þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended August 31, 2007 | ||
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
|
41-0251095 | |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
|
5500 Cenex Drive
|
(651) 355-6000 | |
Inver Grove Heights, Minnesota 55077 | ||
(Address of principal executive office,
including zip code) |
(Registrants Telephone number,
including area code) |
|
8% Cumulative Redeemable Preferred Stock
|
The NASDAQ Global Select Market | |
(Title of Class)
|
(Name of Each Exchange on Which Registered) |
23
52
60
82
83
84
F-22
F-27
ITEM 1.
BUSINESS
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CHS
Income
Ownership%
Recognition
National Cooperative Refinery Association
74.5
%
Consolidated
Provista Renewable Fuels Marketing, LLC
50
%
Consolidated
Front Range Pipeline, LLC
100
%
Consolidated
Cenex Pipeline, LLC
100
%
Consolidated
Agriliance LLC
50
%
Equity Method
CHS do Brasil Ltda.
100
%
Consolidated
United Harvest, LLC
50
%
Equity Method
TEMCO, LLC
50
%
Equity Method
Multigrain S.A.
37.5
%
Equity Method
Horizon Milling, LLC
24
%
Equity Method
Horizon Milling General Partnership
24
%
Equity Method
Ventura Foods, LLC
50
%
Equity Method
US BioEnergy Corporation
20
%
Equity Method
Country Hedging, Inc.
100
%
Consolidated
Ag States Agency, LLC
100
%
Consolidated
Cofina Financial, LLC
49
%
Equity Method
2
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3
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4
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2007
2006
2005
(Dollars in thousands)
$
8,105,067
$
7,414,361
$
5,794,266
7,274,638
6,834,676
5,487,813
830,429
579,685
306,453
94,939
82,867
69,951
735,490
496,818
236,502
(862
)
(6,106
)
6,534
8,918
(4,468
)
(3,840
)
(3,478
)
143,230
86,483
46,741
$
602,834
$
407,641
$
185,183
$
(228,930
)
$
(242,430
)
$
(170,642
)
$
2,737,044
$
2,164,217
$
2,238,614
5
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6
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7
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8
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9
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2007
2006
2005
(Dollars in thousands)
$
8,575,389
$
6,575,165
$
5,670,644
8,388,476
6,401,527
5,541,282
186,913
173,638
129,362
97,299
99,777
83,600
89,614
73,861
45,762
(5,348
)
(11,358
)
28,550
23,559
20,535
(51,830
)
(40,902
)
(55,473
)
(16
)
(509
)
(41
)
$
118,258
$
91,713
$
92,099
$
(18,372
)
$
(8,779
)
$
(9,640
)
$
2,846,950
$
1,806,243
$
1,604,571
10
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11
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12
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2007
2006
2005
(Dollars in thousands)
$
754,743
$
614,471
$
613,766
726,510
588,732
604,198
28,233
25,739
9,568
23,545
21,645
20,750
4,688
4,094
(11,182
)
(15,268
)
(457
)
14,783
11,096
12,287
(48,446
)
(35,504
)
(36,202
)
$
53,619
$
28,502
$
13,190
$
(370
)
$
(368
)
$
(502
)
$
681,118
$
518,186
$
420,373
13
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14
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15
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16
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17
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ITEM 1A.
RISK
FACTORS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
levels of worldwide and domestic supplies;
capacities of domestic and foreign refineries;
the ability of the members of OPEC to agree to and maintain oil
price and production controls, and the price and level of
foreign imports;
disruption in supply;
18
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political instability or armed conflict in oil-producing regions;
the level of consumer demand;
the price and availability of alternative fuels;
the availability of pipeline capacity; and
domestic and foreign governmental regulations and taxes.
19
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our oil refineries and other facilities are potential targets
for terrorist attacks that could halt or discontinue production;
our inability to negotiate acceptable contracts with unionized
workers in our operations could result in strikes or work
stoppages;
the significant inventories that we carry or the facilities we
own could be damaged or destroyed by catastrophic events,
extreme weather conditions or contamination; and
an occurrence of a pandemic flu or other disease affecting a
substantial part of our workforce or our customers could cause
an interruption in our business operations, the affects of which
could be significant.
20
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ITEM 1B.
UNRESOLVED
STAFF COMMENTS
ITEM 2.
PROPERTIES
21
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Laurel, Montana
Glenwood, Minnesota
12 locations in Iowa, Kansas, Minnesota, Montana, North Dakota,
South Dakota, Texas, Washington and Wisconsin, 3 of which are
leased
9 locations in Montana, North Dakota and Wisconsin
11 locations in Montana and North Dakota
Laurel, Montana to Fargo, North Dakota
Canadian border to Laurel, Montana and on to Billings, Montana
42 locations in Iowa, Minnesota, Montana, North Dakota, South
Dakota and Wyoming, 13 of which are leased
3 locations in Minnesota, Ohio and Texas, 1 of which is leased
McPherson, Kansas
2 locations in Iowa and Kansas
McPherson, Kansas to Council Bluffs, Iowa
Throughout Kansas, with branches in Oklahoma, Texas and Nebraska
26 locations located in Kansas, Oklahoma and Nebraska
Oklahoma to Kansas
Throughout Kansas
Little Rock, Arkansas (river terminal, owned; land and building,
leased)
Post Falls, Idaho (terminal, owned)
Crescent City, Illinois (terminal, owned)
Briggs, Indiana (terminal, owned)
Hagerstown, Indiana (terminal, leased)
Indianapolis, Indiana (terminal, leased)
Muscatine, Iowa (river terminal, owned)
22
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Winona, Minnesota (river terminal, owned)
Grand Forks, North Dakota (terminal, owned)
Crestline, Ohio (terminal, owned)
Fostoria, Ohio (terminal, owned)
Watertown, South Dakota (terminal, owned)
Memphis, Tennessee (river terminal, owned)
Green Bay, Wisconsin (terminal, owned)
Davenport, Iowa (2 owned)
Friona, Texas (owned)
Kalama, Washington (leased)
Minneapolis, Minnesota (owned, idle)
Myrtle Grove, Louisiana (owned)
Savage, Minnesota (owned)
Spokane, Washington (owned)
Superior, Wisconsin (owned)
Winona, Minnesota (1 owned, 1 leased)
Kenosha, Wisconsin
Houston, Texas
Mount Pocono, Pennsylvania
Fairmount, North Dakota
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ITEM 3.
LEGAL
PROCEEDINGS
ITEM 4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
ITEM 6.
SELECTED
FINANCIAL DATA
24
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2007
2006
2005
2004
2003
(Dollars in thousands)
$
17,215,992
$
14,383,835
$
11,926,962
$
10,969,081
$
9,314,116
16,139,691
13,570,507
11,449,858
10,527,715
8,989,050
1,076,301
813,328
477,104
441,366
325,066
245,357
231,238
199,354
202,455
175,662
830,944
582,090
277,750
238,911
149,404
(20,616
)
(13,013
)
(14,666
)
(692
)
(10,867
)
31,098
41,305
41,509
42,758
40,516
(109,685
)
(84,188
)
(95,742
)
(79,022
)
(47,299
)
143,214
85,974
47,736
33,830
21,950
786,933
538,999
297,260
256,703
145,104
36,600
49,327
30,434
29,462
16,031
750,333
489,672
266,826
227,241
129,073
(625
)
16,810
5,909
5,232
$
750,333
$
490,297
$
250,016
$
221,332
$
123,841
$
815,634
$
828,954
$
758,703
$
493,440
$
458,738
1,728,171
1,476,239
1,359,535
1,249,655
1,122,982
6,693,586
4,942,583
4,726,937
4,031,292
3,807,968
688,321
744,745
773,074
683,818
663,173
2,432,990
2,017,391
1,757,897
1,628,086
1,481,711
25
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Energy
Ag Business
2007
2006
2005
2007
2006
2005
(Dollars in thousands)
$
8,105,067
$
7,414,361
$
5,794,266
$
8,575,389
$
6,575,165
$
5,670,644
7,274,638
6,834,676
5,487,813
8,388,476
6,401,527
5,541,282
830,429
579,685
306,453
186,913
173,638
129,362
94,939
82,867
69,951
97,299
99,777
83,600
735,490
496,818
236,502
89,614
73,861
45,762
(862
)
(5,348
)
(11,358
)
(6,106
)
6,534
8,918
28,550
23,559
20,535
(4,468
)
(3,840
)
(3,478
)
(51,830
)
(40,902
)
(55,473
)
143,230
86,483
46,741
(16
)
(509
)
(41
)
$
602,834
$
407,641
$
185,183
$
118,258
$
91,713
$
92,099
$
(228,930
)
$
(242,430
)
$
(170,642
)
$
(18,372
)
$
(8,779
)
$
(9,640
)
$
2,737,044
$
2,164,217
$
2,238,614
$
2,846,950
$
1,806,243
$
1,604,571
Processing
Corporate and Other
2007
2006
2005
2007
2006
2005
(Dollars in thousands)
$
754,743
$
614,471
$
613,766
$
28,465
$
31,415
$
29,070
726,510
588,732
604,198
(2,261
)
(2,851
)
(2,651
)
28,233
25,739
9,568
30,726
34,266
31,721
23,545
21,645
20,750
29,574
26,949
25,053
4,688
4,094
(11,182
)
1,152
7,317
6,668
(15,268
)
(457
)
(336
)
14,783
11,096
12,287
(6,129
)
116
(231
)
(48,446
)
(35,504
)
(36,202
)
(4,941
)
(3,942
)
(589
)
1,036
$
53,619
$
28,502
$
13,190
$
12,222
$
11,143
$
6,788
$
(370
)
$
(368
)
$
(502
)
$
681,118
$
518,186
$
420,373
$
428,474
$
453,937
$
463,379
26
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ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
27
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28
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29
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30
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31
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32
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33
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34
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35
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36
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37
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38
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39
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40
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41
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42
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$
98,977
117,910
82,634
111,665
94,517
182,618
$
688,321
43
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44
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Total
(Dollars in millions)
$
32.9
24.6
20.1
13.0
8.7
8.2
$
107.5
Payments Due by Period
Less than
1 - 3
3 - 5
More than
Total
1 Year
Years
Years
5 Years
(Dollars in thousands)
$
672,571
$
672,571
688,321
98,977
$
200,544
$
206,182
$
182,618
147,300
40,394
59,981
32,692
14,233
107,476
32,877
44,754
21,663
8,182
3,686,847
2,434,178
1,244,419
2,212
6,038
215,611
21,237
48,187
146,187
$
5,518,126
$
3,278,997
$
1,570,935
$
310,936
$
357,258
(1)
Included on our Consolidated Balance Sheet.
(2)
Based on interest rates and long-term debt balances as of
August 31, 2007.
(3)
Purchase obligations are legally binding and enforceable
agreements to purchase goods or services that specify all
significant terms, including fixed or minimum quantities; fixed,
minimum or variable price provisions; and time of the
transactions. Of our total purchase obligations,
$1,199.8 million is included in accounts payable and
accrued expenses on our Consolidated Balance Sheet.
(4)
Other liabilities includes the long-term portion of deferred
compensation, deferred income taxes, accrued turnaround and
contractual redemptions, and is included on our Consolidated
Balance Sheet. Of our total other liabilities on our
Consolidated Balance Sheet in the amount of $359.2 million,
the timing of the payments of $143.6 million of such
liabilities cannot be determined.
45
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46
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47
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ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
48
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49
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ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
November 30,
February 28,
May 31,
August 31,
2006
2007
2007
2007
(Unaudited)
(Dollars in thousands)
$
3,751,070
$
3,734,580
$
4,732,465
$
4,997,877
222,276
145,708
327,925
380,392
153,453
87,359
259,734
286,387
136,282
82,309
237,773
293,969
November 30,
February 28,
May 31,
August 31,
2005
2006
2006
2006
$
3,453,549
$
3,156,834
$
3,743,021
$
4,030,431
254,481
114,668
218,528
225,651
154,026
40,247
136,563
158,836
154,234
40,148
136,593
159,322
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS
AND PROCEDURES
50
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ITEM 9B.
OTHER
INFORMATION
ITEM 10.
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Director
Age
Region
Since
55
3
1995
Glenburn, ND
58740-9564
57
8
2006
Lexington, NE 68850
53
5
1994
Reedsburg, WI 53959
46
3
2001
Mandan, ND 58554
55
1
1990
Minneota, MN
56264-1880
52
3
2003
Barton, ND 58384
58
5
1999
Arkdale, WI 54613
61
1
1995
St. Hilaire, MN 56754 -9776
49
4
2006
Alexandria, SD 57311
59
6
1992
St. John, WA 99171
51
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Director
Age
Region
Since
57
4
2001
Houghton, SD 57449
59
1
2003
Waseca, MN 56093
53
2
1999
Geraldine, MT 59446
55
8
2006
Ford, KS 67842
42
7
2006
LeClaire, IA 52753
61
1
1993
Wells, MN 56097
45
1
1992
Browns Valley, MN 56219
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53
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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
the age of 68.
The individual must be a member of this cooperative or a member
of a Cooperative Association Member.
The individual must reside in the region from which he or she is
to be elected.
The individual must be an active farmer or rancher. Active
farmer or rancher means an individual whose primary
occupation is that of a farmer or rancher, excluding anyone who
is an employee of ours or of a Cooperative Association Member.
54
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Current Incumbent
Michael Toelle
Dennis Carlson
Randy Knecht
Robert Bass
Steve Riegel
59
President and Chief Executive Officer
47
Executive Vice President and Chief Operating Officer, Processing
59
Executive Vice President Corporate Administration
59
Executive Vice President Business Solutions
50
Executive Vice President and Chief Operating Officer, Ag Business
57
Executive Vice President and Chief Financial Officer
60
Executive Vice President and Chief Operating Officer, Energy
55
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56
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Attention: Dave Kastelic
5500 Cenex Drive
Inver Grove Heights, Minnesota 55077
(651) 355-6000
57
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ITEM 11.
EXECUTIVE
COMPENSATION
Maintaining a strong external market focus in order to attract
and retain top talent by:
Aligning pay structures and total direct compensation at the
market median through our benchmarking process
Obtaining applicable and available survey data of similar sized
companies
Maintaining reasonable internal pay equity among executives in
order to allow for broad based development opportunities in
support of our talent management objectives
Driving strong business performance through annual and long-term
incentive programs by:
Rewarding executives for company, business unit and individual
performance
Aligning executive rewards with competitive returns to our owner
members
Ensuring compensation components are mutually supportive and not
contradictory
Aligning annual and long-term results with performance goals
Ensuring compliance with federal and state regulations
58
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Competitive base level of compensation provided relative to
skills, experience, knowledge and contributions
These factors provide the fundamental element of compensation
based on competitive market practice and internal equity
considerations
59
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Broad based employee short term pay-at-risk incentive for
achieving predetermined annual financial and individual
performance objectives
Broad based employee short term pay-at-risk program for
achieving predetermined Return On Equity performance levels
Long-term pay-at-risk incentive for Senior Management to achieve
predetermined triennial Return On Equity performance goals
Retirement benefits under the qualified retirement benefits are
identical to the broad based retirement plans generally
available to all full-time employees
These benefits are a part of our broad-based employee total
rewards program
The supplemental plans include non-qualified retirement benefits
that restore qualified benefits contained in our broad based
plans for employees whose retirement benefits are limited by
salary caps under the Internal Revenue Code. In addition, the
plans allow participants to voluntarily defer receipt of a
portion of their income
These benefits are provided to attract and retain senior
managers with total rewards programs that are competitive with
comparable companies
Medical, dental, vision, life insurance and disability benefits
generally available to all full-time employees with supplemental
executive long-term disability
These benefits are a part of our broad-based employee total
rewards program
Additional benefits and perquisites provided to certain
officers, including our Named Executive Officers
These benefits are provided to remain competitive with
comparable companies, retain individuals who are critical to
CHS, facilitate the executives relationships with
customers and to support their roles in the community.
Table of Contents
CHS Company
Business Unit
Management Business
Percent of Target
Maximum
Target
Threshold
Below Threshold
12% Return on Equity
10% Return on Equity
7% Return on Equity
Threshold, Target and Maximum Return on Equity goals vary by
business unit
Individual performance goals
200%
100%
20%
0%
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$
1,775,700
$
690,060
$
775,740
$
745,780
$
574,000
Profit
Equates to Net
Sharing
Income for Fiscal 2007
Award
$260.2 Million
5
%
$240.2 Million
4
%
$200.2 Million
3
%
$180.2 Million
2
%
$140.2 Million
1
%
Profit Sharing Award
5
%
4
%
3
%
2
%
1
%
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$
1,766,666
$
672,326
$
755,814
$
736,074
$
552,160
CHS Inc. Pension Plan
CHS Inc. Savings Plan
CHS Inc. Supplemental Executive Retirement Plan, and
CHS Inc. Deferred Compensation Plan
63
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Pay Below Social Security
Pay Above Social Security
Taxable Wage Base
Taxable Wage Base
3
%
6
%
4
%
8
%
5
%
10
%
6
%
12
%
7
%
14
%
Minimum Pay Credit
Pay Below Social Security
Pay Above Social Security
Taxable Wage Base
Taxable Wage Base
4
%
8
%
5
%
10
%
6
%
12
%
Total Age and Service
Additional Credit of
1
%
2
%
3
%
4
%
5
%
64
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65
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66
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Change in Pension
Value and
Non-Qualified
Non-Equity
Deferred
Incentive Plan
Compensation
All Other
Year
Salary(5)
Compensation(1),(5)
Earnings(2)
Compensation(3),(4)
Total
2007
$
900,000
$
3,542,366
$
1,050,906
$
267,018
$
5,760,290
2007
492,900
1,362,386
208,021
112,868
2,176,175
2007
554,100
1,531,554
991,223
129,683
3,206,560
2007
532,700
1,481,854
193,536
143,447
2,351,537
2007
410,000
1,126,160
123,906
107,526
1,767,592
(1)
Amounts include CHS annual variable pay awards and long-term
incentive awards.
(2)
This column represents both changes in pension value and
above-market earnings on deferred compensation. Change in
pension value is the aggregate change in the actuarial present
value of the Named Executive Officers benefit under their
retirement program and non qualified earnings, if applicable.
Above-market earnings represent earnings exceeding 120% of the
Federal Reserve long-term rate as determined by the Internal
Revenue Service (IRS) on applicable funds. The following Named
Executive Officers had above market earnings: John D. Johnson-
$26,787; John Schmitz- $291; Leon E. Westbrock- $835; and Mark
Palmquist- $342.
(3)
Amounts include CHS paid executive LTD, travel accident
insurance, executive physical, CHS contributions to qualified
and non-qualified defined contribution plans, car allowance,
spousal travel, sporting tickets, club dues/memberships and
financial planning.
(4)
This column includes car allowance amounts as follows: John D.
Johnson- $25,800; and $15,120 each for John Schmitz, Leon E.
Westbrock, Mark Palmquist and Jay Debertin.
(5)
Amounts reflect the gross compensation and include any
applicable deferrals. Mr. Debertin deferred $206,043.
67
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Estimated Future Payouts Under Non-Equity Incentive Plan
Awards
Grant Date
Threshold
Target
Maximum
9-1-06
(1)
$
180,000
$
900,000
$
1,800,000
9-1-06
(2)
180,000
900,000
1,800,000
9-1-06
(1)
71,078
355,390
710,780
9-1-06
(2)
70,387
351,937
703,873
9-1-06
(1)
79,800
399,000
798,000
9-1-06
(2)
79,058
395,290
790,580
9-1-06
(1)
76,818
384,090
768,180
9-1-06
(2)
76,071
380,357
760,713
9-1-06
(1)
59,122
295,610
591,220
9-1-06
(2)
58,548
292,740
585,480
(1)
Represents range of possible awards under our Annual Variable
Pay Plan. The actual amount of the award earned for fiscal 2007
is presented in the Non-Equity Incentive Plan
Compensation column of our Summary Compensation Table. The
Annual Variable Pay Plan is described in the Compensation
Discussion and Analysis.
(2)
Represents range of possible awards under our Long-Term
Incentive Plan for the fiscal
2007-2009
performance period. Goals are based on achieving a three-year
ROE of 7%, 10% and 12%. Awards are earned over a three-year
period and vest over an additional twenty-six-month period.
68
Table of Contents
Number of
Present
Years of
Value of
Payments
Credited
Accumulated
During Last
Service
Benefits
Fiscal Year
CHS Inc. Pension Plan
30.6667
$
515,668
$
0
SERP
30.6667
3,439,646
0
Special SERP
30.6667
1,738,908
0
CHS Inc. Pension Plan
32.7500
462,851
0
SERP
32.7500
685,723
0
CHS Inc. Pension Plan
26.0000
617,971
0
SERP
26.0000
4,134,653
0
CHS Inc. Pension Plan
27.8333
365,258
0
SERP
27.8333
737,173
0
CHS Inc. Pension Plan
23.0833
243,489
0
SERP
23.0833
300,125
0
(1)
An executive is eligible for early retirement in both the CHS
Inc. Pension Plan and the Supplemental Executive Retirement Plan
Discount rate of 6.25%;
RP-2000 Combined Healthy Participant mortality table
(post-decrement only);
Each Named Executive Officer is assumed to retire at the
earliest retirement age at which unreduced benefits are
available (age 62 for Mr. Westbrock and age 65
for all others). The early retirement benefits under the CENEX
formula and the Farmers Union Central Exchange, Inc.
formula are both currently described under the Pension Benefits
Table. The early retirement benefit under the cash balance plan
formula is equal to the participants account balance.
Early retirement is not defined under the Special SERP; and
Payments under the cash balance formula of the Pension Plan
assume a lump sum payment and payments under the grandfather
formula of the Pension Plan assume a single-life annuity. SERP
benefits are payable as a lump sum.
69
Table of Contents
Amount
$
263,663
306,163
350,428
395,481
70
Table of Contents
Executive
Registrant
Aggregate
Aggregate Balance
Contributions in
Contributions in
Aggregate Earnings
Withdrawals/
at Last Fiscal Year
Last Fiscal Year(3)
Last Fiscal Year(1)
in Last Fiscal Year(4)
Distributions
End (1),(2)
$
0
$
2,277,224
$
938,066
$
0
$
15,743,925
0
732,393
79,441
125,301
1,612,537
0
818,268
273,968
1,170,155
4,287,239
0
804,130
97,953
0
1,991,163
206,043
518,939
420,642
0
4,405,762
(1)
Deferrals under the plan are made by the Named Executive
Officer. Amounts include Long Term Incentive Plan (LTIP),
retirement contributions on amounts exceeding IRS compensation
limits, Profit Sharing, 401k match, plus Mr. Johnsons
Special SERP.
(2)
Amounts vary in accordance with individual pension plan
provisions and voluntary employee deferrals and withdrawals.
These amounts include roll-overs, voluntary salary and voluntary
incentive plan contributions from predecessor plans with
predecessor employers that have increased in value over the
course of the executives career. Named Executive Officers
may defer up to 30% of their base salary and up to 100% of their
annual variable pay to the Deferred Compensation Plan. Earnings
on amounts deferred under the plan are determined based on the
investment election made by the Named Executive Officer from
five market based notional investments with a varying level of
risk selected by CHS, and a fixed rate based on
10-year
U.S.
Treasury Notes. Named Executive Officers may change their
investment election daily with a maximum of 12 changes per year.
Payments of amounts deferred are made in accordance with
elections by the Named Executive Officer and in accordance with
IRC §409(A). Payments under the plan may be made at a
specified date elected by the Named Executive Officer or
deferred until retirement, disability, or death. Payments would
be made in a lump sum. In the event of retirement, the Named
Executive Officer can elect to receive payments either in a lump
sum or annual installments up to 10 years.
(3)
Includes amounts deferred from salary and annual incentive pay
reflected in the Summary Compensation Table.
(4)
The amounts in this column include the change in value of the
balance, not including contributions made by the Named Executive
Officer.
71
Table of Contents
$
900,000
$
492,900
$
554,100
$
532,700
$
362,692
72
Table of Contents
Director
CHS
100
%
0
%
50
%
50
%
0
%
100
%
73
Table of Contents
Change in Pension Value
Fees Earned or
and Nonqualified Deferred
All Other
Paid in Cash(4)
Compensation Earnings(2)
Compensation(3)
Total
$
64,500
$
34,276
$
5,368
$
104,144
44,100
11,664
6,649
62,413
64,500
30,104
12,087
106,691
17,350
4,884
5,001
27,235
57,300
17,161
10,797
85,258
62,700
18,224
14,163
95,087
62,100
19,861
17,229
99,190
66,300
33,974
10,061
110,335
64,500
39,028
11,480
115,008
43,050
7,003
11,701
61,754
63,000
48,713
9,432
121,145
61,800
29,504
13,393
104,697
62,400
30,668
13,945
107,013
63,600
24,725
9,908
98,233
45,300
10,544
6,686
62,530
44,850
4,867
11,634
61,351
61,050
31,038
10,912
103,000
83,100
20,196
15,407
118,703
20,200
3,571
6,109
29,880
(1)
Change in board membership includes: Newly elected and departing
directors as of
12-1-06
new directors are Donald Anthony, David Kayser, Steve Riegel and
Daniel Schurr; and departing directors are David Bielenberg (not
re-elected), and Merlin VanWalleghen (retired)
(2)
This column represents both changes in pension value and
above-market earnings on deferred compensation. Change in
pension value is the aggregate change in the actuarial present
value of the directors benefit under their retirement
program, and nonqualified earnings, if applicable. The change in
pension value will vary by director based on several factors
including, age, service, pension benefit elected (lump sum or
annuity- see above), discount rate and mortality factor used to
calculate the benefit due.
Above-market earnings represent earnings exceeding 120% of the
Federal Reserve long-term rate as determined by the IRS on
applicable funds. The following directors had above market
earnings during the year: Robert Bass, $3; Michael Toelle, $5;
and Merlin Van Walleghen, $18.
(3)
All other compensation includes health and life insurance
premiums and spousal travel. These amounts vary primarily due to
the variations in life and health insurance premiums. Premium
variations are due to several factors including the
directors age, length of service and the number of
dependents covered by health care benefits.
-
Health care premiums paid for directors include: Bruce Anderson,
$4,556; Donald Anthony, $5,752; Robert Bass, $10,596; David
Bielenberg, $1,352; Dennis Carlson, $7,104; Curt Eischens,
$12,184; Steven Fritel, $12,668; Robert Grabarski, $8,520; Jerry
Hasnedl, $8,520; David Kayser, $9,952; James Kile, $8,520; Randy
Knecht, $9,196; Michael Mulcahey, $8,520; Richard Owen, $8,520;
Steve Riegel, $5,752; Daniel Schurr, $9,952; Duane Stenzel,
$8,520; Michael Toelle, $14,744; and Merlin Van Walleghen,
$2,768.
-
Life insurance premiums paid for directors include: Dave
Bielenberg, $3,000; Dennis Carlson, $1,500; Steven Fritel,
$2,931; Randy Knecht, $2,100; and Michael Mulcahey, $3,685.
74
Table of Contents
-
Spousal travel includes: Bruce Anderson, $735; Donald Anthony,
$839; Robert Bass, $1,414; David Bielenberg, $630; Dennis
Carlson, $2,116; Curt Eischens, $1,902; Robert Grabarski,
$1,464; Jerry Hasnedl, $2,883; David Kayser, $1,691; Randy
Knecht, $2,020; Michael Mulcahey, $1,663; Richard Owen, $1,818;
Steve Riegel, $876; Daniel Schurr, $1,624; Duane Stenzel,
$2,315; and Merlin Van Walleghen, $3,322.
(4)
Of this amount, the following directors defer the succeeding
amounts to the Defined Contribution Plan: Steven Fritel, $6,900;
Jerry Hasnedl,: $6,000; Michael Mulcahey, $6,000; Steve Riegel,
$6,195; Michael Toelle, $6,000; and Merlin Van Walleghen, $4,000.
(5)
Made a one-time irrevocable retirement election in 2005 to
receive a lump sum benefit under the directors retirement
plan. All other directors will receive a monthly annuity upon
retirement.
Donald Anthony
Steven Fritel
Randy Knecht
75
Table of Contents
ITEM 12.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Amount and
Nature of
Beneficial
Ownership
% of Class
Preferred Stock
Directors:
Michael Toelle
420 shares
(1)
*
Bruce Anderson
40 shares
*
Donald Anthony
0 shares
*
Robert Bass
120 shares
*
Dennis Carlson
710 shares
(1)
*
Curt Eischens
120 shares
*
Steve Fritel
880 shares
*
Robert Grabarski
6,580 shares
(1)
*
Jerry Hasnedl
200 shares
*
David Kayser
0 shares
*
James Kile
250 shares
(1)
*
Randy Knecht
438 shares
(1)
*
Michael Mulcahey
100 shares
*
Richard Owen
240 shares
*
Steve Riegel
0 shares
*
Daniel Schurr
0 shares
*
Duane Stenzel
600 shares
*
Named Executive Officers:
John D. Johnson
7,220 shares
(1)
*
Jay Debertin
1,200 shares
*
Patrick Kluempke
1,000 shares
*
Thomas D. Larson
400 shares
*
Mark Palmquist
400 shares
*
John Schmitz
1,400 shares
(1)
*
Leon E. Westbrock
3,000 shares
*
Directors and executive officers as a group
25,318 shares
*
(1)
Includes shares held by spouse, children and Individual
Retirement Accounts (IRA).
*
Less than 1%.
ITEM 13.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
76
Table of Contents
Product Sales
Patronage
and Purchases
Dividends
$
258,692
$
2,197
265,129
2,448
882,080
33,537
651,517
14,789
578,619
18,891
77
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ITEM 14.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
2007
2006
$
1,246,665
$
1,308,490
122,072
95,165
20,850
257,480
$
1,389,587
$
1,661,135
(1)
Includes fees for audit of annual financial statements and
reviews of the related quarterly financial statements, certain
statutory audits, work related to filings of registration
statements, and services for 404 readiness efforts.
(2)
Includes fees for employee benefit plan audits.
(3)
Includes fees related to tax compliance, tax advice and tax
planning.
78
Table of Contents
ITEM 15.
EXHIBITS AND
FINANCIAL STATEMENTS
Page No.
F-1
F-2
F-3
F-4
F-5
F-6
Balance at
Additions:
Additions:
Deductions:
Balance at
Beginning
Charged to Costs
Charged to
Write-offs, net
End
of Year
and Expenses
Other Accounts
of Recoveries
of Year
(Dollars in thousands)
$
53,898
$
12,358
$
(3,296
)
$
62,960
60,041
11,414
(17,557
)
53,898
55,809
12,962
(8,730
)
60,041
Balance at
Additions:
Additions:
Deductions:
Balance at
Beginning
Charged to Costs
Charged to
Expenditures
End
of Year
and Expenses
Other Accounts
for Maintenance
of Year
(Dollars in thousands)
$
19,390
$
35,412
$
(34,158
)
$
20,644
19,035
43,234
(42,879
)
19,390
12,949
21,558
(15,472
)
19,035
(1)
Accruals for planned major maintenance activities at our energy
refineries
79
Table of Contents
80
Table of Contents
3
.1
Articles of Incorporation of CHS Inc., as amended. (Incorporated
by reference to our
Form 10-Q
for the quarterly period ended November 30, 2006, filed on
January 11, 2007).
3
.2
Bylaws of CHS Inc. (Incorporated by reference to our
Form 10-Q
for the quarterly period ended November 30, 2005, filed on
January 11, 2006).
4
.1
Resolution Creating a Series of Preferred Equity to be
Designated 8% Cumulative Redeemable Preferred Stock.
(Incorporated by reference to Amendment No. 1 to our
Registration Statement on
Form S-2
(File
No. 333-101916),
dated January 13, 2003).
4
.2
Form of Certificate Representing 8% Cumulative Redeemable
Preferred Stock. (Incorporated by reference to Amendment
No. 2 to our Registration Statement on
Form S-2
(File
No. 333-101916),
dated January 23, 2003).
4
.3
Unanimous Written Consent Resolution of the Board of Directors
Amending the Amended and Restated Resolution Creating a Series
of Preferred Equity to be Designated 8% Cumulative Redeemable
Preferred Stock. (Incorporated by reference to Amendment
No. 2 to our Registration Statement on
Form S-2
(File
No. 333-101916),
dated January 23, 2003).
4
.4
Unanimous Written consent Resolution of the Board of Directors
Amending the Amended and Restated Resolution Creating a Series
of Preferred Equity to be Designated 8% Cumulative Redeemable
Preferred Stock to change the record date for dividends.
(Incorporated by reference to our
Form 10-Q
for the quarterly period ended May 31, 2003, filed
July 2, 2003).
10
.1
Lease between the Port of Kalama and North Pacific Grain
Growers, Inc., dated November 22, 1960. (Incorporated by
reference to our Registration Statement on
Form S-1
(File
No. 333-17865),
filed December 13, 1996).
10
.2
Limited Liability Company Agreement for the Wilsey-Holsum Foods,
LLC dated July 24, 1996. (Incorporated by reference to our
Registration Statement on
Form S-1
(File
No. 333-17865),
filed December 13, 1996).
10
.3
Long Term Supply Agreement between Wilsey-Holsum Foods, LLC and
Harvest States Cooperatives dated August 30, 1996.
(Incorporated by reference to our Registration Statement on
Form S-1/A
(File
No. 333-17865),
filed January 24, 1997).(*)
10
.4
TEMCO, LLC Limited Liability Company Agreement between Cargill,
Incorporated and Cenex Harvest States Cooperatives dated as of
August 26, 2002. (Incorporated by reference to our
Form 10-K
for the year ended August 31, 2002, filed November 25,
2002).
10
.5
Cenex Harvest States Cooperatives Supplemental Savings Plan.
(Incorporated by reference to our
Form 10-K
for the year ended August 31, 2000, filed November 22,
2000).
10
.5A
Amendment No. 3 to the CHS Inc. Supplemental Savings Plan.
(Incorporated by reference to our
Form 10-Q
for the quarterly period ended May 31, 2006, filed
July 12, 2006).
10
.6
Cenex Harvest States Cooperatives Supplemental Executive
Retirement Plan. (Incorporated by reference to our
Form 10-K
for the year ended August 31, 2000, filed November 22,
2000).
10
.6A
Amendment No. 4 to the CHS Inc. Supplemental Executive
Retirement Plan. (Incorporated by reference to our
Form 10-Q
for the quarterly period ended May 31, 2006, filed
July 12, 2006).
10
.7
Cenex Harvest States Cooperatives Senior Management Compensation
Plan. (Incorporated by reference to our
Form 10-K
for the year ended August 31, 2000, filed November 22,
2000)
10
.8
Cenex Harvest States Cooperatives Executive Long-Term Variable
Compensation Plan. (Incorporated by reference to our
Form 10-K
for the year ended August 31, 2000, filed November 22,
2000)
10
.9
Cenex Harvest States Cooperatives Share Option Plan.
(Incorporated by reference to our
Form 10-K
for the year ended August 31, 2004, filed November 18,
2004).
10
.9A
Amendment to Cenex Harvest States Share Option Plan, dated
June 28, 2001. (Incorporated by reference to our
Registration Statement on
Form S-2
(File
No. 333-65364),
filed July 18, 2001).
10
.9B
Amendment No. 2 to Cenex Harvest States Share Option Plan,
dated May 2, 2001. (Incorporated by reference to our
Form 10-K
for the year ended August 31, 2004, filed November 18,
2004).
10
.9C
Amendment No. 3 to Cenex Harvest States Share Option Plan,
dated June 4, 2002. (Incorporated by reference to our
Form 10-K
for the year ended August 31, 2004, filed November 18,
2004).
10
.9D
Amendment No. 4 to Cenex Harvest States Share Option Plan,
dated April 6, 2004. (Incorporated by reference to our
Form 10-K
for the year ended August 31, 2004, filed November 18,
2004).
10
.10
CHS Inc. Share Option Plan Option Agreement. (Incorporated by
reference to our
Form 10-K
for the year ended August 31, 2004, filed November 18,
2004).
81
Table of Contents
10
.11
CHS Inc. Share Option Plan Trust Agreement. (Incorporated
by reference to our
Form 10-K
for the year ended August 31, 2004, filed November 18,
2004).
10
.11A
Amendment No. 1 to the Trust Agreement. (Incorporated
by reference to our
Form 10-K
for the year ended August 31, 2004, filed November 18,
2004).
10
.12
$225,000,000 Note Agreement (Private Placement Agreement) dated
as of June 19, 1998 among Cenex Harvest States Cooperatives
and each of the Purchasers of the Notes. (Incorporated by
Reference to our
Form 10-Q
Transition Report for the period June 1, 1998 to
August 31, 1998, filed October 14, 1998).
10
.12A
First Amendment to Note Agreement ($225,000,000 Private
Placement), effective September 10, 2003, among CHS Inc.
and each of the Purchasers of the notes. (Incorporated by
reference to our
Form 10-K
for the year ended August 31, 2003, filed November 21,
2003).
10
.13
2006 Amended and Restated Credit Agreement (Revolving Loan) by
and between CHS Inc. and the Syndication Parties dated as of
May 18, 2006. (Incorporated by reference to our
Form 10-Q
for the quarterly period ended May 31, 2006, filed
July 12, 2006).
10
.13A
First Amendment to 2006 Amended and Restated Credit Agreement by
and among CHS Inc., CoBank, ACB and the Syndication Parties,
dated May 8, 2007 (Incorporated by reference to our Current
Report on
Form 8-K
filed May 11, 2007).
10
.14
$200 Million Term Loan Credit Agreement dated as of June 1,
1998 among Cenex Harvest States Cooperatives, CoBank, ACB, and
St. Paul Bank for Cooperatives, including Exhibit 2.4 (form
of $200 Million Promissory Note). (Incorporated by Reference to
our
Form 10-Q
Transition Report for the period June 1, 1998 to
August 31, 1998, filed October 14, 1998).
10
.14A
First Amendment to Credit Agreement (Term Loan), effective as of
May 31, 1999 among Cenex Harvest States Cooperatives,
CoBank, ACB, and St. Paul Bank for Cooperatives. (Incorporated
by reference to our
Form 10-Q
for the quarterly period ended May 31, 1999, filed
July 13, 1999).
10
.14B
Second Amendment to Credit Agreement (Term Loan) dated
May 23, 2000 by and among Cenex Harvest States
Cooperatives, CoBank, ACB, St. Paul Bank for Cooperatives and
the Syndication Parties. (Incorporated by reference to our
Form 10-Q
for the quarterly period ended May 31, 2000, filed
July 10, 2000).
10
.14C
Third Amendment to Credit Agreement (Term Loan) dated
May 23, 2001 among Cenex Harvest States Cooperatives,
CoBank, ACB, and the Syndication Parties. (Incorporated by
reference to our
Form 10-Q
for the quarterly period ended May 31, 2001, filed
July 3, 2001).
10
.14D
Fourth Amendment to Credit Agreement (Term Loan) dated
May 22, 2002 among Cenex Harvest States Cooperatives,
CoBank, ACB and the Syndication Parties. (Incorporated by
reference to our
Form 10-Q
for the quarterly period ended May 31, 2002, filed
July 3, 2002).
10
.14E
Fifth Amendment to Credit Agreement (Term Loan) dated
May 21, 2003 by and among Cenex Harvest States
Cooperatives, CoBank, ACB and the Syndication Parties.
(Incorporated by reference to our
Form 10-K
for the year ended August 31, 2004, filed November 18,
2004).
10
.14F
Sixth Amendment to Credit Agreement (Term Loan) dated as of
May 20, 2004 by and among CHS Inc., CoBank, ACB, and the
Syndication Parties. (Incorporated by reference to our
Form 10-Q
for the quarterly period ended May 31, 2004, filed
July 12, 2004).
10
.14G
Seventh Amendment to Credit Agreement (Term Loan) dated as of
May 19, 2005 by and among CHS Inc., CoBank, ACB, and the
Syndication Parties. (Incorporated by reference to our
form 10-K
for the year ended August 31, 2005, filed on
November 18, 2005)
10
.14H
Eighth Amendment to Credit Agreement (Term Loan) dated as of
November 18, 2005 by and among CHS Inc., CoBank, ACB, and
the Syndication Parties. (Incorporated by reference to our
form 10-K
for the year ended August 31, 2005, filed on
November 18, 2005).
10
.14I
Ninth Amendment to Credit Agreement (Term Loan) dated as of
May 18, 2006 by and among CHS Inc., CoBank, ACB and the
Syndication Parties. (Incorporated by reference to our
Form 10-Q
for the quarterly period ended May 31, 2006).
10
.14J
Tenth Amendment to Credit Agreement (Term Loan) dated as of
May 8, 2007 by and among CHS Inc. and CoBank, ACB
(Incorporated by reference to our Current Report on
Form 8-K
filed May 11, 2007).
10
.15
Limited Liability Agreement of United Harvest, LLC dated
November 9, 1998 between United Grain Corporation and Cenex
Harvest States Cooperatives. (Incorporated by reference to our
Form 10-Q
for the quarterly period ended November 30, 1998, filed
January 13, 1999).
Table of Contents
10
.16
Joint Venture Agreement for Agriliance LLC, dated as of
January 1, 2000 among Farmland Industries, Inc., Cenex
Harvest States Cooperatives, United Country Brands, LLC and Land
O Lakes, Inc. (Incorporated by reference to our
Form 10-Q
for the quarterly period ended February 29, 2000, filed
April 11, 2000).
10
.17
Employment Agreement dated November 6, 2003 by and between
John D. Johnson and CHS Inc. (Incorporated by reference to our
Form 10-K
for the year ended August 31, 2003, filed November 21,
2003).
10
.17A
Amended and Restated Employment Agreement between John D.
Johnson and CHS Inc., effective as of August 1, 2007
(Incorporated by reference to our Current Report on
Form 8-K
filed August 10, 2007).
10
.18
CHS Inc. Special Supplemental Executive Retirement Plan.
(Incorporated by reference to our
Form 10-K
for the year ended August 31, 2003, filed November 21,
2003).
10
.19
Note purchase and Private Shelf Agreement dated as of
January 10, 2001 between Cenex Harvest States Cooperatives
and The Prudential Insurance Company of America. (Incorporated
by reference to our
Form 10-Q
for the quarterly period ended February 28, 2001, filed
April 10, 2001).
10
.19A
Amendment No. 1 to Note Purchase and Private Shelf
Agreement, dated as of March 2, 2001. (Incorporated by
reference to our
Form 10-Q
for the quarterly period ended February 28, 2001, filed
April 10, 2001)
10
.20
Note Purchase Agreement and Series D & E Senior
Notes dated October 18, 2002. (Incorporated by reference to
our
Form 10-K
for the year ended August 31, 2002, filed November 25,
2002).
10
.21
2003 Amended and Restated Credit Agreement ($15 million,
2 Year Facility) dated December 16, 2003 between
CoBank, ACB, U.S. AgBank, FCB and the National Cooperative
Refinery Association, Inc. (Incorporated by reference to our
Form 10-Q
for the quarterly period ended February 29, 2004, filed
April 7, 2004).
10
.21A
First Amendment to the 2003 Amended and Restated Credit
Agreement between the National Cooperative Refinery Association
and the Syndication Parties. (Incorporated by reference to our
Current Report on
Form 8-K
filed December 20, 2005).
10
.21B
Third Amendment to 2003 Amended and Restated Credit Agreement
between National Cooperative Refinery Association and the
Syndication Parties (Incorporated by reference to our Current
Report on
Form 8-K
filed December 18, 2006)
10
.22
Note Purchase and Private Shelf Agreement between CHS Inc. and
Prudential Capital Group dated as of April 13, 2004.
(Incorporated by reference to our
Form 10-Q
for the quarterly period ended May 31, 2004, filed
July 12, 2004).
10
.22A
Amendment No. 1 to Note Purchase and Private Shelf
Agreement dated April 9, 2007, among CHS Inc., Prudential
Investment Management, Inc. and the Prudential Affiliate parties
(Incorporated by reference to our
Form 10-Q
for the quarterly period ended February 28, 2007 filed
April 9, 2007).
10
.23
Note Purchase Agreement for Series H Senior Notes dated
September 21, 2004. (Incorporated by reference to our
Current Report on
Form 8-K
filed September 22, 2004).
10
.24
Deferred Compensation Plan. (Incorporated by reference to our
Registration Statement on
Form S-8
(File
No. 333-121161),
filed December 10, 2004).
10
.24A
First Amendment to CHS Inc. Deferred Compensation Plan.
(Incorporated by reference to our Registration Statement on
Form S-8
(File
No. 333-129464),
filed November 4, 2005).
10
.24B
Second Amendment to the CHS Inc. Deferred Compensation Plan.
(Incorporated by reference to our
Form 10-Q
for the quarterly period ended May 31, 2006, filed
July 12, 2006).
10
.25
New Plan Participants 2005 Plan Agreement and Election Form for
the CHS Inc. Deferred Compensation Plan. (Incorporated by
reference to our Registration Statement on
Form S-8
(File
No. 333-121161),
filed December 10, 2004).
10
.26
Beneficiary Designation Form for the CHS Inc. Deferred
Compensation Plan. (Incorporated by reference to our
Registration Statement on
Form S-8
(File
No. 333-121161),
filed December 10, 2004).
10
.27
Share Option Plan Participants 2005 Plan Agreement and Election
Form. (Incorporated by reference to our Registration Statement
on
Form S-8
(File
No. 333-129464),
filed November 4, 2005).
Table of Contents
10
.28
Amended and Restated Loan and Security Agreement dated
August 31, 2006, by and between Provista Renewable Fuels
Marketing, LLC and LaSalle Bank National Association
(Incorporated by reference to our
Form 10-K
for the year ended August 31, 2006, filed November 22,
2006).
10
.28A
First Amendment to Amended and Restated Loan and Security
Agreement by and among Provista Renewable Fuels Marketing, LLC
and LaSalle Bank National Association dated January 30,
2007 (Incorporated by reference to our Current Report on
Form 8-K
filed January 31, 2007).
10
.28B
Second Amendment to Amended and Restated Loan and Security
Agreement by and among Provista Renewable Fuels Marketing, LLC
and LaSalle Bank National Association dated November 2,
2007 (Incorporated by reference to our Current Report on
Form 8-K
filed November 6, 2007).
10
.29
City of McPherson, Kansas Taxable Industrial Revenue Bond
Series 2006 registered to National Cooperative Refinery
Association in the amount of $325 million (Incorporated by
reference to our Current Report on
Form 8-K
filed December 18, 2006).
10
.30
Bond Purchase Agreement between National Cooperative Refinery
Association, as purchaser, and City of McPherson, Kansas, as
issuer, dated as of December 18, 2006 (Incorporated by
reference to our Current Report on
Form 8-K
filed December 18, 2006).
10
.31
Trust Indenture between City of McPherson, Kansas, as
issuer, and Security Bank of Kansas City, Kansas City, Kansas,
as trustee, dated as of December 18, 2006 (Incorporated by
reference to our Current Report on
Form 8-K
filed December 18, 2006).
10
.32
Lease agreement between City of McPherson, Kansas, as issuer,
and National Cooperative Refinery Association, as tenant, dated
as of December 18, 2006 (Incorporated by reference to our
Current Report on
Form 8-K
filed December 18, 2006).
10
.33
Commercial Paper Placement Agreement by and between CHS Inc. and
Marshall & Ilsley Bank dated October 30, 2006
(Incorporated by reference to our
Form 10-Q
for the quarterly period ended November 30, 2006, filed
January 11, 2007).
10
.34
Commercial Paper Dealer Agreement by and between CHS Inc. and
SunTrust Capital Markets, Inc. dated October 6, 2006
(Incorporated by reference to our
Form 10-Q
for the quarterly period ended November 30, 2006, filed
January 11, 2007).
10
.35
Note Purchase Agreement and Series I Senior Notes dated as
of October 4, 2007 (Incorporated by reference to our
Current Report on
Form 8-K
filed October 4, 2007).
10
.36
Agreement Regarding Distribution of Assets, by and among CHS
Inc., United Country Brands, LLC, Land OLakes, Inc. and
Winfield Solutions, LLC, made as of September 4, 2007. (**)
21
.1
Subsidiaries of the Registrant. (**)
23
.1
Consent of Independent Registered Public Accounting Firm. (**)
24
.1
Power of Attorney. (**)
31
.1
Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. (**)
31
.2
Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. (**)
32
.1
Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. (**)
32
.2
Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. (**)
(*)
Pursuant to Rule 406 of the Securities Act of 1933, as
amended, confidential portions of Exhibit 10.3 have been
deleted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.
(**)
Filed herewith.
