LAKE AREA CORN PROCESSORS LLC - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Edgar Glimpses |

We prepared the following discussion and analysis to help you better understand our financial condition, changes in our financial condition, and results of operations for the three and six month periods ended , compared to the same periods of the prior year. This discussion should be read in conjunction with the consolidated financial statements and the Management's Discussion and Analysis section for the fiscal year ended , included in the Company's Annual Report on Form 10-K for 2018.

Disclosure Regarding Forward-Looking Statements

This report contains historical information, as well as forward-looking statements that involve known and unknown risks and relate to future events, our future financial performance, or our expected future operations and actions. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "future," "intend," "could," "hope," "predict," "target," "potential," "continue" or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions based on current information and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the reasons described in this report and our annual report on Form 10-K for the fiscal year ended .

The cautionary statements referred to in this section also should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. We undertake no duty to update these forward-looking statements, even though our situation may change in the future. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we currently expect. We qualify all of our forward-looking statements by these cautionary statements.

Overview

Lake Area Corn Processors, LLC is a South Dakota limited liability company that owns and manages its wholly-owned subsidiary, Dakota Ethanol, LLC. Dakota Ethanol, LLC owns and operates an ethanol plant located near Wentworth, South Dakota that has a nameplate production capacity of 90 million gallons of ethanol per year. Lake Area Corn Processors, LLC is referred to in this report as "LACP," the "company," "we," or "us." Dakota Ethanol, LLC is referred to in this report as "Dakota Ethanol" "we" "us" or the "ethanol plant."

Our revenue is derived from the sale and distribution of our ethanol, distillers grains and corn oil. The ethanol plant recently increased its nameplate capacity from 50 million gallons per year to 90 million gallon per year. Corn is supplied to us primarily from our members who are local agricultural producers and from purchases of corn on the open market. We have engaged Renewable Products Marketing Group, Inc. ("RPMG, Inc.") to market all of the ethanol and corn oil that we produce at the ethanol plant. Further, RPMG, Inc. markets all of the distillers grains that we produce that we do not market internally to local customers.

On , Dakota Ethanol entered into a design-build agreement with Nelson Engineering Co. for the design and construction of a plant expansion to increase the plant's production capacity to approximately 90 million gallons of ethanol per year. The cost of the expansion is expected to be approximately $36 million. The expansion was substantially completed during our second quarter of 2019.

In recent years, the ethanol industry in the United States has increased exports of ethanol and distillers grains. In , the Chinese issued final tariffs on U.S. distillers grains. The Chinese distillers grains anti-dumping tariffs range from 42.2% to 53.7% and the anti-subsidy tariffs range from 11.2% to 12%. In addition, the Chinese government increased its ethanol import tariff from 5% to 30% as of and increased the tariff again in from 30% to 45%. In 2019, the ethanol import tariff was increased to approximately 65%. These tariffs have had a negative impact on market ethanol and distillers grains prices in the United States. Further, on , Brazil imposed a twenty percent import tariff on ethanol imported from the United States. These tariffs negatively impact demand for U.S. ethanol.

In , the European Union's tariff on ethanol produced in the United States was repealed which paves the way for increased ethanol exports to the European Union. However, due to current pricing, management does not believe this will significantly increase demand for United States ethanol.



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Results of Operations

Comparison of the Fiscal Quarters Ended and 2018


The following table shows the results of our operations and the percentage of
revenues, cost of revenues, operating expenses and other items to total revenues
in our consolidated statements of income for the fiscal quarters ended  and 2018:
                                   2019                      2018
Income Statement Data        Amount          %         Amount         %
Revenues                 $ 26,096,989     100.0     $ 20,077,335    100.0

Cost of Revenues           24,798,025      95.0       18,011,878     89.7

Gross Profit                1,298,964       5.0        2,065,457     10.3

Operating Expense             926,379       3.5          992,448      4.9

Income from Operations        372,585       1.4        1,073,009      5.3

Other Income (Expense)       (565,482 )    (2.2 )        393,969      2.0

Net Income (Loss)        $   (192,897 )     (.7 )   $  1,466,978      7.3



Revenues

Revenue from ethanol sales increased by approximately 31% during our second quarter of 2019 compared to the same period of 2018. Revenue from distillers grains sales increased by approximately 18% during our second quarter of 2019 compared to the same period of 2018. Revenue from corn oil sales increased by approximately 90% during our second quarter of 2019 compared to the same period of 2018.

