CHSCP 10-K & 10-Q changes, risk factors and insider trading

Our revenues, results of operations and cash flows are affected by market prices for commodities such as crude oil, natural gas, ethanol, fertilizer, grain, oilseed, flour, and crude and refined vegetable oils. Commodity prices generally are affected by a wide range of factors beyond our control, including weather, plant disease, insect damage, drought, availability and adequacy of supply, availability of reliable rail and river transportation networks, industry labor availability, outbreaks of disease, inflation, increased or fluctuating tariffs, government regulation and policies, global trade disputes, international conflicts and general political and economic conditions. We are also exposed to fluctuating commodity prices as the result of our inventories of commodities, typically grain, fertilizer and petroleum products, and purchase and sale contracts at fixed or partially fixed prices. At any time, our inventory levels and unfulfilled fixed or partially fixed price contract obligations may be substantial. We have processes in place to monitor exposures to these risks and engage in strategies, such as hedging, to manage these risks. If these controls and strategies are not successful in mitigating our exposure to these fluctuations, we could be materially and adversely affected. For example, fluctuations in commodity prices may result in significant noncash losses being incurred on our commodity-based derivatives, which may in turn materially and adversely affect our operating results. In addition, 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. Similarly, increased or decreased sales volumes without a corresponding change in the purchase and/or selling prices of those products can affect revenues and operating earnings.

In February 2022, Russia invaded Ukraine andConflicts in October 2023, conflict escalated inUkraine, the Middle East between Israel and Hamas, along withEast, the Red Sea. The war between RussiaSea and Ukraineother and escalation of conflict in the Middle Eastregions have resulted in significant uncertainty and instability in the global commodities markets, including agricultural commodities and crude oil. In response to the Russia-Ukraineinvasion war,of Ukraine, the United States and other North Atlantic Treaty Organization ("NATO") member states, as well as nonmember states, announced economic sanctions targeting Russia and certain Russian citizens and enterprises, including several large banks. Continuation of theescalation warcould maylead trigger a series ofto additional economic and other sanctions enactedimposed by the United States, other NATO member states and other countries. In response, Russia has announced export bans on various products, including agricultural commodities. Although we do not maintain operations in Russia, it is a significant source of fertilizer for global markets. Such sanctions have caused inflationary pressures and impacted our ability to purchase fertilizer in the global market. If our ability to purchase fertilizer in the global market continues to be impacted by those sanctions or by other factors, it could have a material adverse effect on our business and operations. In addition, such sanctions put us at increased risk of inadvertently trading with a sanctioned partner.

TheGlobal conflicts also increase the risk of cybersecurity incidents has also increased in connection with the ongoing war between Russia and Ukraine, including cyberattacks against the Ukrainian government and other countries in the region.incidents. It is possible that these attacks could have collateral effects on additional critical infrastructure and financial institutions globally, which could adversely affect our operations. Proliferation of malware from the war into systems unrelated to the war, or cyberattacks against U.S. companies in retaliation for U.S. sanctions against Russia or U.S.involvement supportin ofglobal Ukraine,conflicts could also adversely affect our operations.operations and heighten the risk of cyberattacks against the U.S. and global companies and infrastructure.

TheIn waraddition, betweenthese Russiaglobal and Ukraine and escalation of conflict in the Middle Eastconflicts could also draw military or other intervention from additional countries, which could lead to much larger wars, conflictscountries and/or additional sanctions imposed by the United States government and other governments that restrict business with specific persons, organizations or countries with respect to certain products or services. If such escalation should occur or such sanctions are imposed, supply chains, trade routes and markets currently served by us could be adversely affected, which in turn could materially and adversely affect our business operations and financial performance. Furthermore, the actions undertaken by westernvarious nations in response to Russia'sthese actionsconflicts have had, and may continue to have, adverse impacts on global financial markets.

We may also experience negative reactions from our members, shareholders, lenders, employees, customers or other stakeholders as a result of our action or inaction related to global conflicts. Even if the warwars and global conflicts moderate or resolutions are reached, we expect that we will continue to experience ongoing financial and operational impacts resulting from these conflicts for the foreseeable future. Additionally, certain of the economic and other sanctions imposed, or that may be imposed, against participants in the warwars and global conflicts and itstheir citizens and enterprises may continue for a period of time after any resolution has been reached.

Additionally, there will likely be increased strains on and risks to the integrity, reliability and resilience of electrical grids and increased volatility and tightness in natural gas and electricity supplies across the world. These events could negatively affect the cost, reliability, and availability of our natural gas and electricity supplies and may cause sporadic outages disrupting our operations. Growing electrification and rapidly developing and increasing technology use (such as artificial intelligence, computer processing, cryptocurrency mining andmining, cloud storage and thestorage, data centers and power supplies required to support these activities) will also likely increase the intermittency and decrease the reliability of electricity supplies, particularly for grids highly dependent upon wind and solar power, which would exacerbate the foregoing challenges. Emerging sustainability, new regulations and other environmental priorities outside our control could also affect agricultural practices and future demand for agronomy products applied to crops and the volume of any such application. These priorities could also impact demand for our grain and energy products, and may require us to incur additional costs for increased due diligence and reporting. Accordingly, factors outside our control could materially and adversely affect our revenues, results of operations and cash flows.

We have experienced and anticipate continued effects of inflation on costs such as labor, freight, natural gas and materials. In response to global inflationary pressures, the U.S. Federal Reserve and foreign equivalents have maintained higher interest rates, which has resulted in continued uncertainty and volatility in global financial markets and increased borrowing costs under certain of our credit facilities, including our five-year revolving credit facility and our 10-year term loan facility.facilities. Inflation and its impacts, many of which are beyond our control, could escalate in the future. To mitigate commodity cost increases, we have implemented various strategies that include, among other things, entering into contracted pricing with certain vendors, procuring commodities in periods of favorable market conditions and entering into various derivative instruments. These actions may, in part, mitigate these increased costs, but even by increasing our product prices and passing some or all of our increased costs to customers or implementing cost saving efforts, we may not be able to fully offset these increased costs. Additionally, increased prices may not be sustainable over time and may result in reduced sales volumes. Accordingly, inflationary pressures could have a material and adverse effect on our results of operations. There can be no guarantee that our efforts to mitigate commodity cost increases due to inflationary pressures will be effective or, if they are effective, that they will have a material impact on maintaining or reducing costs.

We do not have an exclusive relationship with our members, and our members are not obligated to supply us with their products or purchase products from us. Our members often have a variety of distribution outlets and product sources available to them. If our members were to sell their products to other purchasers or purchase products from other sellers, our revenuesrevenues, and margins would decline and ourmargins, results of operations and cash flows could be materially and adversely affected.

•Our transportation operations, equipment and services could experience disruptions such as adverse operating conditions on the inland waterway system or on the seas with respect to oceangoing vessels.vessels, including risks from piracy and other maritime security threats.

•Occurrence of a pandemic or epidemic disease, such as the COVID-19 pandemic,disease could affect a substantial part of our workforce or our customers and interrupt our business operations.

Epidemics, pandemics, outbreaks of novel diseases and other adverse public health developments in countries and states where we operate may arise at any time. Such developments could have an adverse effect on our business, financial condition and results of operations. These effects include a potentially negative impact on the availability of our key personnel; labor shortages and increased turnover; temporary closures of our facilities or facilities of our members, business partners, customers, suppliers, third-party service providers or other vendors; and interruption of domestic and global supply chains, distribution channels and liquidity and capital or financial markets. In particular, restrictions on or disruptions of transportation, port closures or increased border controls or closures, or other impacts on domestic and global supply chains or distribution channels could increase our costs for raw materials and commodity costs, increase demand for raw materials and commodities from competing purchasers, limit our ability to meet customer demand or otherwise have a material adverse effect on our business, financial condition and results of operations or cash flows. Precautionary measures we may take in the future intended to limit the impact of any epidemic, pandemic, disease outbreak or other public health development, may result in additional costs. In addition, such epidemics, pandemics, disease outbreaks or other public health developments may adversely affect economies and financial markets throughout the world, which may affect our ability to obtain additional financing for our businesses and demand for our products and services. The impact of such developments may also exacerbate the other risks discussed in this Item 1A, any of which could have a material effect on us.

Like most companies in the agricultural industry, we are continuously challenged to hire, develop and retain a sufficient number of employees to operate our businesses throughout our operating geographies. We may have difficulty recruiting and retaining employees with adequate qualifications and experience. The challenge of hiring new employees is exacerbated by the rural nature of our business, which provides a smaller pool of skilled employable candidates. A number of other factors may adversely affect the labor force available to us, including changes in the labor market as a result of the COVID-19 pandemic and other socioeconomic and demographic changes, high employment levels, federal unemployment subsidies and other government regulations, unemployment programs and volatility in macroeconomic factors impacting the labor market. Moreover, there continues to be a tight labor market despite the COVID-19 pandemic having largely subsided. Increases in remote work opportunities have also amplified the competition for employees and contractors. To hire new employees, we may be forced to pay higher wages or offer other benefits that might impact our cost of labor. Furthermore, when we hire new employees, lengthy training and orientation periods might be required before they are able to achieve necessary productivity levels, and we may be unable to successfully transfer our other employees' institutional knowledge and skills to them or fail to execute on internal succession plans. In addition, a competitive labor market may lead to increased turnover rates within our employee base. Increased employee turnover results in significant time and expense relating to identifying recruiting, hiring, relocating and integrating qualified individuals. High employee turnover of key personnel may further deplete our institutional knowledge base and erode our competitiveness. These or other workforce factors could negatively impact our business, financial condition or results of operations.

There may be other challenges and risks to both our aging and current IT systems over time due to any number of causes, such as catastrophic events, availability of resources, power outages, security breaches or social engineering and cyberattacks. Additionally, development of new technologies such as generative artificial intelligence ("AI") is progressing at an unprecedented pace, which brings risks that could subject us to loss through various technical, legal and opportunistic-related risks. These challenges and risks could result in legal claims or proceedings, liability or penalties, disruption in operations, loss of valuable data, increased costs and damage to our reputation, all of which could adversely affect our business. Our ongoing IT investments include those relating to cybersecurity, including technology, hired expertise and cybersecurity risk mitigation actions. In addition, IT investments in new technology that could result in greater operational efficiency may further expose our IT systems to the risk of cyberattacks, especially as use of AI increases sophistication and effectiveness of social engineering and cyberattacks.

The third-party data management providers and other vendors we rely on and cloud-based services we utilize may have or may develop security problems or security vulnerabilities which may also affect our systems or data. We cannot guarantee a data security or privacy breach of their systems or other form of cyber-based attack will not occur in the future. The increase in hybrid working situations, where employees, including third-party employees, access technology infrastructure remotely, increases information technology and data security risks. Like many companies, we continue to experience an increase in the number of sophisticated attempts by external parties to access and/or disrupt our networks without authorization, such as denial of service attacks, attempted malware infections, scanning activity and phishing e-mails. We and vendors on our behalf monitor our information technology systems on a 24/7 basis in an effort to detect cyberattacks, security breaches or unauthorized access. There is no assurance the measures we have taken to protect our information systems will prevent or limit the impact of a future cybersecurity incident. We may incur significant costs protecting against or remediating cyber-based attacks or other cybersecurity incidents and may suffer representational harm. While we maintain a cybersecurity insurance policy that provides coverage for security incidents, we cannot be certain our coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on financially reasonable terms or at all, or that any insurer will not deny coverage as to any future claim.

In addition, we are subject to laws and regulations in the United States and other jurisdictions regarding privacy, data protection and data security, including those related to collection, storage, handling, use, disclosure, transfer and security of personal data. These laws and regulations pose increasingly complex compliance challenges and will require us to incur costs to achieve and maintain compliance; some of those costs may be significant. Any violation of such laws and regulations, including as a result of a security or privacy breach or as a result of adoption of emerging technologies, such as AI, could subject us to legal claims, regulatory penalties and damagereputational to our reputation. For example, the SEC recently adopted the rule, "Cybersecurity Risk Management, Strategy, Governance and Incident Disclosure," enhances and standardizes disclosures regarding cybersecurity risk management and governance, as well as material cybersecurity incidents. Under the new rule, we will be required to identify any material cybersecurity incidents on a Form 8-K and make annual disclosures describing our processes for identifying and managing material cybersecurity risks, management's role in assessing and managing such risks and the Board of Directors' oversight of cybersecurity risks. We expect to face increased costs to comply with this new SEC cybersecurity rule, including increased costs for cybersecurity training and management.damage. Furthermore, the requirement to report material cybersecurity incidents within such a short time frame could mean there will be insufficient time to halt a breach before having to report it, potentially giving hackers an advantage, and failure to promptly disclose such material incidents as required by law may result in additional financial or regulatory consequences.

Companies across all industries are facing increasing scrutiny from stakeholders related to their environmental, social and governance ("ESG") practices and disclosures, including practices and disclosures related to climate change, human capital management, diversity and inclusion, social and community impact, corporate culture and governance standards. Investor advocacy groups, private litigants, government agencies, certain institutional investors, lenders, investment funds and other influential investors are also increasingly focused on ESG practices and disclosures and in recent years have placed increasing importance on the implications and social cost of their investments and whether companies should engage in ESG activities. Across industries, investors' and other stakeholders' increased focus and activism related to ESG and similar matters may hinder access to capital or financing, as investors or lenders may determine to reallocate capital or not commit capital as a result of their assessment of a company's ESG practices and disclosures. In addition, following recent Supreme Court decisions regarding diversity and inclusion activities those opposed to ESG initiatives have begun challenging ESG activities of other companies. If we do not adapt or comply with investor, lender, private litigant, government agency or stakeholderevolving ESG expectations and standards, which are evolving, or if we are perceived to have not responded appropriately to the growing focus on ESG issues and opposition to ESG issues, regardless of whether there is a legal requirement to do so, we may suffer reputational damage and our business or financial condition could be materially and adversely affected. Conversely, if we comply with evolving investor, lender and stakeholder ESG expectations and standards, doing so could result in higher costs, disruption and diversion of management attention, increased strain on our resources and heightened legal and regulatory risk, and could also threaten our credibility with other investors, lenders, private litigants, government agencies and stakeholders. Investors, lenders and other stakeholders are also increasingly focused on issues related to environmental justice. This may result in increased scrutiny, protests and negative publicity with respect to our business and operations, which in turn could adversely affect our reputation, business and financial performance. In addition, ESG has become an increasingly politically charged issue, and "anti-ESG" sentiment and increased scrutiny and skepticism of ESG policies and practices have resulted in, and could continue to result in, additional demands and strains on companies.

Our ability to achieve any of our strategies or expectations related to climate change and other environmental matters is subject to numerous factors and conditions, many of which are outside our control. Examples of such factors include, but are not limited to, evolving regulatory and other standards, processes and assumptions; the pace of scientific and technological developments; increased costs and the availability of requisite financing; market trends that may alter business opportunities; conduct of third-party counterparties; constraint or disruptions to our supply chain; and changes in carbon markets or carbon taxes. We may be required to expend significant resources to achieve these strategies and expectations, which could significantly increase our operational costs. There can be no assurance of the extent to which any of our strategies or expectations will be achieved or that any future investments we make in furtherance of achieving these strategies or expectations will meet customer or investor expectations.

Several parts of our business, including our nitrogen production business, our foods business and portions of our global grain marketing and wheat milling operations, are operated through joint ventures with third parties where we do not have majority control of the venture. By operating a business through a joint venture, we have less control over business decisions than we have in our subsidiaries and limited liability companies in which we have a controlling interest. In particular, we generally cannot act on major business initiatives in our joint ventures without the consent of the other party or parties in those ventures. Investments in joint ventures may, under certain circumstances, involve risks not present when a third partythird-party is not involved, including the possibility that co-venturers might experience business or financial stresses that impact their ability to effectively operate the joint venture or might become bankrupt or fail to fund their share of the business; in which case the joint venture may be unable to access needed growth capital without funding from us and/or any other remaining co-venturers. Co-venturers may have economic, tax or other business interests or goals that are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives. Our co-venturers may take actions that are not within our control and that may expose our investments in joint ventures to the risk of lower values or returns. Joint venture investments may also lead to impasses. Disputes between us and co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and efforts on our day-to-day business. In addition, we may in certain circumstances,circumstances be liable for the actions of our co-venturers. Each of these matters could have a material adverse effect on us.

We have made certain assumptions and projections regarding the future of the markets served by our joint venture investments that include projected raw materiality availability and pricing, production costs, market pricing and demand for the joint venture's products. These assumptions were an integral part of the economics used to evaluate these joint venture investment opportunities prior to consummation. To the extent that actual market performance varies from our models, our ability to achieve projected returns on our joint venture investments may be impacted in a materially adverse manner. For example, assumptions we made in connection with our investment in CF Nitrogen may not align with future demand for nitrogen-based products or the cost or availability of natural gas, the primary feedstock utilized for CF Nitrogen's nitrogen-based products. Supply of nitrogen products is affected primarily by available production capacity and operating rates, raw material costs and availability, energy prices, government policies and global trade. Demand for nitrogen products is affected by planted acreage, crop selection and fertilizer application rates, driven by population changes, economic growth, changes in dietary habits and non-food use of crops, such as production of ethanol and other biofuels. Demand also includes industrial uses of nitrogen, for example chemical manufacturing and emissions reductants such as diesel exhaust fluid (DEF). Many factors affecting supply and demand of global nitrogen products are out of our control and could significantly impact our business, financial condition, results of operations and cash flows.

Government policies, mandates, regulationsregulations, trade agreements, domestic and foreign trade agreementspolicies, including the imposition of tariffs and retaliatory tariffs, and other factors beyond our control could adversely affect our operations and profitability.

Our business is subject to numerous government policies, mandates and regulations that couldmay have an adverse effect onimpact our operations or profitability. For example, government policies, mandates and regulationsthose related to genetically modified organisms, traceability standards, sustainable practices, product safety and labeling, and renewable and low-carbon fuels couldmay haveinfluence ancrop adverseplanting, effectproduction on our operations or profitability by, among other things, influencing planting of certain crops, locationlevels and extent of crop production,location, trade offlows, processedfeedstock availability and unprocessed commodity products,competitiveness, volumes and types of imports and exports, availability and competitivenessproduct of feedstocks as raw materials, and viability and volume of certain of our products.viability. In our Energy segment, government policies, mandates and regulations designed to stop or impede development or production of petroleum-based products, such as those limiting or banning use of hydraulic fracturing, drilling or oilsands production or restricting the sale of new combustion-engine vehicles, could adversely affect our operations and profitability.

We could be the target of claims of false or deceptive advertising under U.S. federal and state laws, as well as foreign laws, including consumer protection statutes of some states. Food product marketing has come under increased regulatory scrutiny in recent years, and theThe food industry has beenexperienced subjectheightened toscrutiny and an increasing number of proceedings and claims relatingrelated to alleged false or deceptive labeling and marketing under federal, state and foreign laws or regulations.practices. Changes in legal or regulatory requirements (such as new food safety requirements and revised nutrition facts labeling, including front-of-pack labeling and serving size regulations) or evolving interpretations of existing legal or regulatory requirements may result in increased compliance costs, capital expenditures and other financial obligations that could adversely affect our business or financial results. If we are found to be out of compliance with applicable laws and regulations in these areas, we could be subject to civil remedies, including fines, injunctions, termination of necessary licenses or permits, or recalls, as well as potential criminal sanctions, any of which could have a material adverse effect on our business. The EU deforestation-free regulation ("EUDR"), which is to become effective in December 2024,2025, will require companies trading in certain commodities, including soybeans, as well as products derived from these commodities, to ensure these commodities and related products do not result from deforestation, forest degradation or breaches of local laws after December 31, 2020, in order to sellqualify suchfor productssale in the European Union. Failure to comply with the regulation could have serious consequences, including civil, administrative and criminal penalties, as well as negative impactimpacts on our reputation, business, cash flows and results of operations.

In addition, changes in international trade agreements and trade disputes can adversely affect commodity trade flows by limiting or disrupting trade between countries or regions. In many countries around the world, historical free trade relationships are being challenged, and it is unclear what changes, if any, will be made to international trade agreements that are relevant toaffecting our businessoperations. activities. These actions and uncertainties have led to significantResulting volatility in commodity prices, disruptions in historical trade flows and shifts in planting patternspatterns, particularly in the United States and South America, all of which have resulted inhas reduced volumes of grain exportsexport overallvolumes and haveincreased presentedbusiness challenges and uncertainties for our business.uncertainty. Changes in trade policy, withdrawals from or material modifications to relevant international trade agreements and continued uncertainty could depress economic activity and restrict our access to suppliers and customers, and we cannot predict the effects of future trade policies, disputes or agreements on our business. Tariffs and trade restrictions that are implemented on products that we buy and/or sell could increase the cost of those products or adversely affect market access. These cost increases and market changes could adversely affect demand for our products and reduce margins, which could have a material adverse effect on our business and our earnings. In addition, the U.S. government can prevent or restrict us from doing business in or with other countries, such as the economic sanctions that were imposed by the U.S. government on Russia and certain of its citizens and enterprises in connection with Russia's war with Ukraine. These restrictions and those of other governments could limit our ability to gain access to business opportunities in various countries.

Current federal income tax laws, regulations and interpretations, including those specific to taxation of cooperatives, provide us certain income tax benefits such as allowing us to exclude income generated through business with or for a member (patronage-sourced income) from our taxable income to the extent it is distributed back to our members. We continue to monitor potential changes to federal income tax laws, regulations or interpretations, such as the Inflation Reduction Act of 2022, H.R. 5376,interpretations to evaluate their potential impact on our business, tax position and financial results. The change in administration and regulatory leadership has created additional uncertainty with respect to federal tax policy. The current administration has proposed, and may propose further, changes that could alter, narrow or repeal provisions of federal tax law relevant to cooperatives. These changes, and any administrative or judicial challenges to them or further changes by future administrations, create uncertainty for our business and may affect our ability to receive anticipated tax credits or other benefits, which in turn could reduce the profitability of certain projects and increase our overall tax burden. If in the future, for example, we were to be subject to a corporate alternative minimum tax, or we were not eligible to be taxed as a cooperative, our tax liability would significantly increase and our net income would significantly decrease.

We are subject to numerous federal, state and local provisions regulating our business and operations. We incur and expect to incur significant capital and operating expenses to comply with these laws and regulations. We may be unable to pass on those expenses to customers without experiencing volume and margin losses. ForOngoing example,changes thein compliancefinancial-market burden and impact on our operations and profitability as a result of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") and related regulations continue to evolve, as federal agenciesregulation have implementedsubjected andderivatives continue to implement the act's many provisions through regulation. These efforts to change regulation of financial markets subject users of derivatives,users, such as CHS,CHS to extensiveincreased CFTC oversight and regulationcompliance byobligations, theraising CFTC.operating Such initiatives have imposedcosts and maypotential continueexposure to impose additional costs on us, including operating and compliance costs, and the cost of fines or penalties infor the event we do not comply, and could materially affect the availability, as well as the cost and terms, of certain transactions. Certain federal regulations addressing Dodd-Frank are still being implemented and others are being finalized. We will continue to monitor these developments.noncompliance. In addition, new laws and regulations that are applicable to us or our businesses may be adopted, and a changeshifts in thegovernment U.S. government's administration and its policiespolicy may increase the likelihood of such legal and regulatory developments. If new laws or regulations become applicable to us or our businesses, our compliance costs could increase. Any of the above matters could have a material adverse effect on our business, financial condition, liquidity, results of operations and prospects.

We establish reserves for the future cost of known compliance obligations, such as remediation of identified environmental issues. However, these reserves may prove inadequate to meet our actual liability. Moreover, amended, new or more stringent requirements, stricter interpretations of existing requirements or discovery of currently unknown compliance issues may require us to make material expenditures or subject us to liabilities that we currently do not anticipate. Furthermore, our failure to comply with applicable laws and regulations could subject us to administrative penalties and injunctive relief, civil remedies, including fines and injunctions, criminal fines and penalties, and recalls of our products. For example, we regularly maintain hedges to manage price risks associated with our commercial operations. These transactions typically take place on exchanges such as the CME. Our hedging transactions and activities are subject to the rules and regulations of the exchanges we use and governing bodies, including the CME, NYMEX, CBOT, MGEXMIAX and CFTC. All exchanges have broad powers to review required records, to investigate and enforce compliance and to punish noncompliance by entities subject to their jurisdiction. Failure to comply with such rules and regulations could lead to restrictions on our trading activities or subject us to enforcement action by the CFTC or a disciplinary action by the exchanges, which could lead to substantial fines or penalties or limitations on our related operations. In addition, any investigation or proceeding by an exchange or the CFTC, whether successful or unsuccessful, could result in substantial costs, diversion of resources, including management time, and potential harm to our reputation, all of which could have a material adverse effect on our business financial condition, liquidity, results of operations and prospects.

In addition, new legislation, regulatory programs, reporting requirements or customer or other stakeholder expectations could require substantial expenditures for installation and operation of systems and equipment or for substantial modifications to existing equipment, as well as increased compliance costs. We are or may be obligated to comply with new climate-related reporting requirements under SEC rules, laws of member states of the European Union implementing the EU Corporate Sustainability Reporting Directive ("CSRD") and other laws and regulations, which may require us to provide, at least annually, detailed public disclosures about the greenhouse gas emissions and other climate-related effects our activities produce, the climate-related operating and financial risks we face and the strategies we pursue to reduce and adapt to the impacts of climate change. If we fail to compile, assess and report the required operating and accounting information in a timely manner and in accordance with mandatory reporting standards, we could be exposed to fines and other sanctions and sustain harm to our reputation. Pursuant to the Energy Independence and Security Act of 2007, the EPA has promulgated the Renewable Fuel Standard ("RFS"), which requires refiners to blend renewable fuels, such as ethanol and biodiesel, with their petroleum fuels or purchase renewable energy credits, known as Renewable Identification Numbers ("RINs"), in lieu of blending. The EPA generally establishes new annual renewable fuel percentage standards for each compliance year in the preceding year, which affects the domestic market for ethanol. In June 2025, the EPA proposed standards for compliance years 2026 and 2027, which as of the date of this Report have not yet been adopted. The proposal includes a sizable increase in renewable fuel percentage standards from those in 2025 and, if implemented as proposed, could result in a significant increase in our compliance costs for these periods. We generate RINs through our blending activities, but we cannot generate enough RINs to meet the needs of our refining capacity, and RINs must be purchased on the open market. In recent years, the price of RINs has been extremely volatile. Continued RIN volatility could have a negative impact on our future refined fuels margins. In addition, certain states have established proposed laws around low-carbon fuel standards that require refiners to sell fuel with carbon intensity values at certain established benchmarks or purchase a sufficient number of credits on the open market to meet the benchmark.

CHS Inc. 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.Nasdaq. We operate in the following three reportable segments:

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

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

•Nitrogen Production. Produces and distributes nitrogen fertilizer. ItThis segment consists of our equity method investment in CF Nitrogen and allocated expenses.

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 fiscal quarter. For example, in our Ag segment, our ag retail 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 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 certain operating areas, such as refined fuel 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.

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,weather; crop damage due to plant disease or insects,insects; drought,drought; availability/adequacy of supply of a commodity,commodity; availability of reliable railrail, river, truck and riverocean transportation networks,networks; disease outbreaks,outbreaks; government regulations and policies,policies; global trade disputes,disputes; wars and civil unrest,unrest; and general political and/or economic conditions.

•In ourOur Ag segment,segment earningsperformed declinedwell, comparedalthough todown from strong results in the prior yearyear. asThis awas resultmainly ofdue to softening grain and oilseed product margins, lower oilseed crush marginsmargins, declining commodity prices and global market conditions that drove down margins for U.S. grain and oilseed exports.conditions.

•Equity method investments continued to performprovide well,solid withcontributions to CHS income, including strong results from our investments in CF Nitrogen investmentand beingVentura the largest contributor.Foods.

Our segments operate in cyclical environments in which market conditions can change rapidly with significant positive or negative impacts on our results. We anticipate various macroeconomic factors will continue to drive uncertainty and instability in global energy and agricultural commodity markets, as well as global financial markets, which could have a significant impact on each of our segments during fiscal 2025.2026. These factors include, among others, the ongoing war between Russia and Ukraine and further escalation of conflict in the Middle East, shifts in global trade flows for commodities, including global competitiveness giving rise to a weak export market for U.S. sourcedU.S.-sourced agricultural products, potential changes in U.S. trade policypolicy, followingincreased theor U.S.fluctuating general election in November,tariffs, a changing interest rate environment, and continued pricing pressures impacting costs of labor, freight and materials. These factors, or any form of them, could cause significant margin pressure and lower profitability. In addition to these broad macroeconomic factors, other factors could impact demand and pricing for agricultural inputs and outputs, as well as our ability to supply those inputs and outputs while remaining profitable. These include regional factors, such as unpredictable weather conditions, including those due to climate change. We currently expect global supply and demand factors impacting energy and agricultural commodities to be less favorableunfavorable for us in fiscal 2025.2026. Further, in light of increasing uncertainty in the markets we serve, we are unable to predict how long the current environment will last or the significance of the financial and operational impacts to us; however, we currently expect the trend of reduced margins for energy and agricultural commodities to persist in fiscal 2025.2026. Refer to Item 1A of this Annual Report on Form 10-K for additional consideration these risks may have on our business operations and financial performance.

We will continue to execute our enterprise priorities for fiscal 2025,2026, including pursuingmaximizing growthour platforms through strategicour investmentsintegrated supply chains and cooperativecapitalizing connectionson domestic and leveragingglobal our financial strength and resilienceopportunities, as we navigate less favorable market conditions for energy and agricultural commodities.

*Lower refinery throughput volumes and refined fuel yields experienced during fiscal 20232025 were primarily due to a planned shutdown to perform major maintenance at our Laurel,McPherson, Montana,Kansas, refinery.refinery during the third quarter of fiscal 2025.

We are subject to the Renewable Fuel Standard 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 a final renewable volume obligation ("RVO") for calendar years 2020 through 2025. We generate RINs through our blending activities, but we cannot generate enough RINs to meet the needs of our refining capacity; therefore, RINs must be purchased on the open market. The price of RINs can be volatile, with prices for D6 ethanol RINs and D4 biodiesel RINs decreasingincreasing by 57%24% and 58%,29%, respectively, during fiscal 20242025, compared to the prior year, which positivelynegatively impacted our earnings. Estimates of our RIN expenses are calculated using an average RIN price each month.

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 crude 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 supply and demand of refined products. Crack spreads and WCS crude oil discounts both decreased in fiscal 2024,2025, compared to the prior year, contributing to significantly decreased IBIT for the Energy segment. The table below provides information about average market reference prices and differentials that impacted our Energy segment:

*Market source information represents the average month-end price during the period. Group 3 refers to the oil refining and distribution system serving the Midwest markets from the Gulf Coast through the Plains states.

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 largelymostly 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 outside our control. The table below provides information about average market prices for agricultural commodities, as well as sales and throughput volumes that impacted our Ag segment for the years ended August 31, 20242025 and 20232024:

*Amounts less than 0.1% are shown as zero percent. Percentage subtotals may differnot sum due to rounding.

The charts below detail revenues, net of intersegment revenues, and IBIT by reportable segment for fiscal 2024.2025. Our Nitrogen Production reportable segment represents an equity method investment that records earnings and allocated expenses, but not revenues.

(Loss) Income Before Income Taxes by Segment

•Lower marginsHigher fromcosts premiumsfor onRINs, seasonalexclusive refinedof fuelsthe productssmall refinery exemption, contributed $28.0to a $45.7 million decrease of decreased IBIT.

•Decreased margins offor $120.2 million forour oilseed processing product category, due to a higher global supply of canolasoybean and soybeancanola meal and oiloil, across global markets, resultingresulted in lower crush margins and decreased margins of $34.1 million for grain and oilseed due to competitive global grain markets that compressed margins, compared to the prior year.fiscal year and contributed to a $105.3 million decrease in IBIT.

•Decreased selling prices resulting from globalGlobal market conditions contributed to $1.0decreased billionselling and $121.3 million decreases in revenuesprices for refined fuels andthat propane,resulted respectively.in a $1.1 billion decrease in revenues.

•Decreased selling prices across allmost of our Ag segment product categories due to global market conditions were experienced during fiscal 2024,2025, including:

◦$484.1 $453.5 million decrease for oilseed processing; and

◦$331.6 $111.3 million decrease forassociated with renewable fuels.

•Global market conditions, including reduced RIN costs, contributed to decreasedDecreased costs for refined fuelsfuels, anddue propaneto thatglobal drovemarket $368.1conditions, contributed to a $618.7 million and $124.7 million decreasesdecrease in COGS, respectively.COGS.

•LowerDecreased costs across allmost of our Ag segment product categories due to global market conditions were experienced during fiscal 2024,2025, including:

◦$363.8 $348.2 million decrease for oilseed processing.processing; and

•Fiscal 2026 SecondThird Quarter Highlights

•The Grains segment comprises our global grain marketing and processing activities as part of the feed grains, oilseeds, wheat, specialty grains and animal nutrition product lines. The Grains segment connects producers to domestic and global grain markets through a broad origination and distribution network. It markets commodities such as wheat, corn, ethanol, soybeans, oilseeds and specialty grains. The segment operates grain facilities and trading offices across five continents, serving processors, food manufacturers and renewable fuel producers. Further, the Grains segment produces ethanol and is one of the nation's largest suppliers of ethanol inputs into gasoline products, while also specializing in soybean and canola processing. These results hadwere beenpreviously included within the former Ag segment.

•The Agronomy segment consists of our wholesale and retail agronomy activities within the crop nutrients and crop protection product lines. The Agronomy segment provides crop inputs and agronomy services to farmers, member cooperatives and other retailers. It offers crop nutrients, crop protection products and seed, including both proprietary and third-party brands. The Agronomy segment also includes our Nitrogen Production business consisting of our equity method investment in CF Nitrogen. Our supply agreement with CF Nitrogen requires us to purchase a specified quantity of granular urea and urea ammonium nitrate annually from CF Nitrogen. These results hadwere beenpreviously included within the former Ag and Nitrogen Production segments.

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 fiscal quarter. For example, in our Grains segment, our retail business generally experiences higher volumes and revenues during the fall harvest and spring planting seasons,harvest, which generally correspondcorresponds to our first and third fiscal quarters, respectively,quarter, and our global grain and processing operations within Grains are subject to fluctuations in volumes and revenues based on producer harvests, world grain prices, global demand and international trade relationships. Our Agronomy segment generally experiences higher volumes and revenues during the spring planting season. Our Energy segment generally experiences higher volumes and revenues in certain operating areas, such as refined fuel 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 tables below demonstrate the historical trend of seasonality inherent in our businesses.

Fiscal 2026 SecondThird Quarter Highlights

•ContinuedGrains performance was driven by continued global headwinds inaffecting Grains, including weaker soy and canola crushgrain margins, were partially offset by strongerstrong feedoilseed grains export volumes and retailcrush margins.

Our segments operate in cyclical environments in which market conditions can change rapidly with significant positive or negative impacts on our results. We anticipate various macroeconomic factors will continue to drive uncertainty and instability in global energy and agricultural commodity markets, as well as global financial markets, which could have a significant impact on each of our segments during fiscal 2026.2026 and beyond. These factors include, among others, the ongoing war between Russia and Ukraine and conflict in the Middle East, including Iran,East and other regions; shifts in global trade flows for commodities, including global economic impacts from supply disruptions associated with the conflict with Iran and access to the Strait of Hormuz; global competitiveness giving rise to a weak export market for U.S.-sourced agricultural products; potential changes in U.S. trade policy, including increased or fluctuating tariffs; a changing interest rate environment; and continued pricing pressures impacting costs of labor, freight and materials. These factors, or any form of them, could cause significant margin pressure and lower profitability. However, toTo mitigate these impacts, we evaluate the economic environment and adjust our operations and business strategies appropriately to help improve our position in the market. In addition to these broad macroeconomic factors, other factors could impact demand and pricing for agricultural inputs and outputs, as well as our ability to supply those inputs and outputs while remaining profitable. These include the cost of renewable energy credits, the pricesprice of which havehas been volatile in recent years and could positively or negatively impact our profitability. For example, the U.S. Environmental Protection Agency ("EPA") issued a renewable volume obligation ("RVO") in March 2026, which, as discussed in the MD&A Operating Metrics section, creates price uncertainty and volatility, while also potentially significantly increasing the cost of our compliance with the program. Given the nature of our business, market dynamics and other mechanisms, it is possible the potential RVO compliance costs may be partially or wholly offset by certain other opportunities in both our Energy and Grains businesses, but it is unknown if those opportunities will materialize in the future.materialize. Additional factors that could impact demand and pricing of agricultural inputs and outputs include a weaker farm economy and regional factors, such as unpredictable weather conditions, including those due to climate change. We currently expect global economic factors impacting energy and agricultural commodities to be volatile and have the potential to be headwinds and/or tailwinds dependent on future global market conditions as they evolve throughout the remainder of fiscal 2026.2026 and into fiscal 2027. Further, in light of uncertainty in the markets we serve, we are unable to predict how long the current environment will last or the significance of the financial and operational impacts to us; however, we currently expect the trend of volatile energy and agricultural commodities to persist throughout fiscal 2026.2026 and into fiscal 2027. Refer to Item 1A of our Annual Report on Form 10-K for the year ended August 31, 2025, for additional considerations these and other risks may have on our business operations and financial performance.

We generate RINs through our blending activities, but we cannot generate enough RINs to meet the needs of our refining capacity; therefore, RINs must be purchased on the open market. The price of RINs can be volatile, with prices for D6 ethanol RINs and D4 biodiesel RINs both increasing by approximately95% 72%and 85%, respectively, during the three months ended FebruaryMay 28,31, 2026, compared to the same period during the prior fiscal year. The final RVO has impacted the demand for RINs, and we expect continued price volatility along with elevated and potentially increasing RINs prices for the potentialremainder for further RINs price increases inof fiscal 2026 and beyond.into fiscal 2027. Estimates of our RINs expensesexpense are calculated using an average of RINs prices each month.

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 crude 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 supply and demand of refined products. Supply and demand dynamics in the global and North American refined product markets resulted in increased crack spreads during both the three and sixnine months ended FebruaryMay 28,31, 2026, compared to the same periods of the prior year. The table below provides information about average market reference prices and differentials that impacted our Energy segment.

Our Agronomy segment is primarily composed of our wholesale and retail agronomy activities within our crop nutrients and crop protection product lines. This segment provides innovative agriculture solutions to farmersfarmers, cooperatives and other retailers. Dedicated to supporting farmer success with effective agronomy practices, we offer crop nutrients, crop protection products and seed, including both proprietary and third-party brands. Our Agronomy segment includes our Nitrogen Production business consisting of our equity method investment in CF Nitrogen. Products in the Agronomy segment are supported by wholesale and retail channels from investment in domestic manufacturing and strategic relationships with suppliers around the world. Profitability in our Agronomy segment is largely driven by the relationship between global and regional supply and demand for the underlying products and raw materials, costs of inputs used in the fertilizer manufacturing process and strength of the agricultural industry throughout the trade territories in which we operate. The table below provides information about average market prices for agricultural commodities, as well as sales and throughput volumes for our Agronomy segment.

Three Months Ended FebruaryMay 28,31, 2026 and 2025

The table below details revenues, net of intersegment revenues, and IBIT by segment for the three months ended FebruaryMay 28,31, 2026.

The following commentary presents the changes in our Energy segment for the three months ended FebruaryMay 28,31, 2026, compared to the three months ended FebruaryMay 28,31, 2025.

Total Energy segment revenues increased $276.7$1,392.9 million, or 15.2%,72.7%, during the three months ended FebruaryMay 28,31, 2026, compared to the three months ended FebruaryMay 28,31, 2025, primarily due to the following:

•HigherStrong bulk refined fuels and propane sales volumes also drove revenues growth.

Energy segment IBIT decreasedincreased $54.2$66.6 million, or 68.2%,117.9%, during the three months ended FebruaryMay 28,31, 2026, compared to the three months ended FebruaryMay 28,31, 2025, primarily due to the following:

•These headwindsbenefits were partiallylargely offset by significantly higher crackRINs spreadsexpense and improvedunrealized saleshedging mix of higher-margin, produced refined fuels products.losses.

The following commentary presents the changes in our Grains segment for the three months ended FebruaryMay 28,31, 2026, compared to the three months ended FebruaryMay 28,31, 2025.

Total Grains segment revenues increased $201.1$368.3 million, or 4.0%,7.0%, during the three months ended FebruaryMay 28,31, 2026, compared to the three months ended FebruaryMay 28,31, 2025, primarily as a result of the following:

•LowerStrong sellingvolumes prices forfrom feed grains exports and wheatoilseed commoditiesprocessing contributeddemand to a decrease inincreased Grains segment price,revenues but were partially offset by aweaker benefitwheat from higher oilseed commodity selling prices.sales.

Grains segment IBIT decreased $9.5$0.7 million, or 113.7%,2.2%, during the three months ended FebruaryMay 28,31, 2026, compared to the three months ended FebruaryMay 28,31, 2025, primarily as a result of the following:

•Lower oilseedmargins crushassociated margins,with primarilywheat, fromfeed soygrains and canola,specialty products decreased IBIT.

The following commentary presents the changes in our Agronomy segment for the three months ended FebruaryMay 28,31, 2026, compared to the three months ended FebruaryMay 28,31, 2025.

Total Agronomy segment revenues increased $87.0$52.2 million, or 9.2%,2.1%, during the three months ended FebruaryMay 28,31, 2026, compared to the three months ended FebruaryMay 28,31, 2025, primarily due to the following:

•Higher wholesale and retail crop nutrients per-ton prices, due to tight market supply, increased Agronomy segment revenues.

•This was partially offset by lower sales volumes, driven primarily by deferred demand fromand a weaker U.S. farm economy, which decreased revenues.

Total Agronomy segment IBIT decreasedincreased $0.1$27.6 million, or 1.2%,11.2%, during the three months ended FebruaryMay 28,31, 2026, compared to the three months ended FebruaryMay 28,31, 2025, primarily due to the following:

•This decrease was partially offset by continuedContinued strong performance from our investment in CF Nitrogen, driven by higher urea and UAN prices.prices, and improved margins across crop nutrients and crop protection products increased IBIT.

During the three months ended FebruaryMay 28,31, 2026, compared to the same period in the prior fiscal year, lowerperformance transportationby volumesCHS negativelyCapital positively impacted Corporate and Services revenues, while IBIT decreased due to performancethe gain from the sale of a business by our equity methodinvestment, investmentsVentura Foods, during the prior fiscal year that did not reoccur in Venturathe Foodscurrent and Ardent Mills.year.

Consolidated cost of goods sold increased $608.1$1,734.9 million, or 7.9%,18.4%, during the three months ended FebruaryMay 28,31, 2026, compared to the three months ended FebruaryMay 28,31, 2025, primarily due to the following:

•Increased bulk sales volumes of refined fuels and propane products, increased RINs expensesexpense, higher commodity prices and unrealized hedging losses increased COGS in our Energy segment.

•Higher sales volumes of feed grains inand ouroilseed Grainsproducts, segmentalong with increased wheat prices, contributed to increased COGS.COGS in our Grains segment.