The Directors present their report together with the interim condensed financial statements for the half year ended 31 December 2002 and the auditors' review report thereon.

These results build on the progress made since the merger and illustrate the continued success of the Customer Sector Group business model and the Company's strategy. In a period of global economic weakness and despite self imposed cut-backs at some of our operations, financial results have remained solid and cash flow generation from our portfolio of high quality assets is strong. We have exceeded our merger benefits target six months ahead of schedule and have delivered further cost savings against our additional target of US$500 million.

Strong operational cash flow (after interest and tax) of US$1,189 million has enabled us to proceed with sanctioned growth projects. Progress on all projects continues to be on or ahead of schedule and budget. Notable milestones were reached during the half year with the mechanical completion and commissioning of Escondida Phase IV (Chile), the commencement of operations at the San Juan underground project (US) and the commencement of natural gas flow through the Bream gas pipeline in Bass Strait (Australia). Currently 13 major capital projects are under development, including the recently approved Atlantis full field development in the Gulf of Mexico.

Strong cash flows enabled the Board to increase dividends paid to shareholders by 7.7% compared with the half year ended 31 December 2001 (the "corresponding period"). A dividend of 7.0 US cents per share was paid on 4 December 2002.

The profit after tax attributable to BHP Billiton shareholders for the half year ended 31 December 2002 was US$891 million (31 December 2001 US$1,177 million). Basic earnings per share were 14.4 US cents (31 December 2001 19.5 US cents). This included the loss on sale of the remaining 6% interest in the Group's Steel business following demerger of that business in July 2002 which has been disclosed as a significant item in the half year ended 31 December 2002. The contribution of the Group's Steel business in the corresponding period has been disclosed as discontinued operations (Refer note 3 to the financial statements). There were no significant items reported in the half year ended 31 December 2001.

Revenue was US$7,277 million, compared with US$8,825 million for the corresponding period, mainly due to the demerger of the Group's Steel business in July 2002. For other information relating to revenue, refer below under Petroleum, Aluminium, Base Metals, Carbon Steel Materials, Stainless Steel Materials, Energy Coal, Diamonds and Specialty Products and Group and Unallocated Items.

Profit from ordinary activities before taxation was US$1,275 million compared with a profit of US$1,696 million for the corresponding period. There were a number of factors which affected the results for current half year including:

• Foreign currency fluctuations had an unfavourable effect of approximately US$450 million compared with the corresponding period. This was principally due to foreign exchange losses on conversion of Rand denominated monetary assets and liabilities at balance date, with the Rand appreciating by 16% during the current period compared with a depreciation of 47% in the corresponding period. The conversion of A$ denominated monetary assets and liabilities and the impact of the stronger A$/US$ exchange rates on operating costs also had an unfavourable impact on profit. This was partly offset by reduced losses on legacy A$/US$ currency hedging compared with the corresponding period and lower average Rand/$US and Colombian peso/US$ exchange rate impacts on operating costs.
• Inflationary pressures, principally in South Africa, increased costs by approximately US$140 million.
• Ceased, sold and discontinuing businesses had an unfavourable effect on profit before taxation of approximately US$135 million, mainly due to the demerger of the Group's Steel business, and the inclusion in the corresponding period of profits from PT Arutmin which was divested in November 2001 and the Rietspruit energy coal mine which was closed in May 2002.
• Increases in price linked costs depressed profits by approximately US$50 million, mainly due to higher royalties and taxes for petroleum products.
• The impact of asset sales is a reduction in profits of approximately US$60 million mainly from the divestment of PT Arutmin in the corresponding period and the loss on sale of 6% of the Group's Steel business in the current period.

