UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 Form 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED:MARCH 31, 2009
 Commission file number: 000-52421
 ADVANCED BIOENERGY, LLC
 (Exact name of Registrant as Specified in its Charter)
 Delaware(State or Other Jurisdiction of 
Incorporation or Organization)
    
    20-2281511(I.R.S. Employer
Identification No.)
 10201 Wayzata Boulevard, Suite 250
Minneapolis, Minnesota 55305
(763) 226-2701  (Address, including zip code, and telephone number,
including area code, of Registrants Principal Executive Offices)
 þ o
 þ o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



ADVANCED BIOENERGY, LLC
FORM 10-Q
Index
 PagePart I. Financial Information
    
    
    1Item 1. Financial Statements
    
    
    1Condensed Consolidated Balance Sheets
    
    
    1Condensed Consolidated Statements of Operations
    
    
    2Condensed Consolidated Statement of Members Equity
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4T. Controls and Procedures
    
    
    24Part II. Other Information
    
    
    24Item 1. Legal Proceedings
    
    
    24Item 1A. Risk Factors
    
    
    24Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 3. Defaults Upon Senior Securities
    
    
    25Item 4. Submission of Matters to a Vote of Security Holders
    
    
    26Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    26Signatures
    
    
    26Exhibit Index




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##### 



PART I. FINANCIAL INFORMATION
 Item 1. Financial Statements
 ADVANCED BIOENERGY, LLC & SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
 March 31,
    
    
    September 30,2009
    
    
    2008ASSETSCurrent assets:Cash and cash equivalents
    
    $
    13,350
    
    
    $
    12,655Accounts receivable:Trade accounts receivable
    
    
    6,222
    
    
    
    4,889Due from broker
    
    
    65
    
    
    
    1,283Inventories
    
    
    10,083
    
    
    
    8,101Prepaid expenses
    
    
    1,483
    
    
    
    1,715Current portion of restricted cash
    
    
    2,752
    
    
    
    2,731Assets held for sale (Note 3)
    
    
    128,799
    
    
    
    152,363Total current assets
    
    
    162,754
    
    
    
    183,737Property and equipment, net
    
    
    117,852
    
    
    
    123,849Other assets:Restricted cash
    
    
    1,156
    
    
    
    1,156Deferred financing costs, net
    
    
    878
    
    
    
    954Other assets
    
    
    168
    
    
    
    10Total Assets
    
    $
    282,808
    
    
    $
    309,706LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Accounts payable
    
    $
    4,365
    
    
    $
    2,497Accrued expenses
    
    
    4,728
    
    
    
    3,621Derivative financial instruments
    
    
    
    
    
    
    1,242Liabilities held for sale (Note 3)
    
    
    128,799
    
    
    
    125,496Current portion of long-term debt
    
    
    23,405
    
    
    
    20,055Total current liabilities
    
    
    161,297
    
    
    
    152,911Deferred income
    
    
    6,732
    
    
    
    6,732Long-term debt
    
    
    77,435
    
    
    
    82,638Other liabilities
    
    
    
    
    
    
    Members equity:Members capital
    
    
    153,567
    
    
    
    153,516Retained deficit
    
    
    (116,223
    )
    
    
    (84,305
    )Accumulated other comprehensive loss
    
    
    
    
    
    
    (1,786
    )Total members equity
    
    
    37,344
    
    
    
    67,425Total liabilities and members equity
    
    $
    282,808
    
    
    $
    309,706




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##### 



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Dollars in thousands, except per unit data)
(Unaudited)
 Quarter Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Ethanol and related product revenues
    
    $
    52,946
    
    
    $
    60,938
    
    
    $
    110,668
    
    
    $
    92,737Cost of goods sold
    
    
    52,217
    
    
    
    50,523
    
    
    
    108,250
    
    
    
    78,878Gross profit
    
    
    729
    
    
    
    10,415
    
    
    
    2,418
    
    
    
    13,859Selling, general and administrative
    
    
    1,488
    
    
    
    1,981
    
    
    
    3,308
    
    
    
    5,176Operating income (loss)
    
    
    (759
    )
    
    
    8,434
    
    
    
    (890
    )
    
    
    8,683Other income
    
    
    892
    
    
    
    472
    
    
    
    1,356
    
    
    
    711Interest income
    
    
    45
    
    
    
    149
    
    
    
    110
    
    
    
    331Interest expense
    
    
    (1,867
    )
    
    
    (3,941
    )
    
    
    (3,894
    )
    
    
    (7,559
    )Income (loss) from continuing operations
    
    $
    (1,689
    )
    
    $
    5,114
    
    
    $
    (3,318
    )
    
    $
    2,166Discontinued operations (Note 3):Loss from Heartland Grain Fuels, LP
    
    
    (19,521
    )
    
    
    (6,141
    )
    
    
    (28,600
    )
    
    
    (5,800
    )Net loss
    
    $
    (21,210
    )
    
    $
    (1,027
    )
    
    $
    (31,918
    )
    
    $
    (3,634
    )Income (loss) per unit basic and diluted:From continuing operations
    
    
    (0.13
    )
    
    
    0.52
    
    
    
    (0.27
    )
    
    
    0.22From discontinued operations
    
    
    (1.55
    )
    
    
    (0.62
    )
    
    
    (2.33
    )
    
    
    (0.59
    )Net loss
    
    $
    (1.68
    )
    
    $
    (0.10
    )
    
    $
    (2.60
    )
    
    $
    (0.37
    )Basic weighted average units outstanding
    
    
    12,620,362
    
    
    
    9,897,420
    
    
    
    12,270,408
    
    
    
    9,849,428Diluted weighted average units outstanding
    
    
    12,620,362
    
    
    
    9,902,635
    
    
    
    12,270,408
    
    
    
    9,854,642
  2




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##### 



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
Condensed Consolidated Statements of Changes in Members Equity
For the Six Months Ended March 31, 2009
(Dollars in thousands)
(Unaudited)
 AccumulatedOtherMember
    
    
    Member
    
    
    Retained
    
    
    ComprehensiveUnits
    
    
    Capital
    
    
    Deficit
    
    
    Income
    
    
    TotalMEMBERS EQUITY  September 30, 2008
    
    
    9,919,162
    
    
    $
    153,516
    
    
    $
    (84,305
    )
    
    $
    (1,786
    )
    
    $
    67,425Issuance of previously subscribed units
    
    
    2,750,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unit compensation expense, net of
contingently returned units
    
    
    (10,000
    )
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    57Put options exercised
    
    
    (2,400
    )
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    (6
    )Interest rate swap obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,786
    
    
    
    1,786Net loss
    
    
    
    
    
    
    
    
    
    
    (31,918
    )
    
    
    
    
    
    
    (31,918
    )MEMBERS EQUITY  March 31, 2009
    
    
    12,656,762
    
    
    $
    153,567
    
    
    $
    (116,223
    )
    
    $
    
    
    
    $
    37,344
  3




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##### 



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
 Six Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2008Cash flows from operating activitiesNet loss
    
    $
    (31,918
    )
    
    $
    (3,635
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation
    
    
    13,028
    
    
    
    9,197Amortization of deferred financing costs
    
    
    528
    
    
    
    416Amortization of debt discount
    
    
    
    
    
    
    1,130Impairment of IRF purchase intangible
    
    
    
    
    
    
    750Impairment of HGF assets
    
    
    13,565
    
    
    
    Unit compensation expense
    
    
    57
    
    
    
    562Termination and accrual of interest rate swap settlement charges
    
    
    4,213
    
    
    
    Unrealized loss on derivative financial instruments
    
    
    (1,242
    )
    
    
    (518
    )Changes in working capital components:Receivables
    
    
    2,307
    
    
    
