XML 31 R20.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Fair Value Measurements | 6 Months Ended
--- | ---
Jun. 30, 2018
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements The following tables present the Company's assets and liabilities that are measured at fair value on a nonrecurring basis at June 30, 2018:
(in thousands) | June 30, 2018
Assets (liabilities) | Level 1 |  | Level 2 |  | Level 3 |  | Total
Property, plant and equipment (a) | $ | — |  |  | $ | — |  |  | $ | 1,300 |  |  | $ | 1,300 |
Rail car assets (b) | $ | — |  |  | $ | — |  |  | $ | 4,063 |  |  | $ | 4,063 |
Total | $ | — |  |  | $ | — |  |  | $ | 5,363 |  |  | $ | 5,363 |
(a) | The Company recognized impairment charges on certain grain assets during 2018 and measured the fair value using Level 3 inputs on a nonrecurring basis. The fair value of the grain assets was determined using a pending sale of these grain assets held by the Company.
(b) | The Company recognized impairment charges on certain rail assets during 2018 and measured fair value using Level 3 inputs on a nonrecurring basis. The fair value of the rail assets was determined based on a national scrap index less cost to sell.
The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2018, December 31, 2017 and June 30, 2017:
(in thousands) | June 30, 2018
Assets (liabilities) | Level 1 |  | Level 2 |  | Level 3 |  | Total
Commodity derivatives, net (a) | $ | 15,356 |  |  | $ | (48,451 | ) |  | $ | — |  |  | $ | (33,095 | )
Provisionally priced contracts (b) | (37,787 | ) |  | (24,511 | ) |  | — |  |  | (62,298 | )
Convertible preferred securities (c) | — |  |  | — |  |  | 7,488 |  |  | 7,488 |
Other assets and liabilities (d) | 4,136 |  |  | (37 | ) |  | — |  |  | 4,099 |
Total | $ | (18,295 | ) |  | $ | (72,999 | ) |  | $ | 7,488 |  |  | $ | (83,806 | )
(in thousands) | December 31, 2017
Assets (liabilities) | Level 1 |  | Level 2 |  | Level 3 |  | Total
Commodity derivatives, net (a) | 18,603 |  |  | (18,067 | ) |  | — |  |  | 536 |
Provisionally priced contracts (b) | (98,190 | ) |  | (67,094 | ) |  | — |  |  | (165,284 | )
Convertible preferred securities (c) | — |  |  | — |  |  | 7,388 |  |  | 7,388 |
Other assets and liabilities (d) | 9,705 |  |  | (1,244 | ) |  | — |  |  | 8,461 |
Total | $ | (69,882 | ) |  | $ | (86,405 | ) |  | $ | 7,388 |  |  | $ | (148,899 | )
(in thousands) | June 30, 2017
Assets (liabilities) | Level 1 |  | Level 2 |  | Level 3 |  | Total
Restricted cash | $ | 1,033 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,033 |
Commodity derivatives, net (a) | 2,817 |  |  | (8,445 | ) |  | — |  |  | (5,628 | )
Provisionally priced contracts (b) | (87,958 | ) |  | (30,779 | ) |  | — |  |  | (118,737 | )
Convertible preferred securities (c) | — |  |  | — |  |  | 3,294 |  |  | 3,294 |
Other assets and liabilities (d) | 10,155 |  |  | (2,158 | ) |  | — |  |  | 7,997 |
Total | $ | (73,953 | ) |  | $ | (41,382 | ) |  | $ | 3,294 |  |  | $ | (112,041 | )
(a) | Includes associated cash posted/received as collateral
(b) | Included in "Provisionally priced contracts" are those instruments based only on underlying futures values (Level 1) and delayed price contracts (Level 2)
(c) | Recorded in “Other noncurrent assets” on the Company’s Condensed Consolidated Balance Sheets.
(d) | Included in other assets and liabilities are assets held in rabbi trusts to fund deferred compensation plans, ethanol risk management contracts, and foreign exchange derivative contracts (Level 1), and interest rate derivatives (Level 2).
