CHS 2011 Annual Report Download - page 24

2011 CHS 23
FINANCIAL OVERVIEW
FINANCIAL HIGHLIGHTS
Amid continued global economic volatility and dramatic
weather events in many regions, CHS delivered record
fi nancial performance for fi scal , while continuing
to deliver value for the agricultural producers and coop-
eratives who are its owners through cash returns, invest-
ments in existing and expanded operations, and a solid
balance sheet.
For fi scal  (Sept. , , through Aug. , ), CHS
posted net income of . million, the highest mark
in the company’s more than -year history. Results
represented profi tability and, in some cases, record per-
formance for CHS business operations. The net income
fi gure compares with . million for fi scal 
and surpasses a previous record of . million set
in fi scal .
Revenues also reached a record mark of . billion,
largely due to increased values for the energy, crop nutri-
ents, grains and other commodities that make up the
majority of the company’s business. Revenues for fi scal
 were . billion. The previous record, also set in
fi scal , was . billion.
Earnings were led by the Energy segment, consisting of
refi ned fuels, propane, renewable fuels marketing and
lubricants. This was possible primarily due to improved
margins from the refi ned fuels manufactured at the CHS
Refi nery at Laurel, Mont., and the National Cooperative
Refi nery Association of McPherson, Kan., of which CHS
owns nearly  percent. CHS renewable fuels marketing
and distribution business generated record earnings.
Earnings from the company’s lubricants and propane
businesses, while profi table, were down from fi scal 
performance.
CHS Country Operations generated record earnings
within the company’s Ag Business segment, the result of
higher grain volumes and increased margins. Other Ag
Business components — grain marketing, crop nutrients
and oilseed processing — also contributed to higher earn-
ings in fi scal . Ag Business earnings refl ect a pre-tax
gain of . million on the CHS sale of its investment
in Multigrain AG, a Brazil-based joint venture.
CHS reports results for its business services operations,
as well as two food processing–related joint ventures,
under Corporate and Other. CHS-owned insurance, risk
management and fi nancing businesses reported increased
earnings for fi scal , primarily due to continued market
volatility. The company recorded strong contributions
from its  percent ownership of Ventura Foods, LLC, a
vegetable-oil-based food manufacturing business. The 
percent CHS share of Horizon Milling, LLC, the nation’s
leading wheat miller, generated record returns primarily
due to improved margins.
Overall, fi scal  record performance contributed sig-
nifi cantly to the ability of CHS and, most important, its
stakeholders to grow their respective businesses. During
fi scal , CHS again provided a strong fi nancial return
to its owners — based on fi scal  results — in the form
of . million in cash patronage, equity redemptions
and preferred stock dividends. In fi scal , based on
 earnings, the company expects to return a record
estimated . million to its owners. In addition, CHS
once again ended its fi scal year with a strong balance sheet
and a return on equity of . percent. This sustained solid
performance will enable the company to continue mak-
ing prudent investments in existing businesses and new
opportunities to create long-term value for its stakeholders.