CHS 2011 Annual Report Download - page 53

52 2011 CHS
NOTE 11
Segment Reporting, continued
The Company’s international sales to geographic
regions are presented by the location to which the
product is transported. International sales for the years
ended August 31, 2011, 2010 and 2009 are as follows:
(DOLLARS IN MILLIONS) 2011 2010 2009
Africa $ 420 $ 395 $ 305
Asia 5,110 2,891 3,664
Australia 7
Europe 489 209 371
North America, excluding U.S. 1,729 1,210 1,253
South America 1,130 736 491
$8,885 $5,441 $6,084
NOTE 12
FAIR VALUE MEASUREMENTS
ASC 820 defines fair value as the price that would be
received for an asset or paid to transfer a liability (an
exit price) in a principal or most advantageous market
for the asset or liability in an orderly transaction
between market participants on the measurement date.
The Company determines the fair market values of its
readily marketable inventories, derivative contracts and
certain other assets, based on the fair value hierarchy
established in ASC 820, which requires an entity to
maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair
value. Observable inputs are inputs that reflect the
assumptions market participants would use in pricing
the asset or liability based on the best information avail-
able in the circumstances. ASC 820 describes three levels
within its hierarchy that may be used to measure fair
value, which are as follows:
Level 1: Values are based on unadjusted quoted prices in
active markets for identical assets or liabilities. These
assets and liabilities include the Company’s exchange
traded derivative contracts, Rabbi Trust investments
and available-for-sale investments.
Level 2: Values are based on quoted prices for similar
assets or liabilities in active markets, quoted prices for
identical or similar assets or liabilities in markets that
are not active, or other inputs that are observable or can
be corroborated by observable market data for substan-
tially the full term of the assets or liabilities. These
assets and liabilities include the Company’s readily
marketable inventories, interest rate swaps, forward
commodity and freight purchase and sales contracts,
flat price or basis fixed derivative contracts and other
OTC derivatives whose value is determined with inputs
that are based on exchange traded prices, adjusted for
location specific inputs that are primarily observable in
the market or can be derived principally from, or cor-
roborated by, observable market data.
Level 3: Values are generated from unobservable inputs
that are supported by little or no market activity and
that are a significant component of the fair value of the
assets or liabilities. These unobservable inputs would
reflect the Company’s own estimates of assumptions
that market participants would use in pricing related
assets or liabilities. Valuation techniques might include
the use of pricing models, discounted cash flow models
or similar techniques.
The following table presents assets and liabilities,
included in the Company’s Consolidated Balance
Sheets, that are recognized at fair value on a recurring
basis, and indicates the fair value hierarchy utilized to
determine such fair value. Assets and liabilities are
classified, in their entirety, based on the lowest level
of input that is a significant component of the fair value
measurement. The lowest level of input is considered
Level 3. The Company’s assessment of the significance
of a particular input to the fair value measurement
requires judgment, and may affect the classification
of fair value assets and liabilities within the fair value
hierarchy levels.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS