BT 2016 Annual Report Download - page 207

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Overview The Strategic Report Governance Financial statements Additional information
25. Loans and other borrowings continued
Obligations under finance leases are analysed as follows:
At 31 March
2016 2015 2016 2015
Minimum lease payments
Repayment of
outstanding
lease obligations
£m £m £m £m
Amounts payable under finance leases:
Due within one year 13 29 813
Between two to five years 107 101 53 46
After five years 270 269 179 179
390 399 240 238
Less: future finance charges (150) (161) – –
Total finance lease obligations 240 238 240 238
Assets held under finance leases mainly consist of buildings and network assets. The group’s obligations under finance leases are secured
by the lessors’ title to the leased assets.
26. Finance expense
Year ended 31 March
2016
£m
2015
£m
2014
£m
Finance expense
Interest on:
Financial liabilities at amortised cost 489 516 560
Finance leases 14 15 16
Derivatives 11 713
Fair value movements:
Bonds designated as hedged items in fair value hedges –82 (47)
Derivatives designated as hedging instruments in fair value hedges –(82) 47
Derivatives not in a designated hedge relationship (5) 7(2)
Reclassification of cash flow hedge from other comprehensive income 326 9
Unwinding of discount on provisions 888
Finance expense 520 579 604
Less: interest capitaliseda–(2) (1)
Total finance expense before specific items 520 577 603
Specific items (note 8) 229 299 235
Total finance expense 749 876 838
a No interest was capitalised in 2015/16. Interest was capitalised at a weighted average rate of 6.0% in 2014/15 and 6.1% in 2013/14.
Reconciliation of net finance expense to net interest cash outflow
Net interest cash outflow of £548m (2014/15: £580m, 2013/14: £608m) is £65m higher (2014/15: £20m, 2013/14: £17m) than
the net finance expense in the income statement. This is mostly due to certain interest cash outflows and inflows being spread over a
number of years in the income statement.
Year ended 31 March
2016
£m
2015
£m
2014
£m
Net finance expense before specific items 483 560 591
Timing differences:
– Derivative restructuring costs (1) –14
– Timing of coupon payments on bonds 27 4(5)
– Timing of interest receipts 22 – –
– Deferred income 9 9 8
Specific item (note 8) 8 7 –
Net interest cash outflow 548 580 608