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Item 7. Management’s Discussion and Analysis

2025-11-05 compared with 2024-11-06 · 107 added, 93 removed, 330 unchanged (38% of the section changed)

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As a cooperative, we are owned by farmers, ranchers and member cooperatives across the United States.

We also have preferred shareholders who own our five series of preferred stock, all of which are listed and traded on the Global Select Market of The Nasdaq Stock Market LLC.

We also have preferred shareholders who own our five series of preferred stock, all of which are listed and traded on Nasdaq.

We operate in the following three reportable segments:

Produces and provides primarily for wholesale distribution and transportation of petroleum products.

Produces and provides petroleum products primarily for wholesale distribution and transportation.

Purchases and further processes or resells grain and oilseed originated by our ag retail and global grain and processing businesses, by our member cooperatives and by third parties.

It also includes our renewable fuels business and serves as a wholesaler and retailer of agronomy products.

This segment also includes our renewable fuels business and serves as a wholesaler and retailer of agronomy products.

• Nitrogen Production.

Produces and distributes nitrogen fertilizer.

It consists of our equity method investment in CF Nitrogen and allocated expenses.

This segment consists of our equity method investment in CF Nitrogen and allocated expenses.

In addition, our financing and hedging businesses, along with our nonconsolidated food production and distribution and wheat milling joint ventures, have been aggregated within our Corporate and Other category.

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Management's Focus .

When evaluating our operating performance, management focuses on gross profit and income before income taxes ("IBIT").

When evaluating our operating performance, management focuses on income before income taxes ("IBIT").

As a company that operates heavily in global commodities, there is significant unpredictability and volatility in pricing, costs and global trade volumes.

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Our Energy segment generally experiences higher volumes and revenues in

certain operating areas, such as refined products, in the spring, summer and early fall when gasoline and diesel fuel use by agricultural producers is highest and is subject to global supply and demand forces.

certain operating areas, such as refined fuel products, in the spring, summer and early fall when gasoline and diesel fuel use by agricultural producers is highest and is subject to global supply and demand forces.

Other energy products, such as propane, generally experience higher volumes and revenues during the winter heating and fall crop-drying seasons.

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Similarly, increased or decreased sales volumes without a corresponding change in the purchase and selling prices of those products can affect revenues and operating earnings.

Commodity prices and sales volumes are affected by a wide range of factors beyond our control, including weather, crop damage due to plant disease or insects, drought, availability/adequacy of supply of a commodity, availability of reliable rail and river transportation networks, disease outbreaks, government regulations and policies, global trade disputes, wars and civil unrest, and general political and/or economic conditions.

Commodity prices and sales volumes are affected by a wide range of factors beyond our control, including weather;

crop damage due to plant disease or insects;

availability/adequacy of supply of a commodity;

availability of reliable rail, river, truck and ocean transportation networks;

disease outbreaks;

government regulations and policies;

global trade disputes;

wars and civil unrest;

and general political and/or economic conditions.

Business Strategy

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Fiscal 2025 Highlights

• Financial performance remained solid across our segments, although down from historically strong results in the prior year.

• Our Energy segment results declined from the prior year due to evolving market conditions, including the impact of less favorable refining margins.

• In our Ag segment, earnings declined compared to the prior year as a result of softening oilseed crush margins and global market conditions that drove down margins for U.S.

grain and oilseed exports.

• Equity method investments continued to perform well, with our CF Nitrogen investment being the largest contributor.

• Our Ag segment performed well, although down from strong results in the prior year.

This was mainly due to softening grain and oilseed product margins, lower oilseed crush margins, declining commodity prices and global market conditions.

• Despite strong volumes, our Energy segment results declined significantly from the prior year.

This was driven by decreased Western Canadian Select crude oil discounts, unfavorable crack spreads and expected lower sales of produced, higher-margin refined products as a result of our planned major maintenance at our McPherson, Kansas refinery in the third quarter of fiscal year 2025.

• Equity method investments continued to provide solid contributions to CHS income, including strong results from our investments in CF Nitrogen and Ventura Foods.

Fiscal 2026 Outlook

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We anticipate various macroeconomic factors will continue to drive uncertainty and instability in global energy and agricultural commodity markets, as well as global financial markets, which could have a significant impact on each of our segments during fiscal 2026.

These factors include, among others, the ongoing war between Russia and Ukraine and further escalation of conflict in the Middle East, shifts in global trade flows for commodities, including global competitiveness giving rise to a weak export market for U.S.

sourced agricultural products, potential changes in U.S.

trade policy following the U.S.

general election in November, a changing interest rate environment, and continued pricing pressures impacting costs of labor, freight and materials.

These factors include, among others, the ongoing war between Russia and Ukraine and further conflict in the Middle East, shifts in global trade flows for commodities, including global competitiveness giving rise to a weak export market for U.S.-sourced agricultural products, potential changes in U.S.

trade policy, increased or fluctuating tariffs, a changing interest rate environment, and continued pricing pressures impacting costs of labor, freight and materials.

These factors, or any form of them, could cause significant margin pressure and lower profitability.

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These include regional factors, such as unpredictable weather conditions, including those due to climate change.

We currently expect global supply and demand factors impacting energy and agricultural commodities to be less favorable for us in fiscal 2025.

We currently expect global supply and demand factors impacting energy and agricultural commodities to be unfavorable for us in fiscal 2026.

Further, in light of increasing uncertainty in the markets we serve, we are unable to predict how long the current environment will last or the significance of the financial and operational impacts to us;

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Refer to Item 1A of this Annual Report on Form 10-K for additional consideration these risks may have on our business operations and financial performance.

We will continue to execute our enterprise priorities for fiscal 2025, including pursuing growth through strategic investments and cooperative connections and leveraging our financial strength and resilience as we navigate less favorable market conditions for energy and agricultural commodities.

We will continue to execute our enterprise priorities for fiscal 2026, including maximizing our platforms through our integrated supply chains and capitalizing on domestic and global opportunities, as we navigate less favorable market conditions for energy and agricultural commodities.

Operating Metrics

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*Lower refinery throughput volumes and refined fuel yields experienced during fiscal 2025 were primarily due to a planned shutdown to perform major

maintenance at our Laurel, Montana, refinery.

maintenance at our McPherson, Kansas, refinery during the third quarter of fiscal 2025.

We are subject to the Renewable Fuel Standard that requires refiners to blend renewable fuels (e.g., ethanol and biodiesel) into their finished transportation fuels or purchase renewable energy credits, known as renewable identification numbers ("RINs"), in lieu of blending.

Environmental Protection Agency ("EPA") generally establishes new annual renewable fuel percentage standards for each compliance year in the preceding year.

In June 2023, the EPA issued a final renewable volume obligation ("RVO") for calendar years 2020 through 2025.

We generate RINs through our blending activities, but we cannot generate enough RINs to meet the needs of our refining capacity;

therefore, RINs must be purchased on the open market.

The price of RINs can be volatile, with prices for D6 ethanol RINs and D4 biodiesel RINs decreasing by 57% and 58%, respectively, during fiscal 2024 compared to the prior year, which positively impacted our earnings.

The price of RINs can be volatile, with prices for D6 ethanol RINs and D4 biodiesel RINs increasing by 24% and 29%, respectively, during fiscal 2025 , compared to the prior year, which negatively impacted our earnings.

Estimates of our RIN expenses are calculated using an average RIN price each month.

During the fourth quarter of fiscal 2025, we received notice from the EPA that our petitions seeking an extension of the small refinery exemption ("SRE") under the Renewable Fuels Standard for our Laurel, Montana, refinery were granted in full or in part for compliance years 2019 through 2024.