These factors were partly offset by:

• Higher sales volumes of iron ore, energy coal, diamonds and aluminium partly offset by lower sales volumes of petroleum products, resulting in a positive net volume impact on profits of approximately US$130 million.
• Higher prices for petroleum products, nickel, copper, manganese, metallurgical coal and chrome increased turnover by approximately US$290 million. This increase was partly offset by lower prices for export energy coal, diamonds, iron ore and aluminium that decreased turnover by approximately US$230 million.
• Exploration expense was down by approximately US$90 million. The prior period included the write off of exploration expenditure at La Granja (Peru) and higher exploration expense in Petroleum.
• Favourable operating cost performance increased profits by approximately US$80 million compared with the corresponding period. The Group's cost reduction initiatives and reduced maintenance costs at Hillside (South Africa) lowered costs by approximately US$190 million. These factors were partially offset by higher costs at Escondida, due to voluntary restraints on production, maintenance outages and higher depreciation from the start-up of Phase IV. Higher operating costs at Bass Strait, increased depreciation charges in Energy Coal (as a result of a review of asset lives) and in Petroleum also had an unfavourable impact on operating costs.

Refer below to the discussions relating to the relevant Customer Sector Groups for other factors affecting the December 2002 results.

Depreciation and amortisation expense decreased US$77 million to US$807 million in the current half year. This was mainly due to the lower depreciation expense as a direct result of the demerger of the Group's Steel business in July 2002.

Borrowing costs decreased US$115 million to US$144 million in the current half year. Including capitalised interest, total borrowing costs decreased US$79 million to US$195 million, principally driven by lower market interest rates and lower average debt levels.

The tax expense for the period ended 31 December 2002 was US$367 million, compared with US$497 million for the period ended 31 December 2001. The effective taxation rate for the current half year was 28.8% compared with 29.3% in the corresponding period, while the nominal taxation rate was 30% for the current half year.

Petroleum contributed US$650 million to profit before tax, up from US$568 million, an increase of 14.4% compared with the corresponding period.

The increase in profit before tax was due mainly to a higher average realised oil price of US$27.19 per barrel compared to US$22.54 per barrel in the corresponding period, together with lower exploration costs in the current period and higher volumes at North West Shelf (Australia) due to timing of shipments and strong production.

These factors were partly offset by lower overall sales and production volumes at Liverpool Bay (UK) due to scheduled maintenance, and lower production at Bass Strait and Laminaria (Australia), due to natural field decline. An increase in price-linked costs (royalties and taxes), higher depreciation and an increase in costs at Bass Strait also had an unfavourable impact on profit before tax.

Aluminium contributed US$242 million to profit before tax, up from US$233 million, an increase of 3.9% compared with the corresponding period.

The increase in profit before tax was mainly attributable to improved operational cost performance at Hillside, Worsley and Alumar, resulting from increased production and reduced maintenance costs. Increased production at Hillside and Worsley was mainly attributable to the continued success of Operating Excellence projects and increased production at Alumar was due to the end of power restrictions in Brazil. Lower maintenance costs at Hillside were mainly a result of a lower number of pots being relined in the current period, combined with the absence of the net costs associated with the September 2001 power outage. The weakening of the Rand/US$ and Brazilian Real/US$ average exchange rates also had a favourable impact on operating costs.

These factors were partially offset by foreign exchange losses arising on conversion of Rand denominated tax provisions at balance date, compared with foreign exchange gains in the corresponding period. The lower average LME price for aluminium, down US$17 per tonne or 1.3% to US$1,332 per tonne and the strengthening of the A$/US$ exchange rate also had an unfavourable impact on profits.

Base Metals contributed US$53 million to profit before tax, up from US$51 million, an increase of 3.9% compared with the corresponding period.

The increase in profits was mainly attributable to lower exploration expense with US$38 million relating to the write off of La Granja included in the corresponding period. Also contributing to the increase in profits was the higher average realised copper price at US$0.68 per lb, for the half year ended 31 December 2002, compared to US$0.65 per lb in the corresponding period. Profits also benefited from a full six months of operations from Antamina. Commercial production at Antamina commenced in October 2001.

These factors were partially offset by increased unit costs at Escondida due to the ramp-up of Phase IV production and lower existing plant throughput resulting from maintenance outages. Production cutbacks at Escondida and Tintaya (Peru) were partially offset by the completion of the Phase IV expansion in October 2002.

Carbon Steel Materials contributed US$490 million to profit before tax, down from US$550 million, a decrease of 10.9% compared with the corresponding period.

The decrease in profits was mainly attributable to the unfavourable impact of stronger A$/US$ exchange rates on operating costs compared to the corresponding period. Lower iron ore prices, following the contract settlements announced in May 2002, also unfavourably impacted profits.

These factors were partially offset by continued strong demand for Western Australian iron ore from Asian markets, which resulted in record production and shipping during the December 2002 half year. Increased demand during the current half year for Samarco (Brazil) pellets also had a favourable impact on profits.

Diamonds and Specialty Products contributed US$84 million to profit before tax, down from US$144 million, a decrease of 41.7% compared with the corresponding period.

The decrease in profit before tax was mainly attributable to foreign exchange losses arising from conversion of Rand denominated tax provisions and debt at balance date, compared with foreign exchange gains in the corresponding period. Profits were also unfavourably impacted by lower average realised diamond prices (down 28%) as a result of a change in product mix compared with the corresponding period and during the current period Integris' volumes have been adversely affected by market conditions in North America.

These factors were partially offset by increased diamond production, mainly due to increased plant throughput and processing efficiencies. Cost efficiencies were achieved by Integris Metals (US) subsequent to the merger of BHP Billiton's and Alcoa Metals' metals distribution businesses on 1 November 2001.

Energy Coal contributed US$94 million to profit before tax, down from US$391 million, a decrease of 76.0% compared with the corresponding period.

The decrease in profits was primarily due to the foreign exchange losses arising from conversion of Rand denominated monetary liabilities at balance date, compared with foreign exchange gains in the corresponding period, and a significant decline in export market prices. The divestment of PT Arutmin in November 2001 and the closure of the Rietspruit mine in May 2002 had an unfavourable impact on profits with both the exclusion of the results of these operations in the current period and the profit on sale of PT Arutmin recorded in the corresponding period. The unit cost impact from lower Colombian production volumes in response to depressed European market conditions, higher depreciation charges as a result of a review of asset lives and inflationary pressure on costs in South Africa and Colombia also had an unfavourable impact on profits.

These factors were partially offset by higher sales volumes at Ingwe (South Africa) and Hunter Valley (Australia), the inclusion of profits from the additional share of the Cerrejon Zona Norte operation and cost improvement initiatives across all Energy Coal operations.

Stainless Steel Materials contributed US$58 million to profit before tax, compared with a loss of US$25 million in the corresponding period.

The increase in profits was driven by higher realised prices for nickel, up by 29%. In addition, a 12% increase in ferrochrome production, associated with the restart of idle furnaces in the period in response to increasing market demand, and a 15% increase in nickel production reflecting the continued ramp-up of production from Cerro Matoso Line 2 (Colombia) improved results. Benefits from ongoing improvement programs at both Cerro Matoso and QNI (Australia) and the impact of the weaker average Rand/US$ exchange rates on operating costs also had a favourable impact on profits.

Corporate overheads for the half year decreased by US$24 million (after taking account of inflation and exchange impacts) to US$100 million. Losses on legacy A$/US$ currency hedging also decreased to US$95 million from US$176 million in the corresponding period, which were partly offset by the unfavourable impact of one-off items.

On 4 December 2002, a dividend of 7.0 US cents per share was paid to BHP Billiton Limited and BHP Billiton Plc shareholders, which represents an increase of 7.7% compared with the corresponding period. The BHP Billiton Limited dividend was fully franked for Australian taxation purposes.

Dividends for the BHP Billiton group are determined and declared in US dollars. However, BHP Billiton Limited dividends are mainly paid in Australian dollars and BHP Billiton Plc dividends are mainly paid in sterling to shareholders on the UK section of the register and South African rand to shareholders on the South African section of the register.

