Prudent Financial Policy and Risk
Management
KE’s funding policy is targeted at ensuring that
sufficient facilities are available from diverse funding
sources to facilitate execution of business plan
New capital investment projects are evaluated on the
basis of NPV, investment efficiency and payback period
KE maintains a life of field, 3 year plan, detailed 12
month budgeting, allowing the company to tailor
development capex to cash availability on regular basis
No commodity price, interest rate or FX hedging
Sales and majority of expenses are in US$,
hence limited forex exposure
Major portion of funded debt constitutes fixed
interest rate indebtedness
New senior notes will contain standard high yield
covenant restrictions on dividends
Key Elements of Financial Policy
26
12.7x
128.9x
18.8x
28.3x
2011
2012
2013
1H 2014
0.15x
0.76x
0.79x
1.43x
2011
2012
2013
1H 2014
OCF
(1)
/ Interest Expense
Net Debt / OCF
(1)
(2)
(1) Operating cash flow before working capital adjustments. (2) Based on LTM OCF.
Significant Leverage Headroom
