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COMMUNITY
ROOTS
AMERICAN CRYSTAL SUGAR COMPANY
2015 REPORT
ANNUAL
Community Roots
American Crystal Sugar Company is a world-class agricultural cooperative
specializing in the production of sugar and related agri-products. American
Crystal is owned by about 2,650 shareholders who raise approximately one-third
of the nation’s sugarbeet acreage in the Red River Valley of Minnesota and North
Dakota. Additional acres are contracted in eastern Montana and western North
Dakota. As the largest beet sugar producer in the United States, the company
utilizes innovative farming practices, low-cost production methods, and sales
and marketing leadership to produce and sell about 15 percent of America’s
Sugarbeets develop deep roots to grow strong,
resilient and productive. The same is true for the
people, business partners and communities linked
to American Crystal Sugar Company. Because
of our presence in the Red River Valley, we’re
finest quality sugar. American Crystal operates sugar factories in Crookston,
committed to sustainable agriculture, advanced
East Grand Forks, and Moorhead, Minnesota; Drayton and Hillsboro, North
manufacturing, delighting customers, rewarding
Dakota; and Sidney, Montana, under the name Sidney Sugars Incorporated. The
employees, and being a quality neighbor and civic
company’s technical services center and corporate headquarters are also located
in Moorhead.
contributor. This report is dedicated to the 4,000+
Located in Bloomington, Minnesota, United Sugars Corporation markets American
shareholders and employees of our company who
Crystal’s sugar to retail and industrial customers throughout the nation. Midwest
Agri-Commodities Company, based in San Rafael, California, globally markets
American Crystal’s agri-products such as sugarbeet pulp, molasses, CSB, and betaine.
work to make a difference in their jobs and the
communities where we live.
About the cover: Bob Powers, Maintenance Superintendent, Packaging and Warehouse, Corporate
Headquarters; Al Zola, Factory Manager, Drayton factory; Scott Hamilton, Stores Specialist, East Grand
Forks factory, and their family members participate as part of American Crystal’s Street Beets Crew in
various races during The Wild Hog Grand Forks Half Marathon.
American Crystal Sugar Company 1
FISCAL YEAR 2015
Operating Responsibly
SELECT HIGHLIGHTS
411 213 9.5MILLION
,
Acres
Harvested
Tons of sugarbeets
purchased/harvested
27.3 MILLION
Hundredweight of Sugar
GROSS BEET PAYMENT
419 MILLION
$
Beet Payment To Shareholders
44.01 $1019
,
$
Per Ton
Purchased
Per Acre
Harvested
Adding to the livelihood of our region is
at the core of our cooperative.
Every action we take is aimed at delivering sustainable, longterm results. On the farm our growers use land and water
responsibly because it’s always been a part of the job. In
our workplaces we prioritize safety and training to hone our
edge as a leading employer. In the marketplace we supply
distinctive quality products that win customers. In the sugar
industry we vigorously defend U.S. sugar policy against
unprovoked attacks and illegal trade activities. In the Red
River Valley we engage in actions that enrich and nourish
lives in our communities.
FINANCIAL PERFORMANCE
American Crystal’s financial results
in Fiscal Year 2015 were lower
than we would like. Operationally
the company performed well,
controlling costs and utilizing
assets. However the dual effect of
low sugar and agri-product prices
and a below-average 2014 crop
pressured our ability to deliver
adequate returns to shareholders.
With many challenges of the
past year behind us, we believe
the company is well-positioned
for success. Our balance
sheet and debt-to-equity ratio
remain healthy. Our capital
investments and equipment are
functioning at or above planned
levels and the outlook for the
2015 sugarbeet crop and sugar
market has strengthened.
GOVERNMENT AFFAIRS
American Crystal faced a year of
old and new challenges in the public
policy arena. The old challenges
came from our typical opponents,
the Coalition for Sugar Reform.
Largely comprised of purchasers
of sugar, they were joined by antigovernment groups in an effort to
dismantle the sugar program. This
is nothing new and the end result
was the same: Congress agreed
with the sugar industry and did
not allow any changes to the
program. American Crystal did what
it has done successfully for many
years – join with the U.S. agriculture
coalition in defending the Farm Bill.
Congress agreed with us that the
five-year Farm Bill should not be
re-opened, especially as it was just
signed into law in 2014.
The new challenges were
centered on the anti-dumping and
countervailing duty cases the
U.S. sugar industry brought
against dumped and subsidized
sugar exports from Mexico. We
are extremely pleased that on
October 20, 2015, the International
Trade Commission voted
unanimously (6-0) that Mexico’s
unfair trade practices injured the
U.S. sugar industry. This vote was
the final step in a nearly two-year
process to prove that dumped,
subsidized sugar from Mexico
damaged the U.S. price of sugar
and cost our industry hundreds
of millions of dollars. This vote
also solidified the Suspension
Agreements the U.S. and Mexican
governments negotiated in
December 2014, which manage the
volume and price of sugar exported
by Mexico into the U.S. We believe
this arrangement is a very fair
solution to the long-running concern
over Mexico’s unfair trade practices
and that it should bring stability to
the U.S. sugar market for several
years to come.
SUGAR MARKETING
For sugar, 2015 was a year of
continued modest demand growth
and a return to balanced supply
and demand brought about by
the favorable conclusion of the
U.S. sugar industry’s trade case
against Mexico for its illegal sugar
marketing tactics.
American Crystal’s packaging
and warehousing groups teamed
with our marketing entity, United
Sugars, to provide customers with
safe, quality deliveries, reliable
service, and satisfying sugar
sourcing experiences.
AGRI-PRODUCT MARKETING
2015 prices for American Crystal’s
agri-products sold through our
marketing entity, Midwest AgriProducts, were generally lower
following declining prices for
competing feed commodities. While
demand for our beet pulp in North
America remained strong, a smaller
crop reduced our sales volume.
Exporting beet pulp to Asia and
Europe faced stiff competition from
excess European beet pulp supplies.
Liquid product pricing for raffinate
was average while betaine prices
were lower due to a downturn in the
poultry industry.
Making a difference
Ronnie Tang, Shareholder,
Bread of LIfe Food Pantry Volunteer
Felton, MN
Ronnie saw the need for food pantry supplies
in rural communities and works to secure
bales of sugar for the Bread of Life Food
Pantry in Felton.
Along with his son and daughter-in-law, Ronnie
grows sugarbeets and operates Tang Farms
in Felton, MN.
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American Crystal Sugar Company 3
Refining Potential
Skillful performances in agriculture and
manufacturing drive our abilities forward.
Best 24-hour period - 10/5
RECEIVED
The work that goes into running a progressive farmer-owned
sugar company isn’t always visible. But the commitment
behind the scenes is nonetheless incredible. The convergence
of planning, investment, decision-making, and manpower to
create sugar and agri-products from sugarbeets on the scale
of American Crystal is unduplicated anywhere else in the world.
2014 CROP AND STORAGE
A wet fall and cold winter combined
with a cool, late spring to delay
planting of the 2014 sugarbeet crop.
For the second consecutive year,
the cooperative’s Board authorized
an acreage increase. The upper
planting tolerance was increased
from 404,000 to 427,000 acres to
help offset potential yield loss of a
late planted crop. In mid-June, the
last of the 413,000-acre crop was
seeded. Temperatures were normal
with slightly below-average rainfall
in most of July and August. Growing
conditions turned favorable in late
August through September with
slightly above-average temperatures
and near-average precipitation,
allowing the crop to recover
somewhat from its late start.
Pre-pile harvest started
September 2 with the anticipation
of a smaller crop. Full harvest
opened up October 1. Rainfall
amounts north of East Grand
Forks caused many of the stations
to delay harvest. Once the rain
cleared we had one of the quickest
harvests in history. On October
13 we were 98 percent done with
receiving of the 2014 crop.
Storing this crop had its
challenges. In mid-November
extreme cold temperatures for
several days froze the outer two-foot
rim of the beet piles. The remainder
of November was warmer than
average followed by rains in the
first week of December, causing
damage to the previously frozen
rim beets. Cold temperatures in
mid-December allowed the deep
freeze process to begin. Moving into
early 2015, it was challenging to get
enough cold weather to complete
freezing the long-term piles. In
the end, storage results were
respectable for the year.
2014-2015 OPERATIONS
A smaller 2014 crop allowed our
operations employees to focus on
maintaining a steady, optimum
throughput level to maximize
sugar recovery and manage costs.
During the processing campaign,
we also worked to enhance
automation utilization, fine tune
operating procedures, and
advance the cross-training of
our workforce.
Improving our productivity and
product quality requires continual
investment. This past year at our
Hillsboro factory, we installed a
new sugar dryer and sugar cooler.
A new multi-year lime kiln project
and a new sugar truck loading
facility were also successfully
brought on line at Hillsboro. A
new rock catcher and associated
equipment were installed at the
Crookston factory. Numerous other
improvements included updating
the controls at our Molasses
Desugarization facility in Hillsboro
and the East Grand Forks factory’s
beet and sugar end controls.
Effective management of
environmental assets is important
to our operations. We strive to
comply with regulatory guidelines
and diligently work to minimize
adverse effects on our neighbors.
SIDNEY SUGARS
The Sidney area growers raised a
record-yielding crop of 30.4 tons
per acre on 29,000 acres in 2014,
with a very good sugar content
of 18.4%. As a result of the good
crop, the factory produced 2.4
million hundredweight of sugar,
up 14% from the previous year.
Unfortunately, in spite of the nice
crop for the growers, Sidney Sugars
was financially challenged for the
second straight year due to low
prices for sugar and agri-products.
Riding to the rescue
Jackie Basgaard, Lab Foreman,
Polk County Mounted Posse Volunteer
Crookston, MN
Jackie and her horse, Spiderman, volunteer
with the Polk County Sheriff’s Mounted Posse
assisting in search and rescue efforts and
monitoring local community events.
A Lab Foreman at the East Grand Forks
factory, Jackie provides sugar and by-product
analyses, results reporting, and acts as a first
responder if needed.
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American Crystal Sugar Company 5
IN THE COMMUNITY
Pivotal Efforts
Bringing together people and passions
can produce wide-ranging impacts.
Taking our company to the next level requires energy, goal
setting, and collaboration. Successfully executing these
efforts directly benefits everyone involved in our cooperative
enterprise. It also makes us a stronger company which, in
turn, helps create stronger communities. This mutually
beneficial relationship expands when the people of American
Crystal volunteer their talents and resources to civic and
social organizations that support community needs.
SKILL DEVELOPMENT
Ambitious employees bring initiative
and innovation to our business
processes. We offer a broad
spectrum of training options to
develop their talents. This past year
we added a Process Technician IV
position to our 5-level employee
advancement path. Each level offers
greater responsibility and knowledge
of our manufacturing process and
requires in-depth training, testing,
and on-the-job mentoring.
SOCIAL REACH
American Crystal matched every dollar
Organizations received
contributions, sponsorships,
or products
47
EMPLOYEE WELLNESS
American Crystal launched its
BeWell initiative to support healthy
lifestyle choices for employees.
BeWell promotes the benefits of
good nutrition, regular exercise,
proper rest, and the advantages of
a healthy approach to living. The
program kicked off with a fitness
challenge, with 419 employees
logging 573,000 exercise miles
in 12 weeks. To further encourage
active lifestyles, we’re sponsoring
employee sports teams and
employees and family members
who participate in races like the
Fargo marathon and the Grand
Forks half marathon.
Our company is people-driven
so it makes sense to share more
about us with social media. Early in
2015 we introduced our Facebook
and LinkedIn pages. Each has
grown tremendously in terms of
content, friends, story sharing, and
traffic. These sites also allow us to
showcase our brand, our people
and our activities, while highlighting
the benefits of working at American
Crystal. By joining the conversation,
we not only tell our story, we
get feedback from community
members. Our goal is to keep
our social media platforms active,
noteworthy, and fresh.
H.E.L.P. SAFETY COACHING
The four focal areas of H.E.L.P
Safety Coaching are:
• Hand Protection and proper
personal protective equipment
• Eyes on Path – situational
awareness
• Line of Fire – stay clear of hot
liquids/moving objects
• Positioning – proper footing
and body positioning
To enhance workplace safety, we’ve
implemented H.E.L.P. Safety
Coaching. The program identifies
and addresses situations where the
majority of our workplace accidents
and injuries occur. Through training,
observation and coaching we’re
reinforcing our commitment to
employees that no priority is higher
than safety.
500 Scholarships
$
Awarded to area high
school seniors
One Al Bloomquist
Memorial Scholarship
10000
$
Answering the call
Wes Heyen, Beet Seed Processing Supervisor,
Volunteer Firefighter and Emergency
Responder, Abercrombie, ND
Wes has been helping neighbors and
communities in need at a moment’s notice for
more than 20 years. Like his fellow volunteers,
he does it to make a difference during what
can be a life-changing event for people.
6
American Crystal Sugar Company 7
2015 SUGARBEET CROP
Connective landscape
ACREAGE
397416
,
Acres
Harvested
YIELD PERFORMANCE
27.9 TONS 17.8% AVG.
Per Acre
Average
Sugar Content
harvest PERFORMANCE
11.1 MILLION
Total Tons
Harvested
Best 24-hour period - 10/3
New Record
1.14 million
Tons Received
American Crystal’s success is closely tied to the
expansive resources unique to the Red River Valley.
Customers, shareholders, employees, and communities get
the most value from our company when we are effectively
functioning in multiple capacities. Sustaining our operations
strategically and responsibly is critical to securing our role as
an agricultural leader and important regional business.
Ours is a distinctive story of
teamwork, in which 10,000
people come together from near
and far to help with the annual
sugarbeet harvest. We leverage
our cold winters with specialized
equipment to freeze sugarbeets
and manufacture sugar longer
than anywhere else in the world.
It’s also a story that transforms
sugarbeet roots from area farms
into pure, all-natural crystalized
sugar for customers who make the
trusted foods we feed our families.
Then, at the end of the year, we do
it all over again – with an eye on
doing it better.
2015 CROP
In general, the fall of 2014 ended
fairly dry, allowing primary seedbed
preparation and fall fertilization
to be handled in a timely manner.
Planting commenced in the second
week of April and continued through
May 8 for a total of 25 planting days
for the vast majority of the 399,670
planted acres. The planting tolerance
was tightened to a range of 78-80
percent of stock and with an early
planting season, the Company’s
new Spring TAP (Targeted Acres
Program) for increasing overall
harvested tons did not need
implementation for the 2015 crop.
Precipitation ranged from light
in the south growing region to
heavier in the north. Root diseases
generally trended below normal.
We are seeing Glyphosate-resistant
weeds become more numerous
with a larger geographic spread.
Overall, a good, early start followed
by long warm growing season and
timely rains progressed the 2015
crop toward impressive yields.
Pre-pile harvest started August
17, the second earliest date in
company history. We received
around 16 percent of the crop
during this period. Full stockpile
harvest began October 1. With
great cooperation from the
weather, shareholders and piling
site teams expertly produced
record-breaking performances
taking in over one million tons per
day for the first several days of
harvest. The Company released
the Fall TAP acres program
allowing all available acres to be
harvested. On October 10 we were
94 percent done harvesting the 11
million ton crop.
DEEPLY ENGRAINED
American Crystal has a long
record of success. While there
have been setbacks from time
to time, we’ve managed through
them by learning, adapting
and investing in our strengths.
But most importantly, we’ve
endured by being straight with
our customers and relying on our
people and the communities of the
Red River Valley. Together, we’re
proudly intertwined in a business
and a region destined for sugar.
David Berg
Robert Green
President & Chief
Executive Officer
Chairman, Board
of Directors
Advancing Community
John Rehder, Shareholder,
Warren City Council Member
Warren, MN
A Warren City Council member for seven
years, John was instrumental in the
construction of the new North Valley Health
Medical Center in 2013. He also served on
the Alvarado Farmers Elevator and as the
township clerk for the Farley Township.
A third-generation sugarbeet farmer, John
operates R & R Farms Inc, in Warren, MN.
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American Crystal Sugar Company 9
Strategic Pursuits
Exploring options and capitalizing on opportunities
is a team approach at American Crystal.
Our strategy to invest for the longer term
continues to have a major impact on
performance. At the same time, our intense
focus on safe, efficient operations and
responsive customer service reinforces the
durability of our business. Thanks to the
tireless work of our shareholders, employees,
and business partners, we remain confident
in American Crystal’s direction.
Drayton District
Management’s Report on the Consolidated Financial Statements
Crookston District
The management of American Crystal Sugar Company is responsible for the preparation,
integrity and fair presentation of the accompanying consolidated financial statements and related
information contained in this Annual Report. The consolidated financial statements, which include
amounts based on management’s estimates and judgments, have been prepared in conformity
with accounting principles generally accepted in the United States of America.
Steve Williams
Donald Andringa
Vice Chairman
Director
Curt Knutson
Director
East Grand Forks District
The Company maintains accounting and internal control systems to provide reasonable assurance
at reasonable cost that assets are safeguarded against loss from unauthorized use or disposition,
that transactions are properly recorded and executed in accordance with management’s
authorization, and that the financial records provide a solid foundation from which to prepare
the consolidated financial statements. These systems are augmented by written policies, an
organizational structure providing division of responsibilities and careful selection and training
of qualified personnel.
The Company’s consolidated financial statements have been audited by independent auditors
CliftonLarsonAllen LLP. The independent auditors were given unrestricted access to all financial
records and related data.
The Audit Committee of the Board of Directors meets with the independent auditors and
management periodically to review their respective responsibilities and activities and to provide
oversight to the Company’s accounting policies, internal controls and the financial reporting
process. The independent auditors have free access to the Board of Directors and its Audit
Committee, with or without management present, to discuss the scope and results of their audits
and the adequacy of the system of internal controls.
Robert Green
William “Buzz” Baldwin
Chairman
Director
Kelly Erickson
Director
Hillsboro District
Jim Nelson
Brian Erickson
Director
Director
John Gudajtes
Director
Moorhead District
David A. Berg, President and Chief Executive Officer
Teresa A. Warne, Vice President – Finance
Perry Skaurud
John Brainard
Director
Director
David Mueller
Director
Senior Management
10
Wayne Tang
Dale Fischer
William Hejl
Director
Director
Director
Senior Management
Thomas Astrup
David Berg
Brian Ingulsrud
Daniel Mott
Lisa Borgen
Kevin Price
Teresa Warne
Vice President
Operations
President &
Chief Executive Officer
Vice President
Agriculture
Secretary and
General Counsel
Vice President
Administration
Vice President
Government
Relations
Vice President
Finance
American Crystal Sugar Company 11
Management’s Discussion of Operations
The harvest of the Red River Valley and Sidney sugarbeet crops grown during 2014 and processed during fiscal 2015 produced a total of 10.4
million tons of sugarbeets, or approximately 23.5 tons of sugarbeets per acre from approximately 440,000 acres. This represents a decrease
in total tons harvested of approximately 12.1 percent compared to the 2013 crop. The sugar content of the 2014 crop was 17.5 percent
as compared to 17.3 percent for the 2013 crop. The Company produced a total of approximately 29.6 million hundredweight of sugar from
the 2014 crop, a decrease of approximately 10.2 percent compared to the 2013 crop.
Independent Auditors’ Report
Revenue for the year ended August 31, 2015, was $1.2 billion, a
decrease of $166.7 million from the year ended August 31, 2014.
The table below reflects the percentage changes in product revenues,
prices and volumes for the year ended August 31, 2015, as compared
to the year ended August 31, 2014.
To the Audit Committee
American Crystal Sugar Company
Moorhead, Minnesota
The decrease in the selling price of sugar reflects an oversupply of
sugar in the domestic sugar market. The lower pulp and betaine selling
price is a result of a softening of the feed market. The decreased volume
of all products is due to a smaller sugarbeet crop this year as compared
to the previous year.
Product
Sugar
Pulp
Molasses
CSB
Betaine
Revenue
-11.3%
-22.0%
-33.9%
-2.8%
-15.0%
Selling Price
-1.6%
-13.7%
-1.3%
-2.8%
-10.9%
Volume
-9.8%
-9.6%
-33.0%
-0.1%
-4.5%
Cost of sales for the year ended August 31, 2015, exclusive of payments to members for sugarbeets, decreased $62.6 million as compared
to the year ended August 31, 2014. This decrease was primarily related to product inventories that are recorded at their net realizable value,
decreased operating costs due to processing 13.3 percent fewer tons of sugarbeets this year and lower purchased sugar costs, partially
offset by increased costs associated with non-member sugarbeets. 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 decrease in the net realizable value of product inventories for the
year ended August 31, 2015 was $49.0 million as compared to a decrease of $75.5 million for the year ended August 31, 2014 resulting
in a $26.5 million favorable change in the cost of sales between the two years as shown in the table below:
Change in the Net Realizable Value of Product Inventories
For the Years Ended August 31
(In Millions)
2015
$153.5
2014
$229.0
Change
Beginning Product Inventories at Net Realizable Value
$(75.5) 1
Ending Product Inventories at Net Realizable Value
(104.5)
(153.5)
49.0 2
(Increase) Decrease in the Net Realizable Value of Product Inventories
$49.0
$75.5
$(26.5)
¹The change is primarily due to a 22.9 percent decrease in the hundredweight of sugar inventory as of August 31, 2014, as compared to
August 31, 2013, along with an 11.6 percent decrease in the per hundredweight net realizable value of sugar inventory as of August 31,
2014, as compared to August 31, 2013.
²The change is primarily due to a 34.7 percent decrease in the hundredweight of sugar inventory as of August 31, 2015, as compared to August 31,
2014 partially offset by a 5.6 percent increase in the per hundredweight net realizable value of sugar inventory as of August 31, 2015,
as compared to August 31, 2014.
Selling, general and administrative expenses decreased $24.6 million for the year ended August 31, 2015, as compared to the year ended
August 31, 2014. Selling expenses decreased $26.3 million primarily due to expenses related to the decreases in the volumes of sugar, pulp
and molasses sold. General and administrative expenses increased $1.7 million due to general cost increases.
We have audited the accompanying consolidated financial statements of American Crystal Sugar Company
and Subsidiaries, which comprise the consolidated balance sheets as of August 31, 2015 and 2014 and the related
consolidated statements of operations, comprehensive income, changes in members’ investments, and cash flows
for the years then ended, and the related notes to the consolidated financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the design,
implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted
our audits in accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the
risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation
of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly,
we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation
of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of American Crystal Sugar Company and Subsidiaries as of August 31, 2015 and 2014, and the results of their
operations and their cash flows for the years then ended in accordance with accounting principles generally accepted
in the United States of America.
Interest expense increased $1.7 million for the year ended August 31, 2015, as compared to the year ended August 31, 2014. This reflects an
increase in the average borrowing level of long-term debt and an increase in the average interest rate for short-term debt partially offset by
a lower average borrowing level of short-term debt.
Net proceeds attributable to American Crystal Sugar Company decreased $79.8 million for the year ended August 31, 2015, as compared
to the year ended August 31, 2014. This decrease was primarily due to fewer tons of sugarbeets processed resulting in the decreased
production of sugar and agri-products along with a decline in selling prices.
12
CliftonLarsonAllen LLP
Stevens Point, Wisconsin
October 14, 2015
American Crystal Sugar Company 13
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income (Loss)
For the Years Ended August 31 (In Thousands)2015
Net Revenue
$1,221,100
2014
$1,387,785
For the Years Ended August 31 (In Thousands)2015
Non-Member Business Income
2014
$2,603 $4,586
Cost of Sales
498,819
561,425
Pension & Post-Retirement Gain/(Loss)
(22,188)(3,942)
Gross Proceeds
722,281
826,360
Pension & Post-Retirement Prior Service Credit/(Cost)
(1,544) 9,682
Selling, General and Administrative Expenses
285,250
Equity Method Investees Other Comprehensive Income/(Loss)
812(1,259)
Operating Proceeds
437,031
516,527
309,833
Other Income (Expense):
(632) 246
Derivative Interest Rate Contract Gain/(Loss)
226 104
Interest Income
Interest Expense, Net
(8,500)(6,818)
Other, Net
87 141
Total Other Expense
(8,187)(6,573)
Proceeds Before Income Tax
428,844
509,954
Income Tax Expense
(2,120)(2,620)
Consolidated Net Proceeds
426,724
507,334
Less: Net Proceeds Attributable to
Noncontrolling Interests
(5,253)(6,018)
Net Proceeds Attributable to
American Crystal Sugar Company
7 (12)
Foreign Currency Forward Contract Gain/(Loss)
$
421,471
Total Comprehensive Income (Loss)
$(20,942)
$9,301
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
$501,316
Distributions of Net Proceeds Attributable to
American Crystal Sugar Company:
Credited to American Crystal Sugar
Company’s Members’ Investments:
Non-Member Business Income
$2,603 $4,586
Unit Retains Withheld from Members
19,02121,948
Net Credit to American Crystal Sugar
Company’s Members’ Investments
21,62426,534
Payments to Members for Sugarbeets,
Net of Unit Retains Withheld
399,847474,782
Total
$421,471
$501,316
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
14
American Crystal Sugar Company 15
Consolidated Balance Sheets
Consolidated Balance Sheets
Assets
Liabilities and Members’ Investments
20152014
August 31 (In Thousands)
Current Assets:
Cash and Cash Equivalents
20152014
Current Liabilities:
$115$120
Receivables:
Trade
Members
Other
57,27067,395
9,2407,993
4,9475,462
23,85913,850
Advances to Related Parties
Inventories 220,020221,986
August 31 (In Thousands)
Prepaid Expenses
2,6742,699
$67,045
Short-Term Debt
Current Maturities of Long-Term Debt
3356,065
$60,599
Accounts Payable
34,48746,971
Advances Due to Related Parties
3,7604,477
Other Current Liabilities
43,21333 ,574
Amounts Due Growers
133,348124,321
282,188276,007
Total Current Liabilities
Total Current Assets
318,125319 ,505
Long-Term Debt, Net of Current Maturities
166,613149,818
Property and Equipment:
Land and Land Improvements
114,796104,329
Buildings
152,604146,320
Equipment1,169,3591,117,357
Construction in Progress
4,73826,421
Less Accumulated Depreciation
(958,209)(923,374)
Net Property and Equipment
483,288471,053
Net Property and Equipment Held for Lease
56,11365,975
Accrued Employee Benefits
43,33439,105
Other Liabilities
5,4997,573
Total Liabilities
497,634472,503
Commitments and Contingencies
Members’ Investments:
38,27538,275
Preferred Stock, Shares Outstanding: 498,570 and 498,570
Common Stock, Shares Outstanding: 2,667 and 2,738
27
Additional Paid-In Capital
152,261152,261
Unit Retains
206,009210,231
Accumulated Other Comprehensive (Loss)
(62,446)(38,901)
Retained Earnings
16,96614,363
Total Other Assets
18,65824,065
Total American Crystal Sugar Company Members’ Investments
351,092376,256
Other Assets:
Investments in CoBank, ACB
3,1363,972
Investments in Marketing Cooperatives
5,6466,824
Other Assets
9,87613,269
Total Assets
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
$876,184
$880,598
Noncontrolling Interests
27
27,45831,839
Total Members’ Investments
378,550408,095
Total Liabilities and Members’ Investments
$
876,184
$880,598
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
16
American Crystal Sugar Company 17
Consolidated Statements of Changes in Members’ Investments
Preferred
Stock
For the Years Ended August 31 (In Thousands)
Balance, August 31, 2013
Common
Stock
$ 38,275
$
Additional
Paid-In Capital
28
$ 152,261
Unit Retains
$ 223,902
Accumulated Other
Comprehensive
Income (Loss)
$ (43,616)
Retained
Earnings
$
9,777
American
Crystal Sugar
Company Total
Noncontrolling
Interests
$380,627
$ 36,581
Total
$417,208
Comprehensive Income——— —
4,715
4,586
9,301—
9,301
Net Proceeds Noncontrolling Interests
—
—
—
—
—
—
—6,0186,018
Distributions to Noncontrolling Interests
—
—
—
—
—
—
—
(10,760)
(10,760)
Unit Retains Withheld from Members———
21,948——
21,948—
21,948
Unit Retains Paid to Members———
(35,619)——
(35,619)—
(35,619)
Stock Issued/(Redeemed), Net—(1)— ——— (1)—(1)
Balance, August 31, 2014 38,275
27 152,261 210,231 (38,901) 14,363376,256 31,839408,095
Comprehensive (Loss)——— —
(23,545)
2,603
(20,942)—
(20,942)
Net Proceeds Noncontrolling Interests
—
—
—
—
—
—
—5,2535,253
Distributions to Noncontrolling Interests
—
—
—
—
—
—
—
(9,634)
(9,634)
Unit Retains Withheld from Members———
19,021——
19,021—
19,021
Unit Retains Paid to Members———
(23,243)——
(23,243)—
(23,243)
Stock Issued/(Redeemed), Net——— ——————
Balance, August 31, 2015
$
38,275
$
27
$
152,261
$
206,009
$
(62,446)
$
16,966
$
351,092
$
27,458
$
378,550
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
18
American Crystal Sugar Company 19
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
For the Years Ended August 31 (In Thousands) 2015
(1) PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES:
2014
Cash Provided By (Used In) Operating Activities:
Net Proceeds Attributable to American Crystal Sugar Company
$421,471
Payments To/Due Members for Sugarbeets, Net of Unit Retains Declared
Add (Deduct) Non-Cash Items:
Depreciation and Amortization
Accretion Expense
Loss from Equity Method Investees
Loss on the Disposition of Property and Equipment
Loss on the Disposition of Property and Equipment Held for Lease
Non- Cash Portion of Patronage Dividend from CoBank, ACB
Deferred Gain Recognition
Noncontrolling Interests
$501,316
(399,847)(474,782)
61,08557,099
122 124
1,760 729
1,5052,713
796 216
(18) —
(63) (63)
5,2536,018
Changes in Assets and Liabilities:
Receivables
9,3939,312
Inventories
1,96673,077
Prepaid Expenses
272,071
Other Assets
—(4,314)
Advances To/Due to Related Parties
(10,726)3,332
Accounts Payable (9,645)(3,937)
Other Liabilities (6,993)(2,328)
Amounts Due Growers
9,027(13,339)
Net Cash Provided By Operating Activities
85,113
157,244
Cash Provided By (Used In) Investing Activities:
Organization
American Crystal Sugar Company (Company) is a Minnesota agricultural cooperative corporation which processes sugarbeets and markets
sugar as well as sugarbeet pulp, molasses, concentrated separated by-product (CSB), betaine (collectively, agri-products) and sugarbeet
seed. Business done with its shareholders (members) constitutes “patronage business” as defined by the Internal Revenue Code, and the
net proceeds therefrom are credited to members’ investments in the form of unit retains or distributed to members in the form of payments
for sugarbeets. Members are paid the net amounts realized from the current year’s production less member operating costs determined
in conformity with accounting principles generally accepted in the United States of America.
Basis of Presentation
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 August 31, 2014 consolidated financial statements to conform with the August 31, 2015
presentation. These reclassifications had no effect on previously reported results of operations, cash flows or Members’ Investments.
Revenue Recognition
Revenue from the sale of sugar, agri-products and seed is recorded when the product is delivered to the customer. Operating lease revenue
is recognized as earned ratably over the term of the lease.
Operating Lease
ProGold owns a corn wet milling facility which it leases to Cargill, Incorporated (Cargill) under an operating lease. Payments are to be received
monthly under the lease, which runs through December 31, 2017. 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 does not contain a provision for the automatic renewal or extension
of the lease terms. However, it does provide an option for Cargill to request exclusive negotiations with ProGold during a certain period of time
prior to the expiration of the current lease. The lease also contains provisions for increased payments to be received during the lease period
related to the plant’s capital additions.
Purchases of Property and Equipment
(64,714)(81,204)
Purchases of Property and Equipment Held for Lease
(3,480)(2,281)
Proceeds from the Sale of Property and Equipment
9
Equity Distribution from CoBank, ACB
8541,002
Investments in Marketing Cooperatives
(360) (140)
Equity Distribution from Marketing Cooperatives
591 163
Changes in Other Assets
(2,175) (268)
Net Cash (Used In) Investing Activities
(69,275)
(82,675)
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 uncollectible 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.
53
Cash Provided By (Used In) Financing Activities:
Net Proceeds from (Payments on) Short-Term Debt
6,446(57,898)
Proceeds from Issuance of Long-Term Debt
47,00030,000
Long-Term Debt Repayment
(36,065) (300)
Debt Issuance Cost
Distributions to Noncontrolling Interests
(347)
—
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The
Company places its temporary cash investments with high credit quality financial institutions. At times, such investments may be in excess
of the applicable insurance limit.
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.
