Wrap Text
Results for the Half Year Ended 31 December 2014
BHP Billiton Plc
Registration number 3196209
Registered in England and Wales
Share code: BIL
ISIN: GB0000566504
24 February 2015
Results For Announcement to the Market
Name of Companies: BHP Billiton Limited (ABN 49 004 028 077) and
BHP Billiton Plc (Registration No. 3196209)
Report for the half year ended 31 December 2014
This statement includes the consolidated results of the BHP Billiton Group, comprising BHP
Billiton Limited and BHP Billiton Plc, for the half year ended 31 December 2014 compared with the
half year ended 31 December 2013 and the year ended 30 June 2014.
The results are prepared in accordance with IFRS and are presented in US dollars.
Headline Earnings
In accordance with the JSE Listing Requirements, Headline Earnings is presented below.
Half year Half year
ended ended Year ended
31 December 31 December 30 June
2014 2013 2014
US$M US$M US$M
Earnings attributable to ordinary shareholders 4,265 8,107 13,832
Adjusted for:
Gain on sale of PP&E, Investments and Operations (34) (555) (646)
Net impairments 756 143 797
Recycling of re-measurements from equity to the income statement(a) (1) (2) (14)
Tax effect of above adjustments (213) 164 (40)
Subtotal of adjustments 508 (250) 97
Headline Earnings 4,773 7,857 13,929
Diluted Headline Earnings 4,773 7,857 13,929
Basic earnings per share denominator (millions) 5,317 5,321 5,321
Diluted earnings per share denominator (millions) 5,334 5,337 5,338
Headline Earnings per share (US cents) 89.8 147.7 261.8
Diluted Headline Earnings per share (US cents) 89.5 147.2 260.9
(a) Amounts recognised in profit and loss under cash-flow hedges that were previously recognised directly in other
comprehensive income, are now included in Headline Earnings, previously they were excluded. Comparative amounts for
the half year ended 31 December 2013 and year ended 30 June 2014 have been restated for this change.
NEWS RELEASE
Release Time IMMEDIATE
Date 24 February 2015
Number 02/15
BHP BILLITON RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2014
- The tragic loss of two of our colleagues is a stark reminder that the health and safety of our
people must always come first.
- Underlying EBIT(1) of US$9.2 billion and an Underlying EBIT margin(2) of 32% for the December
2014 half year results demonstrate the strength of BHP Billiton’s strategy and the resilience of
our portfolio in weaker markets.
- Improved productivity and reduced capital expenditure allowed us to generate US$4.1 billion of
free cash flow(2) and strengthen the balance sheet despite lower prices.
- We are extending our productivity gains faster than initially anticipated with US$2.4 billion(3)
achieved in the period. We expect over US$4.0 billion of productivity gains by the end of the 2017
financial year(4).
- Our cost competitiveness continues to improve in all our major businesses, with unit cash costs
reduced by 29% Western Australia Iron Ore, 15% at Queensland Coal, 13% at Escondida and 8%
at Onshore US.
- We reduced capital and exploration expenditure(5) by 23% to US$6.4 billion in the half year and
plan to invest a total of US$12.6 billion in the 2015 financial year and US$10.8 billion in the 2016
financial year.
- We will remain disciplined. Our plans are flexible and we continue to expect an average
investment return(6) of greater than 20% for our portfolio of high-quality development options.
- Our balance sheet is strong. Net debt(2) at period end fell to US$24.9 billion for a gearing ratio of
22.4% and our A+ credit rating was recently reaffirmed.
- The Group’s interim dividend increased by 5% to 62 US cents per share, representing and
Underlying payout ratio(7) of 62%.
- Should the proposed demerger of South32 be approved, we do not plan to rebase our
progressive dividend downwards, implying a higher underlying payout ratio, and South32 will
adopt its own dividend policy.
Half year ended 31 December 2014 2013 Change
US$M US$M %
Profit from operations (EBIT) 8,817 12,933 (31.8%)
Attributable profit 4,265 8,107 (47.4%)
Basic earnings per share (cents) 80.2 152.4 (47.4%)
Dividend per share (cents) 62.0 59.0 5.1%
Net operating cash flow 10,423 11,859 (12.1%)
Underlying EBITDA(1) 14,494 16,518 (12.3%)
Underlying EBIT(1) 9,226 12,382 (25.5%)
Underlying attributable profit(1) 5,352 7,761 (31.0%)
Underlying basic earnings per share (cents)(2) 100.7 145.9 (31.0%)
Capital and exploration expenditure (BHP Billiton share)(5) 6,382 8,289 (23.0%)
Results for the half year ended 31 December 2014
BHP Billiton Chief Executive Officer, Andrew Mackenzie, said: “These results demonstrate the effectiveness of our
strategy and the quality of our people, assets and processes. Despite significant falls in the prices of our main
commodities over the last six months, Group margins remain healthy, free cash flow has increased and we have
strengthened our balance sheet. We are confident that we can maintain our progressive dividend policy and continue
to selectively invest in projects that offer compelling returns.
We started to prepare for a sustained period of lower prices almost three years ago by increasing our focus on
efficiency and lowering our investment. Since then, we have achieved annualised productivity gains approaching
US$10 billion and reduced capital spending by almost 40 per cent. We have seen rapid improvement across all of our
major businesses. For example, in the last six months alone we have cut unit costs at Western Australia Iron Ore by
29 per cent to nearly US$20 per tonne, achieving an Underlying EBIT margin of 49 per cent despite the structural shift
in prices.
This push for productivity must continue and our proposed demerger will be a catalyst for further
progress. Simplification will ensure BHP Billiton’s organisation, systems and processes are dedicated to its core
assets, allowing us to further improve their productivity. Meanwhile, South32 will benefit from a dedicated
management team who can tailor their strategy to suit their own distinct portfolio. Following the proposed demerger,
BHP Billiton will maintain its progressive dividend policy and any dividends from South32 will represent additional cash
returns to shareholders.
We remain confident about the outlook for our Company. We have the best quality assets and operating capability, a
deep understanding of global markets, a portfolio of very high-return growth projects, a strong balance sheet and offer
outstanding cash returns to shareholders. The demerger will allow us to continue the process of building an
organisation that is truly unique in our sector, and one that is well positioned for success in the face of ever-increasing
volatility.”
Our overriding commitment is to sustainability
Our commitment is to ensure the health and safety of our people. BHP Billiton reported a Total Recordable
Injury Frequency (TRIF) of 4.0 per million hours worked in the December 2014 half year. Despite the
continued improvement in TRIF, the tragic loss of two of our colleagues is a stark reminder that the health
and safety of our teams must always come first. This is far ahead of any commercial challenge. We achieve
nothing if we don’t achieve it safely and sustainably. We must continue to pursue effective material and
fatal risk management at our operations.
Robust results underpinned by our structured approach to productivity
BHP Billiton delivered robust financial results in the December 2014 half year, a period characterised by
volatile commodity markets. Underlying EBITDA declined by 12 per cent to US$14.5 billion as lower
average realised prices more than offset the substantial productivity gains that continue to be achieved
across the portfolio.
Group production(8) increased by nine per cent during the December 2014 half year with records achieved
for eight operations and five commodities. We remain on track to deliver Group production growth of 16 per
cent over the two years to the end of the 2015 financial year.
The Group extended its track record of delivering sustainable performance improvement with US$2.4
billion(3) of productivity gains achieved during the period. We remain on track to deliver at least US$4.0
billion(4) of productivity gains from our core portfolio by the end of the 2017 financial year. Volume growth
from the ramp up of our high-return development projects increased Underlying EBIT by a further US$1.3
billion. However, lower average realised prices reduced Underlying EBIT by US$6.1 billion, net of price-
linked costs, and were the major contributor to the 25 per cent decline in Underlying EBIT to US$9.2 billion.
Underlying attributable profit declined by 31 per cent to US$5.4 billion.
By further improving productivity and reducing our rate of investment we delivered a substantial US$4.1
billion of free cash flow during the period, despite weaker commodity prices. BHP Billiton’s share of capital
and exploration expenditure(5) declined by 23 per cent during the period to US$6.4 billion. Continued
improvement in the Group’s capital productivity is expected to support a reduction in forecast capital and
exploration expenditure for the 2015 financial year to US$12.6 billion, 15 per cent below original guidance.
We expect capital and exploration expenditure will further reduce to US$10.8 billion in the 2016 financial
year.
In our Petroleum Business, we have moved quickly in response to lower prices and will reduce our
operated rig count at Onshore US by approximately 40 per cent by the end of the 2015 financial year. This
decisive response exemplifies the Group’s value-focused approach to developing our tier-one resource
base and the flexibility we have to respond to external market conditions.
Disciplined approach to capital management
BHP Billiton’s capital management framework is unchanged. The Group remains committed to a strong
balance sheet and a solid A credit rating. These are fundamental enablers of our strategy and have allowed
us to maintain our progressive dividend and to invest through the cycle. In this context, net debt finished the
period at US$24.9 billion for a gearing ratio of 22.4 per cent and our A+ credit rating was recently
reaffirmed.
The Group increased its interim dividend by five per cent to 62 US cents per share which represents a
payout ratio of 62 per cent. Following the proposed demerger of South32, BHP Billiton will maintain its
progressive dividend policy and any dividends from South32 will represent additional cash returns to
shareholders.
Our high-quality portfolio remains a key point of differentiation. We will maintain our track record of
investing selectively in high-return growth options within our portfolio through the cycle. By operating within
a disciplined framework and by testing all investment decisions against challenging criteria, including
buying back our own shares, we will increase the capital efficiency of the Group. We continue to forecast
an average investment return of greater than 20 per cent(6) for our portfolio of high-quality development
options.
Proposed demerger will largely complete our simplification process in a single step
On 8 December 2014, BHP Billiton announced that the new company it intends to create through its
proposed demerger will be called South32. A final Board decision on the proposed demerger will be made
once all necessary third party approvals are secured on satisfactory terms. On this basis, BHP Billiton
expects to release all shareholder documentation with full details of the demerger in mid-March 2015, with
a shareholder vote taking place in early May 2015. The proposed demerger remains on track to be
completed in the first half of the 2015 calendar year.
If completed, the proposed demerger has the potential to unlock shareholder value by significantly
simplifying the Group and dividing it into two distinct portfolios, each reflecting the common characteristics
of their assets. Management processes will be optimised for each portfolio to enable higher levels of
performance than possible if managed together. Once simplified, BHP Billiton will be almost exclusively
focused on its exceptionally large, long-life iron ore, copper, coal, petroleum and potash basins, retaining
full exposure to the early, middle and late stages of the economic development cycle. With fewer assets
and a greater upstream focus, BHP Billiton will be able to reduce costs and further improve the productivity
of its largest businesses. As a result, BHP Billiton is expected to generate stronger growth in free cash flow
and a superior return on its investment. South32 will be an independent global metals and mining company
based on a selection of high-quality aluminium, coal, manganese, nickel and silver assets.
Outlook
Economic outlook
Global economic growth slowed slightly over the December 2014 half year with variable performance
across the major economies. Chinese growth experienced a moderate slowdown while some other large
emerging economies, notably Brazil and Russia, saw periods of contraction. Among developed economies,
both the United States and the United Kingdom saw solid growth supported by expansionary monetary
policies. In contrast, Europe lost momentum as deflationary pressures increased and Japan saw a pause in
its recovery.
The Chinese economy was healthy with slightly slower growth over the period consistent with government
targets. Household incomes and consumer spending were resilient and both monetary and fiscal policies
remain focused on rebalancing the economy. Consumption will become increasingly important over the
medium term as economic reforms promote slower but more sustainable growth.
The United States economy continued to improve with strong employment growth boosting both consumer
confidence and spending. Business investment, which had been a soft spot in the recovery, also rose
moderately. The economic recovery is expected to continue, supported by lower energy prices and growth
in consumer spending, bolstering expectations that the Federal Reserve will raise interest rates in the next
12 months.
Although the Japanese economy was weak over the December 2014 half year, leading indicators such as
industrial production and business confidence have begun to show signs of improvement. We expect the
recovery to continue at a modest pace, supported by lower energy prices and the weaker yen.
Commodities outlook
Demand for our products remained solid, despite growth moderating as anticipated. However, strong
supply growth, most notably in iron ore and petroleum, contributed to weaker prices in the December 2014
half year.
In China, domestic steel demand was subdued due to weakness in the property sector, resulting in record
exports to overseas markets where demand saw steady growth. In the 2015 calendar year Chinese
demand is expected to recover moderately, supplemented by healthy demand growth in the rest of the
world. While overall Chinese demand for iron ore was flat over the period, imports nonetheless increased
as high-cost domestic mine supply was displaced by lower-cost seaborne supply. As the marginal cost of
supply fell, the iron ore spot price also declined to levels which are now more reflective of the medium-term
fundamentals.
In metallurgical coal, China’s seaborne demand declined following a rise in domestic supply. Although
several producers outside China have announced production cuts, the volume removed from the market
has been less than anticipated and surplus supply is expected to persist in the short term. The thermal coal
market also continued to be well supplied by Indonesian and Australian exports while strong import
demand growth from India, driven by seasonal restocking, partially compensated for moderating Chinese
demand.
Crude oil prices fell in the first half of the 2015 financial year as a result of growing supply, a lower demand
outlook and OPEC’s decision to maintain production levels. With prices at approximately half the average
of the previous three years, the supply response required for a cyclical rebalancing of the market is under
way. While a near-term recovery in price depends on the rate that production growth slows, the medium-
term outlook appears positive as higher prices will be required to induce the new supply needed to offset
natural field decline.
In the United States, domestic gas prices came under pressure as continued supply growth allowed
storage inventories to rebuild despite relatively normal seasonal demand. In the longer term, industrial
demand growth, rising gas-fired power generation and LNG exports are expected to support prices. In the
LNG market, mild winter temperatures across North Asia and high storage levels have limited spot demand
while the ramp-up of new export projects and lower crude oil prices are expected to temper the market in
the second half of the financial year.
Copper prices trended lower during the period reflecting concerns over Chinese demand and a stronger US
dollar. While prices are expected to remain volatile, market fundamentals are compelling over the medium
term with robust demand growth expected and supply constrained by declining ore grades and a lack of
quality development options. The current low prices are expected to intensify the looming supply deficit, as
projects are deferred or delayed.
The nickel price declined following a sharp rise in the second half of the 2014 financial year, as the market
remained well supplied despite the ban on ore exports from Indonesia. Aluminium demand growth
remained strong but new supply, mostly from China, continues to offset the curtailment of high cost
capacity. Strong aluminium demand flowed through to higher alumina prices during the period. The alumina
price was also supported by the Indonesian ore ban, which removed low-cost bauxite supply for Chinese
alumina refineries.
Wealth creation and urbanisation will remain the primary drivers of commodities demand while the ongoing
development of emerging economies provides particular support for industrial metals, energy and fertilisers.
Our iron ore, copper, coal, petroleum and potash businesses provide exposure to this long-term
development cycle and will allow us to target high-return investments as markets continue to evolve.
In summary, we expect sustained growth in China, stronger consumer spending in the US and lower
energy prices to support an improvement in global economic activity over the course of the 2015 calendar
year. However some commodity prices will remain relatively volatile and oversupply in many of our markets
will continue to moderate prices. In the medium term, the structural requirement to induce new supply to
meet demand should be supportive for prices in some of our core commodities, most notably in copper and
oil. Our diversification, competitive cost position, strong balance sheet and the success of our ongoing
productivity initiatives are competitive advantages and provide us with unrivalled flexibility in the face of
ever-increasing volatility.
Projects
At the end of the December 2014 half year, BHP Billiton had seven major projects under development with
a combined budget of US$13.5 billion.
The Escondida Oxide Leach Area Project (OLAP) was successfully completed during the December 2014
half year and the BMA Hay Point Stage Three Expansion project loaded first coal on 12 January 2015, both
on revised schedule and budget. During the period, the Group approved a US$361 million increase to the
budget of the Escondida Organic Growth Project 1 to US$4.2 billion. The budget revision reflected
challenges associated with contractor progress which have since been addressed and the project remains
on original schedule.
BHP Billiton’s share of capital and exploration expenditure(5) declined by 23 per cent during the December
2014 half year to US$6.4 billion. Continued improvement in the Group’s capital productivity has supported a
further reduction in planned capital and exploration expenditure for the 2015 financial year to US$12.6
billion, 15 per cent below original guidance.
Half year ended Half year ended Year ended
31 December 31 December 30 June
2014 2013 2014
US$M US$M US$M
Capital expenditure (purchases of property, plant and
equipment) 6,772 8,605 15,993
Add: exploration expenditure 422 504 1,010
Capital and exploration expenditure (cash basis) 7,194 9,109 17,003
Add: equity accounted investments 341 542 871
Less: capitalised deferred stripping(i) (467) (784) (1,421)
Less: non-controlling interests (686) (578) (1,272)
Capital and exploration expenditure (BHP Billiton
share) 6,382 8,289 15,181
(i) Includes US$88 million of capitalised deferred stripping attributable to non-controlling interests (December 2013 half year:
US$126 million; June 2014 financial year: US$243 million).
Projects completed during the December 2014 half year
Business Project and Capacity(i) Capital Date of initial
ownership expenditure production
US$M(i)
Actual(ii) Budget Actual Target
Copper Escondida Oxide New dynamic leaching 911 933(iii) Q4 CY14 H2 CY14(iii)
Leach Area Project pad and mineral handling
(Chile) system. Maintains oxide
57.5% leaching capacity.
911 933
Projects in execution at the end of the December 2014 half year
Business Project and Capacity(i) Capital Date of initial
ownership expenditure production
US$M(i)
Budget Target
Petroleum North West Shelf Greater To maintain LNG plant throughput 400 CY16
Western Flank-A from North West Shelf operations.
(Australia)
16.67% (non-operator)
Bass Strait Longford Gas Designed to process approximately 520 CY16
Conditioning 400 MMcf/d of high CO2 gas.
Plant (Australia)
50% (non-operator)
Copper Escondida Organic New concentrator with 152 ktpd 4,199(iii) H1 CY15
Growth Project 1 (Chile) capacity.
57.5%
Escondida Water Supply New desalination facility to ensure 3,430 CY17
(Chile) continued water supply to Escondida.
57.5%
Coal Hay Point Stage Three Increases port capacity from 44 Mtpa 1,505(iii)(iv) CY15(iii)
Expansion (Australia) to 55 Mtpa and reduces storm
50% vulnerability.
Appin Area 9 (Australia) Maintains Illawarra Coal’s production 845 CY16
100% capacity with replacement mining
domain and capacity to produce 3.5
Mtpa of metallurgical coal.
10,899
Other projects in progress at the end of the December 2014 half year
Business Project and Scope Capital
ownership expenditure
US$M(i)
Budget
Potash Jansen Potash (Canada) Investment to finish the excavation and lining 2,600
100% of the production and service shafts, and to
continue the installation of essential surface
infrastructure and utilities.
(i) Unless noted otherwise, references to capacity are on a 100 per cent basis, references to capital expenditure from subsidiaries
are reported on a 100 per cent basis and references to capital expenditure from joint operations are reported on a
proportionate consolidation basis.
(ii) Amount subject to finalisation.
(iii) As per revised budget and/or schedule.
(iv) Excludes announced pre-commitment funding.
Income statement
To provide additional clarity into the underlying performance of our operations we present Underlying EBIT,
which is a measure used internally. Underlying EBIT represents Profit from operations excluding
exceptional items (which are described on pages 10 and 11) as set out in the following table:
Half year ended 31 December 2014 2013
US$M US$M
Underlying EBIT 9,226 12,382
Exceptional items (before taxation) (409) 551
Profit from operations (EBIT) 8,817 12,933
Underlying EBIT
The following table and commentary describes the approximate impact of the principal factors that affected
Underlying EBIT for the December 2014 half year compared with the December 2013 half year:
US$M
Underlying EBIT for the half year ended 31 December 2013 12,382
Change in volumes:
Productivity 530
Growth 1,341
1,871
Net price impact:
Change in sales prices (6,550)
Price-linked costs 413
(6,137)
Change in controllable cash costs:
Operating cash costs 1,766
Exploration and business development (12)
1,754
Change in other costs:
Exchange rates 626
Inflation (359)
Fuel and energy 233
Non-cash (938)
(438)
Asset sales 30
Ceased and sold operations (39)
Other items (197)
Underlying EBIT for the half year ended 31 December 2014 9,226
The following table reconciles principal factors shown on the previous page with the Group’s productivity
gains:
Half Year ended 31 December 2014
US$M
Change in controllable cash costs 1,754
Changes in volumes attributed to productivity 530
Total productivity gains in Underlying EBIT 2,284
Change in capitalised exploration 99
Total benefits attributable to productivity initiatives 2,383
Volumes
Productivity-led volume efficiencies and the ramp up of major projects underpinned a nine per cent
increase in Group production(8) in the December 2014 half year and a US$1.9 billion increase in
Underlying EBIT. Western Australia Iron Ore was the major contributor as the ramp-up of Jimblebar and
improvements in availability, utilisation and rate across its integrated supply chain supported a US$1.2
billion increase in Underlying EBIT. Significant growth in Onshore US liquids volumes, which reflected
continued momentum in the Black Hawk and Permian, supported a US$601 million volume-related
increase in Petroleum’s Underlying EBIT.
We remain on track to generate Group production(8) growth of 16 per cent over the two years to the end of
the 2015 financial year.
Prices
Demand for our products remained solid, despite growth moderating as anticipated. However strong supply
growth, most notably in iron ore and petroleum, contributed to weaker prices in the December 2014 half
year.
Lower average realised prices reduced Underlying EBIT by US$6.6 billion in the December 2014 half year.
A 38 per cent decline in the average realised price of iron ore was the major contributor and reduced
Underlying EBIT by US$4.6 billion. A 17 per cent reduction in average realised oil prices reduced
Underlying EBIT by US$802 million, while weaker coal prices, both thermal and coking, reduced Underling
EBIT by a further US$775 million.
A reduction in price-linked costs increased Underlying EBIT by US$413 million during the period and
primarily reflected lower royalty charges in our Iron Ore Business.
The average realised prices achieved for our major commodities are summarised in the following table:
Half year ended Year ended Dec H14 Dec H14 Dec H14
31 Dec 31 Dec 30 Jun 30 Jun vs vs vs
Average realised prices(i) 2014 2013 2014 2014 Dec H13 Jun H14 FY14
Oil (crude and condensate) (US$/bbl) 85 103 102 102 (17%) (17%) (17%)
Natural gas (US$/Mscf)(ii) 4.21 3.81 4.89 4.35 10% (14%) (3%)
US natural gas (US$/Mscf) 3.89 3.44 4.75 4.10 13% (18%) (5%)
LNG (US$/Mscf) 13.76 14.63 14.71 14.67 (6%) (6%) (6%)
Copper (US$/lb)(iii)(iv) 2.98 3.36 3.09 3.22 (11%) (4%) (7%)
Iron ore (US$/wmt, FOB) 70 112 96 103 (38%) (27%) (32%)
Hard coking coal (US$/t) 110 142 121 131 (23%) (9%) (16%)
Weak coking coal (US$/t) 92 116 104 111 (21%) (12%) (17%)
Thermal coal (US$/t)(v) 60 74 67 70 (19%) (10%) (14%)
Alumina (US$/t)(ii) 330 291 320 307 13% 3% 7%
Aluminium (US$/t) 2,378 1,996 2,049 2,022 19% 16% 18%
Manganese ore (US$/dmtu)(ii) 4.00 4.90 4.41 4.64 (18%) (9%) (14%)
Manganese alloy (US$/t) 946 952 1,001 980 (1%) (5%) (3%)
Nickel metal (US$/t) 16,757 13,615 16,391 14,925 23% 2% 12%
(i) Based on provisional, unaudited estimates. Prices exclude third party product and represent the weighted average of various
sales terms (for example: FOB, CIF and CFR), unless otherwise noted.
(ii) Excludes internal sales.
(iii) Includes third party product.
(iv) Includes impact of provisional pricing and finalisation adjustments which decreased EBIT by US$210 million in the December
2014 half year (December 2013 half year: US$196 million increase).
(v) Export sales only; excludes Cerrejón. Includes thermal coal sales from metallurgical coal mines.
Controllable cash costs
A broad-based improvement in productivity underpinned a significant US$1.8 billion reduction in
controllable cash costs during the period.
Operating cash costs
Across our business, the productivity of our workforce continued to improve as we sharpened our focus on
the highest value-adding activities. In total, improved labour and contractor productivity increased
Underlying EBIT by US$725 million. An improvement in Group equipment productivity, as exemplified by a
14 per cent increase in truck utilisation at Escondida, supported a further US$516 million increase in
Underlying EBIT. In total, operating cash costs declined by US$1.8 billion during the period.
Exploration and business development
The Group’s exploration and business development expenditure was in line with the December 2013 half
year. Our exploration program remains focused on greenfield copper targets within Chile, Peru and the
South-West United States, and petroleum liquids opportunities in the Gulf of Mexico, Western Australia and
Trinidad and Tobago.
Other costs
Exchange rates
A stronger US dollar increased Underlying EBIT by US$626 million during the period. This included the
restatement of monetary items in the balance sheet which increased Underlying EBIT by US$220 million.
The following exchange rates have been applied:
Average Average
Half year ended Half year ended As at As at As at
31 December 31 December 31 December 31 December 30 June
2014 2013 2014 2013 2014
Australian dollar(i) 0.89 0.92 0.82 0.89 0.94
Chilean peso 587 511 607 524 551
Colombian peso 2,037 1,910 2,392 1,927 1,881
Brazilian real 2.40 2.28 2.66 2.34 2.20
South African rand 10.99 10.07 11.55 10.53 10.60
(i) Displayed as US$ to A$1 based on common convention.
Inflation
Inflation had an unfavourable impact on all businesses and reduced Underlying EBIT by US$359 million
during the period. This was most notable in Australia, Chile and South Africa, which accounted for over
85 per cent of the total variance.
Fuel and energy
A reduction in diesel prices and lower consumption, particularly in our Iron Ore and Coal Businesses,
supported a US$233 million increase in Underlying EBIT.
Non-cash
An increase in non-cash charges reduced Underlying EBIT by US$938 million during the December 2014
half year. Impairment charges associated with the divestment of conventional petroleum assets in North
Louisiana and unconventional gas assets in the Pecos field in the Permian totalled US$328 million. An
increase in non-cash charges in our Copper Business reduced Underlying EBIT by US$442 million and
reflected a lower capitalisation rate for deferred stripping at Escondida and Pampa Norte.
Asset sales
The contribution of asset sales to Underlying EBIT was largely unchanged from the prior period.
Ceased and sold operations
Underlying EBIT from ceased and sold operations decreased by US$39 million in the period and largely
reflected the closure of the Nickel West Leinster Perseverance underground mine in November 2013.
Other items
Lower average realised prices received by our equity accounted investments and transaction costs
associated with the proposed demerger accounted for the US$197 million decrease in Underlying EBIT
reported in other items.
Net finance costs
Net finance costs decreased by US$296 million to US$232 million. The decrease reflected foreign
exchange gains on finance leases and the early redemption of the Petrohawk Energy Corporation Senior
Notes in August 2014, resulting in a gain on redemption and lower interest expense.
Taxation expense
The Group’s adjusted effective tax rate, which excludes the influence of exchange rate movements,
remeasurement of deferred tax assets associated with the Minerals Resource Rent Tax (MRRT) and
exceptional items, was 31.3 per cent (31 December 2013: 32.5 per cent). This adjusted effective tax rate is
expected to remain in the range of 30 per cent to 34 per cent for the 2015 financial year.
Total taxation expense, including royalty-related taxation, exceptional items and exchange rate movements,
was US$3.8 billion, representing a statutory effective tax rate of 44.2 per cent (31 December 2013: 28.4 per
cent).
Government imposed royalty arrangements calculated by reference to profits are reported as royalty-
related taxation. The MRRT increased taxation expense by US$643 million in the December 2014 half year
(December 2013 half year: decrease of US$462 million). This included an exceptional item of US$809
million tax expense (December 2013 half year: US$ nil) for the derecognition of deferred tax assets upon
the repeal of the MRRT legislation in Australia.
Exchange rate movements increased taxation expense by US$290 million (December 2013 half year:
decrease of US$46 million).
Half year ended 31 December 2013 2014 2013
Profit Income tax Profit Income tax
before tax expense before tax expense
US$M US$M % US$M US$M %
Statutory effective tax rate 8,585 (3,792) 44.2% 12,405 (3,518) 28.4%
Adjusted for:
Exchange rate movements - 290 - (46)
Remeasurement of deferred tax
assets associated with the MRRT - - - (491)
Exceptional items 409 690 (551) 205
Adjusted effective tax rate 8,994 (2,812) 31.3% 11,854 (3,850) 32.5%
Other royalty and excise arrangements which are not profit based are recognised as operating costs within
Profit before taxation. These amounted to US$1.1 billion during the period (December 2013 half year:
US$1.4 billion).
Exceptional Items
Half year ended 31 December 2014 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Repeal of Minerals Resource Rent Tax legislation – (809) (809)
Impairment of Nickel West assets (409) 119 (290)
(409) (690) (1,099)
Repeal of Minerals Resource Rent Tax legislation
On 2 September 2014, legislation to repeal the Minerals Resource Rent Tax (MRRT) in Australia received
the support of both Houses of Parliament and took effect on 30 September 2014. As a result, the Group
derecognised an MRRT deferred tax asset of US$809 million (after tax consequences) and a
corresponding taxation charge of US$809 million was recognised in the December 2014 half year.
Impairment of Nickel West assets
On 12 November 2014, the Group announced that the review of its Nickel West business was complete
and the preferred option, the sale of the business, was not achieved on an acceptable basis. As a result of
operational decisions made subsequent to the conclusion of this process, an impairment charge of US$290
million (after tax benefit) was recognised in the December 2014 half year.
Cash flows
Free cash flow, comprising net operating cash flows less net investing cash flows, increased by US$709
million to US$4.1 billion during the period.
Net operating cash flows after interest and tax decreased by 12 per cent to US$10.4 billion for the period.
The major contributor was the US$1.5 billion decrease in cash generated from operations (after changes in
working capital balances).
Net investing cash outflows decreased by US$2.1 billion to US$6.3 billion for the period and reflected a
US$1.9 billion reduction in capital and exploration expenditure. Expenditure on major projects totalled
US$5.2 billion, including US$2.5 billion on Petroleum projects and US$2.7 billion on Minerals projects.
Sustaining capital expenditure and other items totalled US$1.6 billion. Exploration expenditure was US$422
million, including US$359 million classified within net operating cash flows.
Net financing cash flows changed from a net inflow of US$1.8 billion to a net outflow of US$6.8 billion
primarily due to a decrease in proceeds from borrowings of US$5.2 billion. An increase in repayments of
interest bearing liabilities of US$1.7 billion and a decrease in contributions from non-controlling interests of
US$1.3 billion also contributed to the change during the period.
Net debt, comprising interest bearing liabilities less cash, finished the period at US$24.9 billion, a decrease
of US$847 million compared to the net debt position at 30 June 2014.
Dividend
BHP Billiton has a progressive dividend policy. The aim of this policy is to at least maintain or steadily
increase our base dividend in US dollars terms at each half-yearly payment. Our Board today determined to
pay an interim dividend of 62 US cents per share. We will seek to steadily increase or at least maintain the
dividend per share in US dollar terms at each half-yearly payment following the proposed demerger,
implying a higher payout ratio.
The interim dividend to be paid by BHP Billiton Limited will be fully franked for Australian taxation purposes.
Dividends for the BHP Billiton Group are determined in US dollars. However, BHP Billiton Limited dividends
are mainly paid in Australian dollars, and BHP Billiton Plc dividends are mainly paid in pounds sterling and
South African rand to shareholders on the UK section and the South African section of the register,
respectively. Currency conversions will be based on the foreign currency exchange rates on the Record
Date, except for the conversion into South African rand, which will take place on the last day to trade (cum
dividend) on JSE Limited, being 6 March 2015. Please note that all currency conversion elections must be
registered by the Record Date, being 13 March 2015. Any currency conversion elections made after this
date will not apply to this interim dividend.
The timetable in respect of this dividend will be:
Last day to trade cum dividend on JSE Limited (JSE) and currency conversion into rand 6 March 2015
Ex-dividend Date JSE 9 March 2015
Ex-dividend Date Australian Securities Exchange (ASX) and New York Stock Exchange
(NYSE) 11 March 2015
Ex-dividend Date London Stock Exchange (LSE) 12 March 2015
Record Date (including currency conversion and currency election dates for Australian and
London stock exchanges) 13 March 2015
Payment Date 31 March 2015
American Depositary Shares (ADSs) each represent two fully paid ordinary shares receive dividends
accordingly.
