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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
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August 31, 2019
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or
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|||
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to .
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Minnesota
(State or other jurisdiction of
incorporation or organization)
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41-0251095
(I.R.S. Employer
Identification Number)
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5500 Cenex Drive
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Inver Grove Heights, Minnesota 55077
(Address of principal executive offices,
including zip code)
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(651) 355-6000
(Registrant’s telephone number,
including area code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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8% Cumulative Redeemable Preferred Stock
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CHSCP
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The Nasdaq Stock Market LLC
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Class B Cumulative Redeemable Preferred Stock, Series 1
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CHSCO
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The Nasdaq Stock Market LLC
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Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2
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CHSCN
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The Nasdaq Stock Market LLC
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Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3
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CHSCM
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The Nasdaq Stock Market LLC
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Class B Cumulative Redeemable Preferred Stock, Series 4
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CHSCL
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The Nasdaq Stock Market LLC
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer þ
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Smaller reporting company o
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Emerging growth company o
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Page
No.
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•
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levels of worldwide and domestic supplies;
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•
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capacities of domestic and foreign refineries;
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•
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ability of members of the Organization of Petroleum Exporting Countries ("OPEC") to agree to and maintain oil price and production controls, and price and level of imports;
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•
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disruption in supply;
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•
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political instability or conflict in oil-producing regions;
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•
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level of demand from consumers, agricultural producers and other customers;
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•
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price and availability of alternative fuels;
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•
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availability of pipeline capacity; and
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•
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domestic and foreign governmental regulations and taxes.
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•
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Weather conditions during the spring planting season and early summer crop nutrient and crop protection application season affect agronomy product volumes and profitability.
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•
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Adverse weather conditions, such as heavy snow or rainfall and any flooding as a result thereof, may cause transportation delays and increased transportation costs, or damage physical assets, especially facilities in low-lying areas near coasts and river banks or situated in hurricane-prone and rain-susceptible regions.
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•
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Changes in weather patterns may shift periods of demand for products or even regions in which our products are produced or distributed, which could require us to evolve our procurement and distribution processes.
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•
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Significant changes in water levels (up or down, as a result of flooding, drought or otherwise) may cause changes in agricultural activity, which could require changes to our operating and distribution activities, as well as significant capital improvements to our facilities.
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•
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We may experience increased insurance premiums and deductibles, or decreases in available coverage, for our assets in areas subject to adverse weather conditions.
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•
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Our oil refineries and other facilities are potential targets for terrorist attacks that could halt or discontinue production.
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•
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Our inability to negotiate acceptable contracts with unionized workers in our operations could result in strikes or work stoppages.
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•
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Our corporate headquarters, the facilities we own or the significant inventories we carry could be damaged or destroyed by catastrophic events, adverse weather conditions or contamination.
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•
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Someone may accidentally or intentionally introduce a computer virus to our information technology systems or breach our computer systems or other cyber resources.
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•
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An occurrence of a pandemic or epidemic disease affecting a substantial part of our workforce or our customers could cause an interruption in our business operations.
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Description
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Location(s)
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Energy
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Refineries
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Laurel, Montana, and McPherson, Kansas
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Propane terminals
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Biddeford, Maine; Glenwood and Rockville, Minnesota (Rockville is 50% owned by CHS); Hannaford, North Dakota; Ross, North Dakota; and Hixton, Wisconsin
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Transportation terminals/repair facilities
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12 locations in Iowa, Kansas, Minnesota, Montana, North Dakota, South Dakota, Washington and Wisconsin
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Petroleum and asphalt terminals/storage facilities
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11 locations in Montana, North Dakota and Wisconsin
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Pipelines:
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Cenex Pipeline, LLC
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Laurel, Montana, to Fargo, North Dakota
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Front Range Pipeline, LLC
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Canadian border to Laurel, Montana
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Jayhawk Pipeline, LLC
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Throughout Kansas, with branches in Nebraska, Oklahoma and Texas
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Conway Pipeline
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McPherson, Kansas, to Conway, Kansas
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Kaw Pipe Line Company
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Locations throughout Kansas
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Osage Pipe Line Company, LLC (50% owned by CHS McPherson Refinery Inc. ("CHS McPherson"))
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Oklahoma to Kansas
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Convenience stores/gas stations
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36 locations in Minnesota, Montana, North Dakota, South Dakota and Wyoming, six of which are leased
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Lubricant plants/warehouses
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Inver Grove Heights, Minnesota; Kenton, Ohio; and Amarillo, Texas; the location in Inver Grove Heights is leased
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Ag
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Global Grain Marketing
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Grain terminals
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18 locations in Illinois, Iowa, Louisiana, Minnesota, Wisconsin, Argentina, Brazil, Hungary, Romania and Ukraine
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Fertilizer terminal
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Argentina
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Grain marketing offices
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34 locations in Iowa, Minnesota, Nebraska, Argentina, Brazil, Bulgaria, Canada, China, Hungary, Jordan, Paraguay, Romania, Serbia, Singapore, South Korea, Spain, Switzerland, Taiwan, Ukraine and Uruguay; all locations are leased other than the offices in Davenport, Iowa, and Winona, Minnesota, which we own
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Country Operations
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Agri-operations facilities
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Approximately 470 community locations (of which some of the facilities are on leased land) located in Colorado, Idaho, Illinois, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Washington and Wisconsin
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Feed manufacturing facilities
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8 locations in Montana, North Dakota, Oregon and South Dakota
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Wholesale Agronomy
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Deep water port
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Galveston, Texas
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Terminals
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18 locations in Arkansas, Idaho, Illinois, Iowa, Kentucky, Louisiana, Minnesota, Mississippi, South Dakota, Tennessee and Texas; facilities in Little Rock, Arkansas; Owensboro, Kentucky; and Galveston, Texas, are on leased land
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Bulk chemical rail terminal facility
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Brooten, Minnesota
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•
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Income statement data for the year ended August 31, 2015, and balance sheet data as of August 31, 2016, and 2015, were restated in our Annual Report on Form 10-K for the year ended August 31, 2018, to correct certain amounts that had been previously misstated.
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•
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For all periods presented, income statement information has been revised to reflect the impact of adopting Accounting Standards Update ("ASU") No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Costs and Net Postretirement Benefit Cost during fiscal 2019. As a result of the adoption of this ASU, the non-service cost components of net periodic benefit costs have been reclassified from cost of goods sold ("COGS") and marketing, general and administrative expenses to outside of operating income within other (income) loss.
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Selected Consolidated Financial Data
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||||||||||||||||||
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2019
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2018
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2017
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2016
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2015
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||||||||||
Income Statement Data (for the years ended August 31):
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(Dollars in thousands)
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||||||||||||||||||
Revenues
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$
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31,900,453
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$
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32,683,347
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$
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32,037,426
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$
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30,355,260
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$
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34,517,452
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Cost of goods sold
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30,516,120
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31,591,227
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31,143,549
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29,383,459
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33,099,074
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|||||
Gross profit
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1,384,333
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1,092,120
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893,877
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971,801
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1,418,378
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|||||
Marketing, general and administrative expenses
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737,636
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677,465
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611,076
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597,531
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640,306
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|||||
Reserve and impairment charges (recoveries), net
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(12,905
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)
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(37,709
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)
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456,679
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75,036
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158,771
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|||||
Operating earnings (loss)
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659,602
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452,364
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(173,878
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)
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299,234
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619,301
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|||||
(Gain) loss on disposal of business
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(3,886
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)
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(131,816
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)
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2,190
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|
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—
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—
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|||||
Interest expense
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167,065
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149,202
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171,239
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113,704
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70,659
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|||||
Other (income) loss
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(82,423
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)
|
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(82,737
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)
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(99,803
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)
|
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(40,818
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)
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(43,868
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)
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|||||
Equity (income) loss from investments
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(236,755
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)
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(153,515
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)
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(137,338
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)
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(175,777
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)
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(107,850
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)
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|||||
Income (loss) before income taxes
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815,601
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|
|
671,230
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|
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(110,166
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)
|
|
402,125
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|
|
700,360
|
|
|||||
Income tax expense (benefit)
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(12,456
|
)
|
|
(104,076
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)
|
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(181,124
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)
|
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19,099
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|
|
(4,900
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)
|
|||||
Net income (loss)
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828,057
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|
|
775,306
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|
|
70,958
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|
|
383,026
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|
|
705,260
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|||||
Net income (loss) attributable to noncontrolling interests
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(1,823
|
)
|
|
(601
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)
|
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(634
|
)
|
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(223
|
)
|
|
(816
|
)
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|||||
Net income (loss) attributable to CHS Inc.
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$
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829,880
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|
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$
|
775,907
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|
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$
|
71,592
|
|
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$
|
383,249
|
|
|
$
|
706,076
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Balance Sheet Data (as of August 31):
|
|
|
|
|
|
|
|
|
|
|
|
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||||||
Working capital
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$
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1,078,888
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|
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$
|
759,034
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|
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$
|
148,565
|
|
|
$
|
338,446
|
|
|
$
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2,650,637
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|
Net property, plant and equipment
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5,088,708
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|
|
5,141,719
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|
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5,356,434
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|
|
5,488,323
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|
|
5,192,927
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|||||
Total assets
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16,447,494
|
|
|
16,381,178
|
|
|
15,818,922
|
|
|
17,149,639
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|
|
15,101,216
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|
|||||
Long-term debt, including current maturities
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1,789,111
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|
|
1,930,255
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|
|
2,179,793
|
|
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2,297,205
|
|
|
1,478,930
|
|
|||||
Total equities
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8,617,530
|
|
|
8,165,028
|
|
|
7,705,640
|
|
|
7,759,157
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|
|
7,551,439
|
|
•
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Overview
|
•
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Business Strategy
|
•
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Fiscal 2019 Highlights
|
•
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Fiscal 2020 Priorities
|
•
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Fiscal 2020 Outlook
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Off-Balance Sheet Financing Arrangements
|
•
|
Contractual Obligations
|
•
|
Critical Accounting Estimates
|
•
|
Effect of Inflation and Foreign Currency Transactions
|
•
|
Recent Accounting Pronouncements
|
•
|
Energy. Produces and provides primarily for the wholesale distribution and transportation of petroleum products.
|
•
|
Ag. Purchases and further processes or resells grains and oilseeds originated by our country operations business, by our member cooperatives and by third parties; also serves as a wholesaler and retailer of agronomy products.
|
•
|
Nitrogen Production. Consists solely of our equity method investment in CF Nitrogen and produces and distributes nitrogen fertilizer, a commodity chemical.
|
•
|
Margins were higher in our Energy segment compared to the prior year's results due to favorable pricing of heavy Canadian crude oil, which is processed by our refineries, experienced primarily during the first half of fiscal 2019.
|
•
|
We continued to experience significant pressure on grain volume and margins due to slow movement of grain that has resulted from unresolved trade issues between the United States and its trading partners.
|
•
|
Poor weather conditions, including heavy snow during the spring and significant rainfall during the summer of 2019 negatively impacted our Ag segment operations. Severe flooding resulting from the heavy snow and rainfall contributed to railroad delays and prevented or delayed planting, which resulted in increased costs, reduced volumes and fewer planted acres. Further, navigable waterways experienced high, swift water conditions that impeded barge traffic, severely affecting our ability to economically supply fertilizer and grains to their associated buyers.
|
•
|
Through various efforts and mechanisms, we recovered a net $12.9 million of previously recorded reserve and impairment charges. This consisted of recoveries of approximately $109.4 million in fiscal 2019, partially offset by additional reserves and impairment charges of $96.5 million as more fully described in Results of Operations.
|
•
|
Manufacturing changes within our Energy business have allowed us to benefit from certain federal excise tax credits. Following the resolution of the underlying gain contingencies associated with tax credits during fiscal 2019, a gain of $80.8 million was recognized as a reduction of COGS in our Consolidated Statements of Operations. We are uncertain whether similar gains may reoccur in the future.
|
•
|
On March 1, 2019, we completed the acquisition of the remaining 75% ownership interest in West Central Distribution, LLC ("WCD"), a full-service wholesale distributor of agronomy products that was not previously owned by us.
|
•
|
Earnings from our equity method investments in CF Nitrogen and Ventura Foods remained strong compared to the prior year.
|
•
|
As more fully described in Item 9A, Controls and Procedures, of this Annual Report on Form 10-K, we continued dedicating significant internal and external resources, as well as management and Board focus on improving our internal control environment resulting in remediation of three material weaknesses identified in our fiscal 2018 Annual Report on Form 10-K.
|
•
|
Identify and execute on opportunities to deliver sustainable cost savings across the enterprise.
|
•
|
Successfully achieve milestones for implementation of our new ERP system to drive efficiency and growth.
|
•
|
Manage and leverage information to enable business growth and drive competitive advantage through data-driven decisions and insight.
|
•
|
Continue to strengthen and improve our internal control environment with an emphasis on operational excellence and continuous improvement.
|
|
For the Years Ended August 31,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
|
Dollars
|
|
% of Revenues*
|
|
Dollars
|
|
% of Revenues*
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
Revenues
|
$
|
31,900,453
|
|
|
100.0
|
%
|
|
$
|
32,683,347
|
|
|
100.0
|
%
|
Cost of goods sold
|
30,516,120
|
|
|
95.7
|
|
|
31,591,227
|
|
|
96.7
|
|
||
Gross profit
|
1,384,333
|
|
|
4.3
|
|
|
1,092,120
|
|
|
3.3
|
|
||
Marketing, general and administrative expenses
|
737,636
|
|
|
2.3
|
|
|
677,465
|
|
|
2.1
|
|
||
Reserve and impairment charges (recoveries), net
|
(12,905
|
)
|
|
—
|
|
|
(37,709
|
)
|
|
(0.1
|
)
|
||
Operating earnings (loss)
|
659,602
|
|
|
2.1
|
|
|
452,364
|
|
|
1.4
|
|
||
(Gain) loss on disposal of business
|
(3,886
|
)
|
|
—
|
|
|
(131,816
|
)
|
|
(0.4
|
)
|
||
Interest expense
|
167,065
|
|
|
0.5
|
|
|
149,202
|
|
|
0.5
|
|
||
Other (income) loss
|
(82,423
|
)
|
|
(0.3
|
)
|
|
(82,737
|
)
|
|
(0.3
|
)
|
||
Equity (income) loss from investments
|
(236,755
|
)
|
|
(0.7
|
)
|
|
(153,515
|
)
|
|
(0.5
|
)
|
||
Income (loss) before income taxes
|
815,601
|
|
|
2.6
|
|
|
671,230
|
|
|
2.1
|
|
||
Income tax expense (benefit)
|
(12,456
|
)
|
|
—
|
|
|
(104,076
|
)
|
|
(0.3
|
)
|
||
Net income (loss)
|
828,057
|
|
|
2.6
|
|
|
775,306
|
|
|
2.4
|
|
||
Net income (loss) attributable to noncontrolling interests
|
(1,823
|
)
|
|
—
|
|
|
(601
|
)
|
|
—
|
|
||
Net income (loss) attributable to CHS Inc.
|
$
|
829,880
|
|
|
2.6
|
%
|
|
$
|
775,907
|
|
|
2.4
|
%
|
|
For the Years Ended August 31,
|
||||
|
2019
|
|
2018
|
||
Refinery throughput volumes
|
(Barrels per day)
|
||||
Heavy, high-sulfur crude oil
|
92,047
|
|
|
84,339
|
|
All other crude oil
|
58,366
|
|
|
66,785
|
|
Other feedstocks and blendstocks
|
10,724
|
|
|
17,713
|
|
Total refinery throughput volumes
|
161,137
|
|
|
168,837
|
|
Refined fuel yields
|
|
|
|
||
Gasolines
|
76,563
|
|
|
86,115
|
|
Distillates
|
66,661
|
|
|
65,060
|
|
|
For the Years Ended August 31,
|
||
|
2019
|
|
2018
|
Market indicators
|
|
|
|
WTI crude oil (dollars per barrel)
|
$58.59
|
|
$62.23
|
WTI - WCS crude oil differential (dollars per barrel)
|
$20.23
|
|
$17.92
|
Group 3 2:1:1 crack spread (dollars per barrel)*
|
$18.74
|
|
$19.08
|
Group 3 5:3:2 crack spread (dollars per barrel)*
|
$17.67
|
|
$18.46
|
D6 ethanol RIN (dollars per RIN)
|
$0.1713
|
|
$0.5280
|
D4 ethanol RIN (dollars per RIN)
|
$0.4273
|
|
$0.7221
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Income (loss) before income taxes
|
$
|
618,188
|
|
|
$
|
452,108
|
|
|
$
|
166,080
|
|
|
36.7
|
%
|
|
|
2019 vs. 2018
|
||
|
|
(Dollars in thousands)
|
||
Volume
|
|
$
|
(10,369
|
)
|
Price
|
|
298,979
|
|
|
Transportation, retail and other
|
|
(30,976
|
)
|
|
Non-gross profit related activity+
|
|
(91,554
|
)
|
|
Total change in Energy IBIT
|
|
$
|
166,080
|
|
•
|
Improved market conditions in our refined fuels business, primarily driven by favorable pricing on heavy Canadian crude oil, which is processed by our refineries. Favorable crude oil pricing, as well as hedging gains and decreased renewable energy credit costs during fiscal 2019, contributed to a $215.7 million IBIT increase.
|
•
|
Manufacturing changes within our Energy business have allowed us to benefit from certain federal excise tax credits. Following resolution of the underlying gain contingencies associated with the tax credits during fiscal 2019, a gain of $80.8 million was recognized as a reduction of COGS in our Consolidated Statements of Operations.
|
•
|
The increased IBIT resulting from improved market conditions in our refined fuels business was partially offset by the turnaround at our McPherson refinery during April and May 2019. The decreased IBIT related to the McPherson refinery turnaround was partially offset by increased IBIT at our Laurel refinery following a turnaround during May 2018 that did not reoccur during fiscal 2019.
|
•
|
Increases to IBIT were also partially offset by gains totaling $65.9 million recorded in other income in connection with the sale of certain assets during fiscal 2018, including the sale of 34 Zip Trip stores located in the Pacific Northwest and sale of the Council Bluffs pipeline and refined fuels terminal in Council Bluffs, Iowa, that did not reoccur during fiscal 2019.
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Income (loss) before income taxes
|
$
|
43,016
|
|
|
$
|
74,258
|
|
|
$
|
(31,242
|
)
|
|
(42.1
|
)%
|
|
|
2019 vs. 2018
|
||
|
|
(Dollars in thousands)
|
||
Volume
|
|
$
|
59,344
|
|
Price
|
|
(31,648
|
)
|
|
Non-gross profit related activity+
|
|
(58,938
|
)
|
|
Total change in Ag IBIT
|
|
$
|
(31,242
|
)
|
•
|
A combination of higher non-gross-profit-related expenses contributed to a $58.9 million IBIT decrease, primarily related to increased reserve and impairment charges in connection with certain loan loss reserves associated with the challenging agricultural environment in our country operations business, including the impact of an out-of-period adjustment recorded during the period increasing reserve and impairment charges (recoveries), net by $25.5 million. Decreased interest income and increased interest expense also contributed to the IBIT decrease; however, the impacts of these changes were mostly offset by a $19.1 million gain recognized in connection with our acquisition of the remaining 75% ownership interest in WCD that we did not previously own during fiscal 2019.
|
•
|
Poor weather conditions, including heavy snow during the spring and heavy rainfall during the summer of 2019 in the agricultural regions of the United States and continuing global trade tensions between the United States and foreign trading partners resulted in generally decreased margins and decreased or flat volumes across most of our Ag segment during fiscal 2019.
|
•
|
The decreased IBIT across much of the Ag segment was partially offset by increased rebates and increased volumes associated with certain agronomy products, which was attributable to a $12.9 million increase of IBIT that resulted from the March 1, 2019, acquisition of the remaining 75% ownership interest in WCD that we did not previously own, the results of which were not included in the comparable period of the prior fiscal year.
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Nitrogen Production IBIT*
|
$
|
72,870
|
|
|
$
|
38,838
|
|
|
$
|
34,032
|
|
|
87.6
|
%
|
Corporate and Other IBIT
|
$
|
81,527
|
|
|
$
|
106,026
|
|
|
$
|
(24,499
|
)
|
|
(23.1
|
)%
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Revenues
|
$
|
7,119,076
|
|
|
$
|
7,589,119
|
|
|
$
|
(470,043
|
)
|
|
(6.2
|
)%
|
|
|
2019 vs. 2018
|
||
|
|
(Dollars in thousands)
|
||
Volume
|
|
$
|
(25,223
|
)
|
Price
|
|
(317,622
|
)
|
|
Transportation, retail and other
|
|
(127,198
|
)
|
|
Total change in Energy revenues
|
|
$
|
(470,043
|
)
|
•
|
The net impact of price and volume changes associated with other energy products, including decreased refined fuels and propane selling prices, contributed to revenue decreases of $180.7 million and $142.5 million, respectively. Decreased volumes of refined fuels and lubricants also contributed to $64.7 million and $19.2 million revenue decreases, respectively. The decreased volumes were attributed primarily to poor weather conditions that prevented and delayed spring planting of crops across much of the agricultural region of the United States, lowering demand for our diesel fuel products. These decreases were partially offset by increased propane volumes that contributed to a $58.7 million increase of revenues.
|
•
|
Transportation, retail and other revenues decreased as a result of the sale of 34 Zip Trip stores located in the Pacific Northwest during the third quarter of fiscal 2018. Revenues for these stores were included in our Energy segment results of operations during most of fiscal 2018, but were not present in fiscal 2019.
|
•
|
Transportation, retail and other revenues also decreased as a result of the impact of applying new revenue recognition guidance under Accounting Standards Codification ("ASC") Topic 606 during fiscal 2019 compared to previous guidance during the prior fiscal year, which resulted in a $52.1 million decrease of revenues due to certain contracts being recognized on a net basis rather than a gross basis.
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Revenues
|
$
|
24,720,072
|
|
|
$
|
25,037,481
|
|
|
$
|
(317,409
|
)
|
|
(1.3
|
)%
|
|
|
2019 vs. 2018
|
||
|
|
(Dollars in thousands)
|
||
Volume
|
|
$
|
(29,341
|
)
|
Price
|
|
(288,068
|
)
|
|
Total change in Ag revenues
|
|
$
|
(317,409
|
)
|
•
|
Decreased volumes associated with grain and oilseed contributed to a $600.9 million decrease of revenues. The decreased volumes resulted primarily from continuing global trade tensions between the United States and foreign trading partners.
|
•
|
Decreased prices associated with grain and oilseed, feed and farm supplies, renewable fuels and processing and food ingredients all contributed to decreased revenues, the largest of which were attributable to decreased renewable fuel and grain and oilseed prices, which decreased revenues by $261.9 million and $134.9 million, respectively. Although ethanol demand has remained relatively stable in North America, margins and underlying prices remained under pressure for most of fiscal 2019 as ethanol production and inventory supplies remained at high levels. The decreased prices also resulted from the poor weather conditions during the spring of 2019 in the agricultural region of the United States that prevented and delayed planting of crops (impacting the mix and timing of products sold) and continuing global trade tensions between the United States and foreign trading partners.
|
•
|
The decreased revenues across much of the Ag segment were partially offset by increased pricing and volumes associated with certain agronomy products, including increased pricing of crop nutrient products due to global supply and demand and a $456.2 million increase of revenues that resulted from the March 1, 2019, acquisition of the remaining 75% ownership interest in WCD that we did not previously own and the results of which were not included in the prior fiscal year.
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Corporate and Other revenues
|
$
|
61,305
|
|
|
$
|
56,747
|
|
|
$
|
4,558
|
|
|
8.0
|
%
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Cost of goods sold
|
$
|
6,303,323
|
|
|
$
|
7,031,000
|
|
|
$
|
(727,677
|
)
|
|
(10.3
|
)%
|
|
|
2019 vs. 2018
|
||
|
|
(Dollars in thousands)
|
||
Volume
|
|
$
|
(14,855
|
)
|
Price
|
|
(616,600
|
)
|
|
Transportation, retail and other
|
|
(96,222
|
)
|
|
Total change in Energy COGS
|
|
$
|
(727,677
|
)
|
•
|
Decreased refined fuels costs and volumes contributed to $396.4 million and $59.8 million decreases of COGS, respectively. Decreased costs for refined fuels was driven primarily by favorable pricing on heavy Canadian crude oil, which is processed by our refineries, as well as decreased renewable energy credit costs. The decreased volumes were attributed primarily to poor weather conditions that prevented and delayed spring planting of crops across much of the agricultural region of the United States, lowering demand for our diesel fuel products.
|
•
|
Decreased propane costs contributed to a $147.7 million decrease of COGS; however, the decrease was partially offset by an 8% increase in propane volumes, which contributed to a $60.2 million increase of COGS.
|
•
|
A gain of $80.8 million recognized as a reduction of COGS in our Consolidated Statements of Operations during fiscal 2019, which resulted from manufacturing changes in our Energy business that allowed us to benefit from certain federal excise tax credits.
|
•
|
Transportation, retail and other COGS decreased primarily as a result of the sale of 34 Zip Trip stores located in the Pacific Northwest that were sold during the third quarter of fiscal 2018. Costs associated with these stores were included in our Energy segment results of operations during most of fiscal 2018, but were not present in fiscal 2019.
|
•
|
Other COGS also decreased as a result of the impact of applying new revenue recognition guidance under ASC Topic 606 during fiscal 2019 compared to previous guidance during the comparable period of the prior fiscal year, which resulted in a $52.1 million decrease of COGS due to certain contracts being recognized on a net basis rather than a gross basis.
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Cost of goods sold
|
$
|
24,215,749
|
|
|
$
|
24,560,854
|
|
|
$
|
(345,105
|
)
|
|
(1.4
|
)%
|
|
|
2019 vs. 2018
|
||
|
|
(Dollars in thousands)
|
||
Volume
|
|
$
|
(89,447
|
)
|
Price
|
|
(255,658
|
)
|
|
Total change in Ag COGS
|
|
$
|
(345,105
|
)
|
•
|
Decreased volumes associated with grain and oilseed contributed to a $595.8 million decrease of COGS. The decreased volumes resulted primarily from continuing global trade tensions between the United States and foreign trading partners.
|
•
|
Decreased costs associated with grain and oilseed, feed and farm supplies, renewable fuels and processing and food ingredients contributed to decreased COGS, the largest of which were attributable to decreased renewable fuel and feed and farm supply costs, which decreased COGS by $223.5 million and $182.5 million, respectively. Although ethanol demand has remained relatively stable in North America, margins remained under pressure for most of fiscal 2019 as ethanol production and inventory supplies remained at high levels. The decreased costs also resulted from the poor weather conditions, including heavy snow and rainfall, during the spring of 2019 in the agricultural region of the United States that prevented and delayed planting of crops (impacting the mix and timing of products sold) and continuing global trade tensions between the United States and foreign trading partners.
|
•
|
The decreased COGS across much of the Ag segment was partially offset by increased volumes and costs associated with certain agronomy products and processing and food ingredients, most of which was attributable to an increase of COGS that resulted from our acquisition of the remaining 75% ownership interest in WCD that we did not previously own on March 1, 2019, the results of which were not included in the comparable period of the prior fiscal year.
|
|
For the Years Ended August 31,
|
|
Change
|
||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
||||||
|
(Dollars in thousands)
|
|
|
|
|
||||||||
Nitrogen Production COGS
|
$
|
2,879
|
|
|
$
|
1,340
|
|
|
$
|
1,539
|
|
|
NM*
|
Corporate and Other COGS
|
$
|
(5,831
|
)
|
|
$
|
(3,307
|
)
|
|
$
|
(2,524
|
)
|
|
NM*
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Marketing, general and administrative expenses
|
$
|
737,636
|
|
|
$
|
677,465
|
|
|
$
|
60,171
|
|
|
8.9
|
%
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Reserve and impairment charges (recoveries), net
|
$
|
(12,905
|
)
|
|
$
|
(37,709
|
)
|
|
$
|
24,804
|
|
|
65.8
|
%
|
|
For the Years Ended August 31,
|
|
Change
|
||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
||||||
|
(Dollars in thousands)
|
|
|
|
|
||||||||
Gain (loss) on disposal of business
|
$
|
3,886
|
|
|
$
|
131,816
|
|
|
$
|
(127,930
|
)
|
|
NM*
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Interest expense
|
$
|
167,065
|
|
|
$
|
149,202
|
|
|
$
|
17,863
|
|
|
12.0
|
%
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Other income (loss)
|
$
|
82,423
|
|
|
$
|
82,737
|
|
|
$
|
(314
|
)
|
|
(0.4
|
)%
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Equity income (loss) from investments*
|
$
|
236,755
|
|
|
$
|
153,515
|
|
|
$
|
83,240
|
|
|
54.2
|
%
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Income tax benefit (expense)
|
$
|
12,456
|
|
|
$
|
104,076
|
|
|
$
|
(91,620
|
)
|
|
(88.0
|
)%
|
|
For the Years Ended August 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Net cash provided by (used in) operating activities
|
$
|
1,139,931
|
|
|
$
|
1,074,497
|
|
|
$
|
65,434
|
|
|
6.1
|
%
|
Net cash provided by (used in) investing activities
|
(661,283
|
)
|
|
(79,524
|
)
|
|
(581,759
|
)
|
|
(731.6
|
)%
|
|||
Net cash provided by (used in) financing activities
|
(725,646
|
)
|
|
(732,170
|
)
|
|
6,524
|
|
|
0.9
|
%
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
2,733
|
|
|
8,864
|
|
|
(6,131
|
)
|
|
(69.2
|
)%
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
(244,265
|
)
|
|
$
|
271,667
|
|
|
$
|
(515,932
|
)
|
|
(189.9
|
)%
|
•
|
Cash outflows of approximately $223.4 million for planned major maintenance at our McPherson refinery during fiscal 2019.
|
•
|
Proceeds of $230.0 million from the sale of certain North American businesses/assets during fiscal 2018 that did not reoccur during fiscal 2019.
|
•
|
In March 2019, we acquired the remaining 75% ownership interest in WCD that we did not previously own for $106.7 million, of which net cash flows were reduced by $8.0 million of cash acquired.
|
•
|
Increased acquisitions of property, plant and equipment for selective growth capital investments.
|
•
|
The increased uses of cash referenced above were partially offset by certain other investing activities, including increased payments from customer financing and decreased investments redeemed.
|
•
|
Decreased net cash outflows associated with our notes payable and long-term borrowings.
|
•
|
The decrease was partially offset by payment of cash patronage of $75.8 million during fiscal 2019 and increased equity redemption payments of $76.7 million.
|
•
|
Capital expenditures. We expect total capital expenditures for fiscal 2020 to be approximately $524.8 million, compared to capital expenditures of $443.2 million in fiscal 2019. Included in that amount for fiscal 2020 is approximately $105.0 million for the acquisition of property, plant and equipment at our Laurel and McPherson refineries.
|
•
|
Debt and interest. We expect to repay approximately $39.2 million of long-term debt and capital lease obligations and incur interest payments related to long-term debt of approximately $76.2 million during fiscal 2020.
|
•
|
Preferred stock dividends. We had approximately $2.3 billion of preferred stock outstanding as of August 31, 2019. We expect to pay dividends on our preferred stock of approximately $168.7 million during fiscal 2020.
|
•
|
Patronage. Our Board of Directors authorized approximately $90.0 million of our fiscal 2019 patronage sourced earnings to be paid to our member owners during fiscal 2020.
|
•
|
Equity redemptions. Our Board of Directors authorized and we expect total redemptions of approximately $90.0 million to be distributed in fiscal 2020 and in the form of redemptions of qualified and non-qualified equity owned by individual producer members and association members.
|
Primary Revolving Credit Facilities
|
|
Maturity
|
|
Total Capacity
|
|
Borrowings Outstanding
|
|
Interest Rates
|
||||||||
|
|
|
|
2019
|
|
2019
|
|
2018
|
|
|
||||||
|
|
|
|
(Dollars in thousands)
|
|
|
||||||||||
Committed five-year unsecured facility
|
|
2024
|
|
$
|
2,750,000
|
|
|
$
|
335,000
|
|
|
$
|
—
|
|
|
LIBOR or base rate +0.00% to 1.45%
|
Uncommitted bilateral facilities
|
|
2020
|
|
630,000
|
|
|
430,000
|
|
|
515,000
|
|
|
LIBOR or base rate +0.00% to 1.20%
|
|
For the Years Ended August 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Private placement debt
|
$
|
1,379,840
|
|
|
$
|
1,510,547
|
|
Bank financing
|
366,000
|
|
|
366,000
|
|
||
Capital lease obligations
|
28,239
|
|
|
25,280
|
|
||
Other notes and contract payable
|
18,601
|
|
|
32,607
|
|
||
Deferred financing costs
|
(3,569
|
)
|
|
(4,179
|
)
|
||
|
$
|
1,789,111
|
|
|
$
|
1,930,255
|
|
|
2020
|
|
2019
|
|
2018
|
|
2017
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Patronage distributed in cash
|
$
|
90.0
|
|
|
$
|
75.8
|
|
|
$
|
—
|
|
|
$
|
103.9
|
|
Patronage distributed in equity
|
472.4
|
|
|
353.0
|
|
|
128.8
|
|
|
153.6
|
|
||||
Total patronage distributed
|
$
|
562.4
|
|
|
$
|
428.8
|
|
|
$
|
128.8
|
|
|
$
|
257.5
|
|
|
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)
|
$
|
1,754,752
|
|
|
$
|
32,812
|
|
|
$
|
180,729
|
|
|
$
|
284,686
|
|
|
$
|
1,256,525
|
|
Interest payments (2)
|
575,305
|
|
|
76,217
|
|
|
142,227
|
|
|
122,001
|
|
|
234,860
|
|
|||||
Capital lease obligations (3)
|
31,684
|
|
|
6,761
|
|
|
11,220
|
|
|
7,186
|
|
|
6,517
|
|
|||||
Operating lease obligations
|
341,988
|
|
|
87,168
|
|
|
101,046
|
|
|
61,121
|
|
|
92,653
|
|
|||||
Purchase obligations (4)
|
7,094,073
|
|
|
5,696,389
|
|
|
719,274
|
|
|
256,480
|
|
|
421,930
|
|
|||||
Other liabilities (5)
|
496,356
|
|
|
—
|
|
|
35,355
|
|
|
17,143
|
|
|
443,858
|
|
|||||
Total obligations
|
$
|
10,294,158
|
|
|
$
|
5,899,347
|
|
|
$
|
1,189,851
|
|
|
$
|
748,617
|
|
|
$
|
2,456,343
|
|
Expected Maturity Date
|
|||||||||||||||||||||||||||||||
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
|
Fair Value
Asset (Liability)
|
||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Variable rate miscellaneous
short-term notes payable
|
$
|
1,330,550
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,330,550
|
|
|
$
|
(1,330,550
|
)
|
Average interest rate
|
3.4
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.4
|
%
|
|
—
|
|
||||||||
Variable rate CHS Capital short-term notes payable
|
$
|
825,558
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
825,558
|
|
|
$
|
(825,558
|
)
|
Average interest rate
|
2.9
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.9
|
%
|
|
—
|
|
||||||||
Fixed rate long-term debt
|
$
|
32,812
|
|
|
$
|
180,663
|
|
|
$
|
66
|
|
|
$
|
282,066
|
|
|
$
|
2,620
|
|
|
$
|
890,525
|
|
|
$
|
1,388,752
|
|
|
$
|
(1,505,213
|
)
|
Average interest rate
|
4.4
|
%
|
|
4.5
|
%
|
|
5.1
|
%
|
|
4.5
|
%
|
|
5.1
|
%
|
|
4.6
|
%
|
|
4.4
|
%
|
|
—
|
|
||||||||
Variable rate long-term debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
366,000
|
|
|
$
|
366,000
|
|
|
$
|
(372,489
|
)
|
Average interest rate (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
range
|
|
|
range
|
|
|
—
|
|
||||||||
Interest Rate Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed to variable long-term debt interest rate swaps
|
$
|
—
|
|
|
$
|
160,000
|
|
|
$
|
—
|
|
|
$
|
130,000
|
|
|
$
|
—
|
|
|
$
|
75,000
|
|
|
$
|
365,000
|
|
|
$
|
9,841
|
|
Average pay rate (b)
|
—
|
|
|
range
|
|
|
—
|
|
|
range
|
|
|
—
|
|
|
range
|
|
|
range
|
|
|
—
|
|
||||||||
Average receive rate (c)
|
—
|
|
|
range
|
|
|
—
|
|
|
range
|
|
|
—
|
|
|
range
|
|
|
range
|
|
|
—
|
|
|
For the Three Months Ended
|
||||||||||||||
|
August 31,
2019 |
|
May 31,
2019 |
|
February 28,
2019 |
|
November 30,
2018 |
||||||||
|
(Unaudited)
(Dollars in thousands)
|
||||||||||||||
Revenues
|
$
|
8,434,684
|
|
|
$
|
8,497,941
|
|
|
$
|
6,483,539
|
|
|
$
|
8,484,289
|
|
Gross profit
|
262,508
|
|
|
223,771
|
|
|
427,413
|
|
|
470,641
|
|
||||
Income (loss) before income taxes
|
124,935
|
|
|
61,579
|
|
|
261,855
|
|
|
367,232
|
|
||||
Net income (loss)
|
177,925
|
|
|
54,713
|
|
|
248,304
|
|
|
347,115
|
|
||||
Net income (loss) attributable to CHS Inc.
|
178,990
|
|
|
54,620
|
|
|
248,766
|
|
|
347,504
|
|
|
For the Three Months Ended
|
||||||||||||||
|
August 31,
2018 |
|
May 31,
2018 |
|
February 28,
2018 |
|
November 30,
2017 |
||||||||
|
(Unaudited)
(Dollars in thousands)
|
||||||||||||||
Revenues
|
$
|
8,583,982
|
|
|
$
|
9,087,328
|
|
|
$
|
6,980,153
|
|
|
$
|
8,031,884
|
|
Gross profit
|
391,027
|
|
|
245,632
|
|
|
134,969
|
|
|
320,492
|
|
||||
Income (loss) before income taxes
|
248,332
|
|
|
236,839
|
|
|
(21,729
|
)
|
|
207,788
|
|
||||
Net income (loss)
|
240,545
|
|
|
181,620
|
|
|
165,959
|
|
|
187,182
|
|
||||
Net income (loss) attributable to CHS Inc.
|
240,447
|
|
|
181,807
|
|
|
166,007
|
|
|
187,646
|
|
•
|
We did not design and consistently maintain effective monitoring controls related to the design and operating effectiveness of our internal controls. Specifically, we did not implement and reinforce an adequate process for monitoring the proper functioning of internal control to verify that our accounting policies and procedures are consistently and adequately being performed, as relevant, by a sufficient number of resources with the appropriate knowledge and training.
