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 non-qualified patronage distributions refunds for fiscal 2017 are estimated to be $126.3 million. No portion of annual net earnings for fiscal 2017 will be issued in the form of cash or qualified capital equity certificates. The actual patronage distributions and cash portion for fiscal 2016, 2015, and 2014 were $257.5 million ($103.9 million in cash), $627.2 million ($251.7 million in cash), and $821.5 million ($271.2 million in cash), respectively.

Annual net savings 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 2017, 2016, and 2015 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 will be made in fiscal 2018), individuals will also be able to participate in an annual redemption program similar to the one that was previously only available to non-individual members. In accordance with authorization from the Board of Directors, we expect total redemptions related to the year ended August 31, 2017, that will be distributed in fiscal 2018, to be approximately $10.0 million and are classified as a current liability on our August 31, 2017 Consolidated Balance Sheet. During the years ended August 31, 2017, 2016, and 2015, we redeemed in cash, outstanding owners' equities in accordance with authorization from the Board of Directors, in the amounts of $35.3 million, $23.9 million and $128.9 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, 2017, 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 $167.6 million, $163.3 million, and $133.7 million, during the years ended August 31, 2017, 2016 and 2015, respectively. As of August 31, 2017, 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, 2017, 2016, and 2015 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, 2014, net of tax	$	(151,852	)	$	4,398		$	(2,722	)	$	(6,581	)	$	(156,757	)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	(54,284		)	(396		)	(5,001		)	(30,672		)	(90,353		)
Amounts reclassified out	21,681			—			792			—			22,473
Total other comprehensive income (loss), before tax	(32,603		)	(396		)	(4,209		)	(30,672		)	(67,880		)
Tax effect	12,726			154			1,607			(4,057		)	10,430
Other comprehensive income (loss), net of tax	(19,877		)	(242		)	(2,602		)	(34,729		)	(57,450		)
Balance as of August 31, 2015, net of tax	(171,729		)	4,156			(5,324		)	(41,310		)	(214,207		)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	(10,512		)	2,447			(11,353		)	(1,036		)	(20,454		)
Amounts reclassified out	20,998			—			5,071			469			26,538
Total other comprehensive income (loss), before tax	10,486			2,447			(6,282		)	(567		)	6,084
Tax effect	(3,903		)	(947		)	2,410			(1,163		)	(3,603		)
Other comprehensive income (loss), net of tax	6,583			1,500			(3,872		)	(1,730		)	2,481
Balance as of August 31, 2016, net of tax	(165,146		)	5,656			(9,196		)	(43,040		)	(211,726		)
Other comprehensive income (loss), before tax:
Amounts before reclassifications	25,216			7,117			1,892			(8,472		)	25,753
Amounts reclassified out	23,572			—			1,742			15			25,329
Total other comprehensive income (loss), before tax	48,788			7,117			3,634			(8,457		)	51,082
Tax effect	(18,688		)	(2,732		)	(1,392		)	(214		)	(23,026		)
Other comprehensive income (loss), net of tax	30,100			4,385			2,242			(8,671		)	28,056
Balance as of August 31, 2017, net of tax	$	(135,046	)	$	10,041		$	(6,954	)	$	(51,711	)	$	(183,670	)

Amounts reclassified from accumulated other comprehensive income (loss) were related to pension and other postretirement benefits, cash flow hedges and foreign currency translation adjustments, and were recorded to net income. Pension and other postretirement reclassifications include amortization of net actuarial loss, prior service credit and transition amounts and are recorded as marketing, general and administrative expenses (see Note 10, Benefit Plans for further information).

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.