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AMERICAN CRYSTAL SUGAR CO /MN/
10-Q, 2000-07-13
SUGAR & CONFECTIONERY PRODUCTS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q

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

For the period ended May 31, 2000

Commission file number: 33-83868

AMERICAN CRYSTAL SUGAR COMPANY
(Exact name of registrant as specified in its charter)

    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    

    Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

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AMERICAN CRYSTAL SUGAR COMPANY
FORM 10-Q
INDEX

					Page No.
PART I			FINANCIAL INFORMATION
	ITEM 1.		FINANCIAL STATEMENTS
			BALANCE SHEETS		1
			STATEMENTS OF OPERATIONS		3
			STATEMENTS OF CASH FLOWS		4
			NOTES TO THE FINANCIAL STATEMENTS		5
	ITEM 2.		MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION		7
PART II			OTHER INFORMATION
	ITEM 1.		LEGAL PROCEEDINGS		11
	ITEM 6.		EXHIBITS AND REPORTS ON FORM 8-K		11
SIGNATURES					16

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AMERICAN CRYSTAL SUGAR COMPANY
Balance Sheets
(Unaudited)
(Dollars in Thousands)

ASSETS

				May 31
										August 31, 1999*
				2000			1999
Current Assets:
	Cash and Cash Equivalents			$	3,231		$	29		$	2,156
	Accounts Receivable:
		Trade			50,760			73,792			71,654
		Members			1,045			1,719			1,595
		Other			2,938			65			2,642
	Advances to Related Parties				4,314			13,269			22,419
	Inventories				276,806			300,400			111,958
	Prepaid Expenses				3,506			2,415			2,944
Total Current Assets					342,600			391,689			215,368
Property and Equipment:
	Land				26,267			14,671			24,456
	Buildings and Equipment				797,047			678,174			804,607
	Construction-in-Progress				18,771			134,721			6,648
	Less: Accumulated Depreciation				(474,938	)		(461,076	)		(459,096	)
Net Property and Equipment					367,147			366,490			376,615
Other Assets:
	Investments in CoBank				15,135			13,970			15,427
	Investments in Marketing Cooperatives				3,219			2,896			3,112
	Investments in ProGold Limited Liability Company				36,542			35,541			35,629
	Investments in Crystech, LLC				1,494			1,574			1,688
	Notes Receivable—Crystech, LLC				13,905			9,862			11,883
	Other Assets				4,143			3,881			6,170
Total Other Assets					74,438			67,724			73,909
Total Assets				$	784,185		$	825,903		$	665,892

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*

Derived from audited financial statements.

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AMERICAN CRYSTAL SUGAR COMPANY
Balance Sheets
(Unaudited)
(Dollars in Thousands)

LIABILITIES AND MEMBERS' INVESTMENTS

				May 31
										August 31, 1999*
				2000			1999
Current Liabilities:
	Short-Term Debt			$	127,452		$	177,433		$	60,844
	Current Maturities of Long-Term Debt				18,925			18,800			18,915
	Accounts Payable:
		Trade			5,853			7,573			24,239
		Other			3,556			5,170			2,019
	Advances due to Related Parties				6,656			—			—
	Accrued Continuing Costs				58,791			58,211			—
	Other Current Liabilities				18,935			16,799			16,920
	Amounts Due Members				51,635			56,799			35,698
Total Current Liabilities					291,803			340,785			158,635
Long-Term Debt, Excluding Current Maturities					231,210			232,895			233,135
Deferred Income Taxes					1,900			1,753			1,838
Other Liabilities					31,592			26,488			30,998
Total Liabilities					556,505			601,921			424,606
Members' Investments:
	Preferred Stock				38,275			38,275			38,275
	Common Stock				30			29			30
	Additional Paid-in Capital				130,969			123,737			123,948
	Unit Retains				97,054			95,562			116,849
	Accumulated Other Comprehensive Income/(Loss)				(4,088	)		(2,259	)		(4,088	)
	Retained Earnings/(Deficit)				(34,560	)		(31,362	)		(33,728	)
Total Members' Investments					227,680			223,982			241,286
Total Liabilities and Members' Investments				$	784,185		$	825,903		$	665,892

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*

Derived from audited financial statements.

