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and 1983 for the first time in its history. Petitioner's
management attributed the company's poor performance to
the end of the energy crisis and resulting glut of oil,
worldwide over-production of grains, high interest rates,
and the Federal Government's implementation of the payment-
in-kind program, which caused a general decrease in the
production of many agricultural commodities. Petitioner's
members were also adversely affected by a general recession
in the agricultural sector of the economy during this
period. Petitioner's consolidated financial data regarding
the company's farm supply operations for the period from
1980 to 1983 are as follows:
1980 1981 1982 1983
Gross farm supply revenue $2,725 $3,040 $2,775 $2,546
Farm supply operating
273 187 90 2
savings
Total net savings1 202 68 (32) (138)
Interest expense 92 105 122 106
Funded long-term debt 584 684 795 566
Fixed assets before
1,410 1,655 1,787 1,149
depreciation
1Total net savings before income taxes, patronage refunds, and
extraordinary items.
During the period from 1981 to 1983, petitioner's
operating and capital needs were met primarily through a
combination of bank financing on a floating-rate basis,
issuance of medium- and long-term subordinated debt, and
retained earnings, including patronage dividends not paid
in cash. During this period, petitioner's loans from the
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