UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☑	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended	~~May 31,~~November 30, 2022
or
☐	Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to

Commission file number: 001-36079

CHS Inc.

(Exact name of Registrant as specified in its charter)

Minnesota

41-0251095

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

5500 Cenex Drive

Inver Grove Heights, Minnesota 55077

(Address of principal executive offices, including zip code)

(651) 355-6000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
8% Cumulative Redeemable Preferred Stock	CHSCP	The Nasdaq Stock Market LLC
Class B Cumulative Redeemable Preferred Stock, Series 1	CHSCO	The Nasdaq Stock Market LLC
Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2	CHSCN	The Nasdaq Stock Market LLC
Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3	CHSCM	The Nasdaq Stock Market LLC
Class B Cumulative Redeemable Preferred Stock, Series 4	CHSCL	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer☐ Accelerated filer ☐ Non-accelerated filer☑ Smaller reporting company☐ Emerging growth company o

~~Accelerated filer~~ o

~~Non-accelerated filer~~

☑

~~Smaller reporting company~~

☐

~~Emerging growth company~~

☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

The issuer has no common stock outstanding.

TABLE OF CONTENTS



	PART I. FINANCIAL INFORMATION	Page No.
Item 1.	Financial Statements (unaudited)	2
	Condensed Consolidated Balance Sheets as of ~~May~~31November 30 , 2022, and August 31, ~~2021~~20 2 2	2
	Condensed Consolidated Statements of Operations for the Three ~~and~~ ~~Nine~~Months Ended Ma y 31November 30 , 2022 and 2021	3
	Condensed Consolidated Statements of Comprehensive Income for the Three ~~and~~ ~~Nine~~Months Ended MaN y 31ovember 30 , 2022 and 2021	4
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended Ma y 31November 30 , 2022 and 2021	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2419
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4734
Item 4.	Controls and Procedures	4734
	PART II. OTHER INFORMATION	4835
Item 1.	Legal Proceedings	4835
Item 1A.	Risk Factors	4835
Item 6.	Exhibits	4935
Signatures		5036

Unless the context otherwise requires, for purposes of this Quarterly Report on Form 10-Q, the words "CHS," "we," "us" and "our" refer to CHS Inc., a Minnesota cooperative corporation, and its subsidiaries as of ~~May 31,~~November 30, 2022.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains, and our other publicly available documents may contain, and our officers, directors and other representatives may from time to time make "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strategy," "future," "likely," "may," "should," "will" and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our businesses, financial condition and results of operations, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are discussed or identified in our public filings made with the U.S. Securities and Exchange Commission, including in the "Risk Factors" discussion in Item 1A of our Annual Report on Form 10-K for the fiscal year ended August 31, ~~2021, and Item 1A of Part II of this Quarterly Report on Form 10-Q.~~2022. These factors may include changes in commodity prices; the impact of government policies, mandates, regulations and trade agreements; global and regional political, economic, legal and other risks of doing business globally; the ongoing war between Russia and Ukraine; the impact of inflation; the ~~ongoing COVID-19 outbreak or~~impact of epidemics, pandemics, outbreaks of disease and other ~~similar outbreaks;~~adverse public health developments, including COVID-19; the impact of market acceptance of alternatives to refined petroleum products; consolidation among our suppliers and customers; nonperformance by contractual counterparties; changes in federal income tax laws or our tax status; the impact of compliance or noncompliance with applicable laws and regulations; the impact of any governmental investigations; the impact of environmental liabilities and litigation; actual or perceived quality, safety or health risks associated with our products; the impact of seasonality; the effectiveness of our risk management strategies; business interruptions, casualty losses and ~~casualty losses;~~supply chain issues; the impact of workforce factors; our funding needs and financing sources; financial institutions' and other capital sources' policies concerning energy-related businesses; uncertainty regarding the transition away from LIBOR and the replacement of LIBOR with an alternative reference rate; technological improvements that decrease the demand for our agronomy and energy products; our ability to complete, integrate and benefit from acquisitions, strategic alliances, joint ventures, divestitures and other nonordinary course-of-business events; security breaches or other disruptions to our information technology systems or assets; the impact of our environmental, social and governance ~~practices;~~practices, including failures or delays in achieving our strategies or expectations related to climate change or other environmental matters; the impairment of long-lived assets; and other factors affecting our businesses generally. Any forward-looking statements made by us in this Quarterly Report on Form 10-Q are based only on information currently available to us and speak only as of the date on which the statement is made. We undertake no obligation to ~~publicly~~ update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by applicable law.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


		May 31, 2022		August 31, 2021			November 30, 2022		August 31, 2022
		(Dollars in thousands)					(Dollars in thousands)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	369,256	$	413,159	Cash and cash equivalents	$	636,296	$	793,957
Receivables	Receivables	4,093,122		2,860,884		Receivables	4,276,643		3,548,315
Inventories	Inventories	4,451,695		3,334,675		Inventories	5,070,104		3,652,871
Other current assets	Other current assets	2,061,475		1,390,233		Other current assets	1,481,592		1,382,704
Total current assets	Total current assets	10,975,548		7,998,951		Total current assets	11,464,635		9,377,847
Investments	Investments	4,023,095		3,669,111		Investments	3,890,624		3,728,006
Property, plant and equipment	Property, plant and equipment	4,685,638		4,810,005		Property, plant and equipment	4,728,819		4,744,959
Other assets	Other assets	1,024,762		1,098,208		Other assets	989,186		973,995
Total assets	Total assets	$	20,709,043	$	17,576,275	Total assets	$	21,073,264	$	18,824,807
LIABILITIES AND EQUITIES	LIABILITIES AND EQUITIES					LIABILITIES AND EQUITIES
Current liabilities:	Current liabilities:					Current liabilities:
Notes payable	Notes payable	$	2,028,859	$	1,740,859	Notes payable	$	773,447	$	606,719
Current portion of long-term debt	Current portion of long-term debt	161,308		38,450		Current portion of long-term debt	289,888		290,605
Accounts payable	Accounts payable	3,373,338		2,616,052		Accounts payable	4,604,819		3,063,310
Accrued expenses	Accrued expenses	796,338		622,723		Accrued expenses	666,614		784,317
Other current liabilities	Other current liabilities	2,194,482		1,307,929		Other current liabilities	2,153,474		2,207,018
Total current liabilities	Total current liabilities	8,554,325		6,326,013		Total current liabilities	8,488,242		6,951,969
Long-term debt	Long-term debt	1,800,779		1,579,911		Long-term debt	1,668,158		1,668,209
Other liabilities	Other liabilities	612,761		653,025		Other liabilities	1,188,019		743,363
Commitments and contingencies (Note 13)	Commitments and contingencies (Note 13)	0		0		Commitments and contingencies (Note 13)
Equities:	Equities:					Equities:
Preferred stock	Preferred stock	2,264,038		2,264,038		Preferred stock	2,264,038		2,264,038
Equity certificates	Equity certificates	5,000,593		5,247,238		Equity certificates	5,182,720		5,391,236
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(240,076)		(216,391)		Accumulated other comprehensive loss	(268,953)		(255,335)
Capital reserves	Capital reserves	2,710,344		1,713,976		Capital reserves	2,545,102		2,055,682
Total CHS Inc. equities	Total CHS Inc. equities	9,734,899		9,008,861		Total CHS Inc. equities	9,722,907		9,455,621
Noncontrolling interests	Noncontrolling interests	6,279		8,465		Noncontrolling interests	5,938		5,645
Total equities	Total equities	9,741,178		9,017,326		Total equities	9,728,845		9,461,266
Total liabilities and equities	Total liabilities and equities	$	20,709,043	$	17,576,275	Total liabilities and equities	$	21,073,264	$	18,824,807

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited).

Table of Contents

CHS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


		Three Months Ended May 31,				Nine Months Ended May 31,					Three Months Ended November 30,
		2022		2021		2022		2021			2022		2021
		(Dollars in thousands)									(Dollars in thousands)
Revenues	Revenues	$	13,137,724	$	10,929,976	$	34,351,069	$	27,965,778	Revenues	$	12,765,839	$	10,880,757
Cost of goods sold	Cost of goods sold	12,493,467		10,615,348		32,917,906		27,371,326		Cost of goods sold	11,886,704		10,360,849
Gross profit	Gross profit	644,257		314,628		1,433,163		594,452		Gross profit	879,135		519,908
Marketing, general and administrative expenses	Marketing, general and administrative expenses	243,136		186,703		692,395		518,875		Marketing, general and administrative expenses	234,666		204,934
Operating earnings	Operating earnings	401,121		127,925		740,768		75,577		Operating earnings	644,469		314,974

Interest expense	Interest expense	32,099		28,992		80,705		82,897		Interest expense	33,250		23,432
Other income	Other income	(6,636)		(10,748)		(31,817)		(41,219)		Other income	(24,289)		(23,776)
Equity income from investments	Equity income from investments	(263,079)		(146,522)		(644,347)		(260,654)		Equity income from investments	(181,962)		(151,345)
Income before income taxes	Income before income taxes	638,737		256,203		1,336,227		294,553		Income before income taxes	817,470		466,663
Income tax expense (benefit)		62,492		(17,469)		89,143		(10,130)
Income tax expense										Income tax expense	34,554		14,720
Net income	Net income	576,245		273,672		1,247,084		304,683		Net income	782,916		451,943
Net (loss) income attributable to noncontrolling interests		(329)		81		(451)		(350)
Net income (loss) attributable to noncontrolling interests										Net income (loss) attributable to noncontrolling interests	318		(18)
Net income attributable to CHS Inc.	Net income attributable to CHS Inc.	$	576,574	$	273,591	$	1,247,535	$	305,033	Net income attributable to CHS Inc.	$	782,598	$	451,961

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited).

Table of Contents

CHS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


		Three Months Ended May 31,				Nine Months Ended May 31,					Three Months Ended November 30,
		2022		2021		2022		2021			2022		2021
		(Dollars in thousands)									(Dollars in thousands)
Net income	Net income	$	576,245	$	273,672	$	1,247,084	$	304,683	Net income	$	782,916	$	451,943
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:									Other comprehensive income (loss), net of tax:
Pension and other postretirement benefits	Pension and other postretirement benefits	4,485		3,888		12,834		11,402		Pension and other postretirement benefits	8,524		3,768

Cash flow hedges	Cash flow hedges	(25,257)		(4,991)		(34,951)		(3,881)		Cash flow hedges	(20,207)		(9,141)
Foreign currency translation adjustment	Foreign currency translation adjustment	2,551		8,218		(1,568)		11,060		Foreign currency translation adjustment	(1,935)		(10,045)
Other comprehensive (loss) income, net of tax		(18,221)		7,115		(23,685)		18,581
Other comprehensive loss, net of tax										Other comprehensive loss, net of tax	(13,618)		(15,418)
Comprehensive income	Comprehensive income	558,024		280,787		1,223,399		323,264		Comprehensive income	769,298		436,525
Comprehensive (loss) income attributable to noncontrolling interests		(329)		81		(451)		(350)
Comprehensive income (loss) attributable to noncontrolling interests										Comprehensive income (loss) attributable to noncontrolling interests	318		(18)
Comprehensive income attributable to CHS Inc.	Comprehensive income attributable to CHS Inc.	$	558,353	$	280,706	$	1,223,850	$	323,614	Comprehensive income attributable to CHS Inc.	$	768,980	$	436,543

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited).

Table of Contents

CHS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Nine Months Ended May 31,					Three Months Ended November 30,
		2022		2021			2022		2021
		(Dollars in thousands)					(Dollars in thousands)
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	1,247,084	$	304,683	Net income	$	782,916	$	451,943
Adjustments to reconcile net income to net cash (used in) provided by operating activities:	Adjustments to reconcile net income to net cash (used in) provided by operating activities:					Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization, including amortization of deferred major maintenance	Depreciation and amortization, including amortization of deferred major maintenance	399,562		401,657		Depreciation and amortization, including amortization of deferred major maintenance	131,388		132,772
Equity income from investments, net of distributions received	Equity income from investments, net of distributions received	(345,846)		(128,635)		Equity income from investments, net of distributions received	(164,930)		(140,387)
Provision for current expected credit losses	Provision for current expected credit losses	18,641		3,353		Provision for current expected credit losses	2,961		1,472
Deferred taxes	Deferred taxes	(51,522)		17,379		Deferred taxes	(1,733)		11,856
Other, net	Other, net	(6,643)		(24,420)		Other, net	1,597		(8,556)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables	Receivables	(1,074,111)		(885,496)		Receivables	(779,455)		(696,984)
Inventories	Inventories	(1,117,020)		(763,675)		Inventories	(1,417,233)		(1,274,141)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	967,603		775,825		Accounts payable and accrued expenses	1,441,469		1,420,237
Other, net	Other, net	(44,886)		(333,049)		Other, net	(177,172)		(81,799)
Net cash used in operating activities	Net cash used in operating activities	(7,138)		(632,378)		Net cash used in operating activities	(180,192)		(183,587)
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Acquisition of property, plant and equipment	Acquisition of property, plant and equipment	(207,455)		(238,774)		Acquisition of property, plant and equipment	(122,598)		(74,878)
Proceeds from disposition of property, plant and equipment	Proceeds from disposition of property, plant and equipment	8,127		17,039		Proceeds from disposition of property, plant and equipment	5,034		2,822
Expenditures for major maintenance	Expenditures for major maintenance	(18,072)		(42,466)		Expenditures for major maintenance	(27,398)		(5,541)
Proceeds from sale of business	Proceeds from sale of business	73,152		39,567		Proceeds from sale of business	—		55,546
Changes in CHS Capital notes receivable, net	Changes in CHS Capital notes receivable, net	(200,380)		31,543		Changes in CHS Capital notes receivable, net	32,098		(31,509)
Financing extended to customers	Financing extended to customers	(47,235)		(1,890)		Financing extended to customers	(39,814)		(456)
Payments from customer financing	Payments from customer financing	53,442		6,110		Payments from customer financing	42,121		3,833

Other investing activities, net	Other investing activities, net	(1,467)		11,362		Other investing activities, net	(156)		(2,013)
Net cash used in investing activities	Net cash used in investing activities	(339,888)		(177,509)		Net cash used in investing activities	(110,713)		(52,196)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from notes payable and long-term debt	Proceeds from notes payable and long-term debt	19,077,600		26,618,429		Proceeds from notes payable and long-term debt	2,054,507		4,952,834
Payments on notes payable, long-term debt and finance lease obligations	Payments on notes payable, long-term debt and finance lease obligations	(18,401,162)		(25,381,437)		Payments on notes payable, long-term debt and finance lease obligations	(1,887,483)		(4,792,770)
Preferred stock dividends paid	Preferred stock dividends paid	(126,501)		(126,501)		Preferred stock dividends paid	(42,167)		(42,167)
Redemptions of equities	Redemptions of equities	(99,229)		(37,809)		Redemptions of equities	(12,941)		(12,221)
Cash patronage dividends paid		(51,026)		(30,042)

Other financing activities, net	Other financing activities, net	(43,736)		(30,634)		Other financing activities, net	18,044		50,326
Net cash provided by financing activities	Net cash provided by financing activities	355,946		1,012,006		Net cash provided by financing activities	129,960		156,002
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(11,311)		(451)		Effect of exchange rate changes on cash and cash equivalents	1,415		(3,550)
(Decrease) increase in cash and cash equivalents and restricted cash		(2,391)		201,668
Decrease in cash and cash equivalents and restricted cash						Decrease in cash and cash equivalents and restricted cash	(159,530)		(83,331)
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	542,484		216,993		Cash and cash equivalents and restricted cash at beginning of period	903,474		542,484
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	540,093	$	418,661	Cash and cash equivalents and restricted cash at end of period	$	743,944	$	459,153

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited).

Table of Contents

CHS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 Basis of Presentation and Significant Accounting Policies

Basis of Presentation

These unaudited condensed consolidated financial statements reflect, in the opinion of management, all normal recurring adjustments necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. The results of operations and cash flows for interim periods are not necessarily indicative of results for a full fiscal year because of the seasonal nature of our businesses, among other things. Our unaudited condensed consolidated financial statements and notes are presented as permitted by the requirements for Quarterly Reports on Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended August 31, ~~2021,~~2022, included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC").

Significant Accounting Policies

No significant accounting policies were updated or changed since our Annual Report on Form 10-K for the year ended August 31, ~~2021.~~2022.

Recent Accounting Pronouncements

No recent accounting pronouncements are expected to have a material impact on our condensed consolidated financial statements.

Note 2 Revenues

The following table presents revenues recognized under Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"), disaggregated by reportable segment, as well as the amount of revenues recognized under ASC Topic 815, Derivatives and Hedging ("ASC Topic 815"), and other applicable accounting guidance for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2022 and 2021. Other applicable accounting guidance primarily includes revenues recognized under ASC Topic 470, Debt, and ASC Topic 842, Leases, that fall outside the scope of ASC Topic 606.

ASC Topic 606 ASC Topic 815 Other Guidance Total Revenues
Three Months Ended May 31, 2022 (Dollars in thousands)
Energy $ 2,529,311 $ 246,631 $ — $ 2,775,942
Ag 3,460,390 6,883,785 8,194 10,352,369
Corporate and Other 4,205 — 5,208 9,413
Total revenues $ 5,993,906 $ 7,130,416 $ 13,402 $ 13,137,724
Three Months Ended May 31, 2021
Energy $ 1,533,643 $ 171,155 $ — $ 1,704,798
Ag 2,810,389 6,389,677 16,138 9,216,204
Corporate and Other 3,929 — 5,045 8,974
Total revenues $ 4,347,961 $ 6,560,832 $ 21,183 $ 10,929,976

~~Table of Contents~~


		ASC Topic 606		ASC Topic 815		Other Guidance		Total Revenues			ASC Topic 606		ASC Topic 815		Other Guidance		Total Revenues
Nine Months Ended May 31, 2022		(Dollars in thousands)
Three Months Ended November 30, 2022										Three Months Ended November 30, 2022	(Dollars in thousands)
Energy	Energy	$	6,426,092	$	681,836	$	—	$	7,107,928	Energy	$	2,802,155	$	317,151	$	—	$	3,119,306
Ag	Ag	8,056,676		19,139,417		21,466		27,217,559		Ag	2,613,460		7,009,353		10,431		9,633,244
Corporate and Other	Corporate and Other	11,785		—		13,797		25,582		Corporate and Other	5,699		—		7,590		13,289
Total revenues	Total revenues	$	14,494,553	$	19,821,253	$	35,263	$	34,351,069	Total revenues	$	5,421,314	$	7,326,504	$	18,021	$	12,765,839

Nine Months Ended May 31, 2021
Three Months Ended November 30, 2021										Three Months Ended November 30, 2021
Energy	Energy	$	3,841,678	$	493,125	$	—	$	4,334,803	Energy	$	2,047,277	$	256,710	$	—	$	2,303,987
Ag	Ag	5,324,396		18,232,235		43,187		23,599,818		Ag	2,531,956		6,029,260		8,043		8,569,259
Corporate and Other	Corporate and Other	14,925		—		16,232		31,157		Corporate and Other	3,590		—		3,921		7,511
Total revenues	Total revenues	$	9,180,999	$	18,725,360	$	59,419	$	27,965,778	Total revenues	$	4,582,823	$	6,285,970	$	11,964	$	10,880,757

Less than 1% of revenues accounted for under ASC Topic 606 included within the tables above are recorded over time and relate primarily to service contracts.

