13 unchanged sentences
Changes in Internal Control Over Financial Reporting
−Removed: 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.
+Added: 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, 2022, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
OTHER INFORMATION
2 unchanged sentences
3") to the employment agreement we entered into with Mr.
−Removed: Debertin on May 22, 2017 ("Employment Agreement"), as previously amended on November 5, 2020, pursuant to which the terms of Mr.
−Removed: Debertin’s long-term incentive compensation were amended to provide Mr.
−Removed: 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.
−Removed: The amended long-term incentive compensation opportunity targets will apply to each three-year performance period that begins on or after September 1, 2021.
−Removed: The foregoing description of Employment Agreement Amendment No.
+Added: Debertin on May 22, 2017 ("Employment Agreement"), as previously amended on November 5, 2020 ("Amendment No.
+Added: 1") and on November 4, 2021 ("Amendment No.
+Added: 2"), pursuant to which the term of the Employment Agreement was extended to August 31, 2026 and the termination provisions of the Employment Agreement were amended to provide that Mr.
+Added: Debertin would receive welfare benefit continuation for two years following the termination of his employment, if he chooses to retire on or after August 31, 2025.
+Added: The foregoing description of the Employment Agreement Amendment No.
3 does not purport to be complete and is qualified in its entirety by reference to Employment Agreement Amendment No.
−Removed: 2, which is filed as Exhibit 10.1 B to this Annual Report on Form 10-K and is incorporated herein by reference.
+Added: 3, which is filed as E xhibit 10.1C to this Annual Report on Form 10-K and is incorporated herein by reference.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
26 unchanged sentences
Neither management nor the incumbent directors have any control over the nominating process for directors.
−Removed: As described below under "Director Elections and Voting," to be eligible for service as a director, a nominee must, among other things, (i) be an active farmer or rancher whose primary occupation is that of a farmer or rancher, (ii) be a Class A individual member of CHS or a cooperative association member and (iii) reside in the geographic region from which he or she is nominated.
+Added: As described below under "Director Elections and Voting," to be eligible for service as a director, a nominee must, among other things, (i) be an active farmer or rancher, (ii) be a Class A individual member of CHS or a member of a cooperative association member and (iii) reside in the geographic region from which he or she is nominated.
In general, our directors operate large commercial agricultural enterprises, which require expertise in all areas of management, including financial oversight.
−Removed: Most directors also have experience serving on local cooperative association boards and participate in a variety of agricultural and community organizations.
−Removed: Some directors also have experience serving on boards of directors for financial and other institutions and businesses.
+Added: Nearly all directors also have experience serving on local cooperative association boards and all participate in a variety of agricultural and community organizations.
Our directors complete the National Association of Corporate Directors comprehensive Director Professionalism course and earn the Certificate of Director Education.
David Beckman has been a member of the CHS Board of Directors since 2018.
−Removed: He is a member of the Audit Committee and the CHS Foundation Board of Trustees.
−Removed: He serves as board chair for Central Valley Ag Cooperative in York, Nebraska, and secretary of the Nebraska Cooperative Council.
+Added: He is a member of the Audit Committee and CHS Foundation Board of Trustees.
+Added: He is secretary of the Nebraska Cooperative Council and former board chair for Central Valley Ag Cooperative in York, Nebraska.
He holds a bachelor's degree in agronomy from the University of Nebraska-Lincoln.
4 unchanged sentences
Blew has served as first vice chair of the Executive Committee of the Board.
−Removed: He also serves on the Audit Committee and Capital Committee.
+Added: He also serves on the Audit and Corporate Risk Committees.
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.
2 unchanged sentences
Hal Clemensen has been a member of the CHS Board of Directors since 2019.
−Removed: He is vice chair of the Government Relations Committee and a member of the Corporate Risk Committee.
−Removed: He serves on the Agtegra Cooperative board.
−Removed: He also serves on the board of trustees for Presentation College and the Avera Rural Cancer Advisory Board.
−Removed: Previously, he served as a director of the South Dakota Value Added Agriculture Development Center, South Dakota Soybean Association and Redfield Farmers Union Oil Company.
+Added: He is chair of the Government Relations Committee and a member of the Corporate Risk Committee.
+Added: He serves on the board of trustees for Presentation College and the Avera Rural Cancer Advisory Board.
+Added: He is a former member of the Agtegra Cooperative board and previously served as a director of the South Dakota Value Added Agriculture Development Center, South Dakota Soybean Association and Redfield Farmers Union Oil Company.
He holds a bachelor's degree in agricultural economics and agricultural business from South Dakota State University.
3 unchanged sentences
He is vice chair of the Audit Committee and vice chair of the Corporate Risk Committee.
−Removed: He serves as a director and past chair of Security State Bank of Wanamingo, Minnesota.
−Removed: Previously, he served as director of Cooperative Network, the MGEX and National Futures Association.
+Added: He serves as a director and past chair of Security State Bank of Wanamingo.
+Added: Previously, he served as a director of Cooperative Network, the Minneapolis Grain Exchange and National Futures Association.
He holds a bachelor's degree in agricultural economics from the University of Minnesota.
−Removed: Cordes' principal occupation has been farming for more than four years.
−Removed: Prior to his current occupation, he was president of CHS Hedging, a commodities brokerage subsidiary of CHS Inc.
−Removed: He operates a corn and soybean farm near Wanamingo.
+Added: Cordes' principal occupation has been farming for more than five years.
+Added: Prior to his current occupation, he was president of CHS Hedging, LLC, a commodities brokerage subsidiary of CHS Inc.
+Added: He co-owns and operates a corn and soybean farm near Wanamingo, Minnesota.
Jon Erickson, Second Vice Chair, has been a member of the CHS Board of Directors since 2011.
Since 2017, he has been second vice chair of the Executive Committee of the Board.
−Removed: He also serves as chair of the Capital Committee and as a member of the Audit Committee.
−Removed: He is a member of the North Dakota Farmers Union and North Dakota Stockmen's Association.
+Added: He is also a member of the Audit and Capital Committees.
+Added: He is an advisory board member for the Quentin Burdick Center for Cooperatives, a board member of the State Historical Society of North Dakota Foundation, a council member of Rural Leadership North Dakota and a member of the North Dakota Farmers Union and North Dakota Stockmen's Association.
He holds a bachelor's degree in agricultural economics from North Dakota State University.
−Removed: Erickson's principal occupation has been farming for more than five years.
−Removed: He raises grains and oilseeds and operates a commercial Hereford-Angus cow-calf business near Minot, North Dakota.
+Added: Erickson's principal occupation has been farming for more than five years, and he raises grain and oilseed and operates a commercial Hereford-Angus cow-calf business near Minot, North Dakota.
Mark Farrell has been a member of the CHS Board of Directors since 2016.
−Removed: He is a member of the Board's Corporate Risk Committee and Government Relations Committee.
+Added: He is a member of the Government Relations and Corporate Risk Committees.
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.
1 unchanged sentence
Farrell's principal occupation has been farming for more than five years.
−Removed: He raises corn, soybeans and wheat in Dane County, Wisconsin .
+Added: He raises corn and soybeans in Dane County, Wisconsin .
Steve Fritel has been a member of the CHS Board of Directors since 2003.
2 unchanged sentences
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, selling some of his edible beans to family-owned restaurants.
+Added: He raises spring wheat, durum wheat, soybeans, edible beans, corn and canola near Rugby, North Dakota, selling some of his edible beans to local family-owned restaurants.
He also runs a family business providing on-farm grain storage equipment.
−Removed: Alan Holm has been a member of the CHS Board of Directors since 2013.
−Removed: He serves as chair of the Government Relations Committee and is a member of the Corporate Risk Committee.
+Added: Alan Holm, Assistant Secretary-Treasurer, has been a member of the CHS Board of Directors since 2013.
+Added: Since 2021, he has been assistant secretary-treasurer of the Executive Committee of the Board.
+Added: He is a member of the Government Relations and Capital Committees.
He also serves on the board for Citizens Bank of Minnesota.
−Removed: Holm holds an associate degree in machine tool technology from Mankato (Minnesota) Technical College.
+Added: He 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 operation near Sleepy Eye, Minnesota.
+Added: He raises corn, soybeans, sweet corn, peas and hay and owns and manages 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 Committee and Capital Committee.
+Added: He serves as chair of the Capital Committee and as vice chair of the Government Relations Committee.
He also serves as a member of the board for the Cooperative Network.
3 unchanged sentences
Tracy Jones has been a member of the CHS Board of Directors since 2017.
−Removed: He is chair of the Governance Committee and a member of the Capital Committee.
−Removed: 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.
+Added: He is chair of the Governance Committee and vice chair of the Capital Committee.
+Added: He has served on the DeKalb County Board and on the boards of CHS Elburn, the former Elburn Co-op, DeKalb County Farm Bureau, DeKalb Kane Cattlemen's Association and DeKalb County Corn Growers.
He earned an associate degree in farm management from Kishwaukee College in Malta, Illinois.
3 unchanged sentences
He serves as chair of the CHS Foundation Board of Trustees and as a member of the Governance Committee.
−Removed: Kayser is a member of the Mitchell (South Dakota) Technical Institute Foundation Board and a previous director and chair of CHS Farmers Alliance and South Dakota Association of Cooperatives.
+Added: Kayser is chair of the Mitchell (South Dakota) Technical College Foundation Board and a previous director and chair of CHS Farmers Alliance and South Dakota Association of Cooperatives.
Kayser's principal occupation has been farming for more than five years.
3 unchanged sentences
Kehl has served as secretary-treasurer of the Executive Committee of the Board.
−Removed: He also serves as vice chair of the Capital Committee and vice chair of the Governance Committee.
+Added: He also serves as a member of the Capital and Governance Committees.
He previously was a director of CHS SunBasin Growers and vice chair of the Columbia Basin Seed Association.
5 unchanged sentences
He is a member of United Farmers Co-op, Central Region Cooperative, Minnesota Farm Bureau, Minnesota and Nicollet County corn growers associations, and Minnesota Pork Producers Association.
−Removed: He serves as a director of Steamboat Pork Cooperative, chair of the board of Nuvera Communications, Inc.
−Removed: and director of Minnesota Valley Lutheran School Foundation.
+Added: He serves as a director of Steamboat Pork Cooperative, chair of Nuvera Board and director of Minnesota Valley Lutheran School Foundation.
He holds an agricultural mechanics degree from Alexandria (Minnesota) Technical School.
1 unchanged sentence
He operates a family farm, raising corn, soybeans and hogs near New Ulm, Minnesota.
−Removed: 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 Executive Committee of the Board.
−Removed: He is also a member of the Governance and Capital committees.
+Added: Steve Riegel has been a member of the CHS Board of Directors since 2006.
+Added: He is a member of the Capital and Governance Committees.
He is an advisory director of Bucklin National Bank.
−Removed: He attended Fort Hays (Kansas) State University, majoring in agriculture, business and animal science.
+Added: He attended Fort Hays (Kansas) State University, majoring in agricultural business and animal science.
Riegel's principal occupation has been farming for more than five years.
8 unchanged sentences
Kevin Throener has been a member of the CHS Board of Directors since 2019.
−Removed: He is a member of the Governance Committee and the CHS Foundation Board of Trustees.
+Added: He is a member of the Governance Committee and vice chair of the CHS Foundation Board of Trustees.
He serves as a CHS Dakota Plains director and is active in the North Dakota Farmers Union, the North Dakota Stockmen's Association and Knights of Columbus.
3 unchanged sentences
Cortney Wagner has been a member of the CHS Board of Directors since 2020.
−Removed: She is a member of the Governance Committee and the CHS Foundation Board of Trustees.
−Removed: Wagner serves on the board of the Montana Council of Cooperatives.
+Added: She serves as vice chair of the Governance Committee and is a member of the CHS Foundation Board of Trustees.
+Added: She serves on the board of the Montana Council of Cooperatives.
She holds a real estate license and has served as a trust associate at 1st National Bank and Trust Company.
14 unchanged sentences
Region Incumbent
−Removed: Region 1 (Minnesota) David Johnsrud
−Removed: Region 3 (North Dakota) Steve Fritel
−Removed: Region 4 (South Dakota) David Kayser
−Removed: Region 6 (Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah, Washington) Russell Kehl
−Removed: Region 8 (Colorado, Kansas, Nebraska, New Mexico, Oklahoma, Texas) David Beckman
+Added: Region 1 (Minnesota) Alan Holm
+Added: Region 3 (North Dakota) Kevin Throener
+Added: Region 4 (South Dakota) Hal Clemensen
+Added: Region 5 (Connecticut, Delaware, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Wisconsin) Mark Farrell
+Added: Region 8 (Colorado, Kansas, Nebraska, New Mexico, Oklahoma, Texas) Open Seat
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;
4 unchanged sentences
Jay Debertin 62 President and Chief Executive Officer
−Removed: Richard Dusek 57 Executive Vice President, CHS Country Operations
−Removed: Darin Hunhoff 51 Executive Vice President, CHS Energy
+Added: Richard Dusek 58 Executive Vice President, Country Operations
+Added: Darin Hunhoff 52 Executive Vice President, Energy
John Griffith 53 Executive Vice President, Ag Business and CHS Hedging
Olivia Nelligan 47 Executive Vice President and Chief Financial Officer
−Removed: Brandon Smith 41 Executive Vice President and General Counsel
−Removed: David Black 55 Senior Vice President, Chief Strategy Officer and Chief Information Officer
−Removed: Gary Halvorson 48 Senior Vice President, CHS Agronomy
+Added: Brandon Smith 42 Executive Vice President, General Counsel
+Added: David Black 56 Senior Vice President, Enterprise Transformation & Chief Information Officer
+Added: Gary Halvorson 49 Senior Vice President, Enterprise Customer Development
Mary Kaul-Hottinger 58 Senior Vice President, Human Resources
Jay Debertin has been president and chief executive officer ("CEO") for CHS since May 2017.
−Removed: He leads the strategic leadership team in strengthening CHS by advancing operational excellence, accelerating its focus on results and delivering products and services that help the cooperative's owners grow their businesses.
+Added: He leads the strategic leadership team in strengthening CHS by advancing operational excellence, strengthening CHS's financial performance and building a team to grow CHS's core businesses to create connections that empower agriculture.
Debertin joined CHS in 1984 in the petroleum division and held a variety of positions in its energy marketing operations before being named vice president of crude oil supply in 1998.
3 unchanged sentences
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.
−Removed: Debertin serves as board chair for Ventura Foods and as vice chair of the National Council of Farmer Cooperatives.
+Added: Debertin serves as board chair for Ventura Foods.
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.
−Removed: Richard Dusek has been executive vice president, CHS Country Operations since November 2017.
−Removed: He is leading the CHS retail platform as a critical distribution channel for our core businesses, aligning an enterprise supply chain to drive efficiencies in delivering crop inputs, fuels, animal nutrition and other farm supplies and marketing the grain produced by farmer owners.
−Removed: Dusek serves on the board of directors for The Fertilizer Institute and is a past board member of the MGEX.
+Added: Richard Dusek has been executive vice president, country operations, since November 2017.
+Added: He leads transformation of the CHS retail platform as a critical distribution channel for our core businesses, aligning an enterprise supply chain for energy, agronomy, animal nutrition and grain product lines to serve our farmer- and rancher-owners, and driving growth and efficiency through a customer-focused solutions platform.
+Added: Dusek is a former board member of The Fertilizer Institute and the Minneapolis Grain Exchange.
He joined CHS in 1988 as a wheat trader.
1 unchanged sentence
Dusek held roles as vice president in our grain marketing and agronomy divisions.
−Removed: 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: Darin Hunhoff has been executive vice president, CHS Energy, since May 2017.
−Removed: He leads CHS energy operations including refineries, pipelines and terminals, refined fuels, propane, lubricants and transportation.
+Added: He earned a bachelor of science degree in agricultural economics from North Dakota State University and is a graduate of the Harvard Business School Advanced Management Program.
+Added: Darin Hunhoff has been executive vice president, energy, since May 2017.
+Added: He leads CHS energy operations including refineries, pipelines and terminals, refined fuels, propane, lubricants, and transportation and logistics.
In addition, he oversees CHS Strategic Sourcing, the company's enterprisewide strategic sourcing initiative.
−Removed: Hunhoff serves on the board of directors for Ardent Mills, LLC.
+Added: Hunhoff serves on the board of directors for Ardent Mills.
He joined CHS more than 25 years ago as a petroleum specialist.
−Removed: He has also been chief strategy officer for
−Removed: 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 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.
+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.
+Added: He also serves as board chair for CHS Hedging, a commodities brokerage subsidiary of CHS.
+Added: He worked for CHS early in his career as a grain merchandiser and rejoined CHS at a leadership level in January 2013.
+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.
+Added: He earned a bachelor's degree from St.
+Added: John's University and a master of business administration degree from Rockhurst 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 chairs the CHS Retirement Plan Committee.
+Added: She is responsible for finance activities and strategic planning across CHS and chairs the CHS Retirement Plan Committee.
Before joining CHS, Ms.
Nelligan held executive positions in multiple organizations, as well as acting as a management consultant.
−Removed: From June 2019 until her appointment as our executive vice president and chief financial officer, Ms.
