BP 2012 Annual Report Download - page 235

34. Finance debt
$ million
2012 2011
Current Non-current Total Current Non-current Total
Borrowings 9,369 38,412 47,781 8,675 34,816 43,491
Net obligations under finance leases 29 355 384 339 353 692
9,398 38,767 48,165 9,014 35,169 44,183
Disposal deposits 632 – 632 30 – 30
10,030 38,767 48,797 9,044 35,169 44,213
The main elements of current borrowings are the current portion of long-term borrowings that are due to be repaid in the next 12 months of
$6,240 million (2011 $4,875 million) and issued commercial paper of $3,028 million (2011 $3,635 million). Finance debt does not include accrued
interest, which is reported within other payables.
Deposits for disposal transactions expected to complete in 2013 of $632 million are also included in current finance debt (2011 $30 million for
transactions expected to complete in 2012). This unsecured debt will be considered extinguished on completion of the transactions.
At 31 December 2012, $142 million (2011 $131 million) of finance debt was secured by the pledging of assets. At 31 December 2011, in connection
with $2,344 million of finance debt, BP had entered into crude oil sale contracts in respect of oil produced from certain fields in offshore Angola and
Azerbaijan to provide security to lending banks. These loans were repaid during the fourth quarter of 2012 and the sales contracts were terminated.
The following table shows, by major currency, the group’s finance debt at 31 December and the weighted average interest rates achieved at those
dates through a combination of borrowings and derivative financial instruments entered into to manage interest rate and currency exposures. The
disposal deposits noted above are excluded from this analysis.
Fixed rate debt Floating rate debt Total
Weighted
average
interest
rate
%
Weighted
average
time for
which rate
is fixed
Years
Amount
$ million
Weighted
average
interest
rate
%
Amount
$ million
Amount
$ million
2012
US dollar 3 4 16,744 1 26,208 42,952
Euro 5 2 20 1 4,851 4,871
Other currencies 4 11 255 3 87 342
17,019 31,146 48,165
2011
US dollar 4 5 15,016 1 27,285 42,301
Euro 5 3 25 3 1,575 1,600
Other currencies 4 12 240 3 42 282
15,281 28,902 44,183
The euro debt not swapped to US dollar is naturally hedged for the foreign currency risk by holding equivalent euro cash and cash equivalent amounts.
Finance leases
The group uses finance leases to acquire property, plant and equipment. These leases have terms of renewal but no purchase options and escalation
clauses. Renewals are at the option of the lessee. The terms and conditions of these finance leases do not impose significant financial restrictions on
the group. Future minimum lease payments under finance leases are set out below.
$ million
2012 2011
Future minimum lease payments payable within
1 year 59 454
2 to 5 years 211 200
Thereafter 334 380
604 1,034
Less: finance charges 220 342
Net obligations 384 692
Of which – payable within 1 year 29 339
– payable within 2 to 5 years 109 99
– payable thereafter 246 254
Financial statements 233
BP Annual Report and Form 20-F 2012
Financial statements