Equity Method Investments.

As of June 30, 2013, the Company’s investments accounted for on the equity method of accounting consist of the following: (1) 30 percent interest in ICP, which manufactures alcohol for fuel, industrial and beverage applications, and (2) 50 percent interest in D.M. Ingredients, GmbH, (“DMI”), which produces certain specialty starch and protein ingredients.

Processing completed a series of related transactions on November 20, 2009 pursuant to which Processing contributed its Pekin plant and certain maintenance and repair materials to a newly-formed company, ICP, and then sold 50 percent of the membership interest in ICP to Illinois Corn Processing Holdings (“ICP Holdings”), an affiliate of SEACOR Energy Inc.

On February 1, 2012, ICP Holdings exercised its option to purchase an additional 20 percent of the membership interest in ICP. The sales price was $9,103 and was determined in accordance with the LLC Interest Purchase Agreement. Following its exercise, ICP Holdings owns 70 percent of ICP, is entitled to name 4 of ICP’s 6 advisory board members, and generally has control of ICP’s day to day operations. Processing owns 30 percent of ICP and is entitled to name 2 of ICP’s 6 advisory board members.

Under a marketing agreement between ICP and the Company, (the “Marketing Agreement”), ICP manufactured and supplied food grade and industrial-use alcohol products for the Company, and the Company purchased, marketed and sold such products for a marketing fee. Effective January 1, 2013, the Marketing Agreement expired. The Company has not sourced product from ICP since April 2013.

ICP’s term loan and revolving credit agreement with an affiliate of SEACOR Energy Inc. expired as of December 31, 2012 and has not been renewed. The Company has no further funding requirement to ICP.

The ICP Limited Liability Company Agreement gives the Company and its joint venture partner, ICP Holdings, certain rights to shut down the Pekin plant if ICP operates at an EBITDA loss of $500 in any quarter. Such rights are conditional in certain instances, but are absolute if EBITDA losses aggregate $1,500 over any three consecutive quarters or if ICP’s net working capital is less than $2,500. For the quarter ended March 31, 2013, ICP experienced an EBITDA loss in excess of the $500 threshold. Such shutdown notice was provided on April 18, 2013 under the terms of the ICP Limited Liability Company Agreement, and such notice was rejected by ICP Holdings.

The ICP Limited Liability Company Agreement provides for a new allocation of profit and loss when notice of shutdown is rejected by ICP Holdings. The Company believes that the allocation of net income (loss) for the second quarter of 2013 to be 12 percent to the Company and 88 percent to ICP Holdings. The exercise of this option does not affect the 30 percent equity ownership and would not impact the Company’s allocation if ICP were to be sold. The allocation of net income (loss) will revert to 30 percent to the Company for any quarter following a quarter-end measurement when the shutdown rights as described above are not triggered by the financial results of ICP and the Company's previous election is withdrawn.

Summary Financial Information

Condensed financial information related to the Company’s non-consolidated equity method investment in ICP is shown below.



	Quarter Ended						Year to Date Ended
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
ICP’s Operating results:
Net sales (a)	$	61,377		$	58,938		$	94,227		$	116,991
Cost of sales and expenses (b)	(61,034		)	(59,307		)	(97,114		)	(116,232		)
Net income (loss)	$	343		$	(369	)	$	(2,887	)	$	759


(a)	Includes related party sales to MGPI of $741 and $14,638 for the quarters ended June 30, 2013 and 2012, respectively, and $3,400 and $30,633 for the year to date periods ended June 30, 2013 and 2012, respectively.


(b)	Includes depreciation and amortization of $1,170 and $1,259 for the quarters ended June 30, 2013 and 2012, respectively and $2,340 and $2,519 for the year to date periods ended June 30, 2013 and 2012, respectively.



	June 30, 2013		December 31, 2012
ICP’s Balance Sheet:
Current assets	$	25,937	$	19,972
Noncurrent assets	17,733		19,856
Total assets	$	43,670	$	39,828


Current liabilities	$	23,351	$	16,631
Noncurrent liabilities	212		203
Equity	20,107		22,994
Total liabilities and equity	$	43,670	$	39,828

The Company’s equity in earnings (loss) is as follows:



	Quarter Ended					Year to Date Ended
	June 30, 2013		June 30, 2012			June 30, 2013			June 30, 2012
ICP (30% interest) (a)	$	62	$	(110	)	$	(907	)	$	363
DMI (50% interest)	9		(33		)	36			(69		)
	$	71	$	(143	)	$	(871	)	$	294


(a)	The Company’s ownership percentage of ICP was 50 percent through February 1, 2012, when the Company sold 20 percent of its investment. From February 2, 2012 through June 30, 2013, the Company’s ownership percentage in ICP was 30 percent. From April 1, 2013 through June 30, 2013, the Company's allocation of net income (loss) was 12 percent, as previously discussed.

The Company’s investment in joint ventures is as follows:



	June 30, 2013		December 31, 2012
ICP (30% interest)	$	5,991	$	6,898
DMI (50% interest)	433		403
	$	6,424	$	7,301