
(8)	Insurance Claims

Nitrogen Fertilizer Incident

On September 30, 2010, the nitrogen fertilizer plant experienced an interruption in operations due to a rupture of a high-pressure UAN vessel. All operations at the nitrogen fertilizer facility were immediately shut down. No one was injured in the incident. Repairs to the facility as a result of the rupture were substantially complete as of December 31, 2010.

Total gross costs recorded as of June 30, 2011 due to the incident were approximately $11.1 million for repairs and maintenance and other associated costs. Approximately $0.2 million of these costs was recognized during the three months ended June 30, 2011. Approximately $0.6 million of these costs was recognized during the six months ended June 30, 2011. The repairs and maintenance costs incurred are included in direct operating expenses (exclusive of depreciation and amortization). Of the costs incurred approximately $4.5 million was capitalized.

The Company maintains property damage insurance policies which have an associated deductible of $2.5 million. The Company anticipates that substantially all of the repair costs in excess of the $2.5 million deductible should be covered by insurance. These insurance policies also provide coverage for interruption to the business, including lost profits, and reimbursement for other expenses and costs the Company has incurred relating to the damage and losses suffered for business interruption. This coverage, however, only applies to losses incurred after a business interruption of 45 days. In connection with the incident, the Company recorded an insurance receivable of approximately $4.5 million, of which approximately $4.3 million of insurance proceeds was received in December 2010 and the remaining approximately $0.2 million was received in January 2011. The recording of the insurance receivable resulted in a reduction of direct operating expenses (exclusive of depreciation and amortization).

In the first quarter of 2011, the Company submitted a partial business interruption claim for damages and losses, as afforded by its insurance policies. The Company’s insurance carriers agreed to make interim payments totaling approximately $2.9 million. Insurance proceeds were received totaling approximately $2.3 million related to the business interruption claim through March 31, 2011 and the Company received the remaining approximate $0.6 million in April 2011. The proceeds associated with the business interruption claim are included on the Condensed Consolidated Statements of Operations under Insurance recovery — business interruption.

Refinery Incidents

On December 28, 2010 the crude oil refinery experienced an equipment malfunction and small fire in connection with its fluid catalytic cracking unit (“FCCU”), which led to reduced crude throughput. The refinery returned to full operations on January 26, 2011. This interruption adversely impacted the production of refined products for the petroleum business in the first quarter of 2011. Total gross repair and other costs recorded related to the incident as of June 30, 2011 were approximately $8.1 million. No costs were recorded during the three months ended June 30, 2011. As documented above, the Company maintains property damage insurance policies which have an associated deductible of $2.5 million. The Company anticipates that substantially all of the costs in excess of the deductible should be covered by insurance. As of June 30, 2011, the Company has recorded an insurance receivable related to the incident of approximately $5.2 million. The insurance receivable is included in other current assets in the Condensed Consolidated Balance Sheet. The recording of the insurance receivable resulted in a reduction of direct operating expenses (exclusive of depreciation and amortization).

The crude oil refinery experienced a small fire at its continuous catalytic reformer (“CCR”) in May 2011. Total gross repair and other costs recorded related to the incident for the three months ended June 30, 2011 approximated $3.1 million. The Company anticipates that substantially all of the costs in excess of the $2.5 million deductible should be covered by insurance under its property damage insurance policy. As of June 30, 2011, the Company has recorded an insurance receivable of approximately $0.6 million. The insurance receivable is included in other current assets in the Condensed Consolidated Balance Sheet. The recording of the insurance receivable resulted in a reduction of direct operating expenses (exclusive of depreciation and amortization).