Document_and_Entity_Informatio
Document and Entity Information Document (USD $) | 12 Months Ended | ||
Oct. 31, 2014 | Jan. 28, 2015 | Apr. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | HIGHWATER ETHANOL LLC | ||
Entity Central Index Key | 1371451 | ||
Current Fiscal Year End Date | -21 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Oct-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
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, 2014 | Oct. 31, 2013 |
Current Assets | ||
Cash and cash equivalents | $15,511,589 | $7,869,188 |
Derivative instruments | 257,934 | 558,309 |
Accounts receivable | 4,382,371 | 3,271,738 |
Inventories | 4,295,191 | 3,595,878 |
Prepaids and other | 55,650 | 143,307 |
Total current assets | 24,502,735 | 15,438,420 |
Property and Equipment | ||
Land and land improvements | 6,881,124 | 6,853,912 |
Buildings | 38,489,826 | 38,450,065 |
Office equipment | 589,727 | 367,508 |
Plant and process equipment | 64,015,750 | 60,890,831 |
Vehicles | 52,994 | 41,994 |
Construction in Progress | 317,477 | 5,672 |
Gross property and equipment | 110,346,898 | 106,609,982 |
Less accumulated depreciation | -32,862,880 | -26,297,641 |
Net property and equipment | 77,484,018 | 80,312,341 |
Other Assets | ||
Investments | 2,403,452 | 1,730,626 |
Restricted Marketable Securities | 0 | 1,556,139 |
Debt issuance costs, net | 231,347 | 570,590 |
Deposits | 191,457 | 191,457 |
Total other assets | 2,826,256 | 4,048,812 |
Total Assets | 104,813,009 | 99,799,573 |
Current Liabilities | ||
Accounts payable | 1,897,610 | 1,714,221 |
Accrued expenses | 1,034,907 | 553,942 |
Customer deposits | 0 | 22,317 |
Derivative instruments | 0 | 427,091 |
Current maturities of long-term debt | 4,298,766 | 4,527,410 |
Total Current Liabilities | 7,231,283 | 7,244,981 |
Long-Term Debt | 24,315,010 | 41,231,727 |
Commitments and Contingencies | ||
Members' Equity | ||
Members' equity, 4,953 units issued and outstanding | 73,266,716 | 51,322,865 |
Total Liabilities and Members’ Equity | $104,813,009 | $99,799,573 |
Balance_Sheets_Parenthetical
Balance Sheets Parenthetical | Oct. 31, 2014 | Oct. 31, 2013 |
Members' equity, 4,953 units outstanding | 4,953 | 4,953 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | ||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
Revenues | $139,597,173 | $168,682,409 | $156,648,625 |
Cost of Goods Sold | 111,405,819 | 159,305,976 | 155,785,481 |
Gross Profit | 28,191,354 | 9,376,433 | 863,144 |
Operating Expenses | 2,210,637 | 1,819,444 | 1,804,031 |
Operating Profit (Loss) | 25,980,717 | 7,556,989 | -940,887 |
Other Income (Expense) | |||
Interest income | 19,956 | 68,009 | 70,859 |
Other income | 248,208 | 23,930 | 67,757 |
Bond termination premium | -1,518,000 | 0 | 0 |
Interest expense | -3,311,128 | -4,048,031 | -4,282,900 |
Gain on interest rate swap | 427,091 | 769,925 | 741,480 |
Income from equity method investments | 87,332 | 453,237 | 218,803 |
Total other expense, net | -4,046,541 | -2,732,930 | -3,184,001 |
Net Income (Loss) | $21,934,176 | $4,824,059 | ($4,124,888) |
Weighted Average Units Oustanding | 4,953 | 4,953 | 4,953 |
Net Income (Loss) Per Unit | $4,428.46 | $973.96 | ($832.81) |
Distributions Per Unit | $0 | $0 | $100.95 |
Statement_of_Comprehensive_Inc
Statement of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
Net Income (Loss) | $21,934,176 | $4,824,059 | ($4,124,888) |
Other Comprehensive Income (Loss) | |||
Unrealized losses on restricted marketable securities, net of reclassification adjustment for loss recognized in net income | 9,675 | -33,399 | -51,478 |
Comprehensive Income (Loss) | $21,943,851 | $4,790,660 | ($4,176,366) |
Statement_of_Changes_in_Member
Statement of Changes in Members' Equity and Accumulated Other Comprehensive Income (Loss) (USD $) | Total | Members' Equity [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Stockholders' Equity, Total [Member] |
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 |
Amount reclassified from accumulated other comprehensive income - realized loss on restricted marketable securites | 0 | |||
Unrealized losses on restricted marketable securities, net of reclassification adjustment for loss recognized in net income | -51,478 | 0 | -51,478 | -51,478 |
Members' Equity at Oct. 31, 2012 | 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 | |||
Amount reclassified from accumulated other comprehensive income - realized loss on restricted marketable securites | 0 | |||
Unrealized losses on restricted marketable securities, net of reclassification adjustment for loss recognized in net income | -33,399 | 0 | -33,399 | -33,399 |
Members' Equity at Oct. 31, 2013 | 51,322,865 | 51,332,540 | -9,675 | 51,322,865 |
Net Income (Loss) | 21,934,176 | 21,934,176 | 0 | 21,934,176 |
Equity adjustment in investee | 0 | |||
Amount reclassified from accumulated other comprehensive income - realized loss on restricted marketable securites | -14,115 | 14,115 | 14,115 | |
Unrealized losses on restricted marketable securities, net of reclassification adjustment for loss recognized in net income | 9,675 | 0 | -4,440 | -4,440 |
Members' Equity at Oct. 31, 2014 | $73,266,716 | $73,266,716 | $0 | $73,266,716 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | ||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
Cash Flows from Operating Activities | |||
Net Income (Loss) | $21,934,176 | $4,824,059 | ($4,124,888) |
Adjustments to reconcile net income (loss) to net cash provided by operations | |||
Depreciation and amortization | 6,904,482 | 6,580,350 | 6,556,622 |
Income from equity method investments | -87,332 | -453,237 | 0 |
Interest payments made from restricted cash | 0 | 0 | 67,276 |
Non-cash patronage income | -197,494 | 0 | 0 |
Change in fair value of derivative instruments | 0 | 0 | 138,662 |
Increase in restricted short-term investments from net interest earned | 0 | 0 | -67,276 |
Change in assets and liabilities | |||
Restricted marketable securities | 28,484 | -56,697 | -134,472 |
Realized loss on marketable security | 14,115 | 0 | 0 |
Accounts receivable, including members | -1,110,633 | 1,656,053 | 2,566,060 |
Inventories | -699,313 | 550,548 | 21,444 |
Derivative instruments | -126,716 | -1,067,517 | -741,479 |
Prepaids and other | 87,657 | -74,675 | 9,195 |
Accounts payable | 183,389 | -27,162 | -554,736 |
Accrued expenses | 480,965 | -77,167 | 119,176 |
Customer Deposits | -22,317 | 22,317 | 0 |
Net cash provided by operating activities | 27,389,463 | 11,876,872 | 3,855,584 |
Cash Flows from Investing Activities | |||
Proceeds from sale of marketable securities | 1,523,215 | 0 | 0 |
Capital expenditures | -1,384,779 | -206,159 | -938,976 |
Proceeds from sale of property and equipment | 0 | 28,500 | 0 |
Investment in equity method investment | -388,000 | -262,566 | -454,309 |
Net cash used in investing activities | -249,564 | -440,225 | -1,393,285 |
Cash Flows from Financing Activities | |||
Payments on long-term debt | -54,786,562 | -4,999,455 | -3,957,986 |
Advances on long-term debt | 35,289,064 | 0 | 0 |
Member distributions | 0 | 0 | -500,000 |
Net cash used in financing activities | -19,497,498 | -4,999,455 | -4,457,986 |
Net Increase (Decrease) in Cash and Cash Equivalents | 7,642,401 | 6,437,192 | -1,995,687 |
Cash and cash equivalents – Beginning of Period | 7,869,188 | 1,431,996 | 3,427,683 |
Cash and cash equivalents – End of Period | 15,511,589 | 7,869,188 | 1,431,996 |
Supplemental Cash Flow Information | |||
Cash paid for interest expense | 2,695,085 | 3,635,989 | 3,871,613 |
Supplemental Disclosure of Noncash Financing and Investing Activities | |||
Unrealized gain (loss) on restricted marketable securities | 9,675 | -33,399 | -51,478 |
Capital Lease Financing | 2,352,137 | 0 | 0 |
Investment in RPMG included in accounts payable | 0 | 0 | 275,000 |
Investment in RPMG included in long-term liabilities | 0 | 0 | 222,652 |
Equity adjustment in investee | $0 | $0 | $136,772 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||
Oct. 31, 2014 | |||
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 co-products 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. | |||
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. | |||
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. | |||
Restricted Marketable Securities | |||
The Company maintained restricted marketable securities in debt securities as part of the capital lease financing agreements described in Note 9. The restricted marketable securities consisted 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, 2014 and 2013, the Company believed that such amounts would be collectible and an allowance was not considered necessary. | |||
Inventories | |||
Inventories consist 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, 2014 was $77,484,018. In accordance with the Company’s policy for evaluating impairment of long-lived assets described above, when a triggering event occurs 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, 2014 and 2013. | |||
Fair Value of Financial Instruments | |||
The carrying value of cash and cash equivalents, accounts receivable, and accounts payable, and other working capital items approximate fair value at October 31, 2014 and 2013 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. | |||
Equity Method 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, 2014, 2013 and 2012 is based on the investee’s results of operations for the twelve month periods ended September 30, 2014, 2013 and 2012. | |||
The Company is one of eight member owner investors in Lawrenceville Tank, LLC. The Company will have a 7% ownership, and Lawrenceville Tank, LLC will own and operate a trans load/tank facility in Atlanta, Georgia area. This will provide another area of opportunity for the Company’s ethanol production to be marketed by RPMG. The Company has invested total commitments of $385,000 as of October 31, 2014. | |||
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 2010. | |||
Railcar Damages Accrual | |||
In accordance with the railcar lease agreements, the Company is required to pay for damages considered to be in excess of normal wear and tear at the termination of the lease. The Company accrues the estimated cost for railcar damages over the term of the lease. | |||
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. | |||
Recent Accounting Pronouncement | |||
In May 2014, the FASB issued ASU No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, which is the Company’s first quarter of fiscal year 2018. Early application is not permitted. The new standard allows for the amendment to be applied either retrospectively to each prior reporting period presented or retrospectively as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures, including which transition method it will adopt. |
Uncertainties
Uncertainties | 12 Months Ended |
Oct. 31, 2014 | |
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, 2014 | |
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 has a revenue concentration in that its revenue is generated from the sales of primarily two products, ethanol and distillers grains. | |
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, 2014, 2013 and 2012 were $111,591,475, $130,623,053 and $123,398,657, respectively. Accounts receivable as of October 31, 2014 and 2013 were $3,315,756 and $2,312,825, respectively. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Oct. 31, 2014 | |||||||||||||||||
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 (liabilities) measured at fair value on a recurring basis. | |||||||||||||||||
Fair Value as of | Fair Value Measurement Using | ||||||||||||||||
31-Oct-14 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Derivative instrument - commodities | $ | (339,011 | ) | $ | (339,011 | ) | $ | — | $ | — | |||||||
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 | ) | $ | — | $ | — | |||||||
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 commodities 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, 2014 | ||||||||||
Restricted Marketable Securities [Abstract] | ||||||||||
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure | 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 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 included in accumulated other comprehensive income at, October 31, 2013 and October 31, 2012, respectively. The Company sold the marketable securities and had a realized loss of $14,115 during the year ended October 31, 2014. |
Inventories
Inventories | 12 Months Ended | ||||||||
Oct. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | INVENTORIES | ||||||||
Inventories consisted of the following at: | |||||||||
31-Oct-14 | 31-Oct-13 | ||||||||
Raw materials | $ | 1,653,015 | $ | 986,199 | |||||
Spare parts and supplies | 1,603,984 | 1,241,515 | |||||||
Work in process | 710,583 | 883,278 | |||||||
Finished goods | 327,609 | 484,886 | |||||||
Total | $ | 4,295,191 | $ | 3,595,878 | |||||
Derivative_Instruments
Derivative Instruments | 12 Months Ended | ||||||||||||
Oct. 31, 2014 | |||||||||||||
Derivative Instruments [Abstract] | |||||||||||||
Derivative Instruments | DERIVATIVE INSTRUMENTS | ||||||||||||
As of October 31, 2014, the Company had entered into corn and natural gas derivative instruments, 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, 2014 are not designated as effective hedges for accounting purposes. | |||||||||||||
Interest Rate Swap | |||||||||||||
As of October 31, 2013, the Company had an interest rate swap with a notional amount of approximately $16,582,000 that effectively fixed the interest rate for a corresponding amount of long term debt at 7.6%. On February 26, 2014 the Company terminated the interest rate swap. During the years ended October 31, 2014 and 2013, the company paid $481,159 and $794,795 respectively, including $234,550 upon termination. These amounts are included in interest expense. | |||||||||||||
Corn and Natural Gas Contracts | |||||||||||||
As of October 31, 2014, the Company has open positions for 590,000 bushels of corn and 35,000 dekatherms of natural gas. Management expects all open positions outstanding as of October 31, 2014 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 | |||||||||||
2014 | 2013 | ||||||||||||
Interest rate swap | Current liabilities | $ | — | $ | (427,091 | ) | |||||||
Corn, natural gas and ethanol contracts | |||||||||||||
In loss position | $ | (339,011 | ) | $ | (467,015 | ) | |||||||
Deposits with broker | 596,945 | 1,025,324 | |||||||||||
Current assets | $ | 257,934 | $ | 558,309 | |||||||||
Corn, natural gas and ethanol contracts totaling $467,015 as of October 31, 2013 were netted with deposits with broker, to be consistent with the 2014 presentation. | |||||||||||||
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 | 2014 | 2013 | 2012 | ||||||||||
Interest rate swap | Other income (expense) | $ | 427,091 | $ | 769,925 | $ | 741,480 | ||||||
Ethanol contracts | Revenues | (524,706 | ) | — | — | ||||||||
Corn contracts | Cost of goods sold | (810,856 | ) | 331,488 | 481,013 | ||||||||
Natural gas contracts | Cost of goods sold | (135,785 | ) | 41,198 | (419,021 | ) | |||||||
Investment_in_RPMG
Investment in RPMG | 12 Months Ended | ||||||
Oct. 31, 2014 | |||||||
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-14 | 30-Sep-13 | ||||||
Current assets | $ | 117,836,343 | $ | 138,356,633 | |||
Other assets | 1,240,202 | 688,613 | |||||
Current liabilities | 77,868,455 | 104,550,866 | |||||
Long-term liabilities | 16,000 | — | |||||
Members' equity | 41,192,090 | 34,494,380 | |||||
Revenue | 4,221,333,376 | 4,107,686,492 | |||||
Net income | 3,946,180 | 5,879,093 | |||||
Debt_Financing
Debt Financing | 12 Months Ended | |||||||
Oct. 31, 2014 | ||||||||
Debt Financing [Abstract] | ||||||||
Debt Financing | DEBT FINANCING | |||||||
Long-term debt consists of the following at: | ||||||||
31-Oct-14 | 31-Oct-13 | |||||||
Variable Rate Term Loan (AgStar) | $ | 26,509,288 | $ | — | ||||
Capital leases, see terms below | 2,104,488 | 15,180,000 | ||||||
Fixed rate note payable (FNBO) | — | 18,098,700 | ||||||
Variable rate note payable (FNBO) | — | 12,480,437 | ||||||
Total | 28,613,776 | 45,759,137 | ||||||
Less amounts due within one year | 4,298,766 | 4,527,410 | ||||||
Net long-term debt | $ | 24,315,010 | $ | 41,231,727 | ||||
Bank Financing | ||||||||
On February 27, 2014, the Company entered into a Credit Agreement with Ag Star Financial Services, PCA ("AgStar") for the purpose of refinancing the debt facility previously held by First National Bank of Omaha ("FNBO"). AgStar's Credit Agreement provides for a $20,000,000 Term Loan, a $5,000,000 Term Revolving Loan, and a $5,000,000 Revolving Line of Credit. The availability under the Term Revolving Loan supports and will be reduced by the issuance of letters of credit. The Company paid a $50,000 underwriting fee and a $75,000 commitment fee in addition to other standard closing costs in connection with the refinancing. | ||||||||
On February 26, 2014, in connection with and in preparation for the refinancing of the debt facility, the Company paid $7,639,971 towards the balance of FNBO's Variable Rate Note, leaving a combined balance due of $20,000,000 on FNBO's Fixed Rate Note and Variable Rate Note. The Company also terminated the interest rate swap. In connection with terminating the interest rate swap, the Company paid $234,550. | ||||||||
On September 22, 2014, the Company entered into an Amended and Restated Credit Agreement withAg Star which amended the Credit Agreement originally dated February 27, 2014. The purpose for the amendment was to refinance a portion of a credit arrangement previously held by U.S. Bank National Association, as trustee, and the City of Lamberton, Minnesota (the “City”). | ||||||||
The Amended and Restated Credit Agreement increases the Term Loan to $27,000,000 and also continues to provide the Company with a $5,000,000 Term Revolving Loan, and a $5,000,000 Revolving Line of Credit subject to terms described in the Amended and Restated Credit Agreement and summarized below. The Company paid a$25,000 underwriting fee and a $17,500 commitment fee and agreed to pay an annual facility fee of $10,000 to AgStar in addition to other standard closing costs in connection with the refinancing. | ||||||||
Term Loan | ||||||||
The Term Loan is for $27,000,000 with a variable interest rate that is the greater of the 30-day LIBOR rate plus 325 basis points with no minimum interest rate. Monthly principal payments are due on the Term Loan of approximately $321,000 plus accrued interest. Payments are based upon a seven year amortization and the Term Loan is fully amortized. The outstanding balance on this note was $26,509,288 at October 31, 2014. The Company may convert the Term Loan to a fixed rate loan, subject to certain conditions as described in the Amended and Restated Credit Agreement and with the consent of AgStar. | ||||||||
Term Revolving Loan | ||||||||
The Term Revolving Loan is for up to $5,000,000 with a variable interest rate that is the 30-day LIBOR rate plus 325 basis points with no minimum interest rate. The Term Revolving Loan may be advanced, repaid and re-borrowed during the term. Monthly interest payments are due on the Term Revolving Loan. Payment of all amounts outstanding is due on September 22, 2021. The outstanding balance was $0 at October 31, 2014. As of October 31, 2014, the Company has $2,500,000 in letters of credit outstanding which reduce the amount available under the Term Revolving Loan. The Company pays interest at a rate of 1.5% on amounts outstanding for the letters of credit. | ||||||||
Revolving Line of Credit | ||||||||
The Company has a Revolving Line of Credit available equal to the amount of the Borrowing Base, with a maximum limit of $5,000,000. The Borrowing Base will vary and may at times be less than $5,000,000. The Revolving Line of Credit expires on February 26, 2015 and accrues interest at the 30-day LIBOR rate plus 325 basis points with no minimum interest rate. Monthly interest payments are due on the Revolving Line of Credit. The outstanding balance was $0 at October 31, 2014. | ||||||||
Covenants and other Miscellaneous Terms | ||||||||
The loan facility with AgStar is secured by substantially all business assets. The Company executed a mortgage creating a first lien on its real estate and plant and a security interest in all personal property located on the premises and assigned all rents and leases to property, marketing contracts, risk management services contract, and natural gas, electricity, water service and grain procurement agreements. | ||||||||
