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Accounting Standards Issued and Not Applied
In May 2011, the International Accounting Standards Board ("IASB") issued IFRS 9, Financial Instruments, which is effective for annual periods beginning on or after January 1, 2015, with early adoption permitted. IFRS 9 is not expected to have a material impact on amounts recorded in the financial statements of CPPI.
Further details of the new accounting Standard and potential impact on CPPI can be found in the Company's Annual Report for the year ended December 31, 2012.
2. Inventories
As at As at March 31, December 31,(millions of Canadian dollars) 2013 2012---------------------------------------------------------------------------Pulp $ 63.3 $ 59.4Paper 17.6 18.2Wood chips 7.4 10.9Materials and supplies 46.1 45.6--------------------------------------------------------------------------- $ 134.4 $ 134.1------------------------------------------------------------------------------------------------------------------------------------------------------
3. Operating Loans and Long-Term Debt
(a) Available Operating Loans
As at As at March 31, December 31,(millions of Canadian dollars) 2013 2012---------------------------------------------------------------------------Operating loan facility $ 110.0 $ 110.0Facility for BC Hydro letter of credit 7.5 7.5---------------------------------------------------------------------------Total operating loans 117.5 117.5Letters of credit (for general business purposes) (2.2) (1.7)BC Hydro letter of credit (7.5) (7.5)---------------------------------------------------------------------------Total available operating loans $ 107.8 $ 108.3------------------------------------------------------------------------------------------------------------------------------------------------------
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 addition, the 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 this facility is November 13, 2016.
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 March 31, 2013, the Company was in compliance with all covenants relating to its operating loans.
(b) Long-Term Debt
