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13. Segmented information:
The Company manages its business as a single operating segment, solid wood. The Company purchases and harvests logs which are then manufactured into lumber products at the Company's sawmills, or sold. Substantially all of the Company's operations are located in British Columbia, Canada and the U.S. Pacific Northwest, U.S.A.
The Company's sales to both foreign and domestic markets are as follows:
-------------------------------------------------------------------------------------------------------------------------------------------------------- 3 Months 3 Months Year ended Year ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2012 2011 2012 2011----------------------------------------------------------------------------Canada $ 51,496 $ 57,691 $ 234,750 $ 214,876United States 100,510 67,461 365,095 263,395China/Taiwan 31,712 27,030 103,982 137,421Japan 28,460 26,978 105,952 98,088Other export 10,222 9,530 39,417 44,465---------------------------------------------------------------------------- $ 222,400 $ 188,690 $ 849,196 $ 758,245--------------------------------------------------------------------------------------------------------------------------------------------------------Sales by product line are as follows:-------------------------------------------------------------------------------------------------------------------------------------------------------- 3 Months 3 Months Year ended Year ended Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2012 2011 2012 2011----------------------------------------------------------------------------Lumber $ 173,344 $ 133,635 $ 631,238 $ 538,367Logs 24,515 22,940 113,902 108,413Wood chips and other by products 15,849 17,538 69,376 68,355Ocean freight and other 8,692 14,577 34,680 43,110---------------------------------------------------------------------------- $ 222,400 $ 188,690 $ 849,196 $ 758,245--------------------------------------------------------------------------------------------------------------------------------------------------------
14. Financial instruments:
The Company employs financial instruments such as foreign currency forward and option contracts to manage exposure to fluctuations in foreign exchange rates and interest rate swaps to manage exposure to changes in interest rates. The Company does not expect any credit losses in the event of non-performance by counterparties as the counterparties are the Company's Canadian bankers, which are all highly rated.
As at December 31, 2012, the Company has outstanding foreign currency forward contract obligations to sell a maximum of US$2,725,000 at an average rate of CAD$0.99894 to the US$1.00, call option obligations to sell a maximum of US$3,000,000 at a rate of CAD$1.01 to the US$1.00 and put option obligations to buy a maximum of CAD$6,060,000 at a rate of CAD$1.01 to the US$1.00 during 2013. All foreign currency gains or losses to December 31, 2012 have been recognized in Other foreign exchange gain (loss) in Net earnings and the fair value of these foreign currency contracts, being an asset of $134,000 (measured based on Level 2 of the fair value hierarchy), has been recorded in Trade accounts receivable and other (December 31, 2011 - $283,000 asset recorded in Trade accounts receivable and other measured based on Level 2 of the fair value hierarchy).