−Removed: Nelligan served as chief executive officer of Inish Enterprises, a strategic advisory firm that she founded.
−Removed: Prior to that, Ms.
−Removed: Nelligan served as chief financial officer and subsequently as chief executive officer of Nasco, LLC, a private equity-owned company that provides specialty products for education, healthcare, laboratory testing and agriculture.
−Removed: After serving as Nasco's CEO, she served as nonexecutive chair of its board.
−Removed: Prior to Nasco, Ms.
−Removed: Nelligan spent many years with Kerry Group plc and was most recently the global chief financial and strategic planning officer of its Taste and Nutrition division.
+Added: She also serves on the advisory council for Cooperative Ventures, a venture capital fund joint venture between CHS and Growmark that focuses on innovative solutions and emerging technologies that positively impact farming.
+Added: Her past experience includes serving as chief executive officer of Nasco, LLC, a private equity-owned company that provides specialty products for education, healthcare, laboratory testing and agriculture.
+Added: Nelligan spent 14 years with Kerry Group plc and was global chief financial and strategic planning officer of its Taste and Nutrition division when she left the company in 2016.
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 and serves on the board of directors of the Boys Scouts of America Northern Star Council.
−Removed: Brandon Smith has been executive vice president and general counsel for CHS since March 2021.
+Added: She is a fellow of Chartered Accountants Ireland and an associate member of the Institute of Taxation in Ireland.
+Added: Brandon Smith has been executive vice president, 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.
Smith also oversees the CHS internal audit department.
−Removed: 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: He previously worked at Tenneco Inc., a multinational industrial company based in Lake Forest, Illinois, for more than 12 years in various legal and leadership roles, most recently as senior vice president, general counsel and corporate secretary.
Prior to joining Tenneco, Mr.
2 unchanged sentences
David Black has been senior vice president, enterprise transformation, and chief information officer for CHS since April 2018.
−Removed: He leads enterprise transformation and strategy, CHS global information technology, marketing and communications and facilities.
−Removed: He leads enterprise transformation efforts, driving ongoing review of company assets, strategic infrastructure and decision-making on opportunities for profitable growth.
−Removed: 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 leads enterprise transformation, global information technology, innovation, marketing, communications and facilities.
+Added: He leads enterprise transformation efforts, driving ongoing companywide efficiency and opportunities for profitable growth.
+Added: Black leads strategy, implementation, delivery and operation of information technology for all CHS businesses worldwide and oversees our owner and employee communications, advertising and public relations and CHS sustainability programs.
+Added: He also serves on the advisory council for Cooperative Ventures, a venture capital fund joint venture between CHS and Growmark that focuses on innovative solutions and emerging technologies that positively impact farming.
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.
3 unchanged sentences
Black earned a bachelor's degree in computer science from Tarkio College.
−Removed: John Griffith has been executive vice president, Ag Business and CHS Hedging since January 2021.
−Removed: 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.
−Removed: Griffith chairs the North American Export Grain Association board and previously was a member of the MGEX board.
−Removed: He also serves as board chair for CHS Hedging, a commodities brokerage subsidiary of CHS.
−Removed: 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 senior vice president, CHS Global Grain Marketing and CHS Hedging, and vice president, grain marketing North America.
−Removed: He earned a bachelor’s degree from St.
−Removed: John's University and a master of business administration degree from Rockhurst University.
Gary Halvorson has been senior vice president, enterprise customer development, since September 2021.
1 unchanged sentence
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.
−Removed: 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: Halvorson represents CHS on the board of directors for The Fertilizer Institute (TFI) and on the CF Nitrogen Board of Managers.
+Added: He also serves on the advisory council for Cooperative Ventures, a venture capital fund joint venture between CHS and Growmark that focuses on innovative solutions and emerging technologies that positively impact farming.
+Added: Previously, he served on the National FFA Sponsors Board and the Agricultural Retailers Association board of directors.
He joined CHS more than 20 years ago.
5 unchanged sentences
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
−Removed: 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 and diverse employees.
She also oversees CHS community giving, which provides giving and volunteer programs to strengthen hometown communities in collaboration with local cooperatives.
5 unchanged sentences
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, 2021, and based further upon written representations received by us with respect to the need to file reports on Form 5, except for Ms.
−Removed: 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.
+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, 2022, and based further upon written representations received by us with respect to the need to file reports on Form 5, except for Mr.
+Added: Erickson, who filed one late Form 4, which was later amended, relating to two transactions in November 2021, no persons filed late reports required by Section 16(a) of the Exchange Act during fiscal 2022.
CODE OF ETHICS
18 unchanged sentences
The voting members in each region nominate and elect the number of directors for that region as set forth in our bylaws.
−Removed: To be eligible for service as a director, a nominee must among other things, (i) be an active farmer or rancher, (ii) be a Class A individual member of CHS or a cooperative association member and (iii) reside in the geographic region from which he or she is nominated.
+Added: To be eligible for service as a director, a nominee must among other things, (i) be an active farmer or rancher, (ii) be a Class A individual member of CHS or member of a cooperative association and (iii) reside in the geographic region from which he or she is nominated.
Neither management nor the incumbent directors have any control over the nominating process for directors.
6 unchanged sentences
Executive Compensation
−Removed: This Compensation Discussion and Analysis describes the material elements of compensation awarded to each of the following executive officers ("Named Executive Officers") for fiscal 2021, which ran from September 1, 2020, through August 31, 2021:
+Added: This Compensation Discussion and Analysis describes the material elements of compensation awarded to each of the following executive officers ("Named Executive Officers") during the year ended August 31, 2022:
Name Position
2 unchanged sentences
Darin Hunhoff Executive Vice President, Energy
−Removed: Richard Dusek Executive Vice President, CHS Country Operations
−Removed: John Griffith Executive Vice President, Ag Business and CHS Hedging
−Removed: James Zappa Senior Vice President Legal & Government Affairs, Deputy General Counsel
−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 we and our owners live and operate.
−Removed: 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.
−Removed: This section outlines the compensation and benefit programs, as well as the materials and factors used to assist us in making compensation decisions.
+Added: Richard Dusek Executive Vice President, Country Operations
+Added: Brandon Smith Executive Vice President, General Counsel
+Added: CHS creates connections to empower agriculture for our producer and member cooperative owners and the communities in which we and our owners live and operate.
+Added: Our compensation programs are aligned with our operational objectives and long-term business strategy and are designed to attract, reward and retain high-performing and diverse team members who are passionate about our mission.
+Added: This section outlines the objectives and principles underlying our compensation and benefit programs, as well as the objectives and principles underlying compensation decisions.
In this Compensation Discussion and Analysis, the related compensation tables and the accompanying narratives, all references to a given year refer to our fiscal year ending on August 31 of that year.
11 unchanged sentences
A significant portion of each executive's compensation depends on meeting financial goals and a smaller portion is linked to individual performance objectives.
−Removed: 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
−Removed: 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 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.
+Added: The Governance Committee reviews our executive compensation policies each year with respect to the correlation between executive compensation and creating member-owner value, as well as the competitiveness of our executive compensation programs.
+Added: 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.
+Added: A third-party consultant is chosen and hired directly by the Executive Committee of our Board of Directors ("Executive Committee") to
+Added: 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.
2 unchanged sentences
In turn, our Board of Directors communicates this pay information to our CEO.
+Added: That same consultant provides guidance to our Governance Committee regarding annual variable pay and long-term incentive pay plans applicable to our senior executives, including our Named Executive Officers.
Our CEO is not involved with the selection of the third-party consultant and does not participate in or observe Executive Committee meetings that concern CEO compensation matters.
−Removed: Based on a review of compensation market data provided by our human resources department (survey sources and pricing methodology are explained below under "Components of Compensation"), with input from a third-party consultant if necessary, our CEO decides base compensation levels for the other Named Executive Officers, recommends for Board of Directors approval the annual and long-term incentive pay plan performance goals applicable to the other Named Executive Officers (and other employees) and communicates base and incentive compensation pay to the other Named Executive Officers.
+Added: Based on a review of compensation market data provided by our human resources department (survey sources and methodology are explained below under "Components of Compensation"), with input from a third-party consultant if necessary, our CEO decides base compensation levels for the other Named Executive Officers, recommends for the Board of Directors' approval the annual and long-term incentive pay plan performance goals applicable to the other Named Executive Officers (and other employees) and communicates base and incentive compensation pay to the other Named Executive Officers.
The day-to-day design and administration of compensation and benefit plans are managed by our human resources, finance and legal departments.
3 unchanged sentences
In determining competitive compensation levels, we analyze independent compensation survey information, including comparable industries, markets, revenues and companies that compete with us for executive talent.
−Removed: In fiscal 2021, the Towers Watson CDB Executive Compensation Survey Report was used for this analysis, and the survey data extracted included median market rates for base salary, annual incentive, total cash compensation and total direct compensation.
−Removed: Companies included in the survey vary by industry, revenue and number of employees, and represent both public and private ownership, as well as nonprofit, government and mutual organizations.
+Added: In fiscal 2022, the Willis Towers Watson CDB Executive Compensation Survey Report, Mercer Benchmark Database/Total Remuneration Survey and Radford/Aon Compensation Database were used for this analysis, and the survey and database data extracted included median market rates for base salary, annual incentive, total cash compensation and total direct compensation.
+Added: Companies included in the surveys and database vary by industry, revenue and number of employees, and represent both public and private ownership, as well as nonprofit, government and mutual organizations.
Compensation paid by a comparator group of industry-specific companies, which includes 16 private, public and cooperative organizations in the agronomy, energy, food and grain industries, is also considered when making compensation decisions.
2 unchanged sentences
ADM Conagra Brands Kinder Morgan Mosaic
−Removed: Bunge Conoco Phillips Koch Industries Nutrien
+Added: Bunge Phillips 66 Koch Industries Nutrien
CF Industries General Mills Land O'Lakes Valero Energy
−Removed: Cargill Holly Frontier Marathon Petroleum Williams Companies
−Removed: Effective September 1, 2021, we removed Conoco Phillips from our comparator group and added Phillips 66.
−Removed: The latter is a refining and fuel distribution company, which is a more relevant comparator for our energy business.
+Added: Cargill HF Sinclair Marathon Petroleum Williams Companies
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 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.
−Removed: The total cash compensation was above the market median because actual earned annual variable pay awards were above target performance.
−Removed: 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.
+Added: For fiscal 2022, base pay was slightly below the market median and total cash compensation and total direct compensation were above the market median.
+Added: The total cash compensation was above the market median because actual earned annual variable pay awards were achieved at the maximum l evel of performance.
+Added: The above market median total direct compensation occurred because long-term incentive awards for the fiscal 2020-2022 performance period were achieved at the superior level of performance.
The following table presents a more detailed breakout of each compensation element:
2 unchanged sentences
Annual Variable Pay Broad-based employee short-term performance-based variable pay incentive for achieving predetermined annual financial and individual performance goals • Provides a direct link between pay and annual business objectives
−Removed: • Pay for performance to motivate and encourage the achievement of critical business initiatives
+Added: • Provides pay for performance to motivate and encourage the achievement of critical business initiatives
• Encourages proper expense control and containment
Profit-Sharing Selective employee short-term performance-based variable pay for achieving predetermined annual financial goals • Provides a direct link between employee pay and our profitability
−Removed: Long-Term Incentive Plans Long-term performance-based incentive for senior management to achieve predetermined triennial Return on Invested Capital ("ROIC") goals • Provides a direct link between senior management pay and long-term strategic business objectives
+Added: Long-Term Incentive Long-term performance-based incentive for senior management to achieve predetermined triennial Return on Invested Capital ("ROIC") goals • Provides a direct link between senior management pay and long-term strategic business objectives
• Aligns management and member-owner interests
5 unchanged sentences
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
−Removed: Additional Benefits Additional benefits provided to certain officers, including our Named Executive Officers • These benefits are provided as part of an overall total rewards package that strives to be competitive with comparable companies and retain individuals who are critical to us
+Added: Additional Benefits Additional benefits are provided to certain officers, including our Named Executive Officers • These benefits are provided as part of an overall total rewards package that strives to be competitive with comparable companies and retain individuals who are critical to us
Explanation of Ratio of Salary and Bonus to Total Compensation
2 unchanged sentences
The charts below illustrate the mix of base salary, annual variable pay at target performance (2022 Performance
−Removed: 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: Period) and long-term incentive compensation at target performance (2020-2022 Performance Period) for fiscal 2022 for our CEO and the other Named Executive Officers as a group.
Base salaries of our Named Executive Officers represent a fixed form of compensation paid on a semimonthly basis.
6 unchanged sentences
The Executive Committee is responsible for this process for our CEO.
−Removed: 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.
−Removed: Debertin, our Board of Directors approved a decision that neither Mr.
−Removed: 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.
−Removed: This decision aligns with our decision to not implement merit increases to base salaries in calendar year 2021 for any of our salaried employees.
−Removed: 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.
−Removed: In addition, as part of his career transition plan, Mr.
−Removed: 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.
−Removed: Smith became our executive vice president and general counsel.
−Removed: Upon assuming his new position, Mr.
−Removed: Zappa’s base salary was reduced by 26%.
+Added: Debertin received a 3.0% base salary increase effective January 1, 2022.
+Added: Our Board of Directors approved the increase to maintain a competitive pay position to market.
+Added: Nelligan, Mr.
+Added: Dusek and Mr.
+Added: Smith received base salary increases of 5.3%, 3.0%, 3.3% and 3.0%, respectively.
Annual Variable Pay
3 unchanged sentences
Our AVP program for fiscal 2022 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.
−Removed: The financial
−Removed: performance components included ROIC goals for CHS at the enterprise level.
+Added: The financial performance components included ROIC goals for CHS at the enterprise level.
The threshold, target and maximum ROIC goals for fiscal 2022 are set forth in the table below.
12 unchanged sentences
GAAP and may not be comparable to similarly titled measures used by other companies.
−Removed: 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.
+Added: 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 average funded debt plus equity at the beginning of the year.
We define adjusted net operating profit after tax as earnings before tax plus interest, net, and the sum is multiplied by the effective tax rate.
−Removed: For purposes of the fiscal 2021 AVP, we define funded debt as the average of long-term debt, including the current portion thereof, plus any guarantees thereof, as of the end of July 2020 and 2021, respectively, and equity at the end of July 2020.
+Added: For purposes of the fiscal 2022 AVP, we define funded debt as the sum of the average of long-term debt at the beginning and end of the year, including the current portion thereof, plus any guarantees thereof, using balances as of July 31, 2019, 2020, 2021 and 2022, respectively, and the total beginning of year equity as of July 31, 2019, 2020 and 2021, respectively.
Our Board of Directors approved the ROIC performance goals for the fiscal 2022 AVP and determined our CEO's individual goals.
4 unchanged sentences
Despite the significant and enduring operating and leadership challenges experienced in fiscal year 2022 and that we continue to experience, Mr.
−Removed: 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.
−Removed: 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:
+Added: Debertin, the other Named Executive Officers, and our other CHS employees responded with timely decisions and actions to adju st to those challenging business conditions and consistently execute to meet the needs of our customers and member-owners.
+Added: Strong global demand due to geopolitical factors and supply chain disruptions resulted in market volatility with higher commodity prices and refining margins in our Energy segment, which contributed to increased earnings in fiscal 2022.
+Added: The CEO and each other Named Executive Officer's performance was determined by the Board of Directors or the CEO, respectively, to have been strong against their individual objectives and therefore each Named Executive Officer was awarded the maximum payout for the 30% individual goals component.
+Added: Annual vari able pay awards that will be or have been paid under the Annual Variable Pay Plan for fiscal 2022 for the Named Executive Officers are as follows:
Name Variable Pay
3 unchanged sentences
Richard Dusek 1,265,000
−Removed: John Griffith 1,009,528
−Removed: James Zappa 877,813
+Added: Brandon Smith 1,350,330
Profit Sharing
6 unchanged sentences
ROIC Profit-Sharing Award
−Removed: In fiscal 2021 ROIC results were 6.2%.
+Added: ROIC results for fiscal 2022 were 16.1%.
Accordingly, each Named Executive Officer earned a 5% award under the Profit Sharing Plan.
−Removed: Long-Term Incentive Plans
+Added: Long-Term Incentive
Each Named Executive Officer was eligible to participate in the CHS Inc.
−Removed: Long-Term Incentive Plan ("LTIP"), which was renamed the CHS Inc.
−Removed: Executive Long-Term Incentive Plan, effective September 1, 2021.
−Removed: 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.
−Removed: The LTIP consists of three-year performance periods to ensure consideration is made for our long-term financial performance and strategic execution, with a new performance period beginning every year.
−Removed: Our Board of Directors approves the LTIP goals for each three-year period.
−Removed: Awards from the LTIP are contributed to the Deferred Compensation Plan after the end of each performance period.
+Added: Executive Long-Term Incentive Plan ("ELTIP").
+Added: The purpose of the ELTIP 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.
+Added: The ELTIP consists of three-year performance periods to ensure consideration is made for our long-term financial performance and strategic execution, with a new performance period beginning every year.
+Added: Our Board of Directors approves the ELTIP goals for each three-year period.
+Added: Awards from the ELTIP are contributed to the Deferred Compensation Plan after the end of each performance period.
These awards vest over an additional 28-month period following the performance period end date.
−Removed: The extended earning and vesting provisions of the LTIP are designed to help us retain key executives.
−Removed: Participants who leave CHS prior to retirement for reasons other than death or disability forfeit all unearned and unvested LTIP award balances.
−Removed: Participants who meet retirement criteria, die or become disabled receive prorated awards following the LTIP rules.
−Removed: Like the Annual Variable Pay Plan, award levels for the LTIP are set with regard to competitive considerations.
−Removed: The target level LTIP award level was 115% of base salary for Named Executive Officers, excluding Mr.
−Removed: Debertin, to improve our competitive position to market.
−Removed: For the three-year LTIP period ending in fiscal 2021, the LTIP performance measure was based upon our ROIC during the period.
−Removed: 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.
−Removed: For purposes of the fiscal 2019-2021 performance period, we define funded debt as the average of long-term debt, including the current portion thereof, plus any guarantees thereof, as of the end of July 2018, 2019, 2020 and 2021, respectively, and equity at the end of July 2018, 2019 and 2020, respectively.
+Added: The extended earning and vesting provisions of the ELTIP are designed to help us retain key executives.
+Added: Participants who leave CHS prior to retirement for reasons other than death or disability forfeit all unearned and unvested ELTIP award balances.
+Added: Participants who meet retirement criteria, die or become disabled receive prorated awards following the ELTIP rules.
+Added: Like the Annual Variable Pay Plan, award levels for the ELTIP are set with regard to competitive considerations.
+Added: The target level ELTIP award level was 115% of base salary for Named Executive Officers other than Mr.
+Added: Debertin for performance periods beginning before September 1, 2021 (including the three-year ELTIP performance period ending in fiscal 2022), and 125% of base salary for performance periods beginning on or after September 1, 2021.
+Added: Debertin's target level ELTIP award level was 150% of base salary for performance periods beginning before September 1, 2021 (including the three-year ELTIP performance period ending in fiscal 2022, and 300% of base s alary for performance periods beginning on or after September 1, 2021.
+Added: For the three-year ELTIP period ending in fiscal 2022, the ELTIP performance measure was based upon our ROIC during the period.
+Added: 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 average funded debt plus total equity at the beginning of the year.
+Added: For purposes of the fiscal 2020-2022 performance period, we define funded debt as the sum of the average of long-term debt at the beginning and end of the year, including the current portion thereof, plus any guarantees thereof, using balances as of July 31, 2019, 2020, 2021 and 2022, respectively, and the total beginning of year equity as of July 31, 2019, 2020 and 2021, respectively.
As also stated above, ROIC is not defined under U.S.
1 unchanged sentence
GAAP and may not be comparable to similarly titled measures used by other companies.
−Removed: Award opportunities for the fiscal 2019-2021 LTIP are expressed as a percentage of a participant's average base salary as of August 31 for each of the three years in the performance period.
−Removed: We must meet a three-year period threshold level of ROIC performance for any participant to earn an award payout under the 2019-2021 LTIP.
+Added: Award opportunities for the fiscal 2020-2022 ELTIP are expressed as a percentage of a participant's average base salary as of August 31 for each of the three years in the performance period.
+Added: We must meet a three-year period threshold level of ROIC performance for any participant to earn an award payout under the 2020-2022 ELTIP.
As indicated in the below table, the threshold, target, maximum and superior performance maximum ROIC goals for the fiscal 2020-2022 performance period are as follows:
6 unchanged sentences
Business conditions in the agriculture and energy industries were highly variable during the 2020-2022 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.
−Removed: 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;
−Removed: 5.1% in 2020;
+Added: In much of fiscal 2022, external market conditions in both our Ag and Energy segments resulted in financial and operating performance that greatly exceeded the superior performance level.
+Added: Both our Ag and Energy segments experienced significant favorable changes in business conditions and were subject to external economic forces that caused our ROIC performance to vary significantly during each year (5.1% in 2020;
6.2% in 2021;
+Added: and 16.1% in 2022).
Actual ROIC performance for the fiscal 2020-2022 performance period was 9.24%.
−Removed: LTIP payments for the fiscal 2019-2021 LTIP for the Named Executive Officers are as follows:
−Removed: Name LTIP Payments
+Added: ELTIP payments for the fiscal 2020-2022 ELTIP for the Named Executive Officers are as follows:
+Added: Name ELTIP Payments
Jay Debertin 6,437,835
2 unchanged sentences
Richard Dusek 2,476,093
−Removed: John Griffith 743,627
−Removed: James Zappa 1,185,542
−Removed: 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.
+Added: Brandon Smith 1,774,220
+Added: Details for the fiscal 2022 awards associated with the fiscal 2022-2024 ELTIP performance period are provided in the "2022 Grants of Plan-Based Awards" table.
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, 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.
−Removed: 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.
+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 ELTIP and active employees on the date the 2018 Retention Award was approved.
+Added: The 2018 Retention Award value is equal to the percentage of base salary used for the 2016-2018 ELTIP 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.
Pursuant to its original terms, the 2018 Retention Award would only be earned if the applicable participant continued active employment through January 1, 2021, or met the limited pro-ration criteria provided in the 2018 Retention Award.
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, 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.
−Removed: 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.
+Added: Debertin, Dusek, Hunhoff and our other eligible senior officers, in November 2020, our Board of Directors modified the terms of the 2018 Retention Award to provide that it would only be earned if the applicable participant continued active employment through January 1, 2022, except that, if the applicable participant's employment ended voluntarily or involuntarily for a reason unrelated to misconduct between January 1, 2021, and January 1, 2022, the participant would earn and be paid the 2018 Retention Award.
+Added: Payments for the 2018 Retention Award for the Named Executive Officers made in January 2022 are as follows:
+Added: Name Retention Award Payment
+Added: Jay Debertin $ 1,768,125
+Added: Darin Hunhoff 371,000
+Added: Richard Dusek 347,988
+Added: Nelligan and Mr.
+Added: Smith were not active participants in the 2016-2018 ELTIP or actively employed by us on the date the 2018 Retention Award was approved, they were not granted a 2018 Retention Award.
Retirement Benefits
53 unchanged sentences
Certain Named Executive Officers may have accumulated nonqualified plan balances or benefits that have been carried over from predecessor companies as a result of past mergers and acquisitions.
−Removed: Benefits from the SERP are primarily funded in a rabbi trust, with a balance at August 31, 2021, of $ 33.2 million.
+Added: Benefits from the SERP are primarily funded in a rabbi trust, with a balance as of August 31, 2022, of $ 33.0 million.
Benefits from the plan do not qualify for special tax treatment under the Internal Revenue Code.
2 unchanged sentences
During the year ended August 31, 2021, all of the Named Executive Officers were eligible to participate in the Deferred Compensation Plan.
−Removed: Debertin, Ms.
−Removed: Nelligan, Mr.
−Removed: Dusek and Mr.
−Removed: Griffith participated in the elective portion of the Deferred Compensation Plan.
+Added: Debertin and Ms.
+Added: Nelligan 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, 2022, of $134.4 million.
15 unchanged sentences
Basic life insurance equal to one times eligible compensation will be provided at our expense on the same basis as other eligible full-time employees.
−Removed: Named Executive Officers can choose various coverage levels of optional life insurance at their own expense on the same basis as other eligible full-time employees.
−Removed: Short- and Long-term Disability
+Added: Named Executive Officers can choose various coverage levels of optional and dependent life insurance at their own expense on the same basis as other eligible full-time employees.
+Added: Employee optional life coverage includes an equal amount of AD&D coverage.
+Added: We also provide at our expense Business Travel Accident coverage to Named Executive Officers when partaking in a business trip that furthers the business of CHS.
+Added: Short-term, Long-term and Individual Disability
Named Executive Officers participate in our Short-Term Disability Plan ("STD") on the same basis as other eligible full-time employees.
−Removed: The Named Executive Officers also participate in an executive Long-Term Disability Plan ("LTD").
−Removed: These plans replace a portion of income in the event that a Named Executive Officer is disabled under the terms of the plan and is unable to work full-time.
−Removed: The cost of STD and LTD coverage is paid by us.
−Removed: Flexible Spending Accounts/Health Savings Accounts/Health Reimbursement Accounts
+Added: The Named Executive Officers also participate in an executive Long-Term Disability Plan ("LTD") and, effective January 1, 2023, will receive Individual Disability Insurance ("IDI").
+Added: These programs replace a portion of income in the event that a Named Executive Officer is disabled under the applicable terms and is unable to work full-time.
+Added: The cost of STD and LTD coverage is, and the cost of IDI coverage will be, paid by us.
+Added: Flexible Spending Accounts/Health Savings Accounts
Named Executive Officers may participate in our Flexible Spending Account ("FSA") or Health Savings Account ("HSA") on the same basis as other eligible full-time employees.
6 unchanged sentences
Additional Benefits
−Removed: Certain benefits such as executive physical examinations and limited financial planning assistance are available to our Named Executive Officers.
+Added: Certain benefits such as executive physical examinations and limited financial and tax planning assistance are available to our Named Executive Officers.
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.
10 unchanged sentences
• gross misconduct in the performance of duties that results in economic harm to us.
−Removed: Under the Recovery Policy, incentive compensation includes annual cash incentive awards granted pursuant to either the Annual Variable Pay Plan or an individual cash incentive plan, annual cash awards earned under the Profit Sharing Plan and cash-based performance awards granted pursuant to the LTIP or any successor plan;
+Added: Under the Recovery Policy, incentive compensation includes annual cash incentive awards granted pursuant to either the Annual Variable Pay Plan or an individual cash incentive plan, annual cash awards earned under the Profit Sharing Plan and cash-based performance awards granted pursuant to the ELTIP or any successor plan;
in each case, provided that such compensation is granted, earned or vested based wholly or in part on the attainment of a financial performance measure.
9 unchanged sentences
The amended long-term incentive compensation opportunity contemplated by Employment Agreement Amendment No.
−Removed: 2 will apply for each three-year performance period that begins on or after September 1, 2021.
+Added: 2 applies for each three-year performance period that begins on or after September 1, 2021.
Pursuant to the terms of the Employment Agreement, as amended by Employment Agreement Amendment No.
Debertin is entitled to, among other things:
−Removed: • An annual base salary of $1,150,000, subject to increase by our Board of Directors from time to time;
+Added: • An annual base salary of $1,150,000, which has subsequently been increased by our Board of Directors to $1,313,064 and which is subject to further increase by our Board of Directors from time to time;
• 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;
3 unchanged sentences
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.
+Added: On November 1, 2022, we and Mr.
+Added: Debertin entered into another amendment to the Employment Agreement ("Employment Agreement Amendment No.
+Added: 3"), pursuant to which the term of the Employment Agreement was extended to August 31, 2026, and the termination provisions of the Employment Agreement were amended to provide that Mr.
+Added: Debertin would receive welfare benefit continuation for two years following the termination of his employment, if Mr.
+Added: Debertin chooses to retire from the Company on or after August 31, 2025.
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 a letter agreement we entered into with her January 7, 2020 (the "Nelligan Letter Agreement").
+Added: Nelligan's compensation is set forth in a letter agreement we entered into with her on 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, 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").
−Removed: In the event Ms.
−Removed: 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.
+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 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 required us to give Ms.
+Added: Nelligan's initial 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."
+Added: Smith's compensation is set forth in a letter agreement we entered into with him on January 1, 2021 (the "Smith Letter Agreement").
+Added: The Smith Letter Agreement provides Mr.
+Added: Smith with an initial annual base salary of $570,000 and a hiring bonus in the gross amount of $1,500,000 ("Hiring Bonus").
+Added: The Smith Letter Agreement provides for the payment of the Hiring Bonus in three installments of $400,000 in each of June 2021, June 2022, and June 2023, and a final installment of $300,000 in June 2024, provided Mr.
+Added: Smith is employed by CHS on the payment date.
+Added: Notwithstanding the foregoing, the Smith Letter Agreement provides that, in the event of an employment separation by us without good reason prior to payment of any portion of the Hiring Bonus, we will pay the Hiring Bonus in full no later than 60 days from the date of separation.
+Added: In addition, the Smith Letter Agreement provides that, in the event that during his second year of employment with us Mr.
+Added: Smith voluntarily terminates, resigns or otherwise ends his employment relationship without good reason, or is involuntarily terminated for good cause, he will reimburse us at the rate of 1/12th of the total amount of the $400,000 installment paid in June 2022, net after tax, for each uncompleted month in such second year of employment.
+Added: The Smith Letter Agreement provides that Mr.
+Added: Smith's initial target award for purposes of the Annual Variable Pay Plan will be equal to 115% of his annual base salary on August 31 of each year, and that Mr.
+Added: Smith will receive a full year of credit for the fiscal 2021 Annual Variable Pay Plan, rather than a prorated award based on the time that he was employed by us during fiscal 2021.
+Added: The Smith Letter Agreement also provides that Mr.
+Added: Smith's initial target award for purposes of the ELTIP will be equal to 115% of the average of his annual base salary on August 31 of each year in the applicable three-year performance
+Added: period, and that any award he receives under the ELTIP will be prorated by the number of full months (credited to September 1, 2020) he is eligible for participation in the ELTIP during the respective three-year performance period.
+Added: The Smith Letter Agreement also provides that we will assist with Mr.
+Added: Smith's moving and relocation expenses and will reimburse Mr.
+Added: Smith for one month of COBRA premium payments (net, after applicable tax withholding) for each of the two health insurance plans covering him and his family prior to his employment at CHS.
+Added: The severance pay and benefits to which Mr.
+Added: Smith 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."
Tax Considerations
18 unchanged sentences
2021 570,000 100,000 1,866,304 129,853 259,825 2,925,982
+Added: 2020 339,076 100,000 912,080 37,620 90,511 1,479,287
Darin Hunhoff
2 unchanged sentences
2020 567,630 — 3,236,871 563,056 167,292 4,534,849
−Removed: Richard Dusek Executive Vice President, CHS Country Operations 2021 532,421 — 2,332,916 272,341 73,888 3,211,566
−Removed: 2020 528,941 — 2,813,307 415,431 149,864 3,907,543
−Removed: 2019 513,696 — 1,360,928 465,830 142,030 2,482,484
−Removed: John Griffith
−Removed: Executive Vice President, Ag Business and CHS Hedging 2021 491,274 — 1,753,155 127,620 37,146 2,409,195
−Removed: 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
+Added: Richard Dusek Executive Vice President, Country Operations 2022 544,140 — 4,089,081 112,942 136,837 4,883,000
2021 532,421 — 2,332,916 272,341 73,888 3,211,566
2020 528,941 — 2,813,307 415,431 149,864 3,907,543
−Removed: (1) Information on Ms.
−Removed: Nelligan and Mr.
−Removed: Griffith includes compensation beginning in fiscal 2020 and fiscal 2021, respectively, the first year in which they became a Named Executive Officer.
+Added: Brandon Smith
+Added: Executive Vice President, General Counsel 2022 581,400 400,000 3,124,550 121,053 241,139 4,468,142
+Added: (1) Information on Mr.
+Added: Smith includes compensation beginning in fiscal 2022 the first year in which he became a Named Executive Officer.
(2) Includes hiring bonus payments to Ms.
−Removed: Nelligan of $200,000.
−Removed: (3) Includes $35,000 cash bonus for Mr.
−Removed: Zappa's strong performance in co-leading our global COVID-19 response initiative since the beginning of the pandemic in March 2020.
+Added: Nelligan of $100,000 in fiscal 2020 and fiscal 2021;
+Added: hiring bonus payment of $400,000 to Mr.
+Added: Smith in fiscal 2022.
(3) Amounts include retention awards earned in fiscal 2022, annual variable pay awards and long-term incentive awards.
−Removed: 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.
−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 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.
−Removed: The actual retention award value was as follows in fiscal 2020:
+Added: As discussed specifically in the "Other Compensation" section, 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 2016-2018 ELTIP and active employees on the date the retention award was approved.
+Added: Pursuant to its original terms, the retention award would generally be earned only if the participant continued active employment through January 1, 2021.
+Added: In November 2020, our Board of Directors modified the terms of the retention award to provide that it would generally only be earned if the applicable participant continued active employment through January 1, 2022.
+Added: The actual retention award value was distributed as follows in fiscal 2022:
Debertin, $1,768,125;
1 unchanged sentence
Dusek, $347,988.
−Removed: Zappa, $270,710.
−Removed: 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.
−Removed: Griffith was not a Named Executive Officer in fiscal 2020.
+Added: Nelligan and Mr.
+Added: Smith were not active participants in the 2016-2018 ELTIP or actively employed by us on the date the retention award was approved, they were not granted a retention award.
The actual annual variable pay award value was as follows in fiscal 2022, 2021 and 2020, respectively:
Debertin, $3,939,192, $3,357,300 and $1,173,439;
−Removed: Nelligan, $1,150,862 and $402,248 (Ms.
