Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Oct. 31, 2017 | Jan. 29, 2018 | Apr. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Granite Falls Energy, LLC | ||
Entity Central Index Key | 1,181,749 | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 30,606 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 20,094,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Oct. 31, 2017 | Oct. 31, 2016 |
Current Assets | ||
Cash | $ 21,658,422 | $ 13,797,857 |
Restricted cash | 75,189 | |
Accounts receivable | 7,622,601 | 6,654,994 |
Inventory | 15,241,092 | 18,341,413 |
Commodity derivative instruments | 244,294 | 1,228,926 |
Prepaid expenses and other current assets | 361,340 | 325,989 |
Total current assets | 45,202,938 | 40,349,179 |
Property, Plant and Equipment | ||
Property and Equipment, net | 72,271,013 | 78,968,016 |
Goodwill | 1,372,473 | 1,372,473 |
Investment | 7,500,000 | |
Other Assets | 743,106 | 781,254 |
Total Assets | 127,089,530 | 121,470,922 |
Current Liabilities | ||
Current maturities of long-term debt | 432,183 | 490,057 |
Checks drawn in excess of bank balance | 1,866,683 | |
Accounts payable | 7,535,468 | 5,624,840 |
Corn payable to FCE | 5,358,111 | |
Commodity derivative instruments | 40,379 | |
Accrued expenses | 972,043 | 997,319 |
Total current liabilities | 8,980,073 | 14,337,010 |
Long-Term Debt, less current portion | 8,465,502 | 1,393,669 |
Commitments and Contingencies | ||
Members' equity attributable to Granite Falls Energy, LLC consists of 30,606 units authorized, issued, and outstanding at both October 31, 2017 and 2016 | 83,998,672 | 83,684,529 |
Non-controlling interest | 25,645,283 | 22,055,714 |
Total members' equity | 109,643,955 | 105,740,243 |
Total Liabilities and Members’ Equity | $ 127,089,530 | $ 121,470,922 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Oct. 31, 2017 | Oct. 31, 2016 |
Consolidated Balance Sheets | ||
Common Units Authorized | 30,606 | 30,606 |
Common Units Issued | 30,606 | 30,606 |
Common Units Outstanding | 30,606 | 30,606 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Consolidated Statements of Operations | |||
Revenues | $ 215,782,391 | $ 215,526,226 | $ 231,254,508 |
Cost of Goods Sold | 194,682,913 | 198,627,132 | 208,654,190 |
Gross Profit | 21,099,478 | 16,899,094 | 22,600,318 |
Operating Expenses | 6,167,883 | 5,325,569 | 5,175,915 |
Operating Income | 14,931,595 | 11,573,525 | 17,424,403 |
Other Income (Expense): | |||
Other income, net | 457,275 | 99,735 | 38,169 |
Interest income | 56,384 | 8,400 | 9,369 |
Interest expense | (323,708) | (453,398) | (525,108) |
Total other income (expense), net | 189,951 | (345,263) | (477,570) |
Net Income | 15,121,546 | 11,228,262 | 16,946,833 |
Less: Net Income Attributable to Non-controlling Interest | (3,636,213) | (2,505,454) | (3,360,083) |
Net Income Attributable to Granite Falls Energy, LLC | $ 11,485,333 | $ 8,722,808 | $ 13,586,750 |
Weighted Average Units Outstanding - Basic and Diluted (in units) | 30,606 | 30,606 | 30,606 |
Net Income Per Unit - Basic and Diluted (in dollars per unit) | $ 375.26 | $ 285 | $ 443.92 |
Distributions Per Unit (in dollars per unit) | $ 365 | $ 315 | $ 1,050 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Members’ Equity - USD ($) | Members' Equity Attributable to Granite Falls Energy, LLC | Non-controlling Interest | Total |
Balance - at Oct. 31, 2014 | $ 103,152,157 | $ 22,818,076 | $ 125,970,233 |
Changes in Members' Equity | |||
Distribution | (32,136,300) | (4,621,340) | (36,757,640) |
Net income attributable to non-controlling interest | 3,360,083 | 3,360,083 | |
Net income attributable to Granite Falls Energy, LLC | 13,586,750 | 13,586,750 | |
Balance - at Oct. 31, 2015 | 84,602,607 | 21,556,819 | 106,159,426 |
Changes in Members' Equity | |||
Distribution | (9,640,886) | (2,006,559) | (11,647,445) |
Net income attributable to non-controlling interest | 2,505,454 | 2,505,454 | |
Net income attributable to Granite Falls Energy, LLC | 8,722,808 | 8,722,808 | |
Balance - at Oct. 31, 2016 | 83,684,529 | 22,055,714 | 105,740,243 |
Changes in Members' Equity | |||
Distribution | (11,171,190) | (11,171,190) | |
Purchase of subsidiary units attributable to non-controlling interest | (46,644) | (46,644) | |
Net income attributable to non-controlling interest | 3,636,213 | 3,636,213 | |
Net income attributable to Granite Falls Energy, LLC | 11,485,333 | 11,485,333 | |
Balance - at Oct. 31, 2017 | $ 83,998,672 | $ 25,645,283 | $ 109,643,955 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Cash Flows from Operating Activities: | |||
Net income | $ 15,121,546 | $ 11,228,262 | $ 16,946,833 |
Adjustments to reconcile net income to net cash provided by operations: | |||
Depreciation and amortization | 9,357,674 | 9,681,148 | 9,650,226 |
Change in fair value of commodity derivative instruments | (699,536) | (581,400) | (303,925) |
Gain on sale of assets | (88,340) | ||
Changes in operating assets and liabilities: | |||
Restricted cash | (75,189) | 492,099 | |
Commodity derivative instruments | 1,724,547 | 28,509 | 923,628 |
Accounts receivable | (967,607) | 3,012,478 | (385,771) |
Inventory | 3,100,321 | (6,129,388) | (1,486,881) |
Prepaid expenses and other current assets | (35,351) | (66,127) | 138,611 |
Accounts payable | (3,662,718) | 5,276,025 | (1,017,508) |
Accrued expenses | (25,276) | 342,769 | 4,556 |
Net Cash Provided by Operating Activities | 23,750,071 | 22,792,276 | 24,961,868 |
Cash Flows from Investing Activities: | |||
Payment for investment | (7,500,000) | ||
Payments for capital expenditures | (2,318,948) | (4,727,305) | (8,824,669) |
Net Cash Used in Investing Activities | (9,818,948) | (4,727,305) | (8,824,669) |
Cash Flows from Financing Activities: | |||
Proceeds from long-term debt | 7,500,000 | 9,820,222 | 13,440,989 |
Payments on long-term debt | (486,041) | (15,166,428) | (9,169,704) |
Checks drawn in excess of bank balance | (1,866,683) | 30,001 | 1,836,682 |
Purchase of subsidiary units attributable to non-controlling interest | (46,644) | ||
Distributions to non-controlling interests | (2,006,559) | (4,621,340) | |
Member distributions paid | (11,171,190) | (9,640,886) | (32,136,300) |
Net Cash Used in Financing Activities | (6,070,558) | (16,963,650) | (30,649,673) |
Net Increase (Decrease) in Cash | 7,860,565 | 1,101,321 | (14,512,474) |
Cash - Beginning of Period | 13,797,857 | 12,696,536 | 27,209,010 |
Cash - End of Period | 21,658,422 | 13,797,857 | 12,696,536 |
Cash paid during the period for: | |||
Interest expense | 323,708 | $ 453,398 | 525,108 |
Supplemental Disclosure of Noncash Investing and Financing Activities | |||
Purchase of equipment with trade-in value | 146,845 | ||
Capital expenditures and construction in process included in accounts payable | $ 215,235 | $ 422,451 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Oct. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICAN Nature of Business Granite Falls Energy, LLC (“GFE”) is a Minnesota limited liability company currently producing fuel-grade ethanol, distillers’ grains, and crude corn oil near Granite Falls, Minnesota and sells these products, pursuant to marketing agreements, throughout the continental U.S. and on the international market. GFE’s plant has an approximate annual production capacity of 60 million gallons, but is currently permitted to produce up to 70 million gallons of undenatured ethanol on a twelve month rolling sum basis. Additionally, GFE owns a majority interest in Heron Lake BioEnergy, LLC (“HLBE”). HLBE is a Minnesota limited liability company currently producing fuel-grade ethanol, distillers’ grains, and crude corn oil near Heron Lake, Minnesota and sells these products, pursuant to marketing agreements, throughout the continental U.S. HLBE’s plant has an approximate annual production capacity of 60 million gallons, but is currently permitted to produce up to 72.3 million gallons per year of undenatured ethanol on a twelve month rolling sum basis. Additionally, HLBE, through a majority owned subsidiary, operates a natural gas pipeline that provides natural gas to the HLBE’s ethanol production facility and other customers. Principles of Consolidation The accompanying consolidated financial statements consolidate the operating results and financial position of GFE, and its approximately 50.7% owned subsidiary, HLBE (through GFE’s 100% ownership of Project Viking, L.L.C.). Given GFE’s control over the operations of HLBE and its majority voting interest, GFE consolidates the financial statements of HLBE with its consolidated financial statements. The remaining approximately 49.3% ownership of HLBE is included in the consolidated financial statements as a non-controlling interest. HLBE, through its wholly owned subsidiary, HLBE Pipeline Company, LLC, owns 73.0% of Agrinatural Gas, LLC (“Agrinatural”). Given HLBE’s control over the operations of Agrinatural and its majority voting interest, HLBE consolidates the financial statements of Agrinatural with its consolidated financial statements, with the remaining approximately 27.0% ownership of HLBE attributed to the non-controlling interest. All intercompany balances and transactions are eliminated in consolidation. All references to “we”, “us”, “our”, and the “Company” collectively refer to GFE and its wholly owned and majority owned subsidiaries. Fiscal Reporting Period The Company’s fiscal year end for reporting financial operations is October 31 for financial reporting purposes. Accounting Estimates Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with generally accepted accounting principles in the U.S. of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The Company uses estimates and assumptions in accounting for the following significant matters, among others: economic lives of property and equipment, valuation of commodity derivatives, inventory, and inventory purchase and sale commitments, evaluation of rail car damages contingency, and the assumptions used in the impairment analysis of long-lived assets, which includes goodwill. Actual results may differ from previously estimated amounts, and such differences may be material to our consolidated financial statements. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made. Revenue Recognition The Company generally sells ethanol and related products pursuant to marketing agreements. Revenues from the production of ethanol and the related products are recorded when the customer has taken title and assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. Ethanol and related products are generally shipped free on board (FOB) shipping point. In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, marketing fees and commissions due to the marketers are deducted from the gross sales price as earned. These fees and commissions are recorded net of revenues, as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. Shipping costs paid by the Company to the marketer in the sale of ethanol are not specifically identifiable and, as a result, are recorded based on the net selling price reported to the Company from the marketer. Shipping costs incurred by the Company in the sale of distillers’ grains and corn oil are included in cost of goods sold. Agrinatural recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee for the arrangement is fixed or determinable and collectability is reasonably assured. Cost of Goods Sold The primary components of cost of goods sold for the production of ethanol and related co-products are corn, energy, raw materials, overhead, depreciation, and direct labor. Operating Expenses The primary components of operating expenses are salaries and expenses for administrative employees, professional fees, board of governor expenses and property taxes Cash The Company maintains its accounts at multiple financial institutions, of which one is a member of the Company. At times throughout the year, the Company’s cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. The Company does not believe it is exposed to any significant credit risk on its cash balances. Restricted Cash The Company is periodically required to maintain at its broker cash balances related to open commodity derivative instrument positions as discussed in Note 6. Accounts Receivable Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral. Accounts receivable are recorded at their estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company’s credit terms. Accounts considered uncollectible are written off. The Company follows a policy of providing an allowance for doubtful accounts; however, based on historical experience, and its evaluation of the current status of receivables, the Company is of the belief that such accounts will be collectible in all material respects and thus an allowance was not necessary at October 31, 2017 or 2016. It is at least possible this estimate will change in the future. Inventory Inventory is stated at the lower of cost or net realizable value. Cost for all inventories is determined using the first in first out method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventory consists of raw materials, work in process, finished goods, and supplies. Corn is the primary raw material along with other raw materials. Finished goods consist of ethanol, distillers’ grains, and corn oil. Derivative Instruments From time to time, the Company enters into derivative transactions to hedge its exposures to commodity price fluctuations. The Company is required to record these derivatives in the balance sheets at fair value. In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in earnings. Additionally, the Company is required to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or normal sales are documented as normal and exempted from accounting and reporting requirements, and therefore, are not marked to market in our consolidated financial statements. In order to reduce the risks caused by market fluctuations, the Company occasionally hedges its anticipated corn, natural gas, and denaturant purchases and ethanol sales by entering into options and futures contracts. These contracts are used with the intention to fix the purchase price of anticipated requirements for corn in the Company’s ethanol production activities and the related sales price of ethanol. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter market conditions. Although the Company believes its commodity derivative positions are economic hedges, none have been formally designated as a hedge for accounting purposes and derivative positions are recorded on the balance sheet at their fair market value, with changes in fair value recognized in current period earnings or losses. The Company does not enter into financial instruments for trading or speculative purposes. The Company has adopted authoritative guidance related to “Derivatives and Hedging,” and has included the required enhanced quantitative and qualitative disclosure about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses from derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. See further discussion in Note 6. Other Intangibles Other intangibles included as a component of other assets on the consolidated balance sheet are stated at cost and include road improvements located near the HLBE plant in which the Company has a beneficial interest in but does not own the road. The Company amortizes the assets over the economic useful life of 15 years. The Company recorded amortization expense in the amount of approximately $38,000 during each of the fiscal years ended October 31, 2017, 2016, and 2015. Property and Equipment Property and equipment are stated at cost. Depreciation is provided over the following estimated useful lives by use of the straight-line method. Asset Description Years Land improvements 5-20 years Railroad improvements 5-20 years Process equipment and tanks 5-40 years Administration building 10-40 years Office equipment 3-10 years Rolling stock 5-10 years Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Construction in progress expenditures will be depreciated using the straight-line method over their estimated useful lives once the assets are placed into service. Long-Lived Assets Long-lived assets, such as property and equipment, and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When determining impairment losses, a long-lived asset should be grouped with other assets or liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets or liabilities. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. No indicators of impairment existed during fiscal 2017, 2016, or 2015 that would have triggered impairment testing, and therefore, no impairment expense was recorded during fiscal 2017, 2016, or 2015. Investment On November 1, 2016, GFE subscribed to purchase 1,500 capital units of Ringneck Energy & Feed, LLC (“Ringneck”) at a price of $5,000 per unit for a total of $7,500,000. GFE paid a down payment of $750,000 in connection with the subscription, and signed a promissory note for $6,750,000 for the remaining balance of the subscription. By letter dated July 12, 2017, GFE was notified of Ringneck’s acceptance of GFE’s subscription and that payment of the balance of GFE’s subscription due under the promissory note was due not later than August 2, 2017. On August 2, 2017, GFE paid $6,750,000 to Ringneck, the remaining balance of GFE’s subscription. Ringneck is a South Dakota limited liability company that is currently constructing an 80 million gallon per year ethanol manufacturing plant in outside of Onida, South Dakota in Sully County. GFE’s investment is sufficient to secure the Company the right to appoint one director to the board of directors of Ringneck and GFE has appointed Steve Christensen, its CEO to serve as its appointed director. The investment will be accounted for by the equity method, under which the Company’s share of the net income of the investee is recognized as income in the Company’s Consolidated Statement of Operations and added to the investment account. Any distributions received from the affiliates are treated as a reduction of the investment. Fair Value of Financial Instruments The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adhere to the Financial Accounting Standards Board (“FASB”) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The Company has adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: · Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. · Level 2 inputs include: 1. Quoted prices in active markets for similar assets or liabilities. 2. Quoted prices in markets that are observable for the asset or liability either directly or indirectly, for substantially the full term of the asset or liability. 3. Inputs that derived primarily from or corroborated by observable market date by correlation or other means. · Level 3 inputs are unobservable inputs for the asset or liability. The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Except for those assets and liabilities which are required by authoritative accounting guidance to be recorded at fair value in our balance sheets, the Company has elected not to record any other assets or liabilities at fair value. No events occurred during the fiscal years ended October 31, 2017, 2016, or 2015 that required adjustment to the recognized balances of assets or liabilities, which are recorded at fair value on a nonrecurring basis. The carrying value of cash, accounts receivable, accounts payable and accrued liabilities approximates fair value due to the short maturity of these instruments. The Company obtains fair value measurements from an independent pricing service for corn derivative contracts. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the Chicago Board of Trade and New York Mercantile Exchange markets. The fair value of the long-term debt is estimated based on anticipated interest rates which management believes would currently be available to the Company for similar issues of debt, taking into account the current credit risk of the Company and other market factors. The Company believes the carrying value of the debt instruments approximate fair value. Income Taxes The Company is treated as a partnership for federal and state income tax purposes, and generally does not incur income taxes. Instead its earnings and losses are included in the income tax returns of its members. Therefore, no provision or liability for federal or state income taxes has been included in these financial statements. Differences between financial statement basis of assets and tax basis of assets is related to capitalization and amortization of organization and start-up costs for tax purposes, whereas these costs are expensed for financial statement purposes. In addition, the Company uses the alternative depreciation system for tax depreciation instead of the straight-line method that is used for book depreciation, which also causes temporary differences. The Company’s tax year end is December 31. The Company had no significant uncertain tax positions as of October 31, 2017 or 2016 that would require disclosure, primarily due to the partnership tax status. The Company recognizes and measures tax benefits when realization of the benefits is uncertain under a two-step approach. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a partnership, the adoption of this guidance had no material impact on the Company’s financial condition or results of operations. The Company files income tax returns in the U.S. federal and Minnesota state jurisdictions. For years before 2014, the Company is no longer subject to U.S. Federal or state income tax examinations. Net Income per Unit Basic net income per unit is computed by dividing net income by the weighted average number of members’ units outstanding during the period. Diluted net income per unit is computed by dividing net income by the weighted average number of members’ units and members’ unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, for all periods presented, the calculations of the Company’s basic and diluted net income per unit are the same. Environmental Liabilities The Company’s operations are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its location. Accordingly, the Company has adopted policies, practices, and procedures in the areas of pollution control, occupational health, and the production, handling, storage, and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability, which could result from such events. Environmental liabilities are recorded when the liability is probable and the costs can be reasonably estimated. No expense has been recorded for the fiscal years ended October 31, 2017, 2016, or 2015. Goodwill Goodwill represents the cost in excess of the fair value of net assets acquired. The Company conducts impairment assessments annually or when events indicate a triggering event has occurred. No indicators of impairment existed during fiscal 2017, 2016, or 2015 that would have triggered impairment testing, and therefore, no impairment expense was recorded during 2017, 2016, or 2015. Reportable Operating Segments Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Therefore, in applying the criteria set forth in ASC 280, the Company determined that based on the nature of the products and production process and the expected financial results, the Company’s operations at GFE’s ethanol plant and HLBE’s plant, including the production and sale of ethanol and its co-products, are aggregated into one reporting segment. Additionally, the Company also realizes relatively immaterial revenue from natural gas pipeline operations at Agrinatural, HLBE’s majority owned subsidiary. Before and after accounting for intercompany eliminations, these revenues from Agrinatural’s represent less than less than 1% of our consolidated revenues and have little to no impact on the overall performance of the Company. Therefore, the Company does not separately review Agrinatural’s revenues, cost of sales or other operating performance information. Rather, the Company reviews Agrinatural’s natural gas pipeline financial data on a consolidated basis with the Company’s ethanol production operating segment. The Company believes that the presentation of separate operating performance information for Agrinatural’s natural gas pipeline operations would not provide meaningful information to a reader of the Company’s consolidated financial statements and would not achieve the basic principles and objectives of ASC 280. Recently Issued Accounting Pronouncements Contract Revenue Recognition (Evaluating) In May 2014 and amended in August 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09 which amended the Revenue from Contracts with Customers (Topic 606) of the ASC. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company beginning November 1, 2018. The Company is currently evaluating the guidance and its effect on its consolidated financial statements. Leases (Evaluating) In February 2016, the FASB adopted ASU No. 2016-02, Leases (Topic 842), which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets, initially measured at the present value of the lease payments. The accounting guidance for lessors is largely unchanged. The guidance will be effective for the Company beginning November 1, 2019. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. Restricted Cash (Evaluating) In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash , which amended Statement of Cash Flows (Topic 230) of the ASC. The new guidance will require amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows. The amendments will be effective for the Company beginning November 1, 2018. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements . |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 12 Months Ended |
Oct. 31, 2017 | |
RISKS AND UNCERTAINTIES | |
RISKS AND UNCERTAINTIES | 2. RISKS AND UNCERTAINTIES The Company has certain risks and uncertainties that it experiences during volatile market conditions. These volatilities can have a severe impact on operations. The Company’s revenues are derived primarily from the sale and distribution of ethanol, distillers’ grains and corn oil to customers primarily located in the U.S. Corn for the production process is supplied to our plants primarily from local agricultural producers and from purchases on the open market. Ethanol sales typically average 75-90% of total revenues and corn costs typically average 65-85% of cost of goods sold. The Company’s operating and financial performance is largely driven by the prices at which it sells ethanol and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, the weather, government policies and programs, unleaded gasoline prices and the petroleum markets as a whole. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, the weather, government policies and programs, and a risk management program used to protect against the price volatility of these commodities. Market fluctuations in the price of and demand for these products may have a significant adverse effect on the Company’s operations, profitability and the availability and adequacy of cash flow to meet the Company’s working capital requirements. The supply and demand for ethanol are impacted by federal and state legislation and regulation, most significantly the Renewable Fuels Standard (“RFS”), and any changes in legislation or regulation could cause the demand for ethanol to decline or its supply to increase, which could have a material adverse effect on our business, results of operations and financial condition, and the ability to operate at a profit. On November 30, 2017, the EPA announced the final 2018 renewable volume requirements (“RVOs”) for conventional ethanol at 15.0 billion gallons, with the RVOs for advanced biofuels set at 4.29 billion gallons and cellulosic ethanol at 0.29 billon gallons, reducing overall RVOs to 19.29 billion gallons for 2018. Although this final rule achieves the statutory RVO for conventional corn-based ethanol originally set by Congress when the RFS was enacted, it reduces the overall RVOs below the overall statutory level of 26 billion gallons. According to the RFS, if mandatory renewable fuel volumes are reduced by at least 20% for two consecutive years, the EPA is required to modify, or reset, statutory volumes through 2022. Since 2018 is the first year the total proposed RVOs were more than 20% below statutory levels, in September 2017, the EPA Administrator directed his staff to initiate the required technical analysis to perform any future reset consistent with the reset rules. If 2019 RVOs are also more than 20% below statutory levels, the RVO reset will be triggered under RFS and the EPA will be required to modify statutory volumes through 2022 within one year of the trigger event, based on the same factors used to set the RVOs post-2022. If the statutory RVOs are reduced as a result of reset, it could have an adverse effect on the market price and demand for ethanol which would negatively impact our financial performance. Additionally, opponents of ethanol such as large oil companies will likely continue their efforts to repeal or reduce the RFS through lawsuits or lobbying of Congress. Successful reduction or repeal of the blending requirements of the RFS could result in a significant decrease in ethanol demand. Current ethanol production capacity is approximately 16.0 billion gallons according to the RFA and may increase during calendar year 2018 as several plants’ expansion projects come online. Although the release of the final 2018 RVOs maintaining the 15 billion gallon RVO for conventional corn-based ethanol together a letter issued by EPA Administrator Pruitt in October 2017 signals support from the EPA and the Trump administration for domestic ethanol production, the EPA and Trump administration could still elect to materially modify, repeal or otherwise invalidate the RFS. It is unclear what regulatory framework and renewable volume requirements, if any, will emerge as a result of such reforms; however, any such reform could adversely affect the demand and price for ethanol and the Company's profitability . |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Oct. 31, 2017 | |
FAIR VALUE | |
FAIR VALUE | 3. FAIR VALUE The following table provides information on those derivative assets and liabilities measured at fair value on a recurring basis at October 31, 2017: Fair Value Measurement Using Quoted Prices Significant Other Significant Carrying Amount in in Active Markets Observable Inputs Unobservable Inputs Financial Asset: Consolidated Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative Instruments - Corn $ 244,294 $ 244,294 $ 244,294 $ — $ — Financial Liabilities: Commodity Derivative Instruments - Ethanol $ 24,998 $ 24,998 $ 36,500 $ (11,502) $ — Commodity Derivative Instruments - Natural Gas $ 15,381 $ 15,381 $ — $ 15,381 $ — The following table provides information on those derivative assets measured at fair value on a recurring basis at October 31, 2016: Fair Value Measurement Using Quoted Prices Significant Other Significant Carrying Amount in in Active Markets Observable Inputs Unobservable Inputs Financial Asset: Consolidated Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative Instruments - Corn $ 451,575 $ 451,575 $ 451,575 $ — $ — Commodity Derivative Instruments - Ethanol $ 777,351 $ 777,351 $ 777,351 $ — $ — The Company determines the fair value of commodity derivative instruments by obtaining fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the Chicago Board of Trade market and New York Mercantile Exchange. We determine the fair value of ethanol and natural gas Level 2 instruments by model-based techniques in which all significant inputs are observable in the markets noted above. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Oct. 31, 2017 | |
CONCENTRATIONS | |
CONCENTRATIONS | 4. CONCENTRATIONS Granite Falls Energy GFE sold all of the ethanol, distillers’ grains, and corn oil produced at its plant to two customers under marketing agreements during the fiscal years ended October 31, 2017, 2016, and 2015. The percentage of GFE’s total revenues attributable to each of its two major customers for the fiscal years ended October 31, 2017, 2016, and 2015 were as follows: October 31, 2017 October 31, 2016 October 31, 2015 Eco-Energy, Inc. - Ethanol RPMG, Inc. - Distillers' Grains & Corn Oil The percentage of GFE’s total accounts receivable attributable to each of its two major customers at October 31, 2017 and 2016 were as follows: October 31, 2017 October 31, 2016 Eco-Energy, Inc. - Ethanol RPMG, Inc. - Distillers' Grains & Corn Oil Heron Lake BioEnergy HLBE sold all of the ethanol, distillers’ grains, and corn oil produced at its plant to three customers under marketing agreements during the fiscal years ended October 31, 2017, 2016, and 2015. The percentage of HLBE’s total revenues attributable to each of HLBE’s three major customers for the fiscal years ended October 31, 2017, 2016, and 2015 were as follows: October 31, 2017 October 31, 2016 October 31, 2015 Eco-Energy, Inc. - Ethanol Gavilon Ingredients, LLC - Distillers' Grains RPMG, Inc. - Corn Oil The percentage of HLBE’s total accounts receivable attributable to each of HLBE’s three major customers at October 31, 2017 and 2016 were as follows: October 31, 2017 October 31, 2016 Eco-Energy, Inc. - Ethanol Gavilon Ingredients, LLC - Distillers' Grains RPMG, Inc. - Corn Oil |
INVENTORY
INVENTORY | 12 Months Ended |
Oct. 31, 2017 | |
INVENTORY | |
INVENTORY | 5. INVENTORY Inventory consists of the following at October 31: 2017 2016 Raw materials $ 4,488,923 $ 9,098,492 Supplies 2,929,385 2,755,958 Work in process 1,281,292 1,347,754 Finished goods 6,541,492 5,139,209 Totals $ 15,241,092 $ 18,341,413 The Company performs a lower of cost or net realizable value analysis on inventory to determine if the market values of certain inventories are less than their carrying value, which is attributable primarily to decreases in market prices of corn and ethanol. Based on the lower of cost or net realizable value analysis, the Company recorded a loss on ethanol inventories, as a component of cost of goods sold, of approximately $128,000 and $0 for the fiscal years ended October 31, 2017 and 2016, respectively |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Oct. 31, 2017 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | 6. DERIVATIVE INSTRUMENTS The Company enters into corn, ethanol, and natural gas derivatives in order to protect cash flows from fluctuations caused by volatility in commodity prices for periods up to 24 months. These derivatives are put in place to protect gross profit margins from potentially adverse effects of market and price volatility on ethanol sales and corn purchase commitments where the prices are set at a future date. Although these derivative instruments serve the Company’s purpose as an economic hedge, they are not designated as effective hedges for accounting purposes. For derivative instruments that are not accounted for as hedges, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through earnings in the period of change As of October 31, 2017, the total notional amount of GFE’s outstanding corn derivative instruments was approximately 1,495,000 bushels, comprised of long corn positions on 200,000 bushels that were entered into to hedge forecasted ethanol sales through December 2017, and short corn positions on 1,295,000 bushels that were entered into to hedge forecasted corn purchases through December 2018. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding. As of October 31, 2017, the total notional amount of GFE’s outstanding ethanol derivative instruments was approximately 420,000 gallons that were entered into to hedge forecasted ethanol sales through November 2017. As of October 31, 2017, GFE had approximately $75,000 cash collateral (restricted cash) and approximately $12,000 due to broker related to derivatives held by a broker. As of October 31, 2017, the total notional amount of HLBE’s outstanding corn derivative instruments was approximately 1,120,000 bushels, comprised of long corn positions on 215,000 bushels that were entered into to hedge forecasted ethanol sales through December 2017, and short corn positions on 905,000 bushels that were entered into to hedge forecasted corn purchases through July 2018. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding. As of October 31, 2017, HLBE had outstanding natural gas derivative instruments totaling 120,000 MMBTU entered into hedge forecasted natural gas purchases through February 2018. As of October 31, 2017, the total notional amount of HLBE’s outstanding ethanol derivative instruments was approximately 420,000 gallons that were entered into to hedge forecasted ethanol sales through November 2017 As of October 31, 2017, HLBE did not have any cash collateral (restricted cash) and approximately $12,000 due to broker related to derivatives held by a broker. The following tables provide details regarding the Company’s derivative instruments at October 31, 2017, none of which were designated as hedging instruments: Consolidated Balance Sheet location Assets Liabilities Corn contracts - GFE Commodity derivative instruments $ 102,650 $ — Corn contracts - HLBE Commodity derivative instruments 141,644 — Ethanol contracts - GFE Commodity derivative instruments — 12,749 Ethanol contracts - HLBE Commodity derivative instruments — 12,249 Natural gas contracts - HLBE Commodity derivative instruments — 15,381 Totals $ 244,294 $ 40,379 As of October 31, 2016, the total notional amount of GFE’s outstanding corn derivative instruments was approximately 5,220,000 bushels, comprised of long corn positions on 3,300,000 bushels that were entered into to hedge forecasted ethanol sales through March 2017, and short corn positions on 1,920,000 bushels that were entered into to hedge forecasted corn purchases through December 2016. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding. As of October 31, 2016, GFE did not have any cash collateral (restricted cash) related to derivatives held by a broker. As of October 31, 2016, the total notional amount of HLBE’s outstanding corn derivative instruments was approximately 4,285,000 bushels, comprised of long corn positions on 3,100,000 bushels that were entered into to hedge forecasted ethanol sales through March 2017, and short corn positions on 1,185,000 bushels that were entered into to hedge forecasted corn purchases through August 2017. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding. As of October 31, 2016, HLBE did not have any cash collateral (restricted cash) related to derivatives held by a broker. The following tables provide details regarding the Company’s derivative instruments at October 31, 2016, none of which were designated as hedging instruments: Consolidated Balance Sheet location Assets Liabilities Corn contracts - GFE Commodity derivative instruments $ 63,050 $ — Corn contracts - HLBE Commodity derivative instruments 388,525 — Ethanol Contracts - GFE Commodity derivative instruments 503,538 — Ethanol Contracts - HLBE Commodity derivative instruments 273,813 — Totals $ 1,228,926 $ — The following tables provide details regarding the gains (losses) from Company’s derivative instruments in statements of operations, none of which are designated as hedging instruments: Consolidated Statement Year Ended October 31, of Operations Location 2017 2016 2015 Corn contracts Cost of Goods Sold $ 1,129,746 $ 708,364 $ 303,925 Ethanol contracts Revenues (414,829) (159,322) — Natural gas contracts Cost of Goods Sold (15,381) 32,358 — Total gain, net $ 699,536 $ 581,400 $ 303,925 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Oct. 31, 2017 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | 7. PROPERTY AND EQUIPMENT A summary of property and equipment is as follows: October 31, 2017 October 31, 2016 Land and improvements $ 13,697,790 $ 13,697,790 Railroad improvements 9,045,112 9,045,112 Process equipment and tanks 129,640,626 128,004,694 Administration building 569,328 569,328 Office equipment 989,690 907,652 Rolling stock 1,904,154 1,792,534 Construction in progress 777,655 315,631 156,624,355 154,332,741 Less: accumulated depreciation (84,353,342) (75,364,725) Net property and equipment $ 72,271,013 $ 78,968,016 Depreciation expense totaled approximately $9,320,000, $9,641,000, and $9,612,000 for the fiscal years ended October 31, 2017, 2016, and 2015, respectively. |
DEBT FACILITIES
DEBT FACILITIES | 12 Months Ended |
Oct. 31, 2017 | |
DEBT FACILITIES | |
DEBT FACILITIES | 8. DEBT FACILITIES Granite Falls Energy GFE has a credit facility with a lender. This credit facility was originally a revolving term loan facility with an aggregate principal commitment amount of $18,000,000 that reduced by $2,000,000 semi-annually beginning September 1, 2014, until final payment at maturity on March 1, 2018. On September 8, 2017, the revolving term loan was converted to a seasonal revolving loan in the amount of $6,000,000. GFE had no outstanding balance on the revolving term loan at the time of conversion. There was no outstanding balance on the seasonal revolving loan at October 31, 2017. Therefore, the aggregate principal amount available for borrowing by GFE under this seaonal revolving loan at October 31, 2017 was $6,000,000. The interest rate on the seasonal revolving loan is based on the bank’s One Month London Interbank Offered Rate (“LIBOR”) Index Rate, plus 2.75%, which was 3.99% at October 31, 2017. The credit facility requires GFE to comply with certain financial covenants at various times calculated monthly, quarterly or annually, including restriction of the payment of dividends and maintenance of certain financial ratios including minimum working capital, minimum net worth and a debt service coverage ratio as defined by the credit facility. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of the outstanding principal balances on the revolving term loan and/or the imposition of fees, charges or penalties. The credit facility is secured by substantially all assets of GFE. There are no savings account balance collateral requirements as part of this credit facility. On August 2, 2017, GFE entered into a replacement credit facility with Project Hawkeye. The terms of the replacement credit facility allow GFE to borrow up to $7.5 million of variable-rate, amortizing non-recourse debt from Project Hawkeye using the Ringneck investment as collateral . The Project Hawkeye loan bears interest from date funds are first advanced on the loan through maturity, at a rate per annum equal to the sum of the One Month LIBOR Index Rate plus 3.05% per annum, with an interest rate floor of 3.55% which equated to 4.29% at October 31, 2017. The Project Hawkeye loan requires annual interest payments only for the first two years of the loan and monthly principal and interest payments for years three through nine based on a seven-year amortization period. The monthly amortized payments will be re-amortized following any change in interest rate. The entire outstanding principal balance of the loan, plus any accrued and unpaid interest thereon, is due and payable in full on August 2, 2026. GFE is permitted to voluntarily prepay all or any portion of the outstanding balance of this loan at any time without premium or penalty. Pursuant to a pledge agreement entered into in connection with the Project Hawkeye loan , GFE’s obligations are secured by all of its right, title, and interest in its investment in Ringneck, including the 1,500 units subscribed for by GFE. The loan is non-recourse to all of GFE’s other assets, meaning that in the event of default, the only remedy available to Project Hawkeye will be to foreclose and seize all of GFE’s right, title and interest in its investment in Ringneck. As of October 31, 2017, GFE has borrowed $7.5 million under the Project Hawkeye credit facility to finance the balance of its investment in Ringneck. Heron Lake BioEnergy HLBE has a revolving term loan with a lender under which it could borrow, repay, and re-borrow in an amount up to $28,000,000 at any time prior to the March 1, 2022 maturity. However, the available for borrowing under the revolving term note reduces by $3,500,000 annually, starting March 1, 2015 and continuing each anniversary thereafter until maturity. The aggregate principal commitment of this facility at October 31, 2017 was $17,500,000. HLBE had no outstanding balance on the revolving term loan at October 31, 2017 and 2016. Therefore, at October 31, 2017 and 2016, the aggregate principal amount available to the Company for borrowing was $17,500,000 and $21,000,000, respectively. Interest on the revolving term loan accrues at a variable rate equal to 3.25% above the LIBOR Index rate. HLBE may elect to enter into a fixed interest rate on this loan at various times throughout the term of the loan as provided in the loan agreements. The interest rate on the revolving term loan was 4.49% and 3.45% at October 31, 2017, and October 31, 2016, respectively. HLBE also agreed to pay an unused commitment fee on the unused portion of the revolving term loan commitment at the rate of 0.50% per annum. The loan is secured by substantially all of the Company assets including a subsidiary guarantee. The credit facility contains customary covenants, including restrictions on the payment of dividends and loans and advances to Agrinatural, and maintenance of certain financial ratios including minimum working capital, minimum net worth and a debt service coverage ratio as defined by the credit facility. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of the outstanding principal balances on the revolving term loan and/or the imposition of fees, charges or penalties. Long-term debt consists of the following: October 31, 2017 October 31, 2016 GRANITE FALLS ENERGY: Revolving term loan, see terms above. $ — $ — Seasonal loan, see terms above. — — Term note payable to Project Hawkeye, see terms above. 7,500,000 — HERON LAKE BIOENERGY: Revolving term loan to lending institution, see terms above. — — Assessment payable as part of water treatment agreement, due in semi-annual installments of $189,393 with interest at 6.55%, enforceable by statutory lien, with the final payment due in 2021. HLBE made deposits for one years' worth of debt service payments of approximately $364,000, which is included with other assets that are held on deposit to be applied with the final payments of the assessment. 1,241,171 1,517,046 Assessment payable as part of water supply agreement, due in monthly installments of $3,942 with interest at 8.73%, enforceable by statutory lien, with the final payment due in 2019. 56,514 97,930 Note payable to electrical company with monthly payments of $6,250 with interest at 0.00% and a 1.00% maintenance fee due each October. This note was paid in full in September 2017. The electrical company is a member of HLBE. — 68,750 Note payable to non-controlling interest member of Agrinatural. Interest is at One Month LIBOR plus 4.0%, which was approximately 5.24% and 4.53% at October 31, 2017 and 2016, respectively. The note is considered due on demand with payments due at Agrinatural's Board of Managers' discretion. 100,000 200,000 Totals 8,897,685 1,883,726 Less: amounts due within one year 432,183 490,057 Net long-term debt $ 8,465,502 $ 1,393,669 Based on the most recent debt agreements, estimated maturities of long-term debt at October 31, 2017 are as follows: 2018 $ 432,183 2019 408,169 2020 1,398,227 2021 1,391,250 2022 1,071,429 Thereafter 4,196,427 Total debt $ 8,897,685 |
MEMBERS_ EQUITY
MEMBERS’ EQUITY | 12 Months Ended |
Oct. 31, 2017 | |
MEMBERS’ EQUITY | |
MEMBERS’ EQUITY | 9. MEMBERS’ EQUITY Granite Falls Energy GFE has one class of membership units. The units have no par value and have identical rights, obligations and privileges. Income and losses are allocated to all members based upon their respective percentage of units held. As of October 31, 2017, 2016, and 2015, GFE had 30,606 membership units authorized, issued, and outstanding, respectively. Subsequent to fiscal year end, in December 2017, GFE’s Board of Governors declared a cash distribution of $385 per unit or approximately $11,783,000 for GFE unit holders of record as of December 21, 2017 was paid by GFE in January 2018. In December 2016, GFE’s Board of Governors declared a cash distribution of $365 per unit or approximately $11,171,000 for GFE unit holders of record as of December 21, 2016 to be paid by GFE on January 26, 2017. In December 2015, GFE’s Board of Governors declared a cash distribution of $315 per unit or approximately $9,641,000 for GFE unit holders of record as of December 17, 2015 was paid by GFE on January 25, 2016. In December 2014, GFE’s Board of Governors declared a cash distribution of $1,050 per unit or approximately $32,136,000 for GFE unit holders of record as of December 18, 2014. This distribution was paid by GFE on January 19, 2015. Heron Lake BioEnergy Subsequent to year end, on December 21, 2017, HLBE’s board of governors declared a distribution of $0.11 per membership unit for a total of approximately $8,573,000 to be paid to members of record as of December 21, 2017. The distribution was paid in January 2018. Based on the covenants contained in HLBE’s lender’s credit facilities, the foregoing distribution was approved by its lender prior to distribution. On December 17, 2015, HLBE’s board of governors declared a distribution of $0.05 per membership unit for a total of approximately $3,897,000 to be paid to HLBE unit holders of record as of December 18, 2015. The distribution was paid on January 25, 2016. At December 17, 2015, GFE owned 39,420,949 Class A membership units and 15,000,000 Class B units of HLBE, and received an aggregate distribution from HLBE of $1,971,000. The remaining $1,926,000 was distributed by HLBE to the non-controlling interest. On December 18, 2014, HLBE’s board of governors declared a distribution of $0.12 per membership unit for a total of approximately $9,352,000 to be paid to HLBE unit holders of record as of December 18, 2014. The distribution was paid by HLBE on January 19, 2015. At December 18, 2014, GFE owned 39,420,949 Class A membership units and 15,000,000 Class B units of HLBE, and received an aggregate distribution from HLBE of $4,731,000. The remaining $4,621,000 was distributed by HLBE to the non-controlling interest. |
LEASES
LEASES | 12 Months Ended |
Oct. 31, 2017 | |
LEASES | |
LEASES | 10. LEASES Granite Falls Energy GFE has lease agreements with leasing companies for 218 rail cars for the transportation of GFE’s ethanol with various maturity dates through December 2026. The rail car lease payments are due monthly in the aggregate amount of approximately $181,000. GFE has lease agreements with leasing companies for 115 hopper cars to assist with the transport of the distillers’ grains by rail with various maturity dates through November 2025. The rail car lease payments are due monthly in the amount of approximately $76,000. Rent expense for GFE’s leases was approximately $3,163,000, $2,985,000 and $2,204,000 for the fiscal years ended October 31, 2017, 2016, and 2015, respectively. Heron Lake BioEnergy HLBE has lease agreements with leasing companies for 148 rail cars for the transportation of HLBE’s ethanol with various maturity dates through January 2027. The rail car lease payments are due monthly in the aggregate amount of approximately $127,000. HLBE has lease agreement with leasing companies for 110 hopper cars to assist with the transport of the distillers’ grains by rail with various maturity dates through May 2027. During the fiscal year ended October 31, 2017, HLBE renewed a lease agreement for 50 hopper cars for an additional ten years with monthly lease payments of of approximately $25,000. The rail car lease payments are due monthly in the amount of approximately $64,000. Rent expense for HLBE’s leases was approximately $2,170,000, $2,571,000 and $1,969,000 for the fiscal years ended October 31, 2017, 2016, and 2015, respectively. At October 31, 2017, the Company had the following minimum future lease for payments, which at inception had a non-cancelable term of more than one year: November 1, 2017 to October 31, 2018 $ 4,916,616 November 1, 2018 to October 31, 2019 4,532,800 November 1, 2019 to October 31, 2020 4,395,550 November 1, 2020 to October 31, 2021 4,393,800 November 1, 2021 to October 31, 2022 4,315,800 Thereafter 13,341,850 Total minimum lease commitments $ 35,896,416 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Oct. 31, 2017 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 11. EMPLOYEE BENEFIT PLANS GFE has a defined contribution plan available to all of its qualified employees. GFE contributes a match of 50% of the participant’s salary deferral up to a maximum of 3% of the employee’s salary. GFE contributions totaled approximately $73,000, $63,000, and $57,000 for the fiscal years ended October 31, 2017, 2016, and 2015, respectively. HLBE has a defined contribution plan available to all of its qualified employees. HLBE contributes a match of 50% of the participant’s salary deferral up to a maximum of 4% of the employee’s salary. HLBE contributions totaled approximately $90,000, $85,000, and $81,000 for the fiscal years ended October 31, 2017, 2016, and 2015, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Oct. 31, 2017 | |
INCOME TAXES | |
INCOME TAXES | 12. INCOME TAXES The differences between the consolidated financial statement basis and tax basis of assets are estimated as follows: October 31, 2017 October 31, 2016 Consolidated financial statement basis of assets $ 127,089,530 $ 121,470,922 Organization & start-up costs capitalized for tax purposes, net 268,166 357,554 Tax depreciation greater than book depreciation (14,219,188) (17,884,622) Unrealized derivatives gains of commodity derivative instruments (102,650) (566,588) Capitalized inventory 81,119 41,467 Net effect of consolidation of acquired subsidiary (32,239,669) (36,496,913) Income tax basis of assets $ 80,877,308 $ 66,921,820 There were no significant differences between the consolidated financial statement basis of liabilities and the income tax basis of liabilities at October 31, 2017 and 2016. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Oct. 31, 2017 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS GFE Corn Storage and Grain Handling Agreement GFE had a corn storage and grain handling agreement with Farmers Cooperative Elevator (“FCE”), a member of GFE. Under the agreement, GFE had agreed to purchase all of the corn needed for the operation of the plant from FCE. The price of the corn purchased was the bid price FCE establishes for the plant plus a set fee of per bushel. On February 27, 2017, GFE and FCE executed an amendment to the corn storage and grain handling agreement with an effective date of February 21, 2017. Pursuant to the terms of the amendment, the parties agreed to amend the corn storage and grain handling agreement to accelerate the termination date of the agreement to midnight August 31, 2017. Additionally, GFE began posting bids for the purchase of corn beginning June 1, 2017 and thereafter, but could not accept delivery of corn at its Granite Falls, Minnesota plant until September 1, 2017. In August 2017, in exchange for the early termination , GFE paid an early termination fee to FCE of approximately $255,000. Prior to the amendment, the termination date of the corn storage and grain handling agreement was set to expire on November 2017. GFE purchased approximately $51,861,000 of corn from FCE during fiscal 2017, of which approximately $0 is included in corn payable at October 31, 2017. GFE purchased approximately $75,865,000 of corn from FCE during fiscal 2016, of which approximately $5,358,000 is included in corn payable to FCE at October 31, 2016. GFE purchased approximately $75,018,000 of corn from FCE during fiscal 2015, of which approximately $1,486,000 is included in corn payable to FCE at October 31, 2015. GFE purchased corn from board members of approximately $945,000 for the fiscal year ended October 31, 2017, of which approximately $8,000 is included in accounts payable at October 31, 2017 . HLBE Corn Purchases - Members HLBE purchased corn from its board members of approximately $9,811,000, $15,008,000, and $11,032,000 during the fiscal years ended October 31, 2017, 2016, and 2015. Agrinatural During 2013, HLBE borrowed $300,000 from the non-controlling interest member of Agrinatural. Total interest paid in relation to this note payable amounted to approximately $6,000, $20,000, and $16,000 for each of the years ended October 31, 2017, 2016, and 2015. Swan Engineering Agrinatural has management and operating agreement with Swan Engineering, Inc. (“SEI”). SEI, together with an unrelated third party owns Rural Energy Solutions, LLC (“RES”), the 27% minority owner of Agrinatural. Under the management and operating agreement, SEI provides Agrinatural with day-to-day management and operation of Agrinatural’s pipeline distribution business. In exchange for these services, Agrinatural pays SEI an aggregate management fee equal to the fixed monthly base fee plus the variable customer management fee based on the number of customers served on the pipeline less the agreed monthly fee reduction of $4,500. For the year ended October 31, 2017, Agrinatural paid approximately $36,000 and $157,000 for the monthly base fee and variable customer management fee, respectively. For the year ended October 31, 2016, Agrinatural paid approximately $32,000 and $149,000 for the monthly base fee and variable customer management fee, respectively. For the year ended October 31, 2015, the Company paid approximately $18,000 and $83,000 for the monthly base fee and variable customer management fee, respectively. The management and operating agreement with SEI expires July 1, 2019 unless earlier terminated for cause as defined in the agreement. Agrinatural also has project management agreement with SEI. Pursuant to the project management agreement, SEI supervises all of Agrinatural’s pipeline construction projects. These projects are constructed by unrelated third-party pipeline construction companies. Under the project management agreement, Agrinatural pays SEI a total of 10% of the actual capital expenditures for construction projects approved by Agrinatural’s board of managers, excluding capitalized marketing costs. For the year ended October 31, 2017, Agrinatural incurred approximately $44,000 for project management and capital work fees. For the year ended October 31, 2016, Agrinatural paid approximately $68,000 for project management and capital work fees. For the year ended October 31, 2015, the Company paid approximately $19,000 for project management and capital work fees. The project management with SEI expires June 30, 2019 unless earlier terminated for cause as defined in the agreement. Amounts due to SEI from Agrinatural included in accounts payable on the consolidated balance sheets totaled approximately $16,000 and $131,000 at October 31, 2017 and 2016, respectively |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 31, 2017 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES Corn Purchase Commitments At October 31, 2017, GFE had cash and basis contracts for forward corn purchase commitments for approximately 3,041,000 bushels for deliveries through December 2018. At October 31, 2017, HLBE had cash and basis contracts for forward corn purchase commitments for approximately 1,769,000 bushels for deliveries through October 2018. Ethanol Marketing Agreement GFE currently has an ethanol marketing agreement with Eco-Energy, Inc., an unrelated party (“Eco-Energy”). Pursuant to this marketing agreement, Eco-Energy purchases the entire ethanol output of GFE’s ethanol plant and arranges for the transportation of ethanol; however, GFE is responsible for securing all of the rail cars necessary for the transport of ethanol by rail except for 43 rail cars leased to GFE by Eco-Energy under the marketing agreement. GFE pays Eco-Energy a marketing fee per gallon of ethanol sold in consideration of Eco-Energy’s services, as well as a fixed lease fee for rail cars leased from Eco-Energy to GFE. During the third quarter of 2016, GFE amended its marketing agreement extending the term of the marketing agreement to December 31, 2019, with automatic renewals for additional three terms of three-year periods unless terminated by either party by providing written notice to the other party at least 90 days prior to the end of the then current term. A dditionally, the amendment provides for certain negotiated changes to the marketing fees payable to Eco-Energy by GFE and the timing of payments by Eco-Energy to GFE for the ethanol Eco-Energy purchases from GFE. The changes to the marketing fee and timing of payments by Eco-Energy were negotiated based on prevailing market-rate conditions for comparable ethanol marketing services. HLBE has an ethanol marketing agreement with Eco-Energy, an unrelated party, for the sale of ethanol. Under this marketing agreement, Eco-Energy purchases, markets and resells 100% of the ethanol produced at HLBE’s ethanol production facility and arranges for the transportation of HLBE’s ethanol. HLBE pays Eco-Energy a marketing fee per gallon of ethanol sold in consideration of Eco-Energy’s services, as well as a fixed lease fee for rail cars leased from Eco-Energy to the HLBE. During the third quarter of 2016, HLBE entered into an amendment with Eco-Energy extending the term of the marketing agreement to December 31, 2019, with automatic renewals for additional three terms of three-year periods unless terminated by either party by providing written notice to the other party at least 90 days prior to the end of the then current term. A dditionally, the amendment provides for certain negotiated changes to the marketing fees payable to Eco-Energy by HLBE and the timing of payments by Eco-Energy to GFE for the ethanol Eco-Energy purchases from GFE. The changes to the marketing fee and timing of payments by Eco-Energy were negotiated based on prevailing market-rate conditions for comparable ethanol marketing services. Ethanol marketing fees and commissions totaled approximately $1,159,000, $1,256,000 and $1,234,000 for the fiscal years ended October 31, 2017, 2016, and 2015, respectively, and are included net within revenues. Ethanol Contracts At October 31, 2017, GFE had fixed and basis contracts to sell approximately $18,889,000 of ethanol for various delivery periods through March 2018, which approximates 56% of its anticipated ethanol sales for this that period. At October 31, 2017, HLBE had fixed and basis contracts to sell approximately $18,414,000 of ethanol for various delivery periods through March 2018, which approximates 52% of its anticipated ethanol sales for this that period. Distillers Grain Marketing Agreement GFE has a distillers’ grains marketing agreement with RPMG, Inc. (“RPMG”), an unrelated party, for the purpose of marketing and selling all distillers’ grains produced by GFE. The contract commenced on February 1, 2011 with an initial term of one year, and will continue to remain in effect until terminated by either party at its unqualified option, by providing written notice of not less than 90 days to the other party. Distillers’ grains commissions to RPMG totaled approximately $276,000, $335,000 and $421,000 for the fiscal years ended October 31, 2017, 2016, and 2015, respectively, and are included net within revenues. At October 31, 2017, GFE had forward contracts to sell approximately $1,459,000 of distillers’ grain for deliveries through November 2017, which approximates 92% of its anticipated distillers’ grain sales during that period. HLBE has a distillers’ grains off-take agreement with Gavilon Ingredients, LLC (“Gavilon”), an unrelated party. Under this agreement, Gavilon purchases all of the distillers’ grains produced at HLBE’s ethanol plant in exchange for a service fee. The contract commenced on November 1, 2013 with an initial term of six months, and will continue to remain in effect until terminated by either party at its unqualified option, by providing written notice of not less than 60 days to the other party. Distillers’ grains commissions to Gavilon totaled approximately $268,000, $283,000 and $308,000 for the fiscal years ended October 31, 2017, 2016, and 2015, respectively, and are included net within revenues. At October 31, 2017, HLBE had forward contracts to sell approximately $2,006,000 of distillers’ grains for delivery in March 2018, which approximates 27% of its anticipated distillers’ grain sales during that period. Corn Oil Marketing Agreement GFE has a corn oil marketing agreement with RPMG, an unrelated party, for the purpose of marketing and selling all corn oil produced by GFE. The contract commenced on April 29, 2010 with an initial term of one year, and will continue to remain in effect until terminated by either party at its unqualified option, by providing written notice of not less than 90 days to the other party. HLBE has a corn oil marketing agreement with RPMG, an unrelated party, for the purpose of marketing and selling all corn oil produced by HLBE. The contract commenced on November 1, 2013 with an initial term of one year, and will continue to remain in effect until terminated by either party at its unqualified option, by providing written notice of not less than 90 days to the other party. Corn oil commissions totaled approximately $176,000, $166,000 and $125,000 for the fiscal years ended October 31, 2017, 2016, and 2015, respectively, and are included net within revenues. At October 31, 2017, GFE had forward contracts to sell approximately $423,000 of corn oil for delivery through December 2017, which approximates 48% of its anticipated corn oil sales for this that period. At October 31, 2017, HLBE had forward contracts to sell approximately $763,000 of corn oil for delivery through December 2017, which approximates 90% of its anticipated corn oil sales for this that period. Contract for Natural Gas Pipeline to Plant GFE has an agreement with an unrelated company for the construction of and maintenance of 9.5 miles of natural gas pipeline that will serve the GFE plant. The agreement requires the Company to receive a minimum of 1,400,000 DT of natural gas annually through the term of the agreement. The Company is charged a fee based on the amount of natural gas delivered through the pipeline. HLBE has a facilities agreement with Northern Border Pipeline Company which allows us access to an existing interstate natural gas pipeline located approximately 16 miles north from the HLBE plant. Agrinatural was formed to own and operate the pipeline and transports gas to the Company pursuant to a transportation agreement The Company also has a base agreement for the sale and purchase of natural gas with Constellation NewEnergy-Gas Division, LLC (“Constellation”). This agreement runs until March 31, 2019. Water Agreements In October 2003, HLBE entered into an industrial water supply development and distribution agreement with the City of Heron Lake for 15 years. HLBE has the exclusive rights to the first 6,000 gallons per minute of capacity that is available from the well, and provides for HLBE, combined with an unrelated company, to approve any other supply contracts that the City may enter into. In consideration, HLBE will pay one half of the City’s water well bond payments of $735,000, plus a 5% administrative fee, totaling approximately $594,000, and operating costs, relative to HLBE’s water usage, plus a 10% profit. These costs will be paid as water usage fees. HLBE recorded an assessment of approximately $367,000 with long-term debt as described in Note 8. HLBE pays operating and administrative expenses of approximately $12,000 per year. In May 2006, HLBE entered into a water treatment agreement with the City of Heron Lake and Jackson County for 30 years. HLBE will pay for operating and maintenance costs of the plant in exchange for receiving treated water. In addition, HLBE agreed to an assessment for a portion of the capital costs of the water treatment plant. HLBE recorded assessments with long-term debt of $500,000 and $3,550,000 in fiscal 2007 and 2006, respectively, as described in Note 8. HLBE paid operating and maintenance expenses of approximately $92,000, $24,000, and $57,000 in fiscal 2017, 2016, and 2015, respectively. Railcar Damages In accordance with certain railcar lease agreements, at expiration, the Company is required to return the railcars in good condition, less normal wear and tear. Primarily due to the ongoing maintenance and repair activities performed on its railcars, the Company has determined that no accrual for leased railcars is necessary and an estimate of the possible range of loss cannot be made. |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 12 Months Ended |
Oct. 31, 2017 | |
LEGAL PROCEEDINGS | |
LEGAL PROCEEDINGS | 15. LEGAL PROCEEDINGS From time to time in the ordinary course of business, the Company may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual disputes. We are not currently a party to any material pending legal proceedings and we are not currently aware of any such proceedings contemplated by governmental authorities. |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Oct. 31, 2017 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | 16. QUARTERLY FINANCIAL DATA (UNAUDITED) Summary quarterly results are as follows: First Second Third Fourth Quarter Quarter Quarter Quarter Fiscal year ended October 31, 2017 Revenues $ 54,576,064 $ $ 54,250,994 $ 54,153,275 Gross profit Operating income Net income attributable to GFE Basic and diluted earnings per unit attributable to GFE $ 135.91 $ 60.36 $ 66.97 $ 112.02 First Second Third Fourth Quarter Quarter Quarter Quarter Fiscal year ended October 31, 2016 Revenues $ 51,001,654 $ 50,974,398 $ 58,018,553 $ 55,531,621 Gross profit Operating income Net income attributable to GFE Basic and diluted earnings per unit attributable to GFE $ 0.38 $ 22.86 $ 114.12 $ 147.65 First Second Third Fourth Quarter Quarter Quarter Quarter Fiscal year ended October 31, 2015 Revenues $ 58,692,502 $ 59,067,109 $ 58,671,723 $ 54,823,174 Gross profit 5,628,105 5,545,088 8,795,890 2,631,235 Operating income 4,204,718 4,173,843 7,494,444 1,551,398 Net income attributable to GFE 3,767,092 3,179,639 5,440,763 1,199,256 Basic and diluted earnings per unit attributable to GFE $ 123.08 $ 103.89 $ 177.77 $ 39.18 The above quarterly financial data is unaudited, but in the opinion of management, all adjustments necessary for a fair presentation of the selected data for these periods presented have been included. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Oct. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Business | Nature of Business Granite Falls Energy, LLC (“GFE”) is a Minnesota limited liability company currently producing fuel-grade ethanol, distillers’ grains, and crude corn oil near Granite Falls, Minnesota and sells these products, pursuant to marketing agreements, throughout the continental U.S. and on the international market. GFE’s plant has an approximate annual production capacity of 60 million gallons, but is currently permitted to produce up to 70 million gallons of undenatured ethanol on a twelve month rolling sum basis. Additionally, GFE owns a majority interest in Heron Lake BioEnergy, LLC (“HLBE”). HLBE is a Minnesota limited liability company currently producing fuel-grade ethanol, distillers’ grains, and crude corn oil near Heron Lake, Minnesota and sells these products, pursuant to marketing agreements, throughout the continental U.S. HLBE’s plant has an approximate annual production capacity of 60 million gallons, but is currently permitted to produce up to 72.3 million gallons per year of undenatured ethanol on a twelve month rolling sum basis. Additionally, HLBE, through a majority owned subsidiary, operates a natural gas pipeline that provides natural gas to the HLBE’s ethanol production facility and other customers. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements consolidate the operating results and financial position of GFE, and its approximately 50.7% owned subsidiary, HLBE (through GFE’s 100% ownership of Project Viking, L.L.C.). Given GFE’s control over the operations of HLBE and its majority voting interest, GFE consolidates the financial statements of HLBE with its consolidated financial statements. The remaining approximately 49.3% ownership of HLBE is included in the consolidated financial statements as a non-controlling interest. HLBE, through its wholly owned subsidiary, HLBE Pipeline Company, LLC, owns 73.0% of Agrinatural Gas, LLC (“Agrinatural”). Given HLBE’s control over the operations of Agrinatural and its majority voting interest, HLBE consolidates the financial statements of Agrinatural with its consolidated financial statements, with the remaining approximately 27.0% ownership of HLBE attributed to the non-controlling interest. All intercompany balances and transactions are eliminated in consolidation. All references to “we”, “us”, “our”, and the “Company” collectively refer to GFE and its wholly owned and majority owned subsidiaries. |
Fiscal Reporting Period | Fiscal Reporting Period The Company’s fiscal year end for reporting financial operations is October 31 for financial reporting purposes. |
Accounting Estimates | Accounting Estimates Management uses estimates and assumptions in preparing these consolidated financial statements in accordance with generally accepted accounting principles in the U.S. of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The Company uses estimates and assumptions in accounting for the following significant matters, among others: economic lives of property and equipment, valuation of commodity derivatives, inventory, and inventory purchase and sale commitments, evaluation of rail car damages contingency, and the assumptions used in the impairment analysis of long-lived assets, which includes goodwill. Actual results may differ from previously estimated amounts, and such differences may be material to our consolidated financial statements. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made. |
Revenue Recognition | Revenue Recognition The Company generally sells ethanol and related products pursuant to marketing agreements. Revenues from the production of ethanol and the related products are recorded when the customer has taken title and assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. Ethanol and related products are generally shipped free on board (FOB) shipping point. In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, marketing fees and commissions due to the marketers are deducted from the gross sales price as earned. These fees and commissions are recorded net of revenues, as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. Shipping costs paid by the Company to the marketer in the sale of ethanol are not specifically identifiable and, as a result, are recorded based on the net selling price reported to the Company from the marketer. Shipping costs incurred by the Company in the sale of distillers’ grains and corn oil are included in cost of goods sold. Agrinatural recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee for the arrangement is fixed or determinable and collectability is reasonably assured. |
Cost of Goods Sold | Cost of Goods Sold The primary components of cost of goods sold for the production of ethanol and related co-products are corn, energy, raw materials, overhead, depreciation, and direct labor. |
Operating Expenses | Operating Expenses The primary components of operating expenses are salaries and expenses for administrative employees, professional fees, board of governor expenses and property taxes |
Cash | Cash The Company maintains its accounts at multiple financial institutions, of which one is a member of the Company. At times throughout the year, the Company’s cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. The Company does not believe it is exposed to any significant credit risk on its cash balances. |
Restricted Cash | Restricted Cash The Company is periodically required to maintain at its broker cash balances related to open commodity derivative instrument positions as discussed in Note 6. |
Account Receivable | Accounts Receivable Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral. Accounts receivable are recorded at their estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company’s credit terms. Accounts considered uncollectible are written off. The Company follows a policy of providing an allowance for doubtful accounts; however, based on historical experience, and its evaluation of the current status of receivables, the Company is of the belief that such accounts will be collectible in all material respects and thus an allowance was not necessary at October 31, 2017 or 2016. It is at least possible this estimate will change in the future. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value. Cost for all inventories is determined using the first in first out method. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventory consists of raw materials, work in process, finished goods, and supplies. Corn is the primary raw material along with other raw materials. Finished goods consist of ethanol, distillers’ grains, and corn oil. |
Derivative Instruments | Derivative Instruments From time to time, the Company enters into derivative transactions to hedge its exposures to commodity price fluctuations. The Company is required to record these derivatives in the balance sheets at fair value. In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in earnings. Additionally, the Company is required to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or normal sales are documented as normal and exempted from accounting and reporting requirements, and therefore, are not marked to market in our consolidated financial statements. In order to reduce the risks caused by market fluctuations, the Company occasionally hedges its anticipated corn, natural gas, and denaturant purchases and ethanol sales by entering into options and futures contracts. These contracts are used with the intention to fix the purchase price of anticipated requirements for corn in the Company’s ethanol production activities and the related sales price of ethanol. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter market conditions. Although the Company believes its commodity derivative positions are economic hedges, none have been formally designated as a hedge for accounting purposes and derivative positions are recorded on the balance sheet at their fair market value, with changes in fair value recognized in current period earnings or losses. The Company does not enter into financial instruments for trading or speculative purposes. The Company has adopted authoritative guidance related to “Derivatives and Hedging,” and has included the required enhanced quantitative and qualitative disclosure about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses from derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. See further discussion in Note 6. |
Other Intangibles | Other Intangibles Other intangibles included as a component of other assets on the consolidated balance sheet are stated at cost and include road improvements located near the HLBE plant in which the Company has a beneficial interest in but does not own the road. The Company amortizes the assets over the economic useful life of 15 years. The Company recorded amortization expense in the amount of approximately $38,000 during each of the fiscal years ended October 31, 2017, 2016, and 2015. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is provided over the following estimated useful lives by use of the straight-line method. Asset Description Years Land improvements 5-20 years Railroad improvements 5-20 years Process equipment and tanks 5-40 years Administration building 10-40 years Office equipment 3-10 years Rolling stock 5-10 years Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Construction in progress expenditures will be depreciated using the straight-line method over their estimated useful lives once the assets are placed into service. |
Long-Lived Assets | Long-Lived Assets Long-lived assets, such as property and equipment, and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When determining impairment losses, a long-lived asset should be grouped with other assets or liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets or liabilities. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including, but not limited to, discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. No indicators of impairment existed during fiscal 2017, 2016, or 2015 that would have triggered impairment testing, and therefore, no impairment expense was recorded during fiscal 2017, 2016, or 2015. |
Investment | Investment On November 1, 2016, GFE subscribed to purchase 1,500 capital units of Ringneck Energy & Feed, LLC (“Ringneck”) at a price of $5,000 per unit for a total of $7,500,000. GFE paid a down payment of $750,000 in connection with the subscription, and signed a promissory note for $6,750,000 for the remaining balance of the subscription. By letter dated July 12, 2017, GFE was notified of Ringneck’s acceptance of GFE’s subscription and that payment of the balance of GFE’s subscription due under the promissory note was due not later than August 2, 2017. On August 2, 2017, GFE paid $6,750,000 to Ringneck, the remaining balance of GFE’s subscription. Ringneck is a South Dakota limited liability company that is currently constructing an 80 million gallon per year ethanol manufacturing plant in outside of Onida, South Dakota in Sully County. GFE’s investment is sufficient to secure the Company the right to appoint one director to the board of directors of Ringneck and GFE has appointed Steve Christensen, its CEO to serve as its appointed director. The investment will be accounted for by the equity method, under which the Company’s share of the net income of the investee is recognized as income in the Company’s Consolidated Statement of Operations and added to the investment account. Any distributions received from the affiliates are treated as a reduction of the investment. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adhere to the Financial Accounting Standards Board (“FASB”) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The Company has adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: · Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. · Level 2 inputs include: 1. Quoted prices in active markets for similar assets or liabilities. 2. Quoted prices in markets that are observable for the asset or liability either directly or indirectly, for substantially the full term of the asset or liability. 3. Inputs that derived primarily from or corroborated by observable market date by correlation or other means. · Level 3 inputs are unobservable inputs for the asset or liability. The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Except for those assets and liabilities which are required by authoritative accounting guidance to be recorded at fair value in our balance sheets, the Company has elected not to record any other assets or liabilities at fair value. No events occurred during the fiscal years ended October 31, 2017, 2016, or 2015 that required adjustment to the recognized balances of assets or liabilities, which are recorded at fair value on a nonrecurring basis. The carrying value of cash, accounts receivable, accounts payable and accrued liabilities approximates fair value due to the short maturity of these instruments. The Company obtains fair value measurements from an independent pricing service for corn derivative contracts. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the Chicago Board of Trade and New York Mercantile Exchange markets. The fair value of the long-term debt is estimated based on anticipated interest rates which management believes would currently be available to the Company for similar issues of debt, taking into account the current credit risk of the Company and other market factors. The Company believes the carrying value of the debt instruments approximate fair value. |
Income Taxes | Income Taxes The Company is treated as a partnership for federal and state income tax purposes, and generally does not incur income taxes. Instead its earnings and losses are included in the income tax returns of its members. Therefore, no provision or liability for federal or state income taxes has been included in these financial statements. Differences between financial statement basis of assets and tax basis of assets is related to capitalization and amortization of organization and start-up costs for tax purposes, whereas these costs are expensed for financial statement purposes. In addition, the Company uses the alternative depreciation system for tax depreciation instead of the straight-line method that is used for book depreciation, which also causes temporary differences. The Company’s tax year end is December 31. The Company had no significant uncertain tax positions as of October 31, 2017 or 2016 that would require disclosure, primarily due to the partnership tax status. The Company recognizes and measures tax benefits when realization of the benefits is uncertain under a two-step approach. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. Primarily due to the Company’s tax status as a partnership, the adoption of this guidance had no material impact on the Company’s financial condition or results of operations. The Company files income tax returns in the U.S. federal and Minnesota state jurisdictions. For years before 2014, the Company is no longer subject to U.S. Federal or state income tax examinations. |
Net Income Per Unit | Net Income per Unit Basic net income per unit is computed by dividing net income by the weighted average number of members’ units outstanding during the period. Diluted net income per unit is computed by dividing net income by the weighted average number of members’ units and members’ unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, for all periods presented, the calculations of the Company’s basic and diluted net income per unit are the same. |
Environmental Liabilities | Environmental Liabilities The Company’s operations are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its location. Accordingly, the Company has adopted policies, practices, and procedures in the areas of pollution control, occupational health, and the production, handling, storage, and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability, which could result from such events. Environmental liabilities are recorded when the liability is probable and the costs can be reasonably estimated. No expense has been recorded for the fiscal years ended October 31, 2017, 2016, or 2015. |
Goodwill | Goodwill Goodwill represents the cost in excess of the fair value of net assets acquired. The Company conducts impairment assessments annually or when events indicate a triggering event has occurred. No indicators of impairment existed during fiscal 2017, 2016, or 2015 that would have triggered impairment testing, and therefore, no impairment expense was recorded during 2017, 2016, or 2015. |
Reportable Operating Segments | Reportable Operating Segments Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Therefore, in applying the criteria set forth in ASC 280, the Company determined that based on the nature of the products and production process and the expected financial results, the Company’s operations at GFE’s ethanol plant and HLBE’s plant, including the production and sale of ethanol and its co-products, are aggregated into one reporting segment. Additionally, the Company also realizes relatively immaterial revenue from natural gas pipeline operations at Agrinatural, HLBE’s majority owned subsidiary. Before and after accounting for intercompany eliminations, these revenues from Agrinatural’s represent less than less than 1% of our consolidated revenues and have little to no impact on the overall performance of the Company. Therefore, the Company does not separately review Agrinatural’s revenues, cost of sales or other operating performance information. Rather, the Company reviews Agrinatural’s natural gas pipeline financial data on a consolidated basis with the Company’s ethanol production operating segment. The Company believes that the presentation of separate operating performance information for Agrinatural’s natural gas pipeline operations would not provide meaningful information to a reader of the Company’s consolidated financial statements and would not achieve the basic principles and objectives of ASC 280. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Contract Revenue Recognition (Evaluating) In May 2014 and amended in August 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09 which amended the Revenue from Contracts with Customers (Topic 606) of the ASC. The core principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods and services to customers in an amount equal to the consideration the entity receives or expects to receive. The guidance will be effective for the Company beginning November 1, 2018. The Company is currently evaluating the guidance and its effect on its consolidated financial statements. Leases (Evaluating) In February 2016, the FASB adopted ASU No. 2016-02, Leases (Topic 842), which provides guidance for accounting for leases. The new guidance requires companies to recognize the assets and liabilities for the rights and obligations created by leased assets, initially measured at the present value of the lease payments. The accounting guidance for lessors is largely unchanged. The guidance will be effective for the Company beginning November 1, 2019. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements. Restricted Cash (Evaluating) In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash , which amended Statement of Cash Flows (Topic 230) of the ASC. The new guidance will require amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows. The amendments will be effective for the Company beginning November 1, 2018. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements . |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of property and equipment estimated useful lives | Asset Description Years Land improvements 5-20 years Railroad improvements 5-20 years Process equipment and tanks 5-40 years Administration building 10-40 years Office equipment 3-10 years Rolling stock 5-10 years |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
FAIR VALUE | |
Schedule of derivative assets and liabilities measured at fair value | The following table provides information on those derivative assets and liabilities measured at fair value on a recurring basis at October 31, 2017: Fair Value Measurement Using Quoted Prices Significant Other Significant Carrying Amount in in Active Markets Observable Inputs Unobservable Inputs Financial Asset: Consolidated Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative Instruments - Corn $ 244,294 $ 244,294 $ 244,294 $ — $ — Financial Liabilities: Commodity Derivative Instruments - Ethanol $ 24,998 $ 24,998 $ 36,500 $ (11,502) $ — Commodity Derivative Instruments - Natural Gas $ 15,381 $ 15,381 $ — $ 15,381 $ — The following table provides information on those derivative assets measured at fair value on a recurring basis at October 31, 2016: Fair Value Measurement Using Quoted Prices Significant Other Significant Carrying Amount in in Active Markets Observable Inputs Unobservable Inputs Financial Asset: Consolidated Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative Instruments - Corn $ 451,575 $ 451,575 $ 451,575 $ — $ — Commodity Derivative Instruments - Ethanol $ 777,351 $ 777,351 $ 777,351 $ — $ — |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Revenues. | |
Schedule of concentration risk | October 31, 2017 October 31, 2016 October 31, 2015 Eco-Energy, Inc. - Ethanol RPMG, Inc. - Distillers' Grains & Corn Oil |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Accounts receivable | |
Schedule of concentration risk | October 31, 2017 October 31, 2016 Eco-Energy, Inc. - Ethanol RPMG, Inc. - Distillers' Grains & Corn Oil |
Heron Lake BioEnergy, LLC | Revenues. | |
Schedule of concentration risk | October 31, 2017 October 31, 2016 October 31, 2015 Eco-Energy, Inc. - Ethanol Gavilon Ingredients, LLC - Distillers' Grains RPMG, Inc. - Corn Oil |
Heron Lake BioEnergy, LLC | Accounts receivable | |
Schedule of concentration risk | October 31, 2017 October 31, 2016 Eco-Energy, Inc. - Ethanol Gavilon Ingredients, LLC - Distillers' Grains RPMG, Inc. - Corn Oil |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
INVENTORY | |
Schedule of Inventory | 2017 2016 Raw materials $ 4,488,923 $ 9,098,492 Supplies 2,929,385 2,755,958 Work in process 1,281,292 1,347,754 Finished goods 6,541,492 5,139,209 Totals $ 15,241,092 $ 18,341,413 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
DERIVATIVE INSTRUMENTS | |
Schedule of derivative instruments in Statements of Financial Position | The following tables provide details regarding the Company’s derivative instruments at October 31, 2017, none of which were designated as hedging instruments: Consolidated Balance Sheet location Assets Liabilities Corn contracts - GFE Commodity derivative instruments $ 102,650 $ — Corn contracts - HLBE Commodity derivative instruments 141,644 — Ethanol contracts - GFE Commodity derivative instruments — 12,749 Ethanol contracts - HLBE Commodity derivative instruments — 12,249 Natural gas contracts - HLBE Commodity derivative instruments — 15,381 Totals $ 244,294 $ 40,379 As of October 31, 2016, the total notional amount of GFE’s outstanding corn derivative instruments was approximately 5,220,000 bushels, comprised of long corn positions on 3,300,000 bushels that were entered into to hedge forecasted ethanol sales through March 2017, and short corn positions on 1,920,000 bushels that were entered into to hedge forecasted corn purchases through December 2016. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding. As of October 31, 2016, GFE did not have any cash collateral (restricted cash) related to derivatives held by a broker. As of October 31, 2016, the total notional amount of HLBE’s outstanding corn derivative instruments was approximately 4,285,000 bushels, comprised of long corn positions on 3,100,000 bushels that were entered into to hedge forecasted ethanol sales through March 2017, and short corn positions on 1,185,000 bushels that were entered into to hedge forecasted corn purchases through August 2017. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding. As of October 31, 2016, HLBE did not have any cash collateral (restricted cash) related to derivatives held by a broker. The following tables provide details regarding the Company’s derivative instruments at October 31, 2016, none of which were designated as hedging instruments: Consolidated Balance Sheet location Assets Liabilities Corn contracts - GFE Commodity derivative instruments $ 63,050 $ — Corn contracts - HLBE Commodity derivative instruments 388,525 — Ethanol Contracts - GFE Commodity derivative instruments 503,538 — Ethanol Contracts - HLBE Commodity derivative instruments 273,813 — Totals $ 1,228,926 $ — |
Schedule of gains (losses) from derivative instruments | Consolidated Statement Year Ended October 31, of Operations Location 2017 2016 2015 Corn contracts Cost of Goods Sold $ 1,129,746 $ 708,364 $ 303,925 Ethanol contracts Revenues (414,829) (159,322) — Natural gas contracts Cost of Goods Sold (15,381) 32,358 — Total gain, net $ 699,536 $ 581,400 $ 303,925 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | October 31, 2017 October 31, 2016 Land and improvements $ 13,697,790 $ 13,697,790 Railroad improvements 9,045,112 9,045,112 Process equipment and tanks 129,640,626 128,004,694 Administration building 569,328 569,328 Office equipment 989,690 907,652 Rolling stock 1,904,154 1,792,534 Construction in progress 777,655 315,631 156,624,355 154,332,741 Less: accumulated depreciation (84,353,342) (75,364,725) Net property and equipment $ 72,271,013 $ 78,968,016 |
DEBT FACILITIES (Tables)
DEBT FACILITIES (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
DEBT FACILITIES | |
Schedule of debt financing | October 31, 2017 October 31, 2016 GRANITE FALLS ENERGY: Revolving term loan, see terms above. $ — $ — Seasonal loan, see terms above. — — Term note payable to Project Hawkeye, see terms above. 7,500,000 — HERON LAKE BIOENERGY: Revolving term loan to lending institution, see terms above. — — Assessment payable as part of water treatment agreement, due in semi-annual installments of $189,393 with interest at 6.55%, enforceable by statutory lien, with the final payment due in 2021. HLBE made deposits for one years' worth of debt service payments of approximately $364,000, which is included with other assets that are held on deposit to be applied with the final payments of the assessment. 1,241,171 1,517,046 Assessment payable as part of water supply agreement, due in monthly installments of $3,942 with interest at 8.73%, enforceable by statutory lien, with the final payment due in 2019. 56,514 97,930 Note payable to electrical company with monthly payments of $6,250 with interest at 0.00% and a 1.00% maintenance fee due each October. This note was paid in full in September 2017. The electrical company is a member of HLBE. — 68,750 Note payable to non-controlling interest member of Agrinatural. Interest is at One Month LIBOR plus 4.0%, which was approximately 5.24% and 4.53% at October 31, 2017 and 2016, respectively. The note is considered due on demand with payments due at Agrinatural's Board of Managers' discretion. 100,000 200,000 Totals 8,897,685 1,883,726 Less: amounts due within one year 432,183 490,057 Net long-term debt $ 8,465,502 $ 1,393,669 |
Schedule of annual maturities of debt | 2018 $ 432,183 2019 408,169 2020 1,398,227 2021 1,391,250 2022 1,071,429 Thereafter 4,196,427 Total debt $ 8,897,685 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
LEASES | |
Schedule of minimum future lease payments | November 1, 2017 to October 31, 2018 $ 4,916,616 November 1, 2018 to October 31, 2019 4,532,800 November 1, 2019 to October 31, 2020 4,395,550 November 1, 2020 to October 31, 2021 4,393,800 November 1, 2021 to October 31, 2022 4,315,800 Thereafter 13,341,850 Total minimum lease commitments $ 35,896,416 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
INCOME TAXES | |
Schedule of differences between financial statement basis and tax basis of assets | October 31, 2017 October 31, 2016 Consolidated financial statement basis of assets $ 127,089,530 $ 121,470,922 Organization & start-up costs capitalized for tax purposes, net 268,166 357,554 Tax depreciation greater than book depreciation (14,219,188) (17,884,622) Unrealized derivatives gains of commodity derivative instruments (102,650) (566,588) Capitalized inventory 81,119 41,467 Net effect of consolidation of acquired subsidiary (32,239,669) (36,496,913) Income tax basis of assets $ 80,877,308 $ 66,921,820 |
QUARTERLY FINANCIAL DATA (UNA33
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Oct. 31, 2017 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Schedule of quarterly financial data | First Second Third Fourth Quarter Quarter Quarter Quarter Fiscal year ended October 31, 2017 Revenues $ 54,576,064 $ $ 54,250,994 $ 54,153,275 Gross profit Operating income Net income attributable to GFE Basic and diluted earnings per unit attributable to GFE $ 135.91 $ 60.36 $ 66.97 $ 112.02 First Second Third Fourth Quarter Quarter Quarter Quarter Fiscal year ended October 31, 2016 Revenues $ 51,001,654 $ 50,974,398 $ 58,018,553 $ 55,531,621 Gross profit Operating income Net income attributable to GFE Basic and diluted earnings per unit attributable to GFE $ 0.38 $ 22.86 $ 114.12 $ 147.65 First Second Third Fourth Quarter Quarter Quarter Quarter Fiscal year ended October 31, 2015 Revenues $ 58,692,502 $ 59,067,109 $ 58,671,723 $ 54,823,174 Gross profit 5,628,105 5,545,088 8,795,890 2,631,235 Operating income 4,204,718 4,173,843 7,494,444 1,551,398 Net income attributable to GFE 3,767,092 3,179,639 5,440,763 1,199,256 Basic and diluted earnings per unit attributable to GFE $ 123.08 $ 103.89 $ 177.77 $ 39.18 |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) gal in Millions | 12 Months Ended | ||
Oct. 31, 2017USD ($)gal | Oct. 31, 2016USD ($) | Oct. 31, 2015USD ($) | |
Other Intangibles | |||
Economic useful life of other intangibles | 15 years | ||
Amortization of Intangible Assets | $ | $ 38,000 | $ 38,000 | $ 38,000 |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Plant production capacity | 60 | ||
Production volume permitted | 70 | ||
Heron Lake BioEnergy, LLC | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Plant production capacity | 60 | ||
Production volume permitted | 72.3 | ||
Heron Lake BioEnergy, LLC | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 49.30% | ||
Heron Lake BioEnergy, LLC | Project Viking, LLC | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Ownership percentage | 50.70% | ||
Project Viking, LLC | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Ownership percentage | 100.00% | ||
Agrinatural, LLC | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 27.00% | ||
Agrinatural, LLC | HLBE Pipeline Company, LLC | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Ownership percentage | 73.00% |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Useful Life (Details) | 12 Months Ended |
Oct. 31, 2017 | |
Land Improvements | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
Land Improvements | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 20 years |
Railroad improvements | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
Railroad improvements | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 20 years |
Process Equipment and Tanks | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
Process Equipment and Tanks | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 40 years |
Administration building | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 10 years |
Administration building | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 40 years |
Office equipment | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 3 years |
Office equipment | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 10 years |
Rolling stock | Minimum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 5 years |
Rolling stock | Maximum | |
Property, Plant and Equipment | |
Property, Plant and Equipment, Useful Life | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Investments (Details) $ / shares in Units, gal in Millions | Aug. 02, 2017USD ($) | Nov. 01, 2016USD ($)director$ / sharessharesgal | Oct. 31, 2017USD ($)shares | Oct. 31, 2016USD ($) | Oct. 31, 2015USD ($) |
Long-Lived Assets | |||||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 | ||
Investment | |||||
Payment for equity method investment | 7,500,000 | ||||
Proceeds from long-term debt | $ 7,500,000 | $ 9,820,222 | $ 13,440,989 | ||
Ringneck Energy and; Feed, LLC | |||||
Investment | |||||
Expected ethanol production capacity | gal | 80 | ||||
Number of directors Company has the right to appoint | director | 1 | ||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ringneck Energy and; Feed, LLC | |||||
Investment | |||||
Units purchased | shares | 1,500 | ||||
Price per unit (in dollars per unit) | $ / shares | $ 5,000 | ||||
Total cost | $ 7,500,000 | ||||
Payment for equity method investment | $ 6,750,000 | 750,000 | |||