The Group's inaugural Eurobond issue, under the US$1.5 billion Euro Medium Term Note programme established in June 2002, took place in early October 2002. The issue of Euro 750 million five year notes, which were swapped into US dollars, was oversubscribed and priced at the lower end of market expectations. The success of this issue, in light of the then prevailing market conditions, is a clear reflection of the Group's strong credit profile.

The US$1.25 billion 364 day revolving credit component of the US$2.5 billion syndicated multi-currency revolving credit facility that was due for expiry in September 2002 was extended for a further period of 364 days to September 2003.

In October 2002, Moody's Investor Services upgraded the Group's long term credit rating to A2 from A3 and short term credit rating to P-1 from P-2. This upgrade reflects the successful combination of the Group's operations following the merger in June 2001, the benefit of a substantially diversified portfolio and our continued focus on maintaining disciplined financial policies. Standard & Poor's rating for the Group remains on positive watch after being upgraded in September 2001 to its current long term credit rating of A and short term credit rating of A-1.

During the year ended 30 June 2002, merger benefits (before one-off costs) of US$220 million were delivered. A further US$65 million of merger-related benefits have been achieved during the six months to 31 December 2002, bringing the total to US$285 million. This exceeds our target for merger synergies, set at the time of the merger, of US$270 million by the end of financial year 2003, and has been achieved six months ahead of schedule. One-off costs of US$130 million in total were incurred to deliver these on-going annual benefits, US$15 million of which were incurred in the current period.

A further target, to achieve additional annual cost savings and efficiency gains of US$500 million by June 2005, was set in our Strategic Framework last April. This target, to be measured by looking at commodity based unit costs using the year ended 30 June 2001 as the base year, will be delivered through the continuation of our Operating Excellence programme and productivity improvements, ongoing strategic sourcing and marketing initiatives. During the six months to December 2002, we achieved savings and efficiency gains of US$70 million in addition to the merger benefits set out above, largely as a result of Operating Excellence initiatives in our Aluminium, Base Metals and Stainless Steel Materials CSGs and other productivity gains in our Aluminium and Diamonds and Specialty Products CSGs.

Net operating cash flows (after interest and tax) remained strong at US$1,189 million.

Expenditure on growth projects and investments amounted to US$1,020 million, including Petroleum projects in the Gulf of Mexico, the Mt Arthur North energy coal project in Australia, the ROD oil and Ohanet wet gas projects in Algeria, the Mining Area C, Yandi and Port and Capacity Expansion (PACE) iron ore projects in Australia, the Hillside 3 expansion in South Africa and the Mozal 2 expansion in Mozambique. Maintenance capital expenditure was US$223 million and exploration expenditure was US$130 million. These outflows were offset by the proceeds on demerger of the Group's Steel business of US$272 million, proceeds on the sale of the residual 6% share in BHP Steel after demerger of US$75 million, the repayment of loans by equity accounted associates of US$90 million, and proceeds from sale of property plant and equipment totalling US$33 million, contributed to an investing cash outflow of US$903 million. Whilst not reflected in cash flows, US$232 million of debt was retained by BHP Steel upon demerger.

After dividend payments of US$855 million (up from US$815 million in the prior half year), financing cash outflows were US$536 million.

Net debt comprises US$7,937 million of total debt offset by US$874 million of cash, including money market deposits.

At 31 December 2002 BHP Billiton's gearing ratio was 36.7% compared to 33.7% at 30 June 2002.

Based on earnings before interest and tax (EBIT), interest cover for the half year was 7.3 times compared to 7.2 times for the half year ended 31 December 2001. Based on earnings before interest, tax and depreciation (EBITDA), interest cover for the half year was 11.4 times compared with 10.4 times in the corresponding period.

Profit from ordinary activities before tax as a percentage of revenue was 17.5% for the half year ended 31 December 2002 compared with 19.2% for the corresponding period.

