10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2015

Commission file number:  000-53957

Golden Growers Cooperative

(Exact name of registrant as specified in its charter)

Minnesota	27-1312571
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1002 Main Avenue West, Suite 5

West Fargo, ND 58078

(Address of principal executive offices)

Telephone Number 701-281-0468

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

YES x NO   o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES   x NO   o

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

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

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Act).

YES   o NO   x

As of November 16, 2015 the Cooperative had 15,490,480 Units issued and outstanding.

GOLDEN GROWERS COOPERATIVE

FORM 10-Q

INDEX

PART I. FINANCIAL INFORMATION	1
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3. Quantitative and Qualitative Disclosures about Market Risk	10
Item 4. Controls and Procedures	11
PART II. OTHER INFORMATION	11
Item 1. Legal Proceedings	11
Item 1A. Risk Factors	11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3. Defaults Upon Senior Securities	11
Item 4. Mine Safety Disclosures	11
Item 5. Other Information	11
Item 6. Exhibits	12
SIGNATURES	14

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

GOLDEN GROWERS COOPERATIVE

CONDENSED BALANCE SHEETS

(In Thousands)

	September 30, 2015 (Unaudited)		December 31, 2014 (Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	3,371	$	2,483
Short-Term Investments	220		218
Prepaids and Other Current Assets	4		220
Total Current Assets	3,595		2,921
Property and Equipment, Net	3		4
Investment in ProGold Limited Liability Company	27,032		31,344
Total Assets	$	30,630	$	34,269
LIABILITIES AND MEMBERS’ EQUITY
Current Liabilities:
Accrued Liabilities	3,566		216
Total Current Liabilities	3,566		216
Members’ Equity
Members’ Equity	27,064		34,053
Membership Units, Authorized 60,000,000 Units, Issued and Outstanding 15,490,480 as of September 30, 2015 and December 31, 2014
Total Members’ Equity	27,064		34,053
Total Liabilities and Members’ Equity	$	30,630	$	34,269

See Notes to Financial Statements

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GOLDEN GROWERS COOPERATIVE

CONDENSED STATEMENTS OF OPERATIONS

(In Thousands)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
OPERATIONS
Corn Revenue	$	11,554		$	12,956		$	46,469		$	49,071
Corn Expense	(11,587		)	(12,980		)	(46,546		)	(49,137		)
Net Income from ProGold Limited Liability Company	1,407			1,370			3,797			4,557
General & Administrative Expenses	(138		)	(121		)	(490		)	(530		)
Net Income from Operations	1,236			1,225			3,230			3,961
Interest Income	2			2			6			8
Net Income Before Income Tax	1,238			1,227			3,236			3,969
Income Tax Provision	—			—			—			—
Net Income	$	1,238		$	1,227		$	3,236		$	3,969
Weighted Average Units Outstanding	15,490,480			15,490,480			15,490,480			15,490,480
Earnings per Membership Unit
Primary and Fully Diluted	$	0.08		$	0.08		$	0.21		$	0.26

See Notes to Financial Statements

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GOLDEN GROWERS COOPERATIVE

CONDENSED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

	Nine Months Ended
	September 30, 2015			September 30, 2014
Cash Flows from Operating Activities
Net Income	$	3,236		$	3,969
Net (Income) from ProGold Limited Liability Company	(3,797		)	(4,557		)
Depreciation	1			1
Changes in Assets and Liabilities
Short-Term Investments	(2		)	—
Prepaids and Other Current Assets	216			9
Accrued Liabilities	(213		)	3
Net Cash Used in Operating Activities	(559		)	(575		)
Cash Flows from Investing Activities
Distribution received from ProGold LLC	8,109			7,257
Net Cash Provided by Investing Activities	8,109			7,257
Cash Flows from Financing Activities
Member distributions paid	(6,662		)	(6,507		)
Net Cash Used by Financing Activities	(6,662		)	(6,507		)
Increase (Decrease) in Cash and Cash Equivalents	888			175
Cash and Cash Equivalents, Beginning of Period	2,483			3,154
Cash and Cash Equivalents, End of Period	$	3,371		$	3,329
Non-Cash Financing Activity
Accrued Dividend Payable to Members	$	3,563		$	3,098

See Notes to Financial Statements

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GOLDEN GROWERS COOPERATIVE

NOTES TO FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

NOTE 1 — BASIS OF PRESENTATION

The financial statements of the Golden Growers Cooperative (the “Cooperative”) for the nine-month periods ended September 30, 2015 and 2014 are unaudited and reflect all adjustments consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. The condensed financial statements should be read in conjunction with the financial statements and notes thereto, contained in the Cooperative’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. The results of operations for the nine-month period ended September 30, 2015, are not necessarily indicative of the results for the entire fiscal year ending December 31, 2015.

NOTE 2 — EXPENSES

The Cooperative contracts with Cargill, Incorporated in connection with the procurement of corn and other agency services which include payments of $92,000 annually and terminates on December 31, 2017.

NOTE 3 — PROGOLD LIMITED LIABILITY COMPANY

The Cooperative has a 49% ownership interest in ProGold Limited Liability Company (“ProGold LLC”).  Following is summary financial information for ProGold LLC, which were derived from the monthly unaudited financial statements of ProGold LLC:

	September 30,				December 31,
(In Thousands)	2015		2014		2014
Current Assets	$	151	$	1,950	$	2,375
Long-Term Assets	55,928		66,898		65,019
Total Assets	$	56,079	$	68,848	$	67,394
Current Liabilities	$	411	$	1,965	$	2,627
Long-Term Liabilities	500		900		800
Total Liabilities	911		2,865		3,427
Members’ Equity	55,168		65,983		63,967
Total Liabilities and Members’ Equity	$	56,079	$	68,848	$	67,394
Rent Revenue on Operating Lease	$	17,222	$	18,275	$	24,125
Expenses	9,472		8,974		11,919
Net Income	$	7,750	$	9,301	$	12,206

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NOTE 4 — INVESTMENTS

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  Quoted market prices are generally not available for the Cooperative’s financial instruments.  Fair values are based on judgments regarding anticipated cash flows, future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors.  These estimates involve uncertainties and matters of judgment, and therefore, cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.

The Cooperative has determined fair value of its investments held to maturity based on Level 1 inputs.  The Cooperative’s investments held to maturity are as follows as of September 30, 2015 and December 31, 2014 (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2015:
Money Market & CD’s	$	220	$	—	$	—	$	220
December 31, 2014:
Money Market & CD’s	$	218	$	—	$	—	$	218

NOTE 5 — EMPLOYEE BENEFIT PLANS

Pension Plan — In December 2012, the Cooperative approved a change to freeze the Cooperative’s defined benefit plan. As a result, no additional benefits will accrue to participants in the plan and no new employees are eligible for the plan.

The following schedules provide the components of Net Periodic Benefit Cost for the nine-months ended September 30, 2015 and September 30, 2014 (in thousands):

	September 30,			September 30,
	2015			2014
Service Cost	$	—		$	—
Interest Cost	39			40
Expected return on plan assets	(44		)	(45		)
Amortization of net (gain) loss	2			—
Net periodic pension cost	$	(3	)	$	(5	)

Through the nine-months ended September 30, 2015, the Cooperative has made $19,500 in contributions as compared to $48,000 through the nine-months ended September 30, 2014.  The Cooperative anticipates making $25,000 in contributions in 2015.  Contributions in 2014 totaled $74,000.

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NOTE 6 — RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” which supersedes the guidance in “Revenue Recognition (Topic 605)” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. We are evaluating the new standard, but do not at this time expect this standard to have a material impact on our financial statements.

NOTE 7 — DISTRIBUTIONS TO MEMBERS

On February 23, 2015, the Cooperative made distributions to its members totaling $3,253,001 or $0.21 per outstanding membership unit. On June 29, 2015, the Cooperative made distributions to its members totaling $3,407,906 or $0.22 per outstanding unit. At its September meeting, the Cooperative’s board authorized a distribution to its members totaling $3,562,810, or $0.23 per outstanding membership unit to be paid in October 2015.  On October 6, the Cooperative made the distribution to its members.

NOTE 8 — COMMITMENTS AND CONTINGENCIES

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

NOTE 9 — SUBSEQUENT EVENTS

The Cooperative has evaluated events through the date the financial statements were issued for potential recognition or disclosure in the September 30, 2015 financial statements.

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

This report contains forward-looking statements that involve risks and uncertainties.  Such forward-looking statements include, among others, those statements including the words “expect”, “anticipate”, “believe”, “may” and similar expressions.  The Cooperative’s actual results could differ materially from those indicated.  See the discussion of “Risk Factors” in the Cooperative’s Annual Report for the 2014 fiscal year on Form 10-K.

Overview

Golden Growers Cooperative is a value added agricultural cooperative association governed under Minnesota Statutes Chapter 308B owned by 1,562 members in the business of providing value to our members by facilitating their delivery of corn to the corn wet-milling facility owned by ProGold Limited Liability Company (“ProGold”), a Minnesota limited liability company in which the Cooperative owns a 49% membership interest.  ProGold leases its corn wet milling facility to Cargill Incorporated who uses the facility to process corn into high fructose corn syrup.  We accomplish our business on behalf of our members through our contract relationships with all of the parties involved in the ownership and operation of the facility.  From an income production perspective our membership interest in ProGold is our primary asset that, in addition to giving us the right to receive distributions from ProGold, also provides our members with additional value for the delivery of their corn for processing.  Annually we are required to deliver approximately 15,490,480 bushels of corn to Cargill for processing at the ProGold facility.

Any person residing in the United States can own our units as long as that person delivers or provides for the delivery of corn for processing at the ProGold facility. Ownership of our membership units requires our members to deliver corn to the Cooperative for processing in proportion to the number of units each member holds. Currently 15,490,480 of our units are issued and outstanding.  The Cooperative’s income and losses are allocated to our members based on the volume of corn they deliver.  Subject to certain limitations, as long as a member patronizes the Cooperative by delivering corn equal to the number of units held by the member, the member will be allocated a corresponding portion of our income (or loss).  In this way, we operate on a cooperative basis.

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

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members for corn, Cargill, serving as the Cooperative’s administrative agent, issues payments to members for corn on the Cooperative’s behalf.

Annually, the Cooperative notifies Cargill of the volume of Method A corn to be delivered by each Method A member.  Once we provide notification to Cargill of the volume of corn, Cargill then confirms the amount of corn with each member and notifies that member with respect to quality specifications, allowances, deductions and premiums to be applicable to that corn.  That Method A member then directly contracts with Cargill for the contract price agreed upon for the corn or, in the absence of an agreed upon price, the market price per bushel for corn delivered on the day on which the corn is delivered and accepted at the facility.  With respect to all Method A corn that is delivered, Cargill pays to the Cooperative the aggregate purchase price for corn purchased from our members, and then, on our behalf, makes individual payments for corn directly to our members.  In the event a Method A member delivers to Cargill more than its delivery commitment, any corn delivered in excess of that commitment is handled as a direct sale of corn to Cargill and is priced at the current closing delivery corn price established by Cargill at the facility on the day it is unloaded.  In the event a Method A member delivers to Cargill less than its committed amount of corn, the quantity of the shortfall is then purchased and delivered by Cargill on our behalf, but this purchased corn is not credited to the Method A member’s account.  If a Method A member fails to fully satisfy the corn delivery requirement, Cargill purchases replacement corn for which we reimburse Cargill the amount by which the underlying contracted corn price is less than the price of buying the replacement corn that was due on the delivery date.  In addition, if a Method A member fails to deliver all of the corn it was obligated to deliver, that member’s allocation of our profit or losses and any cash distributions is proportionately reduced and we may terminate the member’s membership.

Our Bylaws establish a Method A delivery pool and a Method B delivery pool.  Generally, our income and/or losses are allocated annually based on the percentage of bushels of corn our members elect to deliver using either Method A or Method B.  Regardless of the actual percentage allocation between our members who deliver bushels of corn using Method A or Method B, our Bylaws require us to annually allocate at least 25% of our income and/or losses to the Method A pool.  The amount of our income and/or losses actually allocated to the Method A pool is a percentage equal to the greater of 25% or the actual percentage of bushels of corn delivered by our members using Method A.

For the 2015 fiscal year, 29% of members elected to deliver corn by Method A and 71% elected to deliver corn by Method B.  This election will result in 29% of the Cooperative’s income and/or losses and 29% of any cash distributions being allocated to the Method A pool in fiscal year 2015, which reflects the actual percentage of members who elected to deliver corn using Method A and does not result in reallocation to meet the 25% requirement set forth in our governing documents.

Results of Operations

Comparison of the Nine Months Ended September 30, 2015 and 2014

Revenues. The Cooperative derives revenue from two sources: operations related to the marketing of members’ corn and income derived from the Cooperative’s membership interest in ProGold.  The corn marketing operations generate revenue for the Cooperative equal to the value of the corn that is delivered to Cargill. The Cooperative recognizes expense equal to this same amount which results in the corn marketing operations being revenue neutral to the Cooperative, except for revenue from the Method B agency fee and expenses related to the Method A incentive payments, required licensing and bonding expenses, and the service fee paid to Cargill.

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For the nine-months ended September 30 2015, the Cooperative sold approximately 11.7 million bushels of corn compared to 11.6 million bushels of corn sold during the nine-months ended September 30, 2014.  For the nine-months ended September 30, 2015 and 2014, the Cooperative recognized corn revenue of $46,469,000 and $49,071,000, respectively, a decrease of 5%, due primarily to a decrease in the selling price per bushel of corn sold in 2015 compared to 2014.  The Cooperative recognized corn expense of $46,546,000 and $49,137,000 in 2015 and 2014 respectively, a decrease of 5% due primarily to a decrease in the cost per bushel of corn purchased in 2015 compared to 2014.  For the nine-months ended September 30, 2015 and 2014, its members, on the Cooperative’s behalf, delivered to Cargill for processing at the facility 3,396,746 and 3,078,238 bushels of corn respectively using Method A, and 8,352,763 and 8,533,888 bushels of corn respectively, using Method B. For the nine-months ended September 30, 2015 and 2014, the Cooperative recognized expense of $69,000, in connection with costs incurred to Cargill in connection with the Cooperative’s corn marketing operation.

The Cooperative derived income from ProGold for the nine-months ended September 30, 2015, of $3,797,000 compared to $4,557,000 for the nine-months ended September 30, 2014. A decrease of 17% due primarily to a reduction in rent revenue recognized by ProGold.

General and Administrative Expenses. The Cooperative’s general and administrative expenses include salaries and benefits, professional fees and fees paid to our board of directors. The general and administrative expenses for the nine-months ended September 30, 2015, was $490,000 compared to $530,000 for the nine-months ended September 30, 2014.

Interest Income. Interest income for the nine-months ended September 30, 2015, was $6,000 compared to $8,000 for the nine-months ended September 30, 2014.

Comparison of the Three Months Ended September 30, 2015 and 2014

Revenues.  For the three-months ended September 30, 2015 and 2014, the Cooperative sold approximately 3.6 million and 3.6 million bushels of corn, respectively.  For the three-months ended September 30, 2015 and 2014, the Cooperative recognized corn revenue of $11,554,000 and $12,956,000, respectively, a decrease of 11%, due primarily to a decrease in the selling price per bushel of corn sold in 2015 compared to 2014.  The Cooperative recognized corn expense of $11,587,000 and $12,980,000 in 2015 and 2014 respectively, a decrease of 11% due primarily to a decrease in the cost per bushel of corn purchased in 2015 compared to 2014.  For the three-months ended September 30, 2015 and 2014, its members, on the Cooperative’s behalf, delivered to Cargill for processing at the facility 880,144 and 749,550 bushels of corn respectively using Method A, and 2,765,546 and 2,815,796 bushels of corn respectively, using Method B. For the three-months ended September 30, 2015 and 2014, the Cooperative recognized expense of $23,000, in connection with costs incurred to Cargill in connection with the Cooperative’s corn marketing operation.

The Cooperative derived income from ProGold for the three-months ended September 30, 2015, of $1,407,000 compared to $1,370,000 for the three-months ended September 30, 2014.

General and Administrative Expenses. The Cooperative’s general and administrative expenses include salaries and benefits, professional fees and fees paid to our board of directors. The general and administrative expenses for the three-months ended September 30, 2015, was $138,000 compared to $121,000 for the three-months ended September 30, 2014.

Interest Income. Interest income for the three-months ended September 30, 2015, was $2,000 compared to $2,000 for the three-months ended September 30, 2014.

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Liquidity and Capital Resources

The Cooperative’s working capital at September 30, 2015 was $29,000 compared to $443,000 at September 30, 2014.

The Cooperative’s board has determined that the Cooperative does not require high levels of working capital to operate the Cooperative successfully.

The Cooperative had no long-term debt as of September 30, 2015 or September 30, 2014.

The Cooperative used operating cash flows of $559,000 for the nine-month period ended September 30, 2015 compared to $575,000 for the nine-month period ended September 30, 2014.

The Cooperative received cash distributions from ProGold totaling $8,109,000 for the nine-month period ended September 30, 2015 compared to $7,257,000 for the nine-month period ended September 30, 2014.

The Cooperative paid cash distributions to its members totaling $6,662,000 for the nine-month period ended September 30, 2015 compared to $6,507,000 for the nine-month period ended September 30, 2014.

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

Significant Accounting Estimates and Policies

The Cooperative generally does not pay out Method A incentive payments or collect Method B agency fees until the end of its fiscal year.  These amounts are accrued quarterly and then confirmed at the end of the fiscal year.  The total annual Method B agency fee was determinable once the members completed their delivery method determination prior to January 1, 2015.  The quarterly Method B bushel delivery and agency fee revenue is calculated by allocating the portion of the total annual agency fee for that particular quarter or cumulating it for the particular period.  The Cooperative tracks Method A corn deliveries throughout the year so it can report the bushels of corn delivered by its members as well as the corresponding Method A incentive fees earned.  The final amounts owed by or due to Cargill and/or the Cooperative’s members who elect to deliver using Method A is not calculated until after December 31 in order to account for any failures to deliver or over-deliveries of corn.

The remainder of the Cooperative’s significant accounting policies are described in Note 2, Summary of Significant Accounting Polices, of the Notes to the Financial Statements included in the Cooperative’s Annual Report on Form 10-K for the fiscal year ending December 31, 2014.  The Cooperative’s critical accounting estimates are discussed in Item 7, Management’s Discussion and Analysis of Financial Conditions and Results of Operations, included in the Cooperative’s Annual Report Form 10-K for the fiscal year ended December 31, 2014.  There has been no significant change in the Cooperative’s significant accounting policies or critical accounting estimates since the end of fiscal 2014.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss to future earnings, to fair values or to future cash flows that may result from changes in the price of a financial instrument.  The value of a financial instrument may change as a result of changes in the interest rates, exchange rates, commodity prices, equity prices and other market changes.  Market risk is attributed to all market-risk sensitive financial instruments, including long term debt.

10

Due to the pass through nature of the Cooperative’s marketing of its members’ corn, the Cooperative does not believe that it is subject to any material market risk exposure with respect to interest rates, exchange rates, commodity prices, equity prices and other market changes that would require disclosure under this item.

Item 4.  Controls and Procedures

The Cooperative’s Chief Executive Officer and Chief Financial Officer has reviewed and evaluated the effectiveness of the Cooperative’s disclosure controls and procedures (as defined in Rules 240.13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934) as of September 30, 2015.  Based on that review and evaluation, the chief executive officer and chief financial officer has concluded that the Cooperative’s current disclosure controls and procedures, as designed and implemented, are effective in ensuring that information relating to the Cooperative required to be disclosed in the reports the Cooperative files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such information is accumulated and communicated to the Cooperative’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.  There were no changes in the Cooperative’s internal controls over financial reporting that occurred during the Cooperative’s most recent fiscal quarter that may have materially affected, or are reasonably likely to materially affect, the Cooperative’s internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

None

Item 1A.  Risk Factors

For a detailed discussion of certain risk factors that could affect the Cooperative’s operations, financial condition or results for future periods, see Item 1A, Risk Factors, in the Cooperative’s Annual Report for the fiscal year ended December 31, 2014 on Form 10-K.

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

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

None.

Item 5.  Other Information.

None.

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Item 6.  Exhibits

Exhibit No.	Exhibit Description
2.1	Articles of Merger of Golden Growers Cooperative and Golden Growers Cooperative is incorporated by reference to Exhibit 2.1 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.
2.2	Certificate of Conversion of Golden Growers Cooperative is incorporated by reference to Exhibit 2.2 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.
3.1	Amended and Restated Articles of Organization of Golden Growers Cooperative is incorporated by reference to Exhibit 3.1 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.
3.2	Amended and Restated Bylaws of Golden Growers Cooperative dated September 1, 2009 is incorporated by reference to Exhibit 3.2 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.
10.1	Form of Uniform Member Agreement is incorporated by reference to Exhibit 10.2 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.
10.2	Form of Annual Delivery Agreement is incorporated by reference to Exhibit 10.3 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.
10.3	Amended and Restated Member Control Agreement between Golden Growers Cooperative, Golden Growers Cooperative and ProGold Limited Liability Company dated September 1, 2009 is incorporated by reference to Exhibit 10.4 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.
10.4	Operating Agreement between Golden Growers Cooperative, Golden Growers Cooperative and ProGold Limited Liability Company is incorporated by reference to Exhibit 10.5 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.
10.5	Amended and Restated Grain Services Agreement between Golden Growers Cooperative and Cargill, Incorporated is incorporated by reference to Exhibit 10.6 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.
10.6	Amended and Restated Corn Supply Agreement between Golden Growers Cooperative and Cargill, Incorporated is incorporated by reference to Exhibit 10.7 from the Cooperative’s Registration Statement on Form 10 (File No. 10783579) filed April 30, 2010.

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Exhibit No.	Exhibit Description
	Filed herewith electronically
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-15(e)/15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1	Audited Financial Statements of ProGold Limited Liability Company for the years ended August 31, 2014 and August 31, 2015.
101	The following materials from Golden Growers Cooperative’s Quarterly Report on Form 10-Q for the period ended September 30, 2015, filed with the SEC on November 16, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) Balance Sheet for at September 30, 2015 and December 31, 2014, (ii) Statements of Operations for the nine-month periods ended September 30, 2015 and 2014, (iii) Statement of Cash Flows for the nine-month periods ended September 30, 2015 and 2014, and (iv) Notes to Financial Statements.**

* A management contract or compensatory plan required to be filed with this report.

**Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed part of a registration statement, prospectus or other document filed under the Securities Act of the Exchange Act, except as shall be expressly set forth by specific reference to such filings.

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SIGNATURES

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

	GOLDEN GROWERS COOPERATIVE
	(Registrant)
Date: November 16, 2015	/s/ Scott Stofferahn
	Scott Stofferahn
	Executive Vice President,
	Chief Financial Officer
	Duly Authorized Officer

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Scott Stofferahn, certify that:

1.I have reviewed this report on Form 10-Q of Golden Growers Cooperative (the registrant);

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 changes 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 my 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 person’s 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.

November 16, 2015	/s/ Scott Stofferahn
	Scott Stofferahn
	Executive Vice President, Chief Executive Officer and Chief Financial Officer

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EX-32.1

Exhibit 32.1

CERTIFICATE PURSUANT TO SECTION 906

OF SARBANES — OXLEY ACT OF 2002

The undersigned, Scott Stofferahn, Executive Vice President, serving as Chief Executive Officer and Chief Financial Officer of Golden Growers Cooperative, (the “Company”), does hereby certify that to his knowledge:

1.The Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2015 (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document.

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed this 16th day of September, 2015.

By:	/s/ Scott Stofferahn
	Name:	Scott Stofferahn
	Title:	Executive Vice President, Chief Executive Officer and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.1

Exhibit 99.1

PROGOLD LIMITED LIABILITY COMPANY

FINANCIAL STATEMENTS

FOR THE YEARS ENDED AUGUST 31, 2015 AND 2014

CliftonLarsonAllen LLP

INDEPENDENT AUDITORS’ REPORT

Board of Governors

ProGold Limited Liability Company

Moorhead, Minnesota

We have audited the accompanying financial statements of ProGold Limited Liability Company, which comprise the balance sheets as of August 31, 2015 and 2014, and the related statements of operations, cash flows, and changes in members’ equity for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ProGold Limited Liability Company as of August 31, 2015 and 2014, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Stevens Point, Wisconsin
October 1, 2015

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ProGold Limited Liability Company

Balance Sheets

August 31

(In Thousands)

	2015			2014
Assets
Current Assets:
Cash and Cash Equivalents	$	100		$	100
Prepaid Expenses	57			65
Total Current Assets	157			165
Property and Equipment Held for Lease:
Land and Land Improvements	8,790			8,492
Building and Equipment	251,363			252,706
Construction in Progress	778			1,885
Less Accumulated Depreciation	(204,818		)	(197,108		)
Net Property and Equipment Held for Lease	56,113			65,975
Investments in CoBank, ACB	712			1,171
Total Assets	$	56,982		$	67,311
Liabilities and Members’ Equity
Liabilities:
Current Liabilities:
Other Accrued Liabilities	$	12		$	1,001
Deferred Revenues	400			400
Total Current Liabilities	412			1,401
Deferred Revenues	533			933
Total Liabilities	945			2,334
Members’ Equity:
Investments	56,037			64,977
Retained Earnings	—			—
Total Members’ Equity	56,037			64,977
Total Liabilities and Members’ Equity	$	56,982		$	67,311

The Accompanying Notes are an Integral Part of These Financial Statements.

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ProGold Limited Liability Company

Statements of Operations

For the Years Ended August 31

(In Thousands)

	2015		2014
Rental Revenue on Operating Lease	$	23,167	$	24,183
Expenses:
Depreciation	11,556		11,588
General and Administrative	94		97
Loss on Disposition of Property and Equipment Held for Lease	796		216
Total Expenses	12,446		11,901
Net Income	$	10,721	$	12,282

The Accompanying Notes are an Integral Part of These Financial Statements.

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ProGold Limited Liability Company

Statements of Cash Flows

For the Years Ended August 31

(In Thousands)

	2015			2014
Cash Provided By (Used In) Operating Activities:
Net Income	$	10,721		$	12,282
Add (Deduct) Non-Cash Items:
Depreciation	11,556			11,588
Loss on Disposition of Property and Equipment Held for Lease	796			216
Changes in Assets and Liabilities:
Prepaid Expenses	8			8
Other Accrued Liabilities	1			(4		)
Deferred Revenues	(400		)	(400		)
Net Cash Provided by Operating Activities	22,682			23,690
Cash Provided By (Used In) Investing Activities:
Equity Refund from CoBank, ACB	459			551
Expenditures for Property and Equipment Held for Lease	(3,480		)	(2,281		)
Net Cash (Used In) Investing Activities	(3,021		)	(1,730		)
Cash Provided By (Used In) Financing Activities:
Distributions to Members	(19,661		)	(21,960		)
Net Cash (Used In) Financing Activities	(19,661		)	(21,960		)
Increase (Decrease) in Cash and Cash Equivalents	—			—
Cash and Cash Equivalents, Beginning of Year	100			100
Cash and Cash Equivalents, End of Year	$	100		$	100

Non-Cash Investing Activities:  Expenditures for Property and Equipment Held for Lease include the changes in Other Accrued Liabilities related to these purchases of $(990,000) and $990,000 for the years ended August 31, 2015 and 2014, respectively.

The Accompanying Notes are an Integral Part of These Financial Statements.

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ProGold Limited Liability Company

Statements of Changes in Members’ Equity

For the Years Ended August 31

(In Thousands)

	American Crystal Sugar Company			Golden Growers Cooperative			Retained Earnings			Total Members’ Equity
Balance, August 31, 2013	$	38,074		$	36,581		—			$	74,655
Net Income	—			—			12,282			12,282
Distributions to Members	(4,936		)	(4,742		)	(12,282		)	(21,960		)
Balance, August 31, 2014	33,138			31,839			—			64,977
Net Income	—			—			10,721			10,721
Distributions to Members	(4,559		)	(4,381		)	(10,721		)	(19,661		)
Balance, August 31, 2015	$	28,579		$	27,458		$	—		$	56,037

The Accompanying Notes are an Integral Part of These Financial Statements.

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ProGold Limited Liability Company

Notes to the Financial Statements

(1) NATURE OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

Organization

ProGold Limited Liability Company (ProGold) is organized as a Minnesota limited liability company. ProGold is owned by American Crystal Sugar Company (51%) and Golden Growers Cooperative (49%). Transfer of ownership in ProGold to another party not already a member is allowed only with the consent of the other Members and the plant’s lessee, Cargill, Incorporated. ProGold has been organized with a life of 50 years and its legal existence will terminate on July 13, 2044, absent a business continuation agreement.

Operating Lease

ProGold leases a corn wet milling facility to Cargill, Incorporated under an operating lease. Payments are to be received monthly under the lease, which runs through December 31, 2017. The operating lease revenue is recognized as earned ratably over the term of the lease and to the extent that amounts received exceed amounts earned, deferred revenue is recorded. Expenses (including depreciation and interest) are charged against such revenue as incurred. The lease does not contain a provision for the automatic renewal or extension of the lease terms. However, it does provide an option for Cargill, Incorporated to request exclusive negotiations with ProGold during a certain period of time prior to the expiration of the current lease. The lease also contains provisions for increased payments to be received during the lease period related to the plant’s capital additions.

Cash and Cash Equivalents

ProGold considers all highly liquid debt and equity instruments purchased with a maturity of three months or less to be cash equivalents. ProGold places its temporary cash investments with high-credit-quality financial institutions. At times, such investments may be in excess of the applicable insurance limit.

Property and Equipment Held for Lease

Property and equipment held for lease are stated at cost. Depreciation on assets placed in service is provided using the straight-line method over the estimated useful lives of the individual assets, ranging from 5 to 40 years.

Impairment of Long Lived Assets

ProGold reviews its property and equipment for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. An impairment loss is recorded when the sum of the future cash flows is less than the carrying amount of the asset. An impairment loss is

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measured as the amount by which the carrying amount of the asset exceeds its fair value. There were no impairment losses incurred for the years ended August 31, 2015 or 2014.

Related Parties

American Crystal Sugar Company and Golden Growers Cooperative are considered related parties for financial reporting purposes.

Income Taxes

ProGold is treated in a manner similar to a partnership for federal and state income tax purposes, based upon its current organization. Accordingly, the financial statements do not include any provision for income taxes.

Accounting Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Investments in CoBank, ACB

The investments in stock of CoBank, ACB are stated at cost, plus unredeemed patronage refunds received or estimated to be received in the form of capital stock.

(2) LEASE WITH CARGILL, INCORPORATED:

Future minimum payments to be received under the lease are as follows:

Fiscal year ending August 31, (In Thousands):

2016	$	21,500
2017	21,500
2018	7,167
	$	50,167

(3) CAPITAL EXPENDITURES AGREEMENT WITH CARGILL, INCORPORATED

ProGold entered into a Capital Expenditures Agreement with Cargill, Incorporated during fiscal 2014 associated with a project to replace certain equipment at the corn wet milling facility. During 2015, ProGold reimbursed Cargill, Incorporated $2.2 million for costs incurred for the project when it was completed. The agreement also provides that ProGold will receive monthly incremental lease payments from Cargill, Incorporated upon completion of the project equal to an amount necessary for the reimbursement amount together with interest to be fully amortized over a period of 12 years. The incremental lease payments total $229,000 per year and will

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continue during the term of the lease shown in Note 2, including any extension(s) of the lease term but not to exceed 12 years. This incremental lease payment is not included in the amounts in Note 2.

ProGold has recorded a liability of $0 and $990,000 as of August 31, 2015 and 2014, respectively, due Cargill, Incorporated associated with costs incurred on the replacement project through that date.

(4) RELATED PARTY TRANSACTIONS:

ProGold has an administrative services agreement with American Crystal Sugar Company. Amounts incurred under the terms of the American Crystal Sugar Company agreement totaled approximately $15,000 and $18,000 in the years ended August 31, 2015 and 2014, respectively.

(5) OPERATING LEASES:

ProGold is a party to an operating lease for rail cars, which expires in December 2016. Cargill, Incorporated has assumed responsibility for the payments on the rail car lease for the duration of this lease.

(6) DISTRIBUTIONS TO MEMBERS:

In 2008, ProGold began to make cash distributions to its members. The ProGold Board of Governors has authorized the monthly distribution of cash to the members through December 31, 2015, to the extent that the available cash balance exceeds $100,000.

(7) ENVIRONMENTAL MATTERS:

ProGold is subject to extensive federal and state environmental laws and regulations with respect to water and air quality, solid waste disposal and odor and noise control. The operating lease with Cargill, Incorporated provides that ProGold may be responsible for claims arising for occurrences prior to the execution of the original operating lease, December 1, 1997. ProGold believes that it was in substantial compliance with applicable environmental laws and regulations prior to that time. The operating lease also provides that Cargill, Incorporated operate the corn wet milling facility in compliance with all applicable federal and state environmental laws and regulations during the term of the lease.

(8) INCOME TAXES:

ProGold conducts an annual analysis of its various tax positions, assessing the likelihood of those positions being upheld upon examination with relevant tax authorities. ProGold has determined that it has no unrecognized tax benefits. No interest or penalties are recognized in the statements of operations. ProGold is no longer subject to U.S. Federal or state income tax examinations by tax authorities for fiscal years 2011 and earlier.

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(9) SUBSEQUENT EVENTS:

ProGold has evaluated events through the date that the financial statements were available to be issued, October 1, 2015, for potential recognition or disclosure in the August 31, 2015 financial statements.

These notes are an integral part of the accompanying financial statements.

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