Note payable | $ 6,750,000 | ||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Project Hawkeye Loan | Ringneck Energy and; Feed, LLC | |||||
Investment | |||||
Units purchased | shares | 1,500 | ||||
Proceeds from long-term debt | $ 7,500,000 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Other (Details) | 12 Months Ended | ||
Oct. 31, 2017USD ($)segmentshares | Oct. 31, 2016USD ($)shares | Oct. 31, 2015USD ($)shares | |
Net Income per Unit | |||
Member units outstanding ( in shares) | shares | 0 | 0 | 0 |
Environmental Liabilities | |||
Environmental liability expense | $ 0 | $ 0 | $ 0 |
Goodwill | |||
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
Reportable Operating Segments | |||
Number of reportable segments | segment | 1 | ||
Agrinatural, LLC | Maximum | |||
Reportable Operating Segments | |||
Revenues of subsidiary, percentage | 1.00% |
RISKS AND UNCERTAINTIES Narrati
RISKS AND UNCERTAINTIES Narrative (Details) gal in Millions | 12 Months Ended | |||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017Ygal | Nov. 30, 2017gal | |
UNITED STATES | ||||
Concentration Risk [Line Items] | ||||
Ethanol production capacity | 16,000 | |||
Conventional Ethanol | ||||
Concentration Risk [Line Items] | ||||
Renewable volume obligation | 15,000 | |||
Advanced Biofuels | ||||
Concentration Risk [Line Items] | ||||
Renewable volume obligation | 4,290 | |||
Cellulosic Ethanol | ||||
Concentration Risk [Line Items] | ||||
Renewable volume obligation | 290 | |||
Renewable Fuels | ||||
Concentration Risk [Line Items] | ||||
Renewable volume obligation | 26,000 | |||
Percentage below statutory levels | 20.00% | 20.00% | ||
Number of consecutive years | Y | 2 | |||
Period to modify volumes after trigger event | 1 year | |||
Renewable Fuels | Proposed plan | ||||
Concentration Risk [Line Items] | ||||
Renewable volume obligation | 19,290 | |||
Minimum | Renewable Fuels | ||||
Concentration Risk [Line Items] | ||||
Percentage mandatory renewable fuel volumes are reduced | 20.00% | |||
Minimum | Total revenues | Product | Ethanol | ||||
Concentration Risk [Line Items] | ||||
Concentration percentage | 75.00% | |||
Minimum | Cost of goods sold | Product | Corn | ||||
Concentration Risk [Line Items] | ||||
Concentration percentage | 65.00% | |||
Maximum | Total revenues | Product | Ethanol | ||||
Concentration Risk [Line Items] | ||||
Concentration percentage | 90.00% | |||
Maximum | Cost of goods sold | Product | Corn | ||||
Concentration Risk [Line Items] | ||||
Concentration percentage | 85.00% |
FAIR VALUE (Details)
FAIR VALUE (Details) - Fair Value, Measurements, Recurring - USD ($) | Oct. 31, 2017 | Oct. 31, 2016 |
Corn Contracts | Carrying Amount | ||
Fair value | ||
Financial Asset | $ 244,294 | $ 451,575 |
Corn Contracts | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Asset | 244,294 | 451,575 |
Corn Contracts | Fair Value, Inputs, Level 1 | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Asset | 244,294 | 451,575 |
Ethanol Contracts | Carrying Amount | ||
Fair value | ||
Financial Asset | 777,351 | |
Financial Liabilities | 24,998 | |
Ethanol Contracts | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Asset | 777,351 | |
Financial Liabilities | 24,998 | |
Ethanol Contracts | Fair Value, Inputs, Level 1 | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Asset | $ 777,351 | |
Financial Liabilities | 36,500 | |
Ethanol Contracts | Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Liabilities | (11,502) | |
Natural Gas Contracts | Carrying Amount | ||
Fair value | ||
Financial Liabilities | 15,381 | |
Natural Gas Contracts | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Liabilities | 15,381 | |
Natural Gas Contracts | Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Liabilities | $ 15,381 |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) - customer | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | |||
Concentration Risk [Line Items] | |||
Number of Major Customers | 2 | 2 | 2 |
Heron Lake BioEnergy, LLC | |||
Concentration Risk [Line Items] | |||
Number of Major Customers | 3 | 3 | 3 |
Total revenues | Customer Concentration Risk | Eco-Energy, Inc. | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ethanol | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 81.80% | 80.30% | 79.10% |
Total revenues | Customer Concentration Risk | Eco-Energy, Inc. | Heron Lake BioEnergy, LLC | Ethanol | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 81.30% | 78.50% | 76.90% |
Total revenues | Customer Concentration Risk | Gavilon Ingredients, LLC | Heron Lake BioEnergy, LLC | Distillers' Grains | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 13.70% | 15.40% | 19.20% |
Total revenues | Customer Concentration Risk | RPMG, Inc. | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Distillers' Grains and Corn Oil | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 17.80% | 19.70% | 20.70% |
Total revenues | Customer Concentration Risk | RPMG, Inc. | Heron Lake BioEnergy, LLC | Corn Oil | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 4.50% | 4.40% | 2.40% |
Accounts receivable | Credit Concentration Risk | Eco-Energy, Inc. | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ethanol | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 82.00% | 70.20% | |
Accounts receivable | Credit Concentration Risk | Eco-Energy, Inc. | Heron Lake BioEnergy, LLC | Ethanol | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 86.80% | 78.60% | |
Accounts receivable | Credit Concentration Risk | Gavilon Ingredients, LLC | Heron Lake BioEnergy, LLC | Distillers' Grains | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 7.00% | 11.10% | |
Accounts receivable | Credit Concentration Risk | RPMG, Inc. | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Distillers' Grains and Corn Oil | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 16.30% | 26.50% | |
Accounts receivable | Credit Concentration Risk | RPMG, Inc. | Heron Lake BioEnergy, LLC | Corn Oil | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 4.30% | 3.30% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Inventory | ||
Raw materials | $ 4,488,923 | $ 9,098,492 |
Supplies | 2,929,385 | 2,755,958 |
Work in process | 1,281,292 | 1,347,754 |
Finished goods | 6,541,492 | 5,139,209 |
Totals | 15,241,092 | 18,341,413 |
Ethanol | ||
Inventory | ||
Loss on inventories | $ 128,000 | $ 0 |
DERIVATIVE INSTRUMENTS - Assets
DERIVATIVE INSTRUMENTS - Assets And Liabilities (Details) | 12 Months Ended | |
Oct. 31, 2017USD ($)MMBTUbugal | Oct. 31, 2016USD ($)bu | |
Derivatives, Fair Value [Line Items] | ||
Cash collateral (restricted cash) | $ 75,189 | |
Derivative assets | 244,294 | $ 1,228,926 |
Derivative liabilities | $ 40,379 | |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Corn Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total nonmonetary notional amount outstanding | bu | 1,495,000 | 5,220,000 |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ethanol Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total nonmonetary notional amount outstanding | gal | 420,000 | |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Derivatives held by a broker | ||
Derivatives, Fair Value [Line Items] | ||
Cash collateral (restricted cash) | $ 75,000 | |
Derivative liabilities | $ 12,000 | |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Long/Purchase position | Corn Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total nonmonetary notional amount outstanding | bu | 200,000 | 3,300,000 |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Corn Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total nonmonetary notional amount outstanding | bu | 1,295,000 | 1,920,000 |
Heron Lake BioEnergy, LLC | Corn Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total nonmonetary notional amount outstanding | bu | 1,120,000 | 4,285,000 |
Heron Lake BioEnergy, LLC | Ethanol Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total nonmonetary notional amount outstanding | gal | 420,000 | |
Heron Lake BioEnergy, LLC | Natural Gas Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total gas derivative nonmonetary notional amount outstanding | MMBTU | 120,000 | |
Heron Lake BioEnergy, LLC | Derivatives held by a broker | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 12,000 | |
Heron Lake BioEnergy, LLC | Long/Purchase position | Corn Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total nonmonetary notional amount outstanding | bu | 215,000 | 3,100,000 |
Heron Lake BioEnergy, LLC | Short/Sale position | Corn Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total nonmonetary notional amount outstanding | bu | 905,000 | 1,185,000 |
Not Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 244,294 | $ 1,228,926 |
Derivative liabilities | $ 40,379 | |
Not Designated as Hedging Instruments | Commodity Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Maximum term of corn, ethanol and natural gas derivatives entered to protect cash flows (in months) | 24 months | |
Not Designated as Hedging Instruments | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Corn Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 102,650 | 63,050 |
Not Designated as Hedging Instruments | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ethanol Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 503,538 | |
Derivative liabilities | 12,749 | |
Not Designated as Hedging Instruments | Heron Lake BioEnergy, LLC | Corn Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | 141,644 | 388,525 |
Not Designated as Hedging Instruments | Heron Lake BioEnergy, LLC | Ethanol Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 273,813 | |
Derivative liabilities | 12,249 | |
Not Designated as Hedging Instruments | Heron Lake BioEnergy, LLC | Natural Gas Contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities | $ 15,381 |
DERIVATIVE INSTRUMENTS - Income
DERIVATIVE INSTRUMENTS - Income Statement (Details) - Not Designated as Hedging Instruments - USD ($) | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) on derivative instruments | $ 699,536 | $ 581,400 | $ 303,925 |
Cost of Goods Sold. | Corn Contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) on derivative instruments | 1,129,746 | 708,364 | $ 303,925 |
Cost of Goods Sold. | Natural Gas Contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) on derivative instruments | (15,381) | 32,358 | |
Revenues | Ethanol Contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) on derivative instruments | $ (414,829) | $ (159,322) |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Property, Plant and Equipment | |||
Property and equipment, gross | $ 156,624,355 | $ 154,332,741 | |
Less: accumulated depreciation | (84,353,342) | (75,364,725) | |
Net property and equipment | 72,271,013 | 78,968,016 | |
Depreciation | 9,320,000 | 9,641,000 | $ 9,612,000 |
Land and improvements | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 13,697,790 | 13,697,790 | |
Railroad improvements | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 9,045,112 | 9,045,112 | |
Process equipment and tanks | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 129,640,626 | 128,004,694 | |
Administration building | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 569,328 | 569,328 | |
Office equipment | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 989,690 | 907,652 | |
Rolling stock | |||
Property, Plant and Equipment | |||
Property and equipment, gross | 1,904,154 | 1,792,534 | |
Construction in progress | |||
Property, Plant and Equipment | |||
Property and equipment, gross | $ 777,655 | $ 315,631 |
DEBT FACILITIES (Details)
DEBT FACILITIES (Details) - USD ($) | Sep. 08, 2017 | Aug. 02, 2017 | Nov. 01, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | Feb. 28, 2015 | Aug. 31, 2014 |
Line of Credit Facility | ||||||||
Savings collateral | $ 75,189 | |||||||
Proceeds from long-term debt | 7,500,000 | $ 9,820,222 | $ 13,440,989 | |||||
Revolving Term Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||||||
Line of Credit Facility | ||||||||
Credit facility maximum | $ 18,000,000 | |||||||
Line of credit future reduction amounts | 2,000,000 | |||||||
Amounts outstanding under the credit facility | $ 0 | |||||||
Seasonal Revolving Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||||||
Line of Credit Facility | ||||||||
Credit facility maximum | $ 6,000,000 | |||||||
Amounts outstanding under the credit facility | 0 | |||||||
Unused borrowing capacity | $ 6,000,000 | |||||||
Interest rate (as a percent) | 3.99% | |||||||
Savings collateral | $ 0 | |||||||
Revolving term note payable to lending institution | Heron Lake BioEnergy, LLC | ||||||||
Line of Credit Facility | ||||||||
Credit facility maximum | $ 28,000,000 | |||||||
Line of credit future reduction amounts | 3,500,000 | |||||||
Amounts outstanding under the credit facility | 0 | 0 | ||||||
Unused borrowing capacity | $ 17,500,000 | $ 21,000,000 | ||||||
Interest rate (as a percent) | 4.49% | 3.45% | ||||||
Remaining borrowing capacity | $ 17,500,000 | |||||||
Line of credit unused commitment fee (as a percent) | 0.50% | |||||||
Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||||||
Line of Credit Facility | ||||||||
Credit facility maximum | $ 7,500,000 | |||||||
Interest rate (as a percent) | 4.29% | |||||||
Interest rate floor (as a percent) | 3.55% | |||||||
Maximum period of interest payments | 2 years | |||||||
Debt instrument amortization period after first two years | 7 years | |||||||
One Month LIBOR | Seasonal Revolving Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||||||
Line of Credit Facility | ||||||||
Spread above variable interest rate | 2.75% | |||||||
One Month LIBOR | Revolving term note payable to lending institution | Heron Lake BioEnergy, LLC | ||||||||
Line of Credit Facility | ||||||||
Spread above variable interest rate | 3.25% | |||||||
One Month LIBOR | Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||||||
Line of Credit Facility | ||||||||
Spread above variable interest rate | 3.05% | |||||||
Ringneck Energy and; Feed, LLC | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||||||
Line of Credit Facility | ||||||||
Units purchased | 1,500 | |||||||
Ringneck Energy and; Feed, LLC | Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||||||
Line of Credit Facility | ||||||||
Units purchased | 1,500 | |||||||
Proceeds from long-term debt | $ 7,500,000 |
DEBT FACILITIES - Granite Falls
DEBT FACILITIES - Granite Falls Energy And Heron Lake BioEnergy (Details) - USD ($) | Sep. 08, 2017 | Aug. 02, 2017 | Oct. 31, 2017 | Oct. 31, 2016 |
Line of Credit Facility | ||||
Long-term Debt | $ 8,897,685 | $ 1,883,726 | ||
Less: amounts due within one year | 432,183 | 490,057 | ||
Net long term debt | $ 8,465,502 | $ 1,393,669 | ||
Seasonal Revolving Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Interest rate (as a percent) | 3.99% | |||
Revolving term note payable to lending institution | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Interest rate (as a percent) | 4.49% | 3.45% | ||
Assessments payable as part of water treatment agreement, with interest at 6.55%, due in 2021 | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Long-term Debt | $ 1,241,171 | $ 1,517,046 | ||
Payment | $ 189,393 | |||
Frequency of payment | semi-annual | semi-annual | ||
Interest rate (as a percent) | 6.55% | |||
Period of worth of debt | 1 year | |||
Deposit on debt service payments | $ 364,000 | |||
Assessments payable as part of water supply agreement, with interest at 8.73%, due in 2019 | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Long-term Debt | 56,514 | $ 97,930 | ||
Payment | $ 3,942 | |||
Frequency of payment | monthly | monthly | ||
Interest rate (as a percent) | 8.73% | |||
Note payable to electrical company, due September 2017 | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Long-term Debt | $ 68,750 | |||
Payment | $ 6,250 | |||
Frequency of payment | monthly | |||
Interest rate (as a percent) | 0.00% | |||
Maintenance fee (as a percent) | 1.00% | |||
Note payable to noncontrolling interest member of Agrinatural, Interest One Month LIBOR plus 4.0 % | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Long-term Debt | $ 100,000 | $ 200,000 | ||
Interest rate (as a percent) | 5.24% | 4.53% | ||
Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Long-term Debt | $ 7,500,000 | |||
Interest rate (as a percent) | 4.29% | |||
One Month LIBOR | Seasonal Revolving Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 2.75% | |||
One Month LIBOR | Revolving term note payable to lending institution | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 3.25% | |||
One Month LIBOR | Note payable to noncontrolling interest member of Agrinatural, Interest One Month LIBOR plus 4.0 % | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 4.00% | |||
One Month LIBOR | Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 3.05% |
DEBT FACILITIES - Estimated Ann
DEBT FACILITIES - Estimated Annual Maturities (Details) - USD ($) | Oct. 31, 2017 | Oct. 31, 2016 |
DEBT FACILITIES | ||
2,018 | $ 432,183 | |
2,019 | 408,169 | |
2,020 | 1,398,227 | |
2,021 | 1,391,250 | |
2,022 | 1,071,429 | |
Thereafter | 4,196,427 | |
Long-term Debt | $ 8,897,685 | $ 1,883,726 |
MEMBERS_ EQUITY (Details)
