Quarterly report pursuant to Section 13 or 15(d)

Derivative Instruments and Hedging Transactions (Tables)

v3.8.0.1
Derivative Instruments and Hedging Transactions (Tables)
 3 Months Ended
Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Offsetting Assets
In the table below, the aggregate gross and net derivative receivables and payables balances are presented by contract type and type of hedge, as of September 30, 2017 and June 30, 2017.
 
 
September 30, 2017
 
June 30, 2017
 
 
 
 
 
in thousands
 
Gross Derivative
 
Amounts Netted
 
Cash Collateral Pledge
 
Net Derivative
 
Gross Derivative
 
Amounts Netted
 
Cash Collateral Pledge
 
Net Derivative
Nettable derivative assets:
Open sale and purchase commitments
 
$
3,259

 
$
(514
)
 
$
—

 
$
2,745

 
$
1,625

 
$
(694
)
 
$
—

 
$
931

Option contracts
 
214

 
—

 
—

 
214

 
—

 
—

 
—

 
—

Future contracts
 
7,263

 
—

 
—

 
7,263

 
1,273

 
—

 
—

 
1,273

Forward contracts
 
10,104

 
—

 
—

 
10,104

 
15,754

 
(371
)
 
—

 
15,383

 
 
$
20,840

 
$
(514
)
 
$
—

 
$
20,326

 
$
18,652

 
$
(1,065
)
 
$
—

 
$
17,587

Nettable derivative liabilities:
Open sale and purchase commitments
 
$
23,213

 
$
(2,999
)
 
$
—

 
$
20,214

 
$
31,568

 
$
(1,783
)
 
$
—

 
$
29,785

Margin accounts
 
7,206

 
—

 
(3,629
)
 
3,577

 
7,936

 
—

 
(3,139
)
 
4,797

Liability of price protection programs
 
198

 
—

 
—

 
198

 

 


 


 

 
 
$
30,617

 
$
(2,999
)
 
$
(3,629
)
 
$
23,989

 
$
39,504

 
$
(1,783
)
 
$
(3,139
)
 
$
34,582

Offsetting Liabilities
In the table below, the aggregate gross and net derivative receivables and payables balances are presented by contract type and type of hedge, as of September 30, 2017 and June 30, 2017.
 
 
September 30, 2017
 
June 30, 2017
 
 
 
 
 
in thousands
 
Gross Derivative
 
Amounts Netted
 
Cash Collateral Pledge
 
Net Derivative
 
Gross Derivative
 
Amounts Netted
 
Cash Collateral Pledge
 
Net Derivative
Nettable derivative assets:
Open sale and purchase commitments
 
$
3,259

 
$
(514
)
 
$
—

 
$
2,745

 
$
1,625

 
$
(694
)
 
$
—

 
$
931

Option contracts
 
214

 
—

 
—

 
214

 
—

 
—

 
—

 
—

Future contracts
 
7,263

 
—

 
—

 
7,263

 
1,273

 
—

 
—

 
1,273

Forward contracts
 
10,104

 
—

 
—

 
10,104

 
15,754

 
(371
)
 
—

 
15,383

 
 
$
20,840

 
$
(514
)
 
$
—

 
$
20,326

 
$
18,652

 
$
(1,065
)
 
$
—

 
$
17,587

Nettable derivative liabilities:
Open sale and purchase commitments
 
$
23,213

 
$
(2,999
)
 
$
—

 
$
20,214

 
$
31,568

 
$
(1,783
)
 
$
—

 
$
29,785

Margin accounts
 
7,206

 
—

 
(3,629
)
 
3,577

 
7,936

 
—

 
(3,139
)
 
4,797

Liability of price protection programs
 
198

 
—

 
—

 
198

 

 


 


 

 
 
$
30,617

 
$
(2,999
)
 
$
(3,629
)
 
$
23,989

 
$
39,504

 
$
(1,783
)
 
$
(3,139
)
 
$
34,582

Summary of net gains (losses) on derivative instruments
Realized gains and losses on contracts which are not physically settled are recognized at the net amount as component of cost of sales in the condensed consolidated statements of income.
Below is a summary of the net gains (losses) on derivative instruments for the three months ended September 30, 2017 and 2016.
in thousands
 
 
 
 
 
Three Months Ended September 30,
 
2017
 
2016
 
Gains (losses) on derivative instruments:
 
Unrealized losses on open future commodity and forward contracts and open sale and purchase commitments, net
 
$
(12,257
)
 
$
(18,150
)
 
Realized (losses) gains on future commodity contracts, net
 
(2,387
)
 
14,259

 
 
 
$
(14,644
)
 
$
(3,891
)
 
Schedule of market values of derivative instruments
The following table summarizes the results of our hedging activities, which shows the precious metal commodity inventory position, net of open sale and purchase commitments, that is subject to price risk as of September 30, 2017 and at June 30, 2017.
in thousands
 
 
 
 
 
 
 
September 30, 2017
 
June 30, 2017
 
Inventory
 
$
311,584

 
$
284,659

 
Less unhedgable inventory:
 
 
 
 
 
Commemorative coin inventory, held at lower of cost or market
 
(215
)
 
(40
)
 
Premium on metals position
 
(4,129
)
 
(4,088
)
 
Inventory value not hedged
 
(4,344
)
 
(4,128
)
 
 
 
 
 
 
 
Subtotal
 
307,240

 
280,531

 
Commitments at market:
 
 

 
 

 
Open inventory purchase commitments
 
567,595

 
587,687

 
Open inventory sales commitments
 
(97,564
)
 
(121,602
)
 
Margin sale commitments
 
(7,206
)
 
(7,936
)
 
In-transit inventory no longer subject to market risk
 
(3,085
)
 
(3,931
)
 
Unhedgable premiums on open commitment positions
 
500

 
495

 
Inventory borrowed from suppliers
 
(15,010
)
 
(5,625
)
 
Product financing arrangements
 
(124,864
)
 
(135,343
)
 
Advances on industrial metals
 
786

 
1,580

 
Inventory subject to price risk
 
628,392

 
595,856

 
 
 
 
 
 
 
Inventory subject to derivative financial instruments:
 
 
 
 
 
Precious metals forward contracts at market values
 
465,861

 
462,231

 
Precious metals futures contracts at market values
 
161,819

 
133,450

 
Total market value of derivative financial instruments
 
627,680

 
595,681

 
 
 
 
 
 
 
Net inventory subject to commodity price risk
 
$
712

 
$
175

 
Schedule of outstanding commitments
As of September 30, 2017 and June 30, 2017, the Company had the following outstanding commitments and open forward and future contracts:
in thousands
 
 
 
 
 
 
 
September 30, 2017
 
June 30, 2017
 
Purchase commitments
 
$
567,595

 
$
587,687

 
Sales commitments
 
(97,564
)
 
(121,602
)
 
Margin sales commitments
 
(7,206
)
 
(7,936
)
 
Open forward contracts
 
465,861

 
462,231

 
Open futures contracts
 
161,819

 
133,450