BT 2014 Annual Report Download - page 168

165
Financial statements
Financial statements
24. Loans and other borrowings continued
Net debt
Net debt consists of loans and other borrowings (both current and non-current), less current asset investments and cash and cash equivalents. Loans
and other borrowings are measured at the net proceeds raised, adjusted to amortise any discount over the term of the debt. For the purpose of this
measure, current asset investments and cash and cash equivalents are measured at the lower of cost and net realisable value. Currency denominated
balances within net debt are translated to Sterling at swapped rates where hedged. Net debt is considered to be an alternative performance measure
as it is not dened in IFRS. The most directly comparable IFRS measure is the aggregate of loans and other borrowings (current and non-current),
current asset investments and cash and cash equivalents.
A reconciliation from this measure, the most directly comparable IFRS measure, to net debt is given below.
At 31 March
2014
£m
2013
£m
Loans and other borrowings 9,814 10,013
Less
Cash and cash equivalents (695) (924)
Current asset investments (1,774) (531)
7,345 8,558
Adjustments
To retranslate debt balances at swap rates where hedged by currency swaps (24) (417)
To remove accrued interest applied to reect the eective interest method and fair value adjustments (293) (344)
Net debt 7,028 7,797
At 31 March
2014
£m
2013
£m
Floating US$500m FRN due December 2013a– 329
5.25% €750m bond due June 2014a645 660
6.125% €600m bond due July 2014a,b 518 530
2.00% US$750m bond due June 2015a452 497
6.50% €1,000m bond due July 2015a867 886
1.625% US$600m bond due June 2016a361 –
8.50% £683m bond due December 2016 (minimum 7.50%d) 699 699
1.25% US$500m bond due February 2017a300 –
6.625% £500m bond due June 2017a526 525
5.95% US$1,100m bond due January 2018a668 734
2.35% US$800m bond due February 2019a481 –
8.625% £300m bond due March 2020 299 299
3.50% £250m index linked bond due April 2025 382 370
5.75% £600m bond due December 2028c670 717
9.625% US$2,670m bond due December 2030a (minimum 8.625%d) 1,648 1,809
6.375% £500m bond due June 2037a522 521
Total listed bonds 9,038 8,576
Finance leases 264 272
Commercial papere324 769
Other loans 177 391
Bank overdrafts 11 5
Total other loans and borrowings 512 1,165
Total loans and borrowings 9,814 10,013
a Designated in a cash Ʈow hedge relationship.
b The interest rate payable on this bond attracts an additional 1.25% for a downgrade by one credit rating category by either or both Moodyos and SP below Baa3BBBs, respectively.
c Designated in a fair value hedge relationship.
d The interest rate payable on this bond attracts an additional 0.25% for a downgrade by one credit rating by either Moodyos or SP to the groupos senior unsecured debt below A3As respectively.
In addition, if Moodyos or SP subseTuently increase the ratings then the interest rate will be decreased by 0.25% for each rating category upgrade by each rating agency. In no event will the
interest rate be reduced below the minimum rate reƮected in the above table.
e Commercial paper of £237m (201213: £146m) is denominated in Euros and of £87m (201213: £623m) in 8S Dollars.
Unless designated in a fair value hedge relationship, all loans and other borrowings are carried in the group balance sheet and the table above at
amortised cost. The fair value of listed bonds is £10,597m (2012/13 £10,535m) and the fair value of nance leases is £286m (2012/13 £314m).
The fair value of the group’s bonds and other long-term borrowings are estimated on the basis of quoted market prices for the same or similar issues
with same maturities, where they exist and on calculation of the value of future cash ows using approximate discount rates in eect at the balance
sheet date where market prices of similar issues do exist.