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 are not reportable segments, as defined by ASC Topic 280, Segment Reporting, and are classified as Other.
The Oilseeds Processing segment includes global 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 includes activities related to the procurement, transportation and processing of cocoa beans into cocoa liquor, cocoa butter, cocoa powder, chocolate, and various compounds in North America, South America, Europe, Asia, and Africa for the food processing industry. In Europe and South America, the Oilseeds Processing segment includes origination and merchandising activities as adjuncts to its oilseeds processing assets. These activities include a network of grain elevators, port facilities, and transportation assets used to buy, store, clean, and transport grains and oilseeds. The Oilseeds Processing segment produces natural health and nutrition products and other specialty food and feed ingredients. The Oilseeds Processing segment is a major supplier of peanuts and peanut-derived ingredients to both the U.S. and export markets. 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 South America, the Oilseeds Processing segment operates fertilizer blending facilities. 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 Stratas Foods LLC and Edible Oils Limited 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 a propylene and ethylene glycol facility and the Company’s Brazilian sugarcane ethanol plant and related operations. This segment also 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, global transportation network, and port operations 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, handling, and transportation network provides reliable and efficient services to the Company’s customers and agricultural processing operations. Agricultural Services’ transportation network capabilities include barge, ocean-going vessel, truck, and rail freight services. Agricultural Services segment also includes the activities related to the processing of wheat into wheat flour, the processing and distribution of formula feeds, animal health and nutrition products, and the procurement, processing, and distribution of edible beans. 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 LLC joint venture and GrainCorp dividends. In December 2012, the Company sold its equity investment in Gruma S.A.B. de C.V.
Other includes the Company’s remaining operations, primarily its financial business units, related principally to futures commission merchant activities and captive insurance.
Intersegment sales have been recorded at amounts approximating market. Operating profit for each segment is based on net sales less identifiable operating expenses. 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 principally include the impact of LIFO-related adjustments, unallocated corporate expenses, and interest cost net of investment income. Corporate results also include the after-tax elimination of income attributable to mandatorily redeemable interests in consolidated subsidiaries except during the calendar year 2012 when the put options related to these interests expired and the results were included in noncontrolling interest.
Segment Information
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| | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended | | Six Months Ended | | Year Ended |
(In millions) | December 31 | | December 31 | | June 30 |
| 2013 | | 2012 | | 2012 | | 2011 | | 2012 | | 2011 |
| | | (Unaudited) | | | | (Unaudited) | | | | |
Gross revenues | | | | | | | | | | | |
Oilseeds Processing | $ | 38,490 |
| | $ | 38,382 |
| | $ | 19,465 |
| | $ | 18,073 |
| | $ | 36,990 |
