REG - Rio Tinto - Rio Tinto 2016 half year results <Origin Href="QuoteRef">RIO.L</Origin> - Part 3
03/08/2016 07:35
- Part 3: For the preceding part double click ID:nRSC0884Gb
2013, mine operations have focused on remediation from the slide and the east wall of Bingham Canyon, including significant de-weighting and de-watering activities. These activities are continuing in 2016.
Investment to extend mine life at Rio Tinto Kennecott, US beyond 2019. $0.6bn $0.5bn Funding for the continuation of open pit mining via the push back of the south wall has been approved and will largely consist of simple mine stripping activities.
Development of A21 pipe at the Diavik Diamond Mine in Canada (Rio Tinto 60%). Rio Tinto's share of capex is $210m. $0.35bn $0.23bn Approved in November 2014, the development of the A21 pipe is expected to ensure the continuation of existing production levels. First carats are planned for late 2018.
Development of the Oyu Tolgoi underground mine in Mongolia (Rio Tinto 34%), where average copper grades of 1.66 per cent, are more than three times higher than the open pit. $5.3bn $5.2bn Approved in May 2015, first production from the underground is expected in 2020. Project activities have commenced, with the EPCM agreement awarded and mobilisation in progress.
$0.35bn
$0.23bn
Approved in November 2014, the development of the A21 pipe is expected to ensure the continuation of existing production
levels. First carats are planned for late 2018.
Development of the Oyu Tolgoi underground mine in Mongolia (Rio Tinto 34%), where average copper grades of 1.66 per cent,
are more than three times higher than the open pit.
$5.3bn
$5.2bn
Approved in May 2015, first production from the underground is expected in 2020. Project activities have commenced, with
the EPCM agreement awarded and mobilisation in progress.
Project (Rio Tinto 100% owned unless otherwise stated) Total approvedcapital cost(100%) Approved capital remaining to be spent from 1 July 2016 Status/Milestones
Aluminium
Investment in the Amrun bauxite mine on the Cape York Peninsula in north Queensland with a planned initial output of 22.8 million tonnes a year.1 $1.9bn $1.8bn Approved in December 2015, output includes an expected 10 million tonne increase in annual exports with production commencing in the first half of 2019.
Iron ore
Investment in Nammuldi Incremental Tonnes (NIT) projects in the Pilbara, to maintain the Pilbara blend. $0.2bn $0.1bn NIT1, with a five million tonne annual capacity, commenced production in the fourth quarter of 2015. NIT2, which will take annual mine capacity from five to ten million tonnes, is expected to come onstream in the fourth quarter of 2016.
Development of the Silvergrass iron ore mine in the Pilbara, to maintain the Pilbara blend. $0.3bn $0.3bn The incremental $338m approval in August 2016 will add 10 million tonnes2 of annual capacity with commissioning in the fourth quarter of 2017.
Development of the Silvergrass iron ore mine in the Pilbara, to maintain the Pilbara blend.
$0.3bn
$0.3bn
The incremental $338m approval in August 2016 will add 10 million tonnes2 of annual capacity with commissioning in the
fourth quarter of 2017.
1 Refer to the statements related to this production target on page 2.
2 Refer to the statements related to this production target on page 15.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and New York
Stock Exchange listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.
Rio Tinto's business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds,
gold, industrial minerals (borates, titanium dioxide and salt), iron ore, thermal and metallurgical coal and uranium.
Activities span the world and are strongly represented in Australia and North America, with significant businesses in Asia,
Europe, Africa and South America.
