rio Tinto also sold its 77.8 per cent interest in Murowa Diamonds and 50 per
cent interest in Sengwa Colliery Ltd (Sengwa) to RZ Murowa Holdings Limited on 17 June 2015.
In 2014 pre-tax losses of US$362 million arose mainly from further adjustments in respect of contractual obligations for
product sales and delivery which remained with the Group following sale of the Group's interest in the Clermont mine on 29
May 2014, and indemnities provided in respect of prior disposals.
(c) Finance costs in the income statement include hedging adjustments and are net of amounts capitalised of US$171 million
(30 June 2014: US$263 million).
(d) For the purpose of calculating basic earnings per share, the weighted average number of Rio Tinto plc and Rio Tinto
Limited shares outstanding during the period was 1,838.9 million (30 June 2014: 1,848.2 million), being the average number
of Rio Tinto plc shares outstanding of 1,409.3 million (30 June 2014: 1,412.9 million), plus the average number of Rio
Tinto Limited shares outstanding of 429.6 million (30 June 2014: 435.3 million). The profit figures used in the calculation
of basic and diluted earnings per share are the profits attributable to owners of Rio Tinto.
For the purpose of calculating diluted earnings per share, the effect of dilutive securities is added to the weighted
average number of shares. This effect is calculated under the treasury stock method.
Group statement of comprehensive income
Six monthsto 30 June2015US$m Six monthsto 30 June2014US$m
Profit after tax for the period 799 4,285
Other comprehensive income/(loss):
Items that will not be reclassified to profit or loss:
Actuarial gains/(losses) on post retirement benefit plans 386 (609)
Share of other comprehensive income of equity accounted units net of tax - 1
Tax relating to components of other comprehensive income (122) 170
264 (438)
Items that have been/may be reclassified subsequently to profit or loss:
Currency translation adjustment (a) (1,266) 833
Currency translation transferred to the income statement (11) -
Fair value movements:
- Cash flow hedge gains/(losses) 12 (38)
- Cash flow hedge (gains)/losses transferred to the income statement (9) 12
- Losses on revaluation of available for sale securities (14) (19)
- Losses on revaluation of available for sale securities transferred to the income statement 9 6
Share of other comprehensive (loss)/income of equity accounted units net of tax (29) 16
Tax relating to components of other comprehensive income (2) (9)
(1,310) 801
Other comprehensive (loss)/income for the period, net of tax (1,046) 363
Total comprehensive (loss)/income for the period (247) 4,648
- attributable to owners of Rio Tinto (36) 4,654
- attributable to non-controlling interests (211) (6)
(a) Excludes a currency translation charge of US$283 million (30 June 2014: credit of US$278 million) arising on Rio Tinto
Limited's share capital for the period ended 30 June 2015, which is recognised in the Group statement of changes in equity.
Refer to Group statement of changes in equity on page 37.
Group cash flow statement
Six monthsto 30 June2015US$m Six monthsto 30 June2014US$m
Cash flows from consolidated operations(a) 6,012 8,618
Dividends from equity accounted units 181 42
Cash flows from operations 6,193 8,660
Net interest paid (401) (538)
Dividends paid to holders of non-controlling interests in subsidiaries (148) (161)
Tax paid (1,209) (2,505)
Net cash generated from operating activities 4,435 5,456
Cash flows from investing activities
Purchase of property, plant & equipment and intangible assets (b) (2,474) (3,845)
Disposals of subsidiaries, joint arrangements & associates (c) 9 999
Sales of financial assets 28 -
Purchases of financial assets (13) (51)
Net funding of equity accounted units 11 (84)
Other investing cash flows 21 265
Cash used in investing activities (2,418) (2,716)
Cash flows before financing activities 2,017 2,740
Cash flows from financing activities
Equity dividends paid to owners of Rio Tinto (2,162) (2,006)
Repayment of borrowings (1,337) (3,061)
Proceeds from additional borrowings 1,295 401
Proceeds from issue of equity to non-controlling interests 45 1,229
Own shares purchased from owners of Rio Tinto (1,021) -
Other financing cash flows 13 70
Net cash flow used in financing activities (3,167) (3,367)
Effects of exchange rates on cash and cash equivalents (90) (6)
Net decrease in cash and cash equivalents (1,240) (633)
Opening cash and cash equivalents less overdrafts 12,400 10,209
Closing cash and cash equivalents less overdrafts (d) 11,160 9,576
Group cash flow statement (continued)
Six monthsto 30 June2015US$m Six monthsto 30 June2014US$m
(a) Cash flows from consolidated operations
Profit from continuing operations 799 4,285
Adjustments for:
- Taxation 946 1,807
- Finance items 1,917 (203)
- Share of profit after tax of equity accounted units (344) (306)
- (Gain)/loss on disposal of interests in businesses (23) 362
- Impairment charges 439 1,142
- Depreciation and amortisation 2,307 2,258
- Provisions (including exchange differences on provisions) 477 557
Utilisation of provisions (227) (528)
Utilisation of provision for post retirement benefits (117) (159)
Change in inventories 129 111
Change in trade and other receivables 870 484
Change in trade and other payables (969) (1,390)
Other items (192) 198
6,012 8,618
(b) Capital expenditure includes US$189 million (30 June 2014: US$272 million) capitalised in accordance with IFRIC 20
'Stripping costs in the production phase of a surface mine'; a significant proportion of stripping costs capitalised relate
to the Group's Copper operations.
