Results for the Half Year Ended 31 December 2013

BHP BILLITON RESULTS FOR THE HALF YEAR Ended 31 DECEMBER 2013

§ A substantial improvement in productivity and additional volume from our low risk, largely brownfield investment program contributed to a significant increase in profitability in the December 2013 half year.

§ Underlying EBIT(1) increased by 15% to US$12.4 billion and Underlying attributable profit(1)(2) increased by 31% to US$7.8 billion.

§ The commitment we made 18 months ago to deliver more from existing infrastructure at a lower unit cost is delivering tangible results with annualised productivity led volume and cost efficiencies totalling US$4.9 billion(3) now embedded.

§ This sustainable increase in productivity supported a 9% increase in the Group's Underlying EBIT margin(2) to 38% and a strong improvement in the Group's Underlying return on capital(2) to 22%(4).

§ A 65% increase in net operating cash flow and a 25% reduction in cash outflows from investing activities led to a US$7.8 billion(5) increase in free cash flow(2).

§ Our progressive base dividend, which increased by 3.5% to 59 US cents per share, is comfortably covered by internal cash flow.

§ Proceeds of US$2.2 billion(6) from portfolio simplification further strengthened the Group's solid A balance sheet.

§ With strong free cash flow projected, net debt(2) of US$27.1 billion is expected to approach US$25 billion by the end of the 2014 financial year.

§ We are well placed to extend our strong track record of capital management.

The financial report on pages 29 to 68 has been prepared in accordance with IFRS. This news release including the financial report is unaudited. Refer to page 25 for footnotes, including explanations of the non-IFRS measures used in this announcement. Variance analysis relates to the relative financial and/or production performance of BHP Billiton and/or its operations during the December 2013 half year compared with the December 2012 half year, unless otherwise noted. Comparative financial information has been restated for the effect of new accounting standards and other changes in accounting policies which became effective 1 July 2013, the impact of which is described in note 11 to the financial report.

Results for the half year ended 31 December 2013

Safety is paramount

The health and safety of our employees and contractors, and that of the broader communities in which we operate, are central to the success of our organisation. BHP Billiton's safety performance continued to improve in the December 2013 half year. The Group suffered no fatalities during the period and our Total Recordable Injury Frequency (TRIF) declined to a record low of 4.4 per million hours worked. We remain focused on identifying, understanding and managing material health and safety risks, and are determined to prevent work related fatalities or serious injuries and illnesses at our operations.

Strong and predictable operating performance

Strong operating performance across BHP Billiton's diversified portfolio in the December 2013 half year delivered a 10 per cent(8) increase in production, with records achieved across three commodities and 10 operations. Western Australia Iron Ore (WAIO) achieved record production of 108 million tonnes (100 per cent basis) as the operation benefited from the early delivery of first production from the Jimblebar mine. Queensland Coal also achieved record production for the half year as productivity initiatives increased annualised production to 68 million tonnes (100 per cent basis) in the December 2013 quarter. Petroleum liquids production increased by nine per cent to 50 million barrels of oil equivalent in the December 2013 half year, underpinned by a 72 per cent increase at Onshore US, while copper production increased by six per cent to 843 thousand tonnes.

Iron Ore and Metallurgical Coal are well positioned to achieve full year production guidance, although the current wet season in northern Australia represents a key risk. Full year guidance is also retained for our remaining pillars of Petroleum and Copper. The Group's strong momentum is expected to be maintained with production growth of 16 per cent(8) anticipated over the two years to the end of the 2015 financial year.

Our productivity agenda has delivered a sustainable increase in profitability

A substantial improvement in productivity and additional volume from our low risk, largely brownfield investment program contributed to a significant increase in profitability in the December 2013 half year. Underlying EBIT increased by 15 per cent to US$12.4 billion and Underlying attributable profit increased by 31 per cent to US$7.8 billion.

The commitment we made 18 months ago to deliver more tonnes and more barrels from our existing infrastructure at a lower unit cost is delivering tangible results. Annualised productivity led volume and cost efficiencies totalling US$4.9 billion(3) are now embedded and this is expected to increase to US$5.5 billion by the end of the 2014 financial year. This sustainable increase in productivity supported a nine per cent increase in the Group's Underlying EBIT margin to 38 per cent and a strong improvement in the Group's Underlying return on capital to 22 per cent(4).

Intense competition for capital is driving investment returns higher

The Group's capital and exploration expenditure is expected to decline by 25 per cent in the 2014 financial year to US$16.1 billion (BHP Billiton share)(7) before declining again next year.

At the end of the December 2013 half year, BHP Billiton's 10 low risk, largely brownfield projects were tracking to plan. Beyond our current projects in execution, the Group's opportunity rich portfolio remains a key point of differentiation. By maintaining strict financial discipline and increasing internal competition for capital we intend to further differentiate ourselves by creating a more capital efficient organisation. As we become even more focused on our major basins, fewer projects will pass through our investment tollgates and the prospective investment returns for our favoured projects will continue to rise. On this basis, we believe that an average rate of return of greater than 20 per cent (ungeared, after tax, nominal dollars) is achievable for our portfolio of major development options.

Well positioned to extend our strong track record of capital management

A 65 per cent increase in net operating cash flow and a 25 per cent reduction in cash outflows from investing activities led to a US$7.8 billion(5) increase in free cash flow(2).

Our interim dividend of 59 US cents per share was unchanged from last year's final dividend, consistent with recent practice, although the resultant 3.5 per cent increase in our interim distribution highlights the power of our progressive dividend policy. We will consider the trajectory of our progressive base dividend at the end of the 2014 financial year.

The Group's current annual dividend commitment of US$6.3 billion is comfortably covered by internal cash flow, while proceeds of US$2.2 billion(6) from portfolio simplification further strengthened our solid A balance sheet. With strong free cash flow projected, net debt of US$27.1 billion is expected to approach US$25 billion by the end of the 2014 financial year. We are well placed to extend our strong track record of capital management.

Outlook

Economic outlook

Global economic conditions improved during the December 2013 half year. In the developed world, Europe experienced a period of relative stability while the United States' economy accelerated, with continued improvement in private sector balance sheets a key supporting factor. The balance of risk to global growth is skewed to the upside, particularly given the broad based alignment of macroeconomic indicators in the major developed economies.

Policy direction from the recent third plenum in China has been received positively, with a notable emphasis on the market's role in allocating capital. Fiscal system transparency is a key aspect of reform, with an expected reshaping of the relationship between central and local government. We expect further progress on these and other reform measures over the coming years. However, it will also be a period of tighter monetary and fiscal policy, as the central government addresses challenges associated with local government debt. With credit conditions a major focus in the coming year, volatility is likely to increase. In such an environment, our long term relationships with the largest and most stable counterparties in the region will be a competitive advantage. The value of these relationships will only increase as growth in China moderates from the relatively rapid rates seen during the past decade with the inevitable transition towards a consumption based economy.

Growth in the United States outperformed market expectations during the period. Despite volatility, a stronger labour market and increased consumer spending provided robust underlying support to the world's largest economy. Importantly, the private sector continued to provide significant impetus despite the Federal Reserve's progressive shift towards a tightening bias. Furthermore, manufacturing surveys in the United States continue to indicate that an improving economic backdrop could be a catalyst for strong growth in the industrial sector in the coming year.

Improving sentiment in the United States, while positive, does create a risk that the expected reversal of quantitative easing could result in the continued redirection of capital away from emerging economies. That said, the associated impact is likely to be less severe for those emerging economies with sound macroeconomic policy fundamentals, while central banks are also likely to respond where necessary. Furthermore, economies such as Brazil, Turkey and India are all scheduled for general elections during 2014 and could see a boost from improved confidence and activity if the results are decisive.

In Japan, positive sentiment has underpinned increased investment activity during the past year. While the trend in inflation is beginning to show a sustainable increase, it must translate into higher household incomes over the next six to 12 months to validate the success of current policy. Notwithstanding the encouraging signs in the Japanese economy, the short term outlook may be volatile as consumer demand has been inflated ahead of an expected increase in the consumption tax scheduled for April 2014.

From a broader perspective, China's growing share of services within economic output and the United States' declining trade deficit are further indications of more balanced and sustainable global growth. We view this as a positive development and expect this trend to continue into the long term.

Commodities outlook

Commodity prices exhibited relative stability in the first half of the 2014 financial year, consistent with the prevailing global economic environment. For some commodities, including iron ore and crude oil, prices remained at elevated levels as important supply basins experienced temporary constraints.

Chinese steel production growth rates are expected to decelerate to levels considerably below GDP growth in the short term as the economy matures following a period of steel-intensive, infrastructure-led growth. In this context, a more balanced iron ore market is anticipated with substantial new supply from the high quality, low cost basins of Western Australia and Brazil expected to exceed demand growth. Increasing mill utilisation rates and the continued closure of sinter capacity, both of which are associated with more demanding environmental regulations within China, should support a preference for high quality lump iron units.

More broadly, with global growth rates expected to rise, demand for steel making raw materials from markets outside of China should also rise. This will predominantly benefit metallurgical coal demand given the reliance of these markets on higher quality, imported product. Against this backdrop, the unsustainable nature of high cost North American exports and slowing supply growth from Australia should be supportive for metallurgical coal pricing in the medium term.

Growth in copper production has exerted some downward pricing pressure, with the supply of concentrate exceeding smelter capacity. Improving global economic conditions are, however, set to support demand growth and we expect the copper market to move back into deficit in the medium term. Our positive longer term outlook for copper remains underpinned by rising strip ratios and grade decline at existing operations and a shortage of high quality opportunities ready for development.

Natural gas pricing has benefited from lower than average winter temperatures in the US and this environment has not only generated strong demand, but also a degree of capacity constraint. With storage rates now below the historical, seasonally adjusted five year minimum inventory level, short term prices should be supported as gas will need to be re‑injected into storage capacity when demand comes off its seasonal peak.

The outlook for nickel is supported by healthy demand, particularly in China, while nickel ore supply and the associated production of nickel pig iron in China is expected to be influenced by Indonesian government policy associated with the export of unprocessed ores. In both nickel and aluminium, we expect supply surpluses to ease over the medium term, however excessive inventory levels for both commodities should dampen the price response. The strong premia currently being realised in certain regional markets are expected to remain at elevated levels as bottlenecks in the delivery of warehouse material will take an extended time to be resolved.

In summary, the global economy is expected to strengthen over the balance of the 2014 financial year, providing continued support for commodities demand, albeit at more moderate rates of growth. In the longer term, the fundamentals of wealth creation and urbanisation should benefit general commodities demand, although the transition to consumption led growth in the emerging economies should provide particular support for industrial metals, energy and fertilisers.

Development projects

At the end of the December 2013 half year, BHP Billiton had 10 low risk, largely brownfield major projects under development with a combined budget of US$17.5 billion. With the successful completion of the Macedon project the Group continued to build on its reputation for project delivery capability. Another five projects handled first ore or achieved initial production, namely: North West Shelf North Rankin B Gas Compression; WAIO Jimblebar Mine Expansion; WAIO Port Blending and Rail Yard Facilities; Newcastle Third Port Stage 3; and the Cerrejon P40 Project.

In July 2013, BHP Billiton announced an investment of US$3.4 billion to construct a desalination facility which will deliver sustainable water supply to Escondida over the long term. In August 2013, BHP Billiton also approved a US$2.6 billion investment to finish the excavation and lining of the Jansen Potash project production and service shafts, and to continue the installation of essential surface infrastructure and utilities.

BHP Billiton's share of capital and exploration expenditure declined by 28 per cent during the December 2013 half year, to US$7.9 billion(7). Guidance for the 2014 financial year remains unchanged at US$16.1 billion(7).

(i) Includes US$126 million of capitalised deferred stripping associated with non-controlling interests (December 2012 half year: US$140 million; June 2013 financial year: US$292 million).

(ii) Represents the share of capital and exploration expenditure (on an accruals basis) attributable to BHP Billiton shareholders. Includes BHP Billiton proportionate share of equity accounted investments; excludes non-controlling interests and capitalised deferred stripping.

Projects completed during the December 2013 half year

Projects in execution at the end of the December 2013 half year

Projects under development

(i) Unless noted otherwise, references to capacity are on a 100 per cent basis, references to capital expenditure from subsidiaries are reported on a 100 per cent basis and references to capital expenditure from equity accounted investments and other operations are reported at our equity share.

(ii) Number subject to finalisation.

(iii) Excludes announced pre-commitment funding.

(iv) Completion of both shafts is expected during the 2016 calendar year, while the associated works program will extend into the 2017 calendar year.

Income statement

To provide additional clarity into the underlying performance of our operations we present Underlying EBIT excluding exceptional items, which is a measure used internally. Exceptional items are described on page 11 and the difference between Underlying EBIT and Profit from operations is set out in the following table:

Underlying EBIT

The following table and commentary describes the approximate impact of the principal factors that affected Underlying EBIT for the December 2013 half year compared with the December 2012 half year:

(i) One-off items comprise Onshore US drill rig termination costs; charges for underutilised gas pipeline capacity; and a non-cash variance associated with a major planned maintenance program at Olympic Dam in the prior period.

The following table reconciles principal factors shown above with the Group's productivity gains:

Volumes

The momentum of our productivity agenda carried into the December 2013 half year as previously embedded annualised volume efficiencies increased by 50 per cent, from US$1.0 billion in the 2013 financial year to US$1.5 billion(3).

When compared with the December 2012 half year, strong operating performance across our diversified portfolio delivered a 10 per cent(8) increase in production, with records achieved across three commodities and 10 operations.

Productivity led volume efficiencies increased Underlying EBIT by US$542 million. WAIO was the major contributor as a series of value enhancing debottlenecking initiatives within this high margin business supported a US$302 million increase in Underlying EBIT.

Investment in our business throughout the economic cycle also continued to underpin growth in our core commodities and highest margin businesses. It is this same growth that will underpin the longer term growth of our progressive base dividend. In this regard, the progressive ramp up of several major projects and strong liquids production growth from Atlantis and Onshore US increased Underlying EBIT by a further US$705 million. The early delivery of iron ore production at the Jimblebar mine and the completion of the Macedon gas project were notable achievements during the period.

In aggregate, stronger sales volumes increased Underlying EBIT by US$1.2 billion in the December 2013 half year.

Iron Ore and Metallurgical Coal are well positioned to achieve full year production guidance, although the current wet season in northern Australia represents a key risk. Full year guidance is also retained for our remaining pillars of Petroleum and Copper. The Group's strong momentum is expected to be maintained with production growth of 16 per cent(8) anticipated over the two years to the end of the 2015 financial year.

Prices

Lower prices reduced Underlying EBIT by US$683 million in the December 2013 half year. Overcapacity in the nickel and aluminium markets, and concerns of a near term rebalancing in the copper market, weighed on metals prices and reduced Underlying EBIT by a combined US$995 million. A significant recovery in Australian metallurgical coal supply led to an 18 per cent and 10 per cent fall in the average realised price of hard coking coal and weak coking coal, respectively, which reduced Underlying EBIT by US$533 million. In contrast, strong underlying demand and temporary supply constraints led to a 10 per cent increase in the average realised price for iron ore, which increased Underlying EBIT by US$964 million.

Within our Petroleum business, a 13 per cent increase in the average realised price of US natural gas was offset by a two per cent decline in the average realised price of both oil and liquefied natural gas (LNG).

Price linked costs reduced Underlying EBIT by US$91 million during the period and primarily reflected higher royalty charges in our Iron Ore business.

Controllable cash costs

The momentum of our productivity agenda carried into the December 2013 half year as annualised controllable cash cost efficiencies increased from US$2.7 billion in the 2013 financial year to US$3.4 billion(3). A total of US$1.8 billion(3) of productivity led cost efficiencies have now been embedded, along with a US$1.6 billion(3) reduction in exploration and business development activity.

Operating cash costs

When compared with the December 2012 half year, labour productivity and the further optimisation of our contractor activities increased Underlying EBIT by US$325 million. In addition, a general improvement in the Group's equipment productivity increased Underlying EBIT by US$247 million.

There is no better example of the renewed discipline that we are applying at an operational level than Queensland Coal, where our focus on contractor and maintenance costs significantly improved the profitability of the operation. In this regard, BHP Billiton Mitsubishi Alliance unit cash costs declined by a substantial 25 per cent during the period. In our Aluminium, Manganese and Nickel business, the turnaround in performance reflects the action that our teams have taken to maximise the cash generating capacity of these lower margin operations.

While substantial cost efficiencies have been achieved across our portfolio, we also incurred additional costs in specific cases to achieve an overall increase in shareholder value and investment returns. For example, at WAIO we focused on the bottlenecks in order to squeeze more highly profitable tonnes through our installed infrastructure. This activity contributed to a five million tonne per annum (100 per cent basis) increase to our production guidance. The additional volume came at an incrementally higher unit cost.

Exploration and business development

A 26 per cent reduction in the Group's exploration expenditure to US$504 million in the December 2013 half year reflected our sharpened focus on greenfield copper porphyry targets in Chile and Peru and high value oil and gas prospects in the Gulf of Mexico and offshore Western Australia. The associated decline in the Group's exploration expense increased Underlying EBIT by US$218 million. A US$1.0 billion exploration program, which includes US$600 million in our Petroleum business, is planned for the 2014 financial year.

A general reduction in business development expenditure increased Underlying EBIT by a further US$57 million in the December 2013 half year.

Other costs

Exchange rates

A stronger US dollar benefited our cost base during the period and increased Underlying EBIT by US$1.2 billion. This variance excluded a US$345 million benefit associated with the restatement of monetary items in the balance sheet. In total, exchange rate volatility increased Underlying EBIT by US$1.5 billion.

The following exchange rates have been applied:

(i) Displayed as US$ to A$1 based on common convention.

Inflation

Inflation had an unfavourable impact on all businesses and reduced Underlying EBIT by US$340 million during the December 2013 half year. This was most notable in Australia and South Africa, which accounted for over 75 per cent of the total variance.

Non-cash

A higher depreciation and amortisation expense reduced Underlying EBIT by US$828 million during the period. A US$344 million increase in depreciation at our Onshore US business primarily reflected the early stage of development in our highly prospective Permian acreage. The Permian depreciation rate is expected to normalise as production ramps up and reserves are booked. The recent completion of several major projects at WAIO also contributed to the rise in our depreciation expense, reducing Underlying EBIT by a further US$177 million.

One-off items

One-off items reduced Underlying EBIT by US$72 million and largely reflected Onshore US drill rig termination charges.

Asset sales

The contribution of asset sales to Underlying EBIT declined by US$17 million in the December 2013 half year.

Ceased and sold operations

Underlying EBIT from ceased and sold operations increased by US$33 million in the December 2013 half year and largely reflected the contribution from Pinto Valley that followed the restart of mining operations in December 2012. The divestment of Pinto Valley was completed during the period and is reported as an exceptional item.

Other items

Other items decreased Underlying EBIT by US$70 million in the December 2013 half year and this was more than accounted for by a US$115 million UK pension plan expense in our Petroleum business. The variance in our share of profit after tax for equity accounted investments is also included in this category.

Net finance costs

Net finance costs of US$528 million were largely unchanged from the prior period.

Taxation expense

Total taxation expense, including royalty-related taxation, exceptional items and exchange rate movements, was US$3.5 billion, representing an effective tax rate of 28.4 per cent (31 December 2012: 29.6 per cent).

