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Fair Value Disclosures
 3 Months Ended
Mar. 31, 2017
Fair Value Disclosures [Abstract]  
Fair Value Disclosures

3.  FAIR VALUE DISCLOSURES



The following methods, assumptions and valuation techniques were used to estimate the fair value of the company’s financial instruments:



Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities the company can access at the measurement date. Level 1 unrealized gains and losses on commodity derivatives relate to exchange-traded open trade equity and option values in the company’s brokerage accounts.



Level 2 – directly or indirectly observable inputs such as quoted prices for similar assets or liabilities in active markets other than quoted prices included within Level 1, quoted prices for identical or similar assets in markets that are not active, and other inputs that are observable or can be substantially corroborated by observable market data through correlation or other means. Grain inventories held for sale in the agribusiness segment are valued at nearby futures values, plus or minus nearby basis.



Level 3 – unobservable inputs that are supported by little or no market activity and comprise a significant component of the fair value of the assets or liabilities. The company currently does not have any recurring Level 3 financial instruments.



There have been no changes in valuation techniques and inputs used in measuring fair value. The company’s assets and liabilities by level are as follows (in thousands):





 

 

 

 

 

 

 

 

 

 

 



Fair Value Measurements at March 31, 2017



Quoted Prices in
Active Markets for
Identical Assets

 

Significant Other
Observable Inputs

 

Reclassification for
Balance Sheet

 

 

 



(Level 1)

 

(Level 2)

 

Presentation

 

Total



 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

 256,468 

 

$

 -

 

$

 -

 

$

 256,468 

Restricted cash

 

 38,974 

 

 

 -

 

 

 -

 

 

 38,974 

Margin deposits

 

 28,878 

 

 

 -

 

 

 (28,878)

 

 

 -

Inventories carried at market

 

 -

 

 

 196,925 

 

 

 -

 

 

 196,925 

Unrealized gains on derivatives

 

 10,823 

 

 

 9,417 

 

 

 13,678 

 

 

 33,918 

Other assets

 

 115 

 

 

 1 

 

 

 -

 

 

 116 

Total assets measured at fair value

$

 335,258 

 

$

 206,343 

 

$

 (15,200)

 

$

 526,401 



 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable (1)

$

 -

 

$

 25,291 

 

$

 -

 

$

 25,291 

Unrealized losses on derivatives

 

 15,200 

 

 

 7,131 

 

 

 (15,200)

 

 

 7,131 

Other

 

 -

 

 

 59 

 

 

 -

 

 

 59 

Total liabilities measured at fair value

$

 15,200 

 

$

 32,481 

 

$

 (15,200)

 

$

 32,481 







 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at December 31, 2016



Quoted Prices in
Active Markets for
Identical Assets

 

Significant Other
Observable Inputs

 

Reclassification for
Balance Sheet

 

 

 



(Level 1)

 

(Level 2)

 

Presentation

 

Total



 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

 304,211 

 

$

 -

 

$

 -

 

$

 304,211 

Restricted cash

 

 51,979 

 

 

 -

 

 

 -

 

 

 51,979 

Margin deposits

 

 50,601 

 

 

 -

 

 

 (50,601)

 

 

 -

Inventories carried at market (2)

 

 -

 

 

 154,022 

 

 

 -

 

 

 154,022 

Unrealized gains on derivatives

 

 8,272 

 

 

 14,818 

 

 

 24,146 

 

 

 47,236 

Other assets

 

 116 

 

 

 -

 

 

 -

 

 

 116 

Total assets measured at fair value

$

 415,179 

 

$

 168,840 

 

$

 (26,455)

 

$

 557,564 



 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable (1)

$

 -

 

$

 35,288 

 

$

 -

 

$

 35,288 

Unrealized losses on derivatives

 

 26,455 

 

 

 8,916 

 

 

 (26,455)

 

 

 8,916 

Other liabilities

 

 -

 

 

 81 

 

 

 -

 

 

 81 

Total liabilities measured at fair value

$

 26,455 

 

$

 44,285 

 

$

 (26,455)

 

$

 44,285 



(1)

Accounts payable is generally stated at historical amounts with the exception of $25.3 million and $35.3 million at March 31, 2017 and December 31, 2016, respectively, related to certain delivered inventory for which the payable fluctuates based on changes in commodity prices. These payables are hybrid financial instruments for which the company has elected the fair value option.

(2)

Inventories carried at market have been revised from previously reported results to include $77.0 million of inventories held under a fair value hedging relationship. There was no impact to the financial statements resulting from this revision.



The company believes the fair value of its debt was approximately $1.1 billion compared with a book value of $1.1 billion at March 31, 2017, and December 31, 2016, respectively. The company estimated the fair value of its outstanding debt using Level 2 inputs. The company believes the fair values of its accounts receivable approximated book value, which was $97.0 million and $147.5 million at March 31, 2017 and December 31, 2016, respectively.



Although the company currently does not have any recurring Level 3 financial measurements, the fair values of tangible assets and goodwill acquired and the equity component of convertible debt issued represent Level 3 measurements which were derived using a combination of the income approach, market approach and cost approach for the specific assets or liabilities being valued.