|
þ
|
|
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended November 30, 2019.
|
|
or
|
|||
o
|
|
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to
|
Minnesota
(State or other jurisdiction of
incorporation or organization)
|
|
41-0251095
(I.R.S. Employer
Identification Number)
|
|
|
|
5500 Cenex Drive Inver Grove Heights, Minnesota 55077
(Address of principal executive offices,
including zip code)
|
|
(651) 355-6000
(Registrant’s telephone number,
including area code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
8% Cumulative Redeemable Preferred Stock
|
CHSCP
|
The Nasdaq Stock Market LLC
|
Class B Cumulative Redeemable Preferred Stock, Series 1
|
CHSCO
|
The Nasdaq Stock Market LLC
|
Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2
|
CHSCN
|
The Nasdaq Stock Market LLC
|
Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3
|
CHSCM
|
The Nasdaq Stock Market LLC
|
Class B Cumulative Redeemable Preferred Stock, Series 4
|
CHSCL
|
The Nasdaq Stock Market LLC
|
Large accelerated filer o
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Accelerated filer o
|
Non-accelerated filer þ
|
Smaller reporting company o
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Emerging growth company o
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|
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Page
No.
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||
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||
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November 30,
2019 |
|
August 31,
2019 |
||||
|
(Dollars in thousands)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
192,761
|
|
|
$
|
211,179
|
|
Receivables
|
2,631,374
|
|
|
2,731,209
|
|
||
Inventories
|
3,368,868
|
|
|
2,854,288
|
|
||
Other current assets
|
980,904
|
|
|
865,919
|
|
||
Total current assets
|
7,173,907
|
|
|
6,662,595
|
|
||
Investments
|
3,713,201
|
|
|
3,683,996
|
|
||
Property, plant and equipment
|
5,086,628
|
|
|
5,088,708
|
|
||
Other assets
|
1,240,555
|
|
|
1,012,195
|
|
||
Total assets
|
$
|
17,214,291
|
|
|
$
|
16,447,494
|
|
LIABILITIES AND EQUITIES
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
||
Notes payable
|
$
|
2,170,924
|
|
|
$
|
2,156,108
|
|
Current portion of long-term debt
|
28,231
|
|
|
39,210
|
|
||
Accounts payable
|
2,447,610
|
|
|
1,931,415
|
|
||
Accrued expenses
|
467,765
|
|
|
555,323
|
|
||
Other current liabilities
|
1,066,902
|
|
|
901,651
|
|
||
Total current liabilities
|
6,181,432
|
|
|
5,583,707
|
|
||
Long-term debt
|
1,725,837
|
|
|
1,749,901
|
|
||
Other liabilities
|
684,106
|
|
|
496,356
|
|
||
Commitments and contingencies (Note 13)
|
|
|
|
|
|
||
Equities:
|
|
|
|
|
|
||
Preferred stock
|
2,264,038
|
|
|
2,264,038
|
|
||
Equity certificates
|
4,897,197
|
|
|
4,988,877
|
|
||
Accumulated other comprehensive loss
|
(228,571
|
)
|
|
(226,933
|
)
|
||
Capital reserves
|
1,681,597
|
|
|
1,584,158
|
|
||
Total CHS Inc. equities
|
8,614,261
|
|
|
8,610,140
|
|
||
Noncontrolling interests
|
8,655
|
|
|
7,390
|
|
||
Total equities
|
8,622,916
|
|
|
8,617,530
|
|
||
Total liabilities and equities
|
$
|
17,214,291
|
|
|
$
|
16,447,494
|
|
|
Three Months Ended November 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Revenues
|
$
|
7,621,485
|
|
|
$
|
8,484,289
|
|
Cost of goods sold
|
7,295,942
|
|
|
8,013,648
|
|
||
Gross profit
|
325,543
|
|
|
470,641
|
|
||
Marketing, general and administrative expenses
|
168,331
|
|
|
156,143
|
|
||
Operating earnings
|
157,212
|
|
|
314,498
|
|
||
Interest expense
|
34,971
|
|
|
38,908
|
|
||
Other income
|
(13,498
|
)
|
|
(25,134
|
)
|
||
Equity income from investments
|
(49,662
|
)
|
|
(66,508
|
)
|
||
Income before income taxes
|
185,401
|
|
|
367,232
|
|
||
Income tax expense
|
6,664
|
|
|
20,117
|
|
||
Net income
|
178,737
|
|
|
347,115
|
|
||
Net income (loss) attributable to noncontrolling interests
|
855
|
|
|
(389
|
)
|
||
Net income attributable to CHS Inc.
|
$
|
177,882
|
|
|
$
|
347,504
|
|
|
Three Months Ended November 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Net income
|
$
|
178,737
|
|
|
$
|
347,115
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
||||
Pension and other postretirement benefits
|
5,073
|
|
|
2,101
|
|
||
Cash flow hedges
|
(5,872
|
)
|
|
(1,307
|
)
|
||
Foreign currency translation adjustment
|
(839
|
)
|
|
(405
|
)
|
||
Other comprehensive (loss) income, net of tax
|
(1,638
|
)
|
|
389
|
|
||
Comprehensive income
|
177,099
|
|
|
347,504
|
|
||
Comprehensive income (loss) attributable to noncontrolling interests
|
855
|
|
|
(389
|
)
|
||
Comprehensive income attributable to CHS Inc.
|
$
|
176,244
|
|
|
$
|
347,893
|
|
|
Three Months Ended November 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
178,737
|
|
|
$
|
347,115
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation and amortization, including amortization of deferred major maintenance
|
136,643
|
|
|
137,779
|
|
||
Equity income from investments, net of distributions received
|
(30,468
|
)
|
|
(47,621
|
)
|
||
Provision for doubtful accounts
|
1,775
|
|
|
5,009
|
|
||
Deferred taxes
|
(3,579
|
)
|
|
26,555
|
|
||
Other, net
|
8,341
|
|
|
(3,162
|
)
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
Receivables
|
108,495
|
|
|
(182,767
|
)
|
||
Inventories
|
(514,580
|
)
|
|
(416,196
|
)
|
||
Accounts payable and accrued expenses
|
386,021
|
|
|
299,741
|
|
||
Other, net
|
(110,684
|
)
|
|
(261,251
|
)
|
||
Net cash provided by (used in) operating activities
|
160,701
|
|
|
(94,798
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Acquisition of property, plant and equipment
|
(131,808
|
)
|
|
(104,750
|
)
|
||
Proceeds from disposition of property, plant and equipment
|
3,015
|
|
|
5,752
|
|
||
Expenditures for major maintenance
|
(7,691
|
)
|
|
(3,441
|
)
|
||
Changes in CHS Capital notes receivable, net
|
15,195
|
|
|
(126,865
|
)
|
||
Financing extended to customers
|
(915
|
)
|
|
(3,928
|
)
|
||
Payments from customer financing
|
4,209
|
|
|
71,137
|
|
||
Other investing activities, net
|
3,046
|
|
|
7,319
|
|
||
Net cash used in investing activities
|
(114,949
|
)
|
|
(154,776
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from notes payable and long-term debt
|
5,414,395
|
|
|
4,429,276
|
|
||
Payments on notes payable, long-term debt and capital lease obligations
|
(5,445,420
|
)
|
|
(4,317,479
|
)
|
||
Preferred stock dividends paid
|
(42,167
|
)
|
|
(42,167
|
)
|
||
Redemptions of equities
|
(5,447
|
)
|
|
(24,072
|
)
|
||
Other financing activities, net
|
6,757
|
|
|
3,503
|
|
||
Net cash (used in) provided by financing activities
|
(71,882
|
)
|
|
49,061
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(1,153
|
)
|
|
(1,535
|
)
|
||
Decrease in cash and cash equivalents and restricted cash
|
(27,283
|
)
|
|
(202,048
|
)
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
299,675
|
|
|
543,940
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
$
|
272,392
|
|
|
$
|
341,892
|
|
|
|
ASC Topic 606
|
|
ASC Topic 815
|
|
Other Guidance
|
|
Total Revenues
|
||||||||
Three Months Ended November 30, 2019:
|
|
(Dollars in thousands)
|
||||||||||||||
Energy
|
|
$
|
1,693,848
|
|
|
$
|
201,575
|
|
|
$
|
—
|
|
|
$
|
1,895,423
|
|
Ag
|
|
1,358,626
|
|
|
4,316,087
|
|
|
37,142
|
|
|
5,711,855
|
|
||||
Corporate and Other
|
|
5,541
|
|
|
—
|
|
|
8,666
|
|
|
14,207
|
|
||||
Total revenues
|
|
$
|
3,058,015
|
|
|
$
|
4,517,662
|
|
|
$
|
45,808
|
|
|
$
|
7,621,485
|
|
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended November 30, 2018:
|
|
|
|
|
|
|
|
|
||||||||
Energy
|
|
$
|
1,940,190
|
|
|
$
|
221,098
|
|
|
$
|
—
|
|
|
$
|
2,161,288
|
|
Ag
|
|
1,355,826
|
|
|
4,913,428
|
|
|
36,143
|
|
|
6,305,397
|
|
||||
Corporate and Other
|
|
5,234
|
|
|
—
|
|
|
12,370
|
|
|
17,604
|
|
||||
Total revenues
|
|
$
|
3,301,250
|
|
|
$
|
5,134,526
|
|
|
$
|
48,513
|
|
|
$
|
8,484,289
|
|
|
November 30, 2019
|
|
August 31, 2019
|
||||
|
(Dollars in thousands)
|
||||||
Trade accounts receivable
|
$
|
1,706,564
|
|
|
$
|
1,803,284
|
|
CHS Capital short-term notes receivable
|
606,605
|
|
|
592,909
|
|
||
Other
|
497,880
|
|
|
511,821
|
|
||
Gross receivables
|
2,811,049
|
|
|
2,908,014
|
|
||
Less: allowances and reserves
|
179,675
|
|
|
176,805
|
|
||
Total receivables
|
$
|
2,631,374
|
|
|
$
|
2,731,209
|
|
|
November 30, 2019
|
|
August 31, 2019
|
||||
|
(Dollars in thousands)
|
||||||
Grain and oilseed
|
$
|
1,451,865
|
|
|
$
|
1,024,645
|
|
Energy
|
721,887
|
|
|
717,378
|
|
||
Agronomy
|
1,051,970
|
|
|
954,037
|
|
||
Processed grain and oilseed
|
102,483
|
|
|
109,900
|
|
||
Other
|
40,663
|
|
|
48,328
|
|
||
Total inventories
|
$
|
3,368,868
|
|
|
$
|
2,854,288
|
|
|
November 30, 2019
|
|
August 31, 2019
|
||||
|
(Dollars in thousands)
|
||||||
Equity method investments:
|
|
|
|
||||
CF Industries Nitrogen, LLC
|
$
|
2,743,776
|
|
|
$
|
2,708,942
|
|
Ventura Foods, LLC
|
378,463
|
|
|
374,516
|
|
||
Ardent Mills, LLC
|
209,956
|
|
|
209,027
|
|
||
Other equity method investments
|
256,042
|
|
|
267,247
|
|
||
Other investments
|
124,964
|
|
|
124,264
|
|
||
Total investments
|
$
|
3,713,201
|
|
|
$
|
3,683,996
|
|
|
Three Months Ended
November 30, |
||||||
|
2019
|
|
2018
|
||||
|
(Dollars in thousands)
|
||||||
Net sales
|
$
|
2,098,284
|
|
|
$
|
2,241,539
|
|
Gross profit
|
346,027
|
|
|
339,937
|
|
||
Net earnings
|
214,004
|
|
|
272,736
|
|
||
Earnings attributable to CHS Inc.
|
53,462
|
|
|
67,668
|
|
|
November 30, 2019
|
|
August 31, 2019
|
||||
|
(Dollars in thousands)
|
||||||
Notes payable
|
$
|
1,357,062
|
|
|
$
|
1,330,550
|
|
CHS Capital notes payable
|
813,862
|
|
|
825,558
|
|
||
Total notes payable
|
$
|
2,170,924
|
|
|
$
|
2,156,108
|
|
|
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)
|
||||||||||||||||||||||||||||||
Balance as of August 31, 2019
|
$
|
3,753,493
|
|
|
$
|
29,074
|
|
|
$
|
1,206,310
|
|
|
$
|
2,264,038
|
|
|
$
|
(226,933
|
)
|
|
$
|
1,584,158
|
|
|
$
|
7,390
|
|
|
$
|
8,617,530
|
|
Reversal of prior year redemption estimates
|
5,447
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,447
|
|
||||||||
Redemptions of equities
|
(4,721
|
)
|
|
(54
|
)
|
|
(672
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,447
|
)
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(84,334
|
)
|
|
—
|
|
|
(84,334
|
)
|
||||||||
ASC Topic 842 cumulative-effect adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,707
|
|
|
—
|
|
|
33,707
|
|
||||||||
Other, net
|
(8
|
)
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(1,312
|
)
|
|
410
|
|
|
(949
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
177,882
|
|
|
855
|
|
|
178,737
|
|
||||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,638
|
)
|
|
—
|
|
|
—
|
|
|
(1,638
|
)
|
||||||||
Estimated 2020 cash patronage refunds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28,504
|
)
|
|
—
|
|
|
(28,504
|
)
|
||||||||
Estimated 2020 equity redemptions
|
(91,633
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91,633
|
)
|
||||||||
Balance as of November 30, 2019
|
$
|
3,662,578
|
|
|
$
|
29,020
|
|
|
$
|
1,205,599
|
|
|
$
|
2,264,038
|
|
|
$
|
(228,571
|
)
|
|
$
|
1,681,597
|
|
|
$
|
8,655
|
|
|
$
|
8,622,916
|
|
|
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)
|
||||||||||||||||||||||||||||||
Balance as of 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 redemption estimates
|
24,072
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,072
|
|
||||||||
Redemptions of equities
|
(22,004
|
)
|
|
(183
|
)
|
|
(1,885
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,072
|
)
|
||||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(84,334
|
)
|
|
—
|
|
|
(84,334
|
)
|
||||||||
Reclassification of unrealized (gain) loss on investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,706
|
)
|
|
4,706
|
|
|
—
|
|
|
—
|
|
||||||||
Other, net
|
(409
|
)
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
3,436
|
|
|
318
|
|
|
3,319
|
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
347,504
|
|
|
(389
|
)
|
|
347,115
|
|
||||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
389
|
|
|
—
|
|
|
—
|
|
|
389
|
|
||||||||
Estimated 2019 cash patronage refunds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(89,344
|
)
|
|
—
|
|
|
(89,344
|
)
|
||||||||
Estimated 2019 equity redemptions
|
(50,081
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,081
|
)
|
||||||||
Balance as of November 30, 2018
|
$
|
3,789,158
|
|
|
$
|
29,315
|
|
|
$
|
740,467
|
|
|
$
|
2,264,038
|
|
|
$
|
(204,232
|
)
|
|
$
|
1,663,971
|
|
|
$
|
9,375
|
|
|
$
|
8,292,092
|
|
|
|
|
Three Months Ended
November 30, |
||||
|
Nasdaq symbol
|
|
2019
|
|
2018
|
||
Class of preferred stock:
|
|
|
(Dollars per share)
|
||||
8% Cumulative Redeemable
|
CHSCP
|
|
1.00
|
|
|
1.00
|
|
Class B Cumulative Redeemable, Series 1
|
CHSCO
|
|
0.98
|
|
|
0.98
|
|
Class B Reset Rate Cumulative Redeemable, Series 2
|
CHSCN
|
|
0.88
|
|
|
0.88
|
|
Class B Reset Rate Cumulative Redeemable, Series 3
|
CHSCM
|
|
0.84
|
|
|
0.84
|
|
Class B Cumulative Redeemable, Series 4
|
CHSCL
|
|
0.94
|
|
|
0.94
|
|
|
Pension and Other Postretirement Benefits
|
|
Cash Flow Hedges
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Balance as of August 31, 2019, net of tax
|
$
|
(172,478
|
)
|
|
$
|
15,297
|
|
|
$
|
(69,752
|
)
|
|
$
|
(226,933
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
||||||||
Amounts before reclassifications
|
(85
|
)
|
|
(3,331
|
)
|
|
(2,411
|
)
|
|
(5,827
|
)
|
||||
Amounts reclassified out
|
4,977
|
|
|
(4,473
|
)
|
|
—
|
|
|
504
|
|
||||
Total other comprehensive income (loss), before tax
|
4,892
|
|
|
(7,804
|
)
|
|
(2,411
|
)
|
|
(5,323
|
)
|
||||
Tax effect
|
181
|
|
|
1,932
|
|
|
1,572
|
|
|
3,685
|
|
||||
Other comprehensive income (loss), net of tax
|
5,073
|
|
|
(5,872
|
)
|
|
(839
|
)
|
|
(1,638
|
)
|
||||
Balance as of November 30, 2019, net of tax
|
$
|
(167,405
|
)
|
|
$
|
9,425
|
|
|
$
|
(70,591
|
)
|
|
$
|
(228,571
|
)
|
|
Pension and Other Postretirement Benefits
|
|
Unrealized Net Gain on Available for Sale Investments
|
|
Cash Flow Hedges
|
|
Foreign Currency Translation Adjustment
|
|
Total
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
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
|
175
|
|
|
—
|
|
|
(317
|
)
|
|
(25
|
)
|
|
(167
|
)
|
|||||
Amounts reclassified out
|
2,565
|
|
|
—
|
|
|
(1,475
|
)
|
|
—
|
|
|
1,090
|
|
|||||
Total other comprehensive income (loss), before tax
|
2,740
|
|
|
—
|
|
|
(1,792
|
)
|
|
(25
|
)
|
|
923
|
|
|||||
Tax effect
|
(639
|
)
|
|
—
|
|
|
485
|
|
|
(380
|
)
|
|
(534
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
2,101
|
|
|
—
|
|
|
(1,307
|
)
|
|
(405
|
)
|
|
389
|
|
|||||
Reclassifications
|
416
|
|
|
(8,861
|
)
|
|
983
|
|
|
2,756
|
|
|
(4,706
|
)
|
|||||
Balance as of November 30, 2018, net of tax
|
$
|
(137,818
|
)
|
|
$
|
—
|
|
|
$
|
(6,206
|
)
|
|
$
|
(60,208
|
)
|
|
$
|
(204,232
|
)
|
|
Three Months Ended November 30,
|
||||||||||||||||||||||
|
Qualified
Pension Benefits
|
|
Nonqualified
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Components of net periodic benefit costs:
|
(Dollars in thousands)
|
||||||||||||||||||||||
Service cost
|
$
|
10,538
|
|
|
$
|
9,648
|
|
|
$
|
101
|
|
|
$
|
78
|
|
|
$
|
262
|
|
|
$
|
263
|
|
Interest cost
|
5,431
|
|
|
7,099
|
|
|
107
|
|
|
187
|
|
|
187
|
|
|
274
|
|
||||||
Expected return on assets
|
(11,671
|
)
|
|
(11,242
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Prior service cost (credit) amortization
|
45
|
|
|
42
|
|
|
(28
|
)
|
|
(19
|
)
|
|
(111
|
)
|
|
(139
|
)
|
||||||
Actuarial loss (gain) amortization
|
5,396
|
|
|
3,087
|
|
|
25
|
|
|
—
|
|
|
(348
|
)
|
|
(407
|
)
|
||||||
Net periodic benefit cost
|
$
|
9,739
|
|
|
$
|
8,634
|
|
|
$
|
205
|
|
|
$
|
246
|
|
|
$
|
(10
|
)
|
|
$
|
(9
|
)
|
|
Energy
|
|
Ag
|
|
Nitrogen Production
|
|
Corporate
and Other |
|
Reconciling
Amounts |
|
Total
|
||||||||||||
Three Months Ended November 30, 2019:
|
(Dollars in thousands)
|
||||||||||||||||||||||
Revenues, including intersegment revenues
|
$
|
2,027,895
|
|
|
$
|
5,715,994
|
|
|
$
|
—
|
|
|
$
|
15,950
|
|
|
$
|
(138,354
|
)
|
|
$
|
7,621,485
|
|
Operating earnings (loss)
|
161,199
|
|
|
(417
|
)
|
|
(7,823
|
)
|
|
4,253
|
|
|
—
|
|
|
157,212
|
|
||||||
Interest expense
|
374
|
|
|
20,741
|
|
|
12,130
|
|
|
3,838
|
|
|
(2,112
|
)
|
|
34,971
|
|
||||||
Other income
|
(964
|
)
|
|
(11,453
|
)
|
|
(1,569
|
)
|
|
(1,624
|
)
|
|
2,112
|
|
|
(13,498
|
)
|
||||||
Equity (income) loss from investments
|
(364
|
)
|
|
4,157
|
|
|
(34,834
|
)
|
|
(18,621
|
)
|
|
—
|
|
|
(49,662
|
)
|
||||||
Income (loss) before income taxes
|
$
|
162,153
|
|
|
$
|
(13,862
|
)
|
|
$
|
16,450
|
|
|
$
|
20,660
|
|
|
$
|
—
|
|
|
$
|
185,401
|
|
Intersegment revenues
|
$
|
(132,472
|
)
|
|
$
|
(4,139
|
)
|
|
$
|
—
|
|
|
$
|
(1,743
|
)
|
|
$
|
138,354
|
|
|
$
|
—
|
|
Total assets as of November 30, 2019
|
$
|
4,449,652
|
|
|
$
|
7,108,507
|
|
|
$
|
2,761,709
|
|
|
$
|
2,894,423
|
|
|
$
|
—
|
|
|
$
|
17,214,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Energy
|
|
Ag
|
|
Nitrogen Production
|
|
Corporate
and Other |
|
Reconciling
Amounts |
|
Total
|
||||||||||||
Three Months Ended November 30, 2018:
|
(Dollars in thousands)
|
||||||||||||||||||||||
Revenues, including intersegment revenues
|
$
|
2,310,080
|
|
|
$
|
6,308,714
|
|
|
$
|
—
|
|
|
$
|
19,067
|
|
|
$
|
(153,572
|
)
|
|
$
|
8,484,289
|
|
Operating earnings (loss)
|
235,639
|
|
|
80,127
|
|
|
(5,128
|
)
|
|
3,860
|
|
|
—
|
|
|
314,498
|
|
||||||
Interest expense
|
4,237
|
|
|
21,000
|
|
|
13,679
|
|
|
763
|
|
|
(771
|
)
|
|
38,908
|
|
||||||
Other income
|
(986
|
)
|
|
(22,400
|
)
|
|
(1,571
|
)
|
|
(948
|
)
|
|
771
|
|
|
(25,134
|
)
|
||||||
Equity (income) loss from investments
|
(73
|
)
|
|
1,209
|
|
|
(40,915
|
)
|
|
(26,729
|
)
|
|
—
|
|
|
(66,508
|
)
|
||||||
Income before income taxes
|
$
|
232,461
|
|
|
$
|
80,318
|
|
|
$
|
23,679
|
|
|
$
|
30,774
|
|
|
$
|
—
|
|
|
$
|
367,232
|
|
Intersegment revenues
|
$
|
(148,792
|
)
|
|
$
|
(3,317
|
)
|
|
$
|
—
|
|
|
$
|
(1,463
|
)
|
|
$
|
153,572
|
|
|
$
|
—
|
|
|
November 30, 2019
|
||||||||||||||
|
|
|
Amounts Not Offset on Condensed Consolidated Balance Sheet but Eligible for Offsetting
|
|
|
||||||||||
|
Gross Amount Recognized
|
|
Cash Collateral
|
|
Derivative Instruments
|
|
Net Amount
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Derivative Assets
|
|
|
|
|
|
|
|
||||||||
Commodity derivatives
|
$
|
159,617
|
|
|
$
|
—
|
|
|
$
|
27,199
|
|
|
$
|
132,418
|
|
Foreign exchange derivatives
|
5,518
|
|
|
—
|
|
|
3,632
|
|
|
1,886
|
|
||||
Embedded derivative asset
|
17,933
|
|
|
—
|
|
|
—
|
|
|
17,933
|
|
||||
Total
|
$
|
183,068
|
|
|
$
|
—
|
|
|
$
|
30,831
|
|
|
$
|
152,237
|
|
Derivative Liabilities
|
|
|
|
|
|
|
|
||||||||
Commodity derivatives
|
$
|
183,025
|
|
|
$
|
3,030
|
|
|
$
|
37,749
|
|
|
$
|
142,246
|
|
Foreign exchange derivatives
|
19,297
|
|
|
—
|
|
|
3,632
|
|
|
15,665
|
|
||||
Total
|
$
|
202,322
|
|
|
$
|
3,030
|
|
|
$
|
41,381
|
|
|
$
|
157,911
|
|
|
August 31, 2019
|
||||||||||||||
|
|
|
Amounts Not Offset on Condensed Consolidated Balance Sheet but Eligible for Offsetting
|
|
|
||||||||||
|
Gross Amount Recognized
|
|
Cash Collateral
|
|
Derivative Instruments
|
|
Net Amount
|
||||||||
|
(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
|
|
|
|
|
Three Months Ended
November 30, |
||||||
|
Location of Gain (Loss)
|
|
2019
|
|
2018
|
||||
|
|
|
(Dollars in thousands)
|
||||||
Commodity derivatives
|
Cost of goods sold
|
|
$
|
42,674
|
|
|
$
|
(6,448
|
)
|
Foreign exchange derivatives
|
Cost of goods sold
|
|
(10,161
|
)
|
|
16,056
|
|
||
Foreign exchange derivatives
|
Marketing, general and administrative expenses
|
|
1,743
|
|
|
(832
|
)
|
||
Embedded derivative
|
Other income
|
|
1,569
|
|
|
1,571
|
|
||
Total
|
|
$
|
35,825
|
|
|
$
|
10,347
|
|
|
November 30, 2019
|
|
August 31, 2019
|
||||||||
|
Long
|
|
Short
|
|
Long
|
|
Short
|
||||
|
(Units in thousands)
|
||||||||||
Grain and oilseed (bushels)
|
546,758
|
|
|
733,722
|
|
|
547,096
|
|
|
717,522
|
|
Energy products (barrels)
|
9,705
|
|
|
5,363
|
|
|
13,895
|
|
|
4,663
|
|
Processed grain and oilseed (tons)
|
454
|
|
|
2,753
|
|
|
597
|
|
|
2,454
|
|
Crop nutrients (tons)
|
73
|
|
|
29
|
|
|
76
|
|
|
23
|
|
Ocean freight (metric tons)
|
200
|
|
|
55
|
|
|
295
|
|
|
85
|
|
Natural gas (MMBtu)
|
60
|
|
|
—
|
|
|
130
|
|
|
—
|
|
Balance Sheet Location
|
|
November 30, 2019
|
|
August 31, 2019
|
||||
|
|
(Dollars in thousands)
|
||||||
Other assets
|
|
$
|
6,886
|
|
|
$
|
9,841
|
|
|
|
November 30, 2019
|
|
August 31, 2019
|
||||||||||||
Balance Sheet Location
|
|
Carrying Amount of Hedged Liabilities
|
|
Cumulative Amount of Fair Value Hedging Adjustments Included in Carrying Amount of Hedged Liabilities
|
|
Carrying Amount of Hedged Liabilities
|
|
Cumulative Amount of Fair Value Hedging Adjustments Included in Carrying Amount of Hedged Liabilities
|
||||||||
|
|
(Dollars in thousands)
|
||||||||||||||
Long-term debt
|
|
$
|
331,435
|
|
|
$
|
33,565
|
|
|
$
|
334,389
|
|
|
$
|
30,611
|
|
|
|
Derivative Assets
|
|
|
|
Derivative Liabilities
|
||||||||||||
Balance Sheet Location
|
|
November 30, 2019
|
|
August 31, 2019
|
|
Balance Sheet Location
|
|
November 30, 2019
|
|
August 31, 2019
|
||||||||
|
|
(Dollars in thousands)
|
|
|
|
(Dollars in thousands)
|
||||||||||||
Other current assets
|
|
$
|
26,112
|
|
|
$
|
33,179
|
|
|
Other current liabilities
|
|
$
|
5,387
|
|
|
$
|
5,351
|
|
|
|
Three Months Ended
November 30, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
(Dollars in thousands)
|
||||||
Commodity derivatives
|
|
$
|
(7,103
|
)
|
|
$
|
(2,463
|
)
|
|
|
|
Three Months Ended
November 30, |
||||||
|
Location of Gain
|
|
2019
|
|
2018
|
||||
|
|
|
(Dollars in thousands)
|
||||||
Commodity derivatives
|
Cost of goods sold
|
|
$
|
4,852
|
|
|
$
|
1,900
|
|
|
November 30, 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
|
$
|
26,343
|
|
|
$
|
159,387
|
|
|
$
|
—
|
|
|
$
|
185,730
|
|
Foreign exchange derivatives
|
—
|
|
|
5,606
|
|
|
—
|
|
|
5,606
|
|
||||
Interest rate swap derivatives
|
—
|
|
|
6,886
|
|
|
—
|
|
|
6,886
|
|
||||
Deferred compensation assets
|
46,754
|
|
|
—
|
|
|
—
|
|
|
46,754
|
|
||||
Embedded derivative asset
|
—
|
|
|
17,933
|
|
|
—
|
|
|
17,933
|
|
||||
Segregated investments
|
91,080
|
|
|
—
|
|
|
—
|
|
|
91,080
|
|
||||
Other assets
|
6,082
|
|
|
—
|
|
|
—
|
|
|
6,082
|
|
||||
Total
|
$
|
170,259
|
|
|
$
|
189,812
|
|
|
$
|
—
|
|
|
$
|
360,071
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
Commodity derivatives
|
$
|
36,032
|
|
|
$
|
152,380
|
|
|
$
|
—
|
|
|
$
|
188,412
|
|
Foreign exchange derivatives
|
—
|
|
|
19,297
|
|
|
—
|
|
|
19,297
|
|
||||
Total
|
$
|
36,032
|
|
|
$
|
171,677
|
|
|
$
|
—
|
|
|
$
|
207,709
|
|
|
August 31, 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 exchange 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 exchange derivatives
|
—
|
|
|
20,701
|
|
|
—
|
|
|
20,701
|
|
||||
Total
|
$
|
40,305
|
|
|
$
|
209,156
|
|
|
$
|
—
|
|
|
$
|
249,461
|
|
|
Three Months Ended November 30, 2019
|
||
|
(Dollars in thousands)
|
||
Operating lease expense
|
$
|
16,480
|
|
Finance lease expense:
|
|
||
Amortization of assets
|
2,189
|
|
|
Interest on lease liabilities
|
224
|
|
|
Short-term lease expense
|
3,343
|
|
|
Variable lease expense
|
116
|
|
|
Total net lease expense*
|
$
|
22,352
|
|
|
Balance Sheet Location
|
|
November 30, 2019
|
||
|
|
|
(Dollars in thousands)
|
||
Operating leases
|
|
|
|
||
Assets
|
|
|
|
||
Operating lease right of use assets
|
Other assets
|
|
$
|
259,028
|
|
Liabilities
|
|
|
|
||
Current operating lease liabilities
|
Accrued expenses
|
|
53,868
|
|
|
Long-term operating lease liabilities
|
Other liabilities
|
|
204,305
|
|
|
Total operating lease liabilities
|
|
$
|
258,173
|
|
|
|
|
|
|
||
Finance leases
|
|
|
|
||
Assets
|
|
|
|
||
Finance lease assets
|
Property, plant and equipment
|
|
$
|
40,536
|
|
Liabilities
|
|
|
|
||
Current finance lease liabilities
|
Current portion of long-term debt
|
|
6,049
|
|
|
Long-term finance lease liabilities
|
Long-term debt
|
|
21,092
|
|
|
Total finance lease liabilities
|
|
$
|
27,141
|
|
|
|
|
|
|
||
Weighted average remaining lease term (in years)
|
|
|
|
||
Operating leases
|
|
8.4
|
|
||
Finance leases
|
|
6.3
|
|
||
|
|
|
|
||
Weighted average discount rate
|
|
|
|
||
Operating leases
|
|
3.13
|
%
|
||
Finance leases
|
|
3.34
|
%
|
|
Three Months Ended November 30, 2019
|
||
|
(Dollars in thousands)
|
||
Cash paid for amounts included in measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
15,722
|
|
Operating cash flows from finance leases
|
224
|
|
|
Financing cash flows from finance leases
|
1,673
|
|
|
|
|
||
Supplemental noncash information:
|
|
||
Right of use assets obtained in exchange for lease liabilities
|
4,724
|
|
|
November 30, 2019
|
||||||
|
Finance Leases
|
|
Operating Leases
|
||||
|
(Dollars in thousands)
|
||||||
Remainder of fiscal 2020
|
$
|
4,790
|
|
|
$
|
45,821
|
|
Fiscal 2021
|
6,190
|
|
|
53,054
|
|
||
Fiscal 2022
|
5,045
|
|
|
40,159
|
|
||
Fiscal 2023
|
4,452
|
|
|
31,851
|
|
||
Fiscal 2024
|
2,685
|
|
|
24,958
|
|
||
After fiscal 2024
|
7,228
|
|
|
105,730
|
|
||
Total maturities of lease liabilities
|
30,390
|
|
|
301,573
|
|
||
Less amounts representing interest
|
3,249
|
|
|
43,400
|
|
||
Present value of future minimum lease payments
|
27,141
|
|
|
258,173
|
|
||
Less current obligations
|
6,049
|
|
|
53,868
|
|
||
Long-term obligations
|
$
|
21,092
|
|
|
$
|
204,305
|
|
|
August 31, 2019
|
||||||
|
Capital Leases
|
|
Operating Leases
|
||||
|
(Dollars in thousands)
|
||||||
Fiscal 2020
|
$
|
6,761
|
|
|
$
|
87,168
|
|
Fiscal 2021
|
6,199
|
|
|
57,381
|
|
||
Fiscal 2022
|
5,021
|
|
|
43,665
|
|
||
Fiscal 2023
|
4,548
|
|
|
34,328
|
|
||
Fiscal 2024
|
2,638
|
|
|
26,793
|
|
||
Thereafter
|
6,517
|
|
|
92,653
|
|
||
Total minimum future lease payments
|
31,684
|
|
|
$
|
341,988
|
|
|
Less amount representing interest
|
3,445
|
|
|
|
|||
Present value of net minimum lease payments
|
$
|
28,239
|
|
|
|
•
|
Overview
|
•
|
Business Strategy
|
•
|
Fiscal 2020 First Quarter Highlights
|
•
|
Fiscal 2020 Trends Update
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Off-Balance Sheet Financing Arrangements
|
•
|
Contractual Obligations
|
•
|
Critical Accounting Policies
|
•
|
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.
|
•
|
Less advantageous market conditions in our refined fuels business resulted in a significant decrease in IBIT compared to the same period during the prior year, primarily driven by decreased Western Canadian Select ("WCS") crude oil differentials experienced on heavy Canadian crude oil, which is processed by our refineries.
|
•
|
Strong supply chain performance in our propane business was a significant positive contributor to our results. We were able to efficiently source propane for our customers during a period of significant propane demand for crop drying and home heating.
|
•
|
Poor weather conditions during fiscal 2019 continued to negatively impact our Ag segment's operations, including lower crop yields and poor grain quality following a late harvest, as well as lower crop nutrient sales that traditionally occur during the fall.
|
•
|
We continued to experience significant pressure on grain volumes and margins due to slow movement of grain, which was associated with uncertainty in the grain markets related to unresolved trade issues between the United States and its trading partners.
