**UNITEDSTATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington****, D.C. 20549**

**FORM 10-Q**

**(Mark one)**

| þ |   | **QUARTERLY REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|--------|--------|----------------------------------------------------------------------------------------------|

 

|                                                 |
|------------------------------------------------------|
| **For the quarterly period ended February 27, 2010** |
| **or**                                               |

 

| o |   | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|---|--------|-----------------------------------------------------------------------------------------------|

 

|                                                                                                                                                                                                          |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **For the transition period from                  to               .** |
| ** **                                                                                                                                                                                                    |

**Commission file number 333-115164**

 **U.S.****PREMIUM BEEF, LLC***(Exact name of registrant as specified in its charter)*

| **DELAWARE**                                                        |   | **20-1576986**                            |
|---------------------------------------------------------------------|--------|-------------------------------------------|
| **(State  or other jurisdiction of incorporation or organization)** |   | **(I.R.S.  Employer Identification No.)** |

**12200  North Ambassador Drive****Kansas  City****, MO 64163******(Addressof principal executive offices) 

**Telephone:(866) 877-2525**(Registrant’stelephone number, including area code) 

Indicate by checkmark whether the registrant (1) has filed all reports required to be filedby Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes þ No o

 Indicate by checkmark whether the registrant has submitted electronically and posted on itscorporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files).   Yes o No o

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer,a non-accelerated filer or a small reporting company.  See definition of“accelerated filer”, “large accelerated filer” and “smaller reporting company”in Rule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated Filer o   | Accelerated Filer o | Non-Accelerated Filer þ | Small Reporting Company o |
|---------------------------------------|---------------------|------------------------------|---------------------------|

Indicateby check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act). Yes o No þ

The registrant’s unitsare not traded on an exchange or in any public market.  As of March 27, 2010,there were 735,385 Class A units and 755,385 Class B unitsoutstanding.     

 

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|                  | **TABLE OF CONTENTS**

                                                                 |         |
|-----------------------|----------------------------------------------------------------------------------------------|--------------|
| **PART I.**           | **FINANCIAL INFORMATION**                                                                    | **Page No.** |
|                  |                                                                                         |         |
| Item 1.               | Financial Statements.                                                                        | 1            |
|                  |                                                                                         |         |
| Item 2.               | Management’s  Discussion and Analysis of Financial Condition and Results of Operations. | 11           |
|                  |                                                                                         |         |
| Item 3.               | Quantitative and Qualitative Disclosures About Market Risk.                                  | 16           |
|                  |                                                                                         |         |
| Item 4T.              | Controls and Procedures.                                                                     | 18           |
|                  |                                                                                         |         |
|                  |                                                                                         |         |
| **PART II.**          | **OTHER INFORMATION**                                                                        |         |
|                  |                                                                                         |         |
| Item 1.               | Legal Proceedings.                                                                           | 19           |
|                  |                                                                                         |         |
|    Item 1A. | Risk Factors.                                                                                | 19           |
|                  |                                                                                         |         |
| Item 2.               | Unregistered Sales of Equity Securities and Use of Proceeds.                                 | 19           |
|                  |                                                                                         |         |
| Item 3.               | Defaults Upon Senior Securities.                                                             | 19           |
|                  |                                                                                         |         |
| Item 4.               | Submission of Matters to a Vote of Security Holders.                                         | 19           |
|                  |                                                                                         |         |
| Item 5.               | Other Information.                                                                           | 19           |
|                  |                                                                                         |         |
| Item 6.               | Exhibits.                                                                               | 19           |
|                  |                                                                                         |         |
|                  | Signatures.                                                                                  | 20           |

 

 

Unless the context indicates orotherwise requires, the terms “the Company”, “we”, “our” and “us” refer to U.S.Premium Beef, LLC (formerly known as U.S. Premium Beef, Ltd.) and itsconsolidated subsidiaries. As used in this report, the terms “NBP” and“National Beef” refer to National Beef Packing Company, LLC (formerly known asFarmland National Beef Packing Company, LP), a Delaware limited liabilitycompany, and “USPB” refers to U.S. Premium Beef, LLC (formerly known U.S.Premium Beef, Ltd.) prior to consolidation. 

 

 

 

 

 

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**PART I.  FINANCIAL INFORMATION**

** **

**Item 1.  Financial Statements.**

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

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| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                       |
|--------------------------------------------------------------------------------------------|
| **Consolidated Balance Sheets**                                                  |
| (in thousands, except unit data)                                       |
|                                                                                       |   |   |   |   |   |   |   | **February 27,** |   | **August 29,** |
|                                                                                       |   |   |   |   | **Assets** | **2010** |   | **2009** |
|                                                                                       |   |   |   |   |   |   |   | **(unaudited)** |   |   |
| Current assets:                                                                       |   |   |   |   |   |   |   |   |
|                                                                                       | Cash and cash equivalents |   |   |   |   | $ | 25,523  |   | $ | 18,853  |
|                                                                                       | Accounts receivable, less allowance for returns and doubtful accounts |   |   |   |
|                                                                                       |   | of $2,289 and $1,511, respectively |   |   | 171,680  |   | 172,421  |
|                                                                                       | Due from affiliates |   |   |   |   | 4,087  |   | 4,586  |
|                                                                                       | Other receivables |   |   |   |   | 7,364  |   | 7,165  |
|                                                                                       | Inventories |   |   |   |   |   | 188,552  |   | 175,300  |
|                                                                                       | Other current assets |   |   |   |   | 18,054  |   | 16,602  |
|                                                                                       |   | Total current assets |   |   |   |   | 415,260  |   | 394,927  |
| Property, plant, and equipment, at cost                           |   |   |   | 516,902  |   | 499,977  |
|                                                                                       | Less accumulated depreciation |   |   |   | 198,614  |   | 175,103  |
|                                                                                       |   | Net property, plant, and equipment |   |   | 318,289  |   | 324,874  |
| Goodwill                                                                                   |   |   |   |   |   | 86,251  |   | 86,251  |
| Other intangible assets, net of accumulated amortization     |   |   |   |
|                                                                                       | of $14,098 and $12,123, respectively |   |   | 60,333  |   | 62,302  |
| Other assets                                                                          |   |   |   |   |   | 5,641  |   | 4,594  |
|                                                                                       |   | Total assets |   |   |   |   | $ | 885,774  |   | $ | 872,948  |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |
|                                                                                       |   |   | **Liabilities and Capital Shares and Equities** |   |   |   |
| Current liabilities:                                                                  |   |   |   |   |   |   |   |   |
|                                                                                       | Current installments of long-term debt |   |   | $ | 10,443  |   | $ | 12,488  |
|                                                                                       | Cattle purchases payable |   |   |   |   | 52,068  |   | 49,806  |
|                                                                                       | Accounts payable - trade |   |   |   |   | 61,510  |   | 69,303  |
|                                                                                       | Due to affiliates |   |   |   |   | 1,072  |   | 1,048  |
|                                                                                       | Accrued compensation and benefits |   |   |   | 43,926  |   | 56,553  |
|                                                                                       | Accrued insurance |   |   |   |   | 16,123  |   | 16,344  |
|                                                                                       | Other accrued expenses and liabilities |   |   | 10,389  |   | 15,160  |
|                                                                                       | Distributions payable |   |   |   |   | 18,653  |   | 10,942  |
|                                                                                       |   | Total current liabilities |   |   |   |   | 214,184  |   | 231,644  |
| Long-term liabilities:                                                                |   |   |   |   |   |   |   |
|                                                                                       | Long-term debt, excluding current installments | 290,828  |   | 293,400  |
|                                                                                       | Other liabilities |   |   |   |   | 2,223  |   | 2,364  |
|                                                                                       |   | Total long-term liabilities |   |   |   | 293,051  |   | 295,764  |
|                                                                                       |   | Total liabilities |   |   |   |   | 507,235  |   | 527,408  |
|                                                                                       | Noncontrolling interest in NBP |   |   |   | 228,056  |   | 183,407  |
| Capital shares and equities:                                                |   |   |   |   |   |   |   |
|                                                                                       | Members' capital, 735,385 Class A units and 755,385 Class B units |   |   |   |
|                                                                                       |   | authorized, issued and outstanding |   |   | 99,116  |   | 111,085  |
|                                                                                       | Patronage notices |   |   |   |   | 48,682  |   | 48,682  |
|                                                                                       | Accumulated other comprehensive income (loss) attributable to USPB | 17  |   | (1) |
|                                                                                       |   | Total capital shares and equities attributable to USPB | 147,815  |   | 159,766  |
|                                                                                       | Noncontrolling interest in Kansas City Steak Company, LLC | 2,668  |   | 2,367  |
|                                                                                       |   | Total Capital Shares and Equities |   |   |   | 150,483  |   | 162,133  |
| Commitments and contingencies                                                    |   |   |   | -  |   | -  |
|                                                                                       |   | Total liabilities, noncontrolling interest in NBP and capital shares and equities | $ | 885,774  |   | $ | 872,948  |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to consolidated financial statements. |   |   |   |

** **

 2

 

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| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                            |
|-------------------------------------------------------------------------------------------------|
| **Consolidated Statements of Operations**                                        |
| (in thousands, except per unit and per unit data)       |
|                                                                                            |   |   |   |   |   |   | **13 weeks ended** |   | **13 weeks ended** |   | **26 weeks ended** |   | **26 weeks ended** |
|                                                                                            |   |   |   |   |   |   | **February 27, 2010** |   | **February 28, 2009** |   | **February 27, 2010** |   | **February 28, 2009** |
|                                                                                            |   |   |   |   |   |   | **(unaudited)** |   | **(unaudited)** |   | **(unaudited)** |   | **(unaudited)** |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                                                  |   |   |   |   | $ | 1,340,926  |   | $ | 1,298,218  |   | $ | 2,683,536  |   | $ | 2,727,195  |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs and expenses:                                                                   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            | Cost of sales |   |   |   | 1,259,860  |   | 1,236,297  |   | 2,533,171  |   | 2,640,335  |
|                                                                                            | Selling, general, and administrative expenses |   |   | 13,596  |   | 10,021  |   | 26,786  |   | 22,907  |
|                                                                                            | Depreciation and amortization |   |   |   | 13,225  |   | 11,269  |   | 25,983  |   | 21,239  |
|                                                                                            |   | Total costs and expenses |   |   |   | 1,286,681  |   | 1,257,587  |   | 2,585,940  |   | 2,684,481  |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |   | Operating income |   |   |   | 54,245  |   | 40,631  |   | 97,596  |   | 42,714  |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                                                               |   |   |   |   |   |   |   |   |   |   |
|                                                                                            | Interest income |   |   |   | 6  |   | 63  |   | 36  |   | 245  |
|                                                                                            | Interest expense |   |   |   | (3,539) |   | (5,601) |   | (8,102) |   | (12,454) |
|                                                                                            | Equity in loss of aLF Ventures, LLC |   |   |   | -  |   | (24) |   | -  |   | (49) |
|                                                                                            | Termination Fee |   |   |   | -  |   | 14,572  |   | -  |   | 14,572  |
|                                                                                            | Other, net |   |   |   | (3,785) |   | (4,237) |   | (3,780) |   | (3,845) |
|                                                                                            |   |   | Income before taxes |   |   |   | 46,927  |   | 45,404  |   | 85,750  |   | 41,183  |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax benefit (expense)                                                     |   |   |   | 48  |   | (192) |   | (352) |   | (561) |
|                                                                                            |   |   | Net income |   |   |   | 46,975  |   | 45,212  |   | 85,398  |   | 40,622  |
| Less: Net income attributable to noncontrolling interest in: |   |   |   |   |   |   |   |
|                                                                                            | Kansas City Steak Company, LLC |   |   |   | (568) |   | (546) |   | (791) |   | (717) |
|                                                                                            | National Beef Packing Company, LLC |   |   |   | (15,174) |   | (13,236) |   | (27,909) |   | (11,720) |
| Net income attributable to U.S. Premium Beef, LLC            |   |   | $ | 31,233  |   | $ | 31,430  |   | $ | 56,698  |   | $ | 28,185  |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per unit:                                                                    |   |   |   |   |   |   |   |   |   |   |
|                                                                                            | Basic |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   | Class A units |   |   |   | $ | 4.25  |   | $ | 14.10  |   | $ | 13.95  |   | $ | 12.65  |
|                                                                                            |   | Class B units |   |   |   | $ | 37.21  |   | $ | 28.64  |   | $ | 61.48  |   | $ | 25.68  |
|                                                                                            | Diluted |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   | Class A units |   |   |   | $ | 4.18  |   | $ | 13.90  |   | $ | 13.72  |   | $ | 12.46  |
|                                                                                            |   | Class B units |   |   |   | $ | 37.21  |   | $ | 28.22  |   | $ | 61.48  |   | $ | 25.31  |
|                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding weighted-average Class A and Class B units:      |   |   |   |   |   |   |   |
|                                                                                            | Basic |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   | Class A units |   |   |   | 735,385  |   | 735,385  |   | 735,385  |   | 735,385  |
|                                                                                            |   | Class B units |   |   |   | 755,385  |   | 735,385  |   | 755,385  |   | 735,385  |
|                                                                                            | Diluted |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   | Class A units |   |   |   | 747,471  |   | 746,218  |   | 747,471  |   | 746,218  |
|                                                                                            |   | Class B units |   |   |   | 755,385  |   | 746,218  |   | 755,385  |   | 746,218  |
| See accompanying notes to consolidated financial statements.      |   |   |   |   |   |   |   |

** **

 3

 

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| **U.S. PREMIUM BEEF, LLC AND SUBSIDIARIES**                         |
|----------------------------------------------------------------------------------------------|
| **Consolidated Statements of Cash Flows**                                |
| (in thousands)                                                                          |
|                                                                                         |   |   |   |   |   | **26 weeks ended** |   | **26 weeks ended** |
|                                                                                         |   |   |   |   |   | **February 27, 2010** |   | **February 28, 2009** |
|                                                                                         |   |   |   |   |   | **(unaudited)** |   | **(unaudited)** |
| Cash flows from operating activities:                                    |   |   |   |   |
|                                                                                         | Net income |   |   | $ | 85,398  |   | $ | 40,622  |
|                                                                                         | Adjustments to reconcile net income to net cash provided by |   |   |   |   |
|                                                                                         |   | operating activities: |   |   |   |   |
|                                                                                         |   | Depreciation and amortization |   | 25,983  |   | 21,239  |
|                                                                                         |   | Termination Fee |   | -  |   | (14,572) |
|                                                                                         |   | (Gain) loss on disposal of property, plant, and equipment |   | (120) |   | 132  |
|                                                                                         |   | Write-off of Debt Issuance Costs |   | 418  |   | -  |
|                                                                                         |   | Changes in assets and liabilities: |   |   |   |   |
|                                                                                         |   |   | Accounts receivable |   | 741  |   | 52,240  |
|                                                                                         |   |   | Due from affiliates |   | 501  |   | 4,194  |
|                                                                                         |   |   | Other receivables |   | (199) |   | (655) |
|                                                                                         |   |   | Inventories |   | (13,252) |   | 24,950  |
|                                                                                         |   |   | Other assets |   | (1,818) |   | (15,773) |
|                                                                                         |   |   | Cattle purchases payable |   | 223  |   | (561) |
|                                                                                         |   |   | Accounts payable |   | (4,818) |   | (11,688) |
|                                                                                         |   |   | Due to affiliates |   | 22  |   | (653) |
|                                                                                         |   |   | Accrued compensation and benefits |   | (12,627) |   | (23,793) |
|                                                                                         |   |   | Accrued insurance |   | (221) |   | 906  |
|                                                                                         |   |   | Other accrued expenses and liabilities |   | (4,912) |   | 20,069  |
|                                                                                         |   |   |   | Net cash provided by operating activities |   | 75,319  |   | 96,657  |
| Cash flows from investing activities:                                    |   |   |   |   |
|                                                                                         | Capital expenditures, including interest capitalized |   | (17,986) |   | (17,996) |
|                                                                                         | Termination Fee |   | -  |   | 14,572  |
|                                                                                         | Proceeds from sale of property, plant, and equipment |   | 683  |   | 894  |
|                                                                                         |   | Net cash used in investing activities |   | (17,303) |   | (2,530) |
| Cash flows from financing activities:                                    |   |   |   |   |
|                                                                                         | Net receipts under revolving credit lines |   | 16,100  |   | 1,451  |
|                                                                                         | Borrowings under term note payable |   | 75,000  |   | -  |
|                                                                                         | Payments of term notes payable |   | (23,617) |   | (26,227) |
|                                                                                         | Repayments of other indebtedness / capital leases |   | (5,245) |   | (4,200) |
|                                                                                         | Purchase and cancellation of senior notes |   | (66,855) |   | -  |
|                                                                                         | Cash paid for financing costs |   | (1,103) |   | -  |
|                                                                                         | Change in overdraft balances |   | 14,191  |   | (17,383) |
|                                                                                         | Distributions to noncontrolling interests in National Beef Packing Company, LLC | (21,767) |   | (20,204) |
|                                                                                         | Member distributions |   | (38,068) |   | (32,541) |
|                                                                                         |   |   |   | Net cash used in financing activities |   | (51,364) |   | (99,104) |
|                                                                                         | Effect of exchange rate changes on cash |   | 18  |   | (74) |
|                                                                                         |   |   |   | Net increase (decrease) in cash |   | 6,670  |   | (5,051) |
| Cash and cash equivalents at beginning of the period |   | 18,853  |   | 77,399  |
| Cash and cash equivalents at end of the period       |   | $ | 25,523  |   | $ | 72,348  |
| Supplemental cash disclosures:                                                     |   |   |   |   |
|                                                                                         | Cash paid during the period for interest |   | $ | 8,212  |   | $ | 12,097  |
|                                                                                         | Cash paid (received) during the period for taxes, net of $0 and $925 refunds, | $ | 9  |   | $ | (798) |
|                                                                                         |   | respectively |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.   |   |   |   |   |

** **

 

4

 

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**U.S. PREMIUMBEEF, LLC AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)**

** **

**(1)Interim Financial Statements**

**Basisof Presentation**

The accompanying unaudited Consolidated FinancialStatements have been prepared in accordance with U.S. generally acceptedaccounting principles (GAAP) for interim financial information; therefore, theydo not include all of the information and footnotes required by GAAP forcomplete financial statements. In the opinion of management, all adjustmentsconsidered necessary for a fair presentation have been included usingmanagement’s best estimates and judgments where appropriate.  These estimatesand judgments affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements.  The estimates and judgments will also affect the reported amountsfor certain revenues and expenses during the reporting period.  Actual resultscould differ materially from these estimates and judgments.  For furtherinformation, refer to the audited Consolidated Financial Statements and Notesto Consolidated Financial Statements, which are included in the Company’s AnnualReport on Form 10-K on file with the Securities and Exchange Commission (SEC)for the fiscal year ended August 29, 2009.  The results of operations for theinterim periods presented are not necessarily indicative of the results for afull fiscal year.  

NB Finance Corp., a wholly-owned finance subsidiary ofNBP, is a co-issuer on a joint and several basis with NBP of the senior notes,which were NBP’s senior unsecured obligations, ranking equal in right ofpayment with all of its other senior unsecured obligations.  The senior noteswere retired on January 11, 2010.  NB Finance Corp. has nominal assets andconducts no business or operations. There are no significant restrictions onthe ability of subsidiaries to transfer funds to NBP.

**(2)New Accounting Pronouncements**

On June 29, 2009, the Financial Accounting StandardsBoard (FASB) issued *FASB Accounting Standards Codification* (ASC) underASC 105-10 as the source of authoritative accounting principles recognized bythe FASB to be applied by nongovernmental entities.  This pronouncement waseffective for financial statements issued for interim and annual periods endingafter September 15, 2009 for most entities.  On the effective date, all non-SECaccounting and reporting standards was superseded.  Rules and interpretivereleases of the SEC under the authority of federal securities laws are alsosources of authoritative U.S. GAAP for SEC registrants.  All other accountingliterature is considered non-authoritative.  The switch to ASC affects themanner in which companies refer to U.S. GAAP in financial statements and notedisclosures.  The Company adopted this body of accounting for the quarterlyperiod ended November 28, 2009, as required, and adoption did not have amaterial impact on our consolidated financial statements taken as a whole.  

In December 2007, the FASB issued *BusinessCombinations*under ASC 805.* *This statement requires an acquirer torecognize the assets acquired, the liabilities assumed, and any noncontrollinginterest in the acquiree at the acquisition date to be measured at their fairvalue as of that date.  An acquirer is required to recognize assets orliabilities arising from all other contingencies (contractual contingencies) asof the acquisition date, measured at their acquisition-date fair values, onlyif it is more likely than not that they meet the definition of an asset or aliability in FASB Concepts Statement No. 6, *Elements of FinancialStatements.*  Any acquisition-related costs are to be expensed instead ofcapitalized.  The Company adopted ASC 805 on August 30, 2009 and the impactwill depend on future acquisitions at the time.

Also in December 2007, the FASB issued *NoncontrollingInterests in Consolidated Financial Statements - an Amendment of ARB No. 51*under ASC 810-10-65 which establishes accounting and reporting standards forthe noncontrolling interest (minority interest) in a subsidiary.  ASC810-10-65 requires non-controlling interests held by parties other than theparent in subsidiaries be clearly identified, labeled, and presented in theconsolidated balance sheet within equity, but separate from the parent'sequity.  The Company’s adoption of ASC 810-10-65 as of August 30,2009 changed the presentation of the non-controlling interest.

 

5

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In February 2008, the FASB issued *Fair ValueMeasurements* under ASC 820-10 which deferred the effective date of fairvalue measurement for nonfinancial assets and nonfinancial liabilities, exceptfor items that are recognized or disclosed at fair value in an entity’sfinancial statements on a recurring basis, at least annually.   There was noimpact when the Company adopted for these nonfinancial assets and nonfinancialliabilities on August 30, 2009.  These assets and liabilities are measured atfair value on an ongoing basis but are reported at fair value only in certaincircumstances. 

**(3)Inventories**

Inventories at February 27, 2010 and August 29, 2009 consistedof the following (in thousands):
|                                                | **February 27, 2010** |         | **August 29, 2009** |
|-----------------------------------------------------|---------------------------------|--------------|-------------------------------|
|                                                |                            |         |                          |   |
| Dressed and boxed meat products |                            | $            | 121,479                  |   | $ | 119,274  |
| Beef by-products                               |                            | 39,085  |                          | 29,756  |
| Supplies and other                        |                            | 27,988  |                          | 26,270  |
|                                                |                            | $            | 188,552                  |   | $ | 175,300  |
|                                                |                            |         |                          |   |

** **

**(4)Comprehensive Income Attributable to USPB**

Comprehensive income, which consists of net income andforeign currency translation adjustments, was as follows for the periodsindicated (in thousands): 

|                                                                                          |                                                    |                      | **13 weeks ended**    |   | **13 weeks ended**    |         | **26 weeks ended**    |         | **26 weeks ended**    |
|-----------------------------------------------------------------------------------------------|---------------------------------------------------------|---------------------------|---------------------------------|--------|---------------------------------|--------------|---------------------------------|--------------|---------------------------------|
|                                                                                          |                                                    |                      | **February 27, 2010** |   | **February 28, 2009** |         | **February 27, 2010** |         | **February 28, 2009** |
| Net income                                                                               |                                                    | $                         | 46,975                     |   | $                               | 45,212  |                            | $            | 85,398                     |   | $ | 40,622  |
| Other comprehensive (loss) income:                                             |                                                    |                      |                            |   |                            |         |                            |         |
|                                                                                          | Foreign currency translation adjustments |                      | (4)                             |   | (8)                             |         | 18                         |         | (74)                            |
|                                                                                          |                                                    | Comprehensive income |                            | $      | 46,971                     |         | $                               | 45,204  |                            | $ | 85,416  |   | $ | 40,548  |
| Comprehensive income attibutable to noncontrolling interest in: |                                                    |                      |                            |   |                            |         |                            |         |
|                                                                                          | Kansas City Steak Company, LLC      |                      | (568)                           |   | (546)                           |         | (791)                           |         | (717)                           |
|                                                                                          | National Beef Packing Company, LLC  |                      | (15,174)                        |   | (13,236)                        |         | (27,909)                        |         | (11,720)                        |
| Comprehensive income attributable to USPB                                 |                                                    | $                         | 31,229                     |   | $                               | 31,422  |                            | $            | 56,716                     |   | $ | 28,111  |

** **

**(5)Noncontrolling Interests In NBP**

At any time after certaindates, the earliest being July 31, 2010, the latest being July 31, 2011, NBP’sChief Executive Officer, Timothy M. Klein (Mr. Klein), and/or NBPCo Holdingshave the right to request that NBP repurchase their interests in NBP, the valueof which is to be determined by a specified formula or a mutually agreedprocess.  If NBP is unable to effect the repurchase within a specified time,the requesting member(s) have the right to cause a sale process to commence.

GAAPrequires the Company to determine the fair value of the noncontrollinginterests in NBP at the end of each reporting period.  To the extent that thisvalue increases, this change in fair value is accreted over the redemptionperiod as discussed above.  Since the second quarter of fiscal year 2009,management has used certain agreed upon redemption prices that were used in theUnit Redemption Agreements in measuring the fair value of the noncontrollinginterests in NBP held by NBPCo Holdings.  The Unit Redemption Agreement betweenNBP and Mr. Klein and affiliates provides for a formula-based method ofcalculating their Class B interests in NBP which was used in valuing the interestof Mr. Klein and affiliates at February 27, 2010.

TheCompany accounts for changes in the redemption value of the noncontrolling interestsin NBP by accreting the change in value from the date of change through theearliest redemption date of the respective interests in NBP.  At February 27,2010, the value of the noncontrolling interests in NBP was determined to be $264.2million, which was in excess of its carrying value.  Accordingly, the carryingvalue of the noncontrolling interests in NBP increased by approximately $30.6million through accretion during the twenty-six weeks ended February 27, 2010,resulting in the $228.1 million carrying value, as reflected in theaccompanying consolidated balance sheet as of February 27, 2010.     

6

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Thetotal value of the noncontrolling interests in NBP at February 27, 2010increased by approximately $23.6 million compared to the value at August 29,2009.  Offsetting the change in the value of the noncontrolling interests inNBP is a corresponding change in members’ capital. 

**(6)Contingencies**

National Beef Leathers LLC (NBL), a wholly-ownedsubsidiary of NBP, has been named as a defendant in seventeen currently pendinglawsuits involving NBL’s tannery located in St. Joseph, Missouri.  NBLpurchased certain assets of the tannery from Prime Tanning in March 2009.  Thelawsuits are pending in the Circuit Courts of Buchanan County, Clinton County,Ray County, and DeKalb County, Missouri and in the U.S. District Court for theWestern District of Missouri and were filed between April 22, 2009 and March 12,2010.  The lawsuits allege that Prime and NBL spread wastewater sludgecontaining hexavalent chromium in four counties in northwest Missouri.  Thelawsuits currently include fifteen actions filed by individual plaintiffs andtwo purported class actions.  The plaintiffs are seeking an unspecified amountof damages for wrongful death, personal injury, pain and suffering, economicdamages, punitive damages, diminished property values and medical monitoring. NBL is vigorously defending the cases.

  NBP is a party to a number of other lawsuits andclaims arising out of the operation of its business.  Management believes theultimate resolution of such matters should not have a material adverse effecton the Company’s financial condition, results of operations or liquidity.

**(7)Fair Value Measurements**

The Company determines fair value utilizing athree-level fair value hierarchy that prioritizes the inputs used to measurefair value.  The fair value hierarchy gives the highest priority to quotedmarket prices (Level 1) and the lowest priority to unobservable inputs (Level3).  The three levels of inputs used to measure fair value are as follows:

•  Level 1 – quoted prices in active markets foridentical assets or liabilities accessible by the reporting entity.

•  Level 2 – observable inputs other than quoted pricesincluded in Level 1, such as quoted prices for similar assets and liabilitiesin active markets; quoted prices for identical or similar assets andliabilities in markets that are not active; or other inputs that are observableor can be corroborated by observable market data.

•  Level 3 – unobservable inputs for an asset orliability.  Unobservable inputs should only be used to the extent observableinputs are not available.

The following table details the assets and liabilitiesmeasured at fair value on a recurring basis as of February 27, 2010 and August29, 2009 and also the level within the fair value hierarchy used to measureeach category of assets (in thousands).

 

 

7

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|                                                                          |   |                            |          | **Quoted Prices in**   |   |                       |   |                           |
|-------------------------------------------------------------------------------|--------|---------------------------------|---------------|----------------------------------|--------|----------------------------|--------|--------------------------------|
|                                                                          |   |                            |          | **Active Markets for** |   | **Significant Other** |   | **Significant**                |
|                                                                          |   |                            |          | **Identical Assets**        |   | **Observable Inputs** |   | **Unobservable**               |
| **Description**                                                               |   | **February 27, 2010** |          | **(Level 1)**               |   | **(Level 2)**         |   | **Inputs (Level 3)** |
|                                                                          |   |                            |          |                             |   |                       |   |                           |
| Other current assets -derivatives                              |   | $                               | 3,411    |                             | $      | 1,408                 |   | $                              | 2,003  |   | $ | -  |
|                                                                          |   |                            |          |                             |   |                       |   |                           |
| Other accrued expenses and liabilities - derivatives |   | $                               | 861      |                             | $      | 861                   |   | $                              | -  |   | $ | -  |
|                                                                          |   |                            |          |                             |   |                       |   |                           |
| Noncontrolling interests in NBP                                |   | $                               | 228,056  |                             | $      | -                     |   | $                              | 228,056  |   | $ | -  |
|                                                                          |   |                            |          |                             |   |                       |   |                           |
|                                                                          |   |                            |          | **Quoted Prices in**   |   |                       |   |                           |
|                                                                          |   |                            |          | **Active Markets for** |   | **Significant Other** |   | **Significant**                |
|                                                                          |   |                            |          | **Identical Assets**        |   | **Observable Inputs** |   | **Unobservable**               |
| **Description**                                                               |   | **August 29, 2009**   |          | **(Level 1)**               |   | **(Level 2)**         |   | **Inputs (Level 3)** |
|                                                                          |   |                            |          |                             |   |                       |   |                           |
| Other current assets -derivatives                              |   | $                               | 1,442    |                             | $      | 1,442                 |   | $                              | -  |   | $ | -  |
|                                                                          |   |                            |          |                             |   |                       |   |                           |
| Other accrued expenses and liabilities - derivatives |   | $                               | 5,087    |                             | $      | 3,535                 |   | $                              | 1,552  |   | $ | -  |
|                                                                          |   |                            |          |                             |   |                       |   |                           |
| Noncontrolling interests in NBP                                |   | $                               | 183,407  |                             | $      | -                     |   | $                              | 183,407  |   | $ | -  |
|                                                                          |   |                            |          |                             |   |                       |   |                           |

 

The Company has not elected the option to report anyof the selected financial assets and liabilities at fair value.  Management hasused certain agreed upon redemption process in measuring the fair value of thenoncontrolling interest in NBP.

**(8)Disclosure about Derivative Instruments and Hedging Activities**

As part of NBP’s ongoing operations, NBP is exposed to market risks such as changes in commodity prices.  To manage these risks, NBP may enter into the following derivative transactions pursuant to its established policies:

•   Forward purchase contracts for cattle for use in the beefplants

•   Exchange traded futures contracts for cattle

•   Exchange traded futures contracts for grain

While management believes each of these instrumentshelps mitigate various market risks, they are not designated and accounted foras hedges as a result of the extensive recordkeeping requirements associatedwith hedge accounting.  Accordingly, the gains and losses associated with thechange in fair value of the instruments are recorded to net sales and cost of salesin the period of change.  Certain firm commitments for live cattle purchasesand all firm commitments for boxed beef sales are treated as normal purchasesand sales and not recorded at fair value.

NBP enters into certain commodity derivatives, primarilywith a diversified group of highly rated counterparties.  The maximum amount ofloss due to the credit risk of the counterparties, should the counterpartiesfail to perform according to the terms of the contracts, is deemed to beimmaterial as of February 27, 2010 as all derivatives in an asset position areexchange-traded contracts.  The exchange-traded contracts have been enteredinto under a master netting agreement.  None of the derivatives entered intohave credit-related contingent features.  NBP has $3.2 million in cash collateralposted on its derivative liabilities.

Thefollowing table presents the fair values as discussed in Note 7 and otherinformation regarding derivative instruments not designated as hedginginstruments as of February 27, 2010 (in thousands of dollars):

8

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| **February 27, 2010** | **Derivative Asset** |                   | **Derivative Liability** |
|---------------------------------|---------------------------|------------------------|-------------------------------|
|                            |                      | **Balance Sheet** |                          |   |   | **Balance Sheet** |   |   |
|                            |                      | **Location**           |                          | **Fair Value** |   | **Location** |   | **Fair Value** |
|                            |                      |                   |                          |   |   |   |   | Accrued |   |   |
|                            |                      | Other current     |                          |   |   | expenses and |   |   |
| Commodity contracts        | assets                    |                   | $                             | 3,411  |   | other liabilities |   | $ | 861  |
|                            | Total                     |                   |                          |   |   | $ | 3,411  |   |   |   | $ | 861  |
| **August 29, 2009**   | **Derivative Asset** |                   | **Derivative Liability** |
|                            |                      | **Balance Sheet** |                          |   |   | **Balance Sheet** |   |   |
|                            |                      | **Location**           |                          | **Fair Value** |   | **Location** |   | **Fair Value** |
|                            |                      |                   |                          |   |   |   |   |   |   |   |
|                            |                      |                   |                          |   |   |   |   | Accrued |   |   |
|                            |                      | Other current     |                          |   |   | expenses and |   |   |
| Commodity contracts        | assets                    |                   | $                             | 1,442  |   | other liabilities |   | $ | 5,087  |
|                            | Total                     |                   |                          |   |   | $ | 1,442  |   |   |   | $ | 5,087  |
|                            |                      |                   |                          |   |   |   |   |   |   |   |

 

Thefollowing table presents the impact of derivative instruments on the ConsolidatedStatement of Operations for the thirteen and twenty-six week period ended February27, 2010 (in thousands of dollars):

 
| **Derivatives Not**            |   | **Location of Gain (Loss)** |   |                                                             |                                |        |                        |
|-------------------------------------|--------|--------------------------------------------|--------|------------------------------------------------------------------|-------------------------------------|-------------|-----------------------------|
| **Designated as Hedging** |   | **Recognized in Income on** |   | **Amount of Gain (Loss) Recognized in** |
| **Instruments**                     |   | **Derivatives**                            |   |                                                             | **Income On Derivatives** |
|                                |   |                                       |   |                                                             |                                |        | 13 weeks ended    |   | 26 weeks ended |
|                                |   |                                       |   |                                                             |                                |        | February 27, 2010 |   | February 27, 2010 |
|                                |   |                                       |   |                                                             |                                |        |                        |   |   |   |
| Commodity contracts            |   | Net sales                             |   |                                                             | $                                   | 3,588  |                        | $ | (3,169) |
| Commodity contracts            |   | Cost of sales                    |   |                                                             | 4,393                          |        | 7,937                  |
|                                | Total  |                                       |   |                                                             |                                | $           | 7,981                  |   | $ | 4,768  |
|                                |   |                                       |   |                                                             |                                |        |                        |   |   |   |

** **

**(9)Income Attributable to USPB Per Unit**

Under the LLC structure, earnings of the Company areto be distributed to unitholders based on their proportionate share ofunderlying equity, and, as a result, income attributable to USPB per unit (EPU)has been presented in the accompanying Consolidated Statement of Operations andin the table that follows.

Basic EPU excludesdilution and is computed by first allocating a portion of net income attributableto USPB to Class A units and the remainder is allocated to Class B units. OnNovember 2, 2009, the Company’s members approved changing the allocation ofincome from 33% to the Class A’s and 67% to the Class B’s to 10% to the ClassA’s and 90% to the Class B’s.  Accordingly, for the thirteen week period endedFebruary 27, 2010, the pro-rata share of income earned was allocated 10% to theClass A’s and 90% to the Class B’s.  For the twenty-six week period ended February27, 2010, the pro-rata share of income earned through November 1, 2009 wasallocated 33% to the Class A’s and 67% to the Class B’s and the remainder ofthe income for the twenty-six week period was allocated 10% to the Class A’sand 90% to the Class B’s.  Income allocated to the Class A and Class B units isthen divided by the weighted-average number of Class A and Class B unitsoutstanding for the period to determine the basic EPU for each respective classof unit.  Class A units and Class B units shall be issued, redeemed, andtransferred together on a one for one basis until the board of directorsdetermines the extent and conditions under which Class A units and Class Bunits may be issued, redeemed, and transferred separately.

Diluted EPU reflects the potential dilution that couldoccur if potential Class A unit purchase rights were exercised or contractualappreciation rights were converted into units.   Upon termination of the CEOemployment agreement and until eighteen months after the termination of the CEOemployment agreement, at the election of the CEO, or upon mutual agreement ofthe Board of the Company and the CEO, the CEO may purchase up to 20,000 Class Aunits, or upon agreement of the CEO and the Board of the Company, the CEO mayconvert the contractual unit appreciation rights to up to 20,000 Class Aunits.  The diluted EPU reflects the circumstances of termination of the CEOemployment agreement, and the election of CEO or agreement by the Board of theCompany and the CEO for the CEO to purchase or convert contractual rights tothe maximum 20,000 Class A units at $55 per unit for the periods as provided inthe CEO employment agreement.  

 

9

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| **Income Per Unit Calculation**                                               |                            |                         |                            |                         |                            |                         |                            |
|----------------------------------------------------------------------------------------------|---------------------------------|------------------------------|---------------------------------|------------------------------|---------------------------------|------------------------------|---------------------------------|
|                                                                                         |                            | **13 weeks ended** |                            | **13 weeks ended** |                            | **26 weeks ended** |                            | **26 weeks ended** |
| (In thousands, except unit and per unit data)             | **February 27, 2010** |                         | **February 28, 2009** |                         | **February 27, 2010** |                         | **February 28, 2009** |
|                                                                                         |                            | (unaudited)                  |                            | (unaudited)                  |                            | (unaudited)                  |                            | (unaudited) |
| **Basic income per unit**                                                     |                            |                         |                            |                         |                            |                         |                            |
| Income attributable to USPB available to                            |                            |                         |                            |                         |                            |                         |                            |
|                                                                                         | unitholders (numerator)    | $                            | 31,233                     |                         | $                               | 31,430                  |                            | $ | 56,698  |   | $ | 28,185  |
|                                                                                         |                            |                         |                            |                         |                            |                         |                            |   |
| Weighted average outstanding units (denominator)                         |                            |                         |                            |                         |                            |                         |                            |
|                                                                                         | Class A                    | 735,385                 |                            | 735,385                 |                            | 735,385                 |                            | 735,385  |
|                                                                                         | Class B                    | 755,385                 |                            | 735,385                 |                            | 755,385                 |                            | 735,385  |
|                                                                                         |                            |                         |                            |                         |                            |                         |                            |   |
| Per unit amount                                                                    |                            |                         |                            |                         |                            |                         |                            |
|                                                                                         | Class A                    | $                            | 4.25                       |                         | $                               | 14.10                   |                            | $ | 13.95  |   | $ | 12.65  |
|                                                                                         | Class B                    | $                            | 37.21                      |                         | $                               | 28.64                   |                            | $ | 61.48  |   | $ | 25.68  |
|                                                                                         |                            |                         |                            |                         |                            |                         |                            |   |
| **Diluted income per unit:**                                                  |                            |                         |                            |                         |                            |                         |                            |
| Income attributable to USPB available to                            |                            |                         |                            |                         |                            |                         |                            |
|                                                                                         | unitholders (numerator)    | $                            | 31,233                     |                         | $                               | 31,430                  |                            | $ | 56,698  |   | $ | 28,185  |
|                                                                                         |                            |                         |                            |                         |                            |                         |                            |   |
| Weighted average outstanding Class A units                          | 735,385                    |                         | 735,385                    |                         | 735,385                    |                         | 735,385                    |
| Effect of dilutive securities - Class A unit options | 12,086                     |                         | 10,833                     |                         | 12,086                     |                         | 10,833                     |
|                                                                                         | Units (denominator)        | 747,471                 |                            | 746,218                 |                            | 747,471                 |                            | 746,218  |
|                                                                                         |                            |                         |                            |                         |                            |                         |                            |   |
| Weighted average outstanding Class B units                          | 755,385                    |                         | 735,385                    |                         | 755,385                    |                         | 735,385                    |
| Effect of dilutive securities - Class B unit options | -                          |                         | 10,833                     |                         | -                          |                         | 10,833                     |
|                                                                                         | Units (denominator)        | 755,385                 |                            | 746,218                 |                            | 755,385                 |                            | 746,218  |
|                                                                                         |                            |                         |                            |                         |                            |                         |                            |   |
| Per unit amount                                                                    |                            |                         |                            |                         |                            |                         |                            |
|                                                                                         | Class A                    | $                            | 4.18                       |                         | $                               | 13.90                   |                            | $ | 13.72  |   | $ | 12.46  |
|                                                                                         | Class B                    | $                            | 37.21                      |                         | $                               | 28.22                   |                            | $ | 61.48  |   | $ | 25.31  |
|                                                                                         |                            |                         |                            |                         |                            |                         |                            |   |

 

 

**(10)Subsequent Events**

Effectiveas of the close of business on March 27, 2010, the Company’s Board of Directorsdetermined that Class A units and Class B units may be issued, redeemed ortransferred independently.

 

 

 

 

 

10

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

The following discussion shouldbe read in conjunction with our consolidated financial statements and relatednotes and other financial information appearing elsewhere in this report.

**DisclosureRegarding Forward-Looking Statements**

This report contains“forward-looking statements,” which are subject to a number of risks anduncertainties, many of which are beyond our control.  Forward-lookingstatements are typically identified by the words “believe,” “expect,”“anticipate,” “intend,” “estimate” and similar expressions.  Actual resultscould differ materially from those contemplated by these forward-lookingstatements as a result of many factors, including economic conditions generallyand in our principal markets, the availability and prices of live cattle andcommodities, food safety issues, livestock disease, including theidentification of cattle with Bovine Spongiform Encephalopathy (BSE), productcontamination and recall concerns, competitive practices and consolidation inthe cattle production and processing industries and among our customers,actions of domestic or foreign governments, hedging risk, changes in interestrates and foreign currency exchange rates, trade barriers and exchangecontrols, consumer demand and preferences, the cost of compliance withenvironmental and health laws, loss of key customers, loss of key employees,labor relations, and consolidation among our customers.  

In light of these risks anduncertainties, there can be no assurance that the results and eventscontemplated by the forward-looking information contained in this report willin fact transpire. Readers are cautioned not to place undue reliance on theseforward-looking statements. We do not undertake any obligation to update orrevise any forward-looking statements. All subsequent written or oralforward-looking statements attributable to us or persons acting on our behalfare expressly qualified in their entirety by these factors.  See also Part II.Item 1A, *Risk Factors,* included in this report, and Part I,**Item 1A,Risk Factors in our Annual Report on Form 10-K filed with the Securities andExchange Commission for other important factors that could cause actual resultsto differ materially from those in any such forward-looking statements, andwhich should be read in conjunction with this report.

**IndustryOutlook**

Beef prices have responded positively since thebeginning of 2010 due to weather related carcass weight declines, fewer cattleon feed, improved beef exports and smaller beef imports.  The smaller thanexpected domestic beef supply has also found modest support from a economyworking its way slowly out of recession.  Meanwhile, competing meat supplies donot appear burdensome which should keep the overall protein supply in check andcontinue to support stronger year on year cattle and beef prices.  Webelieve that globalbeef and beef by-product demand will continue to improve on gradual economicgains and smaller global protein and by-product production.  For theremainder of 2010 and beyond, we expect that the cattle industry will continue to strugglewith the long term implications of a herd reduction.

**BeefExport Markets**

Exportmarkets for U.S. beef products remain constrained since the discovery of asingle case of BSE in the State of Washington in December 2003, as well asother isolated cases.  In July 2006, Japan agreed to reopen its market to U.S.beef from cattle aged 20 months and younger.   In April 2008, our Brawleyfacility was suspended from shipping beef to Japan following the discovery of ashort loin which included a portion of a spinal column, a specified riskmaterial, prohibited by Japan.  Our Brawley facility was subsequently clearedto resume shipments to Japan on September 19, 2008.  South Korea announced aprovisional opening of its border to U.S. beef from animals 30 months andyounger in September 2006 but subsequently closed its border again in October2007.  South Korea reopened its border and started inspecting U.S. beef nearthe end of June 2008.  Our Dodge City facility was removed for two days fromthe eligible supplier list to Mexico beginning on December 23, 2008 for analleged issue that arose in September of 2008 on a basis which we believe to beuntrue and unfounded.  These constraints and uncertainties have historicallyhad a negative impact on beef margins during the periods in which theyoccurred.

 

11

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We cannot presently assess thefull economic impact of the consequences of BSE on the U.S. beef packingindustry or on our operations.  Existing or new import restrictions oradditional regulatory restrictions or disruptions in domestic and foreignconsumer demand for beef could have a material adverse effect on the Company’srevenues and net income.

**RecentEvents**

OnNovember 3, 2009, the United Food and Commercial Workers Union (UFCWU)filed a petition with the Regional Office of the National Labor Relations Board(NLRB) in Kansas City, Missouri seeking to represent approximately 2,200employees who work at our Dodge City, Kansas facility.  On January 8,2010, the UFCWU withdrew its petition for an election. 

**Resultsof Operations**

***Thirteen weeks ended February 27, 2010 compared to thirteen weeks endedFebruary 28, 2009***

*General.*  Netincome for the thirteen weeks ended February 27, 2010 of approximately $47.0million was realized compared to a net income of approximately $45.2 millionfor the thirteen weeks ended February 28, 2009, an improvement of $1.8million.  Total costs and expenses of $1,286.7 million and $1,257.6 million forthe thirteen weeks ended February 27, 2010 and February 28, 2009, respectively,were 96.0% and 96.9% as a percentage of net sales.  Continued stable demand forbeef products and relative stability in cattle prices during the second quarterof fiscal year 2010 as compared to the same period of fiscal year 2009 allowedthe sales prices to cover the cost of the cattle we processed.

*Net Sales*. Net sales were $1,340.9 million for the thirteen weeks ended February 27, 2010compared to $1,298.2 million for the thirteen weeks ended February 28, 2009, anincrease of $42.7 million, or 3.3%.  The increase in net sales resultedprimarily from a 3.1% increase in the number of cattle processed as well as a1.9% increase in the sales prices per head in the thirteen weeks ended February27, 2010 compared to the same period in the prior year.

*Cost of Sales*. Cost of sales was $1,259.9 million for the thirteen weeks ended February 27,2010 compared to $1,236.3 million for the thirteen weeks ended February 28,2009, an increase of approximately $23.6 million, or 1.9%.  The increase wasprimarily a result of a 3.1% increase in the number of live cattle processed aswell as a 0.4% increase in average cattle prices.  

*Selling, General, and Administrative Expenses*.  Selling, general, and administrative expenses were$13.6 million for the thirteen weeks ended February 27, 2010 compared to $10.0million for the thirteen weeks ended February 28, 2009, an increase of $3.6million, or 36.0%.  The increase reflectsan increase legal expense of $2.2 million, an increase in advertising andpromotion expense of approximately $0.5 million, an increase in travel andrelated expenses of approximately $0.3 million, and an increase in consultingexpenses of approximately $0.3 million.

*Depreciation and Amortization Expense*.  Depreciation and amortization expenses were $13.2million for the thirteen weeks ended February 27, 2010 compared to $11.3million for the thirteen weeks ended February 28, 2009, an increase of $1.9million, or 16.8%.  Depreciation expense increased due to fixed assets beingplaced into service, primarily at our Dodge City and Liberal beef plants,during fiscal year 2010 and as a result of the purchase of the membershipinterests in April 2009, which was accounted for by USPB using the purchasemethod.

*Operating Income.*  Operating income was approximately $54.2 million for the thirteenweeks ended February 27, 2010 compared to operating income of approximately $40.6million for the thirteen weeks ended February 28, 2009, an improvement of $13.6million, or 33.5%. The increased operating income resulted from an increase insales price per head for beef products and relatively steady cattle prices.

*Interest Expense*.  Interest expense was $3.5 million for the thirteen weeks ended February27, 2010 compared to $5.6 million for the thirteen weeks ended February 28,2009, a decrease of $2.1 million, or 37.5%.  The decrease in interest expenseduring the thirteen weeks ended February 27, 2010 as compared to the sameperiod last year was due primarily to a reduction in average daily borrowingsof approximately 22.7% as well as the purchase and cancellation of NBP’s seniornotes of approximately $27.1 million during the second quarter of fiscal year 2010which contributed to a decrease of approximately 165 basis points in NBP’saverage borrowing rate during the thirteen weeks ended February 27, 2010 ascompared to the same period of last year.   

12

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*Termination Fee*. The termination fee was $0.0 million in the thirteen weeks ended February 27, 2010 as compared to$14.6 million in the thirteen weeks ended February 28, 2009.  The one-timetermination fee was received in fiscal year 2009 as a result of the terminationof the Membership Interest Purchase Agreement dated February 29, 2008, between and among USPB, NBP,JBS S.A., and the other holders of membership interests in NBP.

*Other,net. *Other,net non-operating expense was approximately $3.8 million for the thirteen weeksended February 27, 2010 compared to other, net non-operating expense ofapproximately $4.2 million for the thirteen weeks ended February 28, 2009, adecrease of approximately $0.4 million.  During the thirteen weeks endedFebruary 27, 2010, we expensed costs incurred in connection with the attemptedIPO by National Beef, Inc. in December 2009 of $2.2 million as well asexpensing the remaining senior notes issuance fees of $0.2 million compared tothe write-off of approximately $3.6 million of legal fees related to thetermination of the MIPA and the approximate $0.7 million write-off of obsoleteparts at our case ready facilities during the same period of the prior year.

*Income Tax Benefit (Expense)*.  Income tax income was approximately $0.0 millionfor the thirteen weeks ended February 27, 2010 compared to income tax expenseof $0.2 million for the thirteen weeks ended February 28, 2009.  A decrease inincome taxes for the period was primarily related to our subsidiary, NationalCarriers, Inc. (National Carriers).  Income tax expense is recorded on incomefrom National Carriers, which is organized as a C Corporation.  

*Net Income.* As a result of the factors described above, net income for the thirteen weekperiod ended February 27, 2010 was approximately $47.0 million compared toa net income of approximately $45.2 million for the thirteen week periodended February 28, 2009, an increase of approximately $1.8 million, or4.0%.

*Net Income Attributable to Noncontrolling Interest in NBP.*  Noncontrolling interest in the net income of NBP for the thirteen weeks ended February 27, 2010 was $15.2million compared to noncontrollinginterest in the net income for the thirteenweeks ended February 28, 2009 of $13.2 million, a change of $2.0 million. The noncontrolling interest in NBP represents the minority owners’ interest in NBP’s earnings.

***Twenty-six weeks ended February 27, 2010 compared to twenty-six weeksended February 28, 2009***

*General.*  Netincome for the twenty-six weeks ended February 27, 2010 of approximately $85.4million was realized compared to a net income of approximately $40.6 millionfor the twenty-six weeks ended February 28, 2009, an improvement of $44.8million.  Net sales were lower in the twenty-six weeks ended February 27, 2010compared to those of the prior period primarily due to an average decrease insales prices per head of approximately 0.4%.  The number of cattle processedduring the current twenty-six week period was 0.1% more than the same period oflast year. 

Total costs and expenses of $2,585.9 million and $2,684.5million for the twenty-six weeks ended February 27, 2010 and February 28, 2009,respectively, were 96.4% and 98.4% as a percentage of net sales.  A relativelystable demand for beef products and lower cattle prices allowed for increasedsales prices to cover the cost of the live cattle that we processed during thetwenty-six week period of fiscal year 2010 as compared to the same period offiscal year 2009.

*Net Sales*. Net sales were $2,683.5 million for the twenty-six weeks ended February 27,2010 compared to $2,727.2 million for the twenty-six weeks ended February 28,2009, a decrease of $43.7 million, or 1.6%.  The slight decrease in net salesresulted primarily from an average decrease in sales prices per head of 0.4% inthe twenty-six weeks ended February 27, 2010  as compared to the same period inthe prior year while the volume of cattle processed increased by approximately0.1%.

*Cost of Sales*. Cost of sales was $2,533.2 million for the twenty-six weeks ended February 27,2010 compared to $2,640.3 million for the twenty-six weeks ended February 28,2009, a decrease of approximately $107.1 million, or 4.1%.  The decrease wasprimarily a result of decreased live cattle prices that were approximately 5.4%lower than the twenty-six week period of last year.  Partially offsetting thisdecrease was a slight increase in cattle processed of approximately 0.1% forthe current twenty-six week period ended February 27, 2010 as compared to thesame period of fiscal year 2009.  

*Selling, General, and Administrative Expenses*.  Selling, general, and administrative expenses were$26.8 million for the twenty-six weeks ended February 27, 2010 compared to $22.9million for the twenty-six weeks ended February 28, 2009, an increase of $3.9million, or 17.0%.  The increase for this period is primarily due to anincrease in legal expenses of approximately $2.1 million, an approximate $0.7million increase in advertising and marketing expenses, an increase inconsulting expense of approximately $0.4 million and an increase in salaryexpenses of approximately $0.4 million during the current period as compared tothe same period of last year.

