(4) Employee Compensation Plans

In September 2010, USPB’s Board of Directors approved a management phantom unit plan and subsequently awarded phantom units in fiscal years 2010 and 2013. As of SeptemberJune 25, 20212022 and December 26, 2020,25, 2021, the Company had accrued $7.88.8 million and $5.37.9 million, respectively, for the management phantom awards. The accrued amounts are included in Accrued compensation and benefits and Other liabilities on the balance sheet. The table below summarizes the current and long-term portions of the accrued amounts:

USPB provides its employees the opportunity to earn cash incentives and bonuses. As of SeptemberJune 25, 20212022 and December 26, 2020,25, 2021, the Company had accrued $1.00.7 million and $1.4 million, respectively, for the cash incentive and bonus plans. The accrued amounts are included in Accrued compensation and benefits on the balance sheet.

(5) Earnings Per Unit

Under the LLC structure, earnings of the Company are to be allocated to unitholders based on their proportionate share of underlying equity. Earnings Per Unit (EPU) has been presented in the accompanying Statements of Operations and in the table that follows.

Basic EPU excludes dilution and is computed by first allocating a portion of USPB’s net income or net loss to Class A units and the remainder is allocated to Class B units. For the thirteen and thirty-ninetwenty-six week periods ended SeptemberJune 25, 20212022 and SeptemberJune 26, 2020,2021, 10% of USPB’s net income was allocated to the Class A’s and 90% to the Class B’s. The net income allocated to the Class A and Class B units were then divided by the weighted-average number of Class A and Class B units outstanding for the period to determine the basic EPU for each respective class of unit.

Diluted EPU reflects the potential dilution that could occur to the extent that any outstanding dilutive Class A or Class B units were exercised. There are no potentially dilutive Class A or Class B units outstanding.

(6) Investment in National Beef Packing Company, LLC

USPB’s 15.0729% investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control. The table below summarizes the changes to USPB’s investment in NBP for the thirty-ninethirteen and twenty-six week periods ended SeptemberJune 25, 20212022 and SeptemberJune 26, 20202021 (thousands of dollars):

The difference between USPB’s percentage ownership share of NBP earnings and the recorded amount of Equity in income of National Beef Packing Company, LLC is attributable to the amortization of a basis difference related to the purchase accounting for NBP’s acquisition of Ohio Beef in 2019.

Below is a summary of the results of operations for NBP for the thirteen-weekthirteen and thirty-ninetwenty-six week periods ended SeptemberJune 25, 20212022 and SeptemberJune 26, 20202021 (thousands of dollars):

(7)Income Taxes

Effective August 29, 2004, the Company converted to an LLC, and under this structure, taxes are not assessed at the Company level as the results of operations are included in the taxable income of the individual members.

Although income taxes are assessed to the individual members, USPB is required to withhold state income taxes from the cash distributions it makes to it members. As of SeptemberJune 25, 20212022 and December 26, 2020,25, 2021, Other accrued expenses and liabilities on the Company’s balance sheet reflected state taxes payable of $0.71.5 million and $0.51.0 million, respectively.

(8) Long-term Debt and Loan Agreements

On July 13, 2020, USPB, and CoBank, ACB (“CoBank”), entered into a Credit Agreement, Amended and Restated Revolving Term Promissory Note (“Promissory Note”), and an Affirmation of Pledge Agreement.

The Credit Agreement and Promissory Note provide for a $1.0 million Revolving Term Commitment. That commitment carries a term of five years, maturing on June 30, 2025. All of the $1.0million revolving credit commitment was available as of SeptemberJune 25, 2021.2022. The Promissory Note defines Interest as equal to the One-Month LIBOR Index Rate or if LIBOR quotes are no longer available, CoBank will replace the LIBOR Index Rate with a replacement benchmark rate. The Affirmation of Pledge Agreement provides CoBank with a first-priority security interest in USPB’s Membership Interests in, and Distributions from, National Beef Packing Company, LLC.

(9) Members’ Capital

The following table represents a reconciliation of Members’ Capital for the thirty-ninethirteen and twenty-six week periods ended SeptemberJune 25, 20212022 and SeptemberJune 26, 20202021 (unaudited) (thousands of dollars).

(10) Legal Proceedings

USPB is not currently involved in any litigation. However, because its ownership interest in NBP is USPB’s largest asset and because of the cattle procurement and distribution relationship between USPB and NBP, litigation involving NBP may impact USPB.

NBP is a defendant in four class action antitrust lawsuits and one single plaintiff lawsuit in the United States District Court, Minnesota District, allegingand seven single plaintiff antitrust lawsuits in United States District Court, Minnesota District, the United States District Court, Southern District of Florida, the United States District Court, Connecticut, the United States District Court, Northern District of New York, the United States District Court, Northern District of Illinois, and the United States District Court, Southern District of Texas. In addition, NBP is a defendant in class action antitrust lawsuits in the Supreme Court of British Columbia and the Superior Court of Quebec, Montreal District. These lawsuits all allege that itNBP violated the Sherman Antitrust Act or the Canadian Competition Act and some of the lawsuits allege that NBP violated the Packers and Stockyards Act, the Commodity Exchange Act, and various state laws (the “Antitrust Cases”).or provincial laws. The class action Antitrust Casesclass-action cases are entitled In re Cattle Antitrust Litigation,, which was filed originally on April 23, 2019; Peterson et al. v. JBS USA Food Company Holdings, et al.al., which was filed originally on April 26, 2019; In re DPP Beef Litigation, which was filed originally on April 26, 2019; and Erbert & Gerbert’s, Inc. v. JBS USA Food Company Holdings, et al., which was filed originally on June 18, 2020.2020; Giang Bui v. Cargill, Incorporated, et al. which was filed originally on February 18, 2022; and Sylvie De Bellefeuille v. Cargill, Inc. et al., which was filed originally on March 24, 2022. The single-plaintiff Antitrust Case isCases are entitled Winn-Dixie Stores, Inc. and Bi-Lo Holding, LLC v. Cargill, Inc., et al., which was filed on August 2, 2021.2021; Cheney Brothers, Inc. v. Cargill, Inc., et al., which was filed on January 31, 2022; Subway v. Cargill, Inc. et al., which was filed on February 22, 2022; Amory Investments LLC v. Cargill, Inc. et al., which was filed originally on March 8, 2022; Associated Grocers, Inc., et al. v. Cargill, Inc., et al., which was filed originally on May 12, 2022; Giant Eagle, Inc. v. Cargill, Inc., et al., which was filed originally on June 8, 2022; and Sysco Corporation v. Cargill, Inc., et al., which was filed originally on June 24, 2022. The plaintiffs in the Antitrust Casesthese cases seek treble damages and other relief under various laws including the Sherman Antitrust Act, the Canadian Competition Act, the Packers & Stockyards Act, and/or the Commodities Exchange Act and attorneys’ fees.  NBP is also a defendant in two class action lawsuits filed on January 7, 2020, alleging that it misrepresented the origin of its products in violation of the New Mexico Unfair Practices Act (the “Labelling Cases”).  The Labelling Cases are entitled Thornton v. Tyson Foods, Inc., et al., filed in the New Mexico Second Judicial District Court, Bernalillo County,various state and Lucero v. Tyson Foods, et al., filed in the New Mexico Thirteenth Judicial District Court, Sandoval County.  The Labelling Cases were subsequently removed to the United States District Court, New Mexico District.  The plaintiffs in the Labelling Cases seek treble damages and other reliefprovincial laws and attorneys’ fees. NBP believes it has meritorious defenses to the claims in the Antitrust Cases and the Labelling Casesthese cases and intends to defend these cases vigorously, although therethem vigorously. There can be no assuranceassurances, however, as to the outcome of these casesmatters or the impact on NBP’s consolidated financial position, results of operations and cash flows.

In addition to the antitrust litigation, NBP is subject to investigationsan investigation by the United States Department of Justice and approximately 30 state attorneys general regarding industry cattle procurement practices. NBP is cooperating with these investigations and is working with the Department of Justice and the relevant states to provide information requested in connection with the investigations. NBP believes it has meritorious defenses to any potential claims that might arise out of these government investigations, although there can be no assurance as to the outcome of these investigations or the impact on NBP’s consolidated financial position, results of operations and cash flows.

NBP is also subject to an investigation by the U.S. House of Representatives Select Subcommittee on the Coronavirus (the “Subcommittee”) in the impact of the coronavirus pandemic on workers in the meatpacking industry.  As part of this investigation, NBP received an information request on September 15, 2021.  NBP is cooperating with this investigation and is working with the Subcommittee to provide the requested information.

NBP is a party to various other lawsuits and claims arising out of the operation of its business. Management believes the ultimate resolution of such matters should not have a material adverse effect on NPB’sNBP’s financial condition, results of operations or liquidity.

USPB is not able to assess what impact, if any, the actions described above will have on NBP or USPB.

(11) Subsequent Events

USPB has evaluated subsequent events through the date the financial statements were issued and determined there were no such events to report.

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

The following discussion should be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this report.

Disclosure Regarding Forward-Looking Statements

This report contains “forward-looking statements,” which are subject to a number of risks and uncertainties, many of which are beyond our control.  Forward-looking statements are typically identified by the words “believe”, “expect”, “anticipate”, “intend”, “estimate”, and similar expressions.  Actual results could differ materially from those contemplated by these forward-looking statements as a result of many factors, including economic conditions generally and in our principal markets, the availability and prices of live cattle and commodities, food safety, livestock disease, including the identification of cattle with bovine spongiform encephalopathy (BSE), competitive practices and consolidation in the cattle production and processing industries, actions of domestic or foreign governments, hedging risk, changes in interest rates and foreign currency exchange rates, consumer demand and preferences, the cost of compliance with environmental and health laws, loss of key customers, loss of key employees, labor relations, and consolidation among our customers.

In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking information contained in this report will in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors.  Please review Part II. Item 1A. Risk Factors, included in this report, for other important factors that could cause actual results to differ materially from those in any such forward-looking statements.

Investment in National Beef Packing Company, LLC

NBP processes and markets a comprehensive line of fresh beef, case-ready products, and beef by-products for domestic and international markets.  MostThe largest share of NBP’s revenue is generated from the sale of boxed beef and beef by-products. 

NBP has two beef slaughter and processing facilities located in southwest Kansas and a third located in central Iowa.  In addition, NBP operates a leather tannery, three case-ready manufacturing facilities, a fresh and frozen hamburger manufacturing facility and a transportation and logistics company that provides refrigerated and livestock truckingtransportation across the U.S.  

NBP’s profitability typically fluctuates seasonally as well as cyclically, based on the availability of fed cattle and the demand for beef and beef by-products.  Its profitability is dependent, in large part, on the spread between its cost for live cattle, the primary raw material for its business, and the value received from selling boxed beef and other products coupled with its overall volume. NBP operates in a large and fast-moving commodity market and does not have much influence over the price it pays for cattle or the selling price it receives for the products it produces. 

Revenues in the thirteen-week period ended SeptemberJune 25, 20212022 increased 43.2%approximately 0.1% in comparison to the same period in 2020, primarily due to increased selling prices for boxed beef and beef by-products.2021. Cost of salesSales increased 22.5%by approximately 14.9% for the thirteen-week period ended SeptemberJune 25, 2021,2022, as compared to the same period in 2020,2021, primarily due to higher expendituresfed cattle prices, as well as increased costs for cattle resulting from the increasedlabor, packaging, and other inputs.  Lower per unit costs.  Selling prices increased more than the offsetting cost of cattle whichbeef processing margins, along with a slight decrease in volume, led to an increasea decrease in overall profitability in the 20212022 period, as compared to the 2020 period.

Revenues in the thirty-nine week period ended September 25, 2021 increased 19.3% in comparison to the thirty-nine week period in 2020, primarily due to increased selling prices for boxed beef and beef by-products along with a modest increase in the volume of products sold.  Cost of sales increased 11.3% for the thirty-nine week period ended September 25, 2021, as compared to the same period in 2020, primarily due to higher expenditures for cattle resulting from increased per unit costs.  Increased selling prices, along with a modest increase in volume, offset, in part, by higher cost of sales led to an increase in overall profitability in the 2021 period, as compared to the 2020 period.

