CHS 2014 Annual Report Download - page 67

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Beginning in the second quarter of fiscal 2012, in accor- During fiscal 2014, due to the prolonged decrease in
dance with ASC Topic 480, earnings are no longer attrib- demand for certain products produced in Solbar’s facili-
utable to the noncontrolling interests, and patronage ties in Israel, partially as a result of the impacts of the
earned by Growmark and MFA is included as interest, net recall described in Note 14, Contingencies, we evaluated
in our Consolidated Statements of Operations. During our long-lived assets in Israel for impairment under ASC
the years ended August 31, 2014 and 2013, $65.5 million Topic 360-10. Based on our cash flow projections, as
and $142.4 million, respectively, was included in interest well as our best estimate of the residual value of the
for the patronage earned by Growmark and MFA. assets, we recorded a non-cash impairment charge of
$74.5 million, which amounts to substantially all of the
book value of the long-lived assets in this asset group.
On February 9, 2012, we completed the acquisition of This impairment charge is recorded in cost of goods
Solbar Industries Ltd., an Israeli company (Solbar), sold in our Ag segment.
included in our Ag segment, for total cash consideration
of $128.7 million, net of cash acquired of $6.6 million.
Solbar provides soy protein ingredients to manufac-
turers in the meat, vegetarian, beverage, bars and crisps,
confectionary, bakery, and pharmaceutical manufac-
turing markets. Solbar and its subsidiaries operate pri-
marily in the countries of Israel, China and the U.S.
Report of independent registered public accounting firm
To the Board of Directors and Members and Patrons of CHS Inc.:
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of opera-
tions, of comprehensive income, of changes in equities, and of cash flows present fairly, in all material respects, the
financial position of CHS Inc. and its subsidiaries at August 31, 2014 and 2013, and the results of their operations and
their cash flows for each of the three years in the period ended August 31, 2014, in conformity with accounting
principles generally accepted in the United States of America. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
November 5, 2014
CHS 2014 65
Solbar: