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Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q/A

 


 

x      Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2010

 

Commission file number: 000-53957

 

Golden Growers Cooperative

(Exact name of registrant as specified in its charter)

 

Minnesota

 

27-1312571

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

112 Roberts Street North, Suite 111

Fargo, ND 58102

(Address of principal executive offices)

 

Telephone Number 701-281-0468

(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 o  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.

 

Large accelerated filer o

 

Accelerated filer o

 

 

 

Non-accelerated filer x
(Do not check if a smaller reporting company)

 

Smaller reporting company o

 

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 units outstanding of each of the issuer’s classes of units, as of the latest practicable date.

 

As of November 12, 2010 the Cooperative had 15,490,480 Units issued and outstanding.

 

 

 




Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

BALANCE SHEETS

SEPTEMBER 30, 2010 AND 2009 AND DECEMBER 31, 2009

 

(In Thousands)

 

 

 

SEPTEMBER 30,

 

DECEMBER 31,

 

 

 

2010

 

2009

 

2009

 

 

 

 

 

 

 

(Restated)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

3,073

 

$

46

 

3,293

 

Short-Term Investments

 

214

 

1,113

 

314

 

Accounts Receivable

 

 

 

22

 

Prepaid Expenses

 

1

 

1

 

 

 

 

 

 

 

 

 

 

Total Current Assets

 

3,288

 

1,160

 

3,629

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, net

 

9

 

14

 

12

 

 

 

 

 

 

 

 

 

Investment in ProGold Limited Liability Company

 

50,354

 

54,635

 

53,646

 

 

 

 

 

 

 

 

 

Total Assets

 

$

53,651

 

$

55,809

 

$

57,287

 

 

 

 

 

 

 

 

 

LIABILITIES AND MEMBERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts Payable

 

$

24

 

$

23

 

$

2

 

Accrued Liabilities

 

4

 

85

 

106

 

 

 

 

 

 

 

 

 

Total Current Liabilities

 

28

 

108

 

108

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITY

 

149

 

139

 

132

 

 

 

 

 

 

 

 

 

MEMBERS’ EQUITY

 

 

 

 

 

 

 

Members’ Equity

 

 

 

 

 

 

 

Membership Units, Authorized 60,000,000 Units, Issued and Outstanding 15,490,480 as of September 30, 2010, 15,458,987 as of September 30, 2009, and December 31, 2009

 

53,623

 

55,701

 

57,179

 

Accumulated Other Comprehensive Loss

 

(149

)

(139

)

(132

)

 

 

 

 

 

 

 

 

Total Members’ Equity

 

53,474

 

55,562

 

57,047

 

 

 

 

 

 

 

 

 

Total Liabilities and Members’ Equity

 

$

53,651

 

$

55,809

 

$

57,287

 

 

See Accountant’s Review Report and Notes to Financial Statements

 

1



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

STATEMENTS OF OPERATIONS

FOR THE NINE MONTH PERIODS ENDED AND THE THREE MONTH PERIODS ENDED

SEPTEMBER 30, 2010 AND 2009

 

(In Thousands, Except Per Share Amounts)

 

 

 

FOR THE 3 MONTHS 
ENDED SEPTEMBER 30,

 

FOR THE 9 MONTHS 
ENDED SEPTEMBER 30,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Corn Revenue

 

$

11,477

 

$

14,585

 

$

41,255

 

$

27,209

 

Corn Expense

 

(11,478

)

(14,619

)

(41,333

)

(27,283

)

Net Income from ProGold Limited Liability Company

 

1,496

 

1,659

 

4,755

 

4,478

 

General & Administrative Expenses

 

(195

)

(390

)

(656

)

(874

)

 

 

 

 

 

 

 

 

 

 

Net Income from Operations

 

1,300

 

1,235

 

4,021

 

3,530

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

5

 

13

 

26

 

28

 

 

 

 

 

 

 

 

 

 

 

Net Income Before Income Tax

 

1,305

 

1,248

 

4,047

 

3,558

 

 

 

 

 

 

 

 

 

 

 

Income Tax Provision

 

 

44

 

 

44

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

1,305

 

$

1,204

 

$

4,047

 

$

3,514

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Units Issued and Outstanding

 

15,490,480

 

15,458,987

 

15,482,607

 

15,458,987

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share/Membership Unit Primary and Fully Diluted

 

$

0.08

 

$

0.08

 

$

0.26

 

$

0.23

 

 

See Accountant’s Review Report and Notes to Financial Statements

 

2



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

STATEMENTS OF CHANGES IN MEMBERS’ EQUITY AND COMPREHENSIVE INCOME

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2010 AND 2009

 

(In Thousands)

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

Total

 

Annual

 

 

 

Class A

 

Class B

 

Additional

 

Retained

 

Comprehensive

 

Members’

 

Members’

 

Comprehensive

 

 

 

Stock

 

Stock

 

Paid-in Capital

 

Earnings

 

Income

 

Equity

 

Equity

 

Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, DECEMBER 31, 2008 (Restated)

 

$

247

 

$

53,334

 

$

2,687

 

$

7,459

 

$

(160

)

$

 

$

63,567

 

 

 

Net income

 

 

 

 

 

 

3,514

 

3,514

 

$

3,514

 

Member distributions

 

 

 

 

 

 

(11,293

)

(11,293

)

 

Pension liability adjustment

 

 

 

 

 

21

 

 

21

 

21

 

Cooperative conversion

 

 

(53,334

)

(2,687

)

(7,459

)

 

63,480

 

 

 

Redemption of stock

 

(247

)

 

 

 

 

 

(247

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, SEPTEMBER 30, 2009

 

$

 

$

 

$

 

$

 

$

(139

)

$

55,701

 

$

55,562

 

$

3,535

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, DECEMBER 31, 2009 (Restated)

 

$

 

$

 

$

 

$

 

$

(132

)

$

57,179

 

$

57,047

 

 

 

Net income

 

 

 

 

 

 

4,047

 

4,047

 

$

4,047

 

Issuance of membership units

 

 

 

 

 

 

141

 

141

 

 

Pension liability adjustment

 

 

 

 

 

(17

)

 

(17

)

(17

)

Member distributions

 

 

 

 

 

 

(7,744

)

(7,744

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, SEPTEMBER 30, 2010

 

$

 

$

 

$

 

$

 

$

(149

)

$

53,623

 

$

53,474

 

$

4,030

 

 

See Accountant’s Review Report and Notes to Financial Statements

 

3



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2010 AND 2009

 

(In Thousands)

 

 

 

FOR THE 9 MONTHS

 

 

 

ENDED SEPEMBER 30,

 

 

 

2010

 

2009

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net Income

 

$

4,047

 

$

3,514

 

Net (Income) from ProGold Limited Liability Company

 

(4,755

)

(4,478

)

Depreciation

 

3

 

5

 

Changes in assets and liabilities

 

 

 

 

 

Accounts receivable

 

22

 

51

 

Prepaid expenses

 

(1

)

 

Accounts payable

 

22

 

(34

)

Accrued liabilities

 

39

 

(71

)

 

 

 

 

 

 

Net cash used in operating activities

 

(623

)

(1,013

)

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

Proceeds from sale of short-term investments

 

100

 

4,902

 

Purchase of furniture and equipment

 

 

(15

)

Distribution received from ProGold LLC

 

8,047

 

7,712

 

 

 

 

 

 

 

Net cash provided by investing activities

 

8,147

 

12,599

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

Net redemptions of stock

 

 

(247

)

Member distributions paid

 

(7,744

)

(11,293

)

 

 

 

 

 

 

Net cash used by financing activities

 

(7,744

)

(11,540

)

 

 

 

 

 

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 

(220

)

46

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

3,293

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

3,073

 

$

46

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

 

 

 

 

Cash paid (refund received) for income taxes

 

$

(24

)

$

44

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITY

 

 

 

 

 

Issuance of Membership Units in Satisfaction of Deferred Compensation Obligation

 

$

141

 

$

 

 

See Accountant’s Review Report and Notes to Financial Statements

 

4



Table of Contents

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors

Golden Growers Cooperative

Fargo, North Dakota

 

We have reviewed the accompanying balance sheets of Golden Growers Cooperative as of September 30, 2010 and 2009, and the related statements of operations, changes in members’ equity and comprehensive income and cash flows for the periods then ended.  These financial statements are the responsibility of the company’s management.

 

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

 

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

 

 

Fargo, North Dakota

November 5, 2010

 

5



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010 AND 2009

 

NOTE 1 — NATURE OF OPERATIONS

 

Organization - Golden Growers Cooperative was initially organized as a North Dakota member-owned cooperative incorporated on January 19, 1994 (“GG-ND”).  GG-ND and two other partners, one of whom was American Crystal Sugar Company (“ACSC”) entered into a joint venture that formed ProGold Limited Liability Company, a Minnesota limited liability company (“ProGold”) which designed and constructed a corn wet-milling facility in Wahpeton, North Dakota (the “Facility”). Under the joint venture, GG-ND (and indirectly its members) had the right and obligation to deliver corn to be processed at the Facility.  After it was constructed and operated briefly by its members, the Facility was leased to Cargill Incorporated (“Cargill”) who continues to operate the Facility under a lease that runs through December 31, 2017.  Golden Growers Cooperative and ACSC are the current members of ProGold, with Golden Growers Cooperative holding a 49% interest and ACSC holding the remaining 51% interest.

 

On July 29, 2009 GG-ND formed a wholly owned cooperative subsidiary in the state of Minnesota (GG-MN), organized under Minnesota Statutes chapter 308A, solely for the purpose of reincorporating into the state of Minnesota.  On September 1, 2009, GG-ND merged into GG-MN and reincorporated into the state of Minnesota.  Immediately after the merger, GG-MN statutorily converted into a cooperative association governed under Minnesota Statutes 308B.  As a result of its reincorporation and reorganization Golden Growers — North Dakota, a North Dakota cooperative association historically taxed as a tax-exempt cooperative under Subchapter T of the Internal Revenue Code, became a Golden Growers Cooperative, a Minnesota cooperative association governed by Minnesota Statutes chapter 308B as a cooperative for state law purposes but taxed as a partnership under Subchapter K of the Internal Review Code for tax purposes.  Golden Growers Cooperative succeeded to the business of Golden Growers — North Dakota and except for changes to the structure and operations as a result of the reincorporation and statutory conversion, continues to operate the business of Golden Growers — North Dakota.

 

As part of the Conversion, GG-ND’s members exchanged their shares of Class A Common Voting Membership Stock and Class B Non-Voting Equity Stock for identical and equal shares of such stock in GG-MN.  Each member’s single share of Class A Common Voting Membership Stock was redeemed for $150 and each member received membership units in GG-MN equal to the number of shares of Class B Non-Voting Equity Stock each member held in GG-ND prior to the Merger.

 

Prior to September 1, 2009, ownership of membership stock, which signified membership in the Cooperative, was restricted to producers of agricultural products.  The ownership of equity stock was restricted to members of the Cooperative. Preferred stock could be held by persons who were not members of the Cooperative.  At August 31, 2009, 2008 and 2007, the Cooperative had 10,000 shares of non-voting, $1,000 par-value preferred stock authorized, of which none were issued or outstanding.  Equity requirements, as determined by the board of directors, could be retained from amounts due to patrons and credited to members’ equity in the form of unit retains or allocated patronage.

 

The Cooperative reserved the right to acquire any of its stock offered for sale and the right to recall the stock of any member. In the event this right was exercised, the consideration paid for such stock was 25% of its book value.

 

See Accountant’s Review Report

 

6



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010 AND 2009

 

Beginning September 1, 2009, ownership of membership units is available to any person or entity residing in the Unites States of America.  Net proceeds or losses will be allocated to members on the basis of their patronage of the Cooperative.

 

See Accountant’s Review Report

 

7



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010 AND 2009

 

In connection with the Conversion, the Cooperative changed its fiscal year end to December 31.  The results of operations for the nine month periods ended September 30, 2010 and 2009 are not necessarily indicative of results that may be achieved in a twelve month period.

 

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation - In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine-month period ended September 30, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.  The information contained in the balance sheet as of December 31, 2009 was derived from the audited financial statements for Golden Growers Cooperative (the “Cooperative”) for the period then ended.

 

Investments — The Cooperative’s investment securities are held to maturity and recorded at amortized cost.  The Cooperative’s investment in ProGold is recorded at historical cost plus its pro-rata share of ProGold’s net income and additional paid-in capital less distributions received from ProGold. Unrealized gains or losses are recorded in accumulated other comprehensive income within members’ equity. Gains and losses are determined using the specific identification method.

 

Cash and Cash Equivalents — The Cooperative considers all demand accounts to be cash equivalents and overnight sweep accounts.  Cash equivalents do not include money market accounts maintained by the Cooperative’s investment managers.  Cash equivalents do not include any investment with a stated maturity date, regardless of the term to maturity.

 

Income Taxes — Beginning September 1, 2009, Golden Growers Cooperative is taxed as a limited liability company under Subchapter K of the Internal Revenue Code.  As such, the Cooperative will generally not be subject to income taxes. Instead, net income will be reported by its members who will be responsible for any income taxes which may be due.  Prior to September 1, 2009, Golden Growers Cooperative was an exempt cooperative for federal income tax purposes.  As such, the cooperative was generally not subject to income taxes. Instead, net proceeds were allocated to the Cooperative’s patrons who were responsible for any income taxes which may have been due.

 

Property and Equipment — Property and equipment are stated at cost.  Depreciation on assets placed in service is provided using the straight-line method over estimated useful lives ranging from 5 to 10 years.

 

Accounting Estimates — The preparation of the financial statements in conformity with generally accepted accounting principles 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.

 

Revenue Recognition — Prior to 2010, the Cooperative recognized corn revenue in the amount equal to what Cargill, Incorporated paid Golden Growers Cooperative members for corn. The Cooperative recognized corn expense based upon the amount determined by the Cooperative’s board of directors to be paid to its members.  During 2009, 2008 and 2007 the amount determined by the board as the corn expense was equal to the amount

 

See Accountant’s Review Report

 

8



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010 AND 2009

 

paid by Cargill.  The Cooperative recognizes corn expense for costs incurred to Cargill in connection with corn procurement services.

 

Starting on January 1, 2010, the board will no longer determine the corn expense.  The Cooperative’s members are contractually obligated to annually deliver corn to the Cooperative by either Method A or Method B or a combination of both.  Under Method A, a member is required to physically deliver corn to the cooperative and under Method B a member appoints the cooperative as its agent to arrange for the acquisition and delivery of corn on the member’s behalf.  For an annual fee of $92,000 paid quarterly, the Cooperative contractually appoints Cargill as its agent to arrange for the delivery of the corn by its members who elect to deliver corn using Method A and to acquire corn on its behalf for its members who elect to deliver corn using Method B.  The price per bushel paid to the member who elects to deliver corn using Method B is equal to the price per bushel paid by Cargill to acquire the corn as the Cooperative’s agent.  Members who deliver corn under Method A are paid the market price or contracted price for their corn at the time of delivery.  The Cooperative pays members who deliver corn under Method A an incentive payment of $.05 per bushel while members who elect Method B to deliver corn pay the Cooperative a $.02 per bushel agency fee for the cost of having the Cooperative deliver corn on their behalf.  The board has the discretion to change the incentive fee and the agency fee based on the Cooperative’s corn delivery needs.  The incentive fee and agency fee are a component of Corn Expense.

 

With respect to all Method A corn that is delivered, Cargill pays the aggregate purchase price for corn purchased from the Cooperative’s members to the Cooperative and then, on the Cooperative’s behalf, makes individual payments for corn directly to its members.  If a Method A member fails to fully satisfy the corn delivery requirement, Cargill purchases replacement corn for which the Cooperative reimburses Cargill the amount by which the underlying contracted corn price is less than the price of buying the replacement corn that was due on the delivery date.  The Method A member who fails to deliver corn is then invoiced by the Cooperative for the price of the corn.

 

Based on what is to be delivered by its members using Method A, Cargill then purchases the remainder of the corn to be delivered by the Cooperative on behalf of its Method B delivering members. Because Cargill purchases the corn on the Cooperative’s behalf of Method B delivering members, the purchase price for the corn that would be paid to the Cooperative’s members if they actually delivered the corn offsets against the payment to be made by the Cooperative to Cargill for the cost to purchase the corn, thus no payment is made from Cargill to the Cooperative for corn delivered using Method B.  The Cooperative has determined Corn Revenue and Expense for Method B deliveries based on the average quarterly cost per bushel paid by Cargill to the Cooperative’s members for Method A quarterly deliveries.

 

Concentrations - Several times during the year, the Cooperative maintained a cash balance in excess of the Federal Deposit Insurance Corporation (“FDIC”) limits.  At September 30, 2010, the Cooperative’s cash balance exceeded the FDIC insurance limits by approximately $2.8 million.

 

Fair Value Measurements - The Cooperative has determined the fair value of certain assets and liabilities in accordance with the provisions of Accounting Standards Codification (“ASC”) 820-10, which provides a framework for measuring fair value under generally accepted accounting principles

 

See Accountant’s Review Report

 

9



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010 AND 2009

 

ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  ASC 820-10 requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs.  ASC 820-10 also establishes a fair value hierarchy, which prioritizes the valuation inputs into three broad levels.

 

Level 1 inputs consist of quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.  Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the related asset or liability.  Level 3 inputs are unobservable inputs related to the asset or liability.

 

Restatement of Previously Issued Financial Statements - The financial statements for the periods ended December 31, 2009 and 2008 have been restated to report the Cooperative’s pension benefit obligation and related disclosures in connection with the Cooperative’s defined benefit pension plan.  The effect of this restatement is to record a non-current liability of $132,000 and a reduction to equity of $132,000 as of December 31, 2009, and a non-current liability of $160,000 and a reduction to equity of $160,000 as of December 31, 2008.

 

The above restatements had no effect on previously reported net income for any of the periods presented hereunder.

 

See Accountant’s Review Report

 

10



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010 AND 2009

 

NOTE 3 — PROGOLD LIMITED LIABILITY COMPANY

 

The Cooperative has a 49% ownership interest in ProGold Limited Liability Company.  Following is summary financial information for ProGold LLC is as follows (in thousands):

 

 

 

September 30,

 

December 31,

 

 

 

2010

 

2009

 

2009

 

 

 

 

 

 

 

 

 

Current Assets

 

$

          153

 

$

          162

 

$

          146

 

Long-Term Assets

 

       105,525

 

       114,653

 

       112,537

 

 

 

 

 

 

 

 

 

Total Assets

 

$

    105,678

 

$

    114,815

 

$

    112,683

 

 

 

 

 

 

 

 

 

Current Liabilities

 

$

          414

 

$

          414

 

$

          401

 

Long-Term Liabilities

 

          2,500

 

          2,900

 

          2,800

 

 

 

 

 

 

 

 

 

Total Liabilities

 

          2,914

 

          3,314

 

          3,201

 

 

 

 

 

 

 

 

 

Members’ Equity

 

       102,764

 

       111,501

 

       109,482

 

 

 

 

 

 

 

 

 

Total Liabilities and Members’ Equity

 

$

    105,678

 

$

    114,815

 

$

    112,683

 

 

 

 

 

 

 

 

 

Rent Revenue on Operating Lease

 

$

      18,258

 

$

      17,874

 

$

       8,310

 

Expenses

 

          8,554

 

          8,734

 

          3,821

 

 

 

 

 

 

 

 

 

Net Income

 

$

       9,704

 

$

       9,140

 

$

       4,489

 

 

See Accountant’s Review Report

 

11



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010 AND 2009

 

NOTE 4 — INVESTMENTS

 

The Cooperative has determined fair value of its investments held to maturity based on Level 1 inputs.

 

The Cooperative’s investments held to maturity are as follows as of September 30, 2010 and 2009 and December 31, 2009 (in thousands):

 

 

 

 

 

Gross

 

Gross

 

 

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

 

 

 

Cost

 

Gains

 

Losses

 

Value

 

September 30, 2010:

 

 

 

 

 

 

 

 

 

Money Market & CD’s

 

$

214

 

$

 

$

 

$

214

 

 

 

 

 

 

 

 

 

 

 

September 30, 2009:

 

 

 

 

 

 

 

 

 

Money Market & CD’s

 

$

1,113

 

$

 

$

 

$

1,113

 

 

 

 

 

 

 

 

 

 

 

December 31, 2009:

 

 

 

 

 

 

 

 

 

Mutual Funds

 

$

104

 

$

 

$

 

$

104

 

Money Market & CD’s

 

210

 

 

 

210

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 314

 

$

 

$

 

$

314

 

 

NOTE 5 — LINE OF CREDIT

 

The Cooperative established a $1,000,000 line of credit with a variable interest rate based on the prime rate maturing July 16, 2011. The line of credit is secured by business assets.  At September 30, 2010 and 2009 the Cooperative had no outstanding balance on the line of credit.

 

NOTE 6 — INCOME TAXES

 

During the period ended December 31, 2009, the Cooperative adopted the provisions of ASC 740-10 related to accounting for uncertainty in income taxes.  The implementation of this standard had no impact on the financial statements.

 

The Cooperative had no unrecognized tax benefits on September 30, 2010.  No interest or penalties are recognized in the statements of operations or in the balance sheets.  The Cooperative is no longer subject to U.S. Federal and State income tax examinations by tax authorities for fiscal years 2005 and earlier.

 

The Cooperative recognized income tax expense totaling $44,000 and $-0- for the periods ended September 30, 2010 and 2009.  In connection with the Conversion, the Cooperative realized $35 million of regular tax net operating loss carryforwards, and has no regular tax net operating loss carryforwards as of September 30, 2010.

 

See Accountant’s Review Report

 

12



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010 AND 2009

 

NOTE 7 — EMPLOYEE BENEFIT PLANS

 

Pension Plan — The Cooperative sponsors a defined benefit pension plan for employees that meet eligibility requirements of age and length of service.  Presently, two employees are eligible to participate in the plan.  The plan provides for vesting after 5 years of service with benefits for early retirement, normal retirement and disability or death.

 

As of September 30, 2010, the pension plans were funded as required by the funding standards set forth by the Employee Retirement Income Security Act (ERISA).

 

The Cooperative’s Compensation Committee has the responsibility of managing the operations and administration of the Cooperative’s retirement plans.  The Cooperative has an investment policy that establishes target asset allocations to reduce the risk of large losses.  Asset classes are diversified to reduce risk, and equity exposure is limited to 75% of the total portfolio value.  The stated goal is for each component of the plan to earn a rate of return greater than its corresponding benchmark.  The return objective of the Plan is to achieve a minimum average total rate of return of four percentage points (4.0%) above the rate of inflation as measured by the Consumer Price Index.  The real rate of return goal assumes a real rate of return for equities of 10.0% and a real rate of return for fixed income of 4.0%.

