(1) Includes Prepaid expenses and other, and Other long-term assets
LIQUIDITY AND CAPITAL RESOURCES
The term liquidity refers to the speed with which a company's assets can be converted into cash, or its ability to do so, as well as cash on hand. Liquidity risk refers to the risk that we will encounter difficulty in meeting obligations associated with financial obligations that are settled by cash or another financial asset. Our liquidity risk may arise due to general day-to-day cash requirements and in the management of our assets, liabilities and capital resources. Liquidity risk is managed against our financial leverage to meet obligations and commitments in a balanced manner. For further information on our liquidity risk management, refer to Note 17 to the Financial Statements for the three months and year ended December 31, 2012.
Our debt capital structure is as follows:
December 31, December 31,($000s) 2012 2011----------------------------------------------------------------------------Use of Credit Facility:Amount drawn on Credit Facility 76,500 73,178Less: Cash on Hand (310) -Senior Unsecured Debentures 250,000 250,000Letters of credit 16,046 21,332----------------------------------------------------------------------------Total Debt 342,236 344,510Unused Credit Facility capacity 132,764 105,490----------------------------------------------------------------------------
We continue to focus on managing our working capital accounts while supporting our growth. Working capital at December 31, 2012, was $10.7 million (December 31, 2011 - $13.7 million). At current activity levels, working capital is expected to be sufficient to meet our ongoing commitments and operational requirements of the business. We continue to manage working capital well within our prescribed targets, commensurate with activity levels. For further information on credit risk management, please refer to Note 17 to the Financial Statements for the three months and year ended December 31, 2012.
DEBT RATINGS
DBRS Limited ("DBRS") and Moody's Investor Service, Inc. ("Moody's") provide a corporate and Senior Unsecured Debentures credit rating. On October 17, 2012, DBRS upgraded our issuer rating to BB from BB (low) and revised the trend to Stable from Positive. The rating change was attributable to our execution of the business plan, and a growing onsite contract business that is more stable with multi-year terms, strengthening our financial profile. DBRS has also upgraded the Senior Unsecured Debentures to BB from BB (low) with the trend being Stable. Moody's rating remains unchanged from November, 2010.
Category DBRS Moody's----------------------------------------------------------------------------Corporate Rating BB Ba3Senior Unsecured Debentures BB B1
SOURCES OF CASH
Our liquidity needs can be sourced in several ways including: Funds from operations, borrowings against or increases in our Credit Facility, new debt instruments, the issuance of securities from treasury, return of letters of credit or replacement of letters of credit with other types of financial security and proceeds from the sale of assets.