Table of Contents
By:
85
Table of Contents
Director
Director
Director
Director
Director
Director
Director
Director
Director
*By
Attorney-in-fact
86
Table of Contents
F-1
Table of Contents
F-2
Table of Contents
For the Years Ended August 31
2007
2006
2005
(Dollars in thousands)
$
17,215,992
$
14,383,835
$
11,926,962
16,139,691
13,570,507
11,449,858
1,076,301
813,328
477,104
245,357
231,238
199,354
830,944
582,090
277,750
(20,616
)
(13,013
)
31,098
41,305
41,509
(109,685
)
(84,188
)
(95,742
)
143,214
85,974
47,736
786,933
538,999
297,260
36,600
49,327
30,434
750,333
489,672
266,826
(625
)
16,810
$
750,333
$
490,297
$
250,016
$
550,000
$
374,000
$
203,000
200,333
116,297
47,016
$
750,333
$
490,297
$
250,016
F-3
Table of Contents
For the Years Ended August 31, 2007, 2006 and 2005
Accumulated
Capital
Nonpatronage
Unallocated
Other
Allocated
Equity
Equity
Preferred
Patronage
Capital
Comprehensive
Capital
Total
Certificates
Certificates
Stock
Refunds
Reserve
Income (Loss)
Reserve
Equities
(Dollars in thousands)
$
1,114,641
$
27,586
$
106,692
$
116,790
$
261,462
$
(7,135
)
$
8,050
$
1,628,086
32,100
50,060
1,409
83,569
119,736
(166,850
)
(4,464
)
(51,578
)
(23,625
)
(48
)
(23,673
)
(19,996
)
19,996
(87
)
(87
)
1,375
1,375
(9,178
)
(9,178
)
(666
)
(71
)
404
(333
)
203,000
47,016
250,016
12,106
12,106
262,122
(69,856
)
(60,900
)
(1,650
)
(132,406
)
1,153,709
27,467
126,688
142,100
294,912
4,971
8,050
1,757,897
69,856
60,900
1,650
132,406
145,333
(203,000
)
(4,850
)
(62,517
)
(55,836
)
(97
)
(55,933
)
(23,824
)
23,824
(88
)
(88
)
11,064
11,064
(10,816
)
(10,816
)
(3,300
)
(197
)
221
(3,276
)
374,000
116,297
490,297
8,131
8,131
498,428
(116,919
)
(130,900
)
(1,955
)
(249,774
)
1,180,083
27,173
150,512
243,100
395,371
13,102
8,050
2,017,391
116,919
130,900
1,955
249,774
246,802
(374,000
)
(5,860
)
(133,058
)
(70,402
)
(382
)
(70,784
)
(35,899
)
35,899
(145
)
(145
)
10,132
10,132
(13,104
)
(13,104
)
(3,203
)
(145
)
168
(9
)
(3,189
)
550,000
200,333
750,333
62,353
62,353
812,686
(62,419
)
(62,419
)
(179,381
)
(192,500
)
(2,413
)
(374,294
)
$
1,265,051
$
26,646
$
186,411
$
357,500
$
576,305
$
13,036
$
8,041
$
2,432,990
F-4
Table of Contents
For the Years Ended August 31
2007
2006
2005
(Dollars in thousands)
$
750,333
$
490,297
$
250,016
140,596
126,777
110,332
(109,685
)
(84,188
)
(95,742
)
66,693
58,240
64,869
143,214
85,974
47,736
(3,302
)
(4,969
)
(3,060
)
(6,916
)
(5,232
)
(7,370
)
6,163
(20,616
)
(13,013
)
46,800
78,300
26,400
4,261
460
1,027
(278,179
)
44,650
(250,202
)
(528,288
)
(198,501
)
(190,081
)
(256,925
)
64,677
(74,911
)
44,030
(25,915
)
3,216
79,138
(48,062
)
62,773
277,722
(142,934
)
328,961
23,746
15,368
9,417
372,622
454,942
276,531
(373,300
)
(234,992
)
(257,470
)
13,548
13,911
21,109
38,286
(95,834
)
(72,989
)
(25,938
)
4,935
7,283
13,514
10,918
147,801
(29,320
)
20,955
(23,770
)
(15,583
)
(2,867
)
(372
)
(8,604
)
(2,051
)
3,351
(5,062
)
(495,291
)
(265,348
)
(91,902
)
633,203
(59,025
)
(54,968
)
4,050
125,000
(60,851
)
(36,669
)
(36,033
)
(104
)
(1,997
)
(2,474
)
85,412
(10,513
)
2,814
(76,763
)
(80,529
)
(29,925
)
(145
)
(88
)
(87
)
(13,104
)
(10,816
)
(9,178
)
(70,784
)
(55,933
)
(23,673
)
(133,058
)
(62,517
)
(51,578
)
367,856
(318,087
)
(80,102
)
245,187
(128,493
)
104,527
112,525
241,018
136,491
$
357,712
$
112,525
$
241,018
F-5
Table of Contents
F-6
Table of Contents
F-7
Table of Contents
F-8
Table of Contents
F-9
Table of Contents
F-10
Table of Contents
2007
2006
(Dollars in thousands)
$
1,366,428
$
1,056,514
97,783
73,986
1,464,211
1,130,500
62,960
53,898
$
1,401,251
$
1,076,602
2007
2006
2005
(Dollars in millions)
$
229
$
119
$
83
1,130
904
880
178
183
129
900
717
605
608
156
271
$
3,045
$
2,079
$
1,968
2007
2006
(Dollars in thousands)
$
928,567
$
511,413
490,675
447,664
178,167
137,978
66,407
32,198
2,816
1,571
$
1,666,632
$
1,130,824
F-11
Table of Contents
2007
2006
(Dollars in thousands)
$
101,986
$
34,105
41,061
38,929
20,416
21,297
12,659
11,956
182,834
175,306
138,474
69,264
134,079
132,222
39,805
38,752
36,092
30,753
15,500
23,082
11,957
3,486
122,647
68,183
$
880,592
$
624,253
F-12
Table of Contents
2007
2006
(Dollars in thousands)
$
269,156
$
237,117
470,359
441,435
195,376
141,080
309,221
308,377
2007
2006
2005
(Dollars in thousands)
$
1,637,998
$
1,483,583
$
1,413,426
207,148
196,847
184,466
62,366
57,756
61,779
F-13
Table of Contents
2007
2006
(Dollars in thousands)
$
1,534,432
$
1,261,874
130,347
166,365
1,214,019
999,038
138,173
132,071
2007
2006
2005
(Dollars in thousands)
$
4,049,088
$
3,739,632
$
3,735,125
116,584
76,052
90,812
58,701
52,268
77,113
2007
2006
(Dollars in thousands)
$
90,263
$
84,347
410,556
395,833
2,258,108
2,112,629
81,091
75,836
320,101
121,379
3,160,119
2,790,024
1,431,948
1,313,785
$
1,728,171
$
1,476,239
F-14
Table of Contents
2006
2005
(Dollars in thousands)
$
43,556
49,919
$
(1,168
)
18,246
145
2,903
398
(10,702
)
$
625
$
(16,810
)
*
2006 and 2005 include a $1.6 million gain and a
$6.2 million loss on disposition, respectively.
2007
2006
(Dollars in thousands)
$
3,804
$
3,904
13,894
3,381
3,201
1,531
15,823
12,838
101,073
192,180
5,874
3,859
4,296
5,781
$
147,965
$
223,474
F-15
Table of Contents
Interest Rates at
August 31, 2007
2007
2006
(Dollars in thousands)
1.00% to 8.25%
$
672,571
$
22,007
6.17% to 13.00%
$
80,594
$
110,477
6.81%
225,000
225,000
4.96% to 5.60%
157,308
175,000
5.25%
125,000
125,000
7.43% to 7.90%
45,714
57,143
4.08%
15,000
15,000
4.39%
15,000
15,000
5.23%
3,925
3,925
1.89% to 12.17%
20,780
18,200
688,321
744,745
98,977
60,748
$
589,344
$
683,997
2007
2006
6.50%
7.58%
6.03%
6.09%
(a)
The Company finances its working capital needs through a
short-term line of credit with a syndication of domestic and
international banks. This revolving line of credit was a
five-year $1.1 billion committed facility on
August 31, 2007, with $600.0 million outstanding on
that date. On October 1, 2007, the Company exercised the
accordion feature of the agreement and obtained additional
commitments in the amount of $200.0 million from certain
lenders under the agreement. The additional commitments
increased the total to $1.3 billion on the facility. In
addition to this short-term line of credit, the Company has a
one-year committed credit facility dedicated to NCRA, with a
syndication of banks in the amount of $15.0 million, with
no amount outstanding on August 31, 2007. The Company also
has a committed revolving line of credit dedicated to Provista
in the amount of $25.0 million, with $2.0 million
outstanding on August 31, 2007. In addition, the Company
has two commercial paper programs totaling up to
$125.0 million with two banks participating in the
five-year revolving credit facility. The commercial paper
programs do not increase the committed borrowing capacity in
that the Company is required to have at least an equal amount of
undrawn capacity
F-16
Table of Contents
available on the five-year revolving facility as to the amount
of commercial paper issued. On August 31, 2007,
$51.9 million of commercial paper was outstanding. Other
miscellaneous notes payable totaled $18.7 million on
August 31, 2007.
(b)
The Company established a long-term credit agreement, which
committed $200.0 million of long-term borrowing capacity to
the Company through May 31, 1999, of which
$164.0 million was drawn before the expiration date of that
commitment. On August 31, 2007, $75.4 million was
outstanding. NCRA term loans of $3.0 million are
collateralized by NCRAs investment in CoBank.
(c)
In June 1998, the Company entered into a private placement with
several insurance companies for long-term debt in the amount of
$225.0 million.
(d)
In October 2002, the Company entered into a private placement
with several insurance companies for long-term debt in the
amount of $175.0 million.
(e)
In September 2004, the Company entered into a private placement
with several insurance companies for long-term debt in the
amount of $125.0 million.
(f)
In January 2001, the Company entered into a note purchase and
private shelf agreement with Prudential Insurance Company. A
long-term note was issued for $25.0 million and a
subsequent note for $55.0 million was issued in March 2001.
(g)
In March 2004, the Company entered into a note purchase and
private shelf agreement with Prudential Capital Group. In April
2004, two long-term notes were issued for $15.0 million
each. In April 2007, the agreement was amended with Prudential
Investment Management, Inc. and several other participating
insurance companies to expand the uncommitted facility from
$70.0 million to $150.0 million.
(h)
Other notes and contracts payable of $8.3 million are
collateralized by property, plant and equipment, with a cost of
$16.9 million, less accumulated depreciation of
$5.0 million on August 31, 2007.
(i)
The debt is unsecured; however restrictive covenants under
various agreements have requirements for maintenance of minimum
working capital levels and other financial ratios.
