Document_and_Entity_Informatio
Document and Entity Information Document (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Jan. 16, 2014 | Apr. 30, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'HIGHWATER ETHANOL LLC | ' | ' |
Entity Central Index Key | '0001371451 | ' | ' |
Current Fiscal Year End Date | '--10-31 | ' | ' |
Entity Filer Category | 'Non-accelerated Filer | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 31-Oct-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'Q4 | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 4,953 | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $0 |
Balance_Sheets
Balance Sheets (USD $) | Oct. 31, 2013 | Oct. 31, 2012 |
Current Assets | ' | ' |
Cash and cash equivalents | $7,869,188 | $1,431,996 |
Deposits with broker | 1,025,324 | 600,192 |
Restricted short-term investments | 0 | 14,841 |
Accounts receivable | 3,271,738 | 4,927,791 |
Inventories | 3,595,878 | 4,146,426 |
Prepaids and other | 143,307 | 64,362 |
Total current assets | 15,905,435 | 11,185,608 |
Property and Equipment | ' | ' |
Land and land improvements | 6,853,912 | 6,847,696 |
Buildings | 38,450,065 | 38,368,076 |
Office equipment | 367,508 | 353,657 |
Plant and process equipment | 60,890,831 | 60,803,735 |
Vehicles | 41,994 | 41,994 |
Construction in Progress | 5,672 | 27,529 |
Gross property and equipment | 106,609,982 | 106,442,687 |
Less accumulated depreciation | -26,297,641 | -19,983,052 |
Net property and equipment | 80,312,341 | 86,459,635 |
Other Assets | ' | ' |
Investment in RPMG | 1,730,626 | 1,512,475 |
Restricted Marketable Securities, Noncurrent | 1,556,139 | 1,518,000 |
Debt issuance costs, net | 570,590 | 825,988 |
Deposits | 191,457 | 195,727 |
Total other assets | 4,048,812 | 4,052,190 |
Total Assets | 100,266,588 | 101,697,433 |
Current Liabilities | ' | ' |
Accounts payable | 1,714,221 | 2,016,384 |
Accrued expenses | 553,942 | 631,109 |
Deferred revenue | 22,317 | 0 |
Derivative instruments | 894,106 | 1,113,554 |
Current maturities of long-term debt | 4,527,410 | 2,901,330 |
Total Current Liabilities | 7,711,996 | 6,662,377 |
Long-Term Debt | 41,231,727 | 47,857,262 |
Other Liabilities | 0 | 222,652 |
Derivative Instrument | 0 | 422,937 |
Commitments and Contingencies | ' | ' |
Members' Equity | ' | ' |
Members' equity, 4,953 units issued, authorized and outstanding | 51,322,865 | 46,532,205 |
Total Liabilities and Members’ Equity | $100,266,588 | $101,697,433 |
Balance_Sheets_Parenthetical
Balance Sheets Parenthetical | Oct. 31, 2013 | Oct. 31, 2012 |
Members' equity, outstanding | 4,953 | 4,953 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Revenues | $168,682,409 | $156,648,625 | $160,374,033 |
Cost of Goods Sold | 159,305,976 | 155,785,481 | 149,540,234 |
Gross Profit | 9,376,433 | 863,144 | 10,833,799 |
Operating Expenses | 1,819,444 | 1,804,031 | 1,762,414 |
Operating Profit (Loss) | 7,556,989 | -940,887 | 9,071,385 |
Other Income (Expense) | ' | ' | ' |
Interest income | 68,009 | 70,859 | 73,309 |
Other income | 23,930 | 67,757 | 52,870 |
Interest expense | -4,048,031 | -4,282,900 | -4,743,553 |
Gain on interest rate swap | 769,925 | 741,480 | 689,346 |
Income from equity investment | 453,237 | 218,803 | 0 |
Total other expense, net | -2,732,930 | -3,184,001 | -3,928,028 |
Net Income (Loss) | $4,824,059 | ($4,124,888) | $5,143,357 |
Weighted Average Units Oustanding | 4,953 | 4,953 | 4,953 |
Basic and Diluted Net Income (Loss) Per Unit | $973.97 | ($832.81) | $1,038.43 |
Distributions Per Unit | $0 | $100.95 | $0 |
Statement_of_Comprehensive_Inc
Statement of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Net Income (Loss) | $4,824,059 | ($4,124,888) | $5,143,357 |
Other Comprehensive Income (Loss) | ' | ' | ' |
Unrealized losses on restricted marketable securities | -33,399 | -51,478 | -43,236 |
Comprehensive Income (Loss) | $4,790,660 | ($4,176,366) | $5,100,121 |
Statement_of_Changes_in_Member
Statement of Changes in Members' Equity and Accumulated Other Comprehensive Income (Loss) (USD $) | Total | Common Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Stockholders' Equity, Total [Member] |
Members' Equity at Oct. 31, 2010 | ' | $45,853,240 | $118,438 | $45,971,678 |
Net Income (Loss) | 5,143,357 | 5,143,357 | 0 | 5,143,357 |
Equity adjustment in investee | 0 | ' | ' | ' |
Unrealized loss on restricted marketable securities | -43,236 | 0 | -43,236 | -43,236 |
Members' Equity at Oct. 31, 2011 | ' | 50,996,597 | 75,202 | 51,071,799 |
Net Income (Loss) | -4,124,888 | -4,124,888 | 0 | -4,124,888 |
Member distributions | ' | -500,000 | 0 | -500,000 |
Equity adjustment in investee | 136,772 | 136,772 | 0 | 136,772 |
Unrealized loss on restricted marketable securities | -51,478 | 0 | -51,478 | -51,478 |
Members' Equity at Oct. 31, 2012 | 46,532,205 | 46,508,481 | 23,724 | 46,532,205 |
Net Income (Loss) | 4,824,059 | 4,824,059 | 0 | 4,824,059 |
Equity adjustment in investee | 0 | ' | ' | ' |
Unrealized loss on restricted marketable securities | -33,399 | 0 | -33,399 | -33,399 |
Members' Equity at Oct. 31, 2013 | $51,322,865 | $51,332,540 | ($9,675) | $51,322,865 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Cash Flows from Operating Activities | ' | ' | ' |
Net Income (Loss) | $4,824,059 | ($4,124,888) | $5,143,357 |
Adjustments to reconcile net income (loss) to net cash provided by operations | ' | ' | ' |
Depreciation and amortization | 6,580,350 | 6,556,622 | 6,558,855 |
Equity in earnings in RPMG used to settle liability | -453,237 | 0 | 0 |
Interest payments made from restricted cash | 0 | 67,276 | 67,281 |
Change in fair value of derivative instruments | 0 | 138,662 | 267,129 |
Increase in restricted short-term investments from net interest earned | 0 | 67,276 | 67,275 |
Change in assets and liabilities | ' | ' | ' |
Restricted marketable securities | -56,697 | -134,472 | -397,869 |
Deposits with broker | -425,132 | 0 | 0 |
Accounts receivable, including members | 1,656,053 | 2,566,060 | -2,729,263 |
Inventories | 550,548 | 21,444 | 269,802 |
Derivative instruments | -642,385 | -741,479 | -755,663 |
Prepaids and other | -74,675 | 9,195 | 435,659 |
Deferred revenue | 22,317 | ' | 0 |
Accounts payable | -27,162 | -554,736 | 691,869 |
Accrued expenses | -77,167 | 119,176 | -128,893 |
Net cash provided by operating activities | 11,876,872 | 3,855,584 | 9,354,989 |
Cash Flows from Investing Activities | ' | ' | ' |
Acquisitions of property and equipment | -206,159 | -938,976 | -835,623 |
Proceeds from sale of property and equipment | 28,500 | 0 | 0 |
Investment in RPMG | -262,566 | -454,309 | -423,742 |
Net cash used in investing activities | -440,225 | -1,393,285 | -1,259,365 |
Cash Flows from Financing Activities | ' | ' | ' |
Payments on long-term debt | -4,999,455 | -3,957,986 | -8,524,114 |
Member distributions | 0 | -500,000 | 0 |
Net cash used in financing activities | -4,999,455 | -4,457,986 | -8,524,114 |
Net Increase (Decrease) in Cash and Equivalents | 6,437,192 | -1,995,687 | -428,490 |
Cash and cash equivalents – Beginning of Period | 1,431,996 | 3,427,683 | 3,856,173 |
Cash and cash equivalents – End of Period | 7,869,188 | 1,431,996 | 3,427,683 |
Supplemental Cash Flow Information | ' | ' | ' |
Cash paid for interest expense | 3,635,989 | 3,871,613 | 4,200,379 |
Supplemental Disclosure of Noncash Financing and Investing Activities | ' | ' | ' |
Unrealized losses on restricted marketable securities | -33,399 | -51,478 | -43,236 |
Capital expenditures included in accounts payable | 0 | 0 | 12,391 |
Investment in RPMG included in accounts payable | 0 | 275,000 | 181,258 |
Investment in RPMG included in long-term liabilities | 0 | 222,652 | 0 |
Equity adjustment in investee | $0 | $136,772 | $0 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||
Oct. 31, 2013 | |||
Summary of Significant Accounting Policies [Abstract] | ' | ||
Summary of Significant Accounting Policies | ' | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Nature of Business | |||
Highwater Ethanol, LLC, (a Minnesota Limited Liability Company) operates a 50 million gallon per year ethanol plant in Lamberton, Minnesota. The Company produces and sells fuel ethanol and distillers grains, a co-product of the fuel ethanol production process, in the continental United States, Mexico and Canada. | |||
Accounting Estimates | |||
Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. 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 significant matters, among others, the carrying value of property and equipment and related impairment testing, inventory valuation, and derivative instruments. Actual results could differ from those estimates and such differences may be material to the 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. The Company’s products are shipped FOB shipping point. Revenues are recognized when the customer has taken title and has assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. For ethanol sales, title transfers when loaded into the rail car and for distiller’s grains when the loaded rail cars leave the plant facility. | |||
In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, marketing fees and freight due to the marketers are deducted from the gross sales price at the time incurred. Revenue is recorded net of these marketing fees and freight as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. | |||
Cash and Cash Equivalents | |||
The Company maintains its accounts primarily at one financial institution. At times throughout the year, the 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 cash and cash equivalent balances. | |||
Deposits with Broker | |||
The Company maintains deposits with broker as part of the derivative instruments described in Note 7. Deposits with broker consist of cash balances which are recorded at cost and adjusted for any uncollectability. | |||
Restricted Short-Term Investments | |||
The Company maintains restricted short-term investments as part of the capital lease financing agreement. The restricted short-term investments include money market accounts and similar debt instruments. The Company does not believe it is exposed to any significant credit risk on these balances. | |||
Restricted Marketable Securities | |||
