Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2018 | |
Documentand Entity Information [Abstract] | |
Document Type | 6-K |
Document Period End Date | Jun. 30, 2018 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | H1 |
Trading Symbol | BTI |
Entity Registrant Name | British American Tobacco p.l.c. |
Entity Central Index Key | 1,303,523 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Group Income Statement - (Unaud
Group Income Statement - (Unaudited) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Income Statement [Abstract] | ||||
Revenue | [1] | £ 11,636 | £ 7,418 | £ 19,564 |
Raw materials and consumables used | (2,355) | (1,881) | (4,520) | |
Changes in inventories of finished goods and work in progress | 76 | (59) | (513) | |
Employee benefit costs | (1,409) | (1,144) | (2,679) | |
Depreciation, amortisation and impairment costs | (437) | (346) | (902) | |
Other operating income | 32 | 55 | 144 | |
Other operating expenses | (3,105) | (1,469) | (4,682) | |
Profit from operations | 4,438 | 2,574 | 6,412 | |
Net finance costs | (701) | (325) | (1,094) | |
Finance income | 62 | 56 | 103 | |
Finance costs | (763) | (381) | (1,197) | |
Share of post-tax results of associates and joint ventures | 232 | 778 | 24,209 | |
Profit before taxation | 3,969 | 3,027 | 29,527 | |
Taxation on ordinary activities | (1,193) | (680) | 8,129 | |
Profit for the period | 2,776 | 2,347 | 37,656 | |
Attributable to: | ||||
Owners of the parent | 2,690 | 2,261 | 37,485 | |
Non-controlling interests | 86 | 86 | 171 | |
Profit for the period | £ 2,776 | £ 2,347 | £ 37,656 | |
Earnings per share | ||||
Basic | £ 1.177 | £ 1.218 | £ 18.339 | |
Diluted | £ 1.174 | £ 1.214 | £ 18.276 | |
[1] | Revenue is net of duty, excise and other taxes of £18,250 million and £17,377 million for the six months ended 30 June 2018 and 2017 respectively, and £37,780 million for the year ended 31 December 2017. |
Group Income Statement - (Unau3
Group Income Statement - (Unaudited) (Parenthetical) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Duty excise and other taxes levied on tobacco and tobacco related products | £ 18,250 | £ 17,377 | £ 37,780 |
Group Statement of Comprehensiv
Group Statement of Comprehensive Income (Unaudited) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Profit for the period (page 19) | £ 2,776 | £ 2,347 | £ 37,656 |
Other comprehensive income/(expense) | |||
Items that may be reclassified subsequently to profit or loss: | 978 | (536) | (3,809) |
Differences on exchange | |||
Differences on exchange | 1,288 | (609) | |
Cash flow hedges | |||
– net fair value losses | (166) | (264) | |
– reclassified and reported in profit for the period | 8 | 13 | 109 |
– reclassified and reported in net assets | 7 | (13) | (16) |
Net investment hedges | |||
– net fair value (losses)/gains | (192) | 237 | 425 |
– differences on exchange on borrowings | (136) | (56) | (68) |
Tax on items that may be reclassified | (9) | 53 | 34 |
Items that will not be reclassified subsequently to profit or loss: | 287 | 115 | 681 |
Retirement benefit schemes | |||
Tax on items that will not be reclassified | (56) | (39) | (171) |
Total other comprehensive income/(expense) for the period, net of tax | 1,265 | (421) | (3,128) |
Total comprehensive income for the period, net of tax | 4,041 | 1,926 | 34,528 |
Attributable to: | |||
Owners of the parent | 3,952 | 1,853 | 34,361 |
Non-controlling interests | 89 | 73 | 167 |
Total comprehensive income for the period, net of tax | 4,041 | 1,926 | 34,528 |
Investments Held at Fair Value | |||
Investments held at fair value | |||
– net fair value gains in respect of associates, net of tax | 12 | 5 | |
Subsidiaries | |||
Differences on exchange | |||
Differences on exchange | 1,358 | (216) | (3,084) |
Retirement benefit schemes | |||
– net actuarial gains in respect of subsidiaries | 346 | 119 | 833 |
– surplus recognition and minimum funding obligations in respect of subsidiaries | (3) | (1) | (6) |
Subsidiaries | Investments Held at Fair Value | |||
Investments held at fair value | |||
– net fair value losses in respect of subsidiaries | (27) | ||
Associates | |||
Differences on exchange | |||
Differences on exchange | (70) | (393) | (923) |
Retirement benefit schemes | |||
– actuarial gains in respect of associates, net of tax | 36 | 25 | |
Associates | Investments Held at Fair Value | |||
Investments held at fair value | |||
– net fair value gains in respect of associates, net of tax | £ 12 | £ 5 | £ 5 |
Group Statement of Changes in E
Group Statement of Changes in Equity - (Unaudited) - GBP (£) £ in Millions | Total | Share Capital | Share Premium, Capital Redemption and Merger Reserves | Other Reserves | Retained Earnings | Total Attributable to Owners of Parent | Non- Controlling Interests |
Beginning balance at Dec. 31, 2016 | £ 8,406 | £ 507 | £ 3,931 | £ 413 | £ 3,331 | £ 8,182 | £ 224 |
Total comprehensive income for the period, net of tax | 1,926 | (523) | 2,376 | 1,853 | 73 | ||
Profit for the period (page 19) | 2,347 | 2,261 | 2,261 | 86 | |||
Other comprehensive income for the period, net of tax (page 20) | (421) | (523) | 115 | (408) | (13) | ||
– value of employee services | 36 | 36 | 36 | ||||
– proceeds from shares issued | 2 | 2 | 2 | ||||
– ordinary shares | (2,181) | (2,181) | (2,181) | ||||
– to non-controlling interests | (105) | (105) | |||||
– held in employee share ownership trusts | (215) | (215) | (215) | ||||
– deferred tax on employee share schemes | 42 | 42 | 42 | ||||
Other movements | (2) | (1) | (1) | (2) | |||
Ending balance at Jun. 30, 2017 | 7,909 | 507 | 3,933 | (111) | 3,388 | 7,717 | 192 |
Beginning balance at Dec. 31, 2016 | 8,406 | 507 | 3,931 | 413 | 3,331 | 8,182 | 224 |
Total comprehensive income for the period, net of tax | 34,528 | (3,805) | 38,166 | 34,361 | 167 | ||
Profit for the period (page 19) | 37,656 | 37,485 | 37,485 | 171 | |||
Other comprehensive income for the period, net of tax (page 20) | (3,128) | (3,805) | 681 | (3,124) | (4) | ||
– value of employee services | 105 | 105 | 105 | ||||
– proceeds from shares issued | 5 | 5 | 5 | ||||
– ordinary shares | (4,465) | (4,465) | (4,465) | ||||
– to non-controlling interests | (169) | (169) | |||||
– held in employee share ownership trusts | (205) | (205) | (205) | ||||
Shares issued – RAI acquisition | 22,773 | 107 | 22,666 | 22,773 | |||
Other movements | 3 | 3 | 3 | ||||
Ending balance (Accounting policy change (IFRS 9)) at Dec. 31, 2017 | (38) | (9) | (29) | (38) | |||
Ending balance (Revised for IFRS 9) at Dec. 31, 2017 | 60,943 | 614 | 26,602 | (3,401) | 36,906 | 60,721 | 222 |
Ending balance at Dec. 31, 2017 | 60,981 | 614 | 26,602 | (3,392) | 36,935 | 60,759 | 222 |
Total comprehensive income for the period, net of tax | 4,041 | 975 | 2,977 | 3,952 | 89 | ||
Profit for the period (page 19) | 2,776 | 2,690 | 2,690 | 86 | |||
Other comprehensive income for the period, net of tax (page 20) | 1,265 | 975 | 287 | 1,262 | 3 | ||
– value of employee services | 64 | 64 | 64 | ||||
– proceeds from shares issued | 3 | 3 | 3 | ||||
– ordinary shares | (2,224) | (2,224) | (2,224) | ||||
– to non-controlling interests | (93) | (93) | |||||
– held in employee share ownership trusts | (143) | (143) | (143) | ||||
Other movements | 28 | 28 | 28 | ||||
Ending balance at Jun. 30, 2018 | £ 62,619 | £ 614 | £ 26,605 | £ (2,426) | £ 37,608 | £ 62,401 | £ 218 |
Group Balance Sheet - (Unaudite
Group Balance Sheet - (Unaudited) £ in Millions, € in Billions, $ in Billions | Jun. 30, 2018GBP (£) | Dec. 31, 2017GBP (£) | Jun. 30, 2017GBP (£) |
Non-current assets | |||
Intangible assets | £ 120,006 | £ 117,785 | £ 12,177 |
Property, plant and equipment | 4,849 | 4,882 | 3,636 |
Investments in associates and joint ventures | 1,775 | 1,577 | 9,438 |
Retirement benefit assets | 1,200 | 1,123 | 615 |
Deferred tax assets | 423 | 333 | 468 |
Trade and other receivables | 722 | 756 | 758 |
Investments held at fair value | 50 | 42 | 44 |
Derivative financial instruments | 539 | 590 | 576 |
Total non-current assets | 129,564 | 127,088 | 27,712 |
Current assets | |||
Inventories | 6,339 | 5,864 | 5,177 |
Income tax receivable | 49 | 460 | 71 |
Trade and other receivables | 4,039 | 4,053 | 3,833 |
Investments held at fair value | 188 | 65 | 26 |
Derivative financial instruments | 193 | 228 | 312 |
Cash and cash equivalents | 2,125 | 3,291 | 2,019 |
Total current assets other than assets classified as held for sale | 12,933 | 13,961 | 11,438 |
Assets classified as held-for-sale | 4 | 5 | 36 |
Total current assets | 12,937 | 13,966 | 11,474 |
Total assets | 142,501 | 141,054 | 39,186 |
Equity - Capital and reserves | |||
Share capital | 614 | 614 | 507 |
Share premium, capital redemption and merger reserves | 26,605 | 26,602 | 3,933 |
Other reserves | (2,426) | (3,392) | (111) |
Retained earnings | 37,608 | 36,935 | 3,388 |
Owners of the parent | 62,401 | 60,759 | 7,717 |
Non-controlling interests | 218 | 222 | 192 |
Total equity | 62,619 | 60,981 | 7,909 |
Non-current liabilities | |||
Borrowings | 43,225 | 44,027 | 15,085 |
Retirement benefit liabilities | 1,489 | 1,821 | 827 |
Deferred tax liabilities | 17,612 | 17,129 | 659 |
Provisions | 347 | 354 | 395 |
Trade and other payables | 1,059 | 1,058 | 1,036 |
Derivative financial instruments | 100 | 79 | 79 |
Total non-current liabilities | 63,832 | 64,468 | 18,081 |
Current liabilities | |||
Borrowings | 5,287 | 5,423 | 5,822 |
Income tax payable | 739 | 720 | 622 |
Provisions | 330 | 399 | 330 |
Trade and other payables | 9,498 | 8,908 | 5,948 |
Derivative financial instruments | 196 | 155 | 474 |
Total current liabilities | 16,050 | 15,605 | 13,196 |
Total equity and liabilities | £ 142,501 | £ 141,054 | £ 39,186 |
Group Cash Flow Statement (Unau
Group Cash Flow Statement (Unaudited) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Cash generated from operating activities (page 32) | £ 4,670 | £ 1,788 | £ 6,119 |
Dividends received from associates | 1 | 465 | 903 |
Tax paid | (813) | (547) | (1,675) |
Net cash generated from operating activities | 3,858 | 1,706 | 5,347 |
Cash flows from investing activities | |||
Interest received | 36 | 34 | 83 |
Purchases of property, plant and equipment | (205) | (198) | (791) |
Proceeds on disposal of property, plant and equipment | 9 | 23 | 95 |
Purchases of intangibles | (35) | (99) | (187) |
Purchases of investments | (124) | (90) | (170) |
Proceeds on disposals of investments | 48 | 85 | 160 |
Acquisition of RAI net of cash acquired | (17,657) | ||
Investment in associates and acquisitions of other subsidiaries net of cash acquired | (14) | (52) | (77) |
Net cash used in investing activities | (285) | (297) | (18,544) |
Cash flows from financing activities | |||
Interest paid | (752) | (379) | (1,114) |
Proceeds from increases in and new borrowings | 1,650 | 3,839 | 40,937 |
Inflows/(outflows) relating to derivative financial instruments | 25 | (108) | (406) |
Purchases of own shares held in employee share ownership trusts | (143) | (215) | (205) |
Reductions in and repayments of borrowings | (3,067) | (2,365) | (20,827) |
Dividends paid to owners of the parent | (2,114) | (2,179) | (3,465) |
Dividends paid to non-controlling interests | (96) | (106) | (167) |
Other | 4 | 2 | 6 |
Net cash (used in)/from financing activities | (4,493) | (1,511) | 14,759 |
Net cash flows (used in)/from operating, investing and financing activities | (920) | (102) | 1,562 |
Differences on exchange | (148) | (139) | (391) |
(Decrease)/Increase in net cash and cash equivalents in the period | (1,068) | (241) | 1,171 |
Net cash and cash equivalents at 1 January | 2,822 | 1,651 | 1,651 |
Net cash and cash equivalents at period end | 1,754 | 1,410 | 2,822 |
Cash and cash equivalents | 2,125 | 2,019 | 3,291 |
Overdrafts and accrued interest | £ (371) | £ (609) | £ (469) |
Group Cash Flow Statement (Una8
Group Cash Flow Statement (Unaudited) ( (Parenthetical)) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Statement Of Cash Flows [Abstract] | |||
Net cash outflows relating to litigation settlements and adjusting items | £ 229 | £ 352 | £ 685 |
Accounting Policies and Basis o
Accounting Policies and Basis of Preparation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Accounting Policies [Abstract] | |
Accounting Policies and Basis of Preparation | Notes to the Interim Financial Statements ACCOUNTING POLICIES AND BASIS OF PREPARATION The condensed consolidated financial information comprises the unaudited interim financial information for the six months to 30 June 2018 and as revised for IFRS 15 for both the six-month period ended 30 June 2017 and the year ended 31 December 2017, approved on 25 July 2018. This condensed consolidated financial information has been prepared in accordance with IAS 34 Interim Financial Reporting The condensed consolidated financial information does not constitute statutory accounts within the meaning of the UK Companies Act 2006 and should be read in conjunction with the Annual Report and Form 20-F, including the audited financial statements for the year ended 31 December 2017, which were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the IASB, IFRS as adopted by the EU, and in accordance with the provisions of the UK Companies Act 2006. IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB. The differences have no impact on the Group’s consolidated financial statements for the periods presented. The Annual Report and Form 20-F for 2017 represent the statutory accounts for that year and have been filed with the Registrar of Companies. The auditor’s report on those statements was unmodified and did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 (2) or (3) of the Companies Act 2006. This condensed consolidated financial information has been prepared under the historical cost convention, except in respect of certain financial instruments, and on a basis consistent with the accounting policies as set out in the Annual Report and Form 20-F for the year ended 31 December 2017, except where noted below. With effect from 1 January 2018, the Group has adopted IFRS 15 Revenue from Contracts with Customers for the six months to 30 June 2017 and the twelve months to 31 December 2017 by £299 million and £664 million, respectively, with £64 million (£nil for the six-month period ended 30 June 2017). In addition, with effect from 1 January 2018, the Group has adopted IFRS 9 Financial Instruments Notes to the Interim Financial Statements Accounting policies and basis of preparation cont… IFRS 9 also changes the classification and measurement of financial assets. The category of available-for-sale investments (where fair value changes were deferred in reserves until disposal of the investment) has been replaced with the category of financial assets at Fair Value through Profit and Loss (for most investments) and the category of financial assets at Fair Value through Other Comprehensive Income (for qualifying equity investments). The available-for-sale reserve at 1 January 2018 has been reclassified as appropriate into retained earnings. In addition, certain loans and receivables which do not meet the recognition and measurement tests for amortised cost classification under IFRS 9 have been reclassified as financial assets at Fair Value through Profit and Loss at the same date. Given the immateriality of the various investment classes and to avoid clutter on the face of the balance sheet, the Group will use the term “investments held at fair value” to refer to all of these financial assets both pre- and post- the adoption of IFRS 9. For further details on the impact on the Group’s balance sheet of these changes are provided on page 38. The Group has adopted the hedge accounting requirements of IFRS 9 prospectively from 1 January 2018. In addition, with effect from 1 January 2018, the Group has changed certain estimates of useful economic lives for plant and machinery across the Group, harmonising depreciation rates used by the International Businesses and by RAI from 14 years and 30 years, respectively, to a standard 20-year life. The effect of the change is not material to the Group, and will be slightly less than £60 million (£30 million for the period ended 30 June 2018). RAI recognised an impairment charge of £13 million in compliance with the new estimate. The preparation of this condensed consolidated financial information requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the d isclosure of contingent liabilities at the date of this condensed consolidated financial information. Such estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable in the circumstances and constitute management’s best judgement at the date of the condensed consolidated financial information. The key estimates and assumptions were the same as those that applied to the consolidated financial information for the year ended 31 December 2017, apart from updating the assumptions used to determine the carrying value of liabilities for retirement benefit schemes. In the future, actual experience may deviate from these estimates and assumptions, which could affect this condensed consolidated financial information as the original estimates and assumptions are modified, as appropriate, in the period in which the circumstances change. |
Adjusting Items
Adjusting Items | 6 Months Ended |
Jun. 30, 2018 | |
Adjusting Items [Abstract] | |
Adjusting Items | ADJUSTING ITEMS Adjusting items are significant items of income or expense in revenue, profit from operations, net finance costs, taxation and the Group’s share of the post-tax results of associates and joint ventures which individually or, if of a similar type, in aggregate, are relevant to an understanding of the Group’s underlying financial performance because of their size, nature or incidence. In identifying and quantifying adjusting items, the Group consistently applies a policy that defines criteria that are required to be met for an item to be classified as adjusting. These items are separately disclosed in the segmental analyses or in the notes to the accounts as appropriate. The Group believes that these items are useful to users of the Group financial statements in helping them to understand the underlying business performance and are used to derive the Group’s principal non-GAAP measures of adjusted revenue, adjusted profit from operations and adjusted diluted earnings per share, all of which are before the impact of adjusting items and which are reconciled from revenue, profit from operations and diluted earnings per share. |
Analysis Of Revenue By Segment
Analysis Of Revenue By Segment | 6 Months Ended |
Jun. 30, 2018 | |
Reportable Segments [Abstract] | |
Analysis Of Revenue By Segment | Notes to the Interim Financial Statements ANALYSIS OF REVENUE BY SEGMENT 2018 2017 Reported Adj Items 1 Adjusted Exchange Adjusted at CC 2 Revised* Adj Items 1 Adjusted Revenue £m £m £m £m £m £m £m £m US 4,525 - 4,525 418 4,943 - - - APME 2,384 - 2,384 236 2,620 2,489 - 2,489 AMSSA 1,951 - 1,951 255 2,206 2,149 - 2,149 ENA 2,776 (103 ) 2,673 111 2,784 2,780 (69 ) 2,711 Total Region 11,636 (103 ) 11,533 1,020 12,553 7,418 (69 ) 7,349 ADJUSTING ITEMS INCLUDED IN REVENUE Adjusting items in revenue relate to certain third-party contract manufacturing arrangements. The Group will acquire and sell goods inclusive of excise, acquired from a third party under short-term arrangements, and then passed on to customers. This increases both revenue and cost of sales, with no impact to profit from operations but distorts operating margin. To better reflect the underlying performance of the Group, this uplift from excise in both revenue and cost of sales has been adjusted for, given the temporary nature of the arrangement. ANALYSIS OF PROFIT FROM OPERATIONS AND DILUTED EARNINGS PER SHARE BY SEGMENT 2018 2017 Reported Adj Items 1 Adjusted Exchange Adjusted at CC 2 Revised* Adj Items 1 Adjusted Profit from Operations £m £m £m £m £m £m £m £m US 1,875 214 2,089 206 2,295 - - - APME 920 30 950 83 1,033 1,016 45 1,061 AMSSA 796 33 829 91 920 806 54 860 ENA 847 103 950 18 968 752 168 920 Total Region 4,438 380 4,818 398 5,216 2,574 267 2,841 Net finance costs (701 ) 35 (666 ) (61 ) (727 ) (325 ) 49 (276 ) Associates and joint ventures 232 (37 ) 195 18 213 778 (22 ) 756 Profit before tax 3,969 378 4,347 355 4,702 3,027 294 3,321 Taxation (1,193 ) 75 (1,118 ) (90 ) (1,208 ) (680 ) (48 ) (728 ) Non-controlling interests (86 ) - (86 ) (8 ) (94 ) (86 ) (2 ) (88 ) Profit attributable to shareholders 2,690 453 3,143 257 3,400 2,261 244 2,505 Diluted number of shares (m) 2,291 2,291 2,291 1,863 1,863 Diluted earnings per share (pence) 117.4 137.2 148.4 121.4 134.4 Notes to the analysis of revenue and profit from operations above: 1. Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence. 2. CC : constant currency – measures are calculated based on a retranslation, at the prior year’s exchange rates, of the current year’s results of the Group and, where applicable, its segments * 2017 results have been revised for the impact of IFRS 15 ( Revenue from Contracts with Customers |
Adjusting Items Included In Pro
Adjusting Items Included In Profit From Operation | 6 Months Ended |
Jun. 30, 2018 | |
Revenue [Abstract] | |
Adjusting Items Included In Profit From Operations | Notes to the Interim Financial Statements ADJUSTING ITEMS INCLUDED IN PROFIT FROM OPERATIONS Adjusting items are significant items in the profit from operations that individually or, if of a similar type, in aggregate, are relevant to an understanding of the Group’s underlying financial performance. These items are separately disclosed in the segmental analyses. (a) Restructuring and integration costs Restructuring costs reflect the costs incurred as a result of initiatives to improve the effectiveness and the efficiency of the Group as a globally integrated enterprise, including the relevant operating costs of implementing the new operating model. These costs represent additional expenses incurred that are not related to the normal business and day-to-day activities. The new operating model includes revised organisation structures, standardised processes and shared back office services underpinned by a global single instance of SAP. These initiatives also include a review of the Group’s manufacturing operations, supply chain, overheads and indirect costs, organisational structure and systems and software used. The costs of these initiatives, together with the costs of integrating acquired businesses into existing operations, including acquisition costs, are included in profit from operations under the following headings: 6 months to Year to 30.6.18 30.6.17 31.12.17 £m £m £m Employee benefit costs 36 50 193 Depreciation and impairment costs 27 6 85 Other operating expenses 42 77 330 Other operating income (6 ) - (8 ) Total 99 133 600 The adjusting charge in the six-months ended 30 June 2018 relates to the integration costs associated with the acquisition of RAI and ongoing costs of implementing the revisions to the Group’s operating model. This includes the cost of packages in respect of permanent headcount reductions and permanent employee benefit reductions in the Group. The costs also cover the downsizing activities in Germany, partially offset by the income from sale of certain assets that have become available as part of the downsizing activities. Restructuring and integration costs in the six months to 30 June 2017 include advisor fees and costs incurred related to the acquisition of the remaining shares in Reynolds not already owned by the Group, that completed on 25 July 2017. It also includes the implementation of a new operating model and the cost of packages in respect of permanent headcount reductions and permanent employee benefit reductions in the Group. The costs also cover the downsizing activities in Germany. (b) Amortisation and impairment of trademarks and similar intangibles The acquisition of trademarks from RAI, Bulgartabac Holdings and previous business combinations, including TDR, Chic and ST, have resulted in the capitalisation of trademarks and similar intangibles that are amortised over their expected useful lives, which do not exceed 20 years. The charge of £189 million is included in depreciation, amortisation and impairment costs in the profit from operations for the six months to 30 June 2018 (30 June 2017: £134 million). For the year to 31 December 2017, the charge was £383 million. Notes to the Interim Financial Statements Adjusting items included in profit from operations cont… (c) Fox River In 2011, a Group subsidiary provided £274 million in respect of claims in relation to environmental clean-up costs of the Fox River. On 30 September 2014, a Group subsidiary, NCR, Appvion and Windward Prospects entered into a Funding Agreement with regard to the costs for the clean-up of Fox River. Based on this Funding Agreement, in the six months to 30 June 2018, £9 million has been paid (30 June 2017: £2 million, 31 December 2017: £25 million). In January 2017, NCR and Appvion entered into a consent decree with the US Government to resolve how the remaining clean-up will be funded and to resolve further outstanding claims between them. The Consent Decree was approved by the District Court of Wisconsin in August 2017. The US Government enforcement action against NCR was terminated as a result of that order and contribution claims from the Potentially Responsible Parties (“PRPs”) against NCR were dismissed. One of the PRPs, P.H. Glatfelter has filed an appeal against the approval of the Consent Decree in the US Court of Appeals. This hearing will be heard in late 2018. Considering these developments, the provision has been reviewed. No adjustment has been proposed, other than as related to the charge above, with the provision standing at £129 million at 30 June 2018 (30 June 2017: £161 million, 31 December 2017: £138 million). In July 2016, the High Court ruled in a Group subsidiary’s favour that a dividend of €135 million paid by Windward to Sequana in May 2009 was a transaction made with the intention of putting assets beyond the reach of the Group subsidiary and of negatively impacting its interests. On 10 February 2017, further to a hearing in January 2017 to determine the relief due, the Court found in the Group subsidiary’s favour, ordering that Sequana must pay an amount up to the full value of the dividend plus interest which equates to around US$185 million, related to past and future clean-up costs. The Court granted all parties leave to appeal and Sequana a stay in respect of the above payments. The appeal was heard in June 2018 with a judgment expected by the end of 2018. Due to the uncertain outcome of the case no asset has been recognised in relation to this ruling. In February 2017, Sequana entered into a process in France seeking court protection (the “Sauvegarde”), exiting the Sauvegarde in June 2017. No payments have been received. (d) Other In the six months ended June 2018, the Group incurred £92 million of other adjusting items, including £77 million related to Engle progeny litigation offset by credits related to the Non-Participating Manufacturers settlement, which have been adjusted within “other operating expenses”. In the year ended 31 December 2017, the release of the fair value acquisition accounting adjustments to finished goods inventories of £465 million has been adjusted within “changes in inventories of finished goods and work in progress”. Also included in 2017 is the impairment of certain assets (£69 million) related to a third-party distributor (Agrokor) in Croatia, that has been adjusted within “other operating expenses”. ADJUSTING ITEMS INCLUDED IN NET FINANCING COSTS In the six months ended 30 June 2018, the Group incurred interest on adjusting tax payables of £35 million, including interest of £12 million (2017: £12 million) in relation to FII GLO, as described on page 41, and a £22 million charge in respect of withholding tax in Russia as explained on page 31. Notes to the Interim Financial Statements ADJUSTING ITEMS INCLUDED IN SHARE OF POST-TAX RESULTS OF ASSOCIATES AND JOINT VENTURES The following is a summary of the adjusting items incurred in respect of the Group’s associates and joint ventures, shown reflecting the Group’s share of post-tax results: 6 months to Year to 30.6.18 30.6.17 31.12.17 £m £m £m Gain on deemed disposal of RAI as an associate - - 23,288 Costs incurred by RAI related to its acquisition by BAT - - (33 ) Other adjusting items incurred by RAI pre-acquisition - (12 ) (60 ) Tisak/Agrokor adjustment - - (27 ) Reversal of tax claim in ITC 10 - - Dilution of interest in ITC 27 34 29 Total 37 22 23,197 The Group’s interest in ITC decreased from 29.71% to 29.66% as a result of ITC issuing ordinary shares under the company’s Employees Share Option Scheme. The issue of these shares and change in the Group’s share of ITC resulted in a gain of £27 million, which is treated as a deemed partial disposal and included in the income statement. ITC also recognised an adjusting gain related to the release of certain provisions related to a tax claim, the Group’s share of which, net of tax, was £10 million. The share of post-tax results of associates and joint ventures is after the adjusting items shown above which are excluded from the calculation of adjusted earnings per share as set out on page 36. ADJUSTING ITEMS INCLUDED IN TAXATION Adjusting items relate to a: • £69 million charge due to changes in the US State tax rates in the period, relating to the revaluation of deferred tax liabilities arising on trademarks recognised on the RAI acquisition in 2017; and • £77 million charge related to recent guidelines issued in Russia where higher withholding taxes could apply from 2015 onwards. A provision for the associate tax change and £22 million of interest has been recognised in the period for 2015 through to 2017. As both of the above items are not reflective of the ongoing business, these have been recognised as adjusting items within tax. This is partially offset by £71 million for the six months to 30 June 2018 (30 June 2017: £48 million, 31 December 2017: £454 million) in respect of the tax on other adjusting items, as described on pages 29 and 30. |
Cash Flow
Cash Flow | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Cash Flow [Abstract] | |
Cash Flow | Notes to the Interim Financial Statements CASH FLOW Net cash generated from operating activities Net cash generated from operating activities in the IFRS cash flows on page 25 includes the following items: 6 months to Year to 30.6.18 30.6.17 31.12.17 Revised Revised £m £m £m Profit from operations 4,438 2,574 6,412 Depreciation, amortisation and impairment 437 346 902 (Increase)/decrease in inventories (582 ) 539 1,409 Increase in trade and other receivables (78 ) (151 ) (732 ) Increase in amounts receivable in respect of the Quebec Class Action - (130 ) (130 ) Increase/(decrease) in provision for MSA 719 - (934 ) Decrease in trade and other payables (189 ) (1,312 ) (685 ) Decrease in net retirement benefit liabilities (77 ) (36 ) (131 ) Decrease in provisions (66 ) (74 ) (78 ) Other non-cash items 68 32 86 Cash generated from operating activities 4,670 1,788 6,119 Dividends received from associates 1 465 903 Tax paid (813 ) (547 ) (1,675 ) Net cash generated from operating activities 3,858 1,706 5,347 Net cash generated from operating activities increased by £2,152 Expenditure on research and development was approximately £112 million 2017: £77 million) with a focus on products that could potentially reduce the risk associated with smoking conventional cigarettes. Net cash used in investing activities Net cash used in investing activities was largely in line with prior year at £285 million (30 June 2017: £297 million) and includes the purchase of treasury instruments in certain markets. 2017 included a number of acquisitions including Winnington Holdings AB in Sweden and certain assets from Must Have Limited in the UK, including the electronic cigarette brand ViP. Included within investing activities is gross capital expenditure which includes purchases of property, plant and equipment and purchases of intangibles. This includes the investment in the Group’s global operational infrastructure (including, but not limited to, the manufacturing network, trade marketing and IT systems). In the six months ended June 2018, the Group invested £241 million, an increase of 14.8% on the prior year (30 June 2017: £210 million). Notes to the Interim Financial Statements Cash flow cont… Net cash used in financing activities Net cash used in financing activities was £4,493 million in the period ended 30 June 2018 (30 June 2017: £1,511 million). • repaid a €0.4 billion bond (in March 2018) and three bonds totalling US$2.5 billion (in June 2018) at maturity; • repaid the £0.6 billion, that was drawn under the revolving credit facility, and £1.2 billion of commercial paper that were both outstanding at 31 December 2017; and • issued and repaid commercial paper with a net amount of £2.6 billion outstanding at 30 June 2018. The Group also paid the two quarterly interim dividends in February (43.6p per share) and May (48.8p per share) to shareholders. |
Liquidity
Liquidity | 6 Months Ended |
Jun. 30, 2018 | |
Borrowings [Abstract] | |
Liquidity | LIQUIDITY The Treasury function is responsible for raising finance for the Group, managing the Group’s cash resources and the financial risks arising from underlying operations. All these activities are carried out under defined policies, procedures and limits. The Group has targeted an average centrally managed bond maturity of at least five years with no more than 20% of centrally managed debt maturing in a single rolling year. As at 30 June 2018, the average centrally managed debt maturity of bonds was 9.2 years (30 June 2017: 8.5 years; 31 December 2017: 9.2 years) and the highest proportion of centrally managed debt maturing in a single rolling 12-month period was 14.0% (30 June 2017: 19.7%; 31 December 2017: 13.2%). The Group continues to maintain investment-grade credit ratings, with ratings from Moody’s/S&P at Baa2 (stable outlook)/BBB+ (stable outlook) respectively. The strength of the ratings has underpinned debt issuance and the Group is confident of its ability to successfully access the debt capital markets. All contractual borrowing covenants have been met and none are expected to inhibit the Group’s operations or funding plans. It is Group policy that short-term sources of funds (including drawing under both the US$4 billion and £3 billion euro commercial paper programmes) are backed by undrawn committed lines of credit and cash. In July 2018, the Group exercised a one-year extension option for the £3 billion 364-day revolving credit facility, extending the final maturity to 2019. The Group also has access to a £3 billion revolving credit facility with a maturity date in 2021. These facilities were undrawn at 30 June 2018. |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2018 | |
Borrowings [Abstract] | |
Borrowings | BORROWINGS The maturity profile of borrowings, which were higher due to the acquisition of RAI, is as follows: 6 months to Year to 30.6.18 30.6.17 31.12.17 £m £m £m Due within one year: 5,287 5,822 5,423 Due beyond one year: 43,225 15,085 44,027 Total borrowings 48,512 20,907 49,450 |
Fair Value Measurements and Val
Fair Value Measurements and Valuation Processes | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Fair Value Measurement [Abstract] | |
Fair Value Measurements and Valuation Processes | FAIR VALUE MEASUREMENTS AND VALUATION PROCESSES The Group held certain financial instruments at fair value at 30 June 2018. The definitions and valuation techniques employed for these as at 30 June 2018 are consistent with those used at 31 December 2017 and disclosed in Note 23 on pages 161 to 164 of the 2017 Annual Report and Form 20-F: - Level 1 financial instruments are traded in an active market and fair value is based on quoted prices at the period end. - Level 2 financial instruments are not traded in an active market, but the fair values are based on quoted market prices, broker/dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The Group’s level 2 financial instruments include OTC derivatives. - The fair values of level 3 financial instruments have been determined using a valuation technique where at least one input (which could have a significant effect on the instrument's valuation) is not based on observable market data. The Group’s level 3 financial instruments primarily consist of interest free loans and an equity investment in an unquoted entity which is valued using the discounted cash flows of estimated future dividends. While the carrying values of assets and liabilities at fair value have changed since 31 December 2017, the Group does not consider the movements in value to be significant, and the categorisation of these assets and liabilities in accordance with the disclosure requirements of IFRS 7 has not materially changed. In accordance with the adoption of IFRS 9, as shown on page 38, the Group has reclassified £146 million from trade and other receivables to investments held at fair value. The values of level 1 assets and level 3 assets are not material to the Group and were £88 million and £150 million respectively at 30 June 2018 (30 June 2017: £26 million and £44 million respectively and 31 December 2017: £91 million and £16 million respectively). Level 2 assets and liabilities are shown below. 30.6.2018 30.6.2017 31.12.2017 Level 2 £m Level 2 £m Level 2 £m Assets at fair value Derivatives relating to – interest rate swaps 141 209 166 – cross-currency swaps 436 528 450 – forward foreign currency contracts 155 151 202 Assets at fair value 732 888 818 Liabilities at fair value Derivatives relating to – interest rate swaps 82 212 91 – cross-currency swaps 16 132 - – forward foreign currency contracts 198 209 143 Liabilities at fair value 296 553 234 Borrowings are carried at amortised cost. The fair value of borrowings is estimated to be £47,527 million (30 June 2017: £21,718 million and 31 December 2017: £50,449 million). The value of other assets/liabilities held at amortised cost are not materially different from their fair values. |
