Investments

6 Months Ended

Feb. 29, 2012

Investments [Abstract]

Investments

Note 4.    Investments

Agriliance LLC (Agriliance) is owned and governed by us (50%) and Land O’Lakes, Inc. (50%). We account for our Agriliance investment using the equity method of accounting within Corporate and Other. Agriliance is currently winding down its business activities and primarily holds long-term liabilities. During the six months ended February 28, 2011, the Company received $25.0 million of cash distributions from Agriliance as returns of capital for proceeds from the sale of Agriliance retail facilities and the collection of receivables.

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 February 29, 2012, our carrying value of Ventura Foods of $282.3 million exceeded our share of their equity by $13.1 million, of which $0.2 million is being amortized with a remaining life of less than one year. The remaining basis difference represents equity method goodwill. The following provides summarized unaudited financial information for the Ventura Foods balance sheets as of February 29, 2012, August 31, 2011, and February, 28, 2011 and the statements of operations for the three and six months ended February 29, 2012 and February 28, 2011:

	For the Three Months Ended				For the Six Months Ended
	February 29, 2012		February 28, 2011		February 29, 2012		February 28, 2011
Net sales	$	599,330	$	541,439	$	1,264,913	$	1,081,920
Gross profit		59,700		66,581		115,751		129,376
Net income		22,210		29,438		37,312		52,296
Net income attributable to CHS Inc.		11,105		14,719		18,656		26,148
	February 29, 2012		August 31, 2011		February 28, 2011
Current assets	$	572,810	$	585,760	$	566,516
Non-current assets		458,569		464,621		460,177
Current liabilities		207,345		227,199		218,405
Non-current liabilities		285,583		292,368		299,837

In the third quarter of fiscal 2011, we recognized a $119.7 million gain on the sale of our ownership in Multigrain, S.A. In anticipation of this transaction, during our second quarter of fiscal 2011, we reduced a valuation allowance by $24.6 million related to the carryforward of certain capital losses that we believe will be utilized.

TEMCO, LLC (TEMCO) is owned and governed by us (50%) and Cargill, Incorporated (Cargill) (50%). In February 2012, we entered into an amended and restated agreement to expand the scope of the original agreement between us and Cargill. Pursuant to the terms of the agreement, we each agreed to commit to sell all of our feedgrains, wheat, oilseeds and by-product origination that are tributary to the Pacific Northwest, United States (Pacific Northwest) to TEMCO and to use TEMCO as our exclusive export-marketing vehicle for such grains exported through the Pacific Northwest for a term of 25 years. Cargill’s Tacoma, Washington facility will continue to be subleased to TEMCO and, additionally, we agreed to sublease our Kalama, Washington facility to TEMCO and Cargill agreed to lease their Irving facility in Portland, Oregon to TEMCO to provide TEMCO with more capacity to conduct this business.