PENFORD CORP - 10-Q/A filing on 2013-07-08

Fair Value Measurements and Derivative Instruments (Tables)

3 Months Ended

Nov. 30, 2012

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Presented below are the fair values of the Company’s derivatives as of November 30, 2012 and August 31, 2012:


As of November 30, 2012	(Level 1)			(Level 2)		(Level 3)		Total
	(in thousands)
Current assets (Other Current Assets):
Commodity derivatives ⁽¹⁾	$	(407	)	$	—	$	—	$	(407	)

(1)	On the consolidated balance sheet, commodity derivative assets and liabilities have been offset by cash collateral due and paid under master netting arrangements which are recorded together in Other Current Assets. The cash collateral offset was $1.5 million at November 30, 2012.


As of August 31, 2012	(Level 1)			(Level 2)		(Level 3)		Total
	(in thousands)
Current assets (Other Current Assets):
Commodity derivatives ⁽¹⁾	$	(1,422	)	$	—	$	—	$	(1,422	)

(1)	On the consolidated balance sheet, commodity derivative assets and liabilities have been offset by cash collateral due and paid under master netting arrangements which are recorded together in Other Current Assets. The cash collateral offset was $2.6 million at August 31, 2012.

Outstanding Futures Contracts

As of November 30, 2012, the Company had the following outstanding futures contracts:


Corn Futures	4,370,000	Bushels
Natural Gas Futures	970,000	mmbtu	(millions of British thermal units)
Ethanol Futures	4,350,000	Gallons

Fair Values of Company's Derivatives by Contract Type

The following tables provide information about the fair values of the Company’s derivatives, by contract type, as of November 30, 2012 and August 31, 2012.


	Assets					Liabilities
	Balance Sheet Location	Fair Value					Fair Value
In thousands	Balance Sheet Location	Nov 30 2012		Aug 31 2012		Balance Sheet Location	Nov 30 2012		Aug 31 2012
Derivatives designated as hedging instruments:
Cash Flow Hedges:
Corn Futures	Other Current Assets	$	88	$	12	Other Current Assets	$	—	$	126
Ethanol Futures	Other Current Assets		—		—	Other Current Assets		57		706
Fair Value Hedges:
Corn Futures	Other Current Assets		—		—	Other Current Assets		238		602
Derivatives not designated as hedging instruments:
Natural Gas Futures	Other Current Assets		—		—	Other Current Assets		200		—

		$	88	$	12		$	495	$	1,434

Effect of Derivative Instruments on Company's Financial Performance

The following tables provide information about the effect of derivative instruments on the financial performance of the Company for the three month periods ended November 30, 2012 and 2011.


	Amount of Gain (Loss) Recognized in OCI						Amount of Gain (Loss) Reclassified from AOCI into Income					Amount of Gain (Loss) Recognized in Income
	3 Months Ended Nov 30						3 Months Ended Nov 30					3 Months Ended Nov 30
In thousands	2012			2011			2012		2011			2012			2011
Derivatives designated as hedging instruments:
Cash Flow Hedges:
Corn Futures ⁽¹⁾	$	(255	)	$	(1,609	)	$	3,432	$	2,074		$	197		$	(311	)
Natural Gas Futures ⁽¹⁾		—			—			—		(272	)		—			—
Ethanol Futures ⁽¹⁾		753			1,168			93		(834	)		(11	)		—

	$	498		$	(441	)	$	3,525	$	968		$	186		$	(311	)

Fair Value Hedges:
Corn Futures ^(1) (2)												$	15		$	(99	)

Derivatives not designated as hedging instruments:
Natural Gas Futures ⁽¹⁾												$	(171	)	$	(712	)

(1)	Gains and losses reported in cost of sales

(2)	Hedged items are firm commitments and inventory