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AMERICAN CRYSTAL SUGAR COMPANY
Statements of Operations
(Unaudited)
(Dollars in Thousands)

				For the Nine Months Ended May 31						For the Three Months Ended May 31
				2000			1999			2000			1999
Net Revenue				$	564,774		$	603,533		$	178,967		$	227,558
Cost of Product Sold					31,131			33,751			51,997			45,789
Gross Proceeds					533,643			569,782			126,970			181,769
Selling, General & Administrative Expenses					118,928			133,893			36,625			48,186
Accrued Continuing Costs					58,791			58,211			(16,886	)		12,426
Operating Proceeds					355,924			377,678			107,231			121,157
Other Income (Expenses)
	Interest Income				2,036			787			904			349
	Interest Expense				(17,018	)		(16,925	)		(6,841	)		(5,984	)
	Other Income				1,489			5,111			584			498
	Other Expenses				(862	)		(3,410	)		(247	)		(2,184	)
Other Income (Expense)					(14,355	)		(14,437	)		(5,600	)		(7,321	)
Proceeds before Income Taxes					341,569			363,241			101,631			113,836
Income Taxes (Provision)/Benefit					(78	)		—			(26	)		—
Net Proceeds Resulting from Member and Non-Member Business				$	341,491		$	363,241		$	101,605		$	113,836
Distribution of Net Proceeds:
	Credited/(Charged) to Members' Investments:
		Non-Member Business Income/(Loss)		$	(832	)	$	1,872		$	92		$	(1,392	)
		Unit Retains Declared to Members			—			—			—			—
Net Credit/(Charge) to Members' Investments					(832	)		1,872			92			(1,392	)
Payments to/due Members for Sugarbeets, Net of Unit Retains Declared					342,323			361,369			101,513			115,228
Total				$	341,491		$	363,241		$	101,605		$	113,836

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AMERICAN CRYSTAL SUGAR COMPANY
Statements of Cash Flows
(Unaudited)
(In Thousands)

				For the Nine Months Ended May 31
				2000			1999
Cash Provided By (Used In) Operations:
	Net Proceeds Resulting from Member and Non-Member Business			$	341,491		$	363,241
	Payments to Members for Sugarbeets, Net of Unit Retains Declared				(342,323	)		(361,369	)
	Add (Deduct) Non-Cash Items:
		Depreciation and Amortization			33,536			22,506
		(Income) Loss from Equity Method Investees			(819	)		(488	)
		(Gain) Loss on the Disposition of Property and Equipment			565			(69	)
		Non-Cash Portion of Patronage Dividend from Banks for Cooperatives			292			(80	)
		Deferred Gain Recognition			(148	)		(151	)
	Changes in Assets and Liabilities:
		Receivables			21,148			(16,343	)
		Advances to Related Parties			24,761			13,133
		Inventories			(164,848	)		(158,018	)
		Prepaid Expenses			(562	)		664
		Accounts Payable			(16,849	)		(23,389	)
		Accrued Continuing Costs			58,791			58,211
		Other Liabilities			2,670			2,784
		Amounts Due Members			15,937			42,384
	Net Cash (Used In) Operations				(26,358	)		(56,984	)
Cash Provided By (Used In) Investing Activities:
	Purchases of Property and Equipment				(24,980	)		(36,881	)
	Proceeds from the Sale of Property and Equipment				590			125
	Investments in Banks for Cooperatives				—			2,000
	Investments in Marketing Cooperatives				—			(609	)
	Investments in Crystech LLC				(47	)		—
	Notes Receivable—Crystech LLC				(2,022	)		(6,144	)
	Changes in Other Assets				1,972			903
Net Cash (Used In) Investing Activities					(24,487	)		(40,606	)
Cash Provided By (Used In) Financing Activities:
	Net Proceeds (Payments) on Short-Term Debt				66,608			61,111
	Proceeds from Long-Term Debt				17,000			57,100
	Long-Term Debt Repayment				(18,915	)		(17,900	)
	Proceeds from Sale of Stock				7,021			7,555
	Payment of Unit Retains				(19,795	)		(10,288	)
Net Cash Provided by Financing Activities					51,919			97,578
Increase (Decrease) In Cash and Cash Equivalents					1,075			(12	)
Cash and Cash Equivalents, Beginning of Year					2,156			41
Cash and Cash Equivalents, End of Period				$	3,231		$	29

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AMERICAN CRYSTAL SUGAR COMPANY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MAY 31, 2000 AND 1999

Note 1: Basis of Presentation

    The unaudited financial statements contained herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles. However, in the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included.

    The operating results for the nine month period ended May 31, 2000 are not necessarily indicative of the results that may be expected for the year ended August 31, 2000.

    The amount paid to growers for sugarbeets (beet payment) depends on the future selling prices of sugar and agri-products as well as processing and other costs to be incurred during the remainder of the fiscal year. For the purposes of this report, the amount of the beet payment, future revenues and costs have been estimated. Therefore, adjustments with respect to these estimates may be necessary in the future as additional information becomes available.

    These financial statements should be read in conjunction with the financial statements and notes included in the Company's annual report for the year ended August 31, 1999.

    Certain reclassifications have been made to the 1999 financial statements to conform with the 2000 presentation.

Note 2: Inventories

    The major components of inventories are as follows (In Thousands):

    Sugar, pulp, molasses and CSB inventories are valued at estimated net realizable value. Unprocessed sugarbeets are valued at the estimated net beet payment plus estimated unit retains to be withheld. Maintenance parts & supplies and beet seed inventories are valued at the lower of average cost or market.

Note 3: Accrued Continuing Costs

    For interim reporting, the Net Proceeds from Member Business is based on the forecasted beet payment and the percentage of the tons of sugarbeets processed to the total estimated tons of sugarbeets to process for a given crop year. Accrued continuing costs represents the difference between the Net Proceeds from Member Business as determined above and actual member business crop year revenues realized and expenses incurred through the end of the reporting period. Accrued continuing costs are reflected in the Financial Statements as a cost on the Statements of Operations and as a current liability on the Balance Sheets.

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Note 4: Members' Investments

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Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition
For the Three Months and Nine Months Ended May 31, 2000 and 1999

    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 Company's actual results could differ materially from those indicated. Important factors that could cause or contribute to such differences include, without limitation, market factors, weather and general economic conditions, farm and trade policy, and available quantity and quality of sugarbeets. For a more complete discussion of "Important Factors", please refer to the Company's 1999 Form 10-K.

Comparison of the Nine Months Ended May 31, 2000 and 1999

    Revenue for the nine months ended May 31, 2000, was $564.8 million, a decrease of $38.8 million from 1999. Revenue from total sugar sales decreased 3.2 percent reflecting a 1.3 percent decrease in hundredweight sold and a 1.9 percent decrease in the average selling price per hundredweight. Revenue from pulp sales decreased 24.9 percent due to a 36.3 percent decrease in the volume of pulp sold partially offset by an 18.0 percent increase in the average selling price per ton. Revenue from molasses sales decreased 45.9 percent due to a 46.1 percent decrease in the volume of molasses sold partially offset by a .4 percent increase in the average selling price per ton. Revenue from the sales of Concentrated Separated By-Product (CSB), a by-product of the molasses desugarization process, increased 31.2 percent due to a 92.2 percent increase in sales volume partially offset by a 31.7 percent decrease in the average selling price per ton. The decrease in sales volume of molasses and the increase in sales volume of CSB are primarily the result of the Crystech, LLC molasses desugarization facility at Hillsboro, North Dakota, which became operational on February 1, 2000.

    Cost of product sold for the nine months ended May 31, 2000, exclusive of payments for sugarbeets, decreased $2.6 million as compared to the same period in 1999. Direct processing costs for sugar and pulp increased 4.7 percent primarily due to the commencement of tolling charges from Crystech, LLC, partially offset by reduced costs of harvesting fewer tons. Fixed and committed expenses increased 13.4 percent reflecting higher depreciation and maintenance costs. The cost associated with sugar purchased to meet customer needs was up $5.0 million due to the increase in purchased sugar activity in distant geographic markets. The change in inventories impacted the cost of product sold favorably by $24.6 million in the first nine months of fiscal 2000 as compared to the same period in fiscal 1999.

    Selling, General and Administrative expenses for the nine months ended May 31, 2000, decreased $15.0 million from 1999. Selling expenses decreased $13.6 million due to lower agri-product freight costs and the suspension of the Commodity Credit Corporation marketing assessment fee as of September 1, 1999. General and Administrative expenses decreased $1.4 million from 1999, primarily due to lower personnel costs and general cost reductions.

    The increase in accrued continuing costs was due primarily to changes in the volume of sugar sales and production, differences in the timing of incurring processing costs and the amount of unsold inventory on hand.

    Interest income increased $1.2 million in fiscal 2000 primarily due to interest on the Crystech, LLC notes receivable.

    Interest expense was relatively unchanged between the two years.

    Other income decreased $3.6 million from last year primarily due to the gain in fiscal 1999 from the sale of certain beet seed assets to Betaseed Inc. (BETA), a wholly owned subsidiary of Kleinwanzlebener Saatzucht, Ag.

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    Other expenses decreased $2.5 million between years, with decreased supplemental retiree benefits and decreased expense from anticipated write-offs by CoBank being partially offset by a loss on the disposition of assets and a loss from the four months of Crystech, LLC operations. Crystech was formed in 1998 to acquire, construct, finance, operate and maintain a molasses desugarization facility at the Company's Hillsboro, North Dakota sugar factory together with certain sugar processing equipment located at the Hillsboro, North Dakota and Moorhead, Minnesota sugar factories. The Company acquired an initial 50% ownership interest in Crystech through a $1.5 million cash contribution. The Company accounts for its investment in the joint venture using the equity method. Crystech became operational on February 1, 2000.

    Non-member activities resulted in a loss of $.8 million for the nine months ended May 31, 2000 as compared to a gain of $1.9 million for the same period last year. The majority of the fiscal 1999 gain is related to the sale of beet seed assets to BETA partially offset with non-member interest expense related to borrowings for ProGold Limited Liability Company (ProGold). The loss in fiscal 2000 is primarily comprised of activities related to ProGold, LLC.

Comparison of the Three Months Ended May 31, 2000 and 1999

    Revenue for the three months ended May 31, 2000, was $179.0 million, a decrease of $48.6 million from 1999. Revenue from total sugar sales decreased 19.2 percent reflecting a 15.5 percent decrease in hundredweights sold and a 4.4 percent decrease in the average selling price per hundredweight. Revenue from pulp sales decreased 44.5 percent due to a 53.3 percent decrease in volume of pulp sold partially offset by an 18.8 percent increase in the average selling price per ton. Revenue from molasses sales decreased 62.6 percent due to a 69.7 percent decrease in the volume of molasses sold partially offset by a 23.5 percent increase in the average selling price per ton. Revenue from the sales of Concentrated Separated By-Product (CSB), a by-product of the molasses desugarization process, increased 74.4 percent due to a 113.2 percent increase in sales volume partially offset by a 18.2 percent decrease in average selling price per ton. The decrease in sales volume of molasses and the increase in sales volume of CSB are primarily the result of the Crystech, LLC molasses desugarization facility at Hillsboro, North Dakota, which became operational on February 1, 2000.

