XML 191 R15.htm IDEA: XBRL DOCUMENT
v3.3.0.814

Income Taxes | 12 Months Ended
--- | ---
Aug. 31, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provision for income taxes for the years ended August 31, 2015, 2014 and 2013 is as follows:
| 2015 |  | 2014 |  | 2013
| (Dollars in thousands)
Current: |  |  |  |  |
Federal | $ | (47,695 | ) |  | $ | 38,653 |  |  | $ | (18,018 | )
State | 3,891 |  |  | 31,203 |  |  | 11,805 |
Foreign | 1,335 |  |  | 2,837 |  |  | 3,162 |
| (42,469 | ) |  | 72,693 |  |  | (3,051 | )
Deferred: |  |  |  |  |
Federal | 29,348 |  |  | (23,444 | ) |  | 92,102 |
State | (2,799 | ) |  | (1,893 | ) |  | 1,685 |
Foreign | 3,755 |  |  | 940 |  |  | (1,070 | )
| 30,304 |  |  | (24,397 | ) |  | 92,717 |
Total | $ | (12,165 | ) |  | $ | 48,296 |  |  | $ | 89,666 |
Deferred taxes are comprised of basis differences related to investments, accrued liabilities and certain federal and state tax credits. Effective September 1, 2013, CHS McPherson (formerly known as NCRA) files as part of our consolidated income tax returns and, as such, these items are assessed in conjunction with our deferred tax assets when determining recoverability. Domestic income before income taxes was $0.8 billion, $1.2 billion, and $1.1 billion for the years ended August 31, 2015, 2014 and 2013 respectively. Foreign activity made up the difference between the total income before income taxes and the domestic amounts. Deferred tax assets and liabilities as of August 31, 2015 and 2014 were as follows:
| 2015 |  | 2014
| (Dollars in thousands)
Deferred tax assets: |  |  |  |  |
Accrued expenses | $ | 96,270 |  |  | $ | 76,255 |
Postretirement health care and deferred compensation | 89,934 |  |  | 83,346 |
Tax credit carryforwards | 109,756 |  |  | 70,881 |
Loss carryforwards | 85,860 |  |  | 53,793 |
Other | 68,625 |  |  | 52,956 |
Deferred tax assets valuation | (98,024 | ) |  | (111,509 | )
Total deferred tax assets | 352,421 |  |  | 225,722 |
Deferred tax liabilities: |  |  |  |  |
Pension | 20,732 |  |  | 12,855 |
Investments | 98,291 |  |  | 88,425 |
Major maintenance | 36,135 |  |  | 26,020 |
Property, plant and equipment | 654,057 |  |  | 576,007 |
Other | 25,836 |  |  | — |
Total deferred tax liabilities | 835,051 |  |  | 703,307 |
Net deferred tax liabilities | $ | 482,630 |  |  | $ | 477,585 |
We have total gross loss carry forwards of $431.4 million, of which $293.9 million will expire over periods ranging from fiscal 2016 to fiscal 2035. The remainder will carry forward indefinitely. Based on estimates of future taxable profits and losses in certain foreign tax jurisdictions, we determined that a valuation allowance was required for specific foreign loss carry forwards as of August 31, 2015. If these estimates prove inaccurate, a change in the valuation allowance, up or down, could be required in the future. During fiscal 2015, valuation allowances related to foreign operations increased by $8.8 million due to net operating loss carryforwards and other timing differences. CHS McPherson's (formerly known as NCRA) gross state tax credit carry forwards for income tax are approximately $62.2 million and $63.4 million as of August 31, 2015, and 2014, respectively. During the year ended August 31, 2015, the valuation allowance for CHS McPherson decreased by $20.1 million, net of tax, due to a change in the amount of state tax credits that are estimated to be utilized. CHS McPherson's valuation allowance on Kansas state credits is necessary due to the limited amount of Kansas taxable income generated by the combined group on an annual basis. Our foreign tax credit of $8.0 million will expire on August 31, 2019 and our alternative minimum tax credit of $5.6 million will not expire. Our general business credits of $55.7 million, comprised primarily of low sulfur diesel credits, will begin to expire on August 31, 2026. Our state tax credits of $62.2 million will begin to expire on August 31, 2018. As of August 31, 2015, deferred tax assets of $85.0 million and $1.6 million were included in other current assets and other assets, respectively. As of August 31, 2014, net deferred tax assets of $86.5 million and $2.6 million were included in other current assets and other assets, respectively. The reconciliation of the statutory federal income tax rates to the effective tax rates for the years ended August 31, 2015, 2014 and 2013 is as follows:
| 2015 |  | 2014 |  | 2013
Statutory federal income tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State and local income taxes, net of federal income tax benefit | (0.5 | ) |  | 1.6 |  |  | 0.9 |
Patronage earnings | (29.0 | ) |  | (20.5 | ) |  | (22.9 | )
Domestic production activities deduction | (5.6 | ) |  | (10.0 | ) |  | (8.5 | )
Export activities at rates other than the U.S. statutory rate | (0.2 | ) |  | 1.2 |  |  | 0.6 |
Valuation allowance | (0.1 | ) |  | 1.7 |  |  | 2.3 |
Tax credits | (0.8 | ) |  | (3.1 | ) |  | (0.5 | )
Non-controlling interests | — |  |  | — |  |  | (0.1 | )
Other | (0.4 | ) |  | (1.6 | ) |  | 1.5 |
Effective tax rate | (1.6 | )% |  | 4.3 | % |  | 8.3 | %
During fiscal 2015, our Board of Directors adopted a resolution to treat non-qualified equity certificates issued to individual producers and their estates in fiscal 2014 and fiscal 2013 in the same manner as qualified equity certificates under the “Eligible Producer Member Equity” provision of the Policy for the Redemption of CHS Inc. Equities. Previously there was no intent to redeem non-qualified equity certificates held by individual producer members and their estates, thus the tax benefit associated with redemption would have been recognized in future periods as those redemptions occur. As a result of the new resolution, we recorded a $30.8 million deferred tax benefit during fiscal 2015 related to the future redemption of non-qualified equity held by individual members and their estates. During fiscal 2015, we recorded a $19.3 million deferred tax benefit from the recognition of a portion of our Kansas income tax credits. The credits were generated by CHS McPherson (formerly NCRA) in years prior to fiscal 2015 but were not able to be recognized until CHS and CHS McPherson began filing on a combined basis in Kansas. We file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. Our uncertain tax positions are affected by the tax years that are under audit or remain subject to examination by the relevant taxing authorities. In addition to the current year, fiscal 2006 through 2014 remain subject to examination, at least for certain issues. We account for our income tax provisions in accordance with ASC Topic 740, Income Taxes, which prescribes a minimum threshold that a tax provision is required to meet before being recognized in our consolidated financial statements. This interpretation requires us to recognize in our consolidated financial statements tax positions determined more likely than not to be sustained upon examination, based on the technical merits of the position. Reconciliation of the gross beginning and ending amounts of unrecognized tax benefits for the periods presented follows:
| 2015 |  | 2014 |  | 2013
| (Dollars in thousands)
Balance at beginning of period | $ | 72,181 |  |  | $ | 67,271 |  |  | $ | 67,271 |
Additions attributable to prior year tax positions | — |  |  | 35,718 |  |  | — |
Reductions attributable to prior year tax positions | — |  |  | (9,867 | ) |  | — |
Reductions attributable to statute expiration | — |  |  | (20,941 | ) |  | — |
Balance at end of period | $ | 72,181 |  |  | $ | 72,181 |  |  | $ | 67,271 |
During fiscal 2014, we increased our unrecognized tax benefits for excise tax credits related to the blending and sale of renewable fuels deducted for income taxes. If we were to prevail on all tax positions taken relating to uncertain tax positions, all of the unrecognized tax benefits would benefit the effective tax rate. It is reasonably possible that within the next 12 months we and the Internal Revenue Service will resolve a tax matter presently under consideration at appeals for fiscal 2006 and fiscal 2007 for which we have unrecognized tax benefits. Settlement could increase earnings in an amount ranging from $0 to $36.5 million based on current estimates. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. We recognize interest and penalties related to unrecognized tax benefits in our provision for income taxes. No amounts were recognized in our Consolidated Statements of Operations for interest related to unrecognized tax benefits for the years ended August 31, 2015 and 2014. For the year ended August 31, 2013, we recognized $0.2 million for interest related to unrecognized tax benefits. We recorded no interest payable related to unrecognized tax benefits on our Consolidated Balance Sheets as of August 31, 2015 and 2014.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration