CHS INC (Form: 10-K, Received: 11/09/2017 17:18:55)

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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Form 10-K

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þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended	August 31, 2017
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to .

Commission file number: 001-36079

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CHS Inc.

(Exact name of Registrant as specified in its charter)



Minnesota (State or other jurisdiction of incorporation or organization)		41-0251095 (I.R.S. Employer Identification Number)
5500 Cenex Drive
Inver Grove Heights, Minnesota 55077 (Address of principal executive office, including zip code)		(651) 355-6000 (Registrant’s telephone number, including area code)

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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:



8% Cumulative Redeemable Preferred Stock		The NASDAQ Stock Market LLC
Class B Cumulative Redeemable Preferred Stock, Series 1		The NASDAQ Stock Market LLC
Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2		The NASDAQ Stock Market LLC
Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3		The NASDAQ Stock Market LLC
Class B Cumulative Redeemable Preferred Stock, Series 4		The NASDAQ Stock Market LLC
(Title of Class)		(Name of Each Exchange on Which Registered)

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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES o NO þ

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES o NO þ

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 þ NO o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

YES þ NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: þ

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



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

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).

YES o NO þ

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the Registrant’s most recently completed second fiscal quarter:

The Registrant has no voting or non-voting common equity (the Registrant is a member cooperative).

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:

The Registrant has no common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

INDEX



		Page No.
PART I.
Item 1.	Business	1
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	16
Item 2.	Properties	17
Item 3.	Legal Proceedings	18
Item 4.	Mine Safety Disclosures	18

PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
Item 6.	Selected Financial Data	20
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 8.	Financial Statements and Supplementary Data	46
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	46
Item 9A.	Controls and Procedures	46
Item 9B.	Other Information	47

PART III.
Item 10.	Directors, Executive Officers and Corporate Governance	48
Item 11.	Executive Compensation	53
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	77
Item 13.	Certain Relationships and Related Transactions, and Director Independence	78
Item 14.	Principal Accounting Fees and Services	79

PART IV.
Item 15.	Exhibits and Financial Statement Schedules	81
Item 16.	Form 10-K Summary	87
SIGNATURES		88

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PART I.

ITEM 1. BUSINESS

THE COMPANY

CHS Inc. (referred to herein as “CHS,” “we” or “us”) is the nation’s leading integrated agricultural cooperative, providing grain, foods and energy resources to businesses and consumers on a global basis. As a cooperative, we are owned by farmers and ranchers and their member cooperatives (referred to herein as “members”) across the United States. We also have preferred shareholders that own shares of our five series of preferred stock, which are each listed and traded on the NASDAQ Global Select Market. We buy commodities from and provide products and services to individual agricultural producers, local cooperatives and other companies (including our members and other non-member customers), both domestically and internationally. We provide a wide variety of products and services, from initial agricultural inputs such as fuels, farm supplies, crop nutrients and crop protection products, to agricultural outputs that include grains and oilseeds, grain and oilseed processing, renewable fuels and food products. A portion of our operations are conducted through equity investments and joint ventures whose operating results are not fully consolidated with our results; rather, a proportionate share of the income or loss from those equity investments and joint ventures is included as a component in our net income under the equity method of accounting. For the year ended August 31, 2017, our total revenues were $31.9 billion and net income attributable to CHS Inc. was $127.9 million .

We have aligned our segments based on an assessment of how our businesses operate and the products and services they sell. Our Energy segment derives its revenues through refining, wholesaling and retailing of petroleum products. Our Ag segment derives its revenues through the origination and marketing of grain, including: service activities conducted at export terminals; through wholesale sales of crop nutrients; from sales of soybean meal, soybean refined oil and soyflour products; through the production and marketing of renewable fuels; and through retail sales of petroleum and agronomy products, processed sunflowers, feed and farm supplies. Our Ag segment also records equity income from our grain export joint venture and other investments. Our Nitrogen Production segment consists solely of, and came into existence upon, our equity method investment in CF Industries Nitrogen, LLC (“CF Nitrogen”), which was completed in February 2016. The addition of our Nitrogen Production segment did not have any impact on historically reported segment results and balances. Our Foods segment consists solely of our equity method investment in Ventura Foods, LLC (“Ventura Foods”). Prior to August 31, 2016, our equity method investment in Ventura Foods was reported as a component of Corporate and Other and, accordingly, reported segment results and balances prior to that time have been revised to reflect the addition of our Foods segment. We include our other business operations in Corporate and Other because of the nature of their products and services, as well as the relative revenues of those businesses. These businesses primarily include our financing, insurance, hedging and other service activities related to crop production. In addition, our wheat milling operations, which are conducted through non-consolidated joint ventures, are included in Corporate and Other.

Our earnings from cooperative business are allocated to members (and to a limited extent, to non-members with which we have agreed to do business on a patronage basis) based on the volume of business they do with us. We allocate these earnings to our patrons in the form of patronage refunds (which are also called patronage dividends), which may be in cash, patrons’ equities (in the form of capital equity certificates), or both. Patrons' equities may be redeemed over time solely at the discretion of our Board of Directors. Earnings derived from non-members, which are not treated as patronage, are taxed at federal and state statutory corporate rates and are retained by us as unallocated capital reserve. We also receive patronage refunds from the cooperatives in which we are a member, if those cooperatives have earnings to distribute and if we qualify for patronage refunds from them.

Our origins date back to the early 1930s with the founding of our predecessor companies, Cenex, Inc. and Harvest States Cooperatives. CHS Inc. emerged as the result of the merger of those two entities in 1998, and is headquartered in Inver Grove Heights, Minnesota.

Our segment and international sales information in Note 11, Segment Reporting, of notes to consolidated financial statements that are included in this Annual Report on Form 10-K are incorporated by reference into the following segment descriptions.

Our internet address is www.chsinc.com. The information contained on our website is not part of, and is not incorporated in, this Annual Report on Form 10-K or any other report we file with or furnish to the Securities and Exchange Commission ("SEC").

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ENERGY

Overview

We are the nation’s largest cooperative energy company based on revenues and identifiable assets, with operations that include: petroleum refining and pipelines; the supply, marketing and distribution of refined fuels (gasoline, diesel fuel and other energy products); the blending, sale and distribution of lubricants; and the wholesale supply of propane and other natural gas liquids. Our Energy segment processes crude oil into refined petroleum products at our refineries in Laurel, Montana and McPherson, Kansas and sells those products under the Cenex® brand to member cooperatives and other independent retailers through a network of nearly 1,500 sites, the majority of which are convenience stores marketing Cenex® branded fuels. For fiscal 2017, our Energy revenues, after elimination of intersegment revenues, were $ 6.3 billion and were primarily from gasoline and diesel fuel.

Operations

Laurel Refinery. Our Laurel, Montana refinery processes medium and high sulfur crude oil into refined petroleum products that primarily include gasoline, diesel fuel, petroleum coke and asphalt. Our Laurel, Montana refinery sources approximately 93% of its crude oil supply from Canada, with the balance obtained from domestic sources, and we have access to Canadian and northwest Montana crude oil through our wholly-owned Front Range Pipeline, LLC and other common carrier pipelines. Our Laurel, Montana refinery also has access to Wyoming crude oil via common carrier pipelines from the south.

Our Laurel, Montana facility processes approximately 55,000 barrels of crude oil per day to produce refined products that consist of approximately 43% gasoline, 41% diesel fuel and other distillates, 8% asphalt and 7% petroleum coke and other products. Refined fuels produced at our Laurel, Montana refinery are available: via rail cars and via the Yellowstone Pipeline to western Montana terminals and to Spokane, Washington; south via common carrier pipelines to Wyoming terminals and Denver, Colorado; and east via our wholly-owned Cenex Pipeline, LLC to Glendive, Montana and Minot and Fargo, North Dakota.

McPherson Refinery. Our McPherson, Kansas refinery processes approximately 59% low and medium sulfur crude oil and approximately 41% heavy sulfur crude oil into gasoline, diesel fuel and other distillates, propane and other products. The refinery sources its crude oil through its own pipelines as well as common carrier pipelines. The low and medium sulfur crude oil is sourced from Kansas, North Dakota, Oklahoma and Texas, and the heavy sulfur crude oil is sourced from Canada.

Our McPherson, Kansas refinery processes approximately 100,000 barrels of crude oil per day to produce refined products that consist of approximately 55% gasoline, 38% diesel fuel and other distillates and 3% propane and other products. Approximately 22% of the refined fuels are either loaded into trucks at the McPherson, Kansas refinery or shipped via its proprietary products pipeline to our terminal in Council Bluffs, Iowa. The remaining refined fuel products are shipped to other markets via common carrier pipelines.

Our McPherson, Kansas refinery was previously owned and operated by National Cooperative Refinery Association ("NCRA"). On September 1, 2015, we became the sole owner of the McPherson, Kansas refinery upon the final closing under our November 2011 agreement to purchase all of the noncontrolling interests in NCRA, which is now known as CHS McPherson Refinery Inc. ("CHS McPherson"). See Note 17, Acquisitions , of the notes to consolidated financial statements that are included in this Annual Report on Form 10-K for additional information.

Other Energy Operations . We own six propane terminals, four asphalt terminals, seven refined product terminals and three lubricants blending and packaging facilities. We also own and lease a fleet of liquid and pressure trailers and tractors, which are used to transport refined fuels, propane, anhydrous ammonia and other products.

Products and Services

Our Energy segment produces and sells (primarily wholesale) gasoline, diesel fuel, propane, asphalt, lubricants and other related products and also provides transportation services. In addition to selling the products refined at our Laurel, Montana, and McPherson, Kansas refineries, we purchase refined petroleum products from third parties. For fiscal 2017, we obtained approximately 68% of the refined petroleum products we sold from our Laurel, Montana and McPherson, Kansas refineries, and approximately 32% from third parties.

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Sales and Marketing; Customers

We market approximately 80% of our refined fuel products to members, with the balance sold to non-members. Sales are made wholesale to member cooperatives and through a network of independent retailers that operate convenience stores under the Cenex® trade name. We sold approximately 1.6 billion gallons of gasoline and approximately 1.8 billion gallons of diesel fuel in fiscal 2017. We also blend, package and wholesale auto and farm machinery lubricants to both members and non-members. We are one of the nation’s largest propane wholesalers based on revenues. Most of the propane sold in rural areas is for heating and agricultural usage. Annual sales volumes of propane vary greatly depending on weather patterns and crop conditions.

Industry; Competition

The petroleum business is highly cyclical. Demand for crude oil and energy products is driven by the condition of local and worldwide economies, local and regional weather patterns and taxation relative to other energy sources, which can significantly affect the price of refined fuel products. Our Energy segment generally experiences higher volumes and profitability in certain operating areas, such as refined products, in the summer and early fall when gasoline and diesel fuel usage by our agricultural customers is highest and is subject to domestic supply and demand forces. Other energy products, such as propane, may experience higher volumes and profitability during the winter heating and crop drying seasons. More fuel-efficient equipment, reduced crop tillage, depressed prices for crops, weather conditions and government programs which encourage idle acres may all reduce demand for our energy products.

Regulation. Governmental regulations and policies, particularly in the areas of taxation, energy and the environment, have a significant impact on our Energy segment. Our Energy segment’s operations are subject to laws and related regulations and rules designed to protect the environment that are administered by the Environmental Protection Agency (the “EPA”), the Department of Transportation (the “DOT”) and similar government agencies. These laws, regulations and rules govern: the discharge of materials into the environment, air and water; reporting storage of hazardous wastes and other hazardous materials; the transportation, handling and disposal of wastes and other materials; the labeling of pesticides and similar substances; and investigation and remediation of releases of hazardous materials. Failure to comply with these laws, regulations and rules could subject us to administrative penalties, injunctive relief, civil remedies and possible recalls of products. Our hedging transactions and activities are subject to the rules and regulations of the exchanges we use, including the Chicago Mercantile Exchange (the “CME”), as well as the U.S. Commodity Futures Trading Commission (the “CFTC”).

Competition. The petroleum refining and wholesale fuels business is very competitive. Among our competitors are some of the world’s largest integrated petroleum companies, which have their own crude oil supplies, distribution and marketing systems. We also compete with smaller domestic refiners and marketers in the midwestern and northwestern United States, with foreign refiners who import products into the United States and with producers and marketers in other industries supplying other forms of energy and fuels to consumers. Given the commodity nature of the end products, profitability in the industry depends largely on margins, as well as operating efficiency, product mix and costs of product distribution and transportation. The retail gasoline market is highly competitive, with competitors that are much larger than us and that have greater brand recognition and distribution outlets throughout the country and the world than we do. Our owned and non-owned retail outlets are located primarily in the northwestern, midwestern and southern United States.

We market refined fuel products in five principal geographic areas. The first area includes the Midwest and northern plains. Competition at the wholesale level in this area includes major oil companies as well as independent refiners and wholesale brokers/suppliers. This area has a robust spot market and is influenced by the large refinery center along the gulf coast.

To the east of the Midwest and northern plains is another unique marketing area. This area centers near Chicago, Illinois and includes eastern Wisconsin, Illinois and Indiana. In this area, we principally compete with the major oil companies as well as independent refineries and wholesale brokers/suppliers.

Another market area is located south of Chicago, Illinois. Most of this area includes Arkansas, Missouri and the northern part of Texas. Competition in this area includes the major oil companies and independent refiners. This area is principally supplied from the Gulf Coast refinery center and is also driven by a strong spot market that reacts quickly to changes in the international and national supply balance.

Another geographic area includes Montana, western North Dakota, Wyoming, Utah, Idaho, Colorado and western South Dakota. Competition at the wholesale level in this area includes the major oil companies and independent refineries.

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The last area includes much of Washington and Oregon. We compete with the major oil companies in this area. This area is known for volatile prices and an active spot market.

Overview

Our Ag segment includes our grain marketing, country operations, crop nutrients, processing and food ingredients and renewable fuels businesses. These businesses work together to facilitate the production, purchase, sale and eventual use of grain and other agricultural products within the United States, as well as internationally. In fiscal 2017, revenues in our Ag segment were $25.6 billion after elimination of intersegment revenues, consisting principally of grain sales.

Operations

Grain Marketing. We are the nation’s largest cooperative marketer of grain and oilseed based on grain storage capacity and grain sales. Our grain marketing operations purchase grain directly from agricultural producers and elevator operators primarily in the midwestern and western United States and indirectly through our country operations business. The purchased grain is typically contracted for sale for future delivery at a specified location, and we are responsible for handling the grain and arranging for its transportation to that location. We own and operate export terminals, river terminals and elevators throughout the United States to handle and transport grain and grain products. We also maintain locations in Europe, the Middle East, the Pacific Rim and South America for the marketing, merchandising and sourcing of grains. We primarily conduct our grain marketing operations directly, but do conduct some of our operations through joint ventures, including TEMCO, LLC ("TEMCO"), a 50% joint venture with Cargill, Incorporated ("Cargill") focused on exports.

Country Operations. Our country operations business operates 482 agri-operations locations through 48 business units dispersed throughout the midwestern and western United States and Canada. Most of these locations purchase grain from farmers and sell agronomy, energy, feed and seed products to those same producers and others, although not all locations provide every product and service. We also manufacture animal feed through eight owned plants and four limited liability companies and process sunflowers for human food and other uses.

Crop Nutrients. Our wholesale crop nutrients business delivers products directly to our customers and our country operations business from the manufacturer or through our twenty-one inland and river warehouse terminals and other non-owned storage facilities located throughout the United States. To supplement what is purchased domestically, our Galveston, Texas deep water port and terminal receives fertilizer by vessel from origins such as Asia and the Caribbean basin where significant volumes of urea are produced. The fertilizer is then shipped by rail to destinations within crop producing regions of the United States.

Processing and Food Ingredients. Our processing and food ingredients operations are conducted at facilities that can crush approximately 127 million bushels of oilseeds on an annual basis, producing approximately 2.8 million short tons of meal/flour and 1.6 billion pounds of edible oil annually. We also have operations where we further process soyflour for use in the food/snack industry. We purchase our oilseeds from members, other CHS businesses and third parties that have tightly integrated connections with our grain marketing operations and country operations business.

Renewable fuels. Our renewable fuels business produces 260 million gallons of fuel grade ethanol and 700 thousand tons of dried distillers grains with solubles (“DDGS”) annually. We also market over 580 million gallons of ethanol and 4.5 million tons of DDGS annually under marketing agreements for other production plants.

Products and Services

Our Ag segment provides local cooperatives and farmers with the inputs and services they need to produce grain and raise livestock. These include seed, crop nutrients, crop protection products, animal feed, animal health products, refined fuels and propane. We also buy and merchandise grain in both domestic and international markets. With a portion of the grain we purchase we produce renewable fuels, including ethanol and DDGS. We also produce refined oils, meal and soyflour at our processing facilities.

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Sales and Marketing; Customers

Our Ag segment provides products and services to a wide range of customers, primarily in the United States. These customers include member and non-member producers, local cooperatives, elevators, grain dealers, grain processors and crop nutrient retailers. We sell our edible oils and soyflour to food companies. The meal we produce is sold to integrated livestock producers and feed mills. The ethanol and DDGS we produce are sold throughout the United States and into various international locations.

Industry; Competition

Many of the business activities in our Ag segment are highly seasonal and, consequently, the operating results for our Ag segment will typically vary throughout the year. For example, our country operations and crop nutrients businesses generally experience higher volumes and income during the spring planting season and in the fall, which corresponds to harvest. In addition, our Ag segment operations may be adversely affected by relative levels of supply and demand, both domestic and international, commodity price levels and transportation costs and conditions. Supply is affected by weather conditions, disease, insect damage, acreage planted and government regulations and policies. Demand may be affected by foreign governments and their programs, relationships of foreign countries with the United States, the affluence of foreign countries, acts of war, currency exchange fluctuations and substitution of commodities. Demand may also be affected by changes in eating habits, population growth, the level of per capita consumption of some products and the level of renewable fuels production.

Regulation. Our Ag operations are subject to laws and related regulations and rules designed to protect the environment that are administered by the EPA, the DOT and similar government agencies. These laws, regulations and rules govern: the discharge of materials into the environment, air and water; reporting storage of hazardous wastes and other hazardous materials; the transportation, handling and disposal of wastes and other materials; the labeling of pesticides and similar substances; and the investigation and remediation of releases of hazardous materials. In addition, environmental laws impose a liability on owners and operators for investigation and remediation of contaminated property, and a party who sends hazardous materials to those contaminated properties for treatment, storage, disposal or recycling. In some instances, that liability exists regardless of fault. Our grain marketing operations, country operations business, processing and food ingredient operations and renewable fuel operations are also subject to laws and related regulations and rules administered by the United States Department of Agriculture (the ”USDA”), the United States Food and Drug Administration (the “FDA”) and other federal, state, local and foreign governmental agencies that govern the processing, packaging, storage, distribution, advertising, labeling, quality and safety of feed and grain products. Failure to comply with these laws, regulations and rules could subject us to administrative penalties, injunctive relief, civil remedies and possible recalls of products. The hedging transactions and activities of our grain marketing, country operations, processing and food ingredient and renewable fuels businesses are subject to the rules and regulations of the exchanges we use, including the CME, as well as the CFTC.

Competition. In our Ag segment, we have significant competition in the businesses in which we operate based principally on price, services, quality, patronage and alternative products. Our businesses are dependent upon relationships with local cooperatives and private retailers, proximity to the customers and producers and competitive pricing. We compete with other large distributors of agricultural products, as well as other regional or local distributors, local cooperatives, retailers and manufacturers.

NITROGEN PRODUCTION

Overview

Our Nitrogen Production segment consists solely of our 11.4% membership interest (based on product tons) in CF Nitrogen, our strategic venture with CF Industries Holdings, Inc. ("CF Industries"). In February 2016, in connection with our investment in CF Nitrogen, we entered into an 80-year supply agreement with CF Nitrogen that entitles us to purchase up to 1.1 million tons of granular urea and 580,000 tons of urea ammonium nitrate (“UAN”) annually for ratable delivery. We account for our CF Nitrogen investment using the hypothetical liquidation at book value method, and on August 31, 2017 , our investment was approximately $ 2.8 billion .

Our investment in CF Nitrogen positions us and our members for long-term dependable fertilizer supply, supply chain efficiency and production economics. In addition, the ability to source product from CF Nitrogen production facilities under our supply agreement benefits our members and customers through strategically positioned access to essential fertilizer products.

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Operations

CF Nitrogen has four production facilities located in: Donaldsonville, Louisiana; Port Neal, Iowa; Yazoo City, Mississippi; and Woodward, Oklahoma. Natural gas is the principal raw material and primary fuel source used in the ammonia production process. CF Nitrogen has access to competitively-priced natural gas through a reliable network of pipelines that are connected to major natural gas trading hubs near its production facilities.

Products and Services

CF Nitrogen produces nitrogen-based products including, methanol, UAN and urea and related products.

Sales and Marketing; Customers

CF Nitrogen has three customers including us and two consolidated subsidiaries of CF Industries.

Industry; Competition

Regulation . CF Nitrogen is subject to laws and related regulations and rules designed to protect the environment that are administered by the EPA and similar government agencies. These laws, regulations and rules govern: the discharge of materials into the environment, air and water; reporting storage of hazardous wastes and other hazardous materials; the handling and disposal of wastes and other materials; and the investigation and remediation of releases of hazardous materials. In addition, environmental laws impose a liability on owners and operators for investigation and remediation of contaminated property, and a party who sends hazardous materials to those contaminated properties for treatment, storage, disposal or recycling. In some instances, that liability exists regardless of fault.

Competition . CF Nitrogen competes primarily on delivered price and, to a lesser extent, on customer service and product quality. CF Nitrogen competes domestically with a variety of large companies in the fertilizer industry. There is also significant competition from products sourced from other regions of the world.

FOODS

Overview

Our Foods segment consists solely of our equity method investment in Ventura Foods, which produces vegetable oil-based products such as packaged frying oils, margarine, mayonnaise, salad dressings and other food products. Ventura Foods was formed in 1996, and is owned 50% by us and 50% by Wilsey Foods, Inc., a majority-owned subsidiary of MBK USA Holdings, Inc. We account for our Ventura Foods investment under the equity method of accounting, and on August 31, 2017 , our investment was $ 347.0 million .

Operations

Ventura Foods currently has 16 manufacturing and distribution locations across the United States and Canada. Ventura Foods sources its raw materials, which consist primarily of soybean oil, canola oil, palm/coconut oil, peanut oil and other ingredients and supplies, from various national and overseas suppliers, including our oilseed processing operations.

Products and Services

Ventura Foods manufactures, packages and distributes frying oils, margarine, mayonnaise, salad dressings, sauces and other food products, many of which utilize soybean oil as a primary ingredient. Approximately 35% of Ventura Foods’ sales comes from products for which Ventura Foods owns the brand, and the remainder comes from non-branded items and products it produces for third parties. A variety of Ventura Foods’ product formulations and processes are proprietary to Ventura Foods or its customers.

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Sales and Marketing; Customers

Ventura Foods sells the products it manufactures to foodservice distribution companies, large national foodservice operators and food manufacturers. Ventura Foods also manufactures a number of products for third parties as a contract manufacturer. Ventura Foods sales are approximately 60% in foodservice and the remainder is split between retail and industrial customers who use edible oils as ingredients in products they manufacture for resale.

Industry; Competition

Regulation . Ventura Foods is subject to laws and related regulations and rules designed to protect the environment that are administered by the EPA, the DOT and similar government agencies. These laws, regulations and rules govern: the discharge of materials into the environment, air and water; reporting storage of hazardous wastes and other hazardous materials; the transportation, handling and disposal of wastes and other materials; and the investigation and remediation of releases of hazardous materials. In addition, environmental laws impose a liability on owners and operators for investigation and remediation of contaminated property, and a party who sends hazardous materials to those contaminated properties for treatment, storage, disposal or recycling. In some instances, that liability exists regardless of fault. Ventura Foods is also subject to laws and related regulations and rules administered by the USDA, the FDA and other federal, state, local and foreign governmental agencies that govern the processing, packaging, storage, distribution, advertising, labeling, quality and safety of food products. Failure to comply with these laws, regulations and rules could subject Ventura Foods to administrative penalties, injunctive relief, civil remedies and possible recalls of products.

Competition . Ventura Foods competes with a variety of companies in the food manufacturing industry. Competitors in the frying oils segment of the business include multi-national oilseed processing companies as well as smaller oil packaging firms. Ventura Foods also competes with large consumer packaged goods companies and smaller regional manufacturers that produce dressings, sauces, margarine and mayonnaise for the foodservice, retail and industrial sectors. Competitive dynamics vary by product category. In commodity categories such as frying oils, price and service are significant factors in customer decisions. For value added products, such as dressings and sauces, service and culinary capabilities play a larger role in securing new business and maintaining customer relationships.

CORPORATE AND OTHER

Business Solutions

CHS Capital . Our wholly-owned finance company subsidiary, CHS Capital, LLC (“CHS Capital”), provides cooperative associations with a variety of loans that meet commercial agriculture needs, including operating, term, revolving and other short and long-term options. It also provides loans to individual producers, including crop inputs, feed, term and margin calls. In addition, CHS Capital provides open account financing to our cooperative association members, through arrangements that involve the discretionary extension of credit in the form of a clearing account for settlement of grain purchases and as a cash management tool. During the third quarter of fiscal 2017 it was determined CHS Capital would no longer make new term loans to producers. Subsequently, we also determined that beginning in fiscal 2018, CHS Capital would no longer make new operating loans to producers, but would continue to make loans to producers to finance crop inputs only.

CHS Hedging . Our wholly-owned commodity brokerage subsidiary, CHS Hedging, LLC (“CHS Hedging”), is a registered Futures Commission Merchant and a clearing member of both the Chicago Board of Trade and the Minneapolis Grain Exchange. CHS Hedging provides full-service commodity risk management services primarily to agricultural producers and commercial agribusinesses in the areas of agriculture and energy.

CHS Insurance . Our wholly-owned subsidiary, CHS Insurance Services, LLC (“CHS Insurance”), is a full-service independent agency that offers property and casualty insurance, surety bonds, safety resources, employment services and group benefits. The customer base consists primarily of participants in the agribusiness, construction, energy and processing industries. Impact Risk Funding, Inc. PCC, a wholly-owned subsidiary of CHS Insurance, is a protected cell captive insurance entity used to provide alternative risk financing options for customers.

Wheat Milling

In January 2002, we formed a joint venture with Cargill named Horizon Milling, LLC (“Horizon Milling”), in which we held an ownership interest of 24%, with Cargill owning the remaining 76%. Horizon Milling was the largest U.S. wheat miller based on output volume, and we owned five mills that we leased to Horizon Milling. During fiscal 2007, we expanded this operation with the formation of Horizon Milling G.P. (24% CHS ownership with Cargill owning the remaining 76%), a

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joint venture that acquired a Canadian grain-based foodservice and industrial business, which included two flour milling operations and two dry baking mixing facilities in Canada.

In fiscal 2014, we formed Ardent Mills, LLC (“Ardent Mills”), the largest flour miller in the United States, as a joint venture with Cargill and ConAgra Foods, Inc., which combined the North American flour milling operations of the three parent companies, including assets from our existing joint venture milling operations Horizon Milling and Horizon Milling, ULC and CHS-owned mills, with CHS holding a 12% interest in Ardent Mills. In connection with the formation of Ardent Mills, the joint-venture parties also entered into various ancillary and non-compete agreements including, among other things, an agreement for us to supply Ardent Mills with certain wheat and durum products. We account for our investment in Ardent Mills as an equity method investment due to our ability to exercise significant influence through our ability to appoint a member of the Board of Shareholders and Board of Managers. On August 31, 2017 , our investment in Ardent Mills was $ 206.5 million .

EMPLOYEES

On August 31, 2017, we had 11,626 full, part-time, temporary and seasonal employees. Of that total, 2,891 were employed in our Energy segment, 8,013 were employed in our Ag segment and 722 were employed in Corporate and Other. In addition to those individuals directly employed by us, many individuals work for joint ventures in which we have a 50% or less ownership interest, including employees of CF Nitrogen and Ventura Foods in our Nitrogen Production and Foods segments, respectively, and are not included in these totals.

Labor Relations

As of August 31, 2017, we had 12 collective bargaining agreements with unions covering approximately 8.5% of our employees in the United States and Canada. These collective bargaining agreements expire on various dates from December 31, 2017, to June 30, 2021, except that one collective bargaining agreement covering 20 pipeline employees renews automatically every September 1, unless 60 days’ notice of termination is given.

CHS AUTHORIZED CAPITAL

We are an agricultural membership cooperative organized under Minnesota cooperative law to do business with member and non-member patrons.

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ITEM 1A. RISK FACTORS

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS

OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Annual Report on Form 10-K contains and our other publicly available documents may contain, and our officers, directors and other representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our businesses, financial condition and results of operations, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are discussed or identified in our public filings made with the U.S. Securities and Exchange Commission, including in this “Risk Factors” discussion. Any forward-looking statements made by us in this Annual Report on Form 10-K are based only on information currently available to us and speak only as of the date on which the statement is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by applicable law.

Reference to this Cautionary Statement in the context of a forward-looking statement shall be deemed to be a statement that any one or more of the following factors may cause actual results to differ materially from those indicated in the forward-looking statement.

The following risk factors are in addition to any other cautionary statements, written or oral, which may be made or referred to in connection with any particular forward-looking statement. The following risk factors should not be construed as exhaustive.

Our revenues, results of operations and cash flows could be materially and adversely affected by changes in commodity prices.

Our revenues, results of operations and cash flows are affected by market prices for commodities such as crude oil, natural gas, ethanol, fertilizer, grain, oilseed, flour and crude and refined vegetable oils. Commodity prices generally are affected by a wide range of factors beyond our control, including weather, disease, insect damage, drought, the availability and adequacy of supply, government regulation and policies and general political and economic conditions. We are also exposed to fluctuating commodity prices as the result of our inventories of commodities, typically grain, fertilizer and petroleum products, and purchase and sale contracts at fixed or partially fixed prices. At any time, our inventory levels and unfulfilled fixed or partially fixed price contract obligations may be substantial. We have processes in place to monitor exposures to these risks and engage in strategies to manage these risks. If these controls and strategies are not successful in mitigating our exposure to these fluctuations, we could be materially and adversely affected. Increases in market prices for commodities that we purchase without a corresponding increase in the price of our products or our sales volume or a decrease in our other operating expenses could reduce our revenues and net income.

For example, in our energy operations, profitability depends largely on the margin between the cost of crude oil that we refine and the selling prices that we obtain for our refined products. The prices for both crude oil and for gasoline, diesel fuel and other refined petroleum products fluctuate widely. Factors influencing these prices, many of which are beyond our control, include:


•	levels of worldwide and domestic supplies;


•	capacities of domestic and foreign refineries;


•	the ability of the members of the Organization of Petroleum Exporting Countries (“OPEC”) to agree to and maintain oil price and production controls, and the price and level of imports;


•	disruption in supply;

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•	political instability or armed conflict in oil-producing regions;


•	the level of demand from consumers, agricultural producers and other customers;


•	the price and availability of alternative fuels;


•	the availability of pipeline capacity; and


•	domestic and foreign governmental regulations and taxes.

The long-term effects of these and other conditions on the prices of crude oil and refined petroleum products are uncertain and ever-changing. Increases in crude oil prices without a corresponding increase in the prices of our refined petroleum products, and decreases in crude oil prices with larger corresponding decreases in the prices of our refined petroleum products, would reduce our net income. Accordingly, we expect our margins on, and the profitability of our energy business to fluctuate, possibly significantly, over time.

Our revenues, results of operations and cash flows could be materially and adversely affected by global and domestic economic conditions, downturns and risks.

The level of demand for our products is affected by global and regional demographics and macroeconomic conditions, including population growth rates and changes in standards of living. A significant downturn in global economic growth or recessionary conditions in major geographic regions may lead to a reduced demand for agricultural commodities, which could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects. Additionally, weak global economic conditions and adverse conditions in financial and capital markets may adversely impact the financial condition and liquidity of some of our customers, suppliers and other counterparties, which could have a material adverse effect on our customers' ability to pay for our products and on our business, financial condition, liquidity, results of operations and prospects.

Our revenues originated outside of the United States were approximately 23% of consolidated net sales in fiscal 2017. As a result, we are exposed to risks associated with having global operations, including currency, economic or political instability in the international markets in which we do business, including Brazil, the southern cone of South America, Europe, the Middle East and the Asia Pacific region.

Also, a significant portion of our business activities are conducted in Canada, Mexico and China. At this time, it is unclear what changes, if any, will be made to existing international trade agreements that are relevant for purposes of our business activities, including the North American Free Trade Agreement. Any U.S. withdrawal from, or material modification to, a relevant international trade agreement could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.

Our revenues, margins, results of operations and cash flows could be materially and adversely affected if our members were to do business with others rather than with us.

We do not have an exclusive relationship with our members and our members are not obligated to supply us with their products or purchase products from us. Our members often have a variety of distribution outlets and product sources available to them. If our members were to sell their products to other purchasers or purchase products from other sellers, our revenues and margins would decline and our results of operations and cash flows could be materially and adversely affected.

We are exposed to the risk of nonperformance and nonpayment by counterparties.

We are exposed to the risk of nonperformance and nonpayment by counterparties, whether pursuant to contracts or otherwise. Risk of nonperformance and nonpayment by counterparties includes the inability or refusal of a counterparty to pay us, the inability or refusal to perform because of a counterparty’s financial condition and liquidity, or for any other reason, and also the risk that the counterparty will refuse to perform a contract during a period of price fluctuations where contract prices are significantly different than the then current market prices. In the event that we experience significant nonperformance or nonpayment by counterparties, our financial condition, results of operations and cash flows could be materially and adversely affected. For example, we store inventory in third-party warehouses, and the operators of these warehouses may not adequately store or secure our inventory, or they may improperly sell that inventory to someone else, which could expose us to a loss of the value of that inventory. In the event that we experience any such nonperformance by a third-party warehouse operator, our financial condition, results of operations and cash flows could be materially and adversely affected.

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We participate in highly competitive business markets and we may not be able to continue to compete successfully, which could have a material adverse effect on us.

We operate in several highly competitive business segments and our competitors may succeed in developing new or enhanced products that are better than ours, may be more successful in marketing and selling their products than we are, or may have more effective supply chain capability than we have. Competitive factors include price, service level, proximity to markets, access to transportation, product quality and marketing. In our business segments, we compete with certain companies that are larger and better known than we are and that have greater marketing, financial, personnel and other resources than we do. As a result, we may not be able to continue to compete successfully with our competitors, which could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.

Our business, profitability and liquidity may be adversely affected by the deterioration in the credit quality of, or defaults by, third parties who owe us money.

We extend credit to, make loans to and engage in other financing arrangements with individual producers, local cooperatives and other third parties around the world. When we do so, we incur credit risk and the risk of losses if our borrowers and others to which we extend credit do not repay their loans or perform their obligations to pay us the money they owe. These parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or for other reasons. If these counterparties do not pay us back, such that we experience significant defaults on their payment obligations to us, our financial condition, results of operations or cash flows could be materially and adversely affected.

We are also subject to the risk that our rights against borrowers and other third parties that owe us money may not be enforceable in all circumstances, for example if a borrower or third party declares bankruptcy. In addition, the credit quality of borrowers and other third parties whose obligations we hold could deteriorate, including a deterioration in the value of collateral posted by those parties to secure their obligations to us pursuant to purchase contracts, loan agreements or other contracts. If that deterioration occurs, the material adverse effects of third parties not performing their repayment obligations may be exacerbated if the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount owed to us. For example, certain loans and other financing arrangements we undertake with agricultural producers are typically secured by the counterparty’s crops that are planted in the current year. There is a risk that the value of the crop will not be sufficient to satisfy the counterparty’s repayment obligations under the financing arrangement as a result of weather, crop growing conditions, other factors that influence the price, supply and demand for agricultural commodities or for other reasons.

In addition, disputes may arise as to the amount of collateral we are entitled to receive and the value of pledged assets. The termination of contracts and the foreclosure on collateral may subject us to claims for the improper exercise of our rights. Default rates, downgrades and disputes with counterparties as to the valuation of collateral increase significantly in times of market stress and illiquidity.

In respect of our lending activity, we evaluate the collectability of both commercial and producer loans on a specific identification basis, based on the amount and quality of the collateral obtained, and record specific loan loss reserves when appropriate. Consistent with accounting principles generally accepted in the United States ("U.S. GAAP"), a general reserve is also maintained based on historical loss experience and various qualitative factors. For other forms of credit, we establish reserves as appropriate and consistent with U.S. GAAP. The reserves represent our best estimate based upon current facts and circumstances. Future developments or changes in assumptions may cause us to record adjustments to the reserves which could materially and adversely affect our results of operations.

Changes in federal income tax laws or in our tax status could increase our tax liability and reduce our net income significantly.

At this time, it is unclear what changes, if any, will be made to current federal income tax laws, regulations and interpretations regarding the taxation of cooperatives, which allow us to exclude income generated through business with or for a member (patronage income) from our taxable income. If any changes are made to such federal income tax laws, regulations or interpretations, or if in the future we were not eligible to be taxed as a cooperative, our tax liability would significantly increase and our net income would significantly decrease.

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We incur significant costs in complying with applicable laws and regulations. Any failure to comply with these laws and regulations, or make the capital or other investments necessary to comply with these laws and regulations, could expose us to unanticipated expenditures and liabilities.

We are subject to numerous federal, state and local provisions regulating our business and operations. We incur and expect to incur significant capital and operating expenses to comply with these laws and regulations. We may be unable to pass on those expenses to customers without experiencing volume and margin losses. For example, the compliance burden and impact on our operations and profitability as a result of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and related regulations continue to evolve, as federal agencies have implemented and continue to implement its many provisions through regulation. These efforts to change the regulation of financial markets subject users of derivatives, such as CHS, to extensive oversight and regulation by the CFTC. Such initiatives have imposed, and may continue to impose, additional costs on us, including operating and compliance costs, and could materially affect the availability, as well as the cost and terms, of certain transactions. Certain federal regulations, studies and reports addressing Dodd-Frank, including the regulation of swaps and derivatives, are still being implemented and others are being finalized. We will continue to monitor these developments. Any of these matters could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.

We establish reserves for the future cost of known compliance obligations, such as remediation of identified environmental issues. However, these reserves may prove inadequate to meet our actual liability. Moreover, amended, new or more stringent requirements, stricter interpretations of existing requirements or the future discovery of currently unknown compliance issues may require us to make material expenditures or subject us to liabilities that we currently do not anticipate. Furthermore, our failure to comply with applicable laws and regulations could subject us to administrative penalties and injunctive relief, civil remedies, including fines and injunctions, and recalls of our products. For example, we regularly maintain hedges to manage the price risks associated with our commercial operations. These transactions typically take place on exchanges such as the CME. Our hedging transactions and activities are subject to the rules and regulations of the exchanges we use, including the CME, as well as the CFTC. All exchanges have broad powers to review required records, investigate and enforce compliance and to punish noncompliance by entities subject to their jurisdiction. The failure to comply with such rules and regulations could lead to restrictions on our trading activities or subject us to enforcement action by the CFTC or a disciplinary action by the exchanges, which could lead to substantial sanctions. In addition, any investigation or proceeding by an exchange or the CFTC, whether successful or unsuccessful, could result in substantial costs, the diversion of resources, including management time, and potential harm to our reputation, all of which, could have a material adverse effect on our business financial condition, liquidity, results of operations and prospects.

We are subject to the Foreign Corrupt Practices Act of 1977 and other similar anti-corruption, anti-bribery and anti-kickback laws and regulations, and any noncompliance with those laws and regulations by us or others acting on our behalf could have a material adverse effect on our business, financial condition and results of operations.

We operate on a global basis and are subject to anti-corruption, anti-bribery and anti-kickback laws and regulations, including the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”). The FCPA and other similar anti-corruption, anti-bribery and anti-kickback laws and regulations in other jurisdictions generally prohibit companies and their intermediaries or agents from making improper payments to government officials or any other persons for the purpose of obtaining or retaining business. We operate and sell our products in many parts of the world that have experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-corruption, anti-bribery and anti-kickback laws and regulations may conflict with local customs and practices. In addition, in certain countries, we engage third-party agents or intermediaries to act on our behalf. If these third parties violate applicable anti-corruption, anti-bribery or anti-kickback laws or regulations, we may be liable for those violations. We have policies in place prohibiting employees from making or authorizing improper payments, we train our employees regarding compliance with anti-corruption, anti-bribery and anti-kickback laws and regulations and we utilize procedures to identify and mitigate risks of such misconduct by our employees and third-party agents and intermediaries. However, we cannot provide assurances that our employees or third-party agents or intermediaries will comply with those policies, laws and regulations. If we are found liable for violations of the FCPA, or other similar anti-corruption, anti-bribery or anti-kickback laws or regulations, either due to our own acts or out of inadvertence, or due to the acts or inadvertence of others, we could suffer criminal or civil fines or penalties or other repercussions, including reputational harm, which could have a material adverse effect on our business, financial condition and results of operations.

Environmental and energy laws and regulations may result in increased operating costs and capital expenditures and may have a material and adverse effect on us.

New and current environmental and energy laws and regulations, including regulations relating to alternative energy sources and the risk of global climate change, new interpretations of existing environmental and energy laws and regulations,

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increased governmental enforcement of environmental and energy laws and regulations or other developments in these areas could require us to make additional unforeseen expenditures or to make unforeseen changes to our operations, either of which could adversely affect us. For example, it is possible that some form of regulation will be forthcoming at the federal level in the United States with respect to emissions of greenhouse gases (“GHGs”), such as carbon dioxide, methane and nitrous oxides. New federal legislation or regulatory programs that restrict emissions of GHGs, or comparable new state legislation or programs, or customer requirements, in areas where we or our customers conduct business could adversely affect our operations and the demand for our energy products, which could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects. In addition, new legislation or regulatory programs could require substantial expenditures for the installation and operation of systems and equipment that we do not currently possess or for substantial modifications to existing equipment. The actual effects of climate change on our businesses are, however, unknown and indeterminable at this time.

Also, pursuant to the Energy Independence and Security Act of 2007, the EPA has promulgated the Renewable Fuel Standard (“RFS”), which requires refiners to blend renewable fuels, such as ethanol and biodiesel, with their petroleum fuels or purchase renewable energy credits, known as RINs, in lieu of blending. The EPA generally establishes new annual renewable fuel percentage standards for each compliance year in the preceding year. We generate RINs in our marketing operations under the RFS, however it is not enough to meet the needs of our refining capacity and RINs must be purchased on the open market. In recent years the price of RINs has been extremely volatile. As a result, the purchase of RINs could have a negative impact on our future refined fuels margins, the impact of which we are not able to estimate at this time.

Environmental liabilities could have a material adverse effect on us.

Many of our current and former facilities have been in operation for many years and, over that time, we and other operators of those facilities have generated, used, stored and disposed of substances or wastes that are or might be considered hazardous under applicable environmental laws, including liquid fertilizers, chemicals and fuels stored in underground and above-ground tanks. Any past or future actions in violation of applicable environmental laws could subject us to administrative penalties, fines, other costs, such as capital expenditures, and injunctions. In addition, an owner or operator of contaminated property, and a party who sends hazardous materials to such site for treatment, storage, disposal or recycling, can be liable for the cost of investigation and remediation under environmental laws. In some instances, such liability exists regardless of fault. Moreover, future or unknown past releases of hazardous substances could subject us to private lawsuits claiming damages, including for bodily injury or property damage, and to adverse publicity, which could have a material adverse effect on us. Liabilities, including legal costs, related to remediation of contaminated properties are not recognized by us until the related costs are considered probable and can be reasonably estimated.

Actual or perceived quality, safety or health risks associated with our products could subject us to significant liability and damage our business and reputation.

If any of our food or animal feed products became adulterated or misbranded, we may need to recall those items and could experience product liability claims if consumers or customers’ livestock were injured, or were claimed to be injured, as a result. A widespread product recall or a significant product liability judgment could cause our products to be unavailable for a period of time or could cause a loss of consumer or customer confidence in our products. Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or injury could adversely affect our business and reputation with existing and potential consumers and customers and our corporate and brand image. Moreover, claims or liabilities of this sort might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others. In addition, general public perceptions regarding the quality, safety or health risks associated with particular food or animal feed products, such as concerns regarding genetically modified crops, could reduce demand and prices for some of the products associated with our businesses. To the extent that consumer preferences evolve away from products that our members or we produce for health or other reasons, such as the growing demand for organic food products, and we are unable to develop or procure products that satisfy new consumer preferences, there will be a decreased demand for our products, which could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.

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Our financial results are susceptible to seasonality.

Many of our business activities are highly seasonal and operating results vary throughout the year. Our revenue and income are generally lowest during the second and fourth fiscal quarters and highest during the first and third fiscal quarters. For example, in our Ag segment, our crop nutrients and country operations businesses generally experience higher volumes and income during the spring planting season and during the fall harvest season. Our grain marketing operations are also subject to fluctuations in volume and income based on producer harvests, world grain prices and demand. Our Energy segment generally experiences higher volumes and income in certain operating areas, such as refined products, in the summer and early fall when gasoline and diesel fuel usage by our customers and members is highest and is subject to global supply and demand forces. Other energy products, such as propane, may experience higher volumes and income during the winter heating and crop drying seasons.

Our operations are subject to business interruptions and casualty losses; we do not insure against all potential losses and could be seriously harmed by unanticipated liabilities.

Our operations are subject to business interruptions due to unanticipated events such as explosions, fires, pipeline interruptions, transportation delays, equipment failures, crude oil or refined product spills, inclement weather and labor disputes. For example:


•	our oil refineries and other facilities are potential targets for terrorist attacks that could halt or discontinue production;


•	our inability to negotiate acceptable contracts with unionized workers in our operations could result in strikes or work stoppages;


•	our corporate headquarters, the facilities we own or the significant inventories that we carry could be damaged or destroyed by catastrophic events, extreme weather conditions or contamination;


•	someone may accidentally or intentionally introduce a computer virus to our information technology systems or breach our computer systems or other cyber resources; and


•	an occurrence of a pandemic flu or other disease affecting a substantial part of our workforce or our customers could cause an interruption in our business operations.

The effects of any of these events could be significant. We maintain insurance coverage against many, but not all potential losses or liabilities arising from these operating hazards, but uninsured losses or losses above our coverage limits are possible. Uninsured losses and liabilities arising from operating hazards could have a material adverse effect on us.

Our risk management strategies may not be effective.

Our business is affected by fluctuations in commodity prices, transportation costs, energy prices, foreign currency exchange rates and interest rates. We monitor position limits and account receivables exposures, and engage in other strategies and controls to manage these risks. Our monitoring efforts may not be successful at detecting a significant risk exposure and our controls and strategies may not be effective in adequately managing against the occurrence of a loss relating to a risk exposure. If our controls and strategies are not successful in mitigating our financial exposure to losses due to the fluctuations mentioned above, it could significantly and adversely affect our operating results.

Our business is capital-intensive in nature and we rely on cash generated from our operations and external financing to fund our strategies and ongoing capital needs.

We require significant capital, including access to credit markets from time to time, to operate our business and fund our strategies. Our working capital requirements are directly affected by the price of commodities, which may fluctuate significantly and change quickly. We also require substantial capital to maintain and upgrade our extensive network of facilities to keep pace with competitive developments, technological advances, regulations and changing safety standards. In addition, the expansion of our business and pursuit of acquisitions or other business opportunities has required, and may require, significant amounts of capital. If we are unable to generate sufficient cash flow or maintain access to adequate external financing, including as a result of significant disruptions in the global credit markets, it could restrict our current operations and our growth opportunities, which could adversely affect our operating results, and restrict our ability to repay our existing indebtedness.

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Our cooperative structure limits our ability to access equity capital.

As a cooperative, we may not sell common stock in our company. In addition, existing laws and our articles of incorporation and bylaws limit dividends on any preferred stock we may issue to 8% per annum. These limitations may restrict our ability to raise equity capital and may adversely affect our ability to compete with enterprises that do not face similar restrictions.

Consolidation among the producers of products we purchase and customers for products we sell could materially and adversely affect our revenues, results of operations and cash flows.

Consolidation has occurred among the individual producers of products we sell and purchase, including crude oil, fertilizer and grain, and it is likely to continue in the future. Consolidation could allow producers to negotiate pricing, supply availability and other contract terms that are less favorable to us. Consolidation also may increase the competition among consumers of these products to enter into supply relationships with a smaller number of producers, resulting in potentially higher prices for the products we purchase.

Consolidation has occurred among cooperative associations that are wholesale customers of our products, which has resulted in a smaller wholesale and retail customer base for our products and has intensified the competition for these customers, and this consolidation is likely to continue in the future. For example, ongoing consolidation among distributors and brokers of food products and food retailers has altered the buying patterns of these businesses, as they have increasingly elected to work with product suppliers who can meet their needs nationwide rather than just regionally or locally. If these cooperatives, distributors, brokers and retailers elect not to purchase our products, our revenues, results of operations and cash flows could be materially and adversely affected.

In addition, in the fertilizer market, consolidation at both the producer and wholesale customer level increases the potential for direct sales from the fertilizer manufacturer to the cooperative customers and/or the individual agricultural producer, which would remove us from the supply chain and could have a material and adverse effect on our revenues, results of operations and cash flows.

If our customers choose alternatives to our refined petroleum products, our revenues, results of operations and cash flows could be materially and adversely affected.

Numerous alternative energy sources currently under development could serve as alternatives to our gasoline, diesel fuel and other refined petroleum products. If any of these alternative products become more economically viable or preferable to our products for environmental or other reasons, demand for our energy products would decline. Declining demand for our energy products, particularly diesel fuel sold for farming applications, could materially and adversely affect our revenues, results of operations and cash flows.

The results of our agronomy business are highly dependent upon certain factors outside of our control.

Planted acreage, and consequently the volume of fertilizer and crop protection products applied, is partially dependent upon government programs, grain prices and the perception held by the producer of demand for production, all of which are outside of our control. In addition, weather conditions during the spring planting season and early summer spraying season also affect agronomy product volumes and profitability. Emerging sustainability and other environmental concerns that are outside of our control could also affect the future demand for agronomy products applied to crops and the volume of any such application. Accordingly, factors outside of our control could materially and adversely affect the revenues, results of operations and cash flows of our agronomy business.

Technological improvements could decrease the demand for our agronomy and energy products.

Technological advances in agriculture could decrease the demand for crop nutrients, energy and other crop input products and services that we provide. Genetically engineered seeds that resist disease and insects, or that meet certain nutritional requirements, could affect the demand for our crop nutrients and crop protection products. Demand for fuel that we sell could decline as technology allows for more efficient usage of equipment. Declining demand for our products could materially and adversely affect our revenues, results of operations and cash flows.

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Acquisitions, strategic alliances, joint ventures, divestitures and other non-ordinary course of business events resulting from portfolio management actions and other evolving business strategies could affect future results.

We monitor our business portfolio and organizational structure and have made and may continue to make acquisitions, strategic alliances, joint ventures, divestitures and changes to our organizational structure. With respect to acquisitions, future results will be affected by our ability to identify suitable acquisition candidates, to adequately finance any acquisitions and to integrate acquired businesses quickly and obtain the anticipated financial returns, including synergies. Our ability to successfully complete a divestiture will depend on, among other things, our ability to identify buyers that are prepared to acquire such assets or businesses on acceptable terms and to adjust and optimize our retained businesses following the divestiture. Additionally, we may fail to consummate proposed acquisitions, divestitures, joint ventures or strategic alliances after incurring expenses and devoting substantial resources, including management time, to such transactions.

Several parts of our business, including in particular our nitrogen production business, our foods business and portions of our grain marketing and wheat milling operations, are operated through joint ventures with third parties where we do not have majority control of the venture. By operating a business through a joint venture, we have less control over business decisions than we have in our wholly-owned or majority-owned businesses. In particular, we generally cannot act on major business initiatives in our joint ventures without the consent of the other party or parties in those ventures. Investments in joint ventures may, under certain circumstances, involve risks not present when a third party is not involved, including the possibility that co-venturers might become bankrupt or fail to fund their share of required capital contributions, in which case the joint venture may be unable to access needed growth capital (if the co-venturer is solely responsible for capital contributions) or we and any other remaining co-venturers would generally be liable for the joint venture’s liabilities. Co-venturers may have economic, tax or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Our co-venturers may take actions that are not within our control. Joint venture investments may also lead to impasses. Disputes between us and co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our day-to-day business. In addition, we may in certain circumstances be liable for the actions of our co-venturers. Each of these matters could have a material adverse effect on us.

We made certain assumptions and projections regarding the future of the markets served by our joint venture investments which included projected market pricing and demand for their products. These assumptions were an integral part of the economics used to evaluate these joint venture investment opportunities prior to consummation. To the extent that actual market performance varies from our models, our ability to achieve the projected returns on our joint venture investments may be impacted in a material adverse manner.

We utilize information technology systems to support our business. An ongoing multi-year implementation of an enterprise-wide resource planning system, security breaches or other disruptions to our information technology systems or assets could interfere with our operations, compromise security of our customers’ or suppliers’ information and expose us to liability which could adversely impact our business and reputation.

Our operations rely on certain key information technology (“IT”) systems, some of which are dependent upon third-party services, to provide critical connections of data, information and services for internal and external users. Over the next several years, we expect to continue implementing a new enterprise resource planning system (“ERP”), which has and will continue to require significant capital and human resources to deploy. There can be no assurance that the actual costs for the ERP will not exceed our current estimates or that the ERP will not take longer to implement than we currently expect. In addition, potential flaws in implementing the ERP may pose risks to our ability to operate successfully and efficiently. There may be other challenges and risks to our IT systems over time due to any number of causes, such as catastrophic events, power outages, security breaches or cyber-based attacks, and as we upgrade and standardize our ERP system on a worldwide basis. These challenges and risks could result in legal claims or proceedings, liability or penalties, disruption in operations, loss of valuable data and damage to our reputation, all of which could adversely affect our business.

ITEM 1B. UNRESOLVED STAFF COMMENTS

As of the date hereof, there were no unresolved comments from the Securities and Exchange Commission staff regarding our periodic or current reports.

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ITEM 2. PROPERTIES

We own or lease energy, agronomy, grain handling and processing facilities and other real estate throughout the United States and internationally. Below is a summary of these locations.

Energy

Facilities in our Energy segment include the following, all of which are owned except where indicated as leased:



Refineries	Laurel, Montana and McPherson, Kansas
Propane terminals	Biddeford, Maine; Glenwood, Minnesota; Rockville, Minnesota; Hannaford, North Dakota; Ross, North Dakota; Black Creek, Wisconsin; Hixton, Wisconsin
Transportation terminals/repair facilities	12 locations in Iowa, Kansas, Minnesota, Montana, North Dakota, South Dakota, Washington and Wisconsin, two of which are leased
Petroleum and asphalt terminals/storage facilities	11 locations in Montana, North Dakota and Wisconsin
Pipelines:
Cenex Pipeline, LLC	Laurel, Montana to Fargo, North Dakota
Front Range Pipeline, LLC	Canadian border to Laurel, Montana
Jayhawk Pipeline, LLC	Throughout Kansas, with branches in Nebraska, Oklahoma and Texas
Council Bluffs Pipeline	McPherson, Kansas to Council Bluffs, Iowa
Conway Pipeline	McPherson, Kansas to Conway, Kansas
Osage Pipe Line Company, LLC (50% owned by CHS McPherson)	Oklahoma to Kansas
Kaw Pipe Line Company (67% owned by CHS McPherson)	Locations throughout Kansas
Convenience stores/gas stations	69 locations in Idaho, Minnesota, Montana, North Dakota, South Dakota, Washington and Wyoming, 19 of which are leased
Lubricant plants/warehouses	Three locations in Minnesota, Ohio and Texas, one of which is leased

Within our Ag segment, we own or lease the following facilities:

Grain Marketing

We own 17 grain terminals, which are used in our grain marketing operations, in: Pekin, Illinois; Davenport, Iowa; Myrtle Grove, Louisiana; Savage and Winona, Minnesota; Collins, Mississippi; Friona, Texas; Superior, Wisconsin; Argentina; Brazil; Hungary; and Romania. We also own one fertilizer terminal in Argentina. In addition to office space at our corporate headquarters, we have 31 grain marketing offices in: Davenport, Iowa; Winona, Minnesota; Lincoln, Nebraska; Argentina; Brazil; Bulgaria; Canada; China; Hungary; Jordan; Paraguay; Romania; Russia; Serbia; Singapore; South Korea; Spain; Switzerland; Taiwan; Ukraine; and Uruguay. We lease all of these grain marketing offices, other than the grain marketing offices in Davenport, Iowa and Winona, Minnesota, which we own.

Country Operations

In our country operations business, we own agri-operations facilities in 482 communities (of which some of the facilities are on leased land), four sunflower plants and eight feed manufacturing facilities. These operations are located in Colorado, Idaho, Illinois, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Washington, Wisconsin and Canada.

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Crop Nutrients

We own one deep water port in Galveston, Texas and 21 terminals in: Little Rock, Arkansas; Post Falls, Idaho; Peru, Illinois; Muscatine, Iowa; Melbourne and Owensboro, Kentucky; Alexandria, Lake Providence, Lettsworth, Mermentau, Tallulah and Vidalia, Louisiana; St. Paul and Winona (two terminals), Minnesota; Greenville, Mississippi; Grand Forks, North Dakota; Watertown, South Dakota; Memphis, Tennessee; and Friona and Texarkana, Texas. The facilities located in Little Rock, Arkansas, Owensboro, Kentucky and Galveston, Texas are on leased land.

Processing and Food Ingredients

We own oilseed processing facilities and/or textured soy protein production facilities in: Creston, Iowa; Hutchinson, Kansas; Hallock, Fairmont and Mankato, Minnesota; and South Sioux City, Nebraska. In addition, we own a grain storage facility in Joliette, North Dakota.

Renewable Fuels

We own ethanol plants located in Rochelle and Annawan, Illinois.

Corporate and Other

Business Solutions

I n addition to office space at our corporate headquarters, we lease five offices in: Brownsburg and Indianapolis, Indiana; Kansas City, Missouri; Huron, South Dakota; and The Woodlands, Texas. We own approximately 14,000 acres of agricultural land and related improvements in central Michigan.

Corporate Headquarters

We are headquartered in Inver Grove Heights, Minnesota. We own a 33-acre campus consisting of one main building with approximately 320,000 square feet of office space and two smaller buildings with approximately 13,400 and 9,000 square feet of space. We also have offices in Eagan, Minnesota and Washington, D.C., which are leased.

ITEM 3. LEGAL PROCEEDINGS

We are involved as a defendant in various lawsuits, claims and disputes, which are in the normal course of our business. The resolution of any such matters may affect consolidated net income for any fiscal period; however, our management believes any resulting liabilities, individually or in the aggregate, will not have a material effect on our consolidated financial position, results of operations or cash flows during any fiscal year.

Laurel

On May 17, 2016, and October 12, 2016, the Montana Department of Environmental Quality (“MDEQ”) issued violation letters to us, alleging that certain specified air emissions at our Laurel, Montana refinery exceeded amounts allowable under the refinery’s permits and applicable law. On June 1, 2016, and November 3, 2016, we responded to MDEQ and described the actions that we had taken in connection with those allegations. On August 30, 2017, MDEQ sent us a letter requesting that we execute an administrative order on consent, and pay an administrative penalty of $184,550. On September 27, 2017, we sent MDEQ a letter providing additional information and requesting that MDEQ reconsider the alleged violations and reduce the proposed penalty with respect to four of the alleged violations described in the violation letters. We also requested changes to the administrative order on consent to remove references to the Administrative Rules of the State of Montana. We are currently awaiting MDEQ’s response to the September 2017 letter.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

As a cooperative, we do not have any common stock that is traded or otherwise. We have not sold any equity securities during the three years ended August 31, 2017 , that were not registered under the Securities Act of 1933.

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ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth our selected historical consolidated financial information for each of the five periods indicated. This information should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Annual Report on Form 10-K and with our consolidated financial statements and notes thereto included elsewhere in this Annual Report on Form 10-K.

Our consolidated financial statements are prepared in accordance with U.S. GAAP. The selected financial information as of and for the years ended August 31, 2017, 2016, 2015, 2014, and 2013 is derived from our audited consolidated financial statements and related notes. Certain prior period amounts have been revised as follows:


•	For periods prior to fiscal 2015, certain amounts have been revised to include activity and amounts related to capital leases that were previously incorrectly accounted for as operating leases.

•

For all prior periods, Long-term debt, including current maturities, has been revised to reflect the adoption of Accounting Standards Updated ("ASU") No. 2015-03, Interest-Imputation of Interest (Subtopic 35-30): Simplifying the Presentation of Debt Issuance Costs. This ASU requires the presentation of debt issuance costs on the balance sheet as a reduction from the carrying amount of the related debt liability instead of a deferred financing cost.


•	For all prior periods, Marketing, general and administrative amounts have been revised to reflect fiscal 2017 presentation, which breaks out impairment and reserve charges due to the materiality of these charges incurred during fiscal 2017.


•	For all prior periods, Other income (loss), which includes interest income, has been identified separately from Interest expense to conform with fiscal 2017 presentation.

Selected Consolidated Financial Data



	2017			2016			2015			2014			2013
	(Dollars in thousands)
Income Statement Data:
Revenues	$	31,934,751		$	30,347,203		$	34,582,442		$	42,664,033		$	44,479,857
Cost of goods sold	30,985,510			29,387,910			33,091,676			41,011,487			42,701,073
Gross profit	949,241			959,293			1,490,766			1,652,546			1,778,784
Marketing, general and administrative	604,359			601,261			642,309			598,965			553,482
Reserve and impairment charges	456,679			47,836			133,045			3,633			141
Operating earnings (loss)	(111,797		)	310,196			715,412			1,049,948			1,225,161
(Gain) loss on investments	4,569			(9,252		)	(5,239		)	(114,162		)	(182		)
Interest expense	171,239			113,704			70,659			147,240			242,911
Other (income) loss	(95,415		)	(38,357		)	(10,326		)	(6,987		)	(6,212		)
Equity (income) loss from investments	(137,338		)	(175,777		)	(107,850		)	(107,446		)	(97,350		)
Income (loss) before income taxes	(54,852		)	419,878			768,168			1,131,303			1,085,994
Income tax expense (benefit)	(182,075		)	(4,091		)	(12,165		)	48,296			89,666
Net income (loss)	127,223			423,969			780,333			1,083,007			996,328
Net income (loss) attributable to noncontrolling interests	(634		)	(223		)	(712		)	1,572			3,942
Net income (loss) attributable to CHS Inc.	$	127,857		$	424,192		$	781,045		$	1,081,435		$	992,386
Balance Sheet Data (as of August 31):
Working capital	$	181,932		$	414,385		$	2,751,949		$	3,168,512		$	3,084,228
Net property, plant and equipment	5,356,434			5,488,323			5,192,927			4,180,148			3,311,088
Total assets	15,973,756			17,312,135			15,226,125			15,293,506			13,640,928
Long-term debt, including current maturities	2,179,793			2,297,205			1,428,930			1,603,027			1,743,690
Total equities	7,905,825			7,866,250			7,669,411			6,466,844			5,152,747

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition and results of operations, liquidity and certain other factors that may affect our future results. Our MD&A is presented in the following sections:


•	Overview


•	Business Strategy


•	Fiscal 2017 Highlights


•	Fiscal 2018 Priorities


•	Fiscal 2018 Trends


•	Results of Operations


•	Liquidity and Capital Resources


•	Off Balance Sheet Financing Arrangements


•	Contractual Obligations


•	Critical Accounting Estimates


•	New Accounting Pronouncements

Our MD&A should be read in conjunction with the accompanying audited financial statements and notes to those financial statements and the cautionary statement regarding forward-looking statements found in Part I, Item 1A of this Annual Report on Form 10-K.

Overview

CHS Inc. is a diversified company that provides grain, foods and energy resources to businesses and consumers on a global scale. As a cooperative, we are owned by farmers, ranchers and member cooperatives across the United States. We also have preferred shareholders that own our five series of preferred stock, all of which are listed and traded on the NASDAQ Global Select Market. We operate in the following four reportable segments:


•	Energy Segment - produces and provides primarily for the wholesale distribution of petroleum products and transportation of those products.


•	Ag Segment - purchases and further processes or resells grains and oilseeds originated by our country operations business, by our member cooperatives and by third parties and also serves as a wholesaler and retailer of crop inputs.


•	Nitrogen Production Segment - consists solely of our equity method investment in CF Nitrogen and produces and distributes nitrogen fertilizer, a commodity chemical.


•	Foods Segment - consists solely of our equity method investment in Ventura Foods and is a processor and distributor of edible oils used in food preparation and a packager of food products.

In addition, other operating activities, primarily our non-consolidated wheat milling joint venture, as well as our business solutions operations that consist of commodities hedging, insurance and financial services related to crop production, have been aggregated within Corporate and Other.

The consolidated financial statements include the accounts of CHS and all of our wholly-owned and majority-owned subsidiaries and limited liability companies. The effects of all significant intercompany transactions have been eliminated.

Corporate administrative expenses and interest are allocated to each reporting segment, along with Corporate and Other, based on direct usage for services that can be tracked, such as information technology and legal and other factors or considerations relevant to the costs incurred.

Management's Focus . When evaluating our operating performance, management focuses on gross profit and income before income taxes. As a company that operates heavily in commodities, there is significant unpredictability and volatility in pricing and costs. As such, we focus on managing the margin we can receive and the resulting income before income taxes. Management also focuses on ensuring the strength of the balance sheet through the appropriate management of liquidity, working capital, capital deployment, capital resources and overall leverage.

Seasonality . Many of our business activities are highly seasonal and our operating results vary throughout the year. Our revenues and income are generally lowest during the second and fourth fiscal quarters and highest during the first and third

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fiscal quarters. For example, in our Ag segment, our crop nutrients and country operations businesses generally experience higher volumes and income during the spring planting season and in the fall, which corresponds to harvest. Our grain marketing operations are also subject to fluctuations in volume and earnings based on producer harvests, world grain prices and demand. Our Energy segment generally experiences higher volumes and profitability in certain operating areas, such as refined products, in the summer and early fall when gasoline and diesel fuel usage by our agricultural producers is highest and is subject to global supply and demand forces. Other energy products, such as propane, may experience higher volumes and profitability during the winter heating and crop drying seasons. The graphs below depict the seasonality inherent in our business. It should be noted the third quarter of fiscal 2017 was impacted by significant charges that caused income (loss) before income taxes for that period to deviate from historical trends. The nature of these charges is further discussed in the "Reserve and Impairment Charges" area of the Results of Operations section that follows.

Pricing . Our revenues, assets and cash flows can be significantly affected by global market prices for commodities such as petroleum products, natural gas, grains, oilseed products and crop nutrients. Changes in market prices for commodities that we purchase without a corresponding change in the selling prices of those products can affect revenues and operating earnings. Commodity prices are affected by a wide range of factors beyond our control, including the weather, crop damage due to disease or insects, drought, availability/adequacy of supply of the related commodity, government regulations/policies, world events and general political/economic conditions.

Business Strategy

Our business strategy is to help our owners grow by maximizing the return on our assets and rationalizing our various operations to ensure that our core businesses are strategically positioned today and for future growth. Specifically, we are

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improving efficiency and, when necessary, disposing of assets that that are not strategic and/or do not meet our internal measurement expectations. We also continue to focus on maintaining a strong balance sheet and are prepared to optimize our financial results throughout the agriculture and energy economic cycles.

Fiscal 2017 Highlights


•	Solid business fundamentals as we realized volume increases in both our Ag and Energy segments.


•	Margins continued to be challenged compared to historical results; however, we did see improvements in our Ag business.


•	Significant specific losses associated with a single producer loan loss and a key partner in Brazil both had a material impact to earnings.


•	Management completed a full asset portfolio review resulting in impairments and the movement of certain assets to held for sale classification.


•	Began initiative to restore financial flexibility by actively managing expenses, reducing debt balances, and optimizing working capital and our asset portfolio.

Fiscal 2018 Priorities


•	Strengthening our relationships with all key stakeholders including owners, customers, suppliers and employees.


•	Sharpening our operational excellence with a focus on our risk management practices, safety, the implementation of an enterprise resource planning system and leveraging the enterprise through centers of excellence.


•	Continue initiative to restore financial flexibility as discussed above.

Fiscal 2018 Trends

Our business is cyclical and the Ag and Energy industries are currently in an environment characterized by reduced commodity prices, lower margins, reduced liquidity and increased leverage. We are unable to predict how long this current environment will last or how severe it will ultimately be; however, at this time, we do not foresee significant changes to this environment during fiscal 2018. During this period, we expect our revenues, margins and cash flows to continue to be under pressure.

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Results of Operations

Consolidated Statements of Operations



	For the Years Ended August 31
	2017			2016			2015
	(Dollars in thousands)
Revenues	$	31,934,751		$	30,347,203		$	34,582,442
Cost of goods sold	30,985,510			29,387,910			33,091,676
Gross profit	949,241			959,293			1,490,766
Marketing, general and administrative	604,359			601,261			642,309
Reserve and impairment charges	456,679			47,836			133,045
Operating earnings (loss)	(111,797		)	310,196			715,412
(Gain) loss on investments	4,569			(9,252		)	(5,239		)
Interest expense	171,239			113,704			70,659
Other (income) loss	(95,415		)	(38,357		)	(10,326		)
Equity (income) loss from investments	(137,338		)	(175,777		)	(107,850		)
Income (loss) before income taxes	(54,852		)	419,878			768,168
Income tax expense (benefit)	(182,075		)	(4,091		)	(12,165		)
Net income (loss)	127,223			423,969			780,333
Net income (loss) attributable to noncontrolling interests	(634		)	(223		)	(712		)
Net income (loss) attributable to CHS Inc.	$	127,857		$	424,192		$	781,045

The charts below detail fiscal 2017 revenues and income (loss) before income taxes by reportable segment. Our Nitrogen Production and Foods reportable segments represent equity methods investments, and as such record earnings and allocated expenses but not revenue.

* Includes $441.3 million of charges discussed in the "Reserve and Impairment Charges" area of this Results of Operations.

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Income (Loss) Before Income Taxes by Segment

Energy



	For the Years Ended August 31						2017 vs. 2016					2016 vs. 2015
	2017		2016		2015		$ Change			% Change		$ Change			% Change
	(Dollars in thousands)
Income (loss) before income taxes	$	76,872	$	275,443	$	538,131	$	(198,571	)	(72.1	)%	$	(262,688	)	(48.8	)%

The following table and commentary present the primary reasons for the changes in income (loss) before income taxes ("IBIT") for the Energy segment for each of the years ended August 31, 2017 , and 2016 , compared to the prior year:



	2017 vs. 2016			2016 vs. 2015
	(Dollars in millions)
Volume	$	16		$	(40	)
Price	(125		)	(241		)
Other*	(29		)	(3		)
Impairment charges ⁺	(33		)	—
Non-gross profit related activity ⁺	(28		)	21
Total change in Energy IBIT	$	(199	)	$	(263	)

* Other includes retail and non-commodity type activities.

+ See commentary related to these changes in the marketing, general and administrative expenses, reserve and impairment charges, (gain) loss on investments, interest expense, other income (loss) and equity (income) loss from investments sections of this Results of Operations.

Comparison of Energy segment IBIT for the years ended August 31, 2017 , and 2016

The $198.6 million decrease in the Energy segment IBIT for fiscal 2017 reflects the following:


•	Significantly reduced margins within refined fuels, caused by the continued down cycle in the energy industry, driving prices lower, partially offset by increases in propane margins driven by certain manufacturing changes.


•	These decreases were partially offset by higher demand for energy products, which caused volumes to increase (most significantly in refined fuels).


•	A $32.7 million impairment charge associated with the cancellation of a capital project during fiscal 2017.

•

We are subject to the RFS, which requires refiners to blend renewable fuels (e.g., ethanol, biodiesel) into their finished transportation fuels or purchase renewable energy credits, known as Renewable Identification Numbers ("RINs"), in lieu of blending. The EPA generally establishes new annual renewable fuel percentage standards for each compliance year in the preceding year. We generate RINs under the RFS in our renewable fuels operations and through our blending activities at our terminals. however, we cannot generate enough RINs to meet the needs of our refining capacity and RINs must be purchased on the open market. The price of RINs can be volatile. On November 23, 2016, the EPA released the final mandate for year 2017, and as a result the market price for RINs increased in our first fiscal quarter. Subsequent changes in the price of RINs had no material impact on our financial results.

Comparison of Energy segment IBIT for the years ended August 31, 2016 , and 2015

The $262.7 million decrease in the Energy segment IBIT for fiscal 2016 reflects the following:


•	Significantly reduced margins within refined fuels, caused by the down cycle in the energy industry.


•	Reduced demand for energy products that caused volumes to decrease (most significantly in refined fuels).


•	On November 30, 2015, the EPA released the final renewable fuel percentage standards mandate for years 2016 and 2015 resulting in an increase to the price of RINs. This price increase did not have a material impact on our financial results during fiscal 2016 or 2015 as it related to our purchases of RINs.

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	For the Years Ended August 31							2017 vs. 2016					2016 vs. 2015
	2017			2016		2015		$ Change			% Change		$ Change			% Change
	(Dollars in thousands)
Income (loss) before income taxes	$	(230,853	)	$	30,936	$	149,648	$	(261,789	)	(846.2	)%	$	(118,712	)	(79.3	)%

The following table and commentary present the primary reasons for the changes in IBIT for the Ag segment for each of the years ended August 31, 2017 , and 2016 , compared to the prior year:



	2017 vs. 2016			2016 vs. 2015
	(Dollars in millions)
Volume	$	13		$	116
Price	447			(464		)
Other*	(359		)	110
Impairment charges ⁺	(441		)	90
Non-gross profit related activity ⁺	78			29
Total change in Ag IBIT	$	(262	)	$	(119	)

* Other includes retail and non-commodity type activities.

Comparison of Ag segment IBIT for the years ended August 31, 2017 , and 2016

The $261.8 million decrease in Ag segment IBIT for fiscal 2017 reflects the following:

•

Our grain marketing IBIT decreased primarily due to charges of $229.4 million associated with a trading partner in our Brazilian operations entering bankruptcy-like proceedings under Brazilian law. Grain marketing also experienced impairments within certain international investments of $20.2 million due to persistent underperformance, partially offset by higher grain volumes and associated margins.


•	Country operations IBIT decreased primarily due to changes in reserves related to a single producer borrower of $81.0 million along with $30.4 million of long-lived asset impairments, which were significantly offset by higher grain margins and volumes.


•	A decrease in processing and food ingredients IBIT primarily caused by long-lived asset impairment charges of $80.1 million that exceeded the prior year's non-recurring bad debt charge related to a specific customer. Higher margins offset this decrease.


•	Crop nutrients IBIT increased, driven by higher volumes and associated margins.


•	Increased IBIT in renewable fuels marketing and production operations primarily resulting from higher margins.

Comparison of Ag segment IBIT for the years ended August 31, 2016 , and 2015

The $118.7 million decrease in Ag segment IBIT for fiscal 2016 reflects the following:


•	Country operations IBIT decreased, driven primarily by significantly lower grain margins, which were partially offset by increased grain volumes.


•	Crop nutrients IBIT increased, driven primarily by a $116.5 million impairment related to our decision to cease development of a nitrogen fertilizer plant in Spiritwood, North Dakota, which took place in fiscal 2015 and did not reoccur in fiscal 2016, partially offset by decreased margins in fiscal 2016.


•	Our grain marketing IBIT decreased primarily as a result of lower margins, partially offset by increased volumes.


•	Our processing and food ingredients business experienced a decrease in IBIT primarily due to charges associated with the disposal and impairment of assets as well as a charge associated with a specific customer receivable, and to a lesser extent, lower margins in our soybean crushing business.


•	Our renewable fuels marketing and production operations IBIT decreased primarily due to lower market prices for ethanol and was partially offset by increased volumes.


•	The lower margins referenced above result from the previously discussed Ag economy down cycle, which reduced commodity prices and decreased margins across the globe.

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All Other Segments



	For the Years Ended August 31						2017 vs. 2016					2016 vs. 2015
	2017		2016		2015		$ Change			% Change		$ Change			% Change
	(Dollars in thousands)
Nitrogen Production IBIT	$	29,741	$	34,070	$	—	$	(4,329	)	(12.7	)%	$	34,070		NM
Foods IBIT	$	25,967	$	64,764	$	62,647	$	(38,797	)	(59.9	)%	$	2,117		3.4	%
Corporate and Other IBIT	$	43,421	$	14,665	$	17,742	$	28,756		196.1	%	$	(3,077	)	(17.3	)%

NM - Not meaningful

Comparison of All Other Segments IBIT for the years ended August 31, 2017 , and 2016

Our Nitrogen Production segment IBIT decreased overall as a result of lower equity method income caused by downward pressures on the pricing of urea and UAN, which are produced and sold by CF Nitrogen. This was partially offset by a gain of $30.5 million in fiscal 2017 associated with an embedded derivative asset inherent in the agreement relating to our investment in CF Nitrogen for which there was no comparable gain in the prior fiscal year. See Note 4, Investments , of the notes to the consolidated financial statements that are included in this Annual Report on Form 10-K for additional information. Our Foods segment IBIT decreased in fiscal 2017 due to lower margins as customers put pressure on pricing. Corporate and Other IBIT increased primarily due to improved earnings from our wheat milling joint venture.

Comparison of All Other Segments IBIT for the years ended August 31, 2016 , and 2015

Our Nitrogen Production segment was created as a result of our equity method investment in CF Nitrogen, which was consummated February 1, 2016. See Note 4, Investments , of the notes to the consolidated financial statements that are included in this Annual Report on Form 10-K for additional information. As fiscal 2016 represented our initial year of investment, there is no comparable income in the prior year. Our Foods segment and Corporate and Other did not experience a significant change in IBIT in fiscal 2016 when compared to fiscal 2015.

Revenues by Segment

Energy



	For the Years Ended August 31						2017 vs. 2016				2016 vs. 2015
	2017		2016		2015		$ Change		% Change		$ Change			% Change
	(Dollars in thousands)
Revenue	$	6,265,197	$	5,447,542	$	8,210,337	$	817,655	15.0	%	$	(2,762,795	)	(33.7	)%

The following table and commentary present the primary reasons for the changes in revenue for the Energy segment for each of the years ended August 31, 2017 , and 2016 , compared to the prior year:



	2017 vs. 2016		2016 vs. 2015
	(Dollars in millions)
Volume	$	237	$	(596	)
Price	568		(2,142		)
Other*	13		(25		)
Total change in Energy revenue	$	818	$	(2,763	)

* Other includes retail and non-commodity type activities.

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Comparison of Energy segment revenue for the years ended August 31, 2017 , and 2016

The $817.7 million increase in Energy revenue for fiscal 2017 reflects the following:


•	Refined fuels revenues rose $678.3 million (15%), of which approximately $456.0 million related to an increase in the net average selling price and $222.3 million related to higher sales volumes, compared to the prior year. The selling price of refined fuels products increased an average of $0.16 (10%) per gallon, and sales volumes increased 5%, compared to the previous year.


•	Propane revenues increased $109.5 million (22%), of which $100.1 million was attributable to a rise in the net average selling price and $9.4 million was attributable to higher volumes. Propane sales volume increased 2% and the average selling price of propane increased $0.13 (20%) per gallon, when compared to the previous year.

Comparison of Energy segment revenue for the years ended August 31, 2016 , and 2015

The $2.8 billion decrease in Energy revenue for fiscal 2016 reflects the following:


•	Refined fuels revenues decreased $2.5 billion (35%), of which approximately $2.0 billion related to a decline in the net average selling price and $480.1 million related to lower sales volumes, compared to the prior year. The selling price of refined fuels products decreased an average of $0.74 (30%) per gallon and sales volumes decreased 7%, compared to the previous year.


•	Propane revenues decreased $396.4 million (43%), of which $252.2 million was attributable to a lower net average selling price and $144.2 million was attributable to a decline in volumes. Propane sales volume decreased 16% due to warmer temperatures in fiscal 2016 compared to fiscal 2015 and the average selling price of propane decreased $0.34 (32%) per gallon, when compared to the previous year.



	For the Years Ended August 31						2017 vs. 2016				2016 vs. 2015
	2017		2016		2015		$ Change		% Change		$ Change			% Change
	(Dollars in thousands)
Revenue	$	25,578,393	$	24,809,298	$	26,299,947	$	769,095	3.1	%	$	(1,490,649	)	(5.7	)%

The following table and commentary present the primary reasons for the changes in revenue for the Ag segment for each of the years ended August 31, 2017 , and 2016 , compared to the prior year:



	2017 vs. 2016			2016 vs. 2015
	(Dollars in millions)
Volume	$	804		$	4,079
Price	(37		)	(5,541		)
Other*	2			(29		)
Total change in Ag revenue	$	769		$	(1,491	)

* Other includes retail and non-commodity type activities.

Comparison of Ag segment revenue for the years ended August 31, 2017 , and 2016

The $769.1 million increase in Ag segment revenue for fiscal 2017 reflects the following:

•

Grain and oilseed revenues attributable to country operations and grain marketing totaled $18.0 billion and $16.8 billion during the years ended August 31, 2017, and 2016, respectively. The grain and oilseed revenue increase of $1.2 billion (7%) was attributable to $396.4 million in higher average grain selling prices and a rise in volumes of $815.0 million. The average sales price of all grain and oilseed commodities sold reflected an increase of 2%. Wheat, corn and soybean volumes increased by approximately 4% compared to the prior year. The increase in volumes was due to the large U.S. crop production, while the rise in pricing was primarily due to higher spring wheat and soybean prices.


•	Our processing and food ingredients revenue decreased $205.7 million, primarily due to a $181.1 million decline resulting from the prior-year sale of an international location, along with a decline in volumes of $274.7 million (17%). An average sales price increase of $0.70 (5%) related to our oilseed commodities helped to partially offset the decreases by $250.1 million.

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•

Wholesale crop nutrient revenues attributable to crop nutrients and grain marketing decreased $54.3 million due to lower average fertilizer selling prices of $330.7 million, partially offset by higher volumes of $276.4 million. Our wholesale crop nutrient volumes increased 14% and the average sales price of all fertilizers sold reflected a decrease of $44.11 (14%) per ton compared to the prior year. The increase in volumes was due to improved market conditions from the prior year as well as supply chain management improvements.


•	Our renewable fuels revenue from our marketing and production operations decreased $7.2 million primarily as the result of 4% lower volumes, partially offset by a higher average sales price of $0.06 (4%) per gallon. Market supply and demand forces increased average sales prices. The decrease in volumes was due to lower exports.


•	The remaining Ag segment product revenues related primarily to feed and farm supplies decreased $176.9 million mainly due to reduced country operations retail sales and a falloff in plant food and sunflower pricing. The decreases were partially offset by increases in diesel sold as a result of higher grain movement and a rise in propane sold for home heating.

•

Total Ag revenues include "Other" revenues, which are generated from our country operations elevators and agri-service centers that derive revenues from activities related to production agriculture. These revenue generating activities include grain storage, grain cleaning, fertilizer spreading, crop protection spraying and other associated services of this nature. In addition, our grain marketing operations receive "Other" revenues at our export terminals from activities related to loading vessels.

Comparison of Ag segment revenue for the years ended August 31, 2016 , and 2015

The $1.5 billion decrease in Ag segment revenue for fiscal 2016 reflects the following:

•

Grain and oilseed revenues attributable to country operations and grain marketing totaled $16.8 billion and $17.2 billion during the years ended August 31, 2016, and 2015, respectively. The grain and oilseed revenue decrease of $479.2 million (3%) was attributable to $3.4 billion in lower average grain selling prices, partially offset by an increase in volumes of $3.0 billion. The average sales price of all grain and oilseed commodities sold reflected a decrease of 17%.


•	Our processing and food ingredients revenues were essentially flat with higher volumes offsetting lower average selling prices on our oilseed products. Typically, changes in average selling prices of oilseed products are primarily driven by the average market prices of soybeans. The increase in volumes sold is mostly due to the acquisition of a plant late in the fourth quarter of fiscal 2015.


•	Wholesale crop nutrient revenues attributable to crop nutrients and grain marketing decreased due to lower average fertilizer selling prices of $480.2 million and $8.7 million related to lower volumes. Our wholesale crop nutrient volumes decreased less than 1% and the average sales price of all fertilizers sold reflected a decline of $72.86 (19%) per ton.


•	Our renewable fuels revenue from our marketing and production operations decreased primarily as the result of a lower average sales price of $0.21 (12%) per gallon. Market supply and demand forces, as well as the decline in traditional fuel prices, drove prices lower year over year. The impact of lower prices was partially offset by higher volumes.


•	The remaining Ag segment product revenues related primarily to feed and farm supplies decreased mainly due to reduced country operations retail sales and the price of energy-related products.

•

Total Ag revenues include "Other" revenues which are generated from our country operations elevators and agri-service centers that derive revenues from activities related to production agriculture. These revenue generating activities include grain storage, grain cleaning, fertilizer spreading, crop protection spraying and other associated services of this nature. In addition, our grain marketing operations receive "Other" revenues at our export terminals from activities related to loading vessels.

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All Other Segments



	For the Years Ended August 31						2017 vs. 2016				2016 vs. 2015
	2017		2016		2015		$ Change		% Change		$ Change		% Change
	(Dollars in thousands)
Corporate and Other revenue	$	91,161	$	90,363	$	72,158	$	798	0.9	%	$	18,205	25.2	%

Comparison of All Other Segments revenue for the years ended August 31, 2017 , and 2016

There were no significant changes to revenue for all other segments for fiscal 2017 . Our Nitrogen Production and Foods reportable segments represent equity method investments, and as such record earnings and allocated expenses but not revenue. Our Nitrogen Production segment did not exist prior to fiscal 2016.

Comparison of All Other Segments revenue for the years ended August 31, 2016 , and 2015

Corporate and Other revenue for fiscal 2016 increased due to additional interest revenue within business solutions.

Cost of Goods Sold by Segment

Energy



	For the Years Ended August 31						2017 vs. 2016				2016 vs. 2015
	2017		2016		2015		$ Change		% Change		$ Change			% Change
	(Dollars in thousands)
Cost of goods sold	$	5,998,958	$	5,043,676	$	7,522,319	$	955,282	18.9	%	$	(2,478,643	)	(33.0	)%

The following table and commentary present the primary reasons for the changes in cost of goods sold ("COGS") for the Energy segment for each of the years ended August 31, 2017 , and 2016 , compared to the prior year:



	2017 vs. 2016		2016 vs. 2015
	(Dollars in millions)
Volume	$	221	$	(556	)
Price	692		(1,901		)
Other*	42		(22		)
Total change in Energy cost of goods sold	$	955	$	(2,479	)

* Other includes retail and non-commodity type activities.

Comparison of Energy segment COGS for the years ended August 31, 2017 , and 2016

The $1.0 billion increase in Energy segment COGS for fiscal 2017 reflects the following:


•	Refined fuels cost of goods sold increased $806.9 million (20%), which reflects a $0.21 (14%) per gallon rise in the average cost of refined fuels and a 5% volume increase.


•	The increase in propane cost of goods sold of $95.9 million was attributable to a 2% rise in volumes and an increase in average cost of $0.17 (28%) per gallon, these increases were partially offset by certain manufacturing changes that reduced costs of goods sold by $46.0 million.

Comparison of Energy segment COGS for the years ended August 31, 2016 , and 2015

The $2.5 billion decrease in Energy segment COGS for fiscal 2016 reflects the following:


•	Refined fuels cost of goods sold decreased $1.8 billion (30%), which reflects a $0.52 (24%) per gallon reduction in the average cost of refined fuels and a 7% decrease in volumes.


•	The propane cost of goods sold decreased $432.3 million (47%), primarily from an average cost decline of $0.38 (37%) per gallon and a 16% decrease in volumes.

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	For the Years Ended August 31						2017 vs. 2016				2016 vs. 2015
	2017		2016		2015		$ Change		% Change		$ Change			% Change
	(Dollars in thousands)
Cost of goods sold	$	24,982,729	$	24,341,576	$	25,567,530	$	641,153	2.6	%	$	(1,225,954	)	(4.8	)%

The following table and commentary present the primary reasons for the changes in COGS for the Ag segment for each of the years ended August 31, 2017 , and 2016 , compared to the prior year:



	2017 vs. 2016			2016 vs. 2015
	(Dollars in millions)
Volume	$	791		$	3,963
Price	(484		)	(5,077		)
Other*	334			(112		)
Total change in Ag cost of goods sold	$	641		$	(1,226	)

* Other includes retail and non-commodity type activities.

Comparison of Ag segment COGS for the years ended August 31, 2017 , and 2016

The $641.2 million increase in Ag segment COGS for fiscal 2017 reflects the following:

•

Grain and oilseed cost of goods sold attributable to country operations and grain marketing totaled $17.7 billion and $16.6 billion during the years ended August 31, 2017, and 2016, respectively. The costs of grains and oilseed procured through our Ag segment increased $1.1 billion. The majority of the addition was driven by a higher average cost per bushel of $0.89 (2%), which accounted for $299.8 million of the increase and a 5% elevation in volumes of $806.0 million. The average month-end market price per bushel of soybeans and spring wheat increased, while corn decreased slightly compared to the prior year. The increase in volumes was due to a large U.S. crop production.

•

Processing and food ingredients cost of goods sold decreased $205.9 million (13%) and is comprised of a $178.5 million decline due to the sale of an international location in the prior year, plus $268.9 million in lower volumes, partially offset by $268.8 million from a lower average cost of oilseeds purchased for further processing. Changes in cost are typically driven by the market price of soybeans purchased.

•

Wholesale crop nutrients cost of goods sold attributable to crop nutrients and grain marketing decreased by $93.1 million (5%), caused primarily by a decline of 16%, or $366.0 million, in average cost per ton of product. The drop was partially offset by an increase of 14%, or $272.9 million, in tons sold. The increase in volumes and decrease in the prices paid for goods were due to better market conditions compared to the prior year, as well as beneficial changes in supply chain management.


•	Renewable fuels cost of goods sold decreased $9.8 million (less than 1%) resulting from a volume decline of 4%, which was partially offset by an increase in the average cost per gallon of $0.06 (4%).


•	The remaining Ag segment product cost of goods sold, primarily feed and farm supplies, decreased $516.9 million due to a reduction in country operations retail sales and the purchase price of plant food and sunflower.

•

Total Ag cost of goods sold include "Other" cost of goods sold, which are generated from our country operations elevators and agri-service centers that incur costs from activities related to production agriculture. These cost of goods sold activities include grain storage, grain cleaning, fertilizer spreading, crop protection spraying and other associated services of this nature. In addition, our grain marketing operations incur "Other" costs at our export terminals from activities related to loading vessels.

Comparison of Ag segment COGS for the years ended August 31, 2016 , and 2015

The $1.2 billion decrease in Ag segment COGS for fiscal 2016 reflects the following:

•

Grain and oilseed cost of goods sold attributable to country operations and grain marketing totaled $16.6 billion and $16.8 billion during the years ended August 31, 2016 and 2015, respectively. The costs of grains and oilseed procured decreased $269.5 million. The majority of the decrease was driven by a lower average cost per bushel of $0.98 (16%), which accounted for $3.2 billion of the decrease, partially offset by a 17% increase in volumes of $2.9 billion.


•	Processing and food ingredients cost of goods sold increased $36.9 million (2%) and is comprised of $879.2 million in higher volumes, partially offset by $815.0 million from a lower average cost of oilseeds purchased for further processing. Changes in cost are typically driven by the market price of soybeans purchased.

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•	Wholesale crop nutrients cost of goods sold decreased $361.2 million (15%). This is attributable to crop nutrients and grain marketing decreases of 15% in average cost per ton and a decrease in the tons sold of less than 1%.


•	Renewable fuels cost of goods sold decreased $172.5 million (11%) and is comprised of a decline in the average cost per gallon of $0.21 (12%), which was partially offset by an increase in volumes.


•	The remaining Ag segment product cost of goods sold, primarily feed and farm supplies, decreased $321.6 million due to a reduction in country operations retail sales and the purchase price of energy related products.

•

All Other Segments



	For the Years Ended August 31							2017 vs. 2016					2016 vs. 2015
	2017			2016		2015		$ Change			% Change		$ Change			% Change
	(Dollars in thousands)
Nitrogen Production COGS	$	(538	)	$	2,222	$	—	$	(2,760	)	(124.2	)%	$	2,222		NM
Corporate and Other COGS	$	4,361		$	431	$	1,827	$	3,930		911.8	%	$	(1,396	)	(76.4	)%

NM - Not meaningful

Comparison of All Other Segments COGS for the years ended August 31, 2017 , and 2016

There were no significant changes to COGS for our Nitrogen Production segment for fiscal 2017 . The increase in COGS for Corporate and Other for fiscal 2017 was due to increased commission expense as a result of higher volumes of transactions in business solutions.

Comparison of All Other Segments COGS for the years ended August 31, 2016 , and 2015

There were no significant changes to COGS for Corporate and Other for fiscal 2016 . Our Nitrogen Production segment, which has COGS related to our commodity hedges, was not created until February 2016, and therefore there are no COGS for our Nitrogen Production segment during fiscal 2015.

Marketing, General and Administrative Expenses



	For the Years Ended August 31						2017 vs. 2016				2016 vs. 2015
	2017		2016		2015		$ Change		% Change		$ Change			% Change
	(Dollars in thousands)
Marketing, general and administrative expenses	$	604,359	$	601,261	$	642,309	$	3,098	0.5	%	$	(41,048	)	(6.4	)%

Comparison of marketing, general and administrative expenses for the years ended August 31, 2017 , and 2016

The $3.1 million increase in marketing, general and administrative expenses for fiscal 2017 reflects the following:


•	Primarily higher compensation expense, including incentive compensation accruals and separation expenses associated with the departure of our former chief executive officer.


•	The increase was partially offset by decreases in foreign currency exchange expenses and management focus on cost containment.

Comparison of marketing, general and administrative expenses for the years ended August 31, 2016 , and 2015

The $41.0 million decrease in marketing, general and administrative expenses for fiscal 2016 is primarily due to reduced compensation expense, including a significant reduction of incentive compensation accruals.

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Reserve and Impairment Charges



	For the Years Ended August 31						2017 vs. 2016				2016 vs. 2015
	2017		2016		2015		$ Change		% Change		$ Change			% Change
	(Dollars in thousands)
Reserve and impairment charges	$	456,679	$	47,836	$	133,045	$	408,843	854.7	%	$	(85,209	)	(64.0	)%

Comparison of reserve and impairment charges for the years ended August 31, 2017 , and 2016

The $408.8 million increase in reserve and impairment charges for fiscal 2017 reflects the following:


•	A Brazil trading partner in our Ag segment entering into bankruptcy-like proceedings under Brazilian law during fiscal 2017, which resulted in charges of $229.4 million.


•	The loan loss reserve expense in our Ag segment specific to a single producer borrower increased $81.0 million when compared to the prior year.


•	Charges of $110.6 million related to the impairment of long-lived assets and goodwill in our Ag segment during fiscal 2017.


•	An impairment charge in our Energy segment of $32.7 million associated with the cancellation of a capital project during fiscal 2017.


•	These increases were partially offset by decreases in bad debt expense related to other domestic and international areas of the business when compared to fiscal 2016.

Comparison of reserve and impairment charges for the years ended August 31, 2016 , and 2015

Reserve and impairment charges for fiscal 2016 decrease d $85.2 million as a result of:


•	In fiscal 2015 there was a $116.5 million charge related to our decision not to proceed with the development of a nitrogen fertilizer plant in Spiritwood, North Dakota, which did not reoccur in fiscal 2016.


•	The remaining fiscal 2016 charges relate to a net increase in receivables specific reserves related to an international customer and a domestic customer, along with increased costs related to prior year acquisitions included for the full year in fiscal 2016.

Gain (Loss) on Investments



	For the Years Ended August 31							2017 vs. 2016					2016 vs. 2015
	2017			2016		2015		$ Change			% Change		$ Change		% Change
	(Dollars in thousands)
Gain (loss) on investments	$	(4,569	)	$	9,252	$	5,239	$	(13,821	)	(149.4	)%	$	4,013	76.6	%

Comparison of gain (loss) on investments for the years ended August 31, 2017 , and 2016

The decrease in gain (loss) on investments is mainly attributable to the sale of an international investment during fiscal 2017 which resulted in a loss, along with fiscal 2016 gains on bond transactions specific to our international operations that did not reoccur during fiscal 2017.

Comparison of gain (loss) on investments for the years ended August 31, 2016 , and 2015

The increase in gain (loss) on investments is mainly attributable to gains on bond transactions specific to our international operations.

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Interest Expense



	For the Years Ended August 31						2017 vs. 2016				2016 vs. 2015
	2017		2016		2015		$ Change		% Change		$ Change		% Change
	(Dollars in thousands)
Interest expense	$	171,239	$	113,704	$	70,659	$	57,535	50.6	%	$	43,045	60.9	%

Comparison of interest expense for the years ended August 31, 2017 , and 2016

The $57.5 million increase in interest expense for fiscal 2017 was due to higher interest expense of $34.0 million associated with higher debt balances, as well as lower capitalized interest of $23.5 million associated with our ongoing capital projects.

Comparison of interest expense for the years ended August 31, 2016 , and 2015

The $43.0 million increase in interest expense for fiscal 2016 reflects the following:


•	Approximately $50.9 million of the increase was related to interest expense associated with increased debt balances in fiscal 2016 as well as lower capitalized interest of $26.9 million associated with our ongoing capital projects.


•	The above increases were partially offset by $34.8 million associated with a reduction in patronage earned by the noncontrolling interest of NCRA (now known as CHS McPherson).

Other Income (Loss)



	For the Years Ended August 31						2017 vs. 2016				2016 vs. 2015
	2017		2016		2015		$ Change		% Change		$ Change		% Change
	(Dollars in thousands)
Other income (loss)	$	95,415	$	38,357	$	10,326	$	57,058	148.8	%	$	28,031	271.5	%

Comparison of other income (loss) for the years ended August 31, 2017 , and 2016

The $57.1 million increase in other income (loss) for fiscal 2017 reflects the following:


•	Higher financing fees associated with various customer activities and receivables totaling $27.8 million.


•	A gain recorded of $30.5 million associated with an embedded derivative within the contract relating to our strategic investment in CF Nitrogen. See Note 12, Derivative Financial Instruments and Hedging Activities , of the notes to the consolidated financial statements that are included in this Annual Report on Form 10-K for additional information.

Comparison of other income (loss) for the years ended August 31, 2016 , and 2015

The $28.0 million increase in other income (loss) for fiscal 2016 is related to higher financing fees received from various customer activities and receivables.

Equity Income (Loss) from Investments



	For the Years Ended August 31						2017 vs. 2016					2016 vs. 2015
	2017		2016		2015		$ Change			% Change		$ Change		% Change
	(Dollars in thousands)
Equity income (loss) from investments	$	137,338	$	175,777	$	107,850	$	(38,439	)	(21.9	)%	$	67,927	63.0	%

Comparison of equity income (loss) from investments for the years ended August 31, 2017 , and 2016

Equity income (loss) from investments for fiscal 2017 primarily decreased due to lower equity income recognized from our equity method investments in Ventura Foods and CF Nitrogen caused by lower margins, which was partially offset by higher equity income recognized from our equity method investments in TEMCO and Ardent Mills. See Note 4, Investments, of the notes to the consolidated financial statements that are included in this Annual Report on Form 10-K for additional information. We also recorded $20.2 million of impairments related to international investments as a result of continued downward pressures in the agricultural markets. We record equity income or loss from the investments in which we have an

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ownership interest of 50% or less and have significant influence, but not control, for our proportionate share of income or loss reported by the entity, without consolidating the revenues and expenses of the entity in our Consolidated Statements of Operations.

Comparison of equity income (loss) from investments for the years ended August 31, 2016 , and 2015

Equity income (loss) from investments for fiscal 2016 primarily increased as a result of equity earnings recognized from our new equity method investment in CF Nitrogen. See Note 4, Investments, of the notes to the consolidated financial statements that are included in this Annual Report on Form 10-K for additional information.

Income Taxes



	For the Years Ended August 31						2017 vs. 2016			2016 vs. 2015
	2017		2016		2015		$ Change		% Change	$ Change			% Change
	(Dollars in thousands)
Income taxes	$	182,075	$	4,091	$	12,165	$	177,984	NM	$	(8,074	)	(66.4	)%

NM - Not meaningful

Comparison of income taxes for the years ended August 31, 2017 , and 2016

During fiscal 2017, we had an increase in income tax benefit when compared to fiscal 2016, which was primarily due to the recognition of deferred tax benefits related to the issuance of non-qualified equity certificates in fiscal 2013 and 2014, a tax benefit in fiscal 2017 from retaining a significant portion of the Domestic production activities deduction and the bad debt deduction in our U.S. tax returns related to the performance of guarantees caused by an approximate $229.4 million loss related to a Brazilian trading partner entering into bankruptcy-like proceedings under Brazilian law. The fiscal 2016 income tax benefit related to an appeals settlement with the Internal Revenue Service that did not reoccur in fiscal 2017. The federal and state statutory rate applied to nonpatronage business activity was 38.4% and 38.3% for the years ended August 31, 2017, and 2016, respectively. The income taxes and effective tax rate vary each year based upon profitability and nonpatronage business activity during each of the comparable years with fiscal 2017's income tax benefit being unusually large in comparison to income before taxes.

Comparison of income taxes for the years ended August 31, 2016 , and 2015

During fiscal 2016, we had a decrease in income tax benefit when compared to fiscal 2015, which was primarily driven by an appeals settlement with the Internal Revenue Service for a fiscal 2007 and 2006 tax matter. The fiscal 2015 income tax benefit related to the issuance of non-qualified equity certificates in fiscal 2013 and 2014 and from the recognition of Kansas tax credits generated by CHS McPherson that did not reoccur in fiscal 2016. The federal and state statutory rate applied to nonpatronage business activity was 38.3% and 38.1% for the years ended August 31, 2016, and 2015, respectively. The income taxes and effective tax rate vary each year based upon profitability and nonpatronage business activity during each of the comparable years.

Liquidity and Capital Resources

Summary

In assessing our financial condition, we consider factors such as working capital and internal benchmarking related to our applicable covenants and other financial criteria. We fund our operations primarily through a combination of cash flows from operations and revolving credit facilities. We fund our capital expenditures and growth primarily through cash, operating cash flow and long-term debt financing.

On August 31, 2017 , and August 31, 2016 , we had working capital, defined as current assets less current liabilities, of $181.9 million and $414.4 million , respectively. The decrease in working capital was driven primarily by the decrease in our accounts receivable and cash balances. Our current ratio, defined as current assets divided by current liabilities, was 1.0 and 1.1 as of August 31, 2017 , and August 31, 2016 , respectively.

As of August 31, 2017 , we had cash and cash equivalents of $181.4 million , total equities of $7.9 billion , long-term debt of $2.2 billion and notes payable of $2.0 billion . Our capital allocation priorities include maintaining the safety and compliance of our operations, paying our dividends, reducing funded debt and taking advantage of strategic opportunities that benefit our owners. We expect the down cycle in the Ag industry to continue and while we maintain appropriate levels of

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liquidity, we will continue to consider opportunities to further diversify and enhance our sources and amounts of liquidity. These opportunities include reducing operating expenses, deploying and/or financing working capital more efficiently and identifying and disposing of nonstrategic or underperforming assets. We believe that cash generated by operating activities, along with available borrowing capacity under our credit facilities, will be sufficient to support our operations for the foreseeable future and we expect to remain in compliance with our loan covenants.

In connection with the losses caused by a trading partner of ours in Brazil entering into bankruptcy-like proceedings under Brazilian law, we intend to fund a total of approximately $170.0 million in loan guarantees to our Brazilian operations in the first nine months of fiscal 2018. It is our intention to fund these loan guarantees through a combination of sources including cash flow and the liquidity enhancement actions noted above.

Fiscal 2017 and 2016 Activity

On July 18, 2017, we amended an existing receivables and loans securitization facility (“Securitization Facility” or the "Facility") with certain unaffiliated financial institutions (the "Purchasers"). Under the Securitization Facility, CHS Capital and CHS both sell eligible trade account and notes receivable (“Receivables”) they have originated to Cofina Funding, LLC (“Cofina Funding”), a wholly-owned bankruptcy-remote indirect subsidiary of CHS. Cofina Funding in turn sells the purchased Receivables in their entirety to the Purchasers. Prior to amending the Securitization Facility in July 2017, the transfer of Receivables was accounted for as a secured borrowing. Under the terms of the amended Securitization Facility, CHS accounts for Receivables sold under the facility as a sale of financial assets and derecognizes the sold Receivables from its Consolidated Balance Sheets. The amount available under the Facility fluctuates over time based on the total amount of eligible Receivables generated during the normal course of business, with maximum availability of $700.0 million. As of August 31, 2017, the total availability under the Securitization Facility was $618.0 million, all of which had been utilized. The Securitization Facility had previously been amended in July 2016, which had increased total availability under the Facility to $850.0 million. The amount of funding outstanding against our securitized Receivables at August 31, 2016 was $550.0 million.

The Facility agreement contains certain customary representations and warranties and affirmative covenants, including as to the eligibility of the Receivables being sold, and contains customary program termination events and non-reinvestment events. We were in compliance with all covenants associated with our Securitization Facility as of August 31, 2017.

In February 2016, we invested $2.8 billion in CF Nitrogen, commencing our strategic venture with CF Industries. The investment consists of an 11.4% membership interest (based on product tons) in CF Nitrogen; and an associated 80-year supply agreement that entitles us to purchase up to 1.1 million tons of granular urea and 580,000 tons of urea ammonium nitrate annually from CF Nitrogen for ratable delivery. The investment was financed through operating cash flow, the issuance of long-term debt, preferred stock proceeds and available cash.

In January 2016, we consummated a private placement of long-term notes in the aggregate principal amount of $680.0 million with certain accredited investors, which long-term notes are layered into six series. See Note 7, Notes Payable and Long-Term Debt, of the notes to consolidated financial statements that are included in this Annual Report on Form 10-K for additional information.

In December 2015, we entered into three bilateral, uncommitted revolving credit facilities with an aggregate capacity of $1.3 billion. As of August 31, 2017 , one bilateral agreement remained with capacity of $250 million. Amounts borrowed under these short-term lines are used to fund our working capital.

In September 2015, we amended and restated our primary committed line of credit, which is a $3.0 billion five-year, unsecured revolving credit facility with a syndication of domestic and international banks that expires in September 2020. The outstanding balance on this facility was $480.0 million and $700.0 million as of August 31, 2017 and 2016, respectively. In addition, we entered into a ten-year term loan with a syndication of banks for up to $600.0 million. The full amount under the term loan was drawn down in January 2016. As of August 31, 2017 , $300.0 million of principal under the term loan was outstanding. Principal on the term loan is payable in full on September 4, 2025.

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Cash Flows

The following table presents summarized cash flow data for the years ended August 31, 2017 , 2016 , and 2015 :



										2017 vs. 2016					2016 vs. 2015
	2017			2016			2015			$ Change			% Change		$ Change			% Change
	(Dollars in thousands)
Net cash provided by (used in) operating activities	$	932,994		$	1,263,498		$	570,010		$	(330,504	)	(26	)%	$	693,488		122	%
Net cash provided by (used in) investing activities	(405,041		)	(3,746,971		)	(1,908,668		)	3,341,930			89	%	(1,838,303		)	(96	)%
Net cash provided by (used in) financing activities	(621,193		)	1,814,196			153,828			(2,435,389		)	(134)%		1,660,368			1,079	%
Effect of exchange rate changes on cash and cash equivalents	(4,694		)	(5,223		)	5,436			529			10	%	(10,659		)	(196	)%
Net increase (decrease) in cash and cash equivalents	$	(97,934	)	$	(674,500	)	$	(1,179,394	)	$	576,566		85	%	$	504,894		43	%

Fiscal Year 2017 Compared to Fiscal Year 2016

Cash from operating activities for fiscal 2017 decrease d $330.5 million , primarily due to the following:

•

Increases in inventory resulting from increased commodity prices and volumes on hand. On August 31, 2017 , the per bushel market prices of two of our primary grain commodities, spring wheat and corn, increased by $1.33 (27%) and $0.41 (14%), respectively, when compared to the spot prices on August 31, 2016. The per bushel market price of our third primary commodity, soybeans, decreased by $0.24 (2%) when compared to the spot price on August 31, 2016. In general, crude oil market prices increased $2.53 (6%) per barrel on August 31, 2017, when compared to August 31, 2016. Partially offsetting grain prices, fertilizer commodity prices affecting our wholesale crop nutrients and country operations retail businesses reflected decreases of up to 14%, depending on the specific products, compared to prices on August 31, 2016.


•	Lower net income due to increased reserve and impairment charges within our Ag and Energy segments.

The $3.3 billion increase in cash from investing activities for fiscal 2017 reflects the following:


•	Our $2.8 billion investment in CF Nitrogen completed in fiscal 2016 which didn't reoccur in fiscal 2017.


•	Reduced acquisitions of property, plant and equipment and other business acquisitions. The significant decrease in acquisitions of property, plant and equipment was primarily related to our plan to reduce our capital investments to allow us to actively reduce our funded debt obligations.


•	Net cash proceeds of $7.9 million related to the sale of Receivables associated with the Securitization Facility.

Cash from financing activities for fiscal 2017 decrease d $2.4 billion , primarily due to the following:


•	Proceeds from issuances of debt instruments related primarily to the financing of the CF Nitrogen investment in fiscal 2016 which didn't reoccur in fiscal 2017.


•	The decrease above was partially offset by reduced payments of cash patronage in fiscal 2017 and the final contingent payment of the noncontrolling interest in CHS McPherson made in fiscal 2016.

Fiscal Year 2016 Compared to Fiscal Year 2015

Cash from operating activities for fiscal 2016 increase d $693.5 million , primarily due to declines in inventory and other current assets resulting from decreased commodity prices. On August 31, 2016 , the per bushel market prices of two of our primary grain commodities, corn and spring wheat, decreased by $0.90 (23%) and $0.11 (2%), respectively, when compared to the spot prices on August 31, 2015 . The per bushel market price of our third primary commodity, soybeans, increased by $0.63 (7%) when compared to the spot price on August 31, 2015 . In general, crude oil market prices decreased $4.50 (9%) per barrel on August 31, 2016 , when compared to August 31, 2015 . Comparing the same periods, fertilizer commodity prices affecting our wholesale crop nutrients and country operations retail businesses reflected decreases of up to 34%, depending on the specific products, compared to prices on August 31, 2015 .

The $1.8 billion decrease in cash from investing activities for fiscal 2016 , reflects the following:


•	Our $2.8 billion investment in CF Nitrogen.


•	The decrease above was partially offset by reduced acquisitions of property, plant and equipment and other business acquisitions. The significant decrease in acquisitions of property, plant and equipment was primarily related to our plan to reduce our capital investments to allow us to actively reduce our funded debt obligations.

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Cash from financing activities for fiscal 2016 increase d $1.7 billion , primarily due to proceeds from issuances of debt instruments related primarily to the financing of the CF Nitrogen investment.

Future Uses of Cash

We expect to utilize cash and cash equivalents, along with cash generated by operating activities to fund capital expenditures and payments for debt, interest, dividends and guarantees. The following is a summary of our primary cash requirements for fiscal 2018 :


•	Capital expenditures. We expect total capital expenditures for fiscal 2018 to be approximately $602.0 million, compared to capital expenditures of $446.7 million in fiscal 2017 . Included in that amount for fiscal 2018 is approximately $221.0 million for the acquisition of property, plant and equipment and major repairs at our Laurel, Montana and McPherson, Kansas refineries.


•	Major repairs . Refineries have planned major maintenance to overhaul, repair, inspect and replace process materials and equipment (referred to as "turnaround") which typically occur for a five-to-six week period every 2-5 years. Our Laurel, Montana refinery has planned maintenance scheduled for fiscal 2018 for approximately $92.0 million.


•	Debt and interest. We expect to repay approximately $149.1 million of long-term debt obligations and incur interest payments of approximately $87.8 million during fiscal 2018 .


•	Preferred stock dividends. We had approximately $2.3 billion of preferred stock outstanding at August 31, 2017 . We expect to pay dividends on our preferred stock of approximately $168.7 million during fiscal 2018 .


•	Guarantees . We intend to fund a total of approximately $170 million in loan guarantees to our Brazilian operations in the next nine months as a result of losses caused by a trading partner of ours in Brazil entering into bankruptcy-like proceedings under Brazilian law.

Future Sources of Cash

We fund our operations primarily through a combination of cash flows from operations and committed and uncommitted revolving credit facilities, including our Securitization Facility. We believe these sources will provide adequate liquidity to meet our working capital needs. We fund certain of our long-term capital needs, primarily those related to acquisitions of property, plant and equipment by issuing privately placed long-term debt and term loans. In addition, our wholly-owned subsidiary, CHS Capital, makes loans to member cooperatives, businesses and individual producers of agricultural products included in our cash flows from investing activities, and has financing sources as detailed below in CHS Capital Financing .

Working Capital Financing

We finance our working capital needs through committed and uncommitted lines of credit with domestic and international banks. We believe our current cash balances and our available capacity on our committed lines of credit will provide adequate liquidity to meet our working capital needs. The following table summarizes our primary lines of credit as of August 31, 2017 , and 2016 :



Revolving Credit Facilities	Maturities	Total Capacity		Borrowings Outstanding		Interest Rates
		2017		2017	2016
		(Dollars in thousands)
Committed Five-Year Unsecured Facility	2020	$	3,000,000	$480,000	$700,000	LIBOR+0.00% to 1.45%
Uncommitted Bilateral Facilities	2017	250,000		250,000	300,000	LIBOR+0.00% to 1.05%

In addition to our primary revolving lines of credit, we have a three-year $325.0 million committed revolving pre-export credit facility for CHS Agronegocio Industria e Comercio Ltda ("CHS Agronegocio"), our wholly-owned subsidiary in Brazil. CHS Agronegocio uses the facility, which expires in April 2019, to finance its working capital needs related to its purchases and sales of grains, fertilizers and other agricultural products. As of August 31, 2017 , the outstanding balance under the facility was $250.0 million .

In addition to our uncommitted bilateral facility above, as of August 31, 2017 , our wholly-owned subsidiaries, CHS Europe S.a.r.l and CHS Agronegocio, had uncommitted lines of credit with $433.9 million outstanding. In addition, our other international subsidiaries had lines of credit with a total of $168.4 million outstanding as of August 31, 2017 , of which $15.4 million was collateralized.

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On August 31, 2017 , and 2016 , we had total short-term indebtedness outstanding on these various primary and other facilities, as well as other miscellaneous short-term notes payable, in the amount of $1.7 billion and $1.8 billion, respectively.

Long-term Debt Financing

The following table presents summarized long-term debt data for the years ended August 31, 2017 , and 2016 .



	For the Years Ended August 31
	2017			2016
	(Dollars in thousands)
Private placement debt	$	1,643,886		$	1,775,924
Bank financing	445,000			345,000
Capital lease obligations	33,075			105,708
Other notes and contract payable	62,652			76,147
Deferred financing costs	(4,820		)	(5,574		)
	$	2,179,793		$	2,297,205

Long-term debt outstanding as of August 31, 2017 , has aggregate maturities, excluding fair value adjustments and capital leases, as follows:



	(Dollars in thousands)
2018	$	149,050
2019	167,412
2020	31,478
2021	182,949
2022	126
Thereafter	1,611,385
	$	2,142,400

See Note 7, Notes Payable and Long-Term Debt, of the notes to consolidated financial statements that are included in this Annual Report on Form 10-K for additional information.

CHS Capital Financing

For a description of the Securitization Facility, see above in Fiscal 2017 and 2016 activity.

CHS Capital has available credit under master participation agreements with numerous counterparties. Prior to the fourth quarter of fiscal 2017, all borrowings under these agreements were accounted for as secured borrowings. During the fourth quarter of fiscal 2017, certain of these agreements were amended resulting in the Company accounting for the participations as the sale of financial assets. As of August 31, 2017, the remaining participations accounted for as secured borrowings bear interest at variable rates ranging from 2.61% to 4.45% . As of August 31, 2017 , the total funding commitment under these agreements was $94.1 million , of which $29.4 million was borrowed.

CHS Capital sells loan commitments it has originated to ProPartners Financial ("ProPartners") on a recourse basis. The total capacity for commitments under the ProPartners program is $265.0 million . The total outstanding commitments under the program totaled $220.2 million as of August 31, 2017 , of which $144.1 million was borrowed under these commitments with an interest rate of 2.45% .

CHS Capital borrows funds under short-term notes issued as part of a surplus funds program. Borrowings under this program are unsecured and bear interest at variable rates ranging from 0.10% to 0.90% as of August 31, 2017 , and are due upon demand. Borrowings under these notes totaled $119.3 million as of August 31, 2017 .

Covenants

Our long-term debt is unsecured; however, restrictive covenants under various debt agreements have requirements for maintenance of minimum consolidated net worth and other financial ratios. We were in compliance with all debt covenants and restrictions as of August 31, 2017 . Based on our current 2018 projections, we expect continued covenant compliance in the near term.

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In September 2015, we amended all outstanding notes to conform the financial covenants applicable thereto to those of our amended and restated five-year, unsecured, revolving credit facility. The amended notes provide that if our ratio of consolidated funded debt to consolidated cash flow is greater than 3.0 to 1.0, the interest rate on all outstanding notes will be increased by 0.25% until the ratio becomes 3.0 or less. During both fiscal 2017 and 2016, our ratio of funded debt to consolidated cash flow remained below 3.0 to 1.0.

Patronage and Equity Redemptions

In accordance with our bylaws and upon approval of our Board of Directors, annual net earnings from patronage sources are distributed to consenting patrons following the close of each fiscal year. For the year ended August 31, 2017, our Board of Directors authorized only non-qualified distributions, with no cash patronage. For the years ended August 31, 2016, 2015, and 2014, the cash portion of the qualified distributions was deemed by our Board of Directors to be 40%.

The following table presents estimated patronage data for the year ending August 31, 2018, and actual patronage data for the years ended August 31, 2017 , 2016 , and 2015 :



	2018		2017		2016		2015
	(Dollars in millions)
Patronage Distributed in Cash	$	—	$	103.9	$	251.7	$	271.2
Patronage Distributed in Equity	126.3		153.6		375.5		550.3
Total Patronage Distributed	$	126.3	$	257.5	$	627.2	$	821.5

In accordance with authorization from our Board of Directors, we expect total redemptions related to the year ended August 31, 2017 , that will be distributed in fiscal 2018 , to be approximately $10.0 million and to be mostly in the form of redemptions of equity owned by the estates of deceased individual producer members. These redemptions are classified as a current liability on the August 31, 2017 , Consolidated Balance Sheet.

On March 30, 2017, we issued 695,390 shares of Class B Series 1 Preferred Stock to redeem approximately $20.0 million of qualified equity certificates to eligible owners. Each share of Class B Series 1 Preferred Stock was issued in redemption of $28.74 of qualified equity certificates.

In March 2016, we redeemed approximately $76.8 million of qualified equity certificates by issuing 2,693,195 shares of Class B Series 1 Preferred Stock, with a total redemption value of $67.3 million, excluding accumulated dividends. For each share of Class B Series 1 Preferred Stock that was issued, we redeemed $28.50 worth of capital equity certificates.

See Note 9, Equities, of the notes to consolidated financial statements that are included in this Annual Report on Form 10-K for a summary of our outstanding preferred stock as of August 31, 2017 , each series of which is listed on the Global Select Market of NASDAQ.

Off Balance Sheet Financing Arrangements

Guarantees:

We are a guarantor for lines of credit and performance obligations of related, non-consolidated companies. Our bank covenants allow maximum guarantees of $1.0 billion , of which $105.3 million were outstanding on August 31, 2017 . We have collateral for a portion of these contingent obligations. We have not recorded a liability related to the contingent obligations as we do not expect to pay out any cash related to them, and the fair values are considered immaterial. The underlying loans to the counterparties for which we provide guarantees were current as of August 31, 2017 .

Operating leases:

Minimum future lease payments required under noncancelable operating leases as of August 31, 2017 , were $236.6 million .

Debt:

There is no material off balance sheet debt.

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Receivables Securitization Facility and Loan Participations:

In fiscal 2017, we engaged in off-balance sheet arrangements through our Securitization Facility and certain loan participation agreements. Refer to further details about these arrangements in Note 2, Receivables, of the notes to the consolidated financial statements that are included in this Annual Report on Form 10-K.

Contractual Obligations

We had certain contractual obligations at August 31, 2017 , which require the following payments to be made:



	Payments Due by Period
	Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 Years
	(Dollars in thousands)
Long-term debt obligations ⁽¹⁾	$	2,142,400	$	149,050	$	198,890	$	183,075	$	1,611,385
Interest payments ⁽²⁾	647,782		87,756		159,427		141,984		258,615
Capital lease obligations ⁽³⁾	39,500		6,867		10,878		8,470		13,285
Operating lease obligations	236,620		57,957		76,989		44,874		56,800
Purchase obligations ⁽⁴⁾	7,534,491		5,802,142		812,211		243,978		676,160
Other liabilities ⁽⁵⁾	635,490		37,984		35,836		21,832		539,838
Total obligations	$	11,236,283	$	6,141,756	$	1,294,231	$	644,213	$	3,156,083

_______________________________________


⁽¹⁾	Excludes fair value adjustments to the long-term debt reported on our Consolidated Balance Sheet at August 31, 2017 , resulting from fair value interest rate swaps and the related hedge accounting.


⁽²⁾	Based on interest rates and long-term debt balances at August 31, 2017 .


⁽³⁾	Future minimum lease payments under capital leases include amounts related to bargain purchase options and residual value guarantees, which represent economic obligations as opposed to contractual payment obligations.

⁽⁴⁾

Purchase obligations are legally binding and enforceable agreements to purchase goods or services that specify all significant terms, including fixed or minimum quantities; fixed, minimum or variable price provisions; and approximate time of the transactions. In the ordinary course of business, we enter into a significant number of forward purchase commitments for agricultural and energy commodities and the related freight. The purchase obligation amounts shown above include both short- and long-term obligations and are based on: a) fixed or minimum quantities to be purchased; and b) fixed or estimated prices to be paid at the time of settlement. Current estimates are based on assumptions about future market conditions that will exist at the time of settlement. Consequently, actual amounts paid under these contracts may differ due to the variable pricing provisions. Market risk related to the variability of our forward purchase commitments is economically hedged by offsetting forward sale contracts that are not included in the amounts above.


⁽⁵⁾	Other liabilities include the long-term portion of deferred compensation, deferred tax liabilities and contractual redemptions. Of the total other liabilities and deferred tax liabilities of $611.9 million on our Consolidated Balance Sheet at August 31, 2017 , the timing of the payments of $519.8 million of such liabilities cannot be determined.

Critical Accounting Estimates

Our consolidated financial statements are prepared in conformity with U.S. GAAP. The preparation of these consolidated financial statements requires the use of estimates as well as management’s judgments and assumptions regarding matters that are subjective, uncertain or involve a high degree of complexity, all of which affect the results of operations and financial condition for the periods presented. We believe that of our significant accounting policies, the following may involve a higher degree of estimates, judgments and complexity.

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Inventory Valuation and Reserves

Grain, processed grain, oilseed and processed oilseed inventories are stated at net realizable value. All other inventories are stated at the lower of cost or net realizable value. The costs of certain energy inventories (wholesale refined products, crude oil and asphalt) are determined on the last-in, first-out ("LIFO") method; all other inventories of non-grain products purchased for resale are valued on the first-in, first-out ("FIFO") and average cost methods. Estimates are used in determining the net realizable values of grain and oilseed and processed grains and oilseeds inventories. These estimates include the measurement of grain in bins and other storage facilities, which use formulas in addition to actual measurements taken to arrive at appropriate quantities. Other determinations made by management include quality of the inventory and estimates for freight. Grain shrink reserves and other reserves that account for spoilage also affect inventory valuations. If estimates regarding the valuation of inventories, or the adequacy of reserves, are less favorable than management’s assumptions, then additional reserves or write-downs of inventories may be required.

Derivative Financial Instruments

We enter into exchange-traded commodity futures and options contracts to hedge our exposure to price fluctuations on energy, grain and oilseed transactions to the extent considered practicable for minimizing risk. Futures and options contracts used for hedging are purchased and sold through regulated commodity exchanges. We also use over-the-counter ("OTC") instruments to hedge our exposure on fixed-price contracts. Fluctuations in inventory valuations, however, may not be completely hedged, due in part to the absence of satisfactory hedging facilities for certain commodities and geographical areas and, in part, to our assessment of our exposure from expected price fluctuations. We also manage our risks by entering into fixed-price purchase contracts with preapproved producers and establishing appropriate limits for individual suppliers. Fixed-price sales contracts are entered into with customers of acceptable creditworthiness, as internally evaluated. The fair values of futures and options contracts are determined primarily from quotes listed on regulated commodity exchanges. Fixed-price purchase and sales contracts are with various counterparties, and the fair values of such contracts are determined from the market price of the underlying product. We are exposed to loss in the event of nonperformance by the counterparties to the contracts and, therefore, contract values are reviewed and adjusted to reflect potential nonperformance. Risk of nonperformance by counterparties includes the inability to perform because of a counterparty’s financial condition and also the risk that the counterparty will refuse to perform on a contract during periods of price fluctuations where contract prices are significantly different than the current market prices.

Pension and Other Postretirement Benefits

Pension and other postretirement benefits costs and obligations are dependent on assumptions used in calculating such amounts. These assumptions include discount rates, health care cost trend rates, benefits earned, interest costs, expected return on plan assets, mortality rates and other factors. In accordance with U.S. GAAP, actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect recognized expenses and the recorded obligations in future periods. While our management believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect our pension and other postretirement obligations and future expenses.

Deferred Tax Assets and Uncertain Tax Positions

We assess whether a valuation allowance is necessary to reduce our deferred tax assets to the amount that we believe is more likely than not to be realized. While we have considered future taxable income, as well as other factors, in assessing the need for the valuation allowance, in the event that we were to determine that we would not be able to realize all, or part of, our net deferred tax assets in the future, an adjustment to our deferred tax assets would be charged to income in the period such determination was made. We are also significantly impacted by the utilization of tax credits, some of which were passed to us from CHS McPherson (formerly known as NCRA), related to refinery upgrades that enable us to produce ultra-low sulfur fuels. Our tax credit carryforwards are available to offset future federal and state tax liabilities with the tax credits becoming unavailable to us if not used by their expiration date. Our net operating loss carryforwards for tax purposes are available to offset future taxable income. If our loss carryforwards are not used, these loss carryforwards will expire.

Tax benefits related to uncertain tax positions are recognized in our financial statements if it is more likely than not that the position would be sustained upon examination by a tax authority that has full knowledge of all relevant information. The benefits are measured using a cumulative probability approach. Under this approach, we record in our financial statements the greatest amount of tax benefits that have a more than 50% probability of being realized upon final settlement with the tax authorities. In determining these tax benefits, we assign probabilities to a range of outcomes that we feel we could ultimately settle on with the tax authorities using all relevant facts and information available at the reporting date. Due to the complexity of these uncertainties, the ultimate resolution may result in a benefit that is materially different than our current estimate.

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Long-Lived Assets

Property, plant and equipment is depreciated or amortized over the expected useful lives of individual or groups of assets based on the straight-line method. Economic circumstances, or other factors, may cause management’s estimates of expected useful lives to differ from actual.

All long-lived assets, including property, plant and equipment, goodwill, investments in unconsolidated affiliates and other identifiable intangibles, are evaluated for impairment in accordance with U.S. GAAP, at least annually for goodwill, and whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset or asset group may not be recoverable. For goodwill, our annual impairment testing occurs in our fourth quarter. An impaired asset is written down to its estimated fair value based on the best information available. Fair value is generally measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows and may differ from actual.

We have asset retirement obligations with respect to certain of our refineries and other assets due to various legal obligations to clean and/or dispose of the component parts at the time they are retired. In most cases, these assets can be used for extended and indeterminate periods of time, as long as they are properly maintained and/or upgraded. It is our practice and current intent to maintain refineries and related assets and to continue making improvements to those assets based on technological advances. As a result, we believe our refineries and related assets have indeterminate lives for purposes of estimating asset retirement obligations because dates or ranges of dates upon which we would retire a refinery and related assets cannot reasonably be estimated at this time. When a date or range of dates can reasonably be estimated for the retirement of any component part of a refinery or other asset, we will estimate the cost of performing the retirement activities and record a liability for the fair value of that future cost.

We have other assets that we may be obligated to dismantle at the end of corresponding lease terms subject to lessor discretion for which we have recorded asset retirement obligations. Based on our estimates of the timing, cost and probability of removal, these obligations are not material.

Effect of Inflation and Foreign Currency Transactions

We believe that inflation and foreign currency fluctuations have not had a significant effect on our operations during the three years ended August 31, 2017 , since we conduct a significant portion of our business in U.S. dollars.

Recent Accounting Pronouncements

See Note 1, Organization, Basis of Presentation and Significant Accounting Policies, of the notes to consolidated financial statements that are included in this Annual Report on Form 10-K for information concerning new accounting standards and the impact of the implementation of those standards on our financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

COMMODITY PRICE RISK

When we enter into a commodity purchase or sales commitment, we incur risks related to price changes and performance including delivery, quality, quantity and shipment period. In the event that market prices decrease, we are exposed to risk of loss in the market value of inventory and purchase contracts with a fixed or partially fixed price. Conversely, we are exposed to risk of loss on our fixed or partially fixed price sales contracts in the event that market prices increase.

Our use of hedging reduces the exposure to price volatility by protecting against adverse short-term price movements, but it also limits the benefits of favorable short-term price movements. To reduce the price risk associated with fixed price commitments, we generally enter into commodity derivative contracts, to the extent practical, to achieve a net commodity position within the formal position limits we have established and deemed prudent for each commodity. These contracts are primarily transacted on regulated commodity futures exchanges but may also include over-the-counter derivative instruments when deemed appropriate. For commodities where there is no liquid derivative contract, risk is managed through the use of forward sales contracts, other pricing arrangements and, to some extent, futures contracts in highly correlated commodities. These contracts are economic hedges of price risk, but are not designated as hedging instruments for accounting purposes. The contracts are recorded on our Consolidated Balance Sheets at fair values based on quotes listed on regulated commodity exchanges or the market prices of the underlying products listed on the exchanges, except that fertilizer and propane contracts

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are accounted for as normal purchase and normal sales transactions. Unrealized gains and losses on these contracts are recognized in cost of goods sold in our Consolidated Statements of Operations.

When a futures position is established, initial margin must be deposited with the applicable exchange or broker. The amount of margin required varies by commodity and is set by the applicable exchange at its sole discretion. If the market price relative to a short futures position increases, an additional margin deposit would be required. Similarly, a margin deposit would be required if the market price relative to a long futures position decreases. Conversely, if the market price increases relative to a long futures position or decreases relative to a short futures position, margin deposits may be returned by the applicable exchange or broker.

Our policy is to manage our commodity price risk exposure according to internal polices and in alignment with our tolerance for risk. Our profitability from operations is primarily derived from margins on products sold and grain merchandised, not from hedging transactions. At any one time, inventory and purchase contracts for delivery to us may be substantial. We have risk management policies and procedures that include established net position limits. These limits are defined for each commodity and business unit, and may include both trader and management limits as appropriate. The limits policy is overseen at a high level by our corporate compliance team, with day to day monitoring procedures managed within each individual business unit to ensure any limits overage is explained and exposures reduced or a temporary limit increase is established if needed. The position limits are reviewed, at least annually, with senior leadership and the Board of Directors. We monitor current market conditions and may expand or reduce our net position limits or procedures in response to changes in those conditions. In addition, all purchase and sales contracts are subject to credit approvals and appropriate terms and conditions.

The use of hedging instruments does not protect against nonperformance by counterparties to cash contracts. We evaluate counterparty exposure by reviewing contracts and adjusting the values to reflect potential nonperformance. Risk of nonperformance by counterparties includes the inability to perform because of a counterparty’s financial condition and the risk that the counterparty will refuse to perform on a contract during periods of price fluctuations where contract prices are significantly different than the current market prices. We manage these risks by entering into fixed price purchase and sales contracts with preapproved producers and by establishing appropriate limits for individual suppliers. Fixed price contracts are entered into with customers of acceptable creditworthiness, as internally evaluated. Regarding our use of derivatives, we primarily transact in exchange traded instruments or enter into over-the-counter derivatives that clear through a designated clearing organization, which limits our counterparty exposure relative to hedging activities. Historically, we have not experienced significant events of nonperformance on open contracts. Accordingly, we only adjust the estimated fair values of specifically identified contracts for nonperformance. Although we have established policies and procedures, we make no assurances that historical nonperformance experience will carry forward to future periods.

A 10% adverse change in market prices would not materially affect our results of operations, since we use commodity and freight futures and forward contracts as economic hedges of price risk, and since our operations have effective economic hedging requirements as a general business practice.

INTEREST RATE RISK

Debt used to finance inventories and receivables is represented by short-term notes payable, so that our blended interest rate for all such notes approximates current market rates. We have outstanding interest rate swaps with an aggregate notional amount of $495.0 million designated as fair value hedges of portions of our fixed-rate debt. Our objective is to offset changes in the fair value of the debt associated with the risk of variability in the 3-month U.S. Dollar LIBOR interest rate, in essence converting the fixed-rate debt to variable-rate debt. Offsetting changes in the fair values of both the swap instruments and the hedged debt are recorded contemporaneously each period and only create an impact to earnings to the extent that the hedge is ineffective. During fiscal 2017, we recorded offsetting fair value adjustments of $12.8 million , with no ineffectiveness recorded in earnings.

In fiscal 2015, we entered into forward-starting interest rate swaps with an aggregate notional amount of $300.0 million designated as cash flow hedges of the expected variability of future interest payments on our anticipated issuance of fixed-rate debt. During the first quarter of fiscal 2016, we determined that certain of the anticipated debt issuances would be delayed; and we consequently recorded an immaterial amount of losses on the ineffective portion of the related swaps in earnings. Additionally, we paid $6.4 million in cash to settle two of the interest rate swaps upon their scheduled termination dates. During the second quarter of fiscal 2016, we settled an additional two interest rate swaps, paying $5.3 million in cash upon their scheduled termination. In January 2016, we issued the fixed-rate debt associated with these swaps and will amortize the amounts which were previously deferred to other comprehensive income into earnings over the life of the debt. The amounts to be included in earnings are not expected to be material during any 12-month period. During the third quarter of fiscal 2016, we settled the remaining two interest rate swaps, paying $5.1 million in cash upon their scheduled termination. We

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did not issue additional fixed-rate debt as previously planned, and we reclassified all amounts previously recorded to other comprehensive income into earnings.

The table below provides information about our outstanding debt and derivative financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents scheduled contractual principal payments and related weighted average interest rates for the fiscal years presented. For interest rate swaps, the table presents notional amounts for payments to be exchanged by expected contractual maturity dates for the fiscal years presented and interest rates noted in the table.



Expected Maturity Date
	2018			2019			2020			2021			2022			Thereafter			Total			Fair Value Asset (Liability)
	(Dollars in thousands)
Liabilities:
Variable rate miscellaneous short-term notes payable	$	1,695,423		$	—		$	—		$	—		$	—		$	—		$	1,695,423		$	(1,695,423	)
Average interest rate	2.4		%	—			—			—			—			—			2.4		%	—
Variable rate CHS Capital short-term notes payable	$	292,792		$	—		$	—		$	—		$	—		$	—		$	292,792		$	(292,792	)
Average interest rate	1.7		%	—			—			—			—			—			1.7		%	—
Fixed rate long-term debt	$	149,050		$	167,412		$	31,478		$	182,949		$	126		$	1,181,385		$	1,712,400		$	(1,718,269	)
Average interest rate	5.5		%	4.1		%	4.1		%	4.5		%	4.3		%	4.6		%	4.3		%	—
Variable rate long-term debt	$	—		$	—		$	—		$	—		$	—		$	430,000		$	430,000		$	(412,142	)
Average interest rate ^(a)	—			—			—			—			—			range			—			—
Interest Rate Derivatives:
Fixed to variable long-term debt interest rate swaps	$	—		$	130,000		$	—		$	160,000		$	—		$	205,000		$	495,000		$	9,271
Average pay rate ^(b)	—			range			—			range			—			range			—			—
Average receive rate ^(c)	—			range			—			range			—			range			—			—

_______________________________________

^(a)

Borrowings under the agreement bear interest at a base rate (or a LIBO rate) plus an applicable margin, or at a fixed rate of interest determined and quoted by the administrative agent under the agreement in its sole and absolute discretion from time to time. The applicable margin is based on our leverage ratio and ranges between 1.50% and 2.00% for LIBO rate loans and between 0.50% and 1.00% for base rate loans.


^(b)	Average three-month U.S. Dollar LIBOR plus spreads ranging from 2.009% to 2.74%.


^(c)	Seven swaps with notional amount of $495 million with fixed rates from 4.08% to 4.67%.

FOREIGN CURRENCY RISK

We were exposed to risk regarding foreign currency fluctuations during fiscal 2017 and in prior years even though a substantial amount of our international sales were denominated in U.S. dollars. In addition to specific transactional exposure, foreign currency fluctuations can impact the ability of foreign buyers to purchase U.S. agricultural products and the competitiveness of U.S. agricultural products compared to the same products offered by alternative sources of world supply. From time to time, we enter into foreign currency hedge contracts to minimize the impact of currency fluctuations on our transactional exposures. The notional amounts of our foreign exchange derivative contracts were $776.7 million and $802.2 million as of August 31, 2017 , and August 31, 2016 , respectively.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements listed in Item 15(a)(1) of this Annual Report on Form 10-K are set forth beginning on page F-1. Financial statement schedules are included in Schedule II in Item 15(a)(2) of this Annual Report on Form 10-K. Supplementary financial information required by Item 302 of Regulation S-K for each quarter during the years ended August 31, 2017 , and 2016 , is presented below.



	Fiscal Year 2017
	August 31, 2017			May 31, 2017			February 28, 2017		November 30, 2016
	(Unaudited) (Dollars in thousands)
Revenues	$	7,952,005		$	8,614,090		$	7,320,406	$	8,048,250
Gross profit	108,700			247,102			240,742		352,697
Income (loss) before income taxes	(94,845		)	(209,158		)	23,597		225,554
Net income (loss)	(50,552		)	(46,140		)	14,973		208,942
Net income (loss) attributable to CHS Inc.	(50,675		)	(45,185		)	14,567		209,150



	Fiscal Year 2016
	August 31, 2016			May 31, 2016		February 29, 2016			November 30, 2015
	(Unaudited) (Dollars in thousands)
Revenues	$	8,182,493		$	7,796,588	$	6,639,330		$	7,728,792
Gross profit	140,959			317,512		89,004			411,818
Income (loss) before income taxes	11,964			194,521		(76,462		)	289,855
Net income (loss)	(1,706		)	189,683		(30,182		)	266,174
Net income (loss) attributable to CHS Inc.	(1,579		)	190,275		(30,979		)	266,475

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures:

Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of August 31, 2017 , the end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, as of August 31, 2017 .

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Management’s Annual Report on Internal Control Over Financial Reporting:

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and our dispositions of assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition and use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of August 31, 2017 . In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework (2013). Based on management’s assessment using this framework, management concluded that, as of August 31, 2017 , our internal control over financial reporting was effective.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to the Financial Reform Bill passed in July 2010 that permits us to provide only management’s report in this Annual Report on Form 10-K.

Change in Internal Control Over Financial Reporting:

We are in the process of implementing a new ERP system. The new ERP system is expected to take several years to fully implement, and has and will continue to require significant capital and human resources to deploy. The implementation of the new ERP system will affect the processes that constitute our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) and management has taken steps to ensure that appropriate controls are designed and implemented as each functional area of the new ERP system is enacted.

Other than as described above, during our fourth fiscal quarter, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

BOARD OF DIRECTORS

The table below provides certain information regarding each of our directors, as of August 31, 2017 .



Name	Age	Director Region	Director Since
Donald Anthony	67	8	2006
Clinton J. Blew	40	8	2010
Dennis Carlson	56	3	2001
Curt Eischens	65	1	1990
Jon Erickson	57	3	2011
Mark Farrell	58	5	2016
Steve Fritel	62	3	2003
Alan Holm	57	1	2013
David Johnsrud	63	1	2012
David Kayser	58	4	2006
Randy Knecht	67	4	2001
Greg Kruger	58	5	2008
Edward Malesich	64	2	2011
Perry Meyer	63	1	2014
Steve Riegel	65	8	2006
Daniel Schurr	52	7	2006

The qualifications for our Board of Directors are listed below under “Director Elections and Voting.” In general, our directors operate large commercial agricultural enterprises requiring expertise in all areas of management, including financial oversight. They also have experience in serving on local cooperative association boards, and participate in a variety of agricultural and community organizations. Our directors complete the National Association of Corporate Directors comprehensive Director Professionalism course and earn the Certificate of Director Education.

Donald Anthony, assistant secretary-treasurer, has been a member of the CHS Board of Directors since 2006. Since 2015, Mr. Anthony has served as assistant secretary-treasurer of the Executive Committee of the Board. He serves on the Corporate Risk and Audit committees. He holds a bachelor’s degree in agricultural economics from the University of Nebraska. Mr. Anthony’s principal occupation has been farming for more than five years, and he raises corn, soybeans and alfalfa near Lexington, Nebraska.

Clinton J. Blew, first vice chairman, has been a member of the CHS Board of Directors since 2010. Since 2017, Mr. Blew has served as first vice chairman of the Executive Committee of the Board. He serves on the Government Relations and Corporate Risk committees. He is a member of the board of directors of Mid Kansas Coop ("MKC"), Moundridge, Kansas, and is a member of the Hutchinson Community College Ag Advisory Board, the Kansas Livestock Association, Texas Cattle Feeder’s Association and Red Angus Association of America. He holds an applied science degree in farm and ranch management from Hutchinson Community College. Mr. Blew’s principal occupation has been farming for more than five years and he farms and ranches in a family partnership in southcentral Kansas.

Dennis Carlson has been a member of the CHS Board of Directors since 2001. He serves on the Corporate Risk and Governance committees. Mr. Carlson’s principal occupation has been farming for more than five years, and he raises wheat, sunflowers and soybeans near Mandan, North Dakota.

Curt Eischens, has been a member of the CHS Board of Directors since 1990. He serves as chairman of the Capital Committee. Mr. Eischens serves as chairman for Cooperative Network, director of Ralph Morris Foundation and is a member of the Minnesota Soybean Association, Minnesota Corn Growers Association, Minnesota Farmers Union, Minnesota FFA

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Alumni Association (life member) and the National FFA Alumni. Mr. Eischens’ principal occupation has been farming for more than five years, and he operates a corn and soybean farm near Minneota, Minnesota.

Jon Erickson, second vice chairman, has been a member of the CHS Board of Directors since 2011. Since 2017, he has been second vice chairman of the Executive Committee of the Board. He is chairman of the Government Relations Committee and serves on the Corporate Risk Committee. He is a member of the North Dakota Farmers Union and the North Dakota Stockman’s Association. He holds a bachelor’s degree in agricultural economics from North Dakota State University. Mr. Erickson’s principal occupation has been farming for more than five years, and he raises grains and oilseeds and operates a commercial Hereford/Angus cow-calf business near Minot, North Dakota.

Mark Farrell has been a member of the CHS Board of Directors since 2016. He serves on the Audit and CHS Foundation Finance and Investment committees. He graduated from the University of Wisconsin-Madison Ag and Life Sciences short course. Mr. Farrell’s principal occupation has been farming for more than five years. He raises corn, soybeans and wheat in Dane County, Wisconsin.

Steve Fritel has been a member of the CHS Board of Directors since 2003. He serves on the Capital and Governance committees. He earned an associate’s degree from North Dakota State College of Science. Mr. Fritel’s principal occupation has been farming for more than five years. He raises spring wheat, barley, soybeans, edible beans, corn and confectionary sunflowers near Rugby, North Dakota. He also runs a family business dealing with the sale of farm grain storage and related equipment.

Alan Holm has been a member of the CHS Board of Directors since 2013. He is chairman of the Corporate Risk Committee and serves on the Government Relations Committee. He also serves on the board for Citizens Bank of Minnesota. Mr. Holm holds an associate’s degree in machine tool technology from Mankato Technical College. Mr. Holm's principal occupation has been farming for more than five years. He raises corn, soybeans, sweet corn, peas and hay and also has a cow-calf herd near Sleepy Eye, Minnesota.

David Johnsrud, secretary-treasurer, has been a member of the CHS Board of Directors since 2012. Since 2017, he has been secretary-treasurer of the Executive Committee of the Board. He serves as a member of the Corporate Risk and Governance committees. He also serves as a member of the board for the Cooperative Network. Mr. Johnsrud’s principal occupation has been farming for more than five years, and he raises corn and soybeans near Starbuck, Minnesota.

David Kayser has been a member of the CHS Board of Directors since 2006. He chairs the CHS Foundation Finance and Investment Committee. He also serves on the Audit Committee. Mr. Kayser is a member of Mitchell Technical Institute Foundation Board. Mr. Kayser’s principal occupation has been farming for more than five years, and he raises corn, soybeans and hay near Alexandria, South Dakota, and operates a cow-calf and feeder-calf business.

Randy Knecht has been a member of the CHS Board of Directors since 2001. He serves on the Government Relations and Capital committees. He holds a bachelor’s degree in agriculture from South Dakota State University. Mr. Knecht’s principal occupation has been farming for more than five years, and he operates a diversified family farm operation near Houghton, South Dakota, raising corn, soybeans, alfalfa and beef cattle.

Greg Kruger has been a member of the CHS Board of Directors since 2008. He chairs the Audit Committee and also serves on the CHS Foundation Finance and Investment Committee. Mr. Kruger’s principal occupation has been farming for more than five years, and he operates a family dairy, hog and crop enterprise near Eleva, Wisconsin.

Edward Malesich has been a member of the CHS Board of Directors since 2011. He serves on the Capital and Governance committees. He serves as a member of Montana Stock Growers Association, Montana Grain Growers Association, Farm Bureau, Montana Farmers Union and Montana Council of Co-ops. He holds a bachelor’s degree in agricultural production from Montana State University. Mr. Malesich’s principal occupation has been farming for more than five years, and he raises Angus cattle, wheat, malt barley and hay near Dillon, Montana.

Perry Meyer has been a member of the CHS Board of Directors since 2014. He serves on the Audit and Corporate Risk committees. He serves as director of Heartland Corn Products Cooperative and is a member of United Farmers Co-op, Central Region Cooperative, Minnesota Farm Bureau, Minnesota and Nicollet County corn growers associations, and Minnesota Pork Producers Association. He serves as president of Steamboat Pork Cooperative, chairman of NU-Telecom Board and director of Minnesota Valley Lutheran School Foundation. He holds an agricultural mechanics degree from Alexandria (Minnesota) Technical School. Mr. Meyer’s principal occupation has been farming for more than five years, and he operates a family farm raising corn, soybean and hogs near New Ulm, Minnesota.

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Steve Riegel has been a member of the CHS Board of Directors since 2006. He chairs the Governance Committee and also serves on the CHS Foundation Finance and Investment Committee. He serves as advisory director of Bucklin (Kansas) National Bank. He attended Fort Hays (Kansas) State University, majoring in agriculture, business and animal science. Mr. Riegel’s principal occupation has been farming for more than five years, and he raises irrigated corn, soybeans, alfalfa, dryland wheat and milo near Ford, Kansas.

Daniel Schurr, chairman , has been a member of the CHS Board of Directors since 2006. Since 2017, Mr. Schurr has served as chairman of the Executive Committee of the Board. He serves on the Blackhawk Bank and Trust board and audit and loan committees and on the Silos and Smokestacks National Heritage Area board. He holds a bachelor’s degree in agricultural business with a minor in economics from Iowa State University. Mr. Schurr’s principal occupation has been farming for more than five years. He raises corn and soybeans near LeClaire, Iowa, and also operates a commercial trucking business.

Director Elections and Voting

Director elections are for three-year terms and are open to any qualified candidate. The qualifications for the office of director are as follows:


•	At the time of declaration of candidacy, the individual (except in the case of an incumbent) must have the written endorsement of a locally elected producer board that is part of the CHS system and located within the region from which the individual is to be a candidate.


•	At the time of the election, the individual must be less than 68 years old.

The remaining qualifications set forth below must be met at all times commencing six months prior to the time of election and while the individual holds office:


•	The individual must be a member of CHS or a member of a Cooperative Association Member.


•	The individual must reside in the region from which he or she is to be elected.


•	The individual must be an active farmer or rancher. “Active farmer or rancher” means an individual whose primary occupation is that of a farmer or rancher, excluding anyone who is an employee of ours or of a Cooperative Association Member.

The following positions on the Board of Directors will be up for re-election at the 2017 Annual Meeting of Members:



Region	Current Incumbent
Region 1 (Minnesota)	Curt Eischens
Region 1 (Minnesota)	Perry Meyer
Region 2 (Montana and Wyoming)	Edward Malesich
Region 3 (North Dakota)	Jon Erickson
Region 5 (Connecticut, Delaware, Illinois, Indiana, Kentucky, Ohio, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, West Virginia, Wisconsin)	Greg Kruger
Region 6 (Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Washington, Utah)	Open Seat
Region 7 (Alabama, Arkansas, Florida, Georgia, Iowa, Louisiana, Missouri, Mississippi, North Carolina, South Carolina, Tennessee)	Daniel Schurr
Region 8 (Colorado, Nebraska, Kansas, New Mexico, Oklahoma, Texas)	Clinton J. Blew

_______________________________________

Voting rights, including those in regard to director elections, arise by virtue of membership in CHS, not because of ownership of any equity or debt instruments; therefore, our preferred stockholders cannot recommend nominees to our Board of Directors nor vote in regard to director elections unless they are members of CHS.

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EXECUTIVE OFFICERS

The table below lists our executive officers as appointed by the CHS Board of Directors.



Name	Age	Position
Jay Debertin	57	President and Chief Executive Officer
Shirley Cunningham	57	Executive Vice President, Ag Business and Enterprise Strategy
Darin Hunhoff	47	Executive Vice President, Energy and Foods
Timothy Skidmore	56	Executive Vice President and Chief Financial Officer
James Zappa	53	Executive Vice President and General Counsel

Jay Debertin has been President and Chief Executive Officer for CHS since May 2017. He leads the CHS strategic leadership team in strengthening the company by advancing operational excellence, accelerating its focus on results and delivering products and services that help the cooperative’s owners grow. Mr. Debertin joined CHS in 1984 in the petroleum division and held a variety of positions in its energy marketing operations before being named Vice President, Crude Oil Supply, in 1998. In 2001, his responsibilities included raw material supply, refining, pipelines and terminals, trading and risk management, and transportation. From 2005 to 2010, Mr. Debertin was Executive Vice President and Chief Operating Officer for Processing at CHS. From 2010 to 2017, he served as Executive Vice President of Energy and Foods where he led refineries, pipelines and terminals, refined fuels, propane, lubricants and transportation and processing and food ingredients at CHS. Mr. Debertin serves as board chairman for Ventura Foods, LLC. He earned a bachelor’s degree in economics from the University of North Dakota and a Master of Business Administration degree from the University of Wisconsin - Madison.

Shirley Cunningham has been Executive Vice President - Ag Business and Enterprise Strategy of CHS since September 2014. She leads the aligned Ag Business platform, consisting of its International and North America Grain Marketing and Agronomy operations, and enterprise strategy functions, including information technology and marketing communications as well as planning and strategy. Ms. Cunningham serves on the boards of Ventura Foods, LLC, Kemira Oyj, a global chemical company serving customers in water-intensive industries, and Gildan Activewear Inc., a leading manufacturer and marketer of quality branded basic family apparel. She joined CHS in 2013 as Executive Vice President, Enterprise Strategy, before expanding her role in 2014. She previously served as Chief Information Officer for Monsanto Company. She holds a Master of Business Administration degree from Washington University, St. Louis, Missouri.

Darin Hunhoff has been Executive Vice President - Energy and Foods for CHS since May 2017. He leads CHS energy operations, including refineries, pipelines and terminals, refined fuels, propane, lubricants and transportation. He also leads CHS Processing and Food Ingredients, which includes canola and soybean processing plants. He is also responsible for the CHS Aligned Solutions group which provides strategic business advisory services to cooperatives. Mr. Hunhoff serves on the board of directors for Ardent Mills, LLC. He joined CHS 25 years ago as a petroleum specialist. He has also been chief strategy officer for CHS and has spent several years in energy leadership roles, including time as senior vice president of refined fuels. He earned a bachelor’s degree in marketing and business management from Southwest Minnesota State University in Marshall, Minnesota.

Timothy Skidmore has been Executive Vice President and Chief Financial Officer since joining CHS in August 2013. He is responsible for finance, accounting, enterprise credit, financial planning and analysis, internal controls, insurance risk management, patron equities, payroll, strategic sourcing, tax and treasury. Mr. Skidmore serves as a trustee for the Science Museum of Minnesota, where he serves on the Audit and Finance Committee. Before joining CHS, he served as Vice President of finance and strategy for Campbell North America. He joined Campbell as assistant treasurer in 2001 and held numerous leadership positions in finance including leading the cash management, corporate finance and international treasury functions. He served in various business unit chief financial officer roles within Campbell. Prior to that, Mr. Skidmore spent 15 years at DuPont Co., holding a variety of financial leadership positions. He holds a bachelor's degree in risk management from the University of Georgia, and a Master of Business Administration in finance from Widener University, Chester, Pennsylvania.

James Zappa has been Executive Vice President and General Counsel for CHS since April 2015. He provides counsel to CHS leadership and the Board of Directors on company strategy, government affairs, corporate governance and compliance. He works with the corporate finance team to support Securities and Exchange Commission reporting and compliance, disclosure and investor communications. In addition to his role as general counsel, Mr. Zappa currently serves as a director for Ventura Foods, LLC. He also serves as director for Boy Scouts of America, Northern Star Council, and the Greater Twin Cities United Way. He previously worked at 3M in various roles including Vice President, Associate General Counsel and Chief Compliance Officer; Vice President, Associate General Counsel, International Operations; counsel to the 3M Board’s

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Compensation Committee; Assistant General Counsel for consumer office business and human resources; and Counsel and Assistant General Counsel for labor and employment law. Prior to joining 3M, he worked for UnitedHealth Group and for the law firm Dorsey & Whitney. He earned a juris doctor degree from the University of Minnesota Law School, a master’s degree in communication arts and sciences from the University of Southern California, and a bachelor’s degree from Drake University.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and persons who beneficially own more than 10% of any class of our preferred stock to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission (Commission). Such executive officers, directors and greater than 10% beneficial owners are required by the regulations of the Commission to furnish us with copies of all Section 16(a) reports they file.

Based solely upon a review of copies of reports on Forms 3 and 4 and amendments thereto furnished to us during, and reports on Form 5 and amendments thereto furnished to us with respect to, the fiscal year ended August 31, 2017 , and based further upon written representations received by us with respect to the need to file reports on Form 5, no individuals filed late reports required by Section 16(a) of the Securities Exchange Act of 1934.

CODE OF ETHICS

We have adopted a code of ethics within the meaning of Item 406(b) of Regulation S-K promulgated by the Commission. This code of ethics applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. This code of ethics is part of our broader CHS Global Code of Conduct Policy, which is posted on our website. The Internet address for our website is http://www.chsinc.com and the CHS Global Code of Conduct Policy may be found on the "Compliance" web page, which can be accessed from the "Governance & Compliance" web page, which can be accessed from the "Our Company" web page, which can be accessed from our main web page. We intend to disclose any amendment to, or waiver from, a provision of the code of ethics that applies to our principal executive officer, principal financial officer or principal accounting officer on the "Compliance" web page of our website. The information contained on our website is not part of, and is not incorporated in, this report or any other report we file with or furnish to the Commission.

AUDIT COMMITTEE MATTERS

The Board of Directors has a separately designated standing Audit Committee for the purpose of overseeing our accounting and financial reporting processes and audits of our financial statements. The Audit Committee is comprised of Mr. Anthony, Mr. Farrell, Mr. Kayser, Mr. Kruger (Chairman), and Mr. Meyer, each of whom is an independent director. The Audit Committee has oversight responsibility to our owners relating to our financial statements and the financial reporting process, preparation of the financial reports and other financial information provided by us to any governmental or regulatory body, the systems of internal accounting and financial controls, the internal audit function and the annual independent audit of our financial statements. The Audit Committee assures that the corporate information gathering and reporting systems developed by management represent a good faith attempt to provide senior management and the Board of Directors with information regarding material acts, events and conditions within CHS. In addition, the Audit Committee is directly responsible for the appointment, compensation and oversight of the independent registered public accounting firm.

We do not believe that any member of the Audit Committee of the Board of Directors is an "audit committee financial expert” as defined in the Sarbanes-Oxley Act of 2002 and the rules and regulations thereunder. As a cooperative, members of our Board of Directors are nominated and elected by our members. To ensure geographic representation of our members, the Board of Directors represents eight regions in which our members are located. The members in each region nominate and elect the number of directors for that region as set forth in our bylaws. To be eligible for service as a director, a nominee must among other things, (i) be an active farmer or rancher, (ii) be a member of CHS or a Cooperative Association Member and (iii) reside in the geographic region from which he or she is nominated. Neither management nor the incumbent directors have any control over the nominating process for directors. Because of the nomination procedure and the election process, we cannot ensure that an elected director will be an "audit committee financial expert.” However, many of our directors, including all of the Audit Committee members, are financially sophisticated and have experience or background in which they have had significant financial oversight responsibilities. The current Audit Committee includes directors who have served as presidents or chairmen of local cooperative association boards. Members of the Board of Directors, including the Audit Committee, also operate large commercial enterprises requiring expertise in all areas of management, including financial oversight.

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ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Compensation

Overview

This Compensation Discussion and Analysis describes the material elements of compensation awarded to each of the following executive officers (our "Named Executive Officers") for fiscal 2017, which ran from September 1, 2016, through August 31, 2017:



Jay Debertin	President and Chief Executive Officer
Timothy Skidmore	Executive Vice President and Chief Financial Officer
Shirley Cunningham	Executive Vice President, Ag Business and Enterprise Strategy
James Zappa	Executive Vice President and General Counsel
Darin Hunhoff	Executive Vice President, Energy and Foods
Carl Casale	Former President and Chief Executive Officer

Changes to our Named Executive Officers during fiscal 2017 included the appointment of Jay Debertin as President and Chief Executive Officer, and the addition of Darin Hunhoff, our Executive Vice President, Energy and Foods. Carl Casale, our former President and Chief Executive Officer, left CHS on May 22, 2017.

CHS is an organization that exists to, among other things, help our owners grow. CHS compensation programs are designed to attract, retain and reward the executives who carry out this promise, and align them around attainment of CHS short- and long-term success.

This section outlines the compensation and benefit programs as well as the materials and factors used to assist us in making compensation decisions.

Compensation Philosophy and Objectives

The Governance Committee of our Board of Directors oversees the administration of, and the fundamental changes to, our executive compensation and benefits programs. The primary principles and objectives in compensating our executive officers include:


•	Attract and retain exceptional talent who meet our leadership expectations and are engaged and committed to the long-term success of CHS, by providing market competitive compensation and benefit programs


•	Align executive rewards to quantifiable annual and long-term performance goals that drive enterprise results and provide competitive returns to our member owners


•	Emphasize pay for performance by providing a total direct compensation mix of fixed and variable pay that is primarily weighted on annual and long-term incentives, in order to reward annual and sustained performance over the long term


•	Ensure compliance with government mandates and regulations

There are no material changes anticipated to our compensation philosophy or objectives for fiscal 2018.

Components of Executive Compensation and Benefits

Our executive compensation programs are designed to attract and retain highly qualified executives and to motivate them to optimize member-owner returns by achieving specified goals. The compensation program links executive compensation directly to our annual and long-term financial performance. A significant portion of each executive’s compensation is dependent upon meeting financial goals and a smaller portion is linked to individual performance objectives.

Each year, the Governance Committee of our Board of Directors reviews our executive compensation policies with respect to the correlation between executive compensation and the creation of member-owner value, as well as the

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competitiveness of our executive compensation programs. The Governance Committee, with input from a third-party consultant if necessary, determines what, if any, changes are appropriate to our executive compensation programs, including the incentive plan goals applicable to our Named Executive Officers under the incentive compensation plans to which they and other employees are eligible. The third-party consultant is chosen and hired directly by the Governance Committee to provide guidance regarding market competitive levels of base pay, annual variable pay and long-term incentive pay, as well as market competitive allocations between base pay, annual variable pay and long-term incentive pay for our Chief Executive Officer (CEO). The data is shared with our Board of Directors, which makes final decisions regarding our CEO’s base bay, annual incentive pay and long-term incentive pay, as well as the allocation of compensation between base pay, annual incentive pay and long-term incentive pay. There are no formal policies for allocation between long-term and short-term compensation, other than the intention of being competitive with the external compensation market for comparable positions and being consistent with our compensation philosophy and objectives. The Governance Committee recommends to our Board of Directors salary actions relative to our CEO and approves annual and long-term incentive CEO incentive awards based on performance of the Company compared to the financial targets and, as applicable, individual performance. In turn, our Board of Directors communicates this pay information to our CEO. Our CEO is not involved with the selection of the third-party consultant and does not participate in, or observe, Governance Committee meetings that concern CEO compensation matters. Based on a review of compensation market data provided by our human resources department (survey sources and pricing methodology are explained below under “Components of Compensation”), with input from a third-party consultant if necessary, our CEO decides base compensation levels for the other Named Executive Officers, recommends for Board of Directors approval the annual and long-term incentive pay plans applicable to the other Named Executive Officers (and other employees) and communicates base and incentive compensation pay to the other Named Executive Officers. The day-to-day design and administration of compensation and benefit plans are managed by our human resources, finance and legal departments.

We intend to preserve the deductibility, under the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), of compensation paid to our executive officers while maintaining compensation programs to attract and retain highly qualified executives in a competitive environment.

In this Compensation Discussion and Analysis, the related compensation tables and the accompanying narratives, all references to a given year refer to our fiscal year ending on August 31 of that year.

Components of Compensation

Our executive compensation and benefits program consists of seven components. Each component is designed to be competitive within the executive compensation market. In determining competitive compensation levels, we analyze information from independent compensation surveys, which include information regarding comparable industries, markets, revenues and companies that compete with us for executive talent. The surveys used for this analysis in fiscal 2017 included a combination of the following sources: AonHewitt Total Compensation Measurement, Hay Group General Market Executive Report, Mercer Benchmark Database Executive Compensation Survey and Towers Watson CDB Executive Compensation Survey Report. The data extracted from these surveys includes median market rates for base salary, annual incentive, total cash compensation and total direct compensation. Companies included in the surveys vary by industry, revenue and number of employees, and represent both public and private ownership, as well as non-profit, government and mutual organizations. Compensation paid by a group of industry specific peer companies, which group includes 18 private, public and cooperative organizations in the agronomy, energy, food and grain industries, is also considered when making compensation decisions. The emphasis of our executive compensation package is weighted more on variable pay through annual variable pay and long-term incentive awards. This is consistent with our compensation philosophy of emphasizing a strong link between pay, employee performance and business goals to foster a clear line-of-sight and strong commitment to CHS short-term and long-term success, and also aligns our programs with general market practices. The goal is to provide our executives with an overall compensation package that is competitive in comparable industries, companies and markets. We target the market median for base pay, target total cash and target total direct compensation, and 75th percentile for total direct compensation for above market performance.

For fiscal 2017, base pay was near the market median, and total cash compensation and total direct compensation were each more than 30% below the market median. These lower actual total cash and total direct compensation levels occurred because only the threshold level award was earned under the CHS Annual Variable Pay Plan (the "Annual Variable Pay Plan" or "AVP") and Profit Sharing Plan, and no awards were earned under the CHS Long Term Incentive Plan (the "LTIP") for the 2015-2017 performance period.

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The following table presents a more detailed breakout of each compensation element:



P ay Element	D efinition of Pay Element	P urpose of Pay Element
Base Pay	Competitive base level of compensation provided relative to skills, experience, knowledge and contributions	• Provides the fundamental element of compensation for carrying out duties of the job
Annual Variable Pay	Broad-based employee short-term performance based variable pay incentive for achieving predetermined annual financial, individual and, for purposes of fiscal 2017 only, enterprise non-financial performance goals	• Provides a direct link between pay and annual business objectives • Pay for performance to motivate and encourage the achievement of critical business initiatives • Encourages proper expense control and containment
Profit Sharing	Broad-based employee short-term performance based variable pay incentive for achieving predetermined annual financial and, for purposes of fiscal 2017 only, enterprise non-financial performance goals	• Provides a direct link between employee pay and CHS profitability
Long-Term Incentive Plans	Long-term performance based incentive for senior management to achieve predetermined triennial return on adjusted equity performance goals	• Provides a direct link between senior management pay and long-term strategic business objectives • Aligns management and member-owner interests • Encourages retention of key management
Retirement Benefits	Retirement benefits under the qualified retirement plans are identical to the broad-based retirement plans generally available to all full-time employees	• These benefits are a part of our broad-based employee total rewards program designed to attract and retain quality employees
	The supplemental plans include non-qualified retirement benefits that restore qualified benefits contained in our broad-based plans for employees whose retirement benefits are limited by salary caps under the Internal Revenue Code. In addition, the plans allow participants to voluntarily defer receipt of a portion of their income	• These benefits are provided to attract and retain senior managers with total rewards programs that are competitive with comparable companies
Health & Welfare Benefits	Medical, dental, vision, life insurance and short-term disability benefits generally available to all full-time employees. Certain officers, including our Named Executive Officers, also are eligible for executive long-term disability benefits	• With the exception of executive long-term disability, these benefits are a part of our broad-based employee total rewards program designed to attract and retain quality employees
Additional Benefits	Additional benefits provided to certain officers, including our Named Executive Officers	• These benefits are provided as part of an overall total rewards package that strives to be competitive with comparable companies and retain individuals who are critical to CHS

Explanation of Ratio of Salary and Bonus to Total Compensation

The structure of our executive compensation package is focused on a suitable mix of base pay, annual variable pay and long-term incentive awards in order to encourage executive officers and employees to strive to achieve goals that benefit our owners’ interests over the long term, and to better align our programs with general market practices.

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Fiscal 2017 Executive Compensation Mix at Target

The charts below illustrate the mix of base salary, annual variable pay at target performance, and long-term incentive compensation at target performance for fiscal 2017 for our CEO and the other Named Executive Officers as a group.

Base Pay:

Base salaries of our Named Executive Officers represent a fixed form of compensation paid on a semi-monthly basis. The base salaries are generally set at the median level of market data collected through our benchmarking process against other equivalent positions of comparable companies. The individual's actual salary relative to the market median is based on a number of factors, which include, but are not limited to, scope of responsibilities and individual experience.

Base salaries for our Named Executive Officers are reviewed on an annual basis or at the time of significant changes in scope and level of responsibilities. Changes in base salaries are determined through review of competitive market data, as well as individual performance and contribution. Changes are not governed by pre-established weighting factors or merit metrics.

The CEO is responsible for this process for the other Named Executive Officers. The Governance Committee is responsible for this process for the CEO.

Upon electing Mr. Debertin to President and CEO in May 2017, the Board of Directors established his base pay level based on consideration of the significant increase in the scope and importance of his responsibilities, as well as competitive pay for the CEO position. Taking the foregoing into account, the Board of Directors increased Mr. Debertin's base salary by 70% upon his election to President and CEO, from his previous position of Executive Vice President and Chief Operating Officer of Energy and Foods. Mr. Skidmore, Ms. Cunningham and Mr. Zappa were given base salary increases to ensure their base pay is commensurate with their responsibilities, skills, contributions and competitive pay range. Specifically, in fiscal 2017, their base salary increases were 20%, 3% and 10%, respectively. Mr. Hunhoff was promoted to the position of Executive Vice President, Energy and Foods in May 2017 and received a base pay increase of 20% to reflect to his new responsibilities, compared to his previous position of Senior Vice President and Chief Strategy Officer.

Annual Variable Pay:

Named Executive Officers are covered by the same broad-based Annual Variable Pay Plan as other employees, and based on the plan provisions, when they retire they receive awards prorated to the period of time eligible. Each Named Executive Officer was eligible to participate in the AVP for fiscal 2017. Target AVP award levels were set with reference to competitive market compensation levels and were intended to motivate our executives by providing annual variable pay awards for the achievement of predetermined goals. Our AVP program for fiscal 2017 was based on enterprise-level financial performance and specific management business objectives with actual payout dependent on CHS achieving pre-determined enterprise-level financial performance targets and non-financial individual performance goals. The financial performance components included Return on Adjusted Equity ("ROAE") and Return on Assets ("ROA") targets for CHS at the enterprise level. The threshold, target and maximum ROAE and ROA targets for fiscal 2017 are set forth in the table below. The management business objectives include individual performance against specific goals such as business profitability, strategic initiatives or talent development. In conjunction with the annual performance appraisal process of our CEO, our Board of Directors reviews the individual non-financial goals, and in turn, determines and approves this portion of the annual variable pay award based upon completion or partial completion of the previously specified goals and principal accountabilities for our

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CEO. Likewise, our CEO uses the same process for determining individual goal attainment for the other Named Executive Officers. For purposes of the fiscal 2017 AVP, an additional component was established that could result in a threshold level payout even if the ROAE target was not met, but certain performance management and controllable internal expense targets were met. Specifically, the performance management target was for 95% of all exempt-level employees to have performance assessment and performance goal setting plans completed in the Company’s online performance management system and the controllable expense target was that total controllable sales, general and administrative expenses for fiscal 2017 would be at or below the budgeted amount for these expenses.

CHS financial performance goals and award opportunities under our fiscal 2017 Annual Variable Pay Plan were as follows:



P erformance Level	CHS Company Performance Goal	CHS Company Performance Goal	Percent of Target Award
Maximum	11.5% Return on Adjusted Equity	11.5% Return on Assets	200%
Target	9.5% Return on Adjusted Equity	9.5% Return on Assets	100%
Threshold	7.5% Return on Adjusted Equity	7.5% Return on Assets	50%
Below Threshold	<7.5% Return on Adjusted Equity	<7.5% Return on Assets	0%

ROAE is a measurement of our profitability and is calculated by dividing adjusted net income (earnings) by adjusted equity. To determine the equity and earnings adjustments, we subtract preferred stock dividends (paid on beginning of the fiscal year preferred stock) from earnings, and reduce CHS equity by the beginning of the fiscal year preferred stock on the balance sheet. Earnings are subject to one-time exclusions or inclusions in any given fiscal year.

ROA is a measurement of how well we use our assets to generate earnings and is calculated by dividing operating income by total assets minus current liabilities. Net assets is measured at the beginning of the fiscal year.

Our Board of Directors approved the ROAE and ROA performance targets for the fiscal 2017 AVP and determined our CEO’s individual goals. The weighting of our CEO’s goals for fiscal 2017 was 60% CHS total company ROAE, 20% CHS total company ROA, and 20% principal accountabilities and individual goals. Our CEO determined non-financial individual goals for the other Named Executive Officers. The weighting of goals for the other Named Executive Officers for fiscal 2017 was 60% CHS total company ROAE, 20% CHS total company ROA, and 20% individual goals.

For fiscal 2017, CHS achieved an ROAE of 1%. Accordingly, because the 7.5% threshold ROAE was not achieved, no awards relating to fiscal 2017 were earned according to the fiscal 2017 AVP’s primary component. However, as described above, for fiscal 2017, an additional award component was established for the AVP based on performance management and internal controllable expense spending targets. These targets were met for fiscal 2017, and, accordingly, each of the Named Executive Officers other than Mr. Casale, who left CHS in May 2017, received a threshold level award for all three goal components (ROAE, ROA and Individual) under the AVP.

Annual variable pay earned awards under the Annual Variable Pay Plan for fiscal 2017 for the Named Executive Officers are as follows:



Jay Debertin	$	862,500
Timothy Skidmore	$	207,550
Shirley Cunningham	$	216,300
James Zappa	$	164,780
Darin Hunhoff	$	175,000
Carl Casale	$	—

Effective for fiscal 2018, the Annual Variable Pay Plan ROAE performance metric will be replaced with a Return on Invested Capital ("ROIC") metric. ROIC is defined as net operating profit after tax, divided by the sum of funded debt and

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equity, where “funded debt” is defined as the average of the funded debt at the beginning and end of the fiscal year and “equity” is defined as equity at the beginning of the fiscal year. Using ROIC provides a clear picture of how efficiently CHS uses all of its capital (owners’ equity, debt and preferred stock) and the level of returns on that capital. Using ROIC will increase our executives’ focus on generating the best return possible on all of our capital deployed in the business. For fiscal 2018, ROA will continue to be utilized as the second financial metric under the Annual Variable Pay Plan.

Profit Sharing:

Each Named Executive Officer is eligible to participate in our Profit Sharing Plan applicable to other employees. The purpose of the Profit Sharing Plan is to provide a direct link between employee pay and our profitability. Annual profit sharing contributions are calculated as a percent of base pay and annual variable pay (total earnings) and are made to the CHS 401(k) Plan (the 401(k) Plan) account and Deferred Compensation Plan account of each Named Executive Officer. The levels of profit sharing awards vary in relation to the level of CHS ROAE achieved and are displayed in the following table:



Return On Adjusted Equity		Profit Sharing Award
11.5%		5%
10.5%		4%
9.5%		3%
8.5%		2%
7.5%		1%

In addition, for purposes of the fiscal 2017 profit sharing plan year, employees were eligible to earn a 1% profit sharing award if our enterprise-level ROAE performance was less than 7.5%, provided the performance management and controllable internal expense targets, as described under the heading “Annual Variable Pay” above, were achieved.

In fiscal 2017, the minimum 7.5% ROAE threshold was not achieved, however the two enterprise objectives mentioned above were met. Accordingly, a one percent profit sharing award was earned by all of the Named Executive Officers, other than Mr. Casale, who left CHS in May 2017.

Effective for fiscal 2018, the Profit Sharing Plan goals will be based on an ROIC performance metric, as described under the heading “Annual Variable Pay” above.

Long-Term Incentive Plans:

Each Named Executive Officer is eligible to participate in our LTIP. The purpose of the LTIP is to align long-term results with long-term performance goals, encourage our Named Executive Officers to maximize long-term value for our owners, and retain key executives. The LTIP consists of three-year performance periods to ensure consideration is made for our long-term sustainability with a new performance period beginning every year. Our Board of Directors approves the LTIP goals.

Awards from the LTIP are contributed to the CHS Deferred Compensation Plan (the "Deferred Compensation Plan") after the end of each performance period. These awards vest over an additional 28-month period following the performance period end date. The extended earning and vesting provisions of the LTIP are designed to help us retain key executives. Participants who leave CHS prior to retirement for reasons other than death or disability forfeit all unearned and unvested LTIP award balances. Participants who meet retirement criteria, die or become disabled receive prorated awards following the LTIP rules. Like the Annual Variable Pay Plan, award levels for the LTIP are set with regard to competitive considerations.

For the 3-year LTIP period ending in fiscal 2017, the LTIP performance measure was based upon our ROAE during the period. Award opportunities for the fiscal 2015-2017 LTIP are expressed as a percentage of a participant’s average base salary for the three-year performance period. We must meet a three-year period threshold level of ROAE performance in order for any participant to earn an award payout under the 2015-2017 LTIP. As indicated in the below table, the threshold, target, maximum and superior performance maximum ROAE goals for the fiscal 2015-2017 performance period were 8%, 10%, 14% and 20%, respectively.

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P erformance Level	CHS Three Year ROAE	Percent of Target Award
Superior Performance Maximum	20%	400%
Maximum	14%	200%
Target	10%	100%
Threshold	8%	50%
Below Threshold	<8%	0%

For the fiscal 2015-2017 performance period, CHS achieved a three-year ROAE result of 5.5%. Because the 8.0% threshold ROAE was not achieved with respect to the fiscal 2015-2017 performance period, no awards relating to the fiscal 2015-2017 performance period were earned by any of the Named Executive Officers under the LTIP.

Details for fiscal 2017 awards associated with the fiscal 2017-2019 LTIP performance period are provided in the “2017 Grants of Plan-Based Awards” table.

Effective for the fiscal 2018-2020 performance period, the LTIP ROAE performance metric will be replaced with an ROIC performance metric. ROIC is defined as net operating profit after tax, divided by the sum of Funded Debt and Equity. For purposes of the fiscal 2018-2020 performance period, the term “Funded Debt” means the average of the funded debt at each of the beginning of fiscal year 2018 and the end of fiscal year 2020 and the term “Equity” means equity at the beginning of fiscal year 2018.

Other Compensation:

To preserve key leadership continuity and bench strength, as well as a total direct compensation opportunity amount that is competitive to market, in November 2017, the Board of Directors approved a retention award for certain senior officers of the company, including each of the Named Executive Officers who both were active participants in the 2015-2017 LTIP, and who were active employees of the company on the date the award was approved. The potential award value is the percentage of base salary used for the 2015-2017 LTIP awards at the Threshold level, based on the participant’s job level as of the date the retention award was granted, and will be earned only if a participant continues active employment through January 1, 2020, or meets the limited pro ration criteria provided in the award.

Retirement Benefits:

We provide the following retirement and deferral programs to Named Executive Officers:


•	CHS Inc. Pension Plan


•	CHS Inc. 401(k) Plan


•	CHS Inc. Supplemental Executive Retirement Plan


•	CHS Inc. Deferred Compensation Plan

CHS Inc. Pension Plan

The CHS Inc. Pension Plan (the "Pension Plan") is a tax-qualified defined benefit pension plan. All Named Executive Officers participate in the Pension Plan. A Named Executive Officer is fully vested in the Pension Plan after three years (depending on hire date) of vesting service. The Pension Plan provides for a lump sum payment of the participant’s account balance once the Named Executive Officer reaches normal retirement age (or, alternatively, for a monthly annuity for the Named Executive Officer’s lifetime if elected by the Named Executive Officer). Compensation and benefits are limited based on limits imposed by the Internal Revenue Code. The normal form of benefit for a single Named Executive Officer is a life annuity, and for a married Named Executive Officer the normal form of benefit is a 50% joint and survivor annuity. Other annuity forms are also available on an actuarial equivalent basis.

A Named Executive Officer’s benefit under the Pension Plan depends on pay credits to their account, which are based on the Named Executive Officer’s total salary and annual variable pay for each year of employment, date of hire, age at date of hire and the length of service, and investment credits, which are computed using the interest crediting rate and the Named Executive Officer’s account balance at the beginning of the plan year.

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The amount of pay credits added to a Named Executive Officer’s account each year is a percentage of the Named Executive Officer’s base salary and annual variable pay plus compensation reduction pursuant to the 401(k) Plan, and any pretax contribution to any of our welfare benefit plans, paid vacations, paid leaves of absence and pay received if away from work due to a sickness or injury. The pay credits percentage received is determined on a yearly basis, based on the years of benefit service completed as of December 31st of each year. A Named Executive Officer receives one year of benefit service for every calendar year of employment in which the Named Executive Officer completed at least 1,000 hours of service.

Pay credits are earned according to the following schedule:

Regular Pay Credits



Y ears of Benefit Service	Pay Below Social Security Taxable Wage Base	Pay Above Social Security Taxable Wage Base
1 - 3 years	3%	6%
4 - 7 years	4%	8%
8 - 11 years	5%	10%
12 - 15 years	6%	12%
16 years or more	7%	14%

Mid Career Pay Credits

Employees hired after age 40 qualify for the following minimum pay credit:



	Minimum Pay Credit
A ge at Date of Hire	Pay Below Social Security Taxable Wage Base	Pay Above Social Security Taxable Wage Base
Age 40 - 44	4%	8%
Age 45 - 49	5%	10%
Age 50 or more	6%	12%

Investment Credits

We credit a Named Executive Officer’s account at the end of the calendar year with an investment credit based on the balance at the beginning of the year. The investment credit is based on the average return for one-year U.S. Treasury bills for the preceding 12-month period. The minimum interest rate under the Pension Plan is 4.65% and the maximum is 10%.

CHS Inc. 401(k) Plan

The 401(k) Plan is a tax-qualified defined contribution retirement plan. Most full-time, non-union CHS employees are eligible to participate in the 401(k) Plan, including each Named Executive Officer. Participants may contribute between 1% and 50% of their pay on a pretax basis. We match 100% of the first 1% and 50% of the next 5% of pay contributed each year (maximum 3.5%). Our Board of Directors may elect to reduce or eliminate matching contributions for any year or any portion thereof. Participants are 100% vested in their own contributions and are fully vested after two years of service in matching contributions made on the participant’s behalf by us.

Non-participants are automatically enrolled in the plan at a 3% contribution rate and, effective each January 1, the participant’s contribution will be automatically increased by 1%. This escalation will stop once the participant’s contribution reaches 10%. The participant may elect to cancel or change these automatic deductions at any time.

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CHS Inc. Supplemental Executive Retirement Plan and CHS Inc. Deferred Compensation Plan

Because the Internal Revenue Code limits the benefits that may be paid from the Pension Plan and the 401(k) Plan, the CHS Inc. Supplemental Executive Retirement Plan (the "SERP") and the Deferred Compensation Plan were established to provide certain employees participating in the qualified plans with supplemental benefits such that, in the aggregate, they equal the benefits they would have been entitled to receive under the qualified plan had these limits not been in effect. The SERP also includes compensation deferred under the Deferred Compensation Plan that is excluded under the qualified retirement plan. All Named Executive Officers participate in the SERP. Participants in the plans are select management or highly compensated employees who have been designated as eligible by our CEO to participate.

Compensation includes total salary and annual variable pay without regard to limitations on compensation imposed by the Internal Revenue Code. Company contributions under the Pension Plan and 401(k) Plan are not eligible for pay credits.

Certain Named Executive Officers may have accumulated non-qualified plan balances or benefits that have been carried over from predecessor companies as a result of past mergers and acquisitions. Benefits from the SERP are primarily funded in a rabbi trust, with a balance at August 31, 2017, of $29.6 million. Benefits from the plan do not qualify for special tax treatment under the Internal Revenue Code.

The Deferred Compensation Plan allows eligible Named Executive Officers to voluntarily defer receipt of up to 75% of their base salary and up to 100% of their annual variable pay. The election must occur prior to the beginning of the calendar year in which the compensation will be earned. During the year ended August 31, 2017, all of the Named Executive Officers were eligible to participate in the Deferred Compensation Plan. Mr. Skidmore and Ms. Cunningham participated in the elective portion of the Deferred Compensation Plan.

Benefits from the Deferred Compensation Plan are primarily funded in a rabbi trust, with a balance as of August 31, 2017, of $132.1 million. Benefits from the plan do not qualify for special tax treatment under the Internal Revenue Code.

Health & Welfare Benefits:

Like our other employees, each of the Named Executive Officers is entitled to receive benefits under our comprehensive health and welfare program. Like non-executive full-time employees, participation in the individual benefit plans is based on each Named Executive Officer’s annual benefit elections and varies by individual.

Medical Plans

Named Executive Officers and their dependents may participate in our medical plan on the same basis as other eligible full-time employees. The plan provides each Named Executive Officer an opportunity to choose a level of coverage and coverage options with varying deductibles and co-pays in order to pay for hospitalization, physician and prescription drugs expenses. The cost of this coverage is shared by us and the covered Named Executive Officer.

Dental, Vision, and Hearing Plan

Named Executive Officers and their dependents may participate in our dental, vision, and hearing plan on the same basis as other eligible full-time employees. The plan provides coverage for basic dental, vision and hearing expenses. The cost of this coverage is shared by us and the covered Named Executive Officer.

Life, AD&D and Dependent Life Insurance

Named Executive Officers and their dependents may participate in our basic life, optional life, accidental death and dismemberment (AD&D) and dependent life plans on the same basis as other eligible full-time employees. The plans allow Named Executive Officers an opportunity to purchase group life insurance on the same basis as other eligible full-time employees. Basic life insurance equal to one times pay will be provided at our expense on the same basis as other eligible full-time employees. Named Executive Officers can choose various coverage levels of optional life insurance at their own expense on the same basis as other eligible full-time employees.

Short- and Long-term Disability

Named Executive Officers participate in our Short-Term Disability Plan (STD) on the same basis as other eligible full-time employees. The Named Executive Officers also participate in an executive Long-Term Disability Plan (LTD). These plans

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replace a portion of income in the event that a Named Executive Officer is disabled under the terms of the plan and is unable to work full-time. The cost of STD and LTD coverage is paid by CHS.

Flexible Spending Accounts/Health Savings Accounts/Health Reimbursement Accounts

Named Executive Officers may participate in our Flexible Spending Account (FSA), Health Savings Account (HSA) or Health Reimbursement Account (HRA) on the same basis as other eligible full-time employees. The FSA and HSA provide Named Executive Officers an opportunity to pay for certain eligible medical expenses on a pretax basis. The HRA provides Named Executive Officers an opportunity to pay for certain eligible medical expenses incurred during the year on a pretax basis. Contributions to the FSA and HSA are made by the Named Executive Officer. Contributions to the HRA are made by us and are based on the medical option selected and range between $400 and $800.

Travel Assistance Program and Identity Theft Protection

Like other non-executive full-time employees, each of the Named Executive Officers is covered by our travel assistance program and identity theft protection program. The travel assistance program provides accidental death and dismemberment protection should a covered injury or death occur while on a business trip. The identity theft protection program provides credit monitoring and restoration services to protect against identity theft.

Additional Benefits:

Certain benefits such as executive physical and limited financial planning assistance are available to our Named Executive Officers. These are provided as part of an overall total rewards package that strives to be competitive with comparable companies and retain individuals who are critical to CHS.

Agreements with Named Executive Officers

On May 22, 2017, Mr. Debertin was elected as our President and CEO. In connection with Mr. Debertin’s election as President and CEO, the Company and Mr. Debertin entered into an employment agreement, dated as of May 22, 2017 (the Employment Agreement).

The Employment Agreement supersedes previous agreements we had with Mr. Debertin, including the April 6, 2015, Supplemental Project Milestone Incentive Plan with Mr. Debertin (the Supplemental Plan) pursuant to which Mr. Debertin was eligible to receive a cash award of up to $120,000 for each of the years ending August 31, 2015, 2016, 2017, and 2018, depending upon achievement of certain milestones with respect to new projects.

Pursuant to the terms of the Employment Agreement, Mr. Debertin is entitled to, among other things:


•	An annual base salary of $1,150,000, subject to increase by our Board of Directors from time to time;


•	A target annual incentive compensation award, beginning with fiscal 2017, of 150% of his base salary with a maximum potential annual incentive compensation award of 300% of his base salary, based on the achievement of performance targets set by our Board of Directors; and


•	A target long-term incentive compensation award of 150% of his average base salary during the three-year performance period applicable to that award opportunity, with a maximum superior performance potential long-term incentive compensation award of 500% of his average base salary during the three-year performance period applicable to that award.

The Employment Agreement provides that in the event of a restatement of our financial results due to material noncompliance with financial reporting requirements, if our Board of Directors determines in good faith that any compensation paid (or payable but not yet paid) to Mr. Debertin was awarded or determined based on that material noncompliance, then we are entitled to recover from him (or to reduce compensation determined but not yet paid) all compensation based on the erroneous financial data in excess of what would have been paid or been payable to him under the restatement.

The severance pay and benefits to which Mr. Debertin would be entitled if we terminated his employment without cause or, if he terminated his employment for “good reason” are described below under “Post Employment”.

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In connection with the end of Mr. Casale’s employment with the Company, on May 22, 2017, the Company and Mr. Casale entered into a Separation Agreement, dated May 22, 2017 (the "Separation Agreement"). The Separation Agreement provides for the following severance pay and benefits, which were previously provided for in Mr. Casale’s September 1, 2016, Employment Agreement: (1) payment of 200% of Mr. Casale’s base salary, in the amount of $2,102,000, and 200% of Mr. Casale’s target annual incentive compensation award, in the amount of $3,153,000, to be paid on a determined schedule over two years if Mr. Casale is in compliance with the confidentiality, non-solicitation, non-competition, cooperation and non-disparagement covenants under the Separation Agreement, which are described below; and (2) welfare benefit continuation for 24 months. The Separation Agreement also provides for Mr. Casale to be paid $2,409,079 in recognition of earned but unvested long-term incentive compensation that was forfeited due to the end of his employment with CHS prior to vesting. Under the Separation Agreement, Mr. Casale is subject to two-year non-competition and non-solicitation covenants, as well as customary confidentiality, cooperation and non-disparagement covenants.

Mr. Skidmore, our Executive Vice President and Chief Financial Officer, joined us in August 2013 and the terms of his employment provided for certain payments to him in respect of compensation earned from his former employer during past periods but forfeited in order to accept employment with us due to vesting requirements and other restrictions. Specifically, Mr. Skidmore was entitled to receive three equal payments of $180,000 for forfeited restricted stock and three equal payments of $55,163 for forfeited incentives, which was paid as follows: the first payments within 30 days of his start date; the second payments within 30 days after the first anniversary of his start date and the third payments within 30 days after the second anniversary of his start date.

Mr. Zappa, our Executive Vice President and General Counsel, joined us in April 2015 and the terms of his employment provided for certain payments to him in respect of compensation earned from his former employer during past periods but forfeited in order to accept employment with us due to vesting requirements and other restrictions. Specifically, Mr. Zappa was entitled to receive three payments on the following schedule: $101,667 in April 2015; $101,667 in April 2016; and $101,667 in April 2017.

Shareholder Advisory Votes on Executive Compensation

We are not required to, and do not, conduct shareholder advisory votes on executive compensation under section 14A of the Securities Exchange Act of 1934.

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Summary Compensation Table



N ame and Principal Position	Year	Salary ($) 1,2,3		Bonus ($) 2,4,5,6,7		Non-Equity Incentive Plan Compensation($) 1,2,8,9		Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) 2,10		All Other Compensation($) 2,11-18		Total ($) 2
Jay Debertin President and Chief Executive Officer	2017	$	815,365	$	—	$	862,500	$	293,497	$	41,611	$	2,012,973
	2016	667,242		—		789,871		722,208		156,018		2,335,339
	2015	647,380		—		2,771,970		339,322		129,767		3,888,439
Timothy Skidmore Executive Vice President and Chief Financial Officer	2017	523,500		100,000		207,550		95,952		30,114		957,116
	2016	487,135		235,163		576,744		193,174		106,614		1,598,830
	2015	472,770		55,163		1,936,687		145,857		115,754		2,726,231
Shirley Cunningham Executive Vice President, Ag Business and Enterprise Strategy	2017	612,000		—		216,300		112,784		37,576		978,660
	2016	593,983		—		683,022		235,579		117,214		1,629,798
	2015	576,300		383,000		2,242,420		159,060		106,827		3,467,607
James Zappa Executive Vice President and General Counsel	2017	467,223		201,667		164,780		69,638		23,142		926,450
	2016	423,667		101,667		508,961		140,794		96,356		1,271,445

Darin Hunhoff Executive Vice President, Energy and Foods	2017	443,670		100,000		175,000		75,198		18,030		811,898


Carl Casale Former President and Chief Executive Officer	2017	902,516		—				218,833		1,805,399		2,926,748
	2016	1,040,667		—		2,200,094		748,200		302,659		4,291,620
	2015	1,010,000		—		7,243,499		486,832		294,525		9,034,856

_______________________________________

(1)

Amounts reflect the gross salary and non-equity incentive plan compensation, as applicable, and include any applicable deferrals. Mr. Skidmore deferred $52,350 in fiscal 2017, $249,224 in fiscal 2016 and $241,947 in fiscal 2015; Mr. Debertin deferred $893,546 in fiscal 2016 and $883,906 in fiscal 2015; and Ms. Cunningham deferred $100,000 in fiscal 2017, $852,078 in fiscal 2016 and $83,333 in fiscal 2015.


(2)	Information on Mr. Zappa includes compensation beginning in fiscal 2016, the first year in which he became a Named Executive Officer, and information on Mr. Hunhoff includes compensation beginning in fiscal 2017, the first year in which he became a Named Executive Officer.


(3)	Salary for Mr. Casale includes base pay and accrued paid time off that was paid upon his departure.

(4)

Includes payments to Mr. Skidmore of $100,000 in fiscal 2017, for providing additional strong leadership of and significant time commitment to the ongoing management of multiple business and financial challenges, all in addition to performing his regular Executive Vice President and Chief Financial Officer role, and $235,163 in fiscal 2016 and $55,163 in fiscal 2015, in each case, covering earned and forfeited compensation from previous employment.


(5)	Includes payment of $383,000 in fiscal 2015 to Ms. Cunningham covering earned and forfeited compensation from previous employment.

(6)

Includes payments to Mr. Zappa of $100,000, for providing additional strong leadership of and significant time commitment to the ongoing management of multiple business and governance challenges, all in addition to performing his regular Executive Vice President and General Counsel role, and $101,667, covering earned and forfeited compensation from previous employment, in 2017, and $101,667 in fiscal 2016, covering earned and forfeited compensation from previous employment.

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(7)	Includes payment to Mr. Hunhoff of $100,000 in fiscal 2017 for taking on additional leadership roles in addition to performing his new role as Executive Vice President, Energy and Foods.


(8)	Amounts include annual variable pay awards and Long-term incentive awards.

The actual annual variable pay award value was as follows in fiscal 2017, 2016 and 2015, respectively: Mr. Debertin, $862,500, $0 and $915,217; Mr. Skidmore, $207,550, $0 and $668,367; Ms. Cunningham, $216,600, $0 and $786,214; Mr. Zappa, $164,780 and $0 (Mr. Zappa was not a Named Executive Officer in fiscal 2015); Mr. Hunhoff, $175,000 (Mr. Hunhoff was not a Named Executive Officer in fiscal 2016 or 2015); and Mr. Casale $0, $0 and $2,502,118.

The actual long-term incentive award value was as follows in fiscal 2017, 2016 and 2015, respectively: Mr. Debertin, $0, $789,871 and $1,736,753; Mr. Skidmore, $0, $576,744 and $1,268,320; Ms. Cunningham, $0, $683,022 and $1,456,205; Mr. Zappa, $0 and $508,961 (Mr. Zappa was not a Named Executive Officer in fiscal 2015); Mr. Hunhoff, $0 (Mr. Hunhoff was not a Named Executive Officer in fiscal 2016 or 2015); and Mr. Casale, $0, $2,200,094 and $4,741,381.


(9)	Includes payment of $120,000 in fiscal 2015 to Mr. Debertin under the Supplemental Plan, but excludes award of $120,000 that was earned, but voluntarily declined, by Mr. Debertin in fiscal 2016 under the Supplemental Plan.


(10)	This column represents both changes in pension value and above-market earnings on deferred compensation. Change in pension value is the aggregate change in the actuarial present value of the Named Executive Officer’s benefit under their retirement program and nonqualified earnings, if applicable.

The aggregate change in the actuarial present value was as follows in fiscal 2017, 2016 and 2015, respectively: Mr. Debertin, $175,298, $617,456 and $244,472; Mr. Skidmore, $79,807, $176,801 and $136,385; Ms. Cunningham, $80,332, $217,137 and $159,060; Mr. Zappa, $69,638 and $140,794 (Mr. Zappa was not a Named Executive Officer in fiscal 2015); Mr. Hunhoff, $68,620 (Mr. Hunhoff was not a Named Executive Officer in fiscal 2016 and 2015); and Mr. Casale, $125,399, $626,792 and $374,796.

Above-market earnings represent earnings exceeding 120% of the Federal Reserve long-term rate as determined by the Internal Revenue Service (IRS) on applicable funds, and was as follows in fiscal 2017, 2016 and 2015, respectively: Mr. Debertin, $118,199, $104,752 and $94,850; Mr. Skidmore, $16,145, $16,373 and $9,472; Ms. Cunningham, $32,452, $18,442 and $0; Mr. Zappa, $0 and $0 (Mr. Zappa was not a Named Executive Officer in fiscal 2015); Mr. Hunhoff, $6,578 (Mr. Hunhoff was not a Named Executive Officer in fiscal 2016 or 2015); and Mr. Casale, $93,434, $121,408 and $112,036.


(11)	Amounts may include executive LTD paid by us, travel accident insurance, executive physical, contributions by us during each fiscal year to qualified and non-qualified defined contribution plans, spousal travel and financial planning.


(12)	Includes fiscal 2017 executive LTD of $3,340 for all Named Executive Officers except Mr. Casale, and fiscal 2017 executive LTD of $2,535 for Mr. Casale.


(13)	Includes fiscal 2017 employer contributions to the Deferred Compensation Plan: Mr. Debertin, $14,315; Mr. Skidmore, $7,945; Ms. Cunningham, $11,725; Mr. Zappa, $6,080; Mr. Hunhoff, $4,571; and Mr. Casale, $27,510.


(14)	Includes fiscal 2017 employer contribution to the 401(k) Plan: Mr. Debertin, $9,275; Mr. Skidmore, $9,275; Ms. Cunningham, $9,275; Mr. Zappa, $8,812; Mr. Hunhoff, $9,271; and Mr. Casale, $9,275.


(15)	Includes fiscal 2017 executive physicals for the following Named Executive Officers: Mr. Debertin, $2,721; Mr. Skidmore, $4,026; Ms. Cunningham, $4,171; Mr, Zappa, $4,409; and Mr. Casale, $4,119.


(16)	Includes fiscal 2017 executive financial planning for the following Named Executive Officers: Mr. Debertin, $820; Mr. Skidmore, $5,000; and Ms. Cunningham, $5,000.


(17)	Includes payment of $8,019 to Mr. Debertin in fiscal 2017 for reimbursement of legal services associated with the Employment Agreement.

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(18)	Includes payment to Mr. Casale in fiscal 2017 of $1,761,666 pursuant to the terms of Mr. Casale’s Separation Agreement, which includes a legal fee allowance ($10,000) and the payment of the 1st of 3 installments for base salary and target annual incentive compensation ($1,751,666).

Agreements with Named Executive Officers

On May 22, 2017, we entered an Employment Agreement with Mr. Debertin our President and Chief Executive Officer. The Employment Agreement supersedes all previous agreements we had with Mr. Debertin. The Employment Agreement clearly defines the obligations of the parties thereto with respect to employment matters, as well as the compensation and benefits to be provided to Mr. Debertin upon termination of employment.

The Employment Agreement has an initial term of three years ending on August 31, 2020, provided that beginning on August 31, 2020, and on each anniversary date thereafter, the term will be automatically renewed for an additional one-year period unless either party notifies the other in writing, at least 120 days in advance of the relevant anniversary date, of its intent not to renew the agreement for the additional one-year period.

Pursuant to the terms of the Employment Agreement, Mr. Debertin is entitled to, among other things:


•	An annual base salary of $1,150,000, subject to increase by our Board of Directors from time to time;


•	A target annual incentive compensation award, beginning with fiscal 2017, of 150% of his base salary with a maximum potential annual incentive compensation award of 300% of his base salary, based on the achievement of performance targets set by our Board of Directors; and


•	A target long-term incentive compensation award of 150% of his average base salary during the three-year performance period applicable to that award opportunity, with a maximum superior performance potential long-term incentive compensation award of 500% of his average base salary during the three-year performance period applicable to that award opportunity.

In connection with the end of Mr. Casale’s employment with the Company, on May 22, 2017, the Company and Mr. Casale entered into the Separation Agreement. Detail of Mr. Casale’s Separation Agreement are described below under the heading “Post Employment”.

Mr. Skidmore, our Executive Vice President and Chief Financial Officer, joined us in August 2013. The severance payments to which Mr. Skidmore will be entitled if we terminate his employment without cause or if he terminates his employment for “good reason” are described below under the heading “Post Employment”. Other details of Mr. Skidmore’s employment arrangement with us are described in “Compensation Discussion and Analysis” above.

Ms. Cunningham, our Executive Vice President, Ag Business and Enterprise Strategy, joined us in April 2013. The severance payments to which Ms. Cunningham will be entitled if we terminate her employment without cause or if she terminates her employment for “good reason” are described below under the heading “Post Employment”. Other details of Ms. Cunningham’s employment arrangement with us are described in “Compensation Discussion and Analysis” above.

Mr. Zappa, our Executive Vice President and General Counsel, joined us in April 2015. The severance payments to which Mr. Zappa will be entitled if we terminate his employment without cause or if he terminates his employment for “good reason” are described below under the heading “Post Employment”. Other details of Mr. Zappa’s employment arrangement with us are described in “Compensation Discussion and Analysis” above.

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2017 Grants of Plan-Based Awards

Estimated Future Payouts Under

Non-Equity Incentive Plan Awards



N ame	Grant Date	Threshold ($)		Target ($)		Maximum ($)
Jay Debertin	9-2-16 ⁽¹⁾⁽²⁾	$	235,900	$	471,800	$	943,600
	11-2-16 ⁽²⁾⁽³⁾	235,900		471,800		1,887,200
	11-2-16 ⁽⁴⁾	—		120,000		—
	5-22-17 ⁽⁵⁾	862,500		1,725,000		3,450,000
	5-22-17 ⁽⁶⁾	862,500		1,725,000		5,750,000
Timothy Skidmore	9-2-16 ⁽¹⁾	172,200		344,400		688,800
	11-2-16 ⁽³⁾	172,200		344,400		1,377,600
Shirley Cunningham	9-2-16 ⁽¹⁾	210,000		420,000		840,000
	11-2-16 ⁽³⁾	210,000		420,000		1,680,000
James Zappa	9-2-16 ⁽¹⁾	149,800		299,600		599,200
	11-2-16 ⁽³⁾	149,800		299,600		1,198,400
Darin Hunhoff	9-2-16 ⁽¹⁾⁽⁹⁾	83,000		166,000		332,000
	11-2-16 ⁽³⁾⁽⁹⁾	83,000		166,000		664,000
	5-22-17 ⁽⁷⁾	175,000		350,000		700,000
	5-22-17 ⁽⁸⁾	175,000		350,000		1,400,000
Carl Casale	9-2-16 ⁽¹⁾	656,875		1,313,750		2,627,500
	11-2-16 ⁽³⁾	788,250		1,576,500		6,306,000

_______________________________________


⁽¹⁾	Represents range of possible awards under our fiscal 2017 Annual Variable Pay Plan.


⁽²⁾	These grants were terminated when Mr. Debertin was elected President and CEO on May 22, 2017.

⁽³⁾

Represents range of possible awards under our LTIP for the fiscal 2017-2019 performance period. Goals are based on achieving a three-year ROAE of 5.5% threshold, 7.0% target and 9.0% maximum plus a potential award for superior 20% ROAE performance. Values displayed in the maximum column reflect 20% superior ROAE performance award potential. The 9.0% maximum performance award values are not listed in this table. Awards are earned over a three-year period and vest over an additional 28-month period.


⁽⁴⁾	Represents maximum fiscal 2017 annual award opportunity for Mr. Debertin under the Supplemental Plan, which Supplemental Plan and all applicable grants thereunder were terminated when Mr. Debertin was elected President and CEO on May 22, 2017.


⁽⁵⁾	Represents range of possible awards under our fiscal 2017 Annual Variable Pay Plan with respect to grants made to Mr. Debertin on May 22, 2017, at time of his promotion to President and CEO.


⁽⁶⁾	Represents range of possible awards under our LTIP for the fiscal 2017-2019 performance period with respect to grants made to Mr. Debertin on May 22, 2017, at time of his promotion to President and CEO.


⁽⁷⁾	Represents range of possible awards under our fiscal 2017 Annual Variable Pay Plan with respect to grants made to Mr. Hunhoff on May 22, 2017, at time of his promotion to Executive Vice President, Energy and Foods.


⁽⁸⁾	Represents range of possible awards under our LTIP for the fiscal 2017-2019 performance period with respect to grants made to Mr. Hunhoff on May 22, 2017, at time of his promotion to Executive Vice President, Energy and Foods.

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⁽⁹⁾	These grants were terminated when Mr. Hunhoff was promoted to Executive Vice President, Energy and Foods on May 22, 2017.

The material terms of annual variable pay and long-term incentive awards that are disclosed in this table, including the vesting schedule, are described under “Compensation Discussion and Analysis” above.

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2017 Pension Benefits



N ame	Plan Name	Number of Years of Credited Service (#)	Present Value of Accumulated Benefits ($)		Payments During Last Fiscal Year ($)
Jay Debertin ⁽¹⁾	Pension Plan	33.2500	$	926,327	$	—
	SERP	33.2500	2,643,799		—
Timothy Skidmore	Pension Plan	4.0000	112,080		—
	SERP	4.0000	328,898		—
Shirley Cunningham	Pension Plan	4.3333	111,517		—
	SERP	4.3333	454,813		—
James Zappa	Pension Plan	1.3333	55,662		—
	SERP	1.3333	167,660		—
Darin Hunhoff	Pension Plan	25.2500	575,678		—
	SERP	25.2500	363,467		—
Carl Casale	Pension Plan	6.6667	145,050		133,868
	SERP	6.6667	2,108,513		—


⁽¹⁾	Mr. Debertin is eligible for early retirement in both the Pension Plan and the SERP.

The above table shows the present value of accumulated retirement benefits that Named Executive Officers are entitled to under the Pension Plan and the SERP.

For a discussion of the material terms and conditions of the Pension Plan and the SERP, see “Compensation Discussion and Analysis” above.

The present value of accumulated benefits is determined in accordance with the same assumptions outlined in Note 10, Benefit Plans , of the notes to consolidated financial statements that are included in this Annual Report on Form 10-K:


•	Discount rate of 3.75% for the Pension Plan and 3.38% for the SERP;


•	RP 2014 Mortality Table with a fully generational projection reflecting scale MP 2016 from 2006;


•	Each Named Executive Officer is assumed to retire at the earliest retirement age at which unreduced benefits are available (age 65). The early retirement benefit under the cash balance plan formula is equal to the participant’s

account balance; and


•	Payments under the cash balance formula of the Pension Plan assume a lump sum payment. SERP benefits are payable as a lump sum.

The normal form of benefit for a single Named Executive Officer is a life only annuity, and for a married Named Executive Officer the normal form of benefit is a 50% joint and survivor annuity. Other annuity forms are also available on an actuarial equivalent basis. A lump sum option is also available.

All Named Executive Officers’ retirement benefits at normal retirement age will be equal to their accumulated benefits under the Pension Plan and the SERP, as described under “Compensation Discussion and Analysis” above.

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2017 Nonqualified Deferred Compensation



Name	Executive Contributions in Last Fiscal Year ($) 1		Registrant Contributions in Last Fiscal Year ($) 2		Aggregate Earnings in Last Fiscal Year ($) 3		Aggregate Withdrawals/ Distributions ($)		Aggregate Balance at Last Fiscal Year End ($) 2,4
Jay Debertin	$	—	$	803,850	$	661,205	$	2,777,388	$	14,191,782
Timothy Skidmore	52,350		584,502		293,140		686,378		3,642,097
Shirley Cunningham	100,000		694,471		205,025		1,416,939		3,919,746
James Zappa	—		514,898		72,769		—		664,164
Darin Hunhoff	—		265,221		329,013		216,030		2,549,270
Carl Casale	—		2,226,958		456,350		5,015,394		8,339,454


⁽¹⁾	Includes amounts deferred from salary and annual incentive pay reflected in the Summary Compensation Table.

⁽²⁾

Contributions are made by us into the Deferred Compensation Plan on behalf of Named Executive Officers. Amounts include LTIP, retirement contributions on amounts exceeding IRS compensation limits, Profit Sharing, and 401(k) match. The amounts reported were made in early fiscal 2017 based on fiscal 2016 results. These results are also included in amounts reported in the Summary Compensation Table: Mr. Debertin, $14,315; Mr. Skidmore, $7,945; Ms. Cunningham, $11,725; Mr. Zappa, $6,080; Mr. Hunhoff, $4,571; and Mr. Casale, $27,510.


⁽³⁾	The amounts in this column include the change in value of the balance, not including contributions made by the Named Executive Officer. Amounts include the following above market earnings in fiscal 2017 that are also reflected in the Summary Compensation Table: Mr. Debertin, $118,199; Mr. Skidmore, $16,145; Ms. Cunningham, $32,452; Mr. Zappa, $0; Mr. Hunhoff, $6,578; and Mr. Casale, $93,434.

⁽⁴⁾

Amounts vary in accordance with individual pension plan provisions and voluntary employee deferrals and withdrawals. These amounts include rollovers, voluntary salary and voluntary incentive plan contributions from predecessor plans with predecessor employers that have increased in value over the course of the executive’s career. Named Executive Officers may defer up to 75% of their base salary and up to 100% of their annual variable pay to the Deferred Compensation Plan. Earnings on amounts deferred under the Deferred Compensation Plan are determined based on the investment election made by the Named Executive Officer from five market-based notional investments with a varying level of risk selected by us, and a fixed rate fund. The notional investment returns for fiscal 2017 were as follows: Vanguard Prime Money Market, 0.57%; Vanguard Life Strategy Income, 3.27%; Vanguard Life Strategy Conservative Growth, 6.68%; Vanguard Life Strategy Moderate Growth, 10.01%; Vanguard Life Strategy Growth, 13.48%; and the Fixed Rate was 4.00%.

Named Executive Officers may change their investment election daily. Payments of amounts deferred are made in accordance with elections by the Named Executive Officer and in accordance with Section 409A under the Internal Revenue Code. Payments under the Deferred Compensation Plan may be made at a specified date elected by the Named Executive Officer or deferred until retirement, disability, or death. Such payments would be made in a lump sum. In the event of retirement, the Named Executive Officer can elect to receive payments either in a lump sum or annual installments up to 10 years.

For a discussion of the material terms and conditions of the Deferred Compensation Plan, see “Compensation Discussion and Analysis” above.

Post Employment

Pursuant to the terms of his Employment Agreement, Mr. Debertin, our President and CEO, is entitled to severance in the event that his employment is terminated by us without cause or by him with “good reason.” Specifically, severance under the Employment Agreement would consist of:

•

The annual incentive compensation Mr. Debertin would have been entitled to receive for the year in which his termination occurred as if he had continued until the end of that fiscal year, determined based on our actual performance for that fiscal year relative to the performance goals applicable to Mr. Debertin (with that portion of the annual incentive compensation based on completion or partial completion of

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previously specified personal goals equal to 30% of the target annual incentive), prorated for the number of days in the fiscal year through Mr. Debertin’s termination date and generally payable in a cash lump sum at the time that incentive awards are payable to other participants;


•	Two times Debertin’s base salary plus two times his target annual incentive compensation, payable in three equal installments with the first installment payable 60 days following termination and the second and third installments payable on the first and second anniversary dates of termination, respectively; and


•	Welfare benefit continuation for two years following termination.

Pursuant to the terms of Mr. Casale’s Separation Agreement, Mr. Casale, our former President and Chief Executive Officer, is entitled to the following payments:

•

Two times his previous annual base salary, for a total amount of $2,102,000, payable in three equal installments with the first installment payable 60 days following the date he ceased to be employed by CHS and the second and third installments payable on the first and second anniversary dates of the date he ceased to be employed by CHS, respectively, provided he remains in compliance with the confidentiality, non-solicitation, non-competition, cooperation and non-disparagement covenants under his Separation Agreement;

•

Two times his previous target annual incentive compensation, for a total amount of $3,153,000, payable in three equal installments with the first installment payable 60 days following the date he ceased to be employed by CHS and the second and third installments payable on the first and second anniversary dates of the date he ceased to be employed by CHS, respectively, provided he remains in compliance with the confidentiality, non-solicitation, non-competition, cooperation and non-disparagement covenants under his Separation Agreement;

•

Annual incentive compensation that Mr. Casale would have received if he had worked until the end of fiscal 2017 totaling $342,079 determined based on our actual performance for that fiscal year relative to the performance goals previously applicable to Mr. Casale (with that portion of the annual incentive compensation based on completion or partial completion of previously specified personal goals equal to 30% of the target annual incentive), prorated for the number of days in the fiscal year through the date Mr. Casale ceased to be employed by CHS and generally payable in a cash lump sum at the time that the applicable incentive awards are payable to other plan participants;

•

Payment of $2,409,079, payable within 75 days after the six-month anniversary date of the date Mr. Casale ceased to be employed by CHS in recognition of the forfeiture by Mr. Casale of earned but unvested amounts (in the aggregate of $3,159,849, of which $2,409,079 would have vested in January 2018 and $750,770 would have vested in January 2019 had employment continued through those times) under the LTIP;


•	Accrued and unpaid base salary;


•	Accrued and unpaid vacation pay in the amount of $124,962 was paid to Mr. Casale as part of the next payroll following the date Mr. Casale ceased to be employed by CHS;


•	Legal fee allowance in the amount of $10,000 paid to Mr. Casale to cover the cost of negotiating the Separation Agreement; and


•	Welfare benefit continuation for two years following the date Mr. Casale ceased to be employed by CHS.

Mr. Skidmore’s employment term sheet with us provides for severance in the event his employment is terminated by us without cause, or by him with “good reason”, in the amount of one year of base pay and prorated annual variable pay, payable in a lump sum.

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Ms. Cunningham’s employment term sheet with us provides for severance in the event her employment is terminated by us without cause, or by her with “good reason”, in the amount of one year of base pay and prorated annual variable pay, payable as a lump sum.

Mr. Zappa’s employment term sheet with us provides for severance in the event his employment is terminated by us without cause, or by him with “good reason”, in the amount of one year of base pay and prorated annual variable pay, payable as a lump sum.

Mr. Hunhoff is covered by a broad-based employee severance program which provides a lump sum payment of two weeks of pay per year of service with a 12-month cap.

The Named Executive Officers’ severance pay would have been as follows had they been terminated by us without cause or terminated their employment for “good reason” as of the last business day of fiscal 2017:



Jay Debertin ⁽¹⁾⁽²⁾	$	7,524,200
Timothy Skidmore ⁽³⁾	1,008,100
Shirley Cunningham ⁽³⁾	1,050,600
James Zappa ⁽³⁾	800,360
Darin Hunhoff	500,000
Carl Casale ⁽⁴⁾	5,780,539

_______________________________________


⁽¹⁾	Includes the value of health and welfare insurance based on current monthly rates.


⁽²⁾	For purposes of calculating the prorated portion of Mr. Debertin's unpaid annual variable pay award for the fiscal year in which the termination occurred, assumes an annual variable pay award at target performance for the entire fiscal year.


⁽³⁾	Assumes an annual variable pay award at target performance for the entire fiscal year.


⁽⁴⁾	Details of these payments are set forth in the above details of Mr. Casale's Separation Agreement.

There are no other severance benefits offered to our Named Executive Officers, except for up to $5,000 of outplacement assistance, which would be included as imputed income, and government mandated benefits such as COBRA. Except as otherwise set forth above, the method of payment would be a lump sum. Named Executive Officers not covered by employment agreements are not offered any special postretirement health and welfare benefits that are not offered to other similarly situated (i.e. age and service) salaried employees.

Director Compensation

Overview

Our Board of Directors met 12 times during the year ended August 31, 2017. Through August 31, 2017, each director was provided annual compensation of $69,000, paid in 12 monthly payments, plus actual expenses and travel allowance, with the Chairman of the Board receiving additional annual compensation of $18,000, the First Vice Chairman, and the Secretary-Treasurer receiving additional annual compensation of $3,600 and all Board committee chairs receiving additional annual compensation of $6,000. Each director receives a per diem of $500 plus actual expenses and travel allowance for each day spent at meetings other than regular Board meetings and the CHS Annual Meeting. The number of days per diem may not exceed 55 days annually, except that the Chairman of the Board is exempt from this limit.

Further, in an effort to align the interests of our Board of Directors and management, directors are eligible to participate in the Deferred Compensation Plan. Other than direct contributions, contributions to the Deferred Compensation Plan are made based on the Company's ROAE performance to align the interests of directors, management and member-owners. The ROAE performance targets are the same as described in the LTIP, historically resulting in Deferred Compensation Plan credits that escalate consistent with increasing ROAE performance levels, as detailed on the following pages.

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Director Retirement and Healthcare Benefits

Members of our Board of Directors are eligible for certain retirement and healthcare benefits. The director retirement plan is a defined benefit plan and provides for a monthly benefit for the director’s lifetime, beginning at age 60. Benefits are immediately vested and the monthly benefit is determined according to the following formula: $250 times years of service on the Board (up to a maximum of 15 years). Under no event will the benefit payment be payable for less than 120 months. Payment shall be made to the retired director’s beneficiary in the event of the director’s death before 120 payments are made. Prior to 2005, directors could elect to receive their benefit as an actuarial equivalent lump sum. In order to comply with IRS requirements, directors were required in 2005 to make a one-time irrevocable election whether to receive their accrued benefit in a lump sum or a monthly annuity upon retirement. If the lump sum was elected, the director would commence benefits upon expiration of Board term.

Effective August 31, 2011, future accruals under the director retirement plan were frozen. Directors elected after that date are not eligible for benefits under this plan.

Retirement benefits are funded by a rabbi trust, with a balance at August 31, 2017, of $8.7 million.

Directors serving as of September 1, 2005, and their eligible dependents, are eligible to participate in our medical, life, dental, vision and hearing plans. We will pay 100% of the medical premium for the director and their eligible dependents while active on the Board. Term life insurance cost is paid by the director. Retired directors and their dependents are eligible to continue medical and dental insurance with the premiums paid by us after they leave the Board, until they are eligible for Medicare. In the event a director’s coverage ends due to death or Medicare eligibility, we will pay 100% of the premium for the eligible spouse and eligible dependents until the spouse reaches Medicare age or upon death, if earlier.

New directors elected on or after December 1, 2006, and their eligible dependents, are eligible to participate in our medical, dental, vision and hearing plans. We will pay 100% of the premium for the director and eligible dependents while active on the Board. In the event a director leaves the Board prior to Medicare eligibility, premiums will be shared based on the following schedule:



Years of Service	Director	CHS
Up to 3	100%	0%
3 to 6	50%	50%
6+	0%	100%

In the event a director’s coverage ends due to death or Medicare eligibility, premiums for the eligible spouse and eligible dependents will be shared based on the same schedule until the spouse reaches Medicare age or upon death, if earlier.

Deferred Compensation Plan

Directors are eligible to participate in the Deferred Compensation Plan. Each participating director may elect to defer up to 100% of his or her monthly director fees into the Deferred Compensation Plan. This must be done prior to the beginning of the calendar year in which the fees will be earned, or in the case of newly-elected directors, upon election to the Board. The deferral election must occur prior to the beginning of the calendar year in which the compensation will be earned. During fiscal 2017, the following directors deferred Board fees pursuant to the Deferred Compensation Plan: Mr. Erickson, Mr. Johnsrud, Mr. Knecht, Mr. Malesich and Mr. Riegel.

Benefits are funded in a Rabbi Trust. The amount of Deferred Compensation Plan Rabbi Trust reported elsewhere in this Annual Report on Form 10-K includes amounts deferred by the directors.

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Each year we will credit an amount to each director’s retirement plan account under the Deferred Compensation Plan. For all years through fiscal 2019, the amount that could be credited was based on our cumulative ROAE performance over a three-year period as follows:



Amount Credited	ROAE Performance
$100,000 (Superior Performance)	20% Return on Assets
$50,000 (Maximum)	14% Return on Assets
$25,000 (Target)	10% Return on Assets
$12,500 (Minimum)	8% Return on Assets
$0	Below 8% Return on Assets

The fiscal 2017 credit to each director’s retirement plan account was determined based on the ROAE performance for fiscal years 2015, 2016 and 2017. Based on the determined actual ROAE performance during those years, no Company contribution was made to any director’s retirement plan account. Beginning in fiscal 2020, for the 2018-2020 three-year cycle, we will credit an amount to each director’s retirement plan account under the Deferred Compensation Plan based on an ROIC performance metric (as described under the heading “Long-Term Incentive Plan” above).

Upon leaving our Board of Directors during the fiscal year, a director’s credit for that partial fiscal year will be the target amount ($25,000) prorated through the end of the month in which the director departs. Directors who join our Board of Directors during the fiscal year will receive credit for that partial fiscal year based on the actual ROAE or ROIC, as applicable, for that fiscal year, prorated from the first of the month following the month in which the director joins our Board of Directors, to the end of the fiscal year.

2017 Director Compensation



Name	Fees Earned or Paid in Cash ($) 1		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) 2		All Other Compensation ($) 3,4		Total ($)
Donald Anthony	$	84,250	$	2,844	$	13,942	$	101,036
Robert Bass	26,000		2,255		26,541		54,796
David Bielenberg	81,000		506		34,896		116,402
Clinton Blew	91,400		1,588		25,039		118,027
Dennis Carlson ⁽⁵⁾	86,500		10,004		18,550		115,054
Curt Eischens	90,750		2,844		14,340		107,934
Jon Erickson	81,000		1,579		18,431		101,010
Mark Farrell	66,750		—		1,135		67,885
Steven Fritel	89,200		118		14,704		104,022
Alan Holm	92,000		356		9,816		102,172
David Johnsrud	77,400		659		14,630		92,689
David Kayser	91,500		2,844		25,198		119,542
Randy Knecht	69,250		2,330		15,792		87,372
Greg Kruger	81,500		2,844		14,652		98,996
Edward Malesich	54,250		1,647		14,204		70,101
Perry Meyer	97,250		536		14,116		111,902
Steve Riegel	86,000		1,109		14,474		101,583
Daniel Schurr	102,950		1,459		21,239		125,648

_______________________________________

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⁽¹⁾	Of this amount, the following directors deferred the succeeding amounts to the Deferred Compensation Plan: Mr. Erickson, $6,000; Mr. Johnsrud, $22,000; Mr. Knecht, $15,000; Mr. Malesich $25,000; and Mr. Riegel, $2,000.

⁽²⁾

This column represents both changes in pension value and above-market earnings on deferred compensation. Change in pension value is the aggregate change in the actuarial present value of the director’s benefit under his retirement program, and nonqualified earnings, if applicable. The change in pension value will vary by director based on several factors including age, service, pension benefit elected (lump sum or annuity - see above), discount rate and mortality factor used to calculate the benefit due. Future accruals under the plan were frozen as of August 31, 2011, as stated above.

Above-market earnings represent earnings exceeding 120% of the Federal Reserve long-term rate as determined by the IRS on applicable funds. The following directors had above market earnings during fiscal 2017: Mr. Anthony, $2,844; Mr. Bass, $2,255; Mr. Bielenberg, $506; Mr. Blew, $1,588; Mr. Carlson, $2,844; Mr. Eischens, $2,844; Mr. Erickson, $1,579; Mr. Fritel, $118; Mr. Holm, $356; Mr. Johnsrud, $659; Mr. Kayser, $2,844; Mr. Knecht, $2,330; Mr. Kruger, $2,844; Mr. Malesich, $1,647; Mr. Meyer, $536; Mr. Riegel, $1,109; and Mr. Schurr, $1,459.


⁽³⁾	All other compensation includes health insurance premiums, conference and registration fees, meals and related spousal expenses for trips made with a director on CHS business. Total amounts vary primarily due to the variations in health insurance premiums, which are due to the number of dependents covered.

Health care premiums paid for directors include: Mr. Farrell, $928; Mr. Holm, $9,076; Mr. Bielenberg, $11,298; Mr. Meyer, $13,216; Mr. Anthony, Mr. Eischens, Mr. Fritel, Mr. Johnsrud, Mr. Knecht, Mr. Malesich, and Mr. Riegel, $13,584; Mr. Kruger, $14,112; Mr. Carlson and Mr. Erickson, $16,808; Mr. Bass, $17,424; Mr. Schurr, $20,028; and Mr. Blew and Mr. Kayser, $24,488.


⁽⁴⁾	All other compensation includes fiscal 2017 director retirement plan Deferred Compensation Plan contributions for former directors, Mr. Bass, $8,333 and Mr. Bielenberg $20,833.

⁽⁵⁾

Made a one-time irrevocable retirement election in 2005 to receive a lump sum benefit under the director retirement plan. All other directors that were first elected on or prior to August 31, 2011 will receive a monthly annuity upon retirement. The director retirement plan benefit was frozen as of August 31, 2011. Accordingly, directors who are first elected after that date are not eligible for benefits under that plan.

Compensation Committee Interlocks and Insider Participation

Our Board of Directors does not have a compensation committee. The Governance Committee of our Board of Directors recommends to the entire Board of Directors salary actions relative to our CEO. The entire Board of Directors determines the compensation and the terms of the employment agreement with our CEO. Our CEO decides base compensation levels for the other Named Executive Officers with input from a third-party consultant if necessary, and recommends for our Board of Directors' approval the annual and long-term incentive plans applicable to the other Named Executive Officers.

During fiscal 2017, the members of the Governance Committee of our Board of Directors (the committee of our Board of Directors that performs the equivalent functions of a compensation committee) were Messrs. Steve Riegel (chair), Dennis Carlson, Curt Eischens, Steve Fritel, David Johnsrud and Edward Malesich. During fiscal 2017, no executive officer of CHS served on the compensation committee (or other board committee performing equivalent functions) or board of directors of any other entity that had any executive officer who also served on our Governance Committee or Board of Directors. None of the directors are, or have been, officers or employees of CHS.

See Item 13 of this Annual Report on Form 10-K for directors, including Messrs. Carlson, Eischens and Johnsrud, who were a party to related-person transactions.

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Compensation Committee Report

The Governance Committee (the committee of our Board of Directors that performs the equivalent functions of a compensation committee) has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, the Governance Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

Respectfully submitted,

Steve Riegel, Chairman

Dennis Carlson

Curt Eischens

Steve Fritel

David Johnsrud

Edward Malesich

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Beneficial ownership of our equity securities by each member of our Board of Directors, each of our Named Executive Officers and all members of our Board of Directors and executive officers as a group as of October 20, 2017, is shown below. Except as indicated in the footnotes to the following table, each person has sole voting and investment power with respect to all shares attributable to such person.



	Title of Class
	8% Cumulative Redeemable Preferred Stock		Class B Cumulative Redeemable Preferred Stock
Name of Beneficial Owner	Amount of Beneficial Ownership	% of Class (1)	Amount of Beneficial Ownership	% of Class (2)
Directors:	(Shares)		(Shares)
Donald Anthony	—	*	—	*
Clinton J. Blew	—	*	—	*
Dennis Carlson	60	*	—	*
Curt Eischens	120	*	107	*
Jon Erickson	300	*	414	*
Mark Farrell	4,800	*	—	*
Steve Fritel	880	*	—	*
Alan Holm	—	*	—	*
David Johnsrud	—	*	1,650	*
David Kayser	—	*	630	*
Randy Knecht ⁽³⁾	916	*	229	*
Gregory Kruger	—	*	—	*
Edward Malesich	—	*	—	*
Perry Meyer ⁽³⁾	120	*	—	*
Steve Riegel	245	*	88	*
Daniel Schurr	—	*	—	*
Named Executive Officers:
Jay Debertin ⁽³⁾	1,200	*	—	*
Shirley Cunningham	—	*	—	*
Darin Hunhoff	596	*	—	*
Timothy Skidmore ⁽³⁾	—	*	5,512	*
James Zappa	—	*	—	*
Carl M. Casale ⁽⁴⁾	—	*	7,114	*
All other executive officers	—	*	—	*
Directors and executive officers as a group	9,237	*	8,630	*

_______________________________________


⁽¹⁾	As of September 15, 2017, there were 12,272,003 shares of 8% Cumulative Redeemable Preferred Stock outstanding.


⁽²⁾	As of October 20, 2017, there were 78,659,066 shares of Class B Cumulative Redeemable Preferred Stock outstanding with 21,459,066 , 16,800,000 , 19,700,000 and 20,700,000 attributed to Series 1, Series 2, Series 3 and Series 4, respectively.


⁽³⁾	Includes shares held by spouse, children and Individual Retirement Accounts ("IRA").


⁽⁴⁾	Represents 7,114 shares of Class B Series 3 Preferred Stock held by the One At a Time Foundation, a nonprofit organization at which Mr. Casale serves as Vice President and a Director and at which Mr. Casale's spouse serves as President and a Director. Mr. Casale disclaims beneficial ownership of all such shares.


*	Less than 1%.

We have no compensation plans under which our equity securities are authorized for issuance.

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To our knowledge, there is no person or group who is a beneficial owner of more than 5% of any class or series of our preferred stock.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Because our directors must be active patrons of CHS, or of an affiliated association, transactions between us and our directors are customary and expected. Transactions include the sales of commodities to us and the purchases of products and services from us, as well as patronage refunds and equity redemptions received from us. During the year ended August 31, 2017 , the value of those transactions between a particular director (and any immediate family member of a director, which includes any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and any person (other than a tenant or employee) sharing the household of such director) and us in which the total amount involved exceeded $120,000 are shown below.



Name	Transactions with CHS		Patronage Dividends
Donald Anthony	$	197,761	$	229
Dennis Carlson	437,907		1,908
Curt Eischens	263,701		408
Jon Erickson	605,318		5,787
David Johnsrud	2,373,532		7,926
David Kayser	890,287		8,222

Review, Approval or Ratification of Related Party Transactions

Pursuant to its amended and restated charter, our Audit Committee has responsibility for the review and approval of all transactions between CHS and any related parties or affiliates of CHS, including its officers and directors, other than transactions in the ordinary course of business and on market terms as described above.

Related persons can include any of our directors or executive officers and any of their immediate family members, as defined by the Securities and Exchange Commission. In evaluating related person transactions, the committee members apply the same standards they apply to their general responsibilities as members of the Audit Committee of the Board of Directors. The committee will approve a related person transaction when, in its good faith judgment, the transaction is in the best interest of CHS. To identify related person transactions, each year we require our directors and officers to complete a questionnaire identifying any transactions with CHS in which the officer or director or their family members have an interest. We also review our business records to identify potentially qualifying transactions between a related person and us. In addition, we have a written policy in regard to related persons, included in our Corporate Compliance Code of Ethics, that describes our expectation that all directors, officers and employees who may have a potential or apparent conflict of interest will notify our legal department.

Director Independence

We are a Minnesota cooperative corporation managed by a Board of Directors made up of 17 members (presently, one seat remains open). Nomination and election of the directors is done by eight separate regions. In addition to meeting other requirements for directorship, candidates must reside in the region from which they are elected. Directors are elected for three-year terms. The terms of directors are staggered and no more than seven director positions are elected at an annual meeting of members. Nominations for director elections are made by the members at the region caucuses at our annual meeting of members. Neither the Board of Directors, nor management of CHS participates in the nomination process. Accordingly, we have no nominating committee.

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The following directors satisfy the definition of director independence set forth in the rules of the Stock Market ("NASDAQ"):



Donald Anthony	Steve Fritel	Edward Malesich
Clinton J. Blew	Alan Holm	Perry Meyer
Dennis Carlson	David Kayser	Steve Riegel
Jon Erickson	Randy Knecht	Daniel Schurr
Mark Farrell	Greg Kruger

Further, although we do not need to rely upon an exemption for the Board of Directors as a whole, we are exempt pursuant to the NASDAQ rules from the NASDAQ director independence requirements as they relate to the makeup of the Board of Directors as a whole and the makeup of the committee performing the functions of a compensation committee. The NASDAQ exemption applies to cooperatives that are structured to comply with relevant state law and federal tax law and that do not have a publicly traded class of common stock. All of the members of our Audit Committee are independent. All of the members of our Governance Committee (the committee of our Board of Directors that performs the equivalent functions of a compensation committee) are independent other than Curt Eischens and David Johnsrud.

Independence of CEO and Board Chairman Positions

Our bylaws prohibit any employee of CHS from serving on the Board of Directors. Accordingly, our CEO may not serve as Chairman of the Board or in any CHS Board capacity. We believe that this leadership structure creates independence between the Board and management and is an important check and balance in the governance of CHS.

Board of Directors Role in Risk Oversight

It is senior management’s responsibility to identify, assess and manage our exposures to risk. Our Board of Directors plays an important and significant role in overseeing the overall risk management approach, including the review and, where appropriate, approval of guidelines and policies that govern our risk management process. Our management and Board of Directors have jointly identified multiple broad categories of risk exposure, each of which could impact operations and affect results at an enterprise level. Each such significant enterprise level risk is reviewed periodically by management with the Board of Directors and/or a committee of the Board as appropriate. The review includes an analysis by management of the continued applicability of the risk, our performance in managing or mitigating the risk, and possible additional or emerging risks to consider. As additional areas of risk are identified our Board of Directors and/or a committee of the Board provides review and oversight of management's actions to identify, assess, and manage that risk. We continue to develop a formal Enterprise Risk Management program intended to support integration of the risk assessment and management discipline and controls into major decision making and business processes. The Corporate Risk Committee is involved in developing and approving the Enterprise Risk Management framework, and is responsible for evaluating its effectiveness on an ongoing basis. When appropriate, the Corporate Risk Committee meets jointly with the Audit Committee to discuss common financial risks across CHS that may have potential material impact to our financial statements.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table shows the aggregate fees billed to us by PricewaterhouseCoopers LLP for services rendered during the years ended August 31, 2017 , and 2016 :



	2017		2016
	(Dollars in thousands)
Audit Fees ⁽¹⁾	$	4,408	$	4,416
Audit-related Fees ⁽²⁾	546		746
Tax Fees ⁽³⁾	84		166
All Other Fees ⁽⁴⁾	1		19
Total	$	5,039	$	5,347

_______________________________________


⁽¹⁾	Includes fees for audit of annual financial statements and reviews of the related quarterly financial statements, certain statutory audits and work related to filings of registration statements.

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⁽²⁾	Includes fees for employee benefit plan audits, due diligence on acquisitions and internal control and system audit procedures.


⁽³⁾	Includes fees related to tax compliance, tax advice and tax planning.


⁽⁴⁾	Includes fees related to other professional services performed for international entities.

In accordance with the CHS Inc. Audit Committee Charter, as amended, our Audit Committee adopted the following policies and procedures for the approval of the engagement of an independent registered public accounting firm for audit, review or attest services and for pre-approval of certain permissible non-audit services, all to ensure auditor independence.

Our independent registered public accounting firm will provide audit, review and attest services only at the direction of, and pursuant to engagement fees and terms approved by our Audit Committee. Our Audit Committee approves, in advance, all non-audit services to be performed by the independent auditors and the fees and compensation to be paid to the independent auditors. Our Audit Committee approved 100% of the services listed above in advance.

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PART IV.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) FINANCIAL STATEMENTS

The following financial statements are filed as part of this Annual Report on Form 10-K.



	Page No.
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets as of August 31, 2017, and 2016	F-2
Consolidated Statements of Operations for the years ended August 31, 2017, 2016, and 2015	F-3
Consolidated Statements of Comprehensive Income for the years ended August 31, 2017, 2016, and 2015	F-4
Consolidated Statements of Changes in Equities for the years ended August 31, 2017, 2016, and 2015	F-5
Consolidated Statements of Cash Flows for the years ended August 31, 2017, 2016, and 2015	F-6
Notes to Consolidated Financial Statements	F-7

(a)(2) FINANCIAL STATEMENT SCHEDULES

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES



	Balance at Beginning of Year		Additions: Charged to Costs and Expenses *		Deductions: Write-offs, net of Recoveries			Balance at End of Year
	(Dollars in thousands)
Allowances for Doubtful Accounts
2017	$	163,644	$	191,581	$	(129,499	)	$	225,726
2016	106,445		65,725		(8,526		)	163,644
2015	103,639		8,132		(5,326		)	106,445

Valuation Allowance for Deferred Tax Assets
2017	$	194,277	$	112,899	$	(22,460	)	$	284,716
2016	98,023		120,300		(24,046		)	194,277
2015	111,509		21,884		(35,370		)	98,023

Reserve for Supplier Advance Payments
2017	$	—	$	130,705	$	—		$	130,705

*net of reserve adjustments

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(a)(3) EXHIBITS

EXHIBIT INDEX



2.1	Second Amended and Restated Limited Liability Company Agreement dated as of December 18, 2015 between CHS Inc. and CF Industries Sales, LLC. (Incorporated by reference to our Current Report on Form 8-K, filed December 21, 2015).()(*)
3.1	Amended and Restated Articles of Incorporation of CHS Inc. (Incorporated by reference to our Current Report on Form 8-K, filed December 5, 2016).
3.2	Amended and Restated Bylaws of CHS Inc. (Incorporated by reference to our Current Report on Form 8-K, filed December 5, 2016).
4.1	Resolution Creating a Series of Preferred Equity to be Designated 8% Cumulative Redeemable Preferred Stock. (Incorporated by reference to Amendment No. 1 to our Registration Statement on Form S-2 (File No. 333-101916), filed January 14, 2003).
4.2	Form of Certificate Representing 8% Cumulative Redeemable Preferred Stock. (Incorporated by reference to Amendment No. 2 to our Registration Statement on Form S-2 (File No. 333-101916), filed January 23, 2003).
4.3	Unanimous Written Consent Resolution of the Board of Directors Amending the Amended and Restated Resolution Creating a Series of Preferred Equity to be Designated 8% Cumulative Redeemable Preferred Stock. (Incorporated by reference to Amendment No. 2 to our Registration Statement on Form S-2 (File No. 333-101916), filed January 23, 2003).
4.4	Unanimous Written Consent Resolution of the Board of Directors Amending the Amended and Restated Resolution Creating a Series of Preferred Equity to be Designated 8% Cumulative Redeemable Preferred Stock to change the record date for dividends. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2003, filed July 2, 2003).
4.5	Resolution Amending the Terms of the 8% Cumulative Redeemable Preferred Stock to Provide for Call Protection. (Incorporated by reference to our Current Report on Form 8-K, filed July 19, 2013).
4.6	Resolution Creating Class B Cumulative Redeemable Preferred Stock. (Incorporated by reference to Amendment No. 2 to our Registration Statement on Form S-1 (File No. 333-190019), filed September 13, 2013).
4.7	Unanimous Written Consent Resolution of the Board of Directors of CHS Inc. Relating to the Terms of the Class B Cumulative Redeemable Preferred Stock, Series 1. (Incorporated by reference to our Registration Statement on Form 8-A (File No. 001-36079), filed September 20, 2013).
4.8	Form of Certificate Representing Class B Cumulative Redeemable Preferred Stock, Series 1. (Incorporated by reference to Amendment No. 2 to our Registration Statement on Form S-1 (File No. 333-190019), filed September 13, 2013).
4.9	Unanimous Written Consent Resolution of the Board of Directors Relating to the Terms of the Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2. (Incorporated by reference to our Registration Statement on Form 8-A (File No. 001-36079), filed March 5, 2014).
4.10	Form of Certificate Representing Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2. (Incorporated by reference to Amendment No. 1 to our Registration Statement on Form S-1 (File No. 333-193891), filed February 26, 2014).
4.11	Unanimous Written Consent Resolution of the Board of Directors Relating to the Terms of the Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3. (Incorporated by reference to our Registration Statement on Form 8-A (File No. 001-36079), filed September 10, 2014).
4.12	Form of Certificate Representing Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3. (Incorporated by reference to our Registration Statement on Form 8-A (File No. 001-36079), filed September 10, 2014).
4.13	Unanimous Written Consent Resolution of the Board of Directors Relating to the Terms of the Class B Cumulative Redeemable Preferred Stock, Series 4. (Incorporated by reference to our Registration Statement on Form 8-A (File No. 001-36079), filed January 14, 2015).
4.14	Form of Certificate Representing Class B Cumulative Redeemable Preferred Stock, Series 4. (Incorporated by reference to our Registration Statement on Form 8-A (File No. 001-36079), filed January 14, 2015).
10.1	Employment Agreement between CHS Inc. and Carl M. Casale dated April 7, 2016, effective September 1, 2016. (Incorporated by reference to our Form 10-Q for the quarterly period ended February 29, 2016, filed April 11, 2016). (+)
10.1A	Separation Agreement between CHS Inc. and Carl M. Casale dated and effective May 22, 2017. (Incorporated by reference to our Current Report on Form 8-K, filed May 22, 2017).(+)
10.1B	Change in Control Agreement between CHS Inc. and Carl M. Casale dated April 7, 2016, effective September 1, 2016. (Incorporated by reference to our Form 10-Q for the quarterly period ended February 29, 2016, filed April 11, 2016). (+)

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10.2	Employment Agreement between CHS Inc. and Jay D. Debertin dated and effective May 22, 2017. (Incorporated by reference to our Current Report on Form 8-K, filed May 22, 2017).(+)
10.3	CHS Inc. Supplemental Executive Retirement Plan (2013 Restatement). (Incorporated by reference to Amendment No. 1 to our Registration Statement on Form S-1 (file No. 333-190019), filed September 3, 2013). (+)
10.3A	Amendment No. 1 to the CHS Inc. Supplemental Executive Retirement Plan (2013 Restatement). (Incorporated by reference to our Form 10-K for the year ended August 31, 2016, filed November 3, 2016). (+)
10.3B	Amendment No. 2 to the CHS Inc. Supplemental Executive Retirement Plan (2013 Restatement). (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2016, filed July 7, 2016). (+)
10.4	CHS Inc. 2017 Annual Variable Pay Plan Master Plan Document (*)(+)
10.4A	CHS Inc. 2017 Annual Variable Pay Plan Appendix A, Plan Details (*)(+)
10.4B	CHS Inc. 2017 Annual Variable Pay Plan Appendix B, Plan Modification (*)(+)
10.5	CHS Inc. Long-Term Incentive Plan XIV Master Plan Document (2014-2016). (*)(+)
10.5A	CHS Inc. Long-Term Incentive Plan XIV Plan Appendix (2014-2016) (*)(+)
10.5B	CHS Inc. Long-Term Incentive Plan XIV Master Plan Document (2015-2017). (*)(+)
10.5C	CHS Inc. Long-Term Incentive Plan XIV Plan Appendix (2015-2017) (*)(+)
10.5D	CHS Inc. Long-Term Incentive Plan XIV Master Plan Document (2016-2018). (*)(+)
10.5E	CHS Inc. Long-Term Incentive Plan XIV Plan Appendix (2016-2018)(*)(+)
10.5F	CHS Inc. Long-Term Incentive Plan XIV Plan Appendix (2017-2019)(*)(+)
10.5G	CHS Inc. Long-Term Incentive Plan XIV Plan Appendix (2018-2020)(*)(+)
10.6	CHS Inc. Nonemployee Director Retirement Plan. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2010, filed July 8, 2010). (+)
10.7A	Amendment No. 1 to the Nonemployee Director Retirement Plan. (Incorporated by reference to our Form 10-K for the year ended August 31, 2011, filed November 14, 2011). (+)
10.7B	Amendment No. 2 to the Nonemployee Director Retirement Plan. (Incorporated by reference to our Form 10-K for the year ended August 31, 2012, filed November 7, 2012). (+)
10.8	Trust Under the CHS Inc. Nonemployee Director Retirement Plan. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2010, filed July 8, 2010). (+)
10.9	$225,000,000 Note Agreement (Private Placement Agreement) dated as of June 19, 1998 among Cenex Harvest States Cooperatives and each of the Purchasers of the Notes. (Incorporated by Reference to our Form 10-Q Transition Report for the period June 1, 1998 to August 31, 1998, filed October 14, 1998).
10.9A	First Amendment to Note Agreement ($225,000,000 Private Placement), effective September 10, 2003, among CHS Inc. and each of the Purchasers of the Notes. (Incorporated by reference to our Form 10-K for the year ended August 31, 2003, filed November 21, 2003).
10.10	Note Purchase Agreement and Series D & E Senior Notes dated October 18, 2002. (Incorporated by reference to our Form 10-K for the year ended August 31, 2002, filed November 25, 2002).
10.10A	Amendment No. 1 to Note Purchase Agreement dated as of June 9, 2011, between CHS Inc. and the purchasers of notes party thereto. (Incorporated by reference to our Current Report on Form 8-K, filed September 11, 2015).
10.10B	Amendment No. 2 to Note Purchase Agreement dated as of September 4, 2015, between CHS Inc. and the purchasers of notes party thereto. (Incorporated by reference to our Current Report on Form 8-K, filed September 11, 2015).
10.11	Note Purchase and Private Shelf Agreement between CHS Inc. and Prudential Capital Group dated as of April 13, 2004. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2004, filed July 12, 2004).
10.11A	Amendment No. 1 to Note Purchase and Private Shelf Agreement dated April 9, 2007, among CHS Inc., Prudential Investment Management, Inc. and the Prudential Affiliate parties. (Incorporated by reference to our Form 10-Q for the quarterly period ended February 28, 2007, filed April 9, 2007).
10.11B	Amendment No. 2 to Note Purchase and Private Shelf Agreement and Senior Series J Notes totaling $50 million issued February 8, 2008. (Incorporated by reference to our Current Report on Form 8-K, filed February 11, 2008).
10.11C	Amendment No. 3 to Note Purchase and Private Shelf Agreement, effective as of November 1, 2010. (Incorporated by reference to our Form 10-Q for the quarterly period ended November 30, 2010, filed January 11, 2011).
10.11D	Amendment No. 4 to Note Purchase and Private Shelf Agreement dated as of June 9, 2011, between CHS Inc. and the purchasers of notes party thereto. (Incorporated by reference to our Form 10-K for the year ended August 31, 2015, filed November 23, 2015).

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10.11E	Amendment No. 5 to Note Purchase and Private Shelf Agreement dated as of December 21, 2012, between CHS Inc. and the purchasers of notes party thereto. (Incorporated by reference to our Form 10-K for the year ended August 31, 2015, filed November 23, 2015).
10.11F	Amendment No. 6 to Note Purchase and Private Shelf Agreement dated as of September 4, 2015, between CHS Inc. and the purchasers of notes party thereto. (Incorporated by reference to our Current Report on Form 8-K filed on September 11, 2015).
10.12	Note Purchase Agreement for Series H Senior Notes ($125,000,000 Private Placement) dated September 21, 2004. (Incorporated by reference to our Current Report on Form 8-K, filed September 22, 2004).
10.13	CHS Inc. Deferred Compensation Plan Master Plan Document (2015 Restatement). (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2015, filed July 10, 2015). (+)
10.13A	Amendment No. 1 to the CHS Inc. Deferred Compensation Plan (2015 Restatement). (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2016, filed July 7, 2016). (+)
10.13B	Amendment No. 2 to the CHS Inc. Deferred Compensation Plan (2015 Restatement).(*)(+)
10.14	Beneficiary Designation Form for the CHS Inc. Deferred Compensation Plan (Incorporated by reference to our Form 10-K for the year ended August 31, 2009, filed November 10, 2009). (+)
10.15	New Plan Participants 2011 Plan Agreement and Election Form for the CHS Inc. Deferred Compensation Plan. (Incorporated by reference to our Registration Statement on Form S-8 (File No. 333-177326), filed October 14, 2011). (+)
10.16	CHS Inc. Strategic Leadership Team Retention Award. (*)(+)
10.17	Loan Agreement (Term Loan) between CHS Inc. and European Bank for Reconstruction and Development, dated January 5, 2011. (Incorporated by reference to our Current Report on Form 8-K, filed January 18, 2011).
10.18	Revolving Loan Agreement between CHS Inc. and European Bank for Reconstruction and Development, dated November 30, 2010. (Incorporated by reference to our Current Report on Form 8-K, filed January 18, 2011).
10.19	Note Purchase Agreement ($400,000,000 Private Placement) and Series I Senior Notes dated as of October 4, 2007. (Incorporated by reference to our Current Report on Form 8-K filed October 4, 2007).
10.19A	Amendment No. 2 to Note Purchase Agreement dated as of September 4, 2015, between CHS Inc. and the purchasers of notes party thereto. (Incorporated by reference to our Current Report on Form 8-K, filed September 11, 2015).
10.20	Agreement Regarding Distribution of Assets, by and among CHS Inc., United Country Brands, LLC, Land O’Lakes, Inc. and Winfield Solutions, LLC, made as of September 4, 2007. (Incorporated by reference to our Form 10-K for the year ended August 31, 2007, filed November 20, 2007).
10.21	$150 Million Term Loan Credit Agreement by and between CHS Inc., CoBank, ACB and the Syndication Parties dated as of December 12, 2007. (Incorporated by reference to our Registration Statement on Form S-1 (File No. 333-148091), filed December 14, 2007).
10.21A	First Amendment to $150 Million Term Loan Credit Agreement by and between CHS Inc., CoBank, ACB and the Syndication Parties dated as of May 1, 2008. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2008, filed July 10, 2008).
10.21B	Second Amendment to $150 Million Term Loan Credit Agreement by and between CHS Inc., CoBank, ACB and the Syndication Parties dated as of June 2, 2010. (Incorporated by reference to our Current Report on Form 8-K, filed June 3, 2010).
10.21C	Fifth Amendment and Waiver, dated as of September 4, 2015, to that certain Credit Agreement (10-Year Term Loan), dated as of December 12, 2007, by and between CHS Inc., CoBank, ACB, as a syndication party and as the administrative agent for the benefit of all present and future syndication parties, and the other syndication parties party thereto. (Incorporated by reference to our Current Report on Form 8-K, filed September 11, 2015).
10.22	Amended and Restated Loan Origination and Participation Agreement dated as of September 1, 2011, by and among AgStar Financial Services, PCA, d/b/a ProPartners Financial, and CHS Capital, LLC. (Incorporated by reference to our Form 10-K for the year ended August 31, 2011, filed November 14, 2011).
10.22A	Amendment No. 1 to Amended and Restated Loan Origination and Participation Agreement dated as of September 1, 2011, by and among AgStar Financial Services, PCA, d/b/a ProPartners Financial, and CHS Capital, LLC. (Incorporated by reference to our Form 10-K for the year ended August 31, 2012, filed November 7, 2012).
10.22B	Amendment No. 2 to Amended and Restated Loan Origination and Participation Agreement dated as of September 1, 2011, by and among AgStar Financial Services, PCA, d/b/a ProPartners Financial, and CHS Capital, LLC. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2017, filed July 14, 2017).
10.22C	Amendment No. 3 to Amended and Restated Loan Origination and Participation Agreement dated as of September 1, 2011, by and among AgStar Financial Services, PCA, d/b/a ProPartners Financial, and CHS Capital, LLC. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2017, filed July 14, 2017).
10.22D	Amendment No. 4 to Amended and Restated Loan Origination and Participation Agreement dated as of September 1, 2011, by and among AgStar Financial Services, PCA, d/b/a ProPartners Financial, and CHS Capital, LLC. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2017, filed July 14, 2017).

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10.23	Stock Transfer Agreement, dated as of November 17, 2011, between CHS Inc. and GROWMARK, Inc. (Incorporated by reference to our Form 10-Q for the quarterly period ended November 30, 2011, filed January 11, 2012).
10.24	Stock Transfer Agreement, dated as of November 17, 2011, between CHS Inc. and MFA Oil Company. (Incorporated by reference to our Form 10-Q for the quarterly period ended November 30, 2011, filed January 11, 2012).
10.25	Amended and Restated Limited Liability Company Agreement, dated February 1, 2012, between CHS Inc. and Cargill, Incorporated. (Incorporated by reference to our Current Report on Form 8-K, filed February 1, 2012).
10.26	Note Purchase Agreement between CHS Inc. and certain accredited investors ($500,000,000) dated as of June 9, 2011. (Incorporated by reference to our Current Report on Form 8-K, filed June 13, 2011).
10.26A	Amendment No. 1 to Note Purchase Agreement dated as of September 4, 2015, between CHS Inc. and the purchasers of notes party thereto. (Incorporated by reference to our Current Report on Form 8-K, filed September 11, 2015).
10.27	Joint venture agreement among CHS Inc., Cargill, Incorporated, and ConAgra Foods, Inc., dated March 4, 2013. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2013, filed July 10, 2013).
10.27A	Amendment No. 1 to the joint venture agreement among CHS Inc., Cargill Incorporated, and ConAgra Foods, Inc., dated April 30, 2013. (Incorporated by reference to our Form 10-K for the year ended August 31, 2015, filed November 23, 2015).
10.27B	Amendment No. 2 to the joint venture agreement among CHS Inc., Cargill Incorporated, and ConAgra Foods, Inc., dated May 31, 2013. (Incorporated by reference to our Form 10-K for the year ended August 31, 2015, filed November 23, 2015).
10.27C	Amendment No. 3 to the joint venture agreement among CHS Inc., Cargill Incorporated, and ConAgra Foods, Inc., dated July 24, 2013. (Incorporated by reference to our Form 10-K for the year ended August 31, 2015, filed November 23, 2015).
10.27D	Amendment No. 4 to the joint venture agreement among CHS Inc., Cargill Incorporated, and ConAgra Foods, Inc., dated March 27, 2014. (Incorporated by reference to our Form 10-Q for the quarterly period ended February 28, 2014, filed April 3, 2014).
10.27E	Amendment No. 5 to the joint venture agreement among CHS Inc., Cargill Incorporated, and ConAgra Foods, Inc., dated May 25, 2014. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2014, filed July 9, 2014).
10.28	Resolutions Amending the Long-Term Incentive Plan. (Incorporated by reference to our Current Report on Form 8-K, filed September 3, 2013). (+)
10.29	Pre-Export Credit Agreement dated as of September 24, 2013 between CHS Agronegocio Industria e Comercio Ltda., as borrower, CHS Inc., as guarantor, and Credit Agricole Corporate and Investment Bank (Credit Agricole), as administrative agent, Credit Agricole and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arrangers and joint bookrunners, and the other syndication parties thereto from time to time. (Incorporated by reference to our Current Report on Form 8-K, filed October 4, 2013).
10.29A	First Amendment to Pre-Export Credit Agreement dated as of October 9, 2015, among CHS Agronegocio Industria e Comercio Ltda., as borrower, CHS Inc., as guarantor, Credit Agricole Corporate and Investment Bank, as administrative agent, and the lenders party thereto. (Incorporated by reference to our Form 10-K for the year ended August 31, 2015, filed November 23, 2015).
10.30	Amended and Restated Supply Agreement dated as of December 18, 2015 between CHS Inc. and CF Industries Nitrogen LLC. (Incorporated by reference to our Current Report on Form 8-K, filed December 21, 2015). (***)
10.31	2015 Amended and Restated Credit Agreement (5-Year Revolving Loan) dated as of September 4, 2015, by and between CHS Inc., CoBank, ACB, as a syndication party and as the administrative agent for the benefit of all present and future syndication parties, Wells Fargo Bank, National Association, as syndication agent, and the other syndication parties party thereto. (Incorporated by reference to our Current Report on Form 8-K, filed September 11, 2015).
10.32	2015 Credit Agreement (10-Year Term Loan) dated as of September 4, 2015, by and between CHS Inc., CoBank, ACB, as a syndication party and as the administrative agent for the benefit of all present and future syndication parties, and the other syndication parties party thereto. (Incorporated by reference to our Current Report on Form 8-K, filed September 11, 2015).
10.32A	Amendment No. 1 to 2015 Credit Agreement. (10-Year Term Loan), dated as of June 30, 2016, by and between CHS Inc., CoBank, ACB, as a syndication party and as the administrative agent for the benefit of all present and future syndication parties, and the other syndication parties thereto. (Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2016, filed July 7, 2016).
10.33	Note Purchase Agreement, dated as of January 14, 2016, among CHS Inc. and each of the Purchasers signatory thereto. (Incorporated by reference to our Current Report on Form 8-K, filed January 21, 2016).
10.34	Sale and Contribution Agreement, dated as of July 22, 2016, by and among CHS Inc., CHS Capital, LLC and Cofina Funding, LLC. (Incorporated by reference to our Form 10-K for the year ended August 31, 2016, filed November 3, 2016).

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10.34A	Omnibus Amendment No. 1, dated as of February 14, 2017, by and among Cofina Funding, LLC, as seller, CHS Inc., as servicer and as an originator, CHS Capital, LLC, as an originator, the conduit purchasers, committed purchasers and purchaser agents set forth on the signature pages thereto, the Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent, and U.S. Bank National Association, as custodian. (Incorporated by reference to our Current Report on 8-K, filed February 15, 2017).
10.34B	Omnibus Amendment No. 2, dated as of July 18, 2017, by and among Cofina Funding, LLC, as seller, CHS Inc., as servicer and as an originator, CHS Capital, LLC, as an originator, the conduit purchasers, committed purchasers and purchaser agents set forth on the signature pages thereto, the Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent, and U.S. Bank National Association, as custodian. (*)
10.35	Receivables Financing Agreement dated July 22, 2016, by and among CHS Inc., individually and as a Servicer, Cofina Funding, LLC, as Seller, Victory Receivables Corporation and Nieuw Amsterdam Receivables Corporation B.V., as Conduit Purchasers, Coöperatieve Rabobank U.A., as a Committed Purchaser, Coöperatieve Rabobank U.A., New York Branch, as Purchaser Agent, and the Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as a Committed Purchaser, Purchaser Agent and as Administrative Agent. (Incorporated by reference to our Form 10-K for the year ended August 31, 2016, filed November 3, 2016).
10.35A	Amended and Restated Receivables Purchase Agreement dated July 18, 2017, by and among CHS Inc., individually and as a Servicer, Cofina Funding, LLC, as Seller, Victory Receivables Corporation and Nieuw Amsterdam Receivables Corporation B.V., as Conduit Purchasers, Coöperatieve Rabobank U.A., as a Committed Purchaser, Coöperatieve Rabobank U.A., New York Branch, as Purchaser Agent, and the Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as a Committed Purchaser, Purchaser Agent and as Administrative Agent. (*)
10.36	Payoff and Termination Agreement dated July 22, 2016, by and among CHS Inc., Cofina Funding, LLC, CHS Capital, LLC, Niew Amsterdam Receivables Corporation B.V., Coöperatieve Rabobank U.A., Victory Receivables Corporation, the Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, and U.S. Bank N.A. (Incorporated by reference to our Form 10-K for the year ended August 31, 2016, filed November 3, 2016).
10.37	Reaffirmation of Performance Guaranty dated July 18, 2017, by and among CHS Inc., individually and as a Servicer, Cofina Funding, LLC, as Seller, Victory Receivables Corporation and Niew Amsterdam Receivables Corporation B.V., as Conduit Purchasers, Coöperatieve Rabobank U.A., as a Committed Purchaser, Coöperatieve Rabobank U.A., New York Branch, as Purchaser Agent, and the Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as a Committed Purchaser, Purchaser Agent and as Administrative Agent. (*)
21.1	Subsidiaries of the Registrant.(*)
23.1	Consent of Independent Registered Public Accounting Firm.(*)
24.1	Power of Attorney.(*)
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(*)
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(*)
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(*)
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(*)
101	The following financial information from CHS Inc.’s Annual Report on Form 10-K for the year ended August 31, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Equity and (vi) the Notes to the Consolidated Financial Statements. (*)

_______________________________________

(*) Filed herewith.


(**)	Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. CHS hereby undertakes to furnish supplemental copies of any of the omitted schedules to the U.S. Securities and Exchange Commission upon request.


(***)	Portions of Exhibits 2.1 and 10.30 have been omitted pursuant to a confidential treatment order under the Securities Exchange Act of 1934.

(+) Indicates management contract or compensatory plan or agreement.

(b) EXHIBITS

The exhibits shown in Item 15(a)(3) of this Annual Report on Form 10-K are being filed herewith.

None.

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ITEM 16. FORM 10-K SUMMARY

None.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 9, 2017 .

CHS INC.



	By:	/s/ Jay D. Debertin
		Jay D. Debertin
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on November 9, 2017 :



Signature		Title

/s/ Jay D. Debertin		President and Chief Executive Officer (principal executive officer)
Jay D. Debertin

/s/ Timothy Skidmore		Executive Vice President and Chief Financial Officer (principal financial officer)
Timothy Skidmore

/s/ Jean Briand		Senior Vice President Finance & Chief Accounting Officer (principal accounting officer)
Jean Briand

*		Chairman of the Board of Directors
Daniel Schurr		Chairman of the Board of Directors

*		Director
Donald Anthony		Director

*		Director
Clinton J. Blew		Director

*		Director
Dennis Carlson		Director

*		Director
Curt Eischens		Director

*		Director
Jon Erickson		Director

*		Director
Mark Farrell		Director

*		Director
Steve Fritel		Director

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*		Director
Alan Holm		Director

*		Director
David Johnsrud		Director

*		Director
David Kayser		Director

*		Director
Randy Knecht		Director

*		Director
Greg Kruger		Director

*		Director
Edward Malesich		Director

*		Director
Perry Meyer		Director

*		Director
Steve Riegel		Director



*By	/s/ Jay D. Debertin
	Jay D. Debertin Attorney-in-fact

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors, Members and Patrons of CHS Inc.:

In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of CHS Inc. and its subsidiaries as of August 31, 2017, and 2016, and the results of their operations and their cash flows for each of the three years in the period ended August 31, 2017, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Minneapolis, Minnesota

November 9, 2017

F-1

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Consolidated Financial Statements

CONSOLIDATED BALANCE SHEETS



	August 31
	2017			2016
	(Dollars in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	181,379		$	279,313
Receivables	1,869,632			2,880,763
Inventories	2,576,585			2,370,699
Derivative assets	232,017			543,821
Margin deposits	206,062			310,276
Supplier advance payments	249,234			347,600
Other current assets	299,618			202,708
Total current assets	5,614,527			6,935,180
Investments	3,750,993			3,795,976
Property, plant and equipment	5,356,434			5,488,323
Other assets	1,251,802			1,092,656
Total assets	$	15,973,756		$	17,312,135
LIABILITIES AND EQUITIES
Current liabilities:
Notes payable	$	1,988,215		$	2,731,479
Current portion of long-term debt	156,345			214,329
Customer margin deposits and credit balances	157,914			208,991
Customer advance payments	413,163			412,823
Accounts payable	1,951,292			1,819,049
Derivative liabilities	316,018			513,599
Accrued expenses	437,527			422,494
Dividends and equities payable	12,121			198,031
Total current liabilities	5,432,595			6,520,795
Long-term debt	2,023,448			2,082,876
Deferred tax liabilities	333,221			487,762
Other liabilities	278,667			354,452
Commitments and contingencies (Note 14)
Equities:
Preferred stock	2,264,038			2,244,132
Equity certificates	4,341,649			4,237,174
Accumulated other comprehensive loss	(183,670		)	(211,726		)
Capital reserves	1,471,217			1,582,380
Total CHS Inc. equities	7,893,234			7,851,960
Noncontrolling interests	12,591			14,290
Total equities	7,905,825			7,866,250
Total liabilities and equities	$	15,973,756		$	17,312,135

The accompanying notes are an integral part of the consolidated financial statements.

CHS Inc. and Subsidiaries

F-2

Table of Contents

Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF OPERATIONS



	For the Years Ended August 31
	2017			2016			2015
	(Dollars in thousands)
Revenues	$	31,934,751		$	30,347,203		$	34,582,442
Cost of goods sold	30,985,510			29,387,910			33,091,676
Gross profit	949,241			959,293			1,490,766
Marketing, general and administrative	604,359			601,261			642,309
Reserve and impairment charges	456,679			47,836			133,045
Operating earnings (loss)	(111,797		)	310,196			715,412
(Gain) loss on investments	4,569			(9,252		)	(5,239		)
Interest expense	171,239			113,704			70,659
Other (income) loss	(95,415		)	(38,357		)	(10,326		)
Equity (income) loss from investments	(137,338		)	(175,777		)	(107,850		)
Income (loss) before income taxes	(54,852		)	419,878			768,168
Income tax expense (benefit)	(182,075		)	(4,091		)	(12,165		)
Net income (loss)	127,223			423,969			780,333
Net income (loss) attributable to noncontrolling interests	(634		)	(223		)	(712		)
Net income (loss) attributable to CHS Inc.	$	127,857		$	424,192		$	781,045

The accompanying notes are an integral part of the consolidated financial statements.

CHS Inc. and Subsidiaries

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Table of Contents

Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME



	For the Years Ended August 31
	2017			2016			2015
	(Dollars in thousands)
Net income (loss)	$	127,223		$	423,969		$	780,333
Other comprehensive income (loss), net of tax:
Postretirement benefit plan activity, net of tax expense (benefit) of $18,688, $3,903 and $(12,726) in 2017, 2016, and 2015, respectively	30,100			6,583			(19,877		)
Unrealized net gain (loss) on available for sale investments, net of tax expense (benefit) of $2,732, $947 and $(154) in 2017, 2016, and 2015, respectively	4,385			1,500			(242		)
Cash flow hedges, net of tax expense (benefit) of $1,392, $(2,410) and $(1,607) in 2017, 2016, and 2015, respectively	2,242			(3,872		)	(2,602		)
Foreign currency translation adjustment, net of tax expense (benefit) of $214, $1,163 and $4,057 in 2017, 2016, and 2015, respectively	(8,671		)	(1,730		)	(34,729		)
Other comprehensive income (loss), net of tax	28,056			2,481			(57,450		)
Comprehensive income	155,279			426,450			722,883
Less comprehensive income attributable to noncontrolling interests	(634		)	(223		)	(712		)
Comprehensive income attributable to CHS Inc.	$	155,913		$	426,673		$	723,595

The accompanying notes are an integral part of the consolidated financial statements.

CHS Inc. and Subsidiaries

F-4

Table of Contents

Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITIES



	For the Years Ended August 31, 2017, 2016, and 2015
	Equity Certificates												Accumulated Other Comprehensive Loss
	Capital Equity Certificates			Nonpatronage Equity Certificates			Nonqualified Equity Certificates			Preferred Stock						Capital Reserves			Noncontrolling Interests			Total Equities
	(Dollars in thousands)
Balances, August 31, 2014	$	3,508,473		$	23,256		$	284,699		$	1,190,177		$	(156,757	)	$	1,598,660		$	18,336		$	6,466,844
Reversal of prior year patronage and redemption estimates	(267,088		)				(148,579		)							810,641						394,974
Distribution of 2014 patronage refunds	402,560						147,710									(821,496		)				(271,226		)
Redemptions of equities	(127,707		)	(199		)	(1,021		)							20						(128,907		)
Equities issued	12,365									977,363												989,728
Preferred stock dividends																(145,723		)				(145,723		)
Other, net	(2,723		)				119									6,967			(6,098		)	(1,735		)
Net income (loss)																781,045			(712		)	780,333
Other comprehensive income (loss), net of tax													(57,450		)							(57,450		)
Estimated 2015 patronage refunds	375,267															(625,444		)				(250,177		)
Estimated 2015 equity redemptions	(107,250		)																			(107,250		)
Balances, August 31, 2015	3,793,897			23,057			282,928			2,167,540			(214,207		)	1,604,670			11,526			7,669,411
Reversal of prior year patronage and redemption estimates	(268,017		)													625,444						357,427
Distribution of 2015 patronage refunds	375,506															(627,246		)				(251,740		)
Redemptions of equities	(22,948		)	(143		)	(820		)													(23,911		)
Equities issued	23,258																					23,258
Capital equity certificates exchanged for preferred stock	(76,756		)							76,756												—
Preferred stock dividends																(164,207		)				(164,207		)
Other, net	(1,248		)	(20		)	(341		)	(164		)				(1,505		)	2,987			(291		)
Net income (loss)																424,192			(223		)	423,969
Other comprehensive income (loss), net of tax													2,481									2,481
Estimated 2016 patronage refunds	167,381															(278,968		)				(111,587		)
Estimated 2016 equity redemptions	(58,560		)																			(58,560		)
Balances, August 31, 2016	3,932,513			22,894			281,767			2,244,132			(211,726		)	1,582,380			14,290			7,866,250
Reversal of prior year patronage and redemption estimates	(108,821		)													278,968						170,147
Distribution of 2016 patronage refunds	153,589															(257,468		)				(103,879		)
Redemptions of equities	(35,041		)	(389		)	(1,960		)													(37,390		)
Equities issued	3,194																					3,194
Capital equity certificates redeemed with preferred stock	(19,985		)							19,960						25						—
Preferred stock dividends																(139,759		)				(139,759		)
Other, net	(9,023		)	7,331			(753		)	(54		)				5,547			(1,065		)	1,983
Net income (loss)																127,857			(634		)	127,223
Other comprehensive income (loss), net of tax													28,056									28,056
Estimated 2017 patronage refunds							126,333									(126,333		)				—
Estimated 2017 equity redemptions	(10,000		)																			(10,000		)
Balances, August 31, 2017	$	3,906,426		$	29,836		$	405,387		$	2,264,038		$	(183,670	)	$	1,471,217		$	12,591		$	7,905,825

The accompanying notes are an integral part of the consolidated financial statements.

CHS Inc. and Subsidiaries

F-5

Table of Contents

Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF CASH FLOWS



	For the Years Ended August 31
	2017			2016			2015
	(Dollars in thousands)
Cash flows from operating activities:
Net income (loss)	$	127,223		$	423,969		$	780,333
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	480,223			447,492			355,422
Amortization of deferred major repair costs	67,058			73,483			45,953
(Income) loss from equity investments	(137,338		)	(175,777		)	(107,850		)
Distributions from equity investments	213,352			178,464			80,917
Unrealized (gain) loss on crack spread contingent liability	(15,051		)	(60,931		)	(36,310		)
Provision for doubtful accounts	177,969			57,200			2,806
Long-lived asset impairments	145,042			27,247			103,723
Reserve against supplier advance payments	130,705			—			—
Deferred taxes	(175,914		)	(24,178		)	30,304
Other, net	24,044			(15,444		)	(21,943		)
Changes in operating assets and liabilities, excluding the effects of acquisitions:
Receivables	121,630			46,405			314,313
Inventories	(293,549		)	338,662			71,073
Derivative assets	126,824			(20,257		)	100,715
Margin deposits	104,214			(37,115		)	(8,534		)
Supplier advance payments	(34,583		)	44,047			3,127
Other current assets and other long-term assets	(66,119		)	120,993			(87,426		)
Customer margin deposits and credit balances	(50,920		)	20,841			(106,788		)
Customer advance payments	(528		)	5,664			(223,463		)
Accounts payable and accrued expenses	197,445			(129,259		)	(558,120		)
Derivative liabilities	(183,287		)	36,283			(134,033		)
Other liabilities	(25,446		)	(94,291		)	(34,209		)
Net cash provided by (used in) operating activities	932,994			1,263,498			570,010
Cash flows from investing activities:
Acquisition of property, plant and equipment	(444,397		)	(692,780		)	(1,186,790		)
Expenditures for major repairs	(2,340		)	(19,610		)	(201,688		)
Investments in joint ventures and other	(16,645		)	(2,855,218		)	(64,259		)
Changes in CHS Capital notes receivable, net	322			(209,902		)	(188,183		)
Financing extended to customers	(67,225		)	(82,302		)	(39,995		)
Payments from customer financing	88,154			35,188			42,776
Business acquisitions, net of cash acquired	(3,674		)	(11,890		)	(305,213		)
Other investing activities, net	40,764			89,543			34,684
Net cash provided by (used in) investing activities	(405,041		)	(3,746,971		)	(1,908,668		)
Cash flows from financing activities:
Proceeds from lines of credit and long-term borrowings	37,295,236			31,586,968			8,954,420
Payments on lines of credit, long term-debt and capital lease obligations	(37,580,959		)	(29,232,842		)	(9,141,240		)
Mandatorily redeemable noncontrolling interest payments	—			(153,022		)	(65,981		)
Preferred stock issued	—			—			1,010,000
Preferred stock dividends paid	(167,642		)	(163,324		)	(133,710		)
Redemptions of equities	(35,268		)	(23,911		)	(128,907		)
Cash patronage dividends paid	(103,879		)	(251,740		)	(271,226		)
Other financing activities, net	(28,681		)	52,067			(69,528		)
Net cash provided by (used in) financing activities	(621,193		)	1,814,196			153,828
Effect of exchange rate changes on cash and cash equivalents	(4,694		)	(5,223		)	5,436
Net increase (decrease) in cash and cash equivalents	(97,934		)	(674,500		)	(1,179,394		)
Cash and cash equivalents at beginning of period	279,313			953,813			2,133,207
Cash and cash equivalents at end of period	$	181,379		$	279,313		$	953,813

The accompanying notes are an integral part of the consolidated financial statements.

CHS Inc. and Subsidiaries

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Note 1 Organization, Basis of Presentation and Significant Accounting Policies

Organization

CHS Inc. ("CHS", "we", "us", "our") is the nation’s leading integrated agricultural cooperative. As a cooperative, CHS is owned by farmers and ranchers and their member cooperatives ("members") across the United States. We also have preferred stockholders that own shares of our various series of preferred stock, which are each listed on the Global Select Market of the NASDAQ Stock Market LLC ("NASDAQ"). See Note 9, Equities for more detailed information.

We buy commodities from and provide products and services to individual agricultural producers, local cooperatives and other companies (including member and other non-member customers), both domestic and international. Those products and services include initial agricultural inputs such as fuels, farm supplies, crop nutrients and crop protection products; as well as agricultural outputs that include grains and oilseeds, grain and oilseed processing and food products, and ethanol production and marketing. A portion of our operations are conducted through equity investments and joint ventures whose operating results are not fully consolidated with our results; rather, a proportionate share of the income or loss from those entities is included as a component in our net income under the equity method of accounting.

Basis of Presentation

The consolidated financial statements include the accounts of CHS and all wholly-owned and majority-owned subsidiaries and limited liability companies. The effects of all significant intercompany transactions have been eliminated.

The Consolidated Statements of Operations include a separate line called “Reserve and impairment charges” for the twelve months ended August 31, 2017, 2016, and 2015, due to the materiality of certain charges incurred during the twelve months ended August 31, 2017. The charges relate to reserves recorded as a result of a trading partner of ours in Brazil entering into bankruptcy-like proceedings under Brazilian law, intangible and fixed asset impairment charges associated with our Ag segment, a fixed asset impairment charge related to an asset in our Energy segment and all bad debt and loan loss reserve charges. Prior year information has been revised to conform to the current presentation. See additional information related to the reserves and impairment charges in Note 2, Receivables, Note 5 , Property, Plant and Equipment , and Note 6 , Other Assets .

The notes to our consolidated financial statements refer to our Energy, Ag, Nitrogen Production and Foods reportable segments, as well as our Corporate and Other category, which represents an aggregation of individually immaterial operating segments. The Nitrogen Production reportable segment resulted from our investment in CF Industries Nitrogen, LLC ("CF Nitrogen") in February 2016. The Foods segment resulted from our investment in Ventura Foods, LLC ("Ventura Foods") becoming a significant operating segment in fiscal 2016. See Note 11, Segment Reporting for more information.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP 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. We base our estimates on assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Due to the inherent uncertainty involved in making estimates, actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates and assumptions.

Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid investments with original maturities of three months or less at the date of acquisition. The fair value of cash and cash equivalents approximates the carrying value because of the short maturity of the instruments.

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Inventories

Grain, processed grain, oilseed, processed oilseed and other minimally processed soy-based inventories are stated at net realizable value. These inventories are agricultural commodity inventories that are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms. Agricultural commodity inventories have quoted market prices in active markets, may be sold without significant further processing and have predictable and insignificant disposal costs. Changes in the net realizable value of merchandisable agricultural commodities inventories are recognized in earnings as a component of cost of goods sold.

All other inventories are stated at the lower of cost or net realizable value. Costs for inventories produced or modified by us through a manufacturing process include fixed and variable production and raw material costs, and in-bound freight costs for raw materials. Costs for inventories purchased for resale include the cost of products and freight incurred to place the products at our points of sale. The costs of certain energy inventories (wholesale refined products, crude oil and asphalt) are determined on the last-in, first-out ("LIFO") method; all other inventories of non-grain products purchased for resale are valued on the first-in, first-out ("FIFO") and average cost methods.

Derivative Financial Instruments and Hedging Activities

We enter into various derivative instruments to manage our exposure to movements primarily associated with agricultural commodity prices and freight costs, and to a lesser degree, foreign currency exchange rates and interest rates. Except for certain interest rate swap contracts, which are accounted for as cash flow hedges or fair value hedges, our derivative instruments represent economic hedges of price risk for which hedge accounting under Accounting Standards Codification ("ASC") Topic 815, Derivatives and Hedging , is not applied. Rather, the derivative instruments are recorded on our Consolidated Balance Sheets at fair value with changes in fair value being recorded directly to earnings, primarily within cost of goods sold in our Consolidated Statements of Operations. See Note 12, Derivative Financial Instruments and Hedging Activities and Note 13, Fair Value Measurements for additional information.

Although we have certain netting arrangements for our exchange-traded futures and options contracts and certain over-the-counter ("OTC") contracts, we have elected to report our derivative instruments on a gross basis on our Consolidated Balance Sheets under ASC Topic 210-20, Balance Sheet - Offsetting .

Margin Deposits

Many of our derivative contracts with futures and options brokers require us to make margin deposits of cash or other assets. Subsequent margin deposits may also be necessary when changes in commodity prices result in a loss on the contract value, to comply with applicable regulations. Our margin deposit assets are held by external brokers in segregated accounts to support the associated derivative contracts and may be used to fund or partially fund the settlement of those contracts as they expire. Similar to our derivative financial instruments, margin deposits are also reported on a gross basis.

Supplier Advance Payments

Supplier advance payments are typically for periods less than 12 months and primarily include amounts paid for in-transit grain purchases from suppliers and amounts paid to crop nutrient suppliers to lock in future supply and pricing.

Investments

The equity method of accounting is used for joint ventures and other investments in which we are able to exercise significant influence over the entity’s operations, but do not have a controlling interest in the entity. Various factors are considered when assessing significant influence, including our ownership interest, representation on the Board of Directors, voting rights, and the impact of commercial arrangements that may exist with the entity. Our equity in the income or loss of these equity method investments is recorded within Equity (income) loss from investments in the Consolidated Statements of Operations. We account for our investment in CF Nitrogen, LLC using the hypothetical liquidation at book value method which is discussed further in Note 4 , Investments.

The cost method of accounting is used for other investments in which we do not exercise significant influence. Investments in other cooperatives are stated at cost, plus patronage dividends received in the form of capital stock and other equities. Patronage dividends are recorded as a reduction to cost of goods sold at the time qualified written notices of allocation are received.

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Investments in other debt and equity securities are classified as available-for-sale financial instruments and are stated at fair value, with unrealized gains and losses included as a component of accumulated other comprehensive loss on our Consolidated Balance Sheets. Investments in debt and equity instruments are carried at amounts that approximate fair values.

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are provided on the straight-line method by charges to operations at rates based upon the expected useful lives of individual or groups of assets (generally 15 to 20 years for land improvements; 20 to 40 years for buildings; 5 to 20 years for machinery and equipment; and 3 to 10 years for office and other). Expenditures for maintenance and minor repairs and renewals are expensed, while the costs for major maintenance activities are capitalized and amortized on a straight-line basis over the period estimated to lapse until the next major maintenance activity occurs. We also capitalize and amortize eligible costs to acquire or develop internal-use software that are incurred during the application development stage. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from the related accounts and resulting gains or losses are reflected in operations.

Property, plant and equipment and other long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable. This evaluation of recoverability is based on various indicators, including the nature, future economic benefits and geographic locations of the assets, historical or future profitability measures, and other external market conditions. If these indicators suggest that the carrying amounts of an asset or asset group may not be recoverable, potential impairment is evaluated using undiscounted estimated future cash flows. Should the sum of the expected future net cash flows be less than the carrying value, an impairment loss would be recognized. An impairment loss would be measured by the amount by which the carrying value of the asset or asset group exceeds its fair value.

We have asset retirement obligations with respect to certain of our refineries and other assets due to various legal obligations to clean and/or dispose of the component parts at the time they are retired. In most cases, these assets can be used for extended and indeterminate periods of time, if they are properly maintained and/or upgraded. It is our practice and current intent to maintain refineries and related assets and to continue making improvements to those assets based on technological advances. As a result, we believe our refineries and related assets have indeterminate lives for purposes of estimating asset retirement obligations because dates or ranges of dates upon which we would retire a refinery and related assets cannot reasonably be estimated at this time. When a date or range of dates can reasonably be estimated for the retirement of any component part of a refinery or other asset, we will estimate the cost of performing the retirement activities and record a liability for the fair value of that future cost.

Major Maintenance Activities

Within our Energy segment, major maintenance activities (“turnarounds”) are performed at our Laurel, Montana and McPherson, Kansas refineries regularly. Turnarounds are the planned and required shutdowns of refinery processing units, which include the replacement or overhaul of equipment that have experienced decreased efficiency in resource conversion. Because turnarounds are performed to extend the life, increase the capacity, and/or improve the safety or efficiency of refinery processing assets, we follow the deferral method of accounting for turnarounds. Expenditures for turnarounds are capitalized (deferred) when incurred and amortized on a straight-line basis over a period of 2 to 4 years, which is the estimated time lapse between turnarounds. Should the estimated period between turnarounds change, we may be required to amortize the remaining cost of the turnaround over a shorter period, which would result in higher depreciation and amortization costs. Capitalized turnaround costs are included in other assets (long-term) on our Consolidated Balance Sheets and amortization expense related to the capitalized turnaround costs is included in cost of goods sold in our Consolidated Statements of Operations.

