##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C. 20549
  Form 10-K
 (Mark One)þ

ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   Commission file number
    001-3320
  US BioEnergy
    Corporation
 (Exact name of Registrant as
    specified in its charter)
  South Dakota

20-1811472(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)5500 Cenex Drive, Inver Grove
    Heights, Minnesota(Address of principal
    executive offices)

55077(Zip
    Code)   Registrants telephone
    number, including area code:
 (651) 355-8300
  Securities Registered Pursuant
    to Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.01 par value
    per share


NASDAQ Global Market   Securities Registered Pursuant
    to Section 12(g) of the Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ
     DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 



TABLE OF
    CONTENTS
  
  PART IItem 1.


Business


3Item 1A.


Risk
    Factors


10Item 1B.


Unresolved Staff
    Comments


27Item 2.


Properties


27Item 3.


Legal
    Proceedings


28Item 4.


Submission of
    Matters to a Vote of Security Holders


28PART IIItem 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


30Item 6.


Selected Financial
    Data


31Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


32Item 7A.


Quantitative and
    Qualitative Disclosures about Market Risk


50Item 8.


Financial
    Statements and Supplementary Data


51Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


52Item 9A.


Controls and
    Procedures


52Item 9B.


Other
    Information


53PART IIIItem 10.


Directors,
    Executive Officers and Corporate Goverance


53Item 11.


Executive
    Compensation


53Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


53Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


54Item 14.


Principal
    Accountant Fees and Services


54PART IVItem 15.


Exhibits and
    Financial Statement Schedules


55Signatures


62SubsidiariesConsent of McGladrey & Pullen, LLPConsent of Kennedy and Coe, LLC302 Certification of Chief Executive Officer302 Certification of Chief Financial Officer906 Certification of Chief Executive Officer906 Certification of Chief Financial Officer   2




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##### Table of Contents



PART I    Item 1.
    Business  COMPANY
    OVERVIEW
          Date

MilestonesOctober 2004

We were founded by Gordon W. Ommen
    and Roland J. Ron FagenNovember 2004

We announced plans to develop and
    construct a 100 million gallon per year (mmgy) ethanol
    facility near Albert City, IowaApril 2005

We acquired Superior Corn
    Products, LLC, a company organized to develop, own and operate a
    50 mmgy ethanol facility near Woodbury township, MichiganMay 2005

We acquired United Bio Energy, LLC
    and established our marketing and services businessesMarch 2006

We acquired Gold Energy, LLC, a
    company organized to develop, own and operate a 100 mmgy ethanol
    facility near Hankinson, North Dakota, and began construction in
    August 2006We formed Provista, an ethanol
    marketing joint venture with CHS Inc.April 2006

We acquired Platte Valley Fuel
    Ethanol, LLC (Platte Valley), which owned and operated a 50 mmgy
    ethanol facility near Central City, NebraskaWe acquired Val-E Ethanol, LLC, a
    company organized to develop, own and operate a 50 mmgy ethanol
    facility near Ord, NebraskaJune 2006

We launched our
    Solomontmbranded distillers grains programSeptember 2006

Our 50 mmgy Woodbury facility
    began productionNovember 2006

We completed a 50 mmgy expansion
    of our Platte Valley facilityWe completed construction of our
    100 mmgy Albert City facilityWe began construction of a 100
    mmgy ethanol facility near Dyersville, IowaDecember 2006

We completed our Initial Public
    OfferingJanuary 2007

We began construction of a 100
    mmgy ethanol facility near Janesville, MinnesotaFebruary 2007

We formed Big River Grinnell, LLC
    (Grinnell), a joint venture company with Big River Resources,
    LLC, to construct, own and operate a 100 mmgy ethanol facility
    near Grinnell, Iowa and began construction  3




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SEGMENT
    INFORMATION
    PRODUCTION
      tm
   4




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FACILITIES
    IN PRODUCTION
    Plants in operationPlatte Valley


Woodbury


Albert CityLocation


Central City, Nebraska



Lake Odessa, Michigan



Albert City, IowaProduction Start Date


May 2004



September 2006



November 2006Estimated Ethanol Production
    Capacity per year (mmgy)


100



50



100Estimated Distillers Grains
    Production per year (tons)


454,000
(1)


160,000



320,000Estimated Corn Processed per
    year (bushels)


36 million



18 million



36 millionEstimated Natural Gas usage per
    year (MMBTU)


2,100



1,400



2,900Production Process


Dry-Mill



Dry-Mill



Dry-MillPrimary Energy Source


Natural Gas



Natural Gas



Natural GasBuilder


Fagen



Fagen



Fagen     (1)
    
    Platte Valley produces all modified wet distillers grain,
    which has a higher water content than dried distillers grain.
    Producing modified wet distillers grains requires less heat and
    therefore, uses fewer MMBTUs of natural gas.  FACILITIES
    UNDER CONSTRUCTION
    Hankinson,North





Janesville,Location

Ord, Nebraska


Dakota


Dyersville, Iowa


Minnesota


Grinnell, IowaEstimated Expected Production
    Start Date


Q2 2007



Q2 2008



Q2 2008



Q3 2008



Unknown
(1)Estimated Ethanol Production
    Capacity per year (mmgy)


50



100



100



100



50
(1)Estimated Distillers Grains
    Production per year (tons)


160,000



320,000



320,000



320,000



160,000
(1)Estimated Corn Processed per
    year (bushels)


18 million



36 million



36 million



36 million



18 million
(1)Estimated Natural Gas usage per
    year (MMBTU)


1.5 million



3.5 million



3.5 million



3.5 million



1.5 million
(1)Production Process


Dry-Mill



Dry-Mill



Dry-Mill



Dry-Mill



Dry-MillPrimary Energy Source


Natural Gas



Natural Gas



Natural Gas



Natural Gas



Natural GasBuilder


Fagen



Fagen



Fagen



Fagen



Fagen     (1)
    
    Represents 50% of the 100 mmgy ethanol production capacity of
    the planned Grinnell facility. In February 2007, we entered into
    an operating agreement with Big River Resources, LLC to jointly
    develop this facility. Under the terms of this agreement, we
    will each own a 50% interest in the Grinnell facility. Site work
    at our Grinnell facility is currently in progress, however due
    to pending lawsuits relating to zoning issues at the facility,
    the ability to secure debt financing for the Grinnell facility
    has been delayed. As a result, a date has not been set to
    mobilize Fagen, Inc., the design-builder for the project, to
    start the next phase of construction for the Grinnell
    facility. 5




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Plant
    Site Selection
          ADDITIONAL
    SITES
    RAW
    MATERIALS
           6




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MARKETING
    AND SERVICES
    Provista
          UBE
    Ingredients
  tm
  UBE
    Services
    COMPETITION
     7




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CUSTOMERS
    SEASONALITY
    ENVIRONMENTAL
   8




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and/or
  and/or and/or and/or
       9




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EMPLOYEES
    CORPORATE
    INFORMATION
  (651) 355-8300. Form 10-K, 10-Q 8-K
  Item 1A.
    Risk
    Factors    We may
    not be able to implement our expansion strategy as planned or at
    all.
         10




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We
    generally do not have long-term sales, input or throughput
    contracts, which makes our business highly dependent on
    commodity prices. These prices are subject to significant
    volatility and uncertainty, so our results could fluctuate
    significantly.
   11




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The
    spread between ethanol and corn prices can vary significantly
    and during 2006 was at historically high levels.
    Our
    business is highly sensitive to corn prices, and we generally
    cannot pass on increases in corn prices to our
    customers.
        The
    market for natural gas is subject to market conditions that
    create uncertainty in the price and availability of the natural
    gas that we utilize in the ethanol manufacturing
    process.
   12




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Fluctuations
    in the selling price and production cost of gasoline may reduce
    our profit margins.
    The price
    of distillers grains is affected by the price of other commodity
    products, such as soybeans, and decreases in the price of these
    commodities could decrease the price of distillers
    grains.
    Our
    business is subject to seasonal fluctuations.
    The use
    and demand for ethanol and its supply are highly dependent on
    various federal and state legislation and regulation, and any
    changes in legislation or regulation could cause the demand for
    ethanol to decline or its supply to increase, which could have a
    material adverse effect on our business, results of operations
    and financial condition.
    The
    elimination or significant reduction in the federal ethanol tax
    incentive or the elimination or expiration of other federal or
    state incentive programs could have a material adverse effect on
    our business, results of operations and financial
    condition.
   13




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The
    effect of the Renewable Fuels Standard, or RFS, in the recent
    Energy Policy Act of 2005 on the ethanol industry is
    uncertain.
      Tariffs
    effectively limit imported ethanol into the U.S., and their
    reduction or elimination could undermine the ethanol industry in
    the U.S.
   14




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Waivers
    of the RFS minimum levels of renewable fuels included in
    gasoline could have a material adverse effect on our business,
    results of operations and financial condition.
    Various
    studies have criticized the efficiency of ethanol, which could
    lead to the reduction or repeal of incentives and tariffs that
    promote the use and domestic production of ethanol.
    As more
    ethanol plants are built, ethanol production will increase and,
    if demand does not sufficiently increase, the price of ethanol
    and distillers grains may decrease.
       15




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We face
    intense competition from competing ethanol and other fuel
    additive producers.
          We have a
    limited operating history and a history of losses, and our
    business may not be as successful as we envision.
      
    effectively manage our business and operations;
    recruit and retain key personnel;
    successfully maintain our low-cost structure as we expand the
    scale of our business;
    manage rapid growth in personnel and operations;
    develop new products that complement our existing
    business; and
    successfully address the other risks described throughout this
    Annual Report on
    Form 10-K. 16




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Potential
    future acquisitions could be difficult to find and integrate,
    divert the attention of key personnel, disrupt our business,
    dilute shareholder value and adversely affect our financial
    results.
      
    difficulties in integrating the operations, technologies,
    products, existing contracts, accounting processes and workforce
    of the target and realizing the anticipated synergies of the
    combined businesses;
    difficulties in supporting and transitioning customers, if any,
    of the target company or assets;
    diversion of financial and management resources from existing
    operations;
    the price we pay or other resources that we devote may exceed
    the value we realize, or the value we could have realized if we
    had allocated the purchase price or other resources to another
    opportunity;
    risks of entering new markets or areas in which we have limited
    or no experience or are outside our core competencies;
    potential loss of key employees, customers and strategic
    alliances from either our current business or the business of
    the target;
    assumption of unanticipated problems or latent liabilities, such
    as problems with the quality of the products of the
    target; and
    inability to generate sufficient revenue to offset acquisition
    costs.      Growth in
    the sale and distribution of ethanol is dependent on the changes
    in and expansion of related infrastructure which may not occur
    on a timely basis, if at all, and our operations could be
    adversely affected by infrastructure disruptions.
    
    additional rail capacity;
    additional storage facilities for ethanol;
    increases in truck fleets capable of transporting ethanol within
    localized markets; 17




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
    expansion of refining and blending facilities to handle ethanol;
    growth in service stations equipped to handle ethanol
    fuels; and
    growth in the fleet of flexible fuel vehicles capable of using
    e85 fuel.    We engage
    in hedging transactions which involve risks that can harm our
    business.
    Operational
    difficulties at our plants could negatively impact our sales
    volumes and could cause us to incur substantial
    losses.
     18




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We may be
    adversely affected by environmental, health and safety laws,
    regulations and liabilities.
  and/or
      and/or and/or
     19




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We do not
    own or control some of the assets we depend on to operate our
    business.
        As we
    expand our ethanol production business, we may become limited in
    our ability to provide services to third-party ethanol
    producers.
    Disruptions
    to infrastructure, or in the supply of fuel, natural gas or
    water, could materially and adversely affect our
    business.
   20




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Our
    historical financial information is not comparable to our
    current financial condition and results of operations.
          Our
    managements time and attention will be divided among our
    ethanol plants, and our ethanol plants will be part of one
    common management strategy.
   21




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Competition
    for qualified personnel in the ethanol industry is intense and
    we may not be able to hire and retain qualified personnel to
    operate our ethanol plants.
    Technological
    advances could significantly decrease the cost of producing
    ethanol or result in the production of higher-quality ethanol,
    and if we are unable to adopt or incorporate technological
    advances into our operations, our proposed ethanol plants could
    become uncompetitive or obsolete.
        Our
    existing debt financing agreements contain and our future debt
    financing agreements may contain restrictive covenants that
    limit distributions and impose restrictions on the operation of
    our business. Our failure, or the failure of any of our
    subsidiaries, to comply with applicable debt financing covenants
    and agreements could have a material adverse effect on our
    business, results of operations and financial
    condition.
      
    Limiting our ability to obtain additional debt or equity
    financing; 22




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
    Making us vulnerable to increases in prevailing interest rates;
    Placing us at a competitive disadvantage because we may be
    substantially more leveraged than some of our competitors;
    Subjecting all or substantially all of our assets to liens,
    which means that there may be no assets left for shareholders in
    the event of a liquidation;
    Limiting our ability to adjust to changing market conditions,
    which could make us more vulnerable to a downturn in the general
    economic conditions of our business; and
    Limiting our ability to make business and operational decisions
    regarding our business and our subsidiaries, including, among
    other things, limiting our ability to pay dividends to our
    shareholders, make capital improvements, sell or purchase assets
    or engage in transactions we deem to be appropriate and in our
    best interest.      Our management and auditors have identified material
    weaknesses in the design or operation of our internal controls
    that, if not properly remediated, could result in material
    misstatements in our financial statements in future periods.
     23




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Form 10-Q
            As a
    result of our IPO in December 2006, we are subject to financial
    reporting and other requirements for which our accounting,
    internal audit and other management systems and resources may
    not be adequately prepared.
  Sarbanes-Oxley
 24




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We are a
    holding company, and there are limitations on our ability to
    receive distributions from our subsidiaries.
    Certain
    of our shareholders exert significant influence over us. Their
    interests may not coincide with our or the interests of our
    stockholders, and they may make decisions with which we or our
    stockholders may disagree.
      The
    market price of our common stock may be volatile.
    
    actual or anticipated fluctuations in our operating results;
    actual or anticipated changes in our growth rates or our
    competitors growth rates;
    conditions in our industry generally;
    conditions in the financial markets in general or changes in
    general economic conditions;
    our ability to raise additional capital;
    changes in market prices for ethanol, distillers grains or our
    raw materials, such as corn or natural gas;
    the expiration, on or about June 13, 2007, of the
    lock-up
    agreements that our directors, executive officers and certain
    shareholders (who, in the aggregate, beneficially own 77.6% of
    our outstanding common stock) entered into in connection with
    our IPO and sales of a substantial number of these shares in the
    public market, or the perception that these sales could occur,
    and; 25




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
    changes in stock market analyst recommendations regarding our
    common stock, other comparable companies or our industry
    generally.  CAUTIONARY
    STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE
    PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
  Form 10-K
  Form 10-K,
  Form 10-K. Form 10-K.
  Form 10-K, Form 10-K.
  
    our ability to implement our expansion strategy as planned or at
    all;
    the volatility and uncertainty of commodity prices;
    changes in current legislation or regulations that affect
    ethanol supply and demand;
    changes in ethanol supply and demand;
    our ability to compete effectively in the industry;
    our limited operating history and history of operating losses;
    our ability to successfully locate and integrate future
    acquisitions;
    development of infrastructure related to the sale and
    distribution of ethanol;
    the results of our hedging transactions;
    operational difficulties at our ethanol plants;
    the adverse effect of environmental, health and safety laws,
    regulations and liabilities;
    our less than 100% ownership of and control over certain assets
    used in our business;
    our ability to provide services to competing third-party
    producers;
    disruptions to infrastructure or in the supply of raw materials;
    the limited use of our historical financial information in
    evaluating our performance;
    the division of our managements time and energy among our
    different ethanol plants; 26




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
    competition for qualified personnel in the ethanol industry;
    our ability to keep pace with technological advances;
    the restrictive covenants in our debt financing agreements;
    the material weakness and reportable conditions identified in
    our internal controls;
    we are subject to financial reporting and other requirements for
    which we may not be adequately prepared;
    our status as a holding company;
    certain of our shareholders could exert significant influence
    over us; and
    the market price of our common stock may be volatile.  Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Owned, JointFacility Name

Location

Venture or LeasedPlants in
    Operation:(1)Platte Valley

Central City, Nebraska


OWoodbury

Lake Odessa, Michigan


OAlbert City

Albert City, Iowa


OPlants under
    Construction:(1)Ord

Ord, Nebraska


OHankinson

Hankinson, North Dakota


ODyersville

Dyersville, Iowa


OGrinnell

Grinnell,
    Iowa(2)


JVJanesville

Janesville,
    Minnesota(3)


OOther Properties:Principal executive offices

Inver Grove Heights, Minnesota


LOffice space

Brookings, South Dakota


LUBE office space

Wichita, Kansas


L     1)
    
    All of our ethanol plants in operation or under construction
    are subject to encumbrance under the debt financing agreements
    used to finance the construction of the applicable plants. For a
    brief description of our debt financing agreements, see
    Liquidity and Capital Resources in Item 7.
    Additional information regarding the capacities of our ethanol
    plants is included in Item 1. Business.2)
    
    Represents 50% of the 100 mmgy ethanol production capacity
    of the planned Grinnell facility. In February 2007, we entered
    into an operating agreement with Big River Resources, LLC to
    jointly develop this facility. Under the terms of this
    agreement, we will each own a 50% interest in the Grinnell
    facility. Site work at our Grinnell facility is currently in
    progress, however due to pending lawsuits relating to zoning
    issues at the facility, the ability to secure debt financing for
    the Grinnell facility has been delayed. As a result, a date has
    not been set to mobilize Fagen, Inc., the design-builder for the
    project, to start the next phase of construction for the
    Grinnell facility.3)
    
    Construction on the Janesville, Minnesota facility began in
    January 2007. 27




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Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders    
    to increase the authorized indebtedness of the Company to an
    amount not to exceed $5 billion outstanding at any one
    time, such indebtedness to be in such form and have such terms
    and conditions as determined by the Board of Directors from time
    to time in its discretion;
    to increase the authorized capital stock of the Company to
    750,000,000 shares of common stock and
    75,000,000 shares of preferred stock; and
    to ratify, confirm, approve, authorize and adopt in all respects
    all prior increases in the authorized indebtedness and capital
    stock of the Company.      
    to approve the Second Amended and Restated Article of
    Incorporation of the Company, which amend and restate the
    previously amended and restated Articles of Incorporation in
    their entirety to, among other things, effect the reverse stock
    split of the Companys outstanding common stock in a split
    ratio of 1 for 4;
    to approve the adoption of the Companys 2006 Stock
    Incentive Plan; and
    to approve the adoption of the Companys 2006 Employee
    Stock Purchase Plan.    EXECUTIVE
    OFFICERS
    Name

Age

PositionGordon W. Ommen


48


Chief Executive Officer, Chairman
    of the Board and PresidentRichard K. Atkinson


55


Senior Vice President and Chief
    Financial OfficerChad D. Hatch


37


Vice President of Corporate
    DevelopmentKim Y. Regenhard


49


Vice President of Human Resources
    and CommunicationsGregory S. Schlicht


35


Vice President, General Counsel
    and Corporate Secretary  28




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Gordon
    W. Ommen
  Mr. Ommen
  Richard
    K. Atkinson
  Mr. Atkinson
  Chad
    D. Hatch
  Mr. Hatch
  Kim Y.
    Regenhard
  Ms. Regenhard
  Gregory
    S. Schlicht
  Mr. Schlicht
 29




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  MARKET
    INFORMATION FOR COMMON STOCK
    2006

High


LowFourth quarter (from
    December 15, 2006)

$
17.37


$
14.05     DIVIDEND
    POLICY
    RECENT
    SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM
    REGISTERED SECURITIES
  Form S-1 Nos. 333-136279 333-139364)
      Repayment of subordinated credit
    facilities

$
6.8Construction of facilities


8.2
(1)Temporary money market investments


134.7     1)
    
    Proceeds were used to fund construction costs at our
    Hankinson, Janesville and Dyersville facilities. Of this amount,
    $7.2 million was paid to Fagen, Inc., one of our largest
    shareholders, primarily for mobilization at the site of our
    Hankinson facility. 30




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Item 6.
    Selected
    Financial Data      Form 10-K.
  United





United


ICMBio Energy


US BioEnergy


Bio Energy


Marketing(Predecessor)


(Successor)


(Predecessor)


(Predecessor)US BioEnergy (Successor)


January 1 to


October 28 toYears Ended December 31,


April 30,


December 31,


Years Ended December 31,2006


2005


2005


2004


2004


2003


2002(Unaudited)(In thousands, except per share data)Consolidated Statements of
    Operations Data:RevenuesProduct sales

$
111,966


$
9,633


$
3,592


$



$
30,777


$
34,107


$
24,738Services and commissions


8,839



6,782



2,849







4,876



1,057



626Other revenue


3,730























Total revenues


124,535



16,415



6,441







35,653



35,164



25,364Cost of goods soldCost of product sales


73,177



9,467



3,489







30,412



33,747



24,465Cost of services and commissions


5,190



3,520



2,926







3,209



968



773Total cost of goods sold


78,367



12,987



6,415







33,621



34,715



25,238Gross profit


46,168



3,428



26







2,032



449



126Selling, general and administrative
    expenses


27,089
(1)


8,016



1,043



55



2,714



682



379Operating income (loss)


19,079



(4,588
)


(1,017
)


(55
)


(682
)


(233
)


(253
)Other income (expense):Interest expense


(2,076
)


(467
)


(119
)






(219
)


(74
)


(142
)Interest income


2,436



319







1











Other income


9,814



104











54







Equity in net income of
    unconsolidated subsidiary


456























Minority interest in net loss of
    subsidiary


391























Income (loss) before income taxes


30,100



(4,632
)


(1,136
)


(54
)


(847
)


(307
)


(395
)Income tax (expense) benefit


(9,668
)


401



















Net income (loss)

$
20,432


$
(4,231
)

$
(1,136
)

$
(54
)

$
(847
)

$
(307
)

$
(395
) 31




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##### Table of Contents



United





United


ICMBio Energy


US BioEnergy


Bio Energy


Marketing(Predecessor)


(Successor)


(Predecessor)


(Predecessor)US BioEnergy (Successor)


January 1 to


October 28 toYears Ended December 31,


April 30,


December 31,


Years Ended December 31,2006


2005


2005


2004


2004


2003


2002(Unaudited)(In thousands, except per share data)Per Share Data:Earnings (loss) per common
    shares(2)Basic

$
0.41


$
(0.38
)





$
(0.07
)Diluted

$
0.41


$
(0.38
)





$
(0.07
)Weighted average common
    shares(2)Basic


49,522



11,182







808Diluted


50,440



11,182







808   US BioEnergy


United Bio Energy(Successor)


(Predecessor)


ICM Marketing (Predecessor)December 31,2006


2005


2004


2004


2003


2002(Unaudited)(In thousands)Balance Sheet Data:Cash and cash equivalents

$
170,099


$
40,450


$
758


$
412


$
716


$
878Working capital (deficit)


168,008



34,980



560



(692
)


383



(194
)Total assets


733,790



156,822



1,391



22,641



9,486



8,007Debt(3)


150,074



6,565







6,671



1,368



958Shareholders equity (deficit)


484,378



102,450



1,192



703



(1
)


1Statement of Cash Flows
    Data:Capital expenditures


206,010



53,388



441



682



188



38Depreciation and amortization


7,518



809















     1)
    
    On May 23, 2006, we terminated a financial advisory
    services agreement with Capitaline Advisors, LLC. In connection
    with this termination, we paid Capitaline Advisors a termination
    fee of $4.8 million, which we expensed in the second
    quarter of 2006.2)
    
    Due to the significant change in capital structure at the
    closing of our May 1, 2005 acquisition of United Bio
    Energy, the predecessor amount has not been presented because it
    is not considered comparable to the amounts for US BioEnergy.3)
    
    Represents total debt, including short-term notes payable and
    any amounts outstanding under our senior secured credit
    facilities  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion should be read in conjunction with
    Selected Financial Data and our consolidated
    financial statements and accompanying notes included elsewhere
    in this Annual Report on
    Form 10-K.
    The following discussion contains forward-looking statements
    that reflect our plans, estimates and beliefs. Our actual
    results could differ materially from those discussed in the
    forward-looking statements. Factors that could cause or
    contribute to these differences include those discussed below
    and elsewhere in this Annual Report on
    Form 10-K,
    particularly in Risk Factors.
  OUR
    COMPANY
   32




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##### Table of Contents



EXECUTIVE
    OVERVIEW
    
    in March 2006, we raised approximately $94.4 million
    through a private placement of our common stock;
    in March 2006, we sold 50% of our membership interest in our
    wholly owned subsidiary, Provista to CHS, Inc. for
    $2.4 million, plus the assignment by CHS of a fuel delivery
    contract. For the period beginning April 1, 2006 and ending
    August 31, 2006, we continued to consolidate the operations
    of Provista because it was a variable interest entity and we
    were the primary beneficiary as the result of a significant
    receivable owed to us by Provista and our guarantee of
    Provistas debt. On August 31, 2006, our guarantee of
    Provistas debt was terminated and Provista repaid all
    outstanding debts to us. For the period beginning
    September 1, 2006 and ending December 31, 2006,
    Provista has been treated as an unconsolidated subsidiary and
    our 50% share of its net income or loss is recognized under the
    equity method of accounting. In December 2006, we recognized a
    gain on the sale of Provista of $1.8 million, which had
    previously been deferred;
    in March 2006, we acquired Gold Energy, LLC, now referred to as
    Hankinson, a company organized to develop, own and operate a 100
    mmgy ethanol plant near Hankinson, North Dakota;
    in April 2006, we acquired Platte Valley Fuel Ethanol, LLC, now
    referred to as Platte Valley , which owned and operated a 50
    mmgy ethanol plant near Central City, Nebraska. Platte Valley
    has been producing ethanol at this facility since October 2004;
    in April 2006, we acquired Val-E Ethanol, LLC, now referred to
    as Ord, a company organized to develop, own and operate a 50
    mmgy ethanol plant near Ord, Nebraska;
    in September 2006, our 50 mmgy Woodbury facility in Michigan
    began production;
    in November 2006, we completed a 50 mmgy expansion at our Platte
    Valley facility;
    in December 2006, our 100 mmgy Albert City, Iowa facility began
    production;
    in December 2006, we completed our initial public offering
    (IPO), in which we sold 11,500,000 shares of our common
    stock at a price to the public of $14.00 per share. Net
    proceeds of the IPO, after deducting the underwriters discount
    and commissions, were $149.7 million; 33




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##### Table of Contents




    in December 2006, we sold one of our build slots under a
    master-design build agreement with Fagen, Inc. for
    $12.0 million, $8.0 of which we received and recognized as
    other income in fiscal 2006. The additional $4.0 million
    has not been recorded in our financial statements and will be
    recognized when certain terms of the agreement are met.    COMPONENTS
    OF REVENUES AND EXPENSES
      Revenues.
     34




