UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported): December 6, 2019
 
CHS Inc.
(Exact Name of Registrant as Specified in Charter)
 
Commission File Number: 001-36079
 
Minnesota
 
41-0251095
(State or Other Jurisdiction of Incorporation)
 
(IRS Employer Identification No.)
 
5500 Cenex Drive
Inver Grove Heights, Minnesota 55077
(Address of Principal Executive Offices) (Zip Code)
 
(651) 355-6000
(Registrant’s telephone number, including area code)
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
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
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o 

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





Item 7.01.    Regulation FD Disclosure.
On December 6, 2019, Jay Debertin, President and Chief Executive Officer of CHS Inc. (the “Company”), and Angela Olsonawski, Senior Vice President, Interim Chief Financial Officer and Corporate Treasurer of the Company, each gave a speech along with a related slide presentation at the Company’s 2019 Annual Meeting. Copies of Mr. Debertin’s speech and related slide presentation are attached hereto as Exhibits 99.1 and 99.2, respectively, and copies of Ms. Olsonawski’s speech and related slide presentation are attached hereto as Exhibits 99.3 and 99.4, respectively. Each such copy is incorporated herein by reference.
Pursuant to General Instruction B.2. to Form 8-K, the information set forth and incorporated by reference in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
Item 9.01.    Financial Statements and Exhibits.
Exhibit No.
 
Description
 
Speech of Jay Debertin
 
Slide Presentation Related to Speech of Jay Debertin
 
Speech of Angela Olsonawski
 
Slide Presentation Related to Speech of Angela Olsonawski






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
CHS Inc.
  
 
 
 
 
Date: December 6, 2019
 
By:
 
/s/ Angela Olsonawski
 
 
 
 
Angela Olsonawski
 
 
 
 
Senior Vice President, Interim Chief Financial Officer and Corporate Treasurer



Exhibit
EXHIBIT 99.1


Thank you for the conversation with our business leaders. Your questions are important. Your presence is important.

We’ve talked a lot in the last two days about the challenges and opportunities we face as a cooperative, that we face in agriculture as a whole. As others have said: Tough times never last. Tough people do.

While the people who said that weren’t referring to the last year in agriculture, make no mistake: This room and this industry are filled with tough people. We faced an unprecedented combination of challenges. We—you—have demonstrated resiliency. Your presence and your commitment are evidence that tough people last.

We will withstand these tough times. And we will grow.

As you heard earlier, we have continued to grow despite those headwinds. It’s because we stood together as a cooperative, and we remained committed to our purpose and to our values.

Our values are rooted in what has always mattered to cooperatives – people, communities, shared success.

Our purpose and our core values – integrity, safety, inclusion and cooperative spirit – drive and guide us to make the decisions to grow your company.

And we are growing the company. We are leading, we are building, and, yes, we are still strengthening. We are leveraging the strength of your supply chain to get your products to market and to your customers. And we do all this with you top of mind as we invest in technology, as we leverage your supply chain, as we make strategic acquisitions.

We are focused on you as we tell lawmakers about the impact policy has on farming and agriculture. Your needs help drive our work to attract, retain and develop talent to remain your first choice and help us grow CHS into an even greater position of strength.

One of the ways we grow your cooperative and the cooperative system is through relationships with our industry partners. We’re pleased today to have some of them join us. I’d like to extend a warm welcome to:
Jim Spradlin, CEO of Growmark
John Reifsteck, chairman of the Growmark board of directors
Chet Esther, vice chairman of Growmark.
Beth Ford, CEO of Land O’Lakes
Rick Brand, chairman of the Land O’Lakes Board of Directors
Tom Halvorson, president and CEO of Cobank
Keith Spackler, CEO of AGP

You know, I travel a lot in the country and am with you many times throughout the year. Sometimes I get asked about some nit or nat that one of these people or companies did and what I think.

This is what I think: These CEOs, their boards and their executive teams run great companies. And each of them works hard to advance agriculture and the success of farmers and ranchers. If there is something around the edges, we don’t approach in exactly the same way, know that 99 percent of the time, we do.





Thank you for joining us today and for standing with us.

You’ve heard us talk for the last three years about strengthening the company, of building a better business not just for you but for generations to come. I can stand before you and tell you we have made remarkable progress. We’ve made hard decisions around investments and performance. We’ve refocused our company on what we do well and are taking actions to improve or move away from what we don’t.