|
•
|
We continued to devote considerable resources toward implementation of our new enterprise resource planning ("ERP") software, which will provide an improved platform to execute upon our business strategies.
|
•
|
As more fully described in Item 4 of Part I of this Quarterly Report on Form 10-Q, we continued dedicating significant internal and external resources, as well as executive and board focus, to improving our control environment.
|
|
Three Months Ended November 30,
|
||||||||||||
|
2019
|
|
% of Revenues
|
|
2018
|
|
% of Revenues
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Revenues
|
$
|
7,621,485
|
|
|
100.0
|
%
|
|
$
|
8,484,289
|
|
|
100.0
|
%
|
Cost of goods sold
|
7,295,942
|
|
|
95.7
|
|
|
8,013,648
|
|
|
94.5
|
|
||
Gross profit
|
325,543
|
|
|
4.3
|
|
|
470,641
|
|
|
5.5
|
|
||
Marketing, general and administrative expenses
|
168,331
|
|
|
2.2
|
|
|
156,143
|
|
|
1.8
|
|
||
Operating earnings
|
157,212
|
|
|
2.1
|
|
|
314,498
|
|
|
3.7
|
|
||
Interest expense
|
34,971
|
|
|
0.5
|
|
|
38,908
|
|
|
0.5
|
|
||
Other income
|
(13,498
|
)
|
|
(0.2
|
)
|
|
(25,134
|
)
|
|
(0.3
|
)
|
||
Equity income from investments
|
(49,662
|
)
|
|
(0.7
|
)
|
|
(66,508
|
)
|
|
(0.8
|
)
|
||
Income before income taxes
|
185,401
|
|
|
2.4
|
|
|
367,232
|
|
|
4.3
|
|
||
Income tax expense
|
6,664
|
|
|
0.1
|
|
|
20,117
|
|
|
0.2
|
|
||
Net income
|
178,737
|
|
|
2.3
|
|
|
347,115
|
|
|
4.1
|
|
||
Net income (loss) attributable to noncontrolling interests
|
855
|
|
|
—
|
|
|
(389
|
)
|
|
—
|
|
||
Net income attributable to CHS Inc.
|
$
|
177,882
|
|
|
2.3
|
%
|
|
$
|
347,504
|
|
|
4.1
|
%
|
|
Three Months Ended
November 30, |
||||
|
2019
|
|
2018
|
||
Refinery throughput volumes
|
(Barrels per day)
|
||||
Heavy, high-sulfur crude oil
|
84,957
|
|
|
101,096
|
|
All other crude oil
|
78,819
|
|
|
62,881
|
|
Other feedstocks and blendstocks
|
17,285
|
|
|
17,919
|
|
Total refinery throughput volumes
|
181,061
|
|
|
181,896
|
|
Refined fuel yields
|
|
|
|
||
Gasolines
|
92,282
|
|
|
89,297
|
|
Distillates
|
72,929
|
|
|
72,450
|
|
|
Three Months Ended
November 30, |
||||||
|
2019
|
|
2018
|
||||
Market indicators
|
|
|
|
||||
WTI crude oil (dollars per barrel)
|
$
|
56.11
|
|
|
$
|
65.85
|
|
WTI - WCS crude oil differential (dollars per barrel)
|
$
|
12.98
|
|
|
$
|
34.97
|
|
Group 3 2:1:1 crack spread (dollars per barrel)*
|
$
|
18.47
|
|
|
$
|
20.10
|
|
Group 3 5:3:2 crack spread (dollars per barrel)*
|
$
|
17.43
|
|
|
$
|
18.57
|
|
D6 ethanol RIN (dollars per RIN)
|
$
|
0.1668
|
|
|
$
|
0.1292
|
|
D4 ethanol RIN (dollars per RIN)
|
$
|
0.5588
|
|
|
$
|
0.3708
|
|
|
|
|
Three Months Ended
November 30, |
||||
|
Market Source*
|
|
2019
|
|
2018
|
||
Commodity prices
|
|
|
|
|
|
||
Corn (dollars per bushel)
|
Chicago Board of Trade
|
|
$3.83
|
|
$3.62
|
||
Soybeans (dollars per bushel)
|
Chicago Board of Trade
|
|
$9.00
|
|
$8.60
|
||
Wheat (dollars per bushel)
|
Chicago Board of Trade
|
|
$5.17
|
|
$5.08
|
||
Urea (dollars per ton)
|
Green Markets NOLA
|
|
$225.00
|
|
$295.00
|
||
UAN (dollars per ton)
|
Green Markets NOLA
|
|
$151.00
|
|
$212.00
|
||
Ethanol (dollars per gallon)
|
Chicago Platts
|
|
$1.60
|
|
$1.24
|
||
|
|
|
|
|
|
||
Volumes
|
|
|
|
|
|
||
Grain and oilseed (thousands of bushels)
|
|
619,539
|
|
|
698,929
|
|
|
North American grain and oilseed port throughput (thousands of bushels)
|
|
136,856
|
|
|
287,173
|
|
|
Crop nutrients (thousands of tons)
|
|
1,851
|
|
|
1,661
|
|
|
Ethanol (thousands of gallons)
|
|
222,276
|
|
|
287,173
|
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Income before income taxes
|
$
|
162,153
|
|
|
$
|
232,461
|
|
|
$
|
(70,308
|
)
|
|
(30.2
|
)%
|
•
|
Significantly less advantageous market conditions in our refined fuels business compared to the same period of the prior year, primarily driven by decreased WCS crude oil differentials experienced on heavy Canadian crude oil, which is processed by our refineries and, to a lesser extent, decreased crack spreads.
|
•
|
The decreased IBIT resulting from less advantageous market conditions for refined fuels was partially offset by hedging gains recognized for refined fuels and propane during the first quarter of fiscal 2020, as well as improved propane margins due to significant propane demand for crop drying and home heating.
|
•
|
Poor weather conditions experienced during fiscal 2019 in the agricultural region of the United States and continuing global trade tensions between the United States and foreign trading partners continued to negatively impact volumes and margins within agricultural markets. In particular, decreased demand for feed and farm supplies and crop nutrient products during the late and smaller harvest in the fall of 2019 resulted in lower margins.
|
•
|
Lower margins in our processing and food ingredients business due to a combination of increased competition and lower crop yields, which made it more difficult to source soybeans for our processing facilities.
