10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 000-52421

ADVANCED BIOENERGY, LLC

(Exact name of Registrant as Specified in its Charter)

Delaware	20-2281511
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

8000 Norman Center Drive, Suite 610

Bloomington, Minnesota 55437

(763) 226-2701

(Address, including zip code, and telephone number, including area code, of Registrant’s Principal Executive Offices)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of May 1, 2014, the number of outstanding units was 25,410,851.

ADVANCED BIOENERGY, LLC

FORM 10-Q

Index

	Page
Part I. Financial Information
Item 1. Financial Statements		3
Consolidated Balance Sheets		3
Consolidated Statements of Operations		4
Consolidated Statement of Changes in Members’ Equity		5
Consolidated Statements of Cash Flows		6
Notes to Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures About Market Risk		33
Item 4. Controls and Procedures		34
Part II. Other Information
Item 1. Legal Proceedings		34
Item 1A. Risk Factors		34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3. Defaults Upon Senior Securities		35
Item 4. Mine Safety Disclosure		35
Item 5. Other Information		35
Item 6. Exhibits		36
Signatures		36
Exhibit Index		37

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ADVANCED BIOENERGY, LLC & SUBSIDIARIES

Consolidated Balance Sheets

(Dollars in thousands)

	March 31,			September 30,
	2014			2013
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	25,375		$	27,796
Accounts receivable:
Trade accounts receivable		7,933			8,541
Other receivables		106			108
Inventories		5,254			4,538
Prepaid expenses		969			741
Current portion of restricted cash		13,785			10,961
Total current assets		53,422			52,685
Property and equipment, net		53,606			58,645
Other assets		1,051			1,211
Total assets	$	108,079		$	112,541
LIABILITIES AND MEMBERS’ EQUITY
Current liabilities:
Accounts payable	$	4,975		$	5,745
Accrued expenses		3,570			3,770
Distribution payable		—			7,877
Current portion of long-term debt (stated principal amount of $2,980 and $71,735 at March 31, 2014 and September 30, 2013, respectively)		5,450			77,847
Total current liabilities		13,995			95,239
Other liabilities		64			79
Long-term debt (stated principal amount of $62,918 at March 31, 2014)		65,287			—
Total liabilities		79,346			95,318
Members’ equity:
Members’ capital, no par value, 25,410,851 units issued and outstanding		60,835			60,835
Accumulated deficit		(32,102	)		(43,612	)
Total members’ equity		28,733			17,223
Total liabilities and members’ equity	$	108,079		$	112,541

See notes to consolidated financial statements.

3

ADVANCED BIOENERGY, LLC & SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per unit data)

(Unaudited)

	Three Months Ended						Six Months Ended
	March 31,			March 31,			March 31,			March 31,
	2014			2013			2014			2013
Net sales
Ethanol and related products	$	51,720		$	60,399		$	99,707		$	119,890
Other		180			993			430			1,243
Total net sales		51,900			61,392			100,137			121,133
Cost of goods sold		45,612			61,232			85,710			123,519
Gross profit (loss)		6,288			160			14,427			(2,386	)
Selling, general and administrative		1,224			1,831			2,308			4,007
Operating income (loss)		5,064			(1,671	)		12,119			(6,393	)
Other income, net		121			63			28			117
Interest income		8			4			18			11
Interest expense		(178	)		(147	)		(655	)		(1,732	)
Income (loss) from continuing operations		5,015			(1,751	)		11,510			(7,997	)
Income from discontinued operations		—			17			—			78,894
Net income (loss)	$	5,015		$	(1,734	)	$	11,510		$	70,897
Weighted average units outstanding—basic		25,411			25,411			25,411			25,254
Weighted average units outstanding—diluted		25,411			25,411			25,411			25,254
Income (loss) from continuing operations per unit—basic and diluted	$	0.20		$	(0.07	)	$	0.45		$	(0.32	)
Income from discontinued operations per unit-basic and diluted		—			—			—			3.12
Income (loss) per unit—basic and diluted	$	0.20		$	(0.07	)	$	0.45		$	2.81
Distributions declared per unit	$	—		$	—		$	—		$	4.15

See notes to consolidated financial statements.

4

ADVANCED BIOENERGY, LLC & SUBSIDIARIES

Consolidated Statements of Changes in Members’ Equity

For the Six Months Ended March 31, 2014

(Dollars in thousands)

(Unaudited)

	Member	Members’	Accumulated
	Units	Capital	Deficit			Total
MEMBERS’ EQUITY—September 30, 2013	25,410,851	$60,835	$	(43,612	)	$17,223
Net income	—	—		11,510		11,510
MEMBERS’ EQUITY—March 31, 2014	25,410,851	$60,835	$	(32,102	)	$28,733

See notes to consolidated financial statements

5

ADVANCED BIOENERGY, LLC & SUBSIDIARIES

Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

	Six Months Ended
	March 31,			March 31,
	2014			2013
Cash flows from operating activities:
Net income	$	11,510		$	70,897
Adjustments to reconcile net income to operating activities cash flows:
Depreciation		5,422			5,428
Amortization of deferred financing costs		45			66
Amortization of deferred revenue and rent		(15	)		(126	)
Amortization of additional carrying value of debt		(1,273	)		(980	)
Unit compensation expense		—			276
(Gain) on disposal of assets		—			(76,688	)
Loss on warrant derivative liability		—			1,416
Change in working capital components:
Accounts receivable		608			9,289
Inventories		(716	)		3,658
Prepaid expenses		(228	)		816
Accounts payable		(770	)		(5,514	)
Accrued expenses		(200	)		(2,137	)
Net cash provided by operating activities		14,383			6,401
Cash flows from investing activities:
Purchase of property and equipment		(389	)		(771	)
Proceeds from sale of assets, net of transaction costs		6			155,039
Change in other assets		162			65
Change in restricted cash		(2,824	)		3,128
Net cash provided by (used in) investing activities		(3,045	)		157,461
Cash flows from financing activities:
Payments on debt		(5,882	)		(50,306	)
Exercise of warrant		—			799
Distribution to members		(7,877	)		(104,511	)
Net cash (used in) financing activities		(13,759	)		(154,018	)
Net increase (decrease) in cash and cash equivalents		(2,421	)		9,844
Beginning cash and cash equivalents		27,796			11,210
Ending cash and cash equivalents	$	25,375		$	21,054
Supplemental disclosure of cash flow information:
Cash paid for interest	$	2,564		$	1,897
Supplemental disclosure of non-cash financing and investing activities:
Exercise of options from distribution proceeds	$	—		$	432
Note receivable settled from distribution proceeds		—			513

See notes to consolidated financial statements.

6

ADVANCED BIOENERGY, LLC & SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2014 and 2013

(Unaudited)

1. Organization and Significant Accounting Policies

The consolidated financial statements include the accounts of Advanced BioEnergy, LLC (“ABE” or the “Company”) and its wholly owned operating subsidiaries, ABE Fairmont, LLC (“ABE Fairmont”) and ABE South Dakota, LLC (“ABE South Dakota”). All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, or GAAP, for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The interim financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2013. The financial information as of March 31, 2014 and the results of operations for the three and six months ended March 31, 2014 are not necessarily indicative of the results for the fiscal year ending September 30, 2014. In the opinion of management, the interim financial statements reflect all normal recurring adjustments necessary for fair presentation. Certain items in the March 31, 2013 statement of operations have been reclassified to match the presentation on the Form 10-K for fiscal 2013 and do not affect net income.

The Company currently operates three ethanol production facilities in the U.S. with a combined production capacity of 85 million gallons per year. The Company acquired existing facilities in Aberdeen, South Dakota (9 million gallons) and Huron, South Dakota (32 million gallons) in November 2006 and began operations at the 44 million gallon Aberdeen expansion facility in January 2008.

The Company, through ABE Fairmont, also owned a production facility in Fairmont, NE. On December 7, 2012, the Company and ABE Fairmont sold the production facility in Fairmont, NE to Flint Hills Resources, LLC. See Note 3 of the financial statements for further description of the transaction. In accordance with the guidance under ASC Topic 205, section 20 Discontinued Operations, the results of operations for ABE Fairmont are disclosed as discontinued operations.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s cash balances are maintained in bank depositories and periodically exceed federally insured limits. The Company has not experienced losses in these accounts. The Company’s restricted cash includes cash held for debt service under the terms of its debt agreements, a deposit for a rail car sublease, as well as cash held in an escrow account relating to the sale of the Fairmont facility. The escrow account totals $8.0 million and has a scheduled release date in June 2014.

Receivables

Credit sales are made to a few customers with no collateral required. Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and considering a customer’s financial condition, credit history and current economic conditions. Receivables are written off if deemed uncollectible. Recoveries of receivables previously written off are recorded when received.

Derivative Instruments/Due From Broker

On occasion, the Company has entered into derivative contracts to hedge the Company’s exposure to price risk related to forecasted corn purchases and forecasted ethanol sales. Accounting for derivative contracts requires that an entity recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows of a forecasted transaction, or (c) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction.

7

Although the Company believes its derivative positions are economic hedges, it has not designated any derivative position as a hedge for accounting purposes and it records derivative positions on the balance sheet at their fair market value, with changes in fair value recognized in current period earnings.

In addition, certain derivative financial instruments that meet the criteria for derivative accounting treatment also qualify for a scope exception to derivative accounting, as they are considered normal purchases and sales. The availability of this exception is based on the assumption that the hedging party has the ability and it is probable to deliver or take delivery of the underlying item.

Inventories

Chemicals, supplies, work in process, ethanol and distillers grains inventories are stated at the lower of weighted average cost or market.

Property and Equipment

Property and equipment is carried at cost less accumulated depreciation computed using the straight-line method over the estimated useful lives:

Office equipment	3-7 Years
Process equipment	10 Years
Buildings	40 Years

Maintenance and repairs are charged to expense as incurred; major improvements and betterments are capitalized. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount on the asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group. An impairment loss is measured by the amount by which the carrying value of the asset exceeds the estimated fair value on that date.

Revenue Recognition

Ethanol revenue is recognized when product title and all risk of ownership is transferred to the customer as specified in the contractual agreements with the marketers. Under the terms of the marketing agreements with Gavilon, revenue is recognized when product is loaded into rail cars or trucks for shipment. Revenue was previously recognized upon the release of the product for shipment. Revenue from the sale of co-products is recorded when title and all risk of ownership transfers to customers. Co-products are normally shipped free on board (“FOB”) shipping point. Interest income is recognized as earned. In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, commissions due to the marketers are deducted from the gross sale price at the time of payment.

Income Per Unit

Basic and diluted income per unit is computed using the weighted-average number of vested units outstanding during the period. Unit warrants are considered unit equivalents and are considered in the diluted income-per-unit computation, but have been excluded from the computations as they are exercisable only under certain limited circumstances.

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

Discontinued Operations

The Company classified the results of operations of the Fairmont facility as discontinued operations in the first quarter of fiscal 2013 as a result of the sale of the Fairmont production facility in December 2012, and removed the operating results of the Fairmont facility from continuing operations for all periods presented.

8

Risks and Uncertainties

The supply and demand for ethanol are impacted by federal and state legislation and regulation, most significantly the Renewable Fuels Standard (“RFS”), and any changes in legislation or regulation could cause the demand for ethanol to decline or its supply to increase, which could have a material adverse effect on our business, results of operations and financial condition, and the ability to operate at a profit.

In November 2013, the U.S. Environmental Protection Agency proposed a reduction of the original 2014 corn-based ethanol blending volume requirements to approximately 13.0 billion gallons per year, subject to a 60 day comment period. This is a reduction from the 2013 requirement of 13.8 billion gallons for corn-based ethanol, and the original 2014 volumes of 14.4 billion gallons. The EPA plans to release the final version of the 2014 ethanol blending volume requirements in June 2014. The Company is uncertain as to the potential impact these proposed changes may have on the Company and the overall ethanol industry.

2. ABE South Dakota Liquidity and Management’s Plans

As of September 30, 2013, ABE South Dakota had not replenished the debt service reserve under its senior loan to the greater of six months of principal and interest or $3.0 million, or satisfied a non-financial requirement, both of which constituted events of default under its senior credit agreement. The senior lenders waived the events of default until December 31, 2013.

As of December 31, 2013, ABE South Dakota funded the debt service reserve to the required level of $3.0 million and stopped accruing default interest, which totaled $1.1 million. ABE South Dakota paid the default interest in January 2014, and the senior lenders waived the non-financial default until June 30, 2014. As of the date of this filing, the non-financial requirement has been satisfied and no additional waiver is necessary.

At March 31, 2014, ABE South Dakota had working capital of $22.7 million, excluding current principal due. Net working capital, excluding current principal due, increased by $10.0 million since September 2013.

Due to the favorable margin environment and consequent increase in working capital over the past six months, ABE South Dakota no longer intends to continue its discussions with the senior lenders regarding its overall capital structure. The Company believes it has adequate existing liquidity and cash flows from operations to fund capital requirements and the minimum annual principal and interest payments required under the terms of the senior credit agreement for at least the next 12 months.

3. Discontinued Operations

On October 15, 2012, ABE Fairmont (“Seller”), the Company, Flint Hills Resources Fairmont, LLC, a Delaware limited liability company (“Flint Hills” or “Buyer”), and Flint Hills Resources, LLC, a Delaware limited liability company, signed an Asset Purchase Agreement under which ABE Fairmont agreed to sell to Buyer, substantially all of the assets of ABE Fairmont (the “Asset Sale”), pursuant to the terms and conditions of the Asset Purchase Agreement. The Asset Sale was completed on December 7, 2012.

Cash consideration for the Asset Sale consisted of $160.0 million, plus Seller’s inventory value of $10.7 million, for the finished products, raw materials, ingredients and certain other supplies located at Seller’s facility. Of the total proceeds payable at closing, $12.5 million was placed in escrow to serve as security to satisfy the Seller’s and the Company’s indemnification obligations to the Buyer, and the Company received approximately $157.2 million. The Company has received $4.5 million of the escrow through March 31, 2014.

The Company used these proceeds to repay the outstanding debt principal and interest of $39.8 million as of the closing date and to pay the outstanding transaction costs of approximately $2.4 million. The Company will have no continuing involvement in the cash flows of the Fairmont facility.

9

The remaining sale-related Fairmont assets included in the consolidated balance sheets as of March 31, 2014 and September 30, 2013 are disclosed below (amounts in thousands):

	As of		As of
	March 31, 2014		September 30, 2013
Current portion of restricted cash/escrow	$	8,000	$	8,000
Current assets of discontinued operations	$	8,000	$	8,000

Summarized preliminary revenues and expenses included in discontinued operations in the Statements of Operations for the three and six months ended March 31, 2014 and 2013 are included in the following table (amounts in thousands):

	Three Months Ended					Six Months Ended
	March 31,		March 31,			March 31,		March 31,
	2014		2013			2014		2013
Net sales
Ethanol and related products	$	—	$	—		$	—	$	74,099
Total net sales		—		—			—		74,099
Cost of goods sold		—		—			—		70,584
Gross profit		—		—			—		3,515
Selling, general and administrative		—		241			—		1,365
Operating income		—		(241	)		—		2,150
Other income		—		249			—		456
Interest income		—		9			—		15
Interest expense		—		—			—		(415	)
Income from operations of discontinued components		—		17			—		2,206
Gain on disposal of discontinued components		—		—			—		76,688
Income from discontinued operations	$	—	$	17		$	—	$	78,894

10

The gain on disposal of discontinued operations in fiscal 2013 is included in Income from Discontinued Operations on the Statement of Operations. The gain on disposal is composed of the following items (in thousands):

Proceeds:
Cash proceeds	$	157,249
Escrow		12,500
Inventory holdback		1,071
Total Proceeds		170,820
Assets Sold:
Property, plant and equipment, net		83,097
Inventory		10,864
Restricted cash		673
Deferred financing costs		396
Prepaid expenses		140
Deferred income		(3,422	)
Total Assets Sold		91,748
Transaction costs		2,384
Gain on Disposal of Discontinued Operations	$	76,688

4. Inventories

A summary of inventories is as follows (in thousands):

	March 31,		September 30,
	2014		2013
Chemicals	$	579	$	792
Work in process		1,180		1,018
Ethanol		1,351		858
Distillers grain		597		311
Supplies and parts		1,547		1,559
Total	$	5,254	$	4,538

5. Property and Equipment

A summary of property and equipment is as follows (in thousands):

	March 31,			September 30,
	2014			2013
Land	$	1,811		$	1,811
Buildings		9,886			9,886
Process equipment		103,158			102,971
Office equipment		1,391			1,357
Construction in process		241			117
		116,487			116,142
Accumulated depreciation		(62,881	)		(57,497	)
Property and equipment, net	$	53,606		$	58,645

11

6. Debt

A summary of debt is as follows (in thousands, except percentages):

	March 31,
	2014			March 31,			September 30,
	Interest Rate			2014			2013
ABE South Dakota:
Senior debt principal—variable		4.24	%	$	62,800		$	68,632
Restructuring fee		N/A			3,098			3,103
Additional carrying value of restructured debt		N/A			4,839			6,112
Total outstanding					70,737			77,847
Additional carrying value of restructured debt		N/A			(4,839	)		(6,112	)
Stated principal				$	65,898		$	71,735

The estimated maturities of debt at March 31 are as follows (in thousands):

					Amortization of
					Additional Carrying
	Stated				Value of
	Principal		Restructuring Fee		Restructured Debt		Total
2015	$	3,000	$	—	$	2,477	$	5,477
2016		59,800		3,098		2,362		65,260
Total debt	$	62,800	$	3,098	$	4,839	$	70,737

Letter of Credit

In connection with the execution of a rail car sublease, the Company, as parent of ABE South Dakota, agreed to post a $2.5 million irrevocable and non-transferable standby letter of credit on May 4, 2012 for the benefit of Gavilon as security for the payment obligations of ABE South Dakota under certain agreements with Gavilon. The Company has deposited $2.5 million in a restricted account as collateral for this letter of credit and has classified it as restricted cash.

Senior Credit Agreement for the South Dakota Plants

ABE South Dakota entered into an Amended and Restated Senior Credit Agreement (the “Senior Credit Agreement”), effective as of June 18, 2010, and amended on December 9, 2011, which was accounted for under troubled debt restructuring rules. The Senior Credit Agreement was executed among ABE South Dakota, the lenders from time to time party thereto, and an Administrative Agent and Collateral Agent. The Senior Credit Agreement converted the outstanding principal amount of the loans and certain other amounts under interest rate protection agreements to a senior term loan. The interest accrued on outstanding term and working capital loans under the previous credit agreement were reduced to zero. ABE South Dakota agreed to pay a $3.0 million restructuring fee to the lenders due at the earlier of March 31, 2016 and the date on which the loans are repaid in full. ABE South Dakota recorded the restructuring fee as non-interest bearing debt on its consolidated balance sheets. See Additional Carrying Value of Restructured Debt below.

The principal amount of the term loan facility is payable in quarterly payments of $750,000, with the remaining principal amount fully due and payable on March 31, 2016. On March 31, 2014, ABE South Dakota made a debt sweep payment in the amount of $4.3 million in addition to its scheduled principal payment of $750,000. ABE South Dakota is also obligated to pay a waiver fee to the senior lenders of $275,000, payable in installments in fiscal 2014 and 2015. The Company has recorded this fee as non-interest bearing debt on its consolidated balance sheet, and is amortizing it against interest expense over the remaining term of the loan.

As described in Note 2, at December 31, 2013, ABE South Dakota was in default of the provisions of its Senior Credit Agreement due to its failure to satisfy a non-financial obligation. The lenders waived the non-financial default until June 30, 2014. As of the date of this filing, the non-financial requirement has been satisfied and no additional waiver is necessary.

12

ABE South Dakota has the option to select the interest rate on the senior term loan between base rate and euro-dollar rates for maturities of one to six months. Base rate loans bear interest at the administrative agent’s base rate plus an applicable margin of 3.0%. Euro-dollar loans bear interest at LIBOR plus the applicable margin of 4.0%. As of March 31, 2014, ABE South Dakota had selected the LIBOR rate for a period of one month.

ABE South Dakota’s obligations under the Senior Credit Agreement are secured by a first-priority security interest in the equity and assets of ABE South Dakota.

ABE South Dakota is allowed to make equity distributions (other than certain tax distributions) to ABE only if ABE South Dakota meets certain financial conditions and if there is no more than $25 million of principal outstanding on the senior term loan. Loans outstanding under the Senior Credit Agreement are subject to mandatory prepayment in certain circumstances, including, but not limited to, mandatory prepayments based upon receipt of certain proceeds of asset sales, casualty proceeds, termination payments, and cash flows.

The Senior Credit Agreement and the related loan documentation include, among other terms and conditions, limitations (subject to specified exclusions) on ABE South Dakota’s ability to make asset dispositions; merge or consolidate with or into another person or entity; create, incur, assume or be liable for indebtedness; create, incur or allow liens on any property or assets; make investments; declare or make specified restricted payments or dividends; enter into new material agreements; modify or terminate material agreements; enter into transactions with affiliates; change its line of business; and establish bank accounts. Substantially all cash of ABE South Dakota is required to be deposited into special, segregated project accounts subject to security interests to secure obligations in connection with the Senior Credit Agreement. The Senior Credit Agreement contains customary events of default and also includes an event of default for defaults on other indebtedness by ABE South Dakota and certain changes of control.

Additional Carrying Value of Restructured Debt

Since the future maximum undiscounted cash payments on the amended and restated senior credit facility (including principal, interest and the restructuring fee) exceeded the adjusted carrying value at the time of the restructuring, no gain for the forgiven interest was recorded, the carrying value was not adjusted and the modification of terms was accounted for on a prospective basis, via a new effective interest calculation, amortized over the life of the note, offsetting interest expense. Based on the treatment of the troubled debt restructuring, which has resulted in the additional carrying value being amortized as a reduction in interest expense over the term of the loan, the Company’s effective interest rate over the term of the restructuring note agreement is approximately 0.27% over LIBOR (0.50 % at March 31, 2014), prior to any default interest.

7. Major Customers

The operating subsidiary of the Company, ABE South Dakota, entered into Ethanol Marketing Agreements (“EMA”) with Gavilon, LLC, a commodity marketing firm, and affiliated companies and successors (collectively “Gavilon”), on May 4, 2012 (amended on July 31, 2012). The EMA required that the subsidiary sell to Gavilon all of the denatured fuel-grade ethanol produced at the South Dakota plants. The terms of the EMA began on August 1, 2012, and expire on December 31, 2015. ABE SD is currently working to obtain bank approval to extend the term of the EMA to June 30, 2016.

ABE South Dakota is party to a co-product marketing agreement with Dakotaland Feeds, LLC (“Dakotaland Feeds”), whereby Dakotaland Feeds markets the local sale of distillers grains produced at the ABE South Dakota Huron plant to third parties for an agreed-upon commission. The Company had an agreement with Hawkeye Gold, LLC to market the distillers grains produced at the ABE South Dakota Aberdeen plants through June 30, 2013. ABE South Dakota is party to an agreement with Gavilon to market the dried distillers grains from the Aberdeen plant, effective July 1, 2013 until July 31, 2016.

13

Sales and receivables from the ABE South Dakota’s major customers were as follows (in thousands):

	March 31,		March 31,
	2014		2013
Gavilon-Ethanol and Distillers Grains
Six months revenues	$	88,976	$	89,013
Receivable balance at period end		6,814		4,097
Hawkeye Gold - Distillers Grains
Six months revenues	$	—	$	17,337
Receivable balance at period end		—		1,340
Dakotaland - Distillers Grains
Six months revenues	$	6,649	$	10,923
Receivable balance at period end		673		968

8. Risk Management

The Company is exposed to a variety of market risks, including the effects of changes in commodity prices and interest rates. These financial exposures are monitored and managed by the Company as an integral part of its overall risk management program. The Company’s risk management program seeks to reduce the potentially adverse effects that the volatility of these markets may have on its current and future operating results. To reduce these effects, the Company generally attempts to fix corn purchase prices and related sale prices of ethanol and distillers grains with forward purchase and sales contracts to reduce volatility in future operating margins. In addition to entering into contracts to purchase 1.5 million bushels of corn in which the futures or basis price was not locked, the Company had entered into the following fixed price forward contracts at March 31, 2014 (in thousands):

	Quantity		Amount		Period Covered Through
Corn (bushels) Purchase Contracts		2,070	$	9,109		June 30, 2014
Ethanol (gallons) Sale Contracts		8,035		20,844		June 30, 2014
Distillers grains (tons) Sale Contracts		27		5,521		June 30, 2014
Corn Oil (pounds) Sale Contracts		96		30		April 30, 2014
Natural Gas (mmbtus) Purchase Contracts		103		520		May 31, 2014

Unrealized gains and losses on forward contracts, in which delivery has not occurred, are deemed “normal purchases and normal sales” and therefore are not marked to market in the financial statements.

When forward contracts are not available at competitive rates, the Company may engage in hedging activities using exchange-traded futures contracts, OTC futures options or OTC swap agreements. Changes in market price of ethanol-related hedging activities are reflected in revenues while changes in market price of corn-related items are reflected in cost of goods sold. There was no futures activity during the quarters presented.

9. One-time Termination Benefit

Subsequent to the sale of its Fairmont facility in fiscal 2013, the Company implemented a cost reduction program reducing the numbers of its headquarters staff to align its staffing with the smaller remaining operations. Some of the affected employees were required to provide services to the Company through various dates until June 30, 2013. The Company is accruing benefits due to the chief executive officer for services to be provided through June 2014 under his amended employment agreement signed in January 2013.

In connection with this cost reduction program, the Company has recognized administrative expense of $0.3 million in fiscal 2014, with an additional $0.1 million expected through June 2014.

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At March 31, the accrued liability associated with the one-time termination benefits consisted of the following (in thousands):

	2014		2013
Beginning balance at October 1, 2013 and October 1, 2012	$	994	$	—
Charges		261		939
Payments		—		(205	)
Ending balance at March 31	$	1,255	$	734

10. Members’ Equity

Employment Agreements

In January 2013, the Company awarded its Chief Executive Officer a unit appreciation right for 200,000 units that was approved by the Company’s unit holders on March 22, 2013 at the Company’s Regular Meeting of Members. The UAR vests 1/18 per month over an 18-month period beginning December 7, 2012 so long as Mr. Peterson remains employed by the Company, and will be paid in cash upon such time as ABE sells all or substantially all the assets of the South Dakota plants. The UAR was issued for no consideration and had a grant price of $1.15 per unit at the time of the grant. The grant price for the UAR will be reduced by any distribution received by the Company’s unit holders from (i) the $12.5 million placed in escrow or (ii) the $10 million of cash reserved by the Company in connection with the sale of the Fairmont plant, or (iii) any other cash dividend received by the Company’s unit holders from the cash reserves at Advanced BioEnergy, LLC. The grant price will also be reduced in the event the $12.5 million of escrow proceeds or the $10.0 million of cash retained by the Company are not distributed to the Company’s unit holders. The grant price will be reduced by $0.31 per unit to $0.84 per unit as a result of the cash distribution paid in October 2013. The units are contingently exercisable only under certain limited circumstances, and therefore the Company is not recognizing compensation expense related to the awards until these defined circumstances are probable of occurring.

11. Parent Financial Statements

The following financial information represents the unconsolidated financial statements of Advanced BioEnergy, LLC (“ABE”) as of March 31, 2014 and September 30, 2013, and for the three and six months ended March 31, 2014 and 2013. ABE’s ability to receive distributions from ABE South Dakota is based on the terms and conditions in ABE South Dakota’s credit agreement. ABE South Dakota is allowed to make equity distributions (other than certain tax distributions) to ABE only upon ABE South Dakota meeting certain financial conditions and if there is no more than $25 million of principal outstanding on the senior term loan. At March 31, 2014, there was $7.0 million of cash at ABE Fairmont, which has no restrictions on distribution to the parent.

15

Advanced BioEnergy, LLC (Unconsolidated)

Balance Sheets

(Unaudited)

	March 31,			September 30,
	2014			2013
	(Dollars in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	6,163		$	6,558
Restricted cash		2,500			2,500
Miscellaneous Receivables		12			—
Prepaid expenses		48			20
Total current assets		8,723			9,078
Property and equipment, net		420			425
Other assets:
Investment in ABE Fairmont		14,988			23,138
Investment in ABE South Dakota		6,176			(5,972	)
Other assets		32			32
Total assets	$	30,339		$	26,701
LIABILITIES AND MEMBERS’ EQUITY
Current liabilities:
Accounts payable	$	4		$	10
Accrued expenses		1,538			1,512
Distribution payable		—			7,877
Total current liabilities		1,542			9,399
Other liabilities		64			79
Total liabilities		1,606			9,478
Members’ equity:
Members’ capital, no par value, 25,410,851 units issued and outstanding		60,835			60,835
Accumulated deficit		(32,102	)		(43,612	)
Total members’ equity		28,733			17,223
Total liabilities and members’ equity	$	30,339		$	26,701

16

Advanced BioEnergy, LLC (Unconsolidated)

Statements of Operations

(Unaudited)

	Three Months Ended						Six Months Ended
	March 31,			March 31,			March 31,			March 31,
	2014			2013			2014			2013
	(Dollars in thousands)						(Dollars in thousands)
Equity in earnings (losses) of consolidated subsidiary	$	5,284		$	(857	)	$	11,997		$	(4,369	)
Management fee income from subsidiary		388			401			783			792
Selling, general and administrative expenses		(661	)		(1,297	)		(1,290	)		(3,012	)
Operating income (loss)		5,011			(1,753	)		11,490			(6,589	)
Other income (expense)		—			(2	)		12			(3	)
Interest income (expense)		4			4			8			(1,405	)
Income (loss) from continuing operations		5,015			(1,751	)		11,510			(7,997	)
Income from discontinued operations		—			17			—			78,894
Net income (loss)	$	5,015		$	(1,734	)	$	11,510		$	70,897

17

Advanced BioEnergy, LLC (Unconsolidated)

Statements of Cash Flows

(Unaudited)

	Six Months Ended
	March 31,			March 31,
	2014			2013
	(Dollars in thousands)
Cash flows from operating activities:
Net income	$	11,510		$	70,897
Adjustments to reconcile net income to operating activities cash flows:
Depreciation		78			82
Equity in earnings of consolidated subsidiaries		(11,997	)		(73,501	)
Distributions from consolidated subsidiaries		8,000			104,832
Gain on disposal of fixed assets		6			—
Amortization of deferred revenue and rent		(16	)		(14	)
Unit compensation expense		—			276
Loss on warrant derivative liability		—			1,416
Change in working capital components:
Accounts receivable		(12	)		156
Prepaid expenses		(28	)		(8	)
Accounts payable and accrued expenses		20			638
Net cash provided by operating activities		7,561			104,774
Cash flows from investing activities:
Purchase of property and equipment		(79	)		—
Net cash used in investing activities		(79	)		—
Cash flows from financing activities:
Exercise of warrant		—			799
Distribution to members		(7,877	)		(104,511	)
Net cash used in financing activities		(7,877	)		(103,712	)
Net increase (decrease) in cash and cash equivalents		(395	)		1,062
Beginning cash and cash equivalents		6,558			5,400
Ending cash and cash equivalents	$	6,163		$	6,462

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

Information Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements regarding our business, financial condition, results of operations, performance and prospects. All statements that are not historical or current facts are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control, which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended September 30, 2013 and in this Form 10-Q. These risks and uncertainties include, but are not limited to, the following:

• our operational results are subject to fluctuations in the prices of grain, utilities and ethanol, which are affected by various factors including weather, production levels, supply, demand, changes in technology and government support and regulations;

• margins can be volatile and could become negative, which has previously affected our ability to meet current obligations and debt service requirements at our ABE South Dakota entity;

• our hedging transactions and risk mitigation strategies could materially harm our results;

• cash distributions depend upon our future financial and operational performance and will be affected by debt covenants, reserves and operating expenditures;

• current government-mandated tariffs, credits and standards such as the Renewable Fuels Standard (“RFS”) may be reduced or eliminated, and legislative acts taken by state governments such as California related to low-carbon fuels that include the effects caused by indirect land use, may have an adverse effect on our business;

• alternative fuel additives may be developed that are superior to or cheaper than ethanol;

• transportation, storage and blending infrastructure may become impaired, preventing ethanol from reaching markets;

• our operating facilities may experience technical difficulties and not produce the gallons of ethanol we expect and insurance proceeds may not be adequate to cover these production disruptions;

• our units are subject to a number of transfer restrictions, no public market exists for our units, and we do not expect a public market to develop;

• $8.0 million of the proceeds from the sale of our Fairmont facility are subject to the terms of an escrow agreement with the buyer;

• the ability of our ABE South Dakota subsidiary to make distributions to ABE in light of restrictions in this subsidiary’s credit facility;

• the supply of ethanol rail cars in the market is extremely tight, which could affect our ability to obtain new tanker cars or negotiate new leases at a reasonable fee when our current leases expire; and

You can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events, are based on assumptions, and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this report. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed from time to time with the Securities and Exchange Commission that advise interested parties of the risks and factors that may affect our business.

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General

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated financial condition and results of operations. This discussion should be read in conjunction with the consolidated financial statements included herewith and notes to the consolidated financial statements thereto.

Overview

Advanced BioEnergy, LLC (“Company,” “we,” “our,” “Advanced BioEnergy” or “ABE”) was formed in 2005 as a Delaware limited liability company. Our business consists of producing ethanol and co-products, including wet, modified and dried distillers grains, as well as corn oil. Ethanol is a renewable, environmentally clean fuel source that is produced at numerous facilities in the United States, mostly in the Midwest. In the U.S., ethanol is produced primarily from corn and then blended with unleaded gasoline in varying percentages. Ethanol is most commonly sold as E10. Increasingly, ethanol is also available as E85, which is a higher percentage ethanol blend for use in flexible-fuel vehicles. Ethanol has also recently become available in some states in limited locations as E15.

In November 2006, we acquired ABE South Dakota, LLC, which owned existing ethanol production facilities in Aberdeen and Huron, South Dakota. Construction of our new facility in Aberdeen, South Dakota began in April 2007, and operations commenced in January 2008. Our production operations are carried out primarily through our operating subsidiaries, ABE Fairmont, LLC, which owned and operated the Fairmont, Nebraska plant until December 2012, and ABE South Dakota, which owns and operates plants in Aberdeen and Huron, South Dakota.

On December 7, 2012, the Company and its wholly-owned subsidiary ABE Fairmont, LLC sold substantially all of the assets of ABE Fairmont’s ethanol and related distillers and non-food grade corn oil businesses located in Fairmont, Nebraska (the “Asset Sale”) to Flint Hills Resources, LLC.

The purchase price for the Asset Sale was $160.0 million, plus $10.7 million for ABE Fairmont’s inventory at closing. Of the gross proceeds, $12.5 million was paid into an escrow account to secure the indemnification obligations of the Company and ABE Fairmont, with $4.5 million already received by the Company and $8.0 million scheduled to be released in June 2014.

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources in assessing performance. Based on the related business nature and expected financial results, the Company’s plants are aggregated into one reporting segment.

DRY MILL PROCESS

Dry mill ethanol plants produce ethanol by predominantly processing corn. Other possible feeds are grain sorghum, or other cellulosic materials. The corn is conveyed directly from South Dakota Wheat Growers to the plant where it is weighed and transferred to a scalper to remove rocks, cobs, and other debris. The corn is then fed to a hammer mill where it is ground into flour and conveyed into a slurry tank. Water, heat and enzymes are added to the flour in the slurry tank to start the process of converting starch from the corn into sugar. The slurry is pumped to a liquefaction tank where additional enzymes are added. These enzymes continue the starch-to-sugar conversion. The grain slurry is pumped into fermenters, where yeast is added, to begin the batch-fermentation process. Fermentation is the process of the yeast converting the sugar into alcohol and carbon dioxide. After the fermentation is complete, a vacuum distillation system removes the alcohol from the grain mash. The 95% (190-proof) alcohol from the distillation process is then transported to a molecular sieve system, where it is dehydrated to 100% alcohol (200 proof). The 200-proof alcohol is then pumped to storage tanks and blended with a denaturant, usually gasoline. The 200-proof alcohol and 2.0-2.5% denaturant constitute denatured fuel ethanol.

Corn mash left over from distillation is pumped into a centrifuge for dewatering. The liquid from the centrifuge, known as thin stillage, is then pumped from the centrifuges to an evaporator, where it is concentrated to a syrup. The solids that exit the centrifuge, known as the wet cake, are conveyed to the dryer system. Syrup is added to the wet cake as it enters the dryer, where moisture is removed. The process produces distillers grains with solubles, which is used as a high-protein/fat animal-feed supplement. Dry-mill ethanol processing creates three forms of distillers grains: wet distillers grains with solubles, known as wet distillers grains; modified wet distillers grains with solubles, known as modified distillers grains; and dry distillers grains with solubles, known as dry distillers grains. Wet and modified distillers grains have been dried to approximately 65% and 50% moisture levels, respectively, and are predominately sold to nearby markets. Dried distillers grains have been dried to 11% moisture, have an almost indefinite shelf life and may be sold and shipped to any market regardless of its proximity to an ethanol plant.

20

Corn oil is produced by processing evaporated thin stillage through a disk stack-style centrifuge. Corn oil has a lower density than water or solids that make up the syrup. The centrifuges separate the relatively light oil from the heavier components of the syrup, eliminating the need for significant retention time. De-oiled syrup is returned to the process for blending into wet, modified, or dry distillers grains. The corn oil is then pumped into storage tanks before being loaded onto trucks for sale.

FACILITIES

The table below provides a summary of our ethanol plants in operation as of March 31, 2014:

			Estimated
	Estimated		Annual		Estimated
	Annual		Distillers		Annual
	Ethanol		Grains		Corn		Primary
Location	Production		Production(1)		Processed		Energy Source
	(Million gallons)		(000’s Tons)		(Million bushels)
Aberdeen, SD(2)		9		27		3.2	Natural Gas
Aberdeen, SD(2)		44		134		15.7	Natural Gas
Huron, SD		32		97		11.4	Natural Gas
Consolidated		85		258		30.3

(1) Our plants produce and sell wet, modified and dried distillers grains. The stated quantities are on a fully dried basis operating at full production capacity.

(2) Our plant at Aberdeen consists of two production facilities.

We believe that each of the operating facilities is in adequate condition to meet our current and future production goals. We also believe that these plants are adequately insured for replacement cost plus related disruption expenditures.

We pledged a first-priority security interest in and first lien on substantially all of the assets of the ABE South Dakota plants to the collateral agent for the senior creditors of these plants.

Plan of Operations through March 31, 2015

Over the next twelve months, we will continue our focus on operational improvements at each of our operating facilities. These operational improvements include exploring methods to improve ethanol yield per bushel and maximizing production output at each of our plants. We will also have a continued emphasis on safety and environmental regulation, reducing our operating costs, and optimizing our margin opportunities through prudent risk-management policies.

21

Results of Operations for the Quarter Ended March 31, 2014 Compared to Quarter Ended March 31, 2013

The following table reflects quantities of our products sold at average net prices as well as bushels of corn ground and therms of gas burned at average costs for the three months ended March 31, 2014 and 2013:

	Three Months Ended				Three Months Ended
	March 31, 2014				March 31, 2013
	Sold/Consumed		Average		Sold/Consumed		Average
	(In thousands)		Net Price/Cost		(In thousands)		Net Price/Cost
Ethanol (gallons)		19,744	$	2.08		20,367	$	2.25
Dried distillers grains (tons)		35		194.49		28		244.22
Wet/modified distillers grains (tons)		48		67.98		70		98.73
Corn Oil (pounds)		1,601		0.26		1,905		0.31
Corn (bushels)		7,065		4.01		7,100		7.02
Gas (mmbtus)		576		13.13		563		4.08

Net Sales

Net sales for quarter ended March 31, 2014 were $51.9 million compared to $61.4 million for the quarter ended March 31, 2013, a decrease of $9.5 million or 15%. The $4.8 million decrease in ethanol sales in fiscal 2014 was accompanied by a decrease in distillers grains sales of $3.7 million, corn oil sales of $0.2 million, and sales of excess RIN credits of $0.8 million which are included in Other Sales. Excess Renewable Identification Number (“RIN”) credits are generated primarily from sales of E-85 ethanol and can be sold at the current market price to interested parties.

The drop in ethanol sales resulted from lower production in fiscal 2014, and a drop in ethanol prices of 11%. The drop in ethanol prices is attributed to the drop in corn prices as result of a record 2013 corn crop, partially mitigated by higher gasoline demand and lower nation-wide ethanol stocks in fiscal 2014. Lower ethanol prices have resulted in a drop in imports and higher exports in fiscal 2014 compared to fiscal 2013, which has contributed to the lower ethanol stocks in fiscal 2014. Lower production was a result of a reduction in output in fiscal 2014 due to rail traffic congestion, which delayed the return of our rail cars to the Aberdeen plant.

The decrease in distillers grain sales was primarily a result of a 20% price decrease in the second fiscal quarter of 2014 compared to fiscal 2013. The drop in distillers prices is attributed to the drop in corn prices in fiscal 2014, mitigated by strong export sales to Asia.

During the fiscal quarters ended March 31, 2014 and 2013, 79% and 75%, respectively, of our net sales were derived from the sale of ethanol and our remaining net sales were derived from the sale of distillers grains and corn oil. The fiscal quarter ended March 31, 2013 includes $0.8 million from the sale of RIN credits.

Cost of Goods Sold

Costs of goods sold for the quarter ended March 31, 2014 were $45.6 million, compared to $61.2 million for the quarter ended March 31, 2013, a decrease of $15.6 million or 25%. Corn costs represented 62% and 81% of cost of sales for the fiscal quarters ended March 31, 2014 and 2013, respectively. Corn prices decreased 43% to $4.01 per bushel in the quarter ended March 31, 2014 from $7.02 per bushel in the quarter ended March 31, 2013, primarily due to a record 2013 corn crop, and favorable local basis. We expect that corn prices will remain low until the next crop year.

Natural gas costs represented 17% of cost of sales for the fiscal quarter ended March 31, 2014 and 4% in the quarter ended March 31, 2013. Our average gas prices increased to $13.13 per mmbtu in the quarter ended March 31, 2014 from $4.08 per mmbtu in the quarter ended March 31, 2013, which is attributed to colder weather and low gas supply in fiscal 2014. We expect natural gas prices to remain strong through the balance of the year due to gas storage levels that are 54% below the five year average, heading into the injection season. A warmer than normal summer could increase natural gas demand limiting the amount of gas that can be injected into storage ahead of the winter demand period or withdrawal season.

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Gross Profit

Our gross profit for the quarter ended March 31, 2014 was $6.3 million, compared to $0.2 million for the quarter ended March 31, 2013. The increase in gross profit was primarily due to improved industry-wide market conditions as noted above. Crush margins for the quarter ended March 31, 2014 increased by 102% to $14.9 million, compared to $7.4 million in fiscal 2013. We define the crush margin as the price of ethanol and co-products per gallon less the costs of corn and natural gas on a per gallon basis. We expect that margins may decrease towards the end of the third fiscal quarter as the current favorable margins may result in more ethanol plants returning to service in the coming months, which may result in lower ethanol prices. The 2014 decrease in the required ethanol blending volumes proposed by the Environmental Protection Agency may also result in a decrease in ethanol prices.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses are comprised of recurring administrative personnel compensation, legal, technology, consulting, insurance and accounting fees.

For the quarter ended March 31, 2014, selling, general and administrative expenses were $1.2 million compared to $1.8 million for the quarter ended March 31, 2013. As a percentage of sales, selling, general and administrative expenses decreased to 2.4% for the quarter ended March 31, 2014, compared to 3.0% for the quarter ended March 31, 2013, primarily as a result of cost reductions subsequent to the sale of the Fairmont facility, a reduction in severance and related restructuring costs, and other non-recurring expenses.

Excluding these non-recurring costs, the administrative costs for the quarter ended March 31, 2014 were $1.0 million, which was 2.0% of net sales, compared to $1.2 million or 1.9% of net sales for the quarter ended March 31, 2013.

Interest Expense

Interest expense for the quarter ended March 31, 2014 was $0.2 million, compared to $0.1 million for the quarter ended March 31, 2013.

Results of Operations for the Six Months Ended March 31, 2014 Compared to Six Months Ended March 31, 2013

The following table reflects quantities of our products sold at average net prices as well as bushels of corn ground and therms of gas burned at average costs for the six months ended March 31, 2014 and 2013:

	Six Months Ended				Six Months Ended
	March 31, 2014				March 31, 2013
	Sold/Consumed		Average		Sold/Consumed		Average
	(In thousands)		Net Price/Cost		(In thousands)		Net Price/Cost
Ethanol (gallons)		39,061	$	2.01		40,550	$	2.23
Dried distillers grains (tons)		75		193.15		65		242.05
Wet/modified distillers grains (tons)		86		67.03		126		99.68
Corn Oil (pounds)		3,504		0.25		3,769		0.31
Corn (bushels)		13,924		4.01		14,183		7.04
Gas (mmbtus)		1,186		8.75		1,139		4.03

Net Sales

Net sales for the six months ended March 31, 2014 were $100.1 million compared to $121.1 million for the six months ended March 31, 2013, a decrease of $21 million or 17%. The $12.1 million drop in ethanol sales in fiscal 2014 was accompanied by decreases in distillers grains sales of $7.8 million, corn oil sales of $0.3 million, and sales of excess RIN credits of $0.8 million which are included in Other Sales.

The drop in ethanol sales resulted from lower production in fiscal 2014, and a drop in ethanol prices of 11%. The drop in ethanol prices is attributed to the drop in corn prices as result of a record 2013 corn crop, partially mitigated by higher gasoline demand and lower nation-wide ethanol stocks in fiscal 2014. Lower ethanol prices have resulted in a drop in imports and higher exports in fiscal 2014 compared to fiscal 2013, which has contributed to the lower ethanol stocks in fiscal 2014. Lower production was a result of a reduction in output in fiscal 2014 due to rail traffic congestion, which delayed the return of our rail cars to the Aberdeen plant.

23

The decrease in distillers grain sales was primarily a result of a 20% price decrease in the fiscal year 2014 compared to fiscal 2013. The drop in distillers prices is attributed to the drop in corn prices in fiscal 2014, partially mitigated by strong export sales to Asia.

During the six months ended March 31, 2014 and 2013, 78% and 75%, respectively, of our net sales were derived from the sale of ethanol and our remaining net sales were derived from the sale of distillers grains and corn oil. The fiscal quarter ended March 31, 2013 included $0.8 million from the sale of RIN credits.

Cost of Goods Sold

Cost of goods sold for the six months ended March 31, 2014 was $85.7 million, compared to $123.6 million for the six months ended March 31, 2013, a decrease of $37.9 million or 31%. Corn costs represented 65% and 81% of cost of goods sold for the six months ended March 31, 2014 and 2013. Corn costs decreased 43% to $4.01 per bushel in the six months ended March 31, 2014 from $7.04 per bushel for the six months ended March 31, 2013, primarily due to a record 2013 corn crop, and favorable local basis. We expect that corn prices will remain low until the next crop year.

Gross Profit

Our gross profit for the six months ended March 31, 2014 was $14.4 million, compared to gross loss of $2.4 million for the six months ended March 31, 2013. The increase in gross profit was primarily due to improved industry-wide market conditions as noted above. We define the crush margin as the price of ethanol per gallon less the costs of corn and natural gas on a per gallon basis. Crush margins for six months ended March 31, 2014 increased by 128% to $31.7 million, compared to $13.9 million the same period in 2013. We expect that margins may decrease towards the end of the third fiscal quarter as the current favorable margins may result in more ethanol plants returning to service in the coming months, which may result in lower ethanol prices. The 2014 decrease in the required ethanol blending volumes proposed by the Environmental Protection Agency may also result in a decrease in ethanol demand.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses are comprised of recurring administrative personnel compensation, legal, technology, consulting, insurance and accounting fees.

For the six months ended March 31, 2014, selling, general and administrative expenses were $2.3 million compared to $3.9 million for the six months ended March 31, 2013. As a percentage of sales, selling, general and administrative expenses decreased to 2.3% for fiscal 2014, compared to 3.3% for the fiscal 2013, primarily as a result of cost reductions subsequent to the sale of the Fairmont facility, a reduction in severance and related restructuring costs and other non-recurring expenses.

Excluding these non-recurring costs, the administrative costs for the six months ended March 31, 2014 were $1.9 million, which was 1.9% of net sales, compared to $2.4 million and 2.0% of net sales for the six months ended March 31, 2013.

Interest Expense

Interest expense for the six months ended March 31, 2014 was $0.7 million, compared to $1.7 million for the six months ended March 31, 2013, a decrease of $1.0 million. The primary reason for the drop was the $1.4 million loss on a unit warrant in fiscal 2013. The accrual of additional default interest of $0.4 million in fiscal 2014 offset part of the drop from fiscal 2013.

Income from Discontinued Operations

During the six months ended March 31, 2014, we recorded a gain on the sale of $76.7 million from the sale of the production assets of our Fairmont subsidiary.

Changes in Financial Position for the Six Months ended March 31, 2014

Current Assets

The $0.7 million increase in current assets at March 31, 2014 compared to September 30, 2013 was primarily due to improved cash flows from operations which were mostly offset by cash outflows for a unit holder distribution and debt service payments.

Property, Plant and Equipment

The $5 million decrease in property, plant and equipment at March 31, 2014 compared to September 30, 2013, was primarily due to recognizing $5.4 million of depreciation expense in the fiscal year 2014, partially offset by $0.4 million of capital expenditures.

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Current Liabilities

Accounts payable and accrued expenses decreased by $1.0 million at March 31, 2014 compared to September 30, 2013, due to payment of $1.0 million in default interest.

Distribution Payable

The distribution of $0.31 per unit declared in September 2013 was paid in October 2013.

Debt

Interest bearing debt decreased by $5.9 million during the fiscal year 2014 due to $1.5 million of normal principal payments and a $4.3 million debt sweep payment. An additional $1.3 million of restructured debt carrying value was amortized against interest expense during the quarter.

TRENDS AND UNCERTAINTIES AFFECTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS

Overview

Ethanol is currently blended with gasoline to meet regulatory standards as a clean air additive, an octane enhancer, a fuel extender and a gasoline alternative. According to the Renewable Fuels Association (“RFA”), as of March 2014, the estimated ethanol production capacity in the United States was 14.9 billion gallons per year, with approximately 1.2 billion gallons currently idle. The demand for ethanol is affected by what is commonly referred to as the “blending wall,“which is a regulatory cap on the amount of ethanol that can be blended into gasoline. The blend wall affects the demand for ethanol, and as industry production capacity reaches the blend wall, the supply of ethanol in the market may surpass the demand. Assuming current gasoline usage in the U.S. at 134 billion gallons per year and a blend rate of 10% ethanol and 90% gasoline, the current blend wall is approximately 13.4 billion gallons of ethanol per year.

Ethanol is most commonly sold as E10, the 10 percent blend of ethanol for use in all American automobiles. Increasingly, ethanol is also available as E85, a higher percentage ethanol blend for use in flexible fuel vehicles. To further drive growth in ethanol usage, Growth Energy, an ethanol industry trade association, requested a waiver from the Environmental Protection Agency (“EPA”) to increase the allowable amount of ethanol blended into gasoline from the current 10% level to a 15% level. In June 2012, the EPA approved E15 for use in vehicles with model years 2001 and later. Although regulatory and infrastructure issues remain in many states, E15 is now available in limited locations in at least twelve states per the RFA.

Our operations are highly dependent on commodity prices, especially prices for corn, ethanol, distillers grains and natural gas. As a result of price volatility for these commodities, our operating results may fluctuate substantially. The price and availability of corn are subject to significant fluctuations depending upon a number of factors that affect commodity prices in general, including crop conditions, weather, federal policy and foreign trade. Because the market price of ethanol is not always directly related to corn prices, at times ethanol prices may lag movements in corn prices and compress the overall margin structure at the plants. As a result, operating margins may become negative and we may be forced to shut down our plants.

We focus on locking in margins based on a cash flows model that continually monitors market prices of corn, natural gas and other input costs against prices for ethanol and distillers grains at each of our production facilities. We create offsetting positions by using a combination of derivative instruments, fixed-price purchases and sales, or a combination of strategies in order to manage risk associated with commodity price fluctuations. Our primary focus is not to manage general price movements, for example minimize the cost of corn consumed, but rather to lock in favorable margins whenever possible. In the quarter ended March 31, 2014, the average Chicago Opis Spot Ethanol Assessment was $2.20 per gallon and the average NYMEX RBOB spot gasoline price was $2.78 per gallon, or approximately $0.58 per gallon above ethanol prices.

Federal policy has a significant impact on ethanol market demand. Ethanol blenders previously benefited from incentives that encouraged usage and a tariff on imported ethanol that supported the domestic industry, both of which have now expired. Additionally, the Environmental Protection Agency’s Renewable Fuels Standard (“RFS”) mandates increased level of usage of both corn-based and cellulosic ethanol. Any adverse ruling on, or legislation affecting, RFS mandates in the future could have an adverse impact on short-term ethanol prices and our financial performance in the future.

The ethanol industry and our business depend upon continuation of the federal and state ethanol supports such as the RFS. We believe the ethanol industry expanded due to these federal mandates, policies, and incentives. These government mandates have supported a market for ethanol that might disappear without these programs. Alternatively, the government mandates may be continued at lower levels than those at which they currently exist. In addition, state regulatory activity may also negatively affect the consumption of corn-based ethanol in certain domestic markets such as California, due to low-carbon fuel standards that take into consideration the effects caused by indirect land use.

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The Renewable Fuels Standard

The Renewable Fuels Standard (“RFS”) is a national program that imposes requirements with respect to the amount of renewable fuel produced and used in the United States. The RFS was revised by the EPA in July 2010 (“RFS2”) and applies to refineries, blenders, distributors and importers. We believe the RFS2 program will increase the market for renewable fuels, such as ethanol, as a substitute for petroleum-based fuels. The RFS2 required that 16.55 billion gallons be sold or dispensed in 2013, increasing to 36.0 billion gallons by 2022, representing 7% of the anticipated gasoline and diesel consumption in 2022. In 2013, RFS2 required refiners and importers to blend renewable fuels totaling at least 9.74% of total fuel volume, of which 8.12% of total fuel volume, or 13.8 billion gallons, could be derived from corn-based ethanol. The remainder of the requirement is to be met by non-corn related advanced renewable fuels such as cellulosic ethanol and biomass-based biodiesel. The RFS requirement for corn-based ethanol is capped at 15.0 billion gallons starting in 2015.

In November 2013, the EPA proposed a 9.7% reduction of the original 2014 statutory corn-based ethanol blending volume requirements to approximately 13.0 billion gallons per year. This would be a reduction from the 2013 requirement of 13.8 billion gallons for corn-based ethanol, and the original statutory 2014 volume of 14.4 billion gallons. The proposal is subject to a 60-day comment period which has ended and the EPA is processing the comments. The EPA plans to release the final version of the 2014 ethanol blending volume requirements in June 2014. If the proposal becomes a final rule, ethanol demand may decrease. Current ethanol production capacity is approximately 14.9 billion gallons per the RFA.

The following chart illustrates the potential United States ethanol demand based on the schedule of minimum usage established by the program through the year 2022 (in billions of gallons).

			Cellulosic						RFS Requirement
	Total Renewable		Ethanol		Biodiesel				That Can Be Met
	Fuel		Minimum		Minimum		Advanced		With Corn-Based
Year	Requirement		Requirement		Requirement		Biofuel		Ethanol
2014 (1)		18.15		1.75		—		3.75		14.40
2014 (2)		15.21		0.02		1.28		2.20		13.01
2015		20.50		3.00		—		5.50		15.00
2016		22.25		4.25		—		7.25		15.00
2017		24.00		5.50		—		9.00		15.00
2018		26.00		7.00		—		11.00		15.00
2019		28.00		8.50		—		13.00		15.00
2020		30.00		10.50		—		15.00		15.00
2021		33.00		13.50		—		18.00		15.00
2022		36.00		16.00		—		21.00		15.00

(1) Original statutory 2014 volumes.

(2) Proposed EPA 2014 Renewable Fuel Standards issued November 2013.

The RFS2 went into effect on July 1, 2010 and requires certain gas emission reductions for the entire lifecycle, including production of fuels. The greenhouse gas reduction requirement generally does not apply to facilities that commenced construction prior to December 2007. If this changes and our plants must meet the standard for emissions reduction, it may affect the way we procure feed stock and modify the way we market and transport our products.

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California Low-Carbon Fuel Standard

In April 2009, the California air regulators approved the Low-Carbon Fuel Standard (“LCFS”) aimed at achieving a 10% reduction in motor vehicle emissions of greenhouse gases by 2020. Other states may adopt similar legislation, which may lead to a national standard. The regulation requires that providers, refiners, importers and blenders ensure that the fuels they provide in the California market meet a declining standard of carbon intensity. This rule calls for a reduction of greenhouse gas emissions associated with the production, transportation and consumption of a fuel. The emissions score also includes indirect land-use change pollution created from converting a forest to cultivated land for corn feedstock. The final regulation contains a provision to review the measurement of the indirect land-use effects and further analysis of the land-use values and modeling inputs.

In December 2011, the United States District Court for the Eastern District of California ruled that the low-carbon fuel standard violated the commerce clause on the grounds that it discriminates against out-of-state ethanol producers and out-of-state and foreign crude oil transporters in favor of in-state competitors, and issued an injunction. In April 2012, the United States Ninth Circuit Court of Appeals stayed the injunction, and expedited briefing of the appeal. In September 2013, the Ninth Circuit Court of Appeals upheld California’s low-carbon fuel standard. The Court of Appeals returned the case to the District Court in Fresno, California to decide whether the fuel standard, while neutral in design, has a discriminatory impact on non-California producers in practice.

This standard and other similar standards by other states may impact the way ethanol producers procure feed stocks, produce dry distillers grains and market and transport ethanol and distillers grains. Ethanol produced through low-carbon methods, including imported ethanol made from sugarcane, may be redirected to certain markets and U.S. producers may be prevented from selling ethanol in California and be required to market their ethanol in other regions with possible material adverse effects on our profitability.

European Union Anti-Dumping Investigation

On December 19, 2012, the Antidumping Advisory Committee of the EU endorsed a 9.5 percent penalty on U.S. ethanol imports to Europe, which was approved by a majority of EU states on December 20, 2012. The anti-dumping duty was imposed as a regulation by the Council of the European Union on February 18, 2013. The Company does not export any ethanol to Europe at this time. Imposition of tariffs could reduce U.S. exports to Europe, and possibly other export markets. A reduction of exports to Europe could have an adverse effect on domestic ethanol prices, as the available supply of ethanol for the domestic market would increase.

COMPETITION

Ethanol

The ethanol we produce is similar to ethanol produced by other plants. The RFA reports that as of March 2014, current U.S. ethanol production capacity is approximately 14.9 billion gallons per year, with approximately 1.2 billion gallons idle at the current time. On a national level there are many other production facilities with which we compete directly, many of whom have greater resources than we do. As of March 2014, South Dakota had 15 ethanol plants producing an aggregate of 1.0 billion gallons of ethanol per year.

The largest ethanol producers include: Abengoa Bioenergy Corp.; Archer Daniels Midland Company; Cargill, Inc.; Green Plains Renewable Energy, Inc.; POET, LLC and Valero Renewable Fuels. Producers of this size may have an advantage over us from economies of scale and stronger negotiating positions with purchasers. We market our ethanol on a regional and national basis. We believe that we are able to reach the best available markets through the use of experienced ethanol marketers and by the rail delivery methods we use. Our plants compete with other ethanol producers on the basis of price, and, to a lesser extent, delivery service. We believe that we can compete favorably with other ethanol producers due to our proximity to ample grain, natural gas, electricity and water supplies at favorable prices.

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Co-Products

In the sales of our distillers grains, we compete with other ethanol producers, as well as a number of large and smaller suppliers of competing animal feed. We believe the principal competitive factors are price, proximity to purchasers and product quality. Currently 67% of our distillers grain revenues are derived from the sale of dried distillers grains, which have an indefinite shelf life and can be transported by truck or rail, and 33% as modified and wet distillers grains, which have a shorter shelf life and are typically sold in local markets.

In the sales of corn oil, we compete with other ethanol producers.

LIQUIDITY AND CAPITAL RESOURCES

Financing and Existing Debt Obligations

We conduct our business activities and plant operations through the parent company, Advanced BioEnergy, and its primary operating subsidiary, ABE South Dakota. ABE Fairmont has minimal activity following the sale of the Fairmont facility. The liquidity and capital resources for each entity are based on the entity’s existing financing arrangements and capital structure. There are provisions contained in the financing agreements at ABE South Dakota preventing cross-default or collateralization between operating entities. Advanced BioEnergy is highly restricted in its ability to use the cash and other financial resources of ABE South Dakota for the benefit of Advanced BioEnergy, with the exception of allowable distributions as defined in the ABE South Dakota financing agreements.

Advanced BioEnergy, LLC (“ABE”)

ABE had cash and cash equivalents of $6.2 million on hand at March 31, 2014. ABE did not have any debt outstanding as of March 31, 2014. ABE’s primary source of operating cash comes from charging a monthly management fee to ABE South Dakota for services provided in connection with operating the ABE South Dakota plants. The primary management services provided include risk management, accounting and finance, human resources and other general management related responsibilities.

Due to personnel reductions and other changes in the Company since the sale of the Fairmont plant, the Company is in the process of re-evaluating the administrative services agreement. The outcome of the re-evaluation is expected to include a change in terms or elimination of the administrative services agreement in conjunction with an overall change in the Company structure, whereby current ABE employees would become direct employees of ABE South Dakota and the management fee concept would be discontinued. From time to time, ABE may receive certain allowable distributions from ABE South Dakota based on the terms and conditions in its senior credit agreement. ABE will not receive any distribution from ABE South Dakota for its fiscal 2013 financial results. Allowable distributions from ABE South Dakota are further explained in the ABE South Dakota section below.

In connection with the execution of a rail car sublease, the Company, as parent of ABE South Dakota agreed to post a $2.5 million irrevocable and non-transferable standby letter of credit in May 2012 for the benefit of Gavilon as security for the payment obligations of ABE South Dakota under certain agreements with Gavilon. The Company has deposited $2.5 million in a restricted account as collateral for this letter of credit and has classified it as restricted cash.

We believe ABE has sufficient financial resources available to fund current operations and capital expenditure requirements for at least the next 12 months.

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ABE Fairmont

ABE Fairmont had cash and cash equivalents of $7.0 million on hand at March 31, 2014, which is unrestricted and can be distributed to Advanced BioEnergy at any time. ABE Fairmont also has a short term escrow balance of $8.0 million to secure the indemnification obligations of the Company and ABE Fairmont, with a scheduled escrow release date in June 2014.

ABE Fairmont has agreed to cooperate with Flint Hills Resources, LLC with respect to post-closing matters, including completing the transfer of certain railway lines. The Company anticipates that ABE Fairmont will remain in existence as a separate entity until it completes all its obligations under the asset purchase agreement and other ongoing agreements, except to the extent that the Company determines that it can perform these obligations itself after the liquidation of ABE Fairmont.

ABE South Dakota

ABE South Dakota had cash and cash equivalents of $12.2 million and $3.3 million of restricted cash on hand at March 31, 2014. The restricted cash consists of $3.0 million for a debt service payment reserve, and $0.3 million in an account for maintenance capital expenditures. On March 31, 2014, ABE South Dakota made a debt sweep payment in the amount of $4.3 million in addition to its scheduled principal payment of $750,000. As of March 31, 2014, ABE South Dakota had interest-bearing term debt outstanding of $62.8 million.

In June 2010, ABE South Dakota entered into an Amended and Restated Senior Credit Agreement effective as of June 18, 2010, and amended on December 9, 2011 (the “Senior Credit Agreement”) among ABE South Dakota, the lenders from time to time party thereto, and an Administrative Agent and Collateral Agent. The principal amount of the term loan facility is payable in quarterly payments of $750,000, with the remaining principal amount fully due and payable on March 31, 2016. Loans outstanding under the Senior Credit Agreement are subject to mandatory prepayment in certain circumstances, including, but not limited to, mandatory prepayments based upon receipt of certain proceeds of asset sales, casualty proceeds, termination payments, and cash flows.

ABE South Dakota has agreed to pay a $3.0 million restructuring fee to the lender due at the earlier of March 31, 2016 and the date on which the loans are repaid in full. ABE South Dakota recorded the restructuring fee as long-term, non-interest bearing debt. ABE South Dakota is also obligated to pay a waiver fee to the senior lenders of $275,000, payable in installments in fiscal 2014 and 2015. The Company has recorded this fee as non-interest bearing debt on its consolidated balance sheet, and is amortizing the fee to interest expense over the remaining life of the debt.

ABE South Dakota’s obligations under the Senior Credit Agreement are secured by a first-priority security interest in all of the equity in and assets of ABE South Dakota. ABE South Dakota is allowed to make equity distributions (other than certain tax distributions) to ABE only upon ABE South Dakota meeting certain financial conditions and if there is no more than $25 million of principal outstanding on the senior term loan. The Senior Credit Agreement and the related loan documentation include, among other terms and conditions, limitations (subject to specified exclusions) on ABE South Dakota’s ability to make asset dispositions; merge or consolidate with or into another person or entity; create, incur, assume or be liable for indebtedness; create, incur or allow liens on any property or assets; make investments; declare or make specified restricted payments or dividends; enter into new material agreements; modify or terminate material agreements; enter into transactions with affiliates; change its line of business; and establish bank accounts. Substantially all cash of ABE South Dakota is required to be deposited into special, segregated project accounts subject to security interests to secure obligations in connection with the Senior Credit Agreement. The Senior Credit Agreement contains customary events of default and also includes an event of default for defaults on other indebtedness by ABE South Dakota and certain changes of control.

As of September 30, 2013, ABE South Dakota had not replenished the debt service reserve under its senior loan to the greater of six months of principal and interest or $3.0 million, or satisfied a non-financial requirement, both of which constituted events of default under its Senior Credit Agreement. The senior lenders waived the events of default through December 31, 2013.

As of December 31, 2013, ABE South Dakota funded the debt service reserve to the required level of $3.0 million and stopped accruing default interest which totaled $1.1 million. ABE South Dakota paid the default interest in January 2014, and the senior lenders waived the non-financial default through June 30, 2014. As of the date of this filing, the non-financial requirement has been satisfied and no additional waiver is necessary.

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At March 31, 2014, ABE South Dakota had working capital of $22.7 million, excluding current principal due. Net working capital, excluding current principal due, increased by $10.0 million since September 2013.

Due to the favorable margin environment and consequent increase in working capital over the past six months, ABE South Dakota no longer intends to continue its discussions with the senior lenders regarding its overall capital structure. We believe we have adequate existing liquidity and cash flows from operations to fund capital requirements and the minimum annual principal and interest payments required under the terms of the senior credit agreement for at least the next 12 months.

CASH FLOWS

The following table shows our cash flows for the six months ended March 31, 2014 and 2013:

	Six Months Ended March 31
	2014			2013
	(In thousands)
Net cash provided by operating activities	$	14,383		$	6,401
Net cash provided by (used in) investing activities		(3,045	)		157,461
Net cash used in financing activities		(13,759	)		(154,018	)

Cash Flow from Operating Activities

Our net cash flows from operating activities for the six months ended March 31, 2014 were higher compared to the same period in 2013, primarily due to increased margins during fiscal 2014.

Cash Flow from Investing Activities

We received net proceeds of $155 million from the sale of our Fairmont assets in fiscal 2013. Our restricted cash balances also decreased in fiscal 2013 due to the pay down of debt from the debt service reserves at Fairmont and South Dakota, and the inability of our ABE South Dakota subsidiary to replenish its debt service reserve account. In the first quarter of fiscal 2014, ABE South Dakota replenished its debt service reserve account, accounting for the increase in restricted cash during the quarter.

Cash Flow from Financing Activities

We used $49.2 million in additional cash for financing activities in fiscal 2013 due to the pay down of all outstanding debt at ABE Fairmont after the sale of the facility as well as normal principal payments of $1.1 million at South Dakota, compared to normal principal payments of $1.6 million and a sweep payment of $4.3 million in fiscal 2014. In addition, we paid a cash distribution to unit holders of $4.15 per unit or $104.5 million from the proceeds of the sale of the Fairmont facility in fiscal 2013, compared to a cash distribution of $0.31 per unit or $7.9 million in fiscal 2014.

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CREDIT ARRANGEMENTS

Long-term debt consists of the following (in thousands, except percentages):

	March 31,
	2014			March 31,			September 30,
	Interest Rate			2014			2013
ABE South Dakota:
Senior debt principal—variable		4.24	%	$	62,800		$	68,632
Restructuring fee		N/A			3,098			3,103
Additional carrying value of restructured debt		N/A			4,839			6,112
Total outstanding					70,737			77,847
Additional carrying value of restructured debt		N/A			(4,839	)		(6,112	)
Stated principal				$	65,898		$	71,735

The estimated maturities of debt at March 31 are as follows (in thousands):

					Amortization of
					Additional Carrying
	Stated				Value of
	Principal		Restructuring Fee		Restructured Debt		Total
2015	$	3,000	$	—	$	2,477	$	5,477
2016		59,800		3,098		2,362		65,260
Total debt	$	62,800	$	3,098	$	4,839	$	70,737

SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Note 1 to our consolidated financial statements contains a summary of our significant accounting policies, many of which require the use of estimates and assumptions. Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. We used our knowledge and experience about past events and certain future assumptions to make estimates and judgments involving matters that are inherently uncertain and that affect the carrying value of our assets and liabilities. We believe that of our significant accounting policies, the following are noteworthy because changes in these estimates or assumptions could materially affect our financial position and results of operations:

Revenue Recognition

Ethanol revenue is recognized when product title and all risk of ownership is transferred to the customer as specified in the contractual agreements with the marketers. Under the terms of the marketing agreements with Gavilon, revenue is recognized when product is loaded into rail cars or trucks for shipment. Revenue was previously recognized upon the release of the product for shipment. Revenue from the sale of co-products is recorded when title and all risk of ownership transfers to customers. Co-products are normally shipped free on board (“FOB”) shipping point. Interest income is recognized as earned. In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, commissions due to the marketers are deducted from the gross sale price at the time of payment.

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Derivative Instruments/Due From Broker

On occasion, the Company has entered into derivative contracts to hedge the Company’s exposure to price risk related to forecasted corn purchases and forecasted ethanol sales. Accounting for derivative contracts requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows of a forecasted transaction, or (c) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction.

Although the Company believes its derivative positions are economic hedges, none have been designated as a hedge for accounting purposes and derivative positions are recorded on the balance sheet at their fair market value, with changes in fair value recognized in current period earnings.

In addition, certain derivative financial instruments that meet the criteria for derivative accounting treatment also qualify for a scope exception to derivative accounting, as they are considered normal purchases and sales. The availability of this exception is based on the assumption that the Company has the ability and it is probable to deliver or take delivery of the underlying item.

Inventories

Chemicals, supplies, work in process, ethanol and distillers grains inventories are stated at the lower of weighted average cost or market.

Property and Equipment

Property and equipment is carried at cost less accumulated depreciation computed using the straight-line method over the estimated useful lives:

Office equipment	3-7 Years
Process equipment	10 Years
Buildings	40 Years

Maintenance and repairs are charged to expense as incurred; major improvements and betterments are capitalized. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount on the asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group. An impairment loss is measured by the amount by which the carrying value of the asset exceeds the estimated fair value on that date.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements.

