##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2011
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 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.)
 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
 o 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
    
    
    3Item 1. Financial Statements
    
    
    3Consolidated Balance Sheets
    
    
    3Consolidated Statements of Operations and Comprehensive Loss
    
    
    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
    
    
    28Item 1. Legal Proceedings
    
    
    28Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 3. Defaults Upon Senior Securities
    
    
    30Item 4. [Removed and Reserved.]
    
    
    30Item 5. Other Information
    
    
    30Item 6. Exhibits
    
    
    31Signatures
    
    
    32Exhibit Index
    
    
    32EX-10.1EX-10.2EX-10.3EX-10.4EX-10.5EX-10.6EX-31EX-32
  2




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 Consolidated Balance Sheets
 (Dollars in thousands)
 March 31,
    
    
    September 30,2011
    
    
    2010(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    29,265
    
    
    $
    22,772Accounts receivable:Trade accounts receivable, net of allowance for doubtful
accounts of $255 at March 31, 2011 and
September 30, 2010, respectively
    
    
    16,581
    
    
    
    13,519Other receivables
    
    
    1,233
    
    
    
    1,543Due from broker
    
    
    
    
    
    
    252Derivative financial instruments
    
    
    
    
    
    
    314Inventories
    
    
    12,408
    
    
    
    14,102Prepaid expenses
    
    
    2,327
    
    
    
    2,666Current portion of restricted cash
    
    
    3,437
    
    
    
    4,169Total current assets
    
    
    65,251
    
    
    
    59,337Property and equipment, net
    
    
    172,432
    
    
    
    181,701Other assets:Restricted cash
    
    
    2,127
    
    
    
    3,145Other assets
    
    
    1,956
    
    
    
    2,014Total assets
    
    $
    241,766
    
    
    $
    246,197LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Accounts payable
    
    $
    7,832
    
    
    $
    4,337Accrued expenses
    
    
    8,748
    
    
    
    5,818Current portion of long-term debt (stated principal amount of
$14,215 and $19,199 at March 31, 2011 and September 30, 2010,
respectively)
    
    
    15,052
    
    
    
    20,045Total current liabilities
    
    
    31,632
    
    
    
    30,200Other liabilities
    
    
    410
    
    
    
    628Deferred income
    
    
    4,544
    
    
    
    4,881Long-term debt (stated principal amount of $128,388 and $137,203 at
March 31, 2011 and September 30, 2010, respectively)137,436
    
    
    
    146,670Total liabilities
    
    $
    174,022
    
    
    $
    182,379Members equityMembers capital, no par value, 24,714,180 units issued and
outstanding
    
    
    171,223
    
    
    
    171,200Accumulated deficit
    
    
    (103,479
    )
    
    
    (107,382
    )Total members equity
    
    
    67,744
    
    
    
    63,818Total liabilities and members equity
    
    $
    241,766
    
    
    $
    246,197
  3




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ADVANCED
BIOENERGY, LLC & SUBSIDIARIES
 
 Consolidated Statements of Operations
(Dollars in thousands, except per unit data)
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2011
    
    
    2010Net salesEthanol and
related products
    
    $
    152,704
    
    
    $
    98,574
    
    
    $
    268,970
    
    
    $
    194,580Other
    
    
    108
    
    
    
    167
    
    
    
    358
    
    
    
    416Total net sales
    
    
    152,812
    
    
    
    98,741
    
    
    
    269,328
    
    
    
    194,996Cost of goods sold
    
    
    148,000
    
    
    
    88,199
    
    
    
    258,414
    
    
    
    172,329Gross profit
    
    
    4,812
    
    
    
    10,542
    
    
    
    10,914
    
    
    
    22,667Selling, general and
administrative
    
    
    3,667
    
    
    
    2,217
    
    
    
    5,730
    
    
    
    4,314Operating income
    
    
    1,145
    
    
    
    8,325
    
    
    
    5,184
    
    
    
    18,353Other income
    
    
    510
    
    
    
    275
    
    
    
    610
    
    
    
    266Interest income
    
    
    13
    
    
    
    17
    
    
    
    37
    
    
    
    60Interest expense
    
    
    (932
    )
    
    
    (3,511
    )
    
    
    (1,928
    )
    
    
    (7,419
    )Net income
    
    $
    736
    
    
    $
    5,106
    
    
    $
    3,903
    
    
    $
    11,260Weighed average units
outstanding  basic
    
    
    24,705,180
    
    
    
