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Summary of Significant Accounting Policies | 3 Months Ended
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Nov. 30, 2013
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Accounting Policies Basis of Presentation and Revisions The unaudited Consolidated Balance Sheets as of November 30, 2013 and 2012, the Consolidated Statements of Operations for the three months ended November 30, 2013 and 2012, the Consolidated Statements of Comprehensive Income for the three months ended November 30, 2013 and 2012, and the Consolidated Statements of Cash Flows for the three months ended November 30, 2013 and 2012, reflect in the opinion of our management, all normal recurring adjustments necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented. The results of operations and cash flows for interim periods are not necessarily indicative of results for a full fiscal year because of, among other things, the seasonal nature of our businesses. Our Consolidated Balance Sheet data as of August 31, 2013, has been derived from our audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). The consolidated financial statements include our accounts and the accounts of all of our wholly-owned and majority-owned subsidiaries and limited liability companies, which is primarily National Cooperative Refinery Association (NCRA), included in our Energy segment. The effects of all significant intercompany accounts and transactions have been eliminated. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended August 31, 2013, included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission. We previously reported certain derivative assets and liabilities on a net basis on our Consolidated Balance Sheets. In connection with the issuance of our August 31, 2013 financial statements, we determined that such derivatives should have been reported on a gross basis and have therefore revised our November 30, 2012 Consolidated Balance Sheet, which resulted in an increase in both derivative assets and derivative liabilities of $244.2 million. The Consolidated Statement of Cash Flows for the three months ended November 30, 2012, has also been revised for this change with no impact to net operating, investing or financing cash flows. We do not believe these revisions are material. In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-11, “Disclosures about Offsetting Assets and Liabilities.” ASU No. 2011-11, and the subsequent amendments issued in ASU No. 2013-01, "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities," create new disclosure requirements about the nature of an entity’s rights of setoff and related arrangements associated with certain financial instruments and recognized derivative instruments. The disclosure requirements in this update are effective for annual reporting periods, and interim periods within those years, beginning on or after January 1, 2013. The required disclosures have been included in Derivative Financial Instruments and Hedging Activities below. In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." ASU No. 2013-02 requires an entity to provide information about the effects of significant reclassifications out of accumulated other comprehensive income, by component, either on the face of the financial statements or in the notes to the financial statements and is intended to help improve the transparency of changes in other comprehensive income. ASU 2013-02 does not amend any existing requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 became effective for our annual and interim reporting periods beginning in fiscal 2014. The required disclosures have been included in Note 6, Equities. Derivative Financial Instruments and Hedging Activities Our derivative instruments primarily consist of commodity and freight futures and forward contracts and, to a minor degree, may include foreign currency and interest rate swap contracts. These contracts are economic hedges of price risk, but are not designated or accounted for as hedging instruments for accounting purposes, with the exception of certain interest rate swap contracts which are accounted for as cash flow hedges. Derivative instruments are recorded on our Consolidated Balance Sheets at fair values as discussed in Note 9, Fair Value Measurements. Even though we have netting arrangements for our exchange-traded futures and options contracts and certain over-the-counter (OTC) contracts, we report our derivatives on a gross basis on our Consolidated Balance Sheets. Our associated margin deposits are also reported on a gross basis. Many of our derivative contracts with futures and options brokers require us to make both initial margin deposits of cash or other assets and subsequent deposits, depending on changes in commodity prices, in order to comply with applicable regulations. Our margin deposit assets are held by external brokers in segregated accounts and will be used to settle the associated derivative contracts on their specified settlement dates. As of November 30, 2013, August 31, 2013 and November 30, 2012, we had the following outstanding purchase and sales contracts:
| November 30, 2013 |  | August 31, 2013 |  | November 30, 2012
| Purchase Contracts |  | Sales Contracts |  | Purchase Contracts |  | Sales Contracts |  | Purchase Contracts |  | Sales Contracts
| (Units in thousands)
Grain and oilseed - bushels | 671,414 |  | 944,517 |  | 521,979 |  | 806,295 |  | 674,866 |  | 1,018,510
Energy products - barrels | 27,352 |  | 33,110 |  | 12,626 |  | 21,312 |  | 7,483 |  | 19,817
Soy products - tons | 12 |  | 885 |  | 24 |  | 847 |  | 21 |  | 360
Crop nutrients - tons | 986 |  | 1,204 |  | 968 |  | 1,050 |  | 1,270 |  | 1,428
Ocean and barge freight - metric tons | 2,054 |  | 295 |  | 1,225 |  | 151 |  | 1,288 |  | 210
Rail freight - rail cars | 201 |  | 48 |  | 220 |  | 43 |  | 164 |  | 30
Livestock - pounds |  |  | 12,480 |  |  |  | 17,280 |  | 2,680 |  | 3,280
The following tables present the gross amounts of derivative assets, derivative liabilities, and margin deposits (cash collateral) recorded on the Consolidated Balance Sheets along with the related amounts permitted to be offset in accordance with GAAP. We have elected not to offset derivative assets and liabilities when we have the right of offset under ASC 210-10 or when the instruments are subject to master netting arrangements under ASC 815-10-45.
