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(Stated in thousands of dollars)
Three-month periods ended Years ended December 31, December 31, % % 2012 2011 Change 2012 2011 Change--------------------------------------------------------------------------------------------------------------------------------------------------------Gains on disposition of drilling equipment 575 1,859 (69) 2,727 5,589 (51)Foreign exchange losses (89) (906) (90) (1,267) (1,377) (8)Provision for bad debt (108) (173) (38) (15) (447) (97)Losses from the change in fair value of investment in equity securities - - - (490) - n.m.--------------------------------------------------------------------------------------------------------------------------------------------------------Other income 378 780 (52) 955 3,765 (75)--------------------------------------------------------------------------------------------------------------------------------------------------------
n.m. - not meaningful
For the three-month period and year ended December 31, 2012, PHX Energy realized gains on disposition of drilling equipment of $0.6 million (2011 - $1.9 million) and $2.7 million (2011 - $5.6 million), respectively. The dispositions of drilling equipment relate primarily to equipment lost in well bores that are uncontrollable in nature. The gain reported is net of any asset retirements that are made before the end of the equipment's useful life and self-insured down hole equipment losses, if any. Gains typically result from insurance programs undertaken whereby proceeds for the lost equipment are at current replacement values, which are higher than the respective equipment's book value. There were fewer occurrences of losses in the 2012-periods as compared to the corresponding 2011-periods. In addition, there were more occurrences of scrapped assets in the 2012-year.
Offsetting other income for the three-month period ended December 31, 2012 are foreign exchange losses of $0.1 million (2011 - $0.9 million) and a bad debt provision of $0.1 million (2011 - $0.2 million). For the year ended December 31, 2012, other expenses offsetting other income include foreign exchange losses of $1.3 million (2011 - $1.4 million), bad debt provisions of $15,000 (2011 - $0.4 million), and losses from the change in fair value of investment in equity securities of $0.5 million (2011 - nil).
For the year ended December 31, 2012, foreign exchange losses resulted mainly from fluctuations in the LEK-CDN and RUR-CDN exchange rates. Management has implemented strategies to mitigate this foreign exchange exposure in future periods.
For the year ended December 31, 2012, losses from the change in fair value of investment in equity securities relate to the investment in the publicly traded equity securities of RMS Systems Inc. ("RMS"), which has been designated as financial assets at fair value through profit or loss before October 22, 2012. As at October 22, 2012, RMS became an equity-accounted investee of PHX Energy.
(Stated in thousands of dollars)
Three-month periods ended Years ended December 31, December 31, 2012 2011 2012 2011--------------------------------------------------------------------------------------------------------------------------------------------------------Provision for income taxes 2,147 3,189 6,561 8,411--------------------------------------------------------------------------------------------------------------------------------------------------------
