160Tullow Oil plc 2011 Annual Report and AccountsNotes to the Group financial statements continued Year ended 31 December 2011 The Company is required to assess the carrying values of each of its investments in subsidiaries for impairment. The net assets of certain of the Company's subsidiaries are predominantly intangible exploration and evaluation (E&E) assets. Where facts and circumstances indicate that the carrying amount of an E&E asset held by a subsidiary may exceed its recoverable amount, by reference to the specific indicators of impairment of E&E assets, an impairment test of the asset is performed by the subsidiary undertaking and the asset is impaired by any difference between its carrying value and its recoverable amount. The recognition of such an impairment by a subsidiary is used by the Company as the primary basis for determining whether or not there are indications that the investment in the related subsidiary may also be impaired, and thus whether an impairment test of the investment carrying value needs to be performed. The results of exploration activities are inherently uncertain, and the assessment for impairment of E&E assets by the subsidiary, and that of the related investment by the Company, is judgemental. Note 2. Dividends 2011$m2010$mDeclared and paid during year Final dividend for 2010: 4 pence (2009: 4 pence) per ordinary share 79.2 51.6Interim dividend for 2011: 4 pence (2010: 2 pence) per ordinary share 35.0 27.6 Dividends paid 114.2 79.2 Proposed for approval by shareholders at the AGM Final dividend for 2011: 8 pence (2010: 4 pence) 113.354.9The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. Note 3. Deferred tax The Company has tax losses of $283.0 million (2010: $147.8 million) that are available indefinitely for offset against future non-ring-fence taxable profits in the Company. A deferred tax asset of $nil million (2010: $41.4 million) has been recognised in respect of these losses on the basis that the Company anticipates making non-ring-fence profits in the foreseeable future. Note 4. Debtors Amounts falling due within one year 2011$m2010$mOther debtors 2.2 2.9Due from subsidiary undertakings 2,939.82,346.3 2,942.02,349.2The amounts due from subsidiary undertakings include $2,609.6 million (2010: $2,118.5 million) that incurs interest at LIBOR plus 1.7%-2.7%. The remaining amounts due from subsidiaries accrue no interest. All amounts are repayable on demand. Note 5. Trade and other creditors Amounts falling due within one year 2011$m2010$mOther creditors 7.44.5Accruals 14.526.6Due to subsidiary undertakings 130.1- 152.031.1
161www.tullowoil.comFINANCIAL STATEMENTS5 Note 6. Bank loans 2011$m2010$mCurrent Short-term borrowings 217.8309.8 Non-current Term loans repayable - After one year but within two years 728.8192.5- After two years but within five years 2,129.31,697.5 2,858.11,890.0Company bank loans are stated net of unamortised arrangement fees of $85.3 million (2010: $81.3 million). Term loans and guarantees are secured by fixed and floating charges over the oil and gas assets (note 12) of the Group financial statements. Interest rate risk The interest rate profile of the Company's financial assets and liabilities at 31 December 2011 was as follows: $$mStg $m Other $mTotal $mFixed rate debt (291.6)- -(291.6)Floating rate debt (2,624.1)(160.2) -(2,784.3)Amounts due to subsidiaries at LIBOR + 1.7% (130.1)- -(130.1)Cash at bank at floating interest rate 8.30.1 7.115.5Amounts due from subsidiaries at LIBOR + 1.7% 2,223.5386.1 -2,609.6 Net cash/(debt) (814.0)226.0 7.1(580.9)The profile at 31 December 2010 for comparison purposes was as follows: $ $m Stg $mTotal $mFixed rate debt (386.4) (158.4)(544.8)Floating rate debt (1,655.0) -(1,655.0)Cash at bank at floating interest rate 20.6 2.723.3Amounts due from subsidiaries at LIBOR + 1.7% 2,118.5 -2,118.5 Net cash/(debt) 97.7 (155.7)(58.0)Cash at bank at floating interest rate consisted of deposits which earn interest at rates set in advance for periods ranging from overnight to one month by reference to market rates. Floating rate debt comprises bank borrowings at interest rates fixed in advance from overnight to three months at rates determined by US dollar LIBOR and sterling LIBOR. Fixed rate debt comprises bank borrowings at interest rates fixed in advance for periods greater than three months or bank borrowings where the interest rate has been fixed through interest rate hedging. The $3.5 billion Reserves Based Lending Facility incurs interest on outstanding debt at sterling or US dollar LIBOR plus an applicable margin. The outstanding debt is repayable in variable amounts (determined semi-annually) over the period to 31 December 2015, or such time as is determined by reference to the remaining reserves of the assets, whichever is earlier. The $650 million Revolving Credit Facility is repayable in full on 31 December 2014. The facility incurs interest on outstanding debt at US dollar LIBOR plus an applicable margin. At the end of December 2011, the headroom under the two facilities amounted to $826 million; $176 million under the $3.5 billion Reserves Based Lending Facility and $650 million under the Revolving Credit Facility. At the end of December 2010, the headroom under the two facilities amounted to $685 million; $175 million under the $2.5 billion Reserves Based Lending Facility and $510 million under the Revolving Credit Facility.