##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 þ
    
    Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the fiscal year ended December 31, 2009
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period from  to
 Commission file number 000-51965
 WESTERN IOWA ENERGY, LLC
  Iowa
    
    41-2143913(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)1220 S. CENTER STREET, P.O BOX 399WALL LAKE, IOWA
(Address of principal executive offices)
    
    51466
(Zip Code)
 (712) 664-2173
  None
  26,447
 o Yes þ No
 o Yes þ No
 Note
 þ o
 o o
 þ
  o Large accelerated filer
    
    o Accelerated filer
    
    þ Non-accelerated filer
    
    o Smaller reporting company(Do not check if a smaller reporting company)
 o þ




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##### 



Table of Contents
 PART I
    
    
    3ITEM 1. BUSINESS
    
    
    3ITEM 1A. RISK FACTORS
    
    
    19ITEM 2. PROPERTIES
    
    
    30ITEM 3. LEGAL PROCEEDINGS
    
    
    30ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    31PART II
    
    
    31ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
    
    
    31ITEM 6. SELECTED FINANICAL DATA
    
    
    34ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    35ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
    
    
    47ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    F-1INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
    
    
    F-1ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    49ITEM 9A. CONTROLS AND PROCEDURES
    
    
    49ITEM 9B. OTHER INFORMATION
    
    
    50PART III
    
    
    50ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT
    
    
    50ITEM 11. EXECUTIVE COMPENSATION
    
    
    50ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER
MATTERS
    
    
    50ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
    
    
    50ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    50ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    
    
    51SIGNATURES
    
    
    53Exhibit 10.20Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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AVAILABLE INFORMATION
  
 PART I
 
 ITEM 1.
    
    BUSINESS.
 General Development of Business
      Proposed
Consolidation with REG
   3




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Proposed Consolidation with REG
     4




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Financial Information About Segments
  Principal Products
  Biodiesel
   Primary Co-Product  Crude Glycerin
   Primary Co- Product   Fatty Acid
   5




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Principal Products Markets
 Distribution Methods
 BUSINESS  Proposed
Consolidation with REG
 Distribution Methods
  BUSINESS  Proposed Consolidation with REG
   6




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Seasonal Demand for Biodiesel
  General Demand for Biodiesel
     7




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Sources and Availability of Raw Materials
 Feedstock Procurement
  
    
    Provide analysis and audit of feedstock suppliers;
    
    Purchase feedstock at competitive prices meeting specifications and in
quantities adequate to satisfy the production schedule of our plant;
    
    Negotiate for discounts on feedstock, where obtainable;
    
    Arrange for transportation, logistics, and scheduling of feedstock deliveries;
    
    Provide analysis and audit of bulk transportation providers;
    
    Perform due diligence requirements for investigation of suppliers of the
chemical inputs;
    
    Provide analysis and audit of chemical suppliers;
    
    Purchase chemical inputs at competitive prices meeting specifications for use
in our plant;
    
    Negotiate for discounts on the purchase of chemical inputs, where obtainable;
    
    Procure adequate chemical inputs to meet our production schedules; and
    
    Arrange for transportation, logistics, and scheduling services for chemical
input deliveries by suppliers.
  BUSINESS 
Proposed Consolidation with REG
 Feedstock Cost and Supply
    8




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Animal Fats and Other Alternative Feedstocks
   Choice White Grease Prices
 PriceMonth
    
    (cents per lb.)March 2009
    
    
    22.62April 2009
    
    
    19.46May 2009
    
    
    24.84June 2009
    
    
    29.06July 2009
    
    
    28.77August 2009
    
    
    28.79September 2009
    
    
    28.71October 2009
    
    
    24.27November 2009
    
    
    22.53December 2009
    
    
    23.68January 2010
    
    
    17.95February 2010
    
    
    26.79
 Soybean Oil
  U.S.
Soybean Oil Prices for the Past  10 Years
 Marketing
    
    PriceYear
    
    (cents)1999/00
    
    
    15.602000/01
    
    
    14.152001/02
    
    
    16.462002/03
    
    
    22.042003/04
    
    
    29.972004/05
    
    
    23.012005/06
    
    
    23.412006/07
    
    
    31.022007/08
    
    
    52.032008/09
    
    
    32.162009/10
    
    
    33.5-36.5
    (1)
 U.S. Soybean Oil Prices  for Preceding Twelve-Month  Period
 PriceMonth
    
    (cents)February
    
    
    28.93March
    
    
    28.23April
    
    
    32.76May
    
    
    36.06June
    
    
    35.66July
    
    
    31.08August
    
    
    33.69September
    
    
    30.96October
    
    
    33.15November
    
    
    36.59December
    
    
    36.81January
    
    
    34.88
    (1)
 (1)
    
    Preliminary Price Source: USDA, Oil Crops Outlook Report, February 16, 2010
  9




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Feedstock Cold Flow Properties
  Type of Fuel
    
    Cloud Point
    
    
    Pour PointSoy-based Biodiesel (B100)
    
    
    32oF
    
    
    
    25oFChoice white grease-based Biodiesel (B100)
    
    
    48oF
    
    
    
    42oFBeef tallow-based Biodiesel (B100)
    
    
    61oF
    
    
    
    59oFNo. 2 Ultra Low Sulfur Petroleum Diesel
    
    
    6oF
    
    
    
    -30oFB2 Soy Blend with No. 2 Diesel
    
    
    7oF
    
    
    
    -25oF
   10




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Hedging
  Pretreatment Costs
   Utilities, Energy & Infrastructure
  Electricity .
 Water
 Natural Gas
  11




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Patent, Trademarks and Licenses.
  Government Regulation and Federal Biodiesel Supports
  Renewable Fuels Standard
      12




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Federal Biodiesel Supports and Programs
     13




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State Legislation
    Effect of Government Incentives and Regulation
    14




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Competition with Other Biodiesel Producers
       15




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
    
    Ag Processing Inc. (AGP) in Sergeant Bluff. This facility produces biodiesel
from refined bleached and deodorized soybean oil produced at its solvent extraction
processing plant in Eagle Grove, Iowa. AGP has completed an expansion of its plant,
increasing its production capacity to 30 million gallons per year.
 
    
    Cargill Inc., located in Iowa Falls. Cargills facility has an annual
production capacity of 37.5 million gallons. Cargill uses soybean oil as its primary
feedstock and its biodiesel plant is located adjacent to its soybean crush facility.
 
    
    Clinton County BioEnergy, L.L.C., located in Clinton, Iowa. This facility has
capacity to produce 10 million gallons of biodiesel annually and uses soybean oil as its
primary feedstock.
 
    
    Iowa Renewable Energy, LLC, located in Washington, Iowa. The facility has
capacity to produce 30 million gallons of biodiesel per year from either vegetable oil or
animal fat. This biodiesel plant was constructed by REG and is currently managed by REG.
 
    
    Riksch Biofuels L.L.C., located in Crawfordsville, Iowa, is capable of
producing 10 million gallons of biodiesel each year.
 
    
    Sioux Biochemical, Inc., located in Sioux Center, Iowa, is capable of producing
2.0 million gallons of biodiesel each year.
 
    
    Soy Solutions of Iowa, LLC, located in Milford, Iowa. This is a stand-alone
facility that purchases soybean oil from the market. The facility has capacity to produce
approximately 2 million gallons of biodiesel annually, and utilizes virgin soybean oil as
its sole feedstock.
 