−Removed: Nelligan was not a Named Executive Officer in fiscal 2019);
+Added: Nelligan, $1,380,000, $1,150,862 and $402,248;
Hunhoff, $1,357,900, $1,157,313 and $404,503;
Dusek, $1,265,000, $1,074,988 and $375,729;
−Removed: Griffith, $1,009,528 (Mr.
−Removed: Griffith was not a Named Executive Officer in fiscal 2019 or 2020);
−Removed: Zappa, $877,813, $381,606 and $1,207,500.
−Removed: 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.
+Added: Smith, $1,350,330 (Mr.
+Added: Smith was not a Named Executive Officer in fiscal 2020 or 2021).
The actual long-term incentive award value was as follows in fiscal 2022, 2021 and 2020, respectively:
Debertin, $6,437,835, $3,872,541 and $6,152,095;
−Removed: Nelligan, $715,442 and $509,832 (Ms.
−Removed: Nelligan was not a Named Executive Officer in fiscal 2019);
+Added: Nelligan, $2,297,444, $715,442 and $509,832;
Hunhoff, $2,663,064, $1,349,938 and $2,544,868;
Dusek, $2,476,093, $1,257,928 and $2,379,008;
−Removed: Griffith, $743,627 (Mr.
−Removed: Griffith was not a Named Executive Officer in fiscal 2019 or 2020);
−Removed: Zappa, $1,185,542, $2,400,820 and $331,220.
−Removed: Zappa's award value for
−Removed: 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.
+Added: Smith, $1,774,220 (Mr.
+Added: Smith was not a Named Executive Officer in fiscal 2020 or 2021).
(4) This column represents both changes in pension value and above-market earnings on deferred compensation.
2 unchanged sentences
Debertin,$334,447, $504,012 and $1,086,570;
−Removed: Nelligan, $118,911 and $37,484 (Ms.
−Removed: Nelligan was not a Named Executive Officer in fiscal 2019);
+Added: Nelligan, $88,098, $118,911 and $37,484;
Hunhoff, $(320,238), $224,788 and $552,962;
Dusek, $(25,231), 182,389 and $394,289;
−Removed: Griffith, $123,725 (Mr.
−Removed: Griffith was not a Named Executive Officer in fiscal 2019 or 2020);
−Removed: Zappa, $141,547, $305,866 and $285,992.
+Added: Smith, $112,719 (Mr.
+Added: Smith was not a Named Executive Officer in fiscal 2020 or 2021).
+Added: Negative values are not reflected in the sum reported in the column.
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 2022, 2021 and 2020, respectively:
Debertin, $327,432, $312,872 and $181,221;
−Removed: Nelligan, $10,942 and $136 (Ms.
−Removed: Nelligan was not a Named Executive Officer in fiscal 2019);
+Added: Nelligan, $26,032, $10,942 and $136;
Hunhoff, $49,859, $40,674 and $10,094;
Dusek, $112,942, $89,952 and $21,142;
−Removed: Griffith, $3,895 (Mr.
−Removed: Griffith was not a Named Executive Officer in fiscal 2019 or 2020);
−Removed: Zappa, $35,223, $0 and $0.
+Added: Smith, $8,334 (Mr.
+Added: Smith was not a Named Executive Officer in fiscal 2020 or 2021).
(5) Includes fiscal 2022 employer contributions to the Deferred Compensation Plan:
3 unchanged sentences
Dusek, $109,428;
−Removed: Griffith, $17,367;
−Removed: Zappa, $31,740.
+Added: Smith, $98,992.
(6) Includes fiscal 2022 employer contribution to the 401(k) Plan:
3 unchanged sentences
Dusek, $16,125;
−Removed: Griffith, $14,329;
−Removed: Zappa, $14,193.
−Removed: (8) For fiscal 2021, includes executive LTD, travel accident insurance, financial planning and health assessment for Mr.
−Removed: Debertin, Mr.
−Removed: Hunhoff and Mr.
−Removed: (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.
−Removed: (10) For fiscal 2021, includes executive LTD, travel accident insurance, executive physical and financial planning for Mr.
−Removed: (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.
+Added: Smith, $12,175.
+Added: (7) For fiscal 2022, includes executive LTD, travel accident insurance, executive physical, financial planning, wellness program incentive, companion travel, and token commemorative gift for Mr.
+Added: (8) For fiscal 2022, includes executive LTD, travel accident insurance, executive physical, wellness program incentive, and token commemorative gift for Ms.
+Added: (9) For fiscal 2022, includes executive LTD, travel accident insurance, executive physical, wellness program incentive, companion travel, and token commemorative gift for Mr.
+Added: (10) For fiscal 2022, includes executive LTD, travel accident insurance, executive physical, financial planning, companion travel, and token commemorative gift for Mr.
+Added: (11) For fiscal 2022, includes moving and relocation expenses of $40,857 and aggregate gross-ups for taxes of $83,983, in each case, in accordance with the Smith Letter Agreement, as well as executive LTD, travel accident insurance and token commemorative gift for Mr.
Agreements with Named Executive Officers
−Removed: On May 22, 2017, we entered an Employment Agreement with Mr.
+Added: On May 22, 2017, we entered into an Employment Agreement with Mr.
Debertin, our President and Chief Executive Officer, which was amended by Employment Agreement Amendment No.
−Removed: 1 on November 5, 2020 and Employment Agreement Amendment No.
+Added: 1 on November 5, 2020, Employment Agreement Amendment No.
+Added: 2 on November 3, 2021, and Employment Agreement No.
3 on November 1, 2022.
The Employment Agreement, as amended by Employment Agreement Amendment No.
−Removed: 1 and Employment Agreement Amendment No.
+Added: 1, Employment Agreement Amendment No.
+Added: 2 and Employment Agreement No.
3, supersedes all previous agreements we had with Mr.
1 unchanged sentence
Debertin upon termination of employment.
−Removed: Other details of the Employment Agreement, as amended by Employment Agreement Amendment No.
−Removed: 1 and Employment Agreement Amendment No.
+Added: The severance payments to which Mr.
+Added: Debertin would be entitled under the Employment Agreement, as amended by Employment Agreement Amendment No.
+Added: 1, Employment Agreement Amendment No.
+Added: 2 and Employment Agreement No.
+Added: 3, 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 the Employment Agreement, as amended by Employment Agreement, Amendment No.
+Added: 1, Employment Agreement Amendment No.
+Added: 2, Employment Agreement No.
Debertin's employment arrangement with us are described in "Compensation Discussion and Analysis" above.
3 unchanged sentences
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 the "Compensation Discussion and Analysis" above.
+Added: Smith would be entitled under the Smith Letter Agreement 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: Smith's employment arrangement with us are described in the "Compensation Discussion and Analysis" above.
2022 Grants of Plan-Based Awards
14 unchanged sentences
332,763 665,526 2,662,105
−Removed: John Griffith 9/9/2020 (1)(3)
−Removed: 130,301 260,601 521,202
−Removed: 9/9/2020 (2)(3)
−Removed: 130,301 260,601 1,042,404
−Removed: 287,500 575,000 1,150,000
−Removed: 287,500 575,000 2,300,000
−Removed: James Zappa 9/9/2020 (1)
+Added: Brandon Smith 9/9/21 (1)
327,750 655,500 1,311,000
1 unchanged sentence
(1) Represents range of possible awards under our fiscal 2022 Annual Variable Pay Plan.
−Removed: (2) Represents range of possible awards under our LTIP for the fiscal 2021-2023 performance period.
−Removed: Goals are based on achieving a three-year ROIC of 4.1% threshold, 5.5% target and 6.5% maximum plus a potential award for 7.5% superior ROIC performance.
−Removed: Values displayed in the maximum column reflect 7.5% superior ROIC performance award potential.
−Removed: The 6.5% maximum performance award values are not listed in this table.
+Added: (2) Represents ran ge of possible awards under our ELTIP for the fiscal 2022-2024 performance period for Mr.
+Added: Values for Mr.
+Added: Debertin reflect the amendments to his long-term incentive compensation opportunity made pursuant to Employment Agreement Amendment No.
+Added: 2, including an increase in ELTIP target award opportunity to 300% of base salary.
Awards are measured over a three-year period and vest over an additional 28-month period.
−Removed: (3) These grants were terminated when Mr.
−Removed: Griffith was promoted to Executive Vice President, Ag Business and CHS Hedging on January 1, 2021.
−Removed: (4) Represents range of possible awards under our fiscal 2021 Annual Variable Pay Plan with respect to grants made to Mr.
−Removed: Griffith on January 1, 2021, at the time of his promotion to Executive Vice President, Ag Business and CHS Hedging.
−Removed: (5) Represents range of possible awards under our LTIP for the fiscal 2021-2023 performance period with respect to grants made to Mr.
−Removed: Griffith on January 1, 2021, at the time of his promotion to Executive Vice President, Ag Business and CHS Hedging.
+Added: (3) Represents range of possible awards under our ELTIP for the fiscal 2022-2024 performance period for Ms.
+Added: Nelligan, Mr.
+Added: Dusek and Mr.
+Added: Values include an increase in ELTIP target award opportunity to 125% of base salary.
+Added: Awards are measured over a three- year period and vest over an additional 28-month period.
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.
12 unchanged sentences
SERP 34.0833 1,089,526
−Removed: John Griffith Pension Plan 20.1667 365,692
−Removed: SERP 20.1667 439,422
−Removed: James Zappa Pension Plan 5.3333 195,322
+Added: Brandon Smith Pension Plan 1.4167 13,601
SERP 1.4167 127,161
26 unchanged sentences
Richard Dusek — 1,364,784 217,091 400,837 5,840,140
−Removed: John Griffith 49,881 1,034,895 245,290 — 2,083,809
−Removed: James Zappa — 2,430,132 672,259 — 6,023,612
+Added: Brandon Smith — 546,277 15,894 — 562,171
(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, $126,600.
−Removed: Griffith, $17,897.
Another portion of the contributions reported in this column are included within the amount reported as 2021 nonequity incentive plan compensation in the "Nonequity Incentive Plan Compensation" column of the Summary Compensation Table.
Those contributions were made in early fiscal 2022 based on fiscal 2021 results.
−Removed: The specific amounts reported as 2020 nonequity incentive plan compensation in the Summary Compensation Table are:
−Removed: Debertin, $1,056,095;
−Removed: Hunhoff, $202,252;
−Removed: Dusek, $112,719;
−Removed: Griffith, $31,984.
+Added: The specific amount reported as 2021 nonequity incentive plan compensation in the Summary Compensation Table is:
+Added: Nelligan, $115,086 .
(2) Contributions are made by us into the Deferred Compensation Plan on behalf of Named Executive Officers.
−Removed: 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:
+Added: Amounts include ELTIP contributions made in early fiscal 2022 based on fiscal 2019-2021 results, which contributions are also included in the amounts reported in the 2021 "Nonequity Incentive Plan Compensation" column of the Summary Compensation Table:
Debertin, $3,872,541;
2 unchanged sentences
Dusek, $1,257,928;
−Removed: Griffith, $1,018,856;
−Removed: Zappa, $2,400,820.
+Added: Smith, $451,858.
Also included are retirement contributions made in early fiscal 2022 based on fiscal 2021 results for Profit Sharing and 401(k) match on amounts exceeding IRS compensation limits.
4 unchanged sentences
Dusek $106,856;
−Removed: Griffith, $17,367;
−Removed: Zappa, $31,740.
+Added: Smith, $94,419.
(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, $112,942;
−Removed: Griffith, $3,895;
−Removed: Zappa, $35,223.
+Added: Smith, $8,334
(4) Amounts vary in accordance with individual pension plan provisions and voluntary employee deferrals and withdrawals.
1 unchanged sentence
Amounts previously reported in such fiscal years include earned, but deferred, salary and annual incentive pay;
−Removed: LTIP contributions, retirement contributions on amounts exceeding IRS compensation limits, Profit Sharing contributions and 401(k) match contributions made by us on behalf of the Named Executive Officer;
+Added: ELTIP contributions, retirement contributions on amounts exceeding IRS compensation limits, profit sharing contributions and 401(k) match contributions made by us on behalf of the Named Executive Officer;
and above-market earnings on deferred compensation.
29 unchanged sentences
Nelligan's reasonable, documented repatriation expenses to the Lake Geneva, Wisconsin, area in the event her employment is terminated by us without cause or by her with "good reason" within the first 36 months of her employment.
−Removed: 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.
+Added: The Smith Letter Agreement provides for severance in the event Mr.
+Added: Smith's 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.
During fiscal 2022, Messrs.
−Removed: 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.
−Removed: Effective September 1, 2021, that program was amended to provide executives, including Messrs.
−Removed: 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: Hunhoff and Dusek were covered by a broad-based employee severance program that provided executives with a lump sum payment of 26 weeks of pay, plus one week of pay per year of service, with a 12-month cap.
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 2022 is as follows:
3 unchanged sentences
Richard Dusek 550,000
−Removed: John Griffith 153,846
−Removed: James Zappa (3)
+Added: Brandon Smith (3)
(1) Includes the value of health and welfare insurance based on current monthly rates.
4 unchanged sentences
Nelligan would incur an estimated $100,000 of repatriation expenses to the Lake Geneva, Wisconsin, area that we would be required to reimburse under the Nelligan Letter Agreement.
−Removed: There are no other severance benefits offered to our Named Executive Officers, except for up to $10,000 of outplacement assistance, which would be included as imputed income, and government mandated benefits such as COBRA.
+Added: There are no other severance benefits offered to our Named Executive Officers, except for up to 12 months of career transition services and government mandated benefits such as COBRA.
Except as otherwise set forth above, the method of payment would be a lump sum.
−Removed: 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.
+Added: Named Executive Officers not covered by employment agreements are not offered any special
+Added: 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.
17 unchanged sentences
Director Compensation
−Removed: Our Board of Directors met seven times during the fiscal year ended August 31, 2021.
+Added: Our Board of Directors met eight times during the fiscal year ended August 31, 2022.
Each director (other than the chair of the Board) is a member of two Board committees.
At a minimum, each Board committee meets during each of the Board's six regular meetings.
−Removed: 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 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
−Removed: compensation conducted for the Governance Committee by Mercer (U.S.), a global compensation consulting firm, in fiscal 2019.
−Removed: 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.
+Added: For fiscal 2022, each director was provided compensation equivalent to $85,000 per year from September 1, 2021, through December 31, 2021, and equivalent to $89,000 per year from January 1, 2022, through August 31, 2022, paid in 12 monthly payments, plus actual expenses and a 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.
+Added: These amounts (other than the $89,000 annual compensation amount), as well as the minimum retirement plan account contribution for the fiscal years 2022-2024 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 compensation conducted for the Governance Committee by Mercer (U.S.), a global compensation consulting firm, in fiscal 2019.
+Added: During fiscal 2022, in order to
+Added: continue to align our director compensation with market practices, our Board of Directors approved increasing annual director compensation from $89,000 to $93,700, effective January 1, 2023.
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.
2 unchanged sentences
Further, directors are eligible to participate in the Deferred Compensation Plan through a retirement plan account.
−Removed: Other than direct contributions, contributions to the retirement plan account in the Deferred Compensation Plan are made based on our ROIC performance during specific three-year periods, with ROIC defined in the same manner as for the LTIP.
−Removed: We believe that using the ROIC performance metrics for this purpose aligns the interests of our directors with the interests of our management and member-owners.
+Added: Other than direct contributions, contributions to the retirement plan account in the Deferred Compensation Plan are made based on our ROIC performance during specific three-year periods, with ROIC defined in the same manner as for the ELTIP.
+Added: We believe that using the ROIC performance metric for this purpose aligns the interests of our directors with the interests of our management and member-owners.
The ROIC performance goal levels are established and approved by our Board of Directors prior to each three-year performance period.
9 unchanged sentences
Directors elected after that date are not eligible for benefits under that plan.
−Removed: Retirement benefits are funded by a rabbi trust, with a balance at August 31, 2021, of $7.7 million.
+Added: Retirement benefits are funded by a rabbi trust, with a balance of $7.1 million as of August 31, 2022.
Directors serving as of September 1, 2005, and their eligible dependents, are eligible to participate in our medical, life, dental, vision and hearing plans.
26 unchanged sentences
$50,000 (Maximum) 6.9% ROIC
−Removed: $25,000 (Target) 5.9% ROIC
−Removed: $12,500 (Threshold) 4.9% ROIC
−Removed: *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.
−Removed: If results had been less than the threshold ROIC performance level, no amount would have been credited .
−Removed: 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.
−Removed: This amount is reflected in the Director Compensation Table.
−Removed: For the fiscal years 2020-2022 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:
−Removed: Amount Credited* ROIC Performance
−Removed: $100,000 (Superior performance) 7.9% ROIC
−Removed: $50,000 (Maximum) 6.9% ROIC
$25,000 (Target, minimum contribution amount) 5.9% ROIC
−Removed: *The amount credited for the fiscal years 2020-2022 performance period will be mathematically interpolated when results occur between the superior performance, maximum and target ROIC performance levels.
−Removed: If results are less than the target ROIC performance level, the amount credited will be $25,000.