(c) Disposal proceeds in the six months to 30 June 2015 mainly related to amounts received following the disposal of the
25.7 per cent interest in SGR by TRQ on 23 April 2015.
Disposal proceeds in the six months to 30 June 2014 mainly comprise amounts received following completion of the sale of
the Group's interest in the Clermont mine on 29 May 2014.
(d) Closing cash and cash equivalents less overdrafts for the purposes of the cash flow statement differs from cash and
cash equivalents on the Group balance sheet as per the following reconciliation:
30 June2015US$m 31 December2014US$m 30 June 2014US$m
Cash and cash equivalents per Group balance sheet 11,163 12,423 9,600
Bank overdrafts (reported within 'borrowings and other financial liabilities') (35) (23) (24)
Cash and cash equivalents included in assets of disposal groups held for sale 32 - -
Cash and cash equivalents less overdrafts per Group cash flow statement 11,160 12,400 9,576
Group balance sheet
30 June2015US$m 31 December2014US$m
Non-current assets
Goodwill 1,154 1,228
Intangible assets 5,576 5,880
Property, plant and equipment 65,410 68,693
Investments in equity accounted units 5,025 4,868
Inventories 351 397
Deferred tax assets 3,230 3,540
Trade and other receivables 1,426 1,304
Other financial assets (including tax recoverable and loans to equity accounted units) 776 792
82,948 86,702
Current assets
Inventories 3,924 4,350
Trade and other receivables 2,799 3,623
Other financial assets (including tax recoverable and loans to equity accounted units) 387 417
Cash and cash equivalents 11,163 12,423
18,273 20,813
Assets of disposal groups held for sale (a) 82 312
Total assets 101,303 107,827
Current liabilities
Borrowings and other financial liabilities (4,422) (2,684)
Trade and other payables (6,032) (7,437)
Tax payable (307) (800)
Provisions including post retirement benefits (1,219) (1,299)
(11,980) (12,220)
Non-current liabilities
Borrowings and other financial liabilities (20,943) (22,535)
Trade and other payables (859) (871)
Tax payable (337) (370)
Deferred tax liabilities (3,603) (3,574)
Provisions including post retirement benefits (12,865) (13,303)
(38,607) (40,653)
Liabilities of disposal groups held for sale (a) (83) (360)
Total liabilities (50,670) (53,233)
Net assets 50,633 54,594
Capital and reserves
Share capital (b)
- Rio Tinto plc 228 230
- Rio Tinto Limited 4,167 4,535
Share premium account 4,298 4,288
Other reserves 10,057 11,122
Retained earnings 23,897 26,110
Equity attributable to owners of Rio Tinto 42,647 46,285
Attributable to non-controlling interests 7,986 8,309
Total equity 50,633 54,594
Group balance sheet (continued)
(a) Assets and liabilities held for sale at 30 June 2015 comprise Rio Tinto's interest in the Blair Athol coal project,
SouthGobi Resources Limited and ECLTM.
(b) At 30 June 2015, Rio Tinto plc had 1,402.0 million ordinary shares in issue and held by the public, and Rio Tinto
Limited had 424.2 million shares in issue and held by the public. As required to be disclosed under the ASX Listing Rules,
the net tangible assets per share amounted to US$19.67 (31 December 2014: US$21.18).
