OPERATING AND FINANCIAL REVIEW (CONTINUED) 1. Review (continued) Annual Report 2013 13 AACo determined during the last quarter of 2012 not to sell cattle into an over-supplied domestic market where possible, focusing on retaining and  improving a young herd and converting its cattle into beef for sale into a strong global thematic for red meat protein. This strategy has meant that AACo held substantial numbers of cattle as market prices in Australia fell throughout 2012 and into 2013. In  accordance with Australian Accounting Standard AASB 141 Agriculture, the estimated market value of AACo’s herd has fallen in the 3 months to  31 March 2013. This change in the valuation of the current herd has significantly affected the Consolidated Income Statement. The difference  in market value price movements between 31 March 2013 and the prior corresponding period is a reduction of $37.2 million. The main impact  on this market value price movement was the breeder herd value decline of $35.3 million, based on independent valuations, since 31 December  2012. AACo sees the breeder herd as a significant and necessary asset. These cattle will be held for long periods of time as they are essential to  the development of an integrated supply chain and hence non-cash movements in the valuation of this herd are not expected to be realised in the  short term. Summarised operating results are as follows: Cash EBITDA reconciliation  3 months to 31 Mar 2013 $’000 3 months to 31 Mar 2012 $’000 1 2 months to 31 Dec 2012 $’000 Cattle sales 40,569 37,463 236,812 Cattle purchases at cost (5,683) (10,848) (62,131) Cost of purchasing & selling cattle (3,569) (2,711) (23,101) Finished & store cattle revenue 31,317 23,904 151,580 Cattle expenses & feedlot cattle expenses (14,416) (11,034) (66,944) Finished & store cattle gross margin  (1) 16,901 12,870 84,636 Wholesale beef gross margin 602 783 4,141 Farming gross margin 1,512 (895) 7,841 Group gross margin 19,015 12,758 96,618 Other revenue 1,151 403 4,601 Operating expenses (25,289) (17,875) (81,848) Cash EBITDA (5,123) (4,714) 19,371 Operating Segments  Revenues Earnings before finance costs and income tax expense 3 months to  31 Mar 2013 12 months to  31 Dec 2012 3 months to  31 Mar 2012 3 months to  31 Mar 2013  1 2 months to  31 Dec 2012 3 months to  31 Mar 2012 $M $M $M $M $M $M Finished & store cattle  40.6 236.8  37.5 (63.2) 15.0  0.4 Wholesale beef  38.1 140.4  23.7 (0.3) 1.1 - Farming   0.9 24.1 - (3.0) (0.6) (2.8) Meat processing - - - (0.7) (0.7) (0.9)