Related Party Transactions
|3 Months Ended|
Sep. 30, 2021
|Related Party Transactions [Abstract]|
|Related Party Transactions||
13. RELATED PARTY TRANSACTIONS
Related parties are entities that the Company controls or has the ability to significantly influence. Related parties also include persons who are affiliated with related entities or the Company who are in a position to influence corporate decisions (such as owners, executives, board members and their families). In the normal course of business, we enter into transactions with our related parties. Below is a list of related parties with whom we have had significant transactions during the presented periods:
Our related party transactions include (i) sales and purchases of precious metals (ii) financing activities (iii) repurchase arrangements, and (iv) hedging transactions. Below is a summary of our related party transactions. The amounts presented for each period were based on each entity’s related party status for that period.
Balances with Related Parties
Receivables and Payables, Net
As of September 30, 2021 and June 30, 2021, the Company had related party receivables and payables balances as set forth below:
As of September 30, 2021 and June 30, 2021, the aggregate carrying balance of the equity method investments was $29.5 million and $18.2 million, respectively. (See Note 9.)
Secured Loans Receivable
On September 19, 2017, CFC entered into a loan agreement with Stack's Bowers Galleries providing a secured line of credit, bearing interest at a competitive rate per annum, with a maximum borrowing line (subject to temporary increases) of $5.3 million. The loan is secured by precious metals and numismatic products. As of September 30, 2021 and June 30, 2021, the outstanding principal balance of this loan was $0.0 million and $0.0 million, respectively.
On March 1, 2018, CFC entered into a loan agreement with Stack's Bowers Galleries providing a secured line of credit on the wholesale value (i.e., the excess over the spot value of the metal), of numismatic products bearing interest at a competitive rate per annum, with a maximum borrowing line (subject to temporary increases) of $10.0 million. In addition to the annual rate of interest, the Company is entitled to receive a participation interest equal to 10% of the net profits realized by Stack's Bowers Galleries on the ultimate sale of the products. As of September 30, 2021 and June 30, 2021, the outstanding principal balance of this loan was $0.0 million and $3.0 million, respectively.
Activity with Related Parties
Sales and Purchases
During the three months ended September 30, 2021 and 2020, the Company made sales and purchases to various companies, which have been deemed to be related parties, as follows:
During the three months ended September 30, 2021 and 2020, the Company earned interest income related to loans made to Stack's Bowers and from financing arrangements (including repurchase agreements) with affiliated companies, as set forth below:
Equity method investments — Earnings
During the three months ended September 30, 2021 and 2020, the Company recorded its proportional share of its equity method investee's net income as other income that totaled $1.5 million and $4.1 million, respectively. As a result of our acquisition of JMB in March 2021, the Company no longer accounts for the subsidiary’s earnings under the equity method. For the three months ended September 30, 2021, the Company accounted for JMB’s earnings as a wholly owned subsidiary in the Company’s consolidated results.
During the three months ended September 30, 2021 and 2020, the Company earned royalty income related to one of CFC's secured lending agreements with Stack's Bowers that totaled $0.4 million and $0.4 million, respectively.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef