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Hedging, Inc. has an equity redemption system
of which is separate from our parent CHS Inc.
We recognize that returning cash to our patrons
is one of the ways we can fulfill our company’s
mission of improving producers’ and
agribusinesses’ profitability and value.
Below
is a brief description on how the equity
redemption system works:
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New
Issue – Annual |
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Eligible
entities that apply and are accepted into
the CHI membership are entitled to patronage
in any CHI fiscal year in which they meet
the minimum threshold commission amount. CHI
pays 35% of the allocated patronage amount
in cash and the remaining amount is held in
equity certificates. The entire amount of
the patronage is taxable in the year it is
issued. |
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Pro
Rata – Annual |
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The
CHI Board of Directors has committed to returning
50% of CHI’s annual net income to its
members in the form of cash. Included in the
50% are patronage refunds (35% cash for new
issue) and equity redemptions (Pro Rata and
other Board-approved retirements). The amount
of total Pro Rata redemptions is calculated
as follows: |
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50%
Total Net Income less Patronage Refunds less
Retirements equal Pro Rata Redemption
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resulting Pro Rata percentage rate is determined
by dividing the Pro Rata Redemption amount
by the total of all eligible outstanding equities
excluding the most recent fiscal year. An
equity holder must have been active in at
least one of the five most recent fiscal years
in order to be eligible for the Pro Rata program.
Pro Rata redemptions are not taxable as tax
was paid in the year of original issue. Oldest
equities are retired first. |
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| Other
Retirements |
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In
addition to Pro Rata retirements, individuals
are also eligible to retire equities at the
age of 72 years. Any other retirement requests
must be approved by the CHI Board of Directors.
Please contact the Inver Grove Heights office
for more information. |
