Investments

As of August 31, 2013, we owned 79.2% of NCRA. During fiscal 2012, we entered into an agreement to purchase the remaining shares of NCRA from Growmark Inc. (Growmark) and MFA Oil Company (MFA) in separate closings to be held annually through fiscal 2016. Pursuant to this agreement, we made payments during the first quarters of fiscal 2013 and 2014 of $66.0 million and $66.0 million, respectively, increasing our ownership to 84.0%. The present value of the remaining payments is included as mandatorily redeemable noncontrolling interest on our Consolidated Balances Sheets. In addition to these payments, we paid $16.5 million during the first quarter of fiscal 2014 related to the associated crack spread contingent liability. The fair value of the remaining contingent liability was $151.0 million as of November 30, 2013.

We have a 24% ownership in Horizon Milling, LLC and Horizon Milling G.P., flour milling joint ventures with Cargill, Incorporated (Cargill), which are included in Corporate and Other. On March 4, 2013, we entered into a definitive agreement with Cargill and ConAgra Foods, Inc. to form Ardent Mills, a joint venture combining the North American flour milling operations of the three parent companies, including the Horizon Milling, LLC and Horizon Milling G.P. assets, with CHS holding a 12% interest. Upon closing, Ardent Mills is expected to be financed with funds from third-party borrowings, which would not require credit support from the owners. The borrowings are anticipated to be no less than $600 million with proceeds distributed to each owner in proportion to the ownership interests, adjusted for any deviations in specified working capital target amounts. The transaction is expected to close in fiscal 2014, subject to financing and certain other customary closing conditions. In connection with the closing, the parties will also enter into various ancillary and non-compete agreements, including, among other things, an agreement for CHS to supply Ardent Mills with certain wheat and durum products.

We are currently taking steps toward construction of a more than $1 billion nitrogen fertilizer manufacturing plant to be located in Spiritwood, North Dakota, which would provide the region’s farmers with enhanced supplies of crop nutrients essential to raising corn and other crops. We plan to spend up to $25 million on an engineering design study to determine the feasibility of the project. We expect the study to be completed in our second quarter of fiscal 2014.

We have a 50% interest in Ventura Foods, LLC (Ventura Foods), a joint venture which produces and distributes primarily vegetable oil-based products, and is included in Corporate and Other. We account for Ventura Foods as an equity method investment, and as of November 30, 2013, our carrying value of Ventura Foods exceeded our share of their equity by $12.9 million, which represents equity method goodwill. The following provides summarized unaudited financial information for Ventura Foods balance sheets as of November 30, 2013, August 31, 2013 and November 30, 2012, and statements of operations for the three months ended November 30, 2013 and 2012:



	November 30, 2013		August 31, 2013		November 30, 2012
	(Dollars in thousands)
Current assets	$	564,283	$	532,995	$	575,137
Non-current assets	500,670		503,369		464,028
Current liabilities	236,815		216,704		200,357
Non-current liabilities	227,599		226,515		277,943



	For the Three Months Ended November 30,
	2013		2012
	(Dollars in thousands)
Net sales	$	644,990	$	651,487
Gross profit	71,819		62,123
Net earnings	29,514		20,728
Earnings attributable to CHS Inc.	14,757		10,364