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*Depreciation and Amortization Expense*.  Depreciation and amortization expenses were $26.0million for the twenty-six weeks ended February 27, 2010 compared to $21.2million for the twenty-six weeks ended February 28, 2009, an increase of $4.8million, or 22.6%.  Depreciation expense increased due to fixed assets beingplaced into service, primarily at our Dodge City and Liberal beef plants,during fiscal year 2010 and as a result of the purchase of the membershipinterests in April 2009, which was accounted for by USPB using the purchasemethod.

*Operating Income.*  Operating income was approximately $97.6 million for the twenty-sixweeks ended February 27, 2010 compared to operating income of approximately $42.7million for the twenty-six weeks ended February 28, 2009, an improvement of $54.9million. The improved operating income resulted from a relatively stable demandfor beef products and lower cattle prices which increased the margin of thelive cattle we processed in the current twenty-six week period as compared tothe same period of last year.

*Interest Expense*.  Interest expense was $8.1 million for the twenty-six weeks ended February27, 2010 compared to $12.5 million for the twenty-six weeks ended February 28,2009, a decrease of $4.4 million, or 35.2%.  The decrease in interest expenseduring the twenty-six weeks ended February 27, 2010 as compared to the sameperiod last year was due primarily to a reduction in average daily borrowingsof approximately 23.5%.  In addition, NBP purchased and cancelled the remaining$66.9 million of its senior notes during the twenty-six weeks ended February27, 2010.

*Termination Fee*. The termination fee was $0.0 million in the twenty-six weeks ended February 27, 2010 as comparedto $14.6 million in the twenty-six weeks ended February 28, 2009.  The one-timetermination fee was received in the fiscal year 2009 as a result of thetermination of the Membership Interest Purchase Agreement dated February 29, 2008, between and among USPB, NBP,JBS S.A., and the other holders of membership interests in NBP.

*Income Tax Expense*.  Income tax expense was $0.4 million for the twenty-six weeks endedFebruary 27, 2010 compared to income tax expense of $0.6 million for thetwenty-six weeks ended February 28, 2009.  A decrease in income taxes for theperiod was primarily related to our subsidiary, National Carriers.  Income taxexpense is recorded on income from National Carriers, which is organized as a CCorporation.   

*Net Income.* As a result of the factors described above, net income for the twenty-six weekperiod ended February 27, 2010 was approximately $85.4 million compared tonet income of approximately $40.6 million for the twenty-six week periodended February 28, 2009, an increase of approximately $44.8 million.

*Net Income Attributable to Noncontrolling Interest in NBP.*  Noncontrolling interest in the net income of NBP for the twenty-six weeks ended February 27, 2010 was $27.9million compared to noncontrollinginterest in the net income for the twenty-sixweeks ended February 28, 2009 of $11.7 million, a change of $16.2 million. The noncontrolling interest in NBP represents the minority owners’ interest in NBP’s earnings.

**Liquidityand Capital Resources**

As of February 27, 2010, we had net working capital (theexcess of current assets over current liabilities) of approximately $201.1 million,which included $18.7 million in distributions payable and cash and cashequivalents of $25.5 million.  As of August 29, 2009, we had net workingcapital of approximately $163.3 million, which included $10.9 million indistributions payable and cash and cash equivalents of $18.9 million.  Our primarysources of liquidity are cash flows from operations and available borrowingsunder NBP’s amended and restated credit facility (Credit Facility).

As of February 27, 2010, we had $301.2 million oflong-term debt, of which $10.4 million was classified as a current liability. As of February 27, 2010, NBP’s Credit Facility consisted of a $228.8 millionterm loan, all of which was outstanding, and a $225.0 million revolving line ofcredit loan, which had outstanding borrowings of $50.3 million, outstanding lettersof credit of $25.2 million and available borrowings of $137.9 million, based onthe most restrictive financial covenant calculations.  Cash flows fromoperations and borrowings under NBP’s Credit Facility have funded its workingcapital requirements, acquisitions, capital expenditures and other generalcorporate purposes.  NBP was in compliance with all of its financial covenantsunder the Credit Facility as of February 27, 2010. USPB was in compliance withall of the financial covenants under its Amended and Restated Credit Agreementas of February 27, 2010.

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Inaddition to outstanding borrowings under its Credit Facility, the Company hadoutstanding borrowings under industrial revenue bonds of $12.2 million, a termloan with CoBank, of which approximately $1.5 million was outstanding, a $13.0million revolving line of credit loan, which had no outstanding borrowings, andcapital leases and other obligations of $8.4 million as of February 27, 2010. Duringthe quarter ended February 27, 2010, NBP redeemed the entire outstandingborrowings under its senior notes in the amount of $27.1 million.

NBP believes that available borrowings under its CreditFacility and cash provided by operating activities will be sufficient tosupport its working capital, capital expenditures and debt service requirementsfor the foreseeable future.  NBP’s ability to generate sufficient cash,however, is subject to certain general economic, financial, industry,legislative, regulatory and other factors beyond its control.  For a review of theobligations that affect liquidity, please see the*Cash Payment Obligations*table in Item 7. *Management’s Discussion and Analysis of Financial Conditionand Results of Operations* of our Annual Report on Form 10-K for the fiscal yearended August 29, 2009.

*OperatingActivities*

Net cash provided by operating activities in the twenty-sixweeks ended February 27, 2010 was $75.3 million compared to $96.7 million inthe twenty-six weeks ended February 28, 2009.  The $21.4 million change wasprimarily due net cash being used in inventory and less cash being used inaccounts receivable, offset by $45.0 million provided by additional net incomefor the twenty-six week period of fiscal year 2010 compared to the same periodof the prior year.

*InvestingActivities*

Net cash used in investing activities was $17.3million in the twenty-six weeks ended February 27, 2010 compared to $2.5million in the twenty-six weeks ended February 28, 2009.  The change wasprimarily the result of the $14.6 million termination fee received in thetwenty-six week period in the prior year.

*FinancingActivities*

Net cash used in financing activities was $51.4million during the twenty-six weeks ended February 27, 2010 compared to netcash used in financing activities of $99.1 million during the twenty-six weeksended February 28, 2009.  The change was primarily attributed to the $66.9 millionpurchase and cancellation of the senior notes, offset by $75.0 million inborrowings under our term note payable and an increase of approximately $14.6million in net revolving credit borrowings and a $31.6million change in the impact of overdraft balances duringthe current twenty-six week period as compared to the same period of last year.

*Amended and RestatedSenior Credit Facility*

EffectiveApril 13, 2009, NBP’s Credit Facility was amended to permit the redemption of itsmembership interests in the amount of $125.5 million, including theauthorization and issuance of Class A1 Units to help fund the redemption.  Inaddition, the terms of NBP’s Credit Facility were amended to:  (1) increase theborrowings under its Credit Facility by up to $100.0 million; (2) increase theapplicable margin on the rates of interest of the term loan and revolving lineof credit; (3) revise the payment schedule of the term loan; (4) shorten thematurity date of the term loan; (5) remove the restrictions on purchasing seniornotes and require the repurchase or redemption of $100 million of NBP’s senior notes;(6) increase the amount of capital expenditures NBP can make in any fiscal yearfrom $50 million to $60 million, or $65 million if it expends less than $55million in the immediately preceding fiscal year; and (7) add a financialcovenant requiring NBP to maintain a Funded Debt to EBITDA ratio.  

The borrowings under the Credit Facility bear interestat LIBOR or the Base Rate, plus the applicable margin.  The applicable marginfor the revolving line of credit and the term loan will be based on borrowingbase availability with grids greater than $150.0 million, $50.0 to $150.0million and less than $50.0 million.  As of February 27, 2010, the interestrates for the revolving loan and the term loan were approximately 4.45% and3.48%, respectively.

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NBP’s funded debt to EBITDA ratio is not to be morethan 3.75 to 1.00 at the end of each fiscal quarter.  If the borrowing base availability is less than $50.0million for five consecutive business days or less than $35.0 million on anysingle business day during any fiscal quarter, a fixed charge ratio of 1:15 to1:00 must be maintained at the end of each subsequent fiscal quarter until theborrowing base availability has been greater than or equal to $50.0 million for90 consecutive days.  As of February 27, 2010, NBP had met this borrowing baseavailability requirement under its Credit Facility.  The advance rates underthe borrowing base are 90% on eligible accounts and 70% on eligible inventory.

Theborrowings under the revolving loan are available for working capitalrequirements, capital expenditures and other general corporate purposes.  The CreditFacility is secured by a first priority lien on substantially all of NBP’sassets.  The principal amount outstanding under the term loan is due andpayable in equal installments of approximately $2.5 million on the last businessday of each June and December commencing December 2009 through December 2010after which payments increase to approximately $4.8 million.  All outstandingamounts of the term loan are due and payable on July 25, 2012.  Prepayment isallowed at any time.

TheCredit Facility contains customary affirmative covenants, including, withoutlimitation, conduct of business, the maintenance of insurance, compliance withlaws, maintenance of properties, keeping of books and records, and thefurnishing of financial statements.  The facility also contains customarynegative covenants, including without limitation, restrictions on thefollowing:  distributions, mergers, sale of assets, investments andacquisitions, encumbrances, indebtedness, affiliate transactions, and ERISAmatters.

The Credit Facility contains customary events ofdefault, including without limitation, failure to make payment when due,materially incorrect representations and warranties, breach of covenants,events of bankruptcy, default of other indebtedness that would permitacceleration of such indebtedness, the occurrence of one or more unstayed orundischarged judgments in excess of $3.0 million, changes in custody or controlof NBP’s property, changes in control of NPB, the failure of any of the loandocuments to remain in full force, and NBP’s failure to properly fund itsemployee benefit plans.  The facility also includes customary provisionsprotecting the lenders against increased cost or loss of yield resulting fromchanges in tax, reserve, capital adequacy and other requirements of law.

**Item3. Quantitative and Qualitative Disclosures about Market Risk.**

The principalmarket risks affecting NBP’s business are exposure to changes in prices forcommodities, such as livestock and boxed beef, and interest rate risk.

*Commodities.*NBPuses various raw materials, many of which are commodities. Raw materials aregenerally available from several different sources, and NBP presently believesthat it can obtain them as needed.  Commodities are subject to pricefluctuations that may create price risk. When appropriate, NBP may hedgecommodities in order to mitigate this price risk. While this may tend to limit itsability to participate in gains from commodity price fluctuations, it alsotends to reduce the risk of loss from changes in commodity prices.  To theextent the contracts are not designated as normal purchases, NBP reflectscommodity contract gains and losses as adjustments to the basis of underlyingcommodities purchased; gains or losses are recognized in the statement ofoperations as a component of costs of goods sold.

NBP purchases cattle for use in its processingbusinesses. From time to time, NBP enters into forward purchase contracts atprices determined prior to the delivery of the cattle. The commodity price riskassociated with these activities can be hedged by selling (or buying) theunderlying commodity, or by using an appropriate commodity derivativeinstrument. The particular hedging instrument NBP uses depends on a number offactors, including availability of appropriate derivative instruments.

NBP sells commodity beef products in its business.Commodity beef products are subject to price fluctuations that may create pricerisk. From time to time, NBP enters into forward sales contracts at pricesdetermined prior to shipment. NBP may hedge the commodity price risk associatedwith these activities in order to mitigate this price risk.  While this maytend to limit NBP’s ability to participate in gains from commodity pricefluctuations, it also tends to reduce the risk of loss from changes incommodity beef prices.  To the extent the contracts are not designated asnormal sales, NBP reflects commodity contract gains and losses as adjustmentsto the basis of underlying commodities sold; gains or losses are recognized inthe statement of operations as a component of net sales. 

 

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From time to time, NBP purchases cattle futures andoptions contracts.  The primary use of these contracts is to partially fixNBP’s future input costs when it has committed forward sales purchase ordersfrom customers at a specified fixed price.  The longest duration futurescontract owned is thirteen months.  In accordance with ASC Topic 815, *Accountingfor Derivative Instruments and Hedging Activities*, as amended, NBP accountfor futures contracts and their related firm purchase commitments at fairvalue. Certain firm commitments for live cattle purchases and all firmcommitments for boxed beef sales are treated as “normal purchases and sales”and not marked to market.  ASC Topic 815 imposes extensive recordkeepingrequirements in order to treat a derivative instrument as a hedge foraccounting purposes. Derivatives qualify for treatment as hedges when there isa high correlation between the change in fair value of the instrument and therelated change in fair value of the underlying commitment. For derivatives thatqualify as effective hedges, the change in fair value has no net effect onearnings until the hedged transaction affects earnings. For derivatives that arenot designated as hedging instruments, or for the ineffective portion of ahedging instrument, the change in fair value does affect current period netearnings.

While management believes each of these instrumentshelp mitigate various market risks, they are not designated and accounted foras hedges as a result of the extensive recordkeeping requirements of thisstatement. Accordingly, the gains and losses associated with the change in fairvalue of the instrument and the offsetting gains and losses associated withchanges in the market value of certain of the firm purchase commitments relatedto the futures contracts are recorded to income and expense in the period ofchange.

NBP uses a sensitivity analysis to evaluate the effectthat changes in the market value of commodities will have on these commodityderivative instruments.  NBP feels the sensitivity analysis appropriatelyreflects the potential market value exposure associated with the use ofderivative instruments.  As of February 27, 2010, the potential change in thefair value of applicable commodity prices, assuming a hypothetical 10% decreasein the underlying commodity price in each year, was $7.3 million.  As of August29, 2009, the potential change in fair value of applicable commodity prices, assuminga hypothetical 10% decrease in the underlying commodity price, was $16.4million.  This change was primarily due to the cattle futures contracts that NBPentered into during the first quarter of fiscal year 2009 to offset the risk offixed-price sales commitments.

*Foreign Operations.*  Transactions denominated in a currency other than an entity’sfunctional currency may expose that entity to currency risk.  Although NBPoperates in international markets including Japan and South Korea, productsales are predominately made in United States dollars, and therefore, currencyrisks are limited.

*Interest Rates.*As a result of the Company’s normal borrowing and leasing activities, itsoperating results are exposed to fluctuations in interest rates, which aremanaged primarily through its regular financing activities. The Companygenerally maintains limited investments in cash and cash equivalents.  

The Company has long-term debt with variable interestrates. Short-term debt is primarily comprised of the current portion oflong-term debt maturing twelve months from the balance sheet date.  Itsvariable interest expense is sensitive to changes in the general level ofinterest rates.  As of February 27, 2010, the weighted average interest rate onthe $291.3 million of variable rate debt was approximately 3.5%.

We had totalinterest expense of approximately $8.1 million during the twenty-six weekperiod ending February 27, 2010.  The estimated increase in interest expensefrom a hypothetical 200 basis point increase in applicable variable interestrates would have been approximately $2.5 million in the twenty-six week periodending February 27, 2010.

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**Item4T.  Controls and Procedures.**

We maintain asystem of controls and procedures designed to provide reasonable assurance asto the reliability of the Consolidated Financial Statements and otherdisclosures included in this report, as well as to safeguard assets fromunauthorized use or disposition. We evaluated the effectiveness of the designand operation of our disclosure controls and procedures as defined in theSecurities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e) undersupervision and with the participation of management, including our ChiefExecutive Officer and Chief Financial Officer. Based upon that evaluation, asof the end of the period covered by this Quarterly Report on Form 10-Q, ourChief Executive Officer and Chief Financial Officer concluded that ourdisclosure controls and procedures were effective in alerting them, in a timelymanner, to material information required to be included in our periodicSecurities and Exchange Commission filings.  There have been no changes in ourinternal controls over financial reporting during the twenty-six weeks ended February27, 2010 that have materially affected, or are reasonably likely to materiallyaffect, our internal control over financial reporting.  The design of anysystem of controls and procedures is based in part upon certain assumptionsabout the likelihood of future events. 

** **

 

 

 

 

 

 

 

 

 

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**PARTII. OTHER INFORMATION**

** **

**Item 1. Legal Proceedings.**

For informationregarding legal proceedings, see Note 6. *Contingencies* to our ConsolidatedFinancial Statements included in Part I- *Item 1* of this Form 10-Q,which is incorporated herein by reference. 

**Item 1A. Risk Factors.**

The risk factors setforth in our Annual Report on Form 10-K for the fiscal year ended August 29,2009 have not materially changed.  Please refer to the Company’s report on Form10-K for the fiscal year ended August 29, 2009 to consider those risk factors.

**Item 2. UnregisteredSales of Equity Securities and Use of Proceeds.**

None.

**Item 3. Defaults UponSenior Securities.**

None. 

**Item4. Submission of Matters to a Vote of Security Holders.**

None

**Item 5. Other Information.**

None.         

**Item 6. Exhibits.**
| (A)    |   | Exhibits                                                                                                                          |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|   | 3.1    | Amended and Restated  Limited Liability Company Agreement of U.S. Premium Beef, LLC, dated as of April  7, 2010 (filed herewith). |            
 
31.1
Certification of the Chief  Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002 (filed herewith).

           
 
31.2 
Certification of the  Principal Financial and Accounting Officer pursuant to Section 302 of  the Sarbanes-Oxley Act of 2002 (filed herewith).

 
	 
   
 

 
 
32.1
Certification of the Chief  Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed  herewith).

 
	 
   
 

    32.2 
Certification of the  Principal Financial and Accounting Officer pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002 (filed herewith).

  
19
****
 

 

**SIGNATURES**

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned thereunto duly authorized.

 

 

                                                                                                               

 
   U.S. Premium Beef, LLC         
 

 

 

By: 

 

/s/ Steven D. Hunt

 

 

 

 

 

Steven D. Hunt*Chief Executive Officer*

*(Principal Executive Officer)*

 

 

 

 

By: 

 

/s/ Scott J. Miller

 

 

 

 

 

Scott J. Miller* Chief Financial Officer*

*(Principal Financial and Accounting Officer)*

 

 

 

Date:April 9, 2010

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