Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|
x
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended May 31, 2013
Commission file number: 33-83868
AMERICAN CRYSTAL SUGAR COMPANY
(Exact name of registrant as specified in its charter)
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Minnesota
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84-0004720
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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101 North Third Street
Moorhead, Minnesota 56560
(Address of principal executive offices)
Telephone Number (218) 236-4400
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. YES
x
NO
o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES
x
NO
o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
x
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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|
|
Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Act). YES
o
NO
x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
|
|
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Outstanding at
|
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Class of Common Stock
|
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July 9, 2013
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$10 Par Value
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2,757
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Table of Contents
American Crystal Sugar Company
Consolidated Balance Sheets
(Unaudited)
(In Thousands)
Assets
|
|
|
May 31
|
|
August 31
|
|
|
|
|
2013
|
|
2012
|
|
2012*
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
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Cash and Cash Equivalents
|
|
$
|
124
|
|
$
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120
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|
$
|
123
|
|
|
Receivables:
|
|
|
|
|
|
|
|
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Trade
|
|
71,644
|
|
70,770
|
|
72,314
|
|
|
Members
|
|
4,801
|
|
4,828
|
|
4,817
|
|
|
Other
|
|
775
|
|
1,332
|
|
5,938
|
|
|
Advances to Related Parties
|
|
36,922
|
|
26,488
|
|
34,619
|
|
|
Inventories
|
|
599,244
|
|
485,090
|
|
272,686
|
|
|
Prepaid Expenses
|
|
1,806
|
|
1,624
|
|
904
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Assets
|
|
715,316
|
|
590,252
|
|
391,401
|
|
|
|
|
|
|
|
|
|
|
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Property and Equipment:
|
|
|
|
|
|
|
|
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Land and Land Improvements
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|
88,826
|
|
84,054
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|
88,186
|
|
|
Buildings
|
|
137,562
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|
135,987
|
|
137,156
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|
|
Equipment
|
|
1,037,026
|
|
999,006
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|
1,023,625
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|
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Construction in Progress
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|
26,773
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|
14,041
|
|
9,353
|
|
|
Less Accumulated Depreciation
|
|
(890,632
|
)
|
(854,471
|
)
|
(852,369
|
)
|
|
|
|
|
|
|
|
|
|
|
Net Property and Equipment
|
|
399,555
|
|
378,617
|
|
405,951
|
|
|
|
|
|
|
|
|
|
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Net Property and Equipment Held for Lease
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|
76,856
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86,173
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84,095
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|
|
|
|
|
|
|
|
|
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Other Assets:
|
|
|
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Investments in CoBank, ACB
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4,974
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6,131
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6,131
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|
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Investments in Marketing Cooperatives
|
|
82
|
|
1,326
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|
82
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Other Assets
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11,994
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11,951
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11,820
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|
|
|
|
|
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|
|
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Total Other Assets
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17,050
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19,408
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18,033
|
|
|
|
|
|
|
|
|
|
|
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Total Assets
|
|
$
|
1,208,777
|
|
$
|
1,074,450
|
|
$
|
899,480
|
|
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
* Derived from audited financial statements
1
Table of Contents
American Crystal Sugar Company
Consolidated Balance Sheets
(Unaudited)
(In Thousands)
Liabilities and Members’ Investments
|
|
|
May 31
|
|
August 31
|
|
|
|
|
2013
|
|
2012
|
|
2012*
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Short-Term Debt
|
|
$
|
297,261
|
|
$
|
297,007
|
|
$
|
110,640
|
|
|
Current Maturities of Long-Term Debt
|
|
300
|
|
280
|
|
280
|
|
|
Accounts Payable
|
|
28,371
|
|
29,813
|
|
54,911
|
|
|
Advances Due to Related Parties
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|
3,612
|
|
2,127
|
|
5,307
|
|
|
Accrued Continuing Costs
|
|
128,784
|
|
69,609
|
|
—
|
|
|
Other Current Liabilities
|
|
44,277
|
|
42,952
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|
50,055
|
|
|
Amounts Due Growers
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153,837
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|
83,507
|
|
99,359
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
656,442
|
|
525,295
|
|
320,552
|
|
|
|
|
|
|
|
|
|
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Long-Term Debt, Net of Current Maturities
|
|
128,060
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|
128,360
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|
128,360
|
|
|
|
|
|
|
|
|
|
|
|
Accrued Employee Benefits
|
|
88,041
|
|
56,112
|
|
94,653
|
|
|
|
|
|
|
|
|
|
|
|
Advances Due to Related Parties
|
|
4,378
|
|
—
|
|
5,033
|
|
|
|
|
|
|
|
|
|
|
|
Other Liabilities
|
|
6,870
|
|
11,731
|
|
10,692
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
883,791
|
|
721,498
|
|
559,290
|
|
|
|
|
|
|
|
|
|
|
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Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members’ Investments:
|
|
|
|
|
|
|
|
|
Preferred Stock, Shares Outstanding: 498,570; 498,570 and 498,570
|
|
38,275
|
|
38,275
|
|
38,275
|
|
|
Common Stock, Shares Outstanding: 2,760; 2,760 and 2,764
|
|
28
|
|
28
|
|
28
|
|
|
Additional Paid-In Capital
|
|
152,261
|
|
152,261
|
|
152,261
|
|
|
Unit Retains
|
|
189,832
|
|
188,806
|
|
216,035
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
(100,328
|
)
|
(67,188
|
)
|
(108,970
|
)
|
|
Retained Earnings (Accumulated Deficit)
|
|
7,223
|
|
(1,590
|
)
|
1,180
|
|
|
|
|
|
|
|
|
|
|
|
Total American Crystal Sugar Company Members’ Investments
|
|
287,291
|
|
310,592
|
|
298,809
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling Interests
|
|
37,695
|
|
42,360
|
|
41,381
|
|
|
|
|
|
|
|
|
|
|
|
Total Members’ Investments
|
|
324,986
|
|
352,952
|
|
340,190
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Members’ Investments
|
|
$
|
1,208,777
|
|
$
|
1,074,450
|
|
$
|
899,480
|
|
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
* Derived from audited financial statements
2
Table of Contents
American Crystal Sugar Company
Consolidated Statements of Operations
(Unaudited)
(In Thousands)
|
|
|
For the Nine Months Ended
|
|
For the Three Months Ended
|
|
|
|
|
May 31
|
|
May 31
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
Net Revenue
|
|
$
|
1,207,488
|
|
$
|
1,079,784
|
|
$
|
403,145
|
|
$
|
372,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales
|
|
77,841
|
|
227,608
|
|
43,308
|
|
158,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Proceeds
|
|
1,129,647
|
|
852,176
|
|
359,837
|
|
213,549
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses
|
|
219,249
|
|
217,674
|
|
70,844
|
|
75,148
|
|
|
Accrued Continuing Costs
|
|
128,784
|
|
69,609
|
|
33,968
|
|
(15,660
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Proceeds
|
|
781,614
|
|
564,893
|
|
255,025
|
|
154,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
Interest Income
|
|
58
|
|
21
|
|
11
|
|
2
|
|
|
Interest Expense, Net
|
|
(6,365
|
)
|
(5,868
|
)
|
(2,243
|
)
|
(1,987
|
)
|
|
Other, Net
|
|
(394
|
)
|
(182
|
)
|
21
|
|
(248
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Expense)
|
|
(6,701
|
)
|
(6,029
|
)
|
(2,211
|
)
|
(2,233
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds Before Income Tax Expense
|
|
774,913
|
|
558,864
|
|
252,814
|
|
151,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
(4,199
|
)
|
(5,646
|
)
|
(613
|
)
|
(663
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Proceeds
|
|
770,714
|
|
553,218
|
|
252,201
|
|
151,165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net Proceeds Attributable to Noncontrolling Interests
|
|
(4,467
|
)
|
(4,756
|
)
|
(1,434
|
)
|
(1,680
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Proceeds Attributable to American Crystal Sugar Company
|
|
$
|
766,247
|
|
$
|
548,462
|
|
$
|
250,767
|
|
$
|
149,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions of Net Proceeds Attributable to American Crystal Sugar Company:
|
|
|
|
|
|
|
|
|
|
|
Credited (Charged) to American Crystal Sugar Company’s Members’ Investments:
|
|
|
|
|
|
|
|
|
|
|
Non-Member Business Income
|
|
$
|
6,043
|
|
$
|
8,125
|
|
$
|
883
|
|
$
|
954
|
|
|
Unit Retains Declared to Members
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Net Credit to American Crystal Sugar Company’s Members’ Investments
|
|
6,043
|
|
8,125
|
|
883
|
|
954
|
|
|
Payments To/Due Members for Sugarbeets, Net of Unit Retains Declared
|
|
760,204
|
|
540,337
|
|
249,884
|
|
148,531
|
|
|
Total
|
|
$
|
766,247
|
|
$
|
548,462
|
|
$
|
250,767
|
|
$
|
149,485
|
|
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
3
Table of Contents
American Crystal Sugar Company
Consolidated Statements of Comprehensive Income
(Unaudited)
(In Thousands)
|
|
|
For the Nine Months Ended
|
|
For the Three Months Ended
|
|
|
|
|
May 31
|
|
May 31
|
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
Non-Member Business Income
|
|
$
|
6,043
|
|
$
|
8,125
|
|
$
|
883
|
|
$
|
954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension & Post-Retirement Adjustment
|
|
7,422
|
|
4,817
|
|
2,474
|
|
1,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OCI of Equity Method Investees
|
|
654
|
|
247
|
|
217
|
|
82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Forward Contract Adjustment
|
|
(32
|
)
|
(79
|
)
|
(41
|
)
|
(89
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Interest Rate Contract Adjustment
|
|
598
|
|
(270
|
)
|
273
|
|
(119
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Comprehensive Income
|
|
$
|
14,685
|
|
$
|
12,840
|
|
$
|
3,806
|
|
$
|
2,434
|
|
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
4
Table of Contents
American Crystal Sugar Company
Consolidated Statements of Cash Flows
(Unaudited)
(In Thousands)
|
|
|
For the Nine Months Ended
|
|
|
|
|
May 31
|
|
|
|
|
2013
|
|
2012
|
|
|
Cash Provided By (Used In) Operating Activities:
|
|
|
|
|
|
|
Net Proceeds Attributable to American Crystal Sugar Company
|
|
$
|
766,247
|
|
$
|
548,462
|
|
|
Payments To/Due Members for Sugarbeets, Net of Unit Retains Declared
|
|
(760,204
|
)
|
(540,337
|
)
|
|
Add (Deduct) Non-Cash Items:
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
49,280
|
|
49,412
|
|
|
Income from Equity Method Investees
|
|
—
|
|
(82
|
)
|
|
Loss on the Disposition of Property and Equipment
|
|
475
|
|
299
|
|
|
Non-Cash Portion of Patronage Dividend from CoBank, ACB
|
|
—
|
|
(49
|
)
|
|
Deferred Gain Recognition
|
|
(47
|
)
|
(47
|
)
|
|
Noncontrolling Interests
|
|
4,467
|
|
4,756
|
|
|
Changes in Assets and Liabilities:
|
|
|
|
|
|
|
Receivables
|
|
5,849
|
|
12,135
|
|
|
Inventories
|
|
(326,558
|
)
|
(241,052
|
)
|
|
Prepaid Expenses
|
|
(902
|
)
|
(889
|
)
|
|
Advances To/Due to Related Parties
|
|
(3,998
|
)
|
2,992
|
|
|
Accounts Payable
|
|
(20,216
|
)
|
1,058
|
|
|
Accrued Continuing Costs
|
|
128,784
|
|
69,609
|
|
|
Other Liabilities
|
|
(8,176
|
)
|
(1,334
|
)
|
|
Amounts Due Growers
|
|
54,478
|
|
(77,379
|
)
|
|
Net Cash Used In Operating Activities
|
|
(110,521
|
)
|
(172,446
|
)
|
|
|
|
|
|
|
|
|
Cash Provided By (Used In) Investing Activities:
|
|
|
|
|
|
|
Purchases of Property and Equipment
|
|
(40,326
|
)
|
(25,392
|
)
|
|
Purchases of Property and Equipment Held for Lease
|
|
(1,534
|
)
|
(2,154
|
)
|
|
Proceeds from the Sale of Property and Equipment
|
|
10
|
|
1
|
|
|
Equity Refund from CoBank, ACB
|
|
1,157
|
|
1,266
|
|
|
Changes in Other Assets
|
|
(770
|
)
|
(184
|
)
|
|
Net Cash Used In Investing Activities
|
|
(41,463
|
)
|
(26,463
|
)
|
|
|
|
|
|
|
|
|
Cash Provided By (Used In) Financing Activities:
|
|
|
|
|
|
|
Net Proceeds from Short-Term Debt
|
|
186,621
|
|
230,810
|
|
|
Long-Term Debt Repayment
|
|
(280
|
)
|
(5,765
|
)
|
|
Payment of Unit Retains
|
|
(26,203
|
)
|
(18,793
|
)
|
|
Distributions to Noncontrolling Interests
|
|
(8,153
|
)
|
(7,350
|
)
|
|
Net Cash Provided By Financing Activities
|
|
151,985
|
|
198,902
|
|
|
Increase (Decrease) In Cash and Cash Equivalents
|
|
1
|
|
(7
|
)
|
|
Cash and Cash Equivalents, Beginning of Year
|
|
123
|
|
127
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End of Period
|
|
$
|
124
|
|
$
|
120
|
|
Non-Cash Investing Activities:
Purchases of Property and Equipment include the changes in accounts
payable related to these purchases of ($6,324,000) and ($4,886,000) for the nine months ended May 31, 2013 and 2012, respectively.
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
5
Table of Contents
AMERICAN CRYSTAL SUGAR COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS AND THREE MONTHS ENDED
May 31, 2013 and 2012
(Unaudited)
Note 1: Basis of Presentation
The unaudited consolidated financial statements of American Crystal Sugar Company (Company) contained herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America. However, in the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2012.
The Company’s consolidated financial statements are comprised of: American Crystal Sugar Company; its wholly-owned subsidiaries Sidney Sugars Incorporated (Sidney Sugars) and Crab Creek Sugar Company (Crab Creek); and ProGold Limited Liability Company (ProGold), a limited liability company in which the Company holds a 51 percent ownership interest. All material inter-company transactions have been eliminated.
Certain reclassifications have been made to the May 31, 2012 consolidated financial statements to conform with the May 31, 2013 presentation. These reclassifications had no effect on previously reported results of operations or Members’ Investments.
The operating results for the nine months ended May 31, 2013 are not necessarily indicative of the results that may be expected for the year ended August 31, 2013. The amount paid to shareholders for sugarbeets (member beet payment) depends on the future selling prices of sugar and agri-products as well as processing and other costs incurred during the remainder of the fiscal year associated with the 2012 Red River Valley sugarbeet crop (RRV crop). The amount paid to non-member growers for sugarbeets (non-member beet payment) depends on the future selling prices of sugar and the related selling expenses associated with the 2012 Sidney Sugars sugarbeet crop (Sidney crop). For the purposes of this report, the amount of the beet payments, future revenues and costs have been estimated. Therefore, adjustments with respect to these estimates may be necessary in the future, as additional information becomes available.
Note 2: Recently Issued Accounting Pronouncements
In December 2011, the FASB issued an update to the authoritative guidance which requires disclosure information about offsetting and related arrangements for financial instruments and derivative instruments. The guidance provided by this update becomes effective for the Company in the first quarter of fiscal 2014. The Company does not expect that the adoption of this guidance will have a material effect on the Company’s financial statements.
In February 2013, the FASB issued an update to the authoritative guidance which requires disclosure information about the amounts reclassified out of accumulated other comprehensive income. The guidance provided by this update becomes effective for the Company in the first quarter of fiscal 2014. The Company does not expect that the adoption of this guidance will have a material effect on the Company’s financial statements.
In February 2013, the FASB issued an update to the authoritative guidance which requires the Company to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The guidance also requires the Company to disclose the nature and amount of the obligation. The guidance provided by this update becomes effective
6
Table of Contents
for the Company in the first quarter of fiscal 2015. The Company does not expect that the adoption of this guidance will have a material effect on the Company’s financial statements.
Note 3: Accounts Receivable and Credit Policies
The Company grants credit, individually and through its marketing cooperatives, to its customers, which are primarily companies in the food processing industry located throughout the United States.
Trade receivables are uncollateralized customer obligations due under normal trade terms requiring payment within 15 to 90 days from the invoice date. The receivables are non-interest bearing. Trade receivables are stated at the amount billed to the customer. Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices.
Ongoing credit evaluations of customers’ financial condition are performed and the Company maintains a reserve for potential credit losses. The carrying amount of trade receivables is reduced by a valuation allowance that reflects the Company’s best estimate of the amounts that will not be collected. The Company determines a receivable to be uncollectable and is written off against the reserve based on several criteria including such items as the credit evaluation of a customer’s financial condition, the aging of the receivable and previous unsuccessful collection efforts.
Note 4: Inventories
The major components of inventories are as follows:
|
|
|
May 31
|
|
August 31
|
|
|
(In Thousands)
|
|
2013
|
|
2012
|
|
2012
|
|
|
Sugar, Agri-Products, and Sugarbeet Seed
|
|
$
|
536,145
|
|
$
|
425,189
|
|
$
|
193,352
|
|
|
Unprocessed Sugarbeets
|
|
4,571
|
|
—
|
|
11,575
|
|
|
Operating Supplies and Maintenance Parts
|
|
58,528
|
|
59,901
|
|
67,759
|
|
|
|
|
|
|
|
|
|
|
|
Total Inventories
|
|
$
|
599,244
|
|
$
|
485,090
|
|
$
|
272,686
|
|
Sugar and agri-products inventories are valued at estimated net realizable value. Unprocessed sugarbeets are valued at the estimated gross beet payment. Operating supplies, maintenance parts and sugarbeet seed inventories are valued at the lower of average cost or market.
The Company’s reserve for inventory obsolescence was $17.6 million, $15.2 million and $16.9 million as of May 31, 2013, May 31, 2012 and August 31, 2012, respectively.
Note 5: Short-Term Debt
The Company had a seasonal line of credit through May 31, 2013 with a consortium of lenders led by CoBank, ACB of $410.0 million along with an additional $50.0 million which can be utilized for either short-term or long-term borrowing purposes. On June 1, 2013, the seasonal line of credit is reduced to $350.0 million through July 19, 2015. The availability of the additional $50.0 million which can be utilized for either short-term or long-term borrowing purposes remains unchanged during this time. The Company also has a line of credit with Wells Fargo Bank for $1.0 million. The Company’s commercial paper program provides short-term borrowings up to the amount of the CoBank, ACB seasonal line of credit. Any borrowings under the commercial paper program along with outstanding short-term letters of credit will act to reduce the available credit under the CoBank, ACB seasonal line of credit by a commensurate amount.