The selection of the deferral method, as opposed to expensing the turnaround costs when incurred, results in deferring recognition of the turnaround expenditures. The deferral method also results in the classification of the related cash outflows as investing activities in our Consolidated Statements of Cash Flows, whereas expensing these costs as incurred, would result in classifying the cash outflows as operating activities. Repair, maintenance and related labor costs are expensed as incurred and are included in operating cash flows.

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Goodwill and Other Intangible Assets

Goodwill and other intangible assets are included in other assets (long-term) on our Consolidated Balance Sheets. Goodwill represents the excess of cost over the fair value of identifiable assets acquired. Goodwill is tested for impairment on an annual basis as of July 31, or more frequently if events or circumstances occur which could indicate impairment. Goodwill is tested for impairment at the reporting unit level, which has been determined to be our operating segments or one level below our operating segments in certain instances. During the fourth quarter of fiscal year 2017, we voluntarily changed our annual goodwill impairment testing date from May 31 to July 31. We believe this change in the method of applying an accounting principle is preferable as the change better aligns our annual impairment testing procedures with year-end financial reporting and the annual long-range plan and forecasting process. In connection with the change in the annual goodwill impairment testing date, we performed the annual goodwill impairment testing procedures as of both May 31, 2017, and July 31, 2017, and no impairments were identified. This change did not accelerate, delay, avoid, or cause an impairment charge, nor did this change result in adjustments to previously issued financial statements. The change will be applied prospectively.

Other intangible assets consist primarily of customer lists, trademarks and non-compete agreements. Intangible assets subject to amortization are expensed over their respective useful lives, which generally range from 2 to 30 years. We have no material intangible assets with indefinite useful lives. See Note 6, Other Assets for more information on goodwill and other intangible assets.

We made acquisitions during the three years ended August 31, 2017, which were accounted for using the acquisition method of accounting. Operating results for these acquisitions were included in our consolidated financial statements beginning on the respective acquisition dates. The respective purchase prices were preliminarily allocated to the assets, liabilities and identifiable intangible assets acquired based upon the acquisition-date fair values. Any excess purchase price over the fair values of the acquired net assets acquired was recognized as goodwill. See Note 17, Acquisitions for more information on acquisition activity.

Revenue Recognition

We provide a wide variety of products and services, from agricultural inputs such as fuels, farm supplies and crop nutrients, to agricultural outputs that include grain and oilseed, processed grains and oilseeds and food products, and ethanol production and marketing. We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Sales are generally recognized upon transfer of title, which could occur either upon shipment to or receipt by the customer, depending upon the terms of the transaction. Shipping and handling amounts billed to a customer as part of a sales transaction are included in revenues and the related costs are included in cost of goods sold.

Environmental Expenditures

We are subject to various federal, state, and local environmental laws and regulations. Environmental expenditures are expensed or capitalized depending on their future economic benefit. Liabilities, including legal costs, related to remediation of contaminated properties are recognized when the related costs are considered probable and can be reasonably estimated. Estimates of environmental costs are based on current available facts, existing technology, undiscounted site-specific costs and currently enacted laws and regulations. Recoveries, if any, are recorded in the period in which recovery is received. Liabilities are monitored and adjusted as new facts or changes in law or technology occur.

Income Taxes

CHS is a nonexempt agricultural cooperative and files a consolidated federal income tax return with our 80% or more owned subsidiaries. We are subject to tax on income from nonpatronage sources, non-qualified patronage distributions and undistributed patronage-sourced income. Income tax expense is primarily the current tax payable for the period and the change during the period in certain deferred tax assets and liabilities. Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for federal and state income tax purposes, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

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Recent Accounting Pronouncements

Adopted

In January 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update ("ASU") No. 2017-04, Simplifying the Test for Goodwill Impairment . The amendments within this ASU eliminate Step 2 of the goodwill impairment test, which requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under the amended standard, goodwill impairment is instead measured using Step 1 of the goodwill impairment test with goodwill impairment being equal to the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. We elected to early adopt ASU No. 2017-04 during the second quarter of fiscal 2017. The amendments have been applied to the annual goodwill impairment testing performed as of May 31, 2017, and July 31, 2017, and will be applied prospectively to all future goodwill impairment tests performed on an interim or annual basis.

In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , which simplifies the presentation of debt issuance costs. This ASU requires the presentation of debt issuance costs on the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred financing cost. This ASU was effective for us beginning September 1, 2016, for our fiscal year 2017 and for interim periods within that fiscal year. As a result, $5.6 million of deferred issuance costs related to private placement debt and bank financing have been reclassified from other assets to long-term debt as of August 31, 2016 .

In August 2015, the FASB issued ASU No. 2015-15, Interest-Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements , which codifies an SEC staff announcement that entities are permitted to defer and present debt issuance costs related to line of credit arrangements as assets. ASU No. 2015-15 was effective immediately. At August 31, 2016, we had unamortized deferred financing costs related to our line of credit arrangements, and we will continue to present debt issuance costs related to line of credit arrangements in other assets in our Consolidated Balance Sheets.

Not Yet Adopted

In August 2017, the FASB issued ASU No. 2017-12 , Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . This ASU is intended to improve the financial reporting of hedging relationships to better represent the economic results of an entity’s risk management activities in its financial statements and make certain improvements to simplify the application of the hedge accounting guidance. The amendments in this ASU will make more financial and nonfinancial hedging strategies eligible for hedge accounting, amend the presentation and disclosure requirements and change how entities assess effectiveness. Entities are required to apply this ASU's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This ASU is effective for us beginning September 1, 2019, for our fiscal year 2020 and for interim periods within that fiscal year. We are currently evaluating the impact the adoption will have on our consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Costs and Net Postretirement Benefit Cost. This ASU changes the presentation of net periodic pension cost and net periodic postretirement benefit cost in the income statement. This ASU requires that the service cost component should be included in the same income statement line item as other compensation costs arising from services rendered by the employees during the period. The other components of net periodic benefit cost should be presented in the income statement separately outside of operating income if that subtotal is presented. Additionally, only service cost may be capitalized in assets. This ASU is effective for us beginning September 1, 2018, for our fiscal year 2019 and for interim periods within that fiscal year. Early adoption is permitted as of the beginning of an annual period for which interim financial statements have not been issued or made available for issuance. The guidance on the presentation of the components of net periodic benefit cost in the income statement should be applied retrospectively and the guidance regarding the capitalization of the service cost component in assets should be applied prospectively. The adoption of this amended guidance is not expected to have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805) : Clarifying the Definition of a Business . The amendments within this ASU narrow the existing definition of a business and provide a more robust framework for evaluating whether a transaction should be accounted for as an acquisition (or disposal) of assets or a business. The definition of a business impacts various areas of accounting, including acquisitions, disposals and goodwill. Under the new guidance, fewer acquisitions are expected to be considered businesses. This ASU is effective for us beginning September 1,

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2018, for our fiscal year 2019 and for interim periods within that fiscal year. Early adoption is permitted and the guidance should be applied prospectively to transactions following the adoption date. The adoption of this amended guidance is not expected to have a material impact on our consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . This ASU is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows. This ASU is effective for us beginning September 1, 2018, for our fiscal year 2019 and for interim periods within that fiscal year. Early adoption is permitted, including in an interim period. The amendments in this ASU should be applied retrospectively to all periods presented. The adoption of this amended guidance is not expected to have a material impact on our consolidated statement of cash flows.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes - Intra-Entity Transfers of Assets Other Than Inventory (Topic 740). This ASU is intended to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory by requiring an entity to recognize the income tax consequences when a transfer occurs, instead of when an asset is sold to an outside party. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. This ASU is effective for us beginning September 1, 2018, for our fiscal year 2019 and for interim periods within that fiscal year. Early adoption is permitted as of the beginning of an annual reporting period for which interim or annual financial statements have not been issued. The adoption of this amended guidance is not expected to have a material impact on our consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU is intended to reduce existing diversity in practice in how certain cash receipts and payments are presented and classified in the statement of cash flows. This ASU is effective for us beginning September 1, 2018, for our fiscal year 2019 and for interim periods within that fiscal year. The adoption of this amended guidance is not expected to have a material impact on our consolidated statement of cash flows.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments . The amendments in this ASU introduce a new approach, based on expected losses, to estimate credit losses on certain types of financial instruments. This ASU is intended to provide financial statement users with more decision-useful information about the expected credit losses associated with most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures. Entities are required to apply this ASU’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This ASU is effective for us beginning September 1, 2020, for our fiscal year 2021 and for interim periods within that fiscal year. We are currently evaluating the impact the adoption will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which replaces the existing guidance in ASC 840 - Leases . The amendments within this ASU introduce a lessee model requiring entities to recognize assets and liabilities for most leases, but continue recognizing the associated expenses in a manner similar to existing accounting guidance. This ASU does not make fundamental changes to existing lessor accounting; however, it does modify what constitutes a sales-type or direct financing lease and the related accounting, and aligns a number of the underlying principles with those of the new revenue standard, ASU No. 2014-09. The guidance also eliminates existing real estate-specific provisions and requires expanded qualitative and quantitative disclosures. Entities are required to apply this ASU’s provisions using a modified retrospective approach at the beginning of the earliest comparative period presented in the year of adoption. This ASU is effective for us beginning September 1, 2019, for our fiscal year 2020 and for interim periods within that fiscal year. We are currently evaluating the impact the adoption will have on our consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . The amendments within this ASU, as well as within additional clarifying ASUs issued by the FASB, provide a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new revenue recognition guidance includes a five-step model for the recognition of revenue, including (1) identifying the contract with a customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue when (or as) an entity satisfies a performance obligation. The new revenue recognition guidance also specifies the accounting for certain costs to obtain or fulfill a contract with a customer and requires expanded disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We have completed an initial assessment of our revenue streams and do not believe that the new revenue recognition guidance will have a material impact on our consolidated financial statements. Certain revenue streams are expected to fall within the scope of the new revenue

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recognition guidance; however, a substantial portion of our revenue falls outside the scope of the new revenue recognition guidance and will continue to follow existing guidance, primarily ASC 815, Derivatives and Hedging . We are continuing to evaluate the impact of the new revenue recognition guidance, including potential changes to business practices and/or contractual terms for in scope revenue streams, as well as the scope of expanded disclosures related to revenue. We expect to complete our final evaluation and implementation of the new revenue recognition guidance throughout fiscal 2018, which will allow us to adopt ASU No. 2014-09 and the related ASUs on September 1, 2018, in the first quarter of fiscal 2019, using the modified retrospective method.

Note 2 Receivables

Receivables as of August 31, 2017 , and 2016 , are as follows:



	2017		2016
	(Dollars in thousands)
Trade accounts receivable	$	1,234,500	$	1,804,646
CHS Capital short-term notes receivable	164,807		858,805
Deferred purchase price receivable	202,947		—
Other	493,104		380,956
	2,095,358		3,044,407
Less allowances and reserves	225,726		163,644
Total receivables	$	1,869,632	$	2,880,763

Trade Accounts

Trade accounts receivable are initially recorded at a selling price, which approximates fair value, upon the sale of goods or services to customers. Subsequently, trade accounts receivable are carried at net realizable value, which includes an allowance for estimated uncollectible amounts. We calculate this allowance based on our history of write-offs, level of past due accounts, and our relationships with, and the economic status of, our customers. Receivables from related parties are disclosed in Note 16, Related Party Transactions .

During the third quarter of fiscal 2017, a trading partner of ours in Brazil entered bankruptcy-like proceedings under Brazilian law, resulting in a $98.7 million increase to our accounts receivable reserve. We also recorded a reserve of approximately $130.7 million related to supplier advance payments held by this trading partner, which is included in supplier advance payments in the Consolidated Balance Sheets. We have initiated efforts to recover these losses; however, as such actions are in the early stages and are considered neither probable nor estimable, no recoveries have been recorded as of the date of this Annual Report on Form 10-K.

CHS Capital

Notes Receivable

CHS Capital, our wholly-owned subsidiary, has short-term notes receivable from commercial and producer borrowers. The short-term notes receivable have maturity terms of 12 months or less and are reported at their outstanding unpaid principal balances, adjusted for the allowance of loan losses, as CHS Capital has the intent and ability to hold the applicable loans for the foreseeable future or until maturity or pay-off. The carrying value of CHS Capital short-term notes receivable approximates fair value, given the notes' short duration and the use of market pricing adjusted for risk.

The notes receivable from commercial borrowers are collateralized by various combinations of mortgages, personal property, accounts and notes receivable, inventories and assignments of certain regional cooperative’s capital stock. These loans are primarily originated in the states of Minnesota, Wisconsin and North Dakota. CHS Capital also has loans receivable from producer borrowers which are collateralized by various combinations of growing crops, livestock, inventories, accounts receivable, personal property and supplemental mortgages and are originated in the same states as the commercial notes with the addition of Michigan.

In addition to the short-term balances included in the table above, CHS Capital had long-term notes receivable, with durations of generally not more than 10 years , totaling $ 17.0 million and $ 322.4 million at August 31, 2017 , and 2016 , respectively. The long-term notes receivable are included in Other assets on our Consolidated Balance Sheets. As of August 31,

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2017 , and 2016 , the commercial notes represented 17% and 26% , respectively, and the producer notes represented 83% and 74% , respectively, of the total CHS Capital notes receivable.

The decrease in short-term and long-term notes receivable is the result of the activities in the Troubled Debt Restructurings and Sale of Receivables sections described below.

CHS Capital has commitments to extend credit to customers if there are no violations of any contractually established conditions. As of August 31, 2017 , CHS Capital's customers have additional available credit of $ 966.6 million .

Allowance for Loan Losses and Impairments

CHS Capital maintains an allowance for loan losses which is the estimate of potential incurred losses inherent in the loans receivable portfolio. In accordance with FASB ASC 450-20, Accounting for Loss Contingencies, and ASC 310-10, Accounting by Creditors for Impairment of a Loan , the allowance for loan losses consists of general and specific components. The general component is based on historical loss experience and qualitative factors addressing operational risks and industry trends. The specific component relates to loans receivable that are classified as impaired. Additions to the allowance for loan losses are reflected within reserve and impairment charges in the Consolidated Statements of Operations. The portion of loans receivable deemed uncollectible is charged off against the allowance. Recoveries of previously charged off amounts increase the allowance for loan losses. The amount of CHS Capital notes that were past due was not significant at any reporting date presented. Specific and general loan loss reserves related to CHS Capital totaled $4.2 million and $45.8 million as of August 31, 2017 , and August 31, 2016 , respectively. The reduction in the reserve is related to the single producer borrower agreement and the sale of receivables, which are discussed in the Troubled Debt Restructurings and Sale of Receivables sections below.

Interest Income

Interest income is recognized on the accrual basis using a method that computes simple interest daily. The accrual of interest on commercial loans receivable is discontinued at the time the commercial loan receivable is 90 days past due unless the credit is well-collateralized and in process of collection. Past due status is based on contractual terms of the loan. Producer loans receivable are placed in non-accrual status based on estimates and analysis due to the annual debt service terms inherent to CHS Capital’s producer loans. In all cases, loans are placed in nonaccrual status or charged off at an earlier date if collection of principal or interest is considered doubtful.

Troubled Debt Restructurings

A restructuring of a loan constitutes a troubled debt restructuring, or restructured loan, if the creditor for economic reasons related to the debtor’s financial difficulties grants a concession to the debtor that it would otherwise not consider. Concessions vary by program and borrower. Concessions may include interest rate reductions, term extensions, payment deferrals, or the acceptance of additional collateral in lieu of payments. In limited circumstances, principal may be forgiven. When a restructured loan constitutes a troubled debt restructuring, CHS includes these loans within its impaired loans.

As of August 31, 2016, a single producer borrower accounted for 20% of the total outstanding CHS Capital notes receivable. During the third quarter of fiscal 2017, CHS Capital concluded a transaction with the single producer borrower whereby CHS Capital obtained from the borrower title to approximately 14,000 acres of land and improvements that, prior to the transaction, was owned by the borrower and served as collateral for the outstanding loans to CHS Capital. The amount corresponding to the fair value of the land and improvements was credited against the notes receivable from this single producer borrower. As a result of this arrangement, all remaining outstanding notes receivable balances and corresponding reserves related to this single producer borrower were removed from the balance sheet of CHS Capital, with no impact to the Consolidated Statements of Operations. Subsequent to August 31, 2017, CHS Capital sold all rights to the outstanding notes receivable which had been previously removed from the balance sheet as they were deemed uncollectible. Through this sale we realized a small gain in the first quarter of fiscal year 2018. As of August 31, 2017, and 2016, CHS Capital had no other significant troubled debt restructurings and no other third-party borrowers that accounted for more than 10% of the total CHS Capital notes receivable.

Sale of Receivables

Receivables Securitization Facility

On July 18, 2017, we amended an existing receivables and loans securitization facility (“Securitization Facility”) with certain unaffiliated financial institutions (the "Purchasers"). Under the Securitization Facility, we and certain of our subsidiaries

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sell trade accounts and notes receivable (the “Receivables”) to Cofina Funding, LLC (“Cofina”), a wholly-owned bankruptcy-remote indirect subsidiary of CHS. Cofina in turn sells the purchased Receivables in their entirety to the Purchasers. Prior to amending the Securitization Facility in July 2017, the transfer of Receivables was accounted for as a secured borrowing. Under the terms of the amended Securitization Facility CHS accounts for Receivables sold under the Facility as a sale of financial assets pursuant to ASC 860, Transfers and Servicing and derecognizes the sold Receivables from its Consolidated Balance Sheets.

Sales of Receivables by Cofina occur continuously and are settled with the Purchasers on a monthly basis. The proceeds from the sale of these Receivables comprise a combination of cash and a deferred purchase price (“DPP”) receivable. The DPP receivable is ultimately realized by CHS following the collection of the underlying Receivables sold to the Purchasers. The amount available under the Securitization Facility fluctuates over time based on the total amount of eligible Receivables generated during the normal course of business, with maximum availability of $700.0 million . As of August 31, 2017, the total availability under the Securitization Facility was $618.0 million , of which all has been utilized. The Securitization Facility terminates on July 17, 2018, but may be extended. The Company uses the proceeds from the sale of Receivables under the Securitization Facility for general corporate purposes.

We have no retained interests in the transferred Receivables, other than our right to the DPP receivable and collection and administrative services. The DPP receivable is recorded at fair value within the Consolidated Balance Sheets, including a current portion within receivables and a long-term portion within other assets. At the time of the amendment to the Securitization Facility in July 2017, $1.1 billion of Receivables and $554.0 million of securitized debt were removed from the Consolidated Balance Sheets and a DPP receivable of $580.5 million was recognized. These amounts have been reflected as non-cash transactions in the Consolidated Statements of Cash Flows and disclosed within Note 15, Supplemental Cash Flow and Other Information . Subsequent cash receipts related to the DPP receivable have been reflected as investing activities and additional sales of Receivables under the Securitization Facility are reflected in operating or investing activities, based on the underlying Receivable, in our Consolidated Statements of Cash Flows. Losses incurred on the sale of Receivables are recorded in interest expense and fees received related to the servicing of the Receivables are recorded in other income (loss) in the Consolidated Statements of Operations. We consider the fees received adequate compensation for services rendered, and accordingly have recorded no servicing asset or liability.

The fair value of the DPP receivable is determined by discounting the expected cash flows to be received based on unobservable inputs consisting of the face amount of the Receivables adjusted for anticipated credit losses. The DPP receivable is being measured like an investment in debt securities classified as available for sale, with changes to the fair value being recorded in other comprehensive income in accordance with ASC 320 - Investments - debt and equity securities . Our risk of loss following the transfer of Receivables under the Securitization Facility is limited to the DPP receivable outstanding and any short-falls in collections for specified non-credit related reasons after sale. Payment of the DPP is not subject to significant risks other than delinquencies and credit losses on accounts receivable sold under the Securitization Facility.

The following table is a reconciliation of the beginning and ending balances of the DPP receivable for the year ended August 31, 2017 :



	2017
	(Dollars in thousands)
Balance - beginning of year	$	—
Transfer of Receivables	580,509
Monthly settlements, net	(31,907		)
Balance - end of year	$	548,602

There was no DPP as of August 31, 2016, and therefore, no comparative period is included in the table above.

Loan Participations

During the three months ending August 31, 2017 CHS Capital sold $71.5 million of notes receivable to numerous counterparties under a master participation agreement. The sale resulted in the removal of the notes receivable from the Consolidated Balance Sheet. CHS Capital has no retained interests in the transferred notes receivable, other than collection and administrative services. The proceeds from the sale of the notes receivable have been included in investing activities in the Consolidated Statement of Cash Flows. Fees received related to the servicing of the notes receivables are recorded in other

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

income in the Consolidated Statements of Operations. We consider the fees received adequate compensation for services rendered, and accordingly have recorded no servicing asset or liability.

Other Receivables

Other receivables are comprised of certain other amounts recorded in the normal course of business, including receivables related to valued added taxes and pre-crop financing, primarily to Brazilian farmers, to finance a portion of supplier production costs. CHS does not bear any of the costs or operational risks associated with the related growing crops. The financing is largely collateralized by future crops and physical assets of the suppliers, carries a local market interest rate and settles when the farmer’s crop is harvested and sold.

Note 3 Inventories

Inventories as of August 31, 2017 , and 2016 , are as follows:



	2017		2016
	(Dollars in thousands)
Grain and oilseed	$	1,145,285	$	937,258
Energy	755,886		729,695
Crop nutrients	248,699		217,521
Feed and farm supplies	353,130		417,431
Processed grain and oilseed	49,723		48,930
Other	23,862		19,864
Total inventories	$	2,576,585	$	2,370,699

As of August 31, 2017 , we valued approximately 19% of inventories, primarily crude oil and refined fuels within our Energy segment, using the lower of cost, determined on the LIFO method, or net realizable value ( 19% as of August 31, 2016 ). If the FIFO method of accounting had been used, inventories would have been higher than the reported amount by $ 186.2 million and $ 93.9 million as of August 31, 2017 , and 2016 , respectively.

Note 4 Investments

Investments as of August 31, 2017 , and 2016 , are as follows:



	2017		2016
	(Dollars in thousands)
Equity method investments:
CF Industries Nitrogen, LLC	$	2,756,076	$	2,796,323
Ventura Foods, LLC	347,016		369,487
Ardent Mills, LLC	206,529		194,986
TEMCO, LLC	41,323		44,578
Other equity method investments	268,444		263,025
Cost method investments	131,605		127,577
Total investments	$	3,750,993	$	3,795,976

Joint ventures and other investments, in which we have significant ownership and influence, but not control, are accounted for in our consolidated financial statements using the equity method of accounting. Our significant equity method investments are summarized below.

On February 1, 2016, we invested $2.8 billion in CF Nitrogen, commencing our strategic venture with CF Industries Holdings, Inc. The investment consists of an 11.4% membership interest (based on product tons) in CF Nitrogen. We also entered into an 80 -year supply agreement that entitles us to purchase up to 1.1 million tons of granular urea and 580,000 tons of urea ammonium nitrate ("UAN") annually from CF Nitrogen for ratable delivery. Our purchases under the supply agreement

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are based on prevailing market prices and we receive semi-annual cash distributions (in January and July of each year) from CF Nitrogen via our membership interest. These distributions are based on actual volumes purchased from CF Nitrogen under the strategic venture and will have the effect of reducing our investment to zero over 80 years on a straight-line basis. We account for this investment using the hypothetical liquidation at book value method, recognizing our share of the earnings and losses of CF Nitrogen based upon our contractual claims on the entity's net assets pursuant to the liquidation provisions of CF Nitrogen's Limited Liability Company Agreement, adjusted for the semi-annual cash distributions. For the years ended August 31, 2017 and 2016 , these amounts were $66.5 million and $74.7 million , respectively, and are included as equity income from investments in our Nitrogen Production segment.

The following tables provide aggregate summarized audited financial information for CF Nitrogen for the balance sheets as of August 31, 2017 , and 2016 , and the statements of operations for the twelve months ended August 31, 2017 , and the seven months ended August 31, 2016 :



	2017		2016
	(Dollars in thousands)
Current assets	$	394,089	$	534,878
Non-current assets	7,314,629		7,043,121
Current liabilities	390,206		556,696
Non-current liabilities	6		—



	2017		2016
	(Dollars in thousands)
Net sales	$	2,051,159	$	1,027,142
Gross profit	195,142		243,911
Net earnings	123,965		186,665
Earnings attributable to CHS Inc.	66,530		74,700

We have a 50% interest in Ventura Foods, LLC ("Ventura Foods"), a joint venture which produces and distributes primarily vegetable oil-based products, and which constitutes our Foods segment. We account for Ventura Foods as an equity method investment, and as of August 31, 2017 , our carrying value of Ventura Foods exceeded our share of its equity by $12.9 million , which represents equity method goodwill.

We have a 12% interest in Ardent Mills, LLC ("Ardent Mills"), a joint venture with Cargill Incorporated ("Cargill") and ConAgra Foods, Inc., which combines the North American flour milling operations of the three parent companies. We account for Ardent Mills as an equity method investment included in Corporate and Other.

TEMCO, LLC ("TEMCO") is owned and governed by Cargill ( 50% ) and CHS ( 50% ). Both owners have committed to sell all of their feedgrains, wheat, oilseeds and by-product origination that are tributary to the Pacific Northwest, United States ("Pacific Northwest") to TEMCO and to use TEMCO as their exclusive export-marketing vehicle for such grains exported through the Pacific Northwest through January 2037. We account for TEMCO as an equity method investment included in our Ag segment.

The following tables provide aggregate summarized audited financial information for our major equity method investments in Ventura Foods, Ardent Mills and TEMCO for balance sheets as of August 31, 2017 , and 2016 , and statements of operations for the twelve months ended August 31, 2017 , 2016 and 2015 :



	2017		2016
	(Dollars in thousands)
Current assets	$	1,562,978	$	1,638,780
Non-current assets	2,524,053		2,495,955
Current liabilities	748,028		836,544
Non-current liabilities	865,078		853,549

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	2017		2016		2015
	(Dollars in thousands)
Net sales	$	9,901,150	$	8,776,261	$	9,054,677
Gross profit	700,737		674,181		754,375
Net earnings	258,616		238,870		313,664
Earnings attributable to CHS Inc.	57,461		75,858		81,101

Our investments in equity method investees other than the four entities described above are not significant in relation to our consolidated financial statements, either individually or in the aggregate.

Note 5 Property, Plant and Equipment

As of August 31, 2017 , and 2016 , major classes of property, plant and equipment, which include capital lease assets, consisted of the amounts in the table below.



	2017		2016
	(Dollars in thousands)
Land and land improvements	$	357,829	$	266,016
Buildings	1,030,478		1,040,943
Machinery and equipment	6,950,435		6,747,865
Office and other	235,361		250,879
Construction in progress	327,682		523,817
	8,901,785		8,829,520
Less accumulated depreciation and amortization	3,545,351		3,341,197
Total property, plant and equipment	$	5,356,434	$	5,488,323

We have various assets under capital leases totaling $58.2 million and $206.3 million as of August 31, 2017 , and 2016 , respectively. Accumulated amortization on assets under capital leases was $27.4 million and $103.3 million as of August 31, 2017 , and 2016 , respectively. During the fourth quarter of fiscal 2017, we completed a buyout of various capital leases for approximately $39.6 million . The various capital leases represented approximately 58% of our total capital lease obligations.

The following is a schedule by fiscal years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of August 31, 2017 :



	(Dollars in thousands)
2018	$	6,867
2019	6,150
2020	4,728
2021	4,525
2022	3,945
Thereafter	13,285
Total minimum future lease payments	39,500
Less amount representing interest	6,425
Present value of net minimum lease payments	$	33,075

We announced in September 2014 that our Board of Directors had approved plans to begin construction of a fertilizer manufacturing plant in Spiritwood, North Dakota that was anticipated to cost more than $3.0 billion . In August 2015, we made the decision to not move forward with the construction of the Spiritwood facility and evaluated the assets and other capitalized costs related to the project for recoverability under ASC Topic 360-10. Consequently, we concluded that these assets were impaired and we recorded an overall charge of $116.5 million in reserve and impairment charges in our Ag segment. This charge was primarily comprised of the impairment of construction-in-progress, land and equipment totaling $94.3 million . The

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remainder of the charge included the impairment of other assets and various contract termination costs associated with the cessation of the project.

During the fourth quarter of fiscal 2017 our Ag segment recorded an impairment charge of $30.4 million , which is included in the reserve and impairment charges line of the Consolidated Statements of Operations. The impairment resulted from the reduction in the fair value of agricultural assets held, which was determined using a market based approach.

Depreciation expense, including amortization of capital lease assets, for the years ended August 31, 2017 , 2016 , and 2015 , was $ 475.9 million , $ 437.6 million and $ 344.4 million , respectively.

Note 6 Other Assets

Other assets as of August 31, 2017 , and 2016 , are as follows:



	2017		2016
	(Dollars in thousands)
Goodwill	$	154,055	$	160,414
Customer lists, trademarks and other intangible assets	33,330		44,766
Notes receivable	51,596		358,096
Deferred purchase price receivable	345,655		—
Long-term derivative assets	196,913		—
Prepaid pension and other benefits	122,433		120,693
Capitalized major maintenance	105,006		169,054
Cash value life insurance	118,677		112,193
Other	124,137		127,440
	$	1,251,802	$	1,092,656

Changes in the net carrying amount of goodwill for the years ended August 31, 2017 , and 2016, by segment, are as follows:



	Energy		Ag			Corporate and Other			Total
	(Dollars in thousands)
Balances, August 31, 2015	$	552	$	142,665		$	6,898		$	150,115
Goodwill acquired during the period	—		5,726			4,048			9,774
Effect of foreign currency translation adjustments	—		1,220			—			1,220
Goodwill disposed due to sale of business	—		(695		)	—			(695		)
Balances, August 31, 2016	$	552	$	148,916		$	10,946		$	160,414
Effect of foreign currency translation adjustments	—		121			—			121
Impairment	—		(5,542		)	—			(5,542		)
Other	—		(566		)	(372		)	(938		)
Balances, August 31, 2017	$	552	$	142,929		$	10,574		$	154,055

No goodwill has been allocated to our Nitrogen Production or Foods segments, which consist of investments accounted for under the equity method.

All long-lived assets, including property, plant and equipment, goodwill, investments in unconsolidated affiliates and other identifiable intangible assets, are evaluated for impairment in accordance with U.S. GAAP. Goodwill is evaluated for impairment annually as of July 31. All long-lived assets, including goodwill, are also evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group or reporting unit may not be recoverable. No impairments were identified as a result of CHS’s annual goodwill analyses performed as of May 31, 2017, or July 31, 2017. See Note 1, Organization, Basis of Presentation and Significant Accounting Policies for further details related to our change in annual goodwill impairment testing.

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During the three months ended May 31, 2017, certain assets and liabilities associated with a disposal group in our Ag segment were classified as held for sale, including $5.5 million of goodwill allocated to the disposal group on a relative fair value basis. As a result of an impairment test performed over the disposal group, an impairment charge of $51.8 million which includes the allocated goodwill, was recorded in the reserve and impairment charges line item in the Consolidated Statements of Operations for the three and nine months ended May 31, 2017. During the fourth quarter of fiscal 2017, an additional impairment was recorded for $26.9 million based on subsequent developments and circumstances. As of August 31, 2017 , the assets remaining within the disposal group primarily include property, plant and equipment of $8.2 million , inventories of $20.5 million , and accounts receivable of $6.3 million . This disposal group represents assets being sold as part of a broader asset portfolio review project. Negotiations for the sale of these assets are ongoing and we believe their sale will be consummated within the next 12 months. The held for sale assets and liabilities are recorded in other current assets and accounts payable in our Consolidated Balance Sheet as of August 31, 2017 .

During the year ended August 31, 2016, we had acquisitions which resulted in $9.8 million of goodwill, for which we paid cash consideration of $11.9 million . These acquisitions were not material, individually or in aggregate, to our consolidated financial statements. During the year ended August 31, 2016, we disposed of a business resulting in a reduction of $0.7 million of goodwill.

Intangible assets subject to amortization primarily include customer lists, trademarks and non-compete agreements, and are amortized over their respective useful lives (ranging from 2 to 30 years). Information regarding intangible assets included in other assets on our Consolidated Balance Sheets is as follows:



	August 31, 2017							August 31, 2016
	Carrying Amount		Accumulated Amortization			Net		Carrying Amount		Accumulated Amortization			Net
	(Dollars in thousands)
Customer lists	$	46,180	$	(14,695	)	$	31,485	$	51,554	$	(15,550	)	$	36,004
Trademarks and other intangible assets	23,623		(21,778		)	1,845		35,015		(26,253		)	8,762
Total intangible assets	$	69,803	$	(36,473	)	$	33,330	$	86,569	$	(41,803	)	$	44,766

During the years ended August 31, 2017 , and 2016 , intangible assets acquired totaled $0.5 million and $2.8 million , respectively, and were primarily within our Ag segment.

Intangible assets amortization expense for the years ended August 31, 2017 , 2016 , and 2015 , was $4.3 million , $6.1 million and $7.3 million , respectively. The estimated annual amortization expense related to intangible assets subject to amortization for the next five years is as follows:



	(Dollars in thousands)
Year 1	$	3,396
Year 2	3,394
Year 3	3,152
Year 4	3,069
Year 5	2,828
Thereafter	17,395
Total	$	33,234

The costs of turnarounds in our Energy segment are deferred when incurred and amortized on a straight-line basis over the period estimated to lapse until the next turnaround occurs, which is generally 2 to 4 years. Capitalized amounts are included in other assets on our Consolidated Balance Sheets and amortization expense related to turnaround costs is included in cost of goods sold in our Consolidated Statements of Operations. Activity related to capitalized major maintenance costs is summarized below:



	Balance at Beginning of Year		Cost Deferred		Amortization			Balance at End of Year
	(Dollars in thousands)
2017	$	169,054	$	3,010	$	(67,058	)	$	105,006
2016	241,588		949		(73,483		)	169,054
2015	67,643		219,898		(45,953		)	241,588

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Note 7 Notes Payable and Long-Term Debt

Our notes payable and long-term debt are subject to various restrictive requirements for maintenance of minimum consolidated net worth and other financial ratios. We were in compliance with our debt covenants as of August 31, 2017 .

Notes Payable

Notes payable as of August 31, 2017 , and 2016 , consisted of the following:



	Weighted-average Interest Rate
	2017	2016	2017		2016
			(Dollars in thousands)
Notes payable	2.40%	1.72%	$	1,695,423	$	1,803,174
CHS Capital notes payable	1.93%	1.31%	292,792		928,305
Total notes payable			$	1,988,215	$	2,731,479

In September 2015, we amended and restated our primary committed line of credit which is a five -year, unsecured revolving credit facility with a syndication of domestic and international banks.

In December 2015, we entered into three bilateral, uncommitted revolving credit facilities, of which one remains. Amounts borrowed under these short-term credit facilities are used to fund our working capital. The following table summarizes our primary lines of credit as of August 31, 2017 , and 2016 :



Revolving Credit Facilities	Maturities	Total Capacity		Borrowings Outstanding		Interest Rates
		2017		2017	2016
		(Dollars in thousands)
Committed Five-Year Unsecured Facility	2020	$	3,000,000	$480,000	$700,000	LIBOR+0.00% to 1.45%
Uncommitted Bilateral Facilities	2017	250,000		250,000	300,000	LIBOR+0.00% to 1.05%

In addition to our primary revolving lines of credit, we have a three -year $325.0 million committed revolving pre-export credit facility for CHS Agronegocio Industria e Comercio Ltda ("CHS Agronegocio"), our wholly-owned subsidiary, to provide financing for its working capital needs arising from its purchases and sales of grains, fertilizers and other agricultural products which expires in April 2019. As of August 31, 2017 , the outstanding balance under the facility was $250.0 million .

As of August 31, 2017 , our wholly-owned subsidiaries, CHS Europe S.a.r.l. and CHS Agronegocio, had uncommitted lines of credit with $433.9 million outstanding. In addition, our other international subsidiaries had lines of credit with a total of $168.4 million outstanding as of August 31, 2017 , of which $15.4 million was collateralized.

We also maintain an uncommitted bilateral facility available to multiple subsidiaries with an outstanding balance under the facility of $100.0 million as of August 31, 2017 . Miscellaneous short-term notes payable totaled $13.1 million as of August 31, 2017 .

CHS Capital Notes Payable

On July 18, 2017, we amended the facility with certain unaffiliated financial institutions. Under the Securitization Facility, CHS Capital and CHS both sell eligible Receivables they have originated to Cofina, a wholly owned, bankruptcy-remote, indirect subsidiary of CHS. Cofina in turn sells the purchased Receivables in their entirety to the Purchasers. Prior to the amended Securitization Facility in July 2017, the transfer of Receivables was accounted for as a secured borrowing. Under the terms of the amended Securitization Facility, CHS accounts for Receivables sold under the facility as a sale of financial assets and derecognizes the sold Receivables from its Consolidated Balance Sheets. The amount available under the Facility fluctuates over time based on the total amount of eligible Receivables generated during the normal course of business, with maximum availability of $700.0 million . As of August 31, 2017, the total availability under the Securitization Facility was $618.0 million , of which all has been utilized.

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CHS Capital has available credit under master participation agreements with numerous counterparties. Prior to the fourth quarter of fiscal 2017 all borrowings under these agreements were accounted for as secured borrowings. During the fourth quarter of fiscal 2017 certain of these agreements were amended resulting in the Company accounting for the participations as the sale of financial assets. As of August 31, 2017, the remaining participations accounted for as secured borrowings bear interest at variable rates ranging from 2.61% to 4.45% . As of August 31, 2017 , the total funding commitment under these agreements was $94.1 million , of which $29.4 million was borrowed.

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Long-Term Debt

Amounts included in long-term debt on our Consolidated Balance Sheets as of August 31, 2017 , and 2016 , are presented in the table below.



	2017			2016
	(Dollars in thousands)
6.18% unsecured notes $400 million face amount, due in equal installments beginning in 2014 through 2018	$	80,000		$	160,000
5.60% unsecured notes $60 million face amount, due in equal installments beginning in 2012 through 2018	4,615			13,846
5.78% unsecured notes $50 million face amount, due in equal installments beginning in 2014 through 2018	10,000			20,000
4.00% unsecured notes $100 million face amount, due in equal installments beginning in 2017 through 2021	80,000			100,000
4.08% unsecured notes $130 million face amount, due in 2019 ^(a)	130,690			141,344
4.52% unsecured notes $160 million face amount, due in 2021 ^(a)	163,496			162,633
4.67% unsecured notes $130 million face amount, due in 2023 ^(a)	135,792			138,101
4.39% unsecured notes $152 million face amount, due in 2023	152,000			152,000
3.85% unsecured notes $80 million face amount, due in 2025	80,000			80,000
3.80% unsecured notes $100 million face amount, due in 2025	100,000			100,000
4.58% unsecured notes $150 million face amount, due in 2025	149,293			150,000
4.82% unsecured notes $80 million face amount, due in 2026	80,000			80,000
4.69% unsecured notes $58 million face amount, due in 2027	58,000			58,000
4.74% unsecured notes $95 million face amount, due in 2028	95,000			95,000
4.89% unsecured notes $100 million face amount, due in 2031	100,000			100,000
4.71% unsecured notes $100 million face amount, due in 2033	100,000			100,000
5.40% unsecured notes $125 million face amount, due in 2036	125,000			125,000
Private Placement debt	1,643,886			1,775,924
5.59% unsecured term loans from cooperative and other banks, due in equal installments beginning in 2013 through 2018	15,000			45,000
2.25% unsecured term loans from cooperative and other banks, due in 2025 ^(b)	430,000			300,000
Bank financing	445,000			345,000
Capital lease obligations	33,075			105,708
Other notes and contracts with interest rates from 1.30% to 15.25%	62,652			76,147
Deferred financing costs	(4,820		)	(5,574		)
Total long-term debt	2,179,793			2,297,205
Less current portion	156,345			214,329
Long-term portion	$	2,023,448		$	2,082,876

_______________________________________


^(a)	We have entered interest rate swaps designated as fair value hedging relationships with these notes. Changes in the fair value of the swaps are recorded each period with a corresponding adjustment to the carrying value of the debt. See Note 12, Derivative Financial Instruments and Hedging Activities for more information.


^(b)	Borrowings are variable under the agreement and bear interest at a base rate (or a LIBO rate) plus an applicable margin.

As of August 31, 2017 , the carrying value of our long-term debt approximated its fair value, which is estimated to be $2.1 billion based on quoted market prices of similar debt (a Level 2 fair value measurement based on the classification hierarchy of ASC Topic 820, Fair Value Measurement ). We have outstanding interest rate swaps designated as fair value hedges of select portions of our fixed-rate debt. During fiscal 2017, we recorded corresponding fair value adjustments of $12.8 million , which are included in the amounts in the table above. See Note 12, Derivative Financial Instruments and Hedging Activities for additional information.

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In September 2015, we entered a ten -year term loan with a syndication of banks. The agreement provides for committed term loans in an amount up to $600.0 million . The full amount was drawn down in January 2016. Amounts drawn under this agreement that are subsequently repaid or prepaid may not be reborrowed. Principal on the term loans is payable in full on September 4, 2025. Borrowings under the agreement bear interest at a base rate (or a LIBO rate) plus an applicable margin, or at a fixed rate of interest determined and quoted by the administrative agent under the agreement in its sole and absolute discretion from time to time. The applicable margin is based on our leverage ratio and ranges between 1.50% and 2.00% for LIBO rate loans and between 0.50% and 1.00% for base rate loans. As of August 31, 2017 , $300.0 million was outstanding under this agreement.

In June 2016, we amended the ten -year term loan so that $300.0 million of the $600.0 million loan balance possessed a revolving feature, whereby we were able to pay down and re-advance an amount up to the referenced $300.0 million . The revolving feature matured on September 1, 2017, and the total funded loan balance on that day reverted to a non-revolving term loan. No other material changes were made to the original terms and conditions of the ten -year term loan. During fiscal 2017, we re-advanced $130.0 million under the revolving provision of the loan. The terms of the re-advance are the same as the terms of the original term loan.

Long-term debt outstanding as of August 31, 2017 , has aggregate maturities, excluding fair value adjustments and capital leases (see Note 5, Property, Plant and Equipment for a schedule of minimum future lease payments under capital leases), as follows:



	(Dollars in thousands)
2018	$	149,050
2019	167,412
2020	31,478
2021	182,949
2022	126
Thereafter	1,611,385
Total	$	2,142,400

Interest expense for the years ended August 31, 2017 , 2016 , and 2015 , was $171.2 million , $113.7 million and $70.7 million , respectively, net of capitalized interest of $6.9 million , $30.3 million and $57.3 million .

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 8 Income Taxes

The provision for income taxes for the years ended August 31, 2017 , 2016 , and 2015 is as follows:



	2017			2016			2015
	(Dollars in thousands)
Current:
Federal	$	(1,767	)	$	3,386		$	(47,695	)
State	2,695			3,972			3,891
Foreign	(7,088		)	12,729			1,335
	(6,160		)	20,087			(42,469		)
Deferred:
Federal	(162,223		)	(30,758		)	29,348
State	(15,977		)	8,512			(2,799		)
Foreign	2,285			(1,932		)	3,755
	(175,915		)	(24,178		)	30,304
Total	$	(182,075	)	$	(4,091	)	$	(12,165	)

Deferred taxes are comprised of basis differences related to investments, accrued liabilities and certain federal and state tax credits.

Domestic income before income taxes was $213.8 million , $490.8 million , and $824.9 million for the years ended August 31, 2017 , 2016 , and 2015 , respectively. Foreign income before taxes was ($268.7) million , ($70.9) million , and ($56.7) million for the years ended August 31, 2017, 2016, and 2015, respectively.

Deferred tax assets and liabilities as of August 31, 2017 , and 2016 , are as follows:



	2017			2016
	(Dollars in thousands)
Deferred tax assets:
Accrued expenses	$	226,964		$	87,251
Postretirement health care and deferred compensation	82,682			111,983
Tax credit carryforwards	166,213			143,252
Loss carryforwards	169,724			155,966
Nonqualified equity	152,835			30,168
Other	55,119			30,627
Deferred tax assets valuation	(284,716		)	(194,277		)
Total deferred tax assets	568,821			364,970
Deferred tax liabilities:
Pension	31,050			26,516
Investments	129,985			107,716
Major maintenance	2,115			4,970
Property, plant and equipment	712,195			681,160
Other	25,964			29,905
Total deferred tax liabilities	901,309			850,267
Net deferred tax liabilities	$	332,488		$	485,297

We have total gross loss carry forwards of $689.2 million , of which $458.1 million will expire over periods ranging from fiscal 2018 to fiscal 2039. The remainder will carry forward indefinitely. Based on estimates of future taxable profits and losses in certain foreign tax jurisdictions, we determined that a valuation allowance was required for specific foreign loss carry forwards as of August 31, 2017 . If these estimates prove inaccurate, a change in the valuation allowance, up or down, could be

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

required in the future. During fiscal 2017 , valuation allowances related to foreign operations increased by $61.9 million due to net operating loss carry forwards and other timing differences. CHS McPherson Refinery Inc. ("CHS McPherson") (formerly known as National Cooperative Refinery Association ("NCRA")) gross state tax credit carry forwards for income tax are approximately $172.9 million and $133.5 million as of August 31, 2017 , and 2016 , respectively. During the year ended August 31, 2017 , the valuation allowance for CHS McPherson increased by $26.6 million , net of federal tax, due to a change in the amount of state tax credits that are estimated to be utilized. The significant increase in state tax credit carry forwards is the result of the CHS McPherson expansion project being placed in service during fiscal 2017, resulting in a corresponding increase in valuation allowance. CHS McPherson's valuation allowance on Kansas state credits is necessary due to the limited amount of Kansas taxable income generated by the combined group on an annual basis.

Our alternative minimum tax credit of $8.1 million will not expire. Our general business credits of $60.0 million , comprised primarily of low sulfur diesel credits, will begin to expire on August 31, 2027 . Our state tax credits of $172.9 million will begin to expire on August 31, 2018.

As of August 31, 2017 , and 2016, net deferred tax assets of $0.7 million and $2.5 million were included in other assets, respectively.

The reconciliation of the statutory federal income tax rates to the effective tax rates for the years ended August 31, 2017 , 2016 , and 2015 is as follows:



	2017		2016		2015
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
State and local income taxes, net of federal income tax benefit	24.7		0.4		(0.5	)
Patronage earnings	192.0		(23.2	)	(29.0	)
Domestic production activities deduction	64.7		(13.2	)	(5.6	)
Export activities at rates other than the U.S. statutory rate	145.3		1.5		(0.2	)
Valuation allowance	(182.3	)	19.6		(0.1	)
Tax credits	45.8		(11.8	)	(0.8	)
Crack spread contingency	9.6		(5.0	)	(1.7	)
Other	(2.9	)	(4.3	)	1.3
Effective tax rate	331.9	%	(1.0	)%	(1.6	)%

The components of the income tax benefit disclosed as a percentage of income before taxes in the reconciliation of the statutory federal income tax rate for the year ended August 31, 2017 are magnified because our fiscal 2017 income tax benefit is unusually large in comparison to income before taxes. The primary drivers of the fiscal 2017 income tax benefit are the recognition of deferred tax benefits related to the issuance of non-qualified equity certificates in fiscal 2013 and 2014, which is disclosed within ‘Patronage earnings’ and U.S. and Brazil deductions related to the Brazilian trading partner loss, which are disclosed within ‘Statutory federal income tax rate’ and ‘Export activities at rates other than the U.S. statutory rate’, respectively, as well as a current tax benefit from retaining a significant portion of the domestic production activities deduction. A significant income tax expense within the fiscal 2017 income tax benefit is an increase in the valuation allowance against deferred tax assets generated in the Brazilian trading partner loss and Kansas state tax credits.

We file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. Our uncertain tax positions are affected by the tax years that are under audit or remain subject to examination by the relevant taxing authorities. In addition to the current year, fiscal 2007 through 2016 remain subject to examination, at least for certain issues.

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We account for our income tax provisions in accordance with ASC Topic 740, Income Taxes , which prescribes a minimum threshold that a tax provision is required to meet before being recognized in our consolidated financial statements. This interpretation requires us to recognize in our consolidated financial statements tax positions determined more likely than not to be sustained upon examination, based on the technical merits of the position. Reconciliation of the gross beginning and ending amounts of unrecognized tax benefits for the periods presented follows:



	2017		2016			2015
	(Dollars in thousands)
Balance at beginning of period	$	37,105	$	72,181		$	72,181
Additions attributable to current year tax positions	725		1,387			—
Reductions attributable to prior year tax positions	—		(36,463		)	—
Balance at end of period	$	37,830	$	37,105		$	72,181

During fiscal 2017, we increased our unrecognized tax benefits for excise tax credits related to the blending and sale of renewable fuels deducted for income taxes. During fiscal 2016, we decreased our unrecognized tax benefits due to the settlement with the Internal Revenue Service and increased our unrecognized tax benefits for excise tax credits related to the blending and sale of renewable fuels deducted for income taxes.

If we were to prevail on all tax positions taken relating to uncertain tax positions, all the unrecognized tax benefits would benefit the effective tax rate. We do not believe it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.

We recognize interest and penalties related to unrecognized tax benefits in our provision for income taxes. No amounts were recognized in our Consolidated Statements of Operations for interest related to unrecognized tax benefits for the years ended August 31, 2017 , 2016 , and 2015. We recorded no interest payable related to unrecognized tax benefits on our Consolidated Balance Sheets as of August 31, 2017 , and 2016 .

Note 9 Equities

In accordance with our bylaws and by action of the Board of Directors, annual net earnings from patronage sources are distributed to consenting patrons following the close of each fiscal year, and are based on amounts using financial statement earnings. The cash portion of the qualified patronage distribution, if any, is determined annually by the Board of Directors, with the balance issued in the form of qualified and/or non-qualified capital equity certificates. Total non-qualified patronage distributions refunds for fiscal 2017 are estimated to be $126.3 million . No portion of annual net earnings for fiscal 2017 will be issued in the form of cash or qualified capital equity certificates. The actual patronage distributions and cash portion for fiscal 2016 , 2015 , and 2014 were $ 257.5 million ( $103.9 million in cash), $ 627.2 million ( $251.7 million in cash), and $821.5 million ( $271.2 million in cash), respectively.

Annual net savings from patronage or other sources may be added to the unallocated capital reserve or, upon action by the Board of Directors, may be allocated to members in the form of nonpatronage equity certificates. The Board of Directors authorized, in accordance with our bylaws, that 10% of the earnings from patronage business for fiscal 2017 , 2016 , and 2015 be added to our capital reserves.

Redemptions of outstanding equity are at the discretion of the Board of Directors. Redemptions of capital equity certificates approved by the Board of Directors are divided into two pools, one for non-individuals (primarily member cooperatives) who may participate in an annual redemption program for qualified equities held by them and another for individual members who are eligible for equity redemptions at age 70 or upon death. Beginning with fiscal 2017 patronage (for which distributions will be made in fiscal 2018), individuals will also be able to participate in an annual redemption program similar to the one that was previously only available to non-individual members. In accordance with authorization from the Board of Directors, we expect total redemptions related to the year ended August 31, 2017 , that will be distributed in fiscal 2018 , to be approximately $10.0 million and are classified as a current liability on our August 31, 2017 Consolidated Balance Sheet. During the years ended August 31, 2017 , 2016 , and 2015 , we redeemed in cash, outstanding owners' equities in accordance with authorization from the Board of Directors, in the amounts of $ 35.3 million , $ 23.9 million and $ 128.9 million , respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In March 2017, we redeemed approximately $20.0 million of patrons' equities by issuing 695,390 shares of Class B Cumulative Redeemable Preferred Stock, Series 1 ("Class B Series 1 Preferred Stock"), with a total redemption value of $17.4 million , excluding accumulated dividends. Each share of Class B Series 1 Preferred Stock was issued in redemption of $28.74 of patrons' equities in the form of capital equity certificates. Additionally, in fiscal 2016, we redeemed approximately $76.8 million of patrons' equities by issuing 2,693,195 shares of Class B Series 1 Preferred Stock with a total redemption value of $67.3 million , excluding accumulated dividends. Each share of Class B Series 1 Preferred Stock was issued in redemption of $28.50 of patrons' equities in the form of capital equity certificates.

Preferred Stock

The following is a summary of our outstanding preferred stock as of August 31, 2017 , all shares of which are listed on the Global Select Market of NASDAQ:



	NASDAQ symbol	Issuance date	Shares outstanding	Redemption value		Net proceeds (a)		Dividend rate (b) (c)		Dividend payment frequency	Redeemable beginning (d)
				(Dollars in millions)
8% Cumulative Redeemable	CHSCP	(e)	12,272,003	$	306.8	$	311.2	8.00	%	Quarterly	7/18/2023
Class B Cumulative Redeemable, Series 1	CHSCO	(f)	21,459,066	$	536.5	$	569.3	7.875	%	Quarterly	9/26/2023
Class B Reset Rate Cumulative Redeemable, Series 2	CHSCN	3/11/2014	16,800,000	$	420.0	$	406.2	7.10	%	Quarterly	3/31/2024
Class B Reset Rate Cumulative Redeemable, Series 3	CHSCM	9/15/2014	19,700,000	$	492.5	$	476.7	6.75	%	Quarterly	9/30/2024
Class B Cumulative Redeemable, Series 4	CHSCL	1/21/2015	20,700,000	$	517.5	$	501.0	7.50	%	Quarterly	1/21/2025


^(a)	Includes patrons' equities redeemed with preferred stock.


^(b)	The Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2 accumulates dividends at a rate of 7.10% per year until March 31, 2024, and then at a rate equal to the three-month LIBOR plus 4.298% , not to exceed 8.00% per annum, subsequent to March 31, 2024.


^(c)	The Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3 accumulates dividends at a rate of 6.75% per year until September 30, 2024, and then at a rate equal to the three-month LIBOR plus 4.155% , not to exceed 8.00% per annum, subsequent to September 30, 2024.


^(d)	Preferred stock is redeemable for cash at our option, in whole or in part, at a per share price equal to the per share liquidation preference of $25.00 per share, plus all dividends accumulated and unpaid on that share to and including the date of redemption, beginning on the dates set forth in this column.


^(e)	The 8% Cumulative Redeemable Preferred Stock was issued at various times from 2003 through 2010.


^(f)	Shares of Class B Cumulative Redeemable Preferred Stock, Series 1 were issued on September 26, 2013, August 25, 2014, March 31, 2016 and March 30, 2017.

We made dividend payments on our preferred stock of $167.6 million , $163.3 million , and $133.7 million , during the years ended August 31, 2017 , 2016 and 2015 , respectively. As of August 31, 2017 , we have no authorized but unissued shares of preferred stock.

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Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive income (loss) by component, for the years ended August 31, 2017 , 2016 , and 2015 are as follows:



	Pension and Other Postretirement Benefits			Unrealized Net Gain (Loss) on Available for Sale Investments			Cash Flow Hedges			Foreign Currency Translation Adjustment			Total
	(Dollars in thousands)
Balance as of August 31, 2014, net of tax	$	(151,852	)	$	4,398		$	(2,722	)	$	(6,581	)	$	(156,757	)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	(54,284		)	(396		)	(5,001		)	(30,672		)	(90,353		)
Amounts reclassified out	21,681			—			792			—			22,473
Total other comprehensive income (loss), before tax	(32,603		)	(396		)	(4,209		)	(30,672		)	(67,880		)
Tax effect	12,726			154			1,607			(4,057		)	10,430
Other comprehensive income (loss), net of tax	(19,877		)	(242		)	(2,602		)	(34,729		)	(57,450		)
Balance as of August 31, 2015, net of tax	(171,729		)	4,156			(5,324		)	(41,310		)	(214,207		)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	(10,512		)	2,447			(11,353		)	(1,036		)	(20,454		)
Amounts reclassified out	20,998			—			5,071			469			26,538
Total other comprehensive income (loss), before tax	10,486			2,447			(6,282		)	(567		)	6,084
Tax effect	(3,903		)	(947		)	2,410			(1,163		)	(3,603		)
Other comprehensive income (loss), net of tax	6,583			1,500			(3,872		)	(1,730		)	2,481
Balance as of August 31, 2016, net of tax	(165,146		)	5,656			(9,196		)	(43,040		)	(211,726		)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	25,216			7,117			1,892			(8,472		)	25,753
Amounts reclassified out	23,572			—			1,742			15			25,329
Total other comprehensive income (loss), before tax	48,788			7,117			3,634			(8,457		)	51,082
Tax effect	(18,688		)	(2,732		)	(1,392		)	(214		)	(23,026		)
Other comprehensive income (loss), net of tax	30,100			4,385			2,242			(8,671		)	28,056
Balance as of August 31, 2017, net of tax	$	(135,046	)	$	10,041		$	(6,954	)	$	(51,711	)	$	(183,670	)

Amounts reclassified from accumulated other comprehensive income (loss) were related to pension and other postretirement benefits, cash flow hedges and foreign currency translation adjustments, and were recorded to net income. Pension and other postretirement reclassifications include amortization of net actuarial loss, prior service credit and transition amounts and are recorded as marketing, general and administrative expenses (see Note 10, Benefit Plans for further information).

During fiscal 2016, interest rate swaps accounted for as cash flow hedges, were terminated as the issuance of the underlying debt was no longer probable. As a result, a $3.7 million loss was reclassified from accumulated other comprehensive loss into net income. This pre-tax loss is included as a component of interest expense in our Consolidated Statement of Operations for the year ended August 31, 2016.

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Note 10 Benefit Plans

We have various pension and other defined benefit and defined contribution plans, in which substantially all employees may participate. We also have non-qualified supplemental executive and Board retirement plans.

Financial information on changes in benefit obligation, plan assets funded and balance sheets status as of August 31, 2017 , and 2016 , is as follows:



	Qualified Pension Benefits						Non-Qualified Pension Benefits						Other Benefits
	2017			2016			2017			2016			2017			2016
	(Dollars in thousands)
Change in benefit obligation:
Benefit obligation at beginning of period	$	812,749		$	730,795		$	32,696		$	33,184		$	36,779		$	41,997
Service cost	42,149			37,533			1,206			1,035			1,160			1,412
Interest cost	22,999			30,773			843			1,406			930			1,709
Actuarial (gain) loss	(10,054		)	361			(5,692		)	(3,333		)	(4,650		)	(4,892		)
Assumption change	(17,750		)	57,385			(655		)	2,679			(775		)	2,602
Plan amendments	—			411			—			(1,045		)	—			(4,495		)
Settlements	—			—			(2,131		)	—			—			—
Benefits paid	(43,919		)	(44,509		)	(668		)	(1,230		)	(1,608		)	(1,554		)
Benefit obligation at end of period	$	806,174		$	812,749		$	25,599		$	32,696		$	31,836		$	36,779
Change in plan assets:
Fair value of plan assets at beginning of period	$	883,265		$	796,379		$	—		$	—		$	—		$	—
Actual gain (loss) on plan assets	36,474			88,089			—			—			—			—
Company contributions	—			43,306			2,799			1,230			1,608			1,554
Settlements	—			—			(2,131		)	—			—			—
Benefits paid	(43,919		)	(44,509		)	(668		)	(1,230		)	(1,608		)	(1,554		)
Fair value of plan assets at end of period	$	875,820		$	883,265		$	—		$	—		$	—		$	—
Funded status at end of period	$	69,646		$	70,516		$	(25,599	)	$	(32,696	)	$	(31,836	)	$	(36,779	)
Amounts recognized on balance sheet:
Non-current assets	$	70,019		$	70,594		$	—		$	—		$	—		$	—
Accrued benefit cost:
Current liabilities	—			—			(2,270		)	(1,880		)	(2,140		)	(2,490		)
Non-current liabilities	(373		)	(78		)	(23,329		)	(30,816		)	(29,696		)	(34,289		)
Ending balance	$	69,646		$	70,516		$	(25,599	)	$	(32,696	)	$	(31,836	)	$	(36,779	)
Amounts recognized in accumulated other comprehensive loss (pretax):
Prior service cost (credit)	$	2,481		$	4,021		$	363		$	(641	)	$	(4,281	)	$	(4,847	)
Net (gain) loss	236,232			275,146			(70		)	7,815			(16,864		)	(12,235		)
Ending balance	$	238,713		$	279,167		$	293		$	7,174		$	(21,145	)	$	(17,082	)

The accumulated benefit obligation of the qualified pension plans was $ 740.9 million and $ 766.2 million at August 31, 2017 , and 2016 , respectively. The accumulated benefit obligation of the non-qualified pension plans was $ 20.6 million and $ 23.7 million at August 31, 2017 , and 2016 , respectively.

One significant assumption for pension plan accounting is the discount rate. Historically, we have selected a discount rate each year (as of our fiscal year-end measurement date) for our plans based upon a high-quality corporate bond yield curve for which the cash flows from coupons and maturities match the year-by-year projected benefit cash flows for our pension

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plans. The corporate bond yield curve is comprised of high-quality fixed income debt instruments available at the measurement date. At August 31, 2016, we changed to use an individual spot-rate approach, discussed below. This alternative approach focuses on measuring the service cost and interest cost components of net periodic benefit cost by using individual spot rates derived from a high-quality corporate bond yield curve and matched with separate cash flows for each future year instead of a single weighted-average discount rate approach.

As of August 31, 2016, we changed the method used to estimate the service and interest cost components of net periodic benefit cost for pension and other post-retirement benefits. This change in methodology has, and is expected to continue to result in a decrease in the service and interest cost components for the pension and other post retirement benefit costs. We historically estimated these service and interest cost components utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. Beginning in fiscal 2017, we elected to utilize a full-yield curve approach in the determination of these components by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. We elected to make this change to provide a more precise measurement of service and interest costs by improving the correlation between projected benefit cash flows to the corresponding spot yield curve rates. This change does not affect the measurement of our total benefit obligations at August 31, 2016, the net periodic cost recognized in fiscal 2016 or the ultimate benefit payment that must be made in the future. We have accounted for this change as a change in accounting estimate and, accordingly, have accounted for it on a prospective basis.

Components of net periodic benefit costs for the years ended August 31, 2017 , 2016 , and 2015 are as follows:



	Qualified Pension Benefits									Non-Qualified Pension Benefits									Other Benefits
	2017			2016			2015			2017			2016			2015			2017			2016			2015
	(Dollars in thousands)
Components of net periodic benefit costs:
Service cost	$	42,149		$	37,533		$	36,006		$	1,206		$	1,035		$	875		$	1,160		$	1,412		$	1,513
Interest cost	22,999			30,773			28,046			843			1,406			1,414			930			1,709			1,489
Expected return on assets	(48,235		)	(48,055		)	(49,746		)	—			—			—			—			—			—
Settlement of retiree obligations	—			—			—			(30		)	—			1,635			—			—			—
Prior service cost (credit) amortization	1,540			1,606			1,631			19			228			228			(565		)	(120		)	(426		)
Actuarial loss amortization	22,869			19,016			19,621			546			692			1,058			(798		)	(464		)	(431		)
Net periodic benefit cost	$	41,322		$	40,873		$	35,558		$	2,584		$	3,361		$	5,210		$	727		$	2,537		$	2,145
Weighted-average assumptions to determine the net periodic benefit cost:
Discount rate	3.60		%	4.20		%	4.00		%	3.30		%	4.20		%	4.00		%	3.30		%	4.20		%	4.20		%
Expected return on plan assets	5.75		%	6.00		%	6.50		%	N/A			N/A			N/A			N/A			N/A			N/A
Rate of compensation increase	5.60		%	4.90		%	4.90		%	5.60		%	4.90		%	5.15		%	N/A			N/A			N/A
Weighted-average assumptions to determine the benefit obligations:
Discount rate	3.80		%	3.60		%	4.20		%	3.55		%	3.30		%	4.50		%	3.60		%	3.30		%	3.75		%
Rate of compensation increase	5.10		%	5.60		%	4.90		%	5.10		%	5.60		%	4.80		%	N/A			N/A			N/A

The estimated amortization in fiscal 2018 from accumulated other comprehensive loss into net periodic benefit cost is as follows:



	Qualified Pension Benefits		Non-Qualified Pension Benefits		Other Benefits
	(Dollars in thousands)
Amortization of prior service cost (benefit)	$	1,540	$	30	$	(565	)
Amortization of net actuarial (gain) loss	18,073		61		(1,224		)

For measurement purposes, a 7.9% annual rate of increase in the per capita cost of covered health care benefits was assumed for the year ended August 31, 2017 . The rate was assumed to decrease gradually to 4.5% by 2025 and remain at that level thereafter.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage point change in the assumed health care cost trend rates would have the following effects:

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	1% Increase		1% Decrease
	(Dollars in thousands)
Effect on total of service and interest cost components	$	240	$	(200	)
Effect on postretirement benefit obligation	2,500		(2,200		)

We provide defined life insurance and health care benefits for certain retired employees and Board of Directors participants. The plan is contributory based on years of service and family status, with retiree contributions adjusted annually.

We have other contributory defined contribution plans covering substantially all employees. Total contributions by us to these plans were $ 19.9 million , $ 29.5 million and $ 27.4 million , for the years ended August 31, 2017 , 2016 , and 2015 , respectively.

We did not contribute to the qualified pension plans in fiscal 2017 . Based on the funded status of the qualified pension plans as of August 31, 2017 , we do not believe we will be required to contribute to these plans in fiscal 2018 , although we may voluntarily elect to do so. We expect to pay $ 4.4 million to participants of the non-qualified pension and postretirement benefit plans during fiscal 2018 .

Our retiree benefit payments, which reflect expected future service, are anticipated to be paid as follows:



	Qualified Pension Benefits		Non-Qualified Pension Benefits		Other Benefits Gross
	(Dollars in thousands)
2018	$	64,044	$	2,270	$	2,140
2019	61,510		2,170		2,240
2020	59,997		1,960		2,510
2021	61,753		1,950		2,530
2022	62,869		2,440		2,670
2023-2027	325,797		11,960		12,750

We have trusts that hold the assets for the defined benefit plans. CHS has a qualified plan committee that sets investment guidelines with the assistance of external consultants. Investment objectives for the plans' assets are as follows:


•	optimization of the long-term returns on plan assets at an acceptable level of risk;


•	maintenance of a broad diversification across asset classes and among investment managers; and


•	focus on long-term return objectives.

Asset allocation targets promote optimal expected return and volatility characteristics given the long-term time horizon for fulfilling the obligations of the pension plans. Our pension plans' investment policy strategy is such that liabilities match assets. This is being accomplished through the asset portfolio mix by reducing volatility and de-risking the plans. The plans’ target allocation percentages range between 35% and 55% for fixed income securities, and range between 45% and 65% for equity securities. An annual analysis of the risk versus the return of the investment portfolio is conducted to justify the expected long-term rate of return assumption. We generally use long-term historical return information for the targeted asset mix identified in asset and liability studies. Adjustments are made to the expected long-term rate of return assumption, when deemed necessary, based upon revised expectations of future investment performance of the overall investment markets.

The discount rate reflects the rate at which the associated benefits could be effectively settled as of the measurement date. In estimating this rate, we look at rates of return on fixed-income investments of similar duration to the liabilities in the plans that receive high, investment-grade ratings by recognized ratings agencies.

The investment portfolio contains a diversified portfolio of investment categories, including domestic and international equities, fixed-income securities and real estate. Securities are also diversified in terms of domestic and international securities, short and long-term securities, growth and value equities, large and small cap stocks, as well as active and passive management styles.

The committee believes that with prudent risk tolerance and asset diversification, the plans should be able to meet pension obligations in the future.

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Our pension plans’ recurring fair value measurements by asset category at August 31, 2017 , and 2016 , are presented in the tables below:



	2017
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Cash and cash equivalents	$	9,988	$	—	$	—	$	9,988
Equities:
Mutual funds	459		—		—		459
Common/collective trust at net asset value ⁽¹⁾	—		—		—		231,228
Fixed income securities:
Common/collective trust at net asset value ⁽¹⁾	—		—		—		535,185
Partnership and joint venture interests measured at net asset value ⁽¹⁾	—		—		—		96,994
Other assets measured at net asset value ⁽¹⁾	—		—		—		1,966
Total	$	10,447	$	—	$	—	$	875,820



	2016
	Level 1		Level 2		Level 3		Total
	(Dollars in thousands)
Cash and cash equivalents	$	4,841	$	—	$	—	$	4,841
Equities:
Mutual funds	507		—		—		507
Common/collective trust at net asset value ⁽¹⁾	—		—		—		228,717
Fixed income securities:
Common/collective trust at net asset value ⁽¹⁾	—		—		—		551,604
Partnership and joint venture interests measured at net asset value ⁽¹⁾	—		—		—		95,744
Other assets measured at net asset value ⁽¹⁾	—		—		—		1,852
Total	$	5,348	$	—	$	—	$	883,265

⁽¹⁾

In accordance with ASC Topic 820-10, Fair Value Measurements , certain assets that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the tables above are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of net assets.

Definitions for valuation levels are found in Note 13, Fair Value Measurements . We use the following valuation methodologies for assets measured at fair value.

Mutual funds: Valued at quoted market prices, which are based on the net asset value of shares held by the plan at year end. Mutual funds traded in active markets are classified within Level 1 of the fair value hierarchy. Mutual funds measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy in accordance with ASC Topic 820-10, Fair Value Measurement .

Common/Collective Trusts: Common/collective trusts primarily consist of equity and fixed income funds and are valued using other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risks, referenced indices, quoted prices in inactive markets, adjusted quoted prices in active markets, adjusted quoted prices on foreign equity securities that were adjusted in accordance with pricing procedures approved by the trust, etc.). Common/collective trust investments can be redeemed daily and without restriction. Redemption of the entire investment balance generally requires a 45- to 60-day notice period. The equity funds provide exposure to large, mid and small cap U.S. equities, international large and small cap equities and emerging market equities. The fixed income funds provide exposure to U.S., international and emerging market debt securities. Common/collective trusts measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy in accordance with ASC Topic 820-10, Fair Value Measurement .

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Partnership and joint venture interests: Valued at the net asset value of shares held by the plan at year end as a practical expedient for fair value. The net asset value is based on the fair value of the underlying assets owned by the trust, minus its liabilities then divided by the number of units outstanding. Redemptions of these interests generally require a 45- to 60-day notice period. Partnerships and joint venture interests measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy in accordance with ASC Topic 820-10, Fair Value Measurement.

Other assets : Other assets primarily includes real estate funds and hedge funds held in the asset portfolio of our U.S. defined benefit pension plans. Other funds measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy in accordance with ASC Topic 820-10, Fair Value Measurement.

We are one of approximately 400 employers that contribute to the Co-op Retirement Plan ("Co-op Plan"), which is a defined benefit plan constituting a “multiple employer plan” under the Internal Revenue Code of 1986, as amended, and a “multiemployer plan” under the accounting standards. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:


•	Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers;


•	If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; and


•	If we choose to stop participating in the multiemployer plan, we may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

Our participation in the Co-op Plan for the years ended August 31, 2017 , 2016 , and 2015 is outlined in the table below:



		Contributions of CHS
		(Dollars in thousands)
Plan Name	EIN/Plan Number	2017		2016		2015		Surcharge Imposed	Expiration Date of Collective Bargaining Agreement
Co-op Retirement Plan	01-0689331 / 001	$	1,653	$	1,862	$	2,021	N/A	N/A

Our contributions for the years stated above did not represent more than 5% of total contributions to the Co-op Plan as indicated in the Co-op Plan's most recently available annual report (Form 5500).

Provisions of the Pension Protection Act of 2006 ("PPA") do not apply to the Co-op Plan because there is a special exemption for cooperative plans if the plan is maintained by more than one employer and at least 85% of the employers are rural cooperatives or cooperative organizations owned by agricultural producers. In the Co-op Plan, a “zone status” determination is not required, and therefore not determined. In addition, the accumulated benefit obligations and plan assets are not determined or allocated separately by individual employers. The most recent financial statements available in 2017 and 2016 are for the Co-op Plan's year-end at March 31, 2017, and 2016, respectively. In total, the Co-op Plan was at least 80% funded on those dates based on the total plan assets and accumulated benefit obligations.

Because the provisions of the PPA do not apply to the Co-op Plan, funding improvement plans and surcharges are not applicable. Future contribution requirements are determined each year as part of the actuarial valuation of the plan and may change as a result of plan experience.

In addition to the contributions to the Co-op Plan listed above, total contributions to individually insignificant multi-employer pension plans were immaterial in fiscal 2017 , 2016 , and 2015 .

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Note 11 Segment Reporting

We are an integrated agricultural enterprise, providing grain, foods and energy resources to businesses and consumers on a global basis. We provide a wide variety of products and services, from initial agricultural inputs such as fuels, farm supplies, crop nutrients and crop protection products, to agricultural outputs that include grains and oilseeds, grain and oilseed processing and food products, and the production and marketing of ethanol. We define our operating segments in accordance with ASC Topic 280, Segment Reporting , to reflect the manner in which our chief operating decision maker, our Chief Executive Officer, evaluates performance and allocates resources in managing the business. We have aggregated those operating segments into four reportable segments: Energy, Ag, Nitrogen Production and Foods.

Our Energy segment produces and provides primarily for the wholesale distribution of petroleum products and transportation of those products. Our Ag segment purchases and further processes or resells grains and oilseeds originated by our country operations business, by our member cooperatives and by third parties; serves as a wholesaler and retailer of crop inputs; and produces and markets ethanol. Our Nitrogen Production segment consists solely of our equity method investment in CF Nitrogen, which was completed in February 2016 and which entitles us, pursuant to a supply agreement that we entered with CF Nitrogen, to purchase up to a specified annual quantity of granular urea and UAN annually from CF Nitrogen. The addition of the Nitrogen Production segment had no impact on historically reported segment results and balances as this segment came into existence in fiscal 2016. Our Foods segment consists solely of our equity method investment in Ventura Foods. Prior to August 31, 2016, Ventura Foods was reported as a component of Corporate and Other. Reported segment results and balances prior to August 31, 2016, have been revised to reflect the addition of the Foods segment. There were no changes to the composition of our Energy or Ag segments as a result of the addition of the Nitrogen Production and Foods segments. Corporate and Other primarily represents our non-consolidated wheat milling operations, as well as our business solutions operations, which primarily consists of commodities hedging, insurance and financial services related to crop production.

Corporate administrative expenses and interest are allocated to each business segment, and Corporate and Other, based on direct usage for services that can be tracked, such as information technology and legal, and other factors or considerations relevant to the costs incurred.

Many of our business activities are highly seasonal and operating results vary throughout the year. For example, in our Ag segment, our crop nutrients and country operations businesses generally experience higher volumes and income during the spring planting season and in the fall, which corresponds to harvest. Our grain marketing operations are also subject to fluctuations in volume and earnings based on producer harvests, world grain prices and demand. Our Energy segment generally experiences higher volumes and profitability in certain operating areas, such as refined products, in the summer and early fall when gasoline and diesel fuel usage is highest and is subject to global supply and demand forces. Other energy products, such as propane, may experience higher volumes and profitability during the winter heating and crop drying seasons.

Our revenues, assets and cash flows can be significantly affected by global market prices for commodities such as petroleum products, natural gas, grains, oilseeds, crop nutrients and flour. Changes in market prices for commodities that we purchase without a corresponding change in the selling prices of those products can affect revenues and operating earnings. Commodity prices are affected by a wide range of factors beyond our control, including the weather, crop damage due to disease or insects, drought, the availability and adequacy of supply, government regulations and policies, world events, and general political and economic conditions.

While our revenues and operating results are derived from businesses and operations which are wholly-owned and majority-owned, a portion of our business operations are conducted through companies in which we hold ownership interests of 50% or less and do not control the operations. We account for these investments primarily using the equity method of accounting, wherein we record our proportionate share of income or loss reported by the entity as equity income from investments, without consolidating the revenues and expenses of the entity in our Consolidated Statements of Operations. In our Ag segment, this principally includes our 50% ownership in TEMCO. In our Nitrogen Production segment, this consists of our 11.4% membership interest (based on product tons) in CF Nitrogen. In our Foods segment, this consists of our 50% ownership in Ventura Foods. In Corporate and Other, this principally includes our 12% ownership in Ardent Mills. See Note 4, Investments for more information on these entities.

Reconciling amounts represent the elimination of revenues between segments. Such transactions are executed at market prices to more accurately evaluate the profitability of the individual business segments.

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Segment information for the years ended August 31, 2017 , 2016 , and 2015 is presented in the tables below.



	Energy			Ag			Nitrogen Production			Foods			Corporate and Other			Reconciling Amounts			Total
	(Dollars in thousands)
For the year ended August 31, 2017:
Revenues	$	6,665,643		$	25,598,706		$	—		$	—		$	95,414		$	(425,012	)	$	31,934,751
Operating earnings (loss)	90,892			(222,724		)	(18,430		)	(10,783		)	49,248			—			(111,797		)
(Gain) loss on investments	—			6,901			—			—			(2,332		)	—			4,569
Interest expense	18,365			71,986			48,893			(231		)	33,481			(1,255		)	171,239
Other (income) loss	(1,164		)	(63,481		)	(30,534		)	—			(1,491		)	1,255			(95,415		)
Equity (income) loss from investments	(3,181		)	(7,277		)	(66,530		)	(36,519		)	(23,831		)	—			(137,338		)
Income (loss) before income taxes	$	76,872		$	(230,853	)	$	29,741		$	25,967		$	43,421		$	—		$	(54,852	)
Intersegment revenues	$	(400,446	)	$	(20,313	)	$	—		$	—		$	(4,253	)	$	425,012		$	—
Capital expenditures	$	260,543		$	146,139		$	—		$	—		$	37,715		$	—		$	444,397
Depreciation and amortization	$	223,229		$	232,443		$	—		$	—		$	24,551		$	—		$	480,223
Total assets as of August 31, 2017	$	4,304,001		$	6,481,518		$	2,781,610		$	347,017		$	2,059,610		$	—		$	15,973,756



	Energy			Ag			Nitrogen Production			Foods			Corporate and Other			Reconciling Amounts			Total
	(Dollars in thousands)
For the year ended August 31, 2016:
Revenues	$	5,789,307		$	24,849,634		$	—		$	—		$	92,725		$	(384,463	)	$	30,347,203
Operating earnings (loss)	248,173			52,334			(6,193		)	(7,719		)	23,601			—			310,196
(Gain) loss on investments	—			(6,157		)	—			—			(3,095		)	—			(9,252		)
Interest expense	(22,244		)	82,085			34,437			2,692			27,955			(11,221		)	113,704
Other (income) loss	(287		)	(46,886		)	—			—			(2,405		)	11,221			(38,357		)
Equity (income) loss from investments	(4,739		)	(7,644		)	(74,700		)	(75,175		)	(13,519		)	—			(175,777		)
Income (loss) before income taxes	$	275,443		$	30,936		$	34,070		$	64,764		$	14,665		$	—		$	419,878
Intersegment revenues	$	(341,765	)	$	(40,336	)	$	—		$	—		$	(2,362	)	$	384,463		$	—
Capital expenditures	$	376,841		$	260,865		$	—		$	—		$	55,074		$	—		$	692,780
Depreciation and amortization	$	193,525		$	230,172		$	—		$	—		$	23,795		$	—		$	447,492
Total assets as of August 31, 2016	$	4,306,297		$	7,002,916		$	2,796,323		$	369,487		$	2,837,112		$	—		$	17,312,135



	Energy			Ag			Foods			Corporate and Other			Reconciling Amounts			Total
	(Dollars in thousands)
For the year ended August 31, 2015:
Revenues	$	8,694,326		$	26,311,350		$	—		$	74,828		$	(498,062	)	$	34,582,442
Operating earnings (loss)	523,451			190,860			(1,454		)	2,555			—			715,412
(Gain) loss on investments	—			(2,875		)	—			(2,364		)	—			(5,239		)
Interest expense	(12,328		)	62,851			3,854			20,625			(4,343		)	70,659
Other (income) loss	(22		)	(6,471		)	—			(8,176		)	4,343			(10,326		)
Equity (income) loss from investments	(2,330		)	(12,293		)	(67,955		)	(25,272		)	—			(107,850		)
Income (loss) before income taxes	$	538,131		$	149,648		$	62,647		$	17,742		$	—		$	768,168
Intersegment revenues	$	(483,989	)	$	(11,403	)	$	—		$	(2,670	)	$	498,062		$	—
Capital expenditures	$	696,825		$	417,950		$	—		$	72,015		$	—		$	1,186,790
Depreciation and amortization	$	148,292		$	192,438		$	—		$	14,692		$	—		$	355,422

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We have international sales, which are predominantly in our Ag segment. The following table presents our sales, based on the geographic locations in which the sales originated, for the years ended August 31, 2017 , 2016 , and 2015 :



	2017		2016		2015
	(Dollars in millions)
North America	$	24,634	$	23,276	$	27,821
South America	1,441		1,847		1,529
Europe, the Middle East and Africa (EMEA)	4,985		4,166		4,221
Asia Pacific (APAC)	875		1,058		1,011
Total	$	31,935	$	30,347	$	34,582

Included in North American revenues are revenues from the United States of $24.6 billion , $23.2 billion and $27.7 billion for the years ended August 31, 2017 , 2016 , and 2015 , respectively.

Long-lived assets include our property, plant and equipment, capital lease assets and capitalized major maintenance costs. The following table presents long-lived assets by geographical region:



	2017		2016
	(Dollars in thousands)
United States	$	5,359,270	$	5,532,906
International	102,170		124,471
Total	$	5,461,440	$	5,657,377

Note 12 Derivative Financial Instruments and Hedging Activities

Our derivative instruments primarily consist of commodity and freight futures and forward contracts and, to a minor degree, may include foreign currency and interest rate swap contracts. These contracts are economic hedges of price risk, but we do not apply hedge accounting under ASC Topic 815, Derivatives and Hedging , except with respect to certain interest rate swap contracts which are accounted for as cash flow hedges or fair value hedges as described below. Derivative instruments are recorded on our Consolidated Balance Sheets at fair value as described in Note 13, Fair Value Measurements .

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The following tables present the gross fair values of derivative assets, derivative liabilities, and margin deposits (cash collateral) recorded on our Consolidated Balance Sheets along with the related amounts permitted to be offset in accordance with U.S. GAAP. We have elected not to offset derivative assets and liabilities when we have the right of offset under ASC Topic 210-20, Balance Sheet - Offsetting; or when the instruments are subject to master netting arrangements under ASC Topic 815-10-45, Derivatives and Hedging - Overall .



	August 31, 2017
			Amounts Not Offset on the Consolidated Balance Sheet but Eligible for Offsetting
	Gross Amounts Recognized		Cash Collateral		Derivative Instruments		Net Amounts
	(Dollars in thousands)
Derivative Assets:
Commodity and freight derivatives	$	384,648	$	—	$	35,080	$	349,568
Foreign exchange derivatives	8,771		—		3,636		5,135
Interest rate derivatives - hedge	9,978		—		—		9,978
Embedded derivative asset	25,533		—		—		25,533
Total	$	428,930	$	—	$	38,716	$	390,214
Derivative Liabilities:
Commodity and freight derivatives	$	309,762	$	3,898	$	35,080	$	270,784
Foreign exchange derivatives	19,931		—		3,636		16,295
Interest rate derivatives - hedge	707		—		—		707
Total	$	330,400	$	3,898	$	38,716	$	287,786



	August 31, 2016
			Amounts Not Offset on the Consolidated Balance Sheet but Eligible for Offsetting
	Gross Amounts Recognized		Cash Collateral		Derivative Instruments		Net Amounts
	(Dollars in thousands)
Derivative Assets:
Commodity and freight derivatives	$	500,192	$	—	$	23,689	$	476,503
Foreign exchange derivatives	21,551		—		9,187		12,364
Interest rate derivatives - hedge	22,078		—		—		22,078
Total	$	543,821	$	—	$	32,876	$	510,945
Derivative Liabilities:
Commodity and freight derivatives	$	491,302	$	811	$	23,689	$	466,802
Foreign exchange derivatives	22,289		—		9,187		13,102
Interest rate derivatives - non-hedge	8		—		—		8
Total	$	513,599	$	811	$	32,876	$	479,912

Derivative assets and liabilities with maturities of less than 12 months are recorded in derivative assets and derivative liabilities, respectively, on the Consolidated Balance Sheets. Derivative assets and liabilities with maturities greater than 12 months are recorded in other assets and other liabilities, respectively, on the Consolidated Balance Sheets. The amount of long-term derivative assets recorded on the Balance Sheet at August 31, 2017, was $196.9 million . The amount of long-term derivative liabilities recorded on the Consolidated Balance Sheet at August 31, 2017, was $14.4 million . Long-term derivatives as of August 31, 2016, were not material.

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Derivatives Not Designated as Hedging Instruments

The majority of our derivative instruments have not been designated as hedging instruments. The following table sets forth the pretax gains (losses) on derivatives not accounted for as hedging instruments that have been included in our Consolidated Statements of Operations for the years ended August 31, 2017 , 2016 , and 2015 . We have revised the information that we have historically included in this table below to correct for errors in the previously disclosed amounts for fiscal 2015. Although such gains and losses have been and continue to be appropriately recorded in the Consolidated Statements of Operations, the previous disclosures for fiscal 2015 did not accurately reflect the derivative gains and losses in each period. These revisions did not materially impact our consolidated financial statements for fiscal 2015.



	Location of Gain (Loss)	2017			2016			2015
		(Dollars in thousands)
Commodity and freight derivatives	Cost of goods sold	$	208,199		$	(49,975	)	$	143,314
Foreign exchange derivatives	Cost of goods sold	(13,140		)	(10,904		)	8,962
Foreign exchange derivatives	Marketing, general and administrative	(1,604		)	(97		)	3,589
Interest rate derivatives	Interest expense	8			(6,292		)	107
Embedded derivative	Other income (loss)	30,538			—			—
Total		$	224,001		$	(67,268	)	$	155,972

Commodity and Freight Contracts:

When we enter a commodity purchase or sales commitment, we are exposed to risks related to price changes and performance including delivery, quality, quantity and shipment period. If market prices decrease, we are exposed to risk of loss in the market value of inventory and purchase contracts with a fixed or partially fixed price. Conversely, we are exposed to risk of loss on our fixed or partially fixed price sales contracts if market prices increase.

Our use of hedging reduces the exposure to price volatility by protecting against adverse short-term price movements, but it also limits the benefits of favorable short-term price movements. To reduce the price risk associated with fixed price commitments, we generally enter into commodity derivative contracts, to the extent practical, to achieve a net commodity position within the formal position limits we have established and deemed prudent for each commodity. These contracts are primarily transacted on regulated commodity futures exchanges but may also include over-the-counter derivative instruments when deemed appropriate. For commodities where there is no liquid derivative contract, risk is managed using forward sales contracts, other pricing arrangements and, to some extent, futures contracts in highly correlated commodities. These contracts are economic hedges of price risk, but are not designated as hedging instruments for accounting purposes. The contracts are recorded on our Consolidated Balance Sheets at fair values based on quotes listed on regulated commodity exchanges or the market prices of the underlying products listed on the exchanges, except that fertilizer and propane contracts are accounted for as normal purchase and normal sales transactions. Unrealized gains and losses on these contracts are recognized in cost of goods sold in our Consolidated Statements of Operations.

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those conditions. In addition, all purchase and sales contracts are subject to credit approvals and appropriate terms and conditions.

As of August 31, 2017 , and 2016 , we had outstanding commodity futures, options and freight contracts that were used as economic hedges, as well as fixed-price forward contracts related to physical purchases and sales of commodities. The table below presents the notional volumes for all outstanding commodity and freight contracts accounted for as derivative instruments.



	2017		2016
	Long	Short	Long	Short
	(Units in thousands)
Grain and oilseed - bushels	570,673	768,540	774,279	995,396
Energy products - barrels	15,072	18,252	14,740	6,470
Processed grain and oilseed - tons	299	2,347	541	2,060
Crop nutrients - tons	9	15	108	135
Ocean and barge freight - metric tons	2,777	1,766	4,406	877
Rail freight - rail cars	176	75	205	79
Natural gas - MMBtu	500	—	3,550	300

Foreign Exchange Contracts

We conduct a substantial portion of our business in U.S. dollars, but we are exposed to immaterial risks relating to foreign currency fluctuations primarily due to grain marketing transactions in South America and Europe, and purchases of products from Canada. We use foreign currency derivative instruments to mitigate the impact of exchange rate fluctuations. Although our overall risk relating to foreign currency transactions is not significant, exchange rate fluctuations do, however, impact the ability of foreign buyers to purchase U.S. agricultural products and the competitiveness of U.S. agricultural products compared to the same products offered by alternative sources of world supply. The notional amounts of our foreign exchange derivative contracts were $776.7 million and $802.2 million as of August 31, 2017 , and August 31, 2016 , respectively.

Embedded Derivative Asset

Under the terms of our strategic investment in CF Nitrogen, if CF Industries' credit rating is reduced below certain levels by two of three specified credit ratings agencies, we are entitled to receive a non-refundable annual payment of $5.0 million from CF Industries. The payment would continue on an annual basis until the date that CF Industries' credit rating is upgraded to or above certain levels by two of the three specified credit ratings agencies or February 1, 2026, whichever is earlier.

During the three months ended November 30, 2016, CF Industries' credit rating was reduced below the specified levels and we recorded a gain of $29.1 million in other income (loss) in our Consolidated Statement of Operations. During November 2016, we received a $5.0 million payment from CF Industries, which reduced the fair value of the associated embedded derivative asset to $24.1 million as of November 30, 2016. CF Industries' credit rating has not changed from November 30, 2016. In addition, during fiscal 2017, we recorded adjustments of $1.4 million in other income (loss) in our Consolidated Statement of Operations to reflect the $25.5 million fair value of the embedded derivative asset on our Consolidated Balance Sheet as of August 31, 2017 . The current and long-term portions of the embedded derivative asset are

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included in derivative assets and other assets on our Consolidated Balance Sheet, respectively. See Note 13, Fair Value Measurements for more information on the valuation of the embedded derivative.

Derivatives Designated as Cash Flow or Fair Value Hedging Strategies

As of August 31, 2017 , and 2016 , we have certain derivatives designated as cash flow and fair value hedges.

Interest Rate Contracts

We have outstanding interest rate swaps with an aggregate notional amount of $495.0 million designated as fair value hedges of portions of our fixed-rate debt. Our objective in entering into these transactions is to offset changes in the fair value of the debt associated with the risk of variability in the 3-month U.S. dollar LIBOR interest rate, in essence converting the fixed-rate debt to variable-rate debt. Offsetting changes in the fair values of both the swap instruments and the hedged debt are recorded contemporaneously each period and only create an impact to earnings to the extent that the hedge is ineffective. During the years ended August 31, 2017 , and 2016 , we recorded offsetting fair value adjustments of $12.8 million and $9.8 million , respectively, with no ineffectiveness recorded in earnings.

The following table presents the pretax gains (losses) recorded in other comprehensive income relating to cash flow hedges for the years ended August 31, 2017 , 2016 , and 2015 :



	2017		2016			2015
	(Dollars in thousands)
Interest rate derivatives	$	—	$	(10,070	)	$	(4,078	)

The following table presents the pretax gains (losses) relating to cash flow hedges that were reclassified from accumulated other comprehensive loss into income for the years ended August 31, 2017 , 2016 , and 2015 :



	Location of Gain (Loss)	2017			2016			2015
		(Dollars in thousands)
Interest rate derivatives	Interest expense	$	(1,742	)	$	(5,071	)	$	(792	)

Note 13 Fair Value Measurements

ASC Topic 820, Fair Value Measurement defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

We determine fair values of derivative instruments and certain other assets, based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. ASC Topic 820

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describes three levels within its hierarchy that may be used to measure fair value, and our assessment of relevant instruments within those levels is as follows:

Level 1: Values are based on unadjusted quoted prices in active markets for identical assets or liabilities. These assets and liabilities include exchange-traded derivative instruments, Rabbi Trust investments, deferred compensation investments and available-for-sale investments.

Level 2: Values are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. These assets and liabilities include interest rate, foreign exchange, and commodity swaps; forward commodity and freight purchase and sales contracts with a fixed price component; and other OTC derivatives whose value is determined with inputs that are based on exchange traded prices, adjusted for location specific inputs that are primarily observable in the market or can be derived principally from, or corroborated by, observable market data.

Level 3: Values are generated from unobservable inputs that are supported by little or no market activity and that are a significant component of the fair value of the assets or liabilities. These unobservable inputs would reflect our own estimates of assumptions that market participants would use in pricing related assets or liabilities. Valuation techniques might include the use of pricing models, discounted cash flow models or similar techniques.

The following tables present assets and liabilities, included on our Consolidated Balance Sheets, that are recognized at fair value on a recurring basis, and indicate the fair value hierarchy utilized to determine these fair values. Assets and liabilities are classified, in their entirety, based on the lowest level of input that is a significant component of the fair value measurement. The lowest level of input is considered Level 3. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of fair value assets and liabilities within the fair value hierarchy levels.

Recurring fair value measurements at August 31, 2017 , and 2016 , are as follows:



	2017
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(Dollars in thousands)
Assets:
Commodity and freight derivatives	$	48,491	$	336,157	$	—	$	384,648
Foreign currency derivatives	—		8,771		—		8,771
Interest rate swap derivatives	—		9,978		—		9,978
Deferred compensation assets	52,414		—		—		52,414
Deferred purchase price receivable	—		—		548,602		548,602
Embedded derivative	—		25,533		—		25,533
Other assets	14,846		—		—		14,846
Total	$	115,751	$	380,439	$	548,602	$	1,044,792
Liabilities:
Commodity and freight derivatives	$	31,189	$	278,573	$	—	$	309,762
Foreign currency derivatives	—		19,931		—		19,931
Interest rate swap derivatives	—		707		—		707
Total	$	31,189	$	299,211	$	—	$	330,400

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	2016
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(Dollars in thousands)
Assets:
Commodity and freight derivatives	$	62,538	$	437,654	$	—	$	500,192
Foreign currency derivatives	—		21,551		—		21,551
Interest rate swap derivatives	—		22,078		—		22,078
Deferred compensation assets	50,099		—		—		50,099
Other assets	12,678		—		—		12,678
Total	$	125,315	$	481,283	$	—	$	606,598
Liabilities:
Commodity and freight derivatives	$	22,331	$	468,971	$	—	$	491,302
Foreign currency derivatives	—		22,289		—		22,289
Interest rate swap derivatives	—		8		—		8
Accrued liability for contingent crack spread payments related to purchase of noncontrolling interests	—		—		15,051		15,051
Total	$	22,331	$	491,268	$	15,051	$	528,650

Commodity, freight and foreign currency derivatives — Exchange-traded futures and options contracts are valued based on unadjusted quoted prices in active markets and are classified within Level 1. Our forward commodity purchase and sales contracts with fixed-price components, ocean freight contracts and other OTC derivatives are determined using inputs that are generally based on exchange traded prices and/or recent market bids and offers, adjusted for location specific inputs, and are classified within Level 2. The location specific inputs are generally broker or dealer quotations, or market transactions in either the listed or OTC markets. Changes in the fair values of these contracts are recognized in our Consolidated Statements of Operations as a component of cost of goods sold.

Interest rate swap derivatives — Fair values of our interest rate swap derivatives are determined utilizing valuation models that are widely accepted in the market to value these OTC derivative contracts. The specific terms of the contracts, as well as market observable inputs, such as interest rates and credit risk assumptions, are factored into the models. As all significant inputs are market observable, all interest rate swaps are classified within Level 2. Changes in the fair values of contracts not designated as hedging instruments for accounting purposes are recognized in our Consolidated Statements of Operations as a component of interest expense. See Note 12, Derivative Financial Instruments and Hedging Activities for additional information about interest rates swaps designated as fair value and cash flow hedges.

Deferred compensation and other assets — Our deferred compensation investments, Rabbi Trust assets and available-for-sale investments in common stock of other companies are valued based on unadjusted quoted prices on active exchanges and are classified within Level 1. Changes in the fair values of these other assets are primarily recognized in our Consolidated Statements of Operations as a component of marketing, general and administrative expenses.

Embedded derivative asset — The embedded derivative asset relates to contingent payments inherent to our investment in CF Nitrogen. The inputs used in the fair value measurement include the probability of future upgrades and downgrades of CF Industries' credit rating based on historical credit rating movements of other public companies and the discount rates to be applied to potential annual payments based on applicable historical and current yield coupon rates. Based on these observable inputs, our fair value measurement is classified within Level 2. See Note 12, Derivative Financial Instruments and Hedging Activities for additional information.

Deferred purchase price receivable — The fair value of the DPP receivable included in receivables, net and other assets, is determined by discounting the expected cash flows to be received. The expected cash flows are primarily based on unobservable inputs consisting of the face amount of the Receivables adjusted for anticipated credit losses. Significant changes in the anticipated credit losses could result in a significantly higher (or lower) fair value measurement. Due to the use of significant unobservable inputs in the pricing model, including management's assumptions related to anticipated credit losses, the DPP receivable is classified as a Level 3 fair value measurement. The reconciliation of the DPP receivable for the year ended August 31, 2017 , is included in Note 2, Receivables .

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Accrued liability for contingent crack spread payments related to purchase of CHS McPherson (formerly NCRA) noncontrolling interests — The contingent period related to the CHS McPherson noncontrolling interests expired as of August 31, 2017, and no liabilities remain for future payments. Throughout the contingent period, the fair value of the contingent consideration liability was calculated utilizing an average price option model, an adjusted Black-Scholes pricing model commonly used in the energy industry to value options. The model used market observable inputs and unobservable inputs, including adjusted forward crack spread margins and quotes obtained from third party vendors. Management also took into consideration current and expected market trends and compared the liability’s fair value to hypothetical payments using known historical market data to assess reasonableness of the resulting fair value. Significant increases (decreases) in either of the inputs would have resulted in significantly higher (lower) fair value measurements. Due to significant unobservable inputs used in the pricing model, the liability was classified within Level 3.

The following table represents a reconciliation of the contingent crack spread liability measured at fair value using significant unobservable inputs (Level 3) for the years ended August 31, 2017 , and 2016 :



	Level 3 Liabilities
	Accrued Liability for Contingent Crack Spread Payments Related to Purchase of Noncontrolling Interests
	2017			2016
	(Dollars in thousands)
Balance - beginning of year	$	15,051		$	75,982
Total (gains) losses included in cost of goods sold	(15,051		)	(60,931		)
Balance - end of year	$	—		$	15,051

There were no material transfers between Level 1, Level 2 and Level 3 assets and liabilities during the years ended August 31, 2017 , and 2016 .

Note 14 Commitments and Contingencies

Environmental

We are required to comply with various environmental laws and regulations incidental to our normal business operations. To meet our compliance requirements, we establish reserves for the probable future costs of remediation of identified issues, which are included in cost of goods sold and marketing, general and administrative in our Consolidated Statements of Operations. The resolution of any such matters may affect consolidated net income for any fiscal period; however, we believe any resulting liabilities, individually or in the aggregate, will not have a material effect on our consolidated financial position, results of operations or cash flows during any fiscal year.

Other Litigation and Claims

We are involved as a defendant in various lawsuits, claims and disputes, which are in the normal course of our business. The resolution of any such matters may affect consolidated net income for any fiscal period; however, we believe any resulting liabilities, individually or in the aggregate, will not have a material effect on our consolidated financial position, results of operations or cash flows during any fiscal year.

Guarantees

Credit Commitments

CHS Capital has commitments to extend credit to customers if there is no violation of any condition established in the contracts. As of August 31, 2017 , CHS Capital’s customers have additional available credit of $966.6 million .

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Lease Commitments

We lease certain property, plant and equipment used in our operations under both capital and operating lease agreements. Our operating leases, which are primarily for rail cars, equipment, vehicles and office space have remaining terms of one to 15 years. Total rental expense for operating leases was $72.1 million , $74.7 million and $56.7 million for the years ended August 31, 2017 , 2016 , and 2015 , respectively. We lease certain rail cars, equipment, vehicles and other assets under capital lease arrangements. These assets are included in property, plant and equipment, net on our Consolidated Balance Sheets while the corresponding capital lease obligations are included in long-term debt. See Note 5, Property, Plant and Equipment and Note 7, Notes Payable and Long-Term Debt for more information about capital leases.

Minimum future lease payments required under noncancelable operating leases as of August 31, 2017 , are as follows:



	(Dollars in thousands)
2018	$	57,957
2019	44,369
2020	32,620
2021	25,720
2022	19,154
Thereafter	56,800
Total minimum future lease payments	$	236,620

Unconditional Purchase Obligations

Unconditional purchase obligations are commitments to transfer funds in the future for fixed or minimum amounts or quantities of goods or services at fixed or minimum prices. Our long-term unconditional purchase obligations primarily relate to pipeline and grain handling take-or-pay and through-put agreements and are not recorded on our Consolidated Balance Sheets. As of August 31, 2017 , minimum future payments required under long-term commitments that are noncancelable, and that third parties have used to secure financing for the facilities that will provide the contracted goods, are as follows:



	Payments Due by Period
	Total		2018		2019		2020		2021		2022		Thereafter
	(Dollars in thousands)
Long-term unconditional purchase obligations	$	716,181	$	54,409	$	55,280	$	57,367	$	57,916	$	58,478	$	432,731

Total payments under these arrangements were $70.5 million , $88.0 million and $66.8 million for the years ended August 31, 2017 , 2016 , and 2015 , respectively.

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Note 15 Supplemental Cash Flow and Other Information

Additional information concerning supplemental disclosures of cash flow activities for the years ended August 31, 2017 , 2016 , and 2015 , is included in the table below.



	2017		2016		2015
	(Dollars in thousands)
Net cash paid during the period for:
Interest	$	160,040	$	147,089	$	130,571
Income taxes	14,571		5,184		54,229
Other significant noncash investing and financing transactions:
Notes receivable sold under Securitization Facility	747,345		—		—
Securitized debt extinguished under Securitization Facility	554,000		—		—
Deferred purchase price recognized under Securitization Facility	547,553		—		—
Land and Improvements received for notes receivable	138,699		—		—
Capital expenditures and major repairs incurred but not yet paid	22,490		44,307		60,226
Capital lease obligations incurred	6,832		23,921		9,741
Capital equity certificates redeemed with preferred stock	19,985		76,756		—
Capital equity certificates issued in exchange for Ag acquisitions	2,928		19,089		15,618
Accrual of dividends and equities payable	12,121		198,031		384,427

Note 16 Related Party Transactions

Related party transactions with equity investees, primarily CF Nitrogen, TEMCO, Ardent Mills and Ventura Foods for the years ended August 31, 2017 , 2016 , and 2015 , respectively, and balances as of August 31, 2017 , and 2016 , respectively, are as follows:



	2017		2016		2015
	(Dollars in thousands)
Sales	$	3,183,944	$	2,728,793	$	2,310,875
Purchases	2,610,887		1,707,990		1,762,663



	2017		2016
	(Dollars in thousands)
Due from related parties	$	33,119	$	25,386
Due to related parties	39,232		40,543

As a cooperative, we are owned by farmers and ranchers and their member cooperatives, which are referred to as members. We buy commodities from and provide products and services to our members. Individually, our members do not have a significant ownership in the Company.

Note 17 Acquisitions

During the year ended August 31, 2017 , we acquired various businesses for $13.1 million in consideration. These acquisitions were not material, individually or in aggregate, to our consolidated financial statements.

During the year ended August 31, 2016 , we acquired various businesses primarily in our Ag segment for $50.3 million in consideration. These acquisitions were not material, individually or in aggregate, to our consolidated financial statements.

During the year ended August 31, 2015, we acquired various businesses in our Ag segment for $321.0 million in consideration. These acquisitions were not material, individually or in aggregate, to our consolidated financial statements. Included among these transactions was the June 2015 acquisition of Patriot Holdings, LLC, which operates an ethanol plant

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that has expanded our grain origination opportunities and increased our renewable fuels capacity. Additionally, we acquired Northstar Agri Industries, a canola processing and refining business in July 2015. The acquisition expanded our oilseed processing platform to include canola in addition to soybeans, expanded our oil product offerings to global food companies, and linked growers selling canola seed to CHS to an integrated supply chain.

CHS McPherson Refinery Inc. (formerly National Cooperative Refinery Association or "NCRA")

In November 2011 , our Board of Directors approved a stock transfer agreement between us and GROWMARK, Inc. ("Growmark"), and a stock transfer agreement between us and MFA Oil Company ("MFA"). Prior to the first closing under these agreements, we owned approximately 74.4% of NCRA’s outstanding capital stock. With the final closing in September 2015, our ownership increased to 100% . The entity is now known as CHS McPherson Refinery Inc. ("CHS McPherson").

Pursuant to the agreement with Growmark and MFA, we acquired the remaining capital stock for an aggregate base purchase price of $351.0 million . In addition, Growmark and MFA were entitled to receive up to two contingent purchase price payments following each individual closing, calculated as set forth in the agreement with Growmark and MFA, if the average crack spread margin referred to therein over the year ending on August 31 of the calendar year in which the contingent payment date fell exceeded a specified target. Total contingent consideration payments made were $19.1 million . No payments were made during the year ended August 31, 2017.

In accordance with ASC Topic 480, patronage earned by Growmark and MFA has been included as interest expense in our Consolidated Statements of Operations. No interest was recognized during the years ended August 31, 2017 or 2016. During the year ended August 31, 2015, $31.0 million was recognized as interest expense for the patronage earned by Growmark and MFA.

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Exhibit 10.4

CHS ANNUAL VARIABLE PAY PLAN

MASTER PLAN DOCUMENT

PLAN PURPOSE

The purpose of the CHS Annual Variable Pay Plan (the Plan) is to provide a direct financial incentive for eligible employees (each a “Participant”) who contribute to the achievement of company and business unit financial goals, as well as individual employee performance goals that are aligned with organizational priorities and CHS Leadership Expectations.

The objectives of this Plan are to:


•	Drive strong business performance and reward Participants for achieving goals relevant to the business


•	Emphasize shared ownership of enterprise and business unit initiatives, and reward for the achievement of collective results through collaborative work efforts


•	Create a line of sight for Participants to see how their actions contribute to the achievement of company goals


•	Reward goal achievement that is competitive with compensation in the external market and aligns with organizational and market best practices


•

PERFORMANCE PERIOD

Each performance period for the Plan (“Performance Period”) will be a CHS fiscal year, currently September 1 through August 31. A new Performance Period begins each fiscal year.

PLAN TRIGGER

Except as may be expressly determined for any Performance Period, the Threshold Return on Adjusted Equity (ROAE) Performance, as identified in the Plan Appendix, must be met in order for all or a portion of award compensation to be earned under the Plan.


•	If the company Threshold ROAE Performance is attained, then compensation earned under all Plan components, including enterprise, business unit and individual goals, are calculated independently.


•	If company Threshold ROAE Performance is not achieved, the following will occur:


◦	Corporate participants’ opportunity for earned award is zero for all plan components.

◦

Business unit participants’ opportunity for earned award is zero for all plan components unless the business unit ROA goal is achieved at target level or higher. If the business unit target ROA performance is achieved, the company ROAE and Individual components earned award is zero, and award compensation is earned only for the performance achieved at the business unit ROA target level or higher for the ROA component.

Company ROAE and business unit ROA goals are defined in the following Plan Goals section and Plan Appendix A.

PLAN GOALS

Corporate functions and business units have predetermined goals and weightings which include CHS ROAE, CHS or business unit Return on Assets (ROA), and individual goals.

The President and Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) establish, and the CHS Board of Directors approves, the Threshold, Target and Maximum ROAE and ROA Performance Targets at the corporate level for each Performance Period established pursuant to the Plan. Business unit ROA goals are determined by the CEO and CFO in collaboration with senior finance and business unit leaders. The ROAE and ROA performance targets for each such Performance Period are measured only over the entire Performance Period.

Compensation for any Performance Period is earned as a percent of the Target award, and is mathematically interpolated when performance results occur between the three financial Performance Targets.



Financial Performance Targets	Description	Award as % of Target
Maximum	Maximum Performance Goal	200%
Target	Targeted Performance Goal	100%
Threshold	Minimum Performance Goal	50%

The company ROAE and business unit ROA Performance Targets are published in Plan Appendix A after the beginning of each new Performance Period.

Goals are weighted based on 1) whether Participants are in a corporate function or a business unit, and 2) the level of direct impact Participants’ roles have on ROAE and/or in decision making and implementation of working capital and other asset (ROA) optimization actions, and is further defined in a Plan Appendix for the Performance Period. The table below illustrates goal weightings by employee group.



Employee Group	ROAE	ROA	Individual
Corporate Leadership	60%	20%	20%
Corporate Contributors	60%	10%	30%
Business Unit Leadership	20%	60%	20%
Business Unit Contributors	10%	60%	30%

ROAE is measured at the enterprise level for corporate and business unit Participants, ROA is measured at the enterprise level for corporate Participants, and at the business unit level, as determined by the CEO and CFO in collaboration with senior finance and business unit leaders, for business unit Participants. ROAE and ROA goals are communicated to business unit leaders and Participants by Finance. Individual goals are determined by the Participant’s manager and the Participant.

AWARD METHODOLOGY

Each Participant’s variable pay award opportunity pursuant to the Plan for any Plan Period (Potential Award) varies by grade level and/or position, and is expressed as a percent of base pay. The Company can vary a Participant’s potential award by grade level and/or position at the sole discretion of the Plan Administrators. For salaried employees, the base pay used to establish the potential award is the employee’s base salary at the end of the Performance Period (August 31). For hourly employees, the base pay used to establish the potential award is actual earnings during the Performance Period, to include base pay and overtime earnings.

Award opportunity and calculation examples are included in Plan Appendix A.

AWARD PAYMENT

Actual compensation earned under the Plan for any Performance Period is determined, approved and issued as soon as administratively feasible following the close of the Performance Period. No compensation shall be deemed earned under the Plan until after approval by the CHS Board of Directors. Awards can be modified or terminated without Participant consent for any reason up until the CHS Board of Directors approves the amounts earned under the awards. Once such amounts are approved, the awards cannot be modified or terminated, except as is expressly provided in the Plan under General Provisions, Non-Recurring Events. In all cases, any compensation earned under the Plan shall be paid no later than November 30 following the Performance Period for which it was earned. Compensation paid under the Plan is paid through the same process as the Participant’s paycheck. All payments are subject to appropriate withholdings.

ADMINISTRATION

The CFO and Chief Human Resources Officer administer the Plan (each a Plan Administrator). The Plan Administrators, along with the CEO, are authorized to make all decisions as required in the administration of the Plan and to exercise their discretion to define, interpret, construe and apply Plan provisions, approve, administer, withdraw, and make any exceptions to the terms of the Plan. Any adjustments to the Plan based on extraordinary business conditions requires CHS Board of Directors and CFO approval at the company level, and CEO and CFO approval at the business unit level.

ELIGIBILITY

•

Participants must be employed by the company in an eligible non-union position, categorized as a full-time or part-time regularly scheduled employee at the end of the Performance Period or have a status change during the Performance Period, as defined in the table below. Employees who cease being employed after the end of the Performance Period and before the actual payment date will be paid any compensation earned under the Plan for that Performance Period.


•	Participants must have a hire or transfer date to an eligible position on or before June 1 of the Performance Period.


•	Participants who become eligible during the Performance Period will earn and be paid prorated compensation, based on the number of days worked in an eligible position during the Performance Period, divided by 365.


•	Participant awards may be prorated based on changes in compensation or role during the Performance Period, at the sole discretion of the Participant’s manager and the business unit Human Resources Director.


•	Participants must actively work a minimum of 30 days during the Performance Period to be eligible to earn compensation under the Plan for that Performance Period.


•	Employees who are eligible to earn variable compensation through any other bonus, commission or incentive plan are not eligible to participate in the Plan and will not be a Participant for purposes of this Plan, unless approved by the Plan Administrators.

•

Participants may forfeit their eligibility to earn compensation under the Plan for any Performance Period if it is determined that they have failed to meet job performance criteria and standards, which includes but is not limited to documented performance issues, or that they have committed acts of misconduct, dishonesty or violation of CHS policies and procedures. Forfeiture of eligibility must be approved by the business unit Human Resources Director and Compensation Director.

See Eligibility Status chart on following page.

The following status table outlines eligibility status criteria and how compensation earned under the Plan is prorated when a change in status occurs during the Performance Period:



Status Category	Period of Time Included	Period of Time Excluded
Deceased	Days actually worked	Days beyond last day worked
Full Time	Days actually worked	Days of ineligible status
Leave of Absence	First 90 days (discretionary, requires Human Resources approval)	Days beyond 90 days
Long-Term Disability	Days actually worked	Days on LTD
Military Leave	First 90 days	Days beyond 90 days
Part Time	Days actually worked	Days of ineligible status
Position Elimination	Days actually worked if employee has worked 90 days	Days beyond last day worked
Retirement as defined by the CHS Retirement Plan rules	Days actually worked	Days beyond last day worked
Separation from employment and return to employment during Performance Period	Days actually worked before and after separation if employee returns before 90 days	Days actually worked prior to and during separation if employee returns after 90 days
Short-Term Disability (including FMLA)	First 90 days	Days beyond 90 days
Temp/Seasonal	Not eligible	Days as Temp/Seasonal
Worker’s Compensation	First 90 days	Days beyond 90 days

^* This plan document applies to eligible U.S. employees and expatriates. Plan documents are customized by region for eligible international Participants.

^* Primary eligibility for the Plan is defined by business unit and position. Groups of employees that are not eligible for the Plan after consideration of the eligibility rules above include: Energy Certified Energy Specialists; Energy Transportation and Distribution Drivers; Energy Zip Trip store employees; Business Solutions commissioned sales employees; Production Incentive eligible employees; Ag Associates; Country Operations employees below the Vice President level with location codes outside of Inver Grove Heights. This list can be changed at any time by the Plan Administrators.

GENERAL PROVISIONS

CHS reserves the right to change or cancel this plan at any time. This document does not intend to create an employment contract or provide a guarantee of continued employment. Contact your manager or HR Business Partner for more information on the CHS Annual Variable Pay Plan. There is no vested right to any payment prior to the award determination and the CHS Annual Variable Pay Plan does not give rise to any vested right to future payments.

Non-Recurring Events

Non-recurring business events, which have a substantial impact on CHS financial results during the Plan Period, may be excluded from the calculations for determining awards. Such events could include major gains or losses from acquisitions (including planned short-term losses), divestitures, lawsuits, significant business write-offs, casualty losses or sale of assets.

Clawback or Recoupment

All awards under this Plan shall be subject to recovery or the penalties pursuant to any applicable law, rule or regulation or applicable stock exchange rule, including, without limitation, Section 304 of the Sarbanes-Oxley Act of 2002, Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any applicable stock exchange listing rule adopted Pursuant thereto.

Exhibit 10.4A

CHS ANNUAL VARIABLE PAY PLAN

APPENDIX A, PLAN DETAILS - FISCAL 2017

COMPANY RETURN ON ADJUSTED EQUITY (ROAE) and RETURN ON ASSET (ROA) GOALS



Performance Targets	CHS ROAE	CHS ROA	Description	Award as % of Target
Maximum	11.5%	11.5%	Maximum Performance Goal	200%
Target	9.5%	9.5%	Targeted Performance Goal	100%
Threshold	7.5%	7.5%	Minimum Performance Goal	50%

RETURN ON ADJUSTED EQUITY (ROAE) EXPLANATION

ROAE is a measurement of company profitability and is calculated by dividing adjusted net income (earnings) by adjusted equity. To determine the equity and earnings adjustments, CHS subtracts preferred stock dividends from earnings, and reduces equity by the amount of preferred stock on the balance sheet.

ROAE

Adjusted Fiscal Year Earnings

Adjusted Beginning Year Equity

RETURN ON ASSETS (ROA) EXPLANATION

ROA is a measurement of how well a company uses its assets to generate earnings and is calculated by dividing operating income by total assets minus working capital liabilities. Details on the ROA calculation, goal determination and 2017 goals can be answered by the finance contact for your group.

ROA

Operating Income

Total Assets - Working Capital Liabilities

AWARD OPPORTUNITY EXAMPLES

The example below illustrates threshold, target, and maximum award opportunities for an employee with a pay basis of $70,000 and a target award potential of 5%.



Performance Targets	Award Opportunity as % of Base Pay	Award Opportunity Calculation	Award Opportunity Amount
Maximum	10.0%	$70,000 x 10.0%	$7,000
Target	5.0%	$70,000 x 5.0%	$3,500
Threshold	2.5%	$70,000 x 2.5%	$1,750

Compensation earned will be mathematically interpolated when performance results occur between the three Performance Levels.

AWARD CALCULATION EXAMPLES

The following is an example of an annual variable pay compensation calculation for an employee who is a Business Unit Contributor with a $70,000 pay basis and a target award potential of 5.0% ($3,500).



Performance Measures	Goal Weighting	Target Award	X	Performance to Target	=	Goal/ Award Result
CHS ROAE	10%	$350	X	90%	=	$315
Business Unit ROA	60%	$2,100	X	100%	=	$2,100
Individual Performance	30%	$1,050	X	170%	=	$1,785
Totals	100%	$3,500				$4,200

The following is an example of an annual variable pay compensation calculation for an employee who is in a Corporate Contributor role with a $70,000 pay basis and a target award potential of 5.0% ($3,500).



Performance Measures	Goal Weighting	Target Award	X	Performance to Target	=	Goal/ Award Result
CHS ROAE	60%	$2,100	X	90%	=	$1,890
Enterprise ROA	10%	$350	X	100%	=	$350
Individual Performance	30%	$1,050	X	170%	=	$1,785
Totals	100%	$3,500				$4,025

In the following example, the CHS ROAE threshold goal required to trigger all components of the Plan is not met. However, the business unit exceeds its target goal. The annual variable pay compensation calculation is for an employee who is in a Business Unit Contributor role with a $70,000 pay basis and a target award potential of 5.0% ($3,500).

The business unit achieves 110% of its ROA target and only the earned business unit award is paid. Zero compensation is earned for the CHS ROAE and Individual Performance components of the award.



Performance Measures	Goal Weighting	Target Award	X	Performance to Target	=	Goal/ Award Result
CHS ROAE	10%	$350	X	0%	=	$0
Business Unit ROA	60%	$2,100	X	110%	=	$2,310
Individual Performance	30%	$1,050	X	0%	=	$0
Totals	100%	$3,500				$2,310

Exhibit 10.4B

CHS ANNUAL VARIABLE PAY PLAN

APPENDIX B, 2017 PLAN MODIFICATION

CHS is implementing a plan modification to the CHS Annual Variable Pay Plan (the Plan) for fiscal 2017 (“Modification”). This allows for an Award at the threshold performance target to be earned if the Company’s fiscal 2017 ROAE is less than the threshold performance target, provided the following enterprise goals (“Modification Goals”) are both determined to have been achieved:


•	Total company selling, general and administrative (SG&A) expenses do not exceed the amount of total Company SG&A budgeted in the fiscal 2017 budget approved by the CHS Board of Directors; and


•	At least 95 percent of exempt-classified employees have completed fiscal 2016 performance reviews and fiscal 2017 performance goals as measured in the records of the Company’s TalentManager system.

Under the Modification, if CHS does not achieve the threshold ROAE results, but it is determined the Modification Goals have been met, Participants will earn an award for all three components (ROAE, ROA, Individual) at the threshold award level.

The examples below illustrate earned compensation under the Modification for both a Corporate Contributor and a Business Unit Contributor who have the same base pay and target award opportunity:

Corporate Contributor



Award Target	ROAE 60% Weight	ROA 10% Weight	Individual 30% Weight	100% Total
Maximum	$4,200	$700	$2,100	$7,000
Target	$2,100	$350	$1,050	$3,500
Threshold	$1,050	$175	$525	$1,750

Business Unit Contributor



Award Target	ROAE 10% Weight	ROA 60% Weight	Individual 30% Weight	100% Total
Maximum	$700	$4,200	$2,100	$7,000
Target	$350	$2,100	$1,050	$3,500
Threshold	$175	$1,050	$525	$1,750

Also, if the threshold ROAE results are not achieved and it is determined that the Modification Goals have been met, a business unit that achieves ROA results of target goal level or higher will receive the higher value of the following awards:


•	Modification earned award at threshold award level, or


•	Earned award for the business unit component only (CHS ROAE and Individual component earned award is zero under this scenario)

In the following example a business unit achieves 110% of its target ROA goal, so even though the CHS threshold ROAE results have not been achieved, the business unit component of the Plan provides an earned award. In this case the business unit earned award is $2,310, which is higher than the Modification earned award of $1,750. The Business Unit Contributor role would receive the earned award of $2,310.

Business Unit Contributor



Performance Measures	Goal Weighting	Target Award	X	Performance to Target	=	Goal/ Award Result
CHS ROAE	10%	$350	X	0%	=	$0
Business Unit ROA	60%	$2,100	X	110%	=	$2,310
Individual Performance	30%	$1,050	X	0%	=	$0
Totals	100%	$3,500				$2,310

Exhibit 10.5

CHS LONG-TERM INCENTIVE PLAN

Master Plan Document

PLAN PURPOSE

Our mission at CHS is to improve company profitability and shareholder value. The CHS Long-Term Incentive Plan (the Plan) is provided to eligible executives and key employees (each a “Participant”) who can have influence on long-term business success.

The objectives of this Plan are to:


•	Link a component of the Participants’ total compensation with long-term business performance


•	Encourage Participants to provide competitive returns to our shareholders’ equity over the long term


•	Maintain an overall competitive compensation structure for Participants


•	Retain key executives and employees

PERFORMANCE PERIOD

Each performance period for the Plan (“Performance Period”) is measured in three (3) fiscal-year segments. A new 3-year Performance Period begins each fiscal year. Therefore, three concurrent Performance Periods are in operation at any one time, as illustrated below.

PLAN TRIGGER

CHS must meet the threshold the Return on Adjusted Equity (ROAE) goal, as identified in the table below, in order for an award to be paid.

PLAN GOALS

The potential incentive compensation to be earned during any Performance Period is calculated based on a Return on Adjusted Equity (ROAE) metric. Performance Period goals are provided in a plan appendix.

The President and Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) establish, and the CHS Board of Directors approves, the Threshold, Target, Maximum and Superior Performance Maximum ROAE performance targets for each 3-year Performance Period established pursuant to this Plan. The ROAE performance targets for each such Performance Period are cumulative targets that are measured only over the entire Performance Period.

AWARD METHODOLOGY

Each Participant’s incentive award opportunity pursuant to this Plan for any Performance Period (Potential Award) is expressed as a percentage of each Participant’s average fiscal year-end salary over the three-year Performance Period. The Company can vary Participants’ Potential Award by position and grade level, in the sole discretion of the Plan Administrators. The salary and percent opportunity used to calculate the Potential Award are based on status as of August 31 ^st of each year of the Performance Period.

Potential Awards for Participants who are not in the plan for the entire measurement period are pro-rated based upon full month(s) participation out of the 36 month plan Performance Period.

Award amounts are interpolated when results fall between performance targets.

AWARD PAYMENT

The following chart provides a hypothetical example to demonstrate a typical Performance Period, award, and vesting schedule.

This example shows that Performance Period A is accrued based on fiscal years one, two and three, and earned in November after the end of the Performance Period. Funds are vested 1/3 each year, in January of years four, five and six, and are subject to the provisions of the CHS Deferred Compensation Plan.

Awards can be modified or terminated without Participant consent for any reason up until the Board of Directors approves the performance targets achieved for any 3-year Performance Period. At the conclusion of any 3-year Performance Period, the Plan Administrators will prepare a report summarizing CHS actual ROAE performance as compared to the performance targets established for that Performance Period. The Plan Administrators will present that report to the CHS Board of Directors for approval. After the Board of Directors approves the performance targets achieved for any 3-year Performance Period, awards cannot be modified or terminated, except as is expressly provided in this Plan under General Provisions, Non-Recurring Events. Upon, and subject to Board of Directors approval, actual Participant awards shall be determined and communicated to each Participant. Any award pursuant to this Plan for current Participants shall be credited to a Participant’s CHS Deferred Compensation Plan account and are subject to the operating rules of the CHS Deferred Compensation Plan.

No Participant will earn or be paid any award under this Plan unless and to the extent the Board of Directors determines that CHS has met the established ROAE performance targets established for any specific 3-year Performance Period.

ADMINISTRATION

The CFO and Senior Vice President of Human Resources administer this Plan (each a Plan Administrator). The Plan Administrators, along with the CEO, are authorized to make all decisions as required in the administration of the Plan and to exercise their discretion to define, interpret, construe and apply plan provisions, approve, administer, withdraw, and make any exceptions to the terms of the Plan. Any adjustments to the Plan based on extraordinary business conditions requires CHS Board of Directors and CFO approval.

ELIGIBILITY

With respect to any 3-year Plan Period that has not yet been completed, a Participant has no right to continued eligibility for a Potential Award. Participants will be eligible to receive an award under this Plan only if a Participant is eligible for payout pursuant to the terms of this Plan on the date the Performance Period ends. Participants will forfeit their eligibility for a Potential Award for one or more Performance Periods if the plan administrators determine in their sole discretion that the Participant is no longer eligible to be a Participant.

Participants are nominated by members of the CHS Strategic Leadership team (“SLT”), and must be approved by the SLT. In its sole discretion, the SLT shall review and approve any potential Participant’s eligibility to participate in the Plan, and shall annually grant approval for continuation for all current Participants, and grant approval for new Participants on an ongoing basis. Without in any way limiting the discretion to determine Participant eligibility, a Participant will be eligible for awards under this Plan only if the Participant is determined to be performing at or above a Meets Expectations performance level, and has not been determined to have committed any act of misconduct, dishonesty or violation of CHS policies and procedures.

A Participant may forfeit eligibility to earn compensation under the Plan for any Performance Period if it has been determined that the Participant has failed to meet job performance criteria and standards, which includes but is not limited to documented performance issues, or acts of misconduct, dishonesty or violation of CHS policies and procedures have been committed. Forfeiture of eligibility must be approved by the Plan Administrators.


•	New Participants


◦	Participants must have been eligible under this Plan for a minimum of six months of any 3-year Performance Period in order to be eligible for an award for that Performance Period. Awards for eligible new Participants will be pro-rated based upon full month(s) participation out of the 36 month plan performance period.


◦	Employees who are approved for participation by the last day in February of any year will begin participation no later than March 1st. Participants approved after this date will begin participation in the Plan September first of the following fiscal year.


•	Retirement, Death or Permanent Disability

◦

Current Plan in Operation : Participants who retire (defined as Separation from Service on or after age 55 with 10 Years of Service or age 65, as defined by CHS Deferred Compensation Plan rules), die or become permanently disabled during a Performance Period will receive an award for that Performance Period according to the actual ROAE performance of CHS during that Performance Period, in line with the ROAE performance targets for that period, prorated by the number of full month(s) of participation in the 36 month Performance Period. The pro-rated award will be determined and processed in the same manner and at the same time as for each other Participant. Any award payout pursuant to this section of this Plan will immediately vest and will be subject to the provisions of the CHS Deferred Compensation Plan.


•	Termination

If a Participant’s employment ends for any reason other than retirement, death or disability during a Performance Period, or after a Performance Period, but prior to the Board of Directors approving an award for that Performance Period, the participant will no longer be eligible for, will not earn and will not receive an award under this Plan for that Performance Period.

GENERAL PROVISIONS

Amendments or Termination of Plan

During the course of any three-year Performance Period, CHS may amend or terminate this Plan without prior notification or the consent of the Participants.

Nothing in this Plan is intended to be nor is a contract for employment, continued employment or continued participation in the Plan, or in any other CHS compensation or benefit program.

Non-Recurring Events

Non-recurring business events, which have a substantial impact on CHS financial results during the Plan period, may be excluded from the calculations for determining awards. Such events could include major gains or losses from acquisitions (including planned short-term losses), divestitures, lawsuits, significant business write-offs, casualty losses, or a sale of assets.

Clawback or Recoupment

All awards under this Plan shall be subject to recovery or the penalties pursuant to (i) any CHS clawback policy, as may be adopted or amended from time to time, or (ii) any applicable law, rule or regulation or applicable stock exchange rule, including, without limitation, Section 304 of the Sarbanes-Oxley Act of 2002, Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any applicable stock exchange listing rule adopted Pursuant thereto.

Exhibit 10.5A

CHS LONG TERM INCENTIVE PLAN

Plan Appendix

Fiscal 2014-2016 RETURN ON ADJUSTED EQUITY



Performance Targets	CHS ROAE	Description	Award as % of Target Goal
Superior Performance Maximum	20.0%	Superior Performance Goal	400%
Maximum	14.0%	Maximum Performance Goal	200%
Target	10.0%	Target Performance Goal	100%
Threshold	8.0%	Minimum Performance Goal	20%

Note: Compensation earned for any Performance Period is mathematically interpolated when

performance results occur between the three ROAE Performance Targets.

RETURN ON ADJUSTED EQUITY



ROAE (percentage determined by dividing three year adjusted year-end earnings by three year adjusted beginning year equity)	=	Three year Adjusted Year-End Earnings (earnings minus preferred stock dividends)
		Three year Adjusted Beginning Year Equity (beginning year equity minus preferred stock)

* Equity is the difference between total assets and total liabilities in the balance sheet.

Exhibit 10.5B

CHS LONG-TERM INCENTIVE PLAN

Master Plan Document

PLAN PURPOSE

Our mission at CHS is to improve company profitability and stakeholder value. The CHS Long-Term Incentive Plan (the Plan) is provided to eligible executives and key employees (each a “Participant”) who can have influence on long-term business success.

The objectives of this Plan are to:


•	Link a component of the Participants’ total compensation with long-term business performance


•	Encourage Participants to provide competitive returns to our shareholders’ equity over the long term


•	Maintain an overall competitive compensation structure for Participants


•	Retain key executives and employees

PERFORMANCE PERIOD

PLAN TRIGGER

CHS must meet the threshold the Return on Adjusted Equity (ROAE) goal, as identified in the table below, in order for an award to be paid.

PLAN GOALS

AWARD METHODOLOGY

Potential Awards for Participants who are not in the plan for the entire measurement period are pro-rated based upon full month(s) participation out of the 36 month plan Performance Period.

Award amounts are interpolated when results fall between performance targets.

AWARD PAYMENT

The following chart provides a hypothetical example to demonstrate a typical Performance Period, award, and vesting schedule.

ADMINISTRATION

ELIGIBILITY


•	New Participants


◦	Participants must have been eligible under this Plan for a minimum of six months of any 3-year Performance Period in order to be eligible for an award for that Performance Period. Awards for eligible new Participants will be pro-rated based upon full month(s) participation out of the 36 month plan performance period.


◦	Employees who are approved for participation by the last day in February of any year will begin participation no later than March 1st. Participants approved after this date will begin participation in the Plan September first of the following fiscal year.


•	Retirement, Death or Permanent Disability

◦


•	Termination

GENERAL PROVISIONS

Amendments or Termination of Plan

During the course of any three-year Performance Period, CHS may amend or terminate this Plan without prior notification or the consent of the Participants.

Nothing in this Plan is intended to be nor is a contract for employment, continued employment or continued participation in the Plan, or in any other CHS compensation or benefit program.

Non-Recurring Events

Clawback or Recoupment

Exhibit 10.5C

CHS LONG TERM INCENTIVE PLAN

Plan Appendix

Fiscal 2015-2017 RETURN ON ADJUSTED EQUITY GOALS



Performance Targets	CHS ROAE	Description	Award as % of Target Goal
Superior Performance Maximum	20.0%	Superior Performance Goal	400%
Maximum	14.0%	Maximum Performance Goal	200%
Target	10.0%	Target Performance Goal	100%
Threshold	8.0%	Minimum Performance Goal	50%

Note: Compensation earned for any Performance Period is mathematically interpolated when

performance results occur between the three ROAE Performance Targets.

RETURN ON ADJUSTED EQUITY EXPLANATION



ROAE (percentage determined by dividing three year adjusted year-end earnings by three year adjusted beginning year equity)	=	Three year Adjusted Year-End Earnings (earnings minus preferred stock dividends)
		Three year Adjusted Beginning Year Equity (beginning year equity minus preferred stock)

* Equity is the difference between total assets and total liabilities in the balance sheet.

Exhibit 10.5D

CHS LONG-TERM INCENTIVE PLAN

Master Plan Document

PLAN PURPOSE

Our mission at CHS is to improve company profitability and stakeholder value. The CHS Long-Term Incentive Plan (the “Plan”) is provided to eligible executives and key employees (each a “Participant”) who can have influence on long-term business success.

The objectives of this Plan are to:


•	Link a component of the Participants’ total compensation with long-term business performance


•	Encourage Participants to provide competitive returns to our invested capital over the long term


•	Maintain an overall competitive compensation structure for Participants


•	Retain key executives and employees

PERFORMANCE PERIOD

PLAN TRIGGER

CHS must meet the threshold Return on Invested Capital (“ROIC”) goal, as identified in a Plan Appendix, in order for an award to be paid.

PLAN GOALS

The potential incentive compensation to be earned during any Performance Period is calculated based on a ROIC metric. Performance Period goals are provided in a plan appendix.

The President and Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) establish, and the CHS Board of Directors approves, the Threshold, Target, Maximum and Superior Performance Maximum ROIC performance targets for each 3-year Performance Period established pursuant to this Plan. The ROIC performance targets for each such Performance Period are cumulative targets that are measured only over the entire Performance Period.

AWARD METHODOLOGY

Each Participant’s incentive award opportunity pursuant to this Plan for any Performance Period (“Potential Award”) is expressed as a percentage of each Participant’s average fiscal year-end salary over the three-year Performance Period. The Company can vary Participants’ Potential Award by position and level, in the sole discretion of the Plan Administrators. The salary and percent opportunity used to calculate the Potential Award are based on status as of August 31 st of each year

of the Performance Period.

Potential Awards for Participants who are not in the plan for the entire measurement period are pro-rated based upon full month(s) participation out of the 36 month plan Performance Period.

Award amounts are interpolated when results fall between performance targets.

AWARD PAYMENT

The following chart provides a hypothetical example to demonstrate a typical Performance Period, award, and vesting schedule.

Awards can be modified or terminated without Participant consent for any reason up until the Board of Directors approves the performance targets achieved for any 3-year Performance Period. At the conclusion of any 3-year Performance Period, the Plan Administrators will prepare a report summarizing CHS actual ROIC performance as compared to the performance targets established for that Performance Period. The Plan Administrators will present that report to the CHS Board of Directors for approval. After the Board of Directors approves the performance targets achieved for any 3-year Performance Period, awards cannot be modified or terminated, except as is expressly provided in this Plan under General Provisions, Non-Recurring Events. Upon, and subject to Board of Directors approval, actual Participant awards shall be determined and communicated to each Participant. Any award pursuant to this Plan for current Participants shall be credited to a Participant’s CHS Deferred Compensation Plan account and are subject to the operating rules of the CHS Deferred Compensation Plan.

No Participant will earn or be paid any award under this Plan unless and to the extent the Board of Directors determines that CHS has met the established ROIC performance targets established for any specific 3-year Performance Period.

ADMINISTRATION

The CFO and Head of Human Resources administer this Plan (each a “Plan Administrator”). The Plan Administrators, along with the CEO, are authorized to make all decisions as required in the administration of the Plan and to exercise their discretion to define, interpret, construe and apply plan provisions, approve, administer, withdraw, and make any exceptions to the terms of the Plan. Any adjustments to the Plan based on extraordinary business conditions requires CHS Board of Directors and CFO approval.

ELIGIBILITY

the Participant is no longer eligible to be a Participant.

A Participant may forfeit eligibility to earn compensation under the Plan for any Performance Period if it has been determined that the Participant has failed to meet job performance criteria and standards, which includes but is not limited to documented performance issues, or acts of misconduct, dishonesty or violation of CHS policies and procedures. Forfeiture of eligibility must be approved by the Plan Administrators.


•	New Participants


◦	Participants must have been eligible under this Plan for a minimum of six months of any 3-year Performance Period in order to be eligible for an award for that Performance Period. Awards for eligible new Participants will be pro-rated based upon full month(s) participation out of the 36 month plan performance period.


◦	Employees who are approved for participation by the last day in February of any year will begin participation no later than March 1st. Participants approved after this date will begin participation in the Plan September first of the following fiscal year.


•	Retirement, Death or Permanent Disability

◦

Current Plan in Operation: Participants who retire (defined as Separation from Service on or after age 55 with 10 Years of Service or age 65, as defined by CHS Deferred Compensation Plan rules), die or become permanently disabled during a Performance Period will receive an award for that Performance Period according to the actual ROIC performance of CHS during that Performance Period, in line with the ROIC performance targets for that period, prorated by the number of full month(s) of participation in the 36 month Performance Period. The pro-rated award will be determined and processed in the same manner and at the same time as for each other Participant. Any award payout pursuant to this section of this Plan will immediately vest and will be subject to the provisions of the CHS Deferred Compensation Plan.


•	Termination

GENERAL PROVISIONS

Amendments or Termination of Plan

During the course of any three-year Performance Period, CHS may amend or terminate this Plan without prior notification or the consent of the Participants.

Nothing in this Plan is intended to be nor is a contract for employment, continued employment or continued participation in the Plan, or in any other CHS compensation or benefit program.

Non-Recurring Events

Clawback or Recoupment

Exhibit 10.5E

CHS LONG TERM INCENTIVE PLAN

Plan Appendix

Fiscal 2016-2018 RETURN ON ADJUSTED EQUITY GOALS



Performance Targets	CHS ROAE	Description	Award as % of Target Goal
Superior Performance Maximum	20.0%	Superior Performance Goal	400%
Maximum	14.0%	Maximum Performance Goal	200%
Target	10.0%	Target Performance Goal	100%
Threshold	8.0%	Minimum Performance Goal	50%

Note: Compensation earned for any Performance Period is mathematically interpolated when

performance results occur between the three ROAE Performance Targets.

RETURN ON ADJUSTED EQUITY EXPLANATION



ROAE (percentage determined by dividing three year adjusted year-end earnings by three year adjusted beginning year equity)	=	Three year Adjusted Year-End Earnings (earnings minus preferred stock dividends)
		Three year Adjusted Beginning Year Equity (beginning year equity minus preferred stock)

* Equity is the difference between total assets and total liabilities in the balance sheet.

Exhibit 10.5F

CHS LONG TERM INCENTIVE PLAN

Plan Appendix

Fiscal 2017- 2019 RETURN ON ADJUSTED EQUITY GOALS



Performance Targets	CHS ROAE	Description	Award as % of Target Goal
Superior Performance Maximum	20.0%	Superior Performance Goal	400%
Maximum	9.0%	Maximum Performance Goal	200%
Target	7.0%	Target Performance Goal	100%
Threshold	5.5%	Minimum Performance Goal	50%

Note: Compensation earned for any Performance Period is mathematically interpolated when

performance results occur between the three ROAE Performance Targets.

RETURN ON ADJUSTED EQUITY EXPLANATION



ROAE (percentage determined by dividing three year adjusted year-end earnings by three year adjusted beginning year equity)	=	Three year Adjusted Year-End Earnings (earnings minus preferred stock dividends)
		Three year Adjusted Beginning Year Equity (beginning year equity minus preferred stock)

* Equity is the difference between total assets and total liabilities in the balance sheet.

Exhibit 10.5G

CHS LONG TERM INCENTIVE PLAN

Fiscal 2018-Fiscal 2020 Plan Appendix

Fiscal 2018-2020 RETURN ON INVESTED CAPITAL GOALS

Note: Compensation earned for any Performance Period is mathematically interpolated when performance results occur between the three ROIC Performance Targets.

RETURN ON INVESTED CAPITAL EXPLANATION

*Funded Debt is the average of the funded debt at the beginning of Fiscal Year 2018 and at the end of Fiscal Year 2020, and Equity is the equity at the beginning of Fiscal Year 2018.

Exhibit 13.B

SECOND AMENDMENT

CHS INC.

DEFERRED COMPENSATION PLAN

(2015 Restatement)

WHEREAS, CHS Inc. (the “Company”) has heretofore established and maintains a nonqualified deferred compensation plan which is currently embodied in an amended and restated document effective May 19, 2015 and entitled “CHS Inc. Deferred Compensation Plan, Master Plan Document (2015 Restatement)” as amended (hereinafter, the “Plan document”);

WHEREAS, the Company has reserved to itself the power to make further amendments of the Plan document;

NOW, THEREFORE, the Plan document is hereby amended as follows:


1.	REHIRED PARTICIPANTS. For purposes of clarifying the Plan’s treatment of re-hired Participants, subsection 3.3 is amended by the addition of the following new paragraph (e):

(e)

Rehired Participants . An Employee who previously participated in the Plan, ceased to be eligible to defer amounts under the Plan and was paid all deferred amounts under the Plan before again becoming eligible to participate shall be treated as a newly eligible Employee under (a) above. An Employee who previously participated in the Plan, ceased to be eligible to defer amounts under the Plan for twenty four (24) months or longer before again becoming eligible to participate shall be treated as a newly eligible Employee under (a) above, regardless of whether all amounts deferred under the Plan have been paid to the Employee. A rehired Employee who is treated as a newly eligible Employee shall complete such forms as required under Section 2.2 with respect to future deferrals made after re enrollment. With respect to any unpaid amounts deferred prior to re enrollment, the Employee’s prior elections shall continue to apply, and any payments scheduled to be made following the Employee’s Separation from Service that occurred before re hire shall be made as scheduled.


2.	DIRECTOR RETIREMENT BENEFITS. Effective for the Company’s 2017 fiscal year and each fiscal year thereafter, subsection 3.7 is amended to read as follows:

3.7 Director Retirement Plan Amount . For the Company’s 2017 fiscal year and each fiscal year thereafter, the Company shall credit an amount to each Company Director Participant’s Director Retirement Plan Account based on Company performance metrics as determined by the Company’s Board, in its sole discretion. For example, the fiscal 2017 amount will be based on three year cumulative CHS, Inc. Return On Adjusted Equity (ROAE) for fiscal years 2015, 2016 and 2017. Contribution amounts for fiscal 2017 based on performance level are presented in the following table:



Amount	Performance Definition
$100,000	Superior Performance
$50,000	Maximum
$25,000	Target
$12,500	Minimum
$0

Awards will be prorated for performance between performance levels. For Directors who leave the Board during a fiscal year, a Director’s credit for that partial fiscal year will be the target amount ($25,000) prorated through the end of the month in which the Director departs. Directors who join the Company’s Board during a fiscal year will receive a credit for that partial fiscal year based on actual performance metrics achieved for the fiscal year in which the Director joins the Board, prorated from the first of the month next following the month in which the Director joins the Board to the end of the fiscal year.

A Participant’s Annual Director Retirement Plan Amount, if any, shall be credited on a date or dates to be determined by the Company’s Board, in its sole discretion.


3.	SAVINGS CLAUSE. Save and except as expressly herein amended, the Plan document shall remain in full force and effect.

CHS Inc.

By: Jay D. Debertin

Title: President and Chief Executive Officer

STATE OF MINNESOTA )

)SS.

COUNTY OF DAKOTA )

On this 14th day of September, 2017, before me personally appeared Jay D. Debertin to me personally known, who, being by me first duly sworn, did depose and say that he is the President and CEO of CHS Inc., the corporation named in the foregoing instrument; and that said instrument was signed on behalf of said corporation by authority of its Board of Directors; and he acknowledged said instrument to be the free act and deed of said corporation.

Wynne T. Turner

Notary

Exhibit 10.16

CHS STRATEGIC LEADERSHIP TEAM

RETENTION AWARD DOCUMENT

PURPOSE

The purpose of the Strategic Leadership Team (SLT) Retention Award (the Award) is to preserve key leadership continuity and bench strength and a competitive compensation position to the external market.

ELIGIBILITY

The President and CEO and Executive Vice Presidents who were eligible participants in the 2015-2017 Long Term Incentive Plan (LTIP) with active employment status when the award is offered are eligible for an award.

AWARD METHODOLOGY

Award value is the percentage of base salary used for incentive compensation awards at the Threshold-level based on the participant’s job level as of November 1, 2017.

EARNING THE AWARD


•	The Award will be earned only if the executive


◦	Continues active employment through January 1, 2020


◦	During the Award Earning Period, is consistently meeting performance expectations, and


◦	During the Award Earning Period is not determined to have committed any act of misconduct or any violation of the CHS Code of Conduct or a CHS policy

•

If employment ends prior to the end of the Award Earning Period due to death, disability, retirement or termination of employment by CHS for a reason not related to performance or behavior, the award will be earned based on the number of full months worked from the time the award is granted to the date one of the events listed above occurs as the numerator, and the number twenty-six (26) as the denominator.

PAYMENT OF THE EARNED AWARD


•	Payment will be in cash within 30 days of the date on which the Award is earned, through the same process as the participant’s paycheck. All payments are subject to appropriate withholdings


•	Awards cannot be contributed to the CHS Deferred Compensation Plan


•	Earned award is not eligible to be included as part of pension income

Nothing in this Plan is intended to be nor is a contract for employment, continued employment or continued participation in the Plan, or in any other CHS compensation or benefit program.

Exhibit 10.34B

EXECUTION COPY

OMNIBUS AMENDMENT NO. 2

This OMNIBUS AMENDMENT NO. 2, dated as of July 18, 2017 (this “ Amendment ”), is entered into by and among COFINA FUNDING, LLC, a Delaware limited liability company, as seller (the “ Seller ”), CHS INC. (“ CHS ”), a Minnesota corporation, as Servicer (in such capacity, the “ Servicer ”) and as an Originator, CHS CAPITAL, LLC, as an Originator (together with CHS, the “ Originators ”), the CONDUIT PURCHASERS, COMMITTED PURCHASERS and PURCHASER AGENTS set forth on the signature pages hereto, THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as administrative agent (in such capacity, the “ Administrative Agent ”) and U.S. BANK NATIONAL ASSOCIATION, as custodian (the “ Custodian ”), and is (i) the second amendment to the Custodian Agreement (as defined below) and (ii) the second amendment to the Sale Agreement (as defined below).

RECITALS

A. WHEREAS, the Seller, the Administrative Agent and the Custodian have entered into that certain Custodian Agreement, dated as of July 22, 2016 (as amended by that certain Omnibus Amendment No. 1, dated as of February 14, 2017 (“ Omnibus Amendment No. 1 ”), and as further amended, restated, supplemented or otherwise modified through the date hereof, the “ Custodian Agreement ”);

B. WHEREAS, pursuant to and in accordance with Section 26 of the Custodian Agreement, the Seller, the Administrative Agent and the Custodian desire to amend the Custodian Agreement in certain respects as provided herein;

C. WHEREAS, the Originators and the Seller have entered into that certain Sale and Contribution Agreement, dated as of July 22, 2016 (as amended by Omnibus Amendment No. 1, and as further amended, restated, supplemented or otherwise modified through the date hereof, the “ Sale Agreement ” and, together with the Custodian Agreement, the “ Agreements ”); and

D. WHEREAS, pursuant to and in accordance with Section 8.1 of the Sale Agreement, the Originators, the Seller, the Administrative Agent and the Purchasers desire to amend the Sale Agreement in certain respects as provided herein.

NOW, THEREFORE, based upon the above Recitals, the mutual premises and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, intending to be legally bound, hereby agree as follows:

SECTION 1. Definitions and Interpretation . Each capitalized term used but not defined herein has the meaning ascribed thereto in Appendix A to the Amended and Restated Receivables Purchase Agreement, dated as of the date hereof (the “ RPA ”), by and among the Seller, the Purchasers, the Administrative Agent and CHS, as servicer. The rules of interpretation set forth in Appendix A to the RPA are hereby incorporated as if fully set forth herein.

SECTION 2. Amendments to the Custodian Agreement . The Seller, the Administrative Agent and the Custodian hereby agree that the Custodian Agreement is amended as follows:

(a) The first paragraph of Section 1 of the Custodian Agreement is hereby amended and restated in its entirety to read as follows:

“Capitalized terms used but not defined herein shall have the meanings assigned to them in that certain Amended and Restated Receivables Purchase Agreement, dated as of July 18, 2017, among the Seller, CHS, individually and as Servicer, the various Conduit Purchasers, Committed Purchasers and Purchaser Agents from time to time thereto, and the Administrative Agent (as amended, restated, modified or supplemented from time to time, the “ Receivables Purchase Agreement ”).”.

(b) The second paragraph of Section 2 of the Custodian Agreement is hereby amended and restated in its entirety to read as follows:

“Not later than six (6) months following the Effective Date, the Seller shall deliver or cause to be delivered and released to the Custodian the Custodian Files pertaining to each of the Effective Date Loans identified in the Loan Schedule annexed hereto, including, but not limited to: (i) a schedule of each item or document in the Custodian Files, (ii) the original executed Obligor Note, duly indorsed in blank with note transfer powers in the form attached hereto as Exhibit 5 , (iii) originals or copies (including, without limitation, electronic copies) of each Loan Document executed in connection therewith or related thereto, and (iv) acknowledgment copies of applicable UCC filings against the related Obligor with respect to such Loan. Any electronic copies delivered to the Custodian hereunder shall be held by the Custodian in electronic form.

Not later than thirty (30) days following the date on which the Seller acquires an interest in any Loans (other than any Effective Date Loan) pursuant to the Sale Agreement, the Seller shall deliver or cause to be delivered and released to the Custodian the Custodian Files pertaining to such Loans (as identified on the Loan Schedule annexed hereto, which Loan Schedule may be updated from time to time on the applicable Closing Date), including, but not limited to: (i) a schedule of each item or document in the Custodian Files, (ii) the original executed Obligor Note, duly indorsed in blank with note transfer powers in the form attached hereto as Exhibit 5 , (iii) originals or copies (including, without limitation, electronic copies) of each Loan Document executed in connection therewith or related thereto, and (iv) acknowledgment copies of applicable UCC filings against the related Obligor with respect to such Loan. Any electronic copies delivered to the Custodian hereunder shall be held by the Custodian in electronic form.

Not later than thirty (30) days following any amendment or modification to any Loan Document, the Seller shall deliver or cause to be delivered and released to the Custodian such Loan Documents.”.

(c) Section 3 of the Custodian Agreement is hereby amended by replacing the text “Not later than 45 days following the initial Closing Date or eight (8) Business Days following any subsequent Closing Date” where it appears therein with the text “Not later than (x) with

respect to Effective Date Loans, six (6) months and 5 days following the Effective Date, and (y) with respect to any other Loans, thirty-five (35) days following the date on which the Seller acquires an interest in such Loans pursuant to the Sale Agreement, as applicable,” in its place.

(d) Section 5 of the Custodian Agreement is hereby amended by replacing the text “Not later than 50 days following the initial Closing Date or 13 Business Days following any subsequent Closing Date” where it appears therein with the text “Not later than (x) with respect to Effective Date Loans, six (6) months and 5 days following the Effective Date, and (y) with respect to any other Loans, thirty-five (35) days following the date on which the Seller acquires an interest in such Loans pursuant to the Sale Agreement, as applicable,” in its place.

(e) The Custodian Agreement is hereby amended by replacing the text “Receivables Financing Agreement” in each instance it appears therein with the text “Receivables Purchase Agreement” in its place.

(f) The Custodian Agreement is hereby amended by replacing the text “Obligations” where it appears therein with the text “Aggregate Unpaids” in its place.

(g) The Custodian Agreement is hereby amended by replacing the text “Collateral” in each instance it appears therein with the text “Seller Assets” in its place.

SECTION 3. Amendments to the Sale Agreement . The Originators, the Seller, the Administrative Agent and the Purchasers hereby agree that the Sale Agreement is amended as follows:

(a) Clause (a) of the first paragraph of Section 1.1 of the Sale Agreement is hereby amended by replacing the text “the Receivables Financing Agreement, dated as of July 22, 2016 (as amended, restated, modified or otherwise supplemented from time to time, the “ Receivables Financing Agreement ”)” where it appears therein with the text “the Amended and Restated Receivables Purchase Agreement, dated as of July 18, 2017 (as amended, restated, modified or otherwise supplemented from time to time, the “ Receivables Purchase Agreement ”)” in its place.

(b) Section 1.1 of the Sale Agreement is hereby amended by incorporating the following definition in the appropriate alphabetical sequence:

““ Second Amendment Effective Date ” means July 18, 2017.”.

(c) The definition of “Net Worth” in Section 1.1 of the Sale Agreement is hereby amended and restated in its entirety to read as follows:

““ Net Worth ” means as of the last Business Day of each Collection Period preceding any date of determination, the excess, if any, of (a) the Deferred Purchase Price owed to the Company under the Receivables Purchase Agreement at such time, over (b) the sum of (i) the aggregate outstanding principal balance of the Subordinated Loans (including any Subordinated Loan proposed to be made on the date of determination) and (ii) any other outstanding amounts owed by the Seller pursuant to the Receivables Purchase Agreement.”.

(d) Section 2.5 of the Sale Agreement is hereby amended and restated in its entirety to read as follows:

“ Deliveries . Each Originator (a) shall deliver to the Custodian (x) with respect to any Effective Date Loan, within six (6) months after the Effective Date, and (y) with respect to all other Loans, within thirty (30) days after the date the Company acquires an interest in any Loans pursuant to this Agreement, as applicable, the Custodian File with respect to each Loan transferred by it to the Company ( provided that if any Loan transferred by an Originator to the Company does not contain an Obligor Note, then the applicable Originator may electronically deliver the Custodian File with respect to such Loan) and (b) has recorded and filed, at its own expense, any financing statements (and continuation statements with respect to such financing statements when applicable) naming such Originator as transferor and the Company as purchaser covering the Loans and the Related Assets thereof then existing and thereafter created or acquired meeting the requirements of applicable state law in such manner and in such jurisdictions as are reasonably requested by the Company or necessary to perfect the transfer and assignment of the Loans and Related Assets from such Originator to the Company. The Company shall provide the Custodian with an updated copy of Annex 3 hereto concurrently with any update thereto hereunder. Each Originator has delivered a file-stamped copy of such financing statements or other evidence of such filings to the Company and has taken, or shall take, at the Company’s expense, all other steps as are necessary under applicable law to perfect such transfers and assignments and has delivered, or shall deliver, confirmation of such steps as are reasonably requested by the Company or the Required Purchasers.”.

(e) Section 4.1(dd) of the Sale Agreement is hereby amended and restated in its entirety to read as follows: “[Reserved].”.

(f) Section 5.1 of the Sale Agreement is hereby amended by inserting a new clause (s) at the end thereof to read as follows:

“(s) Delivery of Custodian File and Obligor Notes .

(i) Not later than six (6) months following the Effective Date, the applicable Originator shall deliver or cause to be delivered directly to the Custodian for the benefit of the Affected Parties the Custodian File relating to each Effective Date Loan, and shall cause all Obligor Notes (other than any Obligor Note that has been signed electronically) related to such Effective Date Loan to be (x) duly indorsed in blank with note transfer powers in the form set forth in the Custodian Agreement and (y) delivered to the Custodian;

(ii) Not later than thirty (30) days following the date the Company acquires an interest any Loan (other than any Effective Date Loan) pursuant to this Agreement, the applicable Originator shall deliver or cause to be delivered directly

to the Custodian for the benefit of the Affected Parties the Custodian File relating to such Pool Assets, and shall cause all Obligor Notes (other than any Obligor Note that has been signed electronically) related to such Pool Assets to be (x) duly indorsed in blank with note transfer powers in the form set forth in the Custodian Agreement and (y) delivered to the Custodian; and

(iii) Not later than thirty (30) days following any amendment or modification to any Loan Document, the applicable Originator shall deliver or cause to be delivered such Loan Document to the Custodian.”.

(g) The Sale Agreement is hereby amended by replacing the text “Receivables Financing Agreement” in each instance it appears therein with the text “Receivables Purchase Agreement” in its place.

(h) The Sale Agreement is hereby amended by replacing the text “Event of Default” in each instance it appears therein with the text “Event of Termination” in its place.

SECTION 4. Consent . Pursuant to and in accordance with Section 26 of the Custodian Agreement, the Purchasers party hereto hereby acknowledge and consent to the amendments to the Custodian Agreement set forth in Section 2 .

SECTION 5. Agreements in Full Force and Effect as Amended . Except as specifically amended hereby, all provisions of the Agreements shall remain in full force and effect. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreements other than as expressly set forth herein and shall not constitute a novation of the Agreements.

SECTION 6. Representations and Warranties . Each of the Seller, the Servicer and the Originators hereby represent and warrant to the Administrative Agent and the Purchasers, as of the date of this Amendment, as follows:

(a) this Amendment has been duly executed and delivered by it;

(b) this Amendment constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other laws relating to the enforcement of creditors’ rights generally and general principles of equity (regardless of whether enforcement is sought at equity or law);

(c) no authorization or approval or other action by, and no notice to, license from or filing with, any Governmental Authority is required for the due execution, delivery and performance of this Amendment;

(d) the execution, delivery and performance by it of this Amendment (i) is within its limited liability company or corporate powers, (ii) has been duly authorized by all necessary

limited liability company or corporation action, and (iii) does not contravene, violate or breach (1) its organizational documents or (2) any Applicable Law; and

(e) immediately after giving effect to this Amendment, (i) each of the representations and warranties of the Seller or the Originators, as applicable, set forth in the RPA (in the case of the Seller and the Servicer) or in the Sale Agreement (in the case of the Seller and the Originators) that are qualified as to materiality are true and correct, and each not so qualified are true and correct in all material respects (except to the extent such representations and warranties explicitly refer solely to an earlier date or period, in which case they shall be true and correct as of such earlier date or period), and (ii) no Event of Termination, Unmatured Event of Termination, Servicer Termination Event or Unmatured Servicer Termination Event has occurred and is continuing.

SECTION 7. Conditions to Effectiveness . This Amendment shall become effective upon receipt by the Administrative Agent of:

(a) executed counterparts of this Amendment;

(b) executed counterparts of the RPA; and

(c) a copy of the resolutions or unanimous written consent, as applicable, of the board of directors or board of managers, as the case may be, of each of Seller and Originator required to authorize the execution, delivery and performance by it of this Amendment and the transactions contemplated hereby, certified by its secretary or any other authorized person.

SECTION 8. Miscellaneous .

(a) This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery of an executed counterpart hereof by facsimile or by electronic mail attachment in portable document format (.pdf) shall be effective as delivery of an originally executed counterpart.

(b) Any provisions of this Amendment which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(c) THIS AMENDMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF,

EXCEPT TO THE EXTENT THAT THE PERFECTION, THE EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE ADMINISTRATIVE AGENT OR ANY PURCHASER IN THE POOL ASSETS OR RELATED ASSETS IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK).

(d) Headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

(e) Section 13.7 of the RPA is hereby incorporated as if fully set forth herein.

(f) This Amendment is a Transaction Document and all references to a “Transaction Document” in the Agreements and the other Transaction Documents (including, without limitation, all such references in the representations and warranties in the Agreements and the other Transaction Documents) shall be deemed to include this Amendment.

(G) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

IN WITNESS WHEREOF , the undersigned have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first written above.

COFINA FUNDING, LLC , as Seller

By: /s/ Eric Born
Name: Eric Born
Title: Secretary

CHS INC. , as Servicer and an Originator

By: /s/ Timothy Skidmore
Name: Tim Skidmore
Title: Vice President and CFO

CHS CAPITAL, LLC , as Servicer and an Originator

By: /s/ Eric Born
Name: Eric Born
Title: Secretary and Treasurer

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH , as Administrative Agent, a Committed Purchaser and Purchaser Agent for the BTMU Purchaser Group

By: /s/ Richard Gregory Hurst
Name: Richard Gregory Hurst
Title: Managing Director

VICTORY RECEIVABLES CORPORATION , as a Conduit Purchaser

By: /s/ David V. DeAngelis
Name: David V. DeAngelis
Title: Vice President

NIEUW AMSTERDAM RECEIVABLES CORPORATION B.V. , as a Conduit Purchaser

By: /s/ E.M. van Ankeren
Name: E.M. van Ankeren
Title: Managing Director

By: /s/ G.J. Huizing
Name: Richard Gregory Hurst
Title: Managing Director

COÖPERATIEVE RABOBANK U.A. , as a Committed Purchaser

By: /s/ Eugene van Esveld
Name: Eugene van Esveld
Title: Managing Director

By: /s/ Jennifer Vervoorn
Name: Jennifer Vervoorn
Title: Director

COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH , as Purchaser Agent for the Rabobank Purchaser Group

By: /s/ Raymond Dizon
Name: Raymond Dizon
Title: Executive Director

By: /s/ Thomas McNamara
Name: Thomas McNamara
Title: Vice President

U.S. BANK NATIONAL ASSOCIATION , as Custodian

By: /s/ Samantha Howe
Name: Samantha Howe
Title: Vice President

Exhibit 10.35A

EXECUTION COPY

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

Dated as of July 18, 2017

among

CHS INC.,

individually and as Servicer,

COFINA FUNDING, LLC,

as Seller,

THE VARIOUS CONDUIT PURCHASERS, COMMITTED PURCHASERS, AND PURCHASER AGENTS FROM TIME TO TIME PARTY HERETO,

and

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH,

as Administrative Agent



		Page
ARTICLE I	PURCHASES AND REINVESTMENTS	2
SECTION 1.1	Purchases; Limits on Purchasers' Obligations	2
SECTION 1.2	Purchase Procedures; Assignment of Seller's Interests	3
SECTION 1.3	Reinvestments of Certain Collections; Payment of Remaining Collections; Asset Portfolio	6
ARTICLE II	COMPUTATION RULES	8
SECTION 2.1	Selection of Rate Tranches	8
SECTION 2.2	Computation of each Purchaser Group Investment and each Purchaser's Tranche Investment	9
SECTION 2.3	Computation of Account Debtor Concentration Limit, Account Debtor Concentration Overage Amount, Concentration Overage Amount (Loans) and Unpaid Balance	9
SECTION 2.4	Computation of Yield	9
SECTION 2.5	Estimates of Yield Rate, Fees, Etc.	10
ARTICLE III	SETTLEMENTS	10
SECTION 3.1	Settlement Procedures	10
SECTION 3.2	Deemed Collections; Event of Repurchase; Reduction of Total Investment, Etc.	14
SECTION 3.3	Payments and Computations, Etc.	16
SECTION 3.4	Treatment of Collections and Deemed Collections	20
ARTICLE IV	FEE AND YIELD PROTECTION	20
SECTION 4.1	Fees	20
SECTION 4.2	Yield Protection	20
SECTION 4.3	Funding Losses	22
ARTICLE V	CONDITIONS PRECEDENT	23
SECTION 5.1	Closing Date	23
SECTION 5.2	Effective Date	23
SECTION 5.3	Conditions Precedent to All Purchases and Reinvestments	24
ARTICLE VI	REPRESENTATIONS AND WARRANTIES	25
SECTION 6.1	Representations and Warranties of Seller	25
SECTION 6.2	Representations and Warranties of CHS	30
ARTICLE VII	GENERAL COVENANTS OF SELLER AND SERVICER	34
SECTION 7.1	Covenants of Seller	34
SECTION 7.2	Covenants of CHS	41
SECTION 7.3	Full Recourse	46
SECTION 7.4	Corporate Separateness; Related Matters and Covenants	46
ARTICLE VIII	ADMINISTRATION AND COLLECTION	50
SECTION 8.1	Designation of Servicer	50
SECTION 8.2	Duties of Servicer	51
SECTION 8.3	Rights of Administrative Agent	53
SECTION 8.4	Responsibilities of Servicer	54



	i

TABLE OF CONTENTS

(continued)

Page



SECTION 8.5	Further Action Evidencing Purchases and Reinvestments	54
SECTION 8.6	Application of Collections	54
SECTION 8.7	Funds and Documents to be held in Trust	54
ARTICLE IX	SECURITY INTEREST	55
SECTION 9.1	Grant of Security Interest	55
SECTION 9.2	Further Assurances	55
SECTION 9.3	Remedies; Waiver	56
ARTICLE X	EVENTS OF DEFAULT	56
SECTION 10.1	Events of Termination	56
SECTION 10.2	Remedies	59
ARTICLE XI	PURCHASER AGENTS; ADMINISTRATIVE AGENT; CERTAIN RELATED MATTERS	60
SECTION 11.1	Authorization and Action of Program Administrator	60
SECTION 11.2	Limited Liability of Purchasers, Purchaser Agents and Administrative Agent	61
SECTION 11.3	Authorization and Action of each Purchaser Agent	61
SECTION 11.4	Authorization and Action of Administrative Agent	62
SECTION 11.5	Delegation of Duties of each Purchaser Agent	62
SECTION 11.6	Delegation of Duties of Administrative Agent	62
SECTION 11.7	Successor Agent	62
SECTION 11.8	Indemnification	62
SECTION 11.9	Reliance, etc.	63
SECTION 11.10	Purchasers and Affiliates	63
SECTION 11.11	Sharing of Recoveries	63
SECTION 11.12	Non-Reliance on Administrative Agent, Purchaser Agents and Other Purchasers	63
ARTICLE XII	INDEMNIFICATION	64
SECTION 12.1	Indemnities by Seller	64
SECTION 12.2	Indemnity by Servicer	67
ARTICLE XIII	MISCELLANEOUS	68
SECTION 13.1	Amendments, Etc.	68
SECTION 13.2	Notices, Etc.	69
SECTION 13.3	Successors and Assigns; Participants; Assignments	69
SECTION 13.4	No Waiver; Remedies	71
SECTION 13.5	Binding Effect; Survival	72
SECTION 13.6	Costs, Expenses and Taxes	72
SECTION 13.7	No Proceedings	73
SECTION 13.8	Confidentiality	73
SECTION 13.9	Captions and Cross References	75
SECTION 13.10	Integration	75
SECTION 13.11	Governing Law	75
SECTION 13.12	Waiver of Jury Trial	76
SECTION 13.13	Consent to Jurisdiction; Waiver of Immunities	76



	ii

TABLE OF CONTENTS

(continued)

Page



SECTION 13.14	Execution in Counterparts	76
SECTION 13.15	No Recourse Against Other Parties	76
SECTION 13.16	Pledge to a Federal Reserve Bank	77
SECTION 13.17	Pledge to a Collateral Trustee	77
SECTION 13.18	Severability	77
SECTION 13.19	No Party Deemed Drafter	77
SECTION 13.20	PATRIOT Act	77
SECTION 13.21	Acknowledgement and Consent to Bail-In if EEA Financial Institutions	77
SECTION 13.22	Amendment and Restatement	78



	iii

APPENDIX A Definitions

SCHEDULE I Payment Instructions

SCHEDULE II Eligible Account Debtor Jurisdictions

SCHEDULE 13.2 Addresses for Notices

EXHIBIT A Credit and Collection Policy

EXHIBIT B Collection Accounts; Lockboxes; Originator Specified Accounts; Concentration Account

EXHIBIT C Purchaser Groups

EXHIBIT D Form of Loan Documents

EXHIBIT E Form of Notice of Purchase

EXHIBIT F Form of Notice of Payment

EXHIBIT 3.1(a) Form of Information Package



	iv

AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT

This AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT, dated as of July 18, 2017 (this “ Agreement ”), is among CHS INC., a Minnesota corporation (“ CHS ”), individually and as initial Servicer, COFINA FUNDING, LLC, a Delaware limited liability company (“ Seller ”), the various CONDUIT PURCHASERS, COMMITTED PURCHASERS and PURCHASER AGENTS from time to time party hereto, and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH (“ BTMU ”), as administrative agent on behalf of the Affected Parties (in such capacity, together with its successors and assigns in such capacity, the “ Administrative Agent ”).

B A C K G R O U N D :

1. Originators have, and expect to have, Receivables and Loans which Originators intend to absolutely and irrevocably sell or contribute, as applicable, to Seller pursuant to the Sale Agreement.

2. Seller is a special purpose, bankruptcy-remote, limited liability company and indirect wholly-owned subsidiary of CHS.

3. Seller, in turn, intends to sell to Administrative Agent, on behalf of Purchasers, all of its right, title and interest in, to and under the Pool Assets and certain other related assets and proceeds of the foregoing which Seller is acquiring from Originators.

4. Seller has requested that Administrative Agent on behalf of Purchasers, and Administrative Agent on behalf of Purchasers has agreed, subject to the terms and conditions contained in this Agreement, to purchase such Pool Assets and certain other related assets, referred to herein as the Asset Portfolio, from Seller from time to time during the term of this Agreement.

5. Seller, Purchasers, Purchaser Agents and Administrative Agent also desire that, subject to the terms and conditions of this Agreement, certain of the daily Collections in respect of the Asset Portfolio be reinvested in Pool Assets, which Reinvestment shall constitute part of the Asset Portfolio.

6. Seller, Purchasers, Purchaser Agents and Administrative Agent also desire that, pursuant to the terms hereof, CHS be appointed, and act, as the initial Servicer of the Pool Assets.

7. Seller, Purchasers, Purchaser Agents and Administrative Agent also desire that Performance Guarantor guarantee the obligations of the Originators and Servicer under the Transaction Documents in accordance with the terms of the Performance Guaranty.

8. BTMU has been requested, and is willing, to act as Administrative Agent.

9. Each of the Purchaser Agents has been requested by the Purchasers in its Purchaser Group, and is willing, to act as Purchaser Agent for such Purchasers.

10. The parties hereto are party to that certain Receivables Financing Agreement, dated as of July 22, 2016 (the “ Original Agreement ”) and, subject to Section 13.22 , wish to amend and restate the Original Agreement in its entirety in the form set out herein.

NOW, THEREFORE , in consideration of the premises and the mutual agreements herein contained, the parties hereto agree as follows:

Capitalized terms used and not otherwise defined in this Agreement are used as defined in (or by reference in) Appendix A , and the other interpretive provisions set out in Appendix A shall be applied in the interpretation of this Agreement.

ARTICLE I
PURCHASES AND REINVESTMENTS

SECTION 1.1 Purchases; Limits on Purchasers’ Obligations .

(a) Upon the terms and subject to the conditions of this Agreement, from time to time prior to the Purchase Termination Date, Seller may request that Administrative Agent, on behalf of Conduit Purchasers or, if any Conduit Purchaser is unable or unwilling to make a purchase, the related Committed Purchaser in such Conduit Purchaser’s Purchaser Group, purchase from Seller the Pool Assets and Related Assets from time to time (each, a “ Purchase ”) and Administrative Agent, on behalf of such Purchasers, shall make such Purchase subject to the terms and conditions of this Agreement. The purchase price (the “ Purchase Price ”) for each Purchase shall comprise both an initial cash payment for such Purchase as determined in Section 1.2 (the “ Cash Purchase Price ”) and an amount (the “ Deferred Purchase Price ”) equal to the excess of (x) the aggregate Market Value of the Pool Assets and Related Assets that will be acquired by the Administrative Agent, on behalf of the Purchasers, in connection with such Purchase (as determined by the Servicer at the time of such Purchase, and reduced by anticipated Servicing Fee and Custodian fees), over (y) the Cash Purchase Price for such Purchase. Notwithstanding any other provision of this Agreement, under no circumstances shall any Purchase occur if, after giving effect to such Purchase, (i) the Total Investment would exceed the Purchasers’ Total Commitment, (ii) the Purchaser Group Investment of any Purchaser Group would exceed its Purchaser Group Commitment or (iii) the Total Investment would exceed the sum of the Receivables Investment Base and the Loan Investment Base, in each case, at such time. Each Purchase made pursuant to this Section 1.1 shall be in an amount at least equal to $5,000,000 and, in each case, in integral multiples of $100,000 in excess thereof. Each Committed Purchaser hereby agrees, on the terms and subject to the conditions hereof, to make Purchases deemed to be so requested by Seller under this Section 1.1 if the Conduit Purchaser in such Committed Purchaser’s Purchaser Group is unable or unwilling to make such Purchase, so long as after giving effect to such Purchase (and any other Purchase to be made on such date), the conditions set forth in clauses (i) through (iii) above are satisfied. At no time shall a Conduit Purchaser that is not a Committed Purchaser have any obligation or commitment to make any Purchase.

SECTION 1.2 Purchase Procedures; Assignment of Seller’s Interests .

(a) Notice of Purchase . Except as set forth in Section 1.3 , each Purchase and the payment of the related Cash Purchase Price hereunder shall be made pursuant to a Notice of Purchase delivered by Seller and received by Administrative Agent and each Purchaser Agent not later than 11:00 a.m. (New York City time) on the second (2nd) Business Day preceding the date of such proposed Purchase. Each such Notice of Purchase shall specify (A) the requested Cash Purchase Price for such proposed Purchase (which shall be in an amount at least equal to $5,000,000 and, in each case, in integral multiples of $100,000 in excess thereof), (B) the date of such proposed Purchase (which shall be a Business Day), (C) the amount of such proposed Purchase to be allocated to each Purchaser Group in accordance with each Purchaser Group’s Ratable Share, and (D) a pro forma calculation of the Asset Portfolio after giving effect to such Purchase and any other Purchase proposed to be made on such day; provided , however , that Seller shall not request, and the Purchasers shall not be required to fund, more than six (6) Purchases per calendar month (for the avoidance of doubt, this shall not, however, restrain the making of Reinvestments of Collections in accordance with the terms and conditions of this Agreement in any calendar month). If any Conduit Purchaser is willing and able, in its sole discretion, to make its Ratable Share of a Purchase requested of it pursuant to this Section 1.2(a) subject to the terms and conditions hereof, such Conduit Purchaser shall make such Purchase by transferring such amount in accordance with clause (b) below on the requested date of Purchase. If any Conduit Purchaser is unwilling or unable for any reason to make its Ratable Share of such Purchase, subject to the terms and conditions hereof, the Committed Purchaser in such Conduit Purchaser’s Purchaser Group, subject to the terms and conditions hereof, shall make its Ratable Share of such Purchase by transferring such amount in accordance with clause (b) below.

(b) Payment of Cash Purchase Price . On the date of each Purchase hereunder, the applicable Purchasers, or the related Purchaser Agent, shall, upon satisfaction of the applicable conditions set forth herein (including in Article V ), make available to the Seller their Ratable Share of the Cash Purchase Price with respect to such Purchase in immediately available funds at the following account:

Holder Name:     COFINA FUNDING, LLC
Bank Name:     BMO Harris Bank, N.A.
Address:    320 E. Lake St., Minneapolis, MN 55408

Account Number: -------
ABA Number: 071000288

Reference: Cofina Funding Securitization Program

(Attn: Brent Dickson)

or such other account as designated from time to time by Seller in a written notice to Administrative Agent and each Purchaser Agent. Such Cash Purchase Price shall also be deemed to be paid for Pool Assets and Related Assets by the amounts of any Collections applied as a Reinvestment in accordance with each Purchaser Group’s Ratable Share.

(c) Sale and Assignment of Asset Portfolio . Seller hereby absolutely and irrevocably sells, assigns and transfers to Administrative Agent (on behalf of Purchasers), ratably, according to each Purchaser Group’s Purchaser Group Investment, without any formal or other instrument of assignment (other than this Agreement), upon the payment of the Cash Purchase Price and the agreement to pay the Deferred Purchase Price in accordance with the terms of this Agreement, as applicable, effective on and as of the date of each Purchase and Reinvestment hereunder, all of its right, title and interest in, to and under all Pool Assets and Related Assets and all proceeds of any of the foregoing, whether currently owned or existing or thereafter arising, acquired or originated, or in which Seller now or hereafter has any rights, and wherever so located (the assets so assigned to include not only the Pool Assets and Related Assets existing as of the date of such Purchase but also all future Pool Assets and the Related Assets acquired by Seller from time to time as provided in Section 1.3 ). Administrative Agent’s (on behalf of the Purchasers) right, title and interest in, to and under all such assets is herein called the “ Asset Portfolio ”.

(d) Characterization as a Purchase and Sale; Recharacterization . It is the intention of the parties to this Agreement that the conveyance of Seller’s right, title and interest in, to and under the Asset Portfolio to Administrative Agent (on behalf of Purchasers) pursuant to this Agreement shall constitute a purchase and sale and not a pledge, and such purchase and sale of the Asset Portfolio to Administrative Agent (on behalf of Purchasers) hereunder shall be treated as a sale for all purposes other than U.S. federal, state and local income and franchise tax purposes. The provisions of this Agreement and all related Transaction Documents shall be construed to further these intentions of the parties. If, notwithstanding the foregoing, the conveyance of the Asset Portfolio to Administrative Agent (on behalf of Purchasers) is characterized by any Governmental Authority, bankruptcy trustee or any other Person as a pledge, the parties intend that Seller shall be deemed hereunder to have granted, and Seller does hereby grant, to Administrative Agent (on behalf of the Affected Parties) a security interest to secure Seller’s obligations hereunder in the Asset Portfolio as provided in Section 9.1 . Each of the parties hereto hereby acknowledges and intends that no Purchase hereunder shall constitute, or be deemed to constitute, a Security under U.S. securities laws or within the meaning of the UCC. The provisions of this Agreement and all related Transaction Documents shall be construed to further these intentions of the parties hereto.

(e) Tax Treatment . It is the intention of the parties to this Agreement that for U.S. federal, state and local income and franchise tax purposes, each Purchase will be treated as a loan from the applicable Purchaser to Seller (it being understood that all payments to the Purchasers, in their capacity as such, representing Yield, fees and other amounts accrued under this Agreement or the other Transaction Documents shall be deemed to constitute interest payments).

(f) Purchasers’ Limitation on Payments . Notwithstanding any provision contained in this Agreement or any other Transaction Document to the contrary, none of the Purchasers, Purchaser Agents or Administrative Agent shall, and none of them shall be obligated (whether on behalf of a Purchaser or otherwise) to, pay any amount to Seller as a

Reinvestment under Section 1.3 or in respect of any portion of the Aggregate DPP, except to the extent, and only to the extent, that Collections are available for distribution to Seller for such purpose in accordance with this Agreement. In addition, notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document, the obligations of any Conduit Purchaser under this Agreement and all other Transaction Documents shall be payable by such Conduit Purchaser solely to the extent of funds received from Seller in accordance herewith or from any party to any Transaction Document in accordance with the terms thereof in excess of funds necessary to pay such Person’s matured and maturing Commercial Paper Notes or other senior indebtedness when due. Any amount which Administrative Agent, a Purchaser Agent or a Purchaser is not obligated to pay pursuant to the operation of the two preceding sentences shall not constitute a claim (as defined in § 101 of the Bankruptcy Code) against, or corporate obligation of, any Purchaser Agent, any Purchaser or Administrative Agent, as applicable, for any such insufficiency unless and until such amount becomes available for distribution to Seller pursuant to the terms hereof.

(g) Obligations Not Assumed . The foregoing sale, assignment and transfer does not constitute, and is not intended to result in, the creation or an assumption by Administrative Agent, any Purchaser Agent, any Purchaser or any other Affected Party of any obligation or liability of the Seller, any Originator, the Servicer or any other Person under or in connection with all, or any portion of, the Asset Portfolio (including the Pool Assets and Related Assets), all of which shall remain the obligations and liabilities of the Seller, the Originators, the Servicer and such other Persons, as applicable.

(h) Obligations . Each Committed Purchaser’s obligations hereunder shall be several, such that the failure of any Committed Purchaser to make a payment in connection with any Purchase hereunder shall not relieve any other Committed Purchaser of its obligations hereunder to make payment for any Purchase.

(i) Aggregate DPP . The aggregate Deferred Purchase Price for all Purchases and Reinvestments hereunder at any time shall be referred to herein as the “ Aggregate DPP ”. In accordance with the terms of this Agreement, the Servicer shall, on behalf of the Administrative Agent and each Purchaser, pay to the Seller the Aggregate DPP from time to time (i) prior to the Final Payout Date, when and to the extent funds are available therefor pursuant to Sections 1.3 and 3.1 and (ii) after the Final Payout Date, on each Business Day from Collections received to the extent such Collections exceed the accrued and unpaid Servicing Fee and Custodian fees, in each case without further set-off or counterclaim. Any payment of any amount of Aggregate DPP shall be deemed to be made by each Purchaser Group according to its Ratable Share of such amount.

(j) Deemed Exchange . Notwithstanding the otherwise applicable conditions precedent to payments in respect of the Asset Portfolio hereunder, upon the Effective Date, each Purchaser shall be deemed to have delivered and released its undivided interests with regard to the Original Asset Interest as of the Effective Date in a contemporaneous exchange for the acquisition of the Asset Portfolio in an amount equal to the aggregate outstanding

Original Asset Interest, and each Purchaser’s Asset Portfolio under this Agreement as of the Effective Date shall equal such Purchaser’s aggregate outstanding Original Asset Interest immediately prior to the Effective Date. Such deemed exchange under the Original Agreement and the initial Purchase hereunder shall constitute a replacement of the aggregate outstanding Original Asset Interest by way of such initial Purchase hereunder.

(k) Each Purchaser hereunder acknowledges and agrees that it is a “qualified purchaser” (as defined in the Investment Company Act).

SECTION 1.3 Reinvestments of Certain Collections; Payment of Remaining Collections; Asset Portfolio .

(a) On the close of business on each Business Day during the period from the Effective Date to the Final Payout Date, Servicer shall, on behalf of Administrative Agent (for the benefit of the Affected Parties), out of all Collections from Pool Assets received since the end of the immediately preceding Business Day:

(i) set aside and hold in trust for Administrative Agent on behalf of the Affected Parties, an amount (based on information provided by Administrative Agent pursuant to Article II ) equal to the sum of (a) the estimated amount of Yield accrued in respect of each Rate Tranche, (b) all other amounts due to Administrative Agent, Purchaser Agents, Purchasers or any other Affected Party hereunder (including Deemed Collections, Repurchase Payments and costs and expenses described in Section 13.6 ), (c) all Custodian fees and expenses due to the Custodian under the Custodian Agreement, (d) the Servicing Fee (in each case, accrued through such day and not so previously set aside or anticipated to accrue through the end of the then current Settlement Period, as determined by Servicer based upon, among other relevant information, the then outstanding Total Investment and the Yield Rates then in effect) and (e) any other obligations of Seller hereunder and under the other Transaction Documents accrued through such day and not previously set aside, or then due and owing or otherwise outstanding (other than any portion of the Total Investment that is not otherwise payable on the following Settlement Date); and

(ii) subject to Sections 3.1(c)(iv) and 3.2(c) , set aside such Collections as are not required to be set aside and held in trust pursuant to clause (i) above (including any such Collections not set aside but commingled), to pay Seller for additional Pool Assets and Related Assets with respect to such Pool Assets (each such purchase being a “ Reinvestment ”) and, to the extent of any amounts remaining after such Reinvestments, to be applied, and retained by Seller, as payment of the Aggregate DPP on existing Pool Assets and Related Assets; provided , that, (A) if (I) the Total Investment would exceed the sum of the Receivables Investment Base and the Loan Investment Base, (II) any Purchaser Group’s Purchaser Group Investment would exceed the related Purchaser Group Commitment or (III) the Total Investment would exceed the Purchasers’ Total Commitment (in each case, at such time and after giving effect to such Reinvestment), then Servicer (for the benefit of the Purchasers) shall only make Reinvestments or apply such remaining amounts as

Aggregate DPP, as applicable, after first setting aside and holding in trust for the benefit of Administrative Agent on behalf of the Affected Parties in accordance with Section 3.4 , a portion of such Collections which, together with other Collections previously set aside for such purpose and then so held, shall equal the amount necessary to reduce (i) the Total Investment to an amount equal to or less than the Purchasers’ Total Commitment, (ii) each Purchaser Group’s Purchaser Group Investment to an amount equal to or less than the related Purchaser Group Commitment and (iii) the Total Investment to an amount equal to or less than the sum of the Receivables Investment Base and the Loan Investment Base, in each case, at such time (any remaining Collections after giving effect to this proviso shall then be applied as described above in this Section 1.3(a)(ii) ); and (B) if the conditions precedent to Reinvestment in clause (a) , (b) or (d) of Section 5.3 are not satisfied or no Reinvestments are to be made in accordance with Section 3.2(c) , then Servicer shall not apply any of such remaining Collections to a Reinvestment or as payment of the Aggregate DPP pursuant to this clause (ii) .

(b) Unreinvested Collections . Subject to Sections 1.3(a)(ii) and 3.1(c)(iv) , Servicer shall set aside and hold in trust for the benefit of Administrative Agent on behalf of the applicable Affected Parties, all Collections which, pursuant to clause (ii) of Section 1.3(a) , may not be reinvested in the Pool Assets and Related Assets or applied as payment of the Aggregate DPP. If, prior to the date when such Collections are required to be paid to the applicable Purchaser Agents for the benefit of the applicable Affected Parties, pursuant to Section 1.3(c) , the amount of Collections so set aside exceeds the amount, if any, necessary to reduce (i) the Total Investment to an amount equal to or less than the Purchasers’ Total Commitment, (ii) each Purchaser Group’s Purchaser Group Investment to an amount equal to or less than the related Purchaser Group Commitment and (iii) Total Investment to an amount equal to or less than the sum of the Receivables Investment Base and the Loan Investment Base (in each case, at such time), and the conditions precedent to Reinvestment set forth in clauses (a) , (b) and (d) of Section 5.3 are satisfied and Reinvestments are permitted in accordance with Section 3.2(c) , then Servicer shall apply such Collections (or, if less, a portion of such Collections equal to the amount of such excess) in accordance with Section 1.3(a)(ii) to the making of a Reinvestment or apply any remaining amounts as payment of the Aggregate DPP, as applicable.

(i) Servicer shall pay all amounts of Collections set aside and held in trust pursuant to clause (i) of Section 1.3(a) in respect of Yield on a Rate Tranche not funded by the issuance of Commercial Paper Notes (including under a Liquidity Agreement or an Enhancement Agreement) to the applicable Purchaser Agent on the last day of the then current Yield Period for such Rate Tranche based on information provided by such Purchaser Agent pursuant to Article II , or during the Liquidation Period or after the occurrence of an Event of Termination that has not been waived in accordance with this Agreement, on such earlier date or dates as any

such Purchaser Agent shall require on at least two (2) Business Days’ prior written notice to Servicer.

(ii) Servicer shall pay all amounts of Collections set aside and held in trust pursuant to clause (i) of Section 1.3(a) above and not applied pursuant to clause (i) of this Section 1.3(c) to the applicable Purchaser Agent on the Settlement Date for each Settlement Period, as provided in Section 3.1 , or during the Liquidation Period or after the occurrence of an Event of Termination that has not been waived in accordance with this Agreement, on such earlier date or dates as any such Purchaser Agent shall require on at least two (2) Business Days’ prior written notice to Servicer.

(iii) Servicer shall pay all amounts set aside and held in trust pursuant to Section 1.3(b) above (and not otherwise applied pursuant to the last sentence of such Section) to the applicable Purchaser Agent for the account of the Affected Parties (A) on the last day of the then current Yield Period for any Rate Tranche not funded by the issuance of Commercial Paper Notes in an amount not exceeding each Committed Purchaser’s Tranche Investment of such Rate Tranche (based on information provided by the applicable Purchaser Agent pursuant to Article II ), and (B) on the Settlement Date for each Settlement Period, as provided in Section 3.1 , in an amount not exceeding each Conduit Purchaser’s Tranche Investment of the Rate Tranche funded by Commercial Paper Notes (based on information provided by the applicable Purchaser Agent pursuant to Article II ), or, in the case of clause (A) or clause (B) above, during the Liquidation Period or after the occurrence of an Event of Termination that has not been waived in accordance with this Agreement, on such earlier date or dates as any Purchaser Agent shall require on at least two (2) Business Days’ prior written notice to Servicer.

(d) Reduction of Total Investment . Neither the Total Investment nor any Purchaser Group’s Purchaser Group Investment, shall be reduced by the amount of Collections set aside pursuant to this Section unless and until such Collections are actually received by the applicable Purchaser Agent for application hereunder to reduce Total Investment and the applicable Purchaser Group’s Purchaser Group Investment in accordance with the terms hereof.

ARTICLE II
COMPUTATIONAL RULES

SECTION 2.1 Selection of Rate Tranches . Subject to the requirements set forth in this Article II , each Purchaser Agent shall from time to time, only for purposes of computing Yield with respect to each Purchaser in its Purchaser Group, account for the Asset Portfolio in terms of one or more Rate Tranches, and the applicable Yield Rate may be different for each Rate Tranche. Each Purchaser Group’s Purchaser Group Investment shall be allocated to each Rate Tranche by the related Purchaser Agent to reflect the funding sources for each portion of the Asset Portfolio, so that:

(a) there will be one or more Rate Tranches, selected by each Purchaser Agent, reflecting the portion, if any, of the Asset Portfolio funded or maintained by its related Committed Purchaser other than through the issuance of Commercial Paper Notes (including by outstanding Liquidity Advances or by funding under an Enhancement Agreement); and

(b) there will be a Rate Tranche, selected by each Purchaser Agent, equal to the excess of such Purchaser Group’s aggregate Purchaser Group Investment over the aggregate amounts allocated at such time pursuant to clause (a) above, which Rate Tranche shall reflect the portion of the Asset Portfolio funded or maintained by Commercial Paper Notes.

SECTION 2.2 Computation of each Purchaser Group Investment and each Purchaser’s Tranche Investment . In making any determination of any Total Investment, any Purchaser Group’s Purchaser Group Investment and any Purchaser’s Tranche Investment, the following rules shall apply:

(a) each Purchaser Group’s Purchaser Group Investment shall not be considered reduced by any allocation, setting aside or distribution of any portion of Collections unless such Collections shall have been actually received by the applicable Purchaser Agent in accordance with the terms hereof;

(b) each Purchaser Group’s Purchaser Group Investment (or any other amounts payable under any Transaction Document) shall not be considered reduced (or paid) by any distribution of any portion of Collections or other payments, as applicable, if at any time such distribution or payment is rescinded or must otherwise be returned for any reason; and

(c) if there is any reduction in any Purchaser Group’s Purchaser Group Investment, there shall be a corresponding reduction (in the aggregate) in such Purchaser’s Tranche Investment with respect to one or more Rate Tranches selected by the related Purchaser Agent in its sole discretion (subject to Section 1.3(c)(iii) ).

SECTION 2.3 Computation of Account Debtor Concentration Limit, Account Debtor Concentration Overage Amount, Concentration Overage Amount (Loans) and Unpaid Balance . In the case of any Account Debtor which is an Affiliate of any other Account Debtor, the Account Debtor Concentration Limit, the Account Debtor Concentration Overage Amount and the aggregate Unpaid Balance of Pool Receivables of such Account Debtors shall be calculated as if such Account Debtors were one Account Debtor. In the case of any Obligor which is an Affiliate of any other Obligor, the Concentration Overage Amount (Loans) and the aggregate Unpaid Balance of Pool Loans of such Obligors shall be calculated as if such Obligors were one Obligor.

SECTION 2.4 Computation of Yield . In making any determination of Yield, the following rules shall apply:

(a) each Purchaser Agent shall determine the Yield accruing with respect to each Rate Tranche for the Purchasers in its Purchaser Group, based on the Yield Period therefor determined in accordance with Section 2.1 and the other terms hereof (or, in the case of the

Rate Tranche funded by Commercial Paper Notes, each Settlement Period), in accordance with the definition of Yield;

(b) no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by Applicable Law; and

(c) Yield for any Rate Tranche shall not be considered paid by any distribution or other payment if at any time such distribution or payment is rescinded or must otherwise be returned for any reason.

SECTION 2.5 Estimates of Yield Rate, Fees, Etc . It is understood and agreed that (a) the Yield Rate for any Rate Tranche may change from one applicable Yield Period or Settlement Period to the next, and the applicable Bank Rate, Base Rate or CP Rate used to calculate the applicable Yield Rate may, to the extent set forth in the definitions thereof contained in Appendix A , change from time to time and at any time during an applicable Yield Period or Settlement Period, (b) any rate information provided by any Purchaser Agent to Seller or Servicer shall be based upon such Purchaser Agent’s good faith estimate, (c) the amount of Yield actually accrued with respect to a Rate Tranche during any Yield Period (or, in the case of the Rate Tranche funded by Commercial Paper Notes, any Settlement Period) may exceed, or be less than, the amount set aside with respect thereto by Servicer, and (d) the amount of fees and amounts provided for in Section 4.3 payable to any Affected Party accrued hereunder with respect to any Settlement Period may exceed, or be less than, the amount set aside with respect thereto by Servicer. Failure to set aside any amount so accrued shall not relieve Servicer of its obligation to remit Collections to the applicable Purchaser Agent or otherwise to any other Person with respect to such accrued amount, as and to the extent provided in Section 3.1 .

ARTICLE III
SETTLEMENTS

SECTION 3.1 Settlement Procedures .

The parties hereto will take the following actions with respect to each Settlement Period:

(a) Information Package . On the twentieth (20 ^th ) day of each calendar month (or if such day is not a Business Day, the next Business Day) following the Cut-Off Date for such Settlement Period (each a “ Reporting Date ” for and related to the Settlement Period ending immediately prior to such date), Servicer shall deliver to Administrative Agent and each Purchaser Agent an e-mail attaching an Excel file and a file in .pdf or similar format signed by Servicer containing the information described in Exhibit 3.1(a) , including the information calculated by Servicer pursuant to this Section 3.1 (each, an “ Information Package ”) for the related Settlement Period; provided that Administrative Agent may modify, in any reasonable respect, the information required to be provided by Servicer in, or the form of, the Information Package upon reasonable prior notice to Servicer; provided further that during the Liquidation Period or after the occurrence of an Event of Termination that has not been waived in accordance with this Agreement, Administrative Agent or any

Purchaser Agent may request, in its sole discretion, Servicer to, and Servicer agrees to, deliver any information related to the Asset Portfolio or the transactions contemplated hereby as Administrative Agent or any Purchaser Agent shall request (including a calculation of Required Reserves and each component thereof) on each Business Day.

(b) Yield; Other Amounts Due . On or before the second (2 ^nd ) Business Day prior to the Reporting Date for each Settlement Period, each Purchaser Agent shall notify Servicer of (i) the amount of Yield accrued in respect of each related Rate Tranche for the Purchasers in its Purchaser Group during such Settlement Period and (ii) all fees and other amounts accrued and payable or to be paid by Seller under this Agreement and the other Transaction Documents on the related Settlement Date (other than amounts described in clause (c) below) to such Purchaser Agent or any Purchaser in, or Affected Party related to, its Purchaser Group. Seller (or Servicer on its behalf), on the Settlement Date for such Settlement Period, or when otherwise required hereunder prior to each such date, shall pay such Yield and all fees and other amounts due in respect of such Settlement Period to the applicable Purchaser Agent or Affected Party out of amounts set aside pursuant to Section 1.3 for such purpose and, to the extent such amounts were not so set aside, Seller hereby agrees to pay such amounts (notwithstanding any limitation on recourse or other liability limitation contained herein to pay such amounts) to the applicable Purchaser Agent or Affected Party.

(i) Before each Reporting Date, Servicer shall compute, as of the most recent Cut-Off Date and based upon the assumption in the next sentence, (A) the Total Investment, the Purchaser Group Investment of each Purchaser Group, the Required Reserves, the Required Loan Reserves, the Required Receivable Reserves, the Loan Investment Base, the Receivables Investment Base, the Net Loan Pool Balance, the Net Receivables Pool Balance, the Net Pool Balance and each component of each of the foregoing, (B) the amount of the reduction or increase (if any) in each of the Required Reserves, the Required Receivable Reserves, the Required Loan Reserves, the Net Receivables Pool Balance, the Net Loan Pool Balance, the Net Pool Balance, the Purchaser Group Investment of each Purchaser Group, the Loan Investment Base, the Receivables Investment Base and the Total Investment since the immediately preceding Cut-Off Date, (C) the excess (if any) of the aggregate Total Investment over the sum of the Receivables Investment Base and the Loan Investment Base, (D) the excess (if any) of the Total Investment, over the Purchasers’ Total Commitment, (E) the excess (if any) of the Purchaser Group Investment of each Purchaser Group, over the Purchaser Group Commitment of each such Purchaser Group and (F) each of the components of any of the foregoing. Such calculations shall be based upon the assumption that Collections set aside pursuant to Section 1.3(b) (and not otherwise applied in accordance with such Section) will be paid to the applicable Purchaser Agent for the benefit of the applicable Purchasers in its Purchaser Group in accordance with the related Purchaser Group’s Ratable Share of such Collections on the Settlement Date for the Settlement Period related to such Reporting Date.

(ii) If, according to the computations made pursuant to clause (i) of this Section 3.1(c) , the Total Investment at such time shall exceed the sum of the Receivables Investment Base and the Loan Investment Base, the Total Investment at such time shall exceed the Purchasers’ Total Commitment or the Purchaser Group Investment of any Purchaser Group shall exceed the Purchaser Group Commitment of such Purchaser Group, Servicer shall, on behalf of Seller, (i) promptly notify Administrative Agent and each Purchaser Agent thereof and (ii) immediately pay to the applicable Purchaser Agents for the benefit of the applicable Purchasers the amount necessary to reduce (A) the Total Investment to no more than the Purchasers’ Total Commitment, (B) the aggregate Total Investment to no more than the sum of the Receivables Investment Base and the Loan Investment Base at such time and (C) the Purchaser Group Investment of each Purchaser Group to no more than the Purchaser Group Commitment of each such Purchaser Group, as applicable.

(iii) The payment described in clause (ii) of this Section 3.1(c) shall be made out of amounts set aside pursuant to Section 1.3 for such purpose and, to the extent such amounts were not so set aside, Seller hereby agrees to pay such amounts (notwithstanding any limitation on recourse or other liability limitation contained herein to pay such amounts) to Servicer during the relevant Settlement Period. Notwithstanding anything to the contrary set forth above, on any date on or prior to the Final Payout Date, if the Total Investment exceeds the sum of the Loan Investment Base and the Receivables Investment Base at such time, Servicer shall immediately pay to each Purchaser Agent (ratably, based on the Purchaser Group Investment of such Purchaser Agent’s Purchaser Group at such time) an amount equal to such excess.

(iv) In addition to the payments described in clause (ii) of this Section 3.1(c) , during the Liquidation Period or after the occurrence of an Event of Termination that has not been waived in accordance with this Agreement, Servicer shall pay to each Purchaser Agent the Ratable Share of its Purchaser Group of all other Collections on all Pool Assets, whether or not required to be set aside pursuant to Section 1.3 on the dates specified pursuant to Section 1.3(c) .

(d) Order of Application . Servicer (for the benefit of the Affected Parties) shall distribute the funds required to be distributed pursuant to this Section 3.1 with respect to any Settlement Period, in the following order of priority:

(i) to each Purchaser Agent ratably (based on the aggregate accrued and unpaid Yield) Yield accrued and unpaid on all Rate Tranches for the Purchasers in its Purchaser Group howsoever funded or maintained during the related Settlement Period;

(ii) to each Purchaser Agent ratably (based on the aggregate accrued and unpaid Unused Fee) the accrued and unpaid Unused Fee for its Purchaser Group and to the accrued and unpaid Program Fee for its Purchase Group;

(iii) to the Servicer all accrued and unpaid Servicing Fee (if Servicer is not CHS or an Affiliate thereof);

(iv) to the Custodian, any fees then due and payable to the Custodian pursuant to that certain Schedule of Fees for Services as Custodian for Cofina Funding, LLC “Seller” The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, “Administrative Agent” Secured Facility, dated as of July 21, 2016;

(v) to Administrative Agent and each Purchaser Agent ratably (based on the aggregate accrued and unpaid amounts owing to such Person) accrued and unpaid amounts owed to Administrative Agent and each Purchaser Agent hereunder (including all fees payable to Administrative Agent, Purchaser Agents and Purchasers pursuant to the Fee Letter other than fees paid pursuant to clause (ii) above);

(vi) to each Purchaser Agent ratably (based on the related Purchaser Group Investment), the reduction of Total Investment, to the extent such reduction is required under Section 3.1(c) or 3.2(c) or, during the Liquidation Period or after the occurrence of an Event of Termination that has not been waived in accordance with this Agreement, with respect to each Purchaser Group, as set forth on a Notice of Payment to be delivered to the Administrative Agent and each Purchaser Agent on the applicable Settlement Date, first , to pay any outstanding Commercial Paper (as defined in the UCC) funding or maintaining the related Purchaser Group Investment and second , to ratably reduce the remainder of the related Purchaser Group Investment;

(vii) prior to the Liquidation Period, and as long as no Event of Termination has occurred and is continuing, to the Seller (A) first, as a Reinvestment to the extent of the Cash Purchase Price of additional Pool Assets and Related Assets sold by the Seller since the previous Settlement Date, and (B) second, to the Aggregate DPP;

(viii) to (A) the Custodian, any fees and expenses then due and payable to the Custodian pursuant to the Custodian Agreement and not paid pursuant to Section 3.1(d)(iv) above and (B) each Affected Party (or the related Purchaser Agent on their behalf) ratably (based on Aggregate Unpaids) Aggregate Unpaids owed to such Affected Parties; and

(ix) to the Servicer all accrued and unpaid Servicing Fee (if Servicer is CHS or an Affiliate thereof).

After the Total Investment, all accrued Yield and all accrued Servicing Fee and Custodian fees have been paid in full, and any other amounts payable by the Seller to the Purchasers or any other Indemnified Party or Affected Person hereunder have been paid in full, all additional Collections with respect to the Asset Portfolio shall be paid to Seller in payment of the Aggregate DPP.

(e) Non-Distribution of Servicing Fee . If Administrative Agent and each Purchaser Agent consent (which consent is granted as of the Closing Date but which consent shall be deemed to have been revoked upon the occurrence of an Event of Termination that has not been waived in accordance with this Agreement), the amounts (if any) set aside by Servicer pursuant to Section 1.3 in respect of the Servicing Fee may be retained by Servicer or any permitted subservicer for its own account. To the extent Servicer sets aside and retains such amounts, no distribution shall be made in respect of such amounts pursuant to clause (d)(iv) or clause (d)(ix) above.

SECTION 3.2 Deemed Collections; Event of Repurchase; Reduction of Total Investment, Etc .

(a) Deemed Collections . If, on any day, the Unpaid Balance of a Pool Asset is reduced (but not cancelled) as a result of any Dilution, Seller shall be deemed to have received on such day a Collection of such Pool Asset in the amount of such reduction. If, on any day, a Pool Asset is canceled (or reduced to zero) as a result of any Dilution, Seller shall be deemed to have received on such day a Collection of such Pool Asset in the amount of the Unpaid Balance (as determined immediately prior to such Dilution) of such Pool Asset. If, on any day, the Unpaid Balance of a Pool Asset is less than the amount included in calculating the Net Pool Balance for purposes of any Information Package (for any reason other than such Pool Asset becoming a Defaulted Loan or Defaulted Receivable, as applicable, or due to the application of Collections received with respect to such Pool Asset), Seller shall be deemed to have received a Collection of such Pool Asset in the amount of such difference. Any amount deemed to have been received under this Section 3.2(a) shall constitute a “ Deemed Collection ”. In the event of any such Deemed Collection, Seller shall, if (i) the Liquidation Period has commenced, or (ii) the aggregate Total Investment at such time exceeds the sum of the Loan Investment Base and Receivables Investment Base at such time after giving effect to such Deemed Collection, deposit an amount equal to such Deemed Collection into the Concentration Account by no later than the fourth (4 ^th ) Business Day after Seller or Servicer obtains knowledge or notice thereof (or during the Liquidation Period, within two (2) Business Days from the event giving rise to such Deemed Collection) for application as provided in this Agreement.

(b) Repurchase Event . If any of the following events (each, an “ Event of Repurchase ”) occurs and is continuing with respect to a Pool Asset:

(i) any representation or warranty by Seller hereunder with respect to such Pool Asset is incorrect either (A) in any material respect or (B) in any manner that adversely affects the value or collectability of such Pool Asset, in each case, when made or deemed made;

(ii) Seller or Servicer fails to perform or observe any other term, covenant or agreement with respect to such Pool Asset set forth in any Transaction Document or any related Receivable Documentation or Loan Documents, as applicable, on its part to be performed or observed and such failure shall or could reasonably be

expected to have an adverse effect on the ability to collect the Unpaid Balance of such Pool Asset on the due date thereof; or

(iii) either (A) Seller or Servicer instructs the related Account Debtor or Obligor to pay any amount with respect to such Pool Asset to an account other than a Lockbox, an Originator Specified Account, a Collection Account or the Concentration Account or (B) the related Account Debtor or Obligor refuses to make any payment to a Lockbox, an Originator Specified Account, a Collection Account or the Concentration Account (unless to the extent such refusal to pay is due to the financial or credit condition of such Account Debtor or Obligor (including the occurrence of an Insolvency Event with respect to such Account Debtor or Obligor)),

then, Seller shall immediately deliver notice thereof to the Administrative Agent and, at the time, in the manner and otherwise as hereinafter set forth, repurchase such Pool Asset at the Administrative Agent’s option and demand; provided , however , that if a “Sale Agreement Event of Repurchase” (as defined in the Sale Agreement) shall have occurred under the Sale Agreement with respect to such Pool Asset, then such event shall also constitute an Event of Repurchase for purposes of this Agreement. The repurchase price for a Pool Asset shall be the amount equal to the Unpaid Balance of such Pool Asset at such time and shall be paid to the Concentration Account in immediately available funds by no later than the second (2 ^nd ) Business Day following demand therefor by the Administrative Agent. Upon the payment in full of the repurchase price with respect to a Pool Asset, such Pool Asset shall hereby be, and be deemed to be, repurchased by Seller from the applicable Purchasers without recourse to or warranty by the Administrative Agent or any Purchaser but free and clear of any lien, encumbrance or other Adverse Claim created by or through the Administrative Agent and each Purchaser. Except as specifically set forth in this clause (b) , the Seller shall not have any right or obligation to repurchase Pool Assets.

(c) Seller’s Optional Reduction of Total Investment . Subject to Sections 1.2(a) and 4.3 , Seller may at any time and from time to time elect to reduce (in whole or in part) Total Investment as follows:

(i) Seller shall give Administrative Agent and each Purchaser Agent a Notice of Payment with respect to such elected reduction (including the amount of such proposed reduction and the proposed date on which such reduction will commence) no later than 11:00 a.m. (New York City time) three (3) Business Days prior to the proposed reduction date;

(ii) on the proposed date of commencement of such reduction and on each day thereafter, Servicer shall refrain from reinvesting Collections pursuant to Section 1.3 until the amount thereof not so reinvested shall equal the desired amount of reduction; and

(iii) Servicer shall hold such Collections in trust for Purchasers, pending payment to the applicable Purchaser Agents, as provided in Section 1.3 ; provided that

(A) the amount of any such reduction shall be not less than $5,000,000 and shall be an integral multiple of $100,000; and

(B) Seller shall use reasonable efforts to choose a reduction amount, and the date of commencement thereof, so that such reduction shall commence and conclude in the same Settlement Period.

(d) No Further Reinvestments . Notwithstanding anything to the contrary set forth herein (including Section 3.1 ), after giving effect to any reduction of the Total Investment under Section 3.2(c) , or otherwise, which reduces the Total Investment to zero, so long as there are no outstanding amounts constituting liabilities or other obligations of Seller, any Originator, Servicer or Performance Guarantor hereunder or under any other Transaction Document owing to any Purchaser, any Purchaser Agent, Administrative Agent, any Indemnified Party or any Affected Party, no further Reinvestments shall be made unless and until a new Purchase is made in accordance with Sections 1.1 and 1.2 and any Collections, so long as no such amounts are outstanding, shall be paid to the Seller as the Aggregate DPP, in accordance with Section 3.1 .

(e) Seller’s Optional Reduction of Purchaser’s Total Commitment . Seller may at any time and from time to time elect to reduce the unused portion of the Purchaser’s Total Commitment by giving the Administrative Agent and each Purchaser Agent a Notice of Payment with respect to such elected reduction (including the amount of such proposed reduction and the proposed date on which such reduction will commence) no later than 11:00 a.m. (New York City time) 30 days prior to the proposed reduction date; provided that the amount of any such reduction shall be not less than $5,000,000 and shall be an integral multiple of $100,000. Any such reduction shall be applied pro rata to the Commitment of each Committed Purchaser.

SECTION 3.3 Payments and Computations, Etc .

(a) Payments . All amounts to be paid to, or deposited by Seller, Servicer, CHS or Performance Guarantor with, Administrative Agent, any Purchaser Agent or any other Person hereunder (other than amounts payable under Section 4.2 ) shall be paid or deposited in accordance with the terms hereof no later than 11:00 a.m. (New York City time) on the day when due in USD in same day funds to the applicable account set forth on Schedule I or to such other account as Administrative Agent or any Purchaser Agent, as applicable, shall designate in writing to Servicer from time to time.

(b) Late Payments . Seller or Servicer, as applicable, shall, out of amounts set aside pursuant to Section 1.3 for such purpose and to the extent permitted by Applicable Law, pay to the applicable Purchaser Agent, for the benefit of the applicable Affected Party, interest on all amounts not paid or deposited by such party on the date when due hereunder at an annual rate equal to 2.0% above the Base Rate, payable on demand; provided that such interest rate shall not at any time exceed the maximum rate permitted by Applicable Law.

(c) Method of Computation . All computations of interest, Yield, any fees payable under Section 4.1 and any other fees payable by Seller to any Purchaser, any Purchaser Agent, Administrative Agent or any other Affected Party in connection with Purchases hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) elapsed (except that calculations with respect to the Prime Rate shall be on the basis of a year of 365 or 366 days, as the case may be).

(d) Payment of Currency and Setoff . All payments by Seller or Servicer to any Affected Party or any other Person shall be made in USD and without set-off or counterclaim. Any of Seller’s or Servicer’s obligations hereunder shall not be satisfied by any tender or recovery of another currency except to the extent such tender or recovery results in receipt of the full amount of USD.

(e) Taxes . (i) Except to the extent required by Applicable Law, any and all payments and deposits required to be made hereunder, under any other Transaction Document or under any instrument delivered hereunder or thereunder to any Affected Party or otherwise hereunder or thereunder by Seller or Servicer shall be made free and clear of, and without withholding or deduction for, any and all present or future Taxes. If Seller or Servicer shall be required by Applicable Law to make any such withholding or deduction, (A) if such Tax is an Indemnified Tax, Seller (or Servicer, on its behalf) shall make an additional payment to such Affected Party, in an amount sufficient so that, after making all required withholdings or deductions (including withholdings or deductions applicable to additional sums payable under this Section 3.3(e) ), such Affected Party receives an amount equal to the sum it would have received had no such withholdings or deductions been made, (B) Seller (or Servicer, on its behalf) shall make such deductions and (C) Seller (or Servicer, on its behalf) shall pay the full amount deducted to the relevant taxation authority or other Governmental Authority in accordance with Applicable Law.

(ii) Seller will indemnify each Affected Party for the full amount of (A) Indemnified Taxes (including any Indemnified Taxes imposed by any jurisdiction on amounts payable under this Section paid by such Affected Party, as the case may be, and any liability (including penalties, interest and expenses) paid or payable by such Affected Party arising therefrom or with respect thereto) and (B) Taxes that arise because a Purchase or the Asset Portfolio is not treated for U.S. federal, state or local income or franchise tax purposes as intended under Section 1.2(e) (such indemnification will include any U.S. federal, state or local income and franchise taxes necessary to make such Affected Party whole on an after-tax basis taking into account the taxability of receipt of payments under the this clause (B) and any reasonable expenses (other than Taxes) arising out of, relating to, or resulting from the foregoing). Any indemnification under this Section 3.3(e)(ii) shall be paid on the next Settlement Date (or during the Liquidation Period or after the occurrence of an Event of Termination that has not been waived in accordance with the terms of this Agreement, within two (2) Business Days) after the date any Affected Party makes written demand therefor, together with a statement of reasons for such demand

and the calculations of such amount. Such calculations, absent manifest error, shall be final and conclusive on all parties.

(iii) Within 30 days after the date of any payment of Taxes withheld by any of Seller or Servicer, as applicable, in respect of any payment to any Affected Party, Seller or Servicer, as applicable, will furnish to Administrative Agent and each Purchaser Agent, the original or a certified copy of a receipt evidencing payment thereof (or other evidence reasonably satisfactory to Administrative Agent).

(iv) Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section shall survive the payment in full of Aggregate Unpaids hereunder.

(v) Any Affected Party that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Transaction Document shall deliver to CHS and Administrative Agent, at the time or times reasonably requested by CHS or Administrative Agent, such properly completed and executed documentation reasonably requested by CHS or Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Affected Party, if reasonably requested by CHS or Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by CHS or Administrative Agent as will enable CHS or Administrative Agent to determine whether or not such Affected Party is subject to backup withholding or information reporting requirements.

(vi) Any Affected Party that is a “United States person” within the meaning of Section 7701(a)(30) of the Code (a “ U.S. Person ”) shall deliver to CHS and the Administrative Agent on or prior to the date on which such Affected Party becomes a Affected Party under this Agreement (and from time to time thereafter upon the reasonable request of CHS or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Affected Party is exempt from U.S. federal backup withholding tax.

(vii) Any Affected Party that is not a U.S. Person (a “ Foreign Affected Party ”) shall, to the extent it is legally entitled to do so, deliver to CHS and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Affected Party becomes an Affected Party under this Agreement (and from time to time thereafter upon the reasonable request of CHS or the Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Affected Party claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Transaction Document, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest”

article of such tax treaty and (y) with respect to any other applicable payments under any Transaction Document, IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed copies of IRS Form W-8ECI;

(3) in the case of a Foreign Affected Party claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate to the effect that such Foreign Affected Party is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “ U.S. Tax Compliance Certificate ”) and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E; or

(4) to the extent a Foreign Affected Party is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Affected Party is a partnership and one or more direct or indirect partners of such Foreign Affected Party are claiming the portfolio interest exemption, such Foreign Affected Party may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner.

(viii) If a payment made to a Purchaser under any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Purchaser were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Purchaser shall deliver to CHS and Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by CHS or Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by CHS or Administrative Agent as may be necessary for CHS and Administrative Agent to comply with their obligations under FATCA and to determine that such Purchaser has complied with such Purchaser’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (viii) , “FATCA” shall include any amendments made to FATCA after the Closing Date.

(ix) Each Purchaser Agent (on behalf of its related Purchasers) agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Seller and the Administrative Agent in writing of its legal inability to do so.

SECTION 3.4 Treatment of Collections and Deemed Collections . Seller shall immediately deliver to Servicer all Deemed Collections and Repurchase Payments, and Servicer shall hold or distribute such Deemed Collections and Repurchase Payments as Yield, accrued Servicing Fee, repayment of Total Investment or as otherwise applicable hereunder to the same extent as if such Collections had actually been received on the date of such delivery to Servicer. So long as Seller or Servicer shall hold any Collections (including Deemed Collections and Repurchase Payments) required to be paid to Servicer, any Purchaser, any Purchaser Agent or Administrative Agent, Seller or Servicer shall hold and apply such Collections in accordance with Section 1.3 and Section 3.2 , as applicable, and shall clearly mark its records to reflect the same. Seller shall promptly enforce all obligations of Originators under the Sale Agreement, including, payment of Deemed Collections (as defined in the Sale Agreement).

ARTICLE IV
FEES AND YIELD PROTECTION

SECTION 4.1 Fees . From the Effective Date until the Final Payout Date, Seller and CHS, jointly and severally, shall pay to Administrative Agent, each Purchaser Agent and each Purchaser, as applicable, all fees specified in the Fee Letter or any other Transaction Document in accordance with the terms of the Fee Letter, such Transaction Document and this Agreement.

SECTION 4.2 Yield Protection .

(a) If any Regulatory Change including any Specified Regulation:

(i) shall subject an Affected Party to any tax, duty or other charge with respect to any Asset Portfolio owned, maintained or funded by it (or its participation in any of the foregoing), or any obligations or right to make Purchases or Reinvestments or to provide funding or maintenance therefor (or its participation in any of the foregoing), or shall change the basis of taxation of payments to the Affected Party or other Indemnified Party of Total Investment or Yield owned by, owed to, funded or maintained in whole or in part by it (or its participation in any of the foregoing) or any other amounts due under this Agreement in respect of the Asset Portfolio owned, maintained or funded by it or its obligations or rights, if any, to make or participate in Purchases or Reinvestments or to provide funding therefor or the maintenance thereof;

(ii) shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of any Affected Party, deposits or obligations with or for the account of any Affected Party or with or for the account of any Affiliate (or entity deemed by the Federal Reserve Board or other Governmental Authority to be an affiliate) of any Affected Party, or credit extended by any Affected Party;

(iii) shall impose any other condition affecting any Asset Portfolio owned, maintained or funded (or participated in) in whole or in part by any Affected Party, or its obligations or rights, if any, to make (or participate in) Purchases or

Reinvestments or to provide (or to participate in) funding therefor or the maintenance thereof;

(iv) shall increase the rate for, or changes the manner in which the Federal Deposit Insurance Corporation (or a successor thereto) or similar Person assesses, deposit insurance premiums or similar charges which an Affected Party is obligated to pay; or

(v) shall increase the amount of capital or liquidity maintained or required or requested or directed to be maintained by any Affected Party;

and the result of any of the foregoing is or would be, in each case, as determined by the applicable Purchaser Agent or the applicable Affected Party:

(A) to increase the cost to (or impose a cost on) (1) an Affected Party funding or making or maintaining any Purchases or Reinvestments, any purchases, reinvestments, or loans or other extensions of credit under any Liquidity Agreement, any Enhancement Agreement or any commitment (hereunder or under any Liquidity Agreement or any Enhancement Agreement) of such Affected Party with respect to any of the foregoing, or (2) any Purchaser Agent or Administrative Agent for continuing its relationship with any Purchaser;

(B) to reduce the amount of any sum received or receivable by an Affected Party under this Agreement, any Liquidity Agreement or any Enhancement Agreement (or its participation in any such Liquidity Agreement or Enhancement Agreement) with respect thereto; or

(C) (i) to reduce the rate of return on the capital of such Affected Party as a consequence of its obligations hereunder, under any Liquidity Agreement or under any Enhancement Agreement (or its participation in any such Liquidity Agreement or Enhancement Agreement), including its funding or maintenance of any portion of the Asset Portfolio, or arising in connection herewith (or therewith) to a level below that which such Affected Party could otherwise have achieved hereunder or thereunder or (ii) to increase the liquidity required of such Affected Party as a consequence of its obligations hereunder or under any Liquidity Agreement or any Enhancement Agreement (or its participation in any such Liquidity Agreement or Enhancement Agreement), including its funding or maintenance of any portion of the Asset Portfolio, or arising in connection herewith (or therewith) to a level greater than that which such Affected Party could otherwise have achieved hereunder or thereunder,

then, subject to Section 4.2(d) below, on the Settlement Date (or during the Liquidation Period or after the occurrence of an Event of Termination that has not been waived in accordance with the terms of this Agreement, within two (2) Business Days) following its receipt of notice from such

Affected Party (or by the Administrative Agent or a Purchaser Agent on its behalf) in accordance with Section 4.2(c) below, Seller shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional or increased cost or such reduction or liquidity increase; provided that such additional amount or amounts shall not be payable with respect to any Regulatory Change for any period in excess of 180 days prior to the date of demand by the Affected Party unless (1) the effect of such Regulatory Change was retroactive by its terms to a period prior to the date of such Regulatory Change, in which case any additional amount or amounts shall be payable for the retroactive period but only if the Affected Party provides its written demand not later than 180 days after such Regulatory Change; or (2) the Affected Party reasonably and in good faith did not believe such Regulatory Change resulted in such an additional or increased cost or charge or such a reduction during such prior period.

(b) Each Affected Party (or the Administrative Agent or a Purchaser Agent on its behalf), shall use commercially reasonable efforts to notify Seller and Administrative Agent of any event of which it has knowledge which will entitle such Affected Party to compensation pursuant to this Section 4.2 ; provided that no failure to give or delay in giving such notification shall adversely affect the rights of any Affected Party to such compensation.

(c) In determining any amount provided for or referred to in this Section 4.2 , an Affected Party may use any reasonable averaging and attribution methods that it, in its reasonable discretion, shall deem applicable. Any Affected Party (or the Administrative Agent or a Purchaser Agent on its behalf) when making a claim under this Section 4.2 shall submit to Seller and Administrative Agent a written statement of such increased cost or reduced return, which statement, in the absence of manifest error, shall be conclusive and binding upon Seller.

(d) Except as set forth in clause (a) above, failure or delay on the part of any Affected Party (or Administrative Agent or a Purchaser Agent) to demand compensation pursuant to this Section 4.2 shall not constitute a waiver of such Affected Party’s (or the Administrative Agent’s or a Purchaser Agent’s on its behalf) right to demand such compensation.

SECTION 4.3 Funding Losses . If any Affected Party incurs any cost, loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Affected Party), at any time, as a result of (a) any optional or required settlement or repayment with respect to such Purchaser’s Tranche Investment of any Rate Tranche, howsoever funded, being made on any day other than the scheduled last day of an applicable Yield Period with respect thereto, (b) any Purchase not being completed by Seller in accordance with its request therefor under Section 1.2 , (c) the failure to exercise or complete (in accordance with Section 3.2(c) ) any reduction in Total Investment elected to be made under Section 3.2(c) , (d) any reduction in Total Investment elected under Section 3.2(c) exceeding the total amount of Rate Tranches, howsoever funded, with respect to which the last day of the related Yield Period is the date of such reduction or (e) any other mandatory or voluntary reduction in Total Investment, then, upon written notice from such Affected Party (or the Administrative Agent or a Purchaser Agent on its behalf) to Seller and Servicer, Seller shall pay to the applicable Purchaser Agent for the account of the

applicable Affected Parties, on the next Settlement Date (or during the Liquidation Period, after the occurrence of an Event of Termination that has not been waived in accordance with this Agreement, within two (2) Business Days from the receipt of such notice) the amount of such cost, loss or expense. Such written notice shall, in the absence of manifest error, be conclusive and binding upon Seller. If an Affected Party incurs any cost, loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Affected Party), at any time, and is not entitled to reimbursement for such loss or expense in the manner set forth above, such Affected Party shall individually bear such loss or expense without recourse to, or payment from, any other Affected Party.

ARTICLE V
CONDITIONS PRECEDENT

SECTION 5.1 Closing Date . The parties hereto acknowledge that the Original Agreement became effective on the Closing Date.

SECTION 5.2 Effective Date . This Agreement shall become effective on the Effective Date, or such later date as all of the conditions in this Section 5.2 have been satisfied. The occurrence of the Effective Date is subject to the condition precedent that the Administrative Agent shall have received, on or before such date, the following, each (unless otherwise indicated) dated such date or another recent date reasonably acceptable to the Required Purchasers and in form and substance reasonably satisfactory to the Required Purchasers:

(a) A copy of the resolutions or unanimous written consent, as applicable, of the board of directors or board of managers, as the case may be, of each of Seller, Originators, Servicer and Performance Guarantor required to authorize the execution, delivery and performance by it of each Transaction Document to be delivered by it hereunder and the transactions contemplated thereby, certified by its secretary or any other authorized person.

(b) A certificate issued by the Secretary of State of the applicable state or organization as to the legal existence and good standing of Seller, Servicer, Originators and Performance Guarantor.

(c) A certificate of the Secretary or Assistant Secretary of each of Seller, Servicer, Originators and Performance Guarantor certifying attached copies of the organizational documents of such Person and all documents evidencing necessary limited liability company or corporate action (as the case may be) to be taken by and governmental approvals, if any, to be obtained by such Person with respect to this Agreement and each of the other Transaction Documents and the names and true signatures of the incumbent officers of such Person authorized to sign this Agreement or any of the other Transaction Documents, as applicable, and any other documents to be delivered by it hereunder or thereunder or in connection herewith or therewith.

(d) A counterpart of each of this Agreement, the Fee Letter and the Effective Date Amendments, fully executed by the parties thereto.

(e) Completed requests for information (UCC search results) dated within 30 days prior to the Effective Date, and a schedule thereof listing all effective financing statements filed in the appropriate states of formation or incorporation, as applicable, of each of CHS, CHS Capital and Seller that name CHS, CHS Capital and Seller as debtor, together with copies of all such financing statements filed against CHS, CHS Capital and Seller and acknowledgment copies of proper termination statements (Form UCC-3) necessary to evidence the release of all security interests, ownership and other rights of any Person previously granted by CHS, CHS Capital and Seller in the Pool Assets and the Related Assets.

(f) Favorable opinions of legal counsel to Seller, each Originator, Servicer and Performance Guarantor, including legal opinions as to general organizational matters, enforceability, no conflicts with laws and agreements, security interest creation, attachment and perfection, the Volcker Rule and true sale and non-consolidation matters.

(g) A copy of the Information Package as of the Effective Date.

(h) A certificate of a Responsible Officer of each of Originators and Seller certifying that (i) no effective financing statement or other instrument similar in effect covering any Pool Asset or any other Seller Assets is on file in any recording office and (ii) none of the financing statements included in the UCC search results referenced in clause (e) above describe any Pool Asset or any other Seller Assets.

(i) Such other agreements, instruments, certificates and documents as the Administrative Agent may reasonably request.

SECTION 5.3 Conditions Precedent to All Purchases and Reinvestments . Each Purchase (including the initial Purchase) and each Reinvestment hereunder shall be subject to the further conditions precedent that on the date of such Purchase or Reinvestment, the following statements shall be true (and Seller, by accepting the amount of such Purchase or by receiving the proceeds of such Reinvestment, shall be deemed to have certified that):

(a) each of the representations and warranties contained in Article VI , in the Sale Agreement and in each other Transaction Document that are qualified as to materiality are true and correct, and each not so qualified are true and correct in all material respects, in each case, on and as of such day as though made on and as of such day (except to the extent such representations and warranties explicitly refer solely to an earlier date or period, in which case they shall be true and correct as of such earlier date or period);

(b) no event has occurred and is continuing or would result from such Purchase or Reinvestment, that constitutes an Event of Termination, an Unmatured Event of Termination, a Servicer Termination Event or an Unmatured Servicer Termination Event;

(c) after giving effect to each proposed Purchase or Reinvestment, (i) with respect to any Purchaser Group, such Purchaser Group’s Purchaser Group Investment will not exceed such Purchaser Group’s Purchaser Group Commitment, (ii) the Total Investment

will not exceed the Purchasers’ Total Commitment, and (iii) the Total Investment will not exceed the sum of the Receivables Investment Base and the Loan Investment Base; and

(d) the Purchase Termination Date has not occurred.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES

SECTION 6.1 Representations and Warranties of Seller . Seller represents and warrants, as of the Effective Date and as of each date on which a Purchase or Reinvestment is made, as follows:

(a) Seller is a limited liability company duly formed and existing in good standing under the laws of the State of Delaware; has all necessary limited liability company power to carry on its present business; and has made all necessary filings in order to be licensed or qualified and in good standing in each jurisdiction in which the nature of the business transacted by it or the nature of the property owned or leased by it makes such licensing or qualification necessary and in which the failure to be so licensed or qualified would have a Material Adverse Change with respect to Seller.

(b) The execution, delivery and performance by Seller of each Transaction Document to which it is party and each other document to be delivered by it thereunder, (i) are within its limited liability company powers, (ii) have been duly authorized by all necessary limited liability company action, (iii) do not contravene, violate or breach (1) its organizational documents, (2) any Applicable Law, (3) any Contractual Obligation of or affecting Seller or any of its properties, or (4) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property and (iv) do not result in the creation or imposition of any Adverse Claim upon any of its properties pursuant to the terms of any such Contractual Obligation, other than this Agreement and the other Transaction Documents.

(d) No authorization or approval or other action by, and no notice to, license from or filing with, any Governmental Authority is required for the due execution, delivery and performance by Seller of each Transaction Document to which it is party or any other document to be delivered by it thereunder.

(e) Each Transaction Document to which Seller is a party constitutes a legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, except as limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other laws relating to the enforcement of creditors’ rights generally and general principles of equity (regardless of whether enforcement is sought at equity or law).

(f) There is no pending or, to its knowledge, threatened action, proceeding, investigation or injunction, writ or restraining order affecting Seller or its properties before any Governmental Authority which could reasonably be expected to result in a Material Adverse Change with respect to Seller.

(g) Seller is Solvent and no Insolvency Event has occurred with respect to Seller.

(h) Since the date of the Seller’s most recent audited financial statements, no Material Adverse Change or event which, individually or in the aggregate, is reasonably likely to result in a Material Adverse Change has occurred with respect to Seller.

(i) No Change of Control has occurred.

(j) All assets of Seller are free and clear of any Adverse Claim in favor of the Internal Revenue Service, any employee benefit plan, the PBGC or similar entity.

(k) All information furnished by or on behalf of Seller to the Administrative Agent or any other Affected Party for purposes of or in connection with any Information Package, the Transaction Documents or any transaction contemplated thereby is, at the time the same is furnished, taken as a whole, true and accurate in all material respects and such information does not omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(l) Seller has not changed its name or the location of its jurisdiction of formation since the Formation Date.

(m) Seller (i) is not required to register as an investment company under the Investment Company Act, without reliance of Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act, and (ii) is not a “covered fund” under the Volcker Rule. In determining that Seller is not a “covered fund” under the Volcker Rule, Seller is entitled to rely on the exemption from the definition of “investment company” set forth in Rule 3a-7 of the Investment Company Act.

(n) No transaction contemplated by this Agreement or any other Transaction Document requires compliance by it with any bulk sales act or similar law.

(o) Each Asset included in the Net Pool Balance as an Eligible Receivable or Eligible Loan, as applicable, on the date of any Purchase or Reinvestment or on the date of any Information Package was an Eligible Receivable or Eligible Loan, as applicable, on such date. Upon and after giving effect to any Purchase or Reinvestment to be made on such date, sufficient Eligible Receivables exist in the Receivables Pool and sufficient Eligible Loans exist in the Loan Pool such that (i) the Total Investment will not exceed the Purchasers’ Total Commitment, and (ii) the Total Investment will not exceed the sum of the Receivables Investment Base and the Loan Investment Base.

(p) Each sale of an Asset and the Related Assets to Seller under the Sale Agreement constitutes the absolute and irrevocable sale and transfer of all right, title and interest of such Originator in such Asset and Related Security to Seller and no further action, including any filing or recording of any document or any notice to, license from or approval from any Governmental Authority is necessary in order to establish the ownership interest of Seller effected by such sale or to permit Seller to service, enforce or otherwise collect such Asset from the related Account Debtor or Obligor.

(q) The Administrative Agent has a first priority perfected ownership interest or security interest in the Seller Assets, free and clear of any Adverse Claim.

(r) No event has occurred and is continuing and no condition exists, or would result from any Purchase or Reinvestment hereunder, that constitutes, individually or in the aggregate, an Event of Termination, an Unmatured Event of Termination, a Servicer Termination Event or an Unmatured Servicer Termination Event.

(s) Seller is in compliance in all material respects with the Receivable Documentation relating to the Pool Receivables and the Loan Documents relating to the Pool Loans, and none of (i) the Pool Receivables or the Receivable Documentation related thereto or (ii) the Pool Loans or the Loan Documents related thereto are subject to any defense, dispute, Dilution or any offset, counterclaim or other defense, whether arising out of the transactions contemplated by this Agreement or any other Transaction Document or independently thereof.

(t) No effective financing statement or other instrument similar in effect covering any Pool Asset or any other Seller Assets is on file in any recording office (except any financing statements or other instruments filed pursuant to this Agreement or any other Transaction Document), and, to the knowledge of Seller, no competing notice or notice inconsistent with the transactions contemplated in this Agreement or any other Transaction Document is in effect with respect to any Account Debtor or Obligor.

(u) Seller has filed all material tax returns and reports required by Applicable Law to have been filed by it and has paid all material taxes, assessments and governmental charges thereby shown to be owing by it, other than any such taxes, assessments or charges that are not yet delinquent or are being contested in good faith by appropriate proceedings.

(v) Seller is, and shall at all relevant times continue to be, a “disregarded entity” within the meaning of U.S. Treasury Regulation § 301.7701-3.

(w) The Seller has accounted for the sale of the Asset Portfolio (or any portion thereof) to the Administrative Agent, on behalf of the Purchasers, in its books and financial statements as sales, consistent with GAAP.

(x) The facts regarding Seller, each Originator, Servicer, Performance Guarantor, the Pool Assets, the Related Assets and the related matters set forth or assumed in each of

the opinions of counsel delivered in connection with this Agreement and the Transaction Documents are true and correct in all material respects.

(y) No sale, contribution or assignment of Assets under the Sale Agreement constitutes a fraudulent transfer or conveyance under any United States federal or applicable state bankruptcy or insolvency laws or is otherwise void or voidable under such or similar laws or principles or for any other reason.

(z) All Pool Assets (i) were originated by CHS or CHS Capital in the ordinary course of its business, (ii) were sold by CHS or CHS Capital to Seller for fair consideration and reasonably equivalent value and (iii) solely with respect to Pool Receivables, represent all, or a portion of the purchase price of merchandise, insurance or services within the meaning of Section 3(c)(5)(A) of the Investment Company Act.

(aa) Policies and procedures have been implemented and maintained by or on behalf of Seller that are designed to achieve compliance by Seller, Originators and each of their respective Subsidiaries, directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, giving due regard to the nature of such Person’s business and activities, and Seller, Originators, their respective Subsidiaries and their respective officers and employees and, to the knowledge of Seller, its directors and agents acting in any capacity in connection with or directly benefitting from the credit facility established hereby, are in compliance with Anti-Corruption Laws and applicable Sanctions, in each case in all material respects. (i) None of Seller, Originators or any of their Subsidiaries or, to the knowledge of Seller, any of its directors, officers, employees, or agents that will act in any capacity in connection with or directly benefit from the credit facility established hereby, is a Sanctioned Person, and (ii) neither Seller, Originators nor any of their respective Subsidiaries is organized or resident in a Sanctioned Country. No Purchase or Reinvestment or use of proceeds thereof by Seller in any manner will violate Anti-Corruption Laws or applicable Sanctions.

(bb) Seller does not have outstanding any security of any kind except membership interests issued to CHS in connection with its organization, and has not incurred, assumed, guaranteed or otherwise become directly or indirectly liable for, or in respect of, any Debt and no Person has any commitment or other arrangement to extend credit to Seller, in each case, other than as will occur in accordance with the Transaction Documents.

(cc) The use of all funds obtained by Seller under this Agreement will not conflict with or contravene any of Regulations T, U and X promulgated by the Board of Governors of the Federal Reserve System.

(dd) None of the Seller, any Affiliate of the Seller or any third party with which the Seller or any Affiliate thereof has contracted has delivered, in writing or orally, to any Rating Agency, any Transaction Information without providing such Transaction Information to the applicable Purchaser Agent prior to delivery to such Rating Agency and has not participated in any oral communications with respect to Transaction Information with any Rating Agency without the participation of such Purchaser Agent.

(ee) Each of the Concentration Account and each Seller Collection Account constitutes a “deposit account” within the meaning of the applicable UCC. The Concentration Account and each Seller Collection Account are in the name of the Seller, and the Seller owns and has good and marketable title to the Concentration Account and each Seller Collection Account free and clear of any Adverse Claim. The Seller has delivered to the Administrative Agent a fully executed Seller Account Agreement relating to the Concentration Account and each Seller Collection Account, pursuant to which the applicable Account Bank has agreed to comply with the instructions originated by the Administrative Agent directing the disposition of funds in the Concentration Account or the Seller Collection Accounts, as applicable, without further consent by the Seller, the Servicer or any other Person. The Administrative Agent has “control” (as defined in Section 9-104 of the UCC) over the Concentration Account and each Seller Collection Account.

(ff) Each of the Originator Collection Accounts and Originator Specified Accounts constitutes a “deposit account” within the meaning of the applicable UCC. Each of the Originator Collection Accounts and Originator Specified Accounts is in the name of an Originator, and such Originator owns and has good and marketable title to the such accounts free and clear of any Adverse Claim. The Originator has delivered to the Administrative Agent a fully executed Originator Account Agreement relating to the Originator Collection Accounts, pursuant to which the applicable Account Bank has agreed to comply with the instructions originated by the Administrative Agent directing the disposition of funds in the Originator Collection Accounts without further consent by the Seller, the Servicer or any other Person. The Administrative Agent has “control” (as defined in Section 9-104 of the UCC) over the Originator Collection Accounts.

(gg) Seller has complied in all material respects with the Credit and Collection Policy and has not, since the Effective Date, made any changes in the Credit and Collection Policy that would impair in any material respect the collectability, value, validity or enforceability of, or increase the days to pay or Dilution with respect to, any Pool Asset or otherwise have a Material Adverse Change with respect to Seller without the consent of the Required Purchasers.

(hh) Immediately prior to and as of the Effective Date, no event has occurred and is continuing and no condition exists, that constitutes, individually or in the aggregate, (i) an Event of Termination, (ii) an Unmatured Event of Termination, (iii) a Servicer Termination Event or (iv) an Unmatured Servicer Termination Event, in each case, as such capitalized terms in clauses (i) through (iv) are defined in the Original Agreement.

(ii) Immediately prior to and as of the Effective Date, each of the representations and warranties of the Seller contained in the Original Agreement that are qualified as to materiality are true and correct, and each not so qualified are true and correct in all material respects, in each case, on and as of the Effective Date as though made on and as of the Effective Date (except to the extent such representations and warranties explicitly refer solely to an earlier date or period, in which case they shall be true and correct as of such earlier date or period).

SECTION 6.2 Representations and Warranties of CHS . CHS, individually and as Servicer, represents and warrants, as of the Effective Date and as of each date on which a Purchase or Reinvestment is made, as follows:

(a) CHS is a corporation duly formed and existing in good standing and whose by-laws provide that it shall be governed by the laws of the State of Minnesota; has all necessary corporate power to carry on its present business; and has made all necessary filings in order to be licensed or qualified and in good standing in each jurisdiction in which the nature of the business transacted by it or the nature of the property owned or leased by it makes such licensing or qualification necessary and in which the failure to be so licensed or qualified would have a Material Adverse Change with respect to CHS.

(b) The execution, delivery and performance by Servicer of each Transaction Document to which it is party and each other document to be delivered by it thereunder, (i) are within its corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) do not contravene, violate or breach (1) its by-laws or its other organizational documents, (2) any Applicable Law, (3) any Contractual Obligation of or affecting Servicer or any of its properties, or (4) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property and (iv) do not result in the creation or imposition of any Adverse Claim upon any of its properties pursuant to the terms of any such Contractual Obligation, other than this Agreement and the other Transaction Documents.

(d) No authorization or approval or other action by, and no notice to, license from or filing with, any Governmental Authority is required for the due execution, delivery and performance by Servicer of each Transaction Document to which it is party or any other document to be delivered by it thereunder.

(e) Each Transaction Document to which Servicer is a party constitutes a legal, valid and binding obligation of Servicer, enforceable against it in accordance with its terms, except as limited by bankruptcy, insolvency, moratorium, fraudulent conveyance or other laws relating to the enforcement of creditors’ rights generally and general principles of equity (regardless of whether enforcement is sought at equity or law).

(f) There is no pending or, to its knowledge, threatened action, proceeding, investigation or injunction, writ or restraining order affecting Servicer or any of its Affiliates before any Governmental Authority which could reasonably be expected to result in a Material Adverse Change with respect to Servicer.

(g) Servicer is Solvent and no Insolvency Event has occurred with respect to Servicer.

(h) Since the date of the Servicer’s most recent audited financial statements, no Material Adverse Change or event which, individually or in the aggregate, is reasonably likely to result in a Material Adverse Change has occurred with respect to Servicer.

(i) No Change of Control has occurred.

(j) All information furnished by or on behalf of Servicer to the Administrative Agent or any other Affected Party for purposes of or in connection with any Information Package, the Transaction Documents or any transaction contemplated thereby is, at the time the same is furnished, taken as a whole, true and accurate in all material respects and such information does not omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(k) Servicer is not required to register as an investment company under the Investment Company Act.

(l) No transaction contemplated by the Sale Agreement requires compliance by it with any bulk sales act or similar law.

(m) Each Asset included in the Net Pool Balance as an Eligible Receivable or Eligible Loan, as applicable, on the date of any Purchase or Reinvestment or on the date of any Information Package was an Eligible Receivable or Eligible Loan, as applicable, on such date. Upon and after giving effect to any Purchase or Reinvestment to be made on such date, sufficient Eligible Receivables exist in the Receivables Pool and sufficient Eligible Loans exist in the Loan Pool such that (i) the Total Investment will not exceed the Purchasers’ Total Commitment, and (ii) the Total Investment will not exceed the sum of the Receivables Investment Base and the Loan Investment Base.

(n) Since the Effective Date, there has been no material adverse change in the ability of Servicer to service, enforce or otherwise collect the Pool Assets and the Related Security.

(o) No event has occurred and is continuing and no condition exists, or would result from any Purchase or Reinvestment hereunder, that constitutes, individually or in the aggregate, an Event of Termination, an Unmatured Event of Termination, a Servicer Termination Event or an Unmatured Servicer Termination Event.

(p) Servicer is in compliance in all material respects with the Receivable Documentation relating to the Pool Receivables and the Loan Documents relating to the Pool Loans, and none of the (i) Pool Receivables or the Receivable Documentation related thereto and (ii) Pool Loans or the Loan Documents related thereto are subject to any defense, dispute, Dilution or any offset, counterclaim or other defense, whether arising out of the transactions contemplated by this Agreement or any other Transaction Document or independently thereof.

(q) No effective financing statement or other instrument similar in effect covering any Pool Asset or any other Seller Assets is on file in any recording office (except any financing statements or other instruments filed pursuant to this Agreement or any other Transaction Document), and, to the knowledge of Servicer, no competing notice or notice inconsistent with the transactions contemplated in this Agreement is in effect with respect to any Account Debtor or Obligor.

(r) Servicer has filed all material tax returns and reports required by Applicable Law to have been filed by it and has paid all material taxes, assessments and governmental charges, to its knowledge, owing by it, other than any such taxes, assessments or charges that are not yet delinquent or are being contested in good faith by appropriate proceedings.

(s) The facts regarding Seller, each Originator, Servicer, Performance Guarantor, the Pool Assets, the Related Assets and the related matters set forth or assumed in each of the opinions of counsel delivered in connection with this Agreement and the Transaction Documents are true and correct in all material respects.

(t) Policies and procedures have been implemented and maintained by or on behalf of CHS that are designed to achieve compliance by CHS and its Subsidiaries, directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, giving due regard to the nature of such Person’s business and activities, and CHS, its Subsidiaries and their respective officers and employees and, to the knowledge of CHS, its directors and agents acting in any capacity in connection with or directly benefitting from the credit facility established hereby, are in compliance with Anti-Corruption Laws and applicable Sanctions, in each case in all material respects. (i) None of CHS or any of its Subsidiaries or, to the knowledge of CHS, any of its directors, officers, employees, or agents that will act in any capacity in connection with or directly benefit from the credit facility established hereby, is a Sanctioned Person, and (ii) neither CHS nor any of its Subsidiaries is organized or resident in a Sanctioned Country. No Purchase or Reinvestment or use of proceeds thereof by CHS in any manner will violate Anti-Corruption Laws or applicable Sanctions.

(u) None of the Servicer, any Affiliate of the Servicer or any third party with which the Servicer or any Affiliate thereof has contracted has delivered, in writing or orally, to any Rating Agency, any Transaction Information without providing such Transaction Information to the applicable Purchaser Agent prior to delivery to such Rating Agency and has not participated in any oral communications with respect to Transaction Information with any Rating Agency without the participation of such Purchaser Agent.

(v) Each of the Concentration Account and each Seller Collection Account constitutes a “deposit account” within the meaning of the applicable UCC. The Concentration Account and each Seller Collection Account are in the name of the Seller, and the Seller owns and has good and marketable title to the Concentration Account and each Seller Collection Account free and clear of any Adverse Claim. The Seller has delivered to the Administrative Agent a fully executed Seller Account Agreement relating to the Concentration Account and each Seller Collection Account, pursuant to which the applicable Account Bank has agreed to comply with the instructions originated by the Administrative

Agent directing the disposition of funds in the Concentration Account or the Seller Collection Accounts, as applicable, without further consent by the Seller, the Servicer or any other Person. The Administrative Agent has “control” (as defined in Section 9-104 of the UCC) over the Concentration Account and each Seller Collection Account.

(w) Each of the Originator Collection Accounts and Originator Specified Accounts constitutes a “deposit account” within the meaning of the applicable UCC. Each of the Originator Collection Accounts and Originator Specified Accounts is in the name of an Originator, and such Originator owns and has good and marketable title to such accounts free and clear of any Adverse Claim. The Originator has delivered to the Administrative Agent a fully executed Originator Account Agreement relating to the Originator Collection Accounts, pursuant to which the applicable Account Bank has agreed to comply with the instructions originated by the Administrative Agent directing the disposition of funds in the Originator Collection Accounts without further consent by the Seller, the Servicer or any other Person. The Administrative Agent has “control” (as defined in Section 9-104 of the UCC) over the Originator Collection Accounts.

(x) Servicer has complied in all material respects with the Credit and Collection Policy and has not, since the Effective Date, made any changes in the Credit and Collection Policy that would impair in any material respect the collectability, value, validity or enforceability of, or increase the days to pay or Dilution with respect to, any Pool Asset or otherwise have a Material Adverse Change with respect to Servicer without the consent of the Required Purchasers.

(y) Immediately prior to and as of the Effective Date, no event has occurred and is continuing and no condition exists, that constitutes, individually or in the aggregate, (i) an Event of Termination, (ii) an Unmatured Event of Termination, (iii) a Servicer Termination Event or (iv) an Unmatured Servicer Termination Event, in each case, as such capitalized terms in clauses (i) through (iv) are defined in the Original Agreement.

(z) Immediately prior to and as of the Effective Date, each of the representations and warranties of CHS contained in the Original Agreement that are qualified as to materiality are true and correct, and each not so qualified are true and correct in all material respects, in each case, on and as of the Effective Date as though made on and as of the Effective Date (except to the extent such representations and warranties explicitly refer solely to an earlier date or period, in which case they shall be true and correct as of such earlier date or period).

ARTICLE VII
GENERAL COVENANTS OF SELLER AND SERVICER

SECTION 7.1 Covenants of Seller . From the Effective Date until the Final Payout Date:

(a) Existence . Seller will preserve, renew and maintain in full force and effect its limited liability company existence and good standing under the laws of the jurisdiction

of its organization and take all reasonable action to maintain all rights, privileges, permits and licenses necessary in the normal conduct of its business. Seller will at all times be organized under the laws of the State of Delaware and shall not take any action to change its jurisdiction of organization. Seller will keep its principal place of business and chief executive office and the office where it keeps its records concerning the Pool Assets (unless then held by the Custodian) at the address set forth in Schedule 13.2 or, upon 30 days’ prior written notice to the Administrative Agent, at any other locations in jurisdictions where all actions reasonably requested by the Administrative Agent or any Purchaser Agent or otherwise necessary to protect, perfect and maintain the Administrative Agent’s ownership and security interest in the Pool Assets and the other Seller Assets have been taken and completed.

(b) Compliance with Laws . Seller will comply in all material respects with all Applicable Laws with respect to it, the Pool Receivables and the Receivable Documentation and the Pool Loans and the Loan Documents.

(c) Books and Records . Seller will keep its books and accounts in accordance with GAAP and shall make a notation on its books and records, including any computer files, to indicate which Assets have been sold to the Administrative Agent. Seller will maintain such books and accounts in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over it. Other than Custodian File held by Custodian in accordance with the Custodian Agreement, Seller will maintain and implement administrative and operating procedures (including an ability to recreate records evidencing (i) Receivables and related Receivable Documentation and (ii) Loans and related Loan Documents in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary for collecting all Pool Assets (including records adequate to permit the daily identification of each Asset and all collections of and adjustments to each existing Asset).

(d) Sales, Liens and Debt . Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or with respect to, the Pool Assets or any other Seller Assets or upon or with respect to any account or lockbox to which Collections are required to be sent, or assign any right to receive income in respect thereof, in each case, except the dispositions to the Administrative Agent contemplated hereunder and the Adverse Claims in favor of the Administrative Agent created hereunder.

(e) Extension or Amendment of Assets . Seller will not (i) extend, or otherwise amend or modify the payment terms under any Pool Asset or (ii) otherwise waive or permit or agree to any deviation from the terms or conditions of any Pool Asset. Seller will not take, or cause to be taken, any action that reduces the amount payable of any Pool Asset or materially impairs the full and timely collection thereof.

(f) Audits and Visits . Seller will, upon reasonable advance notice of not less than five (5) Business Days (or at any time following the occurrence of an Event of Termination that has not been waived in accordance with this Agreement), during regular

business hours, permit the Administrative Agent and each Purchaser Agent and representatives thereof at Seller’s expense, (i) to examine and make abstracts from all books, records and documents (including computer tapes and disks) in its possession or under its control relating to Pool Assets and the other Seller Assets, including the Receivable Documentation and Loan Documents, and (ii) to visit its offices and properties for the purpose of examining and auditing such materials described in clause (i) above, and, subject to the foregoing, to discuss matters relating to Pool Assets or its performance hereunder or under the related Receivable Documentation and Loan Documents with any of its officers having knowledge of such matters, in each case, at such reasonable times and as often as may reasonably be desired by the Administrative Agent or any such Purchaser Agent; provided , however , that unless an Event of Termination has occurred that has not been waived in accordance with this Agreement, Seller shall be required to reimburse the Administrative Agent and the Purchaser Agents for the costs and expenses related to (x) only one such audit or visitation during any calendar year, (y) any audit following a material change in the systems of Seller or Servicer that occurs after any audit specified in clause (x) or (z) any follow-up audit that is required as a result of any audit specified in clauses (x) or (y) .

(g) Reporting Requirements . Seller will provide to the Administrative Agent the following:

(i) as soon as available and in any event within ninety (90) days after the end of each annual accounting period of CHS, a copy of the balance sheet of Seller as of the last day of the period then ended and the statements of income and cash flows of Seller for the period then ended, and accompanying notes thereto, each in reasonable detail showing in comparative form the figures for the previous fiscal year, accompanied by a statement of Seller (with, if necessary, qualifications related to changes in GAAP), to the effect that the financial statements have been prepared in accordance with GAAP and present fairly in accordance with GAAP the financial condition of Seller as of the close of such fiscal year and the results of its operations and cash flows for the fiscal year then ended;

(ii) at least 30 days prior to any change in Seller’s name or jurisdiction of organization, a notice setting forth the new name or jurisdiction, as applicable, and the proposed effective date thereof;

(iii) such data, reports and information relating to the Pool Assets and the other Seller Assets reasonably requested by the Administrative Agent or any Purchaser Agent from time to time;

(iv) promptly (and in no event later than five (5) Business Days) following knowledge or notice thereof, written notice in reasonable detail of any Adverse Claim or dispute asserted or claim made against a Pool Asset or any other Seller Assets;

(v) promptly (and in no event later than five (5) Business Days) following knowledge or notice thereof, written notice in reasonable detail of the failure of any

representation or warranty made or deemed to be made by Seller under this Agreement or any other Transaction Document to be true and correct in any material respect when made;

(vi) promptly (and in no event later than three (3) Business Days) following knowledge or notice thereof, written notice in reasonable detail of the occurrence of any Event of Termination, Unmatured Event of Termination, Servicer Termination Event or Unmatured Servicer Termination Event and the action that Seller proposes to take with respect thereto;

(vii) at least fifteen (15) days prior to (i) the effectiveness of any change in or amendment to the Credit and Collection Policy, a description or, if available, a copy of the Credit and Collection Policy after giving effect to such change or amendment and a written notice (A) indicating such change or amendment and (B) if such proposed change or amendment would be reasonably likely to adversely affect the value, validity, enforceability or collectability of, or increase the days to pay or Dilution with respect to, any Pool Asset or decrease the credit quality of any newly created Asset, requesting the consent of the Required Purchasers thereto (which consent shall not be unreasonably withheld, conditioned or delayed) and (ii) Seller making any change or changes in the character of its business, written notice indicating such change and requesting the consent of the Required Purchasers thereto (which consent shall not be unreasonably withheld, conditioned or delayed);

(viii) promptly (and in no event later than five (5) Business Days) following receipt thereof, a copy of all periodic statements regarding the Seller Collection Accounts from the applicable Account Banks; and

(ix) as soon as possible and in any event within three (3) Business Days after knowledge or notice of the occurrence thereof, written notice of any matter that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change with respect to Seller.

(h) Further Assurances . Seller will, at its expense, promptly execute, deliver and file all further instruments and documents (including UCC-3 financing statement amendments and continuation statements) necessary or desirable, and take all further action that the Administrative Agent or any Purchaser Agent may reasonably request, from time to time, in order to perfect, protect or more fully evidence the Administrative Agent’s first priority perfected ownership interest and/or security interest in the Pool Assets and the other Seller Assets, or to enable the Administrative Agent to exercise or enforce the rights of the Administrative Agent or any other Affected Party hereunder or under or in connection with the Pool Assets and the other Seller Assets. In connection with any change in its name or jurisdiction of organization, Seller will, at its expense, cause to be delivered to the Administrative Agent (i) one or more opinions of counsel to Seller, in form and substance reasonably acceptable to the Administrative Agent, as to such corporate and UCC perfection matters as the Administrative Agent may request at such time and (ii) one or more certificates

of a Responsible Officer of Seller, in form and substance reasonably acceptable to the Administrative Agent, with respect to the review of UCC search results.

(i) Taxes . Seller will pay any and all taxes relating to the transactions contemplated under this Agreement, including the sale, transfer and assignment of each Pool Asset and the other Seller Assets, unless the same are being contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by Seller.

(j) Perform Terms . Seller will duly perform and comply in all material respects with all terms under the Receivable Documentation and Loan Documents and promptly inform the Administrative Agent and each Purchaser Agent of any breach or default by Seller or any Account Debtor or Obligor of any of the terms thereof.

(k) Not Adversely Affect the Administrative Agent’s Rights . Seller will refrain from any act or omission which, individually or in the aggregate, could reasonably be expected to prejudice, diminish or limit, in each case in any material respect, the Administrative Agent’s or any other Affected Party’s rights under or with respect to any of the Pool Assets, any other Seller Assets or this Agreement, except to the extent such act or omission is expressly permitted under this Agreement or any other Transaction Document.

(l) Compliance with Credit and Collection Policy . Seller will comply with the Credit and Collection Policy in all material respects in connection with the enforcement and collection of Pool Assets and the other Seller Assets.

(m) Anti-Corruption Laws and Sanctions . Policies and procedures will be maintained and enforced by or on behalf of the Seller that are designed in good faith and in a commercially reasonable manner to promote and achieve compliance, in the reasonable judgment of the Seller, by the Seller, Originators and each of their respective Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, in each case giving due regard to the nature of such Person’s business and activities. The Seller will not request any Purchase or Reinvestment, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Purchase (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding or financing any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, in each case to the extent doing so would violate any Sanctions, or (iii) in any other manner that would result in liability to any party hereto under any applicable Sanctions or the violation of any Sanctions by any such Person.

(n) No Change in Business, Credit and Collection Policy or Organizational Documents . Seller shall not (i) make any change in (A) the character of its business without the prior written consent of the Required Purchasers or (B) the Credit and Collection Policy, which change would impair in any material respect the collectability, value, validity or enforceability of, or increase the days to pay or Dilution with respect to, any Pool Asset or

otherwise have a Material Adverse Change with respect to Seller without the prior written consent of the Required Purchasers, or (ii) amend or otherwise modify its limited liability company agreement or certificate of formation, in either case, without the prior written consent of the Required Purchasers.

(o) Mergers, Acquisitions, Sales, etc. Seller shall not (i) change its jurisdiction of organization, or make any other change such that any financing statement filed in connection with the Transaction Documents would become seriously misleading or would otherwise be rendered ineffective, (ii) be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or any stock of any class of, or any partnership or joint venture interest in, any other Person, (iii) sell, transfer, convey, contribute or lease all or any substantial part of its assets, or sell or assign with or without recourse any Assets or any interest therein to any Person (other than pursuant hereto and to any Transaction Document) or (iv) have any Subsidiaries or make any investments in any other Person.

(p) Debt and Business Activity . Except for Seller’s obligation to pay the “Payoff Amount” as defined in the Payoff Letter and any contingent indemnification obligations arising under the Payoff Letter that are not then due and payable, Seller shall not incur, assume, guarantee or otherwise become directly or indirectly liable for or in respect of any Debt or other obligation, purchase any asset (or make any investment by share purchase, loan or otherwise) or engage in any other activity (whether or not pursued for gain or other pecuniary advantage), in any case, other than as will occur pursuant to the Transaction Documents.

(q) Payment of Obligations . The Seller shall duly and punctually pay Deemed Collections, Repurchase Payments, Yield, fees and all other amounts payable by the Seller hereunder in accordance with the terms of this Agreement.

(r) Collection Accounts; Lockbox; Originator Specified Accounts . The Seller shall (i) direct (x) each Account Debtor to pay all amounts owing under the Pool Receivables only to a Lockbox, a Collection Account, an Originator Specified Account or the Concentration Account and (y) each Obligor to pay all amounts owing under the Pool Loans only to a Seller Collection Account or the Concentration Account, (ii) not to change such payment instructions while any Pool Assets remain outstanding, (iii) take any and all other reasonable actions, including actions reasonably requested by the Administrative Agent, to ensure that all amounts owing under the Pool Assets will be deposited in accordance with clause (i) , (iv) hold in trust and cause the Servicer to hold in trust as the Affected Parties’ exclusive property and safeguard for the benefit of the Affected Parties all Collections and other amounts remitted or paid to the Seller or the Servicer (or any of their respective Affiliates) in respect of Pool Assets for prompt deposit into the Concentration Account in the manner set forth below, (v) cause the Servicer to deposit in a Collection Account all Collections remitted to an Originator Specified Account within two (2) days following receipt thereof and (vi) cause the Servicer to endorse, to the extent necessary, all checks or other instruments received in any Lockbox so that the same can be deposited in a Collection Account, in the form so received (with all necessary endorsements), on the first Business

Day after the date of receipt thereof. The Seller shall not deposit or otherwise credit, or cause or permit to be so deposited or credited, to any Seller Collection Account any amounts other than Collections or proceeds thereof. The Seller shall not terminate or permit the termination of any Collection Account, Originator Specified Account or Lockbox or any Account Agreement without the prior written consent of the Required Purchasers.

(s) Concentration Account . The Seller shall deposit or cause to be deposited in the Concentration Account all Available Collections and other amounts received by Seller, Servicer or an Originator (or any of their respective Affiliates) or deposited in a Lockbox, an Originator Specified Account or a Collection Account, in each case, with respect to Pool Assets or any other Seller Assets (whether such amounts were received by Seller directly or otherwise) without adjustment, setoff or deduction of any kind or nature no later than the Business Day preceding the Settlement Date immediately succeeding receipt thereof; provided that, so long as no Unmatured Event of Termination or Event of Termination exists, the Seller shall not be required to deposit Collections on the Business Day preceding the next Settlement Date in excess of the aggregate amount the Seller is required to pay on such Settlement Date in accordance with Section 3.1(d) . The Seller shall take any and all other actions, including actions reasonably requested by the Administrative Agent, to ensure that all amounts owing under the Pool Assets and the other Seller Assets will be deposited in the Concentration Account in a timely manner pursuant to the terms of this Agreement. The Seller shall not deposit or otherwise credit, or cause or permit to be so deposited or credited, to the Concentration Account any amounts other than Collections or proceeds thereof. The Seller shall not terminate or permit the termination of the Concentration Account without the prior written consent of the Required Purchasers.

(t) Misdirected Payments . If the Seller receives a misdirected payment of a Pool Asset from any Account Debtor or Obligor, the Seller shall remit such funds to a Collection Account no later than two (2) Business Days following receipt thereof. Until remitted to a Collection Account, the Seller shall hold such funds in trust as the Affected Parties’ exclusive property and safeguard such funds for the benefit of the Affected Parties.

(u) Restricted Payments . Seller shall not declare or pay any dividend or distributions or, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, its membership interests, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in its obligations; provided , however , that so long as no Event of Termination or Unmatured Event of Termination has occurred and is continuing or would result therefrom, Seller may make, or cause to be made, distributions only out of the funds released to the Seller in accordance with Section 3.1 .

(v) Tax Status . Seller shall not take or cause any action to be taken that could result in it being treated as other than a “disregarded entity” within the meaning of U.S. Treasury Regulation § 301.7701-3.

(w) Right and Title . Seller shall hold all right, title and interest in each Pool Asset, except to the extent that any such right, title or interest has been transferred or granted to Administrative Agent (on behalf of Purchasers).

(x) Transaction Documents . Without limiting any of Seller’s covenants or agreements set forth herein or in any other Transaction Document, Seller shall comply with each and every of its covenants and agreements under each Transaction Document to which it is a party in any capacity and its certificate of formation and limited liability company agreement.

(y) Enforcement of Sale Agreement . On its own behalf and on behalf of Purchasers, Purchaser Agents and Administrative Agent, Seller shall (x) promptly enforce all covenants and obligations of each Originator contained in the Sale Agreement and (y) deliver to Administrative Agent and each Purchaser Agent all consents, approvals, directions, notices and waivers and take other actions under the Sale Agreement as may be reasonably directed by the Required Purchasers.

(z) Use of Funds . Seller shall not use any funds obtained under this Agreement in any manner that conflicts with or contravenes any of Regulations T, U and X promulgated by the Board of Governors of the Federal Reserve System.

(aa) Delivery of Custodian File and Obligor Notes .

(i) Not later than six (6) months following the Effective Date, the Seller shall deliver or cause to be delivered directly to the Custodian for the benefit of the Affected Parties the Custodian File relating to each Effective Date Loan, and shall cause the related Obligor Note for each Effective Date Loan to be (i) duly indorsed in blank with note transfer powers in the form set forth in the Custodian Agreement and (ii) delivered to the Custodian.

(ii) Not later than thirty (30) days following the date on which the Seller acquires an interest in any Pool Loan (other than any Effective Date Loan) pursuant to the Sale Agreement, the Seller shall deliver or cause to be delivered directly to the Custodian for the benefit of the Affected Parties the Custodian File relating to such Pool Loan, and shall cause the related Obligor Note to be (i) duly indorsed in blank with note transfer powers in the form set forth in the Custodian Agreement and (ii) delivered to the Custodian.

(iii) Not later than thirty (30) days following any amendment or modification to any Loan Document, the Seller shall deliver or cause to be delivered such Loan Document to the Custodian.

SECTION 7.2 Covenants of CHS . From the Effective Date until the Final Payout Date:

(a) Existence . Servicer will preserve, renew and maintain in full force and effect its corporate existence and good standing under the laws of the jurisdiction of its organization

and take all reasonable action to maintain all rights, privileges, permits and licenses necessary in the normal conduct of its business. Servicer will keep the office where it keeps its records concerning the Pool Assets (unless then held by the Custodian) at the address set forth in Schedule 13.2 or, upon 30 days’ prior written notice to the Administrative Agent, at any other locations in jurisdictions where all actions reasonably requested by the Administrative Agent or any Purchaser Agent or otherwise necessary to protect, perfect and maintain the Administrative Agent’s ownership interest or security interest in the Pool Assets and the other Seller Assets have been taken and completed.

(b) Compliance with Laws . Servicer will comply in all material respects with all Applicable Laws with respect to it, the Pool Receivables and the Receivable Documentation and the Pool Loans and the Loan Documents and the servicing and collection thereof.

(c) Books and Records . Servicer will keep its books and accounts in accordance with GAAP and shall make a notation on its books and records, including any computer files, to indicate which Assets have been sold to the Administrative Agent. Servicer will maintain such books and accounts in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over it. Other than Records held by Custodian in accordance with the Custodian Agreement, Servicer will maintain and implement administrative and operating procedures (including an ability to recreate records evidencing Receivables and related Receivable Documentation and Loans and related Loan Documents in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary for collecting all Pool Assets (including records adequate to permit the daily identification of each Asset and all collections of and adjustments to each existing Asset).

(d) Extension or Amendment of Assets . Servicer will not (i) extend, or otherwise amend or modify, the principal payment terms under any Pool Asset, unless approved in writing in advance by the Required Purchasers, or (ii) otherwise waive or permit or agree to any deviation from the terms or conditions of any Pool Asset, except in the case of clause (ii) , in accordance with the Credit and Collection Policy. Servicer will not take, or cause to be taken, any action that reduces the amount payable of any Pool Asset or materially impairs the full and timely collection thereof unless (i) approved in writing in advance by the Required Purchasers or (ii) such reduction in the amount of such Pool Asset is paid to the Administrative Agent by the Servicer as a Deemed Collection in accordance with Section 3.2(a) .

(e) Audits and Visits . Servicer will, upon reasonable advance notice of not less than five (5) Business Days (or at any time following the occurrence of an Event of Termination that has not been waived in accordance with this Agreement), during regular business hours, permit the Administrative Agent and each Purchaser Agent and representatives thereof, at Servicer’s expense, (i) to examine and make abstracts from all books, records and documents (including computer tapes and disks) in its possession or under its control relating to Pool Assets and the other Seller Assets, including the Receivable

Documentation and Loan Documents, and (ii) to visit its offices and properties for the purpose of examining and auditing such materials described in clause (i) above, and, subject to the foregoing, to discuss matters relating to Pool Assets or its performance hereunder or under the related Receivable Documentation and Loan Documents with any of its officers having knowledge of such matters, in each case, at such reasonable times and as often as may reasonably be desired by the Administrative Agent or any such Purchaser Agent; provided , however , that unless an Event of Termination has occurred that has not been waived in accordance with this Agreement, Servicer shall be required to reimburse the Administrative Agent and the Purchaser Agent for the costs and expenses related to (x) only one such audit or visitation during any calendar year, (y) any audit following a material change in the systems of Seller or Servicer that occurs after any audit specified in clause (x) or (z) any follow-up audit that is required as a result of any audit specified in clauses (x) or (y) .

(f) Reporting Requirements . Servicer will provide to the Administrative Agent the following:

(i) as soon as available and in any event within sixty (60) days after the end of each of the first three quarterly accounting periods of CHS, a copy of the consolidated balance sheet of CHS and its Subsidiaries as of the last day of such period and the consolidated statement of income of CHS and its Subsidiaries for the fiscal quarter and for the fiscal year‑to‑date period then ended, prepared by CHS in accordance with GAAP and certified to by a Responsible Officer; provided that delivery within the time period specified above of copies of CHS’s quarterly reports on Form 10-Q prepared in compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.2(f)(i) ;

(ii) as soon as available and in any event within ninety (90) days after the end of each annual accounting period of CHS, a copy of the consolidated balance sheet of CHS and its Subsidiaries as of the last day of the period then ended and the consolidated statements of income and cash flows of CHS and its Subsidiaries for the period then ended, and accompanying notes thereto, each in reasonable detail showing in comparative form the figures for the previous fiscal year, accompanied by a statement of CHS (with, if necessary, qualifications related to changes in GAAP), to the effect that the financial statements have been prepared in accordance with GAAP and present fairly in accordance with GAAP the consolidated financial condition of CHS and its Subsidiaries as of the close of such fiscal year and the results of their operations and cash flows for the fiscal year then ended; provided that delivery within the time period specified above of copies of CHS’s annual report on Form 10-K prepared in compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.2(f)(ii) ;

(iii) at least 30 days prior to any change in Servicer’s name or jurisdiction of organization, a notice setting forth the new name or jurisdiction, as applicable, and the proposed effective date thereof;

(iv) such data, reports and information relating to the Pool Assets and the other Seller Assets reasonably requested by the Administrative Agent or any Purchaser Agent from time to time;

(v) promptly (and in no event later than five (5) Business Days) following knowledge or notice thereof, written notice in reasonable detail of any Adverse Claim or dispute asserted or claim made against a Pool Asset or any other Seller Assets;

(vi) promptly (and in no event later than five (5) Business Days) following knowledge or notice thereof, written notice in reasonable detail of the failure of any representation or warranty made or deemed to be made by Servicer under this Agreement or any other Transaction Document to be true and correct in any material respect when made;

(vii) promptly (and in no event later than three (3) Business Days) following knowledge or notice thereof, written notice in reasonable detail of the occurrence of any Event of Termination, Unmatured Event of Termination, Servicer Termination Event or Unmatured Servicer Termination Event and the action that the Servicer proposes to take with respect thereto;

(viii) at least fifteen (15) days prior to (i) the effectiveness of any change in or amendment to the Credit and Collection Policy, a description or, if available, a copy of the Credit and Collection Policy after giving effect to such change or amendment and a written notice (A) indicating such change or amendment and (B) if such proposed change or amendment would be reasonably likely to adversely affect the value, validity, enforceability or collectability of, or increase the days to pay or Dilution with respect to, any Pool Asset or decrease the credit quality of any newly created Asset, requesting the consent of the Required Purchasers thereto (which consent shall not be unreasonably withheld, conditioned or delayed) and (ii) Servicer making any material change or changes in the character of its business, written notice indicating such change and requesting the consent of the Required Purchasers thereto (which consent shall not be unreasonably withheld conditioned or delayed);

(ix) promptly (and in no event later than five (5) Business Days) following receipt thereof, a copy of all periodic statements regarding the Originator Collection Accounts from the applicable Account Banks; and

(x) as soon as possible and in any event within three (3) Business Days after knowledge or notice of the occurrence thereof, written notice of any matter that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change with respect to Servicer.

(g) Perform Terms . Servicer will duly perform and comply in all material respects with all terms under the Receivable Documentation and Loan Documents and

promptly inform the Administrative Agent and each Purchaser Agent of any breach or default by Servicer or any Account Debtor or Obligor of any of the terms thereof.

(h) Not Adversely Affect the Administrative Agent’s Rights . Servicer will refrain from any act or omission which, individually or in the aggregate, could reasonably be expected to prejudice, diminish or limit, in each case in any material respect, the Administrative Agent’s or any other Affected Party’s rights under or with respect to any of the Pool Assets, any other Seller Assets or this Agreement, except to the extent such act or omission is expressly permitted under this Agreement or any other Transaction Document.

(i) Compliance with Credit and Collection Policy . Servicer will comply with the Credit and Collection Policy in all material respects in connection with the enforcement and collection of Pool Assets and Related Security.

(j) Anti-Corruption Laws and Sanctions . Policies and procedures will be maintained and enforced by or on behalf of Servicer that are designed in good faith and in a commercially reasonable manner to promote and achieve compliance, in the reasonable judgment of Servicer, by Servicer and each of its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, in each case giving due regard to the nature of such Person’s business and activities.

(k) No Change in Business or Credit and Collection Policy or Organizational Documents . Servicer shall not make any change in (A) the character of its business without the prior written consent of the Required Purchasers or (B) the Credit and Collection Policy, which change would impair in any material respect the collectability, value, validity or enforceability of, or increase the days to pay or Dilution with respect to, any Pool Asset or otherwise have a Material Adverse Change with respect to Seller without the prior written consent of the Required Purchasers.

(l) Collection Accounts; Lockbox; Originator Specified Accounts . The Servicer shall (i) direct (x) each Account Debtor to pay all amounts owing under the Pool Receivables only to a Lockbox, a Collection Account, an Originator Specified Account or the Concentration Account and (y) each Obligor to pay all amounts owing under the Pool Loans only to a Seller Collection Account or the Concentration Account, (ii) not to change such payment instructions while any Pool Assets remain outstanding, (iii) take any and all other reasonable actions, including actions reasonably requested by the Administrative Agent, to ensure that all amounts owing under the Pool Assets will be deposited in accordance with clause (i) , (iv) hold in trust as the Affected Parties’ exclusive property and safeguard for the benefit of the Affected Parties all Collections and other amounts remitted or paid to the Seller or the Servicer (or any of their respective Affiliates) in respect of Pool Assets for prompt deposit into the Concentration Account in the manner set forth below, (v) deposit in a Collection Account all Collections remitted to an Originator Specified Account within two (2) days following receipt thereof and (vi) endorse, to the extent necessary, all checks or other instruments received in any Lockbox so that the same can be deposited in a Collection Account, in the form so received (with all necessary endorsements), on the first Business Day after the date of receipt thereof. The Servicer shall not deposit or otherwise credit, or

cause or permit to be so deposited or credited, to a Lockbox, a Collection Account or an Originator Specified Account any amounts other than Collections or proceeds thereof. The Servicer shall not terminate or permit the termination of any Collection Account, Originator Specified Account or Lockbox or any Account Agreement without the prior written consent of the Required Purchasers.

(m) Concentration Account . The Servicer shall deposit or cause to be deposited in the Concentration Account all Available Collections and other amounts received by Seller, Servicer or Originator (or any of their respective Affiliates) or deposited in a Lockbox, an Originator Specified Account or a Collection Account, in each case, with respect to Pool Assets or any other Seller Assets (whether such amounts were received by Seller directly or otherwise) without adjustment, setoff or deduction of any kind or nature no later than the Business Day preceding the Settlement Date immediately succeeding receipt thereof; provided that, so long as no Unmatured Event of Termination or Event of Termination exists, the Seller shall not be required to deposit Collections on the Business Day preceding the next Settlement Date in excess of the aggregate amount the Seller is required to pay on such Settlement Date in accordance with Section 3.1(d) . The Servicer shall take any and all other actions, including actions reasonably requested by the Administrative Agent, to ensure that all amounts owing under the Pool Assets and the other Seller Assets will be deposited in the Concentration Account in a timely manner pursuant to the terms of this Agreement. The Servicer shall not deposit or otherwise credit, or cause or permit to be so deposited or credited, to the Concentration Account any amounts other than Collections or proceeds thereof. The Servicer shall not terminate or permit the termination of the Concentration Account without the prior written consent of the Required Purchasers.

(n) Misdirected Payments . If the Servicer receives a misdirected payment of a Pool Asset from any Account Debtor or Obligor, the Servicer shall remit such funds to a Collection Account no later than two (2) Business Days following receipt thereof. Until remitted to a Collection Account, the Servicer shall hold such funds in trust as the Affected Parties’ exclusive property and safeguard such funds for the benefit of the Affected Parties.

(o) Tax Status . Servicer shall not take or cause any action to be taken that could result in Seller being treated as other than a “disregarded entity” within the meaning of U.S. Treasury Regulation § 301.7701-3.

(p) Transaction Documents . Without limiting any of Servicer’s covenants or agreements set forth herein or in any other Transaction Document, so long as Servicer is an Originator or Performance Guarantor, Servicer shall comply with each and every of its covenants and agreements as an Originator or Performance Guarantor, as applicable, under each Transaction Document to which it is a party in any capacity.

(q) Delivery of Custodian File and Obligor Notes .

(i) Not later than six (6) months following the Effective Date, the Servicer shall deliver or cause to be delivered directly to the Custodian for the benefit of the Affected Parties the Custodian File relating to each Effective Date Loan, and

shall cause the related Obligor Note for each Effective Date Loan to be (i) duly indorsed in blank with note transfer powers in the form set forth in the Custodian Agreement and (ii) delivered to the Custodian.

(ii) Not later than thirty (30) days following the date on which the Seller acquires an interest in any Pool Loan (other than any Effective Date Loan) pursuant to the Sale Agreement, the Servicer shall deliver or cause to be delivered directly to the Custodian for the benefit of the Affected Parties the Custodian File relating to such Pool Loan, and shall cause the related Obligor Note to be (i) duly indorsed in blank with note transfer powers in the form set forth in the Custodian Agreement and (ii) delivered to the Custodian.

(iii) Not later than thirty (30) days following any amendment or modification to any Loan Document, the Servicer shall deliver or cause to be delivered such Loan Document to the Custodian.

SECTION 7.3 Full Recourse . Notwithstanding any limitation on recourse contained herein or in any other Transaction Document: (i) Seller has the obligation to pay all Yield and other amounts due under Sections 3.1(c) and 3.4 or under Articles IV or XII (which obligation shall be full recourse general obligations of Seller), and (ii) all obligations of CHS so specified hereunder shall be full recourse general obligations of CHS.

SECTION 7.4 Corporate Separateness; Related Matters and Covenants . Each of Seller and Servicer covenant, until the Final Payout Date, as follows:

(a) Seller and Servicer shall assure that Seller, Servicer, CHS, Performance Guarantor and Originators (and each of their respective Affiliates) shall observe the applicable legal requirements for the recognition of Seller as a legal entity separate and apart from each of Originators, CHS, Servicer, Performance Guarantor and any of their respective Affiliates other than Seller, and comply with its organizational documents and assuring that each of the following is complied with:

(i) Seller shall maintain (or cause to be maintained) separate company records and books of account (each of which shall be sufficiently full and complete to permit a determination of Seller’s assets and liabilities and, in the case of such records and books of account, to permit a determination of the obligees thereon and the time for performance of each of Seller’s obligations) from those of Originators, CHS, Servicer, Performance Guarantor and their respective Affiliates (other than Seller);

(ii) except as otherwise permitted by this Agreement, Seller shall not commingle any of its assets or funds with those of Originators, CHS, Servicer, Performance Guarantor or any of their respective Affiliates (other than Seller);

(iii) at least one member of Seller’s Board of Managers shall be an Independent Manager and the limited liability company agreement of Seller shall

provide: (i) for the same definition of “Independent Manager” as used herein, (ii) that Seller’s Board of Managers shall not approve, or take any other action to cause the filing of, a voluntary bankruptcy petition with respect to Seller unless the Independent Manager shall approve the taking of such action in writing before the taking of such action and (iii) that the provisions required by clauses (i) and (ii) of this sentence cannot be amended except in accordance with this Agreement and without the prior written consent of the Independent Manager and the Required Purchasers;

(iv) the members and Board of Managers of Seller shall hold all regular and special meetings appropriate to authorize Seller’s actions. The members and managers of Seller may act from time to time by unanimous written consent or through one or more committees in accordance with Seller’s certificate of formation and its limited liability company agreement. Seller shall not take any Material Actions (as defined in its limited liability company agreement) without the consent of all its managers, including its Independent Manager. Appropriate minutes of all meetings of Seller’s members and managers (and committees thereof) shall be kept by Seller;

(v) Seller shall compensate its Independent Manager in accordance with Seller’s limited liability company agreement;

(vi) decisions with respect to Seller’s business and daily operations shall be independently made by Seller and shall not be dictated by Originators, CHS, Servicer or any of their respective Affiliates (except by CHS Capital as a member and/or manager of Seller in accordance with Seller’s limited liability company agreement); provided that Servicer shall administer, service and collect the Pool Assets as contemplated by the Transaction Documents;

(vii) no transactions shall be entered between Seller, on the one hand and any Originator, Servicer, CHS, Performance Guarantor or any Affiliate of any of them (other than Seller), on the other hand (other than as contemplated hereby and in the other Transaction Documents);

(viii) Seller shall act solely in its own name and through its own authorized managers, members, directors, officers and agents, except that, as a general matter, the Account Debtors and Obligors will not be informed in the first instance that Servicer is acting on behalf of Seller, that such Originator sold Assets to Seller or that Seller sold Assets to the Administrative Agent;

(ix) None of Originators, Servicer or any Affiliates of CHS shall be appointed as an agent of Seller, except in the capacity of servicer or subservicer hereunder;

(x) none of Servicer, Originators, CHS, Performance Guarantor or any of their respective Affiliates shall advance funds or credit to Seller; and none of

Servicer, Originators, CHS or any Affiliate of Servicer, Originators, Performance Guarantor or CHS will otherwise supply funds or credit to, or guarantee any obligation of, Seller except as expressly contemplated by the Transaction Documents;

(xi) Seller shall maintain a separate space which shall be physically separate from space occupied by Originators, Servicer, Performance Guarantor or any Affiliate of any Originator, Performance Guarantor or Servicer (but may be in a separate space occupied solely by Seller at the offices of CHS or any Affiliate of CHS) and shall be clearly identified as Seller’s space so it can be identified by outsiders;

(xii) other than as permitted by the Transaction Documents, Seller shall not guarantee, or otherwise become liable with respect to, any obligation of CHS, Originators, Servicer, Performance Guarantor or any Affiliate thereof (other than Seller);

(xiii) Seller shall at all times hold itself out to the public under Seller’s own name as a legal entity separate and distinct from its equity holders, members, managers, CHS, Originators, Servicer, Performance Guarantor and each of their respective Affiliates (other than Seller) (the foregoing to include Seller not using the letterhead or telephone number of any such Person);

(xiv) CHS shall prepare its financial statements in compliance with GAAP consistently applied;

(xv) if any of Seller, CHS, Servicer, Performance Guarantor or Originators shall provide any information with respect to the Pool Assets to any creditor of Seller, CHS, Servicer, Performance Guarantor or such Originator, Seller or Servicer, as the case may be, shall also provide (or cause such Originator to provide) to such creditor a notice indicating that the Collections relating to such Pool Assets are held in trust for the Affected Parties;

(xvi) to the extent required by GAAP, CHS’s financial statements shall disclose the separateness of Seller and that the Pool Assets that are owned by Seller are not available to creditors of CHS or its Affiliates other than Seller;

(xvii) any allocations of direct, indirect or overhead expenses for items shared between Seller and Originators, Servicer, CHS, Performance Guarantor or any of their respective Affiliates shall be made among Seller and Originators, Servicer, CHS, Performance Guarantor or any of their respective Affiliates to the extent practical on the basis of actual use or value of services rendered and otherwise on a basis reasonably related to actual use or the value of services rendered;

(xviii) Seller shall not be named, directly or indirectly, as a contingent beneficiary or loss payee on any insurance policy covering the Servicer, Originators,

CHS, Performance Guarantor or any Affiliate of any of them (other than Seller) other than insurance policies entered into in the ordinary course of business covering other Affiliates of any of the foregoing;

(xix) Seller shall maintain adequate capital in light of its contemplated business operations;

(xx) Seller shall generally maintain an arm’s-length relationship with Originators, Servicer, CHS, Performance Guarantor and their respective Affiliates and each transaction entered into with Seller shall be undertaken in good faith for a bona fide business purpose; and

(xxi) the Independent Manager shall not at any time serve as a trustee in bankruptcy for Seller, CHS, Originators, Performance Guarantor, Servicer or any of their respective Affiliates.

(b) Seller and Servicer agree that:

(i) Seller shall not (A) issue any security of any kind except certificates evidencing membership interests issued to CHS Capital in connection with its formation, or (B) incur, assume, guarantee or otherwise become directly or indirectly liable for or in respect of any Debt or obligation other than as expressly permitted by the Transaction Documents.

(ii) Seller shall not sell, pledge or dispose of any of its assets, except as permitted by, or as provided in, the Transaction Documents.

(iii) Seller shall not purchase any asset (or make any investment, by share purchase, loan or otherwise) except as permitted by, or as provided in, the Transaction Documents.

(iv) Seller shall not engage in any activity (whether or not pursued for gain or other pecuniary advantage) other than as permitted by the Transaction Documents.

(v) Seller shall not create, assume or suffer to exist any Adverse Claim on any of its assets other than any Adverse Claim created pursuant to the Transaction Documents.

(vi) Seller shall not make any payment, directly or indirectly, to, or for the account or benefit of, any owner of any security interest or equity interest in Seller or any Affiliate of any such owner (except, in each case, as expressly permitted by the Transaction Documents).

(vii) Seller shall not acquiesce in, or direct Servicer or any other agent to take, any action that is prohibited to be taken by Seller in clauses (i) through (vi) above.

(viii) Seller shall not have any employees.

(ix) Seller will provide not less than ten (10) Business Days’ prior written notice to the Administrative Agent of any removal or replacement of any person that is currently serving or is proposed to be appointed as an Independent Manager, such notice to include the identity of the proposed replacement Independent Manager, together with a certification that such replacement satisfies the requirements for an Independent Manager set forth in this Agreement and the limited liability company agreement of Seller.

(c) Neither Seller nor Servicer shall take any action or permit any of their respective Affiliates to take any action inconsistent with subsection (a) or (b) above.

ARTICLE VIII
ADMINISTRATION AND COLLECTION

SECTION 8.1 Designation of Servicer .

(a) CHS as Initial Servicer . The servicing, administering and collection of the Pool Assets on behalf of Seller, Administrative Agent, Purchaser Agents and Purchasers shall be conducted by the Person designated as Servicer hereunder (“ Servicer ”) from time to time in accordance with this Section 8.1 . Until Administrative Agent (with the consent, or acting at the direction of, the Required Purchasers) gives to CHS a Successor Notice (as defined in Section 8.1(b) ), CHS is hereby designated as, and hereby agrees to perform the duties and obligations of, Servicer pursuant to the terms hereof. Servicer shall receive the Servicing Fee, payable as described in Article III , for the performance of its duties hereunder.

(b) Successor Notice . In the event that a Servicer Termination Event has occurred and has not been waived in accordance with this Agreement, Administrative Agent (with the consent of, or at the direction of, the Required Purchasers) shall have the right, upon not less than five (5) Business Days’ notice to CHS and Seller, to designate a successor Servicer pursuant to the terms hereof (a “ Successor Notice ”). Upon effectiveness of a Successor Notice, CHS agrees that it shall terminate its activities as Servicer hereunder in a manner that Administrative Agent reasonably believes will facilitate the transition of the performance of such activities to the successor Servicer, and such successor Servicer shall assume each and all of CHS’s obligations to service and administer the Pool Assets, on the terms and subject to the conditions herein set forth, and CHS shall use commercially reasonable efforts to assist such successor Servicer in assuming such obligations.

(c) Subservicers; Subcontracts . Servicer may not subcontract with any Person that is not an Affiliate of Servicer (excluding Seller) or otherwise delegate any of its duties or obligations hereunder except with the prior written consent of Administrative Agent and each Purchaser Agent; provided that, notwithstanding any such designation, delegation or subcontract, Servicer shall remain primarily and directly liable for the performance of all the duties and obligations of Servicer pursuant to the terms hereof. For the avoidance of

doubt, the parties agree that Servicer may so subcontract with CHS Capital subject to the proviso in the previous sentence.

SECTION 8.2 Duties of Servicer . Seller, each Purchaser, each Purchaser Agent and Administrative Agent hereby appoints as its agent Servicer, as from time to time designated pursuant to Section 8.1 , to enforce its rights and interests in and under the Pool Assets and the other Seller Assets. Servicer shall take or cause to be taken all necessary and appropriate commercial servicing and collection activities in arranging the timely payment of amounts due and owing by any Account Debtor or Obligor (including the identification of the proceeds of the Pool Assets and related record keeping) all in accordance with Applicable Laws, with reasonable care and diligence, including diligently and faithfully performing all servicing and collection actions. In connection with its administration, collection and servicing obligations, Servicer will perform its duties under the Receivable Documentation related to the Pool Receivables and the Loan Documents related to the Pool Loans with the same care and applying the same policies as it applies to its own assets generally and would exercise and apply if it owned the Pool Assets and shall act in the best interest of the Affected Parties to maximize Collections.

(a) Allocation of Collections; Segregation . Servicer shall set aside and hold in trust Collections of Pool Assets in accordance with Section 1.3 . Servicer acknowledges and agrees that the Pool Assets have been sold and assigned to the Seller pursuant to the Sale Agreement and no portion of the Collections with respect thereto held by the Servicer prior to depositing into a Collection Account, an Originator Specified Account or the Concentration Account shall constitute property of the Servicer.

(b) Documents and Records . Other than the Custodian File held by the Custodian in accordance with the Custodian Agreement, Seller shall deliver to Servicer, and Servicer shall hold in trust for Seller, Administrative Agent, each Purchaser Agent, each Purchaser and each other Affected Party in accordance with their respective interests, all Records (and all original documents relating thereto) (and after the occurrence of any Event of Termination, shall deliver the same to Administrative Agent promptly upon Administrative Agent’s written request). Upon written request of Administrative Agent or any Purchaser Agent, Servicer shall promptly provide (or cause Custodian to provide) Administrative Agent and the Purchaser Agents with the location(s) of all Records (and all original documents relating thereto).

(c) Certain Duties of Servicer and Seller . Servicer shall, promptly following receipt of the collections of any Asset that is not a Pool Asset, a Related Asset or any other property included in the grant set forth in Section 9.1 , turn over such collection to the Person entitled to such collection.

(d) Termination . Servicer’s obligations as such under this Agreement shall terminate upon the Final Payout Date.

(e) Power of Attorney . Seller hereby appoints Servicer as the true and lawful attorney-in-fact of Seller, with full power of substitution, coupled with an interest, and hereby authorizes and empowers Servicer to take in Seller’s name and on behalf of Seller any and

all steps necessary or desirable, in the reasonable determination of Servicer, to collect all amounts due under any and all Pool Assets, including to make demands for any portion of Pool Assets remaining outstanding past its applicable due date, commence enforcement proceedings, exercise other powers under the Receivable Documentation and Loan Documents, endorse Seller’s name on checks and other instruments representing Collections, enforce Pool Receivables and the related Receivable Documentation, enforce Pool Loans and the related Loan Documents and take such other action and execute such other agreements, instruments and other documents in the name of Seller, to the extent necessary or desirable to accomplish the purposes hereof. Seller hereby appoints the Administrative Agent as the true and lawful attorney-in-fact of Seller, with full power of substitution, coupled with an interest, and hereby authorizes and empowers the Administrative Agent in the name and on behalf of Seller at any time following removal of CHS as Servicer pursuant to this Agreement or at any time following the occurrence of a Servicer Termination Event that has not been waived in accordance with this Agreement, to take such actions, and execute and deliver such documents, as the Administrative Agent deems necessary or advisable in connection with any Pool Assets (i) to obtain the full benefits of the Transaction Documents and the Pool Assets, (ii) to perfect each of the ownership and/or security interests in the Pool Assets and the other Seller Assets under the Transaction Documents, including to send a notice of each purchase, sale and pledge of the Pool Assets under the Transaction Documents to the applicable Account Debtor or Obligor, (iii) to communicate directly with the applicable Account Debtor or Obligor to collect any portion of a Pool Asset that remains outstanding past its applicable due date, (iv) to notify and require (x) Account Debtors to remit the proceeds of Pool Receivables directly to a Lockbox, an Originator Specified Account, a Collection Account or the Concentration Account and (y) Obligors to remit the proceeds of Pool Loans directly to a Seller Collection Account or the Concentration Account or (v) to make collection of and otherwise realize the benefits of any Pool Asset. At any time that CHS is no longer serving as Servicer hereunder or at any time following the occurrence of a Servicer Termination Event that has not been waived in accordance with this Agreement, the Administrative Agent shall have the right to bring suit, in the Administrative Agent’s or Seller’s name, and generally have all other rights of an owner and holder respecting any Pool Assets, including the right to accelerate or extend the time of payment, settle, compromise, release in whole or in part any amounts owing on any Pool Assets and issue credits in its own name or the name of Seller. At any time following removal of CHS as Servicer or at any time following the occurrence of a Servicer Termination Event that has not been waived in accordance with this Agreement, the Administrative Agent may endorse or sign the Administrative Agent’s or Seller’s name on any checks or other instruments with respect to any Pool Assets or the goods covered thereby. This power of attorney, being coupled with an interest, is irrevocable and shall not expire until the Final Payout Date.

(f) Resignation of CHS as Servicer . CHS shall not resign in its capacity as Servicer hereunder without the prior written consent of Administrative Agent and each Purchaser Agent, which consent shall be given or withheld in the sole and absolute discretion of Administrative Agent and each Purchaser Agent.

SECTION 8.3 Rights of Administrative Agent . In addition to all of its other rights herein including under Articles IX and X , under the other Transaction Documents or at law or in equity, Administrative Agent shall have the other following rights set forth in this Section 8.3 :

(a) Notice to Account Debtors and Obligors . At any time after the occurrence of any Event of Termination, Servicer shall (on behalf of Seller), at Administrative Agent’s or any Purchaser Agent’s request and at Seller’s expense, give notice of Administrative Agent’s ownership and security interest in the Pool Assets to each applicable Account Debtor or Obligor and instruct them that payments on the Pool Assets will only be effective if made to, or as otherwise instructed in writing by, Administrative Agent.

(b) [Reserved] .

(c) Other Rights . At any time after (i) the occurrence of an Event of Termination that has not been waived in accordance with this Agreement or (ii) the commencement of the Liquidation Period, Servicer shall (on behalf of Seller), (A) at Administrative Agent’s request and at Seller’s expense, assemble all of the Records (other than the Custodian File held by the Custodian pursuant to the Custodian Agreement) and deliver such Records to or at the direction of Administrative Agent and (B) at the request of Administrative Agent or its designee, exercise or enforce any of their respective rights hereunder, under any other Transaction Document, under any Pool Asset or under any other Seller Assets (to the extent permitted hereunder or thereunder). Without limiting the generality of the foregoing, each of Servicer and Seller shall upon the request of Administrative Agent or its designee and at Seller’s expense:

(I) authorize, execute (if required) and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate;

(II) make a notation in its books and records to indicate that the Pool Assets have been transferred, sold and pledged in accordance with this Agreement; and

(III) following the occurrence of an Event of Termination that has not been waived in accordance with this Agreement, mark conspicuously all Receivable Documentation evidencing Pool Receivables and all Loan Documents evidencing Pool Loans with a legend reasonably acceptable to Administrative Agent evidencing that the Pool Assets have been sold or otherwise pledged pursuant to this Agreement.

(d) Additional Financing Statements; Performance by Administrative Agent . Seller hereby authorizes Administrative Agent or its designee to file one or more financing or continuation statements, and amendments thereto and assignments thereof, or any similar instruments in any relevant jurisdiction relative to all or any of the Pool Assets and the other Seller Assets now existing or hereafter arising in the name of Seller. Seller agrees that an “all assets” or similar filing against it may be filed for the purposes hereof and to perfect the security interest and transfers created hereby. If Seller fails to perform any of its

agreements or obligations under this Agreement or any other Transaction Document, Administrative Agent or its designee may (but shall not be required to) itself perform, or cause performance of, such agreement or obligation, and the expenses of Administrative Agent or its designee incurred in connection therewith shall be payable by Seller as provided in Section 13.6 .

SECTION 8.4 Responsibilities of Servicer . Anything herein to the contrary notwithstanding:

(a) Contracts . Servicer shall, in accordance with the Credit and Collection Policy, Applicable Law and the terms of this Agreement, perform all of its obligations under the Records, so long as it is an Affiliate of Seller, to the same extent as if the Asset Portfolio had not been sold hereunder and the exercise by Administrative Agent or its designee of its rights hereunder shall not relieve Servicer from such obligations.

(b) Limitation of Liability . None of Administrative Agent, any Purchaser or any Purchaser Agent shall have any obligation or liability with respect to any Pool Asset or Related Assets related thereto, nor shall any of them be obligated to perform any of the obligations of Servicer or Seller thereunder.

SECTION 8.5 Further Action Evidencing Purchases and Reinvestments . Seller agrees that from time to time, at its expense, it shall (or cause Servicer to) promptly execute and deliver all further instruments and documents, and take all further actions, that Administrative Agent or its designee may reasonably request or that are necessary in order to perfect, protect or more fully evidence the transactions contemplated by the other Transaction Documents, the Purchases hereunder and the resulting Asset Portfolio.

SECTION 8.6 Application of Collections . The Servicer shall be responsible for promptly identifying, matching, applying and reconciling any payments received in the Collection Accounts or Originator Specified Accounts with the Asset associated with such payment.

SECTION 8.7 Funds and Documents to be held in Trust . Whenever this Agreement or any other Transaction Document requires the Seller or the Servicer to hold funds or documents in trust for the Administrative Agent, it is understood and agreed that CHS, Seller or Servicer is not required to establish trust accounts or arrangements with independent trustees, custodians or third parties, but may hold such funds for the Administrative Agent in Originator Collection Accounts which may be commingled with other deposit account maintained by CHS, Seller or Servicer, and may hold such documents for safekeeping for the Administrative Agent in such manner as CHS, Seller of Servicer holds its own documents in safekeeping; provided that, for the avoidance of doubt, (x) Seller, CHS and the Servicer shall not be permitted to deposit any funds in a Seller Collection Account or the Concentration Account other than Collections and proceeds thereof and (y) neither the Seller Collection Accounts nor the Concentration Account may be commingled with any other deposit accounts.

ARTICLE IX
SECURITY INTEREST

SECTION 9.1 Grant of Security Interest . To secure all obligations of Seller arising in connection with this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, including, all Indemnified Amounts, payments on account of Collections received or deemed to be received and fees and expenses, in each case pro rata according to the respective amounts thereof, Seller hereby assigns and pledges to Administrative Agent, as collateral trustee, for the benefit of the Affected Parties, and hereby grants to Administrative Agent, as collateral trustee, for the benefit of the Affected Parties, a security interest in, and general lien on all of the following: all of Seller’s right, title and interest now or hereafter existing in, to and under all of Seller’s assets, whether now owned or hereafter acquired, and wherever located (whether or not in the possession or control of Seller), including all of its right, title and interest in, to and under each of the following, in each case, whether now owned or existing hereafter arising, acquired, or originated, or in which Seller now or hereafter has any rights, and wherever located (whether or not in the possession or control of Seller) and all proceeds of any of the foregoing (collectively, the “ Seller Assets ”): (I) all Pool Assets; (II) the Related Assets; (III) the Collections; (IV) all Accounts; (V) all Chattel Paper; (VI) all Contracts; (VII) all Deposit Accounts; (VIII) all Documents; (IX) all Payment Intangibles; (X) all General Intangibles; (XI) all Instruments; (XII) all Inventory; (XIII) all Investment Property; (XIV) all letter of credit rights and supporting obligations; (XV) the Sale Agreement and all rights and remedies of Seller thereunder; (XVI) the Custodian Agreement and all rights and remedies of the Administrative Agent thereunder; (XVII) all other assets in the Asset Portfolio; (XVIII) all rights, interests, remedies and privileges of Seller relating to any of the foregoing (including the right to sue for past, present or future infringement of any or all of the foregoing); (XIX) each Lockbox; and (XX) to the extent not otherwise included, all products and Proceeds (each capitalized term in clauses IV through XX , as defined in the UCC) of each of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing (including insurance proceeds), and all distributions (whether in money, securities or other property) and collections from or with respect to any of the foregoing.

Seller hereby authorizes the filing of financing statements, including those filed under Section 8.3(d) , describing the collateral covered thereby as “all of debtor’s personal property and assets” or words to that effect, notwithstanding that such wording may be broader in scope than the collateral described in this Section 9.1 . This Agreement shall constitute a security agreement under Applicable Law.

SECTION 9.2 Further Assurances . The provisions of Section 8.5 shall apply to the security interest granted, and to the assignment effected, under Section 9.1 as well as to the Purchases, Reinvestments and the Asset Portfolio hereunder.

SECTION 9.3 Remedies; Waiver . After the occurrence and during the continuance of an Event of Termination, Administrative Agent, on behalf of the Affected Parties, shall have, with respect to the Seller Assets granted pursuant to Section 9.1 , and in addition to all other rights and remedies available to any Affected Party under this Agreement and the other Transaction Documents

or other Applicable Law, all the rights and remedies of a secured party under the UCC. To the fullest extent it may lawfully so agree, Seller agrees that it will not at any time insist upon, claim, plead, or take any benefit or advantage of any appraisal, valuation, stay, extension, moratorium, redemption or similar law now or hereafter in force in order to prevent, delay, or hinder the enforcement hereof or the absolute sale of any part of the Seller Assets; Seller for itself and all who claim through it, so far as it or they now or hereafter lawfully may do so, hereby waives the benefit of all such laws and all right to have the Seller Assets marshalled upon any foreclosure hereof, and agrees that any court having jurisdiction to foreclose this Agreement may order the sale of the Seller Assets in its entirety. Without limiting the generality of the foregoing, Seller hereby waives and releases any and all right to require Administrative Agent to collect any of such obligations from any specific item or items of the Seller Assets or from any other party liable as guarantor or in any other manner in respect of any of such obligations or from any collateral (including the Seller Assets) for any of such obligations.

ARTICLE X
EVENTS OF DEFAULT

SECTION 10.1 Events of Termination . The following events shall be “ Events of Termination ” hereunder:

(a) (i) Seller or Servicer shall fail to be in compliance with any of its covenants or obligations set forth in Section 3.1(a) , 7.1(d) , 7.1(f) , 7.1(g) , 7.1(o) , 7.1(u) , 7.1(w) , 7.1(aa)(i) , 7.2(e) , 7.2(f) , 7.2(q)(i) , 7.4(a)(iii) or 7.4(b)(ix) of this Agreement or (ii) Seller, any Originator, CHS or Servicer shall otherwise fail to be in compliance with any of its other covenants and obligations under this Agreement or any other Transaction Document (other than described in clause (i) hereof or clause (b) below), and such failure in this clause (ii) , solely to the extent capable of cure, shall continue unremedied for a period of at least ten (10) Business Days after the earlier of a Responsible Officer having actual knowledge of such failure or notice thereof given to Seller or the Servicer by the Administrative Agent or any other Affected Party;

(b) Seller, Servicer, Performance Guarantor or any Originator shall fail to make any payment or deposit or transfer of monies to be made by it hereunder or under any other Transaction Document as and when due and such failure is not remedied within one (1) Business Day;

(c) CHS shall fail to perform its duties and obligations as Servicer hereunder or under any other Transaction Document and such failure is not remedied within one (1) Business Day;

(d) CHS shall resign as Servicer other than in accordance with this Agreement;

(e) (i) an Insolvency Event shall have occurred with respect to Seller, any Originator, Performance Guarantor or (ii) Servicer, any Originator or Seller shall not be Solvent;

(f) any representation or warranty made or deemed to be made by Seller, Servicer, Performance Guarantor or any Originator in this Agreement, any Information Package or any other Transaction Document shall fail to be true and correct in any material respect, as of the date made or, in the case of any representation or warranty which speaks as to a particular date or period, as of that particular date or period;

(g) Administrative Agent shall fail to have a valid first priority perfected security interest in the Concentration Account and the Collection Accounts (and all amounts and instruments from time to time on deposit therein);

(h) Seller shall be required to register as an “investment company” within the meaning of the Investment Company Act;

(i) a Servicer Termination Event shall have occurred;

(j) a Change of Control shall have occurred;

(k) Seller shall fail to pay in full all of its obligations to Administrative Agent, the Purchaser Agents and Purchasers hereunder and under the other Transaction Documents on or prior to the Legal Final Settlement Date.

(l) there shall have occurred any event which materially adversely impairs the collectability, value, validity or enforceability of, or increases the days to pay or Dilution with respect to, the Pool Assets generally or any material portion thereof;

(m) this Agreement or any security interest granted pursuant to this Agreement or any other Transaction Document shall for any reason cease to create, or for any reason cease to be, a valid and enforceable first priority perfected security interest in favor of the Administrative Agent with respect to the Pool Assets and Related Assets and, in either case, free and clear of any Adverse Claim;

(n) any Transaction Document shall, in whole or in part, except pursuant to the terms thereof, terminate, cease to be effective or cease to be a legally valid, binding and enforceable obligation of any party thereto (other than any Affected Party) or any such party shall, directly or indirectly, contest in any manner the effectiveness, validity, binding nature or enforceability of such Transaction Document;

(o) in the reasonable opinion of the Required Purchasers, there shall have occurred any Material Adverse Change with respect to Servicer, Seller, any Originator or Performance Guarantor;

(p) For the Receivables Pool, (i) the average of the Default Ratio (Receivables) for the three preceding Settlement Periods shall at any time exceed 1.0%, (ii) the average of the Dilution Ratios for the three preceding Settlement Periods shall at any time exceed 5.0% or (iii) the average of the Days Sales Outstanding for the three preceding Settlement Periods shall at any time exceed 25.0 days;

(q) For the Loan Pool, the average of the Default Ratio (Loans) for the three preceding Settlement Periods shall at any time exceed 3.0%; or the Monthly Loss Ratio (Loans) for the three preceding Settlement Periods shall at any time exceed 1.0%; or the Portfolio Weighted Average Loan Rating Factor for the three preceding Settlement Periods shall at any time be less than 3.25%;

(r) on any day, (i) the Total Investment exceeds the Purchasers’ Total Commitment, or (ii) the Total Investment exceeds the sum of the Receivables Investment Base and the Loan Investment Base, in each case, unless cured within two (2) Business Days;

(s) any Originator, Performance Guarantor or Servicer, or any of their respective Subsidiaries (i) fails to make payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) in respect of any indebtedness for borrowed money (other than indebtedness arising under any Transaction Document) aggregating in excess of $100,000,000 which was incurred, assumed or guaranteed by such Person, or (ii) fails to perform or observe any other condition or covenant, or any other event shall occur or condition shall exist, under any indenture, agreement or other instrument under which any indebtedness for borrowed money (other than indebtedness arising under any Transaction Document) aggregating in excess of $100,000,000 was incurred, assumed or guaranteed by such Person, if the effect of such failure, event or condition is to cause, or to permit the holder or holders or beneficiary or beneficiaries of such indebtedness (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, such indebtedness to be declared to be due and payable prior to its stated maturity, or such guaranty to become payable, without regard to whether such holder or holders, beneficiary or beneficiaries or such other Person shall have exercised or waived their right to do so;

(t) one or more judgments, orders, decrees or arbitration award is entered against any Originator, Performance Guarantor or Servicer, involving in the aggregate a liability (to the extent not covered by insurance from a Solvent insurer and as to which the insurer does not dispute coverage), as to any single or related series of transactions, incidents or conditions, of $25,000,000 or more, and the same shall remain undischarged, unvacated and unstayed pending appeal for a period of sixty (60) consecutive days after the entry thereof (or such longer period as may be permitted by Applicable Law or court order to obtain relief from payment of or to pay such judgments, orders, decrees or awards);

(u) one or more judgments, orders, decrees or arbitration awards is entered against Seller involving in the aggregate a liability of $15,775 or more, other than any judgment against Seller with respect to any taxes that are owing by Seller to any Governmental Authority that are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP, that remain undischarged, unvacated and unstayed pending appeal for a period of sixty (60) consecutive days after the entry thereof (or such longer period as may be permitted by Applicable Law or court order to obtain relief from payment thereof);

(v) (i) an ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which would materially adversely affect the financial condition or results of operations of Seller, Servicer, any Originator, Performance Guarantor and their Subsidiaries, taken as a whole, or (ii) Seller, Servicer, any Originator, Performance Guarantor or any ERISA Affiliate shall fail to pay when due under Section 412 of the Code any contribution to a Pension Plan in excess of $25,000,000 and such failure shall continue for 30 days; or

(w) the Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the Code with regard to any assets of Seller, Servicer or Originators and such lien shall not have been released within five (5) Business Days, or the PBGC shall file notice of a lien pursuant to Section 4068 of ERISA with regard to any of the assets of Seller, Servicer or Originators and such lien shall not have been released within five Business Days.

SECTION 10.2 Remedies .

(a) Optional Liquidation . Upon, or any time after, the occurrence of an Event of Termination (other than an Event of Termination described in Section 10.1(e) ), Administrative Agent shall, at the request, or may with the consent, of the Required Purchasers, by notice to Seller and Servicer declare the Purchase Termination Date to have occurred and the Liquidation Period to have commenced and shall have all of the remedies set forth in Section 9.3 or otherwise herein or in equity or at law.

(b) Automatic Liquidation . Upon the occurrence of an Event of Termination described in Section 10.1(e) , the Purchase Termination Date shall occur and the Liquidation Period shall commence automatically.

(c) Remedies . Upon, or at any time after, the declaration or automatic occurrence of the Purchase Termination Date pursuant to this Section 10.2 , no Purchases or Reinvestments thereafter will be made. Upon the declaration or automatic occurrence of the Purchase Termination Date pursuant to this Section 10.2 , Administrative Agent, on behalf of the Affected Parties, shall have, in addition to all other rights and remedies under this Agreement, any other Transaction Document or otherwise, (i) all other rights and remedies provided under the UCC of each applicable jurisdiction and other Applicable Laws (including all the rights and remedies of a secured party under the UCC (including the right to sell any or all of the Seller Assets subject hereto)) and (ii) all rights and remedies with respect to the Seller Assets granted pursuant to Section 9.1 , all of which rights shall be cumulative.

(d) Specific Remedies . (23) Without limiting Section 10.2(c) or any other provision herein or in any other Transaction Document, the parties hereto agree that the terms of this Section 10.2(d) are agreed upon in accordance with Section 9-603 of the New York UCC, that they do not believe the terms of this Section 10.2(d) to be “manifestly unreasonable” for purposes of Section 9-603 of the New York UCC, and that compliance therewith shall constitute a “commercially reasonable” disposition under Section 9-610 of the New York UCC, and further agree as follows:

(i) After the occurrence of the Purchase Termination Date pursuant to Section 10.2(a) or Section 10.2(b) , Administrative Agent, on behalf of the Affected Parties, shall have all rights, remedies and recourse granted in any Transaction Document and any other instrument executed to provide security for or in connection with the Aggregate Unpaids or existing at common law or equity (including specifically those granted by the New York UCC and the UCC of any other state which governs the creation or perfection (and the effect thereof) of any security interest in the Seller Assets), and such rights and remedies: (A) shall be cumulative and concurrent; (B) may be pursued separately, successively or concurrently against Seller, any Originator and Performance Guarantor and any other party obligated under the Transaction Documents, or any of such Seller Assets, or any other security for the Aggregate Unpaids, or any of them, at the sole discretion of Administrative Agent, on behalf of the Affected Parties; (C) may be exercised as often as occasion therefor shall arise, it being agreed by Seller, Servicer, each Originator, Performance Guarantor and any other party obligated under the Transaction Documents, or any of such Seller Assets, or any other security for the Aggregate Unpaids, or any of them, that the exercise or failure to exercise any of same shall in no event be construed as a waiver or release thereof or of any other right, remedy or recourse; and (D) are intended to be and shall be, non exclusive. For the avoidance of doubt, with respect to any disposition of the Seller Assets or any part thereof (including any purchase by Administrative Agent, any Affected Party, or any Affiliate of any of them) in accordance with the terms of this Section 10.2 for consideration which is insufficient, after payment of all related costs and expenses of every kind, to satisfy the Aggregate Unpaids, (1) such disposition shall not act as, and shall not be deemed to be, a waiver of any rights by Administrative Agent or the Affected Parties and Administrative Agent on behalf of the Affected Parties shall have a claim for such deficiency and (2) Administrative Agent shall not be liable or responsible for any such deficiency.

ARTICLE XI
PURCHASER AGENTS; ADMINISTRATIVE AGENT;
CERTAIN RELATED MATTERS

SECTION 11.1 Authorization and Action of Program Administrator . Pursuant to its related Program Administration Agreement, each of Nieuw Amsterdam and Victory has appointed and authorized its related Program Administrator (or its respective designees) to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to its related Program Administrator by the terms hereof, together with such powers as are reasonably incidental thereto.

SECTION 11.2 Limited Liability of Purchasers, Purchaser Agents and Administrative Agent . The obligations of Administrative Agent, each Program Administrator, each Purchaser, each Purchaser Agent, each Enhancement Provider, each Liquidity Provider and each agent for any Purchaser under the Transaction Documents are solely the corporate obligations of such Person. Except with respect to any claim arising out of the willful misconduct or gross negligence of such

Person (including with respect to the servicing, administering or collecting Pool Assets by such Person as successor Servicer pursuant to Section 8.1 ), no claim may be made by CHS, Seller, Servicer, Performance Guarantor or any Originator against any Program Administrator, Administrative Agent, any Purchaser, any Purchaser Agent, any Enhancement Provider, any Liquidity Provider or any agent for any Purchaser or their respective Affiliates, directors, members, managers, officers, employees, attorneys or agents, including Global Securitization Services, LLC, any Program Administrator, BTMU and Rabobank, for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement or any other Transaction Document, or any act, omission or event occurring in connection therewith; and each of Seller and CHS hereby waives, releases, and agrees not to sue upon any claim for any such damages not expressly permitted by this Section 11.2 , whether or not accrued and whether or not known or suspected to exist in its favor. The parties agree that (a) BTMU shall have no obligation, in its capacity as a Program Administrator for Victory or otherwise to take any actions under this Agreement or any other Transaction Document if BTMU is relieved of its obligations as a Program Administrator and (b) Rabobank shall have no obligation, in its capacity as a Program Administrator for Nieuw Amsterdam or otherwise to take any actions under this Agreement or any other Transaction Document if Rabobank is relieved of its obligations as a Program Administrator. Notwithstanding any provision of this Agreement or any other Transaction Document to the contrary (i) in no event shall Administrative Agent or any Purchaser Agent ever be required to take any action which exposes it to personal liability or which is contrary to the provision of any Transaction Document or Applicable Law and (ii) neither Administrative Agent nor any Purchaser Agent shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any party hereto or any other Person, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of Administrative Agent or any Purchaser Agent shall be read into this Agreement or the other Transaction Documents or otherwise exist against Administrative Agent or any Purchaser Agent. In performing its functions and duties hereunder, Administrative Agent shall act solely as the agent of the Purchasers, the Purchaser Agents and the other Affected Parties, as applicable, and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for Seller, any Originator, Performance Guarantor, CHS or any other Person.

SECTION 11.3 Authorization and Action of each Purchaser Agent . By its execution hereof, in the case of each Conduit Purchaser and Committed Purchaser, and by accepting the benefits hereof, each Enhancement Provider and Liquidity Provider, each such party hereby designates and appoints its related Purchaser Agent to take such action as agent on its behalf and to exercise such powers as are delegated to such Purchaser Agent by the terms hereof, together with such powers as are reasonably incidental thereto. Each Purchaser Agent reserves the right, in its sole discretion, to take any actions and exercise any rights or remedies, in each case, authorized or provided for under this Agreement or any other Transaction Document and any related agreements and documents.

SECTION 11.4 Authorization and Action of Administrative Agent . By its execution hereof, in the case of each Conduit Purchaser, Committed Purchaser and Purchaser Agent, each such party hereby designates and appoints BTMU as the Administrative Agent to take such action

as agent on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto. The Administrative Agent reserves the right, in its sole discretion, to take any actions and exercise any rights or remedies, in each case, authorized or provided for under this Agreement or any other Transaction Document and any related agreements and documents.

SECTION 11.5 Delegation of Duties of each Purchaser Agent . Each Purchaser Agent may execute any of its duties through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Purchaser Agent shall be responsible to any Purchaser in its Purchaser Group for the negligence or misconduct of any agents or attorneys in fact selected by it with reasonable care.

SECTION 11.6 Delegation of Duties of Administrative Agent . Administrative Agent may execute any of its duties through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Administrative Agent shall not be responsible to any Purchaser, any Purchaser Agent or any other Person for the negligence or misconduct of any agents or attorneys in fact selected by it with reasonable care.

SECTION 11.7 Successor Agent . The Administrative Agent may, upon at least 30 days’ notice to the Seller and each Purchaser Agent, resign as Administrative Agent. Such resignation shall not become effective until a successor agent (i) is appointed by the Required Purchasers and, so long as no Event of Termination has occurred and is continuing, the Seller and (ii) has accepted such appointment. Upon such acceptance of its appointment as Administrative Agent hereunder by a successor agent, such successor agent shall succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Transaction Documents.

SECTION 11.8 Indemnification . Each Committed Purchaser shall indemnify and hold harmless the Administrative Agent and its officers, directors, employees, representatives and agents (to the extent not reimbursed by the Seller or the Servicer and without limiting the obligation of the Seller or the Servicer to do so), ratably in accordance with its Commitment from and against any and all liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses and disbursements of any kind whatsoever (including in connection with any investigative or threatened proceeding, whether or not the Administrative Agent or such Person is designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Administrative Agent for such Person as a result of, or related to, any of the transactions contemplated by the Transaction Documents or the execution, delivery or performance of the Transaction Documents or any other document furnished in connection therewith (but excluding any such liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses or disbursements to the extent resulting solely from the gross negligence or willful misconduct of the Administrative Agent or such Person as finally determined by a court of competent jurisdiction).

SECTION 11.9 Reliance, etc. Without limiting the generality of Section 11.2 , each of any Program Administrator, Administrative Agent, any Purchaser Agent, any Enhancement Provider and any Liquidity Provider (a) may consult with legal counsel (including counsel for Seller), independent certified public accountants and other experts selected by it and shall not be liable for

any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (b) makes no warranty or representation to any Purchaser or any other holder of any interest in Pool Assets and shall not be responsible to any Purchaser or any such other holder for any statements, warranties or representations made by other Persons in or in connection with any Transaction Document; (c) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Transaction Document on the part of Seller or to inspect the property (including the books and records) of Seller; (d) shall not be responsible to any Purchaser or any other holder of any interest in the Asset Portfolio for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Transaction Document; and (e) shall incur no liability under or in respect of this Agreement or any other Transaction Document by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by facsimile or telex) believed by it to be genuine and signed or sent by the proper party or parties.

SECTION 11.10 Purchasers and Affiliates . Any Purchaser, any Purchaser Agent, any Program Administrator, Administrative Agent and any of their respective Affiliates may generally engage in any kind of business with Seller, each Originator, Servicer, CHS, Performance Guarantor or any Account Debtor or Obligor, any of their respective Affiliates and any Person who may do business with or own securities of Seller, each Originator, Servicer, CHS, Performance Guarantor or any Account Debtor or Obligor or any of their respective Affiliates, all as if it was not a Purchaser, a Purchaser Agent, a Program Administrator or Administrative Agent hereunder, and without any duty to account therefor to any Purchaser or any other holder of an interest in Pool Assets.

SECTION 11.11 Sharing of Recoveries . Each Purchaser agrees that if it receives any recovery, through set-off, judicial action or otherwise, on any amount payable or recoverable hereunder in a greater proportion than should have been received hereunder or otherwise inconsistent with the provisions hereof, then the recipient of such recovery shall purchase for cash an interest in amounts owing to the other Purchasers (as return of such Purchaser Group’s Purchaser Group Investment or otherwise), without representation or warranty except for the representation and warranty that such interest is being sold by each such other Purchaser free and clear of any lien created or granted by such other Purchaser, in the amount necessary to create proportional participation by the Purchaser in such recovery. If all or any portion of such amount is thereafter recovered from the recipient, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

SECTION 11.12 Non-Reliance on Administrative Agent, Purchaser Agents and Other Purchasers . Each Purchaser expressly acknowledges that none of the Administrative Agent, the Purchaser Agents nor any of their respective officers, directors, members, partners, certificateholders, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent, or any Purchaser Agent hereafter taken, including any review of the affairs of the Seller, Servicer, Performance Guarantor or each Originator, shall be deemed to constitute any representation or warranty by the Administrative Agent or such Purchaser Agent, as applicable. Each Purchaser represents and warrants to the Administrative Agent and the Purchaser Agents that, independently and without reliance upon the Administrative Agent, Purchaser Agents or any other Purchaser and based on such documents and

information as it has deemed appropriate, it has made and will continue to make its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of the Seller, Servicer, Performance Guarantor or each Originator, and the Assets and its own decision to enter into this Agreement and to take, or omit, action under any Transaction Document. Except for items specifically required to be delivered hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Purchaser Agent with any information concerning the Seller, Servicer, Performance Guarantor or each Originator or any of their Affiliates that comes into the possession of the Administrative Agent or any of its officers, directors, members, partners, certificateholders, employees, agents, attorneys-in-fact or Affiliates.

ARTICLE XII
INDEMNIFICATION

SECTION 12.1 Indemnities by Seller .

(a) General Indemnity . Without limiting any other rights which any such Person may have hereunder or under Applicable Law, but subject to Sections 12.1(b) and 13.5 , Seller agrees to indemnify and hold harmless Administrative Agent, each Program Administrator, each Purchaser, each Purchaser Agent, each Enhancement Provider, each Liquidity Provider, each other Affected Party, any sub-agent of Administrative Agent, any Purchaser Agent, any assignee or successor of any of the foregoing and each of their respective Affiliates, and all directors, members, managers, directors, shareholders, officers, employees and attorneys or agents of any of the foregoing (each an “ Indemnified Party ”), forthwith on demand, from and against any and all damages, losses, claims, liabilities and related costs and expenses (including all filing fees), including reasonable attorneys’, consultants’ and accountants’ fees and disbursements but excluding all Excluded Taxes other than any amounts reimbursable pursuant to Section 4.3 (all of the foregoing being collectively referred to as “ Indemnified Amounts ”) awarded against or incurred by any of them arising out of, relating to or in connection with the Transaction Documents, any of the transactions contemplated thereby, or the ownership, maintenance or purchasing, directly or indirectly, of the Asset Portfolio (or any part thereof) or in respect of or related to any Seller Assets or otherwise arising out of or relating to or resulting from the actions or inactions of Seller, any Originator, Servicer, CHS, Performance Guarantor or any other party to a Transaction Document; provided , however , notwithstanding anything to the contrary in this Article XII , in all events there shall be excluded from the foregoing indemnification any damages, claims, losses, costs, expenses, liabilities or other Indemnified Amounts to the extent resulting from (x) the gross negligence or willful misconduct of an Indemnified Party as determined in a final non-appealable judgment by a court of competent jurisdiction or (y) the failure of an Account Debtor or Obligor to pay any sum due under its Pool Assets by reason of the financial or credit condition of such Account Debtor or Obligor (including the occurrence of an Insolvency Event with respect to the applicable Account Debtor or Obligor). Without limiting the foregoing, Seller shall indemnify, subject to the express limitations set forth in this Section 12.1 , and hold harmless each Indemnified Party for any and all Indemnified Amounts arising out of, relating to or resulting from:

(i) Any Pool Asset treated as or represented by Seller or Servicer to be an Eligible Receivable or Eligible Loan, as applicable, which is not at the applicable time an Eligible Receivable or Eligible Loan, as applicable;

(ii) the transfer by Seller or any Originator of any interest in any Pool Asset other than the transfer of any Pool Asset and Related Assets to Administrative Agent and any Purchaser pursuant to this Agreement, to Administrative Agent and to Seller pursuant to the Sale Agreement and the grant of an ownership interest and/or security interest to Administrative Agent pursuant to this Agreement and to Seller pursuant to the Sale Agreement;

(iii) any representation or warranty made by Seller, CHS or any other party to a Transaction Document (other than such Indemnified Party) (or any of their respective officers or Affiliates) under or in connection with any Transaction Document, any Information Package or any other information or report delivered by or on behalf of Seller pursuant hereto, which shall have been untrue, false or incorrect when made or deemed made;

(iv) the failure of Seller, CHS or any other party to a Transaction Document (other than such Indemnified Party) to comply with the terms of any Transaction Document or any Applicable Law (including with respect to any Pool Asset or Related Assets), or the nonconformity of any Pool Asset or Related Assets with any such Applicable Law;

(v) the lack of an enforceable ownership interest, or a first priority perfected security interest, in the Pool Assets (and all Related Assets) against all Persons (including any bankruptcy trustee or similar Person);

(vi) the failure to file, or any delay in filing of, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or under any other Applicable Laws with respect to any Pool Asset whether at the time of any Purchase or Reinvestment or at any time thereafter;

(vii) any dispute, claim, offset or defense (other than discharge in bankruptcy) of the Account Debtor or Obligor, as applicable, to the payment of any Pool Asset in, or purporting to be in, the Asset Pool (including a defense based on such (x) Pool Receivable’s or the related Receivable Documentation’s or (y) Pool Loan’s or the related Loan Documents’ not being a legal, valid and binding obligation of such Account Debtor or Obligor, as applicable, enforceable against it in accordance with its terms) or any other claim resulting from the sale of the merchandise or services related to such Pool Asset or the furnishing or failure to furnish such merchandise or services;

(viii) any suit or claim related to the Pool Assets or any Transaction Document (including any products liability or environmental liability claim arising out of or in connection with merchandise or services that are the subject of any Pool

Asset to the extent not covered pursuant to Section 13.5 ), other than any such suit or claim that arises as a result of the failure of any Account Debtor or Obligor, as applicable, to pay any sum due under its Pool Asset by reason of the financial or credit condition of such Account Debtor or Obligor (including the occurrence of an Insolvency Event with respect to the applicable Account Debtor or Obligor);

(ix) the ownership, delivery, non-delivery, possession, design, construction, use, maintenance, transportation, performance (whether or not according to specifications), operation (including the failure to operate or faulty operation), condition, return, sale, repossession or other disposition or safety of any Related Assets (including claims for patent, trademark, or copyright infringement and claims for injury to persons or property, liability principles, or otherwise, and claims of breach of warranty, whether express or implied);

(x) the failure by Seller, CHS or any other party to a Transaction Document (other than such Indemnified Party) to notify any Account Debtor or Obligor of the assignment pursuant to the terms hereof of any Pool Asset to Administrative Agent for the benefit of Purchasers or the failure to require that payments (including any under the related insurance policies) be made directly to Administrative Agent for the benefit of Purchasers;

(xi) failure by Seller, CHS or any other party to a Transaction Document (other than such Indemnified Party) to comply with the “bulk sales” or analogous laws of any jurisdiction;

(xii) any Taxes (other than Excluded Taxes) imposed upon any Indemnified Party or upon or with respect to the Pool Assets, all interest and penalties thereon or with respect thereto, and all costs and expenses related thereto or arising therefrom, including the fees and expenses of counsel in defending against the same;

(xiii) any loss arising, directly or indirectly, as a result of the imposition of sales or similar transfer type taxes or the failure by Seller, any Originator, Performance Guarantor or Servicer to timely collect and remit to the appropriate authority any such taxes;

(xiv) any commingling of any Collections by Seller, any Originator, Performance Guarantor or Servicer relating to the Pool Assets with any of their funds or the funds of any other Person;

(xv) any failure by Seller, CHS, any Originator, Performance Guarantor or any other party to a Transaction Document (other than such Indemnified Party) to perform its duties or obligations in accordance with the provisions of the Transaction Documents;

(xvi) the failure or delay to provide any Account Debtor or Obligor with an invoice or other evidence of indebtedness; or

(xvii) any inability of any Originator or Seller to assign any Pool Asset or Related Asset as contemplated under the Transaction Documents; or the violation or breach by any Originator, Seller, Servicer, Performance Guarantor or any of their respective Affiliates of any confidentiality provision, or of any similar covenant of non-disclosure, or any other Indemnified Amount with respect to or resulting from any such violation or breach.

(b) Contest of Tax Claim; After-Tax Basis . Subject to the provisions of Section 3.3 , if any Indemnified Party shall have notice of any attempt to impose or collect any Indemnified Tax or governmental fee or charge for which indemnification will be sought from Seller under Sections 12.1(a)(xii) or (xiii) , such Indemnified Party shall give prompt and timely notice of such attempt to Seller and Seller shall, provided that Seller shall first deposit with the applicable Purchaser Agent amounts which are sufficient to pay both the aforesaid tax, fee or charge and the costs and expenses of the Indemnified Parties, have the right, at its sole expense, to control any proceedings resisting or objecting to the imposition or collection of any such Tax, governmental fee or charge and no such contest shall be settled or otherwise compromised without such Indemnified Party’s prior written consent. Indemnification in respect of such tax, governmental fee or charge shall be in an amount necessary to make the Indemnified Party whole after taking into account any tax consequences to the Indemnified Party of the payment of any of the aforesaid Taxes and the receipt of the indemnity provided hereunder or of any refund of any such Tax previously indemnified hereunder, including the effect of such Tax or refund on the amount of Tax measured by net income or profits which is or was payable by the Indemnified Party.

(c) Contribution . If for any reason the indemnification provided above in this Section 12.1 is unavailable to an Indemnified Party or is insufficient to hold an Indemnified Party harmless, then Seller shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by such Indemnified Party on the one hand and Seller on the other hand but also the relative fault of such Indemnified Party as well as any other relevant equitable considerations.

SECTION 12.2 Indemnity by Servicer . Without limiting any other rights which any such Person may have hereunder or under Applicable Law, Servicer agrees to indemnify and hold harmless each Indemnified Party from any and all Indemnified Amounts incurred by any of them and arising out of, relating to or resulting from: (i) any failure by Servicer to perform its duties or obligations as Servicer hereunder or under any other Transaction Document in accordance with this Agreement and the other Transaction Documents or to comply with any Applicable Law, (ii) any breach of any of Servicer’s representations, warranties or covenants under any Transaction Document, (iii) any claim brought by any Person other than an Indemnified Party arising from Servicer’s servicing or collection activities with respect to the Pool Assets or (iv) any commingling of any funds by it (in any capacity) relating to the Asset Portfolio with any of its funds or the funds of any other Person; provided , however , that in all events there shall be excluded from the foregoing indemnification any damages, claims, losses, costs, expenses or liabilities to the extent resulting from (x) the gross negligence or willful misconduct of an Indemnified Party as determined in a final

non-appealable judgment by a court of competent jurisdiction or (y) the failure of an Account Debtor or Obligor to pay any sum due under its Pool Asset by reason of the financial or credit condition of such Account Debtor or Obligor (including the occurrence of an Insolvency Event with respect to the applicable Account Debtor or Obligor).

ARTICLE XIII
MISCELLANEOUS

SECTION 13.1 Amendments, Etc . No amendment, modification or waiver of any provision of this Agreement nor consent to any departure by Seller or Servicer therefrom shall in any event be effective unless the same shall be in writing and signed by Seller, Administrative Agent, Servicer and the Required Purchasers, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided , however , that no such amendment, waiver or modification shall (i) decrease the outstanding amount of, or extend the repayment of or any scheduled payment date for the payment of, any Yield in respect of the Total Investment or any fees owed to any Purchaser, any Purchaser Agent or Administrative Agent without the prior written consent of such Person; (ii) forgive or waive or otherwise excuse any repayment of the Total Investment without the prior written consent of each Purchaser and the related Purchaser Agent affected thereby; (iii) increase the Commitment of any Purchaser without its prior written consent; (iv) amend or modify the ratable share of any Committed Purchaser’s Commitment or its percentage of the Purchasers’ Total Commitment without such Committed Purchaser’s prior written consent; (v) amend or modify the provisions of this Section 13.1 , Section 10.1 or the definition of “Account Debtor Concentration Overage Amount”, “Adjusted Loan Yield and Servicing Fee Reserve Percentage (Receivables)”, “Concentration Overage Amount (Loans)”, “Delinquent Loan”, “Delinquent Receivable”, “Defaulted Loan”, “Defaulted Receivable”, “Eligible Loan”, “Eligible Receivable”, “Event of Termination”, “Legal Final Settlement Date”, “Loan Investment Base”, “Loan Pool Excess Spread Percentage”, “Loan Yield and Servicing Fee Reserve Percentage”, “Net Loan Pool Balance”, “Net Pool Balance”, “Net Receivables Pool Balance”, “Purchase Termination Date”, “Receivables Investment Base”, “Related Asset”, “Related Security”, “Required Purchasers”, “Required Loan Reserves”, “Required Receivable Reserves”, “Required Reserves”, “Servicer Termination Event”, “Specified Regulation”, “Total Investment”, ”Unmatured Event of Termination”, “Unmatured Servicer Termination Event”, “Specified Concentration Percentage” or “Yield Period” or any of the definitions used in any such preceding definition, in each case without the prior written consent of each Committed Purchaser and each Purchaser Agent or (vi) release all or any material part of the Asset Portfolio from the security interest and/or ownership interest granted by the Seller to the Administrative Agent hereunder without the prior written consent of each Committed Purchaser and each Purchaser Agent; provided , further , that the consent of Seller and Servicer shall not be required for the effectiveness of any amendment which modifies on a prospective basis, the representations, warranties, covenants or responsibilities of Servicer at any time when Servicer is not CHS or an Affiliate of CHS or a successor Servicer is designated by Administrative Agent through a Successor Notice; provided , further , that (x) any amendment, waiver or modification to Section 3.1(d) that adversely affects the rights, duties or obligations of the Custodian or any other amendment, waiver or modification that adversely affects the fees, expenses or indemnities due to the Custodian or (y) any other amendment, modification

or waiver that adversely affects the rights, duties or obligations of the Custodian in any material respect, in each case, shall require the prior written consent of the Custodian. Notwithstanding anything in any Transaction Document to the contrary, none of Seller or Servicer shall amend, waive or otherwise modify any other Transaction Document, or consent to any such amendment or modification, without the prior written consent of Administrative Agent and the Required Purchasers.

SECTION 13.2 Notices, Etc . All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including facsimile and email communication) and shall be personally delivered or sent by express mail or nationally recognized overnight courier or by certified mail, first class postage prepaid, or by facsimile or email, to the intended party at the address, facsimile number or email address of such party set forth in Schedule 13.2 or at such other address, facsimile number or email address as shall be designated by such party in a written notice to the other parties hereto. All such notices and communications shall be effective, (a) if personally delivered or sent by express mail or courier or if sent by certified mail, when received, and (b) if transmitted by facsimile or email, when receipt is confirmed by telephonic or electronic means.

SECTION 13.3 Successors and Assigns; Participations; Assignments .

(a) Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Except as otherwise provided herein, neither Seller nor Servicer may assign or transfer any of its rights or delegate any of its duties hereunder or under any Transaction Document without the prior consent of Administrative Agent and each Purchaser Agent.

(b) Participations . Any Purchaser may sell to one or more Persons (each a “ Participant ”) participating interests in the interests of such Purchaser hereunder; provided , however , that no Purchaser shall grant any participation under which the Participant shall have rights to approve any amendment to or waiver of this Agreement or any other Transaction Document. Such Purchaser shall remain solely responsible for performing its obligations hereunder, and Seller, Servicer, each Purchaser Agent and Administrative Agent shall continue to deal solely and directly with such Purchaser in connection with such Purchaser’s rights and obligations hereunder. A Purchaser shall not agree with a Participant to restrict such Purchaser’s right to agree to any amendment hereto, except amendments that require the consent of all Purchasers. Such Purchaser shall notify the Seller of any such Participant and the amount of such Participant’s participating interest.

(c) Assignment by Conduit Purchasers . Each Conduit Purchaser shall have the right without the consent of or notice to Seller to sell, transfer, negotiate or grant participations in all or any part of, or any interest in, its interest in the Asset Portfolio and any rights and benefits hereunder arising therefrom to any “qualified purchaser” (as defined in the Investment Company Act); provided , that so long as no Event of Termination or Unmatured Event of Termination is continuing, the Conduit Purchasers shall not transfer, sell or assign their rights or interests in the Asset Portfolio unless the Aggregate DPP allocable to such rights or interests in the Asset Portfolio, as determined by the Administrative Agent on a

pro rata basis allocable to the Asset Portfolio, has been paid in full or assumed by the applicable transferee. This Agreement and each Conduit Purchaser’s rights and obligations under this Agreement (other than any rights and obligations described in the immediately preceding sentence) or any other Transaction Document shall be freely assignable in whole or in part by such Conduit Purchaser and its successors and permitted assigns without the consent of Seller. Each assignor of all or a portion of its interest in the Asset Portfolio shall notify Administrative Agent, the related Purchaser Agent and Seller of any such assignment. Each assignor of all or a portion of its interest in the Asset Portfolio may, in connection with such assignment and subject to Section 13.8 , disclose to the assignee any information relating to the Asset Portfolio, furnished to such assignor by or on behalf of Seller, Servicer or Administrative Agent.

(d) Assignment by Committed Purchasers . (23) Each Committed Purchaser shall have the right without the consent of or notice to Seller to sell, transfer, negotiate or grant participations in all or any part of, or any interest in, its interest in the Asset Portfolio and any rights and benefits hereunder arising therefrom to any “qualified purchaser” (as defined in the Investment Company Act); provided , that so long as no Event of Termination or Unmatured Event of Termination is continuing, the Committed Purchasers shall not transfer, sell or assign their rights or interests in the Asset Portfolio unless the Aggregate DPP allocable to such rights or interests in the Asset Portfolio, as determined by the Administrative Agent on a pro rata basis allocable to the Asset Portfolio, has been paid in full or assumed by the applicable transferee. Each Committed Purchaser may freely assign to any Eligible Assignee without the consent of Seller unless Seller’s consent is required pursuant to the definition of “Eligible Assignee” all or a portion of any of its other rights and obligations under this Agreement or in any other Transaction Document (including all or a portion of its Commitment), in each case, with prior written notice to Administrative Agent, the related Purchaser Agent and Seller; provided , however , that the parties to each such assignment under this clause (i) shall execute and deliver to Administrative Agent and to Seller, for its recording in the Register, a duly executed and enforceable joinder to this Agreement (“ Joinder ”).

(i) From and after the effective date specified in such Joinder, (x) the assignee thereunder shall be a party to this Agreement and, to the extent that rights and obligations under this Agreement have been assigned to it pursuant to such Joinder, have the rights and obligations of a Committed Purchaser thereunder and (y) the assigning Committed Purchaser shall, to the extent that rights and obligations have been assigned by it pursuant to such Joinder, relinquish such rights and be released from such obligations under this Agreement. In addition, any Committed Purchaser may assign all or any portion of its rights (including its interest in the Asset Portfolio) under this Agreement to any Federal Reserve Bank without notice to or consent of Seller, Servicer, any other Committed Purchaser, Conduit Purchaser or Administrative Agent.

(e) Register .

(i) Seller or CHS on Seller’s behalf shall maintain a register for the recordation of the names and addresses of the Purchasers, and the Purchases (and Yield, fees and other similar amounts under this Agreement) pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive absent manifest error, and Seller, CHS and the Purchasers shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a lender solely for U.S. federal income tax and accounting purposes. The Register shall be available for inspection by any Purchaser, at any reasonable time and from time to time upon reasonable prior notice.

(ii) Seller or CHS on Seller’s behalf shall also maintain in the Register each Participant’s and/or assignee’s interest or obligations under the Transaction Documents with respect to each participation or assignment pursuant to Section 13.3(b) or 13.3(c) and shall record such participation or assignment upon notice from the Administrative Agent or the applicable Purchaser; provided that no Person shall have any obligation to disclose all or any portion of the Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, purchases or its other obligations under any Transaction Document) to any Person except to the extent that such disclosure is necessary to establish that such interest or obligation that is treated as indebtedness for U.S. federal income tax purposes is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Register shall be conclusive absent manifest error.

(f) Opinions of Counsel . If requested by Administrative Agent or an assigning Purchaser or related Purchaser Agent or necessary to maintain the ratings of any Conduit Purchaser’s Commercial Paper Notes, each assignment agreement or transfer supplement, as the case may be, must be accompanied by an opinion of counsel of the assignee as to such matters as Administrative Agent or such Purchaser or related Purchaser Agent may reasonably request.

SECTION 13.4 No Waiver; Remedies . No failure on the part of Administrative Agent, any Liquidity Provider, any Enhancement Provider, any Affected Party, any Purchaser, any Purchaser Agent or any Indemnified Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by Applicable Law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which given. Without limiting the foregoing, each Purchaser, each Purchaser Agent, BTMU, individually and as Administrative Agent, each Enhancement Provider, each Liquidity Provider, each Affected Party, and any of their Affiliates (the “ Set-off Parties ”) are each hereby authorized by Servicer and Seller at any time and from time to time following the occurrence of any Event of Termination that has

not been waived in accordance with this Agreement (without notice to Servicer, Seller or any other Person (any such notice being expressly waived by Servicer and Seller)), to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing to, any such Set-off Party to or for the credit to the account of Servicer or Seller, as applicable, against any and all obligations of Servicer or Seller, as applicable, now or hereafter existing under this Agreement or any other Transaction Document, to any Set-off Party.

SECTION 13.5 Binding Effect; Survival .

(a) This Agreement shall be binding upon and inure to the benefit of Seller, CHS, Administrative Agent, each Purchaser and each Purchaser Agent, and the provisions of Section 4.2 and Article XII shall inure to the benefit of the Affected Parties and Indemnified Parties, respectively, and their respective successors and assigns.

(b) Each Liquidity Provider, each Enhancement Provider and each other Affected Party are express third party beneficiaries hereof. Subject to clause (i) of Section B of Appendix A , this Agreement shall not confer any rights or remedies upon any other Person, other than the third party beneficiaries specified in this Section 13.5(b) .

(c) This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until the Final Payout Date. The rights and remedies with respect to any breach of any representation and warranty made by Seller pursuant to Article VI and the indemnification and payment provisions of Article XII and Sections 1.2(f) , 3.2 , 3.3 , 4.1 , 4.2 , 4.3 , 11.8 , 11.11 , 13.4 , 13.5 , 13.6 , 13.7 , 13.8 , 13.11 , 13.12 , 13.13 , 13.15 , 13.16 and 13.17 shall be continuing and shall survive any termination of this Agreement.

SECTION 13.6 Costs, Expenses and Taxes . In addition to its obligations under Article XII , Seller agrees to pay on demand:

(a) All reasonable costs and expenses incurred by or on behalf of Administrative Agent, each Liquidity Provider, each Enhancement Provider, each Purchaser, each Purchaser Agent and each other Affected Party in connection with:

(i) the negotiation, preparation, execution and delivery of this Agreement and the other Transaction Documents and any amendment of or consent or waiver under any of the Transaction Documents (whether or not consummated), or the enforcement of, or any actual or reasonably claimed breach of, this Agreement or any of the other Transaction Documents, including reasonable accountants’, auditors’, Rating Agencies’, consultants’ and attorneys’ fees and expenses to any of such Persons and the fees and charges of any independent accountants, auditors, Rating Agencies, consultants or other agents incurred in connection with any of the foregoing or in advising such Persons as to their respective rights and remedies under any of the Transaction Documents in connection with any of the foregoing; and

(ii) the administration (including periodic auditing as provided for herein) of this Agreement and the other Transaction Documents and the transactions contemplated thereby, including all reasonable expenses and accountants’, consultants’ and attorneys’ fees incurred in connection with the administration and maintenance of this Agreement and the other Transaction Documents and the transactions contemplated thereby; and

(b) all stamp and other similar Taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of this Agreement or the other Transaction Documents.

SECTION 13.7 No Proceedings .

(a) Seller, Servicer, Administrative Agent, each Purchaser and each Purchaser Agent each hereby agrees that it will not institute against any Conduit Purchaser, or join any other Person in instituting against any Conduit Purchaser, any proceeding of the type referred to in the definition of Insolvency Event from the Closing Date until one year (or, if longer, any applicable preference period then in effect) plus one day following the last day on which all Commercial Paper Notes and other publicly or privately placed indebtedness for borrowed money of such Conduit Purchaser shall have been indefeasibly paid in full. The foregoing shall not limit any such Person’s right to file any claim in or otherwise take any action with respect to any insolvency proceeding that was instituted by any Person other than such parties.

(b) Servicer, each Purchaser and each Purchaser Agent each hereby agrees that it will not institute against Seller, or join any other Person in instituting against Seller, any proceeding of the type referred to in the definition of Insolvency Event; provided , however , that Administrative Agent, with the prior consent of the Required Purchasers, may, or shall at the direction of the Required Purchasers institute or join any other Person in instituting any such proceeding against Seller. The foregoing shall not limit any such Person’s right to file any claim in or otherwise take any action with respect to any insolvency proceeding that was instituted by any Person other than such parties.

SECTION 13.8 Confidentiality .

(a) Each of Seller and Servicer agrees to maintain the confidentiality of the Program Information (as defined below), except that Program Information may be disclosed (i) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Program Information and instructed to keep such Program Information confidential); (ii) to the extent requested by any Governmental Authority; (iii) to the extent required by Applicable Laws or by any subpoena or similar legal process; (iv) to any other party to this Agreement; (v) in connection with any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; (vi) with the consent of the Purchaser Agent (such consent not to be unreasonably withheld, conditioned or delayed); or (vii) to the extent such Program Information (A)

becomes publicly available other than as a result of a breach of this Section 13.8(a) or (B) becomes available to Seller or Servicer on a nonconfidential basis from a source other than Administrative Agent (or any Affiliate thereof). For the purposes of this Section, “ Program Information ” means (i) any information regarding the pricing terms contained in this Agreement or any other Transaction Document, (ii) any information regarding the organization, business or operations of any Purchaser generally or the services performed by Administrative Agent or any Purchaser under the Transaction Documents or (iii) any information which is furnished by Administrative Agent or any Purchaser Agent to Seller or Servicer and is designated by Administrative Agent or any Purchaser Agent to such party in writing as confidential. Any Person required to maintain the confidentiality of Program Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Program Information as such Person would accord to its own confidential information.

(b) Availability of Confidential Information . This Section 13.8 shall be inoperative as to such portions of the Program Information which are or become generally available to the public or such party on a nonconfidential basis from a source other than Administrative Agent or were known to such party on a nonconfidential basis prior to its disclosure by Administrative Agent.

(c) Legal Compulsion to Disclose . In the event that any party or anyone to whom such party or its representatives transmits the Program Information is requested or becomes legally compelled (by interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) to disclose any of the Program Information, such party shall, to the extent permitted by applicable law, provide Administrative Agent, each Purchaser Agent and CHS with prompt written notice so that Administrative Agent may at the expense of CHS seek a protective order or other appropriate remedy and/or if it so chooses, agree that such party may disclose such Program Information pursuant to such request or legal compulsion. In the event that such protective order or other remedy is not obtained, or Administrative Agent waives compliance with the provisions of this Section 13.8(c) , such party will furnish only that portion of the Program Information which (in such party’s good faith judgment) is legally required to be furnished and will exercise commercially reasonable efforts to obtain reliable assurance that confidential treatment will be accorded the Program Information.

(d) Confidentiality of Administrative Agent and Purchasers . Each Affected Party and its successors and assigns agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and be instructed and agree or be otherwise bound to keep such Information confidential), (ii) to the extent requested by any Governmental Authority, (iii) to the extent required by Applicable Laws or by any subpoena or similar legal process, provided , however , to the extent permitted by Applicable Law and if practical

to do so under the circumstances, that the Person relying on this clause (iii) shall provide Seller with prompt notice of any such required disclosure so that Seller may seek a protective order or other appropriate remedy, and in the event that such protective order or other remedy is not obtained, such Person will furnish only that portion of the Information which is legally required, (iv) to any other Affected Party, (v) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, (vii) to any prospective participant or assignee provided such person agrees to be bound by this Section 13.8(d) , (viii) with the consent of Seller, (ix) to the extent such Information (1) becomes publicly available other than as a result of a breach of this Section or any Transaction Document or (2) becomes available to such Person on a nonconfidential basis from a source other than Servicer or its Subsidiaries (and not in breach of this Section or any agreement contemplated by this Section) or (x) to any nationally recognized statistical rating organization as contemplated by Section 17g-5 of the Exchange Act or in connection with obtaining or monitoring a rating on any Commercial Paper Notes. For the purposes of this Section, “ Information ” means all information received from Seller or Servicer or any Affiliate relating to Seller or Servicer or any Affiliate or their business, other than any such information that is available to such Person on a nonconfidential basis prior to disclosure by Servicer or any Affiliate. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 13.9 Captions and Cross References . The various captions (including the table of contents) in this Agreement are provided solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Agreement. Unless otherwise indicated, references in this Agreement to any Section, Appendix, Schedule or Exhibit are to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the case may be, and references in any Section, subsection, or clause to any subsection, clause or subclause are to such subsection, clause or subclause of such Section, subsection or clause.

SECTION 13.10 Integration . This Agreement, together with the other Transaction Documents, contains a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire understanding among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

SECTION 13.11 GOVERNING LAW . THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF, EXCEPT TO THE EXTENT THAT THE PERFECTION, THE EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF ADMINISTRATIVE

AGENT OR ANY PURCHASER IN THE POOL ASSETS OR RELATED ASSETS IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK).

SECTION 13.12 WAIVER OF JURY TRIAL . EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR IN ANY OTHER TRANSACTION DOCUMENT, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.

SECTION 13.13 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES . EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:

(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OTHER TRANSACTION DOCUMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR FEDERAL COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.

(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.

SECTION 13.14 Execution in Counterparts . This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement. Delivery of an executed counterpart hereof by facsimile or by electronic mail attachment in portable document format (.pdf) shall be effective as delivery of an originally executed counterpart.

SECTION 13.15 No Recourse Against Other Parties . No recourse under any obligation, covenant or agreement of Seller, Servicer or any of the other parties hereto contained in this Agreement shall be had against any stockholder, employee, officer, director, member, manager, incorporator or organizer of such party or any Affiliate thereof other than CHS in its capacities as a stockholder or member.

SECTION 13.16 Pledge to a Federal Reserve Bank . Notwithstanding anything to the contrary set forth herein (including in Section 13.3 ), (i) each Committed Purchaser or any assignee or participant thereof or (ii) in the event that any Conduit Purchaser assigns any of its interest in, to and under the Asset Portfolio to any Liquidity Provider or Enhancement Provider, any such Person, may at any time pledge, grant a security interest in or otherwise transfer all or any portion of its interest in the Asset Portfolio or under this Agreement to secure the obligations of such Person to a Federal Reserve Bank or otherwise to any other federal Governmental Authority or special purpose entity formed or sponsored by any such federal Governmental Authority, in each case without notice to or the consent of Seller or Servicer, but such pledge, grant or transfer shall not relieve any Person from its obligations hereunder.

SECTION 13.17 Pledge to a Collateral Trustee . Notwithstanding anything to the contrary set forth herein (including in Section 13.3 ), each Conduit Purchaser may at any time pledge, grant a security interest in or otherwise transfer all or any portion of its interest in the Asset Portfolio or under this Agreement to its collateral agent or trustee under such Conduit Purchaser’s commercial paper note program, in each case without notice to or the consent of Seller or Servicer, but such pledge, grant or transfer shall not relieve any Person from its obligations (if any) hereunder.

SECTION 13.18 Severability . Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 13.19 No Party Deemed Drafter . CHS, Servicer, Seller, each Purchaser, each Purchaser Agent and Administrative Agent agree that no party hereto shall be deemed to be the drafter of this Agreement.

SECTION 13.20 PATRIOT Act . Each Purchaser Agent hereby notifies Seller and Servicer that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Patriot Act ”), one or more of the Affected Parties are required to obtain, verify and record information that identifies Seller and Servicer, which information includes the name and address of Seller and Servicer and other information that will allow the Affected Parties to identify Seller and Servicer in accordance with the Patriot Act. Seller and Servicer shall, promptly following a request by any Affected Party, provide all documentation and other information that any Affected Party requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

SECTION 13.21 Acknowledgement and Consent to Bail-In if EEA Financial Institutions . Notwithstanding anything to the contrary in any Transaction Document or in any other agreement, arrangement or understanding among any of the parties hereto, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Transaction Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Transaction Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

SECTION 13.22 Amendment and Restatement . This Agreement amends and restates in its entirety the Original Agreement among the parties hereto. Upon the occurrence of the Effective Date, (a) the terms and provisions of the Original Agreement shall be amended, superseded and restated in their entirety by the terms and provisions of this Agreement and, unless expressly stated to the contrary, each reference to the Original Agreement in any of the Transaction Documents or any other document, instrument or agreement delivered in connection therewith shall mean and be a reference to this Agreement, (b) this Agreement is not intended to and shall not constitute a novation of the Original Agreement or the obligations and liabilities existing thereunder, (c) the commitment of each “Committed Purchaser” (as defined in the Original Agreement) that is a party to the Original Agreement shall, on the Effective Date, automatically be deemed restated and the only Commitments shall be those hereunder, (d) with respect to any date or time period occurring and ending prior to the Effective Date, the rights and obligations of the parties to the Original Agreement shall be governed by the Original Agreement and the other Transaction Documents (as defined therein), and (e) with respect to any date or time period occurring and ending on or after the Effective Date, the rights and obligations of the parties hereto shall be governed by this Agreement and the other Transaction Documents (as defined herein). The liens, security interests and other interests in the Seller Assets granted under the Original Agreement are and shall remain legal, valid, binding and enforceable to the extent also constituting Seller Assets hereunder. Each of the parties hereto hereby acknowledge and confirm the continuing existence and effectiveness of such liens, security interests and other interests in such Seller Assets granted under the Original Agreement, and further agree that the execution and delivery of this Agreement shall not in any way release, diminish, impair, reduce or otherwise affect such liens, security interests and other interests in such Seller Assets granted under the Original Agreement.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF , the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

CHS INC. ,
individually and as initial Servicer

By: /s/ Timothy Skidmore
Name: Tim Skidmore
Title: Vice President and CFO

COFINA FUNDING, LLC , as Seller

By: /s/ Eric Born
Name: Eric Born
Title: Secretary

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH ,
as Administrative Agent

By: /s/ Richard Gregory Hurst
Name: Richard Gregory Hurst
Title: Managing Director

VICTORY RECEIVABLES CORPORATION ,
as a Conduit Purchaser

By: /s/ David V. DeAngelis
Name: David V. DeAngelis
Title: Vice President

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH ,
as a Committed Purchaser

By: /s/ Richard Gregory Hurst
Name: Richard Gregory Hurst
Title: Managing Director

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH ,
as Purchaser Agent for the BTMU Purchaser Group

By: /s/ Richard Gregory Hurst
Name: Richard Gregory Hurst
Title: Managing Director

NIEUW AMSTERDAM RECEIVABLES CORPORATION B.V. ,
as a Conduit Purchaser

By: /s/ E.M. van Ankeren
Name: E.M. van Ankeren
Title: Managing Director

By: /s/ G.J. Huizing
Name: G.J. Huizing
Title: Proxyholder

COÖPERATIEVE RABOBANK U.A. ,
as a Committed Purchaser

By: /s/ Eugene van Esveld
Name: Eugene van Esveld
Title: Managing Director

By: /s/ Jennifer Vervoorn
Name: Jennifer Vervoorn
Title: Director

COÖPERATIEVE RABOBANK U.A., NEW YORK BRANCH ,
as Purchaser Agent for the Rabobank Purchaser Group

By: /s/ Raymond Dizon
Name: Raymond Dizon
Title: Executive Director

By: /s/ Thomas McNamara
Name: Thomas McNamara
Title: Vice President

APPENDIX A

DEFINITIONS

This is Appendix A to the Amended and Restated Receivables Purchase Agreement, dated as of July 18, 2017, among CHS INC., a Minnesota corporation, individually and as initial Servicer, COFINA FUNDING, LLC, a Delaware limited liability company, as Seller, the various CONDUIT PURCHASERS, COMMITTED PURCHASERS and PURCHASER AGENTS from time to time party thereto, and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Administrative Agent.

A. Defined Terms.

As used in this Agreement, unless the context requires a different meaning, the following terms have the meanings indicated herein below:

“ Account Agreements ” means each Seller Account Agreement and each Originator Account Agreement.

“ Account Banks ” means BMO Harris Bank, N.A., Merchants Bank, National Association, U.S. Bank National Association and Wells Fargo Bank, N.A.

“ Account Debtor ” means a Person obligated to make payments with respect to a Receivable, including any guarantor thereof.

“ Account Debtor Concentration Limit ” means, at any time for any Account Debtor, the product of (i) such Account Debtor’s Specified Concentration Percentage, and (ii) the aggregate Unpaid Balance of the Eligible Receivables and Eligible Loans at the time of determination.

“ Account Debtor Concentration Overage Amount ” means, at any time, the aggregate dollar amount (without duplication) by which each limitation set forth below is exceeded:

(i) the aggregate Unpaid Balance of all Eligible Receivables of any Account Debtor cannot exceed the Account Debtor Concentration Limit for such Account Debtor;

(ii) the aggregate Unpaid Balance of all Eligible Receivables the Account Debtors of which are Governmental Authorities cannot exceed 5% of the aggregate Unpaid Balance of all Eligible Receivables;

(iii) the aggregate Unpaid Balance of all Eligible Receivables the Account Debtors of which are principally located in each of the following states (individually) cannot exceed: 30% (in the case of the largest state in terms of the aggregate Unpaid Balance of all Eligible Receivables and Eligible Loans), 25% (in the case of the second (2 ^nd ) largest state in terms of the aggregate Unpaid Balance of all Eligible Receivables and Eligible Loans), and 15% (in the case of the third (3 ^rd ) largest state in terms of the aggregate Unpaid Balance of all Eligible Loans and Eligible Receivables);

Appendix 1

(iv) the aggregate Unpaid Balance of all Eligible Receivables the Account Debtors of which are principally located in any state, other than the three largest states in terms of Unpaid Balances referenced in clause (iii) above, cannot exceed 10% of the aggregate Unpaid Balance of all Eligible Receivables and Eligible Loans; and

(v) Account Debtors that are domiciled in an Eligible Account Debtor Jurisdiction cannot exceed 5% of aggregate Unpaid Balance of all Eligible Receivables.

“ Adjusted Loan Yield and Servicing Fee Reserve Percentage ” means, at any time, an amount equal to (a) if the Loan Pool APR Percentage is equal to or higher than the Loan Yield and Servicing Fee Reserve Percentage, zero and (b) at all other times, the Loan Yield and Servicing Fee Reserve Percentage minus the Loan Pool APR Percentage.

“ Administrative Agent ” is defined in the preamble .

“ Adverse Claim ” means any ownership interest or claim, mortgage, deed of trust, pledge, lien, security interest, hypothecation, charge or other encumbrance or security arrangement of any nature whatsoever, whether voluntarily or involuntarily given, including, but not limited to, any conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease intended as, or having the effect of, security and any filed financing statement or other notice of any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of the filing); it being understood that any of the foregoing in favor of, or assigned to, Administrative Agent shall not constitute an Adverse Claim.

“ Affected Party ” means Administrative Agent, each Purchaser, each Purchaser Agent, each Liquidity Provider, each Enhancement Provider and each Program Administrator.

“ Affiliate ” when used with respect to a Person means any other Person Controlling, Controlled by, or under common Control with, such Person.

“ Aggregate DPP ” is defined in Section 1.2(i) .

“ Aggregate Unpaids ” means all obligations of Seller arising in connection with this Agreement and each other Transaction Document, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent, including, all Indemnified Amounts, payments on account of Collections received or deemed to be received and fees.

“ Agreement ” is defined in the preamble .

“ Anti-Corruption Laws ” means all laws, rules, and regulations of any jurisdiction applicable to CHS, Seller, any Originator or their respective Subsidiaries from time to time concerning or relating to bribery or corruption, including the Foreign Corrupt Practices Act of 1977, as amended, and any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Appendix 2

“ Applicable Law ” means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree, judgment, award or similar item of or by a Governmental Authority or any interpretation, implementation or application thereof.

“ Asset ” means any of, and “ Assets ” means all of, the Loans and the Receivables.

“ Asset Pool ” means, collectively, the Loan Pool and the Receivables Pool.

“ Asset Portfolio ” is defined in Section 1.2(c) .

“ Available Collections ” means all Collections other than those Collections used by the Seller to purchase Assets under the Sale Agreement.

“ Bail-In Action ” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“ Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“ Bank Rate ” for any day falling in a particular Yield Period with respect to any Rate Tranche and any Purchaser Group means an interest rate per annum equal to the applicable LIBO Rate for such Yield Period.

“ Bankruptcy Code ” means Title 11 of the United States Code.

“ Base Rate ” means, with respect to any Purchaser, on any date, a fluctuating rate of interest per annum equal to the highest of:

(a) the applicable Prime Rate for such date;

(b) the Federal Funds Rate for such date, plus 0.50%; and

“ Basel II ” has the meaning set forth in the definition of Specified Regulation.

“ Basel III ” has the meaning set forth in the definition of Specified Regulation.

“ Basel Accord ” has the meaning set forth in the definition of Specified Regulation.

“ Basel Committee ” has the meaning set forth in the definition of Specified Regulation.

“ BTMU ” is defined in the preamble .

“ BTMU Purchaser Group ” means the Purchaser Group with Victory, as a Conduit Purchaser, BTMU, as Committed Purchaser and BTMU, as Purchaser Agent.

Appendix 3

“ Business Day ” means (a) any day that is not a Saturday, Sunday or other day on which banks in New York City are required or permitted to close and (b) if this definition of “Business Day” is utilized in connection with the LIBO Rate, dealings are carried out in the London interbank market.

“ Cash Purchase Price ” is defined in Section 1.1(a) .

“ Change of Control ” means any of the following: (a) the failure of CHS to own, directly or indirectly (through one or more wholly owned subsidiaries), at least 100% of the membership interests in Seller and CHS Capital, free and clear of any Adverse Claim and (b) with respect to CHS, (i) any merger or consolidation of such entity into another Person, (ii) any merger or consolidation to which such entity shall be a party resulting in the creation of another Person, (iii) any Person succeeding to the properties and assets of such entity substantially as a whole or (iv) the acquisition by any Person, or two or more Persons acting in concert, together with Affiliates thereof, who is not a voting member of CHS as of the Effective Date (or such later date as agreed to by the Administrative Agent in its sole discretion), of beneficial ownership (within the meaning of Rule 13d‑3 of the SEC under the Exchange Act) of in the aggregate more than 50% of the aggregate voting power of the Voting Interests of CHS.

“ CHS ” is defined in the preamble .

“ CHS Capital ” means CHS Capital, LLC, a Minnesota limited liability company.

“ Closing Date ” means July 22, 2016.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute and the regulations promulgated and rulings issued thereunder.

“ Collection Accounts ” means the Seller Collection Accounts and the Originator Collection Accounts.

“ Collections ” means, with respect to any Pool Asset, all funds which either (a) are received by Seller, any Originator, CHS, Servicer or any other Person from or on behalf of the related Account Debtors or Obligors in payment of any amounts owed (including purchase prices, finance charges, principal, interest and all other charges, recoveries and proceeds of Related Security) in respect of such Pool Asset, or applied to such other charges in respect of such Pool Asset, or applied to such amounts owed by such Account Debtors or Obligors, (b) are deemed to have been received by Seller or any other Person as a Collection pursuant to Section 3.2(a) (it being understood that Collections shall not refer to the purchase price paid by any Purchaser to Seller for Purchases of the Pool Assets and Related Assets pursuant to Section 1.1 ), (c) are paid or deemed paid by Seller as Repurchase Payments pursuant to Section 3.2(b) , or (d) constitute proceeds from the sale of such Pool Asset or any participation interest therein to the extent permitted by the Transaction Documents.

“ Commercial Loan ” means a loan facility characterized as a “Commercial Loan” under the Credit and Collection Policy.

Appendix 4

“ Commercial Paper Notes ” means short-term promissory notes issued or to be issued by a Conduit Purchaser to fund its investments in accounts receivable or other financial assets.

“ Commitment ” means, with respect to any Committed Purchaser, the maximum amount which such Committed Purchaser is obligated to pay hereunder on account of any Purchase, which amount is the amount set forth as its “Commitment” in the right column of Exhibit C .

“ Committed Purchaser ” means each Person listed as such as set forth on the signature pages of this Agreement.

“ Concentration Account ” means the account 2051415 maintained at the Account Bank in the name of the Seller.

“ Concentration Overage Amount (Loans) ” means, at any time, the aggregate dollar amount (without duplication) by which each limitation set forth below is exceeded:

(i) the aggregate Unpaid Balance of all Eligible Loans of any Obligor cannot exceed the product of the “Obligor Concentration Percentage” set out in table below for such Obligor and the aggregate Unpaid Balance of all Eligible Receivables and Eligible Loans;



Obligor	Obligor Concentration Percentage
Obligor with the largest Unpaid Balance of Eligible Loans	4%
Obligor with the second largest Unpaid Balance of Eligible Loans	3%
Obligor with the third largest Unpaid Balance of Eligible Loans	3%
All other Obligors	2%

(ii) the aggregate Unpaid Balance of all Eligible Loans the Obligors of which are principally located in each of the following states (individually) cannot exceed: 25% (in the case of the largest state in terms of the aggregate Unpaid Balance of Eligible Loans and Eligible Receivables), and 15% (in the case of the second (2 ^nd ) and third (3 ^rd ) largest states in terms of the aggregate Unpaid Balance for all Eligible Receivables and Eligible Loans);

(iii) the aggregate Unpaid Balance of all Eligible Loans the Obligors of which are principally located in any state, other than the three largest states in terms of Unpaid Balances referenced in clause (ii) above, cannot exceed 10% of the aggregate Unpaid Balance of all Eligible Receivables and Eligible Loans;

Appendix 5

(iv) the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans with an “A” Risk Rating and a remaining tenor greater than 24 months cannot exceed 2.5% of the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans;

(v) the aggregate Unpaid Balance of all Eligible Loans that are Commercial Loans with an “A2” Risk Rating and a remaining tenor greater than 24 months cannot exceed 15% of the aggregate Unpaid Balance of all Eligible Loans that are Commercial Loans;

(vi) the aggregate Unpaid Balance of all Eligible Loans that are Commercial Loans with an “A3” Risk Rating and a remaining tenor greater than 24 months cannot exceed 5.0% of the aggregate Unpaid Balance of all Commercial Loans that are Eligible Loans;

(vii) the aggregate Unpaid Balance of all Eligible Loans that are unsecured Producer Loans with an “A” Risk Rating and a remaining tenor less than or equal to 24 months cannot exceed 5% of the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans;

(viii) the aggregate Unpaid Balance of all Eligible Loans that are unsecured Producer Loans with a fixed rate of interest, an “A” Risk Rating and a remaining tenor less than or equal to 24 months cannot exceed 0% of the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans;

(ix) the aggregate Unpaid Balance of all Eligible Loans that are Junior Lien Producer Loans with a “A” Risk Rating and a remaining tenor less than or equal to 24 months cannot exceed 30% of the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans;

(x) the aggregate Unpaid Balance of all Eligible Loans that are Junior Lien Producer Loans with a “B” Risk Rating and a remaining tenor less than or equal to 24 months cannot exceed 5% of the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans;

(xi) the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans with a fixed interest rate cannot exceed 5% of the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans;

(xii) the aggregate Unpaid Balance of all Eligible Loans that are Commercial Loans with a fixed interest rate cannot exceed 5% of the aggregate Unpaid Balance of all Eligible Loans that are Commercial Loans;

(xiii) the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans with a “B” Risk Rating cannot exceed 30% of the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans;

Appendix 6

(xiv) the aggregate Unpaid Balance of all Eligible Loans that are Commercial Loans with a “A2” Risk Rating cannot exceed 35% of the aggregate Unpaid Balance of all Eligible Loans that are Commercial Loans;

(xv) the aggregate Unpaid Balance of all Eligible Loans that are Commercial Loans with a “A3” Risk Rating cannot exceed 7.5% of the aggregate Unpaid Balance of all Eligible Loans that are Commercial Loans;

(xvi) the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans with a “C” Risk Rating cannot exceed 5% of the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans;

(xvii) the aggregate Unpaid Balance of all Eligible Loans the Obligors of which are Joint Ventures cannot exceed 10% of the aggregate Unpaid Balance of all Loans;

(xviii) the aggregate Unpaid Balance of all Eligible Loans that are Producer Loans cannot exceed 50% of the aggregate Unpaid Balance of all Eligible Loans and Eligible Receivables; and

(xix) the aggregate Unpaid Balance of all Eligible Loans the Obligors of which are Governmental Authorities cannot exceed 5% of the aggregate Unpaid Balance of all Eligible Loans;

provided that a Joint Venture shall be treated for purposes of this definition as a single, separate Obligor.

“ Conduit Purchaser ” means each commercial paper conduit listed as such as set forth on the signature pages of this Agreement.

“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“ Control ” when used with respect to any specified Person, means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of such Person, whether through the ownership of voting securities or membership interests, by contract or otherwise, and the terms “Controlling” and “Controlled” have meanings correlative to the foregoing.

“ CP Rate ” means, for any period and with respect to any Rate Tranche funded by Commercial Paper Notes of any Conduit Purchaser, the per annum rate equivalent to the weighted average cost (as determined by the applicable Purchaser Agent for such Conduit Purchaser and which shall include commissions and fees of placement agents and dealers, incremental carrying costs incurred with respect to Commercial Paper Notes maturing on dates other than those on which corresponding funds are received by such Conduit Purchaser, other borrowings by such Conduit Purchaser (other than under any Liquidity Agreement) and any other costs and expenses associated with the issuance

Appendix 7

of Commercial Paper Notes) of or related to the issuance of Commercial Paper Notes that are allocated, in whole or in part, by such Conduit Purchaser or the applicable Purchaser Agent to fund or maintain such Rate Tranche (and which may be also allocated in part to the funding of other assets of such Conduit Purchaser) (determined in the case of Commercial Paper Notes issued on a discount by converting the discount to an interest equivalent rate per annum ); provided that notwithstanding anything in this Agreement or the other Transaction Documents to the contrary, Seller agrees that any amounts payable to the applicable Conduit Purchaser in respect of Yield for any Yield Period with respect to any Rate Tranche funded by such Conduit Purchaser at the CP Rate shall include an amount equal to the portion of the face amount of the outstanding Commercial Paper Notes issued by such Conduit Purchaser to fund or maintain such Rate Tranche that corresponds to the portion of the proceeds of such Commercial Paper Notes that was used to pay the interest component of maturing Commercial Paper Notes issued by such Conduit Purchaser to fund or maintain such Rate Tranche, to the extent that such Conduit Purchaser had not received payments of interest in respect of such interest component prior to the maturity date of such maturing Commercial Paper Notes (for purposes of the foregoing, the “interest component” of Commercial Paper Notes equals the excess of the face amount thereof over the net proceeds received by such Conduit Purchaser from the issuance of Commercial Paper Notes, except that if such Commercial Paper Notes are issued on an interest-bearing basis its “interest component” will equal the amount of interest accruing on such Commercial Paper Notes through maturity).

“ Credit and Collection Policy ” means, as the context may require, those credit and collection policies and practices of Seller and Servicer in effect on the Effective Date and described in Exhibit A , as modified in compliance with this Agreement.

“ Cumulative Loss Ratio ” means, as of any date of determination, the sum of the Monthly Loss Ratios for the twelve calendar months preceding such date of determination.

“ Cumulative Loss Ratio Factor ” means, as of any date of determination, a percentage equal to the product of (a) the highest Cumulative Loss Ratio during the most recent twelve calendar months multiplied by (b) 5.0.

“ Custodian ” means the Person acting as custodian under the Custodian Agreement, which shall be U.S. Bank National Association as of the Closing Date.

“ Custodian Agreement ” means the Custodian Agreement, dated as of the Closing Date, among Seller, Administrative Agent and Custodian.

“ Custodian File ” means, with respect to any Loan, (i) the original executed Obligor Note and electronic copies of each loan agreement, security agreement, guaranty and letter of credit executed in connection therewith or related thereto and (ii) acknowledgment copies of applicable UCC filings against the related Obligor with respect to such Loan.

“ Cut-Off Date ” means the last day of each Settlement Period.

“ Days Sales Outstanding ” means, on any date, the number of days equal to the product of (a) 30 and (b) the amount obtained by dividing (i) the aggregate Unpaid Balance of the Eligible

Appendix 8

Receivables as of the Cut-Off Date of the most recently ended Settlement Period by (ii) the aggregate Unpaid Balance of Eligible Receivables which were originated by any Originator during the most recently ended Settlement Period.

“ Debt ” means, at any time, with respect to any Person, (a) all obligations for money borrowed or raised, all obligations (other than accounts payable and other similar items arising in the ordinary course of business) for the deferred payment of the purchase price of property, and all capital lease obligations or other obligations which, in each case, in accordance with GAAP, would be included in determining total liabilities as shown on the liability side of the balance sheet of such Person and (b) all guarantees (whether contingent or otherwise) of such Person guaranteeing the Debt of any other Person, whether directly or indirectly (other than endorsements for collection or deposit in the ordinary course of business).

“ Debtor Relief Laws ” means the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws of the United States of America or other applicable jurisdiction from time to time affecting the rights of creditors generally.

“ Deemed Collections ” is defined in Section 3.2(a) .

“ Default Ratio (Loans) ” means, for any Settlement Period, a fraction (expressed as a percentage), (a) the numerator of which is the aggregate Unpaid Balance of all Defaulted Loans as of the last day of such Settlement Period, and (b) the denominator of which is the aggregate Unpaid Balance of all Loans as of the last day of such Settlement Period.

“ Default Ratio (Receivables) ” means, for any Settlement Period, a fraction (expressed as a percentage), (a) the numerator of which is the aggregate Unpaid Balance of all Defaulted Receivables as of the last day of such Settlement Period, and (b) the denominator of which is the aggregate Unpaid Balance of all Receivables as of the last day of such Settlement Period.

“ Defaulted Loan ” means a Pool Loan (a) as to which any payment, or part thereof, remains unpaid for more than 90 days from the original due date thereof, (b) as to which any Obligor thereof is subject to an Insolvency Event or (c) which, consistent with the Credit and Collection Policy, would be or should have been written off as uncollectible.

“ Defaulted Receivable ” means a Pool Receivable (a) as to which any payment, or part thereof, remains unpaid for more than 60 days from the original invoice due date thereof, (b) as to which any Account Debtor thereof is subject to an Insolvency Event or (c) which, consistent with the Credit and Collection Policy, would be or should have been written off as uncollectible.

“ Deferred Purchase Price ” is defined in Section 1.1(a) .

“ Delinquent Loan ” means a Pool Loan (that is not a Defaulted Loan) as to which any payment, or part thereof, remains unpaid for more than 45 days from the original due date thereof.

Appendix 9

“ Delinquent Receivable ” means a Pool Receivable (that is not a Defaulted Receivable) as to which any payment, or part thereof, remains unpaid for more than 31 days from the original invoice due date with respect thereto.

“ Dilution ” means, as of any date of determination with respect to any Pool Receivable, an amount equal to the sum, without duplication, of the aggregate reduction effected in the Unpaid Balance of such Pool Receivable due to credits, rebates, refunds, disputes, setoff, netting, billing errors, sales or similar taxes, cash discounts, volume discounts, allowances, chargebacks, returned or repossessed goods, defective goods or services, sales and marketing discounts, warranties, any unapplied credit memos and other adjustments or reductions that are made in respect of the applicable Account Debtor; provided , however , that writeoffs to the extent related to the financial or credit condition of an Account Debtor (including the occurrence of an Insolvency Event with respect to the applicable Account Debtor) shall not constitute Dilution.

“ Dilution Horizon Ratio ” means 1.25.

“ Dilution Ratio ” means, with respect to any Settlement Period, a fraction (expressed as a percentage), (a) the numerator of which is the aggregate amount of all Dilutions in respect of Pool Receivables which occurred during such Settlement Period and (b) the denominator of which is the aggregate initial Unpaid Balance of all Receivables originated by any Originator during the Settlement Period immediately prior to such Settlement Period.

“ Dilution Reserve Floor Percentage ” means, as of any date of determination, a percentage determined as follows:

DR x DHR

where :


DR	= the average of the Dilution Ratios for the preceding twelve Settlement Periods; and


DHR	= the Dilution Horizon Ratio on such day.

“ Dilution Volatility Ratio ” means, on any day, a percentage determined as follows:

(DS-DR) x (DS/DR)

where :


DS	= the highest average Dilution Ratio for any three (3) consecutive Settlement Periods observed over the preceding twelve Settlement Periods; and


DR	= the average of the Dilution Ratios for the preceding twelve Settlement Periods.

