Anglo American Annual Report 2012

4. OPERATING PROFIT AND UNDERLYING EARNINGS BY SEGMENTThe following table analyses operating profit (including attributable share of associates’ operating profit) by segment and reconciles it to underlying earningsby segment. In 2012 Amapá has been reclassified from the Iron Ore and Manganese segment to the Other Mining and Industrial segment to align with internalmanagement reporting. Comparatives have been reclassified to align with current presentation.Underlying earnings is an alternative earnings measure, which the directors consider to be a useful additional measure of the Group’s performance.Underlying earnings is profit for the financial year attributable to equity shareholders of the Company before special items and remeasurements and istherefore presented after net finance costs, income tax expense and non-controlling interests. For a reconciliation from ‘(Loss)/profit for the financial yearattributable to equity shareholders of the Company’ to ‘Underlying earnings for the financial year’, see note 13.US$ millionOperatingprofit/(loss)before specialitems andremeasurements(1)Operatingspecialitems andremeasurements(note 5)Operatingprofit/(loss)after specialitems andremeasurementsNet financecosts, incometax expenseand noncontrollinginterestsUnderlyingearnings2012 2011Operatingprofit/(loss)before specialitems andremeasurements(1)Operatingspecialitems andremeasurements(note 5)Operatingprofit/(loss)after specialitems andremeasurementsNet financecosts, incometax expenseand noncontrollinginterestsUnderlyingearningsIron Ore andManganese 2,949 5,139 (2,190) (1,912) 1,037 4,400 79 4,321 (2,943) 1,457Metallurgical Coal 405 365 40 (130) 275 1,189 – 1,189 (345) 844Thermal Coal 793 (1) 794 (270) 523 1,230 (1) 1,231 (328) 902Copper 1,687 (9) 1,696 (779) 908 2,461 1 2,460 (851) 1,610Nickel 26 184 (158) (15) 11 57 72 (15) (34) 23Platinum (120) 921 (1,041) (105) (225) 890 6 884 (480) 410Diamonds 496 456 40 (184) 312 659 18 641 (216) 443Other Mining andIndustrial 337 28 309 (108) 229 315 70 245 (140) 175Exploration (206) – (206) 11 (195) (121) – (121) 3 (118)Corporate Activitiesand Unallocated Costs (203) 68 (271) 167 (36) 15 2 13 359 374Total 6,164 7,151 (987) (3,325) 2,839 11,095 247 10,848 (4,975) 6,120Analysed as:Core operations 5,996 7,127 (1,131) (3,278) 2,718 10,964 177 10,787 (4,910) 6,054Non-coreoperations (2) 168 24 144 (47) 121 131 70 61 (65) 66(1)Operating profit/(loss) before special items and remeasurements includes attributable share of associates’ operating profit before special items and remeasurements which is reconciled to‘Share of net income from associates’ in note 2.(2)Non-core operations relate to Amapá, Tarmac and, until November 2012, Scaw South Africa.Underlying earnings by originUS$ million 2012 2011South Africa 1,449 2,726Other Africa 357 326South America 1,359 2,080North America (198) 218Australia and Asia 336 967Europe (464) (197)2,839 6,120Financial statements5. SPECIAL ITEMS AND REMEASUREMENTSSpecial items are those items of financial performance that the Group believes should be separately disclosed on the face of the income statement to assistin the understanding of the underlying financial performance achieved by the Group. Such items are material by nature or amount to the year’s results andrequire separate disclosure in accordance with IAS 1 paragraph 97. Special items that relate to the operating performance of the Group are classified asoperating special items and principally include impairment charges. Non-operating special items include profits and losses on disposals of investments andbusinesses as well as certain adjustments relating to business combinations.Remeasurements comprise other items which the Group believes should be reported separately to aid an understanding of the underlying financialperformance of the Group. This category includes:• Unrealised gains and losses on ‘non-hedge’ derivative instruments open at the year end (in respect of future transactions) and the reversal of the historicalmarked to market value of such instruments settled in the year. Where the underlying transaction is recorded in the income statement, the realised gains orlosses are recorded in underlying earnings in the same year as the underlying transaction for which such instruments provide an economic, but not formallydesignated, hedge. If the underlying transaction is recorded in the balance sheet, for example, capital expenditure, the realised amount remains inremeasurements on settlement of the derivative. Such amounts are classified in the income statement as operating when the underlying exposure is inrespect of the operating performance of the Group and otherwise as financing.• Foreign exchange impacts arising in US dollar functional currency entities where tax calculations are generated based on local currency financial informationand hence deferred tax is susceptible to currency fluctuations. Such amounts are included within income tax expense.• The remeasurement and subsequent depreciation of a previously held equity interest as a result of a business combination.Anglo American plc Annual Report 2012 153