General Info

Highwater Ethanol, LLC is a limited liability company taxed as a partnership, which means it is a "flow-through" entity for federal and state income tax purposes. The Company itself does not pay income tax at the company level, but the income or loss flows through to the owners of the membership units in proportion to their ownership interest. These amounts are reported to members on tax Form K-1, which will be mailed the first half of February. The portion of company income or loss reflected on your K-1 form must be reported on your income tax return. Please remember that although our fiscal year ends October 31st, our tax reporting year ends December 31st. Since we are aware that the income or loss reported to you could impact your tax planning and other financial decisions prior to year end, we are providing this ESTIMATE of company taxable income for the calendar year ending December 31, 2010. This ESTIMATE is not a guarantee of future results; it is only our prediction and involves numerous assumptions, risks and uncertainties. Our actual results may differ. We recommend you consult your tax advisor regarding this tax memo and any implications it may have on your individual tax and financial situation. This ESTIMATE of taxable income/loss allocation does NOT represent the amount of the cash distribution you can expect. We have capital requirements, operational expenses and loan covenants that limit the amount of cash that will be available for distribution to members. General Mission: To successfully build and operate an ethanol facility, which will be profitable to our investor owners, while contributing to the economic growth in the region. Statements made in this web publication, other than statements of historical fact, about Highwater Ethanol, LLC's future production, operations or other future prospects are forward-looking statements and are subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. Such factors include, among others, risks associated with the ethanol industry generally, the ability of the plant to timely meet all requirements of financing and construction of the plant, and other risk factors as described in Highwater Ethanol, LLC's prospectus and other filings with the Securities and Exchange Commission. Many of these factors are beyond Highwater Ethanol, LLC's ability to control or predict. Highwater Ethanol, LLC disclaims any intent or obligation to update its forward-looking statements, whether as a result of receiving new information, the occurrence of future events, or otherwise.