| November 30, 2013
|  |  | Amounts Not Offset on the Consolidated Balance Sheet but Eligible for Offsetting |  |
| Gross Amounts Recognized |  | Cash Collateral |  | Derivative Instruments |  | Net Amounts
| (Dollars in thousands)
Derivative Assets: |  |  |  |  |  |  |
Commodity and freight derivatives | $ | 364,454 |  |  | $ | 268 |  |  | $ | 41,126 |  |  | $ | 323,060 |
Foreign exchange derivatives | 6,776 |  |  |  |  | 1,060 |  |  | 5,716 |
Interest rate derivatives - hedge | 18,854 |  |  |  |  |  |  | 18,854 |
| $ | 390,084 |  |  | $ | 268 |  |  | $ | 42,186 |  |  | $ | 347,630 |
Derivative Liabilities: |  |  |  |  |  |  |
Commodity and freight derivatives | $ | 405,346 |  |  | $ | 7,374 |  |  | $ | 41,126 |  |  | $ | 356,846 |
Foreign exchange derivatives | 1,647 |  |  |  |  | 1,060 |  |  | 587 |
Interest rate derivatives - non-hedge | 245 |  |  |  |  |  |  | 245 |
| $ | 407,238 |  |  | $ | 7,374 |  |  | $ | 42,186 |  |  | $ | 357,678 |
| August 31, 2013
|  |  | Amounts Not Offset on the Consolidated Balance Sheet but Eligible for Offsetting |  |
| Gross Amounts Recognized |  | Cash Collateral |  | Derivative Instruments |  | Net Amounts
| (Dollars in thousands)
Derivative Assets: |  |  |  |  |  |  |
Commodity and freight derivatives | $ | 468,673 |  |  |  |  | $ | 53,107 |  |  | $ | 415,566 |
Foreign exchange derivatives | 7,079 |  |  |  |  | 957 |  |  | 6,122 |
Interest rate derivatives - hedge | 24,135 |  |  |  |  |  |  | 24,135 |
Interest rate derivatives - non-hedge | 3 |  |  |  |  | 3 |  |  |
| $ | 499,890 |  |  |  |  | $ | 54,067 |  |  | $ | 445,823 |
Derivative Liabilities: |  |  |  |  |  |  |
Commodity and freight derivatives | $ | 458,893 |  |  | $ | 1,591 |  |  | $ | 53,107 |  |  | $ | 404,195 |
Foreign exchange derivatives | 5,925 |  |  |  |  | 957 |  |  | 4,968 |
Interest rate derivatives - non-hedge | 248 |  |  |  |  | 3 |  |  | 245 |
| $ | 465,066 |  |  | $ | 1,591 |  |  | $ | 54,067 |  |  | $ | 409,408 |
| November 30, 2012
|  |  | Amounts Not Offset on the Consolidated Balance Sheet but Eligible for Offsetting |  |
| Gross Amounts Recognized |  | Cash Collateral |  | Derivative Instruments |  | Net Amounts
| (Dollars in thousands)
Derivative Assets: |  |  |  |  |  |  |
Commodity and freight derivatives | $ | 632,544 |  |  |  |  | $ | 46,578 |  |  | $ | 585,966 |
Foreign exchange derivatives | 3,140 |  |  |  |  | 1 |  |  | 3,139 |
| $ | 635,684 |  |  |  |  | $ | 46,579 |  |  | $ | 589,105 |
Derivative Liabilities: |  |  |  |  |  |  |
Commodity and freight derivatives | $ | 518,377 |  |  | $ | 10,087 |  |  | $ | 46,578 |  |  | $ | 461,712 |
Foreign exchange derivatives | 6,234 |  |  |  |  | 1 |  |  | 6,233 |
Interest rate derivatives - non-hedge | 483 |  |  |  |  |  |  | 483 |
| $ | 525,094 |  |  | $ | 10,087 |  |  | $ | 46,579 |  |  | $ | 468,428 |
The following table sets forth the pretax gains (losses) on derivatives not accounted for as hedging instruments that have been included in our Consolidated Statements of Operations for the three months ended November 30, 2013 and 2012.