This action by the EPA reduced our renewable volume obligation ("RVO") for production at our Laurel, Montana, refinery for those specific years and resulted in a benefit of approximately $90 million during the fourth quarter of fiscal year 2025.

We may be eligible for exemptions for compliance years 2025 and beyond, but this is highly dependent on volumes of crude oil average throughput at that time and the EPA's evaluation of those potential future petitions.

Further, we may incur future liabilities that partially or fully offset those benefits if the EPA reallocates the RVOs waived through the SRE process by increasing the blending requirements for larger refineries, including our McPherson, Kansas, refinery, in future years.

In addition to our internal operational reliability, the profitability of our Energy segment is largely driven by crack spreads (i.e., the price differential between refined products and crude oil inputs) and Western Canadian Select ("WCS") crude oil discounts (i.e., the price discount for WCS crude oil relative to West Texas Intermediate ("WTI") crude oil), which are driven by supply and demand of refined products.

Crack spreads and WCS crude oil discounts both decreased in fiscal 2024 , compared to the prior year, contributing to decreased IBIT for the Energy segment.

The table below provides information about average market reference prices and differentials that impacted our Energy segment:

Crack spreads and WCS crude oil discounts both decreased in fiscal 2025 , compared to the prior year, contributing to significantly decreased IBIT for the Energy segment.

The table below provides

information about average market reference prices and differentials that impacted our Energy segment:

Years Ended August 31,

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D4 biodiesel RIN (dollars per RIN) $ 0.8823 $ 0.6829

*Market source information represents the average month-end price during the period.

*Group 3 refers to the oil refining and distribution system serving the Midwest markets from the Gulf Coast through the Plains states.

Our Ag segment operations work together to facilitate the production, purchase, sale and eventual use of grain and other agricultural commodities within the United States and internationally.

Profitability in our Ag segment is largely driven by throughput and production volumes, as well as commodity price spreads;

Profitability in our Ag segment is mostly driven by throughput and production volumes, as well as commodity price spreads;

however, revenues and cost of goods sold ("COGS") are largely affected by market-driven commodity prices outside our control.

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*Amounts less than 0.1% are shown as zero percent.

Percentage subtotals may differ due to rounding.

The charts below detail revenues, net of intersegment revenues, and IBIT by reportable segment for fiscal 2024 .

Our Nitrogen Production reportable segment represents an equity method investment that records earnings and allocated expenses, but not revenues.

Income Before Income Taxes by Segment

Percentage subtotals may not sum due to rounding.

The charts below detail revenues, net of intersegment revenues, and IBIT by segment for fiscal 2025 .

Our Nitrogen Production segment represents an equity method investment that records earnings and allocated expenses, but not revenues.

(Loss) Income Before Income Taxes by Segment

Years Ended August 31, Change

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(Dollars in thousands)

Income before income taxes $ 429,053 $ 1,075,443 $ (646,390) (60.1) %

(Loss) Income before income taxes $ ( 7,042 ) $ 429,053 $ (436,095) (101.6) %

The following waterfall analysis and commentary presents the changes in our Energy segment IBIT for the year ended August 31 , 2025 , compared to the prior year:

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The change in Energy segment IBIT for fiscal 2025 reflects the following:

• Lower crack spreads and decreased WCS crude oil discounts resulted from global market conditions, which contributed to an $803.8 million decrease of IBIT.

• Increased repairs and maintenance expense primarily due to unplanned maintenance at our Laurel, Montana, and McPherson, Kansas refineries contributed to $44.2 million of decreased IBIT.

• Lower margins from premiums on seasonal refined fuels products contributed $28.0 million of decreased IBIT.

• The overall IBIT decrease was partially offset by lower costs for RINs in our refined fuels business, which contributed to a $247.2 million cost reduction.

• Significantly lower WCS crude oil discounts and crack spreads compared to the prior fiscal year, due to less favorable global market conditions, including higher U.S.

refinery capacity utilization and global production, as well as additional export opportunities for Canadian crude oil, contributed to a $308.1 million decrease of IBIT.

