Note 17 - Guarantor Subsidiaries

12 Months Ended

Dec. 31, 2013

Guarantor Subsidiaries [Abstract]

Guarantor Subsidiaries [Text Block]

Note 17:  Guarantor Subsidiaries

Presented below are Hecla Mining Company’s condensed consolidating financial statements as required by Rule 3-10 of Regulation S-X of the Securities Exchange Act of 1934, as amended, resulting from the guarantees by certain of our subsidiaries (the "Guarantors") of the $500 million aggregate principal amount of the Company's 6.875% Senior Notes due on May 1, 2021 (the "Notes", see Note 6 for more information). The Guarantors consist of the following of our 100%-owned subsidiaries: Hecla Limited; Silver Hunter Mining Company; Rio Grande Silver, Inc.; RHL Holdings, Inc.; Hecla MC Subsidiary, LLC; Hecla Silver Valley, Inc.; Burke Trading, Inc.; Hecla Alaska LLC; Hecla Greens Creek Mining Company; Hecla Admiralty Company; and Hecla Juneau Mining Company. We completed the offering of the Notes on April 21, 2013, and a related exchange offer for virtually identical notes registered with the SEC on January 3, 2014.

The condensed consolidating financial statements below have been prepared from our financial information on the same basis of accounting as the consolidated financial statements. Investments in the subsidiaries are accounted for under the equity method. Accordingly, the entries necessary to consolidate Hecla Mining Company and the Guarantors are reflected in the intercompany eliminations column. In the course of preparing consolidated financial statements, we eliminate the effects of various transactions conducted between our subsidiaries. While valid at an individual subsidiary level, such activities are eliminated in consolidation because, when taken as a whole, they do not represent business activity with third-party customers, vendors, and other parties. Examples of such eliminations include the following.

• Investments in subsidiaries. The acquisition of a company results in an investment on the records of the parent company and a contribution of capital on the records of the subsidiary. Such investments and capital contributions are eliminated in consolidation.

• Capital contributions. Other of our subsidiaries do not generate cash flow, and their cash requirements are routinely met with inter-company advances from their parent companies. On an annual basis, the boards of directors of such parent companies declare contributions of capital to their subsidiary companies, which increase the parent's investment and the subsidiaries' additional paid-in capital. In consolidation, investments in subsidiaries and related additional paid-in capital are eliminated.

• Deferred taxes. Our ability to realize deferred tax assets and liabilities is considered on a consolidated basis for subsidiaries within the United States, with all subsidiaries' estimated future taxable income contributing to the ability to realize all such assets and liabilities. However, when our subsidiaries are viewed independently, we use the separate return method to assess the realizability of each subsidiary's deferred tax assets and whether a valuation allowance is required against such deferred tax assets. In some instances, a parent company or subsidiary may possess deferred tax assets whose realization depends on the future taxable incomes of other subsidiaries on a consolidated-return basis, but would not be considered realizable if such parent or subsidiary filed on a separate stand-alone basis. In such a situation, a valuation allowance is assessed on that subsidiary's deferred tax assets, with the resulting adjustment reported in the eliminations column of the guarantor and parent's financial statements, as is the case in the financial statements set forth below. The separate return method can result in significant eliminations of deferred tax assets and liabilities and related income tax provisions and benefits. Non-current deferred tax asset balances are included in other non-current assets on the condensed consolidating balance sheets and make up a large portion of that item, particularly for the guarantor balances.

Condensed Consolidating Balance Sheets

	As of December 31, 2013
	Parent		Guarantor			Non-Guarantor			Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	126,271	$	40,009		$	45,895		$	—		$	212,175
Other current assets		4,795		75,083			33,129			18,453			131,460
Properties, plants, and equipment - net		803		1,052,102			738,696			—			1,791,601
Intercompany receivable (payable)		547,074		(131,599	)		(464,634	)		49,159			—
Investments in subsidiaries		1,176,293		—			—			(1,176,293	)		—
Other non-current assets		5,248		164,563			11,115			(84,043	)		96,883
Total assets	$	1,860,484	$	1,200,158		$	364,201		$	(1,192,724	)	$	2,232,119
Liabilities and Stockholders' Equity
Current liabilities	$	10,058	$	117,422		$	24,000		$	—		$	151,480
Long-term debt		490,726		14,292			40			—			505,058
Non-current portion of accrued reclamation		—		38,426			8,340			—			46,766
Non-current deferred tax liability		—		16,430			164,861			(16,431	)		164,860
Other non-current liabilities		33,281		4,043			212			—			37,536
Stockholders' equity		1,326,419		1,009,545			166,748			(1,176,293	)		1,326,419
Total liabilities and stockholders' equity	$	1,860,484	$	1,200,158		$	364,201		$	(1,192,724	)	$	2,232,119