−Removed: 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:
−Removed: Amount Credited* ROIC Performance
−Removed: $100,000 (Superior performance) 7.5% ROIC
−Removed: $50,000 (Maximum) 6.5% ROIC
−Removed: $25,000 (Target, minimum contribution amount) 5.5% ROIC
−Removed: *The amount credited for the fiscal years 2021-2023 performance period will be mathematically interpolated when results occur between the superior performance, maximum and target ROIC performance levels.
−Removed: If results are less than the target ROIC performance level, the amount credited will be $25,000.
−Removed: 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:
−Removed: Amount Credited* ROIC Performance
−Removed: $100,000 (Superior performance) 9.7% ROIC
−Removed: $50,000 (Maximum) 7.7% ROIC
−Removed: $25,000 (Target, minimum contribution amount) 6.7% ROIC
−Removed: *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.
−Removed: If results are less than the target ROIC performance level, the amount credited will be $25,000.
+Added: *The amount credited for the fiscal years 2020-2022 performance period was required to be mathematically interpolated when results occurred between the superior performance, maximum and target ROIC performance levels.
+Added: If results had been less than the target ROIC performance level, the amount credited would have been $25,000.
+Added: Actual ROIC performance for the fiscal years 2020-2022 performance period was 9.24% and, accordingly, $100,000 was credited to each director's retirement plan account under the Deferred Compensation Plan.
+Added: This amount is reflected in the Director Compensation Table.
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.
22 unchanged sentences
Russell Kehl 113,167 317 124,997 238,481
−Removed: Edward Malesich 33,333 14,837 13,660 61,830
Perry Meyer 106,667 2,515 118,339 227,521
4 unchanged sentences
(1) Of this amount, the following directors deferred the succeeding amounts to the Deferred Compensation Plan:
+Added: Beckman, $16,664;
Clemensen, $21,997;
11 unchanged sentences
Future accruals under the plan were frozen as of August 31, 2011, as stated above.
+Added: The following directors had the following changes in pension values during fiscal 2022:
+Added: Blew, $(11,445);
+Added: Fritel, $(73,712);
+Added: Kayser, $(53,563);
+Added: Riegel, $(37,854);
+Added: Schurr, $(56,268).
+Added: Negative values are not reflected in the sum reported in this column.
Above-market earnings represent earnings exceeding 120% of the Federal Reserve long-term rate on applicable funds as determined by the IRS.
9 unchanged sentences
Kayser, $12,669;
−Removed: Malesich, $14,837;
Meyer, $2,515;
2 unchanged sentences
Throener, $49;
−Removed: (3) All other compensation includes health insurance premiums, conference and registration fees, meals and related spousal expenses for trips made with a director on CHS business.
+Added: Wagner, $188.
+Added: (3) All other compensation includes health insurance premiums, conference and registration fees, meals, a token commemorative gift, and related spousal expenses for trips made with a director on CHS business.
Total amounts vary primarily due to the variations in health insurance premiums, which are due to the number of dependents covered.
The health insurance premiums paid were less than $25,000 for each director, other than Mr.
−Removed: Throener, for whom we paid health insurance premiums of $29,060.
−Removed: 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.
−Removed: Wagner, $38,625;
−Removed: and for former director, Mr.
−Removed: Malesich, $ 8,333.
+Added: Blew, $27,548;
+Added: Kayser, $25,752;
+Added: Throener, $27,548.
+Added: All other compensation also includes fiscal 2022 director retirement plan Deferred Compensation Plan contributions of $100,000 for each director .
Compensation Committee Interlocks and Insider Participation
2 unchanged sentences
During fiscal 2022, the members of the Executive Committee were Messrs.
−Removed: Schurr (chair), Blew (vice chair), Erickson, Kehl and Riegel, and the members of the Governance Committee were Messrs.
−Removed: Jones (chair), Kehl (vice chair), Kayser, Riegel,
−Removed: and Throener, and Ms.
+Added: Schurr (chair), Blew (vice chair), Erickson, Holm and Kehl, and the members of the Governance Committee were Mr.
+Added: Jones (chair), Ms.
+Added: Wagner (vice chair), and Messrs.
+Added: Kayser, Kehl, Riegel, and Throener.
During fiscal 2022, 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, Fritel, Johnsrud, Jones, Kayser, Kehl and Throener, who were a party to related-person transactions.
+Added: Cordes, Erickson, Fritel, Johnsrud, Jones, Kayser, Kehl and Throener, who were a party to related-person transactions.
Compensation Committee Report
20 unchanged sentences
Scott Cordes (3)
−Removed: 200 * 11,750 *
Jon Erickson — * — *
14 unchanged sentences
Richard Dusek — * — *
−Removed: John Griffith — * — *
Darin Hunhoff 596 * — *
Olivia Nelligan — * — *
−Removed: James Zappa — * — *
+Added: Brandon Smith — * — *
All other executive officers — * 400 *
12 unchanged sentences
Name Transactions with CHS Cash Patronage Dividends
+Added: Scott Cordes $ 518,188 $ —
Jon Erickson 586,311 3,351
9 unchanged sentences
During the year ended August 31, 2022, no principal or interest was paid on the Kehl Loans.
−Removed: The terms of the Kehl Loans were provided pursuant to financing programs widely available to our qualified customers.
+Added: Also, in December 2021, our director David Kayser entered into a 2022 crop inputs loan with CHS Capital for the purchase of crop inputs with a maturity date in January 2023 ("Kayser Loan").
+Added: No interest accrues or is payable under the Kayser Loan.
+Added: The largest aggregate amount of principal outstanding under the Kayser Loan during the year ended August 31, 2022, and the balance on August 31, 2022, was $140,000.
+Added: The terms of these financing arrangements 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: Neither the Board of Directors nor management of CHS participates in the nomination process.
+Added: the Board of Directors nor management of CHS participates in the nomination process.
Accordingly, we have no nominating committee.
44 unchanged sentences
The following financial statements are filed as part of this Annual Report on Form 10-K.
−Removed: Report of Independent Registered Public Accounting Firm
+Added: Report of Independent Registered Public Accounting Firm (PCAOB ID No .
Consolidated Balance Sheets as of August 31, 202 2 and 202 1
90 unchanged sentences
1 to Employment Agreement, dated as of November 5, 2020, between CHS Inc.
−Removed: ( Incorporated by reference to our Form 10-K for the yea r ended August 31, 2020, filed November 5, 2020 ) .
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2020, filed November 5, 2020).
10.1B Amendment No .
+Added: 2 t o Employment Agreement, dated as of November 3, 2021, between CHS Inc.
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2021, filed November 4, 2021).
+Added: 10.1C Amendment No.
3 to Employment Agreement, dated as of November 1, 2022, between CHS Inc.
−Removed: Debertin (*)(+)
10.2 CHS Inc.
13 unchanged sentences
2022 Annual Variable Pay Plan Master Plan Document.
−Removed: 10.3A CHS Inc.
−Removed: 2021 Annual Variable Pay Plan Appendix, Plan Details.
10.4 CHS Inc.
−Removed: Long-Term Incentive Plan Appendix (2019-2021).
−Removed: (Incorporated by reference to our Form 10-K for the year ended August 31, 2019, filed November 6, 2019) (+)
+Added: Executive Long-Term Incentive Plan Document.
10.4A CHS Inc.
−Removed: Long-Term Incentive Plan Appendix (2020-2022).
−Removed: (Incorporated by reference to our Form 10-K for the year ended August 31, 2020, filed November 5, 202 0 ).
−Removed: 10.4B CHS Inc.
−Removed: Long-Term Incentive Plan Appendix (2021-2023).
+Added: Long-Term Incentive Plan Document.
10.5 CHS Inc.
86 unchanged sentences
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: ( Incorporated by reference to our Form 10-K for the year ended August 31, 2021, filed November 4, 2021) .
10.12F Amendment No.
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.
+Added: ( Incorporated by reference to our Form 10-K for the year ended August 31, 2021, filed November 4, 2021 ) .
10.13 Amended and Restated Limited Liability Company Agreement, dated February 1, 2012, between CHS Inc.
8 unchanged sentences
(Incorporated by reference to our Current Report on Form 8-K, filed September 11, 2015).
−Removed: 10.15 Joint venture agreement among CHS Inc., Cargill, Incorporated, and ConAgra Foods, Inc., dated March 4, 2013.
+Added: 10.15 Joint venture agreement among CHS Inc., Cargill, Incorporated and Con a gra Foods, Inc., dated March 4, 2013.
(Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2013, filed July 10, 2013).
10.15A Amendment No.
−Removed: 1 to the joint venture agreement among CHS Inc., Cargill Incorporated, and ConAgra Foods, Inc., dated April 30, 2013.
+Added: 1 to the joint venture agreement among CHS Inc., Cargill Incorporated and Con a gra Foods, Inc., dated April 30, 2013.
(Incorporated by reference to our Form 10-K for the year ended August 31, 2015, filed November 23, 2015).
10.15B Amendment No.
−Removed: 2 to the joint venture agreement among CHS Inc., Cargill Incorporated, and ConAgra Foods, Inc., dated May 31, 2013.
+Added: 2 to the joint venture agreement among CHS Inc., Cargill Incorporated and Con a gra Foods, Inc., dated May 31, 2013.
(Incorporated by reference to our Form 10-K for the year ended August 31, 2015, filed November 23, 2015).
10.15C Amendment No.
−Removed: 3 to the joint venture agreement among CHS Inc., Cargill Incorporated, and ConAgra Foods, Inc., dated July 24, 2013.
+Added: 3 to the joint venture agreement among CHS Inc., Cargill Incorporated and Con a gra Foods, Inc., dated July 24, 2013.
(Incorporated by reference to our Form 10-K for the year ended August 31, 2015, filed November 23, 2015).
10.15D Amendment No.
−Removed: 4 to the joint venture agreement among CHS Inc., Cargill Incorporated, and ConAgra Foods, Inc., dated March 27, 2014.
+Added: 4 to the joint venture agreement among CHS Inc., Cargill Incorporated and Con a gra Foods, Inc., dated March 27, 2014.
(Incorporated by reference to our Form 10-Q for the quarterly period ended February 28, 2014, filed April 3, 2014).
10.15E Amendment No.
−Removed: 5 to the joint venture agreement among CHS Inc., Cargill Incorporated, and ConAgra Foods, Inc., dated May 25, 2014.
+Added: 5 to the joint venture agreement among CHS Inc., Cargill Incorporated and Con a gra Foods, Inc., dated May 25, 2014.
(Incorporated by reference to our Form 10-Q for the quarterly period ended May 31, 2014, filed July 9, 2014).
49 unchanged sentences
f/k/a The Bank of Tokyo - Mitsubishi UFJ, Ltd., New York Branch, as administrative agent.
−Removed: ( Incorporated by r eference to our Form 10-K for the year ended Au gust 31, 2020, filed November 5, 2020).
+Added: (Incorporated by reference to our Form 10-K for the year ended August 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.
−Removed: ( I nco rporated by reference to our Form 10-K for the year ended August 31, 2020 , filed November 5, 2020 ).
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2020, filed November 5, 2020).
10.22H Omnibus Amendment No.
1 unchanged sentence
f/k/a The Bank of Tokyo - Mitsubishi UFJ, Ltd., New York Branch, as administrative agent.
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 202 1 , filed November 4 , 202 1 ).
10.22I Omnibus Amendment No.
1 unchanged sentence
f/k/a The Bank of Tokyo - Mitsubishi UFJ, Ltd., New York Branch, as administrative agent.
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2021, filed November 4, 2021).
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.
5 unchanged sentences
(Incorporated by reference to our Current Report on Form 8-K, filed July 5, 2018).
+Added: 10.23C Eleventh Amendment to Amended and Resta ted Receivables Purchase Agreement, dated as of August 30, 2022, 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.
10.24 Performance Guaranty, dated as of July 22, 2016, executed by CHS Inc.
−Removed: in favor of The Bank of Tokyo-Mitsubishi UFJ, Ltd.
−Removed: , New York Branch, as administrative agent.
+Added: in favor of The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent.
(Incorporated by reference to our Form 10-K for the year ended August 31, 2020.
14 unchanged sentences
3 to the Framework Agreement, dated as of June 26, 2020.
−Removed: ( In co rporated by reference to our Form 10-K for the year ended August 31, 20 20, filed November 5, 2020 ) .
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2020, filed November 5, 2020).
10.25D Amendment No.
4 to the Framework Agreement, dated as of September 24, 2020.
−Removed: ( Incorporated by reference to our Form 10-K for the year ended Aug ust 31, 2020, filed November 5, 2020 ) .
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2020, filed November 5, 2020).
10.25E Amendment No.
5 to the Framework Agreement, dated as of August 31, 2021.
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2021, filed November 4, 2021).
+Added: 10.25F Amendment No.
+Added: 6 to the Framework Agreement, dated as of August 30, 2022.
10.26 1996 SIFMA Master Repurchase Agreement, dated as of September 4, 2018, between CHS Inc.
8 unchanged sentences
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.
−Removed: ( Incorporated by reference to our Form 10-K for the year ended A ugust 31, 2020, filed November 5, 2020 ) .
+Added: (Incorporated by reference to our Form 10-K for the year ended August 31, 2020, filed November 5, 2020).
10.28 Guaranty, dated as of September 4, 2018, by CHS Inc.
1 unchanged sentence
(Incorporated by reference to our Form 10-K for the year ended August 31, 2018, filed December 3, 2018).
−Removed: 10.29 CHS Inc.
−Removed: Strategic Leadership Team 2018 Retention Award Document.
−Removed: (Incorporated by reference to our Form 10-Q for the quarterly period ended February 28, 2019, filed April 3, 2019).
−Removed: 10.29A Description of Amendment to the CHS Strategic Leadership Team 2018 Retention Award Document .
−Removed: (Incorporated by reference to our Form 10-K for the year ended August 31, 2020, filed November 5, 2020).
10.29 Letter Agreement, dated January 7, 2020, between CHS Inc.
1 unchanged sentence
(Incorporated by reference to our Current Report on Form 8-K, filed January 21, 2020).
+Added: 10.30 Letter Agreement, dated January 1, 2021, between CHS Inc.
+Added: and Brandon Smith.
21.1 Subsidiaries of the Registrant.
28 unchanged sentences
Olivia Nelligan
−Removed: /s/ Daniel Lehmann Vice President Finance, Corporate Controller
+Added: /s/ Daniel Lehmann Senior Vice President Finance, Corporate Controller
and Chief Accounting Officer
24 unchanged sentences
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
+Added: Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
74 unchanged sentences
Income before income taxes 1,810,017 515,320 386,878
−Removed: Income tax benefit ( 38,249 ) ( 36,731 ) ( 12,456 )
+Added: Income tax expense (benefit) 132,116 ( 38,249 ) ( 36,731 )
Net income 1,677,901 553,569 423,609
9 unchanged sentences
Net income $ 1,677,901 $ 553,569 $ 423,609
−Removed: Other comprehensive income (loss), net of tax:
+Added: Other comprehensive (loss) income, net of tax:
Pension and other postretirement benefits
4 unchanged sentences
( 15,708 ) 5,300 ( 15,378 )
−Removed: Other comprehensive income (loss), net of tax 17,533 ( 6,991 ) ( 22,312 )
+Added: Other comprehensive (loss) income, net of tax ( 38,944 ) 17,533 ( 6,991 )
Comprehensive income 1,638,957 571,102 416,618
19 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 )
7 unchanged sentences
Net income (loss) — — — — — 1,678,762 ( 861 ) 1,677,901
−Removed: Other comprehensive income, net of tax — — — — 17,533 — — 17,533
+Added: Other comprehensive loss, net of tax — — — — ( 38,944 ) — — ( 38,944 )
Estimated 2022 patronage refunds 508,803 — 153,858 — — ( 1,162,661 ) — ( 500,000 )
12 unchanged sentences
Equity (income) loss from investments, net of distributions received ( 48,847 ) ( 40,035 ) 49,130
−Removed: Provision for doubtful accounts 6,692 3,418 57,745
+Added: Provision for current expected credit losses 19,920 6,692 3,418
Gain/recovery on sale of business ( 13,083 ) ( 19,034 ) ( 1,450 )
11 unchanged sentences
Proceeds from disposition of property, plant and equipment 14,318 20,742 32,670
−Removed: Proceeds from sale of business 81,366 1,139 5,044
Expenditures for major maintenance ( 24,768 ) ( 40,922 ) ( 14,496 )
+Added: Proceeds from sale of business 73,152 81,366 1,139
Changes in CHS Capital notes receivable, net ( 161,340 ) 132,268 119,591
1 unchanged sentence
Payments from customer financing 94,388 6,892 35,791
−Removed: Business acquisitions, net of cash acquired — 231 ( 119,421 )
Other investing activities, net ( 14,876 ) 17,702 6,345
1 unchanged sentence
Cash flows from financing activities:
−Removed: Proceeds from notes payable and long-term borrowings 31,765,082 24,343,870 29,071,363
+Added: Proceeds from notes payable and long-term debt 20,730,750 31,765,082 24,343,870
Payments on notes payable, long-term debt and finance lease obligations ( 21,515,920 ) ( 31,806,918 ) ( 24,948,926 )
5 unchanged sentences
Effect of exchange rate changes on cash and cash equivalents ( 14,756 ) ( 4,063 ) 4,942
−Removed: Net increase (decrease) in cash and cash equivalents and restricted cash 325,491 ( 82,682 ) ( 244,265 )
+Added: Increase (decrease) in cash and cash equivalents and restricted cash 360,990 325,491 ( 82,682 )
Cash and cash equivalents and restricted cash at beginning of period 542,484 216,993 299,675
2 unchanged sentences
Cash paid for interest $ 113,726 $ 102,093 $ 119,354
−Removed: Cash (received) paid for income taxes, net of refunds ( 8,842 ) 6,840 19,918
+Added: Cash paid (received) for income taxes, net of refunds 19,712 ( 8,842 ) 6,840
Other significant noncash investing and financing transactions:
1 unchanged sentence
Finance lease obligations incurred 18,875 12,831 11,190
−Removed: Accrual of dividends and equities payable 150,000 63,000 180,000
−Removed: Assets contributed to joint venture — — 7,353
+Added: Accrual of patronage dividends and equity redemptions 1,000,000 150,000 63,000
The accompanying notes are an integral part of the consolidated financial statements.