BHP Billiton Plc shareholders registered on the South African section of the register will not be able to
dematerialise or rematerialise their shareholdings between the dates of 9 and 13 March 2015 (inclusive),
nor will transfers between the UK register and the South African register be permitted between the dates of
6 and 13 March 2015 (inclusive).
Details of the currency exchange rates applicable for the dividend will be announced to the relevant stock
exchanges following conversion and will appear on the Group’s website.
Debt management and liquidity
In August 2014, the Group redeemed all outstanding Petrohawk Energy Corporation 7.25 per cent Senior
Notes due August 2018 and 6.25 per cent Senior Notes due June 2019 at the applicable call prices. The
aggregate principal value of the notes redeemed was approximately US$1.8 billion.
The Group has a US$6.0 billion commercial paper program backed by a US$6.0 billion revolving credit
facility. The facility has a five year maturity and expiry date in May 2019 with two one-year extension
options. As at 31 December 2014, the Group had US$240 million outstanding in the US commercial paper
market and the Group’s cash and cash equivalents on hand were US$6.1 billion.
Corporate governance
As announced on 19 August 2014, David Crawford retired as an independent, Non-executive Director on
20 November 2014.
On 12 December 2014, we announced the appointment of Ms Carolyn Hewson as Chairman of the
Remuneration Committee. The current members of the Board’s committees are:
Risk and Audit Nomination and Remuneration Sustainability
Committee Governance Committee Committee Committee
Mr L Maxsted (Chair) Mr J Nasser (Chair) Ms C Hewson (Chair) Dr J Schubert (Chair)
Mr M Broomhead Sir J Buchanan Sir J Buchanan Mr M Broomhead
Mr W Murdy Dr J Schubert Mr C Cordeiro Mr M Brinded
Baroness S Vadera Mr P Davies Mr P Davies
Baroness S Vadera Mr K Rumble
On 1 January 2015 the Finance Committee was dissolved and the responsibilities of the former Finance
Committee have been assumed by the Risk and Audit Committee or the Board.
Business summary(i)
A summary of the performance of the Business for the December 2014 and December 2013 half year is
presented below.
Half year ended Profit from Net Capital
31 December 2014 Revenue (ii) Underlying Exceptional operations operating expenditure Exploration Exploration to
US$ million EBIT(iii) items (EBIT) assets (iv) gross(v) profit(vi)
Petroleum and Potash 6,936 2,144 - 2,144 38,989 2,825 269 257
Copper 6,267 2,208 - 2,208 23,227 1,911 44 44
Iron Ore 8,418 4,200 - 4,200 24,433 1,104 71 16
Coal 4,297 178 - 178 14,784 715 14 14
Aluminium, Manganese and Nickel 4,193 716 (409) 307 8,931 214 24 20
Group and unallocated items(vii) 27 (220) - (220) 702 3 - -
Inter-segment adjustment (238) - - - - - - -
BHP Billiton Group 29,900 9,226 (409) 8,817 111,066 6,772 422 351
Half year ended Profit from Net Capital
31 December 2014 Underlying Exceptional operations operating expenditure Exploration Exploration to
US$ million Revenue (ii) EBIT(iii) items (EBIT) assets (iv) gross(v) profit(vi)
Petroleum and Potash 7,071 2,506 - 2,506 39,111 3,349 308 268
Copper 7,090 2,889 551 3,440 21,780 1,870 72 72
Iron Ore 10,992 6,499 - 6,499 23,446 1,711 78 57
Coal 4,745 510 - 510 14,420 1,407 18 18
Aluminium, Manganese and Nickel 4,160 148 - 148 9,239 250 28 25
Group and unallocated items(vii) 54 (170) - (170) 639 18 - -
Inter-segment adjustment (164) - - - - - - -
BHP Billiton Group 33,948 12,382 551 12,933 108,635 8,605 504 440
(i) Group and business level information is reported on a statutory basis which, in relation to Underlying EBIT, includes net finance
costs and taxation expense related to equity accounted investments.
(ii) Revenue is based on Group realised prices and includes third party products. Sale of third party products by the Group
contributed revenue of US$1,034 million and Underlying EBIT of US$31 million (2013: US$1,739 million and US$85 million).
(iii) Underlying EBIT is earnings before net finance costs, taxation expense and any exceptional items. Underlying EBIT includes
the Group’s share of net finance costs and taxation expense of US$269 million related to equity accounted investments (2013:
net finance costs and taxation expense of US$367 million).
(iv) Capital expenditure is presented on a cash basis and excludes capitalised interest and capitalised exploration. Comparative
period capital expenditure was previously reported on an accruals basis and has been restated on a cash basis.
(v) Includes US$63 million capitalised exploration (2013: US$162 million).
(vi) Includes a net reversal of US$8 million exploration expenditure previously capitalised, written off as impaired (included in
depreciation and amortisation) (2013: US$98 million exploration expenditure previously capitalised, written off as impaired).
(vii) Includes Group Functions, unallocated operations, consolidation adjustments and external sales of freight and fuel to third
parties.
Petroleum and Potash
Total petroleum production increased by nine per cent in the December 2014 half year to a record 131.0
MMboe. A 24 per cent increase in liquids production to 62.1 MMboe was supported by a 71 per cent
increase in Onshore US liquids volumes and strong performance at both Pyrenees and Atlantis. Natural
gas production declined by two per cent to 413 bcf as improved uptime at North West Shelf and Macedon
was offset by lower seasonal demand at Bass Strait and the divestment of Liverpool Bay which was
completed in the 2014 financial year.
Total petroleum production guidance for the 2015 financial year remains unchanged at 255 MMboe.
Underlying EBIT for Petroleum decreased by US$390 million to US$2.2 billion in the December 2014 half
year. Strong volume growth increased Underlying EBIT by US$601 million, although this was offset by
lower average realised petroleum prices which reduced Underlying EBIT by US$754 million, net of price-
linked costs. Impairment charges (non-cash) associated with the divestment of conventional petroleum
assets in North Louisiana and unconventional gas assets in the Pecos field in the Permian reduced
Underlying EBIT by US$328 million.
Petroleum capital expenditure declined by 14 per cent to US$2.6 billion in the December 2014 half year
and included US$1.9 billion of Onshore US drilling and development expenditure. We continue to realise
significant improvements in shale drilling and completions efficiency as drilling costs in the Black Hawk
declined by 17 per cent to US$3.7 million per well during the period and spud to sales timing improved by
11 per cent. In addition to improved capital efficiency, we achieved an eight per cent reduction in unit cash
costs at Onshore US. In our Conventional business, we remain focused on high-return infill drilling
opportunities in the Gulf of Mexico and life extension projects at Bass Strait and North West Shelf.
Onshore US unit costs (US$ million) H1 FY15 H1 FY14 FY14
Revenue 2,380 1,827 4,264
Underlying EBITDA 1,385 856 2,270
cash costs (gross) 995 971 1,994
Less: freight 307 355 666
Cash costs (net) 688 616 1,328
Production (MMboe)(i) 61.7 50.9 108.2
Cash cost per boe (US$) 11.15 12.10 12.27
(i) Production volumes are reported net of royalties and are closely aligned with sales volumes.
In response to weaker prices, the Company will reduce its Onshore US operated rig count from 26 at period
end to 16 by the end of the 2015 financial year. The majority of the revised drilling program will be focused
on our liquids-rich Black Hawk acreage with activity in the Permian and Hawkville limited to the retention of
core acreage. The Company’s dry gas development program will be reduced to one operated rig in the
Haynesville, with a focus on continued drilling and completions optimisation ahead of full field development.
The reduction in drilling activity will not impact 2015 financial year production guidance and we remain
confident that shale liquids volumes will rise by approximately 50 per cent in the period. As a result of the
reduction in drilling activity, we now expect Onshore US drilling and development expenditure of
approximately US$3.4 billion for the 2015 financial year, 15 per cent below original guidance of US$4
billion. A further reduction to approximately US$2.2 billion is expected in the 2016 financial year. We
continue to monitor market conditions and will exercise the flexibility within our shale portfolio to maximise
value.
We have concluded the marketing of our Fayetteville acreage and have decided to retain it within our
portfolio to maximise value. The longer-term development of the Fayetteville remains an attractive option
and with the majority of our acreage held by production, we will continue to defer investment for value,
consistent with our long-term outlook for gas prices.
On 16 February 2015, BHP Billiton signed an agreement with Tri-Resources, a subsidiary of the Hashoo
Group, for the sale of our gas business in Pakistan. The transaction is subject to regulatory approval.
December 2014 half year Liquids focused areas Gas focused areas
(December 2013 half year) Eagle Ford Permian Haynesville Fayetteville(i) Total
Capital expenditure(ii) US$ billion 1.2 (1.6) 0.4 (0.2) 0.2 (0.2) 0.1 (0.1) 1.9 (2.1)
Rig allocation At period end 18 (18) 5 (2) 3 (5) 0 (0) 26 (25)
Net wells drilled and completed
(iii) Period total 85 (154) 18 (18) 13 (17) 27 (49) 143 (238)
Net productive wells At period end 732 (544) 49(iv) (46) 406(iv) (879) 1,049 (1,000) 2,236 (2,469)
(i) Fayetteville net wells drilled and completed and net productive wells restated post period end.
(ii) Includes land acquisition, site preparation, drilling, completions, well site facilities, mid-stream infrastructure and pipelines.
(iii)The number of wells drilled and completed can vary significantly from period to period based on changes in rig activity and the
inventory of wells drilled but not yet completed at period end.
(iv) Change in productive well count includes reduction associated with North Louisiana acreage and Pecos acreage divestments.
Petroleum exploration expenditure for the December 2014 half year was US$268 million, of which US$244
million was expensed. Total petroleum exploration expenditure for the 2015 financial year is now forecast to
be US$600 million, a 20 per cent reduction from original guidance. The program will remain focused on the
Gulf of Mexico, Western Australia and Trinidad and Tobago.
The seismic acquisition program in Trinidad and Tobago was successfully completed for the seven deep
water blocks accessed between 2012 and 2014(9). The acquisition for the two blocks awarded in the 2014
deep water bid round is progressing on schedule(10).
Potash recorded an Underlying EBIT loss of US$112 million which was largely unchanged from the prior
period.
On 20 August 2013, BHP Billiton announced an investment of US$2.6 billion to finish the excavation and
lining of the Jansen Potash project production and service shafts, and to continue the installation of
essential surface infrastructure and utilities. The overall project was 39 per cent complete and within the
approved budget at the end of the period.
With our investment premised on the attractive longer-term market fundamentals for potash, we will
continue to review the appropriate pace and level of development activity and capital expenditure for the
project.
Financial information for the Petroleum and Potash Business for the December 2014 and December 2013
half years is presented below.
Half year ended Net
31 December 2014 Underlying D&A Underlying operating Exploration Exploration to
US$ million Revenue EBITDA EBIT assets Capital gross(ii) profit(iii)
(i) expenditure
Bass Strait 860 719 72 647 3,040 191
North West Shelf 1,157 860 101 759 1,892 71
Atlantis 701 641 192 449 2,196 174
Shenzi 611 555 147 408 1,435 97
Mad Dog 105 51 15 36 578 48
Onshore US(iv) 2,380 1,385 1,747 (362) 26,329 1,923
Algeria 203 171 19 152 106 11
UK 21 14 32 (18) (89) -
Exploration - (244) 43 (287) 531 -
Other(v) 862 699 246 453 1,466 89
Total Petroleum 6,900 4,851 2,614 2,237 37,484 2,604 268 256
Potash - (109) 3 (112) 2,507 221 1 1
Other(vi) - 19 - 19 (1,002) - - -
Total Petroleum and Potash from
Group production 6,900 4,761 2,617 2,144 38,989 2,825 269 257
Third party products 44 - - - - -
Total Petroleum and Potash 6,944 4,761 2,617 2,144 38,989 2,825 269 257
Statutory adjustments(vii) (8) (2) (2) - - - - -
Total Petroleum and Potash
statutory result 6,936 4,759 2,615 2,144 38,989 2,825 269 257
Half year ended Net
31 December 2013 Revenue Underlying Underlying operating Capital Exploration Exploration to
US$ million (i) EBITDA D&A EBIT assets expenditure gross(ii) profit(iii)
Bass Strait 948 779 65 714 2,912 142
North West Shelf 1,230 871 80 791 1,834 86
Atlantis 718 663 155 508 2,339 273
Shenzi 695 634 114 520 1,504 110
Mad Dog 126 114 8 106 486 35
Onshore US 1,827 856 1,154 (298) 26,247 2,143
Algeria 249 218 16 202 86 14
UK(viii) 82 (68) 32 (100) (47) 6
Exploration - (147) 125 (272) 491 -
Other(v) 916 684 234 450 1,939 235
Total Petroleum 6,791 4,604 1,983 2,621 37,791 3,044 285 245
Potash - (110) 3 (113) 2,007 305 23 23
Other(vi) 6 (8) - (8) (687) - - -
Total Petroleum and Potash from
Group production 6,797 4,486 1,986 2,500 39,111 3,349 308 268
Third party products 281 6 - 6 - -
Total Petroleum and Potash 7,078 4,492 1,986 2,506 39,111 3,349 308 268
Statutory adjustments(vii) (7) (2) (2) - - - - -
Total Petroleum and Potash
statutory result 7,071 4,490 1,984 2,506 39,111 3,349 308 268
(i) Petroleum revenue from Group production includes: crude oil US$4,001 million (2013: US$4,076 million), natural gas
US$1,439 million (2013: US$1,380 million), LNG US$833 million (2013: US$803 million), NGL US$429 million (2013: US$420
million) and other US$190 million (2013: US$105 million).
(ii) Includes US$24 million of capitalised exploration (2013: US$138 million).
(iii) Includes US$12 million of exploration expenditure previously capitalised, written off as impaired (included in D&A) (2013:
US$98 million).
(iv) Includes US$328 million of impairments as a result of the divestment of assets in North Louisiana and the Pecos field in the
Permian.
(v) Includes Macedon, Pyrenees, Stybarrow, Neptune, Minerva, Angostura, Genesis, Pakistan, divisional activities and business
development. Also includes the Caesar oil pipeline and the Cleopatra gas pipeline which are equity accounted investments and
are reported on a proportionate consolidation basis (with the exception of net operating assets).
(vi) Includes closed mining and smelting operations in Canada and the United States.
(vii) Includes statutory adjustments for the Caesar oil pipeline and the Cleopatra gas pipeline to reconcile the proportionately
consolidated business total to the statutory result.
(viii)Includes an expense of US$115 million incurred in November 2013 related to the closure of the UK pension plan. Also
includes Liverpool Bay which was divested in March 2014.
Copper
Total copper production(11) decreased by two per cent in the December 2014 half year to 813 kt.
Escondida copper production decreased by two per cent to 553 kt as strong operating performance was
offset by the impact of water restrictions, two days of industrial action and a power outage throughout
Northern Chile. Pampa Norte production increased by 22 per cent to 125 kt as Spence benefited from
higher grades and recoveries while Olympic Dam copper production increased by four per cent to 82 kt.
Antamina copper production declined by 37 per cent to 53 kt as lower grades more than offset record mill
throughput for the period, consistent with the mine plan.
BHP Billiton total copper production guidance for the 2015 financial year is under review following an
electrical failure which caused a mill outage at Olympic Dam in February 2015. The mill is expected to be
offline for approximately six months with an associated reduction in copper production of between 60 to 70
kt. An update will be provided in the March 2015 Operational Review. Escondida remains on track to
deliver 1.27 Mt of copper production in the 2015 financial year.
Underlying EBIT for the December 2014 half year declined by US$681 million to US$2.2 billion. Lower
average realised prices decreased Underlying EBIT by US$763 million, net of price-linked costs. In
contrast, productivity-led cost efficiencies increased Underlying EBIT by US$677 million. In this context,
Escondida unit cash costs declined by 13 per cent as the operation benefited from significant productivity
improvements, which included a 14 per cent increase in truck utilisation.
Escondida unit costs (US$ million) H1 FY15 H1 FY14 FY14
Revenue 3,720 4,277 8,085
Underlying EBITDA 2,127 2,562 4,754
Cash costs (gross) 1,593 1,715 3,331
Less: freight 61 70 139
Less: treatment and refining charges 211 156 341
Cash costs (net)(i) 1,321 1,489 2,851
Sales (kt, equity share)(ii) 563 553 1,116
Sales (Mlb, equity share)(ii) 1,241 1,219 2,460
Cash cost per pound (US$) 1.06 1.22 1.16
(i) Royalties are reported within taxation expense.