• Decreased refined fuels production volumes contributed to a $88.5 million decrease in IBIT, primarily due to planned major maintenance at our McPherson refinery which reduced the sales mix of higher-margin, produced refined fuels products relative to lower-margin, purchased refined fuels products.

• The overall IBIT decrease was partially offset by an approximately $90 million favorable impact due to the small refinery exemption.

During the fourth quarter of fiscal 2025, we received notice from the EPA that our petitions seeking an extension of the small refinery exemption under the Renewable Fuels Standard for our Laurel, Montana, refinery were granted in full or in part for compliance years 2019 through 2024.

This action by the EPA reduced our renewable volume obligation for production at our Laurel, Montana, refinery for those specific years and resulted in a benefit during the fourth quarter of fiscal year 2025.

• Higher costs for RINs, exclusive of the small refinery exemption, contributed to a $45.7 million decrease of IBIT.

Years Ended August 31, Change

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The change in Ag segment IBIT for fiscal 2025 reflects the following:

• Decreased margins of $120.2 million for oilseed processing due to a higher supply of canola and soybean meal and oil across global markets, resulting in lower crush margins and decreased margins of $34.1 million for grain and oilseed due to competitive global grain markets that compressed margins, compared to the prior year.

• The margin decrease was partially offset by increased margins for wholesale and retail agronomy products driven by improved market conditions, which contributed to a $61.3 million increase of IBIT.

• Higher volumes of wholesale and retail agronomy products contributed to a $27.2 million increase of IBIT due to increased demand as prices declined due to global market conditions.

• Higher volumes for grain and oilseed and oilseed processing products collectively contributed to $52.2 million of increased IBIT as a result of favorable weather conditions and logistical and operational efficiencies at the oilseed crush plants.

• Decreased margins for our grain and oilseed product category are primarily a result of unfavorable market conditions in North America, South America and Europe, costs associated with closing our Superior, Wisconsin, grain facility and the timing impact of mark-to-market adjustments, collectively contributed to a $118.8 million decrease in IBIT.

• Decreased margins for our oilseed processing product category, due to a higher global supply of soybean and canola meal and oil, resulted in lower crush margins compared to the prior fiscal year and contributed to a $105.3 million decrease in IBIT.

All Other Segments

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*See Note 6, Investments, of the notes to the consolidated financial statements included in this Annual Report on Form 10-K for additional information.

Our Nitrogen Production segment IBIT decreased from the prior year as a result of lower equity income attributed to decreased selling prices of urea and UAN, which was partially offset by decreased natural gas costs, all due to global supply and demand factors.

Corporate and Other IBIT decreased primarily due to lower equity income from our Ventura Foods investment as a result of less favorable market conditions for oil-based food products experienced during the current year compared to the prior year and a gain associated with the sale of certain assets in the prior year that did not recur in the current year.

Our Nitrogen Production segment IBIT increased slightly from the prior fiscal year due to higher equity income primarily attributed to favorable market conditions associated with urea.

Corporate and Other IBIT increased largely as a result of a gain on the sale of a business, recognized by our equity investment Ventura Foods, during the year ended August 31, 2025.

Revenues by Segment

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The change in Energy segment revenues for fiscal 2025 reflects the following:

• Decreased selling prices resulting from global market conditions contributed to $1.0 billion and $121.3 million

decreases in revenues for refined fuels and propane, respectively.

• Lower propane and refined fuels volumes contributed to $93.9 million and $64.0 million decreases in revenues, respectively, primarily driven by lower demand as a result of unfavorable weather conditions across much of our trade territory.

• Global market conditions contributed to decreased selling prices for refined fuels that resulted in a $1.1 billion decrease in revenues.

Years Ended August 31, Change

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The change in Ag segment revenues for fiscal 2025 reflects the following:

• Decreased selling prices across all of our Ag segment product categories due to global market conditions during fiscal 2024, including:

• Decreased selling prices across most of our Ag segment product categories due to global market conditions were experienced during fiscal 2025, including:

◦ $2.7 billion decrease for grain and oilseed;

◦ $1.2 billion decrease for wholesale and retail agronomy products;

◦ $453.5 million decrease for oilseed processing;

◦ $331.6 million decrease for renewable fuels.

• Increased volumes for grain and oilseed contributed to a $3.1 billion increase in revenues, primarily due to more favorable weather conditions in fiscal 2024.

◦ $111.3 million decrease associated with renewable fuels.

• Increased volumes were realized across most of our Ag segment product categories, including:

◦ $590.7 million for wholesale and retail agronomy products as a result of more favorable weather conditions and strategic initiatives to grow the business and;

◦ $446.7 million for grain and oilseed as a result of higher demand due to lower prices.

◦ These increases were partially offset by decreased volumes of renewable fuels as a result of unfavorable global market conditions, which contributed to decreased revenues of $272.6 million.

All Other Segments*

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*Our Nitrogen Production reportable segment represents an equity method investment that records earnings and allocated expenses, but not revenues.

Corporate and Other revenues increased during fiscal 2024 compared to the prior year primarily as a result of increased interest income in our financing business due to higher interest rates and a larger average notes receivable balance.

There were no significant changes to Corporate and Other revenues during fiscal 2025 compared to the prior year.

Cost of Goods Sold by Segment

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The change in Energy segment COGS for fiscal 2025 reflects the following:

• Global market conditions, including reduced RIN costs, contributed to decreased costs for refined fuels and propane that drove $368.1 million and $124.7 million decreases in COGS, respectively.

• Lower propane and refined fuels volumes contributed to $90.5 million and $54.7 million decreases in COGS, respectively, primarily driven by lower demand as a result of unfavorable weather conditions across much of our trade territory.

• Decreased costs for refined fuels, due to global market conditions, contributed to a $618.7 million decrease in COGS.

• COGS was further decreased by an approximately $90 million favorable impact due to the small refinery exemption.

• The overall COGS decrease was partially offset by increased costs for propane of $36.9 million, which were a result of higher product volumes and hedging impacts.

Years Ended August 31, Change

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The change in Ag segment COGS for fiscal 2025 reflects the following:

• Lower costs across all of our Ag segment product categories due to global market conditions during fiscal 2024, including:

• Decreased costs across most of our Ag segment product categories due to global market conditions were experienced during fiscal 2025, including:

◦ $2.5 billion decrease for grain and oilseed;

◦ $1.3 billion decrease for wholesale and retail agronomy products;

◦ $376.1 million decrease for renewable fuels;

◦ $348.2 million decrease for oilseed processing;

• Increased volumes for grain and oilseed contributed to a $3.1 billion increase in COGS, primarily due to more favorable weather conditions in fiscal 2024.

◦ $101.0 million decrease associated with renewable fuels.

• Increased volumes were realized across most of our Ag segment product categories, including:

◦ $493.5 million for wholesale and retail agronomy products as a result of more favorable weather conditions and strategic initiatives to grow the business and;

◦ $441.6 million for grain and oilseed as a result of higher demand due to lower prices.

◦ These increases were partially offset by decreased volumes of renewable fuels as a result of unfavorable global market conditions, which contributed to decreased COGS of $258.3 million.

All Other Segments

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Marketing, general and administrative expenses $ 1,046,059 $ 1,166,969 $ (120,910) (10.4) %

Marketing, general and administrative expenses increased during fiscal 2024 primarily due to higher compensation and benefit expenses, as well as higher consulting expenses primarily associated with our enterprise resource planning system implementation and other technologies to advance our operating model.

Marketing, general and administrative expenses decreased during fiscal 2025 primarily due to lower expenses for performance-based incentive compensation associated with our lower profitability during the current fiscal year.

