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7. COMMITMENTS AND CONTINGENCIES
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2012
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| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||
| 7. COMMITMENTS AND CONTINGENCIES |
Purchase Commitments – At June 30, 2012, the Company had fixed-price purchase contracts with its suppliers to purchase $5,465,000 of ethanol and indexed-price contracts to purchase 134,000 gallons of ethanol. These contracts will be satisfied throughout the remainder of 2012.
Sales Commitments – At June 30, 2012, the Company had entered into sales contracts with its major customers to sell certain quantities of ethanol and WDG. The volumes indicated in the indexed-price contracts table will be sold at publicly-indexed sales prices determined by market prices in effect on their respective transaction dates (in thousands):
Litigation – General – The Company is subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, and others. When the Company is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible and the amount involved could be material. While there can be no assurances, the Company does not expect that any of its pending legal proceedings will have a material financial impact on the Company’s operating results. |
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