Appendix 10

“ Dodd-Frank Act ” has the meaning set forth in the definition of Specified Regulation.

“ Doubtful ” means, with respect to any Loan, that such Loan has a Risk Rating of “Doubtful” in accordance with the Credit and Collection Policy.

“ Dynamic Dilution Reserve Percentage (Receivables) ” means, as of any date of determination, a percentage determined as follows:

{(SF x DR) + DVR} x DHR

where :


SF	= 2.0;


DR	= the average of the Dilution Ratios for the preceding twelve Settlement Period;


DVR	= the Dilution Volatility Ratio on such day; and


DHR	= the Dilution Horizon Ratio on such day.

“ Dynamic Loss Reserve Percentage (Receivables) ” means, as of any date of determination, a percentage determined as follows:

SF x LR x LHR

where :


SF	= 2.0;


LR	= the highest average of the Loss Ratio (Receivables) for any three (3) consecutive Settlement Periods observed over the preceding twelve Settlement Periods; and


LHR	= Loss Horizon Ratio on such day.

“ Dynamic Reserve Percentage (Loans) ” means, at any time, an amount equal to the sum of (i) 12%, (ii) the Cumulative Loss Ratio Factor and (iii) the Portfolio Weighted Average Loan Rating Factor.

“ EEA Financial Institution ” means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

Appendix 11

“ EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“ EEA Resolution Authority ” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“ Effective Date ” means July 18, 2017.

“ Effective Date Amendments ” means each of (i) that certain Omnibus Amendment No. 2, dated as of the Effective Date, by and among the Originators, the Administrative Agent and Seller, and (ii) that certain Reaffirmation of Performance Guaranty, dated as of the Effective Date, by the Performance Guarantor.

“ Effective Date Loans ” means each of the Pool Loans sold or purported to be sold by the applicable Originator to the Seller pursuant to the Sale Agreement on or prior to the Effective Date; provided that no Loan shall be deemed an Effective Date Loan to the extent such Loan has been amended or modified following the Effective Date, and as a result of such amendment or modification, a new Obligor Note has been executed and delivered by the applicable Obligor.

“ Eligible Account Debtor Jurisdiction ” means any of the countries set forth on Schedule II ; provided that the Required Purchasers may remove any country from Schedule II by providing written notice of such removal to the Seller and Servicer.

“ Eligible Assignee ” means (i) Administrative Agent, any Purchaser Agent, any Purchaser or any of their respective Affiliates that are financial institutions, insurance company entities or manage a commercial paper conduit or similar entity, (ii) any Liquidity Provider, any Program Administrator or any Enhancement Provider, (iii) any commercial paper conduit or similar entity that is managed by Administrative Agent, any Purchaser or any Purchaser Agent or any of their respective Affiliates and (iv) any financial or other institution that is acceptable to Administrative Agent and, solely with respect to this clause (iv) so long as no Event of Termination has occurred and is continuing, the Seller (such consent not to be unreasonably withheld, conditioned or delayed).

“ Eligible Loan ” means, as of any date of determination, a Loan:

(a) which is denominated and payable only in USD in the United States;

(b) which is not a Syndicated CHS Loan;

(d) which is not an unsecured Producer Loan with a “B” or “C” Risk Rating and a remaining tenor less than or equal to 24 months;

(e) which is not a Junior Lien Producer Loan with a “C” Risk Rating and a remaining tenor less than or equal to 24 months;

Appendix 12

(f) which is not a Junior Lien Commercial Loan with a “A2” or “A3” Risk Rating and a remaining tenor less than or equal to 24 months;

(g) which is not an unsecured Commercial Loan with a “A2” or “A3” Risk Rating, a fixed interest rate and a remaining tenor less than or equal to 24 months;

(h) which is not a Junior Lien Producer Loan with a “A” or “B” Risk Rating, a fixed interest rate and a remaining tenor less than or equal to 24 months;

(i) which is not a First Lien Producer Loan with a “B” or “C” Risk Rating, a fixed interest rate and a remaining tenor less than or equal to 24 months;

(j) which is not a First Lien Commercial Loan with a “A3” Risk Rating, a fixed interest rate and a remaining tenor less than or equal to 24 months;

(k) which is not a Producer Loan with a “D” Risk Rating;

(l) which is not a Commercial Loan with a “M4” Risk Rating;

(m) the Obligor of which (A) is a resident of, or organized under the laws of, the United States of America and (B) is not a Sanctioned Person;

(n) which is not a (A) Defaulted Loan or (B) Delinquent Loan, in each case, on the date of acquisition by the Seller;

(o) (A) the Obligor of which is Solvent and (B) no Insolvency Event has occurred with respect to such Obligor;

(p) which was originated in the ordinary course of business of the applicable Originator under Loan Documents substantially in the form as set forth as Exhibit D ;

(q) which is currently owing under an Obligor Note, which Obligor Note and the related Loan Documents have been duly authorized and are in full force and effect and constitute the legal, valid and binding obligation of the related Obligor enforceable against such Obligor in accordance with their respective terms;

(r) which is not subject to any litigation, right of rescission, setoff, counterclaim, dispute or other defense of any Obligor;

(s) which, together with the Loan Documents related thereto, constitutes an “account,” a “payment intangible,” “chattel paper” or an “instrument” within the meaning of the UCC of all jurisdictions which govern the perfection of the applicable Originator’s, Seller’s and Administrative Agent’s respective interest therein;

(t) in respect of which no material default exists and there is not then in effect any waiver by the applicable Originator, Servicer or Seller of any (A) material default with

Appendix 13

respect thereto or (B) any event or circumstance that would, with notice, the passage of time, or both, become a material default with respect thereto;

(u) the Obligor of which has incurred the obligations relating to such Loan strictly for business purposes and not for personal, family or household purposes;

(v) the Obligor of which is not an Affiliate of any Originator, Seller, Servicer or Performance Guarantor; provided that Joint Ventures shall be permitted so long as (A) such Obligor does not beneficially own or hold more than 50% of any class of voting securities or the equity interests in CHS and (B) more than 50% of any class of voting securities or the equity interests in such Obligor is not beneficially owned or held by CHS ( provided that all Obligors which have Joint Ventures shall be treated as a single Obligor for purposes of the definition of “Concentration Overage Amount (Loans)”);

(w) which, with respect to any Operating Loan (other than any Operating Loan that is also a Producer Loan), requires interest payments to be made not less frequently than monthly and the outstanding principal balance to be paid in full not later than the applicable due date or commitment termination date for such Operating Loan, but in no event later than fourteen (14) months from the closing date of such Operating Loan;

(x) which, with respect to any Term Loan (other than any Term Loan that is also a Producer Loan), requires principal payments (A) to be made not less frequently than in equal monthly installments sufficient to fully amortize the outstanding principal balance over the term of the Term Loan and (B) to be paid in full not later than the applicable due date for such Term Loan, but in no event longer than ten (10) years from the closing date of such Term Loan, and interest payments to be made not less frequently than monthly;

(y) which, when added to the Pool Assets, does not result in the aggregate Weighted Average Life of the Eligible Receivables and Eligible Loans to exceed one and a half (1.5) years;

(z) the Obligor of which was not classified as Substandard, Doubtful or Loss in accordance with the Credit and Collection Policy at the time of acquisition by the Seller;

(aa) which is secured by a perfected, assignable, first priority security interest in the Related Security in favor of the applicable Originator (or, in the case of a Participation Loan, the agent for the related lender group on behalf of the lenders in such lender group), free and clear of all Adverse Claims prior to the acquisition by the Seller and the applicable Originator (or, in the case of a Participation Loan, the agent for the related lender group on behalf of the lenders in such lender group) has filed an “all assets” UCC-1 filing against each related Obligor;

(bb) which has not been compromised, adjusted or similarly modified other than in accordance with the Credit and Collection Policy and as permitted by the Transaction Documents;

Appendix 14

(cc) which, together with the related Loan Documents, satisfies in all material respects the applicable requirements of the Credit and Collection Policy;

(dd) which does not represent a refinancing by the applicable Originator of an existing Loan due to credit reasons or a restructured Loan due to credit reasons;

(ee) (i) with respect to any Effective Date Loan, the Custodian File and Obligor Note (other than any Obligor Note that has been signed electronically) with respect to such Loan shall have been delivered to the Custodian by the Seller, the Servicer or the Originator, (ii) with respect to any Loan other than an Effective Date Loan, the Custodian File and Obligor Note (other than any Obligor Note that has been signed electronically) with respect to such Loan shall have been delivered within thirty (30) days following the date on which the Seller acquires an interest in such Loan pursuant to the Sale Agreement, and (iii) with respect to any Loan that has been amended or modified following the Effective Date, the applicable amended or modified Loan Documents with respect to such Loan (including any new Obligor Note) shall have been delivered to the Custodian by the Seller, the Servicer or the Originators within thirty (30) days following the date of such amendment or modification;

(ff) which is not subordinated in any respect to any other Debt of the relevant Obligor;

(gg) which is not subject to any right of rescission, setoff, counterclaim or any other defense (including defenses arising out of violations of usury laws) of any Obligor, other than defenses arising out of applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights in general and general equity principles;

(hh) the Obligor of which has been instructed to make all payments directly to a Seller Collection Account or the Concentration Account;

(ii) in respect of which no security deposit or reserve paid or created by the related Obligor exists;

(jj) no portion of the Unpaid Balance of such Loan represents any sales tax, value-added tax or other similar tax;

(kk) which, together with the Loan Documents related thereto, does not contravene any laws, rules or regulations applicable thereto (including laws, rules and regulations relating to usury, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no party to the Loan Documents related thereto is in violation of any such law, rule or regulation in any respect;

(ll) the Related Security of which is insured as required by the Credit and Collection Policy;

Appendix 15

(mm) the Unpaid Balance to Stressed Realizable Value for the related Obligor does not exceed 90%;

(nn) with respect to which all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given in connection with the origination, transfer or sale of such Loan have been duly obtained, effected or given and are in full force and effect;

(oo) which is prepayable at any time and, together with the related Loan Documents and Related Security, is fully assignable;

(pp) with respect to which the Loan Documents are complete and in accordance with the Credit and Collection Policy; provided that, prior to the Obligor Note Delivery Date, such Loan Documents may exclude the related Obligor Note (excluding any Obligor Note that is delivered electronically) until the Obligor Note Delivery Date has occurred, at which time such Obligor Note shall be or shall have been delivered to the Custodian;

(qq) the Obligor of which has provided the Servicer with monthly financial statements in accordance with the Loan Documents within 35 days of each month end;

(rr) as to which the applicable Originator has satisfied all obligations on its part with respect to such Loan required to be fulfilled pursuant to the applicable Loan Documents or in connection with the transfer and any applicable agreement pursuant to which such transfer occurs;

(ss) as to which none of the applicable Originator, Seller, Servicer or Performance Guarantor has taken any action which would impair, or failed to take any action necessary to avoid impairing, the rights of the Administrative Agent for the benefit of the Purchasers therein, other than actions or failures to take action by the Servicer which are permitted under the Credit and Collection Policy and the Transaction Documents;

(tt) which complies with the representations and warranties made with respect thereto by the applicable Originator in the Sale Agreement;

(uu) the Unpaid Balance of which is less than the related Loan Commitment amount under the Loan Documents;

(vv) for which the contract giving rise to such Loan is governed by the law of one of the States of the United States, the District of Columbia or any territory of the United States;

(ww) for which the Seller has good and marketable title to, and is the sole legal and beneficial owner of, such Loan free and clear of any Adverse Claim, and the Administrative Agent has a first priority perfected security interest in such Loan and a perfected security interest in the Related Security with respect to such Loan;

Appendix 16

(xx) in the case of any Participation Loan:

(i) written notice of the transfer of such Participation Loan to the Seller has been delivered to the Obligor thereof and the agent of the related lender group and all other requirements under the related Loan Documents with respect to the transfer of such Participation Loan to the Seller have been satisfied; and

(ii) no material amendment to or consent under any of the related Loan Documents can be made without the consent of the Seller (or the Servicer on its behalf);

(yy) that has been sold or contributed by an Originator to Seller pursuant to the Sale Agreement with respect to which sale or contribution all conditions precedent under the Sale Agreement have been met; and

(zz) that, with respect to any Loan that is executed electronically, (i) the electronic execution of such Loan is in compliance with the Credit and Collection Policy, and (ii) each Purchaser Agent shall have received (and shall be an addressee of) a legal opinion from external counsel to the Originators, in form and substance reasonably satisfactory to the Purchaser Agents, opining that under the state law which governs such Loan’s related Loan Documents, any documents or agreements that are governed by the laws of such state and that are executed electronically constitute the valid and enforceable obligations of each party to such documents or agreements (and such external counsel shall be licensed to practice law in such state).

“ Eligible Receivable ” means, as of any date of determination, a Receivable:

(a) that is denominated and payable only in USD in the United States;

(b) the related Account Debtor (i) (x) is a resident of, or organized under the laws of, the United States of America or (y) is domiciled in an Eligible Account Debtor Jurisdiction and (ii) is not a Sanctioned Person;

(c) that is not (A) a Defaulted Receivable or (B) a Delinquent Receivable, in each case, on the date of acquisition by the Seller;

(d) (i) the Account Debtor of which is Solvent and (ii) no Insolvency Event has occurred with respect to such Account Debtor;

(e) (i) that has been generated by the applicable Originator in the United States of America and in the ordinary course of its business, subject to a valid invoice or contract, from the bona fide sale of goods or services to an Account Debtor, (ii) all obligations of the applicable Originator in connection with such Receivable have been fully performed, (iii) no portion of such Receivable is in respect of any amount as to which the related Obligor is permitted to withhold payment until the occurrence of a specified event or conditions (including “guaranteed” or “conditional” sales or any performance by an Originator), (iv)

Appendix 17

which is not owed to any Originator or Seller as a bailee or consignee for another Person, and (v) which is not issued under cash-in-advance or cash-on-account terms date; provided that, for the avoidance of doubt, no portion of any Receivable billed to any Account Debtor for which the related goods or services have not been delivered or performed by an Originator shall constitute an “Eligible Receivable”;

(f) that, together with the related Receivable Documentation, is in full force and effect and is a valid and binding obligation of the related Account Debtor, enforceable in accordance with its terms;

(g) which is not subject to any litigation, right of rescission, setoff, counterclaim, dispute or other defense of the related Account Debtor;

(h) the Seller has good and marketable title to, and is the sole legal and beneficial owner of, such Receivable and the Related Security free and clear of any Adverse Claim;

(i) in respect of which no material default exists and there is not then in effect any waiver by the applicable Originator, Servicer or Seller of any (i) material default with respect thereto or (ii) any event or circumstance that would, with notice, the passage of time, or both, become a material default with respect thereto;

(j) which constitutes an “account” or “payment intangible” within the meaning of Article 9 of the UCC of all jurisdictions which govern the perfection of the applicable Originator’s, Seller’s and Administrative Agent’s respective interest therein and is not evidenced by instruments or chattel paper;

(k) the Account Debtor of which has incurred the obligations relating to such Receivable strictly for business purposes and not for personal, family or household purposes;

(l) the Account Debtor of which is not an Affiliate of any Originators, Seller, Servicer, CHS or Performance Guarantor;

(m) no more than 35% of the aggregate Unpaid Balance of all Receivables of the related Account Debtor are Defaulted Receivables;

(n) that has a remaining payment term that does not exceed 90 days from the date of the related invoice; provided that the Unpaid Balance of all Eligible Receivables the remaining tenor of which exceeds 90 days but does not exceed 180 days cannot exceed 15% of the aggregate Unpaid Balance of all Eligible Receivables;

(o) which has not been compromised, adjusted or similarly modified other than in accordance with the Credit and Collection Policy and as permitted by the Transaction Documents;

(p) that, together with the related Receivable Documentation, satisfies in all material respects the applicable requirements of the Credit and Collection Policy;

Appendix 18

(q) which represents part or all of the price of the sale of “merchandise,” “insurance” or “services” within the meaning of Section 3(c)(5) of the Investment Company Act and which is an “eligible asset” as defined in Rule 3a-7 under the Investment Company Act;

(r) the related Account Debtor has been instructed to make payments on such Receivable only to a Lockbox, a Collection Account, an Originator Specified Account or the Concentration Account;

(s) is not subordinated in any respect to any other Debt of the relevant Account Debtor;

(t) in respect of which no security deposit or reserve paid or created by the related Account Debtor exists;

(u) no portion of the Unpaid Balance of such Receivable represents any sales tax, value-added tax or other similar tax;

(v) which does not constitute finance charges, service charges or similar charges (it being understood that only the portion of the Receivable so constituted shall not be eligible);

(w) which, together with the related Receivable Documentation, does not contravene any laws, rules or regulations applicable thereto (including laws relating to usury, truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy);

(x) for which the sale, pledge, contribution or assignment of such Receivable and the Related Security pursuant to this Agreement and the Sale Agreement does not (i) violate or contravene any Applicable Law or the related Receivable Documentation, (ii) require notice thereof to the related Account Debtor or any consent therefrom (other than any such notices that have been provided or consents that have been obtained and are in effect) or (iii) require any notice thereof or any consent from any Governmental Authority that has not been provided or obtained;

(y) that has not been previously sold, assigned, pledged or otherwise transferred by the applicable Originator to any other Person;

(z) that has been sold or contributed by any Originator to Seller pursuant to the Sale Agreement with respect to which sale or contribution all conditions precedent under the Sale Agreement have been met;

(aa) that is not a Receivable which arose as a result of the sale of consigned goods or finished goods that have incorporated any consigned goods into such finished goods or a sale in which Seller, any Originator, CHS, Performance Guarantor or Servicer acted as a

Appendix 19

bailee, consignee or agent of any other Person or otherwise not as principal or otherwise in respect of deferred or unearned revenues;

(bb) that does not constitute a re-billed amount arising from a deduction taken by the related Account Debtor with respect to a previously arising Receivable;

(cc) that (i) does not arise from a sale of accounts made as part of a sale of a business or constitute an assignment for the purpose of collection only, (ii) is not a transfer of a single account made in whole or partial satisfaction of a preexisting indebtedness or an assignment of a right to payment under a contract to an assignee that is also obligated to perform under the contract and (iii) is not a transfer of an interest in or an assignment of a claim under a policy of insurance;

(dd) the Administrative Agent has a valid and enforceable first priority perfected security interest in such Receivable and the Related Security, in either case, free and clear of any Adverse Claim; and

(ee) with respect to which all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given in connection with the origination, transfer or sale of such Receivable have been duly obtained, effected or given and are in full force and effect.

“ Enhancement Agreement ” means any agreement between a Conduit Purchaser and any other Person(s), entered into to provide (directly or indirectly) credit enhancement to such Conduit Purchaser’s commercial paper facility.

“ Enhancement Provider ” means any Person providing credit support to a Conduit Purchaser under an Enhancement Agreement, including pursuant to an unfunded commitment, or any similar entity with respect to any permitted assignee of such Conduit Purchaser.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with Seller, Servicer, Performance Guarantor or any Originator within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ ERISA Event ” means: (i) a Reportable Event with respect to a Pension Plan; (ii) a withdrawal by Seller, Servicer, any Originator, Performance Guarantor or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA); (iii) a complete or partial withdrawal by Seller, Servicer, any Originator, Performance Guarantor or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (iv) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate

Appendix 20

a Pension Plan or Multiemployer Plan; (v) an event or condition which is reasonably expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (vi) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon Seller, Servicer, any Originator, Performance Guarantor or any ERISA Affiliate; or (vii) a transaction by Seller, Servicer, any Originator, Performance Guarantor or an ERISA Affiliate that is reasonably expected to be subject to Sections 4069 or 4212(c) of ERISA.

“ EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

“ Event of Repurchase ” is defined in Section 3.2(b) .

“ Event of Termination ” is defined in Section 10.1 .

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended or otherwise modified from time to time.

“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to an Affected Party or required to be withheld or deducted from a payment to an Affected Party: (i) any Taxes imposed on, or measured by, net income or gains and any franchise Taxes, branch Taxes or branch profits Taxes, but only to the extent such Taxes are imposed by a taxing authority in a jurisdiction (or political subdivision thereof) (a) under the laws of which such Affected Party is organized or incorporated or maintains a lending office (or branch), and (b) as a result of a present or former connection between such Affected Party and the jurisdiction imposing such Tax (other than connections arising from such Affected Party having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced this Agreement, or sold or assigned an interest in this Agreement), (ii) any U.S. federal withholding Tax to the extent it is imposed on amounts payable to such Affected Party (I) when such Affected Party becomes a party to this Agreement or (II) because such Affected Party designates a new lending office, except to the extent that such Affected Party was entitled, at the time of designation of a new lending office (or assignment), to receive such additional amounts from Seller or Servicer, as applicable, pursuant to Section 3.3 , (iii) Taxes attributable to such Affected Party’s failure to comply with Section 3.3(e)(vii) , and (iv) any U.S. federal withholding tax imposed under FATCA.

“ FAS 166/167 Capital Guidelines ” has the meaning set forth in the definition of Specified Regulation.

“ FATCA ” means Sections 1471 through 1474 of the Code, as of the Closing Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, any applicable intergovernmental agreement entered into in connection with the implementation of the foregoing and any fiscal or regulatory legislation, rules or practices adopted pursuant to any such intergovernmental agreement.

Appendix 21

“ Federal Funds Rate ” means, for any period, a fluctuating interest rate per annum , determined by Administrative Agent, equal (for each day during such period) to:

(a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York; or

(b) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the applicable Liquidity Provider or Purchaser Agent from three federal funds brokers of recognized standing selected by it.

“ Federal Reserve Bank ” means the Board of Governors of the Federal Reserve System, or any successor thereto or to the functions thereof.

“ Fee Letter ” means the Amended and Restated Fee Letter, dated as of the Effective Date, among Seller, CHS, Administrative Agent and the Purchaser Agents.

“ Final Payout Date ” means the date following the Purchase Termination Date on which Total Investment shall have been reduced to zero and all other amounts then accrued or payable to any of the Affected Parties under the Transaction Documents shall have been paid in full in cash.

“ First Lien Commercial Loan ” means a Commercial Loan that is entitled to the benefit of a first lien and first priority perfected security interest on the assets of the respective Obligor.

“ First Lien Producer Loan ” means a Producer Loan that is entitled to the benefit of a first lien and first priority perfected security interest on the assets of the respective Obligor.

“ Floor Reserve Percentage (Loans) ” means, at any time, an amount equal to the sum of the “Obligor Concentration Percentage” for the six (6) largest Obligors (including Affiliates) in the Loan Pool determined in accordance with clause (i) of the definition of “Concentration Overage Amount (Loans)”.

“ Foreign Affected Party ” is defined in Section 3.3(e)(vii) .

“ Formation Date ” means the date that Seller was originally formed under the laws of the State of Delaware.

“ GAAP ” means generally accepted accounting principles in the United States of America as consistently applied. If at any time Seller or Servicer notifies Administrative Agent that Seller or Servicer requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Effective Date in GAAP or in the application thereof on the operation of such provision (or if Administrative Agent notifies Seller or Servicer that the Purchasers request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP without giving effect to such change in GAAP or in the

Appendix 22

application thereof that is the subject of such notice until such notice shall have been withdrawn or such provision amended in accordance herewith.

“ Governmental Authority ” means any government, supranational or political subdivision or any agency, authority, bureau, regulatory body, central bank, commission, department or instrumentality of any such government or political subdivision, or any other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government or any court, tribunal, grand jury or arbitrator, or any accounting board or authority (whether or not part of a government) which is responsible for the establishment or interpretation of national or international accounting principles, in each case whether foreign or domestic.

“ Indemnified Amounts ” is defined in Section 12.1(a) .

“ Indemnified Party ” is defined in Section 12.1(a) .

“ Indemnified Taxes ” means Taxes other than Excluded Taxes.

“ Independent Manager ” means a natural person who is a manager of Seller who (I) is not at the time of initial appointment, or at any time while serving as Independent Manager of Seller, and has not been at any time during the preceding five (5) years (a) a stockholder, member, director (with the exception of serving as an independent director of any Affiliates of Seller), manager (with the exception of serving as an independent manager of Seller or any of its Affiliates), officer, employee, partner, attorney or counsel of Seller, Servicer, any Originator, Performance Guarantor or CHS or any of their respective Affiliates; (b) a customer, supplier or other Person who derives any of its purchases or revenues from its activities with Seller, Servicer, any Originator, Performance Guarantor or CHS or any of their respective Affiliates; (c) a Person Controlling or under common Control with any such customer, supplier, stockholder, member, director, manager, officer, employee, partner, attorney, counsel or other Person described in clauses (a) or (b) above; or (d) a member of the immediate family of any such customer, supplier, stockholder, member, director, manager, officer, employee, partner, attorney, counsel or other Person described in clauses (a) , (b) or (c) above; and (II) (1) has prior experience as an independent manager or independent director for a company whose charter documents required the unanimous consent of all independent managers or independent directors thereof before such company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (2) has at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities.

“ Information Package ” is defined in Section 3.1(a) .

“ Insolvency Event ” means, with respect to any Person, (i) a court or governmental agency having jurisdiction in the premises shall enter a decree or order for relief in respect of such Person in an involuntary case under any Debtor Relief Law now or hereafter in effect, or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person or for any substantial part of its property or ordering the winding up or liquidation of its affairs, (ii) an

Appendix 23

involuntary case under any applicable Debtor Relief Law now or hereafter in effect is commenced against such Person and, unless such Person is Seller, an Obligor or an Account Debtor, such petition remains unstayed and in effect for a period of sixty (60) consecutive days, (iii) such Person shall commence a voluntary case under any applicable Debtor Relief Law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of such Person or any substantial part of its property or make any general assignment for the benefit of creditors, (iv) such Person shall (A) fail to pay its debts generally as such debts become due, (B) make a general assignment for the benefit of creditor or (C) admit in writing its inability to pay its debts generally as they become due or (v) such Person shall take any action to authorize any of the actions in furtherance of any of the aforesaid purposes.

“ Investment Company Act ” means the Investment Company Act of 1940, as amended.

“ Joint Venture ” means an Obligor constituting a joint venture of an Originator and one or more unaffiliated entities where (i) such Originator has no more than 50% of the ownership or voting rights in or with respect to such joint venture, (ii) such Originator does not have the ability to directly or indirectly control such joint venture and (iii) the joint venture satisfies the definition of Eligible Loan and has been subject to the same underwriting and credit and collection policies as any other Obligor.

“ Junior Lien Commercial Loan ” means a Commercial Loan that is entitled to the benefit of a lien and priority perfected security interest on the assets of the respective Obligor and is not a First Lien Commercial Loan.

“ Legal Final Settlement Date ” means the Settlement Date following the 138 ^th complete month following the Liquidation Period.

“ LIBO Rate ” means for any Yield Period, (a) the interest rate per annum designated as the LIBO Rate by the applicable Purchaser Agent for a period of time comparable to such Yield Period that appears on the Reuters Screen LIBO Page as of 11:00 a.m. (London, England time) with respect to such Purchaser Agent or related Committed Purchaser on the second Business Day preceding the first day of such Yield Period or (b) if a rate cannot be determined under either of the foregoing clauses, an annual rate equal to the average (rounded upwards if necessary to the nearest 1/100th of 1%) of the rates per annum at which deposits in USD with a duration comparable to such Yield Period in a principal amount substantially equal to the principal amount of the applicable Rate Tranche are offered to the principal London office of the applicable Purchaser Agent (or its related Committed Purchaser) by three London banks, selected by Administrative Agent in good faith, at about 11:00 a.m. London time on the second Business Day preceding the first day of such Yield Period. If the calculation of the LIBO Rate results in a LIBO Rate of less than zero (0), the LIBO Rate shall be deemed to be zero (0) for all purposes of this Agreement and the Transaction Documents.

“ Liquidation Fee ” means, for each Rate Tranche (or portion thereof) for each day in any Yield Period or Settlement Period (computed without regard to clause (iii) of the proviso of the definition of “ Yield Period ”) during the Liquidation Period, the amount, if any, by which:

Appendix 24

(a) the additional Yield (calculated without taking into account any Liquidation Fee) which would have accrued on the reductions of such Purchaser’s Tranche Investment effected pursuant to Section 1.3(c)(ii) or (iii) with respect to such Rate Tranche for such day during such Yield Period or Settlement Period (as so computed) if such reductions had not been made until the last day of such Yield Period or Settlement Period exceeds,

(b) the income, if any, received for such day during such Yield Period or Settlement Period by the affected Purchaser from investing the proceeds of such reductions of such Purchaser’s Tranche Investment.

“ Liquidation Period ” means the period commencing on the date on which the Administrative Agent notifies the Seller and the Servicer that any condition precedent to Purchases and Reinvestments set forth in Section 5.3 is not satisfied (or expressly waived by each Purchaser) and that the Liquidation Period has commenced, and ending on the Final Payout Date.

“ Liquidity Advance ” means a loan, advance, purchase or other similar action made by a Liquidity Provider pursuant to a Liquidity Agreement.

“ Liquidity Agreement ” means any agreement entered into, directly or indirectly, in connection with or related to this Agreement pursuant to which a Liquidity Provider agrees to make loans or advances to, or purchase assets from, a Conduit Purchaser (directly or indirectly) in order to provide liquidity or other enhancement for such Conduit Purchaser’s Commercial Paper Notes or other senior indebtedness.

“ Liquidity Provider ” means BTMU or any of its Affiliates, Rabobank or any of its Affiliates or any other lender, credit enhancer or liquidity provider that is at any time party to a Liquidity Agreement or any successor or assign of such lender, credit enhancer or liquidity provider or any similar entity with respect to any permitted assignee of a Conduit Purchaser.

“ Loan ” shall mean the indebtedness of any Obligor under or with respect to an Obligor Note, whether constituting an account, chattel paper, an instrument, a general intangible, payment intangible, promissory note or otherwise, and shall include (i) the right to payment of such indebtedness and any interest or finance charges and other obligations of such Obligor with respect thereto (including the principal amount of such indebtedness, periodic finance charges, late fees and returned check fees), (ii) all proceeds of, and payments or Collections on, under or in respect of any of the foregoing and (iii) all Related Security with respect thereto.

“ Loan Commitment ” means, with respect to any Obligor, the maximum aggregate amount required to be advanced to the related Obligor under the terms of the related Loan Documents.

“ Loan Document ” means, with respect to any Loan, the related Obligor Note and any related loan agreements, security agreements, mortgages, acknowledgements (if required), financing statements and other documents, instruments, certificates or assignments (including amendments or modifications thereof) executed by the Obligor thereof or by another Person on the Obligor’s behalf or for the Obligor’s benefit in respect of such Loan and related Obligor Note, including letters of credit, general or limited guaranties or other credit enhancement.

Appendix 25

“ Loan Investment Base ” means, at any time, the Net Loan Pool Balance less the Required Loan Reserves.

“ Loan Losses ” means the Unpaid Balance of any Pool Loans that have been, or should have been, written-off as uncollectible by Servicer in accordance with the Credit and Collection Policy.

“ Loan Pool ” means at any time, all then outstanding Loans sold or contributed, or purported to be sold or contributed, to Seller pursuant to the Sale Agreement and transferred or purported to be transferred to the Administrative Agent, on behalf of the Purchasers, pursuant to Section 1.2(c) .

“ Loan Pool APR Percentage ” means, at any time, an amount equal to the product of (a) the product of (i) the Weighted Average Interest Rate for the Eligible Loans multiplied by (ii) a fraction (expressed as a percentage), (x) the numerator of which is equal to the aggregate Unpaid Balances of all Eligible Loans and (y) the denominator of which is equal to the aggregate Loan Commitments of all Eligible Loans multiplied by (b) the Weighted Average Life (in years) for the Eligible Loans.

“ Loan Yield and Servicing Fee Reserve Percentage ” means, at any time, an amount equal to the product of (a) the sum of (i) the weighted average Yield Rate for the most recently ended Settlement Period multiplied by 1.5 plus (ii) the sum of the Program Fee Rate and the Servicing Fee Rate multiplied by (b) the Weighted Average Life (in years) of the Loan Pool.

“ Lockbox ” means the lockboxes specified as such in Exhibit B , each of which shall be maintained at an Account Bank in the name of Originator.

“ Loss ” means, with respect to any Loan, that such Loan has a Risk Rating of “Loss” in accordance with the Credit and Collection Policy.

“ Loss Horizon Ratio ” means 3.75.

“ Loss Ratio (Loans) ” means the highest average Default Ratio for any three (3) consecutive Settlement Periods observed over the preceding twelve Settlement Periods.

“ Loss Ratio (Receivables) ” means, as of any date of determination, the ratio (expressed as a percentage) of (a) the sum of (i) the aggregate Unpaid Balance of all Receivables that were 61-90 days past their original due date as of the end of the most recently ended Settlement Period plus (ii) the aggregate Unpaid Balance of all Receivables that were charged-off during the most recently ended Settlement Period that were 60 days or fewer days past their due date when charged off, to (b) the initial Unpaid Balance of all Receivables generated by all the Originators during the Settlement Period that is three (3) Settlement Periods prior to the most recently ended Settlement Period.

“ Loss Reserve Floor Percentage (Receivables) ” means, at any time, an amount equal to the higher of 16% and the sum of the Specified Concentration Percentages for the six (6) largest Account Debtors with the highest Unpaid Balance of Eligible Receivables.

“ Market Value ” means, with respect to any Pool Asset and Related Assets, a percentage of the principal amount of the Pool Asset, not to exceed 100%, determined by the applicable Originator,

Appendix 26

as of the date such Pool Asset is transferred to the Seller by the Originator, to be the fair market value of such Pool Asset and Related Assets.

“ Material Adverse Change ” means, with respect to any Person (or if no Person is specified, with respect to Seller, CHS, Servicer, Performance Guarantor or any Originator) an event or circumstance that, individually or in the aggregate, results in, or could reasonably be expect to result in, a material adverse change in:

(i) the financial condition or results of operations of such Person and its Subsidiaries, taken as a whole;

(ii) the ability of such Person to perform any of its obligations under this Agreement or any other Transaction Document to which it is a party;

(iii) the status, existence, perfection, priority, enforceability or other rights and remedies of Administrative Agent associated with its interests in the Pool Assets or any material portion thereof; or

(iv) (a) the validity or enforceability against such Person of any Transaction Document or any Receivable Documentation or Loan Documents to which it is a party or (b) the validity, enforceability or collectability of a material portion of the Pool Assets, including if such event or circumstance would increase the days to pay or Dilution with respect to a material portion of the Pool Receivables.

“ Monthly Loss Ratio ” means, as of any date of determination, a fraction (expressed as a percentage), (a) the numerator of which is equal to the sum of Loan Losses during the most recently ended Settlement Period and (b) the denominator of which is the aggregate Unpaid Balance of all Pool Loans as of the Cut-Off Date of the most recently ended Settlement Period.

“ Moody’s ” means Moody’s Investors Service, Inc.

“ Multiemployer Plan ” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA to which Seller, Servicer, any Originator, Performance Guarantor or any ERISA Affiliate makes or is obligated to make contributions or has any liability.

“ Net Loan Pool Balance ” means, at any time, an amount equal to (a) the aggregate Unpaid Balance of all Eligible Loans at such time, minus (b) the Concentration Overage Amount (Loans) at such time.

“ Net Pool Balance ” means, at any time, an amount equal to the sum of (a) the Net Loan Pool Balance at such time plus (b) the Net Receivables Pool Balance at such time.

“ Net Receivables Pool Balance ” means, at any time, an amount equal to (a) the aggregate Unpaid Balance of all Eligible Receivables at such time, minus (b) the Account Debtor Concentration Overage Amount at such time.

“ Nieuw Amsterdam ” means Nieuw Amsterdam Receivables Corporation B.V.

Appendix 27

“ Notice of Payment ” means a Notice of Payment substantially in the form of Exhibit F attached hereto, delivered by the Seller to the Administrative Agent and each Purchaser Agent pursuant to Sections 3.1(d)(vi) , 3.2(c) and 3.2(e) , as applicable.

“ Notice of Purchase ” means a Notice of Purchase substantially in the form of Exhibit E attached hereto, delivered by the Seller to the Administrative Agent and each Purchaser Agent pursuant to Section 1.2(a) .

“ Obligor ” shall mean, with respect to any Loan, the Person or Persons directly or indirectly obligated to make payments with respect to such Loan, including any guarantor thereof.

“ Obligor Note ” shall mean, with respect to any Loan, the promissory note, instrument or other writing entered into by the related Obligor in connection with or evidencing the indebtedness of the Obligor under such Loan.

“ Obligor Note Delivery Date ” means July 20, 2017.

“ Operating Loan ” means any Loan used to finance working capital and current or seasonal assets (e.g., inventories and accounts receivable) with an original maturity date of fourteen (14) months or less.

“ Original Agreement ” is defined in the preamble .

“ Original Asset Interest ” means the “Asset Interest” under and as defined in the Original Agreement.

“ Originator ” means each Person from time to time party to the Sale Agreement as an originator. As of the Effective Date, CHS and CHS Capital are the only Originators.

“ Originator Account Agreements ” means each Deposit Account Control Agreement, dated as of the Closing Date, among CHS or CHS Capital, as applicable, an Account Bank and the Administrative Agent.

“ Originator Collection Accounts ” means the accounts specified as such in Exhibit B , each of which shall be maintained at an Account Bank in the name of Originator.

“ Originator Specified Accounts ” means the accounts specified as such in Exhibit B , each of which shall be in the name of Originator.

“ Participant ” is defined in Section 13.3(b) .

“ Participation Loan ” means any advance by an Originator to an Obligor under a syndicated loan facility (a) that has closed (without regard to any contemporaneous or subsequent syndication of such advance) prior to such advance becoming a part of the Loan Pool and (b) pursuant to which such Originator acts as administrative agent of the related lender group.

“ Patriot Act ” is defined in Section 13.20 .

Appendix 28

“ Payoff Letter ” means that certain Payoff and Termination Agreement, dated as of the Closing Date, by and among the Seller, CHS, CHS Capital, Rabobank, Nieuw Amsterdam, Victory, BTMU and U.S. Bank National Association.

“ PBGC ” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“ Pension Plan ” means an “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by Seller, Servicer, any Originator, Performance Guarantor or any ERISA Affiliate or to which Seller, Servicer, any Originator, Performance Guarantor or any ERISA Affiliate contributes or has an obligation to contribute or to which Seller, Servicer, any Originator, Performance Guarantor or any ERISA Affiliate has any liability.

“ Performance Guarantor ” means CHS.

“ Performance Guaranty ” means the Performance Guaranty, dated as of the Closing Date, entered into by Performance Guarantor in favor of Administrative Agent.

“ Person ” means an individual, partnership, sole proprietorship, corporation (including a business trust), limited liability company, limited partnership, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“ Pool Asset ” means any of, and “ Pool Assets ” means all of, the Pool Receivables and the Pool Loans.

“ Pool Loan ” means a Loan in the Loan Pool sold or purported to be sold by the applicable Originator to the Seller pursuant to the Sale Agreement.

“ Pool Receivable ” means a Receivable in the Receivables Pool sold or purported to be sold by the applicable Originator to the Seller pursuant to the Sale Agreement.

“ Portfolio Weighted Average Loan Rating Factor ” means, with respect to any Obligor, the percentage appearing opposite such Obligor’s applicable rating on the table below:



Rating Bucket	WA Rating Factor	Portfolio WA Rating Factor
1	Greater than 4.0	0.50%
2	4.0 to 3.75	1.00%
3	3.5 to < 3.75	1.50%
4	3.25 to < 3.5	3.00%
5	Less than 3.25	5.00%

“ Prime Rate ” means, with respect to any Purchaser Group, the rate of interest in effect for such day as publicly announced from time to time by the applicable Purchaser Agent, the related

Appendix 29

Committed Purchaser or their Affiliates as its “reference rate” or “prime rate”, as applicable. Such “reference rate” or “prime rate” is set by the applicable Purchaser Agent, the related Committed Purchaser or their Affiliates based upon various factors, including such Person’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate, and is not necessarily the lowest rate charged to any customer.

“ Producer Loan ” means a Loan characterized as a “Producer Loan” under the Credit and Collection Policy.

“ Program Administration Agreement ” means that certain administration agreement between a Conduit Purchaser and Program Administrator governing certain aspects of the administration of such Conduit Purchaser’s commercial paper facility or any other agreement having similar purposes, as in effect from time to time.

“ Program Administrator ” means the administrator designated for a Conduit Purchaser under the Program Administration Agreement.

“ Program Fee ” is defined in the Fee Letter.

“ Program Fee Rate ” is defined in the Fee Letter.

“ Program Information ” is defined in Section 13.8(a) .

“ Purchase ” is defined in Section 1.1 .

“ Purchase Price ” is defined in Section 1.1 .

“ Purchase Termination Date ” means the earlier of (i) July 18, 2018, (ii) the occurrence of an Event of Termination and (iii) sixty (60) days following the date of receipt by each of the other parties to this Agreement of a written notice of termination provided by Seller.

“ Purchaser ” means each Conduit Purchaser and Committed Purchaser, as applicable.

“ Purchaser Agent ” means each Person acting as agent on behalf of a Purchaser Group and listed as such as set forth on the signature pages of this Agreement.

“ Purchaser Group ” means, for each Conduit Purchaser, such Conduit Purchaser, its related Committed Purchaser and its related Purchaser Agent as set forth on Exhibit C .

“ Purchaser Group Commitment ” means, at any time with respect to any Purchaser Group, the aggregate Commitments of all Committed Purchasers at such time in such Purchaser Group as set forth on Exhibit C .

“ Purchaser Group Investment ” means, at any time with respect to any Purchaser Group, the Total Investment of all Purchasers at such time in such Purchaser Group.

Appendix 30

“ Purchasers’ Total Commitment ” means, at any time, the aggregate Commitments of all Committed Purchasers at such time as set forth on Exhibit C .

“ Purchaser’s Tranche Investment ” means, in relation to any Rate Tranche and any Purchaser, the amount of the Purchasers’ Total Investment allocated by such Purchaser’s Purchaser Agent to such Rate Tranche pursuant to Section 2.1 ; provided that at all times the aggregate amounts allocated to all Rate Tranches shall equal the Total Investment.

“ Rabobank ” means Coöperatieve Rabobank U.A.

“ Ratable Share ” means, at any time, (i) for any Purchaser Group, a percentage equal to the quotient of (a) the Purchaser Group Commitment for such Purchaser Group at such time, divided by (b) the Purchasers’ Total Commitment at such time and (ii) for any Purchaser, a percentage equal to the quotient of (a) such Purchaser’s Commitment (or, for any Conduit Purchaser, the Commitment of the Committed Purchaser in such Conduit Purchaser’s Purchaser Group) at such time divided by (b) the Purchasers’ Total Commitment at such time.

“ Rate Tranche ” means at any time a portion of the Asset Portfolio selected by the applicable Purchaser Agent pursuant to Section 2.1 and designated as a Rate Tranche solely for purposes of computing Yield.

“ Rating Agency ” mean each of S&P and Moody’s (and/or each other rating agency then rating the Commercial Paper Notes of any Conduit Purchaser).

“ Receivable ” means any right to payment of a monetary obligation, whether or not earned by performance, owed to any Originator, Seller (as assignee of any Originator) or any other Person (as assignee of Seller) by an Account Debtor, whether constituting an account, instrument, document, contract right, general intangible, chattel paper or payment intangible, in each instance arising in connection with the sale of goods or for services rendered, and includes the obligation to pay any finance charges, fees and other charges with respect thereto, together with the Related Security with respect thereto, and with respect to each of the foregoing, all Collections and proceeds thereof. Any such right to payment arising from any one transaction, including any such right to payment represented by an individual invoice or agreement, shall constitute a Receivable separate from a Receivable consisting of any such right to payment arising from any other transaction.

“ Receivable Documentation ” means, for each Pool Receivable, the invoice therefor and any other agreement or documentation between the applicable Originator and the applicable Account Debtor giving rise to, and/or setting forth terms and conditions related to the creation and payment of, such Pool Receivable, including in each case any amendments.

“ Receivables Investment Base ” means, at any time, the Net Receivables Pool Balance less the Required Receivable Reserves.

“ Receivables Pool ” means at any time, all then outstanding Receivables sold or contributed, or purported to be sold or contributed, to Seller pursuant to the Sale Agreement and transferred or

Appendix 31

purported to be transferred to Administrative Agent, on behalf of the Purchasers, pursuant to Section 1.2(c) .

“ Records ” means all Receivable Documentation and Loan Documents and other documents, instruments, books, records, purchase orders, agreements, reports and other information (including computer programs, tapes, disks, other information storage media, data processing software and related property and rights) prepared or maintained by any Originator, CHS, Servicer, or Seller, respectively, with respect to, or that evidence or relate to, the Pool Assets, the other Seller Assets or the Account Debtors or Obligors of such Pool Assets.

“ Regulatory Change ” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect or implementation of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to the contrary, each Specified Regulation shall be deemed to be a “Regulatory Change”, regardless of the date enacted, adopted, implemented or issued.

“ Reinvestment ” is defined in Section 1.3(a)(ii) .

“ Related Assets ” means (a) all rights to, but not any obligations under, all Related Security with respect to the Pool Assets, (b) all Records (but excluding any obligations under the Receivable Documentation and Loan Documents), (c) all Collections in respect of, and other proceeds of, the Pool Assets or any other Related Security, (d) all rights and remedies of Seller or any Originator, as applicable, under the Sale Agreement, and the other Transaction Documents and any other rights or assets pledged, sold or otherwise transferred to Seller thereunder and (e) all the products and proceeds of any of the foregoing.

“ Related Security ” means, with respect to any Asset:

(i) all of Seller’s or any Originator’s, as applicable, interest in any goods (including returned goods) and documentation of title evidencing the shipment or storage of any goods (including returned goods), relating to any sale giving rise to such Asset;

(ii) all instruments and chattel paper that may evidence such Asset;

(iii) all security interests or liens and property subject thereto from time to time purporting to secure payment of such Asset, whether pursuant to the Receivable Documentation related to such Receivable, the Loan Documents related to such Loan or otherwise, together with all financing statements describing any collateral securing such Asset;

(iv) all tax refunds and the insurance policies, if any, relating to such Asset including the right to terminate such policies and to receive unearned premiums payable upon such termination, and rights to loss payments under such insurance policies;

Appendix 32

(v) the Receivable Documentation, the Loan Documents and all guaranties, letters of credit, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Asset whether pursuant to the Receivable Documentation related to such Receivable, the Loan Documents related to such Loan or otherwise;

(vi) all of Seller’s or any Originator’s, as applicable, rights, interests and claims under the Transaction Documents, the Loan Documents and the Receivable Documentation with respect to such Asset;

(vii) all books, records and other information (including computer programs, tapes, discs, punch cards, data processing software and related property and rights) relating to such Asset and the related Account Debtor or Obligor; and

(viii) all proceeds of, and payments or collections on, under or in respect of, any of the foregoing.

“ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30‑day notice period has been waived by the PBGC.

“ Reporting Date ” is defined in Section 3.1(a) .

“ Repurchase Payments ” means payments of the repurchase price for Pool Assets under Section 3.2(b) .

“ Required Loan Reserves ” means, for any day, an amount equal to the product of (a) the sum of (i) the greater of (A) the Floor Reserve Percentage (Loans) at such time and (B) the Dynamic Reserve Percentage (Loans) at such time, plus (ii) the Adjusted Loan Yield and Servicing Fee Reserve Percentage multiplied by (b) the Net Loan Pool Balance at such time.

“ Required Purchasers ” means, at any time, two or more Committed Purchasers whose Commitments at such time aggregate more than 66 2/3% of the Purchasers’ Total Commitment at such time (or, if at such time, the Purchasers’ Total Commitment is zero, two or more Committed Purchasers whose Purchaser Group’s Purchaser Group Investment at such time aggregate more than 66 2/3% of the Total Investment at such time); provided that if at any time there is only one Committed Purchaser, Required Purchasers shall mean such Committed Purchaser.

“ Required Receivable Reserves ” means, for any day, an amount equal to the product of (a) the sum of (i) the greater of (A) the sum of (1) the Dynamic Dilution Reserve Percentage (Receivables) at such time, plus (2) the Dynamic Loss Reserve Percentage (Receivables) at such time, and (B) the sum of (1) the Dilution Reserve Floor Percentage at such time, plus (2) the Loss Reserve Floor Percentage (Receivables) at such time, and (ii) the Yield and Servicing Fee Reserve Percentage (Receivables) multiplied by (b) the Net Receivables Pool Balance at such time.

“ Required Reserves ” means, for any day, an amount equal to the sum of (a) the Required Receivable Reserves plus (b) the Required Loan Reserves.

Appendix 33

“ Responsible Officer ” means the chief executive officer, the chief financial officer, the general counsel, the president, the treasurer or an assistant treasurer of CHS, and any other officer, similar official or employee of CHS responsible for the administration of the obligations of CHS in respect of this Agreement, including any person referenced in Schedule 13.2 of this Agreement with respect to Seller or the Servicer, or any replacement of such person.

“ Risk Rating ” shall mean the score or classification, as determined for each Loan in accordance with the Credit and Collection Policy.

“ S&P ” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, and any successor thereto.

“ Sale Agreement ” means the Sale and Contribution Agreement, dated as of the Closing Date, among Originators, as sellers, and Seller, as buyer.

“ Sanctioned Country ” means, at any time, a country or territory which is the subject or target of any Sanctions.

“ Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the or by the United Nations Security Council, the European Union or any EU member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person controlled by any such Person.

“ Sanctions ” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

“ SEC ” means the Securities and Exchange Commission or any successor governmental authority.

“ Securities Act ” means the Securities Act of 1933, as amended or otherwise modified from time to time.

“ Security ” is defined in Section 2(a)(1) of the Securities Act.

“ Seller ” is defined in the preamble .

“ Seller Account Agreement ” means that certain Deposit Account Control Agreement, dated as of the Closing Date, among the Seller, an Account Bank and the Administrative Agent.

“ Seller Assets ” is defined in Section 9.1 .

“ Seller Collection Accounts ” means the accounts specified as such in Exhibit B , each of which shall be maintained at an Account Bank in the name of Seller.

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“ Servicer ” is defined in Section 8.1(a) .

“ Servicer Termination Event ” means the occurrence of (i) a Material Adverse Change after the Effective Date with respect to Servicer, (ii) an Insolvency Event with respect to Servicer or (iii) an Event of Termination.

“ Servicing Fee ” means the fee for each Settlement Period equal, for each day of such Settlement Period to, the Servicing Fee Rate multiplied by the aggregate Unpaid Balance of all Pool Assets as of the Cut-Off Date of such Settlement Period, multiplied by 1/360, payable in arrears.

“ Servicing Fee Rate ” means 0.25% per annum.

“ Settlement Date ” means, with respect to any Settlement Period, the third (3 ^rd ) Business Day following the Reporting Date for such Settlement Period; provided that the last Settlement Date shall be the last day of the last Settlement Period.

“ Settlement Period ” means:

(a) the period from the Closing Date to the end of the next calendar month thereafter; and

(b) thereafter, each subsequent calendar month;

provided that the last Settlement Period shall end on the Final Payout Date; provided further that when used with respect to any period prior to the Closing Date, “Settlement Period” shall mean each calendar month.

“ Solvent ” means, with respect to any Person and as of any particular date, (i) the present fair market value (or present fair saleable value) of the assets of such Person is not less than the total amount required to pay the probable liabilities of such Person on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (ii) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature and become due in the normal course of business, (iii) such Person’s debts or liabilities are not beyond its ability to pay such debts and liabilities as they mature and (iv) such Person is not engaged in any business or transaction, and is not about to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual and matured liability.

Appendix 35

“ Specified Concentration Percentage ” means, with respect to any Account Debtor, the percentage appearing opposite such Account Debtor’s applicable rating on the table below:



Category	S&P Short-Term Rating / Long-Term Rating	Moody’s Short-Term Rating / Long-Term Rating	Specified Concentration Percentage
1	A-1 / A+ or higher	P-1 / A1 or higher	12%
2	A-2 / BBB + or higher	P-2 / Baa1 or higher	6%
3	A-3 / BBB - or higher	P-3 / Baa3 or higher	4%
4	Below A-3 / BBB- or Not Rated / Withdrawn	Below P-3 / Baa3 or Not Rated / Withdrawn	Largest 4%, 2 ^nd and 3 ^rd largest are 3%, and all others at 2%

Each Account Debtor’s “Specified Concentration Percentage” shall be computed as follows:

(i) if such Account Debtor has a long-term unsecured debt rating (A) from both Moody’s and S&P, such Account Debtor’s “Specified Concentration Percentage” shall be determined based on the lower of such long-term unsecured debt ratings or (B) from only one of Moody’s or S&P, such Account Debtor’s “Specified Concentration Percentage” shall be determined based upon the long-term unsecured debt rating that is one notch lower than the long-term unsecured debt rating that is maintained;

(ii) if such Account Debtor (A) does not have a long-term unsecured debt rating from either Moody’s or S&P and (B) has a short-term unsecured debt rating (I) from both Moody’s and S&P, such Account Debtor’s “Specified Concentration Percentage” shall be determined based on the lower of such short-term unsecured debt ratings or (II) from only one of Moody’s or S&P, such Account Debtor’s “Specified Concentration Percentage” shall be determined based upon the short-term unsecured debt rating that is one notch lower than the short-term unsecured debt rating that is maintained;

(iii) if the entity that is the parent of such Account Debtor explicitly guaranties such Account Debtor’s obligations under the related Receivable Documentation, the applicable unsecured debt rating of such parent shall be used for purposes of calculating such Account Debtor’s “Specified Concentration Percentage”; and

(iv) if such Account Debtor has neither a short-term unsecured debt rating nor a long-term unsecured debt rating from either Moody’s or S&P, such Account Debtor’s “Specified Concentration Percentage” shall be the lowest percentage set forth on the table above.

“ Specified Regulation ” means (A) the final rule titled Risk-Based Capital Guidelines; Capital Adequacy Guidelines; Capital Maintenance: Regulatory Capital; Impact of Modifications to Generally Accepted Accounting Principles; Consolidation of Asset-Backed Commercial Paper Programs; and Other Related Issues , adopted by the United States bank regulatory agencies on December 15, 2009 (the “ FAS 166/167 Capital Guidelines ”), (B) the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and all requests, rules, guidelines or directives thereunder or

Appendix 36

issued in connection therewith (the “ Dodd-Frank Act ”), (C) all requests, rules, guidelines and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities relating to (i) the July 1988 paper or the June 2006 paper prepared by the Basel Committee on Banking Supervision (“ Basel Committee ”) as set out in the publication entitled: “International Convergence of Capital Measurements and Capital Standards: a Revised Framework”, as updated from time to time, or any rules, regulations, guidance, interpretations or directives promulgated or issued in connection therewith by any bank regulatory agency (whether or not having the force of law) (“ Basel II ”) or (ii) the paper prepared by the Basel Committee as set out in the publication entitled “Basel III: A global regulatory framework for more resilient banks and banking systems”, as updated from time to time, or any rules, regulations, guidance, interpretations or directives promulgated or issued in connection therewith by any bank regulatory agency (whether or not having the force of law) (“ Basel III ” and together with Basel II, the “ Basel Accord ”) and (D) any existing or future rules, regulations, guidance, interpretations or directives from any Governmental Authority relating to Accounting Standards Codification 860-10-40-5(a), the FAS 166/167 Capital Guidelines, the Dodd-Frank Act or the BASEL Accord (whether or not having the force of law) or any rules or regulations promulgated in connection therewith by any United Stated bank regulatory agency.

“ Stressed Realizable Value ” means, with respect to any Loan, the value of all Related Security with respect thereto as calculated by the Servicer in accordance with the Credit and Collection Policy using the Obligor’s most recent monthly financial statements received by the Servicer.

“ Subsidiary ” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (i) if a corporation, more than 50% of the total voting power of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled by that Person either directly or through one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company, association or business entity other than a corporation, more than 50% of the partnership or other similar ownership interests thereof is at the time owned or controlled by that Person either directly or through one or more of the other Subsidiaries of that Person or a combination thereof.

“ Substandard ” means, with respect to any Loan, one which has a Risk Rating of “adverse” and is classified as Doubtful or Loss in accordance with the Credit and Collection Policy.

“ Successor Notice ” is defined in Section 8.1(b) .

“ Syndicated CHS Loan ” means any advance by an Originator to an Obligor under a syndicated loan facility in which such Originator participates as a member of the lender group but is not the originating lender or facility or administrative agent.

“ Taxes ” means all income, gross receipts, rental, franchise, excise, stamp, occupational, capital, value added, sales, use, ad valorem (real and personal), property (real and personal) and taxes, fees, levies, imposts, charges or withholdings of any nature whatsoever, together with any

Appendix 37

assessments, penalties, fines, additions to tax and interest thereon, howsoever imposed, by any Governmental Authority or other taxing authority in the United States or by any foreign government, foreign governmental subdivision or other foreign or international taxing authority.

“ Term Loan ” means any Loan which is not an Operating Loan used for the purpose of purchasing fixed assets, expansion, remodeling, or building working capital.

“ Total Investment ” means, at any time with respect to the Asset Portfolio, an amount equal to (a) the aggregate Cash Purchase Price paid to Seller by or on behalf of each Purchaser in respect of Purchases pursuant to this Agreement less (b) the aggregate amount of Collections theretofore received and actually distributed to the Purchasers, and not reinvested as a Reinvestment or applied as payment of the Aggregate DPP, on account of each Purchaser Group’s aggregate Purchaser Group Investment pursuant to Section 1.3 (and not rescinded or otherwise returned or reinvested pursuant to Section 1.3 ).

“ Tranche Investment ” means in relation to any Rate Tranche and any Purchaser Group the amount of such Purchaser Group’s Purchaser Group Investment allocated by the related Purchaser Agent to such Rate Tranche pursuant to Section 2.1 ; provided that at all times the aggregate amounts allocated to all Rate Tranches of all Purchaser Groups shall equal the Total Investment; provided , further , that at all times the aggregate amounts allocated to all Rate Tranches of any Purchaser Group shall equal the aggregate Purchaser Group Investment of such Purchaser Group.

“ Transaction Documents ” means this Agreement, the Sale Agreement, the Performance Guaranty, the Fee Letter, the Custodian Agreement, the Account Agreements, the Effective Date Amendments, each Notice of Purchase, Seller’s limited liability company agreement, the Payoff Letter, and all other documents, agreements and certificates to be executed and delivered in connection herewith or in connection with any of the foregoing as to which Seller, Servicer, CHS, the Performance Guarantor, any Originator or any of their Affiliates is a party.

“ Transaction Information ” shall mean any information provided to any Rating Agency, in each case, to the extent related to such Rating Agency providing or proposing to provide a rating of any Commercial Paper Notes or monitoring such rating including, without limitation, information in connection with the Seller, any Originator, the Servicer or the Pool Assets.

“ UCC ” means, in respect of each state in the United States of America, the Uniform Commercial Code as from time to time in effect in such state.

“ Unmatured Event of Termination ” means any event which, with the giving of notice or lapse of time, or both, would, unless cured or waived, become an Event of Termination.

“ Unmatured Servicer Termination Event ” means any event which, with the giving of notice or lapse of time, or both, would, unless cured or waived, become a Servicer Termination Event.

“ Unpaid Balance ” of (i) any Receivable means, at any time, the sum of (a) the unpaid amount thereof, plus (b) the unpaid amount of all finance charges, interest payments and other amounts actually accrued thereon at such time, but excluding, in the case of clause (b) above, all late payment

Appendix 38

charges, delinquency charges, and extension or collection fees and (ii) any Loan means, at any time, the outstanding principal balance thereof, excluding any accrued and outstanding finance charges and interest payments related thereto; provided that, for the avoidance of doubt, the Unpaid Balance of each Participation Loan shall only include the outstanding principal balance owed to the applicable Originator under such Participation Loan and not the outstanding principal balance owed to any other lender under such Participation Loan.

“ Unpaid Balance to Stressed Realizable Value ” means, with respect to any Obligor, the ratio of (i) the Obligor’s combined Unpaid Balances to (ii) the related Stressed Realizable Value.

“ Unused Fee ” is defined in the Fee Letter.

“ U.S. Person ” is defined in Section 3.3(e)(vi) .

“ U.S. Tax Compliance Certificate ” is defined in Section 3.3(e)(vii)(3) .

“ USD ” means United States Dollars, the lawful currency of the United States of America.

“ Victory ” means Victory Receivables Corporation, a Delaware corporation.

“ Volcker Rule ” means Section 13 of the U.S. Bank Holding Company Act of 1956, as amended, and the applicable rules and regulations thereunder.

“ Voting Interest ” shall mean membership or other ownership interests in CHS whose holders are entitled under ordinary circumstances to vote for the election of the directors of CHS or persons performing similar functions (irrespective of whether at the time membership or other ownership interests of any other class or classes shall have or might have voting power by reasoning of the happening of any contingency).

“ Weighted Average Interest Rate ” means, for each Settlement Period (determined as of the last day of each calendar month), the sum, for all Loans, of the amount determined in respect of each Loan by multiplying (i) a fraction, the numerator of which is the Unpaid Balance of such Loan and the denominator of which is the Unpaid Balance of all Loans, multiplied by (ii) the applicable interest rate for such Loan.

“ Weighted Average Life ” means, for each Settlement Period (determined as of the last day of each calendar month), the sum, for the Pool Receivables or Pool Loans (calculated separately), of the amount determined in respect of each Receivable or Loan by multiplying (i) a fraction, the numerator of which is the Unpaid Balance of such Receivable or Loan and the denominator of which is the Unpaid Balance of all Receivables or Loans (as applicable), multiplied by (ii) the remaining term to maturity of such Receivable or Loan, expressed in years.

“ Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

Appendix 39

“ Yield ” means, for any day with respect to any Rate Tranche:



{(PTI x YR)/360} + LF
where :
YR	=	the Yield Rate for such Rate Tranche;
PTI	=	Purchaser’s Tranche Investment in such Rate Tranche on such day; and
LF	=	the Liquidation Fee, if any, for such day.

“ Yield and Servicing Fee Reserve Percentage (Receivables) ” means, on any day, a percentage determined as follows:

((YRxSF)+SFR + PR) x {( DSO)/360}

where :


YR	= the weighted average Yield Rate for the prior Settlement Period;


SFR	= the Servicing Fee Rate;


PR	= the Program Fee Rate;


SF	= 1.5; and


DSO	= the Days Sales Outstanding on such day.

“ Yield Period ” means (x) with respect to any Rate Tranche that is funded or maintained other than through the issuance of Commercial Paper Notes:

(a) the period commencing on the date of the initial Purchase of the Asset Portfolio, the making of such Liquidity Advance or funding under such Enhancement Agreement or the creation of such Rate Tranche pursuant to Section 2.1 (whichever is latest) and ending such number of days thereafter as the applicable Purchaser Agent shall select in its sole discretion; and

(b) each period commencing on the last day of the immediately preceding Yield Period for the related Rate Tranche and ending such number of days thereafter as the applicable Purchaser Agent shall select in its sole discretion;

provided , that:

(i) any such Yield Period (other than a Yield Period consisting of one day) which would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day;

(ii) in the case of Yield Periods of one day for any Rate Tranche, (A) the initial Yield Period shall be the date such Yield Period commences as described in clause (a) above; and (B) any subsequently occurring Yield Period which is one day shall, if the immediately preceding Yield

Appendix 40

Period is more than one day, be the last day of such immediately preceding Yield Period, and if the immediately preceding Yield Period is one day, shall be the next day following such immediately preceding Yield Period; and

(iii) in the case of any Yield Period for any Rate Tranche which commences before the Purchase Termination Date and would otherwise end on a date occurring after the Purchase Termination Date, such Yield Period shall end on the Purchase Termination Date and the duration of each such Yield Period which commences on or after the Purchase Termination Date for such Rate Tranche shall be of such duration as shall be selected by the applicable Purchaser Agent; and

(y) with respect to any Rate Tranche that is funded or maintained through the issuance of Commercial Paper Notes, each Settlement Period.

“ Yield Rate ” means for any Rate Tranche on any day:

(a) in the case of a Rate Tranche funded by Commercial Paper Notes, the applicable CP Rate; and

(b) in the case of a Rate Tranche not funded by Commercial Paper Notes, the applicable Bank Rate for such Rate Tranche;

provided , that:

(i) on any day as to any Rate Tranche which is not funded by Commercial Paper Notes, the Yield Rate shall equal the applicable Base Rate if (A) Administrative Agent does not receive notice or determine, by 12:00 noon (New York City time) on the third Business Day prior to the first day of the related Yield Period, that such Rate Tranche shall not be funded by Commercial Paper Notes or (B) Administrative Agent or Purchaser Agent determines that (I) funding that Rate Tranche on a basis consistent with pricing based on the applicable Bank Rate would violate any Applicable Law or (II) that deposits of a type and maturity appropriate to match fund such Rate Tranche based on the applicable Bank Rate are not available; and

(ii) on any day when any Event of Termination shall have occurred that has not been waived in accordance with this Agreement or the Purchase Termination Date has occurred by virtue of clause (b) of the definition thereof, the applicable Yield Rate for each Rate Tranche means a rate per annum equal to the higher of (A) the applicable Bank Rate, plus 2.5% per annum and (B) the applicable Prime Rate for such date.

B. Other Interpretive Matters.

All accounting terms defined directly or by incorporation in this Agreement or the Sale Agreement shall have the defined meanings when used in any certificate or other document delivered pursuant thereto unless otherwise defined therein. For purposes of this Agreement, the Sale Agreement and all such certificates and other documents, unless the context otherwise requires: (a) except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; (b) terms defined in Article

Appendix 41

9 of the UCC and not otherwise defined in such agreement are used as defined in such Article; (c) references to any amount as on deposit or outstanding on any particular date means such amount at the close of business on such day; (d) the words “hereof,” “herein” and “hereunder” and words of similar import refer to such agreement (or the certificate or other document in which they are used) as a whole and not to any particular provision of such agreement (or such certificate or document); (e) references to any Section, Schedule or Exhibit are references to Sections, Schedules and Exhibits in or to such agreement (or the certificate or other document in which the reference is made), and references to any paragraph, subsection, clause or other subdivision within any Section or definition refer to such paragraph, subsection, clause or other subdivision of such Section or definition; (f) the term “including” means “including without limitation”; (g) references to any Applicable Law refer to that Applicable Law as amended from time to time and include any successor Applicable Law; (h) references to any agreement refer to that agreement as from time to time amended, restated, extended or supplemented or as the terms of such agreement are waived or modified in accordance with its terms; (i) references to any Person include that Person’s permitted successors and assigns; (j) headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof; (k) unless otherwise provided, in the calculation of time from a specified date to a later specified date, the term “from” means “from and including”, and the terms “to” and “until” each means “to but excluding”; (l) if any calculation to be made hereunder refers to a Settlement Period (or any portion thereof) that would have occurred prior to the Closing Date, such reference shall be deemed to be a reference to a calendar month; and (m) terms in one gender include the parallel terms in the neuter and opposite gender.

Appendix 42

SCHEDULE I

PAYMENT INSTRUCTIONS

With respect to BTMU:

Bank:            The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
ABA #:         026-009-632
Account #:         ---------
Account Name:     VRC
Customer Name:     Cofina Funding LLC

With respect to Rabobank:

Bank:             JPMorgan Chase Bank, N.A.
Swift Address:     CHASUS33
ABA #:         021-000-021
Account #:         ---------
FAO:             Rabobank International, New York Branch
Reference:         Cofina Funding, LLC

With respect to Nieuw Amsterdam Receivables Corporation B.V.:

Bank:             Deutsche Bank Trust Company Americas
ABA #:         021-001-033
Account #:         --------
Account Name:     NYLTD Funds Control Account
Reference:         PORT RABO09.1 // NieuwAm // Cofina Funding LLC

Schedule I-1

SCHEDULE II

ELIGIBLE ACCOUNT DEBTOR JURISDICTIONS

None.

Schedule II

SCHEDULE 13.2

ADDRESSES FOR NOTICES

If to Seller:

Cofina Funding, LLC

5500 Cenex Drive
St. Paul, Minnesota 55077
Attention: Eric Born
Tel: 651-355-5479

Fax: 651-355-4917

Email: eric.born@chsinc.com

If to Servicer

CHS Inc.

5500 Cenex Drive
St. Paul, Minnesota 55077
Attention: Brent Dickson
Tel: 651-355-5433

Fax: 800-232-3639

Email: brent.dickson@chsinc.com

If to The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch:

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
1221 Avenue of the Americas
New York, NY 10020
Attn: Securitization Group
Tel: 212-782-6957
Fax: 212-782-6448
Email: securitization_reporting@us.mufg.jp

If to Victory Receivables Corporation:

Victory Receivables Corporation
c/o Global Securitization Services, LLC
68 South Service Road, Suite 120
Melville, NY 11747
Attn:David V. DeAngelis
Tel: 631-930-7216
Fax:212-302-8767
Email: ddeangelis@gssnyc.com

Schedule 13.2-1

If to Nieuw Amsterdam Receivables Corporation B.V.:

Prins Bernhardplein 200

1097 JB Amsterdam

The Netherlands

Attention: The Directors

Email: secuitisation@intertrustgroup.com

Facsimile No.: +31 ( 0)20 5214888

With a Copy to:

Coöperatieve Rabobank U.A. (New York Branch)
245 Park Avenue

New York, NY 10167
Attn: NYSG
Tel: 212-8-08-6816
Fax: (914) 304-9324
Email: naconduit@rabobank.com

If to Coöperatieve Rabobank U.A.:

Coöperatieve Rabobank U.A.

Coreselaan 18

3521 CB Utrecht

The Netherlands

With a Copy to:

Coöperatieve Rabobank U.A., New York Branch
245 Park Avenue

New York, NY 10167
Attn: NYSG
Tel: 212-8-08-6816
Fax: (914) 304-9324
Email: naconduit@rabobank.com

If to Coöperatieve Rabobank U.A., New York Branch:

Schedule 13.2-2

Coöperatieve Rabobank U.A., New York Branch
245 Park Avenue

New York, NY 10167
Attn: NYSG
Tel: 212-8-08-6816
Fax: (914) 304-9324
Email: naconduit@rabobank.com

Schedule 13.2-3

EXHIBIT A

CREDIT AND COLLECTION POLICY

(attached)

Exhibit A-1

Exhibit B

Collection Accounts

1. CHS Inc. Owned Accounts :


•	Collection Account for Energy & CN A/R:

Bank: Wells Fargo Bank, N.A.

Address: 420 Montgomery

San Francisco, CA 94104

Routing number: 121000248

Account name: CHS Inc.

Account number: 6355054507


•	Lockboxes for Energy & CN A/R:

Lockbox Number: 5912

Lockbox Site Code: SP

Address: CHS

NW5912

PO Box 1450

Minneapolis, MN 55485-5912

Lockbox Number: 9087

Lockbox Site Code: SP

Address: CHS

NW9087

PO Box 1450

Minneapolis, MN 55485-9087

2. CHS Capital, LLC Owned Accounts :


•	Collection Account for CHS Capital, LLC Loans:

Bank: Merchants Bank

Address: 102 E 3 ^rd St, Winona, MN 55987

Routing number: 091900193

Account number: ------

3. Cofina Funding, LLC Owned Accounts:


•	Collection Account for Cofina Funding, LLC:

Exhibit B-1

Bank: BMO Harris Bank

Address: 320 E Lake St. Minneapolis, MN 55408

Routing number: 071000288

Account number: ------


•	Concentration Account

Bank: BMO Harris Bank, N.A.

Address: 320 E Lake St. Minneapolis, MN 55408

Routing number: 071000288

Account number: ------

Exhibit B-2

Exhibit C

Purchaser Groups



Purchaser Group: BTMU Purchaser Group Conduit Purchaser: Victory Receivables Corporation Committed Purchaser: The Bank of Tokyo-Mitsubishi-UFJ, Ltd. Purchaser Agent: The Bank of Tokyo-Mitsubishi-UFJ, Ltd.	Purchaser Group Commitment: $391,176,470
Purchaser Group: Rabobank Purchaser Group Conduit Purchaser: Nieuw Amsterdam Receivables Corporation B.V. Committed Purchaser: Coöperatieve Rabobank U.A. Purchaser Agent: Coöperatieve Rabobank U.A., New York Branch	Purchaser Group Commitment: $308,823,530
	Purchasers’ Total Commitment: $700,000,000

Exhibit C-1

Exhibit D

Form of Loan Documents

See Attached

Exhibit D-1

Exhibit E

Form of Notice of Purchase

[Date of Notice of Purchase]

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Administrative Agent and Purchaser Agent for the BTMU Purchaser Group

1221 Avenue of the Americas

New York, NY 10020

Attn: Securitization Group

Tel: 212-782-6957

Fax: 212-782-6448

Email: securitization_reporting@us.mufg.jp

Coöperatieve Rabobank U.A., New York Branch, as Purchaser Agent for the Rabobank Purchaser Group

245 Park Avenue

New York, NY 10167
Attn: NYSG
Tel: 212-8-08-6816
Fax: (914) 304-9324
Email: naconduit@rabobank.com

Ladies and Gentlemen:

Reference is made to the Amended and Restated Receivables Purchase Agreement, dated as of July 18, 2017 (and as further amended, supplemented or otherwise modified from time to time, the “ Receivables Purchase Agreement ”) between, amongst others, Cofina Funding, LLC (the “ Seller ”), CHS Inc., as servicer (the “ Servicer ”), each Person from time to time party thereto as a Purchaser and/or a Purchaser Agent and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Administrative Agent. Capitalized terms defined in the Receivables Purchase Agreement are used herein with the same meanings.

Pursuant to Section 1.2(a) of the Receivables Purchase Agreement, the Seller (or the Servicer on its behalf) hereby requests that the Purchasers make a ratable Purchase as follows:


1.	The date of the Purchase is __________________ (the “ Purchase Date ”).


2.	The requested Cash Purchase Price for the Purchase is $__________________.


3.	The amount of the Purchase is to be allocated to each Purchaser Group in accordance with each Purchaser Group’s Ratable Share of the Purchase.

Exhibit E-1

The Seller hereby certifies, represents and warrants to the Administrative Agent and each Purchaser Agent that on and as of the Purchase Date:


(a)	Attached as Exhibit A hereto is a pro forma Information Package after giving effect to the Purchase and any other Purchase proposed to be made on the Purchase Date;

(b)

each of the representations and warranties contained in Article VI of the Receivables Purchase Agreement, in the Sale Agreement and in each other Transaction Document that are qualified as to materiality are true and correct, and each not so qualified are true and correct in all material respects, in each case, on and as of such day as though made on and as of the Purchase Date (except to the extent such representations and warranties explicitly refer solely to an earlier date or period, in which case they shall be true and correct as of such earlier date or period);


(c)	no event has occurred and is continuing or would result from the Purchase and any other Purchase proposed to be made on the Purchase Date, that constitutes an Event of Termination, an Unmatured Event of Termination, a Servicer Termination Event or an Unmatured Servicer Termination Event;

(d)

after giving effect to the Purchase and any other Purchase proposed to be made on the Purchase Date, (i) with respect to any Purchaser Group, such Purchaser Group’s Purchaser Group Investment will not exceed such Purchaser Group’s Purchaser Group Commitment, (ii) the Total Investment will not exceed the Purchasers’ Total Commitment, and (iii) the Total Investment will not exceed the sum of the Receivables Investment Base and the Loan Investment Base; and


(e)	the Purchase Termination Date has not occurred.

Exhibit E-2

IN WITNESS WHEREOF, the Seller has caused this Notice of Purchase to be executed and delivered as of this ____ day of _______________, _____.

COFINA FUNDING, LLC , as Seller

By:
Name:
Title:

Exhibit E-3

Exhibit F

Form of Notice of Payment

[Date of Notice of Payment]

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Administrative Agent and Purchaser Agent for the BTMU Purchaser Group

1221 Avenue of the Americas

New York, NY 10020

Attn: Securitization Group

Tel: 212-782-6957

Fax: 212-782-6448

Email: securitization_reporting@us.mufg.jp

Coöperatieve Rabobank U.A., New York Branch, as Purchaser Agent for the Rabobank Purchaser Group

245 Park Avenue

New York, NY 10167
Attn: NYSG
Tel: 212-8-08-6816
Fax: (914) 304-9324
Email: naconduit@rabobank.com

Ladies and Gentlemen:

Pursuant to [Section 3.1(d)(vi)][Section 3.2(c)][Section 3.2(e)] of the Receivables Purchase Agreement, the Seller (or the Servicer on its behalf) hereby notifies the Administrative Agent and each Purchaser Agent that it will make payments to the reduction of the Aggregate Unpaids in the aggregate principal amount of $________________ on [date].

Exhibit F-1

IN WITNESS WHEREOF, the Seller has caused this Notice of Payment to be executed and delivered as of this ____ day of _______________, _____.

COFINA FUNDING, LLC , as Seller

By:
Name:
Title:

Exhibit F-2

EXHIBIT 3.1(a)

FORM OF INFORMATION PACKAGE

See Attached

Exhibit 3.1(a)-1

Exhibit 10.37

EXECUTION COPY

Reaffirmation of Performance Guaranty

July 18, 2017

Cofina Funding, LLC

5500 Cenex Drive
St. Paul, Minnesota 55077

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch,

as Administrative Agent
1221 Avenue of the Americas
New York, New York 10020

Re:

Amended and Restated Receivables Purchase Agreement, dated as of July 18, 2017 (the “ Amended and Restated RPA ”), among Cofina Funding, LLC (the “ Seller ”), as Seller, CHS Inc. (the “ Servicer ”), as Servicer, the Conduit Purchasers, Committed Purchasers and Purchaser Agents from time to time party thereto, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch (the “ Administrative Agent ”), as Administrative Agent.

Ladies and Gentlemen:

In connection with the execution and delivery of (i) that certain Receivables Financing Agreement, dated as of July 22, 2016, by and among the Seller, the Servicer, the Conduit Purchasers, Committed Purchasers and Purchaser Agents party thereto, and the Administrative Agent (as previously amended, supplemented or otherwise modified, the “ Existing RFA ”) and (ii) the Sale and Contribution Agreement, dated as of July 22, 2016 (as previously amended, supplemented or otherwise modified from time to time, the “ Sale Agreement ”), by and between CHS Inc. (“ CHS ”), as an Originator, CHS Capital, LLC (“ CHS Capital ” and, together with CHS and any Person who hereafter becomes a party to the Sale Agreement in the capacity of an “Originator”, the “ Originators ” and each an “ Originator ”), as an Originator, and the Seller, CHS Inc. (the “ Performance Guarantor ”), executed and delivered that certain Performance Guaranty, dated as of July 22, 2016, in favor of the Administrative Agent (the “ Performance Guaranty ”) pursuant to which the Performance Guarantor guaranteed to the Administrative Agent the due and punctual payment and performance of each Originator (other than CHS) of its respective Guaranteed Obligations (as defined in the Performance Guaranty).

On the date hereof, (i) the Seller, the Servicer, the Conduit Purchasers, Committed Purchasers and Purchaser Agents party thereto, and the Administrative Agent are amending and restating the Existing RFA pursuant to the Amended and Restated RPA; (ii) the Seller, the Administrative Agent, the Conduit Purchasers, Committed Purchasers and Purchaser Agents party thereto, and the Originators are amending the Sale Agreement pursuant to that

certain Omnibus Amendment No. 2 (the “ Omnibus Amendment ”); and (iii) each of the Seller, the Servicer, the Conduit Purchasers, Committed Purchasers and Purchaser Agents party thereto, the Administrative Agent, and the Originators desire that the Performance Guarantor reaffirm its obligations under the Performance Guaranty.

By executing this Reaffirmation of the Performance Guaranty (this “ Reaffirmation ”), the Performance Guarantor hereby absolutely and unconditionally (i) consents to the execution and delivery by the Seller, the Servicer, the Conduit Purchasers, Committed Purchasers and Purchaser Agents party thereto, and the Administrative Agent of the Amended and Restated RPA; (ii) consents to the execution and delivery by Seller, the Administrative Agent, the Purchasers party thereto, and the Originators party thereto of the Omnibus Amendment; and (iii) reaffirms all of its obligations under the Performance Guaranty.

This Reaffirmation may be executed in one or more counterparts, each of which will be deemed to be an original, and all such counterparts will constitute one and the same instrument. All capitalized terms used herein without definition shall have the meanings assigned thereto in the Amended and Restated RPA. This Reaffirmation shall be governed by and construed in accordance with the laws of the State of New York.

[SIGNATURE PAGE FOLLOWS]

CHS INC. ,

as Performance Guarantor

By: /s/ Timothy Skidmore
Name: Tim Skidmore
Title: Vice President and CFO

Address for Notices

CHS Inc.

5500 Cenex Drive
                St. Paul, Minnesota 55077
                Attention: Brent Dickson
                Tel: 651-355-5433

Fax: 800-232-3639

Email: brent.dickson@chsinc.com

EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT



SUBSIDIARY		JURISDICTION OF INCORPORATION/ ORGANIZATION
ACC Feed Supplement, LLC		South Dakota

Ag Partners, LLC		Montana

AgFarm Pty Ltd		Australia

AgFarm Unit Trust		Australia

Agri Point Ltd.		Republic of Cyprus

Agro Distribution, LLC		Delaware

Agro Storage d.o.o, a subsidiary of Agri Point Ltd.		Bosnia

Impact Risk Funding Inc., PCC, a subsidiary of CHS Insurance Services, LLC		Washington DC

Ag States Reinsurance Co., IC, a subsidiary of Impact Risk Funding Inc.		Washington DC

Allied Agronomy, LLC		North Dakota

Ardent Mills, LLC		Delaware

Ardent Mills Netherlands Holdings B.V.		Netherlands

Ardent Mills S.a.r.l		Luxembourg

Ardent Mills ULC		Canada

Battle Creek/CHS, LLC		Delaware

Boort Grain Cooperative Ltd		Australia

Bridgeland Agribusiness Solutions Limited Partnership		Canada

Bridgeland Agribusiness Solutions General Partner, Ltd.		Canada

Briggs Crop Nutrients LLC		Indiana

Broadbent Bulk Services Pty. Ltd		Australia

Broadbent CHS Pty. Ltd.		Australia

Broadbent Grain Pty. Ltd.		Australia

CENEX AG, Inc.		Delaware

CENEX Pipeline, LLC		Minnesota

Central Montana Propane, LLC		Montana

Central Plains Ag Services LLC		Minnesota

CF Industries Nitrogen, LLC		Delaware

CHS de Argentina, S.A.		Argentina

CHS North LLC		Minnesota

CHS Agro SA		Argentina



SUBSIDIARY		JURISDICTION OF INCORPORATION/ ORGANIZATION
CHS AGRONEGOCIO - Industria e Comercio Ltda.		Brazil

CHS Canada Cooperative		Alberta

CHS Canada LP		Alberta

CHS Canada, Inc.		Manitoba

CHS Capital, LLC		Minnesota

CHS Capital Canada, Inc.		Canada

CHS (Taiwan) Commodity Trading Co. Ltd		Taiwan

CHS Country Operations Canada, Inc.		Alberta

CHS Trading Company Australia Pty. Ltd.		Australia

CHS Energy Canada, Inc.		Alberta

CHS Hallock Canada, Inc		Manitoba

CHS Hallock, LLC		Minnesota

CHS Hedging, LLC		Delaware

CHS Holdings, LLC		Minnesota

CHS Inc. de Mexico		Mexico

CHS Europe S.a.r.l		Switzerland

CHSINC Iberica SL, a subsidiary of CHS Europe S.a.r.l		Spain

CHS Latin America Holdings LLC		Minnesota

CHS Luxembourg, S.a.r.l		Luxembourg

CHS Milling Luxembourg, S.a.r.l.		Luxembourg

CHS (Nantong) Cereal & Oil Storage and Transportation Co., Ltd		China

CHS Tarim ve Gida Sanayii Limited Sirketi		Turkey

CHS Ukraine, LLC, a subsidiary of CHS Europe S.a.r.l		Ukraine

Omega Terminal, SA, a subsidiary of CHS Europe S.a.r.l		Switzerland

Oregana Co., Ltd., a subsidiary of CHS Europe S.a.r.l		Republic of Cyprus

CHS Agromarket, LLC, a subsidiary of Oregana Co., Ltd.		Russian Federation

Andali Operacoes Industriais S.A., a subsidiary of CHS do Brasil Ltda.		Brazil

CHS Agritrade Bulgaria Ltd., a subsidiary of CHS Europe S.a.r.l		Bulgaria

CHS Agritrade Hungary Ltd., a subsidiary of CHS Europe S.a.r.l		Hungary

CHS Bermuda GP		Bermuda

RosAgroInvest LLC, a subsidiary of Oregana Co., Ltd.		Russian Federation

CHS Hong Kong Limited, a subsidiary of CHS Europe S.a.r.l		Hong Kong



SUBSIDIARY		JURISDICTION OF INCORPORATION/ ORGANIZATION

CHS (Shanghai) Trading Co., Ltd., a subsidiary of CHS Hong Kong Ltd		China

CHS Insurance Services, LLC		Minnesota

CHS Italy S.r.l.		Italy

CHS Korea, LLC		South Korea

CHS McPherson Refinery, Inc.		Kansas

CHS Pacific Private Limited, a subsidiary of CHS Industries Ltd.		Republic of Singapore

CHS Serbia D.O.O. Novi Sad, a subsidiary of CHS Europe S.a.r.l		Serbia

CHS Singapore Trading Company PTE. LTD.		Republic of Singapore

CHS Spiritwood Fertilizer LLC		Delaware

CHS South Sioux City, Inc.		Delaware

CHS Uruguay SRL		Uruguay

CHS-Brule, Inc		Nebraska

CHS-CFE Co		Illinois

CHS-Farmco, Inc.		Kansas

CHS-GC, Inc.		Colorado

CHS-LCC Co-op		Wisconsin

CHS-Holdrege, Inc.		Nebraska

CHS-M&M, Inc.		Colorado

CHS-Ostrander		Minnesota

CHS-Rochester		Minnesota

CHS-Shipman, Inc.		Illinois

CHS-SLE Land, LLC		Louisiana

CHS-Sub Sycamore, Co.		Illinois

CHS-Sub Whatcom, Inc		Washington

CHS-Valley City		Minnesota

CHS-Wallace County, Inc.		Kansas

Circle Land Management, Inc.		Minnesota

Cofina Funding, LLC, a subsidiary of CHS Capital, LLC		Delaware

CHS Capital ProFund LLC, a subsidiary of CHS Capital, LLC		Minnesota

CoGrain		Washington

Colorado Retail Ventures Services, LLC		Colorado



SUBSIDIARY		JURISDICTION OF INCORPORATION/ ORGANIZATION
Collins, MT Crop Nutrients LLC		Montana

Consumers Supply Distributing, LLC		Minnesota

Cooperative Agronomy Services		South Dakota

Cornerstone Ag, LLC		Delaware

Crestline Crop Nutrients LLC		Ohio

Cross Country Land Management LLC		Montana

CZL Australia & Japan Pty Ltd		Australia

CZL Ltd.		Japan

Dakota Agronomy Partners, LLC		North Dakota

Fin-Ag, Inc.		South Dakota

Front Range Pipeline, LLC		Minnesota

Genetic Marketing Group, LLC		Washington

Global Agri LLC		Ukraine

GTL Resources Limited		England

GTL Resources Overseas Investments Limited		England

GTL Resources USA, Inc.		Delaware

Green Bay Terminal Corporation		Wisconsin

Hamberg, North Dakota Crop Nutrients LLC		Minnesota

IC Grain		Hungary

IGH Insurance Company, IC		Washington DC

Illinois River Energy, LLC		Delaware

Imperial Valley Terminal, LLC		Illinois

Jayhawk Pipeline, LLC		Kansas

Kaw Pipe Line Company		Kansas

Lakaput Bulk Storage Ptd. Ltd		Australia

Larson Cooperative TVCS		Wisconsin

Latty Grain Ltd		Ohio

Lewis-Clark Terminal, Inc.		Idaho

Market Street Terminal, LLC		Illinois

Marshall Insurance Agency, Inc.		Minnesota

Midwest Ag Supplements, LLC		Minnesota

M Tarhaz Raktarozasi es Szolgaltato Korlatolt Felelossegu Tarsasag		Hungary



SUBSIDIARY		JURISDICTION OF INCORPORATION/ ORGANIZATION

Norick Risk Funding Concepts, LLC		Minnesota

Northern Riverina Grains Pty. Ltd		Australia

Northwest Iowa Agronomy, LLC		Iowa

Osage Pipe Line Company, LLC		Delaware

Patriot Fuels Biodiesel, LLC		Illinois

Patriot Holdings, LLC		Illinois

Patriot Land Holdings, LLC		Illinois

Patriot Renewable Fuels, LLC		Illinois

PGG/HSC Feed Company, LLC		Oregon

PLC Insurance Agency, Inc.		Minnesota

Prairie Lakes Grain Storage LP		Minnesota

Producer Ag, LLC		Kansas

Pro-Tect Insurance Agency, LLC		Minnesota

Red Rock Cooperative Association		South Dakota

Rockville Propane Terminal LLC		Minnesota

Russell Consulting Group, LLC		Nebraska

CHS Agritrade Romania SRL, a subsidiary of CHS Europe S.a.r.l		Romania

RV Broadbent & Sons Pty Ltd		Australia

S.C. Silotrans S.R.L.		Romania

S.C. Transporter S.R.L., a subsidiary of S.C. Silotrans S.R.L.		Romania

S.C. Nutron S.R.L.		Romania

Serseris Ltd		India

Serseris Holdings Ltd		Cyprus

Shipman Bio Investment, LLC		Illinois

Sinav Limited		England

Sitio 0 de Quequen S.A.		Argentina

Solbar Europe BV		The Netherlands

CHS de Paraguay SRL, a subsidiary of CHS Singapore Trading Company PTE. LTD.		Paraguay

Southwest Crop Nutrients, LLC		Kansas

S.P.E. CHS Plant Extracts Ltd.		Israel

St. Hilaire Ag Insurance, Inc.		Minnesota



SUBSIDIARY		JURISDICTION OF INCORPORATION/ ORGANIZATION
St. Paul Maritime Corporation		Minnesota

Superior East LLC		Nebraska

Superior East II LLC		Nebraska

TEMCO, LLC		Delaware

Terminal Corredor Norte SA		Brazil

United Country Brands LLC		Delaware

Agriliance LLC, a subsidiary of United Country Brands LLC		Delaware

Ventura Foods, LLC		Delaware

Wagner Gas & Electric, Inc.		Wisconsin

Watertown Crop Nutrients LLC		South Dakota

West Central Distribution, LLC		Minnesota

Western Feed, LLC		Minnesota

Western Kansas Liquid Fertilizer Terminal		Kansas

Whitesville Crop Nutrients LLC		Indiana

Zeeland Lumber Holdings, LLC		Michigan

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-154819, 333-177326, and 333-212440) of CHS Inc. of our report dated November 9, 2017 relating to the financial statements and financial statement schedule, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Minneapolis, Minnesota

November 9, 2017

Exhibit 24.1

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Jay D. Debertin and Timothy Skidmore, and each of them, his or her true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities to sign a Form 10-K under the Securities Act of 1933, as amended, of CHS Inc. and any and all amendments thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, each acting alone, or the substitutes for such attorneys-in-fact and agents, may lawfully do or cause to be done by virtue hereof.



Name	Title	Date

/s/ Jay D. Debertin	Chief Executive Officer	9/7/2017
Jay D. Debertin	(principal executive officer)

/s/ Timothy Skidmore	Executive Vice President & Chief Financial Officer	9/7/2017
Timothy Skidmore	(principal financial officer)

/s/ Daniel Schurr	Chairman of the Board	9/7/2017
Daniel Schurr

/s/ Donald H. Anthony	Director	9/7/2017
Donald Anthony

/s/ Clinton J. Blew	Director	9/7/2017
Clinton J. Blew

/s/ Dennis Carlson	Director	9/7/2017
Dennis Carlson

/s/ Curt Eischens	Director	9/7/2017
Curt Eischens

/s/ Jon Erickson	Director	9/7/2017
Jon Erickson

/s/ Mark Farrell	Director	9/7/2017
Mark Farrell

/s/ Steven Fritel	Director	9/7/2017
Steve Fritel

/s/ Alan Holm	Director	9/7/2017
Alan Holm



Name	Title	Date

/s/ David Johnsrud	Director	9/7/2017
David Johnsrud

/s/ David R. Kayser	Director	9/7/2017
David R. Kayser

/s/ Randy Knecht	Director	9/7/2017
Randy Knecht

/s/ Greg Kruger	Director	9/7/2017
Greg Kruger

/s/ Edward Malesich	Director	9/7/2017
Edward Malesich

/s/ Perry Meyer	Director	9/7/2017
Perry Meyer

/s/ Steve Riegel	Director	9/7/2017
Steve Riegel

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Jay D. Debertin, certify that:


1.	I have reviewed this Annual Report on Form 10-K for the fiscal year ended August 31, 2017 , of CHS Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2017



	/s/ Jay D. Debertin
	Jay D. Debertin
	President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Timothy Skidmore, certify that:


1.	I have reviewed this Annual Report on Form 10-K for the fiscal year ended August 31, 2017 of CHS Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d.	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2017



	/s/ Timothy Skidmore
	Timothy Skidmore
	Executive Vice President and Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Annual Report on Form 10-K of CHS Inc. (the “Company”) for the fiscal year ended August 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jay D. Debertin, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ Jay D. Debertin
	Jay D. Debertin
	President and Chief Executive Officer
	November 9, 2017

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Annual Report on Form 10-K of CHS Inc. (the “Company”) for the fiscal year ended August 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy Skidmore, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



	/s/ Timothy Skidmore
	Timothy Skidmore
	Executive Vice President and Chief Financial Officer
	November 9, 2017