##### Table of Contents





UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, DC 20549
  Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended December 31,
    2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    fromto   Commission file number:
    000-52421
 ADVANCED BIOENERGY,
    LLC
 (Exact name of Registrant as Specified in its Charter)
  Delaware

20-2281511(State or Other Jurisdiction of

(I.R.S. EmployerIncorporation or Organization)

Identification No.)   8000
    Norman Center Drive, Suite 610
 Bloomington,
    Minnesota 55437(763) 226-2701 (Address,
    including zip code, and telephone number,
    including area code, of Registrants Principal Executive
    Offices)
  þ o
  Regulation S-T
  Yes  o     No  o
  12b-2
  Large
    accelerated
    filer  o
    Accelerated
    filer  o
    Non-accelerated
    filer  þ
    Smaller
    reporting
    company  o     Rule 12b-2 o þ
      1




---



##### 





ADVANCED
    BIOENERGY, LLCFORM 10-Q
    Index
   
 PagePart I. Financial Information


3Item 1. Financial Statements


3Consolidated Balance Sheets


3Consolidated Statements of Operations


4Consolidated Statement of Changes in
    Members Equity


5Consolidated Statements of Cash Flows


6Notes to Consolidated Financial Statements


7Item 2. Managements Discussion and
    Analysis of Financial Condition and Results of Operations


15Item 3. Quantitative and Qualitative
    Disclosures About Market Risk


27Item 4. Controls and Procedures


28Part II. Other Information


29Item 1. Legal Proceedings


29Item 1A. Risk Factors


29Item 2. Unregistered Sales of Equity
    Securities and Use of Proceeds


29Item 3. Defaults Upon Senior Securities


29Item 4. [Removed and Reserved.]


29Item 5. Other Information


29Item 6. Exhibits


29Signatures


30Exhibit Index


30EX-31EX-32EX-31EX-32   2




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##### Table of Contents



PART I.
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements  ADVANCED
    BIOENERGY, LLC & SUBSIDIARIESConsolidated Balance Sheets(Dollars in thousands)  December 31,


September 30,2010


2010(unaudited)ASSETSCurrent assets:Cash and cash equivalents

$
21,341


$
22,772Accounts receivable:Trade accounts receivable, net of allowance for doubtful
    accounts of $255 at December 31, 2010 and
    September 30, 2010, respectively


9,786



13,519Other receivables


1,492



1,543Due from broker


657



252Derivative financial instruments


-



314Inventories


21,574



14,102Prepaid expenses


2,177



2,666Current portion of restricted cash


3,276



4,169Total current assets


60,303



59,337Property and equipment, net


177,028



181,701Other assets:Restricted cash


2,735



3,145Other assets


2,014



2,014Total assets

$
242,080


$
246,197LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Accounts payable

$
7,058


$
4,337Accrued expenses


5,763



5,818Current portion of long-term debt (stated principal amount of
    $14,215 and $19,199 at December 31, 2010 and
    September 30, 2010, respectively)


15,060



20,045Total current liabilities


27,881



30,200Other liabilities


499



628Deferred income


4,712



4,881Long-term debt (stated principal amount of $132,738 and $137,203
    at December 31, 2010 and September 30, 2010,
    respectively)


141,992



146,670Total liabilities

$
175,084


$
182,379Members equityMembers capital, no par value, 24,714,180 units
    issued and outstanding


171,211



171,200Accumulated deficit


(104,215
)


(107,382
)Total members equity


66,996



63,818Total liabilities and members equity

$
242,080


$
246,197    3




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##### Table of Contents



ADVANCED
    BIOENERGY, LLC & SUBSIDIARIESConsolidated Statements of
    Operations
    (Dollars in thousands, except per unit data)
    (Unaudited)
  Quarter EndedDecember 31,


December 31,2010


2009Net salesEthanol and related products

$
116,266


$
96,006Other


250



250Total net sales


116,516



96,256Cost of goods sold


110,414



84,128Gross profit


6,102



12,128Selling, general and administrative


2,063



2,097Operating income


4,039



10,031Other income (expense)


100



(9
)Interest income


24



41Interest expense


(996
)


