XML 23 R8.htm IDEA: XBRL DOCUMENT

INVESTMENTS

12 Months Ended

Jan. 31, 2018

2. INVESTMENTS

The Company’s equity method investment in Big River is accounted for under ASC 323. The following table summarizes the investment at January 31, 2018 and 2017 (amounts in thousands):

	January 31, 2018			January 31, 2017

Carrying amount	$	34,549		$	37,833

Ownership percentage		10.3	%		9.7	%

The Company invested $20.0 million in Big River which is a holding company for several entities. 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 2017, the plant shipped 108 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 2017, the plant shipped 126 million gallons of ethanol. The plant has been in operation since 2009. Big River Resources United Energy, LLC, a 55.3% owned subsidiary of Big River, operates an ethanol manufacturing plant in Dyersville, Iowa. During fiscal year 2017, the plant shipped 130 million gallons of ethanol. Big River acquired a 50.5% ownership interest in this plant in 2009 and increased its ownership to 55.3% during fiscal year 2015. Big River Resources Boyceville, LLC, a wholly owned subsidiary of Big River, operates an ethanol manufacturing plant in Boyceville, Wisconsin. During fiscal year 2017, the plant shipped 57 million gallons of ethanol. Big River acquired its interest in this plant in 2011. The Company recorded income of approximately $3.2 million, $6.1 million and $6.0 million as its share of earnings from Big River during fiscal years 2017, 2016 and 2015, respectively. The Company received dividends of approximately $6.5 million, $7.0 million and $7.5 million from Big River during fiscal years 2017, 2016 and 2015, respectively. At January 31, 2018, the carrying value of the investment in Big River is approximately $34.5 million; the amount of underlying equity in the net assets of Big River is approximately $32.2 million.

On June 1, 2015, Patriot Holdings, LLC (“Patriot”) and a subsidiary of CHS Inc. (“CHS”) completed a merger that resulted in CHS acquiring 100% of the ownership interest in Patriot. The Company received a cash payment of approximately $45.5 million at the closing, representing its proportionate share of the merger consideration for its 27% ownership interest. The total merger consideration was approximately $196 million in cash subject to certain adjustments and certain escrow holdbacks. In connection with this transaction, the Company recognized a gain of approximately $10.4 million during fiscal year 2015 (included in the ethanol and by-products segment). During fiscal year 2016, the Company received proceeds of approximately $4.5 million as partial payment for certain escrow holdbacks and adjustments to the purchase price. As a result, the Company recognized approximately $0.2 million as gain on sale of investment during the first quarter of fiscal year 2016. The Company does not expect any further proceeds or gain/loss on sale of investment to be significant.

The Company recorded income of approximately $2.9 million as its share of earnings from Patriot during fiscal years 2015. The Company received dividends of approximately $3.6 million from Patriot during fiscal year 2015.

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

Big River	December 31, 2017		December 31, 2016

Current assets	$	149,436	$	175,299
Non current assets		261,443		311,450
Total assets	$	410,879	$	486,749
Current liabilities	$	49,130	$	50,798
Long-term liabilities		10,599		—
Total liabilities	$	59,729	$	50,798
Noncontrolling interests	$	38,412	$	52,336

Summarized financial information for each of the Company’s equity method investees is presented in the following table for the years ended December 31, 2017, 2016 and 2015 (amounts in thousands):

	Year Ended December 31,
Big River	2017		2016

Net sales and revenue	$	817,112	$	851,434
Gross profit	$	60,259	$	88,841
Income from continuing operations	$	32,243	$	63,292
Net income	$	32,243	$	63,292

Year Ended December 31, 2015

	Patriot (1)		Big River

Net sales and revenue	$	115,614	$	863,554
Gross profit	$	14,424	$	85,451
Income from continuing operations	$	11,100	$	62,193
Net income	$	11,100	$	62,193

(1)

For Patriot, results are for the five month period ended May 31, 2015 as the Company’s equity interest in Patriot was sold June 1, 2015.

Big River has debt agreements that limit and restrict amounts the entity can pay in the form of dividends or advances to owners. The restricted net assets of Big River at January 31, 2018 are approximately $202.6 million. At January 31, 2018, the Company’s proportionate share of restricted net assets of Big River is approximately $20.9 million.