World Grain - December 2010 - 14

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CHS income jumps 32%; fourth largest year on record
ST. PAUL, MINNESOTA, U.S. - Net income at CHS Inc. in the
year ended Aug. 31 rose 32% to $502,159,000, up from $381,407,000
in fiscal 2009, the company announced on Nov. 12. Revenues for
the year, meanwhile, fell to $25,267,931,000 from $25,729,916,000
in fiscal 2009. Decreased sales were attributed to lower volatility in
values for the grains and crop nutrient commodities that make up the
majority of CHS sales.
The company's Ag Business segment, which consists of CHS's
agronomy, grain marketing and retail operations, posted operating
earnings of $243,338,000, up sharply from $100,176,000 in fiscal
2009. Sales in the segment totaled $15,678,160,000, down 9% from
$17,196,448,000.
"The price fluctuations for fiscal 2010 were far less volatile and
we carried lower unhedged positions as well, which has the effect of
reducing both the potential for large earnings or large losses," CHS
said in a Nov. 12 filing with the Securities and Exchange Commission. "During fiscal 2010, we recorded a gain related to the sales of
many of the southern retail facilities of Agriliance of $28.4 million.
In addition, Agriliance saw improved margins during fiscal 2010,
partially offset by reduced earnings from a Canadian equity investment that was sold during the second quarter of fiscal 2009. Combined agronomy equity investments resulted in a $39.9 million net

increase in earnings, net of allocated internal expenses. We anticipate
the repositioning of the majority of the remaining Agriliance retail
operations to occur during fiscal 2011.
"Our grain marketing earnings decreased by $5.9 million during
fiscal 2010 when compared to fiscal 2009, primarily the result of
slightly higher expenses and net reduced earnings from joint ventures, partially offset by higher grain margins and volumes. Our
country operations earnings increased $37.5 million, primarily as a
result of improved crop nutrients and grain margins."
Earnings within CHS Processing operations, which include its oilseed processing, wheat milling, food production and renewable fuels
operations, eased slightly during the year. Operating earnings in fiscal 2010 were $17,159,000, down from $17,735,000 in fiscal 2009.
Sales fell 7% to $1,061,654,000 from $1,142,636,000.
CHS said oilseed processing earnings increased $900,000 during
fiscal 2010 compared with fiscal 2009, primarily due to improved
margins and volumes in the company's crushing operations, partially
offset by reduced margins in its refining operations.
"Our share of earnings from our wheat milling joint ventures, net
of allocated internal expenses, increased $7.1 million in fiscal 2010
compared to fiscal 2009, primarily the result of improved margins on
the products sold," CHS said.

CHS names Casale new president, CEO
ST. PAUL, MINNESOTA, U.S. - CHS Inc. announced Nov. 22 it
has named veteran agribusiness leader Carl Casale as its new president and chief executive officer, effective Jan. 1, 2011.
Casale, who most recently was executive vice-president and chief
financial officer for Monsanto Company, will succeed John Johnson,
who will retire Dec. 31.
In his previous role, Casale was responsible for finance, strategy
and information technology resources.
CHS board chairman Michael Toelle said the CHS board of direc-

tors selected Casale to lead the nation's largest
producer-owned cooperative following an extensive search that included both internal and external candidates.
"I feel privileged and excited to be part of a
company owned by farmers and ranchers and
to help CHS embrace new opportunities to add
value for producers in a dynamic global marketplace," Casale said.

Casale

For more information, see Page 78.

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World Grain - December 2010

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