UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-84486

Land O’Lakes, Inc.

(Exact name of Registrant as Specified in Its Charter)

Minnesota (State or Other Jurisdiction of Incorporation or Organization)		41-0365145 (I.R.S. Employer Identification No.)
4001 Lexington Avenue North
Arden Hills, Minnesota (Address of Principal Executive Offices)		55112 (Zip Code)

(651) 481-2222
(Registrant’s Telephone Number, Including Area Code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No þ

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer þ (Do not check if a smaller reporting company)		Smaller reporting company o

     Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes o No þ

     Land O’Lakes, Inc. is a cooperative. Our voting and non-voting common equity can only be held by our members. No public market for voting and non-voting common equity of Land O’Lakes, Inc. is established and it is unlikely, in the foreseeable future, that a public market for our voting and non-voting common equity will develop.

     The number of shares of the registrant’s common stock outstanding as of October 31, 2009: 856 shares of Class A common stock, 3,802 shares of Class B common stock, 158 shares of Class C common stock, and 848 shares of Class D common stock.

     Documents incorporated by reference: None.

     We maintain a website on the Internet where additional information about Land O’Lakes, Inc. is available. Our website address is www.landolakesinc.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, press releases and earnings releases are available, free of charge, on our website when they are released publicly or filed with the SEC.

 

 

INDEX

		Page
Part I Financial Information			3
Item 1. Financial Statements			3
Consolidated Balance Sheets as of September 30, 2009 (unaudited) and December 31, 2008			3
Consolidated Statements of Operations for the three and nine months ended September 30, 2009 and 2008 (unaudited)			4
Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and 2008 (unaudited)			5
Notes to Consolidated Financial Statements (unaudited)			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			31
Item 3. Quantitative and Qualitative Disclosures about Market Risk			49
Item 4. Controls and Procedures			49
Part II Other Information			50
Item 1. Legal Proceedings			50
Item 1A. Risk Factors			52
Item 6. Exhibits			53
SIGNATURES			54
EX-31.1
EX-31.2
EX-32.1
EX-32.2

Part I. Financial Information

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

		September 30,				December 31,
		2009				2008
		(Unaudited)
		($ in thousands)
ASSETS
Current assets:
Cash and cash equivalents		$	29,734			$	30,820
Receivables, net			1,206,587				1,104,261
Inventories			1,088,832				1,083,978
Prepaid assets			42,251				1,101,005
Other current assets			60,787				123,504
Total current assets			2,428,191				3,443,568
Investments			258,674				314,487
Property, plant and equipment, net			693,846				658,261
Goodwill, net			276,657				277,176
Other intangibles, net			116,406				120,982
Other assets			158,317				166,838
Total assets		$	3,932,091			$	4,981,312
LIABILITIES AND EQUITIES
Current liabilities:
Notes and short-term obligations		$	610,612			$	409,370
Current portion of long-term debt			2,581				2,864
Accounts payable			928,840				1,175,995
Customer advances			33,515				1,045,705
Accrued liabilities			383,395				423,494
Patronage refunds and other member equities payable			39,600				37,751
Total current liabilities			1,998,543				3,095,179
Long-term debt			535,231				531,955
Employee benefits and other liabilities			361,841				358,404
Commitments and contingencies (Note 17)
Equities:
Capital stock			1,439				1,611
Member equities			964,665				947,141
Accumulated other comprehensive loss			(166,876	)			(150,277	)
Retained earnings			223,107				178,377
Total Land O’Lakes, Inc. equities			1,022,335				976,852
Noncontrolling interests			14,141				18,922
Total equities			1,036,476				995,774
Total liabilities and equities		$	3,932,091			$	4,981,312

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		For the Three Months Ended								For the Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
						($ in thousands)
Net sales		$	2,177,524			$	2,783,930			$	7,939,337			$	9,368,794
Cost of sales			1,987,262				2,547,330				7,209,916				8,569,999
Gross profit			190,262				236,600				729,421				798,795
Selling, general and administrative			179,412				204,642				508,473				562,330
Restructuring and impairment			803				—				10,036				41
Gain on insurance settlement			—				(4,032	)			—				(4,032	)
Earnings from operations			10,047				35,990				210,912				240,456
Interest expense, net			12,462				15,369				38,300				48,091
Other (income) expense, net			(300	)			—				(7,028	)			12
Equity in losses (earnings) of affiliated companies			978				(13,541	)			(2,523	)			(38,099	)
(Loss) earnings before income taxes			(3,093	)			34,162				182,163				230,452
Income tax expense			1,213				1,804				25,461				22,442
Net (loss) earnings			(4,306	)			32,358				156,702				208,010
Less: net earnings (loss) attributable to noncontrolling interests			8				3,796				(3,131	)			15,380
Net (loss) earnings attributable to Land O’Lakes, Inc.		$	(4,314	)		$	28,562			$	159,833			$	192,630
Applied to:
Member equities
Allocated patronage		$	1,638			$	5,698			$	113,144			$	133,835
Deferred equities			11,764				(1,893	)			(1,414	)			679
			13,402				3,805				111,730				134,514
Retained earnings			(17,716	)			24,757				48,103				58,116
		$	(4,314	)		$	28,562			$	159,833			$	192,630

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		For the Nine Months Ended
		September 30,
		2009				2008
		($ in thousands)
Cash flows from operating activities:
Net earnings attributable to Land O’Lakes, Inc.		$	159,833			$	192,630
Adjustments to reconcile net earnings attributable to Land O’Lakes, Inc. to net cash used by operating activities:
Depreciation and amortization			67,870				67,776
Amortization of deferred financing costs			1,868				3,413
Bad debt expense			6,479				5,731
Proceeds from patronage revolvement received			236				1,777
Non-cash patronage income			(798	)			(4,177	)
Deferred income tax expense (benefit)			41,501				(20,707	)
Decrease (increase) in other assets			764				(2,269	)
Increase in other liabilities			20,224				21,399
Restructuring and impairment			10,036				41
Loss on divestiture of a business			407				—
(Gain) loss on sale of investments			(6,958	)			12
Gain on foreign currency exchange contracts on sale of investment			(177	)			—
Gain on insurance settlement			—				(4,032	)
Equity in earnings of affiliated companies			(2,523	)			(38,099	)
Dividends from investments in affiliated companies			36,140				32,652
Net (loss) earnings attributable to noncontrolling interests			(3,131	)			15,380
Other			(4,031	)			(2,525	)
Changes in current assets and liabilities, net of acquisitions and divestitures:
Receivables			(119,141	)			(412,580	)
Inventories			(5,964	)			(102,923	)
Prepaid assets and other current assets			1,103,113				810,792
Accounts payable			(246,306	)			15,011
Customer advances			(1,012,190	)			(933,016	)
Accrued liabilities			(53,999	)			154,816
Net cash used by operating activities			(6,747	)			(198,898	)
Cash flows from investing activities:
Additions to property, plant and equipment			(108,775	)			(120,533	)
Acquisitions, net of cash acquired			(2,745	)			(9,040	)
Investments in affiliates			(3,290	)			(50,860	)
Distributions from investments in affiliated companies			—				8,824
Proceeds from divestiture of a business			2,698				—
Proceeds from sale of investments			16,965				49
Proceeds from foreign currency exchange contracts on sale of investment			518				—
Proceeds from sale of property, plant and equipment			1,493				5,581
Insurance proceeds for replacement assets			6,538				5,321
Change in notes receivable			(12,686	)			(11,606	)
Other			250				3,049
Net cash used by investing activities			(99,034	)			(169,215	)
Cash flows from financing activities:
Increase in short-term debt			201,243				388,685
Proceeds from issuance of long-term debt			4,459				496
Principal payments on long-term debt and capital lease obligations			(1,950	)			(14,138	)
Payments for redemption of member equities			(95,762	)			(94,896	)
Payments for debt issuance costs			(1,486	)			—
Other			(1,809	)			(38	)
Net cash provided by financing activities			104,695				280,109
Net decrease in cash and cash equivalents			(1,086	)			(88,004	)
Cash and cash equivalents at beginning of the period			30,820				116,839
Cash and cash equivalents at end of the period		$	29,734			$	28,835
Supplementary Disclosure of Cash Flow Information
Cash paid (received) during periods for:
Interest		$	39,046			$	46,812
Income taxes			(14,269	)			57,541

See accompanying notes to consolidated financial statements.

LAND O’LAKES, INC.

1. Summary of Significant Accounting Policies

     The consolidated financial statements include the accounts of Land O’Lakes, Inc. (the “Company”) and wholly owned and majority-owned subsidiaries. The effects of intercompany transactions have been eliminated. The unaudited consolidated financial statements reflect, in the opinion of the Company’s management, all normal, recurring adjustments necessary for a fair statement of the financial position and results of operations and cash flows for the interim periods. The results of operations and cash flows for interim periods are not necessarily indicative of results for a full year because of, among other things, the seasonal nature of our businesses. The statements are condensed and therefore do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the audited consolidated financial statements and footnotes for the year ended December 31, 2008 included in our Form 10-K.

     On January 1, 2009, the Company adopted Accounting Standards Codification (“ASC”) Topic 810-10-65, “Noncontrolling Interests in Consolidated Financial Statements — An Amendment to ARB No. 51”. The objective of this guidance was to improve the relevance, comparability and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. ASC 810-10-65 requires the reclassification of noncontrolling interests, also referred to as minority interest, to the equity section of the consolidated balance sheet presented upon adoption. Minority interest expense is no longer separately reported as a reduction to net income on the consolidated income statement, but is instead shown below net income under the heading “net earnings (loss) attributable to noncontrolling interests.” Total provision for income taxes remains unchanged; however, the Company’s effective tax rate as calculated from the balances shown on the consolidated income statement has changed as net earnings (loss) attributable to noncontrolling interests is no longer included in the determination of income from continuing operations. The Company has changed the presentation of its noncontrolling interests in compliance with this requirement.

Recent Accounting Pronouncements

     In June 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162 . This statement modifies the Generally Accepted Accounting Principles (“GAAP”) hierarchy by establishing only two levels of GAAP, authoritative and non-authoritative accounting literature. Effective July 2009, the FASB Accounting Standards Codification (“ASC”), also known collectively as the “Codification,” is considered the single source of authoritative U.S. accounting and reporting standards, except for additional authoritative rules and interpretive releases issued by the SEC. Non-authoritative guidance and literature would include, among other things, FASB Concepts Statements, American Institute of Certified Public Accountants Issue Papers and Technical Practice Aids and accounting textbooks. The Codification was developed to organize GAAP pronouncements by topic so that users can more easily access authoritative accounting guidance. It is organized by topic, subtopic, section, and paragraph, each of which is identified by a numerical designation. Following the Codification, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASU”) which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification. This statement and the application of the Codification was effective for and adopted by the Company as of July 1, 2009. All accounting references have been updated, and therefore SFAS references have been replaced with ASC references.

     In December 2008, the FASB issued ASC 715-20-65-2, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“ASC 715-20-65-2”), which requires that an employer disclose the following information about the fair value of plan assets: 1) how investment allocation decisions are made, including the factors that are pertinent to understanding investment policies and strategies; 2) the major categories of plan assets; 3) the inputs and valuation techniques used to measure the fair value of plan assets; 4) the effect of fair value measurements using significant unobservable inputs on changes in plan assets for the period; and 5) significant concentrations of risk within plan assets. At initial adoption, application of this guidance would not be required for earlier periods that are presented for comparative purposes. The adoption of this guidance in 2009 will increase the disclosures within the Company’s consolidated financial statements related to the assets of its defined benefit pension and other postretirement benefit plans. This guidance will be effective for fiscal years ending after December 15, 2009, with early application permitted. The Company will adopt this guidance as of December 31, 2009.

     In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets” (“SFAS 166”), which has not been integrated into the Codification as of September 30, 2009. This guidance removes the concept of a qualifying special-purpose entity (“QSPE”) and removes the exception from applying consolidation guidance to these entities. SFAS 166 also clarifies the requirements for isolation and limitations on portions of financial assets that are eligible for sale accounting. This statement is effective for fiscal years beginning after November 15, 2009. Accordingly, the Company will adopt SFAS 166 as of January 1, 2010. The Company is currently evaluating the impact of adopting this standard on the consolidated financial statements.

     In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46R” (“SFAS 167”), which has not been integrated into the Codification as of September 30, 2009. SFAS 167 requires an analysis to determine whether a variable interest gives the entity a controlling financial interest in a variable interest entity. This statement requires an ongoing reassessment and eliminates the quantitative approach previously required for determining whether an entity is the primary beneficiary. This statement is effective for fiscal years beginning after November 15, 2009. Accordingly, the Company will adopt SFAS 167 as of January 1, 2010. The Company is currently evaluating the impact of adopting this standard on the consolidated financial statements.

     During 2009, the FASB has issued several ASU’s — ASU No. 2009-01 through ASU No. 2009-15. ASU 2009-01 amended the Codification, ASC 105, for the issuance of SFAS 168 discussed above. Except for the ASU discussed below, the ASU’s entail technical corrections to existing guidance or affect guidance related to specialized industries or topics and therefore have minimal, if any, impact on the Company.

     In August 2009, FASB issued ASU No. 2009-05 which amends Fair Value Measurements and Disclosures — Overall (“ASC Topic 820-10”) to provide guidance on the fair value measurement of liabilities. This update requires clarification for circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: 1) a valuation technique that uses either the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as an asset; or 2) another valuation technique that is consistent with the principles in ASC Topic 820 such as the income and market approach to valuation. The amendments in this update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. This update further clarifies that if the fair value of a liability is determined by reference to a quoted price in an active market for an identical liability, that price would be considered a Level 1 measurement in the fair value hierarchy. Similarly, if the identical liability has a quoted price when traded as an asset in an active market, it is also a Level 1 fair value measurement if no adjustments to the quoted price of the asset are required. This update is effective for the Company beginning October 1, 2009. The Company does not anticipate the adoption of ASU No. 2009-05 to have a material impact to the consolidated financial statements.

Accounting Estimates

     The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, allowance for doubtful accounts, sales returns and allowances, vendor rebates receivable, asset impairments, valuation of goodwill and unamortized other intangible assets, tax contingency reserves, deferred tax valuation allowances, trade promotion and consumer incentives, and assumptions related to pension and other post-retirement plans.

2. Business Combinations and Pending Business Combinations

2009 Acquisitions and Pending Acquisitions

     In January 2009, Feed contributed $0.3 million in cash to Superior Feed Solutions, LLC, a 50/50 joint venture with Ceres Solutions LLP. The joint venture is accounted for under the equity method of accounting as of and for the nine months ended September 30, 2009.

     On April 9, 2009, the Company announced that Agriliance LLC (“Agriliance”) (a 50-50 joint venture between the Company and United Country Brands, LLC (a wholly owned subsidiary of CHS Inc. (“CHS”)) entered into an operating lease and an asset purchase agreement with Agri-AFC, LLC (“Agri-AFC”), a wholesale and retail crop inputs supplier. Agri-AFC is a consolidated joint venture between Winfield Solutions, LLC, a Land O’Lakes wholly owned subsidiary, and Alabama Farmers Cooperative, Inc. Under the terms of the transaction documents, Agri-AFC immediately began operating nine former Agriliance retail locations located in Georgia and Mississippi, and purchased the working capital, primarily inventory, associated with such locations for $18.3 million. In July 2009, Agri-AFC completed the transaction and acquired the property, plant and equipment located at these sites for $2.9 million in cash.

     The Company also noted that as part of Agriliance’s ongoing restructuring, CHS purchased nine retail sites in September 2009 and the Company purchased 34 retail sites in October 2009. The Company anticipates that the restructuring will be substantially complete by the end of March 2010.

2008 Acquisitions

     In January and February of 2008, Agriliance distributed its interest in four agronomy joint ventures to the Company and CHS, and the Company acquired from CHS its partial interest in the joint ventures for a total cash payment of $8.3 million representing the net book value of these investments. In April 2008, a consolidated feed joint venture purchased the remaining interest in a subsidiary for $0.4 million in cash. In May 2008, the Company acquired a forage grass seed company for $1.7 million in cash and acquired a seed treatment business for $1.1 million in cash.

3. Receivables

     A summary of receivables is as follows:

		September 30,				December 31,
		2009				2008
Trade accounts		$	756,213			$	846,794
Notes and contracts			97,218				89,736
Vendor rebates			314,225				57,007
Other			61,313				130,591
			1,228,969				1,124,128
Less allowance for doubtful accounts			(22,382	)			(19,867	)
Total receivables, net		$	1,206,587			$	1,104,261

     A substantial portion of the Company’s receivables is concentrated in agriculture as well as in the wholesale and retail food industries. Collection of receivables may be dependent upon economic returns in these industries. The Company’s credit risks are continually reviewed, and management believes that adequate provisions have been made for doubtful accounts.

     The Company operates a wholly owned subsidiary that provides operating loans and facility financing to farmers and livestock producers, which are collateralized by the real estate, equipment and livestock of their farming operations. These loans, which relate primarily to dairy, swine, cattle and other livestock production, are presented as notes and contracts for the current portion and as other assets for the non-current portion. Total notes and contracts were $157.5 million at September 30, 2009 and $139.7 million at December 31, 2008 of which $90.5 million and $82.1 million, respectively, were included in the current portion in the table above.

     Vendor rebate receivables are primarily generated as a result of seed and chemical purchases. These receivables can vary significantly from period to period based on a number of factors, including, but not limited to, specific terms and conditions set forth in the underlying agreements, the timing of when such agreements become binding arrangements, and the timing of cash receipts. The Company may, on occasion, enter into inventory purchase commitments with vendors in order to achieve an optimal rebate return.

     Other receivables include margin receivables from commodity brokers on open derivative instruments, interest and expected insurance settlements.

4. Inventories

     A summary of inventories is as follows:

		September 30,				December 31,
		2009				2008
Raw materials		$	182,026			$	217,087
Work in process			1,903				1,639
Finished goods			904,903				865,252
Total inventories		$	1,088,832			$	1,083,978

5. Investments

     A summary of investments is as follows:

		September 30,				December 31,
		2009				2008
Agriliance LLC		$	116,147			$	176,191
Advanced Food Products, LLC			32,726				33,870
Ag Processing Inc.			31,405				31,858
Delta Egg Farm, LLC			11,832				11,464
Melrose Dairy Proteins, LLC			9,638				6,397
Universal Cooperatives, Inc.			7,849				7,877
CoBank, ACB			5,345				4,892
Pro-Pet, LLC			3,188				2,123
Wilco-Winfield, LLC			3,261				3,131
Prairie Farms Dairy, Inc.			2,913				2,954
Other — principally cooperatives and joint ventures			34,370				33,730
Total investments		$	258,674			$	314,487

     During the nine months ended September 30, 2009, the Company’s investment in Agriliance decreased by $60.1 million, primarily due to a $25.0 million dividend received, $10.2 million in equity losses for the period and a $24.9 million other comprehensive loss related to Agriliance’s annual pension adjustments.

     In February 2008, the Company and Golden Oval Eggs, LLC (“Golden Oval”) entered into an Amendment to Asset Purchase Agreement that modified certain terms and conditions of the sale of MoArk, LLC’s (“MoArk”) liquid egg operations to Golden Oval, including the cancellation of the principal amount owed under the note and the issuance of a warrant to the Company for the right to purchase 880,492 convertible preferred units. As of the date the warrant was issued, the Company determined that the underlying units had an insignificant fair value. In December 2008, Golden Oval announced that it entered into an agreement to sell substantially all of its assets. As of December 31, 2008, the Company held the warrant for the 880,492 convertible preferred units, which carried a preference upon liquidation of $11.357 per unit, and 697,350 Class A units. In February 2009, the Company notified Golden Oval that it intended to exercise the warrant prior to Golden Oval’s scheduled asset sale, noted above. The Company had the right, in its sole discretion, to convert to Class A units any preferred units it received upon exercise of its warrant. On March 2, 2009, in conjunction with Golden Oval’s planned sale of substantially all of its assets to Rembrandt Enterprises, Inc. (“Rembrandt”), the Company exercised its right to purchase 880,492 Class A Convertible Preferred Units (the “Preferred Units”) of Golden Oval. The Company also elected to convert the Preferred Units to an equal number of Golden Oval’s Class A Common Units on the condition that it would retain the preferred payment rights established in the certificate of designation of the Preferred Units. The sale of substantially all Golden Oval’s assets to Rembrandt closed as of March 30, 2009. In the first quarter of 2009, upon closing of the asset sale, the Company recorded a $6.4 million receivable and gain, which represents the preferred payment related to the 880,492 Preferred Units that were converted to Class A units in accordance with the terms of the warrant’s execution. In the second quarter of 2009, the Company recorded an additional $4.8 million gain, which represented the first distribution payment of the asset sale related to the total 1,577,842 Class A units owned by the Company. For the nine months ended September 30, 2009, the Company has received a total of $11.2 million in cash related to this transaction. The Company expects to receive an additional $1.1 million, approximately, of cash distributions from Golden Oval related to the asset sale in various amounts during 2009 and 2010 and additional gain will be recorded at that time. Once these distributions are complete, all 1,577,842 Class A units held by the Company are expected to have no remaining value.

6. Goodwill and Other Intangible Assets

Goodwill

     The carrying amount of goodwill by segment is as follows:

		September 30,				December 31,
		2009				2008
Feed		$	126,566			$	126,960
Dairy Foods			68,525				68,525
Agronomy			50,663				50,663
Layers			20,221				20,346
Seed			10,682				10,682
Total goodwill		$	276,657			$	277,176

     Goodwill amortization was $0 and $5.9 million for the nine months ended September 30, 2009 and 2008, respectively. Amortization of goodwill created as a result of business combinations between mutual enterprises ceased with the adoption of revised guidance within ASC 850 “Business Combinations” as of January 1, 2009. Amortization of goodwill was $7.9 million and $7.7 million for the years ended December 31, 2008 and 2007, respectively.

Other Intangible Assets

     A summary of other intangible assets is as follows:

		September 30,				December 31,
		2009				2008
Amortized other intangible assets:
Dealer networks and customer relationships, less accumulated amortization of $5,893 and $4,045, respectively		$	48,629			$	50,478
Patents, less accumulated amortization of $9,285 and $8,414, respectively			7,426				8,297
Trademarks, less accumulated amortization of $3,189 and $2,668, respectively			4,426				4,946
Other intangible assets, less accumulated amortization of $4,235 and $4,412, respectively			4,300				5,636
Total amortized other intangible assets			64,781				69,357
Total non-amortized other intangible assets — trademarks and license agreements			51,625				51,625
Total other intangible assets		$	116,406			$	120,982

     Amortization expense for the three months ended September 30, 2009 and 2008 was $1.3 million and $1.6 million, respectively. Amortization expense for the nine months ended September 30, 2009 and 2008 was $3.9 million and $4.0 million, respectively. The estimated amortization expense related to other intangible assets subject to amortization for the next five years will approximate $4.8 million annually. The weighted-average life of the intangible assets subject to amortization is approximately 18 years. Non-amortized other intangible assets relate to Feed and the majority of the amortized other intangible assets relate to Feed, Agronomy and Layers.

7. Accrued Liabilities

     A summary of accrued liabilities is as follows:

		September 30,				December 31,
		2009				2008
Marketing programs and consumer incentives		$	156,444			$	70,209
Employee compensation and benefits			116,617				141,376
Unrealized hedging losses and deferred option premiums received			17,398				99,964
Other			92,936				111,945
Total accrued liabilities		$	383,395			$	423,494

     Other accrued liabilities primarily include accrued taxes, interest, self-insurance reserves and environmental liabilities.

8. Debt Obligations

Notes and Short-term Obligations

     The Company had notes and short-term obligations at September 30, 2009 and December 31, 2008 of $610.6 million and $409.4 million, respectively. The Company maintains credit facilities to finance its short-term borrowing needs, including a revolving credit facility and a receivables securitization facility.

     On October 29, 2009, the Company announced that it had refinanced its principal debt facilities in order to, among other things, extend the term of its debt portfolio, a significant portion of which was scheduled to mature in 2010 and 2011, to provide liquidity for general corporate purposes and to take advantage of lower interest rates. The refinancing included the following elements: the call of the Company’s 8.75% Senior Unsecured Notes and 9.00% Senior Secured Notes, which are expected to be redeemed on December 15, 2009; the issuance of new secured private placement term debt; the replacement of the existing $400 million revolving credit facility with a new $375 million revolving credit facility; and the amendment of the Company’s existing $400 million receivables securitization facility.

     Until its replacement on October 29, 2009, the Company maintained a $400 million five-year revolving credit facility, which was scheduled to mature in August 2011. Borrowings bore interest at a variable rate (either LIBOR or an Alternative Base Rate) plus an applicable margin. The margin was dependent upon the Company’s leverage ratio. Based on the Company’s leverage ratio at the end of September 2009, the LIBOR margin for the revolving credit facility was 275 basis points and the spread for the Alternative Base Rate was 175 basis points. At September 30, 2009, $100.0 million was outstanding on the revolving credit facility and $258.8 million was available after giving effect to $41.2 million of outstanding letters of credit, which reduce availability. At December 31, 2008, there was no outstanding balance on the revolving credit facility and $188.6 million was available after giving effect to $36.4 million of outstanding letters of credit, which reduce availability.

     As noted above, on October 29, 2009, the Company entered into a replacement $375 million revolving credit facility led by CoBank, ACB, as administrative agent, bookrunner, collateral agent and joint lead arranger, and Banc of America Securities LLC, as joint lead arranger (the “CoBank Revolving Credit Facility”).

     Under the terms of the CoBank Revolving Credit Facility, lenders have committed to make advances and issue letters of credit until April 2013 in an aggregate amount not to exceed $375 million. Borrowings will bear interest at a variable rate (either LIBOR or an Alternative Base Rate) plus an applicable margin. The margin is dependent upon the Company’s leverage ratio. Based on the leverage ratio at the end of September 2009, the LIBOR margin for the CoBank Revolving Credit Facility would be 275 basis points. Spreads for the Alternative Base Rate are 100 basis points lower than the applicable LIBOR spreads. LIBOR may be set for one, two, three or six month periods at the Company’s election.

     The borrowings under the CoBank Revolving Credit Facility will be secured, on a pari passu basis with the new private placement notes, by substantially all the Company’s material assets and the assets and guarantees of certain of the Company’s wholly owned domestic subsidiaries. The credit agreement imposes certain restrictions on the Company and certain of its subsidiaries, including, but not limited to, the Company’s ability to incur additional indebtedness, make payments to members, make investments, grant liens, sell assets and engage in certain other activities.