Interest Expense

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Interest expense $ 146,079 $ 104,064 $ 42,015 40.4 %

Interest expense decreased during fiscal 2024 as a result of decreased notes payable balances compared to the prior year, which was partially offset by higher interest rates compared to the prior year.

Interest expense increased during fiscal 2025, as a result of a higher short-term notes payable balance, along with higher weighted-average interest rates, compared to the prior fiscal year.

Years Ended August 31, Change

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Other income $ 100,431 $ 137,630 $ (37,199) (27.0) %

Other income increased during fiscal 2024 primarily as a result of increased interest income due to a larger average cash balance and higher interest rates.

Other income decreased during fiscal 2025 primarily due to decreased interest income as a result of a smaller cash balance compared to the prior fiscal year.

Equity Income from Investments

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*See Note 6, Investments, of the notes to the consolidated financial statements that are included in this Annual Report on Form 10-K for additional information.

Equity income from investments decreased during fiscal 2024 compared to the prior year, primarily due to lower income associated with our equity method investments in CF Nitrogen and Ventura Foods.

Equity income decreased for CF Nitrogen as a result of lower selling prices for urea and UAN due to global supply and demand factors.

Equity income decreased for Ventura Foods as a result of less favorable market conditions for oil-based food products and a gain associated with the sale of certain assets in the prior year that did not reoccur in the current year.

Equity income from investments increased during fiscal 2025 compared to the prior year, primarily due to a gain on the sale of a business recognized by our equity investment Ventura Foods.

Income Tax (Benefit) Expense

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Income tax (benefit) expense $ 16,777 $ (4,872) $ 21,649 (444.4) %

Lower income tax expense during fiscal 2024 resulted primarily from lower nonpatronage income compared to fiscal 2023, recognition of research and development tax credits during fiscal 2024 and increased Domestic Production Activities Deduction ("DPAD") benefit.

Increased income tax expense during fiscal 2025 resulted primarily from lower research and development tax credits, a change in a state law and a fluctuation between taxable and nontaxable patronage income.

Effective tax rates for the years ended August 31, 2025 and 2024, were 2.7% and (0.4)%, respectively.

Federal and state statutory rate of 24.5% was applied to nonpatronage business activity for the years ended August 31, 2024 and 2023.

Income taxes and effective tax rates vary each year based upon profitability and nonpatronage business activity.

Federal and state statutory rates of 24.3% and 24.5% were applied to nonpatronage business activity for the years ended August 31, 2025 and 2024, respectively.

Income taxes and effective tax rates vary each year based on profitability and nonpatronage business activity.

Comparison of Results of Operations for the Years Ended August 31, 2024 and 2023

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We fund our current operations primarily through our cash flows from operations and with short-term borrowings through our committed and uncommitted revolving credit facilities, including our securitization facility with certain unaffiliated financial institutions ("Securitization Facility").

We fund certain of our long-term capital needs, primarily those related to acquisitions of property, plant and equipment, with cash flows from operations and by issuing long-term debt.

On April 18, 2024, we entered into a Note Purchase Agreement to borrow $700.0 million of debt in the form of notes;

the funding of these notes took place on July 16, 2024.

On October 29, 2024, we amended our 10-year term loan facility reducing the size to $300.0 million and adding a converting revolver feature.

We fund certain of our long-term capital needs, primarily those related to acquisitions of property, plant and equipment, with cash flows from operations, our revolving term loan facility and by issuing long-term debt.

See Note 9, Notes Payable and Long-Term Debt , of the notes to the consolidated financial statements that are included in this Annual Report on Form 10-K for additional information on our short-term borrowings and long-term debt, including tables with summarized long-term debt outstanding.

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• Capital expenditures.

We expect total capital expenditures for fiscal 2025 to be approximately $837.3 million, compared to capital expenditures of $808.8 million in fiscal 2024 , as we continue to invest in capital expenditures projects to meet the evolving needs of our owners and customers, enhance value for the cooperative system and unlock growth during fiscal 2025.

