U. S. Premium Beef (USPB) 10-Q 9 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 28, 2017
Entity Registrant Name	U. S. Premium Beef, LLC
Entity Central Index Key	1,289,237
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-30
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	2,017
Class A Units [Member]
Entity Common Stock, Shares Outstanding		735,385
Class B Units [Member]
Entity Common Stock, Shares Outstanding		755,385

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 81,547	$ 85,230
Due from affiliates	259	48
Other current assets	12	27
Total current assets	81,818	85,305
Property, plant, and equipment, at cost	224	223
Less accumulated depreciation	198	188
Net property, plant, and equipment	26	35
Investment in National Beef Packing Company, LLC	163,536	143,446
Other assets	102	146
Total assets	245,482	228,932
Current liabilities:
Accounts payable - trade	13	66
Due to affiliates	91	37
Accrued compensation and benefits	1,745	1,690
Other accrued expenses and liabilities	193	253
Distributions and patronage notices payable	59	1,218
Total current liabilities	2,101	3,264
Long-term liabilities:
Other liabilities	4,049	4,473
Total long-term liabilities	4,049	4,473
Total liabilities	6,150	7,737
Capital shares and equities:
Members' capital, 735,385 Class A units and 755,385 Class B units authorized, issued and outstanding	239,332	221,195
Total capital shares and equities	239,332	221,195
Total liabilities and capital shares and equities	$ 245,482	$ 228,932

Balance Sheets (Unaudited) (Par

Balance Sheets (Unaudited) (Parenthetical) - shares	Sep. 30, 2017	Dec. 31, 2016
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

Statements of Operations (Unaud

Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 24, 2016	Sep. 30, 2017	Sep. 24, 2016
Net sales	$ 0	$ 0	$ 0	$ 0
Costs and expenses:
Cost of sales	0	0	0	0
Selling, general, and administrative expenses	859	726	2,760	2,281
Depreciation and amortization	3	3	9	10
Total costs and expenses	862	729	2,769	2,291
Operating loss	(862)	(729)	(2,769)	(2,291)
Other income (expense):
Interest income	113	11	184	35
Interest expense	(3)	(3)	(9)	(9)
Equity interest in net income of National Beef Packing Company, LLC	26,226	16,270	46,601	28,800
Other, net	27	21	25	367
Other income (expense)	26,363	16,299	46,801	29,193
Comprehensive income	$ 25,501	$ 15,570	$ 44,032	$ 26,902
Class A Units [Member]
Earnings per unit:
Basic	$ 3.47	$ 2.12	$ 5.99	$ 3.66
Diluted	$ 3.47	$ 2.12	$ 5.99	$ 3.66
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]
Earnings per unit:
Basic	$ 30.38	$ 18.55	$ 52.46	$ 32.05
Diluted	$ 30.38	$ 18.55	$ 52.46	$ 32.05
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

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 24, 2016
Cash flows from operating activities:
Comprehensive income	$ 44,032	$ 26,902
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	9	10
Equity in net income of National Beef Packing Company, LLC	(46,601)	(28,800)
Distribution from National Beef Packing Company, LLC	19,076	0
Changes in assets and liabilities:
Due from affiliates	(211)	(9)
Other assets	58	49
Accounts payable	(53)	(8)
Due to affiliates	54	47
Accrued compensation and benefits	(369)	(172)
Other accrued expenses and liabilities	(60)	(89)
Net cash provided by (used in) operating activities	15,935	(2,070)
Cash flows from investing activities:
Distribution from National Beef Packing Company, LLC	7,436	13,216
Net cash provided by investing activities	7,436	13,216
Cash flows from financing activities:
Change in overdraft balances	(1,159)	(71)
Partnership distributions and redemptions	(25,895)	0
Net cash used in financing activities	(27,054)	(71)
Net (decrease) increase in cash	(3,683)	11,075
Cash and cash equivalents at beginning of the period	85,230	85,220
Cash and cash equivalents at end of the period	$ 81,547	$ 96,295