     The Company’s $400 million, five-year receivables securitization facility arranged by CoBank ACB was amended and extended on October 29, 2009 and now matures in 2013. The Company and certain wholly owned consolidated entities sell Dairy Foods, Feed, Seed, Agronomy and certain other receivables to LOL SPV, LLC, a wholly owned, consolidated special purpose entity (the “SPE”). The SPE enters into borrowings which are effectively secured solely by the SPE’s receivables. The SPE has its own separate creditors that are entitled to be satisfied out of the assets of the SPE prior to any value becoming available to the Company. Borrowings under the receivables securitization facility bear interest at LIBOR plus an applicable margin. The amendment increased the margin from 87.5 basis points to 225 basis points. Apart from the interest rate and the tenor of the facility, all material terms of the facility were unchanged by the amendment. At September 30, 2009 and December 31, 2008, the SPE’s receivables were $636.3 million and $771.3 million, respectively. At September 30, 2009 and December 31, 2008, outstanding balances under the facility, recorded as notes and short-term obligations, were $400.0 million and $280.0 million, respectively and availability was $0 and $120.0 million, respectively.

     The Company also had $75.5 million as of September 30, 2009, and $74.5 million as of December 31, 2008, of notes and short-term obligations outstanding under a revolving line of credit and other borrowing arrangements for a wholly owned subsidiary that provides operating loans and facility financing to farmers and livestock producers.

     Additionally, the Company had $20.0 million outstanding as of September 30, 2009 and December 31, 2008 of notes and short term obligations under a credit facility with Agriliance, a 50/50 joint venture with CHS. The purpose of the credit facility is to provide additional working capital liquidity and allows the Company to borrow from or lend to Agriliance at a variable rate of LIBOR plus 100 basis points.

     The Company’s MoArk subsidiary maintains a $40 million revolving credit facility, which is subject to a borrowing base limitation. Borrowings bear interest at a variable rate (either LIBOR or an Alternative Base Rate) plus an applicable margin. At September 30, 2009 and December 31, 2008, the outstanding borrowings were $0. MoArk’s facility is not guaranteed by the Company nor is it secured by Company assets. The facility is scheduled to mature on June 1, 2012.

     The Company’s Agri-AFC, LLC (“Agri-AFC”) subsidiary maintains a $45 million revolving credit facility, which is subject to a borrowing base limitation. The revolving credit facility matures in March 2010. Borrowings bear interest at a variable rate of LIBOR plus 250 basis points. At September 30, 2009 and December 31, 2008, the outstanding borrowings were $15.1 million and $34.9 million, respectively. Agri-AFC’s facility is not guaranteed by the Company nor is it secured by Company assets, but it does contain a minimum net worth covenant which could require the Company to make subordinated loans or equity infusions into Agri-AFC if Agri-AFC’s net worth falls below certain levels. The revolving credit facility is subject to certain debt covenants, which were all satisfied as of September 30, 2009.

     The weighted average interest rate on short-term borrowings and notes outstanding at September 30, 2009 and December 31, 2008 was 1.51% and 1.94%, respectively.

Long-term Debt

     A summary of existing long-term debt is as follows:

		September 30,				December 31,
		2009				2008
Senior unsecured notes — due 2011 (8.75%)		$	174,002			$	174,002
Senior secured notes — due 2010 (9.00%)			149,700				149,700
Capital Securities of Trust Subsidiary — due 2028 (7.45%)			190,700				190,700
MoArk, LLC debt — due 2011 through 2023 (7.75% weighted average)			14,730				15,449
MoArk, LLC capital lease obligations (7.00% to 8.25%)			3,746				4,668
Other debt			4,934				300
			537,812				534,819
Less current portion			(2,581	)			(2,864	)
Total long-term debt		$	535,231			$	531,955

     As part of its overall refinancing, the Company provided an irrevocable redemption notice to the holders of the notes issued under the Indenture governing $350 million in aggregate principal amount of 8.75% Senior Unsecured Notes due 2011, dated as of November 14, 2001, (the “Unsecured Notes”) and the holders of the notes issued under the Indenture governing $175 million in aggregate principal amount of 9.00% Senior Secured Notes due 2010, dated as of December 23, 2003 (the “Secured Notes”) (the Unsecured Notes and Secured Notes, together, the “Called Notes”). The redemption notice provides that the Called Notes will be redeemed at par on December 15, 2009. The remaining principal balance of the outstanding Unsecured Notes and Secured Notes as of October 29, 2009 was $174 million and $149.7 million, respectively. Once the Called Notes have been redeemed, the Company’s obligation to file periodic reports with the Securities and Exchange Commission (the “SEC”) will terminate. Accordingly, the Company does not plan to make any filings with the SEC after it submits its Form 10-Q Report for the period ended September 30, 2009.

     The Company also entered into a Note Purchase Agreement with certain institutional lenders that governs the issuance of $325 million of privately placed notes (the “New Notes”). The New Notes will be issued and sold in three series, as follows: $155 million aggregate principal amount of 6.24% notes, due December 2016, (ii) $85 million aggregate principal amount of 6.67% notes, due December 2019 and (iii) $85 million aggregate principal amount of 6.77% notes, due December 2021. The sale of the New Notes will occur on or about December 15, 2009, and the Company will apply the proceeds to the redemption of the Called Notes. The New Notes will be secured, on a pari passu basis with the debt issued under the CoBank Revolving Credit Facility (described above), by substantially all the Company’s material assets and the assets and guarantees of certain of the Company’s wholly owned domestic subsidiaries. The Note Purchase Agreement imposes certain restrictions on the Company and certain of its subsidiaries, including, but not limited to, the Company’s ability to incur additional indebtedness, make payments to members, make investments, grant liens, sell assets and engage in certain other activities.

     In December 2008, the Company entered into a transaction with the City of Russell, Kansas (the “City”), whereby, the City purchased the Company’s Russell, Kansas feed facility (the “Facility”) by issuing $4.9 million in industrial development revenue bonds due December 2018 and leased the Facility back to the Company for an identical term under a capital lease. The City’s bonds were purchased by the Company. Because the City has assigned the lease to a trustee for the benefit of the Company as the sole bondholder, the Company, in effect, controls enforcement of the lease against itself. As a result of the capital lease treatment, the Facility will remain a component of property, plant and equipment in the Company’s consolidated balance sheet and no gain or loss was recognized related to this transaction. The capital lease obligation and the corresponding bond investment have been eliminated upon consolidation. Additional bonds may be issued to cover the costs of certain improvements to the facility. The maximum amount of bonds authorized for issuance is $6.0 million.

     The Company and MoArk are each subject to certain restrictions and covenant ratio requirements relating to their respective financing arrangements. As of September 30, 2009 and December 31, 2008, the Company and MoArk’s debt covenants were all satisfied.

9. Other Comprehensive Income

     Comprehensive income for the three and nine months ended September 30 was as follows:

		Three months ended								Nine months ended
		September 30,								September 30,
		2009				2008				2009				2008
Net (loss) earnings attributable to Land O’Lakes, Inc.		$	(4,314	)		$	28,562			$	159,833			$	192,630
Pension and other postretirement adjustments, net of income taxes of $9,513, $(1,122), $10,326 and $(1,041), respectively			(15,357	)			1,811				(16,670	)			1,680
Foreign currency translation adjustment, net of income taxes of $(55), $85, $(43) and $364, respectively			87				(137	)			69				(587	)
Unrealized gains (loss) on available-for-sale-investment securities, net of income taxes of $(2), $24, $(1) and $(38), respectively			8				(82	)			4				(335	)
Less: Other comprehensive (earnings) loss attributable to noncontrolling interests			(4	)			43				(2	)			121
Total comprehensive (loss) income attributable to Land O’Lakes, Inc.		$	(19,580	)		$	30,197			$	143,234			$	193,509

10. Derivative Instruments

     We are exposed to the impact of price fluctuations in dairy and agriculture commodity inputs consumed in operations and the impact of fluctuations in the relative value of currencies. We periodically enter into derivative instruments in order to mitigate the effects of changing commodity prices and mitigate our foreign currency risks.

     In the normal course of operations, the Company purchases commodities such as: milk, butter, soybean oil and various energy needs (“energy”) in Dairy Foods; soybean meal, corn and energy in Feed and Layers; soybeans and energy in Seed; and energy in Agronomy. The Company’s commodity price risk management strategy is to use derivative instruments to reduce risk caused by volatility in commodity prices due to fluctuations in the market value of inventories and fixed or partially fixed purchase and sales contracts. The Company enters into futures, forward and options contract derivative instruments for periods consistent with the related underlying inventory and purchase and sales contracts. These contracts are not designated as hedges under ASC 815, “Derivatives and Hedging.” The futures and option contracts are marked-to-market each month and gains and losses (“unrealized hedging gains and losses”) are primarily recognized in cost of sales. The Company has established formal position limits to monitor its price risk management activities and executes derivative instruments only with respect to those commodities which the Company consumes or produces in its normal business operations.

     The notional or contractual amount of derivative instruments provides an indication of the extent of the Company’s involvement in such instruments at that time, but does not represent exposure to market risk or future cash requirements under certain of these instruments. As of September 30, 2009, the total absolute notional value associated with our outstanding commodity derivative instruments and foreign currency derivative instruments was $341.2 million and $3.7 million, respectively.

     The unrealized (gains) and losses on derivative instruments related to commodity contracts and foreign currency exchange contracts for the three and nine months ended September 30, 2009 is as follows:

				Three Months Ended				Nine Months Ended
				September 30,				September 30,
Derivative Instrument		Location		2009				2009
Commodity derivatives		Cost of sales		$	4,089			$	(37,228	)
Commodity derivatives		Selling, general and administrative			1				(1,140	)
Foreign currency exchange contracts		Cost of sales			(417	)			(1,374	)
Foreign currency exchange contracts		Other (income) expense, net			—				341

     The gross fair market value of all derivative instruments and their location in the consolidated balance sheet are shown by those in an asset or liability position and are further categorized by commodity and foreign currency derivatives at September 30, 2009:

		Asset				Liability
		Derivatives(a)				Derivatives(a)
		September 30,				September 30,
Derivative Instrument		2009				2009
Commodity derivatives		$	16,647			$	13,518
Foreign currency exchange contracts			449				—
Total		$	17,096			$	13,518

     The Company enters into derivative instruments with a variety of counterparties. These instruments are primarily purchased and sold through brokers and regulated commodity exchanges. By using derivative financial instruments to manage exposures to changes in commodity prices and exchange rates, the Company exposes itself to the risk that the counterparty might fail to perform its obligations under the terms of the derivative contracts. The Company mitigates this risk by entering into transactions with high-quality counterparties and does not anticipate any losses due to non-performance. The Company manages its concentration of counterparty credit risk on derivative instruments prior to entering into derivative contracts by evaluating the counterparty’s external credit rating, where available, as well as an assessment of other relevant information such as current financial statements, credit agency reports and/or credit references. As of September 30, 2009, the maximum amount of loss that the Company would incur if the counterparties to derivative instruments fail to meet their obligations, not considering collateral received or netting arrangements, was $17.1 million. The Company reviewed its counterparties and believes that a concentration of risk does not exist and that a failure of any or all counterparties would have a material effect on the consolidated financial statements as of September 30, 2009.

11. Fair Value Measurements

     The carrying amounts and estimated fair values of the Company’s financial instruments are as follows as of:

		September 30, 2009								December 31, 2008
		Carrying Amount				Fair Value				Carrying Amount				Fair Value
Financial Derivatives:
Commodity derivative assets		$	16,647			$	16,647			$	50,053			$	50,053
Commodity derivative liabilities			13,518				13,518				85,292				85,292
Foreign currency exchange contract assets			449				449				341				341
Foreign currency exchange contract liabilities			—				—				925				925
Loans receivable			155,440				156,069				137,869				140,762
Available-for-sale securities			52				52				47				47
Debt:
Senior unsecured notes, due 2011			174,002				185,750				174,002				161,410
Senior secured notes, due 2010			149,700				162,386				149,700				150,999
Capital Securities of Trust Subsidiary, due 2028			190,700				163,408				190,700				107,580
MoArk fixed rate debt			18,476				19,975				20,117				17,548

     Unrealized gains and losses on financial derivative instruments are recorded at fair value in the consolidated financial statements.

     The fair value of derivative instruments is determined using quoted prices in active markets or is derived from prices in underlying futures markets.

     The fair value of loans receivable, which are loans made to farmers and livestock producers by the Company’s financing subsidiary, was estimated using a present value calculation based on similar loans made or loans re-priced to borrowers with similar credit risks. This methodology is used because no active market exists for these loans and the Company cannot determine whether the fair values presented would equal the value negotiated in an actual sale. The Company manages its credit risk related to these loans by using established credit limits, conducting ongoing credit evaluation and account monitoring procedures, and securing collateral when deemed necessary. Negative economic factors that may impact farmers and livestock producers could increase the level of losses within this portfolio.

     The fair value of fixed-rate long-term debt was estimated through a present value calculation based on available information on prevailing market interest rates for similar securities.

     The carrying value of financial instruments classified as current assets and current liabilities, such as cash and cash equivalents, trade receivables, accounts payable and notes and short-term obligations approximate fair value due to the short-term maturity of the instruments. The Company invests its excess cash in deposits with major banks and limits the amounts invested in any single institution to reduce risk. The Company regularly evaluates its credit risk to the extent that financial instruments are concentrated in certain industries or with significant customers and vendors, including the collectibility of receivables and prepaid deposits with vendors.

     The Company believes it is not feasible to readily determine the fair value of investments as there is no established market for these investments. The fair value of certain current and non-current notes receivable with a financial statement carrying value of $2.1 million and $14.7 million as of September 30, 2009 and $1.5 million and $18.6 million as of December 31, 2008, respectively, was not estimated because it is not feasible to readily determine the fair value.

     ASC 820 “Fair Value Measurements and Disclosures” establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

			Level 1: inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
			Level 2: inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
			Level 3: inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value.

     A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2009 and December 31, 2008:

						Fair Value Measurements at September 30, 2009 Using:
										Significant
						Quoted prices				other				Significant
		Total carrying				in active				observable				unobservable
		value at				markets				inputs				inputs
		September 30, 2009(a)				(Level 1)				(Level 2)				(Level 3)
Commodity derivative assets		$	16,647			$	16,220			$	427			$	—
Commodity derivative liabilities			13,518				13,143				375				—
Foreign currency exchange contract assets			449				—				449				—
Foreign currency exchange contract liabilities			—				—				—				—
Available-for-sale securities			52				52				—				—

						Fair Value Measurements at December 31, 2008 Using:
										Significant
						Quoted prices				other				Significant
		Total carrying				in active				observable				unobservable
		value at				markets				inputs				inputs
		December 31, 2008(a)				(Level 1)				(Level 2)				(Level 3)
Commodity derivative assets		$	50,053			$	49,139			$	914			$	—
Commodity derivative liabilities			85,292				85,128				164				—
Foreign currency exchange contract assets			341				—				341				—
Foreign currency exchange contract liabilities			925				—				925				—
Available-for-sale securities			47				47				—				—

     Since commodity derivative forward contracts and the foreign currency exchange forward contracts are not actively traded, they are priced at a fair value derived from an underlying futures market for the commodity or currency. Therefore, they have been categorized as Level 2. The available-for-sale equity securities and puts, calls and commodity futures are measured at fair value based on quoted prices in active markets and as such are categorized as Level 1.

     The fair value hierarchy for nonfinancial assets measured on a nonrecurring basis as of September 30, 2009 is as follows:

						Fair Value Measurements at September 30, 2009 Using:
										Significant								Loss(b) (before
						Quoted prices				other				Significant				income tax)
		Total carrying				in active				observable				unobservable				For the Nine
		value at				markets				inputs				inputs				Months Ended
		September 30, 2009				(Level 1)				(Level 2)				(Level 3)				September 30, 2009
Property, plant and equipment, net (held and used)		$	2,810			$	—			$	2,810			$	—			$	5,304
Property, plant and equipment, net (held and used)			2,857				—				—				2,857				1,323
Total		$	5,667			$	—			$	2,810			$	2,857			$	6,627

     In accordance with ASC 360-10-05, “Impairment or Disposal of Long-Lived Assets,” long-lived assets related to the Company’s announced closure of one of its Dairy Foods facilities with a carrying value of $8.1 million were written down to a fair value of $2.8 million based on significant other observable inputs (level 2) during the second quarter of 2009. This resulted in the Company recording an impairment loss (before income tax) of $5.3 million for the nine months ended September 30, 2009.

     Additionally, during the nine months ended September 30, 2009, the Company incurred a $1.3 million impairment loss (before income tax) related to a Layers facility in which the carrying value of $4.2 million was written down to its estimated fair value of $2.9 million due to the announced closure of the facility in 2010. The fair value was determined by the application of an internal discounted cash-flow model (level 3). Cash flows were determined based on management’s estimates of future production and using a discounted internal rate of return consistent with that used by the Company to evaluate cash flows of other assets of a similar nature.

12. Income Taxes

     The Company derives a majority of its business from members, although it is allowed by the Internal Revenue Code to conduct non-member business. Earnings from member business are deductible from taxable income as a patronage deduction. Earnings from non-member business are taxed as corporate income in the same manner as a typical corporation. The effective tax rate as a result of non-member business activity was (39.2%) and 5.3% for the three month periods ended September 30, 2009 and 2008, respectively and 14.0% and 9.7% for the nine month periods ended September 30, 2009 and 2008, respectively. Income tax expense and the overall effective tax rate varies significantly each period based upon profitability and the level of non-member business during each of the comparable periods. The tax expense for the three and nine months ended September 30, 2009 was primarily the result of non-member earnings offset by the book-tax reporting differences for domestic production activities deduction.

