| Investment in Derivative InstrumentsThe Company’s operations expose it to a variety of market risks, including the effects of changes in commodity prices and changes in interest rates. As part of its risk management process, the Company began entering into commodity swap transactions through regulated commodity exchanges in February 2020. To manage interest rate exposure, the Company has entered into derivative instruments using interest rate swaps. The objective of entering into interest rate swaps is to eliminate the variability of cash flows associated with movements in interest rates over the life of the loans. The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity derivative contracts for the three and nine months ended June 30, 2020 and the fair value of these derivatives as of June 30, 2020 and September 30, 2019 (in thousands):
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For the Three Months Ended June 30, 2020 (unaudited) |
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For the Nine Months Ended June 30, 2020 (unaudited) |
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Change in |
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Change in |
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| Income Statement Classification |
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Realized Gain (Loss) |
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Unrealized Gain (Loss) |
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Total Gain (Loss) |
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Realized Gain (Loss) |
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Unrealized Gain (Loss) |
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Total Gain (Loss) |
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| Cost of revenues |
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$ |
(269) |
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$ |
— |
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$ |
(269) |
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$ |
(290) |
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$ |
— |
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$ |
(290) |
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| Other income (expense) |
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— |
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394 |
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394 |
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— |
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(403) |
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(403) |
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| Interest expense, net |
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(217) |
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(120) |
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(337) |
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(266) |
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(1,586) |
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(1,852) |
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| Total |
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$ |
(486) |
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$ |
274 |
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$ |
(212) |
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$ |
(556) |
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$ |
(1,989) |
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$ |
(2,545) |
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For the Three Months Ended June 30, 2019 (unaudited) |
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For the Nine Months Ended June 30, 2019 (unaudited) |
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Change in |
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Change in |
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| Income Statement Classification |
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Realized Gain (Loss) |
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Unrealized Gain (Loss) |
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Total Gain (Loss) |
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Realized Gain (Loss) |
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Unrealized Gain (Loss) |
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Total Gain (Loss) |
| Cost of revenues |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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| Other income (expense) |
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— |
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— |
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— |
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— |
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— |
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— |
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| Interest expense, net |
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7 |
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(212) |
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(205) |
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12 |
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(543) |
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(531) |
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| Total |
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$ |
7 |
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$ |
(212) |
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$ |
(205) |
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$ |
12 |
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$ |
(543) |
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$ |
(531) |
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June 30, 2020 |
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September 30, 2019 |
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| Balance Sheet Classification |
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(unaudited) |
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| Accrued expense and other current liabilities - commodity swaps |
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$ |
(281) |
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$ |
— |
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| Other long-term liabilities - commodity swaps |
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(122) |
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— |
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| Other long-term liabilities - interest rate swaps |
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(1,897) |
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(311) |
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| Net unrealized gain (loss) position |
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$ |
(2,300) |
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$ |
(311) |
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