Page 94 - New8814 GP 2011_AR-fnl

Basic HTML Version

F-14
F-14
4. GOODWILL
Changes in the carrying amount of goodwill attributable to each business segment dur ing the years ended December 31,
2011 and 2010 were as follows (in thousands):
Ethanol
Production
Marketing and
Distribution
Total
Balance, December 31, 2009
3,945
$
10,598
$
14,543
$
Acquisiton of Global Ethanol
8,582
-
8,582
Balance, December 31, 2010
12,527
10,598
23,125
Adjustment to Global purchase price allocation
15,152
-
15,152
Acquisition of Otter Tail
2,600
-
2,600
Balance, December 31, 2011
30,279
$
10,598
$
40,877
$
Revisions were made during 2011 to the preliminary purchase price allocation for the acquisition of Global Ethanol. The
revisions resulted in a reduction of net property and equipment and an increase in goodwill of $15.2 million. Goodwill related
to the acquisition is tax deductible and results largely from economies of scale expected to be realized in the Company’s
operations.
5. FAIR VALUE DISCLOSURES
The following methods, assumptions and valuation techniques were used in estimating the fair value of the Company’s
financial instruments:
Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to
access at the measurement date. Level 1 unrealized gains and losses on commodity derivatives relate to exchange-traded open
trade equity and option values in the Company’s brokerage accounts.
Level 2 – directly or indirectly observable inputs such as quoted prices for similar assets or liabilities in active markets
other than quoted prices included within Level 1; quoted prices for identical or similar assets in markets that are not active;
and other inputs that are observable or can be substantially corroborated by observable market data by correlation or other
means. Grain inventories held for sale in the agribusiness segment are valued at nearby futures values, plus or minus nearby
basis levels.
Level 3 – unobservable inputs that are supported by little or no market activity and that are a significant component of
the fair value of the assets or liabilities. The Company currently does not have any recurring Level 3 financial instruments.
There have been no changes in valuation techniques and inputs used in measuring fair value. The following tables set
forth the Company’s assets and liabilities by level that were accounted for at fair value as of December 31, 2011 and 2010 (in
thousands):