The Company is also subject to various financial and non-financial covenants that limit distributions and debt and require minimum debt service coverage, tangible net worth, and working capital requirements. The fixed charge coverage ratio is no less than 1.15:1.00 and is measured annually by comparing adjusted EBITDA to scheduled payments of principal and interest plus capital expenditures and distributions. The minimum net worth is no less than $42,000,000, which is calculated as the excess of total assets excluding various disallowed assets per the Amended and Restated Credit Agreement over total liabilities, and is measured quarterly. The minimum working capital is $8,250,000, which is calculated as current assets plus the amount available for drawing under our Term Revolving Loan, and undrawn amounts on outstanding letters of credit less current liabilities, and is measured quarterly. | ||||||||
The Company is limited to annual capital expenditures of $2,000,000 without prior approval, incurring additional debt over certain amounts without prior approval, and making additional investments as described in the Amended and Restated Credit Agreement, and is also prohibited from making distributions to members in excess of 50% of net income in a given year without prior approval. | ||||||||
The Company is also required to pay unused commitment fees for the Term Revolving Loan and the Revolving Line of Credit as defined in the Amended and Restated Credit Agreement. | ||||||||
Capital Leases | ||||||||
City of Lamberton, Minnesota | ||||||||
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 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%. Monthly capital lease payments for principal were scheduled to begin on November 25, 2014. The capital lease included an option to purchase the equipment at fair market value at the end of the lease term. | ||||||||
On October 2, 2014, the Company paid the capital lease in full, retired the bonds and purchased the equipment. The Company paid a premium in the amount of $1,518,000in connection with the termination of the capital lease. | ||||||||
Butamax | ||||||||
The Company entered into a series of related definitive agreements, dated September 26, 2013, with Butamax which include an Easement for Construction and Process Demonstration Agreement, an Equipment Lease Agreement, a Technology License Agreement, a Technology Demonstration Risk Reduction Agreement and a Security Agreement (collectively, the "Agreements") pursuant to which Butamax has agreed to construct, install and lease its corn oil separation system and license to the Company its proprietary, patent-protected corn oil separation technology. Pursuant to the Agreements, the Company agreed to give Butamax access to the plant in order to construct, install, operate, test and commercially validate a corn oil separation system. Butamax retains ownership of the corn oil separation system and technology but agrees to lease it to the Company for a term of 120 months subject to Butamax's right to remove the system if the Company is in breach of the Agreements. The term of the lease may also be extended or terminated pursuant to the terms of the Agreements. The Company is responsible for repairs and maintenance of the system and bear the risk of loss. In return, the Company agrees to payment of certain license fees which are subject to being reduced under the terms of the Agreements if the corn oil separation system does not meet certain performance goals. The Agreements provide that 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 of the Agreements. The Company granted a security interest to Butamax in the corn oil separation system to secure its obligations under the Agreements. Pursuant to the Agreements, the Company agreed, subject to certain obligations of confidentiality, to provide Butamax with Company information on a monthly basis including business and financial information and have granted Butamax the option to have a representative present in board and committee meetings as an observer. The Company also agreed to give Butamax notice in the event of an issuance or sale of membership interests or convertible debt instruments. The Company recorded this as a capital lease in April 2014, and the balance as of October 31, 2014 was $2,104,488. | ||||||||
The estimated maturities of the long-term debt at October 31, 2014 are as follows: | ||||||||
2015 | $ | 4,298,766 | ||||||
2016 | 4,651,284 | |||||||
2017 | 4,404,487 | |||||||
2018 | 3,857,160 | |||||||
2019 | 3,857,160 | |||||||
2020 and thereafter | 7,544,919 | |||||||
Long-term debt | $ | 28,613,776 | ||||||
Leases
Leases | 12 Months Ended | ||||||
Oct. 31, 2014 | |||||||
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, 2014, 2013 and 2012 was approximately $218,000, $240,000, and $222,000 respectively. | |||||||
Future minimum lease payments under the leases are as follows at October 31, 2014: | |||||||
Operating | Capital | ||||||
2015 | $ | 295,920 | $ | 833,328 | |||
2016 | 295,920 | 833,328 | |||||
2017 | 295,920 | 555,569 | |||||
2018 | 295,920 | — | |||||
2019 | 197,280 | — | |||||
Total | $ | 1,380,960 | 2,222,225 | ||||
Less amount representing interest | 117,737 | ||||||
Present value of minimum lease payments (included in note 9) | $ | 2,104,488 | |||||
Members_Equity
Members' Equity | 12 Months Ended |
Oct. 31, 2014 | |
Members' Equity [Abstract] | |
Members' Equity | MEMBERS' EQUITY |
The Company has one class of membership units, and is authorized to issue up to 10,000 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, 2014 | |||||||||
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, 2014 | October 31, 2013 | ||||||||
Financial statement basis of total assets | $ | 104,813,009 | $ | 99,799,573 | |||||
Derivative instruments - commodities | 339,011 | 467,015 | |||||||
Organizational and start-up costs | 2,576,124 | 2,840,342 | |||||||
Book to tax depreciation | (25,584,226 | ) | (27,846,650 | ) | |||||
Income tax basis of total assets | $ | 82,143,918 | $ | 75,260,280 | |||||
The differences between the financial statement basis and tax basis of the Company's liabilities are estimated as follows: | |||||||||
October 31, 2014 | October 31, 2013 | ||||||||
Financial statement basis of total liabilities | $ | 31,546,293 | $ | 48,476,708 | |||||
Less: Interest rate swap | — | (427,091 | ) | ||||||
Income tax basis of total liabilities | $ | 31,546,293 | $ | 48,049,617 | |||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Oct. 31, 2014 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES |
Marketing Agreements | |
The Company has an ethanol marketing agreement with a 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. 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. | |
The Company has a distillers grains marketing agreement with a marketer to market all the dried distillers grains produced at the plant. Under the agreement the marketer charges 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. The agreement will remain in effect unless otherwise terminated by either party with 120 days notice. Under the agreement, the marketer is responsible for all transportation arrangements for the distribution of the dried distillers grains. The Company markets and sells its modified and wet distillers grains. | |
The Company has a crude corn oil marketing agreement with a marketer to market all corn oil to be produced at the plant. Under the agreement, the marketer 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 corn oil sold, the Company will receive the actual price received from buyers less a marketing fee, actual freight and transportation costs and certain taxes related to the purchase, delivery or sale. The Company agrees to provide corn oil meeting certain specifications as provided in the agreement and the agreement provides for a process for rejection of nonconforming corn oil. The agreement automatically renews for successive one-year terms unless terminated in accordance with the agreement. | |
Grain Procurement Contract | |
The Company has 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 | |
At October 31, 2014, the Company has approximately 22,600 tons of forward dried distiller grains sales contracts and 957,540 pounds of forward fixed price corn oil sales contracts at various fixed prices for various delivery periods through August 2015 and December 2015, respectively. At October 31, 2014, the Company also has 438,200 MMBTUs of forward contracts for natural gas purchases for various delivery periods through April 2015, which represents approximately 61.1% of the Company’s projected usage for the corresponding time period. |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||||
Oct. 31, 2014 | ||||||||||||||||
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, 2014 | ||||||||||||||||
Revenues | $ | 38,587,712 | $ | 32,042,415 | $ | 37,172,560 | $ | 31,794,486 | ||||||||
Gross profit | 9,200,333 | 7,044,814 | 5,245,115 | 6,701,092 | ||||||||||||
Operating income | 8,551,490 | 6,494,307 | 4,776,195 | 6,158,725 | ||||||||||||
Net income | 7,753,542 | 5,985,350 | 4,289,316 | 3,905,968 | ||||||||||||
Basic and diluted earnings per unit | 1,565.42 | 1,208.43 | 866 | 788.61 | ||||||||||||
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 | ) | |||||||||
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, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT |
On November 19, 2014 the board of governors declared a cash distribution of $1,125 per membership unit to the holders of record as of the close of business on November 19, 2014, for a total distribution of $5,572,125. The distribution was paid on December 16, 2014. |
Accounting_Policies
Accounting Policies | 12 Months Ended | ||
Oct. 31, 2014 | |||
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 Cash Equivalents | 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. | |||
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. | |||
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. | |||
Restricted Marketable Securities | Restricted Marketable Securities | ||
The Company maintained restricted marketable securities in debt securities as part of the capital lease financing agreements described in Note 9. The restricted marketable securities consisted 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, 2014 and 2013, the Company believed that such amounts would be collectible and an allowance was not considered necessary. | |||
Inventories | Inventories | ||
Inventories consist 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, 2014 was $77,484,018. In accordance with the Company’s policy for evaluating impairment of long-lived assets described above, when a triggering event occurs 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, 2014 and 2013. | |||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||
The carrying value of cash and cash equivalents, accounts receivable, and accounts payable, and other working capital items approximate fair value at October 31, 2014 and 2013 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. | |||
Equity Method Investments | Equity Method 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, 2014, 2013 and 2012 is based on the investee’s results of operations for the twelve month periods ended September 30, 2014, 2013 and 2012. | |||
The Company is one of eight member owner investors in Lawrenceville Tank, LLC. The Company will have a 7% ownership, and Lawrenceville Tank, LLC will own and operate a trans load/tank facility in Atlanta, Georgia area. This will provide another area of opportunity for the Company’s ethanol production to be marketed by RPMG. The Company has invested total commitments of $385,000 as of October 31, 2014. | |||
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 (Loss) 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 2010. | |||
Railcar, Damages Accrual | Railcar Damages Accrual | ||
In accordance with the railcar lease agreements, the Company is required to pay for damages considered to be in excess of normal wear and tear at the termination of the lease. The Company accrues the estimated cost for railcar damages over the term of the lease. | |||
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. | |||
Segment Reporting | 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. | |||
Recent Accounting Pronouncement | Recent Accounting Pronouncement | ||
In May 2014, the FASB issued ASU No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, which is the Company’s first quarter of fiscal year 2018. Early application is not permitted. The new standard allows for the amendment to be applied either retrospectively to each prior reporting period presented or retrospectively as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures, including which transition method it will adopt. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies Property and Equiment (Tables) | 12 Months Ended | ||
Oct. 31, 2014 | |||
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, 2014 | |||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides information on those assets (liabilities) measured at fair value on a recurring basis. | ||||||||||||||||
Fair Value as of | Fair Value Measurement Using | ||||||||||||||||
31-Oct-14 | Level 1 | Level 2 | Level 3 | ||||||||||||||
Derivative instrument - commodities | $ | (339,011 | ) | $ | (339,011 | ) | $ | — | $ | — | |||||||
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 | ) | $ | — | $ | — | |||||||
Restricted_Marketable_Securiti1
Restricted Marketable Securities Restricted Marketable Securites (Tables) | 12 Months Ended | |||||||||
Oct. 31, 2014 | ||||||||||
Restricted Marketable Securities [Abstract] | ||||||||||
Marketable Securities [Table Text Block] | 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 | ||||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | ||||||||
Oct. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventory | |||||||||
31-Oct-14 | 31-Oct-13 | ||||||||
Raw materials | $ | 1,653,015 | $ | 986,199 | |||||
Spare parts and supplies | 1,603,984 | 1,241,515 | |||||||
Work in process | 710,583 | 883,278 | |||||||
Finished goods | 327,609 | 484,886 | |||||||
Total | $ | 4,295,191 | $ | 3,595,878 | |||||
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 12 Months Ended | ||||||||||||
Oct. 31, 2014 | |||||||||||||
Derivative Instruments [Abstract] | |||||||||||||
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position | |||||||||||||
Instrument | Balance Sheet location | Liabilities | |||||||||||
2014 | 2013 | ||||||||||||
Interest rate swap | Current liabilities | $ | — | $ | (427,091 | ) | |||||||
Corn, natural gas and ethanol contracts | |||||||||||||
In loss position | $ | (339,011 | ) | $ | (467,015 | ) | |||||||
Deposits with broker | 596,945 | 1,025,324 | |||||||||||
Current assets | $ | 257,934 | $ | 558,309 | |||||||||
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position | |||||||||||||
Statement of | Year Ended October 31 | ||||||||||||
Operations location | 2014 | 2013 | 2012 | ||||||||||
Interest rate swap | Other income (expense) | $ | 427,091 | $ | 769,925 | $ | 741,480 | ||||||
Ethanol contracts | Revenues | (524,706 | ) | — | — | ||||||||
Corn contracts | Cost of goods sold | (810,856 | ) | 331,488 | 481,013 | ||||||||
Natural gas contracts | Cost of goods sold | (135,785 | ) | 41,198 | (419,021 | ) | |||||||
Investment_in_RPMG_Tables
Investment in RPMG (Tables) | 12 Months Ended | ||||||
Oct. 31, 2014 | |||||||
Investments [Abstract] | |||||||
Schedule of Equity Method Investments | |||||||
30-Sep-14 | 30-Sep-13 | ||||||
Current assets | $ | 117,836,343 | $ | 138,356,633 | |||
Other assets | 1,240,202 | 688,613 | |||||
Current liabilities | 77,868,455 | 104,550,866 | |||||
Long-term liabilities | 16,000 | — | |||||
Members' equity | 41,192,090 | 34,494,380 | |||||
Revenue | 4,221,333,376 | 4,107,686,492 | |||||
Net income | 3,946,180 | 5,879,093 | |||||
Debt_Financing_Tables
Debt Financing (Tables) | 12 Months Ended | |||||||
Oct. 31, 2014 | ||||||||
Debt Financing [Abstract] | ||||||||
Schedule of Long-term Debt | ||||||||
31-Oct-14 | 31-Oct-13 | |||||||
Variable Rate Term Loan (AgStar) | $ | 26,509,288 | $ | — | ||||
Capital leases, see terms below | 2,104,488 | 15,180,000 | ||||||
Fixed rate note payable (FNBO) | — | 18,098,700 | ||||||
Variable rate note payable (FNBO) | — | 12,480,437 | ||||||
Total | 28,613,776 | 45,759,137 | ||||||
Less amounts due within one year | 4,298,766 | 4,527,410 | ||||||
Net long-term debt | $ | 24,315,010 | $ | 41,231,727 | ||||
Schedule of Maturities of Long-term Debt | ||||||||
2015 | $ | 4,298,766 | ||||||
2016 | 4,651,284 | |||||||
2017 | 4,404,487 | |||||||
2018 | 3,857,160 | |||||||
2019 | 3,857,160 | |||||||
2020 and thereafter | 7,544,919 | |||||||
Long-term debt | $ | 28,613,776 | ||||||
Leases_Tables
Leases (Tables) | 12 Months Ended | ||||||
Oct. 31, 2014 | |||||||
Leases [Abstract] | |||||||
Schedule of Future Minimum Lease Payments for Capital and Operating Leases | |||||||
Operating | Capital | ||||||
2015 | $ | 295,920 | $ | 833,328 | |||
2016 | 295,920 | 833,328 | |||||
2017 | 295,920 | 555,569 | |||||
2018 | 295,920 | — | |||||
2019 | 197,280 | — | |||||
Total | $ | 1,380,960 | 2,222,225 | ||||
Less amount representing interest | 117,737 | ||||||
Present value of minimum lease payments (included in note 9) | $ | 2,104,488 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Oct. 31, 2014 | |||||||||
Income Taxes [Abstract] | |||||||||
Schedule of Income Taxes | |||||||||
October 31, 2014 | October 31, 2013 | ||||||||
Financial statement basis of total assets | $ | 104,813,009 | $ | 99,799,573 | |||||
Derivative instruments - commodities | 339,011 | 467,015 | |||||||
Organizational and start-up costs | 2,576,124 | 2,840,342 | |||||||
Book to tax depreciation | (25,584,226 | ) | (27,846,650 | ) | |||||
Income tax basis of total assets | $ | 82,143,918 | $ | 75,260,280 | |||||
The differences between the financial statement basis and tax basis of the Company's liabilities are estimated as follows: | |||||||||
October 31, 2014 | October 31, 2013 | ||||||||
Financial statement basis of total liabilities | $ | 31,546,293 | $ | 48,476,708 | |||||
Less: Interest rate swap | — | (427,091 | ) | ||||||
Income tax basis of total liabilities | $ | 31,546,293 | $ | 48,049,617 | |||||
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Oct. 31, 2014 | ||||||||||||||||
Quarterly Financial Data (Unaudited) [Abstract] | ||||||||||||||||
Schedule of Quarterly Financial Information | ||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
Fiscal Year Ended October 31, 2014 | ||||||||||||||||
Revenues | $ | 38,587,712 | $ | 32,042,415 | $ | 37,172,560 | $ | 31,794,486 | ||||||||
Gross profit | 9,200,333 | 7,044,814 | 5,245,115 | 6,701,092 | ||||||||||||
Operating income | 8,551,490 | 6,494,307 | 4,776,195 | 6,158,725 | ||||||||||||
Net income | 7,753,542 | 5,985,350 | 4,289,316 | 3,905,968 | ||||||||||||
Basic and diluted earnings per unit | 1,565.42 | 1,208.43 | 866 | 788.61 | ||||||||||||
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 | ) | |||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Oct. 31, 2014 | Oct. 31, 2013 | |
gal | ||
Product Information [Line Items] | ||
Property, Plant and Equipment, Net | 77,484,018 | $80,312,341 |
Renewable Fuels Marketing Group (RPMG) [Member] | ||
Product Information [Line Items] | ||
Equity Method Investment, Ownership Percentage | 7.00% | |
Lawrenceville Tank, LLC [Member] | ||
Product Information [Line Items] | ||
Equity Method Investment, Ownership Percentage | 7.00% | |
Ethanol [Member] | ||
Product Information [Line Items] | ||
Annual Production Capacity | 50,000,000 | |
Lawrenceville Tank, LLC [Member] | ||
Product Information [Line Items] | ||
Equity Method Investments, Total Amount Committed | 385,000 |
Property_and_Equipment_Details
Property and Equipment (Details) | 12 Months Ended |
Oct. 31, 2014 | |
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, 2014 | |
Summary of Significant Accounting Policies [Abstract] | |
Cumulative Probability, Percent | 50.00% |
Concentrations_Details
Concentrations (Details) (Affiliated Entity [Member], USD $) | 12 Months Ended | ||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
Affiliated Entity [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue from Related Parties | $111,591,475 | $130,623,053 | $123,398,657 |
Accounts Receivable, Related Parties, Current | $3,315,756 | $2,312,825 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Fair Value, Measurements, Recurring [Member], USD $) | Oct. 31, 2014 | Oct. 31, 2013 |
Restricted Marketable Securities, Long-Term [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities, Restricted | $1,556,139 | |
Restricted Marketable Securities, Long-Term [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 | |
Restricted Marketable Securities, Long-Term [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities, Restricted | 0 | |
Restricted Marketable Securities, Long-Term [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable Securities, Restricted | 0 | |
Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Assets | -427,091 | |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Assets | 0 | |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Assets | -427,091 | |
Interest Rate Swap [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Assets | 0 | |
Commodity [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Assets | -339,011 | -467,015 |
Commodity [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Assets | -339,011 | -467,015 |
Commodity [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Assets | 0 | 0 |
Commodity [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 Restricted Marketable Securities (Details) (USD $) | 12 Months Ended | ||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax | ($9,675) | $23,724 | |
Available-for-sale Securities, Gross Realized Gain (Loss), Excluding Other than Temporary Impairments | -14,115 | ||
Restricted marketable securities, Long-term municipal obligations[Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Restricted marketable securities, Amortized Cost Basis | 1,565,814 | ||
Accumulated Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax | -9,675 | ||
Restricted marketable securities, Fair Value | $1,556,139 |
Inventories_Details
Inventories (Details) (USD $) | Oct. 31, 2014 | Oct. 31, 2013 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $1,653,015 | $986,199 |
Spare parts and supplies | 1,603,984 | 1,241,515 |
Work in Process | 710,583 | 883,278 |
Finished Goods | 327,609 | 484,886 |
Inventories | $4,295,191 | $3,595,878 |
Derivative_Instruments_Balance
Derivative Instruments Balance Sheet (Details) (USD $) | Oct. 31, 2014 | Oct. 31, 2013 |
Derivatives, Fair Value [Line Items] | ||
Deposits with broker | $596,945 | $1,025,324 |
Derivative instruments | 257,934 | 558,309 |
Interest Rate Swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 16,582,000 | |
Derivative, Fixed Interest Rate | 7.60% | |
Interest Rate Swap [Member] | Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Current | 0 | 427,091 |
Corn [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Nonmonetary Notional Amount of Price Risk Derivative Instruments Not Designated as Hedging Instruments, Purchase Contracts | 590,000 | |
Natural Gas [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Nonmonetary Notional Amount of Price Risk Derivative Instruments Not Designated as Hedging Instruments, Purchase Contracts | 35,000 | |
Commodity Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Current | $339,011 | $467,015 |
Derivative_Instruments_Income_
Derivative Instruments Income Statement (Details) (USD $) | 12 Months Ended | ||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Interest Expense | $3,311,128 | $4,048,031 | $4,282,900 |
Interest Paid on Termination | 0 | 0 | 67,276 |
Interest Rate Swap [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Interest Expense | 481,159 | 794,795 | |
Interest Paid on Termination | 234,550 | ||
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Other Income [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | 427,091 | 769,925 | 741,480 |
Not Designated as Hedging Instrument [Member] | Ethanol [Member] | Revenues [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | -524,706 | 0 | 0 |
Not Designated as Hedging Instrument [Member] | Corn [Member] | Cost of Sales [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | -810,856 | 331,488 | 481,013 |
Not Designated as Hedging Instrument [Member] | Natural Gas [Member] | Cost of Sales [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative Instruments, Gain (Loss) Recognized in Income, Net | ($135,785) | $41,198 | ($419,021) |
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 | $117,836,343 | $138,356,633 |
Equity Method Investment, Other Assets | 1,240,202 | 688,613 |
Equity Method Investment, Current Liabilities | 77,868,455 | 104,550,866 |
Equity Method Investment, Long-term liabilities | 16,000 | 0 |
Equity Method Investment, Equity | 41,192,090 | 34,494,380 |
Equity Method Investment, Revenue | 4,221,333,376 | 4,107,686,492 |
Equity Method Investment, Net Income | $3,946,180 | $5,879,093 |
Debt_Financing_Details
Debt Financing (Details) (USD $) | 12 Months Ended | ||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
Debt Instrument [Line Items] | |||
Long-term Debt | $28,613,776 | ||
Interest Paid on Termination | 0 | 0 | 67,276 |
Capital Lease Obligations | 2,104,488 | 15,180,000 | |
Long-term Debt and Capital Lease Obligations | 28,613,776 | 45,759,137 | |
Long-term Debt and Capital Lease Obligations, Current | 4,298,766 | 4,527,410 | |
Long-term Debt, Excluding Current Maturities | 24,315,010 | 41,231,727 | |
Payments for Underwriting Expense | 25,000 | ||
Line of Credit Facility, Commitment Fee Amount | 17,500 | ||
Expense Related to Distribution or Servicing and Underwriting Fees | 10,000 | ||
Debt Instrument, Restrictive Covenants | 0.5 | ||
Ratio of Indebtedness to Net Capital | 1.15 | ||
Gain (Loss) on Contract Termination | 1,518,000 | 0 | 0 |
AgStar Financial Services, PCA [Member] | |||
Debt Instrument [Line Items] | |||
Payments for Underwriting Expense | 50,000 | ||
Debt Instrument, Fee Amount | 75,000 | ||
Minimum Net Worth Required for Compliance | 42,000,000 | ||
Working Capital Requirement | 8,250,000 | ||
Debt Instrument, Annual Capital Expenditure Limit | 2,000,000 | ||
AgStar Financial Services, PCA [Member] | Letter of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||
Letters of Credit Outstanding, Amount | 2,500,000 | ||
Line of Credit Facility, Interest Rate at Period End | 1.50% | ||
AgStar Financial Services, PCA [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||
Line of Credit Facility, Maximum Borrowing Capacity | 5,000,000 | ||
Line of Credit, Current | 0 | ||
Notes Payable to Banks [Member] | Variable Rate Note [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 20,000,000 | ||
Debt Instrument, Principal Reduction Payment | 7,639,971 | ||
Notes Payable to Banks [Member] | AgStar Financial Services, PCA [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||
Debt Instrument, Face Amount | 27,000,000 | ||
Debt Instrument, Periodic Payment, Principal | 321,000 | ||
Long-term Debt | 26,509,288 | ||