13. Pension and Other Postretirement Plans

     The following table presents the components of net periodic benefit cost for pension benefits and other postretirement benefits for the three months ended September 30:

										Other Postretirement
		Pension Benefits								Benefits
		2009				2008				2009				2008
Service cost		$	3,333			$	3,810			$	128			$	196
Interest cost			9,474				9,678				908				1,071
Expected return on assets			(10,432	)			(11,000	)			—				—
Amortization of actuarial loss			1,318				1,290				184				488
Amortization of prior service cost			(111	)			(132	)			—				—
Amortization of transition obligation			—				—				107				116
Net periodic benefit cost		$	3,582			$	3,646			$	1,327			$	1,871

     During the three months ended September 30, 2009, the Company contributed $21.1 million to its defined benefit pension plans and $0.8 million to its other postretirement benefits plans.

     The following table presents the components of net periodic benefit cost for pension benefits and other postretirement benefits for the nine months ended September 30:

										Other Postretirement
		Pension Benefits								Benefits
		2009				2008				2009				2008
Service cost		$	10,001			$	11,431			$	385			$	589
Interest cost			28,422				29,033				2,722				3,212
Expected return on assets			(31,298	)			(32,999	)			—				—
Amortization of actuarial loss			3,952				3,871				552				1,466
Amortization of prior service cost			(331	)			(396	)			—				—
Amortization of transition obligation			—				—				321				348
Net periodic benefit cost		$	10,746			$	10,940			$	3,980			$	5,615

     During the nine months ended September 30, 2009, the Company contributed $23.3 million to its defined benefit pension plans and $3.7 million to its other postretirement benefits plans.

     The Company expects to contribute approximately $24.6 million to its defined benefit pension plans and $5.4 million to its other postretirement benefits plans in 2009.

14. Restructuring and Impairment Charges

     A summary of restructuring and impairment charges is as follows:

		Three months ended								Nine months ended
		September 30,								September 30,
		2009				2008				2009				2008
Restructuring charges		$	803			$	—			$	3,409			$	41
Impairment charges			—				—				6,627				—
Total restructuring and impairment charges		$	803			$	—			$	10,036			$	41

Restructuring Charges

     On April 15, 2009, the Company announced its intent to close one of its Dairy Foods facilities and recorded charges of $2.1 million to restructuring, primarily related to employee severance, for the nine months ended September 30, 2009. All 120 employees at the Madison, Wisconsin plant were affected by the closure. The remaining restructuring liability of $1.4 million was presented in accrued liabilities in the consolidated balance sheet at September 30, 2009.

     During the three and nine months ended September 30, 2009, Feed incurred restructuring charges of $0.7 million and $1.2 million, respectively, primarily related to employee severance due to reorganization of Feed personnel. The remaining liability at September 30, 2009, for severance and other exit costs, including restructuring charges incurred in 2008, was $2.0 million and was presented in accrued liabilities in the consolidated balance sheet.

     During the three and nine months ended September 30, 2009, Layers incurred restructuring charges of $0.1 million, primarily related to employee severance due to the planned closure of its Berino, NM facility in 2010. The remaining liability at September 30, 2009 for severance and other exit costs was $0.1 million and was presented in accrued liabilities in the consolidated balance sheet.

Impairment Charges

     In connection with the announced closure of the Madison, WI facility within Dairy Foods, the Company incurred $5.3 million of impairment charges for the nine months ended September 30, 2009 as the carrying values of certain fixed assets were written down to fair value based on an estimated highest and best use of the fixed assets within this asset group.

     During the nine months ended September 30, 2009, Layers incurred $1.3 million of impairment charges related to the Berino, NM facility’s asset group within Layers in which the carrying value of $4.2 million was written down to its estimated fair value of $2.9 million due to the announced closure of the facility in 2010.

15. Other (Income) Expense, Net

		Three months ended								Nine months ended
		September 30,								September 30,
		2009				2008				2009				2008
(Gain) loss on sale of investments		$	—			$	—			$	(6,958	)		$	12
Loss on divestiture of a business			—				—				407				—
Gain on sale of intangibles			(300	)			—				(300	)			—
Gain on foreign currency exchange contracts on sale of investment			—				—				(177	)			—
Total other (income) expense, net		$	(300	)		$	—			$	(7,028	)		$	12

     The Company’s consolidated balance sheet at December 31, 2008 reflected a $10.8 million receivable for cash proceeds expected to be received in 2009 for the sale of an investment in Agronomy Company of Canada Ltd. (“ACC”) within Agronomy. During the nine months ended September 30, 2009, the Company received $6.4 million in cash. The remaining $4.4 million receivable represented the portion recorded by the Company at December 31, 2008 in accordance with the sales agreement. The sales agreement required a final purchase price true-up based on the audited financial statements for ACC as of December 31, 2008. The Company received the audited financial statements for ACC in 2009, which reflected significantly different financial results than expected or previously reported to the Company. The Company has disputed the results of the audit. However, based on the available information, the Company elected to establish a reserve for the amount in dispute and has recorded a $4.2 million loss on sale of investment for the nine months ended September 30, 2009, which reduced the remaining receivable to the amount of the newly reported purchase price true-up.

     Additionally, during the nine months ended September 30, 2009, the Company recognized $11.2 million of gains on sale of investment in Golden Oval within Layers. The Company expects to receive an additional $1.1 million, approximately, of cash distributions from Golden Oval related to the asset sale in various amounts during 2009 and 2010 and will record a further gain on sale of investment as cash is received. Once these distributions are complete, all 1,577,842 Class A units held by the Company are expected to have no remaining value. See Note 5 for additional information regarding this transaction.

     During the nine months ended September 30, 2009, Feed divested a business for $2.7 million in cash, which resulted in a $0.4 million loss.

     During the three and nine months ended September 30, 2009, Feed recognized a $0.3 million gain on the sale of intangibles.

     During the nine months ended September 30, 2009, the Company received $0.5 million in cash and recognized a $0.2 million gain on foreign currency exchange contracts on the sale of its investment related to ACC.

16. Insurance Proceeds

     In October 2008, the Company received notification from its insurance carrier that it would receive $6.7 million of insurance proceeds for the replacement of capital assets at a Feed facility in Statesville, North Carolina that was destroyed by fire in 2005. At December 31, 2008, $6.4 million remained as a receivable in the consolidated balance sheet. The Company received $6.5 million of insurance proceeds and recorded the additional $0.1 million of cash received in excess of the receivable within the selling, general and administrative line of the consolidated statements of operations for the nine months ended September 30, 2009. The Company does not anticipate any further insurance recoveries related to the Statesville fire.

17. Commitments and Contingencies

     On March 6, 2007, the Company announced that one of its indirect wholly owned subsidiaries, Forage Genetics Inc. filed a motion to intervene in a lawsuit brought against the U.S. Department of Agriculture (“USDA”) by the Center for Food Safety, the Sierra Club, two individual farmers/seed producers (together, the “Plaintiffs”) and others regarding Roundup Ready^® Alfalfa. The plaintiffs claim that the USDA did not sufficiently assess the potential environmental impact of its decision to approve Roundup Ready^® Alfalfa in 2005. The Monsanto Company and several independent alfalfa growers also filed motions to intervene in the lawsuit. On March 12, 2007, the United States District Court for the Northern District of California (the “Court”) issued a preliminary injunction enjoining all future plantings of Roundup Ready^® Alfalfa beginning March 30, 2007. The Court specifically permitted plantings until that date only to the extent the seed to be planted was purchased on or before March 12, 2007. On May 3, 2007, the Court issued a permanent injunction enjoining all future plantings of Roundup Ready^® Alfalfa until after an environmental impact study can be completed and a deregulation petition is approved. Roundup Ready^® Alfalfa planted before March 30, 2007 may be grown, harvested and sold to the extent certain court-ordered cleaning and handling conditions are satisfied. In January 2008, the USDA filed a notice of intent to file an Environmental Impact Study (the “EIS”). Despite delays in the completion of the draft EIS, the Company anticipates that the USDA will issue its EIS in early 2010. Although the Company believes the outcome of the EIS will be favorable, which would allow for the reintroduction of the product into the market in 2010, there are approximately $3.1 million of purchase commitments with seed producers over the next year and $33.4 million of inventory as of September 30, 2009, which could negatively impact future earnings if the results of the study are unfavorable or delayed.

     In a letter dated January 18, 2001, the Company was identified by the United States Environmental Protection Agency (“EPA”) as a potentially responsible party in connection with hazardous substances and wastes at the Hudson Refinery Superfund Site in Cushing, Oklahoma. The letter invited the Company to enter into negotiations with the EPA for the performance of a remedial investigation and feasibility study at the Site and also demanded that the Company reimburse the EPA approximately $8.9 million for removal costs already incurred at the Site. In March 2001, the Company responded to the EPA denying any responsibility with respect to the costs incurred for the remediation expenses incurred through that date. On February 25, 2008, the Company received a Special Notice Letter (“Letter”) from the EPA inviting the Company to enter into negotiations with the EPA to perform selected remedial action for remaining contamination and to resolve the Company’s potential liability for the Site. In the Letter, the EPA claimed that it has incurred approximately $21.0 million in response costs at the Site through October 31, 2007 and is seeking reimbursement of these costs. The EPA has also stated that the estimated cost of the selected remedial action for remaining contamination is $9.6 million. The Company maintains that the costs incurred by the EPA were the direct result of damage caused by owners subsequent to the Company, including negligent salvage activities and lack of maintenance. On January 6, 2009, the EPA issued a Unilateral Administrative Order (“UAO”) directing the Company to perform remedial design and remedial action (“RD/RA”) at the Site. The Company filed its Notice of Intent to Comply with the UAO on February 10, 2009. On April 20, 2009, the EPA issued its authorization to proceed with RD/RA activities. In addition, the Company is analyzing the amount and extent of its insurance coverage that may be available to further mitigate its ultimate exposure. At the present time, the Company’s request for coverage has been denied. The Company initiated litigation against two carriers on February 18, 2009. As of September 30, 2009, based on the most recent facts and circumstances available to the Company, an $8.9 million environmental reserve recorded in 2008 remained in the Company’s consolidated financial statements.

     On October 27, 2008, the Office of the Attorney General of the State of Florida issued Civil Investigative Demands (“CIDs”) to MoArk and its wholly owned subsidiary, Norco Ranch, Inc. (“Norco”). The CIDs seek documents and information relating to the production and sale of eggs and egg products. MoArk and Norco are cooperating with the Office of the Attorney General of the State of Florida. We cannot predict what, if any, impact this inquiry and any results from such inquiry could have on the future financial position or results of operations of MoArk, Norco or the Company.

     Between September 2008 and January 2009, a total of twenty-two related class action lawsuits were filed against a number of producers of eggs and egg products in three different jurisdictions alleging violations of antitrust laws. MoArk was named as a defendant in twenty-one of the cases. Norco Ranch, Inc., was named as a defendant in thirteen of the cases. The Company was named as a defendant in seven cases. The cases have been consolidated for pretrial proceedings in the District Court for the Eastern District of Pennsylvania, and two separate consolidated amended class action complaints have been filed, which supersede the earlier filed complaints: one on behalf of those persons who purchased eggs or egg products directly from defendants, and the second on behalf of “indirect” purchasers (i.e., persons who purchased eggs or egg products from defendants’ customers). The consolidated amended complaints allege concerted action by producers of shell eggs to restrict output and thereby increase the price of shell eggs and egg products. The Plaintiffs in these suits seek unspecified damages and injunctive relief on behalf of all purchasers of eggs and egg products, as well as attorneys’ fees and costs. MoArk, Norco and the Company deny the allegations set forth in the complaints. The Company cannot predict what, if any, impact these lawsuits could have on the future financial position or results of operations of MoArk, Norco, or the Company.

     In December 2008, the Company experienced a fire at a dairy facility in Tulare, California. The carrying value of the damaged building and supplies inventory was minimal. Costs to repair the damaged property are covered under the terms of applicable insurance policies, subject to deductibles. The Company expects to receive insurance proceeds for reconstruction costs which, when received, could result in a gain on insurance settlement.

     In May 2008, the Company experienced a fire at a Feed facility located in Caldwell, Idaho. Damage was extensive and caused operations to cease. Costs of repair or replacement of property, plant, and equipment and replacement of inventory were covered under the terms of applicable insurance policies, subject to deductibles. A receivable of $1.0 million related to the carrying value of the inventory and property, plant and equipment remained recorded as of September 30, 2009. The Company expects to receive insurance proceeds in excess of its deductible.

     In 2007, a fire occurred at a Layers egg processing facility located in Anderson, Missouri. Damage was extensive and caused operations to cease. Costs of repair or replacement of inventory, property and equipment, and business interruption are covered under the terms of applicable insurance policies, subject to deductibles. In 2008, MoArk received insurance proceeds related to the repair or replacement of inventory and property and equipment and recorded a gain of $2.0 million. MoArk expects to receive additional proceeds related to replacement of capital assets and business interruption which, when received, could result in additional gains on insurance settlements.

     In 2005, MoArk sold its Lakeview, California property and simultaneously entered into an asset lease agreement for a portion of the property. This agreement required the Company to treat the proceeds received as a financing transaction. Therefore, no gain was recognized on the transaction at that time. In January 2009, MoArk renegotiated the terms of the lease. The new lease qualifies for sales-leaseback accounting and has been classified as an operating lease pursuant to ASC 840, “Leases”. As such, $3.3 million of previously deferred gain on the sale of the property was recognized for the nine months ended September 30, 2009. The Company will continue to ratably recognize the remainder of the deferred gain of $1.6 million over the life of the new lease.

18. Subsequent Events

     On October 29, 2009 the Company announced that it had refinanced its principal debt facilities in order to, among other things, extend the term of its debt portfolio, a significant portion of which was scheduled to mature in 2010 and 2011, to provide liquidity for general corporate purposes and to take advantage of lower interest rates. The refinancing included the following elements: the call of the Company’s 8.75% Senior Unsecured Notes and 9.00% Senior Secured Notes, which are expected to be redeemed on December 15, 2009; the issuance of new secured private placement term debt; the replacement of the existing $400 million credit facility with a new $375 million revolving credit facility; and the amendment of the Company’s existing $400 million receivables securitization facility. See “Note 8 Debt Obligations” for more information. Once the Senior Unsecured Notes and the Senior Secured Notes have been redeemed, the Company’s obligation to file periodic reports with the SEC will terminate. Accordingly, the Company does not plan to make any filings with the SEC after it submits its Form 10-Q Report for the period ended September 30, 2009, which is expected to be filed on or before November 13, 2009.

     In October 2009, the Company notified certain of its customers, primarily dealers and cooperatives, of a voluntary recall of certain lots of defective sorghum seed. The defective seed was manufactured by a vendor of the Company and the defect was a result of a sterile inbred, which prevented the sorghum seeds from producing grain unless fertilized by pollen from adjacent fields. The Company is currently formalizing the recall and settlement process with the responsible vendor and accordingly, expects the recall to have no material effect on the Company’s results of operations.

     The Company has evaluated all subsequent events through November 13, 2009, the date of filing this Form 10-Q.

19. Segment Information

     The Company operates in five segments: Dairy Foods, Feed, Seed, Agronomy and Layers.

     Dairy Foods produces, markets and sells products such as butter, spreads, cheese and other dairy related products. Products are sold under well-recognized national brand names including LAND O LAKES, the Indian Maiden logo and Alpine Lace, as well as under regional brand names such as New Yorker.

     Feed is largely comprised of the operations of Land O’Lakes Purina Feed LLC (“Land O’Lakes Purina Feed”), the Company’s wholly owned subsidiary. Land O’Lakes Purina Feed develops, produces, markets and distributes animal feeds such as ingredient feed, formula feed, milk replacers, vitamins and additives.

     Seed is a supplier and distributor of crop seed products, primarily in the United States. A variety of crop seed is sold, including corn, soybeans, alfalfa and forage and turf grasses.

     Agronomy consists primarily of the operations of Winfield Solutions, LLC (“Winfield”), a wholly owned subsidiary. Winfield operates primarily as a wholesale distributor of crop protection products, including herbicides, pesticides, fungicides and adjuvants. Agronomy also includes the Company’s 50% ownership in Agriliance, which operates retail agronomy distribution businesses and is accounted for under the equity method.

     Layers consists of the Company’s MoArk subsidiary. MoArk produces, distributes and markets shell eggs that are sold to retail and wholesale customers for consumer and industrial use, primarily in the United States.

     Other/Eliminated includes the Company’s remaining operations and the elimination of intersegment transactions. Other operations consist principally of a captive insurance company, a finance company, and a special purpose entity related to the Company’s securitization facility.

     The Company’s management uses earnings before income taxes to evaluate a segment’s performance. The Company allocates corporate administrative expense, interest expense, and centrally managed expenses, including insurance and employee benefits expense, to all of its business segments, both directly and indirectly. Corporate administrative functions that are able to determine actual services provided to each segment allocate expense on a direct basis. Interest expense is allocated based on working capital usage. All other corporate administrative functions and centrally managed expenses are allocated indirectly based on a predetermined measure such as a percentage of total invested capital or headcount.

