BP 2011 Annual Report Download - page 231

Financial statements
BP Annual Report and Form 20-F 2011 229
Notes on financial statements
34. Finance debt
$ million
2011 2010
Current Non-current Total Current Non-current Total
Borrowings 8,675 34,816 43,491 8,312 30,017 38,329
Net obligations under finance leases 339 353 692 117 693 810
9,014 35,169 44,183 8,429 30,710 39,139
Disposal deposits 30 –30 6,197 –6,197
9,044 35,169 44,213 14,626 30,710 45,336
Current finance debt includes the portion of long-term borrowings and net obligations under finance leases that will mature in the next 12 months,
amounting to $5,214 million (2010 $6,976 million).
The main elements of current borrowings are the current portion of long-term bonds of $4,875 million (2010 $6,859 million) and issued commercial
paper of $3,635 million (2010 $1,025 million).
Deposits for disposal transactions expected to complete in 2012 of $30 million are also included in current finance debt (2010 $6,197 million for
transactions expected to complete in 2011). This debt will be considered extinguished on completion of the transactions.
At 31 December 2011, $131 million (2010 $790 million) of finance debt was secured by the pledging of assets, and no finance debt was secured in
connection with deposits received relating to certain disposal transactions expected to complete in subsequent periods (2010 $4,780 million). In addition,
in connection with $2,344 million (2010 $4,588 million) of finance debt, BP has entered into crude oil sales contracts in respect of oil produced from
certain fields in offshore Angola and Azerbaijan to provide security to the lending banks. The remainder of finance debt was unsecured.
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
2011
US dollar 4 5 15,016 127,285 42,301
Euro 5 3 25 31,575 1,600
Other currencies 412 240 342 282
15,281 28,902 44,183
2010
US dollar 4 5 14,797 121,076 35,873
Euro 4 3 53 22,988 3,041
Other currencies 618 140 485 225
14,990 24,149 39,139
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 any significant financial restrictions on
the group. Future minimum lease payments under finance leases are set out below.
$ million
2011 2010
Future minimum lease payments payable within
1 year 454 153
2 to 5 years 200 535
Thereafter 380 438
1,034 1,126
Less: finance charges 342 316
Net obligations 692 810
Of which – payable within 1 year 339 117
– payable within 2 to 5 years 99 404
– payable thereafter 254 289