The Group's adjusted effective tax rate, which excludes the influence of exchange rate movements, remeasurement of deferred tax balances associated with the Minerals Resource Rent Tax (MRRT) and exceptional items, was 32.5 per cent (31 December 2012: 32.4 per cent). This adjusted effective tax rate is expected to remain in the range of 31 per cent to 34 per cent for the 2014 financial year.

Government imposed royalty arrangements calculated by reference to profits are reported as royalty-related taxation. The Group expensed US$29 million of MRRT in the December 2013 half year. This was offset by the remeasurement of deferred tax assets associated with the MRRT which reduced taxation expense by US$491 million.

Other royalty and excise arrangements which are not profit based are recognised as operating costs within Profit before taxation. These amounted to US$1.4 billion during the period (31 December 2012: US$1.3 billion).

Exceptional items

On 11 October 2013, BHP Billiton completed the sale of its Pinto Valley mining operation for a cash consideration of US$653 million, after working capital adjustments. A gain on sale of US$346 million (after tax expense) was recognised in the December 2013 half year.

Cash flows

Net operating cash flows after interest and tax increased by 65 per cent to US$11.9 billion for the period. A US$2.6 billion increase in cash generated from operations (after changes in working capital balances) and a US$1.8 billion decrease in tax paid were the major contributors to the strong increase.

Net investing cash outflows decreased by US$1.4 billion to US$8.5 billion during the period. This primarily reflected a US$3.2 billion reduction in capital and exploration expenditure, although this was partially offset by a decline in asset sales. Expenditure on major growth projects totalled US$7.1 billion, including US$3.0 billion on Petroleum projects and US$4.1 billion on Minerals projects. Sustaining capital expenditure and other items totalled US$1.5 billion. Exploration expenditure was US$504 million, including US$342 million classified within net operating cash flows.

Net financing cash flows included proceeds from borrowings of US$5.5 billion and contributions from non-controlling interests of US$1.4 billion. Proceeds from borrowings included the issuance of a four tranche Global Bond of US$5.0 billion. These inflows were partially offset by debt repayments of US$1.5 billion and dividend payments of US$3.2 billion.

Net debt, comprising interest bearing liabilities less cash, finished the period at US$27.1 billion, a decrease of US$422 million compared to the net debt position at 30 June 2013.

Dividend

BHP Billiton has a progressive dividend policy. The aim of this policy is to steadily increase or at least maintain our base dividend in US dollars at each half yearly payment. Our Board today determined to pay an interim dividend of 59 US cents per share.

The dividend to be paid by BHP Billiton Limited will be fully franked for Australian taxation purposes. Dividends for the BHP Billiton Group are determined in US dollars. However, BHP Billiton Limited dividends are mainly paid in Australian dollars, and BHP Billiton Plc dividends are mainly paid in pounds sterling and South African rand to shareholders on the UK section and the South African section of the register, respectively. Currency conversions will be based on the foreign currency exchange rates on the Record Date, except for the conversion into South African rand, which will take place on the last day to trade (cum dividend) on JSE Limited, being 28 February 2014. Please note that all currency conversion elections must be registered by the Record Date, being 7 March 2014. Any currency conversion elections made after this date will not apply to this dividend.

The timetable in respect of this dividend will be:

American Depositary Shares (ADSs) each represent two fully paid ordinary shares and receive dividends accordingly.

BHP Billiton Plc shareholders registered on the South African section of the register will not be able to dematerialise or rematerialise their shareholdings between the dates of 3 and 7 March 2014 (inclusive), nor will transfers between the UK register and the South African register be permitted between the dates of 28 February and 7 March 2014 (inclusive).

Details of the currency exchange rates applicable for the dividend will be announced to the relevant stock exchanges following conversion and will appear on the Group's website.

Debt management and liquidity

During the December 2013 half year, the Group issued a four tranche Global Bond comprising US$500 million Senior Floating Rate Notes due 2016 paying interest at 3 month US Dollar LIBOR plus 25 basis points, US$500 million 2.050% Senior Notes due 2018, US$1,500 million 3.850% Senior Notes due 2023, and US$2,500 million 5.000% Senior Notes due 2043.

The Group has a US$6.0 billion commercial paper program backed by US$6.0 billion of revolving credit facilities, consisting of US$5.0 billion expiring in December 2015 and US$1.0 billion expiring in December 2014.

As at 31 December 2013 the Group's cash and cash equivalents on hand were US$10.9 billion, including US$375 million outstanding in the US commercial paper market.

Subsequent to 31 December 2013, the Group redeemed all outstanding Petrohawk Energy Corporation 10.5% Senior Notes due 2014 and 7.875% Senior Notes due 2015 at the applicable call prices. The total aggregate principal value of the notes redeemed was approximately US$1.4 billion.

With strong free cash flow projected, net debt of US$27.1 billion is expected to approach US$25 billion by the end of the 2014 financial year, consistent with our commitment to maintain a strong balance sheet and our solid A credit rating.

Corporate governance

There were no appointments to, or resignations from, the Board during the period. Carolyn Hewson has been appointed to the Remuneration Committee and remains a member of the Risk and Audit Committee. The Remuneration Committee is comprised of Sir John Buchanan, Carlos Cordeiro, Pat Davies, Carolyn Hewson and John Schubert.

Business summary(i)

The following table provides a summary of the performance of the businesses for the December 2013 half year and the corresponding period.

(i) Group level information is reported on a statutory basis which, in relation to Underlying EBIT, includes net finance costs and taxation expense for equity accounted investments.

(ii) Revenue is based on Group realised prices and includes third party products. Total third party product revenue for the Group is US$1,739 million and Underlying EBIT is US$85 million (2012: US$1,580 million and US$62 million).

(iii) Underlying EBIT is defined as earnings before net finance costs, taxation expense and any exceptional items. Underlying EBIT is reported net of net finance costs of US$65 million and taxation expense of US$302 million for equity accounted investments (2012: net finance costs of US$10 million and taxation expense of US$364 million). Underlying EBITDA, as reported within each business table, is Underlying EBIT before depreciation, amortisation and impairments (D&A).

(iv) Net operating assets represent operating assets net of operating liabilities and predominantly exclude cash balances, interest bearing liabilities and deferred tax balances. Net operating assets of equity accounted investments represent the balance of the Group's investment in equity accounted investments, and therefore include cash balances, interest bearing liabilities and deferred tax balances.

(v) Includes accrued capital expenditure and excludes capitalised interest and capitalised exploration. Capex in aggregate comprises US$6,993 million growth and US$1,335 million other (2012: US$9,075 million growth and US$1,739 million other).

(vi) Includes US$162 million capitalised exploration (2012: US$123 million).

(vii) Includes US$98 million exploration expenditure previously capitalised, written off as impaired (included in depreciation and amortisation) (2012: US$97 million).

(viii) Includes the Group's diamonds business (divested effective 10 April 2013), interest in titanium minerals (divested effective 3 September 2012), non-Potash corporate costs incurred by the former Diamonds and Specialty Products business, consolidation adjustments, unallocated items and external sales of freight and fuel via the Group's transport and logistics operations.

Petroleum and Potash

Total petroleum production for the December 2013 half year of 120.4 million barrels of oil equivalent was in line with the prior period. A nine per cent increase in liquids production was underpinned by a 72 per cent increase in Onshore US liquids and an 80 per cent increase in Atlantis volumes. This was offset by a seven per cent decline in natural gas production due to lower seasonal Bass Strait demand and natural field decline at Haynesville following our decision to prioritise Onshore US development drilling in the liquids rich Black Hawk region of the Eagle Ford.

Petroleum Underlying EBIT for the December 2013 half year decreased by US$534 million to US$2.6 billion. Higher sales volumes, which included significant liquids production growth from Atlantis and Onshore US, underpinned a US$197 million increase in Underlying EBIT. This was offset by a US$400 million increase in depreciation and amortisation charges, which primarily reflected the early stage of development in our highly prospective Permian acreage. Several non-recurring charges, including Onshore US drill rig termination costs of US$75 million and a US$115 million UK pension plan expense, further contributed to the reduction in Underlying EBIT. The Group also incurred a charge of US$103 million for underutilised gas pipeline capacity in the Haynesville as we continue to prioritise our liquids rich acreage.

The repetitive, manufacturing-like nature of shale development is ideally suited to our productivity agenda and we are delivering strong results. A continued decline in drilling costs per well, an increase in recovery through completions optimisation and an acceleration in spud to sales timing is expected to unlock substantial shareholder value. With strong growth in liquids production projected, our Onshore US business is expected to show an improvement in financial performance and be profitable in the second half of the 2014 financial year.

Petroleum prices remained relatively stable during the December 2013 half year. The average realised price of natural gas across our portfolio increased by five per cent to US$3.81 per thousand standard cubic feet. This included a 13 per cent increase in the average realised price of US natural gas to US$3.44 per thousand standard cubic feet. These gains were offset by a two per cent decline in the average realised price of oil to US$102.86 per barrel, a two per cent decrease in the average realised price of LNG to US$14.63 per thousand standard cubic feet, and a 15 per cent decline in the average realised price of natural gas liquids (NGL) to US$41.71 per barrel of oil equivalent.

Onshore US overview for the December 2013 half year

Capital expenditure for our Conventional and Shale businesses totalled US$3.2 billion in the December 2013 half year. This included Onshore US drilling and development expenditure of US$2.4 billion. Approximately 75 per cent of drilling activity occurred in the Eagle Ford, with the majority focused on our liquids rich Black Hawk acreage. The rate of expenditure is expected to slow in the second half of the 2014 financial year following a 35 per cent reduction in the Company's active rig count to 26 during the period. Our high return, largely liquids focused development plans are underpinned by annual investment of approximately US$4.0 billion, subject to market conditions.

Petroleum exploration expenditure for the December 2013 half year was US$285 million, of which US$147 million was expensed. During the period BHP Billiton signed a Production Sharing Contract for Block 23b in Trinidad and Tobago, where the Group now has a 60 per cent interest and is the operator. A US$600 million exploration program, largely focused on the Gulf of Mexico and Western Australia, is planned for the 2014 financial year.

During the period, BHP Billiton reached an agreement to sell Liverpool Bay. The transaction is subject to regulatory approval and other customary conditions, and is expected to be completed in the second half of the 2014 financial year.

Total petroleum production guidance for the 2014 financial year remains unchanged at approximately 250 million barrels of oil equivalent with an anticipated 75 per cent increase in Onshore US liquids production.

On 20 August 2013, BHP Billiton announced an investment of US$2.6 billion to finish the excavation and lining of the Jansen Potash project production and service shafts, and to continue the installation of essential surface infrastructure and utilities. Excavation of the production and service shafts paused in the December 2013 quarter to enable a thorough review of the activities completed to date and to ensure all learnings are captured and adopted in future works. Excavation activity is expected to resume by the end of February 2014. The staggered manner in which we are progressing the production and service shafts allows us to mitigate risk and optimise their development. Completion of both shafts is expected during the 2016 calendar year, while the associated works program will extend into the 2017 calendar year.

Potash Underlying EBIT increased by US$46 million to a loss of US$113 million. A significant reduction in exploration activity was the major contributor to the increase in Underlying EBIT, with activity now focused on shaft excavation at Jansen.

Financial information for the Petroleum and Potash business for the half years ended December 2013 and December 2012 is presented below.

(i) Petroleum revenue from Group production includes: crude oil US$4,076 million (2012: US$3,746 million), natural gas US$1,380 million (2012: US$1,396 million), LNG US$803 million (2012: US$907 million), NGL US$420 million (2012: US$403 million) and other US$105 million (2012: US$154 million).

(ii) Includes inter-segment revenue of US$86 million (2012: US$ nil million).

(iii) Capex in aggregate comprises Petroleum US$3,101 million growth and US$72 million other (2012: US$3,193 million growth and US$65 million other) and Potash US$287 million growth and US$9 million other (2012: US$381 million growth and US$ nil million other).

(iv) Includes US$138 million of Petroleum capitalised exploration (2012: US$32 million).

(v) Includes US$98 million of Petroleum exploration expenditure previously capitalised, written off as impaired (included in depreciation and amortisation) (2012: US$97 million).

(vi) Includes an expense of US$115 million incurred in November 2013 related to the closure of the UK pension plan.

(vii) Includes Macedon, Pyrenees, Stybarrow, Neptune, Minerva, Angostura, Genesis, Pakistan, divisional activities, business development and ceased and sold operations. Also includes the Caesar oil pipeline and the Cleopatra gas pipeline which are equity accounted investments and are reported on a proportionate consolidation basis (with the exception of net operating assets).

(viii) Includes an unrealised gain of US$3 million related to Angostura embedded derivative (2012: US$9 million unrealised loss).

(ix) Includes closed mining and smelting operations in Canada and the United States.

(x) Includes statutory adjustments for the Caesar oil pipeline and the Cleopatra gas pipeline to reconcile the proportionately consolidated business total to the statutory result.

Copper

Total copper production increased by six per cent in the December 2013 half year to 843 thousand tonnes. Escondida copper production increased by seven per cent to 564 thousand tonnes as several productivity initiatives supported increased mill throughput and recoveries, which more than offset lower ore grades. Record half year copper production at Antamina also contributed to the strong result as the operation benefited from record mining and milling throughput, along with higher average ore grades.