In addition, we expect over $200.0 million of incremental expenditures for potential business acquisitions during fiscal 2025.

We expect total capital expenditures for fiscal 2026 to be approximately $575.1 million, compared to capital expenditures of $728.6 million in fiscal 2025 , as we continue to invest in capital expenditures projects to meet the evolving needs of our owners and customers and enhance value for the cooperative system during fiscal 2026.

• Major maintenance .

We expect total major maintenance for fiscal 2026 to be approximately $53.3 million, compared to major maintenance of $271.4 million in fiscal 2025.

Increased major maintenance expectation for fiscal 2025 is due to a scheduled turnaround at our McPherson refinery during fiscal 2025 compared to minimal turnaround activities at our refineries during fiscal 2024.

Decreased major maintenance expectation for fiscal 2026 is due to significantly reduced turnaround activities at our refineries compared to the turnaround at our McPherson refinery during fiscal 2025.

• Preferred stock dividends.

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The Board of Directors will continue to periodically evaluate the level of equity redemption activity throughout fiscal 2026 with respect to the amounts it has authorized for redemption during the fiscal year.

We believe cash generated by operating and investing activities, along with available borrowing capacity under our credit facilities, will be sufficient to support our short-term (the next 12 months) and long-term operations (beyond the next 12 months).

Our notes payable and long-term debt are subject to various restrictive requirements for maintenance of minimum consolidated net worth and other financial ratios.

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Working capital $ 2,803,865 $ 3,307,969 $ (504,104)

As of August 31, 2024, working capital increased by $78.5 million compared with August 31, 2023.

Current asset balance changes decreased working capital by $419.9 million, primarily driven by a decrease in our cash balance due to a decline in cash provided by operations from year end 2023, which was partially offset by increases in receivables.

Current liabilities balance changes increased working capital by $498.4 million, primarily due to a decrease in accounts and notes payable, which were driven by changes in working capital needs and lower commodity prices.

As of August 31 , 2025 , working capital decreased by $504.1 million compared with August 31, 2024.

Current asset balance changes decreased working capital by $622.4 million, primarily driven by a lower cash balance due to a decline in cash provided by operations during fiscal year 2025.

Current liabilities balance changes increased working capital by $118.3 million, primarily due to a decrease in dividends and equity payable for lower cash patronage and equity redemptions expected to be distributed during fiscal year 2026 compared to fiscal year 2025.

We finance our working capital needs through committed and uncommitted lines of credit with domestic and international banks.

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Contractual Obligations

Our estimated future contractual obligations as of August 31, 2024, include both current and long-term obligations.

During fiscal 2025, we have a current obligation to repay $330.6 million of long-term debt, as well as $101.7 million of interest related to long-term debt.

Beyond fiscal 2025, our long-term debt obligation is $1.8 billion and interest payments related to long-term debt of $747.4 million.

For finance leases, we have a current and long-term obligation of $9.0 million and $49.3 million, respectively.

For operating leases, we have a current and long-term obligation of $71.3 million and $176.0 million, respectively.

See Note 9, Notes Payable and Long-Term Debt, and Note 19 , Leases , of the notes to the consolidated financial statements that are included in this Annual Report on Form 10-K for additional information on our long-term debt and leases, respectively.

We enter into purchase obligations that are legally binding and enter into enforceable agreements to purchase goods or services that specify all significant terms, including fixed or minimum quantities to be purchased and fixed or estimated prices to be paid at the time of settlement.

Our current and long-term obligation for such arrangements is $4.8 billion and $569.8 million, respectively.

Below is a summary of our estimated future contractual obligations as of August 31 , 2025 that are expected to be paid within the next year (short-term) and thereafter (long-term).

