CHS 2014 Annual Report Download - page 46

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total redemption value of $306.8 million, excluding accumu-
lated dividends. The 8% Preferred Stock accumulates divi-
dends at a rate of 8% per year, which are payable quarterly.
During the year ended August 31, 2013, we amended the
terms of our 8% Preferred Stock to provide that it may not
be redeemed at our option until July 18, 2023.
On August 31, 2014, we had 18,071,363 shares of our
Class B Series 1 Preferred Stock outstanding with a total
redemption value of $451.8 million, excluding accumu-
lated dividends. We issued 11,319,175 shares in September
2013, which yielded net proceeds of approximately
$273.3 million after deducting the underwriting discount
and offering expenses payable by us. In addition, we
issued an additional 6,752,188 shares in August 2014, to
redeem approximately $200.0 million of qualified equity
certificates to eligible owners at a market price of $29.62
per share. Our Class B Series 1 Preferred Stock is listed on
the NASDAQ under the symbol CHSCO and accumulates
dividends at a rate of 7.875% per year, which are payable
quarterly. The Class B Series 1 Preferred Stock may be
redeemed at our option beginning September 26, 2023.
In March 2014, we issued 16,800,000 shares of Class B
Series 2 Preferred Stock with a total redemption value of
$420.0 million excluding accumulated dividends. Net pro-
ceeds from the sale of our Class B Series 2 Preferred Stock,
after deducting the underwriting discount and offering
expenses payable by us, were $406.3 million. The Class B
Series 2 Preferred Stock is listed on the NASDAQ under the
symbol CHSCN and accumulates dividends at a rate of
7.10% per year until March 31, 2024, and at a rate equal to
the three-month LIBOR plus 4.298%, not to exceed 8.00%
per annum, subsequent to March 31, 2024, which are pay-
able quarterly. Our Class B Series 2 Preferred Stock may be
redeemed at our option beginning March 31, 2024.
In June 2014, we filed a shelf registration statement on
Form S-3 with the Securities and Exchange Commission
(SEC). Under the shelf registration, which has been declared
effective by the SEC, we may offer and sell, from time to
time, up to $2.0 billion of our Class B Cumulative Redeem-
able Preferred Stock over a three-year period. In September
2014, we issued 19,700,000 shares of Class B Series 3 Pre-
ferred Stock with a total redemption value of $492.5 million,
excluding accumulated dividends. Net proceeds from the
sale of our Class B Series 3 Preferred Stock, after deducting
Our 8% Preferred Stock is listed on the NASDAQ under the underwriting discount and offering expenses payable by
the symbol CHSCP. On August 31, 2014, we had us, were approximately $477.0 million. The Class B Series 3
12,272,003 shares of 8% Preferred Stock outstanding with a Preferred Stock is listed on the NASDAQ under the symbol
44 CHS 2014
Equities
In accordance with our bylaws and by action of the
Board of Directors, annual net earnings from patronage
sources are distributed to consenting patrons following
the close of each fiscal year, and are based on amounts
using financial statement earnings. The cash portion of
the qualified patronage distribution is determined annu-
ally by the Board of Directors, with the balance issued in
the form of qualified and non-qualified capital equity
certificates. Total qualified patronage refunds for fiscal
2014 are estimated to be $662.1 million, with the cash
portion estimated to be $264.8 million. The portion to be
issued in the form of non-qualified capital equity certifi-
cates is estimated to be $148.6 million. The actual
patronage refunds and cash portion for fiscal 2013, 2012,
and 2011 were $841.1 million ($286.8 million in cash),
$976.0 million ($380.9 million in cash), and $676.3 mil-
lion ($260.7 million in cash), respectively.
Annual net savings from patronage or other sources may
be added to the unallocated capital reserve or, upon action
by the Board of Directors, may be allocated to members in
the form of nonpatronage equity certificates. The Board of
Directors authorized, in accordance with our bylaws, that
10% of the earnings from patronage business for fiscal 2014,
2013, and 2012 be added to our capital reserves.
Redemptions are at the discretion of the Board of Directors.
Redemptions of capital equity certificates approved by the
Board of Directors are divided into two pools, one for non-
individuals (primarily member cooperatives) who may par-
ticipate in an annual program for equities held by them and
another for individual members who are eligible for equity
redemptions at age 70 or upon death. In accordance with
authorization from the Board of Directors, we expect total
redemptions related to the year ended August 31, 2014 that
will be distributed in fiscal 2015, to be approximately
$130.1 million. These expected distributions are classified as
a current liability on the August 31, 2014 Consolidated Bal-
ance Sheet. For the years ended August 31, 2014, 2013 and
2012, we redeemed in cash, equities in accordance with
authorization from the Board of Directors, in the amounts of
$99.6 million, $193.4 million and $145.7 million, respectively.
Additionally, in fiscal 2014, we redeemed $200.0 million of
patron’s equities by issuing 6,752,188 shares of preferred
stock in exchange for member’s equity certificates.
Preferred Stock