(9,634)(10,760)
Common Stock Issued/(Redeemed), Net
—
Payment of Unit Retains
(23,243)(35,619)
(1)
Net Cash (Used In) Financing Activities
(15,843)
(74,578)
(Decrease) In Cash and Cash Equivalents
(5)
(9)
Cash and Cash Equivalents, Beginning of Year 120 129
Cash and Cash Equivalents, End of Year
115
$
$
120
Non-Cash Investing Activities: Purchases of Property and Equipment include the changes in Accounts Payable related to these purchases of ($1,849,000) and ($4,790,000)
for the years ended August 31, 2015 and 2014, respectively and changes in Other Liabilities of ($163,000) and $2,633,000 for the years ended August 31, 2015 and 2014,
respectively. Purchases of Equipment Held for Lease include the changes in Accounts Payable related to these purchases of ($990,000) and $990,000 for the years ended
August 31, 2015 and 2014, respectively.
The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.
20
American Crystal Sugar Company 21
Inventories
Sugar, pulp, molasses and other agri-products inventories are valued at estimated net realizable value. Operating supplies, maintenance parts,
and sugarbeet seed inventories are valued at the lower of average cost or market. Sugarbeets are valued at the projected gross per-ton beet
payment related to that year’s crop.
Net Property and Equipment
Property and equipment are recorded at cost less impairment. Indirect costs and construction period interest are capitalized as a component
of the cost of qualified assets. Property and equipment are depreciated for financial reporting purposes principally using straight-line methods
with estimated useful lives ranging from 3 to 33 years.
Net Property and Equipment Held for Lease
Net property and equipment held for lease are stated at cost, net of accumulated depreciation. Depreciation on assets placed in service
is provided using the straight-line method with estimated useful lives ranging from 5 to 40 years.
Impairment of Long Lived Assets
The Company reviews its long lived assets 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. The fair value of assets is a significant
estimate and it is at least reasonably possible that a change in the estimate could occur in the near term. No impairment was recognized
in 2015 or 2014.
Related Parties
The following organizations are considered related parties for financial reporting purposes: United Sugars Corporation (United), Midwest
Agri-Commodities Company (Midwest) and West Coast Beet Seed Company.
Investments
Investments in CoBank, ACB are stated at cost plus unredeemed patronage refunds received in the form of capital stock. Investments
in Marketing Cooperatives include investments in United and Midwest, which are accounted for using the equity method. Investments
in West Coast Beet Seed Company are stated at cost.
Members’ Investments
Preferred and Common Stock – The ownership of common stock is restricted to a “farm operator” as defined by the bylaws of the Company.
Each shareholder may own only one share of common stock and is entitled to one vote in the affairs of the Company. Each common
shareholder is required to purchase preferred stock in proportion to the acreage of sugarbeets which the common shareholder places under
contract with the Company. The preferred shares are non-voting. All transfers of stock must be approved by the Company’s Board of Directors
and any shareholder desiring to sell stock must first offer it to the Company for repurchase at its par value. The Company has never exercised
this repurchase option for preferred stock. The Company’s articles of incorporation do not allow dividends to be paid on either the common
or preferred stock.
Unit Retains – The bylaws authorize the Company’s Board of Directors to require additional direct capital investments by members in the form of
a variable unit retain per ton of up to a maximum of 10 percent of the weighted average gross per ton beet payment. All refunds and retirements
of unit retains must be approved by the Board of Directors.
Accumulated Other Comprehensive Income (Loss) – Accumulated Other Comprehensive Income (Loss) represents the cumulative net increase
(decrease) in equity related to the recording of the over-funded or under-funded status of defined benefit postretirement plans, the Company’s
portion of the other comprehensive income (loss) of equity method investees and the gain or loss related to foreign currency forward contracts
and interest rate swap contracts. Consistent with the Company’s treatment of income taxes related to member-source income and expenses,
accumulated other comprehensive income (loss) does not include any adjustment for income taxes.
Retained Earnings – Retained earnings represents the cumulative net income (loss) resulting from non-member business, the 2009 pension
measurement date adjustment and, for years prior to 1996, the difference between member income as determined for financial reporting
purposes and for federal income tax reporting purposes.
22
Interest Expense, Net
The Company earns patronage dividends from CoBank, ACB based on the Company’s share of the net income earned by CoBank, ACB.
These patronage dividends are applied against interest expense.
Income Taxes
The Company is a non-exempt cooperative for federal income tax purposes. As such, the Company is subject to corporate income taxes
on its net income from non-member sources. The provision for income taxes relates to the results of operations from non-member business,
state income taxes and certain other permanent differences between financial and income tax reporting. The Company also has various
temporary differences between financial and income tax reporting, most notable of which is depreciation.
Deferred tax assets, less any applicable valuation allowance, and deferred tax liabilities are included in the financial statements at currently
enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled.
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.
Fair Value Measurements
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded
at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that
market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
The fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that
is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
Level 1:Quoted prices in active markets for identical assets or liabilities.
Level 2:Includes the following inputs:
• quoted prices in active markets for similar assets or liabilities,
• quoted prices for identical or similar assets or liabilities in markets that are not active,
• or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets
or liabilities.
Level 3:Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets
or liabilities.
Derivative Instruments and Hedging Activities
The Company recognizes all derivatives in its Consolidated Balance Sheet at fair value. On the date the derivative instrument is entered into,
the Company designates the derivative as either (1) a hedge of the fair value of a recognized asset or liability, or of an unrecognized firm
commitment (“fair value hedge”) or (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related
to a recognized asset or liability (“cash flow hedge”). The Company has entered into foreign currency forward contracts and interest rate swaps,
which have been designated as cash flow hedges. Changes in the fair value of a derivative designated as a cash flow hedge are recorded
in accumulated other comprehensive income (loss) and are reclassified into earnings as the underlying hedged item affects earnings.
Business Risk
The financial results of the Company’s operations may be directly and materially affected by many factors, including prevailing prices
of sugar and agri-products, the Company’s ability to market its sugar competitively, the weather, government programs and regulations,
and operating costs.
American Crystal Sugar Company 23
Concentration and Sources of Labor
Substantially all of the hourly employees at the Company’s factories, including full-time and seasonal employees, are represented by the Bakery,
Confectionery, Tobacco Workers and Grain Millers (BCTGM) AFL-CIO. The collective bargaining agreement for the Red River Valley factory
employees expires on July 31, 2017. The collective bargaining agreement for the Sidney, Montana, factory employees expires on April 30, 2018.
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.
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 $194.1 million and $214.0 million for the years ended
August 31, 2015 and 2014, respectively.
Deferred Costs and Product Values
All costs incurred prior to the end of the Company’s fiscal year that relate to receiving and processing the subsequent year’s sugarbeet crop
are deferred. Similarly, the net realizable values of products produced prior to the end of the Company’s fiscal year that relate to the subsequent
year’s sugarbeet crop are deferred. The net result of these deferred costs and product values are recorded in the Company’s consolidated
balance sheet in “Other Current Liabilities.” Deferred costs and product values were $3.7 million and $0 as of August 31, 2015 and 2014,
respectively.
Recently Issued Accounting Pronouncements
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 became effective and was adopted by the Company
in fiscal 2015.
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 became effective and was
adopted by the Company in fiscal 2015.
In July 2013, the FASB issued an update to the authoritative guidance in regards to the presentation in the financial statements of an
unrecognized tax benefit when a net operating loss carry-forward, a similar tax loss, or a tax credit carry-forward exists. The guidance provided
by this update becomes effective for the Company in fiscal 2016. The Company does not expect that the adoption of this guidance will have
a material effect on the Company’s financial statements.
In May 2014 and August 2015, the FASB issued an update to the authoritative guidance which establishes principles for reporting and disclosing
useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from
the entity’s contracts with customers. The guidance provided by this update becomes effective for the Company in fiscal 2020. The Company
does not expect that the adoption of this guidance will have a material effect on the Company’s financial statements.
(3) INVENTORIES:
The major components of inventories as of August 31, 2015 and 2014 are as follows:
(In Thousands)
2015
$139,859
Sugar, Agri-Products and Sugarbeet Seed
Unprocessed Sugarbeets
Operating Supplies and Maintenance Parts
$155,381
6,819
—
73,34266,605
$220,020
Total Inventories
2014
$221,986
The Company’s reserve for inventory obsolescence was $7.2 million and $14.3 million as of August 31, 2015 and 2014, respectively.
(4) NET PROPERTY AND EQUIPMENT:
Indirect costs capitalized were $1.5 million in 2015 and 2014. Construction period interest capitalized was $ .3 million and $ .5 million in 2015
and 2014, respectively. Depreciation expense was $49.0 million and $44.8 million in 2015 and 2014, respectively. The Company had outstanding
commitments totaling $6.0 million as of August 31, 2015, for equipment and construction contracts related to various capital projects.
As of August 31, 2015 and 2014, the Company had Land Improvement of $2.5 and $2.6 million, respectively, associated with certain landfills
at its factories. Depreciation expense associated with this obligation was $283,000 and $322,000 for the years ended August 31, 2015
and 2014, respectively. Accretion expense associated with this obligation was $122,000 and $124,000 for the years ended August 31, 2015
and 2014, respectively.
(5) NET PROPERTY AND EQUIPMENT HELD FOR LEASE:
ProGold owns a corn wet-milling facility that it leases under an operating lease which runs through December 31, 2017. Under the terms
of the operating lease, the lessee manages all aspects of the operations of the ProGold corn wet-milling facility.
Net Property and Equipment Held for Lease are stated at cost, net of accumulated depreciation. Depreciation expense was $11.6 million in 2015
and 2014. The components of Net Property and Equipment Held for Lease as of August 31, 2015 and 2014 are shown below:
(In Thousands)
20152014
Land and Land Improvements
$8,790 $8,492
Buildings
42,80442,379
Equipment 208,559210,327
Construction in Progress
In January 2015, the FASB issued an update to the authoritative guidance in regards to simplifying income statement presentation by eliminating
the concept of extraordinary items. The guidance provided by this update becomes effective for the Company in fiscal 2017. The Company
does not expect that the adoption of this guidance will have a material effect on the Company’s financial statements.
Less Accumulated Depreciation
In April 2015 and August 2015, the FASB issued an update to the authoritative guidance in regards to simplifying the presentation of debt
issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct
deduction from the carrying amount of that debt. The guidance provided by this update was adopted by the Company in fiscal 2015 resulting
in a reclassification of $2,177,000 from other assets to long-term debt as of August 31, 2014.
Future minimum payments to be received under the lease are as follows:
Net Property and Equipment Held for Lease
7781,885
(204,818)(197,108)
$56,113
$65,975
Fiscal year ending August 31, (In Thousands)
2016
$21,500
(2) RECEIVABLES:
201721,500
There was no single customer attributable to the Company that accounted for 10 percent or more of the Company’s total receivables
as of August 31, 2015 or 2014 or that accounted for 10 percent or more of the revenues of the Company for the years ended August 31,
2015 or 2014.
20187,167
Total
$50,167
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 the schedule above, including any extension(s) of the lease term but not to exceed 12 years. This incremental lease payment is not
included in the amounts shown above for the original lease.
ProGold has recorded a liability of $0 and $990,000 as of August 31, 2015 and 2014 respectively, due Cargill, Incorporated associated with
costs incurred on the replacement project through that date.
24
American Crystal Sugar Company 25
(6) INVESTMENTS IN MARKETING COOPERATIVES:
The short-term debt outstanding as of August 31, 2015 and 2014 is summarized below:
The Company has a 60 percent ownership interest and a 33 1/3 percent voting interest in United. The investment is accounted for using
the equity method. As of August 31, 2015, the Company’s investment in United was approximately $5.6 million. Substantially all sugar products
produced are sold by United as an agent for the Company. The amount of sales and related costs to be recognized by each owner of United
is allocated based on its pro rata share of sugar production for the year. The owners provide United with cash advances on an ongoing basis
for operating and marketing expenses incurred by United. The Company had outstanding advances to United of $22.5 million and $13.3 million
as of August 31, 2015 and 2014, respectively. The Company provides administrative services for United and is reimbursed for costs incurred.
The Company was reimbursed approximately $1.1 million and $1.0 million for services provided during fiscal years 2015 and 2014, respectively.
(In Thousands)
20152014
The Company has a 41 percent ownership interest and a 25 percent voting interest in Midwest. The investment is accounted for using the equity
method. As of August 31, 2015, the Company’s investment in Midwest was approximately $61,000. Substantially all sugarbeet pulp, molasses
and other agri-products produced are sold by Midwest as an agent for the Company. The amount of sales and related costs to be recognized
by each owner of Midwest is allocated based on its pro rata share of production for each product for the year. The owners provide Midwest
with cash advances on an ongoing basis for operating and marketing expenses incurred by Midwest. The Company had outstanding advances
due to Midwest of $3.8 million and $4.5 million as of August 31, 2015 and 2014, respectively. The Company provides administrative services
for Midwest and is reimbursed for costs incurred. The Company was reimbursed $93,000 and $108,000 for services provided during 2015
and 2014, respectively. The owners of Midwest are guarantors of an $11.0 million short-term line of credit Midwest has with CoBank, ACB.
As of August 31, 2015, Midwest had outstanding short-term debt with CoBank, ACB of $4.5 million, of which $2.6 million was the proportional
amount guaranteed by the Company.
The Company has performed a complete analysis and has determined that its investments in United and Midwest do not meet the criteria
of Variable Interest Entities and therefore such entities are not consolidated in the Company’s Consolidated Financial Statements.
(7) INVESTMENTS IN WEST COAST BEET SEED COMPANY:
The Company has a 15 percent ownership interest in West Coast Beet Seed Company (WCBS). The investment is accounted for on a cost basis.
As of August 31, 2015, the Company’s investment in WCBS was approximately $1,000 and is included in Other Assets on the Consolidated
Balance Sheets. WCBS contracts with growers for the production of sugarbeet seed per the requirements of the owners of WCBS. The owners
provide WCBS with cash advances on an ongoing basis for operating expenses incurred by WCBS. The Company had outstanding advances to
WCBS of $ 1.4 million and $ .5 million as of August 31, 2015 and 2014, respectively.
(8) LONG-TERM AND SHORT-TERM DEBT:
The long-term debt outstanding as of August 31, 2015 and 2014 is summarized below:
(In Thousands)
20152014
Commercial Paper, at fixed interest rate of .43% and .46%, due 9/9/15.
$67,045
$60,599
During the year ended August 31, 2015, the Company issued commercial paper to meet its short-term borrowing requirements. As of August 31,
2015, the Company had a seasonal line of credit through August 13, 2018, with a consortium of lenders led by CoBank, ACB of $350.0 million
along with an additional $60.0 million which can be utilized for either short-term or long-term borrowing purposes. As of August 31, 2015,
$15.2 million of the $60.0 million was utilized for long-term borrowing purposes. There was no outstanding balance with CoBank, ACB
as of August 31, 2015. The Company also has a line of credit with Wells Fargo Bank for $1.0 million, against which there was no outstanding
balance as of August 31, 2015. The Company’s commercial paper program provides short-term borrowings up to the amount of the CoBank,
ACB seasonal line of credit of which approximately $67.0 million was outstanding as of August 31, 2015. The Company had $3.8 million
in short-term letters of credit outstanding as of August 31, 2015. 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 unused line of credit as of August 31, 2015 was $325.0 million which includes $44.8 million that can also be utilized for long-term
borrowing purposes.
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. On October 1,
2013, the Company forfeited approximately 2.0 million hundredweight of 2012 crop sugar to the CCC in satisfaction of the $46.7 million
in outstanding non-recourse loans. As of August 31, 2015, the Company had no outstanding loans with the CCC and had the capacity to obtain
non-recourse loans from the CCC of approximately $65.8 million.
During the year ended August 31, 2014, the Company borrowed from the CCC and issued commercial paper to meet its short-term borrowing
requirements. As of August 31, 2014, the Company had a seasonal line of credit through August 13, 2018, with a consortium of lenders led
by CoBank, ACB of $350.0 million along with an additional $60.0 million which could be utilized for either short-term or long-term borrowing
purposes. As of August 31, 2014, $33.2 million of the $60.0 million was utilized for long-term borrowing purposes. There was no outstanding
balance with CoBank, ACB as of August 31, 2014. The Company also had a line of credit with Wells Fargo Bank for $1.0 million, against which
there was no outstanding balance as of August 31, 2014. The Company’s commercial paper program provided short-term borrowings up to the
amount of the CoBank, ACB seasonal line of credit of which approximately $60.6 million was outstanding as of August 31, 2014. The Company
had $3.5 million in short-term letters of credit outstanding as of August 31, 2014. Any borrowings under the commercial paper program along
with outstanding short-term letters of credit act to reduce the available credit under the CoBank, ACB seasonal line of credit by a commensurate
amount. The unused line of credit as of August 31, 2014 was $313.7 million which included $26.7 million that could also be utilized for long-term
borrowing purposes. As of August 31, 2014, the Company had no outstanding loans with the CCC and had the capacity to obtain non-recourse
loans from the CCC of approximately $112.7 million.
Term Loan from CoBank, ACB, due in varying amounts through fiscal 2027, with interest
at a fixed rate of 1.95%, with senior lien on substantially all non-current assets.
$20,000$
Term Loan from CoBank, ACB, due August 2018, with interest at a fixed rate of 1.42%,
through October 2015.
17,00030,000
(In Thousands, Except Interest Rates)
Term Loans from Insurance Companies, due in varying amounts through fiscal 2034, interest
at fixed rates of 4.93% to 7.42%, with senior lien on substantially all non-current assets.
Maximum Borrowings
$244,425
$291,150
60,00050,000
Average Borrowing Levels
$141,302
$192,587
Pollution Control and Industrial Development Revenue Bonds, due in varying amounts through
fiscal 2027, interest at fixed rates of 5.35% to 6.00% and varying rates of .03% and .07%
as of August 31, 2015, substantially secured by letters of credit.
—
71,99578,060
(2,047)
(2,177)
Total Long-Term Debt
166,948
155,883
Less Current Maturities
$
20152014
Average Interest Rates
Unamortized Bond Costs
Long-Term Debt, Net of Current Maturities
Maximum borrowings, average borrowing levels and average interest rates for short-term debt for the years ended August 31, 2015
and 2014, follow:
(335)(6,065)
166,613
$
149,818
0.83%
0.61%
The terms of the loan agreements contain prepayment penalties along with certain covenants related to, among other matters, the: level of
working capital; ratio of term liabilities to members’ investments; current ratio; interest coverage ratio; and investment in CoBank, ACB stock
in amounts prescribed by the bank. Substantially all non-current assets are pledged to the senior lenders to provide security to support the
Company’s seasonal and long-term financing. As of August 31, 2015 and 2014, the Company was in compliance with the terms of the loan
agreements.
Interest paid, net of amounts capitalized, was $8.3 million and $6.9 million for the years ended August 31, 2015 and 2014, respectively.
Minimum annual principal payments for the next five years are as follows:
(9) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES:
(In Thousands)
The Company, as a result of its operating and financing activities, is exposed to changes in foreign currency exchange rates and interest rates
which may adversely affect its results of operations and financial position. In seeking to minimize the risks and/or costs associated with such
activities, the Company may enter into derivative contracts.
2016$ 335
2017
$18 ,355
2018
$35 ,625
2019$ —
2020 $3,580
The Company has a long-term debt line of credit through August 13, 2018 with CoBank, ACB of $60.8 million along with an additional $60.0
million which can be utilized for either short-term or long-term borrowing purposes. As of August 31, 2015, the Company had an outstanding
loan with CoBank, ACB of $17.0 million and outstanding long-term letters of credit of $59.0 million. The unused long-term line of credit
as of August 31, 2015 was $44.8 million which can also be utilized for short-term borrowing purposes.
At August 31, 2014, the Company had a long-term debt line of credit through August 13, 2018 with CoBank, ACB of $60.8 million along with
an additional $60.0 million which could be utilized for either short-term or long-term borrowing purposes. As of August 31, 2014, the Company
had an outstanding loan with CoBank, ACB of $30.0 million and outstanding long-term letters of credit of $64.1 million. The unused long-term
line of credit as of August 31, 2014 was $26.7 million which could also be utilized for short-term borrowing purposes.
26
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. The fair value of the open contracts is recorded
in accumulated other comprehensive income (loss) in members’ investments. 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 .04% as of August 31, 2015, 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. The fair value of the cash flow hedge is recorded in accumulated other
comprehensive income (loss) and will be reclassified to interest expense over the life of the swap contract. No material ineffectiveness was
recognized in earnings during the years ended August 31, 2015 and 2014. The current year’s loss of $763,000 is classified as interest expense
on the statements of operations.
American Crystal Sugar Company 27
On October 1, 2014, the Company entered into an interest rate swap contract with CoBank, ACB associated with $20.0 million of long-term
debt with CoBank, ACB that matures from 2024 through 2027. The interest rate swap contract requires payment of a fixed interest rate
of 2.71 % and the receipt of a variable rate of interest based on the USD-Libor BBA index of .203 % as of August 31, 2015 on $20.0 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. The fair value of the cash flow hedge is recorded
in accumulated other comprehensive income/(loss) and will be reclassified to interest expense over the life of the swap contract. No material
ineffectiveness was recognized in earnings during the year ended August 31, 2015. The current period loss of $474,000 is classified as interest
expense on the statements of operations.
The following tables present the fair value of the Company’s derivatives and their Consolidated Balance Sheet location:
(In Thousands)
Fair Value of Asset Derivatives as of August 31
Balance Sheet Classification
Derivatives Designated as Hedging Instruments:
Foreign Currency Forward Contracts
Prepaid Expenses
Total Asset Derivatives
2015
2014
$2
$—
$
$—
2
(In Thousands)
Fair Value of Liability Derivatives as of August 31
20152014
Balance Sheet Classification
Derivatives Designated as Hedging Instruments:
Foreign Currency Forward Contracts
Interest Rate Contracts
Interest Rate Contracts
Other Current Liabilities $—$ 5
Other Current Liabilities 1,163 715
Other Long-Term Liabilities
1,047 863
Total Liability Derivatives
$2,210
$
1,583
The following schedule reflects the percentage of pension plan assets by asset class as of the latest measurement date, August 31, 2015:
Percentage of Pension Plan Assets by Asset Class as of August 31, 2015
Asset Class
Target Range
Actual Allocation
Domestic Equity
35.0%–55.0%
45.2%
International Equity
15.0%–25.0%
20.0%
Fixed Income
20.0%–40.0%
29.6%
Cash & Other
0.0%–10.0%
5.2%
There have been no changes in the valuation methodologies used at August 31, 2015 and 2014. The Plan’s investment in the common/collective
trust consists of investments in the WF Equity Index N Fund (Fund) managed by Wells Fargo Bank NA, The Principal Diversified Real Asset Fund
(Principal) managed by The Principal and the WTC-CIF Diversified Inflation Hedges (WTC-CIF) managed by Wellington Management. The net
asset value of the Fund is determined daily. All earnings, gains and losses of the Fund are reflected in the computation of the daily unit value
and are realized by the plan upon withdrawal from the Fund. The fund has a daily redemption frequency and redemption notice period with
no unfunded commitments. WTC-CIF and Principal use the accrual method of accounting in calculating net asset value of the funds daily based
on a market, cost, or income approach depending on the underlying investment. All earnings, gains and losses are reflected in the computation
of the monthly unit value and are realized by the plan upon withdrawal. Registered investment companies are valued at the net asset value
of shares held by the Plan at year end based on quoted market prices. The money market fund is valued at quoted market price, which is cost
plus accrued interest.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future
fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants,
the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair
value measurement at the reporting date.
To develop the expected long-term rate of return on assets assumption, the Company considered the historical returns and the future
expectations for returns for each asset class, as well as, the target asset allocation of the pension portfolio. This resulted in the selection
of the 7.0% long-term rate of return on assets assumption.
(10) OPERATING LEASES:
The following schedules reflect the fair values of the pension plan assets by major category as of August 31, 2015 and 2014:
The Company is party to operating leases for such items as rail cars, computer hardware and vehicles. Cargill, Incorporated has assumed
responsibility for the payments on a rail car lease for the duration of that lease and accordingly, the lease payments are not included in the
table below. Operating lease expense was $1.8 million for the years ended August 31, 2015 and 2014. Future minimum payments under these
obligations are as follows:
(In Thousands)
Fiscal year ending August 31, (In Thousands)
2016
$
1,541
2017
1,180
2018
1,143
2019
1,103
2020
1,006
Thereafter
839
Total
$
Plan Assets at Fair Value August 31, 2015
Level 1
Common/collective trusts
Equity index fund
$
Diversified inflation hedges
Level 2
—
$
—
Level 3
57,885
$
9,530
Total
—
$
—
57,885
9,530
Registered investment company
Fixed income
68,359
Domestic equity
46,440
International equity
46,206
—
—
—
—
68,359
—
46,440
—
46,206
Money market fund
—
—
Total Plan Assets at Fair Value
$
2,492
163,497
$
67,415
$
—
$
2,492
230,912
6,812
(11) EMPLOYEE BENEFIT PLANS:
(In Thousands)
Plan Assets at Fair Value August 31, 2014
Company-Sponsored Defined Benefit Pension and Other Post-Retirement Benefit Plans
Substantially all employees who meet eligibility requirements of age, date of hire and length of service are covered by a Company-sponsored
retirement plan. As of August 31, 2015, the pension plans were funded as required by the funding standards set forth by the Employee
Retirement Income Security Act (ERISA). The Company also has non-qualified supplemental executive retirement plans for certain employees.
Employees of the Company who are not members of a collective bargaining unit and who are newly hired, or re-hired, and employees who
transfer from a union position to a non-union position on or after September 1, 2007, are not eligible for participation in the defined benefit
pension plan. These employees participate in a defined contribution plan as described later in this note.
Registered investment company
Fixed income
71,045
Domestic equity
47,274
International equity
46,650
—
—
—
—
71,045
—
47,274
—
46,650
Money market fund
—
—
The Company’s Investment Committee has the responsibility of managing the Company’s pension plans and trust. Investment allocation
decisions are made by the Investment Committee, pursuant to an Investment Policy (Policy) that includes a target strategic asset allocation.
The Investment Committee is committed to diversification to reduce the risk of large losses. The Policy allows some flexibility within the target
asset allocation in recognition that market fluctuations may cause the allocation to a specific asset class to move up or down within a range.
The Policy is reviewed periodically by the Investment Committee. The asset allocation targets within the Plan, include four areas; Domestic
Equity, International Equity, Fixed Income and Cash & Other. Domestic and International Equity consists primarily of publicly traded U.S.
and Non-U.S. equities, respectively. The Cash & Other allocation is allowed only as necessary for impending benefit payments, lump sum
contributions made by the company, or as authorized by the Investment Committee. The Policy does not allow direct use of derivatives,
however, the Plan invests entirely in commingled or mutual funds, which may allow investment in derivatives. The stated goal is for each
component of the plan to earn a rate of return greater than its corresponding benchmark. Progress of the plan against its return objectives
will be measured over a full market cycle.
28
Level 1
Level 2
Common/collective trusts
Equity index fund
$
—
$
Diversified inflation hedges
—
Total Plan Assets at Fair Value
$
644
165,613
$
Level 3
59,212
$
11,743
70,955
$
Total
—
$
—
—
$
59,212
11,743
644
236,568
The development of the discount rate was based on a bond matching model whereby a hypothetical portfolio of bonds with an “AA” or better
rating by a nationally recognized debt rating agency was constructed to match the expected benefit payments under the Company’s pension
plans through the year 2045. The reinvestment rate for benefit cash flow occurring after 2045 was discounted back to the year 2045
at a rate consistent with the yields on long-term zero-coupon bonds. The resulting present value was treated as additional benefit cash flow for
the year 2045 and consistently applied as any other benefit cash flow during the bond matching process.
American Crystal Sugar Company 29
The Company has a medical plan and a Medicare supplement plan which are available to certain union and non-union retirees. The costs of
these plans are shared by the Company and plan participants. The Company’s post-retirement plan for certain non-union employees currently
coordinates with Medicare’s medical coverage and provides tiered prescription drug coverage. The Company also participates in the Federal
Early Retiree Reinsurance Program which provides reimbursement of medical expenses for early and disability retirees between the ages
of 55 and 65 who are not covered by Medicare.
Weighted Average Assumptions as of August 31Pension
Post-Retirement
The following schedules set forth a reconciliation of the changes in the plans’ benefit obligation and fair value of assets for the years ending
August 31, 2015 and 2014, and a statement of the funded status and amounts recognized in the Balance Sheets and Accumulated Other
Comprehensive Income as of August 31, 2015 and 2014:
(In Thousands)
PensionPost-Retirement
2015201420152014
Change in Benefit Obligation
2015201420152014
$242,932
Obligation at the Beginning of the Year
Service Cost
4,3663,535 313 472
Interest Cost
9,48810,202
Plan Amendments
16
—
The following schedule reflects the expected pension and post-retirement benefit payments during each of the next five years and the aggregate
for the following five years:
Plan Participant Contributions
—
— 568 639
Government Subsidies
—
—
(In Thousands)
Actuarial (Gain) Loss
4.30%4.00%4.30%4.00%
Expected Return on Plan Assets
7.00%7.00% N/AN/A
Rate of Compensation Increase
3.50%3.50% N/AN/A
2016
PensionPost-Retirement
$ 11,173
$
1,254
Benefits Paid Obligation at the End of the Year
$218,787
$19,025
Discount Rate
5,32524,602
$29,377
7361,369
—(9,808)
4
52
(873) (480)
(12,412)(14,194) (1,384)(2,596)
$249,715
$242,932
$18,389
$236,568
$212,663
$—$ —
2017
11,385
1,229
2018
11,931
1,224
Change in Plan Assets
2019
15,578
1,303
Fair Value at the Beginning of the Year
2020
13,077
1,338
Actual Return on Plan Assets
6,581
Plan Participant Contributions
—
— 568 639
12,929
Government Subsidies
—
—
Employer Contributions
10,6805,488 8121,905
Benefits Paid
(12,412)(14,194) (1,384)(2,596)
Fair Value at the End of the Year
2021-202573,294
Total
$
136,438
$
The Company expects to make contributions of approximately $7.5 million to the defined benefit pension plans, approximately $99,000 related
to Supplemental Executive Retirement Plans and approximately $1.3 million to the post-retirement plans during the next fiscal year.
The following schedules provide the components of the Net Periodic Pension and Post-Retirement Costs for the years ended August 31,
2015 and 2014:
Components of Net Periodic Pension Cost (In Thousands)
20152014
$4,366 $3,535
Service Cost
(3,924)32,611
$230,912
$236,568
$19,025
—
4
—
52
$—$ —
Funded Status
Funded Status as of August 31
$(18,803) $(6,364)
$(18,389)
$(19,025)
Net Amount Recognized
$(18,803) $(6,364)
$(18,389)
$(19,025)
Amounts Recognized in the Balance Sheets
Interest Cost
9,48810,202
Expected Return on Plan Assets
(16,266)(14,688)
Amortization of Prior Service Costs
238 238
Current Liabilities
(7,336)(3,896)(1,254)(1,181)
3,7663,694
Noncurrent Liabilities
(11,467)(5,436)
(17,135)(17,844)
$1,592 $2,981
Net Amount Recognized
Amortization of Net Loss
Net Periodic Pension Cost
20152014
Components of Net Periodic Post-Retirement Cost (In Thousands)
$313$ 472
Service Cost
Interest Cost
7361,369
Amortization of Prior Service Costs
(1,766) (364)
Amortization of Net (Gain) Loss
(1,312)(1,436)
Net Periodic Post-Retirement Cost
$(2,029)$
41
Prior service costs are amortized over the lesser of seven years or the length of the union contract that included the benefit change.
For measurement purposes, a 6.5 percent annual rate of increase in the per capita cost of covered healthcare benefits for participants under
age 65 was assumed for 2015. The rate is assumed to decline to 4.5 percent over the next five years. For participants age 65 and older,
a 4.5 percent annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2015. The rate is assumed
to remain constant at 4.5 percent over the next five years.
Assumed healthcare trends can have a significant effect on the amounts reported for healthcare plans. A one percent change in the assumed
healthcare trend rates would have the following effects:
(In Thousands)
Effect on total service and interest cost components of net periodic post-retirement benefit costs.
Effect on the accumulated post-retirement benefit obligation.
1% Increase
$
$
141 2,178
1% Decrease
$
$
(118)
(1,808)
Noncurrent Assets
$
$
— $2,968 $
(18,803) $(6,364)
—$ —
$(18,389)
$(19,025)
Prior Service Cost Recognized in Accumulated
Other Comprehensive Income
Prior Service Cost Beginning of the Year
$(758)$(996)$10,902 $1,458
Recognized in Periodic Cost
238 238
(1,766) (364)
Amount Arising During the Year
(16) —
—9,808
Prior Service Cost End of the Year
$(536)$(758) $9,136 $10,902
Accumulated Gain (Loss) Recognized in Accumulated
Other Comprehensive Income
Accumulated Gain (Loss) Beginning of the Year $(50,949)
$(47,963)
$9,176 $10,132
Recognized in Periodic Cost
3,7663,694(1,312)(1,436)
Amount Arising During the Year
(25,515)(6,680) 873 480
Accumulated Gain (Loss) End of the Year
$(72,698)
$(50,949)
$8,737 $9,176
The estimated amounts that will be amortized from Accumulated Other Comprehensive Income at August 31, 2015, into net periodic benefit
cost in fiscal 2016 are as follows:
(In Thousands)
Prior Service Cost (Credit)
PensionPost-Retirement
$
235
$
(1,766)
Accumulated (Gain) Loss
6,818
(1,530)
Total
7,053
(3,296)
$
$
The accumulated pension benefit obligation was $238.5 million and $231.3 million as of August 31, 2015 and 2014, respectively.
30
American Crystal Sugar Company 31
Defined Contribution Plan
The Company has a qualified 401(k) plan for all eligible employees. Participants may contribute a percentage of their gross earnings each pay
period as provided in the participation agreement. The Company matches the non-union and eligible union year-round participants’ contributions
up to 4 percent and 2 percent, respectively, of their gross earnings. The plan provides for immediate vesting of these benefits. The Company’s
contributions for this element of the plan totaled $1.9 million and $2.1 million for the years ended August 31, 2015 and 2014, respectively.
Employees of the Company who are not members of a collective bargaining unit and who are newly hired, or rehired, and employees who
transfer from a union position to a non-union position on or after September 1, 2007, are no longer eligible for participation in the defined
benefit pension plan but receive a 4% non-elective Company contribution to the 401(k) plan. These Company contributions have a six year
vesting schedule. The Company made contributions of $0.3 million for the year ended August 31, 2015. Due to forfeitures, the Company did not
make any contributions for this element of the plan for the year ended August 31, 2014.
Long-Term Incentive Plan
The Company’s Long-Term Incentive Plan provides deferred compensation to certain key executives of the Company. The plan creates financial
incentives that are based upon contract rights which are available to the executive under the terms of the plan, the value of which is determined
by the Board of Directors. During 2015, 10.00 vested contract rights were exercised. In 2015, 109.84 contract rights were granted at a stated
value of $2,700 per contract right. At August 31, 2015, the Board of Directors increased the value of the 1,117.43 contract rights previously
granted and outstanding from $1,800 to $2,700 per contract right. As of August 31, 2015, there were 1,227.27 contract rights issued and
outstanding at a stated value of $2,700 per contract right, of which 929.53 were vested.
(12) MEMBERS’ INVESTMENTS:
The following schedule details the Preferred Stock and Common Stock as of August 31, 2015 and 2014:
Par
Value
Shares
Authorized
Shares Issued
& Outstanding
Summarized financial information concerning the Company’s reportable segments is shown below:
(In Thousands)
For the Year Ended August 31, 2015
Sugar
$
$
Common Stock:
August 31, 2015
August 31, 2014
$
$
76.77
76.77
10.00
10.00
600,000
600,000
4,000
4,000
498,570
498,570
2,667
2,738
The components of Accumulated Other Comprehensive (Loss) (AOCL), before tax, by component consist of the following:
Year Ended August 31, 2015
(In Thousands)
Pension and Other
Post-Retirement
Benefits
Balance August 31, 2014
$ (31,629)
Other Comprehensive Income
(Loss) Before Reclassifications
Equity Method
Investees
$
(24,658)
(5,689)
Interest Rate
Contracts
$
407
(1,578)
Foreign Currency
Forward Contracts
$
(1,869)
(5)
Total
$
(150)
(38,901)
(26,270)
Reclassifications to
Consolidated Net Proceeds19262 4051,237 1572,725
Net Current-Period Other
Comprehensive Income (Loss)
(23,732)
Balance, August 31, 2015
$ (55,361)
Year Ended August 31, 2014
(In Thousands)
Pension and Other
Post-Retirement
Benefits
Balance August 31, 2013
$ (37,369)
Other Comprehensive Income
(Loss) Before Reclassifications
812
$
(4,877)
(632)
$
(2,210)
$
7
2
$
(23,545)
(62,446)
Net Revenue from External Customers
$ 1,197,933
$
711,466$
10,815$
722,281
Depreciation and Amortization
$
49,529
$
11,556
$
61,085
Interest Income
$
225
$
1
$
226
$
3,608
(4,430)
Interest Rate
Contracts
$
(1,578)
(1,824)
$
(508)
7
Total
$
48
(43,616)
1,570
Reclassifications to
Consolidated Net Proceeds12,132 2 319 754 (60)3,145
Net Current-Period Other
Comprehensive Income (Loss)
5,740
$ (31,629)
$
(1,259)
(5,689)
$
246
(1,578)
$
(12)
(5)
$
4,715
(38,901)
$
1,221,100
Interest Expense
$
8,498
$
2
$
8,500
$
(1,760)
$
—
$
(1,760)
Other Income/(Expense), Net
$
87
$
—
$
87
Consolidated Net Proceeds
$
416,003
$
10,721
$
426,724
Capital Additions
$
62,702$
2,490$
65,192
For the Year Ended August 31, 2014
Sugar
$
LeasingConsolidated
Net Revenue from External Customers
$ 1,363,602
Gross Proceeds
$
813,981$
12,379$
826,360
Depreciation and Amortization
$
24,183
$
1,387,785
Interest Income
Interest Expense
45,511
$
11,588
$
$
104
$
—
$
104
$
6,816
$
2
$
6,818
57,099
Loss from Equity Method Investees
$
(729)
$
—
$
(729)
Other Income/(Expense), Net
$
141
$
—
$
14 1
Consolidated Net Proceeds
$
495,052
$
12,282
$
507,334
Capital Additions
$
79,047$
3,272$
82,319
(In Thousands)
As of August 31, 2015
Sugar
LeasingConsolidated
Property and Equipment, Net
$
483,288
$
—
$
483,288
Assets Held for Lease, Net
$
—
$
56,113
$
56,113
Segment Assets
$
819,202$
56,982$
876,184
As of August 31, 2014
Foreign Currency
Forward Contracts
23,167
Loss from Equity Method Investees
(In Thousands) Equity Method
Investees
$
LeasingConsolidated
Gross Proceeds
(In Thousands)
Preferred Stock:
August 31, 2015
August 31, 2014
Balance, August 31, 2014
(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. 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.
Sugar
LeasingConsolidated
Property and Equipment, Net
$
471,053
$
—
$
471,053
Assets Held for Lease, Net
$
—
$
65,975
$
65,975
Segment Assets
$
813,287$
67,311$
880,598
(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.
1
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 August 31, 2015, was approximately $176.0 million in comparison to the carrying value of $169.0 million.
The fair value of the long-term debt as of August 31, 2014, was approximately $139.3 million in comparison to the carrying value of $158.1 million.
2
Primarily related to amortization of actuarial gains/loss for the years ended August 31, 2015 and 2014 totaling ($2,454) and ($2,258), respectively, and amortization of prior service
(cost)/credit of $1,528 and $126 for the years ended August 31, 2015 and 2014, respectively.
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 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.
Amounts reclassified from AOCL for pension and other post-retirement benefits are recorded in cost of sales on the Consolidated Statements of Operations. Amounts reclassified
from AOCL for the equity method investees and interest rate contracts are recorded in selling, general and administrative expenses and interest expense, net, respectively
on the Consolidated Statements of Operations. See note 9 on derivative instruments and hedging activities for reclassification of the foreign currency forward contracts.
32
American Crystal Sugar Company 33
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 August 31, 2015, was an asset of approximately $2,000.
The fair value of the open contracts as of August 31, 2014, was a liability of approximately $5,000. 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 contracts as of August 31, 2015, was a liability of approximately $2.2 million. The fair value of the interest rate
contract as of August 31, 2014, was a liability of approximately $1.6 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 August 31, 2015 and 2014.
(In Thousands)
Fair Value of Assets as of August 31, 2015
Level 1
Level 2
—
$
—
Total
Foreign Currency Forward Contracts
$
2
Total
$
2$ —$ —$
(In Thousands)
$
Level 3
$
2
2
Fair Value of Liabilities as of August 31, 2015
Level 1
Level 2
Level 3
Total
Interest Rate Contracts
$ —$
2,210$ —$
2,210
Total
$ —$
2,210$ —$
2,210
(In Thousands)
Fair Value of Liabilities as of August 31, 2014
Level 1
Foreign Currency Forward Contracts
$
Interest Rate Contracts
Total
5
$
—
$
Level 2
Level 3
—
$
1,578
Total
—
$
—
5
1,578
5 $
1,578$ —$
1,583
(15) INCOME TAXES:
As of August 31, 2015 and 2014, the Company had no unrecognized tax benefits. Any future accrued interest or penalties related to
unrecognized tax benefits will be recognized in income tax expense if incurred. The Company is no longer subject to U.S. Federal income
tax examinations by tax authorities for fiscal years 2011 and earlier. The Company is no longer subject to state income tax examinations
by tax authorities for fiscal years 2011 and earlier.
Total income tax payments were $3.4 million and $1.8 million for the years ended August 31, 2015 and 2014, respectively.
(16) 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, 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.
On February 23, 2015, the Company received an Alleged Violation Letter from the Minnesota Pollution Control Agency (MPCA) regarding
the industrial stormwater controls at several remote beet storage sites in Minnesota. The Company is currently investigating the alleged
violations and working with the MPCA. 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.
(17) LEGAL MATTERS:
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.
(18) SUBSEQUENT EVENTS:
The Company has evaluated events through the date that the financial statements were available to be issued, October 14, 2015, for potential
recognition or disclosure in the August 31, 2015, financial statements.
These notes are an integral part of the accompanying Consolidated Financial Statements.
