Segment Reporting

12 Months Ended

Aug. 31, 2012

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has aligned the segments based on an assessment of how the businesses are operated and the products and services they sell.

The Energy segment produces and provides primarily for the wholesale distribution of petroleum products and transportation of those products. The Ag segment purchases and further processes or resells grains and oilseeds originated by the country operations business, by the Company’s member cooperatives and by 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 the 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 the Company’s business activities are highly seasonal and operating results will vary throughout the year. Historically, the Company’s income is generally lowest during the second fiscal quarter and highest during the third fiscal quarter. For example, in the Ag 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 the Ag segment, the grain marketing operations are subject to fluctuations in volumes and earnings based on producer harvests, world grain prices and demand. The Company’s 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.

The Company’s revenues, assets and cash flows can be significantly 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 the Company purchases 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 the Company’s 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 the Company’s revenues and operating results are derived from businesses and operations which are wholly-owned and majority-owned, a portion of the Company’s business operations are conducted through companies in which it holds ownership interests of 50% or less and does not control the operations. The Company accounts for these investments primarily using the equity method of accounting, wherein the Company records its 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 its Consolidated Statements of Operations. In the Ag segment, this principally includes the Company’s 50% ownership in TEMCO. In Corporate and Other, these investments principally include the Company’s 50% ownership in Ventura Foods and its 24% ownership in 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 years ended August 31, 2012, 2011 and 2010 is as follows:

	Energy			Ag			Corporate and Other			Reconciling Amounts			Total
	(Dollars in thousands)
For the year ended August 31, 2012:
Revenues	$	12,816,542		$	28,181,445		$	68,882		$	(467,583	)	$	40,599,286
Cost of goods sold	11,514,463			27,544,040			(2,777		)	(467,583		)	38,588,143
Gross profit	1,302,079			637,405			71,659			—			2,011,143
Marketing, general and administrative	155,786			273,757			68,690						498,233
Operating earnings	1,146,293			363,648			2,969			—			1,512,910
Loss on investments	4,008			1,049			408						5,465
Interest, net	122,302			57,915			13,046						193,263
Equity income from investments	(7,537		)	(22,737		)	(72,115		)				(102,389		)
Income before income taxes	$	1,027,520		$	327,421		$	61,630		$	—		$	1,416,571
Intersegment revenues	$	(467,583	)							$	467,583		$	—
Goodwill	$	1,165		$	73,630		$	6,898					$	81,693
Capital expenditures	$	294,560		$	168,825		$	5,226					$	468,611
Depreciation and amortization	$	109,496		$	92,538		$	17,598					$	219,632
Total identifiable assets at August 31, 2012	$	3,684,571		$	6,816,809		$	2,921,771					$	13,423,151
For the year ended August 31, 2011:
Revenues	$	11,467,381		$	25,767,033		$	64,809		$	(383,389	)	$	36,915,834
Cost of goods sold	10,694,687			25,204,301			(2,611		)	(383,389		)	35,512,988
Gross profit	772,694			562,732			67,420			—			1,402,846
Marketing, general and administrative	142,708			229,369			66,421						438,498
Operating earnings (losses)	629,986			333,363			999			—			964,348
Loss (gain) on investments	1,027			(118,344		)	(9,412		)				(126,729		)
Interest, net	5,829			57,438			11,568						74,835
Equity income from investments	(6,802		)	(40,482		)	(84,130		)				(131,414		)
Income before income taxes	$	629,932		$	434,751		$	82,973		$	—		$	1,147,656
Intersegment revenues	$	(383,389	)							$	383,389		$	—
Goodwill	$	1,165		$	18,346		$	6,898					$	26,409
Capital expenditures	$	198,692		$	107,866		$	4,112					$	310,670
Depreciation and amortization	$	126,018		$	79,231		$	15,445					$	220,694
Total identifiable assets at August 31, 2011	$	3,883,205		$	5,276,537		$	3,057,268					$	12,217,010
For the year ended August 31, 2010:
Revenues	$	8,799,890		$	16,715,055		$	48,522		$	(295,536	)	$	25,267,931
Cost of goods sold	8,437,504			16,258,679			(3,237		)	(295,536		)	24,397,410
Gross profit	362,386			456,376			51,759			—			870,521
Marketing, general and administrative	123,834			187,640			55,108						366,582
Operating earnings (losses)	238,552			268,736			(3,349		)	—			503,939
Gain on investments	(269		)	(421		)	(28,743		)				(29,433		)
Interest, net	9,939			33,039			15,346						58,324
Equity income from investments	(5,554		)	(31,248		)	(71,985		)				(108,787		)
Income before income taxes	$	234,436		$	267,366		$	82,033		$	—		$	583,835
Intersegment revenues	$	(295,536	)							$	295,536		$	—
Goodwill	$	1,165		$	14,975		$	6,898					$	23,038
Capital expenditures	$	197,637		$	122,468		$	4,157					$	324,262
Depreciation and amortization	$	118,071		$	69,170		$	15,681					$	202,922

The Company's international sales to geographic regions are presented by selling location. Given the Company's international expansion initiatives in fiscal 2012, the Company re-analyzed the way sales are reported by regions and believes that presenting sales by the location in which the sale originated is the most accurate depiction of the Company's international presence. As the Company had previously presented international sales based on the location to which the product was transported, all previous years have been updated to reflect the new methodology. International sales for the years ended August 31, 2012, 2011 and 2010 are as follows:

	2012		2011		2010
	(Dollars in millions)
Asia	$	290	$	6	$	31
Europe	1,064		277		119
U.S. Only	37,503		35,287		24,274
South America	1,444		1,066		593
	$	40,301	$	36,636	$	25,017