Acquisitions

12 Months Ended

Dec. 31, 2011

Acquisitions

Note D – Acquisitions

In August 2010, a wholly-owned subsidiary of the Company purchased an unfinished ethanol production facility in Hereford, Texas, for $40,000,000. The Company completed construction of the facility and commenced operations near the end of the first quarter of 2011. The Company allocated the purchase price for the Hereford facility based on the fair value of the assets acquired as presented in the following table.

(Thousands of dollars)
Land and land improvements	$	2,379
Buildings and improvements		639
Machinery and transportation equipment		36,982
Total purchase price – Hereford ethanol facility	$	40,000

A wholly-owned subsidiary of the Company purchased an ethanol production facility in Hankinson, North Dakota, on October 1, 2009. The facility has a rated capacity to produce 110 million gallons of ethanol per annum. The $92,000,000 purchase price was financed with an $82,000,000 nonrecourse loan held by former owners. The loan bore interest at 5.0% per year and was repayable in 2014. This loan was repaid in full in September 2010. Revenue and expenses associated with the facility have been included in the Company’s Consolidated Statement of Income beginning on the date of acquisition. The Company allocated the purchase price for the Hankinson facility based on the fair value of the assets acquired as presented in the following table.

(Thousands of dollars)
Inventory	$	2,469
Land and land improvements		11,833
Buildings and improvements		9,819
Machinery and transportation equipment		67,879
Total purchase price – Hankinson ethanol facility	$	92,000