1. Interim Financial Statements

1. Interim Financial Statements	9 Months Ended
	Sep. 30, 2017
Quarterly Financial Information Disclosure [Abstract]
Interim Financial Statements	Basis of Presentation The accompanying unaudited 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 at the date of the financial statements. The estimates and judgments 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 Financial Statements and Notes to Financial Statements, which are included in the Company’s Annual Report on Form 10-K on file with the Securities and Exchange Commission, for the fiscal year ended December 31, 2016. 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. 30, 2017
Members' Equity [Abstract]
Members' Capital	The following table represents a reconciliation of Members’ Capital for the thirty-nine week period ended September 30, 2017 (thousands of dollars). Balance at December 31, 2016 $ 221,195 Allocation of comprehensive income for the thirty-nine week period ended September 30, 2017 44,032 Member distributions (25,895 ) Balance at September 30, 2017 $ 239,332

3. Earnings Per Unit

3. Earnings Per Unit	9 Months Ended
	Sep. 30, 2017
Earnings per unit:
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 comprehensive income or loss to Class A units and the remainder to Class B units. For the fourteen week and thirty-nine week periods ended September 30, 2017 and the thirteen week and thirty-nine week periods ended September 24, 2016, 10% of USPB’s comprehensive income allocated to the Class A’s and 90% to the Class B’s. The comprehensive 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. Earnings Per Unit Calculation 14 weeks ended 13 weeks ended 39 weeks ended 39 weeks ended (thousands of dollars, except unit and per unit data) September 30, 2017 September 24, 2016 September 30, 2017 September 24, 2016 Basic and diluted earnings per unit Comprehensive income attributable to USPB unitholders (numerator) Class A $ 2,550 $ 1,557 $ 4,403 $ 2,690 Class B $ 22,951 $ 14,013 $ 39,629 $ 24,212 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 $ 3.47 $ 2.12 $ 5.99 $ 3.66 Class B $ 30.38 $ 18.55 $ 52.46 $ 32.05

4. Investment in National Beef

4. Investment in National Beef Packing Company, LLC	9 Months Ended
	Sep. 30, 2017
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’s fourteen week and thirty-nine week periods ended September 30, 2017 and the thirteen week and thirty-nine week periods ended September 24, 2016 (thousands of dollars): 14 weeks ended 13 weeks ended 39 weeks ended 39 weeks ended September 30, 2017 September 24, 2016 September 30, 2017 September 24, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 2,038,823 $ 1,746,839 $ 5,472,340 $ 5,175,592 Costs and expenses: Cost of sales 1,816,473 1,595,672 5,030,882 4,856,046 Selling, general, and administrative expenses 19,974 17,035 56,085 51,929 Depreciation and amortization 26,664 23,100 73,522 68,511 Total costs and expenses 1,863,111 1,635,807 5,160,489 4,976,486 Operating income 175,712 111,032 311,851 199,106 Other income (expense): Interest income 57 51 230 114 Interest expense (1,710 ) (2,965 ) (5,780 ) (10,728 ) Other, net 418 149 3,705 4,040 Income before taxes 174,477 108,267 310,006 192,532 Income tax benefit (expense) (482 ) (327 ) (833 ) (1,462 ) Net income $ 173,995 $ 107,940 $ 309,173 $ 191,070 NBP's net income attributable to USPB $ 26,226 $ 16,270 $ 46,601 $ 28,800

2. Members' Capital (Tables)

2. Members' Capital (Tables)	9 Months Ended
	Sep. 30, 2017
Members' Equity [Abstract]
Schedule of Reconciliation of Members' Capital	Balance at December 31, 2016 $ 221,195 Allocation of comprehensive income for the thirty-nine week period ended September 30, 2017 44,032 Member distributions (25,895 ) Balance at September 30, 2017 $ 239,332

3. Earnings Per Unit (Tables)

3. Earnings Per Unit (Tables)	9 Months Ended
	Sep. 30, 2017
Limited Liability Company (LLC) Members' Equity [Abstract]
Schedule of Income (Loss) Per Unit Calculation	Earnings Per Unit Calculation 14 weeks ended 13 weeks ended 39 weeks ended 39 weeks ended (thousands of dollars, except unit and per unit data) September 30, 2017 September 24, 2016 September 30, 2017 September 24, 2016 Basic and diluted earnings per unit Comprehensive income attributable to USPB unitholders (numerator) Class A $ 2,550 $ 1,557 $ 4,403 $ 2,690 Class B $ 22,951 $ 14,013 $ 39,629 $ 24,212 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 $ 3.47 $ 2.12 $ 5.99 $ 3.66 Class B $ 30.38 $ 18.55 $ 52.46 $ 32.05