Underlying EBIT for the December 2013 half year decreased by US$200 million to US$2.9 billion. A stronger US dollar increased Underlying EBIT by US$242 million, although this was more than offset by lower average realised prices which reduced Underlying EBIT by US$658 million, net of price linked costs. The major contributor to this variance was a seven per cent decline in the average realised price of copper to US$3.36 per pound. Volume related productivity initiatives increased Underlying EBIT by US$180 million during the period.

At 31 December 2013, the Group had 437,749 tonnes of outstanding copper sales that were revalued at a weighted average price of US$3.33 per pound. The final price of these sales will be determined over the remainder of the 2014 financial year. In addition, 385,721 tonnes of copper sales from the 2013 financial year were subject to a finalisation adjustment in the period. Provisional pricing and finalisation adjustments increased Underlying EBIT by US$196 million in the December 2013 half year (December 2012 half year: US$67 million increase).

In October 2013, BHP Billiton completed the sale of its Pinto Valley mining operation and the associated San Manuel Arizona Railroad Company to Capstone Mining Corp. for US$653 million, after working capital adjustments.

During the period, BHP Billiton announced an investment of US$3.4 billion to construct a desalination facility which will deliver sustainable water supply to Escondida over the long term. Escondida Organic Growth Project 1 and Oxide Leach Area Project are expected to maintain Escondida's copper production at an elevated level for the remainder of this decade. All three projects remain on schedule and budget.

Total copper production guidance for the 2014 financial year remains unchanged at 1.7 million tonnes. Production in the second half is expected to be weighted towards the June 2014 quarter. Escondida remains on track to produce approximately 1.1 million tonnes in the 2014 financial year, before increasing to approximately 1.3 million tonnes in the 2015 financial year. Full year copper volumes at Antamina, Spence and Olympic Dam are expected to remain at a similar level to the 2013 financial year. Planned maintenance is expected to impact the Olympic Dam smelter in the second half of the 2014 financial year.

Financial information for the Copper business for the half years ended December 2013 and December 2012 is presented below.

(i) Capex in aggregate comprises US$1,389 million growth and US$633 million other (2012: US$1,062 million growth and US$727 million other).

(ii) Escondida is consolidated under IFRS 10 and reported on a 100 per cent basis.

(iii) Includes Spence and Cerro Colorado.

(iv) Antamina and Resolution are equity accounted investments and are reported on a proportionate consolidation basis (with the exception of net operating assets).

(v) Predominantly comprises divisional activities, greenfield exploration, business development and ceased and sold operations. Includes Pinto Valley and Resolution. Pinto Valley was sold effective 11 October 2013.

(vi) Includes statutory adjustments for Antamina and Resolution to reconcile the proportionately consolidated business total to the statutory result. Statutory Underlying EBIT includes net finance costs of US$3 million and taxation expense of US$178 million (2012: net finance costs of US$ nil million and taxation expense of US$187 million).

Iron Ore

Iron ore production increased by 19 per cent in the December 2013 half year to a record 98 million tonnes as WAIO production rose to an annualised rate of 216 million tonnes (100 per cent basis). This record result reflected strong operating performance, the early delivery of production from Jimblebar and a series of volume enhancing productivity initiatives, which included increased utilisation for a number of relocatable crushers installed at our operating mines. Samarco's three pellet plants continued to operate at capacity during the period.

Underlying EBIT for the December 2013 half year increased by US$1.7 billion to US$6.5 billion. Volume growth associated with the ramp up of the Jimblebar mine and other recently completed major projects increased Underlying EBIT by US$490 million. In addition, productivity led volume efficiencies increased Underlying EBIT by another US$302 million as several debottlenecking initiatives raised the overall capacity of critical components within our supply chain. This disciplined approach contributed to a five million tonne per annum (100 per cent basis) increase in our WAIO production guidance during the period. The uplift in high margin sales volumes led to a meaningful increase in shareholder value at an incrementally higher unit cost. As a result of this decision and an increase in strip ratio, WAIO unit cash costs, excluding freight and royalty charges of US$625 million and US$744 million, respectively, increased marginally from the second half of the 2013 financial year. A US$177 million increase in depreciation and amortisation during the period reflected the progressive ramp up of several major projects.

The combination of a 10 per cent increase in the average realised price of iron ore to US$112 per tonne (FOB) and a weaker Australian dollar increased Underlying EBIT by US$1.3 billion, net of price linked costs. Our realised price reflects the average index price one month prior to the month of shipment, adjusted for product characteristics such as iron and moisture content.

Our WAIO business achieved a number of major milestones during the period. The Jimblebar Mine Expansion delivered first production, six months ahead of its original schedule, and the WAIO Port Blending and Rail Yard Facilities project handled first ore. The ramp up of Jimblebar phase one capacity to 35 mpta (100 per cent basis) is expected to be completed by the end of the 2015 financial year.

During the period, BHP Billiton approved an investment of US$301 million (BHP Billiton share) to replace two shiploaders at WAIO's Nelson Point operations in Port Hedland. The two new shiploaders will increase the reliability of our inner harbour port facilities and create additional port capacity that will be utilised as a series of debottlenecking initiatives increase the capacity of our WAIO supply chain.

Total iron ore production guidance for the 2014 financial year remains unchanged at 192 million tonnes. Our WAIO business continues to perform strongly, however we have maintained production guidance of 212 million tonnes (100 per cent basis) for the 2014 financial year as the wet season in northern Australia represents a key risk. Longer term, a low cost option to expand Jimblebar to 55 mtpa (100 per cent basis) and the broader debottlenecking of the supply chain are expected to underpin further capital efficient growth in capacity to approximately 260 mtpa to 270 mtpa (100 per cent basis).

Financial information for the Iron Ore business for the half years ended December 2013 and December 2012 is presented below.

(i) Includes inter-segment revenue of US$73 million (2012: US$29 million).

(ii) Capex in aggregate comprises US$1,292 million growth and US$36 million other (2012: US$3,026 million growth and US$104 million other).

(iii) Includes US$21 million capitalised exploration (2012: US$88 million).

(iv) Samarco is an equity accounted investment and is reported on a proportionate consolidation basis (with the exception of net operating assets).

(v) Predominantly comprises divisional activities, business development and ceased and sold operations.

(vi) Includes Boodarie Iron sales of contracted gas purchases and a US$6 million mark to market gain on an embedded derivative (2012: US$6 million gain).

(vii) Includes statutory adjustments for Samarco to reconcile the proportionately consolidated business total to the statutory result. Statutory Underlying EBIT includes net finance costs of US$64 million and taxation expense of US$81 million (2012: net finance costs of US$11 million and taxation expense of US$131 million).

Coal

Metallurgical coal production increased by 22 per cent in the December 2013 half year to a record 22 million tonnes. A significant increase in productivity, which culminated in record production at South Walker Creek, Saraji and Poitrel, underpinned record production and sales volumes at Queensland Coal during the period. Conversely, an extended outage at Dendrobium and a scheduled longwall move at West Cliff in the September 2013 quarter resulted in a 13 per cent decline in Illawarra Coal production in the December 2013 half year. Operations at Illawarra Coal are expected to return to normal before the end of the March 2014 quarter.

Energy coal production of 37 million tonnes was in line with the December 2012 half year. Record half year production at both New South Wales Energy Coal and Cerrejon Coal offset the impact of industrial action, lower yields and adverse weather conditions at BECSA.

Underlying EBIT for the December 2013 half year increased by US$431 million to US$510 million. The continued recovery in profitability was underpinned by productivity led volume and cost efficiencies, which increased Underlying EBIT by US$779 million. In this context, the productive capacity of Queensland Coal continues to be tested and the resultant increase in volumes, and our disciplined focus on contractor and maintenance costs, has significantly improved the profitability of the operation. In this regard, BHP Billiton Mitsubishi Alliance mine site, Australian dollar unit cash costs declined by a substantial 25 per cent during the period. A weaker Australian dollar and South African rand increased Underlying EBIT by a further US$404 million, however this was more than offset by an 18 per cent and 10 per cent fall in the average realised price of hard coking coal and weak coking coal, respectively, and an 11 per cent fall in the average realised price of energy coal. In total, lower prices reduced Underlying EBIT by US$611 million, net of price linked costs.

During the period, BHP Billiton completed the sale of the Navajo mine to the Navajo Transitional Energy Company (NTEC), effective 30 December 2013. As BHP Billiton will retain control of the mine until full consideration is received from NTEC, production and financial results for Navajo mine will continue to be reported by the Group.

The Caval Ridge mine development is on schedule for first production in the first half of the 2014 calendar year with the ramp up to phase one capacity of 5.5 million tonnes of premium hard coking coal expected by the end of the 2015 financial year.

Our Queensland Coal business continues to perform strongly, however we have retained total metallurgical coal production guidance of 41 million tonnes for the 2014 financial year given the general uncertainty that exists as we enter the wet season. Energy coal production guidance for the 2014 financial year remains unchanged at 73 million tonnes.

Financial information for the Coal business for the half years ended December 2013 and December 2012 is presented below.

(i) Capex in aggregate comprises US$887 million growth and US$365 million other (2012: US$1,303 million growth and US$501 million other).

(ii) Cerrejon, Newcastle Coal Infrastructure Group, Port Kembla Coal Terminal and Richards Bay Coal Terminal are equity accounted investments and are reported on a proportionate consolidation basis (with the exception of net operating assets).

(iii) Predominantly comprises divisional activities and greenfield projects.

(iv) Includes statutory adjustments for Cerrejon, Newcastle Coal Infrastructure Group, Port Kembla Coal Terminal and Richards Bay Coal Terminal to reconcile the proportionately consolidated business total to the statutory result. Statutory Underlying EBIT includes net finance income of US$2 million and taxation expense of US$43 million (2012: net finance income of US$1 million and taxation expense of US$46 million).

Aluminium, Manganese and Nickel

Alumina production increased by eight per cent in the December 2013 half year to a record 2.6 million tonnes. The Efficiency and Growth project at Worsley reached nameplate capacity and the Alumar refinery achieved record production. Aluminium production increased by eight per cent to 612 thousand tonnes as Hillside delivered a half year production record and strong performance was achieved at our other Southern African smelters.

Manganese ore production was in line with the December 2012 half year as improved performance at Hotazel was offset by lower recoveries at GEMCO. Manganese alloy volumes increased by seven per cent from the December 2012 half year which was affected by the temporary suspension of operations at TEMCO.

Nickel production increased by nine per cent from the December 2012 half year which was affected by planned maintenance at the Nickel West Kalgoorlie smelter and Kwinana refinery.

Underlying EBIT for the December 2013 half year increased by US$256 million to US$148 million. This turnaround in performance reflects the action that our teams have taken to maximise the cash generating capacity of these lower margin operations. In this regard, cost efficiencies delivered another US$185 million increase in Underlying EBIT during the period and additional gains are being actively pursued. A stronger US dollar increased Underlying EBIT by a further US$298 million.

In contrast, weaker markets continued to present a challenge as lower average realised prices contributed to a US$306 million reduction in Underlying EBIT, net of price linked costs. More specifically, lower average realised prices for aluminium (down eight per cent to US$2,002 per tonne), nickel (down 17 per cent to US$13,615 per tonne) and manganese alloy (down 13 per cent to US$952 per tonne) were only partially offset by an increase in the average realised price of manganese ore (up four per cent to US$4.90 per dry metric tonne unit). The average realised price for alumina was in line with the prior period, at US$291 per tonne.

On 31 October 2013, production at Nickel West Leinster Perseverance underground mine was suspended following a significant seismic event. A subsequent review of the incident determined it was unsafe to resume operations. Mining at Rocky's Reward open cut mine, near Leinster, will provide a temporary alternative ore supply to our integrated business. Total saleable nickel production at Nickel West in the 2014 financial year is expected to be in line with the prior year, although the impact on production for the 2015 financial year continues to be assessed.

In January 2014, BHP Billiton commenced formal stakeholder consultation regarding the proposed cessation of aluminium smelting activities and associated services at Bayside. The cast house within the Bayside operation will be supplied by BHP Billiton's Hillside smelter in order to meet demand from local customers as we continue to assess its future.

Financial information for the Aluminium, Manganese and Nickel business for the half years ended December 2013 and December 2012 is presented below.

(i) Includes inter-segment revenue of US$5 million (2012: US$9 million).

(ii) Capex in aggregate comprises US$37 million growth and US$203 million other (2012: US$110 million growth and US$331 million other).

(iii) Capex includes US$ nil million of expenditure in relation to centralising offices (2012: US$4 million).

(iv) Excludes embedded finance lease arising from the Nickel West power purchase agreement of US$506 million (2012: US$ nil million).

(v) Includes US$3 million capitalised exploration (2012: US$3 million).

(vi) Predominantly comprises divisional activities and business development.

Group and unallocated items

Underlying EBIT expense of US$170 million for Group and unallocated items represented a US$106 million increase from the December 2012 half year, which benefited from a fair value adjustment to Group employee share awards and the partial release of a workers compensation provision.

