U. S. Premium Beef (USPB) 10-Q 3 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 24, 2016	Oct. 29, 2016
Entity Registrant Name	U. S. Premium Beef, LLC
Entity Central Index Key	1,289,237
Document Type	10-Q
Document Period End Date	Sep. 24, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,016
Class A Units [Member]
Entity Common Stock, Shares Outstanding		735,385
Class B Units [Member]
Entity Common Stock, Shares Outstanding		755,385

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 24, 2016	Dec. 26, 2015
Current assets:
Cash and cash equivalents	$ 96,295	$ 85,220
Due from affiliates	146	137
Other current assets	11	8
Total current assets	96,452	85,365
Property, plant, and equipment, at cost	223	223
Less accumulated depreciation	185	175
Net property, plant, and equipment	38	48
Investment in National Beef Packing Company, LLC	148,211	132,628
Other assets	145	196
Total assets	244,846	218,237
Current liabilities:
Accounts payable - trade	6	14
Due to affiliates	47	0
Accrued compensation and benefits	1,220	1,066
Other accrued expenses and liabilities	89	179
Patronage notices payable	19	90
Total current liabilities	1,381	1,349
Long-term liabilities:
Other liabilities	4,792	5,118
Total long-term liabilities	4,792	5,118
Total liabilities	6,173	6,467
Commitments and contingencies
Capital shares and equities:
Members' capital, 735,385 Class A units and 755,385 Class B units authorized, issued and outstanding	238,673	211,770
Total capital shares and equities	238,673	211,770
Total liabilities and capital shares and equities	$ 244,846	$ 218,237

Consolidated Balance Sheets (U3

Consolidated Balance Sheets (Unaudited) (Parenthetical) - shares	Sep. 24, 2016	Dec. 26, 2015
Class A Units [Member]
Members' capital, units authorized	735,385	735,385
Members' capital, units issued	735,385	735,385
Members' capital, units outstanding	735,385	735,385
Class B Units [Member]
Members' capital, units authorized	755,385	755,385
Members' capital, units issued	755,385	755,385
Members' capital, units outstanding	755,385	755,385

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2016	Sep. 26, 2015	Sep. 24, 2016	Sep. 26, 2015
Net sales	$ 0	$ 0	$ 0	$ 0
Costs and expenses:
Cost of sales	0	0	0	0
Selling, general, and administrative expenses	726	430	2,281	1,616
Depreciation and amortization	3	2	10	4
Total costs and expenses	729	432	2,291	1,620
Operating loss	(729)	(432)	(2,291)	(1,620)
Other income (expense):
Interest income	11	11	35	34
Interest expense	(3)	(3)	(9)	(9)
Equity interest in net income (loss) of National Beef Packing Company, LLC	16,270	(4,856)	28,800	(11,361)
Other, net	21	2	367	2
Income (loss) before taxes	15,570	(5,278)	26,902	(12,954)
Income tax expense	0	0	0	0
Net income (loss)	$ 15,570	$ (5,278)	$ 26,902	$ (12,954)
Class A Units [Member]
Income (loss) per unit:
Basic	$ 2.12	$ (.72)	$ 3.66	$ (1.76)
Diluted	$ 2.12	$ (0.72)	$ 3.66	$ (1.76)
Outstanding weighted-average Class A and Class B units:
Basic	735,385	735,385	735,385	735,385
Diluted	735,385	735,385	735,385	735,385
Class B Units [Member]
Income (loss) per unit:
Basic	$ 18.55	$ (6.29)	$ 32.05	$ (15.43)
Diluted	$ 18.55	$ (6.29)	$ 32.05	$ (15.43)
Outstanding weighted-average Class A and Class B units:
Basic	755,385	755,385	755,385	755,385
Diluted	755,385	755,385	755,385	755,385

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 24, 2016	Sep. 26, 2015
Cash flows from operating activities:
Net income (loss)	$ 26,902	$ (12,954)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	10	4
Equity in net (income) loss of National Beef Packing Company, LLC	(28,800)	11,361
Changes in assets and liabilities:
Due from affiliates	(9)	(14)
Other assets	49	50
Accounts payable	(8)	(7)
Due to affiliates	47	2
Accrued compensation and benefits	(172)	(946)
Other accrued expenses and liabilities	(89)	(69)
Net cash used in operating activities	(2,070)	(2,573)
Cash flows from investing activities:
Capital expenditures	0	(22)
Distribution from National Beef Packing Company, LLC	13,216	0
Net cash provided by (used in) investing activities	13,216	(22)
Cash flows from financing activities:
Change in overdraft balances	(71)	0
Net cash used in financing activities	(71)	0
Net increase (decrease) in cash	11,075	(2,595)
Cash and cash equivalents at beginning of the period	85,220	92,344
Cash and cash equivalents at end of the period	$ 96,295	$ 89,749

