XML 117 R21.htm IDEA: XBRL DOCUMENT
v2.4.0.6

Long-Term Debt | 12 Months Ended
--- | ---
Dec. 31, 2012
Long-Term Debt | 12. LONG-TERM DEBT Our outstanding long-term debt is as shown below.
|  | December 31, |  |  | December 31, |
|  | 2012 |  |  | 2011 |
(in thousands) |  |  |  |  |  |
FPU secured first mortgage bonds: |  |  |  |  |  |  |  |
9.57% bond, due May 1, 2018 |  | $ | 5,444 |  |  | $ | 6,348 |
10.03% bond, due May 1, 2018 |  |  | 2,994 |  |  |  | 3,492 |
9.08% bond, due June 1, 2022 |  |  | 7,962 |  |  |  | 7,958 |
Uncollateralized senior notes: |  |  |  |  |  |  |  |
7.83% note, due January 1, 2015 |  |  | 4,000 |  |  |  | 6,000 |
6.64% note, due October 31, 2017 |  |  | 13,636 |  |  |  | 16,363 |
5.50% note, due October 12, 2020 |  |  | 16,000 |  |  |  | 18,000 |
5.93% note, due October 31, 2023 |  |  | 30,000 |  |  |  | 30,000 |
5.68% note, due June 30, 2026 |  |  | 29,000 |  |  |  | 29,000 |
Convertible debentures: |  |  |  |  |  |  |  |
8.25% due March 1, 2014 |  |  | 942 |  |  |  | 1,134 |
Promissory note |  |  | 125 |  |  |  | 186 |
Total long-term debt |  |  | 110,103 |  |  |  | 118,481 |
Less: current maturities |  |  | (8,196 | ) |  |  | (8,196 | )
Total long-term debt, net of current maturities |  | $ | 101,907 |  |  | $ | 110,285 |
Annual maturities of consolidated long-term debt are as follows: $8,196 for 2013; $12,139 for 2014; $9,141 for 2015; $9,136 for 2016; $12,037 for 2017; and $59,510 thereafter. Secured First Mortgage Bonds FPU’s secured first mortgage bonds are guaranteed by Chesapeake and are secured by a lien covering all of FPU’s property. The 9.57 percent bond and 10.03 percent bond require annual sinking fund payments of $909,000 and $500,000, respectively. Uncollateralized Senior Notes On June 23, 2011, we issued $29.0 million of 5.68 percent unsecured senior notes to Metropolitan Life Insurance Company and New England Life Insurance Company, pursuant to an agreement we entered into with them on June 29, 2010. These notes require annual principal payments of $2.9 million beginning in the sixth year after the issuance. We used the proceeds to permanently finance the redemption of the 6.85 percent and 4.90 percent series of FPU first mortgage bonds. These redemptions occurred in January 2010 and were previously financed by Chesapeake’s short-term loan facilities. Under the same agreement, we may issue an additional $7.0 million of unsecured senior notes prior to May 3, 2013, at a rate ranging from 5.28 percent to 6.43 percent based on the timing of the issuance. These notes, if issued, will have similar covenants and default provisions as the senior notes issued in June 2011. Convertible Debentures The convertible debentures may be converted, at the option of the holder, into shares of our common stock at a conversion price of $17.01 per share. During 2012 and 2011, debentures totaling $187,000 and $181,000, respectively, were converted to stock. The debentures are also redeemable for cash at the option of the holder, subject to an annual non-cumulative maximum limitation of $200,000. In 2012 and 2011, debentures totaling $5,000 and $2,000, respectively, were redeemed for cash. Debt Covenants Indentures to our long-term debt contain various restrictions. The most stringent restrictions state that we must maintain equity of at least 40 percent of total capitalization, and the fixed charge coverage ratio must be at least 1.2 times. In connection with the merger, the uncollateralized senior notes were amended to include an additional covenant requiring us to maintain no more than a 20-percent ratio of secured and subsidiary long-term debt to consolidated tangible net worth by October 2011. Failure to comply with those covenants could result in accelerated due dates and/or termination of the uncollateralized senior note agreements. As of December 31, 2012, we are in compliance with all of our debt covenants. With the redemption of FPU’s 6.85 percent and 4.90 percent secured first mortgage bonds in January 2010, the additional covenant requiring us to maintain no more than a 20-percent ratio of secured and subsidiary long-term debt to consolidated tangible net worth was met. Each of Chesapeake’s uncollateralized senior notes contains a “Restricted Payments” covenant as defined in the note agreements. The most restrictive covenants of this type are included within the 7.83 percent Unsecured Senior Notes, due January 1, 2015. The covenant provides that we cannot pay or declare any dividends or make any other Restricted Payments in excess of the sum of $10.0 million, plus our consolidated net income accrued on and after January 1, 2001. As of December 31, 2012, the cumulative consolidated net income base was $185.3 million, offset by Restricted Payments of $103.0 million, leaving $82.3 million of cumulative net income free of restrictions. Each series of FPU’s first mortgage bonds contains a similar restriction that limits the payment of dividends by FPU. The most restrictive covenants of this type are included within the series that is due in 2022, which provides that FPU cannot make dividend or other restricted payments in excess of the sum of $2.5 million plus FPU’s consolidated net income accrued on and after January 1, 1992. As of December 31, 2012, FPU’s cumulative net income base was $85.1 million, offset by restricted payments of $37.6 million, leaving $47.5 million of cumulative net income for FPU free of restrictions pursuant to this covenant. The dividend restrictions by FPU’s first mortgage bonds resulted in approximately $54.2 million of the net assets of our consolidated subsidiaries being restricted at December 31, 2012. This represents approximately 21 percent of our consolidated net assets. Other than the dividend restrictions by FPU’s first mortgage bonds, there are no legal, contractual or regulatory restrictions on the net assets of our subsidiaries for the purposes of determining the disclosure of parent-only financial statements.

X
- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration