Equities
In accordance with the 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 is determined annually by the Board of Directors, with the balance issued in the form of capital equity certificates. Total qualified patronage refunds for fiscal 2013 are estimated to be $711.9 million, with the cash portion estimated to be $284.8 million. Beginning in fiscal 2014, a portion of patronage refunds will be in the form of non-qualified capital equity certificates and is estimated to be $129.5 million. The actual qualified patronage refunds and cash portion for fiscal years 2012, 2011, and 2010 were $976.0 million ($380.9 million in cash), $676.3 million ($260.7 million in cash), and $402.4 million ($141.5 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 years 2013, 2012, and 2011 be added to our capital reserves.
Redemptions 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 program for equities held by them and another for individual members who are eligible for equity redemptions at age 70 or upon death. In accordance with authorization from the Board of Directors, we expect total redemptions related to the year ended August 31, 2013 that will be distributed in fiscal 2014, to be approximately $101.3 million. These expected distributions are classified as a current liability on the August 31, 2013 Consolidated Balance Sheet. For the years ended August 31, 2013, 2012 and 2011, we redeemed in cash, equities in accordance with authorization from the Board of Directors, in the amounts of $193.4 million, $145.7 million and $61.2 million, respectively.
Our 8% Preferred Stock is listed on the NASDAQ under the symbol CHSCP. On August 31, 2013, we had 12,272,003 shares of our 8% Preferred Stock outstanding with a total redemption value of $306.8 million, excluding accumulated dividends. Our 8% Preferred Stock accumulates dividends at a rate of 8% per year, which are payable quarterly. Dividends paid on our 8% Preferred Stock during the years ended August 31, 2013, 2012 and 2011, were $24.5 million, $24.5 million, and $24.5 million, respectively. During the year ended August 31, 2013, we amended the terms of our 8% Preferred Stock to provide that it may not be redeemed at our option until July 18, 2023.
During September 2013, we issued 11,319,175 shares of Class B Preferred Stock, with a total redemption value of $283.0 million, excluding accumulated dividends. The Class B Preferred Stock is listed on the NASDAQ under the symbol CHSCO and accumulates dividends at a rate of 7.875% per year, which are payable quarterly. Our Class B Preferred Stock may not be redeemed at our option until September 26, 2023.
As described in Note 17, Acquisitions, we have a firm commitment to purchase the remaining NCRA noncontrolling interests. The following table presents the effects of changes in our NCRA ownership interest on CHS equities for the years ended August 31, 2013, 2012, and 2011.
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| | | | | | | | | | | |
| 2013 | | 2012 | | 2011 |
| (Dollars in thousands) |
Net income attributable to CHS Inc. | $ | 992,386 |
| | $ | 1,260,628 |
| | $ | 961,355 |
|
Transfers to noncontrolling interests: | | | | | |
Decrease in CHS Inc. capital reserves for purchase of noncontrolling interests | | | (82,138 | ) | | |
Changes from net income attributable to CHS Inc. and transfers to noncontrolling interests | $ | 992,386 |
| | $ | 1,178,490 |
| | $ | 961,355 |
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