Payments Due by Period

Short-Term Long-Term Total

(Dollars in thousands)

Long-term debt $ 80,778 $ 1,703,751 $ 1,784,529

Interest payments related to long-term debt (1)

91,232 656,054 747,286

Finance lease (2)

10,984 54,763 65,747

Operating lease (2)

75,886 190,573 266,459

Purchase obligations (3)

4,694,972 1,154,109 5,849,081

Total $ 4,953,852 $ 3,759,250 $ 8,713,102

(1) Based on interest rates and long-term debt balances as of August 31, 2025.

(2) Finance and operating lease obligations are described in Note 19, Leases , of the notes to the consolidated financial statements that are included in this Annual Report on Form 10-K.

Operating and finance lease obligations reflected in this table include related interest expense.

(3) Purchase obligations are legally binding and enforceable agreements to purchase goods or services that specify all significant terms, including fixed or minimum quantities to be purchased and fixed or estimated prices to be paid at the time of settlement.

Years Ended August 31,

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Effect of exchange rate changes on cash and cash equivalents 773 2,236 (1,463)

Net (decrease) increase in cash and cash equivalents and restricted cash $ (970,725) $ 941,113 $ (1,911,838)

Net decrease in cash and cash equivalents and restricted cash $ (474,602) $ (970,725) $ 496,123

Cash flows from operating activities can fluctuate significantly from period to period as a result of various factors, including seasonality and timing differences associated with purchases, sales, taxes and other business decisions.

The $2.0 billion decrease in cash provided by operating activities in fiscal 2024 primarily reflects decreased net income, as well as decreased cash provided by receivables and inventories during fiscal 2024.

The $481.4 million increase in cash used in investing activities in fiscal 2024 reflects increased investments and higher expenditures for property, plant and equipment during fiscal 2024 compared to fiscal 2023.

The $637.1 million decrease in cash provided by operating activities in fiscal 2025 primarily reflects decreased net income, as well as decreased cash provided by inventories during fiscal 2025.

The $551.0 million decrease in cash used in investing activities in fiscal 2025 reflects increased proceeds from the sale and maturity of investments and lower expenditures for property, plant and equipment during fiscal 2025 compared to fiscal 2024.

The $583.7 million decrease in cash used in financing activities in fiscal 2025 primarily reflects increased net proceeds from long-term debt and decreased cash outflows for patronage paid and equity redemptions during fiscal 2025 compared to fiscal 2024.

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Risk of nonperformance by counterparties includes the inability to perform because of a counterparty's financial condition and a 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.

perform on a contract during periods of price fluctuations where contract prices are significantly different from current market prices.

Pension and Other Postretirement Benefits

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Considerable management judgment is necessary to estimate discounted future cash flows and our estimates may differ from actual results.

We have asset retirement obligations with respect to certain of our refineries and other assets due to various legal obligations to clean and/or dispose of the component parts at the time they are retired.

In most cases, these assets can be used for extended and indeterminate periods of time, as long as they are properly maintained and/or upgraded.

It is our practice and current intent to maintain refineries and related assets and to continue making improvements to those assets based on technological advances.

As a result, we believe our refineries and related assets have indeterminate lives for purposes of estimating asset retirement obligations because dates or ranges of dates upon which we would retire a refinery and related assets cannot reasonably be estimated at this time.

When a date or range of dates can reasonably be estimated for the retirement of any component part of a refinery or other asset, we will estimate the cost of performing the retirement activities and record a liability for the fair value of that future cost.

We have other assets that we may be obligated to dismantle at the end of corresponding lease terms subject to the lessor's discretion for which we have recorded asset retirement obligations.

Based on our estimates of the timing, cost and probability of removal, these obligations are not material.

We have other assets that we may be obligated to dismantle at the end of the corresponding lease terms subject to the lessor's discretion for which we have recorded an asset retirement obligation.

Based on our estimates of the timing, cost and probability of removal, this obligation is not material.

Recent Accounting Pronouncements

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What changed 10-K

Item 7. Management’s Discussion and Analysis