The Company can also utilize the Commodity Credit Corporation (CCC) to meet its short-term borrowing needs. The Company can borrow funds on a non-recourse basis from the CCC, with repayment of such funds secured by sugar. The limitations on such borrowings are based on the amount of the Company’s sugar inventory and certain loan covenant restrictions by CoBank, ACB. As of May
7
Table of Contents
31, 2013, the Company had the capacity to obtain additional non-recourse loans from the CCC of approximately $217.8 million.
As of May 31, 2013, the Company had outstanding commercial paper of $261.4 million at interest rates of .36% to .44% and maturity dates between June 1, 2013 and July 8, 2013. In addition, the Company had outstanding non-recourse loans with the CCC as of May 31, 2013 of $35.9 million, against which 1.5 million hundredweight of sugar was pledged as collateral. The CCC loans carried an interest rate of 1.125 % and a maturity date of September 30, 2013. The Company had no outstanding short-term debt with CoBank, ACB or Wells Fargo Bank as of May 31, 2013. The Company had $3.2 million of short-term letters of credit outstanding and $3.1 million of the $50.0 million additional line of credit was utilized for long-term borrowing purposes as of May 31, 2013. The unused line of credit as of May 31, 2013 was $193.3 million which includes $46.9 million that can also be utilized for long-term borrowing purposes.
As of May 31, 2012, the Company had outstanding commercial paper of $297.0 million at interest rates of .42% to .55% and maturity dates between June 1, 2012 and July 13, 2012. The Company had no outstanding short-term debt with CoBank, ACB, Wells Fargo Bank or the CCC as of May 31, 2012. The Company had $3.3 million of short-term letters of credit outstanding and $3.1 million of the $50.0 million additional line of credit was utilized for long-term borrowing purposes as of May 31, 2012. The unused line of credit as of May 31, 2012 was $97.6 million which included $46.9 million that could also be utilized for long-term borrowing purposes.
Note 6: Long-Term Debt
The Company has a long-term debt line of credit through July 30, 2015 with CoBank, ACB of $60.8 million along with an additional $50.0 million, as mentioned in Note 5 above, which can be utilized for either short-term or long-term borrowing purposes. As of May 31, 2013, there was no outstanding balance with CoBank, ACB but the Company had $63.9 million in long-term letters of credit. The unused long-term line of credit as of May 31, 2013 was $46.9 million which can also be utilized for short-term borrowing purposes. In addition, the Company had long-term debt outstanding as of May 31, 2013 of $50 million from a private placement of Senior Notes that occurred in September 1998 and $78.4 million from four separate issuances of Pollution Control and Industrial Development Revenue Bonds.
As of May 31, 2012, there was no outstanding balance with CoBank, ACB but the Company had $63.9 million in long-term letters of credit outstanding. The unused long-term line of credit as of May 31, 2012 was $46.9 million which could also be utilized for short-term borrowing purposes. In addition, the Company had long-term debt outstanding as of May 31, 2012 of $50 million from a private placement of Senior Notes that occurred in September 1998 and $78.6 million from four separate issuances of Pollution Control and Industrial Development Revenue Bonds.
Note 7: Interest Paid and Interest Capitalized
Interest paid, net of amounts capitalized, was $7.7 million and $7.2 million for the nine months ended May 31, 2013 and 2012, respectively and $3.3 million and $3.2 million for the three months ended May, 2013 and 2012, respectively. Interest capitalized was $80,000 and $50,000 for the nine months ended May 31, 2013 and 2012, respectively and $54,000 and $30,000 for the three months ended May 31, 2013 and 2012, respectively.
Note 8: Derivative Instruments and Hedging Activities
The Company, as a result of its operating and financing activities, is exposed to changes in foreign currency exchange rates and interest rates which may adversely affect its results of operations and financial position. In seeking to minimize the risks and/or costs associated with such activities, the Company may enter into derivative contracts.
8
Table of Contents
The Company manages its foreign currency related risks primarily through the use of foreign currency forward contracts. The contracts held by the Company are denominated in Euros. The Company has entered into foreign currency forward contracts that are designated as cash flow hedges of exchange rate risk related to foreign currency-denominated purchases of equipment. Inputs used to measure the fair value of the foreign currency forward contracts are contained within level 1 of the fair value hierarchy. At May 31, 2013, the Company had cash flow hedges for approximately 2.8 million Euros with maturity dates of June 28, 2013 to December 8, 2014. At May 31, 2013, the fair value of the open contracts reflected a loss of approximately $52,000 recorded in accumulated other comprehensive income/(loss) in members’ equity. At May 31, 2012, the Company had cash flow hedges for approximately 850,000 Euros with maturity dates of June 1, 2012 to December 31, 2012. At May 31, 2012, the fair value of the open contracts reflected a loss of approximately $75,000 recorded in accumulated other comprehensive income/(loss) in members’ equity. At August 31, 2012, the Company had cash flow hedges for approximately 341,000 Euros with maturity dates of September 14, 2012 to December 31, 2012. At August 31, 2012, the fair value of the open contracts reflected a loss of approximately $20,000 recorded in accumulated other comprehensive income/(loss) in members’ equity. Amounts deferred to accumulated other comprehensive income/(loss) are reclassified into the cost of the equipment when the actual purchase takes place.
The Company is exposed to interest risk primarily through its borrowing activities. On December 24, 2009, the Company entered into an interest rate swap contract associated with a $27.3 million Industrial Development Revenue Bond issue that matures on September 1, 2019. The interest rate swap contract requires payment of a fixed interest rate of 2.827 % and the receipt of a variable rate of interest based on the Securities Industry and Financial Market Association (SIFMA) index of .154 % as of May 31, 2013 on $27.3 million of indebtedness. The Company has designated this interest rate swap contract as a cash flow hedge. Inputs used to measure the fair value of the interest rate swap contracts are contained within level 2 of the fair value hierarchy. As of May 31, 2013, the fair value of the cash flow hedge reflected a loss of approximately $2.2 million recorded in accumulated other comprehensive income/(loss) and will be reclassified to interest expense over the life of the swap contract. No ineffectiveness was recognized in earnings during the quarter ended May 31, 2013. The current period loss of $170,000 is classified as interest expense on the statements of operations. As of May 31, 2013, $709,000 of deferred net losses on the interest rate swap contract contained in accumulated other comprehensive income/(loss) are expected to be reclassified to earnings during the next 12 months. As of May 31, 2012 and August 31, 2012, the fair value of the cash flow hedge reflected a loss of approximately $2.6 million and $2.8 million, respectively recorded in accumulated other comprehensive income/(loss).
Fair Value of Liability Derivatives
|
|
|
|
|
May 31
|
|
August 31
|
|
|
(In Thousands)
|
|
Balance Sheet Location
|
|
2013
|
|
2012
|
|
2012
|
|
|
Derivatives Designated as Hedging Instruments:
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Forward Contracts
|
|
Other Current Liabilities
|
|
$
|
45
|
|
$
|
75
|
|
$
|
20
|
|
|
Interest Rate Contracts
|
|
Other Current Liabilities
|
|
709
|
|
685
|
|
707
|
|
|
Foreign Currency Forward Contracts
|
|
Other Long-Term Liabilities
|
|
7
|
|
—
|
|
—
|
|
|
Interest Rate Contracts
|
|
Other Long-Term Liabilities
|
|
1,519
|
|
1,923
|
|
2,119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liability Derivatives
|
|
|
|
$
|
2,280
|
|
$
|
2,683
|
|
$
|
2,846
|
|
Note 9: Accrued Continuing Costs
For interim reporting, the net proceeds from member business is based on the estimated gross beet payment and the percentage of the tons of sugarbeets processed to the total estimated tons of sugarbeets to be processed for a given crop year. The net proceeds from the operations of Sidney Sugars is based on the forecasted net income for the fiscal year and the percentage of the tons of non-member sugarbeets processed to the total estimated tons of non-member sugarbeets to be processed for a given fiscal year.
9
Table of Contents
Accrued continuing costs represent the difference between the net proceeds as determined above and actual member business crop year and Sidney Sugars fiscal year revenues realized and expenses incurred through the end of the reporting period. Accrued continuing costs are reflected in the consolidated financial statements as a cost on the Consolidated Statements of Operations and as a current liability on the Consolidated Balance Sheets.
Note 10: Net Periodic Pension and Post-Retirement Costs
The following schedules provide the components of the Net Periodic Pension and Post-Retirement Costs for the nine months and three months ended May 31, 2013 and 2012:
Components of Net Periodic Pension Cost
|
|
|
For the Nine Months Ended
|
|
For the Three Months Ended
|
|
|
|
|
May 31
|
|
May 31
|
|
|
(In Thousands)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
Service Cost
|
|
$
|
1,625
|
|
$
|
3,349
|
|
$
|
542
|
|
$
|
1,116
|
|
|
Interest Cost
|
|
6,602
|
|
7,241
|
|
2,201
|
|
2,414
|
|
|
Expected Return on Plan Assets
|
|
(10,469
|
)
|
(9,384
|
)
|
(3,490
|
)
|
(3,128
|
)
|
|
Amortization of Prior Service Costs
|
|
6
|
|
—
|
|
2
|
|
—
|
|
|
Amortization of Net Actuarial Loss
|
|
7,246
|
|
5,347
|
|
2,415
|
|
1,783
|
|
|
Net Periodic Pension Cost
|
|
$
|
5,010
|
|
$
|
6,553
|
|
$
|
1,670
|
|
$
|
2,185
|
|
Components of Net Periodic Post-Retirement Cost
|
|
|
For the Nine Months Ended
|
|
For the Three Months Ended
|
|
|
|
|
May 31
|
|
May 31
|
|
|
(In Thousands)
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
Service Cost
|
|
$
|
841
|
|
$
|
479
|
|
$
|
280
|
|
$
|
160
|
|
|
Interest Cost
|
|
1,147
|
|
1,260
|
|
383
|
|
420
|
|
|
Amortization of Net Actuarial (Gain)/Loss
|
|
171
|
|
(530
|
)
|
57
|
|
(177
|
)
|
|
Net Periodic Post-Retirement Cost
|
|
$
|
2,159
|
|
$
|
1,209
|
|
$
|
720
|
|
$
|
403
|
|
The Company made contributions of $6.8 million to the pension plans during the nine months ended May 31, 2013. The Company is not anticipating making any further contributions to the pension plans during the remainder of this fiscal year. The Company has contributed and made benefit payments of approximately $74,000 related to the Supplemental Executive Retirement Plans during the nine months ended May 31, 2013. The Company expects to contribute and make benefit payments totaling approximately $99,000 this fiscal year related to the Supplemental Executive Retirement Plans.
