July 7, 2016 - 4:34 PM EDT
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CHS reports fiscal 2016 nine-month earnings of $425.8 million

ST. PAUL, Minn., July 7, 2016 /PRNewswire/ -- CHS Inc. (NASDAQ: CHSCP, CHSCO, CHSCN, CHSCM, CHSCL), the nation's leading farmer-owned cooperative and a global energy, grains and foods company, today reported net income of $425.8 million through nine months of its 2016 fiscal year.

CHS net income of $425.8 million for the period from Sept.1, 2015 through May 31, 2016, reflected a 34 percent decline from net income of $649.6 million through nine months of fiscal 2015. The lower earnings were attributed to the continued down economic cycles in the agricultural and energy sectors, which have resulted in reduced commodity prices and lower margins globally. Fiscal 2016 revenues through May 31, 2016, were $22.2 billion, down 17 percent from $26.6 billion for the first three quarters of fiscal 2015, and primarily reflected lower selling prices for the energy, grain and fertilizer products the company handles.

CHS net income for the third quarter of fiscal 2016 (March 1 through May 31, 2016), was 7 percent ahead of the same period of fiscal 2015. CHS reported net income of $190.3 million for the third quarter of fiscal 2016, compared with $178.1 million for the same period in fiscal 2015. Results for the third quarter of fiscal 2016 were attributed to increased pre-tax earnings for the company's Energy segment and its Corporate and Other category, as well as the new CHS Nitrogen Production segment. Results also reflected a reversal of lower cost or market charges taken earlier in fiscal 2016 within the Energy segment when energy product prices were lower. Revenues for the third quarter of fiscal 2016 were $7.8 billion, down 10 percent compared with $8.7 billion for the third quarter of fiscal 2015.

For the first three quarters of fiscal 2016, operating income reflected lower pre-tax earnings in the CHS Energy and Ag segments. These were partially offset by increased earnings in the Corporate and Other category, as well as the addition of the company's new Nitrogen Production segment.

CHS Energy segment earnings through the third quarter of fiscal 2016 declined year-over-year primarily due to lower refining margins, along with decreased earnings for the company's lubricants and transportation businesses. Propane earnings through nine months of fiscal 2016 increased from the same period of fiscal 2015.

Year-over-year earnings also declined within the CHS Ag segment, which includes the company's wholesale crop nutrients, renewable fuels, Country Operations retail, animal nutrition and sunflower processing; grain marketing, and processing and food ingredients businesses. Lower earnings in this segment were largely attributed to soft market conditions across the agricultural sectors CHS serves. Lower grain margins resulted in decreased earnings within grain marketing and Country Operations. Earnings for the company's wholesale crop nutrients business also declined compared with the same period of fiscal 2015 due to lower margins. CHS renewable fuels marketing and production earnings decreased through nine months of fiscal 2016 when compared with the same period of fiscal 2015, largely due to lower market prices for ethanol. CHS processing and food ingredients earnings decreased primarily due to a charge associated with disposal of the assets and a customer receivable.

CHS generated income before taxes in its newly established Nitrogen Production segment of $26.3 million, resulting from its February 2016 equity method investment of $2.8 billion in CF Industries Nitrogen, LLC.

CHS reports results for its business services operations and its two food processing-related joint ventures under the Corporate and Other category. Corporate and Other earnings for the first nine months of fiscal 2016 increased over the previous year primarily due to increased hedging and capital volumes and lower compensation and benefit costs.

CHS Inc. (www.chsinc.com) is a leading global agribusiness owned by farmers, ranchers and cooperatives across the United States. Diversified in energy, grains and foods, CHS is committed to helping its customers, farmer-owners and other stakeholders grow their businesses through its domestic and global operations. CHS, a Fortune 100 company, supplies energy, crop nutrients, grain marketing services, animal feed, food and food ingredients, along with business solutions including insurance, financial and risk management services. The company operates petroleum refineries/pipelines and manufactures, markets and distributes Cenex® brand refined fuels, lubricants, propane and renewable energy products.

This document and other CHS Inc. publicly available documents contain, and CHS officers and 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 CHS current beliefs, expectations and assumptions regarding the future of its businesses, 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 CHS control. CHS 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 CHS actual results and financial condition to differ materially from those indicated in the forward–looking statements are discussed or identified in CHS public filings made with the U.S. Securities and Exchange Commission, including in the "Risk Factors" discussion in Item 1A of CHS Annual Report on Form 10–K for the fiscal year ended August 31, 2015. Any forward–looking statements made by CHS in this document are based only on information currently available to CHS and speak only as of the date on which the statement is made. CHS undertakes no obligation to publicly update any forward–looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

CHS Inc. Earnings

By segment

(in millions $)

For the Three Months Ended

For the Nine Months Ended

May 31,

May 31,















Nitrogen Production





Corporate and Other





Income (loss) before income taxes





Income tax (benefit) expense





Net income (loss)





Net income (loss) attributable to non-controlling interests





Net income attributable to CHS Inc.






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Source: PR Newswire (July 7, 2016 - 4:34 PM EDT)

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