    17,800,180
    
    
    
    24,705,180
    
    
    
    17,729,311Weighed average units
outstanding  diluted
    
    
    24,705,180
    
    
    
    17,800,180
    
    
    
    24,705,180
    
    
    
    17,729,311Income per unit  basic
    
    $
    0.03
    
    
    $
    0.29
    
    
    $
    0.16
    
    
    $
    0.64Income per unit  diluted
    
    $
    0.03
    
    
    $
    0.28
    
    
    $
    0.16
    
    
    $
    0.63
  4




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ADVANCED
BIOENERGY, LLC & SUBSIDIARIES
 
 Consolidated Statements of Changes in Members Equity
For the Six Months Ended March 31, 2011
(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
    
    
    
    
    
    
    23
    
    
    
    
    
    
    
    23Net income
    
    
    
    
    
    
    
    
    
    
    3,903
    
    
    
    3,903MEMBERS EQUITY  March 31, 2011
    
    
    24,714,180
    
    
    $
    171,223
    
    
    $
    (103,479
    )
    
    $
    67,744
  5




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ADVANCED
BIOENERGY, LLC & SUBSIDIARIES
 
 Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
 Six Months EndedMarch 31,
    
    
    March 31,2011
    
    
    2010Cash flows from operating activities:Net income
    
    $
    3,903
    
    
    $
    11,260Adjustments to reconcile net income to operating activities cash flows:Depreciation
    
    
    11,226
    
    
    
    10,886Amortization of deferred financing costs
    
    
    66
    
    
    
    66Amortization of deferred revenue
    
    
    (337
    )
    
    
    (337
    )Idle lease liability reduction
    
    
    (154
    )
    
    
    (191
    )Amortization of debt discount
    
    
    
    
    
    
    308Amortization of additional carrying value
    
    
    (428
    )
    
    
    Unit compensation expense
    
    
    23
    
    
    
    23Gain on disposal of assets
    
    
    (8
    )
    
    
    Unrealized gain on derivative financial instruments
    
    
    (64
    )
    
    
    (35
    )Change in risk management activities
    
    
    314
    
    
    
    (425
    )Change in working capital components:Accounts receivable
    
    
    (2,500
    )
    
    
    (2,062
    )Inventories
    
    
    1,694
    
    
    
    (5,274
    )Prepaid expenses
    
    
    339
    
    
    
    (1,029
    )Accounts payable
    
    
    3,495
    
    
    
    1,288Accrued expenses
    
    
    2,930
    
    
    
    5,488Net cash provided by operating activities
    
    
    20,499
    
    
    
    19,966Cash flows from investing activities:Purchase of property and equipment
    
    
    (1,949
    )
    
    
    (672
    )Change in other assets
    
    
    (8
    )
    
    
    Decrease in restricted cash
    
    
    1,750
    
    
    
    5,450Net cash provided by (used in) investing activities
    
    
    (207
    )
    
    
    4,778Cash flows from financing activities:Payments on debt
    
    
    (13,799
    )
    
    
    (14,305
    )Proceeds from issuance of membership units and subscribed units
    
    
    
    
    
    
    1,254Repurchase of units
    
    
    
    
    
    
    (3
    )Payment of deferred financing costs
    
    
    
    
    
    
    (102
    )Net cash used in financing activities
    
    
    (13,799
    )
    
    
    (13,156
    )Net increase in cash and cash equivalents
    
    
    6,493
    
    
    
    11,588Beginning cash and cash equivalents
    
    
    22,772
    
    
    
    26,367Ending cash and cash equivalents
    
    $
    29,265
    
    
    $
    37,955Supplemental disclosure of non cash transactionsAccrued interest at HGF transferred to debt
    
    $
    
    
    
    $
    4,987Other receivable offset against equipment
    
    
    
    
    
    
    1,100Warrant obligation recognized as a liability
    
    
    
    
    
    
    489Supplemental disclosure of cash flow information:Cash paid for interest
    
    $
    2,393
    
    
    $
    2,429
  6




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ADVANCED BIOENERGY, LLC & SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  March 31, 2011 and 2010  (Unaudited)
 1. Organization and Significant Accounting Policies
   Cash, Cash Equivalents and Restricted Cash
  Fair Value Measurements
       Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3At March 31, 2011Liabilities  Warrant Derivative
    
    $
    410
    
    
    $
    
    
    
    $
    
    
    
    $
    410At September 30, 2010Assets
 Derivative Financial Instruments
    
    $
    314
    
    
    $
    314
    
    
    $
    
    
    
    $
    Liabilities  Warrant Derivative
    
    
    474
    
    
    
    
    
    
    
    
    
    
    
    474
 7




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March 31,
    
    
    September 30,2011
    
    
    2010Market value(1)
    
    $
    1.50
    
    
    $
    1.50Exercise price
    
    $
    1.50
    
    
    $
    1.50Expected volatility
    
    
    104.39
    %
    
    
    117.08
    %Expected life (years)
    
    
    1.75
    
    
    
    2.00Risk-free interest rate
    
    
    0.750
    %
    
    
    0.375
    %Forfeiture rate
    
    
    
    
    
    
    Dividend rate
    
    
    
    
    
    
    
 
 (1)
    
    Market value based on recent unit transactions.  2011
    
    
    2010Beginning balance of warrant derivative
    
    $
    474
    
    
    $
    489Unrealized gain related to the change in fair value
    
    
    (64
    )
    
    
    (35
    )Ending balance
    
    $
    410
    
    
    $
    454
 Receivables
  Derivative Instruments/Due From Broker
   Inventories
  Revenue Recognition
  8




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Income Per Unit
  Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2011
    
    
    2010Numerator:Net income for basic earnings per share
    
    $
    736
    
    
    $
    5,106
    
    
    $
    3,903
    
    
    $
    11,260Gain in fair
value of warrant derivative liability
    
    
    (30
    )
    
    
    (34
    )
    
    
    (64
    )
    
    
    (35
    )Net income for diluted earnings per share
    
    
    706
    
    
    
    5,072
    
    
    
    3,839
    
    
    
    11,225Denominator:Basic and diluted common shares outstanding
    
    
    24,705
    
    
    
    17,800
    
    
    
    24,705
    
    
    
    17,729Earnings per share basic
    
    $
    0.03
    
    
    $
    0.29
    
    
    $
    0.16
    
    
    $
    0.64Earnings per share diluted
    
    $
    0.03
    
    
    $
    0.28
    
    
    $
    0.16
    
    
    $
    0.63
 Accounting Estimates
  Risks and Uncertainties
  Contingencies
  9




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2. Inventories
  March 31,
    
    
    September 30,2011
    
    
    2010Corn
    
    $
    2,140
    
    
    $
    3,127Chemicals
    
    
    1,088
    
    
    
    1,107Work in process
    
    
    3,203
    
    
    
    2,104Ethanol
    
    
    3,079
    
    
    
    5,427Distillers grain
    
    
    600
    
    
    
    419Supplies and parts
    
    
    2,298
    
    
    
    1,918Total
    
    $
    12,408
    
    
    $
    14,102
 3. Property and Equipment
  March 31,
    
    
    September 30,2011
    
    
    2010Land
    
    $
    3,999
    
    
    $
    3,962Buildings
    
    
    21,341
    
    
    
    21,341Process equipment
    
    
    216,643
    
    
    
    215,962Office equipment
    
    
    1,373
    
    
    
    1,356Construction in process
    
    
    1,393
    
    
    
    234244,749
    
    
    
    242,855Accumulated depreciation
    
    $
    (72,317
    )
    
    $
    (61,154
    )Property and equipment, net
    
    $
    172,432
    
    
    $
    181,701
 10




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4. Debt and subsequent event
  March 31,2011
    
    
    March 31,
    
    
    September 30,Interest Rate
    
    
    2011
    
    
    2010ABE Fairmont:Senior credit facility  variable
    
    
    3.65
    %
    
    $
    34,866
    
    
    $
    45,050Senior credit facility  fixed
    
    
    7.53
    %
    
    
    20,000
    
    
    
    20,000Seasonal line
    
    
    3.35
    %
    
    
    
    
    
    
    Subordinate exempt facilities bonds  fixed
    
    
    6.75
    %
    
    
    6,185
    
    
    
    7,00061,051
    
    
    
    72,050ABE South Dakota:Senior debt principal  variable
    
    
    1.80
    %
    
    
    78,552
    
    
    
    81,352Restructuring fee
    
    
    N/A
    
    
    
    3,000
    
    
    
    3,000Additional carrying value of restructured debt
    
    
    N/A
    
    
    
    9,885
    
    
    
    10,31391,437
    
    
    
    94,665Total outstanding
    
    
    
    
    
    $
    152,488
    
    
    $
    166,715Additional carrying value of restructured debt
    
    
    N/A
    
    
    
    (9,885
    )
    
    
    (10,313
    )Stated principal
    
    
    
    
    
    $
    142,603
    
    
    $
    156,402
  Amortization ofAdditional CarryingStated
    
    
    Value ofPrincipal
    
    
    Restructured Debt
    
    
    Total2012
    
    $
    14,215
    
    
    $
    837
    
    
    $
    15,0522013
    
    
    14,215
    
    
    
    1,693
    
    
    
    15,9082014
    
    
    12,881
    
    
    
    2,439
    
    
    
    15,3202015
    
    
    13,815
    
    
    
    2,505
    
    
    
    16,3202016
    
    
    80,367
    
    
    
    2,411
    
    
    
    82,778Thereafter
    
    
    7,110
    
    
    
    
    
    
    
    7,110Total debt
    
    $
    142,603
    
    
    $
    9,885
    
    
    $
    152,488
 Senior Credit Facility for the Fairmont Plant
  11




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




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5. Major Customers
  (1)
    
    Hawkeye Gold must use commercially reasonable efforts to submit purchase orders for,
and ABE Fairmont and ABE South Dakota must sell, substantially all of the denatured fuel
grade ethanol produced by ABE Fairmont and ABE South Dakota,(2)
    
    a purchase and sale of ethanol under the Ethanol Agreements must be in the form of
either a direct fixed price purchase order, a direct index price purchase order, a
terminal storage purchase order, a transportation swap or similar transaction that is
mutually acceptable to the parties,(3)
    
    ABE Fairmont or ABE South Dakota will pay any replacement or other costs incurred by
Hawkeye Gold as a result of any failure to deliver by ABE Fairmont or ABE South Dakota,
respectively, and(4)
    
    with certain exceptions, ABE Fairmont and ABE South Dakota will sell substantially
all of the ethanol they produce to Hawkeye Gold. The initial term of the ABE Fairmont
Agreement is for two years, and provides for automatic renewal for successive 18 month
terms unless either party provides written notice of nonrenewal at least 180 days prior to
the end of any term. The initial terms of the ABE South Dakota Ethanol Agreements are for
three years and provide for automatic renewal for successive one-year terms unless either
party provides written notice of nonrenewal at least 180 days prior to the end of any
term.
  13




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March 31,
    
    
    March 31,2011
    
    
    2010Hawkeye Gold  Ethanol and Distiller GrainsSix months revenues (Since January 1, 2010 for prior year)
    
    $
    237,667
    
    
    $
    49,173Receivable balance at period end
    
    
    13,719
    
    
    
    6,150Gavilon  EthanolSix months revenues
    
    $
    
    
    
    $
    118,059Receivable balance at period end
    
    
    
    
    
    
    4,378Dakotaland  ABE South Dakota Distillers GrainsSix months revenues
    
    $
    6,614
    
    
    $
    7,229Receivable balance at period end
    
    
    588
    
    
    
    399
 6. Risk Management
  Quantity (000s)
    
    
    Amount
    
    
    Period CoveredCorn
    
    Purchase Contracts
    
    3,168 bushels
    
    $
    21,036
    
    
    July 2011Ethanol
    
    Sale Contracts
    
    17,852 gallons
    
    
    45,163
    
    
    May 2011Distillers grains
    
    Sale Contracts
    
    56 tons
    
    
    10,278
    
    
    June 2011
   Income Statement
    
    Realized
    
    
    Unrealized
    
    
    TotalClassification
    
    Gain
    
    
    Loss
    
    
    Gain (Loss)Three months ending March 31, 2011
    
    Cost of Goods Sold
    
    $
    
    
    
    $
    
    
    
    $
    Three months ending March 31, 2010
    
    Cost of Goods Sold
    
    
    419
    
    
    
    (1,334
    )
    
    
    (915
    )Six months ending March 31, 2011
    
    Cost of Goods Sold
    
    $
    90
    
    
    $
    
    
    
    $
    90Six months ending March 31, 2010
    
    Cost of Goods Sold
    
    
    766
    
    
    
    (1,012
    )
    
    
    (246
    )
 14




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Balance Sheet
    
    
    March 31,
    
    
    September 30,Classification
    
    
    2011
    
    
    2010Derivative financial instrument  futures contract
    
    Current Assets
    
    $
    
    
    
    $
    314
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Information Regarding Forward-Looking Statements
  
    
    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 affect 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 operation facilities may experience technical difficulties and not produce the
gallons of ethanol we expect and insurance proceeds may not be adequate to cover these
production disruptions;
    
    our units are subject to a number of transfer restrictions and no public market exists
for our units, and we do not is expect a public market to develop; and
    
    our ability to resolve all issues related to an arbitration involving us and our former
chief executive officer, and pending litigation brought by that officer against one of our
current directors.
  15




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General
  Overview
    DRY MILL PROCESS
   16




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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 full production 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 these Aberdeen facilities separately.      Plan of Operations Through March 31, 2012
  17




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##### Table of Contents



RESULTS OF OPERATIONS
 Quarter Ended March 31, 2011 Compared to Quarter Ended March 31, 2010
  Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010Sold/Consumed
    
    
    Average
    
    
    Sold/Consumed
    
    
    Average(In thousands)
    
    
    Net Price/Cost
    
    
    (In thousands)
    
    
    Net Price/CostEthanol (gallons)
    
    
    54,612
    
    
    $
    2.35
    
    
    
    48,889
    
    
    $
    1.73Dried distillers grains (tons)
    
    
    116
    
    
    
    159.47
    
    
    
    108
    
    
    
    102.43Wet/modified distillers grains (tons)
    
    
    86
    
    
    
    65.26
    
    
    
    95
    
    
    
    33.66Corn (bushels)
    
    
    19,469
    
    
    $
    5.96
    
    
    
    17,594
    
    
    $
    3.42Gas (mmbtus)
    
    
    1,391
    
    
    
    4.34
    
    
    
    1,356
    
    
    
    5.67
 Net Sales
  Cost of Goods Sold
  Gross Profit
  Selling, General, and Administrative Expenses
  18




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##### Table of Contents



Other Income
  Interest Expense
  RESULTS OF OPERATIONS
 Six Months Ended March 31, 2011 Compared to Six Months Ended March 31, 2010
  Six Months Ended
    
    
    Six Months EndedMarch 31, 2011
    
    
    March 31, 2010Sold/Consumed
    
    
    Average
    
    
    Sold/Consumed
    
    
    Average(In thousands)
    
    
    Net Price/Cost
    
    
    (In thousands)
    
    
    Net Price/CostEthanol (gallons)
    
    
    103,745
    
    
    $
    2.18
    
    
    
    98,912
    
    
    $
    1.68Dried distillers grains (tons)
    
    
    236
    
    
    
    140.53
    
    
    
    223
    
    
    
    97.42Wet/modified distillers grains (tons)
    
    
    165
    
    
    
    57.56
    
    
    
    183
    
    
    
    34.63Corn (bushels)
    
    
    37,047
    
    
    $
    5.32
    
    
    
    35,492
    
    
    $
    3.46Gas (mmbtus)
    
    
    2,797
    
    
    
    4.23
    
    
    
    2,732
    
    
    
    5.07
 Net Sales
  Cost of Goods Sold
  19




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##### Table of Contents



Gross Profit
  Selling, General, and Administrative Expenses
   Other Income
  Interest Expense
  TRENDS AND UNCERTAINTIES AFFECTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS
 Overview
   20




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##### Table of Contents



The Renewable Fuels Standard
  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
 21




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##### Table of Contents



Blending Incentives
  California Low Carbon Fuel Standard
   Imported Ethanol Tariffs
  Chinese Anti-Dumping Investigation
  COMPETITION
 Ethanol
  22




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##### Table of Contents



Distillers Grains
  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
  March 31,2011
    
    
    March 31,
    
    
    September 30,Interest Rate
    
    
    2011
    
    
    2010ABE Fairmont:Senior credit facility  variable
    
    
    3.65
    %
    
    $
    34,866
    
    
    $
    45,050Senior credit facility  fixed
    
    
    7.53
    %
    
    
    20,000
    
    
    
    20,000Seasonal line
    
    
    3.35
    %
    
    
    
    
    
    
    Subordinate exempt facilities bonds  fixed
    
    
    6.75
    %
    
    
    6,185
    
    
    
    7,00061,051
    
    
    
    72,050ABE South Dakota:Senior debt principal  variable
    
    
    1.80
    %
    
    
    78,552
    
    
    
    81,352Restructuring fee
    
    
    N/A
    
    
    
    3,000
    
    
    
    3,000Additional carrying value of restructured debt
    
    
    N/A
    
    
    
    9,885
    
    
    
    10,31391,437
    
    
    
    94,665Total outstanding
    
    
    
    
    
    $
    152,488
    
    
    $
    166,715Additional carrying value of restructured debt
    
    
    N/A
    
    
    
    (9,885
    )
    
    
    (10,313
    )Stated principal
    
    
    
    
    
    $
    142,603
    
    
    $
    156,402
  Amortization ofAdditional CarryingStated
    
    
    Value ofPrincipal
    
    
    Restructured Debt
    
    
    Total2012
    
    $
    14,215
    
    
    $
    837
    
    
    $
    15,0522013
    
    
    14,215
    
    
    
    1,693
    
    
    
    15,9082014
    
    
    12,881
    
    
    
    2,439
    
    
    
    15,3202015
    
    
    13,815
    
    
    
    2,505
    
    
    
    16,3202016
    
    
    80,367
    
    
    
    2,411
    
    
    
    82,778Thereafter
    
    
    7,110
    
    
    
    
    
    
    
    7,110Total debt
    
    $
    142,603
    
    
    $
    9,885
    
    
    $
    152,488
 25




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##### Table of Contents



SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Fair Value of Financial Instruments
  Inventories
  Property and Equipment
  Office equipment
    
    5-7 YearsProcess equipment
    
    10 YearsBuildings
    
    40 Years
  Revenue Recognition
  OFF-BALANCE SHEET ARRANGEMENTS
  GOVERNMENT PROGRAMS, TAX CREDITS AND TAX INCREMENT FINANCING
  26




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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
    
    
    123.6
    
    
    gallons
    
    
    10.0
    %
    
    $
    2.66
    
    
    $
    32.9Distillers grains
    
    
    0.37
    
    
    tons
    
    
    10.0
    %
    
    
    189.00
    
    
    
    6.9Corn
    
    
    56.9
    
    
    bushels
    
    
    10.0
    %
    
    
    6.93
    
    
    
    39.5Natural gas
    
    
    4.1
    
    
    mmbtus
    
    
    10.0
    %
    
    
    4.39
    
    
    
    1.8
 
 (1)
    
    The volume of ethanol at risk is based on the assumption that we will enter into
contracts for 36.6% 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 38.1% 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 18.2% 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 22.4% 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 March 31, 2011. INTEREST RATE/FOREIGN EXCHANGE RISK
   
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Stephenson v. Advanced BioEnergy, LLC. (Arbitration Matter)
  28




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##### Table of Contents



Stephenson v Clean Energy Capital, LLC and Scott Brittenham (Federal Court)
   29




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##### Table of Contents



Item 1A. Risk Factors
 There are no material changes from risk factors as previously discussed in our September 30,
2010 Annual Report on Form 10-K except as disclosed below.
 We are involved in arbitration with our former chief executive officer and an interim award
against us has been issued. We may be required to indemnify a current director for claims made
against him in a matter brought by that former officer.
  
 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
 Employment Agreement with Richard Peterson
    Nonqualified Option and Unit Appreciation Rights for Peterson
   
 30




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##### Table of Contents



Item 6. Exhibits
  31




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##### Table of Contents



SIGNATURES
  ADVANCED BIOENERGY, LLCDate: May 16, 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 Filing10.1
    
    Master Loan Agreement between
Farm Credit Services of
America, FLCA and ABE
Fairmont, LLC dated as of
April 7, 2011.
    
    Filed electronically10.2
    
    Multiple Advance Term Loan
Supplement between Farm
Credit Services of America,
FLCA and ABE Fairmont, LLC
dated as of April 7, 2011.
    
    Filed electronically10.3
    
    Monitored Revolving Credit
Supplement between Farm
Credit Services of America,
FLCA and ABE Fairmont, LLC
dated as of April 7, 2011.
    
    Filed electronically10.4
    
    Revolving Credit Supplement
between Farm Credit Services
of America, FLCA and ABE
Fairmont, LLC dated as of
April 7, 2011.
    
    Filed electronically10.5
    
    Second Amended and Restated
Employment Agreement dated as
of May 11, 2011 between the
Company and Richard Peterson.
    
    Filed electronically10.6
    
    Company Agreement with
Richard Peterson Unit
Appreciation Right with
Tandem Nonqualified Unit
Option dated May 15, 2011.
    
    Filed electronically31
    
    Rule 13a-14(a)/15d-14(a)
Certification by Principal
Executive Officer, Financial
and Accounting Officer.
    
    Filed Electronically32
    
    Section 1350 Certifications.
    
    Filed Electronically
 32