Forward-looking statements
This announcement includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical facts included in this announcement, including, without
limitation, those regarding Rio Tinto's financial position, business strategy, plans and objectives of management for
future operations (including development plans and objectives relating to Rio Tinto's products, production forecasts and
reserve and resource positions), are forward-looking statements. The words "intend", "aim", "project", "anticipate",
"estimate", "plan", "believes", "expects", "may", "should", "will", "target", "set to" or similar expressions, commonly
identify such forward-looking statements.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Rio Tinto, or industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are
based on numerous assumptions regarding Rio Tinto's present and future business strategies and the environment in which Rio
Tinto will operate in the future. Among the important factors that could cause Rio Tinto's actual results, performance or
achievements to differ materially from those in the forward-looking statements are levels of actual production during any
period, levels of demand and market prices, the ability to produce and transport products profitably, the impact of foreign
currency exchange rates on market prices and operating costs, operational problems, political uncertainty and economic
conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as
changes in taxation or regulation and such other risk factors identified in Rio Tinto's most recent Annual Report and
Accounts in Australia and the United Kingdom and the most recent Annual Report on Form 20-F filed with the United States
Securities and Exchange Commission (the "SEC") or Form 6-Ks furnished to, or filed with, the SEC. Forward-looking
statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on
forward-looking statements. These forward-looking statements speak only as of the date of this announcement. Rio Tinto
expressly disclaims any obligation or undertaking (except as required by applicable law, the UK Listing Rules, the
Disclosure and Transparency Rules of the Financial Conduct Authority and the Listing Rules of the Australian Securities
Exchange) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any
change in Rio Tinto's expectations with regard thereto or any change in events, conditions or circumstances on which any
such statement is based.
Nothing in this announcement should be interpreted to mean that future earnings per share of Rio Tinto plc or Rio Tinto
Limited will necessarily match or exceed its historical published earnings per share.
Contacts
media.enquiries@riotinto.com
www.riotinto.com
Follow @riotinto on Twitter
Media Relations, EMEA/AmericasIlltud HarriT +44 20 7781 1152M +44 7920 503 600 David OuthwaiteT +44 20 7781 1623M +44 7787 597 493 David Luff Media Relations, Australia/AsiaBen MitchellT +61 3 9283 3620M +61 419 850 212 Bruce TobinT +61 3 9283 3612M +61 419 103 454 Matt KlarT + 61 7 3625 4244
T + 44 20 7781 1177 M + 61 457 525 578 Investor Relations, Australia/AsiaNatalie WorleyT +61 3 9283 3063M +61 409 210 462 Rachel StorrsT +61 3 9283 3628M +61 417 401 018 Galina RogovaT +86 21 6103 3550M +86 152 2118 3942
M + 44 7780 226 422 Investor Relations, EMEA/AmericasJohn SmeltT +44 20 7781 1654M +44 7879 642 675 David OvingtonT +44 20 7781 2051M +44 7920 010 978 Grant DonaldT +44 20 7781 1262M +44 7920 587 805
Rio Tinto plc6 St James's SquareLondon SW1Y 4ADUnited Kingdom T +44 20 7781 2000 Rio Tinto Limited120 Collins StreetMelbourne 3000Australia T +61 3 9283 3333Registered in AustraliaABN 96 004 458 404
Registered in England No. 719885
Rio Tinto plc
6 St James's SquareLondon SW1Y 4ADUnited Kingdom T +44 20 7781 2000
Registered in England No. 719885
Rio Tinto Limited
120 Collins StreetMelbourne 3000Australia T +61 3 9283 3333Registered in AustraliaABN 96 004 458 404
Group income statement
Six monthsto 30 June2016US$m Six monthsto 30 June2015US$m
Continuing operations
Consolidated sales revenue 15,500 17,980
Net operating costs (excluding items shown separately) (13,478) (14,007)
Impairment charges(a) (9) (439)
Net gains on disposal of interests in businesses(b) 331 23
Exploration and evaluation costs (267) (243)
Profit relating to interests in undeveloped projects 7 4
Operating profit 2,084 3,318
Share of profit after tax of equity accounted units 179 344
Profit before finance items and taxation 2,263 3,662
Finance items
Net exchange gains/(losses) on external debt and intragroup balances 531 (1,410)
Net gains/(losses) on derivatives not qualifying for hedge accounting 7 (23)
Finance income 36 25
Finance costs(c),(d) (576) (318)
Amortisation of discount (163) (191)
(165) (1,917)
Profit before taxation 2,098 1,745
Taxation (357) (946)
Profit for the period 1,741 799
- attributable to owners of Rio Tinto 1,713 806
- attributable to non-controlling interests (net earnings/(losses)) 28 (7)
Basic earnings per share from continuing operations(e) 95.3c 43.8c
Diluted earnings per share from continuing operations(e) 94.9c 43.5c
(a) The impairment charge for the period to 30 June 2015 included impairment at Energy Resources of Australia, Carbone
Savoie and other businesses in the Aluminium portfolio.
(b) For the period to 30 June 2016, a pre-tax gain of US$410 million was recognised by Rio Tinto on the sale of its 40 per
cent interest in the Bengalla Joint Venture on 1 March 2016. This was partially offset by a loss on disposal of the 100 per
cent interest in Carbone Savoie on 31 March 2016.
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 to RZ Murowa Holdings Limited on 17 June 2015.
(c)
Group income statement (continued)
(c) Finance costs in the income statement include hedging adjustments and are net of amounts capitalised of US$35 million
(30 June 2015: US$171 million).
(d) Rio Tinto completed two bond buyback programmes during April 2016 and June 2016 for US$1.5 billion and US$3 billion
(nominal values) respectively. The early redemption of these bonds accelerated the recognition of future interest payments
associated with them. Included in finance costs is a net charge of US$175 million attributable to early redemption of
bonds.
There was no early redemption of bonds completed for the six months ended 30 June 2015.
(e) For the purpose of calculating basic earnings per share, the weighted average number of Rio Tinto plc and Rio Tinto
Limited shares outstanding during the period was 1,797.1 million (30 June 2015: 1,838.9 million), being the average number
of Rio Tinto plc shares outstanding of 1,373.5 million (30 June 2015: 1,409.3 million), plus the average number of Rio
Tinto Limited shares outstanding of 423.6 million (30 June 2015: 429.6 million). The profit figures used in the calculation
of basic and diluted earnings per share are the profits attributable to owners of Rio Tinto.
For the purpose of calculating diluted earnings per share, the effect of dilutive securities is added to the weighted
average number of shares. This effect is calculated under the treasury stock method.
Group statement of comprehensive income
Six monthsto 30 June2016US$m Six monthsto 30 June2015US$m
Profit after tax for the period 1,741 799
Other comprehensive (loss)/income:
Items that will not be reclassified to profit or loss:
Actuarial (losses)/gains on post-retirement benefit plans (885) 386
Tax relating to actuarial (losses)/gains on post-retirement benefit plans 232 (122)
(653) 264
Items that have been/may be reclassified subsequently to profit or loss:
Currency translation adjustment(a) 762 (1,266)
Currency translation on companies disposed of, transferred to the income statement 48 (11)
Fair value movements:
- Cash flow hedge (losses)/gains (78) 12
- Cash flow hedge losses/(gains) transferred to the income statement 58 (9)
- Gains/(losses) on revaluation of available for sale securities 2 (14)
- Losses on revaluation of available for sale securities transferred to the income statement 2 9
Share of other comprehensive income/(loss) of equity accounted units net of tax 22 (29)
Tax relating to these components of other comprehensive income 3 (2)
Other comprehensive income/(loss) for the period, net of tax 166 (1,046)
Total comprehensive income/(loss) for the period 1,907 (247)
- attributable to owners of Rio Tinto 1,801 (36)
- attributable to non-controlling interests 106 (211)
(a) Excludes a currency translation gain of US$77 million (30 June 2015: charge of US$283 million) arising on Rio Tinto
Limited's share capital for the period ended 30 June 2016, which is recognised in the Group statement of changes in equity.
Refer to Group statement of changes in equity on page 41.
Group cash flow statement
Six monthsto 30 June2016US$m Six monthsto 30 June2015US$m
Cash flows from consolidated operations(a) 4,551 6,012
Dividends from equity accounted units 22 181
Cash flows from operations 4,573 6,193
Net interest paid(b) (685) (401)
Dividends paid to holders of non-controlling interests in subsidiaries (103) (148)
Tax paid (545) (1,209)
Net cash generated from operating activities 3,240 4,435
Cash flows from investing activities
Purchase of property, plant & equipment and intangible assets(c) (1,318) (2,474)
Disposals of subsidiaries, joint arrangements & associates(d) 556 9
Sales of financial assets 27 28
Purchases of financial assets (12) (13)
Net funding of equity accounted units (5) 11
Other investing cash flows(e) 115 21
Net cash used in investing activities (637) (2,418)
Cash flows before financing activities 2,603 2,017
Cash flows from financing activities
Equity dividends paid to owners of Rio Tinto (1,916) (2,162)
Proceeds from additional borrowings 4,366 1,295
Repayment of borrowings(b) (6,280) (1,337)
Proceeds from issue of equity to non-controlling interests 69 45
Own shares purchased from owners of Rio Tinto - (1,021)
Other financing cash flows 37 13
Net cash flow used in financing activities (3,724) (3,167)
Effects of exchange rates on cash and cash equivalents 1 (90)
Net decrease in cash and cash equivalents (1,120) (1,240)
Opening cash and cash equivalents less overdrafts 9,354 12,400
Closing cash and cash equivalents less overdrafts(f) 8,234 11,160
Group cash flow statement (continued)
Six monthsto 30 June2016US$m Six monthsto 30 June2015US$m
(a) Cash flows from consolidated operations
Profit from continuing operations 1,741 799
Adjustments for:
- Taxation 357 946
- Finance items 165 1,917
- Share of profit after tax of equity accounted units (179) (344)
- Net gain on disposal and consolidation of interests in businesses (331) (23)
- Impairment charges(g) 9 439
- Depreciation and amortisation 2,283 2,307
- Provisions (including exchange differences on provisions) 887 477
Utilisation of provisions (286) (227)
Utilisation of provision for post-retirement benefits (148) (117)
Change in inventories 119 129
Change in trade and other receivables 478 870
Change in trade and other payables (637) (969)
Other items 93 (192)
4,551 6,012
(b) During April 2016 and June 2016, Rio Tinto completed two bond buyback programmes for $1.5 billion and $3 billion
(nominal values) respectively. Net interest paid includes US$266 million being the payment of the premiums and the
accelerated interest associated with these bond redemptions.
There was no early redemption of bonds completed for the six months ended 30 June 2015.
(c) Capital expenditure includes US$126 million (30 June 2015: US$189 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.
(d) Disposal proceeds in the six months to 30 June 2016 mainly relate to Rio Tinto's disposal of its 40 per cent interest
in the Bengalla Joint Venture for US$617 million.
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.
(e) Other investing cash flows includes US$82 million related to the sale of office buildings.
Group cash flow statement (continued)
(f) Closing cash and cash equivalents less overdrafts for the purposes of the cash flow statement differs from cash and
cash equivalents on the Group balance sheet as per the following reconciliation:
30 June2016US$m 31 December2015US$m 30 June 2015US$m
Cash and cash equivalents per Group balance sheet 8,250 9,366 11,163
Bank overdrafts (reported within 'borrowings and other financial liabilities') (16) (12) (35)
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 8,234 9,354 11,160
(g) This includes impairment charges and reversals of cash generating units consistent with the disclosure in the Group
income statement.
Group balance sheet
30 June2016US$m 31 December2015US$m
Non-current assets
Goodwill 922 892
Intangible assets 3,427 3,336
Property, plant and equipment 60,967 61,057
Investments in equity accounted units 5,056 4,941
Inventories 148 253
Deferred tax assets 3,493 3,309
Trade and other receivables 1,303 1,356
Tax recoverable 55 78
Other financial assets (including loans to equity accounted units) 1,164 788
76,535 76,010
Current assets
Inventories 3,129 3,168
Trade and other receivables 2,053 2,386
Tax recoverable 18 118
Other financial assets (including loans to equity accounted units) 134 223
Cash and cash equivalents 8,250 9,366
13,584 15,261
Assets of disposal groups held for sale(a) 269 293
Total assets 90,388 91,564
Current liabilities
Borrowings and other financial liabilities (1,068) (2,484)
Trade and other payables (5,557) (6,237)
Tax payable (187) (135)
Provisions including post-retirement benefits (1,243) (1,190)
(8,055) (10,046)
Non-current liabilities
Borrowings and other financial liabilities (20,799) (21,140)
Trade and other payables (812) (682)
Tax payable (282) (295)
Deferred tax liabilities (2,961) (3,286)
Provisions including post-retirement benefits(b) (13,379) (11,876)
(38,233) (37,279)
Liabilities of disposal groups held for sale(a) (40) (111)
Total liabilities (46,328) (47,436)
Net assets 44,060 44,128
Capital and reserves
Share capital(c)
- Rio Tinto plc 224 224
- Rio Tinto Limited 4,027 3,950
Share premium account 4,304 4,300
Other reserves 9,998 9,139
Retained earnings 18,940 19,736
Equity attributable to owners of Rio Tinto 37,493 37,349
Attributable to non-controlling interests 6,567 6,779
Total equity 44,060 44,128
Group balance sheet (continued)
(a) Assets and liabilities held for sale at 30 June 2016 comprise Rio Tinto's interests in the Blair Athol coal project,
Mount Pleasant, and certain separate assets at Rio Tinto Kennecott. Carbone Savoie and Bengalla were disposed of during
the period.
Assets and liabilities held for sale at 31 December 2015 comprised Rio Tinto's interests in the Blair Athol coal project,
Carbone Savoie, Bengalla and Molybdenum Autoclave Process assets.
(b) A review of the infrastructure capacity requirements in Queensland, Australia, has confirmed that it is no longer
likely that Rio Tinto will utilise the Abbot Point Coal Terminal and associated rail capacity contracted under take or pay
arrangements. Accordingly, an onerous contract provision has been recognised based on the net present value of expected
future cash flows discounted at a post-tax real rate of two per cent, resulting in a pre-tax onerous contract charge of
US$709 million. The increase to the onerous contract provisions has been taken through net operating costs in the income
statement and is excluded from underlying earnings. Refer to Reconciliation of net earnings to underlying earnings on page
61.
(c) At 30 June 2016, Rio Tinto plc had 1,374.6 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. No shares in Rio Tinto Limited were held by Rio Tinto plc
at 30 Jun 2016 (31 December 2015: nil). As required to be disclosed under the ASX Listing Rules, the net tangible assets
per share amounted to US$18.43 (31 December 2015: US$18.42).
Group statement of changes in equity
Period ended
30 June 2016
Attributable to owners of Rio Tinto
Share capital Share Other Retained Total Non-controlling Total
US$m premium reserves earnings US$m interests equity
US$m US$m US$m US$m US$m
Opening balance 4,174 4,300 9,139 19,736 37,349 6,779 44,128
Total comprehensive income for the period(a) - - 728 1,073 1,801 106 1,907
Currency translation arising on
Rio Tinto Limited's share capital 77 - - - 77 - 77
Dividends - - - (1,916) (1,916) (96) (2,012)
Own shares purchased from Rio Tinto shareholders to satisfy share options(b) - - (6) (5) (11) - (11)
Treasury shares reissued and other movements - 4 - - 4 - 4
Change in equity held by Rio Tinto(c) - - 107 18 125 (291) (166)
Equity issued to holders of non-
controlling interests - - - - - 69 69
Employee share options and other IFRS 2 charges taken to the income statement - - 30 34 64 - 64
Closing balance 4,251 4,304 9,998 18,940 37,493 6,567 44,060
Six monthsto 30 June2016US$ Six monthsto 30 June2015US$
Dividends per share: paid during the period 107.5c 119.0c
Dividends per share: proposed in the announcement of the results for the period 45.0c 107.5c
(a) Refer to Group statement of comprehensive income for further details.
(b) Net of contributions received from employees for share options.
(c) The restructure of Coal & Allied Industries Limited completed on 3 February 2016. The restructure involved the
exchange of a 32.4 per cent interest in Hunter Valley Operations mine for an additional 20 per cent shareholding in Coal &
Allied Industries Limited, increasing Rio Tinto's shareholding of Coal & Allied Industries Limited from 80 per cent to 100
per cent.
(d)
Group statement of changes in equity (continued)
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
(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.
Reconciliation with Australian Accounting Standards
The Group's financial statements have been prepared in accordance with IFRS as defined on page 54, 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$562 million at 30 June 2016 (31 December 2015:
US$560 million).
Save for the exception described above, the Group's financial statements drawn up in accordance with IFRS are consistent
with the requirements of AAS.
Consolidated net debt
30 June2016US$m 31 December2015US$m
Analysis of changes in consolidated net debt(a)
Opening balance (13,783) (12,495)
Adjustment on currency translation (302) 1,586
Exchange gains/(losses) charged to the income statement 348 (1,630)
Cash movements excluding exchange movements 731 (1,109)
Other movements 102 (135)
Closing balance (12,904) (13,783)
Total borrowings in balance sheet(b) (21,344) (23,063)
Derivatives related to net debt (included in other financial assets/liabilities) 190 (86)
Adjusted total borrowings (21,154) (23,149)
Cash and cash equivalents 8,250 9,366
Consolidated net debt (12,904) (13,783)
(a) Consolidated net debt is stated net of the impact of certain funding arrangements between equity accounted units
(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 on
lent by the EAU to a consolidated Group subsidiary.
(b) Total borrowings are combined with other current financial liabilities of US$214 million (31 December 2015: US$231
million) and non-current financial liabilities of US$309 million (31 December 2015: US$330 million) in the balance sheet.
Geographical analysis (by destination)
Six monthsto 30 June2016 % Six monthsto 30 June2015(b)% Six monthsto 30 June2016US$m Six monthsto 30 June2015(b)US$m
Consolidated sales revenue by destination(a)
China 42.2 36.3 6,563 6,534
Other Asia 15.3 14.4 2,371 2,584
United States of America 14.1 15.8 2,187 2,842
Japan 10.2 14.1 1,578 2,532
Europe (excluding UK) 7.6 8.4 1,174 1,512
Canada 4.5 4.4 693 790
Australia 2.1 2.0 318 351
UK 1.0 1.1 153 194
Other 3.0 3.5 463 641
Consolidated sales revenue 100.0 100.0 15,500 17,980
The financial information by business unit and the geographic analysis of sales by destination satisfy the disclosure
requirements of IFRS 8 'Operating Segments' for interim financial statements and also provide additional voluntary
disclosure which the Group considers is useful to the users of the financial statements.
(a) Consolidated sales revenue by geographical destination is based on the ultimate country of destination of the product,
if known. If the eventual destination of the product sold through traders is not known then revenue is allocated to the
location of the product at the time when the risks and rewards of ownership are transferred. Rio Tinto is domiciled in both
the UK and Australia.
(b) 2015 comparative figures have been adjusted to conform to the 2016 presentation of consolidated sales revenue.
Prima facie tax reconciliation
Six monthsto 30 June 2016US$m Six monthsto 30 June2015US$m
Profit before taxation 2,098 1,745
Deduct: share of profit after tax of equity accounted units (179) (344)
Parent companies' and subsidiaries' profit before tax 1,919 1,401
Prima facie tax payable at UK rate of 20 per cent (2015: 20 per cent) 384 280
Higher rate of tax on Australian underlying earnings at 30 per cent 189 297
Impact of items excluded from underlying earnings(a)
- Impairment charges - 191
- Gains and losses on disposal of businesses 72 (5)
- Foreign exchange on excluded finance items (92) 196
- Onerous port and rail contracts (71) -
- Other exclusions (29) (2)
Impact of changes in tax rates and laws 12 -
Other tax rates applicable outside the UK and Australia on underlying earnings (146) (8)
Resource depletion and other depreciation allowances (9) (28)
Research, development and other investment allowances (7) (9)
Recognition of previously unrecognised deferred tax assets (3) (2)
Unrecognised current period operating losses 31 31
Other items(b) 26 5
Total taxation charge(c) 357 946
(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$111 million (30
June 2015: US$211 million).
Fair value disclosure for financial instruments
Except where stated, the information given below relates to the financial instruments of the parent companies and their
subsidiaries and joint operations, and excludes those of equity accounted units.
Fair values of financial instruments
The carrying amounts and fair values of all of the Group's financial instruments which are not carried at an amount which
approximates their fair value at 30 June 2016 and 31 December 2015 are shown in the following table. The fair values of the
Group's cash and loans to equity accounted units approximate their carrying values as a result of their short maturity or
because they carry floating rates of interest.
30 June 2016 31 December 2015
CarryingvalueUS$m FairvalueUS$m CarryingvalueUS$m FairvalueUS$m
Short term borrowings (854) (859) (2,253) (2,255)
Medium and long term borrowings (20,490) (21,467) (20,810) (20,302)
Valuation hierarchy of financial instruments carried at fair value on a recurring basis
The table below shows the financial instruments carried at fair value by valuation method at 30 June 2016:
Total Level 1 (a) (h) Level 2 (b) (h) Level 3 (c) (h) Not held at fair value
US$m US$m US$m US$m US$m
Assets
Equity shares and quoted funds 159
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