Ethanol

Our ethanol revenue was approximately $4,854,000 greater during our second quarter of 2019 compared to our second quarter of 2018, an increase of approximately 31%. This increase in ethanol revenue was due to an increase in the amount of ethanol we sold due in part to our plant expansion project, partially offset by a lower average price we received for the ethanol we sold during our second quarter of 2019 compared to our second quarter of 2018. We sold approximately 33% more gallons of ethanol during our second quarter of 2019 compared to the same period of 2018, an increase of approximately 3,892,000 gallons. Management anticipates increased ethanol production and sales during the remainder of our 2019 fiscal year due to the completion of our plant expansion project.

The average price we received for our ethanol was lower on a per gallon basis during our second quarter of 2019 compared to our second quarter of 2018, with a decrease of approximately 2%. Management attributes this decrease in ethanol prices with increased market ethanol supplies which were not met by corresponding increases in demand during our second quarter of 2019. The ethanol industry experienced demand destruction domestically as a result of certain small refinery exemptions the EPA allowed during 2018 and 2019. These exemptions reduced the amount of ethanol that was required to be blended during these years under the Renewable Fuels Standard (RFS) which resulted in significantly less ethanol demand. The existence of these exemptions came to light during 2018. During , the EPA approved regulations which allow the use of E15 blends during the entire year which management believes may lead to additional ethanol demand in the future. However, management believes that additional demand from E15 will be less than the demand which was lost due to the small refinery exemptions issued by the EPA in 2018 and 2019.

Distillers Grains

Our total distillers grains revenue was approximately 18% greater during our second quarter of 2019 compared to the same period of 2018, due to increased market modified distillers grains prices due to higher corn prices locally along with decreased dried distillers grains prices due to increase supplies of distillers grains due to our expansion. We sold approximately 25% more total tons of distillers grains during our second quarter of 2019 compared to the same period of 2018 due to increased production at the plant.


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The average price we received for our dried distillers grains was approximately 30% less during our second quarter of 2019 compared to the same period of 2018, a decrease of approximately $48 per ton. Management attributes the decrease in dried distillers grains prices during the second quarter of 2019 with an increase in the availability of distillers grains in our market due to our plant expansion project. The average price we received for our modified/wet distillers grains, on a dry-equivalent basis, was approximately 2% greater for our second quarter of 2019 compared to the same period of 2018, an increase of approximately $3 per ton. Management attributes this increase in modified/wet distillers grains prices with higher corn prices locally which impacts modified distillers grains prices which are primarily used in our local market. Management anticipates that distillers grains prices will remain stable for the near future unless we experience an increase in export demand for distillers grains or domestic ethanol production decreases which could reduce the supply of distillers grains in the market. Management anticipates increased distillers grains production and sales during the remainder of our 2019 fiscal year due to our plant expansion project.

Corn Oil

Our total pounds of corn oil sold increased by approximately 79% during our second quarter of 2019 compared to the same period of 2018, an increase of approximately 1,800,000 pounds, primarily due to increased overall production due to our plant expansion project along with improved corn oil extraction efficiency. Management anticipates increased corn oil production for the remainder of our 2019 fiscal year.

The average price per pound we received for our corn oil was approximately 6% greater for our second quarter of 2019 compared to the same period of 2018. The increase in price is related to increased crude oil prices. Corn oil is frequently used as a raw material in biodiesel production. Management expects corn oil prices to decrease for the rest of our 2019 fiscal year due to uncertainty in the biodiesel industry which is a significant source of corn oil demand.

Cost of Revenues

The primary raw materials we use to produce ethanol and distillers grains are corn and natural gas.

Corn

Our cost of revenues relating to corn was approximately 44% greater for our second quarter of 2019 compared to the same period of 2018 due to increased corn bushels used along with higher market corn costs per bushel during the 2019 period.

We consumed approximately 32% more bushels of corn during our second quarter of 2019 compared to the same period of 2018 due to increased production at the ethanol plant from our plant expansion project. Management anticipates that our corn consumption will increase during our 2019 fiscal year as we anticipate increased ethanol production.

Our average cost per bushel of corn increased by approximately 9% for our second quarter of 2019 compared to our second quarter of 2018. Management attributes the increased corn cost per bushel to unfavorable weather conditions during our 2019 fiscal year which included a significant amount of snow along with wet weather which delayed planting, potentially impacting the amount of corn which will be harvested in 2019. Management anticipates that corn prices will continue to increase though harvest and may increase significantly depending on the size of the corn crop harvested in the fall.

Natural Gas

Our cost of revenues related to natural gas increased by approximately $287,000, an increase of approximately 38%, for our second quarter of 2019 compared to our second quarter of 2018. This increase was due to increased natural gas consumption from our plant expansion project, partially offset by lower natural gas costs per MMBtu due to stable market factors which resulted in lower natural gas prices during our second quarter of 2019 compared to the same period of 2018.

Our average cost per MMBtu of natural gas during our second quarter of 2019 was approximately 6% lower compared to our second quarter of 2018. The volume of natural gas we consumed was approximately 46% greater during our second quarter of 2019 compared to the same period of 2018 due primarily to increased production at the ethanol plant, which was offset by increased operating efficiency. Management anticipates increased natural gas consumption during the remaining quarters of our 2019 fiscal year due to our plant expansion project coming online.






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Operating Expenses

Our operating expenses were lower for our second quarter of 2019 compared to the same period of 2018 due primarily to decreased professional fees and environmental costs offset by increased wages and benefit costs due primarily to our plant expansion.

Other Income and Expense

We had higher interest expense during our second quarter of 2019 compared to the same period of 2018 due to our plant expansion project. We were capitalizing interest in previous periods when our expansion project was under construction. Our earnings from our investments were less during our second quarter of 2019 compared to the same period of 2018 due to decreased profitability in the ethanol industry. Most of our investments are in companies involved in the ethanol industry.

Comparison of the Six Months Ended and 2018


The following table shows the results of our operations and the percentage of
revenues, cost of revenues, operating expenses and other items to total revenues
in our consolidated statements of income for the six months ended 
and 2018:
                                   2019                      2018
Income Statement Data        Amount          %         Amount         %
Revenues                 $ 47,710,287     100.0     $ 39,881,607    100.0

Cost of Revenues           43,961,060      92.1       35,204,029     88.3

Gross Profit                3,749,227       7.9        4,677,578     11.7

Operating Expense           1,935,707       4.1        1,975,691      5.0

Income from Operations      1,813,520       3.8        2,701,887      6.8

Other Income (Expense)       (216,213 )    (0.5 )        641,788      1.6

Net Income               $  1,597,307       3.3     $  3,343,675      8.4



Revenues

Revenue from ethanol sales increased by approximately 18% during the six months ended compared to the same period of 2018. Revenue from distillers grains sales increased by approximately 20% during the six months ended compared to the same period of 2018. Revenue from corn oil sales increased by approximately 66% during the six months ended compared to the same period of 2018.

Ethanol

Our ethanol revenue was approximately $5,638,000 greater during our six months ended compared to the six months ended , an increase of approximately 18%. This increase in ethanol revenue was due primarily to an increase in the volume of ethanol we sold, and a decrease in the average price we received per gallon of ethanol sold during the six months ended compared to the six months ended . We sold approximately 21% more gallons of ethanol during the six months ended compared to the same period of 2018, an increase of approximately 5,054,000 gallons, due to increased production at the plant following completion of our plant expansion project. Management anticipates increased ethanol production and sales during the remainder of our 2019 fiscal year due to our plant expansion project.

The average price we received for our ethanol was approximately $0.04 less per gallon during the six months ended compared to the six months ended , a decrease of approximately 3%. Management attributes this decrease in ethanol prices with greater supply of ethanol in the market which was not met by higher ethanol demand which impacted ethanol prices during the six months ended .





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Distillers Grains

Our total distillers grains revenue was approximately 20% greater during the six months ended compared to the same period of 2018 due to increased total production and increased modified distillers grains prices, partially offset by lower dried distillers grains prices. We sold approximately 14% more total tons of distillers grains during the six months ended compared to the same period of 2018 due to increased overall production at the ethanol plant due to our plant expansion project. Management decides the relative production of dried distillers grains versus modified distillers grains based on market conditions favoring each of these products.

The average price we received for our dried distillers grains was approximately 19% less during the six months ended compared to the same period of 2018, a decrease of approximately $29 per ton. Management attributes the decrease in dried distillers grains prices during the six months ended with lower prices which resulted from increased supply following completion of our plant expansion project. The average price we received for our modified/wet distillers grains, on a dry-equivalent basis, was approximately 9% greater for the six months ended compared to the same period of 2018, an increase of approximately $11 per ton. Management attributes this increase in modified/wet distillers grains prices with a stronger local market due to increases in prices of corn and soybean meal.

Corn Oil

Our total pounds of corn oil sold increased by approximately 53% during the six months ended compared to the same period of 2018, an increase of approximately 2,527,000 pounds, primarily due to increased overall production and improved corn oil extraction efficiency.

The average price per pound we received for our corn oil was approximately 8% greater for the six months ended compared to the same period of 2018. The increase in our average corn oil price is related to higher crude oil prices.


Cost of Revenues

Corn

Our cost of revenues relating to corn was approximately 31% greater for the six months ended compared to the same period of 2018 due to increased corn bushels used due to the plant expansion project along with higher corn costs per bushel during the 2019 period.

Our average cost per bushel of corn increased by approximately 8% for the six months ended compared to the six months ended . We consumed approximately 21% more bushels of corn during the six months ended compared to the same period of 2018. Management anticipates that our corn consumption will be higher during the remaining quarters of our 2019 fiscal year due to expected increases in production from our plant expansion project.

Natural Gas

Our cost of revenues related to natural gas increased by approximately $286,000, an increase of approximately 15%, for the six months ended compared to the six months ended . This increase was due to increased natural gas consumption, partially offset by lower natural gas prices per MMBtu during the six months ended compared to the same period of 2018.

Our average cost per MMBtu of natural gas during the six months ended was approximately 6% less compared to the cost per MMbtu for the six months ended . Management attributes this decrease in our average natural gas costs with generally lower natural gas prices in 2019.

The volume of natural gas we used increased by approximately 22% during the six months ended compared to the same period of 2018 due primarily to increased production due to our plant expansion project. Management anticipates that our natural gas consumption will be higher for the rest of our 2019 fiscal year.

Operating Expenses

Our operating expenses were lower for the six months ended compared to the same period of 2018 due primarily to decreased professional fees and environmental costs offset by increased wage and benefit expenses related to increases in staff from our plant expansion.


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Other Income and Expense

We had less earnings on our investments during the six months ended compared to the same period of 2018 due to decreased profitability in the ethanol industry. We had more interest expense during the six months ended compared to the same period of 2018 because we were capitalizing interest on our expansion project until it was completed during our second quarter of 2019.

Changes in Financial Condition for the Six Months Ended

Current Assets

Our cash on hand at was greater compared to due to timing of the quarter end and larger checks we had outstanding in excess of our bank accounts. We had more accounts receivable at compared to due to the timing of our quarter end and the payments related to the shipments of our products. The value of our inventory was greater at compared to due to increased corn inventory. The asset value of our derivative instruments was greater at compared to due to recent corn price increases which resulted in forward contract gains. We also had more cash held by our commodities broker in our margin account compared to .

Property and Equipment

The value of our property and equipment was higher at compared to as a result of capital expenditures for the plant expansion during our 2019 fiscal year.

Other Assets

The value of our investments was greater at compared to due to additional investment in Ring-neck Energy and Feeds along with fewer cash distributions in excess of earnings from our investments.