| Location of Gain (Loss) |  | 2013 |  | 2012
|  |  | (Dollars in thousands)
Commodity and freight derivatives | Cost of goods sold |  | $ | (19,789 | ) |  | $ | (328,284 | )
Foreign exchange derivatives | Cost of goods sold |  | (422 | ) |  | (1,685 | )
Interest rate derivatives | Interest, net |  | (1 | ) |  | (9 | )
|  |  | $ | (20,212 | ) |  | $ | (329,978 | )
In fiscal 2013, we entered into derivative contracts designated as cash flow hedging instruments that expire in fiscal 2014 with a $1.2 million gain expected to be included in earnings during the next 12 months. As of November 30, 2013, August 31, 2013 and November 30, 2012, the unrealized gains deferred to accumulated other comprehensive loss were as follows:
| November 30, 2013 |  | August 31, 2013 |  | November 30, 2012
| (Dollars in thousands)
Gains included in accumulated other comprehensive loss, net of tax expense of $7.2 million and $9.2 million, respectively | 11,663 |  |  | 14,930 |  |  |
Goodwill and Other Intangible Assets Goodwill was $85.3 million, $85.1 million and $82.9 million on November 30, 2013, August 31, 2013 and November 30, 2012, respectively, and is included in other assets on our Consolidated Balance Sheets. Intangible assets subject to amortization primarily include customer lists, trademarks and agreements not to compete, and are amortized over their respective useful lives (ranging from 2 to 30 years). Excluding goodwill, the gross carrying amount of our intangible assets was $85.1 million, $81.5 million and $81.7 million on November 30, 2013, August 31, 2013 and November 30, 2012, respectively. Accumulated amortization was $48.5 million, $46.0 million and $38.2 million as of November 30, 2013, August 31, 2013 and November 30, 2012, respectively. Intangible assets acquired were $3.0 million during the three-month period ended November 30, 2013. Intangible assets acquired were $1.0 million during the three-month period ended November 30, 2012. Total amortization expense for intangible assets during the three-month periods ended November 30, 2013 and 2012, was $2.3 million and $2.5 million, respectively. The estimated annual amortization expense related to intangible assets subject to amortization for the next five years is as follows:
| (Dollars in thousands) |
Year 1 | $ | 7,511 |
Year 2 | 6,516 |
Year 3 | 6,066 |
Year 4 | 4,376 |
Year 5 | 2,043 |
Thereafter | 9,398 |
| $ | 35,910 |
In our Energy segment, major maintenance activities (turnarounds) at our two refineries are accounted for under the deferral method. Turnarounds are the scheduled and required shutdowns of refinery processing units. The costs related to the significant overhaul and refurbishment activities include materials and direct labor costs. The costs of turnarounds are deferred when incurred and amortized on a straight-line basis over the period of time estimated to lapse until the next turnaround occurs, which is generally 2 to 4 years. The amortization expense related to turnaround costs are included in cost of goods sold in our Consolidated Statements of Operations. The selection of the deferral method, as opposed to expensing the turnaround costs when incurred, results in deferring recognition of the turnaround expenditures. The deferral method also results in the classification of the related cash outflows as investing activities in our Consolidated Statements of Cash Flows, whereas expensing these costs as incurred, would result in classifying the cash outflows as operating activities. Supplier Advance Payments Beginning November 30, 2013, supplier advance payments are reported as a separate line item on our Consolidated Balance Sheets. Prior period amounts have been reclassified accordingly. Supplier advance payments include amounts paid for in-transit grain purchases from suppliers and amounts paid to crop nutrient suppliers to lock in future supply and pricing. Customer Advance Payments Customer advance payments primarily consist of amounts received from customers for in-transit grain shipments and amounts received from crop nutrients customers for future shipments. Recent Accounting Pronouncements In February 2013, the FASB issued ASU No. 2013-04, "Liabilities." ASU No. 2013-04 requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this ASU also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are currently evaluating the impact that the adoption will have on our consolidated financial statements in fiscal 2015.

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- Definition The entire disclosure for all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18726-107790 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 22 -Paragraph 8 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18861-107790 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18743-107790 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18854-107790 + Details
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