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

12/22/06  Advanced BioEnergy, LLC           425                    6:1.4M Advanced BioEnergy, LLC           Merrill Corp-MD/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 425         Amendment to Form 8-K                               HTML     33K 
 2: EX-10       Material Contract                                   HTML     48K 
 3: EX-23       Consent of Experts or Counsel                       HTML      7K 
 4: EX-99.1     Miscellaneous Exhibit                               HTML    310K 
 5: EX-99.2     Miscellaneous Exhibit                               HTML    229K 
 6: EX-99.3     Miscellaneous Exhibit                               HTML    247K 

Exhibit 99.3

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma consolidated statements of income for the year ended September 30, 2006 are based on the historical financial statements of Advanced BioEnergy and Heartland Grain Fuels.  The unaudited pro forma consolidated financial statements give effect to (a) the acquisition of Aventine’s and SDWG’s interests in Heartland Grain Fuels and Dakota Fuels, which closed on November 8, 2006 and is known as transaction #1, and (b) the acquisition of Heartland Producers’ interests in Heartland Grain Fuels and Dakota Fuels, which has not yet closed and is known as transaction #2, based on the assumptions and adjustments described in the accompanying notes to the unaudited pro forma combined condensed financial statements.  The unaudited pro forma consolidated financial statements have been prepared using the purchase method of accounting as if the transaction had been completed as of October 1, 2005 for purposes of the combined condensed statements of income.

The unaudited pro forma consolidated financial statements present the combination of historical financial statements of Advanced BioEnergy and Heartland Grain Fuels adjusted to give effect (a) to the issuance of $13.0 million of debt by Heartland Grain Fuels, (b) to the payment of cash distributions of $8,757,400 by Heartland Grain Fuels to its partners related to its 2006 earnings and (c) to the second closing under the Heartland transaction with Heartland Producers.  The unaudited pro forma consolidated financial statements were prepared using (1) the audited consolidated financial statements of Advanced BioEnergy for the year ended September 30, 2006 included in this prospectus, (2) the unaudited consolidated financial statements of Heartland Grain Fuels included in this prospectus for the nine month period ended September 30, 2006 and (3) the unaudited financial statements of Heartland Grain Fuels for the three months ended December 31, 2005, which are not included in this prospectus.

Since we issued 1,403,031 units to effect the initial closings under the Heartland transaction with SDWG and Aventine, and will issue 1,228,547 additional units to effect the second closing under the Heartland transaction with Heartland Producers, the business combination has been accounted for as an equity purchase.  As a result, the fair value of our units issued and outstanding as of the date of the transactions, along with debt assumed by our company and other transaction costs have been allocated to the underlying tangible and intangible assets and liabilities of Heartland Grain Fuels based on their respective fair market values, with any excess allocated to goodwill. The preliminary pro forma purchase price allocation was based on an estimate of the fair market value of the tangible and intangible assets and liabilities of Heartland Grain Fuels.  Certain assumptions have been made with respect to the fair market value of identifiable intangible assets as more fully described in the accompanying notes to the unaudited pro forma consolidated financial statements. As of the date of this filing, Advanced BioEnergy has commenced the appraisals necessary to arrive at the fair market value of the assets and liabilities of Heartland Grain Fuels and the related allocations of purchase price. Once the appraisals necessary to finalize the required purchase price allocation have been completed, the final allocation of purchase price will be determined.  The final purchase price allocation may be different than that reflected in the pro forma purchase price allocation, and this difference may be material.

