CHS 2014 Annual Report Download - page 64

received no reports of salmonella-related illness in rela-
tion to the recalled products. We estimate our claims CHS Capital has commitments to extend credit to customers
loss associated with this recall to be $18.0 million. As of as long as there is no violation of any condition established in
August 31, 2014, $11.5 million of claims had been settled. the contracts. As of August 31, 2014, CHS Capital’s customers
We maintain product liability and general liability insur- have additional available credit of $1.1 billion.
ance (which includes product liability coverage), which
we believe will offset some related product liability
expenses. However, as of August 31, 2014, no insurance We are committed under operating lease agreements for
recoveries have been recorded related to this incident. approximately 3,000 rail cars with remaining terms of
one to 12 years. In addition, we have commitments under
other operating leases for various refinery, manufac-
We are involved as a defendant in various lawsuits, turing and transportation equipment, vehicles and office
claims and disputes, which are in the normal course of space. Some leases include purchase options at not less
our business. The resolution of any such matters may than fair market value at the end of the lease terms.
affect consolidated net income for any fiscal period;
however, management believes any resulting liabilities, Total rental expense for all operating leases was
individually or in the aggregate, will not have a material $91.8 million, $81.5 million and $74.6 million for the years
effect on our consolidated financial position, results of ended August 31, 2014, 2013 and 2012, respectively.
operations or cash flows during any fiscal year.
Minimum future lease payments required under noncancel-
able operating leases as of August 31, 2014 were as follows:
We are a guarantor for lines of credit and performance
EQUIPMENT
obligations of related companies. Our bank covenants RAIL AND
(DOLLARS IN THOUSANDS) CARS VEHICLES OTHER TOTAL
allow maximum guarantees of $1.0 billion, of which
2015 $ 24,329 $ 15,344 $ 61,653 $ 101,326
$105.2 million was outstanding on August 31, 2014. We
have collateral for a portion of these contingent obliga- 2016 23,286 10,568 40,635 74,489
tions. We have not recorded a liability related to the 2017 21,926 7,761 36,286 65,973
contingent obligations as we do not expect to pay out 2018 17,027 5,309 28,349 50,685
any cash related to them, and the fair values are consid- 2019 11,682 2,406 20,102 34,190
ered immaterial. The underlying loans to the
Thereafter 11,261 1,791 90,039 103,091
counterparties for which we provide guarantees are cur-
Total minimum future
rent as of August 31, 2014.
lease payments $ 109,511 $ 43,179 $277,064 $429,754
Unconditional purchase obligations are commitments to transfer funds in the future for fixed or minimum amounts or
quantities of goods or services at fixed or minimum prices. Our long-term unconditional purchase obligations
primarily relate to pipeline and grain handling take-or-pay and through-put agreements. Minimum future payments
required under these agreements as of August 31, 2014 are as follows:
PAYMENTS DUE BY PERIOD
LESS THAN MORE THAN
(DOLLARS IN THOUSANDS) TOTAL 1 YEAR 1–3 YEARS 3–5 YEARS 5 YEARS
Long-term unconditional purchase obligations $485,739 $68,008 $ 124,367 $87,809 $205,555
The discounted, aggregate amount of the minimum required payments under long-term unconditional purchase obliga-
tions, based on current exchange rates at August 31, 2014, was $415.0 million. Total payments under these arrangements
were $65.5 million, $62.4 million and $47.8 million for the years ended August 31, 2014, 2013 and 2012, respectively.
62 CHS 2014
FOURTEEN: Commitments and Contingencies, continued
Credit Commitments
Lease Commitments
Other Litigation and Claims
Guarantees
Unconditional Purchase Obligations