	As of December 31, 2012
	Parent		Guarantor			Non-Guarantor			Eliminations			Consolidated
	(in thousands)
Assets
Cash and cash equivalents	$	132,266	$	57,075		$	1,643		$	—		$	190,984
Other current assets		7,399		65,658			766			18,091			91,914
Properties, plants, and equipment - net		—		991,476			5,183			—			996,659
Intercompany receivable (payable)		113,234		(64,893	)		(74,450	)		26,109			—
Investments in subsidiaries		918,526		—			—			(918,526	)		—
Other non-current assets		3,059		164,913			7,600			(76,839	)		98,733
Total assets	$	1,174,484	$	1,214,229		$	(59,258	)	$	(951,165	)	$	1,378,290
Liabilities and Stockholders' Equity
Current liabilities	$	3,726	$	121,221		$	1,016		$	(30,976	)	$	94,987
Long-term debt		—		11,875			60			—			11,935
Non-current portion of accrued reclamation		—		92,825			545			—			93,370
Other non-current liabilities		32,807		8,651			252			(1,663	)		40,047
Stockholders' equity		1,137,951		979,657			(61,131	)		(918,526	)		1,137,951
Total liabilities and stockholders' equity	$	1,174,484	$	1,214,229		$	(59,258	)	$	(951,165	)	$	1,378,290

Condensed Consolidating Statements of Operations

	Year Ended December 31, 2013
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
	(in thousands)
Revenues	$	3,044		$	304,423		$	75,122		$	—		$	382,589
Cost of sales		—			(179,491	)		(55,825	)		—			(235,316	)
Depreciation, depletion, amortization		—			(63,097	)		(18,030	)		—			(81,127	)
General and administrative		(14,441	)		(13,174	)		(1,310	)		—			(28,925	)
Exploration and pre-development		(576	)		(24,990	)		(12,084	)		—			(37,650	)
Gain on derivative contracts		17,979			—			—			—			17,979
Aurizon acquisition costs		(14,444	)		—			(11,953	)		—			(26,397	)
Equity in earnings of subsidiaries		(15,807	)		—			—			15,807			—
Other (expense) income		(885	)		1,345			(9,616	)		(16,922	)		(26,078	)
Income (loss) before income taxes		(25,130	)		25,016			(33,696	)		(1,115	)		(34,925	)
(Provision) benefit from income taxes		—			(14,171	)		7,044			16,922			9,795
Net income (loss)		(25,130	)		10,845			(26,652	)		15,807			(25,130	)
Preferred stock dividends		(552	)		—			—			—			(552	)
Income (loss) applicable to common stockholders		(25,682	)		10,845			(26,652	)		15,807			(25,682	)
Net income (loss)		(25,130	)		10,845			(26,652	)		15,807			(25,130	)
Changes in comprehensive income (loss)		(2,381	)		(7	)		(4,587	)		4,594			(2,381	)
Comprehensive income (loss)	$	(27,511	)	$	10,838		$	(31,239	)	$	20,401		$	(27,511	)

	Year Ended December 31, 2012
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
	(in thousands)
Revenues	$	(1,346	)	$	322,489		$	—		$	—		$	321,143
Cost of sales		—			(134,105	)		—			—			(134,105	)
Depreciation, depletion, amortization		—			(43,522	)		—			—			(43,522	)
General and administrative		(11,519	)		(9,519	)		(215	)		—			(21,253	)
Exploration and pre-development		(1,262	)		(38,700	)		(9,776	)		—			(49,738	)
Loss on derivative contracts		(10,457	)		—			—			—			(10,457	)
Closed operations		—			(2,259	)		(2,393	)		—			(4,652	)
Equity in earnings of subsidiaries		21,246			—			—			(21,246	)		—
Other (expense) income		18,292			(27,747	)		(3,207	)		(20,921	)		(33,583	)
Income (loss) before income taxes		14,954			66,637			(15,591	)		(42,167	)		23,833
(Provision) benefit from income taxes		—			(29,802	)		—			20,923			(8,879	)
Net income (loss)		14,954			36,835			(15,591	)		(21,244	)		14,954
Preferred stock dividends		(552	)		—			—			—			(552	)
Income (loss) applicable to common stockholders		14,402			36,835			(15,591	)		(21,244	)		14,402
Net income (loss)		14,954			36,835			(15,591	)		(21,244	)		14,954
Changes in comprehensive income (loss)		(420	)		(911	)		1,438			(527	)		(420	)
Comprehensive income (loss)	$	14,534		$	35,924		$	(14,153	)	$	(21,771	)	$	14,534

