PEOPLE | PARTNERSHIP | PERFORMANCE

2008 Half Year Review

Simplified Financial Report

Discussion and Analysis

$2m

borrowing costs

Net debt increased to $645 million at 30 June 2008 (compared with $582 million at 31 December 2007). Average net debt throughout 1H08 was 20% higher than throughout 1H07, resulting in increased gross borrowing costs ($2 million).

$96m

other operating activities

The increase in cash outflows from other net operating activities is largely due to higher tax payments in 1H08. The finalisation of the 2007 income tax position led to a tax payment in 1H08, whereas the finalisation of the 2006 income tax position resulted in a tax refund in 1H07.

$84m

purchases of PP&E and major cyclical maintenance

The capital expenditure in 1H08 is due to increased Refining capital projects in 1H08, including the new Lytton Diesel Hydrotreater Unit.

$176m

net financing cash outflows

Net financing cash outflows decreased due to increase in net borrowings reflecting increased working capital and capital expenditure and a decrease in dividends paid in 1H08.

Cash Flows

for the half year ended 30 June 2008

Millions of dollars		2008	2007	Change
	Receipts from customers	13,637	10,143	3,494
	Payments to suppliers and employees	(10,892)	(7,530)	(3,362)
	Payments for excise	(2,359)	(2,244)	(115)
1	Borrowing costs paid	(29)	(27)	(2)
2	Other net operating activities	(130)	(34)	(96)
	Net operating cash inflows	227	308	(81)
3	Purchases of property, plant and equipment (PP&E) and major cyclical maintenance	(204)	(120)	(84)
	Other investing cash flows	4	(9)	13
	Net investing cash outflows	(200)	(129)	(71)
4	Net financing cash (outflows)/inflows	(5)	(181)	176
	Net increase/(decrease) in cash held	22	(2)	24