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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported): December 7, 2023
 
CHS Inc.
(Exact Name of Registrant as Specified in its Charter)
 
Commission File Number: 001-36079
 
Minnesota
41-0251095
(State or Other Jurisdiction of Incorporation)(IRS Employer Identification No.)
5500 Cenex Drive
Inver Grove Heights,Minnesota55077
(Address of principal executive offices, including zip code)
(651)355-6000
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
  Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
8% Cumulative Redeemable Preferred StockCHSCPThe Nasdaq Stock Market LLC
Class B Cumulative Redeemable Preferred Stock, Series 1CHSCOThe Nasdaq Stock Market LLC
Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2CHSCNThe Nasdaq Stock Market LLC
Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3CHSCMThe Nasdaq Stock Market LLC
Class B Cumulative Redeemable Preferred Stock, Series 4CHSCLThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐ 

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


Item 7.01    Regulation FD Disclosure.

On December 7, 2023, Olivia Nelligan, Executive Vice President, Chief Financial Officer and Chief Strategy Officer of CHS Inc. (the “Company”), gave a speech along with a related slide presentation at the Company’s 2023 Annual Meeting. Copies of Ms. Nelligan’s speech and related slide presentation are attached hereto as Exhibits 99.1 and 99.2, respectively. Each such copy is incorporated herein by reference.

Pursuant to General Instruction B.2. to Form 8-K, the information set forth and incorporated by reference in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Form 8–K shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall otherwise be expressly set forth by specific reference in such filing.

Item 9.01    Financial Statements and Exhibits.
Exhibit No.Description
Speech of Olivia Nelligan
Slide Presentation Related to Speech of Olivia Nelligan
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES
    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
     
  CHS Inc.
      
Date: December 7, 2023 By: /s/ Olivia Nelligan
    Olivia Nelligan
    Executive Vice President, Chief Financial Officer and Chief Strategy Officer

EX99.1
CHS Fiscal year 2023 Annual Meeting
CFO Report
FINAL
•Good evening, owners and business partners.

•It is with great pleasure, enthusiasm and optimism for the future that I present to you the CHS financial report for fiscal year 2023.

•Before I go into detail, please review this safe harbor statement.

•Some topics in this financial report may be forward-looking. Future results may differ from those implied. Differences may exist because of risks and uncertainties in our business, including those described in our most recent 10-K, which is on file with the SEC.

•Let me start by welcoming everyone – both those here in person and those joining us virtually.

•It was another exceptional year for our company, as we achieved record-breaking profitability that underscores our commitment to financial excellence, sustainable growth and long-term value for our owners. Your support, the dedication of CHS employees, excellent operational performance and favorable market conditions combined to produce the highest-ever earnings in our 92-year history.

•Our purpose of creating connections to empower agriculture is our north star and has led us in our collective achievements as we all fulfill our important work to help fuel rural America and feed the world.

Revenues
Let’s start our financial review with revenues. Total revenue in fiscal year 2023 was $45.6 billion, which was a 5% decline over our record-breaking revenue result last year.


Net Income
Net income for fiscal year 2023 was $1.9 billion, a $222 million increase over last year.




Energy
•Moving on to Energy. Our Energy segment includes four businesses – refined fuels, propane, lubricants, and transportation. Our Energy segment reported fiscal year 2023 pretax income of $1.1 billion, which is a year-over-year increase of $459 million.

•The dramatic increase in Energy earnings was due to higher refining margins, robust demand for refined fuels and favorable pricing for Canadian crude oil. Profitability was partially offset by higher repairs and maintenance expenses and increased year-over-year costs for renewable energy credits, or RINs.

•We also processed fewer barrels of crude oil in fiscal year 2023 than the prior year due to a planned major maintenance event, known as a turnaround, at our Laurel, Montana, refinery.

•Improved margins in our propane business resulted from favorable market conditions.

Ag
•Now let’s look at our Ag segment. This reporting segment includes three businesses – wholesale agronomy, global grain & processing, and retail operations and distribution, also known as country operations.

•In fiscal year 2023, the Ag segment delivered pretax income of $412 million, a decrease of $246 million over the record high we saw last year.

•Despite shifting trade flows, severe drought in parts of the country and other challenges, the Ag segment delivered strong performance.


Page 2 of 8

•We leveraged our trading expertise and extensive supply chain capabilities to help secure market access for our owners and balance grain and oilseed inventories to meet customer needs around the world.

•Contributing to our year-over-year earnings results in Ag were the following factors:
◦Grain and oilseed exports were reduced year-over-year as U.S. pricing was not globally competitive, which eroded demand for U.S. commodities.
◦We had a $233 million decrease in margins for wholesale and retail agronomy products, which experienced market-driven price declines compared to historical highs in the previous year.
◦We saw a $52 million decrease in renewable fuels margin due to lower ethanol prices.
◦In our oilseed processing business, favorable market conditions and robust meal and oil demand led to margin increases of over $90 million that bolstered strong earnings in this business. Additionally, the capacity investments we have made at our soy-processing facilities in Fairmont and Mankato, Minn., allowed us to increase crush volumes and boost profitability.

Nitrogen Production
•Nitrogen Production represents our equity method investment in CF Nitrogen, a subsidiary of CF Industries.

•Pretax income for fiscal year 2023 was $261 million, which was a decrease of $217 million versus the record high in this segment in fiscal year 2022.

•This reflects significantly decreased market prices for urea and UAN due to global supply and demand factors.
Page 3 of 8


•Our CF Nitrogen investment enables us to participate in fertilizer production economics as a vertically integrated player in this market and ensures reliable fertilizer supply for our owners.

Corporate and Other
•Our Corporate and Other category includes:
◦CHS Hedging, our commodity brokerage business; and
◦CHS Capital, which provides financing to members.

•It also includes our strategic investments in joint ventures:
◦Ardent Mills, a premier flour-milling and ingredient supplier, that we own with Cargill and ConAgra, and to which we supply wheat and durum products, and
◦Ventura Foods, which we own with Mitsui, which is a leading producer and distributor of oil-based food products, like dressings and sauces, that are sold to retail and foodservice customers in more than 60 countries.

•Corporate and Other pretax income was $260 million in fiscal year 2023, which is a year-over-year increase of $202 million.

•The improvement was primarily due to increased interest income, as well as higher equity income from Ventura Foods, which experienced more favorable market conditions for edible oils and had a one-time gain due to the disposition of non-strategic assets.

Segment Wrap Up
•Our total pretax income in fiscal year 2023 was $2 billion.

Page 4 of 8

•Our tax expense for the year, $108 million, is $24 million lower compared to fiscal year 2022 due to the proportionate share of patronage and non-patronage income and, as always, because of careful tax planning.

•In total, CHS reported net income of $1.9 billion in fiscal year 2023, which is a 13% increase year-over-year.

•This is a proud accomplishment for CHS and our owners.

Equity Management
•One unique benefit of the cooperative model is patronage. As CHS owners, you share in the profits.

•Each year, in deciding patronage and redemptions, the CHS Board of Directors considers:
◦What CHS can afford, taking into account the market dynamics in front of us,
◦What is in the best interests of CHS and its members, and
◦Maintaining a strong balance sheet that allows us to both navigate changing market conditions and invest strategically for long-term growth.

•Based on fiscal year 2023 results, CHS intends to return $730 million in cash to the country during fiscal year 2024:
◦$365 million in cash patronage, based on business done with CHS in fiscal year 2023, and
◦$365 million in equity redemptions.

•Of the $365 million in equity redemptions:
◦$305 million will be distributed to associations based on age of equity, with payments to be made in the spring.
Page 5 of 8

◦$60 million will fulfill requests from eligible individual owners based on age of patron and from their estates.

•This will bring the total cash returned to owners over a 10-year period to over 3.2 billion dollars, including $1.7 billion to owners in a two-year timeframe, an unprecedented amount which is a testament to both your support and our commitment to shared success.

•In addition to cash patronage and equity redemptions, CHS will also issue $875 million of new equity to patrons based on business done in fiscal year 2023. Of that, $706 million will be qualified equity and $169 million will be non-qualified equity.

•This year, CHS will not have any unused DPAD tax deductions available to distribute to owners.

•Next, we will review a few estimated wholesale patronage rates. What you see on the screen is cash patronage and total patronage. I’ll highlight a few:
◦Premium diesel total patronage is 30 cents per gallon with a cash portion of 9 cents.
◦Soybeans total patronage is 43 cents per bushel with a cash portion of 13 cents.
◦Bulk fertilizer total patronage is $31.40 per ton with a cash portion of $9.24 per ton.

•These cash returns and patronage numbers are tangible proof of the financial value and benefits of the cooperative business model.





Page 6 of 8

Fiscal 2024 Outlook

•Looking forward, we are optimistic about the future. Of course, that optimism is tempered with some caution because we will face challenges associated with global trade shifts, geopolitical instability, market volatility, bigger and financially stronger competitors, AI, sustainability requirements, inflation and a higher interest rate environment.

•However, we feel well-prepared to navigate these pressures, to serve our customers with excellence and to collaborate with you towards further collective success.

•The energy and agriculture industries are intersecting in new ways. CHS is uniquely positioned to create long-term value from this growing interconnectivity.


•The increasing overlap between our industries affords us compelling investment and profit-creation opportunities. With our financial strength and our plans to continue to strengthen our balance sheet, we are poised to participate in our industries in ways that will continue to build a stronger cooperative system and generate value for our owners in the decades ahead.

•Your CHS Board of Directors and leadership team has long been focused on positioning CHS for enduring success through our decisions and actions, making the tough calls; challenging ourselves, adapting and evolving as market conditions and competitive circumstances change.

•Tomorrow you will be asked to vote on a particularly important amendment to the CHS bylaws – to both create a sustainable equity management program and to secure our financial strength for the future.

Page 7 of 8

•This is a defining moment for our company. We have an immense responsibility to get this right, to honor those that have come before us, and to position those that come after us for growth and success.

•This proposed bylaws amendment is the right thing for CHS and our owners to ensure we can remain a relevant, strong player in a global marketplace as the demands of our industry evolve and change.

Close

•Before I wrap up the financial report this evening, I want to pause for the most important message – and that is to express our gratitude.

•We appreciate you. We are thankful for you. We don’t take your support, your trust or your allegiance for granted, and we will continue to work hard every single day to earn your business.

•It is your support and trust that has empowered this cooperative to go from strength-to-strength over the last number of years, elevating our financial performance and generating substantial cash returns that help fuel your growth. Fiscal year 2023 marked the highest-ever earnings in our long history. We did this together.

•The cooperative system is not just a business model, it’s a philosophy. We are stronger together.

•We are humbled to serve you and we know that together we can continue to build a proud legacy that will survive long after all of us are gone – for our children, our grandchildren and their children.

Thank you!
Page 8 of 8
Olivia Nelligan Executive vice president, chief financial officer and chief strategy officer

 
DISCLOSURE STATEMENT This document and other CHS Inc. publicly available documents contain, and CHS officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on CHS current beliefs, expectations and assumptions regarding the future of its businesses, financial condition and results of operations, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of CHS control. CHS actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause CHS actual results and financial condition to differ materially from those indicated in the forward-looking statements are discussed or identified in CHS filings made with the U.S. Securities and Exchange Commission, including in the "Risk Factors" discussion in Item 1A of CHS Annual Report on Form 10-K for the fiscal year ended August 31, 2023. These factors may include: changes in commodity prices; the impact of government policies, mandates, regulations and trade agreements; global and regional political, economic, legal and other risks of doing business globally; the ongoing war between Russia and Ukraine; the escalation of conflict in the Middle East; the impact of inflation; the impact of epidemics, pandemics, outbreaks of disease and other adverse public health developments, including COVID-19; the impact of market acceptance of alternatives to refined petroleum products; consolidation among our suppliers and customers; nonperformance by contractual counterparties; changes in federal income tax laws or our tax status; the impact of compliance or noncompliance with applicable laws and regulations; the impact of any governmental investigations; the impact of environmental liabilities and litigation; actual or perceived quality, safety or health risks associated with our products; the impact of seasonality; the effectiveness of our risk management strategies; business interruptions, casualty losses and supply chain issues; the impact of workforce factors; our funding needs and financing sources; financial institutions’ and other capital sources’ policies concerning energy-related businesses; technological improvements that decrease the demand for our agronomy and energy products; our ability to complete, integrate and benefit from acquisitions, strategic alliances, joint ventures, divestitures and other nonordinary course-of-business events; security breaches or other disruptions to our information technology systems or assets; the impact of our environmental, social and governance practices, including failures or delays in achieving our strategies or expectations related to climate change or other environmental matters; the impairment of long-lived assets; the impact of bank failures; and other factors affecting our businesses generally. Any forward-looking statements made by CHS in this document are based only on information currently available to CHS and speak only as of the date on which the statement is made. CHS undertakes no obligation to update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise except as required by applicable law.

 

 

 
$0 $10 $20 $30 $40 $50 2019 2020 2021 2022 2023 Revenue $45.6 ($ in billions)

 
$0 $250 $500 $750 $1,000 $1,250 $1,500 $1,750 $2,000 2019 2020 2021 2022 2023 $1,900 Net Income ($ in millions)

 
($ in thousands) 2023 2022 CHANGE Energy $ 1,075,443 $ 616,551 $ 458,892 CHS Pretax Income Fiscal year ended Aug. 31, 2023

 
($ in thousands) 2023 2022 CHANGE Energy $ 1,075,443 $ 616,551 $ 458,892 Ag 411,808 657,586 (245,778) CHS Pretax Income Fiscal year ended Aug. 31, 2023