|
•
|
We did not design and maintain effective controls over certain information technology ("IT") general controls for information systems relevant to the preparation of our financial statements. Specifically, we did not design and maintain sufficient (i) testing and approval controls for program development to ensure the implementation of a new ERP system was aligned with business and IT requirements, or (ii) user access controls to ensure appropriate segregation of duties, or that adequately restrict user and privileged access to certain financial applications, programs and data to appropriate personnel. These control deficiencies resulted in misstatements to the inventory and COGS and related disclosures for the third quarter of fiscal 2018. Additionally, the deficiencies, when aggregated, could impact the maintenance of effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, our management has determined that these control deficiencies constitute material weaknesses.
|
•
|
We did not design and maintain effective controls over the review of journal entries and account reconciliations in our grain marketing operations. Specifically, we did not design and maintain effective controls to ensure journal entries and account reconciliations were (i) properly prepared with sufficient supporting documentation or (ii) reviewed and approved to ensure accuracy and completeness of the resulting journal entries.
|
•
|
We did not design and maintain effective internal controls over the accounting for intercompany transactions. Specifically, we did not design and maintain effective controls to ensure intercompany transactions are completely and accurately identified, reconciled, evaluated and eliminated.
|
•
|
We did not design and maintain effective controls over the accounting for freight contracts in our grain marketing operations. Specifically, we did not design and maintain effective controls to verify (i) review over the accounting for freight contracts was being performed by appropriate individuals with the requisite level of knowledge,
|
•
|
Held bi-weekly steering committee meetings consisting of senior finance, legal, IT, operational and human resources leaders to oversee the design and implementation of remediation plans.
|
•
|
Continued developing, executing and monitoring of detailed remediation plans in response to each of the remaining previously identified material weaknesses.
|
•
|
Continued execution of our plans designed to remediate the two remaining previously identified material weaknesses, including (1) implementing and reinforcing an adequate process for monitoring proper functioning of internal controls to verify that our accounting policies and procedures are consistently and adequately being performed as relevant by a sufficient number of resources with the appropriate knowledge and training and (2) designing and maintaining effective controls over certain IT general controls for information systems that are relevant to the preparation of our financial statements and testing the effectiveness of remediated controls.
|
•
|
Continued hiring for our teams in functional areas as necessary to ensure the size and skill set of those teams is adequate given the size, scale and complexity of our organization, industry and required internal controls over financial reporting.
|
Name
|
|
Age
|
|
Director
Region
|
|
Director Since
|
David Beckman
|
|
59
|
|
8
|
|
2018
|
Clinton J. Blew
|
|
42
|
|
8
|
|
2010
|
Dennis Carlson
|
|
58
|
|
3
|
|
2001
|
Scott Cordes
|
|
58
|
|
1
|
|
2017
|
Jon Erickson
|
|
59
|
|
3
|
|
2011
|
Mark Farrell
|
|
60
|
|
5
|
|
2016
|
Steve Fritel
|
|
64
|
|
3
|
|
2003
|
Alan Holm
|
|
59
|
|
1
|
|
2013
|
David Johnsrud
|
|
65
|
|
1
|
|
2012
|
Tracy Jones
|
|
56
|
|
5
|
|
2017
|
David Kayser
|
|
60
|
|
4
|
|
2006
|
Russell Kehl
|
|
44
|
|
6
|
|
2017
|
Randy Knecht
|
|
69
|
|
4
|
|
2001
|
Edward Malesich
|
|
66
|
|
2
|
|
2011
|
Perry Meyer
|
|
65
|
|
1
|
|
2014
|
Steve Riegel
|
|
67
|
|
8
|
|
2006
|
Daniel Schurr
|
|
54
|
|
7
|
|
2006
|
•
|
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 individual must be a Class A individual 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 CHS or of a cooperative association member.
|
Name
|
Age
|
|
Position
|
Jay Debertin
|
59
|
|
President and Chief Executive Officer
|
Richard Dusek
|
55
|
|
Executive Vice President, CHS Country Operations
|
Darin Hunhoff
|
49
|
|
Executive Vice President, Energy and Processing
|
Timothy Skidmore
|
58
|
|
Executive Vice President and Chief Financial Officer
|
James Zappa
|
55
|
|
Executive Vice President and General Counsel
|
David Black
|
53
|
|
Senior Vice President, Enterprise Strategy and Chief Information Officer
|
John Griffith
|
50
|
|
Senior Vice President, CHS Global Grain Marketing and CHS Renewable Fuels
|
Gary Halvorson
|
46
|
|
Senior Vice President, CHS Agronomy
|
Mary Kaul-Hottinger
|
55
|
|
Senior Vice President, Human Resources
|
Name
|
Position
|
Jay Debertin
|
President and Chief Executive Officer
|
Timothy Skidmore
|
Executive Vice President and Chief Financial Officer
|
Darin Hunhoff
|
Executive Vice President, Energy and Processing
|
James Zappa
|
Executive Vice President and General Counsel
|
Richard Dusek
|
Executive Vice President, CHS Country Operations
|
•
|
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, to reward annual and sustained performance over the long term; and
|
•
|
Ensure compliance with government mandates and regulations.
|
Comparator Group
|
|||
Archer Daniels Midland
|
ConAgra Brands
|
Kinder Morgan
|
Mosaic
|
Bunge
|
ConocoPhillips
|
Koch Industries
|
Nutrien
|
CF Industries
|
Dean Foods
|
Land O'Lakes
|
Valero Energy
|
Cargill
|
HollyFrontier
|
Marathon Petroleum
|
Williams Companies
|
Pay Element
|
Definition of Pay Element
|
Purpose 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 and individual 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 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 ("ROAE") performance or Return on Invested Capital ("ROIC") 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 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 of 1986, as amended ("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 benefits, 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
|
Performance Level
|
|
CHS Company
Performance Goal
|
|
CHS Company Performance Goal
|
|
Percent of Target Award
|
Maximum
|
|
6.9% ROIC
|
|
6.9% ROA
|
|
200%
|
Target
|
|
5.9% ROIC
|
|
6.1% ROA
|
|
100%
|
Threshold
|
|
4.9% ROIC
|
|
5.2% ROA
|
|
50%
|
Below threshold
|
|
<4.9% ROIC
|
|
<5.2% ROA
|
|
0%
|
Name
|
Variable Pay
|
||
|
(Dollars)
|
||
Jay Debertin
|
$
|
3,713,064
|
|
Timothy Skidmore
|
1,212,064
|
|
|
Darin Hunhoff
|
1,279,950
|
|
|
James Zappa
|
1,207,500
|
|
|
Richard Dusek
|
1,110,515
|
|
ROIC
|
|
Profit Sharing Award
|
6.9%
|
|
5%
|
6.4%
|
|
4%
|
5.9%
|
|
3%
|
5.4%
|
|
2%
|
4.9%
|
|
1%
|
Performance Level
|
|
CHS Three Year-ROAE
|
|
Percent of Target Award
|
Superior performance maximum
|
|
20%
|
|
400%
|
Maximum
|
|
9%
|
|
200%
|
Target
|
|
7%
|
|
100%
|
Threshold
|
|
5.5%
|
|
50%
|
Below threshold
|
|
<5.5%
|
|
0%
|
Name
|
LTIP Payments
|
||
|
(Dollars)
|
||
Jay Debertin
|
$
|
1,692,275
|
|
Timothy Skidmore
|
403,187
|
|
|
Darin Hunhoff
|
351,304
|
|
|
James Zappa
|
331,220
|
|
|
Richard Dusek
|
250,413
|
|
•
|
CHS Inc. Pension Plan
|
•
|
CHS Inc. 401(k) Plan
|
•
|
CHS Inc. Supplemental Executive Retirement Plan
|
•
|
CHS Inc. Deferred Compensation Plan
|
|
|
Regular Pay Credit
|
||
Years 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%
|
|
|
Minimum Pay Credit
|
||
Age 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%
|
•
|
deliberate and continued failure by a Covered Employee to substantially perform his or her duties and responsibilities in a manner that has an adverse effect on us;
|
•
|
knowing and willful violation of any law, government regulation or company code of conduct or policy;
|
•
|
fraud or dishonesty resulting or intended to result in personal enrichment at our expense; and/or
|
•
|
gross misconduct in the performance of duties that results in economic harm to us.
|
•
|
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 of 150% of his base salary with a maximum potential annual incentive compensation award of 300% of his base salary, based on 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.
|
Name and Principal Position
|
|
Year
|
|
Salary
(1)(2)
|
|
Bonus
(2)(3)(4)(5)
|
|
Non-Equity
Incentive Plan
Compensation (1)(2)(6)
|
|
Change in Pension
Value and Nonqualified Deferred Compensation
Earnings
(2)(7)
|
|
All Other
Compensation (2)(8-14) |
|
Total
(2)
|
||||||||||||
|
|
|
|
(Dollars)
|
||||||||||||||||||||||
Jay Debertin
President and Chief Executive Officer
|
|
2019
|
|
$
|
1,218,042
|
|
|
$
|
—
|
|
|
$
|
5,405,339
|
|
|
$
|
1,307,488
|
|
|
$
|
410,651
|
|
|
$
|
8,341,520
|
|
|
2018
|
|
1,169,167
|
|
|
—
|
|
|
3,473,839
|
|
|
372,721
|
|
|
90,579
|
|
|
5,106,306
|
|
|||||||
|
2017
|
|
815,365
|
|
|
—
|
|
|
862,500
|
|
|
293,497
|
|
|
41,611
|
|
|
2,012,973
|
|
|||||||
Timothy Skidmore
Executive Vice President and Chief Financial Officer
|
|
2019
|
|
615,929
|
|
|
—
|
|
|
1,615,251
|
|
|
316,033
|
|
|
151,172
|
|
|
2,698,385
|
|
||||||
|
2018
|
|
602,883
|
|
|
—
|
|
|
1,115,086
|
|
|
106,115
|
|
|
44,133
|
|
|
1,868,217
|
|
|||||||
|
2017
|
|
523,500
|
|
|
100,000
|
|
|
207,550
|
|
|
95,952
|
|
|
30,114
|
|
|
957,116
|
|
|||||||
Darin Hunhoff
Executive Vice President, Energy and Processing
|
|
2019
|
|
547,667
|
|
|
—
|
|
|
1,631,254
|
|
|
611,133
|
|
|
160,989
|
|
|
2,951,043
|
|
||||||
|
2018
|
|
520,000
|
|
|
—
|
|
|
1,219,000
|
|
|
56,050
|
|
|
38,457
|
|
|
1,833,507
|
|
|||||||
|
2017
|
|
443,670
|
|
|
100,000
|
|
|
175,000
|
|
|
75,198
|
|
|
18,030
|
|
|
811,898
|
|
|||||||
James Zappa Executive Vice President and General Counsel
|
|
2019
|
|
516,667
|
|
|
—
|
|
|
1,538,720
|
|
|
285,992
|
|
|
141,526
|
|
|
2,482,905
|
|
||||||
|
2018
|
|
490,267
|
|
|
—
|
|
|
1,086,591
|
|
|
68,928
|
|
|
42,646
|
|
|
1,688,432
|
|
|||||||
|
2017
|
|
467,223
|
|
|
201,667
|
|
|
164,780
|
|
|
69,638
|
|
|
23,142
|
|
|
926,450
|
|
|||||||
Richard Dusek Executive Vice President, CHS Country Operations
|
|
2019
|
|
513,696
|
|
|
—
|
|
|
1,360,928
|
|
|
465,830
|
|
|
142,030
|
|
|
2,482,484
|
|
||||||
|
2018
|
|
468,012
|
|
|
—
|
|
|
1,137,174
|
|
|
20,449
|
|
|
39,089
|
|
|
1,664,724
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards
|
||||||||||
Name
|
|
Grant Date
|
|
Threshold
|
|
Target
|
|
Maximum
|
||||||
|
|
|
|
(Dollars)
|
||||||||||
Jay Debertin
|
|
9/6/2018(1)
|
|
$
|
884,063
|
|
|
$
|
1,768,125
|
|
|
$
|
3,536,250
|
|
|
|
9/6/2018(2)
|
|
884,063
|
|
|
1,768,125
|
|
|
5,893,750
|
|
|||
|
|
4/3/2019(3)
|
|
—
|
|
|
1,768,125
|
|
|
—
|
|
|||
Timothy Skidmore
|
|
9/6/2018(1)
|
|
349,499
|
|
|
698,999
|
|
|
1,397,998
|
|
|||
|
|
9/6/2018(2)
|
|
349,499
|
|
|
698,999
|
|
|
2,795,995
|
|
|||
|
|
4/3/2019(3)
|
|
—
|
|
|
425,478
|
|
|
—
|
|
|||
Darin Hunhoff
|
|
9/6/2018(1)
|
|
304,750
|
|
|
609,500
|
|
|
1,219,000
|
|
|||
|
|
9/6/2018(2)
|
|
304,750
|
|
|
609,500
|
|
|
2,438,000
|
|
|||
|
|
4/3/2019(3)
|
|
—
|
|
|
371,000
|
|
|
—
|
|
|||
James Zappa
|
|
9/6/2018(1)
|
|
287,500
|
|
|
575,000
|
|
|
1,150,000
|
|
|||
|
|
9/6/2018(2)
|
|
287,500
|
|
|
575,000
|
|
|
2,300,000
|
|
|||
|
|
4/3/2019(3)
|
|
—
|
|
|
350,000
|
|
|
—
|
|
|||
Richard Dusek
|
|
9/6/2018(1)
|
|
285,847
|
|
|
571,694
|
|
|
1,143,388
|
|
|||
|
|
9/6/2018(2)
|
|
285,847
|
|
|
571,694
|
|
|
2,286,775
|
|
|||
|
|
4/3/2019(3)
|
|
—
|
|
|
347,988
|
|
|
—
|
|
Name
|
|
Plan Name
|
|
Number of Years of Credited Service
|
|
Actuarial Present Value of Accumulated Benefits
|
||
|
|
|
|
(Years)
|
|
(Dollars)
|
||
Jay Debertin(1)
|
|
Pension Plan
|
|
35.2500
|
|
$
|
1,104,675
|
|
|
|
SERP
|
|
35.2500
|
|
3,977,697
|
|
|
Timothy Skidmore
|
|
Pension Plan
|
|
6.0000
|
|
182,996
|
|
|
|
|
SERP
|
|
6.0000
|
|
653,225
|
|
|
Darin Hunhoff
|
|
Pension Plan
|
|
27.2500
|
|
769,510
|
|
|
|
|
SERP
|
|
27.2500
|
|
827,260
|
|
|
James Zappa
|
|
Pension Plan
|
|
3.3333
|
|
124,074
|
|
|
|
|
SERP
|
|
3.3333
|
|
454,168
|
|
|
Richard Dusek
|
|
Pension Plan
|
|
31.0833
|
|
898,434
|
|
|
|
|
SERP
|
|
31.0833
|
|
617,051
|
|
•
|
Discount rate of 3.03% for the Pension Plan and 2.53% for the SERP;
|
•
|
RP 2014 Mortality Table with a fully generational projection reflecting scale MP 2017 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.
|
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) |
||||||||||
|
|
(Dollars)
|
||||||||||||||||||
Jay Debertin
|
|
$
|
3,493,832
|
|
|
$
|
371,407
|
|
|
$
|
506,870
|
|
|
$
|
1,876,339
|
|
|
$
|
13,390,214
|
|
Timothy Skidmore
|
|
722,060
|
|
|
127,290
|
|
|
149,635
|
|
|
—
|
|
|
4,480,949
|
|
|||||
Darin Hunhoff
|
|
—
|
|
|
128,810
|
|
|
61,884
|
|
|
—
|
|
|
2,688,783
|
|
|||||
James Zappa
|
|
543,295
|
|
|
115,134
|
|
|
90,090
|
|
|
—
|
|
|
1,574,256
|
|
|||||
Richard Dusek
|
|
227,435
|
|
|
118,989
|
|
|
41,653
|
|
|
—
|
|
|
1,206,474
|
|
•
|
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 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 Mr. 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.
|
•
|
If, no earlier than his separation from employment on December 31, 2019, Mr. Skidmore signs a general release of claims in the form attached to the Letter Agreement and does not subsequently rescind that general release within 14 days after its execution ("Rescission Deadline"), then we will make a lump sum payment to him in an amount equal to one year of his current base salary, which amount is $619,982, as well as a pro rata portion of annual variable compensation earned for fiscal 2020, which pro rata portion will be calculated based on Mr. Skidmore's target level opportunity of 115% of his current base salary;
|
•
|
A $340,975 payment representing a November 2017 retention award grant that will fully vest on January 1, 2020;
|
•
|
A pro rata portion of the Retention Award in the amount of $170,191, to be paid within 60 days of Mr. Skidmore's retirement on December 31, 2019;
|
•
|
Payment for 30 days of paid time off; and
|
•
|
$700,000 in recognition of earned but unvested long-term incentive compensation that will be forfeited due to the end of Mr. Skidmore's employment prior to vesting, to offset medical and dental benefits coverage for 12 months and one year of financial planning expense reimbursement, and for agreeing to be subject to the one-year non-competition and non-solicitation covenants following his departure from employment. Payment of this amount will be made within 30 days after December 31, 2020. This payment is subject to Mr. Skidmore's ongoing compliance with obligations that continue under the Letter Agreement including, without limitation, the non-competition and non-solicitation covenants.
|
Name
|
Amount
|
||
|
(Dollars)
|
||
Jay Debertin (1)(2)
|
$
|
8,098,228
|
|
Timothy Skidmore (3)(4)
|
1,332,961
|
|
|
Darin Hunhoff
|
556,500
|
|
|
James Zappa (3)
|
1,128,750
|
|
|
Richard Dusek
|
521,981
|
|
•
|
The median of the annual total compensation of all our employees (other than the CEO) was $75,561; and
|
•
|
The annual total compensation of our CEO, as reported in the Summary Compensation Table set forth above, was $8,341,520.
|
•
|
We determined that as of June 1, 2019, the determination date, our employee population consisted of approximately 10,039 individuals, 9,502 of which were located in the United States and 537 of which were located outside of the United States. This population consisted of our full-time, part-time, temporary and seasonal employees. From this population, we excluded 282 individuals who were located in the following countries: Argentina (51), Bulgaria (4), Canada (8), China (38), Hungary (8), Jordan (1), Paraguay (14), Republic of Korea (3), Romania (55), Russia (2), Serbia (4), Singapore (17), Spain (9), Switzerland (18), Taiwan (3), Ukraine (38) and Uruguay (9). Excluding these employees, our employee population that was used to calculate the pay ratio consisted of 9,757 individuals.
|
•
|
To identify the median employee, we compared regular, bonus and overtime wages (or their equivalents). We then applied a statistical sampling methodology to produce a sample of employees who were paid within a 5% range of the median regular, bonus and overtime wages (or their equivalents) and selected an employee from within that group as our median employee.
|
•
|
Once we identified our median employee, we calculated that employee's annual total compensation for fiscal 2019 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K promulgated by the SEC, resulting in annual total compensation of $75,561.
|
•
|
With respect to our CEO, we used the amount reported as total compensation in the Summary Compensation Table set forth above.
|
•
|
Increase annual cash retainer to $85,000.
|
•
|
Increase annual Board chair additional compensation to $24,000.
|
•
|
Increase annual first vice chair and secretary-treasurer additional compensation to $6,000.
|
•
|
Increase annual Board Committee chair additional compensation to $9,000.
|
•
|
Provide each other member of the Executive Committee of our Board of Directors with annual additional compensation of $3,000.
|
•
|
Provide a minimum retirement plan account contribution of $25,000 under the Deferred Compensation Plan as described in greater detail below under "Components of Compensation."
|
Amount Credited*
|
ROIC Performance
|
$100,000 (Superior performance)
|
6.7% ROIC
|
$50,000 (Maximum)
|
5.7% ROIC
|
$25,000 (Target)
|
4.7% ROIC
|
$12,500 (Minimum)
|
3.7% ROIC
|
Amount Credited*
|
ROIC Performance
|
$100,000 (Superior performance)
|
7.9% ROIC
|
$50,000 (Maximum)
|
6.9% ROIC
|
$25,000 (Target, minimum contribution amount)
|
5.9% ROIC
|
Name
|
|
Fees Earned or
Paid in Cash (1)(2)
|
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings (3)
|
|
All Other
Compensation (4)(5)
|
|
Total
|
||||||||
|
|
(Dollars)
|
||||||||||||||
Donald Anthony
|
|
$
|
23,500
|
|
|
$
|
19,827
|
|
|
$
|
22,624
|
|
|
$
|
65,951
|
|
David Beckman
|
|
60,500
|
|
|
—
|
|
|
30,001
|
|
|
90,501
|
|
||||
Clinton J. Blew
|
|
102,100
|
|
|
9,355
|
|
|
50,459
|
|
|
161,914
|
|
||||
Dennis Carlson (6)
|
|
95,000
|
|
|
68,525
|
|
|
42,175
|
|
|
205,700
|
|
||||
Scott Cordes
|
|
93,250
|
|
|
5,122
|
|
|
24,035
|
|
|
122,407
|
|
||||
Jon Erickson
|
|
96,000
|
|
|
1,580
|
|
|
39,807
|
|
|
137,387
|
|
||||
Mark Farrell
|
|
88,750
|
|
|
—
|
|
|
25,427
|
|
|
114,177
|
|
||||
Steve Fritel
|
|
93,750
|
|
|
40,698
|
|
|
38,691
|
|
|
173,139
|
|
||||
Alan Holm
|
|
97,250
|
|
|
269
|
|
|
38,691
|
|
|
136,210
|
|
||||
David Johnsrud
|
|
101,100
|
|
|
507
|
|
|
38,691
|
|
|
140,298
|
|
||||
Tracy Jones
|
|
88,250
|
|
|
—
|
|
|
42,175
|
|
|
130,425
|
|
||||
David Kayser
|
|
91,568
|
|
|
36,587
|
|
|
49,641
|
|
|
177,796
|
|
||||
Russell Kehl
|
|
96,500
|
|
|
—
|
|
|
45,059
|
|
|
141,559
|
|
||||
Randy Knecht
|
|
88,250
|
|
|
38,503
|
|
|
38,691
|
|
|
165,444
|
|
||||
Edward Malesich
|
|
90,250
|
|
|
2,696
|
|
|
38,691
|
|
|
131,637
|
|
||||
Perry Meyer
|
|
95,500
|
|
|
365
|
|
|
38,291
|
|
|
134,156
|
|
||||
Steve Riegel
|
|
87,750
|
|
|
20,921
|
|
|
38,691
|
|
|
147,362
|
|
||||
Daniel Schurr
|
|
110,000
|
|
|
50,635
|
|
|
45,643
|
|
|
206,278
|
|
|
|
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)
|
|
|
||
David Beckman
|
|
—
|
|
|
*
|
|
—
|
|
|
*
|
Clinton J. Blew
|
|
—
|
|
|
*
|
|
—
|
|
|
*
|
Dennis Carlson
|
|
60
|
|
|
*
|
|
—
|
|
|
*
|
Scott Cordes (3)
|
|
200
|
|
|
*
|
|
11,400
|
|
|
*
|
Jon Erickson
|
|
300
|
|
|
*
|
|
1,508
|
|
|
*
|
Mark Farrell
|
|
6,000
|
|
|
*
|
|
—
|
|
|
*
|
Steven Fritel
|
|
—
|
|
|
*
|
|
—
|
|
|
*
|
Alan Holm
|
|
—
|
|
|
*
|
|
—
|
|
|
*
|
David Johnsrud
|
|
—
|
|
|
*
|
|
1,650
|
|
|
*
|
Tracy Jones
|
|
—
|
|
|
*
|
|
—
|
|
|
*
|
David Kayser
|
|
—
|
|
|
*
|
|
630
|
|
|
*
|
Russell Kehl
|
|
—
|
|
|
*
|
|
—
|
|
|
*
|
Randy Knecht (3)
|
|
1,027
|
|
|
*
|
|
229
|
|
|
*
|
Edward Malesich
|
|
—
|
|
|
*
|
|
—
|
|
|
*
|
Perry Meyer (3)
|
|
120
|
|
|
*
|
|
—
|
|
|
*
|
Steve Riegel
|
|
245
|
|
|
*
|
|
1,460
|
|
|
*
|
Daniel Schurr
|
|
—
|
|
|
*
|
|
—
|
|
|
*
|
Named Executive Officers:
|
|
|
|
|
|
|
|
|
||
Jay Debertin (3)
|
|
1,200
|
|
|
*
|
|
—
|
|
|
*
|
Richard Dusek
|
|
—
|
|
|
*
|
|
—
|
|
|
*
|
Darin Hunhoff
|
|
596
|
|
|
*
|
|
—
|
|
|
*
|
Timothy Skidmore (3)
|
|
—
|
|
|
*
|
|
16,002
|
|
|
*
|
James Zappa
|
|
—
|
|
|
*
|
|
—
|
|
|
*
|
All other executive officers
|
|
—
|
|
|
*
|
|
400
|
|
|
*
|
Directors and executive officers as a group
|
|
9,748
|
|
|
*
|
|
33,279
|
|
|
*
|
|
|
Transaction Type
|
||||||
Name
|
|
Purchases from CHS
|
|
Patronage Dividends
|
||||
|
|
(Dollars)
|
||||||
Dennis Carlson
|
|
$
|
407,905
|
|
|
$
|
198
|
|
Jon Erickson
|
|
678,090
|
|
|
1,715
|
|
||
Steve Fritel
|
|
411,703
|
|
|
1,176
|
|
||
David Johnsrud
|
|
2,056,295
|
|
|
7,779
|
|
||
Tracy Jones
|
|
1,937,656
|
|
|
4,528
|
|
||
David Kayser
|
|
521,090
|
|
|
3,999
|
|
||
Russell Kehl
|
|
3,727,877
|
|
|
12,951
|
|
Independent Directors
|
||
David Beckman
|
Mark Farrell
|
Randy Knecht
|
Clinton J. Blew
|
Steve Fritel
|
Edward Malesich
|
Dennis Carlson
|
Alan Holm
|
Perry Meyer
|
Scott Cordes
|
David Kayser
|
Steve Riegel
|
John Erickson
|
Russell Kehl
|
Daniel Schurr
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Audit fees (1)
|
$
|
6,368
|
|
|
$
|
6,985
|
|
Audit-related fees (2)
|
13
|
|
|
294
|
|
||
Tax fees (3)
|
115
|
|
|
53
|
|
||
All other fees (4)
|
76
|
|
|
218
|
|
||
Total
|
$
|
6,572
|
|
|
$
|
7,550
|
|
|
Page No.
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2019
|
|
$
|
221,813
|
|
|
$
|
57,380
|
|
|
$
|
(102,388
|
)
|
|
$
|
176,805
|
|
2018
|
|
225,726
|
|
|
2,748
|
|
|
(6,661
|
)
|
|
221,813
|
|
||||
2017
|
|
163,644
|
|
|
191,581
|
|
|
(129,499
|
)
|
|
225,726
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Valuation allowance for deferred tax assets
|
|
|
|
|
|
|
|
|
||||||||
2019
|
|
$
|
230,374
|
|
|
$
|
41,260
|
|
|
$
|
(25,290
|
)
|
|
$
|
246,344
|
|
2018
|
|
289,083
|
|
|
61,854
|
|
|
(120,563
|
)
|
|
230,374
|
|
||||
2017
|
|
213,583
|
|
|
115,893
|
|
|
(40,393
|
)
|
|
289,083
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Reserve for supplier advance payments
|
|
|
|
|
|
|
|
|
|
|
||||||
2019
|
|
$
|
110,613
|
|
|
$
|
—
|
|
|
$
|
(44,728
|
)
|
|
$
|
65,885
|
|
2018
|
|
130,705
|
|
|
—
|
|
|
(20,092
|
)
|
|
110,613
|
|
2.1
|
|
3.1
|
|
3.2
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
4.6
|
|
4.7
|
|
4.8
|
|
4.9
|
|
4.10
|
|
4.11
|
|
4.12
|
|
4.13
|
|
4.14
|
|
4.15
|
|
10.1
|
|
10.2
|
|
10.2A
|
10.2B
|
|
10.3
|
|
10.3A
|
|
10.4
|
|
10.4A
|
|
10.4B
|
|
10.5
|
|
10.5A
|
|
10.5B
|
|
10.6
|
|
10.7
|
|
10.8
|
|
10.8A
|
|
10.9
|
|
10.9A
|
|
10.9B
|
|
10.10
|
|
10.10A
|
|
10.10B
|
|
10.10C
|
|
10.10D
|
|
10.10E
|
|
10.10F
|
|
10.11
|
|
10.12
|
|
10.12A
|
10.12B
|
|
10.13
|
|
10.14
|
|
10.15
|
|
10.16
|
|
10.17
|
|
10.17A
|
|
10.17B
|
|
10.18
|
|
10.19
|
|
10.19A
|
|
10.19B
|
|
10.19C
|
|
10.19D
|
|
10.19E
|
|
10.20
|
|
10.20A
|
|
10.20B
|
|
10.20C
|
|
10.20D
|
|
10.21
|
10.22
|
|
10.23
|
|
10.24
|
|
10.24A
|
|
10.25
|
|
10.25A
|
|
10.25B
|
|
10.25C
|
|
10.25D
|
|
10.25E
|
|
10.26
|
|
10.27
|
|
10.27A
|
|
10.28
|
|
10.29
|
|
10.30
|
|
10.30A
|
|
10.30B
|
|
10.31
|
10.32
|
|
10.32A
|
|
10.32B
|
|
10.32C
|
|
10.32D
|
|
10.33
|
|
10.33A
|
|
10.33B
|
|
10.34
|
|
10.35
|
|
10.36
|
|
10.37
|
|
10.38
|
|
10.39
|
10.40
|
|
21.1
|
|
23.1
|
|
24.1
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
101
|
The following financial information from CHS Inc.’s Annual Report on Form 10-K for the year ended August 31, 2019, 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 Changes in Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to the Consolidated Financial Statements. (*)
|
|
By:
|
/s/ Jay D. Debertin
|
|
|
Jay D. Debertin
|
|
|
President and Chief Executive Officer
|
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/ Daniel Lehmann
|
|
Vice President Finance, Corporate Controller
and Chief Accounting Officer
(principal accounting officer)
|
Daniel Lehmann
|
|
|
|
|
|
*
|
|
Chair of the Board of Directors
|
Daniel Schurr
|
|
|
|
|
|
*
|
|
Director
|
David Beckman
|
|
|
|
|
|
*
|
|
Director
|
Clinton J. Blew
|
|
|
|
|
|
*
|
|
Director
|
Dennis Carlson
|
|
|
|
|
|
*
|
|
Director
|
Scott Cordes
|
|
|
|
|
|
*
|
|
Director
|
Jon Erickson
|
|
|
|
|
|
*
|
|
Director
|
Mark Farrell
|
|
|
|
|
|
*
|
|
Director
|
Steve Fritel
|
|
|
|
|
|
*
|
|
Director
|
Alan Holm
|
|
|
|
|
*
|
|
Director
|
David Johnsrud
|
|
|
|
|
|
*
|
|
Director
|
Tracy Jones
|
|
|
|
|
|
*
|
|
Director
|
David Kayser
|
|
|
|
|
|
*
|
|
Director
|
Russell Kehl
|
|
|
|
|
|
*
|
|
Director
|
Randy Knecht
|
|
|
|
|
|
*
|
|
Director
|
Edward Malesich
|
|
|
|
|
|
*
|
|
Director
|
Perry Meyer
|
|
|
|
|
|
*
|
|
Director
|
Steve Riegel
|
|
|
|
|
|
*By
|
/s/ Jay D. Debertin
|
|
|
Jay D. Debertin
Attorney-in-fact
|
|
|
For the Years Ended August 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Revenues
|
$
|
31,900,453
|
|
|
$
|
32,683,347
|
|
|
$
|
32,037,426
|
|
Cost of goods sold
|
30,516,120
|
|
|
31,591,227
|
|
|
31,143,549
|
|
|||
Gross profit
|
1,384,333
|
|
|
1,092,120
|
|
|
893,877
|
|
|||
Marketing, general and administrative expenses
|
737,636
|
|
|
677,465
|
|
|
611,076
|
|
|||
Reserve and impairment charges (recoveries), net
|
(12,905
|
)
|
|
(37,709
|
)
|
|
456,679
|
|
|||
Operating earnings (loss)
|
659,602
|
|
|
452,364
|
|
|
(173,878
|
)
|
|||
(Gain) loss on disposal of business
|
(3,886
|
)
|
|
(131,816
|
)
|
|
2,190
|
|
|||
Interest expense
|
167,065
|
|
|
149,202
|
|
|
171,239
|
|
|||
Other (income) loss
|
(82,423
|
)
|
|
(82,737
|
)
|
|
(99,803
|
)
|
|||
Equity (income) loss from investments
|
(236,755
|
)
|
|
(153,515
|
)
|
|
(137,338
|
)
|
|||
Income (loss) before income taxes
|
815,601
|
|
|
671,230
|
|
|
(110,166
|
)
|
|||
Income tax expense (benefit)
|
(12,456
|
)
|
|
(104,076
|
)
|
|
(181,124
|
)
|
|||
Net income (loss)
|
828,057
|
|
|
775,306
|
|
|
70,958
|
|
|||
Net income (loss) attributable to noncontrolling interests
|
(1,823
|
)
|
|
(601
|
)
|
|
(634
|
)
|
|||
Net income (loss) attributable to CHS Inc.
|
$
|
829,880
|
|
|
$
|
775,907
|
|
|
$
|
71,592
|
|
|
For the Years Ended August 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Net income (loss)
|
$
|
828,057
|
|
|
$
|
775,306
|
|
|
$
|
70,958
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Pension and other postretirement benefits
|
(32,559
|
)
|
|
20,066
|
|
|
32,702
|
|
|||
Unrealized net gain (loss) on available for sale investments
|
—
|
|
|
(3,148
|
)
|
|
4,385
|
|
|||
Cash flow hedges
|
20,196
|
|
|
2,540
|
|
|
2,242
|
|
|||
Foreign currency translation adjustment
|
(9,949
|
)
|
|
(12,021
|
)
|
|
(8,159
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(22,312
|
)
|
|
7,437
|
|
|
31,170
|
|
|||
Comprehensive income
|
805,745
|
|
|
782,743
|
|
|
102,128
|
|
|||
Comprehensive income (loss) attributable to noncontrolling interests
|
(1,823
|
)
|
|
(601
|
)
|
|
(634
|
)
|
|||
Comprehensive income attributable to CHS Inc.
|
$
|
807,568
|
|
|
$
|
783,344
|
|
|
$
|
102,762
|
|
|
For the Years Ended August 31, 2019, 2018 and 2017
|
||||||||||||||||||||||||||||||
|
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, 2016
|
$
|
3,918,711
|
|
|
$
|
22,894
|
|
|
$
|
281,767
|
|
|
$
|
2,244,132
|
|
|
$
|
(211,530
|
)
|
|
$
|
1,488,999
|
|
|
$
|
14,186
|
|
|
$
|
7,759,159
|
|
Reversal of prior year patronage and redemption estimates
|
(95,019
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
257,458
|
|
|
—
|
|
|
162,439
|
|
||||||||
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 exchanged for preferred stock
|
(19,985
|
)
|
|
—
|
|
|
—
|
|
|
19,960
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(167,643
|
)
|
|
—
|
|
|
(167,643
|
)
|
||||||||
Other, net
|
(9,023
|
)
|
|
7,331
|
|
|
(753
|
)
|
|
(54
|
)
|
|
—
|
|
|
1,178
|
|
|
(1,047
|
)
|
|
(2,368
|
)
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71,592
|
|
|
(634
|
)
|
|
70,958
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,170
|
|
|
—
|
|
|
—
|
|
|
31,170
|
|
||||||||
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
|
|
|
(180,360
|
)
|
|
1,267,808
|
|
|
12,505
|
|
|
7,705,640
|
|
||||||||
Reversal of prior year patronage and redemption estimates
|
6,058
|
|
|
—
|
|
|
(126,333
|
)
|
|
—
|
|
|
—
|
|
|
126,333
|
|
|
—
|
|
|
6,058
|
|
||||||||
Distribution of 2017 patronage refunds
|
—
|
|
|
—
|
|
|
128,831
|
|
|
—
|
|
|
—
|
|
|
(128,831
|
)
|
|
—
|
|
|
—
|
|
||||||||
Redemptions of equities
|
(6,064
|
)
|
|
(185
|
)
|
|
(476
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,725
|
)
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(168,668
|
)
|
|
—
|
|
|
(168,668
|
)
|
||||||||
Other, net
|
(3,840
|
)
|
|
(153
|
)
|
|
(361
|
)
|
|
—
|
|
|
—
|
|
|
2,792
|
|
|
(2,458
|
)
|
|
(4,020
|
)
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
775,907
|
|
|
(601
|
)
|
|
775,306
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,437
|
|
|
—
|
|
|
—
|
|
|
7,437
|
|
||||||||
Reclassification of tax effects to capital reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,992
|
)
|
|
26,992
|
|
|
—
|
|
|
—
|
|
||||||||
Estimated 2018 patronage refunds
|
—
|
|
|
—
|
|
|
345,330
|
|
|
—
|
|
|
—
|
|
|
(420,330
|
)
|
|
—
|
|
|
(75,000
|
)
|
||||||||
Estimated 2018 equity redemptions
|
(65,000
|
)
|
|
—
|
|
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75,000
|
)
|
||||||||
Balances, August 31, 2018
|
3,837,580
|
|
|
29,498
|
|
|
742,378
|
|
|
2,264,038
|
|
|
(199,915
|
)
|
|
1,482,003
|
|
|
9,446
|
|
|
8,165,028
|
|
||||||||
Reversal of prior year patronage and redemption estimates
|
78,941
|
|
|
—
|
|
|
(345,330
|
)
|
|
—
|
|
|
—
|
|
|
420,330
|
|
|
—
|
|
|
153,941
|
|
||||||||
Distribution of 2018 patronage refunds
|
—
|
|
|
—
|
|
|
352,980
|
|
|
—
|
|
|
—
|
|
|
(428,756
|
)
|
|
—
|
|
|
(75,776
|
)
|
||||||||
Redemptions of equities
|
(70,859
|
)
|
|
(409
|
)
|
|
(14,272
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(85,540
|
)
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(168,668
|
)
|
|
—
|
|
|
(168,668
|
)
|
||||||||
Other, net
|
(2,169
|
)
|
|
(15
|
)
|
|
(1,844
|
)
|
|
—
|
|
|
—
|
|
|
7,061
|
|
|
(233
|
)
|
|
2,800
|
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
829,880
|
|
|
(1,823
|
)
|
|
828,057
|
|
||||||||
Other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,312
|
)
|
|
—
|
|
|
—
|
|
|
(22,312
|
)
|
||||||||
Reclassification of tax effects to capital reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,706
|
)
|
|
4,706
|
|
|
—
|
|
|
—
|
|
||||||||
Estimated 2019 patronage refunds
|
—
|
|
|
—
|
|
|
472,398
|
|
|
—
|
|
|
—
|
|
|
(562,398
|
)
|
|
—
|
|
|
(90,000
|
)
|
||||||||
Estimated 2019 equity redemptions
|
(90,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(90,000
|
)
|
||||||||
Balances, August 31, 2019
|
$
|
3,753,493
|
|
|
$
|
29,074
|
|
|
$
|
1,206,310
|
|
|
$
|
2,264,038
|
|
|
$
|
(226,933
|
)
|
|
$
|
1,584,158
|
|
|
$
|
7,390
|
|
|
$
|
8,617,530
|
|
|
For the Years Ended August 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
$
|
828,057
|
|
|
$
|
775,306
|
|
|
$
|
70,958
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
473,211
|
|
|
478,050
|
|
|
480,223
|
|
|||
Amortization of deferred major maintenance costs
|
68,296
|
|
|
61,686
|
|
|
67,058
|
|
|||
Equity (income) loss from investments
|
(236,755
|
)
|
|
(153,515
|
)
|
|
(137,338
|
)
|
|||
Distributions from equity investments
|
249,315
|
|
|
190,297
|
|
|
213,352
|
|
|||
Provision for doubtful accounts
|
57,745
|
|
|
2,085
|
|
|
177,969
|
|
|||
(Gain/recovery) loss on disposal of business
|
(3,886
|
)
|
|
(131,816
|
)
|
|
2,190
|
|
|||
Unrealized (gain) loss on crack spread contingent liability
|
—
|
|
|
—
|
|
|
(15,051
|
)
|
|||
Long-lived asset impairment, net of recoveries
|
40,340
|
|
|
(10,352
|
)
|
|
145,042
|
|
|||
Reserve against supplier advance payments
|
—
|
|
|
—
|
|
|
130,705
|
|
|||
Deferred taxes
|
(13,852
|
)
|
|
(146,961
|
)
|
|
(194,467
|
)
|
|||
Other, net
|
(34,246
|
)
|
|
6,653
|
|
|
20,173
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
|||
Receivables
|
(218,192
|
)
|
|
210,775
|
|
|
146,788
|
|
|||
Inventories
|
284,694
|
|
|
(169,581
|
)
|
|
(333,479
|
)
|
|||
Derivative assets
|
105,708
|
|
|
(102,368
|
)
|
|
114,023
|
|
|||
Margin and related deposits
|
(4,188
|
)
|
|
54,912
|
|
|
97,804
|
|
|||
Supplier advance payments
|
42,659
|
|
|
(39,189
|
)
|
|
(33,952
|
)
|
|||
Other current assets and other assets
|
(25,442
|
)
|
|
(11,021
|
)
|
|
(15,147
|
)
|
|||
Customer margin deposits and credit balances
|
945
|
|
|
(20,518
|
)
|
|
(50,920
|
)
|
|||
Customer advance payments
|
(211,761
|
)
|
|
(14,682
|
)
|
|
(1,329
|
)
|
|||
Accounts payable and accrued expenses
|
(38,229
|
)
|
|
(78,388
|
)
|
|
227,967
|
|
|||
Derivative liabilities
|
(203,383
|
)
|
|
132,495
|
|
|
(132,423
|
)
|
|||
Other liabilities
|
(21,105
|
)
|
|
40,629
|
|
|
(25,446
|
)
|
|||
Net cash provided by (used in) operating activities
|
1,139,931
|
|
|
1,074,497
|
|
|
954,700
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Acquisition of property, plant and equipment
|
(443,216
|
)
|
|
(355,412
|
)
|
|
(444,397
|
)
|
|||
Proceeds from disposition of property, plant and equipment
|
53,974
|
|
|
91,153
|
|
|
19,541
|
|
|||
Proceeds from sale of business
|
5,044
|
|
|
234,914
|
|
|
—
|
|
|||
Expenditures for major maintenance
|
(232,094
|
)
|
|
(80,514
|
)
|
|
(2,340
|
)
|
|||
Investments redeemed
|
(5,086
|
)
|
|
(21,679
|
)
|
|
(16,645
|
)
|
|||
Changes in CHS Capital notes receivable, net
|
(10,903
|
)
|
|
25,335
|
|
|
322
|
|
|||
Financing extended to customers
|
(12,210
|
)
|
|
(74,402
|
)
|
|
(67,225
|
)
|
|||
Payments from customer financing
|
90,193
|
|
|
52,453
|
|
|
88,154
|
|
|||
Business acquisitions, net of cash acquired
|
(119,421
|
)
|
|
—
|
|
|
—
|
|
|||
Other investing activities, net
|
12,436
|
|
|
48,628
|
|
|
17,549
|
|
|||
Net cash provided by (used in) investing activities
|
(661,283
|
)
|
|
(79,524
|
)
|
|
(405,041
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from notes payable and long-term borrowings
|
29,071,363
|
|
|
36,040,240
|
|
|
37,295,236
|
|
|||
Payments on notes payable, long-term debt and capital lease obligations
|
(29,450,339
|
)
|
|
(36,525,136
|
)
|
|
(37,584,011
|
)
|
|||
Preferred stock dividends paid
|
(168,668
|
)
|
|
(168,668
|
)
|
|
(167,642
|
)
|
|||
Redemptions of equities
|
(85,540
|
)
|
|
(8,847
|
)
|
|
(35,268
|
)
|
|||
Cash patronage dividends paid
|
(75,776
|
)
|
|
—
|
|
|
(103,879
|
)
|
|||
Other financing activities, net
|
(16,686
|
)
|
|
(69,759
|
)
|
|
(22,694
|
)
|
|||
Net cash provided by (used in) financing activities
|
(725,646
|
)
|
|
(732,170
|
)
|
|
(618,258
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
2,733
|
|
|
8,864
|
|
|
(4,713
|
)
|
|||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
(244,265
|
)
|
|
271,667
|
|
|
(73,312
|
)
|
|||
Cash and cash equivalents and restricted cash at beginning of period
|
543,940
|
|
|
272,273
|
|
|
345,584
|
|
|||
Cash and cash equivalents and restricted cash at end of period
|
$
|
299,675
|
|
|
$
|
543,940
|
|
|
$
|
272,273
|
|
|
For the year ended August 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Cash and cash equivalents
|
$
|
211,179
|
|
|
$
|
450,617
|
|
|
$
|
181,379
|
|
Restricted cash included in other current assets
|
88,496
|
|
|
90,193
|
|
|
83,561
|
|
|||
Restricted cash included in other assets
|
—
|
|
|
3,130
|
|
|
7,333
|
|
|||
Total cash and cash equivalents and restricted cash
|
$
|
299,675
|
|
|
$
|
543,940
|
|
|
$
|
272,273
|
|
|
For the year ended August 31, 2018
|
|
For the year ended August 31, 2017
|
||||||||||||||||||||
|
As Previously Reported
|
|
Accounting Change
|
|
As Presented
|
|
As Previously Reported
|
|
Accounting Change
|
|
As Presented
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
Cost of goods sold
|
$
|
31,589,887
|
|
|
$
|
1,340
|
|
|
$
|
31,591,227
|
|
|
$
|
31,142,766
|
|
|
$
|
783
|
|
|
$
|
31,143,549
|
|
Gross profit
|
1,093,460
|
|
|
(1,340
|
)
|
|
1,092,120
|
|
|
894,660
|
|
|
(783
|
)
|
|
893,877
|
|
||||||
Marketing, general and administrative expenses
|
674,083
|
|
|
3,382
|
|
|
677,465
|
|
|
612,007
|
|
|
(931
|
)
|
|
611,076
|
|
||||||
Operating earnings (loss)
|
457,086
|
|
|
(4,722
|
)
|
|
452,364
|
|
|
(174,026
|
)
|
|
148
|
|
|
(173,878
|
)
|
||||||
Other (income) loss
|
(78,015
|
)
|
|
(4,722
|
)
|
|
(82,737
|
)
|
|
(99,951
|
)
|
|
148
|
|
|
(99,803
|
)
|
Reportable Segment*
|
|
ASC 606
|
|
ASC 815
|
|
Other Guidance
|
|
Total Revenues
|
||||||||
|
|
(Dollars in thousands)
|
||||||||||||||
Energy
|
|
$
|
6,393,075
|
|
|
$
|
726,001
|
|
|
$
|
—
|
|
|
$
|
7,119,076
|
|
Ag
|
|
6,319,304
|
|
|
18,268,977
|
|
|
131,791
|
|
|
24,720,072
|
|
||||
Corporate and Other
|
|
20,262
|
|
|
—
|
|
|
41,043
|
|
|
61,305
|
|
||||
Total revenues
|
|
$
|
12,732,641
|
|
|
$
|
18,994,978
|
|
|
$
|
172,834
|
|
|
$
|
31,900,453
|
|
•
|
Election to not disclose the unfulfilled performance obligation balance for contracts with an original duration of one year or less;
|
•
|
Recognition of the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that would otherwise have been recognized is one year or less;
|
•
|
Election to present revenues net of sales taxes and other similar taxes; and
|
•
|
Practical expedient to treat shipping and handling as a fulfillment activity rather than a promised service, resulting in the conclusion that shipping and handling is not a separate performance obligation.
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Trade accounts receivable
|
$
|
1,803,284
|
|
|
$
|
1,578,764
|
|
CHS Capital short-term notes receivable
|
592,909
|
|
|
569,379
|
|
||
Other
|
511,821
|
|
|
534,071
|
|
||
Gross receivables
|
2,908,014
|
|
|
2,682,214
|
|
||
Less allowances and reserves
|
176,805
|
|
|
221,813
|
|
||
Total receivables
|
$
|
2,731,209
|
|
|
$
|
2,460,401
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Grain and oilseed
|
$
|
1,024,645
|
|
|
$
|
1,298,522
|
|
Energy
|
717,378
|
|
|
737,639
|
|
||
Agronomy
|
954,037
|
|
|
560,675
|
|
||
Processed grain and oilseed
|
109,900
|
|
|
99,426
|
|
||
Other
|
48,328
|
|
|
72,387
|
|
||
Total inventories
|
$
|
2,854,288
|
|
|
$
|
2,768,649
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Equity method investments:
|
|
|
|
||||
CF Industries Nitrogen, LLC
|
$
|
2,708,942
|
|
|
$
|
2,735,073
|
|
Ventura Foods, LLC
|
374,516
|
|
|
360,150
|
|
||
Ardent Mills, LLC
|
209,027
|
|
|
205,898
|
|
||
Other equity method investments
|
267,247
|
|
|
288,016
|
|
||
Other investments
|
124,264
|
|
|
122,788
|
|
||
Total investments
|
$
|
3,683,996
|
|
|
$
|
3,711,925
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Current assets
|
$
|
590,057
|
|
|
$
|
576,076
|
|
Non-current assets
|
7,028,766
|
|
|
7,447,594
|
|
||
Current liabilities
|
228,324
|
|
|
215,104
|
|
||
Non-current liabilities
|
2,455
|
|
|
71
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Net sales
|
$
|
2,894,795
|
|
|
$
|
2,449,695
|
|
|
$
|
2,051,159
|
|
Gross profit
|
737,168
|
|
|
423,612
|
|
|
195,142
|
|
|||
Net earnings
|
706,291
|
|
|
401,295
|
|
|
123,965
|
|
|||
Earnings attributable to CHS Inc.
|
160,373
|
|
|
106,895
|
|
|
66,530
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Current assets
|
$
|
1,469,003
|
|
|
$
|
1,462,590
|
|
Non-current assets
|
2,327,217
|
|
|
2,331,295
|
|
||
Current liabilities
|
535,579
|
|
|
671,928
|
|
||
Non-current liabilities
|
790,401
|
|
|
693,360
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Net sales
|
$
|
5,752,368
|
|
|
$
|
5,882,035
|
|
|
$
|
5,762,849
|
|
Gross profit
|
565,784
|
|
|
601,927
|
|
|
673,329
|
|
|||
Net earnings
|
248,303
|
|
|
226,776
|
|
|
265,126
|
|
|||
Earnings attributable to CHS Inc.
|
69,157
|
|
|
46,069
|
|
|
60,716
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Land and land improvements
|
$
|
319,452
|
|
|
$
|
341,767
|
|
Buildings
|
1,079,073
|
|
|
1,034,860
|
|
||
Machinery and equipment
|
7,392,767
|
|
|
7,199,509
|
|
||
Office equipment and other
|
346,649
|
|
|
316,946
|
|
||
Construction in progress
|
329,297
|
|
|
204,207
|
|
||
Gross property, plant and equipment
|
9,467,238
|
|
|
9,097,289
|
|
||
Less accumulated depreciation and amortization
|
4,378,530
|
|
|
3,955,570
|
|
||
Total property, plant and equipment
|
$
|
5,088,708
|
|
|
$
|
5,141,719
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Goodwill
|
$
|
172,404
|
|
|
$
|
138,464
|
|
Customer lists, trademarks and other intangible assets
|
71,206
|
|
|
29,338
|
|
||
Notes receivable
|
189,045
|
|
|
211,986
|
|
||
Long-term derivative assets
|
36,408
|
|
|
23,084
|
|
||
Prepaid pension and other benefits
|
73,100
|
|
|
101,539
|
|
||
Capitalized major maintenance
|
286,890
|
|
|
130,780
|
|
||
Cash value life insurance
|
122,792
|
|
|
123,010
|
|
||
Other
|
60,350
|
|
|
76,128
|
|
||
Total other assets
|
$
|
1,012,195
|
|
|
$
|
834,329
|
|
|
Energy
|
|
Ag
|
|
Corporate
and Other |
|
Total
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Balances, August 31, 2017
|
$
|
552
|
|
|
$
|
127,328
|
|
|
$
|
10,574
|
|
|
$
|
138,454
|
|
Effect of foreign currency translation adjustments
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Balances, August 31, 2018
|
552
|
|
|
127,338
|
|
|
10,574
|
|
|
138,464
|
|
||||
Goodwill acquired during the period
|
—
|
|
|
61,358
|
|
|
—
|
|
|
61,358
|
|
||||
Impairment
|
—
|
|
|
(27,418
|
)
|
|
—
|
|
|
(27,418
|
)
|
||||
Balances, August 31, 2019
|
$
|
552
|
|
|
$
|
161,278
|
|
|
$
|
10,574
|
|
|
$
|
172,404
|
|
|
August 31, 2019
|
|
August 31, 2018
|
||||||||||||||||||||
|
Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
Customer lists
|
$
|
84,815
|
|
|
$
|
(17,609
|
)
|
|
$
|
67,206
|
|
|
$
|
40,815
|
|
|
$
|
(13,082
|
)
|
|
$
|
27,733
|
|
Trademarks and other intangible assets
|
9,736
|
|
|
(5,736
|
)
|
|
4,000
|
|
|
6,536
|
|
|
(4,931
|
)
|
|
1,605
|
|
||||||
Total intangible assets
|
$
|
94,551
|
|
|
$
|
(23,345
|
)
|
|
$
|
71,206
|
|
|
$
|
47,351
|
|
|
$
|
(18,013
|
)
|
|
$
|
29,338
|
|
|
Balance at
Beginning of Year |
|
Cost
Deferred |
|
Amortization
|
|
Balance at
End of Year |
||||||||
|
(Dollars in thousands)
|
||||||||||||||
2019
|
$
|
130,780
|
|
|
$
|
224,406
|
|
|
$
|
(68,296
|
)
|
|
$
|
286,890
|
|
2018
|
105,006
|
|
|
87,460
|
|
|
(61,686
|
)
|
|
130,780
|
|
||||
2017
|
169,054
|
|
|
3,010
|
|
|
(67,058
|
)
|
|
105,006
|
|
|
|
Weighted-average Interest Rate
|
|
|
|
|
||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
|
(Dollars in thousands)
|
||||||
Notes payable
|
|
3.36%
|
|
3.50%
|
|
$
|
1,330,550
|
|
|
$
|
1,437,264
|
|
CHS Capital notes payable
|
|
2.90%
|
|
2.82%
|
|
825,558
|
|
|
834,932
|
|
||
Total notes payable
|
|
$
|
2,156,108
|
|
|
$
|
2,272,196
|
|
Primary Revolving Credit Facilities
|
|
Fiscal Year
of Maturity
|
|
Total Capacity
|
|
Borrowings Outstanding
|
|
Interest Rates
|
||||||||
|
|
|
|
2019
|
|
2019
|
|
2018
|
|
|
||||||
|
|
|
|
(Dollars in thousands)
|
|
|
||||||||||
Committed five-year unsecured facility
|
|
2024
|
|
$
|
2,750,000
|
|
|
$
|
335,000
|
|
|
$
|
—
|
|
|
LIBOR or base rate +0.00% to 1.45%
|
Uncommitted bilateral facilities
|
|
2020
|
|
630,000
|
|
|
430,000
|
|
|
515,000
|
|
|
LIBOR or base rate +0.00% to 1.20%
|
|
2018
|
||
|
(Dollars in thousands)
|
||
Balance - beginning of year
|
$
|
548,602
|
|
Cash collections on DPP receivable
|
(10,961
|
)
|
|
Transfer of receivables
|
(386,900
|
)
|
|
Monthly settlements, net
|
(169,827
|
)
|
|
Fair value adjustment
|
19,086
|
|
|
Balance - end of year
|
$
|
—
|
|
|
|
|
2019
|
|
2018
|
||||
|
|
|
(Dollars in thousands)
|
||||||
4.00% unsecured notes $100 million face amount, due in equal installments beginning in fiscal 2017 through fiscal 2021
|
|
$
|
40,000
|
|
|
$
|
60,000
|
|
|
4.08% unsecured notes $130 million face amount, due in fiscal 2019 (a)
|
|
—
|
|
|
129,229
|
|
|||
4.52% unsecured notes $160 million face amount, due in fiscal 2021 (a)
|
|
161,978
|
|
|
157,528
|
|
|||
4.67% unsecured notes $130 million face amount, due in fiscal 2023 (a)
|
|
136,086
|
|
|
128,577
|
|
|||
4.39% unsecured notes $152 million face amount, due in fiscal 2023
|
|
152,000
|
|
|
152,000
|
|
|||
3.85% unsecured notes $80 million face amount, due in fiscal 2025
|
|
80,000
|
|
|
80,000
|
|
|||
3.80% unsecured notes $100 million face amount, due in fiscal 2025
|
|
100,000
|
|
|
100,000
|
|
|||
4.58% unsecured notes $150 million face amount, due in fiscal 2025
|
|
151,776
|
|
|
145,213
|
|
|||
4.82% unsecured notes $80 million face amount, due in fiscal 2026
|
|
80,000
|
|
|
80,000
|
|
|||
4.69% unsecured notes $58 million face amount, due in fiscal 2027
|
|
58,000
|
|
|
58,000
|
|
|||
4.74% unsecured notes $95 million face amount, due in fiscal 2028
|
|
95,000
|
|
|
95,000
|
|
|||
4.89% unsecured notes $100 million face amount, due in fiscal 2031
|
|
100,000
|
|
|
100,000
|
|
|||
4.71% unsecured notes $100 million face amount, due in fiscal 2033
|
|
100,000
|
|
|
100,000
|
|
|||
5.40% unsecured notes $125 million face amount, due in fiscal 2036
|
|
125,000
|
|
|
125,000
|
|
|||
Private Placement debt
|
|
1,379,840
|
|
|
1,510,547
|
|
|||
2.25% unsecured term loans from cooperative and other banks, due in fiscal 2025 (b)
|
|
366,000
|
|
|
366,000
|
|
|||
Bank financing
|
|
366,000
|
|
|
366,000
|
|
|||
Capital lease obligations
|
|
28,239
|
|
|
25,280
|
|
|||
Other notes and contracts with interest rates from 1.30% to 15.25%
|
|
18,601
|
|
|
32,607
|
|
|||
Deferred financing costs
|
|
(3,569
|
)
|
|
(4,179
|
)
|
|||
Total long-term debt
|
|
1,789,111
|
|
|
1,930,255
|
|
|||
Less current portion
|
|
39,210
|
|
|
167,565
|
|
|||
Long-term portion
|
|
$
|
1,749,901
|
|
|
$
|
1,762,690
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
211
|
|
|
$
|
15,576
|
|
|
$
|
8,394
|
|
State
|
3,815
|
|
|
7,041
|
|
|
(1,787
|
)
|
|||
Foreign
|
(2,630
|
)
|
|
20,268
|
|
|
6,736
|
|
|||
Total Current
|
1,396
|
|
|
42,885
|
|
|
13,343
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(4,923
|
)
|
|
(146,780
|
)
|
|
(173,184
|
)
|
|||
State
|
(8,491
|
)
|
|
(127
|
)
|
|
(13,244
|
)
|
|||
Foreign
|
(438
|
)
|
|
(54
|
)
|
|
(8,039
|
)
|
|||
Total Deferred
|
(13,852
|
)
|
|
(146,961
|
)
|
|
(194,467
|
)
|
|||
Total
|
$
|
(12,456
|
)
|
|
$
|
(104,076
|
)
|
|
$
|
(181,124
|
)
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
|
|
||
Accrued expenses
|
$
|
62,245
|
|
|
$
|
138,417
|
|
Postretirement health care and deferred compensation
|
42,747
|
|
|
41,797
|
|
||
Tax credit carryforwards
|
152,347
|
|
|
154,240
|
|
||
Loss carryforwards
|
136,435
|
|
|
104,519
|
|
||
Nonqualified equity
|
290,447
|
|
|
178,046
|
|
||
Major maintenance
|
—
|
|
|
5,484
|
|
||
Other
|
97,071
|
|
|
83,580
|
|
||
Deferred tax assets valuation reserve
|
(246,344
|
)
|
|
(230,373
|
)
|
||
Total deferred tax assets
|
534,948
|
|
|
475,710
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Pension
|
11,237
|
|
|
19,397
|
|
||
Investments
|
99,838
|
|
|
98,608
|
|
||
Major maintenance
|
4,679
|
|
|
—
|
|
||
Property, plant and equipment
|
560,334
|
|
|
513,238
|
|
||
Other
|
1,760
|
|
|
26,828
|
|
||
Total deferred tax liabilities
|
677,848
|
|
|
658,071
|
|
||
Net deferred tax liabilities
|
$
|
142,900
|
|
|
$
|
182,361
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Balance at beginning of period
|
$
|
91,135
|
|
|
$
|
37,830
|
|
|
$
|
37,105
|
|
Additions attributable to current year tax positions
|
14,162
|
|
|
3,640
|
|
|
725
|
|
|||
Additions attributable to prior year tax positions
|
—
|
|
|
49,665
|
|
|
—
|
|
|||
Reductions attributable to prior year tax positions
|
(4,169
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of period
|
$
|
101,128
|
|
|
$
|
91,135
|
|
|
$
|
37,830
|
|
|
|
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
|
|
|
|
For the Years Ended August 31,
|
||||||
|
Nasdaq Symbol
|
|
2019
|
|
2018
|
||||
|
|
|
(Dollars per share)
|
||||||
8% Cumulative Redeemable
|
CHSCP
|
|
$
|
2.00
|
|
|
$
|
2.00
|
|
Class B Cumulative Redeemable, Series 1
|
CHSCO
|
|
1.97
|
|
|
1.97
|
|
||
Class B Reset Rate Cumulative Redeemable, Series 2
|
CHSCN
|
|
1.78
|
|
|
1.78
|
|
||
Class B Reset Rate Cumulative Redeemable, Series 3
|
CHSCM
|
|
1.69
|
|
|
1.69
|
|
||
Class B Cumulative Redeemable, Series 4
|
CHSCL
|
|
1.88
|
|
|
1.88
|
|
|
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, 2016, net of tax
|
$
|
(165,146
|
)
|
|
$
|
5,656
|
|
|
$
|
(9,196
|
)
|
|
$
|
(42,844
|
)
|
|
$
|
(211,530
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Amounts before reclassifications
|
25,216
|
|
|
7,117
|
|
|
1,892
|
|
|
(7,960
|
)
|
|
26,265
|
|
|||||
Amounts reclassified out
|
26,174
|
|
|
—
|
|
|
1,742
|
|
|
15
|
|
|
27,931
|
|
|||||
Total other comprehensive income (loss), before tax
|
51,390
|
|
|
7,117
|
|
|
3,634
|
|
|
(7,945
|
)
|
|
54,196
|
|
|||||
Tax effect
|
(18,688
|
)
|
|
(2,732
|
)
|
|
(1,392
|
)
|
|
(214
|
)
|
|
(23,026
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
32,702
|
|
|
4,385
|
|
|
2,242
|
|
|
(8,159
|
)
|
|
31,170
|
|
|||||
Balance as of August 31, 2017, net of tax
|
(132,444
|
)
|
|
10,041
|
|
|
(6,954
|
)
|
|
(51,003
|
)
|
|
(180,360
|
)
|
|||||
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Amounts before reclassifications
|
7,633
|
|
|
21,078
|
|
|
1,031
|
|
|
(10,062
|
)
|
|
19,680
|
|
|||||
Amounts reclassified out
|
21,804
|
|
|
(25,534
|
)
|
|
1,704
|
|
|
(2,042
|
)
|
|
(4,068
|
)
|
|||||
Total other comprehensive income (loss), before tax
|
29,437
|
|
|
(4,456
|
)
|
|
2,735
|
|
|
(12,104
|
)
|
|
15,612
|
|
|||||
Tax effect
|
(9,371
|
)
|
|
1,308
|
|
|
(195
|
)
|
|
83
|
|
|
(8,175
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
20,066
|
|
|
(3,148
|
)
|
|
2,540
|
|
|
(12,021
|
)
|
|
7,437
|
|
|||||
Reclassification of tax effects to capital reserves
|
(27,957
|
)
|
|
1,968
|
|
|
(1,468
|
)
|
|
465
|
|
|
(26,992
|
)
|
|||||
Balance as of August 31, 2018, net of tax
|
(140,335
|
)
|
|
8,861
|
|
|
(5,882
|
)
|
|
(62,559
|
)
|
|
(199,915
|
)
|
|||||
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Amounts before reclassifications
|
(51,118
|
)
|
|
—
|
|
|
37,709
|
|
|
(9,990
|
)
|
|
(23,399
|
)
|
|||||
Amounts reclassified out
|
10,279
|
|
|
—
|
|
|
(9,843
|
)
|
|
—
|
|
|
436
|
|
|||||
Total other comprehensive income (loss), before tax
|
(40,839
|
)
|
|
—
|
|
|
27,866
|
|
|
(9,990
|
)
|
|
(22,963
|
)
|
|||||
Tax effect
|
8,280
|
|
|
—
|
|
|
(7,670
|
)
|
|
41
|
|
|
651
|
|
|||||
Other comprehensive income (loss), net of tax
|
(32,559
|
)
|
|
—
|
|
|
20,196
|
|
|
(9,949
|
)
|
|
(22,312
|
)
|
|||||
Reclassifications
|
416
|
|
|
(8,861
|
)
|
|
983
|
|
|
2,756
|
|
|
(4,706
|
)
|
|||||
Balance as of August 31, 2019, net of tax
|
$
|
(172,478
|
)
|
|
$
|
—
|
|
|
$
|
15,297
|
|
|
$
|
(69,752
|
)
|
|
$
|
(226,933
|
)
|
|
Qualified
Pension Benefits
|
|
Non-Qualified
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Projected benefit obligation at beginning of period
|
$
|
767,184
|
|
|
$
|
806,174
|
|
|
$
|
20,755
|
|
|
$
|
25,599
|
|
|
$
|
29,790
|
|
|
$
|
31,836
|
|
Service cost
|
38,592
|
|
|
39,677
|
|
|
311
|
|
|
548
|
|
|
1,053
|
|
|
943
|
|
||||||
Interest cost
|
28,396
|
|
|
24,007
|
|
|
747
|
|
|
711
|
|
|
1,094
|
|
|
908
|
|
||||||
Actuarial (gain) loss
|
(9,606
|
)
|
|
3,146
|
|
|
76
|
|
|
205
|
|
|
(2,596
|
)
|
|
(623
|
)
|
||||||
Assumption change
|
102,441
|
|
|
(36,515
|
)
|
|
1,841
|
|
|
(783
|
)
|
|
3,398
|
|
|
(1,612
|
)
|
||||||
Plan amendments
|
18
|
|
|
244
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlements
|
(615
|
)
|
|
—
|
|
|
(3,975
|
)
|
|
(4,824
|
)
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
(49,714
|
)
|
|
(69,549
|
)
|
|
(708
|
)
|
|
(701
|
)
|
|
(1,641
|
)
|
|
(1,662
|
)
|
||||||
Projected benefit obligation at end of period
|
$
|
876,696
|
|
|
$
|
767,184
|
|
|
$
|
19,047
|
|
|
$
|
20,755
|
|
|
$
|
31,098
|
|
|
$
|
29,790
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fair value of plan assets at beginning of period
|
$
|
829,616
|
|
|
$
|
875,820
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual gain (loss) on plan assets
|
90,139
|
|
|
23,345
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Company contributions
|
40,001
|
|
|
—
|
|
|
4,683
|
|
|
5,525
|
|
|
1,641
|
|
|
1,662
|
|
||||||
Settlements
|
(615
|
)
|
|
—
|
|
|
(3,975
|
)
|
|
(4,824
|
)
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
(49,714
|
)
|
|
(69,549
|
)
|
|
(708
|
)
|
|
(701
|
)
|
|
(1,641
|
)
|
|
(1,662
|
)
|
||||||
Fair value of plan assets at end of period
|
$
|
909,427
|
|
|
$
|
829,616
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status at end of period
|
$
|
32,731
|
|
|
$
|
62,432
|
|
|
$
|
(19,047
|
)
|
|
$
|
(20,755
|
)
|
|
$
|
(31,098
|
)
|
|
$
|
(29,790
|
)
|
Amounts recognized on balance sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Non-current assets
|
$
|
32,731
|
|
|
$
|
62,432
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
—
|
|
|
—
|
|
|
(1,580
|
)
|
|
(1,780
|
)
|
|
(2,040
|
)
|
|
(2,040
|
)
|
||||||
Non-current liabilities
|
—
|
|
|
—
|
|
|
(17,467
|
)
|
|
(18,975
|
)
|
|
(29,058
|
)
|
|
(27,750
|
)
|
||||||
Ending balance
|
$
|
32,731
|
|
|
$
|
62,432
|
|
|
$
|
(19,047
|
)
|
|
$
|
(20,755
|
)
|
|
$
|
(31,098
|
)
|
|
$
|
(29,790
|
)
|
Amounts recognized in accumulated other comprehensive loss (pretax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Prior service cost (credit)
|
$
|
1,117
|
|
|
$
|
1,288
|
|
|
$
|
(616
|
)
|
|
$
|
(691
|
)
|
|
$
|
(3,160
|
)
|
|
$
|
(3,716
|
)
|
Net (gain) loss
|
244,164
|
|
|
209,606
|
|
|
2,151
|
|
|
427
|
|
|
(15,445
|
)
|
|
(17,875
|
)
|
||||||
Ending balance
|
$
|
245,281
|
|
|
$
|
210,894
|
|
|
$
|
1,535
|
|
|
$
|
(264
|
)
|
|
$
|
(18,605
|
)
|
|
$
|
(21,591
|
)
|
|
For the Years Ended August 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Projected benefit obligation
|
$
|
19,047
|
|
|
$
|
20,755
|
|
Accumulated benefit obligation
|
16,907
|
|
|
18,586
|
|
|
Qualified
Pension Benefits
|
|
Non-Qualified
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||
Components of net periodic benefit costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Service cost
|
$
|
38,592
|
|
|
$
|
39,677
|
|
|
$
|
42,149
|
|
|
$
|
311
|
|
|
$
|
548
|
|
|
$
|
1,206
|
|
|
$
|
1,053
|
|
|
$
|
943
|
|
|
$
|
1,160
|
|
Interest cost
|
28,396
|
|
|
24,007
|
|
|
22,999
|
|
|
747
|
|
|
711
|
|
|
843
|
|
|
1,094
|
|
|
908
|
|
|
930
|
|
|||||||||
Expected return on assets
|
(44,968
|
)
|
|
(48,159
|
)
|
|
(48,235
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Settlement of retiree obligations
|
51
|
|
|
—
|
|
|
—
|
|
|
191
|
|
|
(112
|
)
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Prior service cost (credit) amortization
|
190
|
|
|
1,437
|
|
|
1,540
|
|
|
(75
|
)
|
|
30
|
|
|
19
|
|
|
(556
|
)
|
|
(565
|
)
|
|
(565
|
)
|
|||||||||
Actuarial loss (gain) amortization
|
12,348
|
|
|
18,073
|
|
|
22,869
|
|
|
2
|
|
|
61
|
|
|
546
|
|
|
(1,627
|
)
|
|
(1,224
|
)
|
|
(798
|
)
|
|||||||||
Net periodic benefit cost (benefit)
|
$
|
34,609
|
|
|
$
|
35,035
|
|
|
$
|
41,322
|
|
|
$
|
1,176
|
|
|
$
|
1,238
|
|
|
$
|
2,584
|
|
|
$
|
(36
|
)
|
|
$
|
62
|
|
|
$
|
727
|
|
Weighted-average assumptions to determine the net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Discount rate
|
4.23
|
%
|
|
3.80
|
%
|
|
3.60
|
%
|
|
4.09
|
%
|
|
3.53
|
%
|
|
3.28
|
%
|
|
4.08
|
%
|
|
3.56
|
%
|
|
3.30
|
%
|
|||||||||
Expected return on plan assets
|
5.50
|
%
|
|
5.75
|
%
|
|
5.75
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||||||
Rate of compensation increase
|
5.14
|
%
|
|
5.08
|
%
|
|
5.60
|
%
|
|
5.14
|
%
|
|
5.08
|
%
|
|
5.60
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||||||
Weighted-average assumptions to determine the benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Discount rate
|
3.06
|
%
|
|
4.23
|
%
|
|
3.80
|
%
|
|
2.70
|
%
|
|
4.09
|
%
|
|
3.53
|
%
|
|
2.89
|
%
|
|
4.13
|
%
|
|
3.56
|
%
|
|||||||||
Rate of compensation increase
|
5.28
|
%
|
|
5.14
|
%
|
|
5.08
|
%
|
|
5.28
|
%
|
|
5.14
|
%
|
|
5.08
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Qualified
Pension Benefits
|
|
Non-Qualified
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Prior service cost (credit)
|
$
|
18
|
|
|
$
|
244
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net actuarial loss (gain)
|
47,556
|
|
|
(8,553
|
)
|
|
(16,044
|
)
|
|
1,917
|
|
|
(578
|
)
|
|
(6,345
|
)
|
|
801
|
|
|
(2,234
|
)
|
|
(5,427
|
)
|
|||||||||
Amortization of actuarial loss (gain)
|
(12,307
|
)
|
|
(18,073
|
)
|
|
(22,869
|
)
|
|
(2
|
)
|
|
(61
|
)
|
|
(546
|
)
|
|
1,627
|
|
|
1,224
|
|
|
798
|
|
|||||||||
Amortization of prior service costs (credit)
|
(190
|
)
|
|
(1,437
|
)
|
|
(1,540
|
)
|
|
75
|
|
|
(30
|
)
|
|
(19
|
)
|
|
556
|
|
|
565
|
|
|
565
|
|
|||||||||
Settlement of retiree obligations (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(191
|
)
|
|
112
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total recognized in other comprehensive income
|
$
|
35,077
|
|
|
$
|
(27,819
|
)
|
|
$
|
(40,453
|
)
|
|
$
|
1,799
|
|
|
$
|
(557
|
)
|
|
$
|
(6,880
|
)
|
|
$
|
2,984
|
|
|
$
|
(445
|
)
|
|
$
|
(4,064
|
)
|
|
Qualified
Pension Benefits
|
|
Non-Qualified
Pension Benefits
|
|
Other
Benefits
|
||||||
|
(Dollars in thousands)
|
||||||||||
Amortization of prior service cost (credit)
|
$
|
178
|
|
|
$
|
(114
|
)
|
|
$
|
(556
|
)
|
Amortization of actuarial (gain) loss
|
21,583
|
|
|
98
|
|
|
(1,392
|
)
|
|
1% Increase
|
|
1% Decrease
|
||||
|
(Dollars in thousands)
|
||||||
Effect on total of service and interest cost components
|
$
|
200
|
|
|
$
|
(170
|
)
|
Effect on postretirement benefit obligation
|
2,000
|
|
|
(1,700
|
)
|
|
Qualified
Pension Benefits
|
|
Non-Qualified
Pension Benefits
|
|
Other Benefits
|
||||||
|
(Dollars in thousands)
|
||||||||||
2020
|
$
|
72,600
|
|
|
$
|
1,580
|
|
|
$
|
2,040
|
|
2021
|
64,900
|
|
|
1,370
|
|
|
2,180
|
|
|||
2022
|
61,900
|
|
|
1,940
|
|
|
2,410
|
|
|||
2023
|
63,900
|
|
|
1,950
|
|
|
2,540
|
|
|||
2024
|
65,000
|
|
|
2,030
|
|
|
2,520
|
|
|||
2025-2029
|
326,100
|
|
|
8,840
|
|
|
11,110
|
|
•
|
optimization of the long-term returns on plan assets at an acceptable level of risk;
|
•
|
maintenance of broad diversification across asset classes and among investment managers; and
|
•
|
focus on long-term return objectives.
|
|
2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Cash and cash equivalents
|
$
|
7,938
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,938
|
|
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common/collective trust at net asset value (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
209,860
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common/collective trust at net asset value (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
574,296
|
|
||||
Partnership and joint venture interests measured at net asset value (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
101,641
|
|
||||
Other assets measured at net asset value (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
15,692
|
|
||||
Total
|
$
|
7,938
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
909,427
|
|
|
2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Cash and cash equivalents
|
$
|
7,424
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,424
|
|
Equities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mutual funds
|
692
|
|
|
—
|
|
|
—
|
|
|
692
|
|
||||
Common/collective trust at net asset value (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
216,962
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common/collective trust at net asset value (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
500,637
|
|
||||
Partnership and joint venture interests measured at net asset value (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
101,954
|
|
||||
Other assets measured at net asset value (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,947
|
|
||||
Total
|
$
|
8,116
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
829,616
|
|
•
|
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.
|
|
|
|
|
Contributions of CHS
|
|
|
|
|
||||||||||
|
|
|
|
(Dollars in thousands)
|
|
|
|
|
||||||||||
Plan Name
|
|
EIN/Plan Number
|
|
2019
|
|
2018
|
|
2017
|
|
Surcharge Imposed
|
|
Expiration Date of Collective Bargaining Agreement
|
||||||
Co-op Retirement Plan
|
|
01-0689331 / 001
|
|
$
|
1,712
|
|
|
$
|
1,662
|
|
|
$
|
1,653
|
|
|
N/A
|
|
N/A
|
|
Energy
|
|
Ag
|
|
Nitrogen Production
|
|
Corporate
and Other |
|
Reconciling
Amounts |
|
Total
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
For the year ended August 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revenues, including intersegment revenues
|
$
|
7,581,450
|
|
|
$
|
24,736,425
|
|
|
$
|
—
|
|
|
$
|
68,710
|
|
|
$
|
(486,132
|
)
|
|
$
|
31,900,453
|
|
Operating earnings (loss)
|
615,662
|
|
|
65,181
|
|
|
(35,046
|
)
|
|
13,805
|
|
|
—
|
|
|
659,602
|
|
||||||
(Gain) loss on disposal of business
|
—
|
|
|
(3,886
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,886
|
)
|
||||||
Interest expense
|
5,719
|
|
|
101,386
|
|
|
55,226
|
|
|
11,684
|
|
|
(6,950
|
)
|
|
167,065
|
|
||||||
Other (income) loss
|
(5,548
|
)
|
|
(70,888
|
)
|
|
(2,769
|
)
|
|
(10,168
|
)
|
|
6,950
|
|
|
(82,423
|
)
|
||||||
Equity (income) loss from investments
|
(2,697
|
)
|
|
(4,447
|
)
|
|
(160,373
|
)
|
|
(69,238
|
)
|
|
—
|
|
|
(236,755
|
)
|
||||||
Income (loss) before income taxes
|
$
|
618,188
|
|
|
$
|
43,016
|
|
|
$
|
72,870
|
|
|
$
|
81,527
|
|
|
$
|
—
|
|
|
$
|
815,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intersegment revenues
|
$
|
(462,374
|
)
|
|
$
|
(16,353
|
)
|
|
$
|
—
|
|
|
$
|
(7,405
|
)
|
|
$
|
486,132
|
|
|
$
|
—
|
|
Capital expenditures
|
268,877
|
|
|
110,197
|
|
|
—
|
|
|
64,142
|
|
|
—
|
|
|
443,216
|
|
||||||
Depreciation and amortization
|
233,624
|
|
|
208,294
|
|
|
—
|
|
|
31,293
|
|
|
—
|
|
|
473,211
|
|
||||||
Total assets as of August 31, 2019
|
4,401,793
|
|
|
6,415,580
|
|
|
2,730,306
|
|
|
2,899,815
|
|
|
—
|
|
|
16,447,494
|
|
|
Energy
|
|
Ag
|
|
Nitrogen Production
|
|
Corporate
and Other |
|
Reconciling
Amounts |
|
Total
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
For the year ended August 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues, including intersegment revenues
|
$
|
8,068,717
|
|
|
$
|
25,052,395
|
|
|
$
|
—
|
|
|
$
|
64,516
|
|
|
$
|
(502,281
|
)
|
|
$
|
32,683,347
|
|
Operating earnings (loss)
|
388,112
|
|
|
93,728
|
|
|
(20,619
|
)
|
|
(8,857
|
)
|
|
—
|
|
|
452,364
|
|
||||||
(Gain) loss on disposal of business
|
(65,862
|
)
|
|
(7,707
|
)
|
|
—
|
|
|
(58,247
|
)
|
|
—
|
|
|
(131,816
|
)
|
||||||
Interest expense
|
14,627
|
|
|
94,256
|
|
|
50,499
|
|
|
(7,712
|
)
|
|
(2,468
|
)
|
|
149,202
|
|
||||||
Other (income) loss
|
(9,698
|
)
|
|
(68,471
|
)
|
|
(3,061
|
)
|
|
(3,975
|
)
|
|
2,468
|
|
|
(82,737
|
)
|
||||||
Equity (income) loss from investments
|
(3,063
|
)
|
|
1,392
|
|
|
(106,895
|
)
|
|
(44,949
|
)
|
|
—
|
|
|
(153,515
|
)
|
||||||
Income (loss) before income taxes
|
$
|
452,108
|
|
|
$
|
74,258
|
|
|
$
|
38,838
|
|
|
$
|
106,026
|
|
|
$
|
—
|
|
|
$
|
671,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intersegment revenues
|
$
|
(479,598
|
)
|
|
$
|
(14,914
|
)
|
|
$
|
—
|
|
|
$
|
(7,769
|
)
|
|
$
|
502,281
|
|
|
$
|
—
|
|
Capital expenditures
|
248,207
|
|
|
77,962
|
|
|
—
|
|
|
29,243
|
|
|
—
|
|
|
355,412
|
|
||||||
Depreciation and amortization
|
230,230
|
|
|
218,716
|
|
|
—
|
|
|
29,104
|
|
|
—
|
|
|
478,050
|
|
||||||
Total assets as of August 31, 2018
|
4,168,239
|
|
|
6,534,777
|
|
|
2,758,668
|
|
|
2,919,494
|
|
|
—
|
|
|
16,381,178
|
|
|
Energy
|
|
Ag
|
|
Nitrogen Production
|
|
Corporate
and Other |
|
Reconciling
Amounts |
|
Total
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||
For the year ended August 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues, including intersegment revenues
|
$
|
6,620,680
|
|
|
$
|
25,738,740
|
|
|
$
|
—
|
|
|
$
|
95,414
|
|
|
$
|
(417,408
|
)
|
|
$
|
32,037,426
|
|
Operating earnings (loss)
|
75,203
|
|
|
(268,884
|
)
|
|
(18,430
|
)
|
|
38,233
|
|
|
—
|
|
|
(173,878
|
)
|
||||||
(Gain) loss on disposal of business
|
—
|
|
|
2,190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,190
|
|
||||||
Interest expense
|
18,365
|
|
|
71,986
|
|
|
48,893
|
|
|
33,250
|
|
|
(1,255
|
)
|
|
171,239
|
|
||||||
Other (income) loss
|
(1,099
|
)
|
|
(65,622
|
)
|
|
(30,534
|
)
|
|
(3,803
|
)
|
|
1,255
|
|
|
(99,803
|
)
|
||||||
Equity (income) loss from investments
|
(3,181
|
)
|
|
(7,277
|
)
|
|
(66,530
|
)
|
|
(60,350
|
)
|
|
—
|
|
|
(137,338
|
)
|
||||||
Income (loss) before income taxes
|
$
|
61,118
|
|
|
$
|
(270,161
|
)
|
|
$
|
29,741
|
|
|
$
|
69,136
|
|
|
$
|
—
|
|
|
$
|
(110,166
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intersegment revenues
|
$
|
(392,842
|
)
|
|
$
|
(20,312
|
)
|
|
$
|
—
|
|
|
$
|
(4,254
|
)
|
|
$
|
417,408
|
|
|
$
|
—
|
|
Capital expenditures
|
260,543
|
|
|
146,139
|
|
|
—
|
|
|
37,715
|
|
|
—
|
|
|
444,397
|
|
||||||
Depreciation and amortization
|
223,229
|
|
|
232,443
|
|
|
—
|
|
|
24,551
|
|
|
—
|
|
|
480,223
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
North America (a)
|
$
|
27,896,269
|
|
|
$
|
29,475,724
|
|
|
$
|
29,068,842
|
|
South America
|
2,027,020
|
|
|
1,569,330
|
|
|
1,441,316
|
|
|||
Europe, Middle East and Africa (EMEA)
|
895,472
|
|
|
536,501
|
|
|
652,308
|
|
|||
Asia Pacific (APAC)
|
1,081,692
|
|
|
1,101,792
|
|
|
874,960
|
|
|||
Total
|
$
|
31,900,453
|
|
|
$
|
32,683,347
|
|
|
$
|
32,037,426
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
United States
|
$
|
5,295,752
|
|
|
$
|
5,185,572
|
|
International
|
79,846
|
|
|
86,927
|
|
||
Total
|
$
|
5,375,598
|
|
|
$
|
5,272,499
|
|
|
August 31, 2019
|
||||||||||||||
|
|
|
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 derivatives
|
$
|
215,030
|
|
|
$
|
—
|
|
|
$
|
58,726
|
|
|
$
|
156,304
|
|
Foreign exchange derivatives
|
10,334
|
|
|
—
|
|
|
7,108
|
|
|
3,226
|
|
||||
Embedded derivative asset
|
21,364
|
|
|
—
|
|
|
—
|
|
|
21,364
|
|
||||
Total
|
$
|
246,728
|
|
|
$
|
—
|
|
|
$
|
65,834
|
|
|
$
|
180,894
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity derivatives
|
$
|
223,410
|
|
|
$
|
4,191
|
|
|
$
|
41,647
|
|
|
$
|
177,572
|
|
Foreign exchange derivatives
|
20,609
|
|
|
—
|
|
|
7,108
|
|
|
13,501
|
|
||||
Total
|
$
|
244,019
|
|
|
$
|
4,191
|
|
|
$
|
48,755
|
|
|
$
|
191,073
|
|
|
August 31, 2018
|
||||||||||||||
|
|
|
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 derivatives
|
$
|
313,033
|
|
|
$
|
—
|
|
|
$
|
26,781
|
|
|
$
|
286,252
|
|
Foreign exchange derivatives
|
15,401
|
|
|
—
|
|
|
8,703
|
|
|
6,698
|
|
||||
Embedded derivative asset
|
23,595
|
|
|
—
|
|
|
—
|
|
|
23,595
|
|
||||
Total
|
$
|
352,029
|
|
|
$
|
—
|
|
|
$
|
35,484
|
|
|
$
|
316,545
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity derivatives
|
$
|
421,054
|
|
|
$
|
12,983
|
|
|
$
|
26,781
|
|
|
$
|
381,290
|
|
Foreign exchange derivatives
|
24,701
|
|
|
—
|
|
|
8,703
|
|
|
15,998
|
|
||||
Total
|
$
|
445,755
|
|
|
$
|
12,983
|
|
|
$
|
35,484
|
|
|
$
|
397,288
|
|
Derivative Type
|
Location of
Gain (Loss)
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
(Dollars in thousands)
|
||||||||||
Commodity derivatives
|
Cost of goods sold
|
|
$
|
125,323
|
|
|
$
|
162,321
|
|
|
$
|
168,569
|
|
Foreign exchange derivatives
|
Cost of goods sold
|
|
4,228
|
|
|
(26,010
|
)
|
|
(13,140
|
)
|
|||
Foreign exchange derivatives
|
Marketing, general and administrative expenses
|
|
(1,229
|
)
|
|
596
|
|
|
(1,604
|
)
|
|||
Interest rate derivatives
|
Interest expense
|
|
—
|
|
|
(1
|
)
|
|
8
|
|
|||
Embedded derivative
|
Other income (loss)
|
|
2,769
|
|
|
3,061
|
|
|
30,533
|
|
|||
Total
|
|
|
$
|
131,091
|
|
|
$
|
139,967
|
|
|
$
|
184,366
|
|
|
2019
|
|
2018
|
||||||||
Derivative Type
|
Long
|
|
Short
|
|
Long
|
|
Short
|
||||
|
(Units in thousands)
|
||||||||||
Grain and oilseed (bushels)
|
547,096
|
|
|
717,522
|
|
|
715,866
|
|
|
929,873
|
|
Energy products (barrels)
|
13,895
|
|
|
4,663
|
|
|
17,011
|
|
|
8,329
|
|
Processed grain and oilseed (tons)
|
597
|
|
|
2,454
|
|
|
1,064
|
|
|
2,875
|
|
Crop nutrients (tons)
|
76
|
|
|
23
|
|
|
11
|
|
|
76
|
|
Ocean freight (metric tons)
|
295
|
|
|
85
|
|
|
227
|
|
|
45
|
|
Natural gas (MMBtu)
|
130
|
|
|
—
|
|
|
610
|
|
|
—
|
|
|
|
2019
|
|
2018
|
|
|
|
2019
|
|
2018
|
||||||||
Balance Sheet Location
|
|
Derivative Assets
|
|
Balance Sheet Location
|
|
Derivative Liabilities
|
||||||||||||
|
|
(Dollars in thousands)
|
|
|
|
(Dollars in thousands)
|
||||||||||||
Derivative assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Derivative liabilities
|
|
$
|
—
|
|
|
$
|
771
|
|
Other assets
|
|
9,841
|
|
|
—
|
|
|
Other liabilities
|
|
—
|
|
|
8,681
|
|
||||
Total
|
|
$
|
9,841
|
|
|
$
|
—
|
|
|
Total
|
|
$
|
—
|
|
|
$
|
9,452
|
|
Gain (Loss) on Fair Value Hedging Relationships:
|
|
Location of
Gain (Loss)
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
(Dollars in thousands)
|
||||||||||
Interest rate swaps
|
|
Interest expense
|
|
$
|
21,158
|
|
|
$
|
18,723
|
|
|
$
|
12,806
|
|
Hedged item
|
|
Interest expense
|
|
(21,158
|
)
|
|
(18,723
|
)
|
|
(12,806
|
)
|
|||
Total
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
August 31, 2019
|
|
August 31, 2018
|
||||||||||||
Balance Sheet Location
|
|
Carrying Amount of Hedged Liabilities
|
|
Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Liabilities
|
|
Carrying Amount of Hedged Liabilities
|
|
Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Liabilities
|
||||||||
|
|
(Dollars in thousands)
|
||||||||||||||
Long-term debt
|
|
$
|
334,389
|
|
|
$
|
30,611
|
|
|
$
|
485,548
|
|
|
$
|
9,452
|
|
|
|
Derivative Assets
|
|
|
|
Derivative Liabilities
|
||||||||||||
Balance Sheet Location
|
|
August 31, 2019
|
|
August 31, 2018
|
|
Balance Sheet Location
|
|
August 31, 2019
|
|
August 31, 2018
|
||||||||
|
|
(Dollars in thousands)
|
|
|
|
(Dollars in thousands)
|
||||||||||||
Derivative assets
|
|
$
|
33,179
|
|
|
$
|
812
|
|
|
Derivative liabilities
|
|
$
|
5,351
|
|
|
$
|
634
|
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
Commodity derivatives
|
|
$
|
27,650
|
|
|
$
|
178
|
|
|
$
|
—
|
|
|
Location of
Gain (Loss)
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
(Dollars in thousands)
|
||||||||||
Commodity derivatives
|
Cost of goods sold
|
|
$
|
11,497
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2019
|
||||||||||||||
|
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 derivatives
|
$
|
67,817
|
|
|
$
|
180,392
|
|
|
$
|
—
|
|
|
$
|
248,209
|
|
Foreign currency derivatives
|
—
|
|
|
10,339
|
|
|
—
|
|
|
10,339
|
|
||||
Interest rate swap derivatives
|
—
|
|
|
9,841
|
|
|
—
|
|
|
9,841
|
|
||||
Deferred compensation assets
|
40,368
|
|
|
—
|
|
|
—
|
|
|
40,368
|
|
||||
Embedded derivative asset
|
—
|
|
|
21,364
|
|
|
—
|
|
|
21,364
|
|
||||
Segregated investments
|
77,777
|
|
|
—
|
|
|
—
|
|
|
77,777
|
|
||||
Other assets
|
6,519
|
|
|
—
|
|
|
—
|
|
|
6,519
|
|
||||
Total
|
$
|
192,481
|
|
|
$
|
221,936
|
|
|
$
|
—
|
|
|
$
|
414,417
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
Commodity derivatives
|
$
|
40,305
|
|
|
$
|
188,455
|
|
|
$
|
—
|
|
|
$
|
228,760
|
|
Foreign currency derivatives
|
—
|
|
|
20,701
|
|
|
—
|
|
|
20,701
|
|
||||
Total
|
$
|
40,305
|
|
|
$
|
209,156
|
|
|
$
|
—
|
|
|
$
|
249,461
|
|
|
2018
|
||||||||||||||
|
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 derivatives
|
$
|
54,487
|
|
|
$
|
259,359
|
|
|
$
|
—
|
|
|
$
|
313,846
|
|
Foreign currency derivatives
|
—
|
|
|
15,401
|
|
|
—
|
|
|
15,401
|
|
||||
Deferred compensation assets
|
39,073
|
|
|
—
|
|
|
—
|
|
|
39,073
|
|
||||
Embedded derivative asset
|
—
|
|
|
23,595
|
|
|
—
|
|
|
23,595
|
|
||||
Other assets
|
5,334
|
|
|
—
|
|
|
—
|
|
|
5,334
|
|
||||
Total
|
$
|
98,894
|
|
|
$
|
298,355
|
|
|
$
|
—
|
|
|
$
|
397,249
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
Commodity derivatives
|
$
|
31,778
|
|
|
$
|
389,911
|
|
|
$
|
—
|
|
|
$
|
421,689
|
|
Foreign currency derivatives
|
—
|
|
|
24,701
|
|
|
—
|
|
|
24,701
|
|
||||
Interest rate swap derivatives
|
—
|
|
|
9,452
|
|
|
—
|
|
|
9,452
|
|
||||
Total
|
$
|
31,778
|
|
|
$
|
424,064
|
|
|
$
|
—
|
|
|
$
|
455,842
|
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
|
Total
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||
Long-term unconditional purchase obligations
|
$
|
623,193
|
|
|
$
|
81,607
|
|
|
$
|
63,286
|
|
|
$
|
58,965
|
|
|
$
|
59,419
|
|
|
$
|
58,804
|
|
|
$
|
301,112
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Net cash paid during the period for:
|
|
|
|
|
|
|
|
|
|||
Interest
|
$
|
172,259
|
|
|
$
|
148,874
|
|
|
$
|
160,040
|
|
Income taxes
|
19,918
|
|
|
13,410
|
|
|
14,571
|
|
|||
Other significant noncash investing and financing transactions:
|
|
|
|
|
|
|
|
|
|||
Notes receivable reacquired under Securitization Facility
|
—
|
|
|
615,089
|
|
|
—
|
|
|||
Trade receivables reacquired under Securitization Facility
|
—
|
|
|
402,421
|
|
|
—
|
|
|||
Securitized debt reacquired under Securitization Facility
|
—
|
|
|
634,000
|
|
|
—
|
|
|||
Deferred purchase price receivable extinguished under Securitization Facility
|
—
|
|
|
386,900
|
|
|
—
|
|
|||
Notes receivable sold under Securitization Facility
|
—
|
|
|
—
|
|
|
747,345
|
|
|||
Securitized debt extinguished under Securitization Facility
|
—
|
|
|
—
|
|
|
554,000
|
|
|||
Deferred purchase price receivable recognized under Securitization Facility
|
—
|
|
|
—
|
|
|
547,553
|
|
|||
Land and improvements received for notes receivable
|
—
|
|
|
—
|
|
|
138,699
|
|
|||
Capital expenditures and major maintenance incurred but not yet paid
|
28,478
|
|
|
53,453
|
|
|
22,490
|
|
|||
Capital lease obligations incurred
|
7,351
|
|
|
396
|
|
|
6,832
|
|
|||
Capital equity certificates redeemed with preferred stock
|
—
|
|
|
—
|
|
|
19,985
|
|
|||
Capital equity certificates issued in exchange for Ag acquisitions
|
—
|
|
|
—
|
|
|
2,928
|
|
|||
Accrual of dividends and equities payable
|
180,000
|
|
|
153,941
|
|
|
12,121
|
|
|||
Assets contributed to joint venture
|
7,353
|
|
|
—
|
|
|
—
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||
Sales
|
$
|
2,628,670
|
|
|
$
|
2,928,984
|
|
|
$
|
3,183,944
|
|
Purchases
|
901,812
|
|
|
2,505,185
|
|
|
2,610,887
|
|
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Due from related parties
|
$
|
26,785
|
|
|
$
|
31,063
|
|
Due to related parties
|
60,156
|
|
|
52,284
|
|
•
|
check mailed to the address of the record holder as it appears on our books;
|
•
|
electronic transfer in accordance with instructions provided by the record holder; or
|
•
|
any other means mutually agreed between us and the record holder.
