| Basis of Presentation and Accounting Policies | Basis of Presentation USPBs 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. Fiscal Year The Companys fiscal
year ends on the last Saturday in December. The Company files annual reports for each 52 week or 53 week period ended on the last
Saturday in December. Use of Estimates The financial statements
have been prepared in conformity with accounting principles generally accepted in the United States of America, using managements
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 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. Cash and Cash Equivalents The Company considers
all highly liquid investments with an original maturity of three months or less to be cash equivalents. Investment in National Beef Packing
Company, LLC USPBs 15.0729%
investment in NBP 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. For fiscal years 2017
and 2016, USPB conducted an evaluation to determine if its investment in NBP was impaired as of the end of the fiscal year in
accordance with Auditing Standards Codification (ASC) 323 Investments Equity Method and Joint Ventures Property, Plant, and Equipment Property, plant, and
equipment are recorded at cost. Property, plant, and equipment are depreciated principally on a straight-line basis over the estimated
useful life (based upon original acquisition date) of the individual asset by major asset class as follows: Buildings and improvements 15 to 25 years
Machinery and equipment 2 to 15 years
Furniture and fixtures 3 to 5 years
Trailers and automotive equipment 2 to 4 years Upon disposition of these
assets, any resulting gain or loss is included in other, net. Normal repairs and maintenance costs are charged to Selling, general
and administrative expenses, as incurred. A summary of cost and
accumulated depreciation for property, plant, and equipment as of December 30, 2017 and December 31, 2016 follows (thousands of
dollars):
December 30, 2017 December 31, 2016
Machinery and equipment $ 24 $ 24
Furniture and fixtures 140 140
Trailers and automotive equipment 59 59
Total property, plant,
and equipment, at cost 223 223
Accumulated depreciation 201 188
Property,
plant, and equipment, net $ 22 $ 35 Depreciation expense was immaterial for fiscal years ended December 30, 2017 and December 31, 2016. New Accounting Standard In February 2016, the
FASB issued ASU No. 2016-02, Leases, which requires an entity that is a lessee to record a right-of-use asset and a lease liability
for lease payments on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance
or operating, with classification affecting the pattern of expense recognition in the income statement. The new guidance is effective
for interim and annual periods beginning after December 15, 2018, and is required to be applied using a modified retrospective
approach. USPB plans to adopt the new guidance on January 1, 2019. USPB expects that the new guidance will affect the balance
sheet by increasing the assets and liabilities recorded related to operating leases and continue to evaluate the effect that ASU
No. 2016-02 will have on the income statement, statement of cash flows and related disclosures. Overdraft Balances USPB utilizes a controlled
disbursement account to fund cash distribution checks presented for payment by the holder. Checks issued pending clearance that
result in overdraft balances for accounting purposes are included in patronage notices payable and distributions payable and the
change in the related balances are reflected in financing activities on the statement of cash flows. Overdraft balances totaled
$27.1 million and $1.1 million as of December 30, 2017 and December 31, 2016, respectively. Income Taxes Effective August 29,
2004, the Company converted to an LLC, and under this structure, taxes are not provided at the Company level because the results
of operations are included in the taxable income of the individual members. Selling, General, and Administrative Selling expenses consist
primarily of salaries, bonuses, phantom unit option expense, trade promotions, advertising, commissions and other marketing costs.
General and administrative costs consist primarily of general management, insurance and professional expenses. Noncompetition Payments The former CEOs
employment agreement provided for him to receive noncompetition payments in connection with the Leucadia Transaction. During fiscal
years 2017 and 2016, the former CEO was paid $853,263 and $852,948, respectively, in noncompetition payments. He will
continue to receive noncompetition payments of approximately $850,000 per year during calendar years 2018 through 2021. The current CEOs
employment agreement provides for him to receive noncompetition payments for a twelve month period following his termination of
employment with USPB. As of December 30, 2017
and December 31, 2016, the Company had accrued $3.4 million and $4.1 million, respectively, for the noncompetition agreements.
The current and long-term portion of the accrued amounts are included in Accrued compensation and benefits and Other liabilities,
respectively, on the balance sheet. Business Segments USPB is not organized
by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, USPB has one
reportable segment. Earnings Per Unit Under the LLC structure,
earnings of the Company are to be distributed to unitholders based on their proportionate share of underlying equity, and, as
a result, earnings per unit (EPU) has been presented in the accompanying Statement of Operations and in the table that follows. Basic EPU excludes dilution
and is computed by first allocating 10% of net income or loss attributable to USPB to Class A units and the remaining 90% is allocated
to Class B units. Net income or 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 52 weeks ended 53 weeks ended 52 weeks ended
(thousands of dollars, except unit and per unit data) December 30, 2017 December 31, 2016 December 26, 2015
Basic and diluted earnings per unit:
Income (loss) attributable to USPB available to
unitholders (numerator)
Class A $ 5,748 $ 4,637 $ (2,132 )
Class B $ 51,733 $ 41,731 $ (19,184 )
Weighted average outstanding units (denominator)
Class A 735,385 735,385 735,385
Class B 755,385 755,385 755,385
Per unit amount
Class A $ 7.82 $ 6.31 $ (2.90 )
Class B $ 68.49 $ 55.24 $ (25.40 ) |