Net profit as a percentage of equity was 15.0% for the half year ended 31 December 2002 compared to 18.6% in the corresponding period.

Net tangible assets per fully paid share were US$1.84 as at 31 December 2002 compared with US$2.01 as at 31 December 2001.

In general, London Metals Exchange commodity prices showed improvement during the December 2002 quarter. Prices continued to show some improvement in the opening weeks of calendar 2003. Prices for oil have risen as a result of the ongoing uncertainty in the Middle East and Venezuela, while steel making raw materials are well positioned to benefit from strong North East Asian and, in particular, Chinese demand.

The global economy continues to encounter both economic and geo-political tensions. Despite continued buoyancy in China, the Organisation for Economic Cooperation and Development (OECD) leading indicator is signalling continued weakness in global industrial production.

In the short term, the uncertainty regarding developments in the Middle East, continued high oil prices and weak global equity markets are weighing heavily on consumer and business sentiment with the latter delaying the new investment spending and employment growth needed before there will be any sustained improvement in the world economy. Demand in China, an important influence on many of our products, continues to be strong.

Despite this uncertain outlook, our diversified portfolio of high quality assets provides relatively stable cashflows, leaving us well placed to continue to invest in value adding opportunities and to prosper from any uptick in economic activity.

No matter or circumstance has arisen since the end of the half year that significantly affected or may significantly affect the operations, the results of operations or state of affairs of the Group in subsequent financial periods.

Mr D R Argus - Chairman since April 1999 (on the Board of Directors since November 1996)

Mr D A Crawford - a Director since May 1994

Mr M A Chaney - a Director since May 1995

Dr D A Jenkins - a Director since March 2000

Dr J M Schubert - a Director since June 2000

Mr C W Goodyear - an Executive Director since November 2001

Mr B P Gilbertson - an Executive Director since June 2001, resigned 5 January 2003

Dr D C Brink - a Director since June 2001

Mr C A Herkstroter - a Director since June 2001

Lord Renwick of Clifton - a Director since June 2001

Dr John Buchanan - a Director since February 2003

On 24 February 2003, the Board announced the appointment of Mr Miklos Salamon as an Executive Director to the Board of Directors, with immediate effect.

The Company is a company of a kind referred to in Class Order No. 98/0100 dated 10 July 1998 issued by the Australian Securities and Investments Commission. Amounts in this report, unless otherwise indicated, have been rounded in accordance with that Class Order to the nearest million dollars.

Signed in accordance with a resolution of the Board.

D R Argus
Chairman

Dated in Melbourne this 24^th day of February 2003.

For the half year ended 31 December 2002

(a) Effective July 2002, the BHP Steel business was demerged from the BHP Billiton Group. The Statement of Financial Performance for the half year ended 31 December 2001 includes results pertaining to BHP Steel. Refer note 3 "Discontinued Operations".

(b) Basic earnings per share are calculated based on 6 201 million (31 December 2001: 6 024 million) weighted average number of shares. Diluted earnings per share are calculated based on 6 219 million (31 December 2001: 6 040 million) weighted average number of shares.

Under the terms of the DLC merger, the rights to dividends of a holder of an ordinary share in BHP Billiton Plc and a holder of an ordinary share in BHP Billiton Limited are identical. Consequently, earnings per share has been calculated on the basis of the aggregate number of ordinary shares ranking for dividend. The weighted average number of shares used for the purposes of calculating basic earnings per share is calculated after deduction of the shares held by the share repurchase scheme and the Billiton Employee Share Ownership Trust.

The weighted average diluted number of ordinary shares has been adjusted for the effect of Employee Share Plan options, Executive Share Scheme partly paid shares and Performance Rights to the extent they were dilutive at balance date. Refer note 13 for details of shares issued under these plans.

The accompanying notes form part of these interim condensed financial statements.

As at 31 December 2002

(a) Effective July 2002, the BHP Steel business was demerged from the BHP Billiton Group. The Statement of Financial Position as at 31 December 2001 and 30 June 2002 include BHP Steel assets and liabilities accordingly. Refer note 3 "Discontinued Operations".

