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Segment Reporting | 12 Months Ended
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Aug. 31, 2018
Segment Reporting [Abstract] |
Segment Reporting | Segment Reporting We are an integrated agricultural enterprise, 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 grains and oilseeds, grain and oilseed processing and food products, and the production and marketing of ethanol. 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 grains and oilseeds 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 solely of our equity method investment in CF Nitrogen, which was completed in February 2016 and which entitles us, pursuant to a supply agreement that we entered with CF Nitrogen, to purchase up to a specified annual quantity of granular urea and UAN annually from CF Nitrogen. The addition of the Nitrogen Production segment had no impact on historically reported segment results and balances as this segment came into existence in fiscal 2016. There were no changes to the composition of our Energy or Ag segments as a result of the addition of the Nitrogen Production segment. Corporate and Other primarily represents our non-consolidated wheat milling operations and packaged food joint ventures, as well as our business solutions operations, which primarily consists of commodities hedging, financial services related to crop production, and insurance which was disposed of in May 2018. Our investment in Ventura Foods is included in our Corporate and Other category. Corporate administrative expenses and interest 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 vary throughout the year. For example, in our Ag segment, our crop nutrients and country operations businesses generally experience higher volumes and income during the spring planting season and in the fall, which corresponds to harvest. Our grain marketing operations are also subject to fluctuations in volume 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 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 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 segment, this principally includes our 50% ownership in TEMCO. In our Nitrogen Production segment, this consists of our approximate 10% 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 5, Investments for more information related to CF Nitrogen, Ventura Foods and Ardent Mills. 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, 2018, 2017, and 2016 is presented in the tables below.
| Energy |  | Ag |  | Nitrogen Production |  | Corporate and Other |  | Reconciling Amounts |  | Total
| (Dollars in thousands)
For the year ended August 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues, including intersegment revenues | $ | 8,068,717 |  |  | $ | 25,052,395 |  |  | $ | — |  |  | $ | 64,516 |  |  | $ | (502,281 | ) |  | $ | 32,683,347 |
Operating earnings (loss) | 390,092 |  |  | 95,883 |  |  | (20,619 | ) |  | (8,270 | ) |  | — |  |  | 457,086 |
(Gain) loss on disposal of business | (65,862 | ) |  | (7,707 | ) |  | — |  |  | (58,247 | ) |  | — |  |  | (131,816 | )
Interest expense | 14,627 |  |  | 94,256 |  |  | 50,499 |  |  | (7,712 | ) |  | (2,468 | ) |  | 149,202 |
Other (income) loss | (7,718 | ) |  | (66,316 | ) |  | (3,061 | ) |  | (3,388 | ) |  | 2,468 |  |  | (78,015 | )
Equity (income) loss from investments | (3,063 | ) |  | 1,392 |  |  | (106,895 | ) |  | (44,949 | ) |  | — |  |  | (153,515 | )
Income (loss) before income taxes | $ | 452,108 |  |  | $ | 74,258 |  |  | $ | 38,838 |  |  | $ | 106,026 |  |  | $ | — |  |  | $ | 671,230 |
Intersegment revenues | $ | (479,598 | ) |  | $ | (14,914 | ) |  | $ | — |  |  | $ | (7,769 | ) |  | $ | 502,281 |  |  | $ | — |
Capital expenditures | $ | 248,207 |  |  | $ | 77,962 |  |  | $ | — |  |  | $ | 29,243 |  |  | $ | — |  |  | $ | 355,412 |
Depreciation and amortization | $ | 230,230 |  |  | $ | 218,716 |  |  | $ | — |  |  | $ | 29,104 |  |  | $ | — |  |  | $ | 478,050 |
Total assets as of August 31, 2018 | $ | 4,168,239 |  |  | $ | 6,534,777 |  |  | $ | 2,758,668 |  |  | $ | 2,919,494 |  |  | $ | — |  |  | $ | 16,381,178 |
| Energy |  | Ag |  | Nitrogen Production |  | Corporate and Other |  | Reconciling Amounts |  | Total
