Annual Members Meeting Forward Looking Statement A word from our - PowerPoint PPT Presentation

Annual Member’s Meeting

Forward Looking Statement A word from our Counsel This presentation contains forward-looking statements involving future events, future business and other conditions, future performance, and expected operations. These statements are based on management’s belief and expectations and on information currently available to management. Forward-looking statements may include statements which contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “should,” “could,” “may,” “future,” “will,” “potential,” or the negatives of these words and all similar expressions. Forward-looking statements involve numerous assumptions, risks, and uncertainties. The actual results or actual business or other conditions experienced by Conestoga Energy Holdings, LLC, and its subsidiaries (Companies) may differ materially from those contemplated by any forward- looking statements, and the Companies are not under any duty to update the forward-looking statements contained in this presentation. The Companies cannot and do not guarantee any future results or performance or what future business conditions will be like. Conestoga Energy Holdings cautions you not to put undue reliance on forward-looking statements, which speak only as of May 5 th 2015, the date of this presentation. Conestoga Energy Holdings www.ConestogaEnergy.com 2

Who are we? Conestoga Energy can respond to Conestoga Energy is a boutique market conditions with wet or dry supplier of renewable fuel, distiller grains. maintaining flexibility to stay responsive to the market. We are always looking to reduce our carbon We manage and footprint through operate three innovative technology ethanol production and disciplined facilities located in processes. Kansas and Texas. Our flexibility positions us to Combined, Conestoga Energy’s leverage our core competencies plants have a production allowing for strategic and/or tactical capacity of over 218 million growth. gallons per year. Conestoga Energy Holdings www.ConestogaEnergy.com 3

Ethanol Insurance Distiller’s Grain Corn Oil Logistics CO2 What we do Produce and manage within the ethanol supply chain, taking advantage of synergistic opportunities throughout.

Kansas LOCATIONS 2 Liberal, KS (owned) Garden City, KS (owned) 1 Levelland, TX (managed) Texas EMPLOYEES 164 Employees 127 in Kansas 37 in Texas GALLONS SOLD 218 Million 180 Domestic 38 Global Exports By the Numbers

Board of Directors Cecil O’Brate Ed Condon Larry Leis Rock Ormiston Nick Hatcher Board Member Vice Chairman Secretary Board Member Chairman Perry Bacon Mark Zorensky Andy Bulloch Greg Stone Gary Harshberger Board Member Board Member Board Member Board Member Board Member Conestoga Energy Holdings www.ConestogaEnergy.com 6

Management Team Tom Willis Fred Rayner Dusty Turner Jason Dale Dean Alling CEO CFO COO VP Risk Management Manager CIP Matt Presley Paula Haley Mike Varnes Matt Durler Chief Technology VP Finance & VP Logistics VP Marketing Officer Accounting Conestoga Energy Holdings www.ConestogaEnergy.com 7

STATE OF THE COMPANY

Strategic Approach Our goal is to maximize our unit holders’ investment. Cash & Risk Management Maintain a fortress balance sheet and a disciplined risk management approach to build value and protect investment. Partnerships and Opportunities Explore and execute strategic alliances and integration throughout the supply chain. New Products Continue to research and add new technologies which give us a tactical/strategic advantage. Conestoga Energy Holdings www.ConestogaEnergy.com 9

Year in Review - 2014 Record Setting Year $86 million net income $107 million EBITDA Distributions $36.5 million $651 per unit Fortress Balance Sheet $115 million Working Capital .28 Total Debt/Equity Conestoga Energy Holdings www.ConestogaEnergy.com 10

2015 Challenges and Opportunities Challenges Opportunities Lower oil prices Innovation $45 drop in Brent Crude $1.5MM revenue from Corn Oil Q1 $ .70 drop in RBOB Supply & Demand Opportunistic Growth Domestic Production outpaces Domestic demand Loss of Competitive Advantage Unknowns Grain cost basis Protein vs. Energy values Changes to RFS s Sorghum exports Conestoga Energy Holdings www.ConestogaEnergy.com 11

AUDITED FINANCIAL STATEMENTS

Conestoga Energy Holdings, LLC • Consolidated audit was performed as of December 31, 2014; Conestoga Energy Holdings, LLC and subsidiaries include: – Arkalon Ethanol, LLC, and subsidiaries – Bonanza BioEnergy, LLC – Conestoga Energy Partners, LLC, and subsidiaries 13

Conestoga Energy Holdings, LLC Condensed Balance Sheets ASSETS December 31, 2014 2013 Current Assets $ 144,956,471 $ 94,796,878 Property, Plant and Equipment, net 151,998,724 157,563,077 Other Assets 4,392,350 4,402,392 Total Assets $ 301,347,545 $ 256,762,347 LIABILITIES AND MEMBERS' EQUITY Current Liabilities $ 29,846,352 $ 42,927,248 Long-Term Debt, less current maturities 55,268,281 63,617,529 Other Noncurrent Liabilities 596,689 662,988 Members' Equity 215,636,223 149,554,582 Total Liabilities and Members' Equity $ 301,347,545 $ 256,762,347 14

Conestoga Energy Holdings, LLC Items of Significant Change – Balance Sheets 12/31/2014 12/31/2013 Change Cash $106.7M $59.4M Increased $47.3M Accounts Receivable $11.4M $15.8M Decreased $4.4M Inventories $16.6M $12.2M Increased $4.4M Working Capital $115.1M $51.9M Increased $63.2M Overall Debt $61.8M $85.0M Decreased $23.2M 15

Conestoga Energy Holdings, LLC Condensed Statements of Operations (Pro Forma) Change Year Ended December 31 2014 2013 Increase (Decrease) Net Sales $ 501,252,856 $ 554,074,428 $ (52,821,572) Cost of Sales 392,092,951 503,657,055 (111,564,104) Gross Profit (Loss) on Sales 109,159,905 50,417,373 58,742,532 Operating Expenses 22,847,198 15,472,723 7,374,475 Operating Income (Loss) 86,312,707 34,944,650 51,368,057 Other Income (Expense), net (630,016) (7,768,661) 7,138,645 Net Income (Loss) $ 85,682,691 $ 27,175,989 $ 58,506,702 16

Conestoga Energy Holdings, LLC Summary of Statement of Cash Flows 2014 2013 Cash Provided by Operations 98,500,000 55,600,000 Purchase of PPE 10,325,000 1,317,000 Debt Repayment 21,320,000 13,600,000 Distributions Paid in 2014 19,601,050 - Subsequent Distributions 36,446,000 * - * Subsequent distributions were distributions paid in the first quarter of 2015 for the 2014 income tax liability 17

Conestoga Energy Holdings, LLC Distributions for Tax Liability Total Taxable Income 91,800,412 Ordinary Income 84,123,629 IC DISC Income 7,676,783 Tax on Ordinary Income (Assuming 39.6% Rate) 33,312,957 Tax on IC DISC Income (23.8% Rate) 1,827,074 Total Tax on Earnings 35,140,031 Total Units 56,003 Total Tax per Unit 627 Total Distributions in 2015 for 2014 Tax 36,446,663 Distribution Per Unit 651 18

5 YEAR DEPRECIATION PROJECTION

Conestoga Energy Holdings, LLC 5 Year Depreciation Schedule Book Tax Difference 2015 17,017,667.72 2,391,760.51 14,625,907.21 2016 16,971,932.55 1,978,878.06 14,993,054.49 2017 16,947,945.05 1,633,721.47 15,314,223.58 2018 16,931,949.07 1,369,803.24 15,562,145.83 2019 16,901,958.94 1,216,018.28 15,685,940.66 20

BENEFIT OF ARKALON ICD, INC

Conestoga Energy Holdings, LLC Arkalon ICD, Inc. (IC-DISC) • Arkalon ICD, Inc. is an Interest Charge Domestic International Sales Corporation (IC-DISC). • An IC-DISC allows companies to change the character of income on foreign sales from ordinary income to capital gains income. Commissions $ 7,676,783 Estimated Tax Rate % Saved 15% Tax Savings 1,151,517 22

2015 Year to Date Results

1 st Quarter Operating Results Q1 2014 Q1 2015 Trend Revenue 138,778,716 91,908,525 COGS 97,604,847 84,462,185 Gross Profit 41,173,869 7,446,341 Total Fixed Costs 12,451,421 12,513,845 Net Income 28,043,087 (3,665,369) EBITDA 33,046,128 1,295,864 $1.5MM timing on hedging Compressed margins in market Conestoga Energy Holdings www.ConestogaEnergy.com 24

1 st Quarter 2015 Balance Sheet $36MM Distributions Q1 2014 Q1 2015 Trend Cash 72,413,461 60,515,627 Total Current 120,127,115 100,782,120 Total Assets 278,255,795 251,847,305 Current Liabilities 39,523,279 21,188,458 LT Liabilities 60,039,357 53,780,684 Equity 178,693,158 176,878,163 Total Liabilities plus Equity 278,255,795 251,847,305 Refi & CY Debt Reduction Conestoga Energy Holdings www.ConestogaEnergy.com 25

Balance Sheet Metrics Our balance sheet continues to remain strong. The major changes are the result of a combination of distributions and debt reduction. CEH Cash Working Capital 150,000,000 150,000,000 100,000,000 100,000,000 50,000,000 50,000,000 - - Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2014 2014 2014 2014 2015 2014 2014 2014 2014 2015 Cash Working Capital Debt / Gallon Debt / Equity 0.50 0.50 0.40 0.40 0.30 0.30 0.20 0.20 0.10 0.10 - - Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Debt / Gallon Debt / Equity Conestoga Energy Holdings www.ConestogaEnergy.com 26