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FINANCIAL HIGHLIGHTS
FINANCIAL OVERVIEW
Strong energy earnings led CHS financial performance
for fiscal 2013, osetting a challenging year in global
agriculture and contributing to the second-highest
CHS net income in history. For fiscal 2013 (Sept. 1, 2012,
through Aug. 31, 2013), CHS recorded net income
of $992.4 million, a 21 percent decrease from record
earnings of $1.26 billion for fiscal 2012.
CHS set a new mark for revenues at $44.5 billion
in fiscal 2013, an increase of 10 percent over the
previous record of $40.6 billion set in fiscal 2012.
Fiscal 2013 was the third consecutive year of record
revenues for CHS. The increase was primarily
attributed to higher sales volumes within the CHS
Energy and Ag segments. Average selling prices
increased for grain and oilseed products, but declined
overall in the Energy segment.
Year-over-year earnings for the CHS Energy segment
declined 21 percent during fiscal 2013, primarily
due to reduced margins resulting from a major
maintenance turnaround at the CHS Laurel, Mont.,
refinery. Earnings also decreased for the CHS
propane business, while its lubricants, renewable
fuels marketing and transportation businesses
reported increased income for fiscal 2013.
The severe drought that aected the 2012 U.S. crop
resulted in reduced export margins for CHS grain
marketing and contributed to an earnings decline of
39 percent from fiscal 2012 for the CHS Ag segment.
The CHS wholesale crop nutrients business also
reported lower earnings compared to fiscal 2012,
primarily due to lower product margins and costs
associated with a feasibility study under way on a
proposed nitrogen fertilizer manufacturing plant.
CHS Country Operations business — predominantly
local retail operations — also recorded decreased
grain margins in fiscal 2013, but overall recorded
one of its best years on record. CHS processing and
food ingredients business reported lower earnings.
CHS reports results for its business services
operations and two food processing–related joint
ventures under the Corporate and Other heading.
Earnings for those operations increased 14 percent
in fiscal 2013 when compared to the previous
year. Combined earnings for CHS insurance, risk
management and financing businesses were flat
in fiscal 2013 compared with fiscal 2012. CHS
fiscal 2013 earnings increased from its 50 percent
ownership of Ventura Foods, LLC, a vegetable-
oil-based food manufacturing business, and
24 percent share of Horizon Milling, LLC, the nation’s
leading wheat miller. Both joint ventures reported
earnings increases in fiscal 2013 versus 2012.
Strong fiscal 2013 earnings, which extend the
strongest period in company history, allowed CHS
to achieve its three annual financial goals on behalf
of its owners: maintaining a strong balance sheet,
continuing to invest in the future and returning
direct economic value through ownership and cash
returns. CHS once again ended its fiscal year with
strong return on equity of 22.3 percent.
In fiscal 2013, based on record fiscal 2012 earnings,
CHS returned a landmark $598.9 million in cash
patronage, equity redemptions and dividends on
preferred stock to its owners. In fiscal 2014, based on
2013 earnings, CHS expects to return an estimated
$433 million in cash to its owners, bringing cash
returns generated by earnings in fiscal years 2009
through 2013 to an estimated $1.9 billion.
29CHS 2013