The decrease in working capital is primarily due to:

• lower value of crude and finished product inventory due to the lower Tapis price (US$41.71/bbl in December 2008, compared with US$100.85/bbl in December 2007)
• lower crude inventory volumes due to refinery shutdowns in December 2008, and
• lower receivables due to the impact of lower crude prices on product sales prices.

Partly offset by:

• lower crude payables due to decreased Tapis price, and
• a significant prepaid tax asset ($135 million). This prepayment has resulted from tax instalment payments made prior to the recognition of inventory losses caused by the fall in crude oil prices.

The increase in property, plant and equipment is due to:

• capital expenditure and major cyclical maintenance of $462 million.

Partly offset by:

• depreciation of $168 million, and
• net disposals of $28 million.

Net debt was $832 million at 31 December 2008, an increase of $250 million from 31 December 2007. Debt increased in the year due to the reduced historical profit, the high capital expenditure program and the overpayment of tax instalments.

Other non-current assets and liabilities increased from a net liability of $3 million at 31 December 2007 to a net liability of $111 million at 31 December 2008. The unprecedented 20% fall in equity markets in the second half of 2008 resulted in a deficit in the Caltex Defined Benefit superannuation plan. This will be funded in future years in accordance with advice received from the actuary.