CHS Inc. 2021 Annual Variable Pay Plan Appendix, Plan Details

Financial Performance Goals are established for each Performance Period at the beginning of the Performance Period, including Return on Invested Capital (ROIC) and Return on Assets (ROA) (“Performance Goals”). The following table illustrates ROIC Performance Goals. Contact your Manager or finance contact for your group for more information on business unit ROA Performance Goals.

ROIC is a measurement of how efficiently the company uses its capital and the level of returns on that capital. It is calculated by dividing net operating profit after tax by funded debt plus equity. Further details on the ROIC calculation, goal determination and goals can be answered by the finance contact for your group. The formula used in the calculation of ROIC is as follows:

*(Earnings Before Taxes + Interest, Net) * (1- Effective Tax Rate)

**(Average of Beginning and End of Year Funded Debt) + Beginning of Year Equity

Calculation uses fiscal year 2020 July balance sheet for beginning of year funded debt and beginning of year equity. The fiscal year 2021 July balance sheet will be used for end of year funded debt. Funded debt is calculated by adding long-long term debt plus the current portion of long-term debt plus any guarantees of funded debt.

ROA is a measurement of how well a company uses its assets to generate earnings and maximizes returns on owner equity and company assets. It is calculated by dividing operating income by total assets minus working capital liabilities. Further details on the ROA calculation, goal determination and goals can be answered by the finance contact for your group. The formula used in the calculation of ROA is as follows:

*Earnings Before Taxes + Interest, Net + Corporate Indirect Allocations

**Beginning of Year Assets – Beginning of Year Working Capital Liabilities (current liabilities related to the Business Unit business activities excluding financing)

Calculation uses fiscal year 2020 July balance sheet to determine net assets. For individual Business Unit calculations interest income is not netted against interest expense.

Refer to the CHS Annual Variable Pay Plan Document for additional Plan details.