    
    Western Dubuque Biodiesel, LLC, located near Farley, Iowa. Western Dubuque
Biodiesel has the capacity to produce 30 million gallons of biodiesel per year. It
primarily utilizes soybean oil and is not capable of pretreating animal fats for use in the
production process. This biodiesel plant was constructed by REG and is currently managed
by REG.
  Competition from Other Fuel Sources and Additives
   16




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Research and Development
  Dependence on One or a Few Major Customers
 Sources and Availability of Raw Materials  Feedstock Procurement  Distribution of Principal Products BUSINESS 
Proposed Consolidation with REG RISK FACTORS
  17




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DESCRIPTION OF BUSINESS  Competition RISK FACTORS
 Costs and Effects of Compliance with Environmental Laws
    Employees
  JOB TITLE
    
    NUMBER EMPLOYEESProcess Operator
    
    
    16Accounting Manager
    
    
    1Maintenance Supervisor
    
    
    1Maintenance Technicians
    
    
    2Administrative / Accounting Assistant
    
    
    1Shipping/Receiving
    
    
    3Operations Supervisor
    
    
    1Quality Assurance Coordinator
    
    
    1Laboratory Coordinator
    
    
    1Compliance Coordinator
    
    
    1Total
    
    
    28
  18




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
    
    Planning and scheduling biodiesel production to meet customer needs
and marketing goals;
 
    
    Monitor and maintain quality control processes;
 
    
    Oversee facility and equipment maintenance;
 
    
    Assist with regulatory affairs monitoring and compliance;
 
    
    Assist with budgeting and the monitoring of labor and other expenses in
the operation;
 
    
    Development of an annual budget for presentation to and approval of
Western Iowa Energys board of managers (Board);
 
    
    Attend meetings of the Board and provide information upon its request;
 
    
    Work with Western Iowa Energys Board to formulate Western Iowa
Energys mission and goals;
 
    
    Work towards achievement of such mission and goals;
 
    
    Hire, terminate and replace Biodiesel Facility personnel as necessary; and
 
    
    Such other duties as may be agreed between REG Services
Iowa Energy.
 BUSINESS 
Proposed Consolidation with REG RISK FACTORS
 
 ITEM 1A.
    
    RISK FACTORS.
 You should carefully read and consider the risks and uncertainties below and the other information
contained in this report. The risks and uncertainties described below are not the only ones we may
face. The following risks, together with additional risks and uncertainties not currently known to
us or that we currently deem immaterial could impair our financial condition and results of
operations.
  19




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Risks Related to Our Business
 Declines in the prices of biodiesel and glycerin will have a significant negative impact on
our financial performance.
   Our business is sensitive to feedstock costs. Changes in the prices and availability of our
feedstock may hinder our ability to generate revenue.
    20




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Increases in the price of natural gas could reduce our profitability.
  We are in competition with REG, our current plant manager and product marketer, which could
place us at a competitive disadvantage and cause a conflict of interest for REG.
   21




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If we are unable to negotiate a new agreement with REG, we may be placed at a greater
competitive disadvantage in the biodiesel industry.
 We may be unable to hire a qualified general manager or operations manager for our plant.
 We may be unable to market and distribute our biodiesel and glycerin as a result of REGs
termination of the MOSA.
 We may be unable to procure feedstock for our plant as a result of REGs termination of the
MOSA.
  22




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Our exclusive reliance on REG to manage our plant, procure our inputs and market our products
could damage our profitability if REG fails to perform its obligations under the remaining term of
the MOSA.
  We have limited experience in the biodiesel industry, which increases the risk of our
inability to operate the biodiesel plant.
  We engage in hedging transactions which involve risks that can harm our business.
  We compete with other biofuels plants for key management and other personnel who are critical
to our success.
  23




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Our business is not diversified.
 If it is necessary to temporarily cease operating our biodiesel plant for sustained periods of
time for any reason, we might not be able to meet our current liabilities and may experience
losses.
 We are at a disadvantage in marketing our glycerin because our plant does not produce
pharmaceutical grade glycerin, thereby decreasing the market for the glycerin we produce.
 Concerns about fuel quality may impact our ability to successfully market our biodiesel.
 Cold weather may cause biodiesel to gel, which could have an adverse impact on our ability to
successfully market our biodiesel.
  24




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There are doubts about our ability to continue to generate positive cash flow and if we are
unable to continue our business, our units may have little or no value.
 Technological advances could significantly decrease the cost of producing biodiesel or result
in the production of higher-quality biodiesel, and if we are unable to adopt or incorporate
technological advances into our operations, our plant could become uncompetitive or obsolete.
 Risks Related to the Biodiesel Industry
 The economic recession and tightening of credit markets has caused demand for biodiesel to
decline, which may adversely affect our ability to generate revenues.
 The decline in crude oil and diesel prices may affect our ability to sell biodiesel at
profitable prices.
  25




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The recent downturn in the U.S. economy may limit our customers ability to pay for our
biodiesel and co-products, which may adversely affect our ability to generate revenues
 The European Commission has imposed definitive anti-dumping and countervailing duties on
biodiesel imported into Europe, which may negatively impact biodiesel demand and our revenues.
 The RFS may not result in increased demand for biodiesel since existing biodiesel production
capacity already exceeds the RFS requirement.
  If demand for biodiesel fails to grow at the same rate as planned supply, the excess
production capacity will adversely impact our financial condition.
  26




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Excess production of glycerin, a co-product of the biodiesel production process, may cause the
price of glycerin to decline, thereby adversely affecting our ability to generate revenue from the
sale of glycerin.
 The biodiesel manufacturing industry is a feedstock limited industry. As more plants are
developed and go into production there may not be an adequate supply of feedstock to supply the
demands of the industry, which could threaten the viability of our plant.
 The biodiesel industry is becoming increasingly competitive and we compete with some larger,
better financed entities which could impact our ability to operate profitably.
 Competition from other sources of fuel may decrease the demand for our biodiesel.
 Asian soybean rust and other plant diseases may decrease our ability to obtain a sufficient
feedstock supply.
  27




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Automobile manufacturers and other industry groups have expressed reservations regarding the
use of biodiesel, which could negatively impact our ability to market our biodiesel.
  Competition from other diesel fuel lubricity additives for ultra low sulfur diesel may be a
less expensive alternative to our biodiesel, which would cause us to lose market share and
adversely affect our ability to generate revenues.
 Several biofuels companies throughout the country have recently filed for Chapter 1l
bankruptcy due to industry and economic conditions.
 Risks Related to Regulation and Governmental Action
 Loss of or ineligibility for favorable tax benefits for biodiesel production could hinder our
ability to operate at a profit and reduce the value of our units.
  28




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A change in environmental regulations or violations thereof could be expensive and increase
our costs.
 Risks Related to Conflicts of Interest
 We may have conflicts of interest with REG, which may cause difficulty in enforcing claims
against REG.
   Risks Related to Tax Issues in a Limited Liability Company
 We expect to continue to be taxed as a partnership, however, if we are taxed as a corporation
we would be subject to corporate level taxes which would decrease our net income and decrease the
amount of cash available to distribute to our members.
 We may be unable to make any distributions to our members to satisfy tax obligations unless we
obtain the approval of our lender.
 Members may be allocated a share of our taxable income that exceeds any cash distributions
received, therefore members may have to pay this tax liability using their personal funds.
  29




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If we are audited by the IRS resulting in adjustments to our tax returns, this could cause the
IRS to audit members tax returns, which could lead to additional tax liability for our members.
 Even if we operate profitably, our lender may not approve future distributions of profits to
our members.
 
 ITEM 2.
    
    PROPERTIES
   
    
    Principal office building
 
    
    Processing building
 
    
    Pretreatment building
 
    
    Loading/receiving building
 
    
    Storage warehouse
 
    
    Storage tank farm
 
    
    Iron treatment facility
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 
Liquidity and Capital Resources.
 
 ITEM 3.
    
    LEGAL PROCEEDINGS.
    30




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ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  
 PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES.
 Market Information
    # ofQuarter
    
    Low Price
    
    
    High Price
    
    
    Average Price
    
    
    Units Traded2008 1st
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02008 2nd
    
    $
    750
    
    
    $
    750
    
    
    $
    750
    
    
    
    202008 3rd
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02008 4th
    
    $
    950
    
    
    $
    950
    
    
    $
    950
    
    
    
    102009 1st
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02009 2nd
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02009 3rd
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02009 4th
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    0
  31




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# ofSellers Quarter
    
    Low Price
    
    
    High Price
    
    
    Average Price
    
    
    Units Listed2008 1st
    
    $
    750
    
    
    $
    1,050
    
    
    $
    900
    
    
    
    312008 2nd
    
    $
    1,000
    
    
    $
    1,100
    
    
    $
    1,050
    
    
    
    452008 3rd
    
    $
    1,000
    
    
    $
    1,250
    
    
    $
    1,125
    
    
    
    302008 4th
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02009 1st
    
    $
    750
    
    
    $
    750
    
    
    $
    750
    
    
    
    202009 2nd
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02009 3rd
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02009 4th
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    0
 # ofBuyers Quarter
    
    Low Price
    
    
    High Price
    
    
    Average Price
    
    
    Units Listed2008 1st
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02008 2nd
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02008 3rd
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02008 4th
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02009 1st
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02009 2nd
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02009 3rd
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    02009 4th
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    0
  Unit Holders
  Distributions
  Item 7Managements Discussion and Analysis of Financial Condition and Results of
OperationsIndebtedness.
   32




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Performance Graph
  
  Equity Compensation Plans
   33




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Sale of Unregistered Securities
  Repurchases of Equity Securities
  
 ITEM 6.
    
    SELECTED FINANCIAL DATA.
  Statement ofOperations Data:
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Revenues
    
    $
    50,109,924
    
    
    $
    79,782,833
    
    
    $
    78,676,998
    
    
    $
    31,991,876
    
    
    $
    Cost of Goods Sold
    
    $
    46,475,116
    
    
    $
    75,431,492
    
    
    $
    78,253,820
    
    
    $
    23,715,252
    
    
    $
    Gross Profit
    
    $
    3,634,808
    
    
    $
    4,351,341
    
    
    $
    423,178
    
    
    $
    8,276,624
    
    
    $
    Operating Expenses
    
    $
    2,052,040
    
    
    $
    1,915,675
    
    
    $
    1,750,886
    
    
    $
    1,606,516
    
    
    $
    282,249Other Income (Expense)
    
    $
    39,307
    
    
    $
    (592,957
    )
    
    $
    (1,278,545
    )
    
    $
    (337,583
    )
    
    $
    324,427Net Income (Loss)
    
    $
    1,622,075
    
    
    $
    1,842,709
    
    
    $
    (2,606,253
    )
    
    $
    6,332,525
    
    
    $
    42,178Weighted Average Units Outstanding
    
    
    26,447
    
    
    
    26,447
    
    
    
    26,447
    
    
    
    25,674
    
    
    
    15,405Net Income (Loss) Per Unit
    
    $
    61.33
    
    
    $
    69.68
    
    
    $
    (98.55
    )
    
    $
    246.65
    
    
    $
    2.74Cash Distributions per Unit
    
    $
    
    
    
    $
    
    
    
    $
    80.21
    
    
    $
    
    
    
    $
    
 Balance Sheet Data:
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Total Assets
    
    $
    35,804,989
    
    
    $
    37,478,401
    
    
    $
    49,080,864
    
    
    $
    48,831,373
    
    
    $
    26,530,635Long-Term Debt, less current maturities
    
    $
    3,262,222
    
    
    $
    6,725,056
    
    
    $
    12,366,667
    
    
    $
    12,851,239
    
    
    $
    10,432Members Equity
    
    $
    28,550,785
    
    
    $
    26,928,710
    
    
    $
    25,086,001
    
    
    $
    29,813,568
    
    
    $
    22,481,043Units Outstanding at End of Year
    
    
    26,447
    
    
    
    26,447
    
    
    
    26,447
    
    
    
    25,674
    
    
    
    15,405Book Value Per Capital Unit
    
    $
    1,079.55
    
    
    $
    1,018.21
    
    
    $
    948.54
    
    
    $
    1,161.24
    
    
    $
    1,459.33
  34




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
  Cautionary Statements Regarding Forward Looking Statements
 RISK FACTORS
 
    
    Overcapacity within the biodiesel industry resulting in increased competition and
costs for feedstock and/or decreased prices for our biodiesel and glycerin;
 
    
    Competition with other manufacturers in the biodiesel industry;
 
    
    The availability and adequacy of our cash flow to meet our requirements;
 
    
    Results of our hedging strategies;
 
    
    Changes in interest rates and the availability of credit to support capital
improvements, development, expansion and operations;
 
    
    Our ability to keep up with the latest technology for the production of biodiesel;
 
    
    Decrease in the demand for biodiesel;
 
    
    Changes in plant production capacity or technical difficulties in operating the
plant;
 
    
    Actual biodiesel and glycerin production varying from expectations;
 
    
    Availability and cost of products and raw materials, particularly soybean oil and
animal fats;
 
    
    Changes in the price and market for biodiesel and its co-products;
 
    
    Our ability to market and our reliance on third parties to market our products;
 
    
    Our ability to identify and enter into contractual arrangements with third parties
to procure feedstock for our plant and to market our products;
 
    
    Fluctuations in petroleum prices;
 
    
    Competition from alternative fuels and alternative fuel additives;
 
    
    Changes in our business strategy, capital improvement or development plans;
 
    
    Consequences of the domestic and global economic downturn and recent financial
crisis;
 
    
    Our ability to generate free cash flow to invest in our business and service our
debt;
 
    
    Changes in general economic conditions or the occurrence of certain events causing
an economic impact in the agriculture, oil or transportation industries;
 
    
    Changes in the environmental regulations or in our ability to comply with the
environmental regulations that apply to our plant operations;
 
    
    Changes and advances in biodiesel production technology;
 
    
    Our ability to continue to export our biodiesel;
 
    
    Changes in federal, state, or local incentives for biodiesel production, including
without limitation the expiration of the federal tax credit for biodiesel;
 
    
    Changes to the rules related to the Renewable Fuels Standard;
 
    
    Our ability to comply with the financial covenants in our loan agreements;
  35




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##### Table of Contents




    
    The imposition of tariffs or other duties on biodiesel imported into Europe;
 
    
    Changes to our operations related to the rejection of the proposed consolidation
with REG, including without limitation our ability to retain and/or train a general
manager for the plant, our ability to procure feedstock for our plant, and our ability
to market and sell our finished products; and
 
    
    Other factors described elsewhere in this report.
  Overview
        36




---



##### Table of Contents



BUSINESS  Proposed
Consolidation with REG RISK FACTORS
 Results of Operations
 Comparison of Fiscal Years Ended December 31, 2009 and December 31, 2008
  Fiscal Year Ended
    
    
    Fiscal Year EndedIncome Statement Data
    
    December 31, 2009
    
    
    December 31, 2008Revenues
    
    $
    50,109,924
    
    
    
    100.00
    %
    
    $
    79,782,833
    
    
    
    100.00
    %Cost of Sales
    
    $
    46,475,116
    
    
    
    92.75
    %
    
    $
    75,431,492
    
    
    
    94.55
    %Gross Profit
    
    $
    3,634,808
    
    
    
    7.25
    %
    
    $
    4,351,341
    
    
    
    5.45
    %Operating Expenses
    
    $
    2,052,040
    
    
    
    4.10
    %
    
    $
    1,915,675
    
    
    
    2.40
    %Operating Income
    
    $
    1,582,768
    
    
    
    3.16
    %
    
    $
    2,435,666
    
    
    
    3.05
    %Other Income (Expense)
    
    $
    39,307
    
    
    
    0.08
    %
    
    $
    (592,957
    )
    
    
    (0.74
    )%Net Income
    
    $
    1,622,075
    
    
    
    3.24
    %
    
    $
    1,842,709
    
    
    
    2.31
    %
 Revenues
  Fiscal Year EndedDecember 31, 2009
    
    
    Fiscal Year EndedDecember 31, 2008Revenue Source
    
    Amount
    
    
    % of Revenues
    
    
    Amount
    
    
    % of RevenuesBiodiesel Sales
    
    $
    48,097,635
    
    
    
    96.0
    %
    
    $
    76,970,163
    
    
    
    96.5
    %Fatty Acid Sales
    
    $
    939,542
    
    
    
    1.9
    %
    
    
    
    
    
    
    Glycerin Sales
    
    $
    703,169
    
    
    
    1.4
    %
    
    $
    2,812,670
    
    
    
    3.5
    %USDA Bioenergy Program
    
    $
    298,476
    
    
    
    0.6
    %
    
    
    
    
    
    
    Custom Processing
    
    $
    71,102
    
    
    
    0.1
    %
    
    
    
    
    
    
    Total Revenues
    
    $
    50,109,924
    
    
    
    100.0
    %
    
    $
    79,782,833
    
    
    
    100
    %
  37




---



##### Table of Contents



BUSINESS  Government Regulation and Federal Biodiesel Supports
  BUSINESS  Government Regulation
and Federal Biodiesel Supports
    38




---



##### Table of Contents



ITEM 1. BUSINESS  Government Regulation and Federal
Biodiesel Supports Federal Biodiesel Supports and Programs
  Cost of Goods Sold
       39




---



##### Table of Contents



Operating Expenses
 BUSINESS  Proposed Consolidation with REG
 Other Income (Expenses)
 Liquidity and Capital
Resources
 Comparison of Fiscal Years Ended December 31, 2008 and 2007.
  Fiscal Year Ended
    
    
    Fiscal Year EndedDecember 31, 2008
    
    
    December 31, 2007Income Statement Data
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentRevenues
    
    $
    79,782,833
    
    
    
    100.00
    %
    
    $
    78,676,998
    
    
    
    100.00
    %Cost of Sales
    
    $
    75,431,492
    
    
    
    94.55
    %
    
    $
    78,253,820
    
    
    
    99.46
    %Gross Profit
    
    $
    4,351,341
    
    
    
    5.45
    %
    
    $
    423,178
    
    
    
    0.54
    %Operating Expenses
    
    $
    1,915,675
    
    
    
    2.40
    %
    
    $
    1,750,886
    
    
    
    2.23
    %Operating Income
    
    $
    2,435,666
    
    
    
    3.05
    %
    
    $
    (1,327,708
    )
    
    
    (1.69
    )%Other Income (Expense)
    
    $
    (592,957
    )
    
    
    (0.74
    )%
    
    $
    (1,278,545
    )
    
    
    (1.63
    )%Net Income (Loss)
    
    $
    1,842,709
    
    
    
    2.31
    %
    
    $
    (2,606,253
    )
    
    
    (3.31
    )%
  40




---



##### Table of Contents



Revenues
  Fiscal Year EndedDecember 31, 2008
    
    
    Fiscal Year EndedDecember 31, 2007Revenue Source
    
    Amount
    
    
    %  of Revenues
    
    
    Amount
    
    
    % of RevenuesBiodiesel Sales
    
    $
    76,970,163
    
    
    
    96.5
    %
    
    $
    77,195,818
    
    
    
    98.1
    %Glycerin Sales
    
    $
    2,812,670
    
    
    
    3.5
    %
    
    $
    1,481,180
    
    
    
    1.9
    %Total Revenues
    
    $
    79,782,833
    
    
    
    100
    %
    
    $
    78,676,998
    
    
    
    100
    %
  Cost of Sales
  Operating Expenses
  Other Income (Expenses)
   41




---



##### Table of Contents



Changes in Financial Condition for Fiscal Years Ended December 31, 2009 and 2008
  December 31, 2009
    
    
    December 31, 2008Current Assets
    
    $
    7,424,221
    
    
    $
    7,049,998Current Liabilities
    
    $
    3,991,982
    
    
    $
    3,824,635Members Equity
    
    $
    28,550,785
    
    
    $
    26,928,710
 Current Assets
  Current Liabilities
  Members Equity
  Liquidity and Capital Resources
 Comparison of Cash Flows for Fiscal Years Ended December 31, 2009 and December 31, 2008
 2009
    
    
    2008Net cash provided by operating activities
    
    $
    3,394,861
    
    
    $
    9,050,603Net cash used in investing activities
    
    $
    (161,747
    )
    
    $
    (394,028
    )Net cash used in financing activities
    
    $
    (3,299,214
    )
    
    $
    (8,622,223
    )Net increase (decrease) in cash and equivalents
    
    $
    (66,100
    )
    
    $
    34,352
 Operating Cash Flows
  Investing Cash Flows
 
  42




---



##### Table of Contents



Financing Cash Flows
  Comparison of Cash Flows for Fiscal Years Ended December 31, 2008 and December 31, 2007
 2008
    
    
    2007Net cash provided by (used in) operating activities
    
    $
    9,050,603
    
    
    $
    973,435Net cash used in investing activities
    
    $
    (394,028
    )
    
    $
    (686,756
    )Net cash used in financing activities
    
    $
    (8,622,223
    )
    
    $
    (282,953
    )Net increase (decrease) in cash and equivalents
    
    $
    34,352
    
    
    $
    3,726
 Operating Cash Flows
  Investing Cash Flows
 
 Financing Cash Flows
  Indebtedness
 Short-Term Debt Sources
  Long-Term Debt Sources
   43




---



##### Table of Contents




    
    During the 2007 fiscal year, we could not expend, in the aggregate, more than
$2,600,000 for the acquisition of fixed or capital assets. In each subsequent year, we
cannot expend, in the aggregate, more than $500,000 for the acquisition of fixed or
capital assets;
 
    
    We cannot declare or pay any dividends or make any distribution of assets to the
members or acquire for value any of our membership units, except that in any fiscal
year we can make a distribution to the Companys members of up to 40% of the net profit
for each fiscal year.
 
    
    We cannot enter into any lease as lessee if the lease should be capitalized in
accordance with GAAP for the rental or hire of any real or personal property, except
leases which do not require the Company to make scheduled payments to the lessors in
any fiscal year in excess of $100,000, in the aggregate.
 
    
    We must maintain working capital, defined as an excess of current assets over
current liabilities, of not less than $6,000,000 at the end of each period for which
financial statements are required to be furnished under the MLA.
 
    
    We must maintain a net worth, defined as an excess of total assets over total
liabilities, of not less than $26,000,000 at the end of each period for which financial
statements are required to be furnished under the MLA.
       44




---



##### Table of Contents



Contractual Obligations
  Payments Due by PeriodTotal
    
    
    2010
    
    
    2011-2012
    
    
    2013-2014
    
    
    After 2014Long-Term Debt Obligations
    
    $
    5,721,944
    
    
    $
    2,459,722
    
    
    $
    224,444
    
    
    $
    2,684,445
    
    
    $
    353,333Capital Lease ObligationsOperating Lease Obligations
    
    $
    
    
    
    $
    35,627
    
    
    $
    17,313
    
    
    $
    
    
    
    $
    Purchase ObligationsOther Long-Term
Liabilities Recorded on
the Balance SheetTotal
    
    $
    5,721,944
    
    
    $
    2,495,349
    
    
    $
    241,757
    
    
    $
    2,684,445
    
    
    $
    353,333
 Application of Critical Accounting Estimates
  Inventories .
 Long-Lived Assets .
  45




---



##### Table of Contents



Recently Adopted Accounting Standards .
    Off-Balance Sheet Arrangements
   46




---



##### Table of Contents



ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 Derivatives and Hedging
  Interest Rate Risk
 Item 7 
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  Liquidity
and Capital Resources, Indebtedness.
  Outstanding Variable
    
    Interest Rate at
    
    
    Adverse 10% Change in
    
    
    Annual Adverse ChangeRate Debt at 12/31/09
    
    12/31/09
    
    
    Interest Rates
    
    
    to Income$2,350,000
    
    
    3.50
    %
    
    
    3.85
    %
    
    $
    8,225$2,630,000
    
    
    3.50
    %
    
    
    3.85
    %
    
    $
    9,205
 Commodity Price Risk
     47




---



##### Table of Contents



Effect ofHypothetical AdverseFair Value
    
    
    Change - Market RiskDecember 31, 2009
    
    $
    533,131
    
    
    $
    53,313December 31, 2008
    
    $
    1,632,902
    
    
    $
    163,290
  48




---



##### Table of Contents



ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Page No.Report of Independent Registered Public Accounting Firm
    
    
    F-2Financial StatementsBalance Sheets as of December 31, 2009 and 2008
    
    
    F-3Statements of Operations for the years ended December 31, 2009, 2008, and 2007
    
    
    F-4Statements of Changes in Members Equity for the years ended December 31,
2009, 2008, and 2007
    
    
    F-5Statements of Cash Flows for the years ended December 31, 2009, 2008, and 2007
    
    
    F-6Notes to Financial Statements
    
    
    F-7 - F-17




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 Western Iowa Energy, LLC
 Western Iowa Energy, LLC
     
  F-2




---



##### Table of Contents



WESTERN IOWA ENERGY, LLC
 
 BALANCE SHEETS
 December 31, 2009 and 2008
 2009
    
    
    2008ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    300
    
    
    $
    66,400Margin deposits
    
    
    58,445
    
    
    
    285,295Derivative instruments
    
    
    
    
    
    
    61,360Trade accounts receivable  related party
    
    
    3,106,676
    
    
    
    1,428,521Other receivables
    
    
    387,883
    
    
    
    163,470Incentive receivables
    
    
    2,946,499
    
    
    
    312,019Inventory
    
    
    383,528
    
    
    
    4,510,457Prepaid expenses and other assets
    
    
    540,890
    
    
    
    222,476Total current assets
    
    
    7,424,221
    
    
    
    7,049,998PROPERTY, PLANT AND EQUIPMENTLand and land improvements
    
    
    1,364,842
    
    
    
    1,364,842Office building and equipment
    
    
    645,542
    
    
    
    645,542Plant and process equipment
    
    
    33,854,309
    
    
    
    33,683,185Construction in progress
    
    
    8,136
    
    
    
    17,513Total, at cost
    
    
    35,872,829
    
    
    
    35,711,082Less accumulated depreciation
    
    
    7,669,210
    
    
    
    5,451,621Total property, plant and equipment
    
    
    28,203,619
    
    
    
    30,259,461OTHER ASSETSLand options
    
    
    596
    
    
    
    596Other investments
    
    
    107,198
    
    
    
    80,895Loan origination fees, net of amortization
    
    
    69,355
    
    
    
    87,451Total other assets
    
    
    177,149
    
    
    
    168,942TOTAL ASSETS
    
    $
    35,804,989
    
    
    $
    37,478,401LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIESChecks issued in excess of bank balance
    
    $
    333,008
    
    
    $
    Accounts payable:Trade
    
    
    824,979
    
    
    
    794,345Related party
    
    
    88,277
    
    
    
    28,480Current portion of long-term debt
    
    
    2,459,722
    
    
    
    2,729,110Derivative instruments
    
    
    2,587
    
    
    
    Accrued interest
    
    
    22,226
    
    
    
    33,372Accrued wages and benefits
    
    
    107,664
    
    
    
    71,570Accrued payroll taxes
    
    
    3,678
    
    
    
    4,059Accrued expenses  related party
    
    
    103,537
    
    
    
    117,620Other current liabilities
    
    
    46,304
    
    
    
    46,079Total current liabilities
    
    
    3,991,982
    
    
    
    3,824,635LONG-TERM LIABILITIESLong-term debt, less current portion above
    
    
    3,262,222
    
    
    
    6,725,056Total liabilities
    
    
    7,254,204
    
    
    
    10,549,691MEMBERS EQUITYContributed capital
    
    
    23,516,376
    
    
    
    23,516,376Retained earnings
    
    
    5,034,409
    
    
    
    3,412,334Total members equity
    
    
    28,550,785
    
    
    
    26,928,710TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    35,804,989
    
    
    $
    37,478,401
   F-3




---



##### Table of Contents



WESTERN IOWA ENERGY, LLC
 
 STATEMENTS OF OPERATIONS
 Years Ended December 31, 2009, 2008 and 2007
 2009
    
    
    2008
    
    
    2007REVENUESRelated parties
    
    $
    43,123,269
    
    
    $
    69,714,221
    
    
    $
    68,595,272Incentive funds
    
    
    6,986,655
    
    
    
    10,068,612
    
    
    
    10,081,726Total revenues
    
    
    50,109,924
    
    
    
    79,782,833
    
    
    
    78,676,998COST OF SALES
    
    
    46,475,116
    
    
    
    75,431,492
    
    
    
    78,253,820Gross profit
    
    
    3,634,808
    
    
    
    4,351,341
    
    
    
    423,178OPERATING EXPENSESConsulting and professional fees
    
    
    622,584
    
    
    
    289,544
    
    
    
    302,503Office and administrative expenses
    
    
    1,429,456
    
    
    
    1,626,131
    
    
    
    1,448,383Total operating expenses
    
    
    2,052,040
    
    
    
    1,915,675
    
    
    
    1,750,886OTHER INCOME (EXPENSE)Interest income
    
    
    13,746
    
    
    
    9,882
    
    
    
    16,310Interest expense
    
    
    (322,698
    )
    
    
    (759,243
    )
    
    
    (1,400,721
    )Grant income
    
    
    231,525
    
    
    
    
    
    
    
    Patronage dividends
    
    
    116,734
    
    
    
    156,404
    
    
    
    105,866Total other income (expense)
    
    
    39,307
    
    
    
    (592,957
    )
    
    
    (1,278,545
    )NET INCOME (LOSS)
    
    $
    1,622,075
    
    
    $
    1,842,709
    
    
    $
    (2,606,253
    )BASIC AND DILUTED EARNINGS
(LOSS) PER UNIT
    
    $
    61.33
    
    
    $
    69.68
    
    
    $
    (98.55
    )WEIGHTED AVERAGE UNITS OUTSTANDING,
BASIC AND DILUTED
    
    
    26,447
    
    
    
    26,447
    
    
    
    26,447
   F-4




---



##### Table of Contents



WESTERN IOWA ENERGY, LLC
 
 MEMBERS EQUITY
 Years Ended December 31, 2009, 2008 and 2007
 Contributed
    
    
    RetainedUnits
    
    
    Capital
    
    
    Earnings
    
    
    TotalBALANCE, DECEMBER 31, 2006
    
    
    26,447
    
    
    $
    23,516,376
    
    
    $
    6,297,192
    
    
    $
    29,813,568Distributions to members
    
    
    
    
    
    
    
    
    
    
    (2,121,314
    )
    
    
    (2,121,314
    )Net loss for the year ended December 31, 2007
    
    
    
    
    
    
    
    
    
    
    (2,606,253
    )
    
    
    (2,606,253
    )BALANCE, DECEMBER 31, 2007
    
    
    26,447
    
    
    
    23,516,376
    
    
    
    1,569,625
    
    
    
    25,086,001Net income for the year ended December 31, 2008
    
    
    
    
    
    
    
    
    
    
    1,842,709
    
    
    
    1,842,709BALANCE, DECEMBER 31, 2008
    
    
    26,447
    
    
    
    23,516,376
    
    
    
    3,412,334
    
    
    
    26,928,710Net income for the year ended December 31, 2009
    
    
    
    
    
    
    
    
    
    
    1,622,075
    
    
    
    1,622,075BALANCE, DECEMBER 31, 2009
    
    
    26,447
    
    
    $
    23,516,376
    
    
    $
    5,034,409
    
    
    $
    28,550,785
   F-5




---



##### Table of Contents



WESTERN IOWA ENERGY, LLC
 
 STATEMENTS OF CASH FLOWS
 Years Ended December 31, 2009, 2008 and 2007
 2009
    
    
    2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss)
    
    $
    1,622,075
    
    
    $
    1,842,709
    
    
    $
    (2,606,253
    )Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation and amortization
    
    
    2,235,685
    
    
    
    2,208,288
    
    
    
    2,183,988Non cash portion of patronage dividends
    
    
    (26,303
    )
    
    
    (47,085
    )
    
    
    (31,810
    )Non cash forgiveness of debt
    
    
    (100,000
    )
    
    
    
    
    
    
    Effects of changes in operating assets and liabilities:Margin deposits
    
    
    226,850
    
    
    
    1,141,923
    
    
    
    (1,159,958
    )Trade accounts receivable  related party
    
    
    (1,678,155
    )
    
    
    4,387,564
    
    
    
    (1,484,736
    )Other receivables
    
    
    (224,413
    )
    
    
    (157,473
    )
    
    
    (5,997
    )Incentive receivables
    
    
    (2,634,480
    )
    
    
    5,206
    
    
    
    280,653Inventory
    
    
    4,126,929
    
    
    
    4,587,894
    
    
    
    (1,302,168
    )Derivative instruments
    
    
    63,947
    
    
    
    (1,997,735
    )
    
    
    3,204,124Prepaid expenses and other assets
    
    
    (318,414
    )
    
    
    (34,114
    )
    
    
    (155,155
    )Accounts payable
    
    
    90,431
    
    
    
    (2,985,924
    )
    
    
    2,466,093Accrued interest
    
    
    (11,146
    )
    
    
    (67,170
    )
    
    
    (15,422
    )Accrued wages and benefits
    
    
    36,094
    
    
    
    14,881
    
    
    
    10,128Accrued payroll taxes
    
    
    (381
    )
    
    
    804
    
    
    
    (30,264
    )Accrued expenses  related party
    
    
    (14,083
    )
    
    
    117,620
    
    
    
    (379,788
    )Other current liabilities
    
    
    225
    
    
    
    33,215
    
    
    
    Net cash provided by operating activities
    
    
    3,394,861
    
    
    
    9,050,603
    
    
    
    973,435CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment, including
construction in progress
    
    
    (161,747
    )
    
    
    (394,028
    )
    
    
    (1,130,291
    )Sales tax refund received on plant construction costs
    
    
    
    
    
    
    
    
    
    
    443,535Net cash used in investing activities
    
    
    (161,747
    )
    
    
    (394,028
    )
    
    
    (686,756
    )CASH FLOWS FROM FINANCING ACTIVITIESNet increase in checks issued
in excess of bank balance
    
    
    333,008
    
    
    
    
    
    
    
    Net payments (borrowings) on revolving line of credit
    
    
    
    
    
    
    (3,800,000
    )
    
    
    3,800,000Proceeds from long-term debt
    
    
    12,627,000
    
    
    
    8,082,566
    
    
    
    10,109,472Payments on long-term debt
    
    
    (16,259,222
    )
    
    
    (12,904,789
    )
    
    
    (12,071,111
    )Distributions to members
    
    
    
    
    
    
    
    
    
    
    (2,121,314
    )Net cash used in financing activities
    
    
    (3,299,214
    )
    
    
    (8,622,223
    )
    
    
    (282,953
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (66,100
    )
    
    
    34,352
    
    
    
    3,726CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    66,400
    
    
    
    32,048
    
    
    
    28,322CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    300
    
    
    $
    66,400
    
    
    $
    32,048
   F-6




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WESTERN IOWA ENERGY, LLC
 
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates in Preparing Financial Statements
  Basis of Accounting
  Revenue Recognition
   Cash and Cash Equivalents
   Accounts Receivable
   F-7




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##### Table of Contents



WESTERN IOWA ENERGY, LLC
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
  Derivative Instruments and Hedging Activities
 Derivatives and Hedging,
 Inventories
  Property, Plant, and Equipment
   YearsLand improvements
    
    
    20-40Office building
    
    
    5-40Office equipment
    
    
    5-20Plant and process equipment
    
    
    10-40
  Loan Origination Fees
  Other Investments
  Grant Income
   F-8




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##### Table of Contents



WESTERN IOWA ENERGY, LLC
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
 Income Taxes
  Earnings (Loss) Per Unit
  Cost of Sales
  Shipping and Handling Costs
  Environmental Liabilities
  Fair Value of Financial Instruments
  Current assets and current liabilities
 Long-term debt
  F-9




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WESTERN IOWA ENERGY, LLC
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
 New Accounting Standards
 The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles Generally Accepted Accounting Standards,
 , Disclosures about Derivative Instruments and Hedging
Activities Derivatives
and Hedging,
 Interim Disclosures
about Fair Value of Financial Instruments Financial
Instruments,
 Subsequent Events Subsequent Events,
 NOTE 2  INCENTIVE PAYMENTS AND RECEIVABLE
  NOTE 3  INVENTORY
  December 31,
    
    
    December 31,2009
    
    
    2008Raw material
    
    $
    273,791
    
    
    $
    496,028Work in process
    
    
    49,398
    
    
    
    541,530Finished goods
    
    
    60,339
    
    
    
    3,472,899Total
    
    $
    383,528
    
    
    $
    4,510,457
  F-10




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##### Table of Contents



WESTERN IOWA ENERGY, LLC
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
 NOTE 4  LAND OPTION
  NOTE 5  DEBT AND FINANCING
 Long-Term Debt
  December 31,
    
    
    December 31,2009
    
    
    2008Note payable to Farm Credit Services of America and
CoBank under term note agreement  see details
below
    
    $
    2,350,000
    
    
    $
    4,150,000Note payable to Farm Credit Services of America and
CoBank under reducing revolving credit note  see
details below
    
    
    2,630,000
    
    
    
    4,350,000Note payable to the Iowa Department of Economic Development  see details below
    
    
    207,500
    
    
    
    337,500Note payable to Glidden Rural Electric Cooperative  see details below
    
    
    534,444
    
    
    
    616,666Total
    
    
    5,721,944
    
    
    
    9,454,166Less current portion
    
    
    2,459,722
    
    
    
    2,729,110Long-term portion
    
    $
    3,262,222
    
    
    $
    6,725,056
  2010
    
    $
    2,459,7222011
    
    
    112,2222012
    
    
    112,2222013
    
    
    202,2222014
    
    
    2,482,223Thereafter
    
    
    353,333Total
    
    $
    5,721,944
  F-11




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WESTERN IOWA ENERGY, LLC
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
     NOTE 6  MEMBERS EQUITY
    F-12




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##### Table of Contents



WESTERN IOWA ENERGY, LLC
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
 NOTE 7  INCOME TAXES
   NOTE 8  CASH FLOW DISCLOSURES
  2009
    
    
    2008
    
    
    2007Cash paid for interest
    
    $
    333,845
    
    
    $
    826,413
    
    
    $
    1,416,143
 NOTE 9  RELATED PARTY TRANSACTIONS
     NOTE 10  LEASE COMMITMENTS
  2010
    
    $
    35,6272011
    
    
    17,813Total
    
    $
    53,440
   F-13




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##### Table of Contents



WESTERN IOWA ENERGY, LLC
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
 NOTE 11  RETIREMENT AND SAVINGS PLAN
  NOTE 12  FAIR VALUE OF FINANCIAL INSTRUMENTS
 Fair Value Measurements and
Disclosures,
 
    
    Level 1Unadjusted quoted prices for identical assets and liabilities in active
markets;
 
    
    Level 2Quoted prices for similar assets and liabilities in active markets (other
than those included in Level 1) which are observable for the asset or liability, either
directly or indirectly; and
 
    
    Level 3Valuations derived from valuation techniques in which one or more significant
inputs or significant value drivers are unobservable.
  2009SignificantQuoted Prices in
    
    
    Other
    
    
    SignificantCarrying
    
    
    Active Markets for
    
    
    Observable
    
    
    UnobservableAmount on
    
    
    Identical Assets
    
    
    Inputs
    
    
    InputsBalance Sheet
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Financial liabilities:Commodity derivatives
    
    $
    (2,587
    )
    
    $
    (2,587
    )
    
    $
    
    
    
    $
    
 2008SignificantQuoted Prices in
    
    
    Other
    
    
    SignificantCarrying
    
    
    Active Markets for
    
    
    Observable
    
    
    UnobservableAmount on
    
    
    Identical Assets
    
    
    Inputs
    
    
    InputsBalance Sheet
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Financial assets:Commodity derivatives
    
    $
    61,360
    
    
    $
    2,538
    
    
    $
    58,822
    
    
    $
    
   F-14




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##### Table of Contents



WESTERN IOWA ENERGY, LLC
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
 NOTE 13  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 Disclosures about Derivative Instruments and Hedging Activities Derivatives and Hedging Accounting for Derivative
Instruments and Hedging Activities
 Objectives and Strategies for Holding Derivative Instruments
  Commodity Risk Management
  Accounting for Derivative Instruments and Hedging Activities
   Fair Value of Derivative Instruments
 Balance Sheet
    
    
    Asset Derivatives
    
    
    Liability DerivativesClassification
    
    
    December 31, 2009
    
    
    December 31, 2009Derivatives not designated
as hedging:Commodity
contracts  Heat Oil options and swaps
    
    Current liabilities
    
    
    $
    
    
    
    $
    (2,587
    )
  F-15




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WESTERN IOWA ENERGY, LLC
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
  Location of net loss
    
    
    Net income (loss)recognized in
    
    
    recognized in income onDerivatives not designated as
    
    earnings on
    
    
    derivativehedging instruments
    
    derivative activities
    
    
    activitiesCommodity contracts 
Soybean oil futures and
Heat Oil options and swaps
    
    Cost of sales
    
    $
    (1,054,297
    )
 NOTE 14  UNCERTAINTIES
     NOTE 15  GAIN CONTINGENCIES
   F-16




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WESTERN IOWA ENERGY, LLC
 NOTES TO FINANCIAL STATEMENTS
 December 31, 2009 and 2008
 NOTE 16  ASSET PURCHASE AGREEMENT
   NOTE 17  QUARTERLY FINANCIAL DATA
   First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterRevenues
    
    $
    3,966,137
    
    
    $
    10,899,985
    
    
    $
    17,037,884
    
    
    $
    18,134,816Gross profit (loss)
    
    
    (294,631
    )
    
    
    369,129
    
    
    
    1,606,965
    
    
    
    1,882,243Operating income (loss)
    
    
    (754,741
    )
    
    
    (175,824
    )
    
    
    1,065,530
    
    
    
    1,379,701Net income (loss)
    
    
    (629,492
    )
    
    
    (259,934
    )
    
    
    1,119,037
    
    
    
    1,392,464Basic and diluted
earnings (loss) per unit
    
    
    (23.80
    )
    
    
    (9.83
    )
    
    
    42.31
    
    
    
    52.65
  First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterRevenues
    
    $
    18,029,542
    
    
    $
    27,601,282
    
    
    $
    26,238,615
    
    
    $
    7,913,394Gross profit (loss)
    
    
    1,784,314
    
    
    
    2,467,747
    
    
    
    2,093,569
    
    
    
    (1,993,289
    )Operating income (loss)
    
    
    1,246,255
    
    
    
    1,896,946
    
    
    
    1,515,203
    
    
    
    (2,222,738
    )Net income (loss)
    
    
    1,127,993
    
    
    
    1,675,218
    
    
    
    1,377,779
    
    
    
    (2,338,281
    )Basic and diluted
earnings (loss) per unit
    
    
    42.65
    
    
    
    63.34
    
    
    
    52.10
    
    
    
    (88.41
    )
  First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterRevenues
    
    $
    14,254,980
    
    
    $
    24,800,210
    
    
    $
    21,262,859
    
    
    $
    18,358,949Gross profit (loss)
    
    
    566,299
    
    
    
    2,565,826
    
    
    
    (734,715
    )
    
    
    (1,974,232
    )Operating income (loss)
    
    
    128,304
    
    
    
    1,990,272
    
    
    
    (1,099,711
    )
    
    
    (2,346,573
    )Net income (loss)
    
    
    (142,559
    )
    
    
    1,629,537
    
    
    
    (1,436,064
    )
    
    
    (2,657,167
    )Basic and diluted
earnings (loss) per unit
    
    
    (5.39
    )
    
    
    61.62
    
    
    
    (54.30
    )
    
    
    (100.48
    )
  NOTE 18  SUBSEQUENT EVENTS
   F-17




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES.
 Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
  
    
    Pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the Company;
 
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with Generally Accepted Accounting
Principles, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the Company; and
 
    
    Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Companys assets that could have a
material effect on the financial statements.
  Attestation Report of Registered Public Accounting Firm
   49




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Changes in Internal Control Over Financial Reporting
  
 ITEM 9B.
    
    OTHER INFORMATION.
  
 PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE; COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT.
  
 ITEM 11.
    
    EXECUTIVE COMPENSATION.
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED MEMBER
MATTERS.
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES.
   50




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##### Table of Contents



ITEM 15.
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
  Exhibit
    
    
    
    Method ofNo.
    
    Description
    
    Filing3.1
    
    
    Articles of Organization of Western Iowa Energy, LLC.
    
    
    13.2
    
    
    Amended and Restated Operating Agreement of Western Iowa Energy, LLC
    
    
    13.3
    
    
    First Amendment to Amended and Restated Operating Agreement of
Western Iowa Energy, LLC
    
    
    610.1
    
    
    Water Supply and Storage Agreement between the Incorporated City of
Wall Lake, Iowa and Western Iowa Energy, LLC.
    
    
    110.2
    
    
    Master Loan Agreement between Farm Credit Services of America and
Western Iowa Energy, LLC.
    
    
    110.3
    
    
    Construction and Term Loan Supplement between Farm Credit Services
of America and Western Iowa Energy, LLC.
    
    
    110.4
    
    
    Construction and Revolving Term Loan Supplement between Farm Credit
Services of America and Western Iowa Energy, LLC.
    
    
    110.5
    
    
    Administrative Agency Agreement between Farm Credit Services of
America and Western Iowa Energy, LLC.
    
    
    110.6
    
    
    Design/Build Agreement between Renewable Energy Group and Western
Iowa Energy.
    
    
    110.7
    
    
    Management and Operational Services Agreement between West Central
Cooperative and Western Iowa Energy, LLC.
    
    
    110.8
    
    
    Letter from CoBank regarding term extension for the Construction
and Term Loan Supplement (exhibit 10.3) between Farm Credit
Services of America and Western Iowa Energy, LLC.
    
    
    110.9
    
    
    Iowa Department of Economic Development VAAPFAP Loan/Forgivable
Loan Agreement and Promissory Note.
    
    
    110.10
    
    
    Statused Revolving Credit Supplement Agreement between Farm Credit
Services, FLCA and Western Iowa Energy, LLC dated August 3, 2006.
    
    
    210.11
    
    
    Industry Track Agreement between Chicago Central and Pacific
Railroad Company and Western Iowa Energy, LLC dated June 5, 2006.
    
    
    210.12
    
    
    Assignment and Pledge Agreement
    
    
    210.13
    
    
    Letter Agreement between Renewable Energy Group, LLC and Western
Iowa Energy, LC regarding the issuance of 1,000 membership units to
Renewable Energy Group, LLC
    
    
    210.14
    
    
    Rural Development Loan Agreement between Glidden Rural Electric
Cooperative and Western Iowa Energy, LLC.
    
    
    310.15
    
    
    Amendment to Management and Operations Agreement between Renewable
Energy Group, Inc. and Western Iowa Energy, LLC.
    
    
    410.16
    
    
    Amendment to Master Loan Agreement between Farm Credit Services of
America, FLCA and Western Iowa Energy, LLC, dated June 21, 2007.
    
    
    5
  51




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Exhibit
    
    
    
    Method ofNo.
    
    Description
    
    Filing10.17
    
    
    Amendment to Construction and Term Loan Supplement between Farm
Credit Services of America, FLCA and Western Iowa Energy, LLC,
dated June 21, 2007.
    
    
    510.18
    
    
    Statused Revolving Credit Supplement between Farm Credit Services
of America, FLCA and Western Iowa Energy, LLC, dated June 21, 2007.
    
    
    510.19
    
    
    Amendment to Master Loan Agreement between Farm Credit Services of
America and Western Iowa Energy, LLC dated June 5, 2008.
    
    
    710.20
    
    
    Extension and Second Amendment to Management and Operational
Services Agreement between Western Iowa Energy, LLC and Renewable
Energy Group, Inc., dated March 16, 2010.
    
    
    *14.1
    
    
    Code of Ethics
    
    
    431.1
    
    
    Certificate Pursuant to 17 CFR 240 15d-14(a)
    
    
    *31.2
    
    
    Certificate Pursuant to 17 CFR 240 15d-14(a)
    
    
    *32.1
    
    
    Certificate Pursuant to 18 U.S.C. Section 1350
    
    
    *32.2
    
    
    Certificate Pursuant to 18 U.S.C. Section 1350
    
    
    *
 
 (1)
    
    Incorporated by reference as filed on our Registration Statement on Form 10-SB, No.
000-51965, originally filed on May 2, 2006.(2)
    
    Incorporated by reference as filed on our Quarterly Report on Form 10-QSB filed on August 18,
2006.(3)
    
    Incorporated by reference as filed on our Quarterly Report on Form 10-QSB filed on November 14,
2006.(4)
    
    Incorporated by reference as filed on our Annual Report on Form 10-KSB filed on March 9, 2007.(5)
    
    Incorporated by reference as filed on our Quarterly Report on Form 10-QSB filed on August 14,
2007.(6)
    
    Incorporated by reference as filed on our Quarterly Report on Form 10-Q filed on May 15,
2008.(7)
    
    Incorporated by reference as filed on our Form 8-K filed on February 12, 2009.(*)
    
    Filed herewith.  52




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SIGNATURES
  WESTERN IOWA ENERGY, LLCDate: March 31, 2010
    /s/ William J. HoranWilliam J. HoranChairman, President and Director
(Principal Executive Officer)Date:      March 31, 2010
    /s/ Joe NepplJoe NepplChief Financial Officer
(Principal Financial and Accounting Officer)  Date:  March 31, 2010
    /s/ William J. HoranWilliam J. Horan, Chairman, President,Director (Principal Executive Officer)Date:  March 31, 2010
    /s/ Kevin J. RossKevin J. Ross, Secretary and DirectorDate:  March 31, 2010
    /s/ John GeakeJohn Geake, Vice-Chairman and DirectorDate:  March 31, 2010
    /s/ Warren L. BushWarren L. Bush, DirectorDate:  March 31, 2010
    /s/ Wayne SeamanWayne Seaman, DirectorDate:  March 31, 2010
    /s/ Nile RamsbottomNile Ramsbottom, Director  53