     Segment information for the three and nine months ended September 30, 2009 and 2008 is as follows:

																						Other/
		Dairy Foods				Feed				Seed				Agronomy				Layers				Eliminations				Consolidated
For the three months ended September 30, 2009:
Net sales (1)		$	776,070			$	833,378			$	(14,643	)		$	482,862			$	110,579			$	(10,722	)		$	2,177,524
Cost of sales (2)			715,955				764,932				(25,081	)			431,895				110,434				(10,873	)			1,987,262
Selling, general and administrative			49,096				64,453				23,450				30,594				10,424				1,395				179,412
Restructuring and impairment			—				704				—				—				99				—				803
Interest expense (income), net			3,680				6,118				(66	)			1,785				2,210				(1,265	)			12,462
Other income, net			—				(300	)			—				—				—				—				(300	)
Equity in (earnings) loss of affiliated companies			(1,519	)			(1,754	)			(11	)			2,567				1,695				—				978
Earnings (loss) before income taxes		$	8,858			$	(775	)		$	(12,935	)		$	16,021			$	(14,283	)		$	21			$	(3,093	)
For the three months ended September 30, 2008:
Net sales (1)		$	984,888			$	990,757			$	45,014			$	642,168			$	135,470			$	(14,367	)		$	2,783,930
Cost of sales (2)			953,080				947,907				37,627				486,925				132,696				(10,905	)			2,547,330
Selling, general and administrative			52,057				69,483				18,641				46,943				14,339				3,179				204,642
Gain on insurance settlement			—				—				—				—				(4,032	)			—				(4,032	)
Interest expense (income), net			4,519				9,296				(3,944	)			2,318				4,481				(1,301	)			15,369
Equity in loss (earnings) of affiliated companies			656				(878	)			—				(11,602	)			(1,717	)			—				(13,541	)
Earnings (loss) before income taxes		$	(25,424	)		$	(35,051	)		$	(7,310	)		$	117,584			$	(10,297	)		$	(5,340	)		$	34,162
For the nine months ended September 30, 2009:
Net sales (1)		$	2,242,329			$	2,578,104			$	1,124,303			$	1,681,743			$	368,584			$	(55,726	)		$	7,939,337
Cost of sales (2)			2,076,214				2,351,198				984,556				1,500,481				354,356				(56,889	)			7,209,916
Selling, general and administrative			147,496				188,291				67,639				77,760				27,056				231				508,473
Restructuring and impairment			7,441				1,173				—				—				1,422				—				10,036
Interest expense (income), net			8,781				18,362				3,313				4,862				6,675				(3,693	)			38,300
Other expense (income), net			—				107				—				4,046				(11,181	)			—				(7,028	)
Equity in (earnings) loss of affiliated companies			(6,586	)			(5,399	)			(88	)			9,270				280				—				(2,523	)
Earnings (loss) before income taxes		$	8,983			$	24,372			$	68,883			$	85,324			$	(10,024	)		$	4,625			$	182,163
For the nine months ended September 30, 2008:
Net sales (1)		$	3,070,416			$	2,858,333			$	920,207			$	2,123,009			$	455,208			$	(58,379	)		$	9,368,794
Cost of sales (2)			2,906,720				2,639,800				817,433				1,863,880				395,756				(53,590	)			8,569,999
Selling, general and administrative			143,891				201,947				61,749				104,549				36,255				13,939				562,330
Restructuring and impairment			41				—				—				—				—				—				41
Gain on insurance settlement			—				—				—				—				(4,032	)			—				(4,032	)
Interest expense (income), net			10,321				23,040				(5,201	)			13,400				10,433				(3,902	)			48,091
Other expense, net			—				12				—				—				—				—				12
Equity in earnings of affiliated companies			(4,801	)			(1,785	)			(1,252	)			(14,020	)			(16,241	)			—				(38,099	)
Earnings (loss) before income taxes		$	14,244			$	(4,681	)		$	47,478			$	155,200			$	33,037			$	(14,826	)		$	230,452
(1) Net sales includes intersegment sales of:
																						Other/
		Dairy Foods				Feed				Seed				Agronomy				Layers				Eliminations				Consolidated
For the three months ended: September 30, 2009		$	2,991			$	9,507			$	(3,263	)		$	2,023			$	—			$	(11,258	)		$	—
For the three months ended: September 30, 2008			1,705				16,946				(1,590	)			60				—				(17,121	)			—
For the nine months ended: September 30, 2009			7,185				28,089				18,755				4,164				—				(58,193	)			—
For the nine months ended: September 30, 2008			6,128				38,209				11,483				10,955				—				(66,775	)			—
(2) Cost of sales includes unrealized hedging (gains) losses of:
																						Other/
		Dairy Foods				Feed				Seed				Agronomy				Layers				Eliminations				Consolidated
For the three months ended: September 30, 2009		$	8,291			$	(2,555	)		$	(1,698	)		$	(67	)		$	(33	)		$	(266	)		$	3,672
For the three months ended: September 30, 2008			(354	)			19,407				10,048				—				2,075				1,184				32,360
For the nine months ended: September 30, 2009			(16,703	)			(18,909	)			(8,609	)			(775	)			(507	)			6,901				(38,602	)
For the nine months ended: September 30, 2008			(4,611	)			25,617				10,393				—				2,695				1,399				35,493

20. Consolidating Financial Information

     The Company has entered into financing arrangements which are guaranteed by the Company and certain of its wholly owned subsidiaries (the “Guarantor Subsidiaries”). Such guarantees are full, unconditional and joint and several. The Guarantor Subsidiaries consist primarily of Winfield Solutions, LLC and Land O’Lakes Purina Feed LLC. The Non-Guarantor Subsidiaries consist primarily of: MoArk, LLC; LOL SPV, LLC; LOL Finance Co.; wholly owned foreign subsidiaries and various majority-owned consolidated joint ventures.

     In January and February 2008, the Company acquired partial interests in four joint ventures which are part of Winfield, but are non-guarantors of the Company’s financing arrangements. Accordingly, the consolidated joint ventures’ financial information has been included with the non-guarantor subsidiaries as of and for six months ended June 30, 2008. Subsequently, in July 2008, three of the four joint ventures were deconsolidated due to renegotiated operating agreements and corresponding ownership changes. Accordingly, one remaining consolidated joint venture’s financial information has been included with the non-guarantor subsidiaries as of and for the three and nine months ended September 30, 2009 and 2008. The financial information related to the three deconsolidated joint ventures was included in the non-guarantor subsidiaries until the date of deconsolidation and subsequently has been included as equity method investments in the financial results of Winfield.

     The following supplemental financial information sets forth, on an unconsolidated basis, balance sheet, statement of operations and cash flow information for Land O’Lakes, Guarantor Subsidiaries and Land O’Lakes other subsidiaries (the “Non-Guarantor Subsidiaries”). The supplemental financial information reflects the investments of the Company in the Guarantor and Non-Guarantor Subsidiaries using the equity method of accounting.

LAND O’LAKES, INC.
SUPPLEMENTAL CONSOLIDATING BALANCE SHEET
September 30, 2009

		Land
		O’Lakes, Inc.				Consolidated				Non-Guarantor
		Parent Company				Guarantors				Subsidiaries				Eliminations				Consolidated
ASSETS
Current assets:
Cash and cash equivalents		$	4,069			$	2,353			$	23,312			$	—			$	29,734
Receivables, net			43,793				658,580				788,004				(283,790	)			1,206,587
Intercompany receivables, net			169,128				75,159				1,240				(245,527	)			—
Inventories			439,493				580,437				68,902				—				1,088,832
Prepaid assets			34,411				4,946				2,894				—				42,251
Other current assets			51,261				8,555				971				—				60,787
Total current assets			742,155				1,330,030				885,323				(529,317	)			2,428,191
Investments			1,149,660				58,576				16,151				(965,713	)			258,674
Property, plant and equipment, net			281,237				296,787				115,822				—				693,846
Goodwill, net			191,541				64,532				20,584				—				276,657
Other intangibles, net			1,406				108,547				6,453				—				116,406
Other assets			53,130				40,531				68,581				(3,925	)			158,317
Total assets		$	2,419,129			$	1,899,003			$	1,112,914			$	(1,498,955	)		$	3,932,091
LIABILITIES AND EQUITIES
Current liabilities:
Notes and short-term obligations		$	120,001			$	2,704			$	767,700			$	(279,793	)		$	610,612
Current portion of long-term debt			10				54				2,517				—				2,581
Accounts payable			282,626				615,290				38,811				(7,887	)			928,840
Intercompany payables, net			—				244,882				645				(245,527	)			—
Customer advances			363				31,906				1,246				—				33,515
Accrued liabilities			113,787				240,180				29,463				(35	)			383,395
Patronage refunds and other member equities payable			39,600				—				—				—				39,600
Total current liabilities			556,387				1,135,016				840,382				(533,242	)			1,998,543
Long-term debt			513,317				82				21,832				—				535,231
Employee benefits and other liabilities			327,090				28,744				6,007				—				361,841
Commitments and contingencies
Equities:
Capital stock			1,439				(34	)			2,935				(2,901	)			1,439
Additional paid-in capital			—				196,909				77,429				(274,338	)			—
Member equities			964,665				—				—				—				964,665
Accumulated other comprehensive loss			(166,876	)			(18	)			22				(4	)			(166,876	)
Retained earnings			223,107				538,304				150,166				(688,470	)			223,107
Total Land O’Lakes, Inc. equities			1,022,335				735,161				230,552				(965,713	)			1,022,335
Noncontrolling interests			—				—				14,141				—				14,141
Total equities			1,022,335				735,161				244,693				(965,713	)			1,036,476
Total liabilities and equities		$	2,419,129			$	1,899,003			$	1,112,914			$	(1,498,955	)		$	3,932,091