CHS 2013 Annual Report Download - page 44

8NOV201319002284
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CHS 2013 49
Equities
In accordance with the bylaws and by action of the Our 8% Preferred Stock is listed on the NASDAQ under
Board of Directors, annual net earnings from patronage the symbol CHSCP. On August 31, 2013, we had
sources are distributed to consenting patrons following 12,272,003 shares of our 8% Preferred Stock out-
the close of each fiscal year, and are based on amounts standing with a total redemption value of $306.8 million,
using financial statement earnings. The cash portion of excluding accumulated dividends. Our 8% Preferred
the qualified patronage distribution is determined annu- Stock accumulates dividends at a rate of 8% per year,
ally by the Board of Directors, with the balance issued in which are payable quarterly. Dividends paid on our 8%
the form of capital equity certificates. Total qualified Preferred Stock during the years ended August 31, 2013,
patronage refunds for fiscal 2013 are estimated to be 2012 and 2011, were $24.5 million, $24.5 million, and
$711.9 million, with the cash portion estimated to be $24.5 million, respectively. During the year ended
$284.8 million. Beginning in fiscal 2014, a portion of August 31, 2013, we amended the terms of our 8% Pre-
patronage refunds will be in the form of non-qualified ferred Stock to provide that it may not be redeemed at
capital equity certificates and is estimated to be our option until July 18, 2023.
$129.5 million. The actual qualified patronage refunds
and cash portion for fiscal years 2012, 2011, and 2010 During September 2013, we issued 11,319,175 shares of
were $976.0 million ($380.9 million in cash), $676.3 mil- Class B Preferred Stock, with a total redemption value of
lion ($260.7 million in cash), and $402.4 million $283.0 million, excluding accumulated dividends. The
($141.5 million in cash), respectively. Class B Preferred Stock is listed on the NASDAQ under
the symbol CHSCO and accumulates dividends at a rate
Annual net savings from patronage or other sources of 7.875% per year, which are payable quarterly. Our
may be added to the unallocated capital reserve or, Class B Preferred Stock may not be redeemed at our
upon action by the Board of Directors, may be allocated option until September 26, 2023.
to members in the form of nonpatronage equity certifi-
cates. The Board of Directors authorized, in accordance As described in Note 17, Acquisitions, we have a firm
with our bylaws, that 10% of the earnings from commitment to purchase the remaining NCRA noncon-
patronage business for fiscal years 2013, 2012, and 2011 trolling interests. The following table presents the
be added to our capital reserves. effects of changes in our NCRA ownership interest on
CHS equities for the years ended August 31, 2013, 2012,
Redemptions are at the discretion of the Board of Direc- and 2011.
tors. Redemptions of capital equity certificates
(DOLLARS IN THOUSANDS) 2013 2012 2011
approved by the Board of Directors are divided into two
Net income attributable
pools, one for non-individuals (primarily member coop- to CHS Inc. $ 992,386 $ 1,260,628 $ 961,355
eratives) who may participate in an annual program for
Transfers to
equities held by them and another for individual mem- noncontrolling
bers who are eligible for equity redemptions at age 70 interests:
or upon death. In accordance with authorization from Decrease in CHS Inc.
the Board of Directors, we expect total redemptions capital reserves for
related to the year ended August 31, 2013 that will be purchase of
distributed in fiscal 2014, to be approximately $101.3 mil- noncontrolling
interests (82,138)
lion. These expected distributions are classified as a cur-
rent liability on the August 31, 2013 Consolidated Changes from net
income attributable to
Balance Sheet. For the years ended August 31, 2013, CHS Inc. and transfers
2012 and 2011, we redeemed in cash, equities in accor- to noncontrolling
dance with authorization from the Board of Directors, in interests $ 992,386 $ 1,178,490 $ 961,355
the amounts of $193.4 million, $145.7 million and
$61.2 million, respectively.