Page 207 - Annual Report 2020

19 Net debt continued
Interest bearing liabilities and cash and cash equivalents include balances denominated in the following currencies:
Interest bearing liabilities Cash and cash equivalents Strategic Report
2020 2019 2020 2019
US$M US$M US$M US$M
USD 14,625 12,485 9,555 9,214
EUR 7,323 7,680 4 6
GBP 3,272 3,118 519 48
AUD 1,055 951 1,011 3,023
CAD 597 594 2,131 3,092
Other 176 − 206 230
Total 27,048 24,828 13,426 15,613

The Group enters into derivative transactions to convert the majority of its exposures above into US dollars. Further information on the Group’s Governance at BHP
risk management activities relating to these balances is provided in note 22 ‘Financial risk management’.
Liquidity risk
The Group’s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due and is managed as
part of the portfolio risk management strategy. Operational, capital and regulatory requirements are considered in the management of liquidity
risk, in conjunction with short-term and long-term forecast information.
Recognising the cyclical volatility of operating cash flows, the Group has defined minimum target cash and liquidity buffers to be maintained
to mitigate liquidity risk and support operations through the cycle.
The Group’s strong credit profile, diversified funding sources, its minimum cash buffer and its committed credit facilities ensure that sufficient
liquid funds are maintained to meet its daily cash requirements. Remuneration Report
Standard & Poor’s credit rating of the Group remained at the A level with stable outlook throughout FY2020. On 1 May 2020, Moody’s affirmed
its credit rating of the Group at A2 with a stable outlook.
There were no defaults on the Group’s liabilities during the period.
Counterparty risk
The Group is exposed to credit risk from its financing activities, including short-term cash investments such as deposits with banks and
derivative contracts. This risk is managed by Group Treasury in line with the counterparty risk framework, which aims to minimise the exposure
to a counterparty and mitigate the risk of financial loss through counterparty failure.
Exposure to counterparties is monitored at a Group level across all products and includes exposure with derivatives and cash investments.
Investments and derivatives are only transacted with approved counterparties who have been assigned specific limits based on a quantitative Directors’ Report
credit risk model. These limits are updated at least bi-annually. Additionally, derivatives are subject to tenor limits and investments are subject
to concentration limits by rating.
Derivative fair values are inclusive of valuation adjustments that take into account both the counterparty and the Group’s risk of default.
Standby arrangements and unused credit facilities
The Group’s committed revolving credit facility operates as a back-stop to the Group’s uncommitted commercial paper program. The combined
amount drawn under the facility or as commercial paper will not exceed US$5.5 billion. As at 30 June 2020, US$ nil commercial paper was
drawn (2019: US$ nil). The revolving credit facility was refinanced on 10 October 2019 and has a five-year maturity ending 10 October 2024. 5
A commitment fee is payable on the undrawn balance and an interest rate comprising an interbank rate plus a margin applies to any drawn
balance. The agreed margins are typical for a credit facility extended to a company with the Group’s credit rating.
Maturity profile of financial liabilities
The maturity profile of the Group’s financial liabilities based on the undiscounted contractual amounts, taking into account the derivatives
related to debt, is as follows: Financial Statements
Bank loans, Expected
debentures future Derivatives Obligations Trade and
2020 and other interest related to Other under lease other
US$M loans payments debentures derivatives liabilities (1) payables Total
(2)
Due for payment:
In one year or less or on demand 4,138 813 260 60 927 5,622 11,820
In more than one year but not more than two years 1,665 702 81 − 630 1 3,079
In more than two years but not more than five years 5,727 1,713 819 − 1,335 − 9,594
In more than five years 10,101 4,368 974 − 1,043 − 16,486 Additional information
Total 21,631 7,596 2,134 60 3,935 5,623 40,979
Carrying amount 23,605 − 1,579 60 3,443 5,623 34,310

Bank loans, Expected
debentures future Derivatives Obligations Trade and
2019 and other interest related to Other under lease other
US$M loans payments debentures derivatives liabilities (1) payables Total
(2)
Due for payment:
In one year or less or on demand 1,587 864 200 64 110 6,555 9,380
In more than one year but not more than two years 4,107 775 226 1 110 5 5,224 Shareholder information
In more than two years but not more than five years 5,513 1,864 558 − 307 − 8,242
In more than five years 11,662 4,896 1,102 − 501 − 18,161
Total 22,869 8,399 2,086 65 1,028 6,560 41,007
Carrying amount 24,113 − 958 65 715 6,560 32,411
(1) Lease obligations as at 30 June 2020 and 30 June 2019 relate to lease liabilities under IFRS 16 and finance lease liabilities under IAS 17, respectively.
(2) Excludes input taxes of US$145 million (2019: US$162 million) included in other payables. Refer to note 9 ‘Trade and other payables’.

BHP Annual Report 2020 205