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Notes to the financial statements

30. Consolidated cash flow analysis

a) Reconciliation of profit before tax to cash inflows from operations

US$ million 2009 2008
Profit before tax 4,029 8,571
Depreciation and amortisation 1,725 1,509
Share-based payment charges 204 155
Net profit on disposals (1,612) (1,009)
Operating and financing remeasurements (504) 728
Non-cash element of operating special items 1,981 284
Net finance costs before remeasurements 273 452
Share of net income from associates (84) (1,113)
Provisions (46) 46
Decrease/(increase) in inventories 23 (999)
(Increase)/decrease in operating receivables (360) 80
(Decrease)/increase in operating payables (573) 896
Deferred stripping (150) (89)
Other adjustments (2) 68
Cash inflows from operations 4,904 9,579

b) Reconciliation to the balance sheet

  Cash and cash equivalents(1)   Short term borrowings   Medium and long term borrowings   Current financial asset investments
US$ million 2009 2008   2009 2008   2009 2008   2009 2008
Balance sheet 3,269 2,771   (1,499) (6,784)   (12,816) (7,211)   3 173
Balance sheet - disposal groups(2) 64 8   - -   (3) -   - -
Bank overdrafts (1) (35)   1 35   - -   - -
Bank overdrafts - disposal groups(2) (13) -   - -   - -   - -
Net debt classifications 3,319 2,744   (1,498) (6,749)   (12,819) (7,211)   3 173
(1)
'Short term borrowings' on the balance sheet include overdrafts which are included within cash and cash equivalents in determining net debt.
(2)
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 debt

US$ million Cash and cash equivalents(1) Debt due
within
one year
Debt due
after
one year
Current financial asset investments Net debt excluding hedges Hedges(2) Total net debt including hedges
Balance at 1 January 2008 3,074 (5,909) (2,404) - (5,239) 388 (4,851)
Cash flow (143) (1,432) (5,181) 210 (6,546) (380) (6,926)
Acquisition of businesses - (209) (461) - (670) - (670)
Reclassifications - 190 (190) - - - -
Movement in fair value - (11) (176) - (187) (305) (492)
Other non-cash movements - - (15) - (15) - (15)
Currency movements (187) 622 1,216 (37) 1,614 - 1,614
Balance at 1 January 2009 2,744 (6,749) (7,211) 173(3) (11,043) (297) (11,340)
Cash flow(4) 259 6,624 (6,253) (200) 430 85 515
Unwinding of discount on convertible bond - - (39) - (39) - (39)
Equity component of convertible bond(4) - - 355 - 355 - 355
Reclassifications - (917) 917 - - - -
Movement in fair value - - 63 - 63 (73) (10)
Other non-cash movements - (15) (26) 3 (38) - (38)
Currency movements 316 (441) (625) 27 (723) - (723)
Balance at 31 December 2009 3,319 (1,498) (12,819) 3 (10,995) (285) (11,280)
(1)
The Group operates in certain countries (principally South Africa and Venezuela) where the existence of exchange controls may restrict the use of certain cash balances. In addition, the use of cash balances of $111 million (2008: $91 million) are subject to certain legal restrictions. These restrictions are not expected to have a material effect on the Group's ability to meet 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 of net current derivative assets of $41 million (2008: $437 million net liabilities) and net non-current derivative liabilities of $326 million (2008: $140 million net assets) which are classified within 'Other financial assets (derivatives)' and 'Other financial liabilities (derivatives)' on the balance sheet.
(3)
Relates to amounts invested in unlisted preference shares (guaranteed by Nedbank Limited and Nedbank Group Limited) pending completion of the disposal of the Group's 50% interest in the Booysendal joint venture. This amount was received upon completion of the transaction in June 2009.
(4)
The issue of the convertible bond had a net impact on debt due after one year at the date of issue of $1,330 million due to the conversion feature of $355 million which is presented separately in equity.

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Annual Report 2009