Annual report and accounts 2008

Notes contentsNotes to consolidated financial statements

6. Net finance costs

All figures in £ millions	Notes	2008	2007
Interest payable		(106)	(114)
Net foreign exchange losses		(11)	(25)
Other losses on financial instruments in a hedging relationship:
— fair value hedges		(7)	(1)
— net investment hedges		—	(1)
Other losses on financial instruments not in a hedging relationship:
— derivatives		(12)	(9)
Finance costs		(136)	(150)
Interest receivable		17	19
Finance income in respect of employee benefits	25	8	10
Net foreign exchange gains		—	8
Other gains on financial instruments in a hedging relationship:
— fair value hedges		2	—
— net investment hedges		1	—
Other gains on financial instruments not in a hedging relationship:
— amortisation of transitional adjustment on bonds		1	1
— derivatives		16	6
Finance income		45	44
Net finance costs		(91)	(106)
Analysed as:
Net interest payable		(89)	(95)
Net foreign exchange losses reflected in adjusted earnings		(7)	—
Finance income in respect of employee benefits	25	8	10
Net finance costs reflected in adjusted earnings		(88)	(85)
Other net finance costs		(3)	(21)
Total net finance costs		(91)	(106)

The £5m (2007: £1m) net loss on fair value hedges comprises a £156m (2007: £20m) loss on the underlying bonds offset by a £151m (2007: £19m) gain on the related derivative financial instruments.