Anglo American Annual Report 2012

FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS3. OPERATING (LOSS)/PROFIT FROM SUBSIDIARIES AND JOINT VENTURESUS$ million 2012 2011Group revenue 28,761 30,580Cost of sales (1) (25,993) (17,343)Gross profit 2,768 13,237Selling and distribution costs (2,031) (1,788)Administrative expenses (2,127) (2,034)Other gains and losses (see below) (92) 145Exploration expenditure (see note 7) (206) (121)Operating (loss)/profit from subsidiaries and joint ventures (1,688) 9,439(1)Includes operating special item charges of $6,977 million (2011: $164 million), see note 5. Operating remeasurements are included in ‘Other gains and losses’, see below.US$ million 2012 2011Operating (loss)/profit is stated after charging/(crediting):Depreciation of property, plant and equipment (see note 15) (1) 2,258 1,947Amortisation of intangible assets (see note 14) (2) 31 20Rentals under operating leases 182 128Project evaluation expenditure 525 418Research and development expenditure 80 38Operating special items (see note 5) 6,977 164Employee costs (see note 8) 5,033 4,707Adjustment due to provisional pricing (3) (14) 286Royalties (4) 554 742Other gains and losses comprise:Operating remeasurements (see note 5) (116) (65)Other fair value gains/(losses) on derivatives – realised 9 (57)Foreign exchange gains on other monetary items 12 256Fair value gains on biological assets 3 11Total other gains and losses (92) 145(1)In addition $70 million (2011: $84 million) of accelerated depreciation and $35 million (2011: nil) of depreciation arising due to the fair value uplift of the Group’s pre-existing 45% shareholding inDe Beers have been recorded within operating special items and remeasurements (see note 5) and $81 million (2011: $39 million) of pre-commercial production depreciation has been capitalised.(2)In addition $6 million of amortisation arising due to the fair value uplift of the Group’s pre-existing 45% shareholding in De Beers has been included within operating remeasurements.(3)Provisionally priced contracts resulted in a total (realised and unrealised) gain in revenue of $37 million (2011: loss of $283 million) and total (realised and unrealised) loss in operating costsof $23 million (2011: $3 million).(4)Excludes those royalties which meet the definition of income tax on profit and accordingly have been accounted for as taxes.Auditor remunerationPaid/payableto auditor (ifPaid/payable to Deloitte not Deloitte)UnitedKingdom Overseas Total Overseas2012 2011Paid/payableto auditor (ifPaid/payable to Deloitte not Deloitte)UnitedKingdom Overseas Total OverseasUS$ millionPaid to the Company’s auditor for auditof the Anglo American plc Annual Report 2.2 4.8 7.0 0.1 1.7 4.3 6.0 0.1Paid to the Company’s auditor for otherservices to the GroupAudit of the Company’s subsidiaries 1.1 4.8 5.9 1.1 0.7 3.2 3.9 0.6Total audit fees 3.3 9.6 12.9 1.2 2.4 7.5 9.9 0.7Audit related assurance services (1) 0.8 1.0 1.8 – 0.5 0.8 1.3 0.1Taxation compliance services – 0.2 0.2 0.3 – 0.1 0.1 0.1Taxation advisory services 0.2 0.2 0.4 0.1 0.4 0.3 0.7 0.2Other assurance services (2) 0.4 1.3 1.7 0.6 0.2 1.4 1.6 0.5Total non-audit fees 1.4 2.7 4.1 1.0 1.1 2.6 3.7 0.9(1)Includes $1.3 million (2011: $1.3 million) for the interim review.(2)Includes $0.1 million (2011: $0.1 million) for the audit of Group pension plans.152 Anglo American plc Annual Report 2012