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These excerpts taken from the ARP 10-K filed Feb 27, 2008. Recent
Accounting Pronouncements
On July 13, 2006, the FASB issued Interpretation
No. 48 (FIN 48) “Accounting for Uncertainty
in Income Taxes: an interpretation of FASB Statement
No. 109”. This interpretation clarifies the accounting
for uncertainty in income taxes recognized in an entity’s
financial statements in accordance with SFAS No. 109,
“Accounting for Income Taxes.” FIN 48 prescribes
a recognition threshold and measurement principles for financial
statement disclosure of tax positions taken or expected to be
taken on a tax return. The Company adopted the provision of this
interpretation effective January 1, 2007. The adoption of
FIN 48 did not have a material impact on the Company’s
consolidated financial position and results of operations. (See
Note 6 - “Income Taxes” to our consolidated
financial statements included in this report for further
discussion.)
On September 15, 2006, the FASB issued
SFAS No. 157,“Fair Value Measurements”.
SFAS No. 157 defines fair value, establishes a
framework for measuring fair value in generally accepted
accounting principles and expands disclosure about fair value
measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements,
the FASB having previously concluded in those accounting
pronouncements that fair value is the relevant measurement
attribute. Accordingly, this Statement does not require any new
fair value measurements. SFAS No. 157 is effective for
fiscal years beginning after December 15, 2007, or fiscal
year 2008 for the Company. The adoption of
SFAS No. 157 is not expected to have a material impact
on the Company’s results of operations or cash flows.
In February 2007, the FASB issued SFAS No. 159,
“The Fair Value Option for Financial Assets and Financial
Liabilities — Including an Amendment of FASB Statement
No. 115”. SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other
items at fair value. Unrealized gains and losses on items for
which the fair value option has been elected will be recognized
in earnings at each subsequent reporting date.
SFAS No. 159 is effective for financial statements
issued for fiscal years beginning after November 15, 2007,
which is the year beginning January 1, 2008 for the
Company. The adoption of SFAS No. 159 is not expected
to have a material impact on the Company’s results of
operations or cash flows.
In December 2007, the FASB issued SFAS No. 141R
(revised 2007), “Business Combinations”, which
replaces SFAS No 141. SFAS 141R establishes the
principles and requirements for how an acquirer:
(i) recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree; (ii) recognizes
and measures the goodwill acquired in the business combination
or a gain from a bargain purchase; and (iii) determines
what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the
business combination. SFAS 141R makes some significant
changes to existing accounting practices for acquisitions.
SFAS 141R is to be applied prospectively to business
combinations consummated on or after the beginning of the first
annual reporting period on or after December 15, 2008. We
are currently evaluating the impact SFAS 141R will have on
our future business combinations.
Our primary exposure to market risk is interest rate risk
associated with our debt instruments. We use both fixed and
variable rate debt as sources of financing.
As of December 31, 2007, we had $390.3 million of
total debt and capital lease obligations, of which
$297 million was bearing interest at variable rates
approximating 6.9% on a weighted average basis. A 1.0% change in
interest rates on our variable rate debt would have resulted in
interest expense fluctuating by approximately $2.6 million
during the year ended December 31, 2007.
On December 19, 2007, we entered into an interest rate swap
transaction (“Swap Transaction”) in order to hedge the
floating interest rate risk on our long term variable rate debt.
Under the terms of the Swap Transaction, we are required to make
quarterly fixed rate payments to the counterparty calculated
based on an initial notional amount of $271.6 million at a
fixed rate of 4.1375%, while the counterparty is obligated to
make quarterly floating rate payments to us based on the three
month LIBO rate. The notional amount of the interest rate swap
is scheduled to decline over the term of the term loan facility
consistent with the scheduled principal payments. The Swap
Transaction has an effective date of March 31, 2008 and a
termination date of December 6, 2012.
Table of Contents
The Swap Transaction qualifies for hedge accounting under
Statement of Financial Accounting Standards (SFAS) No. 133,
“Accounting for Derivative Instruments and Hedging
Activities”, as amended, and we do not anticipate that
changes in fair value will be subject to mark-to-market
accounting through earnings.
We have not, and do not plan to, enter into any derivative
financial instruments for trading or speculative purposes. As of
December 31, 2007, we had no other significant material
exposure to market risk, including foreign exchange risk and
commodity risks.
Our Financial Statements and the accompanying Notes that are
filed as part of this report are listed under
“Part IV, Item 15. Financial Statements Schedules
and Reports” and are set forth beginning on
page F-1
immediately following the signature pages of this report.
None
Recent Accounting Pronouncements On July 13, 2006, the FASB issued Interpretation No. 48 (FIN 48) “Accounting for Uncertainty in Income Taxes: an interpretation of FASB Statement No. 109”. This interpretation clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” FIN 48 prescribes a recognition threshold and measurement principles for financial statement disclosure of tax positions taken or expected to be taken on a tax return. The Company adopted the provision of this interpretation effective January 1, 2007. The adoption of FIN 48 did not have a material impact on the Company’s consolidated financial position and results of operations. (See Note 6 - “Income Taxes” to our consolidated financial statements included in this report for further discussion.) On September 15, 2006, the FASB issued SFAS No. 157,“Fair Value Measurements”. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. SFAS No. 157 is effective for fiscal years beginning after December 15, 2007, or fiscal year 2008 for the Company. The adoption of SFAS No. 157 is not expected to have a material impact on the Company’s results of operations or cash flows. In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115”. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be recognized in earnings at each subsequent reporting date. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, which is the year beginning January 1, 2008 for the Company. The adoption of SFAS No. 159 is not expected to have a material impact on the Company’s results of operations or cash flows. In December 2007, the FASB issued SFAS No. 141R (revised 2007), “Business Combinations”, which replaces SFAS No 141. SFAS 141R establishes the principles and requirements for how an acquirer: (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (ii) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (iii) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R makes some significant changes to existing accounting practices for acquisitions. SFAS 141R is to be applied prospectively to business combinations consummated on or after the beginning of the first annual reporting period on or after December 15, 2008. We are currently evaluating the impact SFAS 141R will have on our future business combinations.
