Quarterly report pursuant to Section 13 or 15(d)

Derivative Instruments and Hedging Transactions (Tables)

v3.10.0.1
Derivative Instruments and Hedging Transactions (Tables)
3 Months Ended
Sep. 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 September 30, 2018 and June 30, 2018.
 
 
September 30, 2018
 
June 30, 2018
 
 
 
 
 
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
 
$
3,144

 
$
(1,163
)
 
$

 
$
1,981

 
$
2,602

 
$
(328
)
 
$

 
$
2,274

Option contracts
 
392

 

 

 
392

 
390

 

 

 
390

Future contracts
 
140

 

 

 
140

 
238

 

 

 
238

Forward contracts
 
193

 

 

 
193

 
4,577

 
(84
)
 

 
4,493

 
 
$
3,869

 
$
(1,163
)
 
$

 
$
2,706

 
$
7,807

 
$
(412
)
 
$

 
$
7,395

Nettable derivative liabilities:
Open sale and purchase commitments
 
$
25,875

 
$
(387
)
 
$

 
$
25,488

 
$
17,132

 
$
(647
)
 
$

 
$
16,485

Margin accounts
 
5,629

 

 
(1,901
)
 
3,728

 
5,988

 

 
(2,184
)
 
3,804

Liability of price protection programs
 
116

 

 

 
116

 
168

 

 

 
168

Future contracts
 
2,163

 

 

 
2,163

 

 

 

 

Forward contracts
 
5,216

 
(737
)
 

 
4,479

 

 

 

 

 
 
$
38,999

 
$
(1,124
)
 
$
(1,901
)
 
$
35,974

 
$
23,288

 
$
(647
)
 
$
(2,184
)
 
$
20,457

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, 2018 and June 30, 2018.
 
 
September 30, 2018
 
June 30, 2018
 
 
 
 
 
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
 
$
3,144

 
$
(1,163
)
 
$

 
$
1,981

 
$
2,602

 
$
(328
)
 
$

 
$
2,274

Option contracts
 
392

 

 

 
392

 
390

 

 

 
390

Future contracts
 
140

 

 

 
140

 
238

 

 

 
238

Forward contracts
 
193

 

 

 
193

 
4,577

 
(84
)
 

 
4,493

 
 
$
3,869

 
$
(1,163
)
 
$

 
$
2,706

 
$
7,807

 
$
(412
)
 
$

 
$
7,395

Nettable derivative liabilities:
Open sale and purchase commitments
 
$
25,875

 
$
(387
)
 
$

 
$
25,488

 
$
17,132

 
$
(647
)
 
$

 
$
16,485

Margin accounts
 
5,629

 

 
(1,901
)
 
3,728

 
5,988

 

 
(2,184
)
 
3,804

Liability of price protection programs
 
116

 

 

 
116

 
168

 

 

 
168

Future contracts
 
2,163

 

 

 
2,163

 

 

 

 

Forward contracts
 
5,216

 
(737
)
 

 
4,479

 

 

 

 

 
 
$
38,999

 
$
(1,124
)
 
$
(1,901
)
 
$
35,974

 
$
23,288

 
$
(647
)
 
$
(2,184
)
 
$
20,457

Summary of net gains (losses) on derivative instruments
.
Below is a summary of the net gains (losses) on derivative instruments for the three months ended September 30, 2018 and 2017.
in thousands
 
 
 
 
 
Three Months Ended September 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
 
$
(19,898
)
 
$
12,257

 
Realized gains on future commodity contracts, net
 
4,765

 
2,387

 
 
 
$
(15,133
)
 
$
14,644

 
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, 2018 and at June 30, 2018.
in thousands
 
 
 
 
 
 
 
September 30, 2018
 
June 30, 2018
 
Inventory
 
$
289,805

 
$
280,116

 
Precious metals held under financing arrangements
 
232,476

 
262,566

 
 
 
522,281

 
542,682

 
 
 
 
 
 
 
Less unhedgeable inventory:
 
 
 
 
 
Commemorative coin inventory, held at lower of cost or market
 
(86
)
 
(99
)
 
Premium on metals position
 
(3,970
)
 
(3,530
)
 
Precious metal value not hedged
 
(4,056
)
 
(3,629
)
 
 
 
 
 
 
 
 
 
518,225

 
539,053

 
 
 
 
 
 
 
Commitments at market:
 
 

 
 

 
Open inventory purchase commitments
 
264,037

 
342,287

 
Open inventory sales commitments
 
(215,464
)
 
(138,022
)
 
Margin sale commitments
 
(5,674
)
 
(5,988
)
 
In-transit inventory no longer subject to market risk
 
(1,334
)
 
(1,060
)
 
Unhedgeable premiums on open commitment positions
 
910

 
541

 
Borrowed precious metals
 
(227,198
)
 
(280,346
)
 
Product financing arrangements
 
(53,126
)
 
(113,940
)
 
Advances on industrial metals
 
7,489

 
6,044

 
 
 
(230,360
)
 
(190,484
)
 
 
 
 
 
 
 
Precious metal subject to price risk
 
287,865

 
348,569

 
 
 
 
 
 
 
Precious metal subject to derivative financial instruments:
 
 
 
 
 
Precious metals forward contracts at market values
 
197,419

 
274,994

 
Precious metals futures contracts at market values
 
90,828

 
72,421

 
Total market value of derivative financial instruments
 
288,247

 
347,415

 
 
 
 
 
 
 
Net precious metals subject to commodity price risk
 
$
(382
)
 
$
1,154

 
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
 
September 30, 2018
 
June 30, 2018
Foreign exchange forward contracts
 
$
4,104

 
$
4,130

Open sale and purchase commitment transactions, net
 
$
6,271

 
$
3,026

 
 
 
 
 
Schedule of outstanding commitments
As of September 30, 2018 and June 30, 2018, the Company had the following outstanding commitments and open forward and future contracts:
in thousands
 
 
 
 
 
 
 
September 30, 2018
 
June 30, 2018
 
Purchase commitments
 
$
264,037

 
$
342,287

 
Sales commitments
 
$
(215,464
)
 
$
(138,022
)
 
Margin sales commitments
 
$
(5,674
)
 
$
(5,988
)
 
Open forward contracts
 
$
197,419

 
$
274,994

 
Open futures contracts
 
$
90,828

 
$
72,421