| Segment Reporting | Segment Reporting We are an integrated agricultural cooperative, providing grain, foods and energy resources to businesses and consumers on a global basis. We provide a wide variety of products and services, from initial agricultural inputs such as fuels, farm supplies, crop nutrients and crop protection products, to agricultural outputs that include grain and oilseed, processed grain and oilseed, renewable fuels and food products. We define our operating segments in accordance with ASC Topic 280, Segment Reporting , to reflect the manner in which our chief operating decision maker, our Chief Executive Officer, evaluates performance and allocates resources in managing the business. We have aggregated those operating segments into three reportable segments: Energy, Ag and Nitrogen Production. Our Energy segment produces and provides primarily for the wholesale distribution of petroleum products and transportation of those products. Our Ag segment purchases and further processes or resells grain and oilseed originated by our country operations business, by our member cooperatives and by third parties; serves as a wholesaler and retailer of crop inputs; and produces and markets ethanol. Our Nitrogen Production segment consists of our equity method investment in CF Nitrogen and allocated expenses. Our supply agreement with CF Nitrogen entitles us to purchase up to a specified quantity of granular urea and UAN annually from CF Nitrogen. Corporate and Other represents our financing and hedging businesses, which primarily consists of a U.S. Commodity Futures Trading Commission-regulated futures commission merchant ("FCM") for commodities hedging and financial services related to crop production. Our nonconsolidated investments in Ventura Foods and Ardent Mills are also included in our Corporate and Other category. As of August 31, 2021, Ventura Foods was reported as a separate Foods reportable segment. Reported segment results and balances prior to fiscal 2022 have been recast to reflect the addition of Ventura Foods to our Corporate and Other category. There were no changes to the composition of our Energy, Ag or Nitrogen Production segments as a result of the addition of Ventura Foods to the Corporate and Other category. Corporate administrative expenses and interest are allocated to each reportable segment and Corporate and Other, based on direct use of services, 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 our operating results vary throughout the year. Our revenues generally trend lower during the second and fourth fiscal quarters and higher during the first and third fiscal quarters; however, our income before income taxes does not necessarily follow the same trend, due to weather and other events that can impact profitability. For example, in our Ag segment, our country operations business generally experiences higher volumes and revenues during the fall harvest and spring planting seasons, which generally correspond to our first and third fiscal quarters, respectively. Additionally, our agronomy business generally experiences higher volumes and revenues during the spring planting season. Our global grain and processing operations are subject to fluctuations in volume and revenues based on producer harvests, world grain prices, demand and international trade relationships. Our Energy segment generally experiences higher volumes and revenues in certain operating areas, such as refined products, in the spring, summer and early fall when gasoline and diesel fuel use by agricultural producers is highest and is subject to global supply and demand forces. Other energy products, such as propane, generally experience higher volumes and revenues during the winter heating and fall crop-drying seasons. Our revenues, assets and cash flows can be significantly affected by global market prices for commodities such as petroleum products, natural gas, grain, oilseed, 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 weather, crop damage due to plant disease or insects, drought, availability and adequacy of supply, availability of reliable rail and river transportation networks, outbreaks of disease, government regulations and policies, global trade disputes, wars and civil unrest, and general political and economic conditions. While our revenues and operating results are derived primarily from businesses and operations that are wholly-owned or subsidiaries and limited liability companies in which we have a controlling interest, a portion of our business operations are conducted through companies in which we hold ownership interests of 50% or less or 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 segment, this includes our 50% interest in TEMCO. In our Nitrogen Production segment, this consists of our approximate 8% membership interest (based on product tons) in CF Nitrogen. In Corporate and Other, this principally includes our 50% ownership in Ventura Foods and our 12% ownership in Ardent Mills. See Note 6, Investments , for more information related to our equity method investments. 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, 2022, 2021 and 2020, is presented in the tables below. Energy Ag Nitrogen Production Corporate Reconciling Total Year ended August 31, 2022 (Dollars in thousands) Revenues, including intersegment revenues $ 10,964,304 $ 37,489,203 $ — $ 45,278 $ (707,119) $ 47,791,666 Intersegment revenues (669,530) (28,992) — (8,597) 707,119 — Revenues, net of intersegment revenues $ 10,294,774 $ 37,460,211 $ — $ 36,681 $ — $ 47,791,666 Operating earnings (loss) 633,832 588,070 (55,600) (37,216) 1,129,086 Interest expense 6,768 59,118 48,110 5,105 (4,945) 114,156 Other (income) expense (3,474) (46,277) 11,487 9,559 4,945 (23,760) Equity (income) losses from investments 13,987 (82,357) (593,182) (109,775) (771,327) Income before income taxes $ 616,551 $ 657,586 $ 477,985 $ 57,895 $ — $ 1,810,017 Capital expenditures $ 116,136 $ 203,851 $ — $ 34,457 $ — $ 354,444 Depreciation and amortization $ 250,972 $ 173,488 $ — $ 37,512 $ — $ 461,972 Total assets as of August 31, 2022 $ 4,325,121 $ 8,159,191 $ 2,641,604 $ 3,698,891 $ — $ 18,824,807 Energy Ag Nitrogen Production Corporate Reconciling Total Year ended August 31, 2021 (Dollars in thousands) Revenues, including intersegment revenues $ 6,812,478 $ 32,058,064 $ — $ 46,476 $ (468,985) $ 38,448,033 Intersegment revenues (437,217) (22,722) — (9,046) 468,985 — Revenues, net of intersegment revenues $ 6,375,261 $ 32,035,342 $ — $ 37,430 $ — $ 38,448,033 Operating earnings (loss) (15,775) 265,362 (35,432) (8,358) 205,797 Interest expense 1,113 65,099 44,461 1,804 (7,912) 104,565 Other income (2,819) (47,452) (2,489) (14,711) 7,912 (59,559) Equity income from investments (3,473) (50,381) (198,439) (102,236) (354,529) Income (loss) before income taxes $ (10,596) $ 298,096 $ 121,035 $ 106,785 $ — $ 515,320 Capital expenditures $ 112,160 $ 148,770 $ — $ 56,864 $ — $ 317,794 Depreciation and amortization $ 245,273 $ 182,210 $ — $ 34,247 $ — $ 461,730 Total assets as of August 31, 2021 $ 4,286,677 $ 7,451,559 $ 2,683,652 $ 3,154,387 $ — $ 17,576,275 Energy Ag Nitrogen Production Corporate Reconciling Total Year ended August 31, 2020 (Dollars in thousands) Revenues, including intersegment revenues $ 5,820,154 $ 22,940,712 $ — $ 55,567 $ (410,068) $ 28,406,365 Intersegment revenues (389,020) (14,613) — (6,435) 410,068 — Revenues, net of intersegment revenues $ 5,431,134 $ 22,926,099 $ — $ 49,132 $ — $ 28,406,365 Operating earnings (loss) 219,861 82,543 (33,497) 8,358 — 277,265 Interest expense 308 71,682 45,255 11,806 (12,074) 116,977 Other income (3,005) (35,560) (2,635) (10,749) 12,074 (39,875) Equity income from investments (2,759) (7,303) (127,954) (48,699) — (186,715) Income before income taxes $ 225,317 $ 53,724 $ 51,837 $ 56,000 $ — $ 386,878 Capital expenditures $ 175,169 $ 158,903 $ — $ 84,287 $ — $ 418,359 Depreciation and amortization $ 245,983 $ 196,510 $ — $ 34,882 $ — $ 477,375 We have international sales, which are predominantly in our Ag segment. The following table presents our sales, based on the geographic location of the subsidiary making the sale, for the years ended August 31, 2022, 2021 and 2020: 2022 2021 2020 (Dollars in thousands) North America (a) $ 45,039,981 $ 36,540,178 $ 25,360,077 South America 371,493 242,848 1,559,380 Europe, Middle East and Africa (EMEA) 1,093,974 955,605 774,068 Asia Pacific (APAC) 1,286,218 709,402 712,840 Total $ 47,791,666 $ 38,448,033 $ 28,406,365 (a) Revenues in North America are substantially all attributed to revenues from the United States. Long-lived assets include our property, plant and equipment, finance lease assets and capitalized major maintenance costs. The following table presents long-lived assets by geographical region based on physical location: 2022 2021 (Dollars in thousands) United States $ 4,821,483 $ 4,944,574 International 70,997 62,072 Total $ 4,892,480 $ 5,006,646 |
