The terms of the Company's operating loan facility include interest payable at floating rates that vary depending on the ratio of net debt to operating earnings before interest, taxes, depreciation, amortization and certain other non-cash items, and is based on the lenders' Canadian prime rate, bankers acceptances, US dollar base rate or US dollar LIBOR rate, plus a margin. In the fourth quarter of 2012, CPLP entered into a new $110.0 million operating loan facility replacing its previous $40.0 million operating loan facility. The new facility has certain financial covenants that stipulate maximum net debt to total capitalization ratios and minimum net worth amounts based on shareholders' equity. The maturity date of the new facility is November 13, 2016.
During the third quarter of 2012, the Company terminated its $30.0 million bridge loan credit facility in conjunction with the completion of the Canadian Federal Government Green Transformation Program ("Program"). The facility was used to fund timing differences between expenditures and reimbursements for projects funded by the Program. The Company has a separate facility with a maturity date of November 30, 2013 to cover a $7.5 million standby letter of credit issued to BC Hydro.
As at December 31, 2012, the Company was in compliance with all covenants relating to its operating loans.
(b) Long-Term Debt
At December 31, 2012, the fair value of the Company's long-term debt, which was measured at its amortized cost of $109.4 million (US$110.0 million), was $113.6 million (2011-$117.4 million). The fair value was determined based on prevailing market rates for long-term debt with similar characteristics and risk profile.
4. Employee Future Benefits
The Company measures its accrued benefit obligations and the fair value of plan assets for accounting purposes as at December 31 of each year. At the end of each interim reporting period, the Company estimates movements in its accrued benefit liabilities based upon movements in discount rates and the rates of return on plan assets, as well as any significant changes to the plans. Adjustments are also made for payments made and current service and interest costs.
For the twelve months ended December 31, 2012, $16.6 million (before tax) was charged to other comprehensive income. The charge reflects a reduction in the discount rate used to value the plan obligations offset slightly by a higher than expected rate of return on plan assets for the period. For the three months ended December 31, 2012, the charge was $2.3 million (before tax). For the twelve months ended December 31, 2011, a pre-tax amount of $17.7 million was charged to other comprehensive income principally reflecting a decrease in the discount rate over the period. For the three months ended December 31, 2011 the pre-tax charge was $5.0 million.
During the fourth quarter of 2012, the Company amended the salaried post retirement benefit plans for certain CPPI employees and retirees. The amendments reduced the Company's retirement benefit obligation by $5.3 million (before tax). As a result of the plan amendments, CPPI recognized an accounting gain of $4.0 million (before tax) for vested past-service costs and deferred a gain of $1.3 million (before tax) for unvested past-service costs.
For the Company's single largest pension plan, a one percentage point increase in the rate of return on plan assets over the year would reduce the funded deficit by an estimated $0.8 million. A one percentage point increase in the discount rate used in calculating the actuarial estimate of future liabilities would reduce the funded deficit by an estimated $12.8 million.
Most Popular Stories
- SEO Traffic Lab Celebrate Wins at Digital Marketing Event 'Internet World 2013' in London
- Social Media Initiatives Should Follow Customers' Lead
- Apple CEO: Offshore Units Not a 'Tax Gimmick'
- U.S. Senate Accuses Apple of Large-scale Tax Avoidance
- UTEP Water Recycling Project Wins Venture Titles
- Marketo Makes a Mint in IPO: Stock Shoots Up More than 50 Percent
- Bieber Booed at Billboard Awards
- Crude Oil Up, Gasoline Down
- Austin Startup Compare Metrics Raises $3.5 Million for Expansion
- Why So Many Top 'Car Guys' Are Actually Women