CHS 2011 Annual Report Download - page 25

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24 2011 CHS
CHS Inc. (CHS or the Company) is a diversified energy,
grains and foods company committed to providing the
essential resources that enrich lives around the world.
As a cooperative, the Company is owned by farmers,
ranchers and their member cooperatives across the
United States. The Company also has preferred stock-
holders that own shares of the Company’s 8% Cumula-
tive Redeemable Preferred Stock.
The Company provides a full range of agricultural inputs
such as refined fuels, propane, farm supplies, animal
nutrition and agronomy products, as well as services,
which include hedging, financing and insurance. CHS
owns and operates petroleum refineries and pipelines
and markets and distributes refined fuels and other
energy products under the Cenex»brand through a
network of member cooperatives and independents.
The Company purchases grains and oilseeds directly
and indirectly from agricultural producers primarily in
the midwestern and western United States. These grains
and oilseeds are sold to domestic and international cus-
tomers, or further processed into a variety of grain-based
foods products.
The consolidated financial statements include the accounts
of CHS and all of its wholly-owned and majority-owned
subsidiaries and limited liability companies, primarily
the National Cooperative Refinery Association (NCRA),
included in the Company’s Energy segment. The effects
of all significant intercompany transactions have
been eliminated.
While the Company’s revenues and operating results are
derived from businesses and operations which are wholly-
owned and majority-owned, a portion of the Company’s
business operations are conducted through companies in
which it holds ownership interests of 50% or less and does
not control the operations. The Company accounts for
these investments primarily using the equity method of
accounting, wherein the Company records its proportion-
ate share of income or loss reported by the entity as equity
income from investments, without consolidating the rev-
enues and expenses of the entity in its Consolidated
Statements of Operations.
The Company’s audited consolidated financial state-
ments and the related notes appear in the following
pages. Management’s discussion and analysis regarding
the results of operations and the liquidity and capital
resources of the Company, as of and for the year ended
August 31, 2011, and the two previous years, is included
in the Company’s Annual Report on Form 10-K for the
fiscal year ended August 31, 2011, filed with the Secu-
rities and Exchange Commission.
FINANCIAL INTRODUCTION
INTRODUCTION