5 unchanged sentences
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
−Removed: Table of Content s
Our internal control system is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
5 unchanged sentences
Management's report was not subject to attestation by our independent registered public accounting firm pursuant to the Financial Reform Bill passed in July 2010 that permits us to provide only management’s report in this Annual Report on Form 10-K.
−Removed: Remediation of Previously Identified Material Weaknesses
−Removed: We previously identified and disclosed in our Annual Report on Form 10-K for the year ended August 31, 2019, the following material weaknesses in our internal control over financial reporting, each of which has been remediated, as described below:
−Removed: • We did not design and consistently maintain effective monitoring controls related to the design and operating effectiveness of our internal controls.
−Removed: Specifically, we did not implement and reinforce an adequate process for monitoring the proper functioning of internal controls to verify that our accounting policies and procedures are consistently and adequately being performed, as relevant, by a sufficient number of resources with the appropriate knowledge and training.
−Removed: • We did not design and maintain effective controls over certain information technology ("IT") general controls for information systems relevant to the preparation of our financial statements.
−Removed: Specifically, we did not design and maintain sufficient (i) testing and approval controls for program development to ensure the implementation of a new ERP system was aligned with business and IT requirements, or (ii) user access controls to ensure appropriate segregation of duties, or that adequately restrict user and privileged access to certain financial applications, programs and data to appropriate personnel.
−Removed: These control deficiencies resulted in misstatements to the inventory and COGS and related disclosures for the third quarter of fiscal 2018.
−Removed: Additionally, the deficiencies, when aggregated, could impact the maintenance of effective segregation of duties, as well as the effectiveness of IT dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected.
−Removed: During the first three quarters of fiscal 2020 we substantially completed the projects designed and implemented to remediate the previously identified material weaknesses, including (1) establishing appropriate roles and responsibilities within the organization, implementing formal programs for finance, accounting, operations and IT personnel, and reinforcing an adequate process for monitoring proper functioning of internal controls to verify that our accounting policies and procedures are consistently and adequately being performed, as relevant, by a sufficient number of resources with the appropriate knowledge and training and (2) designing and implementing controls over certain IT general controls for information systems that are relevant to the preparation of our financial statements .
−Removed: During the quarter ended August 31, 2020, we completed the testing and evaluation of the operating effectiveness of the remediated controls and concluded that the previously identified material weaknesses have been remediated as of August 31, 2020.
Changes in Internal Control Over Financial Reporting
There have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended August 31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
−Removed: Table of Content s
OTHER INFORMATION
On November 3, 2021, we and Mr.
−Removed: Debertin entered into an amendment ("Employment Agreement Amendment") to the employment agreement we entered into with Mr.
−Removed: Debertin on May 22, 2017 ("Employment Agreement"), pursuant to which the term of the Employment Agreement was extended to August 31, 2023, provided that, pursuant to the terms of the Employment Agreement, beginning on August 31, 2023, and on each August 31 thereafter, the Employment Agreement will automatically renew for an additional one-year period, unless either party notifies the other in writing, at least 120 days in advance of the renewal date, of its intent not to renew the agreement for an additional one-year period.
−Removed: The foregoing description of the Employment Agreement Amendment does not purport to be complete and is qualified in its entirety by reference to the Employment Agreement Amendment, which is filed as Exhibit 10.1A to this Annual Report on Form 10-K and is incorporated herein by reference.
−Removed: Table of Content s
+Added: Debertin entered into an amendment ("Employment Agreement Amendment No.
+Added: 2") to the employment agreement we entered into with Mr.
+Added: Debertin on May 22, 2017 ("Employment Agreement"), as previously amended on November 5, 2020, pursuant to which the terms of Mr.
+Added: Debertin’s long-term incentive compensation were amended to provide Mr.
+Added: Debertin a target opportunity of 300% of his average annual Base Salary over each three-year performance period applicable to that award opportunity, with a threshold opportunity equal to one-half of the target opportunity and a maximum opportunity equal to twice the target opportunity.
+Added: The amended long-term incentive compensation opportunity targets will apply to each three-year performance period that begins on or after September 1, 2021.
+Added: The foregoing description of Employment Agreement Amendment No.
+Added: 2 does not purport to be complete and is qualified in its entirety by reference to Employment Agreement Amendment No.
+Added: 2, which is filed as Exhibit 10.1 B to this Annual Report on Form 10-K and is incorporated herein by reference.
+Added: DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
+Added: Not applicable.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
15 unchanged sentences
Russell Kehl 46 6 2017
−Removed: Edward Malesich 67 2 2011
Perry Meyer 67 1 2014
2 unchanged sentences
Kevin Throener 49 3 2019
+Added: Cortney Wagner 43 2 2020
As a cooperative, members of our Board of Directors are nominated and elected by our members as required by our bylaws.
4 unchanged sentences
In general, our directors operate large commercial agricultural enterprises, which require expertise in all areas of management, including financial oversight.
−Removed: They also have experience serving on local cooperative association boards and participate in a variety of agricultural and community organizations.
+Added: Most directors also have experience serving on local cooperative association boards and participate in a variety of agricultural and community organizations.
Some directors also have experience serving on boards of directors for financial and other institutions and businesses.
1 unchanged sentence
David Beckman has been a member of the CHS Board of Directors since 2018.
−Removed: He serves as vice chair of the Government Relations Committee and is a member of the Corporate Risk Committee.
+Added: He is a member of the Audit Committee and the CHS Foundation Board of Trustees.
He serves as board chair for Central Valley Ag Cooperative in York, Nebraska, and secretary of the Nebraska Cooperative Council.
4 unchanged sentences
Since 2017, Mr.
−Removed: Blew has served as first vice chair of the Board and a member of the Executive Committee.
−Removed: He also serves on the Audit and Capital committees.
+Added: Blew has served as first vice chair of the Executive Committee of the Board.
+Added: He also serves on the Audit Committee and Capital Committee.
He is a member of the board of directors of Mid Kansas Coop, Moundridge, Kansas, and is a member of the Hutchinson Community College Ag Advisory Board, Kansas Livestock Association, Texas Cattle Feeders Association and Red Angus Association of America.
1 unchanged sentence
Blew's principal occupation has been farming for more than five years, and he farms and ranches in a family partnership in south-central Kansas.
−Removed: Table of Content s
Hal Clemensen has been a member of the CHS Board of Directors since 2019.
−Removed: He is a member of the Government Relations and Corporate Risk committees.
+Added: He is vice chair of the Government Relations Committee and a member of the Corporate Risk Committee.
He serves on the Agtegra Cooperative board.
5 unchanged sentences
Scott Cordes has been a member of the CHS Board of Directors since 2017.
−Removed: He serves as vice chair of the Audit Committee and vice chair of the Corporate Risk Committee.
+Added: He is vice chair of the Audit Committee and vice chair of the Corporate Risk Committee.
He serves as a director and past chair of Security State Bank of Wanamingo, Minnesota.
−Removed: He also serves as a member of the board for the Cooperative Network.
−Removed: Previously, he served as director of the MGEX and National Futures Association.
+Added: Previously, he served as director of Cooperative Network, the MGEX and National Futures Association.
He holds a bachelor's degree in agricultural economics from the University of Minnesota.
Cordes' principal occupation has been farming for more than four years.
−Removed: Prior to his current occupation, he was president of CHS Hedging, LLC, a commodities brokerage subsidiary of CHS Inc.
+Added: Prior to his current occupation, he was president of CHS Hedging, a commodities brokerage subsidiary of CHS Inc.
He operates a corn and soybean farm near Wanamingo.
7 unchanged sentences
Mark Farrell has been a member of the CHS Board of Directors since 2016.
−Removed: He serves as vice chair of the CHS Foundation Board of Trustees and as a member of the Audit Committee.
+Added: He is a member of the Board's Corporate Risk Committee and Government Relations Committee.
Previously, he served as a director and president of the Premier Cooperative board and as a director of Mount Horeb Farmers Co-op and United Ethanol.
3 unchanged sentences
Steve Fritel has been a member of the CHS Board of Directors since 2003.
−Removed: He serves as chair of the Corporate Risk Committee and as a member of the Audit Committee.
+Added: He chairs the Corporate Risk Committee and is a member of the Audit Committee.
He earned an associate degree from North Dakota State College of Science.
Fritel's principal occupation has been farming for more than five years.
−Removed: He raises spring wheat, soybeans, edible beans, corn and canola near Rugby, North Dakota.
−Removed: He also runs a family business providing on-farm grain storage equipment and sells some of his edible beans to local family-owned restaurants.
+Added: He raises spring wheat, soybeans, edible beans, corn and canola near Rugby, North Dakota, selling some of his edible beans to family-owned restaurants.
+Added: He also runs a family business providing on-farm grain storage equipment.
Alan Holm has been a member of the CHS Board of Directors since 2013.
1 unchanged sentence
He also serves on the board for Citizens Bank of Minnesota.
−Removed: Holm holds an associate degree in machine tool technology from Mankato Technical College.
+Added: Holm holds an associate degree in machine tool technology from Mankato (Minnesota) Technical College.
Holm's principal occupation has been farming for more than five years.
−Removed: He raises corn, soybeans, sweet corn, peas and hay and operates a cow-calf herd near Sleepy Eye, Minnesota.
+Added: He raises corn, soybeans, sweet corn, peas and hay and operates a cow-calf operation near Sleepy Eye, Minnesota.
David Johnsrud has been a member of the CHS Board of Directors since 2012.
−Removed: He serves as a member of the Government Relations and Capital committees.
+Added: He serves as a member of the Government Relations Committee and Capital Committee.
He also serves as a member of the board for the Cooperative Network.
−Removed: Previously, he served as board chair of AgCountry Farm Credit Services and on the boards of the Minnesota Farm Credit Legislative Committee, Farmers Union Oil, CHS Prairie Lakes, Mid-Minnesota Association and Minnesota State Co-op Directors Association.
+Added: Previously, he served as board chair of AgCountry Farm Credit Services and on the boards of the Minnesota Farm Credit Legislative Committee, Farmers Union Oil, CHS Prairie Lakes, Mid-Minnesota Association and Minnesota State Co-op Directors Association, including terms as board secretary for Farmers Union Oil and CHS Prairie Lakes.
Johnsrud’s principal occupation has been farming for more than five years.
1 unchanged sentence
Tracy Jones has been a member of the CHS Board of Directors since 2017.
−Removed: He is a member of the Governance and Capital committees.
−Removed: He serves on the DeKalb County board.
−Removed: Previously, he served on the boards of CHS Elburn, DeKalb Kane Cattlemen's Association and DeKalb County Corn Growers.
+Added: He is chair of the Governance Committee and a member of the Capital Committee.
+Added: He has served on the DeKalb County Board and on the boards of CHS Elburn, DeKalb Kane Cattlemen's Association and DeKalb County Corn Growers.
He earned an associate degree in farm management from Kishwaukee College in Malta, Illinois.
6 unchanged sentences
He raises corn, soybeans and hay near Alexandria, South Dakota, and operates a cow-calf and feeder-calf business.
−Removed: Table of Content s
Russell Kehl, Secretary-Treasurer, has been a member of the CHS Board of Directors since 2017.
Since 2019, Mr.
−Removed: Kehl has served as secretary-treasurer of the Board and a member of the Executive Committee.
+Added: Kehl has served as secretary-treasurer of the Executive Committee of the Board.
He also serves as vice chair of the Capital Committee and vice chair of the Governance Committee.
−Removed: He previously served as a member of the producer board of CHS SunBasin Growers and vice chair of the Columbia Basin Seed Association.
+Added: He previously was a director of CHS SunBasin Growers and vice chair of the Columbia Basin Seed Association.
Kehl's primary occupation has been farming for more than five years.
1 unchanged sentence
His family also owns a dry bean processing facility, runs a custom farming business, and owns and operates a trucking and logistics company.
−Removed: Edward Malesich has been a member of the CHS Board of Directors since 2011.
−Removed: He serves as chair of the Governance Committee and as a member of the CHS Foundation Board of Trustees.
−Removed: He is a member of Montana Stock Growers Association, Montana Grain Growers Association, Montana Farm Bureau Federation, Montana Farmers Union and Montana Council of Co-ops.
−Removed: He holds a bachelor's degree in agricultural production from Montana State University.
−Removed: Malesich's principal occupation has been farming for more than five years.
−Removed: He raises Angus cattle, wheat, malt barley and hay near Dillon, Montana.
Perry Meyer has been a member of the CHS Board of Directors since 2014.
5 unchanged sentences
Meyer's principal occupation has been farming for more than five years.
−Removed: He operates a family farm, raising corn, soybean and hogs near New Ulm, Minnesota.
+Added: He operates a family farm, raising corn, soybeans and hogs near New Ulm, Minnesota.
Steve Riegel, Assistant Secretary-Treasurer, has been a member of the CHS Board of Directors since 2006.
−Removed: Riegel serves as the assistant secretary-treasurer of the Board and chair of the Executive Committee.
+Added: Riegel serves as the assistant secretary-treasurer of the Executive Committee of the Board.
He is also a member of the Governance and Capital committees.
5 unchanged sentences
Since 2017, Mr.
−Removed: Schurr has served as chair of the Board and chair of the Executive Committee.
−Removed: He serves on the Blackhawk Bank and Trust board and audit and loan committees and on the Silos and Smokestacks National Heritage Area board.
+Added: Schurr has served as chair of the Executive Committee of the Board.
+Added: He serves on the Blackhawk Bank and Trust board and audit and loan committees and previously served on the Silos and Smokestacks National Heritage Area board.
He holds a bachelor's degree in agricultural business with a minor in economics from Iowa State University.
6 unchanged sentences
Throener's principal occupation has been farming for more than five years.
−Removed: Throener and his wife raise corn, soybeans, alfalfa and cattle near Cogswell, North Dakota.
+Added: He and his wife raise corn, soybeans, alfalfa and cattle near Cogswell, North Dakota.
+Added: Cortney Wagner has been a member of the CHS Board of Directors since 2020.
+Added: She is a member of the Governance Committee and the CHS Foundation Board of Trustees.
+Added: Wagner serves on the board of the Montana Council of Cooperatives.
+Added: She holds a real estate license and has served as a trust associate at 1st National Bank and Trust Company.
+Added: She earned an associate of arts degree from Williston State College and attended the University of North Dakota, majoring in business finance and psychology.
+Added: Wagner's principal occupation has been farming for more than five years.
+Added: She is a first-generation cattle and hay producer based near Hardin, Montana.
Director Elections and Voting
6 unchanged sentences
• The individual must reside in the region from which he or she is to be elected.
−Removed: Table of Content s
• The individual must be an active farmer or rancher.
2 unchanged sentences
Region Incumbent
−Removed: Region 1 (Minnesota) Scott Cordes
−Removed: Region 1 (Minnesota) Perry Meyer
−Removed: Region 2 (Montana, Wyoming) Open Seat
−Removed: Region 3 (North Dakota) Jon Erickson
−Removed: Region 5 (Connecticut, Delaware, Illinois, Indiana, Kentucky, Ohio, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Wisconsin) Tracy Jones
−Removed: Region 7 (Alabama, Arkansas, Florida, Georgia, Iowa, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee) Daniel Schurr
−Removed: Region 8 (Colorado, Kansas, Nebraska, New Mexico, Oklahoma, Texas) Clinton J.
+Added: Region 1 (Minnesota) David Johnsrud
+Added: Region 3 (North Dakota) Steve Fritel
+Added: Region 4 (South Dakota) David Kayser
+Added: Region 6 (Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, Washington) Russell Kehl
+Added: Region 8 (Colorado, Kansas, Nebraska, New Mexico, Oklahoma, Texas) David Beckman
Voting rights, including those in regard to director elections, arise by virtue of membership in CHS, not because of ownership of any equity or debt instruments;
5 unchanged sentences
Richard Dusek 57 Executive Vice President, CHS Country Operations
−Removed: Darin Hunhoff 50 Executive Vice President, Energy and Processing
+Added: Darin Hunhoff 51 Executive Vice President, CHS Energy
+Added: John Griffith 52 Executive Vice President, Ag Business and CHS Hedging
Olivia Nelligan 46 Executive Vice President and Chief Financial Officer
−Removed: James Zappa 56 Executive Vice President and General Counsel
−Removed: David Black 54 Senior Vice President, Enterprise Strategy and Chief Information Officer
−Removed: John Griffith 51 Senior Vice President, CHS Global Grain Marketing and CHS Hedging, LLC
+Added: Brandon Smith 41 Executive Vice President and General Counsel
+Added: David Black 55 Senior Vice President, Chief Strategy Officer and Chief Information Officer
Gary Halvorson 48 Senior Vice President, CHS Agronomy
6 unchanged sentences
Debertin was executive vice president and chief operating officer for processing at CHS.
−Removed: From 2010 to 2017, he served as executive vice president and chief operating officer of Energy and Foods where he led energy, transportation and processing and food ingredients at CHS.
−Removed: Debertin serves as board chair for Ventura Foods and serves on the board of directors for Securian Financial.
+Added: From 2010 to 2017, he served as executive vice president and chief operating officer of Energy and Foods where he led energy, transportation and processing at CHS.
+Added: Debertin serves as board chair for Ventura Foods and as vice chair of the National Council of Farmer Cooperatives.
+Added: He also serves on the board of directors for Securian Financial.
He earned a bachelor's degree in economics from the University of North Dakota and a master of business administration degree from the University of Wisconsin - Madison.
4 unchanged sentences
Prior to leading our retail business, Mr.
−Removed: Dusek held vice president roles in our grain marketing and agronomy divisions.
+Added: Dusek held roles as vice president in our grain marketing and agronomy divisions.
He earned a bachelor of science degree in agricultural economics from North Dakota State University and he is a graduate of the Harvard Business School Advanced Management Program.
−Removed: Table of Content s
−Removed: Darin Hunhoff has been executive vice president, Energy and Processing since May 2017.
+Added: Darin Hunhoff has been executive vice president, CHS Energy, since May 2017.
He leads CHS energy operations including refineries, pipelines and terminals, refined fuels, propane, lubricants and transportation.
−Removed: He also leads processing and food ingredients at CHS, which includes our soybean and canola oilseed crushing and refining operations, ethanol production platform and sunflower business.
−Removed: In addition, he oversees the CHS Cooperative Resources group, which provides leadership development and strategic planning services to local cooperatives.
−Removed: Hunhoff serves on the board of directors for Ardent Mills.
+Added: In addition, he oversees CHS Strategic Sourcing, the company's enterprisewide strategic sourcing initiative.
+Added: Hunhoff serves on the board of directors for Ardent Mills, LLC.
He joined CHS more than 25 years ago as a petroleum specialist.
−Removed: He has also been chief strategy officer for CHS and has spent several years in energy leadership roles, including time as senior vice president of refined fuels and vice president of propane.
+Added: He has also been chief strategy officer for
+Added: CHS and has spent several years in energy leadership roles, including time as senior vice president of refined fuels and vice president of propane.
He earned a bachelor's degree in marketing and business management from Southwest Minnesota State University.
Olivia Nelligan is the executive vice president and chief financial officer for CHS, joining the organization in January 2020.
−Removed: She is responsible for accounting, treasury, credit and finance activities across CHS and was recently appointed as chair of the CHS Retirement Plan Committee.
+Added: She is responsible for accounting, treasury, credit and finance activities across CHS and chairs the CHS Retirement Plan Committee.
Before joining CHS, Ms.
8 unchanged sentences
She holds a bachelor's degree in civil law and a higher diploma in business and financial information systems from University College Cork, Ireland, and a master of business administration degree from the University of Wisconsin - Madison.
−Removed: She is a Fellow Chartered Accountant and an associate member of the Institute of Taxation in Ireland.
−Removed: James Zappa has been executive vice president and general counsel for CHS since April 2015.
+Added: She is a Fellow Chartered Accountant and an associate member of the Institute of Taxation in Ireland and serves on the board of directors of the Boys Scouts of America Northern Star Council.
+Added: Brandon Smith has been executive vice president and general counsel for CHS since March 2021.
He provides counsel to CHS leadership and the Board of Directors on company strategy, government affairs, corporate governance, corporate compliance, federal securities reporting and compliance, and disclosure and investor communications.
−Removed: Zappa also oversees CHS internal audit, CHS enterprise sustainability initiatives, and the CHS Foundation and CHS Community Giving functions.
−Removed: Zappa serves as a director for Ventura Foods.
−Removed: Zappa has informed CHS that as part of his career transition planning, he will transition from his current role as executive vice president and general counsel to another leadership role at CHS, effective with the appointment of a new general counsel.
−Removed: He previously worked at 3M Company for 15 years in various legal and leadership roles including vice president, associate general counsel and chief compliance officer, and vice president, associate general counsel, international operations.
−Removed: Prior to joining 3M, he worked for UnitedHealth Group and for the law firm Dorsey & Whitney.
−Removed: He earned a juris doctor degree from the University of Minnesota Law School, a master's degree in communication arts and sciences from the University of Southern California, and a bachelor’s degree from Drake University.
−Removed: David Black has been senior vice president, enterprise strategy, and chief information officer for CHS since April 2018.
−Removed: He leads enterprise strategy, CHS global information technology, marketing and communications, and facilities.
−Removed: He is responsible for the strategy, implementation, delivery and operation of information technology for all CHS businesses worldwide.
−Removed: He also serves as a director for Ventura Foods.
−Removed: He joined CHS six years ago.
−Removed: He previously worked at Monsanto Company where he served as vice president, information technology, overseeing all aspects of information technology for its global commercial businesses.
+Added: Smith also oversees the CHS internal audit department.
+Added: He previously worked at Tenneco Inc., a multinational industrial company based in Lake Forest, Illinois, for 13 years in various legal and leadership roles, most recently as senior vice president, general counsel and corporate secretary.
+Added: Prior to joining Tenneco, Mr.
+Added: Smith worked for the Kirkland & Ellis LLP law firm in Chicago, Illinois.
+Added: He earned a juris doctor degree from Cornell Law School and a bachelor's degree in business management from Hiram College.
+Added: David Black has been senior vice president, enterprise transformation, and chief information officer for CHS since April 2018.
+Added: He leads enterprise transformation and strategy, CHS global information technology, marketing and communications and facilities.
+Added: He leads enterprise transformation efforts, driving ongoing review of company assets, strategic infrastructure and decision-making on opportunities for profitable growth.
+Added: He leads strategy, implementation, delivery and operation of information technology for all CHS businesses worldwide and oversees the company's owner and employee communications, advertising and public relations and CHS sustainability programs.
+Added: He also serves on the board of Ventura Foods and is former board chair of Ag Gateway, a nonprofit consortium of 300-plus businesses, which strives to promote, enable and expand e-business in agriculture.
+Added: He joined CHS in 2014.
+Added: Black previously worked at Monsanto Company, where he served as vice president, information technology, overseeing all aspects of information technology for its global commercial businesses.
During his 20 years with Monsanto, he also served as vice president, corporate strategy, and president, Monsanto Agro-Services, LLC.
Black earned a bachelor's degree in computer science from Tarkio College.
−Removed: John Griffith has been senior vice president, CHS Global Grain Marketing and CHS Hedging since April 2018.
−Removed: He leads CHS global grain marketing operations and renewable fuels trading, supply chain management and risk management, including freight, currency, execution and trade finance.
−Removed: Griffith serves on the MGEX and the North American Export Grain Association boards.
−Removed: He also serves as the board chair for CHS Hedging, a commodities brokerage subsidiary of CHS.
+Added: John Griffith has been executive vice president, Ag Business and CHS Hedging since January 2021.
+Added: He leads CHS global grain and processing operations and renewable fuels trading, supply chain management and risk management, including freight, currency, execution and trade finance.
+Added: Griffith chairs the North American Export Grain Association board and previously was a member of the MGEX board.
+Added: He also serves as board chair for CHS Hedging, a commodities brokerage subsidiary of CHS.
He worked for CHS early in his career as a grain merchandiser and rejoined CHS at a leadership level in January 2013.
−Removed: Since that time, he has held various leadership roles within global grain marketing including vice president, grain marketing North America.
+Added: Since that time, he has held various leadership roles within global grain marketing, including senior vice president, CHS Global Grain Marketing and CHS Hedging, and vice president, grain marketing North America.
He earned a bachelor’s degree from St.
John's University and a master of business administration degree from Rockhurst University.
−Removed: Gary Halvorson has been senior vice president, CHS Agronomy since April 2018.
−Removed: He leads the our agronomy business and its comprehensive supply chain encompassing diverse assets and capabilities to distribute commodity and specialty fertilizers, seed, crop protection and precision ag technology and services to agricultural retailers.
−Removed: Halvorson is on the board of CF Nitrogen and has served on the Agricultural Retailers Association board of directors and the National FFA Sponsors board.
−Removed: He joined CHS more than 20 years ago and held various leadership roles with CHS at locations in North Dakota before becoming general manager for CHS Ag Services in Warren, Minnesota.
+Added: Gary Halvorson has been senior vice president, enterprise customer development, since September 2021.
+Added: He is responsible for efforts across all businesses to deliver a focused and coordinated customer experience for owners and customers.
+Added: He also oversees marketing and sales functions for CHS wholesale and retail agronomy businesses and agronomy product development, as well as CHS Cooperative Resources, which provides strategic business and talent planning for cooperatives.
+Added: Halvorson represents CHS on the board of directors for The Fertilizer Institute (TFI) and has served on the National FFA Sponsors Board and the Agricultural Retailers Association board of directors.
+Added: He joined CHS more than 20 years ago.
+Added: Most recently, he led the CHS agronomy business.
+Added: Prior to that, Mr.
+Added: Halvorson held various leadership roles with CHS at locations in North Dakota before becoming general manager for CHS Ag Services in Warren, Minnesota.
Halvorson also served as vice president of farm supply for CHS Country Operations.
He earned a bachelor's degree in business from Concordia University.
−Removed: Table of Content s
Mary Kaul-Hottinger has been senior vice president, human resources, for CHS since September 2018.
−Removed: Kaul-Hottinger sets direction and strategy for human resources with a focus on helping us attract, develop and retain high-performing and diverse employees.
+Added: Kaul-Hottinger sets direction and strategy for human resources with a focus on helping us attract, develop and retain high-performing
+Added: and diverse employees.
+Added: She also oversees CHS Community Giving, which provides giving and volunteer programs to strengthen hometown communities in collaboration with local cooperatives.
Prior to joining CHS, she was vice president, human resources, for Ecolab's global businesses and supported business units with more than 30,000 employees.
She previously served in human resources leadership roles at General Mills and Pillsbury.
−Removed: Kaul-Hottinger has a bachelor's degree in business administration from the University of St.
−Removed: SECTION 16(a) REPORTS
+Added: Kaul-Hottinger holds a bachelor's degree in business administration from the University of St.
+Added: DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10% of any class of our preferred stock to file initial reports of ownership and reports of changes in ownership with the SEC.
Such executive officers, directors and greater than 10% beneficial owners are required by the regulations of the SEC to furnish us with copies of all Section 16(a) reports they file.
−Removed: Based solely upon a review of copies of reports on Forms 3 and 4 and amendments thereto filed electronically with the SEC during, and reports on Form 5 and amendments thereto filed electronically with the SEC with respect to the fiscal year ended August 31, 2020, and based further upon written representations received by us with respect to the need to file reports on Form 5, no persons filed late reports required by Section 16(a) of the Exchange Act during fiscal 2020.
+Added: Based solely upon a review of copies of reports on Forms 3 and 4 and amendments thereto filed electronically with the SEC during, and reports on Form 5 and amendments thereto filed electronically with the SEC with respect to the fiscal year ended August 31, 2021, and based further upon written representations received by us with respect to the need to file reports on Form 5, except for Ms.
+Added: Wagner, who filed one late Form 3 relating to her election as a director, no persons filed late reports required by Section 16(a) of the Exchange Act during fiscal 2021.
CODE OF ETHICS
24 unchanged sentences
Members of the Board of Directors, including the Audit Committee, also operate large commercial enterprises requiring expertise in all areas of management, including financial oversight.
−Removed: Table of Content s
EXECUTIVE COMPENSATION
5 unchanged sentences
Olivia Nelligan Executive Vice President and Chief Financial Officer
−Removed: Darin Hunhoff Executive Vice President, Energy and Processing
−Removed: James Zappa Executive Vice President and General Counsel
+Added: Darin Hunhoff Executive Vice President, Energy
Richard Dusek Executive Vice President, CHS Country Operations
−Removed: Angela Olsonawski Senior Vice President, Corporate Treasurer and Former Interim Chief Financial Officer
−Removed: Timothy Skidmore Former Executive Vice President and Chief Financial Officer
−Removed: Changes in Named Executive Officers during fiscal 2020 include the retirement of Timothy Skidmore, our former executive vice president and chief financial officer, who retired from CHS on December 31, 2019, and who ceased to serve as our executive vice president and chief financial officer on November 7, 2019.
−Removed: Angela Olsonawski, our senior vice president and corporate treasurer, served as our interim chief financial officer and principal financial officer from November 7, 2019, until Olivia Nelligan became our executive vice president and chief financial officer on January 29, 2020.
−Removed: CHS is an organization that exists to create connections to empower agriculture, for the benefit of our producer and local cooperative owners and the communities in which our owners and we live and operate.
+Added: John Griffith Executive Vice President, Ag Business and CHS Hedging
+Added: James Zappa Senior Vice President Legal & Government Affairs, Deputy General Counsel
+Added: CHS is an organization that exists to create connections to empower agriculture, for the benefit of our producer and local cooperative owners and the communities in which we and our owners live and operate.
CHS compensation programs are designed to attract, retain and reward the executives who carry out this purpose and align them around attainment of CHS long-term strategies and short-term priorities.
12 unchanged sentences
The compensation program links executive compensation directly to our annual and long-term financial performance.
−Removed: A significant
−Removed: Table of Content s
−Removed: portion of each executive's compensation depends on meeting financial goals and a smaller portion is linked to individual performance objectives.
+Added: A significant portion of each executive's compensation depends on meeting financial goals and a smaller portion is linked to individual performance objectives.
The Governance Committee reviews our executive compensation policies each year with respect to the correlation between executive compensation and the creation of member-owner value, as well as the competitiveness of our executive compensation programs.
−Removed: The Governance Committee, with input from a third-party consultant if necessary, determines what, if any, changes are appropriate to our executive compensation programs, including the incentive plan goals applicable to our Named Executive Officers under the incentive compensation plans to which they and other employees are eligible.
−Removed: A third-party consultant is chosen and hired directly by the Executive Committee to provide guidance regarding market-competitive levels of base pay, annual variable pay and long-term incentive pay, as well as market-competitive allocations between base pay, annual variable pay and long-term incentive pay for our CEO.
+Added: The Governance Committee, with input from a third-party consultant if necessary, determines what, if
+Added: any, changes are appropriate to our executive compensation programs, including the incentive plan goals applicable to our Named Executive Officers under the incentive compensation plans to which they and other employees are eligible.
+Added: A third-party consultant is chosen and hired directly by the Executive Committee of our Board of Directors ("Executive Committee") to provide guidance regarding market-competitive levels of base pay, annual variable pay and long-term incentive pay, as well as market-competitive allocations between base pay, annual variable pay and long-term incentive pay for our CEO.
The data is shared with our Board of Directors, which makes final decisions regarding our CEO's base pay, annual incentive pay and long-term incentive pay, as well as the allocation of compensation between base pay, annual incentive pay and long-term incentive pay.
14 unchanged sentences
Comparator Group
−Removed: Archer-Daniels-Midland Conagra Brands Kinder Morgan Mosaic
−Removed: Bunge ConocoPhillips Koch Industries Nutrien
−Removed: CF Industries Dean Foods Land O'Lakes Valero Energy
−Removed: Cargill HollyFrontier Marathon Petroleum Williams Companies
+Added: ADM Conagra Brands Kinder Morgan Mosaic
+Added: Bunge Conoco Phillips Koch Industries Nutrien
+Added: CF Industries General Mills Land O'Lakes Valero Energy
+Added: Cargill Holly Frontier Marathon Petroleum Williams Companies
+Added: Effective September 1, 2021, we removed Conoco Phillips from our comparator group and added Phillips 66.
+Added: The latter is a refining and fuel distribution company, which is a more relevant comparator for our energy business.
The emphasis of our executive compensation package is weighted more on variable pay through annual variable pay and long-term incentive awards.
2 unchanged sentences
We target the market median compensation for base pay, target total cash and target total direct compensation, and the 75th percentile for total direct compensation when we achieve above-market performance.
−Removed: For fiscal 2020, base pay was slightly above the market median, total cash compensation was generally consistent with the market median and total direct compensation was above the market median.
−Removed: The total cash compensation was generally consistent with the market median because, although actual earned annual variable pay awards were below target performance, this was offset by the payments made with respect to the 2017 Retention Awards, as described in greater detail below.
−Removed: If the payments with respect to the 2017 Retention Awards had not been made in fiscal 2020, total cash compensation would have
−Removed: Table of Content s
−Removed: been below the market median.
−Removed: The above market median total direct compensation occurred because long-term incentive awards for the fiscal 2018-2020 performance period were achieved at the superior level of performance, and because of the payments with respect to the 2017 Retention Award.
−Removed: Even if the payments with respect to the 2017 Retention Award had not been made in fiscal 2020, total direct compensation would still have been above the market median.
+Added: For fiscal 2021, base pay was slightly below the market median, total cash compensation was above the market median and total direct compensation was slightly above the market median.
+Added: The total cash compensation was above the market median because actual earned annual variable pay awards were above target performance.
+Added: The slightly above market median total direct compensation occurred because long-term incentive awards for the fiscal 2019-2021 performance period were achieved at the maximum level of performance.
The following table presents a more detailed breakout of each compensation element:
11 unchanged sentences
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
−Removed: Health & Welfare Benefits Medical, dental, vision, life insurance and short-term disability benefits generally available to all full-time employees.
+Added: Health and Welfare Benefits Medical, dental, vision, life insurance and short-term disability benefits generally available to all full-time employees.
Certain officers, including our Named Executive Officers, also are eligible for executive long-term disability benefits • With the exception of executive long-term disability benefits, these benefits are a part of our broad-based employee total rewards program designed to attract and retain quality employees
2 unchanged sentences
The structure of our executive compensation package is focused on a suitable mix of base pay, annual variable pay and long-term incentive awards to encourage executive officers and employees to strive to achieve goals that benefit our member-owners' interests over the long term and to better align our programs with general market practices.
−Removed: Table of Content s
Fiscal 2021 Executive Compensation Mix at Target
−Removed: The charts below illustrate the mix of base salary, annual variable pay at target performance (2020 Plan) and long-term incentive compensation at target performance (2018-2020 Plan) for fiscal 2020 for our CEO and the other Named Executive Officers as a group.
−Removed: Base salaries of our Named Executive Officers represent a fixed form of compensation paid on a semi-monthly basis.
+Added: The charts below illustrate the mix of base salary, annual variable pay at target performance (2021 Performance
+Added: Period) and long-term incentive compensation at target performance (2019-2021 Plan) for fiscal 2021 for our CEO and the other Named Executive Officers as a group.
+Added: Base salaries of our Named Executive Officers represent a fixed form of compensation paid on a semimonthly basis.
The base salaries are generally set at the median level of market data collected through our benchmarking process against other equivalent positions of comparable companies.
4 unchanged sentences
Our CEO is responsible for this process for the other Named Executive Officers.
−Removed: In fiscal 2020, the Executive Committee was responsible for this process for our CEO.
−Removed: Debertin received a 3.0% base salary increase effective January 1, 2020.
−Removed: Our Board of Directors approved the increase to maintain a competitive pay position to market.
−Removed: Dusek and Ms.
−Removed: Olsonawski also received base salary increases of 3.0%, 3.0%, 2.0% and 3.0%, respectively, in fiscal 2020 to ensure their base salaries were commensurate with their responsibilities, skills, contributions and competitive pay range.
−Removed: Skidmore did not receive an increase to base salary in fiscal 2020.
−Removed: In light of the COVID-19 pandemic and its potential impact on our business and industry, and the economy in general, and to respond to changing conditions resulting from the COVID-19 pandemic, based upon the recommendation of the Executive Committee and the request of Mr.
+Added: The Executive Committee is responsible for this process for our CEO.
+Added: In light of the COVID-19 pandemic and its ongoing impacts on our business and industry, and the economy in general and to respond to changing conditions resulting from the COVID-19 pandemic, based upon the recommendation of the Executive Committee and the request of Mr.
Debertin, our Board of Directors approved a decision that neither Mr.
−Removed: Debertin nor any of the other Named Executive Officers would receive a base salary increase for calendar year 2021.
+Added: Debertin nor any of the other Named Executive Officers would receive, and none of our Named Executive Officers did receive, a base salary increase for calendar year 2021 as part of the annual merit increase process.
This decision aligns with our decision to not implement merit increases to base salaries in calendar year 2021 for any of our salaried employees.
+Added: However, when John Griffith was promoted to Executive Vice President, Ag Business and CHS Hedging on January 1, 2021, he received a base salary increase as part of the promotion.
+Added: In addition, as part of his career transition plan, Mr.
+Added: Zappa, our former executive vice president and general counsel, ceased to serve in that position and became our Senior Vice President Legal & Government Affairs on March 22, 2021, when Brandon B.
+Added: Smith became our executive vice president and general counsel.
+Added: Upon assuming his new position, Mr.
+Added: Zappa’s base salary was reduced by 26%.
Annual Variable Pay
2 unchanged sentences
Target AVP award levels were set with reference to competitive market compensation levels and were intended to motivate our executives by providing annual variable pay awards for the achievement of predetermined goals.
−Removed: Our AVP program for fiscal 2020 was based on enterprise-level financial performance and specific management business objectives with actual payout dependent on achieving predetermined enterprise-level financial performance goals and individual performance goals.
−Removed: The financial performance components included ROIC goals for CHS at the enterprise level.
−Removed: The threshold, target and maximum ROIC goals
−Removed: Table of Content s
−Removed: for fiscal 2020 are set forth in the table below.
+Added: Our AVP program for fiscal 2021 was based on enterprise-level financial performance and specific management business objectives with the actual payout dependent on achieving predetermined enterprise-level financial performance goals and individual performance goals.
+Added: The financial
+Added: performance components included ROIC goals for CHS at the enterprise level.
+Added: The threshold, target and maximum ROIC goals for fiscal 2021 are set forth in the table below.
The management business objectives include individual performance against specific goals relating to subjects such as business profitability, execution of strategic initiatives or talent acquisition, development and retention.
18 unchanged sentences
The weighting of goals for the other Named Executive Officers for fiscal 2021 was 70% CHS total company ROIC and 30% individual goals.
−Removed: ROIC results were 5.1% for fiscal 2020.
−Removed: In connection with Ms.
−Removed: Nelligan's appointment as our executive vice president and chief financial officer, we entered into a letter agreement with her on January 7, 2020 (the "Nelligan Letter Agreement").
−Removed: The Nelligan Letter Agreement, among other things, requires that we give Ms.
−Removed: Nelligan a full year of credit for the fiscal 2020 AVP, rather than prorate her award for the time that she was employed by us during fiscal 2020.
−Removed: In connection with Mr.
−Removed: Skidmore's retirement from CHS on December 31, 2019, we entered into a letter agreement with him on July 26, 2019 ("Skidmore Letter Agreement").
−Removed: The Skidmore Letter Agreement, among other things, provided for the payment to Mr.
−Removed: Skidmore of a pro rata portion of his annual variable pay award under the Annual Variable Pay Plan for 2020, based on the number of days he was employed by us during fiscal 2020, calculated at the target level for both the enterprise-level financial performance goals and individual performance goals components of the fiscal 2020 AVP.
+Added: ROIC results for fiscal year 2021 were 6.2 %.
+Added: Despite the significant and enduring operating and leadership challenges experienced in fiscal year 2021 and that we continue to experience, Mr.
+Added: Debertin, the other Named Executive Officers, and our other CHS employees responded with timely decisions and actions to adjust to those challenging business conditions and consistently execute to meet the needs of our customers and member-owners.
Annual variable pay awards that will be or have been paid under the Annual Variable Pay Plan for fiscal 2021 for the Named Executive Officers are as follows:
3 unchanged sentences
Darin Hunhoff 1,157,313
−Removed: James Zappa 381,606
Richard Dusek 1,074,988
−Removed: Angela Olsonawski 121,741
−Removed: Timothy Skidmore 236,709
−Removed: Table of Content s
+Added: John Griffith 1,009,528
+Added: James Zappa 877,813
Profit Sharing
−Removed: Each Named Executive Officer (other than Mr.
−Removed: Skidmore) was eligible to participate in our Profit Sharing Plan applicable to other employees.
+Added: Each Named Executive Officer was eligible to participate in our Profit-Sharing Plan, which is also applicable to other employees.
The purpose of the Profit-Sharing Plan is to provide a direct link between employee pay and our profitability.
5 unchanged sentences
In fiscal 2021 ROIC results were 6.2%.
−Removed: Accordingly, each Named Executive Officer (other than Mr.
−Removed: Skidmore) earned a 1.5% award under the Profit Sharing Plan.
+Added: Accordingly, each Named Executive Officer earned a 4.3% award under the Profit Sharing Plan.
Long-Term Incentive Plans
−Removed: Each Named Executive Officer (other than Mr.
−Removed: Skidmore) was eligible to participate in our Long-Term Incentive Plan ("LTIP").
+Added: Each Named Executive Officer was eligible to participate in the CHS Inc.
+Added: Long-Term Incentive Plan ("LTIP"), which was renamed the CHS Inc.
+Added: Executive Long-Term Incentive Plan, effective September 1, 2021.
The purpose of the LTIP is to align long-term results with long-term performance goals, encourage our Named Executive Officers to maximize long-term value for our member-owners and retain key executives.
9 unchanged sentences
Debertin, to improve our competitive position to market.
−Removed: For the 3-year LTIP period ending in fiscal 2020, the LTIP performance measure was based upon our ROIC during the period.
+Added: For the three-year LTIP period ending in fiscal 2021, the LTIP performance measure was based upon our ROIC during the period.
As stated above, ROIC is a measurement of how efficiently we use capital and the level of returns on that capital and is calculated by dividing adjusted net operating profit after tax by funded debt plus equity.
12 unchanged sentences
Below threshold <4.9% 0%
−Removed: Table of Content s
−Removed: Actual ROIC performance for the fiscal 2018-2020 performance period w as 7.9%.
+Added: Business conditions in the agriculture and energy industries were highly variable during the 2019-2021 performance period, which included ROIC performance well above the target performance level during the period before the coronavirus pandemic began and ROIC performance slightly above t he maximum performance level from the beginning of the pandemic period through the end of fiscal 2021.
+Added: In particular, both our Ag and Energy segments experienced significant changes in business conditions and were subject to external economic forces that caused our ROIC performance to vary significantly during each year (9.6% in 2019;
+Added: 5.1% in 2020;
+Added: 6.2% in 2021).
+Added: Actual ROIC performance for the fiscal 2019-2021 performance period was 6.93%.
LTIP payments for the fiscal 2019-2021 LTIP for the Named Executive Officers are as follows:
3 unchanged sentences
Darin Hunhoff 1,349,938
−Removed: James Zappa 2,400,820
Richard Dusek 1,257,928
−Removed: Angela Olsonawski 770,664
−Removed: Timothy Skidmore —
+Added: John Griffith 743,627
+Added: James Zappa 1,185,542
Details for the fiscal 2021 awards associated with the fiscal 2021-2023 LTIP performance period are provided in the "2021 Grants of Plan-Based Awards" table.
−Removed: Skidmore's employment ended prior to the end of each of the fiscal 2018-2020 and fiscal 2019-2021 performance periods, he was not eligible to earn any compensation under the 2018-2020 LTIP and will not be eligible to earn any compensation under the 2019-2021 LTIP.
Other Compensation
−Removed: To preserve key leadership continuity and bench strength, as well as a total direct compensation opportunity amount that is competitive to market, in November 2017, the Board of Directors approved a retention award ("2017 Retention Award") for certain of our senior officers, including each of the Named Executive Officers who were both active participants in the 2015-2017 LTIP and active employees on the date the 2017 Retention Award was approved.
−Removed: The potential award value was the percentage of base salary used for the 2015-2017 LTIP awards at the threshold level, based on the participant’s job level as of the date the 2017 Retention Award was granted, and was earned only if the participant continued active employment through January 1, 2020, or met the limited pro ration criteria provided in the 2017 Retention Award.
−Removed: Payments for the 2017 Retention Award for the Named Executive Officers are as follows:
−Removed: Name Retention Award Payment
−Removed: Jay Debertin $ 862,500
−Removed: Darin Hunhoff 287,500
−Removed: James Zappa 270,710
−Removed: Richard Dusek 58,570
−Removed: Angela Olsonawski 50,250
−Removed: Timothy Skidmore 340,975
−Removed: Nelligan was not an active participant in the 2015-2017 LTIP or actively employed by us on the date the 2017 Retention Award was approved, she was not granted a 2017 Retention Award.
−Removed: In addition, for the same reasons that our Board of Directors approved the 2017 Retention Award, in April 2019, our Board of Directors approved another potential retention incentive award ("2018 Retention Award") for certain of our senior officers, including each of the Named Executive Officers who were both active participants in the 2016-2018 LTIP and active employees on the date the 2018 Retention Award was approved.
+Added: To preserve key leadership continuity and bench strength, as well as a total direct compensation opportunity amount that is competitive to market, our Board of Directors approved a potential retention incentive award ("2018 Retention Award") for certain of our senior officers, including each of the Named Executive Officers who were both active participants in the 2016-2018 LTIP and active employees on the date the 2018 Retention Award was approved.
The potential award value is equal to the percentage of base salary used for the 2016-2018 LTIP awards at the target level, based on the participant’s job level as of August 31, 2018, multiplied by the participant’s base salary as of August 31, 2018.
1 unchanged sentence
However, in light of the COVID-19 pandemic and its potential impact on our fiscal 2021 business and financial performance, and the economy in general, and based upon the recommendation of the Governance Committee and the request of Messrs.
−Removed: Debertin, Dusek, Hunhoff, Zappa and our other eligible senior officers, in November 2020, our Board of Directors modified the terms of the Strategic Leadership Team 2018 Retention Award to provide that it will only be earned if the applicable participant continues active employment through January 1, 2022, except that, if the applicable participant’s employment ends voluntarily or involuntarily for a reason unrelated to misconduct between January 1,
−Removed: Table of Content s
−Removed: 2021, and January 1, 2022, the participant will earn and be paid the 2018 Retention Award.
−Removed: Notwithstanding the foregoing, pursuant to the Skidmore Letter Agreement, Mr.
−Removed: Skidmore received a pro rata portion of the 2018 Retention Award in the amount of $170,191 within 60 days of his retirement on December 31, 2019.
+Added: Debertin, Dusek, Griffith, Hunhoff, Zappa and our other eligible senior officers, in November 2020, our Board of Directors modified the terms of the Strategic Leadership Team 2018 Retention Award to provide that it will only be earned if the applicable participant continues active employment through January 1, 2022, except that, if the applicable participant's employment ends voluntarily or involuntarily for a reason unrelated to misconduct between January 1, 2021, and January 1, 2022, the participant will earn and be paid the 2018 Retention Award.
Nelligan was not an active participant in the 2016-2018 LTIP or actively employed by us on the date the 2018 Retention Award was approved, she was not granted a 2018 Retention Award.
23 unchanged sentences
16 years or more 7% 14%
−Removed: Table of Content s
Mid-Career Pay Credits
32 unchanged sentences
The Deferred Compensation Plan allows eligible Named Executive Officers to voluntarily defer receipt of up to 75% of their base salary and up to 100% of their annual variable pay.
−Removed: The election must occur prior to the beginning of the calendar year in which the compensation will be earned.
+Added: The election must occur prior to the beginning of the calendar year in which the compensation will be paid.
During the year ended August 31, 2021, all of the Named Executive Officers were eligible to participate in the Deferred Compensation Plan.
1 unchanged sentence
Nelligan, Mr.
−Removed: Olsonawski and Mr.
−Removed: Skidmore participated in the elective portion of the Deferred Compensation Plan.
+Added: Dusek and Mr.
+Added: Griffith participated in the elective portion of the Deferred Compensation Plan.
Benefits from the Deferred Compensation Plan are primarily funded in a rabbi trust, with a balance as of August 31, 2021, of $136.1 million.
Benefits from the plan do not qualify for special tax treatment under the Internal Revenue Code.
−Removed: Table of Content s
−Removed: Health & Welfare Benefits
+Added: Health and Welfare Benefits
Like our other employees, each of the Named Executive Officers is entitled to receive benefits under our comprehensive health and welfare program.
2 unchanged sentences
Named Executive Officers and their dependents may participate in our medical plan on the same basis as other eligible full-time employees.
−Removed: The plan provides each Named Executive Officer an opportunity to choose a level of coverage and coverage options with varying deductibles and co-pays to pay for hospitalization, physician and prescription drug expenses.
+Added: The plan provides each Named Executive Officer an opportunity to choose a level of coverage and coverage options with varying deductibles and copays to pay for hospitalization, physician and prescription drug expenses.
The cost of this coverage is shared by us and the covered Named Executive Officer.
24 unchanged sentences
These are provided as part of an overall total rewards package that strives to be competitive with comparable companies and retain individuals who are critical to us.
−Removed: Table of Content s
Incentive Compensation Recovery Policy
−Removed: We have an Incentive Compensation Recovery Policy ("Recovery Policy") that applies to our current and former employees who are or were identified by us as an "officer" pursuant to Rule 16a-1(f) under the Securities Exchange Act of 1934 and The Nasdaq Stock Market listing standards ("Covered Employee").
+Added: We have an Incentive Compensation Recovery Policy ("Recovery Policy") that applies to our current and former employees who are or were identified by us as an "officer" pursuant to Rule 16a-1(f) under the Securities Exchange Act of 1934 and The Nasdaq Stock Market LLC ("The Nasdaq") listing standards ("Covered Employee").
The Recovery Policy provides that, in the event of a required revision of our previously issued financial statements to reflect the correction of one or more errors that are material to those financial statements, we will require reimbursement or forfeiture of any excess incentive compensation received by any Covered Employee during the three completed fiscal years immediately preceding the date on which we determine that we are required to prepare an accounting restatement.
11 unchanged sentences
On May 22, 2017, Mr.
−Removed: Debertin was elected as our President and CEO, and in connection therewith entered into the Employment Agreement with us on that date.
−Removed: On November 5, 2020, we entered into the Employment Agreement Amendment with Mr.
+Added: Debertin was elected as our President and CEO, and in connection therewith entered into an employment agreement with us on that date (the "Employment Agreement").
+Added: On November 5, 2020, we entered into an amendment to the Employment Agreement ("Employment Agreement Amendment No.
Debertin, pursuant to which the term of the Employment Agreement was extended to August 31, 2023, provided that, pursuant to the terms of the Employment Agreement, beginning on August 31, 2023, and on each August 31 thereafter, the Employment Agreement will automatically renew for an additional one-year period, unless either party notifies the other in writing, at least 120 days in advance of the relevant renewal date, of its intent not to renew the agreement for the additional one-year period.
−Removed: Pursuant to the terms of the Employment Agreement, Mr.
+Added: On November 3, 2021, we and Mr.
+Added: Debertin entered into another amendment ("Employment Agreement Amendment No.
+Added: 2") to the Employment Agreement, pursuant to which the terms of Mr.
+Added: Debertin’s long-term incentive compensation opportunity were amended as set forth below.
+Added: The amended long-term incentive compensation opportunity contemplated by Employment Agreement Amendment No.
+Added: 2 will apply for each three-year performance period that begins on or after September 1, 2021.
+Added: Pursuant to the terms of the Employment Agreement, as amended by Employment Agreement Amendment No.
Debertin is entitled to, among other things:
• An annual base salary of $1,150,000, subject to increase by our Board of Directors from time to time;
−Removed: • A target annual incentive compensation award of 150% of his base salary with a maximum potential annual incentive compensation award of 300% of his base salary, based on achievement of performance goals set by our Board of Directors;
−Removed: • A target long-term incentive compensation award of 150% of his average base salary during the three-year performance period applicable to that award opportunity, with a maximum superior performance potential long-term incentive compensation award of 500% of his average base salary during the three-year performance period applicable to that award.
−Removed: Table of Content s
+Added: • A target annual incentive compensation opportunity of 150% of his annual base salary with a maximum opportunity equal to twice the target opportunity, based on achievement of performance goals set by our Board of Directors;
+Added: • A target long-term incentive compensation award opportunity of 300% of his average annual base salary over each three-year performance period applicable to that award opportunity, with a threshold opportunity equal to one-half of the target opportunity and a maximum opportunity equal to twice the target opportunity.
+Added: Prior to the execution of Employment Agreement Amendment No.
+Added: 2, the Employment Agreement provided Mr.
+Added: Debertin with a target long-term incentive compensation award opportunity of 150% of his average annual base salary over each three-year performance period applicable to that award opportunity with a maximum opportunity equal to three and one-third times his target award opportunity.
The Employment Agreement provides that in the event of a restatement of our financial results due to material noncompliance with financial reporting requirements, if our Board of Directors determines in good faith that any compensation paid (or payable but not yet paid) to Mr.
2 unchanged sentences
Debertin would be entitled if we terminated his employment without cause or, if he terminated his employment for "good reason" are described below under "Post Employment."
−Removed: Nelligan's compensation is set forth in the Nelligan Letter Agreement.
+Added: Nelligan's compensation is set forth in a letter agreement we entered into with her January 7, 2020 (the "Nelligan Letter Agreement").
The Nelligan Letter Agreement provides Ms.
Nelligan with an initial annual base salary of $570,000 and a hiring bonus of $200,000 (which bonus amount is the amount to be paid to Ms.
−Removed: Nelligan, after applicable tax withholding), $100,000 of which was paid as a lump sum within 30 days of January 29, 2020 (the "First Hiring Bonus Payment"), and $100,000 of which will be paid as a lump sum within 30 days following one year of employment with us (the "Second Hiring Bonus Payment").
+Added: Nelligan, after applicable tax withholding), $100,000 of which was paid as a lump sum within 30 days of January 29, 2020, and $100,000 of which was paid as a lump sum within 30 days following one year of employment with us (the "Second Hiring Bonus Payment").
In the event Ms.
−Removed: Nelligan voluntarily terminates, resigns or otherwise ends her relationship with us without good reason within one year of her start date, the Nelligan Letter Agreement provides that she will reimburse us at the rate of 1/12th of the First Hiring Bonus Payment for each uncompleted month in such first year of employment.
−Removed: Similarly, in the event Ms.
Nelligan voluntarily terminates, resigns or otherwise ends her relationship with us without good reason during the second year of her employment with us, the Nelligan Letter Agreement provides that she will reimburse us at the rate of 1/12th of the total amount of the Second Hiring Bonus Payment for each uncompleted month in such second year of employment.
The Nelligan Letter Agreement provides that Ms.
−Removed: Nelligan's target award for purposes of the Annual Variable Pay Plan will be equal to 115% of her annual base salary on August 31 of each year, and, as stated above, requires us to give Ms.
+Added: Nelligan's target award for purposes of the Annual Variable Pay Plan will be equal to 115% of her annual base salary on August 31 of each year, and required us to give Ms.
Nelligan a full year of credit for the fiscal 2020 Annual Variable Pay Plan, rather than prorate her award for the time that she was employed by us during fiscal 2020.
1 unchanged sentence
Nelligan would be entitled if we terminated her employment without cause or if she terminated her employment for "good reason" are described below under "Post Employment."
−Removed: In connection with Mr.
−Removed: Skidmore's retirement from CHS on December 31, 2019, we entered into the Skidmore Letter Agreement with Mr.
−Removed: The Skidmore Letter Agreement, as well as the payments to which Mr.
−Removed: Skidmore was entitled to thereunder in connection with his retirement, are described below under "Post Employment."
Tax Considerations
5 unchanged sentences
We are not required to, and do not, conduct shareholder advisory votes on executive compensation under Section 14A of the Securities Exchange Act of 1934.
−Removed: Table of Content s
Summary Compensation Table
Name and Principal Position Year Salary
−Removed: (1)(3)(4) Non-Equity
+Added: (1)(2)(3) Nonequity
Incentive Plan
7 unchanged sentences
Executive Vice President and Chief Financial Officer 2021 570,000 100,000 1,866,304 129,853 259,825 2,925,982
−Removed: Darin Hunhoff
−Removed: Executive Vice President, Energy and Processing 2020 567,630 — 3,236,871 563,056 167,292 4,534,849
2020 339,076 100,000 912,080 37,620 90,511 1,479,287
−Removed: 2018 520,000 — 1,219,000 56,050 38,457 1,833,507
−Removed: James Zappa Executive Vice President and General Counsel 2020 535,500 — 3,053,136 305,866 153,021 4,047,523
+Added: Darin Hunhoff
+Added: Executive Vice President, Energy 2021 573,195 — 2,507,251 265,462 54,494 3,400,402
2020 567,630 — 3,236,871 563,056 167,292 4,534,849
3 unchanged sentences
2019 513,696 — 1,360,928 465,830 142,030 2,482,484
−Removed: Angela Olsonawski
−Removed: Senior Vice President, Corporate Treasurer and Former Interim Chief Financial Officer 2020 357,204 25,000 942,655 296,788 69,996 1,691,643
−Removed: Timothy Skidmore
−Removed: Former Executive Vice President and Chief Financial Officer 2020 278,196 — 577,684 153,815 945,910 1,955,605
+Added: John Griffith
+Added: Executive Vice President, Ag Business and CHS Hedging 2021 491,274 — 1,753,155 127,620 37,146 2,409,195
+Added: James Zappa Senior Vice President Legal & Government Affairs, Deputy General Counsel 2021 478,404 35,000 2,063,355 176,770 67,161 2,820,690
2020 535,500 — 3,053,136 305,866 153,021 4,047,523
1 unchanged sentence
(1) Information on Ms.
−Removed: Nelligan and Ms.
−Removed: Olsonawski includes compensation beginning in fiscal 2020, the first year in which they became Named Executive Officers.
−Removed: (2) Salary for Mr.
−Removed: Skidmore includes base pay and accrued paid time off that was paid upon his departure.
−Removed: (3) Includes hiring bonus payment to Ms.
+Added: Nelligan and Mr.
+Added: Griffith includes compensation beginning in fiscal 2020 and fiscal 2021, respectively, the first year in which they became a Named Executive Officer.
+Added: (2) Includes hiring bonus payments to Ms.
Nelligan of $200,000.
−Removed: (4) Includes $25,000 recognition bonus paid to Ms.
−Removed: Olsonawski for performing the role of interim chief financial officer.
+Added: (3) Includes $35,000 cash bonus for Mr.
+Added: Zappa's strong performance in co-leading our global COVID-19 response initiative since the beginning of the pandemic in March 2020.
(4) Amounts include retention awards earned in fiscal 2020, annual variable pay awards and long-term incentive awards.
+Added: To preserve key leadership continuity and bench strength, as well as a total direct compensation opportunity amount that was competitive to market, in November 2017, the Board of Directors approved a retention award for certain of our senior officers, including each of the Named Executive Officers who were both active participants in the 2015-2017 LTIP and active employees on the date the retention award was approved.
+Added: The potential award value was the percentage of base salary used for the 2015-2017 LTIP awards at the threshold level, based on the participant's job level as of the date the retention award was granted, and was earned only if the participant continued active employment through January 1, 2020, or met the limited pro ration criteria provided in the retention award.
The actual retention award value was as follows in fiscal 2020:
1 unchanged sentence
Hunhoff, $287,500;
−Removed: Zappa, $270,710;
Dusek, $58,570;
−Removed: Olsonawski, $50,250;
−Removed: Skidmore, $340,975.
+Added: Zappa, $270,710.
+Added: Nelligan was not an active participant in the 2015-2017 LTIP or actively employed by us on the date the retention award was approved, she was not granted a retention award.
+Added: Griffith was not a Named Executive Officer in fiscal 2020.
The actual annual variable pay award value was as follows in fiscal 2021, 2020 and 2019, respectively:
Debertin, $3,357,300,$1,173,439 and $3,713,064;
−Removed: Nelligan, $402,248 (Ms.
−Removed: Nelligan was not a Named Executive Officer in fiscal 2018 or 2019);
+Added: Nelligan, $1,150,862 and $402,248 (Ms.
+Added: Nelligan was not a Named Executive Officer in fiscal 2019);
Hunhoff, $1,157,313, $404,503 and $1,279,950;
−Removed: Zappa, $381,606, $1,207,500 and $1,086,591;
Dusek, $1,074,988, $375,729 and $1,110,515;
−Removed: Olsonawski, $121,741 (Ms.
−Removed: Olsonawski was not a Named Executive Officer in fiscal 2018 or 2019);
−Removed: Skidmore, $236,709 (per the Skidmore Letter Agreement), $1,202,064 and $1,115,085.
−Removed: These annual variable pay award values exclude awards in the following amounts with respect to fiscal 2018 that our Board of Directors reduced at the voluntary request of the Named Executive Officers in connection with our restated financial statements:
−Removed: Debertin, $62,411;
−Removed: Zappa, $63,410;
−Removed: Dusek, $6,213;
−Removed: Skidmore, $73,213.
+Added: Griffith, $1,009,528 (Mr.
+Added: Griffith was not a Named Executive Officer in fiscal 2019 or 2020);
+Added: Zappa, $877,813, $381,606 and $1,207,500.
+Added: Zappa's award value for fiscal 2021 reflects a pro-rated reduction in his target annual incentive opportunity from 115% of base salary to 87% of base salary, effective upon assuming his new position on March 22, 2021.
The actual long-term incentive award value was as follows in fiscal 2021, 2020 and 2019, respectively:
Debertin, $3,872,541, $6,152,095 and $1,692,275;
−Removed: Nelligan $509,832 (Ms.
−Removed: Nelligan was not a Named Executive Officer in fiscal 2018 or 2019);
+Added: Nelligan, $715,442 and $509,832 (Ms.
+Added: Nelligan was not a Named Executive Officer in fiscal 2019);
Hunhoff, $1,349,938, $2,544,868 and $351,304;
−Removed: Zappa, $2,400,820, $331,220 and $0;
Dusek, $1,257,928, $2,379,008 and $250,413;
−Removed: Olsonawski $770,664 (Ms.
−Removed: Olsonawski was not a Named Executive Officer in fiscal 2018 or 2019);
−Removed: Skidmore, $0, $403,187 and $0.
−Removed: Table of Content s
−Removed: Skidmore's retirement occurred prior to him achieving 10 years of service, he was not eligible to vest and forfeited his LTIP payment for the fiscal 2017-2019 LTIP.
−Removed: In addition, because Mr.
−Removed: Skidmore's employment ended prior to the end of the fiscal 2018-2020 performance period, he was not eligible to earn any compensation under the fiscal 2018-2020 LTIP.
−Removed: For a description of the payment that will be made to Mr.
−Removed: Skidmore under the Skidmore Letter Agreement in recognition of, among other things, earned but unvested long-term incentive compensation that has been forfeited due to the end of Mr.
−Removed: Skidmore's employment prior to vesting, please see "Post Employment" below.
+Added: Griffith, $743,627 (Mr.
+Added: Griffith was not a Named Executive Officer in fiscal 2019 or 2020);
+Added: Zappa, $1,185,542, $2,400,820 and $331,220.
+Added: Zappa's award value for
+Added: fiscal 2021 reflects a pro-rated reduction in his target long-term incentive opportunity from 115% of base salary to 87% of base salary, effective upon assuming his new position on March 22, 2021.
(5) This column represents both changes in pension value and above-market earnings on deferred compensation.
2 unchanged sentences
Debertin, $504,012, $1,086,570 and 1,245,229;
−Removed: Nelligan, $37,484 (Ms.
−Removed: Nelligan was not a Named Executive Officer in fiscal 2018 or 2019);
+Added: Nelligan, $118,911 and $37,484 (Ms.
+Added: Nelligan was not a Named Executive Officer in fiscal 2019);
Hunhoff, $224,788, $552,962 and $607,801;
−Removed: Zappa, $305,866, $285,992 and $68,928;
Dusek, 182,389, $394,289 and $460,972;
−Removed: Olsonawski, $287,689 (Ms.
−Removed: Olsonawski was not a Named Executive Officer in fiscal 2018 or 2019);
−Removed: Skidmore, $132,576, $305,723 and $89,520.
+Added: Griffith, $123,725 (Mr.
+Added: Griffith was not a Named Executive Officer in fiscal 2019 or 2020);
+Added: Zappa, $141,547, $305,866 and $285,992.
Above-market earnings on deferred compensation represent earnings exceeding 120% of the Federal Reserve long-term rate as determined by the Internal Revenue Service ("IRS") on applicable funds and was as follows in fiscal 2021, 2020 and 2019, respectively:
Debertin, $312,872, $181,221 and $62,259;
−Removed: Nelligan, $136 (Ms.
−Removed: Nelligan was not a Named Executive Officer in fiscal 2018 or 2019);
+Added: Nelligan, $10,942 and $136 (Ms.
+Added: Nelligan was not a Named Executive Officer in fiscal 2019);
Hunhoff, $40,674, $10,094 and $3,332;
−Removed: Zappa, $0, $0 and $0;
Dusek, $89,952, $21,142 and $4,858;
−Removed: Olsonawski, $9,099 (Ms.
−Removed: Olsonawski was not a Named Executive Officer in fiscal 2018 or 2019);
−Removed: Skidmore, 21,239$, $10,310 and $16,595.
+Added: Griffith, $3,895 (Mr.
+Added: Griffith was not a Named Executive Officer in fiscal 2019 or 2020);
+Added: Zappa, $35,223, $0 and $0.
(6) Includes fiscal 2021 employer contributions to the Deferred Compensation Plan:
Debertin, $36,654;
+Added: Nelligan, $36,654;
Hunhoff, $34,496;
−Removed: Zappa, $131,863;
Dusek, $31,033;
−Removed: Olsonawski, $47,111.
−Removed: (8) For fiscal 2020, includes executive LTD, travel accident insurance, executive physical, financial planning and health assessment for Mr.
−Removed: (9) For fiscal 2020, includes executive LTD, travel accident insurance, executive physical and financial planning for Mr.
−Removed: Hunhoff and Mr.
+Added: Griffith, $17,367;
+Added: Zappa, $31,740.
(7) Includes fiscal 2021 employer contribution to the 401(k) Plan:
2 unchanged sentences
Hunhoff $14,368;
−Removed: Zappa, $15,750;
Dusek, $13,696;
−Removed: Olsonawski, $18,502;
−Removed: Skidmore $1,845.
−Removed: (11) For fiscal 2020, includes moving and relocation expenses, a legal fee reimbursement and aggregate gross-ups for taxes of $64,124, in each case, in accordance with the Nelligan Letter Agreement, as well as a nonqualified 401(k) and Pension Match Make-up contribution, executive LTD, travel accident insurance and health assessment for Ms.
−Removed: (12) For fiscal 2020, includes $152,004 nonqualified 401(k) Match Make-up and Profit Sharing payment, $790,173 in payments pursuant to the Skidmore Letter Agreement, executive LTD, financial planning and travel accident insurance for Mr.
+Added: Griffith, $14,329;
+Added: Zappa, $14,193.
+Added: (8) For fiscal 2021, includes executive LTD, travel accident insurance, financial planning and health assessment for Mr.
+Added: Debertin, Mr.
+Added: Hunhoff and Mr.
+Added: (9) For fiscal 2021, includes moving and relocation expenses of $34,274 and aggregate gross-ups for taxes of $161,462, in each case, in accordance with the Nelligan Letter Agreement, as well as a nonqualified 401(k) and Pension Match Make-up contribution, executive LTD, travel accident insurance and executive physical for Ms.
+Added: (10) For fiscal 2021, includes executive LTD, travel accident insurance, executive physical and financial planning for Mr.
+Added: (11) For fiscal 2021, includes gross-up for taxes on cash bonus for co-leading our global COVID-19 response initiative , as well as a nonqualified 401(k) and Pension Match Make-up contribution, executive LTD, travel accident insurance and financial planning for Mr.
Agreements with Named Executive Officers
On May 22, 2017, we entered an Employment Agreement with Mr.
−Removed: Debertin, our President and Chief Executive Officer, which was amended by the Employment Agreement Amendment on November 5, 2020.
−Removed: The Employment Agreement, as amended by the Employment Agreement Amendment, supersedes all previous agreements we had with Mr.
+Added: Debertin, our President and Chief Executive Officer, which was amended by Employment Agreement Amendment No.
+Added: 1 on November 5, 2020 and Employment Agreement Amendment No.
+Added: 2 on November 3, 2021.
+Added: The Employment Agreement, as amended by Employment Agreement Amendment No.
+Added: 1 and Employment Agreement Amendment No.
+Added: 2, supersedes all previous agreements we had with Mr.
The Employment Agreement was entered into in order to clearly define the obligations of the parties thereto with respect to employment matters, as well as the compensation and benefits to be provided to Mr.
Debertin upon termination of employment.
−Removed: Other details of the Employment Agreement, as amended by the Employment Agreement Amendment, and Mr.
+Added: Other details of the Employment Agreement, as amended by Employment Agreement Amendment No.
+Added: 1 and Employment Agreement Amendment No.
Debertin's employment arrangement with us are described in "Compensation Discussion and Analysis" above.
−Removed: The severance payments to which Mr.
−Removed: Zappa would be entitled under his employment term sheet with us if we terminated his employment without cause or if he terminated his employment for "good reason" are described below under the heading "Post Employment." Other details of Mr.
−Removed: Zappa's employment arrangement with us are described in "Compensation Discussion and Analysis" above.
The severance payments to which Ms.
1 unchanged sentence
Nelligan's employment arrangement with us are described in "Compensation Discussion and Analysis" above.
−Removed: Table of Content s
−Removed: In connection with Mr.
−Removed: Skidmore's retirement from CHS on December 31, 2019, we entered into the Skidmore Letter Agreement with Mr.
−Removed: Details of the Skidmore Letter Agreement are described below under the heading "Post Employment."
+Added: The severance payments to which Mr.
+Added: Zappa would be entitled under his employment term sheet with us if we terminated his employment without cause or if he terminated his employment for "good reason" are described below under the heading "Post Employment." Other details of Mr.
+Added: Zappa's employment arrangement with us are described in the "Compensation Discussion and Analysis" above.
2021 Grants of Plan-Based Awards
8 unchanged sentences
327,750 655,500 2,622,000
−Removed: 327,750 655,500 2,622,000
Darin Hunhoff 9/9/2020 (1)
1 unchanged sentence
329,576 659,151 2,636,605
−Removed: James Zappa 9/5/2019 (1)
+Added: Richard Dusek 9/9/2020 (1)
306,142 612,284 1,224,568
306,142 612,284 2,449,137
−Removed: Richard Dusek 9/5/2019 (1)
+Added: John Griffith 9/9/2020 (1)(3)
130,301 260,601 521,202
9/9/2020 (2)(3)
−Removed: Angela Olsonawski 9/5/2019 (1)
130,301 260,601 1,042,404
287,500 575,000 1,150,000
−Removed: Timothy Skidmore 9/5/2019 (1)
287,500 575,000 2,300,000
+Added: James Zappa 9/9/2020 (1)
+Added: 249,989 499,979 999,957
+Added: 165,249 330,498 1,321,992
(1) Represents range of possible awards under our fiscal 2021 Annual Variable Pay Plan.
−Removed: Pursuant to Mr.
−Removed: Skidmore's letter agreement, a prorated portion of his annual variable pay award under the Annual Variable Pay Plan for 2020, based on the number of days he was employed by us during fiscal 2020, and calculated at the target level, was paid to Mr.
(2) Represents range of possible awards under our LTIP for the fiscal 2021-2023 performance period.
3 unchanged sentences
Awards are measured over a three-year period and vest over an additional 28-month period.
+Added: (3) These grants were terminated when Mr.
+Added: Griffith was promoted to Executive Vice President, Ag Business and CHS Hedging on January 1, 2021.
+Added: (4) Represents range of possible awards under our fiscal 2021 Annual Variable Pay Plan with respect to grants made to Mr.
+Added: Griffith on January 1, 2021, at the time of his promotion to Executive Vice President, Ag Business and CHS Hedging.
+Added: (5) Represents range of possible awards under our LTIP for the fiscal 2021-2023 performance period with respect to grants made to Mr.
+Added: Griffith on January 1, 2021, at the time of his promotion to Executive Vice President, Ag Business and CHS Hedging.
The material terms of annual variable pay and long-term incentive awards that are disclosed in this table, including the vesting schedule, are described under "Compensation Discussion and Analysis" above.
−Removed: Table of Content s
2021 Pension Benefits
−Removed: Name Plan Name Number of Years of Credited Service Present Value of Accumulated Benefits Payments During Last Fiscal Year
−Removed: (Years) (Dollars) (Dollars)
+Added: Name Plan Name Number of Years of Credited Service Present Value of Accumulated Benefits
+Added: (Years) (Dollars)
Jay Debertin (1)
5 unchanged sentences
SERP 29.2500 1,446,720
−Removed: James Zappa Pension Plan 4.3333 162,726 —
−Removed: SERP 4.3333 721,382 —
Richard Dusek (1)
1 unchanged sentence
SERP 33.0833 1,047,145
−Removed: Angela Olsonawski Pension Plan 18.0000 516,387 —
+Added: John Griffith Pension Plan 20.1667 365,692
SERP 20.1667 439,422
−Removed: Timothy Skidmore Pension Plan 7.0000 192,170 —
+Added: James Zappa Pension Plan 5.3333 195,322
SERP 5.3333 830,333
13 unchanged sentences
All Named Executive Officers' retirement benefits at normal retirement age will be equal to their accumulated benefits under the Pension Plan and the SERP, as described under "Compensation Discussion and Analysis" above.
−Removed: Table of Content s
2021 Nonqualified Deferred Compensation
10 unchanged sentences
Darin Hunhoff 202,252 2,576,725 999,789 — 7,039,188
−Removed: James Zappa 603,750 459,984 283,232 — 2,921,221
Richard Dusek 112,719 2,407,667 158,973 — 4,659,102
−Removed: Angela Olsonawski 311,095 164,751 121,517 — 1,787,839
−Removed: Timothy Skidmore 652,531 — 141,009 5,274,488 —
+Added: John Griffith 49,881 1,034,895 245,290 — 2,083,809
+Added: James Zappa — 2,430,132 672,259 — 6,023,612
(1) Includes contributions into the Deferred Compensation Plan by the Named Executive Officers representing deferred salary and deferred annual incentive pay.
3 unchanged sentences
Nelligan, $91,200;
−Removed: Olsonawski, $118,485;
−Removed: Skidmore, $46,499.
+Added: Griffith, $17,897.
Another portion of the contributions reported in this column are included within the amount reported as 2020 nonequity incentive plan compensation in the "Nonequity Incentive Plan Compensation" column of the Summary Compensation Table.
2 unchanged sentences
Debertin, $1,056,095;
−Removed: Nelligan, $0;
−Removed: Zappa, $603,750;
+Added: Hunhoff, $202,252;
Dusek, $112,719;
−Removed: Olsonawski, $192,610;
−Removed: Skidmore, $606,032.
+Added: Griffith, $31,984.
(2) Contributions are made by us into the Deferred Compensation Plan on behalf of Named Executive Officers.
−Removed: Amounts include LTIP contribution made in early fiscal 2020 based on fiscal 2017-2019 results, those contributions are also included in the amounts reported in the 2019 “Nonequity” column of the Summary Compensation Table:
+Added: Amounts include LTIP contributions made in early fiscal 2021 based on fiscal 2018-2020 results, which contributions are also included in the amounts reported in the 2020 "Non-Equity Incentive Plan Compensation" column of the Summary Compensation Table:
Debertin, $6,152,095;
+Added: Nelligan, $509,832;
Hunhoff, $2,544,868;
−Removed: Zappa, $331,220;
Dusek, $2,379,008;
−Removed: Olsonawski, $118,507.
+Added: Griffith, $1,018,856;
+Added: Zappa, $2,400,820.
Also included are retirement contributions made in early fiscal 2021 based on fiscal 2020 results for Profit Sharing and 401(k) match on amounts exceeding IRS compensation limits.
−Removed: Those contributions, and applicable tax withholding, are also included in amounts reported in the 2020 All Other Compensation column of the Summary Compensation Table:
+Added: Those contributions, and applicable tax withholding, are also included in amounts reported in the "All Other Compensation" column of the Summary Compensation Table for fiscal 2021:
Debertin, $107,730;
+Added: Nelligan, $36,654;
Hunhoff, $34,496;
−Removed: Zappa, $128,764;
Dusek $31,033;
−Removed: Olsonawski, $46,247.
+Added: Griffith, $17,367;
+Added: Zappa, $31,740.
(3) The amounts in this column include the change in value of the balance, not including contributions made by or on behalf of the Named Executive Officer.
4 unchanged sentences
Dusek, $89,952;
−Removed: Olsonawski, $9,099;
−Removed: Skidmore, $21,239.
+Added: Griffith, $3,895;
+Added: Zappa, $35,223.
(4) Amounts vary in accordance with individual pension plan provisions and voluntary employee deferrals and withdrawals.
7 unchanged sentences
The notional investment returns for fiscal 2021 were as follows:
−Removed: Vanguard Prime Money Market, 1.15%;
+Added: Vanguard Federal Money Market, .02%;
Vanguard Life Strategy Income, 5.83%;
9 unchanged sentences
For a discussion of the material terms and conditions of the Deferred Compensation Plan, see "Compensation Discussion and Analysis" above.
−Removed: Table of Content s
Post Employment
13 unchanged sentences
Zappa's employment term sheet with us provides for severance in the event his employment is terminated by us without cause or by him with "good reason" in the amount of one year of base pay and prorated annual variable pay, payable as a lump sum.
−Removed: In connection with Mr.
−Removed: Skidmore's retirement from CHS on December 31, 2019, we entered into the Skidmore Letter Agreement with Mr.
−Removed: The Skidmore Letter Agreement includes confidentiality, cooperation, nondisparagement and other customary provisions, as well as one-year covenants regarding nonsolicitation and noncompetition.
−Removed: The Skidmore Letter Agreement also provides for certain payments to Mr.
−Removed: Skidmore, including the following:
−Removed: • A lump sum payment in an amount equal to one year of Mr.
−Removed: Skidmore's base salary, which amount was $619,982, plus the pro rata portion of annual variable compensation earned by Mr.
−Removed: Skidmore for fiscal 2020, calculated based on Mr.
−Removed: Skidmore's target level opportunity of 115% of his base salary;
−Removed: • A $340,975 payment representing the 2017 Retention Award grant that fully vested on January 1, 2020;
−Removed: • A pro rata portion of the 2018 Retention Award in the amount of $170,191, which was paid within 60 days of Mr.
−Removed: Skidmore's retirement on December 31, 2019;
−Removed: • Payment for 30 days of paid time off;
−Removed: • $700,000 in recognition of earned but unvested long-term incentive compensation that was forfeited due to the end of Mr.
−Removed: Skidmore's employment prior to vesting, to offset medical and dental benefits coverage for 12 months and one year of financial planning expense reimbursement, and for agreeing to be subject to the one-year noncompetition and nonsolicitation covenants following his departure from employment.
−Removed: Payment of this amount will be made within 30 days after December 31, 2020.
−Removed: This payment is subject to Mr.
−Removed: Skidmore's ongoing compliance with obligations that continue under the Skidmore Letter Agreement including, without limitation, the noncompetition and nonsolicitation covenants.
−Removed: Dusek and Ms.
−Removed: Olsonawski are covered by a broad-based employee severance program that provides a lump sum payment of two weeks of pay per year of service with a 12-month cap.
−Removed: The severance pay that the Named Executive Officers (other than Mr.
−Removed: Skidmore, whose actual severance payments pursuant to the Skidmore Letter Agreement are described above) would have been entitled to had they been terminated by us
−Removed: Table of Content s
−Removed: without cause or terminated their employment for "good reason," in each case, as of the last business day of fiscal 2020 is as follows:
+Added: During fiscal 2021, Messrs.
+Added: Hunhoff, Dusek and Griffith were covered by a broad-based employee severance program that provided a lump sum payment of two weeks of pay per year of service with a 12-month cap.
+Added: Effective September 1, 2021, that program was amended to provide executives, including Messrs.
+Added: Hunhoff, Dusek and Griffith with a lump sum payment of 26 weeks of pay, plus one week of pay per year of service, with a 12-month cap.
+Added: The severance pay that the Named Executive Officers would have been entitled to had they been terminated by us without cause or terminated their employment for "good reason," in each case, as of the last business day of fiscal 2021 is as follows:
Jay Debertin (1)(2)
1 unchanged sentence
Darin Hunhoff 573,195
−Removed: James Zappa (3)
Richard Dusek 532,421
−Removed: Angela Olsonawski 360,706
+Added: John Griffith 153,846
+Added: James Zappa (3)
(1) Includes the value of health and welfare insurance based on current monthly rates.
6 unchanged sentences
Except as otherwise set forth above, the method of payment would be a lump sum.
−Removed: Named Executive Officers not covered by the Skidmore Letter Agreement or employment agreements are not offered any special postretirement health and welfare benefits that are not offered to other similarly situated (i.e., age and service) salaried employees.
+Added: Named Executive Officers not covered by employment agreements are not offered any special postretirement health and welfare benefits that are not offered to other similarly situated (i.e., age and service) salaried employees.
The following pay ratio and supporting information compares the annual total compensation of our employees other than our CEO (including full-time, part-time, seasonal and temporary employees) and the annual total compensation of our CEO, as required by Section 953(b) of Dodd-Frank.
5 unchanged sentences
To determine the pay ratio, we took the following steps:
−Removed: • We determined that as of June 1, 2020, the determination date, our employee population consisted of approximately 10,402 individuals, 9,878 of which were located in the United States and 524 of which were located outside of the United States.
+Added: • We determined that as of June 1, 2021, the determination date, our employee population consisted of approximately 9,627 individuals, 9,041 of whom were located in the United States and 586 of whom were located outside of the United States.
This population consisted of our full-time, part-time, temporary and seasonal employees.
From this population, we excluded 341 individuals who were located in the following countries:
−Removed: Argentina (48), Brazil (234), Bulgaria (4), China (37), Hungary (12), Jordan (1), Paraguay (13), Republic of Korea (3), Romania (60), Russia (2), Serbia (5), Singapore (18), Spain (13), Switzerland (20), Taiwan (3), Ukraine (35) and Uruguay (8).
+Added: Argentina (44), Bulgaria (4), Canada (6), China (32), Hungary (17), Italy (3), Paraguay (3), Romania (10), Russia (108), Serbia (2), Singapore (5), South Korea (18), Spain (20), Switzerland (18), Taiwan (3), Ukraine (39) and Uruguay (9).
Excluding these employees, our employee population that was used to calculate the pay ratio consisted of 9,286 individuals.