 
($ in thousands) 2023 2022 CHANGE Energy $ 1,075,443 $ 616,551 $ 458,892 Ag 411,808 657,586 (245,778) Nitrogen Production 260,760 477,985 (217,225) CHS Pretax Income Fiscal year ended Aug. 31, 2023

 
($ in thousands) 2023 2022 CHANGE Energy $ 1,075,443 $ 616,551 $ 458,892 Ag 411,808 657,586 (245,778) Nitrogen Production 260,760 477,985 (217,225) Corporate and Other 259,768 57,895 201,873 CHS Pretax Income Fiscal year ended Aug. 31, 2023

 
($ in thousands) 2023 2022 CHANGE Energy $ 1,075,443 $ 616,551 $ 458,892 Ag 411,808 657,586 (245,778) Nitrogen Production 260,760 477,985 (217,225) Corporate and Other 259,768 57,895 201,873 Pretax Income 2,007,779 1,810,017 197,762 CHS Pretax Income Fiscal year ended Aug. 31, 2023

 
($ in thousands) 2023 2022 CHANGE Energy $ 1,075,443 $ 616,551 $ 458,892 Ag 411,808 657,586 (245,778) Nitrogen Production 260,760 477,985 (217,225) Corporate and Other 259,768 57,895 201,873 Pretax Income 2,007,779 1,810,017 197,762 Income Tax Expense (Benefit) 107,655 132,116 (24,461) CHS Net Income Fiscal year ended Aug. 31, 2023

 
($ in thousands) 2023 2022 CHANGE Energy $ 1,075,443 $ 616,551 $ 458,892 Ag 411,808 657,586 (245,778) Nitrogen Production 260,760 477,985 (217,225) Corporate and Other 259,768 57,895 201,873 Pretax Income 2,007,779 1,810,017 197,762 Income Tax Expense (Benefit) 107,655 132,116 (24,461) Noncontrolling Interests (314) (861) 547 Net Income 1,900,438 1,678,762 221,676 CHS Net Income Fiscal year ended Aug. 31, 2023

 
$1,900,438 $1,678,762 Net Income Fiscal Year 2023 Fiscal Year 2022 Change $221,676

 

 
$365 million Cash patronage $365 million Equity redemptions $730 million Cash returns FSCAL YEAR 2022

 
~$3.2 billion Cash returns in the last 10 years

 
$706 million Qualified equity $169 million Nonqualified equity $875 million Equity certificates

 
Gallons Cash Total Refined fuels $0.08 $0.28 Premium diesel $0.09 $0.30 Propane $0.01 $0.04 Bushels Soybeans $0.13 $0.43 Spring wheat $0.04 $0.15 Hundredweight Canola $1.07 $3.62 Tons Bulk fertilizer $9.24 $31.40 Dollars Commissions (CHS Hedging) $0.21 $0.71 Focus crop protection $0.06 $0.22 FY23 Wholesale Patronage Rates* * estimated

 

 

 

 

 
v3.23.3
Cover Page
Dec. 07, 2023
Entity Information [Line Items]  
Document Type 8-K
Document Period End Date Dec. 07, 2023
Entity Registrant Name CHS Inc.
Entity File Number 001-36079
Entity Incorporation, State or Country Code MN
Entity Tax Identification Number 41-0251095
Entity Address, Address Line One 5500 Cenex Drive
Entity Address, City or Town Inver Grove Heights,
Entity Address, State or Province MN
Entity Address, Postal Zip Code 55077
City Area Code (651)
Local Phone Number 355-6000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0000823277
Amendment Flag false
8% Preferred Stock [Member]  
Entity Information [Line Items]  
Title of 12(b) Security 8% Cumulative Redeemable Preferred Stock
Trading Symbol CHSCP
Security Exchange Name NASDAQ
Class B, Series 1 Preferred Stock [Member]  
Entity Information [Line Items]  
Title of 12(b) Security Class B Cumulative Redeemable Preferred Stock, Series 1
Trading Symbol CHSCO
Security Exchange Name NASDAQ
Class B, Series 2 Preferred Stock [Member]  
Entity Information [Line Items]  
Title of 12(b) Security Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2
Trading Symbol CHSCN
Security Exchange Name NASDAQ
Class B, Series 3 Preferred Stock [Member]  
Entity Information [Line Items]  
Title of 12(b) Security Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3
Trading Symbol CHSCM
Security Exchange Name NASDAQ
Class B, Series 4 Preferred Stock [Member]  
Entity Information [Line Items]  
Title of 12(b) Security Class B Cumulative Redeemable Preferred Stock, Series 4
Trading Symbol CHSCL
Security Exchange Name NASDAQ
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