Current Liabilities

We had more outstanding checks in excess of bank balances at compared to due to the increased price of corn at . We use our revolving loan to pay any checks which are presented for payment which exceed the cash we have available in our accounts. Our accounts payable was higher at compared to due primarily to increased corn payments at compared to . Our accrued liabilities were greater at compared to due to more accrued interest payable.

Long-Term Liabilities

Our long-term liabilities were greater at compared to due to borrowing related to our plant expansion project.

Liquidity and Capital Resources

Our main sources of liquidity are cash from our continuing operations, distributions we receive from our investments and amounts we have available to draw on our revolving credit facilities. Management does not anticipate that we will need to raise additional debt or equity financing in the next twelve months and management believes that our current sources of liquidity will be sufficient to continue our operations during that time period. We anticipate that any capital expenditures we undertake related to our expansion project will be paid out of cash from operations and existing loans, and will not require any additional debt or equity financing.

Currently, we have two revolving loans which allow us to borrow funds for working capital. These loans are described in greater detail below in the section entitled "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Indebtedness." As of , we had $29,000,000 outstanding and $17,099,000 available to be drawn on our revolving loans, after taking into account the borrowing base calculation. Management anticipates that this is sufficient to maintain our liquidity and continue our operations.



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The following table shows cash flows for the six months ended and 2018:

                                                         Six Months Ended              2018

Net cash (used in) provided by operating activities $ (768,127 ) $ 3,381,595 Net cash (used in) investing activities

                  (8,268,017 )    (6,499,366 )

Net cash provided by (used in) financing activities 13,529,846 (1,910,250 )

Cash Flow From Operations. Our operating activities provided less cash during the six months ended compared to the same period of 2018, due primarily to reduced net income during the 2019 period along with an increase in accounts receivable and inventory which reduced cash.

Cash Flow From Investing Activities. Our investing activities used more cash during the six months ended compared to the same period of 2018, due to our plant expansion project along with an additional investment we purchased in Ring-neck Energy & Feed, LLC.

Cash Flow From Financing Activities. Our financing activities provided more cash during the six months ended compared to the same period of 2018, due primarily to increased cash we received from our debt instruments to fund our plant expansion project partially offset by increased payments on our outstanding debt instruments.

Indebtedness

We entered into a comprehensive credit facility with Farm Credit Services of America, PCA and Farm Credit Services of America, FLCA (collectively "FCSA"). We have a $10 million revolving operating line of credit (the "Operating Line") and a $40 million reducing revolving loan (the "Reducing Revolving Loan"). All of our assets, including the ethanol plant and equipment, its accounts receivable and inventory, serve as collateral for our loans with FCSA.

On , we executed an amendment to our credit agreement to create a new $8 million term loan which we used to finance a portion of our investment in Ring-neck Energy & Feed, LLC.

On , we executed an Amended and Restated Credit Agreement (the "Amended and Restated Credit Agreement") with FCSA. Pursuant to the Amended and Restated Credit Agreement, we increased our total credit availability to $40 million to support our expansion project. Further, the maturity date of this increased credit availability under our Amended and Restated Credit Agreement was extended to . Until , interest will accrue pursuant to the Amended and Restated Credit Agreement on our increased credit availability at the one month London Interbank Offered Rate ("LIBOR") plus 3.25% per year. We agreed to pay a fee of 0.50% on the unused portion of the increased credit availability.

Operating Line

On , Dakota Ethanol executed a revolving promissory note from Farm Credit Services of America (FCSA) in the amount up to $10,000,000 or the amount available in accordance with the borrowing base calculation, whichever is less. Interest on the outstanding principal balance will accrue at 300 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.45% at . There is a non-use fee of 0.25% on the unused portion of the $10,000,000 availability. The note is collateralized by substantially all assets of the Company. The note expires on . On , Dakota Ethanol had $0 outstanding and $6,099,000 available to be drawn on the revolving promissory note under the borrowing base.

Reducing Revolving Loan

On , Dakota Ethanol executed a reducing revolving promissory note from FCSA in the amount up to $40,000,000 or the amount available in accordance with the borrowing availability under the credit agreement. The amount Dakota Ethanol can borrow on the note decreases by $1,750,000 semi-annually starting on until the maximum balance reaches $26,000,000 on . The note matures on . Interest on the outstanding principal balance will accrue at 325 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.70% at . The note contains a non-use fee of 0.50% on the unused portion of the note. On , Dakota Ethanol had $29,000,000 outstanding and $11,000,000 available to be drawn on the note.




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2017 Term Loan

On , Dakota Ethanol executed a term note with FCSA in the amount of $8 million. Dakota Ethanol agreed to make monthly interest payments starting and annual principal payments of $1,000,000 starting on . The notes matures on . Interest on the outstanding principal balance will accrue at 325 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.70% at . On , Dakota Ethanol had $7,000,000 outstanding on the note.

Covenants

Our credit facilities with FCSA are subject to various loan covenants. If we fail to comply with these loan covenants, FCSA can declare us to be in default of our loans. The material loan covenants applicable to our credit facilities are our working capital covenant, local net worth covenant and our debt service coverage ratio. We are required to maintain working capital (current assets minus current liabilities plus availability on our revolving loan) of at least $13.5 million. We are required to maintain local net worth (total assets minus total liabilities minus the value of certain investments) of at least $28 million. We are required to maintain a debt service coverage ratio of at least 1.25:1.00.

As of , we were in compliance with all of our loan covenants. Management's current financial projections indicate that we will be in compliance with our financial covenants for the next 12 months and we expect to remain in compliance thereafter. Management does not believe that it is reasonably likely that we will fall out of compliance with our material loan covenants in the next 12 months. If we fail to comply with the terms of our credit agreements with FCSA, and FCSA refuses to waive the non-compliance, FCSA may require us to immediately repay all amounts outstanding on our loans.

Application of Critical Accounting Policies

Management uses estimates and assumptions in preparing our consolidated financial statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Of the significant accounting policies described in the notes to our consolidated financial statements, we believe that the following are the most critical:

Derivative Instruments

We enter into short-term forward grain, option and futures contracts as a means of securing corn for the ethanol plant and managing exposure to changes in commodity prices. We enter into short-term forward, option and futures contracts for sales of ethanol to manage exposure to changes in commodity prices. All of our derivatives are designated as non-hedge derivatives, and accordingly are recorded at fair value with changes in fair value recognized in net income. Although the contracts are considered economic hedges of specified risks, they are not designated as nor accounted for as hedging instruments.

As part of our trading activity, we use futures and option contracts offered through regulated commodity exchanges to reduce our risk and we are exposed to risk of loss in the market value of inventories. To reduce that risk, we generally take positions using cash and futures contracts and options.

Unrealized gains and losses related to derivative contracts for corn purchases are included as a component of cost of revenues and derivative contracts related to ethanol sales are included as a component of revenues in the accompanying financial statements. The fair values of derivative contracts are presented on the accompanying balance sheets as derivative financial instruments.

Goodwill

Annually, as well as when an event triggering impairment may have occurred, the Company performs an impairment test on goodwill. The Company performs a quantitative analysis that tests for impairment. The second step, if necessary, measures the impairment. The Company performs the annual analysis on of each fiscal year.

Inventory Valuation

Inventories are generally valued using methods which approximate the lower of cost (first-in, first-out) or net realizable value. In the valuation of inventories and purchase commitments, net realizable value is based on estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation.



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Revenue Recognition

The Company generally recognizes revenue at a point in time when performance obligations are satisfied. Revenue from the production of ethanol and related products is recorded when control transfers to customers. Generally, ethanol and related products are shipped FOB shipping point, based on written contract terms between Dakota Ethanol and its customers. Collectability of revenue is reasonably assured based on historical evidence of collectability between Dakota Ethanol and its customers. Interest income is recognized as earned.

Shipping costs incurred by the Company in the sale of ethanol, dried distillers grains and corn oil are not specifically identifiable and as a result, revenue from the sale of those products is recorded based on the net selling price reported to the Company from the marketer.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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