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Nitrogen Production IBIT*
|
$
|
16,450
|
|
|
$
|
23,679
|
|
|
$
|
(7,229
|
)
|
|
(30.5
|
)%
|
Corporate and Other IBIT
|
$
|
20,660
|
|
|
$
|
30,774
|
|
|
$
|
(10,114
|
)
|
|
(32.9
|
)%
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Revenues
|
$
|
1,895,423
|
|
|
$
|
2,161,288
|
|
|
$
|
(265,865
|
)
|
|
(12.3
|
)%
|
•
|
Decreased selling prices for refined fuels and propane were driven by global market conditions and product mix, and contributed to $207.5 million and $71.9 million decreases in revenues, respectively.
|
•
|
A 16% increase of propane volumes contributed to a $35.5 million increase of revenues, which was partially offset by a 1% decrease of refined fuels volumes that contributed to a $19.7 million decrease of revenues. Increased volumes of propane resulted from significant propane demand for crop drying and home heating; decreased volumes of refined fuels was attributable primarily to lower demand during the fall harvest as a result of poor weather conditions that prevented planting of crops during fiscal 2019 across much of the agricultural region of the United States in which we operate.
|
•
|
Grain and oilseed volumes and prices decreased by 10% and 3%, respectively, compared to the prior year. As the primary drivers of lower Ag segment revenues during the current fiscal year, lower grain and oilseed volumes and prices contributed to $473.6 million and $108.6 million decreases of revenues, respectively. Decreased volumes and prices resulted from a combination of product mix and challenges experienced in the agricultural commodity market, including poor weather conditions during fiscal 2019 in the agricultural region of the United States that contributed to lower crop yields and fewer acres planted/harvested, and continuing global trade tensions between the United States and foreign trading partners.
|
•
|
Our other Ag segment businesses generally experienced a decline in revenues due to similar volume and pricing decreases that resulted from continued challenges being experienced in the agricultural commodity market. These decreases were partially offset by increased volumes associated with certain agronomy products and processing and food ingredients, most of which was attributable to a $77.8 million increase of revenues that resulted from the March 1, 2019, acquisition of the remaining 75% ownership interest in West Central Distribution, LLC ("WCD") that we did not previously own, the results of which were not included in the comparable period of the prior year. The decrease was also partially offset by a 16% pricing increase for renewable fuels driven by global market conditions.
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Corporate and Other revenues*
|
$
|
14,207
|
|
|
$
|
17,604
|
|
|
$
|
(3,397
|
)
|
|
(19.3
|
)%
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Cost of goods sold
|
$
|
1,686,162
|
|
|
$
|
1,876,671
|
|
|
$
|
(190,509
|
)
|
|
(10.2
|
)%
|
•
|
Decreased pricing for propane and refined fuels were driven by global market conditions and product mix, and contributed to $106.1 million and $100.7 million decreases of COGS, respectively.
|
•
|
A 16% increase of propane volumes contributed to a $34.0 million increase of COGS, which was partially offset by a 1% decrease of refined fuels volumes that contributed to a $16.9 million decrease of COGS. Increased volumes of propane resulted from significant propane demand for crop drying and home heating, and decreased volumes of refined fuels was attributable primarily to lower demand during the fall harvest as a result of the poor weather conditions that prevented planting of crops during fiscal 2019 across the agricultural region of the United States in which we operate.
|
•
|
Grain and oilseed volumes and pricing decreased by 10% and 3%, respectively, compared to the prior year and were the primary drivers of lower COGS in our Ag segment. Lower volumes and pricing contributed to decreased COGS of $467.4 million and $119.1 million, respectively. Decreased volumes and pricing resulted from a combination of product mix and challenges experienced in the agricultural commodity market, including poor weather conditions experienced during fiscal 2019 in the agricultural regions of the United States that contributed to lower crop yields and fewer acres planted/harvested, and continuing global trade tensions between the United States and foreign trading partners.
|
•
|
Our other Ag segment businesses generally experienced a decline in COGS due to similar volume and pricing decreases as a result of continued challenges being experienced in the agricultural commodity market. These decreases were partially offset by increased volumes associated with certain agronomy products and processing and food ingredients, most of which was attributable to an increase of COGS 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 year. The decrease was also partially offset by a 14% pricing increase for renewable fuels inputs due to lower crop yields, which made it more difficult to source corn for our ethanol processing facilities.
|
|
Three Months Ended
November 30, |
|
Change
|
||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
||||||
|
(Dollars in thousands)
|
|
|
|
|
||||||||
Nitrogen Production COGS
|
$
|
538
|
|
|
$
|
(2,073
|
)
|
|
$
|
2,611
|
|
|
NM*
|
Corporate and Other COGS
|
$
|
(957
|
)
|
|
$
|
(535
|
)
|
|
$
|
(422
|
)
|
|
NM*
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Marketing, general and administrative expenses
|
$
|
168,331
|
|
|
$
|
156,143
|
|
|
$
|
12,188
|
|
|
7.8
|
%
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Interest expense
|
$
|
34,971
|
|
|
$
|
38,908
|
|
|
$
|
(3,937
|
)
|
|
(10.1
|
)%
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Other income
|
$
|
13,498
|
|
|
$
|
25,134
|
|
|
$
|
(11,636
|
)
|
|
(46.3
|
)%
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Equity income from investments*
|
$
|
49,662
|
|
|
$
|
66,508
|
|
|
$
|
(16,846
|
)
|
|
(25.3
|
)%
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Income tax expense
|
$
|
6,664
|
|
|
$
|
20,117
|
|
|
$
|
(13,453
|
)
|
|
(66.9
|
)%
|
|
Three Months Ended
November 30, |
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
Dollars
|
|
Percent
|
|||||||
|
(Dollars in thousands)
|
|
|
|
|
|||||||||
Net cash provided by (used in) operating activities
|
$
|
160,701
|
|
|
$
|
(94,798
|
)
|
|
$
|
255,499
|
|
|
269.5
|
%
|
Net cash provided by (used in) investing activities
|
(114,949
|
)
|
|
(154,776
|
)
|
|
39,827
|
|
|
25.7
|
%
|
|||
Net cash provided by (used in) financing activities
|
(71,882
|
)
|
|
49,061
|
|
|
(120,943
|
)
|
|
(246.5
|
)%
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(1,153
|
)
|
|
(1,535
|
)
|
|
382
|
|
|
24.9
|
%
|
|||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
$
|
(27,283
|
)
|
|
$
|
(202,048
|
)
|
|
$
|
174,765
|
|
|
86.5
|
%
|
•
|
Capital expenditures. We expect total capital expenditures for fiscal 2020 to be approximately $532.0 million, compared to capital expenditures of $443.2 million in fiscal 2019. During the three months ended November 30, 2019, we acquired property, plant and equipment of $131.8 million.
|
•
|
Debt and interest. We expect to repay approximately $39.2 million of long-term debt and finance 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 at November 30, 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 in the form of redemptions of qualified and nonqualified equity owned by individual producer members and association members.
