Superior Court of the City and County of San Francisco, No. CGC05-439929, A. James Robertson II, Judge.
 The opinion of the court was delivered by: Bruiniers, J.
 CERTIFIED FOR PUBLICATION
 (San Francisco City and County Super. Ct. No. CGC 05-439929)
 Under California's version of the Uniform Division of Income for Tax Purposes Act (UDITPA; Rev. & Tax. Code, § 25120 et seq.),*fn1 the portion of a national or multinational company's income that is subject to taxation in this state is determined by a formula that compares the company's payroll, property and sales in this state to its total payroll, property and sales. When the standard formula does not fairly represent the extent of the company's business in California, however, UDITPA also provides for application of a reasonable alternate formula in order to achieve an equitable result. (§ 25137; Microsoft Corp. v. Franchise Tax Bd. (2006) 39 Cal.4th 750, 757 (Microsoft).)
 General Mills, Inc. and its subsidiary corporations (hereafter, General Mills) is a unitary group of corporations operating both within and outside California. It is a consumer foods company with its principal place of business in Minneapolis, Minnesota. In opposing this tax refund action, the Franchise Tax Board seeks to apply an alternative formula to income resulting from trading by General Mills in agricultural commodity futures. General Mills engages in such trades as a hedging strategy to protect against price fluctuations in the basic materials it needs for its business, the manufacture and sale of consumer food products as well as flour and grain. In a prior appeal (General Mills v. Franchise Tax Bd. (2009) 172 Cal.App.4th 1535, 1548 (General Mills I), we held that the proceeds from this activity were properly included as "gross receipts" under section 25120, subdivision (e) in the standard UDITPA sales apportionment factor. Since the trading activity did not occur in California, the inclusion would result in a reduction in California tax liability.
 Because the trial court had not reached the issue of whether the UDITPA apportionment formula, including the trading proceeds, "does not then 'fairly represent' General Mills's business activity within California, thus warranting imposition of an alternative formula pursuant to section 25137," we remanded for the trial court to decide that issue. (General Mills I, supra, 172 Cal.App.4th at p. 1548.) On remand, the trial court took additional evidence, considered further argument, and ruled that including overall gross receipts from futures trading in the standard UDITPA formula did not fairly represent the extent of General Mills's business activity in California. It allowed the Franchise Tax Board to impose an alternate formula that included only the net gains generated by General Mills from futures sales. We affirm.
 We conclude that General Mills's hedging activity--while integral to General Mills's main consumer food business is both qualitatively different from General Mills's other sales that are made for profit and substantially distorts the percentage of General Mills's income that is apportioned to California. The Franchise Tax Board's alternate formula, including only the net gains from General Mills's futures sales, is reasonable and may be imposed consistent with UDITPA.
 As our Supreme Court has observed, "UDITPA's application is not always clear." (Microsoft, supra, 39 Cal.4th at p. 755, fn. omitted.) In General Mills I, we considered "whether commodity futures sales that are made to hedge against price fluctuations should be included in the sales factor of the [UDITPA]." (General Mills I, supra, 172 Cal.App.4th at p. 1537.) We described the background of this litigation as follows:
 "[General Mills] seek[s] refunds from California's Franchise Tax Board for the tax year ending May 31, 1992, through the tax year ending May 25, 1997. Because General Mills is a unitary group of corporations operating both within and outside of California, the proportion of its income that is subject to California taxation is determined by the UDITPA. The Franchise Tax Board calculates General Mills's total business income[*fn2 ] . . . and uses an apportionment formula to determine the percentage of the income that will be subject to California taxation. ( . . . §§ 25120, subds. (a), (d), 25128.)
 "The apportionment formula recognizes three factors: property, payroll, and sales. (§ 25128.) Each factor is a fraction where the numerator is the amount attributable to California and the denominator is the total amount. (§§ 25129, 25132, 25134.) When combined,[*fn3 ] the factors establish the fraction (apportionment percentage) of the unitary business's total business income that is subject to California taxation. (§ 25128.) Collectively, the property, payroll and sales factors are intended to represent the taxpayer's business activity within California. (See § 25137.) If the taxpayer or the Franchise Tax Board can demonstrate that the factors do not fairly represent the taxpayer's business activity within California, the taxpayer may request and the Franchise Tax Board may require that an alternative allocation and apportionment formula be applied. (§ 25137; see generally Microsoft, 39 Cal.4th at pp. 755-757.)
 "Only the sales factor is at issue in this litigation. As to the sales factor, the only issue is the treatment of General Mills's sales on commodity futures markets. All of those sales take place outside of California and affect only the denominator of the sales factor. Any increase in the denominator of the sales factor decreases the percentage of General Mills's business income that is taxable in California. That is, it reduces General Mills's California taxes.
 "For tax years beginning before January 1, 2011, the UDITPA defines 'sales' as 'all gross receipts of the taxpayer' not allocated as nonbusiness income. (§ 25120, subd. (e).)[*fn4 ] General Mills argues that the full sales price of each of its futures sales contracts (i.e., the number of bushels sold under the contract multiplied by the price per bushel in the contract) should be counted as gross receipts for purposes of calculating the sales factor, regardless of whether the contract results in actual physical delivery of the commodity, is offset before delivery, or is used to offset an open futures purchase contract. (We describe 'offset' below.) The Franchise Tax Board maintains that no amount from these futures sales contracts should be counted as gross receipts in the sales factor. [¶] . . . [¶]
 "General Mills is engaged in the principal trade of manufacturing and marketing branded, finished consumer food products. It also sells raw grain and grain products to third parties.
 "The company engages in futures trading as a hedger. As we will explain, the process of hedging protects it against the risk of fluctuations in the price of agricultural commodities General Mills uses in its business. To understand General Mills's hedging transactions, we define several concepts involved in the hedging process. A futures contract is 'an agreement to purchase or sell a commodity for delivery in the future: (1) at a price that is determined at initiation of the contract; (2) that obligates each party to the contract to fulfill the contract at the specified price; (3) that is used to assume or shift price risk; and (4) that may be satisfied by delivery or offset.' ' "Offset" means liquidating a purchase of futures contracts through the sale of an equal number of contracts of the same delivery month, or liquidating a short sale of futures through the purchase of an equal number of [purchase] contracts of the same delivery month.'
 " ' "Hedging" means (1) taking a position in the futures market opposite to a position held in the cash market to minimize the risk of financial loss from an adverse price change'; or (2) purchasing or selling commodities on the futures market as a temporary substitute for a cash transaction that will occur later. The purpose of hedging is to smooth out price fluctuations so General Mills can operate despite the price volatility in the agricultural commodities it uses to manufacture its consumer products. If General Mills did not hedge the price of grain, it would encounter severe fluctuations in its costs of goods. In such instances, General Mills would have to choose between selling at a loss or not selling at all, particularly for products such as flour where the cost of grain is about 85 percent of the selling price. Although General Mills may not make any profit on its futures trades, and may in fact experience a net loss, it would not be able to achieve its current profit margins on its ultimate product (e.g., flour and cereal) sales without the price protection of hedging. General Mills's hedging activities contributed to its business income for each of the tax years in issue.
 "In 97 percent of its futures transactions, General Mills offsets the original futures contract rather than letting the contract result in actual delivery of the commodity, and it obtains almost all of the commodities it needs for manufacturing on the cash market. All of General Mills's futures trades are triggered by planned or actual purchases or sales of commodities in the cash market. . . . [¶] . . . [¶]
 "Between 2000 and 2003, General Mills amended its California tax returns for the tax years in issue[*fn5 ] and claimed tax refunds. In recalculating its tax obligation, General Mills included the full sales price (i.e., the number of bushels of the commodity multiplied by the price per bushel in the contract) of all of its futures sales contracts in the denominator of the sales factor pursuant to section 25128, subdivision (a). The increase in the sales factor denominators changed the apportionment formulas from about 10.9 percent to 10.5 percent for TYE 1992, from 11.2 percent to 10.8 percent for TYE 1993, from 11 percent to 10.3 percent for TYE 1994, from 10.4 percent to 9.5 percent for TYE 1995, from 10.8 percent to 9.3 percent for TYE 1996, and from 10.2 percent to 8.9 percent for TYE 1997. Under these reduced apportionment percentages, General Mills would be entitled to a total refund of $2,657,973.[*fn6 ] [¶] . . . [¶]
 "In early 2005, the Franchise Tax Board denied the refund claims, refusing to include any receipts from General Mills's futures sales contracts in the sales factor denominator. On March 29, 2005, General Mills filed a complaint for a refund pursuant to section 19382. The parties agreed on a joint stipulation of facts and various witnesses testified at a court trial.
 "The trial court concluded that General Mills's receipts from futures trading should not be included in the sales factor at all . . . . Although the court did not reach the section 25137 issue, it cited evidence demonstrating 'that great potential exists for a finding of distortion under' the statute. General Mills's claims for tax refunds were denied." (General Mills I, supra, 172 Cal.App.4th at pp. 1538-1542, some fns. omitted.)
 A. Our Holding in General Mills I
 In General Mills I, we explained that the "UDITPA defines ' "sales" ' as 'all gross receipts of the taxpayer not allocated [as nonbusiness income].' (§ 25120, subd. (e).) A regulation interpreting section 25120, subdivision (e) reads, '[T]he term "sales" means all gross receipts derived by the taxpayer from transactions and activity in the regular course of such trade or business.' (Cal. Code Regs., tit. 18, § 25134, subd. (a)(1).)." (General Mills I, supra, 172 Cal.App.4th at p. 1543, fn. omitted.) We concluded that "the full sales price (number of bushels times price per bushel) of all of General Mills's futures sales contracts should be counted as gross receipts in the UDITPA sales factor." (Id. at p. 1544.) We based this conclusion on the fact that "a future sales contract is a legally binding obligation to deliver a specified amount of a specified commodity at a specified price in a specified month." (Ibid.) Even when the contract is offset rather than consummated with delivery and payment, the offsetting party receives consideration for the contract in the form of relief from the obligation to consummate the sale. (Id. at pp. 1545-1546.) We rejected the Franchise Tax Board's arguments that such offset transactions were illusory and had no real financial value. (Ibid.)