The Company maintains restricted marketable securities in debt securities as part of the capital lease financing agreements described in Note 9. The restricted marketable securities consist primarily of municipal obligations, U.S. treasury government obligations, and corporate obligations. Restricted marketable securities are classified as “available-for-sale” and are carried at their estimated fair market value based on quoted market prices at year end. | |||
Accounts Receivable | |||
Credit terms are extended to customers in the normal course of business. The Company routinely monitors accounts receivable and customer balances are generally kept current at 30 days or less. The Company 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’s estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any. At October 31, 2013 and 2012, the Company believed that such amounts would be collectible and an allowance was not considered necessary. | |||
Inventories | |||
Inventory consists of raw materials, supplies, work in process and finished goods. Raw materials and supplies are stated at the lower of cost (first-in, first-out method) or market. Work in process and finished goods are stated at the lower of average cost or market. | |||
Property and Equipment | |||
Property and equipment is stated at cost. Depreciation is provided over an estimated useful life by use of the straight line method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. The present value of capital lease obligations is classified as long-term debt and the related assets will be included with property and equipment. Amortization of property and equipment under capital lease is included with depreciation expense. | |||
Depreciation is computed using the straight-line method over the following estimated useful lives: | |||
Minimum Years | Maximum Years | ||
Land improvements | 15 | 20 | |
Buildings | 10 | 20 | |
Office equipment | 5 | 5 | |
Plant and process equipment | 10 | 20 | |
Vehicles | 7 | 7 | |
Carrying Value of Long-Lived Assets | |||
Long-lived assets, such as property and equipment, and other long-lived 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. 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 discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. | |||
In August 2009, the Company completed construction of its ethanol production facilities with installed capacity of 50 million gallons per year. The carrying value of these facilities at October 31, 2013 was approximately $80.3 million. In accordance with the Company’s policy for evaluating impairment of long-lived assets described above, management evaluates the recoverability of the facilities based on projected future cash flows from operations over the facilities’ estimated useful lives. In determining the projected future undiscounted cash flows, the Company makes significant assumptions concerning the future viability of the ethanol industry, the future price of corn in relation to the future price of ethanol and the overall demand in relation to production and supply capacity. The Company has not recorded any impairment as of October 31, 2013 and 2012. | |||
Derivative Instruments | |||
Derivatives are recognized in the balance sheets and the measurement of these instruments are 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. | |||
Contracts are evaluated 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 sales are documented as normal and exempted from accounting as derivatives, therefore, are not marked to market in our financial statements. | |||
In order to reduce the risk caused by interest rate fluctuations, the Company entered into an interest rate swap agreement. This contract is used with the intention to limit exposure to increased interest rates. The fair value of this contract is based on widely accepted valuation techniques including discounted cash flow analysis which includes observable market-based inputs. The fair value of the derivative is continually subject to change due to changing market conditions. Although this serves as an economic hedge, the Company does not formally designate this instrument as a hedge and, therefore, records in earnings adjustments caused from marking the instrument to market on a monthly basis as a gain (loss) on interest rate swap. Net cash settlements on the interest rate swap are recognized as interest expense. | |||
The Company entered into corn commodity-based and natural gas derivatives in order to protect cash flows from fluctuations caused by volatility in prices. These derivatives 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. Corn and natural gas derivative changes in fair market value are included in costs of goods sold. | |||
Fair Value of Financial Instruments | |||
The carrying value of cash and cash equivalents, restricted short-term investments, accounts receivable, and accounts payable, and other working capital items approximate fair value at October 31, 2013 and 2012 due to the short maturity nature of these instruments. | |||
The carrying value of restricted marketable securities approximate their fair value based on quoted market prices at year end. The carrying value of derivative instruments approximates fair value based on widely accepted valuation techniques including discounted cash flow analysis which includes observable market-based inputs. | |||
The Company believes the carrying amount of the long-term debt approximates the fair value due to a significant portion of total indebtedness containing variable interest rates and this rate is a market interest rate for these borrowings. The Company determined it is not practicable to estimate the fair value of the capital lease debt since the agreement contains unique terms, conditions and restrictions which are negotiated at arms length and there was no readily determinable similar instrument on which to base an estimate of fair value. | |||
Investments | |||
The Company has an investment interest in an unlisted company, Renewable Fuels Marketing Group, LLC (RPMG), who markets the Company’s ethanol. This investment is a flow-through entity and is being accounted for by the equity method of accounting under which the Company’s share of RPMG net income is recognized as income in the Company’s statements of operations and added to the investment account. Distributions or dividends received from the investment are treated as a reduction of the investment account. The Company has a 7% interest in RPMG. The Company consistently follows the practice of recognizing the net income based on a one month lag. Therefore, the net income which is reported in the Company’s statements of operations for the years ended October 31, 2013 and 2012 is based on the investee’s results of operations for the twelve month periods ended September 30, 2013 and 2012. | |||
Debt Issuance Costs | |||
Costs associated with the issuance of debt are recorded as debt issuance costs and are amortized over the term of the related debt by use of the effective interest method. | |||
Net Income (Loss) per Unit | |||
Basic net income (loss) per unit is computed by dividing net income (loss) 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 Company’s basic and diluted net income (loss) per unit are the same. | |||
Income Taxes | |||
The Company is treated as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, their income or losses are included in the income tax returns of the members and partners. Accordingly, no provision or liability for federal or state income taxes has been included in these financial statements. | |||
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%. The Company has not recognized any liability for unrecognized tax benefits and has not identified any uncertain tax positions. | |||
The Company files income tax returns in the U.S. federal and Minnesota state jurisdictions. The Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2009. | |||
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. | |||
Segment Reporting | |||
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 or decision making group in deciding how to allocate resources and in assessing performance. The Company has determined that it has one reportable business segment, the manufacture and marketing of fuel-grade ethanol and the co-products of the ethanol production process. The Company's chief operating decision maker reviews financial information of the Company as a whole for purposes of assessing financial performance and making operating decisions. Accordingly, the Company considers itself to be operating in a single industry segment. |
Uncertainties
Uncertainties | 12 Months Ended |
Oct. 31, 2013 | |
Uncertainties [Abstract] | ' |
Uncertainties | ' |
UNCERTAINTIES | |
The Company derives substantially all of its revenues from the sale of ethanol and distillers grains. These products are commodities and the market prices for these products display substantial volatility and are subject to a number of factors which are beyond the control of the Company. The Company’s most significant manufacturing inputs are corn and natural gas. The price of these commodities is also subject to substantial volatility and uncontrollable market factors. In addition, these input costs do not necessarily fluctuate with the market prices for ethanol and distillers grains. As a result, the Company is subject to significant risk that its operating margins can be reduced or eliminated due to the relative movements in the market prices of its products and major manufacturing inputs. As a result, market fluctuations in the price of or demand for these commodities can have a significant adverse effect on the Company’s operations, profitability, and availability of cash flows to make loan payments and maintain compliance with the loan agreement. |
Concentrations
Concentrations | 12 Months Ended |
Oct. 31, 2013 | |
Concentrations [Abstract] | ' |
Concentrations | ' |
CONCENTRATIONS | |
The Company has identified certain concentrations that are present in their business operations. The Company’s revenue from ethanol sales and distiller sales are derived from a single customer under an ethanol marketing agreement and a distillers marketing agreement as described in Note 13. | |
The Company purchases all corn from a single supplier, a related party, under a grain procurement agreement described in Note 13. | |