The accompanying notes form part of these interim condensed financial statements.

For the half year ended 31 December 2002

(a) Effective July 2002, the BHP Steel business was demerged from the BHP Billiton Group. The Statement of Cash Flows for the half year ended 31 December 2001 includes cash flows pertaining to BHP Steel. Refer note 3 "Discontinued Operations".

The accompanying notes form part of these interim condensed financial statements.

On 29 June 2001, BHP Billiton Limited (previously known as BHP Limited), an Australian listed Company, and BHP Billiton Plc (previously known as Billiton Plc), a UK listed Company, entered into a Dual Listed Companies (DLC) merger. This was effected by contractual arrangements between the companies and amendments to their constitutional documents.

The effect of the DLC merger is that BHP Billiton Limited and its subsidiaries (the BHP Billiton Limited Group) and BHP Billiton Plc and its subsidiaries (the BHP Billiton Plc Group) operate together as a single economic entity (the BHP Billiton Group), with neither assuming a dominant role. Under the arrangements:

If either BHP Billiton Limited or BHP Billiton Plc proposes to pay a dividend to its shareholders, then the other Company must pay a matching cash dividend of an equivalent amount per share to its shareholders. If either Company is prohibited by law or is otherwise unable to declare, pay or otherwise make all or any portion of such a matching dividend, then BHP Billiton Limited or BHP Billiton Plc will, so far as it is practicable to do so, enter into such transactions with each other as the Boards agree to be necessary or desirable so as to enable both Companies to pay dividends as nearly as practicable at the same time.

The DLC merger did not involve the change of legal ownership of any assets of BHP Billiton Limited or BHP Billiton Plc, any change of ownership of any existing shares or securities of BHP Billiton Limited or BHP Billiton Plc, the issue of any shares or securities or any payment by way of consideration, save for the issue by each Company of one special voting share to a trustee company which is the means by which the joint electoral procedure is operated. In addition, to achieve a position where the economic and voting interests of one share in BHP Billiton Limited and one share in BHP Billiton Plc were identical, BHP Billiton Limited made a bonus issue of ordinary shares to the holders of its ordinary shares.

Accounting standards and policies have been consistently applied by all entities in the BHP Billiton Group in the half year ended 31 December 2002 and are consistent with those applied in the half year ended 31 December 2001 and the full year ended 30 June 2002.

As a consequence of the enactment of Australian tax consolidation legislation and since the consolidated tax groups within the BHP Billiton Group have not notified the Australian Taxation Office at the date of signing this report of the implementation date for tax consolidation, BHP Billiton Group has applied UIG 39 "Effect of Proposed Tax Consolidation Legislation on Deferred Tax Balances".

Individually significant items (before outside equity interests) included within the BHP Billiton Group net profit are detailed below.

No significant items are included in the results for the half year ended 31 December 2001.

NOTE 3. DISCONTINUED OPERATIONS


Effective July 2002, the BHP Steel business demerged from the BHP Billiton Group. The demerger of BHP Steel effectively brings to an end the BHP Billiton Group's involvement as a steel producer and follows the demerger of the OneSteel business in October 2000 and the disposal of other steel operations, such as the US West Coast Steel businesses in June 2000.

Prior to the demerger, BHP Steel was the leading steel company in Australia and New Zealand, specialising in the production of flat steel products, including slab, hot rolled coil, plate and value-added metallic coated and pre-painted steel products. The Company supplied customers in Australia, New Zealand, Asia, the US, Europe, the Middle East and the Pacific. Key steelmaking assets were the low-cost global scale Port Kembla Steelworks (Australia), BHP New Zealand Steel and North Star BHP Steel (US). A network of metallic coating and coil painting facilities operated in Australia, New Zealand and South East Asia.