We will still face challenges, we will still make some mistakes, and we will still have to navigate tough conditions. It is, after all, still called business. We are focused on being our customers’ first choice by building stronger technology platforms to be easier to do business with, performing at a high level, using our supply chains more effectively and strengthening our communication with our owners.

You heard the financial report earlier. We reported $830 million in net income, a $54 million increase over last fiscal year in a very challenging time.

We saw improvements in Energy. And, as Angie mentioned, we saw improvements in earnings from our equity investments, including CF Nitrogen.

But we also know there are headwinds. We had a tough year in our ag business side of the company.

We know the fiscal year we’re in right now will also be challenging; we’ve already seen the first signs of it in fall fertilizer sales – or I should say the lack of fall fertilizer sales. The challenges we face are similar to those all of agriculture faces. No one sees and feels those challenges more than you.

The late planting and prolonged spring floods in some of our trade area impacted bottom lines. A late and wet harvest added strain on an already tough year.

But, like you, we responded to the circumstances before us, circumstances that are constantly evolving. And, often, circumstances around which we have very little control. But please know this: We will operate the company for the challenging times we are in. It is how we have gotten through difficult situations before, and it is how we will get through them again.

Nothing has illustrated the need to evolve and adapt more than the trade situation. Some of us remember trade tensions in the 70s. This situation, though, is on a different plane. And we know that no matter what happens, we won’t go immediately back to where we were 18 months ago, and maybe not for a long time.

The profound trade changes resulted in new trading partners and new sources of grain for markets the U.S. once served. That is now the new world. We must evolve and adapt and grow in these new circumstances.

It’s a hard truth, and it’s one that we must face and adjust to. The ways of trading and operating yesterday cannot and will not work in today’s world. And the cooperative you own today cannot and will not work in tomorrow’s world unless we adapt. We must continue to not just evolve but to lead, not just grow but identify where and how your business and your cooperative can thrive.

Getting through this is not about holding our breath. We have to adjust to the circumstances that we find today, and we have to breathe all the way through it. And we must move with speed. We are not going to lose who we are at our core. We’ve done this before in the last 90 years, and we can do it again. We’ve




adapted, and we will continue to adapt. And I am here to pledge to you that we will hold fast to the values that ground us and our purpose that will guide us.

That doesn’t mean we are unaware of the very real impact these market changes have on lives. The effects of today’s ag economy on families are real, and resources in many towns are limited. In towns of 800 people like in the areas that I grew up in, many times, it falls on the local church pastors. And they are overwhelmed. CHS will help.

We aren’t the experts in how to manage the stress impacting your families and lives. But we are committed to supporting those who are. Earlier this year, we awarded grants to nine organizations that are focused on providing mental health support to our rural communities. We can do that.

It’s one way we’re living out our value of cooperative spirit.

We create connections to empower agriculture, to empower you, our owners, to grow your businesses. That’s our purpose, and we will not lose sight of it. Nor will we lose sight of what we must do to grow your cooperative.

We’re looking hard at how we can capture further operational efficiencies and drive costs out of our business as part of our efforts to adapt to these times.

Employees across CHS – up and down and across the organization – are leaning in and bringing ideas to help drive growth through sustainable efficiencies that we believe will ultimately drive more cash back to you. Each of these decisions is driven by our purpose and focuses on our four strategies:
Creating an experience that makes CHS your first choice
Growing market access
Evolving our core business and
Transforming the business to unleash the enterprise.

Our strategies aren’t just nice ideas meant to sit in a binder or become wallpaper. We put them into action every day across the enterprise in all parts of the world. It is why I can tell you that we have confidence in – and why you can have confidence in – the future of the company. We will do what’s necessary to succeed. It’s how and why we set goals and achieved them last year. It’s why we have continued to grow.

In the last year we have:
Traveled to Washington, D.C. and met with senior policy makers and lawmakers about the impact policies have on your businesses. We met with USDA Secretary Sonny Perdue, U.S. trade negotiators and key federal lawmakers over and over again and told them how policies are impacting you. We took on state issues and advocated for cooperatives and farmers.
We found new markets for your grain. And when the doors to China essentially shut last year, we worked with buyers in Singapore, South Korea and Vietnam to find new doors. We put grain into smaller containers to meet the needs of buyers who didn’t need a full vessel. Our ability to respond quickly to this sets us apart from those outside the cooperative system.
We invested in improved processing at our McPherson, Kansas, refinery that allowed us to make more diesel and that will ultimately have higher returns to you.
We made significant progress on our pipeline replacement project that runs from Montana to Minot, North Dakota, an investment that will allow us to get product to you and help ensure environmental safety.




We acquired the portion of West Central crop protection products company that we didn’t fully own, and we integrated it into our agronomy business.
We began construction on a new fertilizer distribution facility in Langdon, North Dakota, and a new shuttle loader in Herman, Minnesota. These investments will allow you to get your loads in and out more quickly.
We began expansion on our Fairmont soybean crushing facility so we can process more of your soybeans into value-added soybean oil, meal and flour and get it to market.
We blended record amounts of ethanol and biodiesel.
We made some hard decisions, but they were the right decisions, even when it cost us money. Flooded rivers kept us from moving fertilizer on barges last spring, and a couple hundred of those barges were stuck in St. Louis. So we put it on trucks and rail cars and got it to our local cooperatives so they could get it to their customers.
And, you know, we probably lost money on each ton of fertilizer to do that. Why do we do that? Because local cooperatives and their customers depend on us. You know, sometimes we get described as just another big company. We are a large company, and size and scale provide advantages. But we don’t, as last spring showed, lose sight of those who depend on us.
We improved efficiencies in our supply chain to reduce costs in our operations.
And we introduced CHS AcuvantTM, which is formulated with oil refined by CHS from soybeans grown by CHS owners.

Our work on these strategies is not done. And it never will be.

As the largest cooperative in North America, we need to work to seize opportunities to continue to lead and continue to grow, to challenge ourselves and our industry, to build the cooperative for tomorrow and for those who come after us.

We take that obligation seriously. And it’s that belief that has led us to invest in our technology platform to bring better service, better access, a better experience to you.

We are building the foundation of our technology platform, a way of doing business that puts the needs of you front and center. It provides us with the compliance tools we need and the efficiency to operate competitively, continuously improve our operations and drive costs out.

We are building an online relationship to meet you where you want to be, to help you manage your business at anytime, from anywhere. You can expect to do business with us in a more streamlined, efficient and effective way.

It’s what our local cooperatives see in our online energy control rooms. It gives our local cooperatives a competitive advantage and lets them do business with us online, when and where it’s convenient for them.

And it’s what growers see in the recently launched MyCHS. The platform gives them visibility to their grain commodity balances and contract status, their bookings, invoices and payments. And it gives them the ability to download their data and to do it all safely and securely.

Today, those using MyCHS can order propane and lubricants, petroleum and products needed to run equipment. They can purchase the Total Protection Plan through the online store. They can buy gift cards to use online and in our local cooperative Cenex® locations. And they can do the majority of these transactions without ever seeing a printed invoice.





In the coming months, MyCHS will allow growers to pay online and have one place to conduct business with CHS. It’s entirely paperless. And in the next year, we’ll be rolling out improvements to that system. Think of it as the updates we all download to the apps on our phones.

And that’s just the beginning.

This is how we will continue to build a better cooperative, a better experience for our owners, a better path to grow your business.

And it brings us back to our purpose: Creating connections to empower agriculture. Which brings us back to investment – in our processes, our infrastructure, in our people and in you.

This is the power of CHS.

We are committed to you, and we are grateful – I am grateful – for your commitment to us. As much as any time in the last 90 years, ladies and gentlemen, we are in this together.

We are optimistic about the future. Difficult – yes. But we are doing what is required to succeed. We are confident that you, our owners, and others will look at CHS, look at the hard decisions made, look at the investments in your cooperative and know that, collectively, we took the concrete steps to win.

We have confidence in the future of agriculture and in our future. More importantly, we have confidence in you and in your future.

Thank you.



ex992a2019annualmeetingc
Exhibit 99.2 Jay Debertin, President and CEO (use Eidecom-produced imagery specific to annual meeting to match other speaker title approaches)


 
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Our values Our purpose Integrity Creating connections Safety to empower agriculture Inclusion Cooperative spirit 8


 


 


 


 


 


 
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Our Strategies Create an experience that Evolve our core Grow market access Transform the business empowers customers and businesses by capitalizing to add value for to unleash the makes CHS their on changing market our owners enterprise first choice dynamics Evolve and animate – no changes to words © 2019 CHS Inc. Internal 47


 
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Exhibit
EXHIBIT 99.3


Good morning. Thank you, Jay.

This morning I am pleased to present to you the 2019 Financial Report. It was not an easy year, as all of you know. We faced challenges and headwinds – in trade, in weather, in logistics – but we also found opportunities. CHS had a very good year financially. As we have seen in prior years, the diversity of our business portfolio helped us manage through the cycles of ag and energy.

Before we get started, please take a moment to review this slide, which has important information for our time together. Some of the business and financial topics we discuss today may contain forward–looking statements under federal securities laws.

It’s important to understand that our actual results or performance may differ significantly from those expressed or implied by today’s comments and presentations. These differences may come to exist because of risks and uncertainties relating to our business, including the risks and uncertainties we describe in our most recent 10-K annual report on file with the SEC.

Revenues in fiscal year 2019 were $32 billion. That’s slightly lower than last year, due in part to impacts from decreased global trade and weather, but still a very strong year and right in the middle of the five -year range.

Net income for the fiscal year came in at $830 million. That’s an increase of $54 million or 7 percent from fiscal year 2018. The key financial drivers for the year included:
Improved market conditions in our refined fuels business, primarily driven by favorable Canadian crude oil pricing.
Increased earnings from investments, including higher returns from our CF Nitrogen investment.
Also in fiscal year 2019, CHS acquired the remaining 75 percent interest in West Central Distribution a full-service wholesale distributor of agronomy products.

In addition to those benefits, we also had challenges, and you’ll see that reflected in earnings. Volumes were lower and margins were compressed in certain businesses. This year, as in most other years, our financial results also reflect certain non-operating outcomes and non-recurring events. Finally, there was significant work done this year to improve our internal controls environment and remediate three material weaknesses.

This chart shows net income at the bottom comparing fiscal year 2019 to fiscal year 2018. Now I’m going to spend some time reviewing the different components that make up earnings.

The Energy segment includes four businesses: Refined fuels, propane, lubricants and transportation. Energy had a great year with pre-tax earnings of $618 million. That’s up $166 million from the prior year. These earnings were the result of improved market conditions which were partially offset by refinery downtime due to planned maintenance last spring. Also, the prior fiscal year’s Energy earnings included gains on the sale of assets, which did not recur in fiscal year 2019.

The main driver of Energy earnings was the favorable pricing of Canadian crude oil, which is processed by our refineries in Laurel, Montana, and McPherson, Kansas.

This chart shows two years of crude oil prices. The black line is the U.S. benchmark price. You can see the range has been between $45 and $75. The red line is the benchmark price of Canadian crude oil. Starting




in late summer of 2018 through that fall, the Canadian oil market disconnected from the U.S. market and traded at a much lower price.

This was due to short-term oversupply in Alberta and bottlenecks in logistics at a time when demand was slower. At times in the fall of 2018 when the U.S. oil price was above $60, the price in Canada was under $20 per barrel. Over 60 percent of the crude oil CHS processes comes from Canada. CHS didn’t benefit from this by chance. We’ve made investments in our two refineries to be able to process the heavier, higher-sulfur Canadian oil. We’ve also made strategic pipeline connections to be able to access a variety of oil markets.

The ag reporting segment includes Agronomy, Global Grain Marketing, Country Operations, Processing and Renewable Fuels Production. Ag had pretax earnings of $43 million. That’s a decrease of $31 million from prior year. There are a variety of things that impacted Ag earnings.

Weather, of course, was a huge component. Late snowfall across much of the trade territory, followed by spring flooding that delayed, and, in some cases, prevented planting. Ongoing global trade issues between the U.S. and foreign trading partners resulted in generally lower volumes and lower margins across much of our Ag segment.

Logistics were also a challenge. For example, we’d typically see the first barge of fertilizer off the Mississippi River arrive in St. Paul in April. This year, the first barge of fertilizer got to St. Paul in July. Likewise, shipments of grain south on the Mississippi were also challenged. With the river closed in key areas, instead of shipping grain via barge to our export facility in Myrtle Grove, Louisiana, we used railcars. And that added costs. In light of the current ag environment, we did evaluate certain receivables on our balance sheet, and, in fiscal year 2019, we increased loan loss reserves.

But there were some bright spots in Ag. The acquisition of the remaining 75 percent interest in West Central contributed to higher earnings. This acquisition expanded the distribution assets, capabilities and expertise of CHS Agronomy. Soybean processing margins were higher year over year at our Fairmont and Mankato, Minnesota, plants.

Now let’s take a look at a chart on trade. This shows 20 years of U.S. soybean exports. Within that total, the green area shows exports to China. You can see the decline in recent years. This impacts the volume of grain CHS sells but also the profitability of certain assets like our grain export facilities in the Pacific Northwest. With China buying fewer beans from the U.S., CHS is targeting other markets.

The reporting segment of Nitrogen Production is our investment in CF Nitrogen. Pretax earnings were $73 million; that’s an increase of $34 million from last year. This improvement was driven by higher prices for urea and UAN.

Finally, our Corporate and Other earnings were $82 million. This was a decrease from fiscal year 2018, but fiscal year 2018 earnings included the sale of the CHS Insurance business. Corporate and Other includes wholly owned subsidiaries like CHS Hedging and CHS Capital. Both had great results. This segment also includes two joint ventures: Ardent Mills, a leading flour supplier, and Ventura Foods, a producer of oil-based branded and private-label foods.

To summarize, our fiscal year 2019 results showed a $54 million increase in net income compared to fiscal year 2018. Your commitment to your cooperative and the dedication of our employees helped drive these results.





Earlier this morning, Chairman Schurr reported on the Board’s equity management decisions. As he noted in his report, the Board has again designated 10 percent of this year’s patronage-based earnings to the unallocated capital reserve. This year, patronage will be issued in cash and nonqualified equity certificates. In total, $180 million in cash will be distributed to owners: $90 million in cash patronage and $90 million in equity redemptions.

Of the $90 million in equity redemptions, $63 million will go to member cooperatives. The balance of $27 million will be distributed to individual owners. That split represents the percentage ownership of CHS. The $63 million of member cooperative redemptions will include $10 million of fiscal year 2018 nonqualified equity certificates. The balance of the redemptions will be qualified certificates. The $27 million of individual producer member equity will be distributed based on requests from those who have reached age 70 or requests from estates.

The Board also approved a policy change this year, and that applies to individual members. The revised policy allows those over age 70 to request their equity once every five years. The previous policy allowed for individual members to redeem their equity only once after reaching the eligible age.

Here are a few wholesale patronage rates. What you see on the screen is total patronage and cash patronage. I’ll highlight a few:
Premium diesel total patronage will be 17.6 cents per gallon with a cash portion of 2.8 cents.
For propane, total patronage is 2.4 cents per gallon.
And in Agronomy, bulk fertilizer patronage will be $6.42 per ton with cash of $1.03.

As we look to the future, equity management decisions will continue to be made with these three things in mind: Doing what’s in the best interests of CHS and its owners, keeping the balance sheet strong and allowing CHS to grow in the future.

Your cooperative delivered solid financial results for fiscal 2019. We will likely face continued challenges in ag in fiscal 2020. But we’re committed to working with you to navigate those challenges.

Thank you for your business and for your continued support of CHS.


ex994a2019annualmeetingf
Exhibit 99.4 Forward-Looking Statements This document and accompanying oral presentation contain and other CHS Inc. internally and publicly available documents contain, and CHS officers and representatives may from time to time make, “forward–looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Report Act of 1995. Forward– looking statements can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward– looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on CHS current beliefs, expectations and assumptions regarding the future of its businesses, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of CHS control. CHS actual results and financial condition may differ materially from those indicated in the forward–looking statements. Therefore, you should not place undue reliance on any of these forward–looking statements. Important factors that could cause CHS actual results and financial condition to differ materially from those indicated in the forward–looking statements are discussed or identified in CHS filings made with the U.S. Securities and Exchange Commission, including in the "Risk Factors" discussion in Item 1A of CHS Annual Report on Form 10–K for the fiscal year ended August 31, 2019. Any forward–looking statements made by CHS in this document are based only on information currently available to CHS and speak only as of the date on which the statement is made. CHS undertakes no obligation to update any forward–looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise except as required by applicable law. © 2019 CHS Inc. Public 1


 
Revenue ($ in billions) 40 $32 30 20 2015 2016 2017 2018 2019 © 2019 CHS Inc. Public


 
Net Income ($ in millions) 1000 $830 750 500 250 0 2015 2016 2017 2018 2019 © 2019 CHS Inc. Public


 
Total Net Income CHS Sept 1 – Aug 31 Fiscal Year Fiscal Year (in $ millions) 2019 2018 Energy $ 618.2 $ 452.1 Ag 43.0 74.3 Nitrogen Production 72.9 38.8 Corporate & Other 81.5 106.0 Pretax Income 815.6 671.2 Income Taxes (Benefit) (12.5) (104.1) Noncontrolling interests (1.8) (0.6) Net Income $ 829.9 $ 775.9 © 2019 CHS Inc. Public 4


 
Total Net Income CHS Sept 1 – Aug 31 (in $ millions) Fiscal Year Fiscal Year 2019 2018 Energy $ 618.2 $ 452.1 Ag 43.0 74.3 Nitrogen Production 72.9 38.8 Corporate & Other 81.5 106.0 Pretax Income 815.6 671.2 Income Taxes (Benefit) (12.5) (104.1) Noncontrolling interests (1.8) (0.6) Net Income $ 829.9 $ 775.9 © 2019 CHS Inc. Public 5


 
US and Canadian Oil Prices US Oil Price Canadian Oil Price $80 $60 $40 $20 $0 Jul Jul 2019 Jul 2018 Jul Oct 2019 Oct Oct 2017 Oct 2018 Oct Apr 2019 Apr Apr 2018 Apr Jan 2019 Jan Jan 2018 Jan © 2019 CHS Inc. Public


 
Total Net Income CHS Sept 1 – Aug 31 Fiscal Year Fiscal Year (in $ millions) 2019 2018 Energy $ 618.2 $ 452.1 Ag 43.0 74.3 Nitrogen Production 72.9 38.8 Corporate & Other 81.5 106.0 Pretax Income 815.6 671.2 Income Taxes (Benefit) (12.5) (104.1) Noncontrolling interests (1.8) (0.6) Net Income $ 829.9 $ 775.9 © 2019 CHS Inc. Public 7


 
US Soybean Exports Total China 70 60 50 40 30 20 10 0 2017 2018 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 © 2019 CHS Inc. Public


 
Total Net Income CHS Sept 1 – Aug 31 Fiscal Year Fiscal Year (in $ millions) 2019 2018 Energy $ 618.2 $ 452.1 Ag 43.0 74.3 Nitrogen Production 72.9 38.8 Corporate & Other 81.5 106.0 Pretax Income 815.6 671.2 Income Taxes (Benefit) (12.5) (104.1) Noncontrolling interests (1.8) (0.6) Net Income $ 829.9 $ 775.9 © 2019 CHS Inc. Public 9


 
Total Net Income CHS Sept 1 – Aug 31 Fiscal Year Fiscal Year (in $ millions) 2019 2018 Energy $ 618.2 $ 452.1 Ag 43.0 74.3 Nitrogen Production 72.9 38.8 Corporate & Other 81.5 106.0 Pretax Income 815.6 671.2 Income Taxes (Benefit) (12.5) (104.1) Noncontrolling interests (1.8) (0.6) Net Income $ 829.9 $ 775.9 © 2019 CHS Inc. Public 10


 
Total Net Income CHS Sept 1 – Aug 31 Fiscal Year Fiscal Year (in $ millions) 2019 2018 Energy $ 618.2 $ 452.1 Ag 43.0 74.3 Nitrogen Production 72.9 38.8 Corporate & Other 81.5 106.0 Pretax Income 815.6 671.2 Income Taxes (Benefit) (12.5) (104.1) Noncontrolling interests (1.8) (0.6) Net Income $ 829.9 $ 775.9 © 2019 CHS Inc. Public 11


 
$180 Million CASH RETURNS $90 Million Equity $90 Million Patronage Redemptions 10% to Unallocated Capital Reserve © 2019 CHS Inc. Public


 
$90 Million Equity Redemptions $63 Million $27 Million Member cooperatives Individuals $10 Million 2018 2006 Qualified Age 70+ Estates Non-qualified Equity Equity © 2019 CHS Inc. Public 13


 
Wholesale patronage rates Per gallon Cash Tot al Per ton Cash Tot al Refined fuels 2.4 cents 15.3 cents Bulk fertilizer $1.03 $6.42 Premium diesel 2.8 cents 17.6 cents Specialty $2.16 $13.50 Propane 0.38 cents 2.4 cents © 2019 CHS Inc. Public 14