| Summary of Net Finance Costs |
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2020 |
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2019 |
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US$M |
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US$M |
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Interest expense using the effective interest rate method: |
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Interest on bank loans, overdrafts and all other borrowings |
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1,099 |
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1,296 |
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Interest capitalised at 2.83% (2020: 4.14%; 2019: 4.96%) (1) |
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(308 |
) |
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(248 |
) |
Interest on lease liabilities |
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90 |
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47 |
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Discounting on provisions and other liabilities |
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452 |
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470 |
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Fair value change on hedged loans |
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721 |
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729 |
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Fair value change on hedging derivatives |
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(788 |
) |
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(809 |
) |
Loss on bond repurchase (2) |
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– |
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– |
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Exchange variations on net debt |
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(18 |
) |
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6 |
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14 |
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19 |
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1,262 |
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1,510 |
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(351 |
) |
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(446 |
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911 |
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1,064 |
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(1) |
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. Tax relief for capitalised interest is approximately US$74 million (2020: US$92 million; 2019: US$74 million). |
(2) |
Relates to the additional cost on settlement of two multi-currency hybrid debt repurchase programs and the unwind of the associated hedges, included in a total cash payment of US$3,402 million disclosed in repayment of interest bearing liabilities in the Consolidated Cash Flow Statement. |
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