Segment Reporting

9 Months Ended

May 31, 2012

Segment Reporting [Abstract]

Segment Reporting

Note 10.    Segment Reporting

We have aligned our segments based on an assessment of how our businesses operate and the products and services they sell.

Our Energy segment produces and provides primarily for the wholesale distribution of petroleum products and transportation of those products. Our Ag Business segment purchases and further processes or resells grains and oilseeds originated by our members or third parties, and also serves as a wholesaler and retailer of crop inputs. Corporate and Other primarily represents the non-consolidated wheat milling and packaged food joint ventures, as well as our business solutions operations, which consists of commodities hedging, insurance and financial services related to crop production.

Corporate administrative expenses are allocated to each business segment, and Corporate and Other, based on direct usage for services that can be tracked, such as information technology and legal, and other factors or considerations relevant to the costs incurred.

Many of our business activities are highly seasonal and operating results will vary throughout the year. Historically, our income is generally lowest during the second fiscal quarter and highest during the third fiscal quarter. Our business segments are subject to varying seasonal fluctuations. For example, in our Ag Business segment, agronomy and country operations businesses experience higher volumes and income during the spring planting season and in the fall, which corresponds to harvest. Also in our Ag Business segment, our grain marketing operations are subject to fluctuations in volumes and earnings based on producer harvests, world grain prices and demand. Our Energy segment generally experiences higher volumes and profitability in certain operating areas, such as refined products, in the summer and early fall when gasoline and diesel fuel usage is highest and is subject to global supply and demand forces. Other energy products, such as propane, may experience higher volumes and profitability during the winter heating and crop drying seasons.

Our revenues, assets and cash flows are affected by global market prices for commodities such as petroleum products, natural gas, grains, oilseeds, crop nutrients and flour. Changes in market prices for commodities that we purchase without a corresponding change in the selling prices of those products can affect revenues and operating earnings. Commodity prices are affected by a wide range of factors beyond our control, including the weather, crop damage due to disease or insects, drought, the availability and adequacy of supply, government regulations and policies, world events, and general political and economic conditions.

While our revenues and operating results are derived from businesses and operations which are wholly-owned and majority-owned, a portion of our business operations are conducted through companies in which we hold ownership interests of 50% or less and do not control the operations. We account for these investments primarily using the equity method of accounting, wherein we record our proportionate share of income or loss reported by the entity as equity income from investments, without consolidating the revenues and expenses of the entity in our Consolidated Statements of Operations. In our Ag Business segment, this principally includes our 50% ownership in TEMCO. In Corporate and Other, these investments principally include our 50% ownership in Ventura Foods and our 24% ownership in Horizon Milling LLC (Horizon Milling) and Horizon Milling G.P.

Reconciling Amounts represent the elimination of revenues between segments. Such transactions are executed at market prices to more accurately evaluate the profitability of the individual business segments.

Segment information for the three and nine months ended May 31, 2012 and 2011 is as follows:

	Energy			Ag Business			Corporate and Other			Reconciling Amounts			Total
For the Three Months Ended May 31, 2012
Revenues	$	3,117,272		$	7,999,120		$	17,643		$	(111,080	)	$	11,022,955
Cost of goods sold		2,729,383			7,789,055			(659	)		(111,080	)		10,406,699
Gross profit		387,889			210,065			18,302			—			616,256
Marketing, general and administrative		41,439			70,208			17,577						129,224
Operating earnings		346,450			139,857			725			—			487,032
Interest, net		53,450			14,385			3,283						71,118
Equity income from investments		(1,715	)		(6,469	)		(16,620	)					(24,804	)
Income before income taxes	$	294,715		$	131,941		$	14,062		$	—		$	440,718
Intersegment revenues	$	(111,080	)							$	111,080		$	—
For the Three Months Ended May 31, 2011
Revenues	$	3,038,831		$	7,507,069		$	16,615		$	(90,843	)	$	10,471,672
Cost of goods sold		2,772,132			7,351,495			(600	)		(90,843	)		10,032,184
Gross profit		266,699			155,574			17,215			—			439,488
Marketing, general and administrative		36,448			50,737			16,411						103,596
Operating earnings		230,251			104,837			804			—			335,892
Gain on investments					(119,680	)		(9,042	)					(128,722	)
Interest, net		566			15,848			3,113						19,527
Equity income from investments		(1,711	)		(1,109	)		(17,859	)					(20,679	)
Income before income taxes	$	231,396		$	209,778		$	24,592		$	—		$	465,766
Intersegment revenues	$	(90,843	)							$	90,843		$	—
For the Nine Months Ended May 31, 2012
Revenues	$	9,433,098		$	20,457,343		$	50,793		$	(340,308	)	$	29,600,926
Cost of goods sold		8,516,284			19,939,254			(2,144	)		(340,308	)		28,113,086
Gross profit		916,814			518,089			52,937			—			1,487,840
Marketing, general and administrative		112,610			203,739			51,951						368,300
Operating earnings		804,204			314,350			986			—			1,119,540
Loss on investments					446									446
Interest, net		75,755			41,136			9,665						126,556
Equity income from investments		(5,658	)		(16,719	)		(46,508	)					(68,885	)
Income before income taxes	$	734,107		$	289,487		$	37,829		$	—		$	1,061,423
Intersegment revenues	$	(340,308	)							$	340,308		$	—
Goodwill at May 31, 2012	$	1,165		$	58,758		$	6,898					$	66,821
Capital expenditures	$	198,158		$	113,493		$	3,964					$	315,615
Depreciation and amortization	$	80,622		$	66,845		$	14,153					$	161,620
Total identifiable assets at May 31, 2012	$	3,944,347		$	5,865,709		$	1,663,298					$	11,473,354
For the Nine Months Ended May 31, 2011
Revenues	$	7,989,988		$	18,538,574		$	48,888		$	(264,555	)	$	26,312,895
Cost of goods sold		7,495,015			18,043,219			(2,271	)		(264,555	)		25,271,408
Gross profit		494,973			495,355			51,159			—			1,041,487
Marketing, general and administrative		100,461			155,328			48,593						304,382
Operating earnings		394,512			340,027			2,566			—			737,105
Gain on investments					(119,746	)		(9,042	)					(128,788	)
Interest, net		3,494			42,873			8,619						54,986
Equity income from investments		(4,844	)		(34,467	)		(60,934	)					(100,245	)
Income before income taxes	$	395,862		$	451,367		$	63,923		$	—		$	911,152
Intersegment revenues	$	(264,555	)							$	264,555		$	—
Goodwill at May 31, 2011	$	1,165		$	15,687		$	6,898					$	23,750
Capital expenditures	$	136,778		$	74,778		$	2,582					$	214,138
Depreciation and amortization	$	91,399		$	56,727		$	11,758					$	159,884
Total identifiable assets at May 31, 2011	$	3,227,081		$	6,133,469		$	2,888,363					$	12,248,913