    (16,450
    )Inventories
    
    
    (294
    )
    
    
    (5,586
    )Prepaid expenses
    
    
    (239
    )
    
    
    (1,273
    )Accounts payable
    
    
    (559
    )
    
    
    2,093Accrued expenses
    
    
    4,810
    
    
    
    5,417Net cash provided by (used in) operating activities
    
    
    4,256
    
    
    
    (7,897
    )Cash flows from investing activitiesPurchase of property and equipment
    
    
    (658
    )
    
    
    (52,576
    )Change in other assets
    
    
    (157
    )
    
    
    146Increase in restricted cash held in escrow
    
    
    (487
    )
    
    
    (16,940
    )Net cash used in investing activities
    
    
    (1,302
    )
    
    
    (69,370
    )Cash flows from financing activitiesPayments on debt
    
    
    (5,253
    )
    
    
    (47,002
    )Proceeds from long-term debt
    
    
    3,000
    
    
    
    130,092Repurchase of units
    
    
    (6
    )
    
    
    (33
    )Net cash provided by (used in) financing activities
    
    
    (2,259
    )
    
    
    83,057Net increase in cash and cash equivalents
    
    
    695
    
    
    
    5,790Beginning cash and cash equivalents
    
    
    12,655
    
    
    
    7,111Ending cash and cash equivalents
    
    $
    13,350
    
    
    $
    12,901Supplemental disclosure of non cash transactionsDeferred financing cost paid from long term debt proceeds
    
    $
    
    
    
    $
    5,984Accounts payable incurred for construction in process
    
    
    
    
    
    
    400Unrealized loss on interest rate swaps
    
    
    
    
    
    
    3,602Financing costs amortized to construction in progress
    
    
    
    
    
    
    154Warrants issued in connection with debt
    
    
    
    
    
    
    2,260Supplemental disclosure of cash flow information:Cash paid for interest, net of capitalized interest of $2,394 in 2008
    
    $
    4,668
    
    
    $
    8,819
  4




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##### 



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009 and 2008
(Dollars in Thousands except per share amounts)
(Unaudited)
 1. Organization and Significant Accounting Policies
 Accounting for the Impairment or Disposal
of Long-Lived Assets
  Cash and Cash Equivalents
  Fair Value of Financial Instruments
  Inventories
  Property and Equipment
  Buildings
    
    40 YearsProcess equipment
    
    10 YearsOffice equipment
    
    5-7 Years
 5




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##### 



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009 and 2008
(Dollars in Thousands except per share amounts)
(Unaudited)
   Revenue Recognition
  Shipping Costs
  Income (Loss) Per Unit
  Accounting Estimates
  Risks and Uncertainties
  2. Going Concern
   6




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ADVANCED BIOENERGY, LLC & SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009 and 2008
(Dollars in Thousands except per share amounts)
(Unaudited)
   3. Discontinued Operations
 Accounting for the Impairment or Disposal of Long-Lived Assets
 Quarter Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Net revenues
    
    $
    33,480
    
    
    $
    41,164
    
    
    $
    74,612
    
    
    $
    62,128Loss from operations before impairment charge
    
    
    (5,956
    )
    
    
    (6,141
    )
    
    
    (15,035
    )
    
    
    (5,800
    )Property and equipment and deferred
financing costs impairment
    
    
    (13,565
    )
    
    
    
    
    
    
    (13,565
    )
    
    
    Net loss from discontinued operations
    
    $
    (19,521
    )
    
    $
    (6,141
    )
    
    $
    (28,600
    )
    
    $
    (5,800
    )
  March 31,
    
    
    September 30,2009
    
    
    2008Assets:Cash and cash equivalents
    
    $
    6,682
    
    
    $
    6,272Trade accounts receivable
    
    
    3,669
    
    
    
    6,224Inventories
    
    
    3,799
    
    
    
    5,486Property, plant and equipment, net
    
    
    112,780
    
    
    
    127,762Other
    
    
    1,869
    
    
    
    6,619Total Assets from discontinued operations
    
    $
    128,799
    
    
    $
    152,363Liabilities:Current and long-term portion of long-term debt
    
    $
    114,079
    
    
    $
    114,479Trade accounts payable and accrued expenses
    
    
    14,720
    
    
    
    11,017Total liabilities of discontinued operations
    
    $
    128,799
    
    
    $
    125,496
 7




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##### 



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009 and 2008
(Dollars in Thousands except per share amounts)
(Unaudited)
 4. Inventories
  March 31,
    
    
    September 30,2009
    
    
    2008Corn
    
    $
    5,924
    
    
    $
    843Chemicals
    
    
    256
    
    
    
    192Work in process
    
    
    1,164
    
    
    
    2,292Ethanol
    
    
    1,660
    
    
    
    2,250Distillers grain
    
    
    458
    
    
    
    1,871Supplies and parts
    
    
    621
    
    
    
    653Total
    
    $
    10,083
    
    
    $
    8,101
 5.
Property and Equipment
  March 31,
    
    
    September 30,2009
    
    
    2008Land
    
    $
    2,333
    
    
    $
    2,333Buildings
    
    
    11,447
    
    
    
    11,354Process equipment
    
    
    120,742
    
    
    
    120,480Office equipment
    
    
    1,085
    
    
    
    1,085Construction in process
    
    
    15
    
    
    
    116135,622
    
    
    
    135,368Accumulated depreciation
    
    
    (17,770
    )
    
    
    (11,519
    )Property and equipment, net
    
    $
    117,852
    
    
    $
    123,849
 6. Long Term Debt and Subsequent Events
  March 31,
    
    
    March 31,
    
    
    September 30,2009
    
    
    2009
    
    
    2008Interest Rate
    
    
    Principal Amount
    
    
    Principal AmountABE Fairmont senior credit facility
    
    
    3.91 - 7.53
    %
    
    $
    80,650
    
    
    $
    85,500ABE Fairmont seasonal line
    
    
    3.91
    %
    
    
    3,000
    
    
    
    ABE Fairmont subordinate exempt
facilities bonds
    
    
    6.75
    %
    
    
    7,000
    
    
    
    7,000Advanced BioEnergy secured term loan
    
    
    18
    %
    
    
    10,000
    
    
    
    10,000Other
    
    
    7.5
    %
    
    
    190
    
    
    
    193Total outstanding
    
    
    
    
    
    
    100,840
    
    
    
    102,693Less: Amounts due within one year
    
    
    
    
    
    
    (23,405
    )
    
    
    (20,055
    )Long-term debt
    
    
    
    
    
    $
    77,435
    
    
    $
    82,638
  2010
    
    $
    23,4052011
    
    
    11,2212012
    
    
    11,2212013
    
    
    11,3882014
    
    
    11,215Thereafter
    
    
    32,390Total debt
    
    $
    100,840
 8




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##### 



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009 and 2008
(Dollars in Thousands except per share amounts)
(Unaudited)
 Senior Credit Facility for the Fairmont Plant
     Fillmore County Subordinate Exempt Facilities Revenue Bonds for the Fairmont plant
  Secured Term Loan Note
   9




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ADVANCED BIOENERGY, LLC & SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009 and 2008
(Dollars in Thousands except per share amounts)
(Unaudited)
 Subordinated Convertible Debt Financing
  7. Members Equity
 Convertible Notes
  Restricted Unit Agreements
  Employment Agreements
   Warrants
  8. Major Customers
   March 31,
    
    March 31,2009
    
    2008Gavilon EthanolSix month revenues
    
    $
    86,055
    
    
    $
    Receivable balance
    
    
    4,728
    
    
    
    
 10




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##### 



ADVANCED BIOENERGY, LLC & SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009 and 2008
(Dollars in Thousands except per share amounts)
(Unaudited)
 9. Risk Management
  Commodity
    
    Quantity
    
    Amount
    
    Period CoveredCorn
    
    1,821 bushels
    
    $
    7,037
    
    
    December 2009Ethanol
    
    6,820 gallons
    
    
    9,949
    
    
    June 2009Dried Distiller Grains (Equivalents)
    
    44 tons
    
    
    4,447
    
    
    June 2009
  Quarter Ended
    
    Six Months EndedMarch 31,
    
    March 31,
    
    March 31,
    
    March 31,2009
    
    2008
    
    2009
    
    2008Ethanol related (losses)
    
    $
    
    
    
    $
    (166
    )
    
    $
    
    
    
    $
    (170
    )Corn gains (losses)
    
    
    (20
    )
    
    
    380
    
    
    
    (3,158
    )
    
    
    360
 Accounting for Derivative
Instruments and Hedging Activities
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Information Regarding Forward-Looking Statements
  COMPANY OVERVIEW
 Accounting for the Impairment or Disposal of Long-Lived Assets
  11




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##### 



FACILITIES
   PLAN OF OPERATION THROUGH MARCH 2010
  Financing and Existing Debt Obligations
 Advanced BioEnergy
   12




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##### 



RESULTS OF CONTINUING OPERATIONS
 Quarter Ended March 31, 2009 Compared to Quarter Ended March 31, 2008 (Continuing Operations)
  Quarter Ended
    
    Quarter EndedMarch 31, 2009
    
    March 31, 2008Sold/Consumed
    
    Average
    
    Sold/Consumed
    
    Average(In thousands)
    
    Net Price/Cost
    
    (In thousands)
    
    Net Price/CostEthanol (gallons)
    
    
    28,891
    
    
    $
    1.44
    
    
    
    23,394
    
    
    $
    2.08Dried distiller grains (tons)
    
    
    63
    
    
    
    131.79
    
    
    
    74
    
    
    
    164.14Modified distiller grains (tons)
    
    
    45
    
    
    
    68.33
    
    
    
    5
    
    
    
    60.74Corn (bushels)
    
    
    10,632
    
    
    $
    3.81
    
    
    
    8,545
    
    
    $
    4.28Gas (mmbtus)
    
    
    737
    
    
    
    3.76
    
    
    
    726
    
    
    
    7.45
 Net Sales
  Cost of Goods Sold
   Gross Profit
  Selling, General, and Administrative Expenses
  13




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##### 



Interest Expense
  Six Months Ended March 31, 2009 Compared to Six Months Ended March 31, 2008 (Continuing operations)
  Six Months Ended
    
    Six Months EndedMarch 31, 2009
    
    March 31, 2008Sold/Consumed
    
    Average
    
    Sold/Consumed
    
    Average(In thousands)
    
    Net Price/Cost
    
    (In thousands)
    
    Net Price/CostEthanol (gallons)
    
    
    53,704
    
    
    $
    1.60
    
    
    
    37,463
    
    
    $
    1.99Dried distiller grains (tons)
    
    
    127
    
    
    
    138.15
    
    
    
    113
    
    
    
    157.56Modified distiller grains (tons)
    
    
    93
    
    
    
    69.22
    
    
    
    9
    
    
    
    46.64Corn (bushels)
    
    
    19,981
    
    
    $
    4.03
    
    
    
    14,647
    
    
    $
    3.86Gas (mmbtus)
    
    
    1,453
    
    
    
    4.11
    
    
    
    1,216
    
    
    
    6.89
 Net Sales
   Cost of Goods Sold
   14




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##### 



Gross Profit
  Selling, General, and Administrative Expenses
  Interest Expense
  DISCONTINUED OPERATIONS
 Accounting for the Impairment or Disposal of Long-Lived Assets
  15




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##### 



TRENDS AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS
 Overview
   Legislation
  The Renewable Fuels Standard
  16




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##### 



RFS RequirementTotal Renewable
    
    Cellulosic
    
    Biodiesel
    
    
    
    
    
    That Can Be MadeFuel
    
    Ethanol Minimum
    
    Minimum
    
    Advanced
    
    With Corn BasedYear
    
    Requirement
    
    Requirement
    
    Requirement
    
    Biofuel
    
    Ethanol2009
    
    
    11.10
    
    
    
    
    
    
    
    .50
    
    
    
    0.10
    
    
    
    10.502010
    
    
    12.95
    
    
    
    .10
    
    
    
    .65
    
    
    
    0.20
    
    
    
    12.002011
    
    
    13.95
    
    
    
    .25
    
    
    
    .80
    
    
    
    0.30
    
    
    
    12.602012
    
    
    15.20
    
    
    
    .50
    
    
    
    1.00
    
    
    
    0.50
    
    
    
    13.202013
    
    
    16.55
    
    
    
    1.00
    
    
    
    
    
    
    
    1.75
    
    
    
    13.802014
    
    
    18.15
    
    
    
    1.75
    
    
    
    
    
    
    
    2.00
    
    
    
    14.402015
    
    
    20.50
    
    
    
    3.00
    
    
    
    
    
    
    
    2.50
    
    
    
    15.002016
    
    
    22.25
    
    
    
    4.25
    
    
    
    
    
    
    
    3.00
    
    
    
    15.002017
    
    
    24.00
    
    
    
    5.50
    
    
    
    
    
    
    
    3.50
    
    
    
    15.002018
    
    
    26.00
    
    
    
    7.00
    
    
    
    
    
    
    
    4.00
    
    
    
    15.002019
    
    
    28.00
    
    
    
    8.50
    
    
    
    
    
    
    
    4.50
    
    
    
    15.002020
    
    
    30.00
    
    
    
    10.50
    
    
    
    
    
    
    
    4.50
    
    
    
    15.002021
    
    
    33.00
    
    
    
    13.50
    
    
    
    
    
    
    
    4.50
    
    
    
    15.002022
    
    
    36.00
    
    
    
    16.00
    
    
    
    
    
    
    
    5.00
    
    
    
    15.00
   California Low Carbon Fuel Standard
    The Clean Air Act and Oxygenated Gasoline Program
  17




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##### 



The Volumetric Ethanol Excise Tax Credit
  Tariffs on Imported Ethanol
   COMPETITION
 Our Primary Competition
    Competition from Alternative Fuels
  18




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##### 



Competition for Co-Products
  LIQUIDITY AND CAPITAL RESOURCES
 Financing and Existing Debt Obligations
  Advanced BioEnergy
      ABE Fairmont
   19




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##### 



Heartland Grain Fuels
    20




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##### 



21




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##### 



CREDIT ARRANGEMENTS
  March 31,
    
    
    March 31,
    
    
    September 30,2008
    
    
    2008
    
    
    2008Interest Rate
    
    
    Principal Amount
    
    
    Principal AmountABE Fairmont senior credit facility
    
    
    3.91 - 7.53
    %
    
    $
    80,650
    
    
    $
    85,500ABE Fairmont seasonal line
    
    
    3.91
    %
    
    
    3,000
    
    
    
    ABE Fairmont subordinate exempt
facilities bonds
    
    
    6.75
    %
    
    
    7,000
    
    
    
    7,000Advanced BioEnergy secured term loan
    
    
    18
    %
    
    
    10,000
    
    
    
    10,000Other
    
    
    7.5
    %
    
    
    190
    
    
    
    193Total outstanding
    
    
    
    
    
    
    100,840
    
    
    
    102,693Less: Amounts due within one year
    
    
    
    
    
    
    (23,405
    )
    
    
    (20,055
    )Long-term debt
    
    
    
    
    
    $
    77,435
    
    
    $
    82,638
  2010
    
    $
    23,4052011
    
    
    11,2212012
    
    
    11,2212013
    
    
    11,3882014
    
    
    11,215Thereafter
    
    
    32,390Total debt
    
    $
    100,840
 Summary of Critical Accounting Policies and Estimates
  Revenue Recognition
  Inventories
  Long Lived Asset Impairment
  22




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##### 



OFF-BALANCE SHEET ARRANGEMENTS
  GOVERNMENT PROGRAMS, TAX CREDITS AND TAX INCREMENT FINANCING
   Item 3. Quantitative and Qualitative Disclosures about Market Risk
      Estimatedat Risk
    
    
    
    
    
    Hypothetical
    
    
    
    
    
    Change in AnnualVolume(1)
    
    
    
    
    
    Change in
    
    Spot
    
    Operating Income(In millions)
    
    Units
    
    Price
    
    Price(2)
    
    (In millions)Ethanol
    
    
    78.4
    
    
    gallons
    
    
    10.0
    %
    
    $
    1.60
    
    
    $
    12.5Distiller grains
    
    
    .2
    
    
    tons
    
    
    10.0
    %
    
    
    115.00
    
    
    
    2.8Corn
    
    
    31.8
    
    
    bushels
    
    
    10.0
    %
    
    
    4.05
    
    
    
    12.9Natural gas
    
    
    2.8
    
    
    btus
    
    
    10.0
    %
    
    
    3.78
    
    
    
    1.0
 23




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(1)
    
    The volume of ethanol at risk is based on the assumption that we will enter into contracts for 26% of our expected annual 106
million gallons of production capacity. The volume of distiller grains at risk is based on the assumption that we will enter
into contracts for 26% of our expected annual distiller grain production of 334,000 tons. The volume of corn is based on the
assumption that we will enter into forward contracts for 19% of our estimated current 39.3 million bushel annual requirement.
The volume of natural gas at risk is based on the assumption that we will continue to lock in one months gas usage.(2)
    
    Current spot prices include the CBOT price per gallon of ethanol and the price per bushel of corn, the NYMEX price per mmbtu
of natural gas and our listed local advertised dried distiller grain price per ton as of March 31, 2009. INTEREST RATE/FOREIGN EXCHANGE RISK
   IMPACT OF INFLATION
  Item 4T . Controls and Procedures
  PART II. OTHER INFORMATION
 Item 1. Legal Proceedings
  Item 1A. Risk Factors
  24




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##### 



We are exposed to additional regulatory risk that may prevent the sale of our products to customers
located in certain states or require us to change the way we operate.
  We are
exposed to credit risk resulting from the non-payment from a significant customer.
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Item 3. Defaults Upon Senior Securities
 Advanced Bioenergy, LLC
   Heartland Grain Fuels
  25




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Item 4. Submission of Matters to a Vote of Security Holders
  Item 5. Other Information
  Item 6 . Exhibits
  SIGNATURES
  ADVANCED BIOENERGY, LLCDate: May 20, 2009
    By:
    /s/ Richard R. PetersonRichard R. PetersonInterim Chief Executive Officer, Vice
President of Accounting and Finance and
Chief Financial Officer 26




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##### 



EXHIBIT INDEX
 ExhibitNo.
    
    Description
    
    Method of Filing3.1
    
    Certificate of Formation
    
    Incorporated by reference
to Exhibit 2.1 to the
Registrants Current
Report on Form 8-K, filed
on November 8, 2006 (File
No. 000-52421).3.2
    
    Third Amended and Restated
Operating Agreement of the
Registrant
    
    Incorporated herein by
reference to Exhibit 2.2
to the Registrants
Current Report on Form
8-K, filed on November 8,
2006 (File No. 000-52421).31.1
    
    Rule 13a-14(a)/15d-14(a)
Certification by Principal
Executive Officer
    
    Filed Electronically31.2
    
    Rule 13a-14(a)/15d-14(a)
Certification by Principal
Financial and Accounting Officer
    
    Filed Electronically32
    
    Section 1350 Certifications
    
    Filed Electronically