The Company sold all ethanol produced to a related party under an ethanol marketing agreement described in Note 13. Total sales for the years ended October 31, 2013, 2012 and 2011 were $130,869,245, $122,718,876, and $135,443,140, respectively. Accounts receivable as of October 3, 2013 and 2012 were $2,312,825 and and $2,325,490, respectively. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Oct. 31, 2013 | |||||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
FAIR VALUE MEASUREMENTS | |||||||||||||||||
Various inputs are considered when determining the value of financial instruments. The inputs or methodologies used for valuing financial instruments are not necessarily an indication of the risk associated with investing in these instruments. These inputs are summarized in the three broad levels listed below: | |||||||||||||||||
• | Level 1 inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | ||||||||||||||||
• | Level 2 inputs include the following: | ||||||||||||||||
◦ | Quoted prices in active markets for similar assets or liabilities. | ||||||||||||||||
◦ | Quoted prices in markets that are not active for identical or similar assets or liabilities. | ||||||||||||||||
◦ | Inputs other than quoted prices that are observable for the asset or liability. | ||||||||||||||||
◦ | Inputs that are derived primarily from or corroborated by observable market data by correlation or other means. | ||||||||||||||||
• | Level 3 inputs are unobservable inputs for the asset or liability. | ||||||||||||||||
The following table provides information on those assets measured at fair value on a recurring basis. | |||||||||||||||||
Fair Value as of | Fair Value Measurement Using | ||||||||||||||||
31-Oct-13 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Restricted marketable securities | $ | 1,556,139 | $ | 1,556,139 | $ | — | $ | — | |||||||||
Derivative instrument - interest rate swap | $ | (427,091 | ) | $ | — | $ | (427,091 | ) | $ | — | |||||||
Derivative instrument - commodities | $ | (467,015 | ) | $ | (467,015 | ) | $ | — | $ | — | |||||||
Fair Value as of | Fair Value Measurement Using | ||||||||||||||||
31-Oct-12 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Restricted marketable securities - current | $ | 14,841 | $ | 14,841 | $ | — | $ | — | |||||||||
Restricted marketable securities - long-term | $ | 1,518,000 | $ | 1,518,000 | $ | — | $ | — | |||||||||
Derivative instrument - interest rate swap | $ | (1,197,016 | ) | $ | — | $ | (1,197,016 | ) | $ | — | |||||||
Derivative instrument - commodities | $ | (339,475 | ) | $ | (339,475 | ) | $ | — | $ | — | |||||||
The fair value of restricted marketable securities is based on quoted market prices in an active market. The Company determined the fair value of the interest rate swap by using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each instrument and observable market-based inputs. The analysis reflects the contractual terms of the swap agreement, including the period to maturity and uses observable market-based inputs and uses the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The Company determines the fair value of the corn contracts by obtaining the fair value measurements from an independent pricing service based on dealer quotes and live trading levels from the Chicago Board of Trade. |
Restricted_Marketable_Securiti
Restricted Marketable Securities | 12 Months Ended | |||||||||
Oct. 31, 2013 | ||||||||||
Restricted Marketable Securities [Abstract] | ' | |||||||||
Restricted Marketable Securities | ' | |||||||||
RESTRICTED MARKETABLE SECURITIES | ||||||||||
The cost and fair value of the Company's restricted marketable securities consist of the following at October 31, 2013: | ||||||||||
Amortized Cost | Gross | Fair Value | ||||||||
Unrealized | ||||||||||
Losses | ||||||||||
Restricted marketable securities - Long-term | $ | 1,565,814 | $ | (9,675 | ) | $ | 1,556,139 | |||
municipal obligations | ||||||||||
The cost and fair value of the Company's restricted marketable securities consist of the following at October 31, 2012: | ||||||||||
Amortized Cost | Gross | Fair Value | ||||||||
Unrealized | ||||||||||
Gains | ||||||||||
Restricted marketable securities - Current municipal obligations | $ | 14,612 | $ | 229 | $ | 14,841 | ||||
Restricted marketable securities - Long-term | 1,494,505 | 23,495 | 1,518,000 | |||||||
municipal obligations | ||||||||||
Total restricted marketable securities | $ | 1,509,117 | $ | 23,724 | $ | 1,532,841 | ||||
The long-term restricted marketable securities relate to the debt service reserve fund required by the capital lease agreement. The Company had unrealized loss of $9,675 and unrealized gains of $23,724, and $75,202 included in accumulated other comprehensive income at October 31, 2013, October 31, 2012 and October 31, 2011, respectively. | ||||||||||
Shown below are the contractual maturities of marketable securities with fixed maturities at October 31, 2013. Actual maturities may differ from contractual maturities because certain securities may contain early call or prepayment rights. Although these are due within one year they are classified as long-term since they are held in the debt service reserve fund, for long-term debt and are reinvested when due. | ||||||||||
Due within 1 year | $ | 1,556,139 | ||||||||
Total | $ | 1,556,139 | ||||||||
Inventories
Inventories | 12 Months Ended | ||||||||
Oct. 31, 2013 | |||||||||
Inventories [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
INVENTORIES | |||||||||
Inventories consisted of the following at: | |||||||||
31-Oct-13 | 31-Oct-12 | ||||||||
Raw materials | $ | 986,199 | $ | 1,219,867 | |||||
Spare parts and supplies | 1,241,515 | 959,482 | |||||||
Work in process | 883,278 | 1,362,851 | |||||||
Finished goods | 484,886 | 604,226 | |||||||
Total | $ | 3,595,878 | $ | 4,146,426 | |||||
Derivative_Instruments
Derivative Instruments | 12 Months Ended | ||||||||||||
Oct. 31, 2013 | |||||||||||||
Derivative Instruments [Abstract] | ' | ||||||||||||
Derivative Instruments | ' | ||||||||||||
DERIVATIVE INSTRUMENTS | |||||||||||||
As of October 31, 2013, the Company had entered into corn and natural gas derivative instruments and an interest rate swap agreement, which are required to be recorded as either assets or liabilities at fair value in the balance sheet. The Company uses these instruments to manage risks from changes in market rates and prices. They are not used for speculative purposes. Derivatives qualify for treatment as hedges when there is a high correlation between the change in fair value of the derivative instrument and the related change in value of the underlying hedged item. The Company may designate the hedging instruments based upon the exposure being hedged as a fair value hedge, a cash flow hedge or a hedge against foreign currency exposure. The derivative instruments outstanding at October 31, 2013 and 2012 are not designated as effective hedges for accounting purposes. | |||||||||||||
Interest Rate Swap | |||||||||||||
At October 31, 2013 and 2012, the interest rate swap had a notional amount of approximately $16,582,000 and $18,829,000, respectively, that pays a fixed rate and receives a variable rate, that effectively fixes the interest rate on the Fixed Rate Note referred to in Note 9 at 7.6% until June 2014. | |||||||||||||
Corn and Natural Gas Contracts | |||||||||||||
As of October 31, 2013, the Company has open positions for 2,075,000 bushels of corn and 220,000 dekatherms of natural gas. Management expects all open positions outstanding as of October 31, 2013 to be realized within the next twelve months. | |||||||||||||
The following tables provide details regarding the Company's derivative instruments at October 31: | |||||||||||||
Instrument | Balance Sheet location | Liabilities | |||||||||||
2013 | 2012 | ||||||||||||
Interest rate swap | Derivative instruments | $ | 427,091 | $ | 1,197,016 | ||||||||
Commodities | Derivative instruments | $ | 467,015 | $ | 339,475 | ||||||||
The following tables provide details regarding the gains (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments: | |||||||||||||
Statement of | Year Ended October 31 | ||||||||||||
Operations location | 2013 | 2012 | 2011 | ||||||||||
Interest rate swap | Other income (expense) | $ | 769,925 | $ | 741,480 | $ | 689,346 | ||||||
Corn contracts | Cost of goods sold | 331,488 | 481,013 | 493,632 | |||||||||
Natural gas contracts | Cost of goods sold | 41,198 | (419,021 | ) | — | ||||||||
Investment_in_RPMG
Investment in RPMG | 12 Months Ended | ||||||
Oct. 31, 2013 | |||||||
Investments [Abstract] | ' | ||||||
Investment in RPMG | ' | ||||||
INVESTMENT IN RPMG | |||||||
The financial statements of RPMG are summarized as of and for the years ended September 30 as follows: | |||||||
30-Sep-13 | 30-Sep-12 | ||||||
Current assets | $ | 138,356,633 | $ | 154,285,332 | |||
Other assets | 688,613 | 644,431 | |||||
Current liabilities | 104,550,866 | 129,832,966 | |||||
Long-term liabilities | — | 136,000 | |||||
Members' equity | 34,494,380 | 24,960,797 | |||||
Revenue | 4,107,686,492 | 3,773,258,524 | |||||
Net income | 5,879,093 | 2,399,699 | |||||
Debt_Financing
Debt Financing | 12 Months Ended | |||||||
Oct. 31, 2013 | ||||||||
Debt Financing [Abstract] | ' | |||||||
Debt Financing | ' | |||||||
DEBT FINANCING | ||||||||
Long-term debt consists of the following at: | ||||||||
31-Oct-13 | 31-Oct-12 | |||||||
Fixed rate note payable, see terms below | $ | 18,098,700 | $ | 20,233,688 | ||||
Variable rate note payable, see terms below | 12,480,437 | 15,344,904 | ||||||
Capital lease | 15,180,000 | 15,180,000 | ||||||
Total | 45,759,137 | 50,758,592 | ||||||
Less amounts due within one year | 4,527,410 | 2,901,330 | ||||||
Net long-term debt | $ | 41,231,727 | $ | 47,857,262 | ||||
Bank Financing | ||||||||
The Company has two promissory notes including a $25,200,000 Fixed Rate Note and a $20,200,000 Variable Rate Note. The promissory notes are described in the credit agreement and below. The credit agreement also provides a revolving line of credit for $5,000,000 and supports the issuance of letters of credit up to $5,600,000, all of which are secured by substantially all assets. | ||||||||
Fixed Rate Note | ||||||||
The Fixed Rate Note was initially $25,200,000 and has a variable interest rate that is fixed with an interest rate swap through June 2014. The Company makes monthly principal payments on the Fixed Rate Note of approximately $168,000 plus accrued interest. Interest accrues on the Fixed Rate Note at the greater of the one-month LIBOR rate plus 300 basis points or 4%, which was 4% at October 31, 2013. A final balloon payment on the Fixed Rate Note of approximately $15,191,000 will be due February 26, 2015. | ||||||||
Variable Rate Note | ||||||||
The Variable Rate Note was initially $20,200,000. The Company makes monthly payments of interest only. Interest accrues on the Variable Rate Note at the greater of the one-month LIBOR rate plus 350 basis points or 5%, which was 5% at October 31, 2013. The Company also makes quarterly 50% excess cash flow payments which are first applied to interest and then to principal on the Variable Rate Note with a minimum annual principal reduction of $750,000 which has been made at the time of this filing. A final balloon payment of approximately $11,729,000 will be due February 26, 2015. | ||||||||
Line of Credit | ||||||||
The Company's Line of Credit accrues interest at the 90 day LIBOR plus 350 basis points which was 3.74% at October 31, 2013. The line of credit requires monthly interest payments. In March 2013, the Company extended the line of credit to April 2014. At October 31, 2013 and 2012, there are no borrowings outstanding and the maximum availability was $5,000,000. | ||||||||
The loan agreements are secured by substantially all business assets and are subject to various financial and non-financial covenants that limit distributions and debt and require minimum debt service coverage, net worth, and working capital requirements. | ||||||||
As of October 31, 2013, the Company has letters of credit outstanding of $2,500,000. The Company pays interest at a rate of 1.75% on amounts outstanding and the letters of credit expire in October 2014. | ||||||||
Capital Lease | ||||||||
In April 2008, the Company entered into a lease agreement with the City of Lamberton, Minnesota, (the City) in order to finance equipment for the plant. The lease has a term from April 1, 2008 through April 1, 2028 unless terminated earlier. The City financed the purchase of equipment through Solid Waste Facilities Revenue Bonds Series 2008A totaling $15,180,000. | ||||||||
Under the equipment lease agreement with the City, the Company started making interest payments on November 25, 2008 and monthly thereafter at an implicit interest rate of 8.5%. The monthly capital lease interest payments correspond to 1/6 the semi-annual interest payments due on the Bonds on the next interest payment date. Monthly capital lease payments for principal are scheduled to begin on November 25, 2014. These payments will equal 1/12 the annual principal payments scheduled to become due on the corresponding bonds on the next principal payment date. | ||||||||
The Company has guaranteed that if such assessed lease payments are not sufficient for the required Bond payments, the Company will provide such funds as are needed to fund the shortfall. The lease agreement is secured by substantially all business assets and is subject to various financial and non-financial covenants that limit distributions and leverage and require minimum debt service coverage, net worth, and working capital requirements, and are secured by all business assets. The Company is currently meeting all of these covenants. However, if the Company fails to comply with the covenants and does not obtain a waiver, the Trustee and the City could elect to exercise their available remedies, which include forcing immediate payment of outstanding balances. | ||||||||
The capital lease includes an option to purchase the equipment at fair market value at the end of the lease term. Under the capital lease agreement, the proceeds are for project costs and the establishment of a capitalized interest fund and a debt service reserve fund. The Company received proceeds of approximately $14,876,000, after financing costs of approximately $304,000. | ||||||||
The estimated maturities of the long-term debt at October 31, 2013 are as follows: | ||||||||
2014 | $ | 4,527,410 | ||||||
2015 | 27,335,060 | |||||||
2016 | 1,510,000 | |||||||
2017 | 1,639,167 | |||||||
2018 | 1,778,333 | |||||||
2019 and thereafter | 8,969,167 | |||||||
Long-term debt | $ | 45,759,137 | ||||||
Leases
Leases | 12 Months Ended | ||||||
Oct. 31, 2013 | |||||||
Leases [Abstract] | ' | ||||||
Leases of Lessee Disclosure [Text Block] | ' | ||||||
LEASES | |||||||
The Company leases rail cars and equipment under operating and capital leases. Rail car leases include additional payments for usage beyond specified levels. Total lease expense for the years ending October 31, 2013, 2012 and 2011 was approximately $240,000, $222,000, and $193,000 respectively. | |||||||
Future minimum lease payments under the capital leases are as follows at October 31, 2013: | |||||||
Operating | Capital | ||||||
2014 | $ | 122,400 | $ | 1,290,300 | |||
2015 | — | 2,573,633 | |||||
2016 | — | 2,691,217 | |||||
2017 | — | 2,692,033 | |||||
2018 | — | 2,691,871 | |||||
After 2018 | — | 10,994,221 | |||||
Total | $ | 122,400 | 22,933,275 | ||||
Less amount representing interest | 7,753,275 | ||||||
Present value of minimum lease payments | 15,180,000 | ||||||
Less current maturities | — | ||||||
Long-term debt | $ | 15,180,000 | |||||
Members_Equity
Members' Equity | 12 Months Ended |
Oct. 31, 2013 | |
Members' Equity [Abstract] | ' |
Members' Equity | ' |
MEMBERS' EQUITY | |
The Company has one class of membership units, which include certain transfer restrictions as specified in the operating agreement and pursuant to applicable tax and securities law, with each unit representing a pro rata ownership in the Company’s capital, profits, losses and distributions. Income and losses are allocated to all members based upon their respective percentage of units held. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Oct. 31, 2013 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
INCOME TAXES | |||||||||
The Company has adopted an October 31 fiscal year end, but has a tax year end of December 31. The differences between financial statement basis and tax basis of assets are estimated as follows: | |||||||||
October 31, 2013 | October 31, 2012 | ||||||||
Financial statement basis of total assets | $ | 100,266,588 | $ | 101,697,433 | |||||
Organizational and start-up costs | 2,840,342 | 3,104,560 | |||||||
Book to tax depreciation | (27,846,650 | ) | (16,420,732 | ) | |||||
Income tax basis of total assets | $ | 75,260,280 | $ | 88,381,261 | |||||
The differences between the financial statement basis and tax basis of the Company's liabilities are estimated as follows: | |||||||||
October 31, 2013 | October 31, 2012 | ||||||||
Financial statement basis of total liabilities | $ | 48,943,723 | $ | 55,165,228 | |||||
Less: Derivative instruments | (894,106 | ) | (1,197,016 | ) | |||||
Income tax basis of total liabilities | $ | 48,049,617 | $ | 53,968,212 | |||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Oct. 31, 2013 | |
Commitments and Contingencies [Abstract] | ' |
Commitments and Contingencies | ' |
COMMITMENTS AND CONTINGENCIES | |
Marketing Agreements | |
The Company entered into an ethanol marketing agreement with their current marketer (RPMG) to purchase, market, and distribute all the ethanol produced by the Company. The Company also entered into a member control agreement with the marketer whereby the Company made capital contributions and became a minority owner of the marketer. The member control agreement became effective on February 1, 2011 and provides the Company a membership interest with voting rights. The marketing agreement will terminate if the Company ceases to be a member. The Company will assume certain of the member’s rail car leases if the agreement is terminated. In August 2012, the Company entered into an amended and restated marketing agreement that became effective on October 1, 2012 with the marketer. The amended and restated agreement provides that its marketer is its exclusive ethanol marketer and that the Company can sell its ethanol either through an index arrangement or at an agreed upon fixed price. The marketing agreement is perpetual until terminated according to the agreement. The Company may be obligated to continue to market its ethanol through the marketer for a period of time. The amended agreement requires minimum capital amounts invested as required under the agreement. | |
We entered into a distillers grains marketing agreement with a marketer to market all our dried distillers grains we produce at the plant. Under the agreement they will charge a maximum of $2.00 per ton and a minimum of $1.50 per ton price using 2% of the FOB plant price actually received by them for all dried distillers grains removed by them from our plant. The agreement will remain in effect unless otherwise terminated by either party with 120 days notice. Under the agreement, they will be responsible for all transportation arrangements for the distribution of our dried distillers grains. Beginning in July 2011, we market and sell our own modified and wet distillers grains (MWDG). | |
Grain Procurement Contract | |
The Company has entered into a grain procurement agreement with a grain elevator to provide all of the corn needed for the operation of the ethanol plant. Under the agreement, the Company purchases corn at the local market price delivered to the plant plus a fixed fee per bushel of corn. The agreement expires in August 2016. | |
Regulatory Agencies | |
The Company is subject to oversight from regulatory agencies regarding environmental concerns which arise in the ordinary course of its business. | |
Forward Contracts | |
The Company has forward contracts in place for natural gas purchases for approximately $849,000 through February 2014, which represents approximately 45% of the Company's projected usage for the corresponding time period. At October 31, 2013, the Company has 2,100,000 gallons of forward, fixed price ethanol sales contracts for various delivery periods through December 2013. In addition, the Company has forward dried distiller grains sales contracts of approximately 12,000 tons at various fixed prices for various delivery periods through February 2014. | |
