XML 83 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Net debt
 12 Months Ended
Jun. 30, 2018
Text block1 [abstract]  
Net debt

18    Net debt

The Group’s corporate purpose is to create long-term shareholder value through the discovery, acquisition, development and marketing of natural resources. The Group will invest capital in assets where they fit its strategy.

The Group monitors capital using the net debt balance and the gearing ratio, being the ratio of net debt to net debt plus net assets.

 

     2018     2017  

US$M

    Current      Non-current     Current      Non-current  

Interest bearing liabilities

           

Bank loans

      308        2,247       192        2,089  

Notes and debentures

      2,228        21,070       771        26,270  

Finance leases

      77        725       82        815  

Bank overdraft and short-term borrowings

      58        –       45        –  

Other

      65        27       151        59  
  

 

 

     

 

 

    

 

 

     

 

 

  

Total interest bearing liabilities

      2,736        24,069       1,241        29,233  
  

 

 

     

 

 

    

 

 

     

 

 

  

Less cash and cash equivalents

           

Cash

      1,065        –       882        –  

Short-term deposits

      14,806        –       13,271        –  
  

 

 

     

 

 

    

 

 

     

 

 

  

Total cash and cash equivalents

      15,871        –       14,153        –  
  

 

 

     

 

 

    

 

 

     

 

 

  

Net debt

         10,934          16,321  
     

 

 

       

 

 

  

Net assets

         60,670          62,726  
     

 

 

       

 

 

  

Gearing

         15.3 %         20.6 % 
     

 

 

       

 

 

  

Cash and short-term deposits are disclosed in the cash flow statement net of bank overdrafts and interest bearing liabilities at call.

 

     2018     2017     2016  
     US$M     US$M     US$M  

Total cash and cash equivalents

      15,871       14,153       10,319  

Bank overdrafts and short-term borrowing

      (58 )      (45 )      (43 ) 
  

 

 

    

 

 

    

 

 

  

Total cash and cash equivalents, net of overdrafts

      15,813       14,108       10,276  
  

 

 

    

 

 

    

 

 

  

Recognition and measurement

Cash and short-term deposits in the balance sheet comprise cash at bank and on hand and highly liquid cash deposits with short-term maturities and are readily convertible to known amounts of cash with insignificant risk of change in value. The Group considers that the carrying value of cash and cash equivalents approximate fair value due to their short term to maturity.

Cash and cash equivalents includes US$98 million (2017: US$180 million) restricted by legal or contractual arrangements.

 

Interest bearing liabilities and cash and cash equivalents include balances denominated in the following currencies:

 

     Interest bearing liabilities      Cash and cash equivalents  
     2018      2017      2018      2017  
     US$M      US$M      US$M      US$M  

USD

      12,981        14,035        7,024        7,980  

EUR

      9,070        10,324        5,845        4,663  

GBP

      3,104        3,520        1,560        1,318  

AUD

      1,077        1,987        9        9  

CAD

      573        608        1,301        77  

Other

      –        –        132        106  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

      26,805        30,474        15,871        14,153  
  

 

 

     

 

 

     

 

 

     

 

 

  

Liquidity risk

The Group’s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due and is managed as part of the portfolio risk management strategy. Operational, capital and regulatory requirements are considered in the management of liquidity risk, in conjunction with short-term and long-term forecast information.

Recognising the cyclical volatility of operating cash flows, the Group has defined minimum target cash and liquidity buffers to be maintained to mitigate liquidity risk and support operations through the cycle.

The Group’s strong credit profile, diversified funding sources, its minimum cash buffer and its committed credit facilities ensure that sufficient liquid funds are maintained to meet its daily cash requirements. The Group’s policy on counterparty credit exposure ensures that only counterparties of an investment grade standing are used for the investment of any excess cash.

Standard & Poor’s credit rating of the Group remained at the A level with stable outlook throughout FY2018. Moody’s maintained their credit rating for the Group of A3 with positive outlook throughout FY2018.

There were no defaults on loans payable during the period.

Counterparty risk

The Group is exposed to credit risk from its financing activities, including short-term cash deposits with banks and derivative contracts. This risk is managed by Group Treasury in line with the counterparty risk framework, which aims to minimise the exposure to a counterparty and mitigate the risk of financial loss through counterparty failure.

Exposure to counterparties is monitored at a Group level across all products and includes exposure with derivatives and short-term cash deposits.

Short-term cash deposits and derivatives are transacted with approved counterparties who have been assigned specific limits based on a quantitative credit risk model. The policy is reviewed annually and limits are updated at least bi-annually. Derivatives must be transacted with approved counterparties and are subject to tenor limits.

 

Standby arrangements and unused credit facilities

The Group’s committed revolving credit facility operates as a back-stop to the Group’s uncommitted commercial paper program. The combined amount drawn under the facility or as commercial paper will not exceed US$6.0 billion. As at 30 June 2018, US$ nil commercial paper was drawn (2017: US$ nil). The revolving credit facility has a five-year maturity ending 7 May 2021. A commitment fee is payable on the undrawn balance and an interest rate comprising an interbank rate plus a margin applies to any drawn balance. The agreed margins are typical for a credit facility extended to a company with the Group’s credit rating.

Maturity profile of financial liabilities

The maturity profile of the Group’s financial liabilities based on the contractual amounts, taking into account the derivatives related to debt, is as follows:

 

2018

US$M

   Bank loans,
debentures and
other loans		     Expected
future
interest
payments		     Derivatives
related to
net debt		     Other
derivatives		     Obligations
under
finance
leases		     Trade and
other
payables		     Total  

Due for payment:

              

In one year or less or on demand

     2,647       682       302       17       127       5,788       9,563  

In more than one year but not more than two years

     1,545       957       188       1       113       3       2,807  

In more than two years but not more than five years

     8,019       2,203       823       –       335       –       11,380  

In more than five years

     13,287       5,519       1,191       –       590       –       20,587  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

     25,498       9,361       2,504       18       1,165       5,791       44,337  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Carrying amount

     26,003       –       1,213       18       802       5,791       33,827  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

2017

US$M

   Bank loans,
debentures and
other loans		     Expected
future
interest
payments		     Derivatives
related to
net debt		     Other
derivatives		     Obligations
under
finance
leases		     Trade and
other
payables		     Total  

Due for payment:

              

In one year or less or on demand

     1,157       686       267       144       135       5,417       7,806  

In more than one year but not more than two years

     2,471       1,022       245       4       132       5       3,879  

In more than two years but not more than five years

     8,279       2,611       503       7       343       –       11,743  

In more than five years

     16,706       6,248       1,975       –       705       –       25,634  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

     28,613       10,567       2,990       155       1,315       5,422       49,062  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Carrying amount

     29,577       –       1,345       155       897       5,422       37,396