Cardinal Ethanol, LLCAnnual MeetingFebruary 14, 2017

http://ethanolrfa.org/consumers/why-is-ethanol-important/

Why Ethanol Is Important

Welcome & Call to Order

Mr. Rob DavisChairman of the Board

This presentation contains forward-looking statements within themeaning of Section 27A of the Securities Act of 1933 and Section 21Eof the Securities Exchange Act of 1934. Such statements can beidentified by use of forward-looking terminology such as “project,”“may,” “expect,” “estimate,” “anticipate” or “continue” or thenegative thereof or other variations thereon or comparableterminology. You are cautioned that there are certain risks anduncertainties that could cause actual events or results to differmaterially from those referred to in such forward-looking statements.These risks and uncertainties are described in our filings with theSecurities and Exchange Commission.

Disclaimer

• In fairness to all participants and in the interest of an orderly and constructive meeting, the following rules of conduct will be followed:

• No cameras, audio or video recording equipment.• The meeting will follow the schedule set forth on the Agenda.• Only unit holders of record as of December 28, 2016 or their duly

authorized proxies are entitled to vote or to address the meeting.• No proposals or nominations were timely submitted.• You need not vote at this meeting if you have already voted by

proxy.• All questions and comments must be directed to the Chairman. • Each speaker is limited to a total of three (3) questions or comments

of no more than three (3) minutes each.

Rules of Conduct

Agenda Welcome, Call to Order, Why Ethanol is Important Rob Davis

Rules of Conduct, Introduce Guests Rob Davis

Minutes of February 2016 Annual Meeting   (Needs Approval Vote) Tom Chronister

Election of Directors, Final Voting, Close Voting Rob Davis

Renewable Fuels Standard Rob Davis

Chairman Comments Rob Davis

Review of Financial Statements FY 2016 & Q1 2017 Bob Baker

CEO Comments Jeff Painter

Cardinal Q&A Rob Davis

Brian Jennings from ACE Jeff Painter

ACE Q&A Brian Jennings

Election Results Rob Davis

Adjourn Cardinal Business Meeting Rob Davis

Minutes of 2016 Annual Meeting

Mr. Tom ChronisterSecretary of the Board

Elections of Directors

Mr. Rob DavisChairman of the Board

Renewable Fuels Standard

https://www.youtube.com/watch?v=CWUpZDVSasM

Cardinal Ethanol Story2008 through 2016

0.00

20,000,000.00

40,000,000.00

60,000,000.00

80,000,000.00

100,000,000.00

120,000,000.00

140,000,000.00

2008 2009 2010 2011 2012 2013 2014 2015 2016

Ethanol Gallons Produced

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

900.00

1,000.00

2008 2009 2010 2011 2012 2013 2014 2015 2016

Cumulative Ethanol Gallons

Reach 1 Billion Gallons Sold in 2017

2.74

2.76

2.78

2.80

2.82

2.84

2.86

2.88

2.90

2010 2011 2012 2013 2014 2015 2016

Average Ethanol Yield Per Bushel Ground

0.00

500,000.00

1,000,000.00

1,500,000.00

2,000,000.00

2,500,000.00

3,000,000.00

3,500,000.00

4,000,000.00

4,500,000.00

5,000,000.00

2008 2009 2010 2011 2012 2013 2014 2015 2016

Corn Oil Galllons Produced

0.00

5,000,000.00

10,000,000.00

15,000,000.00

20,000,000.00

25,000,000.00

30,000,000.00

35,000,000.00

40,000,000.00

45,000,000.00

2008 2009 2010 2011 2012 2013 2014 2015 2016

Corn Bushels Ground

Capital Investments – Your $ at Work2008/2009 $169.0 million Built Plant 2010 $ 3.8 million 1st Grain Bin; Bin sweeps, Pavilion 2011 $ 0.7 million Misc Improvements2012 $ 1.2 million Corn Oil Tank; Alfa Laval Exch; CIP2013 $ 0.9 million Hammer Mill Upgrade2014 $ 4.0 million 1 Grain Bin2015 $ 10.5 million Grain Dryer, 2 Grain Bins, Pits2016 $ 6.9 million 2nd Boiler; Hammer Mills; Sieve Bottles; 2017 proj $ 15.0 million Soybeans; 4th Rail Loop; Fermenter

TOTAL $212 million

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

2008 2009 2010 2011 2012 2013 2014 2015 2016

Unit Value

Book

Average value traded on FNC Agstock

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

2008 2009 2010 2011 2012 2013 2014 2015 2016

Cumulative Distributions

Total

Net

$11,149

$6,865

Mr. Robert Baker, CPAFinance Committee Chairman

FY16 & 1st Qrt FY 17 Results

Fiscal Year Ended 9/30/2016Net Revenue $ 222,895,000Net Income $ 13,522,000 or $926 per unitDistributions Paid $ 1,630 per unitEthanol Produced 119,815,000 gallons

Fiscal Quarter Ended 12/31/2016Net Revenue $ 58,055,000Net Income $ 7,298,000 or $500 per unitDistributions Paid $ 600 per unitEthanol Produced 30,581,000 gallons

Summary of Results

Income StatementsFor The Fiscal Year Ended

Statement of Operations Data: 9/30/2016 9/30/2015Revenues $222,895,449 $240,695,293Cost Goods Sold 204,014,877 197,305,291Gross Profit 18,880,572 43,390,002

Operating Expenses 5,233,634 4,714,891Operating Income (Loss) 13,646,938 38,675,111

Other Income (Expense) Incl Interest (125,143) 46,706Net Income (Loss) $13,521,795 $38,721,817

Net Income (Loss) Per Unit $925.77 $2,651.09

Cash Distributions Per Unit $1,630 $3,500

Income StatementsFor The Fiscal Quarter EndedStatement of Operations Data: 12/31/2016 12/31/2015Revenues $58,054,764 $57,545,036Cost Goods Sold 49,450,176 54,394,074Gross Profit 8,604,588 3,150,962

Operating Expenses 1,186,757 1,369,605Operating Income (Loss) 7,417,831 1,781,357

Other Income (Expense) Incl Interest (119,794) (37,223)Net Income (Loss) $7,298,037 $1,744,134

Net Income (Loss) Per Unit $499.66 $119.41

Cash Distributions Per Unit $600 $500

How Does This Affect The Members’ Taxes?

Quarter ended 12/31/13 (1,744,134)Book net income 1/1/15-12/31/15 $19,075,698 $1,306

Total Permanent Differences 61,758 $4

Temporary Differences Depreciation/Recapture (593,152) Unrealized Loss on Hedging 637,155 Other Temporary Differences (8,318)Total Temporary Differences 35,685 $2Taxable Income $19,173,141 $1,313

Taxable (Income) Deductions Passed Thru Separately Interest Income (250) Rental Real Estate Income (10,300) ($1) Other 0 $0 Total Taxable (Income) Deductions Passed Thru Sep (10,550)Ordinary Income Passed Through on K-1's $19,162,591 $1,312

Domestic Production Activities Deduction Form 8903

A non-cash incentive for domestic manufacturing

The amount is the lesser of:

9% of qualified production activities ($93 per Unit)

50 % of wages paid ($124 per Unit)

Individual member’s net income Plus a pass through of a DPAD from Cooperative – CHS of $68/ Unit

The Total deduction is $161 per unit ($93+$68) assuming no income limitations.

Subject to limitation based on members’ own tax situation

Revenue Sources As A Percent of Total Revenues

Balance SheetsAs Of

9/30/2016 9/30/2015

Current Assets $48,530,000 $48,647,000

Net Property and Equipment 104,461,000 107,998,000

Other Assets 938,000 823,000

$153,929,000 $157,468,000

Current Liabilities 11,677,000 $11,997,000

Long-Term Debt 11,932,000 4,865,000

Other Liabilities 0 0

Members' Equity 130,320,000 $140,606,000

$153,929,000 $157,468,000

Balance SheetsAs OfBalance Sheet Data: 12/31/2016 12/31/2015

Current Assets $54,821,000 $55,516,000

Net Property and Equipment 104,840,000 107,627,000

Other Assets 977,000 823,000

$160,638,000 $163,966,000

Current Liabilities $20,583,000 $19,962,000

Long-Term Debt 11,200,000 8,957,000

Other Liabilities 0 0

Members' Equity 128,855,000 $135,047,000

$160,638,000 $163,966,000

$4,559 

$5,864 

$7,690  $7,483 

$9,002 

$10,061 

$9,627 

$8,922 

$0  $60  $60 

$490 $872 

$5,419 

$8,919 

$10,549 

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

9/30/2009 9/30/2010 9/30/2011 9/30/2012 9/30/2013 9/30/2014 9/30/2015 9/30/2016

Members Equity ‐ Book Value Per UnitInvestors (Equity) Cumulative Cash Distributions Per Unit

Statements of Cash FlowsFYE 9/30/2016 FQE 12/31/16

Net cash provided (used) by operations 22,958,196$ 11,576,814$

Investing ActivitiesPurchases of Property & Equipment (6,931,007)$ (2,356,378)$ Net cash provided (used) by investing activities (6,931,007)$ (2,356,378)$

Financing ActivitiesProceeds From Long Term Debt 10,134,764$ -$ Payments on Long TermDebt (179,647)$ (713,897)$ Distributions To Members (23,807,781)$ (8,763,600)$ Net cash provided (used) by financing activities (13,852,664)$ (9,477,497)$

Net increase/(decrease) in cash 2,174,525$ (257,061)$ Cash at beginning of period 20,827,614$ 23,002,139$ Cash at end of period 23,002,139$ 22,745,078$

How Was Cash Flow Used?Fiscal Year Ended 9/30/2016Cash At Start Of Year $ 20,828,000Operating Cash Flow $ 22,958,000 Long Term Borrowing $ 10,135,000Total Available For Use $ 53,921,000

12.85%

44.15%

42.66%

Capital Expenditures Distributions to Members Retained Cash

How Was Cash Flow Used?Fiscal Quarter Ended 12/31/2016Cash At Start Of Quarter $23,002,000Operating Cash Flow $11,577,000Total Available For Use $34,579,000

Approx. $7 Million was retained to pay deferred payments to farmers on January 3, 2017

6.81%

25.34%

65.78%

Capital Expenditures Distributions to Members Retained Cash

Capital Projects Completed in FY 2016

Capital Update

Project Cost

Grain Bins $ 5,233,400

Grain Dryer $ 3,951,400

New Hammermills $ 2,019,000

New Sieve Bottles $ 1,537,400

New Boiler $ 2,614,000

New Slurry Heater $ 30,900

Miscellaneous Piping Debottlenecking $ 284,000

Other, including interest capitalized $ 217,600

$ 15,887,700

Major Capital Projects Planned For FY 2017

Capital Update

Project Cost

Grain Load Out Facility $ 9,274,000

New Fermenter $ 2,855,400

Additional Cooling Tower Cell $ 1,045,000

DDGS Dryer Reinforcement $ 600,000

Beer Degasser $ 455,400

Roadway Extension $ 500,000

Other Piping and Conveyor Improvements $ 240,000

(Grain Load Out Facility will be financed with long term debt.)

$ 14,969,800

$XXX per unit for members of record today.

February 2017 Distribution

CEO Comments

Mr. Jeff PainterCEO

Bins

Hammermills and Sieves

Cardinal Q&A

Mr. Rob DavisChairman of the Board

Guest Speaker

Mr. Brian JenningsACE

https://ethanol.org/people/video-gallery

Election Results

Mr. Rob DavisChairman of the Board