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Note 11 - Business Segments and Significant Customers | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Segment Reporting Disclosure [Text Block] | Note 11: Business Segments and Significant Customers We discover, acquire, develop, produce, and market concentrates and doré containing silver, gold, lead and zinc. Our products consist of both metal concentrates, which we sell to custom smelters and brokers, and unrefined bullion bars (doré), which may be sold as doré or further refined before sale to precious metals traders. We are currently organized and managed in four segments, which represent our operating units: the Greens Creek unit, the Lucky Friday unit, the Casa Berardi unit, and the San Sebastian unit. The San Sebastian unit, a historic operating property for Hecla, resumed commercial production in the fourth quarter of 2015 and was added as a new reporting segment in 2015. General corporate activities not associated with operating units and their various exploration activities, as well as discontinued operations and idle properties, are presented as “other.” Interest expense, interest income and income taxes are considered general corporate items, and are not allocated to our segments. Sales of metal concentrates and metal products are made principally to custom smelters, brokers and metals traders. The percentage of sales contributed by each segment is reflected in the following table:
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Greens Creek |  |  | 48.2 | % |  |  | 40.3 | % |  |  | 51.4 | %
Lucky Friday |  |  | 3.8 | % |  |  | 14.7 | % |  |  | 14.9 | %
Casa Berardi |  |  | 33.3 | % |  |  | 27.4 | % |  |  | 33.7 | %
San Sebastian |  |  | 14.8 | % |  |  | 17.6 | % |  |  | — | %
|  |  | 100 | % |  |  | 100 | % |  |  | 100 | %
The tables below present information about reportable segments as of and for the years ended December 31, 2017, 2016 and 2015 (in thousands).
|  | 2017 |  |  | 2016 |  |  | 2015 |
Net sales to unaffiliated customers: |  |  |  |  |  |  |  |  |  |  |  |
Greens Creek |  | $ | 278,297 |  |  | $ | 260,446 |  |  | $ | 227,833 |
Lucky Friday |  |  | 21,555 |  |  |  | 94,479 |  |  |  | 66,302 |
Casa Berardi |  |  | 192,165 |  |  |  | 177,143 |  |  |  | 149,432 |
San Sebastian |  |  | 85,758 |  |  |  | 113,889 |  |  |  | — |
|  | $ | 577,775 |  |  | $ | 645,957 |  |  | $ | 443,567 |
Income (loss) from operations: |  |  |  |  |  |  |  |  |  |  |  |
Greens Creek |  | $ | 70,132 |  |  | $ | 65,125 |  |  | $ | 26,536 |
Lucky Friday |  |  | (16,037 | ) |  |  | 18,175 |  |  |  | 868 |
Casa Berardi |  |  | 4,003 |  |  |  | 16,336 |  |  |  | (1,557 | )
San Sebastian |  |  | 53,591 |  |  |  | 77,221 |  |  |  | (9,269 | )
Other |  |  | (47,046 | ) |  |  | (59,913 | ) |  |  | (52,189 | )
|  | $ | 64,643 |  |  | $ | 116,944 |  |  | $ | (35,611 | )
Capital additions (including non-cash additions): |  |  |  |  |  |  |  |  |  |  |  |
Greens Creek |  | $ | 35,255 |  |  | $ | 42,013 |  |  | $ | 45,962 |
Lucky Friday |  |  | 6,268 |  |  |  | 44,839 |  |  |  | 60,020 |
Casa Berardi |  |  | 51,327 |  |  |  | 67,577 |  |  |  | 35,302 |
San Sebastian |  |  | 9,994 |  |  |  | 6,026 |  |  |  | 4,623 |
Other |  |  | 2,908 |  |  |  | 21,344 |  |  |  | 14,809 |
|  | $ | 105,752 |  |  | $ | 181,799 |  |  | $ | 160,716 |
Depreciation, depletion and amortization: |  |  |  |  |  |  |  |  |  |  |  |
Greens Creek |  | $ | 56,328 |  |  | $ | 53,222 |  |  | $ | 57,742 |
Lucky Friday |  |  | 2,447 |  |  |  | 11,810 |  |  |  | 11,262 |
Casa Berardi |  |  | 54,594 |  |  |  | 47,312 |  |  |  | 43,674 |
San Sebastian |  |  | 2,693 |  |  |  | 3,782 |  |  |  | — |
|  | $ | 116,062 |  |  | $ | 116,126 |  |  | $ | 112,678 |
Other significant non-cash items: |  |  |  |  |  |  |  |  |  |  |  |
Greens Creek |  | $ | 2,685 |  |  | $ | 2,736 |  |  | $ | 2,886 |
Lucky Friday |  |  | 2,011 |  |  |  | 720 |  |  |  | 72 |
Casa Berardi |  |  | 653 |  |  |  | 1,259 |  |  |  | 2,229 |
San Sebastian |  |  | 468 |  |  |  | — |  |  |  | 13 |
Other |  |  | 51,182 |  |  |  | 11,135 |  |  |  | 66,004 |
|  | $ | 56,999 |  |  | $ | 15,850 |  |  | $ | 71,204 |
Identifiable assets: |  |  |  |  |  |  |  |  |  |  |  |
Greens Creek |  | $ | 671,960 |  |  | $ | 681,303 |  |  | $ | 698,265 |