| | $ | 32,011 |
|
Corn Processing | 13,299 |
| | 11,946 |
| | 6,223 |
| | 6,564 |
| | 12,287 |
| | 10,102 |
|
Agricultural Services | 46,950 |
| | 49,063 |
| | 25,487 |
| | 24,115 |
| | 47,691 |
| | 45,167 |
|
Other | 515 |
| | 303 |
| | 151 |
| | 136 |
| | 288 |
| | 265 |
|
Intersegment elimination | (9,450 | ) | | (9,135 | ) | | (4,597 | ) | | (3,680 | ) | | (8,218 | ) | | (6,869 | ) |
Total | $ | 89,804 |
| | $ | 90,559 |
| | $ | 46,729 |
| | $ | 45,208 |
| | $ | 89,038 |
| | $ | 80,676 |
|
| | | | | | | | | | | |
Intersegment revenues | | | | | |
| | |
| | |
| | |
|
Oilseeds Processing | $ | 3,607 |
| | $ | 2,952 |
| | $ | 1,413 |
| | $ | 736 |
| | $ | 2,275 |
| | $ | 2,103 |
|
Corn Processing | 160 |
| | 116 |
| | 56 |
| | 113 |
| | 173 |
| | 194 |
|
Agricultural Services | 5,470 |
| | 5,904 |
| | 3,046 |
| | 2,751 |
| | 5,609 |
| | 4,417 |
|
Other | 213 |
| | 163 |
| | 82 |
| | 80 |
| | 161 |
| | 155 |
|
Total | $ | 9,450 |
| | $ | 9,135 |
| | $ | 4,597 |
| | $ | 3,680 |
| | $ | 8,218 |
| | $ | 6,869 |
|
| | | | | | | | | | | |
Revenues from external customers | | | | | | | | | | | |
Oilseeds Processing | $ | 34,883 |
| | $ | 35,430 |
| | $ | 18,052 |
| | $ | 17,337 |
| | $ | 34,715 |
| | $ | 29,908 |
|
Corn Processing | 13,139 |
| | 11,830 |
| | 6,167 |
| | 6,451 |
| | 12,114 |
| | 9,908 |
|
Agricultural Services | 41,480 |
| | 43,159 |
| | 22,441 |
| | 21,364 |
| | 42,082 |
| | 40,750 |
|
Other | 302 |
| | 140 |
| | 69 |
| | 56 |
| | 127 |
| | 110 |
|
Total | $ | 89,804 |
| | $ | 90,559 |
| | $ | 46,729 |
| | $ | 45,208 |
| | $ | 89,038 |
| | $ | 80,676 |
|
| | | | | | | | | | | |
Depreciation | | | | | |
| | |
| | |
| | |
|
Oilseeds Processing | $ | 237 |
| | $ | 233 |
| | $ | 113 |
| | $ | 108 |
| | $ | 228 |
| | $ | 215 |
|
Corn Processing | 325 |
| | 332 |
| | 165 |
| | 178 |
| | 345 |
| | 399 |
|
Agricultural Services | 220 |
| | 197 |
| | 99 |
| | 90 |
| | 188 |
| | 183 |
|
Other | 5 |
| | 4 |
| | 2 |
| | 2 |
| | 4 |
| | 5 |
|
Corporate | 40 |
| | 32 |
| | 17 |
| | 13 |
| | 28 |
| | 25 |
|
Total | $ | 827 |
| | $ | 798 |
| | $ | 396 |
| | $ | 391 |
| | $ | 793 |
| | $ | 827 |
|
| | | | | | | | | | | |
Long-lived asset abandonments and write-downs(1) | | | | | |
| | |
| | |
| | |
|
Oilseeds Processing | $ | 4 |
| | $ | 1 |
| | $ | — |
| | $ | — |
| | $ | 1 |
| | $ | 2 |
|
Corn Processing | 62 |
| | 23 |
| | — |
| | 337 |
| | 360 |
| | — |
|
Agricultural Services | 3 |
| | 2 |
| | — |
| | — |
| | 2 |
| | — |
|
Corporate | 15 |
| | 4 |
| | — |
| | — |
| | 4 |
| | — |
|
Total | $ | 84 |
| | $ | 30 |
| | $ | — |
| | $ | 337 |
| | $ | 367 |
| | $ | 2 |
|
(1) See Note 19 for total asset impairment, exit, and restructuring costs.
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| | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended | | Six Months Ended | | Year Ended |
(In millions) | December 31 | | December 31 | | June 30 |
| 2013 | | 2012 | | 2012 | | 2011 | | 2012 | | 2011 |
| | | (Unaudited) | | | | (Unaudited) | | | | |
Interest income | | | | | | | | | | | |
|
Oilseeds Processing | $ | 36 |
| | $ | 37 |
| | $ | 18 |
| | $ | 16 |
| | $ | 35 |
| | $ | 28 |
|
Corn Processing | 3 |
| | 2 |
| | 1 |
| | — |
| | 1 |
| | — |
|
Agricultural Services | 47 |
| | 30 |
| | 18 |
| | 10 |
| | 22 |
| | 23 |
|
Other | 12 |
| | 18 |
| | 11 |
| | 14 |
| | 21 |
| | 46 |
|
Corporate | 4 |
| | 22 |
| | 11 |
| | 22 |
| | 33 |
| | 39 |
|
Total | $ | 102 |
| | $ | 109 |
| | $ | 59 |
| | $ | 62 |
| | $ | 112 |
| | $ | 136 |
|
| | | | | | | | | | | |
Equity in earnings of affiliates | | | | | |
| | |
| | |
| | |
|
Oilseeds Processing | $ | 261 |
| | $ | 193 |
| | $ | 96 |
| | $ | 129 |
| | $ | 226 |
| | $ | 213 |
|
Corn Processing | 98 |
