U. S. Premium Beef (USPB) 10-Q 8 Nov 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 29, 2018	Oct. 27, 2018
Entity Registrant Name	U. S. Premium Beef, LLC
Entity Central Index Key	1,289,237
Document Type	10-Q
Document Period End Date	Sep. 29, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-29
Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,018
Entity Emerging Growth	false
Entity Small Business	false
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. 29, 2018	Dec. 30, 2017
Current assets:
Cash and cash equivalents	$ 78,448	$ 119,074
Due from affiliates	19	137
Other current assets	11	35
Total current assets	78,478	119,246
Property, plant, and equipment, at cost	230	223
Less accumulated depreciation	210	201
Net property, plant, and equipment	20	22
Investment in National Beef Packing Company, LLC	134,043	140,030
Other assets	70	103
Total assets	212,611	259,401
Current liabilities:
Accounts payable - trade	3	58
Due to affiliates	28	388
Accrued compensation and benefits	2,113	2,250
Other accrued expenses and liabilities	334	284
Distributions payable	1,453	28,328
Total current liabilities	3,931	31,308
Long-term liabilities:
Other liabilities	3,728	3,946
Total long-term liabilities	3,728	3,946
Total liabilities	7,659	35,254
Capital shares and equities:
Members' capital, 735,385 Class A units and 755,385 Class B units authorized, issued and outstanding	204,952	224,147
Total capital shares and equities	204,952	224,147
Total liabilities and capital shares and equities	$ 212,611	$ 259,401

Balance Sheets (Unaudited) (Par

Balance Sheets (Unaudited) (Parenthetical) - shares	Sep. 29, 2018	Dec. 30, 2017
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. 29, 2018	Sep. 30, 2017	Sep. 29, 2018	Sep. 30, 2017
Net sales	$ 0	$ 0	$ 0	$ 0
Costs and expenses:
Cost of sales	0	0	0	0
Selling, general, and administrative expenses	813	859	3,345	2,760
Depreciation and amortization	3	3	9	9
Total costs and expenses	816	862	3,354	2,769
Operating loss	(816)	(862)	(3,354)	(2,769)
Other income (expense):
Interest income	283	113	741	184
Interest expense	(3)	(3)	(9)	(9)
Equity in net income of National Beef Packing Company, LLC	29,463	26,226	68,147	46,601
Other, net	1	27	392	25
Total other expense	29,744	26,363	69,271	46,801
Comprehensive income	$ 28,928	$ 25,501	$ 65,917	$ 44,032
Class A Units [Member]
Earnings per unit:
Basic and diluted	$ 3.93	$ 3.47	$ 8.96	$ 5.99
Outstanding weighted-average Class A and Class B units:
Basic and diluted	735,385	735,385	735,385	735,385
Class B Units [Member]
Earnings per unit:
Basic and diluted	$ 34.47	$ 30.38	$ 78.54	$ 52.46
Outstanding weighted-average Class A and Class B units:
Basic and 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. 29, 2018	Sep. 30, 2017
Cash flows from operating activities:
Comprehensive income	$ 65,917	$ 44,032
Adjustments to reconcile comprehensive income to net cash provided by operating activities:
Depreciation and amortization	9	9
Equity in net income of National Beef Packing Company, LLC	(68,147)	(46,601)
Distributions from National Beef Packing Company, LLC	55,877	19,076
Changes in assets and liabilities:
Due from affiliates	118	(211)
Other assets	58	58
Accounts payable	(55)	(53)
Due to affiliates	(360)	54
Accrued compensation and benefits	(355)	(369)
Other accrued expenses and liabilities	50	(60)
Net cash provided by operating activities	53,112	15,935
Cash flows from investing activities:
Capital expenditures, including interest capitalized	(7)	0
Distributions from National Beef Packing Company, LLC	18,256	7,436
Net cash provided by investing activities	18,249	7,436
Cash flows from financing activities:
Change in Distributions Payable	(26,875)	(1,159)
Partnership distributions and redemptions	(85,112)	(25,895)
Net cash used in financing activities	(111,987)	(27,054)
Net decrease in cash	(40,626)	(3,683)
Cash and cash equivalents at beginning of the period	119,074	85,230
Cash and cash equivalents at end of the period	$ 78,448	$ 81,547

1. Interim Financial Statements

1. Interim Financial Statements	9 Months Ended
	Sep. 29, 2018
Quarterly Financial Information Disclosure [Abstract]
Interim Financial Statements	(1) Interim Financial Statements Basis of Presentation and Significant Accounting Policies 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 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 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 (SEC), for the fiscal year ended December 30, 2017. 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. In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases. The new standard requires the recognition of all leases that are longer than one year on the balance sheet, which will result in the recognition of a right-of-use asset and a corresponding lease liability. The right-of -use asset and lease liability will be measured initially using the present value of the remaining rental payments. The new standard is effective for annual and interim periods beginning after December 15, 2018. We are currently evaluating the impact of the new guidance but do not believe it will have a material impact on our financial statements.

2. Members' Capital

2. Members' Capital	9 Months Ended
	Sep. 29, 2018
Members' Equity [Abstract]
Members' Capital	(2) Members’ Capital The following table represents a reconciliation of Members’ Capital for the thirty-nine week period ended September 29, 2018 (thousands of dollars). Balance at December 30, 2017 $ 224,147 Allocation of comprehensive income for the thirty-nine week period ended September 29, 2018 65,917 Member distributions (85,112) Balance at September 29, 2018 $ 204,952

3. Earnings Per Unit

3. Earnings Per Unit	9 Months Ended
	Sep. 29, 2018
Earnings per unit:
Earnings Per Unit	(3) 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 to Class A units and the remainder is allocated to Class B units. For the thirteen and thirty-nine week periods ended September 29, 2018 and fourteen and thirty-nine week periods ended September 30, 2017, 10% of USPB’s comprehensive income was 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. Comprehensive Income Per Unit Calculation 13 weeks ended 14 weeks ended 39 weeks ended 39 weeks ended (thousands of dollars, except unit and per unit data) September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Basic and diluted earnings per unit: Comprehensive income attributable to USPB available to unitholders (numerator) Class A $ 2,893 $ 2,550 $ 6,592 $ 4,403 Class B $ 26,035 $ 22,951 $ 59,325 $ 39,629 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 $ 3.93 $ 3.47 $ 8.96 $ 5.99 Class B $ 34.47 $ 30.38 $ 78.54 $ 52.46

4. Investment in National Beef

4. Investment in National Beef Packing Company, LLC	9 Months Ended
	Sep. 29, 2018
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
Investment in National Beef Packing Company, LLC	(4) 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 29, 2018 and fourteen and thirty-nine week periods ended September 30, 2017 (thousands of dollars): 13 weeks ended 14 weeks ended 39 weeks ended 39 weeks ended September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 1,880,561 $ 2,038,823 $ 5,605,170 $ 5,472,340 Costs and expenses: Cost of sales 1,637,216 1,816,473 5,014,815 5,030,882 Selling, general, and administrative expenses 18,858 19,974 56,010 56,085 Depreciation and amortization 26,121 26,664 77,445 73,522 Total costs and expenses 1,682,195 1,863,111 5,148,270 5,160,489 Operating income 198,366 175,712 456,900 311,851 Other income (expense): Interest income 88 57 233 230 Interest expense (2,718) (1,710) (8,196) (5,780) Other, net 318 418 4,646 3,705 Income before taxes 196,054 174,477 453,583 310,006 Income tax expense (585) (482) (1,468) (833) Net income $ 195,469 $ 173,995 $ 452,115 $ 309,173 NBP's net income attributable to USPB $ 29,463 $ 26,226 $ 68,147 $ 46,601

2. Members' Capital (Tables)

2. Members' Capital (Tables)	9 Months Ended
	Sep. 29, 2018
Members' Equity [Abstract]
Schedule of Reconciliation of Members' Capital	Balance at December 30, 2017 $ 224,147 Allocation of comprehensive income for the thirty-nine week period ended September 29, 2018 65,917 Member distributions (85,112) Balance at September 29, 2018 $ 204,952

3. Earnings Per Unit (Tables)

3. Earnings Per Unit (Tables)	9 Months Ended
	Sep. 29, 2018
Limited Liability Company (LLC) Members' Equity [Abstract]
Schedule of Income (Loss) Per Unit Calculation	Comprehensive Income Per Unit Calculation 13 weeks ended 14 weeks ended 39 weeks ended 39 weeks ended (thousands of dollars, except unit and per unit data) September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 Basic and diluted earnings per unit: Comprehensive income attributable to USPB available to unitholders (numerator) Class A $ 2,893 $ 2,550 $ 6,592 $ 4,403 Class B $ 26,035 $ 22,951 $ 59,325 $ 39,629 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 $ 3.93 $ 3.47 $ 8.96 $ 5.99 Class B $ 34.47 $ 30.38 $ 78.54 $ 52.46

4. Investment in National Bee_2

4. Investment in National Beef Packing Company, LLC (Tables)	9 Months Ended
	Sep. 29, 2018
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
Schedule of Operations for NBP	13 weeks ended 14 weeks ended 39 weeks ended 39 weeks ended September 29, 2018 September 30, 2017 September 29, 2018 September 30, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 1,880,561 $ 2,038,823 $ 5,605,170 $ 5,472,340 Costs and expenses: Cost of sales 1,637,216 1,816,473 5,014,815 5,030,882 Selling, general, and administrative expenses 18,858 19,974 56,010 56,085 Depreciation and amortization 26,121 26,664 77,445 73,522 Total costs and expenses 1,682,195 1,863,111 5,148,270 5,160,489 Operating income 198,366 175,712 456,900 311,851 Other income (expense): Interest income 88 57 233 230 Interest expense (2,718) (1,710) (8,196) (5,780) Other, net 318 418 4,646 3,705 Income before taxes 196,054 174,477 453,583 310,006 Income tax expense (585) (482) (1,468) (833) Net income $ 195,469 $ 173,995 $ 452,115 $ 309,173 NBP's net income attributable to USPB $ 29,463 $ 26,226 $ 68,147 $ 46,601

1. Interim Financial Statemen_2

1. Interim Financial Statements (Details Narrative)	Sep. 29, 2018
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. 29, 2018USD ($)
Members' Equity [Abstract]
Beginning balance	$ 224,147
Allocation of comprehensive income	65,917
Member distributions	(85,112)
Ending balance	$ 204,952

3. Earnings Per Unit (Details)

3. Earnings Per Unit (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 29, 2018	Sep. 30, 2017	Sep. 29, 2018	Sep. 30, 2017
Basic and diluted earnings per unit
Comprehensive income attributable to USPB unitholders (numerator)			$ 65,917
Class A Units [Member]
Basic and diluted earnings per unit
Comprehensive income attributable to USPB unitholders (numerator)	$ 2,893	$ 2,550	$ 6,592	$ 4,403
Weighted average outstanding units (denominator)	735,385	735,385	735,385	735,385
Per unit amount	$ 3.93	$ 3.47	$ 8.96	$ 5.99
Class B Units [Member]
Basic and diluted earnings per unit
Comprehensive income attributable to USPB unitholders (numerator)	$ 26,035	$ 22,951	$ 59,325	$ 39,629
Weighted average outstanding units (denominator)	755,385	755,385	755,385	755,385
Per unit amount	$ 34.47	$ 30.38	$ 78.54	$ 52.46

3. Earnings Per Unit (Details N

3. Earnings Per Unit (Details Narrative)	9 Months Ended
	Sep. 29, 2018
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%

4. Investment in National Bee_3

4. Investment in National Beef Packing Company, LLC (Details) - National Beef Packing Company, LLC [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 29, 2018	Sep. 30, 2017	Sep. 29, 2018	Sep. 30, 2017
Investment in National Beef Packing
Net sales	$ 1,880,561	$ 2,038,823	$ 5,605,170	$ 5,472,340
Costs and expenses:
Cost of sales	1,637,216	1,816,473	5,014,815	5,030,882
Selling, general, and administrative expenses	18,858	19,974	56,010	56,085
Depreciation and amortization	26,121	26,664	77,445	73,522
Total costs and expenses	1,682,195	1,863,111	5,148,270	5,160,489
Operating income	198,366	175,712	456,900	311,851
Other income (expense):
Interest income	88	57	233	230
Interest expense	(2,718)	(1,710)	(8,196)	(5,780)
Other, net	318	418	4,646	3,705
Income before taxes	196,054	174,477	453,583	310,006
Income tax expense	(585)	(482)	(1,468)	(833)
Net income	195,469	173,995	452,115	309,173
NBP's net income attributable to USPB	$ 29,463	$ 26,226	$ 68,147	$ 46,601