(ii)Sales volumes adjusted to exclude intercompany sales and purchases.
An increase in non-cash charges reduced Underlying EBIT by US$442 million and reflected a lower
capitalisation rate for deferred stripping at Escondida and Pampa Norte, consistent with mine plans. Lower
volumes and average realised prices at Antamina contributed to a reduction in our share of profit after tax
from equity accounted investments which reduced Underlying EBIT by a further US$170 million.
The Escondida Oxide Leach Area Project was successfully completed during the December 2014 half year
on revised schedule and budget. The Escondida Organic Growth Project 1 (OGP1) remains on schedule to
commence first production in the first half of the 2015 calendar year and will create 152 kt per day of
valuable copper concentrator capacity. Following the commissioning of OGP1, we have the option to
extend the life of the Los Colorados concentrator enabling the utilisation of three concentrators. The
Escondida Water Supply project, which is on schedule for commissioning in the 2017 calendar year, is a
critical component of our three concentrator strategy as we balance increasing water requirements with our
commitment to ensure sustainable use of aquifers.
Financial information for the Copper Business for the December 2014 and December 2013 half years is
presented below.
Half year ended Net
31 December 2014 Underlying Underlying operating Capital Exploration Exploration to
US$ million Revenue EBITDA D&A EBIT assets expenditure gross profit
Escondida(i) 3,720 2,127 418 1,709 12,862 1,671
Pampa Norte(ii) 794 447 222 225 2,400 95
Antamina(iii) 467 250 52 198 1,391 101
Cannington 486 191 29 162 192 14
Olympic Dam 797 138 132 6 6,408 131
Other(iii)(iv) - (58) 4 (62) (26) -
Total Copper from
Group production 6,264 3,095 857 2,238 23,227 2,012
Third party products 470 11 - 11 - -
Total Copper 6,734 3,106 857 2,249 23,227 2,012 45 45
Statutory adjustments(v) (467) (94) (53) (41) - (101) (1) (1)
Total Copper
statutory result 6,267 3,012 804 2,208 23,227 1,911 44 44
Half year ended Net
31 December 2013 Underlying Underlying operating Capital Exploration Exploration to
US$ million Revenue EBITDA D&A EBIT assets expenditure gross profit
Escondida(i) 4,277 2,562 322 2,240 11,021 1,560
Pampa Norte(ii) 835 333 179 154 2,651 199
Antamina(iii) 774 535 44 491 1,412 148
Cannington 605 277 21 256 244 32
Olympic Dam 758 108 130 (22) 6,499 71
Other(iii)(iv) 74 (49) 3 (52) (47) 8
Total Copper from
Group production 7,323 3,766 699 3,067 21,780 2,018
Third party products 541 3 - 3 - -
Total Copper 7,864 3,769 699 3,070 21,780 2,018 74 74
Statutory adjustments(v) (774) (225) (44) (181) - (148) (2) (2)
Total Copper
statutory result 7,090 3,544 655 2,889 21,780 1,870 72 72
(i) Escondida is consolidated under IFRS 10 and reported on a 100 per cent basis.
(ii) Includes Spence and Cerro Colorado.
(iii)Antamina and Resolution are equity accounted investments and are reported on a proportionate consolidation basis (with the
exception of net operating assets).
(iv) Predominantly comprises divisional activities, greenfield exploration, business development and ceased and sold operations.
Includes Pinto Valley and Resolution. Pinto Valley was sold effective 11 October 2013.
(v) Includes statutory adjustments for Antamina and Resolution to reconcile the proportionately consolidated business total to the
statutory result. Statutory Underlying EBIT includes net finance costs and taxation expense of US$41 million (2013: net finance
costs and taxation expense of US$181 million).
Iron Ore
Iron ore production increased by 16 per cent in the December 2014 half year to a record 113 Mt. Western
Australia Iron Ore (WAIO) production increased by 15 per cent to a record 124 Mt (100 per cent basis) as
the ramp-up of Jimblebar continued and we improved the availability, utilisation and rate of our integrated
supply chain. WAIO also achieved record sales volumes of 126 Mt (100 per cent basis) as our strategy of
increasing the percentage of direct to ship ore unlocks further port capacity. Samarco production increased
by 29 per cent to a record 14 Mt (100 per cent basis) as the ramp-up of the fourth pellet plant continues to
plan.
Total iron ore production guidance for the 2015 financial year remains unchanged at 225 Mt. Our WAIO
business continues to perform strongly and we have maintained production guidance of 245 Mt (100 per
cent basis) for the 2015 financial year.
Underlying EBIT for the December 2014 half year decreased by US$2.3 billion to US$4.2 billion. Lower
average realised prices reduced Underlying EBIT by US$4.3 billion, net of price-linked costs. In contrast,
record sales volumes and a substantial reduction in controllable cash costs increased Underlying EBIT by
US$1.2 billion and US$727 million, respectively. In this context, WAIO reduced its unit cash costs by 29 per
cent to US$20.35 per tonne as the operation benefited from economies of scale, a reduction in overhead,
contractor, labour and maintenance costs and a stronger US dollar. As a result of these substantial gains,
WAIO is well placed to achieve its targeted reduction in unit costs to below US$20 per tonne(12) ahead of
schedule.
WAIO unit costs (US$ million) H1 FY15 H1 FY14 FY14
Revenue 8,193 10,786 20,883
Underlying EBITDA 4,778 6,787 12,966
Cash costs (gross) 3,415 3,999 7,917
Less: freight 658 625 1,274
Less: royalties 554 744 1,497
Cash costs (net) 2,203 2,630 5,146
Sales (kt, equity share) 108,245 91,327 190,843
Cash cost per tonne (US$) 20.35 28.80 26.96
The tie-in of shiploader 2 at WAIO was successfully completed in January 2015. There are currently no
major projects in execution at WAIO and further growth in supply chain capacity to 270 Mtpa (100 per cent
basis) is expected to be achieved without the need for additional fixed plant investment. Beyond that, the
Inner Harbour Debottlenecking and Jimblebar Phase 2 projects(13) have the potential to increase total
capacity to 290 Mtpa (100 per cent basis) by the end of the 2017 financial year at very low capital cost.
Financial information for the Iron Ore business for the December 2014 and December 2013 half years is
presented below.
Half year ended Net
31 December 2014 Underlying Underlying operating Capital Exploration Exploration to
US$ million Revenue EBITDA D&A EBIT assets expenditure gross profit
Western Australia Iron Ore 8,193 4,778 791 3,987 23,289 1,090
Samarco(i) 828 420 54 366 1,036 165
Other(ii) 73 4 1 3 108 14
Total Iron Ore from
Group production 9,094 5,202 846 4,356 24,433 1,269
Third party products(iii) 152 (5) - (5) - -
Total Iron Ore 9,246 5,197 846 4,351 24,433 1,269 71 16
Statutory adjustments(iv) (828) (205) (54) (151) - (165) - -
Total Iron Ore
statutory result 8,418 4,992 792 4,200 24,433 1,104 71 16
Half year ended Net
31 December 2013 Underlying Underlying operating Capital Exploration Exploration to
US$ million Revenue EBITDA D&A EBIT assets expenditure gross profit
Western Australia
Iron Ore(v) 10,786 6,787 585 6,202 22,350 1,711
Samarco(i) 845 458 32 426 901 287
Other(ii)(v) 63 (22) 1 (23) 195 -
Total Iron Ore from
Group production 11,694 7,223 618 6,605 23,446 1,998
Third party products(iii) 143 39 - 39 - -
Total Iron Ore 11,837 7,262 618 6,644 23,446 1,998 78 57
Statutory adjustments(iv) (845) (177) (32) (145) - (287) - -
Total Iron Ore
statutory result 10,992 7,085 586 6,499 23,446 1,711 78 57
(i) Samarco is an equity accounted investment and is reported on a proportionate consolidation basis (with the exception of net
operating assets).
(ii) Predominantly comprises divisional activities, towage services, business development and ceased operations.
(iii)Includes inter-segment and external sales of contracted gas purchases.
(iv) Includes statutory adjustments for Samarco to reconcile the proportionately consolidated business total to the statutory result.
Statutory Underlying EBIT includes net finance costs and taxation expense of US$151 million (2013: net finance costs and
taxation expense of US$145 million).
(v) Comparative period has been restated to reallocate towage services from West Australia Iron Ore to Other.
Coal
Metallurgical coal production increased by 21 per cent in the December 2014 half year to a record 26 Mt.
Queensland Coal delivered record production and sales volumes primarily as a result of increased
equipment utilisation and the successful ramp-up of the Caval Ridge mine. Illawarra Coal also achieved
record production of 4.7 Mt in the December 2014 half year as maintenance efficiencies supported higher
equipment utilisation rates.
Energy coal production decreased by three per cent in the December 2014 half year to 36 Mt. As
anticipated, drought conditions constrained production volumes at Cerrejón given the need to manage dust
emissions, while Navajo Coal production declined following lower customer demand arising from the
closure of three of the five power units at the Four Corners Power Plant. New South Wales Energy Coal
production also declined as a result of processing lower-yield coal during the period and an additional
planned wash-plant outage. At South Africa Energy Coal, higher wash-plant utilisation contributed to a 10
per cent increase from the December 2013 half year which was affected by industrial action.
Metallurgical coal production guidance for the 2015 financial year remains unchanged at 47 Mt ahead of
the wet season and planned longwall moves at the Crinum, Dendrobium and West Cliff underground
mines. Energy coal production guidance for the 2015 financial year remains unchanged at 73 Mt.
Underlying EBIT for the December 2014 half year declined by US$332 million to US$178 million. Lower
average realised prices reduced Underlying EBIT by US$715 million, net of price-linked costs, although this
was partially offset by a stronger US dollar which increased Underlying EBIT by US$156 million.
A reduction in controllable cash costs increased Underlying EBIT by US$252 million during the period. At
Queensland Coal, unit cash costs declined by 15 per cent to US$70.75 per tonne as the operation
benefited from increased equipment and wash-plant utilisation rates and a continued focus on labour,
contractor and maintenance productivity.
Queensland Coal unit costs (US$ million) H1 FY15 H1 FY14 FY14
Revenue 2,251 2,397 4,666
Underlying EBITDA 478 614 949
Cash costs (gross) 1,773 1,783 3,717
Less: freight 111 121 237
Less: royalties 146 173 331
Cash costs (net) 1,516 1,489 3,149
Sales (kt, equity share) 21,428 17,973 37,461
Cash cost per tonne (US$) 70.75 82.85 84.06
On 12 January 2015, the BMA Hay Point Stage Three Expansion project loaded first coal on revised
schedule and budget. The Appin Area 9 project remains on schedule and budget.
Financial information for the Coal Business for the December 2014 and December 2013 half years is
presented below.
Half year ended Net
31 December 2014 Underlying Underlying operating Capital Exploration Exploration to
US$ million Revenue EBITDA D&A EBIT assets expenditure gross profit
Queensland Coal 2,251 478 331 147 9,450 369
Illawarra(i) 425 132 101 31 1,534 180
Energy Coal South Africa(i) 683 93 94 (1) 1,014 58
New Mexico 298 86 23 63 250 13
New South Wales Energy Coal(i) 640 136 78 58 1,419 108
Colombia(i) 383 121 56 65 938 54
Other(ii) - (64) 1 (65) 174 8
Total Coal from Group production 4,680 982 684 298 14,779 790
Third party products 69 8 - 8 5 -
Total Coal 4,749 990 684 306 14,784 790 14 14
Statutory adjustments(iii) (452) (201) (73) (128) - (75) - -
Total Coal
statutory result 4,297 789 611 178 14,784 715 14 14
Half year ended Net
31 December 2013 Underlying Underlying operating Capital Exploration Exploration to
US$ million Revenue EBITDA D&A EBIT assets expenditure gross profit
Queensland Coal 2,397 614 242 372 9,025 1,073
Illawarra(i) 410 68 78 (10) 1,313 171
Energy Coal South Africa(i) 639 65 98 (33) 1,313 29
New Mexico 278 52 23 29 132 15
New South Wales Energy Coal(i) 704 223 72 151 1,446 108
Colombia(i) 443 171 42 129 1,015 88
Other(ii) - (67) - (67) 147 30
Total Coal from Group production 4,871 1,126 555 571 14,391 1,514
Third party products 317 22 - 22 29 -
Total Coal 5,188 1,148 555 593 14,420 1,514 19 19
Statutory adjustments(iii) (443) (139) (56) (83) - (107) (1) (1)
Total Coal
statutory result 4,745 1,009 499 510 14,420 1,407 18 18
(i) Cerrejon, Newcastle Coal Infrastructure Group, Port Kembla Coal Terminal and Richards Bay Coal Terminal are equity
accounted investments and are reported on a proportionate consolidation basis (with the exception of net operating assets).
(ii) Predominantly comprises divisional activities and greenfield projects.
(iii)Includes statutory adjustments for Cerrejon, Newcastle Coal Infrastructure Group, Port Kembla Coal Terminal and Richards
Bay Coal Terminal to reconcile the proportionately consolidated business total to the statutory result. Statutory Underlying EBIT
includes net finance income and taxation expense of US$77 million (2013: net finance income and taxation expense of US$41
million).
Aluminium, Manganese and Nickel
Alumina production was broadly unchanged in the December 2014 half year at 2.6 Mt and included record
production at the Alumar refinery. Worsley achieved record production in the December 2014 quarter as it
recovered from a series of calciner outages in the prior period. Aluminium production decreased by 16 per
cent in the December 2014 half year to 517 kt as the suspension of smelter capacity at Alumar and
cessation of smelting activities at Bayside during the 2014 financial year more than offset record production
at Mozal.
Manganese ore production increased by seven per cent in the December 2014 half year to a record 4.6 Mt
as an improvement in ore recovery at Mamatwan and an increase in plant availability at Wessels
underpinned record production at Hotazel. Manganese alloy production increased by 23 per cent in the
December 2014 half year, supported by increased smelter stability and availability at both TEMCO and
Metalloys.
Nickel production declined by 11 per cent in the December 2014 half year to 70 kt. Lower volumes reflected
the closure of the Perseverance underground mine at Nickel West in November 2013 and lower grades and
recoveries at Cerro Matoso. Nickel West and Cerro Matoso production guidance for the 2015 financial year
remains unchanged at 95 kt and 43 kt, respectively. Approximately 55 per cent of Nickel West production is
expected to be sourced from third party feed.
Underlying EBIT for the December 2014 half year increased by US$568 million to US$716 million. Higher
average realised prices for alumina, aluminium and nickel, net of price-linked costs, and a stronger US
dollar increased Underlying EBIT by US$368 million and US$170 million, respectively. A reduction in
controllable cash costs increased Underlying EBIT by a further US$51 million and reflected a continued
focus on labour and contractor productivity.
On 12 November 2014, the Group announced that the review of its Nickel West business was complete
and the preferred option, the sale of the business, was not achieved on an acceptable basis. As a result of
operational decisions made subsequent to the conclusion of this process, an impairment charge of US$290
million (after tax benefit) was recognised in the December 2014 half year as an exceptional item. At this
time, Nickel West remains in the BHP Billiton portfolio and the Company continues to operate the business
to maximise production, reduce operating costs and increase free cash flow.
In contemplation of the proposed demerger, BHP Billiton and Anglo American agreed to make certain
changes to the agreement which governs their interests in the Manganese business. Subject to obtaining
the required approvals for the agreement, the changes will result in BHP Billiton and Anglo American
agreeing to share joint control of the Manganese business. BHP Billiton will discontinue consolidation of the
Manganese business and account for its 60 per cent interest as an equity accounted joint venture. BHP
Billiton will therefore derecognise the existing carrying amounts of all assets, liabilities and the non-
controlling interest in the Manganese business attributed to Anglo American and initially record its retained
60 per cent interest at fair value. The remeasurement at fair value will give rise to an estimated gain of
approximately US$2 billion. There are no tax consequences arising from the remeasurement of the
Manganese business.
Financial information for the Aluminium, Manganese and Nickel Business for the December 2014 and
December 2013 half years is presented below.
