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Segment Reporting | 6 Months Ended
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Feb. 28, 2022
Segment Reporting [Abstract] |
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 grains and oilseeds, processed grains and oilseeds, 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 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 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 urea ammonium nitrate ("UAN") annually from CF Nitrogen. Corporate and Other represents our financing and hedging businesses, which primarily consist 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. 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, 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 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 Condensed 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 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 on these entities. Reconciling amounts represent the elimination of revenues between segments. Such transactions are executed at market prices to more accurately evaluate the profitability of individual business segments. Segment information for the three and six months ended February 28, 2022 and 2021, is presented in the tables below:
| Energy |  | Ag |  | Nitrogen Production |  | Corporate and Other |  | Reconciling Amounts |  | Total
Three Months Ended February 28, 2022 | (Dollars in thousands)
Revenues, including intersegment revenues | $ | 2,163,233 |  |  | $ | 8,302,502 |  |  | $ | — |  |  | $ | 10,641 |  |  | $ | (143,788) |  |  | $ | 10,332,588 |
Intersegment revenues | (135,234) |  |  | (6,571) |  |  | — |  |  | (1,983) |  |  | 143,788 |  |  | — |
Revenues, net of intersegment revenues | $ | 2,027,999 |  |  | $ | 8,295,931 |  |  | $ | — |  |  | $ | 8,658 |  |  | $ | — |  |  | $ | 10,332,588 |
Operating earnings (loss) | 11,145 |  |  | 43,610 |  |  | (10,862) |  |  | (19,220) |  |  | — |  |  | 24,673 |
Interest expense | 1,898 |  |  | 13,224 |  |  | 11,253 |  |  | (996) |  |  | (205) |  |  | 25,174 |
Other income | (3) |  |  | (6,520) |  |  | (253) |  |  | 5,166 |  |  | 205 |  |  | (1,405) |
Equity income from investments | (1,582) |  |  | (18,275) |  |  | (176,119) |  |  | (33,947) |  |  | — |  |  | (229,923) |
Income before income taxes | $ | 10,832 |  |  | $ | 55,181 |  |  | $ | 154,257 |  |  | $ | 10,557 |  |  | $ | — |  |  | $ | 230,827 |
| Energy |  | Ag |  | Nitrogen Production |  | Corporate and Other |  | Reconciling Amounts |  | Total
Three Months Ended February 28, 2021 | (Dollars in thousands)
Revenues, including intersegment revenues | $ | 1,470,465 |  |  | $ | 6,942,185 |  |  | $ | — |  |  | $ | 12,046 |  |  | $ | (104,537) |  |  | $ | 8,320,159 |
Intersegment revenues | (98,307) |  |  | (3,973) |  |  | — |  |  | (2,257) |  |  | 104,537 |  |  | — |
Revenues, net of intersegment revenues | $ | 1,372,158 |  |  | $ | 6,938,212 |  |  | $ | — |  |  | $ | 9,789 |  |  | $ | — |  |  | $ | 8,320,159 |
Operating (loss) earnings | (55,449) |  |  | 2,093 |  |  | (8,240) |  |  | 1,806 |  |  | — |  |  | (59,790) |
Interest expense | 1,063 |  |  | 16,630 |  |  | 12,241 |  |  | 7 |  |  | (1,086) |  |  | 28,855 |
Other income | (990) |  |  | (11,636) |  |  | (302) |  |  | (6,004) |  |  | 1,086 |  |  | (17,846) |
Equity income from investments | (832) |  |  | (16,945) |  |  | (31,344) |  |  | (14,988) |  |  | — |  |  | (64,109) |
(Loss) income before income taxes | $ | (54,690) |  |  | $ | 14,044 |  |  | $ | 11,165 |  |  | $ | 22,791 |  |  | $ | — |  |  | $ | (6,690) |
| Energy |  | Ag |  | Nitrogen Production |  | Corporate and Other |  | Reconciling Amounts |  | Total
Six Months Ended February 28, 2022 | (Dollars in thousands)
Revenues, including intersegment revenues | $ | 4,631,576 |  |  | $ | 16,879,905 |  |  | $ | — |  |  | $ | 20,845 |  |  | $ | (318,981) |  |  | $ | 21,213,345 |
Intersegment revenues | (299,590) |  |  | (14,715) |  |  | — |  |  | (4,676) |  |  | 318,981 |  |  | — |
Revenues, net of intersegment revenues | $ | 4,331,986 |  |  | $ | 16,865,190 |  |  | $ | — |  |  | $ | 16,169 |  |  | $ | — |  |  | $ | 21,213,345 |
Operating earnings (loss) | 78,994 |  |  | 303,383 |  |  | (21,045) |  |  | (21,685) |  |  | — |  |  | 339,647 |
Interest expense | 2,386 |  |  | 26,885 |  |  | 22,507 |  |  | (2,816) |  |  | (356) |  |  | 48,606 |
Other income | (731) |  |  | (27,099) |  |  | (1,800) |  |  | 4,093 |  |  | 356 |  |  | (25,181) |
Equity income from investments | (2,682) |  |  | (38,009) |  |  | (292,592) |  |  | (47,985) |  |  | — |  |  | (381,268) |
Income before income taxes | $ | 80,021 |  |  | $ | 341,606 |  |  | $ | 250,840 |  |  | $ | 25,023 |  |  | $ | — |  |  | $ | 697,490 |
Total assets as of February 28, 2022 | $ | 4,378,601 |  |  | $ | 10,338,907 |  |  | $ | 2,725,582 |  |  | $ | 3,304,211 |  |  | $ | — |  |  | $ | 20,747,301 |
| Energy |  | Ag |  | Nitrogen Production |  | Corporate and Other |  | Reconciling Amounts |  | Total
Six Months Ended February 28, 2021 | (Dollars in thousands)
Revenues, including intersegment revenues | $ | 2,828,310 |  |  | $ | 14,392,490 |  |  | $ | — |  |  | $ | 27,528 |  |  | $ | (212,526) |  |  | $ | 17,035,802 |
Intersegment revenues | (198,305) |  |  | (8,876) |  |  | — |  |  | (5,345) |  |  | 212,526 |  |  | — |
Revenues, net of intersegment revenues | $ | 2,630,005 |  |  | $ | 14,383,614 |  |  | $ | — |  |  | $ | 22,183 |  |  | $ | — |  |  | $ | 17,035,802 |
Operating (loss) earnings | (123,834) |  |  | 77,617 |  |  | (15,862) |  |  | 9,732 |  |  | — |  |  | (52,347) |
Interest expense | 826 |  |  | 31,135 |  |  | 23,403 |  |  | 1,145 |  |  | (2,604) |  |  | 53,905 |
Other income | (1,472) |  |  | (23,453) |  |  | (1,867) |  |  | (6,282) |  |  | 2,604 |  |  | (30,470) |
Equity income from investments | (1,321) |  |  | (27,118) |  |  | (53,033) |  |  | (32,660) |  |  | — |  |  | (114,132) |
(Loss) income before income taxes | $ | (121,867) |  |  | $ | 97,053 |  |  | $ | 15,635 |  |  | $ | 47,529 |  |  | $ | — |  |  | $ | 38,350 |

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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