BP 2014 Annual Report Download - page 146

23. Cash and cash equivalents
$ million
2014 2013
Cash at bank and in hand 5,112 6,907
Term bank deposits 18,392 12,246
Cash equivalents 6,259 3,367
29,763 22,520
Cash and cash equivalents comprise cash in hand; current balances with banks and similar institutions; term deposits of three months or less with
banks and similar institutions; money market funds and commercial paper. The carrying amounts of cash at bank and in hand and term bank deposits
approximate their fair values. Substantially all of the other cash equivalents are categorized within level 1 of the fair value hierarchy.
Cash and cash equivalents at 31 December 2014 includes $2,264 million (2013 $1,626 million) that is restricted. The restricted cash balances include
amounts required to cover initial margin on trading exchanges and certain cash balances which are subject to exchange controls.
The group holds $3 billion (2013 $2 billion) of cash outside the UK and it is not expected that any significant tax will arise on repatriation.
24. Finance debt
$ million
2014 2013
Current Non-current Total Current Non-current Total
Borrowings 6,831 45,240 52,071 7,340 40,317 47,657
Net obligations under finance leases 46 737 783 41 494 535
6,877 45,977 52,854 7,381 40,811 48,192
The main elements of current borrowings are the current portion of long-term borrowings that is due to be repaid in the next 12 months of $6,343
million (2013 $6,230 million) and issued commercial paper of $444 million (2013 $1,050 million). Finance debt does not include accrued interest, which
is reported within other payables.
At 31 December 2014, $137 million (2013 $141 million) of finance debt was secured by the pledging of assets. The remainder of finance debt was
unsecured.
The following table shows the weighted average interest rates achieved through a combination of borrowings and derivative financial instruments
entered into to manage interest rate and currency exposures.
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
2014
US dollar 3 3 14,285 1 36,275 50,560
Other currencies 6 19 871 1 1,423 2,294
15,156 37,698 52,854
2013
US dollar 3 4 16,405 1 29,740 46,145
Other currencies 4 11 611 2 1,436 2,047
17,016 31,176 48,192
The floating rate debt denominated in other currencies represents euro debt not swapped to US dollars, which is naturally hedged with respect to
foreign currency risk by holding equivalent euro cash and cash equivalent amounts.
Fair values
The estimated fair value of finance debt is shown in the table below together with the carrying amount as reflected in the balance sheet.
Long-term borrowings in the table below include the portion of debt that matures in the 12 months from 31 December 2014, whereas in the balance
sheet the amount is reported within current finance debt.
The carrying amount of the group’s short-term borrowings, comprising mainly commercial paper, approximates their fair value. The fair values of the
group’s long-term borrowings are principally determined using quoted prices in active markets (and so fall within level 1 of the fair value hierarchy).
Where quoted prices are not available, quoted prices for similar instruments in active markets are used. The fair value of the group’s finance lease
obligations is estimated using discounted cash flow analyses based on the group’s current incremental borrowing rates for similar types and maturities
of borrowing.
$ million
2014 2013
Fair
value
Carrying
amount Fair value
Carrying
amount
Short-term borrowings 487 487 1,110 1,110
Long-term borrowings 51,995 51,584 47,398 46,547
Net obligations under finance leases 1,343 783 654 535
Total finance debt 53,825 52,854 49,162 48,192
142 BP Annual Report and Form 20-F 2014