XML 34 R23.htm IDEA: XBRL DOCUMENT
v3.24.1.u1

Derivatives | 3 Months Ended
--- | ---
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Derivatives Crude Oil and Petroleum Products Hedges We have exposure to commodity price changes related to our petroleum inventory and purchase commitments. We utilize derivative instruments (exchange-traded futures, options and swap contracts) to hedge our exposure to crude oil, fuel oil and other petroleum products. Our decision as to whether to designate derivative instruments as fair value hedges for accounting purposes relates to our expectations of the length of time we expect to have the commodity price exposure and our expectations as to whether the derivative contract will qualify as highly effective under accounting guidance in limiting our exposure to commodity price risk. We recognize any changes in the fair value of our derivative contracts as increases or decreases in “Onshore facilities and transportation product costs” in the Unaudited Condensed Consolidated Statements of Operations. The recognition of changes in fair value of the derivative contracts not designated as hedges for accounting purposes can occur in reporting periods that do not coincide with the recognition of gain or loss on the actual transaction being hedged. Therefore, we will, on occasion, report gains or losses in one period that will be partially offset by gains or losses in a future period when the hedged transaction is completed. We have designated certain crude oil futures contracts as hedges of crude oil inventory due to our expectation that these contracts will be highly effective in hedging our exposure to fluctuations in crude oil prices during the period that we expect to hold that inventory. We account for these derivative instruments as fair value hedges under the accounting guidance. Changes in the fair value of these derivative instruments designated as fair value hedges are used to offset related changes in the fair value of the hedged crude oil inventory. Any hedge ineffectiveness in these fair value hedges and any amounts excluded from effectiveness testing are recorded as a gain or loss within “Onshore facilities and transportation product costs” in the Unaudited Condensed Consolidated Statements of Operations. Natural Gas Hedges Our Alkali Business relies on natural gas to generate heat and electricity for operations. We use a combination of commodity price swap contracts, future purchase contracts, and option contracts to manage our exposure to fluctuations in natural gas prices. The swap contracts are used to fix the basis differential between NYMEX Henry Hub and NW Rocky Mountain posted prices. We do not designate these contracts as hedges for accounting purposes. We recognize any changes in fair value of natural gas derivative contracts as increases or decreases within “Soda and sulfur services operating costs” in the Unaudited Condensed Consolidated Statements of Operations. Forward Freight Hedges ANSAC is exposed to fluctuations in freight rates for vessels used to transport soda ash to our international customers. We use exchange-traded or over-the-counter futures, swaps and options to hedge future freight rates for forecasted shipments. We do not designate these contracts as hedges for accounting purposes. We recognize any changes in fair value of forward freight contracts as increases or decreases within “Soda and sulfur services operating costs” in the Unaudited Condensed Consolidated Statements of Operations. Bunker Fuel Hedges ANSAC is exposed to fluctuations in the price of bunker fuel consumed by vessels used to transport soda ash to our international customers. We use exchange-traded or over-the-counter futures, swaps and options to hedge bunker fuel prices for forecasted shipments. We do not designate these contracts as hedges for accounting purposes. We recognize any changes in fair value of bunker fuel contracts as increases or decreases within “Soda and sulfur services operating costs” in the Unaudited Condensed Consolidated Statements of Operations. Rail Fuel Surcharge Hedges ANSAC enters into rail transport agreements that require us to pay rail fuel surcharges based on changes in the U.S. On-Highway Diesel Fuel Price published by the U.S. Department of Energy (“DOE”). We use exchange-traded or over-the-counter futures, swaps and options to hedge fluctuations in the fuel price. We do not designate these contracts as hedges for accounting purposes. We recognize any changes in fair value of bunker fuel contracts as increases or decreases within “Soda and sulfur services operating costs” in the Unaudited Condensed Consolidated Statements of Operations. Balance Sheet Netting and Broker Margin Accounts Our accounting policy is to offset derivative assets and liabilities executed with the same counterparty when a master netting arrangement exists. Accordingly, we also offset fair value amounts recorded for our exchange-traded derivative contracts against required margin funding in “Current Assets - Other” in our Unaudited Condensed Consolidated Balance Sheets. Our exchange-traded derivatives are transacted through brokerage accounts and are subject to margin requirements as established by the respective exchange. Margin requirements are intended to mitigate a party’s exposure to market volatility and counterparty credit risk. On a daily basis, our account equity (consisting of the sum of our cash margin balance and the fair value of our open derivatives) is compared to our initial margin requirement resulting in the payment or return of variation margin. As of March 31, 2024, we had a net broker receivable of approximately $15.0 million (consisting of initial margin of $5.7 million increased by $9.3 million variation margin). As of December 31, 2023, we had a net broker receivable of approximately $10.9 million (consisting of initial margin of $5.7 million increased by $5.2 million of variation margin). At March 31, 2024 and December 31, 2023, none of our outstanding derivatives contained credit-risk related contingent features that would result in a material adverse impact to us upon any change in our credit ratings. Financial Statement Impacts Unrealized gains are subtracted from net income (loss) and unrealized losses are added to net income (loss) in determining cash flows from operating activities. To the extent that we have fair value hedges outstanding, the offsetting change recorded in the fair value of inventory is also eliminated from net income (loss) in determining cash flows from operating activities. Changes in the cash margin balance required to maintain our exchange-traded derivative contracts also affect cash flows from operating activities. Outstanding Derivatives At March 31, 2024, we had the following outstanding derivative contracts that were entered into to economically hedge inventory, fixed price purchase commitments or forecasted purchases.