Related Party Disclosures
Related Party Disclosures | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Transactions Between Related Parties [Abstract] | |
Related Party Disclosures | Notes to the Interim Financial Statements RELATED PARTY DISCLOSURES There were no material changes in related parties or related party transactions. The Group’s related party transactions and relationships for 2017 were disclosed on page 170 of the Annual Report and Form 20-F for the year ended 31 December 2017. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share were 3.4% lower at 117.7p (2017: 121.8p) as the increase in the Group’s operating performance was more than offset by the translational foreign exchange headwind, increased financing charges and withholding tax charge in Russia. Adjusted diluted earnings per share grew by 2.1% to 137.2p (2017: 134.4p) as the Group’s improved operating performance before adjusting items was partially offset by the higher interest charges, reduced profit from associates and joint ventures and the transactional foreign exchange headwind. 6 months to Year to 30.6.18 30.6.17 31.12.17 Revised Revised pence pence pence Earnings per share - basic 117.7 121.8 1,833.9 - diluted 117.4 121.4 1,827.6 Adjusted earnings per share - basic 137.5 134.9 283.1 - diluted 137.2 134.4 282.1 Headline earnings per share - basic 117.2 126.4 699.8 - diluted 116.7 126.0 697.3 Basic earnings per share are based on the profit for the year attributable to ordinary shareholders and the weighted average number of ordinary shares in issue during the period (excluding treasury shares). For the calculation of the diluted earnings per share, the weighted average number of shares reflects the potential dilutive effect of employee share schemes. Notes to the Interim Financial Statements Earnings Per Share cont… Adjusted diluted earnings per share are calculated by taking the following adjustments into account (see pages 29 to 31): 6 months to Year to 30.6.18 30.6.17 31.12.17 Revised Revised pence pence pence Diluted earnings per share 117.4 121.4 1,827.6 Effect of restructuring and integration costs 3.9 5.1 22.8 Effect of amortisation of trademarks and similar intangibles 6.6 6.4 14.3 Effect of other adjusting items 6.5 - 17.1 Effect of associates’ adjusting items (1.7) (1.2) (1,131.0) Effect of adjusting items in net finance costs 1.5 2.7 7.5 Effect of adjusting items in respect of deferred taxation 3.0 - (476.2) Adjusted diluted earnings per share 137.2 134.4 282.1 The presentation of headline earnings per share, as an alternative measure of earnings per share, is mandated under the JSE Listing Requirements. It is calculated in accordance with Circular 4/2018 ‘Headline Earnings’ as issued by the South African Institute of Chartered Accountants. Diluted headline earnings per share are calculated by taking the following adjustments into account: 6 months to Year to 30.6.18 30.6.17 31.12.17 Revised Revised pence pence pence Diluted earnings per share 117.4 121.4 1,827.6 Effect of impairment of intangibles and property, plant and equipment and held-for-sale assets 1.1 3.2 6.9 Effect of gains on disposal of property, plant and equipment and held-for-sale assets (0.2) (0.4) (1.7) Effect of share of associates’ gain on disposal of asset held-for-sale, and effect of issue of shares and change in shareholding in associate (1.2) 1.8 (1.4) Gain on deemed disposal of an associate (RAI) - - (1,135.4) Other (0.4) - 1.3 Diluted headline earnings per share 116.7 126.0 697.3 Notes to the Interim Financial Statements Earnings Per Share cont… The following is a reconciliation of earnings to headline earnings, in accordance with the JSE Listing Requirements: 6 months to Year to 30.6.18 30.6.17 31.12.17 Revised Revised £m £m £m Earnings 2,690 2,261 37,485 Effect of impairment of intangibles and property, plant and equipment and held-for-sale assets 29 59 144 Effect of gains on disposal of property, plant and equipment and held-for-sale assets (5) (8) (35) Effect of share of associates’ gain on disposal of asset held-for-sale, and effect of issue of shares and change in shareholding in associate (27) 34 (29) Gain on deemed disposal of an associate (RAI) - - (23,288) Other (10) - 27 Headline earnings 2,677 2,346 14,304 The earnings per share are based on: 30.6.18 30.6.17 31.12.17 Earnings Shares Earnings Shares Earnings Shares Revised Revised £m m £m m £m m Earnings per share - basic 2,690 2,285 2,261 1,858 37,485 2,044 - diluted 2,690 2,291 2,261 1,863 37,485 2,051 Adjusted earnings per share - basic 3,143 2,285 2,505 1,858 5,786 2,044 - diluted 3,143 2,291 2,505 1,863 5,786 2,051 Headline earnings per share - basic 2,677 2,285 2,346 1,858 14,304 2,044 - diluted 2,677 2,291 2,346 1,863 14,304 2,051 |
Implementation of IFRS 15 and I
Implementation of IFRS 15 and IFRS 9 | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Initial Application Of Standards Or Interpretations [Abstract] | |
Implementation of IFRS 15 and IFRS 9 | IMPLEMENTATION OF IFRS 15 and IFRS 9 31 December 2017 Impact of IFRS 9 01 Jan 2018 Reported Adoption of IFRS 15 Revised Financial assets reclass Expected loss impairment Revised for IFRS 9 £m £m £m £m £m £m Assets Non-current assets Deferred tax assets 317 16 333 - 7 340 Trade and other receivables 756 - 756 (2 ) - 754 Investments held at fair value 42 - 42 2 - 44 Other 125,957 - 125,957 - - 125,957 Total non-current assets 127,072 16 127,088 - 7 127,095 Current assets Trade and other receivables 4,053 - 4,053 (144 ) (45 ) 3,864 Investments held at fair value 65 - 65 144 - 209 Other 9,848 - 9,848 - - 9,848 Total current assets 13,966 - 13,966 - (45 ) 13,921 Total assets 141,038 16 141,054 - (38 ) 141,016 Equity Capital and reserves Share capital 614 - 614 - - 614 Share premium, capital redemption and merger reserves 26,602 - 26,602 - - 26,602 Other reserves (3,395 ) 3 (3,392 ) (9 ) - (3,401 ) Retained earnings 36,983 (48 ) 36,935 9 (38 ) 36,906 Owners of the parent 60,804 (45 ) 60,759 - (38 ) 60,721 Non-controlling interests 222 - 222 - - 222 Total equity 61,026 (45 ) 60,981 - (38 ) 60,943 Liabilities Non-current liabilities Other 64,468 - 64,468 - - 64,468 Total non-current liabilities 64,468 - 64,468 - - 64,468 Current liabilities Trade and other payables 8,847 61 8,908 - - 8,908 Other 6,697 - 6,697 - - 6,697 Total current liabilities 15,544 61 15,605 - - 15,605 Total equity and liabilities 141,038 16 141,054 - (38 ) 141,016 |
Contingent liabilities and fina
Contingent liabilities and financial commitments | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Contingent Liabilities [Abstract] | |
Contingent liabilities and financial commitments | Notes to the Interim Financial Statements CONTINGENT LIABILITIES AND FINANCIAL COMMITMENTS The Group has contingent liabilities in respect of litigation, taxes and guarantees in various countries, as described in Note 28 to the 2017 Annual Report and Accounts and Form 20-F, pages 172 to 188. The Group is subject to contingencies pursuant to requirements that it complies with relevant laws, regulations and standards. Failure to comply could result in restrictions in operations, damages, fines, increased tax, increased cost of compliance, interest charges, reputational damage or other sanctions. These matters are inherently difficult to quantify. In cases where the Group has an obligation as a result of a past event existing at the balance sheet date, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated, a provision will be recognised based on best estimates and management judgement. There are, however, contingent liabilities in respect of litigation, taxes in some countries and guarantees for which no provisions have been made. While the amounts that may be payable or receivable could be material to the results or cash flows of the Group in the period in which they are recognised, the Board does not expect these amounts to have a material effect on the Group’s financial condition. Taxes The Group has exposures in respect of the payment or recovery of a number of taxes. The Group is and has been subject to a number of tax audits covering, among others, excise tax, value-added taxes, sales taxes, corporate taxes, withholding taxes and payroll taxes. The estimated costs of known tax obligations have been provided in these accounts in accordance with the Group’s accounting policies. In some countries, tax law requires that full or part payment of disputed tax assessments be made pending resolution of the dispute. To the extent that such payments exceed the estimated obligation, they would not be recognised as an expense. There are disputes that may proceed to litigation in a number of countries including Brazil, South Africa and the Netherlands. In the Netherlands, the Dutch tax authority has issued further assessments related to a number of intra-group transactions and reorganisations. The assessments issued to date primarily covers the years between 2008 to 2014 in the sum of €978 million (£865 million) including tax, interest and penalties. The Group has appealed against the assessments in full. In Bangladesh, on 25 July 2018, the Appellate Division of the Supreme Court in Bangladesh reversed the decision of the High Court against BAT Bangladesh in respect of the retrospective demands for VAT and Supplementary Duty amounting to approximately £170 million. The Attorney General has 30 days from receipt of the certified Court Order in which to seek a review of this decision. The Group is also appealing the ruling in respect of sales taxes and penalties in South Korea. Group litigation Group companies, as well as other leading cigarette manufacturers, are defendants in a number of product liability cases. In a number of the cases, the amounts of compensatory and punitive damages sought are significant. While it is impossible to be certain of the outcome of any particular case or of the amount of any possible adverse verdict, the Group believes that the defences of the Group’s companies to all these various claims are meritorious on both the law and the facts, and a vigorous defence is being made everywhere. If an adverse judgment is entered against any of the Group’s companies in any case, an appeal will be made. Such appeals could require the appellants to post appeal bonds or substitute security in amounts that could in some cases equal or exceed the amount of the judgment. At least in the aggregate, and despite the quality of defences available to the Group, it is not impossible that the Group’s results of operations or cash flows in a particular period could be materially affected by this and by the final outcome of any particular litigation. Notes to the Interim Financial Statements Contingent liabilities and financial commitments cont… In Canada, following the implementation of legislation enabling provincial governments to recover healthcare costs directly from tobacco manufacturers, ten actions for recovery of healthcare costs arising from the treatment of smoking and health-related diseases have been brought and are proceeding in ten provinces. Damages sought have not yet been quantified by all ten provinces; however, in respect of five provinces, the damages quantified in each of the provinces range between CAD$10 billion and CAD$118 billion. Legislation in two of the three territories has received the Royal Assent but is not yet in force. On 15 June 2018, the province of Ontario delivered an expert report quantifying its damages in the range of CAD$280 billion and CAD$630 billion in 2016/2017 dollars for the period 1954 – 2060. The province is seeking to amend its Statement of Claim to claim damages of CAD$330 billion from CAD$50 billion. In respect of the two class actions against the Group’s subsidiary Imperial Tobacco Canada (“ITCAN”) in Quebec, in 2015 the Quebec Court of Appeal upheld the Order for Security, of which ITCAN’s share is CAD$758 million, which has been paid in full to the Court escrow account as required by the judgment. ITCAN continues to retain strong legal grounds to appeal the original judgment. No charge against profit has been made with regards to the deposit, as ITCAN continues to assess that the deposits are fully recoverable upon a successful appeal of the original judgment. As at 30 June 2018 the Group’s subsidiary, R. J. Reynolds Tobacco Company (“RJRT”), had been served in 2,427 pending Engle progeny cases filed on behalf of approximately 3,072 individual plaintiffs. Many of these are in active discovery or nearing trial. Since 1 January 2016 through to 30 June 2018, RJRT or Lorillard Tobacco Company has paid judgments in 20 Engle progeny cases and have cumulatively paid US$116.6 million in compensatory or punitive damages and US$56.9 million for attorneys’ fees and statutory interest, for a total of US$173.5 million in these cases. In addition, since 1 January 2016 through to 30 June 2018, outstanding jury verdicts in favour of the Engle progeny plaintiffs had been entered against RJRT or Lorillard Tobacco Company for US$137.2 million in compensatory damages (as adjusted) and US$176.3 million in punitive damages. A significant majority of these verdicts are in various stages in the appellate process and have been bonded as required by Florida law under the US$200 million bond cap passed by the Florida legislature in 2009. Although the Group cannot currently predict when or how much it may be required to bond and pay, RJRT will likely be required to bond and pay additional judgments as the litigation proceeds. Criminal investigations As previously reported by the Group, it has been investigating, through external legal advisors, allegations of misconduct and has been liaising with the UK’s Serious Fraud Office (SFO) and other relevant authorities. It was announced in August 2017 that the SFO had opened an investigation in relation to the Company, its subsidiaries and associated persons. The Group is cooperating with the SFO’s investigation. The outcomes of these matters will be decided by the relevant authorities or, if necessary, the courts. It is too early to predict the outcomes, but these could include the prosecution of individuals and/or of a Group company or companies. Accordingly, the potential for fines, penalties or other consequences cannot currently be assessed. As the investigation is ongoing, it is not yet possible to identify the timescale in which these matters might be resolved. Summary |
Condensed consolidating financi
Condensed consolidating financial information | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Condensed Consolidating Financial Information [Abstract] | |
Notes to the Interim Financial Statement | Notes to the Interim Financial Statements CONDENSED CONSOLIDATING FINANCIAL STATEMENTS The following consolidating financial information is required by the rules of the Securities and Exchange Commission and is provided in anticipation of the exchange offer required by the registration rights agreement entered into in connection with the bond offering related to the acquisition of RAI. Note: In respect of the United States region, all financial statements and financial information provided by or with respect to the US business or RAI (and/or the RAI Group) are prepared on the basis of US GAAP and constitute the primary financial statements or financial information of the US business or RAI (and/or the RAI Group). Solely, for the purpose of consolidation within the results of BAT p.l.c. and the BAT Group, this financial information is then converted to International Financial Reporting Standards as issued by the IASB and adopted by the European Union (IFRS). To the extent any such financial information provided in these financial statements relate to the US business or RAI (and/or the RAI Group), it is provided as an explanation of the US business’ or RAI’s (and/or the RAI Group’s) primary US GAAP based financial statements and information. Condensed Consolidated Income Statement Period ended 30 June 2018 BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Revenue — — — 11,636 — 11,636 Raw materials and consumables used — — — (2,355 ) — (2,355 ) Changes in inventories of finished goods and work in progress — — — 76 — 76 Employee benefit costs (5 ) — (3 ) (1,406 ) 5 (1,409 ) Depreciation, amortisation and impairment costs — — — (437 ) — (437 ) Other operating income — — 11 21 — 32 Other operating expenses (11 ) (1 ) (6 ) (3,098 ) 11 (3,105 ) (Loss)/Profit from operations (16 ) (1 ) 2 4,437 16 4,438 Net finance income/(costs) 36 223 (163 ) (243 ) (554 ) (701 ) Share of post-tax results of associates and joint ventures — — — 232 — 232 Profit before taxation 20 222 (161 ) 4,426 (538 ) 3,969 Taxation on ordinary activities — (76 ) 44 (1,161 ) — (1,193 ) Equity income from subsidiaries 2,776 — 1,625 — (4,401 ) — Profit for the period 2,796 146 1,508 3,265 (4,939 ) 2,776 Attributable to: Owners of the parent 2,796 146 1,508 3,179 (4,939 ) 2,690 Non-controlling interests — — — 86 — 86 2,796 146 1,508 3,265 (4,939 ) 2,776 Condensed Consolidated Income Statement Period ended 30 June 2017 (Revised) BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Revenue — — — 7,418 — 7,418 Raw materials and consumables used — — — (1,881 ) — (1,881 ) Changes in inventories of finished goods and work in progress — — — (59 ) — (59 ) Employee benefit costs (8 ) — (2 ) (1,142 ) 8 (1,144 ) Depreciation, amortisation and impairment costs — — — (346 ) — (346 ) Other operating income — — — 55 — 55 Other operating expenses (3 ) — — (1,469 ) 3 (1,469 ) (Loss)/Profit from operations (11 ) — (2 ) 2,576 11 2,574 Net finance (costs)/income (31 ) (22 ) (74 ) (96 ) (102 ) (325 ) Share of post-tax results of associates and joint ventures — — — 778 — 778 Profit before taxation (42 ) (22 ) (76 ) 3,258 (91 ) 3,027 Taxation on ordinary activities — 8 3 (691 ) — (680 ) Equity income from subsidiaries 2,347 — — — (2,347 ) — Profit for the period 2,305 (14 ) (73 ) 2,567 (2,438 ) 2,347 Attributable to: Owners of the parent 2,305 (14 ) (73 ) 2,481 (2,438 ) 2,261 Non-controlling interests — — — 86 — 86 2,305 (14 ) (73 ) 2,567 (2,438 ) 2,347 Notes to the Interim Financial Statements CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME Condensed Consolidated Statement of Comprehensive Income Period ended 30 June 2018 BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Profit for the period 2,796 146 1,508 3,265 (4,939 ) 2,776 Other comprehensive income/(expense) Items that may be reclassified subsequently to profit or loss: — 19 10 949 — 978 Differences on