C Magazine - Spring 2018

Briefs

2018-04-24 00:26:20

FOCUSING ON FFA PARTNERSHIP

In early March, the CHS Foundation hosted National FFA officers and leaders as part of FFA Day at CHS headquarters in Inver Grove Heights, Minn. The event, which celebrated the long-standing relationship between CHS and FFA, gave employees a glimpse of the impact of the CHS Foundation’s recent $3.8 million, three-year commitment to FFA. The grant supports a new generation of ag leaders for life through development events, ag teacher programming, cooperative education curriculum and 15 state FFA programs.

During the day, CHS President and CEO Jay Debertin was joined by FFA CEO Mark Poeschl and National FFA officers Breanna Holbert and Gracie Furnish on a panel to discuss the need for leadership in agriculture and the value of developing leadership through FFA. The event also recognized CHS employees with ties to FFA.

To learn more about the CHS Foundation’s partnership with FFA and efforts to develop ag leaders for life, visit chsinc.com/stewardship.

FFA CEO Mark Poeschl talks with CHS employee and former Ohio FFA state officer Todd Dysle, CHS Crop Nutrients, during FFA Day at CHS. Many CHS employees celebrated the impact of FFA by wearing their blue jackets and sharing their FFA stories.

AMENDMENTS TO SECTION 199A SIGNED INTO LAW

Congress included language modifying Section 199A in omnibus appropriations legislation signed into law by President Donald Trump on March 23, 2018. The modifications were crafted by congressional tax writers to address concerns raised by independent grain companies while protecting the interests of cooperatives and their patrons. The amendments were supported by the National Council of Farmer Cooperatives and the National Grain and Feed Association.

“CHS remains committed to being the voice of CHS and our farmer-owners in the halls of Congress and in policy conversations,” says John Engelen, vice president, CHS Government Affairs. “We are focused on ensuring a strong, competitive agricultural marketplace and driving toward the best possible outcome for cooperatives, farmers and rural communities in a tax bill.”

In short, the new law:

• Retains some individual Section 199A benefits

• Reinstates tax benefits of the previous domestic production activities deduction (DPAD) to CHS

• Allows cooperatives to pass through the DPAD to their patrons

• Is retroactive to January 2018

It’s important that owners consult their tax advisors to understand the impact of the new law on their businesses.

CHS REPORTS NET INCOME OF $346.7 MILLION FOR FISCAL 2018 FIRST HALF

CHS reported net income of $346.7 million for the first half of its 2018 fiscal year (the six-month period ending Feb. 28, 2018) , compared to net income of $223.7 million for the same period the year before.

Consolidated revenues for the first half of fiscal 2018 were $14.9 billion, down from $15.4 billion for the first half of fiscal 2017. Pretax income was $185.0 million and $249.1 million for the first half of fiscal 2018 and 2017, respectively.

“CHS made meaningful progress in the first half of fiscal year 2018 as we continue to position CHS for higher performance,” said CHS President and CEO Jay Debertin.

“The global environment for our businesses serving agriculture remains challenged and we continue to drive toward our priorities of better efficiency, strengthening relationships and a more focused business portfolio. We have more work to do and we are seeing improvement that will make us a stronger company.”

CHS INC. EARNINGS (in millions)

FOCUSING THE CHS BUSINESS PORTFOLIO

In line with fiscal year priorities of sharpening operational excellence and restoring financial flexibility, CHS continues to identify assets that are performing well and driving profitability and those that are underperforming or are not a good strategic fit for CHS.

In the first half of fiscal 2018, CHS reduced long-term debt by selling certain assets and limiting capital expenditures to projects related to safety and compliance. Some recent actions taken to optimize assets and help restore financial flexibility include the following:

• In April 2018, CHS sold the Council Bluffs pipeline and refined fuels terminal in Council Bluffs, Iowa, to NuStar Pipeline Operating Partnership L.P.

• CHS Processing and Food Ingredients sold three soy processing plants. The South Sioux City, Neb., plant was sold in January 2018, the Hutchinson, Kan., plant was sold to Kansas Biofuels, LLC, Lyons, Kan., in March 2018 and in April 2018 the Creston, Iowa, plant was sold to Zeeland Farm Services, Zeeland, Mich.

PLAN TO ATTEND CHS OWNER FORUMS

CHS Directors and members of the strategic leadership team are planning to meet with farmer-owners for conversations about CHS, the industries it serves and the future.

Previously known as CHS Town Halls, CHS Owner Forums will include updates on the company and progress on strategic priorities for 2018 and time to gather input from CHS owners.

The forums are part of the CHS commitment to strengthen its relationships with farmer-owners. Beginning in May, 11 forums will convene across the U.S.

Visit chsownerforums.com for details. Registration is now open. To reserve your spot and meal, please register two weeks in advance.

Beginning in May, CHS Owner Forums will give farmer-owners updates on CHS business activities and plans and a chance to provide input. CHS Director David Johnsrud, right, spoke with an attendee at a 2017 meeting in Indiana.

FARMERS AND FRIENDS CELEBRATE NATIONAL AG DAY

National Ag Day written essay winner and Oklahoma high school student Rio Bonham, left, receives a $1,000 scholarship from Annette Degnan, Agriculture Council of America board member and director, CHS Marketing Communications.

Farmers and the businesses that serve them took to the airwaves, shopping malls and halls of Congress on March 20 to celebrate National Ag Day. CHS has sponsored Ag Day events for 25 years, including taking students to Capitol Hill to speak with legislators about the importance of agriculture to the U.S. economy and global food production.

CHS was the lead sponsor for the annual Agriculture Council of America Ag Day essay contest, in which students described the importance of agriculture to themselves, their families and their communities through written or videotaped essays.

The winner of the written essay competition was Rio Bonham, Tishomingo, Okla. The winning video essay was submitted by Zoey McCormick, Carlisle, Ind. Bonham and McCormick each received a $1,000 scholarship from CHS and other award sponsors. The essays are posted at agday.org.

This year’s National Ag Day festivities began at the U.S. Department of Agriculture (USDA), where U.S. Vice President Mike Pence presented President Donald Trump’s National Agriculture Day proclamation to U.S. Secretary of Agriculture Sonny Perdue.

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