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Fair Value Measurements
6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
FAIR VALUE MEASUREMENTS

Financial assets and liabilities measured at fair value on a recurring basis in the Company's consolidated financial statements as of June 30, 2018 and December 31, 2017 are summarized by type of inputs applicable to the fair value measurements as follows:
June 30, 2018
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Marketable securities (a)
$
2,138

 
$
1,807

 
$

 
$
3,945

Long-term investments (a)
248,071

 
14,703

 
44,499

 
307,273

Investments in certain funds

 

 
482

 
482

Precious metal and commodity inventories recorded at fair value
11,747

 

 

 
11,747

Economic interests in loans

 

 
15,682

 
15,682

Warrants

 

 
254

 
254

Investment in private company

 

 
250

 
250

Commodity contracts on precious metal and commodity inventories

 
29

 

 
29

Foreign currency forward exchange contracts

 
311

 

 
311

Total
$
261,956

 
$
16,850

 
$
61,167

 
$
339,973

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Financial instrument obligations
$
13,496

 
$

 
$

 
$
13,496

Commodity contracts on precious metal and commodity inventories

 
45

 

 
45

Foreign currency forward exchange contracts

 
95

 

 
95

Total
$
13,496

 
$
140

 
$

 
$
13,636

December 31, 2017
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Marketable securities (a)
$
44,371

 
$
1,988

 
$
11,954

 
$
58,313

Long-term investments (a)
186,750

 
10,387

 
36,223

 
233,360

Investments in certain funds

 

 
407

 
407

Precious metal and commodity inventories recorded at fair value
10,993

 

 

 
10,993

Economic interests in loans

 

 
13,126

 
13,126

Foreign currency forward exchange contracts

 
166

 

 
166

Warrants

 

 
206

 
206

Long put options
3

 

 

 
3

Total
$
242,117

 
$
12,541

 
$
61,916

 
$
316,574

 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
Financial instrument obligations
$
15,629

 
$

 
$

 
$
15,629

Commodity contracts on precious metal and commodity inventories

 
127

 

 
127

Foreign currency forward exchange contracts

 
188

 

 
188

Short call options
258

 

 

 
258

Total
$
15,887

 
$
315

 
$

 
$
16,202

(a)
For additional detail of the marketable securities and long-term investments see Note 8 - "Investments."

There were no transfers of securities among the various measurement input levels during the six months ended June 30, 2018.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the "exit price") in an orderly transaction between market participants at the measurement date. Fair value measurements are broken down into three levels based on the reliability of inputs as follows:

Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The valuation under this approach does not entail a significant degree of judgment ("Level 1").

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic measures ("Level 2").

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date ("Level 3").

The fair value of the Company's financial instruments, such as cash and cash equivalents, trade and other receivables and accounts payable, approximates carrying value due to the short-term maturities of these assets and liabilities. Carrying cost approximates fair value for long-term debt which has variable interest rates.

The precious metal and commodity inventories associated with the Company's fair value hedges (see Note 10 - "Financial Instruments") are reported at fair value. Fair values of these inventories are based on quoted market prices on commodity exchanges and are considered Level 1 measurements. The derivative instruments that the Company purchases in connection with its precious metal and commodity inventories, specifically commodity futures and forward contracts, are also valued at fair value. The futures contracts are Level 1 measurements since they are traded on a commodity exchange. The forward contracts are entered into with a counterparty and are considered Level 2 measurements.

Following is a summary of changes in financial assets measured using Level 3 inputs:
 
Long-Term Investments
 
 
 
 
 
Investments in Associated Companies (a)
 
STCN Warrants (a)
 
Marketable Securities and Other (b)
 
Total
Assets
 
 
 
 
 
 
 
Balance at March 31, 2017
$
1,223

 
$
32

 
$
34,489

 
$
35,744

Sales and cash collections

 

 
(13,729
)
 
(13,729
)
Realized gains on sale

 

 
73

 
73

Unrealized gains

 

 
3,205

 
3,205

Unrealized losses

 
(23
)
 
(849
)
 
(872
)
Balance at June 30, 2017
$
1,223

 
$
9

 
$
23,189

 
$
24,421

 
 
 
 
 
 
 
 
Balance at March 31, 2018
$
43,672

 
$

 
$
26,909

 
$
70,581

Sales and cash collections

 

 
(14,900
)
 
(14,900
)
Realized gains on sale

 

 
8,285

 
8,285

Unrealized gains
827

 

 
87

 
914

Unrealized losses

 

 
(3,713
)
 
(3,713
)
Balance at June 30, 2018
$
44,499

 
$

 
$
16,668

 
$
61,167


 
Long-Term Investments
 
 
 
 
 
Investments in Associated Companies (a)
 
STCN Warrants (a)
 
Marketable Securities and Other (b)
 
Total
Assets
 
 
 
 
 
 
 
Balance at December 31, 2016
$
1,223

 
$
19

 
$
30,789

 
$
32,031

Sales and cash collections

 

 
(14,978
)
 
(14,978
)
Realized gains on sale

 

 
73

 
73

Unrealized gains

 

 
7,305

 
7,305

Unrealized losses

 
(10
)
 

 
(10
)
Balance at June 30, 2017
$
1,223

 
$
9

 
$
23,189

 
$
24,421

 
 
 
 
 
 
 
 
Balance at December 31, 2017
$
36,223

 
$

 
$
25,693

 
$
61,916

Purchases

 

 
250

 
250

Sales and cash collections

 

 
(17,378
)
 
(17,378
)
Realized gains on sale

 

 
11,584

 
11,584

Unrealized gains
8,276

 

 
232

 
8,508

Unrealized losses

 

 
(3,713
)
 
(3,713
)
Balance at June 30, 2018
$
44,499

 
$

 
$
16,668

 
$
61,167

(a)
Unrealized gains and losses are recorded in Income of associated companies, net of taxes in the Company's consolidated income statements.
(b)
Realized and unrealized gains and losses on sale are recorded in Realized and unrealized losses (gains) on securities, net or Revenue in the Company's consolidated income statements.

Long-Term Investments - Valuation Techniques

The Company estimates the value of its investment in STCN preferred stock using a Monte Carlo simulation. Key inputs in this valuation include the trading price and volatility of STCN's common stock, the risk-free rate of return, as well as the dividend rate, conversion price and redemption date of the preferred stock. The Company estimates the value of another of its investments in an associated company primarily using a discounted cash flow method adjusted for additional information related to debt covenants, solvency issues and other related matters.

Marketable Securities and Other - Valuation Techniques

The Company uses the net asset value included in quarterly statements it receives in arrears from a venture capital fund to determine the fair value of such fund and determines the fair value of certain corporate securities and corporate obligations by incorporating and reviewing prices provided by third-party pricing services based on the specific features of the underlying securities. The fair value of the derivatives held by WebBank (see Note 10 - "Financial Instruments") represent the estimated amounts that WebBank would receive or pay to terminate the contracts at the reporting date and is based on discounted cash flow analyses that consider credit, performance and prepayment. Unobservable inputs used in the discounted cash flow analyses are: a constant prepayment rate of 6.34% to 35.65%, a constant default rate of 0.75% to 22.06% and a discount rate of 1.46% to 27.51%.