The majority of the Company’s assets and liabilities measured at fair value are based on the market approach valuation technique. With the market approach, fair value is derived using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Level 1 commodity derivatives reflect the fair value of the exchange-traded futures and options contracts that the Company holds, net of the cash collateral that the Company has in its margin account. The Company’s net commodity derivatives primarily consist of futures or options contracts via regulated exchanges and contracts with producers or customers under which the future settlement date and bushels (or gallons in the case of ethanol contracts) of commodities to be delivered (primarily wheat, corn, soybeans and ethanol) are fixed and under which the price may or may not be fixed. Depending on the specifics of the individual contracts, the fair value is derived from the futures or options prices on the CME or the New York Mercantile Exchange for similar commodities and delivery dates as well as observable quotes for local basis adjustments (the difference, which is attributable to local market conditions, between the quoted futures price and the local cash price). Because basis for a particular commodity and location typically has multiple quoted prices from other agribusinesses in the same geographical vicinity and is used as a common pricing mechanism in the Agribusiness industry, we have concluded that basis is a Level 2 fair value input for purposes of the fair value disclosure requirements related to our commodity derivatives. Although nonperformance risk, both of the Company and the counterparty, is present in each of these commodity contracts and is a component of the estimated fair values, based on the Company’s historical experience with its producers and customers and the Company’s knowledge of their businesses, the Company does not view nonperformance risk to be a material input to fair value for these commodity contracts. These fair value disclosures exclude physical grain inventories measured at net realizable value. The net realizable value used to measure the Company’s agricultural commodity inventories is the fair value (spot price of the commodity in an exchange), less cost of disposal and transportation based on the local market. This valuation would generally be considered Level 2. The amount is disclosed in Note 2. Changes in the net realizable value of commodity inventories are recognized as a component of cost of sales and merchandising revenues. Provisionally priced contract liabilities are those for which the Company has taken ownership and possession of grain but the final purchase price has not been established. In the case of payables where the unpriced portion of the contract is limited to the futures price of the underlying commodity or the Company has delivered provisionally priced grain and a subsequent payable or receivable is set up for any future changes in the grain price, quoted CBOT prices are used and the liability is deemed to be Level 1 in the fair value hierarchy. All other unpriced contracts, primarily delayed price contracts, are determined on the basis of local grain market prices at the balance sheet date and, as such, are deemed to be Level 2 in the fair value hierarchy as they include variable future and basis components. The risk management contract liability allows related ethanol customers to effectively unprice the futures component of their inventory for a period of time, subjecting the bushels to market fluctuations. The Company records an asset or liability for the market value changes of the commodities over the life of the contracts based on quoted CBOT prices and as such, the balance is deemed to be Level 1 in the fair value hierarchy. A reconciliation of beginning and ending balances for the Company’s fair value measurements using Level 3 inputs is as follows:
|  | Convertible Preferred Securities
(in thousands) |  | 2018 |  | 2017
Assets (liabilities) at January 1, |  | $ | 7,388 |  |  | $ | 3,294 |
Gains (losses) included in earnings |  | — |  |  | — |
Assets (liabilities) at March 31, |  | $ | 7,388 |  |  | $ | 3,294 |
Gains (losses) included in earnings |  | — |  |  | — |
New investments |  | 100 |  |  | — |
Asset (liabilities) at June 30, |  | $ | 7,488 |  |  | $ | 3,294 |
The following tables summarize quantitative information about the Company's Level 3 fair value measurements as of June 30, 2018, December 31, 2017 and June 30, 2017:
Quantitative Information about Level 3 Fair Value Measurements
(in thousands) | Fair Value as of June 30, 2018 |  | Valuation Method |  | Unobservable Input |  | Weighted Average
Convertible preferred securities (a) | $ | 7,488 |  |  | Implied based on market prices |  | N/A |  | N/A
Real Property (b) | 1,300 |  |  | Sale agreement |  | N/A |  | N/A
Rail car assets (c) | 4,063 |  |  | National scrap index less cost to sell |  | N/A |  | N/A
(in thousands) | Fair Value as of December 31, 2017 |  | Valuation Method |  | Unobservable Input |  | Weighted Average
Convertible preferred securities (a) | $ | 7,388 |  |  | Implied based on market prices |  | N/A |  | N/A
Real Property (b) | 29,347 |  |  | Third-Party Appraisal |  | N/A |  | N/A
(in thousands) | Fair Value as of June 30, 2017 |  | Valuation Method |  | Unobservable Input |  | Weighted Average
Convertible preferred securities (a) | $ | 3,294 |  |  | Cost Basis, Plus Interest |  | N/A |  | N/A
(a) Due to early stages of business and timing of investments, cost basis, plus interest was deemed to approximate fair value in prior periods. As the underlying enterprises have matured, observable price changes and other additional market data is available to consider in order to estimate fair value, including additional capital raising, internal valuation models, progress towards key business milestones, and other relevant market data points. (b) The Company recognized impairment charges on certain assets and measured the fair value using Level 3 inputs on a nonrecurring basis. The fair value of the assets was determined using prior transactions, third-party appraisals and a pending sale of grain assets held by the Company. (c)The Company recognized impairment charges on rail assets during 2018 and measured fair value using Level 3 inputs on a nonrecurring basis. The fair value of the assets was determined based on a national scrap index less cost to sell. Fair Value of Financial Instruments The fair value of the Company’s long-term debt is estimated using quoted market prices or discounted future cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. As such, the Company has concluded that the fair value of long-term debt is considered Level 2 in the fair value hierarchy.
(in thousands) | June 30, 2018 |  | December 31, 2017 |  | June 30, 2017
Fair value of long-term debt, including current maturities | $ | 444,821 |  |  | $ | 474,769 |  |  | $ | 423,316 |
Fair value in excess of carrying value (a) | (8,063 | ) |  | 1,451 |  |  | 2,612 |
(a) Carrying value used for this purpose excludes unamortized debt issuance costs The fair value of the Company’s cash equivalents, accounts receivable and accounts payable approximate their carrying value as they are close to maturity.

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

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration