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Equities | 12 Months Ended
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Aug. 31, 2018
Equity [Abstract] |
Equities | Equities In accordance with our bylaws and by action of the Board of Directors, annual net earnings from patronage sources are distributed to consenting patrons following the close of each fiscal year, and are based on amounts using financial statement earnings. The cash portion of the qualified patronage distribution, if any, is determined annually by the Board of Directors, with the balance issued in the form of qualified and/or non-qualified capital equity certificates. Total patronage distributions for fiscal 2018 are estimated to be $420.3 million, with the qualified cash portion estimated to be $75.0 million and non-qualified equity distributions of $345.3 million. No portion of annual net earnings for fiscal 2018 will be issued in the form of qualified capital equity certificates. Patronage distributions in fiscal 2017 were $128.8 million, with no cash portion. The actual patronage distributions and cash portion for fiscal 2016, and 2015 were $257.5 million ($103.9 million in cash), and $627.2 million ($251.7 million in cash), respectively. Annual net earnings from patronage or other sources may be added to the unallocated capital reserve or, upon action by the Board of Directors, may be allocated to members in the form of nonpatronage equity certificates. The Board of Directors authorized, in accordance with our bylaws, that 10% of the earnings from patronage business for fiscal 2018, 2017, and 2016 be added to our capital reserves. Redemptions of outstanding equity are at the discretion of the Board of Directors. Redemptions of capital equity certificates approved by the Board of Directors are divided into two pools, one for non-individuals (primarily member cooperatives) who may participate in an annual redemption program for qualified equities held by them and another for individual members who are eligible for equity redemptions at age 70 or upon death. Beginning with fiscal 2017 patronage (for which distributions were made in fiscal 2018), CHS's redemption policy includes a redemption program for individuals similar to the one that was previously only available to non-individual members, subject to the CHS Board of Directors' overall discretion whether to redeem outstanding equity. In accordance with authorization from the Board of Directors, we expect total redemptions related to the year ended August 31, 2018, that will be distributed in fiscal 2019, to be approximately $75.0 million. This amount is classified as a current liability on our August 31, 2018, Consolidated Balance Sheet. During the years ended August 31, 2018, 2017, and 2016, we redeemed in cash, outstanding owners' equities in accordance with authorization from the Board of Directors, in the amounts of $8.8 million, $35.3 million and $23.9 million, respectively. In March 2017, we redeemed approximately $20.0 million of patrons' equities by issuing 695,390 shares of Class B Cumulative Redeemable Preferred Stock, Series 1 ("Class B Series 1 Preferred Stock"), with a total redemption value of $17.4 million, excluding accumulated dividends. Each share of Class B Series 1 Preferred Stock was issued in redemption of $28.74 of patrons' equities in the form of capital equity certificates. Additionally, in fiscal 2016, we redeemed approximately $76.8 million of patrons' equities by issuing 2,693,195 shares of Class B Series 1 Preferred Stock with a total redemption value of $67.3 million, excluding accumulated dividends. Each share of Class B Series 1 Preferred Stock was issued in redemption of $28.50 of patrons' equities in the form of capital equity certificates. Preferred Stock The following is a summary of our outstanding preferred stock as of August 31, 2018, all shares of which are listed on the Global Select Market of Nasdaq:
|  | Nasdaq symbol |  | Issuance date |  | Shares outstanding |  | Redemption value |  | Net proceeds (a) |  | Dividend rate (b) (c) |  | Dividend payment frequency |  | Redeemable beginning (d)
|  |  |  |  |  |  |  | (Dollars in millions) |  |  |  |  |  |
8% Cumulative Redeemable |  | CHSCP |  | (e) |  | 12,272,003 |  |  | $ | 306.8 |  |  | $ | 311.2 |  |  | 8.00 | % |  | Quarterly |  | 7/18/2023
Class B Cumulative Redeemable, Series 1 |  | CHSCO |  | (f) |  | 21,459,066 |  |  | $ | 536.5 |  |  | $ | 569.3 |  |  | 7.875 | % |  | Quarterly |  | 9/26/2023
Class B Reset Rate Cumulative Redeemable, Series 2 |  | CHSCN |  | 3/11/2014 |  | 16,800,000 |  |  | $ | 420.0 |  |  | $ | 406.2 |  |  | 7.10 | % |  | Quarterly |  | 3/31/2024
Class B Reset Rate Cumulative Redeemable, Series 3 |  | CHSCM |  | 9/15/2014 |  | 19,700,000 |  |  | $ | 492.5 |  |  | $ | 476.7 |  |  | 6.75 | % |  | Quarterly |  | 9/30/2024
Class B Cumulative Redeemable, Series 4 |  | CHSCL |  | 1/21/2015 |  | 20,700,000 |  |  | $ | 517.5 |  |  | $ | 501.0 |  |  | 7.50 | % |  | Quarterly |  | 1/21/2025
(a) | Includes patrons' equities redeemed with preferred stock.
(b) | The Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2 accumulates dividends at a rate of 7.10% per year until March 31, 2024, and then at a rate equal to the three-month LIBOR plus 4.298%, not to exceed 8.00% per annum, subsequent to March 31, 2024.
(c) | The Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3 accumulates dividends at a rate of 6.75% per year until September 30, 2024, and then at a rate equal to the three-month LIBOR plus 4.155%, not to exceed 8.00% per annum, subsequent to September 30, 2024.
(d) | Preferred stock is redeemable for cash at our option, in whole or in part, at a per share price equal to the per share liquidation preference of $25.00 per share, plus all dividends accumulated and unpaid on that share to and including the date of redemption, beginning on the dates set forth in this column.
(e) | The 8% Cumulative Redeemable Preferred Stock was issued at various times from 2003 through 2010.
(f) | Shares of Class B Cumulative Redeemable Preferred Stock, Series 1 were issued on September 26, 2013, August 25, 2014, March 31, 2016 and March 30, 2017.
We made dividend payments on our preferred stock of $168.7 million, $167.6 million, and $163.3 million, during the years ended August 31, 2018, 2017 and 2016, respectively. As of August 31, 2018, we have no authorized but unissued shares of preferred stock. Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive income (loss) by component, for the years ended August 31, 2018, 2017, and 2016 are as follows:
| Pension and Other Postretirement Benefits |  | Unrealized Net Gain (Loss) on Available for Sale Investments |  | Cash Flow Hedges |  | Foreign Currency Translation Adjustment |  | Total
| (Dollars in thousands)
Balance as of August 31, 2015, net of tax (As previously reported) | $ | (171,729 | ) |  | $ | 4,156 |  |  | $ | (5,324 | ) |  | $ | (41,310 | ) |  | $ | (214,207 | )
Cumulative restatement adjustments | — |  |  | — |  |  | — |  |  | 1,370 |  |  | 1,370 |
Balance as of August 31, 2015, net of tax (As restated) | (171,729 | ) |  | 4,156 |  |  | (5,324 | ) |  | (39,940 | ) |  | (212,837 | )
Other comprehensive income (loss), before tax: |  |  |  |  |  |  |  |  |
Amounts before reclassifications | (10,512 | ) |  | 2,447 |  |  | (11,353 | ) |  | (2,210 | ) |  | (21,628 | )
Amounts reclassified out | 20,998 |  |  | — |  |  | 5,071 |  |  | 469 |  |  | 26,538 |
Total other comprehensive income (loss), before tax | 10,486 |  |  | 2,447 |  |  | (6,282 | ) |  | (1,741 | ) |  | 4,910 |
Tax effect | (3,903 | ) |  | (947 | ) |  | 2,410 |  |  | (1,163 | ) |  | (3,603 | )
Other comprehensive income (loss), net of tax | 6,583 |  |  | 1,500 |  |  | (3,872 | ) |  | (2,904 | ) |  | 1,307 |
Balance as of August 31, 2016, net of tax (As restated) | (165,146 | ) |  | 5,656 |  |  | (9,196 | ) |  | (42,844 | ) |  | (211,530 | )
Other comprehensive income (loss), before tax: |  |  |  |  |  |  |  |  |
Amounts before reclassifications | 25,216 |  |  | 7,117 |  |  | 1,892 |  |  | (7,960 | ) |  | 26,265 |
Amounts reclassified out | 26,174 |  |  | — |  |  | 1,742 |  |  | 15 |  |  | 27,931 |
Total other comprehensive income (loss), before tax | 51,390 |  |  | 7,117 |  |  | 3,634 |  |  | (7,945 | ) |  | 54,196 |
Tax effect | (18,688 | ) |  | (2,732 | ) |  | (1,392 | ) |  | (214 | ) |  | (23,026 | )
Other comprehensive income (loss), net of tax | 32,702 |  |  | 4,385 |  |  | 2,242 |  |  | (8,159 | ) |  | 31,170 |
Balance as of August 31, 2017, net of tax (As restated) | (132,444 | ) |  | 10,041 |  |  | (6,954 | ) |  | (51,003 | ) |  | (180,360 | )
Other comprehensive income (loss), before tax: |  |  |  |  |  |  |  |  |
Amounts before reclassifications | 7,633 |  |  | 21,078 |  |  | 1,031 |  |  | (10,062 | ) |  | 19,680 |
Amounts reclassified out | 21,804 |  |  | (25,534 | ) |  | 1,704 |  |  | (2,042 | ) |  | (4,068 | )
Total other comprehensive income (loss), before tax | 29,437 |  |  | (4,456 | ) |  | 2,735 |  |  | (12,104 | ) |  | 15,612 |
Tax effect | (9,371 | ) |  | 1,308 |  |  | (195 | ) |  | 83 |  |  | (8,175 | )
Other comprehensive income (loss), net of tax | 20,066 |  |  | (3,148 | ) |  | 2,540 |  |  | (12,021 | ) |  | 7,437 |
Reclassification of tax effects to retained earnings | (27,957 | ) |  | 1,968 |  |  | (1,468 | ) |  | 465 |  |  | (26,992 | )
Balance as of August 31, 2018, net of tax | $ | (140,335 | ) |  | $ | 8,861 |  |  | $ | (5,882 | ) |  | $ | (62,559 | ) |  | $ | (199,915 | )
During fiscal 2018, we adopted ASU No. 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income. Under U.S. GAAP, the effects of tax law changes on deferred tax balances, including adjustments to deferred taxes originally recorded to accumulated other comprehensive income (loss), are recorded as a component of income tax expense. Adjusting deferred tax balances related to items originally recorded in accumulated other comprehensive income (loss) through tax expense resulted in a remaining accumulated other comprehensive income (loss) balance that was disproportionate to the amounts that would have been recorded through net income in future periods. The new guidance allowed us to reclassify $27.0 million of disproportionate (or stranded) amounts related to the Tax Act to capital reserves. Amounts reclassified from accumulated other comprehensive income (loss) were related to pension and other postretirement benefits, cash flow hedges, available for sale investments and foreign currency translation adjustments. Pension and other postretirement reclassifications include amortization of net actuarial loss, prior service credit and transition amounts and are recorded as cost of goods sold and marketing, general and administrative expenses (see Note 11, Benefit Plans for further information). Amortization related to gains or losses on cash flow hedges is recorded to interest expense. Gains or losses on the sale of available for sale investments are recorded to other income. Foreign currency translation reclassifications related to sales of businesses are recorded to gain on sale of business or reserve and impairment charges (recoveries), net. During fiscal 2016, interest rate swaps accounted for as cash flow hedges were terminated as the issuance of the underlying debt was no longer probable. As a result, a $3.7 million loss was reclassified from accumulated other comprehensive loss into net income. This pre-tax loss is included as a component of interest expense in our Consolidated Statement of Operations for the year ended August 31, 2016.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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