Capital Lease | |
The Company entered into a series of related definitive agreements dated September 26, 2013, with an unrelated party for the construction, installation and lease of a corn oil separation system and license of corn oil separation technology. The Company expects to lease the corn oil separation system and technology for a term of 120 months subject to the other party's right to remove the system upon default by the Company and subject to extension or termination pursuant to the terms of the agreements. The Company is responsible for repairs and maintenance of the system and bears the risk of loss. The Company will pay certain license fees which are subject to being reduced if the corn oil separation system does not meet certain performance goals. The corn oil separation system shall be conveyed to the Company at the end of the term so long as the Company is not in breach. The Company granted a security interest in the corn oil separation system to secure its obligations under the agreements. In addition the Company agreed, subject to certain obligations of confidentiality, to provide the other party with Company information on a monthly basis including business and financial information and granted the other party the option to have a representative present in board and committee meetings as an observer. The Company also agreed to give the other party notice in the event of an issuance or sale of Company membership interests or convertible debt instruments. The Company plans to record this as a capital lease, beginning at the time of "start up" as defined in the agreements. The total minimum commitment under the lease is approximately $2,500,000. |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||||
Oct. 31, 2013 | ||||||||||||||||
Quarterly Financial Data (Unaudited) [Abstract] | ' | |||||||||||||||
Quarterly Financial Data (Unaudited) | ' | |||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Fiscal Year Ended October 31, 2013 | ||||||||||||||||
Revenues | $ | 43,201,533 | $ | 42,638,894 | $ | 44,801,707 | $ | 38,040,275 | ||||||||
Gross profit (loss) | (529,082 | ) | 1,986,332 | 2,611,765 | 5,307,418 | |||||||||||
Operating income (loss) | (1,057,604 | ) | 1,549,396 | 2,211,508 | 4,853,689 | |||||||||||
Net income (loss) | (1,746,420 | ) | 770,314 | 1,565,598 | 4,234,567 | |||||||||||
Basic and diluted earnings (loss) per unit | (352.60 | ) | 155.52 | 316.09 | 854.95 | |||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Fiscal Year Ended October 31, 2012 | ||||||||||||||||
Revenues | $ | 39,827,576 | $ | 33,771,321 | $ | 39,240,928 | $ | 43,808,800 | ||||||||
Gross profit (loss) | 2,337,847 | (980,751 | ) | 185,590 | (679,542 | ) | ||||||||||
Operating income (loss) | 1,822,732 | (1,467,528 | ) | (203,503 | ) | (1,092,588 | ) | |||||||||
Net income (loss) | 965,975 | (2,330,276 | ) | (1,068,852 | ) | (1,691,735 | ) | |||||||||
Basic and diluted earnings (loss) per unit | 195.03 | (470.48 | ) | (215.80 | ) | (341.56 | ) | |||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Fiscal Year Ended October 31, 2011 | ||||||||||||||||
Revenues | $ | 36,269,498 | $ | 37,394,958 | $ | 43,133,745 | $ | 43,575,832 | ||||||||
Gross profit | 2,084,072 | 2,434,143 | 2,342,598 | 3,972,986 | ||||||||||||
Operating income | 1,646,780 | 1,962,542 | 1,865,282 | 3,596,781 | ||||||||||||
Net income | 1,044,647 | 837,477 | 673,093 | 2,588,140 | ||||||||||||
Basic and diluted earnings per unit | 210.91 | 169.08 | 135.9 | 522.54 | ||||||||||||
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. |
Subsequent_Event
Subsequent Event | 12 Months Ended |
Oct. 31, 2013 | |
Subsequent Event [Abstract] | ' |
Subsequent Event | ' |
SUBSEQUENT EVENT | |
On November 21, 2013 (with an effective date of November 4, 2013), Highwater Ethanol, LLC (the "Company") entered into a Distillers Crude Corn Oil Marketing Agreement (the "Marketing Agreement") with CHS, Inc. ("CHS") wherein the Company agrees to sell to CHS, and CHS agrees to purchase, all crude corn oil ("Oil") to be produced at the Company's ethanol plant. Under the Marketing Agreement, CHS will execute contracts with buyers after giving prior notice of the terms and conditions thereof to the Company and receiving direction from the Company to accept such contracts. For all Oil sold to CHS under the Marketing Agreement, CHS will pay to the Company the actual price that CHS receives from its buyers less a marketing fee, actual freight and transportation costs and certain taxes related to the purchase, delivery or sale of the Oil. The Company agrees to provide Oil meeting certain specifications as provided in the Marketing Agreement and the Marketing Agreement provides for a process by which CHS can reject nonconforming Oil. The Marketing Agreement is effective for an initial term which commences on the date on which the ethanol plant commences producing Oil pursuant to the mutual agreement of CHS and the Company. Following expiration of the initial term, the Marketing Agreement shall automatically renew for successive terms unless terminated by CHS or the Company in accordance with the Marketing Agreement. |
Accounting_Policies
Accounting Policies | 12 Months Ended | ||
Oct. 31, 2013 | |||
Summary of Significant Accounting Policies [Abstract] | ' | ||
Accounting Estimates | ' | ||
Accounting Estimates | |||
Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. 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 significant matters, among others, the carrying value of property and equipment and related impairment testing, inventory valuation, and derivative instruments. Actual results could differ from those estimates and such differences may be material to the 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. The Company’s products are shipped FOB shipping point. Revenues are recognized when the customer has taken title and has assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. For ethanol sales, title transfers when loaded into the rail car and for distiller’s grains when the loaded rail cars leave the plant facility. | |||
In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, marketing fees and freight due to the marketers are deducted from the gross sales price at the time incurred. Revenue is recorded net of these marketing fees and freight as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. | |||
Cash and Restricted Cash | ' | ||
Cash and Cash Equivalents | |||
The Company maintains its accounts primarily at one financial institution. At times throughout the year, the 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 cash and cash equivalent balances. | |||
Deposits with Broker | |||
The Company maintains deposits with broker as part of the derivative instruments described in Note 7. Deposits with broker consist of cash balances which are recorded at cost and adjusted for any uncollectability. | |||
Restricted Short-Term Investments | |||
The Company maintains restricted short-term investments as part of the capital lease financing agreement. The restricted short-term investments include money market accounts and similar debt instruments. The Company does not believe it is exposed to any significant credit risk on these balances. | |||
Restricted Marketable Securities | ' | ||
Restricted Marketable Securities | |||
The Company maintains restricted marketable securities in debt securities as part of the capital lease financing agreements described in Note 9. The restricted marketable securities consist primarily of municipal obligations, U.S. treasury government obligations, and corporate obligations. Restricted marketable securities are classified as “available-for-sale” and are carried at their estimated fair market value based on quoted market prices at year end. | |||
Accounts Receivable | ' | ||
Accounts Receivable | |||
Credit terms are extended to customers in the normal course of business. The Company routinely monitors accounts receivable and customer balances are generally kept current at 30 days or less. The Company 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’s estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any. At October 31, 2013 and 2012, the Company believed that such amounts would be collectible and an allowance was not considered necessary. | |||
Inventories | ' | ||
Inventories | |||
Inventory consists of raw materials, supplies, work in process and finished goods. Raw materials and supplies are stated at the lower of cost (first-in, first-out method) or market. Work in process and finished goods are stated at the lower of average cost or market. | |||
Property and Equipment | ' | ||
Property and Equipment | |||
Property and equipment is stated at cost. Depreciation is provided over an estimated useful life by use of the straight line method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. The present value of capital lease obligations is classified as long-term debt and the related assets will be included with property and equipment. Amortization of property and equipment under capital lease is included with depreciation expense. | |||
Depreciation is computed using the straight-line method over the following estimated useful lives: | |||
Minimum Years | Maximum Years | ||
Land improvements | 15 | 20 | |
Buildings | 10 | 20 | |
Office equipment | 5 | 5 | |
Plant and process equipment | 10 | 20 | |
Vehicles | 7 | 7 | |
Carrying Value of Long-Lived Assets | ' | ||
Carrying Value of Long-Lived Assets | |||
Long-lived assets, such as property and equipment, and other long-lived 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. 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 discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. | |||
In August 2009, the Company completed construction of its ethanol production facilities with installed capacity of 50 million gallons per year. The carrying value of these facilities at October 31, 2013 was approximately $80.3 million. In accordance with the Company’s policy for evaluating impairment of long-lived assets described above, management evaluates the recoverability of the facilities based on projected future cash flows from operations over the facilities’ estimated useful lives. In determining the projected future undiscounted cash flows, the Company makes significant assumptions concerning the future viability of the ethanol industry, the future price of corn in relation to the future price of ethanol and the overall demand in relation to production and supply capacity. The Company has not recorded any impairment as of October 31, 2013 and 2012. | |||
Derivative Instruments | ' | ||
Derivative Instruments | |||
Derivatives are recognized in the balance sheets and the measurement of these instruments are 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. | |||
Contracts are evaluated 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 sales are documented as normal and exempted from accounting as derivatives, therefore, are not marked to market in our financial statements. | |||
In order to reduce the risk caused by interest rate fluctuations, the Company entered into an interest rate swap agreement. This contract is used with the intention to limit exposure to increased interest rates. The fair value of this contract is based on widely accepted valuation techniques including discounted cash flow analysis which includes observable market-based inputs. The fair value of the derivative is continually subject to change due to changing market conditions. Although this serves as an economic hedge, the Company does not formally designate this instrument as a hedge and, therefore, records in earnings adjustments caused from marking the instrument to market on a monthly basis as a gain (loss) on interest rate swap. Net cash settlements on the interest rate swap are recognized as interest expense. | |||
The Company entered into corn commodity-based and natural gas derivatives in order to protect cash flows from fluctuations caused by volatility in prices. These derivatives 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. Corn and natural gas derivative changes in fair market value are included in costs of goods sold. | |||
Fair Value of Financial Instruments | ' | ||
Fair Value of Financial Instruments | |||
The carrying value of cash and cash equivalents, restricted short-term investments, accounts receivable, and accounts payable, and other working capital items approximate fair value at October 31, 2013 and 2012 due to the short maturity nature of these instruments. | |||
The carrying value of restricted marketable securities approximate their fair value based on quoted market prices at year end. The carrying value of derivative instruments approximates fair value based on widely accepted valuation techniques including discounted cash flow analysis which includes observable market-based inputs. | |||
The Company believes the carrying amount of the long-term debt approximates the fair value due to a significant portion of total indebtedness containing variable interest rates and this rate is a market interest rate for these borrowings. The Company determined it is not practicable to estimate the fair value of the capital lease debt since the agreement contains unique terms, conditions and restrictions which are negotiated at arms length and there was no readily determinable similar instrument on which to base an estimate of fair value. | |||
Investments | ' | ||
Investments | |||
The Company has an investment interest in an unlisted company, Renewable Fuels Marketing Group, LLC (RPMG), who markets the Company’s ethanol. This investment is a flow-through entity and is being accounted for by the equity method of accounting under which the Company’s share of RPMG net income is recognized as income in the Company’s statements of operations and added to the investment account. Distributions or dividends received from the investment are treated as a reduction of the investment account. The Company has a 7% interest in RPMG. The Company consistently follows the practice of recognizing the net income based on a one month lag. Therefore, the net income which is reported in the Company’s statements of operations for the years ended October 31, 2013 and 2012 is based on the investee’s results of operations for the twelve month periods ended September 30, 2013 and 2012. | |||
Debt Issuance Costs | ' | ||
Debt Issuance Costs | |||
Costs associated with the issuance of debt are recorded as debt issuance costs and are amortized over the term of the related debt by use of the effective interest method. | |||
Net Income per Unit | ' | ||
Net Income (Loss) per Unit | |||
Basic net income (loss) per unit is computed by dividing net income (loss) 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 Company’s basic and diluted net income (loss) per unit are the same. | |||
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, their income or losses are included in the income tax returns of the members and partners. Accordingly, no provision or liability for federal or state income taxes has been included in these financial statements. | |||
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%. The Company has not recognized any liability for unrecognized tax benefits and has not identified any uncertain tax positions. | |||
The Company files income tax returns in the U.S. federal and Minnesota state jurisdictions. The Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2009. | |||
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. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies Property and Equiment (Tables) | 12 Months Ended | ||
Oct. 31, 2013 | |||
Property, Plant and Equipment [Abstract] | ' | ||
Property, Plant and Equipment | ' | ||
Minimum Years | Maximum Years | ||
Land improvements | 15 | 20 | |
Buildings | 10 | 20 | |
Office equipment | 5 | 5 | |
Plant and process equipment | 10 | 20 | |
Vehicles | 7 | 7 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Oct. 31, 2013 | |||||||||||||||||
Fair Value Measurements [Abstract] | ' | ||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | ||||||||||||||||
The following table provides information on those assets measured at fair value on a recurring basis. | |||||||||||||||||
Fair Value as of | Fair Value Measurement Using | ||||||||||||||||
31-Oct-13 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Restricted marketable securities | $ | 1,556,139 | $ | 1,556,139 | $ | — | $ | — | |||||||||
Derivative instrument - interest rate swap | $ | (427,091 | ) | $ | — | $ | (427,091 | ) | $ | — | |||||||
Derivative instrument - commodities | $ | (467,015 | ) | $ | (467,015 | ) | $ | — | $ | — | |||||||
Fair Value as of | Fair Value Measurement Using | ||||||||||||||||
31-Oct-12 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Restricted marketable securities - current | $ | 14,841 | $ | 14,841 | $ | — | $ | — | |||||||||
Restricted marketable securities - long-term | $ | 1,518,000 | $ | 1,518,000 | $ | — | $ | — | |||||||||
Derivative instrument - interest rate swap | $ | (1,197,016 | ) | $ | — | $ | (1,197,016 | ) | $ | — | |||||||
Derivative instrument - commodities | $ | (339,475 | ) | $ | (339,475 | ) | $ | — | $ | — | |||||||
Restricted_Marketable_Securiti1
Restricted Marketable Securities (Tables) | 12 Months Ended | |||||||||
Oct. 31, 2013 | ||||||||||
Restricted Marketable Securities [Abstract] | ' | |||||||||
Restricted Marketable Securities | ' | |||||||||
Amortized Cost | Gross | Fair Value | ||||||||
Unrealized | ||||||||||
Losses | ||||||||||
Restricted marketable securities - Long-term | $ | 1,565,814 | $ | (9,675 | ) | $ | 1,556,139 | |||
municipal obligations | ||||||||||
The cost and fair value of the Company's restricted marketable securities consist of the following at October 31, 2012: | ||||||||||
Amortized Cost | Gross | Fair Value | ||||||||
Unrealized | ||||||||||
Gains | ||||||||||
Restricted marketable securities - Current municipal obligations | $ | 14,612 | $ | 229 | $ | 14,841 | ||||
Restricted marketable securities - Long-term | 1,494,505 | 23,495 | 1,518,000 | |||||||
municipal obligations | ||||||||||
Total restricted marketable securities | $ | 1,509,117 | $ | 23,724 | $ | 1,532,841 | ||||
Contractual Maturities of Marketable Securities | ' | |||||||||
Due within 1 year | $ | 1,556,139 | ||||||||
Total | $ | 1,556,139 | ||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Oct. 31, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventory | ' | ||||||||
31-Oct-13 | 31-Oct-12 | ||||||||
Raw materials | $ | 986,199 | $ | 1,219,867 | |||||
Spare parts and supplies | 1,241,515 | 959,482 | |||||||
Work in process | 883,278 | 1,362,851 | |||||||
Finished goods | 484,886 | 604,226 | |||||||
Total | $ | 3,595,878 | $ | 4,146,426 | |||||
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 12 Months Ended | ||||||||||||
Oct. 31, 2013 | |||||||||||||
Derivative Instruments [Abstract] | ' | ||||||||||||
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position | ' | ||||||||||||
Instrument | Balance Sheet location | Liabilities | |||||||||||
2013 | 2012 | ||||||||||||
Interest rate swap | Derivative instruments | $ | 427,091 | $ | 1,197,016 | ||||||||
Commodities | Derivative instruments | $ | 467,015 | $ | 339,475 | ||||||||
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position | ' | ||||||||||||
Statement of | Year Ended October 31 | ||||||||||||
Operations location | 2013 | 2012 | 2011 | ||||||||||
Interest rate swap | Other income (expense) | $ | 769,925 | $ | 741,480 | $ | 689,346 | ||||||
Corn contracts | Cost of goods sold | 331,488 | 481,013 | 493,632 | |||||||||
Natural gas contracts | Cost of goods sold | 41,198 | (419,021 | ) | — | ||||||||
Investment_in_RPMG_Tables
Investment in RPMG (Tables) | 12 Months Ended | ||||||
Oct. 31, 2013 | |||||||
Investments [Abstract] | ' | ||||||
Schedule of Equity Method Investments | ' | ||||||
30-Sep-13 | 30-Sep-12 | ||||||
Current assets | $ | 138,356,633 | $ | 154,285,332 | |||
Other assets | 688,613 | 644,431 | |||||
Current liabilities | 104,550,866 | 129,832,966 | |||||
Long-term liabilities | — | 136,000 | |||||
Members' equity | 34,494,380 | 24,960,797 | |||||
Revenue | 4,107,686,492 | 3,773,258,524 | |||||
Net income | 5,879,093 | 2,399,699 | |||||
Debt_Financing_Tables
Debt Financing (Tables) | 12 Months Ended | |||||||
Oct. 31, 2013 | ||||||||
Debt Financing [Abstract] | ' | |||||||
Schedule of Long-term Debt | ' | |||||||
31-Oct-13 | 31-Oct-12 | |||||||
Fixed rate note payable, see terms below | $ | 18,098,700 | $ | 20,233,688 | ||||
Variable rate note payable, see terms below | 12,480,437 | 15,344,904 | ||||||
