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, 2023
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 ☐

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 31~~November 30 , 2023, and August 31, ~~2022~~202 3	2
	Condensed Consolidated Statements of Operations for the Three ~~and~~ ~~Nine~~ Months Ended ~~May 31~~November 3 0 , 2023 and 2022	3
	Condensed Consolidated Statements of Comprehensive Income for the Three ~~and~~ ~~Nine~~ Months Ended ~~May~~November 313 0 , 2023 and 2022	4
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months ~~Ended~~ Ende ~~May 31~~d November 30 , 2023 and 2022	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2220
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4535
Item 4.	Controls and Procedures	4635
	PART II. OTHER INFORMATION	4636
Item 1.	Legal Proceedings	4636
Item 1A.	Risk Factors	4636
Item 5 .5.	Other Information	4636
Item 6.	Exhibits	4736
Signatures		4837

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, 2023.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains, and our other CHS Inc. 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~~CHS Annual Report on Form 10-K for the fiscal year ended August 31, ~~2022, in the Quarterly Report on Form 10-Q for the Quarter ended February 28, 2023, and in this Quarterly Report on Form 10-Q.~~2023. These factors may ~~include~~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 escalation of conflict in the Middle East; the impact of inflation; the impact of epidemics, pandemics, outbreaks of disease and other 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 supply chain issues; the impact of workforce factors; our funding needs and financing sources; financial ~~institutions'~~institutions’ and other capital ~~sources'~~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, including failures or delays in achieving our strategies or expectations related to climate change or other environmental matters; the impairment of long-lived assets; the impact of bank failures; and other factors affecting our businesses generally. Any forward-looking statements made by us in this ~~Quarterly Report on Form 10-Q~~document 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 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, 2023		August 31, 2022			November 30, 2023		August 31, 2023
		(Dollars in thousands)					(Dollars in thousands)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	997,323	$	793,957	Cash and cash equivalents	$	1,349,757	$	1,765,286
Receivables	Receivables	3,839,097		3,548,315		Receivables	3,772,527		3,105,811
Inventories	Inventories	3,280,822		3,652,871		Inventories	4,251,580		3,215,179
Other current assets	Other current assets	1,269,049		1,382,704		Other current assets	1,213,331		1,042,373
Total current assets	Total current assets	9,386,291		9,377,847		Total current assets	10,587,195		9,128,649
Investments	Investments	3,905,734		3,728,006		Investments	3,831,854		3,828,872
Property, plant and equipment	Property, plant and equipment	4,757,169		4,744,959		Property, plant and equipment	4,877,071		4,869,373
Other assets	Other assets	1,145,257		973,995		Other assets	1,136,765		1,130,524
Total assets	Total assets	$	19,194,451	$	18,824,807	Total assets	$	20,432,885	$	18,957,418
LIABILITIES AND EQUITIES	LIABILITIES AND EQUITIES					LIABILITIES AND EQUITIES
Current liabilities:	Current liabilities:					Current liabilities:
Notes payable	Notes payable	$	605,955	$	606,719	Notes payable	$	421,580	$	547,923
Current portion of long-term debt	Current portion of long-term debt	137,402		290,605		Current portion of long-term debt	7,795		7,839
Accounts payable	Accounts payable	3,145,954		3,063,310		Accounts payable	4,331,301		2,930,607
Accrued expenses	Accrued expenses	863,298		784,317		Accrued expenses	597,196		773,054
Other current liabilities	Other current liabilities	1,868,361		2,207,018		Other current liabilities	1,608,546		1,639,771
Total current liabilities	Total current liabilities	6,620,970		6,951,969		Total current liabilities	6,966,418		5,899,194
Long-term debt	Long-term debt	1,814,854		1,668,209		Long-term debt	1,817,770		1,819,819
Other liabilities	Other liabilities	675,249		743,363		Other liabilities	951,308		786,016
Commitments and contingencies (Note 13)	Commitments and contingencies (Note 13)					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	4,965,745		5,391,236		Equity certificates	5,818,526		5,911,649
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(260,271)		(255,335)		Accumulated other comprehensive loss	(272,697)		(265,395)
Capital reserves	Capital reserves	3,108,946		2,055,682		Capital reserves	2,881,596		2,537,486
Total CHS Inc. equities	Total CHS Inc. equities	10,078,458		9,455,621		Total CHS Inc. equities	10,691,463		10,447,778
Noncontrolling interests	Noncontrolling interests	4,920		5,645		Noncontrolling interests	5,926		4,611
Total equities	Total equities	10,083,378		9,461,266		Total equities	10,697,389		10,452,389
Total liabilities and equities	Total liabilities and equities	$	19,194,451	$	18,824,807	Total liabilities and equities	$	20,432,885	$	18,957,418

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,
		2023		2022		2023		2022			2023		2022
		(Dollars in thousands)									(Dollars in thousands)
Revenues	Revenues	$	12,026,051	$	13,137,724	$	36,098,738	$	34,351,069	Revenues	$	11,390,658	$	12,765,839
Cost of goods sold	Cost of goods sold	11,351,711		12,493,467		34,160,996		32,917,906		Cost of goods sold	10,745,708		11,886,704
Gross profit	Gross profit	674,340		644,257		1,937,742		1,433,163		Gross profit	644,950		879,135
Marketing, general and administrative expenses	Marketing, general and administrative expenses	273,238		243,136		749,829		692,395		Marketing, general and administrative expenses	252,056		234,666
Operating earnings	Operating earnings	401,102		401,121		1,187,913		740,768		Operating earnings	392,894		644,469

Interest expense	Interest expense	36,949		32,099		106,166		80,705		Interest expense	29,628		33,250
Other income	Other income	(31,027)		(6,636)		(83,629)		(31,817)		Other income	(44,529)		(24,289)
Equity income from investments	Equity income from investments	(162,940)		(263,079)		(523,236)		(644,347)		Equity income from investments	(109,051)		(181,962)
Income before income taxes	Income before income taxes	558,120		638,737		1,688,612		1,336,227		Income before income taxes	516,846		817,470
Income tax expense		10,777		62,492		66,305		89,143
Income tax (benefit) expense										Income tax (benefit) expense	(6,522)		34,554
Net income	Net income	547,343		576,245		1,622,307		1,247,084		Net income	523,368		782,916
Net loss attributable to noncontrolling interests		(156)		(329)		(111)		(451)
Net income attributable to noncontrolling interests										Net income attributable to noncontrolling interests	445		318
Net income attributable to CHS Inc.	Net income attributable to CHS Inc.	$	547,499	$	576,574	$	1,622,418	$	1,247,535	Net income attributable to CHS Inc.	$	522,923	$	782,598

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,
		2023		2022		2023		2022			2023		2022
		(Dollars in thousands)									(Dollars in thousands)
Net income	Net income	$	547,343	$	576,245	$	1,622,307	$	1,247,084	Net income	$	523,368	$	782,916
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	130		4,485		4,681		12,834		Pension and other postretirement benefits	17		8,524

Cash flow hedges	Cash flow hedges	(2,531)		(25,257)		(7,595)		(34,951)		Cash flow hedges	(4,161)		(20,207)
Foreign currency translation adjustment	Foreign currency translation adjustment	(707)		2,551		(2,022)		(1,568)		Foreign currency translation adjustment	(3,158)		(1,935)
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	(3,108)		(18,221)		(4,936)		(23,685)		Other comprehensive loss, net of tax	(7,302)		(13,618)
Comprehensive income	Comprehensive income	544,235		558,024		1,617,371		1,223,399		Comprehensive income	516,066		769,298
Comprehensive loss attributable to noncontrolling interests		(156)		(329)		(111)		(451)
Comprehensive income attributable to noncontrolling interests										Comprehensive income attributable to noncontrolling interests	445		318
Comprehensive income attributable to CHS Inc.	Comprehensive income attributable to CHS Inc.	$	544,391	$	558,353	$	1,617,482	$	1,223,850	Comprehensive income attributable to CHS Inc.	$	515,621	$	768,980

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,
		2023		2022			2023		2022
		(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	$	1,622,307	$	1,247,084	Net income	$	523,368	$	782,916
Adjustments to reconcile net income to net cash provided by (used in) operating activities:	Adjustments to reconcile net income to net cash provided by (used in) operating activities:					Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization, including amortization of deferred major maintenance	Depreciation and amortization, including amortization of deferred major maintenance	400,474		399,562		Depreciation and amortization, including amortization of deferred major maintenance	138,037		131,388
Equity income from investments, net of distributions received	Equity income from investments, net of distributions received	(167,940)		(345,846)		Equity income from investments, net of distributions received	807		(164,930)
Provision for current expected credit losses	Provision for current expected credit losses	(10,592)		18,641		Provision for current expected credit losses	5,009		2,961
Deferred taxes	Deferred taxes	(65,839)		(51,522)		Deferred taxes	(68,627)		(1,733)
Other, net	Other, net	(3,853)		(6,643)		Other, net	5,627		1,597
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables	Receivables	(206,328)		(1,074,111)		Receivables	(749,650)		(779,455)
Inventories	Inventories	372,049		(1,117,020)		Inventories	(1,036,401)		(1,417,233)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	214,410		967,603		Accounts payable and accrued expenses	1,232,312		1,441,469
Other, net	Other, net	(184,963)		(44,886)		Other, net	(198,067)		(177,172)
Net cash provided by (used in) operating activities		1,969,725		(7,138)
Net cash used in operating activities						Net cash used in operating activities	(147,585)		(180,192)
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	(374,230)		(207,455)		Acquisition of property, plant and equipment	(142,449)		(122,598)
Proceeds from disposition of property, plant and equipment	Proceeds from disposition of property, plant and equipment	22,823		8,127		Proceeds from disposition of property, plant and equipment	2,330		5,034
Expenditures for major maintenance	Expenditures for major maintenance	(184,435)		(18,072)		Expenditures for major maintenance	(8,274)		(27,398)
Proceeds from sale of business		64		73,152

Changes in CHS Capital notes receivable, net	Changes in CHS Capital notes receivable, net	(120,657)		(200,380)		Changes in CHS Capital notes receivable, net	83,580		32,098
Financing extended to customers	Financing extended to customers	(138,407)		(47,235)		Financing extended to customers	(50,229)		(39,814)
Payments from customer financing	Payments from customer financing	152,323		53,442		Payments from customer financing	39,697		42,121

Other investing activities, net	Other investing activities, net	(8,569)		(1,467)		Other investing activities, net	(24,271)		(156)
Net cash used in investing activities	Net cash used in investing activities	(651,088)		(339,888)		Net cash used in investing activities	(99,616)		(110,713)
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	6,124,177		19,077,600		Proceeds from notes payable and long-term debt	975,374		2,054,507
Payments on notes payable, long-term debt and finance lease obligations	Payments on notes payable, long-term debt and finance lease obligations	(6,104,543)		(18,401,162)		Payments on notes payable, long-term debt and finance lease obligations	(1,106,904)		(1,887,483)
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	(480,435)		(99,229)		Redemptions of equities	(11,236)		(12,941)
Cash patronage dividends paid		(502,938)		(51,026)

Other financing activities, net	Other financing activities, net	(56,924)		(43,736)		Other financing activities, net	10,429		18,044
Net cash (used in) provided by financing activities	Net cash (used in) provided by financing activities	(1,147,164)		355,946		Net cash (used in) provided by financing activities	(174,504)		129,960
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(16)		(11,311)		Effect of exchange rate changes on cash and cash equivalents	(3,969)		1,415
Increase (decrease) in cash and cash equivalents and restricted cash		171,457		(2,391)
Decrease in cash and cash equivalents and restricted cash						Decrease in cash and cash equivalents and restricted cash	(425,674)		(159,530)
Cash and cash equivalents and restricted cash at beginning of period	Cash and cash equivalents and restricted cash at beginning of period	903,474		542,484		Cash and cash equivalents and restricted cash at beginning of period	1,844,587		903,474
Cash and cash equivalents and restricted cash at end of period	Cash and cash equivalents and restricted cash at end of period	$	1,074,931	$	540,093	Cash and cash equivalents and restricted cash at end of period	$	1,418,913	$	743,944

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, ~~2022,~~2023, 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, ~~2022.~~2023.

Recent Accounting Pronouncements

~~No recent accounting pronouncements~~In November 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments in our annual and interim consolidated financial statements. This ASU is effective on a retrospective basis for our annual reporting beginning in fiscal 2025 and for interim period reporting beginning in fiscal 2026. We are ~~expected to have a material~~currently evaluating the impact of adopting this ASU on our ~~condensed~~ consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which provides additional transparency for income tax disclosures. This ASU is effective for our annual reporting for fiscal 2026 on a prospective basis. We are currently evaluating the impact of adopting this ASU on our 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, 2023 and 2022. 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, 2023 (Dollars in thousands)
Energy $ 1,980,243 $ 283,844 $ — $ 2,264,087
Ag 3,295,312 6,444,559 4,105 9,743,976
Corporate and Other 6,388 — 11,600 17,988
Total revenues $ 5,281,943 $ 6,728,403 $ 15,705 $ 12,026,051
Three Months Ended May 31, 2022
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

~~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, 2023		(Dollars in thousands)
Three Months Ended November 30, 2023										Three Months Ended November 30, 2023	(Dollars in thousands)
Energy	Energy	$	6,775,463	$	776,831	$	—	$	7,552,294	Energy	$	2,399,552	$	318,388	$	—	$	2,717,940
Ag	Ag	7,757,867		20,724,153		15,670		28,497,690		Ag	2,226,423		6,414,632		11,110		8,652,165
Corporate and Other	Corporate and Other	18,874		—		29,880		48,754		Corporate and Other	6,776		—		13,777		20,553
Total revenues	Total revenues	$	14,552,204	$	21,500,984	$	45,550	$	36,098,738	Total revenues	$	4,632,751	$	6,733,020	$	24,887	$	11,390,658

Nine Months Ended May 31, 2022
Three Months Ended November 30, 2022										Three Months Ended November 30, 2022
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

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.

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Contract Assets and Contract Liabilities

Contract assets relate to unbilled amounts arising from goods that have already been transferred to ~~the customer~~customers where the right to payment is not conditional on the passage of time. This results in 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 ~~$51.7~~$41.3 million and ~~$17.2~~$16.2 million as of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, respectively.

Contract liabilities relate to advance payments received from customers for goods and services that we have yet to provide. Contract liabilities of ~~$318.0~~$268.4 million and ~~$541.5~~$240.0 million as of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, respectively, are recorded within other current liabilities on our Condensed Consolidated Balance Sheets. For the three months ended ~~May 31,~~November 30, 2023 and 2022, we recognized revenues of ~~$93.1~~$89.6 million and ~~$48.1 million related to contract liabilities, respectively. For the nine months ended May 31, 2023 and 2022, we recognized revenues of $285.3 million and $213.9~~$122.0 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, 2023		August 31, 2022			November 30, 2023		August 31, 2023
		(Dollars in thousands)					(Dollars in thousands)
Trade accounts receivable	Trade accounts receivable	$	2,842,749	$	2,626,623	Trade accounts receivable	$	2,683,636	$	2,010,162
CHS Capital short-term notes receivable	CHS Capital short-term notes receivable	724,334		644,875		CHS Capital short-term notes receivable	730,244		845,192
Other	Other	376,571		404,734		Other	439,747		327,084
Gross receivables	Gross receivables	3,943,654		3,676,232		Gross receivables	3,853,627		3,182,438
Less: allowances and reserves	Less: allowances and reserves	104,557		127,917		Less: allowances and reserves	81,100		76,627
Total receivables	Total receivables	$	3,839,097	$	3,548,315	Total receivables	$	3,772,527	$	3,105,811

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 ~~Montana~~ and North Dakota. CHS Capital also has loans receivable from producer borrowers that are collateralized by various combinations of growing crops, livestock, inventories, accounts

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receivable, personal property and supplemental mortgages and are primarily originated in the same states as the commercial notes, as well as in 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 ~~$65.6~~$95.3 million and ~~$54.3~~$61.1 million as of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, respectively. The long-term notes receivable are included in other assets on our Condensed Consolidated Balance Sheets. As of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, commercial notes represented ~~33%~~26% and ~~25%~~15%, respectively, and producer notes represented ~~67%~~74% and ~~75%~~85%, 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, 2023, CHS Capital customers had additional available credit of ~~$1.2~~$1.4 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, 2023, or August 31, ~~2022.~~2023.

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Note 4 Inventories


		May 31, 2023		August 31, 2022			November 30, 2023		August 31, 2023
		(Dollars in thousands)					(Dollars in thousands)
Grain and oilseed	Grain and oilseed	$	1,011,947	$	1,133,531	Grain and oilseed	$	1,868,331	$	1,099,956
Energy	Energy	673,584		824,114		Energy	814,028		645,333
Agronomy	Agronomy	1,096,250		1,295,548		Agronomy	1,179,326		1,111,477
Processed grain and oilseed	Processed grain and oilseed	292,254		292,992		Processed grain and oilseed	170,135		141,360
Other	Other	206,787		106,686		Other	219,760		217,053
Total inventories	Total inventories	$	3,280,822	$	3,652,871	Total inventories	$	4,251,580	$	3,215,179

As of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, we valued approximately ~~17%~~15% and ~~14%~~16%, 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 would have been higher than the reported amount by ~~$477.8~~$436.9 million and ~~$678.3~~$589.0 million as of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, 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, 2023		August 31, 2022			November 30, 2023		August 31, 2023
		(Dollars in thousands)					(Dollars in thousands)
Equity method investments:	Equity method investments:					Equity method investments:
CF Industries Nitrogen, LLC	CF Industries Nitrogen, LLC	$	2,717,704	$	2,641,604	CF Industries Nitrogen, LLC	$	2,640,655	$	2,577,391
Ventura Foods, LLC	Ventura Foods, LLC	459,906		410,093		Ventura Foods, LLC	481,236		519,169
Ardent Mills, LLC	Ardent Mills, LLC	258,539		250,857		Ardent Mills, LLC	235,778		265,146
TEMCO, LLC		47,377		32,809

Other equity method investments	Other equity method investments	286,810		265,913		Other equity method investments	344,334		337,281
Other investments	Other investments	135,398		126,730		Other investments	129,851		129,885
Total investments	Total investments	$	3,905,734	$	3,728,006	Total investments	$	3,831,854	$	3,828,872

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 investment during the ~~nine~~three months ended ~~May 31,~~November 30, 2023 and 2022, was CF Industries Nitrogen, LLC ("CF Nitrogen"), which 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~~that requires an adjustment. We ~~have~~had approximately ~~$756.7~~$654.9 million in cumulative undistributed earnings from our equity method investees included in the investments balance as of ~~May 31,~~November 30, 2023.

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CF Nitrogen

We have a ~~$2.7~~$2.6 billion investment in CF Nitrogen, a strategic venture with CF Industries Holdings, Inc. ("CF Industries"). The investment consists of an approximate 8%9% 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 CF Nitrogen's Limited Liability Company Agreement, adjusted for semiannual cash distributions.

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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, 2023 and 2022:


		Nine Months Ended May 31,					Three Months Ended November 30,
		2023		2022			2023		2022
		(Dollars in thousands)					(Dollars in thousands)
Net sales	Net sales	$	4,200,120	$	4,972,383	Net sales	$	878,045	$	1,623,268
Gross profit	Gross profit	1,898,265		2,682,653		Gross profit	272,024		770,478
Net earnings	Net earnings	1,884,666		2,641,425		Net earnings	263,315		764,179
Earnings attributable to CHS Inc.	Earnings attributable to CHS Inc.	330,855		497,289		Earnings attributable to CHS Inc.	63,263		127,566

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

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, 2023. Notes payable as of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, consisted of the following:


		May 31, 2023		August 31, 2022			November 30, 2023		August 31, 2023
		(Dollars in thousands)					(Dollars in thousands)
Notes payable	Notes payable	$	504,376	$	459,398	Notes payable	$	258,944	$	375,932
CHS Capital notes payable	CHS Capital notes payable	101,579		147,321		CHS Capital notes payable	162,636		171,991
Total notes payable	Total notes payable	$	605,955	$	606,719	Total notes payable	$	421,580	$	547,923

~~On April 21, 2023, we amended and restated our~~Our primary line of credit ~~which~~ is a five-year unsecured revolving credit facility with a syndicate of domestic and international banks. The credit facility provides a committed amount of $2.8 billion that expires on April 21, 2028. There were no borrowings outstanding on this facility as of ~~May 31,~~November 30, 2023, or August 31, ~~2022.~~2023. 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 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 $850.0 million and an uncommitted portion with a maximum availability of $250.0 million. As of ~~May 31,~~November 30, 2023, total availability under the Securitization Facility was ~~$1.0 billion,~~$974.2 million, of which 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~~$200.0 million for ~~subordinated~~certain eligible receivables and notes ~~issued by Cofina in favor~~receivables of the ~~Originators and representing a portion of the outstanding balance of the Receivables sold by the Originators to Cofina under the Securitization Facility.~~Originators. No balance was outstanding under the Repurchase Facility as of ~~May 31,~~November 30, 2023, or August 31, ~~2022.~~2023.

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On July 11, 2023, we amended the Securitization Facility and entered into an additional repurchase facility, under which we can obtain repurchase agreement financing up to $200.0 million for certain eligible receivables of the Originators. The amendments to the Securitization Facility were designed to remove from the securitization certain receivables and loans to permit them to be sold under the new repurchase facility.

On January 24, 2023, we entered into a Note Purchase Agreement to borrow $150.0 million of debt in the form of a note. The note matures on January 24, 2030, and interest accrues at a rate of 5.68%, subject to certain adjustments depending on our ratio of consolidated funded debt to consolidated cash flow.

The following table presents summarized long-term debt (including the current portion) as of ~~May 31,~~November 30, 2023, and August 31, ~~2022:~~2023:


		May 31, 2023		August 31, 2022			November 30, 2023		August 31, 2023
		(Dollars in thousands)					(Dollars in thousands)
Private placement debt	Private placement debt	$	1,543,000	$	1,545,000	Private placement debt	$	1,413,000	$	1,413,000
Term loan	Term loan	366,000		366,000		Term loan	366,000		366,000
Finance lease obligations		43,476		44,773
Finance lease liabilities						Finance lease liabilities	47,518		49,235
Deferred financing costs	Deferred financing costs	(3,259)		(3,535)		Deferred financing costs	(3,015)		(3,127)
Other	Other	3,039		6,576		Other	2,062		2,550
Total long-term debt	Total long-term debt	1,952,256		1,958,814		Total long-term debt	1,825,565		1,827,658
Less current portion	Less current portion	137,402		290,605		Less current portion	7,795		7,839
Long-term portion	Long-term portion	$	1,814,854	$	1,668,209	Long-term portion	$	1,817,770	$	1,819,819

Interest expense for the three months ended ~~May 31,~~November 30, 2023 and 2022, was ~~$36.9~~$29.6 million and ~~$32.1~~$33.3 million, respectively, net of capitalized interest of ~~$4.1~~$5.0 million and ~~$0.9 million, respectively. Interest expense for the nine months ended May 31, 2023 and 2022, was $106.2 million and $80.7 million, respectively, net of capitalized interest of $9.8 million and $4.7~~$2.5 million, respectively.

Note 7 Income Taxes

Our effective tax rate for the three months ended ~~May 31,~~November 30, 2023, was ~~1.9%~~(1.3)%, compared to ~~9.8%~~4.2% for the three months ended ~~May 31,~~November 30, 2022. ~~Our effective~~The income tax ~~rate for~~benefit during the ~~nine~~three months ended ~~May 31,~~November 30, 2023, ~~was 3.9%, compared to 6.7% for~~resulted primarily from the ~~nine months ended May 31, 2022.~~recognition of research and development tax credits during the period. Our income tax (benefit) 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~~income tax credits, nonpatronage business activity ~~during the year.~~and current equity management assumptions.

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, ~~$115.7~~$130.4 million and ~~$115.1~~$116.0 million of the unrecognized tax benefits would ultimately benefit our effective tax rate as of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, respectively. It is reasonably possible that the total amount of unrecognized tax benefits could significantly change in the next 12 months.

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Note 8 Equities

Changes in Equities

Changes in equities for the three months ended ~~May 31,~~November 30, 2023 and 2022, 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, February 28, 2023 $ 3,307,140 $ 27,861 $ 1,771,844 $ 2,264,038 $ (257,163) $ 2,710,507 $ 5,092 $ 9,829,319
Reversal of prior year patronage and redemption estimates 462,690 — — — — 119,360 — 582,050
Distribution of 2022 patronage refunds 2,615 — 1,226 — — (124,889) — (121,048)
Redemptions of equities (457,679) (112) (4,898) — — — — (462,689)
Other, net (678) (44) (115) — — 574 (16) (279)
Net income (loss) — — — — — 547,499 (156) 547,343
Other comprehensive loss, net of tax — — — — (3,108) — — (3,108)
Estimated 2023 cash patronage refunds — — — — — (144,105) — (144,105)
Estimated 2023 equity redemptions (144,105) — — — — — — (144,105)
Balances, May 31, 2023 $ 3,169,983 $ 27,705 $ 1,768,057 $ 2,264,038 $ (260,271) $ 3,108,946 $ 4,920 $ 10,083,378

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, 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

~~Changes in equities for the nine months ended May 31, 2023 and 2022, 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, 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 patronage and redemption estimates (28,368) — (153,858) — — 1,162,661 — 980,435
Distribution of 2022 patronage refunds 516,246 — 154,484 — — (1,173,668) — (502,938)
Redemptions of equities (471,589) (184) (8,662) — — — — (480,435)
Preferred stock dividends — — — — — (126,501) — (126,501)
Other, net (390) (44) (79) — — 1,401 (614) 274
Net income (loss) — — — — — 1,622,418 (111) 1,622,307
Other comprehensive loss, net of tax — — — — (4,936) — — (4,936)
Estimated 2023 cash patronage refunds — — — — — (433,047) — (433,047)
Estimated 2023 equity redemptions (433,047) — — — — — — (433,047)
Balances, May 31, 2023 $ 3,169,983 $ 27,705 $ 1,768,057 $ 2,264,038 $ (260,271) $ 3,108,946 $ 4,920 $ 10,083,378

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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, 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 patronage and redemption estimates 99,216 — (230,290) — — 280,290 — 149,216
Distribution of 2021 patronage refunds — — 235,576 — — (286,602) — (51,026)
Redemptions of equities (92,668) (428) (6,133) — — — — (99,229)
Preferred stock dividends — — — — — (126,501) — (126,501)
Other, net (3,256) 16 (6,873) — — 2,548 (1,735) (9,300)
Net income (loss) — — — — — 1,247,535 (451) 1,247,084
Other comprehensive loss, net of tax — — — — (23,685) — — (23,685)
Estimated 2022 cash patronage refunds — — — — — (120,902) — (120,902)
Estimated 2022 equity redemptions (241,805) — — — — — — (241,805)
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, 2023	$	3,951,385	$	27,558	$	1,932,706	$	2,264,038	$	(265,395)	$	2,537,486	$	4,611	$	10,452,389
Reversal of prior year redemption estimates	11,236		—		—		—		—				—		11,236

Redemptions of equities	(8,287)		(67)		(2,882)		—		—		—		—		(11,236)
Preferred stock dividends	—		—		—		—		—		(84,334)		—		(84,334)
Other, net	34		(3)		44		—		—		(1,281)		870		(336)
Net income	—		—				—		—		522,923		445		523,368
Other comprehensive loss, net of tax	—		—		—		—		(7,302)		—		—		(7,302)
Estimated 2024 cash patronage refunds	—		—		—		—		—		(93,198)		—		(93,198)
Estimated 2024 equity redemptions	(93,198)		—		—		—		—		—		—		(93,198)
Balances, November 30, 2023	$	3,861,170	$	27,488	$	1,929,868	$	2,264,038	$	(272,697)	$	2,881,596	$	5,926	$	10,697,389


	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

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, 2023. Due to the timing of dividend declarations throughout the fiscal year, no declarations were made during the~~ three months ended ~~May 31,~~November 30, 2023 orand 2022.


			Nine Months Ended May 31,							Three Months Ended November 30,
		Nasdaq symbol		2023		2022			Nasdaq symbol		2023		2022
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 for the three months ended ~~May 31,~~November 30, 2023 and 2022, 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 February 28, 2023, net of tax		$	(164,089)	$	3,779	$	(96,853)	$	(257,163)
Balance as of August 31, 2023, net of tax										Balance as of August 31, 2023, net of tax	$	(173,925)	$	2,032	$	(93,502)	$	(265,395)
Other comprehensive income (loss), before tax:	Other comprehensive income (loss), before tax:									Other comprehensive income (loss), before tax:
Amounts before reclassifications	Amounts before reclassifications	148		(1,051)		(800)		(1,703)		Amounts before reclassifications	—		2,280		(3,350)		(1,070)
Amounts reclassified	Amounts reclassified	23		(2,289)		—		(2,266)		Amounts reclassified	23		(7,790)		—		(7,767)
Total other comprehensive income (loss), before tax	Total other comprehensive income (loss), before tax	171		(3,340)		(800)		(3,969)		Total other comprehensive income (loss), before tax	23		(5,510)		(3,350)		(8,837)
Tax effect	Tax effect	(41)		809		93		861		Tax effect	(6)		1,349		192		1,535
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	130		(2,531)		(707)		(3,108)		Other comprehensive income (loss), net of tax	17		(4,161)		(3,158)		(7,302)
Balance as of May 31, 2023, net of tax		$	(163,959)	$	1,248	$	(97,560)	$	(260,271)
Balance as of November 30, 2023, net of tax										Balance as of November 30, 2023, net of tax	$	(173,908)	$	(2,129)	$	(96,660)	$	(272,697)

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Pension and Other Postretirement Benefits Cash Flow Hedges Foreign Currency Translation Adjustment Total
(Dollars in thousands)
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)

~~Changes in accumulated other comprehensive income (loss) by component for the nine months ended May 31, 2023 and 2022, are as follows:~~

Pension and Other Postretirement Benefits Cash Flow Hedges Foreign Currency Translation Adjustment Total
(Dollars in thousands)
Balance as of August 31, 2022, net of tax $ (168,640) $ 8,843 $ (95,538) $ (255,335)
Other comprehensive income (loss), before tax:
Amounts before reclassifications 351 (24,392) (2,288) (26,329)
Amounts reclassified 70 14,368 — 14,438
Total other comprehensive income (loss), before tax 421 (10,024) (2,288) (11,891)
Tax effect 4,260 2,429 266 6,955
Other comprehensive income (loss), net of tax 4,681 (7,595) (2,022) (4,936)
Balance as of May 31, 2023, net of tax $ (163,959) $ 1,248 $ (97,560) $ (260,271)


		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	286		(34,325)		(1,679)		(35,718)		Amounts before reclassifications	(66)		(33,899)		(2,227)		(36,192)
Amounts reclassified	Amounts reclassified	16,680		(11,877)		—		4,803		Amounts reclassified	5,560		7,229		—		12,789
Total other comprehensive income (loss), before tax	Total other comprehensive income (loss), before tax	16,966		(46,202)		(1,679)		(30,915)		Total other comprehensive income (loss), before tax	5,494		(26,670)		(2,227)		(23,403)
Tax effect	Tax effect	(4,132)		11,251		111		7,230		Tax effect	3,030		6,463		292		9,785
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	12,834		(34,951)		(1,568)		(23,685)		Other comprehensive income (loss), net of tax	8,524		(20,207)		(1,935)		(13,618)
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)

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). As described in Note 11, Derivative Financial Instruments and Hedging Activities, amounts reclassified from accumulated other comprehensive loss for cash flow hedges are recorded asin cost of goods sold. Gains or losses on foreign currency translation reclassifications are recorded asin 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.

Components of net periodic benefit costs for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2023 and 2022, are as follows:


		Three Months Ended May 31,													Three Months Ended November 30,
		Qualified Pension Benefits				Nonqualified Pension Benefits				Other Benefits					Qualified Pension Benefits				Nonqualified Pension Benefits				Other Benefits
		2023		2022		2023		2022		2023		2022			2023		2022		2023		2022		2023		2022
Components of net periodic benefit costs:	Components of net periodic benefit costs:	(Dollars in thousands)												Components of net periodic benefit costs:	(Dollars in thousands)
Service cost	Service cost	$	9,645	$	11,569	$	460	$	232	$	168	$	249	Service cost	$	9,348	$	9,645	$	492	$	460	$	163	$	168
Interest cost	Interest cost	7,647		4,292		185		70		259		126		Interest cost	8,982		7,647		261		185		286		259
Expected return on assets	Expected return on assets	(10,782)		(10,990)		—		—		—		—		Expected return on assets	(11,965)		(10,782)		—		—		—		—
Prior service cost (credit) amortization	Prior service cost (credit) amortization	37		44		(29)		(29)		(111)		(111)		Prior service cost (credit) amortization	45		37		(29)		(29)		(111)		(111)
Actuarial loss (gain) amortization	Actuarial loss (gain) amortization	468		5,852		61		120		(404)		(315)		Actuarial loss (gain) amortization	449		468		95		61		(404)		(404)

Net periodic benefit cost (benefit)	Net periodic benefit cost (benefit)	$	7,015	$	10,767	$	677	$	393	$	(88)	$	(51)	Net periodic benefit cost (benefit)	$	6,859	$	7,015	$	819	$	677	$	(66)	$	(88)

		Nine Months Ended May 31,
		Qualified Pension Benefits				Nonqualified Pension Benefits				Other Benefits
		2023		2022		2023		2022		2023		2022
Components of net periodic benefit costs:		(Dollars in thousands)
Service cost		$	28,934	$	34,706	$	1,380	$	695	$	503	$	747
Interest cost		22,941		12,875		556		211		776		377
Expected return on assets		(32,347)		(32,969)		—		—		—		—
Prior service cost (credit) amortization		112		131		(86)		(86)		(334)		(334)
Actuarial loss (gain) amortization		1,404		17,555		184		359		(1,211)		(944)

Net periodic benefit cost (benefit)		$	21,044	$	32,298	$	2,034	$	1,179	$	(266)	$	(154)

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Employer Contributions

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, 2023, and we do not anticipate being required to make contributions ~~for~~to our pension plans in fiscal ~~2023,~~2024, although we may voluntarily elect to do so.

Note 10 Segment Reporting

We are an integrated agricultural cooperative, providing grain, ~~foods~~food, agronomy 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,~~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 that records earnings and allocated ~~expenses.~~expenses but not revenues. 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~~consists of ~~financial services related to crop production and~~ a U.S. Commodity Futures Trading Commission-regulated futures commission merchant ("FCM") for commodities ~~hedging.~~hedging and financial services related to crop production. Our nonconsolidated

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investments in Ventura Foods, LLC ("Ventura Foods"), and Ardent Mills, LLC ("Ardent Mills"), are also included in our Corporate and Other category.

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 and IBIT generally trend lower during the second fiscal quarter and increase in the third ~~quarter; however, our income before income taxes does not necessarily follow the same trend due to weather and other events that can impact profitability.~~fiscal quarter. 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, ~~global~~ 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.

Our revenues, assets and cash flows can be significantly affected by global market prices for commodities such as petroleum products, natural gas, grain, oilseed, ~~and oilseed products,~~ 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, ~~bank failures,~~ 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 isare 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, LLC. In our~~ Nitrogen Production segment, this consists of our approximate 8%9% 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 related to our equity method investments.

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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, 2023 and 2022, is presented in the tables below:

Energy Ag Nitrogen Production Corporate
and Other Reconciling
Amounts Total
Three Months Ended May 31, 2023 (Dollars in thousands)
Revenues, including intersegment revenues $ 2,433,108 $ 9,752,861 $ — $ 21,996 $ (181,914) $ 12,026,051
Intersegment revenues (169,021) (8,885) — (4,008) 181,914 —
Revenues, net of intersegment revenues $ 2,264,087 $ 9,743,976 $ — $ 17,988 $ — $ 12,026,051
Operating earnings (loss) 198,015 219,333 (17,393) 1,147 — 401,102
Interest expense 2,662 20,677 14,619 8,410 (9,419) 36,949
Other income (4,922) (25,001) — (10,523) 9,419 (31,027)
Equity (income) loss from investments 1,280 (9,858) (88,275) (66,087) — (162,940)
Income before income taxes $ 198,995 $ 233,515 $ 56,263 $ 69,347 $ — $ 558,120

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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


		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, 2023		(Dollars in thousands)
Three Months Ended November 30, 2023														Three Months Ended November 30, 2023	(Dollars in thousands)
Revenues, including intersegment revenues	Revenues, including intersegment revenues	$	8,084,834	$	28,520,946	$	—	$	58,574	$	(565,616)	$	36,098,738	Revenues, including intersegment revenues	$	2,919,123	$	8,660,108	$	—	$	25,367	$	(213,940)	$	11,390,658
Intersegment revenues	Intersegment revenues	(532,540)		(23,256)		—		(9,820)		565,616		—		Intersegment revenues	(201,183)		(7,943)		—		(4,814)		213,940		—
Revenues, net of intersegment revenues	Revenues, net of intersegment revenues	$	7,552,294	$	28,497,690	$	—	$	48,754	$	—	$	36,098,738	Revenues, net of intersegment revenues	$	2,717,940	$	8,652,165	$	—	$	20,553	$	—	$	11,390,658
Operating earnings (loss)	Operating earnings (loss)	857,018		383,946		(51,762)		(1,289)		—		1,187,913		Operating earnings (loss)	258,847		140,341		(16,195)		9,901		—		392,894
Interest expense	Interest expense	7,203		57,678		44,224		19,740		(22,679)		106,166		Interest expense	(8,542)		15,957		10,609		16,989		(5,385)		29,628
Other income	Other income	(13,934)		(64,588)		—		(27,786)		22,679		(83,629)		Other income	(1,279)		(26,116)		—		(22,519)		5,385		(44,529)
Equity (income) loss from investments	Equity (income) loss from investments	3,338		(48,392)		(330,855)		(147,327)		—		(523,236)		Equity (income) loss from investments	1,833		(19,220)		(63,263)		(28,401)		—		(109,051)
Income before income taxes	Income before income taxes	$	860,411	$	439,248	$	234,869	$	154,084	$	—	$	1,688,612	Income before income taxes	$	266,835	$	169,720	$	36,459	$	43,832	$	—	$	516,846
Total assets as of May 31, 2023		$	4,435,618	$	7,938,831	$	2,717,704	$	4,102,298	$	—	$	19,194,451
Total assets as of November 30, 2023														Total assets as of November 30, 2023	$	4,256,026	$	9,088,813	$	2,640,655	$	4,447,391	$	—	$	20,432,885

		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	$	7,574,881	$	27,239,897	$	—	$	32,060	$	(495,769)	$	34,351,069	Revenues, including intersegment revenues	$	3,337,125	$	9,640,559	$	—	$	16,099	$	(227,944)	$	12,765,839
Intersegment revenues	Intersegment revenues	(466,953)		(22,338)		—		(6,478)		495,769		—		Intersegment revenues	(217,819)		(7,315)		—		(2,810)		227,944		—
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	$	3,119,306	$	9,633,244	$	—	$	13,289	$	—	$	12,765,839
Operating earnings (loss)	Operating earnings (loss)	243,009		560,200		(35,525)		(26,916)		—		740,768		Operating earnings (loss)	398,659		263,502		(16,272)		(1,420)		—		644,469
Interest expense	Interest expense	4,568		45,466		34,770		(3,073)		(1,026)		80,705		Interest expense	2,056		18,567		14,421		4,125		(5,919)		33,250
Other income	Other income	(1,217)		(37,320)		(2,058)		7,752		1,026		(31,817)		Other income	(3,523)		(19,302)		—		(7,383)		5,919		(24,289)
Equity income from investments		(3,604)		(63,240)		(497,289)		(80,214)		—		(644,347)
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	$	243,262	$	615,294	$	429,052	$	48,619	$	—	$	1,336,227	Income before income taxes	$	396,594	$	287,299	$	96,873	$	36,704	$	—	$	817,470

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 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 related 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.


		May 31, 2023
				Amounts Not Offset on Condensed Consolidated Balance Sheet but Eligible for Offsetting							November 30, 2023
		Gross Amount Recognized		Cash Collateral		Derivative Instruments		Net Amount					Amounts Not Offset on Condensed Consolidated Balance Sheet but Eligible for Offsetting
		(Dollars in thousands)									Gross Amount Recognized		Cash Collateral		Derivative Instruments		Net Amount
Derivative assets	Derivative assets									Derivative assets	(Dollars in thousands)

Commodity derivatives	Commodity derivatives	$	443,518	$	—	$	6,794	$	436,724	Commodity derivatives	$	216,283	$	—	$	3,005	$	213,278
Foreign exchange derivatives	Foreign exchange derivatives	39,623		—		10,815		28,808		Foreign exchange derivatives	24,252		—		7,169		17,083

Total	Total	$	483,141	$	—	$	17,609	$	465,532	Total	$	240,535	$	—	$	10,174	$	230,361
Derivative liabilities	Derivative liabilities									Derivative liabilities
Commodity derivatives	Commodity derivatives	$	352,978	$	1,905	$	14,301	$	336,772	Commodity derivatives	$	275,972	$	2,656	$	3,905	$	269,411
Foreign exchange derivatives	Foreign exchange derivatives	13,261		—		10,815		2,446		Foreign exchange derivatives	11,671		—		7,169		4,502

Total	Total	$	366,239	$	1,905	$	25,116	$	339,218	Total	$	287,643	$	2,656	$	11,074	$	273,913


		August 31, 2022
				Amounts Not Offset on Condensed Consolidated Balance Sheet but Eligible for Offsetting							August 31, 2023
		Gross Amount Recognized		Cash Collateral		Derivative Instruments		Net Amount					Amounts Not Offset on Condensed Consolidated Balance Sheet but Eligible for Offsetting
		(Dollars in thousands)									Gross Amount Recognized		Cash Collateral		Derivative Instruments		Net Amount
Derivative assets	Derivative assets									Derivative assets	(Dollars in thousands)

Commodity derivatives	Commodity derivatives	$	464,167	$	—	$	3,834	$	460,333	Commodity derivatives	$	280,440	$	—	$	4,866	$	275,574
Foreign exchange derivatives	Foreign exchange derivatives	52,923		—		8,901		44,022		Foreign exchange derivatives	32,402		—		12,330		20,072

Total	Total	$	517,090	$	—	$	12,735	$	504,355	Total	$	312,842	$	—	$	17,196	$	295,646
Derivative liabilities	Derivative liabilities									Derivative liabilities
Commodity derivatives	Commodity derivatives	$	378,291	$	1,424	$	12,574	$	364,293	Commodity derivatives	$	349,131	$	1,505	$	4,866	$	342,760
Foreign exchange derivatives	Foreign exchange derivatives	12,649		—		8,901		3,748		Foreign exchange derivatives	13,799		—		12,330		1,469
Total	Total	$	390,940	$	1,424	$	21,475	$	368,041	Total	$	362,930	$	1,505	$	17,196	$	344,229

Derivative assets and liabilities with maturities of less than 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, 2023, and August 31, ~~2022,~~2023, was ~~$4.4~~$1.4 million and ~~$8.5~~$1.1 million, respectively. The amount of long-term derivative liabilities recorded on our Condensed Consolidated Balance Sheets as of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, was ~~$3.5~~$14.2 million and ~~$4.0~~$12.6 million, respectively.

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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, 2023 and 2022:


			Three Months Ended May 31,				Nine Months Ended May 31,						Three Months Ended November 30,
		Location of Gain (Loss)	2023		2022		2023		2022			Location of Gain (Loss)	2023		2022
			(Dollars in thousands)										(Dollars in thousands)
Commodity derivatives	Commodity derivatives	Cost of goods sold	$	(59,177)	$	(324,965)	$	(194,832)	$	(905,400)	Commodity derivatives	Cost of goods sold	$	8,184	$	(135,686)
Foreign exchange derivatives	Foreign exchange derivatives	Cost of goods sold	(21,753)		18,147		(23,792)		58,438		Foreign exchange derivatives	Cost of goods sold	(4,607)		(19,453)
Foreign exchange derivatives	Foreign exchange derivatives	Marketing, general and administrative expenses	556		1,097		804		1,600		Foreign exchange derivatives	Marketing, general and administrative expenses	820		237
Other derivatives		Other income	—		258		—		2,057

Total	Total		$	(80,374)	$	(305,463)	$	(217,820)	$	(843,305)	Total		$	4,397	$	(154,902)

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Commodity Contracts

As of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, 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, 2023		August 31, 2022			November 30, 2023		August 31, 2023
		Long	Short	Long	Short		Long	Short	Long	Short
		(Units in thousands)					(Units in thousands)
Grain and oilseed (bushels)	Grain and oilseed (bushels)	418,318	559,715	609,300	773,239	Grain and oilseed (bushels)	502,650	719,364	506,654	630,803
Energy products (barrels)	Energy products (barrels)	15,119	9,157	10,541	5,706	Energy products (barrels)	7,166	6,097	11,839	8,085
Processed grain and oilseed (tons)	Processed grain and oilseed (tons)	5,672	11,324	1,191	4,182	Processed grain and oilseed (tons)	6,594	12,252	7,380	9,437
Crop nutrients (tons)	Crop nutrients (tons)	76	15	23	22	Crop nutrients (tons)	61	—	70	10
Ocean freight (metric tons)	Ocean freight (metric tons)	60	—	60	—	Ocean freight (metric tons)	10	—	40	—
Natural gas (metric million Btu)	Natural gas (metric million Btu)	940	—	420	—	Natural gas (metric million Btu)	180	—	460	—

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~~CHS has some risk exposure 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 $1.4 billion and $1.9 billion as of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, respectively.

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, 2023, and August 31, ~~2022,~~2023, the aggregate notional amounts of cash flow hedges were ~~1.1~~5.1 million and ~~3.8~~4.1 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 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,
2023

August 31,
2022

Balance Sheet Location

May 31,
2023

August 31,
2022

Balance Sheet Location

November 30,
2023

August 31,
2023

Balance Sheet Location

November 30,
2023

August 31,
2023

(Dollars in thousands)

Other current assets

4,698

27,154

Other current liabilities

1,551

11,818

Other current assets

2,093

8,395

Other current liabilities

5,352

5,345

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, 2023 and 2022:

Three Months Ended May 31, Nine Months Ended May 31,
2023 2022 2023 2022
(Dollars in thousands)
Commodity derivatives $ (3,430) $ (36,688) $ (12,189) $ (51,961)


	Three Months Ended November 30,
	2023		2022
	(Dollars in thousands)
Commodity derivatives	$	(6,310)	$	(29,589)

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The following table presents the pretax gains (losses) 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, 2023 and 2022:

Three Months Ended May 31, Nine Months Ended May 31,
Location of Gain (Loss) 2023 2022 2023 2022
(Dollars in thousands)
Commodity derivatives Cost of goods sold $ 2,590 $ (5,482) $ (13,468) $ 12,777


		Three Months Ended November 30,
	Location of Gain (Loss)	2023		2022
		(Dollars in thousands)
Commodity derivatives	Cost of goods sold	$	8,082	$	(6,929)

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 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 use of observable inputs and minimize 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.

Recurring fair value measurements as of November 30, 2023, and August 31, 2023, are as follows:


	November 30, 2023
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets	(Dollars in thousands)

Commodity derivatives	$	2,624	$	215,752	$	—	$	218,376
Foreign exchange derivatives	—		24,252		—		24,252




Segregated investments and marketable securities	172,665		—		—		172,665
Other assets	51,941		—		—		51,941
Total	$	227,230	$	240,004	$	—	$	467,234
Liabilities
Commodity derivatives	$	2,320	$	279,004	$	—	$	281,324
Foreign exchange derivatives	—		11,671		—		11,671

Total	$	2,320	$	290,675	$	—	$	292,995

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~~Recurring fair value measurements as of May 31, 2023, and August 31, 2022, are as follows:~~

May 31, 2023
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)
Assets
Commodity derivatives $ 2,118 $ 446,098 $ — $ 448,216
Foreign exchange derivatives — 39,623 — 39,623
Segregated investments and marketable securities 221,295 — — 221,295
Other assets 49,066 — — 49,066
Total $ 272,479 $ 485,721 $ — $ 758,200
Liabilities
Commodity derivatives $ 8,372 $ 346,157 $ — $ 354,529
Foreign exchange derivatives — 13,261 — 13,261
Total $ 8,372 $ 359,418 $ — $ 367,790


		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			August 31, 2023
		(Dollars in thousands)									Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets	Assets									Assets	(Dollars in thousands)

Commodity derivatives	Commodity derivatives	$	1,161	$	490,160	$	—	$	491,321	Commodity derivatives	$	5,344	$	283,491	$	—	$	288,835
Foreign exchange derivatives	Foreign exchange derivatives	—		52,923		—		52,923		Foreign exchange derivatives	—		32,402		—		32,402

Segregated investments and marketable securities	Segregated investments and marketable securities	238,124		—		—		238,124		Segregated investments and marketable securities	225,715		—		—		225,715
Other assets	Other assets	58,280		—		—		58,280		Other assets	89,592		—		—		89,592
Total	Total	$	297,565	$	543,083	$	—	$	840,648	Total	$	320,651	$	315,893	$	—	$	636,544
Liabilities	Liabilities									Liabilities
Commodity derivatives	Commodity derivatives	$	10,256	$	379,883	$	—	$	390,139	Commodity derivatives	$	7,501	$	346,975	$	—	$	354,476
Foreign exchange derivatives	Foreign exchange derivatives	—		12,649		—		12,649		Foreign exchange derivatives	—		13,799		—		13,799

Total	Total	$	10,256	$	392,532	$	—	$	402,788	Total	$	7,501	$	360,774	$	—	$	368,275

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.

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

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

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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~~laws 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 $1.1 billion, of which ~~$74.3~~$158.6 million were outstanding on ~~May 31,~~November 30, 2023. 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, 2023.

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Note 14 Other Current Assets and Liabilities

Other current assets and liabilities as of ~~May 31,~~November 30, 2023, and August 31, ~~2022,~~2023, are as follows:


		May 31, 2023		August 31, 2022			November 30, 2023		August 31, 2023
Other current assets	Other current assets	(Dollars in thousands)				Other current assets	(Dollars in thousands)
Derivative assets (Note 11)	Derivative assets (Note 11)	$	483,436	$	535,698	Derivative assets (Note 11)	$	241,237	$	320,119
Margin and related deposits	Margin and related deposits	275,457		390,782		Margin and related deposits	262,298		342,872
Prepaid expenses						Prepaid expenses	187,036		149,682
Supplier advance payments	Supplier advance payments	223,419		198,753		Supplier advance payments	446,142		136,304
Restricted cash	Restricted cash	77,608		109,517		Restricted cash	69,156		79,301
Other	Other	209,129		147,954		Other	7,462		14,095
Total other current assets	Total other current assets	$	1,269,049	$	1,382,704	Total other current assets	$	1,213,331	$	1,042,373
Other current liabilities	Other current liabilities					Other current liabilities
Customer margin deposits and credit balances	Customer margin deposits and credit balances	$	148,658	$	283,234	Customer margin deposits and credit balances	$	126,620	$	197,315
Customer advance payments	Customer advance payments	469,753		525,003		Customer advance payments	442,181		356,760
Derivative liabilities (Note 11)	Derivative liabilities (Note 11)	364,291		398,781		Derivative liabilities (Note 11)	278,815		355,696
Dividends and equity payable	Dividends and equity payable	885,659		1,000,000		Dividends and equity payable	760,930		730,000
Total other current liabilities	Total other current liabilities	$	1,868,361	$	2,207,018	Total other current liabilities	$	1,608,546	$	1,639,771

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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 ~~2023 Third~~2024 First Quarter Highlights

•Fiscal ~~2023~~2024 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, ~~2022~~2023 (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 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~~Energy.. Produces and provides primarily for ~~the~~ wholesale distribution and transportation of petroleum products.

•AgAg.. Purchases and further processes or resells grain and oilseed originated by our country operations and global grain and processing businesses, by our member cooperatives and by third parties. It also includes our renewable fuels business and 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 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.~~control. The effects of all significant intercompany transactions have been eliminated.

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. We also 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 and IBIT generally trend lower during the second fiscal quarter and increase in the third ~~quarter; however, our IBIT does not necessarily follow the same trend due to weather and other events that can impact profitability.~~fiscal quarter. 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

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operations are subject to fluctuations in volumes and revenues based on producer harvests, world grain prices, global demand and international trade relationships. Our Energy segment generally experiences higher volumes and revenues in

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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:~~businesses.

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

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Fiscal ~~2023 Third~~2024 First Quarter Highlights

•~~Robust global demand and market volatility continued to result in commodity prices that are elevated~~Earnings remained strong across our segments, although down from ~~historical averages.~~

•Strong meal and oil demand resulted in improved oilseed crush margins that contributed to higher earnings in our oilseed processing business, which was partially offset by decreased prices for agronomy products in our Ag segment.the record first quarter of fiscal 2023.

•Our Energy segment ~~continued to deliver strong earnings as a result of~~experienced favorable market conditions in our refined fuels business, including sustained ~~high~~ global demand for energy products, but refining margins have decreased from the highs in the prior year as ~~consumption outpaced supply.~~a result of trade flows returning to more normal levels.

•In our Ag segment, continued robust meal and oil demand drove strong earnings in our oilseed processing business that were offset by weak U.S. export demand for grain and oilseed.

•Equity method investments ~~continued to perform~~performed well, with our CF Nitrogen ~~and Ventura Foods investments~~investment being the largest ~~contributors.~~

•We completed planned major maintenance to overhaul, repair, inspect and replace process materials and equipment (referred to in the industry as "turnaround") at our Laurel, Montana, refinery during April and May 2023.contributor.

Fiscal ~~2023~~2024 Trends Update

Our segments operate in cyclical environments in which market conditions can change rapidly with significant positive or negative impacts on our results. We anticipate that various macroeconomic factors ~~including the ongoing war between Russia and Ukraine; rising interest rates; bank failures and potential bank failures; and inflationary pressures increasing costs of labor, freight and materials;~~ will continue to drive uncertainty and instability in global energy and agricultural commodity markets, as well as in global financial ~~markets. This uncertainty and instability~~markets, which could have a significant impact on each of our segments ~~through~~during the remainder of fiscal ~~2023.~~2024. These factors include the ongoing war between Russia and Ukraine and escalation of conflict in the Middle East, shifts in global trade flows for commodities, a higher interest rate environment, and inflationary pressures increasing costs of labor, freight and materials. In addition to these broad macroeconomic factors, other factors could impact the demand and pricing for agricultural inputs and outputs, as well as our ability to supply those inputs and ~~outputs.~~outputs while remaining profitable. These include the cost of renewable energy credits, the prices of which remains ~~higher than historical levels~~volatile and could continue to negatively impact our profitability, and regional factors, such as unpredictable weather conditions, including those due to climate change. We currently expect the imbalance between global supply and strong global demand for energy and agricultural commodities to continue to moderate through the remainder of fiscal ~~2023.~~2024. We are unable to predict how long the current environment ~~and market conditions~~ will last or the ~~extent~~severity of the financial and operational impacts to us in fiscal ~~2023.~~2024. Refer to Item 1A of our Annual Report on Form 10-K for the year ended August 31, ~~2022, and Item 1A of our Quarterly Report on Form 10-Q for the quarter ended February 28,~~ 2023 for additional impacts that these and other risks may have on our business operations and financial performance.

~~In addition to navigating market conditions that impact our businesses, we~~We will continue to execute our enterprise priorities for fiscal ~~2023,~~2024, including empowering and ~~supporting~~investing in our people, ~~advancing~~accelerating our operating model ~~by transforming how we work and adopting new technologies, and strategically investing in our infrastructure~~ to ~~meet the evolving needs of our~~better serve owners and customers, ~~enhancing value for the cooperative system~~navigating dynamic and ~~propelling~~changing market conditions, and elevating sustainable ~~growth.~~growth through empowered teams, an integrated operating model and a solid financial foundation.

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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,
2023 2022 2023 2022
Refinery throughput volumes* (Barrels per day)
Heavy, high-sulfur crude oil 80,994 106,658 90,878 104,090
All other crude oil 71,037 72,915 70,704 72,359
Other feedstocks and blendstocks 14,543 11,436 11,594 14,007
Total refinery throughput volumes 166,574 191,009 173,176 190,456
Refined fuel yields*
Gasolines 79,690 87,174 78,805 89,602
Distillates 69,460 85,078 75,640 82,396

*Lower refinery throughput volumes and refined fuel yields experienced during the three and nine months ended May 31, 2023, are primarily due to a planned shutdown to perform major maintenance at our Laurel, Montana, refinery.


	Three Months Ended November 30,
	2023	2022
Refinery throughput volumes	(Barrels per day)
Heavy, high-sulfur crude oil	105,172	89,415
All other crude oil	71,931	71,271
Other feedstocks and blendstocks	14,021	10,708
Total refinery throughput volumes	191,124	171,394
Refined fuel yields
Gasolines	85,760	76,014
Distillates	85,072	75,393

We are subject to the Renewable Fuel Standard ~~which~~that 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 2023, the EPA issued ~~its~~a final renewable volume obligation ("RVO") for calendar years ~~2023~~2020 through 2025. We generate RINs through our blending activities, but we cannot generate enough RINs to meet the needs of our refining ~~capacity, and~~capacity; therefore, RINs must be purchased on the open market. The price of RINs can be volatile, ~~which can impact our profitability. The~~with prices for D6 ethanol RINs and D4 biodiesel RINs ~~increased~~decreasing by ~~16%~~42% and ~~decreased by 5%~~47%, respectively, during the ~~third quarter of fiscal~~three months ended November 30, 2023, compared to the same period induring the prior ~~year.~~year, which positively impacted our earnings. Estimates of our RIN 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)~~oil inputs) 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 ~~for~~of refined products. Crack spreads and WCS crude oil discounts both ~~increased~~decreased during the ~~nine~~three months ended ~~May 31,~~November 30, 2023, compared to the same period during the prior year, ~~which contributed~~contributing to ~~improved~~lower IBIT for the Energy segment during the period. Although the WCS crude oil discount increased during the three months ended May 31, 2023, and resulted in improved IBIT for the Energy segment during the quarter, crack spreads decreased in the third quarter of fiscal 2023 relative to the same period during the prior year.segment. The table below provides information about average market reference prices and ~~discounts~~differentials that impacted our Energy ~~segment during the three and nine months ended May 31, 2023 and 2022:~~segment:


		Three Months Ended May 31,				Nine Months Ended May 31,					Three Months Ended November 30,
		2023		2022		2023		2022			2023		2022
Market indicators	Market indicators									Market indicators
WTI crude oil (dollars per barrel)	WTI crude oil (dollars per barrel)	$	74.81	$	106.39	$	79.05	$	88.54	WTI crude oil (dollars per barrel)	$	84.09	$	85.15
WTI - WCS crude oil discount (dollars per barrel)	WTI - WCS crude oil discount (dollars per barrel)	$	17.24	$	12.98	$	22.48	$	14.03	WTI - WCS crude oil discount (dollars per barrel)	$	18.20	$	25.16
Group 3 2:1:1 crack spread (dollars per barrel)*	Group 3 2:1:1 crack spread (dollars per barrel)*	$	32.74	$	38.86	$	35.99	$	24.93	Group 3 2:1:1 crack spread (dollars per barrel)*	$	30.65	$	44.76
Group 3 5:3:2 crack spread (dollars per barrel)*	Group 3 5:3:2 crack spread (dollars per barrel)*	$	32.12	$	36.30	$	33.54	$	23.70	Group 3 5:3:2 crack spread (dollars per barrel)*	$	27.72	$	40.40
D6 ethanol RIN (dollars per RIN)	D6 ethanol RIN (dollars per RIN)	$	1.5263	$	1.3176	$	1.6063	$	1.1995	D6 ethanol RIN (dollars per RIN)	$	0.9687	$	1.6733
D4 biodiesel RIN (dollars per RIN)	D4 biodiesel RIN (dollars per RIN)	$	1.5593	$	1.6443	$	1.6903	$	1.5175	D4 biodiesel RIN (dollars per RIN)	$	0.9700	$	1.8259

*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 the 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, as well as sales and ~~our sales/~~throughput volumes that impacted our Ag segment for the three ~~and nine~~ months ended ~~May 31,~~November 30, 2023 and 2022:


			Three Months Ended May 31,				Nine Months Ended May 31,						Three Months Ended November 30,
		Market Source*	2023		2022		2023		2022			Market Source*	2023		2022
Commodity prices	Commodity prices										Commodity prices
Corn (dollars per bushel)	Corn (dollars per bushel)	Chicago Board of Trade	$	6.30	$	7.74	$	6.57	$	6.34	Corn (dollars per bushel)	Chicago Board of Trade	$	4.72	$	6.77
Soybeans (dollars per bushel)	Soybeans (dollars per bushel)	Chicago Board of Trade	$	14.17	$	16.70	$	14.49	$	14.18	Soybeans (dollars per bushel)	Chicago Board of Trade	$	13.02	$	14.14
Wheat (dollars per bushel)	Wheat (dollars per bushel)	Chicago Board of Trade	$	6.35	$	10.46	$	7.47	$	8.74	Wheat (dollars per bushel)	Chicago Board of Trade	$	5.56	$	8.58
Urea (dollars per ton)	Urea (dollars per ton)	Green Markets NOLA	$	351.04	$	745.00	$	448.50	$	688.00	Urea (dollars per ton)	Green Markets NOLA	$	368.62	$	589.27
Urea ammonium nitrate (dollars per ton)	Urea ammonium nitrate (dollars per ton)	Green Markets NOLA	$	268.92	$	615.04	$	396.93	$	539.52	Urea ammonium nitrate (dollars per ton)	Green Markets NOLA	$	250.78	$	540.16
Ethanol (dollars per gallon)	Ethanol (dollars per gallon)	Chicago Platts	$	2.37	$	2.62	$	2.35	$	2.62	Ethanol (dollars per gallon)	Chicago Platts	$	2.16	$	2.50

Volumes	Volumes										Volumes
Grain and oilseed (thousands of bushels)	Grain and oilseed (thousands of bushels)		544,908		575,827		1,629,545		1,674,894		Grain and oilseed (thousands of bushels)		591,412		517,439
North American grain and oilseed port throughput (thousands of bushels)	North American grain and oilseed port throughput (thousands of bushels)		135,329		176,773		471,920		536,695		North American grain and oilseed port throughput (thousands of bushels)		178,700		161,715
Wholesale crop nutrients (thousands of tons)	Wholesale crop nutrients (thousands of tons)		2,113		1,750		5,098		4,949		Wholesale crop nutrients (thousands of tons)		1,870		1,612
Ethanol (thousands of gallons)	Ethanol (thousands of gallons)		236,035		234,679		717,438		687,280		Ethanol (thousands of gallons)		247,001		243,761

*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, 2023 and 2022


		Three Months Ended May 31,									Three Months Ended November 30,
		2023		% of Revenues*		2022		% of Revenues*			2023		% of Revenues*		2022		% of Revenues*
		(Dollars in thousands)									(Dollars in thousands)
Revenues	Revenues	$	12,026,051	100.0	%	$	13,137,724	100.0	%	Revenues	$	11,390,658	100.0	%	$	12,765,839	100.0	%
Cost of goods sold	Cost of goods sold	11,351,711		94.4		12,493,467		95.1		Cost of goods sold	10,745,708		94.3		11,886,704		93.1
Gross profit	Gross profit	674,340		5.6		644,257		4.9		Gross profit	644,950		5.7		879,135		6.9
Marketing, general and administrative expenses	Marketing, general and administrative expenses	273,238		2.3		243,136		1.9		Marketing, general and administrative expenses	252,056		2.2		234,666		1.8
Operating earnings	Operating earnings	401,102		3.3		401,121		3.1		Operating earnings	392,894		3.4		644,469		5.0

Interest expense	Interest expense	36,949		0.3		32,099		0.2		Interest expense	29,628		0.3		33,250		0.3
Other income	Other income	(31,027)		(0.3)		(6,636)		(0.1)		Other income	(44,529)		(0.4)		(24,289)		(0.2)
Equity income from investments	Equity income from investments	(162,940)		(1.4)		(263,079)		(2.0)		Equity income from investments	(109,051)		(1.0)		(181,962)		(1.4)
Income before income taxes	Income before income taxes	558,120		4.6		638,737		4.9		Income before income taxes	516,846		4.5		817,470		6.4
Income tax expense		10,777		0.1		62,492		0.5
Income tax (benefit) expense										Income tax (benefit) expense	(6,522)		(0.1)		34,554		0.3
Net income	Net income	547,343		4.6		576,245		4.4		Net income	523,368		4.6		782,916		6.1
Net loss attributable to noncontrolling interests	Net loss attributable to noncontrolling interests	(156)		—		(329)		—		Net loss attributable to noncontrolling interests	445		—		318		—
Net income attributable to CHS Inc.	Net income attributable to CHS Inc.	$	547,499	4.6	%	$	576,574	4.4	%	Net income attributable to CHS Inc.	$	522,923	4.6	%	$	782,598	6.1	%

*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 three months ended ~~May 31,~~November 30, 2023. 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
2023 2022 Dollars Percent
(Dollars in thousands)
Income before income taxes $ 198,995 $ 163,241 $ 35,754 21.9 %


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Income before income taxes	$	266,835	$	396,594	$	(129,759)	(32.7	%)

The following waterfall analysis and commentary presents the changes in our Energy segment IBIT for the three months ended ~~May 31,~~November 30, 2023, 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:

•~~Increased margins resulting~~Lower crack spreads and decreased WCS crude oil discounts resulted from ~~hedging-related gains due to~~ global market conditions, ~~and increased WCS crude oil discounts~~which contributed to a $228.0 million decrease of IBIT.

•The overall decreased IBIT was partially offset by the following:

◦Decreased costs for RINs in our refined fuels business contributed to ~~$101.0~~a $47.6 million ~~and $33.2 million increases of IBIT, respectively.~~cost reduction;

•◦~~Increased~~Higher margins ~~were partially offset by decreased~~for propane attributable to hedging-related impacts due to global market conditions affecting the price of propane contributed $40.9 million increased IBIT; and

◦Higher refined fuels production volumes ~~due to planned major maintenance at our Laurel, Montana, refinery, which reduced~~during the ~~sales~~current year increased the mix of higher-margin produced refined fuels compared to the prior ~~period~~year and contributed to a ~~$74.0~~$32.4 million ~~decrease~~increase of IBIT.

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	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Income before income taxes	$	169,720	$	287,299	$	(117,579)	(40.9	%)

The following waterfall analysis and commentary presents the changes in our Ag segment IBIT for the three months ended November 30, 2023, compared to the same period during the prior year:

The change in Ag segment IBIT reflects the following:

•Decreased margins for our grain and oilseed and oilseed processing product categories, primarily as a result of the timing of the impact of mark-to-market adjustments associated with our commodity derivatives and weak U.S. export demand leading to compressed margins, contributed to $105.3 million and $34.8 million decreases of IBIT, ~~as well as~~respectively.

•Higher volumes of grain and oilseed resulted in a $20.5 million increase of IBIT due to more favorable weather conditions in parts of our trade territory relative to the prior year.

All Other Segments


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Nitrogen Production IBIT*	$	36,459	$	96,873	$	(60,414)	(62.4	%)
Corporate and Other IBIT	$	43,832	$	36,704	$	7,128	19.4	%

*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 decreased from the prior year due to lower ~~crack spreads that~~equity income attributed to decreased selling prices of urea and UAN, which was partially offset by decreased natural gas costs, all due to global supply and demand factors. Corporate and Other IBIT increased primarily due to increased interest income resulting from higher interest rates and a larger cash balance.

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Revenues by Segment

Energy


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Revenues	$	2,717,940	$	3,119,306	$	(401,366)	(12.9	%)

The following waterfall analysis and commentary presents the changes in our Energy segment revenues for the three months ended November 30, 2023, compared to the same period during the prior year:

The change in Energy segment revenues reflects the following:

•Decreased selling prices resulting from global market conditions contributed to ~~a $54.3~~$299.1 million ~~decrease of IBIT.~~and $50.9 million decreases in revenues for refined fuels and propane, respectively.

•Lower refined fuels and propane volumes contributed to $22.3 million and $17.3 million decreases in revenues, respectively, primarily driven by lower demand.

Table of Contents

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Income before income taxes $ 233,515 $ 273,688 $ (40,173) (14.7 %)


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Revenues	$	8,652,165	$	9,633,244	$	(981,079)	(10.2	%)

The following waterfall analysis and commentary presents the changes in our Ag segment ~~IBIT~~revenues for the three months ended ~~May 31,~~November 30, 2023, compared to the same period during the prior year:

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

•Decreased ~~margins~~selling prices across all of our Ag segment product categories during the first quarter of fiscal 2024, including:

◦$1.5 billion decrease for grain and oilseed primarily as a result of less favorable global market conditions;

◦$498.7 million decrease for wholesale and retail agronomy products ~~resulted from market-driven price decreases~~driven by lower urea and UAN prices; and

◦$76.1 million decrease for renewable fuels due to global market conditions.

•Increased volumes for grain and oilseed contributed to a ~~$99.9~~$929.7 million ~~decrease~~increase in revenues due to a combination of ~~IBIT.~~factors, including more favorable weather conditions in parts of our trade territory and stronger global demand for grain.

•The margin decrease in Ag segment IBIT was partially offset by increased margins in our grain and oilseed and oilseed processing product categories due to strong meal and oil demand resulting in improved crush margins.

•~~Higher~~Increased volumes of wholesale and retail agronomy products contributed to a ~~$31.1~~$184.0 million increase ~~of IBIT due to~~in revenues, which experienced increased demand during the ~~third~~first quarter of fiscal ~~2023~~2024 as prices ~~declined~~remained lower due to global market conditions.

All Other Segments

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Nitrogen Production IBIT* $ 56,263 $ 178,212 $ (121,949) (68.4 %)
Corporate and Other IBIT $ 69,347 $ 23,596 $ 45,751 193.9 %


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Corporate and Other revenues*	$	20,553	$	13,289	$	7,264	54.7	%

*~~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 reportable segment ~~IBIT decreased from the prior year due to lower~~represents an equity ~~income attributed to decreased selling prices of urea~~method investment that records earnings and ~~UAN due to global supply and demand factors.~~allocated expenses but not revenues.

Corporate and Other ~~IBIT~~revenues increased ~~primarily due to increased equity income from our Ventura Foods, LLC ("Ventura Foods"), investment as a result of more favorable market conditions for edible oils experienced~~ during the ~~third quarter of fiscal~~three months ended November 30, 2023, compared to the same period induring the prior year, ~~as well as~~primarily due to increased interest income ~~due to~~as a result of a larger notes receivable balance and higher interest rates.

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~~Revenues~~Cost of Goods Sold by Segment

Energy

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Revenues $ 2,264,087 $ 2,775,942 $ (511,855) (18.4 %)


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Cost of goods sold	$	2,388,273	$	2,654,729	$	(266,456)	(10.0	%)

The following waterfall analysis and commentary presents the changes in our Energy segment ~~revenues~~COGS for the three months ended ~~May 31,~~November 30, 2023, compared to the same period during the prior year:

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

•~~Decreased selling prices~~Global market conditions, including reduced RIN costs, contributed to decreased costs for refined fuels and propane that drove $127.9 million and $90.1 million decreases in COGS, respectively.

•Lower volumes of propane and refined fuels resulting from decreased demand and global market conditions contributed to ~~$545.5~~decreased COGS of $20.2 million and ~~$62.9~~$18.4 million, ~~decreases of revenues for refined fuels and propane,~~ respectively.

•

~~Higher refined fuels volumes contributed to a $91.5 million increase in revenues driven by higher demand.~~

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Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Revenues $ 9,743,976 $ 10,352,369 $ (608,393) (5.9 %)

~~The following waterfall analysis and commentary presents the changes in our Ag segment revenues for the three months ended May 31, 2023, compared to the same period during the prior year:~~

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

•~~Decreased selling prices across many of our Ag segment product categories during the third quarter of fiscal 2023, included:~~

◦~~$654.0 million decrease for wholesale and retail agronomy products driven by lower urea and UAN prices;~~

◦~~$64.1 million decrease for renewable fuels resulting from lower ethanol prices due to decreased demand; and~~

◦~~$36.7 million decrease for oilseed processing due to global market conditions.~~

•Increased volumes of wholesale and retail agronomy products contributed to a $374.6 million increase in revenues, which experienced increased demand during the third quarter of fiscal 2023 as prices declined due to global market conditions.

•The overall volume increase was mostly offset by decreased volumes within our grain and oilseed product category due to a combination of factors, including drought conditions in parts of our trade territory and lower global demand for U.S. grain.

~~All Other Segments~~

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Corporate and Other revenues* $ 17,988 $ 9,413 $ 8,575 91.1 %

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

Corporate and Other revenues increased during the three months ended May 31, 2023, compared to the same period during the prior year, primarily as a result of increased interest income due to higher interest rates.

~~Table of Contents~~

~~Cost of Goods Sold by Segment~~

~~Energy~~

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Cost of goods sold $ 1,989,646 $ 2,533,135 $ (543,489) (21.5 %)

~~The following waterfall analysis and commentary presents the changes in our Energy segment COGS for the three months ended May 31, 2023, compared to the same period during the prior year:~~

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

•~~Global market conditions contributed to decreased costs for refined fuels and propane that drove $583.7 million and $52.3 million decreases in COGS, respectively.~~

•~~Higher volumes of refined fuels resulting from higher demand contributed to increased COGS of $83.2 million.~~

~~Table of Contents~~

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Cost of goods sold $ 9,365,319 $ 9,960,631 $ (595,312) (6.0 %)


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Cost of goods sold	$	8,360,579	$	9,232,728	$	(872,149)	(9.4	%)

The following waterfall analysis and commentary presents the changes in our Ag segment COGS for the three months ended ~~May 31,~~November 30, 2023, compared to the same period during the prior year:

The change in Ag segment COGS reflects the following:

•Lower costs across ~~many~~all of our Ag segment product categories during the ~~third~~first quarter of fiscal ~~2023, included:~~2024, including:

◦$~~554.1~~1.4 billion decrease for grain and oilseed primarily driven by less favorable global market conditions;

◦$482.5 million decrease for wholesale and retail agronomy products driven by lower urea and UAN prices;

◦~~$65.4 million decrease for oilseed processing due to lower commodity prices;~~ and

◦$~~53.5~~102.1 million decrease for renewable fuels primarily resulting from lower input costs.

•Increased volumes for grain and oilseed contributed to a $909.2 million increase in COGS due to a combination of factors, including more favorable weather conditions in parts of our trade territory and stronger global demand for grain.

•Increased volumes of wholesale and retail agronomy products contributed to a ~~$343.5~~$176.4 million increase in COGS, which experienced increased demand during the ~~third~~first quarter of fiscal ~~2023~~2024 as prices ~~declined~~remained lower due to global market conditions.

•The overall volume increase was mostly offset by volume decreases within our grain and oilseed product category primarily due to drought conditions in parts of our trade territory and lower global demand for U.S. grain.

All Other Segments


		Three Months Ended May 31,				Change					Three Months Ended November 30,				Change
		2023		2022		Dollars		Percent			2023		2022		Dollars		Percent
		(Dollars in thousands)									(Dollars in thousands)
Nitrogen Production COGS	Nitrogen Production COGS	$	424	$	428	$	(4)	(0.9	%)	Nitrogen Production COGS	$	412	$	428	$	(16)	(3.7	%)
Corporate and Other COGS	Corporate and Other COGS	$	(3,678)	$	(727)	$	(2,951)	(405.9	%)	Corporate and Other COGS	$	(3,557)	$	(1,181)	$	(2,376)	(201.2	%)

There were no significant changes on a dollar basis to COGS in our Nitrogen Production segment or Corporate and Other during the three months ended ~~May 31,~~November 30, 2023, compared to the same period during the prior year.

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Marketing, General and Administrative Expenses

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Marketing, general and administrative expenses $ 273,238 $ 243,136 $ 30,102 12.4 %


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Marketing, general and administrative expenses	$	252,056	$	234,666	$	17,390	7.4	%

Marketing, general and administrative expenses increased during the three months ended ~~May 31,~~November 30, 2023, primarily due to higher salary ~~and benefit~~ expenses, as well as ~~costs related~~higher consulting expenses primarily associated with our enterprise resource planning system implementation and other technologies to ~~certain legal matters.~~advance our operating model.

Interest Expense

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Interest expense $ 36,949 $ 32,099 $ 4,850 15.1 %


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Interest expense	$	29,628	$	33,250	$	(3,622)	(10.9	%)

Interest expense ~~increased~~decreased during the three months ended ~~May 31,~~November 30, 2023, as a result of decreased notes payable balances, which was partially offset by higher interest rates compared to the same period in the prior ~~year, which was partially offset by decreased notes payable balances.~~year.

Other Income

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Other income $ 31,027 $ 6,636 $ 24,391 367.6 %


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Other income	$	44,529	$	24,289	$	20,240	83.3	%

Other income increased during the three months ended ~~May 31,~~November 30, 2023, primarily as a result of increased interest income due to higher interest rates and a larger cash ~~balance earning interest.~~balance.

Equity Income from Investments

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Equity income from investments* $ 162,940 $ 263,079 $ (100,139) (38.1 %)


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Equity income from investments*	$	109,051	$	181,962	$	(72,911)	(40.1	%)

*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 decreased during the three months ended ~~May 31,~~November 30, 2023, compared to the same period during the prior year, primarily due to lower income associated with our equity method investment in CF Nitrogen ~~partially offset by higher income associated with our equity method investment in Ventura Foods. Equity income decreased for CF Nitrogen~~ as a result of lower prices of urea and UAN due to global supply and demand ~~factors and increased for Ventura Foods as a result of more favorable market conditions for edible oils.~~factors.

Income Tax (Benefit) Expense

Three Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Income tax expense $ 10,777 $ 62,492 $ (51,715) (82.8 %)


	Three Months Ended November 30,				Change
	2023		2022		Dollars		Percent
	(Dollars in thousands)
Income tax (benefit) expense	$	(6,522)	$	34,554	$	(41,076)	(118.9	%)

~~Decreased~~The income tax ~~expense~~benefit during the three months ended ~~May 31,~~November 30, 2023, resulted primarily from ~~decreased nonpatronage earnings~~the recognition of research and ~~additional Domestic Production Activities Deduction ("DPAD") benefit~~development tax credits during the period. Effective tax rates for the three months ended ~~May 31,~~November 30, 2023 and 2022, were ~~1.9%~~(1.3)% and ~~9.8%~~4.2%, respectively. Federal and state statutory rates of ~~24.7%~~24.5% and 24.4% were applied to nonpatronage business activity for the three months ended ~~May 31,~~November 30, 2023 and 2022, respectively. Income taxes and effective tax rates vary each year based on profitability, income tax credits, nonpatronage business activity and current equity management assumptions.

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~~Results of Operations~~

~~Nine Months Ended May 31, 2023 and 2022~~

Nine Months Ended May 31,
2023 % of Revenues* 2022 % of Revenues*
(Dollars in thousands)
Revenues $ 36,098,738 100.0 % $ 34,351,069 100.0 %
Cost of goods sold 34,160,996 94.6 32,917,906 95.8
Gross profit 1,937,742 5.4 1,433,163 4.2
Marketing, general and administrative expenses 749,829 2.1 692,395 2.0
Operating earnings 1,187,913 3.3 740,768 2.2
Interest expense 106,166 0.3 80,705 0.2
Other income (83,629) (0.2) (31,817) (0.1)
Equity income from investments (523,236) (1.4) (644,347) (1.9)
Income before income taxes 1,688,612 4.7 1,336,227 3.9
Income tax expense 66,305 0.2 89,143 0.3
Net income 1,622,307 4.5 1,247,084 3.6
Net loss attributable to noncontrolling interests (111) — (451) —
Net income attributable to CHS Inc. $ 1,622,418 4.5 % $ 1,247,535 3.6 %

*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, 2023. 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~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Income before income taxes $ 860,411 $ 243,262 $ 617,149 253.7 %

~~The following waterfall analysis and commentary presents the changes in our Energy segment IBIT for the nine months ended May 31, 2023, 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 resulted from higher global demand and improved market conditions in our refined fuels business, which contributed to a $742.3 million increase of IBIT.

•Higher margins for refined fuels and propane attributable to hedging-related impacts due to global market conditions affecting the price of these products contributed to $108.0 million and $19.6 million increases of IBIT, respectively.

•The increased IBIT was partially offset by the impact of decreased refined fuels production volumes due to planned and unplanned major maintenance at our Laurel and McPherson refineries that reduced the sales mix of higher-margin produced refined fuels compared to the prior year and contributed to a $170.0 million decrease of IBIT.

•Increased costs in our refined fuels business also partially offset the increased IBIT, the most significant of which included $59.0 million related to higher RIN prices due to market conditions and $33.0 million of higher repair and maintenance expenses in the current year.

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Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Income before income taxes $ 439,248 $ 615,294 $ (176,046) (28.6 %)

~~The following waterfall analysis and commentary presents the changes in our Ag segment IBIT for the nine months ended May 31, 2023, compared to the same period during the prior year:~~

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

•~~Decreased margins of $238.7 million were realized primarily for wholesale and retail agronomy products, which experienced market-driven price decreases during the period.~~

•~~Decreased margins of $47.6 million for renewable fuels resulted from decreased ethanol prices.~~

•Overall decreased Ag margins were partially offset by increased margins of $63.5 million and $40.8 million in our oilseed processing and grain and oilseed product categories due to strong meal and oil crush margins and favorable global market conditions, respectively.

~~All Other Segments~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Nitrogen Production IBIT* $ 234,869 $ 429,052 $ (194,183) (45.3 %)
Corporate and Other IBIT $ 154,084 $ 48,619 $ 105,465 216.9 %

*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 decreased from the prior year as a result of lower equity income attributed to decreased selling prices of urea and UAN due to global supply and demand factors. Corporate and Other IBIT increased primarily due to increased equity income from our Ventura Foods investment as a result of more favorable market conditions for edible oils experienced during the first nine months of fiscal 2023 compared to the same period in the prior year, as well as increased interest income due to higher interest rates.

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~~Revenues by Segment~~

~~Energy~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Revenues $ 7,552,294 $ 7,107,928 $ 444,366 6.3 %

~~The following waterfall analysis and commentary presents the changes in our Energy segment revenues for the nine months ended May 31, 2023, compared to the same period during the prior year:~~

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

•Global market conditions contributed to increased selling prices for refined fuels that contributed to a $390.2 million increase in revenues, which was partially offset by lower selling prices for propane, which resulted in a $135.0 million decrease in revenues.

•~~Higher refined fuels volumes driven by higher demand contributed to a $151.6 million increase in revenues.~~

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Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Revenues $ 28,497,690 $ 27,217,559 $ 1,280,131 4.7 %

~~The following waterfall analysis and commentary presents the changes in our Ag segment revenues for the nine months ended May 31, 2023, compared to the same period during the prior year:~~

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

•Higher revenues were primarily attributed to market-driven price increases for grain and oilseed, which resulted from increased global demand during the first nine months of fiscal 2023 and contributed to a $2.5 billion increase of revenues.

•~~The overall increase of revenues was partially offset by a $1.1 billion decrease in revenues for wholesale and retail agronomy products driven by lower urea and UAN prices.~~

•Volumes decreased within our grain and oilseed product category due to a combination of factors, including lower crop yields resulting from drought conditions experienced in portions of our trade territory in North America, and contributed to a $464.0 million decrease in revenues.

•The overall volume decrease was partially offset by volume increases in most of our product categories, including a $119.9 million increase in revenues for oilseed processing driven by strong meal and oil demand, a $79.8 million increase in revenues for renewable fuels due to higher demand and a $47.5 million increase in revenues for retail and wholesale agronomy products, which experienced increased demand during the third quarter of fiscal 2023 as prices declined due to global market conditions.

~~All Other Segments~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Corporate and Other revenues* $ 48,754 $ 25,582 $ 23,172 90.6 %

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

Corporate and Other revenues increased during the nine months ended May 31, 2023, compared to the same period during the prior year, primarily as a result of increased interest income due to higher interest rates.

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~~Cost of Goods Sold by Segment~~

~~Energy~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Cost of goods sold $ 6,475,627 $ 6,665,612 $ (189,985) (2.9 %)

~~The following waterfall analysis and commentary presents the changes in our Energy segment COGS for the nine months ended May 31, 2023, compared to the same period during the prior year:~~

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

•~~Global market conditions, including hedging-related impacts for refined fuels and propane, contributed to $215.2 million and $154.2 million decreases in COGS, respectively.~~

•~~Higher volumes of refined fuels due to higher demand contributed to increased COGS of $141.3 million.~~

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Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Cost of goods sold $ 27,689,354 $ 26,256,104 $ 1,433,250 5.5 %

~~The following waterfall analysis and commentary presents the changes in our Ag segment COGS for the nine months ended May 31, 2023, compared to the same period during the prior year:~~

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

•Higher costs were primarily attributed to market-driven price increases for grain and oilseed, which resulted from increased global demand during the first nine months of fiscal 2023 and contributed to a $2.5 billion increase of COGS.

•~~The overall increase of costs was partially offset by a $819.2 million decrease for wholesale and retail agronomy products driven by lower urea and UAN prices.~~

•Volumes decreased within our grain and oilseed product category due to a combination of factors, including lower crop yields resulting from drought conditions experienced in portions of our trade territory in North America and contributed to a $458.3 million decrease in COGS.

•The overall volume decrease was partially offset by volume increases in most of our product categories, including a $105.6 million increase in COGS for oilseed processing driven by strong meal and oil demand, a $77.1 million increase in COGS for renewable fuels due to higher demand and a $49.6 million increase in COGS for retail and wholesale agronomy products, which experienced increased demand during the third quarter of fiscal 2023 as prices declined due to global market conditions.

~~All Other Segments~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Nitrogen Production COGS $ 1,276 $ 1,256 $ 20 1.6 %
Corporate and Other COGS $ (5,261) $ (5,066) $ (195) (3.8 %)

~~There were no significant changes to COGS in our Nitrogen Production segment or Corporate and Other during the nine months ended May 31, 2023, compared to the same period during the prior year.~~

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~~Marketing, General and Administrative Expenses~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Marketing, general and administrative expenses $ 749,829 $ 692,395 $ 57,434 8.3 %

Marketing, general and administrative expenses increased during the nine months ended May 31, 2023, primarily due to higher salary and benefit expenses, as well as costs related to certain legal matters and higher repair and maintenance expenses for our facilities and information technology platforms.

~~Interest Expense~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Interest expense $ 106,166 $ 80,705 $ 25,461 31.5 %

Interest expense increased during the nine months ended May 31, 2023, as a result of higher interest rates compared to the same period in the prior year, which was partially offset by decreased notes payable balances.

~~Other Income~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Other income $ 83,629 $ 31,817 $ 51,812 162.8 %

~~Other income increased during the nine months ended May 31, 2023, primarily as a result of increased interest income due to higher interest rates and a larger cash balance earning interest.~~

~~Equity Income from Investments~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Equity income from investments* $ 523,236 $ 644,347 $ (121,111) (18.8 %)

*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 decreased during the nine months ended May 31, 2023, compared to the same period during the prior year, primarily due to lower income associated with our equity method investment in CF Nitrogen, which was partially offset by higher income associated with our equity method investment in Ventura Foods. Equity income decreased for CF Nitrogen as a result of lower prices of urea and UAN due to global supply and demand factors and increased for Ventura Foods as a result of more favorable market conditions for edible oils.

~~Income Tax Expense~~

Nine Months Ended May 31, Change
2023 2022 Dollars Percent
(Dollars in thousands)
Income tax expense $ 66,305 $ 89,143 $ (22,838) (25.6 %)

Decreased income tax expense during the nine months ended May 31, 2023, resulted from decreased nonpatronage earnings and additional DPAD benefit during the period. Effective tax rates for the nine months ended May 31, 2023 and 2022, were 3.9% and 6.7%, respectively. Federal and state statutory rates of 24.7% and 24.4% were applied to nonpatronage business activity for the nine months ended May 31, 2023 and 2022, respectively. 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 our member-owners:


		May 31, 2023		August 31, 2022			November 30, 2023		August 31, 2023
		(Dollars in thousands)					(Dollars in thousands)
Cash and cash equivalents	Cash and cash equivalents	$	997,323	$	793,957	Cash and cash equivalents	$	1,349,757	$	1,765,286
Notes payable	Notes payable	605,955		606,719		Notes payable	421,580		547,923
Long-term debt including current maturities	Long-term debt including current maturities	1,952,256		1,958,814		Long-term debt including current maturities	1,825,565		1,827,658
Total equities	Total equities	10,083,378		9,461,266		Total equities	10,697,389		10,452,389
Working capital	Working capital	2,765,321		2,425,878		Working capital	3,620,777		3,229,455
Current ratio*	Current ratio*	1.4		1.3		Current ratio*	1.5		1.5

*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 our cash flows from operations 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 facilities relating thereto. On April 21, 2023, we amended and restated our five-year unsecured revolving credit facility, which provides a committed amount of $2.8 billion. That facility now expires on April 21, 2028.facility. 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. On January 24, 2023, we entered into a Note Purchase Agreement to borrow $150.0 million of debt in the form of a note. The note matures on January 24, 2030, and interest accrues at a rate of 5.68%, subject to certain adjustments depending on our ratio of consolidated funded debt to consolidated cash flow, and the proceeds were used to retire maturing 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 ~~2023:~~2024:

•Capital expenditures. We expect total capital expenditures for fiscal ~~2023~~2024 to be approximately ~~$730.2~~$971.8 million compared to capital expenditures of ~~$354.4~~$564.5 million in fiscal ~~2022.~~2023. Increased capital expenditures for fiscal ~~2023~~2024 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, 2023, we acquired ~~$374.2~~$142.4 million of property, plant and equipment.

•Major maintenance. We expect total major maintenance for fiscal ~~2023~~2024 to be approximately ~~$238.3~~$22.0 million compared to major maintenance of ~~$24.8~~$217.4 million in fiscal ~~2022. Increased~~2023. Decreased major maintenance for fiscal ~~2023~~2024 is ~~for a~~due to significantly reduced turnaround activities at our refineries compared to the turnaround at our Laurel ~~refinery.~~refinery during fiscal 2023. During the ~~nine~~three months ended ~~May 31,~~November 30, 2023, we paid ~~$184.4~~$8.3 million in major maintenance.

•Debt and interest. We expect to repay approximately ~~$291.7~~$9.6 million of long-term debt and finance lease obligations and incur interest payments related to long-term debt of approximately ~~$87.5~~$88.3 million during fiscal ~~2023.~~2024. During the ~~nine~~three months ended ~~May 31,~~November 30, 2023, we repaid ~~$159.4~~$2.4 million of scheduled long-term debt maturities and finance lease obligations.

•Preferred stock dividends. We had approximately $2.3 billion of preferred stock outstanding as of ~~May 31,~~November 30, 2023. We expect to pay dividends on our preferred stock of approximately $168.7 million during fiscal ~~2023.~~2024. Dividends paid on our preferred stock during the ~~nine~~three months ended ~~May 31,~~November 30, 2023, were ~~$126.5~~$42.2 million.

•Patronage. Our Board of Directors has authorized approximately ~~$500.0~~$365.0 million of our fiscal ~~2022~~2023 patronage-sourced earnings to be paid to our member-owners during fiscal ~~2023. During the nine months ended May 31, 2023, we distributed $502.9 million of cash patronage related to the year ended August 31, 2022.~~2024.

•Equity redemptions. Our Board of Directors has authorized equity redemptions of up to ~~$500.0~~$365.0 million to be distributed in fiscal ~~2023~~2024 in the form of redemptions of qualified and nonqualified equity owned by individual

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producer-members and association members. During the ~~nine~~three months ended ~~May 31,~~November 30, 2023 we redeemed ~~$480.4~~$11.2 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 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, 2023. Based on our current fiscal ~~2023~~2024 projections, we expect continued covenant compliance.

Working Capital

We measure working capital as current assets less current liabilities 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, 2023, and August 31, ~~2022,~~2023, was as follows:


		May 31, 2023		August 31, 2022		Change			November 30, 2023		August 31, 2023		Change
		(Dollars in thousands)							(Dollars in thousands)
Current assets	Current assets	$	9,386,291	$	9,377,847	$	8,444	Current assets	$	10,587,195	$	9,128,649	$	1,458,546
Less current liabilities	Less current liabilities	6,620,970		6,951,969		(330,999)		Less current liabilities	6,966,418		5,899,194		1,067,224
Working capital	Working capital	$	2,765,321	$	2,425,878	$	339,443	Working capital	$	3,620,777	$	3,229,455	$	391,322

As of ~~May 31,~~November 30, 2023, working capital increased by ~~$339.4~~$391.3 million compared with August 31, ~~2022.~~2023. Current asset balance changes increased working capital by ~~$8.4 million,~~$1.5 billion, primarily driven by increases in ~~receivables~~inventories and ~~cash and cash equivalents,~~receivables, which were driven by ~~seasonality in our business.~~the fall harvest. Current liability balance changes ~~increased~~decreased working capital by ~~$331.0 million,~~$1.1 billion, primarily due to ~~a decrease~~increases in ~~the current portion of long-term debt following its maturity during fiscal 2023 and a decrease in customer advances,~~accounts payable, which ~~was~~were also driven by ~~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, ~~2022.~~2023. No material changes occurred during the ~~nine~~three months ended ~~May 31,~~November 30, 2023.

Cash Flows

The following table presents summarized cash flow data for the ~~nine~~three months ended ~~May 31, 2023 and 2022:~~November 30, 2023:


		Nine Months Ended May 31,							Three Months Ended November 30,
		2023		2022		Change			2023		2022		Change
		(Dollars in thousands)							(Dollars in thousands)
Net cash provided by (used in) operating activities		$	1,969,725	$	(7,138)	$	1,976,863
Net cash used in operating activities								Net cash used in operating activities	$	(147,585)	$	(180,192)	$	32,607
Net cash used in investing activities	Net cash used in investing activities	(651,088)		(339,888)		(311,200)		Net cash used in investing activities	(99,616)		(110,713)		11,097
Net cash (used in) provided by financing activities	Net cash (used in) provided by financing activities	(1,147,164)		355,946		(1,503,110)		Net cash (used in) provided by financing activities	(174,504)		129,960		(304,464)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(16)		(11,311)		11,295		Effect of exchange rate changes on cash and cash equivalents	(3,969)		1,415		(5,384)
Increase (decrease) in cash and cash equivalents and restricted cash		$	171,457	$	(2,391)	$	173,848
Decrease in cash and cash equivalents and restricted cash								Decrease in cash and cash equivalents and restricted cash	$	(425,674)	$	(159,530)	$	(266,144)

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 ~~$2.0 billion~~$32.6 million decrease in cash used in operating activities primarily reflects inventory decreases, ~~in inventories and receivables,~~ which resulted from ~~a combination of~~ reduced prices ~~and volumes, as well as increased net income~~ during the first ~~nine~~three months of fiscal ~~2023~~2024 compared to the same period during fiscal ~~2022.~~

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The ~~$311.2~~$11.1 million ~~increase~~decrease of cash used in investing activities reflects ~~larger expenditures~~timing differences in borrowings and payments for CHS Capital notes receivable partially offset by higher acquisitions of property, plant and equipment ~~and major maintenance~~ during the first ~~nine~~three months of fiscal ~~2023,~~2024, compared to the same period during fiscal ~~2022.~~2023.

The ~~$1.5 billion~~$304.5 million decrease in cash provided by financing activities relative to the previous year primarily reflects decreased net cash inflows associated with our notes payable due to lower short-term funding needs resulting from ~~strong~~our balance sheet and cash ~~earnings and increased cash outflows for patronage paid and equity redemptions during the first nine months~~earnings.

Table of ~~fiscal 2023 compared to the same period during fiscal 2022.~~Contents

Preferred Stock

The following is a summary of our outstanding preferred stock as of ~~May 31,~~November 30, 2023, 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 will fix at a rate ~~equal to~~of 7.10% based on the ~~three-month benchmark interest rate plus 4.298%, not to exceed 8.00% per annum, subsequent to March 31, 2024.~~terms of the contract and application of the Adjustable Rate (LIBOR) Act.

(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 will fix at a rate ~~equal to~~of 6.75% based on the ~~three-month benchmark interest rate plus 4.155%, not to exceed 8.00% per annum, subsequent to September 30, 2024.~~terms of the contract and application of the Adjustable Rate (LIBOR) Act.

(d) All series of preferred stock are redeemable for cash at our option, in whole or in part, at a per share price equal to the 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

Our critical accounting policies as presented in the MD&A in our Annual Report on Form 10-K for the year ended August 31, ~~2022,~~2023, have not materially changed during the ~~nine~~three months ended ~~May 31,~~November 30, 2023.

Recent Accounting Pronouncements

~~No recent accounting pronouncements are expected~~ Refer to ~~have~~Note 1, Basis of Presentation and Significant Accounting Policies, included in Item 1 of Part I of this Quarterly Report on Form 10-Q for a ~~material impact on our condensed consolidated financial statements.~~discussion of applicable standards issued and not yet adopted.

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, 2023, that would affect the quantitative and qualitative disclosures presented in our Annual Report on Form 10-K for the year ended August 31, ~~2022.~~2023.

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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, 2023. 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, 2023, 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, ~~2022, or disclosed in Item 1A of our Quarterly Report on Form 10-Q for the quarter ended February 28,~~ 2023.

ITEM 5. OTHER INFORMATION

~~Effective as~~On January 2, 2024, per the terms of ~~September 1, 2023, the CHS Inc. Executive Long-Term Incentive Plan was amended~~our Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2 and restated (the "ELTI Plan") to update the ELTI Plan eligibility to clarify that the employees in the positions of Vice President, Senior Vice President, Executive Vice President, President and Chief Executive Officer are eligible to participate in the ELTI Plan. The ELTI Plan was also updated to clarify that the Chief Executive Officer, Chief Financial Officer and Chief Human Resource Officer administer the ELTI Plan and that as administrators they may jointly approve amendments to the ELTI Plan subject to the CHS Board of Directors approving any material amendments to the ELTI Plan. The ELTI Plan was also updated to make certain other technical, administrative and non-substantive changes.

Effective as of September 1, 2023, the CHS Inc. Annual Variable Pay Plan was amended and restated (the "AVP Plan") to update the AVP Plan eligibility provisions to outline the criteria that employees must meet in order to be eligible to participate in the AVP Plan and provides examples of the types of job roles or job start dates that are not eligible for participation in the AVP Plan. The AVP Plan was updated to clarify the proration of awards under the AVP plan under certain promotions and other status changes. The AVP Plan was also updated to clarify that the Chief Executive Officer, Chief Financial Officer and Chief Human Resource Officer administer the AVP Plan and that as administrators they may jointly approve amendments to the AVP Plan subject to the CHS Board of Directors approving any material amendments to the AVP Plan. The AVP Plan makes it clear that the Chief Executive OfficerSeries 3, and the ~~Chief Financial Officer must approve any modification~~Adjustable Interest Rate (LIBOR) Act, the stated rates of ~~the business unit level performance metrics or performance goals. The AVP Plan was also updated to made certain other technical, administrative~~7.10% and ~~non-substantive changes.~~

The foregoing descriptions of the ELTI Plan as amended and restated and the AVP Plan as amended and restated do not purport to be complete and are qualified in their entirety by reference to the full text of the ELTI Plan and the AVP Plan, copies of which are attached hereto as Exhibits ~~10.6~~ ~~and~~ ~~10.7~~6.75%, respectively, were fixed at 7.10% and ~~which~~6.75% (the "Fixed Rates"), respectively. We will pay dividends on Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2 after March 31, 2024, and on Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3 after September 30, 2024, at the Fixed Rates until they are ~~incorporated herein by reference.~~redeemed.

~~Table of Contents~~

ITEM 6. EXHIBITS


Exhibit			Description
10.1			~~Second Amended and Restated Limited Liability Company~~Amendment No. 4 to Employment Agreement, dated as of ~~April 1,~~November 7, 2023, between CHS Inc. and ~~Cargill, Incorporated.~~
~~10.2~~			2023 Third Amended and Restated Credit Agreement (5-Year Revolving Loan), dated as of April 21, 2023, by and between CHS Inc., CoBank, ACB, for its own benefit as a lender and as the administrative agent and the bid agent for the benefit of the present and future lenders, Sumitomo Mitsui Banking Corporation, for its own benefit as a lender and as the syndication agent, and the other lenders thereto. (IncorporatedJay D. Debertin (incorporated by reference to our ~~Current Report on~~ Form ~~8-K, filed April 25, 2023).~~
~~10.3~~			~~Amendment No. 4 to 2015 Credit Agreement (10-Year Term Loan), dated as of April 21, 2023, by and between CHS Inc., CoBank, ACB, for its own benefit as a lender and as the administrative agent~~10-K for the ~~benefit of the present and future lenders, and the other lenders party thereto. (Incorporated by reference to our Current Report on Form 8-K,~~year ended August 31, 2023, filed ~~April 25,~~November 8, 2023).
~~10.4~~			Twelfth Amendment and Restated Receivables Purchase Agreement, dated as of July 11, 2023, by and among Cofina Funding, LLC, as seller, CHS Inc., as servicer and as originator, CHS Capital, LLC, as an originator, each of the conduit purchasers, committed purchasers and purchaser agents set forth on the signature pages thereto and MUFG Bank Ltd. f/k/a The Bank of Tokyo-Mitsubishi UFJ. Ltd., New York Branch, as administrative agent.
~~10.5~~			Master Framework Agreement, dated as of July 11, 2023 (the "Framework Agreement), by and among Coöperatieve Rabobank, U.A., New York Branch, a Dutch coöperatieve acting through its New York Branch, as buyer, CHS Inc. and CHS Capital, LLC, as sellers, and CHS Inc., as agent for the sellers.
~~10.6~~			~~CHS Inc. Executive Long-Term Incentive Plan (2023 Restatement).~~
~~10.7~~			~~CHS Inc. Annual Variable Pay Plan (2023 Restatement)~~.
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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Table of Contents

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 13, 2023~~January 10, 2024

By:

/s/ Olivia Nelligan

Olivia Nelligan

Executive Vice President, Chief Financial Officer and Chief Strategy Officer

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