2009 Annual Report - CRH

25. Analysis of Net Debt
Components of and reconciliation of opening to closing net debt
Net debt comprises cash and cash equivalents, liquid investments, derivative financial instrument assets and liabilities and interest-bearing loans and borrowings.
At 1st
At 31st At 31st
January Cash
Mark-to- Translation December December
Book value flow Acquisitions market adjustment Book value Fair value (i)
€m €m €m €m €m €m €m
31st December 2009
Cash and cash equivalents (note 22) 799 589 4 - (20) 1,372 1,372
Liquid investments (note 22) 128 (65) - - 3 66 66
Interest-bearing loans and borrowings (note 23) (7,298) 1,744 (3) 135 98 (5,324) (5,432)
Derivative financial instruments (net) (note 24)
Group net debt (including share of non-recourse debt in
280 (16) - (140) 39 163 163
joint ventures)
Group net debt excluding proportionately consolidated
(6,091) 2,252 1 (5) 120 (3,723) (3,831)
joint ventures (5,938) 2,215 1 (5) 118 (3,609) (3,717)
The equivalent disclosure for the prior year is as follows:
31st December 2008
Cash and cash equivalents (note 22) 1,006 (262) 68 - (13) 799 799
Liquid investments (note 22) 318 (175) - - (15) 128 128
Interest-bearing loans and borrowings (note 23) (6,498) (358) (55) (287) (100) (7,298) (6,324)
Derivative financial instruments (net) (note 24)
Group net debt (including share of non-recourse debt in
11 100 - 281 (112) 280 280
joint ventures)
Group net debt excluding proportionately consolidated
(5,163) (695) 13 (6) (240) (6,091) (5,117)
joint ventures (4,999) (678) (19) (6) (236) (5,938) (4,964)
(i) The fair values of cash and cash equivalents and floating rate loans and borrowings are based on their carrying amounts, which constitute a reasonable
approximation of fair value. The carrying value of liquid investments is the market value of these investments with these values quoted on liquid markets. The
carrying value of derivatives is fair value based on discounted future cash flows at current foreign exchange and interest rates. The fair value of fixed rate debt is
calculated based on actual traded prices for publicly traded debt or discounted future cash flows reflecting market interest rate changes since issuance for other
fixed rate debt.
Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
– Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
– Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices)
– Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Level 1 Level 2 Total
€m €m €m
At 31st December 2009
Assets measured at fair value
Fair value hedges - interest rate swaps - 186 186
Net investment hedges - cross currency swaps - 4 4
Not designated as hedges (held-for-trading) - interest rate swaps - 59 59
Held-for-trading (fair value through profit or loss) 62 - 62
62 249 311
Liabilities measured at fair value
Fair value hedges - interest rate swaps - (30) (30)
Cash flow hedges - cross currency swaps - (51) (51)
Liquid investments: Net investment hedges - cross currency swaps - (5) (5)
- (86) (86)
During the reporting period ending 31st December 2009, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out
of Level 3 fair value measurements.
CRH 99