Capital lease | 15,180,000 | 15,180,000 | ||||||
Total | 45,759,137 | 50,758,592 | ||||||
Less amounts due within one year | 4,527,410 | 2,901,330 | ||||||
Net long-term debt | $ | 41,231,727 | $ | 47,857,262 | ||||
Schedule of Maturities of Long-term Debt | ' | |||||||
2014 | $ | 4,527,410 | ||||||
2015 | 27,335,060 | |||||||
2016 | 1,510,000 | |||||||
2017 | 1,639,167 | |||||||
2018 | 1,778,333 | |||||||
2019 and thereafter | 8,969,167 | |||||||
Long-term debt | $ | 45,759,137 | ||||||
Leases_Tables
Leases (Tables) | 12 Months Ended | ||||||
Oct. 31, 2013 | |||||||
Leases [Abstract] | ' | ||||||
Schedule of Future Minimum Lease Payments for Capital and Operating Leases | ' | ||||||
Operating | Capital | ||||||
2014 | $ | 122,400 | $ | 1,290,300 | |||
2015 | — | 2,573,633 | |||||
2016 | — | 2,691,217 | |||||
2017 | — | 2,692,033 | |||||
2018 | — | 2,691,871 | |||||
After 2018 | — | 10,994,221 | |||||
Total | $ | 122,400 | 22,933,275 | ||||
Less amount representing interest | 7,753,275 | ||||||
Present value of minimum lease payments | 15,180,000 | ||||||
Less current maturities | — | ||||||
Long-term debt | $ | 15,180,000 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Oct. 31, 2013 | |||||||||
Income Taxes [Abstract] | ' | ||||||||
Schedule of Income Taxes | ' | ||||||||
October 31, 2013 | October 31, 2012 | ||||||||
Financial statement basis of total assets | $ | 100,266,588 | $ | 101,697,433 | |||||
Organizational and start-up costs | 2,840,342 | 3,104,560 | |||||||
Book to tax depreciation | (27,846,650 | ) | (16,420,732 | ) | |||||
Income tax basis of total assets | $ | 75,260,280 | $ | 88,381,261 | |||||
The differences between the financial statement basis and tax basis of the Company's liabilities are estimated as follows: | |||||||||
October 31, 2013 | October 31, 2012 | ||||||||
Financial statement basis of total liabilities | $ | 48,943,723 | $ | 55,165,228 | |||||
Less: Derivative instruments | (894,106 | ) | (1,197,016 | ) | |||||
Income tax basis of total liabilities | $ | 48,049,617 | $ | 53,968,212 | |||||
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Oct. 31, 2013 | ||||||||||||||||
Quarterly Financial Data (Unaudited) [Abstract] | ' | |||||||||||||||
Schedule of Quarterly Financial Information | ' | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Fiscal Year Ended October 31, 2013 | ||||||||||||||||
Revenues | $ | 43,201,533 | $ | 42,638,894 | $ | 44,801,707 | $ | 38,040,275 | ||||||||
Gross profit (loss) | (529,082 | ) | 1,986,332 | 2,611,765 | 5,307,418 | |||||||||||
Operating income (loss) | (1,057,604 | ) | 1,549,396 | 2,211,508 | 4,853,689 | |||||||||||
Net income (loss) | (1,746,420 | ) | 770,314 | 1,565,598 | 4,234,567 | |||||||||||
Basic and diluted earnings (loss) per unit | (352.60 | ) | 155.52 | 316.09 | 854.95 | |||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Fiscal Year Ended October 31, 2012 | ||||||||||||||||
Revenues | $ | 39,827,576 | $ | 33,771,321 | $ | 39,240,928 | $ | 43,808,800 | ||||||||
Gross profit (loss) | 2,337,847 | (980,751 | ) | 185,590 | (679,542 | ) | ||||||||||
Operating income (loss) | 1,822,732 | (1,467,528 | ) | (203,503 | ) | (1,092,588 | ) | |||||||||
Net income (loss) | 965,975 | (2,330,276 | ) | (1,068,852 | ) | (1,691,735 | ) | |||||||||
Basic and diluted earnings (loss) per unit | 195.03 | (470.48 | ) | (215.80 | ) | (341.56 | ) | |||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Fiscal Year Ended October 31, 2011 | ||||||||||||||||
Revenues | $ | 36,269,498 | $ | 37,394,958 | $ | 43,133,745 | $ | 43,575,832 | ||||||||
Gross profit | 2,084,072 | 2,434,143 | 2,342,598 | 3,972,986 | ||||||||||||
Operating income | 1,646,780 | 1,962,542 | 1,865,282 | 3,596,781 | ||||||||||||
Net income | 1,044,647 | 837,477 | 673,093 | 2,588,140 | ||||||||||||
Basic and diluted earnings per unit | 210.91 | 169.08 | 135.9 | 522.54 | ||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2013 |
Investor [Member] | Ethanol [Member] | |||
gal | ||||
Product Information [Line Items] | ' | ' | ' | ' |
Property, Plant and Equipment, Net | $80,312,341 | $86,459,635 | ' | ' |
Annual Production Capacity | ' | ' | ' | 50,000,000 |
Equity Method Investment, Ownership Percentage | ' | ' | 7.00% | ' |
Property_and_Equipment_Details
Property and Equipment (Details) | 12 Months Ended |
Oct. 31, 2013 | |
Land Improvements [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '15 |
Land Improvements [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '20 |
Building [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '10 |
Building [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '20 |
Office Equipment [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '5 |
Office Equipment [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '5 |
Vehicles [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '7 |
Vehicles [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '7 |
Machinery and Equipment [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '10 |
Machinery and Equipment [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Estimated Useful Lives | '20 |
Income_Tax_Details
Income Tax (Details) | 12 Months Ended |
Oct. 31, 2013 | |
Summary of Significant Accounting Policies [Abstract] | ' |
Cumulative Probability, Percent | 50.00% |
Concentrations_Details
Concentrations (Details) (Affiliated Entity [Member], USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Affiliated Entity [Member] | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Revenue from Related Parties | $130,869,245 | $122,718,876 | $135,443,140 |
Accounts Receivable, Related Parties, Current | $2,312,825 | $2,325,490 | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Oct. 31, 2013 | Oct. 31, 2012 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Marketable Securities, Restricted | $1,556,139 | $1,532,841 |
Marketable Securities, Restricted, Current | 0 | 14,841 |
Restricted Marketable Securities, Noncurrent | 1,556,139 | 1,518,000 |
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Marketable Securities, Restricted | 1,556,139 | ' |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Marketable Securities, Restricted | 1,556,139 | ' |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Marketable Securities, Restricted | 0 | ' |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Marketable Securities, Restricted | 0 | ' |
Restricted Marketable Securities, Current [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Marketable Securities, Restricted, Current | ' | 14,841 |
Restricted Marketable Securities, Current [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Marketable Securities, Restricted, Current | ' | 14,841 |
Restricted Marketable Securities, Current [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Marketable Securities, Restricted, Current | ' | 0 |
Restricted Marketable Securities, Current [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Marketable Securities, Restricted, Current | ' | 0 |
Restricted Marketable Securities, Long-Term [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Restricted Marketable Securities, Noncurrent | ' | 1,518,000 |
Restricted Marketable Securities, Long-Term [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Restricted Marketable Securities, Noncurrent | ' | 1,518,000 |
Restricted Marketable Securities, Long-Term [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Restricted Marketable Securities, Noncurrent | ' | 0 |
Restricted Marketable Securities, Long-Term [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Restricted Marketable Securities, Noncurrent | ' | 0 |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Assets | -427,091 | -1,197,016 |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Assets | 0 | 0 |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Assets | -427,091 | -1,197,016 |
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Assets | 0 | 0 |
Commodities [Member] | Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Assets | -467,015 | -339,475 |
Commodities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Assets | -467,015 | -339,475 |
Commodities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Assets | 0 | 0 |
Commodities [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' |
Derivative Assets | $0 | $0 |
Restricted_Marketable_Securiti2
Restricted Marketable Securities (Details) (USD $) | 12 Months Ended | 12 Months Ended | ||||
Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2011 | Oct. 31, 2012 | Oct. 31, 2013 | Oct. 31, 2012 | |
Restricted Marketable Securities, Current [Member] | Restricted Marketable Securities, Long-Term [Member] | Restricted Marketable Securities, Long-Term [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax | $23,724 | $9,675 | $75,202 | ' | ' | ' |
Available-for-sale Securities, Amortized Cost Basis | 1,509,117 | ' | ' | 14,612 | 1,565,814 | 1,494,505 |
Available-for-sale Securities, Gross Unrealized Gains | 23,724 | ' | ' | 229 | -9,675 | 23,495 |
Marketable Securities, Restricted, Current | 14,841 | 0 | ' | 14,841 | ' | ' |
Restricted Marketable Securities, Noncurrent | 1,518,000 | 1,556,139 | ' | ' | 1,556,139 | 1,518,000 |
Marketable Securities, Restricted | $1,532,841 | $1,556,139 | ' | ' | ' | ' |
Restricted_Marketable_Securiti3
Restricted Marketable Securities Schedule of Held To Maturity Securities (Details) (USD $) | Oct. 31, 2013 | Oct. 31, 2012 |
Restricted Marketable Securities [Abstract] | ' | ' |
Available-for-sale Securities, Debt Maturities, Due within 1 year | $1,556,139 | ' |
Marketable Securities, Restricted | $1,556,139 | $1,532,841 |
Inventories_Details
Inventories (Details) (USD $) | Oct. 31, 2013 | Oct. 31, 2012 |
Inventories [Abstract] | ' | ' |
Raw Materials | $986,199 | $1,219,867 |
Spare parts and supplies | 1,241,515 | 959,482 |
Work in Process | 883,278 | 1,362,851 |
Finished Goods | 484,886 | 604,226 |
Inventories | $3,595,878 | $4,146,426 |
Derivative_Instruments_Balance
Derivative Instruments Balance Sheet (Details) (USD $) | Oct. 31, 2013 | Oct. 31, 2012 |
Interest Rate Swap [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative, Notional Amount | $16,582,000 | $18,829,000 |
Derivative, Fixed Interest Rate | 7.60% | ' |
Interest Rate Swap [Member] | Other Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liability | 427,091 | 1,197,016 |
Corn [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Nonmonetary Notional Amount of Price Risk Derivative Instruments Not Designated as Hedging Instruments, Sale Contracts | 2,075,000 | ' |
Natural Gas [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Nonmonetary Notional Amount of Price Risk Derivative Instruments Not Designated as Hedging Instruments, Sale Contracts | 220,000 | ' |
Commodities [Member] | Other Liabilities [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Derivative Liability | $467,015 | $339,475 |
Derivative_Instruments_Income_
Derivative Instruments Income Statement (Details) (Not Designated as Hedging Instrument [Member], USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Interest Rate Swap [Member] | Other Income [Member] | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivative Instruments, Gain (Loss) Recognized in Income, Net | $769,925 | $741,480 | $689,346 |
Corn [Member] | Cost of Sales [Member] | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivative Instruments, Gain (Loss) Recognized in Income, Net | 331,488 | 481,013 | 493,632 |
Natural Gas [Member] | Cost of Sales [Member] | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' |
Derivative Instruments, Gain (Loss) Recognized in Income, Net | $41,198 | ($419,021) | $0 |
Investment_in_RPMG_Details
Investment in RPMG (Details) (Renewable Fuels Marketing Group (RPMG) [Member], USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Renewable Fuels Marketing Group (RPMG) [Member] | ' | ' |
Schedule of Equity Method Investments [Line Items] | ' | ' |
Equity Method Investment, Current Assets | $138,356,633 | $154,285,332 |
Equity Method Investment, Other Assets | 688,613 | 644,431 |
Equity Method Investment, Current Liabilities | 104,550,866 | 129,832,966 |
Equity Method Investment, Long-term liabilities | 0 | 136,000 |
Equity Method Investment, Equity | 34,494,380 | 24,960,797 |
Equity Method Investment, Revenue | 4,107,686,492 | 3,773,258,524 |
Equity Method Investment, Net Income | $5,879,093 | $2,399,699 |
Debt_Financing_Details
Debt Financing (Details) (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Feb. 26, 2015 | Oct. 31, 2012 | |
Debt Instrument [Line Items] | ' | ' | ' |
Long-term Debt and Capital Lease Obligations | $45,759,137 | ' | $50,758,592 |
Current maturities of long-term debt | 4,527,410 | ' | 2,901,330 |
Long-Term Debt | 41,231,727 | ' | 47,857,262 |
Notes Payable to Banks [Member] | Fixed Rate Note [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Long-term Debt | 18,098,700 | ' | 20,233,688 |
Debt Instrument, Face Amount | 25,200,000 | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | 3.00% | ' | ' |
Debt Instrument, Interest Rate at Period End | 4.00% | ' | ' |
Debt Instrument, Balloon Payment Amount | ' | 15,191,000 | ' |
Debt Instrument, Periodic Payment, Principal | 168,000 | ' | ' |
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | ' | ' |
Notes Payable to Banks [Member] | Variable Rate Note [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Long-term Debt | 12,480,437 | ' | 15,344,904 |
Debt Instrument, Face Amount | 20,200,000 | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | 3.50% | ' | ' |
Debt Instrument, Interest Rate at Period End | 5.00% | ' | ' |
Debt Instrument, Excess Cash Flow Payments, Percentage | 50.00% | ' | ' |
Debt Instrument, Minimum Principal Reduction | 750,000 | ' | ' |
Debt Instrument, Balloon Payment Amount | ' | 11,729,000 | ' |
Debt Instrument, Interest Rate, Effective Percentage | 5.00% | ' | ' |
Capital Lease Obligations [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Capital Lease Obligations | 15,180,000 | ' | 15,180,000 |
Capital Lease Obligation, Interest Rate, Stated Percentage | 8.50% | ' | ' |
Capital Lease Obligations, Proceeds | 14,876,000 | ' | ' |
Capital Lease Obligations, Financing Costs | 304,000 | ' | ' |
Capital Lease Interest Payments, Percentage | 16.66% | ' | ' |
Capital Lease Principal Payments, Percentage | 8.33% | ' | ' |
Line of Credit [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | $5,000,000 | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | 3.50% | ' | ' |
Debt Instrument, Interest Rate at Period End | 3.74% | ' | ' |
Debt_Financing_Short_Term_Debt
Debt Financing Short Term Debt (Details) (USD $) | Oct. 31, 2013 |
Line of Credit [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Debt Instrument, Interest Rate at Period End | 3.74% |
Line of Credit Facility, Amount Outstanding | $0 |
Line of Credit Facility, Maximum Borrowing Capacity | 5,000,000 |
Letter of Credit [Member] | ' |
Line of Credit Facility [Line Items] | ' |
Line of Credit Facility, Amount Outstanding | 2,500,000 |
Line of Credit Facility, Maximum Borrowing Capacity | $5,600,000 |
Debt Instrument, Interest Rate, Stated Percentage | 1.75% |
Debt_Financing_Schedule_of_Mat
Debt Financing Schedule of Maturities of Long-Term Debt (Details) (USD $) | Oct. 31, 2013 | Oct. 31, 2012 |
Extinguishment of Debt [Line Items] | ' | ' |
Long-term Debt, Maturities, Repayments of Principal in 2014 | $4,527,410 | ' |
Long-term Debt, Maturities, Repayments of Principal in 2015 | 27,335,060 | ' |
Long-term Debt, Maturities, Repayments of Principal in 2016 | 1,510,000 | ' |
Long-term Debt, Maturities, Repayments of Principal in 2017 | 1,639,167 | ' |
Long-term Debt, Maturities, Repayments of Principal in 2018 | 1,778,333 | ' |
Long-term Debt, Maturities, Repayments of Principal in 2019 and thereafter | 8,969,167 | ' |
Long-term Debt and Capital Lease Obligations | $45,759,137 | $50,758,592 |
Leases_Details
Leases (Details) (USD $) | 12 Months Ended | ||
Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2010 | |
Transportation Equipment [Member] | ' | ' | ' |
Schedule of Operating and Capital Leased Assets [Line Items] | ' | ' | ' |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $122,400 | ' | ' |
Capital Leases, Future Minimum Payments Due, Next Twelve Months | 1,290,300 | ' | ' |
Operating Leases, Future Minimum Payments, Due in Two Years | 0 | ' | ' |
Capital Leases, Future Minimum Payments Due in Two Years | 2,573,633 | ' | ' |
Capital Leases, Future Minimum Payments Due in Three Years | 2,691,217 | ' | ' |
Capital Leases, Future Minimum Payments Due in Four Years | 2,692,033 | ' | ' |
Capital Leases, Future Minimum Payments Due in Five Years | 2,691,871 | ' | ' |
Capital Leases, Future Minimum Payments Due Thereafter | 10,994,221 | ' | ' |
Operating Leases, Future Minimum Payments Due | 122,400 | ' | ' |
Capital Leases, Future Minimum Payments Due | 22,933,275 | ' | ' |
Interest Expense, Lessee, Assets under Capital Lease | 7,753,275 | ' | ' |
Capital Leases, Future Minimum Payments, Interest Included in Payments | 15,180,000 | ' | ' |
Railroad Transportation Equipment [Member] | ' | ' | ' |
Schedule of Operating and Capital Leased Assets [Line Items] | ' | ' | ' |
Operating Leases, Rent Expense | $240,000 | $222,000 | $193,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Oct. 31, 2013 | Oct. 31, 2012 |
Income Taxes [Abstract] | ' | ' |
Assets | $100,266,588 | $101,697,433 |
Organizational and Start-Up Costs | 2,840,342 | 3,104,560 |
Book to Tax Depreciation | -27,846,650 | -16,420,732 |
Income Tax Basis of Assets | 75,260,280 | 88,381,261 |
Financial Statement Basis of Liabilities | 48,943,723 | 55,165,228 |
Interest Rate Swap | -894,106 | -1,197,016 |
Income Tax Basis of Liabilities | $48,049,617 | $53,968,212 |
Commitments_and_Contingencies_
Commitments and Contingencies Related Party (Details) (Related Party [Member], USD $) | 12 Months Ended |
Oct. 31, 2013 | |
Related Party Transaction [Line Items] | ' |
Related Party Transaction, Fees, Percentage of Total | 2.00% |
Maximum [Member] | ' |
Related Party Transaction [Line Items] | ' |
Related Party Transaction, Marketing Expense, Per Unit | 2 |
Minimum [Member] | ' |
Related Party Transaction [Line Items] | ' |
Related Party Transaction, Marketing Expense, Per Unit | 1.5 |
Commitments_and_Contingencies_1
Commitments and Contingencies Forward Contracts (Details) (Natural Gas [Member], USD $) | Oct. 31, 2013 |
Natural Gas [Member] | ' |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ' |
Purchase Commitment, Remaining Minimum Amount Committed | $849,000 |
Product Usage, percentage | 45.00% |
Commitments_and_Contingencies_2
Commitments and Contingencies Supply Commitment (Details) | 12 Months Ended |
Oct. 31, 2013 | |
gal | |
Ethanol [Member] | ' |
Supply Commitment [Line Items] | ' |
Supply Commitment, Remaining Minimum Amount Committed, Volume | 2,100,000 |
Distillers Grain [Member] | ' |
Supply Commitment [Line Items] | ' |
Supply Commitment, Remaining Minimum Amount Committed, Mass | 12,000 |
Commitments_and_Contingencies_3
Commitments and Contingencies Capital Lease (Details) (Machinery and Equipment [Member], USD $) | Oct. 31, 2013 |
Machinery and Equipment [Member] | ' |
Capital Leased Assets [Line Items] | ' |
Capital Lease Obligations | $2,500,000 |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 31, 2013 | Jul. 31, 2013 | Apr. 30, 2013 | Jan. 31, 2013 | Oct. 31, 2012 | Jul. 31, 2012 | Apr. 30, 2012 | Jan. 31, 2012 | Oct. 31, 2011 | Jul. 31, 2011 | Apr. 30, 2011 | Jan. 31, 2011 | Oct. 31, 2013 | Oct. 31, 2012 | Oct. 31, 2011 | |
Quarterly Financial Data (Unaudited) [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues | $38,040,275 | $44,801,707 | $42,638,894 | $43,201,533 | $43,808,800 | $39,240,928 | $33,771,321 | $39,827,576 | $43,575,832 | $43,133,745 | $37,394,958 | $36,269,498 | ' | ' | ' |
Gross Profit (Loss) | 5,307,418 | 2,611,765 | 1,986,332 | -529,082 | -679,542 | 185,590 | -980,751 | 2,337,847 | 3,972,986 | 2,342,598 | 2,434,143 | 2,084,072 | 9,376,433 | 863,144 | 10,833,799 |
Operating Income (Loss) | 4,853,689 | 2,211,508 | 1,549,396 | -1,057,604 | -1,092,588 | -203,503 | -1,467,528 | 1,822,732 | 3,596,781 | 1,865,282 | 1,962,542 | 1,646,780 | 7,556,989 | -940,887 | 9,071,385 |
Net Income (Loss) | $4,234,567 | $1,565,598 | $770,314 | ($1,746,420) | ($1,691,735) | ($1,068,852) | ($2,330,276) | $965,975 | $2,588,140 | $673,093 | $837,477 | $1,044,647 | $4,824,059 | ($4,124,888) | $5,143,357 |
Earnings Per Share, Basic and Diluted | $854.95 | $316.09 | $155.52 | ($352.60) | ($341.56) | ($215.80) | ($470.48) | $195.03 | $522.54 | $135.90 | $169.08 | $210.91 | $973.97 | ($832.81) | $1,038.43 |