CHS 2011 Annual Report Download - page 54

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2011 CHS 53
Fair value measurements at August 31, 2011 and 2010 are as follows:
(DOLLARS IN THOUSANDS)
QUOTED PRICES IN
ACTIVE MARKETS
FOR IDENTICAL
ASSETS
(LEVEL 1)
SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2)
SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEV EL 3) TOTAL
2011
Assets:
Readily marketable inventories $1,288,049 $1,288,049
Commodity and freight derivatives $ 85,082 549,056 634,138
Foreign currency derivatives 1,508 1,508
Other assets 68,246 68,246
Total Assets $154,836 $1,837,105 $1,991,941
Liabilities:
Commodity and freight derivatives $191,607 $ 290,256 $ 481,863
Interest rate swap derivatives 750 750
Total Liabilities $191,607 $ 291,006 $ 482,613
(DOLLARS IN THOUSANDS)
QUOTED PRICES IN
ACTIVE MARKETS
FOR IDENTICAL
ASSETS
(LEVEL 1)
SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2)
SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3) TOTAL
2010
Assets:
Readily marketable inventories $1,057,910 $1,057,910
Commodity and freight derivatives $ 38,342 208,279 246,621
Other assets 62,612 62,612
Total Assets $100,954 $1,266,189 $1,367,143
Liabilities:
Commodity and freight derivatives $ 79,940 $ 204,629 $ 284,569
Foreign currency derivatives 222 222
Interest rate swap derivatives 1,227 1,227
Total Liabilities $ 80,162 $ 205,856 $ 286,018
Readily Marketable Inventories: The Company’s readily
marketable inventories primarily include its grain and
oilseed inventories that are stated at fair values. These
commodities are readily marketable, have quoted market
prices and may be sold without significant additional
processing. The Company estimates the fair market val-
ues of these inventories included in Level 2 primarily
based on exchange quoted prices, adjusted for differ-
ences in local markets. Changes in the fair market values
of these inventories are recognized in the Company’s
Consolidated Statements of Operations as a component
of cost of goods sold.
Commodity, Freight and Foreign Currency Derivatives:
Exchange traded futures and options contracts are val-
ued based on unadjusted quoted prices in active markets
and are classified within Level 1. The Company’s forward
commodity purchase and sales contracts, flat price or
basis fixed derivative contracts, ocean freight contracts
and other OTC derivatives are determined using inputs
that are generally based on exchange traded prices
and/or recent market bids and offers, adjusted for loca-
tion specific inputs, and are classified within Level 2. The
location specific inputs are generally broker or dealer
quotations, or market transactions in either the listed or
OTC markets. Changes in the fair values of these con-
tracts are recognized in the Company’s Consolidated
Statements of Operations as a component of cost of
goods sold.
Other Assets: The Company’s available-for-sale invest-
ments in common stock of other companies and its Rabbi
Trust assets are valued based on unadjusted quoted prices
on active exchanges and are classified within Level 1.