GOVERNMENT PROGRAMS AND TAX CREDITS

The State of South Dakota pays an incentive to operators of ethanol plants to encourage the growth of the ethanol industry. The Huron plant is eligible to receive an aggregate of $9.7 million, payable up to $1 million per year. The amounts are dependent on annual allocations by the State of South Dakota and the number of eligible plants. ABE South Dakota has received $0.4 million in the first six months of fiscal 2014.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

COMMODITY PRICE RISK

We consider our principal market risk to be the potential changes in commodity prices and their effect on our results of operations. We are subject to significant market risk with respect to the price of ethanol and corn. For the quarter ended March 31, 2014, sales of ethanol represented 79% of our total revenues and corn costs represented 62% of total cost of goods sold. In general, ethanol prices are affected by the supply and demand for ethanol, the cost of ethanol production, the availability of other fuel oxygenates, the regulatory climate and the cost of alternative fuels such as gasoline. The price of corn is affected by weather conditions and other factors affecting crop yields, farmer planting decisions and general economic, market and regulatory factors. At March 31, 2014, the price per gallon of ethanol and the cost per bushel of corn on the Chicago Board of Trade, or CBOT, were $3.46 and $5.02, respectively.

We are also subject to market risk on the selling prices of our distillers grains, which represent 20% of our total revenues. These prices fluctuate seasonally when the price of corn or other cattle feed alternatives fluctuate in price. The dried distiller grains spot price for South Dakota local customers was $234 per ton at March 31, 2014.

We are also subject to market risk with respect to our supply of natural gas that is consumed in the ethanol production process. Natural gas costs represented 17% of total cost of goods sold for the quarter ended March 31, 2014. The price of natural gas is affected by weather conditions and general economic, market and regulatory factors. At March 31, 2014, the price of natural gas on the NYMEX was $4.37 per mmbtu.

To reduce price risk caused by market fluctuations in the cost and selling prices of related commodities, we have entered into forward purchase/sale contracts and derivative transactions. At March 31, 2014, we guaranteed prices representing 38% of our estimated ethanol production through June 2014 by entering into flat-priced contracts. At March 31, 2014, we had entered into forward sale contracts representing 42% of our expected distillers grains production through June 2014. At March 31, 2014, prices of 28% of our expected corn requirements through June 2014 were fixed by contract. At March 31, 2014 prices of 18% of our natural gas requirements through May 2014 were fixed by contract.

The following represents a sensitivity analysis that estimates our annual exposure to market risk with respect to our current corn and natural gas requirements and ethanol sales. Market risk is estimated as the potential impact on operating income resulting from a hypothetical 10% change in the current ethanol, distiller grains, corn, and natural gas prices. The results of this analysis, which may differ from actual results, are as follows:

									Change in
	Estimated at			Hypothetical					Annual
	Risk			Change in			Spot		Operating
	Volume (1)		Units	Price			Price(2)		Income
	(In millions)								(In millions)
Ethanol		52.9	gallons		10.0	%	$	3.46	$	18.3
Distillers grains		0.15	tons		10.0	%		234.00		3.5
Corn		22.1	bushels		10.0	%		5.02		11.1
Natural gas		1.9	btus		10.0	%		4.37		0.8

(1) The volume of ethanol at risk is based on the assumption that we will enter into contracts for 38% of our expected annual gallons capacity of 85 million gallons. The volume of distillers grains at risk is based on the assumption that we will enter into contracts for 42% of our expected annual distillers grains production of 258,000 tons. The volume of corn is based on the assumption that we will enter into forward contracts for 28% of our estimated current 30.3 million bushel annual requirement. The volume of natural gas at risk is based on the assumption that we will enter into contracts for 18% of our estimated 1.9 million btus.

(2) Current spot prices include the CBOT price per gallon of ethanol and the price per bushel of corn, the NYMEX price per mmbtu of natural gas and our listed local advertised dried distillers grains price per ton as of March 31, 2014.

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INTEREST RATE/FOREIGN EXCHANGE RISK

Our future earnings may be affected by changes in interest rates due to the impact those changes have on our interest expense on borrowings under our credit facilities. As of March 31, 2014, we had $62.9 million of outstanding borrowings with variable interest rates. With each 1% change in interest rates our annual interest would change by $0.6 million.

We have no direct international sales. Historically all of our purchases have been denominated in U.S. dollars. Therefore we do not consider future earnings subject to foreign exchange risk.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer, who is also our chief financial officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, our chief executive officer, who is also our chief financial officer, concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and to ensure that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officer, to allow timely decisions regarding required disclosures.

Changes in Internal Controls

There were no changes in our internal controls over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

There are no material changes from risk factors as previously discussed in our September 30, 2013 Annual Report on Form 10-K, except as follows:

Proposed regulations governing the production and sale of animal feeds, including distillers grains, may change our operating procedures and increase our operating costs, and could affect the export markets for distillers grains.

Food Safety Modernization Act (“FSMA”)

In 2011, the FSMA was signed into law by President Obama, and is intended to strengthen the food safety system in the United States. The U.S. Food and Drug Administration (“FDA”) will administer the law, which will require food producers, including distillers grains producers, to document, implement and monitor preventative contamination controls in the food production process. The FDA has released a proposed rule governing the implementation of the FSMA, and originally sought comments by the end of February 2014. However, it is expected that the FDA will soon announce 90-day extension of the comment period to June 30, 2014. The ethanol industry is examining the proposed rule in order to determine the potential impact on the industry. The implementation of the final regulations may change our operating procedures for the production, handling and sale of distillers grains, and may increase our operating and compliance costs.

34

Distillers Grains Exports to China

China is currently the largest export market for U.S. dry distillers grains, reaching 4.49 million metric tons in 2013 or 46% of all distillers grains exported. The Chinese government recently signaled its intent to regulate the quality of food imports into China. To achieve this goal, the China AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine) agency has indicated that it will require U.S. food producers to register and comply with Chinese food preparation guidelines, and the U.S. government to monitor the production of food products in the U.S. that are exported to China, in a manner similar to the system proposed under the FSMA. The ethanol industry and U.S. government are examining these requirements in order to determine appropriate responses.

We cannot estimate the effect these regulations, if implemented, would have on the overall distillers grains market. They could have the effect of reducing exports to China if U.S. producers are unable to comply with the regulations, which could reduce distillers grains prices in the domestic market by decreasing worldwide demand for distillers grains.

Rail traffic congestion may affect our ability to return our tanker rail cars to our plants on a timely basis, and could require us to reduce or cease production in the event we exceed our ethanol storage capacity.

There has been a recent increase in rail traffic congestion on the BNSF and CP rail lines which services the Aberdeen and Huron plants respectively due to the increase in cargo trains carrying oil from the oil shale fields in Western North Dakota. This congestion is affecting our ability to return our tanker rail cars to the Aberdeen plant on a timely basis. Delays in returning rail cars to our plants may affect our ability to operate our plants at full capacity due to ethanol storage capacity constraints.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On February 25, 2014, the Securities and Exchange Commission (“SEC”) issued an order instituting administrative proceedings against Clean Energy Capital, LLC (“CEC”) and Scott A. Brittenham (the “Action”). The SEC has alleged that CEC and Brittenham violated the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and the Investment Company Act of 1940. Advanced BioEnergy LLC (the “Company”) is not a party to the proceeding.

Mr. Brittenham has served as a director of the Company since 2008 and as the Chairman of the Board of Directors of the Company since October 2011.

Mr. Brittenham has advised the Board that he denies the SEC allegations and is defending the Action. He also advised the Board that he does not believe the Action affects the day-to-day business of the Company or his ability to serve as the Chairman of the Board.

As disclosed in the Company’s Proxy Statement for 2014 Regular Meeting of Members, pursuant to a 2009 Voting Agreement, the Company and parties holding a majority of the Company voting power are required to nominate, recommend and vote for election to the Board two designees of Hawkeye Energy Holdings, LLC, two designees of CEC, and the Chief Executive Officer of the Company. Mr. Brittenham was one of the two CEC 2014 designees and was reelected to Board in March 2014.

Subsequent to the 2014 Annual Meeting, Mr. Brittenham and the Board mutually agreed that Mr. Brittenham would step down as Chair of the Company’s Audit Committee for corporate governance reasons. Mr. Brittenham remains as an Audit Committee member. Troy Otte is the current Chair of the Audit Committee.

During a Board meeting held on April 9, 2014, the Board met without Mr. Brittenham present, and determined that Mr. Brittenham should remain as Chairman of the Board at the current time. If the Board in the future, however, determines that the Action impairs Mr. Brittenham’s ability to serve effectively as Board Chairman or a director of the Company or adversely affects the Company’s ability to pursue its strategic plan, it may take additional action with respect to this matter.

35

Item 6. Exhibits

The exhibits filed herewith are set forth on the Exhibit Index filed as a part of this report beginning immediately following the signatures.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ADVANCED BIOENERGY, LLC
Date: May 15, 2014	By:	/s/ Richard R. Peterson
		Richard R. Peterson
		Chief Executive Officer and President,
		Chief Financial Officer
		(Duly authorized signatory and Principal Financial Officer)

36

EXHIBIT INDEX

Exhibit
No.	Description	Method of Filing
31	Rule 13a-14(a)/15d-14(a) Certification by Principal Executive Officer, Financial and Accounting Officer.	Filed Electronically
32	Section 1350 Certifications.	Filed Electronically
101	The following materials from Advanced BioEnergy’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, formatted in XBRL: (i) Consolidated Balance Sheets at March 31, 2014 and September 30, 2013 ; (ii) Consolidated Statements of Operations for the three and six months ended March 31, 2014 and March 31, 2013; (iii) Consolidated Statements of Changes in Member’s Equity for the six months ended March 31, 2014; (iv) Consolidated Statements of Cash Flows for the six months ended March 31, 2014 and 2013; and (v) Notes to the Consolidated Financial Statements.	Filed Electronically

37

EX-31

EXHIBIT 31

CERTIFICATION

I, Richard R. Peterson, certify that:

1. I have reviewed this Form 10-Q of Advanced BioEnergy, LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2014	/s/ Richard R. Peterson
	Richard R. Peterson
	Chief Executive Officer and Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Advanced BioEnergy, LLC (the “Company”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard R. Peterson, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of our knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Richard R. Peterson

Richard R. Peterson

Chief Executive Officer and

Chief Financial Officer

May 15, 2014

XML

Debt - Additional Information (Detail) (USD $)	6 Months Ended				6 Months Ended
	Mar. 31, 2014	Jun. 18, 2010	May 04, 2012 Letter of credit [Member]	Mar. 31, 2014 Three Month LIBOR [Member]	Mar. 31, 2014 ABE South Dakota [Member]	Mar. 31, 2014 ABE South Dakota [Member] Eurodollar Rate Loans [Member]	Mar. 31, 2014 ABE South Dakota [Member] Base Rate [Member]
Debt Instrument [Line Items]
Irrevocable and non-transferable standby letter of credit			$ 2,500,000
Restricted account collateral for letter of credit			2,500,000
Restructuring fee paid to the lenders	3,098,000				3,000,000
Reduction in accrued interest payable	The interest accrued on outstanding term and working capital loans under the previous credit agreement were reduced to zero.
Debt service		0
Principal amount of term loan payable	750,000
Debt sweep payment					4,300,000
Fee to senior lenders					275,000
Senior term loan maturity period, Start Range	1 month
Senior term loan maturity period, End Range	6 months
Debt instrument interest percentage						4.00%	3.00%
Interest rate description						LIBOR plus the applicable margin of 4.0%.
Maximum loan limit for dividend payments					$ 25,000,000
Effective interest rate over the Three-Month LIBOR	0.50%			0.27%

XML

Parent Financial Statements - Balance Sheets (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013	Mar. 31, 2013	Sep. 30, 2012
Current assets:
Cash and cash equivalents	$ 25,375	$ 27,796	$ 21,054	$ 11,210
Restricted cash	13,785	10,961
Prepaid expenses	969	741
Total current assets	53,422	52,685
Property and equipment, net	53,606	58,645
Other assets:
Other assets	1,051	1,211
Total assets	108,079	112,541
Current liabilities:
Accounts payable	4,975	5,745
Accrued expenses	3,570	3,770
Distribution payable		7,877
Total current liabilities	13,995	95,239
Other liabilities	64	79
Total liabilities	79,346	95,318
Members' equity:
Members' capital, no par value, 25,410,851 units issued and outstanding	60,835	60,835
Accumulated deficit	(32,102)	(43,612)
Total members' equity	28,733	17,223
Total liabilities and members' equity	108,079	112,541
Parent Company [Member]
Current assets:
Cash and cash equivalents	6,163	6,558	6,462	5,400
Restricted cash	2,500	2,500
Miscellaneous Receivables	12
Prepaid expenses	48	20
Total current assets	8,723	9,078
Property and equipment, net	420	425
Other assets:
Other assets	32	32
Total assets	30,339	26,701
Current liabilities:
Accounts payable	4	10
Accrued expenses	1,538	1,512
Distribution payable		7,877
Total current liabilities	1,542	9,399
Other liabilities	64	79
Total liabilities	1,606	9,478
Members' equity:
Members' capital, no par value, 25,410,851 units issued and outstanding	60,835	60,835
Accumulated deficit	(32,102)	(43,612)
Total members' equity	28,733	17,223
Total liabilities and members' equity	30,339	26,701
ABE Fairmont [Member] | Parent Company [Member]
Other assets:
Investment in ABE	14,988	23,138
ABE South Dakota [Member] | Parent Company [Member]
Other assets:
Investment in ABE	$ 6,176	$ (5,972)

XML

Members' Equity - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended		1 Months Ended
	Oct. 31, 2013	Mar. 31, 2014	Jan. 31, 2013 Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unit appreciation right			200,000
UAR vested period			18 months
Grant price of UAR			$ 1.15
Placed in cash Reserve		$ 10
Placed in Escrow		$ 12.5
Reduction in grant price after cash distribution	$ 0.31
Grant price after cash distribution	$ 0.84

XML

Discontinued Operations - Summarized Revenues and Expenses Included in Discontinued Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013	Sep. 30, 2013
Net sales
Total net sales	$ 51,900	$ 61,392	$ 100,137	$ 121,133
Gain on disposal of discontinued components				76,688	76,688
Income from discontinued operations		17		78,894
ABE Fairmont [Member]
Net sales
Ethanol and related products				74,099
Total net sales				74,099
Cost of goods sold				70,584
Gross profit				3,515
Selling, general and administrative		241		1,365
Operating income		(241)		2,150
Other income		249		456
Interest income		9		15
Interest expense				(415)
Income from operations of discontinued components		$ 17		$ 2,206

XML

Risk Management (Tables)

6 Months Ended

Mar. 31, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Fixed Price Forward Contracts

 The Company had entered into the following fixed price forward contracts at March 31, 2014 (in thousands):

	Quantity		Amount		Period Covered Through
Corn (bushels) Purchase Contracts		2,070	$	9,109		June 30, 2014
Ethanol (gallons) Sale Contracts		8,035		20,844		June 30, 2014
Distillers grains (tons) Sale Contracts		27		5,521		June 30, 2014
Corn Oil (pounds) Sale Contracts		96		30		April 30, 2014
Natural Gas (mmbtus) Purchase Contracts		103		520		May 31, 2014

XML

Parent Financial Statements - Statements of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Selling, general and administrative expenses	$ (1,224)	$ (1,831)	$ (2,308)	$ (4,007)
Operating income (loss)	5,064	(1,671)	12,119	(6,393)
Other income (expense)	121	63	28	117
Income (loss) from continuing operations	5,015	(1,751)	11,510	(7,997)
Income from discontinued operations		17		78,894
Net income (loss)	5,015	(1,734)	11,510	70,897
Parent Company [Member]
Equity in earnings (losses) of consolidated subsidiary	5,284	(857)	11,997	(4,369)
Management fee income from subsidiary	388	401	783	792
Selling, general and administrative expenses	(661)	(1,297)	(1,290)	(3,012)
Operating income (loss)	5,011	(1,753)	11,490	(6,589)
Other income (expense)		(2)	12	(3)
Interest income (expense)	4	4	8	(1,405)
Income (loss) from continuing operations	5,015	(1,751)	11,510	(7,997)
Income from discontinued operations		17		78,894
Net income (loss)	$ 5,015	$ (1,734)	$ 11,510	$ 70,897

XML

Risk Management - Additional Information (Detail) (Purchase Contracts [Member], Corn (bushels) [Member])	Mar. 31, 2014 bu
Purchase Contracts [Member] | Corn (bushels) [Member]
Derivative [Line Items]
Forward contracts, Quantity	1,500,000

XML

Debt - Summary of Debt (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Debt Instrument [Line Items]
Restructuring Fee	$ 3,098
Additional carrying value of restructured debt	4,839	6,112
Total debt	70,737
Stated principal	65,898	71,735
ABE South Dakota [Member]
Debt Instrument [Line Items]
Restructuring Fee	3,098	3,103
Additional carrying value of restructured debt	4,839	6,112
Total debt	70,737	77,847
ABE South Dakota [Member] | Senior debt principal - variable [Member]
Debt Instrument [Line Items]
Interest Rate variable	4.24%
Total debt	$ 62,800	$ 68,632

XML

Parent Financial Statements - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Mar. 31, 2014
ABE South Dakota [Member]
Maximum principal outstanding on senior term loan for equity distribution	$ 25
ABE Fairmont [Member]
Cash at ABE Fairmont	$ 7.0

XML

Discontinued Operations

6 Months Ended

Mar. 31, 2014

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

3. Discontinued Operations

On October 15, 2012, ABE Fairmont (“Seller”), the Company, Flint Hills Resources Fairmont, LLC, a Delaware limited liability company (“Flint Hills” or “Buyer”), and Flint Hills Resources, LLC, a Delaware limited liability company, signed an Asset Purchase Agreement under which ABE Fairmont agreed to sell to Buyer, substantially all of the assets of ABE Fairmont (the “Asset Sale”), pursuant to the terms and conditions of the Asset Purchase Agreement. The Asset Sale was completed on December 7, 2012.

Cash consideration for the Asset Sale consisted of $160.0 million, plus Seller’s inventory value of $10.7 million, for the finished products, raw materials, ingredients and certain other supplies located at Seller’s facility. Of the total proceeds payable at closing, $12.5 million was placed in escrow to serve as security to satisfy the Seller’s and the Company’s indemnification obligations to the Buyer, and the Company received approximately $157.2 million. The Company has received $4.5 million of the escrow through March 31, 2014.

The Company used these proceeds to repay the outstanding debt principal and interest of $39.8 million as of the closing date and to pay the outstanding transaction costs of approximately $2.4 million. The Company will have no continuing involvement in the cash flows of the Fairmont facility.

The remaining sale-related Fairmont assets included in the consolidated balance sheets as of March 31, 2014 and September 30, 2013 are disclosed below (amounts in thousands):

	As of		As of
	March 31, 2014		September 30, 2013
Current portion of restricted cash/escrow	$	8,000	$	8,000
Current assets of discontinued operations	$	8,000	$	8,000

Summarized preliminary revenues and expenses included in discontinued operations in the Statements of Operations for the three and six months ended March 31, 2014 and 2013 are included in the following table (amounts in thousands):

	Three Months Ended					Six Months Ended
	March 31,		March 31,			March 31,		March 31,
	2014		2013			2014		2013
Net sales
Ethanol and related products	$	—	$	—		$	—	$	74,099
Total net sales		—		—			—		74,099
Cost of goods sold		—		—			—		70,584
Gross profit		—		—			—		3,515
Selling, general and administrative		—		241			—		1,365
Operating income		—		(241	)		—		2,150
Other income		—		249			—		456
Interest income		—		9			—		15
Interest expense		—		—			—		(415	)
Income from operations of discontinued components		—		17			—		2,206
Gain on disposal of discontinued components		—		—			—		76,688
Income from discontinued operations	$	—	$	17		$	—	$	78,894

The gain on disposal of discontinued operations in fiscal 2013 is included in Income from Discontinued Operations on the Statement of Operations. The gain on disposal is composed of the following items (in thousands):

Proceeds:
Cash proceeds	$	157,249
Escrow		12,500
Inventory holdback		1,071
Total Proceeds		170,820
Assets Sold:
Property, plant and equipment, net		83,097
Inventory		10,864
Restricted cash		673
Deferred financing costs		396
Prepaid expenses		140
Deferred income		(3,422	)
Total Assets Sold		91,748
Transaction costs		2,384
Gain on Disposal of Discontinued Operations	$	76,688

XML

Risk Management - Fixed Price Forward Contracts (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2014 bu
Corn (bushels) [Member] | Purchase Contracts [Member]
Derivative [Line Items]
Forward contracts, Quantity	1,500,000
Forward Contracts [Member] | Corn (bushels) [Member] | Purchase Contracts [Member]
Derivative [Line Items]
Forward contracts, Quantity	2,070,000
Forward contracts, Amount	$ 9,109
Forward contracts, Period Covered Through	Jun. 30, 2014
Forward Contracts [Member] | Ethanol (gallons) [Member] | Sales Contracts [Member]
Derivative [Line Items]
Forward contracts, Quantity	8,035,000
Forward contracts, Amount	20,844
Forward contracts, Period Covered Through	Jun. 30, 2014
Forward Contracts [Member] | Distillers grains (tons) [Member] | Sales Contracts [Member]
Derivative [Line Items]
Forward contracts, Quantity	27,000
Forward contracts, Amount	5,521
Forward contracts, Period Covered Through	Jun. 30, 2014
Forward Contracts [Member] | Corn Oil (pounds) [Member] | Sales Contracts [Member]
Derivative [Line Items]
Forward contracts, Quantity	96,000
Forward contracts, Amount	30
Forward contracts, Period Covered Through	Apr. 30, 2014
Forward Contracts [Member] | Natural Gas (mmbtus) [Member] | Purchase Contracts [Member]
Derivative [Line Items]
Forward contracts, Quantity	103,000
Forward contracts, Amount	$ 520
Forward contracts, Period Covered Through	May 31, 2014

XML

Organization and Significant Accounting Policies - Estimated Useful Lives of Property and Equipment (Detail)	6 Months Ended
	Mar. 31, 2014
Process equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years
Buildings [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	40 years
Minimum [Member] | Office equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Maximum [Member] | Office equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	7 years

XML

Organization and Significant Accounting Policies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	6 Months Ended
	Nov. 30, 2013	Mar. 31, 2014 Facility
Organization And Significant Accounting Policies [Line Items]
Number of ethanol production facilities		3
Cash and cash equivalents maturity period		Three months or less
Reduction in volume requirement, comment period	60 days
Proposed Ethanol (Gallons) [Member]
Organization And Significant Accounting Policies [Line Items]
Proposed volume requirement		13,000,000,000
Prior Year Ethanol (Gallons) [Member]
Organization And Significant Accounting Policies [Line Items]
Volume requirement		13,800,000,000
Original Ethanol (gallons) [Member]
Organization And Significant Accounting Policies [Line Items]
Original volume requirement		14,400,000,000
Escrow Account [Member]
Organization And Significant Accounting Policies [Line Items]
Restricted cash and cash held in escrow		$ 8.0
South Dakota [Member]
Organization And Significant Accounting Policies [Line Items]
Capacity of production facilities		85,000,000
Aberdeen 1 [Member]
Organization And Significant Accounting Policies [Line Items]
Capacity of production facilities		9,000,000
Huron [Member]
Organization And Significant Accounting Policies [Line Items]
Capacity of production facilities		32,000,000
Aberdeen 2 [Member]
Organization And Significant Accounting Policies [Line Items]
Capacity of production facilities		44,000,000

XML

One-time Termination Benefit - Additional Information (Detail) (USD $)	6 Months Ended
	Mar. 31, 2014
Restructuring Cost and Reserve [Line Items]
Additional costs of one-time termination benefit	$ 100,000
Administrative costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 300,000

XML

ABE South Dakota Liquidity and Management's Plans - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended		3 Months Ended
	Sep. 30, 2013	Mar. 31, 2014	Dec. 31, 2013 ABE South Dakota [Member]	Sep. 30, 2013 ABE South Dakota [Member]
Debt Obligations [Line Items]
Amount of debt service reserve				$ 3.0
Amount of debt service reserve to be maintained			3.0
Accruing default interest			1.1
Net working capital		22.7
Increase or decrease in working capital	$ 10.0

XML

Discontinued Operations - Additional Information (Detail) (USD $)	6 Months Ended	12 Months Ended
	Mar. 31, 2014	Sep. 30, 2013
Discontinued Operations And Disposal Groups [Abstract]
Asset Sale consideration	$ 160,000,000
Inventory value	10,700,000
Proceeds from asset sale placed in escrow	12,500,000	12,500,000
Proceeds received by the company	157,200,000
Escrow received	4,500,000
Outstanding debt principal and interest of Seller	39,800,000
Outstanding transaction costs paid	$ 2,400,000

XML

ABE South Dakota Liquidity and Management's Plans

6 Months Ended

Mar. 31, 2014

Text Block [Abstract]

ABE South Dakota Liquidity and Management's Plans

2. ABE South Dakota Liquidity and Management’s Plans

As of September 30, 2013, ABE South Dakota had not replenished the debt service reserve under its senior loan to the greater of six months of principal and interest or $3.0 million, or satisfied a non-financial requirement, both of which constituted events of default under its senior credit agreement. The senior lenders waived the events of default until December 31, 2013.

As of December 31, 2013, ABE South Dakota funded the debt service reserve to the required level of $3.0 million and stopped accruing default interest, which totaled $1.1 million. ABE South Dakota paid the default interest in January 2014, and the senior lenders waived the non-financial default until June 30, 2014. As of the date of this filing, the non-financial requirement has been satisfied and no additional waiver is necessary.

At March 31, 2014, ABE South Dakota had working capital of $22.7 million, excluding current principal due. Net working capital, excluding current principal due, increased by $10.0 million since September 2013.

Due to the favorable margin environment and consequent increase in working capital over the past six months, ABE South Dakota no longer intends to continue its discussions with the senior lenders regarding its overall capital structure. The Company believes it has adequate existing liquidity and cash flows from operations to fund capital requirements and the minimum annual principal and interest payments required under the terms of the senior credit agreement for at least the next 12 months.

XML

Discontinued Operations - Summary of Major Classes of Assets and Liabilities Included in Discontinued Operations (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Discontinued Operations And Disposal Groups [Abstract]
Current portion of restricted cash/escrow	$ 8,000	$ 8,000
Current assets of discontinued operations	$ 8,000	$ 8,000

XML

Major Customers - Additional Information (Detail) (ABE South Dakota [Member])	6 Months Ended
	Mar. 31, 2014
Ethanol Marketing Agreements [Member]
Revenue, Major Customer [Line Items]
Agreement executed date	May 04, 2012
Agreement amended date	Jul. 31, 2012
Agreement effective date	Aug. 01, 2012
Agreement expiration date	Dec. 31, 2015
Co-product Marketing Agreement [Member]
Revenue, Major Customer [Line Items]
Agreement effective date	Jul. 01, 2013
Agreement expiration date	Jul. 31, 2016

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Current assets:
Cash and cash equivalents	$ 25,375	$ 27,796
Accounts receivable:
Trade accounts receivable	7,933	8,541
Other receivables	106	108
Inventories	5,254	4,538
Prepaid expenses	969	741
Current portion of restricted cash	13,785	10,961
Total current assets	53,422	52,685
Property and equipment, net	53,606	58,645
Other assets	1,051	1,211
Total assets	108,079	112,541
Current liabilities:
Accounts payable	4,975	5,745
Accrued expenses	3,570	3,770
Distribution payable		7,877
Current portion of long-term debt (stated principal amount of $2,980 and $71,735 at March 31, 2014 and September 30, 2013, respectively)	5,450	77,847
Total current liabilities	13,995	95,239
Other liabilities	64	79
Long-term debt (stated principal amount of $62,918 at March 31, 2014)	65,287
Total liabilities	79,346	95,318
Members' equity:
Members' capital, no par value, 25,410,851 units issued and outstanding	60,835	60,835
Accumulated deficit	(32,102)	(43,612)
Total members' equity	28,733	17,223
Total liabilities and members' equity	$ 108,079	$ 112,541

XML

One-time Termination Benefit - Accrued Liability Associated With One-time Termination Benefits (Detail) (One-time Termination Benefits [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
One-time Termination Benefits [Member]
Restructuring Cost and Reserve [Line Items]
Beginning balance	$ 994
Charges	261	939
Payments		(205)
Ending balance	$ 1,255	$ 734

XML

Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:
Net income	$ 11,510	$ 70,897
Adjustments to reconcile net income to operating activities cash flows:
Depreciation	5,422	5,428
Amortization of deferred financing costs	45	66
Amortization of deferred revenue and rent	(15)	(126)
Amortization of additional carrying value of debt	(1,273)	(980)
Unit compensation expense		276
(Gain) on disposal of assets		(76,688)
Loss on warrant derivative liability		1,416
Change in working capital components:
Accounts receivable	608	9,289
Inventories	(716)	3,658
Prepaid expenses	(228)	816
Accounts payable	(770)	(5,514)
Accrued expenses	(200)	(2,137)
Net cash provided by operating activities	14,383	6,401
Cash flows from investing activities:
Purchase of property and equipment	(389)	(771)
Proceeds from sale of assets, net of transaction costs	6	155,039
Change in other assets	162	65
Change in restricted cash	(2,824)	3,128
Net cash provided by (used in) investing activities	(3,045)	157,461
Cash flows from financing activities:
Payments on debt	(5,882)	(50,306)
Exercise of warrant		799
Distribution to members	(7,877)	(104,511)
Net cash (used in) financing activities	(13,759)	(154,018)
Net increase (decrease) in cash and cash equivalents	(2,421)	9,844
Beginning cash and cash equivalents	27,796	11,210
Ending cash and cash equivalents	25,375	21,054
Supplemental disclosure of cash flow information:
Cash paid for interest	2,564	1,897
Supplemental disclosure of non-cash financing and investing activities:
Exercise of options from distribution proceeds		432
Note receivable settled from distribution proceeds		$ 513

XML

Inventories - Summary of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Summary of inventories
Chemicals	$ 579	$ 792
Work in process	1,180	1,018
Ethanol	1,351	858
Distillers grain	597	311
Supplies and parts	1,547	1,559
Total	$ 5,254	$ 4,538

XML

Property and Equipment (Tables)

6 Months Ended

Mar. 31, 2014

Property Plant And Equipment [Abstract]

Summary of Property and Equipment

A summary of property and equipment is as follows (in thousands):

	March 31,			September 30,
	2014			2013
Land	$	1,811		$	1,811
Buildings		9,886			9,886
Process equipment		103,158			102,971
Office equipment		1,391			1,357
Construction in process		241			117
		116,487			116,142
Accumulated depreciation		(62,881	)		(57,497	)
Property and equipment, net	$	53,606		$	58,645

XML

Property and Equipment - Summary of Property and Equipment (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 116,487	$ 116,142
Accumulated depreciation	(62,881)	(57,497)
Property and equipment, net	53,606	58,645
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,811	1,811
Buildings [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	9,886	9,886
Process equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	103,158	102,971
Office equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,391	1,357
Construction in process [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 241	$ 117

XML

Major Customers (Tables)

6 Months Ended

Mar. 31, 2014

Risks And Uncertainties [Abstract]

Sales and Receivables

Sales and receivables from the ABE South Dakota’s major customers were as follows (in thousands):

	March 31,		March 31,
	2014		2013
Gavilon-Ethanol and Distillers Grains
Six months revenues	$	88,976	$	89,013
Receivable balance at period end		6,814		4,097
Hawkeye Gold - Distillers Grains
Six months revenues	$	—	$	17,337
Receivable balance at period end		—		1,340
Dakotaland - Distillers Grains
Six months revenues	$	6,649	$	10,923
Receivable balance at period end		673		968

XML

Organization and Significant Accounting Policies

6 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Organization and Significant Accounting Policies

1. Organization and Significant Accounting Policies

The consolidated financial statements include the accounts of Advanced BioEnergy, LLC (“ABE” or the “Company”) and its wholly owned operating subsidiaries, ABE Fairmont, LLC (“ABE Fairmont”) and ABE South Dakota, LLC (“ABE South Dakota”). All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles, or GAAP, for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The interim financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2013. The financial information as of March 31, 2014 and the results of operations for the three and six months ended March 31, 2014 are not necessarily indicative of the results for the fiscal year ending September 30, 2014. In the opinion of management, the interim financial statements reflect all normal recurring adjustments necessary for fair presentation. Certain items in the March 31, 2013 statement of operations have been reclassified to match the presentation on the Form 10-K for fiscal 2013 and do not affect net income.

The Company currently operates three ethanol production facilities in the U.S. with a combined production capacity of 85 million gallons per year. The Company acquired existing facilities in Aberdeen, South Dakota (9 million gallons) and Huron, South Dakota (32 million gallons) in November 2006 and began operations at the 44 million gallon Aberdeen expansion facility in January 2008.

The Company, through ABE Fairmont, also owned a production facility in Fairmont, NE. On December 7, 2012, the Company and ABE Fairmont sold the production facility in Fairmont, NE to Flint Hills Resources, LLC. See Note 3 of the financial statements for further description of the transaction. In accordance with the guidance under ASC Topic 205, section 20 Discontinued Operations, the results of operations for ABE Fairmont are disclosed as discontinued operations.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s cash balances are maintained in bank depositories and periodically exceed federally insured limits. The Company has not experienced losses in these accounts. The Company’s restricted cash includes cash held for debt service under the terms of its debt agreements, a deposit for a rail car sublease, as well as cash held in an escrow account relating to the sale of the Fairmont facility. The escrow account totals $8.0 million and has a scheduled release date in June 2014.

Receivables

Credit sales are made to a few customers with no collateral required. Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and considering a customer’s financial condition, credit history and current economic conditions. Receivables are written off if deemed uncollectible. Recoveries of receivables previously written off are recorded when received.

Derivative Instruments/Due From Broker

On occasion, the Company has entered into derivative contracts to hedge the Company’s exposure to price risk related to forecasted corn purchases and forecasted ethanol sales. Accounting for derivative contracts requires that an entity recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows of a forecasted transaction, or (c) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction.

Although the Company believes its derivative positions are economic hedges, it has not designated any derivative position as a hedge for accounting purposes and it records derivative positions on the balance sheet at their fair market value, with changes in fair value recognized in current period earnings.

In addition, certain derivative financial instruments that meet the criteria for derivative accounting treatment also qualify for a scope exception to derivative accounting, as they are considered normal purchases and sales. The availability of this exception is based on the assumption that the hedging party has the ability and it is probable to deliver or take delivery of the underlying item.

Inventories

Chemicals, supplies, work in process, ethanol and distillers grains inventories are stated at the lower of weighted average cost or market.

Property and Equipment

Property and equipment is carried at cost less accumulated depreciation computed using the straight-line method over the estimated useful lives:

Office equipment	3-7 Years
Process equipment	10 Years
Buildings	40 Years

Maintenance and repairs are charged to expense as incurred; major improvements and betterments are capitalized. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount on the asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group. An impairment loss is measured by the amount by which the carrying value of the asset exceeds the estimated fair value on that date.

Revenue Recognition

Ethanol revenue is recognized when product title and all risk of ownership is transferred to the customer as specified in the contractual agreements with the marketers. Under the terms of the marketing agreements with Gavilon, revenue is recognized when product is loaded into rail cars or trucks for shipment. Revenue was previously recognized upon the release of the product for shipment. Revenue from the sale of co-products is recorded when title and all risk of ownership transfers to customers. Co-products are normally shipped free on board (“FOB”) shipping point. Interest income is recognized as earned. In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, commissions due to the marketers are deducted from the gross sale price at the time of payment.