 

The assumptions used in the measurement of the Cooperative’s benefit obligations are shown below:

 

 

 

2010

 

2009

 

 

 

 

 

 

 

Discount Rate

 

7.00

%

7.00

%

Expected Return on Plan Assets

 

8.50

%

8.50

%

Rate of Compensation Increase

 

4.67

%

4.67

%

 

The following schedule reflects the expected pension benefit payments during each of the next five years and the aggregate for the following five years (in thousands):

 

 

 

Expected

 

 

 

Benefit

 

 

 

Payments

 

 

 

 

 

2010

 

$

 

2011

 

 

2012

 

 

2013

 

 

2014

 

 

2015-2019

 

439

 

 

 

 

 

Total

 

$

439

 

 

The Cooperative expects to make contributions of approximately $31,000 to the defined benefit pension plans during the next fiscal year.

 

See Accountant’s Review Report

 

13



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010 AND 2009

 

The following schedules provide the components of the Net Periodic Pension Costs for the periods ended December 31, 2009, September 30, 2010 and 2009 (in thousands):

 

 

 

December 31,

 

September 30,

 

September 30,

 

 

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

Service Cost

 

$

11

 

$

25

 

$

27

 

Interest Cost

 

9

 

21

 

20

 

Expected Return on Plan Assets

 

(7

)

(19

)

(18

)

Amortization of Net (Gain) Loss

 

4

 

7

 

7

 

 

 

 

 

 

 

 

 

Net Periodic Pension Cost

 

$

17

 

$

34

 

$

36

 

 

The following schedules set forth a reconciliation of the changes in the plan’s benefit obligation and fair value of assets for the periods ending December 31, 2009, September 30, 2010 and 2009 and a statement of the funded status and amounts recognized in the Balance Sheets and Accumulated Other Comprehensive Income (Loss) as of December 31, 2009, September 30, 2010 and 2009 (in thousands):

 

 

 

December 31,

 

September 30,

 

September 30,

 

 

 

2009

 

2010

 

2009

 

Change in Benefit Obligation

 

 

 

 

 

 

 

Obligation at the Beginning of the Period

 

$

390

 

$

409

 

$

359

 

Service Cost

 

11

 

25

 

27

 

Interest Cost

 

9

 

21

 

20

 

Actuarial (Gain) Loss

 

(1

)

 

(11

)

Benefits Paid

 

 

 

 

 

 

 

 

 

 

 

 

Obligation at the End of the Period

 

$

409

 

$

455

 

$

395

 

 

 

 

 

 

 

 

 

Change in Plan Assets

 

 

 

 

 

 

 

Fair Value at the Beginning of the Period

 

$

246

 

$

277

 

$

199

 

Actual Returns on Plan Assets

 

21

 

6

 

33

 

Employer Contributions

 

10

 

23

 

24

 

Benefits Paid

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value at the End of the Period

 

$

277

 

$

306

 

$

256

 

 

 

 

 

 

 

 

 

Funded Status

 

 

 

 

 

 

 

Funded Status as of the Period Ended

 

$

(132

)

$

(149

)

$

(139

)

 

 

 

 

 

 

 

 

Net Amount Recognized

 

$

(132

)

$

(149

)

$

(139

)

 

See Accountant’s Review Report

 

14



Table of Contents

 

GOLDEN GROWERS COOPERATIVE

 

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2010 AND 2009

 

 

 

December 31,

 

September 30,

 

September 30,

 

 

 

2009

 

2010

 

2009

 

Amounts Recognized in the Balance Sheets

 

 

 

 

 

 

 

Noncurrent Assets

 

$

 

$

 

$

 

Current Liabilities

 

 

 

 

Noncurrent Liabilities

 

(132

)

(149

)

(139

)

 

 

 

 

 

 

 

 

Net Amount Recognized

 

$

(132

)

$

(149

)

$

(139

)

 

 

 

 

 

 

 

 

Accumulated Gain (Loss) Recognized in Accumulated Other Comprehensive Income

 

 

 

 

 

 

 

Accumulated Gain (Loss) Beginning of the Period

 

$

(144

)

$

(132

)

$

(160

)

Recognized in Periodic Cost

 

4

 

7

 

7

 

Amount Arising During the Period

 

8

 

(24

)

14

 

 

 

 

 

 

 

 

 

Accumulated Gain (Loss) End of the Period

 

$

(132

)

$

(149

)

$

(139

)

 

The estimated amount that will be amortized from Accumulated Other Comprehensive Income (Loss) at September 30, 2010 into net periodic benefit cost in fiscal 2010 is as follows (in thousands):

 

Prior Service (Cost)

 

$

 

Accumulated Gain (Loss)

 

(9

)

 

 

 

 

Total

 

$

(9

)

 

The accumulated pension benefit obligation was $132,000, $149,000 and $139,000 as of December 31, 2009, September 30, 2010 and 2009, respectively.

 

401(k) Plan - The Cooperative has a 401(k) plan that covers employees that meet eligibility requirements.  The Cooperative’s contributions to the plan totaled $5,000 and $5,000 for the periods ended September 30, 2010 and 2009 respectively.

 

Deferred Compensation Plan — The Cooperative terminated its non-qualified deferred compensation plan with a key employee during June 2010.  In connection therewith, the Cooperative issued 31,493 membership units to the key employee.  The Cooperative recognized expenses totaling $36,000 and $36,000 for the periods ended September 30, 2010 and 2009 respectively.

 

NOTE 8 — COMMITMENTS AND CONTINGENCIES

 

The Cooperative contracted with Cargill, Incorporated in connection with the procurement of corn which includes payments of $92,000 annually and terminates December 31, 2017.

 

NOTE 9 — SUBSEQUENT EVENTS

 

Management has reviewed subsequent events through November 5, 2010, the date to which the financial statements were available to be issued.

 

See Accountant’s Review Report

 

15



Table of Contents

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

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 Cooperative’s actual results could differ materially from those indicated.  See the discussion of “Risk Factors” in the Cooperative’s Registration Statement on Form 10.

 

Overview

 

Golden Growers Cooperative is a value added agricultural cooperative association governed under Minnesota Statutes Chapter 308B owned by 1,613 members in the business of providing value to our members by facilitating their delivery of corn to the corn wet-milling facility owned by ProGold, a Minnesota limited liability company in which the Cooperative owns a 49% membership interest.  ProGold leases its corn wet milling facility to Cargill Incorporated who uses the facility to process corn into high fructose corn syrup.  We accomplish our business on behalf of our members through our contract relationships with all of the parties involved in the ownership and operation of the facility.  From an income production perspective our membership interest in ProGold is our primary asset that, in addition to giving us the right to receive distributions from ProGold, also provides our members with additional value for the delivery of their corn for processing.  Annually we are required to deliver approximately 15,490,480 bushels of corn to Cargill for processing at the ProGold facility.

 

Ownership of our Membership units requires our members to deliver corn for processing in proportion to the number of units they hold. A member is required to deliver one bushel of corn for each of our units held by the member.  Currently 15,490,480 of our units are issued and outstanding.  Income and losses are allocated to our members based on the volume of corn they deliver. Subject to certain limitations, as long as a member patronizes the Cooperative by delivering corn equal to the number of units held by the member, the member will be allocated a corresponding portion of our income.  In this way, we continue to operate on a cooperative basis.

 

To hold our units a member is required to execute a Uniform Member Agreement that obligates the member to deliver corn to us and an Annual Delivery Agreement by which each member annually elects the method the member would like to use to deliver corn — either Method A or Method B, or a combination of both.  Under Method A, a member is required to physically deliver corn to us either at the facility or another location reasonably designated by us.  Under Method B, a member appoints us as its agent to arrange for the acquisition and delivery of corn on the member’s behalf.  We appoint Cargill as our agent to arrange for the delivery of the corn by our members who elect to deliver corn using Method A, and we appoint Cargill as our agent to acquire corn on our behalf for our members who elect to deliver corn using Method B.  If a member elects to deliver corn using Method B, the price per bushel paid to the member is equal to the price per bushel paid by Cargill to acquire the corn as our agent.  Members who deliver corn under Method A are paid the market price or contracted price for their corn at the time of delivery.  Members who deliver corn under Method A receive from the Cooperative an incentive payment of $.05 per bushel on the corn that they deliver while members who elect Method B to deliver corn pay to the Cooperative a $.02 per bushel agency fee for the cost of having us deliver corn on their behalf.  The incentive payment for Method A deliveries and the agency fee for Method B deliveries are subject to annual adjustment at the sole discretion of our Board of Directors.

 

Our Method A member directly contracts with Cargill for the contract price agreed upon for the corn or, in the absence of an agreed upon price, the market price per bushel for corn delivered on the day on which the corn is delivered and accepted at the facility.  With respect to all Method A corn that is delivered, Cargill pays the aggregate purchase price for corn purchased from our members to us, and then, on our behalf, makes individual payments for corn directly to our members.  In the event a Method A

 

16



Table of Contents

 

member delivers more than its delivery commitment to Cargill, any corn delivered in excess of that commitment is handled as a direct sale of corn to Cargill and is priced at the current closing delivery corn price established by Cargill at the facility on the day it is unloaded.  In the event a Method A member delivers less than its committed amount of corn to Cargill, the quantity of the shortfall is then purchased and delivered by Cargill on our behalf, but this purchased corn is not credited to the Method A member’s account.  If a Method A member fails to fully satisfy the corn delivery requirement, Cargill purchases replacement corn for which we reimburse Cargill the amount by which the underlying contracted corn price is less than the price of buying the replacement corn that was due on the delivery date.  The Method A member who fails to deliver corn is then invoiced for the price of the corn.  In addition, if a Method A member fails to deliver all of the corn it was obligated to deliver, that member’s allocation of our profit or losses and any cash distributions is proportionately reduced and we may terminate the member’s membership.

 

Results of Operations

 

Due to our change in domicile and conversion from a Minnesota 308A cooperative to a Minnesota 308B cooperative association, our fiscal year end changed from August 31 to December 31 resulting in a four-month fiscal year period ended December 31, 2009.  Comparisons to our current quarterly information are derived from our historic financial information from our fiscal years that ended on August 31.

 

Comparison of the Nine Months Ended September 30, 2010 and September 30, 2009

 

Revenues.  The Cooperative derives revenue from two sources:  our operations related to facilitating the delivery of our members’ corn, and from the income derived from our ownership interest in ProGold.  Our corn delivery operations generate revenue to the Cooperative equal to the value of the corn that is delivered to Cargill by our members. The Cooperative recognizes expense equal to this same amount which results in our corn delivery operations being revenue neutral to the Cooperative, except for revenue from our Method B agency fee and expenses related to our Method A incentive payments, required licensing and bonding expenses, and our service fee paid to Cargill. During the nine months ended September 30, 2010, the Cooperative sold approximately 11.7 million bushels of corn compared to 4.4 million bushels of corn sold during the nine months ended September 30, 2009.  During the nine months ended September 30, 2010 and 2009, the Cooperative recognized corn revenue of $41,255,000 and $27,209,000 respectively, an increase of 52% due primarily to an increase in the number of bushels of corn sold in 2010 compared to 2009 offset by a decrease in the selling price per bushel in 2010 compared to 2009.  The Cooperative recognized corn expense of $41,333,000 and $27,283,000 in 2010 and 2009 respectively, a increase of 52% due primarily to an increase in the number of bushels purchased offset by a decrease in the cost per bushel of corn. During the nine month period ended September 30 2010, our members delivered to Cargill for processing at the facility 3,459,482 bushels of corn using Method A and 8,294,643 bushels of corn using Method B resulting in incentive fee expense of $172,974 and agency fee income of $165,892 for this period.  The Cooperative did not pay an incentive fee for Method A delivery prior to its reorganization into a 308B cooperative association effective September 1, 2009 and all deliveries between September 1, 2009 and December 31, 2009 were deemed to be delivered via Method B with the agency fee waived.  During the nine month periods ended September 30, 2010 and 2009, we recognized expense of $69,000 and $72,000, respectively, in connection with costs incurred to Cargill in connection with our corn delivery operation.