(3,909
)Net income

$
3,167


$
6,154Basic & diluted weighted average units outstanding


24,714,180



17,673,982Income per unit - basic and diluted

$
0.13


$
0.35    4




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##### Table of Contents



ADVANCED
    BIOENERGY, LLC & SUBSIDIARIESConsolidated Statements of
    Changes in Members EquityFor the Quarter Ended December 31,
    2010
    (Dollars in thousands)
    (Unaudited)
  Member


Member


AccumulatedUnits


Capital


Deficit


TotalMEMBERS EQUITY - September 30, 2010


24,714,180


$
171,200


$
(107,382
)

$
63,818Unit compensation expense


-



11



-



11Net income


-



-



3,167



3,167MEMBERS EQUITY - December 31, 2010


24,714,180


$
171,211


$
(104,215
)

$
66,996    5




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##### Table of Contents



ADVANCED
    BIOENERGY, LLC & SUBSIDIARIESConsolidated Statements of Cash
    Flows
    (Dollars in thousands)
    (Unaudited)
  Quarter EndedDecember 31,


December 31,2010


2009Cash flows from operating activities:Net income

$
3,167


$
6,154Adjustments to reconcile net income to operating activities cash
    flows:Depreciation


5,609



5,338Amortization of deferred financing costs


-



33Amortization of deferred revenue


(169
)


(168
)Idle lease liability reduction


(95
)


(95
)Amortization of debt discount


-



263Amortization of additional carrying value


(214
)


-Unit compensation expense


11



11Loss on disposal of assets


5



-Unrealized (gain) on derivative financial instruments


(34
)


-Change in risk management activities


314



(614
)Change in working capital components:Receivables


3,379



(3,507
)Inventories


(7,472
)


(2,980
)Prepaid expenses


489



(711
)Accounts payable


2,721



(714
)Accrued expenses


(55
)


2,057Net cash provided by operating activities


7,656



5,067Cash flows from investing activities:Purchase of property and equipment


(941
)


(372
)Decrease in restricted cash


1,303



5,743Net cash provided by investing activities


362



5,371Cash flows from financing activities:Payments on debt


(9,449
)


(8,648
)Proceeds from issuance of membership units and subscribed units


-



1,254Repurchase of units


-



(3
)Net cash (used in) financing activities


(9,449
)


(7,397
)Net (decrease) increase in cash and cash equivalents


(1,431
)


3,041Beginning cash and cash equivalents


22,772



26,367Ending cash and cash equivalents

$
21,341


$
29,408Supplemental disclosure of non cash transactionsWarrant obligation recognized as a liability

$
-


$
489Other receivable offset against equipment


-



1,100Accrued interest at HGF transferred to debt


-



2,516Supplemental disclosure of cash flow information:Cash paid for interest

$
1,162


$
1,256    6




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##### Table of Contents



ADVANCED
    BIOENERGY, LLC & SUBSIDIARIES
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2010 and 2009
    (Unaudited) 1.
    Organization
    and Significant Accounting Policies  Form 10-K
    Cash,
    Cash Equivalents and Restricted Cash
    Fair
    Value Measurements
  and/or
         7




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##### Table of Contents



At December 31, 2010

Total


Level 1


Level 2


Level 3Liabilities - Warrant Derivative

$
440


$
-


$
-


$
440At September 30,
    2010Assets - Derivative Financial Instruments

$
314


$
314


$
-


$
-Liabilities - Warrant Derivative


474



-



-



474       December 31,


September 30,2010


2010Market value(1)

$
1.50


$
1.50Exercise price

$
1.50


$
1.50Expected volatility


109.86
%


117.08
%Expected life (years)


1.88



2.00Risk-free interest rate


0.625
%


0.375
%Forfeiture rate


-



-Dividend rate


-



-   (1)
    
    Market value based on recent unit transactions.    Balance of warrant derivative as of October 1, 2010

$
474Unrealized gain related to the change in fair value


(34
)Balance as of December 31, 2010

$
440   Receivables
    Derivative
    Instruments/Due From Broker
  available-for-sale
 8




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##### Table of Contents



Inventories
    Revenue
    Recognition
    Income
    Per Unit
    Three Months EndedDecember 31,2010


