XML 59 R8.htm IDEA: XBRL DOCUMENT

INVESTMENTS AND DEPOSITS

12 Months Ended

Jan. 31, 2014

INVESTMENTS AND DEPOSITS

The Company’s equity investments are accounted for under ASC 323 “Investments-Equity Method and Joint Ventures”. The following table summarizes equity method investments at January 31, 2014 and 2013 (amounts in thousands):

Entity	Ownership Percentage			Carrying Amount January 31, 2014		Carrying Amount January 31, 2013

Big River Resources, LLC		10	%	$	40,042	$	32,438
Patriot Holdings, LLC		27	%		31,147		27,521

Total Equity Method Investments				$	71,189	$	59,959

The Company invested $20 million in Big River, a holding company for several entities, for a 10% ownership interest. Big River Resources West Burlington, LLC, a wholly owned subsidiary of Big River, operates an ethanol manufacturing plant in West Burlington, Iowa. During fiscal year 2013, the plant shipped 104 million gallons of ethanol. The plant has been in operation since 2004. Big River Resources Galva, LLC, a wholly owned subsidiary of Big River, operates an ethanol manufacturing plant in Galva, Illinois. During fiscal year 2013, the plant shipped 113 million gallons of ethanol. The plant has been in operation since 2009. Big River Resources United Energy, LLC, a 50.5% owned subsidiary of Big River, operates an ethanol manufacturing plant in Dyersville, Iowa. During fiscal year 2013, the plant shipped 117 million gallons of ethanol. Big River acquired its interest in this plant in 2009. Big River Resources Boyceville, LLC, a wholly owned subsidiary of Big River operates an ethanol manufacturing plant in Boyceville, Wisconsin. During fiscal year 2013, the plant shipped 56 million gallons of ethanol. Big River acquired its interest in this plant in 2011. The Company recorded income of approximately $8.8 million, $0.3 million and $6.9 million as its share of earnings from Big River during fiscal years 2013, 2012 and 2011, respectively. The Company received dividends of approximately $1.2 million, $2.2 million and $2.0 million from Big River during fiscal years 2013, 2012 and 2011, respectively. At January 31, 2014, the carrying value of the investment in Big River is approximately $40.0 million; the amount of underlying equity in the net assets of Big River is approximately $38.7 million. The excess of the carrying value of the investment over the underlying equity in the net assets is accounted for as goodwill and is recorded within equity method investments on the accompanying Consolidated Balance Sheets.

The Company invested $16 million in Patriot for a 27% ownership interest. Patriot operates an ethanol manufacturing plant in Annawan, Illinois. During fiscal year 2013, the plant shipped 121 million gallons of ethanol. The plant has been in operation since 2008. The Company recorded income of approximately $8.4 million, $0.4 million and $5.3 million as its share of earnings from Patriot during fiscal years 2013, 2012 and 2011, respectively. The Company received no dividends from Patriot during fiscal year 2012. The Company received dividends of approximately $4.6 million and $1.6 million from Patriot during fiscal years 2013 and 2011, respectively. At January 31, 2014, the carrying value of the investment in Patriot is approximately $31.1 million; the amount of underlying equity in the net assets of Patriot is approximately $30.2 million. The excess of the carrying value of the investment over the underlying equity in the net assets is accounted for as goodwill and capitalized interest and is recorded within equity method investments on the accompanying Consolidated Balance Sheets. Capitalized interest is amortized as a basis difference over the life of the asset.

Effective July 1, 2010, the Company purchased a 48% equity interest in NuGen which operates an ethanol producing facility in Marion, South Dakota. On November 1, 2011, the Company acquired an additional 50% equity interest in NuGen. Following the purchase, the Company owns all of the outstanding Class A membership interest units in NuGen, representing a 100% voting interest and a 99% equity interest in NuGen. The Company recorded income (under the equity method of accounting) of approximately $9.3 million as its share of earnings from NuGen during fiscal year 2011. Effective November 1, 2011, the Company ceased using the equity method of accounting and began consolidating the results of NuGen.

Undistributed earnings of equity method investees totaled approximately $32.6 million and $21.2 million at January 31, 2014 and 2013, respectively.

Summarized financial information for each of the Company’s equity method investees, as of their fiscal year end is presented in the following table (amounts in thousands):

As of December 31, 2013

	Patriot		Big River

Current assets	$	26,540	$	164,278
Non current assets		159,081		348,884
Total assets	$	185,621	$	513,162
Current liabilities	$	16,034	$	68,769
Long-term liabilities		57,847		12,503
Total liabilities	$	73,881	$	81,272
Noncontrolling interests	$	—	$	45,045

As of December 31, 2012

	Patriot		Big River

Current assets	$	22,302	$	139,879
Non current assets		161,319		375,803
Total assets	$	183,621	$	515,682
Current liabilities	$	20,201	$	90,865
Long-term liabilities		65,867		87,301
Total liabilities	$	86,068	$	178,166
Noncontrolling interests	$	—	$	29,007

Summarized financial information for each of the Company’s equity method investees is presented in the following table for the years ended December 31, 2013, 2012 and 2011. The summarized information for NuGen is presented for the ten months ended October 31, 2011 (amounts in thousands):

Year Ended December 31, 2013

	Patriot		Big River

Net sales and revenue	$	377,532	$	1,292,120
Gross profit	$	37,411	$	124,327
Income from continuing operations	$	31,518	$	90,729
Net income	$	31,518	$	90,729

Year Ended December 31, 2012

	Patriot		Big River

Net sales and revenue	$	365,302	$	1,135,956
Gross profit	$	7,685	$	20,651
Income from continuing operations	$	1,320	$	2,799
Net income	$	1,320	$	2,799

Year Ended December 31, 2011 and Period from January 1, 2011 through October 31, 2011 (NuGen)

	Patriot		Big River		NuGen

Net sales and revenue	$	377,250	$	1,162,308	$	256,973
Gross profit	$	29,207	$	105,207	$	24,490
Income from continuing operations	$	22,615	$	71,384	$	18,133
Net income	$	22,615	$	71,384	$	18,133

Patriot and Big River have debt agreements that limit and restrict amounts the entities can pay in the form of dividends or advances to owners. The restricted net assets of Patriot and Big River combined at January 31, 2014 are approximately $366.2 million. At January 31, 2014, the Company’s proportionate share of restricted net assets of Patriot and Big River combined is approximately $51.7 million.