Annual report pursuant to Section 13 and 15(d)

Derivative Instruments and Hedging Transactions (Tables)

v3.10.0.1
Derivative Instruments and Hedging Transactions (Tables)
 12 Months Ended
Jun. 30, 2018
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 June 30, 2018 and June 30, 2017.
 
 
June 30, 2018
 
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
 
$
2,602

 
$
(328
)
 
$
—

 
$
2,274

 
$
1,625

 
$
(694
)
 
$
—

 
$
931

Option contracts
 
390

 
—

 
—

 
390

 
—

 
—

 
—

 
—

Future contracts
 
238

 
—

 
—

 
238

 
1,273

 
—

 
—

 
1,273

Forward contracts
 
4,577

 
(84
)
 
—

 
4,493

 
15,754

 
(371
)
 
—

 
15,383

 
 
$
7,807

 
$
(412
)
 
$
—

 
$
7,395

 
$
18,652

 
$
(1,065
)
 
$
—

 
$
17,587

Nettable derivative liabilities:
Open sale and purchase commitments
 
$
17,132

 
$
(647
)
 
$
—

 
$
16,485

 
$
31,568

 
$
(1,783
)
 
$
—

 
$
29,785

Margin accounts
 
5,988

 
—

 
(2,184
)
 
3,804

 
7,936

 
—

 
(3,139
)
 
4,797

Liability of price protection programs
 
168

 
—

 
—

 
168

 
—

 
—

 
—

 
—

 
 
$
23,288

 
$
(647
)
 
$
(2,184
)
 
$
20,457

 
$
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 June 30, 2018 and June 30, 2017.
 
 
June 30, 2018
 
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
 
$
2,602

 
$
(328
)
 
$
—

 
$
2,274

 
$
1,625

 
$
(694
)
 
$
—

 
$
931

Option contracts
 
390

 
—

 
—

 
390

 
—

 
—

 
—

 
—

Future contracts
 
238

 
—

 
—

 
238

 
1,273

 
—

 
—

 
1,273

Forward contracts
 
4,577

 
(84
)
 
—

 
4,493

 
15,754

 
(371
)
 
—

 
15,383

 
 
$
7,807

 
$
(412
)
 
$
—

 
$
7,395

 
$
18,652

 
$
(1,065
)
 
$
—

 
$
17,587

Nettable derivative liabilities:
Open sale and purchase commitments
 
$
17,132

 
$
(647
)
 
$
—

 
$
16,485

 
$
31,568

 
$
(1,783
)
 
$
—

 
$
29,785

Margin accounts
 
5,988

 
—

 
(2,184
)
 
3,804

 
7,936

 
—

 
(3,139
)
 
4,797

Liability of price protection programs
 
168

 
—

 
—

 
168

 
—

 
—

 
—

 
—

 
 
$
23,288

 
$
(647
)
 
$
(2,184
)
 
$
20,457

 
$
39,504

 
$
(1,783
)
 
$
(3,139
)
 
$
34,582

Summary of net gains (losses) on derivative instruments
.
Below is a summary of the net gains (losses) on derivative instruments for the years ended June 30, 2018 and 2017.
in thousands
 
 
 
 
 
Years Ended June 30,
 
2018
 
2017
 
Gains (losses) on derivative instruments:
 
Unrealized gains (losses) on open future commodity and forward contracts and open sale and purchase commitments, net
 
$
2,351

 
$
(17,738
)
 
Realized gains on future commodity contracts, net
 
13,271

 
27,392

 
 
 
$
15,622

 
$
9,654

 
Schedule of market values of derivative instruments
The market values (fair values) of the Company’s foreign exchange forward contracts and the net open sale and purchase commitment transactions, denominated in foreign currencies, outstanding are as follows:
in thousands
 
June 30, 2018
 
June 30, 2017
Foreign exchange forward contracts
 
$
4,130

 
$
2,213

Open sale and purchase commitment transactions, net
 
$
3,026

 
$
2,235

 
 
 
 
 
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 June 30, 2018 and at June 30, 2017.
in thousands
 
 
 
 
 
 
 
June 30, 2018
 
June 30, 2017
 
Inventory
 
$
280,116

 
$
284,659

 
Precious metals held under financing arrangements
 
262,566

 
—

 
 
 
542,682

 
284,659

 
 
 
 
 
 
 
Less unhedgeable inventory:
 
 
 
 
 
Commemorative coin inventory, held at lower of cost or market
 
(99
)
 
(40
)
 
Premium on metals position
 
(3,530
)
 
(4,088
)
 
Precious metal value not hedged
 
(3,629
)
 
(4,128
)
 
 
 
 
 
 
 
 
 
539,053

 
280,531

 
 
 
 
 
 
 
Commitments at market:
 
 

 
 

 
Open inventory purchase commitments
 
342,287

 
587,687

 
Open inventory sales commitments
 
(138,022
)
 
(121,602
)
 
Margin sale commitments
 
(5,988
)
 
(7,936
)
 
In-transit inventory no longer subject to market risk
 
(1,060
)
 
(3,931
)
 
Unhedgeable premiums on open commitment positions
 
541

 
495

 
Borrowed precious metals
 
(280,346
)
 
(5,625
)
 
Product financing arrangements
 
(113,940
)
 
(135,343
)
 
Advances on industrial metals
 
6,044

 
1,580

 
 
 
(190,484
)
 
315,325

 
 
 
 
 
 
 
Precious metal subject to price risk
 
348,569

 
595,856

 
 
 
 
 
 
 
Precious metal subject to derivative financial instruments:
 
 
 
 
 
Precious metals forward contracts at market values
 
274,994

 
462,231

 
Precious metals futures contracts at market values
 
72,421

 
133,450

 
Total market value of derivative financial instruments
 
347,415

 
595,681

 
 
 
 
 
 
 
Net precious metals subject to commodity price risk
 
$
1,154

 
$
175

 
Schedule of outstanding commitments
As of June 30, 2018 and June 30, 2017, the Company had the following outstanding commitments and open forward and future contracts:
in thousands
 
 
 
 
 
 
 
June 30, 2018
 
June 30, 2017
 
Purchase commitments
 
$
342,287

 
$
587,687

 
Sales commitments
 
$
(138,022
)
 
$
(121,602
)
 
Margin sales commitments
 
$
(5,988
)
 
$
(7,936
)
 
Open forward contracts
 
$
274,994

 
$
462,231

 
Open futures contracts
 
$
72,421

 
$
133,450