exchange — — — 1,288 — 1,288 Cash flow hedges — 19 10 (14 ) — 15 Investments held at fair value — — — 12 — 12 Net investment hedges — — — (328 ) — (328 ) Tax on items that may be reclassified — — — (9 ) — (9 ) Items that will not be reclassified subsequently to profit or loss: — — — 287 — 287 Retirement benefit schemes — — — 343 — 343 Tax on items that will not be reclassified — — — (56 ) — (56 ) Total other comprehensive income for the period, net of tax — 19 10 1,236 — 1,265 Share of subsidiaries OCI (other reserves) 287 — — — (287 ) — Share of subsidiaries OCI (retained earnings) 978 — — — (978 ) — Total comprehensive income/(expense) for the period, net of tax 4,061 165 1,518 4,501 (6,204 ) 4,041 Attributable to: Owners of the parent 4,061 165 1,518 4,412 (6,204 ) 3,952 Non-controlling interests — — — 89 — 89 4,061 165 1,518 4,501 (6,204 ) 4,041 Condensed Consolidated Statement of Comprehensive Income Period ended 30 June 2017 (Revised) BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Profit for the period 2,305 (14 ) (73 ) 2,567 (2,438 ) 2,347 Other comprehensive income/(expense) Items that may be reclassified subsequently to profit or loss: — — 108 (644 ) — (536 ) Differences on exchange — — — (609 ) — (609 ) Cash flow hedges — — (63 ) (103 ) — (166 ) Investments held at fair value — — — 5 — 5 Net investment hedges — — 171 10 — 181 Tax on items that may be reclassified — — — 53 — 53 Items that will not be reclassified subsequently to profit or loss: — — — 115 — 115 Retirement benefit schemes — — — 154 — 154 Tax on items that will not be reclassified — — — (39 ) — (39 ) Total other comprehensive income/(expense) for the period, net of tax — — 108 (529 ) — (421 ) Share of subsidiaries OCI (other reserves) 115 — — — (115 ) — Share of subsidiaries OCI (retained earnings) (536 ) — — — 536 — Total comprehensive income/(expense) for the period, net of tax 1,884 (14 ) 35 2,038 (2,017 ) 1,926 Attributable to: Owners of the parent 1,884 (14 ) 35 1,965 (2,017 ) 1,853 Non-controlling interests — — — 73 — 73 1,884 (14 ) 35 2,038 (2,017 ) 1,926 Notes to the Interim Financial Statements CONDENSED CONSOLIDATING BALANCE SHEET Condensed Consolidated Balance Sheet As at 30 June 2018 BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Assets Intangible assets — — — 120,006 — 120,006 Property, plant and equipment — — 1 4,848 — 4,849 Investments in subsidiaries 31,511 — 35,190 — (66,701 ) — Investments in associates and joint ventures — — — 1,775 — 1,775 Retirement benefit assets — — 27 1,173 — 1,200 Deferred tax assets — 43 — 380 — 423 Trade and other receivables — 15,152 21,896 (37,194 ) 868 722 Investments held at fair value — — — 50 — 50 Derivative financial instruments — 34 564 (16 ) (43 ) 539 Total non-current assets 31,511 15,229 57,678 91,022 (65,876 ) 129,564 Inventories — — — 6,339 — 6,339 Income tax receivable — — 527 (478 ) — 49 Trade and other receivables 5,129 808 21,849 (15,474 ) (8,273 ) 4,039 Investments held at fair value — — — 188 — 188 Derivative financial instruments — 5 345 (147 ) (10 ) 193 Cash and cash equivalents 5 — 182 1,943 (5 ) 2,125 5,134 813 22,903 (7,629 ) (8,288 ) 12,933 Assets classified as held-for-sale — — — 4 — 4 Total current assets 5,134 813 22,903 (7,625 ) (8,288 ) 12,937 Total assets 36,645 16,042 80,581 83,397 (74,164 ) 142,501 Equity - Capital and reserves Share capital 614 — 14,163 614 (14,777 ) 614 Share premium, capital redemption and merger reserves 22,853 258 3,401 34,927 (34,834 ) 26,605 Other reserves 376 (105 ) (820 ) (2,426 ) 549 (2,426 ) Retained earnings 8,008 94 9,520 37,608 (17,622 ) 37,608 Owners of the parent 31,851 247 26,264 70,723 (66,684 ) 62,401 Non-controlling interests — — — 218 — 218 Total equity 31,851 247 26,264 70,941 (66,684 ) 62,619 Liabilities Borrowings 1,571 15,095 27,051 (1,437 ) 945 43,225 Retirement benefit liabilities — — 42 1,447 — 1,489 Deferred tax liabilities — — 26 17,586 — 17,612 Provisions 1 — — 347 (1 ) 347 Trade and other payables 8 — 99 960 (8 ) 1,059 Derivative financial instruments — 9 140 (6 ) (43 ) 100 Total non-current liabilities 1,580 15,104 27,358 18,897 893 63,832 Borrowings 2,060 584 23,536 (12,596 ) (8,297 ) 5,287 Income tax payable — 79 — 660 — 739 Provisions — — — 330 — 330 Trade and other payables 1,154 24 3,144 5,243 (67 ) 9,498 Derivative financial instruments — 4 279 (78 ) (9 ) 196 Total current liabilities 3,214 691 26,959 (6,441 ) (8,373 ) 16,050 Total equity and liabilities 36,645 16,042 80,581 83,397 (74,164 ) 142,501 Notes to the Interim Financial Statements CONDENSED CONSOLIDATING BALANCE SHEET cont… Condensed Consolidated Balance Sheet As at 30 June 2017 (Revised) BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Assets Intangible assets — — — 12,177 — 12,177 Property, plant and equipment — — — 3,636 — 3,636 Investments in subsidiaries 6,172 — 4,365 — (10,537 ) — Investments in associates and joint ventures — — — 9,438 — 9,438 Retirement benefit assets — — 69 546 — 615 Deferred tax assets — 45 — 423 — 468 Trade and other receivables — — 8,989 (11,229 ) 2,998 758 Investments held at fair value — — — 44 — 44 Derivative financial instruments — — 489 87 — 576 Total non-current assets 6,172 45 13,912 15,122 (7,539 ) 27,712 Inventories — — — 5,177 — 5,177 Income tax receivable — — — 71 — 71 Trade and other receivables 4,860 13 30,339 (22,331 ) (9,048 ) 3,833 Investments held at fair value — — — 26 — 26 Derivative financial instruments — — 435 1 (124 ) 312 Cash and cash equivalents 5 — 130 1,889 (5 ) 2,019 4,865 13 30,904 (15,167 ) (9,177 ) 11,438 Assets classified as held-for-sale — — — 36 — 36 Total current assets 4,865 13 30,904 (15,131 ) (9,177 ) 11,474 Total assets 11,037 58 44,816 (9 ) (16,716 ) 39,186 Equity - Capital and reserves Share capital 507 — 322 507 (829 ) 507 Share premium, capital redemption and merger reserves 182 6 3,401 1,595 (1,251 ) 3,933 Other reserves 204 (78 ) (677 ) (111 ) 551 (111 ) Retained earnings 6,478 (15 ) 2,551 3,388 (9,014 ) 3,388 Owners of the parent 7,371 (87 ) 5,597 5,379 (10,543 ) 7,717 Non-controlling interests — — — 192 — 192 Total equity 7,371 (87 ) 5,597 5,571 (10,543 ) 7,909 Liabilities Borrowings 1,571 17 14,984 (2,439 ) 952 15,085 Retirement benefit liabilities — — — 827 — 827 Deferred tax liabilities — — 17 642 — 659 Provisions — — — 395 — 395 Trade and other payables 8 — 4 1,032 (8 ) 1,036 Derivative financial instruments — — 95 (16 ) — 79 Total non-current liabilities 1,579 17 15,100 441 944 18,081 Borrowings 2,058 — 23,675 (12,926 ) (6,985 ) 5,822 Income tax payable — — — 622 — 622 Provisions — — 1 329 — 330 Trade and other payables 29 4 15 5,908 (8 ) 5,948 Derivative financial instruments — 124 428 46 (124 ) 474 Total current liabilities 2,087 128 24,119 (6,021 ) (7,117 ) 13,196 Total equity and liabilities 11,037 58 44,816 (9 ) (16,716 ) 39,186 Notes to the Interim Financial Statements CONDENSED CONSOLIDATING BALANCE SHEET cont… Condensed Consolidated Balance Sheet As at 31 December 2017 (Revised) BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Assets Intangible assets — — — 117,785 — 117,785 Property, plant and equipment — — 2 4,880 — 4,882 Investments in subsidiaries 58,255 — 33,570 — (91,825 ) — Investments in associates and joint ventures — — — 1,577 — 1,577 Retirement benefit assets — — 52 1,071 — 1,123 Deferred tax assets — 49 16 268 — 333 Trade and other receivables — 14,787 13,193 (27,699 ) 475 756 Investments held at fair value — — — 42 — 42 Derivative financial instruments — 68 594 (4 ) (68 ) 590 Total non-current assets 58,255 14,904 47,427 97,920 (91,418 ) 127,088 Inventories — — — 5,864 — 5,864 Income tax receivable — — 339 121 — 460 Trade and other receivables 7,365 56 31,382 (25,490 ) (9,260 ) 4,053 Investments held at fair value — — — 65 — 65 Derivative financial instruments — — 339 (111 ) — 228 Cash and cash equivalents 5 122 752 2,417 (5 ) 3,291 7,370 178 32,812 (17,134 ) (9,265 ) 13,961 Assets classified as held-for-sale — — — 5 — 5 Total current assets 7,370 178 32,812 (17,129 ) (9,265 ) 13,966 Total assets 65,625 15,082 80,239 80,791 (100,683 ) 141,054 Equity - Capital and reserves Share capital 614 — 13,831 614 (14,445 ) 614 Share premium, capital redemption and merger reserves 22,850 258 3,401 32,005 (31,912 ) 26,602 Other reserves 770 (129 ) (809 ) (3,392 ) 168 (3,392 ) Retained earnings 36,635 (52 ) 8,941 36,935 (45,524 ) 36,935 Owners of the parent 60,869 77 25,364 66,162 (91,713 ) 60,759 Non-controlling interests — — — 222 — 222 Total equity 60,869 77 25,364 66,384 (91,713 ) 60,981 Liabilities Borrowings 1,571 14,783 28,085 (1,364 ) 952 44,027 Retirement benefit liabilities — — 42 1,779 — 1,821 Deferred tax liabilities — — 51 17,078 — 17,129 Provisions — — — 354 — 354 Trade and other payables 8 — 106 952 (8 ) 1,058 Derivative financial instruments — — 158 (11 ) (68 ) 79 Total non-current liabilities 1,579 14,783 28,442 18,788 876 64,468 Borrowings 2,058 160 24,300 (11,408 ) (9,687 ) 5,423 Income tax payable — 2 7 711 — 720 Provisions — — 1 398 — 399 Trade and other payables 1,119 54 1,839 6,049 (153 ) 8,908 Derivative financial instruments — 6 286 (131 ) (6 ) 155 Total current liabilities 3,177 222 26,433 (4,381 ) (9,846 ) 15,605 Total equity and liabilities 65,625 15,082 80,239 80,791 (100,683 ) 141,054 Notes to the Interim Financial Statements CONDENSED CONSOLIDATING CASH FLOW STATEMENT Condensed Consolidated Cash Flow Statement Period ended 30 June 2018 BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Net cash (used in)/generated from operating activities (47 ) (221 ) 299 3,781 46 3,858 Net cash (used in)/generated from investing activities 103 572 1,430 (2,253 ) (137 ) (285 ) Net cash (used in)/generated from financing activities (56 ) (471 ) (2,276 ) (1,909 ) 219 (4,493 ) Net cash flows (used in)/generated from operating, investing and financing activities — (120 ) (547 ) (381 ) 128 (920 ) Differences on exchange — (2 ) 22 (168 ) — (148 ) (Decrease)/increase in net cash and cash equivalents in the period — (122 ) (525 ) (549 ) 128 (1,068 ) Net cash and cash equivalents at 1 January* 5 122 559 2,141 (5 ) 2,822 Net cash and cash equivalents at 30 June 5 — 34 1,592 123 1,754 Condensed Consolidated Cash Flow Statement Period ended 30 June 2017 (Revised) BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Net cash (used in)/generated from operating activities (22 ) 6 75 1,625 22 1,706 Net cash (used in)/generated from investing activities — — 170 (437 ) (30 ) (297 ) Net cash (used in)/generated from financing activities 22 (6 ) (380 ) (1,229 ) 82 (1,511 ) Net cash flows (used in)/generated from operating, investing and financing activities — — (135 ) (41 ) 74 (102 ) Differences on exchange — — 15 (154 ) — (139 ) (Decrease)/increase in net cash and cash equivalents in the period — — (120 ) (195 ) 74 (241 ) Net cash and cash equivalents at 1 January* 5 — (56 ) 1,707 (5 ) 1,651 Net cash and cash equivalents at 30 June 5 — (176 ) 1,512 69 1,410 * The opening balance of net cash and cash equivalents represents external cash held by the parent guarantor, issuer, subsidiary guarantors and non-guarantor subsidiaries. |
Analysis Of Revenue By Segment
Analysis Of Revenue By Segment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Reportable Segments [Abstract] | |
Summary of Analysis of Revenue By Segment | 2018 2017 Reported Adj Items 1 Adjusted Exchange Adjusted at CC 2 Revised* Adj Items 1 Adjusted Revenue £m £m £m £m £m £m £m £m US 4,525 - 4,525 418 4,943 - - - APME 2,384 - 2,384 236 2,620 2,489 - 2,489 AMSSA 1,951 - 1,951 255 2,206 2,149 - 2,149 ENA 2,776 (103 ) 2,673 111 2,784 2,780 (69 ) 2,711 Total Region 11,636 (103 ) 11,533 1,020 12,553 7,418 (69 ) 7,349 |
Analysis of Profit From Operations And Diluted Earnings Per Share By Segment | 2018 2017 Reported Adj Items 1 Adjusted Exchange Adjusted at CC 2 Revised* Adj Items 1 Adjusted Profit from Operations £m £m £m £m £m £m £m £m US 1,875 214 2,089 206 2,295 - - - APME 920 30 950 83 1,033 1,016 45 1,061 AMSSA 796 33 829 91 920 806 54 860 ENA 847 103 950 18 968 752 168 920 Total Region 4,438 380 4,818 398 5,216 2,574 267 2,841 Net finance costs (701 ) 35 (666 ) (61 ) (727 ) (325 ) 49 (276 ) Associates and joint ventures 232 (37 ) 195 18 213 778 (22 ) 756 Profit before tax 3,969 378 4,347 355 4,702 3,027 294 3,321 Taxation (1,193 ) 75 (1,118 ) (90 ) (1,208 ) (680 ) (48 ) (728 ) Non-controlling interests (86 ) - (86 ) (8 ) (94 ) (86 ) (2 ) (88 ) Profit attributable to shareholders 2,690 453 3,143 257 3,400 2,261 244 2,505 Diluted number of shares (m) 2,291 2,291 2,291 1,863 1,863 Diluted earnings per share (pence) 117.4 137.2 148.4 121.4 134.4 Notes to the analysis of revenue and profit from operations above: 1. Adjusting items represent certain items which the Group considers distinctive based upon their size, nature or incidence. 2. CC : constant currency – measures are calculated based on a retranslation, at the prior year’s exchange rates, of the current year’s results of the Group and, where applicable, its segments * 2017 results have been revised for the impact of IFRS 15 ( Revenue from Contracts with Customers |
Adjusting Items Included In P23
Adjusting Items Included In Profit From Operation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue [Abstract] | |
Summary of Restructuring and Integration Costs | The costs of these initiatives, together with the costs of integrating acquired businesses into existing operations, including acquisition costs, are included in profit from operations under the following headings: 6 months to Year to 30.6.18 30.6.17 31.12.17 £m £m £m Employee benefit costs 36 50 193 Depreciation and impairment costs 27 6 85 Other operating expenses 42 77 330 Other operating income (6 ) - (8 ) Total 99 133 600 |
Summary of Adjusting Items Incurred In Respect Associates And Joint Ventures Reflecting Post-tax Results | The following is a summary of the adjusting items incurred in respect of the Group’s associates and joint ventures, shown reflecting the Group’s share of post-tax results: 6 months to Year to 30.6.18 30.6.17 31.12.17 £m £m £m Gain on deemed disposal of RAI as an associate - - 23,288 Costs incurred by RAI related to its acquisition by BAT - - (33 ) Other adjusting items incurred by RAI pre-acquisition - (12 ) (60 ) Tisak/Agrokor adjustment - - (27 ) Reversal of tax claim in ITC 10 - - Dilution of interest in ITC 27 34 29 Total 37 22 23,197 |
Cash Flow (Tables)
Cash Flow (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Cash Flow [Abstract] | |
Schedule of Cash Flows from Operating Activities | Net cash generated from operating activities in the IFRS cash flows on page 25 includes the following items: 6 months to Year to 30.6.18 30.6.17 31.12.17 Revised Revised £m £m £m Profit from operations 4,438 2,574 6,412 Depreciation, amortisation and impairment 437 346 902 (Increase)/decrease in inventories (582 ) 539 1,409 Increase in trade and other receivables (78 ) (151 ) (732 ) Increase in amounts receivable in respect of the Quebec Class Action - (130 ) (130 ) Increase/(decrease) in provision for MSA 719 - (934 ) Decrease in trade and other payables (189 ) (1,312 ) (685 ) Decrease in net retirement benefit liabilities (77 ) (36 ) (131 ) Decrease in provisions (66 ) (74 ) (78 ) Other non-cash items 68 32 86 Cash generated from operating activities 4,670 1,788 6,119 Dividends received from associates 1 465 903 Tax paid (813 ) (547 ) (1,675 ) Net cash generated from operating activities 3,858 1,706 5,347 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Borrowings [Abstract] | |
Schedule of Maturity Profile of Borrowings | The maturity profile of borrowings, which were higher due to the acquisition of RAI, is as follows: 6 months to Year to 30.6.18 30.6.17 31.12.17 £m £m £m Due within one year: 5,287 5,822 5,423 Due beyond one year: 43,225 15,085 44,027 Total borrowings 48,512 20,907 49,450 |
Fair Value Measurements and V26
Fair Value Measurements and Valuation Processes (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Abstract] | |
Summary of Assets and Liabilities Measured at Fair Value | Level 2 assets and liabilities are shown below. 30.6.2018 30.6.2017 31.12.2017 Level 2 £m Level 2 £m Level 2 £m Assets at fair value Derivatives relating to – interest rate swaps 141 209 166 – cross-currency swaps 436 528 450 – forward foreign currency contracts 155 151 202 Assets at fair value 732 888 818 Liabilities at fair value Derivatives relating to – interest rate swaps 82 212 91 – cross-currency swaps 16 132 - – forward foreign currency contracts 198 209 143 Liabilities at fair value 296 553 234 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Summary of Earnings Per Share | 6 months to Year to 30.6.18 30.6.17 31.12.17 Revised Revised pence pence pence Earnings per share - basic 117.7 121.8 1,833.9 - diluted 117.4 121.4 1,827.6 Adjusted earnings per share - basic 137.5 134.9 283.1 - diluted 137.2 134.4 282.1 Headline earnings per share - basic 117.2 126.4 699.8 - diluted 116.7 126.0 697.3 The earnings per share are based on: 30.6.18 30.6.17 31.12.17 Earnings Shares Earnings Shares Earnings Shares Revised Revised £m m £m m £m m Earnings per share - basic 2,690 2,285 2,261 1,858 37,485 2,044 - diluted 2,690 2,291 2,261 1,863 37,485 2,051 Adjusted earnings per share - basic 3,143 2,285 2,505 1,858 5,786 2,044 - diluted 3,143 2,291 2,505 1,863 5,786 2,051 Headline earnings per share - basic 2,677 2,285 2,346 1,858 14,304 2,044 - diluted 2,677 2,291 2,346 1,863 14,304 2,051 |
Summary of Adjusted Earnings Per Share | Earnings Per Share cont… Adjusted diluted earnings per share are calculated by taking the following adjustments into account (see pages 29 to 31): 6 months to Year to 30.6.18 30.6.17 31.12.17 Revised Revised pence pence pence Diluted earnings per share 117.4 121.4 1,827.6 Effect of restructuring and integration costs 3.9 5.1 22.8 Effect of amortisation of trademarks and similar intangibles 6.6 6.4 14.3 Effect of other adjusting items 6.5 - 17.1 Effect of associates’ adjusting items (1.7) (1.2) (1,131.0) Effect of adjusting items in net finance costs 1.5 2.7 7.5 Effect of adjusting items in respect of deferred taxation 3.0 - (476.2) Adjusted diluted earnings per share 137.2 134.4 282.1 Diluted headline earnings per share are calculated by taking the following adjustments into account: 6 months to Year to 30.6.18 30.6.17 31.12.17 Revised Revised pence pence pence Diluted earnings per share 117.4 121.4 1,827.6 Effect of impairment of intangibles and property, plant and equipment and held-for-sale assets 1.1 3.2 6.9 Effect of gains on disposal of property, plant and equipment and held-for-sale assets (0.2) (0.4) (1.7) Effect of share of associates’ gain on disposal of asset held-for-sale, and effect of issue of shares and change in shareholding in associate (1.2) 1.8 (1.4) Gain on deemed disposal of an associate (RAI) - - (1,135.4) Other (0.4) - 1.3 Diluted headline earnings per share 116.7 126.0 697.3 |
Summary of Reconciliation of Earnings to Headline Earnings | The following is a reconciliation of earnings to headline earnings, in accordance with the JSE Listing Requirements: 6 months to Year to 30.6.18 30.6.17 31.12.17 Revised Revised £m £m £m Earnings 2,690 2,261 37,485 Effect of impairment of intangibles and property, plant and equipment and held-for-sale assets 29 59 144 Effect of gains on disposal of property, plant and equipment and held-for-sale assets (5) (8) (35) Effect of share of associates’ gain on disposal of asset held-for-sale, and effect of issue of shares and change in shareholding in associate (27) 34 (29) Gain on deemed disposal of an associate (RAI) - - (23,288) Other (10) - 27 Headline earnings 2,677 2,346 14,304 |
Implementation of IFRS 15 and28
Implementation of IFRS 15 and IFRS 9 (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Initial Application Of Standards Or Interpretations [Abstract] | |
Summary of Implementation of IFRS 15 and 9 | 31 December 2017 Impact of IFRS 9 01 Jan 2018 Reported Adoption of IFRS 15 Revised Financial assets reclass Expected loss impairment Revised for IFRS 9 £m £m £m £m £m £m Assets Non-current assets Deferred tax assets 317 16 333 - 7 340 Trade and other receivables 756 - 756 (2 ) - 754 Investments held at fair value 42 - 42 2 - 44 Other 125,957 - 125,957 - - 125,957 Total non-current assets 127,072 16 127,088 - 7 127,095 Current assets Trade and other receivables 4,053 - 4,053 (144 ) (45 ) 3,864 Investments held at fair value 65 - 65 144 - 209 Other 9,848 - 9,848 - - 9,848 Total current assets 13,966 - 13,966 - (45 ) 13,921 Total assets 141,038 16 141,054 - (38 ) 141,016 Equity Capital and reserves Share capital 614 - 614 - - 614 Share premium, capital redemption and merger reserves 26,602 - 26,602 - - 26,602 Other reserves (3,395 ) 3 (3,392 ) (9 ) - (3,401 ) Retained earnings 36,983 (48 ) 36,935 9 (38 ) 36,906 Owners of the parent 60,804 (45 ) 60,759 - (38 ) 60,721 Non-controlling interests 222 - 222 - - 222 Total equity 61,026 (45 ) 60,981 - (38 ) 60,943 Liabilities Non-current liabilities Other 64,468 - 64,468 - - 64,468 Total non-current liabilities 64,468 - 64,468 - - 64,468 Current liabilities Trade and other payables 8,847 61 8,908 - - 8,908 Other 6,697 - 6,697 - - 6,697 Total current liabilities 15,544 61 15,605 - - 15,605 Total equity and liabilities 141,038 16 141,054 - (38 ) 141,016 |
Condensed consolidating finan29
Condensed consolidating financial information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure Of Condensed Consolidating Financial Information [Abstract] | |
Condensed Consolidated Income Statement | The following consolidating financial information is required by the rules of the Securities and Exchange Commission and is provided in anticipation of the exchange offer required by the registration rights agreement entered into in connection with the bond offering related to the acquisition of RAI. Note: In respect of the United States region, all financial statements and financial information provided by or with respect to the US business or RAI (and/or the RAI Group) are prepared on the basis of US GAAP and constitute the primary financial statements or financial information of the US business or RAI (and/or the RAI Group). Solely, for the purpose of consolidation within the results of BAT p.l.c. and the BAT Group, this financial information is then converted to International Financial Reporting Standards as issued by the IASB and adopted by the European Union (IFRS). To the extent any such financial information provided in these financial statements relate to the US business or RAI (and/or the RAI Group), it is provided as an explanation of the US business’ or RAI’s (and/or the RAI Group’s) primary US GAAP based financial statements and information. Condensed Consolidated Income Statement Period ended 30 June 2018 BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Revenue — — — 11,636 — 11,636 Raw materials and consumables used — — — (2,355 ) — (2,355 ) Changes in inventories of finished goods and work in progress — — — 76 — 76 Employee benefit costs (5 ) — (3 ) (1,406 ) 5 (1,409 ) Depreciation, amortisation and impairment costs — — — (437 ) — (437 ) Other operating income — — 11 21 — 32 Other operating expenses (11 ) (1 ) (6 ) (3,098 ) 11 (3,105 ) (Loss)/Profit from operations (16 ) (1 ) 2 4,437 16 4,438 Net finance income/(costs) 36 223 (163 ) (243 ) (554 ) (701 ) Share of post-tax results of associates and joint ventures — — — 232 — 232 Profit before taxation 20 222 (161 ) 4,426 (538 ) 3,969 Taxation on ordinary activities — (76 ) 44 (1,161 ) — (1,193 ) Equity income from subsidiaries 2,776 — 1,625 — (4,401 ) — Profit for the period 2,796 146 1,508 3,265 (4,939 ) 2,776 Attributable to: Owners of the parent 2,796 146 1,508 3,179 (4,939 ) 2,690 Non-controlling interests — — — 86 — 86 2,796 146 1,508 3,265 (4,939 ) 2,776 Condensed Consolidated Income Statement Period ended 30 June 2017 (Revised) BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Revenue — — — 7,418 — 7,418 Raw materials and consumables used — — — (1,881 ) — (1,881 ) Changes in inventories of finished goods and work in progress — — — (59 ) — (59 ) Employee benefit costs (8 ) — (2 ) (1,142 ) 8 (1,144 ) Depreciation, amortisation and impairment costs — — — (346 ) — (346 ) Other operating income — — — 55 — 55 Other operating expenses (3 ) — — (1,469 ) 3 (1,469 ) (Loss)/Profit from operations (11 ) — (2 ) 2,576 11 2,574 Net finance (costs)/income (31 ) (22 ) (74 ) (96 ) (102 ) (325 ) Share of post-tax results of associates and joint ventures — — — 778 — 778 Profit before taxation (42 ) (22 ) (76 ) 3,258 (91 ) 3,027 Taxation on ordinary activities — 8 3 (691 ) — (680 ) Equity income from subsidiaries 2,347 — — — (2,347 ) — Profit for the period 2,305 (14 ) (73 ) 2,567 (2,438 ) 2,347 Attributable to: Owners of the parent 2,305 (14 ) (73 ) 2,481 (2,438 ) 2,261 Non-controlling interests — — — 86 — 86 2,305 (14 ) (73 ) 2,567 (2,438 ) 2,347 |
Condensed Consolidated Statement of Comprehensive Income | Notes to the Interim Financial Statements CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME Condensed Consolidated Statement of Comprehensive Income Period ended 30 June 2018 BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Profit for the period 2,796 146 1,508 3,265 (4,939 ) 2,776 Other comprehensive income/(expense) Items that may be reclassified subsequently to profit or loss: — 19 10 949 — 978 Differences on exchange — — — 1,288 — 1,288 Cash flow hedges — 19 10 (14 ) — 15 Investments held at fair value — — — 12 — 12 Net investment hedges — — — (328 ) — (328 ) Tax on items that may be reclassified — — — (9 ) — (9 ) Items that will not be reclassified subsequently to profit or loss: — — — 287 — 287 Retirement benefit schemes — — — 343 — 343 Tax on items that will not be reclassified — — — (56 ) — (56 ) Total other comprehensive income for the period, net of tax — 19 10 1,236 — 1,265 Share of subsidiaries OCI (other reserves) 287 — — — (287 ) — Share of subsidiaries OCI (retained earnings) 978 — — — (978 ) — Total comprehensive income/(expense) for the period, net of tax 4,061 165 1,518 4,501 (6,204 ) 4,041 Attributable to: Owners of the parent 4,061 165 1,518 4,412 (6,204 ) 3,952 Non-controlling interests — — — 89 — 89 4,061 165 1,518 4,501 (6,204 ) 4,041 Condensed Consolidated Statement of Comprehensive Income Period ended 30 June 2017 (Revised) BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Profit for the period 2,305 (14 ) (73 ) 2,567 (2,438 ) 2,347 Other comprehensive income/(expense) Items that may be reclassified subsequently to profit or loss: — — 108 (644 ) — (536 ) Differences on exchange — — — (609 ) — (609 ) Cash flow hedges — — (63 ) (103 ) — (166 ) Investments held at fair value — — — 5 — 5 Net investment hedges — — 171 10 — 181 Tax on items that may be reclassified — — — 53 — 53 Items that will not be reclassified subsequently to profit or loss: — — — 115 — 115 Retirement benefit schemes — — — 154 — 154 Tax on items that will not be reclassified — — — (39 ) — (39 ) Total other comprehensive income/(expense) for the period, net of tax — — 108 (529 ) — (421 ) Share of subsidiaries OCI (other reserves) 115 — — — (115 ) — Share of subsidiaries OCI (retained earnings) (536 ) — — — 536 — Total comprehensive income/(expense) for the period, net of tax 1,884 (14 ) 35 2,038 (2,017 ) 1,926 Attributable to: Owners of the parent 1,884 (14 ) 35 1,965 (2,017 ) 1,853 Non-controlling interests — — — 73 — 73 1,884 (14 ) 35 2,038 (2,017 ) 1,926 |
Condensed Consolidated Balance Sheet | Notes to the Interim Financial Statements CONDENSED CONSOLIDATING BALANCE SHEET Condensed Consolidated Balance Sheet As at 30 June 2018 BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Assets Intangible assets — — — 120,006 — 120,006 Property, plant and equipment — — 1 4,848 — 4,849 Investments in subsidiaries 31,511 — 35,190 — (66,701 ) — Investments in associates and joint ventures — — — 1,775 — 1,775 Retirement benefit assets — — 27 1,173 — 1,200 Deferred tax assets — 43 — 380 — 423 Trade and other receivables — 15,152 21,896 (37,194 ) 868 722 Investments held at fair value — — — 50 — 50 Derivative financial instruments — 34 564 (16 ) (43 ) 539 Total non-current assets 31,511 15,229 57,678 91,022 (65,876 ) 129,564 Inventories — — — 6,339 — 6,339 Income tax receivable — — 527 (478 ) — 49 Trade and other receivables 5,129 808 21,849 (15,474 ) (8,273 ) 4,039 Investments held at fair value — — — 188 — 188 Derivative financial instruments — 5 345 (147 ) (10 ) 193 Cash and cash equivalents 5 — 182 1,943 (5 ) 2,125 5,134 813 22,903 (7,629 ) (8,288 ) 12,933 Assets classified as held-for-sale — — — 4 — 4 Total current assets 5,134 813 22,903 (7,625 ) (8,288 ) 12,937 Total assets 36,645 16,042 80,581 83,397 (74,164 ) 142,501 Equity - Capital and reserves Share capital 614 — 14,163 614 (14,777 ) 614 Share premium, capital redemption and merger reserves 22,853 258 3,401 34,927 (34,834 ) 26,605 Other reserves 376 (105 ) (820 ) (2,426 ) 549 (2,426 ) Retained earnings 8,008 94 9,520 37,608 (17,622 ) 37,608 Owners of the parent 31,851 247 26,264 70,723 (66,684 ) 62,401 Non-controlling interests — — — 218 — 218 Total equity 31,851 247 26,264 70,941 (66,684 ) 62,619 Liabilities Borrowings 1,571 15,095 27,051 (1,437 ) 945 43,225 Retirement benefit liabilities — — 42 1,447 — 1,489 Deferred tax liabilities — — 26 17,586 — 17,612 Provisions 1 — — 347 (1 ) 347 Trade and other payables 8 — 99 960 (8 ) 1,059 Derivative financial instruments — 9 140 (6 ) (43 ) 100 Total non-current liabilities 1,580 15,104 27,358 18,897 893 63,832 Borrowings 2,060 584 23,536 (12,596 ) (8,297 ) 5,287 Income tax payable — 79 — 660 — 739 Provisions — — — 330 — 330 Trade and other payables 1,154 24 3,144 5,243 (67 ) 9,498 Derivative financial instruments — 4 279 (78 ) (9 ) 196 Total current liabilities 3,214 691 26,959 (6,441 ) (8,373 ) 16,050 Total equity and liabilities 36,645 16,042 80,581 83,397 (74,164 ) 142,501 Notes to the Interim Financial Statements CONDENSED CONSOLIDATING BALANCE SHEET cont… Condensed Consolidated Balance Sheet As at 30 June 2017 (Revised) BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Assets Intangible assets — — — 12,177 — 12,177 Property, plant and equipment — — — 3,636 — 3,636 Investments in subsidiaries 6,172 — 4,365 — (10,537 ) — Investments in associates and joint ventures — — — 9,438 — 9,438 Retirement benefit assets — — 69 546 — 615 Deferred tax assets — 45 — 423 — 468 Trade and other receivables — — 8,989 (11,229 ) 2,998 758 Investments held at fair value — — — 44 — 44 Derivative financial instruments — — 489 87 — 576 Total non-current assets 6,172 45 13,912 15,122 (7,539 ) 27,712 Inventories — — — 5,177 — 5,177 Income tax receivable — — — 71 — 71 Trade and other receivables 4,860 13 30,339 (22,331 ) (9,048 ) 3,833 Investments held at fair value — — — 26 — 26 Derivative financial instruments — — 435 1 (124 ) 312 Cash and cash equivalents 5 — 130 1,889 (5 ) 2,019 4,865 13 30,904 (15,167 ) (9,177 ) 11,438 Assets classified as held-for-sale — — — 36 — 36 Total current assets 4,865 13 30,904 (15,131 ) (9,177 ) 11,474 Total assets 11,037 58 44,816 (9 ) (16,716 ) 39,186 Equity - Capital and reserves Share capital 507 — 322 507 (829 ) 507 Share premium, capital redemption and merger reserves 182 6 3,401 1,595 (1,251 ) 3,933 Other reserves 204 (78 ) (677 ) (111 ) 551 (111 ) Retained earnings 6,478 (15 ) 2,551 3,388 (9,014 ) 3,388 Owners of the parent 7,371 (87 ) 5,597 5,379 (10,543 ) 7,717 Non-controlling interests — — — 192 — 192 Total equity 7,371 (87 ) 5,597 5,571 (10,543 ) 7,909 Liabilities Borrowings 1,571 17 14,984 (2,439 ) 952 15,085 Retirement benefit liabilities — — — 827 — 827 Deferred tax liabilities — — 17 642 — 659 Provisions — — — 395 — 395 Trade and other payables 8 — 4 1,032 (8 ) 1,036 Derivative financial instruments — — 95 (16 ) — 79 Total non-current liabilities 1,579 17 15,100 441 944 18,081 Borrowings 2,058 — 23,675 (12,926 ) (6,985 ) 5,822 Income tax payable — — — 622 — 622 Provisions — — 1 329 — 330 Trade and other payables 29 4 15 5,908 (8 ) 5,948 Derivative financial instruments — 124 428 46 (124 ) 474 Total current liabilities 2,087 128 24,119 (6,021 ) (7,117 ) 13,196 Total equity and liabilities 11,037 58 44,816 (9 ) (16,716 ) 39,186 Notes to the Interim Financial Statements CONDENSED CONSOLIDATING BALANCE SHEET cont… Condensed Consolidated Balance Sheet As at 31 December 2017 (Revised) BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Assets Intangible assets — — — 117,785 — 117,785 Property, plant and equipment — — 2 4,880 — 4,882 Investments in subsidiaries 58,255 — 33,570 — (91,825 ) — Investments in associates and joint ventures — — — 1,577 — 1,577 Retirement benefit assets — — 52 1,071 — 1,123 Deferred tax assets — 49 16 268 — 333 Trade and other receivables — 14,787 13,193 (27,699 ) 475 756 Investments held at fair value — — — 42 — 42 Derivative financial instruments — 68 594 (4 ) (68 ) 590 Total non-current assets 58,255 14,904 47,427 97,920 (91,418 ) 127,088 Inventories — — — 5,864 — 5,864 Income tax receivable — — 339 121 — 460 Trade and other receivables 7,365 56 31,382 (25,490 ) (9,260 ) 4,053 Investments held at fair value — — — 65 — 65 Derivative financial instruments — — 339 (111 ) — 228 Cash and cash equivalents 5 122 752 2,417 (5 ) 3,291 7,370 178 32,812 (17,134 ) (9,265 ) 13,961 Assets classified as held-for-sale — — — 5 — 5 Total current assets 7,370 178 32,812 (17,129 ) (9,265 ) 13,966 Total assets 65,625 15,082 80,239 80,791 (100,683 ) 141,054 Equity - Capital and reserves Share capital 614 — 13,831 614 (14,445 ) 614 Share premium, capital redemption and merger reserves 22,850 258 3,401 32,005 (31,912 ) 26,602 Other reserves 770 (129 ) (809 ) (3,392 ) 168 (3,392 ) Retained earnings 36,635 (52 ) 8,941 36,935 (45,524 ) 36,935 Owners of the parent 60,869 77 25,364 66,162 (91,713 ) 60,759 Non-controlling interests — — — 222 — 222 Total equity 60,869 77 25,364 66,384 (91,713 ) 60,981 Liabilities Borrowings 1,571 14,783 28,085 (1,364 ) 952 44,027 Retirement benefit liabilities — — 42 1,779 — 1,821 Deferred tax liabilities — — 51 17,078 — 17,129 Provisions — — — 354 — 354 Trade and other payables 8 — 106 952 (8 ) 1,058 Derivative financial instruments — — 158 (11 ) (68 ) 79 Total non-current liabilities 1,579 14,783 28,442 18,788 876 64,468 Borrowings 2,058 160 24,300 (11,408 ) (9,687 ) 5,423 Income tax payable — 2 7 711 — 720 Provisions — — 1 398 — 399 Trade and other payables 1,119 54 1,839 6,049 (153 ) 8,908 Derivative financial instruments — 6 286 (131 ) (6 ) 155 Total current liabilities 3,177 222 26,433 (4,381 ) (9,846 ) 15,605 Total equity and liabilities 65,625 15,082 80,239 80,791 (100,683 ) 141,054 |
Condensed Consolidated Cash Flow Statement | Notes to the Interim Financial Statements CONDENSED CONSOLIDATING CASH FLOW STATEMENT Condensed Consolidated Cash Flow Statement Period ended 30 June 2018 BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Net cash (used in)/generated from operating activities (47 ) (221 ) 299 3,781 46 3,858 Net cash (used in)/generated from investing activities 103 572 1,430 (2,253 ) (137 ) (285 ) Net cash (used in)/generated from financing activities (56 ) (471 ) (2,276 ) (1,909 ) 219 (4,493 ) Net cash flows (used in)/generated from operating, investing and financing activities — (120 ) (547 ) (381 ) 128 (920 ) Differences on exchange — (2 ) 22 (168 ) — (148 ) (Decrease)/increase in net cash and cash equivalents in the period — (122 ) (525 ) (549 ) 128 (1,068 ) Net cash and cash equivalents at 1 January* 5 122 559 2,141 (5 ) 2,822 Net cash and cash equivalents at 30 June 5 — 34 1,592 123 1,754 Condensed Consolidated Cash Flow Statement Period ended 30 June 2017 (Revised) BAT p.l.c. BATCAP BATIF, BATNF, BATHTN and RAI All other companies BAT Group Parent guarantor Issuer Subsidiary guarantors Non-guarantor subsidiaries Eliminations Consolidated £m £m £m £m £m £m Net cash (used in)/generated from operating activities (22 ) 6 75 1,625 22 1,706 Net cash (used in)/generated from investing activities — — 170 (437 ) (30 ) (297 ) Net cash (used in)/generated from financing activities 22 (6 ) (380 ) (1,229 ) 82 (1,511 ) Net cash flows (used in)/generated from operating, investing and financing activities — — (135 ) (41 ) 74 (102 ) Differences on exchange — — 15 (154 ) — (139 ) (Decrease)/increase in net cash and cash equivalents in the period — — (120 ) (195 ) 74 (241 ) Net cash and cash equivalents at 1 January* 5 — (56 ) 1,707 (5 ) 1,651 Net cash and cash equivalents at 30 June 5 — (176 ) 1,512 69 1,410 * The opening balance of net cash and cash equivalents represents external cash held by the parent guarantor, issuer, subsidiary guarantors and non-guarantor subsidiaries. |
Accounting Policies and Basis30
Accounting Policies and Basis of Preparation - Additional Information (Details) - GBP (£) £ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disclosure Of Accounting Policies [Line Items] | ||||
Decrease in revenue | £ 299 | £ 664 | ||
Impairment of financial assets (loan) on first application of IFRS9 | £ 38 | £ 38 | ||
Top of range | ||||
Disclosure Of Accounting Policies [Line Items] | ||||
Change in depreciation | £ 30 | £ 60 | ||
RAI | ||||
Disclosure Of Accounting Policies [Line Items] | ||||
Estimates of useful economic lives for plant and machinery | 20-year | 30 years | ||
Impairment charge | £ 13 | |||
Trade Debtors | ||||
Disclosure Of Accounting Policies [Line Items] | ||||
Increase Decrease In Accounting Estimate | £ 45 | |||
International Businesses | ||||
Disclosure Of Accounting Policies [Line Items] | ||||
Estimates of useful economic lives for plant and machinery | 20-year | 14 years | ||
IFRS 15 Revenue | ||||
Disclosure Of Accounting Policies [Line Items] | ||||
Decrease in revenue | £ 64 |
Analysis Of Revenue by Segmen31
Analysis Of Revenue by Segment - Summary of Analysis of Revenue By Segment (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Reportable Segments [Line Items] | ||||
Revenue | [1] | £ 11,636 | £ 7,418 | £ 19,564 |
Adjusted revenue by segment | 11,533 | 7,349 | ||
Reported Revenue under IFRS 15 | ||||
Reportable Segments [Line Items] | ||||
Revenue | 11,636 | 7,418 | ||
Adjusting Items | ||||
Reportable Segments [Line Items] | ||||
Revenue | (103) | (69) | ||
Exchange | ||||
Reportable Segments [Line Items] | ||||
Revenue | 1,020 | |||
Adjusted At Constant Currency | ||||
Reportable Segments [Line Items] | ||||
Revenue | 12,553 | |||
US | ||||
Reportable Segments [Line Items] | ||||
Adjusted revenue by segment | 4,525 | |||
US | Reported Revenue under IFRS 15 | ||||
Reportable Segments [Line Items] | ||||
Revenue | 4,525 | |||
US | Exchange | ||||
Reportable Segments [Line Items] | ||||
Revenue | 418 | |||
US | Adjusted At Constant Currency | ||||
Reportable Segments [Line Items] | ||||
Revenue | 4,943 | |||
APME | ||||
Reportable Segments [Line Items] | ||||
Adjusted revenue by segment | 2,384 | 2,489 | ||
APME | Reported Revenue under IFRS 15 | ||||
Reportable Segments [Line Items] | ||||
Revenue | 2,384 | 2,489 | ||
APME | Exchange | ||||
Reportable Segments [Line Items] | ||||
Revenue | 236 | |||
APME | Adjusted At Constant Currency | ||||
Reportable Segments [Line Items] | ||||
Revenue | 2,620 | |||
AMSSA | ||||
Reportable Segments [Line Items] | ||||
Adjusted revenue by segment | 1,951 | 2,149 | ||
AMSSA | Reported Revenue under IFRS 15 | ||||
Reportable Segments [Line Items] | ||||
Revenue | 1,951 | 2,149 | ||
AMSSA | Exchange | ||||
Reportable Segments [Line Items] | ||||
Revenue | 255 | |||
AMSSA | Adjusted At Constant Currency | ||||
Reportable Segments [Line Items] | ||||
Revenue | 2,206 | |||
ENA | ||||
Reportable Segments [Line Items] | ||||
Adjusted revenue by segment | 2,673 | 2,711 | ||
ENA | Reported Revenue under IFRS 15 | ||||
Reportable Segments [Line Items] | ||||
Revenue | 2,776 | 2,780 | ||
ENA | Adjusting Items | ||||
Reportable Segments [Line Items] | ||||
Revenue | (103) | £ (69) | ||
ENA | Exchange | ||||
Reportable Segments [Line Items] | ||||
Revenue | 111 | |||
ENA | Adjusted At Constant Currency | ||||
Reportable Segments [Line Items] | ||||
Revenue | £ 2,784 | |||
[1] | Revenue is net of duty, excise and other taxes of £18,250 million and £17,377 million for the six months ended 30 June 2018 and 2017 respectively, and £37,780 million for the year ended 31 December 2017. |
Analysis Of Revenue By Segmen32
Analysis Of Revenue By Segment - Analysis of Profit From Operations And Diluted Earnings Per Share By Segment (Details) - GBP (£) £ / shares in Units, £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Reportable Segments [Line Items] | |||
Profit from Operations | £ 4,438 | £ 2,574 | £ 6,412 |
Net finance costs | (701) | (325) | (1,094) |
Share of post-tax results of associates and joint ventures | 232 | 778 | 24,209 |
Profit before taxation | 3,969 | 3,027 | 29,527 |
Taxation on ordinary activities | (1,193) | (680) | 8,129 |
Non-controlling interests | 86 | 86 | 171 |
Profit attributable to shareholders | £ 2,690 | £ 2,261 | £ 37,485 |
Diluted | £ 1.174 | £ 1.214 | £ 18.276 |
Retrospective Application of IFRS 15 | Reported | |||
Reportable Segments [Line Items] | |||
Profit from Operations | £ 2,574 | ||
Net finance costs | (325) | ||
Share of post-tax results of associates and joint ventures | 778 | ||
Profit before taxation | 3,027 | ||
Taxation on ordinary activities | (680) | ||
Non-controlling interests | (86) | ||
Profit attributable to shareholders | £ 2,261 | ||
Diluted number of shares | 1,863,000,000 | ||
Diluted | £ 1.214 | ||
Retrospective Application of IFRS 15 | Adjusting Items | |||
Reportable Segments [Line Items] | |||
Profit from Operations | £ 267 | ||
Net finance costs | 49 | ||
Share of post-tax results of associates and joint ventures | (22) | ||
Profit before taxation | 294 | ||
Taxation on ordinary activities | (48) | ||
Non-controlling interests | (2) | ||
Profit attributable to shareholders | 244 | ||
Retrospective Application of IFRS 15 | Adjusted | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 2,841 | ||
Net finance costs | (276) | ||
Share of post-tax results of associates and joint ventures | 756 | ||
Profit before taxation | 3,321 | ||
Taxation on ordinary activities | (728) | ||
Non-controlling interests | (88) | ||
Profit attributable to shareholders | £ 2,505 | ||
Diluted number of shares | 1,863,000,000 | ||
Diluted | £ 1.344 | ||
IFRS 15 | Reported | |||
Reportable Segments [Line Items] | |||
Profit from Operations | £ 4,438 | ||
Net finance costs | (701) | ||
Share of post-tax results of associates and joint ventures | 232 | ||
Profit before taxation | 3,969 | ||
Taxation on ordinary activities | (1,193) | ||
Non-controlling interests | (86) | ||
Profit attributable to shareholders | £ 2,690 | ||
Diluted number of shares | 2,291,000,000 | ||
Diluted | £ 1.174 | ||
IFRS 15 | Adjusting Items | |||
Reportable Segments [Line Items] | |||
Profit from Operations | £ 380 | ||
Net finance costs | 35 | ||
Share of post-tax results of associates and joint ventures | (37) | ||
Profit before taxation | 378 | ||
Taxation on ordinary activities | 75 | ||
Profit attributable to shareholders | 453 | ||
IFRS 15 | Adjusted | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 4,818 | ||
Net finance costs | (666) | ||
Share of post-tax results of associates and joint ventures | 195 | ||
Profit before taxation | 4,347 | ||
Taxation on ordinary activities | (1,118) | ||
Non-controlling interests | (86) | ||
Profit attributable to shareholders | £ 3,143 | ||
Diluted number of shares | 2,291,000,000 | ||
Diluted | £ 1.372 | ||
IFRS 15 | Exchange | |||
Reportable Segments [Line Items] | |||
Profit from Operations | £ 398 | ||
Net finance costs | (61) | ||
Share of post-tax results of associates and joint ventures | 18 | ||
Profit before taxation | 355 | ||
Taxation on ordinary activities | (90) | ||
Non-controlling interests | (8) | ||
Profit attributable to shareholders | 257 | ||
IFRS 15 | Adjusted At Constant Currency | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 5,216 | ||
Net finance costs | (727) | ||
Share of post-tax results of associates and joint ventures | 213 | ||
Profit before taxation | 4,702 | ||
Taxation on ordinary activities | (1,208) | ||
Non-controlling interests | (94) | ||
Profit attributable to shareholders | £ 3,400 | ||
Diluted number of shares | 2,291,000,000 | ||
Diluted | £ 1.484 | ||
US | IFRS 15 | Reported | |||
Reportable Segments [Line Items] | |||
Profit from Operations | £ 1,875 | ||
US | IFRS 15 | Adjusting Items | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 214 | ||
US | IFRS 15 | Adjusted | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 2,089 | ||
US | IFRS 15 | Exchange | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 206 | ||
US | IFRS 15 | Adjusted At Constant Currency | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 2,295 | ||
APME | Retrospective Application of IFRS 15 | Reported | |||
Reportable Segments [Line Items] | |||
Profit from Operations | £ 1,016 | ||
APME | Retrospective Application of IFRS 15 | Adjusting Items | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 45 | ||
APME | Retrospective Application of IFRS 15 | Adjusted | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 1,061 | ||
APME | IFRS 15 | Reported | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 920 | ||
APME | IFRS 15 | Adjusting Items | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 30 | ||
APME | IFRS 15 | Adjusted | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 950 | ||
APME | IFRS 15 | Exchange | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 83 | ||
APME | IFRS 15 | Adjusted At Constant Currency | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 1,033 | ||
AMSSA | Retrospective Application of IFRS 15 | Reported | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 806 | ||
AMSSA | Retrospective Application of IFRS 15 | Adjusting Items | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 54 | ||
AMSSA | Retrospective Application of IFRS 15 | Adjusted | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 860 | ||
AMSSA | IFRS 15 | Reported | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 796 | ||
AMSSA | IFRS 15 | Adjusting Items | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 33 | ||
AMSSA | IFRS 15 | Adjusted | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 829 | ||
AMSSA | IFRS 15 | Exchange | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 91 | ||
AMSSA | IFRS 15 | Adjusted At Constant Currency | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 920 | ||
ENA | Retrospective Application of IFRS 15 | Reported | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 752 | ||
ENA | Retrospective Application of IFRS 15 | Adjusting Items | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 168 | ||
ENA | Retrospective Application of IFRS 15 | Adjusted | |||
Reportable Segments [Line Items] | |||
Profit from Operations | £ 920 | ||
ENA | IFRS 15 | Reported | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 847 | ||
ENA | IFRS 15 | Adjusting Items | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 103 | ||
ENA | IFRS 15 | Adjusted | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 950 | ||
ENA | IFRS 15 | Exchange | |||
Reportable Segments [Line Items] | |||
Profit from Operations | 18 | ||
ENA | IFRS 15 | Adjusted At Constant Currency | |||
Reportable Segments [Line Items] | |||
Profit from Operations | £ 968 |
Adjusting Items Included In P33
Adjusting Items Included In Profit From Operations - Summary Costs of Integrating Acquired Businesses into Existing Operations (Details) - Restructuring and Integration Costs - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Employee Benefit Costs And Depreciation Amortisation And Impairment [Line Items] | |||
Employee benefit costs | £ 36 | £ 50 | £ 193 |
Depreciation and impairment costs | 27 | 6 | 85 |
Other operating expenses | 42 | 77 | 330 |
Other operating income | (6) | (8) | |
Business combination integration cost | £ 99 | £ 133 | £ 600 |
Profit from Operations - Restru
Profit from Operations - Restructuring and Integration Costs - Additional Information (Details) - Trademarks and Similar Intangibles - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disclosure Of Revenue [Line Items] | |||
Amortisation and impairment of intangibles | £ 189 | £ 134 | £ 383 |
Top of range | |||
Disclosure Of Revenue [Line Items] | |||
Intangibles assets expected useful lives | 20 years |
Adjusting Items Included In P35
Adjusting Items Included In Profit From Operations - Fox River - Additional Information (Details) € in Millions, $ in Millions | Feb. 10, 2017USD ($) | Jul. 31, 2016EUR (€) | Jun. 30, 2018GBP (£) | Jun. 30, 2017GBP (£) | Dec. 31, 2017GBP (£) | Dec. 31, 2011GBP (£) |
NCR And Appvion | ||||||
Disclosure Of Revenue [Line Items] | ||||||
Assets recognised | £ 0 | |||||
Payments received | £ 0 | |||||
Windward Dividend Claim | ||||||
Disclosure Of Revenue [Line Items] | ||||||
Dividend paid to Sequana | € | € 135 | |||||
Windward Dividend Claim | Windward | ||||||
Disclosure Of Revenue [Line Items] | ||||||
Litigation settlement amount | $ | $ 185 | |||||
Fox River | N C R Appvion And Windward Prospects | ||||||
Disclosure Of Revenue [Line Items] | ||||||
Claims in relation to environmental clean up costs | £ 274,000,000 | |||||
Fox river provision | 129,000,000 | 161,000,000 | £ 138,000,000 | |||
Fox River | N C R Appvion And Windward Prospects | Funding | ||||||
Disclosure Of Revenue [Line Items] | ||||||
Payments for environmental clean up and legal costs | £ 9,000,000 | £ 2,000,000 | £ 25,000,000 |
Profit from Operations - Other
Profit from Operations - Other Adjusting Items - Additional Information (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disclosure Of Revenue [Line Items] | |||
Other adjusting items | £ 92 | ||
Litigation expense included in other operating expense | 77 | ||
Changes in inventories of finished goods and work in progress | £ (76) | £ 59 | £ 513 |
Agrokor | |||
Disclosure Of Revenue [Line Items] | |||
Impairment of assets | 69 | ||
Reynolds American Inc. | |||
Disclosure Of Revenue [Line Items] | |||
Changes in inventories of finished goods and work in progress | £ 465 |
Adjusting Items Included In Net
Adjusting Items Included In Net Financing Costs - Additional Information (Details) - GBP (£) £ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure Of Revenue [Line Items] | ||
Interest incurred on adjusting tax payable | £ 35 | |
Charge on withholding tax | 22 | |
I T C Ltd | ||
Disclosure Of Revenue [Line Items] | ||
Gain on disposal of ownership | 27 | |
Adjusting gain net of tax | £ 10 | |
Top of range | I T C Ltd | ||
Disclosure Of Revenue [Line Items] | ||
Ownership interest in associates | 29.71% | |
Bottom Of Range [Member] | I T C Ltd | ||
Disclosure Of Revenue [Line Items] | ||
Ownership interest in associates | 29.66% | |
FII GLO | ||
Disclosure Of Revenue [Line Items] | ||
Interest incurred on adjusting tax payable | £ 12 | £ 12 |
Adjusting Items Included In P38
Adjusting Items Included In Profit from Operations - Summary of Adjusting Items Incurred In Respect Associates And Joint Ventures Reflecting Post-tax Results (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disclosure Of Revenue [Line Items] | |||
Total | £ 37 | £ 22 | £ 23,197 |
Reynolds American Inc. | |||
Disclosure Of Revenue [Line Items] | |||
Gain on deemed disposal of RAI as an associate | 23,288 | ||
Costs incurred by RAI related to its acquisition by BAT | (33) | ||
Other adjusting items incurred by RAI pre-acquisition | (12) | (60) | |
I T C Ltd | |||
Disclosure Of Revenue [Line Items] | |||
Reversal of tax claim in ITC | 10 | ||
Dilution of interest in ITC | £ 27 | £ 34 | 29 |
Tisak/Agrokor [Member] | |||
Disclosure Of Revenue [Line Items] | |||
Tisak/Agrokor adjustment | £ (27) |
Adjusting Items Included in Tax
Adjusting Items Included in Taxation - Additional Information (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Revenue [Abstract] | |||
Change to the deferred tax liabilities due to the effect of change in tax rate | £ 69 | ||
Charge on with holding taxes | 77 | ||
Interest on with | 22 | ||
Tax on adjusting items | £ 71 | £ 48 | £ 454 |
Cash Flow - Schedule of Cash Fl
Cash Flow - Schedule of Cash Flows from Operating Activities (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disclosure Of Cash Flow [Abstract] | |||
Profit from Operations | £ 4,438 | £ 2,574 | £ 6,412 |
Depreciation, amortisation and impairment | 437 | 346 | 902 |
(Increase)/decrease in inventories | (582) | 539 | 1,409 |
Increase in trade and other receivables | (78) | (151) | (732) |
Increase in amounts receivable in respect of the Quebec Class Action | (130) | (130) | |
Increase/(decrease) in provision for MSA | 719 | (934) | |
Decrease in trade and other payables | (189) | (1,312) | (685) |
Decrease in net retirement benefit liabilities | (77) | (36) | (131) |
Decrease in provisions | (66) | (74) | (78) |
Other non-cash items | 68 | 32 | 86 |
Cash generated from operating activities (page 32) | 4,670 | 1,788 | 6,119 |
Dividends received from associates | 1 | 465 | 903 |
Tax paid | (813) | (547) | (1,675) |
Net cash generated from operating activities | £ 3,858 | £ 1,706 | £ 5,347 |
Cash Flow - Additional Informat
Cash Flow - Additional Information (Details) - GBP (£) £ / shares in Units, £ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |||
May 31, 2018 | Mar. 31, 2018 | Feb. 28, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disclosure of Cash Flow [Line Items] | ||||||
Increase in cash from operating activities | £ 2,152 | |||||
Research and development expense | 112 | £ 77 | ||||
Net cash used in investing activities | 285 | 297 | ||||
Gross capital expenditure | £ 241 | 210 | ||||
Increase in investment percentage | 14.80% | |||||
Net cash generated in financing activities | £ (4,493) | £ (1,511) | £ 14,759 | |||
Payment of interim dividends | £ 0.488 | £ 0.436 | ||||
Bond | ||||||
Disclosure of Cash Flow [Line Items] | ||||||
Repayments of borrowings | £ 400 | 2,500 | ||||
Revolving Credit Facility | ||||||
Disclosure of Cash Flow [Line Items] | ||||||
Repayments of borrowings | 600 | |||||
Commercial Papers | ||||||
Disclosure of Cash Flow [Line Items] | ||||||
Repayments of borrowings | 1,200 | |||||
Proceeds from current borrowings | 2,600 | |||||
Repayments of current borrowings | £ 2,600 |
Liquidity - Additional Informat
Liquidity - Additional Information (Details) £ in Millions, € in Billions, $ in Billions | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jul. 31, 2018GBP (£) | Jun. 30, 2018GBP (£) | Jun. 30, 2017GBP (£) | Dec. 31, 2017GBP (£) | Jun. 30, 2018EUR (€) | Jun. 30, 2018USD ($) | Jun. 30, 2016GBP (£) | |
Disclosure Of Financial Instruments [Line Items] | |||||||
Borrowings | £ 5,287 | £ 5,822 | £ 5,423 | € 3 | $ 4 | £ 5,423 | |
364-day Revolving Credit Facility | |||||||
Disclosure Of Financial Instruments [Line Items] | |||||||
Borrowings capacity | £ 3,000 | ||||||
Period of borrowings maturity | 364 days | ||||||
Revolving Credit Facility Maturing in 2021 | |||||||
Disclosure Of Financial Instruments [Line Items] | |||||||
Borrowings capacity | £ 3,000 | ||||||
Liquidity Risk | |||||||
Disclosure Of Financial Instruments [Line Items] | |||||||
Target average centrally managed bond maturity | 5 years | ||||||
Average centrally managed debt maturity of bonds | 9 years 2 months 12 days | 8 years 6 months | 9 years 2 months 12 days | ||||
Hightest proportion of centrally managed debt maturing in a single rolling 12-month period | 14.00% | 19.70% | 13.20% | 14.00% | 14.00% | ||
Liquidity Risk | Top of range | |||||||
Disclosure Of Financial Instruments [Line Items] | |||||||
Target centrally managed debt maturing in a single rolling year | 20.00% | ||||||
Interest Rate Risk | |||||||
Disclosure Of Financial Instruments [Line Items] | |||||||
Description of hedging instruments | It is Group policy that short-term sources of funds (including drawing under both the US$4 billion and £3 billion euro commercial paper programmes) are backed by undrawn committed lines of credit and cash. In July 2018, the Group exercised a one-year extension option for the £3 billion 364-day revolving credit facility, extending the final maturity to 2019. The Group also has access to a £3 billion revolving credit facility with a maturity date in 2021. These facilities were undrawn at 30 June 2018. |
Borrowings - Schedule of Maturi
Borrowings - Schedule of Maturity Profile of Borrowings (Details) £ in Millions, € in Billions, $ in Billions | Jun. 30, 2018GBP (£) | Jun. 30, 2018EUR (€) | Jun. 30, 2018USD ($) | Dec. 31, 2017GBP (£) | Jun. 30, 2017GBP (£) | Jun. 30, 2016GBP (£) |
Disclosure Of Detailed Information About Borrowings [Abstract] | ||||||
Borrowings | £ 5,287 | € 3 | $ 4 | £ 5,423 | £ 5,822 | £ 5,423 |
Borrowings | 43,225 | 44,027 | 15,085 | £ 44,027 | ||
Total borrowings | £ 48,512 | £ 49,450 | £ 20,907 |
Fair Value Measurements and V44
Fair Value Measurements and Valuation Processes - Additional Information (Details) - GBP (£) £ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
At Fair Value | |||
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items] | |||
Fair value of borrowings | £ 47,527 | £ 50,449 | £ 21,718 |
Level 1 | |||
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items] | |||
Assets at fair value | 88 | 91 | 26 |
Level 3 | |||
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items] | |||
Assets at fair value | £ 150 | £ 16 | £ 44 |
Fair Value Measurements and V45
Fair Value Measurements and Valuation Processes - Summary of Assets and Liabilities Measured at Fair Value (Details) - Level 2 - GBP (£) £ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items] | |||
Assets at fair value | £ 732 | £ 818 | £ 888 |
Liabilities at fair value | 296 | 234 | 553 |
Interest Rate Swaps | |||
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items] | |||
Derivatives relating to asset at fair value | 141 | 166 | 209 |
Derivatives relating to liabilities at fair value | 82 | 91 | 212 |
Cross-Currency Swaps | |||
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items] | |||
Derivatives relating to asset at fair value | 436 | 450 | 528 |
Derivatives relating to liabilities at fair value | 16 | 132 | |
Forward Foreign Currency Contracts | |||
Disclosure Of Fair Value Measurement Of Assets And Liabilities [Line Items] | |||
Derivatives relating to asset at fair value | 155 | 202 | 151 |
Derivatives relating to liabilities at fair value | £ 198 | £ 143 | £ 209 |
Earnings Per Share - Additional
Earnings Per Share - Additional Informaton (Details) - £ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Decrease in basic earnings per share | 3.40% | ||
Basic | £ 1.177 | £ 1.218 | £ 18.339 |
Adjusted diluted earnings per share grew | 2.10% | ||
Adjusted earnings per share - diluted | £ 1.372 | £ 1.344 | £ 2.821 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Earnings Per Share (Details) - GBP (£) £ / shares in Units, £ in Millions, shares in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Earnings per share | |||
Basic | £ 1.177 | £ 1.218 | £ 18.339 |
Diluted | £ 1.174 | £ 1.214 | £ 18.276 |
Earnings per share, basic | £ 2,690 | £ 2,261 | £ 37,485 |
Earnings per share, diluted | £ 2,690 | £ 2,261 | £ 37,485 |
Earnings per share - basic,Shares | 2,285 | 1,858 | 2,044 |
Earnings per share - diluted,Shares | 2,291 | 1,863 | 2,051 |
Adjusted earnings per share | |||
Adjusted earnings per share - basic | £ 1.375 | £ 1.349 | £ 2.831 |
Adjusted earnings per share - diluted | £ 1.372 | £ 1.344 | £ 2.821 |
Adjusted basic earnings per share (ordinary shares of 25p each), Earnings | £ 3,143 | £ 2,505 | £ 5,786 |
Adjusted diluted earnings per share, Earnings | £ 3,143 | £ 2,505 | £ 5,786 |
Adjusted earnings per share - basic,Shares | 2,285 | 1,858 | 2,044 |
Adjusted earnings per share - diluted,Shares | 2,291 | 1,863 | 2,051 |
Headline earnings per share | |||
Headline earnings per share - basic | £ 1.172 | £ 1.264 | £ 6.998 |
Headline earnings per share - diluted | £ 1.167 | £ 1.260 | £ 6.973 |
Headline basic earnings per share (ordinary shares of 25p each), Earnings | £ 2,677 | £ 2,346 | £ 14,304 |
Headline diluted earnings per share, Earnings | £ 2,677 | £ 2,346 | £ 14,304 |
Headline earnings per share - basic,Shares | 2,285 | 1,858 | 2,044 |
Headline earnings per share - diluted,Shares | 2,291 | 1,863 | 2,051 |
Earnings Per Share - Summary 48
Earnings Per Share - Summary of Adjusted Earnings Per Share (Details) - £ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Adjusted Earnings Per Share [Abstract] | |||
Diluted | £ 1.174 | £ 1.214 | £ 18.276 |
Effect of restructuring and integration costs per share (diluted) | 0.039 | 0.051 | 0.228 |
Effect of amortisation and impairment of trademarks and similar intangibles per share (diluted) | 0.066 | 0.064 | 0.143 |
Effect of adjusting items in net finance costs per share (diluted) | 0.065 | 0.171 | |
Effect of associates’ adjusting items per share (diluted) | (0.017) | (0.012) | (11.310) |
Effect of adjusting items in net finance costs per share (diluted) | 0.015 | 0.027 | 0.075 |
Effect of adjusting items in respect of deferred taxation | 0.030 | (4.762) | |
Adjusted diluted earnings per share per share (diluted) | £ 1.372 | £ 1.344 | £ 2.821 |
Earnings Per Share - Summary 49
Earnings Per Share - Summary of Headline Earnings Per Share (Details) - £ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disclosure Of Headline Earnings Loss [Abstract] | |||
Diluted | £ 1.174 | £ 1.214 | £ 18.276 |
Effect of impairment of intangibles and property, plant and equipment and held-for-sale assets per share (diluted) | 0.011 | 0.032 | 0.069 |
Effect of gains on disposal of property, plant and equipment and held-for-sale assets per share (diluted) | (0.002) | (0.004) | (0.017) |
Effect of share of associates’ gain on disposal of asset held-for-sale, and effect of issue of shares and change in shareholding in associate (diluted) | (0.012) | 0.018 | (0.014) |
Gain on deemed disposal of an associate (RAI) per share (diluted) | (11.354) | ||
Other headline earnings per share (diluted) | (0.004) | 0.013 | |
Diluted headline earnings per share | £ 1.167 | £ 1.260 | £ 6.973 |
Earnings Per Share - Summary 50
Earnings Per Share - Summary of Reconciliation of Earnings to Headline Earnings (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disclosure Of Headline Earnings Loss [Abstract] | |||
Earnings per share, basic | £ 2,690 | £ 2,261 | £ 37,485 |
Effect of impairment of intangibles and property, plant and equipment and held-for-sale assets | 29 | 59 | 144 |
Effect of gains on disposal of property, plant and equipment and held-for-sale assets | (5) | (8) | (35) |
Effect of share of associates’ gain on disposal of asset held-for-sale, and effect of issue of shares and change in shareholding in associate | (27) | 34 | (29) |
Gain on deemed disposal of an associate (RAI) | (23,288) | ||
Other | (10) | 27 | |
Headline earnings, diluted | £ 2,677 | £ 2,346 | £ 14,304 |
Implementation of IFRS 15 and51
Implementation of IFRS 15 and IFRS 9 - Summary of Implementation of IFRS 15 and 9 (Details) - GBP (£) £ in Millions | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Non-current assets | ||||||
Deferred tax assets | £ 423 | £ 340 | £ 333 | £ 468 | £ 333 | |
Trade and other receivables | 722 | 754 | 756 | 758 | 756 | |
Investments held at fair value | 50 | 44 | 42 | 44 | ||
Other | 125,957 | 125,957 | ||||
Total non-current assets | 129,564 | 127,095 | 127,088 | 27,712 | 127,088 | |
Current assets | ||||||
Trade and other receivables | 4,039 | 3,864 | 4,053 | 3,833 | 4,053 | |
Investments held at fair value | 188 | 209 | 65 | 26 | 65 | |
Other | 9,848 | 9,848 | ||||
Total current assets | 12,937 | 13,921 | 13,966 | 11,474 | 13,966 | |
Total assets | 142,501 | 141,016 | 141,054 | 39,186 | 141,054 | |
Equity - Capital and reserves | ||||||
Share capital | 614 | 614 | 614 | 507 | 614 | |
Share premium, capital redemption and merger reserves | 26,605 | 26,602 | 26,602 | 3,933 | 26,602 | |
Other reserves | (2,426) | (3,401) | (3,392) | (111) | (3,392) | |
Retained earnings | 37,608 | 36,906 | 36,935 | 3,388 | 36,935 | |
Owners of the parent | 62,401 | 60,721 | 60,759 | 7,717 | 60,759 | |
Non-controlling interests | 218 | 222 | 222 | 192 | 222 | |
Total equity | 62,619 | 60,943 | 60,981 | 7,909 | £ 8,406 | 60,981 |
Non-current liabilities | ||||||
Other | 64,468 | 64,468 | ||||
Total non-current liabilities | 63,832 | 64,468 | 64,468 | 18,081 | 64,468 | |
Current liabilities | ||||||
Trade and other payables | 9,498 | 8,908 | 8,908 | 5,948 | 8,908 | |
Other | 6,697 | 6,697 | ||||
Total current liabilities | 16,050 | 15,605 | 15,605 | 13,196 | 15,605 | |
Total equity and liabilities | £ 142,501 | 141,016 | 141,054 | £ 39,186 | £ 141,054 | |
Reported [Member] | ||||||
Non-current assets | ||||||
Deferred tax assets | 317 | |||||
Trade and other receivables | 756 | |||||
Investments held at fair value | 42 | |||||
Other | 125,957 | |||||
Total non-current assets | 127,072 | |||||
Current assets | ||||||
Trade and other receivables | 4,053 | |||||
Investments held at fair value | 65 | |||||
Other | 9,848 | |||||
Total current assets | 13,966 | |||||
Total assets | 141,038 | |||||
Equity - Capital and reserves | ||||||
Share capital | 614 | |||||
Share premium, capital redemption and merger reserves | 26,602 | |||||
Other reserves | (3,395) | |||||
Retained earnings | 36,983 | |||||
Owners of the parent | 60,804 | |||||
Non-controlling interests | 222 | |||||
Total equity | 61,026 | |||||
Non-current liabilities | ||||||
Other | 64,468 | |||||
Total non-current liabilities | 64,468 | |||||
Current liabilities | ||||||
Trade and other payables | 8,847 | |||||
Other | 6,697 | |||||
Total current liabilities | 15,544 | |||||
Total equity and liabilities | 141,038 | |||||
IFRS 15 Revenue | ||||||
Non-current assets | ||||||
Deferred tax assets | 16 | |||||
Total non-current assets | 16 | |||||
Current assets | ||||||
Total assets | 16 | |||||
Equity - Capital and reserves | ||||||
Other reserves | 3 | |||||
Retained earnings | (48) | |||||
Owners of the parent | (45) | |||||
Total equity | (45) | |||||
Current liabilities | ||||||
Trade and other payables | 61 | |||||
Total current liabilities | 61 | |||||
Total equity and liabilities | £ 16 | |||||
Impact of IFRS 9, Financial Assets Reclass [Member] | ||||||
Non-current assets | ||||||
Trade and other receivables | (2) | |||||
Investments held at fair value | 2 | |||||
Current assets | ||||||
Trade and other receivables | (144) | |||||
Investments held at fair value | 144 | |||||
Equity - Capital and reserves | ||||||
Other reserves | (9) | |||||
Retained earnings | 9 | |||||
Impact of IFRS 9, Expected Loss Impairment [Member] | ||||||
Non-current assets | ||||||
Deferred tax assets | 7 | |||||
Total non-current assets | 7 | |||||
Current assets | ||||||
Trade and other receivables | (45) | |||||
Total current assets | (45) | |||||
Total assets | (38) | |||||
Equity - Capital and reserves | ||||||
Retained earnings | (38) | |||||
Owners of the parent | (38) | |||||
Total equity | (38) | |||||
Current liabilities | ||||||
Total equity and liabilities | £ (38) |
Contingent Liabilities and Fi52
Contingent Liabilities and Financial Commitments - Taxes - Additional Information (Details) € in Millions, £ in Millions | Jul. 25, 2018GBP (£) | Jun. 30, 2018GBP (£) | Jun. 30, 2018EUR (€) |
Netherlands | Tax Reassessment | |||
Disclosure Of Commitments And Contingencies [Line Items] | |||
Tax reassessed amount | £ 865 | € 978 | |
Bangladesh | Change In Tax By Court Order | |||
Disclosure Of Commitments And Contingencies [Line Items] | |||
Value added tax and supplenetary duty amount reversed | £ 170 |
Contingent Liabilities and Fi53
Contingent Liabilities and Financial Commitments - Group Litigation - Additional Information (Details) $ in Millions | Oct. 27, 2015CAD ($) | Jun. 30, 2018GBP (£)ClassActionCasePlaintiff | Jun. 30, 2018USD ($)ClassActionCasePlaintiff | Jun. 30, 2018CAD ($)ClassActionCasePlaintiff | Jun. 30, 2018USD ($) |
Engle Progeny Cases | |||||
Disclosure Of Commitments And Contingencies [Line Items] | |||||
Total number of cases | Case | 2,427 | 2,427 | 2,427 | ||
Number of plaintiffs | Plaintiff | 3,072 | 3,072 | 3,072 | ||
Number of paid judgments | Case | 20 | 20 | 20 | ||
Payment for compensatory and punitive damages | $ 116.6 | ||||
Amount paid for attorneys fees and statutory interest | 56.9 | ||||
Litigation settlement amount | $ 173.5 | ||||
RJRT or Lorillard Inc | |||||
Disclosure Of Commitments And Contingencies [Line Items] | |||||
Loss Contingency Amount of Overall Damages comprising Compensatory Damages | $ 137.2 | ||||
Amount of overall damages comprising punitive damages | $ 176.3 | ||||
Canada | |||||
Disclosure Of Commitments And Contingencies [Line Items] | |||||
Number of class actions in lawsuit | 10 | ||||
Canada | Bottom Of Range [Member] | |||||
Disclosure Of Commitments And Contingencies [Line Items] | |||||
Damages sought by the provincial government | $ 10,000,000,000 | ||||
Canada | Top of range | |||||
Disclosure Of Commitments And Contingencies [Line Items] | |||||
Damages sought by the provincial government | 118,000,000,000 | ||||
Ontario | Bottom Of Range [Member] | |||||
Disclosure Of Commitments And Contingencies [Line Items] | |||||
Damages sought by the provincial government | 280,000,000,000 | ||||
Damages claimed | 50,000,000,000 | ||||
Ontario | Top of range | |||||
Disclosure Of Commitments And Contingencies [Line Items] | |||||
Damages sought by the provincial government | 630,000,000,000 | ||||
Damages claimed | $ 330,000,000,000 | ||||
Canada | Quebec Class Actions | Imperial | |||||
Disclosure Of Commitments And Contingencies [Line Items] | |||||
Number of class actions in lawsuit | ClassAction | 2 | 2 | 2 | ||
Litigation security guarantee amount paid | $ 758,000,000 | ||||
Charge against profit regards to litigation security amount paid | £ | £ 0 | ||||
Florida | Engle Progeny Cases | |||||
Disclosure Of Commitments And Contingencies [Line Items] | |||||
Total bond cap | $ 200 |
Notes to the Interim Financial
Notes to the Interim Financial Statement - Condensed Consolidated Income Statement (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | ||||
Revenue | [1] | £ 11,636 | £ 7,418 | £ 19,564 |
Raw materials and consumables used | (2,355) | (1,881) | (4,520) | |
Changes in inventories of finished goods and work in progress | 76 | (59) | (513) | |
Employee benefit costs | (1,409) | (1,144) | (2,679) | |
Depreciation, amortisation and impairment costs | (437) | (346) | (902) | |
Other operating income | 32 | 55 | 144 | |
Other operating expenses | (3,105) | (1,469) | (4,682) | |
Profit from operations | 4,438 | 2,574 | 6,412 | |
Net finance income/(costs) | (701) | (325) | (1,094) | |
Share of post-tax results of associates and joint ventures | 232 | 778 | 24,209 | |
Profit before taxation | 3,969 | 3,027 | 29,527 | |
Taxation on ordinary activities | (1,193) | (680) | 8,129 | |
Profit for the period | 2,776 | 2,347 | 37,656 | |
Attributable to: | ||||
Owners of the parent | 2,690 | 2,261 | 37,485 | |
Non-controlling interests | 86 | 86 | 171 | |
Profit for the period | 2,776 | 2,347 | £ 37,656 | |
BAT p.l.c., Parent guarantor | ||||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | ||||
Employee benefit costs | (5) | (8) | ||
Other operating expenses | (11) | (3) | ||
Profit from operations | (16) | (11) | ||
Net finance income/(costs) | 36 | (31) | ||
Profit before taxation | 20 | (42) | ||
Equity income from subsidiaries | 2,776 | 2,347 | ||
Profit for the period | 2,796 | 2,305 | ||
Attributable to: | ||||
Owners of the parent | 2,796 | 2,305 | ||
Profit for the period | 2,796 | 2,305 | ||
BATCAP, Issuer | ||||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | ||||
Other operating expenses | (1) | |||
Profit from operations | (1) | |||
Net finance income/(costs) | 223 | (22) | ||
Profit before taxation | 222 | (22) | ||
Taxation on ordinary activities | (76) | 8 | ||
Profit for the period | 146 | (14) | ||
Attributable to: | ||||
Owners of the parent | 146 | (14) | ||
Profit for the period | 146 | (14) | ||
BATIF, BATNF,BATHTN, and RAI, Subsidiary guarantors | ||||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | ||||
Employee benefit costs | (3) | (2) | ||
Other operating income | 11 | |||
Other operating expenses | (6) | |||
Profit from operations | 2 | (2) | ||
Net finance income/(costs) | (163) | (74) | ||
Profit before taxation | (161) | (76) | ||
Taxation on ordinary activities | 44 | 3 | ||
Equity income from subsidiaries | 1,625 | |||
Profit for the period | 1,508 | (73) | ||
Attributable to: | ||||
Owners of the parent | 1,508 | (73) | ||
Profit for the period | 1,508 | (73) | ||
All other companies, Non-guarantor subsidiaries | ||||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | ||||
Revenue | 11,636 | 7,418 | ||
Raw materials and consumables used | (2,355) | (1,881) | ||
Changes in inventories of finished goods and work in progress | 76 | (59) | ||
Employee benefit costs | (1,406) | (1,142) | ||
Depreciation, amortisation and impairment costs | (437) | (346) | ||
Other operating income | 21 | 55 | ||
Other operating expenses | (3,098) | (1,469) | ||
Profit from operations | 4,437 | 2,576 | ||
Net finance income/(costs) | (243) | (96) | ||
Share of post-tax results of associates and joint ventures | 232 | 778 | ||
Profit before taxation | 4,426 | 3,258 | ||
Taxation on ordinary activities | (1,161) | (691) | ||
Profit for the period | 3,265 | 2,567 | ||
Attributable to: | ||||
Owners of the parent | 3,179 | 2,481 | ||
Non-controlling interests | 86 | 86 | ||
Profit for the period | 3,265 | 2,567 | ||
Eliminations | ||||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | ||||
Employee benefit costs | 5 | 8 | ||
Other operating expenses | 11 | 3 | ||
Profit from operations | 16 | 11 | ||
Net finance income/(costs) | (554) | (102) | ||
Profit before taxation | (538) | (91) | ||
Equity income from subsidiaries | (4,401) | (2,347) | ||
Profit for the period | (4,939) | (2,438) | ||
Attributable to: | ||||
Owners of the parent | (4,939) | (2,438) | ||
Profit for the period | £ (4,939) | £ (2,438) | ||
[1] | Revenue is net of duty, excise and other taxes of £18,250 million and £17,377 million for the six months ended 30 June 2018 and 2017 respectively, and £37,780 million for the year ended 31 December 2017. |
Notes to the Interim Financia55
Notes to the Interim Financial Statement - Condensed Consolidated Statement of Comprehensive Income (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Profit for the period (page 19) | £ 2,776 | £ 2,347 | £ 37,656 |
Other comprehensive income/(expense) | |||
Items that may be reclassified subsequently to profit or loss: | 978 | (536) | (3,809) |
Differences on exchange | 1,288 | (609) | |
Cash flow hedges | 15 | (166) | |
Net investment hedges | (328) | 181 | |
Tax on items that may be reclassified | (9) | 53 | 34 |
Items that will not be reclassified subsequently to profit or loss: | 287 | 115 | 681 |
Retirement benefit schemes | 343 | 154 | |
Tax on items that will not be reclassified | (56) | (39) | (171) |
Total other comprehensive income/(expense) for the period, net of tax | 1,265 | (421) | (3,128) |
Total comprehensive income for the period, net of tax | 4,041 | 1,926 | 34,528 |
Attributable to: | |||
Owners of the parent | 3,952 | 1,853 | 34,361 |
Non-controlling interests | 89 | 73 | 167 |
Total comprehensive income for the period, net of tax | 4,041 | 1,926 | £ 34,528 |
Investments Held at Fair Value | |||
Other comprehensive income/(expense) | |||
– net fair value gains in respect of associates, net of tax | 12 | 5 | |
BAT p.l.c., Parent guarantor | |||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Profit for the period (page 19) | 2,796 | 2,305 | |
Other comprehensive income/(expense) | |||
Share of subsidiaries OCI (other reserves) | 287 | 115 | |
Share of subsidiaries OCI (retained earnings) | 978 | (536) | |
Total comprehensive income for the period, net of tax | 4,061 | 1,884 | |
Attributable to: | |||
Owners of the parent | 4,061 | 1,884 | |
Total comprehensive income for the period, net of tax | 4,061 | 1,884 | |
BATCAP, Issuer | |||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Profit for the period (page 19) | 146 | (14) | |
Other comprehensive income/(expense) | |||
Items that may be reclassified subsequently to profit or loss: | 19 | ||
Cash flow hedges | 19 | ||
Total other comprehensive income/(expense) for the period, net of tax | 19 | ||
Total comprehensive income for the period, net of tax | 165 | (14) | |
Attributable to: | |||
Owners of the parent | 165 | (14) | |
Total comprehensive income for the period, net of tax | 165 | (14) | |
BATIF, BATNF,BATHTN, and RAI, Subsidiary guarantors | |||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Profit for the period (page 19) | 1,508 | (73) | |
Other comprehensive income/(expense) | |||
Items that may be reclassified subsequently to profit or loss: | 10 | 108 | |
Cash flow hedges | 10 | (63) | |
Net investment hedges | 171 | ||
Total other comprehensive income/(expense) for the period, net of tax | 10 | 108 | |
Total comprehensive income for the period, net of tax | 1,518 | 35 | |
Attributable to: | |||
Owners of the parent | 1,518 | 35 | |
Total comprehensive income for the period, net of tax | 1,518 | 35 | |
All other companies, Non-guarantor subsidiaries | |||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Profit for the period (page 19) | 3,265 | 2,567 | |
Other comprehensive income/(expense) | |||
Items that may be reclassified subsequently to profit or loss: | 949 | (644) | |
Differences on exchange | 1,288 | (609) | |
Cash flow hedges | (14) | (103) | |
Net investment hedges | (328) | 10 | |
Tax on items that may be reclassified | (9) | 53 | |
Items that will not be reclassified subsequently to profit or loss: | 287 | 115 | |
Retirement benefit schemes | 343 | 154 | |
Tax on items that will not be reclassified | (56) | (39) | |
Total other comprehensive income/(expense) for the period, net of tax | 1,236 | (529) | |
Total comprehensive income for the period, net of tax | 4,501 | 2,038 | |
Attributable to: | |||
Owners of the parent | 4,412 | 1,965 | |
Non-controlling interests | 89 | 73 | |
Total comprehensive income for the period, net of tax | 4,501 | 2,038 | |
All other companies, Non-guarantor subsidiaries | Investments Held at Fair Value | |||
Other comprehensive income/(expense) | |||
– net fair value gains in respect of associates, net of tax | 12 | 5 | |
Eliminations | |||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Profit for the period (page 19) | (4,939) | (2,438) | |
Other comprehensive income/(expense) | |||
Share of subsidiaries OCI (other reserves) | (287) | (115) | |
Share of subsidiaries OCI (retained earnings) | (978) | 536 | |
Total comprehensive income for the period, net of tax | (6,204) | (2,017) | |
Attributable to: | |||
Owners of the parent | (6,204) | (2,017) | |
Total comprehensive income for the period, net of tax | £ (6,204) | £ (2,017) |
Notes to the Interim Financia56
Notes to the Interim Financial Statement - Condensed Consolidated Balance Sheet - (Details) £ in Millions, € in Billions, $ in Billions | Jun. 30, 2018GBP (£) | Jun. 30, 2018EUR (€) | Jun. 30, 2018USD ($) | Jan. 01, 2018GBP (£) | Dec. 31, 2017GBP (£) | Jun. 30, 2017GBP (£) | Dec. 31, 2016GBP (£) | Jun. 30, 2016GBP (£) |
Assets | ||||||||
Intangible assets | £ 120,006 | £ 117,785 | £ 12,177 | £ 117,785 | ||||
Property, plant and equipment | 4,849 | 4,882 | 3,636 | 4,882 | ||||
Investments in associates and joint ventures | 1,775 | |||||||
Retirement benefit assets | 1,200 | 1,123 | 615 | 1,123 | ||||
Deferred tax assets | 423 | £ 340 | 333 | 468 | 333 | |||
Trade and other receivables | 722 | 754 | 756 | 758 | 756 | |||
Investments held at fair value | 50 | 44 | 42 | |||||
Derivative financial instruments | 539 | 590 | 576 | 590 | ||||
Total non-current assets | 129,564 | 127,095 | 127,088 | 27,712 | 127,088 | |||
Inventories | 6,339 | 5,864 | 5,177 | 5,864 | ||||
Income tax receivable | 49 | 460 | 71 | 460 | ||||
Trade and other receivables | 4,039 | 3,864 | 4,053 | 3,833 | 4,053 | |||
Investments held at fair value | 188 | 209 | 65 | 26 | 65 | |||
Derivative financial instruments | 193 | 228 | 312 | 228 | ||||
Cash and cash equivalents | 2,125 | 3,291 | 2,019 | 3,291 | ||||
Total current assets other than non-current assets classified as held for sale | 12,933 | 11,438 | 13,961 | |||||
Assets classified as held-for-sale | 4 | 36 | 5 | |||||
Total current assets | 12,937 | 13,921 | 13,966 | 11,474 | 13,966 | |||
Total assets | 142,501 | 141,016 | 141,054 | 39,186 | 141,054 | |||
Investments in associates and joint ventures | 9,438 | 1,577 | ||||||
Equity - Capital and reserves | ||||||||
Share capital | 614 | 614 | 614 | 507 | 614 | |||
Share premium, capital redemption and merger reserves | 26,605 | 26,602 | 26,602 | 3,933 | 26,602 | |||
Other reserves | (2,426) | (3,401) | (3,392) | (111) | (3,392) | |||
Retained earnings | 37,608 | 36,906 | 36,935 | 3,388 | 36,935 | |||
Owners of the parent | 62,401 | 60,721 | 60,759 | 7,717 | 60,759 | |||
Non-controlling interests | 218 | 222 | 222 | 192 | 222 | |||
Total equity | 62,619 | 60,943 | 60,981 | 7,909 | £ 8,406 | 60,981 | ||
Liabilities | ||||||||
Borrowings | 43,225 | 44,027 | 15,085 | 44,027 | ||||
Retirement benefit liabilities | 1,489 | 1,821 | 827 | 1,821 | ||||
Deferred tax liabilities | 17,612 | 17,129 | 659 | 17,129 | ||||
Provisions | 347 | 354 | 395 | 354 | ||||
Trade and other payables | 1,059 | 1,058 | 1,036 | 1,058 | ||||
Derivative financial instruments | 100 | 79 | 79 | 79 | ||||
Total non-current liabilities | 63,832 | 64,468 | 64,468 | 18,081 | 64,468 | |||
Borrowings | 5,287 | € 3 | $ 4 | 5,423 | 5,822 | 5,423 | ||
Income tax payable | 739 | 720 | 622 | 720 | ||||
Provisions | 330 | 399 | 330 | 399 | ||||
Trade and other payables | 9,498 | 8,908 | 8,908 | 5,948 | 8,908 | |||
Derivative financial instruments | 196 | 155 | 474 | 155 | ||||
Total current liabilities | 16,050 | 15,605 | 15,605 | 13,196 | 15,605 | |||
Total equity and liabilities | 142,501 | £ 141,016 | £ 141,054 | 39,186 | 141,054 | |||
BAT p.l.c., Parent guarantor | ||||||||
Assets | ||||||||
Investments in subsidiaries | 31,511 | 6,172 | 58,255 | |||||
Total non-current assets | 31,511 | 6,172 | 58,255 | |||||
Trade and other receivables | 5,129 | 4,860 | 7,365 | |||||
Cash and cash equivalents | 5 | 5 | 5 | |||||
Total current assets other than non-current assets classified as held for sale | 5,134 | 4,865 | 7,370 | |||||
Total current assets | 5,134 | 4,865 | 7,370 | |||||
Total assets | 36,645 | 11,037 | 65,625 | |||||
Equity - Capital and reserves | ||||||||
Share capital | 614 | 507 | 614 | |||||
Share premium, capital redemption and merger reserves | 22,853 | 182 | 22,850 | |||||
Other reserves | 376 | 204 | 770 | |||||
Retained earnings | 8,008 | 6,478 | 36,635 | |||||
Owners of the parent | 31,851 | 7,371 | 60,869 | |||||
Total equity | 31,851 | 7,371 | 60,869 | |||||
Liabilities | ||||||||
Borrowings | 1,571 | 1,571 | 1,571 | |||||
Provisions | 1 | |||||||
Trade and other payables | 8 | 8 | 8 | |||||
Total non-current liabilities | 1,580 | 1,579 | 1,579 | |||||
Borrowings | 2,060 | 2,058 | 2,058 | |||||
Trade and other payables | 1,154 | 29 | 1,119 | |||||
Total current liabilities | 3,214 | 2,087 | 3,177 | |||||
Total equity and liabilities | 36,645 | 11,037 | 65,625 | |||||
BATCAP, Issuer | ||||||||
Assets | ||||||||
Deferred tax assets | 43 | 45 | 49 | |||||
Trade and other receivables | 15,152 | 14,787 | ||||||
Derivative financial instruments | 34 | 68 | ||||||
Total non-current assets | 15,229 | 45 | 14,904 | |||||
Trade and other receivables | 808 | 13 | 56 | |||||
Derivative financial instruments | 5 | |||||||
Cash and cash equivalents | 122 | |||||||
Total current assets other than non-current assets classified as held for sale | 813 | 13 | 178 | |||||
Total current assets | 813 | 13 | 178 | |||||
Total assets | 16,042 | 58 | 15,082 | |||||
Equity - Capital and reserves | ||||||||
Share premium, capital redemption and merger reserves | 258 | 6 | 258 | |||||
Other reserves | (105) | (78) | (129) | |||||
Retained earnings | 94 | (15) | (52) | |||||
Owners of the parent | 247 | (87) | 77 | |||||
Total equity | 247 | (87) | 77 | |||||
Liabilities | ||||||||
Borrowings | 15,095 | 17 | 14,783 | |||||
Derivative financial instruments | 9 | |||||||
Total non-current liabilities | 15,104 | 17 | 14,783 | |||||
Borrowings | 584 | 160 | ||||||
Income tax payable | 79 | 2 | ||||||
Trade and other payables | 24 | 4 | 54 | |||||
Derivative financial instruments | 4 | 124 | 6 | |||||
Total current liabilities | 691 | 128 | 222 | |||||
Total equity and liabilities | 16,042 | 58 | 15,082 | |||||
BATIF, BATNF,BATHTN, and RAI, Subsidiary guarantors | ||||||||
Assets | ||||||||
Property, plant and equipment | 1 | 2 | ||||||
Investments in subsidiaries | 35,190 | 4,365 | 33,570 | |||||
Retirement benefit assets | 27 | 69 | 52 | |||||
Deferred tax assets | 16 | |||||||
Trade and other receivables | 21,896 | 8,989 | 13,193 | |||||
Derivative financial instruments | 564 | 489 | 594 | |||||
Total non-current assets | 57,678 | 13,912 | 47,427 | |||||
Income tax receivable | 527 | 339 | ||||||
Trade and other receivables | 21,849 | 30,339 | 31,382 | |||||
Derivative financial instruments | 345 | 435 | 339 | |||||
Cash and cash equivalents | 182 | 130 | 752 | |||||
Total current assets other than non-current assets classified as held for sale | 22,903 | 30,904 | 32,812 | |||||
Total current assets | 22,903 | 30,904 | 32,812 | |||||
Total assets | 80,581 | 44,816 | 80,239 | |||||
Equity - Capital and reserves | ||||||||
Share capital | 14,163 | 322 | 13,831 | |||||
Share premium, capital redemption and merger reserves | 3,401 | 3,401 | 3,401 | |||||
Other reserves | (820) | (677) | (809) | |||||
Retained earnings | 9,520 | 2,551 | 8,941 | |||||
Owners of the parent | 26,264 | 5,597 | 25,364 | |||||
Total equity | 26,264 | 5,597 | 25,364 | |||||
Liabilities | ||||||||
Borrowings | 27,051 | 14,984 | 28,085 | |||||
Retirement benefit liabilities | 42 | 42 | ||||||
Deferred tax liabilities | 26 | 17 | 51 | |||||
Trade and other payables | 99 | 4 | 106 | |||||
Derivative financial instruments | 140 | 95 | 158 | |||||
Total non-current liabilities | 27,358 | 15,100 | 28,442 | |||||
Borrowings | 23,536 | 23,675 | 24,300 | |||||
Income tax payable | 7 | |||||||
Provisions | 1 | 1 | ||||||
Trade and other payables | 3,144 | 15 | 1,839 | |||||
Derivative financial instruments | 279 | 428 | 286 | |||||
Total current liabilities | 26,959 | 24,119 | 26,433 | |||||
Total equity and liabilities | 80,581 | 44,816 | 80,239 | |||||
All other companies, Non-guarantor subsidiaries | ||||||||
Assets | ||||||||
Intangible assets | 120,006 | 12,177 | 117,785 | |||||
Property, plant and equipment | 4,848 | 3,636 | 4,880 | |||||
Investments in associates and joint ventures | 1,775 | |||||||
Retirement benefit assets | 1,173 | 546 | 1,071 | |||||
Deferred tax assets | 380 | 423 | 268 | |||||
Trade and other receivables | (37,194) | (11,229) | (27,699) | |||||
Investments held at fair value | 50 | 44 | 42 | |||||
Derivative financial instruments | (16) | 87 | (4) | |||||
Total non-current assets | 91,022 | 15,122 | 97,920 | |||||
Inventories | 6,339 | 5,177 | 5,864 | |||||
Income tax receivable | (478) | 71 | 121 | |||||
Trade and other receivables | (15,474) | (22,331) | (25,490) | |||||
Investments held at fair value | 188 | 26 | 65 | |||||
Derivative financial instruments | (147) | 1 | (111) | |||||
Cash and cash equivalents | 1,943 | 1,889 | 2,417 | |||||
Total current assets other than non-current assets classified as held for sale | (7,629) | (15,167) | (17,134) | |||||
Assets classified as held-for-sale | 4 | 36 | 5 | |||||
Total current assets | (7,625) | (15,131) | (17,129) | |||||
Total assets | 83,397 | (9) | 80,791 | |||||
Investments in associates and joint ventures | 9,438 | 1,577 | ||||||
Equity - Capital and reserves | ||||||||
Share capital | 614 | 507 | 614 | |||||
Share premium, capital redemption and merger reserves | 34,927 | 1,595 | 32,005 | |||||
Other reserves | (2,426) | (111) | (3,392) | |||||
Retained earnings | 37,608 | 3,388 | 36,935 | |||||
Owners of the parent | 70,723 | 5,379 | 66,162 | |||||
Non-controlling interests | 218 | 192 | 222 | |||||
Total equity | 70,941 | 5,571 | 66,384 | |||||
Liabilities | ||||||||
Borrowings | (1,437) | (2,439) | (1,364) | |||||
Retirement benefit liabilities | 1,447 | 827 | 1,779 | |||||
Deferred tax liabilities | 17,586 | 642 | 17,078 | |||||
Provisions | 347 | 395 | 354 | |||||
Trade and other payables | 960 | 1,032 | 952 | |||||
Derivative financial instruments | (6) | (16) | (11) | |||||
Total non-current liabilities | 18,897 | 441 | 18,788 | |||||
Borrowings | (12,596) | (12,926) | (11,408) | |||||
Income tax payable | 660 | 622 | 711 | |||||
Provisions | 330 | 329 | 398 | |||||
Trade and other payables | 5,243 | 5,908 | 6,049 | |||||
Derivative financial instruments | (78) | 46 | (131) | |||||
Total current liabilities | (6,441) | (6,021) | (4,381) | |||||
Total equity and liabilities | 83,397 | (9) | 80,791 | |||||
Eliminations | ||||||||
Assets | ||||||||
Investments in subsidiaries | (66,701) | (10,537) | (91,825) | |||||
Trade and other receivables | 868 | 2,998 | 475 | |||||
Derivative financial instruments | (43) | (68) | ||||||
Total non-current assets | (65,876) | (7,539) | (91,418) | |||||
Trade and other receivables | (8,273) | (9,048) | (9,260) | |||||
Derivative financial instruments | (10) | (124) | ||||||
Cash and cash equivalents | (5) | (5) | (5) | |||||
Total current assets other than non-current assets classified as held for sale | (8,288) | (9,177) | (9,265) | |||||
Total current assets | (8,288) | (9,177) | (9,265) | |||||
Total assets | (74,164) | (16,716) | (100,683) | |||||
Equity - Capital and reserves | ||||||||
Share capital | (14,777) | (829) | (14,445) | |||||
Share premium, capital redemption and merger reserves | (34,834) | (1,251) | (31,912) | |||||
Other reserves | 549 | 551 | 168 | |||||
Retained earnings | (17,622) | (9,014) | (45,524) | |||||
Owners of the parent | (66,684) | (10,543) | (91,713) | |||||
Total equity | (66,684) | (10,543) | (91,713) | |||||
Liabilities | ||||||||
Borrowings | 945 | 952 | 952 | |||||
Provisions | (1) | |||||||
Trade and other payables | (8) | (8) | (8) | |||||
Derivative financial instruments | (43) | (68) | ||||||
Total non-current liabilities | 893 | 944 | 876 | |||||
Borrowings | (8,297) | (6,985) | (9,687) | |||||
Trade and other payables | (67) | (8) | (153) | |||||
Derivative financial instruments | (9) | (124) | (6) | |||||
Total current liabilities | (8,373) | (7,117) | (9,846) | |||||
Total equity and liabilities | £ (74,164) | £ (16,716) | £ (100,683) |
Notes to the Interim Financia57
Notes to the Interim Financial Statement - Condensed Consolidated Cash flow Statement - (Details) - GBP (£) £ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Net cash (used in)/generated from operating activities | £ 3,858 | £ 1,706 | £ 5,347 |
Net cash (used in)/generated from investing activities | (285) | (297) | (18,544) |
Net cash (used in)/generated from financing activities | (4,493) | (1,511) | 14,759 |
Net cash flows (used in)/from operating, investing and financing activities | (920) | (102) | 1,562 |
Differences on exchange | (148) | (139) | (391) |
(Decrease)/increase in net cash and cash equivalents in the period | (1,068) | (241) | 1,171 |
Net cash and cash equivalents at 1 January* | 2,822 | 1,651 | 1,651 |
Net cash and cash equivalents at period end | 1,754 | 1,410 | 2,822 |
BAT p.l.c., Parent guarantor | |||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Net cash (used in)/generated from operating activities | (47) | (22) | |
Net cash (used in)/generated from investing activities | 103 | ||
Net cash (used in)/generated from financing activities | (56) | 22 | |
Net cash and cash equivalents at 1 January* | 5 | 5 | 5 |
Net cash and cash equivalents at period end | 5 | 5 | |
BATCAP, Issuer | |||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Net cash (used in)/generated from operating activities | (221) | 6 | |
Net cash (used in)/generated from investing activities | 572 | ||
Net cash (used in)/generated from financing activities | (471) | (6) | |
Net cash flows (used in)/from operating, investing and financing activities | (120) | ||
Differences on exchange | (2) | ||
(Decrease)/increase in net cash and cash equivalents in the period | (122) | ||
Net cash and cash equivalents at 1 January* | 122 | ||
BATIF, BATNF,BATHTN, and RAI, Subsidiary guarantors | |||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Net cash (used in)/generated from operating activities | 299 | 75 | |
Net cash (used in)/generated from investing activities | 1,430 | 170 | |
Net cash (used in)/generated from financing activities | (2,276) | (380) | |
Net cash flows (used in)/from operating, investing and financing activities | (547) | (135) | |
Differences on exchange | 22 | 15 | |
(Decrease)/increase in net cash and cash equivalents in the period | (525) | (120) | |
Net cash and cash equivalents at 1 January* | 559 | (56) | (56) |
Net cash and cash equivalents at period end | 34 | (176) | |
All other companies, Non-guarantor subsidiaries | |||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Net cash (used in)/generated from operating activities | 3,781 | 1,625 | |
Net cash (used in)/generated from investing activities | (2,253) | (437) | |
Net cash (used in)/generated from financing activities | (1,909) | (1,229) | |
Net cash flows (used in)/from operating, investing and financing activities | (381) | (41) | |
Differences on exchange | (168) | (154) | |
(Decrease)/increase in net cash and cash equivalents in the period | (549) | (195) | |
Net cash and cash equivalents at 1 January* | 2,141 | 1,707 | 1,707 |
Net cash and cash equivalents at period end | 1,592 | 1,512 | |
Eliminations | |||
Disclosure Of Condensed Consolidating Financial Information [Line Items] | |||
Net cash (used in)/generated from operating activities | 46 | 22 | |
Net cash (used in)/generated from investing activities | (137) | (30) | |
Net cash (used in)/generated from financing activities | 219 | 82 | |
Net cash flows (used in)/from operating, investing and financing activities | 128 | 74 | |
(Decrease)/increase in net cash and cash equivalents in the period | 128 | 74 | |
Net cash and cash equivalents at 1 January* | (5) | (5) | £ (5) |
Net cash and cash equivalents at period end | £ 123 | £ 69 |