4. Investment in National Bee12

4. Investment in National Beef Packing Company, LLC (Tables)	9 Months Ended
	Sep. 30, 2017
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
Schedule of Operations for NBP	14 weeks ended 13 weeks ended 39 weeks ended 39 weeks ended September 30, 2017 September 24, 2016 September 30, 2017 September 24, 2016 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 2,038,823 $ 1,746,839 $ 5,472,340 $ 5,175,592 Costs and expenses: Cost of sales 1,816,473 1,595,672 5,030,882 4,856,046 Selling, general, and administrative expenses 19,974 17,035 56,085 51,929 Depreciation and amortization 26,664 23,100 73,522 68,511 Total costs and expenses 1,863,111 1,635,807 5,160,489 4,976,486 Operating income 175,712 111,032 311,851 199,106 Other income (expense): Interest income 57 51 230 114 Interest expense (1,710 ) (2,965 ) (5,780 ) (10,728 ) Other, net 418 149 3,705 4,040 Income before taxes 174,477 108,267 310,006 192,532 Income tax benefit (expense) (482 ) (327 ) (833 ) (1,462 ) Net income $ 173,995 $ 107,940 $ 309,173 $ 191,070 NBP's net income attributable to USPB $ 26,226 $ 16,270 $ 46,601 $ 28,800

1. Interim Financial Statemen13

1. Interim Financial Statements (Details Narrative)	Sep. 30, 2017
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. 30, 2017USD ($)
Members' Equity [Abstract]
Beginning balance	$ 221,195
Allocation of comprehensive income	44,032
Member distributions	(25,895)
Ending balance	$ 239,332

3. Earnings Per Unit (Details N

3. Earnings Per Unit (Details Narrative)	9 Months Ended
	Sep. 30, 2017
Class A Units [Member]
Class of Stock [Line Items]
Ownership percentage	10.00%
Class B Units [Member]
Class of Stock [Line Items]
Ownership percentage	90.00%

3. Earnings Per Unit (Details)

3. Earnings Per Unit (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 24, 2016	Sep. 30, 2017	Sep. 24, 2016
Basic and diluted earnings per unit
Comprehensive income attributable to USPB unitholders (numerator)			$ 44,032
Class A Units [Member]
Basic and diluted earnings per unit
Comprehensive income attributable to USPB unitholders (numerator)	$ 2,550	$ 1,557	$ 4,403	$ 2,690
Weighted average outstanding units (denominator)	735,385	735,385	735,385	735,385
Per unit amount	$ 3.47	$ 2.12	$ 5.99	$ 3.66
Class B Units [Member]
Basic and diluted earnings per unit
Comprehensive income attributable to USPB unitholders (numerator)	$ 22,951	$ 14,013	$ 39,629	$ 24,212
Weighted average outstanding units (denominator)	755,385	755,385	755,385	755,385
Per unit amount	$ 30.38	$ 18.55	$ 52.46	$ 32.05

4. Investment in National Bee17

4. Investment in National Beef Packing Company, LLC (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 24, 2016	Sep. 30, 2017	Sep. 24, 2016
Investment in National Beef Packing
Net sales	$ 2,038,823	$ 1,746,839
Costs and expenses:
Cost of sales	1,816,473	1,595,672
Selling, general, and administrative expenses	19,974	17,035
Depreciation and amortization	26,664	23,100
Total costs and expenses	1,863,111	1,635,807
Operating income	175,712	111,032
Other income (expense):
Interest income	57	51
Interest expense	(1,710)	(2,965)
Other, net	418	149
Income before taxes	174,477	108,267
Income tax benefit (expense)	(482)	(327)
Net income	173,995	107,940
NBP's net income attributable to USPB	$ 26,226	$ 16,270	$ 46,601	$ 28,800
National Beef Packing Company, LLC [Member]
Investment in National Beef Packing
Net sales			5,472,340	5,175,592
Costs and expenses:
Cost of sales			5,030,882	4,856,046
Selling, general, and administrative expenses			56,085	51,929
Depreciation and amortization			73,522	68,511
Total costs and expenses			5,160,489	4,976,486
Operating income			311,851	199,106
Other income (expense):
Interest income			230	114
Interest expense			(5,780)	(10,728)
Other, net			3,705	4,040
Income before taxes			310,006	192,532
Income tax benefit (expense)			(833)	(1,462)
Net income			309,173	191,070
NBP's net income attributable to USPB			$ 46,601	$ 28,800