Receivables From Customers, Net and Notes Receivable, Net (Notes)

9 Months Ended

Jun. 30, 2016

Receivables from customers and notes receivable, net [Abstract]

Financing Receivables [Text Block]

Receivables From Customers, Net and Notes Receivable, Net

The allowance for doubtful accounts related to receivables from customers was $12.2 million as of June 30, 2016 and $10.2 million as of September 30, 2015. The allowance for doubtful accounts related to notes receivable was $0.4 million and $1.0 million as of June 30, 2016 and September 30, 2015, respectively.

During the three months ended June 30, 2016, the Company recorded no net bad debt expense. During the three months ended June 30, 2015, the Company recorded bad debt expense of $0.4 million, including provision increases for OTC customer deficits, partially offset by provision decreases for LME customer deficits collected.

During the nine months ended June 30, 2016, the Company recorded bad debt expense of $4.6 million, primarily related to $1.5 million of customer receivables in the Physical Ag’s & Energy component of the Company’s Physical Commodities segment, $2.7 million of customer deficits in the Company’s Commercial Hedging segment and $0.3 million related to short-term notes receivable origination in the Securities segment. During the nine months ended June 30, 2015, the Company recorded bad debt expense of $3.2 million, including provision increases of $2.8 million and direct write-offs of $0.4 million. The provision increases were primarily related to OTC and LME customer deficits and notes receivable related to loans pertaining to a former acquisition.

The Company originates short-term notes receivable from customers with the outstanding balances typically being insured 90% to 98% by a third party, including accrued interest, subject to applicable deductible amounts. The total balance outstanding under insured notes receivable was $8.9 million and $41.4 million as of June 30, 2016 and September 30, 2015, respectively. The Company has sold $7.8 million and $30.7 million of the insured portion of the notes through non-recourse participation agreements with other third parties as of June 30, 2016 and September 30, 2015, respectively. The Company has completed its exit of the majority of this activity during the nine months ended June 30, 2016. The Company believes the run-off of the remaining activity will have a minimal impact on the Company.

See discussion of notes receivable related to commodity repurchase agreements in Note 10.