Derivative Instruments

12 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Precious Metal and Commodity Inventories

As of December 31, 2016, the Company had the following outstanding forward contracts with settlement dates through January 2017. There were no futures contracts outstanding at December 31, 2016.

			Notional Value
Commodity	Amount		($ in millions)
Silver	607,684	ounces	$	9.7
Gold	400	ounces	$	0.5
Copper	275,000	pounds	$	0.6
Tin	40	metric tons	$	0.8

Fair Value Hedges. Of the total forward contracts outstanding, 452,684 ounces of silver and substantially all the copper contracts are designated and accounted for as fair value hedges.

Economic Hedges. The remaining outstanding forward contracts for silver, and all the contracts for gold and tin, are accounted for as economic hedges.

The forward contracts were made with a counterparty rated A+ by Standard & Poors. Accordingly, the Company has determined that there is minimal credit risk of default. The Company estimates the fair value of its derivative contracts through the use of market quotes or with the assistance of brokers when market information is not available. The Company maintains collateral on account with the third-party broker. Such collateral consists of both cash that varies in amount depending on the value of open contracts, as well as ounces of precious metal held on account by the broker.

Debt Agreements

H&H Group entered into two interest rate swap agreements to reduce its exposure to interest rate fluctuations. Both agreements expired in February 2016. See Note 11 - "Credit Facilities" for further discussion of the terms of these arrangements.

Effect of Derivative Instruments in the Consolidated Statements of Operations - Income/(Expense)

(in thousands)		Year Ended
		December 31,
Derivative	Statement of Operations Line	2016			2015			2014
Commodity contracts	Cost of goods sold	$	(1,520	)	$	1,467		$	2,655
	Total derivatives designated as hedging instruments	(1,520		)	1,467			2,655
Commodity contracts	Cost of goods sold	(257		)	246			131
Commodity contracts	Realized and unrealized gain on derivatives	148			588			1,307
Interest rate swap agreements	Interest expense	—			(77		)	(156		)
	Total derivatives not designated as hedging instruments	(109		)	757			1,282
	Total derivatives	$	(1,629	)	$	2,224		$	3,937

Fair Value of Derivative Instruments on the Consolidated Balance Sheets - Asset/(Liability)

(in thousands)		December 31,			December 31,
Derivative	Balance Sheet Location	2016			2015
Commodity contracts	(Accrued liabilities)/Prepaid and other current assets	$	(111	)	$	197
	Total derivatives designated as hedging instruments	(111		)	197
Commodity contracts	Prepaid and other current assets	3			18
Interest rate swap agreements	Other non-current liabilities	—			(30		)
	Total derivatives not designated as hedging instruments	3			(12		)
	Total derivatives	$	(108	)	$	185