 We further explained that our conclusion that the full value of future sales were gross receipts within the meaning of the sales factor was consistent with the purpose of the UDITPA sales factor: "The UDITPA sales factor is designed to reflect the taxpayer's 'income-producing activity,' which regulations define as 'transactions and activity directly engaged in by the taxpayer in the regular course of its trade or business for the ultimate purpose of obtaining gains or profit.' (Cal. Code Regs., tit. 18, § 25136, subd. (b);[*fn7 ] see Rev. & Tax Code, §§ 25134-25136.) General Mills's futures sales satisfy this definition. Its employees engage in futures trading (instructing brokers to enter into specified contracts) on a daily basis to hedge its actual or planned purchases of raw commodities that it will either resell for profit or process into flour or consumer food products to be sold for profit. Hedging allows General Mills to stay in business and make a profit despite frequent and significant fluctuations in the prices of the raw commodities. That is, hedging futures sales are made 'for the ultimate purpose of obtaining gains or profit,' even though General Mills does not seek to generate profit on the futures trades alone. As the United States Supreme Court has written, 'it is difficult to imagine a program more closely geared to a company's manufacturing enterprise or more important to its successful operation' than hedging in raw commodities in the futures market. (Corn Products Co. v. Commissioner (1955) 350 U.S. 46, 50.)" (General Mills I, supra, 172 Cal.App.4th at p. 1547, parallel citation omitted.)
 In sum, we held that General Mills's futures sales were gross receipts within the meaning of the UDITPA sales factor. As noted ante, we remanded for the trial court to decide whether imposition of an alternative formula pursuant to section 25137 was warranted because application of the standard apportionment formula would not then " 'fairly represent' " General Mills's business activity within California. (General Mills I, supra, 172 Cal.App.4th at p. 1548.) We wrote, "In Microsoft, the Supreme Court held that an alternative formula could be imposed under section 25137 if the challenged activity both qualitatively differs from the taxpayer's principal business and quantitatively distorts the formula by a substantial amount (in that case 'cutting Microsoft's California income tax nearly in half'). (Microsoft, supra, 39 Cal.4th at pp. 757, 766; Limited Stores, Inc. v. Franchise Tax Bd. (2007) 152 Cal.App.4th 1491, 1497.)" (General Mills I, at p. 1548, parallel citation omitted.)
 B. Trial Court Proceedings on Remand
 On remand, the trial court took additional evidence, including further expert testimony, and required additional briefing by the parties. In November 1, 2010, it issued a 68-page statement of decision (Statement of Decision) that upheld the Franchise Tax Board's use of an alternate formula pursuant to section 25137. The court ruled that the Franchise Tax Board could impose a formula that included only net futures sales gains in the sales factor ("Net Receipts (Gains Only)"; hereafter, Net Gains Alternative). The Statement of Decision became final November 12, 2010, and the court entered judgment in January 2011.
 The standard UDITPA formula "provides a rough but constitutionally sufficient approximation of the income attributable to business activity in each state." (Microsoft, supra, 39 Cal.4th at p. 756.) Section 25137 is a "relief provision" that allows the taxpayer to seek, or the Franchise Tax Board to impose, "an alternate method of calculation to achieve an equitable result." (Microsoft, at p. 757.) Section 25137 provides, "If the allocation and apportionment provisions of this act do not fairly represent the extent of the taxpayer's business activity in this state, . . . the Franchise Tax Board may require, in respect to all or any part of the taxpayer's business activity, if reasonable: [¶] (a) Separate accounting; [¶] (b) The exclusion of any one or more of the factors; [¶] (c) The inclusion of one or more additional factors which will fairly represent the taxpayer's business activity in this state; or [¶] (d) The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income." "As the party invoking section 25137, the [Franchise Tax] Board has the burden of proving by clear and convincing evidence that (1) the approximation provided by the standard formula is not a fair representation, and (2) its proposed alternative is reasonable. [Citations.]" (Microsoft, at p. 765.)
 The limited case law in this area consists primarily of a set of administrative decisions and court opinions focusing on whether including the gross receipts of a multistate or multinational corporation's treasury department misrepresents the extent of the corporation's business activity in California such that section 25137 applies. Microsoft, for example, dealt with tax treatment of income generated by investment of excess operating cash in short-term marketable securities. (Microsoft, supra, 39 Cal.4th at p. 757.) With the exception of a single case involving the treasury department of a financial services firm (Appeal of Merrill, Lynch, Pierce, Fenner & Smith, Inc. (1989) 89 SBE 017 [Cal.Tax Rptr. (CCH) ¶ 401-740] (Merrill Lynch)), all of these cases--hereafter the treasury cases--held that section 25137 applied. (See Microsoft, at p. 771; Limited Stores, Inc. v. Franchise Tax Bd. (2007) 152 Cal.App.4th 1491 (Limited) [treasury department of chain of retail clothing stores]; Appeals of Pacific Telephone & Telegraph ...