12 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, 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 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.
The Nitrogen Production reportable segment consists of our investment in CF Industries Nitrogen, LLC ("CF Nitrogen"), and allocated expenses.
−Removed: The Foods reportable segment met quantitative criteria to become a reportable segment during fiscal 2021 and consists of our investment in Ventura Foods, LLC.
−Removed: ("Ventura Foods"), and allocated expenses.
See Note 14, Segment Reporting , for more information.
20 unchanged sentences
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 consolidated financial statements.
−Removed: In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No.
−Removed: 2016-13, Financial Instruments - Credit Losses ("ASC Topic 326"):
−Removed: Measurement of Credit Losses on Financial Instruments .
−Removed: The amendments in this ASU introduce a new approach, based on expected losses, to estimate credit losses on certain types of financial instruments.
−Removed: This ASU is intended to provide financial statement users with more decision-useful information about the expected credit losses associated with most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance sheet credit exposures.
−Removed: 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: 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.
−Removed: The impact of adoption on September 1, 2020, did not have a material impact on our consolidated financial statements.
−Removed: Not Yet Adopted
−Removed: There are not any recent accounting pronouncements yet to be adopted that we expect to have a material impact on our consolidated financial statements.
+Added: No recent accounting pronouncements are expected to have a material impact on our consolidated financial statements.
Note 2 Revenues
8 unchanged sentences
Corporate and Other primarily consists of our financing and hedging businesses.
−Removed: 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.
+Added: 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 the customer in accordance with the underlying contract.
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.
1 unchanged sentence
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 Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC Topic 606").
−Removed: 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.
+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.
+Added: Revenues arising from our financing business are recognized in accordance with Accounting Standards Codification ("ASC") Topic 470, Debt ("ASC Topic 470") and fall outside the scope of ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606").
Shipping and Handling Costs
7 unchanged sentences
Disaggregation of Revenues
−Removed: 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: 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 years ended August 31, 2022, 2021 and 2020.
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.
20 unchanged sentences
Total revenues $ 10,819,104 $ 17,499,389 $ 87,872 $ 28,406,365
−Removed: *Our Nitrogen Production and Foods reportable segments represent equity method investments that record earnings and allocated expenses, but not revenues.
−Removed: 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.
+Added: *Our Nitrogen Production reportable segment represents an equity method investment that records earnings and allocated expenses, but not revenues.
+Added: 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.
Contract Assets and Contract Liabilities
Contract assets relate to unbilled amounts arising from goods that have already been transferred to the customer where the right to payment is not conditional on the passage of time.
−Removed: This results in the recognition of an asset, as the amount of revenue recognized at a certain point in time exceeds the amount billed to the customer.
−Removed: Contract assets are recorded in accounts receivable within our Consolidated Balance Sheets and were immaterial as of August 31, 2021 and 2020.
−Removed: Contract liabilities relate to advance payments from customers for goods and services that we have yet to provide.
+Added: This results in recognition of an asset, as the amount of revenue recognized at a certain point in time exceeds the amount billed to customers.
+Added: Contract assets are recorded in receivables within our Consolidated Balance Sheets and were $ 17.2 million and $ 29.0 million as of August 31, 2022 and 2021, respectively.
+Added: Contract liabilities relate to advance payments received from customers for goods and services that we have yet to provide.
Contract liabilities of $ 541.5 million and $ 213.9 million as of August 31, 2022 and 2021, respectively, are recorded within other current liabilities on our Consolidated Balance Sheets.
21 unchanged sentences
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.
−Removed: These loans are primarily originated in the states of North Dakota and Minnesota.
−Removed: CHS Capital also has loans receivable from producer borrowers that are collateralized by various combinations of growing crops, livestock, inventories, accounts receivable, personal property and supplemental mortgages and are originated in the same states as the commercial notes.
−Removed: In addition to the short-term balances included in the table above, CHS Capital had long-term notes receivable, with durations of generally not more than 10 years, totaling $ 55.4 million and $ 101.5 million at August 31, 2021 and 2020, respectively.
+Added: These loans are primarily originated in the states of Minnesota and North Dakota.
+Added: CHS Capital also has loans receivable from producer borrowers that are collateralized by various combinations of growing crops, livestock, inventories, accounts receivable, personal property and supplemental mortgages and are primarily originated in the same states as the commercial notes, as well as South Dakota.
+Added: In addition to the short-term balances included in the table above, CHS Capital had long-term notes receivable, with durations of generally not more than 10 years, totaling $ 54.3 million and $ 55.4 million as of August 31, 2022 and 2021, respectively.
The long-term notes receivable are included in other assets on our Consolidated Balance Sheets.
58 unchanged sentences
If the FIFO method of accounting had been used, inventories would have been higher than the reported amount by $ 678.3 million and $ 359.2 million as of August 31, 2022 and 2021, respectively.
−Removed: During fiscal 2021, we recorded LIFO liquidations for certain energy product inventories.
−Removed: 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.
There were no liquidations of LIFO inventories during fiscal 2022 or fiscal 2020;
+Added: however, 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.
Note 5 Other Current Assets
4 unchanged sentences
Supplier advance payments 198,753 194,706
−Removed: Restricted cash 129,325 76,119
+Added: Restricted cash (Note 1) 109,517 129,325
Other 147,954 170,749
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 separate accounts to
−Removed: support the associated derivative contracts and may be used to fund or partially fund the settlement of those contracts as they expire.
+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.
Similar to our derivative financial instruments, margin and related deposits are reported on a gross basis.
13 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, Ardent Mills, LLC ("Ardent Mills") and TEMCO, LLC ("TEMCO"), which are summarized below.
+Added: Our significant equity method investments consist of CF Nitrogen, Ventura Foods, LLC ("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.
8 unchanged sentences
We have a $ 2.6 billion investment in CF Nitrogen, a strategic venture with CF Industries Holdings, Inc.
−Removed: ("CF Industries").
The investment consists of an approximate 8 % membership interest (based on product tons) in CF Nitrogen.
17 unchanged sentences
593,182 198,439 127,954
−Removed: Ventura Foods
−Removed: We have a 50 % interest in Ventura Foods, a joint venture with Mitsui & Co., that produces and distributes primarily edible oil-based products.
−Removed: 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.
−Removed: 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:
−Removed: (Dollars in thousands)
−Removed: Current assets $ 810,593 $ 695,911
−Removed: Noncurrent assets 628,516 647,105
−Removed: Current liabilities 374,361 274,807
−Removed: Noncurrent liabilities 313,253 331,235
−Removed: 2021 2020 2019
−Removed: (Dollars in thousands)
−Removed: Net sales $ 2,584,532 $ 2,246,412 $ 2,463,945
−Removed: Gross profit 350,708 289,590 299,959
−Removed: Net earnings 151,196 68,055 102,069
−Removed: Earnings attributable to CHS Inc.
−Removed: 78,519 34,026 51,608
−Removed: Ardent Mills and TEMCO
−Removed: 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.
−Removed: Additionally, we have a 50 % interest in TEMCO, which is a joint venture with Cargill focused on export elevation, primarily to Asia.
−Removed: 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.
−Removed: 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: Ventura Foods, Ardent Mills and TEMCO
+Added: We have a 50% interest in Ventura Foods, a joint venture with Mitsui & Co., that produces and distributes edible-oil-based products, a 12 % interest in Ardent Mills, the largest flour miller in the United States as a joint venture with Cargill Incorporated ("Cargill") and Conagra Brands, Inc., and a 50 % interest in TEMCO, a joint venture with Cargill focused on export elevation, primarily to Asia.
+Added: We account for Ventura Foods, Ardent Mills and TEMCO as equity method investments.
+Added: Our shares of the results of the Ventura Foods and Ardent Mills equity method investments are included in Corporate and Other and our share of the results of TEMCO are included in our Ag segment.
+Added: The following tables provide aggregate summarized financial information for our equity method investments in Ventura Foods, Ardent Mills and TEMCO for balance sheets as of August 31, 2022 and 2021, and statements of operations for the 12 months ended August 31, 2022, 2021 and 2020:
(Dollars in thousands)
31 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
−Removed: would be recognized.
+Added: Should the sum of the expected future net cash flows be less than the carrying value, an impairment loss 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.
25 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.
−Removed: Changes in the net carrying amount of goodwill for the year ended August 31, 2021, are included in the table below.
−Removed: There were no changes in the net carrying amount of goodwill for the year ended August 31, 2020.
+Added: Changes in the carrying amount of goodwill for the years ended August 31, 2022 and 2021, are included in the table below.
Energy Ag Corporate
4 unchanged sentences
Balances, August 31, 2021 552 160,475 10,574 171,601
−Removed: 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: Goodwill acquired during the period 8,906 — — 8,906
+Added: Goodwill disposed of during the period — ( 531 ) — ( 531 )
+Added: Balances, August 31, 2022 $ 9,458 $ 159,944 $ 10,574 $ 179,976
+Added: No goodwill has been allocated to our Nitrogen Production segment, which consists of a single investment accounted for under the equity method of accounting, and allocated expenses.
No goodwill impairments were identified as a result of our annual goodwill analyses performed as of July 31, 2022, 2021 or 2020.
−Removed: 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.
−Removed: 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, general and administrative expenses in the Consolidated Statement of Operations for the year ended August 31, 2019.
−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 or other factors.
+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.
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).
24 unchanged sentences
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
−Removed: over a period of two to five years, which is the estimated time lapse between major maintenance activities.
+Added: 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.
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.
16 unchanged sentences
The credit facility provides a committed amount of $ 2.75 billion that expires on July 16, 2024.
−Removed: As of August 31, 2021, there were no borrowings outstanding on this facility, and $ 345.0 million outstanding as of August 31, 2020.
−Removed: 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: There were no borrowings outstanding on this facility as of August 31, 2022.
+Added: We also maintain certain uncommitted bilateral facilities to support our working capital needs.
In addition to our facilities referenced above, our wholly-owned subsidiaries, CHS Europe S.a.r.l.
3 unchanged sentences
Under the Securitization Facility, we and certain of our subsidiaries ("Originators") sell trade accounts and notes receivable ("Receivables") to Cofina Funding, LLC ("Cofina"), a wholly-owned bankruptcy-remote indirect subsidiary of CHS.
−Removed: Cofina in turn transfers the Receivables to the Purchasers, and this arrangement is accounted for as a secured borrowing.
+Added: Cofina in turn transfers the Receivables to the Purchasers, and this arrangement is accounted for as a secured financing.
We use the proceeds from the sale of Receivables under the Securitization Facility for general corporate purposes and settlements are made on a monthly basis.
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, 2021, total availability under the Securitization Facility was $ 671.9 million, $ 600.0 million of which had been utilized.
+Added: The Securitization Facility consists of a committed portion with a maximum availability of $ 850.0 million and an uncommitted portion with a maximum availability of $ 250.0 million.
+Added: As of August 31, 2022, total availability under the Securitization Facility was $ 875.9 million, of which no amount was utilized.
We also have a repurchase facility ("Repurchase Facility") related to the Securitization Facility.
−Removed: Under the Repurchase Facility, we can borrow up to $ 150.0 million, collateralized by a subordinated note issued by Cofina in favor of the Originators and representing a portion of the outstanding balance of the Receivables sold by the Originators to Cofina under the Securitization Facility.
−Removed: As of August 31, 2021 and 2020, the outstanding balance under the Repurchase Facility was $ 150.0 million.
−Removed: 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.
−Removed: On July 30, 2021 the Securitization Facility was further amended to extend its
−Removed: termination date to August 31, 2021.
−Removed: 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.
+Added: Under the Repurchase Facility, we can obtain repurchase agreement financing in an amount up to $ 150.0 million for subordinated notes issued by Cofina in favor of the Originators and representing a portion of the outstanding balance of the Receivables sold by the Originators to Cofina under the Securitization Facility.
+Added: No balance was outstanding under the Repurchase Facility as of August 31, 2022.
+Added: On August 30, 2022, the Securitization Facility and Repurchase Facility were amended to extend their respective maturity dates to August 29, 2023, and increase the maximum committed availability under the Securitization Facility to $ 850.0 million from $ 700.0 million.
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, 2021, of which $ 49.9 million was borrowed under these commitments.
−Removed: On September 29, 2021, the total commitments under the program were reduced to $ 100.0 million.
+Added: The total commitments under the program were $ 100.0 million;
+Added: however, no amounts were borrowed under these commitments as of August 31, 2022.
CHS Capital borrows funds under short-term notes issued as part of a surplus funds program.
3 unchanged sentences
During the year ended August 31, 2022, we repaid approximately $ 31.1 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 were funded on November 2, 2020.
Amounts included in long-term debt on our Consolidated Balance Sheets as of August 31, 2022 and 2021, are presented in the table below:
(Dollars in thousands)
−Removed: 4.00 % unsecured notes $ 100 million face amount, due in equal installments beginning in fiscal 2017 through fiscal 2021
4.67 % unsecured notes $ 130 million face amount, due in fiscal 2023
−Removed: 4.67 % unsecured notes $ 130 million face amount, due in fiscal 2023
$ 130,000 $ 130,000
12 unchanged sentences
3.24 % unsecured notes $ 95 million face amount, due in fiscal 2027
+Added: 95,000 95,000
4.74 % unsecured notes $ 95 million face amount, due in fiscal 2028
1 unchanged sentence
3.48 % unsecured notes $ 100 million face amount, due in fiscal 2030
+Added: 100,000 100,000
4.89 % unsecured notes $ 100 million face amount, due in fiscal 2031
1 unchanged sentence
3.58 % unsecured notes $ 65 million face amount, due in fiscal 2032
+Added: 65,000 65,000
4.71 % unsecured notes $ 100 million face amount, due in fiscal 2033
1 unchanged sentence
3.73 % unsecured notes $ 115 million face amount, due in fiscal 2035
+Added: 115,000 115,000
5.40 % unsecured notes $ 125 million face amount, due in fiscal 2036
1 unchanged sentence
Private placement debt 1,545,000 1,545,000
−Removed: 2.25 % unsecured term loans from cooperative and other banks, due in fiscal 2025 (a)
−Removed: Bank financing — 366,000
+Added: 4.00 % unsecured term loan from cooperative and other banks, due in fiscal 2025 (a)
+Added: Term loan 366,000 —
Finance lease liabilities 44,773 36,034
Other notes and contracts with interest rates from 4.0 % to 9.0 %
−Removed: 33,443 34,709
Deferred financing costs ( 3,535 ) ( 4,090 )
+Added: Other 4,314 7,974
Total long-term debt 1,958,814 1,618,361
1 unchanged sentence
Long-term portion $ 1,668,209 $ 1,579,911
−Removed: (a) Borrowings are variable under the agreement and bear interest at a base rate (or LIBOR) plus an applicable margin.
+Added: (a) Borrowings are variable under the agreement and bear interest at a base rate plus an applicable margin.
As of August 31, 2022, the fair value of our long-term debt is estimated to be $ 1.8 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: 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.
−Removed: On February 19, 2022, the total funded loan balance outstanding reverts to a nonrevolving term loan that is payable on September 4, 2025.
−Removed: There was no balance outstanding under this facility as of August 31, 2021.
+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 could be paid down and readvanced in an amount up to $ 366.0 million until February 19, 2022.
+Added: On February 19, 2022, the total advanced loan balance of $ 366.0 million reverted to a nonrevolving term loan that is payable on September 4, 2025.
Long-term debt outstanding as of August 31, 2022, 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:
15 unchanged sentences
We are subject to tax on income from nonpatronage sources, nonqualified patronage distributions and undistributed patronage-sourced income.
−Removed: Income tax (benefit) expense is primarily the current tax payable for the period and the change during the period in certain deferred tax assets and liabilities.
+Added: Income tax expense (benefit) is primarily the current tax payable for the period and the change during the period in certain deferred tax assets and liabilities.
Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities recognized under U.S.
GAAP and such amounts recognized for federal and state income tax purposes, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.
