Financial risk management (Tables)

12 Months Ended

Jun. 30, 2019

Summary of Financial Assets and Liabilities by Class


	IFRS 13 Fair value hierarchy Level	IFRS 9 Classification⁽¹⁾	2019 US$M		2018 US$M
Fair value hierarchy⁽²⁾
Current cross currency and interest rate swaps	2	Fair value through profit or loss		15		12
Current other derivative contracts⁽³⁾	2,3	Fair value through profit or loss		57		170
Current other investments⁽⁴⁾	1,2	Fair value through profit or loss		15		18
Non-current cross currency and interest rate swaps	2	Fair value through profit or loss		739		396
Non-current other derivative contracts⁽³⁾	2,3	Fair value through profit or loss		180		195
Non-current investment in shares	3	Fair value through other comprehensive income		34		33
Non-current investment in shares	3	Fair value through profit or loss		6		–
Non-current other investments⁽⁴⁾⁽⁵⁾	1,2,3	Fair value through profit or loss		344		375

Total other financial assets				1,390		1,199
Cash and cash equivalents		Amortised cost		15,613		15,871
Trade and other receivables⁽⁶⁾		Amortised cost		1,929		1,799
Provisionally priced trade receivables⁽⁶⁾	2	Fair value through profit or loss		1,446		1,126
Loans to equity accounted investments		Amortised cost		33		13

Total financial assets				20,411		20,008

Non-financial assets				80,450		91,985

Total assets				100,861		111,993

Current cross currency and interest rate swaps	2	Fair value through profit or loss		63		121
Current other derivative contracts⁽³⁾	2,3	Fair value through profit or loss		64		17
Non-current cross currency and interest rate swaps	2	Fair value through profit or loss		895		1,092
Non-current other derivative contracts⁽³⁾	2,3	Fair value through profit or loss		1		1

Total other financial liabilities				1,023		1,231
Trade and other payables⁽⁷⁾		Amortised cost		6,283		5,414
Provisionally priced trade payables⁽⁷⁾	2	Fair value through profit or loss		277		377
Bank overdrafts and short-term borrowings⁽⁸⁾		Amortised cost		20		58
Bank loans⁽⁸⁾		Amortised cost		2,498		2,555
Notes and debentures⁽⁸⁾		Amortised cost		21,529		23,298
Finance leases		Amortised cost		715		802
Other⁽⁸⁾		Amortised cost		66		92

Total financial liabilities				32,411		33,827

Non-financial liabilities				16,626		17,496

Total liabilities				49,037		51,323

⁽¹⁾	For classifications under IAS 39 refer to note 38 ‘New and amended accounting standards and interpretations’.

⁽²⁾	All of the Group’s financial assets and financial liabilities recognised at fair value were valued using market observable inputs categorised as Level 2 with the exception of the specified items in the following footnotes.

⁽³⁾	Includes other derivative contracts of US$200 million (2018: US$213 million) categorised as Level 3. Significant items are derivatives embedded in physical commodity purchase and sales contracts of gas in Trinidad and Tobago with net assets fair value of US$202 million (2018: US$216 million).

⁽⁴⁾	Includes investments held by BHP Billiton Foundation which are restricted and not available for general use by the Group of US$309 million (2018: US$343 million) of which other investment (US Treasury Notes) of US$128 million categorised as Level 1 (2018: US$108 million).

⁽⁵⁾	Includes other investments of US$47 million (2018: US$47 million) categorised as Level 3.

⁽⁶⁾	Excludes input taxes of US$367 million (2018: US$338 million) included in other receivables. Refer to note 8 ‘Trade and other receivables’.

⁽⁷⁾	Excludes input taxes of US$162 million (2018: US$189 million) included in other payables. Refer to note 9 ‘Trade and other payables’.

⁽⁸⁾	All interest bearing liabilities, excluding finance leases, are unsecured.

Summary of Carrying Amounts of Group's Notes and Debentures by Currency and Derivatives Which Hedge

The table below shows the carrying amounts of the Group’s notes and debentures by currency and the derivatives which hedge them:

•

The carrying amount of the notes and debentures includes foreign exchange remeasurement to period end rates and fair value adjustments when included in a fair value hedge.