The following notes explain the terms used throughout this profit release:

(1) Underlying attributable profit, Underlying EBIT and Underlying EBITDA are used to reflect the underlying performance of BHP Billiton. Underlying attributable profit is Attributable profit excluding any exceptional items. Underlying EBIT is earnings before net finance costs, taxation and any exceptional items. Underlying EBITDA is Underlying EBIT before depreciation, impairments and amortisation of US$4,136 million for the half year ended 31 December 2013 and US$3,459 million for the half year ended 31 December 2012. We believe that Underlying attributable profit, Underlying EBIT and Underlying EBITDA provide useful information, but should not be considered as an indication of, or alternative to, Attributable profit as an indicator of actual operating performance or as an alternative to cash flow as a measure of liquidity.

Underlying EBIT includes net finance costs and taxation expenses associated with equity accounted investments of US$367 million (2012: US$374 million). Underlying EBIT has not been adjusted for foreign exchange variances on balance sheet items gains of US$105 million (2012: losses of US$240 million) and unrealised losses on derivatives of US$100 million (2012: losses of US$9 million).

Underlying EBITDA includes depreciation and amortisation associated with equity accounted investments of US$134 million (2012: US$116 million).

(2) Non-IFRS measures are defined as follows:

· Underlying attributable profit - comprises Profit after taxation attributable to members of BHP Billiton Group less exceptional items as described in note 3 to the financial report.

· Underlying basic earnings per share - represents basic earnings per share excluding any exceptional items.

· Underlying EBITDA interest coverage - for the purpose of deriving interest coverage, net interest comprises Interest on bank loans and overdrafts, Interest on all other borrowings, Finance lease and hire purchase interest less Interest income.

· Underlying effective tax rate - comprises Total taxation expense excluding Royalty-related taxation, exceptional items and Exchange rate movements included in taxation expense divided by Profit before taxation and exceptional items.

· Underlying EBIT margin - comprises Underlying EBIT excluding third party profit from operations, divided by revenue excluding third party product revenue.

· Underlying EBITDA margin - comprises Underlying EBITDA excluding third party EBITDA, divided by revenue excluding third party product revenue.

· Underlying return on capital - represents net profit after tax, excluding exceptional items and net finance costs (after tax), divided by average capital employed. Capital employed is net assets less net debt.

· Free cash flow - comprises net operating cash flows less net investing cash flows.

· Net debt - comprises Interest bearing liabilities less Cash and cash equivalents.

· Net operating assets - represents operating assets net of operating liabilities and predominantly exclude cash balances, interest bearing liabilities and deferred tax balances.

(3) Represents annualised volume and/or cash cost efficiencies embedded within the December 2013 half year result relative to the baseline 2012 financial year. Volume efficiencies refer to volume increases, excluding volume increases from major capital projects, multiplied by the 2012 financial year EBIT margin. Cash cost efficiencies refer to the reduction in costs since the 2012 financial year, adjusted for the impact of volume, price linked costs, exchange rates, inflation, fuel and energy, non-cash costs, one-off items, ceased and sold operations and other items.

(4) Excludes capital investment associated with projects not yet in production, which comprises assets under construction and exploration and evaluation assets.

(5) Excludes proceeds from sale of property, plant and equipment; proceeds from financial assets; proceeds from divestment of subsidiaries, operations and joint operations, net of their cash; and proceeds from sale or partial sale of equity accounted investments.

(6) Represents consideration for the Jimblebar and Pinto Valley transactions.

(7) Represents the share of capital and exploration expenditure (on an accruals basis) attributable to BHP Billiton shareholders. Includes BHP Billiton proportionate share of equity accounted investments; excludes non-controlling interests and capitalised deferred stripping.

Forward looking statements

This release contains forward looking statements, including statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or divestment of certain operations or facilities (including associated costs); anticipated production or construction commencement dates; capital costs and scheduling; operating costs and shortages of materials and skilled employees; anticipated productive lives of projects, mines and facilities; provisions and contingent liabilities; tax and regulatory developments.

Forward looking statements can be identified by the use of terminology such as 'intend', 'aim', 'project', 'anticipate', 'estimate', 'plan', 'believe', 'expect', 'may', 'should', 'will', 'continue', 'annualised' or similar words. These statements discuss future expectations concerning the results of operations or financial condition, or provide other forward looking statements.

These forward looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release. Readers are cautioned not to put undue reliance on forward looking statements.

For example, our future revenues from our operations, projects or mines described in this release will be based, in part, upon the market price of the minerals, metals or petroleum produced, which may vary significantly from current levels. These variations, if materially adverse, may affect the timing or the feasibility of the development of a particular project, the expansion of certain facilities or mines, or the continuation of existing operations.

Other factors that may affect the actual construction or production commencement dates, costs or production output and anticipated lives of operations, mines or facilities include our ability to profitably produce and transport the minerals, petroleum and/or metals extracted to applicable markets; the impact of foreign currency exchange rates on the market prices of the minerals, petroleum or metals we produce; activities of government authorities in some of the countries where we are exploring or developing these projects, facilities or mines, including increases in taxes, changes in environmental and other regulations and political uncertainty; labour unrest; and other factors identified in the risk factors discussed in BHP Billiton's filings with the U.S. Securities and Exchange Commission (the "SEC") (including in Annual Reports on Form 20-F) which are available on the SEC's website at www.sec.gov.

Except as required by applicable regulations or by law, the Group does not undertake any obligation to publicly update or review any forward looking statements, whether as a result of new information or future events.

Non-IFRS financial information

BHP Billiton results are reported under International Financial Reporting Standards (IFRS) including Underlying EBIT and Underlying EBITDA which are used to measure segment performance. This release also includes certain non-IFRS measures including Underlying attributable profit, Underlying basic earnings per share, Underlying EBITDA interest coverage, Underlying effective tax rate, Underlying EBIT margin, Underlying EBITDA margin, Underlying return on capital, Free cash flow, Net debt and Net operating assets. These measures are used internally by management to assess the performance of our business, make decisions on the allocation of our resources and assess operational management. Non-IFRS measures have not been subject to audit or review and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.

No offer of securities

Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell BHP Billiton securities in any jurisdiction.

Reliance on third party information

The views expressed in this release contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This release should not be relied upon as a recommendation or forecast by BHP Billiton.

Further information on BHP Billiton can be found on our website: www.bhpbilliton.com

BHP Billiton Group

Financial Report

For the half year ended 31 December 2013

Contents

Consolidated Income Statement

for the half year ended 31 December 2013