Quarterly report pursuant to Section 13 or 15(d)

Derivative Instruments and Hedging Transactions (Tables)

v3.19.1
Derivative Instruments and Hedging Transactions (Tables)
 9 Months Ended
Mar. 31, 2019
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 March 31, 2019 and June 30, 2018.
 
 
March 31, 2019
 
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
 
$
4,393

 
$
(1,356
)
 
$
—

 
$
3,037

 
$
2,602

 
$
(328
)
 
$
—

 
$
2,274

Option contracts
 
185

 
—

 
—

 
185

 
390

 
—

 
—

 
390

Future contracts
 
977

 
—

 
—

 
977

 
238

 
—

 
—

 
238

Forward contracts
 
2,053

 
(9
)
 
—

 
2,044

 
4,577

 
(84
)
 
—

 
4,493

 
 
$
7,608

 
$
(1,365
)
 
$
—

 
$
6,243

 
$
7,807

 
$
(412
)
 
$
—

 
$
7,395

Nettable derivative liabilities:
Open sale and purchase commitments
 
$
711

 
$
(471
)
 
$
—

 
$
240

 
$
17,132

 
$
(647
)
 
$
—

 
$
16,485

Margin accounts
 
6,657

 
—

 
(4,874
)
 
1,783

 
5,988

 
—

 
(2,184
)
 
3,804

Liability of price protection programs
 
84

 
—

 
—

 
84

 
168

 
—

 
—

 
168

Future contracts
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
 
$
7,452

 
$
(471
)
 
$
(4,874
)
 
$
2,107

 
$
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 March 31, 2019 and June 30, 2018.
 
 
March 31, 2019
 
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
 
$
4,393

 
$
(1,356
)
 
$
—

 
$
3,037

 
$
2,602

 
$
(328
)
 
$
—

 
$
2,274

Option contracts
 
185

 
—

 
—

 
185

 
390

 
—

 
—

 
390

Future contracts
 
977

 
—

 
—

 
977

 
238

 
—

 
—

 
238

Forward contracts
 
2,053

 
(9
)
 
—

 
2,044

 
4,577

 
(84
)
 
—

 
4,493

 
 
$
7,608

 
$
(1,365
)
 
$
—

 
$
6,243

 
$
7,807

 
$
(412
)
 
$
—

 
$
7,395

Nettable derivative liabilities:
Open sale and purchase commitments
 
$
711

 
$
(471
)
 
$
—

 
$
240

 
$
17,132

 
$
(647
)
 
$
—

 
$
16,485

Margin accounts
 
6,657

 
—

 
(4,874
)
 
1,783

 
5,988

 
—

 
(2,184
)
 
3,804

Liability of price protection programs
 
84

 
—

 
—

 
84

 
168

 
—

 
—

 
168

Future contracts
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
 
$
7,452

 
$
(471
)
 
$
(4,874
)
 
$
2,107

 
$
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 and nine months ended March 31, 2019 and 2018.
in thousands
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
March 31, 2019
 
March 31, 2018
 
March 31, 2019
 
March 31, 2018
 
Gains (losses) on derivative instruments:
 
Unrealized gains on open future commodity and forward contracts and open sale and purchase commitments, net
 
$
27,069

 
$
15,041

 
$
15,579

 
$
5,038

 
Realized gains (losses) on future commodity contracts, net
 
1,085

 
(3,241
)
 
4,571

 
8,781

 
 
 
$
28,154

 
$
11,800

 
$
20,150

 
$
13,819

 
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 March 31, 2019 and at June 30, 2018.
in thousands
 
 
 
 
 
 
 
March 31, 2019
 
June 30, 2018
 
Inventory
 
$
266,419

 
$
280,116

 
Precious metals held under financing arrangements
 
212,622

 
262,566

 
 
 
479,041

 
542,682

 
 
 
 
 
 
 
Less unhedgeable inventory:
 
 
 
 
 
Commemorative coin inventory, held at lower of cost or market
 
(33
)
 
(99
)
 
Premium on metals position
 
(5,372
)
 
(3,530
)
 
Precious metal value not hedged
 
(5,405
)
 
(3,629
)
 
 
 
 
 
 
 
 
 
473,636

 
539,053

 
 
 
 
 
 
 
Commitments at market:
 
 

 
 

 
Open inventory purchase commitments
 
146,046

 
342,287

 
Open inventory sales commitments
 
(161,998
)
 
(138,022
)
 
Margin sale commitments
 
(6,657
)
 
(5,988
)
 
In-transit inventory no longer subject to market risk
 
(4,424
)
 
(1,060
)
 
Unhedgeable premiums on open commitment positions
 
1,178

 
541

 
Borrowed precious metals
 
(210,650
)
 
(280,346
)
 
Product financing arrangements
 
(65,723
)
 
(113,940
)
 
Advances on industrial metals
 
8,295

 
6,044

 
 
 
(293,933
)
 
(190,484
)
 
 
 
 
 
 
 
Precious metal subject to price risk
 
179,703

 
348,569

 
 
 
 
 
 
 
Precious metal subject to derivative financial instruments:
 
 
 
 
 
Precious metals forward contracts at market values
 
92,875

 
274,994

 
Precious metals futures contracts at market values
 
85,686

 
72,421

 
Total market value of derivative financial instruments
 
178,561

 
347,415

 
 
 
 
 
 
 
Net precious metals subject to commodity price risk
 
$
1,142

 
$
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
 
March 31, 2019
 
June 30, 2018
Foreign exchange forward contracts
 
$
2,489

 
$
4,130

Open sale and purchase commitment transactions, net
 
$
3,508

 
$
3,026

 
 
 
 
 
Schedule of outstanding commitments
As of March 31, 2019 and June 30, 2018, the Company had the following outstanding commitments and open forward and future contracts:
in thousands
 
 
 
 
 
 
 
March 31, 2019
 
June 30, 2018
 
Purchase commitments
 
$
146,046

 
$
342,287

 
Sales commitments
 
$
(161,998
)
 
$
(138,022
)
 
Margin sales commitments
 
$
(6,657
)
 
$
(5,988
)
 
Open forward contracts
 
$
92,875

 
$
274,994

 
Open futures contracts
 
$
85,686

 
$
72,421