F-17
Table of Contents
(Dollars in thousands)
$
98,977
117,910
82,634
111,665
94,517
182,618
$
688,321
2007
2006
2005
(Dollars in thousands)
$
51,811
$
50,562
$
51,531
20,713
9,257
10,022
$
31,098
$
41,305
$
41,509
2007
2006
2005
(Dollars in thousands)
$
(10,200
)
$
(28,973
)
$
4,034
38,000
81,100
34,200
8,800
(2,800
)
(7,800
)
36,600
49,327
30,434
398
(10,702
)
$
36,600
$
49,725
$
19,732
F-18
Table of Contents
2007
2006
(Dollars in thousands)
$
81,653
$
76,582
65,339
49,652
50,402
16,763
6,427
25,027
15,169
14,573
218,990
182,597
55,957
52,715
84,671
55,128
191,369
159,034
25,928
12,960
357,925
279,837
(9,375
)
(571
)
$
148,310
$
97,811
2007
2006
2005
35.0
%
35.0
%
35.0
%
3.9
3.9
3.9
(27.5
)
(27.4
)
(26.9
)
(1.6
)
(0.8
)
(2.4
)
1.1
(0.5
)
(2.6
)
(3.6
)
(1.8
)
(2.6
)
0.8
3.2
4.7
%
9.2
%
10.2
%
F-19
Table of Contents
F-20
Table of Contents
Pre-SFAS No. 158
SFAS No. 158
With AML
Adoption
Post SFAS
Adjustments
Adjustments
No. 158
(Dollars in thousands)
$
131,322
$
(95,239
)
$
36,083
(47,663
)
(15,057
)
(62,720
)
291
(291
)
189
39,699
39,888
8,469
8,469
296
62,419
62,715
485
102,118
102,603
Qualified
Non-Qualified
Pension Benefits
Pension Benefits
Other Benefits
2007
2006
2007
2006
2007
2006
(Dollars in thousands)
$
328,125
$
333,464
$
23,381
$
27,440
$
28,315
$
29,845
14,360
14,892
1,023
2,195
957
1,024
19,259
17,037
1,480
1,368
1,668
1,568
14,960
430
727
345
(5,049
)
(852
)
(8,813
)
9,794
(885
)
881
(552
)
85
(5,401
)
(6,614
)
(37
)
(1,333
)
(1,482
)
(1,124
)
262
(24,132
)
(22,271
)
(724
)
(785
)
(2,600
)
(2,446
)
$
346,319
$
328,125
$
35,644
$
23,381
$
28,001
$
28,315
$
345,860
$
335,488
45,826
25,688
14,877
6,955
$
724
$
785
$
2,600
$
2,446
(24,132
)
(22,271
)
(724
)
(785
)
(2,600
)
(2,446
)
$
382,431
$
345,860
$
$
$
$
$
17,401
$
(23,381
)
$
(28,315
)
328
205
104,665
888
(1,181
)
6,452
5,513
2,009
(1,362
)
(85
)
$
127,579
$
(20,241
)
$
(24,201
)
F-21
Table of Contents
Qualified
Non-Qualified
Pension Benefits
Pension Benefits
Other Benefits
2007
2006
2007
2006
2007
2006
(Dollars in thousands)
August 31, 2006
$
127,579
$
(21,396
)
$
(24,201
)
599
556
$
127,579
$
(20,241
)
$
(24,201
)
$
36,083
$
(1,862
)
$
(1,911
)
(33,119
)
(25,828
)
$
36,083
$
(34,981
)
$
(27,739
)
$
5,516
$
19,608
$
2,276
(1,044
)
75,886
10,434
(1,603
)
(7,191
)
(53
)
(1,226
)
$
88,303
$
12,657
$
1,643
Table of Contents
Qualified
Non-Qualified
Pension Benefits
Pension Benefits
Other Benefits
2007
2006
2005
2007
2006
2005
2007
2006
2005
(Dollars in thousands)
$
14,360
$
14,892
$
12,749
$
1,023
$
2,195
$
991
$
957
$
1,024
$
874
19,259
17,037
18,039
1,479
1,368
1,175
1,668
1,568
1,776
(29,171
)
(28,362
)
(27,648
)
867
855
792
494
516
519
(319
)
(305
)
(294
)
5,766
7,513
5,759
77
210
124
(231
)
17
43
936
936
936
$
11,081
$
11,935
$
9,691
$
3,073
$
4,289
$
2,809
$
3,011
$
3,240
$
3,335
6.25%
6.05%
5.25%
6.25%
6.05%
5.25%
6.25%
6.05%
5.25%
8.75%
8.80%
9.00%
N/A
N/A
N/A
N/A
N/A
N/A
4.50%
4.50%
4.80%
4.50%
4.50%
4.50%
4.50%
4.50%
4.80%
Non-Qualified
Pension Benefits
2007
2006
(Dollars in thousands)
$
35,644
$
23,381
22,731
21,491
Qualified
Non-Qualified
Pension Benefits
Pension Benefits
Other Benefits
(Dollars in thousands)
$
$
$
202
2,164
578
(319
)
4,398
823
(258
)
F-23
Table of Contents
1% Increase
1% Decrease
(Dollars in thousands)
$
300
$
(267
)
2,571
(2,318
)
Other Benefits
Qualified
Non-Qualified
Part D
Pension Benefits
Pension Benefits
Gross
Reimbursement
(Dollars in thousands)
$
24,317
$
1,862
$
1,911
$
200
24,999
560
1,973
200
27,275
1,268
2,210
200
27,915
5,376
2,405
200
29,946
5,665
2,640
200
186,647
13,664
14,680
800
optimize the long-term returns on plan assets at an acceptable
level of risk, and
maintain broad diversification across asset classes and among
investment managers, and focus on long-term return objectives.
F-24
Table of Contents
2007
2006
2.7
%
0.0
%
29.7
31.3
62.0
63.7
3.9
3.8
1.7
1.2
100.0
%
100.0
%
F-25
Table of Contents
Corporate
Reconciling
Energy
Ag Business
Processing
and Other
Amounts
Total
(Dollars in thousands)
$
8,105,067
$
8,575,389
$
754,743
$
28,465
$
(247,672
)
$
17,215,992
7,274,638
8,388,476
726,510
(2,261
)
(247,672
)
16,139,691
830,429
186,913
28,233
30,726
1,076,301
94,939
97,299
23,545
29,574
245,357
735,490
89,614
4,688
1,152
830,944
(5,348
)
(15,268
)
(20,616
)
(6,106
)
28,550
14,783
(6,129
)
31,098
(4,468
)
(51,830
)
(48,446
)
(4,941
)
(109,685
)
143,230
(16
)
143,214
$
602,834
$
118,258
$
53,619
$
12,222
$
$
786,933
$
(228,930
)
$
(18,372
)
$
(370
)
$
247,672
$
$
3,654
$
150
$
3,804
$
313,246
$
44,020
$
12,092
$
3,942
$
373,300
$
86,558
$
33,567
$
15,116
$
5,355
$
140,596
$
2,737,044
$
2,846,950
$
681,118
$
428,474
$
6,693,586
$
7,414,361
$
6,575,165
$
614,471
$
31,415
$
(251,577
)
$
14,383,835
6,834,676
6,401,527
588,732
(2,851
)
(251,577
)
13,570,507
579,685
173,638
25,739
34,266
813,328
82,867
99,777
21,645
26,949
231,238
496,818
73,861
4,094
7,317
582,090
6,534
23,559
11,096
116
41,305
(3,840
)
(40,902
)
(35,504
)
(3,942
)
(84,188
)
86,483
(509
)
85,974
$
407,641
$
91,713
$
28,502
$
11,143
$
$
538,999
$
(242,430
)
$
(8,779
)
$
(368
)
$
251,577
$
$
3,654
$
250
$
3,904
$
175,231
$
44,542
$
13,313
$
1,906
$
234,992
$
75,581
$
31,471
$
14,049
$
5,676
$
126,777
$
2,164,217
$
1,806,243
$
518,186
$
453,937
$
4,942,583
F-26
Table of Contents
Corporate
Reconciling
Energy
Ag Business
Processing
and Other
Amounts
Total
(Dollars in thousands)
$
5,794,266
$
5,670,644
$
613,766
$
29,070
$
(180,784
)
$
11,926,962
5,487,813
5,541,282
604,198
(2,651
)
(180,784
)
11,449,858
306,453
129,362
9,568
31,721
477,104
69,951
83,600
20,750
25,053
199,354
236,502
45,762
(11,182
)
6,668
277,750
(862
)
(11,358
)
(457
)
(336
)
(13,013
)
8,918
20,535
12,287
(231
)
41,509
(3,478
)
(55,473
)
(36,202
)
(589
)
(95,742
)
46,741
(41
)
1,036
47,736
$
185,183
$
92,099
$
13,190
$
6,788
$
$
297,260
$
(170,642
)
$
(9,640
)
$
(502
)
$
180,784
$
$
205,484
$
27,600
$
4,751
$
19,635
$
257,470
$
59,847
$
30,748
$
13,868
$
5,869
$
110,332
Table of Contents
F-28
Table of Contents
Guarantee/
Exposure on
Maximum
August 31,
Nature of
Triggering
Recourse
Assets Held
(Dollars in thousands)
Mountain Country, LLC
$
150
$
3
Obligations by Mountain Country, LLC under credit agreement
None stated, but may be terminated upon 90 days prior
notice in regard to future obligations
Credit agreement default
Subrogation against borrower
Some or all assets of borrower are held as collateral and
should be sufficient to cover guarantee exposure
$
20,000
2,000
Obligations by Provista under credit agreement
None stated
Credit agreement default
Subrogation against Provista
None
$
5,000
Indemnification and reimbursement of 24% of damages related to
Horizon Milling, LLCs performance under a flour sales
agreement
None stated, but may be terminated by any party upon
90 days prior notice in regard to future obligations
Nonperformance under flour sale agreement
Subrogation against Horizon Milling, LLC
None
$
25,000
Obligations by TEMCO under credit agreement
None stated
Credit agreement default
Subrogation against TEMCO, LLC
None
$
1,000
66
Obligations by TEMCO under counterparty agreement
None stated, but may be terminated upon 5 days prior notice
in regard to future obligations
Nonpayment
Subrogation against TEMCO, LLC
None
*
1,000
Surety for, or indemnification of surety for sales contracts
between affiliates and sellers of grain under deferred payment
contracts
Annual renewal on December 1 in regard to surety for one third
party, otherwise none stated and may be terminated by the
Company at any time in regard to future obligations
Nonpayment
Subrogation against affiliates
Some or all assets of borrower are held as collateral but might
not be sufficient to cover guarantee exposure
$
18,839
15,706
Loans to our customers that are originated by Cofina and then
sold to ProPartners, which is an affiliate of CoBank
None stated
Credit agreement default
Subrogation against borrower
Some or all assets of borrower are held as collateral but might
not be sufficient to cover guarantee exposure
$
10,700
8,785
Loans made by Cofina to our customers
None stated
Credit agreement default
Subrogation against borrower
Some or all assets of borrower are held as collateral but might
not be sufficient to cover guarantee exposure
$
5,674
5,674
Outstanding letter of credit from CoBank to Agriliance LLC
None stated
Default under letter of credit reimbursement agreement
Subrogation against borrower
None
Ag Business
segment subsidiaries
$
1,473
Contribution obligations as a participating employer in the
Co-op
Retirement Plan
None stated
Nonpayment
None
None
$33,234
*
The Companys bank covenants allow for guarantees of up to
$150.0 million, but the Company is under no obligation to
extend these guarantees. The maximum exposure on any given date
is equal to the actual guarantees extended as of that date.
F-29
Table of Contents
Rail
Equipment
Cars
Vehicles
and Other
Total
(Dollars in thousands)
$
11,463
$
18,101
$
3,313
$
32,877
7,507
14,184
2,921
24,612
6,188
11,409
2,545
20,142
5,166
5,436
2,348
12,950
3,708
3,114
1,891
8,713
5,328
449
2,405
8,182
$
39,360
$
52,693
$
15,423
$
107,476
14.
Supplemental
Cash Flow and Other Information
2007
2006
2005
(Dollars in thousands)
$
52,323
$
54,228
$
57,569
(20,274
)
(23,724
)
(8,804
)
35,899
23,824
19,996
10,132
11,064
1,375
(374,294
)
(249,774
)
(132,406
)
15.
Related
Party Transactions
2007
2006
(Dollars in thousands)
$
1,639,689
$
1,475,478
1,176,462
468,286
50,733
27,208
111,195
50,105
F-30
Table of Contents
16.