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##### Table of Contents



Cost of Goods Sold and Gross
    Profits.
        Selling, General and Administrative
    Expenses.
  Interest Expense.
 35




---



##### Table of Contents



Interest Income.
  Income Taxes.
  RESULTS
    OF OPERATIONS
     36




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##### Table of Contents



CONSOLIDATED
    RESULTS
    For the Years Ended December 31,2006


2005


2004(Dollars in thousands, except as noted)Total revenues

$
124,535



100.0
%

$
16,415



100.0
%

$




Cost of goods sold


78,367



62.9



12,987



79.1







Gross profit


46,168



37.1



3,428



20.9







Selling, general and
    administrative expenses


27,089



21.8



8,016



48.8



55



Operating income (loss)


19,079



15.3



(4,588
)


(28.0
)


(55
)


Other income (expense):Interest expense


(2,076
)


(1.7
)


(467
)


(2.8
)






Interest income


2,436



2.0



319



1.9



1



Other income


9,814



7.9



104



0.6







Equity in net income of
    unconsolidated subsidiary


456



0.4















Minority interest in net loss of
    subsidiary


391



0.3















30,100



24.2



(4,632
)


(28.2
)


(54
)


Income tax (expense) benefit


(9,668
)


(7.8
)


401



2.4







Net income (loss)

$
20,432



16.4
%

$
(4,231
)


(25.8
)%

$
(54
)


   Year EndedDecember 31,2006Additional Data:Ethanol sold (thousands of gallons)


49,604Ethanol average gross price per
    gallon(1)

$
1.86Distillers grains average sales
    per gallon of ethanol
    sold(1)

$
0.23Corn costs per gallon of ethanol
    sold(2)

$
0.65Natural gas costs per gallon of
    ethanol
    sold(3)

$
0.22Corn costs per
    bushel(4)

$
1.94     (1)
    
    Represents the gross sales dollars, net of freight and
    commissions, for each respective product divided by the gallons
    of ethanol sold.(2)
    
    Represents the corn costs, including freight, commissions,
    hedging gains or losses or other related costs divided by the
    gallons of ethanol sold.(3)
    
    Represents natural gas costs, including hedging gains or
    losses, divided by the gallons of ethanol sold.(4)
    
    Represents corn costs, net of hedging gains of $0.57 per
    bushel.  RESULTS
    OF OPERATIONS  FISCAL 2006 COMPARED TO FISCAL
    2005
  Total Revenues.
 37




---



##### Table of Contents



Cost of Goods Sold.
         38




---



##### Table of Contents



Gross Profits.
  Selling, General and Administrative
    Expenses.
  Interest Expense.
  Interest Income.
  Other Income.
  Equity in Net Income of Subsidiary.
 39




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##### Table of Contents



Minority Interest in Net Loss of
    Subsidiary.
  Pretax Income (Loss).
  Income Taxes.
  RESULTS
    OF OPERATIONS  FISCAL 2005 COMPARED TO THE PERIOD
    FROM OCTOBER 28, 2004 TO DECEMBER 31,
    2004
  Total Revenues.
     40




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##### Table of Contents



Cost of Goods Sold.
      Gross Profit.
  Selling, General and Administrative
    Expenses.
  Interest Expense.
  Interest Income.
  Pretax Loss.
  Income Taxes.
 41




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##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
  CASH
    FLOW
  Cash Flows Used in Operating Activities.
  Cash Used in Investing Activities.
  Cash Provided by Financing Activities.
     42




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##### Table of Contents



PRODUCTION
    CAPACITY EXPANSION
  start-up
  Ord


Hankinson


Dyersville


Janesville(2)


Total(Dollars in thousands)Estimated production


Q2



Q2



Q2



Q2start date


2007



2008



2008



2008Estimated Ethanol Production
    Capacity per year (mmgy)


50



100



100



100



350Total Estimated Construction Costs

$
71.5


$
146.0


$
163.0


$
138.0


$
518.5Estimated Remaining Construction
    Costs

$
23.0


$
134.0


$
160.0


$
135.2


$
452.2Amount to be Funded Under Planned
    Credit
    Facilities(1)

$
23.0


$
87.6


$
97.8


$
82.8


$
291.2     1)
    
    In February 2007, we entered into credit facilities to
    provide the debt financing for these facilities. See
    Credit Arrangements.2)
    
    Construction on the Janesville, Minnesota facility began in
    January 2007.          CREDIT
    ARRANGEMENTS
   43




---



##### Table of Contents



44




---



##### Table of Contents



Albert


PlatteCity


Valley


Woodbury


Total(Dollars in thousands)Construction loans:Senior secured
    facilities:Total capacity

$
75,000
(1)

$
47,300
(2)

$



$
122,300Letters of credit


2,717



210







2,927Outstanding borrowings


72,283



18,437







90,720Total available capacity






28,653







28,653Revolving construction
    loans:Total capacity






5,000







5,000Outstanding borrowings














Total available capacity






5,000







5,000Term loans:Seasonal revolving
    loans:Total capacity










3,500



3,500Letters of credit










855



855Outstanding borrowings










1,500



1,500Total available capacity










1,145



1,145Senior secured
    facilities:Total capacity






18,388



27,660



46,048Outstanding borrowings






18,388
(2)


27,660



46,048Total available capacity














Revolving term loans:Total capacity










8,000



8,000Outstanding borrowings










8,000



8,000Total available capacity














TotalTotal capacity


75,000



70,688



39,160



184,848Letters of credit


2,717



210



855



3,782Outstanding borrowings


72,283



36,825
(3)


37,160



146,268Total available capacity

$



$
33,653


$
1,145


$
34,798Community redevelopment revenue
    bonds













$
3,491Note payable














315Total debt













$
150,074     1)
    
    This construction loan was converted on March 1,
    2007.2)
    
    Includes $1.0 million letter of credit facility with
    First National Bank of Omaha.3)
    
    In February 2007, Platte Valley borrowed $90.0 million
    under a new credit facility to refinance these credit facilities
    and to repay us for amounts that we had funded for their
    expansion that was in excess of 40% of the construction
    costs. 45




---



##### Table of Contents



Platte Valley


Ord


Hankinson


Dyersville


Janesville


Total(Dollars in thousands)Construction loans:Senior secured facilities





$
41,500


$
90,100


$
100,300


$
85,300


$
317,200Letters of credit






5,000



5,000



5,000



5,000



20,000Seasonal revolving loan






10,000



10,000



10,000



10,000



40,000Total available capacity





$
56,500


$
105,100


$
115,300


$
100,300



377,200Term loans:Total capacity

$
90,000



















90,000Seasonal revolving loan


10,000



















10,000Total available capacity

$
100,000



















100,000Total available
    capacity





















$
477,200Total estimated construction costs





$
71,500


$
146,000


$
163,000


$
138,000


$
518,50060% Funded with Debt





$
42,900


$
87,600


$
97,800


$
82,800


$
311,100     OFF-BALANCE
    SHEET ARRANGEMENTS
   46




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##### Table of Contents



CONTRACTUAL
    OBLIGATIONS
    2007


2008


2009


2010


2011


Thereafter


Total(Dollars in thousands)Long-term debt
    obligations(1)

$
15,174


$
16,689


$
24,410


$
12,345


$
39,034


$
74,834


$
182,486Operating lease
    obligations(2)


8,844



9,628



8,721



8,579



6,543



6,443



48,758Other purchase
    obligations(3)


332,314



10,849



314















343,477Construction
    obligations(4)


261,716



72,296



















334,012Total contractual obligations

$
618,048


$
109,462


$
33,445


$
20,924


$
45,577


$
81,277


$
908,733     1)
    
    Amounts represent principal payments and interest due under
    our senior secured credit facilities.2)
    
    Operating lease obligations consist primarily of rail cars
    and office space.3)
    
    Purchase obligations include corn and natural gas for our own
    production facilities and corn and distillers grains for
    third-party plant customers. Under our third-party plant
    contracts, we generally have an offsetting sales contract on
    behalf of the same customer. Accordingly, our exposure to market
    risk under these third-party plant contracts as a result of
    price fluctuations is limited.4)
    
    Amounts represent construction obligations due under our
    master-design build agreements.  INFLATION
    SEASONALITY
    SUMMARY
    OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   47




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##### Table of Contents



Revenue
    Recognition for Production.
      Revenue
    Recognition for Marketing and Services.
            Long
    Lived Assets and Goodwill.
        Stock-Based
    Compensation.
   48




---



##### Table of Contents



Derivative
    Financial Instruments.
        RECENT
    ACCOUNTING PRONOUNCEMENTS
   49




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk      over-the-counter
  Form 10-K
       50




---



##### Table of Contents



Hypothetical


Change in


PercentageChange in


Annual Gross


Change inUnits

Price


Profit


Gross Profit(In millions)







(Dollars in millions)Corn


19.0


bushels


10
%

$
3.7



16
%Ethanol


49.6


gallons


10
%

$
9.2



38
%Distillers Grains


0.24


tons


10
%

$
1.1



5
%Natural Gas


1.4


MMBTU


10
%

$
1.2



5
%   Item 8.
    Financial
    Statements and Supplementary Data  page F-1
 51




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##### Table of Contents



SELECTED
    QUARTERLY FINANCIAL DATA (UNAUDITED)
  Quarter1st


2nd


3rd


4th(In thousands, except per share data)2006Revenues

$
6,019


$
21,095


$
33,250



64,171Gross profit

$
624


$
6,389


$
9,582



29,573Net (loss) income

$
(1,378
)

$
(1,655
)

$
2,510



20,955Net (loss) income per common share:Basic

$
(0.04
)

$
(0.03
)

$
0.04


$
0.36Diluted

$
(0.04
)

$
(0.03
)

$
0.04


$
0.352005Revenues

$



$
3,902


$
6,144


$
6,369Gross profit

$



$
740


$
1,093


$
1,595Net (loss) income

$
(353
)

$
(224
)

$
(432
)

$
(3,222
)Net (loss) income per common share:Basic

$
(0.13
)

$
(0.05
)

$
(0.04
)

$
(0.12
)Diluted

$
(0.13
)

$
(0.05
)

$
(0.04
)

$
(0.12
)   Item 9.
    Changes
    In and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  DISCLOSURE
    CONTROLS AND PROCEDURES
  Rules 13a-15(e)
    CHANGES
    IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
   52




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##### Table of Contents



Form 10-Q
  Rule 13a-15(f)
  Item 9B.
    Other
    Information    PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance      Item 11.
    Executive
    Compensation      Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   53




---



##### Table of Contents



Equity
    Compensation Plan Information as of December 31,
    2006
  Number of SecuritiesRemaining for FutureIssuance Under EquityNumber of Securities to be


Weighted-Average


Compensation PlansIssued Upon Exercise of


Exercise Price of


(Excluding SecuritiesOutstanding Options,


Outstanding Options,


Reflected in thePlan Category

Warrants and Rights


Warrants and Rights


First Column)Equity compensation plans approved
    by security holders


568,750


$
14.00



5,406,366Equity compensation plans not
    approved by security holders


1,937,000
(1)

$
4.20



     1)
    
    Includes 1,625,000 shares issued to non-employees in
    connection with the termination of an administrative services
    agreement.    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   54




---



##### Table of Contents



Item 15.
    Exhibits
    and Financial Statement Schedules  Documents filed as part of this
    Form 10-K:
  ALL FINANCIAL STATEMENTS:
    PageUS BioEnergy Corporation
    Financial StatementsReport of Independent Registered
    Public Accounting Firm


F-2Consolidated balance sheets


F-3Consolidated statements of
    operations


F-4Consolidated statements of
    shareholders equity


F-5Consolidated statements of cash
    flows


F-6Notes to consolidated financial
    statements


F-8Financial Statements of
    PredecessorUnited Bio Energy, LLC audited
    financial statementsReport of Independent Registered
    Public Accounting Firm


F-32Independent Auditors Report


F-33Consolidated statements of
    operations


F-34Consolidated statements of
    members equity


F-35Consolidated statements of cash
    flows


F-36Notes to consolidated financial
    statements


F-37Financial Statements of
    Acquired CompanyPlatte Valley Fuel Ethanol, LLC
    audited financial statementsReport of Independent Registered
    Public Accounting Firm


F-42Consolidated balance sheet for the
    year


F-43Consolidated statements of
    operations


F-44Consolidated statements of
    members equity


F-45Consolidated statements of cash
    flows for the years


F-46Notes to consolidated financial
    statements


F-47  55




---



##### Table of Contents



FINANCIAL STATEMENT SCHEDULES:
      Balance atbeginning


Charged to


Charged to





Balance atDescription

of year


Expense


Other Accounts


Deductions


End of Year(Dollars in thousands)Year ended December 31,
    2006Allowance for doubtful accounts


75















75Deferred income tax valuation
    allowance


1,350



14,560



5,915(1
)






21,825Year ended December 31,
    2005Allowance for doubtful accounts






(68
)


173(2
)


(30
)


75Deferred income tax valuation
    allowance


19



1,331











1,350     1)
    
    Allocated purchase price related to a valuation allowance on
    acquired state tax credits from the Platte Valley Fuel Ethanol,
    LLC business combination in April 2006.2)
    
    Allocated purchase price adjustment from United Bio Energy,
    LLC business combination in May 2005. 56




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm      Form 10-K, Form 10-K.
    
    57




---



##### Table of Contents



EXHIBITS:
  2
.1

Transaction Agreement, dated March
    31, 2005, between US BioEnergy Corporation and Superior Corn
    Products, LLC (incorporated by reference to Exhibit 2.1 to
    Amendment No. 2 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on September 26, 2006,
    File No. 333-136279)2
.2

Transaction Agreement, dated May
    5, 2005, among US BioEnergy Corporation, United Bio Energy, LLC,
    ICM Marketing, Inc. and Fagen Management, LLC (incorporated by
    reference to Exhibit 2.2 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)2
.3

Transaction Agreement, dated March
    9, 2006, between US BioEnergy Corporation and Platte Valley Fuel
    Ethanol, LLC (incorporated by reference to Exhibit 2.3 to
    Amendment No. 2 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on September 26, 2006,
    File No. 333-136279)2
.4

Transaction Agreement, dated March
    9, 2006, between US BioEnergy Corporation and Gold Energy, LLC,
    as amended by Amendment No. 1, dated March 15, 2006
    (incorporated by reference to Exhibit 2.4 to Amendment No. 2 to
    US BioEnergy Corporations Registration Statement on Form
    S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)2
.5

Purchase Agreement, dated March
    31, 2006, between CHS, Inc. and United Bio Energy, LLC
    (incorporated by reference to Exhibit 2.5 to Amendment No. 2 to
    US BioEnergy Corporations Registration Statement on Form
    S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)2
.6

Membership Interest Purchase
    Agreement, dated April 30, 2006, among US BioEnergy Corporation
    and certain scheduled interest holders (incorporated by
    reference to Exhibit 2.6 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)3
.1

Second Amended and Restated
    Articles of Incorporation (incorporated by reference to Exhibit
    4.5 to US BioEnergy Corporations Registration Statement on
    Form S-8, filed with the SEC on December 15, 2006, File No.
    333-139367)3
.2

Second Amended and Restated Bylaws
    (incorporated by reference to Exhibit 4.6 to US BioEnergy
    Corporations Registration Statement on Form S-8, filed
    with the SEC on December 15, 2006, File No.
    333-139367)4
.1

Specimen common stock certificate
    (incorporated by reference to Exhibit 4.1 to Amendment No. 6 to
    US BioEnergy Corporations Registration Statement on Form
    S-1, filed with the SEC on November 27, 2006, File No.
    333-136279)4
.2

Subscription Agreement, dated
    November 17, 2005, between US BioEnergy Corporation and CHS Inc.
    (incorporated by reference to Exhibit 4.2 to Amendment No. 2 to
    US BioEnergy Corporations Registration Statement on Form
    S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)4
.3

Shareholders Agreement,
    dated December 20, 2006, between US BioEnergy Corporation and
    the shareholders signatories thereto (incorporated by reference
    to Exhibit 99.2 to Schedule 13D, filed by Gordon W. Ommen and
    certain affiliates with the SEC on December 26, 2006, with
    respect to the common stock, par value $0.01 per share, of US
    BioEnergy Corporation, File No. 005-82277)10
.1

Standard Form of Agreement between
    Owner and Design-Builder -- Lump Sum, dated August 26, 2005,
    between Superior Corn Products, LLC and Fagen, Inc (incorporated
    by reference to Exhibit 10.1 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.2

Standard Form of Agreement between
    Owner and Design-Builder -- Lump Sum, dated August 26, 2005,
    between US Bio Albert City, LLC and Fagen, Inc. (incorporated by
    reference to Exhibit 10.2 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279) 58




---



##### Table of Contents



10
.3

Lump Sum Design-Build Agreement,
    dated January 6, 2006, between Val-E Ethanol, LLC and Fagen,
    Inc. (incorporated by reference to Exhibit 10.3 to Amendment No.
    2 to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)10
.4

Lump Sum Design-Build Expansion
    Agreement, dated April 24, 2006, between Platte Valley Fuel
    Ethanol, LLC and Fagen, Inc. (incorporated by reference to
    Exhibit 10.4 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.5

First Amended and Restated Master
    Agreement for Design, Engineering and Construction of Dry Grind
    Ethanol Production Facilities (Projects in Advanced
    Development), dated August 10, 2006, between US BioEnergy
    Corporation and Fagen, Inc. (incorporated by reference to
    Exhibit 10.5 to Amendment No. 3 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on October 27, 2006, File No. 333-136279)10
.6

Master Agreement for Design,
    Engineering and Construction of Dry Grind Ethanol Production
    Facilities (Future Development), dated August 1, 2006, between
    US BioEnergy Corporation and Fagen, Inc. (incorporated by
    reference to Exhibit 10.6 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.7

Master Loan Agreement, dated
    November 15, 2005, between US Bio Albert City, LLC and AgStar
    Financial Services, PCA, as amended by Amendment No. 1, dated
    July 31, 2006, and as supplemented by the First Supplement,
    dated November 15, 2005, as amended, and the Second Supplement,
    dated November 15, 2005 (incorporated by reference to Exhibit
    10.7 to Amendment No. 2 to US BioEnergy Corporations
    Registration Statement on Form S-1, filed with the SEC on
    September 26, 2006, File No. 333-136279)10
.8

Continuing Guaranty, dated
    November 15, 2005, between US BioEnergy Corporation and AgStar
    Financial Services, PCA (incorporated by reference to Exhibit
    10.8 to Amendment No. 2 to US BioEnergy Corporations
    Registration Statement on Form S-1, filed with the SEC on
    September 26, 2006, File No. 333-136279)10
.9

Master Loan Agreement, dated
    November 15, 2005, between Superior Corn Products, LLC and
    AgStar Financial Services, PCA, as amended by Amendment No. 1,
    dated July 31, 2006, and as supplemented by the First
    Supplement, dated November 15, 2005, as amended, and the Second
    Supplement, dated November 15, 2005 (incorporated by reference
    to Exhibit 10.9 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.10

Continuing Guaranty, dated
    November 15, 2005, between US BioEnergy Corporation and AgStar
    Financial Services, PCA (incorporated by reference to Exhibit
    10.10 to Amendment No. 2 to US BioEnergy Corporations
    Registration Statement on Form S-1, filed with the SEC on
    September 26, 2006, File No. 333-136279)10
.11

Construction Loan Agreement, dated
    December 10, 2003, between Platte Valley Fuel Ethanol, LLC and
    First National Bank of Omaha, as amended by Amendment to
    Promissory Note, dated September 20, 2004, Amendment No. 2,
    dated December 9, 2004, Amendment No. 3, dated January 9, 2005,
    Amendment No. 4, dated December 9, 2005, and the Letter
    Agreement, dated July 28, 2006 (incorporated by reference to
    Exhibit 10.11 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.12

Redevelopment Contract, dated
    October 31, 2003, between Community Redevelopment Authority of
    the City of Central City, Nebraska and Platte Valley Fuel
    Ethanol, LLC (incorporated by reference to Exhibit 10.12 to
    Amendment No. 2 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on September 26, 2006,
    File No. 333-136279)10
.13

2005 Stock Incentive Plan
    (incorporated by reference to Exhibit 10.13 to Amendment No. 2
    to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)*10
.14

2006 Stock Incentive Plan
    (incorporated by reference to Exhibit 4.7 to US BioEnergy
    Corporations Registration Statement on Form S-8, filed
    with the SEC on December 15, 2006, File No. 333-139367)* 59




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##### Table of Contents



10
.15

Form of 2006 Employee Stock
    Purchase Plan (incorporated by reference to Exhibit 10.15 to
    Amendment No. 6 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on November 27,
    2006, File No. 333-136279)*10
.16

Services Agreement, dated November
    2005, between US BioEnergy Corporation and Capitaline Advisors,
    LLC, as amended by the First Amendment, dated August 14, 2006
    (incorporated by reference to Exhibit 10.16 to Amendment No. 2
    to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)10
.17

Aircraft Lease Agreement, dated
    March 1, 2006, between US BioEnergy Corporation and Capitaline
    Advisors, LLC (Beechcraft King Air B200) (incorporated by
    reference to Exhibit 10.17 to Amendment No. 2 to US
    BioEnergy Corporations Registration Statement on Form S-1,
    filed with the SEC on September 26, 2006, File No. 333-136279)10
.18

Aircraft Lease Agreement, dated
    March 1, 2006, between US BioEnergy Corporation and Capitaline
    Advisors, LLC (Cessna T182T) (incorporated by reference to
    Exhibit 10.18 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.19

Lease Agreement, dated June 1,
    2006, between US BioEnergy Corporation and CHS Inc.
    (incorporated by reference to Exhibit 10.19 to Amendment No. 2
    to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)10
.20

Amended and Restated Operating
    Agreement of United Bio Energy Fuels, LLC, dated March 31, 2006
    (incorporated by reference to Exhibit 10.20 to Amendment No. 2
    to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)10
.21

Management Agreement, dated March
    31, 2006, between United Bio Energy Fuels, LLC and CHS Inc.
    (incorporated by reference to Exhibit 10.21 to Amendment No. 2
    to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)10
.22

Ethanol Sales and Marketing
    Agreement, dated March 31, 2006, between US BioEnergy
    Corporation and Provista Renewable Fuels Marketing, LLC
    (formerly known as United Bio Energy Fuels, LLC), as amended by
    Amendment No. 1, effective as of March 31, 2006 (incorporated by
    reference to Exhibit 10.22 to Amendment No. 5 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on November 14, 2006, File No. 333-136279)10
.23

Leased Employee Agreement, dated
    May 15, 2006, between United Bio Energy, LLC and United Bio
    Energy Fuels, LLC (incorporated by reference to Exhibit 10.23 to
    Amendment No. 2 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on September 26, 2006,
    File
    No. 333-136279)10
.24

Construction Loan Agreement, dated
    August 22, 2006, between Platte Valley Fuel Ethanol, LLC and
    First National Bank of Omaha (incorporated by reference to
    Exhibit 10.26 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.25

Form of Incentive Stock Option
    Agreement under the US BioEnergy Corporation 2005 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.27 to
    Amendment No. 2 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on September 26, 2006,
    File No. 333-136279)*10
.26

Stock Option Agreement, dated
    November 17, 2005, between US BioEnergy Corporation and Global
    Ethanol, Inc. (incorporated by reference to Exhibit 10.29 to
    Amendment No. 3 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on October 27, 2006,
    File No. 333-136279)*10
.27

Stock Option Agreement, dated
    November 17, 2005, between US BioEnergy Corporation and
    Capitaline Advisors, LLC (incorporated by reference to Exhibit
    10.30 to Amendment No. 3 to US BioEnergy Corporations
    Registration Statement on Form S-1, filed with the SEC on
    October 27, 2006, File No.
    333-136279)* 60




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##### Table of Contents



10
.28

Form of Incentive Stock Option
    Agreement under the US BioEnergy Corporation 2006 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.30 to
    Amendment No. 8 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on December 11, 2006,
    File No. 333-136279)*10
.29

Form of Non-Qualified Stock Option
    Agreement under the US BioEnergy Corporation 2006 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.31 to
    Amendment No. 8 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on December 11, 2006,
    File No. 333-136279)*10
.30

Form of Restricted Stock Award
    Agreement under the US BioEnergy Corporation 2006 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.32 to
    Amendment No. 8 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on December 11, 2006,
    File No. 333-136279)*21


Subsidiaries of US BioEnergy
    Corporation23
.1

Consent of McGladrey & Pullen,
    LLP, independent registered public accounting firm, relating to
    the consolidated financial statements of US BioEnergy
    Corporation, United Bio Energy, LLC, and Platte Valley Fuel
    Ethanol, LLC23
.2

Consent of Kennedy and Coe, LLC,
    independent auditors, relating to the consolidated financial
    statements of United Bio Energy, LLC.31
.1

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certification of Chief Executive
    Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
    to Section 906 of the Sarbanes-Oxley Act of 200232
.2

Certification of Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Management contract or compensatory plan or arrangement
    required to be filed (and/or incorporated by reference) as an
    exhibit to this Annual Report on
    Form 10-K
    pursuant to Item 15(a)(3) of
    Form 10-K.
    
    Portions of the exhibit have been omitted pursuant to an
    order granting confidential treatment under Rule 406 of the
    Securities Act of 1933, as amended. Omitted portions for which
    confidential treatment has been granted have been filed
    separately with the Securities and Exchange Commission. 61




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##### Table of Contents



SIGNATURES    US BIOENERGY
    CORPORATIONDate: March 30, 2007

By:

/s/  Gordon
    W. OmmenGordon W. OmmenChairman of the Board, Chief
    Executive Office and President     Signature

Title

Date/s/  Gordon
    W. OmmenGordon
    W. Ommen

Chairman of the Board, Chief
    Executive Officer and President(principal executive officer)

March 30, 2007/s/  Richard
    K. AtkinsonRichard
    K. Atkinson

Senior Vice President and Chief
    Financial Officer(principal financial officer)

March 30, 2007/s/  Virg
    G. GarbersVirg
    G. Garbers

Vice President and Controller(principal accounting officer)

March 30, 2007/s/  James
    E. DauwalterJames
    E. Dauwalter

Director

March 30, 2007/s/  Jay
    D. DebertinJay
    D. Debertin

Director

March 30, 2007/s/  Jennifer
    A. JohnsonJennifer
    A. Johnson

Director

March 30, 2007/s/  Clifford
    F. MesnerClifford
    F. Mesner

Director

March 30, 2007/s/  James
    B. MorganJames
    B. Morgan

Director

March 30, 2007/s/  Mark
    A. RuelleMark
    A. Ruelle

Director

March 30, 2007  62




---



##### 



US
    BIOENERGY CORPORATION
  Consolidated
    Financial Statements
 December 31,
    2006, 2005, and 2004
  
  Table of
    Contents
  PageUS BioEnergy Corporation
    Financial StatementsReport of Independent Registered
    Public Accounting Firm


F-2Consolidated balance sheets


F-3Consolidated statements of
    operations


F-4Consolidated statements of
    shareholders equity


F-5Consolidated statements of cash
    flows


F-6Notes to consolidated financial
    statements


F-8Financial Statements of
    PredecessorsUnited Bio Energy, LLC audited
    financial statementsReport of Independent Registered
    Public Accounting Firm


F-32Independent Auditors Report


F-33Consolidated statements of
    operations


F-34Consolidated statements of
    members equity


F-35Consolidated statements of cash
    flows for the period


F-36Notes to consolidated financial
    statements


F-37Financial Statements of
    Acquired CompanyPlatte Valley Fuel Ethanol, LLC
    audited financial statementsReport of Independent Registered
    Public Accounting Firm


F-42Consolidated balance sheet


F-43Consolidated statements of
    operations


F-44Consolidated statements of
    members equity


F-45Consolidated statements of cash
    flows


F-46Notes to consolidated financial
    statements


F-47   F-1




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
            Share-Based
    Payment
      F-2




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##### Table of Contents



US
    BioEnergy Corporation
  Consolidated
    Balance Sheets
 December 31,
    2006 and 2005
  2006


2005(Dollars in thousands, except per share data)ASSETSCurrents AssetsCash and cash equivalents:Cash and commercial paper

$
170,099


$
6,809Reverse repurchase agreement






33,641170,099



40,450Receivables


40,958



27,446Inventories


28,420



14,671Derivative financial instruments


7,144



Prepaid expenses


3,572



217Deferred income taxes






51Total current assets


250,193



82,835Other AssetsDeposits


4,307



Interest rate swap


252



Investment in equity of
    unconsolidated subsidiary


1,509



Goodwill


65,489



2,445Intangible assets


3,174



3,346Other assets


52



15474,783



5,945Property and Equipment, net


408,814



68,042Total assets

$
733,790


$
156,822LIABILITIES AND
    SHAREHOLDERS EQUITYLiabilitiesCurrent maturities of long-term
    debt

$
8,131


$
Checks written on controlled
    disbursement accounts


13,270



6,483Notes payable


1,815



315Accounts payable


47,163



39,157Accrued expenses


4,938



1,415Deferred income tax liability


2,913



Deferred revenue


545



209Other current liabilities


3,410



276Total current
    liabilities


82,185



47,855Long-term debt


140,128



6,250Deferred income taxes


27,099



267Commitments and ContingenciesShareholders EquityPreferred stock, $0.01 par
    value, authorized 75,000,000 shares, issued none






Class A common stock,
    $0.01 par value, authorized 750,000,000 shares;
    67,968,885 and 30,840,125 shares issued and outstanding as
    of December 31, 2006 and 2005, respectively


679



308Additional paid-in capital


467,552



106,427Retained earnings (deficit)


16,147



(4,285
)484,378



102,450Total liabilities and
    shareholders equity

$
733,790


$
156,822    F-3




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##### Table of Contents



US
    BioEnergy Corporation
 Consolidated
    Statements of Operations

Years
    Ended December 31, 2006 and 2005 and
    Period from October 28, 2004 (date of incorporation) to
    December 31, 2004 2006


2005


2004(Dollars in thousands, except per share data)Revenues:Product sales

$
111,966


$
9,633


$
Services and commissions


8,839



6,782



Other revenues


3,730







Total revenues


124,535



16,415



Cost of goods sold:Cost of product sales


73,177



9,467



Cost of services and commissions


5,190



3,520



Total cost of goods
    sold


78,367



12,987



Gross profit


46,168



3,428



Selling, general and
    administrative expenses


27,089



8,016



55Operating income
    (loss)


19,079



(4,588
)


(55
)Other income (expense):Interest expense


(2,076
)


(467
)


Interest income


2,436



319



1Other income


9,814



104



Equity in net income of
    unconsolidated subsidiary (Note 6)


456







Minority interest in net loss of
    subsidiary (Note 6)


391







11,021



(44
)


1Income (loss) before income
    taxes


30,100



(4,632
)


(54
)Federal and state income tax
    (expense) benefit


(9,668
)


401



Net income (loss)

$
20,432


$
(4,231
)

$
(54
)Earnings (loss) per common share:Basic

$
0.41


$
(0.38
)

$
(0.07
)Diluted


0.41



(0.38
)


(0.07
)    F-4




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##### Table of Contents



US
    BioEnergy Corporation
 Consolidated
    Statements of Shareholders Equity

Years ended December 31, 2006 and 2005 and

Period from October 28, 2004 (date of incorporation) to
    December 31, 2004 Class BClass B





CommonClass A


Class B


Common


Additional


Stock


RetainedCommon


Common


Stock


Paid-in


Subscriptions


EarningsStock


Stock


Subscribed


Capital


Receivable


(Deficit)


Total(Dollars in thousands)Balance, October 28, 2004 
    (date of incorporation)

$



$



$



$



$



$



$
Issuance of stock subscriptions










6,000







(6,000
)






Collection of stock subscription
    and issuance of 2,687,500 shares of Class B common
    stock






27



(1,250
)


1,223



1,250







1,250Costs of raising capital














(4
)










(4
)Net loss






















(54
)


(54
)Balance, December 31, 2004






27



4,750



1,219



(4,750
)


(54
)


1,192Issuance of 946,969 shares of
    Class B common stock






9



(1,263
)


1,254



1,263







1,263Conversion of
    3,634,469 shares of Class B common stock to
    Class A common stock


36



(36
)


















Issuance of 27,205,656 shares
    of Class A common stock


272







(3,487
)


100,497



3,487







100,769Issuance of options for common
    stock














3,552











3,552Costs of raising capital














(95
)










(95
)Net loss






















(4,231
)


(4,231
)Balance, December 31, 2005


308











106,427







(4,285
)


102,450Issuance of 37,128,760 shares
    of Class A common stock


371











376,882











377,253Costs of raising capital














(16,156
)










(16,156
)Stock-based compensation














399











399Net income






















20,432



20,432Balance, December 31, 2006

$
679


$



$



$
467,552


$



$
16,147


$
484,378    F-5




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##### Table of Contents



US
    BioEnergy Corporation
 Consolidated
    Statements of Cash Flows

Years Ended December 31, 2006 and 2005 and

Period from October 28, 2004 (date of incorporation) to
    December 31, 2004 2006


2005


2004(Dollars in thousands)Cash Flows from Operating ActivitiesNet income (loss)

$
20,432


$
(4,231
)

$
(54
)Adjustments to reconcile net income
    (loss) to net cash used in operating activities:Depreciation


6,487



322



Amortization


1,031



487



Minority interest in net loss of
    subsidiary


(391
)






Stock-based compensation


399



3,552



Deferred income taxes


9,905



(677
)


Equity in net income of
    unconsolidated subsidiary


(456
)






Gain on sale of 50% interest in
    Provista


(1,764
)






Changes in working capital
    components, net of affects of business acquisitions
    and deconsolidation of equity method investee:Receivables


(34,191
)


(11,219
)


Inventories


(28,884
)


(9,833
)


Prepaid expenses


(2,988
)


(90
)


(1
)Derivative financial instruments


(6,785
)






Accounts payable


17,172



14,428



4Accrued expenses


3,012



989



Deferred revenue


197



(52
)


Net cash used in operating
    activities


(16,824
)


(6,324
)


(51
)Cash Flows from Investing ActivitiesPurchases of property and equipment


(206,010
)


(53,388
)


(441
)Cash acquired in purchase of UBE,
    LLC






103



Cash acquired in purchase of US Bio
    Woodbury, LLC






204



Acquisition of US Bio Platte Valley
    and US Bio Ord, net of cash received


(20,708
)






Acquisition of US Bio Hankinson,
    LLC, net of cash received


(773
)






Investment in Provista


(1,000
)






Proceeds received on sale of 50%
    interest in Provista


2,400







Deposits made


(4,307
)






Other


170



148



Net cash used in investing
    activities


(230,228
)


(52,933
)


(441
)Cash Flows from Financing ActivitiesIncrease in checks written on
    controlled disbursement accounts


6,787



3,556



Debt issuance costs paid


(977
)


(1,032
)


Net change in notes payable


13,951



(6,043
)


Proceeds from long-term debt


119,242



6,250



Payments of long-term debt


(1,645
)






Proceeds from issuance of
    23,300,563, 26,454,125 and 2,687,500 shares
    of common stock, respectively


255,499



96,317



1,250Offering costs paid


(16,156
)


(99
)


Net cash provided by financing
    activities


376,701



98,949



1,250Net increase in cash and cash
    equivalents


129,649



39,692



758Cash and Cash EquivalentsBeginning of period


40,450



758



End of period

$
170,099


$
40,450


$
758   See notes to consolidated financial
    statements.
 F-6




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##### Table of Contents



US
    BioEnergy Corporation
    Consolidated Statements of Cash Flows (continued)
    Years Ended December 31, 2006 and 2005 and 
    Period from October 28, 2004 (date of incorporation) to
    December 31, 2004
  2006


2005


2004(Dollars in thousands)Supplemental Disclosure of Noncash
    Financing and Investing ActivitiesProperty and equipment acquired
    through accounts payable

$
28,553


$
12,318


$
165Property and equipment acquired
    through accrued expenses










27Property and equipment acquired
    through the issuance of 73,500 shares
    of Class A common stock






294



Costs of raising capital in
    accounts payable


70







4Supplemental Disclosures of Cash
    Flow InformationCash payments for interest, of
    which $4,245 and $32 was capitalized
    in 2006 and 2005, respectively


5,936



469



Cash payments for income taxes


614







Supplemental Schedule of Noncash
    Investing and Financing ActivitiesDeconsolidation of ProvistaAccounts receivable

$
23,633Inventories


17,265Property and equipment


33Goodwill


613Intangible assets


395Other assets


57Total assets deconsolidated


41,996Investment in equity of subsidiary


(299
)Accounts payable


(28,137
)Accrued expenses


(1,037
)Notes payable


(12,523
)Total liabilities deconsolidated


(41,996
)Net deconsolidation

$
   See note 10 for disclosures
    related to non-cash components of acquisitions.
  See notes to consolidated financial
    statements.
 F-7




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##### Table of Contents



US
    BioEnergy Corporation
 Notes to
    consolidated Financial Statements

(Dollars in thousands, except per share data)



US
    BioEnergy Corporation



Notes to
    consolidated Financial
    Statements  (Continued)

(Dollars in thousands, except per share data)  Note 1:
    Basis of
    Presentation and Significant Accounting Policies          Principles of consolidation:
  Use of estimates:
  Revenue recognition:
 F-8




---



##### Table of Contents



st
  Expense Classification:
      Cash and cash equivalents:
  Receivables:
  Inventories: first-in
 F-9




---



##### Table of Contents



Property and equipment:
  YearsLand improvements


15Buildings


40Leasehold improvements


3 to 6Machinery and equipment


5 to 15Office furniture and equipment


3 to 5     Derivative financial instruments:
      Deposits:
  Goodwill and intangible
    assets:
 F-10




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##### Table of Contents



Accrued rail car lease
    payments:
  Income taxes:
    Earnings (loss) per common share:
  Segment reporting:
  Fair value of financial
    instruments:
  Stock-based compensation: Share-Based Payment Accounting for Stock Issued to Employees
   F-11




---



##### Table of Contents



Recently issued accounting
    pronouncements:
     F-12




---



##### Table of Contents



Note 2:
    Receivables    2006


2005Trade

$
39,100


$
27,521Other


883



Receivable from related party


1,050



41,033



27,521Less allowance for doubtful
    accounts


75



75$
40,958


$
27,446     Note 3:
    Inventories    2006


2005Ethanol

$
4,752


$
13,530Distillers grains


3,496



1,141Corn


13,923



Chemicals


650



Supplies


2,095



Work-in-process


3,504



$
28,420


$
14,671   Note 4:
    Goodwill
    and Intangible Assets    Production


All Other


TotalBalance, December 31, 2004

$



$



$
Acquisition of UBE






2,445



2,445Balance, December 31, 2005






2,445



2,445Acquisition of Platte Valley


63,657







63,657Deconsolidation of Provista






(613
)


(613
)Balance, December 31, 2006

$
63,657


$
1,832


$
65,489  F-13




---



##### Table of Contents



2006


2005Debt issuance costs

$
2,588


$
1,233Less accumulated amortization


(455
)


(54
)Debt issuance costs, net


2,133



1,179Customer list and contracts


1,947



2,600Less accumulated amortization


(932
)


(433
)Trademarks in progress


26



Customer lists, contracts and
    trademarks, net


1,041



2,167Total intangible assets

$
3,174


$
3,346     2007

$
1,5352008


7712009


3252010


2842011


259$
3,174   Note 5:
    Property
    and Equipment    2006


2005Land and land improvements

$
28,710


$
7,202Buildings


74,080



Leasehold improvements


157



272Machinery and equipment


224,232



778Office furniture and equipment


2,359



422Construction in progress


85,764



59,689415,302



68,363Less accumulated depreciation


6,488



321$
408,814


$
68,042     Note 6:
    Investment
    in Subsidiary   F-14




---



##### Table of Contents



F-15




---



##### Table of Contents



Note 7:
    Notes Payable
    and Long-Term Debt    2006


2005Notes PayableNote payable to ICM Inc., bearing
    interest at .75% above the prime rate, interest payable monthly,
    due on demand

$
315


$
315$3,500 Revolving loan to bank,
    related to Woodbury, bearing interest at 3.25% above the
    one-month LIBOR, interest payable monthly with outstanding
    principal balance due October 31,
    2007(b)(g)


1,500



$
1,815


$
315Long-Term Debt$47,300 Construction note to bank,
    related to Platte Valley, bearing interest at 3.1% above the
    one-month LIBOR, interest payable quarterly through
    March 20, 2007 or upon completion of
    construction(b)(d)(e)(h)

$
18,437


$
$75,000 Construction note to bank,
    related to Albert City, bearing interest at 3.50% above the
    one-month LIBOR, interest payable quarterly through
    March 30, 2007 or upon completion of
    construction(b)(e)(i)


72,283



Two term notes to bank, related to
    Platte Valley, bearing interest at 3.30% and 3.80% above the
    three-month LIBOR, due in quarterly payments of principal and
    interest with a final balloon payment due on September 20,
    2009(a)(b)


18,388



Term note to bank, related to
    Woodbury, bearing interest at 3.25% above the one-month LIBOR
    with an incentive pricing clause that will reduce the interest
    rate to a range from 2.80% to 3.30% above the one-month LIBOR,
    due in quarterly principal and interest payments to
    November 1,
    2011(b)(c)


27,660



$8,000 Revolving term note,
    related to Woodbury, bearing interest at 3.25% above the
    one-month LIBOR, interest payable monthly with principal due
    November 1, 2011. Additional principal payments of up to
    $2,500 per year are required if certain financial ratios are not
    maintained.(b)


8,000



Community redevelopment revenue
    bonds, related to Platte
    Valley(f)


3,491



Two subordinated notes payable,
    related to Albert City, bearing interest of 14.5%, repaid in 2006






6,250148,259



6,250Less current maturities


8,131



$
140,128


$
6,250     (a)
    
    Platte Valley has entered into an
    interest rate swap agreement with the bank, on one of these term
    notes, which expires September 20, 2009, with an original
    notional amount of $16,450. The notional amount, which decreases
    over the term of the agreement as principal payments are made on
    the notes, was $13,367 at December 31, 2006. Under the swap
    agreement, Platte Valley pays interest at a fixed rate equal to
    7.50% and receives interest at a variable rate equal to the
    3-month
    LIBOR plus 3.30%. The swap agreement requires that payments be
    made or received quarterly. The Company must pay prepayment
    penalties of up to 1% of the original principal balance of an
    aggregate of $27,900 if the Company pays off the notes prior to
    2008.(b)
    
    The notes contain a number of
    covenants restricting additional indebtedness, payment of
    dividends, investments or capital expenditures, transactions
    with affiliates and other restrictions, including certain
    financial covenants. Platte Valley was not in compliance with
    certain financial covenants contained in the construction note
    agreements, however as F-16




---



##### Table of Contents



of February 7, 2007, this note
    has been refinanced (see Note 16). The notes are
    collateralized by substantially all of the assets of the
    applicable subsidiary, with carrying values of the following
    amounts: Platte Valley $214,590; Albert City $147,940 and
    Woodbury $72,357.(c)
    
    The Company must pay prepayment
    penalties up to 2% of the outstanding principal balances of the
    term note if the Company pays off the note within two years of
    the closing date of the note.(d)
    
    The Company must pay prepayment
    penalties of a fixed amount of $463 if the Company pays off the
    note during the construction project or within the first three
    years of the fixed or variable rate notes.(e)
    
    Upon successful completion of the
    projects and written request, the construction notes will
    convert to revolving term notes and term notes with five year
    maturities.(f)
    
    Platte Valley is obligated to repay
    Community Redevelopment Revenue Bonds, issued by the Community
    Redevelopment Authority (Authority) of the City of Central City,
    Nebraska. The redevelopment contract requires semiannual
    interest and principal payments through 2018. The bonds contain
    fixed interest rates ranging from 6.25% to 7.25%. Real estate
    taxes paid by Platte Valley and allocated to the Authority will
    be used by the Authority to pay principal and interest of the
    bonds. Although such real estate taxes are expected to be
    sufficient to repay the bonds, Platte Valley is obligated to pay
    any deficiency when due. The agreement is secured by a mortgage
    on Platte Valleys real property which is subordinate to
    the term notes payable to bank and the revolving term note.(g)
    
    Letters of credit of $855 are
    outstanding under this credit facility, with an available
    balance of $1,145.(h)
    
    Letters of credit of $210 are
    outstanding under this credit facility, with an available
    balance of $28,653. A revolving construction loan of $5,000 was
    also available, with nothing drawn.(i)
    
    Letters of credit of $2,717 are
    outstanding under this credit facility, with no amounts
    available.    Year Ending December 31,2007

$
8,1312008


9,2872009


17,7012010


6,4612011


33,505Thereafter


73,174$
148,259   Note 8:
    Earnings
    Per Common Share   F-17




---



##### Table of Contents



WeightedAverageNet


Shares


Per ShareIncome (Loss)


Outstanding


Amount2006:Basic EPS

$
20,432



49,521,729


$
0.41Effects of dilutive securities:Exercise of stock options






917,865



Diluted EPS

$
20,432



50,439,594


$
0.412005:Basic EPS

$
(4,231
)


11,182,010


$
(0.38
)Effects of dilutive securities:Exercise of stock options










Diluted EPS

$
(4,231
)


11,182,010


$
(0.38
)2004:Basic EPS

$
(54
)


807,692


$
(0.07
)Effects of dilutive securities:Exercise of stock options










Diluted EPS

$
(54
)


807,692


$
(0.07
)     Note 9:
    Stock-Based
    Compensation and Payments  Stock Incentive Plans:
     F-18




---



##### Table of Contents



Employee Stock Purchase Plan:
  Restricted stock:
  Weighted-Number of


AverageNonvested


Grant DateShares


Fair ValueOutstanding on December 31,
    2005





$
0.00Granted


243,202


$
14.00Vested





$
0.00Forfeited


(3,750
)

$
14.00Outstanding on December 31,
    2006


239,452


$
14.00   Stock options:
   F-19




---



##### Table of Contents



Weighted


WeightedAverage


AverageNumber of


Exercise


Remaining


AggregateStock


Price


Contractual


IntrinsicOptions


per Share


Term (In Years)


ValueOutstanding on December 31,
    2005


1,969,875


$
4.00Granted


639,375



13.72Exercised


(1,000
)


4.00Forfeited


(102,500
)


5.43Outstanding on December 31,
    2006


2,505,750


$
6.42



9.12


$
26,507Vested or expected to vest at
    December 31, 2006


2,463,275


$
6.32



9.11


$
26,306Exercisable at December 31,
    2006


1,715,025


$
4.00



8.87


$
22,295         Years Ended December 31,2006


2005Expected term (in years)


6.5


7 - 10Risk free interest rate


4.61
%

4.4% to 4.6%Expected volatility


57
%

Not applicableExpected dividend yield


0
%

0%      F-20




---



##### Table of Contents



Note 10:
    Acquisitions      Cash

$
204Property and equipment


915Deferred income taxes


132Total assets acquired

$
1,251    F-21




---



##### Table of Contents



Cash

$
103Other current assets


21,204Property, plant and equipment


1,009Other assets


490Goodwill


2,445Finite life intangible assets


2,600Total assets acquired


27,851Current liabilities


(22,656
)Long-term liabilities


(1,025
)Total liabilities assumed


(23,681
)Net assets acquired

$
4,170         Cash

$
277Receivable from related
    party  Fagen, Inc., an entity owned by a shareholder


1,050Property and equipment


10,243Total assets acquired


11,570Deferred tax liability


(3,464
)Net assets acquired

$
8,106      F-22




---



##### Table of Contents



Cash

$
19,292Other current assets


4,616Property and equipment


113,802Other assets


1,802Goodwill


63,657Total assets acquired


203,169Current liabilities, excluding
    current maturities of long-term debt


(7,492
)Long-term debt


(24,412
)Deferred tax liability


(16,427
)Other long-term liabilities


(139
)Total liabilities assumed


(48,470
)Net assets acquired

$
154,699      F-23




---



##### Table of Contents



2006


2005Revenues

$
153,705


$
104,659Net income


26,085



9,035Basic earnings per common share


0.47



0.37Diluted earnings per common share


0.46



0.37   Note 11:
    Segment
    Information    2006Production


All Other


TotalRevenues from external customers

$
108,262


$
16,273


$
124,535Intersegment revenues






451



451Depreciation and amortization
    expense


6,016



1,502



7,518Interest expense


2,774



(698
)


2,076Equity in net income of
    unconsolidated subsidiary






456



456Interest income


469



1,967



2,436Segment pretax income (loss)


34,973



(4,873
)


30,100Segment assets as of
    December 31, 2006


537,395



222,518



759,913Capital expenditures for segment
    assets


203,681







203,681   2005Production


All Other


TotalRevenues from external customers

$



$
16,415


$
16,415Depreciation and amortization
    expense






809



809Interest expense






467



467Interest income






319



319Segment pretax income (loss)


(999
)


(3,633
)


(4,632
)Segment assets as of
    December 31, 2005


74,225



113,130



187,355Capital expenditures for segment
    assets


52,700



688



53,388   F-24




---



##### Table of Contents



2004Production


All Other


TotalRevenues from external customers

$



$



$
Depreciation and amortization
    expense










Interest income






1



1Segment pretax income (loss)






(54
)


(54
)Segment assets as of
    December 31, 2004






1,391



1,391Capital expenditures for segment
    assets






441



441     2006


2005


2004Assets:Total assets of the Production
    segment

$
537,395


$
74,225


$
All Other assets


222,518



113,130



1,391Elimination of intercompany
    receivables


(26,123
)


(30,533
)


Total consolidated assets

$
733,790


$
156,822


$
1,391     2006


2005


2004Product sales:Ethanol

$
95,379


$
4,681


$
Distillers grains


11,805



1,048



Corn


3,859



2,777



Other commodities


923



1,127



Services and commissions:Services


2,901



3,139



Commissions


5,938



3,643



Other revenue:


3,730







$
124,535


$
16,415


$
     Note 12:
    Commitments,
    Contingencies and Credit Risk  Master design-build letter agreement: design-build
 F-25




---



##### Table of Contents



Forward purchase contracts:
  Contingencies:
      Credit risk:
 F-26




---



##### Table of Contents



Lease commitments:
  2007

$
8,8442008


9,6282009


8,7212010


8,5792011


6,543Thereafter


6,443$
48,758         Note 13:
    Related
    Party Transactions  Transactions
    with Capitaline Advisors, LLC and Affiliates
       F-27




---



##### Table of Contents



Transactions
    with Fagen, Inc. and Affiliates
        Transactions
    with CHS Inc.
          Transactions
    with Provista Renewable Fuels Marketing
     F-28




---



##### Table of Contents



Note 14:
    Income
    Tax Matters    2006


2005Deferred tax assets:Stock-based compensation and
    payments

$
1,456


$
1,349Organization and start up costs


1,168



533State tax credit carry forwards


21,825



Net operating loss carry forward


1,647



Other


885



15226,981



2,034Less: valuation allowance


(21,825
)


(1,350
)5,156



684Deferred tax liabilities:Derivative financial instruments


(2,572
)


Property and equipment


(30,317
)


Finite life intangible assets


(799
)


(823
)Prepaid expenses


(1,193
)


(77
)Other


(287
)


(35,168
)


(900
)Net deferred tax liabilities

$
(30,012
)

$
(216
)       2006


2005Current assets

$



$
51Current liabilities


(2,913
)


Noncurrent liabilities


(27,099
)


(267
)Total deferred tax liabilities

$
(30,012
)

$
(216
)      F-29




---



##### Table of Contents



US
    BioEnergy Corporation
  Notes to
    consolidated Financial
    Statements  (Continued)
 (Dollars in thousands, except per share data)
     2006


2005


2004Current:Federal

$
(243
)

$
222


$
State


6



54



DeferredFederal


9,114



(588
)


State


791



(89
)


$
9,668


$
(401
)

$
     2006


2005


2004Computed expected tax
    expense (benefit)

$
10,398


$
(1,621
)

$
(19
)State income tax expense
    (benefit), net of federal tax effect


318



(139
)


State tax credits


(15,910
)






Change in valuation allowance


14,560



1,331



19Other, net


302



28



$
9,668


$
(401
)

$
     Note 15:
    Retirement
    Plan    Note 16:
    Subsequent
    Events   F-30




---



##### Table of Contents



US
    BioEnergy Corporation
  Notes to
    consolidated Financial
    Statements  (Continued)
 (Dollars in thousands, except per share data)
     F-31




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
            
   F-32




---



##### Table of Contents



Independent
    Auditors Report
                
 F-33




---



##### Table of Contents



United
    Bio Energy, LLC
  Consolidated
    Statements of Operations
 Period
    from January 1, 2005 to April 30, 2005 and Year Ended
    December 31, 2004
  2005


2004(Dollars in thousands)Revenues:Product sales

$
3,592


$
30,777Services and commissions


2,849



4,876Total revenues


6,441



35,653Cost of goods sold:Cost of product sales


3,489



30,412Cost of services and commissions


2,926



3,209Total cost of goods
    sold


6,415



33,621Gross profit


26



2,032Selling, general and
    administrative expenses


1,043



2,714Operating loss


(1,017
)


(682
)Other income (expense):Interest expense


(119
)


(219
)Loss on investments






(4
)Other income






58(119
)


(165
)Net loss

$
(1,136
)

$
(847
)Pro forma amounts as if the
    Company were a taxable entity (unaudited):Pro forma income tax benefit

$



$
Pro forma net loss


(1,136
)


(847
)    F-34




---



##### Table of Contents



United
    Bio Energy, LLC
  Consolidated
    Statements of Members Equity
 Period
    from January 1, 2005 to April 30, 2005 and Year Ended
    December 31, 2004
  Class A


Class B


AccumulatedUnits


Amount


Units


Amount


Deficit


Total(Dollars in thousands)Balance, December 31, 2003





$







$



$



$
Capital contributions:ICM Marketing, Inc.


2,325,000



















Fagen Management, LLC










1,550,000



1,550







1,550Net loss


















(847
)


(847
)Balance, December 31, 2004


2,325,000







1,550,000



1,550



(847
)


703Net loss


















(1,136
)


(1,136
)Balance, April 30, 2005


2,325,000


$




1,550,000


$
1,550


$
(1,983
)

$
(433
)    F-35




---



##### Table of Contents



United
    Bio Energy, LLC
  Consolidated
    Statements of Cash Flows
 Period
    from January 1, 2005 to April 30, 2005 and Year Ended
    December 31, 2004
  2005


2004(Dollars in thousands)Cash Flows from Operating ActivitiesNet loss

$
(1,136
)

$
(847
)Adjustments to reconcile net loss
    to net cash provided by (used in) operating activities:Depreciation


66



139Amortization


116



288Loss on disposal of assets






3Loss on investments






4Changes in working capital
    components, net of assets contributed and liabilities assumed at
    inception:Accounts receivable


688



(6,808
)Related party and employee
    receivables






149Inventories


43



(5,392
)Prepaid expenses


60



(185
)Deposits


(46
)


(58
)Accounts payable


665



6,879Accrued expenses and other current
    liabilities


153



98Net cash provided by (used in)
    operating activities


609



(5,730
)Cash Flows from Investing ActivitiesPurchases of property and equipment


(396
)


(682
)Proceeds from sale of equipment






74Disbursements resulting in notes
    receivable


(235
)


Purchases of certificates of deposit


(100
)


Purchase of investment






(100
)Net cash used in investing
    activities


(731
)


(708
)Cash Flows from Financing ActivitiesIncrease in checks written on
    controlled disbursement accounts


154



Debt issuance costs paid


(28
)


(211
)Payments on notes payable


(313
)


(1,369
)Increase in note payable to related
    party






315Advances under notes payable






6,356Cash portion of capital
    contributions:ICM Marketing, Inc.






759Fagen Management, LLC






1,000Net cash provided by (used in)
    financing activities


(187
)


6,850Net increase (decrease) in cash
    and cash equivalents


(309
)


412Cash and Cash EquivalentsBeginning


412



Ending

$
103


$
412Supplemental Disclosures of Cash
    Flow InformationCash paid for interest

$
118


$
182Supplemental Disclosures of Noncash
    Investing and Financial Activities ICM Marketing, Inc.:Assets contributed and liabilities
    assumed, recorded at historical cost:Cash

$



$
759Accounts receivable






6,309Due from related parties






175Inventory






2,113Prepaid expenses






1Property and equipment, including
    property held for sale






302Accounts payable






(7,912
)Accrued expenses






(378
)Short-term note payable






(1,369
)Net assets contributed for
    member units issued

$



$
Fagen Management, LLC:Assets contributed, recorded at
    fair value:Cash

$



$
1,000Intangible assets






550Assets contributed for member
    units issued

$



$
1,550    F-36




---



##### Table of Contents



United
    Bio Energy, LLC
  Notes to
    Consolidated Financial Statements
 (Dollars
    in thousands, except per share data)
  Note 1.
    Nature of
    Business and Significant Accounting Policies  Nature of business:
      Principles of consolidation:
  Use of estimates:
  Revenue recognition:
        Cash and cash equivalents:
  Accounts receivable and bad
    debts:
 F-37




---



##### Table of Contents



United
    Bio Energy, LLC
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (Dollars
    in thousands, except per share data)
     Inventories: first-in
  Depreciation:
  YearsBuildings and improvements


10-39Equipment


5-7Furniture and fixtures


5-7Computers and software


3-5Vehicles


5   Income taxes:
  Advertising:
  Segment reporting:
  Fair value of financial
    instruments:
  Debt issuance costs:
  Finite life intangible assets:
  Note 2.
    Member
    Units   F-38




---



##### Table of Contents



United
    Bio Energy, LLC
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (Dollars
    in thousands, except per share data)
    Note 3.
    Commodity
    Futures Contracts    Note 4.
    Notes Payable      Note 5.
    Leases      May 1, 2005 to
    December 31, 2005

$
1,8302006


2,4672007


1,0312008


2952009


267Thereafter


927$
6,817  F-39




---



##### Table of Contents



United
    Bio Energy, LLC
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (Dollars
    in thousands, except per share data)
  Note 6.
    Commitments
    and Credit Risk  Forward purchase contracts:
  Credit risk:
      2005


2004Ethanol

$
348


$
15,692Distillers grains


576



1,940Corn


1,688



6,963Other commodities


980



6,182Services


1,354



1,426Commissions


1,495



3,450$
6,441


$
35,653     Settlement:
  Note 7.
    Related
    Party Balances      Note 8.
    Retirement
    Plan    Note 9.
    Subsequent
    Event   F-40




---



##### Table of Contents



United
    Bio Energy, LLC
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (Dollars
    in thousands, except per share data)
   Note 10.
    Restatement           F-41




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
            
    F-42




---



##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
  Consolidated
    Balance Sheet
 December 31,
    2005
  (Dollars in Thousands)AssetsCurrent AssetsCash and cash equivalents

$
20,552Receivables


1,418Inventories


2,237Prepaid expenses


560Total current assets


24,767Other AssetsInterest rate swap


238Debt issuance costs, net of
    amortization of $126


410648Property and Equipment, net


55,682$
81,097Liabilities and Members
    EquityCurrent LiabilitiesCurrent maturities of long-term
    debt

$
3,388Accounts payable


1,624Accrued property taxes


835Other accrued expenses


461Derivative financial instruments


8Total current
    liabilities


6,316Long-term Debt, less current
    maturities


21,800Minority Interest in Subsidiary


2,624Commitments and ContingenciesMembers EquityMember capital contributions


25,499Retained earnings


24,85850,357Total liabilities and
    members equity

$
81,097    F-43




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##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
  Consolidated
    Statements of Operations
 Years
    Ended December 31, 2005 and 2004
  2005


2004(Dollars in Thousands)Revenues:Product sales

$
84,581


$
47,718Other revenues, incentive income


5,109



8,188Total revenues


89,690



55,906Cost of goods sold, product sales


66,347



46,917Gross profit


23,343



8,989Selling, general and
    administrative expenses


1,776



1,320Operating income


21,567



7,669Other income (expense):Interest expense


(1,559
)


(1,681
)Interest income


301



2Other income


31



12(1,227
)


(1,667
)Income before minority
    interest


20,340



6,002Minority interest in net loss of
    subsidiary


38



Net income

$
20,378


$
6,002Pro forma amounts as if the
    Company were a taxable entity (unaudited):Pro forma income tax expense

$
7,700


$
2,200Pro forma net income


12,678



3,802    F-44




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##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
    Consolidated Statements of Members Equity
    Years Ended December 31, 2005 and 2004
 (Dollars in Thousands)Members equity,
    December 31, 2003

$
19,168Collection of subscriptions
    receivable


6,309Net income


6,002Members equity,
    December 31, 2004


31,479Net income


20,378Member distributions


(1,500
)Members equity,
    December 31, 2005

$
50,357    F-45




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##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
  Consolidated
    Statements of Cash Flows
 Years
    Ended December 31, 2005 and 2004
  2005


2004(Dollars in Thousands)Cash Flows From Operating
    ActivitiesNet income

$
20,378


$
6,002Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation


4,335



2,791Amortization


97



29Minority interest in net loss of
    subsidiary


(38
)


Changes in current assets and
    liabilities:Receivables


1,920



(3,338
)Inventories


(715
)


(1,522
)Prepaid expenses


(34
)


(526
)Derivative financial instruments


(412
)


182Accounts payable


(90
)


1,575Accrued expenses


535



606Net cash provided by operating
    activities


25,976



5,799Cash Flows From Investing
    Activities(Increase) decrease in restricted
    cash held in escrow


1,004



(281
)Purchases of property and equipment


(3,820
)


(35,553
)Net cash used in investing
    activities


(2,816
)


(35,834
)Cash Flows From Financing
    ActivitiesProceeds from long-term debt






33Principal payments on long-term
    debt


(7,508
)


(661
)Proceeds from short-term debt


3,744



33,628Principal payments on short-term
    debt


(3,744
)


(5,000
)Debt issuance cost paid






(536
)Capital contributed






6,309Member distributions


(1,500
)


Proceeds from minority interest in
    subsidiary


2,662



Net cash provided by (used in)
    financing activities


(6,346
)


33,773Net increase in cash and cash
    equivalents


16,814



3,738Cash and Cash EquivalentsBeginning of year


3,738



End of year

$
20,552


$
3,738Supplemental Disclosure of Cash
    Flow InformationCash payments for interest, of
    which $210 was capitalized in 2004

$
2,046


$
1,568Supplemental Disclosure of Noncash
    Investing and Financing ActivitiesConversion of short-term debt to
    long-term debt

$



$
27,900Property and equipment acquired
    through accounts payable


139



197Property and equipment acquired
    through subordinated note payable to a member






1,835    F-46




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##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
  Notes to
    Consolidated Financial Statements
 (Dollars
    in Thousands, except per share data)
  Note 1.
    Nature of
    Business and Significant Accounting Policies  Nature of business:
    Principles of consolidation:
  Use of estimates:
  Revenue recognition:
    Expense classification:
    Cash and cash equivalents:
  Receivables:
  Inventories: first-in
  Derivative financial instruments:
 F-47




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##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (Dollars
    in Thousands, except per share data)
        Debt issuance costs:
  Property and equipment:
 YearsLand improvements

20Buildings

20Machinery and equipment

5-20Office furniture and equipment

5-10     Income taxes:
  Advertising costs:
  Fair value of financial
    instruments:
  Segment reporting:
  Recent accounting pronouncement: Inventory Costs. Inventory Pricing
 F-48




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##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (Dollars
    in Thousands, except per share data)
    Note 2.
    Receivables    Trade

$
1,248Incentive


41Broker


90Other


39$
1,418   Note 3.
    Inventories    Corn

$
349Chemicals


235Supplies


615Work in process


254Ethanol


779Distillers grains


5$
2,237   Note 4.
    Property
    and Equipment    Land and land improvements

$
5,857Buildings


13,983Machinery and equipment


40,091Office furniture and equipment


316Construction in progress


2,56062,807Less accumulated depreciation


7,125$
55,682   Note 5.
    Note Payable   F-49




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##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (Dollars
    in Thousands, except per share data)
    Note 6.
    Long-term
    Debt  Variable rate term note to bank,
    bearing interest at 3.30% above the 3 month LIBOR (7.80% at
    December 31, 2005), due in quarterly payments of principal
    and interest with a final balloon payment due on
    September 20, 2009, collateralized by substantially all of
    the assets of the
    Company(a)

$
14,776Variable rate term note to bank,
    bearing interest at 3.80% above the 3 month LIBOR with an
    incentive pricing clause that will reduce the interest rate to a
    range from 2.80% to 3.30% above the 3 month LIBOR (7.30% at
    December 31, 2005), due in quarterly payments of $552,
    which includes principal and interest to September 20,
    2009, collateralized by substantially all of the assets of the
    Company


6,743Community redevelopment revenue
    bonds(b)


3,66925,188Less current maturities


(3,388
)$
21,800     (a)
    
    The Company entered into an interest rate swap agreement with
    the bank effective June 21, 2004 and expiring
    September 20, 2009, with an original notional amount of
    $16,450. The notional amount, which decreases over the term of
    the agreement as principal payments are made on the notes, was
    $14,776 at December 31, 2005. Under the swap agreement, the
    Company pays interest at a fixed rate equal to 7.50% and
    receives interest at a variable rate equal to the 3 month
    LIBOR plus 3.30% (7.80% as of December 31, 2005). The swap
    agreement requires payments be made or received quarterly. The
    fair value of the swap agreement was recorded as an asset of
    $238 as of December 31, 2005.(b)
    
    The Company is obligated to repay Community Redevelopment
    Revenue Bonds, issued by the Community Redevelopment Authority
    (Authority) of the City of Central City, Nebraska. The
    redevelopment contract requires interest only payments in 2005
    and semiannual interest and principal payments beginning
    June 1, 2006 through 2018. The bonds contain fixed interest
    rates ranging from 6.25% to 7.25%. Real estate taxes paid by the
    Company and allocated to the Authority will be used by the
    Authority to pay principal and interest of the bonds. Although
    such real estate taxes are expected to be sufficient to repay
    the bonds, the Company is obligated to pay any deficiency when
    due. The agreement is secured by a mortgage on the
    Companys real property which is subordinate to the
    variable term notes payable to bank and the revolving term note. F-50




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##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (Dollars
    in Thousands, except per share data)
     Years ending December 31,2006

$
3,3882007


3,5802008


3,7812009


11,5522010


229Thereafter


2,658$
25,188   Note 7.
    Members
    Equity    Note 8.
    Employee
    Benefit Plan    Note 9.
    Related
    Party Transactions, Commitments and Contingencies and
    Concentrations         F-51




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##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (Dollars
    in Thousands, except per share data)
                         F-52




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##### Table of Contents



Platte
    Valley Fuel Ethanol, LLC
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (Dollars
    in Thousands, except per share data)
     Years EndedDecember 31,Customer

2004


2005UBE for ethanol

$
40,997


$
74,886Marketer for wet distillers grain,
    a related party


6,721



9,682$
47,718


$
84,568   Receivable BalanceCustomer

as of December 31, 2005UBE

$
1,089Marketer for wet distillers grain,
    a related party


159$
1,248     Note 10.
    Subsequent
    Events (Unaudited)  Construction contract  Val-E Ethanol,
    LLC:
    Plant expansion:
    Acquisition by US BioEnergy
    Corporation:
 F-53




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##### Table of Contents



EXHIBIT
    INDEX
  2
.1

Transaction Agreement, dated March
    31, 2005, between US BioEnergy Corporation and Superior Corn
    Products, LLC (incorporated by reference to Exhibit 2.1 to
    Amendment No. 2 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on September 26, 2006,
    File No. 333-136279)2
.2

Transaction Agreement, dated May
    5, 2005, among US BioEnergy Corporation, United Bio Energy, LLC,
    ICM Marketing, Inc. and Fagen Management, LLC (incorporated by
    reference to Exhibit 2.2 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)2
.3

Transaction Agreement, dated March
    9, 2006, between US BioEnergy Corporation and Platte Valley Fuel
    Ethanol, LLC (incorporated by reference to Exhibit 2.3 to
    Amendment No. 2 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on September 26, 2006,
    File No. 333-136279)2
.4

Transaction Agreement, dated March
    9, 2006, between US BioEnergy Corporation and Gold Energy, LLC,
    as amended by Amendment No. 1, dated March 15, 2006
    (incorporated by reference to Exhibit 2.4 to Amendment No. 2 to
    US BioEnergy Corporations Registration Statement on Form
    S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)2
.5

Purchase Agreement, dated March
    31, 2006, between CHS, Inc. and United Bio Energy, LLC
    (incorporated by reference to Exhibit 2.5 to Amendment No. 2 to
    US BioEnergy Corporations Registration Statement on Form
    S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)2
.6

Membership Interest Purchase
    Agreement, dated April 30, 2006, among US BioEnergy Corporation
    and certain scheduled interest holders (incorporated by
    reference to Exhibit 2.6 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)3
.1

Second Amended and Restated
    Articles of Incorporation (incorporated by reference to Exhibit
    4.5 to US BioEnergy Corporations Registration Statement on
    Form S-8, filed with the SEC on December 15, 2006, File No.
    333-139367)3
.2

Second Amended and Restated Bylaws
    (incorporated by reference to Exhibit 4.6 to US BioEnergy
    Corporations Registration Statement on Form S-8, filed
    with the SEC on December 15, 2006, File No.
    333-139367)4
.1

Specimen common stock certificate
    (incorporated by reference to Exhibit 4.1 to Amendment No. 6 to
    US BioEnergy Corporations Registration Statement on Form
    S-1, filed with the SEC on November 27, 2006, File No.
    333-136279)4
.2

Subscription Agreement, dated
    November 17, 2005, between US BioEnergy Corporation and CHS Inc.
    (incorporated by reference to Exhibit 4.2 to Amendment No. 2 to
    US BioEnergy Corporations Registration Statement on Form
    S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)4
.3

Shareholders Agreement,
    dated December 20, 2006, between US BioEnergy Corporation and
    the shareholders signatories thereto (incorporated by reference
    to Exhibit 99.2 to Schedule 13D, filed by Gordon W. Ommen and
    certain affiliates with the SEC on December 26, 2006, with
    respect to the common stock, par value $0.01 per share, of US
    BioEnergy Corporation, File No. 005-82277)10
.1

Standard Form of Agreement between
    Owner and Design-Builder -- Lump Sum, dated August 26, 2005,
    between Superior Corn Products, LLC and Fagen, Inc (incorporated
    by reference to Exhibit 10.1 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.2

Standard Form of Agreement between
    Owner and Design-Builder -- Lump Sum, dated August 26, 2005,
    between US Bio Albert City, LLC and Fagen, Inc. (incorporated by
    reference to Exhibit 10.2 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)




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##### Table of Contents



10
.3

Lump Sum Design-Build Agreement,
    dated January 6, 2006, between Val-E Ethanol, LLC and Fagen,
    Inc. (incorporated by reference to Exhibit 10.3 to Amendment No.
    2 to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)10
.4

Lump Sum Design-Build Expansion
    Agreement, dated April 24, 2006, between Platte Valley Fuel
    Ethanol, LLC and Fagen, Inc. (incorporated by reference to
    Exhibit 10.4 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.5

First Amended and Restated Master
    Agreement for Design, Engineering and Construction of Dry Grind
    Ethanol Production Facilities (Projects in Advanced
    Development), dated August 10, 2006, between US BioEnergy
    Corporation and Fagen, Inc. (incorporated by reference to
    Exhibit 10.5 to Amendment No. 3 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on October 27, 2006, File No. 333-136279)10
.6

Master Agreement for Design,
    Engineering and Construction of Dry Grind Ethanol Production
    Facilities (Future Development), dated August 1, 2006, between
    US BioEnergy Corporation and Fagen, Inc. (incorporated by
    reference to Exhibit 10.6 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.7

Master Loan Agreement, dated
    November 15, 2005, between US Bio Albert City, LLC and AgStar
    Financial Services, PCA, as amended by Amendment No. 1, dated
    July 31, 2006, and as supplemented by the First Supplement,
    dated November 15, 2005, as amended, and the Second Supplement,
    dated November 15, 2005 (incorporated by reference to Exhibit
    10.7 to Amendment No. 2 to US BioEnergy Corporations
    Registration Statement on Form S-1, filed with the SEC on
    September 26, 2006, File No. 333-136279)10
.8

Continuing Guaranty, dated
    November 15, 2005, between US BioEnergy Corporation and AgStar
    Financial Services, PCA (incorporated by reference to Exhibit
    10.8 to Amendment No. 2 to US BioEnergy Corporations
    Registration Statement on Form S-1, filed with the SEC on
    September 26, 2006, File No. 333-136279)10
.9

Master Loan Agreement, dated
    November 15, 2005, between Superior Corn Products, LLC and
    AgStar Financial Services, PCA, as amended by Amendment No. 1,
    dated July 31, 2006, and as supplemented by the First
    Supplement, dated November 15, 2005, as amended, and the Second
    Supplement, dated November 15, 2005 (incorporated by reference
    to Exhibit 10.9 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.10

Continuing Guaranty, dated
    November 15, 2005, between US BioEnergy Corporation and AgStar
    Financial Services, PCA (incorporated by reference to Exhibit
    10.10 to Amendment No. 2 to US BioEnergy Corporations
    Registration Statement on Form S-1, filed with the SEC on
    September 26, 2006, File No. 333-136279)10
.11

Construction Loan Agreement, dated
    December 10, 2003, between Platte Valley Fuel Ethanol, LLC and
    First National Bank of Omaha, as amended by Amendment to
    Promissory Note, dated September 20, 2004, Amendment No. 2,
    dated December 9, 2004, Amendment No. 3, dated January 9, 2005,
    Amendment No. 4, dated December 9, 2005, and the Letter
    Agreement, dated July 28, 2006 (incorporated by reference to
    Exhibit 10.11 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.12

Redevelopment Contract, dated
    October 31, 2003, between Community Redevelopment Authority of
    the City of Central City, Nebraska and Platte Valley Fuel
    Ethanol, LLC (incorporated by reference to Exhibit 10.12 to
    Amendment No. 2 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on September 26, 2006,
    File No. 333-136279)10
.13

2005 Stock Incentive Plan
    (incorporated by reference to Exhibit 10.13 to Amendment No. 2
    to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)*10
.14

2006 Stock Incentive Plan
    (incorporated by reference to Exhibit 4.7 to US BioEnergy
    Corporations Registration Statement on Form S-8, filed
    with the SEC on December 15, 2006, File No. 333-139367)*




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##### Table of Contents



10
.15

Form of 2006 Employee Stock
    Purchase Plan (incorporated by reference to Exhibit 10.15 to
    Amendment No. 6 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on November 27,
    2006, File No. 333-136279)*10
.16

Services Agreement, dated November
    2005, between US BioEnergy Corporation and Capitaline Advisors,
    LLC, as amended by the First Amendment, dated August 14, 2006
    (incorporated by reference to Exhibit 10.16 to Amendment No. 2
    to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)10
.17

Aircraft Lease Agreement, dated
    March 1, 2006, between US BioEnergy Corporation and Capitaline
    Advisors, LLC (Beechcraft King Air B200) (incorporated by
    reference to Exhibit 10.17 to Amendment No. 2 to US
    BioEnergy Corporations Registration Statement on Form S-1,
    filed with the SEC on September 26, 2006, File No. 333-136279)10
.18

Aircraft Lease Agreement, dated
    March 1, 2006, between US BioEnergy Corporation and Capitaline
    Advisors, LLC (Cessna T182T) (incorporated by reference to
    Exhibit 10.18 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.19

Lease Agreement, dated June 1,
    2006, between US BioEnergy Corporation and CHS Inc.
    (incorporated by reference to Exhibit 10.19 to Amendment No. 2
    to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)10
.20

Amended and Restated Operating
    Agreement of United Bio Energy Fuels, LLC, dated March 31, 2006
    (incorporated by reference to Exhibit 10.20 to Amendment No. 2
    to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)10
.21

Management Agreement, dated March
    31, 2006, between United Bio Energy Fuels, LLC and CHS Inc.
    (incorporated by reference to Exhibit 10.21 to Amendment No. 2
    to US BioEnergy Corporations Registration Statement on
    Form S-1, filed with the SEC on September 26, 2006, File No.
    333-136279)10
.22

Ethanol Sales and Marketing
    Agreement, dated March 31, 2006, between US BioEnergy
    Corporation and Provista Renewable Fuels Marketing, LLC
    (formerly known as United Bio Energy Fuels, LLC), as amended by
    Amendment No. 1, effective as of March 31, 2006 (incorporated by
    reference to Exhibit 10.22 to Amendment No. 5 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on November 14, 2006, File No. 333-136279)10
.23

Leased Employee Agreement, dated
    May 15, 2006, between United Bio Energy, LLC and United Bio
    Energy Fuels, LLC (incorporated by reference to Exhibit 10.23 to
    Amendment No. 2 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on September 26, 2006,
    File
    No. 333-136279)10
.24

Construction Loan Agreement, dated
    August 22, 2006, between Platte Valley Fuel Ethanol, LLC and
    First National Bank of Omaha (incorporated by reference to
    Exhibit 10.26 to Amendment No. 2 to US BioEnergy
    Corporations Registration Statement on Form S-1, filed
    with the SEC on September 26, 2006, File No. 333-136279)10
.25

Form of Incentive Stock Option
    Agreement under the US BioEnergy Corporation 2005 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.27 to
    Amendment No. 2 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on September 26, 2006,
    File No. 333-136279)*10
.26

Stock Option Agreement, dated
    November 17, 2005, between US BioEnergy Corporation and Global
    Ethanol, Inc. (incorporated by reference to Exhibit 10.29 to
    Amendment No. 3 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on October 27, 2006,
    File No. 333-136279)*10
.27

Stock Option Agreement, dated
    November 17, 2005, between US BioEnergy Corporation and
    Capitaline Advisors, LLC (incorporated by reference to Exhibit
    10.30 to Amendment No. 3 to US BioEnergy Corporations
    Registration Statement on Form S-1, filed with the SEC on
    October 27, 2006, File No.
    333-136279)*10
.28

Form of Incentive Stock Option
    Agreement under the US BioEnergy Corporation 2006 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.30 to
    Amendment No. 8 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on December 11, 2006,
    File No. 333-136279)*




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##### Table of Contents



10
.29

Form of Non-Qualified Stock Option
    Agreement under the US BioEnergy Corporation 2006 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.31 to
    Amendment No. 8 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on December 11, 2006,
    File No. 333-136279)*10
.30

Form of Restricted Stock Award
    Agreement under the US BioEnergy Corporation 2006 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.32 to
    Amendment No. 8 to US BioEnergy Corporations Registration
    Statement on Form S-1, filed with the SEC on December 11, 2006,
    File No. 333-136279)*21


Subsidiaries of US BioEnergy
    Corporation23
.1

Consent of McGladrey & Pullen,
    LLP, independent registered public accounting firm, relating to
    the consolidated financial statements of US BioEnergy
    Corporation, United Bio Energy, LLC, and Platte Valley Fuel
    Ethanol, LLC23
.2

Consent of Kennedy and Coe, LLC,
    independent auditors, relating to the consolidated financial
    statements of United Bio Energy, LLC.31
.1

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certification of Chief Executive
    Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
    to Section 906 of the Sarbanes-Oxley Act of 200232
.2

Certification of Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
    to Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Management contract or compensatory plan or arrangement
    required to be filed (and/or incorporated by reference) as an
    exhibit to this Annual Report on
    Form 10-K
    pursuant to Item 15(a)(3) of
    Form 10-K.
    
    Portions of the exhibit have been omitted pursuant to an
    order granting confidential treatment under Rule 406 of the
    Securities Act of 1933, as amended. Omitted portions for which
    confidential treatment has been granted have been filed
    separately with the Securities and Exchange Commission.