The Company’s net deferred tax liability included in Other Liabilities on the Company’s Balance Sheets as of August 31, 2015 and 2014
is reflected below:
(In Thousands)
20152014
Deferred Tax Assets related to non-patronage source temporary differences
$4,242 $4,572
Deferred Tax Liability related to non-patronage source temporary differences
6,2407,965
$1,998 $3,393
Net Deferred Tax Liability Income tax expense for the years ended August 31, 2015 and 2014 is as follows:
(In Thousands)
Current Income Taxes
20152014
$
Deferred Income Taxes
Total Income Tax Expense
$
725
$
1,603
1,3951,017
2,120 $2,620
A reconciliation of the Company’s effective tax rates for the years ended August 31, 2015 and 2014 is shown below:
20152014
Federal Tax Expense at Statutory Rate
34.0 %34.0 %
State Tax Expense at Statutory Rate
2.0 2.0
Payments to Members
(35.4)(35.3)
Other, Net
(0.1)(0.2)
Effective Tax Rate
34
0.5 %0.5 %
American Crystal Sugar Company 35
Distribution of Net Proceeds Attributable to American Crystal Sugar Company
For the Years Ended August 31
(In Thousands, Except Per-Ton-Purchased and Per-Acre-Harvested Amounts)
(Not Covered by Independent Auditors’ Report)
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
Net Proceeds Attributable to American Crystal Sugar Company
$421,471 $501,316 $789,474
$ 548,253 $804,831 $526,112 $536,151 $542,693 $601,392 $445,091
Non-Member (Income) Loss
(2,603)
(4,586)
(8,597)
(10,895)
(8,74 1)
(5,426)
(2,309)
4,787
(2,286)
(2,246)
Member Gross Beet Payment
Unit Retains
$
Member Net Beet Payment
418,868 496,730 780,877 537,358 796,090 520,686 533,842 547,480 599,106 442,845
(19,021) (21,948) (34,221) (27,453) (43,574) (29,531) (31,024) (23,260) (35,705) (26,417)
399,847 $474,782 $746,656
$ 509,905 $752,516 $491,155 $502,818 $524,220 $563,401 $416,428
Per Ton Purchased:
Net Proceeds Attributable to American Crystal Sugar Company
$44.29
$45.65
$69.16 Non-Member (Income) Loss
Member Gross Beet Payment
Unit Retains
(0.28)(0.42)(0.75) (1.19)(0.80)(0.55)(0.22) 0.41(0.19)(0.25)
44.01
(2.00)
45.23
(2.00)
68.41
(3.00)
$42.01
$43.23
$65.41
Member Net Beet Payment
Member Tons Harvested
$ 59.86
$73.82
$53.42
$51.80
$46.63
$50.49
$50.50
58.67
(3.00)
73.02
(4.00)
52.87
(3.00)
51.58
(3.00)
47.04
(2.00)
50.30
(3.00)
50.25
(3.00)
$ 55.67
$69.02
$49.87
$48.58
$45.04
$47.30
$47.25
9,51710,98211,415 9,15810,902 9,84910,34911,63911,911 8,813
Member Gross Beet Payment Per Acre Harvested
$1,019
$1,140
$1,854
$ 1,212
$1,923
$1,177
$1,310
$1,107
$1,278
$ 947
Member Net Beet Payment Per Acre Harvested
$972
$1,090
$1,773
$ 1,151
$1,818
$1,110
$1,234
$1,060
$1,201
$ 890
Gross Beet Payment
(MILLIONS of dollars)
$800
$80
$700
$70
$600
$60
$500
$50
$400
$40
$300
$200
$20
$100
$10
$0
$0
Gross Beet Payment
Per Average Acre (DOLLARS per acre)
$2000
$1800
$1600
(MILLIONS of dollars)
Net Beet Payment Per
Average Ton (DOLLARS per ton)
$800
$70
$700
$60
$1200
$500
$1000
$400
$1800
$1600
$50
$1400
$1200
$40
$1000
$800
$300
$600
$200
$0
06 07 08 09 10 11 12 13 14 15
$600
$20
$200
$400
Net Beet Payment Per
Average Acre (DOLLARS per acre)
$2000
$30
$800
06 07 08 09 10 11 12 13 14 15
Net Beet Payment
$600
$1400
$30
06 07 08 09 10 11 12 13 14 15
36
Gross Beet Payment
Per A
verage Ton (DOLLARS per ton)
$400
$100
$10
$0
$0
06 07 08 09 10 11 12 13 14 15
$200
$0
06 07 08 09 10 11 12 13 14 15
06 07 08 09 10 11 12 13 14 15
American Crystal Sugar Company 37
Selected Financial Data and Certain Statistics
For the Years Ended August 31
(In Thousands, Except Ratios, Per-Acre-Harvested and Percentage Amounts)
(Not Covered by Independent Auditors’ Report)
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
Net Revenue
$1,221,100
Total Assets
$876,184 $880,598 $950,985
$ 899,480 $878,107 $788,743 $761,258 $813,299 $875,315 $839,997
Total Members’ Investments
$378,550 $408,095 $417,208
$ 340,190 $361,499 $330,610 $339,528 $391,115 $395,620 $379,355
Long-Term Debt, Net of Current Maturities
$166,613 $149,818 $128,060
$ 128,360 $128,640 $140,698 $143,073 $157,80 1 $ 157,974 $200,037
Ratio of Debt to Total Members’ Investments
$1,387,785
$1,603,404
$ 1,479,095
$1,542,777
$1,203,897
$1,200,229
$1,232,832
$1,222,857
$1,005,716
.44:1.37:1.31:1 .38:1.36:1.43:1.42:1.40:1.40:1.53:1
Interest Expense, Net
$8,500
$6,818
$9,694
Property and Equipment Additions,
Net of Retirements
$62,880$ 79,336 $ 77,748
$ 52,080$ 64,162 $ 73,512 $ 47,687 $ 45,188 $ 63,032 $ 45,453
Depreciation and Amortization
$61,085 $ 57,099 $ 55,312
$ 54,072$ 58,333 $ 55,580 $ 55,046 $ 58,197 $ 57,481 $ 56,753
Working Capital
$35,937 $ 43,498 $ 55,799
$ 70,849$ 53,110 $ 53,994 $ 50,482 $ 57,775 $ 36,929 $ 58,214
$ 8,165
$9,684
$9,012
$
10,058
$
14,750
$
20,281
$
19,096
Red River Valley Statistics — Member Business
Acres Harvested
Tons Purchased
411
436
Tons Purchased per Acre Harvested
23.1
25.2
Sugar Content of Sugarbeets
17.4%
17.3%
Sugar Hundredweight Produced
Pulp Tons Produced
421
443
9,517 10,982 11,415
27.1
408
494
469
468
9,849 10,349
442
11,639
11,911
8,813
20.7
26.3
22.3
25.4
23.5
19.1%18.0%
18.1%
16.7%
17.6%
18.1%
18.2%
18.0%
26,051 33,494 27,386 29,611
27,255 30,934 34,568
378
414
9,158 10,902
417
450
334
493
436
25.4
18.8
34,276
34,814
27,289
460
519
556
448
Molasses Tons Produced
19
60
167
98
22
27
36
107
124
26
CSB Tons Produced
199
197
168
156
187
158
166
164
164
154
Betaine Tons Produced
14
19
19
14
20
16
19
19
22
21
Net Revenue
Members’ Investments
Long-Term Debt and D
ebt/Equity
(MILLIONS of dollars)
(MILLIONS of dollars)
(MILLIONS of dollars)
$1,600
$450
$1,400
$400
$350
$1,200
$300
$1,000
1.50
$250
1.25
$200
1.00
$200
$600
$150
0.75
$100
0.50
$50
0.25
$100
$200
$50
$0
$0
06 07 08 09 10 11 12 13 14 15
30
$100
06 07 08 09 10 11 12 13 14 15
$0
06 07 08 09 10 11 12 13 14 15
0
Sugar Content o
f Sugarbeets
(PERCENT)
20%
25
16%
$80
20
12%
15
8%
$40
$150
$400
Tons Purchased Per Acre
Harvested (TONS per acre)
$60
$250
$800
38
$300
Property and Equipment Additions,
Net of Retirements (MILLIONS of dollars)
10
$20
4%
5
0%
0
$0
06 07 08 09 10 11 12 13 14 15
06 07 08 09 10 11 12 13 14 15
06 07 08 09 10 11 12 13 14 15
American Crystal Sugar Company 39
Business Information
EXECUTIVE PERSONNEL
ANNUAL MEETING
OPERATING FACILITIES
David Berg
President and Chief
Executive Officer
The 2015 Annual Meeting
of the members will be held
December 3, 2015, at the
Holiday Inn, Fargo, ND
CROOKSTON FACTORY
1201 U.S. 75
Crookston, MN 56716
Lisa Borgen
Vice President
Administration
Brian Ingulsrud
Vice President
Agriculture
Teresa Warne
Vice President
Finance
Kevin Price
Vice President
Government Affairs
Thomas Astrup
Vice President
Operations
Daniel Mott
Secretary and
General Counsel
Samuel Wai
Treasurer
Assistant Secretary
Steve Rosenau
Assistant Treasurer
Assistant Secretary
David Malmskog
Assistant Treasurer
Assistant Secretary
Lisa Maloy
Assistant Treasurer
Assistant Secretary
Lois Wood
Assistant Treasurer
Assistant Secretary
AUDITORS
CliftonLarsonAllen LLP
Stevens Point, WI
LEGAL COUNSEL
Fredrikson & Byron PA
Minneapolis, MN
SHAREHOLDER
INFORMATION
The Treasury Department
can help members with beet
payments, transferring shares,
changes of address, and similar
matters. For assistance, contact:
Karen Brown
Stockholder Accounting
Supervisor
(218) 236-4432
FINANCIAL
INFORMATION
For information regarding
American Crystal business
operations or financial
reports, shareholders
should contact:
Teresa Warne
Vice President
Finance
(218) 236-4364
NEWS MEDIA INQUIRIES
News media representatives
and others needing
information about American
Crystal corporate activities
should contact:
Jeff Schweitzer
Public Relations Manager
(218) 236-4492
Chris Patullo
Director, Factory
Operations
(218) 281-0142
Jerry Christenson
Agronomy Manager
(218) 281-0107
DRAYTON FACTORY
8152 Old Highway 44
Drayton, ND 58225
Al Zola
Factory Manager
(701) 454-3230
Tom Newcomb
Agronomy Manager
(701) 454-3238
EAST GRAND FORKS FACTORY
1020 Business Hwy 2
East Grand Forks, MN 56721
Lloyd Kennedy
Factory Manager
(218) 773-5124
Jerry Christenson
Agronomy Manager
(218) 281-0107
HILLSBORO FACTORY
121 Hwy 18 NE
Hillsboro, ND 58045
Brad Carlson
Factory Manager
(701) 436-3103
Greg Richards
Agronomy Manager
(218) 291-5472
MOORHEAD FACTORY
2500 North 11th Street
Moorhead, MN 56560
Randy Axtman
Factory Manager
(218) 291-5431
Greg Richards
Agronomy Manager
(218) 291-5472
SIDNEY SUGARS FACTORY
35140 County Road 125
Sidney, MT 59270
David Garland
General Manager
(406) 433-9333
Russ Fullmer
Agricultural Manager
(406) 433-9310
40
MARKETING
UNITED SUGARS
CORPORATION HEADQUARTERS
7803 Glenroy Road, Suite 300
Bloomington, MN 55439
(952) 896-0131
Mathew Wineinger
President
Mike Kerber
Vice President
Sales and Marketing
Consumer
Steve Hines
Vice President
Supply and Operations Planning
Dirk Swart
Executive Vice President
Sales and Marketing
Industrial
Kae Kaske
Vice President
Finance
MIDWEST AGRI-COMMODITIES
COMPANY HEADQUARTERS
999 Fifth Avenue, Suite 500
San Rafael, CA 94901
(415) 259-2720
Andy Ford
President
Giving Back
Bryan Edwardson
Vice President
North American Operations
Hudi Kobrinsky, Assistant Chemist
Camp KACE Volunteer
Lake Park, MN
Kevin Christensen
Vice President
Finance
Hudi has been involved in Kamp KACE (Kids
Against Cancer Everywhere) most of his life.
He also volunteers at the March of Dimes
Black Bib Affair event and the Children’s
Miracle Network annual telethon.
An Assistant Chemist at the East Grand Forks
factory, Hudi uses his analytical skills in
performing specialized waste water and sugar
quality lab tests.
American Crystal Sugar Company 41
101 North Third Street • Moorhead, Minnesota 56560 • www.crystalsugar.com