| (Dollars in thousands)
For the year ended August 31, 2017: (As restated) |  |  |  |  |  |  |  |  |  |  |
Revenues, including intersegment revenues | $ | 6,620,680 |  |  | $ | 25,738,740 |  |  | $ | — |  |  | $ | 95,414 |  |  | $ | (417,408 | ) |  | $ | 32,037,426 |
Operating earnings (loss) | 75,138 |  |  | (268,946 | ) |  | (18,430 | ) |  | 38,212 |  |  | — |  |  | (174,026 | )
(Gain) loss on disposal of business | — |  |  | 2,190 |  |  | — |  |  | — |  |  | — |  |  | 2,190 |
Interest expense | 18,365 |  |  | 71,986 |  |  | 48,893 |  |  | 33,250 |  |  | (1,255 | ) |  | 171,239 |
Other (income) loss | (1,164 | ) |  | (65,684 | ) |  | (30,534 | ) |  | (3,824 | ) |  | 1,255 |  |  | (99,951 | )
Equity (income) loss from investments | (3,181 | ) |  | (7,277 | ) |  | (66,530 | ) |  | (60,350 | ) |  | — |  |  | (137,338 | )
Income (loss) before income taxes | $ | 61,118 |  |  | $ | (270,161 | ) |  | $ | 29,741 |  |  | $ | 69,136 |  |  | $ | — |  |  | $ | (110,166 | )
Intersegment revenues | $ | (392,842 | ) |  | $ | (20,312 | ) |  | $ | — |  |  | $ | (4,254 | ) |  | $ | 417,408 |  |  | $ | — |
Capital expenditures | $ | 260,543 |  |  | $ | 146,139 |  |  | $ | — |  |  | $ | 37,715 |  |  | $ | — |  |  | $ | 444,397 |
Depreciation and amortization | $ | 223,229 |  |  | $ | 232,443 |  |  | $ | — |  |  | $ | 24,551 |  |  | $ | — |  |  | $ | 480,223 |
Total assets as of August 31, 2017 | $ | 4,290,618 |  |  | $ | 6,359,058 |  |  | $ | 2,781,610 |  |  | $ | 2,387,636 |  |  | $ | — |  |  | $ | 15,818,922 |
| Energy |  | Ag |  | Nitrogen Production |  | Corporate and Other |  | Reconciling Amounts |  | Total
| (Dollars in thousands)
For the year ended August 31, 2016: (As restated) |  |  |  |  |  |  |  |  |  |  |
Revenues, including intersegment revenues | $ | 5,743,882 |  |  | $ | 24,896,354 |  |  | $ | — |  |  | $ | 92,725 |  |  | $ | (377,701 | ) |  | $ | 30,355,260 |
Operating earnings (loss) | 246,105 |  |  | 36,649 |  |  | (6,193 | ) |  | 15,882 |  |  | — |  |  | 292,443 |
Interest expense | (22,244 | ) |  | 82,085 |  |  | 34,437 |  |  | 30,647 |  |  | (11,221 | ) |  | 113,704 |
Other (income) loss | (287 | ) |  | (53,044 | ) |  | — |  |  | (5,499 | ) |  | 11,221 |  |  | (47,609 | )
Equity (income) loss from investments | (4,739 | ) |  | (7,644 | ) |  | (74,700 | ) |  | (88,694 | ) |  | — |  |  | (175,777 | )
Income (loss) before income taxes | $ | 273,375 |  |  | $ | 15,252 |  |  | $ | 34,070 |  |  | $ | 79,428 |  |  | $ | — |  |  | $ | 402,125 |
Intersegment revenues | $ | (335,003 | ) |  | $ | (40,336 | ) |  | $ | — |  |  | $ | (2,362 | ) |  | $ | 377,701 |  |  | $ | — |
Capital expenditures | $ | 376,841 |  |  | $ | 260,865 |  |  | $ | — |  |  | $ | 55,074 |  |  | $ | — |  |  | $ | 692,780 |
Depreciation and amortization | $ | 193,525 |  |  | $ | 230,172 |  |  | $ | — |  |  | $ | 23,795 |  |  | $ | — |  |  | $ | 447,492 |
We have international sales, which are predominantly in our Ag segment. The following table presents our sales, based on the geographic locations in which the sales originated, for the years ended August 31, 2018, 2017, and 2016:
| 2018 |  | (As Restated) 2017 |  | (As Restated) 2016
| (Dollars in thousands)
North America | $ | 29,475,724 |  |  | $ | 29,068,842 |  |  | $ | 26,571,367 |
South America | 1,569,330 |  |  | 1,441,316 |  |  | 1,847,284 |
Europe, the Middle East and Africa (EMEA) | 536,501 |  |  | 652,308 |  |  | 878,407 |
Asia Pacific (APAC) | 1,101,792 |  |  | 874,960 |  |  | 1,058,202 |
Total | $ | 32,683,347 |  |  | $ | 32,037,426 |  |  | $ | 30,355,260 |
Included in North American revenues are revenues from the United States of $29.5 billion, $29.0 billion and $26.5 billion for the years ended August 31, 2018, 2017, and 2016, respectively. Long-lived assets include our property, plant and equipment, capital lease assets and capitalized major maintenance costs. The following table presents long-lived assets by geographical region:
| 2018 |  | 2017
| (Dollars in thousands)
United States | $ | 5,185,572 |  |  | $ | 5,359,270 |
International | 86,927 |  |  | 102,170 |
Total | $ | 5,272,499 |  |  | $ | 5,461,440 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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