 

The Cooperative derived income from ProGold for the nine month period ended September 30, 2010, of $4,755,000 an increase of $277,000 or 6% as compared to the nine month period ended September 30, 2009.

 

17



Table of Contents

 

General and Administrative Expenses. The Cooperative’s general and administrative expenses include salaries and benefits, professional fees and fees paid to our board of directors. Our general and administrative expenses for the nine month period year ended September 30, 2010, was $656,000 a decrease of $218,000 or 25% compared to the nine month period ended September 30, 2009, which was primarily the result of decreased  costs incurred in connection with the cooperative conversion.

 

Interest Income.  Interest income for the nine month period ended September 30, 2010, was $26,000 compared to $28,000 for the nine month period ended September 30, 2009 due primarily to decreased cash reserve and investment balances compared to 2009.

 

Comparison of the Three Months Ended September 30, 2010 and September 30, 2009

 

Revenues.  During the three months ended September 30, 2010 and 2009, the Cooperative sold approximately 3.4 million bushels of corn compared to 2.1 million bushels of corn sold during the three months ended September 30, 2009.  During the three months ended September 30, 2010 and 2009, the Cooperative recognized corn revenue of $11,477,000 and $14,585,000 respectively, with the decrease due to a decrease in the selling price per bushel of corn.  During the three month period ended September 30, 2010, our members delivered to Cargill for processing at the facility 649,999 bushels of corn using Method A and 2,764,881 bushels of corn using Method B resulting in incentive fee expense of $32,500 and agency fee income of $55,298 for this period.  The Cooperative did not pay an incentive fee for Method A delivery prior to its reorganization into a 308B cooperative association effective September 1, 2009 and all deliveries between September 1, 2009 and December 31, 2009 were deemed to be delivered via Method B with the agency fee waived.  During the three month periods ended September 30, 2010 and 2009, we recognized expense of $23,000 and $20,000, respectively, in connection with costs incurred to Cargill in connection with our corn delivery operation. For the three month periods ended September 30, 2010 and September 30, 2009, we recognized corn expense of $11,478,000 and $14,619,000.

 

The Cooperative derived income from ProGold for the three month period ended September 30, 2010, of $1,496,000, a decrease of $163,000 as compared to the three month period ended September 30, 2009.

 

General and Administrative Expenses. The Cooperative’s general and administrative expenses include salaries and benefits, professional fees and fees paid to our board of directors. Our general and administrative expenses for the three month period year ended September 30, 2010, was $195,000, a decrease of $195,000 or 50% compared to the three month period ended September 30, 2009, which was primarily the result of decreased costs incurred in connection with the cooperative conversion

 

Interest Income.  Interest income for the three month period ended September 30, 2010, was $5,000 compared to $13,000 for the three month period ended September 30, 2009.

 

Liquidity and Capital Resources

 

The Cooperative’s working capital at September 30, 2010 was $817,000 compared to $4,077,000 at September 30, 2009.

 

The Cooperative had no long-term debt as of September 30, 2010 or September 30, 2009.

 

The Cooperative used operating cash flows of $623,000 for the nine month period ended September 30, 2010 compared to $1,013,000 for the nine month period ended September 30, 2009.

 

18



Table of Contents

 

The Cooperative established a $1,000,000 line of credit with a variable interest rate based on the prime rate that terminates on July 16, 2011.  The line of credit is secured by all of the business assets of the Cooperative. There is no outstanding balance as of September 30, 2010.

 

The Cooperative received cash distributions from ProGold totaling $8,047,000 for the nine month period ended September 30, 2010 compared to $7,712,000 for the nine month period ended September 30, 2009.

 

The Cooperative paid cash distributions to our members totaling $7,744,000 for the nine month period ended September 30, 2010 compared to $11,293,000 for the nine month period ended September 30, 2009.

 

The following table provides information regarding the Cooperative’s contractual obligations as of September 30, 2010:

 

Tabular Disclosure of Contractual Obligations

 

 

 

 

 

 

 

One to

 

 

 

 

 

 

 

 

 

Less than

 

Three

 

Four to

 

After Five

 

 

 

Total

 

One Year

 

Years

 

Five Years

 

Years

 

Purchase Obligations(1)

 

805,000

 

69,000

 

276,000

 

184,000

 

276,000

 

Operating Lease Obligations-(2)

 

40,650

 

2,175

 

20,025

 

18,450

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Contractual Obligations

 

$

845,650

 

$

71,175

 

$

296,025

 

$

202,450

 

$

276,000

 

 


(1) Includes payments due under Cargill Grain Services Agreement that terminates December 31, 2017.

(2) Lease terminates on June 30, 2015.

 

Management believes that non-cash working capital levels are appropriate in the current business environment and does not expect a significant increase or reduction of non-cash working capital in the next 12 months.

 

Critical Accounting Estimates

 

Management’s estimate of the carrying value of the investment in ProGold is based on historical cost plus its pro-rata share of ProGold’s net income and additional paid-in capital less distributions received from ProGold.

 

The Cooperative does not pay out Method A incentive payments or collect Method B agency fees until the end of its fiscal year. These amounts are accrued quarterly and then confirmed at the end of the fiscal year.  The total annual Method B agency fee was determinable once the members completed their delivery method determination prior to January 1, 2010. The quarterly Method B bushel delivery and agency fee revenue is calculated by allocating the portion of the total annual agency fee for that particular quarter or cumulating it for the particular period.  The Cooperative tracks Method A corn deliveries throughout the year so it can report the bushels of corn delivered by its members as well as the corresponding Method A incentive fees earned.  The final amounts owed by or due to Cargill and/or the Cooperative’s members who elect to deliver using Method A is not calculated until after December 31 in order to account for any failures to deliver or over-deliveries of corn.

 

The Cooperative has determined corn revenue and corn expense for Method B deliveries based on the average quarterly cost per bushel paid by Cargill to the Cooperative’s members for Method A quarterly deliveries.

 

19



Table of Contents

 

Recent Accounting Pronouncements

 

There are no recently issued accounting pronouncements that are expected to have a significant effect on the Cooperative’s financial statements.

 

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.

 

The Cooperative does not believe that it is subject to 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 4T.  Controls and Procedures

 

The Cooperative’s chief executive officer and chief financial officer has reviewed and evaluated the effectiveness of the Cooperative’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 September 30, 2010.  Based on that review and evaluation, the chief executive officer and chief financial officer has concluded that the Cooperative’s current disclosure controls and procedures, as designed and implemented, are effective in ensuring that information relating to the Cooperative 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 Cooperative’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 Cooperative’s internal controls over financial reporting that occurred during the Cooperative’s most recent fiscal quarter that may have materially affected, or are reasonably likely to materially affect, the Cooperative’s internal control over financial reporting.

 

PART II.  OTHER INFORMATION

 

Item 1.  Legal Proceedings

 

None

 

Item 1A.  Risk Factors.

 

For a detailed discussion of certain risk factors that could affect the Cooperative’s operations, financial condition or results for future periods, see Item 1A, Risk factors, in the Cooperative’s Registration Statement on Form 10/A filed on November 15, 2010.

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

20



Table of Contents

 

Item 3.  Defaults Upon Senior Securities

 

None.

 

Item 4.  (Removed and Reserved)

 

Item 5.  Other Information.

 

None.

 

21



Table of Contents

 

Item 6.  Exhibits.

 

Item No.

 

 

 

Method of Filing

 

 

 

 

 

2.1

 

Articles of Merger of Golden Growers Cooperative and Golden Growers Cooperative

 

Incorporated by reference to Exhibit 2.1 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

 

 

 

 

2.2

 

Certificate of Conversion of Golden Growers Cooperative

 

Incorporated by reference to Exhibit 2.2 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

 

 

 

 

3.1

 

Amended and Restated Articles of Organization of Golden Growers Cooperative

 

Incorporated by reference to Exhibit 3.1 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

 

 

 

 

3.2

 

Amended and Restated Bylaws of Golden Growers Cooperative dated September 1, 2009

 

Incorporated by reference to Exhibit 3.2 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

 

 

 

 

10.1

 

Employment Agreement between Mark Dillon and Golden Growers Cooperative dated June 10, 1996

 

Incorporated by reference to Exhibit 10.1 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

 

 

 

 

10.2

 

Form of Uniform Member Agreement

 

Incorporated by reference to Exhibit 10.2 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

 

 

 

 

10.3

 

Form of Annual Delivery Agreement

 

Incorporated by reference to Exhibit 10.3 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

 

 

 

 

10.4

 

Amended and Restated Member Control Agreement between Golden Growers Cooperative, Golden Growers Cooperative and ProGold Limited Liability Company dated September 1, 2009

 

Incorporated by reference to Exhibit 10.4 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

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10.5

 

Operating Agreement between Golden Growers Cooperative, Golden Growers Cooperative and ProGold Limited Liability Company

 

Incorporated by reference to Exhibit 10.5 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

 

 

 

 

10.6

 

Amended and Restated Grain Services Agreement between Golden Growers Cooperative and Cargill, Incorporated

 

Incorporated by reference to Exhibit 10.6 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

 

 

 

 

10.7

 

Amended and Restated Corn Supply Agreement between Golden Growers Cooperative and Cargill, Incorporated

 

Incorporated by reference to Exhibit 10.7 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

 

 

 

 

 

10.8

 

Amendment to Employment Agreement between Mark Dillon and Golden Growers Cooperative dated August 15, 1997

 

Incorporated by reference to Exhibit 10.8 from the Cooperative’s Registration Statement on Form 10/A (File No. 10927396) filed June 30, 2010.

 

 

 

 

 

16.1

 

Eide Bailly letter dated June 30, 2010 regarding disclosure related to change in auditor on June 19, 2009

 

Incorporated by reference to Exhibit 16.1 from the Cooperative’s Registration Statement on Form 10/A (File No. 10927396) filed June 30, 2010.

 

 

 

 

 

99.1

 

Audited Financial Statements of ProGold Limited Liability Company for the years ended August 31, 2010 and August 31, 2009.

 

Incorporated by reference to Exhibit 99.1 from the Cooperative’s Registration Statement on Form 10/A filed November 15, 2010.

 

 

 

 

 

31.1

 

Rule 13a-14(a)/15(d)-14(a) Certification of the Chief Executive Officer and Chief Financial Officer

 

Accompanying herewith electronically

 

 

 

 

 

32.1

 

Section 1350 Certification of the Chief Executive Officer and Chief Financial Officer

 

Accompanying herewith electronically

 

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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.

 

 

 

 

 

GOLDEN GROWERS COOPERATIVE

 

 

 

 

(Registrant)

 

 

 

 

 

 

 

 

 

Date:

December 20, 2010

 

/s/ Mark Dillon

 

Mark Dillon

 

Executive Vice President,

 

Chief Financial Officer

 

Duly Authorized Officer

 

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