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Related Party Transactions | 9 Months Ended
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Sep. 30, 2016
Related Party Transactions [Abstract] |
Related Party Transactions | Related Party Transactions Equity Method Investments The Company, directly or indirectly, holds investments in companies that are accounted for under the equity method. The Company’s equity in these entities is presented at cost plus its accumulated proportional share of income or loss, less any distributions it has received. On December 4, 2015, Lansing Trade Group, LLC ("LTG") agreed to the sale of equity to New Hope Liuhe Investment (USA), Inc., a U.S. subsidiary of the Chinese company, New Hope Liuhe Co. Ltd. New Hope paid cash for a 20 percent equity interest in LTG. The impact of this transaction to the Company was a reduction in total ownership share of LTG from approximately 38.5 percent to 31.0 percent which includes dilution from newly issued shares as well as a redemption of shares that occurred on a pro rata basis between the Company and the other existing owners of LTG. The Company recognized a total gain of $23.1 million on these transactions. Cash of $8.2 million was received of which $1.3 million was a return of capital and $6.7 million was a return on capital. The remainder was a book gain on cash received in excess of basis in the shares redeemed. The following table presents the Company’s investment balance in each of its equity method investees by entity:
(in thousands) | September 30, 2016 |  | December 31, 2015 |  | September 30, 2015
The Andersons Albion Ethanol LLC | $ | 36,661 |  |  | $ | 32,871 |  |  | $ | 31,409 |
The Andersons Clymers Ethanol LLC | 21,340 |  |  | 29,278 |  |  | 31,151 |
The Andersons Marathon Ethanol LLC | 23,812 |  |  | 31,255 |  |  | 30,066 |
Lansing Trade Group, LLC | 91,573 |  |  | 101,531 |  |  | 84,081 |
Thompsons Limited (a) | 47,494 |  |  | 43,964 |  |  | 43,803 |
Other | 4,234 |  |  | 3,208 |  |  | 2,697 |
Total | $ | 225,114 |  |  | $ | 242,107 |  |  | $ | 223,207 |
(a) Thompsons Limited and related U.S. operating company held by joint ventures The Company holds a majority interest (66%) in The Andersons Ethanol Investment LLC (“TAEI”). This consolidated entity holds a 50% interest in The Andersons Marathon Ethanol LLC (“TAME”). The noncontrolling interest in TAEI is attributed 34% of the gains and losses of TAME recorded by the Company in its equity in earnings of affiliates. The following table summarizes income (loss) earned from the Company’s equity method investments by entity:
|  |  | Three months ended September 30, |  | Nine months ended September 30,
(in thousands) | % Ownership at September 30, 2016 |  | 2016 |  | 2015 |  | 2016 |  | 2015
The Andersons Albion Ethanol LLC | 55% |  | $ | 2,528 |  |  | $ | 665 |  |  | $ | 3,857 |  |  | $ | 4,080 |
The Andersons Clymers Ethanol LLC | 38% |  | 2,706 |  |  | 1,454 |  |  | 3,516 |  |  | 4,922 |
The Andersons Marathon Ethanol LLC | 50% |  | 2,655 |  |  | 385 |  |  | 2,557 |  |  | 3,530 |
Lansing Trade Group, LLC | 33% (a) |  | 689 |  |  | 1,382 |  |  | (7,412 | ) |  | 9,290 |
Thompsons Limited (b) | 50% |  | (156 | ) |  | 17 |  |  | 1,271 |  |  | 1,385 |
Other | 5% - 34% |  | — |  |  | (58 | ) |  | — |  |  | 88 |
Total |  |  | $ | 8,422 |  |  | $ | 3,845 |  |  | $ | 3,789 |  |  | $ | 23,295 |
(a) This does not consider restricted management units which once vested will reduce the ownership percentage by approximately 0.8% (b) Thompsons Limited and related U.S. operating company held by joint ventures Total distributions received from unconsolidated affiliates were $24.1 million and $20.8 million for the nine months ended September 30, 2016 and September 30, 2015. In the third quarter of 2016, The Andersons Albion Ethanol LLC, The Andersons Clymers Ethanol LLC, The Andersons Marathon LLC, Lansing Trade Group, and Thompsons Ltd. qualified as significant equity investees of the Company under the income test. The following table presents combined summarized unaudited financial information of these investments for the three and nine months ended September 30, 2016 and 2015:
(in thousands) | Three months ended September 30, | Nine months ended September 30,
2016 |  | 2015 | 2016 |  | 2015
Revenues | $ | 1,646,697 |  |  | $ | 2,250,326 |  | $ | 4,676,583 |  |  | $ | 5,129,523 |
Gross profit | 50,141 |  |  | 73,881 |  | 127,963 |  |  | 211,470 |
Income (loss) from continuing operations | 18,965 |  |  | 18,008 |  | 1,428 |  |  | 65,645 |
Net income (loss) | 17,217 |  |  | 17,310 |  | (2,924 | ) |  | 59,637 |
Net income (loss) attributable to companies | 17,752 |  |  | 15,990 |  | (1,347 | ) |  | 57,787 |
Investment in Debt Securities The Company previously owned 100% of the cumulative convertible preferred shares of Iowa Northern Railway Company (“IANR”), which operates a short-line railroad in Iowa. In the first quarter of 2016, these shares were redeemed and the Company no longer has an ownership stake with this entity. See Footnote 10 for additional information on the effects of this transaction. Related Party Transactions In the ordinary course of business, the Company will enter into related party transactions with each of the investments described above, along with other related parties. The following table sets forth the related party transactions entered into for the time periods presented:
| Three months ended September 30, | Nine months ended September 30,
(in thousands) | 2016 |  | 2015 | 2016 |  | 2015
Sales revenues | $ | 177,724 |  |  | $ | 230,409 |  | $ | 549,426 |  |  | $ | 577,133 |
Service fee revenues (a) | 3,800 |  |  | 3,610 |  | 13,290 |  |  | 14,865 |
Purchases of product | 128,081 |  |  | 123,051 |  | 346,590 |  |  | 339,159 |
Lease income (b) | 1,300 |  |  | 1,542 |  | 4,662 |  |  | 4,787 |
Labor and benefits reimbursement (c) | 2,862 |  |  | 2,950 |  | 9,702 |  |  | 8,761 |
Other expenses (d) | — |  |  | 269 |  | 149 |  |  | 827 |
(a) | Service fee revenues include management fees, corn origination fees, ethanol and distillers dried grains (DDG) marketing fees, and other commissions.
(b) | Lease income includes the lease of the Company’s Albion, Michigan and Clymers, Indiana grain facilities as well as certain railcars to the various ethanol LLCs and IANR.
(c) | The Company provides all operational labor to the unconsolidated ethanol LLCs and charges them an amount equal to the Company’s costs of the related services.
(d) | Other expenses include payments to IANR for repair facility rent and use of their railroad reporting mark, payment to LTG for the lease of railcars and other various expenses.
(in thousands) | September 30, 2016 |  | December 31, 2015 |  | September 30, 2015
Accounts receivable (e) | $ | 18,028 |  |  | $ | 13,362 |  |  | $ | 19,799 |
Accounts payable (f) | 15,352 |  |  | 13,784 |  |  | 15,929 |
(e) | Accounts receivable represents amounts due from related parties for sales of corn, leasing revenue and service fees.
(f) | Accounts payable represents amounts due to related parties for purchases of ethanol and other various items.
For the three months ended September 30, 2016 and 2015, revenues recognized for the sale of ethanol that the Company purchased from the unconsolidated ethanol LLCs were $109.3 million and $105.1 million, respectively. Additionally, for the nine months ended September 30, 2016 and 2015, revenues recognized for the sale of ethanol that the Company purchased from the unconsolidated ethanol LLCs were $220.6 million and $315.9 million, respectively. For the three months ended September 30, 2016 and 2015, revenues recognized for the sale of corn to the unconsolidated ethanol LLCs under these agreements were $90.4 million and $119.4 million, respectively. Additionally, for the nine months ended September 30, 2016 and 2015, revenues recognized for the sale of corn to the unconsolidated ethanol LLCs under these agreements were $314.5 million and $323.7 million, respectively. The Company enters into derivative contracts with certain of its related parties for the purchase and sale of corn and ethanol, for similar price risk mitigation purposes and on similar terms as the purchase and sale of derivative contracts it enters into with unrelated parties. The fair value of derivative contract assets with related parties as of September 30, 2016, December 31, 2015 and September 30, 2015 was $5.0 million, $2.3 million and $3.4 million, respectively. The fair value of derivative contract liabilities with related parties as of September 30, 2016, December 31, 2015 and September 30, 2015 was $0.2 million, $0.3 million and $0.3 million, respectively.

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- Definition 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(k)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Paragraph b -Article 3A + Details
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