EX-99.3 5 dex993.htm UNAUDITED GUARANTOR / NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS UNAUDITED GUARANTOR / NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Exhibit 99.3

VERASUN ENERGY CORPORATION

UNAUDITED GUARANTOR / NON-GUARANTOR

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Under the universal shelf registration statement on Form S-3 (the “Registration Statement”) filed by VeraSun Energy Corporation (“Company” or “VEC”), certain wholly-owned subsidiaries of the Company may fully and unconditionally guarantee, on a joint and several basis, debt securities that may be offered from time to time by the Company under the Registration Statement. The following tables present unaudited condensed consolidating financial information for (i) the Company, (ii) all of the subsidiaries of the Company that may guarantee debt securities offered under the Registration Statement and (iii) subsidiaries of the Company that would not guarantee such debt securities, as of June 30, 2008, and for the three and/or six months then ended. VeraSun Aurora Corporation, VeraSun Fort Dodge, LLC, VeraSun Charles City, LLC, VeraSun Marketing, LLC, VeraSun Hartley, LLC, VeraSun Welcome, LLC, VeraSun Biodiesel, LLC, VeraSun Granite City, LLC, VeraSun Reynolds, LLC, VeraSun Litchfield, LLC, VeraSun Tilton, LLC, and US BioEnergy Corporation, each a wholly-owned subsidiary of VEC, are combined as guarantors. This report does not constitute an offer of any securities for sale.

Certain debt financing arrangements of the Company’s non-guarantor subsidiaries limit the non-guarantor subsidiaries’ ability to pay dividends or make distributions to the guarantor companies. The Company’s unaudited condensed consolidated balance sheet includes approximately $604 million of net assets of the non-guarantor subsidiaries at June 30, 2008, which, subject to limitations under the applicable financing arrangements, would generally be available to fund operations and investments at a particular non-guarantor subsidiary, but would not be available to the guarantor subsidiaries for general corporate purposes.

CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2008

ASSETS

(in thousands)

 

     Issuer    Guarantors    Non-Guarantors    Eliminations
and
Consolidations
    Consolidated

Current Assets

             

Cash and cash equivalents

   $ 2,034    $ —      $ 31,930    $ (5,523 )   $ 28,441

Restricted cash

     1,525      —        13,252      —         14,777

Trade receivables

     —        66,261      103,634      (2,897 )     166,998

Inventories

     —        109,799      93,121      7,737       210,657

Prepaid expenses and other assets

     —        128,216      22,366      (42,806 )     107,776

Derivative financial instruments

     —        39,850      24,383      —         64,233

Deferred income taxes

     —        1,765      —        (917 )     848
                                   

Total current assets

     3,559      345,891      288,686      (44,406 )     593,730
                                   

Other Assets

             

Goodwill

     6,106      18,180      242,493      —         266,779

Other intangible assets

     —        —        66,344      —         66,344

Other long-term assets

     2,610      19,363      5,260      —         27,233

Debt issuance costs, net

     18,077      —        —        —         18,077

Deferred income taxes

     22,813      —        —        (22,813 )     —  

Investment in subsidiaries

     1,450,392      738,462      1,837      (2,190,691 )     —  
                                   
     1,499,998      776,005      315,934      (2,213,504 )     378,433
                                   

Property and equipment, net

     13,928      829,795      1,631,196      5,903       2,480,822
                                   
   $ 1,517,485    $ 1,951,691    $ 2,235,816    $ (2,252,007 )   $ 3,452,985
                                   


VERASUN ENERGY CORPORATION

UNAUDITED GUARANTOR / NON-GUARANTOR

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (continued)

 

Condensed Consolidating Balance Sheet (continued)

JUNE 30, 2008

LIABILITIES AND SHAREHOLDERS’ AND MEMBERS’ EQUITY

(in thousands)

 

     Issuer     Guarantors    Non-Guarantors    Eliminations
and
Consolidations
    Consolidated

Current Liabilities

            

Outstanding checks in excess of bank balance

   $ —       $ 14,319    $ —      $ (14,319 )   $ —  

Current maturities of long-term debt

     —         —        51,124      —         51,124

Accounts payable

     18,707       134,311      60,065      (36,252 )     176,831

Accrued expenses and other liabilities

     5,379       12,274      24,538      —         42,191

Derivative financial instruments

     —         38,964      2,743      —         41,707

Deferred income taxes

     538       —        379      (917 )     —  
                                    

Total current liabilities

     24,624       199,868      138,849      (51,488 )     311,853
                                    

Long-Term Liabilities

            

Long-term debt, less current maturities

     697,682       —        699,036      —         1,396,718

Deferred income taxes

     —         126,446      53,961      (22,813 )     157,594

Other long-term liabilities

     1,444       10,652      34,953      —         47,049
                                    
     699,126       137,098      787,950      (22,813 )     1,601,361
                                    

Minority interest in consolidated subsidiary

     —         —        3,908      —         3,908

Intercompany (receivable) payable

     (737,328 )     605,532      131,796      —         —  

Shareholders’ and Members’ Equity

     1,531,063       1,009,193      1,173,313      (2,177,706 )     1,535,863
                                    
   $ 1,517,485     $ 1,951,691    $ 2,235,816    $ (2,252,007 )   $ 3,452,985
                                    


VERASUN ENERGY CORPORATION

UNAUDITED GUARANTOR / NON-GUARANTOR

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (continued)

 

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended June 30, 2008

(in thousands)

 

     Issuer     Guarantors     Non-Guarantors     Eliminations
and
Consolidations
    Consolidated  

Net sales

   $ 3,930     $ 495,336     $ 522,272     $ (6,370 )   $ 1,015,168  

Cost of goods sold

     81       466,458       483,045       (6,370 )     943,214  
                                        

Gross profit

     3,849       28,878       39,227       —         71,954  

Startup expenses

     —         2,651       1,940       —         4,591  

Restructuring charge

     2,004       —         —         —         2,004  

Selling, general and administrative expenses

     11,662       948       3,707       —         16,317  
                                        

Operating income (loss)

     (9,817 )     25,279       33,580       —         49,042  
                                        

Other income (expense):

          

Interest expense

     (17,391 )     (7,143 )     (10,782 )     19,815       (15,501 )

Interest income

     16,215       844       206       (16,658 )     607  

Equity in earnings of subsidiaries

     28,928       12,104       —         (41,032 )     —    

Other income

     2,485       50       (2,295 )     —         240  
                                        
     30,237       5,855       (12,871 )     (37,875 )     (14,654 )
                                        

Income before income taxes and minority interest

     20,420       31,134       20,709       (37,875 )     34,388  

Income tax provision (benefit)

     (3,470 )     7,111       6,863       —         10,504  
                                        

Income before minority interest

     23,890       24,023       13,846       (37,875 )     23,884  

Minority interest in net loss of subsidiary, net of income taxes

     —         —         6       —         6  
                                        

Net income

   $ 23,890     $ 24,023     $ 13,852     $ (37,875 )   $ 23,890  
                                        


VERASUN ENERGY CORPORATION

UNAUDITED GUARANTOR / NON-GUARANTOR

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (continued)

 

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended June 30, 2008

(in thousands)

 

     Issuer     Guarantors     Non-Guarantors     Eliminations
and
Consolidations
    Consolidated  

Net sales

   $ 7,757     $ 875,619     $ 654,636     $ (6,370 )   $ 1,531,642  

Cost of goods sold

     120       816,406       614,414       (6,370 )     1,424,570  
                                        

Gross profit

     7,637       59,213       40,222       —         107,072  

Startup expenses

     —         3,777       2,925       —         6,702  

Restructuring charge

     2,004       —         —         —         2,004  

Selling, general and administrative expenses

     21,010       2,293       4,379       —         27,682  
                                        

Operating income (loss)

     (15,377 )     53,143       32,918       —         70,684  
                                        

Other income (expense):

          

Interest expense

     (34,578 )     (14,140 )     (14,172 )     36,576       (26,314 )

Interest income

     31,956       1,694       217       (32,319 )     1,548  

Equity in earnings of subsidiaries

     40,731       12,104       —         (52,835 )     —    

Other income

     2,674       335       (2,295 )     —         714  
                                        
     40,783       (7 )     (16,250 )     (48,578 )     (24,052 )
                                        

Income before income taxes and minority interest

     25,406       53,136       16,668       (48,578 )     46,632  

Income tax provision (benefit)

     (6,057 )     15,874       5,358    

 

—  

 

    15,175  
                                        

Income before minority interest

     31,463       37,262       11,310       (48,578 )     31,457  

Minority interest in net loss of subsidiary, net of income taxes

     —         —         6       —         6  
                                        

Net income

   $ 31,463     $ 37,262     $ 11,316     $ (48,578 )   $ 31,463  
                                        


VERASUN ENERGY CORPORATION

UNAUDITED GUARANTOR / NON-GUARANTOR

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (continued)

 

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended June 30, 2008

(in thousands)

 

     Issuer     Guarantors     Non-Guarantors     Eliminations
and
Consolidations
    Consolidated  

Net cash provided by (used in) operating activities

   $ (171,748 )   $ 97,334     $ 31,453     $ 4,249     $ (38,712 )
                                        

Cash Flows from Investing Activities

          

Purchases of property and equipment

     3,512       (129,474 )     (58,646 )     (4,249 )     (188,857 )

US BioEnergy acquisition, net of transaction costs

     (6,233 )     16,292       35,047       —         45,106  

Proceeds from the sale of short-term investments

     43,175       —         —         —         43,175  

Change in restricted cash

     (1,525 )     —         (13,252 )     —         (14,777 )

Payments for other long-term assets and liabilities

     1,232       (872 )     (2,400 )     —         (2,040 )

Proceeds from sales of equipment

     —         1,300       —         —         1,300  
                                        

Net cash (used in) provided by investing activities

     40,161       (112,754 )     (39,251 )     (4,249 )     (116,093 )
                                        

Cash Flows from Financing Activities

          

Proceeds from long-term debt

     40,500       —         56,592       —         97,092  

Principal payments on long-term debt

     —         —         (19,696 )     —         (19,696 )

Debt issuance cost paid

     (3,655 )     —         —         —         (3,655 )

Cost of registering equity securities

     (1,063 )     —         —         —         (1,063 )

Net effect of the exercise of stock options

     (374 )     —         —         —         (374 )

Outstanding checks in excess of bank balance

     —         5,523       —         (5,523 )     —    
                                        

Net cash provided by (used in ) financing activities

     35,408       5,523       36,896       (5,523 )     72,304  
                                        

Net (decrease) increase in cash and cash equivalents

     (96,179 )     (9,897 )     29,098       (5,523 )     (82,501 )

Cash and cash equivalents, beginning of period

     98,213       9,897       2,832       —         110,942  
                                        

Cash and cash equivalents, end of period

   $ 2,034     $ —       $ 31,930     $ (5,523 )   $ 28,441