Rio Tinto chief executive J-S Jacques said: “Today’s results show we have kept our commitment to maximise cash and productivity from our world-class assets, delivering $3.6 billion in shareholder returns while maintaining a robust balance sheet. At the same time, we strengthened the portfolio and advanced our high-value growth projects as we look to the future.
“We enter 2017 in good shape. Our team will deliver $5 billion of extra free cash flow over the next five years from our productivity programme. Our value over volume approach, coupled with a robust balance sheet and world-class assets, places us in a strong position to deliver superior shareholder returns through the cycle.”

2016 highlights
Generated strong operating cash flow of $8.5 billion and underlying earnings of $5.1 billion
Achieved $1.6 billion of pre-tax sustainable operating cash cost improvements1
Investing in three major growth projects in bauxite, copper and iron ore
Optimising the portfolio with disposals of $1.3 billion announced or completed in 2016 and up to $2.45 billion announced to date in 2017
Strengthened the balance sheet further with net debt reduced to $9.6 billion
Returning cash to shareholders with $3.6 billion announced with respect to 2016: full year dividend of 170 US cents per share, equivalent to $3.1 billion
share buy-back of $0.5 billion in Rio Tinto plc shares over the course of 2017
in total, represents 70 per cent of 2016 underlying earnings

Year to 31 December 2016 2015 Change
Net cash generated from operating activities (US$ millions) 8,465 9,383 -10%
Underlying earnings2 (US$ millions) 5,100 4,540 +12%
Net earnings / (loss) (US$ millions) 4,617 (866) n/a
Capital expenditure3 (US$ millions) (3,012) (4,685) -36%
Underlying earnings per share (US cents) 283.8 248.8 +14%
Basic earnings / (loss) per share (US cents) 256.9 (47.5) n/a
Ordinary dividend per share (US cents) 170.0 215.0 -21%

At 31 December 2016 2015 Change
Net debt 4, 6 (US$ millions) 9,587 13,783 -30%
Gearing ratio 5, 6 17% 24%

The financial results are prepared in accordance with IFRS and are unaudited.
1Operating cash cost improvements represent the difference between the current and prior year full cash cost of sales per unit based on the prior year volume sold.
2Underlying earnings is a key financial performance indicator which management uses internally to assess performance. It is presented here to provide greater understanding of the underlying business performance of the Group’s operations. Net and underlying earnings relate to profit attributable to the owners of Rio Tinto. Underlying earnings is defined and reconciled to net earnings on page 46.
3Capital expenditure is presented gross, before taking into account any disposals of property, plant and equipment.
4Net debt is defined and reconciled to the balance sheet on page 40.
5Gearing ratio is defined as net debt divided by the sum of net debt and total equity at each period end.
6These financial performance indicators are those which management use internally to assess performance, and therefore are considered relevant to users of the accounts.

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