Group statement of changes in equity
Period ended
30 June 2015
Attributable to owners of Rio Tinto
Share capital Share Other Retained Total Non-controlling Total
US$m premium reserves earnings US$m interests equity
US$m US$m US$m US$m US$m
Opening balance 4,765 4,288 11,122 26,110 46,285 8,309 54,594
Total comprehensive (loss)/income for the period (a) - - (1,105) 1,069 (36) (211) (247)
Currency translation arising on
Rio Tinto Limited's share capital (283) - - - (283) - (283)
Dividends - - - (2,162) (2,162) (148) (2,310)
Share buy-back (b) (87) - 2 (1,175) (1,260) - (1,260)
Own shares purchased from Rio Tinto shareholders to satisfy share options (c) - - 11 - 11 - 11
Treasury shares reissued and other movements - 10 - 1 11 - 11
Change in equity held by Rio Tinto - - - 19 19 (15) 4
Equity issued to holders of non-
controlling interests - - - - - 45 45
Companies no longer consolidated - - - - - 6 6
Employee share options and other IFRS 2 charges taken to the income statement - - 27 35 62 - 62
Closing balance 4,395 4,298 10,057 23,897 42,647 7,986 50,633
Six monthsto 30 June2015US$ Six monthsto 30 June2014US$
Dividends per share: paid during the period 119.0c 108.5c
Dividends per share: proposed in the announcement of the results for the period 107.5c 96.0c
(a) Refer to Group statement of comprehensive income for further details.
(b) Total amount of US$1,260 million includes own shares purchased from owners of Rio Tinto of US$1,021 million as per the
Group cash flow statement and US$239 million financial liability recognised as a result of an irrevocable contract to cover
the share buy-back programme.
(c) Net of contributions received from employees for share options.
Group statement of changes in equity (continued)
Period ended
30 June 2014
Attributable to owners of Rio Tinto
Share capital Share Other Retained Total Non-controlling Total
US$m premium reserves earnings US$m interests equity
US$m US$m US$m US$m US$m
Opening balance 5,141 4,269 12,871 23,605 45,886 7,616 53,502
Total comprehensive income/(loss) for the period (a) - - 689 3,965 4,654 (6) 4,648
Currency translation arising on Rio Tinto Limited's share capital 278 - - - 278 - 278
Dividends - - - (2,006) (2,006) (159) (2,165)
Own shares purchased from Rio Tinto shareholders to satisfy share options - - (42) - (42) - (42)
Treasury shares reissued - 13 - 2 15 - 15
Change in equity held by Rio Tinto - - - 10 10 (10) -
Equity issued to holders of non-controlling interests (b) - - - - - 1,240 1,240
Employee share options and other IFRS 2 charges taken to the income statement - - 32 154 186 117 303
Closing balance 5,419 4,282 13,550 25,730 48,981 8,798 57,779
(a) Refer to Group statement of comprehensive income for further details.
(b) Equity issued to holders of non-controlling interests during 2014 included US$1.2 billion of proceeds from a rights
issue by Turquoise Hill in January 2014.
Reconciliation with Australian Accounting Standards
The Group's financial statements have been prepared in accordance with IFRS as defined on page 50, which differs in certain
respects from the version of IFRS that is applicable in Australia, referred to as Australian Accounting Standards ('AAS').
Prior to 1 January 2004, the Group's financial statements were prepared in accordance with UK GAAP. Under IFRS, goodwill on
acquisitions prior to 1998, which was eliminated directly against equity in the Group's UK GAAP financial statements, has
not been reinstated. This was permitted under the rules governing the transition to IFRS set out in IFRS 1. The equivalent
Australian Standard, AASB 1, does not provide for the netting of goodwill against equity. As a consequence, shareholders'
funds under AAS include the residue of such goodwill, which amounted to US$558 million at 30 June 2015 (31 December 2014:
US$553 million).
Save for the exception described above, the Group's financial statements drawn up in accordance with IFRS are consistent
with the requirements of AAS.
Consolidated net debt
30 June2015US$m 31 December2014US$m
Analysis of changes in consolidated net debt (a)
Opening balance (12,495) (18,055)
Adjustment on currency translation 845 1,039
Exchange losses charged to the income statement (809) (1,070)
Cash movements excluding exchange movements (1,157) 5,357
Other movements (67) 234
Closing balance (13,683) (12,495)
Total borrowings in balance sheet (b) (24,824) (25,075)
Derivatives related to net debt (included in other financial assets/liabilities) (28) 146
Equity accounted unit funded balances excluded from net debt (c) 6 11
Adjusted total borrowings (24,846) (24,918)
Cash and cash equivalents 11,163 12,423
Consolidated net debt (13,683) (12,495)
(a) Consolidated net debt is stated net of the impact of certain funding arrangements between EAUs and partially owned
subsidiaries (EAU funded balances). This adjustment is required in order to avoid showing borrowings twice in the net debt
disclosure, where funding has been provided to an EAU by the Group and subsequently lent by the EAU to a consolidated Group
subsidiary.
(b) Total borrowings are combined with other current financial liabilities of US$270 million (31 December 2014: US$20
million) and non-current financial liabilities of US$271 million (31 December 2014: US$124 million) in the balance sheet.
(c) Equity accounted units funded balances are defined as amounts owed by partially owned subsidiaries to equity accounted
units, where such funding was provided to the equity accounted unit by the Group.
Geographical analysis (by destination)
Six monthsto 30 June2015 % Six monthsto 30 June2014% Six monthsto 30 June2015US$m Six monthsto 30 June2014US$m
Gross sales revenue by destination (a)
China 36.0 37.8 6,926 9,665
United States of America 15.6 12.6 3,001 3,226
Other Asia 14.8 14.9 2,850 3,801
Japan 14.1 16.2 2,706 4,155
Other Europe (excluding United Kingdom) 9.0 8.4 1,727 2,149
Canada 3.3 2.7 644 701
Australia 2.1 2.5 403 652
United Kingdom 1.0 0.9 194 233
Other 4.1 4.0 777 988
Gross sales revenue 100.0 100.0 19,228 25,570
Share of equity accounted units' sales (1,248) (1,233)
Consolidated sales revenue 17,980 24,337
The financial information by business unit and the geographic analysis of sales by destination satisfy the disclosure
requirements of IFRS 8 'Operating Segments' for interim financial statements and also provide additional voluntary
disclosure which the Group considers is useful to the users of the financial statements.
(a) Gross sales revenue is used by the Group in monitoring business performance (refer to the financial information by
business unit on page 10). Gross sales revenue includes the sales revenue of equity accounted units (after adjusting for
sales to subsidiaries) in addition to consolidated sales. Consolidated sales revenue includes subsidiary sales to equity
accounted units which are not included in gross sales revenue.
Prima facie tax reconciliation
Six monthsto 30 June 2015US$m Six monthsto 30 June2014US$m
Profit before taxation 1,745 6,092
Deduct: share of profit after tax of equity accounted units (344) (306)
Parent companies' and subsidiaries' profit before tax 1,401 5,786
Prima facie tax payable at UK rate of 20 per cent (2014: 21 per cent) 280 1,215
Impact of items excluded from underlying earnings (a)
- Impairment charges 191 (59)
- Gains and losses on disposal of businesses (5) (118)
- Foreign exchange on intra-group balances 192 27
- Foreign exchange on excluded finance items 4 66
- Other exclusions (2) 69
Higher rate of tax on Australian underlying earnings at 30 per cent 297 630
Other tax rates applicable outside the UK and Australia on underlying earnings (8) 24
Resource depletion and other depreciation allowances (28) (94)
Research, development and other investment allowances (9) (14)
Recognition of previously unrecognised deferred tax assets (2) (51)
Unrecognised current period operating losses 31 44
Other items (b) 5 68
Total taxation charge (c) 946 1,807
(a) The impact for each item includes the effect of tax rates applicable outside the UK.
(b) Other items include various adjustments to provisions for taxation of prior periods.
(c) This tax reconciliation relates to the Group's parent companies, subsidiaries and joint operations, and excludes equity
accounted units. The Group's share of profit of equity accounted units is net of tax charges of US$211 million (30 June
2014: US$202 million).
Fair value disclosure for financial instruments
Except where stated, the information given below relates to the financial instruments of the parent companies and their
subsidiaries and joint operations, and excludes those of equity accounted units.
Fair values of financial instruments
The carrying amounts and fair values of all of the Group's financial instruments which are not carried at an amount which
approximates their fair value at 30 June 2015 and 31 December 2014 are shown in the following table. The fair values of the
Group's cash and loans to equity accounted units approximate their carrying values as a result of their short maturity or
because they carry floating rates of interest.