The financial performance of the Discontinued Steel business (including the loss upon sale of 6% interest in BHP Steel retained by BHP Billiton), as included in the Statement of Financial Performance, is detailed as follows:

While the BHP Billiton Group operates its treasury function on a Group basis, certain financing arrangements not reported in the Steel segment can be attributed to the discontinued Steel operations. Not included within revenue from ordinary activities is interest income of US$6 million. The borrowing costs associated with attributable debt instruments was US$8 million. The income tax expense related to the discontinued operation, including the tax impact on financing arrangements included above, was US$3 million.

The contribution to Group cash flows of these businesses, before consideration of borrowing costs and income tax, as included in the Statement of Cash Flows, is detailed as follows:

(a) Includes US$75 million in proceeds from the sale of 6% of BHP Steel and US$1 million in costs associated with the sale.

The attributable net assets of BHP Steel as included in the Statement of Financial Position is provided below. In addition, the net assets demerged in July 2002, which are equivalent to the balances held at 30 June 2002, are also provided, after allowing for the settlement of intercompany loans by BHP Steel to the BHP Billiton Group.

(a) Includes certain assets and liabilities (primarily cash, interest bearing liabilities and taxation provisions), which are not allocated to Steel for segment reporting purposes.

The impact on the BHP Billiton Group of the demerger of BHP Steel business in July 2002 was as follows:

The following tables relate to share options issued under the Employee Share Plan, performance rights issued under the Performance Share Plan, awards issued under the Restricted Share Scheme, awards issued under the Co-Investment Plan and performance shares issued under the Group Incentive Scheme. Unless otherwise indicated details of the Plans, including comparatives, are presented including, where applicable, a bonus element to which the participant became entitled with effect from 29 June 2001, as a result of the DLC merger.

(a) Refer note 9.

(b) Refer note 12 (e).

(a) Refer note 9.

(b) Refer note 12 (e).

(c) The BHP Steel business was demerged in July 2002 with a capital reduction of US$1 489 million, including approximately US$17 million of costs directly associated with the demerger. The capital reduction decreased Contributed equity by US$1 456 million and Reserves by US$33 million.

For the purpose of the Statement of Cash Flows, cash is defined as cash and cash equivalents. Cash equivalents include highly liquid investments, which are readily convertible to cash, bank overdrafts and interest bearing liabilities at call.

(a) Included in the Statement of Financial Position as Interest Bearing Liabilities (Current)

(b) The Employee Share Plan loan instalments represent the repayment of loans outstanding with the BHP Billiton Group, by the application of dividends.

Effective July 2002, the BHP Steel business demerged from the BHP Billiton Group. Refer note 3 "Discontinued Operations" for the details of the effect of the demerger. The inflow of cash as a result of the sale (net of cash disposed) was US$272 million.

During the half year ended 31 December 2001, BHP Billiton sold its investment in PT Arutmin Indonesia for proceeds of US$140 million. The net assets of the entity sold at the time of disposal were US$76 million. BHP Billiton recognised a profit on sale of PT Arutmin Indonesia of US$64 million during the half year ended 31 December 2001. The inflow of cash as a result of the sale (net of cash disposed) was US$141 million.

There have been no material changes in contingent liabilities or contingent assets that existed at 30 June 2002.

No matters or circumstances have arisen since the end of the half year that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the BHP Billiton Group in subsequent accounting periods.

For the convenience of the reader, an Australian dollar Statement of Financial Position of the BHP Billiton Group is detailed below. A convenience translation of amounts from US dollars into Australian dollars has been made at an exchange rate of US$0.5666 = A$1 at 31 December 2002, US$0.5664 = A$1 at 30 June 2002 and US$0.5114 = A$1 at 31 December 2001. These rates of exchange are based on the Hedge Settlement Rate ('HSR') on the last day of each financial period respectively. The HSR is calculated as the average of the spot US$/A$ rates of exchange quoted at 9.45am each business day by the top licenced foreign exchange dealers in the Australian market and is used as the basis for settling hedge contracts maturing on that day.