Net Debt*



Net debt ratio*	Second	Second	First	First
	quarter	quarter	half	half	Year
$ million	2018	2017	2018	2017	2017
Gross debt	60,358	63,004	60,358	63,004	63,230
Fair value (asset) liability of hedges related to finance debt_(a)	1,104	60	1,104	60	175
	61,462	63,064	61,462	63,064	63,405
Less: cash and cash equivalents	22,185	23,270	22,185	23,270	25,586
Net debt	39,277	39,794	39,277	39,794	37,819
Equity	101,770	98,461	101,770	98,461	100,404
Net debt ratio	27.8%	28.8%	27.8%	28.8%	27.4%



Analysis of changes in net debt	Second		Second		First		First
	quarter		quarter		half		half		Year
$ million	2018		2017		2018		2017		2017
Opening balance
Finance debt_(a)	62,189		61,832		63,230		58,300		58,300
Fair value (asset) liability of hedges related to finance debt_(b)	46		597		175		697		697
Less: cash and cash equivalents_(c)	22,242		23,794		25,575		23,484		23,484
Opening net debt	39,993		38,635		37,830		35,513		35,513
Closing balance
Finance debt_(a)	60,358		63,004		60,358		63,004		63,230
Fair value (asset) liability of hedges related to finance debt_(b)	1,104		60		1,104		60		175
Less: cash and cash equivalents	22,185		23,270		22,185		23,270		25,586
Closing net debt	39,277		39,794		39,277		39,794		37,819
Decrease (increase) in net debt	716		(1,159	)	(1,447	)	(4,281	)	(2,306	)
Movement in cash and cash equivalents (excluding exchange adjustments)	257		(726	)	(3,221	)	(583	)	1,558
Net cash outflow (inflow) from financing	524		42		1,908		(3,069	)	(2,520	)
Other movements	(123	)	(13	)	(150	)	(79	)	(564	)
Movement in net debt before exchange effects	658		(697	)	(1,463	)	(3,731	)	(1,526	)
Exchange adjustments	58		(462	)	16		(550	)	(780	)
Decrease (increase) in net debt	716		(1,159	)	(1,447	)	(4,281	)	(2,306	)


(a)	The fair value of finance debt at 30 June 2018 was $61,619 million (31 December 2017 $65,165 million).

(b)

Derivative financial instruments entered into for the purpose of managing interest rate and foreign currency exchange risk associated with net debt with a fair value liability position of $774 million (full year 2017 liability of $634 million and second quarter 2017 liability of $1,167 million) are not included in the calculation of net debt shown above as hedge accounting is not applied for these instruments.


(c)	See Note 1 for further information.

On 3 July 2018, in the ordinary course of business, the group issued bonds totalling $2.8 billion with maturity dates ranging from 6 to 10 years. The issuance has no effect on the group's net debt or net debt ratio.