|
•
|
dividends will cease to accumulate with respect to the shares of 8% Preferred Stock called for redemption;
|
•
|
the shares of 8% Preferred Stock called for redemption will no longer be deemed outstanding;
|
•
|
the holders of the shares of 8% Preferred Stock called for redemption will cease to be shareholders with respect to those shares; and
|
•
|
all rights with respect to the shares of 8% Preferred Stock called for redemption will terminate except the right of the holders to receive the redemption price, without interest.
|
•
|
for any amendment, alteration or repeal, whether by merger or consolidation or otherwise, of our Articles of Incorporation or the resolutions establishing the terms of the 8% Preferred Stock if the amendment, alteration or repeal adversely affects the rights or preferences of the 8% Preferred Stock; and
|
•
|
to establish, by board resolution or otherwise, any class or series of equity security of the Company having rights senior to the 8% Preferred Stock as to the payment of dividends or distribution of assets upon our liquidation, dissolution or winding up, whether voluntary or involuntary.
|
•
|
in any calendar year, we may not issue additional shares of 8% Preferred Stock in exchange for or in redemption of outstanding patrons’ equities or other equity securities held by our members in excess of 25% of the number of shares of 8% Preferred Stock outstanding at the end of the prior calendar year or 400,000 shares, whichever is greater; and
|
•
|
we may not issue additional shares of 8% Preferred Stock in exchange for or in redemption of outstanding patrons’ equities owned by an estate of one of our former individual members or in redemption of outstanding patrons’ equities owned by individual members who have reached age 72.
|
•
|
check mailed to the address of the record holder as it appears on our books;
|
•
|
electronic transfer in accordance with instructions provided by the record holder; or
|
•
|
any other means mutually agreed between us and the record holder.
|
•
|
dividends will cease to accumulate with respect to the shares of Class B Preferred Stock called for redemption;
|
•
|
the shares of Class B Preferred Stock called for redemption will no longer be deemed outstanding;
|
•
|
the holders of the shares of Class B Preferred Stock called for redemption will cease to be shareholders with respect to those shares; and
|
•
|
all rights with respect to the shares of Class B Preferred Stock called for redemption will terminate except the right of the holders to receive the redemption price, without interest.
|
•
|
for any amendment, alteration or repeal, whether by merger or consolidation or otherwise, of our Articles of Incorporation or the resolutions establishing the terms of the Class B Preferred Stock if the amendment, alteration or repeal adversely affects the powers, rights or preferences of the Class B Preferred Stock; and
|
•
|
to establish, by board resolution or otherwise, any class or series of capital stock or equity capital of the Company having rights senior to the Class B Preferred Stock as to the payment of dividends or distribution of assets upon our liquidation, dissolution or winding up, whether voluntary or involuntary.
|
Plan Purpose
|
•
|
Drive strong business performance and reward Participants for achieving challenging goals
|
•
|
Emphasize shared ownership of CHS priorities, and reward for the achievement of results through collaborative work efforts
|
•
|
Create a line of sight for Participants to see how their actions contribute to the achievement of CHS priorities
|
•
|
Reward goal achievement that is competitive with compensation in the external market and aligns with organizational and market best practices
|
Performance Period
|
Plan Trigger
|
•
|
If the company Threshold ROIC Performance is attained, then compensation earned under all Plan components, including enterprise, business unit and individual goals, are calculated independently.
|
•
|
If company Threshold ROIC Performance is not attained, the following will occur:
|
◦
|
Corporate participants’ opportunity for an earned award is zero for all plan components.
|
◦
|
Business unit participants’ opportunity for an earned award is zero for all Plan components unless the business unit ROA goal is achieved at the target performance level or higher. If the business unit target ROA goal is achieved, then compensation is earned for the performance achieved at the business unit ROA target performance level or higher for the ROA Plan component only.
|
Plan Goals
|
Financial Performance Targets
|
Description
|
Award as % of Target
|
Maximum
|
Maximum Performance Goal
|
200%
|
Target
|
Targeted Performance Goal
|
100%
|
Threshold
|
Minimum Performance Goal
|
50%
|
Employee Group
|
ROIC
|
ROA
|
Individual
|
Corporate Participants
|
60%
|
10%
|
30%
|
Business Unit Participants
|
10%
|
60%
|
30%
|
Award Methodology
|
Award Payment
|
Administration
|
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
|
•
|
Participants must have a hire or transfer date to an eligible position on or before June 1 of the Performance Period.
|
•
|
Salaried 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. Hourly Participants who become eligible during the Performance Period will earn and be paid compensation, based on actual earnings in an eligible position during the Performance Period, to include base pay and overtime earnings.
|
•
|
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.
|
•
|
Prorated awards, and portions of earned awards that have not yet been paid for Participants who are no longer employed by the company due to an eligible status change will be determined, approved and issued as soon as administratively feasible following the close of the 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.
|
•
|
Employees who are eligible to earn compensation as a full-time or part-time regularly scheduled employee and have a status change to Layoff at the end of the Performance Period are not eligible to participate in the Plan.
|
•
|
Participants may forfeit their eligibility to earn compensation under the Plan for any Performance Period, or have their award opportunity modified at the discretion of the Plan Administrators, if it is determined that the Participant has 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.
|
•
|
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
|
Proration Rule
|
Deceased
|
Days actually worked
|
Full Time
|
Days actually worked
|
Leave of Absence
|
First 90 days
|
Long-Term Disability
|
Days actually worked
|
Military Leave
|
First 90 days
|
Part Time
|
Days actually worked
|
Position Elimination (including Divestiture)
|
Days actually worked
|
Retirement as defined by the CHS Retirement Plan rules
|
Days actually worked
|
Separation from employment and return to employment during Performance Period
|
Days actually worked before and after separation if employee returns before 90 days
|
Short-Term Disability (including FMLA)
|
First 90 days
|
Worker’s Compensation
|
First 90 days
|
General Provisions
|
Company Return on Invested Capital (ROIC) and Return on Asset (ROA) Goals
|
Financial Performance Targets
|
CHS ROIC
|
CHS ROA
|
Description
|
Award as % of Target
|
Maximum
|
6.9%
|
6.9%
|
Maximum Performance Goal
|
200%
|
Target
|
5.9%
|
6.1%
|
Targeted Performance Goal
|
100%
|
Threshold
|
4.9%
|
5.2%
|
Minimum Performance Goal
|
50%
|
Return on Invested Capital (ROIC) Explanation
|
ROIC=
|
Adjusted Net Operating Profit After Tax*
|
Funded Debt + Equity**
|
Return on Assets (ROA) Explanation
|
ROA=
|
Adjusted Operating Income*
|
Net Assets**
|
Award Opportunity Example
|
Financial Performance Targets
|
Award Opportunity Percentage
|
Calculation
|
Earned Award 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
|
Award Calculation Example - Threshold Performance Attained
|
Plan Goals
|
Goal Weighting
|
Award Opportunity
|
X
|
Award as % of Target
|
=
|
Earned Award Amount
|
CHS ROIC
|
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
|
Plan Goals
|
Goal Weighting
|
Award Opportunity
|
X
|
Award as % of Target
|
=
|
Earned Award Amount
|
CHS ROIC
|
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
|
Award Calculation Example - Threshold Performance Not Attained
|
Plan Goals
|
Goal Weighting
|
Award Opportunity
|
X
|
Award as % of Target
|
=
|
Earned Award Amount
|
CHS ROIC
|
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
|
Performance Targets
|
CHS ROIC
|
Description
|
Award as % of Target Goal
|
Superior Performance Maximum
|
7.9%
|
Superior Performance Goal
|
400%
|
Maximum
|
6.9%
|
Maximum Performance Goal
|
200%
|
Target
|
5.9%
|
Target Performance Goal
|
100%
|
Threshold
|
4.9%
|
Minimum Performance Goal
|
50%
|
ROIC=
|
Adjusted Net Operating Profit After Tax*
|
Funded Debt + Equity**
|
SECTION 2.
|
Assumption by PNC Committed Purchaser and PNC Purchaser Agent.
|
(A)
|
35% (in the case of the largest state in terms of the aggregate Unpaid Balance of all Eligible Loans and Eligible Receivables); provided that, for the avoidance of doubt, the sum of the
|
(B)
|
30% (in the case of the second (2nd) largest state in terms of the aggregate Unpaid Balance of all Eligible Receivables and Eligible Loans); provided that, for the avoidance of doubt, the sum of the aggregate Unpaid Balance of all Eligible Loans for such state, after giving effect to this clause (ii)(b) plus the unpaid balance of all Eligible Receivables for such state after giving effect to clause (iii)(b) of the definition of Account Debtor Concentration Overage Amount shall not exceed the product of 30% of the sum of the Net Receivables Pool Balance and the Net Loan Pool Balance, and
|
(C)
|
15% (in the case of the third (3rd) largest state in terms of the aggregate Unpaid Balance of all Eligible Receivables and Eligible Loans); provided that, for the avoidance of doubt, the sum of the aggregate Unpaid Balance of all Eligible Loans for such state, after giving effect to this clause (ii)(c) plus the unpaid balance of all Eligible Receivables for such state after giving effect to clause (iii)(c) of the definition of Account Debtor Concentration Overage Amount shall not exceed the product of 15% of the sum of the Net Receivables Pool Balance and the Net Loan Pool Balance;
|
(D)
|
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; provided that, for the avoidance of doubt, the sum of the aggregate Unpaid Balance of all Eligible Loans for such state, after giving effect to this clause (iii) plus the unpaid balance of all Eligible Receivables for such state after giving effect to clause (iv) of the definition of Account Debtor Concentration Overage Amount shall not exceed the product of 10% of the sum of the Net Receivables Pool Balance and the Net Loan Pool Balance;
|
|
|
Bank Name
|
The Bank of Tokyo-Mitsubishi UFJ, Ltd. New York Branch
|
ABA #
|
XXX-XX-XXX
|
Account #
|
XXXXXXXXX
|
Account Name
|
VRC
|
Reference
|
Cofina Funding LLC
|
|
|
Bank Name
|
Deutsche Bank Trust Company Americas
|
ABA #
|
XXXXXXXXX
|
Account #
|
XXXXXXXX
|
Account Name
|
NYLTD Funds Control
|
Reference
|
PORT RABO09.1 // NieuwAm // Cofina
|
SUBSIDIARY
|
|
JURISDICTION OF
INCORPORATION/
ORGANIZATION
|
ACC Feed Supplement, LLC
|
|
South Dakota
|
|
|
|
Agri Point Ltd.
|
|
Republic of Cyprus
|
|
|
|
Agro Storage d.o.o, a subsidiary of Agri Point Ltd.
|
|
Bosnia
|
|
|
|
Ag States Reinsurance Co., IC, a subsidiary of Impact Risk Funding Inc.
|
|
Washington DC
|
|
|
|
Broadbent Grain Pty. Ltd.
|
|
Australia
|
|
|
|
CENEX AG, Inc.
|
|
Delaware
|
|
|
|
CENEX Pipeline, LLC
|
|
Minnesota
|
|
|
|
CHS de Argentina, S.A.
|
|
Argentina
|
|
|
|
CHS North LLC
|
|
Minnesota
|
|
|
|
CHS AGRONEGOCIO - Industria e Comercio Ltda.
|
|
Brazil
|
|
|
|
CHS Canada Cooperative
|
|
Alberta
|
|
|
|
CHS Country Operations Canada, Inc.
|
|
Alberta
|
|
|
|
CHS Capital, LLC
|
|
Minnesota
|
|
|
|
CHS (Taiwan) Commodity Trading Co. Ltd
|
|
Taiwan
|
|
|
|
CHS Trading Company Australia Pty. Ltd.
|
|
Australia
|
|
|
|
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 Tarim ve Gida Sanayii Limited Sirketi
|
|
Turkey
|
|
|
|
CHS Ukraine, LLC, a subsidiary of CHS Europe S.a.r.l
|
|
Ukraine
|
|
|
|
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
|
|
|
|
CHS Agritrade Bulgaria Ltd., a subsidiary of CHS Europe S.a.r.l
|
|
Bulgaria
|
|
|
|
SUBSIDIARY
|
|
JURISDICTION OF
INCORPORATION/
ORGANIZATION
|
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
|
|
|
|
CHS (Shanghai) Trading Co., Ltd., a subsidiary of CHS Hong Kong Ltd
|
|
China
|
|
|
|
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 Uruguay SRL
|
|
Uruguay
|
|
|
|
CHS-Brule, Inc
|
|
Nebraska
|
|
|
|
CHS-CFE Co
|
|
Illinois
|
|
|
|
CHS-Farmco, Inc.
|
|
Kansas
|
|
|
|
CHS-GC, Inc.
|
|
Colorado
|
|
|
|
CHS-Holdrege, Inc.
|
|
Nebraska
|
|
|
|
CHS-M&M, Inc.
|
|
Colorado
|
|
|
|
CHS-Shipman, Inc.
|
|
Illinois
|
|
|
|
CHS-Sub Sycamore, Co.
|
|
Illinois
|
|
|
|
CHS-Sub Whatcom, Inc
|
|
Washington
|
|
|
|
CHS-Valley City
|
|
North Dakota
|
|
|
|
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
|
|
|
|
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
|
|
|
|
GTL Resources Limited
|
|
England
|
SUBSIDIARY
|
|
JURISDICTION OF
INCORPORATION/
ORGANIZATION
|
|
|
|
GTL Resources Overseas Investments Limited
|
|
England
|
|
|
|
GTL Resources USA, Inc.
|
|
Delaware
|
|
|
|
IGH Insurance Company, IC
|
|
Washington DC
|
|
|
|
Illinois River Energy, LLC
|
|
Delaware
|
|
|
|
Jayhawk Pipeline, LLC
|
|
Kansas
|
|
|
|
Kaw Pipe Line Company
|
|
Delaware
|
|
|
|
Larsen Cooperative TVCS
|
|
Wisconsin
|
|
|
|
Lewis-Clark Terminal, Inc.
|
|
Idaho
|
|
|
|
Market Street Terminal, LLC
|
|
Illinois
|
|
|
|
Marshall Insurance Agency, Inc.
|
|
Minnesota
|
|
|
|
M Tarhaz Raktarozasi es Szolgaltato Korlatolt Felelossegu Tarsasag
|
|
Hungary
|
|
|
|
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
|
|
|
|
Rockville Propane Terminal LLC
|
|
Minnesota
|
|
|
|
Russell Consulting Group, LLC
|
|
Nebraska
|
|
|
|
CHS Agritrade Romania SRL, a subsidiary of CHS Europe S.a.r.l
|
|
Romania
|
|
|
|
S.C. Silotrans S.R.L.
|
|
Romania
|
|
|
|
S.C. Transporter S.R.L., a subsidiary of S.C. Silotrans S.R.L.
|
|
Romania
|
|
|
|
Sinav Limited
|
|
England
|
|
|
|
CHS de Paraguay SRL, a subsidiary of CHS Singapore Trading Company PTE. LTD.
|
|
Paraguay
|
|
|
|
Southwest Crop Nutrients, LLC
|
|
Kansas
|
|
|
|
St. Hilaire Ag Insurance, Inc.
|
|
Minnesota
|
|
|
|
St. Paul Maritime Corporation
|
|
Minnesota
|
|
|
|
Wagner Gas & Electric, Inc.
|
|
Wisconsin
|
|
|
|
Watertown Crop Nutrients LLC
|
|
South Dakota
|
|
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Jay D. Debertin
|
|
President and Chief Executive Officer
|
|
9/5/2019
|
Jay D. Debertin
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/s/ Timothy Skidmore
|
|
Executive Vice President and Chief Financial Officer
|
|
9/5/2019
|
Timothy Skidmore
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
/s/ Daniel Lehmann
|
|
Vice President Finance, Corporate Controller and Chief Accounting Officer
|
|
9/5/2019
|
Daniel Lehmann
|
|
(principal accounting officer)
|
|
|
|
|
|
|
|
/s/ Daniel Schurr
|
|
Chair of the Board of Directors
|
|
9/5/2019
|
Daniel Schurr
|
|
|
|
|
|
|
|
|
|
/s/ David Beckman
|
|
Director
|
|
9/5/2019
|
David Beckman
|
|
|
|
|
|
|
|
|
|
/s/ Clinton J. Blew
|
|
Director
|
|
9/5/2019
|
Clinton J. Blew
|
|
|
|
|
|
|
|
|
|
/s/ Dennis Carlson
|
|
Director
|
|
9/5/2019
|
Dennis Carlson
|
|
|
|
|
|
|
|
|
|
/s/ Scott A. Cordes
|
|
Director
|
|
9/5/2019
|
Scott A. Cordes
|
|
|
|
|
|
|
|
|
|
/s/ Jon Erickson
|
|
Director
|
|
9/5/2019
|
Jon Erickson
|
|
|
|
|
|
|
|
|
|
/s/ Mark Farrell
|
|
Director
|
|
9/5/2019
|
Mark Farrell
|
|
|
|
|
|
|
|
|
|
/s/ Steven Fritel
|
|
Director
|
|
9/5/2019
|
Steve Fritel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Alan Holm
|
|
Director
|
|
9/5/2019
|
Alan Holm
|
|
|
|
|
|
|
|
|
|
/s/ David Johnsrud
|
|
Director
|
|
9/5/2019
|
David Johnsrud
|
|
|
|
|
|
|
|
|
|
/s/ Tracy G. Jones
|
|
Director
|
|
9/5/2019
|
Tracey G. Jones
|
|
|
|
|
|
|
|
|
|
/s/ David R. Kayser
|
|
Director
|
|
9/5/2019
|
David R. Kayser
|
|
|
|
|
|
|
|
|
|
/s/ Russell A. Kehl
|
|
Director
|
|
9/5/2019
|
Russell A. Kehl
|
|
|
|
|
|
|
|
|
|
/s/ Randy Knecht
|
|
Director
|
|
9/5/2019
|
Randy Knecht
|
|
|
|
|
|
|
|
|
|
/s/ Edward Malesich
|
|
Director
|
|
9/5/2019
|
Edward Malesich
|
|
|
|
|
|
|
|
|
|
/s/ Perry Meyer
|
|
Director
|
|
9/5/2019
|
Perry Meyer
|
|
|
|
|
|
|
|
|
|
/s/ Steve Riegel
|
|
Director
|
|
9/5/2019
|
Steve Riegel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K for the fiscal year ended August 31, 2019, 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
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d.
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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
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5.
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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):
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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
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b.
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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.
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/s/ Jay D. Debertin
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Jay D. Debertin
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President and Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K for the fiscal year ended August 31, 2019 of CHS Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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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;
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b.
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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;
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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
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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
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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.
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/s/ Timothy Skidmore
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|
Timothy Skidmore
|
|
Executive Vice President and Chief Financial Officer
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(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
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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|
/s/ Jay D. Debertin
|
|
Jay D. Debertin
|
|
President and Chief Executive Officer
|
|
November 6, 2019
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(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 6, 2019
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