The Company has contributed and made benefit payments of approximately $1.3 million related to the post-retirement plans during the nine months ended May 31, 2013. The Company expects to contribute and make benefit payments of approximately $1.6 million related to the post-retirement plans during this fiscal year.
10
Table of Contents
Note 11: Members’ Investments
|
|
|
Par
|
|
Shares
|
|
Shares Issued
|
|
|
|
|
Value
|
|
Authorized
|
|
& Outstanding
|
|
|
Preferred Stock:
|
|
|
|
|
|
|
|
|
May 31, 2013
|
|
$
|
76.77
|
|
600,000
|
|
498,570
|
|
|
August 31, 2012
|
|
$
|
76.77
|
|
600,000
|
|
498,570
|
|
|
May 31, 2012
|
|
$
|
76.77
|
|
600,000
|
|
498,570
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock:
|
|
|
|
|
|
|
|
|
May 31, 2013
|
|
$
|
10.00
|
|
4,000
|
|
2,760
|
|
|
August 31, 2012
|
|
$
|
10.00
|
|
4,000
|
|
2,764
|
|
|
May 31, 2012
|
|
$
|
10.00
|
|
4,000
|
|
2,760
|
|
The components of Accumulated Other Comprehensive Income (Loss) as reflected in Members’ Investments on the Consolidated Balance Sheets are as follows:
|
|
|
May 31
|
|
August 31
|
|
|
(In Thousands)
|
|
2013
|
|
2012
|
|
2012
|
|
|
Pension and Other Post-Retirement Benefits
|
|
$
|
(86,957
|
)
|
$
|
(58,957
|
)
|
$
|
(94,379
|
)
|
|
Interest Rate Contract
|
|
(2,228
|
)
|
(2,608
|
)
|
(2,826
|
)
|
|
Foreign Currency Forward Contracts
|
|
(52
|
)
|
(75
|
)
|
(20
|
)
|
|
OCI of Equity Method Investees
|
|
(11,091
|
)
|
(5,548
|
)
|
(11,745
|
)
|
|
|
|
|
|
|
|
|
|
|
Total Accumulated Other Comprehensive Income (Loss)
|
|
$
|
(100,328
|
)
|
$
|
(67,188
|
)
|
$
|
(108,970
|
)
|
Note 12: Shipping and Handling Costs
The costs incurred for the shipping and handling of products sold are classified in the consolidated financial statements as a selling expense on the Consolidated Statements of Operations. Shipping and handling costs were $155.5 million and $152.4 million for the nine months ended May 31, 2013 and 2012, respectively and $50.7 million and $53.5 million for the three months ended May 31, 2013 and 2012, respectively.
Note 13: Segment Reporting
The Company has identified two reportable segments: Sugar and Leasing. The sugar segment is engaged primarily in the production and marketing of sugar from sugarbeets. It also sells agri-products and sugarbeet seed. The leasing segment is engaged in the leasing of a corn wet-milling plant used in the production of high-fructose corn syrup sweetener. The segments are managed separately. There are no inter-segment sales. The leasing segment has a major customer that accounts for all of that segment’s revenue.
Summarized financial information concerning the Company’s reportable segments for the nine months and three months ended May 31, 2013 and 2012 is shown below:
11
Table of Contents
|
|
|
For the Nine Months Ended May 31, 2013
|
|
|
(In Thousands)
|
|
Sugar
|
|
Leasing
|
|
Consolidated
|
|
|
Net Revenue from External Customers
|
|
$
|
1,189,529
|
|
$
|
17,959
|
|
$
|
1,207,488
|
|
|
Gross Proceeds
|
|
$
|
1,120,255
|
|
$
|
9,392
|
|
$
|
1,129,647
|
|
|
Depreciation and Amortization
|
|
$
|
40,713
|
|
$
|
8,567
|
|
$
|
49,280
|
|
|
Interest Income
|
|
$
|
58
|
|
$
|
—
|
|
$
|
58
|
|
|
Interest Expense
|
|
$
|
6,365
|
|
$
|
—
|
|
$
|
6,365
|
|
|
Income from Equity Method Investees
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
Other Income/(Expense), Net
|
|
$
|
(188
|
)
|
$
|
(206
|
)
|
$
|
(394
|
)
|
|
Consolidated Net Proceeds
|
|
$
|
761,597
|
|
$
|
9,117
|
|
$
|
770,714
|
|
|
|
|
|
|
|
|
|
|
|
Capital Additions
|
|
$
|
34,002
|
|
$
|
1,534
|
|
$
|
35,536
|
|
|
|
|
For the Nine Months Ended May 31, 2012
|
|
|
(In Thousands)
|
|
Sugar
|
|
Leasing
|
|
Consolidated
|
|
|
Net Revenue from External Customers
|
|
$
|
1,061,205
|
|
$
|
18,579
|
|
$
|
1,079,784
|
|
|
Gross Proceeds
|
|
$
|
842,150
|
|
$
|
10,026
|
|
$
|
852,176
|
|
|
Depreciation and Amortization
|
|
$
|
40,859
|
|
$
|
8,553
|
|
$
|
49,412
|
|
|
Interest Income
|
|
$
|
21
|
|
$
|
—
|
|
$
|
21
|
|
|
Interest Expense
|
|
$
|
5,867
|
|
$
|
1
|
|
$
|
5,868
|
|
|
Income from Equity Method Investees
|
|
$
|
82
|
|
$
|
—
|
|
$
|
82
|
|
|
Other Income/(Expense), Net
|
|
$
|
(13
|
)
|
$
|
(251
|
)
|
$
|
(264
|
)
|
|
Consolidated Net Proceeds
|
|
$
|
543,511
|
|
$
|
9,707
|
|
$
|
553,218
|
|
|
|
|
|
|
|
|
|
|
|
Capital Additions
|
|
$
|
20,506
|
|
$
|
2,154
|
|
$
|
22,660
|
|
|
|
|
For the Three Months Ended May 31, 2013
|
|
|
(In Thousands)
|
|
Sugar
|
|
Leasing
|
|
Consolidated
|
|
|
Net Revenue from External Customers
|
|
$
|
397,300
|
|
$
|
5,845
|
|
$
|
403,145
|
|
|
Gross Proceeds
|
|
$
|
356,868
|
|
$
|
2,969
|
|
$
|
359,837
|
|
|
Depreciation and Amortization
|
|
$
|
12,176
|
|
$
|
2,876
|
|
$
|
15,052
|
|
|
Interest Income
|
|
$
|
11
|
|
$
|
—
|
|
$
|
11
|
|
|
Interest Expense
|
|
$
|
2,243
|
|
$
|
—
|
|
$
|
2,243
|
|
|
Income from Equity Method Investees
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
Other Income/(Expense), Net
|
|
$
|
41
|
|
$
|
(20
|
)
|
$
|
21
|
|
|
Consolidated Net Proceeds
|
|
$
|
249,274
|
|
$
|
2,927
|
|
$
|
252,201
|
|
|
|
|
|
|
|
|
|
|
|
Capital Additions
|
|
$
|
18,984
|
|
$
|
370
|
|
$
|
19,354
|
|
12
Table of Contents
|
|
|
For the Three Months Ended May 31, 2012
|
|
|
(In Thousands)
|
|
Sugar
|
|
Leasing
|
|
Consolidated
|
|
|
Net Revenue from External Customers
|
|
$
|
365,987
|
|
$
|
6,550
|
|
$
|
372,537
|
|
|
Gross Proceeds
|
|
$
|
209,842
|
|
$
|
3,707
|
|
$
|
213,549
|
|
|
Depreciation and Amortization
|
|
$
|
12,009
|
|
$
|
2,843
|
|
$
|
14,852
|
|
|
Interest Income
|
|
$
|
2
|
|
$
|
—
|
|
$
|
2
|
|
|
Interest Expense
|
|
$
|
1,986
|
|
$
|
1
|
|
$
|
1,987
|
|
|
Loss from Equity Method Investees
|
|
$
|
19
|
|
$
|
—
|
|
$
|
19
|
|
|
Other Income/(Expense), Net
|
|
$
|
(16
|
)
|
$
|
(251
|
)
|
$
|
(267
|
)
|
|
Consolidated Net Proceeds
|
|
$
|
147,735
|
|
$
|
3,430
|
|
$
|
151,165
|
|
|
|
|
|
|
|
|
|
|
|
Capital Additions
|
|
$
|
7,770
|
|
$
|
1,075
|
|
$
|
8,845
|
|
|
|
|
As of May 31, 2013
|
|
|
(In Thousands)
|
|
Sugar
|
|
Leasing
|
|
Consolidated
|
|
|
Property and Equipment, Net
|
|
$
|
399,555
|
|
$
|
—
|
|
$
|
399,555
|
|
|
Assets Held for Lease, Net
|
|
$
|
—
|
|
$
|
76,856
|
|
$
|
76,856
|
|
|
Segment Assets
|
|
$
|
1,130,009
|
|
$
|
78,768
|
|
$
|
1,208,777
|
|
|
|
|
As of May 31, 2012
|
|
|
(In Thousands)
|
|
Sugar
|
|
Leasing
|
|
Consolidated
|
|
|
Property and Equipment, Net
|
|
$
|
378,617
|
|
$
|
—
|
|
$
|
378,617
|
|
|
Assets Held for Lease, Net
|
|
$
|
—
|
|
$
|
86,173
|
|
$
|
86,173
|
|
|
Segment Assets
|
|
$
|
985,761
|
|
$
|
88,689
|
|
$
|
1,074,450
|
|
|
|
|
As of August 31, 2012
|
|
|
(In Thousands)
|
|
Sugar
|
|
Leasing
|
|
Consolidated
|
|
|
Property and Equipment, Net
|
|
$
|
405,951
|
|
$
|
—
|
|
$
|
405,951
|
|
|
Assets Held for Lease, Net
|
|
$
|
—
|
|
$
|
84,095
|
|
$
|
84,095
|
|
|
Segment Assets
|
|
$
|
812,880
|
|
$
|
86,600
|
|
$
|
899,480
|
|
Note 14: Fair Value of Financial Instruments
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Quoted market prices are generally not available for the Company’s financial instruments. Fair values are based on judgments regarding anticipated cash flows, future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates involve uncertainties and matters of judgment, and therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Long-Term Debt, Inclusive of Current Maturities
- Based upon discounted cash flows and current borrowing rates with similar maturities, the fair value of the long-term debt as of May 31, 2013 was approximately $140.2 million in comparison to the carrying value of $128.4 million. The fair value of the long-term debt as of May 31, 2012 was approximately $143.1 million in comparison to the carrying value of $128.6 million.
Investments in CoBank, ACB and Investments in Marketing Cooperatives
- The Company believes it is not practical to estimate the fair value of these investments without incurring excessive costs
13
Table of Contents
because there is no established market for these securities and equity interests, and it is inappropriate to estimate future cash flows which are largely dependent on future earnings of these organizations.
Foreign Currency Forward Contracts
- Based on a variety of pricing factors, which include the market price of the foreign currency forward contract available in the dealer-market, the fair value of the open contracts as of May 31, 2013 was a liability of approximately $52,000. The fair value of the open contracts as of May 31, 2012 was a liability of approximately $75,000. The fair value of the open contracts as of August 31, 2012 was a liability of approximately $20,000. Inputs used to measure the fair value of the foreign currency forward contracts are quoted prices in active markets for identical assets or liabilities and therefore are contained within level 1 of the fair value hierarchy. See the tables below.
Interest Rate Contracts
- Based on the zero coupon method in which the term, notional amount, and repricing date of the interest rate swap match the term, repricing date, and principal amount of the interest-bearing liability on which the hedging interest payments are due, the fair value of the interest rate contract as of May 31, 2013 was a liability of approximately $2.2 million. The fair value of the interest rate contract as of May 31, 2012 was a liability of approximately $2.6 million. The fair value of the interest rate contract as of August 31, 2012 was a liability of approximately $2.8 million. Inputs used to measure the fair value of the interest rate swap contracts are quoted prices in active markets for similar assets or liabilities and therefore are contained within level 2 of the fair value hierarchy. See the tables below.
The tables below reflect the assets and liabilities measured at fair value on a recurring basis as of May 31, 2013, May 31, 2012 and August 31, 2012.
Fair Value of Liabilities as of May 31, 2013
|
(In Thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
Foreign Currency Forward Contracts
|
|
$
|
52
|
|
$
|
—
|
|
$
|
—
|
|
$
|
52
|
|
|
Interest Rate Contracts
|
|
$
|
—
|
|
$
|
2,228
|
|
$
|
—
|
|
$
|
2,228
|
|
|
Total
|
|
$
|
52
|
|
$
|
2,228
|
|
$
|
—
|
|
$
|
2,280
|
|
Fair Value of Liabilities as of May 31, 2012
|
(In Thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
Foreign Currency Forward Contracts
|
|
$
|
75
|
|
$
|
—
|
|
$
|
—
|
|
$
|
75
|
|
|
Interest Rate Contracts
|
|
$
|
—
|
|
$
|
2,608
|
|
$
|
—
|
|
$
|
2,608
|
|
|
Total
|
|
$
|
75
|
|
$
|
2,608
|
|
$
|
—
|
|
$
|
2,683
|
|
Fair Value of Liabilities as of August 31, 2012
|
(In Thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
Foreign Currency Forward Contracts
|
|
$
|
20
|
|
$
|
—
|
|
$
|
—
|
|
$
|
20
|
|
|
Interest Rate Contracts
|
|
$
|
—
|
|
$
|
2,826
|
|
$
|
—
|
|
$
|
2,826
|
|
|
Total
|
|
$
|
20
|
|
$
|
2,826
|
|
$
|
—
|
|
$
|
2,846
|
|
Note 15: Environmental Matters
The Company is subject to extensive federal and state environmental laws and regulations with respect to water and air quality, solid waste disposal and odor and noise control. The Company conducts an ongoing compliance program designed to meet these environmental laws and regulations. The Company believes that it is in substantial compliance with applicable environmental laws and regulations. From time to time, however, the Company may be involved in investigations or determinations regarding matters that may arise in the ordinary course of business. The Company works closely with all affected government agencies to resolve environmental issues that have arisen and believes such issues will be resolved without any material adverse effect on the Company.
The Company’s sugar manufacturing process is energy intensive and generates carbon dioxide and other “Greenhouse Gases” (GHGs). The Company believes that industries generating GHGs,
14
Table of Contents
including the Company, could be subject to either federal or state regulation relating to climate change policies in the relatively near future. These policies, if adopted, will increase the Company’s energy and other operating costs. Depending on how these policies address imports, the domestic sugar market may have a competitive disadvantage compared with imported sugar. These policies could have a significant negative impact on the Company’s beet payment to shareholders if the Company is not able to pass the increased costs on to its customers
.
On August 12, 2011, the Company received a Finding of Violation and Notice of Violation from the United States Environmental Protection Agency (EPA) for alleged violations of the Clean Air Act concerning certain air emissions at the Company’s three Minnesota factories. Although the Company has had some preliminary discussions with the EPA concerning possible settlement of the alleged violations, there are no such discussions currently active. The Company, at this time, cannot predict the outcome of these discussions or the financial impact, if any, resulting from the resolution of this matter.
The Company has approved capital expenditures for environmental related projects over the next three years at the Company’s factory locations of approximately $23.4 million.
Note 16: Legal Matters
The Bakery, Confectionery, Tobacco Workers and Grain Millers (BCTGM) AFL-CIO had filed an unfair labor practices charge against the Company with the National Labor Relations Board (NLRB) associated with the negotiations for a new collective bargaining agreement and the lockout of union employees upon the expiration of the previous collective bargaining agreement. This charge was subsequently withdrawn by the BCTGM.
Note 17: Subsequent Events
The Company has evaluated events through the date that the financial statements were issued for potential recognition or disclosure in the May 31, 2013 financial statements.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Nine Months and Three Months Ended May 31, 2013 and 2012
This report contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements include, among others, those statements including the words “expect”, “anticipate”, “believe”, “may” and similar expressions. The Company’s actual results could differ materially from those indicated. Risk factors that could cause or contribute to such differences include, without limitation, market factors, weather and general economic conditions, farm and trade policy, and available quantity and quality of sugarbeets. For a more complete discussion of “Risk Factors”, please refer to the Company’s 2012 Form 10-K.
OVERVIEW
The harvest of the Red River Valley and the Sidney sugarbeet crops grown during 2012 and to be processed during fiscal 2013 produced a total of 12.3 million tons of sugarbeets, or approximately 27.2 tons of sugarbeets per acre from approximately 454,000 acres. This represents an increase in total tons harvested of approximately 24.6 percent compared to the 2011 crop. The sugar content of the 2012 crop is 19.1 percent as compared to 18.0 percent for the 2011 crop. The Company expects to produce a total of approximately 37.0 million hundredweight of sugar from the 2012 crop, an increase of approximately 32.0 percent compared to the 2011 crop.
Net proceeds attributable to American Crystal Sugar Company for fiscal 2013 is expected to be approximately 41 percent higher than in fiscal 2012. This expected increase is primarily due to the increased tons harvested and the higher sugar content of this year’s sugarbeet crop resulting in the increased production of sugar and agri-products. Partially offsetting these expected increases is a lower anticipated net selling price for sugar.
15
Table of Contents
RESULTS OF OPERATIONS
Comparison of the Nine Months Ended May 31, 2013 and 2012
Revenue for the nine months ended May 31, 2013 was $1.2 billion, an increase of $127.7 million from the nine months ended May 31, 2012. The table below reflects the percentage changes in product revenues, prices and volumes for the nine months ended May 31, 2013 as compared to the nine months ended May 31, 2012.
|
Product
|
|
Revenue
|
|
Selling Price
|
|
Volume
|
|
|
Sugar
|
|
10.2
|
%
|
-3.7
|
%
|
14.4
|
%
|
|
Pulp
|
|
34.1
|
%
|
5.5
|
%
|
27.1
|
%
|
|
Molasses
|
|
49.9
|
%
|
1.4
|
%
|
47.9
|
%
|
|
CSB
|
|
12.6
|
%
|
1.6
|
%
|
10.8
|
%
|
|
Betaine
|
|
-17.8
|
%
|
-9.5
|
%
|
-9.2
|
%
|
The decrease in the selling price of sugar reflects an increased supply of sugar in the domestic sugar market. The increases in selling prices for most of our agri-products reflect strong markets due to supply and demand factors and supported by higher corn prices. The lower Betaine selling price is a result of a softening of the poultry feed market. The increases in the volume of sugar and most of our agri-products reflect the impact of more product availability related to the earlier start of the processing campaign this year due to a larger sugarbeet crop. The decreased volume for betaine reflects different timing of sales between the two years.
Rental revenue on the ProGold operating lease was $18.0 million and $18.6 million for the nine months ended May 31, 2013 and 2012, respectively.
Cost of sales for the nine months ended May 31, 2013, exclusive of payments to members for sugarbeets, decreased $149.8 million as compared to the nine months ended May 31, 2012. This decrease was primarily related to product inventories that are recorded at their net realizable value and lower costs related to the lockout of employees represented by the BCTGM partially offset by increased operating costs due to processing 27.3 percent more sugarbeets this year. The change in the net realizable value of the product inventories from the beginning of the reporting period is recorded on the balance sheet as either an increase or decrease to inventories with a corresponding dollar for dollar adjustment to cost of sales on the statement of operations. The increase in the net realizable value of product inventories for the nine months ended May 31, 2013 was $398.9 million as compared to an increase of $243.5 million for the nine months ended May 31, 2012 resulting in a $155.4 million favorable change in the cost of sales between the two periods as shown in the table below:
Change in the Net Realizable Value of Product Inventories
|
|
|
For the Nine Months Ended May 31
|
|
|
(In Millions)
|
|
2013
|
|
2012
|
|
Change
|
|
|
Beginning Product Inventories at Net Realizable Value
|
|
$
|
(133.8
|
)
|
$
|
(176.4
|
)
|
$
|
42.6
|
(1)
|
|
Ending Product Inventories at Net Realizable Value
|
|
532.7
|
|
419.9
|
|
112.8
|
(2)
|
|
Increase in the Net Realizable Value of Product Inventories
|
|
$
|
398.9
|
|
$
|
243.5
|
|
$
|
155.4
|
|
(1) The change is primarily due to a 28.0 percent decrease in the hundredweight of sugar inventory as of August 31, 2012, as compared to August 31, 2011, partially offset by a 2.4 percent increase in the per hundredweight net realizable value of sugar inventory as of August 31, 2012, as compared to August 31, 2011.
(2) The change is primarily due to a 35.9 percent increase in the hundredweight of sugar inventory as of May 31, 2013 as compared to May 31, 2012, partially offset by an 8.2 percent decrease in the per hundredweight net realizable value of sugar as of May 31, 2013 as compared to May 31, 2012.
Selling, general and administrative expenses increased $1.6 million for the nine months ended May 31, 2013 as compared to the nine months ended May 31, 2012. Selling expenses increased $1.2
16
Table of Contents
million primarily due to the increased volume of products sold. General and administrative expenses increased $ .4 million due to general cost increases.
Net proceeds attributable to American Crystal Sugar Company increased $217.8 million for the nine months ended May 31, 2013 as compared to the nine months ended May 31, 2012. This increase was primarily due to processing 27.3 percent more tons of sugarbeets for the nine months ended May 31, 2013 as compared to the nine months ended May 31, 2012 along with a higher forecasted per ton Gross Beet Payment this year as compared to that forecasted at this time last year.
Comparison of the Three Months Ended May 31, 2013 and 2012
Revenue for the three months ended May 31, 2013 was $403.1 million, an increase of $30.6 million from the three months ended May 31, 2012. The table below reflects the percentage changes in product revenues, prices and volumes for the three months ended May 31, 2013 as compared to the three months ended May 31, 2012.
|
Product
|
|
Revenue
|
|
Selling Price
|
|
Volume
|
|
|
Sugar
|
|
8.9
|
%
|
-6.9
|
%
|
16.9
|
%
|
|
Pulp
|
|
25.6
|
%
|
3.8
|
%
|
21.0
|
%
|
|
Molasses
|
|
-30.2
|
%
|
-1.4
|
%
|
-29.3
|
%
|
|
CSB
|
|
11.9
|
%
|
3.7
|
%
|
7.9
|
%
|
|
Betaine
|
|
6.7
|
%
|
-12.8
|
%
|
22.4
|
%
|
The decrease in the selling price of sugar reflects an increased supply of sugar in the domestic sugar market. The lower Betaine selling price is a result of a softening of the poultry feed market. The increases in the volume of sugar and pulp reflect the impact of more product availability related to this year’s larger sugarbeet crop. The decrease in the volume of molasses was due in part to increased molasses production last year resulting from decreased sugarbeet quality due to unfavorable storage conditions. The increased volume for betaine reflects different timing of sales between the two years along with more product availability due to increased production this year.
Rental revenue on the ProGold operating lease was $5.8 million and $6.5 million for the three months ended May 31, 2013 and 2012, respectively.
Cost of sales for the three months ended May 31, 2013, exclusive of payments to members for sugarbeets, decreased $115.7 million as compared to the three months ended May 31, 2012. This decrease was primarily related to product inventories that are recorded at their net realizable value and lower costs related to the lockout of employees represented by the BCTGM partially offset by increased operating costs due to processing 48.1 percent more sugarbeets this year. The change in the net realizable value of the product inventories from the beginning of the reporting period is recorded on the balance sheet as either an increase or decrease to inventories with a corresponding dollar for dollar adjustment to cost of sales on the statement of operations. The increase in the net realizable value of product inventories for the three months ended May 31, 2013 was $85.6 million as compared to a decrease of $35.1 million for the three months ended May 31, 2012 resulting in a $120.7 million favorable change in the cost of sales between the two periods as shown in the table below:
Change in the Net Realizable Value of Product Inventories
|
|
|
For the Three Months Ended May 31
|
|
|
(In Millions)
|
|
2013
|
|
2012
|
|
Change
|
|
|
Beginning Product Inventories at Net Realizable Value
|
|
$
|
(447.1
|
)
|
$
|
(455.0
|
)
|
$
|
7.9
|
(1)
|
|
Ending Product Inventories at Net Realizable Value
|
|
532.7
|
|
419.9
|
|
112.8
|
(2)
|
|
Increase (Decrease) in the Net Realizable Value of Product Inventories
|
|
$
|
85.6
|
|
$
|
(35.1
|
)
|
$
|
120.7
|
|
(1) The change is primarily due to a 12.9 percent decrease in the per hundredweight net realizable value of sugar as of February 28, 2013 as compared to February 29, 2012, partially offset by a 9.5 percent increase in the hundredweight of sugar inventory as of February 28, 2013 as compared to February 29, 2012.
17
Table of Contents
(2) The change is primarily due to a 35.9 percent increase in the hundredweight of sugar inventory as of May 31, 2013 as compared to May 31, 2012, partially offset by an 8.2 percent decrease in the per hundredweight net realizable value of sugar as of May 31, 2013 as compared to May 31, 2012.
Selling, general and administrative expenses decreased $4.3 million for the three months ended May 31, 2013 as compared to the three months ended May 31, 2012. Selling expenses decreased $4.1 million primarily due to lower factory shipping and handling costs partially offset by higher expenses related to the increased volume of products. General and administrative expenses decreased $ .2 million due to general cost decreases.
Net proceeds attributable to American Crystal Sugar Company increased $101.3 million for the three months ended May 31, 2013 as compared to the three months ended May 31, 2012. This increase was primarily due to a higher forecasted per ton Gross Beet Payment this year as compared to that forecasted at this time last year along with processing 48.1 percent more tons of sugarbeets for the three months ended May 31, 2013 as compared to the three months ended May 31, 2012.
LIQUIDITY AND CAPITAL RESOURCES
Under the Company’s agreement with its shareholders, payments for member-delivered sugarbeets for each crop year are calculated based on the revenues from sugar and agri-products derived from the sugarbeet crop less all member business expenses. In addition, the beet payments made to member growers and non-member growers are paid in three payments over the course of a year, and the member payments are made net of any anticipated unit retain for the crop. These procedures have the effect of providing the Company with an additional source of short-term capital.
Because sugar is sold throughout the year (while sugarbeets are processed primarily in the fall, winter and spring) and because substantial amounts of equipment are required for its operations, the Company utilizes substantial outside financing on both a seasonal and long-term basis to fund its operations.
The Company had a seasonal line of credit through May 31, 2013 with a consortium of lenders led by CoBank, ACB of $410.0 million along with an additional $50.0 million which can be utilized for either short-term or long-term borrowing purposes. On June 1, 2013, the seasonal line of credit is reduced to $350.0 million through July 19, 2015. The availability of the additional $50.0 million which can be utilized for either short-term or long-term borrowing purposes remains unchanged during this time. The Company also has a line of credit with Wells Fargo Bank for $1.0 million. The Company’s commercial paper program provides short-term borrowings up to the amount of the CoBank, ACB seasonal line of credit. Any borrowings under the commercial paper program along with outstanding short-term letters of credit will act to reduce the available credit under the CoBank, ACB seasonal line of credit by a commensurate amount. As of May 31, 2013, approximately $261.4 million of commercial paper was outstanding. The Company had $3.2 million of short-term letters of credit outstanding and $3.1 million of the $50.0 million additional line of credit was utilized for long-term borrowing purposes as of May 31, 2013. The unused short-term line of credit as of May 31, 2013 was $193.3 million which includes $46.9 million that can also be utilized for long-term borrowing purposes.
Under the Farm Bill, the Company can borrow funds on a non-recourse basis from the CCC, with repayment of such funds secured by sugar. The limitations on such borrowings are based on the amount of the Company’s sugar inventory and certain loan covenant restrictions by CoBank, ACB. As of May 31, 2013, the Company had outstanding non-recourse loans with the CCC of $35.9 million, against which 1.5 million hundredweight of sugar was pledged as collateral. The Company had the capacity to obtain additional non-recourse loans from the CCC as of May 31, 2013 of approximately $217.8 million.
The Company has a long-term debt line of credit through July 30, 2015 with CoBank, ACB of $60.8 million along with an additional $50.0 million, as mentioned above, which can be utilized for either short-term or long-term borrowing purposes. As of May 31, 2013, there was no outstanding balance with CoBank, ACB but the Company had $63.9 million in long-term letters of credit outstanding. The unused long-term line of credit as of May 31, 2013 was $46.9 million which can also be utilized for short-term
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borrowing purposes. In addition, the Company had long-term debt outstanding as of May 31, 2013 of $50 million from a private placement of Senior Notes that occurred in September 1998 and $78.4 million from four separate issuances of Pollution Control and Industrial Development Revenue Bonds.
The Company had outstanding purchase commitments totaling $43.6 million as of May 31, 2013 for equipment and construction contracts related to various capital projects.
The Company has a 55 percent ownership interest and a 25 percent voting interest in Midwest Agri-Commodities Company (Midwest). Substantially all of the Company’s agri-products are sold by Midwest as a marketing agent for the Company. The owners of Midwest are guarantors of the short-term line of credit Midwest has with CoBank, ACB. As of May 31, 2013, Midwest had outstanding short-term debt with CoBank, ACB of $5.4 million, of which $1.9 million was guaranteed by the Company.
The net cash used in operations was $110.5 million for the nine months ended May 31, 2013 as compared to $172.4 million for the nine months ended May 31, 2012. This decrease in the use of cash of $61.9 million was primarily the result of the following:
·
Reflected in the change in the net cash used in operating activities is a net cash decrease of $2.2 million from the prior year which was the result of an increase in the member gross beet payment of $219.9 million partially offset by increased revenue of $127.7 million and a decrease in costs of $90.0 million.
·
There was a net favorable change in assets and liabilities from the prior year of $64.1 million primarily comprised of the following:
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The decrease in cash related to receivables of $6.3 million is primarily due to the timing of the deliveries of products and collections.
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The decrease in cash related to the change in inventories of $85.5 million was primarily due to an increase in the tons of unprocessed sugarbeets and in the hundredweight of sugar inventory partially offset by a decreased net realizable value per hundredweight of sugar.
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The net decrease in cash of $35.1 million related to changes in accounts payable of $21.3 million, other liabilities of $6.8 million and advances to related parties of $7.0 million are primarily due to the timing of payments.
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The increase in cash related to changes in accrued continuing costs of $59.2 million was the result of the differences in the timing of actual revenues and expenses and forecasted revenues and expenses between the two years.
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The increase in cash related to the Amount Due Growers of $131.9 million was primarily due to an increase in the current year’s total estimated grower payment resulting from an increase in tons harvested and a higher forecasted per ton grower payment this year as compared to this time last year.
The net cash used in investing activities was $41.5 million for the nine months ended May 31, 2013 as compared to $26.5 million for the nine months ended May 31, 2012. The increase of $15.0 million was primarily due to increased purchases of property and equipment.
The net cash provided by financing activities was $152.0 million for the nine months ended May 31, 2013 as compared to $198.9 million for the nine months ended May 31, 2012. This decrease of $46.9 million was primarily due to decreased net proceeds from short-term debt of $44.2 million, increased payment of unit retains of $7.4 million and increased distributions to noncontrolling interests of $ .8 million partially offset by decreased debt repayments of $5.5 million.
The Company anticipates that the funds necessary for working capital requirements and future capital expenditures will be derived from operations and unit retains along with short-term and long-term borrowings.
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OTHER
Significant Accounting Policies and Estimates
The Company’s significant accounting policies are described in Note 1,
Principal Activity and
Significant Accounting Policies
, of the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2012. The Company’s critical accounting estimates are discussed in Item 7,
Management’s Discussion and Analysis of Financial Condition and Results of Operations
, included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2012. There has been no significant change in the Company’s significant accounting policies or critical accounting estimates since the end of fiscal 2012.
Environmental
The Company is subject to extensive federal and state environmental laws and regulations with respect to water and air quality, solid waste disposal and odor and noise control. The Company conducts an ongoing compliance program designed to meet these environmental laws and regulations. The Company believes that it is in substantial compliance with applicable environmental laws and regulations. From time to time, however, the Company may be involved in investigations or determinations regarding matters that may arise in the ordinary course of business. The Company works closely with all affected government agencies to resolve environmental issues that have arisen and believes such issues will be resolved without any material adverse effect on the Company.
The Company’s sugar manufacturing process is energy intensive and generates carbon dioxide and other “Greenhouse Gases” (GHGs). The Company believes that industries generating GHGs, including the Company, could be subject to either federal or state regulation relating to climate change policies in the relatively near future. These policies, if adopted, will increase the Company’s energy and other operating costs. Depending on how these policies address imports, the domestic sugar market may have a competitive disadvantage compared with imported sugar. These policies could have a significant negative impact on the Company’s beet payment to shareholders if the Company is not able to pass the increased costs on to its customers
.
On August 12, 2011, the Company received a Finding of Violation and Notice of Violation from the United States Environmental Protection Agency (EPA) for alleged violations of the Clean Air Act concerning certain air emissions at the Company’s three Minnesota factories. Although the Company has had some preliminary discussions with the EPA concerning possible settlement of the alleged violations, there are no such discussions currently active. The Company, at this time, cannot predict the outcome of these discussions or the financial impact, if any, resulting from the resolution of this matter.
The Company has approved capital expenditures for environmental related projects over the next three years at the Company’s factory locations of approximately $23.4 million.
Employees
Substantially all of the hourly employees at the Company’s factories, including full-time and seasonal employees, are represented by the BCTGM. The collective bargaining agreement for the Red River Valley factory employees, which was signed on April 16, 2013, expires on July 31, 2017. The lockout of the Red River Valley factory employees has ended and the union employees have been transitioned back into the factory workforce. The collective bargaining agreement for the Sidney, Montana, factory employees will expire on April 30, 2015. Office, clerical and management employees are not unionized, except for certain office employees at the Moorhead and Crookston, Minnesota, and Hillsboro, North Dakota, factories who are covered by the collective bargaining agreement with the BCTGM.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market risk is the risk of loss to future earnings, to fair values or to future cash flows that may result from changes in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, exchange rates, commodity prices, equity prices and other market changes. Market risk is attributed to all market-risk sensitive financial instruments, including long-term debt.
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The Company does not believe that there is any material market risk exposure with respect to interest rates, exchange rates, commodity prices, equity prices and other market changes that would require disclosure under this item.
Item 4. Controls and Procedures
The Company’s chief executive officer and chief financial officer have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 240.13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934) as of May 31, 2013. Based on that review and evaluation, which included inquiries made to certain other employees of the Company, the chief executive officer and chief financial officer have concluded that the Company’s current disclosure controls and procedures, as designed and implemented, are effective in ensuring that information relating to the Company required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such information is accumulated and communicated to the Company’s management, including the chief executive officer and the chief financial officer, as appropriate to allow timely decisions regarding required disclosure. There were no changes in the Company’s internal controls over financial reporting that occurred during the Company’s most recent fiscal quarter that may have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time and in the ordinary course of its business, the Company is named as a defendant in legal proceedings related to various issues, including worker’s compensation claims, tort claims and contractual disputes. The Company is currently involved in certain legal proceedings, which have arisen in the ordinary course of the Company’s business. The Company is also aware of certain other potential claims, which could result in the commencement of legal proceedings. The Company carries insurance, which provides protection against certain types of claims. With respect to current litigation and potential claims of which the Company is aware, the Company’s management believes that (i) the Company has insurance protection to cover all or a portion of any judgments which may be rendered against the Company with respect to certain claims or actions and (ii) any judgments which may be entered against the Company and which may exceed such insurance coverage or which may arise in actions involving potential liabilities not covered by insurance policies are not likely to have a material adverse effect upon the Company, or its assets or operations.
The BCTGM had filed an unfair labor practices charge against the Company with the NLRB associated with the negotiations for a new collective bargaining agreement and the lockout of union employees upon the expiration of the previous collective bargaining agreement. The BCTGM subsequently withdrew the charge.
Item 1A. Risk Factors.
For a detailed discussion of certain risk factors that could affect the Company’s operations, financial condition or results for future periods, see Item 1A, Risk factors, in the Company’s 2012 Annual Report on Form 10-K.
An oversupply of sugar could reduce the price of sugar and our profitability.
Many factors can lead to an oversupply of sugar. Excess supply may result in a decline in domestic sugar prices. If the selling price of sugar decreases, our revenues will decrease which will result in a direct negative impact on our profitability.
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Under the current terms of the NAFTA, sugar imported from Mexico may freely enter the U.S. market. These imports could oversupply the U.S. market and reduce the price of sugar.
The United States government has been engaged in regional and bilateral trade negotiations with countries that produce sugar. If the United States government enters into trade agreements with sugar producing countries, the amount of sugar in the domestic sugar market could increase.
Sugar prices have declined considerably in the last twelve months. This dramatic change in the market is due to excessive supply resulting from record 2012 crop production in the United States and Mexico, combined with unneeded world market imports authorized by the U.S. Department of Agriculture in 2012.
While we cannot predict the extent or duration of this price decline, it is likely that sugar prices on the 2013 crop will be dramatically lower than recent years’ results, which will negatively impact our profitability.
The success or failure of our business is linked to certain government programs, regulations and legislation that may change in the future.
The nature and scope of future legislation and regulation affecting the sugar market and industry cannot be predicted. The current price supports and market protections in place for sugar may not continue in their present forms. If the price support programs were eliminated in their entirety, or if certain protections the federal government provides from foreign competitors were materially reduced, the amount of sugar we can sell, the amount of sugarbeets we can process and the price for which we can sell our sugar may be impacted, which could reduce the profitability of our business. If legislation or government programs change, we may not be able to adopt strategies that would allow us to compete effectively in a greatly changed domestic market for sugar and the adverse effects could negatively impact the desirability of growing sugarbeets for delivery to us for processing, our financial results, and our continued viability.
The Food, Conservation and Energy Act of 2008 (Farm Bill) enacted in May, 2008, contains several provisions related to the domestic sugar industry aimed at achieving balance and stability in the U.S. sugar market while minimizing the cost to the Federal government. The Farm Bill applies to the 2008 through 2012 crop years. Recent legislative action has extended the current Farm Bill so as to include the 2013 crop year. Legislative activities are currently underway on a new farm bill which would apply to the 2014 through 2018 crop years. We cannot predict the changes to the Farm Bill or the impact such changes will have at this time.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
None
Item 5. Other Information.
None.
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Item 6. Exhibits
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Exhibit No.
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Exhibit Description
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3.1
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Restated Articles of Incorporation of American Crystal Sugar Company is incorporated by reference to Exhibit 3(i) from the Company’s Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.
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3.2
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Restated By-laws of American Crystal Sugar Company is incorporated by reference to Exhibit 3(ii) from the Company’s Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996.
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4.1
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Restated Articles of Incorporation of American Crystal Sugar Company is incorporated by reference to Exhibit 3(i) from the Company’s Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994
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4.2
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Restated By-laws of American Crystal Sugar Company is incorporated by reference to Exhibit 3(ii) from the Company’s Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996.
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10.1
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Form of Operating Agreement between Registrant and ProGold Limited Liability Company is incorporated by reference to Exhibit 10(u) from the Company’s Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994
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10.2
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Registrant’s Senior Note Purchase Agreement is incorporated by reference to Exhibit 10.24 from the Company’s Annual Report on Form 10-K for the year ended August 31, 1999 (File/Film No. 99764763) filed on November 26, 1999.
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10.3
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Registrant’s Senior Note Inter-creditor and Collateral Agency Agreement is incorporated by reference to Exhibit 10.25 from the Company’s Annual Report on Form 10-K for the year ended August 31, 1999 (File/Film No. 99764763) filed on November 26, 1999.
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10.4
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Registrant’s Senior Note Restated Mortgage and Security Agreement is incorporated by reference to Exhibit 10.26 from the Company’s Annual Report on Form 10-K for the year ended August 31, 1999 (File/Film No. 99764763) filed on November 26, 1999.
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*10.5
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Long Term Incentive Plan, dated June 23, 1999 is incorporated by reference to Exhibit 10.31 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2000 (File/Film No. 775168) filed on November 22, 2000.
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*10.6
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Long Term Incentive Plan, dated August 24, 2005 is incorporated by reference to Exhibit 10.25 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2005 (File/Film No. 051224287) filed on November 23, 2005.
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*10.7
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Employment Agreement dated March 21, 2007 between the Registrant and David A. Berg is
incorporated by reference to Exhibit 10.26 from the Company’s Form 10-Q for the quarter ended February 28, 2007 (File/Film No. 07767289) filed on April 16, 2007.
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10.8
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Growers’ Contract (5-year Agreement) for the crop years 2008 through 2012 is incorporated by reference to Exhibit 10.24 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2007 (File/Film No. 071273808) filed on November 29, 2007.
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10.9
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Amended and Restated Uniform Member Sugar Marketing Agreement between the Registrant and United Sugars Corporation dated September 20, 2007 is incorporated by reference to Exhibit 10.22 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2008 (File/Film No. 081215861) filed on November 26, 2008.
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*10.10
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Restated Supplemental Executive Retirement Plan, dated December 5, 2008 is incorporated by reference to Exhibit 10.20 from the Company’s Form 10-Q for the quarter ended November 30, 2008 (File/Film No. 09525944) filed on January 14, 2009.
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*10.11
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Restated Board of Directors Deferred Compensation Plan, dated December 8, 2008 is incorporated by reference to Exhibit 10.21 from the Company’s Form 10-Q for the quarter ended November 30, 2008 (File/Film No. 09525944) filed on January 14, 2009.
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*10.12
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First Amendment to 2005 Long-Term Incentive Plan, dated December 20, 2006 is incorporated by reference to Exhibit 10.22 from the Company’s Form 10-Q for the quarter ended February 28, 2009 (File/Film No. 09747626) filed on April 14, 2009.
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*10.13
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Second Amendment to 2005 Long-Term Incentive Plan, dated November 5, 2007 is incorporated by reference to Exhibit 10.23 from the Company’s Form 10-Q for the quarter ended February 28, 2009 (File/Film No. 09747626) filed on April 14, 2009.
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*10.14
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Third Amendment to 2005 Long-Term Incentive Plan, dated December 11, 2008 is incorporated by reference to Exhibit 10.24 from the Company’s Form 10-Q for the quarter ended February 28, 2009 (File/Film No. 09747626) filed on April 14, 2009.
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10.15
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Amended and Restated Credit Agreement between the Registrant and CoBank, ACB dated July 30, 2009 is
Incorporated by reference to Exhibit 10.17 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2009 (File/Film No. 091156997) filed on November 4, 2009.
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10.16
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Amended and Restated Uniform Member Marketing Agreement between the Registrant and Midwest Agri-Commodities Company dated September 1, 2009 is incorporated by reference to Exhibit 10.18 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2009 (File/Film No. 091156997) filed on November 4, 2009.
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10.17
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Amended and Restated Member Control Agreement between Registrant and Golden Growers Cooperative dated September 1, 2009 is incorporated by reference to Exhibit 10.19 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2009 (File/Film No. 091156997) filed on November 4, 2009.
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10.18
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First Amendment to Amended and Restated Credit Agreement between the Registrant and CoBank, ACB dated July 30, 2010 is incorporated by reference to Exhibit 10.20 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2010 (File/Film No. 101161560) filed on November 3, 2010.
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*10.19
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Fourth Amendment to 2005 Long-Term Incentive Plan, dated August 1, 2010 is incorporated by reference to Exhibit 10.21 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2010 (File/Film No. 101161560) filed on November 3, 2010.
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10.20
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Second Amendment to Amended and Restated Credit Agreement between the Registrant and CoBank, ACB dated November 4, 2010 is incorporated by reference to Exhibit 10.23 from the Company’s Form 10-Q for the quarter ended November 30, 2010 (File/Film No. 11528964) filed on January 14, 2011.
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10.21
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Third Amendment to Amended and Restated Credit Agreement between the Registrant and CoBank, ACB dated July 19, 2011 is incorporated by reference to Exhibit 10.23 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2011 (File/Film No. 111224383) filed on November 23, 2011.
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*10.22
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Employment Agreement dated July 15, 2012 between the Registrant and Joseph J. Talley is incorporated by reference to Exhibit 10.22 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2012 (File/Film No. 121189319) filed on November 8, 2012.
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*10.23
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First amendment to the Restated Supplemental Executive Retirement Plan, dated October 2, 2012 is incorporated by reference to Exhibit 10.23 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2012 (File/Film No. 121189319) filed on November 8, 2012.
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10.24
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Growers’ Contract (5-year Agreement) for the crop years 2013 through 2017 is incorporated by reference to Exhibit 10.24 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2012 (File/Film No. 121189319) filed on November 8, 2012.
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10.25
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Fourth Amendment to the Amended and Restated Credit Agreement between the Registrant and CoBank, ACB dated November 2, 2012 is incorporated by reference to
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24
Table of Contents
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Exhibit 10.25 from the Company’s Annual Report on Form 10-K for the year ended August 31, 2012 (File/Film No. 121189319) filed on November 8, 2012.
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Filed herewith electronically
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31.1
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Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-15(e)/15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-15(e)/15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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32.2
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Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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**101
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The following materials from American Crystal Sugar Company’s Quarterly Report on Form 10-Q for the period ended May 31, 2013, filed with the SEC on July 15, 2013, formatted in Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets for at May 31, 2013 and 2012 and August 31, 2012, (ii) Consolidated Statements of Operations for the nine month and three-month periods ended May 31, 2013 and 2012, (iii) Consolidated Statements of Comprehensive Income for the nine month and three-month periods ended May 31, 2013 and 2012, (iv) Consolidated Statements of Cash Flows for the nine month periods ended May 31, 2013 and 2012, and (v) Notes to Consolidated Financial Statements.
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*A management contract or compensatory plan required to be filed with this report.
** Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act of the Exchange Act, except as shall be expressly set forth by specific reference to such filings.
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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AMERICAN CRYSTAL SUGAR COMPANY
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(Registrant)
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Date:
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July 15, 2013
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/s/ Teresa Warne
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Teresa Warne
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Corporate Controller,
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Chief Accounting Officer
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Duly Authorized Officer
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25
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