Annual report pursuant to Section 13 and 15(d)

Financial Instruments, Fair Value, and Concentrations of Credit Risk

v3.19.3.a.u2
Financial Instruments, Fair Value, and Concentrations of Credit Risk
12 Months Ended
Dec. 31, 2019
Text Block [Abstract]  
Financial Instruments, Fair Value, and Concentrations of Credit Risk

2. FINANCIAL INSTRUMENTS, FAIR VALUE, AND CONCENTRATIONS OF CREDIT RISK

The carrying values of cash and cash equivalents, restricted cash, due from related parties, accounts payable, due to related parties, and all other current liabilities approximate fair value. The fair value of our financing lease obligations, including the current portion, are $15.7 million as of December 31, 2019, and $15.8 million as of December 31, 2018. The carrying amounts of our financing lease obligations, including the current portion, were $18.6 million as of December 31, 2019 and $18.5 million as of December 31, 2018. The fair value of our financing lease obligations was determined using discounted cash flow analysis based on market rates for similar types of borrowings. Financing lease obligations are a Level 2 liability in the fair value hierarchy.

Fair Value Measurements and Financial Statement Presentation

The fair values of our assets, liabilities, and derivative positions recorded at fair value and their respective levels in the fair value hierarchy as of December 31, 2019 and December 31, 2018, were as follows:

 

 

December 31, 2019

 

 

December 31, 2019

 

 

 

Fair Values of Assets

 

 

Fair Values of Liabilities

 

In Thousands

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Other items reported at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity futures and options

 

$

62

 

 

$

 

 

$

 

 

$

62

 

 

$

 

 

$

 

 

$

 

 

$

 

Total

 

$

62

 

 

$

 

 

$

 

 

$

62

 

 

$

 

 

$

 

 

$

 

 

$

 

 

 

 

December 31, 2018

 

 

December 31, 2018

 

 

 

Fair Values of Assets

 

 

Fair Values of Liabilities

 

In Thousands

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Other items reported at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Purchase Contracts (a)

 

$

 

 

$

1

 

 

$

 

 

$

1

 

 

$

 

 

$

248

 

 

$

 

 

$

248

 

Total

 

$

 

 

$

1

 

 

$

 

 

$

1

 

 

$

 

 

$

248

 

 

$

 

 

$

248

 

(a)

The fair value for forward purchase contracts is estimated based on commodity market future prices.

Commodity Price Risk

We enter Forward Purchase Contracts for grain with settlement values based on commodity futures market prices. These Forward Purchase Contracts allow our counterparty to fix their sale prices to us at various times as defined in the contract. We may enter hedging arrangements to either fix variable exposures or convert fixed prices to floating prices using commodity derivative contracts. As of December 31, 2019, we held commodity contracts with a notional amount of $4.8 million.

We have designated all our commodity derivative contracts as cash flow hedges. As a result, all gains or losses associated with recording commodity derivative contracts at fair value are recorded as a component of accumulated other comprehensive gain (loss) (AOCI). We reclassify amounts from AOCI to cost of goods sold when we sell the underlying products to which those hedges relate. As of December 31, 2019, we expect the entire AOCI balance to be reclassified into earnings within the next six months.  

Certain amounts related to our hedging activities are as follows:

 

 

Amount of Gain (Loss)

 

 

Amount of Gain (Loss)

Reclassified to Earnings

 

 

 

Recognized in AOCI

 

 

Year ended

 

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

In thousands

 

2019

 

 

2018

 

 

2017

 

 

2019

 

 

2018

 

 

2017

 

Cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

17

 

 

$

 

 

$

 

 

$

(81

)

 

$

 

 

$

 

Total

 

$

17

 

 

$

 

 

$

 

 

$

(81

)

 

$

 

 

$

 

Foreign Exchange Risk

Foreign currency fluctuations affect our foreign currency cash flows related primarily to payments to Cellectis. Our principal foreign currency exposure is to the euro. We do not hedge these exposures, and we do not believe that the current level of foreign currency risk is significant to our operations.

Concentrations of Credit Risk

We invest our cash, cash equivalents and restricted cash in short-term investments and hold deposits at financial institutions that may exceed insured limits. We evaluate the creditworthiness of these institutions in determining the risk associated with these deposits. We have not experienced any losses on these deposits.