The management of Advanced BioEnergy is implementing a plan to integrate the operations of Advanced BioEnergy and Heartland Grain Fuels.  Both companies are engaged in the biofuels business. As a result, our management expects to fully integrate the two businesses.  In connection with the plan to integrate the operations of the two companies, management anticipates that certain non-recurring charges, such as branding and signage costs, will be incurred in connection with this integration. Such charges are estimated to be between $150,000 and $250,000 as of the date of this filing.  Any such charge could affect the combined results of operations in the period in which such charges are recorded. The unaudited pro forma consolidated financial statements do not include the effects of the costs associated with any restructuring or integration activities resulting from the transaction. In addition, the unaudited

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pro forma consolidated financial statements do not include the realization of any cost savings from operating efficiencies, synergies or other restructurings resulting from the transaction.  The unaudited pro forma consolidated financial statements are not intended to represent or be indicative of the combined results of operations or financial condition of the companies that would have been reported had the transaction been completed as of the dates presented, and should not be taken as representative of the future consolidated results of operations or financial condition of the companies. The unaudited pro forma consolidated financial statements should be read in conjunction with the separate historical financial statements and accompanying notes of the companies included elsewhere in this prospectus.

Unaudited Pro Forma Consolidated Financial Information - Balance Sheet (condensed)

September 30, 2006

 

		Advanced  Bio  Energy,  LLC &  Subsidiaries			Heartland Grain Fuels,  L.P.			Transaction #1 Pro Forma Adjustments			Notes		Effect of  Transaction  #1  Advanced  BioEnergy,  LLC and  Heartland  Grain Fuels,  LP Pro  Forma			Transaction #2 Pro Forma  Adjustments			Notes		Advanced  BioEnergy,  LLC and  Heartland  Grain  Fuels, LP  Pro Forma
Assets		5
Current assets
Cash & cash equivalents		$	10,814,561		$	2,488,339		$	(26,159,524	)	B-1		$	143,376		$	—				$	143,376
								13,000,000			B-1
Accounts receivable		151,750			2,096,716			—					2,248,466			—					2,248,466
Prepaid expenses		130,518			25,189			—					155,707			—					155,707
Inventory		—			1,394,375			—					1,394,375			—					1,394,375
Total current assets		11,096,829			6,004,619			(13,159,5240		)			3,941,924			—					3,941,924
Property, plant & equipment, net		39,908,943			41,466,900			12,424,499			B-2		93,800,342			10,877,262			B-7		104,677,604
Other assets
Investment in unconsolidated affiliates		—			602,734			—					602,734			—					602,734
Cash for plant construction		32,500,000			—			—					32,500,000			—					32,500,000
Other assets		65,900			564,691			7,794,124			B-3		8,424,715			(7,794,124		)	B-8		630,591
Financing and deferred costs		1,219,736			—			—					1,219,736			—					1,219,736
Goodwill		—			—			16,941,363			B-2		16,941,363			14,217,589			B-7		31,158,952
Intangible		2,811,531			—			—					2,811,531			—					2,811,531
Total other assets		36,597,167			1,167,425			24,735,487					62,500,079			6,423,465					68,923,544
Total assets		$	87,602,939		$	48,638,944		$	24,000,462				$	160,242,345		$	17,300,727				$	177,543,072
Liabilities, partners’ & members’ equity
Current liabilities
Accounts payable and accrued expenses		$	16,052,671		$	3,308,573		$	—				$	19,361,244		$	—				$	19,361,244
Current portion of long term liabilities		—			3,000,000			—					3,000,000			—					3,000,000
Total current liabilities		16,052,671			6,308,573			—					22,361,244			—					22,361,244
Long-term liabilities		7,000,000			18,000,000			13,000,000			B-1		38,000,000			—					38,000,000
Minority Interest		—			—			7,270,213			B-4		7,270,213			(7,270,213		)	B-9		—
Members’ and partners’ equity
Partners’ capital		—			24,330,371			(24,330,371		)	B-5		—			—					—
Members’ capital		64,550,268						28,060,620			B-6		92,610,888			24,570,940			B-10		117,181,828
Total members’ and partners’ equity		64,550,268			24,330,371			3,730,249					92,610,888			24,570,940					117,181,828
Total liabilities, members’ and partners’ equity		$	87,602,939		$	48,638,944		$	24,000,462				$	160,242,345		$	17,300,727				$	177,543,072

 

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B-1                              Adjustment to recognize the cash consideration paid to complete the first step of the acquisition of Heartland Grain
Fuels L.P. (HGF), including the costs of the acquisition, and funding the escrow for the second closing

 

 

B-2                              Allocation of the purchase price of the first step of the acquisition of HGF

 

 

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		Total cash consideration			$		26,159,524
		Less equity distribution prior to purchase			(8,757,400				)
		Less funds held in escrow for second closing			(7,794,124				)
					9,608,000
		Issuance of 1,403,031 units at $20 per unit			28,060,620
		Total purchase price of 53.31518% interest in HGF			37,668,620
		Historical Equity of HGF			24,330,371
		Less Distribution prior to acquisition			(8,757,400				)
		Adjusted equity			15,572,971
		46.68482% minority interest			7,270,213
		Historical cost of assets			8,302,758
		Purchase price in excess of historical cost			$		29,365,862
		The preliminary allocation of the step up is as follows
		Property Plant and equipment			$		12,424,499
		Goodwill			16,941,363
					$		29,365,862
B-3		Record the escrowed funds as a deposit
B-4		Record the minority interest
B-5		Elimination of historical equity of HGF
B-6		Record the issuance of 1,403,031 units at $20/unit
B-7		Allocation of the purchase price of the second step of the acquisition of HGF
		Funds released from escrow				$ 7,794,124
		1,228,547 units at $20 per unit				24,570,940
		Total purchase price of 46.68482% interest in HGF				32,365,064
		Proforma minority interest				7,270,213
		Purchase price in excess of historical cost				25,094,851
		The preliminary allocation of the step up is as follows
		Property Plant and equipment				$		10,877,262
		Goodwill				14,217,589
						$		25,094,851
B-8		Reflect the release of the escrowed funds
B-9		Eliminate the minority interest
B-10		Record the issuance of 1,228,547 units at $20/unit

 

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Unaudited Pro Forma Consolidated Financial Information - Statements of Operations (condensed)
Twelve Months Ended September 30, 2006

		Advanced BioEnergy,  LLC &  Subsidiaries			Heartland Grain Fuels,  L.P.			Transaction  #1 Pro Forma Adjustments			Notes		Effect of  Transaction  #1 Advance  BioEnergy,  LLC and  Heartland  Grain Fuel,  LP Pro  Forma			Transaction  #2 Pro  Forma Adjustments					Advance  BioEnergy,  LLC and  Heartland  Grain Fuel, LP Pro  Forma
Sales Revenue
Ethanol		$	—		$	43,071,481		$	—				$	43,071,481		$	—				$	43,071,481
Distiller		—			3,728,580			—					3,728,580			—					3,728,580
Program payments		—			756,850			—					756,850			—					756,850
Total net revenues		—			47,556,911			—					47,556,911			—					47,556,911
Cost of revenue		—			34,611,422			869,715			A-1		35,481,137			571,056			A-1		36,052,193
Gross profit		—			12,945,489			(869,715		)			12,075,774			(571,056		)			11,504,718
General & administrative expenses		2,601,674			750,065			—					3,351,739			—					3,351,739
Income (loss) from operations		(2,601,674		)	12,195,424			(869,715		)			8,724,035			(571,056		)			8,152,979
Other income (expense)
Other income, including gains		12,000			237,721			—					249,721			—					249,721
Rent income		2,750			—			—					2,750			—					2,750
Interest income		1,517,738			—			—					1,517,738			—					1,517,738
Interest expense		(49,151		)	(1,029,657		)	(429,485		)	A-2		(1,508,293		)	(643,015		)	A-4		(2,151,308		)
Net income before minority interest		(1,118,337		)	11,403,488			(1,299,200		)			8,985,951			(1,214,071		)			7,771,880
Minority interest		—			—			(5,323,698		)	A-3		(5,323,698		)	5,323,698			A-5		—
Net income (loss)		$	(1,118,337	)	$	11,403,488		$	(6,622,898	)			$	3,662,253		$	4,109,627				$	7,771,880
Basic and diluted - Earnings (loss) per unit		$	(0.30	)									$	0.72							$	1.22
Weighted average number of units outstanding		3,717,635											5,120,666								6,349,213

 

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Notes:

 

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