	Year Ended December 31, 2011
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
	(in thousands)
Revenues	$	7,140		$	470,494		$	—		$	—		$	477,634
Cost of sales		—			(165,573	)		—			—			(165,573	)
Depreciation, depletion, amortization		—			(47,066	)		—			—			(47,066	)
General and administrative		(10,355	)		(7,909	)		(276	)		—			(18,540	)
Exploration and pre-development		(407	)		(23,548	)		(7,450	)		—			(31,405	)
Gain on derivative contracts		37,988			—			—			—			37,988
Closed operations		—			(8,961	)		(786	)		—			(9,747	)
Equity in earnings of subsidiaries		254,902			—			—			(254,902	)		—
Other (expense) income		(138,104	)		4,920			(3,391	)		126,426			(10,149	)
Income (loss) before income taxes		151,164			222,357			(11,903	)		(128,476	)		233,142
(Provision) benefit from income taxes		—			44,448			—			(126,426	)		(81,978	)
Net income (loss)		151,164			266,805			(11,903	)		(254,902	)		151,164
Preferred stock dividends		(552	)		—			—			—			(552	)
Income (loss) applicable to common stockholders		150,612			266,805			(11,903	)		(254,902	)		150,612
Net income (loss)		151,164			266,805			(11,903	)		(254,902	)		151,164
Changes in comprehensive income (loss)		(8,381	)		(3,089	)		(679	)		3,768			(8,381	)
Comprehensive income (loss)	$	142,783		$	263,716		$	(12,582	)	$	(251,134	)	$	142,783

Condensed Consolidating Statements of Cash Flows

	Year Ended December 31, 2013
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
	(in thousands)
Cash flows from operating activities	$	(9,958	)	$	17,940		$	(20,129	)	$	38,791		$	26,644
Cash flows from investing activities:
Additions to properties, plants, and equipment		(1,535	)		(107,893	)		(41,308	)		—			(150,736	)
Acquisition of Aurizon Mines Ltd.		(498,705	)		—			177,588			—			(321,117	)
Other investing activities, net		—			(11	)		(3,633	)		—			(3,644	)
Cash flows from financing activities:
Dividends paid to stockholders		(6,543	)		—			—			—			(6,543	)
Borrowings on debt		490,000			—			—			—			490,000
Payments on debt		—			(7,039	)		—			—			(7,039	)
Other financing activity		20,746			79,937			(63,361	)		(38,791	)		(1,469	)
Changes in cash and cash equivalents		(5,995	)		(17,066	)		49,157			—			26,096
Effect of exchange rate changes on cash		—			—			(4,905	)		—			(4,905	)
Beginning cash and cash equivalents		132,266			57,075			1,643			—			190,984
Ending cash and cash equivalents	$	126,271		$	40,009		$	45,895		$	—		$	212,175

	Year Ended December 31, 2012
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
	(in thousands)
Cash flows from operating activities	$	49,295		$	42,957		$	(14,296	)	$	(8,940	)	$	69,016
Cash flows from investing activities:
Additions to properties, plants, and equipment		(618	)		(107,425	)		(5,053	)		—			(113,096	)
Other investing activities, net		(48,815	)		891			(5,835	)		48,817			(4,942	)
Cash flows from financing activities:
Dividends paid to stockholders		(17,673	)		—			—			—			(17,673	)
Payments on debt		—			(5,878	)		(12	)		—			(5,890	)
Other financing activity		52,227			(41,903	)		26,659			(39,877	)		(2,894	)
Changes in cash and cash equivalents		34,416			(111,358	)		1,463			—			(75,479	)
Beginning cash and cash equivalents		97,850			168,433			180			—			266,463
Ending cash and cash equivalents	$	132,266		$	57,075		$	1,643		$	—		$	190,984

	Year Ended December 31, 2011
	Parent			Guarantor			Non-Guarantor			Eliminations			Consolidated
	(in thousands)
Cash flows from operating activities	$	105,740		$	79,166		$	(12,449	)	$	(102,566	)	$	69,891
Cash flows from investing activities:
Additions to properties, plants, and equipment		(2	)		(87,454	)		(90	)		—			(87,546	)
Other investing activities		(38,356	)		(1,659	)		1			47,741			7,727
Cash flows from financing activities:
Dividends paid to stockholders		(9,414	)		—			—			—			(9,414	)
Payments on debt		—			(2,938	)		—			—			(2,938	)
Other financing activity		(150,118	)		88,193			12,237			54,825			5,137
Changes in cash and cash equivalents		(92,150	)		75,308			(301	)		—			(17,143	)
Beginning cash and cash equivalents		190,000			93,125			481			—			283,606
Ending cash and cash equivalents	$	97,850		$	168,433		$	180		$	—		$	266,463