Our primary exposure to market risk is interest rate risk associated with our debt instruments. We use both fixed and variable rate debt as sources of financing. As of December 31, 2007, we had $390.3 million of total debt and capital lease obligations, of which $297 million was bearing interest at variable rates approximating 6.9% on a weighted average basis. A 1.0% change in interest rates on our variable rate debt would have resulted in interest expense fluctuating by approximately $2.6 million during the year ended December 31, 2007. On December 19, 2007, we entered into an interest rate swap transaction (“Swap Transaction”) in order to hedge the floating interest rate risk on our long term variable rate debt. Under the terms of the Swap Transaction, we are required to make quarterly fixed rate payments to the counterparty calculated based on an initial notional amount of $271.6 million at a fixed rate of 4.1375%, while the counterparty is obligated to make quarterly floating rate payments to us based on the three month LIBO rate. The notional amount of the interest rate swap is scheduled to decline over the term of the term loan facility consistent with the scheduled principal payments. The Swap Transaction has an effective date of March 31, 2008 and a termination date of December 6, 2012.
Table of ContentsThe Swap Transaction qualifies for hedge accounting under Statement of Financial Accounting Standards (SFAS) No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as amended, and we do not anticipate that changes in fair value will be subject to mark-to-market accounting through earnings. We have not, and do not plan to, enter into any derivative financial instruments for trading or speculative purposes. As of December 31, 2007, we had no other significant material exposure to market risk, including foreign exchange risk and commodity risks.
Our Financial Statements and the accompanying Notes that are filed as part of this report are listed under “Part IV, Item 15. Financial Statements Schedules and Reports” and are set forth beginning on page F-1 immediately following the signature pages of this report.
None
This excerpt taken from the ARP 10-K filed Mar 1, 2007. Recent
Accounting Pronouncements
On July 13, 2006, the FASB issued Interpretation
No. 48 (FIN No. 48) “Accounting for
Uncertainty in Income Taxes: an interpretation of FASB Statement
No. 109.” This interpretation clarifies the accounting
for uncertainty in income taxes recognized in an entity’s
financial statements in accordance with SFAS No. 109,
“Accounting for Income Taxes.” FIN No. 48
prescribes a recognition threshold and measurement principles
for financial statement disclosure of tax positions taken or
expected to be taken on a tax return. This interpretation is
effective for fiscal years beginning after December 15,
2006, or fiscal year 2007 for the company. We are currently
completing our analysis of the impact of this new standard on
our consolidated financial statements.
On September 13, 2006, the Securities and Exchange
Commission (SEC) issued Staff Accounting Bulletin (SAB)
No. 108, Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year
Financial Statements, which provides interpretive guidance
on the consideration of the effects of prior year misstatements
in quantifying current year misstatements for the purpose of a
materiality assessment. SAB No. 108 is effective for
fiscal years ending after November 14, 2006, or fiscal year
2006 for the Company. Early application is encouraged, but not
required. We are currently assessing the impact, if any, the
adoption of SAB No. 108 will have on the
Company’s consolidated financial position and results of
operations. The adoption did not have a material impact on the
Company’s beginning retained earnings.
On September 15, 2006, the FASB issued
SFAS No. 157, Fair Value Measurements.
SFAS NO. 157 defines fair value, establishes a
framework for measuring fair value in generally accepted
accounting principles and expands disclosure about fair value
measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements,
the FASB having previously concluded in those accounting
pronouncements that fair value is the relevant measurement
attribute. Accordingly, this Statement does not require any new
fair value measurements. SFAS No. 157 is effective for
fiscal years beginning after December 15, 2007, or fiscal
year 2008 for the Company. The adoption of
SFAS No. 157 is not expected to have a material impact
on the Company’s financial position, results of operations
or cash flows.
Our primary exposure to market risk is interest rate risk
associated with our debt instruments. We use both fixed and
variable rate debt as sources of financing.
In March 2006, we entered into an interest rate collar agreement
effective as of December 23, 2006, with a fixed notional
amount of $76.7 million until December 23, 2007, which
then decreases to $67.0 million until termination of the
collar on December 23, 2008. The interest rate collar has a
cap strike three month LIBOR rate of 5.50% and a floor strike
three month LIBOR rate of 4.70%. At December 31, 2006, the
interest rule collar agreement had a negative fair value of
$97,254.
Table of Contents
As of December 31, 2006, we had $273.1 million of
total debt and capital lease obligations of which
$215.7 million was bearing interest at variable rates
approximating 7.1% on a weighted average basis. A 1.0% change in
interest rates on our variable rate debt would have resulted in
interest expense fluctuating by approximately $2.3 million
during the year ended December 31, 2006.
We have not, and do not plan to, enter into any derivative
financial instruments for trading or speculative purposes. As of
December 31, 2006, we had no other significant material
exposure to market risk, including foreign exchange risk and
commodity risks.
Our Financial Statements and the accompanying Notes that are
filed as part of this report are listed under
“PART IV, ITEM 15. Financial Statements Schedules
and Reports” and are set forth beginning on
page F-1
immediately following the signature pages of this report.
None
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