1 unchanged sentence
We then applied a statistical sampling methodology to produce a sample of employees who were paid within a 5% range of the median regular, bonus and overtime wages (or their equivalents) and selected an employee from within that group as our median employee.
−Removed: Table of Content s
• Once we identified our median employee, we calculated that employee's annual total compensation for fiscal 2021 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K promulgated by the SEC, resulting in annual total compensation of $70,056.
3 unchanged sentences
Director Compensation
−Removed: Our Board of Directors met eight times during the fiscal year ended August 31, 2020.
+Added: Our Board of Directors met seven times during the fiscal year ended August 31, 2021.
Each director (other than the chair of the Board) is a member of two Board Committees.
1 unchanged sentence
For fiscal 2021, each director was provided annual compensation of $85,000, paid in 12 monthly payments, plus actual expenses and travel allowance, with the chair of the Board receiving additional annual compensation of $24,000, the first vice chair and the secretary-treasurer each receiving additional annual compensation of $6,000, all Board committee chairs receiving additional annual compensation of $9,000 and members of the Executive Committee who are not eligible for other premiums receiving additional annual compensation of $3,000.
−Removed: These amounts, as well as the minimum retirement plan account contribution for the fiscal years 2020-2022 performance period under the Deferred Compensation Plan, were determined after taking into account the analysis included in the market study of director compensation conducted for the Governance Committee by Mercer (US), a global compensation consulting firm, in fiscal 2019.
+Added: These amounts, as well as the minimum retirement plan account contribution for the fiscal years 2021-2023 performance period under the Deferred Compensation Plan discussed in greater detail below, were determined after taking into account the analysis included in the market study of director
+Added: compensation conducted for the Governance Committee by Mercer (U.S.), a global compensation consulting firm, in fiscal 2019.
+Added: During fiscal 2021, in order to continue to align our director compensation with market practices, our Board of Directors approved increasing annual director compensation from $85,000 to $89,000, effective January 1, 2022.
Each director also receives a per diem of $500 plus actual expenses and travel allowance for each day spent at meetings other than regular Board meetings and the CHS Annual Meeting and a per diem of $250 for conference calls other than regular Board meetings.
12 unchanged sentences
Under no event will the benefit payment be payable for less than 120 months.
−Removed: Payment shall be made to the retired director's beneficiary in the event of the director's death before 120 payments are made.
−Removed: Prior to 2005, directors could elect to receive their benefit as an actuarial equivalent lump sum.
−Removed: To comply with IRS requirements, directors were required in 2005 to make a one-time irrevocable election whether to receive their accrued benefit in a lump sum or a monthly annuity upon retirement.
−Removed: If the lump sum was elected, the director would commence benefits upon expiration of his or her Board term.
+Added: Payment will be made to the retired director's beneficiary in the event of the director's death before 120 payments are made.
Effective August 31, 2011, future accruals under the director retirement plan were frozen.
2 unchanged sentences
Directors serving as of September 1, 2005, and their eligible dependents, are eligible to participate in our medical, life, dental, vision and hearing plans.
−Removed: We will pay 100% of the medical premium for the director and their eligible dependents while active on the Board.
+Added: We will pay 100% of the medical premium for the director and the eligible director's dependents while the director is active on the Board.
Term life insurance cost is paid by the director.
−Removed: Retired directors and their dependents are eligible to
−Removed: Table of Content s
−Removed: continue medical and dental insurance with the premiums paid by us after they leave the Board, until they are eligible for Medicare.
+Added: Retired directors and their dependents are eligible to continue medical and dental insurance with the premiums paid by us after they leave the Board, until they are eligible for Medicare.
In the event a director's coverage ends due to death or Medicare eligibility, we will pay 100% of the premium for the eligible spouse and eligible dependents until the spouse reaches Medicare age or upon death, if earlier.
New directors elected on or after December 1, 2006, and their eligible dependents, are eligible to participate in our medical, dental, vision and hearing plans.
−Removed: We will pay 100% of the premium for the director and eligible dependents while active on the Board.
+Added: We will pay 100% of the premium for the director and eligible dependents while the director is active on the Board.
In the event a director leaves the Board prior to Medicare eligibility, premiums will be shared based on the following schedule:
8 unchanged sentences
During fiscal year 2021, the following directors deferred Board fees pursuant to the Deferred Compensation Plan:
+Added: Clemensen, Mr.
Erickson, Mr.
Johnsrud, Mr.
−Removed: Meyer and Mr.
+Added: Throener and Ms.
Benefits are funded in a rabbi trust.
6 unchanged sentences
$25,000 (Target) 5.9% ROIC
−Removed: $12,500 (Minimum) 3.7% ROIC
−Removed: *The amount credited for the fiscal years 2018-2020 performance period was required to be mathematically interpolated if results occurred between the superior performance, maximum, target and minimum ROIC performance levels.
−Removed: If results had been less than the minimum ROIC performance level, the amount credited would have been $12,500.
−Removed: The actual ROIC performance for the fiscal years 2018-2020 performance period was 7.9% and, accordingly, $100,000 was credited to each director's retirement plan account under the Deferred Compensation Plan except $75,000 was credited for newly elected directors, Mr.
−Removed: Clemensen and Mr.
+Added: $12,500 (Threshold) 4.9% ROIC
+Added: *The amount credited for the fiscal years 2019-2021 performance period was required to be mathematically interpolated if results occurred between the superior performance, maximum, target and threshold ROIC performance levels.
+Added: If results had been less than the threshold ROIC performance level, no amount would have been credited .
+Added: Actual ROIC performance for the fiscal years 2019-2021 performance period was 6.93 % and, accordingly, $51,500 was credited to each director's retirement plan account under the Deferred Compensation Plan except $38,625 was credited for newly elected director, Ms.
This amount is reflected in the Director Compensation Table.
6 unchanged sentences
If results are less than the target ROIC performance level, the amount credited will be $25,000.
−Removed: Table of Content s
For the fiscal years 2021-2023 three-year cycle, the amount that will be credited to each director's retirement plan account under the Deferred Compensation Plan will be as follows:
5 unchanged sentences
If results are less than the target ROIC performance level, the amount credited will be $25,000.
+Added: For the fiscal years 2022-2024 three-year cycle, the amount that will be credited to each director's retirement plan account under the Deferred Compensation Plan will be as follows:
+Added: Amount Credited* ROIC Performance
+Added: $100,000 (Superior performance) 9.7% ROIC
+Added: $50,000 (Maximum) 7.7% ROIC
+Added: $25,000 (Target, minimum contribution amount) 6.7% ROIC
+Added: *The amount credited for the fiscal years 2022-2024 performance period will be mathematically interpolated when results occur between the superior performance, maximum and target ROIC performance levels.
+Added: If results are less than the target ROIC performance level, the amount credited will be $25,000.
Upon leaving our Board of Directors during the fiscal year, a director's credit for that partial fiscal year will be the target amount ($25,000) prorated through the end of the month in which the director departs.
6 unchanged sentences
The method used to recover the applicable excess contribution will be determined by our Board of Directors, in its sole discretion, and may include forfeiting any deferred compensation contribution made under the Deferred Compensation Plan or taking any other remedial or recovery action permitted by law.
−Removed: Table of Content s
2021 Director Compensation
4 unchanged sentences
Blew 106,000 11,602 80,870 198,472
−Removed: Dennis Carlson (4)
−Removed: 36,083 18,649 28,102 82,834
Hal Clemensen 97,750 576 67,922 166,248
8 unchanged sentences
Russell Kehl 108,500 37 74,554 183,091
−Removed: Randy Knecht 31,333 5,495 32,920 69,748
Edward Malesich 33,333 14,837 13,660 61,830
3 unchanged sentences
Kevin Throener 98,000 2 80,870 178,872
+Added: Cortney Wagner 60,167 33 38,832 99,032
(1) Of this amount, the following directors deferred the succeeding amounts to the Deferred Compensation Plan:
4 unchanged sentences
Kehl, $26,667;
−Removed: Knecht, $10,000;
Meyer, $6,000;
1 unchanged sentence
Throener, $6,182;
+Added: Wagner, $40,091.
(2) This column represents both changes in pension value and above-market earnings on deferred compensation.
2 unchanged sentences
Future accruals under the plan were frozen as of August 31, 2011, as stated above.
−Removed: Above-market earnings represent earnings exceeding 120% of the Federal Reserve long-term rate as determined by the IRS on applicable funds.
+Added: Above-market earnings represent earnings exceeding 120% of the Federal Reserve long-term rate on applicable funds as determined by the IRS.
The following directors had above-market earnings during fiscal 2021:
1 unchanged sentence
Blew, $11,602;
−Removed: Carlson, $4,740;
Clemensen, $576;
2 unchanged sentences
Farrell, $2,411;
−Removed: Fritel, $118;
+Added: Holm, $3,653;
Johnsrud, $3,080;
Kayser, $11,611;
−Removed: Knecht, $5,495;
Malesich, $14,837;
+Added: Meyer, $1,697;
Riegel, $4,069;
4 unchanged sentences
The health insurance premiums paid were less than $25,000 for each director, other than Mr.
−Removed: Blew, for whom we paid health insurance premiums of $27,824.
−Removed: All other compensation also includes fiscal 2020 director retirement plan Deferred Compensation Plan contributions of $100,000 for each director except for newly elected directors, Mr.
−Removed: Clemensen and Mr.
−Removed: Throener, $75,000;
−Removed: and for former directors Mr.
−Removed: Carlson and Mr.
−Removed: Knecht, $8,333.
−Removed: (4) Made a one-time irrevocable retirement election in 2005 to receive a lump sum benefit under the director retirement plan.
−Removed: All other directors that were first elected on or prior to August 31, 2011, will receive a monthly annuity upon retirement.
−Removed: The director retirement plan benefit was frozen as of August 31, 2011.
−Removed: Accordingly, directors who are first elected after that date are not eligible for benefits under that plan.
−Removed: Table of Content s
+Added: Throener, for whom we paid health insurance premiums of $29,060.
+Added: All other compensation also includes fiscal 2021 director retirement plan Deferred Compensation Plan contributions of $51,500 for each director except for newly elected director, Ms.
+Added: Wagner, $38,625;
+Added: and for former director, Mr.
+Added: Malesich, $ 8,333.
Compensation Committee Interlocks and Insider Participation
3 unchanged sentences
Schurr (chair), Blew (vice chair), Erickson, Kehl and Riegel, and the members of the Governance Committee were Messrs.
−Removed: Malesich (chair), Kehl (vice chair), Jones, Kayser, Riegel and Throener.
+Added: Jones (chair), Kehl (vice chair), Kayser, Riegel,
+Added: and Throener, and Ms.
During fiscal 2021, no executive officer of CHS served on the compensation committee (or other board committee performing equivalent functions) or board of directors of any other entity that had any executive officer who also served on the Executive Committee, the Governance Committee or our Board of Directors.
1 unchanged sentence
See Item 13, Certain Relationships and Related Transactions, and Director Independence , of this Annual Report on Form 10-K for directors, including Messrs.
−Removed: Erickson, Jones, Kayser, Kehl and Throener, who were a party to related-person transactions.
+Added: Erickson, Fritel, Johnsrud, Jones, Kayser, Kehl and Throener, who were a party to related-person transactions.
Compensation Committee Report
4 unchanged sentences
Governance Committee
−Removed: Edward Malesich, Chair
+Added: Tracy Jones, Chair
Kevin Throener
−Removed: Table of Content s
+Added: Cortney Wagner
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
20 unchanged sentences
Russell Kehl — * — *
−Removed: Edward Malesich — * — *
Perry Meyer (3)
2 unchanged sentences
Kevin Throener — * — *
+Added: Cortney Wagner — * — *
Named Executive Officers:
1 unchanged sentence
Richard Dusek — * — *
+Added: John Griffith — * — *
Darin Hunhoff 596 * — *
Olivia Nelligan — * — *
−Removed: Angela Olsonawski — * — *
−Removed: Timothy Skidmore (3)
James Zappa — * — *
7 unchanged sentences
To our knowledge, there is no person or group who is a beneficial owner of more than 5% of any class or series of our preferred stock.
−Removed: Table of Content s
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
4 unchanged sentences
Name Transactions with CHS Cash Patronage Dividends
−Removed: Scott Cordes $ 145,298 $ 44
Jon Erickson $ 612,012 $ 636
5 unchanged sentences
Kevin Throener 1,228,947 242
−Removed: Additionally, Kehl Farms, LLC, which is owned by our director Russell Kehl, entered into a 2020 crop inputs loan with CHS Capital for the purchase of crop inputs, seeds, supplies and fuel in March 2020 ("Kehl Loan").
−Removed: The Kehl Loan bears interest at the rate of 6.50% per annum, which is payable upon maturity in February 2021.
−Removed: The largest aggregate amount of principal outstanding under the Kehl Loan during the year ended August 31, 2020, and the balance on August 31, 2020, was $688,975.
−Removed: During the year ended August 31, 2020, no principal or interest was paid on the Kehl Loan.
−Removed: Also, in December 2019 our director David Kayser entered into a 2020 crop inputs loan with CHS Capital for the purchase of crop inputs ("Kayser Loan") with a maturity date in December 2020.
−Removed: No interest accrues or is payable under the Kayser Loan.
−Removed: The largest aggregate amount of principal outstanding under the Kayser Loan during the year ended August 31, 2020, and the balance on August 31, 2020, was $87,500.
−Removed: During the year ended August 31, 2020, no principal or interest was paid on the Kayser Loan.
−Removed: The terms of these financing arrangements were provided pursuant to financing programs widely available to our qualified customers.
+Added: Additionally, Kehl Farms, LLC, which is owned by our director Russell Kehl, entered into two 2021 crop inputs loans with CHS Capital for the purchase of crop inputs, seeds, supplies and fuel in January 2021 ("Kehl Loans").
+Added: The Kehl Loans bear interest at the rates of 6.50% and 0% per annum, payable upon maturity in February 2022 and December 2021, respectively.
+Added: The largest aggregate amount of principal outstanding under the Kehl Loans during the year ended August 31, 2021, and the balance on August 31, 2021, was $889,852.
+Added: During the year ended August 31, 2021, no principal or interest was paid on the Kehl Loans.
+Added: The terms of the Kehl Loans were provided pursuant to financing programs widely available to our qualified customers.
Review, Approval or Ratification of Related Party Transactions
13 unchanged sentences
Nominations for director elections are made by the voting members at each region caucus held during our annual meeting of members.
−Removed: Table of Content s
−Removed: the Board of Directors nor management of CHS participates in the nomination process.
+Added: Neither the Board of Directors nor management of CHS participates in the nomination process.
Accordingly, we have no nominating committee.
1 unchanged sentence
Independent Directors
−Removed: David Beckman Mark Farrell Edward Malesich
−Removed: Blew Steve Fritel Perry Meyer
−Removed: Hal Clemensen Alan Holm Steve Riegel
−Removed: Scott Cordes David Kayser Daniel Schurr
−Removed: Jon Erickson Russell Kehl Kevin Throener
+Added: David Beckman Mark Farrell Perry Meyer
+Added: Blew Steve Fritel Steve Riegel
+Added: Hal Clemensen Alan Holm Daniel Schurr
+Added: Scott Cordes David Kayser Kevin Throener
+Added: Jon Erickson Russell Kehl Cortney Wagner
Further, although we do not need to rely upon an exemption for the Board of Directors as a whole, we are exempt pursuant to The Nasdaq rules from The Nasdaq director independence requirements as they relate to the makeup of the Board of Directors as a whole and the makeup of the committee performing the functions of a compensation committee.
12 unchanged sentences
The review includes an analysis by management of the continued applicability of the risk, our performance in managing or mitigating the risk, and possible additional or emerging risks to consider.
−Removed: As additional areas of risk are identified, our Board of Directors and/or a committee of the Board provides review and oversight of management's actions to identify, assess and manage that risk.
+Added: As additional areas of risk are identified, our Board of Directors and/or a committee of the Board provide a review and oversight of management's actions to identify, assess and manage that risk.
We continue to develop a formal enterprise risk management program intended to support integration of the risk assessment and management discipline and controls into major decision-making and business processes.
1 unchanged sentence
When appropriate, the Corporate Risk Committee meets jointly with the Audit Committee to discuss common financial or other risks across CHS that may have potential material impact to our financial statements.
−Removed: Table of Content s
PRINCIPAL ACCOUNTANT FEES AND SERVICES
11 unchanged sentences
In accordance with the CHS Inc.
−Removed: Audit Committee Charter, as amended, our Audit Committee adopted the following policies and procedures for the approval of the engagement of an independent registered public accounting firm for audit, review or attest services and for pre-approval of certain permissible nonaudit services, all to ensure auditor independence.
+Added: Audit Committee Charter, as amended, our Audit Committee adopted the following policies and procedures for the approval of the engagement of an independent registered public accounting firm for audit, review or attest services and for preapproval of certain permissible nonaudit services, all to ensure auditor independence.
Our independent registered public accounting firm will provide audit, review and attest services only at the direction of, and pursuant to engagement fees and terms approved by our Audit Committee.
1 unchanged sentence
Our Audit Committee approved 100% of the services listed above in advance.
−Removed: Table of Content s
EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
9 unchanged sentences
Regulation S-X promulgated by the SEC also requires separate financial statements of significant equity method investments to be filed with this Annual Report on Form 10-K when the equity income attributable to a significant equity method investment exceeds 20% of income before income taxes for any of our fiscal years for which financial statements are required to be presented in this Annual Report on Form 10-K.
−Removed: As equity income from our investment in CF Nitrogen exceeded 20% of our income before income taxes for the fiscal year ended August 31, 2020, separate financial statements for CF Nitrogen will be filed as an amendment to this Annual Report on Form 10-K within 90 days after CF Nitrogen’s fiscal year end on December 31, 2020.
+Added: As equity income from our investment in CF Nitrogen exceeded 20% of our income before income taxes for the fiscal year ended August 31, 2021, separate financial statements for CF Nitrogen will be filed as an amendment to this Annual Report on Form 10-K within 90 days after CF Nitrogen’s fiscal year ending December 31, 2021.
(a)(2) FINANCIAL STATEMENT SCHEDULES
19 unchanged sentences
*Net of reserve adjustments.
−Removed: FORM 10-K SUMMARY
−Removed: Table of Content s
(a)(3) EXHIBITS
61 unchanged sentences
1 to Employment Agreement, dated as of November 5, 2020, between CHS Inc.
+Added: ( Incorporated by reference to our Form 10-K for the yea r ended August 31, 2020, filed November 5, 2020 ) .
+Added: 10.1B Amendment No 2.
+Added: To Employment Agreement, dated as of November 3 , 2021, between CHS Inc.
Debertin (*)(+)
4 unchanged sentences
333-190019), filed September 3, 2013).
−Removed: Table of Content s
10.2A Amendment No.
11 unchanged sentences
10.4 CHS Inc.
−Removed: Long-Term Incentive Plan XIV Plan Appendix (2018-2020) .
+Added: Long-Term Incentive Plan Appendix (2019-2021).
(Incorporated by reference to our Form 10-K for the year ended August 31, 2019, filed November 6, 2019) (+)
10.4A CHS Inc.
−Removed: Long-Term Incentive Plan XIV Plan Appendix (2019-2021).
+Added: Long-Term Incentive Plan Appendix (2020-2022).
(Incorporated by reference to our Form 10-K for the year ended August 31, 2020, filed November 5, 202 0 ).
10.4B CHS Inc.
−Removed: Long-Term Incentive Plan XIV Plan Appendix (2020-2022).
+Added: Long-Term Incentive Plan Appendix (2021-2023).
10.5 CHS Inc.
52 unchanged sentences
(Incorporated by reference to our Form 10-Q for the quarterly period ended November 30, 2019, filed January 8, 2020).
+Added: 10.8D Amendment No.
+Added: 4 to the CHS Inc.
+Added: Deferred Compensation Plan (2015 Restatement).
+Added: (Incorporated by reference to our Form 10-Q for the quarterly period ended February 28, 2021, filed April 7, 2021).
+Added: 10.8E Amendment No.
+Added: 6 to the CHS Inc.
+Added: Deferred Compensation Plan (2015 Restatement).
+Added: (Incorporated by reference to our Form 10-Q for the quarterly period ended February 28, 2021, filed April 7, 2021).
10.9 Beneficiary Designation Form for the CHS Inc.
10 unchanged sentences
(Incorporated by reference to our Form 10-K for the year ended August 31, 2011, filed November 14, 2011).
−Removed: Table of Content s
10.12A Amendment No.
10 unchanged sentences
(Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2017, filed July 14, 2017).
+Added: 10.12E Amendment No.
+Added: 5 to Amended and Restated Loan Origination and Participation Agreement dated as of September 1, 2011, by and among AgStar Financial Services, PCA, d/b/a ProPartners Financial, and CHS Capital, LLC.
+Added: 10.12F Amendment No.
+Added: 6 to Amended and Restated Loan Origination and Participation Agreement dated as of September 1, 2011, by and among AgStar Financial Services, PCA, d/b/a ProPartners Financial, and CHS Capital, LLC.
10.13 Amended and Restated Limited Liability Company Agreement, dated February 1, 2012, between CHS Inc.
41 unchanged sentences
(Incorporated by reference to our Current Report on Form 8-K , filed July 19, 2019).
+Added: 10.19C Amendment No.
+Added: 3 to 2015 Credit Agreement (10–Year Term Loan), dated as of February 19, 2021, by and between CHS Inc., CoBank, ACB, for its own benefit as a syndication party and as the administrative agent for the benefit of the present and future syndication parties, and the other syndication parties party thereto.
+Added: (Incorporated by reference to our Current Report on Form 8-K filed , February 24, 2021).
10.20 Note Purchase Agreement, dated as of January 14, 2016, among CHS Inc.
1 unchanged sentence
(Incorporated by reference to our Current Report on Form 8-K, filed January 21, 2016).
−Removed: Table of Content s
10.21 Note Purchase Agreement, dated as of August 14, 2020, among CHS Inc.
26 unchanged sentences
f/k/a The Bank of Tokyo – Mitsubishi UFJ, Ltd., New York Branch, as administrative agent.
+Added: ( Incorporated by r eference to our Form 10-K for the year ended Au gust 31, 2020, filed November 5, 2020).
10.22G Omnibus Amendment No.
1 unchanged sentence
f/k/a The Bank of Tokyo – Mitsubishi UFJ, Ltd., New York Branch, as administrative agent.
+Added: ( I nco rporated by reference to our Form 10-K for the year ended August 31, 2020 , filed November 5, 2020 ).
+Added: 10.22H Omnibus Amendment No.
+Added: 9 , dated as of July 30 , 202 1 , by and among Cofina Funding, LLC, as seller, CHS Inc., as servicer and as an originator, CHS Capital, LLC, as an originator, each of the conduit purchasers, committed purchasers and purchaser agents set forth on the signature pages thereto and MUFG Bank Ltd.
+Added: f/k/a The Bank of Tokyo – Mitsubishi UFJ, Ltd., New York Branch, as administrative agent.
+Added: 10.22I Omnibus Amendment No.
+Added: 10 , dated as of August 3 1 , 2021, by and among Cofina Funding, LLC, as seller, CHS Inc., as servicer and as an originator, CHS Capital, LLC, as an originator, each of the conduit purchasers, committed purchasers and purchaser agents set forth on the signature pages thereto and MUFG Bank Ltd.
+Added: f/k/a The Bank of Tokyo – Mitsubishi UFJ, Ltd., New York Branch, as administrative agent.
10.23 Receivables Financing Agreement dated July 22, 2016, by and among CHS Inc., individually and as a Servicer, Cofina Funding, LLC, as Seller, Victory Receivables Corporation and Nieuw Amsterdam Receivables Corporation B.V., as Conduit Purchasers, Coöperatieve Rabobank U.A., as a Committed Purchaser, Coöperatieve Rabobank U.A., New York Branch, as Purchaser Agent, and the Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as a Committed Purchaser, Purchaser Agent and as Administrative Agent.
8 unchanged sentences
, New York Branch, as administrative agent.
−Removed: Table of Content s
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2020.
+Added: filed November 5, 2020).
10.24A Reaffirmation of Performance Guaranty dated July 18, 2017, by and among CHS Inc., individually and as a Servicer, Cofina Funding, LLC, as Seller, Victory Receivables Corporation and Nieuw Amsterdam Receivables Corporation B.V., as Conduit Purchasers, Coöperatieve Rabobank U.A., as a Committed Purchaser, Coöperatieve Rabobank U.A., New York Branch, as Purchaser Agent, and the Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as a Committed Purchaser, Purchaser Agent and as Administrative Agent.
2 unchanged sentences
(f/k/a The Bank of Tokyo-Mitsubishi UFJ, Ltd.) and each other financial institution from time to time party thereto, as MFA Buyers, MUFG Bank, Ltd., as agent for the MFA Buyers, CHS Inc.
−Removed: and CHS Capital, LLC, as sellers, and CHS Inc., as agent for the sellers (Incorporated by reference to our Form 10-K for the year ended August 31, 2018, filed December 3, 2018).
+Added: and CHS Capital, LLC, as sellers, and CHS Inc., as agent for the sellers .
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2018, filed December 3, 2018).
10.25A Amendment No.
−Removed: 1 to the Framework Agreement, dated as of September 4, 2018 .
+Added: 1 to the Framework Agreement, dated as of July 23 , 201 9 .
(Incorporated by reference to our Form 10-Q for the quarterly period ended November 30, 2019, filed January 8, 2020).
10.25B Amendment No.
−Removed: 2 to the Framework Agreement, dated as of September 4, 2018.
+Added: 2 to the Framework Agreement, dated as of August 29 , 201 9 .
(Incorporated by reference to our Form 10-Q for the quarterly period ended November 30, 2019, filed January 8, 2020).
1 unchanged sentence
3 to the Framework Agreement, dated as of June 26, 2020.
+Added: ( In co rporated by reference to our Form 10-K for the year ended August 31, 20 20, filed November 5, 2020 ) .
10.25D Amendment No.
4 to the Framework Agreement, dated as of September 24, 2020.
+Added: ( Incorporated by reference to our Form 10-K for the year ended Aug ust 31, 2020, filed November 5, 2020 ) .
+Added: 10.25E Amendment No.
+Added: 5 to the Framework Agreement, dated as of August 31, 2021.
10.26 1996 SIFMA Master Repurchase Agreement, dated as of September 4, 2018, between CHS Inc.
−Removed: and the buyer under the Framework Agreement, including Annex I thereto (and as amended thereby) (Incorporated by reference to our Form 10-K for the year ended August 31, 2018, filed December 3, 2018).
+Added: and the buyer under the Framework Agreement, including Annex I thereto (and as amended thereby) .
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2018, filed December 3, 2018).
10.26A Amendment No.
1 to 1996 SIFMA Master Repurchase Agreement, dated as of June 26, 2020, between CHS Inc., as seller, and MUFG Bank Ltd., as buyer.
−Removed: 10.27 1996 SIFMA Master Repurchase Agreement, dated as of September 4, 2018, between CHS Capital, LLC and the buyer under the Framework Agreement, including Annex I thereto (and as amended thereby) (Incorporated by reference to our Form 10-K for the year ended August 31, 2018, filed December 3, 2018).
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2020, filed November 5, 2020).
+Added: 10.27 1996 SIFMA Master Repurchase Agreement, dated as of September 4, 2018, between CHS Capital, LLC and the buyer under the Framework Agreement, including Annex I thereto (and as amended thereby) .
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2018, filed December 3, 2018).
10.27A Amendment No.
1 to 1996 SIFMA Master Repurchase Agreement, dated as of June 26, 2020, between CHS Capital, LLC, as seller, CHS Inc., as guarantor, and MUFG Bank Ltd., as buyer.
+Added: ( Incorporated by reference to our Form 10-K for the year ended A ugust 31, 2020, filed November 5, 2020 ) .
10.28 Guaranty, dated as of September 4, 2018, by CHS Inc.
−Removed: in favor of the buyer under the Framework Agreement (Incorporated by reference to our Form 10-K for the year ended August 31, 2018, filed December 3, 2018).
+Added: in favor of the buyer under the Framework Agreement .
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2018, filed December 3, 2018).
10.29 CHS Inc.
2 unchanged sentences
10.29A Description of Amendment to the CHS Strategic Leadership Team 2018 Retention Award Document .
−Removed: 10.41 Letter Agreement, dated as of July 26, 2019, by and between Timothy N.
−Removed: Skidmore and CHS Inc.
−Removed: (Incorporated by reference to our Current Report on Form 8-K , filed July 29, 2019).
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2020, filed November 5, 2020).
10.30 Letter Agreement, dated January 7, 2020, between CHS Inc.
−Removed: and Olivia Nelligan (Incorporated by reference to our Current Report on Form 8-K , filed January 21, 2020).
+Added: and Olivia Nelligan .
+Added: (Incorporated by reference to our Current Report on Form 8-K, filed January 21, 2020).
21.1 Subsidiaries of the Registrant.
16 unchanged sentences
(**) Portions of Exhibits 2.1 and 10.17 have been omitted pursuant to a confidential treatment order under the Exchange Act.
−Removed: Table of Content s
−Removed: (+) Indicates management contract or compensatory plan or agreement.
+Added: (+) Indicates management contract or compensatory plan or arrangement.
The exhibits shown in Item 15(a)(3) of this Annual Report on Form 10-K are being filed herewith.
(c) SCHEDULES
−Removed: Table of Content s
+Added: FORM 10-K SUMMARY
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 4, 2021.
14 unchanged sentences
Hal Clemensen
−Removed: Table of Content s
David Johnsrud
−Removed: Edward Malesich
Kevin Throener
+Added: Cortney Wagner
*By /s/ Jay D.
Attorney-in-fact
−Removed: Table of Content s
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: To the Board of Directors, Members and Patrons of CHS Inc.:
+Added: To the Board of Directors and Shareholders of CHS Inc.:
Opinion on the Financial Statements
18 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
+Added: Critical Audit Matters
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Valuation of Grain Inventories and Grain Forward Commodity Purchase and Sales Contracts
+Added: As described in Notes 4, 15, and 16 to the consolidated financial statements, the Company's grain and oilseed inventories were $1,435.5 million as of August 31, 2021, and commodity derivatives in an asset and liability position were $532.8 million and $444.9 million, respectively, as of August 31, 2021, of which grain inventories and grain forward commodity purchase and sales contracts make up the majority.
+Added: Management enters into various derivative instruments to manage the Company's exposure to movements primarily associated with agricultural and energy commodity prices.
+Added: The net realizable value of grain inventories and fair value of grain forward commodity purchase and sales contracts are determined using inputs that are
+Added: generally based on exchange traded prices and/or recent market bids and offers, including location-specific adjustments.
+Added: Location-specific inputs are driven by local market supply and demand and are generally based on broker or dealer quotations or market transactions in either listed or over-the-counter markets.
+Added: The principal considerations for our determination that performing procedures relating to the valuation of grain inventories and grain forward commodity purchase and sales contracts is a critical audit matter are (i) the significant judgment by management to determine the net realizable value of grain inventories and the fair value of grain forward commodity purchase and sales contracts and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management's inputs related to exchange traded prices and/or recent market bids and offers, including location-specific adjustments.
+Added: Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
+Added: These procedures included, among others, (i) testing management's process for determining the net realizable value of grain inventories and the fair value of grain forward commodity purchase and sales contracts;
+Added: (ii) evaluating the appropriateness of the valuation models;
+Added: (iii) testing the accuracy of the underlying data used in the valuations;
+Added: and (iv) evaluating the reasonableness of inputs used by management related to the exchange traded prices and/or recent market bids and offers, including location-specific adjustments.
+Added: Evaluating management's inputs related to the exchange traded prices and/or recent market bids and offers, including location-specific adjustments involved (i) comparing the exchange traded prices and/or recent market bids and location-specific inputs to third-party information;
+Added: and (ii) comparing the location-specific adjustments to broker or dealer quotations or market transactions in either listed or over-the-counter markets.
/s/ PricewaterhouseCoopers LLP
2 unchanged sentences
We have served as the Company's auditor since 1998.
−Removed: Table of Content s
AND SUBSIDIARIES
32 unchanged sentences
The accompanying notes are an integral part of the consolidated financial statements.
−Removed: Table of Content s
AND SUBSIDIARIES
8 unchanged sentences
Operating earnings 205,797 277,265 659,602
−Removed: Gain on disposal of business ( 1,450 ) ( 3,886 ) ( 131,816 )
Interest expense 104,565 116,977 167,065
4 unchanged sentences
Net income 553,569 423,609 828,057
−Removed: Net income (loss) attributable to noncontrolling interests 1,170 ( 1,823 ) ( 601 )
+Added: Net (loss) income attributable to noncontrolling interests ( 383 ) 1,170 ( 1,823 )
Net income attributable to CHS Inc.
1 unchanged sentence
The accompanying notes are an integral part of the consolidated financial statements.
−Removed: Table of Content s
AND SUBSIDIARIES
7 unchanged sentences
18,295 12,798 ( 32,559 )
−Removed: Unrealized net loss on available-for-sale investments — — ( 3,148 )
Cash flow hedges
2 unchanged sentences
5,300 ( 15,378 ) ( 9,949 )
−Removed: Other comprehensive (loss) income, net of tax ( 6,991 ) ( 22,312 ) 7,437
+Added: Other comprehensive income (loss), net of tax 17,533 ( 6,991 ) ( 22,312 )
Comprehensive income 571,102 416,618 805,745
−Removed: Comprehensive income (loss) attributable to noncontrolling interests
−Removed: 1,170 ( 1,823 ) ( 601 )
+Added: Comprehensive (loss) income attributable to noncontrolling interests ( 383 ) 1,170 ( 1,823 )
Comprehensive income attributable to CHS Inc.
1 unchanged sentence
The accompanying notes are an integral part of the consolidated financial statements.
−Removed: Table of Content s
AND SUBSIDIARIES
16 unchanged sentences
Net income (loss) — — — — — 829,880 ( 1,823 ) 828,057
−Removed: Other comprehensive income, net of tax — — — — 7,437 — — 7,437
+Added: Other comprehensive loss, net of tax — — — — ( 22,312 ) — — ( 22,312 )
Reclassification of tax effects to capital reserves — — — — ( 4,706 ) 4,706 — —
6 unchanged sentences
Preferred stock dividends — — — — — ( 168,668 ) — ( 168,668 )
+Added: ASC Topic 842 cumulative-effect adjustment — — — — — 25,320 — 25,320
Other, net ( 1,173 ) ( 7 ) ( 628 ) — — ( 1,008 ) 742 ( 2,074 )
−Removed: Net income (loss) — — — — — 829,880 ( 1,823 ) 828,057
+Added: Net income — — — — — 422,439 1,170 423,609
Other comprehensive loss, net of tax — — — — ( 6,991 ) — — ( 6,991 )
−Removed: Reclassification of tax effects to capital reserves — — — — ( 4,706 ) 4,706 — —
Estimated 2020 patronage refunds — — 211,970 — — ( 241,970 ) — ( 30,000 )
5 unchanged sentences
Preferred stock dividends — — — — — ( 168,668 ) — ( 168,668 )
−Removed: ASC Topic 842 cumulative-effect adjustment — — — — — 25,320 — 25,320
Other, net ( 873 ) ( 6 ) ( 165 ) — — ( 6,360 ) ( 454 ) ( 7,858 )
−Removed: Net income — — — — — 422,439 1,170 423,609
−Removed: Other comprehensive loss, net of tax — — — — ( 6,991 ) — — ( 6,991 )
+Added: Net income (loss) — — — — — 553,952 ( 383 ) 553,569
+Added: Other comprehensive income, net of tax — — — — 17,533 — — 17,533
Estimated 2021 patronage refunds — — 230,290 — — ( 280,290 ) — ( 50,000 )
2 unchanged sentences
The accompanying notes are an integral part of the consolidated financial statements.
−Removed: Table of Content s
AND SUBSIDIARIES
9 unchanged sentences
Provision for doubtful accounts 6,692 3,418 57,745
−Removed: Gain/recovery on disposal of business ( 1,450 ) ( 3,886 ) ( 131,816 )
+Added: Gain/recovery on sale of business ( 19,034 ) ( 1,450 ) ( 3,886 )
+Added: LIFO liquidations ( 35,258 ) — —
Deferred taxes ( 11,957 ) ( 32,761 ) ( 13,852 )
26 unchanged sentences
Effect of exchange rate changes on cash and cash equivalents ( 4,063 ) 4,942 2,733
−Removed: Net (decrease) increase in cash and cash equivalents and restricted cash ( 82,682 ) ( 244,265 ) 271,667
+Added: Net increase (decrease) in cash and cash equivalents and restricted cash 325,491 ( 82,682 ) ( 244,265 )
Cash and cash equivalents and restricted cash at beginning of period 216,993 299,675 543,940
2 unchanged sentences
Cash paid for interest $ 102,093 $ 119,354 $ 172,259
−Removed: Cash paid for income taxes, net of refunds 6,840 19,918 13,410
+Added: Cash (received) paid for income taxes, net of refunds ( 8,842 ) 6,840 19,918
Other significant noncash investing and financing transactions:
−Removed: Notes receivable reacquired under securitization facility — — 615,089
−Removed: Trade receivables reacquired under securitization facility — — 402,421
−Removed: Securitized debt reacquired under securitization facility — — 634,000
−Removed: Deferred purchase price receivable extinguished under securitization facility — — 386,900
Capital expenditures and major maintenance incurred but not yet paid 28,010 14,906 28,478
3 unchanged sentences
The accompanying notes are an integral part of the consolidated financial statements.
−Removed: Table of Content s
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1 unchanged sentence
(referred to herein as "CHS," "we," "us" or "our") is the nation’s leading integrated agricultural cooperative.
−Removed: As a cooperative, CHS is owned by farmers and ranchers and their member cooperatives ("members") across the United States.
−Removed: We also have preferred shareholders that own shares of our various series of preferred stock, which are each listed and traded on the Global Select Market of The Nasdaq Stock Market LLC ("The Nasdaq").
+Added: As a cooperative, CHS is owned by farmers and ranchers and member cooperatives ("members") across the United States.
+Added: We also have preferred shareholders that own shares of our five series of preferred stock, all of which are listed and traded on the Global Select Market of The Nasdaq Stock Market LLC ("The Nasdaq").
See Note 12, Equities , for more detailed information.
−Removed: We buy commodities from and provide products and services to individual agricultural producers, local cooperatives and other companies (including member and other nonmember customers), both domestic and international.
−Removed: Those products and services include initial agricultural inputs such as fuels, farm supplies, crop nutrients and crop protection products;
−Removed: as well as agricultural outputs that include grains and oilseeds, grain and oilseed processing and food products, and ethanol production and marketing.
+Added: We buy commodities from and provide products and services to individual agricultural producers, local cooperatives and other companies (including member and other nonmember customers), both domestically and internationally.
+Added: Those products and services include initial agricultural inputs such as fuels, farm supplies, crop nutrients and crop protection products, as well as agricultural outputs that include grains and oilseeds, processed grains and oilseeds, renewable fuels and food products.
A portion of our operations are conducted through equity investments and joint ventures whose operating results are not fully consolidated with our results;
3 unchanged sentences
The effects of all significant intercompany transactions have been eliminated.
−Removed: The notes to our consolidated financial statements refer to our Energy, Ag and Nitrogen Production reportable segments, as well as our Corporate and Other category, which represents an aggregation of individually immaterial operating segments.
−Removed: The Nitrogen Production reportable segment results from our investment in CF Industries Nitrogen, LLC ("CF Nitrogen").
+Added: The notes to our consolidated financial statements refer to our Energy, Ag, Nitrogen Production and Foods reportable segments, as well as our Corporate and Other category, which represents an aggregation of individually immaterial operating segments.
+Added: The Nitrogen Production reportable segment consists of our investment in CF Industries Nitrogen, LLC ("CF Nitrogen"), and allocated expenses.
+Added: The Foods reportable segment met quantitative criteria to become a reportable segment during fiscal 2021 and consists of our investment in Ventura Foods, LLC.
+Added: ("Ventura Foods"), and allocated expenses.
See Note 14, Segment Reporting , for more information.
−Removed: Certain captions within the Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Cash Flows have been combined within other captions as allowed by Securities and Exchange Commission financial statement reporting requirements under Regulation S-X.
−Removed: Prior year information has been updated to conform with the current presentation.
Use of Estimates
8 unchanged sentences
Cash equivalents include short-term, highly liquid investments with original maturities of three months or less at the date of acquisition.
−Removed: The fair value of cash and cash equivalents approximates the carrying value due to the short-term nature of the instruments.
−Removed: Restricted cash is included in our Consolidated Balance Sheets within other current assets (current portion) and other assets (noncurrent portion), as appropriate, and primarily relates to customer deposits for futures and option contracts associated with regulated commodities held in separate accounts as required under federal and other regulations.
−Removed: Pursuant to the
−Removed: requirements of the Commodity Exchange Act, such funds must be carried in separate accounts that are designated as segregated customer accounts, as applicable.
+Added: The carrying value of cash and cash equivalents approximates the fair value due to the short-term nature of the instruments.
+Added: Restricted cash is included in our Consolidated Balance Sheets within other current assets and primarily relates to customer deposits for futures and option contracts associated with regulated commodities held in separate accounts as required under federal and other regulations.
+Added: Pursuant to the requirements of the Commodity Exchange Act, such funds must be carried in separate accounts that are designated as segregated customer accounts, as applicable.
Restricted cash also includes funds held in escrow pursuant to applicable regulations limiting their usage.
4 unchanged sentences
Restricted cash included in other current assets 129,325 76,119 88,496
−Removed: Restricted cash included in other assets — — 3,130
Total cash and cash equivalents and restricted cash $ 542,484 $ 216,993 $ 299,675
Recent Accounting Pronouncements
−Removed: Except for the recent accounting pronouncements described below, other recent accounting pronouncements are not expected to have a material impact on our condensed consolidated financial statements.
−Removed: We adopted Accounting Standards Codification ("ASC") Topic 842, Leases ("ASC Topic 842"), as of September 1, 2019, using the modified retrospective approach.
−Removed: In addition, we used the additional optional transition method and package of practical expedients in the period of adoption without retrospective adjustment to previous periods presented, although we elected not to apply the hindsight practical expedient available under the standard.
−Removed: As a result of using the modified retrospective method, prior periods have not been restated, and a $ 25.3 million cumulative-effect adjustment, including the deferred income tax impact, was recorded to increase the opening balance of capital reserves as of the adoption date related to recognition of previously deferred gains associated with the sale-leaseback of our primary corporate office building located in Inver Grove Heights, Minnesota.
−Removed: Additionally, adoption of ASC Topic 842 resulted in the recognition of operating lease right-of-use assets and associated lease liabilities of $ 268.4 million and $ 267.0 million, respectively, as of September 1, 2019.
−Removed: Adoption of ASC Topic 842 did not have a material impact on our Consolidated Statements of Operations or Consolidated Statements of Cash Flows.
−Removed: Additional information and further disclosures related to our leases and lease-related financial statement amounts are included within Note 19, Leases .
−Removed: Not Yet Adopted
−Removed: In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.
+Added: Except for the recent accounting pronouncements described below, other recent accounting pronouncements are not expected to have a material impact on our consolidated financial statements.
+Added: In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No.
2016-13, Financial Instruments - Credit Losses ("ASC Topic 326"):
3 unchanged sentences
Entities are required to apply the provisions of this ASU as a cumulative-effect adjustment to the opening balance of capital reserves as of the beginning of the first reporting period in which the guidance is adopted.
−Removed: This ASU is effective for us beginning September 1, 2020, for our fiscal year 2021 and for interim periods within that fiscal year.
−Removed: Based on various data-gathering activities, development of a credit losses model, data analyses and accounting policy election determinations, the impact of adoption is not expected to have a material impact on our consolidated financial statements.
+Added: As part of our adoption efforts, we performed various data-gathering activities, developed credit loss models, performed data analyses and made accounting policy election determinations.
+Added: The impact of adoption on September 1, 2020, did not have a material impact on our consolidated financial statements.
+Added: Not Yet Adopted
+Added: There are not any recent accounting pronouncements yet to be adopted that we expect to have a material impact on our consolidated financial statements.
Note 2 Revenues
3 unchanged sentences
Our Ag segment derives its revenues through origination and marketing of grain, including service activities conducted at export terminals;
−Removed: through wholesale sales of agronomy products and processed sunflowers;
+Added: through wholesale agronomy sales of crop nutrient and crop protection products;
from sales of soybean meal, soybean refined oil and soyflour products;
through production and marketing of renewable fuels;
−Removed: and through retail sales of petroleum
−Removed: and agronomy products, and feed and farm supplies.
+Added: and through retail sales of petroleum and agronomy products, processed sunflowers, and feed and farm supplies.
Corporate and Other primarily consists of our financing and hedging businesses.
Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied, which generally occurs when control of the goods has transferred to customers in accordance with the underlying contract.
−Removed: For the majority of our contracts with customers, control transfers to customers at a point in time when goods/services have been delivered, as that is generally when legal title, physical possession and risks and rewards of ownership of the goods/services transfer to the customer.
+Added: For the majority of our contracts with customers, control transfers to customers at a point in time when goods and/or services have been delivered, as that is generally when legal title, physical possession and risks and rewards of ownership of the goods and/or services transfer to the customer.
In limited arrangements, control transfers over time as the customer simultaneously receives and consumes the benefits of the service as we complete our performance obligation(s).
Revenue is recognized as the transaction price we expect to be entitled to in exchange for transferring goods or services to a customer, excluding amounts collected on behalf of third parties.
−Removed: For physically settled derivative sales contracts that are outside the scope of the revenue guidance, we recognize revenue when control of the inventory is transferred within the meaning of ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606").
+Added: For physically settled derivative sales contracts that are outside the scope of the revenue guidance, we recognize revenue when control of the inventory is transferred within the meaning of Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC Topic 606").
Revenues arising from our financing business are recognized in accordance with ASC Topic 470, Debt ("ASC Topic 470") and fall outside the scope of ASC Topic 606.
8 unchanged sentences
Disaggregation of Revenues
−Removed: The following table presents revenues recognized under ASC Topic 606 disaggregated by reportable segment, as well as the amount of revenues recognized under ASC Topic 815, Derivatives and Hedging ("ASC Topic 815"), and other applicable accounting guidance for the year ended August 31, 2020 and 2019.
−Removed: Other applicable accounting guidance primarily includes revenues recognized under ASC Topic 842 and ASC Topic 470 that fall outside the scope of ASC Topic 606.
+Added: The following tables present revenues recognized under ASC Topic 606 disaggregated by reportable segment, as well as the amount of revenues recognized under ASC Topic 815, Derivatives and Hedging ("ASC Topic 815"), and other applicable accounting guidance for the years ended August 31, 2021, 2020 and 2019.
+Added: Other applicable accounting guidance primarily includes revenues recognized under ASC Topic 470 and ASC Topic 842, Leases ("ASC Topic 842") that fall outside the scope of ASC Topic 606:
Year Ended August 31, 2021
12 unchanged sentences
Total revenues $ 10,819,104 $ 17,499,389 $ 87,872 $ 28,406,365
−Removed: *Our Nitrogen Production reportable segment represents an equity method investment that records earnings and allocated expenses, but not revenues.
−Removed: Less than 1% of revenues accounted for under ASC Topic 606 included within the table above are recorded over time and relate primarily to service contracts.
+Added: Year Ended August 31, 2019
+Added: Reportable Segment* ASC Topic 606 ASC Topic 815 Other Guidance Total Revenues
+Added: (Dollars in thousands)
+Added: Energy $ 6,393,075 $ 726,001 $ — $ 7,119,076
+Added: Ag 6,319,304 18,268,977 131,791 24,720,072
+Added: Corporate and Other 20,262 — 41,043 61,305
+Added: Total revenues $ 12,732,641 $ 18,994,978 $ 172,834 $ 31,900,453
+Added: *Our Nitrogen Production and Foods reportable segments represent equity method investments that record earnings and allocated expenses, but not revenues.
+Added: Less than 1% of revenues accounted for under ASC Topic 606 included within the tables above are recorded over time and relate primarily to service contracts.
Contract Assets and Contract Liabilities
4 unchanged sentences
Contract liabilities of $ 213.9 million and $ 139.1 million as of August 31, 2021 and 2020, respectively, are recorded within other current liabilities on our Consolidated Balance Sheets.
−Removed: For the years ended August 31, 2020 and 2019, we recognized revenues of $ 194.8 million and $ 170.7 million, respectively, which were included in the other current liabilities balance at the beginning of the period.
+Added: For the years ended August 31, 2021, 2020 and 2019, we recognized revenues of $ 139.1 million, $ 194.8 million and $ 170.7 million related to contract liabilities, respectively.
+Added: These amounts were included in the other current liabilities balance at the beginning of the respective period.
Note 3 Receivables
8 unchanged sentences
Trade Accounts Receivable
−Removed: Trade accounts receivable are initially recorded at a selling price that approximates fair value upon the sale of goods or services to customers.
−Removed: Subsequently, trade accounts receivable are carried at net realizable value, which includes an allowance for estimated uncollectible amounts.
−Removed: We calculate this allowance based on our history of write-offs, level of past due accounts and our relationships with and the economic status of our customers.
+Added: Trade accounts receivable are recorded at net realizable value, which includes an allowance for expected credit losses in accordance with ASC Topic 326.
+Added: The allowance for expected credit losses is based on our best estimate of expected credit losses in existing receivable balances and is determined using historical write-off experience, adjusted for various industry and regional data and current expectations of future credit losses.
Receivables from related parties are disclosed in Note 18, Related Party Transactions .
3 unchanged sentences
CHS Capital, LLC ("CHS Capital"), our wholly-owned subsidiary, has short-term notes receivable from commercial and producer borrowers.
−Removed: The short-term notes receivable have maturity terms of 12 months or less and are reported at their outstanding unpaid principal balances, adjusted for the allowance of loan losses, as CHS Capital has the intent and ability to hold the applicable loans for the foreseeable future or until maturity or pay-off.
+Added: The short-term notes receivable have maturity terms of 12 months or less and are reported at their outstanding unpaid principal balances, less an allowance for expected credit losses, as CHS Capital has the intent and ability to hold the applicable loans for the foreseeable future or until maturity or payoff.
The carrying value of CHS Capital short-term notes receivable approximates fair value given the notes' short-term duration and use of market pricing adjusted for risk.
−Removed: Notes receivable from commercial borrowers are collateralized by various combinations of mortgages, personal property, accounts and notes receivable, inventories and assignments of certain regional cooperative's capital stock.
+Added: Notes receivable from commercial borrowers are collateralized by various combinations of mortgages, personal property, accounts and notes receivable, inventories and assignments of certain regional cooperatives' capital stock.
These loans are primarily originated in the states of North Dakota and Minnesota.
2 unchanged sentences
The long-term notes receivable are included in other assets on our Consolidated Balance Sheets.
−Removed: As of August 31,
−Removed: 2020 and 2019, commercial notes represented 33 % and 41 %, respectively, and producer notes represented 67 % and 59 %, respectively, of total CHS Capital notes receivable.
+Added: As of August 31, 2021 and 2020, commercial notes represented 28 % and 33 %, respectively, and producer notes represented 72 % and 67 %, respectively, of total CHS Capital notes receivable.
CHS Capital has commitments to extend credit to customers if there are no violations of any contractually established conditions.
As of August 31, 2021, CHS Capital customers had additional available credit of $ 706.9 million.
−Removed: Allowance for Loan Losses and Impairments
−Removed: CHS Capital maintains an allowance for loan losses that is an estimate of potential incurred losses inherent in the loans receivable portfolio.
−Removed: In accordance with FASB ASC 450-20, Accounting for Loss Contingencies, and ASC 310-10, Accounting by Creditors for Impairment of a Loan , the allowance for loan losses consists of general and specific components.
−Removed: The general component is based on historical loss experience and qualitative factors addressing operational risks and industry trends.
−Removed: The specific component relates to loans receivable that are classified as impaired.
+Added: Allowance for Loan Losses
+Added: CHS Capital maintains an allowance for loan losses that is an estimate of current expected losses inherent in the loans receivable portfolio.
+Added: In accordance with ASC Topic 326, the allowance for loan losses is based on our current expectation for future losses, which takes into consideration historical loss experience, third-party industry forecasts, as well as other quantitative and qualitative factors addressing operational risks and industry trends.
Additions to the allowance for loan losses are reflected within marketing, general and administrative expenses in the Consolidated Statements of Operations.
−Removed: The portion of loans receivable deemed uncollectible is charged off against the allowance.
+Added: The portion of loans receivable deemed uncollectible is charged off against the allowance for loan losses.
Recoveries of previously charged off amounts increase the allowance for loan losses.
−Removed: No significant amounts of CHS Capital notes were past due as of August 31, 2020 or 2019, and specific and general loan loss reserves related to CHS Capital notes were no t material as of either date.
+Added: No significant amounts of CHS Capital notes were past due as of August 31, 2021 or 2020, and the allowance for loan losses related to CHS Capital notes were no t material as of either date.
Interest Income
10 unchanged sentences
When a restructured loan constitutes a troubled debt restructuring, CHS includes these loans within its impaired loans.
−Removed: CHS Capital had no significant troubled debt restructurings and no third-party borrowers that accounted for more than 10% of the total CHS Capital notes receivable or total receivables as of August 31, 2020 or 2019.
+Added: CHS Capital had no significant troubled debt restructurings during the years ended August 31, 2021, 2020 and 2019, and no third-party borrowers that accounted for more than 10% of the total CHS Capital notes receivable or total receivables as of August 31, 2021 or 2020.
Loan Participations
For the years ended August 31, 2021 and 2020, CHS Capital sold $ 40.8 million and $ 70.6 million of notes receivable, respectively, to various counterparties under a master participation agreement.
−Removed: The sale resulted in the removal of notes receivable from the Consolidated Balance Sheet.
+Added: The sales resulted in the removal of notes receivable from the Consolidated Balance Sheets.
CHS Capital has no retained interests in the transferred notes receivable, other than collection and administrative services.
8 unchanged sentences
For pre-crop financing arrangements, we do not bear costs or operational risks associated with the related growing crops, although our ability to be paid depends on the crops actually being produced.
−Removed: The financing is collateralized by future crops, land and physical assets of the suppliers, carries a local market
−Removed: interest rate and settles when the farmer's crop is harvested and sold.
−Removed: No significant troubled debt restructurings occurred and no third-party customer or borrower accounted for more than 10% of the total receivables balance as of August 31, 2020 or 2019.
+Added: The financing is collateralized by future crops, land and physical assets of the farmers, carries a local market interest rate and settles when the farmer's crop is harvested and sold.
+Added: No significant troubled debt restructurings occurred during the years ended August 31, 2021, 2020 and 2019, and no third-party customer or borrower accounted for more than 10% of the total receivables balance as of August 31, 2021 or 2020.
Note 4 Inventories
7 unchanged sentences
Total inventories $ 3,334,675 $ 2,742,138
−Removed: Grain, processed grain, oilseed, processed oilseed and other minimally processed soy-based inventories are stated at net realizable value.
+Added: Grain, processed grain, oilseed, processed oilseed and other minimally processed soy-based inventories are accounted for in accordance with ASC Topic 330, Inventory , and are stated at net realizable value.
These inventories are agricultural commodity inventories that are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms.
−Removed: Agricultural commodity inventories have quoted market prices in active markets, may be sold without significant further processing and have predictable and insignificant disposal costs.
−Removed: Changes in the net realizable value of merchandisable agricultural commodities inventories are recognized in earnings as a component of cost of goods sold.
+Added: The net realizable value of agricultural commodity inventories is determined using inputs that are generally based on exchange traded prices and/or recent market bids and offers, including location-specific adjustments.
+Added: Location-specific inputs are driven by local market supply and demand and are generally based on broker or dealer quotations or market transactions in either listed or over-the-counter ("OTC") markets.
+Added: Changes in the net realizable value of agricultural commodity inventories are recognized in earnings as a component of cost of goods sold.
All other inventories are stated at the lower of cost or net realizable value.
−Removed: Costs for inventories produced or modified by us through a manufacturing process include fixed and variable production and raw material costs, and in-bound freight costs for raw materials.
+Added: Costs for inventories produced or modified by us through a manufacturing process include fixed and variable production and raw material costs, and inbound freight costs for raw materials.
Costs for inventories purchased for resale include the cost of products and freight incurred to place the products at our points of sale.
1 unchanged sentence
all other inventories of nongrain products purchased for resale are valued on the first-in, first-out ("FIFO") and average cost methods.
−Removed: As of August 31, 2020 and 2019, we valued approximately 16 % of inventories, primarily crude oil and refined fuels within our Energy segment, using the lower of cost, determined on the LIFO method, or net realizable value.
+Added: As of August 31, 2021 and 2020, we valued approximately 13 % and 16 %, respectively, of inventories, primarily crude oil and refined fuels within our Energy segment, using the lower of cost, determined on the LIFO method, or net realizable value.
If the FIFO method of accounting had been used, inventories would have been higher than the reported amount by $ 359.2 million and $ 93.5 million as of August 31, 2021 and 2020, respectively.
−Removed: During the third quarter of fiscal 2020, we experienced price declines in our energy inventories associated with the COVID-19 pandemic.
−Removed: As a result, we recorded a noncash, lower of cost or market charge of $ 42.0 million in cost of goods sold to reduce the carrying value of our energy inventories to their market value as of May 31, 2020.
−Removed: Based upon market prices observed as of August 31, 2020, the lower of cost or market reserve was decreased by approximately $ 34.0 million as prices improved while inventories were sold.
+Added: During fiscal 2021, we recorded LIFO liquidations for certain energy product inventories.
+Added: The costs of these liquidated inventories in the historical LIFO layers were lower than current costs, which resulted in decreased cost of goods sold of $ 35.3 million had the inventory liquidations not taken place.
+Added: There were no liquidations of LIFO inventories during fiscal 2020 or fiscal 2019.
Note 5 Other Current Assets
4 unchanged sentences
Supplier advance payments 194,706 198,699
+Added: Restricted cash 129,325 76,119
Other 170,749 177,378
3 unchanged sentences
Subsequent margin deposits may also be necessary when changes in commodity prices result in a loss on the contract value to comply with applicable regulations.
−Removed: Our margin and related deposit assets are generally held in segregated accounts to
+Added: Our margin and related deposit assets are generally held in separate accounts to
support the associated derivative contracts and may be used to fund or partially fund the settlement of those contracts as they expire.
1 unchanged sentence
Supplier Advance Payments
−Removed: Supplier advance payments are typically for periods less than 12 months and primarily include amounts paid for grain purchases from suppliers and amounts paid to crop nutrient and crop protection product suppliers to lock in future supply and pricing.
+Added: Supplier advance payments are typically for periods less than 12 months and primarily include amounts paid for grain purchases from suppliers and amounts paid to crop nutrient and crop protection product suppliers to lock in future supply, pricing and discounts.
Note 6 Investments
5 unchanged sentences
Ardent Mills, LLC 220,132 208,927
+Added: TEMCO, LLC 31,464 19,444
Other equity method investments 232,923 233,738
2 unchanged sentences
Joint ventures and other investments in which we have significant ownership and influence but not control, are accounted for in our consolidated financial statements using the equity method of accounting.
−Removed: Our significant equity method investments consist of CF Nitrogen, Ventura Foods, LLC ("Ventura Foods"), and Ardent Mills, LLC ("Ardent Mills"), which are summarized below.
+Added: Our significant equity method investments consist of CF Nitrogen, Ventura Foods, Ardent Mills, LLC ("Ardent Mills") and TEMCO, LLC ("TEMCO"), which are summarized below.
In addition to the recognition of our share of income from our equity method investments, our equity method investments are evaluated for indicators of other-than-temporary impairment on an ongoing basis in accordance with U.S.
2 unchanged sentences
We have elected to utilize the measurement alternative for equity investments that do not have readily determinable fair values and measure these investments at cost less impairment plus or minus observable price changes in orderly transactions.
−Removed: Our share in the income or loss of these equity method investments is recorded within equity (income) loss from investments in the Consolidated Statements of Operations.
+Added: Our share in the income or loss of these equity method investments is recorded within equity income from investments in the Consolidated Statements of Operations.
Other investments consist primarily of investments in cooperatives without readily determinable fair values and are generally recorded at cost, unless an impairment or other observable market price change occurs requiring an adjustment.
6 unchanged sentences
At the time we entered into the strategic venture, we also entered into a supply agreement that entitles us to purchase up to 1.1 million tons of granular urea and 580,000 tons of urea ammonium nitrate ("UAN") annually from CF Nitrogen for ratable delivery through fiscal 2096.
−Removed: Our purchases under the supply agreement are based on prevailing market prices and we receive semi-annual cash distributions (in January and July of each year) from CF Nitrogen via our membership interest.
+Added: Our purchases under the supply agreement are based on prevailing market prices and we receive semiannual cash distributions (in January and July of each year) from CF Nitrogen via our membership interest.
These distributions are based on actual volumes purchased from CF Nitrogen under the strategic venture and will have the effect of reducing our investment to zero over 80 years on a straight-line basis.
−Removed: We account for this investment using the hypothetical liquidation at book value method, recognizing our share of the earnings and losses of CF Nitrogen as equity income from investments in our Nitrogen Production segment based on our contractual claims on the entity's net assets pursuant to the liquidation provisions of CF Nitrogen's Limited Liability Company Agreement, adjusted for the semi-annual cash distributions.
−Removed: Cash distributions received from CF Nitrogen for the years ended August 31, 2020 and 2019, were $ 174.3 million and $ 186.5 million, respectively.
−Removed: The following tables provide aggregate summarized financial information for CF Nitrogen for the balance sheets as of August 31, 2020 and 2019, and the statements of operations for the 12 months ended August 31, 2020, 2019 and 2018:
+Added: We account for this investment using the hypothetical liquidation at book value method, recognizing our share of the earnings and losses of CF Nitrogen as equity income from investments in our Nitrogen Production segment based on our contractual claims on the entity's net assets pursuant to the liquidation provisions of CF Nitrogen's Limited Liability Company Agreement, adjusted for the semiannual cash distributions.
+Added: Cash distributions received from CF Nitrogen for the years ended August 31, 2021, 2020 and 2019, were $ 193.9 million, $ 174.3 million and $ 186.5 million, respectively.
+Added: The following tables provide aggregate summarized financial information for CF Nitrogen for balance sheets as of August 31, 2021 and 2020, and statements of operations for the 12 months ended August 31, 2021, 2020 and 2019:
(Dollars in thousands)
10 unchanged sentences
198,439 127,954 160,373
−Removed: Ventura Foods and Ardent Mills
−Removed: We have a 50 % interest in Ventura Foods, which is a joint venture with Wilsey Foods, Inc., a majority-owned subsidiary of MBK USA Holdings, Inc., that produces and distributes primarily vegetable-oil-based products, and we have a 12 % interest in Ardent Mills, which is a joint venture with Cargill Incorporated and Conagra Brands, Inc., and is the largest flour miller in the United States.
−Removed: We account for Ventura Foods and Ardent Mills as equity method investments included in Corporate and Other.
−Removed: The following tables provide aggregate summarized financial information for our equity method investments in Ventura Foods and Ardent Mills for balance sheets as of August 31, 2020 and 2019, and statements of operations for the 12 months ended August 31, 2020, 2019 and 2018:
+Added: Ventura Foods
+Added: We have a 50 % interest in Ventura Foods, a joint venture with Mitsui & Co., that produces and distributes primarily edible oil-based products.
+Added: We account for Ventura Foods as an equity method investment, and our share of the results of this equity method investment are included in our Foods segment.
+Added: The following tables provide aggregate summarized financial information for our equity method investment in Ventura Foods for balance sheets as of August 31, 2021 and 2020, and statements of operations for the 12 months ended August 31, 2021, 2020 and 2019:
(Dollars in thousands)
10 unchanged sentences
78,519 34,026 51,608
+Added: Ardent Mills and TEMCO
+Added: We have a 12 % interest in Ardent Mills, which is a joint venture with Cargill Incorporated ("Cargill") and Conagra Brands, Inc., and is the largest flour miller in the United States.
+Added: Additionally, we have a 50 % interest in TEMCO, which is a joint venture with Cargill focused on export elevation, primarily to Asia.
+Added: We account for Ardent Mills and TEMCO as equity method investments, and our shares of the results of these equity method investments are included in Corporate and Other and our Ag segment, respectively.
+Added: The following tables provide aggregate summarized financial information for our equity method investments in Ardent Mills and TEMCO for balance sheets as of August 31, 2021 and 2020, and statements of operations for the 12 months ended August 31, 2021, 2020 and 2019:
+Added: (Dollars in thousands)
+Added: Current assets $ 1,194,484 $ 960,358
+Added: Noncurrent assets 1,971,103 1,923,696
+Added: Current liabilities 628,344 452,382
+Added: Noncurrent liabilities 626,479 637,850
+Added: 2021 2020 2019
+Added: (Dollars in thousands)
+Added: Net sales $ 6,897,330 $ 5,976,835 $ 6,603,450
+Added: Gross profit 541,718 347,209 319,296
+Added: Net earnings 247,544 80,328 118,251
+Added: Earnings attributable to CHS Inc.
+Added: 43,339 ( 1,432 ) 3,572
Our investments in other equity method investees are not significant in relation to our consolidated financial statements, either individually or in the aggregate.
Note 7 Property, Plant and Equipment
−Removed: As of August 31, 2020 and 2019, major classes of property, plant and equipment, which include finance lease assets, consisted of the amounts in the table below.
+Added: Major classes of property, plant and equipment, including finance lease assets, are summarized in the table below as of August 31, 2021 and 2020.
(Dollars in thousands)
8 unchanged sentences
Property, plant and equipment are stated at cost less accumulated depreciation and amortization.
−Removed: Depreciation and amortization are provided on the straight-line method by charges to operations at rates based on the expected useful lives of individual or groups of assets (generally 15 to 20 years for land improvements;
−Removed: 20 to 40 years for buildings;
−Removed: five to 20 years for machinery and equipment;
−Removed: and three to 10 years for office equipment and other).
+Added: Depreciation and amortization are provided on the straight-line method by charges to operations at rates based on the expected useful lives of individual or groups of assets (generally 15 to 20 years for land improvements, 20 to 40 years for buildings, five to 20 years for machinery and equipment, and three to 10 years for office equipment and other).
Expenditures for maintenance and minor repairs and renewals are expensed.
5 unchanged sentences
If these indicators suggest the carrying amounts of an asset or asset group may not be recoverable, potential impairment is evaluated using undiscounted estimated future cash flows.
−Removed: Should the sum of the expected future net cash flows be less than the carrying value, an impairment loss would be recognized.
+Added: Should the sum of the expected future net cash flows be less than the carrying value, an impairment loss
+Added: would be recognized.
An impairment loss would be measured as the amount by which the carrying value of the asset or asset group exceeds its fair value.
−Removed: No significant impairments were identified during fiscal 2020;
−Removed: however, as a result of these monitoring activities, our Ag segment recorded impairment charges of approximately $ 12.2 million associated with certain nonstrategic long-lived assets that ceased operation during fiscal 2019.
−Removed: These impairments were included in marketing, general and administrative expenses in the Consolidated Statements of Operations.
+Added: No significant impairments were identified during fiscal 2021, fiscal 2020 or fiscal 2019.
We have asset retirement obligations with respect to certain of our refineries and other assets due to various legal obligations to clean and/or dispose of the component parts at the time they are retired.
3 unchanged sentences
When a date or range of dates can reasonably be estimated for the retirement of any component part of a refinery or other asset, we estimate the cost of performing the retirement activities and record a liability for the fair value of that future cost.
−Removed: We have other assets that we may be obligated to dismantle at the end of corresponding lease terms subject to lessor discretion for which we have recorded asset retirement obligations.
+Added: We have other assets that we may be obligated to dismantle at the end of corresponding lease terms subject to the lessor's discretion for which we have recorded asset retirement obligations.
Based on our estimates of timing, cost and probability of removal, these obligations are not material.
4 unchanged sentences
Customer lists, trademarks and other intangible assets 58,395 65,025
−Removed: Notes receivable 109,145 189,045
−Removed: Long-term derivative assets 21,157 36,408
−Removed: Prepaid pension and other benefits 106,209 73,100
+Added: Notes receivable (Note 3) 73,713 109,145
+Added: Long-term derivative assets (Note 15) 21,567 21,157
+Added: Prepaid pension and other benefits (Note 13) 119,825 106,209
Capitalized major maintenance 196,641 228,511
Cash value life insurance 147,682 130,673
−Removed: Operating lease right of use assets 257,834 —
+Added: Operating lease right of use assets (Note 19) 253,451 257,834
Other 55,333 48,471
5 unchanged sentences
Goodwill is assessed for impairment at the reporting unit level, which has been determined to be our operating segments or one level below our operating segments in certain instances.
+Added: Changes in the net carrying amount of goodwill for the year ended August 31, 2021, are included in the table below.
There were no changes in the net carrying amount of goodwill for the year ended August 31, 2020.
−Removed: Changes in the net carrying amount of goodwill for the year ended August 31, 2019, by segment, are as follows:
Energy Ag Corporate
2 unchanged sentences
Balances, August 31, 2020 $ 552 $ 161,278 $ 10,574 $ 172,404
−Removed: Goodwill acquired during the period — 61,358 — 61,358
−Removed: Impairment — ( 27,418 ) — ( 27,418 )
+Added: Goodwill disposed of during the period — ( 803 ) — ( 803 )
Balances, August 31, 2021 $ 552 $ 160,475 $ 10,574 $ 171,601
−Removed: Goodwill of $ 61.4 million acquired during the third quarter of fiscal 2019 was related to our acquisition of the remaining 75 % ownership in West Central Distribution, LLC ("WCD") that we did not previously own.
−Removed: See Note 20, Acquisitions , for additional information related to the acquisition.
−Removed: No goodwill has been allocated to our Nitrogen Production segment, which consists of a single investment accounted for under the equity method.
−Removed: The outbreak and pandemic of the novel coronavirus known as COVID-19 and other factors resulted in substantial reductions in demand and sharp price declines in certain industries in which we operate during fiscal 2020, particularly with respect to the production of renewable fuels, other energy products and processing and food ingredients.
−Removed: Based on these deteriorated macroeconomic and industry conditions, management considered the impacts on each of our businesses and determined that we needed to perform interim impairment assessments of goodwill and asset groups, during our third quarter, for a reporting unit within our Ag segment that operates in the renewable fuels industry.
−Removed: Third-party price outlooks, projections of future volumes, expenses and other cash flows and a discount rate reflective of the relative risk of the cash flows were used to estimate fair value.
−Removed: Management believes the assumptions utilized in the assessment are appropriate and reasonable for estimating fair value.
−Removed: The estimated fair value of the reporting unit exceeded the carrying amount by approximately 18%, and thus no impairment was recorded.
−Removed: As a result of our annual goodwill impairment analyses performed as of July 31, 2019, we recorded a goodwill impairment charge of $ 27.4 million associated with a reporting unit in our Ag segment.
+Added: No goodwill has been allocated to our Nitrogen Production or Foods segments, which each consist of a single investment accounted for under the equity method.
+Added: No goodwill impairments were identified as a result of our annual goodwill analyses performed as of July 31, 2021 or 2020.
+Added: However, as a result of our annual goodwill impairment analyses performed as of July 31, 2019, we recorded a goodwill impairment charge of $ 27.4 million associated with a reporting unit in our Ag segment.
The impairment charge primarily resulted from changing market dynamics that reduced future profitability within the reporting unit, as well as strategy changes and the challenging economic environment in the agriculture industry.
−Removed: The impairment charge was recorded in marketing,
−Removed: general and administrative expenses in the Consolidated Statement of Operations for the year ended August 31, 2019.
−Removed: No material impairments related to long-lived assets were recorded, and no goodwill impairments were identified as a result of our annual goodwill analyses performed as of July 31, 2020 or 2018.
−Removed: Management will continue to monitor the results and projected cash flows for each of our businesses to assess whether any reserves or impairments may be necessary in the future, particularly for our businesses that have experienced or could experience substantial reductions in demand or price declines associated with the COVID-19 pandemic.
+Added: The impairment charge was recorded in marketing, general and administrative expenses in the Consolidated Statement of Operations for the year ended August 31, 2019.
+Added: Management will continue to monitor the results and projected cash flows for each of our businesses to assess whether any reserves or impairments may be necessary in the future, particularly for our businesses that have experienced or could experience substantial reductions in demand or price declines associated with the COVID-19 pandemic or other factors.
Intangible assets subject to amortization primarily include customer lists, trademarks and noncompete agreements, and are amortized over their respective useful lives (ranging from two to 30 years).
2 unchanged sentences
GAAP and evaluated for impairment whenever triggering events or other circumstances indicate the carrying amount of an asset group or reporting unit may not be recoverable.
−Removed: Intangible assets of $ 47.2 million were acquired during fiscal 2019 related to the acquisition of the remaining 75 % ownership interest in WCD that we did not previously own.
−Removed: See Note 20, Acquisitions , for additional information related to the acquisition.
Information regarding intangible assets is as follows:
6 unchanged sentences
Intangible asset amortization expense for the years ended August 31, 2021, 2020 and 2019, was $ 6.9 million, $ 7.3 million and $ 5.3 million, respectively.
−Removed: The estimated annual amortization expense related to intangible assets subject to amortization for the next five years is as follows:
+Added: The estimated annual amortization expense related to intangible assets subject to amortization for future years is as follows:
(Dollars in thousands)
8 unchanged sentences
2019 130,780 224,406 ( 68,296 ) 286,890
−Removed: Within our Energy segment, major maintenance activities are performed at our Laurel, Montana, and McPherson, Kansas, refineries regularly.
+Added: Within our Energy segment, major maintenance activities are regularly performed at our Laurel, Montana, and McPherson, Kansas, refineries.
Major maintenance activities are the planned and required shutdowns of refinery processing units, which include replacement or overhaul of equipment that has experienced decreased efficiency in resource conversion.
Because major maintenance activities are performed to extend the life, increase the capacity and/or improve the safety or efficiency of refinery processing assets, we follow the deferral method of accounting for major maintenance activities.
−Removed: Expenditures for major maintenance activities are capitalized (deferred) when incurred and amortized on a straight-line basis over a period of two to five years, which is the estimated time lapse between major maintenance activities.
−Removed: Should the estimated period between
−Removed: major maintenance activities change, we may be required to amortize the remaining cost of the major maintenance activities over a shorter period, which would result in higher depreciation and amortization costs.
+Added: Expenditures for major maintenance activities are capitalized (deferred) when incurred and amortized on a straight-line basis
+Added: over a period of two to five years, which is the estimated time lapse between major maintenance activities.
+Added: Should the estimated time between major maintenance activities change, we may be required to amortize the remaining cost of the major maintenance activities over a shorter period, which would result in higher depreciation and amortization costs.
Amortization expense related to the capitalized major maintenance costs is included in cost of goods sold in our Consolidated Statements of Operations.
15 unchanged sentences
The credit facility provides a committed amount of $ 2.75 billion that expires on July 16, 2024.
−Removed: We maintain a series of uncommitted bilateral facilities that are renewed annually.
−Removed: Amounts borrowed under these short-term credit facilities are used to fund our working capital.
−Removed: The following table summarizes our primary lines of credit as of August 31, 2020 and 2019:
−Removed: Primary Revolving Credit Facilities Fiscal Year
−Removed: of Maturity Total Capacity Borrowings Outstanding Interest Rates
−Removed: 2020 2020 2019
−Removed: (Dollars in thousands)
−Removed: Committed five-year unsecured facility 2024 $ 2,750,000 $ 345,000 $ 335,000 LIBOR or base rate +0.00% to 1.55 %
−Removed: Uncommitted bilateral facilities* 2021 300,000 — 430,000 LIBOR or base rate + applicable margin
−Removed: *Total capacity for the uncommitted bilateral facilities was $ 630.0 million at August 31, 2019.
−Removed: As of August 31, 2020, the uncommitted bilateral facilities do not include $300.0 million of capacity with a banking partner for which we are currently in the process of terminating the related agreement.
−Removed: In addition to our facilities above, our wholly-owned subsidiaries, CHS Europe S.a.r.l.
−Removed: and CHS Agronegocio Industria e Comercio Ltda, had uncommitted lines of credit with $ 318.4 million outstanding as of August 31, 2020.
−Removed: In addition, our other international subsidiaries had lines of credit outstanding of $ 69.7 million as of August 31, 2020.
+Added: As of August 31, 2021, there were no borrowings outstanding on this facility, and $ 345.0 million outstanding as of August 31, 2020.
+Added: We also maintain certain uncommitted bilateral facilities to support our working capital needs with borrowings outstanding of $ 335.0 million as of August 31, 2021, and no borrowings outstanding as of August 31, 2020.
+Added: In addition to our facilities referenced above, our wholly-owned subsidiaries, CHS Europe S.a.r.l.
+Added: and CHS Agronegocio Industria e Comercio Ltda have lines of credit with $ 268.0 million outstanding as of August 31, 2021, and our other international subsidiaries have lines of credit with $ 204.3 million outstanding as of August 31, 2021.
CHS Capital Notes Payable
4 unchanged sentences
The amount available under the Securitization Facility fluctuates over time based on the total amount of eligible Receivables generated during the normal course of business.
−Removed: As of August 31, 2020, total availability under the Securitization Facility was $ 423.0 million, all of which had been utilized.
+Added: As of August 31, 2021, total availability under the Securitization Facility was $ 671.9 million, $ 600.0 million of which had been utilized.
We also have a repurchase facility ("Repurchase Facility") related to the Securitization Facility.
1 unchanged sentence
As of August 31, 2021 and 2020, the outstanding balance under the Repurchase Facility was $ 150.0 million.
−Removed: On June 26, 2020, we amended our existing Securitization Facility and Repurchase Facility.
−Removed: As a result of the amendment, the maximum availability of the Securitization Facility was decreased from $ 700.0 million to $ 500.0 million.
−Removed: On September 24, 2020 the Securitization Facility and Repurchase Facility were further amended increasing the maximum availability under the Securitization Facility to $ 600.0 million from $ 500.0 million and extending their respective termination dates to July 30, 2021.
+Added: On September 24, 2020, the Securitization Facility and Repurchase Facility were amended, increasing the maximum availability under the Securitization Facility to $ 600.0 million from $ 500.0 million and extending termination dates to July 30, 2021 and September 24, 2021, respectively.
+Added: On July 30, 2021 the Securitization Facility was further amended to extend its
+Added: termination date to August 31, 2021.
+Added: Subsequently on August 31, 2021, the Securitization Facility and Repurchase Facility were again amended, increasing the maximum committed availability under the Securitization Facility to $ 700.0 million from $ 600.0 million, adding a $ 250.0 million uncommitted portion to the Securitization Facility, and extending their respective maturity dates to August 30, 2022.
CHS Capital sells loan commitments it has originated to Compeer Financial, PCA, d/b/a ProPartners Financial on a recourse basis.
−Removed: The total outstanding commitments under the program were $ 150.0 million as of August 31, 2020, of which $ 133.3 million was borrowed under these commitments with an interest rate of 1.45 %.
+Added: The total outstanding commitments under the program were $ 150.0 million as of August 31, 2021, of which $ 49.9 million was borrowed under these commitments.
+Added: On September 29, 2021, the total commitments under the program were reduced to $ 100.0 million.
CHS Capital borrows funds under short-term notes issued as part of a surplus funds program.
−Removed: Borrowings under this program are unsecured and bear interest at variable rates ranging from 0.35 % to 1.40 % as of August 31, 2020, and are due upon demand.
+Added: Borrowings under this program are unsecured and are due upon demand.
Borrowings under these notes totaled $ 132.3 million as of August 31, 2021.
−Removed: On September 30, 2019, CHS Capital entered into a credit agreement with a revolving note.
−Removed: Under this agreement, CHS Capital had available capacity of $ 100.0 million of which no amount was outstanding as of August 31, 2020.
−Removed: This agreement matured subsequent to August 31, 2020, and was not renewed.
Long-Term Debt
During the year ended August 31, 2021, we repaid approximately $ 547.3 million of long-term debt consisting of scheduled debt maturities and optional prepayments.
−Removed: On August 14, 2020, we entered into a Note Purchase Agreement to borrow $ 375.0 million of long-term debt in the form of notes that was funded on November 2, 2020.
+Added: On August 14, 2020, we entered into a Note Purchase Agreement to borrow $ 375.0 million of long-term debt in the form of notes that were funded on November 2, 2020.
Amounts included in long-term debt on our Consolidated Balance Sheets as of August 31, 2021 and 2020, are presented in the table below:
1 unchanged sentence
4.00 % unsecured notes $ 100 million face amount, due in equal installments beginning in fiscal 2017 through fiscal 2021
−Removed: $ 20,000 $ 40,000
4.52 % unsecured notes $ 160 million face amount, due in fiscal 2021
−Removed: 162,090 161,978
4.67 % unsecured notes $ 130 million face amount, due in fiscal 2023
13 unchanged sentences
3.24 % unsecured notes $ 95 million face amount, due in fiscal 2027
+Added: 4.74 % unsecured notes $ 95 million face amount, due in fiscal 2028
95,000 95,000
3.48 % unsecured notes $ 100 million face amount, due in fiscal 2030
+Added: 4.89 % unsecured notes $ 100 million face amount, due in fiscal 2031
100,000 100,000
3.58 % unsecured notes $ 65 million face amount, due in fiscal 2032
+Added: 4.71 % unsecured notes $ 100 million face amount, due in fiscal 2033
100,000 100,000
3.73 % unsecured notes $ 115 million face amount, due in fiscal 2035
+Added: 5.40 % unsecured notes $ 125 million face amount, due in fiscal 2036
125,000 125,000
1 unchanged sentence
2.25 % unsecured term loans from cooperative and other banks, due in fiscal 2025 (a)
−Removed: 366,000 366,000
Bank financing — 366,000
8 unchanged sentences
As of August 31, 2021, the fair value of our long-term debt is estimated to be $ 1.7 billion based on quoted market prices of similar debt (a Level 2 fair value measurement based on the classification hierarchy of ASC Topic 820, Fair Value Measurement ).
−Removed: We have a 10 -year term loan with a syndicate of banks.
−Removed: The agreement provides for committed term loans in an amount up to $ 600.0 million.
−Removed: As of August 31, 2020, $ 236.0 million of term loans were outstanding under this agreement.
−Removed: The agreement includes a revolving feature, whereby we are able to pay down and re-advance an amount up to $ 300.0 million of the $ 600.0 million.
−Removed: As of August 31, 2020, $ 130.0 million of revolving loans were outstanding under this agreement.
−Removed: Principal on the outstanding balances is payable in full in September 2025.
+Added: On February 19, 2021, we amended our 10-year term loan facility to convert the entire $ 366.0 million aggregate principle amount outstanding thereunder into a revolving loan, which can be paid down and readvanced in an amount up to the referenced $ 366.0 million until February 19, 2022.
+Added: On February 19, 2022, the total funded loan balance outstanding reverts to a nonrevolving term loan that is payable on September 4, 2025.
+Added: There was no balance outstanding under this facility as of August 31, 2021.
Long-term debt outstanding as of August 31, 2021, has aggregate maturities, excluding fair value adjustments and finance leases (see Note 19, Leases , for a schedule of minimum future lease payments under finance leases), as follows:
10 unchanged sentences
Derivative liabilities (Note 15) 449,522 416,204
−Removed: Dividends and equity payable 63,000 180,000
+Added: Dividends and equity payable (Note 12) 150,000 63,000
Total other current liabilities $ 1,307,929 $ 928,843
30 unchanged sentences
Other 92,325 85,856
−Removed: Deferred tax assets valuation reserve ( 219,891 ) ( 246,344 )
+Added: Deferred tax assets valuation allowance ( 208,810 ) ( 219,891 )
Total deferred tax assets 681,207 609,421
2 unchanged sentences
Investments 110,910 95,916
−Removed: Major maintenance 91 4,679
Property, plant and equipment 557,129 556,160
−Removed: Right of use asset 64,140 —
+Added: Right of use assets 61,870 64,140
Other 28,549 15,417
1 unchanged sentence
Net deferred tax liabilities $ 101,528 $ 139,343
−Removed: We have total gross loss carryforwards of $ 576.6 million, of which $ 366.9 million will expire over periods ranging from fiscal 2021 to fiscal 2041.
+Added: We have total gross loss carryforwards of $ 527.5 million, as of August 31, 2021, of which $ 304.4 million will expire over periods ranging from fiscal 2022 to fiscal 2042.
The remainder will carry forward indefinitely.
1 unchanged sentence
If our estimates prove inaccurate, adjustments to the valuation allowances may be required in the future with gains or losses being charged to income in the period such determination is made.
−Removed: McPherson refinery's gross state tax credit carryforwards for income tax were approximately $ 125.5 million and $ 123.3 million as of August 31, 2020 and 2019, respectively.
+Added: McPherson refinery's gross state tax credit carryforwards for income tax were approximately $ 129.7 million and $ 125.5 million
+Added: as of August 31, 2021 and 2020, respectively.
McPherson refinery's valuation allowance on Kansas state credits is necessary due to the limited amount of taxable income generated in Kansas by the combined group on an annual basis.
−Removed: On March 27, 2020, the Coronavirus Aid, Relief and Economic Security ("CARES") Act was signed into law.
−Removed: As a result, our alternative minimum tax credit became refundable and has been classified in other current assets on the Consolidated Balance Sheet as of August 31, 2020.
−Removed: Our general business credits of $ 59.1 million, comprised primarily of low-sulfur diesel credits, will begin to expire on August 31, 2027, and our state tax credits of $ 125.5 million began to expire on August 31, 2020.
+Added: Our general business credits of $ 44.1 million, comprised primarily of low-sulfur diesel credits, will begin to expire on August 31, 2027, and our state tax credits of $ 129.7 million will begin to expire on August 31, 2022.
The reconciliation of the statutory federal income tax rates to the effective tax rates for the years ended August 31, 2021, 2020 and 2019 is as follows:
6 unchanged sentences
statutory rate 0.5 1.8 ( 2.1 )
−Removed: tax reform — — ( 23.2 )
Intercompany transfer of business assets ( 4.7 ) ( 1.6 ) —
4 unchanged sentences
Effective tax rate ( 7.4 ) % ( 9.5 ) % ( 1.5 ) %
−Removed: On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Act") was enacted into law.
−Removed: The Tax Act provides for significant U.S.
−Removed: tax law changes that reduced our federal corporate statutory tax rate from 35% to 21% as of January 1, 2018.
−Removed: As a fiscal year-end taxpayer, our annual statutory federal corporate tax rate applicable to fiscal 2018 was a blended rate of 25.7 %.
−Removed: For fiscal 2020 and fiscal 2019, the annual statutory federal corporate tax rate was 21%.
−Removed: Primary drivers of the fiscal 2020 income tax benefit were retaining the current Domestic Production Activities Deduction ("DPAD") benefit and from the settlement of a U.S.
−Removed: federal audit resulting in additional tax credit carryovers, which were partially offset by an increase in our unrecognized deferred tax benefit.
−Removed: Primary drivers of the fiscal 2019 income tax benefit were retaining the current DPAD benefit and deducting previously disallowed DPAD available from the carryback of excise tax credits, which were partially offset by an increase in our unrecognized deferred tax benefit as described below.
−Removed: Primary drivers of the fiscal 2018 income tax benefit were recognition of deferred benefits from revaluation of our net deferred tax liability resulting from the Tax Act, an intercompany transfer of a business on December 1, 2017, and a current tax benefit from retaining a significant portion of the DPAD, which were partially offset by deferred tax expense from an increase in our unrecognized tax benefit as described below.
+Added: Primary drivers of the fiscal 2021 income tax benefit were retaining the current Domestic Production Activities Deduction ("DPAD") benefit and from tax planning associated with certain assets.
+Added: Primary drivers of the fiscal 2020 income tax benefit were retaining the current DPAD benefit and the settlement of a U.S.
+Added: federal audit, resulting in additional tax credit carryovers, which were partially offset by an increase in our uncertain tax position.
+Added: Primary drivers of the fiscal 2019 income tax benefit were retaining the current DPAD benefit and deducting previously disallowed DPAD available from the carryback of excise tax credits, which were partially offset by an increase in our unrecognized deferred tax benefit.
We file income tax returns in the U.S.
1 unchanged sentence
Our uncertain tax positions are affected by the tax years that are under audit or remain subject to examination by the relevant taxing authorities.
−Removed: In addition to the current year, fiscal 2007 through 2019 remain subject to examination, at least for certain issues.
+Added: In addition to the current year, fiscal 2007 through 2020 remain subject to examination for certain issues.
Reserves are recorded against unrecognized tax benefits when we believe certain fully supportable tax return positions are likely to be challenged and we may or may not prevail.
If we determine that a tax position is more likely than not to be sustained upon audit, based on the technical merits of the position, we recognize the benefit by measuring the amount that is greater than 50% likely of being realized.
−Removed: We reevaluate the technical merits of our tax positions and recognize an uncertain tax benefit, or derecognize a previously recorded tax benefit, when there is (i) a completion of a tax audit, (ii) effective settlement of an issue, (iii) a change in applicable tax law including a tax case or legislative guidance, or (iv) expiration of the applicable statute of limitations.
+Added: We reevaluate the technical merits of our tax positions and recognize an uncertain tax benefit, or derecognize a previously recorded tax benefit, when there is (i) completion of a tax audit, (ii) effective settlement of an issue, (iii) a change in applicable tax law including a tax case or legislative guidance, or (iv) expiration of the applicable statute of limitations.
Significant judgment is required in accounting for tax reserves.
10 unchanged sentences
We recognize interest and penalties related to unrecognized tax benefits in our provision for income taxes.
−Removed: We recognized $ 1.0 million benefit and $ 1.7 million expense for interest and penalties related to unrecognized tax benefits in our Consolidated Statement of Operations for the years ended August 31, 2020 and 2019, respectively, and a related $ 1.0 million and $ 2.9 million interest payable on our Consolidated Balance Sheet as of August 31, 2020 and 2019, respectively.
−Removed: No interest or penalties were recognized in our Consolidated Statements of Operations for the year ended August 31, 2018.
+Added: We recognized benefits of $ 1.4 million and $ 1.0 million and expense of $ 1.7 million for interest and penalties related to unrecognized tax benefits in our Consolidated Statements of Operations for the years ended August 31, 2021, 2020 and 2019, respectively, and a related $ 2.5 million, $ 1.0 million and $ 2.9 million interest payable on our Consolidated Balance Sheets as of August 31, 2021, 2020 and 2019, respectively.
Note 12 Equities
4 unchanged sentences
No portion of annual net earnings for fiscal 2021 will be issued in the form of qualified capital equity certificates.
−Removed: Patronage distributions for the years ended August 31, 2019, 2018 and 2017 were $ 564.5 million (with a $ 90.1 million cash portion), $ 428.8 million (with a $ 75.8 million cash portion) and $ 128.8 million (with no cash portion), respectively.
+Added: The following table presents estimated patronage distributions for the year ending August 31, 2022, and actual patronage distributions for the years ended August 31, 2021, 2020 and 2019:
+Added: 2022 2021 2020 2019
+Added: (Dollars in millions)
+Added: Patronage distributed in cash $ 50.0 $ 30.0 $ 90.1 $ 75.8
+Added: Patronage distributed in equity 230.3 214.8 474.4 353.0
+Added: Total patronage distributed $ 280.3 $ 244.8 $ 564.5 $ 428.8
Annual net earnings from patronage or other sources may be added to the unallocated capital reserve or, upon action by the Board of Directors, may be allocated to members in the form of nonpatronage equity certificates.
2 unchanged sentences
Redemptions of capital equity certificates approved by the Board of Directors are divided into two pools, one for nonindividuals (primarily member cooperatives) who may participate in an annual redemption program for qualified equities held by them and another for individual members who are eligible for equity redemptions at age 70 or upon death.
−Removed: The CHS redemption policy includes a redemption program for individuals similar to the one that is available to nonindividual members, subject to CHS Board of Directors overall discretion whether to redeem outstanding equity.
−Removed: In accordance with authorization from the Board of Directors, we expect total redemptions related to the year ended August 31, 2020, that will be distributed in fiscal 2021, to be approximately $ 33.0 million.
+Added: The CHS redemption policy includes a redemption program for individuals similar to the one that is available to nonindividual members, subject to Board of Directors overall discretion whether to redeem outstanding equity.
+Added: In accordance with authorization from the Board of Directors, we expect total redemptions related to the year ended August 31, 2021, which will be distributed in fiscal 2022, to be approximately $ 100.0 million.
This amount is classified as a current liability on our August 31, 2021, Consolidated Balance Sheet.
21 unchanged sentences
We made dividend payments on our preferred stock of $ 168.7 million during each of the years ended August 31, 2021, 2020 and 2019.
−Removed: As of August 31, 2020, we have no authorized but unissued shares of preferred stock.
+Added: As of August 31, 2021, the Board of Directors had not authorized the issuance of any preferred shares that were not outstanding.
The following is a summary of dividends per share by series of preferred stock for the years ended August 31, 2021 and 2020:
17 unchanged sentences
Balance as of August 31, 2018, net of tax $ ( 140,335 ) $ 8,861 $ ( 5,882 ) $ ( 62,559 ) $ ( 199,915 )
−Removed: $ ( 132,444 ) $ 10,041 $ ( 6,954 ) $ ( 51,003 ) $ ( 180,360 )
Other comprehensive income (loss), before tax:
6 unchanged sentences
( 32,559 ) — 20,196 ( 9,949 ) ( 22,312 )
−Removed: Reclassification of tax effects to capital reserves
−Removed: ( 27,957 ) 1,968 ( 1,468 ) 465 ( 26,992 )
+Added: Reclassifications 416 ( 8,861 ) 983 2,756 ( 4,706 )
Balance as of August 31, 2019, net of tax ( 172,478 ) — 15,297 ( 69,752 ) ( 226,933 )
−Removed: ( 140,335 ) 8,861 ( 5,882 ) ( 62,559 ) ( 199,915 )
Other comprehensive income (loss), before tax:
6 unchanged sentences
12,798 — ( 4,411 ) ( 15,378 ) ( 6,991 )
−Removed: Reclassifications
−Removed: 416 ( 8,861 ) 983 2,756 ( 4,706 )
Balance as of August 31, 2020, net of tax ( 159,680 ) — 10,886 ( 85,130 ) ( 233,924 )
−Removed: ( 172,478 ) — 15,297 ( 69,752 ) ( 226,933 )
Other comprehensive income (loss), before tax:
7 unchanged sentences
Balance as of August 31, 2021, net of tax $ ( 141,385 ) $ — $ 4,824 $ ( 79,830 ) $ ( 216,391 )
−Removed: $ ( 159,680 ) $ — $ 10,886 $ ( 85,130 ) $ ( 233,924 )
Amounts reclassified from accumulated other comprehensive income (loss) were related to pension and other postretirement benefits, cash flow hedges, available-for-sale investments and foreign currency translation adjustments.
Pension and other postretirement reclassifications include amortization of net actuarial loss, prior service credit and transition amounts and are recorded as cost of goods sold and marketing, general and administrative expenses (see Note 13, Benefit Plans , for further information).
−Removed: Gains or losses on the sale of available-for-sale investments are recorded to other income.
−Removed: Foreign currency translation reclassifications related to sales of businesses are recorded to other income.
+Added: Gains or losses on the sale of available-for-sale investments and foreign currency translation reclassifications related to sales of businesses are recorded in other income.
+Added: As described in Note 15, Derivative Financial Instruments and Hedging Activities , amounts reclassified from accumulated other comprehensive loss for cash flow hedges are recorded in cost of goods sold.
Note 13 Benefit Plans
−Removed: We have various pension and other defined benefit as well as defined contribution plans in which substantially all employees may participate.
+Added: We have various pension and other defined benefits as well as defined contribution plans in which substantially all employees may participate.
We also have nonqualified supplemental executive and Board retirement plans.
54 unchanged sentences
Net periodic benefit cost (benefit) $ 40,119 $ 38,950 $ 34,609 $ 804 $ 818 $ 1,176 $ ( 131 ) $ ( 40 ) $ ( 36 )
+Added: Plan assumptions for the years ended August 31, 2021, 2020 and 2019, are as follows:
+Added: Pension Benefits Nonqualified
+Added: Pension Benefits Other Benefits
+Added: 2021 2020 2019 2021 2020 2019 2021 2020 2019
Weighted-average assumptions to determine the net periodic benefit cost:
+Added: Interest credit rate for cash balance plans 4.65 % 4.65 % 4.65 % 4.65 % 4.65 % 4.65 % N/A N/A N/A
Discount rate 2.65 % 3.06 % 4.23 % 2.07 % 2.70 % 4.09 % 2.43 % 2.89 % 4.08 %
24 unchanged sentences
A significant assumption for pension costs and obligations is the discount rate.
−Removed: We utilize a full-yield curve approach by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows.
+Added: We utilize a full-yield curve approach by applying the specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant
+Added: projected cash flows.
The discount rate reflects the rate at which the associated benefits could be effectively settled as of the measurement date.
13 unchanged sentences
During fiscal 2021, we made a discretionary contribution of $ 23.2 million to the pension plans.
−Removed: Based on the funded status of the qualified pension plans as of August 31, 2020, we do not believe we will be required to contribute to these plans in fiscal 2021, although we may voluntarily elect to do so.
+Added: Based on the funded status of the qualified pension plans as of August 31, 2021, we do not currently believe we will be required to contribute to these plans in fiscal 2022, although we may voluntarily elect to do so.
We expect to pay $ 4.2 million to participants of the nonqualified pension and postretirement benefit plans during fiscal 2022.
32 unchanged sentences
Partnership and joint venture interests measured at net asset value (1)
−Removed: Other assets measured at net asset value (1)
Total $ 11,383 $ — $ — $ 993,124
8 unchanged sentences
Partnership and joint venture interests measured at net asset value (1)
−Removed: — — — 101,641
Other assets measured at net asset value (1)
1 unchanged sentence
(1) In accordance with ASC Topic 820-10, Fair Value Measurement, certain assets that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy.
−Removed: The fair value amounts presented in the tables above are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of net assets.
+Added: The fair value amounts presented in the tables above are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the "Financial information on changes in projected benefit obligation, plan assets funded and balance sheet status" table above.
Definitions for valuation levels are found in Note 16, Fair Value Measurements .
10 unchanged sentences
The net asset value is based on the fair value of the underlying assets owned by the trust, minus its liabilities, then divided by the number of units outstanding.
−Removed: Redemptions of these interests generally require a 45- to 60-day notice period.
+Added: Redemptions of these interests generally require a 45- to 60-day notice.
Other assets.
1 unchanged sentence
defined benefit pension plans.
−Removed: We are one of approximately 400 employers that contribute to the Co-op Retirement Plan ("Co-op Plan"), which is a defined benefit plan constituting a "multiple employer plan" under the Internal Revenue Code of 1986, as amended, and a
−Removed: "multiemployer plan" under the accounting standards.
+Added: We are one of approximately 400 employers that contribute to the Co-op Retirement Plan ("Co-op Plan"), which is a defined benefit plan constituting a "multiple employer plan" under the Internal Revenue Code of 1986, as amended, and a "multiemployer plan" under the accounting standards.
The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:
20 unchanged sentences
Note 14 Segment Reporting
−Removed: We are an integrated agricultural enterprise, providing grain, foods and energy resources to businesses and consumers on a global basis.
−Removed: We provide a wide variety of products and services, from initial agricultural inputs such as fuels, farm supplies, crop nutrients and crop protection products, to agricultural outputs that include grains and oilseeds, grain and oilseed processing and food products, and the production and marketing of ethanol.
+Added: We are an integrated agricultural cooperative, providing grain, foods and energy resources to businesses and consumers on a global basis.
+Added: We provide a wide variety of products and services, from initial agricultural inputs such as fuels, farm supplies, crop nutrients and crop protection products, to agricultural outputs that include grains and oilseeds, processed grains and oilseeds, renewable fuels and food products.
We define our operating segments in accordance with ASC Topic 280, Segment Reporting , to reflect the manner in which our chief operating decision maker, our Chief Executive Officer, evaluates performance and allocates resources in managing the business.
−Removed: We have aggregated those operating segments into three reportable segments:
−Removed: Energy, Ag and Nitrogen Production.
+Added: We have aggregated those operating segments into four reportable segments:
+Added: Energy, Ag, Nitrogen Production and Foods.
Our Energy segment produces and provides primarily for the wholesale distribution of petroleum products and transportation of those products.
2 unchanged sentences
and produces and markets ethanol.
−Removed: Our Nitrogen Production segment consists solely of our equity method investment in CF Nitrogen, which entitles us, pursuant to a supply agreement that we entered with CF Nitrogen, to purchase up to a specified quantity of granular urea and UAN annually from CF Nitrogen.
−Removed: Corporate and Other represents our financing and hedging
−Removed: businesses, which primarily consists of a U.S.
−Removed: Commodity Futures Trading Commission-regulated futures commission merchant for commodities hedging, financial services related to crop production, and insurance which was disposed of in May 2018.
−Removed: Our nonconsolidated investments in Ventura Foods and Ardent Mills are also included in our Corporate and Other category.
+Added: Our Nitrogen Production segment consists of our equity method investment in CF
+Added: Nitrogen and allocated expenses, which entitles us, pursuant to a supply agreement that we entered with CF Nitrogen, to purchase up to a specified quantity of granular urea and UAN annually from CF Nitrogen.
+Added: Our Foods segment consists of our equity method investment in Ventura Foods and allocated expenses.
+Added: Prior to August 31, 2021, Ventura Foods was reported as a component of Corporate and Other.
+Added: Reported segment results and balances prior to August 31, 2021, have been recast to reflect the addition of the Foods segment.
+Added: There were no changes to the composition of our Energy, Ag or Nitrogen Production segments as a result of the addition of the Foods segment.
+Added: Corporate and Other represents our financing and hedging businesses, which primarily consists of a U.S.
+Added: Commodity Futures Trading Commission-regulated futures commission merchant ("FCM") for commodities hedging and financial services related to crop production.
+Added: Our nonconsolidated investment in Ardent Mills is also included in our Corporate and Other category.
Corporate administrative expenses and interest are allocated to each reportable segment, along with Corporate and Other, based on direct use for services, such as information technology and legal, and other factors or considerations relevant to the costs incurred.
−Removed: Many of our business activities are highly seasonal and operating results vary throughout the year.
−Removed: For example, in our Ag segment, our country operations business generally experiences higher volumes and income during the spring planting season and during the fall harvest season and our agronomy business generally experiences higher volumes and income during the spring planting season.
−Removed: Our global grain marketing operations are also subject to fluctuations in volume and earnings based on producer harvests, world grain prices and demand.
−Removed: Our Energy segment generally experiences higher volumes and profitability in certain operating areas, such as refined products, in the summer and early fall when gasoline and diesel fuel usage is highest and is subject to global supply and demand forces.
−Removed: Other energy products, such as propane, may experience higher volumes and profitability during the winter heating and crop-drying seasons.
+Added: Many of our business activities are highly seasonal and our operating results vary throughout the year.
+Added: For example, in our Ag segment, our country operations business generally experiences higher volumes and revenues during the fall harvest and spring planting seasons, which generally correspond to our first and third fiscal quarters, respectively.
+Added: Additionally, our agronomy business generally experiences higher volumes and revenues during the spring planting season.
+Added: Our global grain and processing operations are subject to fluctuations in volume and revenues based on producer harvests, world grain prices, demand and international trade relationships.
+Added: Our Energy segment generally experiences higher volumes and revenues in certain operating areas, such as refined products, in the spring, summer and early fall when gasoline and diesel fuel use by agricultural producers is highest and is subject to global supply and demand forces.
+Added: Other energy products, such as propane, generally experience higher volumes and revenues during the winter heating and fall crop-drying seasons.
Our revenues, assets and cash flows can be significantly affected by global market prices for commodities such as petroleum products, natural gas, grains, oilseeds, crop nutrients and flour.
Changes in market prices for commodities that we purchase without a corresponding change in the selling prices of those products can affect revenues and operating earnings.
−Removed: Commodity prices are affected by a wide range of factors beyond our control, including the weather, crop damage due to plant disease or insects, drought, availability and adequacy of supply, availability of a reliable rail and river transportation network, outbreaks of disease, government regulations and policies, global trade disputes, and general political and economic conditions.
+Added: Commodity prices are affected by a wide range of factors beyond our control, including the weather, crop damage due to plant disease or insects, drought, availability and adequacy of supply, availability of a reliable rail and river transportation networks, outbreaks of disease, government regulations and policies, global trade disputes, and general political and economic conditions.
While our revenues and operating results are derived primarily from businesses and operations that are wholly-owned or subsidiaries and limited liability companies in which we have a controlling interest, a portion of our business operations are conducted through companies in which we hold ownership interests of 50% or less or do not control the operations.
1 unchanged sentence
In our Nitrogen Production segment, this consists of our approximate 10 % membership interest (based on product tons) in CF Nitrogen.
−Removed: In Corporate and Other, this principally includes our 50 % ownership in Ventura Foods and our 12 % ownership in Ardent Mills.
+Added: In our Foods segment, this consists of our 50 % ownership in Ventura Foods.
+Added: In Corporate and Other, this principally includes our 12 % ownership in Ardent Mills.
See Note 6, Investments , for more information related to CF Nitrogen, Ventura Foods and Ardent Mills.
2 unchanged sentences
Segment information for the years ended August 31, 2021, 2020 and 2019, is presented in the tables below.
−Removed: The fiscal 2020 and fiscal 2019 results for our Ag segment include results associated with our acquisition of the remaining 75% ownership interest in WCD that we did not previously own on March 1, 2019, which were not included in our fiscal 2018 results.
−Removed: Refer to further details related to our acquisition of the remaining 75% ownership interest in WCD that we did not previously own within Note 20, Acquisitions .
−Removed: Energy Ag Nitrogen Production Corporate
+Added: Energy Ag Nitrogen Production Foods Corporate
and Other Reconciling
Amounts Total
−Removed: (Dollars in thousands)
−Removed: For the year ended August 31, 2020
+Added: Year ended August 31, 2021 (Dollars in thousands)
Revenues, including intersegment revenues $ 6,812,478 $ 32,058,064 $ — $ — $ 46,476 $ ( 468,985 ) $ 38,448,033
2 unchanged sentences
Operating earnings (loss) ( 15,775 ) 265,362 ( 35,432 ) ( 10,617 ) 2,259 205,797
−Removed: Gain on disposal of business — ( 211 ) — ( 1,239 ) — ( 1,450 )
Interest expense 1,113 65,099 44,461 — 1,804 ( 7,912 ) 104,565
5 unchanged sentences
Total assets as of August 31, 2021
−Removed: Energy Ag Nitrogen Production Corporate
+Added: 4,286,677 7,451,559 2,683,652 388,612 2,765,775 — 17,576,275
+Added: Energy Ag Nitrogen Production Foods Corporate
and Other Reconciling
Amounts Total
−Removed: (Dollars in thousands)
−Removed: For the year ended August 31, 2019
+Added: Year ended August 31, 2020 (Dollars in thousands)
Revenues, including intersegment revenues $ 5,820,154 $ 22,940,712 $ — $ — $ 55,567 $ ( 410,068 ) $ 28,406,365
2 unchanged sentences
Operating earnings (loss) 219,861 82,543 ( 33,497 ) ( 9,847 ) 18,205 — 277,265
−Removed: Gain on disposal of business — ( 3,886 ) — — — ( 3,886 )
Interest expense 308 71,682 45,255 — 11,806 ( 12,074 ) 116,977
5 unchanged sentences
Total assets as of August 31, 2020
−Removed: Energy Ag Nitrogen Production Corporate
+Added: 4,447,526 6,325,857 2,681,616 381,351 2,157,597 — 15,993,947
+Added: Energy Ag Nitrogen Production Foods Corporate
and Other Reconciling
Amounts Total
−Removed: (Dollars in thousands)
−Removed: For the year ended August 31, 2018
+Added: Year ended August 31, 2019 (Dollars in thousands)
Revenues, including intersegment revenues $ 7,581,450 $ 24,736,425 $ — $ — $ 68,710 $ ( 486,132 ) $ 31,900,453
2 unchanged sentences
Operating earnings (loss) 615,662 65,181 ( 35,046 ) ( 8,912 ) 22,717 — 659,602
−Removed: Gain on disposal of business ( 65,862 ) ( 7,707 ) — ( 58,247 ) — ( 131,816 )
Interest expense 5,719 101,386 55,226 — 11,684 ( 6,950 ) 167,065
Other income ( 5,548 ) ( 74,774 ) ( 2,769 ) — ( 10,168 ) 6,950 ( 86,309 )
−Removed: Equity (income) loss from investments ( 3,063 ) 1,392 ( 106,895 ) ( 44,949 ) — ( 153,515 )
+Added: Equity income from investments ( 2,697 ) ( 4,447 ) ( 160,373 ) ( 51,608 ) ( 17,630 ) — ( 236,755 )
Income before income taxes $ 618,188 $ 43,016 $ 72,870 $ 42,696 $ 38,831 $ — $ 815,601
20 unchanged sentences
We enter into various derivative instruments to manage our exposure to movements primarily associated with agricultural and energy commodity prices and, to a lesser degree, foreign currency exchange rates and interest rates.
−Removed: Except for certain interest rate swaps and certain pay-fixed, receive-variable, cash-settled swaps related to future crude oil purchases, which are accounted for as fair value hedges and cash flow hedges, respectively, our derivative instruments represent economic hedges of price risk for which hedge accounting under ASC Topic 815 is not applied.
+Added: Except for certain interest rate swaps and certain cash-settled swaps related to future crude oil purchases and refined product sales, which are accounted for as fair value hedges and cash flow hedges, respectively, our derivative instruments represent economic hedges of price risk for which hedge accounting under ASC Topic 815 is not applied.
Rather, the derivative instruments are recorded on our Consolidated Balance Sheets at fair value with changes in fair value being recorded directly to earnings, primarily within cost of goods sold in our Consolidated Statements of Operations.
See Note 16, Fair Value Measurements, for additional information.
−Removed: The majority of our exchange traded agricultural commodity futures are settled daily through CHS Hedging, our wholly-owned futures commission merchant.
+Added: The majority of our exchange traded agricultural commodity futures are settled daily through CHS Hedging, LLC, our wholly-owned futures commission merchant.
+Added: Derivatives Not Designated as Hedging Instruments
The following tables present the gross fair values of derivative assets, derivative liabilities and margin deposits (cash collateral) recorded on our Consolidated Balance Sheets, along with related amounts permitted to be offset in accordance with U.S.
Although we have certain netting arrangements for our exchange-traded futures and options contracts and certain
−Removed: over-the-counter ("OTC") contracts, we have elected to report our derivative instruments on a gross basis on our Consolidated Balance Sheets under ASC Topic 210-20, Balance Sheet - Offsetting .
+Added: OTC contracts, we have elected to report our derivative instruments on a gross basis on our Consolidated Balance Sheets under ASC Topic 210-20, Balance Sheet - Offsetting .
August 31, 2021
24 unchanged sentences
Total $ 412,809 $ 956 $ 14,963 $ 396,890
−Removed: Derivative assets and liabilities with maturities of less than 12 months are recorded in other current assets and other current liabilities, respectively, on the Consolidated Balance Sheets.
−Removed: Derivative assets and liabilities with maturities greater than 12 months are recorded in other assets and other liabilities, respectively, on the Consolidated Balance Sheets.
−Removed: The amount of long-term derivative assets, excluding derivatives accounted for as fair value hedges, recorded on the Consolidated Balance Sheet at August 31, 2020 and 2019, was $ 21.2 million and $ 26.6 million, respectively.
−Removed: The amount of long-term derivative liabilities, excluding derivatives accounted for as fair value hedges, recorded on the Consolidated Balance Sheet at August 31, 2020 and 2019, was $ 5.4 million and $ 7.4 million, respectively.
−Removed: Derivatives Not Designated as Hedging Instruments
+Added: Derivative assets and liabilities with maturities of less than 12 months are recorded in other current assets and other current liabilities, respectively, on our Consolidated Balance Sheets.
+Added: Derivative assets and liabilities with maturities greater than 12 months are recorded in other assets and other liabilities, respectively, on our Consolidated Balance Sheets.
+Added: The amount of long-term derivative assets recorded on our Consolidated Balance Sheet at August 31, 2021 and 2020, was $ 21.6 million and $ 21.2 million, respectively.
+Added: The amount of long-term derivative liabilities recorded on our Consolidated Balance Sheet at August 31, 2021 and 2020, was $ 4.8 million and $ 5.4 million, respectively.
The majority of our derivative instruments have not been designated as hedging instruments.
10 unchanged sentences
Commodity Contracts
−Removed: When we enter a commodity purchase or sales commitment, we are exposed to risks related to price changes and performance, including delivery, quality, quantity and shipment period.
−Removed: If market prices decrease, we are exposed to risk of loss in the market value of inventory and purchase contracts with a fixed or partially fixed price.
−Removed: Conversely, we are exposed to risk of loss on our fixed or partially fixed price sales contracts if market prices increase.
+Added: When we enter into a commodity purchase or sales commitment, we incur risks related to price changes and performance, including delivery, quality, quantity and shipment period.
+Added: In the event that market prices decrease, we are exposed to risk of loss for the market value of inventory and purchase contracts with fixed- or partially fixed-prices.
+Added: Conversely, we are exposed to risk of loss on our fixed- or partially fixed-price sales contracts in the event that market prices increase.
Our use of hedging reduces exposure to price volatility by protecting against adverse short-term price movements but also limits the benefits of favorable short-term price movements.
−Removed: To reduce price risk associated with fixed price commitments, we generally enter into commodity derivative contracts, to the extent practical, to achieve a net commodity position within the formal position limits we have established and deemed prudent for each commodity.
−Removed: These contracts are primarily transacted on regulated commodity futures exchanges, but may also include over-the-counter derivative instruments when deemed appropriate.
−Removed: For commodities where there is no liquid derivative contract, risk is managed using forward sales contracts, other pricing arrangements and, to some extent, futures contracts in highly correlated commodities.
+Added: To reduce the price risk associated with fixed-price commitments, we generally enter into commodity derivative contracts, to the extent practical, to achieve a net commodity position within the formal position limits we have established and deemed prudent for each commodity.
+Added: These contracts are primarily transacted through our FCM on regulated commodity futures exchanges, but may include over-the-counter derivative instruments when deemed appropriate.
+Added: These contracts are recorded at fair values based on quotes listed on regulated commodity exchanges or the market prices of the underlying products listed on the exchanges, except that certain contracts are accounted for as normal purchase and normal sales transactions.
+Added: For commodities where there is no liquid derivative contract, risk is managed through the use of forward sales contracts, other pricing arrangements and, to some extent, futures contracts in highly correlated commodities.
These contracts are economic hedges of price risk, but are not designated as hedging instruments for accounting purposes.
−Removed: The contracts are recorded on our Consolidated Balance Sheets at fair values based on quotes listed on regulated commodity exchanges or the market prices of the underlying products listed on the exchanges, except that fertilizer and certain propane contracts are accounted for as normal purchase and normal sales transactions.
Unrealized gains and losses on these contracts are recognized in cost of goods sold in our Consolidated Statements of Operations.
5 unchanged sentences
Our policy is to manage our commodity price risk exposure according to internal policies and in alignment with our tolerance for risk.
−Removed: Our profitability from operations is primarily derived from margins on products sold and grain merchandised, not from hedging transactions.
+Added: It is our policy that our profitability should come from operations, primarily derived from margins on products sold and grain merchandised, not from hedging transactions.
At any one time, inventory and purchase contracts for delivery to us may be substantial.
−Removed: We have risk management policies that include established net position limits.
−Removed: These limits are defined for each commodity and business unit and may include both trader and management limits as appropriate.
−Removed: The limits policy is managed within each individual business unit to ensure any limits overage is explained and exposures reduced, or a temporary limit increase is established if needed.
+Added: We have risk management policies and procedures that include established net physical position limits.
+Added: These limits are defined for each commodity and business unit, and business units may include both trader and management limits as appropriate.
+Added: The limits policy is overseen at a high level by our corporate compliance team, with day-to-day monitoring procedures being implemented within each individual business unit to ensure any limits overage is explained and exposures reduced, or a temporary limit increase is established if needed.
The position limits are reviewed at least annually with our senior leadership and Board of Directors.
−Removed: We monitor current market conditions and may expand or reduce our net position limits in response to changes in those conditions.
−Removed: In addition, all purchase and sales contracts are subject to credit approvals and appropriate terms and conditions.
+Added: We monitor current market conditions and may expand or reduce our net position limits or procedures in response to changes in those conditions.
The use of hedging instruments does not protect against nonperformance by counterparties to cash contracts.
We evaluate counterparty exposure by reviewing contracts and adjusting the values to reflect potential nonperformance.
−Removed: Risk of nonperformance by counterparties includes inability to perform because of a counterparty's financial condition and the risk that the counterparty will refuse to perform on a contract during periods of price fluctuations where contract prices are significantly different than the current market prices.
+Added: Risk of nonperformance by counterparties includes the inability to perform because of a counterparty's financial condition and the risk that the counterparty will refuse to perform on a contract during periods of price fluctuations where contract prices are significantly different than the current market prices.
We manage these risks by entering into fixed-price purchase and sales contracts with preapproved producers and by establishing appropriate limits for individual suppliers.
−Removed: Fixed price contracts are entered into
−Removed: with customers of acceptable creditworthiness, as internally evaluated.
−Removed: Regarding our use of derivatives, we primarily transact in exchange traded instruments or enter into over-the-counter derivatives that clear through a designated clearing organization, which limits our counterparty exposure relative to hedging activities.
+Added: Fixed-price contracts are
+Added: entered into with customers of acceptable creditworthiness, as internally evaluated.
+Added: Regarding our use of derivatives, we transact in exchange traded instruments or enter into over-the-counter derivatives that primarily clear through our FCM, which limits our counterparty exposure relative to hedging activities.
Historically, we have not experienced significant events of nonperformance on open contracts.
10 unchanged sentences
Ocean freight (metric tons) 210 — 1,140 95
−Removed: Natural gas (MMBtu) — — 130 —
Foreign Exchange Contracts
5 unchanged sentences
agricultural products compared to the same products offered by alternative sources of world supply.
−Removed: The notional amounts of our foreign exchange derivative contracts were $ 1.2 billion and $ 894.7 million as of August 31, 2020 and 2019, respectively.
+Added: The notional amount of our foreign exchange derivative contracts was $ 1.2 billion as of both August 31, 2021 and 2020.
Embedded Derivative Asset
1 unchanged sentence
These payments will continue on an annual basis until the date the CF Industries credit rating is upgraded to or above certain levels by two of the three specified credit ratings agencies or February 1, 2026, whichever is earlier.
−Removed: Since the CF Industries credit rating was reduced below the specified levels during fiscal 2017, we have received an annual payment of $ 5.0 million from CF Industries.
+Added: During fiscal 2021, fiscal 2020 and fiscal 2019, the CF Industries credit rating was below the specified levels and we received an annual payment of $ 5.0 million from CF Industries.
Gains totaling $ 2.5 million, $ 2.6 million and $ 2.8 million were recognized in other income in our Consolidated Statements of Operations during fiscal 2021, fiscal 2020 and fiscal 2019, respectively.
5 unchanged sentences
During the year ended August 31, 2020, we exited all our interest rate swaps resulting in a $ 16.4 million gain, which is being amortized over the life of the fixed-rate debt for which the swaps had previously been designated as fair value hedges, through fiscal 2025.
−Removed: As of August 31, 2019, we had outstanding interest rate swaps with an aggregate notional amount of $ 365.0 million designated as fair value hedges of portions of our fixed-rate debt.
Our objective in entering into these transactions was to offset changes in the fair value of the debt associated with the risk of variability in the three-month U.S.
1 unchanged sentence
Under these interest rate swaps, we received fixed-rate interest payments and made interest payments based on the three-month LIBOR.
−Removed: Offsetting changes in the
−Removed: fair values of both the swap instruments and the hedged debt were recorded contemporaneously each period and only created an impact to earnings to the extent the hedge was ineffective.
−Removed: The following table presents the fair value of our derivative interest rate swap instruments designated as fair value hedges and the line items on our Consolidated Balance Sheets in which they are recorded as of August 31, 2020 and 2019.
−Removed: Balance Sheet Location Derivative Assets
−Removed: (Dollars in thousands)
−Removed: Other assets $ — $ 9,841
+Added: Offsetting changes in the fair values of both the swap instruments and the hedged debt were recorded contemporaneously each period and only created an impact to earnings to the extent the hedge was ineffective.
The following table sets forth the pretax gains (losses) on derivatives accounted for as hedging instruments that have been included in our Consolidated Statements of Operations for the years ended August 31, 2021, 2020 and 2019:
5 unchanged sentences
Total $ — $ — $ —
−Removed: The following table provides the location and carrying amount of hedged liabilities in our Consolidated Balance Sheets as of August 31, 2020 and 2019.
−Removed: August 31, 2020 August 31, 2019
−Removed: Balance Sheet Location Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Liabilities Carrying Amount of Hedged Liabilities Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Liabilities
−Removed: (Dollars in thousands)
−Removed: Long-term debt $ — $ — $ 334,389 $ 30,611
Cash Flow Hedges
−Removed: In fiscal 2018, our Energy segment began designating certain of its pay-fixed, receive-variable, cash-settled swaps as cash flow hedges of future crude oil purchases.
−Removed: We also began designating certain pay-variable, receive-fixed, cash-settled swaps as cash flow hedges of future refined product sales.
+Added: Certain pay-fixed, receive-variable, cash-settled swaps are designated as cash flow hedges of future crude oil purchases in our Energy segment.
+Added: We also designate certain pay-variable, receive-fixed, cash-settled swaps as cash flow hedges of future refined product sales.
These hedging instruments and the related hedged items are exposed to significant market price risk and potential volatility.
As part of our risk management strategy, we look to hedge a portion of our expected future crude oil needs and the resulting refined product output based on prevailing futures prices, management's expectations about future commodity price changes and our risk appetite.
+Added: We may also elect to dedesignate certain derivative instruments previously designated as cash flow hedges as part of our risk management strategy.
+Added: Amounts recorded in other comprehensive income for these dedesignated derivative instruments remain in other comprehensive income and are recognized in earnings in the period in which the underlying transactions affect earnings.
As of August 31, 2021 and 2020, the aggregate notional amount of cash flow hedges was 2.7 million and 9.7 million barrels, respectively.
8 unchanged sentences
Commodity derivatives $ ( 7,824 ) $ ( 2,596 ) $ 27,650
−Removed: The following table presents the pretax gains (losses) relating to cash flow hedges that were reclassified from accumulated other comprehensive loss into our Consolidated Statements of Operations for the years ended August 31, 2020, 2019 and 2018:
+Added: The following table presents the pretax gains relating to our existing cash flow hedges that were reclassified from accumulated other comprehensive loss into our Consolidated Statements of Operations for the years ended August 31, 2021, 2020 and 2019:
Gain (Loss) 2021 2020 2019
5 unchanged sentences
Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.
−Removed: ASC Topic 820 describes three levels within its hierarchy that may be used to measure fair value, and our assessment of relevant instruments within those levels is as follows:
+Added: ASC Topic 820
+Added: describes three levels within its hierarchy that may be used to measure fair value, and our assessment of relevant instruments within those levels is as follows:
Values are based on unadjusted quoted prices in active markets for identical assets or liabilities.
3 unchanged sentences
forward commodity contracts with a fixed price component;
−Removed: and other OTC derivatives whose value is determined with inputs that are based on exchange traded prices, adjusted for location specific inputs that are primarily observable in the market or can be derived principally from, or corroborated by, observable market data.
+Added: and other OTC derivatives whose values are determined with inputs that are based on exchange traded prices, adjusted for location-specific inputs that are primarily observable in the market or can be derived principally from, or corroborated by, observable market data.
Values are generated from unobservable inputs that are supported by little or no market activity and that are a significant component of the fair value of the assets or liabilities.
16 unchanged sentences
Embedded derivative asset — 16,488 — 16,488
−Removed: Segregated investments 85,950 — — 85,950
+Added: Segregated investments and marketable securities 99,837 — — 99,837
Other assets 6,052 — — 6,052
11 unchanged sentences
Foreign currency derivatives — 11,523 — 11,523
−Removed: Interest rate swap derivatives — 9,841 — 9,841
Deferred compensation assets 47,669 — — 47,669
Embedded derivative asset — 18,998 — 18,998
−Removed: Segregated investments 77,777 — — 77,777
+Added: Segregated investments and marketable securities 85,950 — — 85,950
Other assets 5,276 — — 5,276
5 unchanged sentences
Exchange-traded futures and options contracts are valued based on unadjusted quoted prices in active markets and are classified within Level 1.
−Removed: Our forward commodity purchase and sales contracts with fixed-price components, select ocean freight contracts and other OTC derivatives are determined using inputs that are generally based on exchange traded prices and/or recent market bids and offers, adjusted for location specific inputs, and are classified within Level 2.
+Added: Our forward commodity purchase and sales contracts with fixed-price components, select ocean freight contracts and other OTC derivatives are determined using inputs that are generally based on exchange traded prices and/or recent market bids and offers, including location-specific adjustments, and are classified within Level 2.
Location-specific inputs are driven by local market supply and demand and are generally based on broker or dealer quotations or market transactions in either listed or OTC markets.
Changes in the fair values of these contracts are recognized in our Consolidated Statements of Operations as a component of cost of goods sold.
−Removed: Interest rate swap derivatives.
−Removed: Fair values of our interest rate swap derivatives are determined utilizing valuation models that are widely accepted in the market to value these OTC derivative contracts.
−Removed: The specific terms of the contracts, as well as market observable inputs, such as interest rates and credit risk assumptions, are factored into the models.
−Removed: As all significant inputs are market observable, all interest rate swaps are classified within Level 2.
−Removed: Changes in the fair values of contracts not designated as hedging instruments for accounting purposes are recognized in our Consolidated Statements of
−Removed: Operations as a component of interest expense.
−Removed: As of August 31, 2020, all interest rate swaps were unwound.
−Removed: See Note 15, Derivative Financial Instruments and Hedging Activities , for additional information about interest rates swaps designated as fair value and cash flow hedges.
Deferred compensation and other assets.
6 unchanged sentences
See Note 15, Derivative Financial Instruments and Hedging Activities , for additional information.
−Removed: Segregated investments.
−Removed: Our segregated investments are comprised of U.S.
+Added: Segregated investments and marketable securities.
+Added: Our segregated investments and marketable securities are comprised of investments in various government agencies and U.S.
Treasury securities, which are valued using quoted market prices and classified within Level 1.
6 unchanged sentences
Liabilities are monitored and adjusted as new facts or changes in law or technology occur.
−Removed: The resolution of any such matters may affect consolidated net income for any fiscal period;
−Removed: however, we believe any resulting liabilities, individually or in the aggregate, will not have a material effect on our consolidated financial position, results of operations or cash flows during any fiscal year.
+Added: The resolution of any such matters may affect consolidated net income for
+Added: any fiscal period;
+Added: however, we currently believe any resulting liabilities, individually or in the aggregate, will not have a material effect on our consolidated financial position, results of operations or cash flows during any fiscal year.
Other Litigation and Claims
1 unchanged sentence
The resolution of any such matters may affect consolidated net income for any fiscal period;
−Removed: however, we believe any resulting liabilities, individually or in the aggregate, will not have a material effect on our consolidated financial position, results of operations or cash flows during any fiscal year.
+Added: however, we currently believe any resulting liabilities, individually or in the aggregate, will not have a material effect on our consolidated financial position, results of operations or cash flows during any fiscal year.
We are a guarantor for lines of credit and performance obligations of related, nonconsolidated companies.
16 unchanged sentences
Note 18 Related Party Transactions
−Removed: We purchase and sell grain and other agricultural commodity products from certain equity investees , primarily CF Nitrogen, Ventura Foods, Ardent Mills and TEMCO, LLC.
+Added: We purchase and sell grain and other agricultural commodity products from certain equity investees , primarily CF Nitrogen, Ventura Foods, Ardent Mills and TEMCO.
Sales to and purchases from related parties for the years ended August 31, 2021, 2020 and 2019, respectively, are as follows:
7 unchanged sentences
Due to related parties 90,986 53,602
−Removed: As a cooperative, we are owned by farmers and ranchers and their member cooperatives, which are referred to as members.
+Added: As a cooperative, we are owned by farmers and ranchers and member cooperatives, which are referred to as members.
We buy commodities from and provide products and services to our members.
1 unchanged sentence
Note 19 Leases
−Removed: We adopted ASC Topic 842 on September 1, 2019, using the modified retrospective approach.
−Removed: In addition, we used the additional optional transition method and package of practical expedients in the period of adoption without retrospective adjustment to previous periods presented, although we elected not to apply the hindsight practical expedient.
−Removed: As a result of using the additional optional transition method and following a modified retrospective approach, prior periods have not been restated, and a $ 25.3 million cumulative-effect adjustment, including the deferred income tax impact, was recorded to increase the opening balance of capital reserves as of the adoption date related to recognition of previously deferred gains associated with the sale-leaseback of our primary corporate office building located in Inver Grove Heights, Minnesota.
−Removed: Our accounting for finance leases (previously referred to as capital leases) remains substantially unchanged;
−Removed: however, adoption of ASC Topic 842 resulted in recognition of operating lease right of use assets and associated lease liabilities of $ 268.4 million and $ 267.0 million, respectively, as of September 1, 2019.
−Removed: Adoption of ASC Topic 842 did not have a material impact on our Consolidated Statements of Operations or Consolidated Statements of Cash Flows.
We assess arrangements at inception to determine whether they contain a lease.
1 unchanged sentence
The right to control the use of an asset must include both (a) the right to obtain substantially all economic benefits associated with an identified asset and (b) the right to direct how and for what purpose the identified asset is used.
−Removed: Certain arrangements provide us with the right to use an identified asset;
−Removed: however, most of these arrangements are not considered to represent a lease as we do
−Removed: not control how and for what purpose the identified asset is used.
−Removed: For example, our supply agreements, warehousing and distribution services agreements, and transportation services agreements generally do not contain leases.
+Added: Certain service agreements may provide us with the right to use an identified asset;
+Added: however, most of these arrangements are not considered to represent a lease as we do not control how and for what purpose the identified asset is used.
We lease property, plant and equipment used in our operations primarily under operating lease agreements and, to a lesser extent, under finance lease agreements.
−Removed: Our operating leases are primarily for railcars, equipment, vehicles and office space, many of which contain renewal options and escalation clauses.
+Added: Our leases are primarily for railcars, equipment, vehicles and office space, many of which contain renewal options and escalation clauses.
Renewal options are included as part of the right of use asset and liability when it is reasonably certain that we will exercise the renewal option;
however, renewal options are generally not included as we are not reasonably certain to exercise such options.
−Removed: Operating lease right of use assets and liabilities for operating leases are recognized at the lease commencement date for leases in excess of 12 months based on the present value of lease payments over the lease term.
+Added: After the adoption of ASC Topic 842, Leases , on September 1, 2019, right of use assets and liabilities for operating and finance leases are recognized at the lease commencement date for leases in excess of 12 months based on the present value of lease payments over the lease term.
For measurement and classification of lease agreements, lease and nonlease components are grouped into a single lease component for all asset classes.
5 unchanged sentences
Lease expense is recognized on a straight-line basis over the lease term.
−Removed: The components of lease expense recognized in our Condensed Consolidated Statements of Operations are as follows:
−Removed: August 31, 2020
+Added: The components of lease expense recognized in our Consolidated Statements of Operations as of August 31, 2021 and 2020, are as follows:
(Dollars in thousands)
7 unchanged sentences
*Income related to sub-lease activity is not material and has been excluded from the table above.
−Removed: Supplemental balance sheet information related to operating and finance leases is as follows:
−Removed: Balance Sheet Location August 31, 2020
+Added: Supplemental balance sheet information related to operating and finance leases as of August 31, 2021 and 2020, are as follows:
+Added: Balance Sheet Location 2021 2020
(Dollars in thousands)
9 unchanged sentences
Total finance lease liabilities $ 36,034 $ 31,460
+Added: Information related to the lease term and discount rate for operating and finance leases as of August 31, 2021 and 2020, are as follows:
Weighted average remaining lease term (in years)
4 unchanged sentences
Finance leases 3.50 % 3.33 %
−Removed: Supplemental cash flow and other information related to operating and finance leases is as follows:
−Removed: August 31, 2020
+Added: Supplemental cash flow and other information related to operating and finance leases as of August 31, 2021 and 2020, are as follows:
(Dollars in thousands)
6 unchanged sentences
Right of use asset modifications 27,664 7,333
−Removed: Maturities of lease liabilities as of August 31, 2020, were as follows:
+Added: Maturities of lease liabilities by fiscal year as of August 31, 2021, were as follows:
August 31, 2021
1 unchanged sentence
(Dollars in thousands)
−Removed: Fiscal 2021 $ 8,845 $ 64,379
−Removed: Fiscal 2022 7,017 50,398
−Removed: Fiscal 2023 6,053 40,269
−Removed: Fiscal 2024 3,443 32,195
−Removed: Fiscal 2025 2,046 23,034
+Added: 2022 $ 8,517 $ 66,132
+Added: 2023 6,979 52,874
+Added: 2024 4,217 42,666
+Added: 2025 2,797 31,782
+Added: 2026 2,387 23,858
Thereafter 19,557 86,654
4 unchanged sentences
Long-term obligations $ 28,590 $ 200,720
−Removed: Disclosures Related to Periods Prior to Adoption of New Lease Standard
−Removed: The following pertains to previously disclosed information in our Annual Report on Form 10-K for the fiscal year ended August 31, 2019, which incorporates information about leases now in the scope of ASC Topic 842.
−Removed: Total rental expense for operating leases was $ 113.3 million, $ 88.5 million and $ 81.3 million for the years ended August 31, 2019, 2018 and 2017, respectively.
−Removed: Various leases under capital lease totaled $ 62.7 million and $ 50.0 million as of August 31, 2019 and 2018, respectively.
−Removed: Accumulated amortization on assets under capital leases was $ 20.6 million and $ 18.9 million as of August 31, 2019 and 2018, respectively.
−Removed: Minimum future lease payments required under noncancelable capital and operating leases as of August 31, 2019, were as follows:
−Removed: August 31, 2019
−Removed: Finance Leases Operating Leases
−Removed: (Dollars in thousands)
−Removed: Fiscal 2020 $ 6,761 $ 87,168
−Removed: Fiscal 2021 6,199 57,381
−Removed: Fiscal 2022 5,021 43,665
−Removed: Fiscal 2023 4,548 34,328
−Removed: Fiscal 2024 2,638 26,793
−Removed: Thereafter 6,517 92,653
−Removed: Total minimum future lease payments 31,684 $ 341,988
−Removed: Less amount representing interest 3,445
−Removed: Present value of net minimum lease payments $ 28,239
−Removed: Note 20 Acquisitions
−Removed: On March 1, 2019, we completed our acquisition of the remaining 75 % ownership interest in WCD, a full-service wholesale distributor of agronomy products that operates primarily in the United States.
−Removed: The purchase price was equal to $ 113.4 million, including $ 6.7 million that was previously paid and $ 106.7 million paid on March 1, 2019, of which the net cash flows were reduced by $ 8.0 million of cash acquired.
−Removed: Prior to completing this acquisition and through February 28, 2019, we had a 25 % ownership interest in WCD, which was accounted for under the equity method of accounting whereby we shared in the economics of WCD earnings on a pro-rata basis.
−Removed: Related party transactions through the date of the acquisition have been included within Note 18, Related Party Transactions .
−Removed: By acquiring the remaining ownership interest in WCD, we were able to expand our agronomy platform, position ourselves as a leading supply partner to cooperatives and retailers serving growers throughout the United States and add value for our owners.
−Removed: The WCD enterprise value was determined using a discounted cash flow model in which the fair value of the business was estimated based on the earning capacity of WCD.
−Removed: We estimated the fair value of the previously held equity interest to be equal to 25 % of the total fair value of WCD, which was implied based on the purchase price we paid for the remaining 75 % interest.
−Removed: The acquisition-date fair value of the previous equity interest was $ 37.8 million and is included in the measurement of the consideration transferred.
−Removed: We recognized a gain of approximately $ 19.1 million as a result of remeasuring our prior equity interest in WCD held before the acquisition of the remaining 75 % interest.
−Removed: The gain is included in other (income) loss in our Consolidated Statements of Operations.
−Removed: Allocation of the purchase price for this transaction resulted in goodwill of $ 61.4 million, which is nondeductible for tax purposes, and definite-lived intangible assets of $ 47.2 million.
−Removed: As this acquisition is not considered to have a material impact on our financial statements, pro forma results of operations are not presented.
−Removed: The acquisition resulted in fair value measurements that are not on a recurring basis and did not have a material impact on our consolidated results of operations.
−Removed: Purchase accounting has been finalized and fair values assigned to the net assets acquired are as follows:
−Removed: (Dollars in thousands)
−Removed: Other current assets 708,764
−Removed: Property, plant and equipment 44,064
−Removed: Goodwill 61,358
−Removed: Other intangible assets 47,200
−Removed: Other non-current assets 55
−Removed: Liabilities ( 718,262 )
−Removed: Total net assets acquired $ 151,212
−Removed: Operating results for WCD are included in our Consolidated Statements of Operations from the day of the acquisition on March 1, 2019, through August 31, 2020.
−Removed: WCD revenues and income before income taxes were $ 569.2 million and $ 19.0 million, respectively, for the year ended August 31, 2020, and $ 456.2 million and $ 12.9 million, respectively, for the year ended August 31, 2019.
−Removed: Due to the timing of the acquisition during the third quarter of fiscal 2019, WCD's results prior to acquisition were not included in the fiscal 2019 or fiscal 2018 results.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.