Contract Assets and Contract Liabilities

Contract assets relate to unbilled amounts arising from goods that have already been transferred to ~~customers~~the customer where the right to payment is not conditional on the passage of time. This results in ~~the~~ recognition of an asset, as the amount of revenue recognized at a certain point in time exceeds the amount billed to customers. Contract assets are recorded in receivables within our Condensed Consolidated Balance Sheets and were ~~$17.1~~$17.0 million and ~~$29.0~~$17.2 million as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, respectively.

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Contract liabilities relate to advance payments received from customers for goods and services that we have yet to provide. Contract liabilities of ~~$544.8~~$367.1 million and ~~$213.9~~$541.5 million as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, respectively, are recorded within other current liabilities on our Condensed Consolidated Balance Sheets. For the three months ended ~~May 31,~~November 30, 2022 and 2021, we recognized revenues of ~~$48.1~~$122.0 million and ~~$34.2 million related to contract liabilities, respectively. For the nine months ended May 31, 2022 and 2021, we recognized revenues of $213.9 million and $126.2~~$107.2 million related to contract liabilities, respectively. These amounts were included in the other current liabilities balance at the beginning of the respective period.

Note 3 Receivables


		May 31, 2022		August 31, 2021			November 30, 2022		August 31, 2022
		(Dollars in thousands)					(Dollars in thousands)
Trade accounts receivable	Trade accounts receivable	$	3,164,995	$	2,047,198	Trade accounts receivable	$	3,359,600	$	2,626,623
CHS Capital short-term notes receivable	CHS Capital short-term notes receivable	652,041		505,778		CHS Capital short-term notes receivable	587,917		644,875
Other	Other	404,352		451,630		Other	459,462		404,734
Gross receivables	Gross receivables	4,221,388		3,004,606		Gross receivables	4,406,979		3,676,232
Less: allowances and reserves	Less: allowances and reserves	128,266		143,722		Less: allowances and reserves	130,336		127,917
Total receivables	Total receivables	$	4,093,122	$	2,860,884	Total receivables	$	4,276,643	$	3,548,315

Receivables are composed of trade accounts receivable, short-term notes receivable in our wholly-owned subsidiary, CHS Capital, LLC ("CHS Capital"), and other receivables, less an allowance for expected credit losses. The allowance for expected credit losses is based on our best estimate of expected credit losses in existing receivable balances and is determined using historical write-off experience, adjusted for various industry and regional data and current expectations of future credit losses.

Notes receivable from commercial borrowers are collateralized by various combinations of mortgages, personal property, accounts and notes receivable, inventories and assignments of certain regional cooperatives' capital stock. These loans are primarily originated in the states of Minnesota and North Dakota. CHS Capital also has loans receivable from producer

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borrowers that are collateralized by various combinations of growing crops, livestock, inventories, accounts receivable, personal property and supplemental mortgages and are primarily originated in the same states as the commercial ~~notes.~~notes, as well as South Dakota.

In addition to the short-term balances included in the table above, CHS Capital had long-term notes receivable, with durations of generally not more than 10 years, totaling ~~$50.3~~$75.7 million and ~~$55.4~~$54.3 million as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, respectively. ~~Long-term~~The long-term notes receivable are included in other assets on our Condensed Consolidated Balance Sheets. As of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, commercial notes represented ~~49%~~37% and ~~28%~~25%, respectively, and producer notes represented ~~51%~~63% and ~~72%~~75%, respectively, of total CHS Capital notes receivable.

CHS Capital has commitments to extend credit to customers if there are no violations of any contractually established conditions. As of ~~May 31,~~November 30, 2022, CHS Capital customers had additional available credit of ~~$645.9 million.~~$1.0 billion. No significant troubled debt restructuring activity occurred and no third-party customer or borrower accounted for more than 10% of the total receivables balance as of ~~May 31,~~November 30, 2022, or August 31, ~~2021.~~2022.

Note 4 Inventories


		May 31, 2022		August 31, 2021			November 30, 2022		August 31, 2022
		(Dollars in thousands)					(Dollars in thousands)
Grain and oilseed	Grain and oilseed	$	2,044,585	$	1,435,544	Grain and oilseed	$	2,244,788	$	1,133,531
Energy	Energy	577,360		762,317		Energy	918,042		824,114
Agronomy	Agronomy	1,439,716		958,548		Agronomy	1,482,707		1,295,548
Processed grain and oilseed	Processed grain and oilseed	140,752		140,975		Processed grain and oilseed	316,490		292,992
Other	Other	249,282		37,291		Other	108,077		106,686
Total inventories	Total inventories	$	4,451,695	$	3,334,675	Total inventories	$	5,070,104	$	3,652,871

As of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, we valued approximately ~~14%~~12% and ~~13%~~14%, respectively, of inventories, primarily crude oil and refined fuels within our Energy segment, using the lower of cost, determined on the last in, first out ("LIFO") method, or net realizable value. If the first in, first out ("FIFO") method of accounting had been used, inventories

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would have been higher than the reported amount by ~~$895.7~~$515.9 million and ~~$359.2~~$678.3 million as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, respectively. Actual valuation of inventory under the LIFO method can be made only at the end of each year based on inventory levels and costs at that time. Interim LIFO calculations are based on management's estimates of expected year-end inventory levels and values and are subject to final year-end LIFO inventory valuation.

Note 5 Investments


		May 31, 2022		August 31, 2021			November 30, 2022		August 31, 2022
		(Dollars in thousands)					(Dollars in thousands)
Equity method investments:	Equity method investments:					Equity method investments:
CF Industries Nitrogen, LLC	CF Industries Nitrogen, LLC	$	2,916,993	$	2,667,164	CF Industries Nitrogen, LLC	$	2,769,170	$	2,641,604
Ventura Foods, LLC	Ventura Foods, LLC	414,929		388,612		Ventura Foods, LLC	427,343		410,093
Ardent Mills, LLC	Ardent Mills, LLC	237,971		220,132		Ardent Mills, LLC	255,106		250,857
TEMCO, LLC	TEMCO, LLC	57,295		31,464		TEMCO, LLC	44,091		32,809
Other equity method investments	Other equity method investments	264,555		232,923		Other equity method investments	268,731		265,913
Other investments	Other investments	131,352		128,816		Other investments	126,183		126,730
Total investments	Total investments	$	4,023,095	$	3,669,111	Total investments	$	3,890,624	$	3,728,006

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Joint ventures and other investments in which we have significant ownership and influence, but not control, are accounted for in our condensed consolidated financial statements using the equity method of accounting. Our only significant equity method ~~investments consist of~~investment during the three months ended November 30, 2022 and 2021, was CF Industries Nitrogen, LLC ("CF Nitrogen"), ~~Ventura Foods, LLC ("Ventura Foods"), Ardent Mills, LLC ("Ardent Mills"), and TEMCO, LLC ("TEMCO"),~~ which ~~are~~is summarized below. In addition to ~~the~~ recognition of our share of income from equity method investments, our equity method investments are evaluated for indicators of other-than-temporary impairment on an ongoing basis in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Other investments consist primarily of investments in cooperatives without readily determinable fair values and are generally recorded at cost, unless an impairment or other observable market price change occurs requiring an adjustment. We have approximately ~~$788.7~~$680.1 million of cumulative undistributed earnings from our equity method investees included in the investments balance as of ~~May 31,~~November 30, 2022.

CF Nitrogen

We have a ~~$2.9~~$2.8 billion investment in CF Nitrogen, a strategic venture with CF Industries Holdings, Inc. ("CF Industries"). The investment consists of an approximate ~~10%~~8% membership interest (based on product tons) in CF Nitrogen. We account for this investment using the hypothetical liquidation at book value method, recognizing our share of the earnings and losses of CF Nitrogen as equity income from investments in our Nitrogen Production segment based on our contractual claims on the entity's net assets pursuant to the liquidation provisions of ~~the~~ CF ~~Nitrogen~~Nitrogen's Limited Liability Company Agreement, adjusted for semiannual cash distributions.

The following table provides summarized unaudited financial information for our equity method investment in CF Nitrogen for the ~~nine~~three months ended ~~May 31,~~November 30, 2022 and 2021:

Nine Months Ended May 31,
2022 2021
(Dollars in thousands)
Net sales $ 4,972,383 $ 2,116,040
Gross profit 2,682,653 565,067
Net earnings 2,641,425 524,071
Earnings attributable to CHS Inc. 497,289 118,477

~~Ventura Foods, Ardent Mills and TEMCO~~

We have a 50% interest in Ventura Foods, a joint venture with Mitsui & Co., that produces and distributes primarily edible oil-based products. We also have a 12% interest in Ardent Mills, which is a joint venture with Cargill, Incorporated ("Cargill"), and Conagra Brands, Inc., and is the largest flour miller in the United States. Additionally, we have a 50% interest in TEMCO, which is a joint venture with Cargill focused on export elevation, primarily to Asia. We account for Ventura Foods, Ardent Mills and TEMCO as equity method investments. Our shares of the results of Ventura Foods and Ardent Mills are included in Corporate and Other and our share of the results of TEMCO is included in our Ag segment.

The following table provides aggregate summarized unaudited financial information for our equity method investments in Ventura Foods, Ardent Mills and TEMCO for the nine months ended May 31, 2022 and 2021:


		Nine Months Ended May 31,					Three Months Ended November 30,
		2022		2021			2022		2021
		(Dollars in thousands)					(Dollars in thousands)
Net sales	Net sales	$	7,124,636	$	7,471,759	Net sales	$	1,623,268	$	1,316,899
Gross profit	Gross profit	850,417		741,461		Gross profit	770,478		575,571
Net earnings	Net earnings	439,502		363,988		Net earnings	764,179		562,593
Earnings attributable to CHS Inc.	Earnings attributable to CHS Inc.	105,869		116,436		Earnings attributable to CHS Inc.	127,566		116,473

Our investments in other equity method investees are not significant in relation to our condensed consolidated financial statements, either individually or in aggregate.

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Note 6 Notes Payable and Long-Term Debt

Our notes payable and long-term debt are subject to various restrictive requirements for maintenance of minimum consolidated net worth and other financial ratios. We were in compliance with all debt covenants as of ~~May 31,~~November 30, 2022. ~~The table below summarizes our notes~~Notes payable as of ~~May 31,~~November 30, 2022, and August 31, ~~2021:~~2022, consisted of the following:


		May 31, 2022		August 31, 2021			November 30, 2022		August 31, 2022
		(Dollars in thousands)					(Dollars in thousands)
Notes payable	Notes payable	$	966,258	$	864,147	Notes payable	$	625,872	$	459,398
CHS Capital notes payable	CHS Capital notes payable	1,062,601		876,712		CHS Capital notes payable	147,575		147,321
Total notes payable	Total notes payable	$	2,028,859	$	1,740,859	Total notes payable	$	773,447	$	606,719

~~As of May 31, 2022, our~~Our primary line of credit ~~was~~is a five-year unsecured revolving credit facility with a syndicate of domestic and international banks. The credit facility provides a committed amount of $2.75 billion that expires on July 16, 2024. There were no borrowings outstanding on this facility as of ~~May 31,~~November 30, 2022, and August 31, ~~2021.~~2022. We also maintain certain uncommitted bilateral facilities to support our working capital needs.

We have a receivables and loans securitization facility ("Securitization Facility") with certain unaffiliated financial institutions ("Purchasers"). Under the Securitization Facility, we and certain of our subsidiaries ("Originators") sell trade accounts and notes receivable ("Receivables") to Cofina Funding, LLC ("Cofina"), a wholly-owned, bankruptcy-remote, indirect subsidiary of CHS. Cofina in turn transfers the Receivables to the Purchasers, and this arrangement is accounted for as a secured financing. We use the proceeds from the sale of Receivables under the Securitization Facility for general corporate purposes and settlements are made on a monthly basis. The amount available under the Securitization Facility fluctuates over time, based on the total amount of eligible Receivables generated during the normal course of business. The Securitization Facility consists of a committed portion with a maximum availability of ~~$700.0~~$850.0 million and an uncommitted portion with a maximum availability of $250.0 million. As of ~~May 31,~~November 30, 2022, total availability under the Securitization Facility was ~~$950.0~~$929.0 million, ~~all~~ of which ~~had been~~no amount was utilized.

We also have a repurchase facility ("Repurchase Facility") related to the Securitization Facility. Under the Repurchase Facility, we can obtain repurchase agreement financing in an amount up to $150.0 million for subordinated notes issued by Cofina in favor of the Originators and representing a portion of the outstanding balance of the Receivables sold by the Originators to Cofina under the Securitization Facility. AsNo balance was outstanding under the Repurchase Facility as of ~~May 31,~~November 30, 2022, and August 31, ~~2021, the outstanding balance under the Repurchase Facility was $150.0 million.~~

On February 19, 2021, we amended our 10-year term loan facility to convert the entire $366.0 million aggregate principle amount outstanding thereunder into a revolving loan, which could be paid down and readvanced in an amount up to the referenced $366.0 million until February 19, 2022. ~~On February 19, 2022, the total advanced loan balance of $366.0 million reverted to a nonrevolving term loan that is payable on September 4, 2025.~~

The following table presents summarized long-term debt (including current portion) as of ~~May 31,~~November 30, 2022, and August 31, ~~2021:~~2022:


		May 31, 2022		August 31, 2021			November 30, 2022		August 31, 2022
		(Dollars in thousands)					(Dollars in thousands)
Private placement debt	Private placement debt	$	1,550,229	$	1,552,974	Private placement debt	$	1,545,000	$	1,545,000
Term loan	Term loan	366,000		—		Term loan	366,000		366,000
Finance lease obligations	Finance lease obligations	46,684		36,034		Finance lease obligations	45,069		44,773
Other notes and contracts payable		2,845		33,443
Deferred financing costs	Deferred financing costs	(3,671)		(4,090)		Deferred financing costs	(3,399)		(3,535)
Other						Other	5,376		6,576
Total long-term debt	Total long-term debt	1,962,087		1,618,361		Total long-term debt	1,958,046		1,958,814
Less current portion	Less current portion	161,308		38,450		Less current portion	289,888		290,605
Long-term portion	Long-term portion	$	1,800,779	$	1,579,911	Long-term portion	$	1,668,158	$	1,668,209

Interest expense for the three months ended ~~May 31,~~November 30, 2022 and 2021, was ~~$32.1~~$33.3 million and ~~$29.0~~$23.4 million, respectively, net of capitalized interest of ~~$0.9~~$2.5 million and ~~$3.9 million, respectively. Interest expense for the nine months ended May 31, 2022 and 2021, was $80.7 million and $82.9 million, respectively, net of capitalized interest of $4.7 million and $6.0~~$2.3 million, respectively.

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Note 7 Income Taxes

Our effective tax rate for the three months ended ~~May 31,~~November 30, 2022, was ~~9.8%~~4.2%, compared to ~~(6.8)%~~3.2% for the three months ended ~~May 31, 2021. Our effective tax rate for the nine months ended May 31, 2022, was 6.7%, compared to (3.4)% for the nine months ended May 31,~~November 30, 2021. Our income tax expense reflects the mix of full-year earnings projected across business units and current equity management assumptions. Income taxes and effective tax rates vary each year based on profitability and nonpatronage business activity during the year.

Our uncertain tax positions are affected by the tax years that are under audit or remain subject to examination by the relevant taxing authorities. Reserves are recorded against unrecognized tax benefits when we believe certain fully supportable tax return positions are likely to be challenged, and we may not prevail. If we were to prevail on all positions taken in relation to uncertain tax positions, ~~$114.6~~$115.3 million and ~~$114.3~~$115.1 million of the unrecognized tax benefits would ultimately benefit our effective tax rate as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, respectively. It is reasonably possible that the total amount of unrecognized tax benefits could significantly change in the next 12 months.

Note 8 Equities

Changes in Equities

Changes in equities for the ~~nine~~three months ended ~~May 31,~~November 30, 2022 and 2021, are as follows:

Equity Certificates Accumulated
Other
Comprehensive
Loss
Capital
Equity
Certificates Nonpatronage
Equity
Certificates Nonqualified Equity Certificates Preferred
Stock Capital
Reserves Noncontrolling
Interests Total
Equities
(Dollars in thousands)
Balances, August 31, 2021 $ 3,583,911 $ 28,431 $ 1,634,896 $ 2,264,038 $ (216,391) $ 1,713,976 $ 8,465 $ 9,017,326
Reversal of prior year redemption estimates 12,221 — — — — — — 12,221
Redemptions of equities (9,824) (318) (2,079) — — — — (12,221)
Preferred stock dividends — — — — — (84,334) — (84,334)
Other, net (1,023) 17 (64) — — 1,393 (841) (518)
Net income (loss) — — — — — 451,961 (18) 451,943
Other comprehensive loss, net of tax — — — — (15,418) — — (15,418)
Estimated 2022 cash patronage refunds — — — — — (39,691) — (39,691)
Estimated 2022 equity redemptions (79,382) — — — — — — (79,382)
Balances, November 30, 2021 3,505,903 28,130 1,632,753 2,264,038 (231,809) 2,043,305 7,606 9,249,926
Reversal of prior year patronage and redemption estimates 5,264 — (230,290) — — 260,120 — 35,094
Distribution of 2021 patronage refunds — — 231,371 — — (261,414) — (30,043)
Redemptions of equities (4,228) (20) (1,016) — — — — (5,264)
Preferred stock dividends — — — — — (42,167) — (42,167)
Other, net (5) — — — — 50 (599) (554)
Net income (loss) — — — — — 219,000 (104) 218,896
Other comprehensive income, net of tax — — — — 9,954 — — 9,954
Estimated 2022 cash patronage refunds — — — — — (22,466) — (22,466)
Estimated 2022 equity redemptions (44,932) — — — — — — (44,932)
Balances, February 28, 2022 3,462,002 28,110 1,632,818 2,264,038 (221,855) 2,196,428 6,903 9,368,444
Reversal of prior year patronage and redemption estimates 81,731 — — — — 20,170 — 101,901
Distribution of 2021 patronage refunds — — 4,205 — — (25,188) — (20,983)
Redemptions of equities (78,616) (90) (3,038) — — — — (81,744)
Other, net (2,228) (1) (6,809) — — 1,105 (295) (8,228)
Net income (loss) — — — — — 576,574 (329) 576,245
Other comprehensive loss, net of tax — — — — (18,221) — — (18,221)
Estimated 2022 cash patronage refunds — — — — — (58,745) — (58,745)
Estimated 2022 equity redemptions (117,491) — — — — — — (117,491)
Balances, May 31, 2022 $ 3,345,398 $ 28,019 $ 1,627,176 $ 2,264,038 $ (240,076) $ 2,710,344 $ 6,279 $ 9,741,178


	Equity Certificates								Accumulated Other Comprehensive Loss
	Capital Equity Certificates		Nonpatronage Equity Certificates		Nonqualified Equity Certificates		Preferred Stock				Capital Reserves		Noncontrolling Interests		Total Equities
	(Dollars in thousands)
Balances, August 31, 2022	$	3,587,131	$	27,933	$	1,776,172	$	2,264,038	$	(255,335)	$	2,055,682	$	5,645	$	9,461,266
Reversal of prior year redemption estimates	12,941		—		—		—		—		—		—		12,941

Redemptions of equities	(10,021)		(58)		(2,862)		—		—		—		—		(12,941)
Preferred stock dividends	—		—		—		—		—		(84,334)		—		(84,334)
Other, net	291		—		57		—		—		20		(25)		343
Net income	—		—		—		—		—		782,598		318		782,916
Other comprehensive loss, net of tax	—		—		—		—		(13,618)		—		—		(13,618)
Estimated 2023 cash patronage refunds	—		—		—		—		—		(208,864)		—		(208,864)
Estimated 2023 equity redemptions	(208,864)		—		—		—		—		—		—		(208,864)
Balances, November 30, 2022	$	3,381,478	$	27,875	$	1,773,367	$	2,264,038	$	(268,953)	$	2,545,102	$	5,938	$	9,728,845


	Equity Certificates								Accumulated Other Comprehensive Loss
	Capital Equity Certificates		Nonpatronage Equity Certificates		Nonqualified Equity Certificates		Preferred Stock				Capital Reserves		Noncontrolling Interests		Total Equities
	(Dollars in thousands)
Balances, August 31, 2021	$	3,583,911	$	28,431	$	1,634,896	$	2,264,038	$	(216,391)	$	1,713,976	$	8,465	$	9,017,326
Reversal of prior year redemption estimates	12,221		—		—		—		—		—		—		12,221

Redemptions of equities	(9,824)		(318)		(2,079)		—		—		—		—		(12,221)
Preferred stock dividends	—		—		—		—		—		(84,334)		—		(84,334)
Other, net	(1,023)		17		(64)		—		—		1,393		(841)		(518)
Net income (loss)	—		—		—		—		—		451,961		(18)		451,943
Other comprehensive loss, net of tax	—		—		—		—		(15,418)		—		—		(15,418)
Estimated 2022 cash patronage refunds	—		—		—		—		—		(39,691)		—		(39,691)
Estimated 2022 equity redemptions	(79,382)		—		—		—		—		—		—		(79,382)
Balances, November 30, 2021	$	3,505,903	$	28,130	$	1,632,753	$	2,264,038	$	(231,809)	$	2,043,305	$	7,606	$	9,249,926

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Equity Certificates Accumulated
Other
Comprehensive
Loss
Capital
Equity
Certificates Nonpatronage
Equity
Certificates Nonqualified Equity Certificates Preferred
Stock Capital
Reserves Noncontrolling
Interests Total
Equities
(Dollars in thousands)
Balances, August 31, 2020 $ 3,724,187 $ 28,727 $ 1,408,696 $ 2,264,038 $ (233,924) $ 1,618,147 $ 9,302 $ 8,819,173
Reversal of prior year redemption estimates 7,726 — — — — — — 7,726
Redemptions of equities (6,539) (31) (1,156) — — — — (7,726)
Preferred stock dividends — — — — — (84,334) — (84,334)
Other, net (654) (47) (197) — — (7,798) 35 (8,661)
Net income (loss) — — — — — 69,671 (302) 69,369
Other comprehensive income, net of tax — — — — 8,917 — — 8,917
Estimated 2021 cash patronage refunds — — — — — (9,304) — (9,304)
Estimated 2021 equity redemptions (9,304) — — — — — — (9,304)
Balances, November 30, 2020 3,715,416 28,649 1,407,343 2,264,038 (225,007) 1,586,382 9,035 8,785,856
Reversal of prior year patronage and redemption estimates 4,760 — (211,970) — — 233,345 — 26,135
Distribution of 2020 patronage refunds — — 214,720 — — (236,136) — (21,416)
Redemptions of equities (4,177) (35) (548) — — — — (4,760)
Preferred stock dividends — — — — — (42,167) — (42,167)
Other, net (26) — (15) — — 1,068 (361) 666
Net loss — — — — — (38,229) (129) (38,358)
Other comprehensive income, net of tax — — — — 2,549 — — 2,549
Estimated 2021 cash patronage refunds — — — — — 5,639 — 5,639
Estimated 2021 equity redemptions 5,639 — — — — — — 5,639
Balances, February 28, 2021 3,721,612 28,614 1,409,530 2,264,038 (222,458) 1,509,902 8,545 8,719,783
Reversal of prior year redemption estimates 15,514 — 5,000 — — 8,625 — 29,139
Distribution of 2020 patronage refunds — — 7 — — (8,632) — (8,625)
Redemptions of equities (19,275) (35) (6,013) — — — — (25,323)
Other, net (298) 43 58 — — (1,726) (61) (1,984)
Net income — — — — — 273,591 81 273,672
Other comprehensive income, net of tax — — — — 7,115 — — 7,115
Estimated 2021 cash patronage refunds — — — — — (21,292) — (21,292)
Estimated 2021 equity redemptions (21,292) — — — — — — (21,292)
Balances, May 31, 2021 $ 3,696,261 $ 28,622 $ 1,408,582 $ 2,264,038 $ (215,343) $ 1,760,468 $ 8,565 $ 8,951,193

Preferred Stock Dividends

The following is a summary of dividends declared per share by series of preferred stock for the ~~nine months ended May 31, 2022 and 2021. Due to the timing of dividend declarations during the fiscal year, no declarations were made during the~~ three months ended ~~May 31,~~November 30, 2022 and 2021.


			Nine Months Ended May 31,						Three Months Ended November 30,
		Nasdaq symbol		2022		2021			Nasdaq symbol	2022		2021
Series of preferred stock:	Series of preferred stock:			(Dollars per share)				Series of preferred stock:		(Dollars per share)
8% Cumulative Redeemable	8% Cumulative Redeemable	CHSCP		$	1.50	$	1.50	8% Cumulative Redeemable	CHSCP	$	1.00	$	1.00
Class B Cumulative Redeemable, Series 1	Class B Cumulative Redeemable, Series 1	CHSCO		$	1.48	$	1.48	Class B Cumulative Redeemable, Series 1	CHSCO	$	0.98	$	0.98
Class B Reset Rate Cumulative Redeemable, Series 2	Class B Reset Rate Cumulative Redeemable, Series 2	CHSCN		$	1.33	$	1.33	Class B Reset Rate Cumulative Redeemable, Series 2	CHSCN	$	0.88	$	0.88
Class B Reset Rate Cumulative Redeemable, Series 3	Class B Reset Rate Cumulative Redeemable, Series 3	CHSCM		$	1.27	$	1.27	Class B Reset Rate Cumulative Redeemable, Series 3	CHSCM	$	0.84	$	0.84
Class B Cumulative Redeemable, Series 4	Class B Cumulative Redeemable, Series 4	CHSCL		$	1.41	$	1.41	Class B Cumulative Redeemable, Series 4	CHSCL	$	0.94	$	0.94

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Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component ~~net of tax,~~ for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2022 and 2021, are as follows:


		Pension and Other Postretirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustment		Total			Pension and Other Postretirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustment		Total
		(Dollars in thousands)									(Dollars in thousands)
Balance as of August 31, 2021, net of tax		$	(141,385)	$	4,824	$	(79,830)	$	(216,391)
Balance as of August 31, 2022, net of tax										Balance as of August 31, 2022, net of tax	$	(168,640)	$	8,843	$	(95,538)	$	(255,335)
Other comprehensive income (loss), before tax:	Other comprehensive income (loss), before tax:									Other comprehensive income (loss), before tax:
Amounts before reclassifications	Amounts before reclassifications	(83)		870		(9,983)		(9,196)		Amounts before reclassifications	(66)		(33,899)		(2,227)		(36,192)
Amounts reclassified	Amounts reclassified	5,064		(12,954)		—		(7,890)		Amounts reclassified	5,560		7,229		—		12,789
Total other comprehensive income (loss), before tax	Total other comprehensive income (loss), before tax	4,981		(12,084)		(9,983)		(17,086)		Total other comprehensive income (loss), before tax	5,494		(26,670)		(2,227)		(23,403)
Tax effect	Tax effect	(1,213)		2,943		(62)		1,668		Tax effect	3,030		6,463		292		9,785
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	3,768		(9,141)		(10,045)		(15,418)		Other comprehensive income (loss), net of tax	8,524		(20,207)		(1,935)		(13,618)

Balance as of November 30, 2021, net of tax		(137,617)		(4,317)		(89,875)		(231,809)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		—		3,974		5,807		9,781
Amounts reclassified		6,056		(4,705)		—		1,351
Total other comprehensive income (loss), before tax		6,056		(731)		5,807		11,132
Tax effect		(1,475)		178		119		(1,178)
Other comprehensive income (loss), net of tax		4,581		(553)		5,926		9,954
Balance as of February 28, 2022, net of tax		(133,036)		(4,870)		(83,949)		(221,855)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		369		(39,169)		2,497		(36,303)
Amounts reclassified		5,560		5,782		—		11,342
Total other comprehensive income (loss), before tax		5,929		(33,387)		2,497		(24,961)
Tax effect		(1,444)		8,130		54		6,740
Other comprehensive income (loss), net of tax		4,485		(25,257)		2,551		(18,221)
Balance as of May 31, 2022, net of tax		$	(128,551)	$	(30,127)	$	(81,398)	$	(240,076)
Balance as of November 30, 2022, net of tax										Balance as of November 30, 2022, net of tax	$	(160,116)	$	(11,364)	$	(97,473)	$	(268,953)

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		Pension and Other Postretirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustment		Total			Pension and Other Postretirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustment		Total
		(Dollars in thousands)									(Dollars in thousands)
Balance as of August 31, 2020, net of tax		$	(159,680)	$	10,886	$	(85,130)	$	(233,924)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		(125)		14,506		3,629		18,010
Amounts reclassified		4,977		(12,284)		—		(7,307)
Total other comprehensive income, before tax		4,852		2,222		3,629		10,703
Tax effect		(1,207)		(553)		(26)		(1,786)
Other comprehensive income, net of tax		3,645		1,669		3,603		8,917
Balance as of November 30, 2020, net of tax		(156,035)		12,555		(81,527)		(225,007)
Balance as of August 31, 2021, net of tax										Balance as of August 31, 2021, net of tax	$	(141,385)	$	4,824	$	(79,830)	$	(216,391)
Other comprehensive income (loss), before tax:	Other comprehensive income (loss), before tax:									Other comprehensive income (loss), before tax:
Amounts before reclassifications	Amounts before reclassifications	—		2,929		(587)		2,342		Amounts before reclassifications	(83)		870		(9,983)		(9,196)
Amounts reclassified	Amounts reclassified	5,151		(3,673)		—		1,478		Amounts reclassified	5,064		(12,954)		—		(7,890)
Total other comprehensive income (loss), before tax	Total other comprehensive income (loss), before tax	5,151		(744)		(587)		3,820		Total other comprehensive income (loss), before tax	4,981		(12,084)		(9,983)		(17,086)
Tax effect	Tax effect	(1,282)		185		(174)		(1,271)		Tax effect	(1,213)		2,943		(62)		1,668
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	3,869		(559)		(761)		2,549		Other comprehensive income (loss), net of tax	3,768		(9,141)		(10,045)		(15,418)
Balance as of February 28, 2021, net of tax		(152,166)		11,996		(82,288)		(222,458)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		112		(4,725)		8,398		3,785
Amounts reclassified		5,064		(1,919)		—		3,145
Total other comprehensive income (loss), before tax		5,176		(6,644)		8,398		6,930
Tax effect		(1,288)		1,653		(180)		185
Other comprehensive income (loss), net of tax		3,888		(4,991)		8,218		7,115
Balance as of May 31, 2021, net of tax		$	(148,278)	$	7,005	$	(74,070)	$	(215,343)
Balance as of November 30, 2021, net of tax										Balance as of November 30, 2021, net of tax	$	(137,617)	$	(4,317)	$	(89,875)	$	(231,809)

Amounts reclassified from accumulated other comprehensive income (loss) were related to pension and other postretirement benefits, cash flow hedges and foreign currency translation adjustments. Pension and other postretirement reclassifications include amortization of net actuarial loss, prior service credit and transition amounts and are recorded as cost of goods sold and marketing, general and administrative expenses (see Note 9, Benefit Plans, for further information). ~~Gains or losses associated with cash flow hedges are recorded as cost of goods sold (see~~As described in Note 11, Derivative Financial Instruments and Hedging Activities, amounts reclassified from accumulated other comprehensive loss for ~~further information).~~cash flow hedges are recorded as cost of goods sold. Gains or losses on foreign currency translation reclassifications ~~related to sales of businesses~~ are recorded as other income.

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Note 9 Benefit Plans

We have various pension and other defined benefit and defined contribution plans, in which substantially all employees may participate. We also have nonqualified supplemental executive and Board of Directors retirement plans.

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Components of net periodic benefit costs for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2022 and 2021, are as follows:

Three Months Ended May 31,
Qualified
Pension Benefits Nonqualified
Pension Benefits Other Benefits
2022 2021 2022 2021 2022 2021
Components of net periodic benefit costs: (Dollars in thousands)
Service cost $ 11,569 $ 11,307 $ 232 $ 108 $ 249 $ 297
Interest cost 4,292 4,141 70 68 126 123
Expected return on assets (10,990) (10,910) — — — —
Prior service cost (credit) amortization 44 45 (29) (28) (111) (111)
Actuarial loss (gain) amortization 5,852 5,447 120 53 (315) (341)
Net periodic benefit cost (benefit) $ 10,767 $ 10,030 $ 393 $ 201 $ (51) $ (32)
Nine Months Ended May 31,
Qualified
Pension Benefits Nonqualified
Pension Benefits Other Benefits
2022 2021 2022 2021 2022 2021
Components of net periodic benefit costs: (Dollars in thousands)
Service cost $ 34,706 $ 33,921 $ 695 $ 325 $ 747 $ 890
Interest cost 12,875 12,422 211 205 377 369
Expected return on assets (32,969) (32,731) — — — —
Prior service cost (credit) amortization 131 134 (86) (85) (334) (334)
Actuarial loss (gain) amortization 17,555 16,342 359 159 (944) (1,024)
Net periodic benefit cost (benefit) $ 32,298 $ 30,088 $ 1,179 $ 604 $ (154) $ (99)

The service cost component of defined benefit net periodic benefit cost is recorded in cost of goods sold and marketing, general and administrative expenses. The other components of net periodic benefit cost are recorded in other income.


	Three Months Ended November 30,
	Qualified Pension Benefits				Nonqualified Pension Benefits				Other Benefits
	2022		2021		2022		2021		2022		2021
Components of net periodic benefit costs:	(Dollars in thousands)
Service cost	$	9,645	$	11,569	$	460	$	232	$	168	$	249
Interest cost	7,647		4,292		185		70		259		126
Expected return on assets	(10,782)		(10,990)		—		—		—		—
Prior service cost (credit) amortization	37		44		(29)		(29)		(111)		(111)
Actuarial loss (gain) amortization	468		5,852		61		120		(404)		(315)

Net periodic benefit cost (benefit)	$	7,015	$	10,767	$	677	$	393	$	(88)	$	(51)

Employer Contributions

~~Any contributions made during fiscal 2022 will~~Contributions depend primarily on market returns on the pension plan assets and minimum funding level requirements. No contributions were made to the pension plans during the ~~nine~~three months ended ~~May 31,~~November 30, 2022, and we do not currently anticipate being required to make contributions for our pension plans in fiscal ~~2022.~~2023, although we may voluntarily elect to do so.

Note 10 Segment Reporting

We are an integrated agricultural cooperative, providing grain, foods and energy resources to businesses and consumers on a global basis. We provide a wide variety of products and services, from initial agricultural inputs such as fuels, farm supplies, crop nutrients and crop protection products, to agricultural outputs that include grain and oilseed, processed grain and oilseed, renewable fuels and food products. We define our operating segments in accordance with ASC Topic 280, Segment Reporting, to reflect the manner in which our chief operating decision maker, our Chief Executive Officer, evaluates performance and allocates resources in managing the business. We have aggregated those operating segments into three reportable segments: Energy, Ag and Nitrogen Production.

Our Energy segment produces and provides primarily for the wholesale distribution of petroleum products and transportation of those products. Our Ag segment purchases and further processes or resells grain and oilseed originated by our country operations business, by our member cooperatives and by third parties; serves as a wholesaler and retailer of crop inputs; and produces and markets ethanol. Our Nitrogen Production segment consists of our equity method investment in CF Nitrogen and allocated expenses. Our supply agreement with CF Nitrogen entitles us to purchase up to a specified quantity of granular urea and urea ammonium nitrate ("UAN") annually from CF Nitrogen. Corporate and Other represents our financing and hedging businesses, which primarily consist of financial services related to crop production and a U.S. Commodity Futures Trading Commission-regulated futures commission merchant ("FCM") for commodities ~~hedging and financial services related to crop production.~~hedging. Our nonconsolidated investments in Ventura Foods, LLC ("Ventura Foods"), and Ardent Mills, LLC ("Ardent Mills"), are also included in our Corporate and Other category.

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Corporate administrative expenses and interest are allocated to each reportable segment and Corporate and Other, based on direct use of services, such as information technology and legal, and other factors or considerations relevant to the costs incurred.

Many of our business activities are highly seasonal and our operating results vary throughout the year. Our revenues generally trend lower during the second ~~and fourth~~ fiscal ~~quarters and higher during the first and third fiscal quarters;~~quarter; however, our income before income taxes does not necessarily follow the same trend due to weather and other events that can impact profitability. For example, in our Ag segment, our country operations business generally experiences higher volumes and revenues during the fall harvest and spring planting seasons, which generally correspond to our first and third fiscal quarters, respectively. Additionally, our agronomy business generally experiences higher volumes and revenues during the spring planting season. Our global grain and processing operations are subject to fluctuations in volume and revenues based on producer harvests, world grain prices, demand and international trade relationships. Our Energy segment generally experiences higher volumes and revenues in certain operating areas, such as

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refined products, in the spring, summer and early fall when gasoline and diesel fuel use by agricultural producers is highest and is subject to global supply and demand forces. Other energy products, such as propane, generally experience higher volumes and revenues during the winter heating and fall crop-drying seasons.

Our revenues, assets and cash flows can be significantly affected by global market prices for commodities such as petroleum products, natural gas, grain, oilseed, crop nutrients and flour. Changes in market prices for commodities that we purchase without a corresponding change in the selling prices of those products can affect revenues and operating earnings. Commodity prices are affected by a wide range of factors beyond our control, including weather, crop damage due to plant disease or insects, drought, availability and adequacy of supply, availability of reliable rail and river transportation networks, outbreaks of disease, government regulations and policies, global trade disputes, wars and civil unrest, and general political and economic conditions.

While our revenues and operating results are derived primarily from businesses and operations that are wholly-owned or subsidiaries and limited liability companies in which we have a controlling interest, a portion of our business operations ~~are~~is conducted through companies in which we hold ownership interests of 50% or less or otherwise do not control the operations. We account for these investments primarily using the equity method of accounting, wherein we record our proportionate share of income or loss reported by the entity as equity income from investments, without consolidating the revenues and expenses of the entity in our Condensed Consolidated Statements of Operations. In our Ag segment, this includes our 50% interest in TEMCO. In our Nitrogen Production segment, this consists of our approximate ~~10%~~8% membership interest (based on product tons) in CF Nitrogen. In Corporate and Other, this principally includes our 50% ownership in Ventura Foods and our 12% ownership in Ardent Mills. See Note 5, Investments, for more information ~~on these entities.~~related to our equity method investments.

Reconciling amounts represent the elimination of revenues between segments. Such transactions are executed at market prices to more accurately evaluate the profitability of the individual business segments.

Segment information for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2022 and 2021, is presented in the tables below:

Energy Ag Nitrogen Production Corporate
and Other Reconciling
Amounts Total
Three Months Ended May 31, 2022 (Dollars in thousands)
Revenues, including intersegment revenues $ 2,943,305 $ 10,359,992 $ — $ 11,215 $ (176,788) $ 13,137,724
Intersegment revenues (167,363) (7,623) — (1,802) 176,788 —
Revenues, net of intersegment revenues $ 2,775,942 $ 10,352,369 $ — $ 9,413 $ — $ 13,137,724
Operating earnings (loss) 164,016 256,817 (14,480) (5,232) — 401,121
Interest expense 2,182 18,581 12,263 (257) (670) 32,099
Other income (485) (10,221) (258) 3,658 670 (6,636)
Equity income from investments (922) (25,231) (204,697) (32,229) — (263,079)
Income before income taxes $ 163,241 $ 273,688 $ 178,212 $ 23,596 $ — $ 638,737

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Energy Ag Nitrogen Production Corporate
and Other Reconciling
Amounts Total
Three Months Ended May 31, 2021 (Dollars in thousands)
Revenues, including intersegment revenues $ 1,815,077 $ 9,222,597 $ — $ 10,842 $ (118,540) $ 10,929,976
Intersegment revenues (110,279) (6,393) — (1,868) 118,540 —
Revenues, net of intersegment revenues $ 1,704,798 $ 9,216,204 $ — $ 8,974 $ — $ 10,929,976
Operating earnings (loss) 2,955 134,606 (8,799) (837) — 127,925
Interest expense (333) 17,661 10,318 390 956 28,992
Other income (636) (6,331) (308) (2,517) (956) (10,748)
Equity income from investments (1,035) (16,855) (65,444) (63,188) — (146,522)
Income before income taxes $ 4,959 $ 140,131 $ 46,635 $ 64,478 $ — $ 256,203


		Energy		Ag		Nitrogen Production		Corporate and Other		Reconciling Amounts		Total			Energy		Ag		Nitrogen Production		Corporate and Other		Reconciling Amounts		Total
Nine Months Ended May 31, 2022		(Dollars in thousands)
Three Months Ended November 30, 2022														Three Months Ended November 30, 2022	(Dollars in thousands)
Revenues, including intersegment revenues														Revenues, including intersegment revenues	$	3,337,125	$	9,640,559	$	—	$	16,099	$	(227,944)	$	12,765,839
Intersegment revenues														Intersegment revenues	(217,819)		(7,315)		—		(2,810)		227,944		—
Revenues, net of intersegment revenues														Revenues, net of intersegment revenues	$	3,119,306	$	9,633,244	$	—	$	13,289	$	—	$	12,765,839
Operating earnings (loss)														Operating earnings (loss)	398,659		263,502		(16,272)		(1,420)		—		644,469
Interest expense														Interest expense	2,056		18,567		14,421		4,125		(5,919)		33,250
Other income														Other income	(3,523)		(19,302)		—		(7,383)		5,919		(24,289)
Equity (income) loss from investments														Equity (income) loss from investments	3,532		(23,062)		(127,566)		(34,866)		—		(181,962)
Income before income taxes														Income before income taxes	$	396,594	$	287,299	$	96,873	$	36,704	$	—	$	817,470
Total assets as of November 30, 2022														Total assets as of November 30, 2022	$	4,241,612	$	10,392,187	$	2,769,170	$	3,670,296	$	—	$	21,073,264

															Energy		Ag		Nitrogen Production		Corporate and Other		Reconciling Amounts		Total
Three Months Ended November 30, 2021														Three Months Ended November 30, 2021	(Dollars in thousands)
Revenues, including intersegment revenues	Revenues, including intersegment revenues	$	7,574,881	$	27,239,897	$	—	$	32,060	$	(495,769)	$	34,351,069	Revenues, including intersegment revenues	$	2,468,343	$	8,577,403	$	—	$	10,204	$	(175,193)	$	10,880,757
Intersegment revenues	Intersegment revenues	(466,953)		(22,338)		—		(6,478)		495,769		—		Intersegment revenues	(164,356)		(8,144)		—		(2,693)		175,193		—
Revenues, net of intersegment revenues	Revenues, net of intersegment revenues	$	7,107,928	$	27,217,559	$	—	$	25,582	$	—	$	34,351,069	Revenues, net of intersegment revenues	$	2,303,987	$	8,569,259	$	—	$	7,511	$	—	$	10,880,757
Operating earnings (loss)	Operating earnings (loss)	243,009		560,200		(35,525)		(26,916)		—		740,768		Operating earnings (loss)	67,850		259,773		(10,183)		(2,466)		—		314,974
Interest expense	Interest expense	4,568		45,466		34,770		(3,073)		(1,026)		80,705		Interest expense	488		13,661		11,254		(1,820)		(151)		23,432
Other income	Other income	(1,217)		(37,320)		(2,058)		7,752		1,026		(31,817)		Other income	(728)		(20,579)		(1,547)		(1,073)		151		(23,776)
Equity income from investments	Equity income from investments	(3,604)		(63,240)		(497,289)		(80,214)		—		(644,347)		Equity income from investments	(1,100)		(19,734)		(116,473)		(14,038)		—		(151,345)
Income before income taxes	Income before income taxes	$	243,262	$	615,294	$	429,052	$	48,619	$	—	$	1,336,227	Income before income taxes	$	69,190	$	286,425	$	96,583	$	14,465	$	—	$	466,663
Total assets as of May 31, 2022		$	4,357,274	$	9,556,610	$	2,930,538	$	3,864,621	$	—	$	20,709,043

		Energy		Ag		Nitrogen Production		Corporate and Other		Reconciling Amounts		Total
Nine Months Ended May 31, 2021		(Dollars in thousands)
Revenues, including intersegment revenues		$	4,643,387	$	23,615,087	$	—	$	38,370	$	(331,066)	$	27,965,778
Intersegment revenues		(308,584)		(15,269)		—		(7,213)		331,066		—
Revenues, net of intersegment revenues		$	4,334,803	$	23,599,818	$	—	$	31,157	$	—	$	27,965,778
Operating earnings (loss)		(120,879)		212,223		(24,661)		8,894		—		75,577
Interest expense		492		48,796		33,721		1,536		(1,648)		82,897
Other income		(2,108)		(29,784)		(2,175)		(8,800)		1,648		(41,219)
Equity income from investments		(2,355)		(43,974)		(118,477)		(95,848)		—		(260,654)
Income (loss) before income taxes		$	(116,908)	$	237,185	$	62,270	$	112,006	$	—	$	294,553

Note 11 Derivative Financial Instruments and Hedging Activities

We enter into various derivative instruments to manage our exposure to movements primarily associated with agricultural and energy commodity prices and, to a lesser degree, foreign currency exchange rates and interest rates. Except for certain cash-settled swaps related to future crude oil purchases and refined product sales, which are accounted for as cash flow hedges, our derivative instruments represent economic hedges of price risk for which hedge accounting under ASC Topic 815 is not applied. Rather, the derivative instruments are recorded on our Condensed Consolidated Balance Sheets at fair value with

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changes in fair value being recorded directly to earnings, primarily within cost of goods sold in our Condensed Consolidated Statements of Operations. See Note 12, Fair Value Measurements, for additional information. The majority of our exchange-traded agricultural commodity futures are settled daily through CHS Hedging, LLC, our wholly-owned FCM.

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Derivatives Not Designated as Hedging Instruments

The majority of our derivative instruments have not been designated as hedging instruments. The following tables present the gross fair values of derivative assets, derivative liabilities and margin deposits (cash collateral) recorded on our Condensed Consolidated Balance Sheets, along with related amounts permitted to be offset in accordance with U.S. GAAP. Although we have certain netting arrangements for our exchange-traded futures and options contracts and certain over-the-counter ("OTC") contracts, we have elected to report our derivative instruments on a gross basis on our Condensed Consolidated Balance Sheets under ASC Topic 210-20, Balance Sheet-Offsetting. The following tables present the gross fair values of derivative assets, derivative liabilities and margin deposits (cash collateral) recorded on our Condensed Consolidated Balance Sheets, along with related amounts permitted to be offset in accordance with U.S. GAAP:


		May 31, 2022									November 30, 2022
				Amounts Not Offset on Condensed Consolidated Balance Sheet but Eligible for Offsetting									Amounts Not Offset on Condensed Consolidated Balance Sheet but Eligible for Offsetting
		Gross Amount Recognized		Cash Collateral		Derivative Instruments		Net Amount			Gross Amount Recognized		Cash Collateral		Derivative Instruments		Net Amount
		(Dollars in thousands)									(Dollars in thousands)
Derivative Assets
Commodity derivatives		$	762,167	$	—	$	21,015	$	741,152
Foreign exchange derivatives		114,804		—		15,410		99,394
Embedded derivative asset		13,545		—		—		13,545
Total		$	890,516	$	—	$	36,425	$	854,091
Derivative Liabilities
Derivative assets										Derivative assets
Commodity derivatives	Commodity derivatives	$	609,663	$	239	$	22,590	$	586,834	Commodity derivatives	$	315,322	$	—	$	7,792	$	307,530
Foreign exchange derivatives	Foreign exchange derivatives	15,454		—		15,410		44		Foreign exchange derivatives	51,509		—		7,372		44,137

Total	Total	$	625,117	$	239	$	38,000	$	586,878	Total	$	366,831	$	—	$	15,164	$	351,667
Derivative liabilities										Derivative liabilities
Commodity derivatives										Commodity derivatives	$	225,676	$	1,442	$	9,865	$	214,369
Foreign exchange derivatives										Foreign exchange derivatives	13,937		—		7,372		6,565

Total										Total	$	239,613	$	1,442	$	17,237	$	220,934


		August 31, 2021									August 31, 2022
				Amounts Not Offset on Condensed Consolidated Balance Sheet but Eligible for Offsetting									Amounts Not Offset on Condensed Consolidated Balance Sheet but Eligible for Offsetting
		Gross Amount Recognized		Cash Collateral		Derivative Instruments		Net Amount			Gross Amount Recognized		Cash Collateral		Derivative Instruments		Net Amount
		(Dollars in thousands)									(Dollars in thousands)
Derivative Assets
Derivative assets										Derivative assets
Commodity derivatives	Commodity derivatives	$	532,832	$	—	$	4,174	$	528,658	Commodity derivatives	$	464,167	$	—	$	3,834	$	460,333
Foreign exchange derivatives	Foreign exchange derivatives	19,429		—		5,582		13,847		Foreign exchange derivatives	52,923		—		8,901		44,022
Embedded derivative asset		16,488		—		—		16,488

Total	Total	$	568,749	$	—	$	9,756	$	558,993	Total	$	517,090	$	—	$	12,735	$	504,355
Derivative Liabilities
Derivative liabilities										Derivative liabilities
Commodity derivatives	Commodity derivatives	$	444,861	$	2,485	$	4,174	$	438,202	Commodity derivatives	$	378,291	$	1,424	$	12,574	$	364,293
Foreign exchange derivatives	Foreign exchange derivatives	8,506		—		5,582		2,924		Foreign exchange derivatives	12,649		—		8,901		3,748
Total	Total	$	453,367	$	2,485	$	9,756	$	441,126	Total	$	390,940	$	1,424	$	21,475	$	368,041

Derivative assets and liabilities with maturities of 12 months or less are recorded in other current assets and other current liabilities, respectively, on our Condensed Consolidated Balance Sheets. Derivative assets and liabilities with maturities greater than 12 months are recorded in other assets and other liabilities, respectively, on our Condensed Consolidated Balance Sheets. The amount of long-term derivative assets recorded on our Condensed Consolidated Balance Sheets as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, was ~~$29.3~~$4.7 million and ~~$21.6~~$8.5 million, respectively. The amount of long-term derivative liabilities recorded on our Condensed Consolidated Balance Sheets as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, was ~~$3.6~~$2.4 million and ~~$4.8~~$4.0 million, respectively.

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~~The majority of our derivative instruments have not been designated as hedging instruments.~~ The following table sets forth the pretax gains (losses) on derivatives not accounted for as hedging instruments that have been included in our Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2022 and 2021:


			Three Months Ended May 31,				Nine Months Ended May 31,						Three Months Ended November 30,
		Location of Gain (Loss)	2022		2021		2022		2021			Location of Gain (Loss)	2022		2021
			(Dollars in thousands)										(Dollars in thousands)
Commodity derivatives	Commodity derivatives	Cost of goods sold	$	(324,965)	$	(552,985)	$	(905,400)	$	(945,631)	Commodity derivatives	Cost of goods sold	$	(135,686)	$	31,598
Foreign exchange derivatives	Foreign exchange derivatives	Cost of goods sold	18,147		35,567		58,438		27,327		Foreign exchange derivatives	Cost of goods sold	(19,453)		(32,494)
Foreign exchange derivatives	Foreign exchange derivatives	Marketing, general and administrative expenses	1,097		838		1,600		1,011		Foreign exchange derivatives	Marketing, general and administrative expenses	237		(1,194)
Embedded derivative		Other income	258		308		2,057		2,174
Other derivatives											Other derivatives	Other income	—		1,546
Total	Total		$	(305,463)	$	(516,272)	$	(843,305)	$	(915,119)	Total		$	(154,902)	$	(544)

Commodity Contracts

As of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, we had outstanding commodity futures and options contracts that were used as economic hedges, as well as fixed-price forward contracts related to physical purchases and sales of commodities. The table below presents the notional volumes for all outstanding commodity contracts:


		May 31, 2022		August 31, 2021			November 30, 2022		August 31, 2022
		Long	Short	Long	Short		Long	Short	Long	Short
		(Units in thousands)					(Units in thousands)
Grain and oilseed (bushels)	Grain and oilseed (bushels)	754,573	1,279,773	666,726	851,582	Grain and oilseed (bushels)	837,115	850,388	609,300	773,239
Energy products (barrels)	Energy products (barrels)	13,138	8,778	9,881	7,656	Energy products (barrels)	14,373	8,726	10,541	5,706
Processed grain and oilseed (tons)	Processed grain and oilseed (tons)	1,050	4,475	559	3,418	Processed grain and oilseed (tons)	3,334	6,396	1,191	4,182
Crop nutrients (tons)	Crop nutrients (tons)	74	3	66	12	Crop nutrients (tons)	59	33	23	22
Ocean freight (metric tons)	Ocean freight (metric tons)	45	—	210	—	Ocean freight (metric tons)	15	—	60	—

Natural gas (metric million Btu)						Natural gas (metric million Btu)	630	200	420	—

Foreign Exchange Contracts

We conduct a substantial portion of our business in U.S. dollars, but we are exposed to risks relating to foreign currency fluctuations, primarily due to global grain marketing transactions in South America, the Asia Pacific region and Europe, and purchases of products from Canada. We use foreign currency derivative instruments to mitigate the impact of exchange rate fluctuations. Although we have some risk exposure ~~related~~relating to foreign currency transactions, a larger impact with exchange rate fluctuations is the ability of foreign buyers to purchase U.S. agricultural products and the competitiveness of U.S. agricultural products compared to the same products offered by alternative sources of world supply. The notional amount of our foreign exchange derivative contracts was ~~$1.9~~$1.6 billion and ~~$1.2~~$1.9 billion as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, respectively.

~~Embedded Derivative Asset~~

Under the terms of our strategic investment in CF Nitrogen, if the credit rating of CF Industries is reduced below certain levels by two of three specified credit ratings agencies, we are entitled to receive a nonrefundable annual payment of $5.0 million from CF Industries. These payments will continue on an annual basis until the date that the credit rating of CF Industries is upgraded to above certain levels by two of the three specified credit ratings agencies or February 1, 2026, whichever is earlier.

Since the credit rating of CF Industries was reduced below the specified levels during fiscal 2017, we have received an annual payment of $5.0 million from CF Industries. Gains totaling $2.1 million and $2.2 million were recognized in other income in our Condensed Consolidated Statements of Operations for the nine months ended May 31, 2022 and 2021, respectively. The fair value of the embedded derivative asset recorded on our Condensed Consolidated Balance Sheets as of May 31, 2022, was equal to $13.5 million. The current and long-term portions of the embedded derivative asset are included in other current assets and other assets on our Condensed Consolidated Balance Sheets, respectively. See Note 12, ~~Fair Value Measurements, for additional information regarding valuation of the embedded derivative asset.~~

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Derivatives Designated as Cash Flow Hedging Strategies

Certain pay-fixed, receive-variable, cash-settled swaps are designated as cash flow hedges of future crude oil purchases in our Energy segment. We also designate certain pay-variable, receive-fixed, cash-settled swaps as cash flow hedges of future refined energy product sales. These hedging instruments and the related hedged items are exposed to significant market price risk and potential volatility. As part of our risk management strategy, we look to hedge a portion of our expected future crude oil needs and the resulting refined product output based on prevailing futures prices, management's expectations about future commodity price changes and our risk appetite. We may also elect to dedesignate certain derivative instruments previously designated as cash flow hedges as part of our risk management strategy. Amounts recorded in other comprehensive income for these dedesignated derivative instruments remain in other comprehensive income and are recognized in earnings in the period in which the underlying transactions affect earnings. As of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, the aggregate notional amounts of cash flow hedges were ~~6.1~~3.1 million and ~~2.7~~3.8 million barrels, respectively.

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The following table presents the fair value of our commodity derivative instruments designated as cash flow hedges and the ~~line items~~locations on our Condensed Consolidated Balance Sheets in which they are recorded:

Derivative Assets

Derivative Liabilities

Derivative Assets

Derivative Liabilities

Balance Sheet Location

May 31,
2022

August 31,
2021

Balance Sheet Location

May 31,
2022

August 31,
2021

Balance Sheet Location

November 30,
2022

August 31,
2022

Balance Sheet Location

November 30,
2022

August 31,
2022

(Dollars in thousands)

Other current assets

19,596

11,874

Other current liabilities

54,150

1,001

Other current assets

12,312

27,154

Other current liabilities

26,565

11,818

The following table presents the pretax losses recorded in other comprehensive income relating to cash flow hedges for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2022 and 2021:

Three Months Ended May 31, Nine Months Ended May 31,
2022 2021 2022 2021
(Dollars in thousands)
Commodity derivatives $ (36,688) $ (7,590) $ (51,961) $ (7,700)


	Three Months Ended November 30,
	2022		2021
	(Dollars in thousands)
Commodity derivatives	$	(29,589)	$	(13,296)

The following table presents the pretax (losses) gains relating to our existing cash flow hedges that were reclassified from accumulated other comprehensive loss into our Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2022 and 2021:

Three Months Ended May 31, Nine Months Ended May 31,
Location of Gain 2022 2021 2022 2021
(Dollars in thousands)
Commodity derivatives Cost of goods sold $ (5,482) $ 2,329 $ 12,777 $ 19,084


		Three Months Ended November 30,
	Location of Gain (Loss)	2022		2021
		(Dollars in thousands)
Commodity derivatives	Cost of goods sold	$	(6,929)	$	13,254

Note 12 Fair Value Measurements

ASC Topic 820, Fair Value Measurement, defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction ~~between~~among the market participants on the measurement date.

We determine fair values of derivative instruments and certain other assets based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize ~~the~~ use of observable inputs and minimize ~~the~~ use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. ASC Topic 820 describes three levels within its hierarchy that may be used to measure fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 inputs are unobservable inputs that are supported by little or no market activity for the assets or liabilities. Categorization within the valuation hierarchy is based on the lowest level of input significant to the fair value measurement.

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Recurring fair value measurements as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, are as follows:


		May 31, 2022									November 30, 2022
		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
		(Dollars in thousands)									(Dollars in thousands)
Assets	Assets									Assets
Commodity derivatives	Commodity derivatives	$	1,790	$	779,973	$	—	$	781,763	Commodity derivatives	$	702	$	326,932	$	—	$	327,634
Foreign exchange derivatives	Foreign exchange derivatives	—		114,804		—		114,804		Foreign exchange derivatives	—		51,509		—		51,509

Deferred compensation assets	Deferred compensation assets	47,435		—		—		47,435		Deferred compensation assets	48,430		—		—		48,430

Embedded derivative asset		—		13,545		—		13,545

Segregated investments and marketable securities	Segregated investments and marketable securities	319,551		—		—		319,551		Segregated investments and marketable securities	207,521		—		—		207,521
Other assets	Other assets	5,965		—		—		5,965		Other assets	85,457		—		—		85,457
Total	Total	$	374,741	$	908,322	$	—	$	1,283,063	Total	$	342,110	$	378,441	$	—	$	720,551
Liabilities	Liabilities									Liabilities
Commodity derivatives	Commodity derivatives	$	3,678	$	660,134	$	—	$	663,812	Commodity derivatives	$	2,894	$	249,347	$	—	$	252,241
Foreign exchange derivatives	Foreign exchange derivatives	—		15,454		—		15,454		Foreign exchange derivatives	—		13,937		—		13,937

Total	Total	$	3,678	$	675,588	$	—	$	679,266	Total	$	2,894	$	263,284	$	—	$	266,178


		August 31, 2021									August 31, 2022
		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
		(Dollars in thousands)									(Dollars in thousands)
Assets	Assets									Assets
Commodity derivatives	Commodity derivatives	$	2,453	$	542,253	$	—	$	544,706	Commodity derivatives	$	1,161	$	490,160	$	—	$	491,321
Foreign exchange derivatives	Foreign exchange derivatives	—		19,429		—		19,429		Foreign exchange derivatives	—		52,923		—		52,923

Deferred compensation assets	Deferred compensation assets	51,940		—		—		51,940		Deferred compensation assets	46,562		—		—		46,562

Embedded derivative asset		—		16,488		—		16,488

Segregated investments and marketable securities	Segregated investments and marketable securities	99,837		—		—		99,837		Segregated investments and marketable securities	238,124		—		—		238,124
Other assets	Other assets	6,052		—		—		6,052		Other assets	11,718		—		—		11,718
Total	Total	$	160,282	$	578,170	$	—	$	738,452	Total	$	297,565	$	543,083	$	—	$	840,648
Liabilities	Liabilities									Liabilities
Commodity derivatives	Commodity derivatives	$	1,615	$	444,247	$	—	$	445,862	Commodity derivatives	$	10,256	$	379,883	$	—	$	390,139
Foreign exchange derivatives	Foreign exchange derivatives	—		8,506		—		8,506		Foreign exchange derivatives	—		12,649		—		12,649

Total	Total	$	1,615	$	452,753	$	—	$	454,368	Total	$	10,256	$	392,532	$	—	$	402,788

Commodity and foreign exchange derivatives. Exchange-traded futures and options contracts are valued based on unadjusted quoted prices in active markets and are classified within Level 1. Our forward commodity purchase and sales contracts with fixed-price components, select ocean freight contracts and other OTC derivatives are determined using inputs that are generally based on ~~exchange-traded~~exchange traded prices and/or recent market bids and offers, including location-specific adjustments, and are classified within Level 2. Location-specific inputs are driven by local market supply and demand and are generally based on broker or dealer quotations or market transactions in either listed or OTC markets. Changes in the fair values of these contracts are recognized in our Condensed Consolidated Statements of Operations as a component of cost of goods sold.

Deferred compensation ~~andother~~ assets. Our deferred compensation investments consist primarily of rabbi trust assets that are valued based on unadjusted quoted prices on active exchanges and are classified within Level 1. Changes in the fair values of these ~~other~~ assets are primarily recognized in our Condensed Consolidated Statements of Operations as a component of marketing, general and administrative expenses.

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~~Embedded derivative asset~~. The embedded derivative asset relates to contingent payments inherent to our investment in CF Nitrogen. The inputs used in the fair value measurement include the probability of future upgrades and downgrades of the credit rating of CF Industries based on historical credit rating movements of other public companies and the discount rates applied to potential annual payments based on applicable historical and current yield coupon rates. Based on these observable inputs, our fair value measurement is classified within Level 2. See Note 11, ~~Derivative Financial Instruments and Hedging Activities,~~ ~~for additional information.~~

Segregated investments and marketable ~~securities.~~securities and other assets. Our segregated investments and marketable securities and other assets are comprised primarily of investments in various government agencies, ~~and~~ U.S. Treasury securities and money market funds, which are valued using quoted market prices and classified within Level 1.

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Note 13 Commitments and Contingencies

Environmental

We are required to comply with various environmental laws and regulations incidental to our normal business operations. To meet our compliance requirements, we establish reserves for future costs of remediation associated with identified issues that are both probable and can be reasonably estimated. Estimates of environmental costs are based on current available facts, existing technology, undiscounted site-specific costs and currently enacted laws and regulations and are included in cost of goods sold and marketing, general and administrative expenses in our Condensed Consolidated Statements of Operations. Recoveries, if any, are recorded in the period in which recovery is received. Liabilities are monitored and adjusted as new facts or changes in law or technology occur. The resolution of any such matters may affect consolidated net income for any fiscal period; however, we currently believe any resulting liabilities, individually or in aggregate, will not have a material effect on our consolidated financial position, results of operations or cash flows during any fiscal year.

Other Litigation and Claims

We are involved as a defendant in various lawsuits, claims and disputes, which are in the normal course of our business. The resolution of any such matters may affect consolidated net income for any fiscal period; however, we currently believe any resulting liabilities, individually or in aggregate, will not have a material effect on our consolidated financial position, results of operations or cash flows during any fiscal year.

Guarantees

We are a guarantor for lines of credit and performance obligations of related, nonconsolidated companies. Our bank covenants allow maximum guarantees of $1.0 billion, of which ~~$213.0~~$116.0 million were outstanding on ~~May 31,~~November 30, 2022. We have collateral for a portion of these contingent obligations. We have not recorded a liability related to the contingent obligations as we do not expect to pay out any cash related to them, and the fair values are considered immaterial. The underlying loans to the counterparties for which we provide these guarantees were current as of ~~May 31,~~November 30, 2022.

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Note 14 Other Current Assets and Liabilities

Other current assets and liabilities as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, are as follows:


		May 31, 2022		August 31, 2021			November 30, 2022		August 31, 2022
Other current assets	Other current assets	(Dollars in thousands)				Other current assets	(Dollars in thousands)
Derivative assets (Note 11)	Derivative assets (Note 11)	$	880,836	$	559,056	Derivative assets (Note 11)	$	374,489	$	535,698
Margin and related deposits	Margin and related deposits	425,943		336,397		Margin and related deposits	318,807		390,782
Supplier advance payments	Supplier advance payments	386,174		194,706		Supplier advance payments	521,504		198,753
Restricted cash	Restricted cash	170,837		129,325		Restricted cash	107,648		109,517
Other	Other	197,685		170,749		Other	159,144		147,954
Total other current assets	Total other current assets	$	2,061,475	$	1,390,233	Total other current assets	$	1,481,592	$	1,382,704
Other current liabilities	Other current liabilities					Other current liabilities
Customer margin deposits and credit balances	Customer margin deposits and credit balances	$	383,743	$	269,114	Customer margin deposits and credit balances	$	231,471	$	283,234
Customer advance payments	Customer advance payments	771,540		439,293		Customer advance payments	628,995		525,003
Derivative liabilities (Note 11)	Derivative liabilities (Note 11)	675,708		449,522		Derivative liabilities (Note 11)	263,781		398,781
Dividends and equity payable	Dividends and equity payable	363,491		150,000		Dividends and equity payable	1,029,227		1,000,000
Total other current liabilities	Total other current liabilities	$	2,194,482	$	1,307,929	Total other current liabilities	$	2,153,474	$	2,207,018

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of our condensed consolidated financial statements with a narrative from the perspective of our management regarding our financial condition and results of operations, liquidity and certain other factors that may affect our future results. Our MD&A is presented in the following sections:

•Overview

•Business Strategy

•Fiscal ~~2022 Third~~2023 First Quarter Highlights

•Fiscal ~~2022~~2023 Trends Update

•Operating Metrics

•Results of Operations

•Liquidity and Capital Resources

•Critical Accounting Policies

•Recent Accounting Pronouncements

Our MD&A should be read in conjunction with our Annual Report on Form 10-K for the year ended August 31, ~~2021~~2022 (including the information presented therein under Risk Factors), as well as the condensed consolidated financial statements and the related notes included in Item 1 of Part I ~~and the risk factors included in Item 1A of Part II~~ of this Quarterly Report on Form 10-Q.

Overview

CHS Inc. ("CHS") is a diversified company that provides grain, food, agronomy and energy resources to businesses and consumers on a global scale. As a cooperative, we are owned by farmers, ranchers and member cooperatives across the United States. We also have preferred shareholders who own our five series of preferred stock, all of which are listed and traded on the Global Select Market of The Nasdaq Stock Market LLC. We operate in the following three reportable segments:

•Energy. Produces and provides primarily for the wholesale distribution and transportation of petroleum products.

•Ag. Purchases and further processes or resells grain and oilseed originated by our country operations ~~business,~~and global grain and processing businesses, by our member cooperatives and by third ~~parties,~~parties. It also includes our renewable fuels business and ~~also~~ serves as a wholesaler and retailer of agronomy products.

•Nitrogen Production. Produces and distributes nitrogen fertilizer. It consists of our equity method investment in CF Industries Nitrogen, LLC ("CF Nitrogen"), and allocated expenses.

In addition, our financing and hedging businesses, along with our nonconsolidated food production and distribution and wheat milling joint ventures, have been aggregated within our Corporate and ~~Other.~~Other category.

The condensed consolidated financial statements include the accounts of CHS and all subsidiaries and limited liability companies in which we have a controlling interest. The effects of all significant intercompany transactions have been eliminated.

Corporate administrative expenses and interest are allocated to each reporting segment and Corporate and Other, based on direct use of services, such as information technology and legal, and other factors or considerations relevant to the costs incurred.

Management's Focus. When evaluating our operating performance, management focuses on gross profit and income before income taxes ("IBIT"). As a company that operates heavily in global commodities, there is significant unpredictability and volatility in pricing, costs and global trade volumes. Consequently, we focus on managing the margin we can earn and the resulting IBIT. ~~Management~~We also ~~focuses~~focus on ensuring balance sheet strength through appropriate management of financial liquidity, leverage, capital allocation and cash flow optimization.

Seasonality. Many of our business activities are highly seasonal and our operating results vary throughout the year. Our revenues generally trend lower during the second ~~and fourth~~ fiscal ~~quarters and higher during the first and third fiscal quarters;~~quarter; however, our IBIT does not necessarily follow the same trend due to weather and other events that can impact profitability. For example, in our Ag segment, our country operations business generally experiences higher volumes and revenues during the fall harvest and spring planting seasons, which generally correspond to our first and third fiscal quarters, respectively. Additionally, our agronomy business generally experiences higher volumes and revenues during the spring planting season. Our global grain and processing operations are

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~~planting season. Our global grain and processing operations are~~ subject to fluctuations in ~~volume~~volumes and revenues based on producer harvests, world grain prices, demand and international trade relationships. Our Energy segment generally experiences higher volumes and revenues in certain operating areas, such as refined products, in the spring, summer and early fall when gasoline and diesel fuel use by agricultural producers is highest and is subject to global supply and demand forces. Other energy products, such as propane, generally experience higher volumes and revenues during the winter heating and fall crop-drying seasons. The graphs below depict the seasonality inherent in our businesses:

*The COVID-19 pandemic started during the second quarter of fiscal 2020.

Pricing and Volumes. Our revenues, assets and cash flows can be significantly affected by global market prices and sales volumes of commodities such as petroleum products, natural gas, grain, oilseed products and agronomy products. Changes in market prices for commodities we purchase without a corresponding change in the selling prices of those products can affect revenues and operating earnings. Similarly, increased or decreased sales volumes without a corresponding change in the purchase and selling prices of those products can affect revenues and operating earnings. Commodity prices and sales volumes are affected by a wide range of factors beyond our control, including weather, crop damage due to plant disease or insects, drought, availability/adequacy of supply of a commodity, availability of reliable rail and river transportation networks, disease outbreaks, ~~of disease,~~ government regulations and policies, global trade disputes, wars and civil unrest, and general political and/or economic conditions.

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Business Strategy

Our business strategies focus on an enterprisewide effort to create an experience that empowers customers to make CHS their first choice, expand market access to add value for our owners and transform and evolve our core businesses by capitalizing on changing market dynamics. To execute these strategies, we are focused on implementing agile, efficient and

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sustainable ~~new~~ technology platforms; building robust and efficient supply chains; hiring, developing and retaining high-performing, diverse and passionate teams; achieving operational excellence and continuous improvement; and maintaining a strong balance sheet.

Fiscal ~~2022 Third~~2023 First Quarter Highlights

•~~Robust~~Continued robust global demand, coupled with increased market volatility, resulted in ~~higher~~elevated commodity prices and ~~improved~~strong earnings.

•~~Our processing and wholesale agronomy product categories~~Higher refining margins drove significantly improved earnings in our ~~Ag segment.~~

•~~Higher refining margins in our~~ Energy segment that resulted from supply and demand factors, including trade flow disruptions caused by the Russian invasion of Ukraine and higher global demand for energy products as consumption outpaced supply.

•Our processing business in our Ag segment benefited from strong meal and oil demand.

•Equity method investments continue to perform well, ~~and represent a significant portion of our earnings~~ with our CF Nitrogen investment being the largest contributor. The CF Nitrogen investment delivered improved earnings as a result of market conditions driven by strong global demand for urea and urea ammonium nitrate ("UAN").

Fiscal ~~2022~~2023 Trends Update

Our ~~Energy and Ag~~ segments operate in cyclical environments in which ~~unforeseen~~ market conditions can ~~have~~change rapidly with significant positive or negative ~~impacts. For example, we have experienced~~impacts on our results. We anticipate that various macroeconomic factors, including the ongoing war between Russia and ~~anticipate continued effects~~Ukraine, rising interest rates, and inflationary pressures increasing costs of ~~inflation on costs such as~~ labor, freight and ~~materials. In response~~materials, will continue to global inflationary pressures, the U.S. Federal Reserve and other foreign equivalents have started raising interest rates, which has resulted in uncertainty and volatility in global financial markets. Additionally, the Russian invasion of Ukraine in February 2022 has resulted in significantdrive uncertainty and instability in global ~~commodities~~energy and agricultural commodity markets, including agricultural commodities and crude oil. Ukraine is a key international grain originating country in which we operate. Our operations in Ukraine have been dramatically disrupted because of the war and some of our Ukrainian employees have been forced to relocate to other countries and within Ukraine, with many unable to perform all or some work duties. The ongoing war could cause harm to our employees and otherwise impair their ability to work for extended periods of time, as well as ~~disrupt telecommunications systems, banks~~global financial markets. This uncertainty and ~~other critical infrastructure necessary~~instability could have a significant impact on each of our segments throughout the remainder of fiscal 2023. In addition to ~~conduct business in Ukraine. Although we do not have significant fixed assets or infrastructure in Ukraine, we~~these broad macroeconomic factors, the cost of renewable energy credits remains higher than historical levels, which could continue to ~~have grain inventory in various facilities in Ukraine. As a result of the war~~negatively impact our profitability, and ~~related export bans that were put in place by the Ukrainian government in March 2022,~~regional factors, such as unpredictable weather conditions, including those due to climate change, could impact demand for agricultural inputs and outputs, as well as our ability to ~~access grain inventories~~supply those inputs and outputs. Although challenges remain, we currently expect the imbalance between global supply and strong global demand for agricultural commodities to result in ~~Ukraine has been limited~~continued market volatility and ~~has resulted in an impairment of a portion of those grain inventories. We were able to sell limited amounts of Ukrainian inventory during~~favorable pricing throughout the ~~third quarter~~remainder of fiscal ~~2022, which reduced our inventory position~~2023. We are unable to ~~approximately $22.5 million as of May 31, 2022. Refer to Item 1A of Part II of this Quarterly Report on Form 10-Q for additional considerations~~predict how long the current environment and market conditions will last or the extent of the ~~risks this war may continue~~financial and operational impacts to ~~have on our business operations and financial performance.~~

We continue to navigate the lingering effects of COVID-19. Most of the measures taken to mitigate the spread of COVID-19 have been eased; however, additional variants, the effectiveness of vaccines and other efforts to respond to COVID-19us in ~~the United States and globally could continue to impact the profitability of our businesses and/or the need to assess for potential impairments.~~fiscal 2023. Refer to Item 1A of our Annual Report on Form 10-K for the year ended August 31, ~~2021,~~2022, for additional ~~considerations of~~impacts that these and other risks ~~COVID-19~~ may ~~continue to~~ have on our business ~~liquidity, capital resources~~operations and financial ~~results.~~

The energy industry continues to experience improved crack spreads and maintain higher volumes compared to the lows experienced during the early stages of the COVID-19 pandemic, which began in the second quarter of fiscal 2020 and significantly reduced our profitability in fiscal 2021. At the same time, the cost of renewable energy credits remains higher than historical levels, which continued to negatively impact our profitability during the third quarter of fiscal 2022. Russia's invasion of Ukraine has also resulted in significant volatility in crude oil prices as sanctions have limited crude oil supply in global markets and disrupted trade flows for energy products. We are unable to predict how long the current environment will last or the severity of the financial and operational impacts; however, we expect uncertainty and volatility to continue in the energy industry for the remainder of fiscal 2022, which could significantly impact our earnings.

Although challenges remain, the U.S. agricultural industry has experienced continued strong demand for grain and oilseed commodities, which has resulted in improved commodity prices. In addition, due to decreased global supply and strong global demand for fertilizer and related products, the current improved profitability could continue in our Ag and Nitrogen Production segments through the remainder of fiscal 2022 until supply becomes more balanced with the current strong demand. However, unforeseen global market conditions can positively or negatively impact agricultural commodity prices and volumes sold. We are unable to predict these conditions or the severity of the impact such conditions could have on our pricing and volumes. In addition to global supply and demand impacts, regional factors such as unpredictable weather conditions, including those due to climate change, could impact our operations. For example, unfavorable weather events and conditions experienced in fiscal 2021, including the effects of Hurricane Ida on our grain export terminal in Myrtle Grove, Louisiana, and drought

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conditions experienced in portions of our trade territory, have negatively impacted our revenues, margins and cash flows from core operations during fiscal 2022. As with others in our industry, we are seeing significantly higher freight costs that are the result of inflation and logistical challenges in the shipping industry, and we expect these challenges to continue for the remainder of fiscal 2022. Additionally, unforeseen global market conditions with negative impacts remain a risk that could put pressure on asset valuations in our Ag segment.performance.

In addition to navigating market conditions that impact our businesses, we will continue to ~~take actions in an effort to protect our financial health during fiscal 2022, while continuing to deliver on~~execute our enterprise ~~resource planning system implementation~~priorities throughout fiscal 2023, including empowering and supporting our people, advancing our operating ~~model.~~model by transforming how we work and adopting new technologies, and strategically investing in our infrastructure to meet the evolving needs of our owners and customers, enhancing value for the cooperative system and propelling sustainable growth.

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Operating Metrics

Energy

Our Energy segment operations primarily include our refineries in Laurel, Montana, and McPherson, Kansas, which process crude oil to produce refined products, including gasoline, distillates and other products. To ensure the reliability of our refineries, we perform major maintenance activities every two to five years, which require a temporary shutdown of operations. These planned shutdowns allow us to extend the life, increase the capacity and improve the safety and efficiency of our refinery processing assets. They also minimize unplanned business interruptions and are essential to the long-term reliability and profitability of our Energy segment.

During periods of maintenance, utilization rates, throughput volumes and refined fuel yields are lower and we may purchase refined petroleum products from third parties to meet the needs of our customers. These third-party purchases may result in lower margins than for products produced by our refineries, which reduces our profitability. The following table provides information about our consolidated refinery operations:


		Three Months Ended May 31,		Nine Months Ended May 31,			Three Months Ended November 30,
		2022	2021	2022	2021		2022	2021
Refinery throughput volumes	Refinery throughput volumes	(Barrels per day)				Refinery throughput volumes	(Barrels per day)
Heavy, high-sulfur crude oil	Heavy, high-sulfur crude oil	106,658	94,854	104,090	94,758	Heavy, high-sulfur crude oil	89,415	102,340
All other crude oil	All other crude oil	72,915	69,156	72,359	61,893	All other crude oil	71,271	70,327
Other feedstocks and blendstocks	Other feedstocks and blendstocks	11,436	12,917	14,007	13,496	Other feedstocks and blendstocks	10,708	18,338
Total refinery throughput volumes	Total refinery throughput volumes	191,009	176,927	190,456	170,147	Total refinery throughput volumes	171,394	191,005
Refined fuel yields	Refined fuel yields					Refined fuel yields
Gasolines	Gasolines	87,174	89,297	89,602	83,723	Gasolines	76,014	92,886
Distillates	Distillates	85,078	65,841	82,396	66,859	Distillates	75,393	78,924

We are subject to the Renewable Fuel Standard, which requires refiners to blend renewable fuels (e.g., ethanol and biodiesel) into their finished transportation fuels or purchase renewable energy credits, known as renewable identification numbers ("RINs"), in lieu of blending. The U.S. Environmental Protection Agency ("EPA") generally establishes new annual renewable fuel percentage standards for each compliance year in the preceding year. In June 2022, the EPA issued a final renewable volume obligation ("RVO") for calendar years 2020 through 2022. The RVO for calendar year 2020 is lower than was previously issued, and the RVO for calendar year 2021 is lower than anticipated as a result of lower demand for refined fuels that occurred during calendar year 2021 due to the COVID-19 pandemic. We generate RINs through our blending activities, but we cannot generate enough RINs to meet the needs of our refining capacity, and RINs must be purchased on the open market. The price of RINs can be volatile, which can positively or negatively impact our profitability. The prices for D6 ethanol RINs and D4 ethanol RINs during the ~~third~~first quarter of fiscal ~~2022~~2023 compared to the same period ofin the prior year ~~decreased by 2% and~~ increased by ~~15%~~42% and 25%, respectively. Estimates of our RIN ~~expense~~expenses are calculated using an average RIN price each month.

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In addition to our internal operational reliability, the profitability of our Energy segment is largely driven by crack spreads (i.e., the price differential between refined products and inputs such as crude oil) and Western Canadian Select ("WCS") crude oil discounts (i.e., the price discount for WCS crude oil relative to West Texas Intermediate ("WTI") crude oil), which are driven by the supply and demand of refined products. Crack spreads and the WCS crude oil discounts both increased during the three ~~and nine~~ months ended ~~May 31,~~November 30, 2022, ~~and 2021,~~ compared to the same period during the prior year, contributing to improved IBIT for the Energy segment. The table below provides information about average market reference prices and discounts that impact our Energy segment:


		Three Months Ended May 31,				Nine Months Ended May 31,					Three Months Ended November 30,
		2022		2021		2022		2021			2022		2021
Market indicators	Market indicators									Market indicators
WTI crude oil (dollars per barrel)	WTI crude oil (dollars per barrel)	$	106.39	$	63.07	$	88.54	$	52.00	WTI crude oil (dollars per barrel)	$	85.15	$	77.14
WTI - WCS crude oil discount (dollars per barrel)	WTI - WCS crude oil discount (dollars per barrel)	$	12.98	$	11.00	$	14.03	$	10.90	WTI - WCS crude oil discount (dollars per barrel)	$	25.16	$	12.95
Group 3 2:1:1 crack spread (dollars per barrel)*	Group 3 2:1:1 crack spread (dollars per barrel)*	$	38.86	$	20.27	$	24.93	$	13.49	Group 3 2:1:1 crack spread (dollars per barrel)*	$	44.76	$	18.04
Group 3 5:3:2 crack spread (dollars per barrel)*	Group 3 5:3:2 crack spread (dollars per barrel)*	$	36.30	$	20.38	$	23.70	$	13.28	Group 3 5:3:2 crack spread (dollars per barrel)*	$	40.40	$	17.56
D6 ethanol RIN (dollars per RIN)	D6 ethanol RIN (dollars per RIN)	$	1.3176	$	1.3496	$	1.1995	$	0.9242	D6 ethanol RIN (dollars per RIN)	$	1.6733	$	1.1760
D4 ethanol RIN (dollars per RIN)	D4 ethanol RIN (dollars per RIN)	$	1.6443	$	1.4342	$	1.5175	$	1.0928	D4 ethanol RIN (dollars per RIN)	$	1.8259	$	1.4648

*Group 3 refers to the oil refining and distribution system serving Midwest markets from the Gulf Coast through the Plains states.

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Our Ag segment operations work together to facilitate production, purchase, sale and eventual use of grain and other agricultural commodities within the United States and internationally. Profitability in our Ag segment is largely driven by throughput and production volumes, as well as commodity price spreads; however, revenues and cost of goods sold ("COGS") are largely affected by market-driven commodity prices that are outside our control. The table below provides information about average market prices for agricultural commodities and our sales/throughput volumes that impacted our Ag segment for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2022 and 2021:


			Three Months Ended May 31,				Nine Months Ended May 31,						Three Months Ended November 30,
		Market Source*	2022		2021		2022		2021			Market Source*	2022		2021
Commodity prices	Commodity prices										Commodity prices
Corn (dollars per bushel)	Corn (dollars per bushel)	Chicago Board of Trade	$	7.74	$	6.54	$	6.34	$	5.27	Corn (dollars per bushel)	Chicago Board of Trade	$	6.77	$	5.57
Soybeans (dollars per bushel)	Soybeans (dollars per bushel)	Chicago Board of Trade	$	16.70	$	15.13	$	14.18	$	13.20	Soybeans (dollars per bushel)	Chicago Board of Trade	$	14.14	$	12.36
Wheat (dollars per bushel)	Wheat (dollars per bushel)	Chicago Board of Trade	$	10.46	$	6.75	$	8.74	$	6.38	Wheat (dollars per bushel)	Chicago Board of Trade	$	8.58	$	7.57
Urea (dollars per ton)	Urea (dollars per ton)	Green Markets NOLA	$	745.00	$	376.00	$	688.00	$	298.00	Urea (dollars per ton)	Green Markets NOLA	$	589.27	$	676.00
Urea ammonium nitrate (dollars per ton)	Urea ammonium nitrate (dollars per ton)	Green Markets NOLA	$	615.04	$	295.68	$	539.52	$	189.76	Urea ammonium nitrate (dollars per ton)	Green Markets NOLA	$	540.16	$	456.64
Ethanol (dollars per gallon)	Ethanol (dollars per gallon)	Chicago Platts	$	2.62	$	2.16	$	2.62	$	1.72	Ethanol (dollars per gallon)	Chicago Platts	$	2.50	$	2.81

Volumes	Volumes										Volumes
Grain and oilseed (thousands of bushels)	Grain and oilseed (thousands of bushels)		575,827		685,761		1,674,894		2,099,623		Grain and oilseed (thousands of bushels)		517,439		564,112
North American grain and oilseed port throughput (thousands of bushels)	North American grain and oilseed port throughput (thousands of bushels)		176,773		199,246		536,695		736,612		North American grain and oilseed port throughput (thousands of bushels)		161,715		172,987
Wholesale crop nutrients (thousands of tons)	Wholesale crop nutrients (thousands of tons)		1,750		2,857		4,949		6,265		Wholesale crop nutrients (thousands of tons)		1,612		1,823
Ethanol (thousands of gallons)	Ethanol (thousands of gallons)		234,679		221,125		687,280		660,043		Ethanol (thousands of gallons)		243,761		224,246

*Market source information represents the average month-end price during the period.

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Results of Operations

Three Months Ended ~~May 31,~~November 30, 2022 and 2021


		Three Months Ended May 31,									Three Months Ended November 30,
		2022		% of Revenues*		2021		% of Revenues*			2022		% of Revenues*		2021		% of Revenues*
		(Dollars in thousands)									(Dollars in thousands)
Revenues	Revenues	$	13,137,724	100.0	%	$	10,929,976	100.0	%	Revenues	$	12,765,839	100.0	%	$	10,880,757	100.0	%
Cost of goods sold	Cost of goods sold	12,493,467		95.1		10,615,348		97.1		Cost of goods sold	11,886,704		93.1		10,360,849		95.2
Gross profit	Gross profit	644,257		4.9		314,628		2.9		Gross profit	879,135		6.9		519,908		4.8
Marketing, general and administrative expenses	Marketing, general and administrative expenses	243,136		1.9		186,703		1.7		Marketing, general and administrative expenses	234,666		1.8		204,934		1.9
Operating earnings	Operating earnings	401,121		3.1		127,925		1.2		Operating earnings	644,469		5.0		314,974		2.9

Interest expense	Interest expense	32,099		0.2		28,992		0.3		Interest expense	33,250		0.3		23,432		0.2
Other income	Other income	(6,636)		(0.1)		(10,748)		(0.1)		Other income	(24,289)		(0.2)		(23,776)		(0.2)
Equity income from investments	Equity income from investments	(263,079)		(2.0)		(146,522)		(1.3)		Equity income from investments	(181,962)		(1.4)		(151,345)		(1.4)
Income before income taxes	Income before income taxes	638,737		4.9		256,203		2.3		Income before income taxes	817,470		6.4		466,663		4.3
Income tax expense (benefit)		62,492		0.5		(17,469)		(0.2)
Income tax expense										Income tax expense	34,554		0.3		14,720		0.1
Net income	Net income	576,245		4.4		273,672		2.5		Net income	782,916		6.1		451,943		4.2
Net income (loss) attributable to noncontrolling interests	Net income (loss) attributable to noncontrolling interests	(329)		—		81		—		Net income (loss) attributable to noncontrolling interests	318		—		(18)		—
Net income attributable to CHS Inc.	Net income attributable to CHS Inc.	$	576,574	4.4	%	$	273,591	2.5	%	Net income attributable to CHS Inc.	$	782,598	6.1	%	$	451,961	4.2	%

*Amounts less than 0.1% are shown as zero percent. Percentage totals may differ due to rounding.

The charts below detail revenues, net of intersegment revenues, and IBIT by reportable segment for the three months ended ~~May 31,~~November 30, 2022. Our Nitrogen Production reportable segment represents an equity method investment that records earnings and allocated expenses but not revenues.

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Income Before Income Taxes by Segment

Energy

Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Income before income taxes $ 163,241 $ 4,959 $ 158,282 3,191.8 %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Income before income taxes	$	396,594	$	69,190	$	327,404	473.2	%

The following waterfall analysis and commentary presents the changes in our Energy segment IBIT for the three months ended ~~May 31,~~November 30, 2022, compared to the same period during the prior year:

*See commentary related to these changes in the marketing, general and administrative expenses, interest expense, other income and equity income from investments sections of this Results of Operations.

The change in Energy segment IBIT reflects the following:

•Higher crack spreads and increased WCS crude oil discounts ~~reflect~~resulted from higher global demand and improved market conditions in our refined fuels business, which contributed to a ~~$283.6~~$477.3 million increase of IBIT.

•~~Increased margins due to higher crack spreads and WCS crude oil discounts were~~The increased IBIT was partially offset by ~~hedging-related losses and other~~ increased costs in our refined fuels business, ~~including~~the most significant of which included $46.0 million related to higher RIN ~~and natural gas~~ prices due to market ~~conditions.~~conditions and $23.0 million of increased refinery expenses, including higher repairs and maintenance expenses resulting from planned and unplanned maintenance in the current year.

•~~Increased margins were also partially offset by reduced volumes of~~Decreased refined fuels ~~that resulted from a later~~production volumes due to planned and ~~more compressed planting season~~unplanned maintenance at refineries reduced the sales mix of higher-margin produced refined fuels compared to the prior ~~year.~~year and also contributed to a $27.0 million decrease of IBIT.

•

Lower margins for propane primarily resulted from hedging-related impacts due to global market conditions affecting the price of propane contributed to a $21.0 million decrease of IBIT.

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Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Income before income taxes $ 273,688 $ 140,131 $ 133,557 95.3 %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Income before income taxes	$	287,299	$	286,425	$	874	0.3	%

The following waterfall analysis and commentary presents the changes in our Ag segment IBIT for the three months ended ~~May 31,~~November 30, 2022, compared to the same period during the prior year:

The change in Ag segment IBIT reflects the following:

•Increased margins of ~~$130.7~~$68.4 million in our oilseed processing product category resulted from strong meal and oil demand during the ~~third~~first quarter of fiscal ~~2022 and $70.4 million in our wholesale agronomy product category resulted from global market conditions and global supply disruptions during the third quarter of fiscal 2022.~~2023.

•Increased ~~oilseed processing and wholesale agronomy~~ margins were partially offset by the net impact across our other product categories, including decreased margins for ~~our feed and farm supplies and~~ grain and oilseed ~~product categories, which declined~~ as a result of mark-to-market changes associated with our commodity derivatives and wholesale agronomy which experienced less favorable pricing ~~and~~due to global market conditions.

•Decreased volumes across all our Ag segment product categories resulted from a number of factors, including drought conditions ~~respectively.~~experienced in portions of our trade territory that decreased crop yields.

All Other Segments


		Three Months Ended May 31,				Change					Three Months Ended November 30,				Change
		2022		2021		Dollars		Percent			2022		2021		Dollars		Percent
		(Dollars in thousands)									(Dollars in thousands)
Nitrogen Production IBIT*	Nitrogen Production IBIT*	$	178,212	$	46,635	$	131,577	282.1	%	Nitrogen Production IBIT*	$	96,873	$	96,583	$	290	0.3	%
Corporate and Other IBIT	Corporate and Other IBIT	$	23,596	$	64,478	$	(40,882)	(63.4)	%	Corporate and Other IBIT	$	36,704	$	14,465	$	22,239	153.7	%

*For additional information, see Note 5, Investments, of the notes to the unaudited condensed consolidated financial statements that are included in this Quarterly Report on Form 10-Q.

Our Nitrogen Production segment IBIT ~~increased~~remained consistent with the prior year as a result of continued higher equity income attributed to ~~increased sale~~strong selling prices of urea and UAN ~~which was partially offset by increased natural gas costs.~~due to global supply and demand factors. Corporate and Other IBIT ~~decreased~~increased primarily due to ~~higher performance-based incentive compensation accruals associated with improved financial results compared to the prior year and decreased~~increased equity ~~earnings~~income from our Ventura Foods, LLC, investment as a result of more favorable market conditions for edible oils experienced during the first quarter of fiscal 2023 compared to the same period in the prior ~~year as COVID-19 restrictions began to ease.~~year.

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Revenues by Segment

Energy

Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Revenues $ 2,775,942 $ 1,704,798 $ 1,071,144 62.8 %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Revenues	$	3,119,306	$	2,303,987	$	815,319	35.4	%

The following waterfall analysis and commentary presents the changes in our Energy segment revenues for the three months ended ~~May 31,~~November 30, 2022, compared to the same period during the prior year:

The change in Energy segment revenues reflects the following:

•~~Increased selling prices resulting from global~~Global market conditions contributed to ~~a $1.0 billion increase in revenues~~increased selling prices for refined fuels ~~and~~that contributed to a ~~$78.6~~$770.1 million increase in revenues, which was partially offset by lower selling prices for ~~propane.~~propane that resulted in a $46.5 million decrease of revenues.

•~~Lower~~Higher refined fuels and propane volumes contributed to ~~a $42.9~~$49.4 million ~~decrease~~and $22.8 million increases in revenues, respectively, driven by ~~lower~~strong demand due to ~~a later and~~ more ~~compressed planting season~~favorable weather conditions during the fall harvest compared to the same period ofin the prior ~~year, which was partially offset by increased volumes of propane.~~year.

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Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Revenues $ 10,352,369 $ 9,216,204 $ 1,136,165 12.3 %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Revenues	$	9,633,244	$	8,569,259	$	1,063,985	12.4	%

The following waterfall analysis and commentary presents the changes in our Ag segment revenues for the three months ended ~~May 31,~~November 30, 2022, compared to the same period during the prior year:

The change in Ag segment revenues reflects the following:

•Higher pricing attributed to market-driven price increases across most of our Ag segment product categories during the ~~third~~first quarter of fiscal ~~2022,~~2023, including:

◦$~~1.3~~1.4 billion increase for grain and oilseed driven by increased global ~~demand;~~demand and constrained supply;

◦$~~771.7~~305.1 million increase for ~~wholesale agronomy products resulting from~~feed and farm supplies as a result of continued strong ~~global market~~ demand and ~~global supply disruptions;~~constrained supply;

◦$~~142.1~~102.1 million increase for oilseed processing due to strong meal and oil demand; and

◦$~~113.8~~84.6 million increase for renewable fuels resulting from high demand.

•~~Decreased volumes~~Volumes decreased across most of ~~grain and oilseed contributed~~our Ag segment product categories due to ~~a $969.1 million decrease in revenues. The decreased volumes resulted from~~ a combination of factors, including ~~the comparable period of the prior year experiencing elevated volumes following the Phase One trade agreement with China, which have since plateaued, and~~ lower crop yields ~~due to~~resulting from drought conditions experienced in portions of our trade territory in North America.

•~~The~~ Decreased volumes in our grain and oilseed, ~~volume decrease was partially offset by the net impact of volumes across most of our other Ag segment product categories, including increased volumes of~~ feed and farm supplies, ~~during the spring planting season, increased volumes of processed oilseed~~wholesale agronomy and renewable fuels ~~resulting from global market conditions~~product categories contributed to $304.7 million, $215.8 million, $147.7 million and ~~decreased volumes of wholesale agronomy products due to less favorable weather conditions during the spring planting and application season of fiscal 2022 compared to the prior year.~~$110.0 million decreases in revenues, respectively.

All Other Segments

Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Corporate and Other revenues* $ 9,413 $ 8,974 $ 439 4.9 %

*Our Nitrogen Production reportable segment represents an equity method investment that records earnings and allocated expenses but not revenues.

~~There were no significant changes to revenues in Corporate and Other during the three months ended May 31, 2022, compared to the same period during the prior year.~~

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~~Cost of Goods Sold by Segment~~

~~Energy~~

Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Cost of goods sold $ 2,533,135 $ 1,649,905 $ 883,230 53.5 %

~~The following waterfall analysis and commentary presents the changes in our Energy segment COGS for the three months ended May 31, 2022, compared to the same period during the prior year:~~

~~The change in Energy segment COGS reflects the following:~~

•~~Increased costs for refined fuels contributed to a $834.7 million increase in COGS driven by global market conditions.~~

•~~Higher costs for propane as a result of global market conditions and reversal of unrealized hedging-related gains from the prior fiscal year resulted in a $65.9 million increase of COGS.~~

•Lower volumes of refined fuels contributed to a $41.6 million decrease in COGS driven by lower demand due to a later and more compressed planting season compared to the same period of the prior year, which was partially offset by increased volumes of propane.

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Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Cost of goods sold $ 9,960,631 $ 8,967,297 $ 993,334 11.1 %

~~The following waterfall analysis and commentary presents the changes in our Ag segment COGS for the three months ended May 31, 2022, compared to the same period during the prior year:~~

~~The change in Ag segment COGS reflects the following:~~

•~~Higher costs attributed to market-driven price increases across most of our Ag segment product categories during the third quarter of fiscal 2022, including:~~

◦~~$1.3 billion increase for grain and oilseed driven by increased global demand;~~

◦~~$701.3 million increase for wholesale agronomy products resulting from strong global market demand and global supply disruptions; and~~

◦~~$115.3 million increase for renewable fuels resulting from high demand driving higher prices.~~

•Decreased volumes of grain and oilseed contributed to a $963.6 million decrease in COGS. The decreased volumes resulted from a combination of factors, including the comparable period of the prior year experiencing elevated volumes following the Phase One trade agreement with China, which have since plateaued, and lower crop yields due to drought conditions experienced in portions of our trade territory in North America.

•The grain and oilseed volume decrease was partially offset by the net impact of volumes across most of our other Ag segment product categories, including increased volumes of feed and farm supplies during the spring planting season, increased volumes of processed oilseed and renewable fuels resulting from global market conditions and decreased volumes of wholesale agronomy products due to less favorable weather conditions during the spring planting and application season of fiscal 2022 compared to the prior year.

~~All Other Segments~~

Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Nitrogen Production COGS $ 428 $ 425 $ 3 0.7%
Corporate and Other COGS $ (727) $ (2,279) $ 1,552 68.1%

~~There were no significant changes to COGS in our Nitrogen Production segment or Corporate and Other during the three months ended May 31, 2022, compared to the same period during the prior year.~~

~~Table of Contents~~

~~Marketing, General and Administrative Expenses~~

Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Marketing, general and administrative expenses $ 243,136 $ 186,703 $ 56,433 30.2 %

Marketing, general and administrative expenses increased during the three months ended May 31, 2022, primarily due to higher performance-based incentive compensation accruals driven by improved financial results in comparison to the prior year, as well as increased external consulting expenses for projects such as our enterprise resource planning system implementation and strategic adjustments to our operating model.

~~Interest Expense~~

Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Interest expense $ 32,099 $ 28,992 $ 3,107 10.7 %

~~Interest expense increased during the three months ended May 31, 2022, as a result of higher interest rates compared to the same period of the prior year.~~

~~Other Income~~

Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Other income $ 6,636 $ 10,748 $ (4,112) (38.3) %

~~Other income decreased during the three months ended May 31, 2022, primarily due to investment gains during the third quarter of the prior year that did not reoccur during the current year.~~

~~Equity Income from Investments~~

Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Equity income from investments* $ 263,079 $ 146,522 $ 116,557 79.5 %

*For additional information, see Note 5, Investments, of the notes to the condensed consolidated financial statements that are included in this Quarterly Report on Form 10-Q.

Equity income from investments increased during the three months ended May 31, 2022, compared to the same period during the prior year, primarily due to higher income associated with our equity method investment in CF Nitrogen. CF Nitrogen experienced increased sale prices of urea and UAN due to strong global demand and decreased global supply.

~~Income Tax Expense (Benefit)~~

Three Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Income tax expense (benefit) $ 62,492 $ (17,469) $ 79,961 457.7 %

Increased income tax expense during the three months ended May 31, 2022, resulted from increased earnings during the third quarter of fiscal 2022. Effective tax rates for the three months ended May 31, 2022 and 2021, were 9.8% and (6.8)%, respectively. Federal and state statutory rates applied to nonpatronage business activity were 24.4% and 24.9% for the three months ended May 31, 2022 and 2021, respectively. Income taxes and effective tax rates vary each year based on profitability, nonpatronage business activity and current equity management assumptions.

~~Table of Contents~~

~~Nine Months Ended May 31, 2022 and 2021~~

Nine Months Ended May 31,
2022 % of Revenues* 2021 % of Revenues*
(Dollars in thousands)
Revenues $ 34,351,069 100.0 % $ 27,965,778 100.0 %
Cost of goods sold 32,917,906 95.8 27,371,326 97.9
Gross profit 1,433,163 4.2 594,452 2.1
Marketing, general and administrative expenses 692,395 2.0 518,875 1.9
Operating earnings 740,768 2.2 75,577 0.3
Interest expense 80,705 0.2 82,897 0.3
Other income (31,817) (0.1) (41,219) (0.1)
Equity income from investments (644,347) (1.9) (260,654) (0.9)
Income before income taxes 1,336,227 3.9 294,553 1.1
Income tax expense (benefit) 89,143 0.3 (10,130) —
Net income 1,247,084 3.6 304,683 1.1
Net loss attributable to noncontrolling interests (451) — (350) —
Net income attributable to CHS Inc. $ 1,247,535 3.6 % $ 305,033 1.1 %

*Amounts less than 0.1% are shown as zero percent. Percentage totals may differ due to rounding.

The charts below detail revenues, net of intersegment revenues, and IBIT by reportable segment for the nine months ended May 31, 2022. Our Nitrogen Production reportable segment represents an equity method investment that records earnings and allocated expenses but not revenues.

~~Table of Contents~~

~~Income (Loss) Before Income Taxes by Segment~~

~~Energy~~

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Income (loss) before income taxes $ 243,262 $ (116,908) $ 360,170 308.1 %

~~The following waterfall analysis and commentary presents the changes in our Energy segment IBIT for the nine months ended May 31, 2022, compared to the same period during the prior year:~~

~~The change in Energy segment IBIT reflects the following:~~

•~~Higher crack spreads and increased WCS crude oil discounts reflect improved market conditions in our refined fuels business and contributed to a $557.9 million increase of IBIT.~~

•Increased margins due to higher crack spreads and WCS crude oil discounts were partially offset by hedging-related losses and other increased costs for refined fuels, including higher RIN and natural gas prices due to market conditions.

•~~Lower propane margins resulting from the reversal of unrealized hedging-related gains from the prior year during fiscal 2022 also partially offset the improved earnings in our refined fuels business.~~

~~Table of Contents~~

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Income before income taxes $ 615,294 $ 237,185 $ 378,109 159.4 %

~~The following waterfall analysis and commentary presents the changes in our Ag segment IBIT for the nine months ended May 31, 2022, compared to the same period during the prior year:~~

~~The change in Ag segment IBIT reflects the following:~~

•~~Increased margins across all our Ag segment product categories, including:~~

◦~~$208.2 million increase for oilseed processing as a result of strong meal and oil demand;~~

◦~~$171.7 million increase for wholesale agronomy products, which resulted from strong global market demand and global supply disruptions;~~

◦~~$72.0 million increase for feed and farm supplies due to strong demand and global supply disruptions; and~~

◦~~$55.2 million increase for grain and oilseed that resulted primarily from mark-to-market changes associated with our commodity derivatives, including lower unrealized losses.~~

•Decreased volumes due to supply chain constraints, less crop-drying activity and less favorable weather conditions during the planting and application season during fiscal 2022 resulted in a $84.5 million decrease for feed and farm supplies.

•The remaining volume decrease related primarily to grain and oilseed, which resulted from a combination of factors, including the comparable period of the prior year experiencing elevated volumes following the Phase One trade agreement with China, which have since plateaued; lower crop yields due to drought conditions experienced in portions of our trade territory; and the impact of Hurricane Ida on our grain export terminal in Myrtle Grove, Louisiana, during the first quarter of fiscal 2022.

~~Table of Contents~~

~~All Other Segments~~

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Nitrogen Production IBIT* $ 429,052 $ 62,270 $ 366,782 589.0 %
Corporate and Other IBIT $ 48,619 $ 112,006 $ (63,387) (56.6) %

*For additional information, see Note 5, Investments, of the notes to the unaudited condensed consolidated financial statements that are included in this Quarterly Report on Form 10-Q.

Our Nitrogen Production segment IBIT increased as a result of higher equity income attributed to increased sale prices of urea and UAN, which was partially offset by higher natural gas costs. Corporate and Other IBIT decreased primarily due to higher performance-based incentive compensation accruals associated with improved results in comparison to the prior year.

~~Revenues by Segment~~

~~Energy~~

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Revenues $ 7,107,928 $ 4,334,803 $ 2,773,125 64.0 %

~~The following waterfall analysis and commentary presents the changes in our Energy segment revenues for the nine months ended May 31, 2022, compared to the same period during the prior year:~~

~~The change in Energy segment revenues reflects the following:~~

•~~Increased selling prices for refined fuels due to global market conditions contributed to $2.4 billion greater revenues.~~

•~~Increased selling prices for propane as a result of global market conditions during the nine months ended May 31, 2022, also positively impacted revenues by $351.5 million.~~

~~Table of Contents~~

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Revenues $ 27,217,559 $ 23,599,818 $ 3,617,741 15.3 %

~~The following waterfall analysis and commentary presents the changes in our Ag segment revenues for the nine months ended May 31, 2022, compared to the same period during the prior year:~~

~~The change in Ag segment revenues reflects the following:~~

•~~Higher pricing attributed to market-driven price increases across all of our Ag segment product categories, including:~~

◦~~$3.8 billion increase in revenues for grain and oilseed driven by increased global demand;~~

◦~~$2.0 billion increase for wholesale agronomy products resulting from strong global market demand and global supply disruptions;~~

◦~~$986.9 million increase for feed and farm supplies due to strong demand and constrained supply;~~

◦~~$654.4 million increase for renewable fuels resulting from high demand driving higher prices; and~~

◦~~$448.1 million increase for oilseed processing due to strong meal and oil demand.~~

•Lower volumes of grain and oilseed contributed to a $3.5 billion decrease in revenues. The decreased volumes resulted from a combination of factors, including the comparable period of the prior year experiencing elevated volumes following the Phase One trade agreement with China, which have since plateaued; a business model change at our TEMCO, LLC ("TEMCO"), equity method investment during the second quarter of fiscal 2021 that resulted in reduced revenues and COGS during the current period on certain transactions associated with TEMCO; lower crop yields due to drought conditions experienced in portions of our North American trade territory; and the impact of Hurricane Ida on our grain export terminal in Myrtle Grove, Louisiana, during the first quarter of fiscal 2022.

•The remaining volume decrease was experienced across most of our other Ag segment product categories, including a $591.7 million decrease for feed and farm supplies due to supply chain constraints, less crop-drying activity and less favorable weather conditions during the spring planting and application season compared to the prior year.

~~All Other Segments~~

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Corporate and Other revenues* $ 25,582 $ 31,157 $ (5,575) (17.9) %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Corporate and Other revenues*	$	13,289	$	7,511	$	5,778	76.9	%

*Our Nitrogen Production reportable segment represents an equity method investment that records earnings and allocated expenses but not revenues.

Corporate and Other revenues ~~decreased~~increased during the ~~nine~~three months ended ~~May 31,~~November 30, 2022, compared to the same period during the prior year, primarily as a result of ~~decreased revenues~~increased notes receivable balances and higher interest rates in our ~~hedging business due to lower commissions from hedging activities.~~financing business.

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Cost of Goods Sold by Segment

Energy

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Cost of goods sold $ 6,665,612 $ 4,310,992 $ 2,354,620 54.6 %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Cost of goods sold	$	2,654,729	$	2,179,625	$	475,104	21.8	%

The following waterfall analysis and commentary presents the changes in our Energy segment COGS for the ~~nine~~three months ended ~~May 31,~~November 30, 2022, compared to the same period during the prior year:

The change in Energy segment COGS reflects the following:

•~~Increased~~Global market conditions contributed to increased costs for refined fuels ~~resulting from global market conditions contributed to $1.9 billion~~that drove a $415.3 million increase in COGS, which was partially offset by lower costs for propane that resulted in a $25.5 million decrease of COGS.

•Higher ~~costs for~~volumes of refined fuels and propane ~~as a result of global market~~contributed to $46.3 million and $24.3 million increases in COGS, respectively, driven by more favorable weather conditions ~~and unrealized hedging-related losses resulted~~during the fall harvest compared to the same period in ~~a $361.8 million increase in COGS.~~

the prior year.

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Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Cost of goods sold $ 26,256,104 $ 23,068,732 $ 3,187,372 13.8 %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Cost of goods sold	$	9,232,728	$	8,183,993	$	1,048,735	12.8	%

The following waterfall analysis and commentary presents the changes in our Ag segment COGS for the ~~nine~~three months ended ~~May 31,~~November 30, 2022, compared to the same period during the prior year:

The change in Ag segment COGS reflects the following:

•Higher costs attributed to market-driven price increases across ~~all~~most of our Ag segment product categories during the first quarter of fiscal 2023, including:

◦$~~3.7~~1.4 billion increase for grain and oilseed driven by increased global ~~demand;~~demand and constrained supply;

◦$~~1.9 billion increase for wholesale agronomy products resulting from strong global market demand and global supply disruptions;~~

◦~~$914.9~~216.3 million increase for feed and farm supplies due to continued strong demand and constrained supply;

◦$~~617.3~~84.1 million increase for renewable fuels resulting from high demand ~~driving~~that drove higher prices; and

◦$~~239.9~~33.7 million increase for oilseed processing due to strong meal and oil demand.

•~~Lower volumes of grain and oilseed contributed~~Volumes decreased across all our Ag segment product categories due to ~~a $3.4 billion decrease in COGS. The decreased volumes resulted from~~ a combination of factors, including the comparable period of the prior year experiencing elevated volumes following the Phase One trade agreement with China, which has since plateaued; a business model change at our TEMCO equity method investment during the second quarter of fiscal 2021 that resulted in reduced revenues and COGS during the current period on certain transactions associated with TEMCO; lower crop yields ~~due to~~resulting from drought conditions experienced in portions of our trade territory in North ~~American trade territory; and the impact of Hurricane Ida on~~America. Decreased volumes in our grain ~~export terminal in Myrtle Grove, Louisiana, during the first quarter of fiscal 2022.~~

•~~The remaining volume decrease was experienced across most of our other Ag segment product categories, including a $507.1 million decrease for~~and oilseed, feed and farm supplies, ~~due~~wholesale agronomy and renewable fuels product categories contributed to ~~supply chain constraints, less crop-drying activity~~$296.0 million, $198.1 million, $135.3 million and ~~timing differences associated with earlier spring demand during the prior year.~~$107.3 million decreases in COGS, respectively.

All Other Segments


		Nine Months Ended May 31,				Change				Three Months Ended November 30,				Change
		2022		2021		Dollars		Percent		2022		2021		Dollars		Percent
		(Dollars in thousands)								(Dollars in thousands)
Nitrogen Production COGS	Nitrogen Production COGS	$	1,256	$	1,268	$	(12)	(0.9)%	Nitrogen Production COGS	$	428	$	414	$	14	3.4%
Corporate and Other COGS	Corporate and Other COGS	$	(5,066)	$	(9,666)	$	4,600	47.6%	Corporate and Other COGS	$	(1,181)	$	(3,183)	$	2,002	62.9%

There were no significant changes to COGS in our Nitrogen Production segment or Corporate and Other during the ~~nine~~three months ended ~~May 31,~~November 30, 2022, compared to the same period during the prior year.

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Marketing, General and Administrative Expenses

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Marketing, general and administrative expenses $ 692,395 $ 518,875 $ 173,520 33.4 %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Marketing, general and administrative expenses	$	234,666	$	204,934	$	29,732	14.5	%

Marketing, general and administrative expenses increased during the ~~nine~~three months ended ~~May 31,~~November 30, 2022, primarily due to higher ~~performance-based incentive compensation accruals driven by improved financial results in comparison to the prior year,~~payroll and benefits, as well as ~~increased external consulting~~higher repairs and maintenance expenses for ~~projects such as~~ our ~~enterprise resource planning system implementation~~facilities and ~~strategic adjustments to our operating model.~~information technology platforms.

Interest Expense

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Interest expense $ 80,705 $ 82,897 $ (2,192) (2.6) %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Interest expense	$	33,250	$	23,432	$	9,818	41.9	%

Interest expense ~~decreased~~increased during the ~~nine~~three months ended ~~May 31,~~November 30, 2022, as a result of ~~lower notes payable balances~~higher interest rates compared to the same period ofin the prior ~~year.~~year, which was partially offset by decreased notes payable balances.

Other Income

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Other income $ 31,817 $ 41,219 $ (9,402) (22.8) %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Other income	$	24,289	$	23,776	$	513	2.2	%

Other income ~~decreased~~increased during the ~~nine~~three months ended ~~May 31,~~November 30, 2022, ~~primarily~~as a result of higher interest income due to ~~investment gains during~~improved interest rates, which was mostly offset by a decrease associated with a gain on the sale of a business in our Ag segment in the prior year that did not ~~reoccur~~occur during the current year.

Equity Income from Investments

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Equity income from investments* $ 644,347 $ 260,654 $ 383,693 147.2 %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Equity income from investments*	$	181,962	$	151,345	$	30,617	20.2	%

*For additional information, see Note 5, Investments, of the notes to the condensed consolidated financial statements that are included in this Quarterly Report on Form 10-Q.

Equity income from investments increased during the ~~nine~~three months ended ~~May 31,~~November 30, 2022, compared to the same period during the prior year, primarily due to ~~increased~~higher income associated with our equity method ~~investment~~investments in Ventura Foods, LLC ("Ventura Foods"), and CF Nitrogen. Equity income increased for Ventura Foods as a result of more favorable market conditions for edible oils during the first quarter of fiscal 2023 compared to the same period in the prior year and for CF Nitrogen ~~experienced increased sale~~as a result of continued strong prices of urea and UAN due to ~~strong~~ global supply and demand ~~and decreased global supply.~~

factors.

Income Tax Expense ~~(Benefit)~~

Nine Months Ended May 31, Change
2022 2021 Dollars Percent
(Dollars in thousands)
Income tax expense (benefit) $ 89,143 $ (10,130) $ 99,273 980.0 %


	Three Months Ended November 30,				Change
	2022		2021		Dollars		Percent
	(Dollars in thousands)
Income tax expense	$	34,554	$	14,720	$	19,834	134.7	%

Increased income tax expense during the ~~nine~~three months ended ~~May 31,~~November 30, 2022, ~~primarily~~ resulted from increased nonpatronage earnings during the first ~~nine months~~quarter of fiscal ~~2022.~~2023. Effective tax rates for the ~~nine~~three months ended ~~May 31,~~November 30, 2022 and 2021, were ~~6.7%~~4.2% and ~~(3.4)%~~3.2%, respectively. Federal and state statutory rates of 24.4% were applied to nonpatronage business activity ~~were 24.4% and 24.9%~~ for the ~~nine~~three months ended ~~May 31,~~November 30, 2022 and ~~2021, respectively.~~2021. Income taxes and effective tax rates vary each year based on profitability, nonpatronage business activity and current equity management assumptions.

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Liquidity and Capital Resources

In assessing our financial condition, we consider factors such as working capital, internal benchmarking related to our applicable covenants and other financial information. The following financial information is used when assessing our liquidity and capital resources to meet our capital allocation priorities, which include maintaining the safety and compliance of our operations, paying interest on debt and preferred stock dividends, returning cash to our member-owners in the form of cash patronage and equity redemptions, and taking advantage of strategic opportunities that benefit ~~them:~~our member-owners:


		May 31, 2022		August 31, 2021			November 30, 2022		August 31, 2022
		(Dollars in thousands)					(Dollars in thousands)
Cash and cash equivalents	Cash and cash equivalents	$	369,256	$	413,159	Cash and cash equivalents	$	636,296	$	793,957
Notes payable	Notes payable	2,028,859		1,740,859		Notes payable	773,447		606,719
Long-term debt including current maturities	Long-term debt including current maturities	1,962,087		1,618,361		Long-term debt including current maturities	1,958,046		1,958,814
Total equities	Total equities	9,741,178		9,017,326		Total equities	9,728,845		9,461,266
Working capital	Working capital	2,421,223		1,672,938		Working capital	2,976,393		2,425,878
Current ratio*	Current ratio*	1.3		1.3		Current ratio*	1.4		1.3

*Current ratio is defined as current assets divided by current liabilities.

Summary of Our Major Sources of Cash and Cash Equivalents

We fund our current operations primarily through ~~a combination of~~our cash flows from operations ~~supplemented~~and with short-term borrowings through our committed and uncommitted revolving credit facilities, including our securitization facility with certain unaffiliated financial institutions and our repurchase facility relating thereto. We fund certain of our long-term capital needs, primarily those related to acquisitions of property, plant and equipment, with cash flows from operations and by issuing long-term debt. See Note 6, Notes Payable and Long-Term Debt, of the notes to the unaudited condensed consolidated financial statements that are included in this Quarterly Report on Form 10-Q for additional information on our short-term borrowings and long-term debt. We will continue to consider opportunities to further diversify and enhance our sources and amounts of liquidity.

Summary of Our Major Uses of Cash and Cash Equivalents

The following is a summary of our primary cash requirements for fiscal ~~2022:~~2023:

•Capital expenditures. We expect total capital expenditures for fiscal ~~2022~~2023 to be approximately ~~$494.6~~ mi~~llion~~$869.1 million compared to capital expenditures of ~~$317.8~~$354.4 million in fiscal ~~2021.~~2022. Increased capital expenditures for fiscal 2023 are for investments in our infrastructure to meet the evolving needs of our owners and customers, enhance value for the cooperative system and propel sustainable growth. During the ~~nine~~three months ended ~~May 31,~~November 30, 2022, we acquired ~~$207.5~~$122.6 million of property, plant and equipment.

•Major maintenance. We expect total major maintenance for fiscal 2023 to be approximately $249.5 million compared to major maintenance of $24.8 million in fiscal 2022. Increased major maintenance for fiscal 2023 is for major maintenance at our Laurel and McPherson refineries. During the three months ended November 30, 2022, we paid $27.4 million in major maintenance.

•Debt and interest. We expect to repay approximately ~~$38.5~~$291.7 million of long-term debt and finance lease obligations and incur interest payments related to long-term debt of approximately ~~$71.5~~$92.0 million during fiscal ~~2022.~~2023. During the ~~nine~~three months ended ~~May 31,~~November 30, 2022, we repaid ~~$30.6~~$3.1 million of scheduled long-term debt ~~maturities.~~maturities and finance lease obligations.

•Preferred stock dividends. We had approximately $2.3 billion of preferred stock outstanding as of ~~May 31,~~November 30, 2022. We expect to pay dividends on our preferred stock of approximately $168.7 million during fiscal ~~2022.~~2023. Dividends paid on our preferred stock during the ~~nine~~three months ended ~~May 31,~~November 30, 2022, were ~~$126.5~~$42.2 million.

•Patronage. Our Board of Directors has authorized approximately ~~$51.5~~$500.0 million of our fiscal ~~2021~~2022 patronage-sourced earnings to be paid to our member-owners during fiscal ~~2022. During the nine months ended May 31, 2022, we distributed $51.0 million of cash patronage related to the year ended August 31, 2021.~~2023.

•Equity redemptions. Our Board of Directors has authorized equity redemptions of ~~$115.0~~up to $500.0 million to be distributed in fiscal ~~2022~~2023 in the form of redemptions of qualified and nonqualified equity owned by individual producer-members and association members. During the ~~nine~~three months ended ~~May 31,~~November 30, 2022, we redeemed ~~$99.2~~$12.9 million of member equity.

We believe cash generated by operating and investing activities, along with available borrowing capacity under our credit facilities, will be sufficient to support our ~~operations for the foreseeable future.~~short- and long-term operations. Our notes payable and long-term debt are subject to various restrictive requirements for maintenance of minimum consolidated net worth and other financial ratios. We

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were in compliance with all debt covenants and restrictions as of ~~May 31,~~November 30, 2022. Based on our current fiscal ~~2022~~2023 projections, we expect continued covenant compliance.

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Working Capital

We measure working capital as current assets less current liabilities ~~and~~as each amount appears on our Condensed Consolidated Balance Sheets. We believe this information is meaningful to investors as a measure of operational efficiency and short-term financial health. Working capital is not defined under U.S. generally accepted accounting principles ("U.S. GAAP") and may not be computed the same as similarly titled measures used by other companies. Working capital as of ~~May 31,~~November 30, 2022, and August 31, ~~2021,~~2022, was as follows:


		May 31, 2022		August 31, 2021		Change			November 30, 2022		August 31, 2022		Change
		(Dollars in thousands)							(Dollars in thousands)
Current assets	Current assets	$	10,975,548	$	7,998,951	$	2,976,597	Current assets	$	11,464,635	$	9,377,847	$	2,086,788
Less current liabilities	Less current liabilities	8,554,325		6,326,013		2,228,312		Less current liabilities	8,488,242		6,951,969		1,536,273
Working capital	Working capital	$	2,421,223	$	1,672,938	$	748,285	Working capital	$	2,976,393	$	2,425,878	$	550,515

As of ~~May 31,~~November 30, 2022, working capital increased by ~~$748.3~~$550.5 million compared with August 31, ~~2021.~~2022. Current asset balance changes increased working capital by ~~$3.0~~$2.1 billion, primarily driven by increases in ~~receivables~~inventories and ~~inventories,~~receivables, which were driven by ~~higher commodity prices and seasonality in our business.~~the fall harvest. Current liability balance changes decreased working capital by ~~$2.2~~$1.5 billion, primarily due to increases in ~~notes payable,~~ accounts payable, ~~and customer advance payments,~~ which ~~were~~was also driven by ~~higher commodity prices and seasonality in our business.~~the fall harvest.

We finance our working capital needs through committed and uncommitted lines of credit with domestic and international banks. We believe our current cash balances and available capacity on our committed and uncommitted lines of credit will provide adequate liquidity to meet our working capital needs.

Contractual Obligations

For information regarding our estimated contractual obligations, see the MD&A discussion included in Item 7 of Part II of our Annual Report on Form 10-K for the year ended August 31, ~~2021.~~2022.

Cash Flows

The following table presents summarized cash flow data for the ~~nine~~three months ended ~~May 31,~~November 30, 2022 and 2021:


		Nine Months Ended May 31,							Three Months Ended November 30,
		2022		2021		Change			2022		2021		Change
		(Dollars in thousands)							(Dollars in thousands)
Net cash used in operating activities	Net cash used in operating activities	$	(7,138)	$	(632,378)	$	625,240	Net cash used in operating activities	$	(180,192)	$	(183,587)	$	3,395
Net cash used in investing activities	Net cash used in investing activities	(339,888)		(177,509)		(162,379)		Net cash used in investing activities	(110,713)		(52,196)		(58,517)
Net cash provided by financing activities	Net cash provided by financing activities	355,946		1,012,006		(656,060)		Net cash provided by financing activities	129,960		156,002		(26,042)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(11,311)		(451)		(10,860)		Effect of exchange rate changes on cash and cash equivalents	1,415		(3,550)		4,965
(Decrease) increase in cash and cash equivalents and restricted cash		$	(2,391)	$	201,668	$	(204,059)
Decrease in cash and cash equivalents and restricted cash								Decrease in cash and cash equivalents and restricted cash	$	(159,530)	$	(83,331)	$	(76,199)

Cash flows from operating activities can fluctuate significantly from period to period as a result of various factors, including seasonality and timing differences associated with purchases, sales, taxes and other business decisions. The ~~$625.2~~$3.4 million decrease in cash used in operating activities primarily reflects increased net income during the first ~~nine months~~quarter of fiscal ~~2022~~2023 compared to the same period during fiscal ~~2021.~~2022, which was partially offset by the increase in net working capital during the same period.

The ~~$162.4~~$58.5 million increase in cash used in investing activities primarily reflects ~~timing differences associated with borrowings~~proceeds from the sale of a business in the prior year that did not occur in the current year and ~~payments~~increased expenditures for ~~CHS Capital notes receivable balances~~property, plant and equipment during the first ~~nine months~~quarter of fiscal ~~2022~~2023, compared to the same period during fiscal ~~2021.~~2022.

The ~~$656.1~~$26.0 million decrease in cash provided by financing activities primarily reflects ~~decreased net cash inflows associated with~~increases in our ~~notes payable primarily due to paying off our committed revolving credit facility in the third quarter of fiscal 2022~~outstanding drafts for grain checks from harvest and to a lesser extent decreased net cash inflows associated with our long-term debt facilities as the funding of a $375.0 million Note Purchase Agreement occurred during the first nine months of fiscal 2021.higher commodity prices.

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Preferred Stock

The following is a summary of our outstanding preferred stock as of ~~May 31,~~November 30, 2022, all shares of which are listed on the Global Select Market of The Nasdaq Stock Market LLC:


	Nasdaq Symbol	Issuance Date	Shares Outstanding	Redemption Value		Net Proceeds (a)		Dividend Rate (b) (c)		Dividend Payment Frequency	Redeemable Beginning (d)
				(Dollars in millions)
8% Cumulative Redeemable	CHSCP	(e)	12,272,003	$	306.8	$	311.2	8.00	%	Quarterly	7/18/2023
Class B Cumulative Redeemable, Series 1	CHSCO	(f)	21,459,066	$	536.5	$	569.3	7.875	%	Quarterly	9/26/2023
Class B Reset Rate Cumulative Redeemable, Series 2	CHSCN	3/11/2014	16,800,000	$	420.0	$	406.2	7.10	%	Quarterly	3/31/2024
Class B Reset Rate Cumulative Redeemable, Series 3	CHSCM	9/15/2014	19,700,000	$	492.5	$	476.7	6.75	%	Quarterly	9/30/2024
Class B Cumulative Redeemable, Series 4	CHSCL	1/21/2015	20,700,000	$	517.5	$	501.0	7.50	%	Quarterly	1/21/2025

(a) Includes patron equities redeemed with preferred stock.

(b) Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2, accumulates dividends at a rate of 7.10% per year until March 31, 2024, and then at a rate equal to the three-month benchmark interest rate plus 4.298%, not to exceed 8.00% per annum, subsequent to March 31, 2024.

(c) Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3, accumulates dividends at a rate of 6.75% per year until September 30, 2024, and then at a rate equal to the three-month benchmark interest rate plus 4.155%, not to exceed 8.00% per annum, subsequent to September 30, 2024.

(d) Preferred stock is redeemable for cash at our option, in whole or in part, at a ~~per-share~~per share price equal to the ~~per-share~~per share liquidation preference of $25.00 per share, plus all dividends accumulated and unpaid on that share to and including the date of redemption, beginning on the dates set forth in this column.

(e) The 8% Cumulative Redeemable Preferred Stock was issued at various times from 2002 through 2010.

(f) Shares of Class B Cumulative Redeemable Preferred Stock, Series 1, were issued on September 26, 2013, August 25, 2014, March 31, 2016, and March 30, 2017.

Critical Accounting Policies

~~Other than as described within the Significant Accounting Policies section of Note 1,~~ ~~Basis of Presentation and Significant Accounting Policies,~~ ~~to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, our~~ Our critical accounting policies as presented in the MD&A in our Annual Report on Form 10-K for the year ended August 31, ~~2021,~~2022, have not materially changed during the ~~nine~~three months ended ~~May 31,~~November 30, 2022.

Recent Accounting Pronouncements

~~See Note 1,~~ ~~Basis of Presentation and Significant Accounting Policies~~, No recent accounting pronouncements are expected to have a material impact on our ~~unaudited~~ condensed consolidated financial ~~statements included in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements that apply to us.~~statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We did not experience material changes in market risk exposures for the period ended ~~May 31,~~November 30, 2022, that would affect the quantitative and qualitative disclosures presented in our Annual Report on Form 10-K for the year ended August 31, ~~2021.~~2022.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934), as of ~~May 31,~~November 30, 2022. Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of that date, our disclosure controls and procedures were effective.

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Changes in Internal Control Over Financial Reporting

There have been no changes in internal control over financial reporting during the quarter ended ~~May 31,~~November 30, 2022, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, please see Note 13, Commitments and Contingencies, of the notes to the unaudited condensed consolidated financial statements that are included in this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in Item 1A of our Annual Report on Form 10-K for the year ended August 31, ~~2021, except for the risk factors set forth below, which update certain risk factors included in our Annual Report on Form 10-K.~~

~~We are subject to political, economic, legal and other risks of doing business globally.~~

We are a global business and are exposed to risks associated with having global operations. These risks include, but are not limited to, risks relating to terrorism, war or civil unrest; changes in a country’s or region’s social, economic or political conditions; changes in local labor conditions and regulations; changes in safety and environmental regulations; changes in regulatory or legal environments; restrictions on currency exchange activities and currency exchange fluctuations; price and export controls or bans on commodities; taxes; doing business in countries or regions with inadequate infrastructure; and logistics challenges. In addition, some countries where we operate lack well-developed legal systems or have not adopted clear legal and regulatory frameworks. This lack of legal certainty exposes our operations to increased risks, including increased difficulty in enforcing our agreements in those jurisdictions and increased risk of adverse actions by local government authorities, such as unilateral or forced renegotiation, modification or nullification of existing agreements or expropriations.

In February 2022, Russia invaded Ukraine. The war resulted in significant uncertainty and instability in the global commodities markets, including agricultural commodities and crude oil. In response to the war, the United States and other North Atlantic Treaty Organization ("NATO") member states, as well as nonmember states, announced economic sanctions targeting Russia and certain Russian citizens and enterprises, including several large banks. The continuation of the war may trigger a series of additional economic and other sanctions enacted by the United States, other NATO member states and other countries. In response, Russia announced export bans on various products, including agricultural commodities, through the end of calendar year 2022. Although we do not maintain operations in Russia, it is a significant source of fertilizer for global markets. Such sanctions have caused inflationary pressures and impacted our ability to purchase fertilizer in the global market. If our ability to purchase fertilizer in the global market continues to be impacted by those sanctions or by other factors, it could have a material adverse effect on our business and operations.

We maintain operations in Ukraine, which is a key international grain originating region. Our operations in Ukraine have been dramatically disrupted because of the war. Some of our Ukrainian employees have been forced to relocate to other countries and within Ukraine, with many unable to perform all or some work duties. The ongoing war could cause harm to our employees and otherwise impair their ability to work for extended periods of time, as well as disrupt telecommunications systems, banks and other critical infrastructure necessary to conduct business in Ukraine. Although we do not have significant fixed assets or infrastructure in Ukraine, we continue to have grain inventory in various facilities in Ukraine. As a result of the war and related export bans on wheat, oats and other staples that were put in place by the Ukrainian government in March 2022, our ability to access or otherwise use these grain inventories in our export business has been limited and is expected to continue to be limited throughout the war.

In addition, the risk of cybersecurity incidents has increased in connection with the ongoing war between Russia and Ukraine. For example, the war has been accompanied by cyberattacks against the Ukrainian government and other countries in the region. It is possible that these attacks could have collateral effects on additional critical infrastructure and financial institutions globally, which could adversely affect our operations. The proliferation of malware from the war into systems unrelated to the war, or cyberattacks against U.S. companies in retaliation for U.S. sanctions against Russia or U.S. support of Ukraine, could also adversely affect our operations.

The current war between Russia and Ukraine could draw military or other intervention from additional countries, which could lead to a much larger war and/or additional sanctions imposed by the United States government and other governments that restrict business with specific persons, organizations or countries with respect to certain products or services.

~~Table of Contents~~

If such escalation should occur or such sanctions are imposed, supply chain, trade routes and markets currently served by us could be adversely affected, which in turn could materially adversely affect our business operations and financial performance.

The consequences of any U.S. Securities and Exchange Commission ("SEC") or other governmental authority's investigation with respect to certain rail freight contracts purchased in connection with our North American grain marketing operations could have an adverse effect on our business.

We have provided an Offer of Settlement to the Staff of the SEC Division of Enforcement relating to an investigation principally involving intentional misconduct by a former employee in our rail freight trading operations who manipulated the quantity and mark-to-market valuation of railcars that were the subject of rail freight purchase contracts. The proposed settlement would be entered into by us pursuant to a proposed Order Instituting Cease-and-Desist Proceedings, Making Findings, and Imposing a Cease-and-Desist Order (the "Proposed Order") without admitting or denying the SEC's findings and would resolve alleged violations of certain of the reporting, books and records and internal accounting controls provisions of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder. Under the terms of the proposed settlement, we would not pay a civil penalty and would agree to not commit or cause any future violations of those federal securities laws and related rules and regulations. The Proposed Order also provides that in determining to accept the Offer of Settlement, the SEC considered our cooperation during the investigation and the remedial acts promptly undertaken by us. The proposed settlement is contingent upon approval by the Commissioners of the SEC, which cannot be assured. If the Commissioners of the SEC do not approve the settlement, we may need to enter into further discussions with the SEC regarding a disposition of this matter. As a result, there can be no assurance as to the specific type of disposition, including its impact on our business, prospects, reputation, financial condition, results of operations or cash flows. In addition, the expenses incurred in connection with any ongoing investigation by the SEC or any other governmental authority, and diversion of the attention of our management that could occur as a result thereof, could adversely affect our business, financial condition, results of operations and/or cash flows.

ITEM 6. EXHIBITS


Exhibit			Description
10.1			Amendment No. 3 to Employment Agreement, dated as of November 1, 2022, between CHS Inc. and Jay D. Debertin (incorporated by reference to our Form 10-K for the year ended August 31, 2022, filed November 2, 2022).
31.1			Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2			Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1			Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2			Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS			XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH			XBRL Taxonomy Extension Schema Document.
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB			XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document.
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CHS Inc.

(Registrant)

Date:

~~July 7, 2022~~January 11, 2023

By:

/s/ Olivia Nelligan

Olivia Nelligan

Executive Vice President, Chief Financial Officer and Chief ~~Financial~~Strategy Officer

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		Three Months Ended May 31,				Nine Months Ended May 31,
	Location of Gain	2022		2021		2022		2021
		(Dollars in thousands)
Commodity derivatives	Cost of goods sold	$	(5,482)	$	2,329	$	12,777	$	19,084