CHS 2013 Annual Report Download - page 36

8NOV201319003820
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
from producer borrowers which are collateralized by
various combinations of growing crops, livestock, inven-
tories, accounts receivable, personal property and sup-
plemental mortgages. In addition to the short-term
balances included in the table above, CHS Capital had
long-term notes receivable, with durations of not more
than 10 years, totaling $127.7 million and $164.8 million at
August 31, 2013 and 2012, respectively. The long-term
notes receivable are included in other assets on our
Consolidated Balance Sheets. As of August 31, 2013 and
2012, the commercial notes represented 59% and 74%,
respectively, and the producer notes represented 41.0%
Trade accounts receivable are initially recorded at a and 26.0%, respectively, of the total CHS Capital notes
selling price, which approximates fair value, upon the receivable.
sale of goods or services to customers. Subsequently,
trade accounts receivable are carried at net realizable CHS Capital evaluates the collectability of both com-
value, which includes an allowance for estimated uncol- mercial and producer notes on a specific identification
lectible amounts. We calculate this allowance based on basis, based on the amount and quality of the collateral
our history of write-offs, level of past due accounts, and obtained, and records specific loan loss reserves when
our relationships with, and the economics status of, our appropriate. A general reserve is also maintained based
customers. The carrying value of CHS Capital notes on historical loss experience and various qualitative fac-
receivable approximates fair value, given their short tors. In total, the specific and general loan loss reserves
duration and the use of market pricing adjusted for risk. related to CHS Capital are not material to our consoli-
dated financial statements, nor are the associated his-
CHS Capital, our wholly-owned subsidiary, has notes torical write-offs. The accrual of interest income is
receivable from commercial and producer borrowers. discontinued at the time the loan is 90 days past due
The short-term notes receivable generally have maturity unless the credit is well-collateralized and in process of
terms of 12-14 months and are reported at their out- collection. The amount of CHS Capital notes that were
standing principle balances, as CHS Capital holds these past due was not significant at any reporting date
notes to maturity. The notes receivable from commercial presented.
borrowers are collateralized by various combinations of
mortgages, personal property, accounts and notes CHS Capital has commitments to extend credit to a cus-
receivable, inventories and assignments of certain tomer as long as there is no violation of any condition
regional cooperative’s capital stock. These loans are pri- established in the contract. As of August 31, 2013,
marily originated in the states of Minnesota, Wisconsin CHS Capital’s customers have additional available credit
and North Dakota. CHS Capital also has loans receivable of $1.0 billion.
CHS 2013 41
Receivables
Receivables as of August 31, 2013 and 2012 are as
follows:
(DOLLARS IN THOUSANDS) 2013 2012
Trade accounts receivable $ 2,673,169 $ 2,817,817
CHS Capital notes receivable 437,141 606,514
Other 254,590 278,196
3,364,900 3,702,527
Less allowances and reserves 94,589 111,785
$ 3,270,311 $ 3,590,742