2011 Annual Report PDF - Tullow Oil plc

Notes to the Group financial statements continued
Year ended 31 December 2011
Note 19. Financial liabilities continued
The Group monitors capital on the basis of the net debt ratio, that is, the ratio of net debt to net debt plus equity. Net debt is
calculated as gross debt, as shown in the balance sheet, less cash and cash equivalents.
External borrowings 3,161.2 2,281.2 1,396.1
Less cash and cash equivalents (307.1) (338.3) (252.2)
2011
$m
2010
$m
2009
$m
Net debt 2,854.1 1,942.9 1,143.9
Equity 4,766.0 3,903.4 2,448.5
Net debt ratio 60% 50% 47%
The movement from 2010 is attributable to higher external borrowings during 2011, principally as a result of the Group’s
$2,057.5 million investment in development, appraisal and exploration activities and acquisitions which is partially offset
by operating cash flows.
Interest rate risk
The interest rate profile of the Group’s financial assets and liabilities, excluding trade and other receivables and trade and
other payables, at 31 December 2011 was as follows:
Cash at bank at floating interest rate 138.9 5.2 38.5 21.3 203.9
Cash at bank on which no interest is received 99.5 0.6 0.5 2.6 103.2
Fixed rate debt (291.6) – – – (291.6)
Floating rate debt (2,624.1) – (160.2) – (2,784.3)
US$
$m
Euro
$m
Stg
$m
Other
$m
Total
$m
The profile at 31 December 2010 for comparison purposes was as follows:
(2,677.3) 5.8 (121.2) 23.9 (2,768.8)
Cash at bank at floating interest rate 224.5 5.7 18.7 12.0 260.9
Cash at bank on which no interest is received 74.8 0.4 0.3 1.9 77.4
Fixed rate debt (386.4) – (158.4) – (544.8)
Floating rate debt (1,655.0) – – – (1,655.0)
US$
$m
Euro
$m
Stg
$m
Other
$m
Total
$m
The profile at 31 December 2009 for comparison purposes was as follows:
(1,742.1) 6.1 (139.4) 13.9 (1,861.5)
Cash at bank at floating interest rate 34.4 1.0 194.9 9.7 240.0
Cash at bank on which no interest is received – – 11.4 0.8 12.2
Fixed rate debt – – (544.8) – (544.8)
Floating rate debt (58.9) – (710.9) – (769.8)
US$
$m
Euro
$m
Stg
$m
Other
$m
Total
$m
(24.5) 1.0 (1,049.4) 10.5 (1,062.4)
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.
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Tullow Oil plc 2011 Annual Report and Accounts