Notes Payable to Banks [Member] | AgStar Financial Services, PCA [Member] | Term Loan [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 20,000,000 | ||
Long-term Debt | 26,509,288 | 0 | |
Notes Payable to Banks [Member] | AgStar Financial Services, PCA [Member] | Term Revolving Loan [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | 5,000,000 | ||
Long-term Line of Credit, Noncurrent | 0 | ||
Notes Payable to Banks [Member] | First National Bank of Omaha (FNBO) [Member] | Fixed Rate Note [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 0 | 18,098,700 | |
Notes Payable to Banks [Member] | First National Bank of Omaha (FNBO) [Member] | Variable Rate Note [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt | 0 | 12,480,437 | |
Capital Lease Obligations [Member] | |||
Debt Instrument [Line Items] | |||
Capital Lease Obligations | 15,180,000 | ||
Capital Lease, Implicit Interest Rate | 8.50% | ||
Interest Rate Swap [Member] | |||
Debt Instrument [Line Items] | |||
Interest Paid on Termination | $234,550 |
Debt_Financing_Short_Term_Debt
Debt Financing Short Term Debt (Details) (AgStar Financial Services, PCA [Member], USD $) | Oct. 31, 2014 |
Letter of Credit [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Interest Rate at Period End | 1.50% |
Revolving Credit Facility [Member] | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 5,000,000 |
Debt_Financing_Schedule_of_Mat
Debt Financing Schedule of Maturities of Long-Term Debt (Details) (USD $) | Oct. 31, 2014 |
Debt Financing [Abstract] | |
Long-term Debt, Maturities, Repayments of Principal in Next Rolling Twelve Months | $4,298,766 |
Long-term Debt, Maturities, Repayments of Principal in Rolling Year Two | 4,651,284 |
Long-term Debt, Maturities, Repayments of Principal in Rolling year Three | 4,404,487 |
Long-term Debt, Maturities, Repayments of Principal in Rolling Year Four | 3,857,160 |
Long-term Debt, Maturities, Repayments of Principal in Rolling Year Five | 3,857,160 |
Long-term Debt, Maturities, Repayments of Principal in Rolling after Year Five | 7,544,919 |
Long-term Debt and Capital Lease Obligations | $28,613,776 |
Debt_Financing_Schedule_of_Lon
Debt Financing Schedule of Long Term Capital Leases (Details) (Transportation Equipment [Member], USD $) | Oct. 31, 2014 |
Transportation Equipment [Member] | |
Capital Leased Assets [Line Items] | |
Capital Leases, Future Minimum Payments, Interest Included in Payments | $2,104,488 |
Leases_Details
Leases (Details) (USD $) | 12 Months Ended | ||
Oct. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
Transportation Equipment [Member] | |||
Schedule of Operating and Capital Leased Assets [Line Items] | |||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $295,920 | ||
Capital Leases, Future Minimum Payments Due, Next Twelve Months | 833,328 | ||
Operating Leases, Future Minimum Payments, Due in Two Years | 295,920 | ||
Capital Leases, Future Minimum Payments Due in Two Years | 833,328 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 295,920 | ||
Capital Leases, Future Minimum Payments Due in Three Years | 555,569 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 295,920 | ||
Capital Leases, Future Minimum Payments Due in Four Years | 0 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 197,280 | ||
Capital Leases, Future Minimum Payments Due in Five Years | 0 | ||
Operating Leases, Future Minimum Payments Due | 1,380,960 | ||
Capital Leases, Future Minimum Payments Due | 2,222,225 | ||
Less amount representing interest | 117,737 | ||
Present value of minimum lease payments (included in note 9) | 2,104,488 | ||
Railroad Transportation Equipment [Member] | |||
Schedule of Operating and Capital Leased Assets [Line Items] | |||
Operating Leases, Rent Expense | $218,000 | $240,000 | $222,000 |
Members_Equity_Members_Equity_
Members' Equity Members' Equity (Details) | Oct. 31, 2014 |
Members' Equity [Abstract] | |
Common Stock, Shares Authorized | 10,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | Oct. 31, 2014 | Oct. 31, 2013 |
Income Taxes [Abstract] | ||
Financial statement basis of total assets | $104,813,009 | $99,799,573 |
Derivative instruments - commodities | 339,011 | 467,015 |
Organizational and start-up costs | 2,576,124 | 2,840,342 |
Book to tax depreciation | -25,584,226 | -27,846,650 |
Income tax basis of total assets | 82,143,918 | 75,260,280 |
Financial statement basis of total liabilities | 31,546,293 | 48,476,708 |
Less: Interest rate swap | 0 | -427,091 |
Income tax basis of total liabilities | $31,546,293 | $48,049,617 |
Commitments_and_Contingencies_
Commitments and Contingencies Related Party (Details) (Related Party [Member], USD $) | 12 Months Ended |
Oct. 31, 2014 | |
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, 2014 |
Natural Gas [Member] | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Purchase Commitment, Remaining Minimum Amount Committed | $438,200 |
Product Usage, percentage | 61.10% |
Commitments_and_Contingencies_2
Commitments and Contingencies Supply Commitment (Details) | Oct. 31, 2014 |
T | |
Distillers Grain [Member] | |
Supply Commitment [Line Items] | |
Supply Commitment, Remaining Minimum Amount Committed, Mass | 22,600 |
Corn Oil [Member] | |
Supply Commitment [Line Items] | |
Supply Commitment, Remaining Minimum Amount Committed, Mass | 957,540 |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | 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, 2014 | Oct. 31, 2013 | Oct. 31, 2012 | |
Quarterly Financial Data (Unaudited) [Abstract] | |||||||||||||||
Revenues | $31,794,486 | $37,172,560 | $32,042,415 | $38,587,712 | $38,040,275 | $44,801,707 | $42,638,894 | $43,201,533 | $43,808,800 | $39,240,928 | $33,771,321 | $39,827,576 | |||
Gross Profit (Loss) | 6,701,092 | 5,245,115 | 7,044,814 | 9,200,333 | 5,307,418 | 2,611,765 | 1,986,332 | -529,082 | -679,542 | 185,590 | -980,751 | 2,337,847 | 28,191,354 | 9,376,433 | 863,144 |
Operating Income (Loss) | 6,158,725 | 4,776,195 | 6,494,307 | 8,551,490 | 4,853,689 | 2,211,508 | 1,549,396 | -1,057,604 | -1,092,588 | -203,503 | -1,467,528 | 1,822,732 | 25,980,717 | 7,556,989 | -940,887 |
Net Income (Loss) | $3,905,968 | $4,289,316 | $5,985,350 | $7,753,542 | $4,234,567 | $1,565,598 | $770,314 | ($1,746,420) | ($1,691,735) | ($1,068,852) | ($2,330,276) | $965,975 | $21,934,176 | $4,824,059 | ($4,124,888) |
Basic and diluted earnings per unit | $788.61 | $866 | $1,208.43 | $1,565.42 | $854.95 | $316.09 | $155.52 | ($352.60) | ($341.56) | ($215.80) | ($470.48) | $195.03 | $4,428.46 | $973.96 | ($832.81) |
Subsequent_Event_Subsequent_Ev
Subsequent Event Subsequent Events (Details) (USD $) | 12 Months Ended |
Oct. 31, 2014 | |
Subsequent Events [Abstract] | |
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Declared | $5,572,125 |
Distribution Made to Limited Liability Company (LLC) Member, Distributions Paid, Per Unit | $1,125 |