•

The breakdown of the hedging derivatives includes remeasurement of foreign currency notional values at period end rates, fair value movements due to interest rate risk, foreign currency cash flows designated into cash flow hedges, costs of hedging recognised in other comprehensive income, ineffectiveness recognised in the income statement and accruals or prepayments.

•

The hedged value of notes and debentures includes their carrying amounts adjusted for the offsetting derivative fair value movements due to foreign currency and interest rate risk remeasurement.

Fair value of derivatives

2019

US$M

Carrying
amount of
notes and
debentures

Foreign
exchange
notional
at spot
rates

Interest
rate risk

Recognised
in cash flow
hedging
reserve

Recognised
in cost of
hedging
reserve

Recognised
in the
income
statement

Accrued
cash
flows

Total

Hedged
value of
notes and
debentures

B to G

A + B + C

USD

9,433

–

(253

)

–

111

(122

)

9,180

GBP

3,118

678

(517

)

(57

)

234

3,279

EUR

7,680

378

(566

)

(100

)

(119

)

7,492

CAD

594

175

(22

)

148

747

AUD

704

)

–

)

773

Total

21,529

1,304

(1,362

)

(163

)

106

251

204

21,471

2018

US$M

23,298

1,145

(633

)

(85

)

–

307

805

23,810

Summary of Reconciliation of Components of Equity and Analysis of Movements in Reserves for all Hedges

The following table shows a reconciliation of the components of equity and an analysis of the movements in reserves for all hedges. For a description of these reserves, refer to note 16 ‘Other equity’.

2019

US$M

Cash flow hedging
reserve

Cost of hedging
reserve

Total

Gross

Tax

Net

Gross

Tax

Net

At the beginning of the financial year

(27

)

–

Impact of adoption of IFRS 9

176

(52

)

124

(176

)

(124

)

–

Add: Change in fair value of hedging instrument recognised in OCI

(327

)

(229

)

–

(229

)

Less: Reclassified from reserves to interest expense – recognised through OCI

229

(68

)

161

(20

)

211

At the end of the financial year

163

(49

)

114

(106

)

(74

)

Summary of Movement of Interest Bearing Liabilities and Related Derivatives

The movement in the year in the Group’s interest bearing liabilities and related derivatives are as follows:


2019 US$M	Interest bearing liabilities															Derivatives (assets)/ liabilities
	Bank loans			Notes and debentures			Finance leases			Bank overdraft and short- term borrowings			Other			Cross currency and interest rate swaps			Total
At the beginning of the financial year		2,555			23,298			802			58			92			805
Proceeds from interest bearing liabilities		250			–			–			–			–			–			250
Settlements of debt related instruments		–			–			–			–			–			(160	)		(160	)
Repayment of interest bearing liabilities		(308	)		(2,198	)		(75	)		–			(23	)		–			(2,604	)

Change from Net financing cash flows		(58	)		(2,198	)		(75	)		–			(23	)		(160	)		(2,514	)

Other movements:
Interest rate impacts		–			729			–			–			–			(809	)
Foreign exchange impacts		–			(311	)		(11	)		–			–			319
Other interest bearing liabilities/derivative related changes		1			11			(1	)		(38	)		(3	)		49

At the end of the financial year		2,498			21,529			715			20			66			204


2018 US$M	Interest bearing liabilities															Derivatives (assets)/ liabilities
	Bank loans			Notes and debentures			Finance leases			Bank overdraft and short- term borrowings			Other			Cross currency and interest rate swaps			Total
At the beginning of the financial year		2,281			27,041			897			45			210			740
Proceeds from interest bearing liabilities		500			–			–			–			28			–			528
Settlements of debt related instruments		–			–			–			–			–			(218	)		(218	)
Repayment of interest bearing liabilities		(221	)		(3,736	)		(81	)		–			(150	)		–			(4,188	)

Change from Net financing cash flows		279			(3,736	)		(81	)		–			(122	)		(218	)		(3,878	)

Other movements:
Interest rate impacts		–			(353	)		–			–			–			329
Foreign exchange impacts		–			245			(9	)		–			–			(254	)
Other interest bearing liabilities/derivative related changes		(5	)		101			–			13			4			208
Liabilities transferred to held for sale		–			–			(5	)		–			–			–

At the end of the financial year		2,555			23,298			802			58			92			805