|
Primary Revolving Credit Facilities
|
|
Maturities
|
|
Total Capacity
|
|
Borrowings Outstanding
|
|
Interest Rates
|
||||
|
|
Fiscal Year
|
|
(Dollars in thousands)
|
|
|||||||
Committed Five-Year Unsecured Facility
|
|
2024
|
|
$
|
2,750,000
|
|
|
$
|
245,000
|
|
|
LIBOR or Base Rate + 0.00% to 1.45%
|
Uncommitted Bilateral Facilities
|
|
2020
|
|
630,000
|
|
|
530,000
|
|
|
LIBOR or Base Rate + 0.00% to 1.05%
|
|
November 30,
2019 |
|
August 31,
2019 |
||||
|
(Dollars in thousands)
|
||||||
Private placement debt
|
$
|
1,356,886
|
|
|
$
|
1,379,840
|
|
Bank financing
|
366,000
|
|
|
366,000
|
|
||
Finance lease obligations
|
27,141
|
|
|
28,239
|
|
||
Other notes and contract payable
|
7,468
|
|
|
18,601
|
|
||
Deferred financing costs
|
(3,427
|
)
|
|
(3,569
|
)
|
||
|
$
|
1,754,068
|
|
|
$
|
1,789,111
|
|
|
|
Nasdaq Symbol
|
|
Issuance Date
|
|
Shares Outstanding
|
|
Redemption Value
|
|
Net Proceeds (a)
|
|
Dividend Rate
(b) (c)
|
|
Dividend Payment Frequency
|
|
Redeemable Beginning (d)
|
||||||
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
|
|
|
|
|
||||||||
8% Cumulative Redeemable
|
|
CHSCP
|
|
(e)
|
|
12,272,003
|
|
|
$
|
306.8
|
|
|
$
|
311.2
|
|
|
8.00
|
%
|
|
Quarterly
|
|
7/18/2023
|
Class B Cumulative Redeemable, Series 1
|
|
CHSCO
|
|
(f)
|
|
21,459,066
|
|
|
$
|
536.5
|
|
|
$
|
569.3
|
|
|
7.875
|
%
|
|
Quarterly
|
|
9/26/2023
|
Class B Reset Rate Cumulative Redeemable, Series 2
|
|
CHSCN
|
|
3/11/2014
|
|
16,800,000
|
|
|
$
|
420.0
|
|
|
$
|
406.2
|
|
|
7.10
|
%
|
|
Quarterly
|
|
3/31/2024
|
Class B Reset Rate Cumulative Redeemable, Series 3
|
|
CHSCM
|
|
9/15/2014
|
|
19,700,000
|
|
|
$
|
492.5
|
|
|
$
|
476.7
|
|
|
6.75
|
%
|
|
Quarterly
|
|
9/30/2024
|
Class B Cumulative Redeemable, Series 4
|
|
CHSCL
|
|
1/21/2015
|
|
20,700,000
|
|
|
$
|
517.5
|
|
|
$
|
501.0
|
|
|
7.50
|
%
|
|
Quarterly
|
|
1/21/2025
|
(a)
|
Includes patrons' equities redeemed with preferred stock.
|
(b)
|
Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2, accumulates dividends at a rate of 7.10% per year until March 31, 2024, and then at a rate equal to the three-month LIBOR plus 4.298%, not to exceed 8.00% per annum, subsequent to March 31, 2024.
|
(c)
|
Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3, accumulates dividends at a rate of 6.75% per year until September 30, 2024, and then at a rate equal to the three-month LIBOR plus 4.155%, not to exceed 8.00% per annum, subsequent to September 30, 2024.
|
(d)
|
Preferred stock is redeemable for cash at our option, in whole or in part, at a per share price equal to the per share liquidation preference of $25.00 per share, plus all dividends accumulated and unpaid on that share to and including the date of redemption, beginning on the dates set forth in this column.
|
(e)
|
The 8% Cumulative Redeemable Preferred Stock was issued at various times from 2003 through 2010.
|
(f)
|
Shares of Class B Cumulative Redeemable Preferred Stock, Series 1, were issued on September 26, 2013; August 25, 2014; March 31, 2016; and March 30, 2017.
|
•
|
Held bi-weekly steering committee meetings consisting of senior finance, legal, information technology ("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 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.
|
Exhibit
|
Description
|
Amendment No. 1 to Master Framework Agreement, dated as of September 4, 2018 (“Framework Agreement”), by and among MUFG Bank, Ltd. (f/k/a The Bank of Tokyo-Mitsubishi UFJ, Ltd.) and each other financial institution from time to time party thereto, as MFA Buyers, MUFG Bank, Ltd., as agent for the MFA Buyers, CHS Inc. and CHS Capital, LLC, as sellers, and CHS Inc., as agent for the sellers.
|
|
Amendment No. 2 to the Framework Agreement, dated as of September 4, 2018.
|
|
Amendment No. 3 to the CHS Inc. Deferred Compensation Plan (2015 Restatement).
|
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of the Interim Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of the Interim Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101
|
The following financial information from the CHS Inc. Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2019, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) the Notes to the Condensed Consolidated Financial Statements.
|
Date:
|
January 8, 2020
|
|
By:
|
|
/s/ Angela Olsonawski
|
|
|
|
|
|
Angela Olsonawski
|
|
|
|
|
|
Senior Vice President, Interim Chief Financial Officer and Corporate Treasurer
|
MUFG Bank, Ltd.
|
|
By:
|
/s/ Matt Stratton
|
Name:
|
Matt Stratton
|
Title:
|
Managing Director
|
By:
|
/s/ Angela Olsonawski
|
Name:
|
Angela Olsonawski
|
Title:
|
Senior Vice President, Corporate Treasurer
|
By:
|
/s/ Jedd Wennerberg
|
Name:
|
Jedd Wennerberg
|
Title:
|
President
|
CHS Inc.
|
|
By:
|
/s/ Angela Olsonawski
|
Name:
|
Angela Olsonawski
|
Title:
|
Senior Vice President, Corporate Treasurer
|
1.
|
Interpretation.
|
MUFG Bank, Ltd.
|
|
By:
|
/s/ Matt Stratton
|
Name:
|
Matt Stratton
|
Title:
|
Managing Director
|
By:
|
/s/ Angela Olsonawski
|
Name:
|
Angela Olsonawski
|
Title:
|
Senior Vice President, Corporate Treasurer
|
By:
|
/s/ Jedd Wennerberg
|
Name:
|
Jedd Wennerberg
|
Title:
|
President
|
CHS Inc.
|
|
By:
|
/s/ Angela Olsonawski
|
Name:
|
Angela Olsonawski
|
Title:
|
Senior Vice President, Corporate Treasurer
|
2.3
|
Director Retirement Plan. Notwithstanding the foregoing, each non‑employee Director of the Company shall, upon becoming a member of the Company’s Board, automatically become a Participant for purposes of the Director Retirement Plan component of this Plan. Each Director of the Company shall complete and return to the Committee a Beneficiary Designation Form, an Election Form with respect to the Measurement Funds available under Section 3.10 and an Election Form with respect the form of payment of Director Retirement Plan Accounts under Section 10.2.
|
10.2
|
Payment of Director Retirement Plan Benefit. Within thirty (30) days after a Director first becomes a Participant in the Plan, the Director shall complete and return to the Committee an Election form with respect to the form of payment of Director Retirement Plan Accounts. Directors may choose a lump sum or annual installment payments over two (2) to ten (10) years in accordance with the Annual Installment Method. In the absence of a timely submitted Election Form, a Director Retirement Plan Benefit shall be paid in annual installment payments over four (4) years, determined in accordance with the Annual Installment Method. Payment shall be made (or commence, in the case of installments) to the Director no later than sixty (60) days after the Participant’s Benefit Distribution Date. Remaining installments shall be paid no later than sixty (60) days after each anniversary of the Participant’s Benefit Distribution Date.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended November 30, 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;
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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(s) 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.
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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.
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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(s) 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 Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2019, of CHS Inc.;
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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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer(s) 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.
|
|
/s/ Angela Olsonawski
|
|
Angela Olsonawski
|
|
Senior Vice President, Interim Chief Financial Officer and Corporate Treasurer
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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.
|
|
/s/ Jay D. Debertin
|
|
Jay D. Debertin
|
|
President and Chief Executive Officer
|
|
January 8, 2020
|
(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/ Angela Olsonawski
|
|
Angela Olsonawski
|
|
Senior Vice President, Interim Chief Financial Officer and Corporate Treasurer
|
|
January 8, 2020
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