Management's Discussion and Analysis (cont’d) The interest rates used to discount the estimated cash flows,  when applicable, are based on the government yield curve at  the reporting date plus an adequate credit spread and were  as follows: At year-end 2011, we had the following foreign exchange  “average rate forward” purchase contracts outstanding: Where the average noon-day exchange rate during the contract term  falls between the benefit and protection rates, no cash settlements  are exchanged between us and the intermediary If the average  noon-day exchange rate during the contract term is less than the  benefit rate, then on the contract settlement date, we would pay  the intermediary the difference in the rate times the notional dollar  value hedged If the average noon-day exchange rate during the  contract term is greater than the protection rate, then on the contract  settlement date, the intermediary would pay us the difference in  the rate times the notional dollar value hedged The benefit and  protection rates are the same for forward single rate contracts, while  forward average range contracts have a spread between the benefit  and protection rates With the exception of US$2.4 million average rate contracts  with maturities ranging between January 2013 and December  2013, all foreign exchange contracts have maturities that are  less than one year.  Prior to November 30, 2011, our U.S. subsidiary had an  interest rate swap agreement in place that converted  principal and interest payments from Canadian to U.S.  dollars and was used to hedge the foreign exchange exposure  on the 6.31% Series A note. The note and interest rate swap  had the same critical terms and the swap was valued at rates  prevailing as at the balance sheet date. Gains and losses on  the swap were included in other comprehensive income  and transferred to income to offset gains and losses on the  debt when recorded in income. As of November 30, 2011, in  anticipation of the Icelandic USA Acquisition and associated  refinancing, we extinguished the swap.  25 ANNUAL REPORT 2011 The single rate contracts at December 31, 2011 have rates  ranging from 0.9491 to 1.02823, with maturities ranging from  January 2012 to September 2012. At year-end, we had the following total foreign exchange  forward single rate contracts outstanding: We systematically enter into foreign exchange contracts,  with maturities of 15 months or less, with exceptions for  one customer who requires hedging at their request. We  use hedge accounting to account for these foreign exchange  contracts.  In fiscal 2011, we expensed $0.1 million (2010: $0.5 million)  and $0.2 million (2010: $0.2 million) of short-term and  long-term interest, respectively, relating to interest that was  calculated using the effective interest rate method relating to  its transaction fees on our borrowings.  AMORTIzED COST IMPACT On InTEREST ExPEnSE FORWARD ExCHAnGE COnTRACTS InTEREST RATES uSED FOR DETERMInInG FAIR VALuE Financial assets at  Financial  Items  fair value through  Loans and  liabilities at  accounted for Total carrying ( Amounts in $000s) profit and loss receivables amortized cost as hedges  amount Cash and cash equivalents   3,260  –  –  –  3,260  Accounts receivable   –  84,920  – – 84,920 Other financial assets   –  –  –  1,346  1,346 Bank loans   –  –  120,980  –  120,980 Accounts payable and accrued liabilities   – –  108,553  – 108,553 Provisions  –  –  675 –  522 Other financial liabilities   –  –  –  793 793 Long-term debt  – –  239,981  – 239,981 December 31, 2011 Weighted  Weighted  Total Average  Average  US Value Average rate forwards  Put Rate  Call Rate  In $000s Average rate  1.0019  1.0090 36,499,227 December 31 January 1  January 3 2011 2011  2010 Bank loans  3.10% 2.27%  1.56% Long-term debt  7.00% 2.30%  4.08% Capital lease obligations  5.90% 5.62%  5.66% Average rate forward purchase contracts: CASH FLOW HEDGE December 31, 2011 Sell  Receive CAD$  US$ Forward rate  5,327,982  5,294,465 As at December 31, 2011