XML 21 R17.htm IDEA: XBRL DOCUMENT

Investments and Restricted Deposits

9 Months Ended

Oct. 31, 2011

Investment And Deposits Disclosure [Text Block]

Note 12. Investments and Restricted Deposits

The Company has approximately $743,000 at October 31, 2011 and January 31, 2011 on deposit with the Florida Department of Financial Services to secure its obligation to fulfill future obligations related to extended warranty contracts sold in the state of Florida. As such, this deposit is restricted from use for general corporate purposes.

In addition to the deposit with the Florida Department of Financial Services, the Company has $857,000 at October 31, 2011 and January 31, 2011 invested in a money market mutual fund to satisfy Florida Department of Financial Services regulations. As such, this investment is restricted from use for general corporate purposes.

The following table summarizes equity method investments at October 31, 2011 and January 31, 2011 (amounts in thousands):


Entity	Ownership Percentage			Carrying Amount October 31, 2011		Carrying Amount January 31, 2011


Big River		10	%	$	32,847	$	29,443
Patriot		23	%		25,082		21,829
NuGen		48	%		22,826		16,077

Total Equity Method Investments				$	80,755	$	67,349

The following table summarizes income recognized from equity method investments for the periods presented (amounts in thousands):


	Three Months Ended October 31,				Nine Months Ended October 31,
	2011		2010		2011		2010


Big River	$	1,552	$	1,543	$	4,406	$	3,506
Patriot		1,985		1,536		3,358		3,504
NuGen		2,747		615		8,063		615

Total	$	6,284	$	3,694	$	15,827	$	7,625

Effective July 1, 2010, the Company purchased a 48% equity interest in NuGen which operates an ethanol producing facility in Marion, South Dakota with an annual nameplate capacity of 100 million gallons. The Company’s investment included $2,410,361 paid at closing to the then sole Class A member of NuGen and $6,805,055 contributed directly to NuGen. At July 1, 2010 an additional $6,451,300 was due based upon cash distributions from NuGen that the Company is entitled to until such balance is paid (“Contingent Consideration”). At October 31, 2011 the Contingent Consideration gross balance due was $3,377,000. The carrying value of the Contingent Consideration was $2,265,000 at October 31, 2011, of which $62,000 is included in other current liabilities and $2,203,000 is included in other long-term liabilities on the Consolidated Condensed Balance Sheet. At July 1, 2010, the Company estimated the fair value of the Contingent Consideration to be $3,578,000. This liability was recorded at the acquisition date and has been reduced as payments are made by the Company to the seller of the 48% equity interest in NuGen. See Note 19 for a discussion of subsequent events affecting the contingent consideration liability.

Undistributed earnings of equity method investees totaled approximately $30.8 million and $18.4 million at October 31, 2011 and January 31, 2011, respectively. During the first nine months of fiscal years 2011 and 2010, the Company received dividends from equity method investees of approximately $2.3 million and $1.1 million, respectively.

Summarized financial information for each of the Company’s equity method investees is presented in the following table for the three and nine months ended October 31, 2011 and 2010, on a delayed basis of one month (amounts in thousands):


	Three Months Ended October 31, 2011						Nine Months Ended October 31, 2011
	Big River		Patriot		NuGen		Big River		Patriot		NuGen


Net sales and revenue	$	314,200	$	94,580	$	87,620	$	845,926	$	284,546	$	255,671
Gross profit	$	32,849	$	10,241	$	7,433	$	64,349	$	19,775	$	22,425
Income from continuing operations	$	15,959	$	8,513	$	5,831	$	45,319	$	14,401	$	16,822
Net income	$	15,959	$	8,513	$	5,831	$	45,319	$	14,401	$	16,822


	Three Months Ended October 31, 2010						Nine Months Ended October 31, 2010
	Big River		Patriot		NuGen		Big River		Patriot		NuGen


Net sales and revenue	$	175,174	$	62,834	$	55,093	$	482,514	$	169,051	$	55,093
Gross profit	$	19,115	$	8,438	$	3,532	$	46,514	$	19,174	$	3,532
Income from continuing operations	$	15,756	$	6,585	$	1,616	$	35,923	$	15,027	$	1,616
Net income	$	15,756	$	6,585	$	1,616	$	35,923	$	15,027	$	1,616

Patriot, Big River and NuGen have debt agreements that limit and restrict amounts the companies can pay in the form of dividends or advances to owners. The restricted net assets of Patriot, Big River and NuGen combined at October 31, 2011 and January 31, 2011 are approximately $425.2 million and $355.1 million, respectively. The Company’s proportionate share of restricted net assets of Patriot, Big River and NuGen combined at October 31, 2011 and January 31, 2011 are approximately $68.6 million and $52.4 million, respectively.

On January 31, 2011, the Company sold 814,000 of its membership units in Levelland Hockley County Ethanol, LLC (“Levelland Hockley”) for $1, reducing the ownership interest in Levelland Hockley from 56% to 49%. As a result, the Company no longer had a controlling financial interest in Levelland Hockley, and, therefore, effective January 31, 2011, the Company deconsolidated Levelland Hockley and began using the equity method of accounting. In connection with the deconsolidation, the Company recorded its remaining non controlling equity interest and debt investments at fair value. The Company’s estimate of fair value for all of its investments in Levelland Hockley was $0 at October 31, 2011 and January 31, 2011. On April 27, 2011, Levelland Hockley voluntarily filed for protection under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court, Northern District of Texas. As a result, the Company no longer can exercise significant influence over Levelland Hockley and began using the cost method of accounting. There was no change in the carrying value of the Company’s investments in Levelland Hockley as a result of the change to the cost method of accounting.