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8NOV201319003526
8NOV201319002131
Inventories
Inventories as of August 31, 2013 and 2012 are as follows: As of August 31, 2013, we valued approximately 16% of
inventories, primarily crude oil and refined fuels within
(DOLLARS IN THOUSANDS) 2013 2012 our Energy segment, using the lower of cost, deter-
Grain and oilseed $ 1,133,555 $ 1,625,865 mined on the LIFO method, or market (11% as of
Energy 742,194 701,348 August 31, 2012). If the FIFO method of accounting had
been used, inventories would have been higher than the
Crop nutrients 293,370 401,655
reported amount by $652.6 million and $566.6 million at
Feed and farm supplies 407,023 384,178
August 31, 2013 and 2012, respectively.
Processed grain and oilseed 79,706 76,892
Other 8,887 14,034
$ 2,664,735 $ 3,203,972
assets and the assets leased by CHS to Horizon Milling,
with CHS holding a 12% interest. Upon closing, Ardent Mills
is expected to be financed with funds from third-party
borrowings, which would not require credit support from
the owners. The borrowings are anticipated to be no less
than $600 million with proceeds distributed to each owner
in proportion to the ownership interests, adjusted for any
deviations in specified working capital target amounts. The
transaction is expected to close during fiscal 2014, subject
to financing and certain other customary closing condi-
tions. In connection with the closing, the parties will also
enter into various ancillary and non-compete agreements,
including, among other things, an agreement for CHS to
supply Ardent Mills with certain wheat and durum
products.
CHS has a 50% interest in Ventura Foods, LLC (Ventura
CHS has a 24% interest in Horizon Milling, LLC and Horizon Foods), a joint venture which produces and distributes
Milling, ULC, flour milling joint ventures with Cargill, Incor- primarily vegetable oil-based products, and is included
porated (Cargill), which are accounted for as equity in Corporate and Other. We account for Ventura Foods
method investments and are included in Corporate and as an equity method investment, and as of August 31,
Other. On March 4, 2013, CHS entered into a definitive 2013, our carrying value of Ventura Foods exceeded our
agreement with Cargill and ConAgra Foods, Inc. to form share of their equity by $12.9 million, which represents
Ardent Mills, a joint venture combining the North American equity method goodwill. The following provides sum-
flour milling operations of the three parent companies, marized unaudited financial information for Ventura
including the Horizon Milling, LLC and Horizon Milling, ULC Foods balance sheets as of August 31, 2013 and 2012,
42 CHS 2013
Investments
Investments as of August 31, 2013 and 2012 are as
follows:
(DOLLARS IN THOUSANDS) 2013 2012
Joint ventures:
Ventura Foods, LLC $ 309,480 $ 292,393
Horizon Milling, LLC 92,635 78,372
TEMCO, LLC 63,547 60,734
Horizon Milling, ULC 19,314 16,727
Cooperatives:
Land O’Lakes, Inc. 66,255 58,382
Ag Processing Inc. 19,970 19,577
Other 194,745 147,203
$ 765,946 $ 673,388