Derivative Instruments

12 Months Ended

Dec. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

The Company has entered into heating oil and soybean oil futures, swaps and options (commodity derivative contracts) to reduce the risk of price volatility related to anticipated purchases of feedstock raw materials and to protect gross profit margins from potentially adverse effects of price volatility on biomass-based diesel sales where prices are set at a future date. All of the Company’s derivatives are recorded at fair value on the Consolidated Balance Sheets. Unrealized gains and losses on commodity futures, swaps and options contracts used to risk-manage feedstock purchases or biomass-based diesel inventory are recognized as a component of biomass-based diesel costs of goods sold reflected in current results of operations.

At December 31, 2017, the net notional volumes of heating oil and soybean oil covered under the open commodity derivative contracts were 82.8 million gallons and 78.3 million pounds, respectively.

The Company offsets the fair value amounts recognized for its commodity derivative contracts with cash collateral with the same counterparty under a master netting agreement. The net position is presented within Prepaid expenses and other assets in the Consolidated Balance Sheets, see "Note 8 – Other Assets". As of December 31, 2017, the Company posted $8,798 of collateral associated with its commodity-based derivatives with a net liability position of $7,189.

The following tables provide details regarding the Company’s derivative financial instruments:

	December 31, 2017						December 31, 2016
	Assets			Liabilities			Assets			Liabilities
Gross amounts of commodity derivative contracts recognized at fair value	$	812		$	8,001		$	1,272		$	3,511
Cash collateral	8,799			—			9,366			—
Total gross amount recognized	9,611			8,001			10,638			3,511
Gross amounts offset	(8,001		)	(8,001		)	(3,511		)	(3,511		)
Net amount reported in the Consolidated Balance Sheets	$	1,610		$	—		$	7,127		$	—

The following table sets forth the pre-tax gains (losses) included in the Consolidated Statements of Operations:

	Location of Gain (Loss) Recognized in income	2017			2016			2015
Commodity derivatives	Cost of goods sold – Biomass-based diesel	$	(23,437	)	$	(35,386	)	$	35,983