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Derivative Financial Instruments | 9 Months Ended
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Sep. 30, 2020
Derivative Financial Instruments [Abstract] |
Derivative Financial Instruments | 8. DERIVATIVE FINANCIAL INSTRUMENTS At September 30, 2020, the company’s consolidated balance sheet reflected unrealized losses of $10.9 million, net of tax, in accumulated other comprehensive income which primarily related to our share of equity method investees other comprehensive income. The company expects these items will be reclassified as income from equity method investees, net of income taxes over the next 12 months as a result of hedged transactions that are forecasted to occur. The amount realized in income from equity method investees, net of income taxes will differ as commodity prices change. Fair Values of Derivative Instruments The fair values of the company’s derivative financial instruments and the line items on the consolidated balance sheets where they are reported are as follows (in thousands):
|  | Asset Derivatives' |  | Liability Derivatives'
|  | Fair Value |  | Fair Value
|  | September 30, ‎2020 |  | December 31, ‎2019 |  | September 30, ‎2020 |  | December 31, ‎2019
Derivative financial instruments |  | $ | 14,687 |  | $ | 14,515 | (1) | $ | 8,325 | (2) | $ | 7,771
Other assets |  |  | 8 |  |  | - |  |  | - |  |  | -
Total |  | $ | 14,695 |  | $ | 14,515 |  | $ | 8,325 |  | $ | 7,771
(1)At December 31, 2019, derivative financial instruments, as reflected on the balance sheet, includes net unrealized gains on exchange traded futures and options contracts of $3.4 million, which include $0.1 million of net unrealized gains on derivative financial instruments designated as cash flow hedging instruments. (2)At September 30, 2020, derivative financial instruments, as reflected on the balance sheet, includes net unrealized losses on exchange traded futures and options contracts of $9.6 million, which included $2.5 million of net unrealized losses on derivative financial instruments designated as cash flow hedging instruments. Refer to Note 4 - Fair Value Disclosures, which contains fair value information related to derivative financial instruments. Effect of Derivative Instruments on Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income The gains or losses recognized in income and other comprehensive income related to the company’s derivative financial instruments and the line items on the consolidated financial statements where they are reported are as follows (in thousands):
|  | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
Location of Gain (Loss) Reclassified from Accumulated Other |  | Three Months Ended ‎September 30, |  | Nine Months Ended ‎September 30,
Comprehensive Income into Income |  | 2020 |  | 2019 |  | 2020 |  | 2019
Revenues |  | $ | - |  | $ | - |  | $ | 8,824 |  | $ | -
Cost of goods sold |  |  | - |  |  | - |  |  | (2,901) |  |  | -
Net loss from discontinued operations, net of income taxes |  |  | - |  |  | 66,700 |  |  | - |  |  | 48,797
Net gain recognized in loss before income taxes |  | $ | - |  | $ | 66,700 |  | $ | 5,923 |  | $ | 48,797
|  | Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivatives
Gain (Loss) Recognized in Other Comprehensive Income on |  | Three Months Ended ‎September 30, |  | Nine Months Ended ‎September 30,
Derivatives |  | 2020 |  | 2019 |  | 2020 |  | 2019
Commodity contracts |  | $ | (3,555) |  | $ | 33,244 |  | $ | 663 |  | $ | 67,425
‎
|  |  |  | Amount of Gain (Loss)
|  |  |  | Recognized in Income on Derivatives
Derivatives Not Designated |  | Location of Gain (Loss) ‎Recognized in Income |  | Three Months Ended ‎September 30, |  | Nine Months Ended ‎September 30,
as Hedging Instruments |  | on Derivatives |  | 2020 |  | 2019 |  | 2020 |  | 2019
Commodity contracts |  | Revenues |  | $ | (21,128) |  | $ | 12,439 |  | $ | 8,681 |  | $ | (12,034)
Commodity contracts |  | Costs of goods sold |  |  | 4,184 |  |  | 5,465 |  |  | 10,678 |  |  | (1,484)
Commodity contracts |  | Net loss from discontinued operations, net of income taxes |  |  | - |  |  | (2,285) |  |  | - |  |  | (2,470)
Net gain (loss) recognized in loss before income taxes |  | $ | (16,944) |  | $ | 15,619 |  | $ | 19,359 |  | $ | (15,988)
The following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for the fair value hedged items (in thousands):
|  | September 30, 2020 |  | December 31, 2019
Line Item in the Consolidated Balance Sheet in Which the Hedged Item is Included |  | Carrying Amount of the Hedged Assets |  | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets |  | Carrying Amount of the Hedged Assets |  | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets
Inventories |  | $ | 26,172 |  | $ | 1,639 |  | $ | 55,021 |  | $ | (2,808)
‎ Effect of Cash Flow and Fair Value Hedge Accounting on the Statements of Operations The effect of cash flow and fair value hedges and the line items on the consolidated statements of operations where they are reported are as follows (in thousands):
| Location and Amount of Gain (Loss) Recognized in
| Income on Cash Flow and Fair Value Hedging Relationships
| for the Three Months Ended September 30,
|  | 2020 |  |  | 2019
| Revenue |  | Cost of ‎Goods Sold |  | Net Income from Discontinued Operations, Net of Income Taxes |  |  | Revenue |  | Cost of ‎Goods Sold |  | Net Income from Discontinued Operations, Net of Income Taxes
Gain (loss) on cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amount of gain reclassified from accumulated other comprehensive income into income | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 66,700
Gain (loss) on fair value hedging relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hedged item |  | - |  |  | 4,264 |  |  | - |  |  | - |  |  | 1,155 |  |  | -
Derivatives designated as hedging instruments |  | - |  |  | (5,380) |  |  | - |  |  | - |  |  | (3,263) |  |  | -
Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow or fair value hedges are recorded | $ | - |  | $ | (1,116) |  | $ | - |  | $ | - |  | $ | (2,108) |  | $ | 66,700
‎
| Location and Amount of Gain (Loss) Recognized in
| Income on Cash Flow and Fair Value Hedging Relationships
| for the Nine Months Ended September 30,
|  | 2020 |  |  | 2019
| Revenue |  | Cost of ‎Goods Sold |  | Net Income from Discontinued Operations, Net of Income Taxes |  | Revenue |  | Cost of ‎Goods Sold |  | Net Income from Discontinued Operations, Net of Income Taxes
Gain (loss) on cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amount of gain (loss) reclassified from accumulated other comprehensive income into income | $ | 8,824 |  | $ | (2,901) |  | $ | - |  | $ | - |  | $ | - |  | $ | 48,797
Gain (loss) on fair value hedging relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hedged item |  | - |  |  | (3,665) |  |  | - |  |  | - |  |  | 324 |  |  | -
Derivatives designated as hedging instruments |  | - |  |  | 3,220 |  |  | - |  |  | - |  |  | 1,168 |  |  | -
Total amounts of income and expense line items presented in the statement of operations in which the effects of cash flow or fair value hedges are recorded | $ | 8,824 |  | $ | (3,346) |  | $ | - |  | $ | - |  | $ | 1,492 |  | $ | 48,797
There were no gains or losses from discontinuing cash flow or fair value hedge treatment during the three and nine months ended September 30, 2020 and 2019. ‎ The open commodity derivative positions as of September 30, 2020, are as follows (in thousands):
|  | Exchange Traded (1) |  | Non-Exchange Traded (2) |  |  |  |
Derivative ‎Instruments |  | Net Long & ‎(Short) |  | Long |  | (Short) |  | Unit of ‎Measure |  | Commodity
Futures |  | 26,520 |  |  |  |  |  | Bushels |  | Corn and Soybeans
Futures |  | 13,500 | (3) |  |  |  |  | Bushels |  | Corn
Futures |  | (2,390) | (4) |  |  |  |  | Bushels |  | Corn
Futures |  | (21,420) |  |  |  |  |  | Gallons |  | Ethanol
Futures |  | (45,360) | (3) |  |  |  |  | Gallons |  | Ethanol
Futures |  | (33,042) |  |  |  |  |  | MmBTU |  | Natural Gas
Futures |  | (7,048) | (4) |  |  |  |  | MmBTU |  | Natural Gas
Futures |  | 25 |  |  |  |  |  | Tons |  | Soybean Meal
Options |  | 7 |  |  |  |  |  | Tons |  | Soybean Meal
Options |  | (18,433) |  |  |  |  |  | Bushels |  | Corn
Options |  | (25,411) |  |  |  |  |  | Gallons |  | Ethanol
Options |  | (100) |  |  |  |  |  | MmBTU |  | Natural Gas
Forwards |  |  |  | 25,434 |  | (498) |  | Bushels |  | Corn and Soybeans
Forwards |  |  |  | 13,492 |  | (161,575) |  | Gallons |  | Ethanol
Forwards |  |  |  | 98 |  | (385) |  | Tons |  | Distillers Grains
Forwards |  |  |  | 6,048 |  | (62,919) |  | Pounds |  | Corn Oil
Forwards |  |  |  | 5,607 |  | (561) |  | MmBTU |  | Natural Gas
(1)Exchange traded futures and options are presented on a net long and (short) position basis. Options are presented on a delta-adjusted basis. (2)Non-exchange traded forwards are presented on a gross long and (short) position basis including both fixed-price and basis contracts. (3)Futures used for cash flow hedges. (4)Futures or non-exchange traded forwards used for fair value hedges. Energy trading contracts that do not involve physical delivery are presented net in revenues on the consolidated statements of operations. Included in revenues are net losses on energy trading contracts of $0.9 million and net gains on energy trading contracts of $2.1 million for the three and nine months ended September 30, 2020, respectively, and net gains on energy trading contracts of $2.1 million and $11.4 million for the three and nine months ended September 30, 2019, respectively.

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- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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