−Removed: The (benefit from) provision for income taxes for the years ended August 31, 2021, 2020 and 2019 is as follows:
+Added: The provision for (benefit from) income taxes for the years ended August 31, 2022, 2021 and 2020 is as follows:
2022 2021 2020
9 unchanged sentences
Total $ 132,116 $ ( 38,249 ) $ ( 36,731 )
−Removed: Domestic income before income taxes was $ 497.5 million, $ 324.4 million and $ 825.7 million for the years ended August 31, 2021, 2020 and 2019, respectively.
−Removed: Foreign income (loss) before income taxes was $ 17.8 million, $ 62.5 million and ($ 3.1 ) million for the years ended August 31, 2021, 2020 and 2019, respectively.
+Added: Domestic income before income taxes was $ 1.8 billion, $ 497.5 million and $ 324.4 million for the years ended August 31, 2022, 2021 and 2020, respectively.
+Added: Foreign (loss) income before income taxes was ($ 4.9 ) million, $ 17.8 million and $ 62.5 million for the years ended August 31, 2022, 2021 and 2020, respectively.
Deferred taxes are comprised of basis differences related to investments, accrued liabilities and certain federal and state tax credits.
12 unchanged sentences
Deferred tax liabilities:
−Removed: Pension 24,277 17,131
+Added: Pension costs 14,600 24,277
Investments 169,970 110,910
Property, plant and equipment 605,463 557,129
−Removed: Right of use assets 61,870 64,140
+Added: Lease right of use assets 58,852 61,870
Other — 28,549
1 unchanged sentence
Net deferred tax liabilities $ 139,019 $ 101,528
−Removed: 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.
+Added: We had total gross loss carryforwards of $ 500.2 million, as of August 31, 2022, of which $ 242.4 million will expire over periods ranging from fiscal 2023 to fiscal 2043.
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 $ 129.7 million and $ 125.5 million
−Removed: as of August 31, 2021 and 2020, respectively.
−Removed: 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: 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.
+Added: McPherson refinery's gross state tax credit carryforwards for income tax were approximately $ 122.8 million and $ 129.7 million as of August 31, 2022 and 2021, respectively.
+Added: Our 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.
+Added: Our state tax credits of $ 122.8 million will begin to expire on August 31, 2023.
The reconciliation of the statutory federal income tax rates to the effective tax rates for the years ended August 31, 2022, 2021 and 2020 is as follows:
12 unchanged sentences
Effective tax rate 7.3 % ( 7.4 ) % ( 9.5 ) %
−Removed: 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 2022 income tax expense were increased nonpatronage earnings and other nondeductible items, which are partially offset by the current Domestic Production Activities Deduction ("DPAD") benefit during fiscal 2022.
+Added: Primary drivers of the fiscal 2021 income tax benefit were retaining the current DPAD benefit and from tax planning associated with certain assets.
Primary drivers of the fiscal 2020 income tax benefit were retaining the current DPAD benefit and the settlement of a U.S.
federal audit, resulting in additional tax credit carryovers, which were partially offset by an increase in our uncertain tax position.
−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.
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 2020 remain subject to examination for certain issues.
+Added: We are currently under examination for fiscal years 2016 through 2019.
+Added: Fiscal years 2007 through 2015 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.
13 unchanged sentences
We recognize interest and penalties related to unrecognized tax benefits in our provision for income taxes.
−Removed: 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.
+Added: We recognized benefits of $ 0.7 million and $ 1.4 million and expense of $ 1.0 million for interest and penalties related to unrecognized tax benefits in our Consolidated Statements of Operations for the years ended August 31, 2022, 2021 and 2020, respectively, and a related $ 3.3 million and $ 2.5 million interest payable on our Consolidated Balance Sheets as of August 31, 2022 and 2021, respectively.
Note 12 Equities
2 unchanged sentences
The cash portion of the qualified patronage distribution, if any, is determined annually by the Board of Directors, with the balance issued in the form of qualified and/or nonqualified capital equity certificates.
−Removed: Total patronage distributions for fiscal 2021 are estimated to be $ 280.3 million, with the qualified cash portion estimated to be $ 50.0 million and nonqualified equity distributions of $ 230.3 million.
−Removed: No portion of annual net earnings for fiscal 2021 will be issued in the form of qualified capital equity certificates.
+Added: Total patronage distributions for fiscal 2022 are estimated to be $ 1.2 billion, with the qualified cash portion estimated to be $ 500.0 million, estimated qualified equity distributions of $ 508.8 million and estimated nonqualified equity distributions of $ 153.9 million.
The following table presents estimated patronage distributions for the year ending August 31, 2023, and actual patronage distributions for the years ended August 31, 2022, 2021 and 2020:
8 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 Board of Directors overall discretion whether to redeem outstanding equity.
In accordance with authorization from the Board of Directors, we expect total redemptions related to the year ended August 31, 2022, which will be distributed in fiscal 2023, to be approximately $ 500.0 million.
2 unchanged sentences
Preferred Stock
−Removed: The following is a summary of our outstanding preferred stock as of August 31, 2021, all shares of which are listed and traded on The Nasdaq:
+Added: The following is a summary of our outstanding preferred stock as of August 31, 2022, all shares of which are listed and traded on the Global Select Market of The Nasdaq:
Nasdaq Symbol Issuance Date Shares Outstanding Redemption Value Net Proceeds (a) Dividend Rate
6 unchanged sentences
Class B Cumulative Redeemable, Series 4 CHSCL 1/21/2015 20,700,000 517.5 501.0 7.50 % Quarterly 1/21/2025
−Removed: (a) Includes patrons' equities redeemed with preferred stock.
−Removed: (b) The Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2 accumulates dividends at a rate of 7.10 % per year until March 31, 2024, and then at a rate equal to the three-month LIBOR plus 4.298 %, not to exceed 8.00 % per annum, subsequent to March 31, 2024.
−Removed: (c) The Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3 accumulates dividends at a rate of 6.75 % per year until September 30, 2024, and then at a rate equal to the three-month LIBOR plus 4.155 %, not to exceed 8.00 % per annum, subsequent to September 30, 2024.
+Added: (a) Includes patron equities redeemed with preferred stock.
+Added: (b) The Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2 accumulates dividends at a rate of 7.10 % per year until March 31, 2024, and then at a rate equal to the three-month benchmark interest rate plus 4.298 %, not to exceed 8.00 % per annum, subsequent to March 31, 2024.
+Added: (c) The Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3 accumulates dividends at a rate of 6.75 % per year until September 30, 2024, and then at a rate equal to the three-month benchmark interest rate plus 4.155 %, not to exceed 8.00 % per annum, subsequent to September 30, 2024.
(d) Preferred stock is redeemable for cash at our option, in whole or in part, at a per share price equal to the per share liquidation preference of $ 25.00 per share, plus all dividends accumulated and unpaid on that share to and including the date of redemption, beginning on the dates set forth in this column.
23 unchanged sentences
Changes in accumulated other comprehensive income (loss) by component, for the years ended August 31, 2022, 2021 and 2020 are as follows:
−Removed: Pension and Other Postretirement Benefits Unrealized Net Gain (Loss) on Available for Sale Investments Cash Flow Hedges Foreign Currency Translation Adjustment Total
+Added: Pension and Other Postretirement Benefits Cash Flow Hedges Foreign Currency Translation Adjustment Total
(Dollars in thousands)
Balance as of August 31, 2019, net of tax
+Added: $ ( 172,478 ) $ 15,297 $ ( 69,752 ) $ ( 226,933 )
Other comprehensive income (loss), before tax:
6 unchanged sentences
12,798 ( 4,411 ) ( 15,378 ) ( 6,991 )
−Removed: Reclassifications 416 ( 8,861 ) 983 2,756 ( 4,706 )
Balance as of August 31, 2020, net of tax
+Added: ( 159,680 ) 10,886 ( 85,130 ) ( 233,924 )
Other comprehensive income (loss), before tax:
7 unchanged sentences
Balance as of August 31, 2021, net of tax
+Added: ( 141,385 ) 4,824 ( 79,830 ) ( 216,391 )
Other comprehensive income (loss), before tax:
7 unchanged sentences
Balance as of August 31, 2022, net of tax
−Removed: 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.
+Added: $ ( 168,640 ) $ 8,843 $ ( 95,538 ) $ ( 255,335 )
+Added: Amounts reclassified from accumulated other comprehensive income (loss) were related to pension and other postretirement benefits, cash flow hedges 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 and foreign currency translation reclassifications related to sales of businesses are recorded in other income.
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.
+Added: Gains or losses on foreign currency translation reclassifications are recorded in other income.
Note 13 Benefit Plans
13 unchanged sentences
Actuarial loss (gain):
−Removed: Assumption change ( 12,847 ) 40,694 ( 55 ) 775 ( 398 ) 1,275
+Added: Experience study and mortality updates 2,941 23,716 43 1,272 19 ( 317 )
+Added: Other demographic experience* 9,875 11,242 1,313 762 717 ( 448 )
+Added: Discount rate change ( 164,543 ) ( 12,847 ) ( 2,892 ) ( 55 ) ( 4,979 ) ( 398 )
Plan amendments 132 113 — — — —
4 unchanged sentences
Fair value of plan assets at beginning of period $ 993,124 $ 976,542 $ — $ — $ — $ —
−Removed: Actual gain on plan assets 70,161 90,241 — — — —
+Added: Actual (loss) gain on plan assets ( 166,789 ) 70,161 — — — —
Company contributions 39,000 23,200 2,018 1,264 1,801 1,763
−Removed: Settlements — — — ( 2,130 ) — —
Benefits paid ( 77,913 ) ( 76,779 ) ( 2,018 ) ( 1,264 ) ( 1,801 ) ( 1,763 )
11 unchanged sentences
Ending balance $ 236,230 $ 200,658 $ 2,983 $ 5,191 $ ( 19,671 ) $ ( 17,132 )
−Removed: The accumulated benefit obligation of the qualified pension plans was $ 877.9 million and $ 871.6 million at August 31, 2021 and 2020, respectively.
−Removed: The accumulated benefit obligation of the nonqualified pension plans was $ 20.5 million and $ 18.2 million at August 31, 2021 and 2020, respectively.
+Added: * Other demographic experience is comprised of all demographic experience different than anticipated, including terminations, retirements, deaths, pay, etc.
+Added: The accumulated benefit obligation of the qualified pension plans was $ 728.9 million and $ 877.9 million as of August 31, 2022 and 2021, respectively.
+Added: The accumulated benefit obligation of the nonqualified pension plans was $ 18.3 million and $ 20.5 million as of August 31, 2022 and 2021, respectively.
Information for the pension plans with an accumulated benefit obligation in excess of plan assets is set forth below:
16 unchanged sentences
Net periodic benefit cost (benefit) $ 43,064 $ 40,119 $ 38,950 $ 1,571 $ 804 $ 818 $ ( 205 ) $ ( 131 ) $ ( 40 )
−Removed: Plan assumptions for the years ended August 31, 2021, 2020 and 2019, are as follows:
−Removed: Pension Benefits Nonqualified
−Removed: Pension Benefits Other Benefits
−Removed: 2021 2020 2019 2021 2020 2019 2021 2020 2019
−Removed: Weighted-average assumptions to determine the net periodic benefit cost:
−Removed: 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
−Removed: Discount rate 2.65 % 3.06 % 4.23 % 2.07 % 2.70 % 4.09 % 2.43 % 2.89 % 4.08 %
−Removed: Expected return on plan assets 4.90 % 5.50 % 5.50 % N/A N/A N/A N/A N/A N/A
−Removed: Rate of compensation increase 4.99 % 5.28 % 5.14 % 4.99 % 5.28 % 5.14 % N/A N/A N/A
−Removed: Weighted-average assumptions to determine the benefit obligations:
−Removed: Discount rate 2.78 % 2.67 % 3.06 % 2.08 % 2.15 % 2.70 % 2.57 % 2.43 % 2.89 %
−Removed: Rate of compensation increase 4.79 % 4.99 % 5.28 % 4.79 % 4.99 % 5.28 % N/A N/A N/A
Components of net periodic benefit costs and amounts recognized in other comprehensive loss (income) for the years ended August 31, 2022, 2021 and 2020, are as follows:
17 unchanged sentences
Amortization of actuarial loss (gain) 1,872 245 ( 1,615 )
+Added: Plan assumptions for the years ended August 31, 2022, 2021 and 2020, are as follows:
+Added: Pension Benefits Nonqualified
+Added: Pension Benefits Other Benefits
+Added: 2022 2021 2020 2022 2021 2020 2022 2021 2020
+Added: Weighted-average assumptions to determine the net periodic benefit cost:
+Added: Interest credit rate 4.65 % 4.65 % 4.65 % 4.65 % 4.65 % 4.65 % N/A N/A N/A
+Added: Discount rate 2.80 % 2.65 % 3.06 % 2.04 % 2.07 % 2.70 % 2.57 % 2.43 % 2.89 %
+Added: Expected return on plan assets 4.88 % 4.90 % 5.50 % N/A N/A N/A N/A N/A N/A
+Added: Rate of compensation increase 4.79 % 4.99 % 5.28 % 4.79 % 4.99 % 5.28 % N/A N/A N/A
+Added: Weighted-average assumptions to determine the benefit obligations:
+Added: Interest credit rate 4.65 % 4.65 % 4.65 % 4.65 % 4.65 % 4.65 % N/A N/A N/A
+Added: Discount rate 4.69 % 2.78 % 2.67 % 4.49 % 2.08 % 2.15 % 4.64 % 2.57 % 2.43 %
+Added: Rate of compensation increase 4.93 % 4.79 % 4.99 % 4.93 % 4.79 % 4.99 % N/A N/A N/A
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
−Removed: 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 projected cash flows.
The discount rate reflects the rate at which the associated benefits could be effectively settled as of the measurement date.
In estimating this rate, we look at rates of return on fixed-income investments of similar duration to the liabilities in the plans that receive high investment-grade ratings by recognized ratings agencies.
−Removed: For measurement purposes, a 6.8 % annual rate of increase in the per capita cost of covered health care benefits was assumed for the year ended August 31, 2021.
−Removed: The rate was assumed to decrease gradually to 4.5 % by 2028 and remain at that level thereafter.
An annual analysis of the risk versus the return of the investment portfolio is conducted to justify the expected long-term rate of return assumption.
1 unchanged sentence
Adjustments are made to the expected long-term rate of return assumption when deemed necessary, based upon revised expectations of future investment performance of the overall investment markets.
+Added: For measurement purposes, a 7.0 % annual rate of increase in the per capita cost of covered health care benefits was assumed for the year ended August 31, 2022.
+Added: The rate was assumed to decrease gradually to 4.5 % by 2030 and remain at that level thereafter.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans.
21 unchanged sentences
Investment objectives for the plans' assets are as follows:
−Removed: • Optimization of the long-term returns on plan assets at an acceptable level of risk;
−Removed: • Maintenance of broad diversification across asset classes and among investment managers;
+Added: • Optimize the long-term returns on plan assets at an acceptable level of risk;
+Added: • Maintain broad diversification across asset classes and among investment managers;
• Focus on long-term return objectives.
6 unchanged sentences
The qualified plan committee believes that with prudent risk tolerance and asset diversification, the plans should be able to meet pension obligations in the future.
−Removed: Our pension plans' recurring fair value measurements by asset category at August 31, 2021 and 2020, are presented in the tables below:
+Added: Our pension plans' recurring fair value measurements by asset category as of August 31, 2022 and 2021, are presented in the tables below:
Level 1 Level 2 Level 3 Total
17 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
6 unchanged sentences
Common/collective trust investments can be redeemed daily and without restriction.
−Removed: Redemption of the entire investment balance generally requires a 45- to 60-day notice period.
+Added: Redemption of the entire investment
+Added: balance generally requires a 45- to 60-day notice period.
The equity funds provide exposure to large-, mid- and small-cap U.S.
4 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.
−Removed: Other assets.
−Removed: Other assets primarily include real estate funds and hedge funds held in the asset portfolio of our U.S.
−Removed: 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 "multiemployer plan" under the accounting standards.
+Added: Redemptions of these interests generally require a 45- to 60-day notice period.
+Added: We are one of approximately 400 employers contributing 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:
21 unchanged sentences
We are an integrated agricultural cooperative, 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, processed grains and oilseeds, renewable fuels and food products.
+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 grain and oilseed, processed grain and oilseed, 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 four reportable segments:
−Removed: Energy, Ag, Nitrogen Production and Foods.
+Added: We have aggregated those operating segments into three reportable segments:
+Added: Energy, Ag and Nitrogen Production.
Our Energy segment produces and provides primarily for the wholesale distribution of petroleum products and transportation of those products.
−Removed: Our Ag segment purchases and further processes or resells grains and oilseeds originated by our country operations business, by our member cooperatives and by third parties;
+Added: Our Ag segment purchases and further processes or resells grain and oilseed originated by our country operations business, by our member cooperatives and by third parties;
serves as a wholesaler and retailer of crop inputs;
and produces and markets ethanol.
−Removed: Our Nitrogen Production segment consists of our equity method investment in CF
−Removed: 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.
−Removed: Our Foods segment consists of our equity method investment in Ventura Foods and allocated expenses.
−Removed: Prior to August 31, 2021, Ventura Foods was reported as a component of Corporate and Other.
−Removed: Reported segment results and balances prior to August 31, 2021, have been recast to reflect the addition of the Foods segment.
−Removed: 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: Our Nitrogen Production segment consists of our equity method investment in CF Nitrogen and allocated expenses.
+Added: Our supply agreement with CF Nitrogen entitles us to purchase up to a specified quantity of granular urea and UAN annually from CF Nitrogen.
Corporate and Other represents our financing and hedging businesses, which primarily consists of a U.S.
Commodity Futures Trading Commission-regulated futures commission merchant ("FCM") for commodities hedging and financial services related to crop production.
−Removed: Our nonconsolidated investment in Ardent Mills is also included in our Corporate and Other category.
−Removed: 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.
+Added: Our nonconsolidated investments in Ventura Foods and Ardent Mills are also included in our Corporate and Other category.
+Added: As of August 31, 2021, Ventura Foods was reported as a separate Foods reportable segment.
+Added: Reported segment results and balances prior to fiscal 2022 have been recast to reflect the addition of Ventura Foods to our Corporate and Other category.
+Added: There were no changes to the composition of our Energy, Ag or Nitrogen Production segments as a result of the addition of Ventura Foods to the Corporate and Other category.
+Added: Corporate administrative expenses and interest are allocated to each reportable segment and Corporate and Other, based on direct use of services, such as information technology and legal, and other factors or considerations relevant to the costs incurred.
Many of our business activities are highly seasonal and our operating results vary throughout the year.
+Added: Our revenues generally trend lower during the second and fourth fiscal quarters and higher during the first and third fiscal quarters;
+Added: however, our income before income taxes does not necessarily follow the same trend, due to weather and other events that can impact profitability.
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.
3 unchanged sentences
Other energy products, such as propane, generally experience higher volumes and revenues during the winter heating and fall crop-drying seasons.
−Removed: 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.
+Added: Our revenues, assets and cash flows can be significantly affected by global market prices for commodities such as petroleum products, natural gas, grain, oilseed, 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 networks, 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 weather, crop damage due to plant disease or insects, drought, availability and adequacy of supply, availability of reliable rail and river transportation networks, outbreaks of disease, government regulations and policies, global trade disputes, wars and civil unrest, 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.
We account for these investments primarily using the equity method of accounting, wherein we record our proportionate share of income or loss reported by the entity as equity income from investments, without consolidating the revenues and expenses of the entity in our Consolidated Statements of Operations.
+Added: In our Ag segment, this includes our 50% interest in TEMCO.
In our Nitrogen Production segment, this consists of our approximate 8 % membership interest (based on product tons) in CF Nitrogen.
−Removed: In our Foods segment, this consists of our 50 % ownership in Ventura Foods.
−Removed: In Corporate and Other, this principally includes our 12 % ownership in Ardent Mills.
−Removed: See Note 6, Investments , for more information related to CF Nitrogen, Ventura Foods and Ardent Mills.
+Added: In Corporate and Other, this principally includes our 50 % ownership in Ventura Foods and our 12 % ownership in Ardent Mills.
+Added: See Note 6, Investments , for more information related to our equity method investments.
Reconciling amounts represent the elimination of revenues between segments.
1 unchanged sentence
Segment information for the years ended August 31, 2022, 2021 and 2020, is presented in the tables below.
−Removed: Energy Ag Nitrogen Production Foods Corporate
+Added: Energy Ag Nitrogen Production Corporate
and Other Reconciling
6 unchanged sentences
Interest expense 6,768 59,118 48,110 5,105 ( 4,945 ) 114,156
−Removed: Other income ( 2,819 ) ( 47,452 ) ( 2,489 ) — ( 14,711 ) 7,912 ( 59,559 )
−Removed: Equity income from investments ( 3,473 ) ( 50,381 ) ( 198,439 ) ( 78,519 ) ( 23,717 ) ( 354,529 )
+Added: Other (income) expense ( 3,474 ) ( 46,277 ) 11,487 9,559 4,945 ( 23,760 )
+Added: Equity (income) losses from investments 13,987 ( 82,357 ) ( 593,182 ) ( 109,775 ) ( 771,327 )
Income before income taxes $ 616,551 $ 657,586 $ 477,985 $ 57,895 $ — $ 1,810,017
3 unchanged sentences
$ 4,325,121 $ 8,159,191 $ 2,641,604 $ 3,698,891 $ — $ 18,824,807
−Removed: Energy Ag Nitrogen Production Foods Corporate
+Added: Energy Ag Nitrogen Production Corporate
and Other Reconciling
8 unchanged sentences
Equity income from investments ( 3,473 ) ( 50,381 ) ( 198,439 ) ( 102,236 ) ( 354,529 )
−Removed: Income before income taxes $ 225,317 $ 53,724 $ 51,837 $ 24,179 $ 31,821 $ — $ 386,878
+Added: Income (loss) before income taxes $ ( 10,596 ) $ 298,096 $ 121,035 $ 106,785 $ — $ 515,320
Capital expenditures $ 112,160 $ 148,770 $ — $ 56,864 $ — $ 317,794
2 unchanged sentences
$ 4,286,677 $ 7,451,559 $ 2,683,652 $ 3,154,387 $ — $ 17,576,275
−Removed: Energy Ag Nitrogen Production Foods Corporate
+Added: Energy Ag Nitrogen Production Corporate
and Other Reconciling
30 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 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.
+Added: Except for certain cash-settled swaps related to future crude oil purchases and refined product sales, which are accounted for as cash flow hedges, 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, LLC, 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 FCM.
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.
−Removed: Although we have certain netting arrangements for our exchange-traded futures and options contracts and certain
−Removed: 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: Although we have certain netting arrangements for our exchange-traded futures and options contracts and certain 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, 2022
5 unchanged sentences
Foreign exchange derivatives 52,923 — 8,901 44,022
−Removed: Embedded derivative asset 16,488 — — 16,488
Total $ 517,090 $ — $ 12,735 $ 504,355
10 unchanged sentences
Foreign exchange derivatives 19,429 — 5,582 13,847
−Removed: Embedded derivative asset 18,998 — — 18,998
+Added: Other derivatives 16,488 — — 16,488
Total $ 568,749 $ — $ 9,756 $ 558,993
5 unchanged sentences
Derivative assets and liabilities with maturities greater than 12 months are recorded in other assets and other liabilities, respectively, on our Consolidated Balance Sheets.
−Removed: 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.
−Removed: 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.
−Removed: The majority of our derivative instruments have not been designated as hedging instruments.
−Removed: The following table sets forth the pretax gains (losses) on derivatives not 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:
+Added: The amount of long-term derivative assets recorded on our Consolidated Balance Sheet as of August 31, 2022 and 2021, was $ 8.5 million and $ 21.6 million, respectively.
+Added: The amount of long-term derivative liabilities recorded on our Consolidated Balance Sheet as of August 31, 2022 and 2021, was $ 4.0 million and $ 4.8 million, respectively.
+Added: The following table sets forth the pretax (losses) gains on derivatives not accounted for as hedging instruments that have been included in our Consolidated Statements of Operations for the years ended August 31, 2022, 2021 and 2020:
Derivative Type Location of
−Removed: Gain (Loss) 2021 2020 2019
+Added: (Loss) Gain 2022 2021 2020
(Dollars in thousands)
3 unchanged sentences
Interest rate derivatives Interest expense — — ( 1,226 )
−Removed: Embedded derivative Other income 2,489 2,634 2,769
+Added: Other derivatives Other income 2,057 2,489 2,634
Total $ ( 556,656 ) $ ( 942,710 ) $ ( 97,022 )
5 unchanged sentences
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.
−Removed: 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 primarily transacted through our FCM on regulated commodity futures exchanges but may include OTC derivative instruments when deemed appropriate.
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.
12 unchanged sentences
These limits are defined for each commodity and business unit, and business units may include both trader and management limits as appropriate.
−Removed: 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.
+Added: The limits policy is overseen at a high level by our corporate middle office and 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.
2 unchanged sentences
We evaluate counterparty exposure by reviewing contracts and adjusting the values to reflect potential nonperformance.
−Removed: 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.
+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 from 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
−Removed: entered into with customers of acceptable creditworthiness, as internally evaluated.
+Added: Fixed-price contracts are entered into with customers of acceptable creditworthiness, as internally evaluated.
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.
11 unchanged sentences
Ocean freight (metric tons) 60 — 210 —
+Added: Natural gas (MMBtu) 420 — — —
Foreign Exchange Contracts
5 unchanged sentences
agricultural products compared to the same products offered by alternative sources of world supply.
−Removed: The notional amount of our foreign exchange derivative contracts was $ 1.2 billion as of both August 31, 2021 and 2020.
−Removed: Embedded Derivative Asset
−Removed: Under the terms of our strategic investment in CF Nitrogen, if the CF Industries credit rating is reduced below certain levels by two of three specified credit ratings agencies, we are entitled to receive a nonrefundable annual payment of $ 5.0 million from CF Industries.
−Removed: 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: 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.
−Removed: 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.
−Removed: The fair value of the embedded derivative asset recorded on our Consolidated Balance Sheet as of August 31, 2021, was equal to $ 16.5 million.
−Removed: The current and long-term portions of the embedded derivative asset are included in other current assets and other assets on our Consolidated Balance Sheet, respectively.
−Removed: See Note 16, Fair Value Measurements , for additional information regarding the valuation of the embedded derivative asset.
−Removed: Derivatives Designated as Cash Flow or Fair Value Hedging Strategies
−Removed: Fair Value Hedges
−Removed: 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: 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.
−Removed: dollar LIBOR interest rate, in essence converting the fixed-rate debt to variable-rate debt.
−Removed: 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 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 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:
−Removed: Gain (Loss) on Fair Value Hedging Relationships Location of
−Removed: Gain (Loss) 2021 2020 2019
−Removed: (Dollars in thousands)
−Removed: Interest rate swaps Interest expense $ — $ ( 1,897 ) $ 21,158
−Removed: Hedged item Interest expense — 1,897 ( 21,158 )
−Removed: Total $ — $ — $ —
−Removed: Cash Flow Hedges
+Added: The notional amount of our foreign exchange derivative contracts was $ 1.9 billion and $ 1.2 billion as of August 31, 2022 and 2021.
+Added: Derivatives Designated as Cash Flow Hedging Strategies
Certain pay-fixed, receive-variable, cash-settled swaps are designated as cash flow hedges of future crude oil purchases in our Energy segment.
10 unchanged sentences
Other current assets $ 27,154 $ 11,874 Other current liabilities $ 11,818 $ 1,001
−Removed: The following table presents the pretax gains (losses) recorded in other comprehensive income relating to cash flow hedges for the years ended August 31, 2021, 2020 and 2019:
+Added: The following table presents the pretax losses recorded in other comprehensive income relating to cash flow hedges for the years ended August 31, 2022, 2021 and 2020:
2022 2021 2020
1 unchanged sentence
Commodity derivatives $ ( 2,071 ) $ ( 7,824 ) $ ( 2,596 )
−Removed: 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:
−Removed: Gain (Loss) 2021 2020 2019
+Added: The following table presents the pretax (losses) 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, 2022, 2021 and 2020:
+Added: (Loss) Gain 2022 2021 2020
(Dollars in thousands)
4 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
−Removed: 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 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.
−Removed: These assets and liabilities may include exchange-traded derivative instruments, rabbi trust investments, deferred compensation investments and available-for-sale investments.
+Added: These assets and liabilities may include exchange-traded derivative instruments, rabbi trust investments, deferred compensation investments, segregated investments and marketable securities.
Values are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
1 unchanged sentence
forward commodity contracts with a fixed price component;
−Removed: 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.
+Added: and other OTC derivatives whose values are determined with inputs that are based on exchange traded prices, adjusted for location-specific
+Added: 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.
5 unchanged sentences
Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of fair value assets and liabilities within the fair value hierarchy levels.
−Removed: Recurring fair value measurements at August 31, 2021 and 2020, are as follows:
+Added: Recurring fair value measurements as of August 31, 2022 and 2021, are as follows:
Quoted Prices in Active Markets
7 unchanged sentences
Deferred compensation assets 46,562 — — 46,562
−Removed: Embedded derivative asset — 16,488 — 16,488
Segregated investments and marketable securities 238,124 — — 238,124
13 unchanged sentences
Deferred compensation assets 51,940 — — 51,940
−Removed: Embedded derivative asset — 18,998 — 18,998
Segregated investments and marketable securities 99,837 — — 99,837
9 unchanged sentences
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: Deferred compensation and other assets.
+Added: Deferred compensation assets.
Our deferred compensation investments consist primarily of rabbi trust assets that are valued based on unadjusted quoted prices on active exchanges and classified within Level 1.
Changes in the fair values of these other assets are primarily recognized in our Consolidated Statements of Operations as a component of marketing, general and administrative expenses.
−Removed: Embedded derivative asset.
−Removed: The embedded derivative asset relates to contingent payments inherent to our investment in CF Nitrogen.
−Removed: The inputs used in the fair value measurement include the probability of future upgrades and downgrades of the CF Industries credit rating based on historical credit rating movements of other public companies and the discount rates applied to potential annual payments based on applicable historical and current yield coupon rates.
−Removed: Based on these observable inputs, our fair value measurement is classified within Level 2.
−Removed: See Note 15, Derivative Financial Instruments and Hedging Activities , for additional information.
−Removed: Segregated investments and marketable securities.
−Removed: Our segregated investments and marketable securities are comprised of investments in various government agencies and U.S.
−Removed: Treasury securities, which are valued using quoted market prices and classified within Level 1.
+Added: Segregated investments and marketable securities and other assets.
+Added: Our segregated investments and marketable securities and other assets are comprised primarily of investments in various government agencies, U.S.
+Added: Treasury securities and money market funds, which are valued using quoted market prices and classified within Level 1.
Note 17 Commitments and Contingencies
5 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
−Removed: any fiscal period;
+Added: The resolution of any such matters may affect consolidated net income for any fiscal period;
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.
4 unchanged sentences
We are a guarantor for lines of credit and performance obligations of related, nonconsolidated companies.
−Removed: Our bank covenants allow maximum guarantees of $ 1.0 billion, of which $ 153.7 million were outstanding on August 31, 2021.
+Added: Our bank covenants allow maximum guarantees of others in the ordinary course of business that shall not exceed $ 1.0 billion, of which $ 173.6 million were outstanding as of August 31, 2022.
We have collateral for a portion of these contingent obligations.
7 unchanged sentences
Our long-term unconditional purchase obligations primarily relate to pipeline and grain handling take-or-pay and throughput agreements and are not recorded on our Consolidated Balance Sheets.
−Removed: As of August 31, 2021, minimum future payments required under long-term commitments that are noncancelable and that third parties have used to secure financing for facilities that will provide contracted goods, are as follows:
+Added: As of August 31, 2022, minimum future payments required under long-term commitments that are noncancelable and that third
+Added: parties have used to secure financing for facilities that will provide contracted goods, are as follows:
Payments Due by Period
5 unchanged sentences
We purchase and sell grain and other agricultural commodity products from certain equity investees , primarily CF Nitrogen, Ventura Foods, Ardent Mills and TEMCO.
−Removed: Sales to and purchases from related parties for the years ended August 31, 2021, 2020 and 2019, respectively, are as follows:
+Added: Sales to and purchases from related parties for the years ended August 31, 2022, 2021 and 2020, are as follows:
2022 2021 2020
12 unchanged sentences
An arrangement is considered to contain a lease if it conveys the right to control the use of an asset for a period of time in exchange for consideration.
−Removed: 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.
+Added: The right to control the use of an asset must include both (i) the right to obtain substantially all economic benefits associated with an identified asset and (ii) the right to direct how and for what purpose the identified asset is used.
Certain service agreements may provide us with the right to use an identified asset;
4 unchanged sentences
however, renewal options are generally not included as we are not reasonably certain to exercise such options.
−Removed: 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.
+Added: After the adoption of ASC Topic 842 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.
6 unchanged sentences
The components of lease expense recognized in our Consolidated Statements of Operations as of August 31, 2022, 2021 and 2020, are as follows:
+Added: 2022 2021 2020
(Dollars in thousands)
6 unchanged sentences
Total net lease expense* $ 100,259 $ 101,747 $ 100,471
−Removed: *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 as of August 31, 2021 and 2020, are as follows:
+Added: *Income related to sublease activity is not material and has been excluded from the table above.
+Added: Supplemental balance sheet information related to operating and finance leases as of August 31, 2022 and 2021, is as follows:
Balance Sheet Location 2022 2021
10 unchanged sentences
Total finance lease liabilities $ 44,773 $ 36,034
−Removed: Information related to the lease term and discount rate for operating and finance leases as of August 31, 2021 and 2020, are as follows:
+Added: Information related to the lease term and discount rate for operating and finance leases as of August 31, 2022 and 2021, is as follows:
Weighted average remaining lease term (in years)
4 unchanged sentences
Finance leases 3.42 % 3.50 %
−Removed: Supplemental cash flow and other information related to operating and finance leases as of August 31, 2021 and 2020, are as follows:
+Added: Supplemental cash flow and other information related to operating and finance leases as of August 31, 2022, 2021 and 2020, is as follows:
+Added: 2022 2021 2020
(Dollars in thousands)
22 unchanged sentences
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.