In addition to Superior's significant assumptions detailed above, refer to "Risk Factors to Superior" for a detailed review of Superior's significant business risks.
Liquidity and Capital Resources
Superior's revolving syndicated bank facility (Credit Facility), term loans and finance lease obligations (collectively Borrowing) before deferred financing fees totaled $639.6 million as at December 31, 2012, a decrease of $122.5 million from December 31, 2011. The decrease in Borrowing was primarily due to due to additional cash flows retained as result of reducing the monthly dividend on November 2, 2011, lower accounts receivables in the Canadian propane distribution segment and higher cash flow from operating activities offset in part by finance lease repayments, net capital expenditures and the $49.9 million redemption of 5.75% convertible unsecured subordinated debentures.
On March 28, 2012, Superior completed an extension of its Credit Facility with eight lenders and reduced the size of the facility from $615 million to $570 million. The Credit Facility matures on June 27, 2015 and can be expanded to $750 million. The Credit Facility was reduced to reflect Superior's anticipated credit requirements as a result of Superior's ongoing debt reduction plan. Financial covenant ratios were unchanged with consolidated secured debt to consolidated EBITDA ratio and a consolidated debt to consolidated EBITDA ratio of 3.0x and 5.0x, respectively. See "Summary of Cash Flow" for details on Superior's sources and uses of cash.
As at December 31, 2012, Debentures (before deferred issue costs) issued by Superior totaled $541.5 million which was $49.9 million lower than the balance as at December 31, 2011 due to the redemption of the 5.75% convertible unsecured subordinated debentures during the third quarter, see Redemptions below for further details. See Note 12 to the unaudited condensed consolidated financial statements for additional details on Superior's Debentures.
On August 1, 2012 Superior completed the previously announced redemption of the remaining $49.9 million principal of its previously issued 5.75% convertible subordinated debentures (2012 Debentures) due December 31, 2012, using funds from its Credit Facility. The 2012 Debentures were redeemed, in accordance with their terms, at the redemption price of $1,000 in cash per $1,000 principal plus accrued and unpaid interest thereon up to the redemption date, being $1,005.0411 per $1,000 principal.
On November 30, 2012, Superior announced that it provided notice that it will redeem $50 million principal amount of its previously issued 5.85% convertible subordinated debentures due October 31, 2015 on January 3, 2013. As previously announced, Superior will use proceeds from its bank facility to fund the redemption of the 2015 Debentures. The 5.85% convertible subordinated debentures will, in accordance with their terms, be redeemed at the redemption price of $1,000 in cash per $1,000 principal amount of 2015 Debentures plus accrued and unpaid interest up to but excluding the redemption date. The record date for the partial redemption is December 31, 2012.
As at December 31, 2012, approximately $205.5 million was available under the Credit Facility which Superior considers sufficient to meet its expected net working capital, capital expenditure and refinancing requirements.
Consolidated net working capital was $287.8 million as at December 31, 2012, a decrease of $89.5 million from net working capital of $377.3 million as at December 31, 2011. The decrease was primarily due to increased cash collections of accounts receivable within the Canadian propane distribution segment offset in part by higher inventory at U.S. refined fuels due a key supplier exiting the refinery business and warmer than expected weather. Lower net working capital at Construction Products Distribution was due to continued effort at optimizing net working capital as part of the segment's supply chain management review. Superior's net working capital requirements are financed from revolving term bank credit facilities.
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