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Capital disclosures and net debt (Tables)
 12 Months Ended
Dec. 31, 2019
Subclassifications of assets, liabilities and equities [abstract]  
Disclosure of the net debt ratio
We aim to manage the gearing within a 20-30% band and maintain a significant liquidity buffer. At 31 December 2019, gearing was 31.1% (2018 30.0%).
As a result of the adoption of IFRS 16 ‘Leases’ from 1 January 2019, leases that were previously classified as finance leases under IAS 17 are now presented as ‘Lease liabilities’ on the group balance sheet and therefore do not form part of finance debt. Comparative information for finance debt (previously also termed ‘gross debt’), net debt and gearing have been amended to be on a consistent basis with amounts presented for 2019. The relevant amount for finance lease liabilities that has been excluded from comparative information for 2018 is $667 million. The previously disclosed amounts for finance debt and net debt for 2018 were $65,799 million and $44,144 million respectively. The previously disclosed gearing for 2018 was 30.3%.
 
 
 
$ million

At 31 December
 
2019

2018

Finance debt
 
67,724

65,132

Less: fair value asset (liability) of hedges related to finance debta
 
(190
)
(813
)
 
 
67,914

65,945

Less: cash and cash equivalents
 
22,472

22,468

Net debt
 
45,442

43,477

Equity
 
100,708

101,548

Gearing
 
31.1
%
30.0
%
a 
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 $601 million (2018 liability of $827 million) are not included in the calculation of net debt shown above as hedge accounting was not applied for these instruments. The movement in the year is attributable to a net cash out flow of $286 million (2018 net cash flow $nil) and fair value loss of $60 million (2018 fair value losses of $193 million).
Disclosure of net debt including leases
Net debt including leases is shown in the table below.
 
 
 
$ million

At 31 December
 
2019

2018

Net debt
 
45,442

43,477

Lease liabilities
 
9,722

667

Net partner (receivable) payable for leases entered into on behalf of joint operations
 
(158
)
—

Net debt including leases
 
55,006

44,144
Disclosure of reconciliation of liabilities arising from financing activities
An analysis of changes in liabilities arising from financing activities is provided below.
 
 
 
 
 
 
$ million

 
 
Finance
debt

Hedge-
accounted
derivatives

Lease liabilities

Net partner payable for leases entered into on behalf of joint operations

Total liabilities arising from financing activities

At 1 January 2019
 
65,132

813

667

—

66,612

Adjustment on adoption of IFRS 16a
 
—

—

9,233

217

9,450

Exchange adjustments
 
(62
)
—

(4
)
8

(58
)
Net financing cash flow
 
1,671

2

(2,372
)
(14
)
(713
)
Fair value (gains) losses
 
924

(1,104
)
—

—

(180
)
New and remeasured leases/joint operation payables
 
—

—

2,614

82

2,696

Other movements
 
59

479

(416
)
(3
)
119

At 31 December 2019
 
67,724

190

9,722

290

77,926

 
 
 
 
 
 
 
At 1 January 2018
 
62,574

175

656

—

63,405

Exchange adjustments
 
(237
)
—

(22
)
—

(259
)
Net financing cash flow
 
3,540

(360
)
(35
)
—

3,145

Fair value (gains) losses
 
(856
)
998

—

—

142

New leases
 
—

—

74

—

74

Other movements
 
111

—

(6
)
—

105

At 31 December 2018
 
65,132

813

667

—

66,612