Comprehensive
Income
2007
2006
2005
(Dollars in thousands)
$
750,333
$
490,297
$
250,016
(1,193
)
444
2,822
65,533
1,787
8,085
(102
)
1,298
439
(2,806
)
2,806
921
1,796
760
$
812,686
$
498,428
$
262,122
2007
2006
(Dollars in thousands)
$
(64,276
)
$
(664
)
75,939
10,406
(2,194
)
(2,092
)
2,806
3,567
2,646
$
13,036
$
13,102
F-31
2
3
Term | Section | |
Active Employees
|
7.4 | |
Controlling Party
|
8.3 | |
CN Business
|
Preamble | |
CN Business Assets
|
3.1 | |
CN Contracts
|
3.1(d) | |
CN Equity Interests
|
3.1(h) | |
CN Employees
|
7.1 | |
CN Intellectual Property
|
3.1(g) | |
CN Leased Real Property
|
3.1(b) | |
CN Obligations
|
3.2 | |
CN Owned Real Property
|
3.1(a) | |
CN Prepaid Customer Accounts
|
3.2(a) | |
CN Prepaid Supplier Accounts
|
3.1(i)CN | |
Product Registrations
|
3.1(j)CN | |
Site Contamination
|
3.2(b) | |
CN Supplier Rebate Accruals
|
3.1(n) | |
CN Tangible Personal Property
|
3.1(c) | |
Collateral Source
|
12.7 | |
CPP Business
|
Preamble | |
CPP Business Assets
|
4.1 | |
CPP Contracts
|
4.1(e) | |
CPP Employees
|
7.2 | |
CPP Equity Interests
|
4.1(d) | |
CPP Intellectual Property
|
4.1(h) | |
CPP Leased Real Property
|
4.1(b) | |
CPP Obligations
|
4.2 | |
CPP Owned Real Property
|
4.1(a) | |
CPP Prepaid Customer Accounts
|
4.2(a) | |
CPP Prepaid Supplier Accounts
|
4.1(j) | |
CPP Product Registrations
|
4.1(k) | |
CPP Site Contamination
|
4.2(b) | |
CPP Supplier Rebate Accruals
|
4.1(m) | |
CPP Tangible Personal Property
|
4.1(c) | |
Estimated Inventories
|
6.5(b) | |
Final Balance Sheet
|
6.2 | |
Hired CN Employees
|
7.1 | |
Hired CPP Employees
|
7.2 |
4
Term | Section | |
Indemnified Party
|
12.5 | |
Indemnifying Party
|
12.5 | |
Interim Balance Sheet
|
6.2 | |
Post Transfer Period
|
9.1(c) | |
Pre-Transfer Period
|
9.1(c) | |
Property Taxes
|
9.1(c) | |
Retained Environmental Liabilities
|
8.1 | |
Title Commitment
|
9.1(a) | |
Title Company
|
9.1(a) | |
Third Party Action
|
12.6 |
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
LAND OLAKES, INC. | WINFIELD SOLUTIONS, LLC | |||||||||||
|
||||||||||||
BY:
|
BY: | |||||||||||
Print Name: | Print Name: | |||||||||||
|
||||||||||||
Title:
|
Title: | |||||||||||
|
||||||||||||
CHS, INC. | UNITED COUNTRY BRANDS, LLC | |||||||||||
|
||||||||||||
BY:
|
BY: | |||||||||||
Print Name: | Print Name: | |||||||||||
|
||||||||||||
Title:
|
Title: | |||||||||||
24
EXHIBITS | |||||
|
|||||
|
Exhibit A | Agreement to Pay Debt | |||
|
Exhibit B | Assignment and Assumption of Certain CN Obligations | |||
|
Exhibit C | Assignment and Assumption of Certain CPP Obligations | |||
|
Exhibit D | Master Lease Agreement | |||
|
Exhibit E | Supply Agreement to CHS | |||
|
Exhibit F | Transition Services Agreement | |||
|
Exhibit G | Modified Master Services Agreement | |||
|
Exhibit H | Supply Agreement from CHS to Agriliance | |||
|
Exhibit I | Supply Agreement from LOL/WS to Agriliance | |||
|
Exhibit J | Vehicle Lease Agreement to CHS | |||
|
Exhibit K | Vehicle Lease Agreement to WS |
SCHEDULES | ||||
|
||||
3.1(a) |
CN Owned Real Property
|
|||
3.1(b) |
CN Leased Real Property
|
|||
3.1(c) |
CN Tangible Personal Property
|
|||
3.1(d) |
CN Contracts
|
|||
3.1(f) |
CN Intellectual Property
|
|||
3.1(i) |
CN Prepaid Accounts
|
|||
3.1(j) |
CN Inventories
|
|||
3.1(k) |
CN Product Registrations
|
|||
4.1(a) |
CPP Owned Real Property
|
|||
4.1(b) |
CPP Leased Real Property
|
|||
4.1(c) |
CPP Tangible Personal Property
|
|||
4.1(e) |
CPP Contracts
|
|||
4.1(h) |
CPP Intellectual Property
|
|||
4.1(i) |
CPP Inventories
|
|||
4.1(j) |
CPP Prepaid Accounts
|
|||
4.1(k) |
CPP Product Registrations
|
|||
6.2 |
Estimated Value Distributed
|
|||
7.1 |
CN Employees
|
|||
7.2 |
CPP Employees
|
|||
7.4 |
Active Employees
|
|||
8.6 |
Known Retained Environmental Liabilities
|
|||
10.1(d) |
Schedule of Leases of Shared Locations
|
|||
10.2(a) |
Form of General Warranty Deed
|
|||
10.2(b) |
Form of Assignment and Assumption Agreements for CN and CPP Leased Real
Property and CN Leased Real Property
|
|||
10.2(c) |
Bills of Sale for CN and CPP Tangible Personal Property
|
|||
10.2(d) |
Assignment and Assumption Agreements for the CN and CPP Contracts
|
|||
10.2(e) |
Assignment and Assumption Agreements for the CN and CPP Equity Interests
|
|||
10.2(f) |
Bills) Form of Sale for the CN and CPP Inventories
|
|||
10.2(g) |
Owners Affidavits for the CN and CPP Real Property
|
25
SUBSIDIARIES OF THE REGISTRANT
STATE OF
INCORPORATION/
SUBSIDIARY
ORGANIZATION
Delaware
Minnesota
Minnesota
Montana
Nova Scotia
North Dakota
Delaware
Delaware
Minnesota
Minnesota
Montana
Ontario, Canada
Brazil
Alberta
Minnesota
Minnesota
Mexico
Zug, Switzerland
Zug, Switzerland
Zug, Switzerland
Idaho
Minnesota
Minnesota
Montana
Minnesota
Minnesota
South Dakota
North Dakota
North Dakota
North Dakota
North Dakota
Minnesota
Colorado
South Dakota
Idaho
Minnesota
Kansas
Minnesota
STATE OF
INCORPORATION/
SUBSIDIARY
ORGANIZATION
South Dakota
Minnesota
Delaware
Delaware
North Dakota
Minnesota
Montana
South Dakota
Minnesota
Washington
Wisconsin
Netherlands
Delaware
Delaware
Ontario, Canada
Illinois
Nebraska
Delaware
Delaware
Idaho
Kansas
Kansas
Kansas
Delaware
Kansas
Delaware
Minnesota
Iowa
Minnesota
Oregon
Minnesota
Kansas
South Dakota
Nebraska
Kansas
Minnesota
Kansas
Minnesota
Delaware
Oregon
South Dakota
Delaware
Delaware
Delaware
Delaware
Delaware
STATE OF
INCORPORATION/
SUBSIDIARY
ORGANIZATION
Delaware
Delaware
Delaware
Name | Title | Date | ||
s/ John D. Johnson
|
Chief Executive Officer
(principal executive officer) |
October 3, 2007 | ||
s/ John Schmitz
|
Executive Vice President &
Chief Financial Officer (principal financial officer) |
October 4, 2007 | ||
s/ Michael Toelle
|
Chairman of the Board | October 3, 2007 | ||
s/ Bruce Anderson
|
Director | October 3, 2007 | ||
s/ Donald Anthony
|
Director | October 3, 2007 | ||
s/ Robert Bass
|
Director | October 3, 2007 | ||
s/ Dennis Carlson
|
Director | October 3, 2007 | ||
s/ Curt Eischens
|
Director | October 3, 2007 | ||
s/ Steve Fritel
|
Director | October 3, 2007 |
Name | Title | Date | ||
s/ Robert Grabarski
|
Director | October 3, 2007 | ||
s/ Jerry Hasnedl
|
Director | October 3, 2007 | ||
s/ David Kayser
|
Director | October 3, 2007 | ||
s/ James Kile
|
Director | October 3, 2007 | ||
s/ Randy Knecht
|
Director | October 3, 2007 | ||
s/ Michael Mulcahey
|
Director | October 3, 2007 | ||
s/ Richard Owen
|
Director | October 3, 2007 | ||
s/ Steve Riegel
|
Director | October 3, 2007 | ||
s/ Daniel Schurr
|
Director | October 3, 2007 | ||
s/ Duane Stenzel
|
Director | October 3, 2007 |
2
SARBANES-OXLEY ACT OF 2002
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 registrants 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))
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.
evaluated the effectiveness of the registrants 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
c.
disclosed in this report any change in the registrants
internal control over financial reporting that occurred during
the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over
financial reporting; and
5.
The registrants other certifying officers and I have
disclosed, based on our most recent evaluation of internal
controls over financial reporting, to the registrants
auditors and the audit committee of the registrants board
of directors (or persons performing the equivalent functions):
a.
all significant deficiencies and material weaknesses in the
design or operation of internal controls over financial
reporting which are reasonably likely to adversely affect the
registrants 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
registrants internal control over financial reporting.
SARBANES-OXLEY ACT OF 2002
1.
I have reviewed this annual report on
Form 10-K
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 registrants 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))
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.
evaluated the effectiveness of the registrants 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
c.
disclosed in this report any change in the registrants
internal control over financial reporting that occurred during
the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over
financial reporting; and
5.
The registrants other certifying officers and I have
disclosed, based on our most recent evaluation of internal
controls over financial reporting, to the registrants
auditors and the audit committee of the registrants board
of directors (or persons performing the equivalent functions):
a.
all significant deficiencies and material weaknesses in the
design or operation of internal controls over financial
reporting which are reasonably likely to adversely affect the
registrants 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
registrants internal control over financial reporting.
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |