Refinery and Energy Performance - CHS Inc. reported a decrease in total refinery throughput volumes to 116,487 barrels per day in Q3 2025, down from 192,900 barrels per day in Q3 2024[115]. - The company conducted planned major maintenance at the McPherson refinery, resulting in lower sales of higher-margin refined products[113]. - The average WTI crude oil price was $63.99 per barrel in Q3 2025, down from $81.14 per barrel in Q3 2024[118]. - The Energy segment reported a loss before income taxes of $50,088 thousand in 2025, a significant decline from income of $97,850 thousand in 2024, representing a change of 151.2%[125]. - The Energy segment reported a loss before income taxes of $416,264,000 for the nine months ended May 31, 2025, compared to a loss of $113,794,000 in the prior year, reflecting a change of $530,058,000 or 127.3%[169]. - Revenues in the Energy segment decreased by $933,692,000 or 14.3%, from $6,541,840,000 in 2025 to $5,608,148,000 in 2024[181]. - Cost of goods sold in the Energy segment decreased by 6.6% to $1,760,043 thousand in 2025 from $1,885,415 thousand in 2024, driven by market oversupply conditions[149]. Agricultural Segment Performance - The Ag segment earnings improved due to higher volumes and margins in wholesale and retail agronomy products, despite decreased margins in grain and oilseed processing categories[113]. - Total grain and oilseed throughput reached 604,009 thousand bushels in Q3 2025, up from 540,067 thousand bushels in Q3 2024[119]. - The Ag segment's income before income taxes increased to $151,040 thousand in 2025, up 39.2% from $108,535 thousand in 2024[131]. - Revenues in the Ag segment rose to $7,962,254 thousand in 2025, an increase of 5.8% from $7,523,656 thousand in 2024[142]. - The Ag segment's revenues fell to $21,189,835,000 in 2025 from $23,486,932,000 in 2024, a decrease of $2,297,097,000 or 9.8%[185]. - Cost of goods sold in the Ag segment decreased to $20,542,339,000 in 2025 from $22,710,005,000 in 2024, a reduction of $2,167,666,000 or 9.5%[194]. Financial Performance Overview - Revenues for the three months ended May 31, 2025, were $9,766,421 thousand, a slight increase from $9,608,983 thousand in 2024, representing a growth of 1.6%[120]. - Gross profit decreased to $329,811 thousand in 2025, down from $467,795 thousand in 2024, reflecting a gross margin decline from 4.9% to 3.4%[120]. - Net income attributable to CHS Inc. was $232,184 thousand for the three months ended May 31, 2025, compared to $297,274 thousand in 2024, a decrease of 21.9%[120]. - Revenues for the nine months ended May 31, 2025, were $26,856,724,000, down from $30,087,121,000 in the same period of 2024, representing a decrease of $3,230,397,000 or 10.7%[163]. - Gross profit decreased to $806,802,000, which is 3.0% of revenues, compared to $1,478,637,000 or 4.9% of revenues in the prior year[163]. - Net income attributable to CHS Inc. for the nine months ended May 31, 2025, was $401,220,000, down from $990,504,000 in 2024, a decrease of $589,284,000 or 59.5%[163]. Expenses and Income Tax - Marketing, general and administrative expenses decreased by 18.2% to $258,850 thousand in 2025 from $316,435 thousand in 2024, primarily due to lower performance-based compensation expenses[157]. - Interest expense increased by 88.3% to $44,109 thousand in 2025 from $23,425 thousand in 2024, attributed to a higher short-term notes payable balance[158]. - Income tax expense increased to $12,613,000 in Q3 2025 from $27,175,000 in Q3 2024, a change of $14,562,000 or 115.5%[162]. - Income tax expense rose by $10.3 million (48.1%) to $31.7 million, influenced by reduced research and development tax credits and changes in state law, resulting in effective tax rates of 7.3% for 2025 compared to 2.1% for 2024[204]. Cash Flow and Capital Expenditures - Cash and cash equivalents decreased significantly from $794.9 million in August 2024 to $323.9 million in May 2025[205]. - Working capital decreased by $741.2 million to $2.57 billion as of May 31, 2025, due to increased current liabilities driven by seasonality[210]. - Total capital expenditures for fiscal 2025 are expected to be approximately $735.4 million, down from $808.8 million in fiscal 2024[207]. - Net cash used in operating activities was $635.3 million for the nine months ended May 31, 2025, a decrease of $795.0 million year-over-year[213]. - The company expects to pay approximately $168.7 million in dividends on preferred stock during fiscal 2025, with $126.5 million paid during the nine months ended May 31, 2025[207]. - The company redeemed $271.0 million of member equity during the nine months ended May 31, 2025, as part of its patronage program[208]. Market Outlook and Strategic Initiatives - The company anticipates continued margin pressure and lower profitability in energy and agricultural commodities through at least the remainder of fiscal 2025 due to macroeconomic factors[111]. - CHS Inc. expects global economic factors impacting energy and agricultural commodities to be less favorable in fiscal 2025 compared to fiscal 2024[111]. - CHS Inc. plans to pursue growth through strategic investments and cooperative connections despite less favorable market conditions[112]. - The company acquired WCAS for an estimated cash purchase price of $322.1 million, enhancing its grain and agronomy platforms[207]. - No material changes in market risk exposures were experienced for the period ended May 31, 2025[222]. - The company refers to Note 1 for applicable standards issued and not yet adopted[221].
CHS(CHSCM) - 2025 Q3 - Quarterly Report