Anglo American Annual Report 2012

31. CONSOLIDATED CASH FLOW ANALYSISa) Reconciliation of (loss)/profit before tax to cash flows from operationsUS$ million 2012 2011(Loss)/profit before tax (239) 10,782Depreciation and amortisation 2,289 1,967Share-based payment charges 233 254Non-operating special items and remeasurements (1,394) (183)Operating and financing remeasurements 205 (138)Non-cash element of operating special items 6,913 105Net finance costs before remeasurements 288 20Share of net income from associates (432) (977)Provisions (127) 6Increase in inventories (330) (352)Increase in operating receivables (31) (264)(Decrease)/increase in operating payables (166) 457Deferred stripping (148) (171)Other adjustments (40) (8)Cash flows from operations 7,021 11,498b) Reconciliation to the balance sheetCash and cash equivalentsShort term borrowingsMedium andlong term borrowingsUS$ million 2012 2011 2012 2011 2012 2011Balance sheet 9,094 11,732 (2,604) (1,018) (15,150) (11,855)Balance sheet – disposal groups (1) 227 – (14) – – –Bank overdrafts (9) – 9 – – –Net debt classifications 9,312 11,732 (2,609) (1,018) (15,150) (11,855)(1)Disposal group balances are shown within ‘Assets classified as held for sale’ and ‘Liabilities directly associated with assets classified as held for sale’ on the balance sheet.c) Movement in net debtCashand cashequivalents (1)Debt duewithinone yearDebt dueafterone yearNet debtNet debthedges Hedges (2) hedgesexcludingincludingUS$ millionBalance at 1 January 2011 6,460 (1,535) (11,904) (6,979) (405) (7,384)Cash flow 5,983 1,261 (964) 6,280 (226) 6,054Unwinding of discount on convertible bond – – (71) (71) – (71)Disposal of businesses – 5 – 5 – 5Reclassifications – (777) 777 – – –Movement in fair value – – (264) (264) 404 140Other non-cash movements – (18) (38) (56) – (56)Currency movements (711) 46 609 (56) (6) (62)Balance at 1 January 2012 11,732 (1,018) (11,855) (1,141) (233) (1,374)Cash flow (2,309) 747 (5,633) (7,195) (149) (7,344)Unwinding of discount on convertible bond – – (25) (25) – (25)Conversion of convertible bond – – 1,507 1,507 – 1,507Acquired through business combinations – (3) (1,578) (1,581) (15) (1,596)Disposal of businesses – 53 228 281 – 281Reclassifications – (2,396) 2,396 – – –Movement in fair value – 2 (198) (196) 229 33Other non-cash movements – (14) (21) (35) – (35)Currency movements (111) 20 29 (62) – (62)Balance at 31 December 2012 9,312 (2,609) (15,150) (8,447) (168) (8,615)Financial statements(1)The Group operates in certain countries where the existence of exchange controls may restrict the use of certain cash balances (principally South Africa and Venezuela). These restrictions arenot expected to have a material effect on the Group’s ability to meet its ongoing obligations.(2)Derivative instruments that provide an economic hedge of assets and liabilities in net debt are included above to reflect the true net debt position of the Group at the year end. These consist ofnet current derivative liabilities of $116 million (2011: assets of $82 million) and net non-current derivative liabilities of $52 million (2011: $315 million) which are classified within ‘Derivativefinancial assets’ and ‘Derivative financial liabilities’ on the balance sheet.Anglo American plc Annual Report 2012 181