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Related Party Transactions | 9 Months Ended
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Sep. 30, 2018
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. The following table presents the Company’s investment balance in each of its equity method investees by entity:
(in thousands) | September 30, 2018 |  | December 31, 2017 |  | September 30, 2017
The Andersons Albion Ethanol LLC | $ | 49,882 |  |  | $ | 45,024 |  |  | $ | 42,302 |
The Andersons Clymers Ethanol LLC | 22,589 |  |  | 19,830 |  |  | 17,837 |
The Andersons Marathon Ethanol LLC | 15,373 |  |  | 12,660 |  |  | 12,390 |
Lansing Trade Group, LLC | 99,904 |  |  | 93,088 |  |  | 89,541 |
Thompsons Limited (a) | 50,280 |  |  | 50,198 |  |  | 50,399 |
Other | 2,322 |  |  | 2,439 |  |  | 2,562 |
Total | $ | 240,350 |  |  | $ | 223,239 |  |  | $ | 215,031 |
(a) Thompsons Limited and related U.S. operating company held by joint ventures 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, 2018 |  | 2018 |  | 2017 |  | 2018 |  | 2017
The Andersons Albion Ethanol LLC | 55% |  | $ | 2,408 |  |  | $ | 1,473 |  |  | $ | 4,858 |  |  | $ | 3,331 |
The Andersons Clymers Ethanol LLC | 39% |  | 1,376 |  |  | 1,822 |  |  | 3,121 |  |  | 2,597 |
The Andersons Marathon Ethanol LLC | 33% |  | 1,029 |  |  | 985 |  |  | 2,713 |  |  | 1,301 |
Lansing Trade Group, LLC | 33% (a) |  | 2,428 |  |  | 305 |  |  | 8,603 |  |  | 491 |
Thompsons Limited (b) | 50% |  | 35 |  |  | (940 | ) |  | 1,345 |  |  | 546 |
Other | 5% - 50% |  | (51 | ) |  | (59 | ) |  | (39 | ) |  | (173 | )
Total |  |  | $ | 7,225 |  |  | $ | 3,586 |  |  | $ | 20,601 |  |  | $ | 8,093 |
(a) This does not consider restricted management units which once vested will reduce the ownership percentage by approximately 1% (b) Thompsons Limited and related U.S. operating company held by joint ventures Total distributions received from unconsolidated affiliates were $2.2 million and $7.1 million for the nine months ended September 30, 2018 and 2017, respectively. In the third quarter of 2018, The Andersons Albion Ethanol LLC and Lansing Trade Group ("LTG") qualified as significant equity investees of the Company under the income test. The following table presents unaudited summarized financial information for the investees:
(in thousands) | Three months ended September 30, |  | Nine months ended September 30,
2018 |  | 2017 |  | 2018 |  | 2017
Revenues | $ | 1,504,141 |  |  | $ | 1,341,123 |  |  | $ | 4,244,385 |  |  | $ | 3,797,546 |
Gross profit | 49,497 |  |  | 42,973 |  |  | 147,013 |  |  | 111,468 |
Income (loss) from continuing operations | 12,126 |  |  | 3,265 |  |  | 36,955 |  |  | 7,950 |
Net income (loss) | 11,678 |  |  | 3,121 |  |  | 35,240 |  |  | 6,583 |
Net income (loss) attributable to Companies | 11,678 |  |  | 3,300 |  |  | 35,240 |  |  | 7,486 |
Related Party Transactions In the ordinary course of business and on an arms-length basis, the Company will enter into related party transactions with each of the investments described above, along with other related parties. On March 2, 2018, the Company invested in ELEMENT, LLC. The Company owns 51% of ELEMENT, LLC and ICM, Inc. owns the remaining 49% interest. ELEMENT, LLC is constructing a 70 million-gallon-per-year bio-refinery. As part of the Company’s investment into ELEMENT, LLC, the Company and ICM, Inc. entered into a number of agreements with the entity. Most notably, ICM, Inc. will operate the facility under a management contract and manage the initial construction of the facility, while the Company will provide corn origination, ethanol marketing, and risk management services. The results of operations for ELEMENT, LLC have been included in our consolidated results of operations beginning on March 2, 2018 and are a component of our Ethanol segment. The plant is expected to be operational in 2019. 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) | 2018 |  | 2017 |  | 2018 |  | 2017
Sales revenues | $ | 82,394 |  |  | $ | 225,367 |  |  | $ | 278,974 |  |  | $ | 665,331 |
Service fee revenues (a) | 5,231 |  |  | 14,397 |  |  | 15,539 |  |  | 28,433 |
Purchases of product and capital assets | 177,583 |  |  | 165,084 |  |  | 556,551 |  |  | 467,495 |
Lease income (b) | 1,623 |  |  | 1,850 |  |  | 4,829 |  |  | 4,559 |
Labor and benefits reimbursement (c) | 3,436 |  |  | 3,208 |  |  | 10,603 |  |  | 10,071 |
(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.
(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.
(in thousands) | September 30, 2018 |  | December 31, 2017 |  | September 30, 2017
Accounts receivable (d) | $ | 32,584 |  |  | $ | 30,252 |  |  | $ | 18,694 |
Accounts payable (e) | 32,347 |  |  | 27,866 |  |  | 27,413 |
(d) | Accounts receivable represents amounts due from related parties for sales of corn, leasing revenue and service fees.
(e) | Accounts payable represents amounts due to related parties for purchases of ethanol and other various items.
For the three months ended September 30, 2018 and 2017, revenues recognized for the sale of ethanol and other co-products that the Company purchased from the unconsolidated ethanol LLCs were $161.9 million and $160.8 million, respectively. For the nine months ended September 30, 2018 and 2017, revenues recognized for the sale of ethanol and other co-products that the Company purchased from the unconsolidated ethanol LLCs were $480.4 million and $445.4 million, respectively. For the three and nine months ended September 30, 2017 revenues recognized for the sale of corn to the unconsolidated ethanol LLCs were $119.1 million and $362.2 million. As a result of the new revenue recognition guidance, these transactions are now being recorded on a net basis instead of a gross basis, which is included in service fee revenues above. See Note 7 for further discussion. From time to time, the Company enters into derivative contracts with certain of its related parties, including the unconsolidated ethanol LLCs, LTG, and the Thompsons Limited joint ventures, for the purchase and sale of grain and ethanol, for 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, 2018, December 31, 2017 and September 30, 2017 was $6.8 million, $0.2 million and $1.9 million, respectively. The fair value of derivative contract liabilities with related parties as of September 30, 2018, December 31, 2017 and September 30, 2017 was $7.2 million, $2.5 million and $0.1 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 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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