30 June 2015 31 December 2014
CarryingvalueUS$m FairvalueUS$m CarryingvalueUS$m FairvalueUS$m
Short term borrowings (4,152) (4,183) (2,664) (2,711)
Medium and long term borrowings (20,672) (21,828) (22,411) (23,657)
Valuation hierarchy of financial instruments carried at fair value on a recurring basis
The table below shows the financial instruments carried at fair value by valuation method at 30 June 2015:
Total Level 1 (a) (h) Level 2 (b) (h) Level 3 (c) (h) Not held at fair value
Assets
Listed and unlisted equity shares and quoted funds 166 57 61 11 37
Other investments, including loans (d) 250 114 - 55 81
Trade receivables (e) 1,696 12 - - 1,684
2,112 183 61 66 1,802
Derivatives
Forward contracts: designated as hedges (f) 14 - - 14 -
Forward contracts and option contracts, not designated as hedges (f) 267 (8) 12 263 -
Derivatives related to net debt (g) (28) - (28) - -
2,365 175 45 343 1,802
Fair value disclosure for financial instruments (continued)
The table below shows the financial instruments carried at fair value by valuation method at 31 December 2014:
Total Level 1 (a) (h) Level 2 (b) (h) Level 3 (c) (h) Not held at fair value
Assets
Listed and unlisted equity shares and quoted funds 199 56 85 12 46
Other investments, including loans (d) 287 108 - 56 123
Trade receivables (e) 2,488 12 - - 2,476
2,974 176 85 68 2,645
Derivatives
Forward contracts: designated as hedges (f) 17 - - 17 -
Forward contracts and option contracts, not designated as hedges (f) 192 (2) (3) 197 -
Derivatives related to net debt (g) 146 - 146 - -
3,329 174 228 282 2,645
(a) Valuation is based on unadjusted quoted prices in active markets for identical financial instruments. This category
includes listed equity shares and other quoted funds.
(b) Valuation is based on inputs that are observable for the financial instruments; these include quoted prices for similar
instruments or identical instruments in markets which are not considered to be active, or inputs, either directly or
indirectly based on observable market data.
(c) Valuation is based on inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
(d) Other investments, including loans, comprise: cash deposits in rehabilitation funds, government bonds and royalty
amounts receivable. The royalty receivables are valued based on an estimate of forward sales subject to the royalty
agreement.
(e) Trade receivables includes provisionally priced receivables relating to sales contracts where selling price is
determined after delivery to the customer, based on the market price at the relevant quotation point stipulated in the
contract. Revenue is recognised on provisionally priced sales based on the forward selling price for the period stipulated
in the contract.
(f) Level 3 derivatives consist of derivatives embedded in electricity purchase contracts linked to the LME with terms
expiring between 2015 and 2030. The embedded derivatives are measured using discounted cash flows and option model
valuation techniques. Long-term embedded derivatives with a fair value of US$263 million at 30 June 2015 are valued using
significant unobservable inputs as the term of the derivative extends beyond the forward curve for aluminium.
Aluminium prices are flat lined beyond the market forward curve and increased by projected inflation up to the date of
expiry of the contract.
The range of market prices is US$2,243 per metric tonne in 2025 to US$2,540 in 2030.
The other contracts with a fair value of US$14 million at 30 June 2015 are categorised as level three as the market premium
assumptions used represent unobservable inputs.
(g) Interest rate and currency interest rate swaps are valued using applicable market quoted swap yield curves adjusted for
relevant basis and credit default spreads. Currency interest rate swap valuations also use market quoted foreign exchange
rates. A discounted cash flow approach is applied to the cash flows derived from the inputs to determine fair value.
(h) There were no transfers between Level 1 and Level 2 or between Level 2 and Level 3 for the six months to 30 June 2015
or the six months to 30 June 2014.
Fair value disclosure for financial instruments (continued)
Level 3 Financial instruments
The table below shows the summary of changes in the fair value of the Group's Level 3 financial assets and financial
liabilities for the six months to 30 June 2015 and the year ended 31 December 2014.
Level 3 Financial assets and liabilities 30 June 31 December
2015 2014
Opening balance 282 461
Currency translation adjustments (26) (17)
Losses realised included in:
- Net operating costs (5) (8)
Gains unrealised included in:
- Net operating costs 81 18
Total unrealised gains or (losses) transferred to other comprehensive income 11 (5)
Additions - 8
Disposals/maturity of financial instruments - (175)
Closing balance 343 282
Total losses included in the income statement for assets and liabilities (9) (11)
Sensitivity analysis in respect of level 3 derivatives
Forward contracts and options whose carrying value are valued using unobservable inputs are calculated using appropriate
discounted cash flow and option model valuation techniques.
