BT 2016 Annual Report Download - page 205

211
Overview The Strategic Report Governance Financial statements Additional information
25. 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 defined 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 the most directly comparable IFRS measure to net debt is given below.
On the acquisition of EE, we acquired a further £2,107m of net debt.
At 31 March
2016
£m
2015
£m
Loans and other borrowings 14,269 9,768
Less:
Cash and cash equivalents (497) (434)
Current asset investments (2,918) (3,523)
10,854 5,811
Adjustments:
To retranslate debt balances at swap rates where hedged by currency swaps (652) (357)
To remove accrued interest applied to reflect the effective interest method and fair value adjustments (357) (335)
Net debt 9,845 5,119
At 31 March
2016
£m
2015
£m
2.00% US$750m bond due June 2015a–508
6.50% €1,000m bond due July 2015a–758
1.625% US$600m bond due June 2016a419 406
8.50% £683m bond due December 2016 (minimum 7.50%c)696 695
1.25% US$500m bond due February 2017a348 337
3.5% €500m bond due February 2017a398 –
6.625% £500m bond due June 2017a525 525
5.95% US$1,100m bond due January 2018a775 750
3.25% €600m bond due August 2018a510 –
2.35% US$800m bond due February 2019a558 541
4.38% £400m bond due March 2019 464 –
1.125% €1,000m bond due June 2019a800 730
8.625% £300m bond due March 2020 300 299
0.625% €1,500m bond due March 2021a1,190 –
1.125% €1,100m bond due March 2023a873 –
3.50% £250m index linked bond due April 2025 396 392
1.75% €1,300 bond due March 2026a1,032 –
5.75% £600m bond due December 2028b741 751
9.625% US$2,670m bond due December 2030a (minimum 8.625%c)1,910 1,850
6.375% £500m bond due June 2037a522 522
Total listed bonds 12,457 9,064
Finance leases 240 238
LIBOR + 0.95% £438m Syndicated loan facilities due April 2016 438 –
2.21% £350m bank loan due December 2017 354 –
Acquisition facility 181 –
Other loans 561 439
Bank overdrafts (note 24) 38 27
Total other loans and borrowings 1,572 466
Total loans and borrowings 14,269 9,768
a Designated in a cash flow hedge relationship.
b Designated in a fair value hedge relationship in 2014/15, de-designated in 2015/16.
c The interest rate payable on this bond attracts an additional 0.25% for a downgrade by one credit rating by either Moody’s or S&P to the group’s senior unsecured debt below A3/A– respectively.
In addition, if Moody’s or S&P subsequently 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 reflected in the above table.