Lucky Friday |  |  | 432,400 |  |  |  | 442,829 |  |  |  | 393,338 |
Casa Berardi |  |  | 804,505 |  |  |  | 806,044 |  |  |  | 779,423 |
San Sebastian |  |  | 62,198 |  |  |  | 33,608 |  |  |  | 22,238 |
Other |  |  | 393,894 |  |  |  | 407,893 |  |  |  | 328,661 |
|  | $ | 2,364,957 |  |  | $ | 2,371,677 |  |  | $ | 2,221,925 |
The following is sales information by geographic area based on the location of smelters and brokers (for concentrate shipments) and the location of parent companies (for doré sales to metals traders) for the years ended December 31, 2017, 2016 and 2015 (in thousands):
|  | 2017 |  |  | 2016 |  |  | 2015 |
United States |  | $ | 16,776 |  |  | $ | 22,499 |  |  | $ | 17,862 |
Canada |  |  | 358,663 |  |  |  | 437,621 |  |  |  | 275,771 |
Japan |  |  | 58,475 |  |  |  | 44,158 |  |  |  | 38,835 |
Korea |  |  | 80,183 |  |  |  | 116,687 |  |  |  | 66,293 |
China |  |  | 69,631 |  |  |  | 35,220 |  |  |  | 38,611 |
Other |  |  | — |  |  |  | 4,008 |  |  |  | — |
Total, excluding gains/losses on forward contracts |  | $ | 583,728 |  |  | $ | 660,193 |  |  | $ | 437,372 |
Sales of products for 2017 and 2016 include net losses of $6.0 million and $14.2 million, respectively, and 2015 included net gains of $6.2 million, on financially-settled forward contracts for silver, gold, lead and zinc contained in our concentrate sales. See Note 10 for more information. The following are our long-lived assets by geographic area as of December 31, 2017 and 2016 (in thousands):
|  | 2017 |  |  | 2016 |
United States |  | $ | 1,246,577 |  |  | $ | 1,261,488 |
Canada |  |  | 759,700 |  |  |  | 764,489 |
Mexico |  |  | 13,744 |  |  |  | 6,708 |
|  | $ | 2,020,021 |  |  | $ | 2,032,685 |
Sales from continuing operations to significant metals customers as a percentage of total sales were as follows for the years ended December 31, 2017, 2016 and 2015:
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Teck Metals Ltd. |  |  | 11.3 | % |  |  | 21.2 | % |  |  | 22.5 | %
Korea Zinc |  |  | 16.4 | % |  |  | 16.9 | % |  |  | 16.0 | %
Scotia |  |  | 24.9 | % |  |  | 24.5 | % |  |  | 5.6 | %
CIBC |  |  | 22.8 | % |  |  | 19.0 | % |  |  | 17.6 | %
Mitsui |  |  | 7.6 | % |  |  | 4.4 | % |  |  | 10.2 | %
The sales and income (loss) from operations amounts reported above include results from our Lucky Friday segment. The Lucky Friday mine is our only operation where some of our employees are subject to a collective bargaining agreement, and the most recent agreement expired on April 30, 2016. On February 19, 2017, the unionized employees voted against our contract offer. On March 13, 2017, the unionized employees went on strike and have been on strike since that time. Production at Lucky Friday was suspended from the start of the strike until July 2017, when limited production resumed. For 2017, suspension costs not related to production of $17.1 million, along with $4.2 million in non-cash depreciation expense, are reported in a separate line item on our consolidated statement of operations. In February 2018, we reached an agreement for binding third -party arbitration with the union, subject to ratification by the union membership. If the arbitration is approved by the union members in March 2018, three arbitrators will decide on one of the following to become effective for a period of three years: 1 ) the contract we submitted in December 2017 as our revised last, best and final offer or 2 ) the terms of the collective bargaining agreement that expired in April 2016, as modified by certain changes agreed to by the union and us. It is anticipated the arbitration would be completed in May 2018. If the arbitration is not approved by the union members, we will be back at the status quo. We cannot predict whether the union members will approve the arbitration, the outcome of the arbitration, or how long the strike will last or whether an agreement will be reached if the arbitration is not agreed to. As a result of the strike or other related events, operations at Lucky Friday could continue to be disrupted, which could adversely affect our financial condition and results of operations.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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