MEMBERS’ EQUITY (Details) | Dec. 21, 2017USD ($)$ / shares | Dec. 17, 2015USD ($)$ / sharesshares | Dec. 18, 2014USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Oct. 31, 2017USD ($)item$ / sharesshares | Oct. 31, 2016USD ($)$ / sharesshares | Oct. 31, 2015USD ($)$ / sharesshares |
Common Units Authorized | 30,606 | 30,606 | ||||||||
Common Units Issued | 30,606 | 30,606 | ||||||||
Common Units Outstanding | 30,606 | 30,606 | ||||||||
Distribution per unit declared (in dollars per unit) | $ / shares | $ 365 | $ 315 | $ 1,050 | |||||||
Amount of distribution declared | $ | $ 11,171,190 | $ 11,647,445 | $ 36,757,640 | |||||||
Amount of distribution paid | $ | $ 11,171,190 | 9,640,886 | 32,136,300 | |||||||
Non-controlling Interest | ||||||||||
Amount of distribution declared | $ | $ 2,006,559 | $ 4,621,340 | ||||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||||||||
Number of classes of membership units | item | 1 | |||||||||
Membership Units, Par value | $ / shares | $ 0 | |||||||||
Common Units Authorized | 30,606 | 30,606 | 30,606 | |||||||
Common Units Issued | 30,606 | 30,606 | 30,606 | |||||||
Common Units Outstanding | 30,606 | 30,606 | 30,606 | |||||||
Distribution per unit declared (in dollars per unit) | $ / shares | $ 385 | $ 365 | $ 315 | $ 1,050 | ||||||
Amount of distribution declared | $ | $ 11,783,000 | $ 11,171,000 | $ 9,641,000 | $ 32,136,000 | ||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Heron Lake BioEnergy, LLC | ||||||||||
Distributions received | $ | $ 1,971,000 | $ 4,731,000 | ||||||||
Heron Lake BioEnergy, LLC | ||||||||||
Distribution per unit declared (in dollars per unit) | $ / shares | $ 0.11 | $ 0.05 | $ 0.12 | |||||||
Amount of distribution declared | $ | $ 8,573,000 | $ 3,897,000 | $ 9,352,000 | |||||||
Heron Lake BioEnergy, LLC | Non-controlling Interest | ||||||||||
Amount of distribution paid | $ | $ 1,926,000 | $ 4,621,000 | ||||||||
Heron Lake BioEnergy, LLC | Capital Unit, Class A | ||||||||||
Common Units Outstanding | 39,420,949 | 39,420,949 | ||||||||
Heron Lake BioEnergy, LLC | Capital Unit, Class B | ||||||||||
Common Units Outstanding | 15,000,000 | 15,000,000 |
LEASES (Details)
LEASES (Details) | 12 Months Ended | ||
Oct. 31, 2017USD ($)item | Oct. 31, 2016USD ($) | Oct. 31, 2015USD ($) | |
Operating Leased Assets [Line Items] | |||
November 1, 2017 to October 31, 2018 | $ 4,916,616 | ||
November 1, 2018 to October 31, 2019 | 4,532,800 | ||
November 1, 2019 to October 31, 2020 | 4,395,550 | ||
November 1, 2020 to October 31, 2021 | 4,393,800 | ||
November 1, 2021 to October 31, 2022 | 4,315,800 | ||
Thereafter | 13,341,850 | ||
Total minimum lease commitments | $ 35,896,416 | ||
Minimum | |||
Operating Leased Assets [Line Items] | |||
Lease term | 1 year | ||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | |||
Operating Leased Assets [Line Items] | |||
Operating lease rent expense | $ 3,163,000 | $ 2,985,000 | $ 2,204,000 |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Rail Cars | |||
Operating Leased Assets [Line Items] | |||
Equipment lease, quantity | item | 218 | ||
Monthly lease payment | $ 181,000 | ||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Hopper Cars | |||
Operating Leased Assets [Line Items] | |||
Equipment lease, quantity | item | 115 | ||
Monthly lease payment | $ 76,000 | ||
Heron Lake BioEnergy, LLC | |||
Operating Leased Assets [Line Items] | |||
Operating lease rent expense | $ 2,170,000 | $ 2,571,000 | $ 1,969,000 |
Heron Lake BioEnergy, LLC | Rail Cars | |||
Operating Leased Assets [Line Items] | |||
Equipment lease, quantity | item | 148 | ||
Monthly lease payment | $ 127,000 | ||
Heron Lake BioEnergy, LLC | Hopper Cars | |||
Operating Leased Assets [Line Items] | |||
Equipment lease, quantity | item | 110 | ||
Monthly lease payment | $ 64,000 | ||
Heron Lake BioEnergy, LLC | Hopper Cars Renewed | |||
Operating Leased Assets [Line Items] | |||
Equipment lease, quantity | item | 50 | ||
Lease term | 10 years | ||
Monthly lease payment | $ 25,000 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer match (as a percent) | 50.00% | ||
Percentage of employee's salary (as a percent) | 3.00% | ||
Employer contribution | $ 73,000 | $ 63,000 | $ 57,000 |
Heron Lake Bio-energy LLC [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer match (as a percent) | 50.00% | ||
Percentage of employee's salary (as a percent) | 4.00% | ||
Employer contribution | $ 90,000 | $ 85,000 | $ 81,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
INCOME TAXES | ||
Consolidated financial statement basis of assets | $ 127,089,530 | $ 121,470,922 |
Organization & start-up costs capitalized for tax purposes, net | 268,166 | 357,554 |
Tax depreciation greater than book depreciation | (14,219,188) | (17,884,622) |
Unrealized derivatives gains of commodity derivative instruments | (102,650) | (566,588) |
Capitalized inventory | 81,119 | 41,467 |
Net effect of consolidation of acquired subsidiary | (32,239,669) | (36,496,913) |
Income tax basis of assets | $ 80,877,308 | $ 66,921,820 |
RELATED PARTY TRANSACTIONS - (D
RELATED PARTY TRANSACTIONS - (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2017 | Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2013 | |
Related Party Transaction [Line Items] | |||||
Accounts payable to related party | $ 5,358,111 | ||||
Agrinatural, LLC | |||||
Related Party Transaction [Line Items] | |||||
Minority interest (as a percent) | 27.00% | ||||
Swan Engineering, Inc. Project Management Agreement | |||||
Related Party Transaction [Line Items] | |||||
Project management and capital work fees | $ 44,000 | ||||
Payment of project management and capital work fees | 68,000 | $ 19,000 | |||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Farmers Cooperative Elevator | |||||
Related Party Transaction [Line Items] | |||||
Payment of early contract termination fee | $ 255,000 | ||||
Purchased from related party | 51,861,000 | 75,865,000 | 75,018,000 | ||
Accounts payable to related party | 0 | 5,358,000 | 1,486,000 | ||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Board Members | |||||
Related Party Transaction [Line Items] | |||||
Purchased from related party | 945,000 | ||||
Accounts payable to related party | 8,000 | ||||
Heron Lake BioEnergy, LLC | Agrinatural, LLC | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from noncontrolling interest | $ 300,000 | ||||
Interest paid | 6,000 | 20,000 | 16,000 | ||
Heron Lake BioEnergy, LLC | Board Members | |||||
Related Party Transaction [Line Items] | |||||
Purchased from related party | 9,811,000 | 15,008,000 | 11,032,000 | ||
Agrinatural, LLC | Swan Engineering Inc S E I | |||||
Related Party Transaction [Line Items] | |||||
Accounts payable to related party | 16,000 | 131,000 | |||
Agrinatural, LLC | Swan Engineering, Inc. Management and Operating Agreement | |||||
Related Party Transaction [Line Items] | |||||
Monthly fee reduction | 4,500 | ||||
Monthly base fee paid | 36,000 | 32,000 | 18,000 | ||
Monthly variable fee paid | $ 157,000 | $ 149,000 | $ 83,000 | ||
Agrinatural, LLC | Swan Engineering, Inc. Project Management Agreement | |||||
Related Party Transaction [Line Items] | |||||
Capital expenditure reimbursement (as a percent) | 10.00% | ||||
Swan Engineering, Inc. and Unrelated Third Party | Agrinatural, LLC | |||||
Related Party Transaction [Line Items] | |||||
Minority interest (as a percent) | 27.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
May 31, 2006 | Oct. 31, 2003USD ($)gal | Jul. 31, 2016item | Oct. 31, 2017USD ($)MMBTUmiitembugal | Oct. 31, 2016USD ($)bu | Oct. 31, 2015USD ($) | Oct. 31, 2007USD ($) | Oct. 31, 2006USD ($) | |
Ethanol Marketing Agreement With Eco-Energy, Inc. [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Fees and commissions | $ 1,159,000 | $ 1,256,000 | $ 1,234,000 | |||||
Corn Oil | RPMG, Inc. Marketing Agreement [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Fees and commissions | $ 176,000 | $ 166,000 | 125,000 | |||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Corn Forward Cash and Basis Contracts Purchase Commitments [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Quantity of commitment | bu | 3,041,000 | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ethanol Marketing Agreement With Eco-Energy, Inc. [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Equipment Lease, Quantity | item | 43 | |||||||
Number of terms agreement automatically renews | item | 3 | |||||||
Term of renewal periods | 3 years | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ethanol Marketing Agreement With Eco-Energy, Inc. [Member] | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Written notice for termination of agreement | 90 days | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Unrelated Company Construction And Maintenance Agreement [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Distance of natural gas pipeline | mi | 9.5 | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Unrelated Company Construction And Maintenance Agreement [Member] | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Minimum volume of natural gas Company to receive annually | MMBTU | 1,400,000 | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Corn Contracts | ||||||||
Loss Contingencies [Line Items] | ||||||||
Quantity of commitment | bu | 1,495,000 | 5,220,000 | ||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ethanol Contracts | ||||||||
Loss Contingencies [Line Items] | ||||||||
Quantity of commitment | gal | 420,000 | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Distillers' Grains | RPMG, Inc. Marketing Agreement [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Initial term | 1 year | |||||||
Fees and commissions | $ 276,000 | $ 335,000 | 421,000 | |||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Distillers' Grains | RPMG, Inc. Marketing Agreement [Member] | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Written notice for termination of agreement | 90 days | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Corn Oil | RPMG, Inc. Marketing Agreement [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Initial term | 1 year | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Corn Oil | RPMG, Inc. Marketing Agreement [Member] | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Written notice for termination of agreement | 90 days | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Corn Contracts | ||||||||
Loss Contingencies [Line Items] | ||||||||
Quantity of commitment | bu | 1,295,000 | 1,920,000 | ||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Ethanol Contracts | ||||||||
Loss Contingencies [Line Items] | ||||||||
Value of commitment | $ 18,889,000 | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Ethanol Contracts | Product | ||||||||
Loss Contingencies [Line Items] | ||||||||
Concentration percentage | 56.00% | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Distillers' Grains | ||||||||
Loss Contingencies [Line Items] | ||||||||
Value of commitment | $ 1,459,000 | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Distillers' Grains | Product | ||||||||
Loss Contingencies [Line Items] | ||||||||
Concentration percentage | 92.00% | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Corn Oil | ||||||||
Loss Contingencies [Line Items] | ||||||||
Value of commitment | $ 423,000 | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Corn Oil | Product | ||||||||
Loss Contingencies [Line Items] | ||||||||
Concentration percentage | 48.00% | |||||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Long/Purchase position | Corn Contracts | ||||||||
Loss Contingencies [Line Items] | ||||||||
Quantity of commitment | bu | 200,000 | 3,300,000 | ||||||
Heron Lake BioEnergy, LLC | Corn Forward Cash and Basis Contracts Purchase Commitments [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Quantity of commitment | bu | 1,769,000 | |||||||
Heron Lake BioEnergy, LLC | Ethanol Marketing Agreement With Eco-Energy, Inc. [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Number of terms agreement automatically renews | item | 3 | |||||||
Term of renewal periods | 3 years | |||||||
Percentage of ethanol and distillers grains products produced by the entity to be purchased, marketed and resold by Gavilon | 100.00% | |||||||
Heron Lake BioEnergy, LLC | Ethanol Marketing Agreement With Eco-Energy, Inc. [Member] | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Written notice for termination of agreement | 90 days | |||||||
Heron Lake BioEnergy, LLC | Northern Border Pipeline Company [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Distance of the natural gas pipeline from the ethanol plant | mi | 16 | |||||||
Heron Lake BioEnergy, LLC | Water supply development and distribution agreement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Term of agreement | 15 years | |||||||
Initial volume per minute of capacity that is available from the well for which the entity has exclusive rights (in gallons) | gal | 6,000 | |||||||
Percentage of City's water well bond payments HLBE will pay | 50.00% | |||||||
City's water well bond payments | $ 735,000 | |||||||
Administrative fee to be paid as water usage fees (as a percent) | 5.00% | |||||||
Administrative fee | $ 594,000 | |||||||
Percentage of profit to be paid as water usage fees | 10.00% | |||||||
Assessment | $ 367,000 | |||||||
Operating and administrative/maintenance expenses paid | $ 12,000 | |||||||
Heron Lake BioEnergy, LLC | Water treatment agreement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Term of agreement | 30 years | |||||||
Assessment | $ 500,000 | $ 3,550,000 | ||||||
Operating and administrative/maintenance expenses paid | $ 92,000 | $ 24,000 | 57,000 | |||||
Heron Lake BioEnergy, LLC | Corn Contracts | ||||||||
Loss Contingencies [Line Items] | ||||||||
Quantity of commitment | bu | 1,120,000 | 4,285,000 | ||||||
Heron Lake BioEnergy, LLC | Ethanol Contracts | ||||||||
Loss Contingencies [Line Items] | ||||||||
Quantity of commitment | gal | 420,000 | |||||||
Heron Lake BioEnergy, LLC | Distillers' Grains | Gavilon Ingredients, LLC. Agreement [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Initial term | 6 months | |||||||
Fees and commissions | $ 268,000 | $ 283,000 | $ 308,000 | |||||
Heron Lake BioEnergy, LLC | Distillers' Grains | Gavilon Ingredients, LLC. Agreement [Member] | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Written notice for termination of agreement | 60 days | |||||||
Heron Lake BioEnergy, LLC | Corn Oil | RPMG, Inc. Marketing Agreement [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Initial term | 1 year | |||||||
Heron Lake BioEnergy, LLC | Corn Oil | RPMG, Inc. Marketing Agreement [Member] | Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Written notice for termination of agreement | 90 days | |||||||
Heron Lake BioEnergy, LLC | Short/Sale position | Corn Contracts | ||||||||
Loss Contingencies [Line Items] | ||||||||
Quantity of commitment | bu | 905,000 | 1,185,000 | ||||||
Heron Lake BioEnergy, LLC | Short/Sale position | Ethanol Contracts | ||||||||
Loss Contingencies [Line Items] | ||||||||
Value of commitment | $ 18,414,000 | |||||||
Heron Lake BioEnergy, LLC | Short/Sale position | Ethanol Contracts | Product | ||||||||
Loss Contingencies [Line Items] | ||||||||
Concentration percentage | 52.00% | |||||||
Heron Lake BioEnergy, LLC | Short/Sale position | Distillers' Grains | ||||||||
Loss Contingencies [Line Items] | ||||||||
Value of commitment | $ 2,006,000 | |||||||
Heron Lake BioEnergy, LLC | Short/Sale position | Distillers' Grains | Product | ||||||||
Loss Contingencies [Line Items] | ||||||||
Concentration percentage | 27.00% | |||||||
Heron Lake BioEnergy, LLC | Short/Sale position | Corn Oil | ||||||||
Loss Contingencies [Line Items] | ||||||||
Value of commitment | $ 763,000 | |||||||
Heron Lake BioEnergy, LLC | Short/Sale position | Corn Oil | Product | ||||||||
Loss Contingencies [Line Items] | ||||||||
Concentration percentage | 90.00% | |||||||
Heron Lake BioEnergy, LLC | Long/Purchase position | Corn Contracts | ||||||||
Loss Contingencies [Line Items] | ||||||||
Quantity of commitment | bu | 215,000 | 3,100,000 |
QUARTERLY FINANCIAL DATA (UNA54
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2015 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||||||
Revenues | $ 54,153,275 | $ 54,250,994 | $ 52,802,058 | $ 54,576,064 | $ 55,531,621 | $ 58,018,553 | $ 50,974,398 | $ 51,001,654 | $ 54,823,174 | $ 58,671,723 | $ 59,067,109 | $ 58,692,502 | $ 215,782,391 | $ 215,526,226 | $ 231,254,508 |
Gross profit | 6,094,930 | 4,203,141 | 3,956,500 | 6,844,907 | 6,890,645 | 6,301,875 | 2,273,697 | 1,432,877 | 2,631,235 | 8,795,890 | 5,545,088 | 5,628,105 | 21,099,478 | 16,899,094 | 22,600,318 |
Operating income | 4,581,816 | 2,740,127 | 2,371,966 | 5,237,686 | 5,739,434 | 5,017,859 | 784,201 | 32,031 | 1,551,398 | 7,494,444 | 4,173,843 | 4,204,718 | 14,931,595 | 11,573,525 | 17,424,403 |
Net income attributable to GFE | $ 3,428,444 | $ 2,049,621 | $ 1,847,477 | $ 4,159,791 | $ 4,518,946 | $ 3,492,822 | $ 699,514 | $ 11,526 | $ 1,199,256 | $ 5,440,763 | $ 3,179,639 | $ 3,767,092 | $ 11,485,333 | $ 8,722,808 | $ 13,586,750 |
Basic and diluted earnings per unit attributable to GFE | $ 112.02 | $ 66.97 | $ 60.36 | $ 135.91 | $ 147.65 | $ 114.12 | $ 22.86 | $ 0.38 | $ 39.18 | $ 177.77 | $ 103.89 | $ 123.08 | $ 375.26 | $ 285 | $ 443.92 |