Half year ended Net
31 December 2014 Underlying Underlying operating Capital Exploration Exploration to
US$ million Revenue EBITDA D&A EBIT assets expenditure gross profit
Alumina 860 227 106 121 4,187 30
Aluminium 1,222 384 61 323 2,037 17
Intra-divisional adjustment (332) - - - - -
1,750 611 167 444 6,224 47
Manganese 952 294 89 205 1,693 94
Nickel West 792 71 65 6 80 55
Cerro Matoso 340 113 27 86 854 18
Other(i) - (40) 2 (42) 80 -
Total Aluminium, Manganese and
Nickel from Group production 3,834 1,049 350 699 8,931 214
Third party products 359 17 - 17 - -
Total Aluminium, Manganese and
Nickel 4,193 1,066 350 716 8,931 214 24 20
Half year ended Net
31 December 2013 Underlying Underlying operating Capital Exploration Exploration to
US$ million Revenue EBITDA D&A EBIT assets expenditure gross profit
Alumina 699 133 95 38 3,578 22
Aluminium 1,219 101 62 39 2,364 16
Intra-divisional adjustment (342) - - - - -
1,576 234 157 77 5,942 38
Manganese 1,027 302 66 236 1,686 90
Nickel West 761 (94) 57 (151) 598 88
Cerro Matoso 315 43 42 1 937 34
Other(i) - (29) 1 (30) 76 -
Total Aluminium, Manganese and
Nickel from Group production 3,679 456 323 133 9,239 250
Third party products 481 15 - 15 - -
Total Aluminium, Manganese and
Nickel 4,160 471 323 148 9,239 250 28 25
(i) Predominantly comprises divisional activities and business development.
The financial report on pages 29 to 51 has been prepared in accordance with IFRS. This news release including the
financial report is unaudited. Variance analysis relates to the relative financial and/or production performance of BHP
Billiton and/or its operations during the December 2014 half year compared with the December 2013 half year, unless
otherwise noted.
The following abbreviations may have been used throughout this report: barrels (bbl); billion cubic feet (bcf); barrels of
oil equivalent (boe); cost and freight (CFR); cost, insurance and freight (CIF), dry metric tonne unit (dmtu); free on
board (FOB); grams per tonne (g/t); kilograms per tonne (kg/t); kilometre (km); metre (m); million barrels of oil
equivalent (MMboe); thousand cubic feet equivalent (Mcfe); million cubic feet per day (MMcf/d); million pounds (Mlb;
million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); pounds (lb); thousand barrels of oil equivalent
(Mboe); thousand ounces (koz); thousand standard cubic feet (Mscf); thousand tonnes (kt); thousand tonnes per
annum (ktpa); thousand tonnes per day (ktpd); tonnes (t); and wet metric tonnes (wmt).
The following footnotes apply to this profit release:
(1) Underlying attributable profit, Underlying EBIT and Underlying EBITDA are used to reflect the underlying
performance of BHP Billiton. Underlying attributable profit is Attributable profit excluding any exceptional items.
Underlying EBIT is earnings before net finance costs, taxation and any exceptional items. Underlying EBITDA is
Underlying EBIT before depreciation, impairments and amortisation of US$5,268 million for the half year ended
31 December 2014 and US$4,136 million for the half year ended 31 December 2013. We believe that Underlying
attributable profit, Underlying EBIT and Underlying EBITDA provide useful information, but should not be
considered as an indication of, or as an alternative to, Attributable profit as an indicator of actual operating
performance or as an alternative to cash flow as a measure of liquidity.
Underlying EBIT includes net finance costs and taxation expense related to equity accounted investments of
US$269 million (2013: US$367 million).
Underlying EBITDA includes depreciation, impairments and amortisation related to equity accounted investments
of US$182 million (2013: US$134 million).
(2) Non-IFRS measures are defined as follows:
- Adjusted effective tax rate – comprises Total taxation expense excluding remeasurement of deferred tax
assets associated with the Minerals Resource Rent Tax (MRRT), exceptional items and exchange rate
movements included in taxation expense divided by Profit before taxation and exceptional items.
- Free cash flow – comprises net operating cash flows less net investing cash flows.
- Net debt – comprises Interest bearing liabilities less Cash and cash equivalents.
- Net operating assets – represents operating assets net of operating liabilities including the carrying value of
equity accounted investments and predominantly excludes cash balances, interest bearing liabilities and
deferred tax balances. The carrying value of investments accounted for using the equity accounted method
represents the balance of the Group’s investment in equity accounted investments, with no adjustment for any
cash balances, interest bearing liabilities and deferred tax balances of the equity accounted investment.
- Underlying attributable profit – comprises Profit after taxation attributable to members of BHP Billiton Group
less exceptional items as described in note 3 to the financial report.
- Underlying basic earnings per share – represents basic earnings per share excluding any exceptional items.
- Underlying EBIT margin – comprises Underlying EBIT excluding third party product profit from operations,
divided by revenue excluding third party product revenue.
- Underlying EBITDA interest coverage – for the purpose of deriving interest coverage, net interest comprises
Interest on bank loans and overdrafts, Interest on all other borrowings, Finance lease and hire purchase
interest less Interest income.
- Underlying EBITDA margin – comprises Underlying EBITDA excluding third party product EBITDA, divided by
revenue excluding third party product revenue.
- Underlying return on capital – represents net profit after tax, excluding exceptional items and net finance costs
(after tax), divided by average capital employed. Capital employed is net assets before net debt.
(3) Represents productivity-led volume efficiencies, operating cash cost efficiencies and exploration and business
development savings. Productivity-led volume efficiencies refer to volume increases, excluding volume increases
from major capital projects, multiplied by the prior period EBIT margin. Operating cash cost efficiencies refer to
the reduction in costs, excluding the impact of volume, price-linked costs, exchange rates, inflation, fuel and
energy, non-cash costs, one-off items, ceased and sold operations and other items. Exploration and business
development savings refers to the reduction in total exploration and business development costs including
capitalised exploration.
(4) Represents planned annualised volume and cost productivity gains to be delivered from our core portfolio only,
relative to the 2014 financial year. Core portfolio includes: Western Australia Iron Ore, Samarco, Queensland
Coal, NSW Energy Coal, Cerrejón, Escondida, Olympic Dam, Pampa Norte, Antamina, Onshore US, Shenzi, Mad
Dog, Atlantis, Angostura, North West Shelf, Bass Strait, Pyrenees, Macedon and the Jansen project.
(5) Represents the share of capital and exploration expenditure attributable to BHP Billiton shareholders on a cash
basis. Includes BHP Billiton proportionate share of equity accounted investments; excludes capitalised deferred
stripping and non-controlling interests. Capitalised deferred stripping of US$1.0 billion to US$1.3 billion (BHP
Billiton share) expected in the 2015 and 2016 financial years.
(6) Ungeared, post tax, nominal rate of return for our future investments; valuation date 1 January 2015.
(7) Underlying payout ratio – represents dividends and buy-backs, divided by Underlying attributable profit.
(8) Refers to copper equivalent production based on average realised prices for the 2013 financial year.
(9) 17,687 square kilometres 3D seismic acquisition completed over Trinidad and Tobago Blocks 5, 6, 14, 23a, 23b,
28 and 29.
(10)3,528 square kilometres 3D seismic acquisition in progress over Trinidad and Tobago Blocks 3 and 7.
(11)Excludes Pinto Valley which was sold during the 2014 financial year.
(12)Unit cash cost target based on real 2014 terms, AUD:USD exchange rate of 0.91.
(13)Subject to Board approval.
Forward looking statements
This release contains forward-looking statements, including statements regarding: trends in commodity prices and
currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or
divestment of certain operations or facilities (including associated costs); anticipated production or construction
commencement dates; capital costs and scheduling; operating costs and shortages of materials and skilled
employees; anticipated productive lives of projects, mines and facilities; provisions and contingent liabilities; tax and
regulatory developments.
Forward-looking statements can be identified by the use of terminology such as ‘intend’, ‘aim’, ‘project’, ‘anticipate’,
‘estimate’, ‘plan’, ‘believe’, ‘expect’, ‘may’, ‘should’, ‘will’, ‘continue’, ‘annualised’ or similar words. These statements
discuss future expectations concerning the results of operations or financial condition, or provide other forward-looking
statements.
These forward-looking statements are not guarantees or predictions of future performance, and involve known and
unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual
results to differ materially from those expressed in the statements contained in this release. Readers are cautioned not
to put undue reliance on forward-looking statements.
For example, our future revenues from our operations, projects or mines described in this release will be based, in
part, upon the market price of the minerals, metals or petroleum produced, which may vary significantly from current
levels. These variations, if materially adverse, may affect the timing or the feasibility of the development of a particular
project, the expansion of certain facilities or mines, or the continuation of existing operations.
Other factors that may affect the actual construction or production commencement dates, costs or production output
and anticipated lives of operations, mines or facilities include our ability to profitably produce and transport the
minerals, petroleum and/or metals extracted to applicable markets; the impact of foreign currency exchange rates on
the market prices of the minerals, petroleum or metals we produce; activities of government authorities in some of the
countries where we are exploring or developing these projects, facilities or mines, including increases in taxes,
changes in environmental and other regulations and political uncertainty; labour unrest; and other factors identified in
the risk factors discussed in BHP Billiton’s filings with the U.S. Securities and Exchange Commission (the “SEC”)
(including in Annual Reports on Form 20-F) which are available on the SEC’s website at www.sec.gov.
Except as required by applicable regulations or by law, the Group does not undertake any obligation to publicly update
or review any forward-looking statements, whether as a result of new information or future events.
Non-IFRS financial information
BHP Billiton results are reported under International Financial Reporting Standards (IFRS) including Underlying EBIT
and Underlying EBITDA which are used to measure segment performance. This release may also include certain non-
IFRS measures including Adjusted effective tax rate, Free cash flow, Net debt, Net operating assets, Underlying
attributable profit, Underlying basic earnings per share, Underlying EBIT margin, Underlying EBITDA interest
coverage, Underlying EBITDA margin, and Underlying return on capital. These measures are used internally by
management to assess the performance of our business, make decisions on the allocation of our resources and
assess operational management. Non-IFRS measures have not been subject to audit or review and should not be
considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.
No offer of securities
Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell BHP
Billiton securities or securities in the new company (if the demerger is implemented) in any jurisdiction, or be treated or
relied upon as a recommendation or advice by BHP Billiton.
Reliance on third party information
The views expressed in this release contain information that has been derived from publicly available sources that
have not been independently verified. No representation or warranty is made as to the accuracy, completeness or
reliability of the information. This release should not be relied upon as a recommendation or forecast by BHP Billiton.
No financial or investment advice – South Africa
BHP Billiton does not provide any financial or investment 'advice' as that term is defined in the South African Financial
Advisory and Intermediary Services Act, 37 of 2002, and we strongly recommend that you seek professional advice.
Sponsor: Merrill Lynch South Africa Proprietary Limited
Further information on BHP Billiton can be found on our website: www.bhpbilliton.com
Media Relations Investor Relations
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Emily Perry Tara Dines
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Eleanor Nichols United Kingdom and South Africa
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email: Eleanor.Nichols@bhpbilliton.com Jonathan Price
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email: Jennifer.White@bhpbilliton.com James Agar
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BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209
Registered in Australia Registered in England and Wales
Registered Office: Level 16, 171 Collins Street Registered Office: Neathouse Place
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Members of the BHP Billiton Group which is headquartered in Australia
BHP Billiton Group
Financial Report
For the half year ended 31 December 2014
Contents
Half Year Financial Statements Page
Consolidated Income Statement 33
Consolidated Statement of Comprehensive Income 34
Consolidated Balance Sheet 35
Consolidated Cash Flow Statement 36
Consolidated Statement of Changes in Equity 37
Notes to the Half Year Financial Statements 40
1. Accounting policies 40
2. Segment reporting 41
3. Exceptional items 43
4. Interests in associates and joint venture entities 44
5. Net finance costs 44
6. Taxation 45
7. Earnings per share 45
8. Dividends 46
9. Financial risk management – Fair values 47
10. Significant events 52
11. Subsequent events 53
Directors’ Report 54
Directors’ Declaration of Responsibility 56
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 58
Independent Review Report 59
Consolidated Income Statement
for the half year ended 31 December 2014
Notes Half year ended Half year ended Year ended
31 Dec 31 Dec 30 June
2014 2013 2014
US$M US$M US$M
Revenue
Group production 28,866 32,209 64,227
Third party products 1,034 1,739 2,979
Revenue 2 29,900 33,948 67,206
Other income 441 973 1,524
Expenses excluding net finance costs (21,862) (22,674) (46,513)
Share of operating profit of equity accounted
investments 4 338 686 1,195
Profit from operations 8,817 12,933 23,412
Comprising:
Group production 8,786 12,848 23,368
Third party products 31 85 44
8,817 12,933 23,412
Financial expenses (292) (589) (1,273)
Financial income 60 61 97
Net finance costs 5 (232) (528) (1,176)
Profit before taxation 8,585 12,405 22,236
Income tax expense (2,848) (3,692) (6,538)
Royalty related taxation (net of income tax
benefit) (944) 174 (474)
Total taxation expense 6 (3,792) (3,518) (7,012)
Profit after taxation 4,793 8,887 15,224
Attributable to non-controlling interests 528 780 1,392
Attributable to members of BHP Billiton Group 4,265 8,107 13,832
Basic earnings per ordinary share (cents) 7 80.2 152.4 260.0
Diluted earnings per ordinary share (cents) 7 80.0 151.9 259.1
Dividends per ordinary share – paid during the
period (cents) 8 62.0 59.0 118.0
Dividends per ordinary share – determined in
respect of the period (cents) 8 62.0 59.0 121.0
The accompanying notes form part of these half year financial statements.
Consolidated Statement of Comprehensive Income
for the half year ended 31 December 2014
Half year Half year Year ended
ended ended 30 June
31 Dec 2014 31 Dec 2013 2014
US$M US$M US$M
Profit after taxation 4,793 8,887 15,224
Other comprehensive income
Items that may be reclassified subsequently to the income
statement:
Available for sale investments:
Net valuation losses taken to equity (19) (8) (15)
Net valuation gains transferred to the income statement (1) (2) (14)
Cash flow hedges:
(Losses)/gains taken to equity (1,296) 647 681
Losses/(gains) transferred to the income statement 1,283 (631) (678)
Exchange fluctuations on translation of foreign operations taken
to equity (2) (2) (1)
Tax recognised within other comprehensive income 6 (5) 3
Total items that may be reclassified subsequently to the income
statement (29) (1) (24)
Items that will not be reclassified to the income statement:
Actuarial (losses)/gains on pension and medical schemes (29) 99 57
Tax recognised within other comprehensive income 13 7 12
Total items that will not be reclassified to the income statement (16) 106 69
Total other comprehensive (loss)/income (45) 105 45
Total comprehensive income 4,748 8,992 15,269
Attributable to non-controlling interests 533 781 1,392
Attributable to members of BHP Billiton Group 4,215 8,211 13,877
The accompanying notes form part of these half year financial statements.
Consolidated Balance Sheet
as at 31 December 2014
31 Dec 30 June 31 Dec
2014 2014 2013
US$M US$M US$M
ASSETS
Current assets
Cash and cash equivalents 6,130 8,803 10,947
Trade and other receivables 5,584 6,741 6,698
Other financial assets 81 87 152
Inventories 6,149 6,013 5,917
Current tax assets 630 318 289
Other 327 334 595
Total current assets 18,901 22,296 24,598
Non-current assets
Trade and other receivables 1,716 1,867 2,089
Other financial assets 2,150 2,349 2,268
Inventories 476 463 713
Property, plant and equipment 108,771 108,787 105,254
Intangible assets 5,289 5,439 5,533
Investments accounted for using the equity method 3,550 3,664 3,635
Deferred tax assets 5,080 6,396 6,801
Other 148 152 124
Total non-current assets 127,180 129,117 126,417
Total assets 146,081 151,413 151,015
LIABILITIES
Current liabilities
Trade and other payables 8,338 10,145 9,734
Interest bearing liabilities 2,459 4,262 6,333
Other financial liabilities 14 16 23
Current tax payable 407 919 1,596
Provisions 1,943 2,504 2,135
Deferred income 189 218 272
Total current liabilities 13,350 18,064 20,093
Non-current liabilities
Trade and other payables 77 113 338
Interest bearing liabilities 28,610 30,327 31,702
Other financial liabilities 559 303 1,141
Deferred tax liabilities 7,493 7,066 7,036
Provisions 9,467 9,891 8,118
Deferred income 275 267 308
Total non-current liabilities 46,481 47,967 48,643
Total liabilities 59,831 66,031 68,736
Net assets 86,250 85,382 82,279
EQUITY
Share capital – BHP Billiton Limited 1,186 1,186 1,186
Share capital – BHP Billiton Plc 1,057 1,069 1,069
Treasury shares (230) (587) (605)
Reserves 2,842 2,927 2,895
Retained earnings 74,990 74,548 72,014
Total equity attributable to members of BHP Billiton
Group 79,845 79,143 76,559
Non-controlling interests 6,405 6,239 5,720
Total equity 86,250 85,382 82,279
The accompanying notes form part of these half year financial statements.
Consolidated Cash Flow Statement
for the half year ended 31 December 2014
Half year Half year Year ended
ended ended 30 June
31 Dec 2014 31 Dec 2013 2014
US$M US$M US$M
Operating activities
Profit before taxation 8,585 12,405 22,236
Adjustments for:
Non-cash or non-operating exceptional items 409 (551) (551)
Depreciation and amortisation expense 4,907 3,993 8,701
Net gain on sale of non-current assets (34) (4) (95)
Impairments of property, plant and equipment, financial assets and
intangibles 361 143 797
Employee share awards expense 116 129 247
Net finance costs 232 528 1,176
Share of operating profit of equity accounted investments (338) (686) (1,195)
Other 122 (107) (83)
Changes in assets and liabilities:
Trade and other receivables 960 (327) (252)
Inventories (191) (209) (54)
Trade and other payables (1,398) (865) 77
Net other financial assets and liabilities (18) 50 (49)
Provisions and other liabilities (770) (87) 429
Cash generated from operations 12,943 14,412 31,384
Dividends received 8 9 34
Dividends received from equity accounted investments 476 728 1,250
Interest received 62 73 136
Interest paid (387) (482) (975)
Income tax refunded 329 751 852
Income tax paid (2,147) (3,069) (6,445)
Royalty-related taxation refunded – – 216
Royalty-related taxation paid (861) (563) (1,088)
Net operating cash flows 10,423 11,859 25,364
Investing activities
Purchases of property, plant and equipment (6,772) (8,605) (15,993)
Exploration expenditure (422) (504) (1,010)
Exploration expenditure expensed and included in operating cash flows 359 342 716
Purchase of intangibles (64) (65) (192)
Investment in financial assets (31) (390) (1,193)
Investment in equity accounted investments (25) (17) (44)
Cash outflows from investing activities (6,955) (9,239) (17,716)
Proceeds from sale of property, plant and equipment 47 41 114
Proceeds from financial assets 340 108 956
Proceeds from divestment of subsidiaries, operations and joint
operations, net of their cash 251 628 812
Net investing cash flows (6,317) (8,462) (15,834)
Financing activities
Proceeds from interest bearing liabilities 348 5,535 6,251
Proceeds from debt related instruments – – 37
Repayment of interest bearing liabilities (3,197) (1,474) (7,198)
Proceeds from ordinary shares 3 9 14
Contributions from non-controlling interests 46 1,387 1,435
Purchase of shares by Employee Share ownership Plan (ESOP) Trusts (338) (290) (368)
Dividends paid (3,209) (3,227) (6,387)
Dividends paid to non-controlling interests (412) (101) (252)
Net financing cash flows (6,759) 1,839 (6,468)
Net (decrease)/increase in cash and cash equivalents (2,653) 5,236 3,062
Cash and cash equivalents, net of overdrafts, at beginning of period 8,752 5,667 5,667
Foreign currency exchange rate changes on cash and cash
equivalents 19 6 23
Cash and cash equivalents, net of overdrafts, at end of period 6,118 10,909 8,752
The accompanying notes form part of these half year financial statements.
Consolidated Statement of Changes in Equity
for the half year ended 31 December 2014
For the half year ended 31
December 2014
US$M Attributable to members of the BHP Billiton Group
Share Share Treasury Reserves Retained Total equity Non- Total
capital capital shares earnings attributable controlling equity
– BHP – BHP to members interests
Billiton Billiton of BHP
Limited Plc Billiton
Group
Balance as at 1 July 2014 1,186 1,069 (587) 2,927 74,548 79,143 6,239 85,382
Profit after taxation - - - - 4,265 4,265 528 4,793
Other comprehensive income:
Net valuation (losses)/gains on
available for sale investments taken to
equity - - - (25) - (25) 6 (19)
Net valuation gains on available for
sale investments transferred to the
income statement - - - (1) - (1) - (1)
Losses on cash flow hedges taken to
equity - - - (1,296) - (1,296) - (1,296)
Losses on cash flow hedges
transferred to the income statement - - - 1,283 - 1,283 - 1,283
Exchange fluctuations on translation
of foreign operations taken to equity - - - (2) - (2) - (2)
Actuarial gains on pension and
medical schemes - - - - (29) (29) - (29)
Tax recognised within other
comprehensive income - - - 7 13 20 (1) 19
Total comprehensive income - - - (34) 4,249 4,215 533 4,748
Transactions with owners:
Shares cancelled - (12) 501 12 (501) – - –
Purchase of shares by ESOP Trusts - - (338) - - (338) - (338)
Employee share awards exercised net
of employee contributions - - 194 (174) (18) 2 - 2
Employee share awards forfeited - - - (4) 4 - - –
Accrued employee entitlement for
unexercised awards - - - 116 - 116 - 116
Distribution to option holders - - - (1) - (1) (1) (2)
Dividends - - - - (3,292) (3,292) (412) (3,704)
Equity contributed - - - - - – 46 46
Balance as at 31 December 2014 1,186 1,057 (230) 2,842 74,990 79,845 6,405 86,250
The accompanying notes form part of these half year financial statements.
Consolidated Statement of Changes in Equity
for the half year ended 31 December 2014 (continued)
For the half year ended 31
December 2013
US$M
Attributable to members of the BHP Billiton Group
Share Share Treasury Reserves Retained Total equity Non- Total
capital capital shares earnings attributable controlling equity
– BHP – BHP to members interests
Billiton Billiton of BHP
Limited Plc Billiton
Group
Balance as at 1 July 2013 1,186 1,069 (540) 1,970 66,982 70,667 4,624 75,291
Profit after taxation - - - - 8,107 8,107 780 8,887
Other comprehensive income:
Net valuation losses on available for
sale investments taken to equity - - - (8) - (8) - (8)
Net valuation gains on available for
sale investments transferred to the
income statement - - - (2) - (2) - (2)
Gains on cash flow hedges taken to
equity - - - 647 - 647 - 647
Gains on cash flow hedges
transferred to the income statement - - - (631) - (631) - (631)
Exchange fluctuations on translation
of foreign operations taken to equity - - - (2) - (2) - (2)
Actuarial gains on pension and
medical schemes - - - - 98 98 1 99
Tax recognised within other
comprehensive income - - - (5) 7 2 - 2
Total comprehensive income - - - (1) 8,212 8,211 781 8,992
Transactions with owners:
Purchase of shares by ESOP Trusts - - (290) - - (290) - (290)
Employee share awards exercised
net of employee contributions - - 225 (151) (68) 6 - 6
Employee share awards forfeited - - - (23) 23 - - -
Accrued employee entitlement for
unexercised awards - - - 129 - 129 - 129
Dividends - - - - (3,135) (3,135) (101) (3,236)
Equity contributed - - - 971 - 971 416 1,387
Balance as at 31 December 2013 1,186 1,069 (605) 2,895 72,014 76,559 5,720 82,279
The accompanying notes form part of these half year financial statements.
Consolidated Statement of Changes in Equity
for the half year ended 31 December 2014 (continued)
For the year ended 30 June 2014
US$M
Attributable to members of the BHP Billiton Group
Share Share Treasury Reserves Retained Total Non- Total
capital capital shares earnings equity controlling equity
– BHP – BHP attributable interests
Billiton Billiton to
Limited Plc members
of BHP
Billiton
Group
Balance as at 1 July 2013 1,186 1,069 (540) 1,970 66,982 70,667 4,624 75,291
Profit after taxation - - - - 13,832 13,832 1,392 15,224
Other comprehensive income:
Net valuation losses on available for sale
investments taken to equity - - - (15) - (15) - (15)
investments transferred to the income
statement - - - (14) - (14) - (14)
Gains on cash flow hedges taken to
equity - - - 681 - 681 - 681
Gains on cash flow hedges transferred to
the income statement - - - (678) - (678) - (678)
Exchange fluctuations on translation of
foreign operations taken to equity - - - (1) - (1) - (1)
Actuarial gains on pension and medical
schemes - - - - 57 57 - 57
Tax recognised within other
comprehensive income - - - 3 12 15 - 15
Total comprehensive income - - - (24) 13,901 13,877 1,392 15,269
Transactions with owners:
Purchase of shares by ESOP Trusts - - (368) - - (368) - (368)
Employee share awards exercised net of (221) (91) 9 - 9
employee contributions - - 321
Employee share awards forfeited - - - (32) 32 - - -
Accrued employee entitlement for 247 - 247 - 247
unexercised awards - - -
Distribution to option holders - - - (2) - (2) (2) (4)
Dividends - - - - (6,276) (6,276) (252) (6,528)
Equity contributed - - - 989 - 989 477 1,466
Balance as at 30 June 2014 1,186 1,069 (587) 2,927 74,548 79,143 6,239 85,382
The accompanying notes form part of these half year financial statements.
Notes to the Half Year Financial Statements
1. Accounting policies
This general purpose financial report for the half year ended 31 December 2014 is unaudited and has been
prepared in accordance with IAS 34 “Interim Financial Reporting” as issued by the International Accounting
Standards Board (IASB), IAS 34 “Interim Financial Reporting” as adopted by the EU, AASB 134 “Interim
Financial Reporting” as issued by the Australian Accounting Standards Board (AASB) and the Disclosure
and Transparency Rules of the Financial Conduct Authority in the United Kingdom and the Australian
Corporations Act 2001 as applicable to interim financial reporting.
The half year financial statements represent a “condensed set of financial statements” as referred to in the
UK Disclosure and Transparency Rules issued by the Financial Conduct Authority. Accordingly, they do not
include all of the information required for a full annual report and are to be read in conjunction with the most
recent annual financial report. The comparative figures for the financial year ended 30 June 2014 are not
the statutory accounts of the BHP Billiton Group for that financial year. Those accounts, which were
prepared under IFRS, have been reported on by the Company's auditor and delivered to the registrar of
companies. The auditor has reported on those accounts; the report was unqualified, did not include a
reference to any matters to which the auditors drew attention by way of emphasis without qualifying their
report and did not contain statements under Section 498(2) or (3) of the UK Companies Act 2006.
The half year financial statements have been prepared on the basis of accounting policies and methods of
computation consistent with those applied in the 30 June 2014 annual financial statements contained within
the Annual Report of the BHP Billiton Group, except for the adoption of:
- IFRIC 21 “Levies” which confirms that a liability to pay a levy is only recognised when the activity that
triggers the payment occurs; and
- Amendments to IAS 32/AASB 132 “Financial Instruments: Presentation” which clarifies the criteria for
offsetting financial assets and liabilities.
The adoption of IFRIC 21 and the amendments to IAS 32 did not have a material impact on BHP Billiton
Group and therefore no restatements have been made to the prior year financial statements.
Rounding of amounts
Amounts in this financial report have, unless otherwise indicated, been rounded to the nearest million
dollars.
Comparatives
Where applicable, comparatives have been restated to disclose them on the same basis as current period
figures.
Exchange rates
The following exchange rates relative to the US dollar have been applied in each reporting period:
Average Average Average Year As at As at As at
Half year ended Half year ended 31 Dec 2014 31 Dec 2013 30 June
31 Dec 2014 ended 30 June 2014
31 Dec 2013 2014
Australian dollar(i) 0.89 0.92 0.92 0.82 0.89 0.94
Brazilian real 2.40 2.28 2.29 2.66 2.34 2.20
Canadian dollar 1.11 1.04 1.07 1.16 1.06 1.07
Chilean peso 587 511 532 607 524 551
Colombian peso 2,037 1,910 1,935 2,392 1,927 1,881
Euro 0.78 0.75 0.74 0.83 0.73 0.73
South African rand 10.99 10.07 10.39 11.55 10.53 10.60
UK pound sterling 0.61 0.63 0.62 0.64 0.61 0.59
(i) Displayed as US$ to A$1 based on common convention.
2. Segment reporting
The Group operates five businesses aligned with the commodities which we extract and market, reflecting
the structure used by the Group’s management to assess the performance of the Group.
Reportable segment Principal activities
Petroleum and Potash Exploration, development and production of oil and gas
Potash pre-development
Copper Mining of copper, silver, lead, zinc, molybdenum, uranium and gold
Iron Ore Mining of iron ore
Coal Mining of metallurgical coal and thermal (energy) coal
Aluminium, Manganese and Nickel Mining of bauxite, refining of bauxite into alumina and smelting of alumina
into aluminium metal
Mining of manganese ore and production of manganese metal and alloys
Mining and production of nickel products
Group and unallocated items includes Group Functions, unallocated operations and consolidation
adjustments. Exploration and technology activities are recognised within relevant segments.
It is the Group’s policy that inter-segment sales are made on a commercial basis.
2. Segment reporting (continued)
US$M Petroleum Copper Iron Ore Coal Aluminium, Group and BHP
and Manganese unallocated Billiton
Potash and Nickel items/ Group
eliminations
Half year ended 31 December 2014
Revenue
Group production 6,659 5,797 8,193 4,228 3,834 - 28,711
Third party products 44 470 65 69 359 27 1,034
Rendering of services 82 - 73 - - - 155
Inter-segment revenue 151 - 87 - - (238) -
Total revenue(a) 6,936 6,267 8,418 4,297 4,193 (211) 29,900
Underlying EBIT(b) 2,144 2,208 4,200 178 716 (220) 9,226
Net finance costs(c) (232)
Exceptional items(d) (409)
Profit before taxation 8,585
Half year ended 31 December 2013
Revenue
Group production 6,648 6,549 10,786 4,428 3,679 - 32,090
Third party products 281 541 70 317 476 54 1,739
Rendering of services 56 - 63 - - - 119
Inter-segment revenue 86 - 73 - 5 (164) -
Total revenue(a) 7,071 7,090 10,992 4,745 4,160 (110) 33,948
Underlying EBIT(b) 2,506 2,889 6,499 510 148 (170) 12,382
Net finance costs(c) (528)
Exceptional items(d) 551
Profit before taxation 12,405
Year ended 30 June 2014
Revenue
Group production 14,022 12,838 20,883 8,659 7,583 - 63,985
Third party products 437 1,030 130 456 823 103 2,979
Rendering of services 112 - 130 - - - 242
Inter-segment revenue 262 - 213 - 5 (480) -
Total revenue(a) 14,833 13,868 21,356 9,115 8,411 (377) 67,206
Underlying EBIT(b) 5,287 5,080 12,102 386 307 (301) 22,861
Net finance costs(c) (1,176)
Exceptional items(d) 551
Profit before taxation 22,236
(a) Revenue not attributable to reportable segments comprises the sale of freight and fuel to third parties.
(b) Underlying EBIT is earnings before net finance costs, taxation expense and any exceptional items. Underlying EBIT is reported
net of the Group’s share of net finance costs and taxation expense related to equity accounted investments.
(c) Refer to note 5 Net finance costs.
(d) Refer to note 3 Exceptional items.
3. Exceptional items
Half year ended 31 December 2014 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Repeal of Minerals Resource Rent Tax legislation - (809) (809)
Impairment of Nickel West assets (409) 119 (290)
(409) (690) (1,099)
Repeal of Minerals Resource Rent Tax legislation:
On 2 September 2014, legislation to repeal the Minerals Resource Rent Tax (MRRT) in Australia received
the support of both Houses of Parliament and took effect on 30 September 2014. As a result, the Group
derecognised an MRRT deferred tax asset (net of income tax consequences) of US$809 million and a
corresponding taxation charge of US$809 million was recognised in the half year ended 31 December
2014.
Impairment of Nickel West assets:
On 12 November 2014, the Group announced that the review of its Nickel West business was complete
and the preferred option, the sale of the business, was not achieved on an acceptable basis. As a result of
operational decisions made subsequent to the conclusion of this process, an impairment charge of US$290
million (after tax benefit) was recognised in the half year ended 31 December 2014.
Half year ended 31 December 2013 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Sale of Pinto Valley 551 (205) 346
551 (205) 346
Year ended 30 June 2014 Gross Tax Net
US$M US$M US$M
Exceptional items by category
Sale of Pinto Valley 551 (166) 385
551 (166) 385
Sale of Pinto Valley
On 11 October 2013, the Group announced it had completed the sale of its Pinto Valley mining operation for cash
consideration of US$653 million, after working capital adjustments. A gain on sale of US$346 million (after tax
expense) was recognised in the half year ended 31 December 2013 (30 June 2014: US$385 million).
4. Interests in associates and joint venture entities
Major shareholdings in Ownership interest at BHP Share of operating profit of equity
associates and joint Billiton Group reporting date(a) accounted investments
venture entities
31 Dec 31 Dec 30 June Half year ended Half year ended Year ended
2014 2013 2014 31 Dec 2014 31 Dec 2013 30 June 2014
% % % US$M S$M US$M
Carbones del Cerrej?n LLC 33.33 33.33 33.33 (24) 72 115
Compañia Minera Antamina SA 33.75 33.75 33.75 156 310 476
Samarco Mineração SA 50 50 50 216 289 607
Other(b) (10) 15 (3)
Total 338 686 1,195
(a) The ownership interest at the Group’s and the associates and joint venture entities’ reporting dates are the same. When the
annual financial reporting date is different to the Group’s, financial information is obtained as at 30 June in order to report on a
basis consistent with the Group’s reporting date.
(b) Includes the Group’s effective interest in the Newcastle Coal Infrastructure Group Pty Limited (ownership interest 35.5 per cent;
31 December 2013: 35.5 per cent; 30 June 2014: 35.5 per cent) and other immaterial equity accounted investments.
5. Net finance costs
Half year ended Half year ended Year ended
31 Dec 2014 31 Dec 2013 30 June 2014
US$M US$M US$M
Financial expenses
Interest on bank loans and overdrafts 7 7 14
Interest on all other borrowings(a) 234 376 708
Finance lease and hire purchase interest 44 5 55
Discounting on provisions and other liabilities 256 224 475
Net interest expense on post-retirement employee benefits 13 11 22
Interest capitalised(b) (83) (130) (182)
Fair value change on hedged loans 869 (447) 328
Fair value change on hedging derivatives (874) 446 (292)
Fair value change on non-hedging derivatives(c) - 101 101
Exchange variations on net debt(d) (174) (4) 44
292 589 1,273
Financial income
Interest income (60) (61) (97)
(60) (61) (97)
Net finance costs 232 528 1,176
(a) Interest on all other borrowings in the half year ended 31 December 2014 includes interest income of US$67 million (31
December 2013: expense of US$87 million; 30 June 2014: expense of US$116 million) with respect to Petrohawk Senior
Notes, which included gains of US$80 million on the early redemption notes in August 2014 (31 December 2013: US$ nil; 30
June 2014: gains of US$24 million on the early redemption of notes in February 2014).
(b) Interest has been capitalised at the rate of interest applicable to the specific borrowings financing the assets under construction
or, where financed through general borrowings, at a capitalisation rate representing the average interest rate on such
borrowings. For the half year ended 31 December 2014, the capitalisation rate was 1.89 per cent (31 December 2013: 1.75 per
cent; 30 June 2014: 1.82 per cent).
(c) Fair value change on non-hedging derivatives in the half year ended 31 December 2013 and year ended 30 June 2014
includes unrealised fair value changes of US$101 million on non-hedging derivatives used to manage interest rate risk. No
such derivatives existed in the current period.
(d) Exchange variations on net debt in the half year ended 31 December 2014 predominantly comprises revaluations of US$159
million on non-USD finance leases (31 December 2013: US$ nil; 30 June 2014: US$60 million).
6. Taxation
Half year ended Half year ended Year ended
31 Dec 2014 31 Dec 2013 30 June 2014
US$M US$M US$M
Taxation expense attributed to geographical jurisdiction:
UK taxation expense/(benefit) 3 (11) (44)
Australian taxation expense 2,639 2,265 4,871
Overseas taxation expense 1,150 1,264 2,185
Total taxation expense(a) 3,792 3,518 7,012
Half year ended Half year ended Year ended
31 Dec 2014 31 Dec 2013 30 June 2014
US$M US$M US$M
Total taxation expense comprises:
Income tax expense
Income tax expense 2,848 3,692 6,538
2,848 3,692 6,538
Total royalty-related taxation (net of income tax benefit)(b)
Minerals Resource Rent Tax expense/(benefit) 643 (462) (238)
Other royalty-related taxation expense 301 288 712
944 (174) 474
Total taxation expense 3,792 3,518 7,012
(a) Total taxation expense including royalty-related taxation, exceptional items and exchange rate movements, was
US$3,792 million, representing an effective tax rate of 44.2 per cent (31 December 2013: 28.4 per cent; 30 June 2014: 31.5
per cent). Exchange rate movements increased taxation expense by US$290 million, representing an increase in the effective
tax rate of 3.4 per cent (31 December 2013: decrease of US$46 million and 0.4 per cent; 30 June 2014: decrease of US$24
million and 0.1 per cent). Exceptional items, as described in note 3, increased taxation expense by US$690 million
(31 December 2013: increase of US$205 million; 30 June 2014: increase of US$166 million).
(b) Government imposed royalty arrangements calculated by reference to profits, including MRRT, are reported as royalty-related
taxation. Total royalty-related taxation increased taxation expense by US$944 million resulting in an increase in the effective
tax rate of 11.0 per cent (31 December 2013: decrease of US$174 million and 1.4 per cent; 30 June 2014: increase of
US$474 million and 2.1 per cent). The MRRT increased taxation expense by US$643 million in the period (31 December 2013:
decrease of US$462 million; 30 June 2014: decrease of US$238 million). This included an exceptional item of US$809 million
tax expense (31 December 2013: US$ nil; 30 June 2014: US$ nil) for the derecognition of deferred tax assets upon the repeal
of the MRRT legislation in Australia. Refer to note 3.
7. Earnings per share
Half year ended Half year ended Year ended
31 Dec 2014 31 Dec 2013 30 June 2014
Basic earnings per ordinary share (US cents) 80.2 152.4 260.0
Diluted earnings per ordinary share (US cents) 80.0 151.9 259.1
Basic earnings per American Depositary Share (ADS) (US cents)(a) 160.4 304.8 520.0
Diluted earnings per American Depositary Share (ADS) (US cents)(a) 160.0 303.8 518.2
Basic earnings (US$M) 4,265 8,107 13,832
Diluted earnings (US$M) 4,265 8,107 13,832
(a) Each American Depositary Share represents two ordinary shares.
The weighted average number of shares used for the purposes of calculating diluted earnings per share
reconciles to the number used to calculate basic earnings per share as follows:
Half year ended Half year ended Year ended
31 Dec 2014 31 Dec 2013 30 June 2014
Million Million Million
Weighted average number of shares
Basic earnings per ordinary share denominator 5,317 5,321 5,321
Shares and options contingently issuable under employee
share ownership plans 17 16 17
Diluted earnings per ordinary share denominator 5,334 5,337 5,338
8. Dividends
Half year ended Half year ended Year ended
31 Dec 2014 31 Dec 2013 30 June 2014
US$M US$M US$M
Dividends paid/payable during the period
BHP Billiton Limited 1,986 1,898 3,793
BHP Billiton Plc – Ordinary shares 1,306 1,237 2,483
– Preference shares(a) – – –
3,292 3,135 6,276
Dividends determined in respect of the
period
BHP Billiton Limited 1,990 1,895 3,887
BHP Billiton Plc – Ordinary shares 1,308 1,246 2,555
– Preference shares(a) – – –
3,298 3,141 6,442
(a) 5.5 per cent dividend on 50,000 preference shares of £1 each determined and paid annually (31 December 2013:
5.5 per cent; 30 June 2014: 5.5 per cent).
Half year ended Half year ended Year ended
31 Dec 2014 31 Dec 2013 30 June 2014
US cents US cents US cents
Dividends paid during the period (per share)
Prior year final dividend 62.0 59.0 59.0
Interim dividend N/A N/A 59.0
62.0 59.0 118.0
Dividends determined in respect of the period (per share)
Interim dividend 62.0 59.0 59.0
Final dividend N/A N/A 62.0
62.0 59.0 121.0
Dividends are determined after period end in the announcement of the results for the period. Interim
dividends are determined in February and paid in March. Final dividends are determined in August and
paid in September. Dividends determined are not recorded as a liability at the end of the period to which
they relate. Subsequent to half year end, on 24 February 2015, BHP Billiton determined an interim dividend
of 62.0 US cents per share (US$3,298 million), which will be paid on 31 March 2015 (31 December 2013:
interim dividend of 59.0 US cents per share – US$3,141 million; 30 June 2014: final dividend of 62.0 US
cents per share – US$3,301 million).
BHP Billiton Limited dividends for all periods presented are, or will be, fully franked based on a tax rate of
30 per cent.
9. Financial risk management – Fair values
All financial assets and financial liabilities, other than derivatives, are initially recognised at the fair value of
consideration paid or received, net of transaction costs as appropriate, and subsequently carried at fair
value or amortised cost, as indicated in the tables below. Derivatives are initially recognised at fair value on
the date the contract is entered into and are subsequently remeasured at their fair value.
The financial assets and liabilities are presented by class in the tables below at their carrying values, which
generally approximate to the fair values. In the case of US$3,319 million of centrally managed fixed rate
debt (30 June 2014: US$3,319 million; 31 December 2013: US$3,320 million) and other fixed interest
borrowings of US$ nil not swapped to floating rate (30 June 2014: US$2,018 million; 31 December 2013:
US$3,471 million), the fair values at 31 December 2014 were US$3,771 million (30 June 2014: US$3,718
million; 31 December 2013: US$3,904 million) and US$ nil (30 June 2014: US$1,947 million; 31 December
2013: US$3,850 million) respectively.
Financial assets and liabilities
31 December 2014 Other
Held at financial
fair value assets and
Available through Cash liabilities at
Loans and for sale profit or flow amortised
receivables securities loss hedges cost Total
US$M US$M US$M US$M US$M US$M
Financial assets
Cash and cash equivalents 6,130 – – – – 6,130
Trade and other receivables(a) 4,752 – 832 – – 5,584
Cross currency and interest rate swaps – – 1,276 (12) – 1,264
Commodity contracts – – 7 – – 7
Other derivative contracts – – 304 – – 304
Loans to equity accounted investments 1,032 – – – – 1,032
Interest bearing loans receivable 169 – – – – 169
Shares – 519 – – – 519
Other investments – 137 – – – 137
Total financial assets 12,083 656 2,419 (12) – 15,146
Non-financial assets 130,935
Total assets 146,081
Financial liabilities
Trade and other payables(b) – – 240 – 7,732 7,972
Cross currency and interest rate swaps – – (170) 699 – 529
Forward exchange contracts – – 1 – – 1
Commodity contracts – – 4 – – 4
Other derivative contracts – – 39 – – 39
Unsecured bank overdrafts and short-term
borrowings – – – – 11 11
Unsecured bank loans – – – – 1,368 1,368
Commercial paper – – – – 240 240
Notes and debentures(c) – – – – 27,855 27,855
Finance leases – – – – 1,192 1,192
Unsecured other – – – – 403 403
Total financial liabilities – – 114 699 38,801 39,614
Non-financial liabilities 20,217
Total liabilities 59,831
9. Financial Risk Management – Fair values (continued)
Financial assets and liabilities
Other
30 June 2014 Held at financial
fair value assets and
Available through Cash liabilities at
Loans and for sale profit or flow amortised
receivables securities loss hedges cost Total
US$M US$M US$M US$M US$M US$M
Financial assets
Cash and cash equivalents 8,803 – – – – 8,803
Trade and other receivables(a) 5,431 – 1,071 – – 6,502
Cross currency and interest rate swaps – – 846 637 – 1,483
Commodity contracts – – 25 – – 25
Other derivative contracts – – 271 – – 271
Loans to equity accounted investments 1,205 – – – – 1,205
Interest bearing loans receivable 337 – – – – 337
Shares – 512 – – – 512
Other investments – 145 – – – 145
Total financial assets 15,776 657 2,213 637 – 19,283
Non-financial assets 132,130
Total assets 151,413
Financial liabilities
Trade and other payables(b) – – 300 – 9,560 9,860
Cross currency and interest rate swaps – – 221 52 – 273
Commodity contracts – – 9 – – 9
Other derivative contracts – – 37 – – 37
Unsecured bank overdrafts and short-term
borrowings – – – – 51 51
Unsecured bank loans – – – – 1,462 1,462
Notes and debentures(c) – – – – 31,247 31,247
Finance leases – – – – 1,384 1,384
Unsecured other – – – – 445 445
Total financial liabilities – – 567 52 44,149 44,768
Non-financial liabilities 21,263
Total liabilities 66,031
9. Financial Risk Management – Fair values (continued)
Financial assets and liabilities
Other
31 December 2013 Held at financial
fair value assets and
Available through Cash liabilities at
Loans and for sale profit or flow amortised
receivables securities loss hedges cost Total
US$M US$M US$M US$M US$M US$M
Financial assets
Cash and cash equivalents 10,947 – – – – 10,947
Trade and other receivables(a) 5,205 – 1,188 – – 6,393
Cross currency and interest rate swaps – – 1,381 184 – 1,565
Commodity contracts – – 32 – – 32
Other derivative contracts – – 183 – – 183
Loans to equity accounted investments 1,273 – – – – 1,273
Interest bearing loans recievable 546 – – – – 546
Shares – 502 – – – 502
Other investments – 138 – – – 138
Total financial assets 17,971 640 2,784 184 – 21,579
Non-financial assets 129,436
Total assets 151,015
Financial liabilities
Trade and other payables(b) – – 50 – 9,557 9,607
Cross currency and interest rate swaps – – 1,110 (14) – 1,096
Forward exchange contracts – – 1 – – 1
Commodity contracts – – 37 – – 37
Other derivative contracts – – 30 – – 30
Unsecured bank overdrafts and short-term
borrowings – – – – 38 38
Unsecured bank loans – – – – 1,366 1,366
Commercial paper – – – – 375 375
Notes and debentures(c) – – – – 35,173 35,173
Finance leases – – – – 627 627
Unsecured other – – – – 456 456
Total financial liabilities – – 1,228 (14) 47,592 48,806
Non-financial liabilities 19,930
Total liabilities 68,736
(a) Excludes input taxes of US$515 million (30 June 2014: US$564 million; 31 December 2013: US$575 million) included in other
receivables.
(b) Excludes input taxes of US$443 million (30 June 2014: US$398 million; 31 December 2013: US$465 million) included in other
payables.
(c) Includes US$3,319 million of fixed rate debt not swapped to floating rate (30 June 2014: US$3,319 million; 31 December 2013:
US$3,320 million), US$ nil of fixed rate debt assumed as part of the acquisition of Petrohawk Energy Corporation (30 June
2014: US$1,998 million; 31 December 2013: US$3,450 million) and US$24,536 million of other debt swapped to floating rate
under fair value hedges (30 June 2014: US$25,930 million; 31 December 2013: US$28,403 million) that is fair valued for
interest rate risk.
9. Financial Risk Management – Fair values (continued)
Fair value hierarchy
The carrying amount of financial assets and liabilities measured at fair value is where possible, calculated
with reference to quoted prices in active markets for identical assets or liabilities. Where no price
information is available from a quoted market source, alternative market mechanisms or recent comparable
transactions, fair value is estimated based on the Group’s views on relevant future prices, net of valuation
allowances to accommodate liquidity, modelling and other risks implicit in such estimates. The inputs used
in fair value calculations are determined by the relevant Group Function. Our Group Functions support the
Businesses and operate under a defined set of accountabilities authorised by the Group Management
Committee (GMC). Movements in the fair value of financial assets and liabilities may be recognised through
the income statement or in other comprehensive income. The following table shows the Group’s financial
assets and liabilities carried at fair value with reference to the nature of valuation inputs used.
31 December 2014 Level 1(a) Level 2(b) Level 3(c) Total
US$M US$M US$M US$M
Financial assets and liabilities
Trade and other receivables – 832 – 832
Trade and other payables – (240) – (240)
Cross currency and interest rate swaps – 735 – 735
Forward exchange contracts – (1) – (1)
Commodity contracts – 3 – 3
Other derivative contracts – 3 262 265
Investments – available for sale 1 137 518 656
Total 1 1,469 780 2,250
31 June 2014 Level 1(a) Level 2(b) Level 3(c) Total
US$M US$M US$M US$M
Financial assets and liabilities
Trade and other receivables – 1,071 – 1,071
Trade and other payables – (300) – (300)
Cross currency and interest rate swaps – 1,210 – 1,210
Commodity contracts – 16 – 16
Other derivative contracts – (13) 247 234
Investments – available for sale 5 145 507 657
Total 5 2,129 754 2,888
31 December 2013 Level 1(a) Level 2(b) Level 3(c) Total
US$M US$M US$M US$M
Financial assets and liabilities
Trade and other receivables – 1,188 – 1,188
Trade and other payables – (50) – (50)
Cross currency and interest rate swaps – 469 – 469
Forward exchange contracts – (1) – (1)
Commodity contracts – (5) – (5)
Other derivative contracts – (5) 158 153
Investments – available for sale 7 139 494 640
Total 7 1,735 652 2,394
(a) Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities.
(b) Valuation is based on inputs (other than quoted prices included in level 1) that are observable for the financial asset or liability,
either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices).
(c) Valuation is based on inputs that are not based on observable market data.
9. Financial Risk Management – Fair values (continued)
Level 3 financial assets and liabilities
The following table shows the movements in the Group’s level 3 financial assets and liabilities.
Half year ended Year ended Half year ended
31 Dec 2014 30 June 2014 31 Dec 2013
US$M US$M US$M
At the beginning of the financial period 754 690 690
Additions 19 66 32
Disposals – (47) (37)
Realised gains recognised in the income statement(a) 7 6 6
Unrealised gains/(losses) recognised in the income statement(a) 8 77 (11)
Unrealised losses recognised in other comprehensive income(b) (8) (19) (9)
Transfers(c) – (19) (19)
Total at the end of the financial period 780 754 652
(a) Realised and unrealised gains and losses recognised in the income statement are recorded in expenses.
(b) Unrealised gains and losses recognised in other comprehensive income are recorded in the financial assets reserve.
(c) Includes US$ nil (30 June 2014: US$19 million; 31 December 2013: US$19 million) related to an available for sale investment
now classified as an equity accounted investment due to the adoption of IFRS 11.
Sensitivity of level 3 financial assets and liabilities
The carrying amount of financial assets and liabilities that are valued using inputs other than observable
market data are calculated using appropriate valuation models, including discounted cash flow modelling,
with inputs such as commodity prices, foreign exchange rates and inflation. The potential effect of using
reasonably possible alternative assumptions in these models, based on a change in the most significant
input by 10 per cent while holding all other variables constant, is shown in the following table. Significant
inputs are assessed individually for each financial asset and liability.
31 December 2014 Profit after taxation Equity
10 per 10 per 10 per 10 per
cent cent cent cent
Carrying increase decrease increase decrease
value in input in input in input in input
US$M US$M US$M US$M US$M
Financial assets and liabilities
Other derivative contracts 262 59 (59) 59 (59)
Investments – available for sale 518 – – 63 (60)
Total 780 59 (59) 122 (119)
31 June 2014 Profit after taxation Equity
10 per 10 per 10 per 10 per
cent cent cent cent
Carrying increase decrease increase decrease
value in input in input in input in input
US$M US$M US$M US$M US$M
Financial assets and liabilities
Other derivative contracts 247 67 (67) 67 (67)
Investments – available for sale 507 – – 72 (39)
Total 754 67 (67) 139 (106)
9. Financial Risk Management – Fair values (continued)
31 December 2013 Profit after taxation Equity
10 per 10 per 10 per 10 per
cent cent cent cent
Carrying increase decrease increase decrease
value in input in input in input in input
US$M US$M US$M US$M US$M
Financial assets and liabilities
Other derivative contracts 158 48 (48) 48 (48)
Investments – available for sale 494 – – 67 (61)
Total 652 48 (48) 115 (109)
10. Significant events
The Group announced on 19 August 2014 that it plans to demerge a selection of its aluminium, coal,
manganese, nickel and silver assets to create an independent metals and mining company. On 8
December 2014, the Group announced that the new company it intends to create through its proposed
demerger will be called South32. A final Board decision on the proposed demerger will be made once all
necessary third party approvals are secured on satisfactory terms. On this basis, the Group expects to
release all shareholder documentation with full details of the proposed demerger in mid-March 2015 with a
shareholder vote taking place in early May 2015. As numerous steps are required to enable the demerger
to proceed, the relevant businesses have not been classified as held for sale or distribution as at 31
December 2014.
Summarised financial information as at 31 December 2014 and for the half year ended 31 December 2014
of the businesses included in the proposed demerger is provided below:
Half year ended
31 December 2014
US$M
Current assets 3,122
Non-current assets 14,093
Current liabilities 1,895
Non-current liabilities 3,512
Net assets 11,808
Attributable to non-controlling interests 837
Attributable to members of BHP Billiton Group 10,971
Revenue 5,040
Depreciation and amortisation 506
Profit before interest and taxation 887
Net operating cash inflows 885
Net investing cash outflows 415
Transaction costs incurred(a) 115
(a) Transaction costs of US$45 million were incurred in relation to the proposed demerger for the financial year ended 30 June
2014.
The demerger will be recognised as a reduction in equity at the fair value of the shares in the demerged
company distributed to shareholders. A gain or loss will arise on the difference between the fair value of
those shares and the net assets of the demerged businesses determined at the date of the demerger,
which will include the fair value step-up on the Manganese business, described below less any transaction
costs. Transaction costs will mainly comprise stamp duty, professional fees and separation and
establishment costs.
10. Significant events (continued)
In contemplation of the proposed demerger, BHP Billiton and Anglo American agreed to make certain
changes to the agreement which governs their interests in the Manganese business. BHP Billiton manages
and owns 60 per cent of the Manganese business with Anglo American owning the remaining 40 per cent.
Subject to obtaining the required approvals for the agreement, the changes will result in BHP Billiton and
Anglo American agreeing to share joint control of the Manganese business. BHP Billiton will discontinue
consolidation of the Manganese business and account for its 60 per cent interest as an equity accounted
joint venture. BHP Billiton will therefore derecognise the existing carrying amounts of all assets, liabilities
and the non-controlling interest in the Manganese business attributed to Anglo American and initially record
its retained 60 per cent interest at fair value. The remeasurement at fair value will give rise to an estimated
gain of approximately US$2 billion. There are no tax consequences arising from the remeasurement of the
Manganese business.
11. Subsequent events
Other than the matters outlined elsewhere in this financial report, no matters or circumstances have arisen
since the end of the half year that have significantly affected, or may significantly affect, the operations,
results of operations or state of affairs of the Group in subsequent accounting periods.
Directors’ Report
The Directors present their report together with the half year financial statements for the half year ended
31 December 2014 and the auditor’s review report thereon.
Review of Operations
A detailed review of the Group’s operations, the results of those operations during the half year ended
31 December 2014 and likely future developments are given on pages 1 to 28. The Review of Operations
has been incorporated into, and forms part of, this Directors’ Report.
Principal Risks and Uncertainties
Because of the international scope of the Group's operations and the industries in which it is engaged,
there are a number of risk factors and uncertainties which could have an effect on the Group's results and
operations. Material risks that could impact on the Group's performance include those referred to in the
‘Outlook’ section as well as:
- Fluctuations in commodity prices and impacts of - The commercial counterparties we transact with
ongoing global economic volatility may negatively may not meet their obligations, which may
affect our results, including cash flows and asset negatively impact our results
values
- Our financial results may be negatively affected by - Cost pressures and reduced productivity could
currency exchange rate fluctuations negatively impact our operating margins and
expansion plans
- Reduction in Chinese demand may negatively - Unexpected natural and operational catastrophes
impact our results may adversely impact our operations
- Actions by governments or political events in the - Our non-operated assets may not comply with our
countries in which we operate could have a standards
negative impact on our business
- Failure to discover or acquire new resources, - Breaches in our information technology security
maintain reserves or develop new operations could processes may adversely impact our business
negatively affect our future results and financial activities
condition
- Potential changes to our portfolio of assets through - Safety, health, environmental and community
acquisition and divestments or demerger may have impacts, incidents or accidents and related
a material adverse effect on our future results and regulations may adversely affect our people,
financial condition operations and reputation or licence to operate
- Increased costs and schedule delays may - Climate change may impact the value of our
adversely affect our development projects Company, and our operations and markets
- If our liquidity and cash flow deteriorate significantly - A breach of our governance processes may lead to
it could adversely affect our ability to fund our major regulatory penalties and loss of reputation
capital programs
- We may not recover our investments in mining, oil
and gas assets, which may require financial write-
downs
Further information on the above risks and uncertainties can be found on pages 20 to 24 of the Group's
Annual Report for the year ended 30 June 2014, a copy of which is available on the Group's website at
www.bhpbilliton.com.
Dividend
Full details of dividends are given on page 11.
Board of Directors
The Directors of BHP Billiton at any time during or since the end of the half year are:
Mr J Nasser – Chairman since March 2010 (a Director Mr A Mackenzie – an Executive Director since May
since June 2006) 2013
Mr M Brinded – a Director since April 2014 Mr L P Maxsted – a Director since March 2011
Mr M W Broomhead – a Director since March 2010 Mr W W Murdy – a Director since June 2009
Sir J G Buchanan – a Director since February 2003 Mr K C Rumble – a Director since September 2008
Mr C A Cordeiro – a Director since February 2005 Dr J M Schubert – a Director since June 2000
Mr L P Davies – a Director since June 2012 Baroness S Vadera – a Director since January 2011
Ms C J Hewson – a Director since March 2010 Mr D A Crawford – a Director from May 1994 to
November 2014
Auditor’s independence declaration
KPMG in Australia are the auditors of BHP Billiton Limited. Their auditor’s independence declaration under
Section 307C of the Australian Corporations Act 2001 is set out on page 55 and forms part of this Directors’
Report.
Rounding of amounts
BHP Billiton Limited is a company of a kind referred to in Australian Securities and Investments
Commission Class Order No 98/100, dated 10 July 1998. Amounts in the Directors’ Report and half year
financial statements have been rounded to the nearest million dollars in accordance with that Class Order.
Signed in accordance with a resolution of the Board of Directors.
J Nasser AO – Chairman
A Mackenzie – Chief Executive Officer
Dated this 24th day of February 2015
Directors’ Declaration of Responsibility
The half year financial report is the responsibility of, and has been approved by, the Directors. In
accordance with a resolution of the Directors of BHP Billiton, the Directors declare that, to the best of their
knowledge and in their reasonable opinion:
(a) the half year financial statements and notes, set out on pages 31 to 51, have been prepared in
accordance with IAS 34 ‘Interim Financial Reporting’ as issued by the IASB, IAS 34 ‘Interim Financial
Reporting’ as adopted by the EU, AASB 134 ‘Interim Financial Reporting’ as issued by the AASB and
the Disclosure and Transparency Rules of the Financial Conduct Authority in the United Kingdom and
the Australian Corporations Act 2001, including:
(i) complying with applicable accounting standards and the Australian Corporations Regulations
2001; and
(ii) giving a true and fair view of the financial position of the BHP Billiton Group as at
31 December 2014 and of its performance for the half year ended on that date;
(b) the Directors’ Report, which incorporates the Review of Operations on pages 1 to 28, includes a fair
review of the information required by:
(i) DTR4.2.7R of the Disclosure and Transparency Rules in the United Kingdom, being an indication
of important events during the first six months of the current financial year and their impact on the
half year financial statements, and a description of the principal risks and uncertainties for the
remaining six months of the year; and
(ii) DTR4.2.8R of the Disclosure and Transparency Rules in the United Kingdom, being related party
transactions that have taken place in the first six months of the current financial year and that
have materially affected the financial position or performance of the BHP Billiton Group during
that period, and any changes in the related party transactions described in the last annual report
that could have such a material effect; and
(c) in the Directors’ opinion, there are reasonable grounds to believe that each of BHP Billiton Limited and
BHP Billiton Plc will be able to pay its debts as and when they become due and payable.
Signed in accordance with a resolution of the Board of Directors.
J Nasser AO – Chairman
A Mackenzie – Chief Executive Officer
Dated this 24th day of February 2015
Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
To: the Directors of BHP Billiton Limited:
I declare that, to the best of my knowledge and belief, in relation to the review for the half year ended 31
December 2014 there have been:
i. no contraventions of the auditor independence requirements as set out in the Australian
Corporations Act 2001 in relation to the review; and
ii. no contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of BHP Billiton and the entities it controlled during the financial period.
KPMG
Anthony Young
Partner
Melbourne
24 February 2015
KPMG, an Australian partnership and member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (‘KPMG International’) a Swiss entity.
KPMG Australia’s liability limited by a scheme approved under Professional Standards Legislation.
Independent Review Report
Independent Review Report of KPMG LLP (“KPMG UK”) to BHP Billiton Plc and KPMG (“KPMG
Australia”) to the Members of BHP Billiton Limited
Introduction
For the purposes of these reports, the terms “we” and “our” denote KPMG UK in relation to its
responsibilities under its terms of engagement to report to BHP Billiton Plc and KPMG Australia in relation
to Australian professional and regulatory responsibilities and reporting obligations to the members of BHP
Billiton Limited.
The BHP Billiton Group (“the Group”) consists of BHP Billiton Plc and BHP Billiton Limited and the entities
they controlled at the end of the half year or from time to time during the half year ended 31 December
2014.
We have reviewed the condensed half year financial statements of the Group for the half year ended 31
December 2014 (“half year financial statements”), set out on pages 31 to 51, which comprise the
consolidated income statement, consolidated statement of comprehensive income, consolidated balance
sheet, consolidated cash flow statement, consolidated statement of changes in equity, summary of
significant accounting policies and other explanatory notes 1 to 11. We have read the other information
contained in the half year financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the half year financial statements. KPMG Australia has
also reviewed the directors’ declaration set out on page 54 in relation to Australian regulatory requirements
contained in section (a) and (c) of the directors’ declaration.
Directors’ Responsibilities
The half year financial report is the responsibility of, and has been approved by, the Directors. The
Directors are responsible for preparing the half year financial report:
- in accordance with the Disclosure and Transparency Rules (“the DTR”) of the United Kingdom’s
Financial Conduct Authority (“the UK FCA”), and under those rules, in accordance with IAS 34 Interim
Financial Reporting as adopted by the European Union; and
- in accordance with Australian Accounting Standards and the Corporations Act 2001. This responsibility
includes establishing and maintaining internal control relevant to the preparation and fair presentation of
the half year financial statements that are free from material misstatement, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.
Respective Responsibilities of KPMG UK and KPMG Australia
KPMG UK’s report is made solely to BHP Billiton Plc in accordance with the terms of KPMG UK’s
engagement to assist BHP Billiton Plc in meeting the requirements of the DTR of the UK FCA. KPMG UK’s
review has been undertaken so that it might state to BHP Billiton Plc those matters it is required to state to
it in this report and for no other purpose. To the fullest extent permitted by law, KPMG UK does not accept
or assume responsibility to anyone other than BHP Billiton Plc, for KPMG UK’s review work, for this report,
or for the conclusions it has reached.
KPMG Australia has performed an independent review of the half year financial statements and directors’
declaration in order to state whether, on the basis of the procedures described, it has become aware of any
matter that makes KPMG Australia believe that the half year financial statements and directors’ declaration
are not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s
financial position as at 31 December 2014 and its performance for the half year ended on that date; and
complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Australian
Corporations Regulations 2001.
Our responsibility is to express a conclusion on the half year financial statements in the half year financial
report based on our review.
Scope of Review
KPMG UK conducted its review in accordance with International Standard on Review Engagements (UK
and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the
Entity issued by the Auditing Practices Board for use in the United Kingdom.
KPMG Australia conducted its review in accordance with Auditing Standard on Review Engagements
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity as issued by
the Australian Auditing and Assurance Standards Board. As auditor of BHP Billiton Limited, KPMG
Australia is required by ASRE 2410 to comply with the ethical requirements relevant to the audit of the
annual financial report.
A review of half year financial statements consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with auditing standards and
consequently does not enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting its review, KPMG Australia has complied with the independence requirements of the
Australian Corporations Act 2001.
Review conclusion by KPMG UK
Based on our review, nothing has come to our attention that causes us to believe that the condensed half-
year financial statements in the half-year financial report for the six months ended 31 December 2014 are
not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting, as adopted by
the EU, and the DTR of the UK FCA.
Stephen Oxley
Partner
For and on behalf of KPMG LLP
Chartered Accountants
London
25 February 2015
Review conclusion by KPMG Australia
Based on our review, which is not an audit, we have not become aware of any matter that makes us
believe that the condensed half year financial statements and directors’ declaration of the Group are not in
accordance with the Australian Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 31 December 2014 and of its
performance for the half year ended on that date; and
b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the
Australian Corporations Regulations 2001.
KPMG
Anthony Young
Partner
Melbourne
24 February 2015
KPMG, an Australian partnership and KPMG LLP, a UK limited liability partnership, are member firms of the
KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG
International’) a Swiss entity.
KPMG Australia’s liability limited by a scheme approved under Professional Standards Legislation.
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