Land O Lakes 8-K/A Results of Operations and Financial Condition

LAND O’LAKES, INC.
Consolidated Balance Sheets
($ in thousands)
As of December 31,

	2007			2006
Assets
Current assets:
Cash and cash equivalents	$	116,839		$	79,707
Receivables, net		1,006,707			604,580
Inventories		964,515			471,396
Prepaid expenses		856,033			350,423
Other current assets		76,178			57,904
Total current assets		3,020,272			1,564,010
Investments		303,978			251,089
Property, plant and equipment, net		551,752			665,069
Goodwill, net		318,224			326,527
Other intangibles, net		119,167			95,043
Other assets		118,438			113,191
Total assets	$	4,431,831		$	3,014,929
Liabilities and Equities
Current liabilities:
Notes and short-term obligations	$	132,170		$	58,300
Current portion of long-term debt		5,182			10,972
Accounts payable		1,150,353			529,850
Customer advances		926,240			419,516
Accrued expenses		337,476			223,603
Patronage refunds and other member equities payable		28,065			18,626
Total current liabilities		2,579,486			1,260,867
Long-term debt		661,602			639,059
Employee benefits and other liabilities		202,400			173,446
Minority interests		6,175			8,830
Commitments and contingencies
Equities:
Capital stock		1,701			1,828
Member equities		937,126			904,183
Accumulated other comprehensive loss		(61,931	)		(66,276	)
Retained earnings		155,272			92,992
Total equities		1,032,168			932,727
Total liabilities and equities	$	4,481,831		$	3,014,929

LAND O’LAKES, INC.
Consolidated Statements of Operations
($ in thousands)

	(Unaudited)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	Restated
	2007			2006			2007			2006
Net sales	$	2,586,023		$	1,893,687		$	8,924,895		$	7,102,289
Cost of sales		2,388,066			1,681,533			8,157,684			6,441,368
Gross profit		197,957			212,154			767,211			660,921
Selling, general and administrative		174,184			125,756			622,231			515,557
Restructuring and impairment charges		2,249			1,772			3,970			21,169
Gain on insurance settlement		—			—			(5,941	)		—
Earnings from operations		21,524			84,626			146,951			124,195
Interest expense, net		15,404			13,635			48,918			58,360
Other expense (income), net		522			(1,167	)		(37,157	)		(18,791	)
Equity in (earnings) losses of affiliated companies		(36,870	)		1,675			(68,183	)		(13,674	)
Minority interest in earnings of subsidiaries		597			322			1,469			1,449
Earnings before income taxes		41,871			70,161			201,904			96,851
Income tax expense		15,441			17,975			38,107			7,906
Net earnings	$	26,430		$	52,186		$	163,797		$	88,945

LAND O’LAKES, INC.
Consolidated Statements of Cash Flows
($ in thousands)

	Twelve Months Ended
	December 31,
	2007			2006
Cash flows from operating activities:
Net earnings	$	163,797		$	88,945
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		84,140			95,239
Amortization of deferred financing costs		2,253			2,226
Bad debt expense		22,579			1,421
Proceeds from patronage revolvement received		6,706			9,163
Non-cash patronage income		(2,543	)		(1,827	)
Insurance recovery — business interruption		4,551			—
Deferred income tax (benefit) expense		(29,655	)		13,500
(Increase) decrease in other assets		(3,766	)		2,893
Increase in other liabilities		1,975			2,895
Restructuring and impairment charges		3,970			21,169
Gain from divestiture of businesses		(28,474	)		(8,987	)
Gain on sale of investments		(8,683	)		(7,980	)
Gain on insurance settlement		(5,941	)		—
Equity in earnings of affiliated companies		(68,183	)		(13,674	)
Dividends from investments in affiliated companies		33,699			4,736
Minority interests		1,469			1,449
Other		(3,638	)		(3,610	)
Changes in current assets and liabilities, net of acquisitions and divestitures:
Receivables		(294,145	)		38,156
Inventories		(206,950	)		(19,587	)
Prepaids and other current assets		(512,438	)		(60,948	)
Accounts payable		586,712			(51,624	)
Customer advances		506,724			23,643
Accrued expenses		74,619			59,332
Net cash provided by operating activities		328,778			196,530
Cash flows from investing activities:
Additions to property, plant and equipment		(91,061	)		(83,763	)
Acquisitions		(2,930	)		(88,060	)
Investments in affiliates		(331,674	)		(4,950	)
Distributions from investments in affiliated companies		25,000			—
Net settlement on repositioning investment in joint venture		(87,875	)		—
Net proceeds from divestiture of businesses		212,101			42,466
Proceeds from sale of investments		626			9,274
Proceeds from sale of property, plant and equipment		10,502			1,754
Insurance proceeds for replacement assets		8,635			—
Change in notes receivable		(18,406	)		15,781
Other		(202	)		7,183
Net cash used by investing activities		(275,284	)		(100,315	)
Cash flows from financing activities:
Increase (decrease) in short-term debt		75,399			(98,541	)
Proceeds from issuance of long-term debt		8,337			16,451
Principal payments on long-term debt and capital lease obligations		(41,798	)		(36,549	)
Payments for redemption of member equities		(58,049	)		(80,614	)
Payments for debt issuance costs		—			(1,543	)
Other		(251	)		4,933
Net cash used by financing activities		(16,362	)		(195,863	)
Net cash used by operating activities of discontinued operations		—			(349	)
Net increase (decrease) in cash and cash equivalents		37,132			(99,997	)
Cash and cash equivalents at beginning of the year		79,707			179,704
Cash and cash equivalents at end of the year	$	116,839		$	79,707

LAND O’LAKES, INC.
EBITDA
($ in thousands)
(Unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2007			2006			2007
Earnings before income taxes	$	41,871		$	70,161		$	201,904
Interest expense, net		15,404			13,635			48,918
Depreciation		19,915			21,505			72,926
Amortization		2,711			2,463			11,214
Total EBITDA		79,901			107,764			334,962
Unrealized hedging gains		(5,225	)		(9,000	)		(12,856	)
Gain on insurance settlement		—			—			(5,941	)
Gain on divestitures		—			(924	)		(28,474	)
Loss (gain) on sale of investments		522			—			(8,683	)
Agronomy one-time charges		726			—			4,553
Agronomy debt extinguishment		141			—			2,273
Agronomy impairment within Agriliance		42			—			10,042
Restructuring and impairment charges		2,249			1,814			3,970
Golden Oval Eggs reserves		22,001			—			22,001
Normalized EBITDA	$	100,357		$	99,654		$	321,847