Operating losses, diminished cash flows, economicRevenues in the twenty-six-week period ended June 25, 2022 increased approximately 13.5% in comparison to the same period in 2021. Cost of Sales increased by approximately 20.3% for the twenty-six-week period ended June 25, 2022, as compared to the same period in 2021, primarily due to higher fed cattle prices, as well as increased costs for labor, packaging, and industry events, pandemics, andother inputs.  Lower per unit beef processing margins, along with a variety of other factors may resultslight decrease in volume, led to a decrease in overall profitability in the value of the investment, which is other than temporary. Such potential decreases in value, if deemed other than temporary, will cause the Company to record an impairment charge, which may have an impact on the trading values of USPB’s Class A and Class B units. However, NBP’s plants are operational at the present time and its results of operations are profitable,2022 period, as reflected in Note 6compared to the financial statements. As a result, we believe the fair value of our investment in NBP exceeds the carrying value.2021 period.

On June 10, 2019, USPB and NBP entered into the First Amended and Restated Cattle Purchase and Sale Agreement (A&R Agreement) with USPB. The terms and conditions of the A&R Agreement are substantially the same as those of the Cattle Purchase and Sale Agreement dated December 30, 2011. Per the terms and conditions of the A&R Agreement, NBP is required to purchase through USPB from its owners and associates, and USPB is required to sell and deliver from its owners and associates to NBP, a base amount of 735,385 (subject to adjustment) head of cattle per year with prices based on those published by the U.S. Department of Agriculture, subject to adjustments for cattle performance.  NBP obtained approximately 23% and 24%25% of its cattle requirements under this agreement during the thirty-nine week periodstwenty-six weeks ended SeptemberJune 25, 20212022 and SeptemberJune 26, 2020, respectively.2021.

USPB Results of Operations

Thirteen-weeks ended SeptemberJune 25, 20212022 compared to thirteen-weeks ended SeptemberJune 26, 20202021

Net Sales. There were no Net Sales in the thirteen-week periods ended SeptemberJune 25, 20212022 and SeptemberJune 26, 2020.2021.  

Cost of Sales. There were no Cost of Sales in the thirteen-week periods ended SeptemberJune 25, 20212022 and SeptemberJune 26, 2020.2021.  

Selling, General and Administrative Expenses. Selling, general and administrative expenses were approximately $2.7$1.9 million for the thirteen-weeks ended SeptemberJune 25, 20212022 compared to approximately $4.0$1.1 million for the thirteen-weeks ended SeptemberJune 26, 2020, a decrease2021, an increase of approximately $1.3$0.8 million. The decreaseincrease was primarily the result of lowerhigher phantom plan expenses, which were down due to a smaller increase in the Class A and Class B unit transfer prices compared to the prior year.expenses.

Operating Loss. Operating loss was approximately $2.7$1.9 million for the thirteen-weeks ended SeptemberJune 25, 20212022 compared to approximately $4.0$1.1 million for the thirteen-weeks ended SeptemberJune 26, 2020.2021.  

Equity in Net Income of National Beef Packing Company, LLC. Equity in NBP net income was $123.5$52.8 million for the thirteen-weeks ended SeptemberJune 25, 20212022 compared to $43.0$103.2 million for the thirteen-weeks ended SeptemberJune 26, 2020.2021. The increasedecrease in fiscal year 20212022 is primarily due to higher gross margins at NBP. USPB carries its 15.0729% investment in NBP under the equity method of accounting.

Other, net. Other income was $0.2 million and approximately $0.3 million for the thirteen-week periods ended September 25, 2021 and September 26, 2020, respectively.

Net income. Net income was $121.0 million and $39.3 million for the thirteen-week periods ended September 25, 2021 and September 26, 2020, respectively.

Thirty-nine weeks ended September 25, 2021 compared to thirty-nine weeks ended September 26, 2020

Net Sales. There were no Net Sales in the thirty-nine week periods ended September 25, 2021 and September 26, 2020.  

Cost of Sales. There were no Cost of Sales in the thirty-nine week periods ended September 25, 2021 and September 26, 2020.  

Selling, General and Administrative Expenses. Selling, general and administrative expenses were approximately $5.2 million for the thirty-nine weeks ended September 25, 2021 compared to approximately $6.4 million for the thirty-nine weeks ended September 26, 2020, a decrease of approximately $1.2 million. The decrease was primarily the result of lower phantom plan compensation and non-compete expenses. The decrease in phantom plan expenses, was due to a smaller increase in the Class A and Class B unit transfer prices compared to the prior year.

Operating Loss. Operating loss was approximately $5.2 million for the thirty-nine weeks ended September 25, 2021 compared to approximately $6.4 million for the thirty-nine weeks ended September 26, 2020.  

Equity in Net Income of National Beef Packing Company, LLC. Equity in NBP net income was $263.2 million for the thirty-nine weeks ended September 25, 2021 compared to $158.5 million for the thirty-nine weeks ended September 26, 2020. The increase in fiscal year 2021 is primarily due to higher gross margins at NBP. USPB carries its 15.0729% investment in NBP under the equity method of accounting.

Interest Income. Interest income was approximately $0.0 million for the thirty-nine weeksthirteen-weeks ended SeptemberJune 25, 2021 compared to $0.2 million for the thirty-nine weeks ended September2022 and June 26, 2020.2021.

Other, net. Other incomeloss was $0.4 million and $0.4$0.2 million for the thirty-nine week periodsthirteen-week period ended SeptemberJune 25, 2022 compared to other income of $0.2 million for the thirteen-week period ended June 26, 2021, respectively. The change from the prior period was due to higher state and September 26, 2020, respectively.local taxes and lower delivery right lease income.

Net income. Net income was $258.5$50.7 million and $152.7$102.3 million for the thirty-nine weekthirteen-week periods ended SeptemberJune 25, 2022 and June 26, 2021, respectively.

Twenty-six weeks ended June 25, 2022 compared to twenty-six weeks ended June 26, 2021

Net Sales. There were no Net Sales in the twenty-six weeks periods ended June 25, 2022 and SeptemberJune 26, 2020,2021.  

Cost of Sales. There were no Cost of Sales in the twenty-six weeks periods ended June 25, 2022 and June 26, 2021.  

Selling, General and Administrative Expenses. Selling, general and administrative expenses were approximately $3.6 million for the twenty-six weeks ended June 25, 2022 compared to approximately $2.5 million for the twenty-six weeks ended June 26, 2021, an increase of approximately $1.1 million. The increase was primarily the result of higher phantom plan expenses.

Operating Loss. Operating loss was approximately $3.6 million for the twenty-six weeks ended June 25, 2022 compared to approximately $2.6 million for the twenty-six weeks ended June 26, 2021.  

Equity in Net Income of National Beef Packing Company, LLC. Equity in NBP net income was $115.4 million for the twenty-six weeks ended June 25, 2022 compared to $139.8 million for the twenty-six weeks ended June 26, 2021. The decrease in fiscal year 2022 is primarily due to lower gross margins at NBP. USPB carries its 15.0729% investment in NBP under the equity method of accounting.

Interest Income. Interest income was $0.0 million for the twenty-six weeks ended June 25, 2022 and June 26, 2021.

Other, net. Other loss was $0.0 million compared to other income of $0.3 million for the twenty-six weeks periods ended June 25, 2022 and June 26, 2021, respectively. The change from the prior period was due to higher state and local taxes and lower delivery right lease income.

Net income. Net income was $111.8 million and $137.5 million for the twenty-six weeks periods ended June 25, 2022 and June 26, 2021, respectively.

Liquidity and Capital Resources

As of SeptemberJune 25, 2021,2022, we had net working capital (the excess of current assets over current liabilities) of approximately $86.4$73.8 million, which included cash and cash equivalents of $89.2$76.0 million. As of December 26, 2020,25, 2021, we had net working capital of approximately $74.3$126.4 million, which included cash and cash equivalents of $76.8$130.4 million. Our primary sources of liquidity for the first two quarters of fiscal year 2022 and fiscal year 2021 were cash and available borrowings under the Master Loan Agreement with CoBank.

As of June 25, 2022, USPB had no long-term debt outstanding. We had a $1.0 million revolving term credit commitment with CoBank, all of which was available. USPB was in compliance with the financial covenant under its Master Loan Agreement as of June 25, 2022.

We believe our cash will be sufficient to support our cash needs for the foreseeable future. For a review of our obligations that affect liquidity, please see the “Cash Payment Obligations” table in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for fiscal year 2021.

Operating Activities

Net cash provided by operating activities in the twenty-six weeks ended June 25, 2022 was approximately $131.4 million compared to approximately $78.7 million in the twenty-six weeks ended June 26, 2021.  The $52.7 million change was primarily due to a $53.1 million increase in distributions received from National Beef.

Investing Activities

Net cash used in investing activities in the twenty-six weeks ended June 25, 2022 was approximately $0.1 million compared to $0.0 million in the twenty-six weeks ended June 26, 2021.  The increase was due to the purchase of a new company vehicle.

CreditFinancing Activities

Net cash used in financing activities was approximately $185.7 million in the twenty-six weeks ended June 25, 2022 compared to approximately $93.0 million in the twenty-six weeks ended June 26, 2021 due to an increased level of member distributions made in the twenty-six weeks of 2022.

Master Loan Agreement

On July 13, 2020, USPB, and CoBank, ACB (“CoBank”), entered into a Credit Agreement, Amended and Restated Revolving Term Promissory Note (“Promissory Note”), and an Affirmation of Pledge Agreement.

The Credit Agreement and Promissory Note provide for a $1.0 million Revolving Term Commitment. The commitment carries a term of five years, maturing on June 30, 2025. All of the $1.0 million revolving credit commitment was available as of SeptemberJune 25, 2021.2022. The Promissory Note defines Interest as equal to the One-Month LIBOR Index Rate or if LIBOR quotes are no longer available, CoBank will replace the LIBOR Index Rate with a replacement benchmark rate. The Affirmation of Pledge Agreement provides CoBank with a first-priority security interest in USPB’s Membership Interests in, and Distributions from, National Beef Packing Company, LLC.

Our primary sources of liquidity for the first three quarters of fiscal year 2021 and fiscal year 2020 were cash and available borrowings under the Credit Agreement with CoBank.

As of September 25, 2021, USPB had no long-term debt outstanding. We had a $1.0 million revolving term credit commitment with CoBank, all of which was available. USPB was in compliance with the financial covenant under its Credit Agreement as of September 25, 2021.

We believe our cash will be sufficient to support our cash needs for the foreseeable future. For a review of our obligations that affect liquidity, please see the “Cash Payment Obligations” table in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for fiscal year 2020.

Operating Activities

Net cash provided by operating activities in the thirty-nine weeks ended September 25, 2021 was approximately $203.5 million compared to approximately $121.7 million in the thirty-nine weeks ended September 26, 2020.  The $81.8 million change was primarily due to a $80.9 million increase in distributions received from NBP.

Investing Activities

Net cash used in investing activities in the thirty-nine week periods ended September 25, 2021 was $0.0 million compared to less than $0.1 million in the thirty-nine week period ended September 26, 2020.

Financing Activities

Net cash used in financing activities was $191.1 million in the thirty-nine weeks ended September 25, 2021 compared to $113.2 million in the thirty-nine weeks ended September 26, 2020 due to an increase in member distributions made in the 2021 period.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The principal market risks affecting USPB’s business are exposure to interest rate risk, to the extent the Company has debt outstanding. As of SeptemberJune 25, 2021,2022, the Company did not have any outstanding debt.

Item 4. Controls and Procedures.

We maintain a system of controls and procedures designed to provide reasonable assurance as to the reliability of the Financial Statements and other disclosures included in this report, as well as to safeguard assets from unauthorized use or disposition. We evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e) under supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in alerting them, in a timely manner, to material information required to be included in our periodic Securities and Exchange Commission filings. There have been no changes in our internal controls over financial reporting during the thirty-ninetwenty-six weeks ended SeptemberJune 25, 20212022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

USPB is not currently involved in any litigation. However, because its ownership interest in NBP is USPB’s largest asset and because of the cattle procurement and distribution relationship between USPB and NBP, litigation involving NBP may impact USPB.

NBP is a defendant in four class action antitrust lawsuits and one single plaintiff lawsuit in the United States District Court, Minnesota District, allegingand seven single plaintiff antitrust lawsuits in United States District Court, Minnesota District, the United States District Court, Southern District of Florida, the United States District Court, Connecticut, the United States District Court, Northern District of New York, the United States District Court, Northern District of Illinois, and the United States District Court, Southern District of Texas. In addition, NBP is a defendant in class action antitrust lawsuits in the Supreme Court of British Columbia and the Superior Court of Quebec, Montreal District. These lawsuits all allege that itNBP violated the Sherman Antitrust Act or the Canadian Competition Act and some of the lawsuits allege that NBP violated the Packers and Stockyards Act, the Commodity Exchange Act, and various state laws (the “Antitrust Cases”).or provincial laws. The class action Antitrust Casesclass-action cases are entitled In re Cattle Antitrust Litigation,, which was filed originally on April 23, 2019; Peterson et al. v. JBS USA Food Company Holdings, et al.al., which was filed originally on April 26, 2019; In re DPP Beef Litigation, which was filed originally on April 26, 2019; and Erbert & Gerbert’s, Inc. v. JBS USA Food Company Holdings, et al., which was filed originally on June 18, 2020.2020; Giang Bui v. Cargill, Incorporated, et al. which was filed originally on February 18, 2022; and Sylvie De Bellefeuille v. Cargill, Inc. et al., which was filed originally on March 24, 2022. The single-plaintiff Antitrust Case isCases are entitled Winn-Dixie Stores, Inc. and Bi-Lo Holding, LLC v. Cargill, Inc., et al., which was filed on August 2, 2021.2021; Cheney Brothers, Inc. v. Cargill, Inc., et al., which was filed on January 31, 2022; Subway v. Cargill, Inc. et al., which was filed on February 22, 2022; Amory Investments LLC v. Cargill, Inc. et al., which was filed originally on March 8, 2022; Associated Grocers, Inc., et al. v. Cargill, Inc., et al., which was filed originally on May 12, 2022; Giant Eagle, Inc. v. Cargill, Inc., et al., which was filed originally on June 8, 2022; and Sysco Corporation v. Cargill, Inc., et al., which was filed originally on June 24, 2022. The plaintiffs in the Antitrust Casesthese cases seek treble damages and other relief under various laws including the Sherman Antitrust Act, the Canadian Competition Act, the Packers & Stockyards Act, and/or the Commodities Exchange Act and attorneys’ fees.  NBP is also a defendant in two class action lawsuits filed on January 7, 2020, alleging that it misrepresented the origin of its products in violation of the New Mexico Unfair Practices Act (the “Labelling Cases”).  The Labelling Cases are entitled Thornton v. Tyson Foods, Inc., et al., filed in the New Mexico Second Judicial District Court, Bernalillo County,various state and Lucero v. Tyson Foods, et al., filed in the New Mexico Thirteenth Judicial District Court, Sandoval County.  The Labelling Cases were subsequently removed to the United States District Court, New Mexico District.  The plaintiffs in the Labelling Cases seek treble damages and other reliefprovincial laws and attorneys’ fees. NBP believes it has meritorious defenses to the claims in the Antitrust Cases and the Labelling Casesthese cases and intends to defend these cases vigorously, although therethem vigorously. There can be no assuranceassurances, however, as to the outcome of these casesmatters or the impact on NBP’s consolidated financial position, results of operations and cash flows.

In addition to the antitrust litigation, NBP is subject to investigationsan investigation by the United States Department of Justice and approximately 30 state attorneys general regarding industry cattle procurement practices. NBP is cooperating with these investigations and is working with the Department of Justice and the relevant states to provide information requested in connection with the investigations. NBP believes it has meritorious defenses to any potential claims that might arise out of these government investigations, although there can be no assurance as to the outcome of these investigations or the impact on NBP’s consolidated financial position, results of operations and cash flows.

NBP is also subject to an investigation by the U.S. House of Representatives Select Subcommittee on the Coronavirus (the “Subcommittee”) in the impact of the coronavirus pandemic on workers in the meatpacking industry.  As part of this investigation, NBP received an information request on September 15, 2021.  NBP is cooperating with this investigation and is working with the Subcommittee to provide the requested information.

NBP is a party to various other lawsuits and claims arising out of the operation of its business. Management believes the ultimate resolution of such matters should not have a material adverse effect on NPB’sNBP’s financial condition, results of operations or liquidity.

USPB is not able to assess what impact, if any, the actions described above will have on NBP or USPB.

Item 1A. Risk Factors.

The risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 26, 202025, 2021 have not materially changed. Please refer to the Company’s report on Form 10-K for the fiscal year ended December 26, 202025, 2021 to consider those risk factors.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

SIGNATURES

Pursuant to the requirements 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.

Date: NovemberAugust 4, 2021

2022