Slide 1: 2010 full year results
2010 full year results Analyst handout February 2011
Slide 2: Cautionary statement
Cautionary statement This presentation has been prepared by Rio Tinto plc and Rio Tinto Limited (“Rio Tinto”) and consisting of the slides for a presentation concerning Rio Tinto. By reviewing/attending this presentation you agree to be bound by the following conditions. Forward-looking statements T
Slide 3: Record earnings driven by strong markets
Record earnings driven by strong markets Underlying earnings 2009 vs 2010 ($m) 16,000 12,000 8,000 4,000 0 6,298 9,505 (1,171) 782 (253) (232) (445) (690) 193 13,987 2009 Price Exchange Volume Inflation Energy Cash Explor'n Interest, tax 2010 rates costs & eval'n & other Note: Exploration and evalua
Slide 4: Controllable costs flat despite input price pressures
Controllable costs flat despite input price pressures Total cash cost variance • Most cost increases were $bn uncontrollable from weaker US$, higher royalties and LME linked input prices • Continued savings from Aluminium • Limited upward pressure elsewhere • Increasing investment in exploration and
Slide 5: Record cash flow generation
Record cash flow generation 2010 cash flows Cash flows from operations ($bn) ($bn) 30 25 Dividends from EAUs Cash flows from consolidated operations Reduction 20 in net debt: ($14.6bn) Cash flows from operations: 15 $23.5bn Other: ($1.4bn) Acquisitions: ($0.9bn) 10 Tax: ($4.1bn) Interest: ($0.7bn) D
Slide 6: Iron ore
Iron ore 658 (79) (29) (62) (29) (7) (389) 6,000 10,189 $m 4,126 FY, 2009 Price Fx Vols CPI Energy Other Expl'n Other FY, 2010 cash Eval'n • Production capacity increased in 2010 with Mesa A, Brockman 4 and Western Turner Syncline coming on line • Switched from annual benchmark pricing method to qua
Slide 7: Aluminium
Aluminium 160 167 70 31 $m 1569 (391) (83) (190) 773 (560) FY, 2009 Price Fx Vols CPI Energy Other Expl'n Other FY, 2010 cash Eval'n • Increase of proportion of Value Add Products from 50% in 2009 to 65% in 2010 • Lower water levels in Saguenay led to increased electricity purchases • Higher diesel
Slide 8: Copper
Copper (55) 1,399 (256) (24) (10) (187) (62) (149) $m 2,534 1,878 FY, 2009 Price Fx Vols CPI Energy Other Expl'n Other FY, 2010 cash Eval'n • Copper prices rose 46% from 232 c/lb in 2009 to 339 c/lb in 2010 driven by supply side disruptions • Lower grades impacted tonnes • Gold prices rose 29% from
Slide 9: Energy
Energy 171 58 203 9 (245) (28) (10) $m (138) 1,167 1,187 FY, 2009 Price Fx Vols CPI Energy Other Expl'n Other FY, 2010 cash Eval'n • Greater volume of higher margin hard and semi-soft coking vs thermal coal • Strong seaborne prices partly offsets high exchange rates • Significant increase in coal pr
Slide 10: Diamonds & Minerals
Diamonds & Minerals 254 138 (31) (5) (85) (67) (13) (663) $m 800 328 FY, 2009 Price Fx Vols CPI Energy Other Expl'n Other FY, 2010 cash Eval'n • Robust recovery in prices driven by demand from Asia • Supply shortfall in diamonds expected to drive prices • First production from Diavik underground • A
Slide 11: Other
Other Interes FY FX / Inflatio Sales Cash Epl'n Non FY $millions Energy t, tax & 2009 price n Vols Costs Eval'n Cash 2010 other Other operations 71 106 (8) 24 12 (20) - 81 (195) 71 Central exploration (71) - - - - 1 (41) - - (111) Interest (584) - - - - - - - 110 (474) Other (529) - - - - (29) (17)
Slide 12: Underlying earnings and net earnings
Underlying earnings and net earnings 2009 US$m 2010 US$m Twelve months ended 31 December Underlying earnings 6,298 13,987 Gain on consolidation of Oyu Tolgoi LLC 531 Profits less losses on disposal of interests in 499 174 businesses Net impairment charges (1,552) (836) Exchange differences and gains
Slide 13: Balancing growth with capital returns
Balancing growth with capital returns • Record cashflows have reduced net debt to $4 billion Cash from operations • Oyu Tolgoi fully consolidated – accounting change means 2011 capex now expected to be ~$13 billion • Small to medium-sized M&A – Investment in value Prudent balance Capital Riversdale
Slide 14: Additional information
OJULLONY Additional information
Slide 15: Provisional pricing
Provisional pricing Provisional pricing effect Open shipments (million lbs) (US$m) 30-Jun-10 31-Dec-10 31-Dec-09 H1 10 H2 10 FY 09 Escondida 191 26 196 (36) 168 194 Freeport 29 (3) 49 (1) – – Northparkes/Other 19 8 22 (1) 13 19 239 31 267 (38) 181 213 15
Slide 16: Earnings reconciliations
Earnings reconciliations 2010 Energy Resources of Australia US$m Earnings per ERA press release (A$47m) 43 Increase depreciation of closure asset (10) Tax and unwinding of discount (5) Less: Minority interests (4) Other (2) Underlying earnings as reported by Rio Tinto 22 16
Slide 17: Earnings reconciliations
Earnings reconciliations H1 2010 Palabora US$m Earnings per Palabora press release (R595m) 81 Recognition of Secondary Tax on Companies (STC) by Rio Tinto (2) Add interest and fx gain/loss on debt shown centrally by Rio 8 Tinto Less: minority interest (42.3%) (35) Underlying earnings as reported by
Slide 18: Variance analysis methodology
Variance analysis methodology • Price = Change in commodity price x prior year sales volumes • Exchange = (Change in exchange rates x Prior year cost of sales) + Relative movements in exchange gains and losses on working capital • Inflation = Inflation rate x Prior year cash cost of sales • Volume =