Income Per Unit

Basic and diluted income per unit is computed using the weighted-average number of vested units outstanding during the period. Unit warrants are considered unit equivalents and are considered in the diluted income-per-unit computation, but have been excluded from the computations as they are exercisable only under certain limited circumstances.

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

Discontinued Operations

The Company classified the results of operations of the Fairmont facility as discontinued operations in the first quarter of fiscal 2013 as a result of the sale of the Fairmont production facility in December 2012, and removed the operating results of the Fairmont facility from continuing operations for all periods presented.

Risks and Uncertainties

The supply and demand for ethanol are impacted by federal and state legislation and regulation, most significantly the Renewable Fuels Standard (“RFS”), and any changes in legislation or regulation could cause the demand for ethanol to decline or its supply to increase, which could have a material adverse effect on our business, results of operations and financial condition, and the ability to operate at a profit.

In November 2013, the U.S. Environmental Protection Agency proposed a reduction of the original 2014 corn-based ethanol blending volume requirements to approximately 13.0 billion gallons per year, subject to a 60 day comment period. This is a reduction from the 2013 requirement of 13.8 billion gallons for corn-based ethanol, and the original 2014 volumes of 14.4 billion gallons. The EPA plans to release the final version of the 2014 ethanol blending volume requirements in June 2014. The Company is uncertain as to the potential impact these proposed changes may have on the Company and the overall ethanol industry.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Statement Of Financial Position [Abstract]
Current portion of long-term debt (stated principal amount)	$ 2,980	$ 71,735
Principal amount of long-term debt	$ 62,918
Members' capital, par value
Members' capital, units issued	25,410,851	25,410,851
Members' capital, units outstanding	25,410,851	25,410,851

XML

Parent Financial Statements

6 Months Ended

Mar. 31, 2014

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Parent Financial Statements

11. Parent Financial Statements

The following financial information represents the unconsolidated financial statements of Advanced BioEnergy, LLC (“ABE”) as of March 31, 2014 and September 30, 2013, and for the three and six months ended March 31, 2014 and 2013. ABE’s ability to receive distributions from ABE South Dakota is based on the terms and conditions in ABE South Dakota’s credit agreement. ABE South Dakota is allowed to make equity distributions (other than certain tax distributions) to ABE only upon ABE South Dakota meeting certain financial conditions and if there is no more than $25 million of principal outstanding on the senior term loan. At March 31, 2014, there was $7.0 million of cash at ABE Fairmont, which has no restrictions on distribution to the parent.

Advanced BioEnergy, LLC (Unconsolidated)

Balance Sheets

(Unaudited)

	March 31,			September 30,
	2014			2013
	(Dollars in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	6,163		$	6,558
Restricted cash		2,500			2,500
Miscellaneous Receivables		12			—
Prepaid expenses		48			20
Total current assets		8,723			9,078
Property and equipment, net		420			425
Other assets:
Investment in ABE Fairmont		14,988			23,138
Investment in ABE South Dakota		6,176			(5,972	)
Other assets		32			32
Total assets	$	30,339		$	26,701
LIABILITIES AND MEMBERS’ EQUITY
Current liabilities:
Accounts payable	$	4		$	10
Accrued expenses		1,538			1,512
Distribution payable		—			7,877
Total current liabilities		1,542			9,399
Other liabilities		64			79
Total liabilities		1,606			9,478
Members’ equity:
Members’ capital, no par value, 25,410,851 units issued and outstanding		60,835			60,835
Accumulated deficit		(32,102	)		(43,612	)
Total members’ equity		28,733			17,223
Total liabilities and members’ equity	$	30,339		$	26,701

Advanced BioEnergy, LLC (Unconsolidated)

Statements of Operations

(Unaudited)

	Three Months Ended						Six Months Ended
	March 31,			March 31,			March 31,			March 31,
	2014			2013			2014			2013
	(Dollars in thousands)						(Dollars in thousands)
Equity in earnings (losses) of consolidated subsidiary	$	5,284		$	(857	)	$	11,997		$	(4,369	)
Management fee income from subsidiary		388			401			783			792
Selling, general and administrative expenses		(661	)		(1,297	)		(1,290	)		(3,012	)
Operating income (loss)		5,011			(1,753	)		11,490			(6,589	)
Other income (expense)		—			(2	)		12			(3	)
Interest income (expense)		4			4			8			(1,405	)
Income (loss) from continuing operations		5,015			(1,751	)		11,510			(7,997	)
Income from discontinued operations		—			17			—			78,894
Net income (loss)	$	5,015		$	(1,734	)	$	11,510		$	70,897

Advanced BioEnergy, LLC (Unconsolidated)

Statements of Cash Flows

(Unaudited)

	Six Months Ended
	March 31,			March 31,
	2014			2013
	(Dollars in thousands)
Cash flows from operating activities:
Net income	$	11,510		$	70,897
Adjustments to reconcile net income to operating activities cash flows:
Depreciation		78			82
Equity in earnings of consolidated subsidiaries		(11,997	)		(73,501	)
Distributions from consolidated subsidiaries		8,000			104,832
Gain on disposal of fixed assets		6			—
Amortization of deferred revenue and rent		(16	)		(14	)
Unit compensation expense		—			276
Loss on warrant derivative liability		—			1,416
Change in working capital components:
Accounts receivable		(12	)		156
Prepaid expenses		(28	)		(8	)
Accounts payable and accrued expenses		20			638
Net cash provided by operating activities		7,561			104,774
Cash flows from investing activities:
Purchase of property and equipment		(79	)		—
Net cash used in investing activities		(79	)		—
Cash flows from financing activities:
Exercise of warrant		—			799
Distribution to members		(7,877	)		(104,511	)
Net cash used in financing activities		(7,877	)		(103,712	)
Net increase (decrease) in cash and cash equivalents		(395	)		1,062
Beginning cash and cash equivalents		6,558			5,400
Ending cash and cash equivalents	$	6,163		$	6,462

XML

Document and Entity Information	6 Months Ended
	Mar. 31, 2014	May 01, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Entity Registrant Name	Advanced BioEnergy, LLC
Entity Central Index Key	0001325740
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		25,410,851

XML

Organization and Significant Accounting Policies (Policies)

6 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company’s cash balances are maintained in bank depositories and periodically exceed federally insured limits. The Company has not experienced losses in these accounts. The Company’s restricted cash includes cash held for debt service under the terms of its debt agreements, a deposit for a rail car sublease, as well as cash held in an escrow account relating to the sale of the Fairmont facility. The escrow account totals $8.0 million and has a scheduled release date in June 2014.

Receivables

Receivables

Credit sales are made to a few customers with no collateral required. Trade receivables are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and considering a customer’s financial condition, credit history and current economic conditions. Receivables are written off if deemed uncollectible. Recoveries of receivables previously written off are recorded when received.

Derivative Instruments/Due From Broker

Derivative Instruments/Due From Broker

On occasion, the Company has entered into derivative contracts to hedge the Company’s exposure to price risk related to forecasted corn purchases and forecasted ethanol sales. Accounting for derivative contracts requires that an entity recognize all derivatives as either assets or liabilities on the balance sheet and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows of a forecasted transaction, or (c) a hedge of the foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available-for-sale security, or a foreign-currency-denominated forecasted transaction.

Although the Company believes its derivative positions are economic hedges, it has not designated any derivative position as a hedge for accounting purposes and it records derivative positions on the balance sheet at their fair market value, with changes in fair value recognized in current period earnings.

In addition, certain derivative financial instruments that meet the criteria for derivative accounting treatment also qualify for a scope exception to derivative accounting, as they are considered normal purchases and sales. The availability of this exception is based on the assumption that the hedging party has the ability and it is probable to deliver or take delivery of the underlying item.

Inventories

Inventories

Chemicals, supplies, work in process, ethanol and distillers grains inventories are stated at the lower of weighted average cost or market.

Property and Equipment

Property and Equipment

Property and equipment is carried at cost less accumulated depreciation computed using the straight-line method over the estimated useful lives:

Office equipment	3-7 Years
Process equipment	10 Years
Buildings	40 Years

Maintenance and repairs are charged to expense as incurred; major improvements and betterments are capitalized. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount on the asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group. An impairment loss is measured by the amount by which the carrying value of the asset exceeds the estimated fair value on that date.

Revenue Recognition

Revenue Recognition

Ethanol revenue is recognized when product title and all risk of ownership is transferred to the customer as specified in the contractual agreements with the marketers. Under the terms of the marketing agreements with Gavilon, revenue is recognized when product is loaded into rail cars or trucks for shipment. Revenue was previously recognized upon the release of the product for shipment. Revenue from the sale of co-products is recorded when title and all risk of ownership transfers to customers. Co-products are normally shipped free on board (“FOB”) shipping point. Interest income is recognized as earned. In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, commissions due to the marketers are deducted from the gross sale price at the time of payment.

Income Per Unit

Income Per Unit

Basic and diluted income per unit is computed using the weighted-average number of vested units outstanding during the period. Unit warrants are considered unit equivalents and are considered in the diluted income-per-unit computation, but have been excluded from the computations as they are exercisable only under certain limited circumstances.

Accounting Estimates

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

Discontinued Operations

Discontinued Operations

The Company classified the results of operations of the Fairmont facility as discontinued operations in the first quarter of fiscal 2013 as a result of the sale of the Fairmont production facility in December 2012, and removed the operating results of the Fairmont facility from continuing operations for all periods presented.

Risks and Uncertainties

Risks and Uncertainties

The supply and demand for ethanol are impacted by federal and state legislation and regulation, most significantly the Renewable Fuels Standard (“RFS”), and any changes in legislation or regulation could cause the demand for ethanol to decline or its supply to increase, which could have a material adverse effect on our business, results of operations and financial condition, and the ability to operate at a profit.

In November 2013, the U.S. Environmental Protection Agency proposed a reduction of the original 2014 corn-based ethanol blending volume requirements to approximately 13.0 billion gallons per year, subject to a 60 day comment period. This is a reduction from the 2013 requirement of 13.8 billion gallons for corn-based ethanol, and the original 2014 volumes of 14.4 billion gallons. The EPA plans to release the final version of the 2014 ethanol blending volume requirements in June 2014. The Company is uncertain as to the potential impact these proposed changes may have on the Company and the overall ethanol industry.

XML

Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014	Mar. 31, 2013
Net sales
Ethanol and related products	$ 51,720	$ 60,399	$ 99,707	$ 119,890
Other	180	993	430	1,243
Total net sales	51,900	61,392	100,137	121,133
Cost of goods sold	45,612	61,232	85,710	123,519
Gross profit (loss)	6,288	160	14,427	(2,386)
Selling, general and administrative	1,224	1,831	2,308	4,007
Operating income (loss)	5,064	(1,671)	12,119	(6,393)
Other income, net	121	63	28	117
Interest income	8	4	18	11
Interest expense	(178)	(147)	(655)	(1,732)
Income (loss) from continuing operations	5,015	(1,751)	11,510	(7,997)
Income from discontinued operations		17		78,894
Net income (loss)	$ 5,015	$ (1,734)	$ 11,510	$ 70,897
Weighted average units outstanding-basic	25,411	25,411	25,411	25,254
Weighted average units outstanding-diluted	25,411	25,411	25,411	25,254
Income (loss) from continuing operations per unit-basic and diluted	$ 0.20	$ (0.07)	$ 0.45	$ (0.32)
Income from discontinued operations per unit-basic and diluted				$ 3.12
Income (loss) per unit-basic and diluted	$ 0.20	$ (0.07)	$ 0.45	$ 2.81
Distributions declared per unit				$ 4.15

XML

Debt

6 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Debt

6. Debt

A summary of debt is as follows (in thousands, except percentages):

	March 31,
	2014			March 31,			September 30,
	Interest Rate			2014			2013
ABE South Dakota:
Senior debt principal—variable		4.24	%	$	62,800		$	68,632
Restructuring fee		N/A			3,098			3,103
Additional carrying value of restructured debt		N/A			4,839			6,112
Total outstanding					70,737			77,847
Additional carrying value of restructured debt		N/A			(4,839	)		(6,112	)
Stated principal				$	65,898		$	71,735

The estimated maturities of debt at March 31 are as follows (in thousands):

					Amortization of
					Additional Carrying
	Stated				Value of
	Principal		Restructuring Fee		Restructured Debt		Total
2015	$	3,000	$	—	$	2,477	$	5,477
2016		59,800		3,098		2,362		65,260
Total debt	$	62,800	$	3,098	$	4,839	$	70,737

Letter of Credit

In connection with the execution of a rail car sublease, the Company, as parent of ABE South Dakota, agreed to post a $2.5 million irrevocable and non-transferable standby letter of credit on May 4, 2012 for the benefit of Gavilon as security for the payment obligations of ABE South Dakota under certain agreements with Gavilon. The Company has deposited $2.5 million in a restricted account as collateral for this letter of credit and has classified it as restricted cash.

Senior Credit Agreement for the South Dakota Plants

ABE South Dakota entered into an Amended and Restated Senior Credit Agreement (the “Senior Credit Agreement”), effective as of June 18, 2010, and amended on December 9, 2011, which was accounted for under troubled debt restructuring rules. The Senior Credit Agreement was executed among ABE South Dakota, the lenders from time to time party thereto, and an Administrative Agent and Collateral Agent. The Senior Credit Agreement converted the outstanding principal amount of the loans and certain other amounts under interest rate protection agreements to a senior term loan. The interest accrued on outstanding term and working capital loans under the previous credit agreement were reduced to zero. ABE South Dakota agreed to pay a $3.0 million restructuring fee to the lenders due at the earlier of March 31, 2016 and the date on which the loans are repaid in full. ABE South Dakota recorded the restructuring fee as non-interest bearing debt on its consolidated balance sheets. See Additional Carrying Value of Restructured Debt below.

The principal amount of the term loan facility is payable in quarterly payments of $750,000, with the remaining principal amount fully due and payable on March 31, 2016. On March 31, 2014, ABE South Dakota made a debt sweep payment in the amount of $4.3 million in addition to its scheduled principal payment of $750,000. ABE South Dakota is also obligated to pay a waiver fee to the senior lenders of $275,000, payable in installments in fiscal 2014 and 2015. The Company has recorded this fee as non-interest bearing debt on its consolidated balance sheet, and is amortizing it against interest expense over the remaining term of the loan.

As described in Note 2, at December 31, 2013, ABE South Dakota was in default of the provisions of its Senior Credit Agreement due to its failure to satisfy a non-financial obligation. The lenders waived the non-financial default until June 30, 2014. As of the date of this filing, the non-financial requirement has been satisfied and no additional waiver is necessary.

ABE South Dakota has the option to select the interest rate on the senior term loan between base rate and euro-dollar rates for maturities of one to six months. Base rate loans bear interest at the administrative agent’s base rate plus an applicable margin of 3.0%. Euro-dollar loans bear interest at LIBOR plus the applicable margin of 4.0%. As of March 31, 2014, ABE South Dakota had selected the LIBOR rate for a period of one month.

ABE South Dakota’s obligations under the Senior Credit Agreement are secured by a first-priority security interest in the equity and assets of ABE South Dakota.

ABE South Dakota is allowed to make equity distributions (other than certain tax distributions) to ABE only if ABE South Dakota meets certain financial conditions and if there is no more than $25 million of principal outstanding on the senior term loan. Loans outstanding under the Senior Credit Agreement are subject to mandatory prepayment in certain circumstances, including, but not limited to, mandatory prepayments based upon receipt of certain proceeds of asset sales, casualty proceeds, termination payments, and cash flows.

The Senior Credit Agreement and the related loan documentation include, among other terms and conditions, limitations (subject to specified exclusions) on ABE South Dakota’s ability to make asset dispositions; merge or consolidate with or into another person or entity; create, incur, assume or be liable for indebtedness; create, incur or allow liens on any property or assets; make investments; declare or make specified restricted payments or dividends; enter into new material agreements; modify or terminate material agreements; enter into transactions with affiliates; change its line of business; and establish bank accounts. Substantially all cash of ABE South Dakota is required to be deposited into special, segregated project accounts subject to security interests to secure obligations in connection with the Senior Credit Agreement. The Senior Credit Agreement contains customary events of default and also includes an event of default for defaults on other indebtedness by ABE South Dakota and certain changes of control.

Additional Carrying Value of Restructured Debt

Since the future maximum undiscounted cash payments on the amended and restated senior credit facility (including principal, interest and the restructuring fee) exceeded the adjusted carrying value at the time of the restructuring, no gain for the forgiven interest was recorded, the carrying value was not adjusted and the modification of terms was accounted for on a prospective basis, via a new effective interest calculation, amortized over the life of the note, offsetting interest expense. Based on the treatment of the troubled debt restructuring, which has resulted in the additional carrying value being amortized as a reduction in interest expense over the term of the loan, the Company’s effective interest rate over the term of the restructuring note agreement is approximately 0.27% over LIBOR (0.50 % at March 31, 2014), prior to any default interest.

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Property and Equipment

6 Months Ended

Mar. 31, 2014

Property Plant And Equipment [Abstract]

Property and Equipment

5. Property and Equipment

A summary of property and equipment is as follows (in thousands):

	March 31,			September 30,
	2014			2013
Land	$	1,811		$	1,811
Buildings		9,886			9,886
Process equipment		103,158			102,971
Office equipment		1,391			1,357
Construction in process		241			117
		116,487			116,142
Accumulated depreciation		(62,881	)		(57,497	)
Property and equipment, net	$	53,606		$	58,645

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Debt (Tables)

6 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Summary of Debt

A summary of debt is as follows (in thousands, except percentages):

	March 31,
	2014			March 31,			September 30,
	Interest Rate			2014			2013
ABE South Dakota:
Senior debt principal—variable		4.24	%	$	62,800		$	68,632
Restructuring fee		N/A			3,098			3,103
Additional carrying value of restructured debt		N/A			4,839			6,112
Total outstanding					70,737			77,847
Additional carrying value of restructured debt		N/A			(4,839	)		(6,112	)
Stated principal				$	65,898		$	71,735

Schedule of Maturities of Long Term Debt

The estimated maturities of debt at March 31 are as follows (in thousands):

					Amortization of
					Additional Carrying
	Stated				Value of
	Principal		Restructuring Fee		Restructured Debt		Total
2015	$	3,000	$	—	$	2,477	$	5,477
2016		59,800		3,098		2,362		65,260
Total debt	$	62,800	$	3,098	$	4,839	$	70,737

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Organization and Significant Accounting Policies (Tables)

6 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Estimated Useful Lives of Property and Equipment

Property and equipment is carried at cost less accumulated depreciation computed using the straight-line method over the estimated useful lives:

Office equipment	3-7 Years
Process equipment	10 Years
Buildings	40 Years

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One-time Termination Benefit

6 Months Ended

Mar. 31, 2014

Restructuring And Related Activities [Abstract]

One-time Termination Benefit

9. One-time Termination Benefit

Subsequent to the sale of its Fairmont facility in fiscal 2013, the Company implemented a cost reduction program reducing the numbers of its headquarters staff to align its staffing with the smaller remaining operations. Some of the affected employees were required to provide services to the Company through various dates until June 30, 2013. The Company is accruing benefits due to the chief executive officer for services to be provided through June 2014 under his amended employment agreement signed in January 2013.

In connection with this cost reduction program, the Company has recognized administrative expense of $0.3 million in fiscal 2014, with an additional $0.1 million expected through June 2014.

At March 31, the accrued liability associated with the one-time termination benefits consisted of the following (in thousands):

	2014		2013
Beginning balance at October 1, 2013 and October 1, 2012	$	994	$	—
Charges		261		939
Payments		—		(205	)
Ending balance at March 31	$	1,255	$	734

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Major Customers

6 Months Ended

Mar. 31, 2014

Risks And Uncertainties [Abstract]

Major Customers

7. Major Customers

The operating subsidiary of the Company, ABE South Dakota, entered into Ethanol Marketing Agreements (“EMA”) with Gavilon, LLC, a commodity marketing firm, and affiliated companies and successors (collectively “Gavilon”), on May 4, 2012 (amended on July 31, 2012). The EMA required that the subsidiary sell to Gavilon all of the denatured fuel-grade ethanol produced at the South Dakota plants. The terms of the EMA began on August 1, 2012, and expire on December 31, 2015. ABE SD is currently working to obtain bank approval to extend the term of the EMA to June 30, 2016.

ABE South Dakota is party to a co-product marketing agreement with Dakotaland Feeds, LLC (“Dakotaland Feeds”), whereby Dakotaland Feeds markets the local sale of distillers grains produced at the ABE South Dakota Huron plant to third parties for an agreed-upon commission. The Company had an agreement with Hawkeye Gold, LLC to market the distillers grains produced at the ABE South Dakota Aberdeen plants through June 30, 2013. ABE South Dakota is party to an agreement with Gavilon to market the dried distillers grains from the Aberdeen plant, effective July 1, 2013 until July 31, 2016.

Sales and receivables from the ABE South Dakota’s major customers were as follows (in thousands):

	March 31,		March 31,
	2014		2013
Gavilon-Ethanol and Distillers Grains
Six months revenues	$	88,976	$	89,013
Receivable balance at period end		6,814		4,097
Hawkeye Gold - Distillers Grains
Six months revenues	$	—	$	17,337
Receivable balance at period end		—		1,340
Dakotaland - Distillers Grains
Six months revenues	$	6,649	$	10,923
Receivable balance at period end		673		968

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Risk Management

6 Months Ended

Mar. 31, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Risk Management

8. Risk Management

The Company is exposed to a variety of market risks, including the effects of changes in commodity prices and interest rates. These financial exposures are monitored and managed by the Company as an integral part of its overall risk management program. The Company’s risk management program seeks to reduce the potentially adverse effects that the volatility of these markets may have on its current and future operating results. To reduce these effects, the Company generally attempts to fix corn purchase prices and related sale prices of ethanol and distillers grains with forward purchase and sales contracts to reduce volatility in future operating margins. In addition to entering into contracts to purchase 1.5 million bushels of corn in which the futures or basis price was not locked, the Company had entered into the following fixed price forward contracts at March 31, 2014 (in thousands):

	Quantity		Amount		Period Covered Through
Corn (bushels) Purchase Contracts		2,070	$	9,109		June 30, 2014
Ethanol (gallons) Sale Contracts		8,035		20,844		June 30, 2014
Distillers grains (tons) Sale Contracts		27		5,521		June 30, 2014
Corn Oil (pounds) Sale Contracts		96		30		April 30, 2014
Natural Gas (mmbtus) Purchase Contracts		103		520		May 31, 2014

Unrealized gains and losses on forward contracts, in which delivery has not occurred, are deemed “normal purchases and normal sales” and therefore are not marked to market in the financial statements.

When forward contracts are not available at competitive rates, the Company may engage in hedging activities using exchange-traded futures contracts, OTC futures options or OTC swap agreements. Changes in market price of ethanol-related hedging activities are reflected in revenues while changes in market price of corn-related items are reflected in cost of goods sold. There was no futures activity during the quarters presented.

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Members' Equity

6 Months Ended

Mar. 31, 2014

Equity [Abstract]

Members' Equity

10. Members’ Equity

Employment Agreements

In January 2013, the Company awarded its Chief Executive Officer a unit appreciation right for 200,000 units that was approved by the Company’s unit holders on March 22, 2013 at the Company’s Regular Meeting of Members. The UAR vests 1/18 per month over an 18-month period beginning December 7, 2012 so long as Mr. Peterson remains employed by the Company, and will be paid in cash upon such time as ABE sells all or substantially all the assets of the South Dakota plants. The UAR was issued for no consideration and had a grant price of $1.15 per unit at the time of the grant. The grant price for the UAR will be reduced by any distribution received by the Company’s unit holders from (i) the $12.5 million placed in escrow or (ii) the $10 million of cash reserved by the Company in connection with the sale of the Fairmont plant, or (iii) any other cash dividend received by the Company’s unit holders from the cash reserves at Advanced BioEnergy, LLC. The grant price will also be reduced in the event the $12.5 million of escrow proceeds or the $10.0 million of cash retained by the Company are not distributed to the Company’s unit holders. The grant price will be reduced by $0.31 per unit to $0.84 per unit as a result of the cash distribution paid in October 2013. The units are contingently exercisable only under certain limited circumstances, and therefore the Company is not recognizing compensation expense related to the awards until these defined circumstances are probable of occurring.

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Discontinued Operations - Components of Gain on Sale of Discontinued Operations (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Sep. 30, 2013
Proceeds:
Cash proceeds			$ 157,249
Escrow	12,500		12,500
Inventory holdback			1,071
Total Proceeds			170,820
Assets Sold:
Property, plant and equipment, net			83,097
Inventory			10,864
Restricted cash			673
Deferred financing costs			396
Prepaid expenses			140
Deferred income			(3,422)
Total Assets Sold			91,748
Transaction costs			2,384
Gain on Disposal of Discontinued Operations		$ 76,688	$ 76,688

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Parent Financial Statements - Statements of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:
Net income	$ 11,510	$ 70,897
Adjustments to reconcile net income to operating activities cash flows:
Depreciation	5,422	5,428
Gain on disposal of fixed assets		(76,688)
Amortization of deferred revenue and rent	(15)	(126)
Unit compensation expense		276
Loss on warrant derivative liability		1,416
Change in working capital components:
Accounts receivable	608	9,289
Prepaid expenses	(228)	816
Accounts payable and accrued expenses	(200)	(2,137)
Net cash provided by operating activities	14,383	6,401
Cash flows from investing activities:
Purchase of property and equipment	(389)	(771)
Net cash provided by (used in) investing activities	(3,045)	157,461
Cash flows from financing activities:
Exercise of warrant		799
Distribution to members	(7,877)	(104,511)
Net cash (used in) financing activities	(13,759)	(154,018)
Net increase (decrease) in cash and cash equivalents	(2,421)	9,844
Beginning cash and cash equivalents	27,796	11,210
Ending cash and cash equivalents	25,375	21,054
Parent Company [Member]
Cash flows from operating activities:
Net income	11,510	70,897
Adjustments to reconcile net income to operating activities cash flows:
Depreciation	78	82
Equity in earnings of consolidated subsidiaries	(11,997)	(73,501)
Distributions from consolidated subsidiaries	8,000	104,832
Gain on disposal of fixed assets	6
Amortization of deferred revenue and rent	(16)	(14)
Unit compensation expense		276
Loss on warrant derivative liability		1,416
Change in working capital components:
Accounts receivable	(12)	156
Prepaid expenses	(28)	(8)
Accounts payable and accrued expenses	20	638
Net cash provided by operating activities	7,561	104,774
Cash flows from investing activities:
Purchase of property and equipment	(79)
Net cash provided by (used in) investing activities	(79)
Cash flows from financing activities:
Exercise of warrant		799
Distribution to members	(7,877)	(104,511)
Net cash (used in) financing activities	(7,877)	(103,712)
Net increase (decrease) in cash and cash equivalents	(395)	1,062
Beginning cash and cash equivalents	6,558	5,400
Ending cash and cash equivalents	$ 6,163	$ 6,462

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Inventories (Tables)

6 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

Summary of Inventories

A summary of inventories is as follows (in thousands):

	March 31,		September 30,
	2014		2013
Chemicals	$	579	$	792
Work in process		1,180		1,018
Ethanol		1,351		858
Distillers grain		597		311
Supplies and parts		1,547		1,559
Total	$	5,254	$	4,538

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One-time Termination Benefit (Tables)

6 Months Ended

Mar. 31, 2014

Restructuring And Related Activities [Abstract]

Accrued Liability Associated With One-time Termination Benefits

At March 31, the accrued liability associated with the one-time termination benefits consisted of the following (in thousands):

	2014		2013
Beginning balance at October 1, 2013 and October 1, 2012	$	994	$	—
Charges		261		939
Payments		—		(205	)
Ending balance at March 31	$	1,255	$	734

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Parent Financial Statements - Balance Sheets (Parenthetical) (Detail) (USD $)	Mar. 31, 2014	Sep. 30, 2013
Members' capital, par value
Members' capital, units issued	25,410,851	25,410,851
Members' capital, units outstanding	25,410,851	25,410,851
Parent Company [Member]
Members' capital, par value
Members' capital, units issued	25,410,851	25,410,851
Members' capital, units outstanding	25,410,851	25,410,851

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Major Customers - Sales and Receivables (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Gavilon-Ethanol and Distillers Grains [Member]
Revenue, Major Customer [Line Items]
Six months revenues	$ 88,976	$ 89,013
Receivable balance at period end	6,814	4,097
Hawkeye Gold - Distillers Grains [Member]
Revenue, Major Customer [Line Items]
Six months revenues		17,337
Receivable balance at period end		1,340
Dakotaland - Distillers Grains [Member]
Revenue, Major Customer [Line Items]
Six months revenues	6,649	10,923
Receivable balance at period end	$ 673	$ 968

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Consolidated Statements of Changes in Members' Equity (Unaudited) (USD $) In Thousands, except Share data	Total	Member's Capital [Member]	Accumulated Deficit [Member]
Beginning Balance at Sep. 30, 2013	$ 17,223	$ 60,835	$ (43,612)
Beginning Balance, shares at Sep. 30, 2013	25,410,851	25,410,851
Net income	11,510		11,510
Ending Balance at Mar. 31, 2014	$ 28,733	$ 60,835	$ (32,102)
Ending Balance, shares at Mar. 31, 2014	25,410,851	25,410,851

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Inventories

6 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

Inventories

4. Inventories

A summary of inventories is as follows (in thousands):

	March 31,		September 30,
	2014		2013
Chemicals	$	579	$	792
Work in process		1,180		1,018
Ethanol		1,351		858
Distillers grain		597		311
Supplies and parts		1,547		1,559
Total	$	5,254	$	4,538

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Parent Financial Statements (Tables)

6 Months Ended

Mar. 31, 2014

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Balance Sheets

Advanced BioEnergy, LLC (Unconsolidated)

Balance Sheets

(Unaudited)

	March 31,			September 30,
	2014			2013
	(Dollars in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	6,163		$	6,558
Restricted cash		2,500			2,500
Miscellaneous Receivables		12			—
Prepaid expenses		48			20
Total current assets		8,723			9,078
Property and equipment, net		420			425
Other assets:
Investment in ABE Fairmont		14,988			23,138
Investment in ABE South Dakota		6,176			(5,972	)
Other assets		32			32
Total assets	$	30,339		$	26,701
LIABILITIES AND MEMBERS’ EQUITY
Current liabilities:
Accounts payable	$	4		$	10
Accrued expenses		1,538			1,512
Distribution payable		—			7,877
Total current liabilities		1,542			9,399
Other liabilities		64			79
Total liabilities		1,606			9,478
Members’ equity:
Members’ capital, no par value, 25,410,851 units issued and outstanding		60,835			60,835
Accumulated deficit		(32,102	)		(43,612	)
Total members’ equity		28,733			17,223
Total liabilities and members’ equity	$	30,339		$	26,701

Statements of Operations

Advanced BioEnergy, LLC (Unconsolidated)

Statements of Operations

(Unaudited)

	Three Months Ended						Six Months Ended
	March 31,			March 31,			March 31,			March 31,
	2014			2013			2014			2013
	(Dollars in thousands)						(Dollars in thousands)
Equity in earnings (losses) of consolidated subsidiary	$	5,284		$	(857	)	$	11,997		$	(4,369	)
Management fee income from subsidiary		388			401			783			792
Selling, general and administrative expenses		(661	)		(1,297	)		(1,290	)		(3,012	)
Operating income (loss)		5,011			(1,753	)		11,490			(6,589	)
Other income (expense)		—			(2	)		12			(3	)
Interest income (expense)		4			4			8			(1,405	)
Income (loss) from continuing operations		5,015			(1,751	)		11,510			(7,997	)
Income from discontinued operations		—			17			—			78,894
Net income (loss)	$	5,015		$	(1,734	)	$	11,510		$	70,897

Statements of Cash Flows

Advanced BioEnergy, LLC (Unconsolidated)

Statements of Cash Flows

(Unaudited)

	Six Months Ended
	March 31,			March 31,
	2014			2013
	(Dollars in thousands)
Cash flows from operating activities:
Net income	$	11,510		$	70,897
Adjustments to reconcile net income to operating activities cash flows:
Depreciation		78			82
Equity in earnings of consolidated subsidiaries		(11,997	)		(73,501	)
Distributions from consolidated subsidiaries		8,000			104,832
Gain on disposal of fixed assets		6			—
Amortization of deferred revenue and rent		(16	)		(14	)
Unit compensation expense		—			276
Loss on warrant derivative liability		—			1,416
Change in working capital components:
Accounts receivable		(12	)		156
Prepaid expenses		(28	)		(8	)
Accounts payable and accrued expenses		20			638
Net cash provided by operating activities		7,561			104,774
Cash flows from investing activities:
Purchase of property and equipment		(79	)		—
Net cash used in investing activities		(79	)		—
Cash flows from financing activities:
Exercise of warrant		—			799
Distribution to members		(7,877	)		(104,511	)
Net cash used in financing activities		(7,877	)		(103,712	)
Net increase (decrease) in cash and cash equivalents		(395	)		1,062
Beginning cash and cash equivalents		6,558			5,400
Ending cash and cash equivalents	$	6,163		$	6,462

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Debt - Schedule of Maturities of Long Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Sep. 30, 2013
Schedule Of Maturities Of Long Term Debt [Line Items]
Stated principal	$ 65,898	$ 71,735
Restructuring Fee	3,098
Additional carrying value of restructured debt	4,839	6,112
Total debt	70,737
2015 [Member]
Schedule Of Maturities Of Long Term Debt [Line Items]
Stated principal	3,000
Restructuring Fee
Additional carrying value of restructured debt	2,477
Total debt	5,477
2016 [Member]
Schedule Of Maturities Of Long Term Debt [Line Items]
Stated principal	59,800
Restructuring Fee	3,098
Additional carrying value of restructured debt	2,362
Total debt	$ 65,260

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Discontinued Operations (Tables)

6 Months Ended

Mar. 31, 2014

Discontinued Operations And Disposal Groups [Abstract]

Summary of Major Classes of Assets and Liabilities, Revenues and Expense, Components of Gain on Sale Included in Discontinued Operation

The remaining sale-related Fairmont assets included in the consolidated balance sheets as of March 31, 2014 and September 30, 2013 are disclosed below (amounts in thousands):

	As of		As of
	March 31, 2014		September 30, 2013
Current portion of restricted cash/escrow	$	8,000	$	8,000
Current assets of discontinued operations	$	8,000	$	8,000

Summarized preliminary revenues and expenses included in discontinued operations in the Statements of Operations for the three and six months ended March 31, 2014 and 2013 are included in the following table (amounts in thousands):

	Three Months Ended					Six Months Ended
	March 31,		March 31,			March 31,		March 31,
	2014		2013			2014		2013
Net sales
Ethanol and related products	$	—	$	—		$	—	$	74,099
Total net sales		—		—			—		74,099
Cost of goods sold		—		—			—		70,584
Gross profit		—		—			—		3,515
Selling, general and administrative		—		241			—		1,365
Operating income		—		(241	)		—		2,150
Other income		—		249			—		456
Interest income		—		9			—		15
Interest expense		—		—			—		(415	)
Income from operations of discontinued components		—		17			—		2,206
Gain on disposal of discontinued components		—		—			—		76,688
Income from discontinued operations	$	—	$	17		$	—	$	78,894

The gain on disposal of discontinued operations in fiscal 2013 is included in Income from Discontinued Operations on the Statement of Operations. The gain on disposal is composed of the following items (in thousands):

Proceeds:
Cash proceeds	$	157,249
Escrow		12,500
Inventory holdback		1,071
Total Proceeds		170,820
Assets Sold:
Property, plant and equipment, net		83,097
Inventory		10,864
Restricted cash		673
Deferred financing costs		396
Prepaid expenses		140
Deferred income		(3,422	)
Total Assets Sold		91,748
Transaction costs		2,384
Gain on Disposal of Discontinued Operations	$	76,688