As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

11/08/19  Golden Growers Cooperative        10-Q        9/30/19   46:3.3M                                   Toppan Merrill Bridge/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                    HTML    335K 
 4: EX-99.1     Miscellaneous Exhibit                               HTML    122K 
 2: EX-31.1     Certification -- §302 - SOA'02                      HTML     22K 
 3: EX-32.1     Certification -- §906 - SOA'02                      HTML     17K 
38: R1          Document and Entity Information                     HTML     41K 
23: R2          Condensed Balance Sheets                            HTML     56K 
11: R3          Condensed Balance Sheets (Parenthetical)            HTML     22K 
32: R4          Condensed Statements of Operations and              HTML     46K 
                Comprehensive Income                                             
39: R5          Statements of Comprehensive Income                  HTML     20K 
24: R6          Statements of Changes in Members' Equity            HTML     27K 
12: R7          Condensed Statements of Cash Flows                  HTML     59K 
31: R8          Basis of Presentation                               HTML     21K 
40: R9          Expenses                                            HTML     18K 
42: R10         Progold Limited Liability Company                   HTML     86K 
36: R11         Investments                                         HTML    205K 
13: R12         Employee Benefit Plans                              HTML     37K 
25: R13         Change in Accounting Standards                      HTML     25K 
43: R14         Distributions to Members                            HTML     17K 
37: R15         Line of Credit                                      HTML     18K 
14: R16         Commitments and Contingencies                       HTML     18K 
26: R17         Subsequent Events                                   HTML     17K 
44: R18         Progold Limited Liability Company (Tables)          HTML     85K 
35: R19         Investments (Tables)                                HTML    209K 
17: R20         Employee Benefit Plans (Tables)                     HTML     36K 
20: R21         Expenses (Details)                                  HTML     17K 
45: R22         Progold Limited Liability Company (Details)         HTML     65K 
28: R23         Investments - (Details)                             HTML     28K 
18: R24         Investments - Net Carrying Amount (Details)         HTML     34K 
21: R25         INVESTMENTS - Investments held to maturity          HTML     32K 
                (Details)                                                        
46: R26         INVESTMENTS - Maturities (Details)                  HTML     26K 
29: R27         Employee Benefit Plans (Details)                    HTML     36K 
16: R28         Change in Accounting Standards (Details)            HTML     23K 
22: R29         Change in Accounting Standards - Disaggregated      HTML     26K 
                Revenue (Details)                                                
27: R30         Distributions to Members (Details)                  HTML     29K 
15: R31         Line of Credit (Details)                            HTML     21K 
34: R32         Commitments and Contingencies (Details)             HTML     18K 
41: R33         Subsequent Events (Details)                         HTML     21K 
19: XML         IDEA XML File -- Filing Summary                      XML     76K 
30: EXCEL       IDEA Workbook of Financial Reports                  XLSX     33K 
 5: EX-101.INS  XBRL Instance -- ggro-20190930                       XML    799K 
 7: EX-101.CAL  XBRL Calculations -- ggro-20190930_cal               XML     85K 
 8: EX-101.DEF  XBRL Definitions -- ggro-20190930_def                XML     87K 
 9: EX-101.LAB  XBRL Labels -- ggro-20190930_lab                     XML    430K 
10: EX-101.PRE  XBRL Presentations -- ggro-20190930_pre              XML    287K 
 6: EX-101.SCH  XBRL Schema -- ggro-20190930                         XSD     66K 
33: ZIP         XBRL Zipped Folder -- 0001558370-19-010500-xbrl      Zip     51K 

 

ProGold Limited Liability Company

Balance Sheets

August 31

(In Thousands)

 

 

The Accompanying Notes are an Integral Part of These Financial Statements.

 

 

ProGold Limited Liability Company

Statements of Operations

For the Years Ended August 31

(In Thousands)

 

 

The Accompanying Notes are an Integral Part of These Financial Statements.

 

 

ProGold Limited Liability Company

Statements of Cash Flows

For the Years Ended August 31

(In Thousands)

 

 

The Accompanying Notes are an Integral Part of These Financial Statements.

 

 

ProGold Limited Liability Company

Statements of Changes in Members' Equity

For the Years Ended August 31

(In Thousands)

 

 

The Accompanying Notes are an Integral Part of These Financial Statements.

 

 

ProGold Limited Liability Company

 

Notes to the Financial Statements

 

(1)  NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

 

Organization

 

ProGold Limited Liability Company (ProGold) is organized as a Minnesota limited liability company. ProGold is owned by American Crystal Sugar Company (51%) and Golden Growers Cooperative (49%). Transfer of ownership in ProGold to another party not already a member is allowed only with the consent of the other Members and the plant’s lessee, Cargill, Incorporated. ProGold has been organized with a life of 50 years and its legal existence will terminate on July 13, 2044, absent a business continuation agreement.

 

Operating Lease

 

ProGold leases a corn wet milling facility to Cargill, Incorporated under an operating lease which runs through December 31, 2022 with an automatic one year extension if certain conditions are not met. Payments are to be received monthly under the lease. The operating lease revenue is recognized as earned ratably over the term of the lease and to the extent that amounts received exceed amounts earned, deferred revenue is recorded. Expenses (including depreciation and interest) are charged against such revenue as incurred. The lease contains provisions for increased payments to be received during the lease period related to the plant’s capital additions and also requires ProGold to pay at least $750,000 annually, on a calendar year basis, to fund infrastructure maintenance.

 

Included in the lease agreement, there is an option agreement allowing Cargill to purchase a 50% interest in ProGold from American Crystal Sugar Company. If this option is exercised, American Crystal Sugar Company also agrees to sell the remaining 1% interest to Golden Growers Cooperative, resulting in a 50/50 venture between Cargill and Golden Growers Cooperative.

 

Cash and Cash Equivalents

 

ProGold considers all highly liquid debt and equity instruments purchased with a maturity of three months or less to be cash equivalents. ProGold places its temporary cash investments with high-credit-quality financial institutions. At times, such investments may be in excess of the applicable insurance limit.

 

Property and Equipment Held for Lease

 

Property and equipment held for lease are stated at cost. Depreciation on assets placed in service is provided using the straight-line method over the estimated useful lives of the individual assets, ranging from 5 to 40 years.

 

Impairment of Long Lived Assets

 

ProGold reviews its property and equipment for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. An impairment loss is recorded when the sum of the future cash flows is less than the carrying amount of the asset. An impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. There were no impairment losses incurred for the years ended August 31, 2019 or 2018.

 

Related Parties

 

American Crystal Sugar Company and Golden Growers Cooperative are considered related parties for financial reporting purposes.

 

Income Taxes

 

ProGold is treated in a manner similar to a partnership for federal and state income tax purposes, based upon its current organization. Accordingly, the financial statements do not include any provision for income taxes.

 

Accounting Estimates

 

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date

of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Investments in CoBank, ACB

 

The investments in stock of CoBank, ACB are stated at cost, plus unredeemed patronage refunds received or estimated to be received in the form of capital stock.

 

Recently Issued Accounting Pronouncements

 

In February 2016, the FASB issued an update to the authoritative guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The guidance provided by this update becomes effective for ProGold in fiscal 2022. The effect on the Company’s financial statements has not been evaluated as of the issuance date.

 

(2)  LEASE WITH CARGILL, INCORPORATED:

 

Future minimum payments to be received under the lease are as follows:

 

 

 

(3)  CAPITAL EXPENDITURES AGREEMENT WITH CARGILL, INCORPORATED

 

ProGold entered into a Capital Expenditures Agreement with Cargill, Incorporated during fiscal 2014 associated with a project to replace certain equipment at the corn wet milling facility. During 2015, ProGold reimbursed Cargill, Incorporated $2.2 million for costs incurred for the project when it was completed. The agreement also provides that ProGold will receive monthly incremental lease payments from Cargill, Incorporated upon completion of the project equal to an amount necessary for the reimbursement amount together with interest to be fully amortized over a period of 12 years. The incremental lease payments total $229,000 per year and will continue during the term of the lease shown in Note 2, including any extension(s) of the lease term but not to exceed 12 years. This incremental lease payment is not included in the amounts in Note 2.

 

ProGold entered into Capital Expenditure Agreements with Cargill, Incorporated during fiscal 2019 associated with a project to replace the distributive control system at the corn wet milling facility. The agreement requires us to reimburse Cargill, Incorporated up to $8.3 million for the costs incurred upon completion. The agreement also provides that ProGold will receive monthly incremental lease payments from Cargill, Incorporated upon completion of the project equal to an amount necessary for the reimbursement amount together with interest to be fully amortized over a period of 15 years. This is expected to be completed during fiscal 2023.

 

ProGold entered into Capital Expenditure Agreements with Cargill, Incorporated during fiscal 2019 associated with a project to replace the fiber finish dryer at the corn wet milling facility. The agreement requires us to reimburse Cargill, Incorporated up to $1.8 million for the costs incurred upon completion. The agreement also provides that ProGold will receive monthly incremental lease payments from Cargill, Incorporated upon completion of the project equal to an amount necessary for the reimbursement amount together with interest to be fully amortized over a period of 10 years. This is expected to be completed during fiscal 2020.

 

(4)  RELATED PARTY TRANSACTIONS:

 

ProGold has an administrative services agreement with American Crystal Sugar Company. Amounts incurred under the terms of the American Crystal Sugar Company agreement totaled approximately $15,000 and $14,000 in the years ended August 31, 2019 and 2018, respectively.

 

(5)  OPERATING LEASES:

 

ProGold is a party to an operating lease for rail cars, which expires in December 2022. Cargill, Incorporated has assumed responsibility for the payments on the rail car lease for the duration of this lease.

 

(6)  DISTRIBUTIONS TO MEMBERS:

 

In 2008, ProGold began to make cash distributions to its members. The ProGold Board of Governors has authorized the monthly distribution of cash to the members through December 31, 2019, to the extent that the available cash balance exceeds $200,000.

 

(7)  ENVIRONMENTAL MATTERS:

 

ProGold 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 operating lease with Cargill, Incorporated provides that ProGold may be responsible for claims arising for occurrences prior to the execution of the original operating lease, December 1, 1997. ProGold believes that it was in substantial compliance with applicable environmental laws and regulations prior to that time. The operating lease also provides that Cargill, Incorporated operate the corn wet milling facility in compliance with all applicable federal and state environmental laws and regulations during the term of the lease.

 

(8)  INCOME TAXES:

 

ProGold conducts an annual analysis of its various tax positions, assessing the likelihood of those positions being upheld upon examination with relevant tax authorities. ProGold has determined that it has no unrecognized tax benefits. No interest or penalties are recognized in the statements of operations. ProGold is no longer subject to U.S. Federal or state income tax examinations by tax authorities for fiscal years 2015 and earlier.

 

(9)  SUBSEQUENT EVENTS:

 

ProGold has evaluated events through the date that the financial statements were available to be issued, October 3, 2019, for potential recognition or disclosure in the August 31, 2019 financial statements.

 

These notes are an integral part of the accompanying financial statements.