Segment and Geographic Information

12 Months Ended

Jun. 30, 2011

Segment and Geographic Information

Segment and Geographic Information

Note 16. Segment and Geographic Information

The Company is principally engaged in procuring, transporting, storing, processing, and merchandising agricultural commodities and products.  The Company’s operations are organized, managed and classified into three reportable business segments:  Oilseeds Processing, Corn Processing, and Agricultural Services.  Each of these segments is organized based upon the nature of products and services offered.  The Company’s remaining operations, which include wheat processing, cocoa processing, and its financial business units, are not reportable segments, as defined by ASC Topic 280, Segment Reporting, and are classified as Other.

The Oilseeds Processing segment includes activities related to the origination, merchandising, crushing, and further processing of oilseeds such as soybeans and soft seeds (cottonseed, sunflower seed, canola, rapeseed, and flaxseed) into vegetable oils and protein meals.  Oilseeds products produced and marketed by the Company include ingredients for the food, feed, energy, and other industrial products industries.  Crude vegetable oils produced by the segment’s crushing activities are sold “as is” or are further processed by refining, blending, bleaching, and deodorizing into salad oils.  Salad oils are sold “as is” or are further processed by hydrogenating and/or interesterifying into margarine, shortening, and other food products.  Partially refined oils are used to produce biodiesel or are sold to other manufacturers for use in chemicals, paints, and other industrial products.  Oilseed protein meals are principally sold to third parties to be used as ingredients in commercial livestock and poultry feeds.  The Oilseeds Processing segment also produces natural health and nutrition products and other specialty food and feed ingredients.  In North America, cottonseed flour is produced and sold primarily to the pharmaceutical industry and cotton cellulose pulp is manufactured and sold to the chemical, paper, and filter markets.  In Europe and South America, the Oilseeds Processing segment includes origination and merchandising activities of a network of grain elevators, port facilities, and transportation assets used to buy, store, clean, and transport agricultural commodities, as adjuncts to its oilseeds processing assets.  In South America, the Oilseeds Processing segment operates fertilizer blending facilities.  Effective December 31, 2010, the Company acquired Alimenta (USA) Inc., and as a result of the transaction, now owns 100% of Golden Peanut, the leading U.S. peanut sheller and oil refiner and operator of one facility in Argentina.  The Oilseeds Processing segment began consolidating the operating results of Golden Peanut, its previously 50% owned joint venture, in the third quarter of fiscal 2011.  The Oilseeds Processing segment also includes the Company’s share of the results of its equity investment in Wilmar and its share of results for its Edible Oils Limited and Stratas Foods, LLC joint ventures.

The Company’s Corn Processing segment is engaged in corn wet milling and dry milling activities, with its asset base primarily located in the central part of the United States.  The Corn Processing segment converts corn into sweeteners and starches and bioproducts.  Its products include ingredients used in the food and beverage industry including sweeteners, starch, syrup, glucose, and dextrose.  Dextrose and starch are used by the Corn Processing segment as feedstocks for its bioproducts operations.  By fermentation of dextrose, the Corn Processing segment produces alcohol, amino acids, and other specialty food and animal feed ingredients.  Ethyl alcohol is produced by the Company for industrial use as ethanol or as beverage grade.  Ethanol, in gasoline, increases octane and is used as an extender and oxygenate.  Bioproducts also include amino acids such as lysine and threonine that are vital compounds used in swine feeds to produce leaner animals and in poultry feeds to enhance the speed and efficiency of poultry production.  Corn gluten feed and meal, as well as distillers’ grains, are produced for use as animal feed ingredients.  Corn germ, a by-product of the wet milling process, is further processed into vegetable oil and protein meal.  Other corn processing products include citric and lactic acids, lactates, sorbitol, xanthan gum, and glycols which are used in various food and industrial products.  The Corn Processing segment includes the activities of the Company’s Brazilian sugarcane operations, propylene and ethylene glycol facility, a bioplastic facility, and other equity investments in renewable plastics.  This segment includes the Company’s share of the results of its equity investments in Almidones Mexicanos S.A., Eaststarch C.V., and Red Star Yeast Company LLC.

The Agricultural Services segment utilizes its extensive U.S. grain elevator and global transportation network to buy, store, clean, and transport agricultural commodities, such as oilseeds, corn, wheat, milo, oats, rice, and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry.  Agricultural Services’ grain sourcing and transportation network provides reliable and efficient services to the Company’s customers and agricultural processing operations. Agricultural Services’ transportation network capabilities include truck, rail, barge, port, and ocean-going vessel handling and freight services.  The Agricultural Services segment includes the activities of Alfred C. Toepfer International, an 80% owned global merchant of agricultural commodities and processed products.  The Agricultural Services segment also includes the Company’s share of the results of its Kalama Export Company joint venture, activities related to the processing and distributing of formula feeds and animal health and nutrition products, and the procuring, processing, and distributing of edible beans.

Other includes the Company’s remaining processing operations, consisting of activities related to processing agricultural commodities into food ingredient products such as wheat into wheat flour, and cocoa into chocolate and cocoa products.  Other also includes financial activities related to banking, captive insurance, futures commission merchant activities, private equity fund investments, and the Company’s share of the results of its equity investment in Gruma S.A.B de C.V.

Intersegment sales have been recorded at amounts approximating market.  Operating profit for each segment is based on net sales less identifiable operating expenses, including an interest charge related to working capital usage.  Also included in segment operating profit is equity in earnings of affiliates based on the equity method of accounting.  Certain Corporate items are not allocated to the Company’s reportable business segments.  Corporate results include the impact of LIFO-related adjustments, the after-tax elimination of income attributable to mandatorily redeemable interests in consolidated subsidiaries, unallocated corporate expenses, and unallocated net interest costs.

Prior year sales to external customers by segment and intersegment sales have been reclassified to conform to the current year’s presentation resulting in reclassified net sales at the segment level with no impact to total net sales or operating profit by segment.  In addition, inventories and accrued expenses in prior year’s consolidated balance sheet have been reclassified to conform to the current year’s presentation with a corresponding change to prior year’s identifiable assets by segment.

Segment Information

	2011			2010			2009
	(In millions)
Sales to external customers
Oilseeds Processing	$	26,662		$	21,810		$	23,948
Corn Processing	9,908			7,873			7,628
Agricultural Services	37,927			26,757			32,249
Other	6,179			5,242			5,382
Total	$	80,676		$	61,682		$	69,207
Intersegment sales
Oilseeds Processing	$	2,118		$	1,318		$	679
Corn Processing	194			103			175
Agricultural Services	3,726			2,784			3,822
Other	150			146			153
Total	$	6,188		$	4,351		$	4,829
Net sales
Oilseeds Processing	$	28,780		$	23,128		$	24,627
Corn Processing	10,102			7,976			7,803
Agricultural Services	41,653			29,541			36,071
Other	6,329			5,388			5,535
Intersegment elimination	(6,188		)	(4,351		)	(4,829		)
Total	$	80,676		$	61,682		$	69,207
Depreciation
Oilseeds Processing	$	168		$	188		$	190
Corn Processing	399			412			319
Agricultural Services	128			112			96
Other	107			116			101
Corporate	25			29			24
Total	$	827		$	857		$	730
Asset abandonments and write-downs
Oilseeds Processing	$	—		$	4		$	4
Corn Processing	—			—			—
Other	2			5			9
Total	$	2		$	9		$	13
Interest expense
Oilseeds Processing	$	43		$	37		$	89
Corn Processing	9			8			17
Agricultural Services	51			31			80
Other	50			50			86
Corporate	329			296			197
Total	$	482		$	422		$	469

	2011			2010			2009
	(In millions)
Interest income
Oilseeds Processing	$	28		$	34		$	36
Corn Processing	—			1			—
Agricultural Services	48			26			29
Other	46			52			79
Corporate	14			13			37
Total	$	136		$	126		$	181
Equity in earnings of affiliates
Oilseeds Processing	$	212		$	305		$	283
Corn Processing	83			78			44
Agricultural Services	105			76			76
Other	135			86			(253		)
Corporate	7			16			(5		)
Total	$	542		$	561		$	145
Operating profit
Oilseeds Processing	$	1,524		$	1,400		$	1,280
Corn Processing	1,062			722			185
Agricultural Services	922			668			994
Other	513			449			(6		)
Total operating profit	4,021			3,239			2,453
Corporate	(1,006		)	(654		)	47
Earnings before income taxes	$	3,015		$	2,585		$	2,500
Investments in and advances to affiliates
Oilseeds Processing	$	1,647		$	1,563
Corn Processing	483			361
Agricultural Services	297			224
Other	395			302
Corporate	418			349
Total	$	3,240		$	2,799
Identifiable assets
Oilseeds Processing	$	13,629		$	9,618
Corn Processing	7,606			6,822
Agricultural Services	9,779			5,888
Other	10,420			7,700
Corporate	759			1,780
Total	$	42,193		$	31,808

	2011		2010
	(In millions)
Gross additions to property, plant, and equipment
Oilseeds Processing	$	620	$	349
Corn Processing	349		915
Agricultural Services	339		320
Other	164		149
Corporate	40		55
Total	$	1,512	$	1,788

Geographic information:  The following geographic data include net sales and other operating income attributed to the countries based on the location of the subsidiary making the sale and long-lived assets based on physical location.  Long-lived assets represent the sum of the net book value of property, plant, and equipment plus goodwill related to consolidated businesses.

	2011		2010		2009
	(In millions)
Net sales and other operating income
United States	$	42,390	$	33,362	$	35,485
Switzerland	8,413		5,770		3,650
Germany	6,217		6,424		7,431
Other Foreign	23,656		16,126		22,641
	$	80,676	$	61,682	$	69,207
Long-lived assets
United States	$	7,394	$	6,964
Foreign	2,450		2,010
	$	9,844	$	8,974