2009Numerator:Net income for basic earnings per share

$
3,167


$
6,154Gain in fair value of warrant derivative liability


(34
)


(1
)Net income for diluted earnings per share


3,133



6,153Denominator:Basic and diluted common shares outstanding


24,714



17,674Earnings per share basic

$
0.13


$
0.35Earnings per share diluted

$
0.13


$
0.35   Accounting
    Estimates
    Risks
    and Uncertainties
   9




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##### Table of Contents



Contingencies
    2.
    Inventories    December 31,


September 30,2010


2010Corn

$
4,002


$
3,127Chemicals


1,168



1,107Work in process


2,705



2,104Ethanol


11,115



5,427Distillers grain


553



419Supplies and parts


2,031



1,918Total

$
21,574


$
14,102   3.
    Property
    and Equipment    December 31,


September 30,2010


2010Land

$
3,999


$
3,962Buildings


21,341



21,341Process equipment


216,319



215,962Office equipment


1,401



1,356Construction in process


708



234243,768



242,855Accumulated depreciation

$
(66,740
)

$
(61,154
)Property and equipment, net

$
177,028


$
181,701  10




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##### Table of Contents



4.
    Debt    December 31,2010

December 31,


September 30,Interest Rate

2010


2010ABE Fairmont:Senior credit facility - variable

3.67%

$
37,466


$
45,050Senior credit facility - fixed

7.53%


20,000



20,000Seasonal line

3.35%


-



-Subordinate exempt facilities bonds - fixed

6.75%


6,185



7,00063,651



72,050ABE South Dakota:Senior debt principal - variable

1.80%


80,302



81,352Restructuring fee

N/A


3,000



3,000Additional carrying value of restructured debt

N/A


10,099



10,31393,401



94,665Total outstanding



$
157,052


$
166,715Additional carrying value of restructured debt

N/A


(10,099
)


(10,313
)Stated principal



$
146,953


$
156,402     Amortization ofAdditional CarryingStated


Value ofPrincipal


Restructured Debt


Total2011

$
14,215


$
845


$
15,0602012


14,215



1,421



15,6362013


14,215



2,277



16,4922014


10,081



2,528



12,6092015


13,815



2,435



16,250Thereafter


80,412



593



81,005Total debt

$
146,953


$
10,099


$
157,052   Senior
    Credit Facility for the Fairmont Plant
     11




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##### Table of Contents



30-day
    Fillmore
    County Subordinate Exempt Facilities Revenue Bonds for the
    Fairmont plant
    Senior
    Credit Agreement for the South Dakota Plants
         12




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##### Table of Contents



5.
    Major
    Customers    co-product
 13




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##### Table of Contents



December 31,


December 31,2010


2009Hawkeye Gold - Ethanol and Distiller GrainsThree month revenues

$
97,913


$
-Receivable balance


6,806



-Gavilon - EthanolThree month revenues

$
-


$
81,188Receivable balance


-



10,158Dakotaland - ABESouth Dakota Distillers GrainsThree month revenues

$
2,838


$
6,079Receivable balance


519



586   6.
    Risk
    Management    Quantity

Amount


Period CoveredCorn

Purchase Contracts

2,026 bushels

$
10,463


September 2011Ethanol

Sale Contracts

13,810 gallons


30,701


January 2011Distillers grains

Sale Contracts

94 tons


14,326


March 2011       Income Statement

Realized

Unrealized

TotalClassification

Gain

Gain

GainThree months ending December 31, 2010


Cost of Goods Sold


$
90


$
-


$
90Three months ending December 31, 2009


Cost of Goods Sold



56



614



670   Balance Sheet

December 31,

September 30,Classification

2010

2010Derivative financial instrument - futures contract


Current Assets


$
-


$
314  14




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Information
    Regarding Forward-Looking Statements
  Form 10-Q Form 10-K
  
    our operational results are subject to fluctuations in the
    prices of grain, utilities and ethanol, which are affected by
    various factors including weather, production levels, supply,
    demand, changes in technology and government support and
    regulations;
    margins can be volatile and can evaporate, which may impact our
    liability to meet current obligations and debt service
    requirements at our operating entities;
    our hedging transactions and mitigation strategies could
    materially harm our results;
    cash distributions depend upon our future financial and
    operational performance and will be affected by debt covenants,
    reserves and operating expenditures;
    current governmental mandated tariffs, credits and standards may
    be reduced or eliminated and legislative acts taken by state
    governments such as California, related to low carbon fuels that
    include the effects caused by indirect land use, may have an
    adverse effect on our business;
    alternative fuel additives may be developed that are superior to
    or cheaper than ethanol;
    transportation, storage and blending infrastructure may become
    impaired, preventing ethanol from reaching markets;
    our facilities may experience technical difficulties and not
    produce the gallons of ethanol as expected and insurance
    proceeds may not be adequate to cover production
    disruptions; and
    our units are subject to a number of transfer restrictions and
    no public market exists for our units and none is expected to
    develop.    General
   15




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##### Table of Contents



Overview
        DRY MILL
    PROCESS
  starch-to-sugar
   16




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##### Table of Contents



FACILITIES
    EstimatedEstimated


Annual


EstimatedAnnual


Distillers


AnnualEthanol


Grains


Corn


PrimaryLocation

Production


Production(1)


Processed


Energy Source


Builder(Million gallons)


(Tons)


(Million bushels)Fairmont, NE


110



334,000



39.3



Natural Gas


FagenAberdeen, SD(2)


9



27,000



3.2



Natural Gas


BroinAberdeen, SD(2)


44



134,000



15.7



Natural Gas


ICMHuron, SD


32



97,000



11.4



Natural Gas


ICMConsolidated


195



592,000



69.6   (1)
    
    Our plants produce and sell wet, modified wet and dried
    distillers grains. The stated quantities are on a fully dried
    basis operating at nameplate capacity.(2)
    
    Our plant at Aberdeen consists of two separate production
    facilities which operate on a separate basis. Accordingly, we
    report and track production from our Aberdeen facilities
    separately.      18-month
     17




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##### Table of Contents



Plan
    of Operations Through December 31, 2011
    RESULTS
    OF OPERATIONS
  Quarter
    Ended December 31, 2010 Compared to Quarter Ended
    December 31, 2009
    Three Months Ended

Three Months EndedDecember 31, 2010

December 31, 2009Sold/Consumed

Average

Sold/Consumed

Average(In thousands)

Net Price/Cost

(In thousands)

Net Price/CostEthanol (gallons)


48,723


$
1.99



49,651


$
1.66Dried distillers grains (tons)


121



121.57



115



92.72Wet/modified distillers grains (tons)


79



49.17



88



35.67Corn (bushels)


18,311


$
4.62



17,998


$
3.47Gas (mmbtus)


1,406



4.12



1,377



4.48   Net
    Sales
    Cost
    of Goods Sold
   18




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##### Table of Contents



Gross
    Profit
    Selling,
    General, and Administrative Expenses
    Interest
    Expense
    TRENDS
    AND UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE
    OPERATIONS
  Overview
     19




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##### Table of Contents



The
    Renewable Fuels Standard
   20




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##### Table of Contents



Cellulosic





RFS RequirementTotal Renewable

Ethanol

Biodiesel



That Can Be MetFuel

Minimum

Minimum

Advanced

With Corn-BasedYear

Requirement

Requirement

Requirement

Biofuel

Ethanol2011


13.95



0.25



0.80



1.35



12.602012


15.20



0.50



1.00



2.00



13.202013


16.55



1.00



-



2.75



13.802014


18.15



1.75



-



3.75



14.402015


20.50



3.00



-



5.50



15.002016


22.25



4.25



-



7.25



15.002017


24.00



5.50



-



9.00



15.002018


26.00



7.00



-



11.00



15.002019


28.00



8.50



-



13.00



15.002020


30.00



10.50



-



15.00



15.002021


33.00



13.50



-



18.00



15.002022


36.00



16.00



-



21.00



15.00     Blending
    Incentives
    California
    Low Carbon Fuel Standard
     21




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Imported
    Ethanol Tariffs
    Chinese
    Anti-Dumping Investigation
    COMPETITION
  Ethanol
      Distillers
    Grains
   22




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##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
  Financing
    and Existing Debt Obligations
    Advanced
    BioEnergy, LLC
      ABE
    Fairmont
       23




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##### Table of Contents



ABE South
    Dakota
           24




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##### Table of Contents



CREDIT
    ARRANGEMENTS
    December 31,2010

December 31,


September 30,Interest Rate

2010


2010ABEFairmont:Senior credit facility - variable

3.67%

$
37,466


$
45,050Senior credit facility - fixed

7.53%


20,000



20,000Seasonal line

3.35%


-



-Subordinate exempt facilities bonds - fixed

6.75%


6,185



7,00063,651



72,050ABESouth Dakota:Senior debt principal - variable

1.80%


80,302



81,352Restructuring fee

N/A


3,000



3,000Additional carrying value of restructured debt

N/A


10,099



10,31393,401



94,665Total outstanding



$
157,052


$
166,715Additional carrying value of restructured debt

N/A


(10,099
)


(10,313
)Stated principal



$
146,953


$
156,402     Amortization ofAdditional CarryingStated


Value ofPrincipal


Restructured Debt


Total2011

$
14,215


$
845


$
15,0602012


14,215



1,421



15,6362013


14,215



2,277



16,4922014


10,081



2,528



12,6092015


13,815



2,435



16,250Thereafter


80,412



593



81,005Total debt

$
146,953


$
10,099


$
157,052   SUMMARY
    OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   25




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##### Table of Contents



Fair
    Value of Financial Instruments
    Derivative
    Instruments/Due From Broker
  available-for-sale
    Inventories
    Property
    and Equipment
    Office equipment


5-7 YearsProcess equipment


10 YearsBuildings


40 Years     Revenue
    Recognition
   26




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##### Table of Contents



OFF-BALANCE
    SHEET ARRANGEMENTS
    GOVERNMENT
    PROGRAMS, TAX CREDITS AND TAX INCREMENT FINANCING
        Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk  COMMODITY
    PRICE RISK
         27




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##### Table of Contents



Change inEstimated at




Hypothetical





AnnualRisk




Change in


Spot


OperatingVolume(1)


Units

Price


Price(2)


Income(In millions)










(In millions)Ethanol


141.2


gallons


10.0
%

$
2.38


$
33.6Distillers grains


0.25


tons


10.0
%


172.00



4.3Corn


62.2


bushels


10.0
%


6.29



39.1Natural gas


4.8


mmbtus


10.0
%


4.41



2.1   (1)
    
    The volume of ethanol at risk is based on the assumption that we
    will enter into contracts for 27.6% of our expected annual
    gallons capacity of 195 million gallons. The volume of
    distillers grains at risk is based on the assumption that we
    will enter into contracts for 57.7% of our expected annual
    distillers grains production of 592,000 tons. The volume of corn
    is based on the assumption that we will enter into forward
    contracts for 10.6% of our estimated current 69.6 million
    bushel annual requirement. The volume of natural gas at risk is
    based on the assumption that we will continue to lock in 13.8%
    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 distillers
    grains price per ton as of December 31, 2010.  INTEREST
    RATE/FOREIGN EXCHANGE RISK
      Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
 28




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##### Table of Contents



Changes
    in Internal Controls
   PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings    Item 1A.
    Risk
    Factors  Form 10-K
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    [Removed
    and Reserved]    Item 5.
    Other
    Information    Item 6.
    Exhibits   29




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##### Table of Contents



SIGNATURES    ADVANCED BIOENERGY, LLCDate: February 11, 2011

By:

/s/ Richard R. PetersonRichard R. PetersonChief Executive Officer and President,
    Chief Financial Officer
    (Duly authorized signatory and principal
    financial officer)   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, 20063.2


Fourth Amended and Restated Operating Agreement of the
    Registrant, effective as of May 11, 2010

Incorporated by reference to Exhibit 3.1 to the
    Registrants Current Report on Form 8-K, filed on May 13,
    201031


Rule 13a-14(a)/15d-14(a)
    Certification by Principal Executive Officer, Financial and
    Accounting Officer

Filed Electronically32


Section 1350 Certifications

Filed Electronically  30