The most significant of these assumptions relate to long term pricing wherein internal pricing assumptions are used after
the 10 year LME curve. A 10 per cent increase in long term metal pricing assumptions would result in a US$75 million (31
December 2014: US$39 million) decrease in carrying value. A 10 per cent decrease in long term metal pricing assumptions
would result in a US$19 million (31 December 2014: US$71 million) increase in carrying value.
Acquisitions and disposals
30 June 2015
Acquisitions
There were no material acquisitions during the six months ended 30 June 2015.
Disposals
On 23 April 2015, Turquoise Hill disposed of 25.7 per cent of its interest in SouthGobi Resources to Novel Sunrise
Investments.
On 17 June 2015, Rio Tinto disposed of its 77.8 per cent interest in Murowa Diamonds and 50 per cent interest in Sengwa
Colliery Ltd (Sengwa) to RZ Murowa Holdings Limited.
Acquisitions and disposals (continued)
30 June 2014
Acquisitions
There were no material acquisitions during the six months ended 30 June 2014.
Disposals
On 29 May 2014, Rio Tinto completed the sale of its 50.1 per cent interest in the Clermont Joint Venture to GS Coal for
US$1,015 million subject to finalisation of net debt and working capital adjustments.
Other disclosures
Capital commitments at 30 June 2015
Capital commitments, excluding the Group's share of joint venture capital commitments, were US$1,277 million (31 December
2014: US$1,987 million).
The Group's share of joint venture capital commitments was US$649 million (31 December 2014: US$1,113 million).
For Minera Escondida Limitada and Sohar Aluminium Company L.L.C., the Group, along with the other joint venturers, has made
various commitments to provide shareholder funding as required, subject to approved thresholds. In particular, Minera
Escondida Limitada holds a shareholder line of credit for US$225 million (Rio Tinto share) which is currently undrawn. This
line of credit was also available in 2014.
The Group has a commitment to purchase and market a portion (which may be different to the Group's ownership interest) of
the output of Sohar Aluminium Company L.L.C., an aluminium smelter in which the Group is a joint venturer. The Group
subsequently sells the purchased products to third parties.
Contingent liabilities (subsidiaries and joint operations)
Contingent liabilities, indemnities and other performance guarantees were US$256 million at 30 June 2015 (31 December 2014:
US$239 million).
Indemnities and other performance guarantees represent the potential outflow of funds from the Group for the satisfaction
of obligations including those under contractual arrangements (for example undertakings related to rehabilitation
activities and supplier agreements) not provided for in the balance sheet, where the likelihood of the guarantees or
indemnities being called is assessed as possible rather than probable or remote. There were no material contingent
liabilities arising in relation to the Group's joint ventures and associates.
There are a number of legal claims currently outstanding against the Group. No material loss to the Group is expected to
result from these claims.
Other disclosures (continued)
Contingent assets
The Group has various insurance claims outstanding with reinsurers including claims relating to the Manefay slide at Rio
Tinto Kennecott in April 2013. An interim progress payment was received on this claim in 2013. Further receipts are
considered probable but the amount cannot currently be reliably estimated.
Related party matters
Purchases relate largely to amounts charged by equity accounted units for toll processing of alumina and purchases of
bauxite and aluminium. Sales relate largely to charges for supply of coal to jointly controlled marketing entities for
onward sale to third party customers. Details of the Group's principal equity accounted units are given in the 2014 Annual
report.
Income statement items Six monthsto 30 June2015US$m Six monthsto 30 June2014US$m
Purchases from equity accounted units (615) (1,051)
Sales to equity accounted units 121 422
Cash flow statement items
Dividends from equity accounted units 181 42
Net funding of equity accounted units (a) 11 (84)
Balance sheet items 30 June2015US$m 31 December2014US$m
Investments in equity accounted units 5,025 4,868
Loans to equity accounted units 52 71
Loans from equity accounted units (60) (52)
Trade and other receivables: amounts due from equity accounted units 351 423
Trade and other payables: amounts due to equity accounted units (208) (225)
(a) Repayments of loans by equity accounted units exceeded the funding provided by Rio Tinto in the period.
Rio Tinto plc guarantees to pay the Rio Tinto Pension Fund (UK) any contributions due from Group companies participating in
that fund, pro rata to its ownership of those companies and subject to certain conditions, in the event that the companies
fail to meet their contribution requirements. Furthermore, Rio Tinto plc has in place a guarantee for the Rio Tinto Pension
Fund, in the standard form required by the Pension Protection Fund ('PPF'), to cover 105 per cent of the Fund's liabilities
measured on the PPF's prescribed assumptions. Other similar guarantees in place include a
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