1. Interim Financial Statements

1. Interim Financial Statements	9 Months Ended
	Sep. 24, 2016
Quarterly Financial Information Disclosure [Abstract]
Interim Financial Statements	Basis of Presentation The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), for interim financial information; therefore, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments. For further information, refer to the audited Consolidated Financial Statements and Notes to Consolidated Financial Statements, which are included in the Company’s Annual Report on Form 10-K on file with the Securities and Exchange Commission (SEC), for the fiscal year ended December 26, 2015. The results of operations for the interim periods presented are not necessarily indicative of the results for a full fiscal year. 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.

2. Members' Capital

2. Members' Capital	9 Months Ended
	Sep. 24, 2016
Members' Equity [Abstract]
Members' Capital	The following table represents a reconciliation of Members’ Capital for the thirty-nine week period ended September 24, 2016 (thousands of dollars). Balance at December 26, 2015 $ 211,770 Net income for the thirty-nine week period ended September 24, 2016 26,902 Balance at September 24, 2016 $ 238,673

3. Income (Loss) Attributable t

3. Income (Loss) Attributable to USPB Per Unit	9 Months Ended
	Sep. 24, 2016
Limited Liability Company (LLC) Members' Equity [Abstract]
Income (Loss) Attributable to USPB Per Unit	Under the LLC structure, earnings of the Company are to be allocated to unitholders based on their proportionate share of underlying equity, and, as a result, income attributable to USPB 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 net income (loss) attributable to USPB to Class A units and the remainder is allocated to Class B units. For the thirteen week and thirty-nine week periods ended September 24, 2016 and September 26, 2015, net income (loss) was allocated 10% to the Class A’s and 90% to the Class B’s. The net income (loss) allocated to the Class A and Class B units is 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. Income (Loss) Per Unit Calculation 13 weeks ended 13 weeks ended 39 weeks ended 39 weeks ended (thousands of dollars, except unit and per unit data) September 24, 2016 September 26, 2015 September 24, 2016 September 26, 2015 Basic earnings per unit Net income (loss) attributable to USPB available to unitholders (numerator) Class A $ 1,557 $ (527 ) $ 2,690 $ (1,295 ) Class B $ 14,013 $ (4,751 ) $ 24,212 $ (11,659 ) Weighted average outstanding units (denominator) Class A 735,385 735,385 735,385 735,385 Class B 755,385 755,385 755,385 755,385 Per unit amount Class A $ 2.12 $ (0.72 ) $ 3.66 $ (1.76 ) Class B $ 18.55 $ (6.29 ) $ 32.05 $ (15.43 ) Diluted earnings per unit: Net income (loss) attributable to USPB available to unitholders (numerator) Class A $ 1,557 $ (527 ) $ 2,690 $ (1,295 ) Class B $ 14,013 $ (4,751 ) $ 24,212 $ (11,659 ) Weighted average outstanding Class A units 735,385 735,385 735,385 735,385 Effect of dilutive securities - Class A unit options – – – – Units (denominator) 735,385 735,385 735,385 735,385 Weighted average outstanding Class B units 755,385 755,385 755,385 755,385 Effect of dilutive securities - Class B unit options – – – – Units (denominator) 755,385 755,385 755,385 755,385 Per unit amount Class A $ 2.12 $ (0.72 ) $ 3.66 $ (1.76 ) Class B $ 18.55 $ (6.29 ) $ 32.05 $ (15.43 )

4. Investment in National Beef

4. Investment in National Beef Packing Company, LLC	9 Months Ended
	Sep. 24, 2016
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
Investment in National Beef Packing Company, LLC	USPB’s 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. Below is a summary of the results of operations for NBP for the thirteen and thirty-nine week periods ended September 24, 2016 and September 26, 2015 (thousands of dollars): 13 weeks ended 13 weeks ended 39 weeks ended 39 weeks ended September 24, 2016 September 26, 2015 September 24, 2016 September 26, 2015 Net sales $ 1,746,839 $ 1,863,040 $ 5,175,592 $ 5,709,835 Costs and expenses: Cost of sales 1,595,672 1,849,023 4,856,046 5,658,679 Selling, general, and administrative expenses 17,035 15,485 51,929 46,882 Depreciation and amortization 23,100 22,528 68,511 66,397 Total costs and expenses 1,635,807 1,887,036 4,976,486 5,771,958 Operating income (loss) 111,032 (23,996 ) 199,106 (62,123 ) Other income (expense): Interest income 51 3 114 20 Interest expense (2,965 ) (3,902 ) (10,728 ) (12,619 ) Other, net 149 (3,786 ) 4,040 56 Income (loss) before taxes 108,267 (31,681 ) 192,532 (74,666 ) Income tax expense (327 ) (538 ) (1,462 ) (710 ) Net income (loss) 107,940 (32,219 ) 191,070 (75,376 ) NBP's net income (loss) attributable to USPB $ 16,270 $ (4,856 ) $ 28,800 $ (11,361 )

5. Subsequent Events

5. Subsequent Events	9 Months Ended
	Sep. 24, 2016
Subsequent Events [Abstract]
5. Subsequent Events	On October 24, 2016, USPB received an $11.3 million discretionary distribution from NBP.

2. Members' Capital (Tables)

2. Members' Capital (Tables)	9 Months Ended
	Sep. 24, 2016
Members' Equity [Abstract]
Schedule of Reconciliation of Members' Capital	Balance at December 26, 2015 $ 211,770 Net income for the thirty-nine week period ended September 24, 2016 26,902 Balance at September 24, 2016 $ 238,673

3. Income (Loss) Attributable12

3. Income (Loss) Attributable to USPB Per Unit (Tables)	9 Months Ended
	Sep. 24, 2016
Limited Liability Company (LLC) Members' Equity [Abstract]
Schedule of Income (Loss) Per Unit Calculation	13 weeks ended 13 weeks ended 39 weeks ended 39 weeks ended (thousands of dollars, except unit and per unit data) September 24, 2016 September 26, 2015 September 24, 2016 September 26, 2015 Basic earnings per unit Net income (loss) attributable to USPB available to unitholders (numerator) Class A $ 1,557 $ (527 ) $ 2,690 $ (1,295 ) Class B $ 14,013 $ (4,751 ) $ 24,212 $ (11,659 ) Weighted average outstanding units (denominator) Class A 735,385 735,385 735,385 735,385 Class B 755,385 755,385 755,385 755,385 Per unit amount Class A $ 2.12 $ (0.72 ) $ 3.66 $ (1.76 ) Class B $ 18.55 $ (6.29 ) $ 32.05 $ (15.43 ) Diluted earnings per unit: Net income (loss) attributable to USPB available to unitholders (numerator) Class A $ 1,557 $ (527 ) $ 2,690 $ (1,295 ) Class B $ 14,013 $ (4,751 ) $ 24,212 $ (11,659 ) Weighted average outstanding Class A units 735,385 735,385 735,385 735,385 Effect of dilutive securities - Class A unit options – – – – Units (denominator) 735,385 735,385 735,385 735,385 Weighted average outstanding Class B units 755,385 755,385 755,385 755,385 Effect of dilutive securities - Class B unit options – – – – Units (denominator) 755,385 755,385 755,385 755,385 Per unit amount Class A $ 2.12 $ (0.72 ) $ 3.66 $ (1.76 ) Class B $ 18.55 $ (6.29 ) $ 32.05 $ (15.43 )

4. Investment in National Bee13

4. Investment in National Beef Packing Company, LLC (Tables)	9 Months Ended
	Sep. 24, 2016
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
Schedule of Operations for NBP	13 weeks ended 13 weeks ended 39 weeks ended 39 weeks ended September 24, 2016 September 26, 2015 September 24, 2016 September 26, 2015 Net sales $ 1,746,839 $ 1,863,040 $ 5,175,592 $ 5,709,835 Costs and expenses: Cost of sales 1,595,672 1,849,023 4,856,046 5,658,679 Selling, general, and administrative expenses 17,035 15,485 51,929 46,882 Depreciation and amortization 23,100 22,528 68,511 66,397 Total costs and expenses 1,635,807 1,887,036 4,976,486 5,771,958 Operating income (loss) 111,032 (23,996 ) 199,106 (62,123 ) Other income (expense): Interest income 51 3 114 20 Interest expense (2,965 ) (3,902 ) (10,728 ) (12,619 ) Other, net 149 (3,786 ) 4,040 56 Income (loss) before taxes 108,267 (31,681 ) 192,532 (74,666 ) Income tax expense (327 ) (538 ) (1,462 ) (710 ) Net income (loss) 107,940 (32,219 ) 191,070 (75,376 ) NBP's net income (loss) attributable to USPB $ 16,270 $ (4,856 ) $ 28,800 $ (11,361 )

1. Interim Financial Statemen14

1. Interim Financial Statements (Details Narrative)	Sep. 24, 2016
Quarterly Financial Information Disclosure [Abstract]
Remaining membership interests in National Beef Packing Company, LLC (NBP)	15.0729%

2. Members' Capital (Details)

2. Members' Capital (Details) $ in Thousands	9 Months Ended
	Sep. 24, 2016USD ($)
Members' Equity [Abstract]
Beginning balance	$ 211,770
Net income for the period	26,902
Ending balance	$ 238,673

3. Income (Loss) Attributable16

3. Income (Loss) Attributable to USPB Per Unit (Details Narrative)	9 Months Ended
	Sep. 24, 2016	Sep. 26, 2015
Class A Units [Member]
Class of Stock [Line Items]
Ownership percentage	10.00%	10.00%
Class B Units [Member]
Class of Stock [Line Items]
Ownership percentage	90.00%	90.00%

3. Income (Loss) Attributable17

3. Income (Loss) Attributable to USPB Per Unit (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2016	Sep. 26, 2015	Sep. 24, 2016	Sep. 26, 2015
Basic earnings per unit
Net income (loss) attributable to USPB available to unitholders (numerator)			$ 26,902
Class A Units [Member]
Basic earnings per unit
Net income (loss) attributable to USPB available to unitholders (numerator)	$ 1,557	$ (527)	$ 2,690	$ (1,295)
Weighted average outstanding units (denominator)	735,385	735,385	735,385	735,385
Per unit amount	$ 2.12	$ (.72)	$ 3.66	$ (1.76)
Diluted earnings per unit:
Net income (loss) attributable to USPB available to unitholders (numerator)	$ 1,557	$ (527)	$ 2,690	$ (1,295)
Weighted average outstanding
Weighted average outstanding units (denominator)	735,385	735,385	735,385	735,385
Effect of dilutive securities	0	0		0
Units (denominator)	735,385	735,385	735,385	735,385
Per unit amount	$ 2.12	$ (0.72)	$ 3.66	$ (1.76)
Class B Units [Member]
Basic earnings per unit
Net income (loss) attributable to USPB available to unitholders (numerator)	$ 14,013	$ (4,751)	$ 24,212	$ (11,659)
Weighted average outstanding units (denominator)	755,385	755,385	755,385	755,385
Per unit amount	$ 18.55	$ (6.29)	$ 32.05	$ (15.43)
Diluted earnings per unit:
Net income (loss) attributable to USPB available to unitholders (numerator)	$ 14,013	$ (4,751)	$ 24,212	$ (11,659)
Weighted average outstanding
Weighted average outstanding units (denominator)	755,385	755,385	755,385	755,385
Effect of dilutive securities	0	0	0	0
Units (denominator)	755,385	755,385	755,385	755,385
Per unit amount	$ 18.55	$ (6.29)	$ 32.05	$ (15.43)

4. Investment in National Bee18

4. Investment in National Beef Packing Company, LLC (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 24, 2016	Sep. 26, 2015	Sep. 24, 2016	Sep. 26, 2015
Other income (expense):
NBP's net income (loss) attributable to USPB	$ 16,270	$ (4,856)	$ 28,800	$ (11,361)
National Beef Packing Company, LLC [Member]
Investment in National Beef Packing
Net sales	1,746,839	1,863,040	5,175,592	5,709,835
Costs and expenses:
Cost of sales	1,595,672	1,849,023	4,856,046	5,658,679
Selling, general, and administrative expenses	17,035	15,485	51,929	46,882
Depreciation and amortization	23,100	22,528	68,511	66,397
Total costs and expenses	1,635,807	1,887,036	4,976,486	5,771,958
Operating income (loss)	111,032	(23,996)	199,106	(62,123)
Other income (expense):
Interest income	51	3	114	20
Interest expense	(2,965)	(3,902)	(10,728)	(12,619)
Other, net	149	(3,786)	4,040	56
Income (loss) before taxes	108,267	(31,681)	192,532	(74,666)
Income tax expense	(327)	(538)	(1,462)	(710)
Net income (loss)	107,940	(32,219)	191,070	(75,376)
NBP's net income (loss) attributable to USPB	$ 16,270	$ (4,856)	$ 28,800	$ (11,361)