    Cost of product sold for the three months ended May 31, 2000, exclusive of payments for sugarbeets, increased $6.2 million as compared to the same period in 1999. Direct processing costs for sugar and pulp increased 8.1 percent primarily due to the commencement of the tolling charges from Crystech, LLC. Fixed and committed expenses increased 5.3 percent this year due to higher depreciation and maintenance. The cost associated with sugar purchased to meet customer needs was down $1.6 million due to the decrease in purchased sugar activity in distant geographic markets during this quarter. Changes in inventory levels between 2000 and 1999 impacted the cost of product sold unfavorably by $3.4 million.

    Selling, General and Administrative expenses for the three months ended May 31, 2000, decreased $11.6 million from the same period in 1999. Selling expenses decreased $11.2 million due to lower agri-product freight costs and the suspension of the Commodity Credit Corporation marketing assessment fee. General and Administrative expenses were $.4 million lower in 2000 primarily due to lower personnel costs and general cost reductions.

    The decrease in accrued continuing costs was due primarily to changes in the volume of sugar sales and production, differences in the timing of incurring processing costs and the amount of unsold inventory on hand.

    Interest income increased $.6 million in fiscal 2000 primarily due to interest on the Crystech, LLC notes receivable.

    Interest expense increased $.9 million in fiscal 2000 primarily due to slightly higher interest rates.

    Other income for the quarter increased slightly from $.5 million in 1999 to $.6 million in 2000.

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    Other expenses decreased by $2.0 million between years, with decreased expense from the anticipated write-off by CoBank in 1999, being partially offset by a loss on the disposition of assets and a loss from the four months of Crystech, LLC operations.

    Non-member activities for the three months ended May 31, 2000 and 1999, resulted in a fiscal 2000 non-member income of $.1 million. Fiscal 1999 had a $1.4 million loss. The loss during fiscal 1999 was due primarily to non-member beet seed activities.

Current Market Trends

    The domestic sugar market is currently experiencing an oversupply of refined sugar. This oversupply is the result of several factors. First, the World Trade Organization (WTO) requires imports of sugar, regardless of the domestic supply situation, from approximately 40 foreign nations that produce and export sugar. Second, sugar is currently entering the United States from Canada each year, over and above the WTO minimum, in the form of "stuffed molasses." "Stuffed molasses" is molasses that contains an extremely high percentage of sugar. Once the "stuffed molasses" reaches the United States, it is run through a desugarization process that separates the liquid sugar from the molasses. The liquid sugar is then sold in the domestic market. Third, in addition to the sugar currently being imported into the domestic market this year, Mexico, under the North American Free Trade Agreement (NAFTA), will be allowed, in October, 2000, to export an additional 5 million hundredweight of sugar, tariff free, into the United States. Fourth, both the sugarbeet crop and sugar cane crop for this year were the largest in history. The increased size of these crops resulted from an expansion in the acreage planted, the development of higher yielding cane varieties and generally good growing conditions across the country.

    Due to these factors, the supply of refined sugar currently exceeds the domestic demand for refined sugar in the United States. This excess supply has resulted in a decline in domestic sugar prices. Lower sugar prices adversely impact the profitability of selling refined sugar in the United States, resulting in a direct negative impact on the gross beet payment.

    In June 2000, the U.S. Department of Agriculture's Commodity Credit Corporation ("CCC") purchased 132,000 tons of sugar from some U.S. sugar producers in an effort to reduce the cost of expected sugar program loan forfeitures, support sugar growers, and help stabilize low market prices. The CCC did not purchase any sugar from the Company. The CCC has no immediate plans to dispose of the purchased sugar. According to the CCC, additional purchases may occur in the future, depending on price and market conditions.

    Although the Company views the CCC's purchase of sugar as a positive step by the U.S. Government to address the current market situation, there is no assurance that this purchase will have a material impact on domestic sugar prices.

    The Company has a significant amount of sugar pledged as collateral for non-recourse loans through the CCC. The domestic sugar price may decrease to a level below the forfeiture price for these non-recourse loans. The Company is currently contemplating the forfeiture of sugar.

Environmental Matters

    In June 1998, a dike failure occurred near the East Grand Forks, Minnesota factory. The Minnesota Pollution Control Agency (MPCA) commenced enforcement action related to this incident. On April 4, 2000, the Company and the MPCA entered into a stipulation agreement settling this matter. This agreement requires the Company, among other conditions, to pay penalties in the amount of $127,000.

Liquidity and Capital Resources

    Under the Company's Bylaws and Grower Contracts, payments for member delivered sugarbeets, the Company's principal raw material, are subordinated to all member business expenses. Cash payments to

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members are spread over a period of approximately one-year following delivery of their sugarbeet crops to the Company. All unpaid portions remain available to meet the Company's capital requirements. This member financing arrangement may result in an additional source of liquidity and reduced outside financing requirements in comparison to a similar business operated on a non-cooperative basis. Because sugar is sold throughout the year (while sugarbeets are processed primarily in the fall, winter and spring) and because substantial amounts of equipment are required for its operations, the Company has utilized substantial outside financing on both a seasonal and long-term basis to fund such operations. The majority of such financing has been provided by CoBank, ACB. The Company has a long-term debt commitment with CoBank during 2000 of $180.5 million. In addition, the Company has long-term debt outstanding of $50 million from a private placement of Senior Notes that occurred in September of 1998, a term loan with US Bank of $3.0 million, a term loan with Bank of North Dakota of $7.2 million, and $44.0 million from nine separate issuances of Pollution Control and Industrial Development Revenue Bonds. The most recent bond issuance, $5.75 million of Solid Waste Disposal Revenue Bonds of the City of East Grand Forks, Minnesota, occurred in April 2000. These bonds are due in 2015 and have variable interest rates. The Company also has a seasonal line of credit with CoBank, ACB of $210 million that includes a line of credit with Norwest Bank for $3 million and any amounts obtained through issuance of instruments in its commercial paper program. The Company's commercial paper program provides short-term borrowings of up to $150 million.

    On March 31, 2000, the Company entered into new Term and Seasonal loan agreements with CoBank, ACB. These new loans replace the loans with the St. Paul Bank for Cooperatives that have expired. CoBank, ACB and the St. Paul Bank for Cooperatives merged in 1999. The various loan agreements between CoBank, ACB and the Company obligate the Company to maintain or achieve certain amounts of working capital and certain financial ratios and impose restrictions on the Company. As of May 31, 2000, the Company was in compliance with its loan agreements.

    The change in the Company's financial condition from August 31, 1999 to May 31, 2000 is primarily due to normal business seasonality. The first nine months of the Company's fiscal year includes the completion of the sugarbeet harvest, start of the processing campaign, and the initial payments to members for delivered sugarbeets. The cash used in operations of $26.4 million and investing activities of $24.5 million was funded through the cash provided by financing activities. The net cash provided by financing activities was primarily comprised of the net proceeds from short-term debt of $66.7 million, and proceeds from the installment sale of stock of $7.0 million, partially offset by the payment of the unit retains of $19.8 million.

    Working capital has decreased $5.9 million from $56.7 million at the beginning of the year to $50.8 million as of May 31, 2000 primarily due to additional short-term debt and the amounts due growers partially offset by increased inventories. Working capital as of May 31, 2000 was $50.8 million, a decrease of $.1 million when compared to $50.9 million of working capital as of May 31, 1999.

    Capital expenditures for the nine months ended May 31, 2000 were $24.9 million as compared to $36.9 million for the same period in 1999. The Company had outstanding commitments totaling $14.0 million as of May 31, 2000, for equipment and construction contracts related to various capital projects.

    The Company anticipates that the funds necessary for working capital requirements and future capital expenditures will be derived from operations, short-term borrowings, depreciation, unit retains and long-term borrowings.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

    From time to time and in the ordinary course of its business, the Company is named as a defendant in legal proceedings related to various issues, including worker's compensation claims, tort claims and contractual disputes. The Company is currently involved in certain legal proceedings, which have arisen in the ordinary course of the Company's business. The Company is also aware of certain other potential claims, which could result in the commencement of legal proceedings. The Company carries insurance, which provides protection against certain types of claims. With respect to current litigation and potential claims of which the Company is aware, the Company's management believes that (i) the Company has insurance protection to cover all or a portion of any judgments which may be rendered against the Company with respect to certain claims or actions and (ii) any judgments which may be entered against the Company and which may exceed such insurance coverage or which may arise in actions involving potential liabilities not covered by insurance policies are not likely to have a material adverse effect upon the Company, or its assets or operations.

Item 6. Exhibits and reports on Form 8-K

(a)

Exhibits

Item No.				Method of Filing
3.1		Restated Articles of Incorporation of American Crystal Sugar Company		Incorporated by reference to Exhibit 3(i) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.
3.2		Restated By-laws of American Crystal Sugar Company		Incorporated by reference to Exhibit 3(ii) from the Company's Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996.
4.1		Restated Articles of Incorporation of American Crystal Sugar Company		See Exhibit 3.1
4.2		Restated By-laws of American Crystal Sugar Company		See Exhibit 3.2
10.1		Growers' Contract (5-year Agreement)		Incorporated by reference to Exhibit 10(f) from the Company's Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996.
10.2		Growers' Contract (Annual Contract)		Incorporated by reference to Exhibit 10(g) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.

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10.3		Trademark License Agreement between Registrant and United Sugars Corporation, dated November 1, 1993		Incorporated by reference to Exhibit 10(l) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.
10.4		Uniform Member Marketing Agreement, Pool Basis between Registrant and Midwest Agri-Commodities Company, dated April 14, 1992		Incorporated by reference to Exhibit 10(m) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.
10.5		Stipulation Agreement between Registrant and State of Minnesota Pollution Control Agency		Incorporated by reference to Exhibit 10(n) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.
10.6		Amended and Restated Loan Agreement between Registrant and First Bank National Association, dated November 22, 1993		Incorporated by reference to Exhibit 10(q) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.
10.7		Pension Contract and Amendments		Incorporated by reference to Exhibit 10(r) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.
10.8		Form of Operating Agreement between Registrant and ProGold Limited Liability Company		Incorporated by reference to Exhibit 10(u) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.
10.9		Form of Member Control Agreement between Registrant and ProGold Limited Liability Company		Incorporated by reference to Exhibit 10(v) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.

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10.10		Administrative Services Agreement between Registrant and ProGold Limited Liability Company		Incorporated by reference to Exhibit 10(w) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.
10.11		Uniform Member Marketing Agreement		Incorporated by reference to Exhibit 10(x) from the Company's Registration Statement on Form S-1 (File No. 33-83868), declared effective November 23, 1994.
†10.12		Coal Supply Agreement between Registrant and Spring Creek Coal Company, dated August 25, 1995		Incorporated by reference to Exhibit 10(y) from the Company's Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996.
†10.13		Coal Transportation Agreement between Registrant and Northern Coal Transportation Company, dated August 25, 1995		Incorporated by reference to Exhibit 10(z) from the Company's Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996.
†10.14		Gas Sales Contract between Registrant and Coastal Gas Marketing Company, dated as of March 20, 1996		Incorporated by reference to Exhibit 10(aa) from the Company's Registration Statement on Form S-1 (File No. 333-11693), declared effective November 13, 1996.
†10.15		Trademark License Agreement between Registrant and The Pillsbury Company, dated as of April 9, 1997		Incorporated by reference to Exhibit 10(dd) from the Company's Registration Statement on Form S-1 (File No. 333-32251), declared effective October 24, 1997.
10.16		Pledge Agreement between Registrant and First Union Trust Company, NA		Incorporated by reference to Exhibit 10(ee) from the Company's Annual Report on Form 10-K for the year ended August 31, 1998.
10.17		Indemnity Agreement between Registrant, Newcourt Capital USA Inc., Crystech, LLC and Crystech Senior Lender Trust		Incorporated by reference to Exhibit 10(ff) from the Company's Annual Report on Form 10-K for the year ended August 31, 1998.

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10.18		Tolling Services Agreement between Crystech, LLC and Registrant		Incorporated by reference to Exhibit 10(gg) from the Company's Annual Report on Form 10-K for the year ended August 31, 1998.
10.19		Operations and Maintenance Agreement between Crystech, LLC and Registrant		Incorporated by reference to Exhibit 10(hh) from the Company's Annual Report on Form 10-K for the year ended August 31, 1998.
††10.20		Limited Liability Company Agreement of Crystech, LLC		Incorporated by reference to Exhibit 10(ii) from the Company's Annual Report on Form 10-K for the year ended August 31, 1998.
10.21		Master Agreement between the Registrant and Bakery, Confectionery, Tobacco Workers & Grain Millers AFL-CIO, CLC		Incorporated by reference to Exhibit 10(ii) from the Company's Annual Report on Form 10-K for the year ended August 31, 1999.
10.22		Uniform Member Beet Sugar Marketing Agreement		Incorporated by reference to Exhibit 10.23 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999.
10.23		Registrant's Senior Note Purchase Agreement		Incorporated by reference to Exhibit 10.24 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999.
10.24		Registrant's Senior Note Intercreditor and Collateral Agency Agreement		Incorporated by reference to Exhibit 10.25 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999.
10.25		Registrant's Senior Note Restated Mortgage and Security Agreement		Incorporated by reference to Exhibit 10.26 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999.
10.26		Employment Agreement between the Registrant and James J. Horvath		Incorporated by reference to Exhibit 10.28 from the Company's Annual Report on Form 10-K for the year ended August 31, 1999.

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10.27		Term and Seasonal Loan Agreements between the Registrant and CoBank, ACB dated March 31, 2000		Filed herewith electronically.
10.28		Stipulation Agreement between Registrant and State of Minnesota Pollution Control Agency, dated April 4, 2000		Filed herewith electronically.
28		Financial Data Schedule		Filed herewith electronically.

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†

Portions of the Exhibit have been granted confidential treatment by the Commission. The omitted portions have been filed separately with the Commission.

††

Portions of the Exhibit have been deleted from the publicly filed document and have been filed separately with the Commission pursuant to a request for confidential treatment.

(b)

No reports were filed on Form 8-K during this quarter.

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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.

		AMERICAN CRYSTAL SUGAR COMPANY (Registrant)
Date: July 7, 2000			/s/ THOMAS S. ASTRUP    Thomas S. Astrup Corporate Controller Duly Authorized Officer

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QuickLinks

INDEX
AMERICAN CRYSTAL SUGAR COMPANY Balance Sheets (Unaudited) (Dollars in Thousands)
AMERICAN CRYSTAL SUGAR COMPANY Balance Sheets (Unaudited) (Dollars in Thousands)
AMERICAN CRYSTAL SUGAR COMPANY Statements of Operations (Unaudited) (Dollars in Thousands)
AMERICAN CRYSTAL SUGAR COMPANY Statements of Cash Flows (Unaudited) (In Thousands)
AMERICAN CRYSTAL SUGAR COMPANY NOTES TO THE FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED MAY 31, 2000 AND 1999

Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition For the Three Months and Nine Months Ended May 31, 2000 and 1999

PART II. OTHER INFORMATION

Item 1. Legal Proceedings
Item 6. Exhibits and reports on Form 8-K

SIGNATURES

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