128 Consolidated  Notes to the  Financial  Statements Note 53 – Financial instruments (a) Capital risk management 2012  $m 2011  $m Current borrowings 616.0  886.7  Non-current borrowings 3,696.0  284.5  Total borrowings 4,312.0  1,171.2  Adjustment for cross currency swap hedges and deferred borrowing costs 42.1  65.2  Adjusted total borrowings 4,354.1  1,236.4  Cash and cash equivalents (1,812.9) (753.1) Net debt 2,541.2  483.3  Total equity 7,132.9  6,341.5  Less: hedging reserve 19.4  (97.3) Adjusted equity 7,113.5  6,438.8  Net debt 2,541.2  483.3  Adjusted total capital 9,654.7  6,922.1  Gearing ratio 26.3% 7.0% 2012  $m 2011  $m Profit before net financing costs 201.4  819.1  Depreciation and amortisation 173.9  148.0  Finance income included in EBITDA 12.7  11.9  EBITDA 388.0  979.0  Significant expense items 211.7  44.3  Changes in fair value of financial instruments 304.6  (218.8) Operating EBITDA 904.3  804.5  Share of profits of associates and jointly controlled entities (16.8) (30.3) Dividends from equity accounted investments 26.7  24.3  Income tax paid (180.8) (0.7) Funds from operations (FFO) 733.4  797.8  Net financing costs 38.5  25.5  Finance income included in EBITDA 12.7  11.9  Finance costs capitalised 26.8  15.4  Unwinding of discounts on provisions (10.7) (11.4) Unwinding of discount on contingent consideration (0.2) – Net interest expense 67.1  41.4  FFO to interest expense cover (times) 10.9  19.3 FFO to interest expense cover is calculated as FFO divided by net interest expense. FFO is calculated as earnings before interest, tax,  depreciation and amortisation (EBITDA), less significant items, changes in fair value of derivative financial instruments, share of profits  of associates and jointly controlled entities using the equity method, plus dividends received and less income tax paid. Net interest  expense includes finance costs capitalised and excludes unwinding of discount on provisions. FFO to net interest expense cover at  the reporting date was as follows: The gearing ratio is calculated as net debt divided by adjusted total capital. Net debt is calculated as total borrowings, adjusted for cross  currency swap hedges and deferred borrowing costs, less cash and cash equivalents. Adjusted total capital is calculated as total equity  less the hedging reserve plus net debt. The gearing ratio at the reporting date was as follows:  The consolidated entity monitors capital on the basis of the gearing ratio and funds from operations (FFO) to interest expense cover. The capital structure of the consolidated entity consists of net debt (borrowings as detailed in Notes 26 and 30 offset by cash and cash  equivalents as detailed in Note 12) and total equity of the consolidated entity (comprising issued capital, reserves and retained earnings  as detailed in Notes 34, 35 and 36).  In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return  capital to shareholders, issue new shares or sell assets to reduce debt. The consolidated entity’s overall capital management strategy  remains unchanged from 2011. The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue  to provide returns for shareholders and benefits for other stakeholders and to maintain an appropriate capital structure of debt and equity.