| | 103 |
| | 49 |
| | 53 |
| | 107 |
| | 83 |
|
Agricultural Services | 64 |
| | 104 |
| | 49 |
| | 55 |
| | 110 |
| | 230 |
|
Other | 1 |
| | — |
| | — |
| | — |
| | — |
| | 9 |
|
Corporate | (13 | ) | | 76 |
| | 61 |
| | 14 |
| | 29 |
| | 7 |
|
Total | $ | 411 |
| | $ | 476 |
| | $ | 255 |
| | $ | 251 |
| | $ | 472 |
| | $ | 542 |
|
| | | | | | | | | | | |
Operating Profit | | | | | |
| | |
| | |
| | |
|
Oilseeds Processing | $ | 1,473 |
| | $ | 1,620 |
| | $ | 747 |
| | $ | 429 |
| | $ | 1,302 |
| | $ | 1,690 |
|
Corn Processing | 814 |
| | 278 |
| | 71 |
| | 54 |
| | 261 |
| | 1,079 |
|
Agricultural Services | 380 |
| | 779 |
| | 395 |
| | 563 |
| | 947 |
| | 1,323 |
|
Other | 41 |
| | 91 |
| | 93 |
| | 17 |
| | 15 |
| | 39 |
|
Total operating profit | 2,708 |
| | 2,768 |
| | 1,306 |
| | 1,063 |
| | 2,525 |
| | 4,131 |
|
Corporate | (684 | ) | | (787 | ) | | (309 | ) | | (282 | ) | | (760 | ) | | (1,116 | ) |
Earnings before income taxes | $ | 2,024 |
| | $ | 1,981 |
| | $ | 997 |
| | $ | 781 |
| | $ | 1,765 |
| | $ | 3,015 |
|
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| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
(In millions) | December 31 | | | | | | | | |
| 2013 | | 2012 | | | | | | | | |
Investments in and advances to affiliates | | | | | |
| | |
| | |
| | |
|
Oilseeds Processing | $ | 2,120 |
| | $ | 1,889 |
| | | | |
| | | | |
Corn Processing | 431 |
| | 505 |
| | | | |
| | | | |
Agricultural Services | 302 |
| | 297 |
| | | | |
| | | | |
Other | 24 |
| | 18 |
| | | | |
| | | | |
Corporate | 463 |
| | 461 |
| | | | |
| | | | |
Total | $ | 3,340 |
| | $ | 3,170 |
| | | | |
| | | | |
| | | | | | | | | | | |
Identifiable assets | | | | | |
| | |
| | | | |
Oilseeds Processing | $ | 15,408 |
| | $ | 15,856 |
| | | | |
| | | | |
Corn Processing | 6,558 |
| | 6,649 |
| | | | |
| | | | |
Agricultural Services | 12,358 |
| | 14,201 |
| | | | |
| | | | |
Other | 6,408 |
| | 5,912 |
| | | | |
| | | | |
Corporate | 3,020 |
| | 2,518 |
| | | | |
| | | | |
Total | $ | 43,752 |
| | $ | 45,136 |
| | | | |
| | | | |
|
| | | | | | | |
| Year Ended | | Six Months Ended |
| December 31 |
| 2013 | | 2012 |
| (In millions) |
Gross additions to property, plant, and equipment | | | |
Oilseeds Processing | $ | 302 |
| | $ | 259 |
|
Corn Processing | 317 |
| | 169 |
|
Agricultural Services | 239 |
| | 182 |
|
Other | 1 |
| | — |
|
Corporate | 88 |
| | 31 |
|
Total | $ | 947 |
| | $ | 641 |
|
Geographic information: The following geographic data include revenues 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 net book value of property, plant, and equipment.
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended | | Six Months Ended | | Year Ended |
(In millions) | December 31 | | December 31 | | June 30 |
| 2013 | | 2012 | | 2012 | | 2011 | | 2012 | | 2011 |
| | | (Unaudited) | | | | (Unaudited) | | | | |
Revenues | | | | | | | | | | | |
United States | $ | 41,427 |
| | $ | 47,136 |
| | $ | 25,033 |
| | $ | 24,490 |
| | $ | 46,593 |
| | $ | 42,390 |
|
Switzerland | 10,467 |
| | 9,452 |
| | 4,991 |
| | 5,237 |
| | 9,698 |
| | 8,413 |
|
Germany | 10,029 |
| | 9,585 |
| | 4,450 |
| | 4,521 |
| | 9,656 |
| | 6,217 |
|
Other Foreign | 27,881 |
| | 24,386 |
| | 12,255 |
| | 10,960 |
| | 23,091 |
| | 23,656 |
|
| $ | 89,804 |
| | $ | 90,559 |
| | $ | 46,729 |
| | $ | 45,208 |
| | $ | 89,038 |
| | $ | 80,676 |
|
| | | | | | | | | | | |
(In millions) | December 31 | | | | | | | | |
| 2013 | | 2012 | | | | | | | | |
Long-lived assets | | | | | |
| | |
| | |
| | |
|
United States | $ | 7,192 |
| | $ | 7,287 |
| | | | |
| | | | |
Foreign | 2,945 |
| | 2,836 |
| | | | |
| | | | |
| $ | 10,137 |
| | $ | 10,123 |
| | | | |
| | | | |