|  | Sell (Short) Contracts |  | Buy (Long) Contracts
Designated as hedges under accounting rules: |  |  |  |
Crude oil futures: |  |  |  |
Contract volumes (1,000 Bbls) |  | 437 |  |  | 175 |
Weighted average contract price per Bbl |  | $ | 78.74 |  |  | $ | 80.03 |
Not qualifying or not designated as hedges under accounting rules: |  |  |  |
Crude oil futures: |  |  |  |
Contract volumes (1,000 Bbls) |  | 149 |  |  | 104 |
Weighted average contract price per Bbl |  | $ | 79.99 |  |  | $ | 80.82 |
Natural gas swaps: |  |  |  |
Contract volumes (10,000 MMBtu) |  | — |  |  | 1,074 |
Weighted average price differential per MMBtu |  | $ | — |  |  | $ | 0.54 |
Natural gas futures: |  |  |  |
Contract volumes (10,000 MMBtu) |  | 114 |  |  | 1,184 |
Weighted average contract price per MMBtu |  | $ | 1.77 |  |  | $ | 3.47 |
Natural gas options: |  |  |  |
Contract volumes (10,000 MMBtu) |  | 17 |  |  | — |
Weighted average premium received/paid |  | $ | 0.31 |  |  | $ | — |
Bunker fuel futures: |  |  |  |
Contract volumes (metric tons “MT”) |  | — |  |  | 54,500 |
Weighted average price per MT |  | $ | — |  |  | $ | 538.17 |
Bunker fuel swaps: |  |  |  |
Contract volumes (metric tons “MT”) |  | — |  |  | 4,500 |
Weighted average price per MT |  | $ | — |  |  | $ | 547.22 |
DOE diesel options: |  |  |  |
Contract volumes (1,000 Gal) |  | — |  |  | 2,750 |
Weighted average premium received/paid |  | $ | — |  |  | $ | 0.35 |
Fair Value of Derivative Assets and Liabilities The following tables reflect the estimated fair value position of our derivatives at March 31, 2024 and December 31, 2023:
| Unaudited Condensed Consolidated Balance Sheets Location |  | Fair Value
| March 31, 2024 |  | December 31, 2023
Asset Derivatives: |  |  |  |  |
Natural Gas Swap (undesignated hedge) | Current Assets - Accounts receivable - trade, net |  | $ | 4,957 |  |  | $ | 3,710 |
Commodity derivatives - futures and put and call options (undesignated hedges): |  |  |  |  |
Gross amount of recognized assets | Current Assets - Other(1) |  | $ | 4,073 |  |  | $ | 1,235 |
Gross amount offset in the Unaudited Condensed Consolidated Balance Sheets | Current Assets - Other(1) |  | (4,073) |  |  | (1,235) |
Net amount of assets presented in the Unaudited Condensed Consolidated Balance Sheets |  |  | $ | — |  |  | $ | — |
Commodity derivatives - futures (designated hedges): |  |  |  |  |
Gross amount of recognized assets | Current Assets - Other(1) |  | $ | 529 |  |  | $ | 716 |
Gross amount offset in the Unaudited Condensed Consolidated Balance Sheets | Current Assets - Other(1) |  | (529) |  |  | (716) |
Net amount of assets presented in the Unaudited Condensed Consolidated Balance Sheets |  |  | $ | — |  |  | $ | — |
Liability Derivatives: |  |  |  |  |
Natural Gas Swap (undesignated hedge) | Current Liabilities -Accrued liabilities |  | $ | (5,152) |  |  | $ | (5,536) |
Commodity derivatives - futures and put and call options (undesignated hedges): |  |  |  |  |
Gross amount of recognized liabilities | Current Assets - Other(1) |  | $ | (11,762) |  |  | $ | (12,384) |
Gross amount offset in the Unaudited Condensed Consolidated Balance Sheets | Current Assets - Other(1) |  | 11,762 |  |  | 12,384 |
Net amount of liabilities presented in the Unaudited Condensed Consolidated Balance Sheets |  |  | $ | — |  |  | $ | — |
Commodity derivatives - futures (designated hedges): |  |  |  |  |
Gross amount of recognized liabilities | Current Assets - Other(1) |  | $ | (1,856) |  |  | $ | (120) |
Gross amount offset in the Unaudited Condensed Consolidated Balance Sheets | Current Assets - Other(1) |  | 1,856 |  |  | 120 |
Net amount of liabilities presented in the Unaudited Condensed Consolidated Balance Sheets |  |  | $ | — |  |  | $ | — |
(1)As noted above, our exchange-traded derivatives are transacted through brokerage accounts and subject to margin requirements. We offset fair value amounts recorded for our exchange-traded derivative contracts against required margin deposits recorded in our Unaudited Condensed Consolidated Balance Sheets under “Current Assets - Other”. Effect on Operating Results
|  |  | Amount of Gain (Loss) Recognized in Income
| Unaudited Condensed Consolidated Statements of Operations Location |  | Three Months Ended March 31, |  |
|  | 2024 |  | 2023 |  |  |  |
Commodity derivatives - futures and call options: |  |  |  |  |  |  |  |  |
Contracts designated as hedges under accounting guidance | Onshore facilities and transportation product costs |  | $ | (2,918) |  |  | $ | 967 |  |  |  |  |
Contracts not considered hedges under accounting guidance | Onshore facilities and transportation product costs, Soda and sulfur services operating costs |  | 888 |  |  | (10,153) |  |  |  |  |
Total commodity derivatives |  |  | $ | (2,030) |  |  | $ | (9,186) |  |  |  |  |
Natural Gas Swap | Soda and sulfur services operating costs |  | $ | 3,010 |  |  | $ | 14,085 |  |  |  |  |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration