0001003297-19-000030.txt : 20190313 0001003297-19-000030.hdr.sgml : 20190313 20190313132324 ACCESSION NUMBER: 0001003297-19-000030 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 48 CONFORMED PERIOD OF REPORT: 20181229 FILED AS OF DATE: 20190313 DATE AS OF CHANGE: 20190313 FILER: COMPANY DATA: COMPANY CONFORMED NAME: U. S. Premium Beef, LLC CENTRAL INDEX KEY: 0001289237 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - LIVESTOCK & ANIMAL SPECIALTIES [0200] IRS NUMBER: 201576986 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-115164 FILM NUMBER: 19677761 BUSINESS ADDRESS: STREET 1: 12200 NORTH AMBASSADOR DRIVE, SUITE 501 CITY: KANSAS CITY STATE: MO ZIP: 64163 BUSINESS PHONE: 816-713-8800 MAIL ADDRESS: STREET 1: 12200 NORTH AMBASSADOR DRIVE, SUITE 501 CITY: KANSAS CITY STATE: MO ZIP: 64163 FORMER COMPANY: FORMER CONFORMED NAME: U. S. Premium Beef, Inc. DATE OF NAME CHANGE: 20040504 10-K 1 uspb10k.htm Prepared by EDGARX.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark one)

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 29, 2018 or

☐ 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 number)

12200 North Ambassador Drive, Kansas City, MO 64163
(Address of principal executive offices)

Registrant’s telephone number, including area code: (866) 877-2525

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☑

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-Accelerated Filer ☑ Smaller Reporting Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The registrant’s equity is not traded on any exchange or other public market; however, there have been private transactions. As of February 23, 2019, there were 735,385 Class A units and 755,385 Class B units outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

LOCATION OF EXHIBIT INDEX

The index of exhibits is contained in Part IV on page 35.

TABLE OF CONTENTS
PART I.

		Page
		No.
Item 1.	Business.	4
Item 1A.	Risk Factors	8
Item 1B.	Unresolved Staff Comments	11
Item 2.	Properties.	11
Item 3.	Legal Proceedings.	11
Item 4.	Not Used.	11

PART II.

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases of Equity Securities.	11
Item 6.	Selected Financial Data.	12
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	13
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	18
Item 8.	Financial Statements and Supplementary Data.	18
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	18
Item 9A.	Controls and Procedures.	18
Item 9B.	Other Information.	19

PART III.

Item 10.	Directors, Executive Officers and Corporate Governance.	19
Item 11.	Executive Compensation.	22
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters.	31
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	32
Item 14.	Principal Accountant Fees and Services.	33

PART IV.

Item 15.	Exhibits, Financial Statement Schedules.	35
	Signatures	38

MARKET AND INDUSTRY DATA AND FORECASTS

Market data and certain industry forecasts used throughout this report were obtained from internal surveys, market research, consultant surveys, publicly available information and industry publications and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied upon therein. Similarly, internal surveys, industry forecasts and market research, which we believe to be reliable, based upon our management’s knowledge of the industry, have not been independently verified. Forecasts are particularly likely to be inaccurate, especially over long periods of time. In addition, we do not know what assumptions regarding general economic growth were used in preparing the forecasts we cite.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements,” which are subject to a number of risks and uncertainties, many of which are beyond our control. Forward-looking statements are typically identified by the words “believe”, “expect”, “anticipate”, “intend”, “estimate”, and similar expressions. Actual results could differ materially from those contemplated by these forward-looking statements as a result of many factors, including economic conditions generally and in our principal markets, the availability and prices of live cattle and commodities, food safety, livestock disease, including the identification of cattle with BSE, competitive practices and consolidation in the cattle production and processing industries, actions of domestic or foreign governments, hedging risk, changes in interest rates and foreign currency exchange rates, consumer demand and preferences, the cost of compliance with environmental and health laws, loss of key customers, loss of key employees, labor relations, and consolidation among our customers.

In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking information contained in this report will in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Please review Item 1A, Risk Factors, included in this report, for other important factors that could cause actual results to differ materially from those in any such forward-looking statements.

Unless the context indicates or otherwise requires, the terms “the Company”, “we”, “USPB”, “our” and “us” refer to U.S. Premium Beef, LLC (formerly known as U.S. Premium Beef, Ltd.). As used in this report, the term “NBP” refers to National Beef Packing Company, LLC (formerly known as Farmland National Beef Packing Company, LP (FNB)), a Delaware limited liability company. As used in this report, the terms “fiscal year” or “fiscal year ended” refers to our fiscal year which ends on the last Saturday in December.

PART I

ITEM 1. BUSINESS

BUSINESS OF U.S. PREMIUM BEEF, LLC

Overview

U.S. Premium Beef’s (USPB or the Company) mission is to increase the quality of beef and long-term profitability of cattle producers by creating a fully integrated producer-owned beef processing system that is a global supplier of high quality, value-added beef products responsive to consumer desires. USPB operates an integrated cattle processing and beef marketing enterprise where consumer and processor demands and requirements are implemented through changes in genetics, feeding, and management. USPB’s unitholders benefit from its supplier alliance with National Beef Packing Company, LLC (NBP) through (i) premiums received in excess of cash market prices for higher quality cattle, (ii) allocations of profits and potential distributions, (iii) potential unit price appreciation, and (iv) information that permits unitholders to make informed production decisions.

Products and Production

Ownership in USPB provides unitholders access to an integrated cattle production, processing and marketing system. As the basis of that system, USPB’s unitholders have a guaranteed right plus an obligation (on a one head per Class A unit per delivery year basis) to deliver cattle to NBP, pursuant to the Uniform Cattle Delivery and Marketing Agreement (see Cattle Delivery Arrangements). USPB facilitates the delivery of cattle to NBP for processing and subsequent product distribution and marketing. Shortly after the cattle are processed, cattle suppliers receive, at no extra charge, individual animal carcass data previously considered proprietary by many processors. This carcass data assists producers in refining production methodologies, thereby improving the product quality and subsequently enhancing the return to the producer.

We believe the primary advantage of USPB’s ownership in NBP centers around USPB’s ability to provide NBP with a consistent supply of quality beef from a verified source, allowing NBP to target higher margin value-added markets. Consumers have historically demonstrated their willingness and desire to buy branded products that offer better value in other consumer product markets, with the Certified Angus Beef^® product line being an example in the beef industry.

Cattle Producers’ Uniform Cattle Delivery and Marketing Agreements

USPB facilitates the delivery of cattle from its Class A unitholders and associates to NBP. Each Class A unitholder is required to enter into a Uniform Cattle Delivery and Marketing Agreement (Delivery Agreement) with the Company whereby the unitholder is committed to deliver a designated number of cattle on an annual basis. Each Class A unit held by a unitholder entitles and obligates that unitholder to deliver one head of cattle per delivery year to USPB. The Delivery Agreements are for a term of 5 years with an “evergreen” renewal provision that automatically renews annually in the beginning of USPB’s delivery year for a subsequent five year period. These arrangements are described in greater detail in Cattle Delivery Arrangements.

Company Background

USPB was originally organized as a tax exempt cooperative within the meaning of Section 521(b)(l) of the Internal Revenue Code. The cooperative began operations on December 1, 1997, when the cooperative acquired its initial interest in Farmland National Beef, now known as National Beef Packing Company, LLC. In connection with the cooperative’s purchase of its interest in Farmland National Beef, the cooperative owned the right and was subject to the obligation to deliver cattle annually to NBP. Under that arrangement, USPB has delivered more than 14.9 million head of cattle to NBP for processing since it commenced deliveries.

On August 6, 2003, USPB became the majority owner in NBP.

On August 18, 2004, the shareholders of U.S. Premium Beef, Ltd. approved the conversion of the cooperative into a Delaware LLC.

On December 5, 2011, USPB entered into a Membership Interest Purchase Agreement with Leucadia National Corporation (Leucadia). The Purchase Agreement provided for Leucadia to purchase 56.2415% of the membership interests in NBP (National Interests) from the Company for approximately $646.8 million. The Leucadia Transaction closed on December 30, 2011. Following the close, USPB owned 15.0729% of NBP’s membership interests.

Employees

USPB has seven employees as of December 29, 2018. The complexity of USPB’s obligations under its various contracts with NBP require USPB to retain the services of key senior management personnel with the experience, skill and expertise necessary to manage an enterprise competitive with other sophisticated participants in the beef and meat industries. Each employee is compensated through the payment of a base salary with management being eligible for incentive and discretionary bonuses. In addition, each employee is eligible to participate in benefits programs maintained by USPB. These programs include group medical insurance, accidental death and dismemberment insurance and similar programs.

USPB’s employees are not unionized and USPB believes that its relationship with its employees is good.

Governmental Regulation and Environmental Matters

The Company does not operate any processing facilities itself and is therefore not subject to federal and state regulations relating to grading of animals, quality control, labeling, sanitary control and waste disposal. Operational activities are conducted through NBP and significant efforts with respect to governmental and environmental regulation are conducted by NBP. See Business of National Beef Packing Company, LLC - Regulation and Environmental.

Sales, Marketing, and Customers

NBP is the only beef processor that USPB has a cattle delivery agreement with. The ultimate customers of and the market for the products resulting from the processing of cattle supplied by USPB’s unitholders and associates are described in Business of National Beef Packing Company, LLC.

Beef Industry, Markets, and Competition

As indicated above, USPB’s business activities are focused on facilitating the delivery of cattle produced by its Class A unitholders and associates to NBP. Information regarding the beef industry, the market for beef and beef products and competition within the beef industry are described in Business of National Beef Packing Company, LLC.

Intellectual Property

USPB maintains a federally registered trademark on a U.S. Premium Beef logo that it uses periodically.

Research and Development

USPB does not conduct any research and development activities.

CATTLE DELIVERY ARRANGEMENTS

Cattle Producers’ Uniform Cattle Delivery and Marketing Agreements and Payments to Unitholders and Associates for Cattle

USPB’s unitholders and associates deliver cattle to NBP for processing (NBP is the only beef processor that USPB has a cattle delivery agreement with). The resulting beef and beef products are marketed by NBP. Each unitholder or associate is paid for the cattle delivered to NBP based on a market-based purchase price that is subject to the agreements between USPB and NBP.

Pursuant to the Uniform Cattle Delivery and Marketing Agreement, payment for cattle is based on the individual carcass quality of cattle delivered. As a limited liability company, allocations of profits and losses and potential distributions are not tied to cattle delivery, but rather to the number of Class A and Class B units held and the respective rights of those units.

BUSINESS OF NATIONAL BEEF PACKING COMPANY, LLC

General

NBP is one of the largest beef processing companies in the U.S., accounting for approximately 12.5% of the fed cattle slaughter market. NBP processes and markets fresh and chilled boxed beef, ground beef, beef byproducts, consumer-ready beef and pork, and wet blue leather for domestic and international markets. Based in Kansas City, Missouri, NBP had approximately 8,100 employees on December 29, 2018 and generated total revenues of $7.5 billion in 2018.

The largest share of NBP’s revenue, about 96.4%, is generated from the sale of boxed beef and beef byproducts. NBP also generates revenues through value-added production with its consumer-ready products. In addition, NBP operates one of the largest wet blue tanning facilities in the world (wet blue tanning refers to the first step in processing raw and brine-cured hides into tanned leather), selling processed hides to tanners that produce finished leather for the automotive, luxury goods, apparel and furniture industries. Other streams of revenue include sales through its subsidiary, Kansas City Steak Company, LLC, which sells portioned beef and other products directly to consumers through internet, direct mail and direct response television, and service revenues generated by National Carriers, Inc., a wholly owned transportation and logistics company that is one of the largest refrigerated and livestock carrier operations in the U.S. and transports products for NBP and a variety of other customers. NBP’s profitability typically fluctuates seasonally as well as cyclically, based on the availability of fed cattle.

Beef Processing Services

NBP’s profitability is dependent, in large part, on the spread between its cost for live cattle, the primary raw material for its business, and the value received from selling boxed beef and other products coupled with its overall volume. NBP operates in a large and liquid commodity market and it does not have much influence over the price it pays for cattle or the selling price it receives for the products it produces. NBP’s profitability typically fluctuates seasonally with relatively higher margins in the spring and summer months and during times of ample cattle availability.

Revenues in 2018 increased 2% in comparison to 2017, primarily due to an increase in the number of cattle processed. Cost of sales decreased by 1% in 2018 as compared to 2017. The decrease is due to a decrease in the price of fed cattle, partially offset by an increase in volume. The combined effects of increased margin per head and an increase in volume led to higher profitability in 2018 as compared to 2017.

Revenues in 2017 increased 5% in comparison to 2016, primarily due to an increase in the number of cattle processed. Cost of sales increased by 4% in 2017 as compared to 2016. The increase is also due to an increase in the number of cattle processed. The combined effects of increased margin per head and an increase in volume led to higher profitability in 2017 as compared to 2016.

Sales and Marketing

NBP markets its products to national and regional retailers, including supermarket chains, independent grocers, club stores, wholesalers and distributors, food service providers and further processors. In addition, NBP sells beef by-products to the medical, feed processing, fertilizer and pet food industries. NBP exports products to more than 30 countries; in 2018, export sales represented approximately 14.5% of revenues. The demand for beef is generally strongest in the spring and summer months and generally decreases during the winter months.

NBP emphasizes the sale of higher-margin, value-added products, which include branded boxed beef, consumer-ready beef and pork, portion control beef and wet blue hides. NBP believes its value-added products can command higher prices than commodity products because of NBP’s ability to consistently meet product specifications, based on quality, trim, weight, size, breed or other factors, tailored to the needs of its customers. In addition to the value-added brands that NBP owns, NBP licenses the use of Certified Angus Beef^®, a registered trademark of Certified Angus Beef LLC, and Certified Hereford Beef^®, a registered trademark of Certified Hereford Beef LLC.

Raw Materials and Procurement

The primary raw material for the beef processing plants is live cattle. Live cattle prices change daily based on supply and demand for beef and other proteins, cattle inventory levels, weather and other factors. NBP’s two beef processing facilities are located in southwest Kansas. The primary market area for the purchase of cattle for those facilities includes Kansas, Texas and Oklahoma. A significant portion of USPB’s unitholders and associates are located in this area. The close proximity of NBP’s facilities to large supplies of cattle gives its buyers the ability to visit feedlots on a regular basis, which enables NBP to develop strong working relationships with its suppliers, reduces its reliance on any one cattle supplier and lowers in-bound transportation costs.

On December 30, 2011, USPB entered into a new Cattle Purchase and Sale Agreement with NBP. Per the terms and conditions of the Agreement, NBP is required to purchase through USPB from its members, and USPB is required to cause to be sold and delivered from its members to NBP, a base amount of 735,385 (subject to adjustment) head of cattle per year. The purchase price for the cattle is determined by pricing grids, which, at all times, are required to be no less favorable than any other pricing grid being utilized by NBP and the pricing grid shall be competitive with NBP’s major competitors for the purchase of cattle. NBP believes the pricing grids are based on terms that could be obtained from an unaffiliated party. The cattle supply agreement extends through December 30, 2022, with automatic, but optional one year extensions on each December 30, unless either party provides a notice not to extend sixty days prior to the annual anniversary date. NBP also purchased additional cattle from certain USPB members and associates outside of the cattle supply agreement.

During fiscal years 2018, 2017, and 2016, USPB’s members and associates provided approximately 25%, 24%, and 27%, respectively, of NBP’s total cattle requirements.

Processing Facilities

NBP owns two beef processing facilities located in Liberal and Dodge City, Kansas, which can each process approximately 6,000 cattle per day. NBP’s three consumer-ready facilities are in Hummels Wharf, Pennsylvania, Moultrie, Georgia and Kansas City, Kansas. NBP’s wet blue tanning facility is in St. Joseph, Missouri.

Competition

Competitive conditions exist both in the purchase of live cattle, as well as in the sale of beef products. Beef products compete with other protein sources, including pork and poultry, but NBP’s principal competition comes from other beef processors. NBP believes the principal competitive factors in the beef processing industry are price, quality, food safety, customer service, product distribution, technological innovations (such as food safety interventions and packaging technologies) and brand loyalty. Some of NBP’s competitors have substantially larger beef operations, greater financial and other resources and wider brand recognition for their products.

Regulation and Environmental

NBP’s operations are subject to extensive regulation by the U.S. Department of Agriculture (USDA) including its Food Safety and Inspection Service (FSIS), its Animal and Plant Health Inspection Service (APHIS) and its Grain Inspection, Packers and Stockyards Administration (GIPSA), the Food and Drug Administration (FDA), the U.S. Environmental Protection Agency (EPA) and other federal, state, local and foreign authorities regarding the processing, packaging, storage, safety, distribution, advertising and labeling of its products.

NBP is subject to the Packers and Stockyards Act of 1921 (PSA). Among other things, this statute generally requires NBP to make full payment for livestock purchases not later than the close of business the day after the purchase and transfer of possession or determination of the purchase price. Under the PSA, NBP must hold in trust for the benefit of unpaid cash livestock suppliers all receivables, inventory and proceeds derived from NBP's sale of such cattle until the sellers have received full payment. In addition, pursuant to PSA rules, at December 29, 2018, NBP has obtained from an insurance company a surety bond in the amount of $50.4 million as a measure of protection for livestock sellers.

The Dodge City and Liberal facilities are subject to Title V permitting pursuant to the Federal Clean Air Act and the Kansas Air Quality Act. The St. Joseph facility is subject to a secondary air permit which is in place. The Dodge City, Liberal, Hummels Wharf and Moultrie facilities are subject to Clean Air Act Risk Management Plan requirements relating to the use of ammonia as a refrigerant.

All of NBP’s plants are indirect dischargers of wastewater to publicly owned treatment works and are subject to requirements under the federal Clean Water Act, state and municipal laws, as well as agreements or permits with municipal or county authorities. Upon renewal of these agreements and permits, NBP is from time to time required to make capital expenditures to upgrade or expand wastewater treatment facilities to address new and more stringent discharge requirements imposed at the time of renewal. Storm water discharges from NBP’s plants are also regulated by state and local authorities.

All of NBP’s facilities generate solid waste streams including small quantities of hazardous wastes. NBP is subject to laws that provide for strict, and in certain circumstances, joint and several liability for remediation of hazardous substances at contaminated sites; however, NBP has not received any demands that it has any liability at sites under the Comprehensive Environmental Response, Compensation and Liability Act (Superfund) or state counterparts. All plants are subject to community right to know reporting requirements under the Superfund Amendments and Reauthorization Act of 1986, which requires yearly filings as to the substances used on facility premises.

Employees

Of NBP’s 8,100 employees, approximately 5,100 are represented by collective bargaining agreements. Approximately 2,500 employees at the Liberal plant are represented by the United Food and Commercial Workers International Union under a collective bargaining agreement scheduled to expire in December 2022, approximately 2,400 employees at the Dodge City plant are represented by the United Food and Commercial Workers International Union under a collective bargaining agreement scheduled to expire in December 2021, and another approximately 200 employees at the St. Joseph plant are represented by the United Cereal Workers (R.W.D.S.U./U.F.C.W.) under a collective bargaining agreement scheduled to expire in June 2019.

ITEM 1A. RISK FACTORS

As described throughout this document, USPB’s business involves the operation of an integrated cattle processing and beef marketing enterprise in which USPB’s unitholders and associates supply cattle that are processed at the facilities owned and operated by NBP. NBP markets and distributes the beef and beef products produced from both cattle supplied by USPB’s unitholders and associates and other cattle purchased by NBP from other sources. The financial results of NBP’s operations therefore are the single largest influence on USPB’s financial performance. Consequently, those factors and risks that impact the performance of NBP’s business have a direct and immediate influence on USPB’s performance. However, there are also some risks that are unique to USPB. This Risk Factors section is divided into two parts, with one subsection focusing on the risk factors that influence the performance of NBP and another subsection discussing certain risk factors that are directly applicable to USPB.

USPB’s business operations and the implementation of our business strategy are subject to significant risks inherent in our business, including, without limitation, the risks and uncertainties described below. The occurrence of any one or more of the risks or uncertainties described below could have a material adverse effect on our financial condition, results of operations, and cash flows. While we believe we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our business, operations, industry, financial position, and financial performance in the future.

Risk Factors Associated With Operations of NBP

The prices and availability of key raw materials affects the profitability of its beef processing and manufacturing operations.

The supply and market price of cattle purchased by NBP are dependent upon a variety of factors over which NBP has no control, including fluctuations in the size of herds maintained by producers, the relative cost of feed and energy, weather and livestock diseases. The cost of raw materials used by our manufacturing businesses have fluctuated over time as a result of a variety of factors. Although our manufacturing businesses are not currently experiencing any shortage of raw materials, if such shortages occur, revenues and profitability could decline.

Outbreaks of disease affecting livestock can adversely affect the supply of cattle and the demand for NBP’s products.

NBP is subject to risks relating to animal health and disease control. An outbreak of disease affecting livestock (such as foot-and-mouth disease or bovine spongiform encephalopathy (BSE), commonly referred to as mad cow disease) could result in restrictions on sales of products, restrictions on purchases of livestock from suppliers or widespread destruction of cattle. The discovery of BSE in the past caused certain countries to restrict or prohibit the importation of beef products. Outbreaks of diseases, or the perception by the public that an outbreak has occurred, or other concerns regarding diseases, can lead to inadequate supply, cancellation of orders by customers and create adverse publicity, any of which can have a significant negative impact on consumer demand and, as a result, on our consolidated financial position, cash flows and results of operations.

If NBP’s products or products made by others using its products become contaminated or are alleged to be contaminated, NBP may be subject to product liability claims that could adversely affect its business.

NBP may be subject to significant liability in excess of insurance policy limits if its products or products made by others using its products cause injury, illness or death. In addition, NBP could recall or be required to recall products that are, or are alleged to be, contaminated, spoiled or inappropriately labeled. Organisms producing food borne illnesses (such as E. coli) could be present in NBP’s products and result in illness or death if they are not eliminated through further processing or cooking. Contamination of NBP’s or its competitors’ products may create adverse publicity or cause consumers to lose confidence in the safety and quality of beef products. Allegations of product contamination may also be harmful even if they are untrue or result from third-party tampering. Any of these events may increase costs or decrease demand for beef products, any of which could have a significant adverse effect on our consolidated financial condition, cash flows and results of operations.

NBP generally does not enter into long-term contracts with customers; as a result the volumes and prices at which beef products are sold are subject to market forces.

NBP’s customers generally place orders for products on an as-needed basis and, as a result, their order levels have varied from period to period in the past and may vary significantly in the future. The loss of one or more significant customers, a significant decline in the volume of orders from customers or a significant decrease in beef product prices for a sustained period of time could negatively impact cash flows and results of operations.

NBP’s exports expose it to political and economic risks in the U.S. and foreign countries, as well as to risks related to currency fluctuations.

Approximately 14.5% of NBP’s annual sales are export sales, primarily to Japan, Mexico, South Korea, Hong Kong, China, Taiwan, Italy and Canada, and on average these sales have a higher margin than domestic sales of similar products. A reduction in international sales could adversely affect revenues and margins. Risks associated with international activities include inflation or deflation and changes in foreign currency exchange rates, including changes in currency exchange rates of other countries that may export beef products in competition with NBP; the closing of borders by foreign countries to product imports due to disease or other perceived health or food safety issues; exchange controls; changes in tariffs; changes in political or economic conditions; trade restrictions and changes in regulatory requirements. The occurrence of any of these events could increase costs, lower demand for products or limit operations, which could have a significant adverse effect on cash flows, results of operations and future prospects.

NBP incurs substantial costs to comply with environmental regulations and could incur additional costs as a result of new regulations or compliance failures that result in civil or criminal penalties, liability for damages and negative publicity.

NBP’s operations are subject to extensive and stringent environmental regulations administered by the EPA and state, local and other authorities with regards to water usage, wastewater and storm water discharge, air emissions and odor, and waste management and disposal. Failure to comply with these laws and regulations could have serious consequences, including criminal, civil and administrative penalties and negative publicity. In addition, NBP incurs and will continue to incur significant capital and operating expenditures to comply with existing and new or more stringent regulations and requirements. All of NBP’s processing facilities procure wastewater treatment services from municipal or other regional governmental agencies that are in turn subject to environmental laws and permit limits regarding their water discharges. As permit limits are becoming more stringent, upgrades and capital improvements to these municipal treatment facilities are likely. In locations where NBP is a significant volume discharger, it could be asked to contribute toward the costs of such upgrades or to pay significantly increased water or sewer charges to recoup such upgrade costs. NBP may also be required to undertake upgrades and make capital improvements to its own wastewater pretreatment facilities, the cost of which could be significant. Compliance with environmental regulations has had and will continue to have a significant impact on NBP’s cash flows and profitability. In addition, under most environmental laws, most notably the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and analogous state laws, NBP could be held liable for the cost to investigate or remediate any contamination at properties it owns or operates, or as to which it arranges for the disposal or treatment of hazardous substances, as such liability is imposed without regard to fault.

NBP is subject to extensive governmental regulation and noncompliance with or changes in applicable requirements could adversely affect its business, financial condition, cash flows and results of operations.

NBP’s operations are subject to extensive regulation and oversight by the USDA, including its FSIS, APHIS and GIPSA agencies, the FDA, and other federal, state, local and foreign authorities regarding the procurement of cattle and the processing, packaging, storage, safety, distribution, advertising and labeling of its products. Recently, food safety practices and procedures in the meat processing industry have been subject to more intense scrutiny and oversight by the USDA. NBP is also subject to a variety of immigration, labor and worker safety laws and regulations, including those relating to the hiring and retention of employees. Failure to comply with existing or new laws and regulations could result in administrative penalties and injunctive relief, civil remedies, fines, interruption of operations, recalls of products or seizures of properties, potential criminal sanctions and personal injury or other damage claims. These remedies, changes in the applicable laws and regulations or discovery of currently unknown conditions could increase costs, limit business operations and reduce profitability.

NBP’s performance depends on favorable labor relations with its employees, in particular employees represented by collective bargaining agreements.

A substantial number of NBP’s employees are covered by collective bargaining agreements. A labor-related work stoppage by unionized employees, or employees who become unionized in the future, could limit NBP’s ability to process and ship products or could increase costs. Any significant increase in labor costs, deterioration of employee relations, slowdowns or work stoppages at any of NBP’s locations, whether due to union activities, employee turnover or otherwise, could have a material adverse effect on our financial condition, cash flows and results of operations.

Risk Factors Associated with USPB

USPB facilitates the delivery of the cattle provided by its unitholders and associates to NBP and does not have arrangements for alternative markets for its unitholders and associates cattle.

NBP is the only beef processor that USPB has a cattle delivery agreement with. USPB has not developed alternative customers for the cattle delivered by USPB’s unitholders and associates. If events were to occur which would prevent NBP from purchasing and processing the cattle supplied by USPB’s unitholders and associates, USPB would need to exercise provisions in its agreements with both NBP and USPB’s unitholders that would permit USPB to reduce the number of cattle acquired from unitholders and sold to NBP. While such provisions would mitigate harm to USPB, it is likely that the value of the Class A and Class B units and the associated delivery rights held by USPB’s unitholders would be impaired.

USPB’s investment in NBP could become impaired.

USPB’s investment in NBP is carried under the equity method of accounting. Operating losses, economic and industry events, and a variety of other factors may result in a decrease in the value of the investment, which is other than temporary. Such potential decreases in value will cause the Company to record an impairment charge, which may have an impact on the trading values of USPB’s Class A and Class B units.

The other members of NBP do not deliver cattle to NBP for processing, creating the possibility that the interests of those other members of NBP could conflict with the interests of USPB and its unitholders.

The other members of NBP do not deliver cattle to NBP for processing and marketing. As a result, conflicts of interest may arise between USPB and NBP relating to cattle purchases. If a dispute were to arise, the settlement of any such dispute may not be on terms as favorable to USPB as would be expected if all of the members of NBP were involved in the delivery of cattle to NBP for processing.

The Internal Revenue Service could assert that USPB should be treated as a corporation for federal income tax purposes.

Under applicable regulations, an unincorporated entity such as a limited liability company is treated as a partnership for federal income tax purposes unless the entity is considered a “publicly traded partnership” or the entity affirmatively elects to be taxed as a corporation. USPB has not elected to be taxed as a corporation, and USPB believes that it should be treated as a partnership not taxable as a corporation for federal income tax purposes. USPB has not requested and will not request any ruling from the IRS, however, with respect to its classification as a partnership for federal income tax purposes. If the IRS were to assert successfully that USPB were taxable as a corporation for federal income tax purposes in any taxable year, holders of Class A units and Class B units would not be required to report on their federal income tax returns their allocable share of USPB’s items of income, gain, deduction, and loss for that year and USPB would be subject to tax on its net income for that year at corporate tax rates. In addition, any distributions would be taxable to holders of Class A units and Class B units as dividend income. Taxation of USPB as a corporation could materially reduce the after-tax return on an investment in units and could substantially reduce the value of the units.

Failure to achieve and maintain effective internal controls could have a material adverse effect on USPB’s business, operating results and financial condition.

USPB documents and tests its internal control procedures in order to satisfy the requirements of the Sarbanes-Oxley Act, which requires annual management assessments of the effectiveness of its internal controls over financial reporting. This process is both costly and challenging. If USPB fails to achieve and maintain the adequacy of its internal controls, as such standards are modified, supplemented or amended from time to time, it may not be able to ensure that it can conclude on an ongoing basis that it has effective internal controls over financial reporting in accordance with the Sarbanes-Oxley Act. Moreover, effective internal controls are necessary for USPB to produce reliable financial reports and are important to helping prevent financial fraud. If USPB cannot provide reliable financial reports or prevent fraud, its business and operating results could be harmed, investors could lose confidence in its reported financial information, and its business, results of operation and financial condition could be adversely affected.

USPB depends on the service of key senior management personnel, the loss of which could materially harm its business.

USPB’s success will depend, in part, on the efforts of its key senior management personnel. The market for qualified personnel is competitive and USPB’s future success will depend on its ability to attract and retain these personnel. USPB does not have long-term employment agreements with most of its senior management. USPB may not be able to negotiate either new contracts or renewals of any existing long-term employment agreements on terms favorable to USPB or at all. The loss of the services of any of USPB’s key senior management personnel or the failure to attract and retain highly skilled personnel in the future could have a material adverse effect on USPB’s business, results of operations and financial condition.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

USPB’s corporate office is located at 12200 Ambassador Drive, Suite 501, Kansas City, Missouri 64163, in proximity to the corporate offices of NBP. The Company leases its office space from the Kansas City Aviation Department, with offices at 601 Brasilia Avenue, Kansas City, Missouri 64153.

ITEM 3. LEGAL PROCEEDINGS

For information regarding legal proceedings, see Note 8. Legal Proceedings.

ITEM 4. NOT USED.

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

There is no established public trading market for any class of common equity of U.S. Premium Beef, LLC. As of February 23, 2019, there were 483 record holders of Class A units and 481record holders of Class B units. The per unit sales prices for the fiscal years 2018 and 2017 by quarter were as follows:

	Affiliated Sales								Third Party Sales
	Class A				Class B				Class A				Class B
	Low		High		Low		High		Low		High		Low		High

Fiscal Year 2018
Quarter ending:
March 31, 2018	$	128.00	$	128.00	$	150.00	$	150.00	$	130.00	$	136.67	$	165.00	$	180.00
June 30, 2018	$	100.00	$	132.00	$	-	$	-	$	130.00	$	159.00	$	165.00	$	168.00
September 29, 2018	$	155.00	$	155.00	$	166.00	$	166.00	$	125.00	$	160.00	$	165.00	$	209.00
December 29, 2018	$	54.00	$	125.00	$	54.00	$	209.00	$	162.00	$	170.00	$	200.00	$	205.00
Subsequent to December 29, 2018	$	-	$	-	$	-	$	-	$	155.00	$	158.00	$	-	$	-


Fiscal Year 2017
Quarter ending:
March 25, 2017	$	16.00	$	122.00	$	15.10	$	118.00	$	110.00	$	120.00	$	105.00	$	125.00
June 24, 2017	$	-	$	-	$	-	$	-	$	125.00	$	125.00	$	-	$	-
September 30, 2017	$	110.00	$	150.00	$	83.00	$	150.00	$	-	$	-	$	151.00	$	161.00
December 30, 2017	$	121.00	$	163.73	$	105.00	$	180.00	$	-	$	-	$	177.00	$	180.00
Subsequent to December 30, 2017	$	-	$	-	$	-	$	-	$	136.67	$	136.67	$	165.00	$	180.00

The affiliated sales represent sales that were not at arms-length and, therefore, the sales prices disclosed above are not necessarily indicative of the market value of the Class A and Class B units during the periods in question.

During fiscal years 2018 and 2017, USPB’s Board of Directors approved the following per unit cash distributions to be made to its Class A and Class B unitholders:

	Class A		Class B
Fiscal Year 2018
February 27, 2018	$	3.32	$	29.13
June 6, 2018	$	0.93	$	8.35
June 12, 2018	$	4.61	$	40.41
September 12, 2018	$	2.68	$	23.54
December 28, 2018	$	0.80	$	6.99

Fiscal Year 2017
February 28, 2017	$	3.52	$	30.85
December 28, 2017	$	3.89	$	34.12

The payment of cash distributions are made only from assets legally available for that purpose and depend on the Company’s financial condition, results of operations, and other factors then deemed relevant by USPB’s board of directors. Cash distributions are paid to the holders of Class A and Class B units at the discretion of the board of directors and to the extent permitted by USPB’s senior lenders.

For a discussion of equity compensation plans, see Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters.

ITEM 6. SELECTED FINANCIAL DATA

USPB’s investment in NBP is accounted for using the equity method of accounting as USPB has the ability to exercise significant influence but does not have financial or operational control.

The following table sets forth selected statement of operations and balance sheet data for fiscal years ended December 29, 2018, December 30, 2017, December 31, 2016, December 26, 2015, and December 27, 2014. The selected financial data has been derived from our audited financial statements included elsewhere in this filing or from audited financial statements from prior years’ filings.

The following table should be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8. Financial Statements and Supplementary Data (including the accompanying notes) contained elsewhere in this report.

	Fiscal Year Ended (1)
	December 29,					December 30,				December 31,				December 26,					December 27,
	2018					2017				2016				2015					2014
	(millions of dollars, except unit and per unit data)
Statement of Operations Data:
Net sales	$			-		$		-		$		-		$			-		$			-
Costs and expenses:
Cost of sales				-				-				-					-					-
Selling, general, and administrative				4.5				4.0				3.6					2.4					3.1
Depreciation and amortization				-				-				-					-					-
Operating loss				(4.5	)			(4.0	)			(3.6	)				(2.4	)				(3.1	)
Other income (expense):
Interest income				1.1				0.3				-					-					-
Equity in income (loss) of National Beef Packing Company, LLC				89.6				61.1				49.3				(18.9		)				(6.1	)
Other, net				0.4				0.1				0.7					-					0.2
Total other income (expense)				91.1				61.5				50.0				(18.9		)				(5.9	)
Net income (loss)	$			86.6		$		57.5		$		46.4		$		(21.3		)	$			(9.0	)

Selected Balance Sheet Data:
Cash and cash equivalents	$			88.4		$		119.1		$		85.2		$			85.2		$			92.3
Total assets	$			231.9		$		259.4		$		228.9		$		218.2			$		240.5
Capital shares and equities	$			219.8		$		224.1		$		221.2		$		211.8			$		233.1

Units outstanding
Class A units		735,385					735,385				735,385				735,385					735,385
Class B units		755,385					755,385				755,385				755,385					755,385

Per Unit Data:
Income (loss) per unit
Basic and diluted
Class A Units	$			11.77			$	7.82			$	6.31			($2.90			)	($1.23				)
Class B Units	$		103.16				$	68.49			$	55.24			($25.40			)		($10.77			)

Outstanding weighted-average units
Basic and diluted
Class A Units		735,385					735,385				735,385				735,385					735,385
Class B Units		755,385					755,385				755,385				755,385					755,385

1) Fiscal years 2018 and 2017 consisted of a 52 week year, fiscal year 2016 consisted of a 53 week year, and fiscal years 2015 and 2014 consisted of a 52 week year.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this report. In addition to historical information, the following discussion and other parts of this report contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by such forward-looking information due to the factors discussed under Item 1A, Risk Factors, Disclosure Regarding Forward-Looking Statements and elsewhere in this report.

Overview

U.S. Premium Beef (USPB or the Company) was formed as a closed marketing cooperative on July 1, 1996. Its mission is to increase the quality of beef and long-term profitability of cattle producers by creating a fully integrated producer-owned beef processing system that is a global supplier of high quality, value-added beef products responsive to consumer desires. USPB operates an integrated cattle processing and beef marketing enterprise where consumer and processor demands and requirements are implemented through changes in genetics, feeding, and management. USPB’s unitholders benefit from its supplier alliance with National Beef Packing Company, LLC (NBP) through (i) premiums received in excess of cash market prices for higher quality cattle, (ii) allocations of profits and potential distributions, (iii) potential unit price appreciation, and (iv) information that permits unitholders to make informed production decisions.

Effective August 29, 2004, the cooperative restructured into a limited liability company (LLC) under Delaware law (Conversion). The business of USPB, the cooperative, is being continued in the LLC form of business organization.

As USPB filed a registration statement with the Securities and Exchange Commission in connection with its 2004 Conversion from the cooperative form of business organization to an LLC structure, USPB is subject to the informational requirements of the Securities Exchange Act of 1934 (Exchange Act), although USPB is not required to be registered under the Exchange Act. Accordingly, USPB files periodic reports and other information with the Securities and Exchange Commission (SEC). Such reports, proxy statements and other information may be obtained by visiting the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports and information statements and other information regarding USPB and other issuers that file electronically.

USPB’s investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control. NBP’s financial statements and footnotes are attached to USPB’s 10-K.

Products and Production

USPB provides an integrated cattle production, processing and marketing system for the benefit of its unitholders and associates. As the basis of that system, USPB’s unitholders have a guaranteed right plus an obligation (on a one head per Class A unit per delivery year basis) to deliver cattle to USPB, pursuant to the Uniform Cattle Delivery and Marketing Agreement (see Cattle Delivery Arrangements). USPB facilitates the delivery of cattle to NBP for processing and subsequent product distribution and marketing. Shortly after the cattle are processed, cattle suppliers receive, at no extra charge, individual animal carcass data previously considered proprietary by many processors. This carcass data assists producers in refining production methodologies, thereby improving the product quality and subsequently enhancing the return to the producer.

Critical Accounting Policies and Estimates

The following discussion and analysis of financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates and revises its estimates based on historical experience and other assumptions we believe are reasonable under the circumstances. Actual results may differ from those estimates. Changes in our estimates could materially affect our results of operations and financial condition for any particular period. With the closing of the Leucadia Transaction, our fiscal year ends on the last Saturday in December. We believe USPB’s most critical accounting policy are as follows: Accounting for Investment in NBP. On December 30, 2011, USPB sold the majority of its ownership interest in NBP to Leucadia. On that date, USPB’s investment in NBP was measured at fair value and has since been carried under the equity method of accounting. Operating losses, economic and industry events, and a variety of other factors may result in a decrease in the value of the investment, which is other than temporary. Such potential decreases in value will cause the Company to record an impairment charge, which may have an impact on the trading values of USPB’s Class A and Class B units.

Accounting for Leases. In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases. The new standard requires the recognition of all leases that are longer than one year on the balance sheet, which will result in the recognition of a right-of-use asset and a corresponding lease liability. The right-of -use asset and lease liability will be measured initially using the present value of the remaining lease payments. The new standard is effective for annual and interim periods beginning after December 15, 2018. The new guidance will not have a material impact on our financial statements.

Results of Operations

The following table presents the statements of operations data for USPB for the periods indicated:

	52 weeks ended			52 weeks ended			53 weeks ended
	December 29, 2018			December 30, 2017			December 31, 2016
	(millions of dollars)
Net sales	$	-		$	-		$	-

Costs and expenses:
Cost of sales		-			-			-
Selling, general, and administrative		4.5			4.0			3.6
Operating loss		(4.5	)		(4.0	)		(3.6	)

Other income:
Interest income		1.1			0.3			-
Equity in income of National Beef Packing Company, LLC		89.6			61.1			49.3
Other, net		0.4			0.1			0.7
Total other income, net		91.1			61.5			50.0
Net income	$	86.6		$	57.5		$	46.4

Fiscal Year Ended December 29, 2018 compared to December 30, 2017

Net Sales. There were no sales during the fifty-two week periods ended December 29, 2018 and December 30, 2017.

Cost of Sales. There were no cost of sales during the fifty-two week periods ended December 29, 2018 and December 30, 2017.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were approximately $4.5 million for the fifty-two weeks ended December 29, 2018, compared to approximately $4.0 million for the fifty-two weeks ended December 30, 2017, an increase of approximately $0.5 million. The increase is primarily due to higher expenses associated with the phantom unit plans, which increased due to higher average unit transfer prices, and the bonus plans, which were up due to higher net income.

Depreciation and Amortization Expense. There were immaterial depreciation and amortization expenses during the fifty-two week periods ended December 29, 2018 and December 30, 2017.

Operating Loss. Operating loss was approximately $4.5 million for the fifty-two weeks ended December 29, 2018 compared to approximately $4.0 million for the fifty-two weeks ended December 30, 2017, an increase of approximately $0.5 million.

Interest Income. Interest income was $1.1 million during the fifty-two weeks ended December 29, 2018 and $0.3 million in the fifty-two weeks ended December 30, 2017.

Equity in Income of National Beef Packing Company, LLC. Equity in NBP income was $89.6 million for the fifty-two weeks ended December 29, 2018 compared to $61.1 million for the fifty-two weeks ended December 30, 2017. USPB carries its 15.0729% investment in NBP under the equity method of accounting.

Other, net. Other income was $0.4 million for the fifty-two weeks ended December 29, 2018 compared to $0.1 million for the fifty-two weeks ended December 30, 2017, an increase of approximately $0.3 million. The increase was primarily due to higher lease income on the Company owned delivery rights.

Income Tax Expense. USPB is structured as an LLC and is therefore not subject to income taxes at the Company level. See USPB’s Notes to Financial Statements (Note 2) for further information.

Net Income. Net income for the fifty-two weeks ended December 29, 2018 was approximately $86.6 million compared to approximately $57.5 million for the fifty-two weeks ended December 30, 2017, an improvement of approximately $29.1 million. The improvement was due to higher net income at NBP.

Fiscal Year Ended December 30, 2017 compared to December 31, 2016

Net Sales. There were no sales during the fifty-two weeks ended December 30, 2017 and the fifty-three weeks ended December 31, 2016.

Cost of Sales. There were no cost of sales during the fifty-two weeks ended December 30, 2017 and the fifty-three weeks ended December 31, 2016.

Selling, General and Administrative Expenses. Selling, general and administrative expenses were approximately $4.0 million for the fifty-two weeks ended December 30, 2017, compared to approximately $3.6 million for the fifty-three weeks ended December 31, 2016, an increase of approximately $0.4 million. The increase is primarily due to higher expenses associated with the bonus plans and phantom unit plans, which were partially offset by lower legal and non-compete expenses.

Depreciation and Amortization Expense. There were immaterial depreciation and amortization expenses during the fifty-two weeks ended December 30, 2017 compared to the fifty-three weeks ended December 31, 2016.

Operating Loss. Operating loss was approximately $4.0 million for the fifty-two weeks ended December 30, 2017 compared to approximately $3.6 million for the fifty-three weeks ended December 31, 2016, an increase of approximately $0.4 million.

Interest Income. Interest income was $0.3 million during the fifty-two weeks ended December 30, 2017 and immaterial in the fifty-three weeks ended December 31, 2016.

Equity in Income of National Beef Packing Company, LLC. Equity in NBP income was $61.1 million for the fifty-two weeks ended December 30, 2017 compared to $49.3 million for the fifty-three weeks ended December 31, 2016. USPB carries its 15.0729% investment in NBP under the equity method of accounting.

Other, net. Other income was $0.1 million for the fifty-two weeks ended December 30, 2017 compared to $0.7 million for the fifty-three weeks ended December 31, 2016, a decrease of approximately $0.6 million. The decrease was primarily due to lower lease income on the Company owned delivery rights.

Income Tax Expense. USPB is structured as an LLC and is therefore not subject to income taxes at the Company level. See USPB’s Notes to Financial Statements (Note 2) for further information.

Net Income. Net income for the fifty-two weeks ended December 30, 2017 was approximately $57.5 million compared to approximately $46.4 million for the fifty-three weeks ended December 31, 2016, an improvement of approximately $11.1 million. The improvement was due to higher net income at NBP.

Liquidity and Capital Resources

As of December 29, 2018, we had net working capital (the excess of current assets over current liabilities) of approximately $80.0 million, which included cash and cash equivalents of $88.4 million. As of December 30, 2017, we had net working capital of approximately $87.9 million, which included cash and cash equivalents of $119.1 million. Our primary sources of liquidity for fiscal year 2018 were cash, cash flows from operating activities, and available borrowings under the Master Loan Agreement with CoBank.

As of December 29, 2018, USPB had no long-term debt outstanding. We had a $5.0 million revolving term loan with CoBank all of which was available. USPB was in compliance with all of the financial covenants under its Master Loan Agreement as of December 29, 2018.

USPB believes available borrowings under the Master Loan Agreement and cash will be sufficient to support its working capital and cash flow requirements. For a review of the obligations that affect USPB’s liquidity, please see the ‘‘Cash Payment Obligations’’ table below.

Operating Activities

Net cash provided by operating activities was $64.7 million in fiscal year 2018 as compared to net cash provided by operating activities of $30.3 million in fiscal year 2017. The $34.4 million increase was primarily due to the higher distributions received from NBP that were classified as a distribution from Operating Activities.

Net cash provided by operating activities was $30.3 million in fiscal year 2017 as compared to net cash provided by operating activities of $8.3 million in fiscal year 2016. The $22.0 million increase was primarily due to the higher distributions received from NBP.

Investing Activities

Net cash provided by investing activities was $18.2 million in fiscal year 2018 as compared to net cash provided by investing activities was $30.9 in fiscal year 2017. The $12.7 million decrease was due to lower distributions received from NBP that were classified as a distribution from Investing Activities.

Net cash provided by investing activities was $30.9 million in fiscal year 2017 as compared to net cash provided by investing activities was $27.5 in fiscal year 2016. The $3.4 million change was due to higher distributions received from NBP.

Financing Activities

Net cash used in financing activities was $113.6 million in fiscal year 2018 as compared to $27.4 million in fiscal year 2017. The $86.2 million change was due to higher distributions to members in fiscal year 2018 compared to fiscal year 2017.

Net cash used in financing activities was $27.4 million in fiscal year 2017 as compared to $35.8 million in fiscal year 2016. The $8.4 million change was due to lower cash payments to members in fiscal year 2017 compared to fiscal year 2016.

CoBank Debt

On June 13, 2017, USPB and CoBank entered into a Revolving Term Loan Supplement to the Master Loan Agreement dated July 26, 2011. The Revolving Term Loan Supplement provides for a $5 million revolving credit commitment. The new commitment carries a term of three years, maturing on June 30, 2020. The Pledge Agreement provides CoBank with a first-priority security interest in USPB’s membership interests in, and distributions from, NBP.

All of the $5 million revolving credit commitment was available as of December 29, 2018. Borrowings under the revolving credit commitment bear interest at the base rate or LIBOR rate plus applicable margin.

On December 30, 2011, in connection with the closing of the Leucadia Transaction, the Company and CoBank entered into the Consent and First Amendment to Pledge Agreement and Security Agreement, by which CoBank agreed to (i) consent to the Membership Interest Sale and the PA Distribution, (ii) release its security interest in, and liens on, the Membership Interests being sold pursuant to the Membership Interest Sale, (iii) consent to the NBP Pledge and (iv) consent to the amendments and restatements of the NBP Operating Agreement and the PA Newco Operating Agreement. The NBP Pledge grants NBP a perfected security interest in and to USPB’s membership interests in, and distributions from, NBP, subject only to the prior first priority security interest held by CoBank.

Cash Payment Obligations

The following table describes the cash payment obligations as of December 29, 2018 (thousands of dollars):

			Fiscal Year		Fiscal Year		Fiscal Year		Fiscal Year		Fiscal Year
	Total		2019 (Year 1)		2020 (Year 2)		2021 (Year 3)		2022 (Year 4)		2023 (Year 5)		After Year 5
Revolving credit facility	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Interest on long-term debt	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Non-competition payments⁽¹⁾	$	2,901	$	846	$	848	$	850	$	357	$	-	$	-
Operating leases	$	366	$	57	$	58	$	59	$	60	$	61	$	71
Total	$	3,267	$	903	$	906	$	909	$	417	$	61	$	71

⁽¹⁾ Reflects payments to be made to current and former Chief Executive Officer's pursuant to their employment agreements.

Off-Balance Sheet Arrangements

As of December 30, 2017, we did not have any material off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Inflation

We believe our results of operations are not materially affected by moderate changes in the inflation rate. Inflation and changing prices did not have a material effect on our operations in fiscal years 2018 and 2017. Severe increases in inflation, however, could affect the global and U.S. economies and could have an adverse effect on our business, financial condition and results of operations.

Seasonality and Fluctuations in Operating Results

The Company’s operating results are influenced by seasonal factors in the beef industry. These factors affect the price NBP pays for livestock as well as the ultimate price at which NBP sells its products. The seasonal demand for beef products is highest in the summer and spring months as weather patterns permit more outdoor activities and there is an increased demand for higher value items that are grilled, such as steaks. Both live cattle prices and boxed beef prices tend to be at seasonal highs during the summer and fall. Because of higher consumption, more favorable growing conditions and the housing of animals in feedlots for the winter months, there are generally more cattle available in the summer and fall.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The principal market risk affecting USPB’s business is exposure to interest rate risk, to the extent the Company has debt outstanding. As of December 29, 2018, the Company did not have any outstanding debt.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and notes thereto, and other information required by this Item 8, are included in this report beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

We maintain a system of controls and procedures designed to provide reasonable assurance as to the reliability of the financial statements and other disclosures included in this report, as well as to safeguard assets from unauthorized use or disposition. We evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e) under supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, as of the end of the period covered by this Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in alerting them, in a timely manner, to material information required to be included in our periodic Securities and Exchange Commission filings. There have been no changes in our internal control over financial reporting during the fifty-two weeks ended December 29, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is designed to provide reasonable assurance as to the reliability of the Company’s financial reporting and the preparation of financial statements in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and managers of the Company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.

Internal control over financial reporting, no matter how well designed, has inherent limitations. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, internal control over financial reporting determined to be effective can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect all misstatements. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 29, 2018. In making this assessment, management used the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013 Framework). Based on the Company’s processes and assessment, as described above, management has concluded that, as of December 29, 2018, the Company’s internal control over financial reporting was operating effectively.

This annual report does not include a report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

ITEM 9B. OTHER INFORMATION

The Company may purchase a portion of its outstanding Class A and Class B units from time to time in accordance with the limits imposed under the CoBank Master Loan Agreement.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Board of Directors

USPB’s business and affairs are governed by its board of directors. The board of directors is to consist of seven directors. The board of directors has full authority to act on behalf of USPB. The board of directors act collectively through meetings, committees and executive officers it appoints. In addition, USPB employs a staff of professionals to manage the day-to-day business of USPB. The members of the board of directors, nominees to the board of directors and the executive officers are identified below. There are no arrangements or understandings pursuant to which any director, nominee to become a director or executive officer was elected or appointed.

Directors, Director Nominee and Executive Officers
			Term Expires in
Name	Age	Positions and Offices with Registrant	March of FY

Mark R. Gardiner	58	Chairman of the Board	2020
Joe M. Morgan	67	Vice Chairman of the Board	2020
Jerry L. Bohn	69	Secretary	2019
Wayne L. Carpenter	57	Director	2019
John M. Freund	51	Director	2020
Rex W. McCloy	64	Director	2021
Jeff H. Sternberger	58	Director	2021
Stanley D. Linville	60	Chief Executive Officer	—
Scott J. Miller	54	Chief Financial Officer	—
Danielle D. Imel	43	Treasurer	—

Mark R. Gardiner. Mr. Gardiner is President of Gardiner Angus Ranch, Inc. (GAR), a family owned purebred and commercial Angus operation headquartered at Ashland, Kansas, with 10 seedstock satellite cowherds across the United States and Australia. Mr. Gardiner has been involved with the management of GAR since 1983. GAR markets over 2,000 bulls and 700 females per year to both commercial and seedstock beef producers throughout the United States. GAR also runs an embryo transfer program that makes more than 3,500 transfers per year, including more than 60% of GAR’s 1,500-plus head of registered Angus calves born each year. A percentage of its calves are finished at commercial feedlots to provide carcass data on all Gardiner sires. In addition to a native range program, GAR operates a significant dryland farming enterprise. Mr. Gardiner is a member of the National Cattlemen’s Beef Association, Kansas Livestock Association, American Angus Association, Kansas Angus Association and the Beef Improvement Federation. He also serves on the Board of Irsik & Doll Company, a privately held company primarily involved in cattle feeding, grain and feed merchandising. Mr. Gardiner has served as a member of the Company’s Board of Directors since 1996. He was elected Secretary/Treasurer of the Company’s Board in 2003, Vice Chairman of the Board in 2004 and Chairman of the Board in 2006. Mr. Gardiner holds a Bachelor’s degree from Kansas State University in Animal Sciences and Industry. As a member of USPB’s board of directors, Mr. Gardiner and the entities he is associated with that deliver cattle to USPB are considered affiliates of USPB.

Joe M. Morgan. Mr. Morgan has been managing commercial feed yards since 1983. He has been Manager of Poky Feeders since 1985 and part owner since 1987. Mr. Morgan has been involved with employee issues and the growth of Poky Feeders (starting with a capacity of 17,000 head to today of over 85,000 head), plus ranches in seven states. Mr. Morgan has had responsibility for all banking of Poky Feeders for over 30 years and has responsibility for risk management of all feeding entities. He also has farming interests in Iowa and is a member of the National Cattlemen’s Beef Association and the Kansas Livestock Association. Mr. Morgan holds a Bachelor’s degree in Animal Science from Iowa State University. Mr. Morgan has served as a member of the Company’s board since 2007 and as a Nominating Committee member prior to 2007. As a member of USPB’s board of directors, Mr. Morgan and the entities he is associated with that deliver cattle to USPB are considered affiliates of USPB.

Jerry L. Bohn. Mr. Bohn is a board member and owner of Pratt Feeders. Mr. Bohn also owns and manages a 2,000 to 3,000 head cattle operation which includes grazing and finishing cattle. Throughout Mr. Bohn has over 40 years of agricultural business management experience, he has worked with complex banking and financial data and is required to make decisions involving several hundred thousand dollars, on a daily basis. Mr. Bohn previously was employed as Director of Market Analysis for Cattle-Fax, an industry market analysis firm. Mr. Bohn has served as president of the Kansas Livestock Association. He has been a Board member of the Kansas Beef Council, the National Cattlemen’s Beef Association (NCBA) and Feeders Advantage, a private animal health product distribution company. Mr. Bohn has also served on the NCBA’s Executive Committee, chairman of NCBA’s Live Cattle Marketing, and NCBA’s Policy Committee, serving as Chair in 2018 and Vice-Chair in 2017. Mr. Bohn served on USPB’s Board from 2004 through 2007 and was reelected in 2009. He was elected Secretary of USPB’s Board in 2006. He holds a Bachelor’s degree in Animal Sciences and Industry from Kansas State University. As a member of USPB’s board of directors, Mr. Bohn and the entities he is associated with that deliver cattle to USPB are considered affiliates of USPB.

Wayne L. Carpenter. Mr. Carpenter is the President and owner of Carpenter Cattle Company Inc. which was established in 1980. His operation today consists of a 15,000 head feed yard which markets 10,000-11,000 head through USPB annually. Mr. Carpenter runs 1,100 mother cows and also yearlings on ranches in Kansas and Montana. His farming operation consists of dryland and irrigated acres, which markets most of its crop production through the feed yard. Mr. Carpenter is a member of Kansas Livestock Association and National Cattlemen’s Beef Association. Carpenter Cattle Company Inc. has been a member of USPB since the beginning. Mr. Carpenter has served as a member of the Company’s board since 2016. As a member of USPB’s board of directors, Mr. Carpenter and the entities he is associated with that deliver cattle to USPB are considered affiliates of USPB.

John M. Freund. Mr. Freund has been actively involved in his family’s cattle feeding operation in Southwest Iowa since 1985 and has been president since 2005. In addition to the feeding operation, the business also includes feed grain production and has ownership in stockers, feedlot production and a ranch in other Midwest states. He has been a member of USPB since its inception and was a member of the company’s Nominating Committee from 2011 to 2015. As a member of USPB’s board of directors, Mr. Freund and the entities he is associated with that deliver cattle to USPB are considered affiliates of USPB.

Rex W. McCloy. Mr. McCloy has over 40 years of experience in the cattle business and is manager and part-owner of McLeod Farms Inc., a family-owned business involved in farming and ranching in the Texas Panhandle. Mr. McCloy is a member of the National Cattlemen’s Beef Association, the Texas Cattle Feeder's Association (TCFA) and the Texas Southwestern Cattle Raisers Association. He is a past Board member and marketing committee chairman of TCFA. In addition, he is a former member of U.S. Premium Beef’s Nominating Committee. Mr. McCloy holds a Bachelor’s degree in Agricultural Economics from Texas Tech University. Mr. McCloy has served as a member of the Company’s board since 2005. Mr. McCloy is a former board member of the Hutchinson County Hospital District and is presently on the Board of Managers at Adobe Walls Cotton Gin. As a member of USPB’s board of directors, Mr. McCloy and the entities he is associated with that deliver cattle to USPB are considered affiliates of USPB.

Jeff H. Sternberger. Mr. Sternberger is the manager and part owner of Midwest Feeders, Inc. Mr. Sternberger has been the manager of Midwest Feeders, Inc. since 1992 and has overseen large growth in his company and directed the acquisition of other business to add to their holdings. Mr. Sternberger has been the direct contact during that time frame for all banking and accounting relationships. He also owns and operates a farming and cattle operation in Oklahoma as well as a personal cattle feeding operation. He serves as a director of Midwest Feeders, Inc., CRI Feeders of Guymon LLC, and Brookover Cattle Co. of Scott City LLC. Mr. Sternberger holds a Bachelor of Science Degree in Agricultural Economics from Oklahoma State University. As a member of USPB’s board of directors, Mr. Sternberger and the entities he is associated with that deliver cattle to USPB are considered affiliates of USPB.

Stanley D. Linville. Mr. Linville has served as the Company’s Chief Executive Officer since January 28, 2013. Prior to this appointment, he served as the Company’s Chief Operating Officer, a position he held since joining the Company in 1997. As CEO, Mr. Linville continues to oversee cattle scheduling and technical operations. Before joining U.S. Premium Beef, he operated a family farming operation near Holcomb, Kansas. He also worked in the cattle division of Brookover Enterprises at Garden City, Kansas, and as a grain merchandiser for Bartlett Grain Co. in Kansas City. Mr. Linville holds a Bachelor’s degree in Agricultural Economics from Kansas State University.

Scott J. Miller. Mr. Miller has served as the Company’s Chief Financial Officer since January 2010. Prior to this appointment, he served as the Company’s Chief Reporting and Compliance Officer, a position he held since joining the Company in 2005. He oversees the finance and treasury functions and is directly responsible for financial reporting, tax reporting, and ensuring compliance with internal policies and regulatory requirements. Before joining U.S. Premium Beef, he worked as the Manager, Capital Markets for Sprint Corporation from 2001 to 2005 and, prior to that, in various finance and accounting positions with Farmland Industries, Inc. Mr. Miller earned a Bachelor’s degree in Accounting from Benedictine College and an MBA with an emphasis in Finance from the University of Missouri. He has passed the Certified Public Accounting exam and the Certified Cash Managers exam.

Danielle D. Imel. Ms. Imel is the Company’s Treasurer and joined the Company in 1998. She oversees the Company’s finance functions and is directly responsible for Company treasury activities. She was employed by the CPA firm of Kennedy, McKee and Co., LLC of Dodge City, Kansas, prior to joining USPB. Ms. Imel earned a Bachelor’s degrees in Accounting and Agricultural Economics from Kansas State University.

Board of Directors

Under USPB’s limited liability company agreement, the number of directors is set by the board of directors but may not be less than seven directors. Directors must be unitholders of USPB. Seven directors will always be elected by unitholders holding Class A units.

The directors are elected at the annual meeting of the unitholders and hold office for a term of three years. The terms of the directors are staggered in such a manner that approximately one-third of the directors will be elected each year. All directors will hold office until their successors are elected and qualified. Any vacancy in the board, other than a vacancy resulting from expiration of a term of office, will be filled by a majority vote of the remaining directors. In case a vacancy in the board of directors extends beyond the next annual meeting, the vacancy will be filled by the remaining directors until such meeting, at which meeting a director will be chosen by the unitholders for the unexpired term of such vacancy.

In the discretion of the board of directors, the number of directors may be increased by up to an additional five directors. Those additional directors will represent the Class B unitholders and may be elected or appointed by either the board of directors or by the holders of Class B units.

Compensation of Directors

The board of directors meets from time to time at such time and place as may be fixed by resolution adopted by a majority of the whole board of directors. Members of the board of directors receive a per diem payment of $250 for each activity on behalf of USPB, as well as direct reimbursement of travel expenses related to service on the board of directors.

Audit Committee

The board of directors has an Audit Committee consisting of Messrs. Gardiner, Bohn, and McCloy. Subject to the qualifications in the section headed “Directors who are unitholders” in Item 13 below, all members of the Audit Committee are considered independent within the meaning of the listing standards of the NASDAQ. Mr. Gardiner is Chairman of the Audit Committee. The Board has identified Mr. Bohn as an “audit committee financial expert”. The Audit Committee selects and retains independent auditors and assists the board of directors in its oversight of the integrity of U.S. Premium Beef’s financial statements, including the performance of our independent auditors in their audit of our annual financial statements. The Audit Committee meets with management and the independent auditors, as may be required. The independent auditors have full and free access to the Audit Committee without the presence of management. The Audit Committee has a charter.

Code of Ethics

USPB has adopted a corporate Code of Conduct that is enforced throughout all levels of management and a Code of Ethics For Financial Officers for its Chief Executive Officer, Chief Financial Officer, and Treasurer within the meaning of the rules and regulations of the Securities and Exchange Commission. The Code of Ethics are intended to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. A copy of the Code of Conduct may be obtained, without charge, upon written request to Scott J. Miller, Chief Financial Officer, U.S. Premium Beef, LLC, P. O. Box 20103, Kansas City, Missouri 64195.

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Overview of Compensation Program

This Compensation Discussion and Analysis describes the material elements of compensation paid to our named executive officers as well as the objectives and material factors underlying our compensation program. The compensation program places emphasis on USPB’s financial performance and the benefits received by USPB’s unitholders.

The Compensation Committee (Committee) is responsible for developing and administering the compensation program for USPB’s named executive officers and professional staff.

Compensation Philosophy and Objectives

USPB’s compensation program is a key element in attracting, retaining, and motivating named executive officers with the skills necessary to create value for the unitholders. To achieve this goal, we have designed the compensation program with the following objectives:

Attracting and retaining top talent—The compensation of USPB’s executive officers must be commensurate with the competitive regional marketplace taking into consideration job responsibilities and supply of competent employees with the education and background to perform at the highest levels in their field.
Paying for financial and operational performance—The compensation of USPB’s executive officers should motivate them to achieve strong financial and operational results. USPB must achieve specific levels of financial and operational performance to allow executives to earn this portion of their compensation.
Alignment with the equity interests of our unitholders—Management phantom unit plans approved in September 2010 and January 2013 aligns management’s interest with the equity interests of USPB’s unitholders.

Each element of our compensation program is designed to achieve one or more of these objectives. The structure of a particular executive’s compensation may vary depending on the scope and level of that executive’s responsibilities.

Determining Executive Compensation

The CEO makes recommendations to the Committee regarding the salaries and bonus programs for the executive officers. The Committee reviews the recommendations, taking into account each element of total compensation. Based on the foregoing, the Committee uses its judgment in making compensation decisions that will best carry out USPB’s philosophy and objectives for executive compensation.

Fiscal Year 2018 Executive Compensation Elements

The elements of our named executive officers total compensation package are as follows:

base salary;
annual cash bonuses;
long-term cash bonus;
discretionary cash bonuses;
retirement plans; and
limited personal benefits.

Elements of Our Compensation Program

Base Salary

Base salaries are intended to provide a level of compensation sufficient to attract and retain an effective management team, when considered in combination with the other components of our executive compensation program. The relative levels of base salary for named executive officers are designed to reflect each executive officer’s scope of responsibility and accountability with USPB. Except for the CEO’s salary, base salaries are reviewed annually to determine if they are consistent with the performance of the individual executive and equitable relative to USPB’s other executive officers and professional staff. Salary surveys summarizing the compensation packages for positions of equivalent responsibility in related industries were used to establish the CEO’s base salary.

On December 21, 2015, USPB entered into an employment agreement with Mr. Linville (2016 Employment Agreement), which became effective on January 1, 2016. The 2016 Employment Agreement provides for Mr. Linville to serve as USPB’s CEO for a term that started on January 1, 2016 and expires on December 29, 2018. The 2016 Employment Agreement provides for Mr. Linville to receive an annual base salary of $300,000.

On December 14, 2018, USPB entered into an amended employment agreement with Mr. Linville (2019 Employment Agreement), which became effective on December 30, 2018. The 2019 Employment Agreement provides for Mr. Linville to serve as USPB’s CEO for a term that started on December 30, 2018 and expires on December 25, 2021. The 2019 Employment Agreement provides for Mr. Linville to receive an annual base salary of $330,000.

Annual Cash Incentive/Bonuses

Cash incentive and bonus plans were designed to provide the financial incentive to the CEO and other named executive officers to influence USPB unitholder benefits and are only paid after certain levels of benefits have been achieved.

Under the terms of the 2016 Employment Agreement, if Mr. Linville is employed by USPB on the last day of any fiscal year, (except as otherwise provided in the agreement) during the term of the 2016 Employment Agreement, he shall be paid annual incentive compensation equal to seventy-five one-hundredths of a percent (0.75%) of the sum of the total financial benefits to USPB (USPB Total Benefits) that exceed $25,000,000 (Annual Incentive). The USPB Total Benefits are: (1) audited fiscal year-end USPB earnings before tax; and (2) the fiscal year USPB grid premiums, which is the net sum of all USPB unitholder and associate grid premiums and discounts calculated through all USPB grids at all plants as outlined in the 2016 Employment Agreement.

Under the terms of the CEO’s 2019 Employment Agreement, if Mr. Linville is employed by USPB on the last day of any fiscal year, he shall be paid an annual incentive compensation equal to seventy-five one-hundredths of a percent (0.75%) of the sum of the total financial benefits to USPB (USPB Total Benefits) that exceed $25,000,000 (Annual Incentive). The USPB Total Benefits are: (1) audited fiscal year-end USPB earnings before tax; and (2) the fiscal year USPB grid premiums, which is the net sum of all USPB unitholder and associate grid premiums and discounts calculated through all USPB grids at all plants as outlined in the 2019 Employment Agreement.

For fiscal year 2018, named executive officers and certain professional staff who were employed on the last day of the fiscal year will be paid his or her proportionate share of the Management Bonus Pool. The Management Bonus Pool is: (1) the audited fiscal year 2018 USPB earnings before tax plus USPB grid premiums during the fiscal year, less (2) $15,000,000, multiplied by (3) management bonus factor. The bonus plan payments are vested over a two-year period. The maximum Management Bonus Pool for a given bonus plan year is equal to 150% of the sum of the qualifying participants’ salaries in effect at the end of such year.

Long-term Incentive

Mr. Linville is eligible for a long-term incentive compensation under the 2016 Employment Agreement. If he is employed by USPB on December 29, 2018, he is to be paid long-term incentive compensation equal to fifty one-hundredths of a percent (0.50%) of the amount by which the USPB Total Benefits from January 1, 2016 to December 29, 2018 exceed $75,000,000 (Long-Term Incentive). The 2016 Employment Agreement provides for a cumulative annual cap of $450,000 for payments to Mr. Linville for Annual Incentive and Long-Term Incentive cash bonuses.

Mr. Linville is eligible for a long-term incentive compensation under the 2019 Employment Agreement. If he is employed by USPB on December 25, 2021, he is to be paid long-term incentive compensation equal to fifty one-hundredths of a percent (0.50%) of the amount by which the USPB Total Benefits from December 30, 2018 to December 25, 2021 exceed $75,000,000 (Long-Term Incentive). The 2019 Employment Agreement provides for a cumulative annual cap of $495,000 for payments to Mr. Linville for Annual Incentive and Long-Term Incentive cash bonuses.

Discretionary Cash Bonuses

Discretionary bonuses may be paid to named executive officers, other than the CEO, and professional staff to compensate for extraordinary cases of individual or Company performance.

Retirement Plans

Qualifying employees are encouraged to participate in the Company’s sponsored 401(k) savings plan. Under USPB’s plan, employees may contribute up to the maximum amount permissible by IRS limits. USPB matches 100% of each dollar contributed by a participant up to a maximum of 4% of his or her qualifying compensation.

Limited Personal Benefits

USPB also provides certain benefits to all salaried employees that are not included as perquisites in the Summary Compensation Table for the named executives because they are broadly available. These include health and welfare benefits, and disability and life insurance.

Equity Compensation

In September 2010, USPB’s Board of Directors approved a management phantom unit plan. The phantom unit plan provides for the award of unit appreciation rights to certain management employees of USPB. USPB’s CEO administers the phantom unit plan and awards “Phantom Units” (Class A and Class B Units) to employees in amounts determined by the CEO, subject to the total Phantom Unit amount approved by the Board of Directors of USPB. During fiscal year 2011, a total of 5,000 Class A phantom units and 5,000 Class B phantom units were awarded to management employees. As a result of the retirement of one of USPB’s employees on December 31, 2014, 4,750 Class A phantom units and 4,750 Class B phantom units remained outstanding at December 28, 2018, all of which were fully vested.

In November 2012, USPB’s Board of Directors approved the issuance of an additional 1,500 Class A phantom units and 1,500 Class B phantom units to certain members of management, to be effective on January 28, 2013. These phantom units were fully vested and remain outstanding.

Employment Agreements

With the exception of the CEO, all of our executive officers are employed at-will, without employment agreements, severance payment agreements or payment arrangements that would be triggered by a “change in control” of USPB.

CEO Employment Agreement

On December 21, 2015, USPB entered into the 2016 Employment Agreement with Mr. Linville, which became effective on January 1, 2016 and expires on December 29, 2018, subject to earlier termination as provided in the agreement.

Mr. Linville’s annual base salary is $300,000. Mr. Linville will be eligible for an annual incentive compensation payment based on the financial performance of USPB and the benefits received by USPB’s unitholders; that incentive compensation will only be paid to Mr. Linville after certain levels of benefits have been achieved. Under the terms of the 2016 Employment Agreement, if Mr. Linville is employed by USPB on the last day of any employment year (except as otherwise provided in the agreement) during the term of the 2016 Employment Agreement, he shall be paid an Annual Incentive. If he is employed by USPB on December 29, 2018, he is to be paid Long-Term Incentive compensation. The 2016 Employment Agreement provides for a cumulative annual cap of $450,000 for payments to Mr. Linville for annual and long-term incentive amounts.

The 2016 Employment Agreement also provides for post termination compensation. In addition to the amounts described below that will be payable upon termination of the agreement, Mr. Linville has agreed to a noncompetition provision that, for twelve (12) months following the termination of Mr. Linville’s employment with USPB, prohibits him from participating in the management or control of any beef industry business or enterprise that competes with the business of USPB and its various affiliates. During such period, Mr. Linville will receive a monthly payment equal to one twelfth of Mr. Linville’s annual salary at the time of termination. If Mr. Linville terminates the agreement for any or no reason, USPB need only pay salary earned to the date of the termination, and the noncompetition compensation, unless termination is the result of death or permanent disability. If USPB terminates the agreement for any reason other than cause, death or disability, or if Mr. Linville terminates the 2016 Employment Agreement for good reason, Mr. Linville shall be entitled to salary and benefits through fiscal year 2018; payment of certain fringe benefits through fiscal year 2018; the annual incentive bonus for the year in which the termination occurs and each subsequent year through fiscal year 2018; the long-term incentive bonus that would have accrued had Mr. Linville been employed through fiscal year 2018; and the payment of the noncompetition compensation.

On December 14, 2018, USPB entered into the 2019 Employment Agreement with Mr. Linville, which became effective on December 30, 2018 and expires on December 25, 2021, subject to earlier termination as provided in the agreement. The 2019 Employment Agreement provides for a $330,000 salary and annual and long-term cash bonuses. The 2019 Employment Agreement provides for a cumulative average annual cap of $495,000 for payments to Mr. Linville for annual and long-term cash bonuses.

The 2019 Employment Agreement also provides for post termination compensation. In addition to the amounts described below that will be payable upon termination of the agreement, Mr. Linville has agreed to a noncompetition provision that, for twelve (12) months following the termination of Mr. Linville’s employment with USPB, prohibits him from participating in the management or control of any beef industry business or enterprise that competes with the business of USPB and its various affiliates. During such period, Mr. Linville will receive a monthly payment equal to one twelfth of Mr. Linville’s annual salary at the time of termination. If Mr. Linville terminates the agreement for any or no reason, USPB need only pay salary earned to the date of the termination, and the noncompetition compensation, unless termination is the result of death or permanent disability. If USPB terminates the agreement for any reason other than cause, death or disability, or if Mr. Linville terminates the 2019 Employment Agreement for good reason, Mr. Linville shall be entitled to salary and benefits through employment year 2021; payment of certain fringe benefits through employment year 2021; the annual incentive bonus for the year in which the termination occurs and each subsequent year through employment year 2021; the long-term incentive bonus that would have accrued had Mr. Linville been employed through employment year 2021; and the payment of the noncompetition compensation.

As with Mr. Linville’s 2016 Employment Agreement, Mr. Linville, holds a total of 2,300 Class A and 2,300 Class B phantom units under his 2019 Employment Agreement.

Impact of Tax and Accounting Treatments

We believe the compensation paid to our named executive officers is fully deductible under the Internal Revenue Code at the time it is paid.

Unit Ownership Guidelines

USPB does not allow its named executive officers to own USPB’s Class A units. As of December 29 2018, certain members of management own a total of 6,250 Class A and 6,250 Class B phantom unit rights awarded under the management phantom unit plans also discussed above.

Compensation Committee Report

The Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with USPB’s management. Based on the Committee’s review and discussions with management, the Committee has recommended to the Board that this Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

Compensation Committee

Mark Gardiner – Chairman

Joe Morgan

Jerry Bohn

Summary Compensation Table

The table below sets forth information regarding compensation for our named executive officers for fiscal years 2018, 2017, and 2016. Non-Equity Incentive Plan Compensation amounts reflected in this table are performance based awards and include amounts earned under our annual and long term cash bonus plans.

					Non-Equity
					Incentive Plan		All Other
Name and Principal				Option Awards	Compensation		Compensation
Position	Period	Salary ($)	Bonus ($)	($)	($)		($)		Total ($)

Stanley D. Linville	FY 2018	308,477	-	-	452,372	(3)	225,011	(1)	985,860
Chief Executive Officer	FY 2017	305,172	-	-	450,000	(3)	62,554	(1)	817,726
	FY 2016	308,190	-	-	447,628	(3)	77,387	(1)	833,205

Scott J. Miller	FY 2018	188,246	-	-	271,950	(2)	166,532	(1)	626,728
Chief Financial Officer	FY 2017	188,246	-	-	245,006	(2)	39,933	(1)	473,185
	FY 2016	190,714	-	-	210,842	(2)	71,978	(1)	473,534

Danielle D. Imel	FY 2018	133,125	-	-	195,750	(2)	99,230	(1)	428,105
Treasurer	FY 2017	131,595	-	-	176,355	(2)	14,625	(1)	322,575
	FY 2016	132,964	-	-	151,764	(2)	58,727	(1)	343,455

(1) Mr. Linville - Amounts for Mr. Linville include Company match under our 401(k) plan and non-dilution payments made as a result of the management phantom unit plan, $11,000 and $214,011, respectively in fiscal year 2018; $10,800 and $51,754, respectively in fiscal year 2017; and $10,747 and $66,640, respectively in fiscal year 2016.

Mr. Miller - Amounts for Mr. Miller include Company match under our 401(k) plan and non-dilution payments made as a result of the management phantom unit plan, $11,000 and $155,532, respectively in fiscal year 2018; $10,800 and $29,133, repectively in fiscal year 2017; and $10,322 and $61,476, respectively in fiscal year 2016.

Ms. Imel - Amounts for Ms. Imel include Company match under our 401(k) plan and non-dilution payments made as a result of the management phantom unit plan, $11,000 and $88,230, respectively in fiscal year 2018; $8,705 and $5,920, respectively in fiscal year 2017 and $7,535 and $51,192, respectively in fiscal year 2016.

(2) This amount represents the executive's proportionate share of the Management Bonus Pool. One half of this amount will not be paid unless the executive is employed at the end of following fiscal year.

(3) The amount of non-equity incentive plan compensation, which is to include the annual cash bonus and amounts earned pursuant to the long-term cash bonus plan pursuant to Mr. Linville's employment agreement. The amounts represent annual cash bonus of $450,000, $450,000, and $447,628 for fiscal years 2018, 2017, and 2016, respectively, and $2,372, $0, and $0 of long-term cash bonus for fiscal years 2018, 2017, and 2016, respectively. The Linville Employment Agreement provides for a cumulative annual cap of $450,000 for payments to Mr. Linville for annual and long-term incentive amounts.

Grants of Plan-Based Awards in the Fiscal Year 2018

The table below sets forth information regarding grants of a non-equity incentive plan-based award made to our named executive officers during fiscal year 2018.

		Estimated Future Payouts under Non-Equity Incentive
					Plan Awards

Name and Principal Position	Grant Date	Threshold ($)			Target ($)			Maximum ($)
Stanley D. Linville (2)	11/7/2018	$	-	(3)			(3)	$	1,485,000	(2)
Chief Executive Officer

Scott J. Miller	10/24/2018	$	-		$	219,836	(1)	$	271,950
Chief Financial Officer

Danielle D. Imel	10/24/2018	$	-		$	158,239	(1)	$	195,750
Treasurer

(1) The target amount is based on estimated benefits for fiscal year 2019. Amounts to be paid, which could be more or less, will be based on actual input amounts for fiscal year 2019 and will be paid out over a two-year period.

(2) On December 14, 2018, USPB entered into the 2019 Employment Agreement, effective December 30, 2018 through December 25, 2021, with Mr. Linville that provides for non-equity incentive plan awards of annual cash bonuses and long-term cash bonuses. The compensation provided to Mr. Linville in the form of annual cash and long-term cash bonuses shall be subject to a cumulative annual cap pro-rated over the term of his contract not to exceed $495,000 per year averaged over the term.

(3) Threshold and target compensation under these incentive plan awards are not determinable and actual compensation will be based on company earnings, cattle deliveries and grid premiums over the term of the contract.

Discussion of Summary Compensation Table and Grants of Plan-Based Awards Performance Based Annual Cash Bonuses

Our executive officers earn bonus awards made pursuant to various annual cash bonus plans. The awards utilize formulas set by the Compensation Committee. The bonuses earned pursuant to the plans appear in the Non-Equity Incentive Plan Compensation in the Summary Compensation Table. Annual incentive bonuses awarded to executives, excluding Mr. Linville, also appear in the Grants of Plan Based Awards table. The formulas used to calculate the annual performance-based bonus awards to the Named Executive Officers were as follows:

Name		Bonus Formula

Stanley D. Linville		For fiscal year 2019: 0.75% of the sum of the total financial benefits to USPB (USPB Total Benefits)
		that exceed $25,000,000. USPB Total Benefits are: (1) audited fiscal year-end USPB earnings before
		tax; and (2) the fiscal year USPB grid premiums, which is the net sum of all USPB unitholder and
		associate grid premiums and discounts calculated through all USPB grids at all plants as outlined
		in the 2019 Employment Agreement.


Scott J. Miller and		For fiscal year 2019: The executive’s proportionate share of the Management Bonus Pool, which is
Danielle D. Imel		(1) the audited fiscal year 2019 USPB earnings before tax plus USPB grid premiums during fiscal
		year 2019, less (2) $15,000,000, multiplied by (3) management bonus factor. The bonus plan
		payments are vested over a two-year period. The maximum Management Bonus Pool for a given
		bonus plan year is equal to 150% of the sum of the qualifying participants’ salaries in effect at the
		end of such year.

Other Bonuses

We also pay discretionary cash bonuses to executive officers from time to time to reward elements of performance that are not reflected in the criteria for performance based cash bonuses. No such bonuses were paid to executive officers in fiscal year 2018, 2017, and 2016. The discretionary bonuses, if paid, are disclosed in the Bonus column in the Summary Compensation Table.

Outstanding Equity Awards at Fiscal Year End 2018

	Option Awards
	Number of Securities
	Underlying		Option Exercise Price
Name and Principal Position	Unexercised Options		($)			Option Expiration Date
Stanley D. Linville	1,300 Class A Units	(1)		$0.00	(3)	None
Chief Executive Officer	1,300 Class B Units	(1)		$0.00	(3)	None
	1,000 Class A Units	(2)		$66.01		None
	1,000 Class B Units	(2)		$73.72		None

Scott J. Miller	1,200 Class A Units	(1)		$0.00	(3)	None
Chief Financial Officer	1,200 Class B Units	(1)		$0.00	(3)	None
	500 Class A Units	(2)		$66.01		None
	500 Class B Units	(2)		$73.72		None

Danielle D. Imel	1,000 Class A Units	(1)		$0.00	(3)	None
Treasurer	1,000 Class B Units	(1)		$0.00	(3)	None

(1) The phantom plan awards, which provide for the award of appreciation rights only, for Mr. Miller, Mr. Linville and Ms. Imel vested over a 5 year period. At the end of fiscal year 2018, the unexercised phantom units were fully vested, and therefore exercisable.
(2) The phantom plan awards, which provide for the award of appreciation rights only, for Mr. Miller and Mr. Linville vest over a 5 year period. At the end of fiscal year 2018,, the unexercised phantom units were fully vested and therefore fully exercisable.
(3) During fiscal year 2011, a total of 5,000 Class A phantom units and 5,000 Class B phantom units were awarded to certain management employees, with a strike price of $118 and $157, respectively. However, as a result of the 2011 Leucadia Transaction, management employees received a payment under the management phantom unit plan. As a result of that payment, the strike price for both the Class A phantom units and Class B phantom units was satisified and is now $0. As a result of the retirement of one of USPB’s employees on December 31, 2014, 4,750 Class A phantom units and 4,750 Class A phantom units remained outstanding at December 29, 2018, all of which were fully vested.

Options Exercised

	Option Awards
	Number of options	Value realized on
Name and Principal Position	acquired on exercise	exercise ($)

Stanley D. Linville	-	$	-
Chief Executive Officer

Scott J. Miller	-	$	-
Chief Financial Officer

Danielle D. Imel	-	$	-
Treasurer

Retirement Plans

We do not maintain a qualified or non-qualified defined benefit pension plan covering any of our employees. Our named executive officers are eligible to participate in our tax-qualified Profit Sharing and Savings Plan on the same basis as other employees under the plan. The Company makes a matching contribution to this plan equal to 100% of each participant’s own elective contributions up to 4% of his or her qualifying compensation. The Company also has the discretion to make annual profit sharing contributions that are allocated among all eligible participants in proportion to their respective compensation. The Company did not make a profit sharing contribution to the plan in fiscal year 2018. The Summary Compensation Table above reflects the contributions to our Profit Sharing and Savings Plan for those employees whose All Other Compensation exceeds $10,000.

Potential Payments Upon Termination

Mr. Stanley D. Linville

2016 Employment Agreement

If the 2016 Employment Agreement is terminated upon death or permanent disability, Mr. Linville is entitled to:

Salary to the date of the termination plus continued monthly payment of salary through the earlier of the first anniversary of the termination or the contract expiration date (Deemed Termination Date). If Mr. Linville were terminated upon death or disability in fiscal year 2018, his payment would be $300,000;
If termination is due to permanent disability, provision of certain fringe benefits through the Deemed Termination Date, but excluding vacation pay, personal and sick days, vehicle, telecommunications, and 401(k) contributions, (subject to any necessary consent of applicable insurers which, if consent is not obtained within 30 days after termination, then the cash value of the monthly premiums at the date of termination shall be paid to CEO in equal monthly payments), through the Deemed Termination Date;
Annual Incentive through the employment year in which the Deemed Termination Date occurs prorated for the last employment year based upon the period through the Deemed Termination Date;
Long-term Incentive that would have accrued if Mr. Linville had remained employed under the 2016 Employment Agreement through the Deemed Termination Date; and
The 2016 Employment Agreement provides for a cumulative annual cap of $450,000 for payments to Mr. Linville for Annual Incentive and Long-Term Incentive amounts.

If the 2016 Employment Agreement is terminated by USPB for cause or by Mr. Linville for other than good reason, he is entitled to:

Salary earned to the date of the termination; and
Payment of noncompetition compensation, unless Mr. Linville is terminated for being convicted of a felony or other serious crime or engaging in fraud, embezzlement or other illegal conduct to the detriment of USPB, in which case noncompetition compensation will not be paid.

If the 2016 Employment Agreement is terminated by USPB other than for cause, death or disability, or by Mr. Linville for good reason, he shall be entitled to:

Salary and benefits through December 29, 2018;
Payment of certain fringe benefits, but excluding vacation pay, personal and sick days, vehicle, telecommunications, and 401(k) contributions (subject to any necessary consent of applicable insurers which, if consent is not obtained within 30 days after termination, then the cash value of the monthly premiums at the date of termination shall be paid to CEO in equal monthly payments) through December 29, 2018;
Annual Incentive for the year in which the termination occurs and each subsequent year through employment year 2018;
Long-Term Incentive that would have accrued had Mr. Linville had remained employed through employment year 2018; and
The payment of the noncompetition compensation.
The 2016 Employment Agreement provides for a cumulative annual cap of $450,000 for payments to Mr. Linville for Annual Incentive and Long-Term Incentive amounts.

Where the 2016 Employment Agreement provides for post-termination noncompetition compensation, Mr. Linville will receive a monthly payment equal to the annual salary that would be paid to Mr. Linville under the 2016 Employment Agreement or his annual salary at the time of termination, whichever is greater, divided by twelve (12), which will be paid at normal salary payment intervals in effect for management personnel on the date of termination. USPB will also pay Mr. Linville certain fringe benefits provided to other employees of USPB, but excluding paid vacations, personal and sick days, allowances, telecommunications equipment or services, expense reimbursement (except on prior written approval), or 401(k) contributions (subject to any necessary consent of applicable insurers which, if consent is not obtained within 30 days after termination, then the cash value of the monthly premiums at the date of termination will be paid to CEO in equal monthly payments during the noncompetition period). In return for such payment, Mr. Linville has agreed to a noncompetition provision that, for twelve (12) months following the termination of Mr. Linville’s employment with USPB, prohibits him, within the United States of America, from participating through management or control or consult or employment of any beef packing or processing industry business or enterprise that competes with the business of USPB and its various affiliates. USPB may terminate the USPB noncompetition payments prior to the end of the twelve (12) month period if the Board of Directors determines the CEO violated the noncompetition restriction as outlined in the 2016 Employment Agreement.

2019 Employment Agreement

If the 2019 Employment Agreement is terminated upon death or permanent disability, Mr. Linville is entitled to:

Salary to the date of the termination plus continued monthly payment of salary through the earlier of the first anniversary of the termination or the contract expiration date (Deemed Termination Date). If Mr. Linville were terminated upon death or disability in fiscal year 2019, his payment would be $330,000;
If termination is due to permanent disability, provision of certain fringe benefits through the Deemed Termination Date, but excluding vacation pay, personal and sick days, vehicle, telecommunications, and 401(k) contributions, (subject to any necessary consent of applicable insurers which, if consent is not obtained within 30 days after termination, then the cash value of the monthly premiums at the date of termination shall be paid to CEO in equal monthly payments), through the Deemed Termination Date;
Annual Incentive through the employment year in which the Deemed Termination Date occurs prorated for the last employment year based upon the period through the Deemed Termination Date;
Long-term Incentive that would have accrued if Mr. Linville had remained employed under the 2019 Employment Agreement through the Deemed Termination Date; and
The 2019 Employment Agreement provides for a cumulative annual cap of $495,000 for payments to Mr. Linville for Annual Incentive and Long-Term Incentive amounts.

If the 2019 Employment Agreement is terminated by USPB for cause or by Mr. Linville for other than good reason, he is entitled to:

Salary earned to the date of the termination; and
Payment of noncompetition compensation, unless Mr. Linville is terminated for being convicted of a felony or other serious crime or engaging in fraud, embezzlement or other illegal conduct to the detriment of USPB, in which case noncompetition compensation will not be paid.

If the 2019 Employment Agreement is terminated by USPB other than for cause, death or disability, or by Mr. Linville for good reason, he shall be entitled to:

Salary and benefits through December 25, 2021;
Payment of certain fringe benefits, but excluding vacation pay, personal and sick days, vehicle, telecommunications, and 401(k) contributions (subject to any necessary consent of applicable insurers which, if consent is not obtained within 30 days after termination, then the cash value of the monthly premiums at the date of termination shall be paid to CEO in equal monthly payments) through December 25, 2021;
Annual Incentive for the year in which the termination occurs and each subsequent year through employment year 2021;
Long-Term Incentive that would have accrued had Mr. Linville had remained employed through employment year 2021; and
The payment of the noncompetition compensation.
The 2021 Employment Agreement provides for a cumulative annual cap of $495,000 for payments to Mr. Linville for Annual Incentive and Long-Term Incentive amounts.

Where the 2019 Employment Agreement provides for post-termination noncompetition compensation, Mr. Linville will receive a monthly payment equal to the annual salary that would be paid to Mr. Linville under the 2019 Employment Agreement or his annual salary at the time of termination, whichever is greater, divided by twelve (12), which will be paid at normal salary payment intervals in effect for management personnel on the date of termination. USPB will also pay Mr. Linville certain fringe benefits provided to other employees of USPB, but excluding paid vacations, personal and sick days, allowances, telecommunications equipment or services, expense reimbursement (except on prior written approval), or 401(k) contributions (subject to any necessary consent of applicable insurers which, if consent is not obtained within 30 days after termination, then the cash value of the monthly premiums at the date of termination will be paid to CEO in equal monthly payments during the noncompetition period). In return for such payment, Mr. Linville has agreed to a noncompetition provision that, for twelve (12) months following the termination of Mr. Linville’s employment with USPB, prohibits him, within the United States of America, from participating through management or control or consult or employment of any beef packing or processing industry business or enterprise that competes with the business of USPB and its various affiliates. USPB may terminate the USPB noncompetition payments prior to the end of the twelve (12) month period if the Board of Directors determines the CEO violated the noncompetition restriction as outlined in the 2019 Employment Agreement.

Director Compensation Table

Each director receives cash compensation for meetings attended. Directors are compensated $250 per diem for regular meetings, special meetings, compensation committee meetings and audit committee meetings. We do not award any other type of compensation to our directors.

The table below reflects compensation paid to each director during the fiscal year 2018.

	Fees Earned or
Name	Paid in Cash ($)
Mark R. Gardiner	3,500
Joe M. Morgan	2,750
Jerry L. Bohn	3,250
Wayne L. Carpenter	2,750
John M. Freund	2,750
Rex W. McCloy	3,250
Jeff H. Sternberger	2,750

Pay Ratio Disclosure Rule

Pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer, Stanley D. Linville. The purpose of the disclosure is to provide a measure of the equitability of pay within the organization. The Company believes its compensation policy yields an equitable result.

● Median employee total annual compensation for 2018	$278,185
● Stanley D. Linville total annual compensation for 2018	$758,477
● Ratio of Stanley D. Linville to Median employee compensation	2.7 : 1.0

In determining the median employee total annual compensation, a listing was prepared of all employees, other than the CEO, as of December 29, 2018. The median of the total annual compensation amounts for all the employees is the amount disclosed above.

Compensation Committee Interlocks and Insider Participation

None of the members of our Compensation Committee is, or was, an officer or employee of U.S. Premium Beef, LLC or its subsidiaries. None of our executive officers served as a director or was a member of the compensation committee of any entity where a member of our Board or Compensation Committee was an executive officer.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDER MATTERS

Equity Compensation Plan Information

The table below sets forth information with respect to securities available for issuance under our equity compensation plan.

	Equity Compensation Plan Information
				Number of
				securities
				remaining available
		Number of		for future issuance
		securities to be		under equity
		issued upon	Weighted-average	compensation plans
		exercise of	exercise price of	(excluding
	Type of	outstanding options,	outstanding options,	securities reflected
Plan Category	Equity	warrants and rights	warrants and rights	in column (2))
Equity compensation plans approved
by security holders		-	N/A	-

Equity compensation plans not
approved by security holders		-	N/A	-

Security Ownership of Certain Beneficial Owners

The following table sets forth certain information as of February 23, 2019 regarding the only persons known by the Company to own directly or indirectly, more than 5% of its Class A and Class B units.

		Number of Units
		Beneficially
Name and Address of Beneficial Owner	Title of Class	Owned	Percent of Class
Black Diamond Cattle Co, Inc. (1)	Class A	95,000	12.9	%
509 Country Lane	Class B	95,000	12.6	%
Council Grove, Kansas 66846
John Fairleigh ⁽²⁾	Class A	54,288	7.4	%
Box 560	Class B	54,288	7.2	%
Scott City, KS 67871
Stacy and Kelly Hoeme ⁽³⁾	Class A	41,125	5.6	%
PO Box 186	Class B	41,125	5.4	%
Scott City, KS 67871
Jeff Sternberger ⁽⁴⁾	Class A	40,770	5.5	%
05013 13 Rd	Class B	40,770	5.4	%
Ingalls, KS 67853

(1)	Includes 95,000 Class A and Class B units held by Black Diamond Cattle Co., Inc., which is managed by Karen Laue.
(2)	Includes i) 54,288 Class A and 30,000 Class B units held by JBT Land & Cattle, LLC., of which Mr. Fairleigh is part owner and
	ii) 24,288 Class B units held by Fairleigh Corporation dba Fairleigh Feed Yard, of which Mr. Fairleigh is part owner.
(3)	Includes i) 39,425 Class A and Class B units held by Crown H Cattle Co, Inc., of which Kelly and Stacy Hoeme are owners and
	ii) 1,500 Class A and Class B units owned by Stacy Hoeme and iii) 200 Class A and Class B units owned by Kelly Hoeme.
(4)	Includes i) 38,770 Class A and Class B units held by Midwest Feeders Inc. of which Mr. Sternberger is a manager, and
	ii) 2,000 Class A and Class B units owned CRI Feeders of Guymon, LLC of which Mr. Sternberger is a director.

Security Ownership of Management

The following table furnishes information, as of February 23, 2019, regarding ownership of USPB’s Class A and Class B units is furnished with respect to (i) each director and director nominee, (ii) each executive officer named in the Summary Compensation Table on page 26, and (iii) all current directors and executive officers as a group.

	Beneficial Ownership of
	Class A Units			Class B Units
Name	Number⁽¹⁾	Percentage⁽¹⁾			Number⁽¹⁾	Percentage⁽¹⁾
Jeff H. Sternberger⁽²⁾	40,770	5.5	%		40,770	5.4	%
Jerry L. Bohn ⁽³⁾	35,867	4.9	%		31,617	4.2	%
Joe M. Morgan⁽⁴⁾	33,128	4.5	%		17,865	2.4	%
Rex W. McCloy⁽⁵⁾	16,085	2.2	%		13,085	1.7	%
Wayne L. Carpenter (6)	6,000	0.8	%		6,000	0.8	%
Mark R. Gardiner⁽⁷⁾	3,100	0.4	%		3,100	0.4	%
John M. Freund⁽⁸⁾	2,225	0.3	%		2,225	0.3	%
Stanley D. Linville	-	0.0	%		-	0.0	%
Scott J. Miller	-	0.0	%		-	0.0	%
Danielle D. Imel	-	0.0	%		-	0.0	%
Directors, Nominees, and Executive Officers as a group (10 persons)⁽⁹⁾	137,175	18.6	%		114,662	15.2	%

(1)	Represents the percentage of Class A unit s and the percentage of Class B units beneficially held by t he named party.
(2)	Includes i) 38,770 Class A and Class B units held by Midwest Feeders Inc., of which Mr. Sternberger is an owner and the General Manager, and
	ii) 2,000 Class A and Class B unit s held by CRI Feeders of Guymon, LLC of which Mr. Sternberger is a director.
(3)	Includes i) 35,867 Class A and 31,617 Class B units held by Pratt Feeders, LLC, of which Mr. Bohn is an owner and Board Member.
(4)	Includes 17,865 Class A and Class B units held by Mr. Morgan and 15,263 Class A units held by Poky Feeders, of which Mr. Morgan is the manager.
(5)	Includes 16,085 Class A units and 13,085 Class B units held by Rex McCloy Farms, Inc., of which Mr. McCloy is an owner.
(6)	Includes i) 6,000 Class A and Class B unit s held by the Carpenter Cattle Co. Inc., of which Mr. Carpenter is the owner.
(7)	Includes i) 3,000 Class A and Class B unit s held by the Mark Gardiner Revocable T rust, and ii) 100 Class A and Class B units held by
	Gardiner Angus Ranch, Inc., all of which Mr. Gardiner has sole voting power.
(8)	Includes 2,225 Class A and Class B units held by t he John Freund, over which Mr. Freund has sole voting power.
(9)	Reflects unit ownership by all seven directors, the nominees to the board, and the named executive officers of USPB.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Party Transactions

USPB’s board of directors has not adopted a formal policy or procedure that must be followed prior to any transaction, arrangement or relationship with a related person, as defined by SEC regulations (e.g., directors, executive officers, any 5 percent shareholder, or immediate family member of any of the foregoing).

USPB has adopted a corporate Code of Conduct that is enforced throughout all levels of management. It deals with conflicts of interest, among other things. The Code prohibits any conduct or activities that conflict with the interests of the Company, or that might influence or appear to influence our judgment or actions in performing our duties. The Code also requires directors and all levels of management to make full written disclosure of any activity that may present a conflict of interest and receive prior written approval from the Company. No waivers have been granted.

Our directors and all levels of management are required each year to respond to a questionnaire regarding their independence. The questionnaire also requires each director and all levels of management to identify if they or an immediate family member had been indebted to, or had been a participant in any material transactions with, the Company or any of its affiliates. The questionnaire requires disclosure of the name of related parties if such parties have an ownership or management control relationship with the Company sufficient to exert significant influence over the Company’s management or operating policies which could cause significantly different operating results or financial position of the Company.

The standards applied pursuant to the above-described procedures are to provide comfort that any conflict of interest or related party transaction is on an arms-length basis which is fair to the Company.

Directors who are Unitholders

USPB is not a listed company and as a result has chosen the NASDAQ independence listing standards to determine whether our directors are independent. The NASDAQ independence definitions provide that directors cannot be independent if they do not meet certain objective standards.

All of USPB’s directors hold units of the LLC and are also agricultural producers. By virtue of their unitholder status and ownership of Class A units, each of these individuals is obligated to deliver cattle to USPB. The amount and terms of the payments received by these individuals (or the entities they represent) for the delivery of cattle are made on exactly the same basis as those received by other unitholders and associates of USPB for the delivery of their cattle. Based on the NASDAQ’s standards and as a result of their equal treatment with respect to the delivery of cattle, the following current directors were determined to be independent: Messrs. Bohn, Carpenter, Freund, Gardiner, McCloy, Morgan, and Sternberger.

Certain Arrangements with Holders of NBP’s Membership Interests

Simultaneous with the closing of the Leucadia Transaction, all of the holders of NBP’s membership interests entered into a limited liability company agreement that provides for, among other things, election of its board of managers, the powers of its board of managers and its officers, approval rights for certain of its equity holders, restrictions and rights related to the transfer, sale or purchase of its membership interests, and preemptive and repurchase rights.

Transactions with NBP

On December 30, 2011, USPB entered into a new Cattle Purchase and Sale Agreement with NBP. Per the terms and conditions of the Agreement, NBP shall purchase through USPB from its members, and USPB shall cause to be sold and delivered from its members to NBP, on an annual basis, a base amount of 735,385 (subject to adjustment) head of cattle per year. In fiscal years 2018, 2017, and 2016, USPB and NBP agreed to increase the number of cattle that USPB’s members could deliver during USPB’s delivery year by up to 10%. During fiscal years 2018, 2017, and 2016, USPB’s members and associates provided approximately 25%, 24%, and 27%, respectively, of NBP’s total cattle requirements. The purchase price for the cattle is determined by pricing grids, which shall at all times be no less favorable than any other pricing grid being utilized by NBP and the pricing grid shall be competitive with NBP’s major competitors for the purchase of cattle. NBP believes the pricing grids are based on terms that could be obtained from an unaffiliated party. The cattle supply agreement extends through December 30, 2022, with automatic one year extensions on each December 30, unless either party provides a notice not to extend sixty days prior to the annual anniversary date. NBP also purchased additional cattle from certain USPB unitholders and associates outside of the cattle supply agreement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

PricewaterhouseCoopers, an independent registered public accounting firm, served as our auditors for the review of the quarterly report on Form 10-Q for the period ended March 25, 2017. Deloitte and Touche LLP, an independent registered public accounting firm, was engaged in April 2017 and served as our auditors for the review of the quarterly report on Form 10-Q for the periods ended June 24, 2017 and September 30, 2017, as our auditor for the fiscal year ended December 30, 2017, and for the review of the quarterly report on Form 10-Q for the period ended March 31, 2018. Grant Thornton LLP an independent registered public accounting firm, was engaged in June 2018 and served as our auditors for the review of the quarterly report on Form 10-Q for the periods ended June 30, 2018 and September 29, 2018, and as our auditor for the fiscal year ended December 29, 2018 (thousands of dollars).

	December 29, 2018		December 30, 2017
Audit Fees	$	149	$	115
Audit Related Fees		33		-
Tax Fees ⁽¹⁾		273		237
All Other Fees		-		-
Total	$	455	$	352


¹⁾ - Tax fees relate to tax compliance work performed by PricewaterhouseCoopers

Audit Fees

Audit fees relate to the audits of our financial statements on Form 10-K and the reviews of quarterly reports on Form 10-Q.

Audit-Related Fees

Audit-related fees relate to consultations on accounting related matters. We did not pay any other type of fee and did not receive any other services.

Tax Fees

Tax fees relate to tax compliance, tax advice and tax planning services.

All Other Fees

We did not pay any other type of fee and did not receive any other services.

Our Audit Committee appoints our independent auditors. The Audit Committee is solely and directly responsible for the approval of the appointment, re-appointment, compensation and oversight of our independent auditors. The Audit Committee approves in advance all work to be performed by the independent auditors.

PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Financial Statements and Financial Statement Schedules

(1)	The financial statements filed as part of this report at Item 8 are listed in the Index to the Financial Statements on page F-1 contained herein.

(b) The following documents are filed or incorporated by reference as exhibits to this report:

2.1	Agreement and Plan of Merger between U.S. Premium Beef, Ltd. and U.S. Premium Beef, Inc. (incorporated herein by reference to Appendix A to voting materials-prospectus contained in U.S. Premium Beef, Inc. Registration Statement on Form S-4 (File No. 333-115164) filed with the SEC on August 5, 2004).

2.2	Plan of Conversion adopted by U.S. Premium Beef, Inc. (incorporated herein by reference to Appendix B to the voting materials – prospectus contained in U.S. Premium Beef, Inc. Registration Statement on Form S-4 (File No. 333-115164) filed with the SEC on August 5, 2004).

3.1	Certificate of Formation of U.S. Premium Beef, LLC (incorporated herein by reference to Appendix C to the voting materials – prospectus contained in U.S. Premium Beef, Inc. Registration Statement on Form S-4 (File No. 333-115164) filed with the SEC on August 5, 2004).

3.2(a)	Limited Liability Agreement of U.S. Premium Beef, LLC (incorporated herein by reference to Appendix D to the voting materials – prospectus contained in U.S. Premium Beef, Inc. Registration Statement on Form S-4 (File No. 333-115164) filed with the SEC on August 5, 2004).

3.2(b)	Amended and Restated Limited Liability Company Agreement of U.S. Premium Beef, LLC, dated as of March 2, 2011 (incorporated herein by reference to Exhibit 3.1 to Form 8-K (File No. 333-115164) filed with the SEC on March 7, 2011).

3.2(c)	Amended and Restated Limited Liability Company Agreement of U.S. Premium Beef, LLC, dated as of January 17, 2012 (incorporated herein by reference to Exhibit 3 to Form 8-K (File No. 333-115164) filed with the SEC on January 18, 2012).

3.3	Limited Liability Company Agreement of National Beef Packing Company, LLC, dated as of February 28, 2019.

10.2	Cattle Purchase and Sale Agreement dated December 30, 2011 between the Company and National Beef Packing Company, LLC (incorporated herein by reference to Exhibit 10.2 to Company’s Current Report on Form 8-K (File No. 333-115164) filed with the SEC on December 30, 2011).

10.3(b)	Form of Uniform Cattle Delivery and Marketing Agreement – Odd Slots (incorporated by reference to Exhibit 10.3(b) to Form 10-K (File No. 333-115164) filed with the Commission on November 14, 2007).

10.4(b)*	U.S. Premium Beef, LLC Phantom Unit Bonus Compensation Policy adopted September 28, 2010 (incorporated herein by reference to Exhibit 10.01 to Form 8-K (File No. 333-115164) filed with the SEC on October 4, 2010).

10.5(a)	Master Loan Agreement between U.S. Premium Beef, LLC and CoBank, ACB, executed July 28, 2011 (incorporated herein by reference to Exhibit 10.1 to Form 8-K (File No. 333-115164) filed with the SEC on August 1, 2011).

10.5(b)	Revolving Term Loan Supplement between U.S. Premium Beef, LLC and CoBank, ACB, executed July 28, 2011 (incorporated herein by reference to Exhibit 10.2 to Form 8-K (File No. 333-115164) filed with the SEC on August 1, 2011).
35

10.5(c)	Pledge Agreement between U.S. Premium Beef, LLC and CoBank, ACB, executed July 28, 2011 (incorporated herein by reference to Exhibit 10.1 to Form 8-K (File No. 333-115164) filed with the SEC on August 1, 2011).

10.5(d)	Security Agreement between U.S. Premium Beef, LLC and CoBank, ACB, executed July 28, 2011 (incorporated herein by reference to Exhibit 10.4 to Form 8-K (File No. 333-115164) filed with the SEC on August 1, 2011).

10.5(e)	Pledge Agreement dated December 30, 2011 between the Company and National Beef Packing Company, LLC, with attached Consent and First Amendment to Pledge Agreement and Security Agreement dated December 30, 2011 between the Company and CoBank, ACB (incorporated herein by reference to Exhibit 10.3 to Company’s Current Report on Form 8-K (File No. 333-115164) filed with the SEC on December 30, 2011).

10.5(f)	Revolving Term Loan Supplement between U.S. Premium Beef, LLC and CoBank, ACB, executed May 29, 2014 (incorporated herein by reference to Exhibit 10.1 to Form 8-K (File No. 333-115164) filed with the SEC on June 3, 2014).

10.5(g)	Amended and Restated Revolving Term Supplement between U.S. Premium Beef, LLC and CoBank, ACB, executed June 13, 2017 incorporated herein by reference to Exhibit 10.1 to Form 8-K (File No. 333-115164) filed with the SEC on June 15, 2017).

10.6(a)*	CEO Employment Agreement by and between Steven D. Hunt and U.S. Premium Beef, LLC dated July 10, 2009 (incorporated by reference to Exhibit 10.4 to Form 10-Q (File No. 333-115164) filed with the SEC on July 10, 2009).

10.6(b)*	First Amendment to CEO Employment Agreement by and between Steven D. Hunt and U.S. Premium Beef, LLC adopted September 28, 2010 (incorporated herein by reference to Exhibit 10.02 to Form 8-K (File No. 333-115164) filed with the SEC on October 4, 2010).

10.6(c)*	Second Amendment to CEO Employment Agreement between U.S. Premium Beef, LLC and Steven D. Hunt (incorporated herein by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K (File No. 333-115164) filed with the SEC on December 6, 2011).

10.6(d)*	Third Amendment to CEO Employment Agreement between U.S. Premium Beef, LLC and Steven D. Hunt (incorporated by reference to Exhibit 10.6(d) to Form 10-KT (File No. 333-115164) filed with the SEC on May 24, 2012).

10.6(e)*	CEO Employment Agreement between U.S. Premium Beef, LLC and Stanley D. Linville, executed on November 23, 2012 and effective as of January 28, 2013 (incorporated herein by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K (File No. 333-115164) filed with the SEC on December 3, 2012).

10.6(f)*	CEO Employment Agreement between U.S. Premium Beef, LLC and Stanley D. Linville, executed on December 21, 2015 and effective as of January 1, 2016 (incorporated herein by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K (File No. 333-115164) filed with the SEC on December 23, 2015).

10.6(g)*	Amended CEO Employment Agreement between U.S. Premium Beef, LLC and Stanley D. Linville, executed on December 14, 2018 and effective as of December 30, 2018 (incorporated herein by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K (File No. 333-115164) filed with the SEC on December 14, 2018).

10.7	Escrow Agreement dated December 30, 2011 between and among the Company, Leucadia National Corporation, NBPCo Holdings, LLC, and Marshall & Ilsley Trust Company, N.A. (incorporated herein by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K (File No. 333-115164) filed with the SEC on December 30, 2011).

10.8	Proxy Statement regarding proposed transaction sent by U.S. Premium Beef, LLC to it members on or about December 5, 2011(incorporated herein by reference to Exhibit 20.1 to Company’s Current Report on Form 8-K (File No. 333-111407) filed with the SEC on December 6, 2011).

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 Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
36
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 Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

101.INS	XBRL Instance Document **
101.SCH	XBRL Taxonomy Extension Schema Document **
101.CAL	XBRL Taxonomy Extension Calculation Linkbase **
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document **
101.LAB	XBRL Taxonomy Extension Label Linkbase Document **
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document **

_____________

* Management contract or compensatory plan or arrangement.

** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

U.S. Premium Beef, LLC

/s/ Stanley D. Linville

Name: Stanley D. Linville

Chief Executive Officer

(Principal Executive Officer)

Date: March 13, 2019

* * * *

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacity and on the dates indicated.

Signature	Title	Date


/s/ Stanley D. Linville
	Chief Executive Officer
Stanley D. Linville	(Principal Executive Officer)	March 13, 2019

/s/ Scott J. Miller
	Chief Financial Officer
Scott J. Miller	(Principal Financial and Accounting Officer)	March 13, 2019

/s/ Mark R. Gardiner
	Chairman of the Board
Mark R. Gardiner		March 13, 2019

/s/ Joe M. Morgan
	Vice Chairman of the Board
Joe M. Morgan		March 13, 2019

/s/ Jerry L. Bohn
	Secretary
Jerry L. Bohn		March 13, 2019

/s/ Wayne L. Carpenter
	Director
Wayne L. Carpenter		March 13, 2019

/s/ John M. Freund
	Director
John M. Freund		March 13, 2019

/s/ Rex W. McCloy
	Director
Rex W. McCloy		March 13, 2019

/s/ Jeff H. Sternberger
	Director
Jeff H. Sternberger		March 13, 2019

U.S. PREMIUM BEEF, LLC

INDEX TO FINANCIAL STATEMENTS

	Page

Audited Financial Statements:

Report of Independent Registered Public Accounting Firm – Grant Thornton LLP	F-2

Report of Independent Registered Public Accounting Firm – Deloitte & Touche LLP	F-3

Report of Independent Registered Public Accounting Firm – PricewaterhouseCoopers, LLP	F-4

Balance Sheets at December 29, 2018 and December 30, 2017	F-5

Statements of Operations for the years ended December 29, 2018, December 30, 2017, and December 31, 2016	F-6

Statements of Capital Shares and Equities for the years ended December 29, 2018, December30, 2017, and December 31, 2016	F-6

Statements of Cash Flows for the years ended December 29, 2018, December 30, 2017, and December 31, 2016	F-7

Notes to Financial Statements	F-8

National Beef Packing Company, LLC Consolidated Balance Sheets at December 29, 2018 and December 30, 2017 and Consolidated Statements of Operations, Comprehensive (Loss) Income, Cash Flows and Members’ Capital for years ended December 29, 2018, December 30, 2017, and December 31, 2016 and Notes to Consolidated Financial Statements	F-14

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Members of U.S. Premium Beef, LLC:

Opinion on the financial statements

We have audited the accompanying balance sheet of U.S. Premium Beef, LLC (a Delaware limited liability company) (the “Company”) as of December 29, 2018, the related statements of operations, capital shares and equities, and cash flows for the year ended December 29, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 29, 2018, and the results of its operations and its cash flows for the year ended December 29, 2018 in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2018.

Kansas City, Missouri

March 13, 2019

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Members of U.S. Premium Beef, LLC:

Opinion on the Financial Statements

We have audited the accompanying balance sheet of U.S. Premium Beef, LLC (the "Company") as of December 30, 2017, the related statements of operations, capital shares and equities, and cash flows for the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 30, 2017, and the results of its operations and its cash flows for the period then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

/s/Deloitte & Touche, LLP
Kansas City, Missouri

March 14, 2018

We began serving as the Company’s auditor in 2017. In 2018, we became the predecessor auditor.

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Owners U.S. Premium Beef, LLC:

In our opinion, the accompanying statements of operations, capital shares and equities and cash flows present fairly, in all material respects, the results of U.S. Premium Beef, LLC’s operations and its cash flows for the year ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
Kansas City, Missouri
March 9, 2017

F-4

U.S. PREMIUM BEEF, LLC
Balance Sheets
(thousands of dollars, except unit information)

Assets	December 29, 2018		December 30, 2017

Current assets:
Cash and cash equivalents	$	88,411	$	119,074
Due from affiliates		21		137
Other current assets		27		35
Total current assets		88,459		119,246
Property, plant, and equipment, at cost		200		223
Less accumulated depreciation		183		201
Net property, plant, and equipment		17		22
Investment in National Beef Packing Company, LLC		143,361		140,030
Other assets		69		103
Total assets	$	231,906	$	259,401

Liabilities and Capital Shares and Equities
Current liabilities:
Accounts payable - trade	$	12	$	58
Due to affiliates		44		388
Accrued compensation and benefits		2,158		2,250
Other accrued expenses and liabilities		515		284
Distributions payable		5,687		28,328
Total current liabilities		8,416		31,308
Long-term liabilities:
Other liabilities		3,734		3,946
Total long-term liabilities		3,734		3,946
Total liabilities		12,150		35,254

Commitments and contingencies		-		-

Capital shares and equities:
Members' contributed capital, 735,385 Class A units and 755,385 Class B units
authorized, issued and outstanding		219,756		224,147
Total capital shares and equities		219,756		224,147
Total liabilities and capital shares and equities	$	231,906	$	259,401

See accompanying notes to financial statements.

F-5

U.S. PREMIUM BEEF, LLC
Statements of Operations
(thousands of dollars, except unit and per unit data)

	52 weeks ended			52 weeks ended			53 weeks ended
	December 29, 2018			December 30, 2017			December 31, 2016

Net sales	$	-		$	-		$	-
Costs and expenses:
Cost of sales		-			-			-
Selling, general, and administrative expenses		4,476			4,008			3,621
Depreciation and amortization		12			13			13
Total costs and expenses		4,488			4,021			3,634
Operating loss		(4,488	)		(4,021	)		(3,634	)
Other income (expense):
Interest income		1,073			321			48
Interest expense		(15	)		(13	)		(13	)
Equity in income of National Beef Packing Company, LLC		89,610			61,056			49,267
Other, net		408			138			700
Total other income		91,076			61,502			50,002
Net income	$	86,588		$	57,481		$	46,368

Income per unit:
Basic and diluted
Class A units	$	11.77		$	7.82		$	6.31
Class B units	$	103.16		$	68.49		$	55.24

Outstanding weighted-average Class A and Class B units:
Basic and diluted
Class A units		735,385			735,385			735,385
Class B units		755,385			755,385			755,385

See accompanying notes to financial statements.

U.S. PREMIUM BEEF, LLC Statements of Capital Shares and Equities (thousands of dollars)
	Members'
	capital
Balance at December 26, 2015	$	211,770
Net income for the year ended December 31, 2016		46,368
Member distribution		(36,943	)
Balance at December 31, 2016	$	221,195
Net income for the year ended December 30, 2017		57,481
Member distributions		(54,529	)
Balance at December 30, 2017	$	224,147
Net income for the year ended December 29, 2018		86,588
Member distributions		(90,979	)
Balance at December 29, 2018	$	219,756
See accompanying notes to financial statements.

F-6

U.S. PREMIUM BEEF, LLC
Statements of Cash Flows
(thousands of dollars)

	52 weeks ended			52 weeks ended			53 weeks ended
	December 29, 2018			December 30, 2017			December 31, 2016

Cash flows from operating activities:
Net income	$	86,588		$	57,481		$	46,368
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization		12			13			13
Equity in net income of National Beef Packing Company, LLC		(89,610	)		(61,056	)		(49,267	)
Distributions from National Beef Packing Company, LLC		68,023			33,531			10,923
Changes in assets and liabilities:
Due from affiliates		116			(89	)		89
Other assets		42			34			32
Accounts payable		(46	)		(8	)		52
Due to affiliates		(344	)		351			37
Accrued compensation and benefits		(304	)		33			(21	)
Other accrued expenses and liabilities		231			31			74
Net cash provided by operating activities		64,708			30,321			8,300
Cash flows from investing activities:
Capital expenditures, including interest capitalized		(7	)		-			-
Distributions from National Beef Packing Company, LLC		18,256			30,942			27,525
Net cash provided by investing activities		18,249			30,942			27,525
Cash flows from financing activities:
Member distributions		(113,620	)		(27,419	)		(35,815	)
Net cash used in financing activities		(113,620	)		(27,419	)		(35,815	)
Net (decrease) increase in cash		(30,663	)		33,844			10
Cash and cash equivalents at beginning of period		119,074			85,230			85,220
Cash and cash equivalents at end of period	$	88,411		$	119,074		$	85,230
Supplemental cash disclosures:
Cash paid during the period for interest	$	13		$	13		$	13
Supplemental noncash disclosures of financing activities:
Distributions payable	$	5,867		$	-		$	-

See accompanying notes to financial statements.

F-7

U.S. Premium Beef, LLC
Notes to Financial Statements

NOTE 1. Description of Business

On August 18, 2004, the shareholders of U.S. Premium Beef, Ltd. approved the conversion of the cooperative into a Delaware LLC.

As a result of the sale to Leucadia, USPB’s investment in NBP will be accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control.

Ownership Structure

As USPB is structured as a Limited Liability Company, its members are not personally liable for liabilities of USPB. USPB’s members are taxed on their proportionate share of USPB’s taxable income.

Class A Units. There are 735,385 Class A units outstanding. Class A unitholders are allocated 10% of the Company’s profits and losses. Holders of USPB Class A units, committed under Uniform Cattle Delivery and Marketing Agreements, have the right and obligation to deliver one head of cattle to USPB annually for each unit held.

Class B Units. There are 755,385 Class B units outstanding. Class B unitholders are allocated 90% of the Company’s profits and losses. Holders of USPB Class B units have no cattle delivery commitment.

NOTE 2. Basis of Presentation and Accounting Policies

Basis of Presentation

USPB’s investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control.

Fiscal Year

The Company’s fiscal year ends on the last Saturday in December. The Company files annual reports for each 52 week or 53 week period ended on the last Saturday in December.

Use of Estimates

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments.

F-8

U.S. Premium Beef, LLC
Notes to Financial Statements

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Investment in National Beef Packing Company, LLC

USPB’s 15.0729% investment in NBP accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control.

For fiscal years 2018 and 2017, USPB conducted an evaluation to determine if its investment in NBP was impaired as of the end of the fiscal year in accordance with Auditing Standards Codification (ASC) 323 Investments Equity Method and Joint Ventures. The evaluation included both quantitative and qualitative factors. The quantitative approach computed the fair value of the investment using a market based approach, and resulted in a fair value that exceeded the carrying value. As a result of the analysis, USPB concluded that the carrying value of its investment in NBP was not impaired as of December 29, 2018 and December 30, 2017.

USPB presents the distributions received from its equity method investee within the Statement of Cash Flows in accordance with ASU 2016-15-Statement of Cash Flows (Topic 230); Classification of Certain Cash Receipts and Cash Payments, under the cumulative earnings approach.

Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost. Property, plant, and equipment are depreciated principally on a straight-line basis over the estimated useful life (based upon original acquisition date) of the individual asset by major asset class as follows:

Machinery and equipment	2 to 15 years
Furniture and fixtures	3 to 5 years
Trailers and automotive equipment	2 to 4 years

Upon disposition of these assets, any resulting gain or loss is included in other, net. Normal repairs and maintenance costs are charged to Selling, general and administrative expenses, as incurred.

A summary of cost and accumulated depreciation for property, plant, and equipment as of December 29, 2018 and December 30, 2017 follows (thousands of dollars):

	December 29, 2018		December 30, 2017
Machinery and equipment	$	24	$	24
Furniture and fixtures		147		140
Trailers and automotive equipment		29		59
Total property, plant, and equipment, at cost		200		223
Accumulated depreciation		183		201
Property, plant, and equipment, net	$	17	$	22

Depreciation expense was immaterial for fiscal years ended December 29, 2018 and December 30, 2017.

New Accounting Standard

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases. The new standard requires the recognition of all leases that are longer than one year on the balance sheet, which will result in the recognition of a right-of-use asset and a corresponding lease liability. The right-of-use asset and lease liability will be measured initially using the present value of the remaining lease payments. The new standard is effective for annual and interim periods beginning after December 15, 2018. The new guidance will not have a material impact on our financial statements.

In terms of practical expedients, USPB accepts:

Its original determination of whether a contract contained a lease.
That a subsequent review of existing contracts is not necessary.

F-9

U.S. Premium Beef, LLC
Notes to Financial Statements

That USPB does not have to reassess the initial direct costs assigned to leases under previous leasing guidance as USPB did not occur any initial direct costs for the leases subject to previous leasing guidance.

Distributions Payable

USPB utilizes a controlled disbursement account to fund cash distribution checks presented for payment by the holder. Checks issued that have not cleared are included in distributions payable and the change in the related balances are reflected in financing activities on the statement of cash flows. Distributions payable totaled $5.7 million and $28.3 million as of December 29, 2018 and December 30, 2017, respectively.

Income Taxes

Effective August 29, 2004, the Company converted to an LLC, and under this structure, taxes are not provided at the Company level because the results of operations are included in the taxable income of the individual members.

Selling, General, and Administrative

Selling expenses consist primarily of salaries, bonuses, phantom unit option expense, trade promotions, advertising, commissions and other marketing costs. General and administrative costs consist primarily of general management, insurance and professional expenses.

Noncompetition Payments

The former CEO’s employment agreement provided for him to receive noncompetition payments in connection with the Leucadia Transaction. During fiscal years 2018 and 2017, the former CEO was paid $844,938 and $853,263, respectively, in noncompetition payments. He will continue to receive noncompetition payments of approximately $845,000 per year during calendar years 2019 through 2021.

The current CEO’s employment agreement provides for him to receive noncompetition payments for a twelve month period following his termination of employment with USPB.

As of December 29, 2018 and December 30, 2017, the Company had accrued $2.7 million and $3.4 million, respectively, for the noncompetition agreements. The current and long-term portion of the accrued amounts are included in Accrued compensation and benefits and Other liabilities, respectively, on the balance sheet.

Business Segments

USPB is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, USPB has one reportable segment.

Earnings Per Unit

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

Basic EPU excludes dilution and is computed by first allocating 10% of net income or loss attributable to USPB to Class A units and the remaining 90% is allocated to Class B units. Net income or loss allocated to the Class A and Class B units is then divided by the weighted-average number of Class A and Class B units outstanding for the period to determine the basic EPU for each respective class of unit.

Diluted EPU reflects the potential dilution that could occur to the extent that any outstanding dilutive Class A or Class B units were exercised. There are no potentially dilutive Class A or Class B units outstanding.

F-10

U.S. Premium Beef, LLC
Notes to Financial Statements

Income Per Unit Calculation	52 weeks ended		52 weeks ended		53 weeks ended
(thousands of dollars, except unit and per unit data)	December 29, 2018		December 30, 2017		December 31, 2016

Basic and diluted earnings per unit:
Income attributable to USPB available to
unitholders (numerator)
Class A	$	8,659	$	5,748	$	4,637
Class B	$	77,929	$	51,733	$	41,731

Weighted average outstanding units (denominator)
Class A		735,385		735,385		735,385
Class B		755,385		755,385		755,385

Per unit amount
Class A	$	11.77	$	7.82	$	6.31
Class B	$	103.16	$	68.49	$	55.24

NOTE 3. Long-Term Debt and Loan Agreements

(a) Master Loan Agreement

On December 30, 2011, in connection with the closing of the transaction with Leucadia, the Company and CoBank entered into the Consent and First Amendment to Pledge Agreement and Security Agreement, by which CoBank agreed to (i) consent to the Membership Interest Sale and the PA Distribution, (ii) release its security interest in, and liens on, the Membership Interests being sold pursuant to the Membership Interest Sale, (iii) consent to the NBP Pledge and (iv) consent to the amendments and restatements of the NBP Operating Agreement and the PA Newco Operating Agreement. The NBP Pledge grants NBP a perfected security interest in and to USPB’s membership interests in, and distributions from, NBP, subject only to the prior first priority security interest held by CoBank.

The Company was in compliance with the Master Loan Agreement’s Net Worth covenant as of December 29, 2018.

(b) Capital and Operating Leases

USPB leases its office space in Kansas City, Missouri and Dodge City Kansas. Lease expense associated with operating leases was $0.1 million for fiscal years 2018, 2017, and 2016. USPB expects that it will renew lease agreements or enter into new leases as the existing leases expire.

NOTE 4. Employee Options and Benefit Plans

In September 2010, USPB’s Board of Directors approved a management phantom unit plan. The phantom unit plan provides for the award of unit appreciation rights to management employees of USPB. USPB’s CEO administers the phantom unit plan and awards “Phantom Units” (Class A and Class B Units) to employees in amounts determined by the CEO, subject to the total Phantom Unit amount approved by the Board of Directors of USPB. A total of 5,000 Class A phantom units and 5,000 Class B phantom units were awarded to management employees, with a strike price of $118 and $157, respectively. The closing of the Leucadia Transaction resulted in management employees receiving a payment under the management phantom unit plan. As a result of that payment, the strike price for both the Class A phantom units and Class B phantom units was satisfied and is now $0. As a result of the retirement of one of USPB’s employees on December 31, 2014, 50 Class A phantom units and 50 Class B phantom units were forfeited as they were not vested. One third of the retiring employee’s vested phantom units will be exercised and the appreciation rights paid in three tranches (retirement, and first and second anniversary of retirement). At the end of fiscal year 2018, 4,750 Class A phantom units and 4,750 Class B phantom units remain outstanding. The phantom units became fully vested in August 2015. For the management phantom unit plan, compensation expense of $0.6 million, $0.3 million, and $0.2 million was recognized in fiscal years 2018, 2017, and 2016, respectively.

F-11

U.S. Premium Beef, LLC
Notes to Financial Statements

On November 16, 2012, USPB’s Board of Directors approved the issuance of an additional 1,500 Class A phantom units, with a strike price of $66.04 and 1,500 Class B phantom units, with a strike price of $73.70, to certain members of management, to be effective on January 28, 2013. The phantom units became fully vested in January 2018. Compensation expense of $0.2 million, $0.1 million and $0.0 million was recognized in fiscal years 2018, 2017, and 2016, respectively.

The Company maintains a tax-qualified employee savings and retirement plan (401(k) Plan) covering the Company’s non-union employees. Pursuant to the 401(k) Plan, eligible employees may elect to reduce their current compensation by up to the lesser of 75% of their annual compensation or the statutorily prescribed annual limit and have the amount of such reduction contributed to the 401(k) Plan. The 401(k) Plan provides for additional matching contributions by the Company, based on specific terms contained in the 401(k) Plan. The trustee of the 401(k) Plan, at the direction of each participant, invests the assets of the 401(k) Plan in designated investment options. The 401(k) Plan is intended to qualify under Section 401 of the Internal Revenue Code. Expenses related to the 401(k) Plan totaled approximately $0.1 million, $0.1 million, and $0.0 million for fiscal years 2018, 2017, and 2016, respectively.

NOTE 5. Other Income

Other non-operating income, net was $0.4 million, $0.1 million, and $0.7 million, for fiscal years 2018, 2017, and 2016, respectively. Other non-operating income primarily includes income related to lease income on additional delivery rights made available by the Company.

NOTE 6. Income Taxes

USPB is structured as an LLC and is taxed as a partnership for federal income tax purposes. As a result, its taxable income/loss are passed through to the unitholders at the end of each tax year. Certain states assess an entity level tax, which is paid by USPB. Such taxes are generally immaterial, and the current provision in tax years 2018, 2017, and 2016 was $0.0 million.

NOTE 7. Related Party Transactions

All of the Company’s directors hold Class A units of the Company. By virtue of their ownership of the units, each of these individuals is obligated to deliver cattle to the Company. The amount and terms of the payments received by these individuals (or the entities they represent) for the delivery of cattle are made on exactly the same basis as those received by other unitholders of the Company for the delivery of their cattle.

On December 30, 2011, USPB entered into a new Cattle Purchase and Sale Agreement with NBP. Per the terms and conditions of the Agreement, NBP is required to purchase through USPB from its members, and USPB is required to cause to be sold and delivered from its members to NBP, a base amount of 735,385 (subject to adjustment) head of cattle per year. The purchase price for the cattle is determined by pricing grids, which, at all times, are required to be no less favorable than any other pricing grid being utilized by NBP and the pricing grid shall be competitive with NBP’s major competitors for the purchase of cattle. NBP believes the pricing grids are based on terms that could be obtained from an unaffiliated party. The cattle supply agreement extends through December 30, 2022, with automatic, but optional one year extensions on each December 30, unless either party provides a notice not to extend sixty days prior to the annual anniversary date. Neither party provided sixty day notice prior to December 29, 2018, the current year annual anniversary date. NBP also purchased additional cattle from certain USPB members and associates outside of the cattle supply agreement.

F-12

U.S. Premium Beef, LLC
Notes to Financial Statements

USPB facilitates the delivery of cattle owned by its unitholders and associates to NBP. During fiscal years 2018, 2017, and 2016, USPB’s members and associates provided approximately 25%, 24%, and 27%, respectively, of NBP’s total cattle requirements.

At December 29, 2018 and December 30, 2017, the Company had receivables from unitholders and associates in the amount of $0.0 million and $0.1 million, respectively.

At December 29, 2018 and December 30, 2017, the Company had payables to unitholders and associates in the amount of $5.7 million and $28.7 million, respectively.

NOTE 8. Legal Proceedings

As of December 29, 2018, USPB was not a party to any lawsuit or claim arising out of the operation of its business.

NOTE 9. Quarterly Results (Unaudited)

Selected quarterly financial data for fiscal years 2018 and 2017 are set forth below (dollars in thousands, except per unit data):

			Operating			Net		Basic and Diluted Earnings Per
	Net Sales		Loss			Income		Class A Unit		Class B Unit
2018 quarterly results:
March 31, 2018	$	-	$	(1,445	)	$	9,201	$	1.25	$	10.96
June 30, 2018		-		(1,092	)		27,788	$	3.78	$	33.11
September 29, 2018		-		(816	)		28,928	$	3.93	$	34.47
December 29, 2018		-		(1,135	)		20,671	$	2.81	$	24.63
	$	-	$	(4,488	)	$	86,588

2017 quarterly results:
March 25, 2017	$	-	$	(1,067	)	$	7,576	$	1.03	$	9.03
June 24, 2017		-		(840	)		10,954	$	1.49	$	13.05
September 30, 2017		-		(862	)		25,501	$	3.47	$	30.38
December 30, 2017		-		(1,252	)		13,450	$	1.83	$	16.02
	$	-	$	(4,021	)	$	57,481

NOTE 10. Subsequent Events

On March 11, 2019, USPB and the other members of NBP entered into an agreement to acquire 100% of the ownership interests in Iowa Premium, LLC. USPB' s proportionate share of the Purchase Price is approximately $22.6 million, which will be funded by a distribution by NBP to USPB. Once the purchase of Iowa Premium, LLC is closed, USPB and the other members of NBP will subsequently transfer their respective ownership interests in Iowa Premium, LLC to NBP in the form of a capital contribution. Closing the transaction is subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

USPB evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through March 13, 2019, the date the financial statements were available for issuance.

F-13

NATIONAL BEEF PACKING COMPANY, LLC

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page


Audited Consolidated Financial Statements:


Independent Auditors’ Report – Grant Thornton, LLP	F-15

Independent Auditors’ Report – Deloitte & Touche, LLP	F-16

Independent Auditors’ Report – PricewaterhouseCoopers, LLP	F-17

Consolidated Balance Sheet at December 29, 2018 and December 30, 2017	F-18

Consolidated Statements of Operations for the years ended December 29, 2018 and December 30, 2017, and December 31, 2016	F-19

Consolidated Statements of Comprehensive Income (Loss) for the year ended December 29, 2018 and December 30, 2017, and December 31, 2016	F-19

Consolidated Statements of Members’ Capital for the year ended December 29, 2018 and December 30, 2017, and December 31, 2016	F-19

Consolidated Statements of Cash Flows for the years December 29, 2018 and December 30, 2017, and December 31, 2016	F-20

Notes to Consolidated Financial Statements	F-21

F-14

INDEPENDENT AUDITORS’ REPORT

Board of Managers and Members
National Beef Packing Company, LLC:

We have audited the accompanying consolidated financial statements of National Beef Packing Company, LLC, (a Delaware limited liability company) and subsidiaries, which comprise the consolidated balance sheet as of December 29, 2018, and the related consolidated statements of operations, comprehensive income, cash flows, and members’ capital, for the year then ended, and the related notes to the financial statements.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of National Beef Packing Company, LLC and subsidiaries as of December 29, 2018, and the results of their operations and their cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ Grant Thornton LLP
Kansas City, Missouri

March 13, 2019

F-15

INDEPENDENT AUDITORS’ REPORT

The Board of Managers and Members
National Beef Packing Company, LLC:

We have audited the accompanying consolidated financial statements of National Beef Packing Company, LLC and its subsidiaries (the "Company"), which comprise the consolidated balance sheet as of December 30, 2017, and the related consolidated statements of operations, comprehensive income (loss), members’ capital, and cash flows for the fiscal year then ended, and the related notes to the consolidated financial statements.

Management's Responsibility for the Consolidated Financial Statements

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of National Beef Packing Company, LLC and its subsidiaries as of December 30, 2017, and the results of their operations and their cash flows for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP
Kansas City, Missouri

March 14, 2018

We began serving as the Company’s auditor in 2017. In 2018, we became the predecessor auditor.

F-16

Report of Independent Auditors

The Board of Managers and Members
National Beef Packing Company, LLC:

We have audited the accompanying consolidated financial statements of National Beef Packing Company, LLC, and its subsidiaries, which comprise the consolidated statement of operations, cash flows, members’ capital, and comprehensive income (loss) for the year ended December 31, 2016.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the results of operations and cash flows of National Beef Packing Company, LLC and its subsidiaries for the year ended December 31, 2016 in accordance with accounting principles generally accepted in the United States of America.

/s/ PricewaterhouseCoopers LLP
Kansas City, Missouri

March 9, 2017, except as to the revision of the statement of cash flows described in Note 2, which is dated March 14, 2018.

F-17

National Beef Packing Company, LLC and Subsidiaries
Consolidated Balance Sheets
(thousands of dollars)

Assets	December 29, 2018			December 30, 2017
Current assets:
Cash and cash equivalents	$	46,746		$	18,516
Accounts receivable, less allowance for returns and doubtful accounts of $2,584
and $4,211, respectively		215,318			186,837
Due from affiliates		803			786
Other receivables		4,718			9,302
Inventories		246,687			261,302
Other current assets		19,577			15,537
Total current assets		533,849			492,280
Property, plant, and equipment, at cost
Land and improvements		26,920			20,378
Buildings and improvements		214,586			182,100
Machinery and equipment		428,298			360,974
Trailers and automotive equipment		2,544			2,626
Furniture and fixtures		12,854			12,052
Construction in progress		59,540			71,934
		744,742			650,064
Less accumulated depreciation		305,369			248,917
Net property, plant, and equipment		439,373			401,147
Goodwill		14,991			14,991
Other intangibles, net of accumulated amortization of $316,782 and $271,519, respectively		494,286			539,549
Other assets		19,581			13,792
Total assets	$	1,502,080		$	1,461,759
Liabilities and Members' Capital
Current liabilities:
Current installments of long-term debt	$	18,198		$	13,247
Cattle purchases payable		109,083			116,732
Accounts payable - trade		71,980			71,213
Due to affiliates		150			762
Accrued compensation and benefits		111,046			82,640
Accrued insurance		24,515			14,661
Other accrued expenses and liabilities		31,909			20,668
Total current liabilities		366,881			319,923
Long-term liabilities:
Long-term debt, excluding current installments		161,639			185,973
Other liabilities		22,273			26,655
Total long-term liabilities		183,912			212,628
Total liabilities		550,793			532,551
Commitments and contingencies
Members' capital
Members' capital		951,366			929,265
Accumulated other comprehensive loss		(79	)		(57	)
Total members' capital		951,287			929,208
Total liabilities and members' capital	$	1,502,080		$	1,461,759

See accompanying notes to consolidated financial statements.

F-18

National Beef Packing Company, LLC and Subsidiaries
Consolidated Statement of Operations
(thousands of dollars)

	52 weeks ended			52 weeks ended			53 weeks ended
	December 29, 2018			December 30, 2017			December 31, 2016

Net sales	$	7,487,272		$	7,353,662		$	7,021,902
Costs and expenses:
Cost of sales		6,701,222			6,764,057			6,513,767
Selling, general, and administrative		73,754			77,459			71,849
Depreciation and amortization		105,028			98,515			94,483
Total costs and expenses		6,880,004			6,940,031			6,680,099
Operating income		607,268			413,631			341,803
Other income (expense):
Interest income		314			339			166
Interest expense		(10,465	)		(6,658	)		(12,946	)
Total other expense		(10,151	)		(6,319	)		(12,780	)
Income before taxes		597,117			407,312			329,023
Income tax expense		2,607			2,238			2,166
Net income		594,510			405,074			326,857

See accompanying notes to consolidated financial statements.

National Beef Packing Company, LLC and Subsidiaries
Consolidated Statement of Comprehensive Income (Loss)
(thousands of dollars)

	52 weeks ended			52 weeks ended		53 weeks ended
	December 29, 2018			December 30, 2017		December 31, 2016

Net income	$	594,510		$	405,074	$	326,857
Other comprehensive income (loss):
Foreign currency translation adjustments		(22	)		80		(14	)
Comprehensive income		594,488			405,154		326,843


See accompanying notes to consolidated financial statements.

National Beef Packing Company, LLC
Consolidated Statement of Members' Capital
(thousands of dollars)

				Accumulated
				Other
	Members'			Comprehensive
	Capital			(Loss) Income			Total
Balance at December 26, 2015	$	880,155		$	(123	)	$	880,032
Net income		326,857			-			326,857
Member contributions		(255,082	)		-			(255,082	)
Foreign currency translation adjustments		-			(14	)		(14	)
Balance at December 31, 2016	$	951,930		$	(137	)	$	951,793
Net income		405,074			-			405,074
Member distributions		(427,739	)		-			(427,739	)
Foreign currency translation adjustments		-			80			80
Balance at December 30, 2017	$	929,265		$	(57	)	$	929,208
Net income		591,510			-			591,510
Member distributions		(572,409	)		-			(572,409	)
Foreign currency translation adjustments		-			(22	)		(22	)
Balance at December 29, 2018	$	948,366		$	(79	)	$	948,287


See accompanying notes to consolidated financial statements.

F-19

National Beef Packing Company, LLC and Subsidiaries
Consolidated Statement of Cash Flows
(thousands of dollars)

	52 weeks ended			52 weeks ended			53 weeks ended
	December 29, 2018			December 30, 2017			December 31, 2016

Cash flows from operating activities:
Net income	$	594,510		$	405,074		$	326,857
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization		105,028			98,515			94,483
Provision for dobutful accounts		9,575			9,416			9,910
Deferred income tax provision		248			823			217
(Gain) on disposal of property, plant, and equipment		(960	)		(1,144	)		(98	)
Amortization of debt issuance costs		722			766			692
Changes in assets and liabilities:		-
Accounts receivable		(38,056	)		(29,370	)		26,847
Due from affiliates		(17	)		132			(399	)
Other receivables		4,584			(2,787	)		2,432
Inventories		14,615			14,051			(40,018	)
Other assets		(9,829	)		(4,598	)		(10,466	)
Cattle purchases payable		(7,649	)		24,460			20,761
Accounts payable		(1,851	)		7,485			7,913
Due to affiliates		(612	)		(251	)		231
Accrued compensation and benefits		28,406			13,930			53,567
Accrued insurance		9,854			(10,381	)		(6,580	)
Other accrued expenses and liabilities		6,611			27,905			(2,491	)
Net cash provided by operating activities		715,179			554,026			483,858
Cash flows from investing activities:
Capital expenditures, including interest capitalized		(96,530	)		(70,446	)		(62,010	)
Proceeds from sale of property, plant, and equipment		2,122			2,791			16,788
Net cash used in investing activities		(94,408	)		(67,655	)		(45,222	)
Cash flows from financing activities:
Receipts under revolving credit lines		255,288			280,000			120,000
Payments under revolving credit lines		(290,288	)		(200,000	)		(241,961	)
Repayments of term note payable		-			(17,500	)		(35,000	)
Receipts under reducing revolving credit lines		300,000			197,500			-
Payments under reducing revolving credit lines		(285,000	)		(335,000	)		-
Net repayments of other indebtedness/capital leases		(105	)		(119	)		(6,688	)
Cash paid for financing costs		-			(2,769	)		-
Member distributions		(572,409	)		(427,739	)		(255,082	)
Net cash used in financing activities		(592,514	)		(505,627	)		(418,731	)
Effect of exchange rate changes on cash		(27	)		70			(16	)
Net increase (decrease) in cash		28,230			(19,186	)		19,889
Cash and cash equivalents at beginning of period		18,516			37,702			17,813
Cash and cash equivalents at end of period	$	46,746		$	18,516		$	37,702
Supplemental cash disclosures:
Cash paid during the period for interest	$	11,333		$	6,512		$	13,851
Cash paid during the period for taxes	$	1,906		$	792		$	1,094
Supplemental noncash disclosures of investing and financing activities:
Non-cash additions to property, plant and equipment	$	3,677		$	-		$	-
Assets acquired through capital lease	$	147		$	137		$	305


See accompanying notes to consolidated financial statements.

F-20

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

NOTE 1. DESCRIPTION OF BUSINESS

National Beef Packing Company, LLC (NBP) is a Delaware limited liability company. NBP and its subsidiaries sell meat products to customers in the food service, international, further processor and retail distribution channels. NBP also produces and sells by-products that are derived from its meat processing operations and variety meats to customers in various industries.

NBP operates beef slaughter and fabrication facilities in Liberal and Dodge City, Kansas, and consumer-ready beef and pork processing facilities in Hummels Wharf, Pennsylvania, Moultrie, Georgia, and Kansas City, Kansas. National Carriers, Inc., or National Carriers, a wholly-owned subsidiary located in Dallas, Texas, provides trucking services to NBP and third parties and National Elite Transportation, LLC, or National Elite, a wholly-owned subsidiary located in Springdale, Arkansas, provides third-party logistics services to the transportation industry. National Beef Leathers, LLC, or NBL, a wholly-owned subsidiary located in St. Joseph, Missouri, provides wet blue hide tanning services for NBP. Kansas City Steak

Company, LLC, or Kansas City Steak, includes a direct to consumer business and operates a warehouse and fulfilment facility in Kansas City, Kansas. As of December 29, 2018 and December 30, 2017, approximately 63% of our employees were represented by collective bargaining agreements. NBP makes certain contributions for the benefit of employees (see Note 6).

On June 5, 2018, Marfrig Global Foods S.A (Marfrig) acquired a 51% interest in NBP from certain existing members for aggregate net cash consideration of approximately $969.0 million.

NOTE 2. BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of NBP and its direct and indirect subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

The 2016 and 2015 statement of cash flows have been revised to present borrowings and repayments under the revolving line of credit on a gross basis. This change in presentation does not affect previously reported cash flows (used in) provided by financing activities in the Consolidated Statements of Cash Flows. This reclassification does not impact net income.

Accounting Changes

Except for the changes discussed below, NBP has consistently applied the accounting policies to all periods presented in the consolidated financial statements.

Effective December 31, 2017, the beginning of NBP’s 2018 fiscal year, NBP adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, "Revenue from Contracts with Customers" ("ASC 606"). NBP adopted this standard, using the cumulative effect adjustment, often referred to as modified retrospective approach. Under this method, NBP did not restate the prior financial statements presented. There was no cumulative effect to be recorded as an adjustment to the opening balance of retained earnings. The comparative information was not restated and continues to be presented under the accounting standards in effect for those periods. Additional information regarding revenue recognition is included in “Note 3. Revenue Recognition”.

Fiscal Year

NBP’s fiscal year consists of 52 or 53 weeks, ending on the last Saturday in December. Fiscal 2018 and 2017 were 52 week fiscal years while fiscal 2016 was a 53 week fiscal year. All references to years in these notes to consolidated financial statements represent fiscal years unless otherwise noted.

Use of Estimates

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of the contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments.

F-21

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

Cash and Cash Equivalents

NBP considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Allowance for Returns and Doubtful Accounts

The allowance for returns and doubtful accounts is NBP’s best estimate of the amount of probable returns and credit losses in NBP’s existing accounts receivable. NBP determines these allowances based on historical experience, customer conditions and management’s judgments. Management considers factors such as changes in the economy and industry. Specific accounts are reviewed individually for collectability.

The following table represents the rollforward of the allowance for returns and doubtful accounts for the fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016 (in thousands).

	Beginning								Ending
Period Ended	Balance			Provision			Charge Off		Balance

December 31, 2016	$	(5,429	)	$	(9,910	)	$	11,395	$	(3,944	)
December 30, 2017	$	(3,944	)	$	(9,416	)	$	9,149	$	(4,211	)
December 29, 2018	$	(4,211	)	$	(9,575	)	$	11,202	$	(2,584	)

Inventories

Inventories consist primarily of beef and beef by-products and supplies, and are stated at the lower of cost or net realizable value, with cost principally determined under the first-in-first-out method for beef products and average cost for supplies.

Inventories at December 29, 2018 and December 30, 2017 consisted of the following (in thousands):

	December 29, 2018		December 30, 2017
Dressed and boxed beef products	$	181,032	$	190,103
Beef by-products		35,789		42,256
Supplies and other		29,866		28,943
Total Inventory	$	246,687	$	261,302

Property, plant and equipment

Property, plant and equipment were recorded at fair value as of December 31, 2011 as a result of the Leucadia transaction. Property, plant and equipment purchased subsequent to the transaction are recorded at cost. Property, plant and equipment are depreciated principally on a straight-line basis over the estimated useful life of the individual asset by major asset class as follows:

Buildings and improvements	15 to 25 years
Machinery and equipment	2 to 15 years
Trailers and automotive equipment	2 to 4 years
Furniture and fixtures	3 to 5 years

Depreciation expense was $59.8 million, $53.3 million, and $49.2 million for the fiscal years ended December 29, 2018, December 30, 2017 and December 31, 2016 respectively.

Upon disposition of these assets, any resulting gain or loss is included in selling, general, and administrative. Major repairs and maintenance costs that extend the useful life of the related assets are capitalized. Normal repairs and maintenance costs are charged to operations as incurred.

NBP capitalizes the cost of interest on borrowed funds which are used to finance the construction of certain property, plant and equipment. Such capitalized interest costs are charged to the property, plant and equipment accounts and are amortized through depreciation charges over the estimated useful lives of the assets. Interest capitalized was $1.9 million, $1.0 million, and $0.5 million for the fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016, respectively.

F-22

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

NBP reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is assessed based on estimated undiscounted future cash flows. Impairment, if any, is recognized based on fair value of the assets. Assets to be disposed of are reported at the lower of cost or fair value less costs to sell, and are no longer depreciated. There were no events or circumstances which would indicate that the carrying amount of our property plant, and equipment may not be recoverable during 2018 or 2017.

Goodwill and Other Intangible Assets

ASC 350, Intangibles - Goodwill and Other, provides that goodwill shall not be amortized but shall be tested for impairment on an annual basis. Identifiable intangible assets with definite lives are amortized over their estimated useful lives. NBP evaluates goodwill annually for impairment at the end of December this test involves comparing the fair value of a reporting unit to the reporting unit’s book value to determine if any impairment exists. Fair values are based on valuation techniques NBP believes market participants would use, although the valuation process requires significant judgment and often involves the use of significant estimates and assumptions. NBP calculates the fair value of the reporting unit using estimates of future cash flows and other market comparable information deemed appropriate. The estimates and assumptions used in determining fair value could have a significant effect on whether or not an impairment charge is recorded and the magnitude of such a charge. If the book value of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. As a result of the testing performed on NBP’s goodwill the fair value exceeded the carrying value of the reporting unit and thus no impairment charge was recorded. Adverse market or economic events could result in impairment charges in future periods.

The amounts of goodwill are as follows (amounts in thousands):

	December 29, 2018		December 30, 2017
Beginning balance	$	14,991	$	14,991
Fair value adjustments		-		-
Ending balance	$	14,991	$	14,991

ASC 360, Impairment and Disposal of Long-Lived Assets, provides that NPB evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable. When testing for impairment, NBP groups its long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (or asset group). The determination of whether an asset group is recoverable is based on management’s estimate of undiscounted future cash flows directly attributable to the asset group as compared to its carrying value. If the carrying amount of the asset group is greater than the undiscounted cash flows, an impairment loss would be recognized for the amount by which the carrying amount of the asset group exceeds its estimated fair value. As a result of the review performed, no triggering events occurred during 2018 or 2017 related to NBP’s intangible assets, thus no impairment charge was recorded.

F-23

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

The amounts of other intangible assets are as follows (amounts in thousands):

		December 29, 2018
	Weighted
	Average	Gross
	Amortization	Carrying		Accumulated
	Period	Amount		Amortization
Intangible assets subject to amortization:
Customer Relationships	18	$	406,530	$	158,095
Tradenames	20		260,108		91,093
Cattle supply contracts	15		143,600		67,013
Other	10		830		581
	18	$	811,068	$	316,782

Total intangible assets		$	811,068	$	316,782



			December 30, 2017
	Weighted
	Average		Gross
	Amortization		Carrying	Accumulated
	Period		Amount	Amortization
Intangible assets subject to amortization:
Customer Relationships	18	$	406,530	$	135,510
Tradenames	20		260,108		78,071
Cattle supply contracts	15		143,600		57,440
Other	10		830		498
	18	$	811,068	$	271,519

Total intangible assets		$	811,068	$	271,519

For the fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016 NBP recognized $45.3 million, $45.3 million and $45.3 million, respectively, of amortization expense on intangible assets. The following table reflects the anticipated amortization expense relative to intangible assets recognized in NBP’s consolidated balance sheet as of December 29, 2018, for each of the next five years and thereafter:

Estimated amortization expense for fiscal years ended:
2019	$	45,245
2020		45,245
2021		45,245
2022		45,162
2023		45,159
Thereafter		268,230
Total	$	494,286

Overdraft Balances

The majority of NBP’s bank accounts are zero balance accounts where cash needs are funded as checks are presented for payment by the holder. Checks issued pending clearance that result in overdraft balances for accounting purposes are included in the trade accounts payable and cattle purchases payable balances, and the change in the related balances are reflected in operating activities on NBP’s consolidated statement of cash flows.

Self-insurance

NBP is self-insured for certain losses relating to workers’ compensation, automobile liability, general liability and employee medical and dental benefits. NBP has purchased stop-loss coverage in order to limit its exposure to any significant levels of claims. Self-insured losses are accrued in accrued insurance and other long-term liabilities in NBP’s consolidated balance sheets based upon NBP’s estimates of the aggregate uninsured claims incurred using actuarial assumptions accepted in the insurance industry and NBP’s historical experience rates.

Environmental Expenditures and Remediation Liabilities

Environmental expenditures that relate to current or future operations and which improve operational capabilities are capitalized at the time of expenditure. Expenditures that relate to an existing or prior condition caused by past operations, and do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated.

F-24

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

Foreign Currency Translation

NBP has representative offices located in Tokyo, Japan; Seoul, South Korea; and Hong Kong. The primary activity of these offices is to assist customers with product and order related issues. For foreign operations, the local currency is the functional currency. Translation into U.S. dollars is performed for assets and liabilities at the exchange rates as of the balance sheet date. Income and expense accounts are recorded at average exchange rates for the period. Adjustments resulting from the translation are reflected as a separate component of other comprehensive income.

Income Taxes

The provision for income taxes is computed on a separate legal entity basis. Accordingly, as NBP is a limited liability company, the separate legal entity does not provide for income taxes, as the results of operations are included in the taxable income of the individual members. However, certain states impose privilege taxes on the apportioned taxable income or income related measurements of NBP. To the extent that entities provide for income taxes, deferred tax assets and liabilities are recognized based on the differences between the financial statement and tax basis of assets and liabilities at each balance sheet date using enacted tax rates expected to be in effect in the year the differences are expected to reverse and are thus included in the consolidated financial statements of NBP. Based on federal income tax statute of limitations, National Carriers remains subject to examination of its income taxes for calendar years 2018, 2017, 2016 and 2015.

Fair Value of Financial Instruments

The carrying amounts of NBP’s financial instruments, including cash and cash equivalents, short-term trade and other receivables and payables, approximate their fair values due to the short-term nature of the instruments. The carrying value of debt approximates its fair value at December 29, 2018 and December 30, 2017, as substantially all debt carries variable interest rates.

Selling, General and Administrative Costs

Selling expenses consist primarily of salaries, trade promotions, advertising, commissions and other marketing costs. General and administrative costs consist primarily of general management, insurance and professional expenses. Selling, general and administrative costs consist of aggregated expenses that generally apply to multiple locations.

Shipping Costs

Pass-through finished goods delivery costs reimbursed by customers are reported in sales, while an offsetting expense is included in cost of sales.

Advertising

Advertising expenses are charged to operations in the period incurred and were $16.2 million, $20.8 million and $19.2 million for the fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016.

Comprehensive Income

Comprehensive income consists of net income and foreign currency translation adjustments.

Derivatives Activities

NBP uses futures contracts in order to reduce exposure associated with entering into firm commitments to purchase live cattle at prices determined prior to the delivery of the cattle as well as firm commitments to sell certain beef products at sales prices determined prior to shipment. In accordance with ASC 815, Derivatives and Hedging, NBP accounts for futures contracts and their related firm purchase commitments at fair value. Firm commitments for sales are treated as normal sales and therefore not marked to market. Certain firm commitments to purchase cattle, are marked to market when a price has been agreed upon, otherwise they are treated as normal purchases and, therefore, not marked to market. ASC 815 imposes extensive recordkeeping requirements in order to treat a derivative financial instrument as a hedge for accounting purposes. Derivatives qualify for treatment as hedges when there is a high correlation between the change in fair value of the instrument and the related change in fair value of the underlying commitment. For derivatives that qualify as effective hedges, the change in fair value has no net effect on earnings until the hedged transaction is settled. For derivatives that are not designated as hedging instruments, or for the ineffective portion of a hedging instrument, the change in fair value does affect current period net earnings.

F-25

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

While NBP management believes each of these instruments help mitigate various market risks, they are not designated and accounted for as hedges under ASC 815 as a result of the extensive recordkeeping requirements of this statement. Accordingly, the gains and losses associated with the change in fair value of the instrument and the offsetting gains and losses associated with changes in the market value of certain of the firm purchase commitments related to the futures contracts are recorded to income and expense in the period of change.

The fair value of derivative assets is recognized within other current assets, while the fair value of derivative liabilities is recognized within accrued liabilities.

NOTE 3. REVENUE RECOGNITION

NBP recognizes revenue mainly through retail, foodservice, international, and other distribution channels. Our revenues primarily result from contracts with customers and are generally short term in nature with the delivery of product as the single performance obligation. NBP recognizes revenue for the sale of the product at the point in time when our performance obligation has been satisfied and control of the product has transferred to our customer, which generally occurs upon shipment or delivery to a customer based on terms of the sale. In accordance with Topic 340, an entity may elect a practical expedient that allows the entity to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. NBP’s contracts are generally less than one year, therefore NBP has elected this practical expedient and have recognized costs paid to obtain contracts as expense when incurred. Additionally, items that are not material in the context of the contract are recognized as expense. Any taxes collected on behalf of government authorities are excluded from net revenues.

Revenue is measured by the transaction price, which is defined as the amount of consideration NBP expects to receive in exchange for providing goods to customers. The transaction price is adjusted for estimates of known or expected variable consideration, which includes consumer incentives, trade promotions, and allowances, such as discounts, rebates, volume-based incentives, cooperative advertising, and other programs. Variable consideration related to these programs is recorded as a reduction to revenue based on amounts NPB expects to pay. NBP bases these estimates on current performance, historical utilization, and projected redemption rates of each program. NPB reviews and update these estimates regularly until the incentives or product returns are realized and the impact of any adjustments are recognized in the period the adjustments are identified. In many cases, key sales terms such as pricing and quantities ordered are established on a regular basis such that most customer arrangements and related incentives have a duration of less than one year.

Amounts billed and due from customers are short term in nature and are classified as receivables since payments are unconditional and only the passage of time is required before payments are due. Additionally, NBP does not grant payment financing terms greater than one year.

Disaggregated Revenue

Revenue has been disaggregated into the categories below to show how economic factors affect the nature, amount, timing and uncertainty of revenue and cash flows. The following table further disaggregates our sales to customers by major revenue stream (in thousands):

	December 29, 2018
Beef, Pork, and Beef By-products	$	7,617,890
Other	$	229,931
Intercompany	$	(360,549	)
Net Sales	$	7,487,272

F-26

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

Contract Balances

Nearly all of NBP’s contracts with its customers are short-term, defined as less than one year. NBP receives payment from customers based on terms established with the customer. Payments are typically due within seven days of delivery. There are rarely contract assets related to costs incurred to perform in advance of scheduled billings. NBP, which ships internationally requires certain customers to pay in advance to avoid collection risk. Revenue contract liabilities relate to payments received in advance of satisfying the performance under the customer contract.

Changes in the contract liability balances during 2018 are as follows (in thousands):

	December 29, 2018		December 31, 2017		Change

Contract Liabilities	$	15,096	$	20,904	$	(5,808	)

Substantially all of the revenue was recognized in 2018 related to the prior year contract liability. NBP expects to recognize substantially all of the current year liability in 2019.

NOTE 4. NEW ACCOUNTING PRONOUNCEMENTS

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), along with several updates, which, in an effort to increase transparency and comparability among organizations utilizing leasing, requires an entity that is a lessee to recognize the assets and liabilities arising from operating leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. In transition, the entity may elect to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach or the beginning of the period of adoption using a cumulative-effect adjustment approach. The provisions of the new guidance will be effective as of the beginning of NBP 2019 fiscal year. NBP will adopt the new standard as of December 30, 2018, the beginning of its 2019 fiscal year and recognize and measure leases at the beginning of the period of adoption. NBP will elect the package of practical expedients available under the transition guidance which, among other things, allows the carry-forward of historical lease classification. NBP will make an accounting policy election to not apply the new guidance to leases with a term of 12 months or less and will recognize those payments in the Consolidated Statement of Income on a straight-line basis over the lease term. NBP has implemented a system solution for administering its leases and facilitating compliance with the new guidance. Adoption of the standard is expected to result in an approximate $75 million increase in operating lease right of use assets and liabilitites on NBP’s Consolidated Balance Sheet. However, NBP does not believe the standard will have a material impact on its Consolidated Statement of Operations.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which, in an effort to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments, replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. The provisions of the new guidance will be effective as of the beginning of NBP’s 2020 fiscal year. Early adoption is permitted after NBP’s 2018 fiscal year. NBP is currently evaluating the impact of the new guidance on its financial statements and has not yet selected an adoption date.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, new accounting guidance to improve the effectiveness of disclosures related to fair value measurements. The new guidance removes certain disclosure requirements related to transfers between Level 1 and Level 2 of the fair value hierarchy along with the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. Additions to the disclosure requirements include more quantitative information related to significant unobservable inputs used in Level 3 fair value measurements and gains and losses included in other comprehensive income. The new guidance will be effective as of NBP’s 2020 fiscal year with early adoption permitted. NBP is currently evaluating the impact of the new guidance on its financial statements and have not yet selected an adoption date.

F-27

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

NOTE 5. LONG-TERM DEBT AND LOAN AGREEMENTS

NBP entered into various debt agreements in order to finance acquisitions and provide liquidity to operate the business on a going forward basis. As of December 29, 2018 and December 30, 2017, debt consisted of the following:

	December 29, 2018			December 30, 2017
Short-term debt:
Current portion of term loan facility ^(a)	$	-		$	-
Reducing revolver credit facility ^(a)		18,750			13,750
Current portion of loan costs ^(c)		(723	)		(724	)
Current portion of capital lease obligations ^(d)		171			221
	$	18,198		$	13,247

Long-term debt:
Reducing revolver credit facility ^(a)	$	116,250		$	106,250
Industrial Development Revenue Bonds ^(b)		2,000			2,000
Revolving credit facility ^(a)		45,000			80,000
Long-term portion of loan costs ^(c)		(1,746	)		(2,468	)
Long-term capital lease obligations ^(d)		135			191
	$	161,639		$	185,973
Total debt	$	179,837		$	199,220

(a) Senior Credit Facilities - In June 2017, NBP entered into a Third Amended and Restated Credit Agreement (the "Debt Agreement"). The Debt Agreement matures in June 2022. In March 2018, NBP amended the Debt Agreement to include a $375.0 million reducing revolver loan and a $275.0 million revolving credit facility. The reducing revolver loan commitment decreases by approximately $18.8 million on each annual anniversary of the Debt Agreement. The Debt Agreement is secured by a first priority lien on substantially all of the assets of NBP and its subsidiaries and includes customary covenants including a single financial covenant that requires NBP to maintain a minimum tangible net worth; at December 29, 2018, NBP was in compliance with the single financial covenant.

At December 29, 2018, NBP’s outstanding debt under the Debt Agreement consisted of a reducing revolver loan with an outstanding balance of $135.0 million and $45.0 million drawn on the revolving credit facility. The reducing revolving loan and the revolving credit facility bear interest at the Base Rate or the LIBOR Rate (as defined in the credit facility), plus a margin ranging from 0.75% to 3.0% depending upon certain financial ratios and the rate selected. At December 29, 2018, the interest rates on the outstanding reducing revolving loan and revolving credit facility were 4.1% and 4.2%, respectively.

Borrowings under the reducing revolver loan and the revolving credit facility are available for NBP’s working capital requirements, capital expenditures and other general corporate purposes. Unused capacity under the revolving credit facility can also be used to issue letters of credit; letters of credit aggregating $13.9 million were outstanding at December 29, 2018. Amounts available under the revolving credit facility are subject to a borrowing base calculation primarily comprised of receivable and inventory balances; amounts available under the reducing revolver facility are constrained only by the annual reduction in the commitment amount. At December 29, 2018, after deducting outstanding amounts and issued letters of credit, $165.9 million of the unused revolving credit facility and $240.0 million of the reducing revolver commitment was available to NBP.

(b) Industrial Development Revenue Bonds—Effective December 30, 2004, NBP entered into a transaction with the City of Dodge City, Kansas, designed to provide property tax savings. Under the transaction, the City purchased NBP’s Dodge City facility, or the facility, by issuing $102.3 million in bonds due in December 2019, used the proceeds to purchase the facility and leased the facility to NBP for an identical term under a capital lease. NBP purchased the City's bonds with proceeds of its term loan under the Debt Agreement. Because the City has assigned the lease to the bond trustee for the benefit of NBP as the sole bondholder, NBP, effectively controls enforcement of the lease against itself. As a result of the capital lease treatment, the facility will remain a component of property, plant and equipment in NBP’s consolidated balance sheets. As a result of the legal right of offset, the capital lease obligation and the corresponding bond investments have been eliminated in consolidation. The transaction provides NBP with property tax exemptions for the leased facility, that, after netting payments to the City and local school district under payment in lieu of tax agreements, result in an annual property tax savings of approximately 25%. The facility remains subject to a prior mortgage and security interest in favor of the lenders under the Debt Agreement. Additional revenue bonds may be issued to cover the costs of certain improvements to this facility. The total amount of revenue bonds authorized for issuance is $120.0 million.

F-28

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

The cities of Liberal and Dodge City, Kansas issued an aggregate of $13.9 million of industrial development revenue bonds on NBP’s behalf to fund the purchase of equipment and construction improvements at NBP’s facilities in those cities. These bonds were issued in four series of $1.0 million, $1.0 million, $6.0 million and $5.9 million. Of the four series of bonds, only the $1.0 million and $1.0 million due on demand or on February 1, 2029 and March 1, 2027, respectively remain outstanding. The bonds issued in 1999 and 2000 are variable rate demand obligations that bear interest at a rate that is adjusted weekly, which rate will not exceed 10% per annum. NBP has the option to redeem a series of bonds at any time for an amount equal to the principal plus accrued interest to the date of such redemption. The holders of the bonds have the option to tender the bonds upon seven days’ notice for an amount equal to par plus accrued interest. To the extent that the remarketing agent for the bonds is unable to resell any of the bonds that are tendered, the remarketing agent could use the letter of credit to fund such tender. Because each series of bonds is backed by a letter of credit under our Debt Agreement, these due-on-demand bonds have been presented as non-current obligations until twelve months prior to their maturity.

On December 17, 2010, National Beef Leathers, LLC, or Leathers, a subsidiary of NBP, entered into various agreements with the city of St. Joseph, Missouri, designed to provide NBP property tax savings. Under the transaction, the city of St. Joseph issued $10.2 million in bonds due in December 2022, used the proceeds to purchase the equipment within the Leathers facility and subsequently leased the equipment back to us for an identical term under a capital lease. NBP purchased the City's bonds with proceeds of our term loan under the Debt Agreement. Because the city of St. Joseph has assigned the lease to the bond trustee for our benefit as the sole bondholder, NBP, effectively controls enforcement of the lease against ourselves. As a result of the capital lease treatment, the equipment will remain a component of property, plant and equipment in NBP’s consolidated balance sheets. As a result of the legal right of offset, the capital lease obligation and the corresponding bond investments will be eliminated in consolidation.

(c) Debt issuance costs — In June 2017, NBP incurred financing charges of approximately $2.8 million related to the Debt Agreement. The finance charges will be amortized over the life of the loan.

Amortization of $0.7 million, $0.8 million, and $0.7 million was charged to interest expense during the fiscal years ended December 29, 2018, December 30, 2017 and December 31, 2016, respectively. NBP had unamortized costs of $0.7 million and $0.7 million included in current installments of long-term debt on the consolidated balance sheets at December 29, 2018 and December 30, 2017, respectively, and unamortized costs of $1.7 million and $2.5 million included in long-term debt, excluding current installments on the consolidated balance sheets at December 29, 2018 and December 30, 2017, respectively.

The aggregate minimum principal maturities of the long-term debt for each of the five fiscal years and thereafter following December 29, 2018, are as follows:

	Minimum
	Principal
	Maturities
Fiscal year ending December:
2019	$	18,200
2020		18,122
2021		18,057
2022		123,458
2023		-
Thereafter		2,000
Total minimum principal maturities	$	179,837

F-29

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

(d) Capital and Operating Leases—NBP leases a variety of buildings and equipment, as well as tractors and trailers through its subsidiary National Carriers, under capital and operating lease agreements that expire in various years. Future minimum lease payments required at December 29, 2018, under capital leases are as follows:

	Capital
	Lease
	Obligations
Fiscal year ending December:
2019	$	171
2020		93
2021		42
2022		-
2023		-
Thereafter		-
Net minimum lease payments	$	306
Less amount representing interest		(29	)
Present value of net minimum lease payments	$	277

Future minimum lease payments required at December 29, 2018, under non-cancelable operating leases with terms exceeding one year, are as follows:

	Non-cancelable
	Operating Lease
	Obligations
Fiscal year ending December:
2019	$	20,530
2020		14,663
2021		11,886
2022		8,044
2023		4,891
Thereafter		3,364
Minimum lease payments		63,378
Less: Sublease income		(1,060	)
Net minimum lease payments	$	62,318

Rent expense associated with operating leases (net of sublease rental income) was $24.5 million, $20.6 million and $18.9 million for fiscal years 2018, 2017 and 2016, respectively. NBP expects that it will renew lease agreements or enter into new leases as the existing leases expire.

Other Commitments

Utilities Commitment - Effective December 30, 2004, NBP finalized an agreement with the City of Dodge City, Kansas, whereby in consideration of certain improvements made to the city water and wastewater systems, NBP committed to make a series of service charge payments totaling $19.3 million over a 20-year period, of which $0.8 million was paid in each of the fiscal years 2018, 2017, and 2016, respectively.

Payments under the commitment will be $0.8 million in each of the fiscal years 2019 through 2023.

NOTE 6. RETIREMENT PLANS

NBP maintains tax-qualified employee savings and retirement plans, or the 401(k) Plans, covering certain of NBP’s employees. Pursuant to the 401(k) Plans, eligible employees may elect to reduce their current compensation by up to the lesser of 75% of their annual compensation or the statutorily prescribed annual limit and have the amount of such reduction contributed to the 401(k) Plans. The 401(k) Plans provide for additional matching contributions by NBP, based on specific terms contained in the 401(k) Plans. The trustees of the 401(k) Plans, at the direction of each participant, invest the assets of the 401(k) Plan in designated investment options. The 401(k) Plans are intended to qualify under Section 401 of the Internal Revenue Code. Expenses related to the 401(k) Plans totaled approximately $1.5 million, $1.3 million, and $1.2 million for the fiscal years 2018, 2017 and 2016, respectively.

During 2017, NBP bargained with the United Food and Commercial Workers International Union (UFCW) Local 2 for a complete withdrawal from the UFCW Plan. As a result, NBP is required to make withdrawal payments into the fund over a 20-year period. NBP recorded expenses related to the UFCW Plan withdrawal of approximately $18.6 million which is included in Cost of sales in the Consolidated Statements of Operations for the 52 week period ending December 20, 2017. Payments into the UFCW Plan began during 2018. The current portion of the withdrawal liability is approximately $0.7 million and is included in Other accrued expenses and liabilities on the Consolidated Balance Sheets. The long-term portion of the withdrawal liability is approximately $18.0 million and is included in Other liabilities on the Consolidated Balance Sheets.

F-30

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

NOTE 7. INCOME TAXES

Income tax expense includes the following current and deferred provisions (in thousands):

	52 weeks ended		52 weeks ended		53 weeks ended
	December 29,2018		December 30, 2017		December 31, 2016
Current provision:
Federal	$	1,233	$	764	$	1,139
State		1,081		594		775
Foreign		45		57		35
Total current tax expense		2,359		1,415		1,949

Deferred provision:
Federal		200		707		184
State		48		116		33
Foreign		-		-		-
Total deferred tax expense		248		823		217
Total income tax expense	$	2,607	$	2,238	$	2,166

Income tax expense differed from the “expected” income tax (computed by applying the federal income tax rate of 21% in 2018 and 35% in 2017 and 2016 to to earnings before income taxes) as follows (in thousands):

	52 weeks ended			52 weeks ended			53 weeks ended
	December 29, 2018			December 30, 2017			December 31, 2016
Computed “expected” income tax expense	$	125,395		$	142,559		$	115,158
Passthrough “expected” income tax expense		(124,152	)		(141,632	)		(113,462	)
State taxes, net of federal		1,129			710			815
Permanent differences		229			313			312
Rate Change		-			312			-
Other		6			(24	)		(657	)
Total income tax expense	$	2,607		$	2,238		$	2,166

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 29, 2018 and December 30, 2017 are presented below:

	52 weeks ended			52 weeks ended
	December 29, 2018			December 30, 2017
Deferred tax assets:
Accounts receivable, due to allowance for doubtful accounts	$	18		$	30
Intangible assets		41			57
Self-insurance and workers compensation accruals		822			802
Employee benefit accruals		174			168
Total gross deferred tax assets		1,055			1,057
Deferred tax liabilities:
Property, plant, and equipment, principally due to differences in depreciation		1,076			834
Other		65			61
Total gross deferred tax liabilities		1,141			895
Net deferred tax (liabilities) assets	$	(86	)	$	162

Net deferred tax liabilities at December 29, 2018 are included in the consolidated balance sheet as other liabilities. Net deferred tax assets at December 30, 2017 are included in the consolidated balance sheet as other current assets.

Deferred tax assets relate to the operations of National Carriers.

There were no valuation allowances provided for at December 29, 2018 and December 30, 2017. Management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets. There are no unrecognized tax benefits recorded in NBP’s Consolidated Financial Statements as of December 29, 2018 or December 30, 2017.

F-31

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

NOTE 8. RELATED PARTY TRANSACTIONS

NBP entered into various transactions with a company affiliated with NBPCo Holdings in the ordinary course of business.

During fiscal years 2018, 2017, and 2016, NBP had sales and purchases with the following related parties (amounts in thousands):

	52 weeks ended		52 weeks ended		53 weeks ended
	December 29, 2018		December 30, 2017		December 31, 2016
Sales to:
Beef Products, Inc. (1)	$	28,360	$	31,672	$	30,879
Total sales to affiliate	$	28,360	$	31,672	$	30,879

Purchases from:
Beef Products, Inc. (1)	$	127,500	$	13,410	$	14,850
Total purchases from affiliate	$	127,500	$	13,410	$	14,850


⁽¹⁾ Beef Products, Inc. (BPI) is an affiliate of NBPCo Holdings

At December 29, 2018 and December 30, 2017, the amounts due from BPI for the sale of beef trimmings were approximately $0.8 million and $0.8 million, respectively. At December 29, 2018 and December 30, 2017, the amounts due to BPI for the purchase of processed lean beef were approximately $0.2 million and $0.3 million, respectively.

In January 2007, NBP entered into an agreement with BPI for BPI to manufacture and install a grinding system in one of our plants. In accordance with the agreement with BPI, NBP is to pay BPI a technology and support fee based on the number of pounds of product produced using the grinding system. The installation of the grinding system was completed in fiscal year 2008. NBP paid approximately $1.7 million during each of the fiscal years 2018, 2017 and 2016, to BPI in technology and support fees.

NBP participates in a cattle supply agreement with US Premium Beef, a minority owner. Under this agreement NBP has agreed to purchase 735,385 head of cattle each year (subject to adjustment), from the members of US Premium Beef, with prices based on those published by the U.S. Department of Agriculture, subject to adjustments for cattle performance. NBP obtained approximately 25% and 24% of its cattle requirements under this agreement during 2018 and 2017, respectively.

NOTE 9. FAIR VALUE MEASUREMENTS

NBP determines fair value utilizing a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The fair value hierarchy gives the highest priority to quoted market prices (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of inputs used to measure fair value are as follows:

Level 1 — quoted prices in active markets for identical assets or liabilities accessible by the reporting entity.
Level 2 — observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 — unobservable inputs for an asset or liability. Unobservable inputs should only be used to the extent observable inputs are not available.

The following table details the assets and liabilities measured at fair value on a recurring basis as of December 29, 2018, and December 30, 2017 and also the level within the fair value hierarchy used to measure each category of assets (in thousands).

F-32

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

					Quoted Prices in
					Active Markets for		Significant Other			Significant
					Identical Assets		Observable Inputs			Unobservable
Description			December 29, 2018		(Level 1)		(Level 2)			Inputs (Level 3)

Other current assets - derivatives		$	571	$	-	$	571		$	-
Other accrued expenses and liabilities - derivatives		$	575	$	566	$	9		$	-


				Quoted Prices in
				Active Markets for		Significant Other		Significant
				Identical Assets		Observable Inputs		Unobservable
Description	December 30, 2017			(Level 1)		(Level 2)		Inputs (Level 3)

Other current assets - derivatives		$	2,880	$	2,122	$	758		$	-
Other current assets - promissory note		$	250	$	-	$	-		$	250
Other assets - promissory note		$	4,500	$	-	$	-		$	4,500
Other accrued expenses and liabilities - derivatives		$	2,100	$	-	$	2,100		$	-

NOTE 10. DISCLOSURE ABOUT DERIVATIVE INSTRUMENTS

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 instruments pursuant to our established policies:

Forward purchase contracts for cattle for use in our beef plants
Exchange traded futures contracts for cattle
Exchange traded futures contracts for agricultural products

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

NBP enters into certain commodity derivatives, primarily with a diversified group of counterparties. The maximum amount of loss due to the credit risk of the counterparties, should the counterparties fail to perform according to the terms of the contracts, is deemed to be immaterial as of December 29, 2018 and December 30, 2017. The exchange-traded contracts have been entered into under a master netting agreement. None of the derivatives entered into have credit-related contingent features.

F-33

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

The following table presents the fair values as discussed in Note 8 and other information regarding derivative instruments not designated as hedging instruments as of December 29, 2018 and December 30, 2017 (in thousands of dollars:

December 29, 2018	Derivative Asset				Derivative Liability
	Balance Sheet				Balance Sheet
	Location	Fair Value			Location	Fair Value

					Other accrued
	Other current				expenses and
Commodity contracts	assets	$	571		liabilities	$	575
Total		$	571			$	575

December 30, 2017	Derivative Asset			Derivative Liability

	Balance Sheet				Balance Sheet
	Location		Fair Value		Location		Fair Value

					Other accrued
	Other current				expenses and
Commodity contracts	assets	$	2,880		liabilities	$	2,100
Total		$	2,880			$	2,100

The following table presents the unrealized and realized gains (losses) on derivative contracts as reflected in the Consolidated Statement of Operations for the fiscal years ended December 29, 2018, December 30, 2017, and December 31, 2016 (in thousands of dollars):

		Amount of Gain (Loss) Recognized in Income On Derivatives
Derivatives Not	Location of Gain (Loss)
Designated as	Recognized in Income on
Hedging Instruments	Derivatives	December 29, 2018		December 30, 2017			December 31, 2016

Commodity contracts	Net sales	$	5,876	$	6,046		$	3,261
Commodity contracts	Cost of sales		4,936		(9,242	)		1,185
Total		$	10,812	$	(3,196	)	$	4,446

NOTE 11. LEGAL PROCEEDINGS AND CONTINGENCIES

In April 2014, the California Regional Water Quality Control Board Colorado River Basin Region (the “Regional Board”) issued an administrative civil liability complaint to NBP’s wholly-owned subsidiary, National Beef California, L.P. (“NBC”). The Complaint alleged that NBC violated federal National Pretreatment Standards regulations by introducing into the Brawley, California wastewater treatment plant (the “WWTP”) pollutants that caused “pass through” or “interference” with the WWTP. The complaint was assessed a penalty of approximately $3.8 million. A hearing before the Regional Board was scheduled for late October 2014, but the Regional Board withdrew its complaint in early October 2014 and requested the California State Water Resources Control Board (the “State Board”) to take up the matter. In response, the State Board issued an administrative civil liability complaint against NBC in January 2016, which sought a penalty of $1.65 million. The State Board withdrew its complaint in February 2016 and indicated that it intended to refile the complaint at a later date, but has yet to do so. NBP believes it has meritorious defenses to the State Board complaint and intends to defend against the complaint vigorously. There can be no assurances, however, as to the outcome of this matter or the impact on NBP’s consolidated financial position, results of operations and cash flows.

NBP is a party to a number of other lawsuits and claims arising out of the operation of its business. Management believes the ultimate resolution of such matters should not have a material adverse effect on NBP’s financial condition, results of operations or liquidity.

F-34

NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES
Consolidated Financial Statements
Notes to Consolidated Financial Statements

NOTE 12. SUBSEQUENT EVENTS

On February 28, 2019, NBP acquired 100% of the ownership interests in Ohio Beef USA, LLC (Ohio Beef) from NBM US Holdings, Inc., a subsidiary of Marfrig, for $60 million. Ohio Beef is a fresh and frozen beef patty processor in North Baltimore, Ohio.

NBP evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through March 13, 2019, the date the financial statements were available for issuance.

F-35

EX-3.3 2 exhibit3-3.htm Exhibit 3.3

EXECUTION VERSION

NATIONAL BEEF PACKING COMPANY, LLC
FOURTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT

DATED AS OF FEBRUARY 28, 2019

TABLE OF CONTENTS

	Page
1. Definitions	2
2. Formation and Purpose	12
2.1 Conversion; Formation	12
2.2 Name	12
2.3 Registered Office/Agent	12
2.4 Term	12
2.5 Purpose	12
2.6 Powers	12
2.7 Certificates	13
2.8 Principal Office	14
2.9 No State-Law Partnership	14
3. MEMBERSHIP, CAPITAL CONTRIBUTIONS AND UNITS	14
3.1 Members	14
3.2 Member Interests and Units	14
3.3 Additional Members and Units	14
3.4 Capital Contributions	15
3.5 Termination of Governance Rights	15
3.6 Additional Issuances of Units	15
4. CAPITAL ACCOUNTS	16
4.1 Allocations	16
4.2 Capital Accounts	16
4.3 Revaluations of Assets and Capital Account Adjustments	17
4.4 Additional Capital Account Adjustments	17
4.5 Additional Capital Account Provisions	17
5. DISTRIBUTIONS AND ALLOCATIONS OF PROFIT AND LOSS	17
5.1 Board of Managers Determination; Annual Distribution	17
5.2 Distributions	18
5.3 No Violation	19
5.4 Withholdings	19
5.5 Property Distributions and Installment Sales	20
5.6 Net Profit or Net Loss	21

TABLE OF CONTENTS
(continued)

5.7 Regulatory Allocations.	22
5.8 Tax Allocations	23
5.9 Imputed Tax Underpayment	23
5.10 Right to Offset	23
6. STATUS, RIGHTS AND POWERS OF MEMBERS AND CERTAIN MEMBER AGREEMENTS	25
6.1 Limited Liability	25
6.2 Return of Distributions of Capital	25
6.3 No Management or Control	25
6.4 Specific Limitations	25
6.5 Member Voting	26
6.6 Required Consents; Modification of Unit Terms	26
6.7 Restrictions on Member Competition	26
6.8 Agreement for NBPCo to Negotiate Certain Requirements Contracts in Good Faith	28
6.9 Agreement Regarding NBPCo Waiver of Right of Set-off	29
6.10 Contracts with Managers or their Affiliates	29
6.11 Member Compensation; Expenses; Loans	29
7. DESIGNATION, RIGHTS, AUTHORITIES, POWERS, RESPONSIBILITIES AND DUTIES OF THE BOARD OF MANAGERS	30
7.1 Board of Managers	30
7.2 Managers	30
7.3 Number and Designation Rights	31
7.4 Voting and Act of the Board of Managers; Actions Requiring Jefferies Consent; Action without a Meeting	32
7.5 Tenure	33
7.6 Resignation	33
7.7 Removal	33
7.8 Vacancies	33
7.9 Meetings	33
7.10 Notice	33
7.11 Waiver	34
7.12 Quorum; Attendance by Proxy	34

TABLE OF CONTENTS
(continued)

7.13 Compensation	34
7.14 Authority of Board of Managers	34
7.15 Reliance by Third Parties	35
8. DESIGNATION, RIGHTS, AUTHORITIES, POWERS, RESPONSIBILITIES AND DUTIES OF OFFICERS AND AGENTS	36
8.1 Officers, Agents	36
8.2 Election	36
8.3 Tenure	36
8.4 Chairman of the Board of Managers, Chief Executive Officer, President and Vice President	36
8.5 Chief Financial Officer	37
8.6 Secretary and Assistant Secretaries	37
8.7 Vacancies	37
8.8 Resignation and Removal	37
8.9 Compensation	37
8.10 Certain Actions Requiring Board of Managers Consent	37
9. BOOKS, RECORDS, ACCOUNTING AND REPORTS	39
9.1 Books and Records	39
9.2 Delivery to Member, Inspection; etc	40
9.3 Accounting; Fiscal Year	40
9.4 Reports	40
9.5 Filings	41
9.6 Non-Disclosure	42
9.7 Restrictions on Receipt	43
10. TAX MATTERS	43
10.1 Tax Matters Member	43
10.2 Partnership Representative	44
10.3 Tax Returns	46
10.4 Tax Elections	46
10.5 Tax Information	47
11. TRANSFER OF INTERESTS	47
11.1 Transfer	47

iii

TABLE OF CONTENTS
(continued)

11.2 Permitted Transferees	48
11.3 Transfer Requirements	48
11.4 Consent	49
11.5 Withdrawal of Member	49
11.6 Noncomplying Transfers Void	49
11.7 Amendment of Exhibit A	49
11.8 Limited Interests	49
11.9 Permitted Financing Pledge	49
11.10 Member Bankruptcy Events	50
12. RIGHT OF FIRST OFFER; TAG-ALONG RIGHTS; LIQUIDITY OPTION	50
12.1 Right of First Offer	50
12.2 Rights of First Refusal	51
12.3 Tag-Along Rights	52
12.4 Miscellaneous	54
12.5 Liquidity Options	56
13. DISSOLUTION OF COMPANY	60
13.1 Termination of Membership	60
13.2 Events of Dissolution	60
13.3 Liquidation	61
13.4 No Action for Dissolution	61
13.5 No Further Claim	61
14. INDEMNIFICATION	61
14.1 General	61
14.2 Exculpation	62
14.3 Persons Entitled to Indemnity	62
14.4 Procedure Agreements	62
14.5 Duties of Board of Managers	62
14.6 Interested Transactions	63
14.7 Fiduciary and Other Duties	63
15. REPRESENTATIONS AND COVENANTS BY THE MEMBERS	64
15.1 Investment Intent	64
15.2 Securities Regulation	64

TABLE OF CONTENTS
(continued)

15.3 Knowledge and Experience	64
15.4 Economic Risk	64
15.5 Binding Agreement	64
15.6 Tax Position	64
15.7 Information	65
15.8 Licenses and Permits	65
16. COMPANY REPRESENTATIONS	65
16.1 Duly Formed	65
16.2 Valid Issue	65
17. AMENDMENTS TO AGREEMENT	65
17.1 Amendments	65
17.2 Corresponding Amendment of Certificate	66
17.3 Binding Effect	66
18. GENERAL	66
18.1 Successors; Delaware Law; Etc.	66
18.2 Notices, Etc.	66
18.3 Execution of Documents	66
18.4 Consent to Jurisdiction	67
18.5 Waiver of Jury Trial	68
18.6 Specific Enforcement; Remedies; Waiver	68
18.7 Severability	68
18.8 Table of Contents, Headings	69
18.9 No Third Party Rights	69

TABLE OF CONTENTS
(continued)

EXHIBIT A Members and Units

EXHIBIT B Matters Requiring Jefferies/NBM Approval

EXHIBIT C Matters Requiring Approval of the Jefferies Managers and the USPB Manager

NATIONAL BEEF PACKING COMPANY, LLC
FOURTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

This Fourth Amended and Restated Limited Liability Company Agreement (this "Agreement") of National Beef Packing Company, LLC, a Delaware limited liability company (the "Company"), is entered into as of February 28, 2019 (the "Effective Date"), by and among the Company, Jefferies Financial Group Inc. (f/k/a Leucadia National Corporation), a New York corporation ("Jefferies"), NBM US Holdings, Inc., a Delaware corporation ("NBM"), U.S. Premium Beef, LLC, a Delaware limited liability company ("USPB"), NBPCo Holdings, LLC, a South Dakota limited liability company ("NBPCo"), and TMK Holdings, LLC, a Missouri limited liability company ("New Kleinco"). Jefferies, USPB, NBPCo and New Kleinco are referred to herein as the "Minority Members".

RECITALS

WHEREAS, Farmland National Beef Packing Company, L.P., a Delaware limited partnership (the "Partnership"), was organized under and in accordance with the provisions of the Delaware Revised Uniform Limited Partnership Act (the "Partnership Act") by the filing of a Certificate of Limited Partnership with the Secretary of State of the State of Delaware on March 30, 1993, which was amended from time to time to reflect changes in the names and addresses of the general partners, and to reflect the change of name from National Beef Packing Company, L.P. to Farmland National Beef Packing Company, L.P., and the Partnership was most recently governed by a Third Amended and Restated Agreement of Limited Partnership, dated as of December 1, 1997, as amended by amendments dated February 3, 1998, and May 3, 2000;

WHEREAS, the Partnership was converted (the "Conversion") to the Company as the result of a statutory conversion of the Partnership under Section 18 214 of the Act (as defined herein) and Section 17 219 of the Partnership Act as of August 6, 2003, and in connection with the Conversion, the Company previously entered into Liability Company Agreement of the Company, dated as of August 6, 2003 (the "Original Agreement");

WHEREAS, the Original Agreement was amended and restated by that certain Amended and Restated Limited Liability Company Agreement of the Company, dated as of December 30, 2011 (the "First Amended Agreement");

WHEREAS, the First Amended Agreement was amended and restated by that certain Second Amended and Restated Limited Liability Company Agreement of the Company, dated as of December 30, 2011 (the "Second Amended Agreement");

WHEREAS, pursuant to the Second Amended Agreement, (a) it was previously contemplated that the Company would transfer to National Beef Pennsylvania, LLC ("Pennsylvania LLC") all of the Company's tangible and intangible assets located in the Commonwealth of Pennsylvania in exchange for 100% of the membership interests of Pennsylvania LLC, and (b) Pennsylvania LLC was a party to the Second Amended Agreement for purposes of certain transfer provisions contained therein related to such contemplated transfer;

WHEREAS, the contemplated transfer to Pennsylvania LLC was never consummated and Pennsylvania LLC was subsequently dissolved pursuant to a certificate of cancellation filed with the Secretary of State of the State of Delaware on October 22, 2013;

WHEREAS, as contemplated by that certain Purchase and Sale Agreement, dated as of April 9, 2018 (the "2018 Purchase Agreement"), by and among Jefferies, NBPCo Holdings, LLC, the Company, NBM, and the NBM Ultimate Parent (as defined below), (a) the Minority Members transferred 5,448.40 Units of the Company to NBM, and (b) the Second Amended Agreement was amended and restated by that certain Third Amended and Restated Limited Liability Company Agreement of the Company, dated as of June 5, 2018 (the "Third Amended Agreement");

WHEREAS, the Company is entering into that certain Purchase and Sale Agreement on the date of this Agreement (the "2019 Purchase Agreement"), by and among NBM (which is an indirect wholly-owned subsidiary of the NBM Ultimate Parent), Ohio Beef USA LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of NBM, ("Ohio Beef"), the NBM Ultimate Parent and the Company, pursuant to which the Company is acquiring all of the membership interests of Ohio Beef;

WHEREAS, in connection with the transactions contemplated by the 2019 Purchase Agreement, the Company and the Members desire to amend and restate the Third Amended Agreement as of the Effective Date to provide for, among other things, the management of the business and affairs of the Company, the allocation of profits and losses among the Members and the respective rights and obligations of the Members to each other and to the Company; and

WHEREAS, as of the Effective Date, this Agreement shall amend, restate and supersede in all respects, the Third Amended Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and conditions herein contained, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged by each party hereto, the Members agree as follows:

1. Definitions

For purposes of this Agreement: (a) references to "Articles," "Exhibits" and "Sections" are to Articles, Exhibits and Sections of this Agreement unless explicitly indicated otherwise, (b) references to statutes include all rules and regulations thereunder, and all amendments and successors thereto from time to time; and (c) the word "including" shall be construed as "including without limitation."

"2018 Effective Date" means June 5, 2018.

"2018 Purchase Agreement" is defined in the recitals hereto.

"2019 Purchase Agreement" is defined in the recitals hereto.

"Accredited Investor" has the meaning defined in Regulation D under Section 4(2) of the Securities Act.

"Act" means the Delaware Limited Liability Company Act (6 Del. C. § 18 101, et seq.).

"Adjusted Capital Account Deficit" means, with respect to any Member, the deficit balance, if any, in such Member's Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:

(a) credit to such Capital Account any amounts that such Member is deemed to be obligated to restore pursuant to the penultimate sentence of each of Regulations Sections 1.704-2(i)(5) and 1.704-2(g)(1); and

(b) debit to such Capital Account the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted and applied by the Board of Managers consistently therewith.

"Adjustment Year" means: (a) in the case of an adjustment pursuant to the decision of a court, the Company's taxable year in which the decision becomes final, (b) in the case of an administrative adjustment request, the Company's taxable year in which the administrative adjustment is made or (c) in any other case, the Company's taxable year in which the notice of final partnership adjustment is mailed.

"Affiliate" means with respect to any specified Person, any Person that directly or through one or more intermediaries Controls or is Controlled by or is under common Control with the specified Person.

"Aggregate Units" means, as to each Member on the 2018 Effective Date, the number of Units held by such Member on the 2018 Effective Date, together with any additional Units subsequently acquired by such Member.

"Agreement" is defined in the preamble hereto.

"Annual Trigger" is defined in Section 12.5.1(b)(i).

"Applicable Payment Year" means, with respect to any Unsatisfied Amount, the Fiscal Year in which such Unsatisfied Amount was payable to Ohio Beef or a Buyer Indemnitee, as applicable, pursuant to the 2019 Purchase Agreement.

"Asset Value" of any property of the Company means its adjusted basis for federal income tax purposes unless:

(a) the property was accepted by the Company as a contribution to capital at a value different from its adjusted basis, in which event the initial Asset Value for such property shall mean the gross fair market value of the property agreed to by the Company and the contributing Member; or

(b) as a consequence of the issuance of additional Units or the redemption of all or part of the Interest of a Member, the property of the Company is revalued in accordance with Section 4.3.

As of any date, references to the "then prevailing Asset Value" of any property shall mean the Asset Value last determined for such property less the depreciation, amortization and cost recovery deductions taken into account in computing Net Profit or Net Loss in fiscal periods subsequent to such prior determination date.

"Assignee" is defined in Section 11.9.

"Base Tax Rate" is defined in Section 5.2.1.

"Board of Managers" means the board of managers of the Company elected and determined in accordance with Article 7.

"Business Day" means any day other than: (a) a Saturday, Sunday or federal holiday or (b) a day on which commercial banks in New York, New York or São Paulo, State of São Paulo, Brazil are authorized or required to be closed.

"Buyer Indemnitee" is defined in the 2019 Purchase Agreement.

"Call Date" is defined in Section 12.5.2(b).

"Call Election Period" is defined in Section 12.5.2(b).

"Call Member(s)" is defined in Section 12.5.2(a).

"Call Notice" is defined in Section 12.5.2(a).

"Call Units" is defined in Section 12.5.2(a).

"Capital Account" is defined in Section 4.2.

"Capital Contribution" means with respect to any Member, the sum of (a) the amount of money plus (b) the fair market value of any other property (net of liabilities assumed or to which the property is subject) contributed to the Company with respect to the Interest held by such Member pursuant to this Agreement.

"Cattle Agreement Trigger" is defined in Section 12.5.1(b)(ii).

"Cattle Purchase and Sale Agreement" means the Cattle Purchase and Sale Agreement dated as of December 30, 2011 by and among the Company and USPB.

"Certificate of Conversion" means the certificate of conversion of the Partnership to a limited liability company, and any amendments thereto and restatements thereof filed on behalf of the Company with the Delaware Secretary of State pursuant to Section 18 214 of the Act.

"Certificate of Formation" means the certificate of formation of the Company, and any amendments thereto and restatements thereof, filed on behalf of the Company with the Delaware Secretary of State pursuant to Sections 18 214 and 18 201 of the Act.

"COC Trigger" is defined in Section 12.5.1(b)(i).

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

"Company" is defined in the preamble hereto.

"Company Minimum Gain" has the meaning ascribed to the term "partnership minimum gain" set forth in Regulations Section 1.704-2(b)(2) and 1.704-2(d), substituting the term "Company" for the term "partnership" as the context requires.

"Competing Business" means, other than as set forth in Section 6.7(b)(vii), any business or Person that is engaged, directly or indirectly, anywhere in the world in one or more of the following businesses: cattle slaughter, beef processing, beef packaging, including for the case ready and portioned beef market, retail or wholesale marketing of beef, or hide tanning.

"Competing Facility" means, other than as set forth in Section 6.7(b)(vii), any cattle slaughtering facility, any beef processing or beef packaging facility, any retail or wholesale beef marketing operation or any hide tanning facility owned by a Competing Business anywhere in the world.

"Confidential Information" is defined in Section 9.6.1

"Control" (including the terms "Controlling", "Controlled by" and "under common Control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

"Conversion" is defined in the recitals hereto.

"Credit Documents" means (a) the First Amendment to Third Amended and Restated Credit Agreement, dated as of March 30, 2018, by and among the Company and the lenders and agents party thereto, amending the Third Amended and Restated Credit Agreement, dated as of June 9, 2017, by and among the Company and the lenders and agents party thereto, and all related documents and any refinancing thereof, and (b) any other loan document or arrangement and any refinancing thereof.

"Distribution" means cash or property (net of liabilities assumed or to which the property is subject) distributed to a Member in respect of the Member's Interest.

"Effective Date" is defined in the preamble hereto.

"Enforcement Notice" is defined in Section 12.5.1(b).

"Excess Cash", for any given year, means the amount equal to (a) the net operating profit after tax and Tax Distributions for such year, plus (b) all amortization, depreciation and other non-cash charges incurred during such year, less (c) all capital expenditures incurred during such year, less (d) all interest and required principal payments made during such year pursuant to the Credit Documents, plus or minus (e) without duplication, all changes in net working capital during such year, each as determined in accordance with GAAP.

"Fair Value" is defined in Section 12.5.3(c).

"First Amended Agreement" is defined in the recitals hereto.

"Fiscal Year" means the fiscal year of the Company, which shall be the Company's taxable year as determined under Regulations Section 1.441-1 or Section 1.441-2 and the Regulations under Section 706 of the Code, which is the taxable year ending on the last Saturday of December, or such other Fiscal Year as determined by the Board of Managers.

"GAAP" means generally accepted accounting principles in effect in the United States of America from time to time.

"Governance Rights" means the rights of a Member or with respect to an Interest, or benefits accorded to such Member or with respect to such Interest, pursuant to Section 3.6 (Additional Issuances of Units), Section 6.5 (Member Voting), Section 6.6 (Required Consents; Modification of Unit Terms), Section 7.3 (Number and Designation Rights), Section 7.4 (Voting and Act of the Board of Managers; Actions Requiring Jefferies Consent; Action without a Meeting), Article 9 (Books, Records, Accounting and Reports), Section 12.3 (Tag-Along Rights), and Section 12.5 (Liquidity Option); provided, however, that the obligations of such Member or with respect to such Interest in such designated sections or otherwise in this Agreement shall not be included in the definition of "Governance Rights."

"Guarantees" means the guarantees by the NBM Ultimate Parent and NBM with respect to the obligations of NBM in Section 12.5.

"Imputed Tax Underpayment" is defined in Section 5.9.

"Indemnified Persons" is defined in Section 14.1.

"Initiating Seller" is defined in Section 12.3.1, for the purposes of Section 12.3.

"Insufficient Rated Party" means any Person that is rated below "BBB-" by S&P or "Baa3" by Moody's, as such ratings are composed as of the 2018 Effective Date, or any equivalent successor rating.

"Interest" means, with respect to any Member as of any time, such Member's limited liability company interest in the Company, together with such Member's rights and obligations with respect thereto set forth in this Agreement.

"IRS Adjustment" is defined in Section 10.2.3.

"Jefferies" means Jefferies Financial Group Inc. (f/k/a Leucadia National Corporation) so long as it holds any Units and thereafter shall mean the Permitted Transferee of Jefferies holding the most Units of all the Permitted Transferees of Jefferies.

"Jefferies Manager" is defined in Section 7.3(a)(i).

"Klein" means Timothy M. Klein.

"Klein Separation Trigger" is defined in Section 12.5.1(b)(ii).

"Lock Up Period" means the period commencing on the 2018 Effective Date and ending on the 5th anniversary of the 2018 Effective Date.

"Lock Up Period Early Termination Date" means the date on which Marcos Antonio Molina dos Santos ceases to serve as a director (conselheiro) of NBM Ultimate Parent.

"Manager" means any Person that is a member of the Board of Managers.

"Member Consent" means the approval, voting by Units held by the Members, of the Members holding a majority of the outstanding Units, excluding Units owned and voting by NBM or Jefferies or of their respective Affiliates; provided that if a Member is disproportionately adversely affected by any action requiring Member Consent compared to other Members (other than NBM or Jefferies or of their respective Affiliates), such Member's consent shall also be required.

"Member Nonrecourse Debt" means "partner nonrecourse debt" as defined under Regulations Section 1.704-2(b)(4), substituting the term "Member" for the term "partner" as the context requires.

"Member Nonrecourse Debt Minimum Gain" means an amount, with respect to each "Member Nonrecourse Debt" equal to the Company Minimum Gain that would result if the Member's Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).

"Member Nonrecourse Deductions" means "partner nonrecourse deductions" as defined in Regulations Section 1.704-2(i)(1) and (2), substituting the term "Member" for the term "partner" as the context requires.

"Members" means the Persons listed as members on Exhibit A and any other Person that both acquires an Interest in the Company and is admitted to the Company as a Member.

"Minority Members" is defined in the Preamble hereto.

"Moody's" means Moody's Investors Service, Inc.

"Named Competitors" means those Persons identified in the letter agreement, dated as of June 5, 2018 among NBM and the Minority Members.

"NBM" is defined in the preamble hereto.

"NBM Change of Control" means any Person, other than Marcos Antonio Molina dos Santos, Marcia Aparecida Pascoal Marçal dos Santos, their respective sons and daughters, or any of their respective heirs or any affiliate of any of the foregoing persons, becoming the direct or indirect owner of a majority of the voting stock of NBM or NBM Ultimate Parent.

"NBM Manager" is defined in Section 7.3(a)(iii).

"NBM Ultimate Parent" means Marfrig Global Foods S.A., a Brazilian corporation (sociedade por ações).

"NBPCo" is defined in the introductory paragraph.

"Net Profit" and "Net Loss" are defined in Section 5.6.1.

"New Kleinco" is defined in the preamble hereto.

"Non-Participating Member" is defined in Section 3.6(b).

"Nonrecourse Deductions" has the meaning set forth in Regulations Sections 1.704- 2(b)(1) and 1.704-2(c).

"Nonrecourse Liability" has the meaning set forth in Regulations Section 1.704-2(b)(3).

"Notice of Proposed Sale" is defined in Section 12.3.2.

"Notice of Sale" is defined in Section 12.1.1.

"Offered Units" is defined in Section 12.1.1.

"Offset Notice" is defined in Section 5.10.1.

"Ohio Beef" is defined in the recitals hereto.

"Original Agreement" is defined in the recitals hereto.

"Ownership Interest" means any capital stock, share, partnership interest, membership interest, unit of participation, joint venture interest of any kind or other similar interest (however designated) in any Person and any option, warrant, purchase right, conversion right, exchange rights or other contractual obligation which would entitle any Person to acquire any such interest in such Person or otherwise entitle any Person to share in the equity, profit, earnings, losses or gains of such Person (including stock appreciation, phantom stock, profit participation or other similar rights).

"Partnership" is defined in the recitals hereto.

"Partnership Act" is defined in the recitals hereto.

"Partnership Representative" is defined in Section 10.2.1.

"Partnership Tax Audit Rules" means Section 6221 through 6241 of the Code, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder or successor provisions and any similar provision of state or local tax laws.

"Pay Date" is defined in Section 12.5.4.

"Pennsylvania LLC" is defined in the recitals hereto.

"Percentage Interest" of a Member as of a particular time means such Member's percentage ownership of the Company as designated on Exhibit A (as amended in conformance with the procedures in Section 3.1).

"Permitted Financing Pledge" means a direct or indirect pledge or grant of security interest over the Units owned by NBM or its Permitted Transferee that relates to any financing undertaken by NBM to facilitate the purchase of the Units by NBM (including any amendments, restatements, refinancings and replacements thereof).

"Permitted Transferee" is defined in Section 11.2.

"Person" means an individual, partnership, joint venture, association, corporation, trust, estate, limited liability company, limited liability partnership, unincorporated entity of any kind, governmental entity, or any other legal entity, including any Member.

"Proposed Transferee" means the "Proposed Transferee" as used and defined in Section 12.2.1 or Section 12.3.1, as applicable.

"Proxy Manager" is defined in Section 7.12.2.

"Put Base Amount" means the Aggregate Units owned by the applicable Minority Member as of the 2018 Effective Date.

"Put/Call Date" means a Put Date or a Call Date, as applicable.

"Put/Call Member(s)" means a Put Member(s) or a Call Member(s), as applicable.

"Put/Call Units" means Put Units or Call Units, as applicable.

"Put Date" is defined in Section 12.5.1(b)(ii).

"Put Election Period" is defined in Section 12.5.1(b)(ii).

"Put Fraction" means one third, unless an NBM Change of Control shall have occurred, in which case it shall be equal to one.

"Put Member(s)" is defined in Section 12.5.1(a).

"Put Notice" is defined in Section 12.5.1(a).

"Put Units" is defined in Section 12.5.1(a).

"Putting Member" is defined in Section 12.5.1(a).

"Regulation D" means Regulation D under the Securities Act.

"Regulations" means the Treasury regulations, including temporary regulations, promulgated under the Code.

"Regulatory Allocations" is defined in Section 5.7.

"Requisite Percentage" means, with respect to Jefferies, that Jefferies continues to own 10.3905% of the total outstanding Units.

"Resolving Firm" is defined in Section 12.5.3(b)(ii).

"Reviewed Year" means the Company's taxable year to which the item being adjusted relates.

"ROFR Final Transfer Date" is defined in Section 12.2.3.

"ROFR Notice of Purchase" is defined in Section 12.2.1.

"ROFR Notice of Sale" is defined in Section 12.2.1.

"ROFR Offer Period" is defined in Section 12.2.1.

"ROFR Offered Units" is defined in Section 12.2.1.

"ROFR Offeree" is defined in Section 12.2.1.

"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.

"Sale Percentage" means with respect to the Initiating Seller and each Selling Member, an amount equal to the product of (i) the quotient obtained by dividing (A) the number of Units owned by the Initiating Seller or such Selling Member, as applicable, by (B) the aggregate number of Units owned by the Initiating Seller and all Selling Members, collectively, and (ii) 100, expressed as a percentage.

"Second Amended Agreement" is defined in the recitals hereto.

"Securities Act" means the Securities Act of 1933, as amended, and the rules, regulations and interpretations promulgated pursuant thereto.

"Selling Member" means (a) for purposes of Section 12.1, the "Selling Member" as defined in Section 12.1.1, (b) for purposes of Section 12.2, the "Selling Member" as defined in Section 12.2.1, or (c) for purposes of Section 12.3, the "Selling Member" as defined in Section 12.3.1.

"Senior Management Team" means at any particular time the Chief Executive Officer and President of the Company.

"Similar Competitor" means any Person other than the Named Competitors that operates a Competing Business of a type and on a scale similar to that of the Named Competitors.

"Subsidiary" means, with respect to any Person, any other entity which is Controlled by such Person.

"Succession Plan" means a plan approved by the Board of Managers for the orderly succession of the Senior Management Team.

"Tag-Along Notice" is defined in Section 12.3.3.

"Tag-Along Period" is defined in Section 12.3.3.

"Tag-Along Right" is defined in Section 12.3.1.

"Tag-Along Sale" is defined in Section 12.3.1.

"Tax Distribution" is defined in Section 5.2.1.

"Tax Matters Member" is defined in Section 10.1.1.

"TEFRA Rules" means Section 6221 through 6255 of the Code in effect prior to amendment by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder and any similar provision of state or local tax laws.

"Third Amended Agreement" is defined in the recitals hereto.

"Transfer" means to give, sell, assign, pledge, encumber, hypothecate, grant a security interest in or otherwise dispose of or convey in any manner, directly or indirectly, including by operation of law or change of ownership; provided that a change of ownership of Jefferies or the NBM Ultimate Parent that is not designed by the applicable party to avoid the Transfer restrictions hereunder will not constitute a Transfer.

"Trigger" means the Annual Trigger, the COC Trigger, the Cattle Agreement Trigger or the Klein Separation Trigger.

"Units" is defined in Section 3.2.

"Unsatisfied Amount" is defined in Section 5.10.1.

"USPB" is defined in the preamble hereto.

"USPB Manager" is defined in Section 7.3(a)(ii).

"Valuator" is defined in Section 12.5.3(b).

"Withholding Indemnified Parties" is defined in Section 5.4.

2. Formation and Purpose

2.1 Conversion; Formation. The Company was established as a limited liability company in accordance with the Act by the filing of the Certificate of Conversion and Certificate of Formation of the Company with the Delaware Secretary of State pursuant to Section 18-214 of the Act. The rights and liabilities of the Members shall be determined pursuant to the Act and this Agreement. To the extent that the rights or obligations of any Member are different by reason of any provision of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control.

2.2 Name. The name of the Company is "National Beef Packing Company, LLC". The business of the Company may be conducted under that name or, upon compliance with applicable laws, any other name that the Board of Managers deems appropriate. The Board of Managers shall file, or shall cause to be filed, any fictitious name certificates and similar filings, and any amendments thereto, that the Board of Managers considers appropriate.

2.3 Registered Office/Agent. The registered office required to be maintained by the Company in the State of Delaware pursuant to the Act shall be c/o The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The name and address of the registered agent of the Company pursuant to the Act shall be The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The Company may, upon compliance with the applicable provisions of the Act, change its registered office or registered agent from time to time in the discretion of the Board of Managers.

2.4 Term. The term of the Company shall continue indefinitely unless sooner terminated as provided herein. The existence of the Company as a separate legal entity shall continue until the cancellation of the Certificate of Formation as provided in the Act.

2.5 Purpose. The Company is formed for the purpose of, and the nature of the business to be conducted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the Act and engaging in any activities necessary, convenient or incidental thereto.

2.6 Powers. Without limiting the generality of Section 2.5, the Company shall have the power and authority to take any actions necessary, convenient or incidental to or for the furtherance of the purposes set forth in Section 2.5, including without limitation the power:

(a) To conduct its business, carry on its operations and exercise the powers granted to a limited liability company by the Act in any country, state, territory, district or other jurisdiction, whether domestic or foreign;

(b) To acquire by purchase, lease, contribution of property or otherwise, own, hold, operate, maintain, finance, improve, lease, sell, convey, mortgage, transfer, demolish or dispose of any real or personal property;

(c) To negotiate, enter into, renegotiate, extend, renew, terminate, modify, amend, waive, execute, perform and carry out and take any other action with respect to contracts or agreements of any kind, and any leases, licenses, guarantees and other contracts for the benefit of or with any Member or any Affiliate of any Member, without regard to whether such contracts may be deemed necessary, convenient or incidental to the accomplishment of the purpose of the Company;

(d) To purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign corporations, associations, general or limited partnerships, trusts, limited liability companies, individuals or other Persons, or direct or indirect obligations of the United States or any government, state, territory, governmental district or municipality or any instrumentality of any of them;

(e) To lend money, to invest and reinvest its funds, and to accept real and personal property for the payment of funds so loaned or invested;

(f) To borrow money and issue evidence of indebtedness, and to secure the same by a mortgage, pledge, security interest or other lien on the assets of the Company;

(g) To pay, collect, compromise, litigate, arbitrate or otherwise adjust or settle any other claims or demands of or against the Company or to hold such proceeds against the payment of contingent liabilities;

(h) To sue and be sued, defend and participate in administrative or other proceedings in its name;

(i) To appoint employees, officers, agents, consultants and representatives of the Company, and define their duties and fix their compensation;

(j) To indemnify any Person in accordance with the Act and this Agreement;

(k) To cease its activities and cancel its Certificate of Formation; and

(l) To make, execute, acknowledge and file any documents or instruments necessary, convenient or incidental to the accomplishment of the purpose of the Company.

2.7 Certificates. The officers of the Company and such other Persons as may be designated from time to time by the Board of Managers are hereby designated as authorized persons, within the meaning of the Act, to execute, deliver and file any amendments or restatements of the Certificate of Formation or any certificate of cancellation of the Certificate of Formation and any other certificates and any amendments or restatements thereof necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

2.8 Principal Office. The principal executive office of the Company shall be located at such place as the Board of Managers shall establish, and the Board of Managers may from time to time change the location of the principal executive office of the Company to any other place within or without the State of Delaware. The Board of Managers may establish and maintain such additional offices and places of business of the Company, either within or without the State of Delaware, as it deems appropriate. The records required to be maintained by the Act shall be maintained at one of the Company's principal offices, except as required by the Act.

2.9 No State-Law Partnership. The Members intend that the Company shall not constitute or be treated as a partnership (including a limited partnership) or joint venture, and that no Member or officer shall be a partner or joint venturer of any other Member or officer, for any purposes other than federal, state and local income tax purposes, and this Agreement shall not be construed to the contrary.

3. MEMBERSHIP, CAPITAL CONTRIBUTIONS AND UNITS

3.1 Members. The Members of the Company shall be listed on Exhibit A, as from time to time amended and supplemented in accordance with this Agreement. Each Member shall be treated as having contributed to the Company the amounts indicated on Exhibit A as such Member's aggregate Capital Contribution (which amounts shall be the Capital Accounts with respect to such Units) and shall be the holder of the number of Units set forth in Exhibit A Exhibit A shall be amended from time to time so that it sets forth, the then-current list of Members, the total amount of Capital Contributions made by each such Member, the number of Units held by such Member, and the Member's Percentage Interest.

3.2 Member Interests and Units. The Interests of the Members of the Company shall consist of one class of units (the "Units").

3.3 Additional Members and Units. Subject to Sections 3.6 and 7.4.2 hereof, the Board of Managers may issue Units and admit Persons as Members in exchange for such contributions to capital (including commitments to make contributions to capital) or such other consideration (including past or future services) and on such terms and conditions (including in the case of Units issued to employees and consultants such vesting and forfeiture provisions) as the Board of Managers determines to be appropriate. If additional Units are subsequently issued by the Company, the Capital Account (if any) with respect to those Units as of the date of issuance and the Capital Contributions (if any) that shall be deemed to be made by the Member receiving such Units as of the date of issuance shall be set forth in the agreement pursuant to which the additional Units are issued. Promptly following the issuance of Units, the Board of Managers shall cause the books and records of the Company, and an amended Exhibit A hereto, to reflect the number of Units issued, any Members or additional Members holding such Units and in the case of Units issued other than in connection with the performance of services, the Capital Contribution per Unit, and the Company shall promptly provide the amended Exhibit A to each Member. Upon the receipt of approvals as required under this Agreement, execution of this Agreement or a counterpart of this Agreement, together with any other documents or instruments required by the Board of Managers in connection therewith, and the making of the Capital Contribution (if any) specified to be made at such time, a Person shall be admitted to the Company as a Member of the Company.

3.4 Capital Contributions. Each Member's Capital Contribution, if any, whether in cash or in-kind, and the number of Units issued to such Member shall be as set forth in Exhibit A Any Member making an in-kind Capital Contribution agrees from time to time to do such further acts and execute such further documents as the Board of Managers may direct to perfect the Company's interest in such in-kind Capital Contribution.

3.5 Termination of Governance Rights. Notwithstanding any other provision of this Agreement, if, without the Board of Managers' consent, at any time after the Effective Date, a Competing Business shall acquire (whether effected by merger, purchase of assets, lease, equity exchange or otherwise) Control of a Member (or a Member shall Control, be Controlled by or under common Control with a Competing Business) or any Units from a Member, then upon the occurrence of such event any Governance Rights of such Member or associated with such Units shall automatically terminate, subject to Section 11.8; provided that this Section 3.5 shall not apply to Jefferies or NBM or any of their respective Permitted Transferees (or an Assignee in a Transfer in connection with a Permitted Financing Pledge) and shall not be construed to prohibit the transactions by NBPCo in Sections 6.8 and 6.9.

3.6 Additional Issuances of Units

(a) The Board of Managers shall not offer to sell or otherwise issue additional Units to any Person, including to any other Member, unless: (i) (x) the Board's resolutions authorizing the sale or issuance of such additional Units describe in reasonable detail the Company's business purpose for undertaking, and the terms of, such proposed issuance or (y) the Board shall have determined that such issuance of Units is, in their good faith judgment, advisable for the Company; and (ii) the Board of Managers shall have complied with this Section 3.6 and, if applicable, Section 7.4.2.

(b) Prior to offering to sell or otherwise issue additional Units, the Board of Managers shall first offer to the Members the opportunity to purchase such offered Units on a pro rata basis in accordance with their Percentage Interests at the same price, and on the same terms and conditions, as the Board of Managers is prepared, or proposes, to offer or issue such additional Units to any other Member or to any Person who, prior to such sale or issuance, is not a Member of the Company. The Members shall have a period of 30 days to accept such offer (or, in the case of a sale or issuance to any Person who is not, prior to such sale or issuance, a Member of the Company, 10 days). In the event any Member (a "Non-Participating Member") does not purchase all of the additional Units offered to such Member pursuant to the first sentence of this Section 3.6(b), the Board of Managers shall offer the Members that elect to purchase their entire pro rata share of the additional Units offered to such Members pursuant to the first sentence of this Section 3.6(b) the right to purchase the additional Units not purchased by the Non-Participating Member on a pro rata basis in accordance with their respective Percentage Interests (or in any other manner they may unanimously agree upon in writing), which offer the applicable Members may accept by providing notice of such acceptance to the Company within five days after such offer. This Section 3.6(b) may not be amended without the consent of each Member that would be adversely impacted by such amendment.

(c) Upon expiration of the periods described in Section 3.6(b), the Company shall be entitled to offer, issue or sell such additional Units that the Members have not elected to purchase during the 180 days following such expiration on terms and conditions not materially more favorable to the purchasers thereof than those offered to the Members pursuant to Section 3.6(b) Any additional Units proposed to be offered, issued or sold by the Company after such 180-day period, or offered, issued or sold by the Company during such 180-day period on terms or conditions materially more favorable than those offered to the Members pursuant to Section 3.6(b), must be reoffered to the Members in accordance with the terms of this Section 3.6 prior to any such offer, issuance or sale.

(d) The provisions of this Section 3.6 shall not apply to: (i) Units that are issued in order to acquire the assets or business of another Person; or (ii) Units that are issued to employees or consultants pursuant to compensation plans or agreements approved by the Board of Managers.

4. CAPITAL ACCOUNTS

4.1 Allocations. The Net Profits and Net Loss of the Company and any items of income, gain, deduction or loss that are specially allocated in any Fiscal Year or other fiscal period shall be allocated among the Members as provided in Article 5.

4.2 Capital Accounts. A separate account (each a "Capital Account") shall be established and maintained on the books of the Company for each Member which:

(a) shall be increased by (i) the amount of cash and the fair market value of any other property contributed by such Member to the Company as a Capital Contribution (net of liabilities secured by such property or that the Company assumes or takes the property subject to) and (ii) such Member's distributive share of the Net Profit of the Company, and any items in the nature of income or gain that are specially allocated to such Member pursuant to Article 5 or other provisions of the Agreement,

(b) shall be reduced by (i) the amount of cash and the fair market value of any other property distributed to such Member (net of liabilities secured by such property or that the Member assumes or takes the property subject to) and (ii) such Member's distributive share of the Net Loss of the Company and any items in the nature of expenses or losses that are specially allocated to such Member pursuant to Article 5 or other provisions of the Agreement, and

(c) shall take into account in determining the amount of any liability for purposes of clauses (a) and (b) above, Section 752(c) and any other applicable provisions of the Code and Regulations.

It is the intention of the Members that the Capital Accounts of the Company be maintained in accordance with the provisions of Section 704(b) of the Code and the Regulations thereunder and that this Agreement be interpreted consistently therewith. No Member shall have an obligation to the Company or to any other Member to restore any negative balance in the Capital Account of such Member.

4.3 Revaluations of Assets and Capital Account Adjustments. Unless otherwise determined by the Board of Managers, (i) immediately preceding the issuance of additional Units in exchange for cash, property or services to a new or existing Member, (ii) upon the redemption of the Interest of a Member or a portion thereof, (iii) upon the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) and (iv) at such other times as are necessary or advisable, as reasonably determined by the Board of Managers, in order to comply with Regulations Sections 1.704-1(b) and 1.704-2, the then-prevailing Asset Values of the Company shall be adjusted to equal their respective gross fair market values, as determined in good faith by the Board of Managers, and any increase in the net equity value of the Company (Asset Values less liabilities) shall be credited to the Capital Accounts of the Members in the same manner as Net Profits are credited under Section 5.6.2 (or any decrease in the net equity value of the Company shall be charged in the same manner as Net Losses are charged under Section 5.6.2). Accordingly, as of the date of (i), (ii), (iii) or (iv), as applicable, the Capital Accounts of Members will reflect both realized and unrealized gains and losses through such date and the net fair market value of the equity of the Company as of such date.

4.4 Additional Capital Account Adjustments. Any income of the Company that is exempt from federal income tax shall be credited to the Capital Accounts of the Members in the same manner as Net Profits are credited under Section 5.6.2 when such income is realized. Any expenses or expenditures of the Company which may neither be deducted nor capitalized for federal income tax purposes (or are so treated for federal income tax purposes) shall be charged to the Capital Accounts of the Members in the same manner as Net Losses are charged under Section 5.6.2 If the Company is subject to an election under Section 754 of the Code to provide a special basis adjustment upon the transfer of an Interest in the Company or the distribution of property by the Company in accordance with Code Section 734(b) or 743(b), Capital Accounts shall be adjusted to the limited extent required by the Regulations under Section 704 of the Code following such transfer or distribution, as reasonably determined by the Board of Managers.

4.5 Additional Capital Account Provisions. No Member shall have the right to demand a return of all or any part of such Member's Capital Contributions. Any return of the Capital Contributions of any Member shall be made solely from the assets of the Company and only in accordance with the terms of this Agreement. No interest shall be paid to any Member with respect to such Member's Capital Contributions or Capital Account. In the event that all or a portion of the Units of a Member are transferred in accordance with this Agreement, the transferee of such Units shall also succeed to all or the relevant portion of the Capital Account of the transferor. Units held by a Member may not be transferred independently of the Interest to which the Units relate.

5. DISTRIBUTIONS AND ALLOCATIONS OF PROFIT AND LOSS

5.1 Board of Managers Determination; Annual Distribution. The Board of Managers shall determine the timing and the aggregate amount of any Distributions to Members; provided, however, that:

5.1.1 The Company shall make a Tax Distribution not later than the dates specified in Section 5.2.1, unless the Members each consent otherwise.

5.1.2 The Board of Managers may make any additional Distributions to the Members, pro rata in accordance with each Member's Percentage Interest (except as set forth in Section 12.5 hereof), in such aggregate amounts and on such occasions as the Board of Managers may determine; provided that the Board of Managers shall distribute all Excess Cash, to the extent not previously distributed, within 60 days after the end of each fiscal year (subject to such Excess Cash being distributable in accordance with any contractual restrictions under the Credit Documents and applicable law). Except as set forth in Section 12.5, no distributions shall be made by the Board of Managers to Members other than pro rata in accordance with each Member's Percentage Interest.

5.1.3 Except as set forth in Section 12.5, but notwithstanding any other provision of this Agreement or the provisions of the Act, no Person shall have any claim or right of enforcement with respect to or arising out of a Tax Distribution (whether under Article 5 or otherwise) against (i) any Manager, (ii) any Member or (iii) any Affiliate of a Manager or a Member, and such Person's sole recourse with respect to or arising out of a Tax Distribution shall be against the Company. For the avoidance of doubt, except for the rights of the Members pursuant to Article 12, which are not being waived by this sentence, if and to the extent any such claim or right exists or may be deemed to exist, each Manager, Member, and any of their respective Affiliates (and any Person claiming by or through any such member of the Board of Managers, Member or Affiliate) hereby waives any such claim or right against any Manager, any Member and each Affiliate of any such member of the Board of Managers or Member, as the case may be. For purposes of this Section 5.1.3, "Affiliates" of a Person shall exclude the Company and its Subsidiaries.

5.2 Distributions. Distributions from the Company to its Members shall be made only after allocating the Net Profit or Net Loss of the Company through the date as of which the Distribution is being charged to the Capital Accounts of the Members. Such Distributions shall be charged to the Capital Accounts of the Members and made in the following order (except that no Member shall be entitled to receive a Distribution that would create or increase a deficit balance in such Member's Capital Account unless the Capital Accounts of all Members have previously been reduced to zero):

5.2.1 Tax Distributions. Except as set forth in Section 12.5, the Company shall distribute to all Members prior to the 10th day before the due date of the federal quarterly estimated tax payments an aggregate amount equal to the Base Tax Rate times the allocations of taxable income made or expected to be made pursuant to this Article 5 for such quarter (the "Tax Distribution"). The Board of Managers shall determine the amount to be distributed to the Members pursuant to this Section 5.2.1 in its reasonable discretion based on such reasonable assumptions as the Board of Managers determines in good faith to be appropriate, including by making reasonable adjustments to each quarter's Tax Distributions to take into account the extent to which Tax Distributions paid in prior quarters are less or more than the amount required to take into account actual taxable income for such quarters and estimated taxable income for the current quarter. Except as set forth in Section 12.5, Tax Distributions shall be divided among the Members pro rata in accordance with their Percentage Interests; provided that if there is a change in Percentage Interest of any Member during any taxable period, such allocations shall be based on allocations of taxable income during each such portion of the taxable period, as determined under Section 5.6.1(d) The "Base Tax Rate" shall be equal to 54%. The Board of Managers shall consider adjusting the Base Tax Rate to be above 54% if requested by a Member upon a determination that the federal and state tax rates affecting the Member (or the Member's taxpayers) have increased by more than 1%; provided, however, the Board of Managers shall have no obligation to increase the Base Tax Rate. For purposes of computing taxable income under this Section 5.2.1, taxable income shall be determined without taking account the effect of any benefit to a Member under Sections 199A, 743(b), or 734(b) of the Code, but after taking into account the effect of any allocations pursuant to Section 704(c) of the Code. All Tax Distributions shall be treated as an advance against, and shall be taken into account in determining, other distributions pursuant to Section 5.2.2 or Section 13.3; provided, that the Tax Distribution made prior to the execution of this Agreement shall not be so treated as an advance against, or taken into account in determining, other distributions pursuant to Section 5.2.2 or Section 13.3.

5.2.2 Other Distributions. Except as set forth in Section 12.5, all other Distributions (including the annual distribution of Excess Cash pursuant to Section 5.1.2) shall be allocated among the Members pro rata in accordance with their Percentage Interests at the time of such Distributions.

5.3 No Violation. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a Distribution to any Member on account of such Member's Interest in the Company if such Distribution would violate any contractual restriction binding on the Company under the Credit Documents, Section 18-607 of the Act or other applicable law.

5.4 Withholdings. Subject to the terms of Section 12.5, the Board of Managers is authorized to withhold from Distributions to Members, or with respect to allocations to Members and in each case to pay over to the appropriate federal, state, local or foreign government any amounts required by law to be so withheld. All amounts withheld pursuant to the Code or any federal, state, local or foreign tax law with respect to any payment, distribution or allocation to the Company shall be treated as amounts paid to the Company and each Member shall be treated as having received a distribution pursuant to Section 5.2 hereof equal to the portion of the withholding tax allocable to such Member, as determined by the Board of Managers. Any taxes withheld on a payment to the Company or a payment by the Company to a Member pursuant to this Section 5.4 shall be treated as if distributed to the relevant Member to the extent that an amount equal to such withheld taxes would then be distributable to such Member, and, to the extent in excess of such distributable amounts, as a demand loan payable by the Member to the Company with interest at the prime rate in effect from time to time plus 2%, compounded annually. The Board of Managers may, in its sole discretion, either demand payment of the principal and accrued interest on such demand loan at any time, and enforce payment thereof by legal process, or withhold from one or more distributions to a Member amounts sufficient to satisfy such Member's obligations under any demand loan payable to the Company. In the event that the Company receives a refund of taxes previously withheld by a third party from one or more payments to the Company, the economic benefit of such refund shall be apportioned among the Members in a manner reasonably determined by the Board of Managers to offset the prior operation of this Section 5.4 in respect of such withheld taxes.

Promptly upon request, each Member shall provide the Company with any information related to such Member that is necessary (a) to allow the Company to comply with any tax reporting, tax withholding, or tax payment obligations of the Company or (b) to establish the Company's legal entitlement to an exemption from, or reduction of, or refund or credit of withholding tax. As a security for any withholding tax or other liability or obligation to which the Company may be subject as a result of any act or status of any Member, or to which the Company may become subject with respect to the Interest of any Member, the Company shall have (and each Member hereby grants to the Company) a security interest in all distributable assets of the Company distributable to such Member to the extent of the amount of such withholding tax or other liability or obligation. Neither the Company nor the Board of Managers shall be liable for any excess taxes withheld in respect of any Member's Interest, and, in the event of overwithholding, a Member's sole recourse shall be to apply for a refund from the appropriate governmental authority. If the Company, the Board of Managers, any Member in such Member's capacity acting as the Tax Matters Member or the Partnership Representative (as applicable), or any of their respective Affiliates, or any of their respective officers, directors, employees, managers, members and, as determined by the Board of Managers in its sole and absolute discretion, consultants or agents (the "Withholding Indemnified Parties" and each a "Withholding Indemnified Party"), becomes liable as a result of failure to withhold and remit taxes in respect of any Member, then, in addition to, and without limiting, any indemnities for which such Member may be liable under this Agreement, unless otherwise agreed by the Board of Managers in writing, such Member shall, to the fullest extent permitted by law, indemnify and hold harmless the Withholding Indemnified Parties, in respect of all taxes, including interest and penalties, and any expenses incurred in any examination, determination, resolution and payment of such liability, except with respect to any interest, penalties or expenses which arise as a result of any act or omission with respect to which a court of competent jurisdiction has issued a final, nonappealable judgment that such applicable Withholding Indemnified Party was grossly negligent or engaged in willful misconduct or fraud. The provisions contained in this Section 5.4 shall survive the termination of the Company and the Transfer of any Interest.

5.5 Property Distributions and Installment Sales. If any assets of the Company shall be distributed in kind pursuant to this Article 5, such assets shall be distributed to the Members entitled thereto in the same proportions as the Members would have been entitled to cash Distributions. The amount by which the fair market value of any property to be distributed in kind to the Members exceeds or is less than the then prevailing Asset Value of such property shall, to the extent not otherwise recognized by the Company, be taken into account in determining Net Profit and Net Loss and determining the Capital Accounts of the Members as if such property had been sold at its fair market value immediately prior to such Distribution. If any assets are sold in transactions in which, by reason of Section 453 of the Code, gain is realized but not recognized, such gain shall be taken into account when realized in computing gain or loss of the Company for purposes of allocation of Net Profit or Net Loss under this Article 5 and, if such sales shall involve substantially all the assets of the Company, the Company shall be deemed to have been dissolved and terminated notwithstanding any election by the Members to continue the Company for purposes of collecting the proceeds of such sales.

5.6 Net Profit or Net Loss

5.6.1 The "Net Profit" or "Net Loss" of the Company for each Fiscal Year or relevant part thereof shall mean the Company's taxable income or loss for federal income tax purposes for such period (including all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code) with the following adjustments:

(a) Gain or loss attributable to the disposition of property of the Company with an Asset Value different from the adjusted basis of such property for federal income tax purposes shall be computed with respect to the Asset Value of such property, and any tax gain or loss not included in Net Profit or Net Loss shall be taken into account and allocated for federal income tax purposes among the Members pursuant to Section 5.8.

(b) Depreciation, amortization or cost recovery deductions with respect to any property with an Asset Value that differs from its adjusted basis for federal income tax purposes shall be computed in accordance with Asset Value, and any depreciation allowable for federal income tax purposes shall be allocated in accordance with Section 5.8.

(c) Any items that are required to be allocated pursuant to Section 5.7 shall not be taken into account in determining Net Profit or Net Loss.

(d) In the event of a variation of Percentage Interests during a Fiscal Year, whether as a result of a Transfer of Interests or new issuance or repurchase of Units or otherwise, Net Profit or Net Loss and any other items of income, gain, loss, deduction and credit of the Company shall be allocated to the portions of such Fiscal Year preceding and following such variation based on an interim closing of the books, except where otherwise required by Section 706 of the Code and the Regulations thereunder.

5.6.2 General Allocations.

(a) Hypothetical Liquidation The items of income, expense, gain and loss of the Company comprising Net Profit or Net Loss for a Fiscal Year shall be allocated among the Members that were Members during such Fiscal Year in a manner that will, as nearly as possible, cause the Capital Account balance of each Member at the end of such Fiscal Year to equal the excess (which may be negative) of:

(i) the hypothetical distribution (if any) that such Member would receive if, on the last day of the Fiscal Year, (x) all Company assets, including cash, were sold for cash equal to their then-prevailing Asset Values, taking into account any adjustments thereto for such Fiscal Year, (y) all Company liabilities were satisfied in cash according to their terms (limited, with respect to each Nonrecourse Liability, to the then-prevailing Asset Value of the assets securing such liability) and (z) the net proceeds thereof (after satisfaction of such liabilities) were distributed in full pursuant to Section 13.3 hereof; over

(ii) the sum of (x) the amount, if any, which such Member is obligated to contribute to the capital of the Company, (y) such Member's share of the Company Minimum Gain determined pursuant to Regulations Section 1.704-2(g), and (z) such Member's Member Nonrecourse Debt Minimum Gain determined pursuant to Regulations Section 1.704-2(i)(5), all computed immediately prior to the hypothetical sale described in Section 5.6.2(a)(i) above.

For purposes of the foregoing hypothetical sale described in Section 5.6.2(a)(i) above, all assets and liabilities of any entity that is wholly-owned by the Company and disregarded as an entity separate from the Company for federal income tax purposes shall be treated as assets and liabilities of the Company.

(b) Loss Limitation. Notwithstanding anything to the contrary in this Section 5.6.2(b), the amount of items of Company expense and loss allocated pursuant to this Section 5.6.2(b) to any Member shall not exceed the maximum amount of such items that can be so allocated without causing such Member to have an Adjusted Capital Account Deficit at the end of any Fiscal Year, unless each Member would have an Adjusted Capital Account Deficit. All such items in excess of the limitation set forth in this Section 5.6.2(b) shall be allocated first, to Members who would not have an Adjusted Capital Account Deficit, pro rata, in proportion to their Capital Account balances, adjusted as provided in clauses (i) and (ii) of the definition of Adjusted Capital Account Deficit, until no Member would be entitled to any further allocation, and thereafter, to all Members, pro rata, in proportion to their Percentage Interests.

5.6.3 Interpretation The Members intend for the allocation provisions set forth in this Agreement to comply with Section 704(b) of the Code and the Regulations thereunder and to appropriately reflect the Members' rights to Distributions as set forth in Sections 5.2 and 13.3, and the Board of Managers shall interpret the provisions in accordance with such intent and make such adjustments as may be necessary to effect such intent; provided, however, that any such interpretation or adjustment shall affect only Capital Accounts and allocations and shall not affect any Member's rights to Distributions as set forth in this Agreement.

5.7 Regulatory Allocations. Although the Members do not anticipate that events will arise that will require application of this Section 5.7, provisions governing the allocation of taxable income, gain, loss, deduction and credit (and items thereof) are included in this Agreement as may be necessary to provide that the Company's allocation provisions contain a so-called "Qualified Income Offset" within the meaning of Regulation Section 1.704-1(b)(2)(ii)(d) and comply with all provisions relating to the allocation of (i) Company Minimum Gain and Member Nonrecourse Debt Minimum Gain and the chargeback thereof as set forth in the Regulations under Section 704(b) of the Code and (ii) Nonrecourse Deductions and Member Nonrecourse Deductions (clauses (i) and (ii) together, the "Regulatory Allocations"); provided, however, that the Members intend that all Regulatory Allocations that may be required shall be offset by other Regulatory Allocations or special allocations of items so that each Member's share of the Net Profit, Net Loss and capital of the Company will be the same as it would have been had the events requiring the Regulatory Allocations not occurred. For this purpose, the Board of Managers, based on the advice of the Company's auditors or tax counsel, is hereby authorized to make such special curative allocations of tax items as may be necessary to minimize or eliminate any economic distortions that may result from any required Regulatory Allocations.

5.8 Tax Allocations. Code Section 704(c) and Unrealized Appreciation or Depreciation.

5.8.1 Contributed Assets In accordance with Section 704(c) of the Code, income, gain, loss and deduction with respect to any property contributed to the Company with an adjusted basis for federal income tax purposes different from the initial Asset Value at which such property was accepted by the Company shall, solely for tax purposes, be allocated among the Members so as to take into account such difference in the manner required by Section 704(c) of the Code and the applicable Regulations.

5.8.2 Revalued Assets If upon the acquisition of additional Units in the Company by a new or existing Member the Asset Value of any the assets of the Company is adjusted pursuant to Section 4.3, subsequent allocations of income, gain, loss and deduction with respect to such assets shall, solely for tax purposes, be allocated among the Members so as to take into account such adjustment in the same manner as under Section 704(c) of the Code and the applicable Regulations.

5.8.3 Elections and Limitations The allocations required by this Section 5.8 are solely for purposes of federal, state and local income taxes and shall not affect the allocation of Net Profits or Net Losses as between Members or any Member's Capital Account. All tax allocations required by this Section 5.8 shall be made using the "traditional method" that is described in the Regulations Section 1.704-3.

5.8.4 Allocations Except as noted above, all items of income, deduction and loss shall be allocated for federal, state and local income tax purposes in the same manner as such items are allocated for purposes of calculating Net Profits and Net Losses.

5.9 Imputed Tax Underpayment. To the extent there is an adjustment by the IRS or other taxing authority to an item of income, gain, loss, deduction or credit of the Company, or an item of income, gain, loss, deduction or credit of any entity that is treated as a partnership for federal income tax purposes in which the Company holds an ownership interest that is allocable to the Company (or, in each case, an adjustment to any Member's distributive share thereof), the Partnership Representative shall reallocate the adjusted items among each Member or former Member in accordance with the final resolution of such audit adjustment. Notwithstanding any other provision of this Agreement, each Member (or former Member) shall bear any tax, interest, penalty or "imputed underpayment" under Code Section 6225 (if applicable) or similar amount resulting from the final resolution of any audit adjustment (the "Imputed Tax Underpayment") to the extent such Imputed Tax Underpayment is attributable to such Member (or former Member) or results from the status of such Member (or such former Member) as a Member in the Reviewed Year.

5.10 Right to Offset.

5.10.1 Subject to the terms of this Agreement and the 2019 Purchase Agreement, at any time that Ohio Beef or any Buyer Indemnitee is entitled to receive a payment from NBM or the NBM Ultimate Parent pursuant to the 2019 Purchase Agreement, including pursuant to Section 7.9 and Section 8.2 thereof, and NBM or the NBM Ultimate Parent has not paid within 30 days of notice thereof by the Company all or any portion of such payment to Ohio Beef or a Buyer Indemnitee, as applicable, in accordance with the 2019 Purchase Agreement (each such unpaid amount, an "Unsatisfied Amount"), then the Company may elect in its sole discretion to offset such Unsatisfied Amount, in whole or in part, against any Distributions owed to NBM under this Agreement in the Applicable Payment Year. In the event that all or any portion of the Unsatisfied Amount remains outstanding after the Applicable Payment Year, the Company may elect in its sole discretion, in any Fiscal Year after the Applicable Payment Year, to offset such Unsatisfied Amount or the remaining portion of such Unsatisfied Amount, as applicable, against any Distributions owed to NBM under this Agreement in such Fiscal Year. The Company may exercise its right of offset provided for in this Section 5.10 by delivering to NBM and to NBM Ultimate Parent a 30-day prior written notice specifying its intention to exercise its right of offset and the amount of the Unsatisfied Amount (each, an "Offset Notice").

5.10.2 If the Unsatisfied Amount remains unpaid in whole or in part on the date that is 30 days after receipt by NBM and NBM Ultimate Parent of an Offset Notice, the Company will, as elected by the Company pursuant to Section 5.10.1 of this Agreement, reduce the Distributions otherwise required to be made to NBM pursuant to Section 5.1 or 5.2 of this Agreement by one dollar for each dollar of the Unsatisfied Amount, with the full amount of such reduction being exclusively used to pay, in whole or in part, the Unsatisfied Amount to Ohio Beef or a Buyer Indemnitee, as applicable.

5.10.3 Any amounts paid by the Company to Ohio Beef or a Buyer Indemnitee, as applicable, pursuant to Section 5.10.2 of this Agreement shall be deemed Distributed to NBM in accordance with Sections 5.1 and 5.2 of this Agreement and paid by NBM to Ohio Beef or a Buyer Indemnitee, as applicable, for all purposes under this Agreement (including the allocations provided for in Sections 5.6, 5.7 and 5.8 of this Agreement and the maintenance of Capital Accounts) and the 2019 Purchase Agreement, and will not count against Distributions made to any other Member pursuant to Section 5.1 or 5.2 of this Agreement.

5.10.4 The right of offset provided for in this Section 5.10 is in addition to any rights or remedies available to Ohio Beef or a Buyer Indemnitee, as applicable, with respect to the Unsatisfied Amount under the terms of the 2019 Purchase Agreement, which the parties hereto acknowledge and agree may be enforced as directed by the Company or Ohio Beef. Neither the exercise of, nor the failure to exercise, the right of offset provided for in this Section 5.10 will constitute an election of remedies or limit Ohio Beef or a Buyer Indemnitee, as applicable, in any manner in the enforcement of any other remedies that may be available to it in accordance with the 2019 Purchase Agreement.

5.10.5 Notwithstanding any right of offset provided for in this Section 5.10 or Section 8.7 of the 2019 Purchase Agreement, NBM and the Ultimate NBM Parent shall remain liable in accordance with the 2019 Purchase Agreement for any Unsatisfied Amounts that are not recovered by Ohio Beef or a Buyer Indemnitee, as applicable, pursuant to the right of offset provided for in this Section 5.10.

6. STATUS, RIGHTS AND POWERS OF MEMBERS AND CERTAIN MEMBER AGREEMENTS

6.1 Limited Liability. Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, expenses, obligations and liabilities of the Company, and no Member or Indemnified Person shall be obligated personally for any such debt, expense, obligation or liability of the Company solely by reason of being a Member or Indemnified Person. All Persons dealing with the Company shall have recourse solely to the assets of the Company for the payment of the debts, obligations or liabilities of the Company. In no event shall any Member be required to make up any deficit balance in such Member's Capital Account upon the liquidation of such Member's Interest or otherwise.

6.2 Return of Distributions of Capital. Except as otherwise expressly required by law, a Member, in such capacity, shall have no liability for obligations or liabilities of the Company in excess of (a) the amount of such Member's Capital Contributions, (b) such Member's share of any assets and undistributed profits of the Company and (c) to the extent required by law, the amount of any Distributions wrongfully distributed to such Member. Except as required by law, no Member shall be obligated by this Agreement to return any Distribution to the Company or pay the amount of any Distribution for the account of the Company or to any creditor of the Company; provided, however, that if any court of competent jurisdiction holds that, notwithstanding this Agreement, any Member is obligated to return or pay any part of any Distribution, such obligation shall bind such Member alone and not any other Member or any Manager. The provisions of the immediately preceding sentence are solely for the benefit of the Members and shall not be construed as benefiting any third party. The amount of any Distribution returned to the Company by a Member or paid by a Member for the account of the Company or to a creditor of the Company shall be added to the account or accounts from which it was subtracted when it was distributed to such Member.

6.3 No Management or Control. Except as expressly provided in this Agreement and notwithstanding Section 18-402 of the Act, no Member shall take part in, or interfere in any manner with, the management of the business and affairs of the Company or have any right or authority to act for or bind the Company.

6.4 Specific Limitations. No Member shall have the right or power to: (a) withdraw or reduce such Member's Capital Contribution except as a result of the dissolution of the Company or as otherwise provided by law or in this Agreement; (b) make voluntary Capital Contributions or contribute any property to the Company other than cash; (c) bring an action for partition against the Company or any Company assets; (d) cause the termination and dissolution of the Company, except as expressly set forth in this Agreement; or (e) upon the Distribution of its Capital Contribution, require that property other than cash be distributed in return for its Capital Contribution. Each Member hereby irrevocably waives any such rights.

6.5 Member Voting. Except as otherwise set forth in this Agreement or required by the Act, all powers of the Members shall be exercised in accordance with Section 7.3 by the appointment of the Board of Managers. To the extent a vote of, or consent by, "members" is required under the Act, or is otherwise sought by the Company, the Members shall be entitled to one vote per Unit on all matters to be so voted on.

6.6 Required Consents; Modification of Unit Terms.

6.6.1 Until the date on which the Cattle Agreement Trigger occurs, none of the following actions shall be taken by the Company without prior written Member Consent:

(a) Entering into any contracts, agreements or transactions with any of the Members or their Affiliates that are (i) on an arm's length basis and would result in annual payments by or to the Company in excess of $5,000,000 or (ii) not on an arm's length basis, other than the issuance of Units or Interests to Members in compliance with Section 3.6(b). This Section 6.6.1 shall not apply to any contracts, agreements or transactions between the Company and its Subsidiaries, including any loans or financing transactions.

(b) Except as required by the Credit Documents, actions that contractually restrict (i) the making of distributions to Members as provided for in this Agreement or (ii) any required or mandatory repurchases by the Company of any Units as provided for in this Agreement.

6.6.2 Except as set forth in Section 12.5, the Company shall not modify or alter the rights, preferences or privileges of any Units, including by way of an amendment to this Agreement, which modification or alteration would adversely affect the economic entitlements of a holder of a Unit under this Agreement without the prior written consent of each such affected holder; provided, however, that the Company may issue Units as provided in Sections 3.6 and 7.4.2.

6.7 Restrictions on Member Competition. In consideration of the mutual covenants and agreements of the Company and the Members set forth in this Agreement, the Members set forth below hereby covenant and agree as follows:

(a) Certain Activities of USPB Prohibited. For so long as USPB or any of its Affiliates owns or Controls any Units of the Company, but in any event until December 31, 2021, neither USPB nor any of its Affiliates shall, directly or indirectly, singularly or in the aggregate, own or Control any Ownership Interests of, or otherwise run, manage, operate, direct, Control or participate in the ownership, management, operation or Control of, any Competing Business or any Competing Facility, other than an Ownership Interest of not more than 2.0% in the aggregate in any publicly traded entity that is a Competing Business or that owns or Controls a Competing Business or a Competing Facility.

(b) Certain Activities of NBPCo Prohibited.

(i) Except as otherwise set forth below, for so long as NBPCo or any of its Affiliates owns or Controls any Units of the Company, neither NBPCo nor any of its Affiliates shall, directly or indirectly, singularly or in the aggregate, own or Control more than 5% of the Ownership Interests of, or otherwise run, manage, operate, direct, Control or participate in the management, operation or Control of, any Competing Business or any Competing Facility.

(ii) The Members acknowledge and agree that NBPCo and its Affiliates directly and indirectly compete with the Company in segments of the beef market not constituting a Competing Business or a Competing Facility, and nothing in this Agreement shall in any way limit the ability of NBPCo and its Affiliates to compete with the Company, subject to clauses (i), (iii), (iv) and (v) of this Section 6.7(b).

(iii) For so long as NBPCo or any of its Affiliates owns or Controls any Units of the Company, if at any time NBPCo or its Affiliates commences a venture on its own that directly or indirectly competes with the Company in a segment of the beef market, then NBPCo will offer the Company an opportunity to supply beef as a raw material to such business activity, on arm's length terms and conditions.

(iv) For so long as NBPCo or any of its Affiliates owns or Controls any Units of the Company, if at any time NBPCo or its Affiliates commences a venture in conjunction with a Competing Business or Competing Facility that directly or indirectly competes with the Company in a segment of the beef market, then NBPCo or its Affiliate, as applicable, will offer the Company an opportunity to participate in a comparable venture on terms and conditions that are at least as favorable as the terms and conditions offered to, and agreed with, such Competing Business or Competing Facility. If the opportunity is offered to the Company, and the Company fails, within 30 days after being so presented with such opportunity, to accept such opportunity, or otherwise fails to pursue such opportunity with reasonable diligence, then the Company will waive its right to require NBPCo or its Affiliate, as applicable, to continue such offer and shall likewise waive any claim that the engagement by NBPCo or its Affiliate in such activity with a Competing Business or Competing Facility on the terms and conditions offered to the Company violates this Section 6.7(b) or constitutes a breach of the fiduciary duties of NBPCo's Manager designee, if applicable.

(v) NBPCo will not use its or its Affiliate's Ownership Interest in the Company, to gather Confidential Information from the Company or to block competitive projects of the Company, and NBPCo agrees not to use any Confidential Information for any purpose not related to the Company's conduct of its business or otherwise in a manner detrimental to the Company. Notwithstanding any other provision of this Agreement, if NBPCo or any of its Affiliates seeks to, or does acquire, engage in, or operate a venture of the type described above or that otherwise competes with the Company, the Board of Managers may restrict the access of NBPCo and its Affiliates to Confidential Information in the Board of Managers' sole discretion, and NBPCo agrees that, at the request of the Board of Managers, neither NBPCo nor any of its Affiliates will participate in or receive information related to Board of Managers meetings and other discussions relating to such Confidential Information or the consideration of the Company's involvement in such venture, Competing Business or Competing Facility.

(vi) Section 6.7(b) may not be amended without the consent of NBPCo so long as NBPCo or any of its Affiliates owns or controls any Units of the Company.

(vii) For purposes of this Section 6.7(b) only, "Competing Business" means a business or a Person conducting or Controlling a business that directly or indirectly competes with the business of the Company by engaging in the business of cattle slaughtering, beef processing or hide tanning in the United States or Mexico; and "Competing Facility" means any cattle slaughtering facility, any beef processing facility or any hide tanning facility owned by a Competing Business in the United States or Mexico.

(c) Certain Activities of Klein Prohibited. Until the two-year anniversary of the date that Klein, New Kleinco and their respective Affiliates no longer own or Control any of the Units of the Company, none of Klein, New Kleinco or their respective Affiliates shall, directly or indirectly, own or Control any Ownership Interests of, or otherwise run, manage, operate, direct, Control or participate in the ownership, management, operation or Control of, any Competing Business or any Competing Facility, other than an Ownership Interest of not more than 2.0% in the aggregate in any publicly traded entity that is a Competing Business or that owns or Controls a Competing Business or a Competing Facility.

(d) Severability. If the final judgment of a court of competent jurisdiction declares that any term or provision of this Section 6.7 is invalid or unenforceable, the parties hereto agree that the court making the determination of invalidity or unenforceability will have the power to reduce the scope, duration or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement will be enforceable as so modified after the expiration of the time within which the judgment may be appealed.

6.8 Agreement for NBPCo to Negotiate Certain Requirements Contracts in Good Faith. From and after the Effective Date, the Company and NBPCo agree to continue to meet and negotiate in good faith and on an arm's length basis to ensure the Company's ability to acquire all its requirements of NBPCo's finished product, and NBPCo's ability to acquire all of its requirements of the Company's trim, with equal to or less than 50% lean, each on terms and conditions at least as favorable as the terms and conditions that such party would permit any other Person to participate in such transactions. This Section 6.8 may not be amended without the consent of NBPCo so long as NBPCo or its Affiliates own or control Units of the Company.

6.9 Agreement Regarding NBPCo Waiver of Right of Set-off. Each of NBPCo and the Company hereby irrevocably waives any right to offset any payment due or claimed to be due to such party under any agreement entered into between them against any amounts that are due or claimed to be due by the other party under any other such agreement. This Section 6.9 may not be amended without the consent of NBPCo, so long as NBPCo or its Affiliates own or control Units of the Company.

6.10 Contracts with Managers or their Affiliates. No contract or transaction between the Company and a Manager or one of its Affiliates, or between the Company and any other entity in which a Manager or one of its Affiliates has a material financial interest, shall be void or voidable solely for this reason, or solely because the Manager is present at or participates in the Board of Managers meeting at which the contract or transaction is authorized or votes to authorize such contract or transaction, if: (a) the material facts of such Manager's material financial interest are disclosed to the Board of Managers; and (b) the contract or transaction is otherwise permitted, authorized or approved in accordance with this Agreement. The presence of the interested Manager may be counted in determining both the presence of a quorum at any such meeting at which the contract or transaction is authorized and the vote with respect thereto.

6.11 Member Compensation; Expenses; Loans

(a) Except as otherwise provided in a written agreement approved by the Board of Managers and with Member Consent, no Member shall receive any salary, fee, or draw for services rendered to or on behalf of the Company. Except as otherwise approved, permitted or contemplated by or pursuant to a policy approved by the Board of Managers and Member Consent, no Member shall be reimbursed for any expenses incurred by such Member on behalf of the Company.

(b) Subject to Sections 6.6 and 7.4.2, any Member or Affiliate may, to the extent authorized by the Board of Managers and not prohibited by the Credit Documents, lend or advance money to the Company. If any Member or Affiliate shall make any such permitted loan or loans to the Company or advance money on its behalf, the amount of any such loan or advance shall not be treated as a contribution to the capital of the Company but shall be a debt due from the Company and shall be repayable out of the Company's cash. None of the Members or their Affiliates shall be obligated to make any loan or advance to the Company.

7. DESIGNATION, RIGHTS, AUTHORITIES, POWERS, RESPONSIBILITIES AND DUTIES OF THE BOARD OF MANAGERS

7.1 Board of Managers. The business of the Company shall be managed by the Board of Managers. As of the Effective Date, the Board of Managers shall consist of the individuals set forth in Section 7.2 Thereafter, the individuals constituting the Board of Managers shall be designated by the Members in accordance with the provisions of Section 7.3 Decisions of the Board of Managers shall be decisions of the Company's "manager" for all purposes of the Act and shall be carried out by officers or agents of the Company designated by the Board of Managers in the resolution in question or in one or more standing resolutions or with the power and authority to do so under Article 8.

A decision of the Board of Managers may be amended, modified or repealed in the same manner in which it was adopted or in accordance with the procedures set forth in this Article 7 as then in effect, but no such amendment, modification or repeal shall affect any Person who has been furnished a copy of the original resolution, certified by a duly authorized officer of the Company, until such Person has been notified in writing of such amendment, modification or repeal.

7.2 Managers. The Managers of the Company comprising the Board of Managers as of the Effective Date, who shall serve for such terms and in such manner as prescribed by this Article 7, are the following Persons:

	Manager Name	Address	Designated By
1.	Marcos Antônio Molina dos Santos (Chairman)	Avenida Queiroz Filho, nº 1560, Bloco 5, Torre Sabiá, 3º andar, Sala 301, Vila Hamburguesa, City of São Paulo, State of São Paulo, 05319-000	NBM
2.	José Eduardo de Oliveira Miron	Avenida Queiroz Filho, nº 1560, Bloco 5, Torre Sabiá, 3º andar, Sala 301, Vila Hamburguesa, City of São Paulo, State of São Paulo, 05319-000	NBM
3.	Alain Emile Henri Martinet	Avenida Queiroz Filho, nº 1560, Bloco 5, Torre Sabiá, 3º andar, Sala 301, Vila Hamburguesa, City of São Paulo, State of São Paulo, 05319-000	NBM
4.	Ian David Hill	Avenida Queiroz Filho, nº 1560, Bloco 5, Torre Sabiá, 3º andar, Sala 301, Vila Hamburguesa, City of São Paulo, State of São Paulo, 05319-000	NBM

	Manager Name	Address	Designated By
5.	Miguel de Souza Gularte	Avenida Queiroz Filho, nº 1560, Bloco 5, Torre Sabiá, 3º andar, Sala 301, Vila Hamburguesa, City of São Paulo, State of São Paulo, 05319-000	NBM
6.	Brian Friedman	520 Madison Avenue New York, NY 10022	Jefferies
7.	Nicholas Daraviras	520 Madison Avenue New York, NY 10022	Jefferies
8.	Stanley Linville	12200 N. Ambassador Dr. Kansas City, MO 64163	USPB
9.	Timothy M. Klein	10217 Hwy 92 Kearney, MO 64060	CEO

7.3 Number and Designation Rights.

(a) The Board of Managers shall consist of up to nine Managers, to be appointed as follows:

(i) Jefferies, for so long as Jefferies and its Affiliates hold the Requisite Percentage, shall have the right to designate two Managers (each such Manager, a "Jefferies Manager").

(ii) USPB, until the earliest to occur of (A) USPB ceasing to own at least 1,068 Units and (B) the date on which the Cattle Agreement Trigger occurs, shall have the right to designate one Manager (such Manager, the "USPB Manager").

(iii) NBM shall have the right to designate five Managers (each, an "NBM Manager").

(iv) The Chief Executive Officer of the Company shall be a Manager.

(b) Other than with respect to the Managers set forth in Section 7.2, if it is necessary pursuant to this Article 7 to appoint additional or replacement Managers, each Member specified to so designate one or more Manager(s) pursuant to Section 7.3(a) shall designate its Manager(s) by delivering to the Company a written statement designating its Manager(s) and setting forth the respective business address and telephone number of each such Manager. The Members, by signing this Agreement, hereby agree to the designation of the Persons identified above in Section 7.2 hereto as Managers until their successors are designated in accordance with this Article 7, each such Manager, being deemed designated by the Member set forth opposite such Manager indicated above. A Manager need not be a Member.

7.4 Voting and Act of the Board of Managers; Actions Requiring Jefferies Consent; Action without a Meeting.

7.4.1 Subject to Section 7.4.2, Section 7.4.3 and Section 7.4.4, each Manager shall have one vote on any matter before the Board of Managers, and any such matter shall be decided by the Board of Managers by the affirmative vote of a majority of the Managers present at a duly held meeting at which a quorum is present, and references in this Agreement to actions by the Board of Managers shall be read accordingly. There shall be no requirement that any action of the Board of Managers be approved by the Managers elected or appointed by a certain group of Members.

7.4.2 Notwithstanding Section 7.4.1, the approval of any of the matters set out on Exhibit B shall require (a) the affirmative vote of a majority of the Managers present at a duly held meeting at which a quorum is present, (b) for so long as Jefferies owns the Requisite Percentage, the approval by Jefferies in its capacity as a Member, and (c) the approval by NBM in its capacity as a Member. When requested by the Board of Managers pursuant to this Section 7.4.2, each of Jefferies and NBM shall, within five Business Days of receipt of such request, provide written notice to the Board of Managers of its determination to consent or not consent to the actions for which such consent is required pursuant to Exhibit B.

7.4.3 Notwithstanding Section 7.4.1, any action to be taken, or election or determination to be made, by the Company of any of the matters set out on Exhibit C shall be approved by a majority of the Board of Managers, excluding the NBM Managers, which NBM Managers (a) shall not be entitled to vote on the approval of any such actions or the amendment of this Section 7.4.3 and (b) shall not be counted for purposes of determining whether a quorum is present or majority approval of the Board of Managers has been obtained with respect to such matters.

7.4.4 Notwithstanding Section 7.4.1, for so long as either a Jefferies Manager or a USPB Manager is appointed to the Board of Managers, the approval of any action to be taken, or election or determination to be made, by the Company to enforce the terms of the 2019 Purchase Agreement shall be approved by a majority of the Jefferies Managers and the USPB Manager then serving on the Board of Managers (voting together as a single class), excluding any other Managers serving on the Board of Managers, which other Managers (i) shall not be entitled to vote on the approval of any such matters or the amendment of this Section 7.4.4 and (ii) shall not be counted for purposes of determining whether a quorum is present or majority approval of the Board of Managers has been obtained with respect to such matters.

7.4.5 Any action required or permitted to be taken at a meeting of the Board of Managers may be taken by unanimous written action signed by all of the Managers comprising the Board of Managers, and such writing or writings shall be filed with the records of the meetings of the Board of Managers; provided, however, that, notwithstanding the foregoing, any actions referred to in Sections 7.4.3 and 7.4.4 may be taken or approved by written action signed by all of the Managers entitled to vote on such matter, and such writing or writings shall be filed with the records of the meetings of the Board of Managers. Such consent shall be treated for all purposes as the act of the Board of Managers. For the avoidance of doubt, the vote required for a written action pursuant to this Section 7.4.5 shall not affect the vote required for an action to be taken at a meeting of the Board of Managers pursuant to Sections 7.4.1, 7.4.3 or 7.4.4.

7.5 Tenure. Except as otherwise provided by law or by this Agreement, each Manager shall remain in office until such Manager dies, resigns, or is removed by the Member designating such Manager.

7.6 Resignation. Any Manager may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein or, if no time be specified then at the time of its receipt by the President or the Secretary of the Company. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

7.7 Removal. A Manager may be replaced or removed at any time by the Member designating such Manager, and may only be removed in accordance with this Section 7.7.

7.8 Vacancies. Any vacancy occurring on the Board of Managers shall be filled by the Member designating such Manager having the right to elect or appoint such Manager. The Board of Managers shall have and may exercise all their powers notwithstanding the existence of one or more vacancies in their number, subject to any requirements of law or of this Agreement as to the number of Managers required for a quorum or for any vote or other action; provided, however, that the Board of Managers may not take any action without first giving a Member able to designate a Manager to fill a vacancy at least 48 hours to fill such vacancy.

7.9 Meetings. Regular meetings of the Board of Managers shall be held from time to time as determined by the Board of Managers. Special meetings of the Board of Managers shall be held upon the call of the Chairman of the Board of Managers, the Chief Executive Officer or any Manager designated by NBM. Board of Managers meetings shall be held at the principal office of the Company or at such other place, either within or without the State of Delaware, as shall be designated by the person calling the meeting and stated in the notice of the meeting. Managers may participate in a Board of Managers meeting by means of video or audio conferencing or similar communications equipment whereby all Managers participating in the meeting can hear each other.

7.10 Notice. Notice of each meeting of the Board of Managers, in writing or by electronic mail, stating the place, day and hour of the meeting, shall be given to each Manager at least 48 hours before the time at which the meeting is to be held. The notice or waiver of notice of any special or regular meeting of the Board of Managers does not need to specify the business to be transacted or the purpose of the meeting.

7.11 Waiver. Whenever any notice is required to be given to a Manager under the provisions of this Agreement, a waiver thereof in writing signed by the Manager, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance of a Manager at any meeting of the Board of Managers shall constitute waiver of notice of such meeting by the Manager, except where the Manager attends a meeting for the express purpose of stating its objection to the transaction of any business because the meeting is not lawfully called or convened.

7.12 Quorum; Attendance by Proxy.

7.12.1 Except as otherwise set forth in Sections 7.4.3 and 7.4.4, attendance by all of the NBM Managers and, for so long as Jefferies owns the Requisite Percentage, by at least one Jefferies Manager, shall constitute a quorum necessary for the transaction of business at any regular or special meeting of the Board of Managers; provided that where the attendance of a Jefferies Manager or the NBM Managers is required pursuant to the preceding clause and two consecutive duly-called meetings of the Board of Managers are adjourned due to failure to achieve a quorum as a result of the non-attendance of a Jefferies Manager or the NBM Managers, as applicable, such meeting shall be re-convened again upon two Business Days' notice to the Managers, and the presence of a Jefferies Manager or all of the NBM Managers, as applicable, shall not be required to constitute a quorum at such third duly-called meeting. If less than a quorum is present, those Managers present may adjourn the meeting from time to time until a quorum shall be present.

7.12.2 Any NBM Manager or Jefferies Manager may designate another NBM Manager or Jefferies Manager, respectively, as his or her proxy to attend a Board of Managers meeting (the Manager giving such proxy being a "Proxy Manager"). Any such Proxy Manager shall be counted as present at such Board of Managers meeting for all purposes under this Agreement, and the vote of such Proxy Manager shall be deemed given by the Manager designated as the receiver of any such proxy as if the Proxy Manager had himself or herself attended such meeting and cast his or her vote in person.

7.13 Compensation. Unless otherwise unanimously approved by the Board of Managers, Managers who are not employees of the Company shall not be compensated for serving as Managers; provided that in the event that a Member designates as a Manager an unrelated third-party (including as to the Member designating such Manager) to serve as one of its Managers, the Board of Managers may determine to compensate such Manager for serving as a Manager up to an aggregate compensation level not to exceed $100,000 per year. Managers shall be entitled to reimbursement for reasonable expenses incurred in attending meetings of the Board of Managers.

7.14 Authority of Board of Managers. Subject to the provisions of this Agreement that require the consent or approval of one or more Members, the Board of Managers shall have the exclusive power and authority to manage the business and affairs of the Company and to make all decisions with respect thereto. Except as otherwise expressly provided in this Agreement, the Board of Managers or Persons designated by the Board of Managers, including officers and agents appointed by the Board of Managers, shall be the only Persons authorized to execute documents which shall be binding on the Company. To the fullest extent permitted by the Act, but subject to any specific provisions hereof granting rights to Members, the Board of Managers shall have the power to perform any acts, statutory or otherwise, with respect to the Company or this Agreement, which would otherwise be possessed by the Members under the Act, and the Members shall have no power whatsoever with respect to the management of the business and affairs of the Company. All decisions and other matters concerning the computation and allocation of items of income, gain, loss, deduction, and credit among the Members, and accounting procedures not specifically and expressly provided for by the terms of this Agreement, shall be determined by the Board of Managers in good faith. Any determination made pursuant to this Section 7.14 by the Board of Managers shall be conclusive and binding on all Members, but subject to written objection and legal action challenging the decision based on lack of good faith. The power and authority granted to the Board of Managers shall include all those necessary, convenient or incidental for the accomplishment of the purposes of the Company and shall include the power to make all decisions with regard to the management, operations, assets, financing and capitalization of the Company, including without limitation, the power and authority to undertake and make decisions concerning (in each case subject to the terms, conditions, and special approval requirement of this Agreement): (a) hiring and firing employees, attorneys, accountants, brokers, investment bankers and other advisors and consultants, (b) entering into leases for real or personal property, (c) opening bank and other deposit accounts and operations thereunder, (d) purchasing, constructing, improving, developing and maintaining real property, (e) purchasing insurance, goods, supplies, equipment, materials and other personal property, (f) borrowing money, obtaining credit, issuing notes, debentures, securities, equity or other interests of or in the Company and securing the obligations undertaken in connection therewith with mortgages on, pledges of and security interests in all or any portion of the real or personal property of the Company, (g) making investments in or the acquisition of securities of any Person, (h) giving guarantees and indemnities, (i) entering into contracts or agreements, whether in the ordinary course of business or otherwise, (j) mergers with or acquisitions of other Persons, (k) dissolution, (l) the sale or lease of all or any portion of the assets of the Company, (m) forming subsidiaries or joint ventures, (n) compromising, arbitrating, adjusting and litigating claims in favor of or against the Company and (o) all other acts or activities necessary, convenient or incidental for the accomplishment of the purposes of the Company including any and all actions that the Company may take as described in Section 2.6.

7.15 Reliance by Third Parties. Any person or entity dealing with the Company or the Members may rely upon a certificate signed by a Manager as to: (a) the identity of the Members, (b) the existence or non-existence of any fact or facts which constitute a condition precedent to acts by Members or are in any other manner germane to the affairs of the Company, (c) the Persons which are authorized to execute and deliver any instrument or document of or on behalf of the Company, (d) the authorization of any action by or on behalf of the Company by the Board of Managers or any officer or agent acting on behalf of the Company or (e) any act or failure to act by the Company or as to any other matter whatsoever involving the Company or the Members.

8. DESIGNATION, RIGHTS, AUTHORITIES, POWERS, RESPONSIBILITIES AND DUTIES OF OFFICERS AND AGENTS

8.1 Officers, Agents. The Board of Managers by vote or resolution shall have the power to appoint officers and agents to act for the Company with such titles, if any, as the Board of Managers deems appropriate and to delegate to such officers or agents such of the powers as are granted to the Board of Managers hereunder, including the power to execute documents on behalf of the Company, as the Board of Managers may in its sole discretion determine; provided, however, that no such delegation by the of Managers shall cause the Persons constituting the Board of Managers to cease to be the "managers" of the Company within the meaning of the Act. The officers so appointed may include persons holding titles such as Chairman, Chief Executive Officer, President, Chief Financial Officer, Executive Vice President, Chief Accounting Officer, Vice President, and Secretary. Unless the authority of the officer in question is limited or specified in the document appointing such officer or in such officer's employment agreement or is otherwise specified or limited by the Board of Managers, any officer so appointed shall have the same authority to act for the Company as a corresponding officer of a Delaware corporation would have to act for a Delaware corporation in the absence of a specific delegation of authority and as more specifically set forth in this Article 8; provided, however, that without the required consents pursuant to Sections 6.6 and 7.4.2 no officer shall take any action for which the consent of certain Members is required thereunder; and provided, further, that without the required consent pursuant to Section 8.10, no officer shall take any action for which consent is required thereunder.

8.2 Election. Officers may be elected by the Board of Managers at any time. At any time or from time to time the Board of Managers may delegate to any officer their power to elect or appoint any other officer or any agents. Officers must be natural persons.

8.3 Tenure. Each officer shall hold office until its respective successor is chosen and qualified unless a different period shall have been specified by the terms of its election or appointment, or in each case until he or she sooner dies, resigns, is removed or becomes disqualified. Each agent shall retain its authority at the pleasure of the Board of Managers, or the officer by whom he or she was appointed or by the officer who then holds agent appointive power.

8.4 Chairman of the Board of Managers, Chief Executive Officer, President and Vice President. The Chairman of the Board of Managers, if any, shall be selected by NBM for so long as NBM remains a Member and shall not be an officer of the Company and shall instead have such duties and powers as shall be designated from time to time by the Board of Managers. Subject to the terms and conditions of this Agreement, the Chief Executive Officer shall have direct and general charge and supervision of all business and administrative operations of the Company and all other such duties, responsibilities authority and privileges as are set forth in his employment agreement, if any, as amended from time to time, in addition to those duties, responsibilities, authority and privileges as are delegated to him by the Board of Managers or that a Chief Executive Officer of a Delaware corporation would have in respect of a Delaware corporation in the absence of a specific delegation of such duties, responsibility, authority and privileges. The Chief Executive Officer shall also perform such other duties that may be assigned by the Board of Managers to the extent consistent with this Agreement and his employment agreement, if any, as amended from time to time. The President and any Vice Presidents, if any, shall have duties as shall be designated from time to time by the Chief Executive Officer or by the Board of Managers.

8.5 Chief Financial Officer. Unless the Board of Managers otherwise specifies, the Chief Financial Officer of the Company shall be in charge of its funds and valuable papers, its books of account and accountig records, and of its accounting procedures and shall have such other duties and powers as may be designated from time to time by the Chief Executive Officer or the Board of Managers.

8.6 Secretary and Assistant Secretaries. The Secretary shall record all proceedings of the Members and the Board of Managers in a book or series of books to be kept therefor and shall file therein all actions by written consent of the Board of Managers. In the absence of the Secretary from any meeting, an Assistant Secretary, or if no Assistant Secretary is present, a temporary secretary chosen at the meeting, shall record the proceedings thereof. The Secretary shall keep or cause to be kept records, which shall contain the names and record addresses of all Members. The Secretary shall have such other duties and powers as may from time to time be designated by the Board of Managers, the Chair of the Board of Managers or the Chief Executive Officer. Any Assistant Secretaries shall have such duties and powers as shall be designated from time to time by the Board of Managers, the Chair of the Board of Managers, the Chief Executive Officer or the Secretary.

8.7 Vacancies. If the office of any officer becomes vacant, the Board of Managers may choose a successor. Each such successor shall hold office for the unexpired term, and until its successor is chosen and qualified or in each case until he or she sooner dies, resigns, is removed or becomes disqualified.

8.8 Resignation and Removal. Subject to the terms of any applicable employment agreement of an officer, the Board of Managers may at any time remove any officer either with or without cause. The Board of Managers may at any time terminate or modify the authority of any agent. Any officer may resign at any time by delivering its resignation in writing to the Chairman of the Board of Managers, the Chief Executive Officer or the Secretary or to a meeting of the Board of Managers. Such resignation shall be effective upon receipt unless specified to be effective at some other time, and without in either case the necessity of its being accepted unless the resignation shall so state.

8.9 Compensation. Officers shall receive such compensation as may be determined from time to time by resolution of the Board of Managers or as otherwise provided in a written employment agreement.

8.10 Certain Actions Requiring Board of Managers Consent. Notwithstanding any delegation of the Board of Managers' authority to any officer pursuant to the foregoing provisions of this Article 8 and notwithstanding any other provision of this Agreement or any employment agreement between such officer and the Company, the power to take the following actions shall be vested exclusively in the Managers (subject to Sections 6.6 and 7.4.2), unless the Board of Managers gives its express prior consent thereto:

(a) Entering into any contract, agreement or arrangement with any Person (including with accountants, investment bankers or consultants) where the aggregate expenditure of the Company with respect to any such Person in any Fiscal Year will or is reasonably likely to exceed $1,000,000, excluding those expenditures in the ordinary course of business or that are contemplated in the annual budget approved by the Board of Managers.

(b) Entering into any agreement for the borrowing of money (whether in the public or private markets), obtaining credit (other than trade credit in the normal course of business) or amending in any material respect any of the terms and conditions of any of the Credit Documents.

(d) Securing any obligations of the Company with any of its assets.

(e) Distributions of cash (or other Company assets) to Members.

(f) Acquisitions, disposals or sales of properties or assets (whether effected by merger, sale of assets, lease or equity exchange or otherwise), other than in the ordinary course of business or as contemplated in the annual budget approved by the Board of Managers, and other than in any transaction involving less than $1,000,000.

(g) Adoption of or changes in the annual budgets which shall be prepared by the officers of the Company in detail reasonably satisfactory to, and approved by, the Board of Managers, and which shall be consistent with the format used by the Company for preparation of its annual and quarterly financial statements.

(h) Making unbudgeted expenditures of $1,000,000 or more in any Fiscal Year.

(i) Approval of any Succession Plan or changes or amendments of the Succession Plan.

(j) Hiring, firing, promotion or demotion of any officer on the Senior Management Team or the Chief Financial Officer.

(k) Termination and hiring of general legal counsel for the Company and the hiring of special legal counsel.

(l) Approval of the Company's expense reimbursement policies, to the extent relating to members of the Senior Management Team, and the Company's currency or securities hedging and insurance policies.

(m) The formation of or investment in any Subsidiaries and any agreements relating thereto, including without limitation any agreements with joint venturers, partners or co-investors.

(n) The approval of any employment (or similar) contract or agreement under which the obligations of the Company exceed (or are expected to exceed) $1,000,000 over the term of such contract or agreement or exceed (or are expected to exceed) $333,333 in any Fiscal Year.

(o) Initiating, revising or eliminating any management bonus program.

(p) Making any material public announcement outside the normal course of business, unless the making of such public announcement is: (i) necessary to prevent a material adverse effect on the business of the Company or is otherwise required by applicable law; or (ii) deemed necessary and appropriate by the Senior Management Team to avoid an imminent public health danger.

(q) Approving all new sites for office space, plants or other operations and of associated capital expenditures, other than those contemplated in the annual budget approved by the Board of Managers.

(r) Indemnifying any officer, manager, employee or agent of the Company or its Subsidiaries on behalf of the Company or its Subsidiaries.

(s) Initiating or settling any litigation where the resulting loss or damage (plus any costs, including attorneys' fees) will or could reasonably be anticipated to exceed $1,000,000.

9. BOOKS, RECORDS, ACCOUNTING AND REPORTS

9.1 Books and Records. The books and records of the Company shall reflect all the Company's transactions and shall be appropriate and adequate for the Company's business. The Company shall maintain at its principal office or such other office as the Board of Managers shall determine all of the following:

(a) A current list of the full name and last known business or residential address of each Member and Manager;

(b) information regarding the amount of cash and a description and statement of the agreed value of any other property or services contributed by each Member and which each Member has agreed to contribute in the future, and the date on which each Member became a Member of the Company;

(c) A copy of the Certificate of Formation and this Agreement, including any amendments to either thereof, together with executed copies of any powers of attorney pursuant to which the Certificate of Formation, this Agreement or any amendments have been executed;

(d) Copies of the Company's federal, state and local income tax or information returns and reports;

(e) The audited financial statements of the Company; and

(f) The Company's books and records.

9.2 Delivery to Member, Inspection; etc. Upon the request of any Member for any purpose reasonably related to such Member's Interest, the Board of Managers shall allow the Member and its designated representatives or agents, upon at least two Business Days prior written notice to the Board of Managers and during reasonable business hours, to examine the Company's books and records for such purpose at the Member's sole cost and expense. A Member requesting such an examination of the Company's books and records may also request, and the Board of Managers shall endeavor to cause, that Managers, members of the Senior Management Team, and the independent certified public accountants for the Company be made available to discuss such books and records. In addition, each Member shall have the right to obtain from the Company such other information regarding the Company's affairs and financial condition as is just and reasonable. The foregoing rights shall be subject to Section 9.6 and to such reasonable standards as may be established by the Board of Managers from time to time. Notwithstanding anything to the contrary herein, information obtained in connection with this Section 9.2 shall be deemed Confidential Information and not be used in competition with the Company. The rights and privileges set forth in this Section 9.2 shall not apply (a) to a Member whose Governance Rights have terminated pursuant to Section 3.5 hereof, (b) to any assignee of a Member except to the extent required by the Act, (c) in any event to any Member who is employed by, retained by, Affiliated with or Controlled by a Competing Business at the time of request or examination, or (d) in the event that the provision of such information gives rise to or would reasonably be expected to give rise to U.S. Securities and Exchange Commission reporting obligations.

9.3 Accounting; Fiscal Year. The Company shall use the accrual method of accounting in preparing its financial reports and for tax purposes and shall keep its books and records accordingly. The Board of Managers may, without any further consent of the Members (except as specifically required by the Code), apply for IRS consent to, and otherwise effect a change in, the Company's Fiscal Year.

9.4 Reports.

(a) In General. The Chief Financial Officer of the Company shall be responsible for causing the preparation of financial reports of the Company and the coordination of financial matters of the Company with the Company's accountants.

(b) Periodic and Financial Reports. The Company shall maintain and provide to each Member upon request, the financial statements listed in clauses (i) and (ii) below, prepared, in each case (other than Capital Contributions, profits and losses and other allocations, distributions and Capital Accounts with respect to Member's Capital Accounts, which shall construed, determined and reported to Members in accordance with this Agreement) in accordance with GAAP.

(i) As soon as practicable following the end of each Fiscal Year (and in any event within the time frame required by Jefferies for its reporting processes), an unaudited balance sheet of the Company as of the end of such Fiscal Year and the related statements of operations and cash flows for such Fiscal Year. As soon as practicable following the end of each Fiscal Year (and in any event within the time frame required by Jefferies for its reporting processes), a balance sheet of the Company as of the end of such Fiscal Year and the related statements of operations, Members' Capital Accounts and changes therein, and cash flows for such Fiscal Year, together with appropriate notes to such financial statements, all of which shall be audited and certified by the Company's accountants, and in each case, to the extent the Company was in existence, setting forth in comparative form the corresponding figures for the immediately preceding Fiscal Year.

(ii) As soon as reasonably practicable following the end of each of the first three fiscal quarters of each Fiscal Year and following the end of each of the first 11 fiscal months of each Fiscal Year (and in any event within the time frame required by Jefferies for its reporting processes), an unaudited balance sheet of the Company as of the end of such fiscal quarter or fiscal month, as the case may be, and the related unaudited statements of operations and cash flows for such fiscal quarter or fiscal month, as the case may be, and for the Fiscal Year to date, in each case, to the extent the Company was in existence, setting forth in comparative form the corresponding figures for the prior Fiscal Year's fiscal quarter or fiscal month, as the case may be, and the fiscal quarter or fiscal month, as the case may be, just completed.

(c) IFRS. Notwithstanding the above, the Company shall maintain and provide to each Member upon request (i) such data, and in such format, as may be required to enable the Investor to prepare financial information under International Financial Reporting Standards ("IFRS") and (ii) a reconciliation between GAAP and IFRS. The Company shall, upon request of any NBM Manager, prepare or cause to be prepared annual and quarterly financial statements in accordance with IFRS.

(d) Other Reports. The Board of Managers shall cause to be delivered promptly to Members such other information that is customarily provided the shareholders or members, such as reports of adverse developments, management letters, communications with Members of Managers, press releases and registration statements.

9.5 Filings. At the Company's expense, NBM shall cause all tax returns required to be filed by the Company to be prepared and timely filed (including extensions) with the appropriate authorities and to have prepared and to furnish to each Member such information with respect to the Company (including without limitation a schedule setting forth such Member's distributive share of the Company's income, gain, loss, deduction and credit as determined for federal income tax purposes) as is necessary to enable such Member to prepare such Member's federal, state and local income tax returns. NBM, at the Company's expense, shall also cause to be prepared and timely filed, with appropriate federal and state regulatory and administrative authorities, all reports required to be filed by the Company with those entities under then current applicable laws, rules and regulations.

9.6 Non-Disclosure.

9.6.1 Each Member agrees that, except as otherwise consented to by the Board of Managers, all non-public information furnished to such Member pursuant to this Agreement or otherwise regarding the Company or its business that is not generally available to the public ("Confidential Information") will be kept confidential and will not be used by such Member (or its Affiliates, agents, representatives or employees) in competition with the Company or disclosed by such Member, or by any of such Member's agents, representatives or employees, in any manner, in whole or in part, except that (a) each Member shall be permitted to disclose such Confidential Information to those of such Member's agents, representatives and employees who need to be familiar with such information in connection with such Member's investment in the Company and who are charged with an obligation of confidentiality, (b) each Member shall be permitted to disclose such Confidential Information to such Member's partners and equity holders so long as they agree to keep such information confidential on the terms set forth herein, (c) each Member shall be permitted to disclose Confidential Information to the extent required by (i) law, (ii) rules and regulations of the Securities and Exchange Commission for any Member that is required to report information to the Securities and Exchange Commission, (iii) rules and regulations of the Brazilian Securities and Exchange Commission (Commisao de Valores Mobiliarios - CVM) for any Member or Affiliate thereof that is required to report information to the Brazilian Securities and Exchange Commission (Commisao de Valores Mobiliarios - CVM) and (iv) any applicable stock exchange on which a Member's securities are listed or traded, so long as such Member shall have first provided the Company a reasonable opportunity to contest the necessity of disclosing such information, and (d) each Member shall be permitted to disclose Confidential Information to the extent necessary for the enforcement of any right of such Member arising under this Agreement. Notwithstanding the foregoing, each Member (and each employee, representative or other agent of the Member) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to the Member relating to such tax treatment and tax structure.

9.6.2 Each Member agrees that it shall be liable for any breach or violation of the provisions of Section 9.6.1 by any Person to whom such Member provides Confidential Information (other than the Company). The covenants and undertakings contained in Section 9.6.1 relate to matters which are of a special, unique and extraordinary character and a violation of any of the terms of Section 9.6.1 will cause irreparable injury to the Company, the amount of which will be impossible to estimate or determine and which cannot be adequately compensated. Accordingly, the remedy at law for any breach of Section 9.6.1 may be inadequate. Therefore, notwithstanding anything to the contrary, the Company shall be entitled to an injunction, restraining order or other equitable relief from any court of competent jurisdiction in the event of any breach of any provision of Section 9.6.1 without the necessity of proving actual damages or posting any bond whatsoever. The rights and remedies provided by Section 9.6.1 are cumulative and in addition to any other rights and remedies which the Company may have hereunder or at law or in equity.

9.6.3 Each Member is aware that (i) Jefferies is an "issuer" of securities under United States securities laws and NBM Ultimate Parent is an "issuer" of securities under Brazilian securities laws and (ii) that United States and Brazilian securities laws prohibit any individual who has received from an issuer or any of its Affiliates (including the Company) any material, non-public information regarding such issuer or any of its Affiliates from purchasing or selling securities of such issuer or from communicating such information to any other individual under circumstances in which it is reasonably foreseeable that such individual is likely to purchase or sell securities of such issuer. As a consequence of its respective investments in the Company, each Member will from time to time receive confidential information concerning the Company that will constitute material, non-public information concerning Jefferies and NBM Ultimate Parent. Each Member acknowledges this prohibition and agrees to advise its respective Affiliates of this prohibition.

9.7 Restrictions on Receipt. The rights of Members to receive reports or to request information pursuant to this Article 9 shall be subject to Section 3.5.

10. TAX MATTERS

10.1 Tax Matters Member. The provisions of this Section 10.1 shall apply for and with respect to taxable years ending on or prior to December 31, 2017, and all references to the "Code" herein are as the Code in effect prior to amendment by the Bipartisan Budget Act of 2015 (and any similar provision under state or local law).

10.1.1 Jefferies shall designate a qualifying Member to act as the tax matters partner of the Company (the "Tax Matters Member") as defined in Section 6231(a)(7) of the Code. The Tax Matters Member will represent the Company in any audits, disputes or controversies or proceedings under the TEFRA Rules; provided, however, that the Tax Matters Member shall keep the Board of Managers informed as to all material developments with respect to such audits, disputes or controversies and shall not have any right to settle or compromise any such audits, disputes, controversies or proceedings without approval of the Board of Managers. The Tax Matters Member shall (a) furnish to each Member affected by an audit of Company income tax returns a copy of each notice or other communication received from the IRS or applicable state authority and (b) keep such Members informed of any administrative or judicial proceeding, as required by Section 6223(g) of the Code.

10.1.2 The Company shall not be obligated to pay any fees or other compensation to the Tax Matters Member in its capacity as such. However, the Company shall reimburse the reasonable expenses (including reasonable outside attorneys' and other reasonable outside professional fees, and allocated overhead and internal costs) incurred by the Tax Matters Member in such capacity. The cost of any resulting audits or adjustments of a Member's tax return shall be borne solely by the affected Member.

10.1.3 The Company shall indemnify and hold harmless the Tax Matters Member from and against any loss, liability, damage, cost or expense (including reasonable attorneys' and accountants' fees) sustained or incurred as a result of any act or decision concerning Company tax matters and within the scope of such Member's responsibilities as Tax Matters Member, so long as such act or decision was not the result of gross negligence, fraud or willful misconduct by the Tax Matters Member. The Tax Matters Member shall be entitled to rely on the advice of outside legal counsel and accountants as to the nature and scope of its responsibilities and authority as Tax Matters Member, and any act or omission of the Tax Matters Member pursuant to such advice in no event shall subject the Tax Matters Member to liability to the Company or any Member, unless such act or omission pursuant to such advice is as a result of gross negligence, fraud or willful misconduct by the Tax Matters Member.

10.2 Partnership Representative. The provisions of this Section 10.2 shall apply for and with respect to taxable years beginning after December 31, 2017, and all references to the "Code" herein are as amended by the Bipartisan Budget Act of 2015 (or any successor thereto and any similar provision under state or local law).

10.2.1 Partnership Representative. NBM (or, if NBM no longer has the right to designate a majority of the Managers, the Board of Managers) shall designate the Company's partnership representative (the "Partnership Representative") under Section 6223 of the Code (which may be NBM or any other person designated by NBM or the Board of Managers, as applicable). Each Member hereby consents to such designation and agrees that, upon the request of NBM, it will execute, certify, acknowledge, deliver, swear to, file and record at the appropriate public offices such documents as may be necessary or appropriate to evidence such consent. The Partnership Representative shall be promptly reimbursed for all reasonable expenses (including reasonable outside attorneys' and other reasonable outside professional fees, and allocated overhead and internal costs) incurred by it in connection with service as Partnership Representative (as applicable) to the extent such reimbursement is not prohibited by applicable law. Nothing herein shall be construed to restrict NBM from causing the Company to engage an accounting firm or legal counsel to assist the Partnership Representative in discharging its duties hereunder. The Partnership Representative will represent the Company in any audits, disputes, controversies or proceedings under the Partnership Tax Audit Rules; provided, however, that the Partnership Representative shall keep the Board of Managers informed as to all material developments with respect to such audits, disputes or controversies and shall not have any right to settle or compromise any such audits, disputes, controversies or proceedings without approval of the Board of Managers. The Company and the Partnership Representative shall keep the Members informed of any inquiries, audits, other proceedings or tax deficiencies assessed or proposed to be assessed (of which the Company or Partnership Representative is actually aware) by any taxing authority against the Company or the Members.

10.2.2 Election Out of Partnership Audit Procedures. So long as the Company satisfies the provisions of Sections 6221(b)(1)(B) through (D), the Partnership Representative, with the approval of the Board of Managers, may cause the Company to make the election set forth in Section 6221(b)(1) of the Code so that the Partnership Tax Audit Rules shall not apply to the Company. If such election is made, the Partnership Representative shall provide the proper notice to each Member in accordance with Section 6221(b)(1)(E).

10.2.3 Partnership Level Assessments. Provided the election described in Section 10.2.2 is not in effect, in the case of any adjustment by the IRS in the amount of any item of income, gain, loss, deduction, or credit of the Company or any Member's distributive share thereof ("IRS Adjustment"), the Partnership Representative, acting at the direction of NBM or the Board of Managers, as applicable, shall respond to such IRS Adjustment in accordance with either 10.2.3(a) or (b).

(a) In accordance with Section 6225 of the Code, the Partnership Representative may cause the Company to pay any Imputed Tax Underpayment imposed in the Adjustment Year. The Partnership Representative shall use reasonable efforts to pursue available procedures to reduce any Imputed Tax Underpayment on account of any Member's tax status.

(b) Alternatively, the Partnership Representative may elect under Section 6226 of the Code to cause the Company to issue adjusted IRS Schedules "K-1" (or such other form as applicable) reflecting a Member's shares of any IRS Adjustment for the Adjustment Year.

(c) In connection with any decision by the Partnership Representative, acting at the direction of the Board of Managers, regarding whether to make the election described in Section 6226 of the Code pursuant to this Section 10.2.3(b), the Partnership Representative shall use commercially reasonable efforts to take into consideration the relative costs and the tax consequences to the Company and the Members of making or not making such election. If the Partnership Representative determines not to make the election described in Section 6226 of the Code, the Partnership Representative will use commercially reasonable efforts to (i) take into account the tax status of each Member, when determining the amount of the Company's Imputed Tax Underpayment that is attributable to each Member, to the extent permitted by applicable law, and (ii) allocate such amount in such manner that no Member will bear the economic burden of any Imputed Tax Underpayment that is not attributable to such Member to the extent practicable. For purposes of the preceding sentence, the Partnership Representative shall use commercially reasonable efforts to take into account amended tax returns timely filed by each Member, as described in Section 6225(c)(2) of the Code, to the extent permitted by applicable law, and the Partnership Representative shall use commercially reasonable efforts to furnish to each Member, in a timely manner and to the extent reasonably available to the Partnership Representative, such information as such Member may reasonably request to prepare such amended tax returns to the extent practicable.

(d) Each Member agrees to (i) treat each item of income, gain, loss, deduction, or credit attributable to the Company in a manner which is consistent with the treatment of such item on the tax returns of the Company and (ii) provide the Company and the Partnership Representative with any information, documentation, or certification that the Company or Partnership Representative reasonably requests in connection with an audit, dispute, controversy or other tax proceeding relating to the Company, including any information or certifications that may be necessary for the Partnership Representative to reduce Imputed Tax Underpayment or make an election under Section 6226 of the Code.

10.2.4 Indemnification for Partnership Adjustments. Each Member hereby agrees to indemnify and hold harmless the Company, the Board of Managers, the Partnership Representative (including NBM in its capacity as such) or any of their respective Affiliates, or any of their respective officers, directors, employees, managers, members and, as determined by the Board of Managers in its sole and absolute discretion, consultants or agents, from and against any liability, cost, penalty, interest or expense (including, but not limited to, legal and accounting fees) with respect to any Imputed Tax Underpayment or other IRS Adjustment, regardless of whether such Member is a Member of the Company in an Adjustment Year, with such proportionate share as reasonably determined by the Board of Managers, including the Board of Managers' reasonable discretion, based on each Member's interest in the Company in the Reviewed Year, each Member's tax status and a Member's timely provision of information necessary to reduce the amount of Imputed Tax Underpayment set forth in Section 6225(c) of the Code. A Member's reimbursement obligation pursuant to this Section 10.2.4 shall be effected, at the sole option of NBM or such other indemnified person, either by (i) the Member's immediate payment in cash to the Company or such other indemnified person and/or (ii) the Company's retention of amounts of distributable cash that would otherwise be distributable to such Member (any amount so retained shall be treated as distributed to such Member for purposes of Section 5.2) and/or (iii) the Company's making of the relevant payment on behalf of such Member (any amount so paid, together with any costs and expenses incurred by the Company in relation to such payment, to be repaid by reducing the amount of the next succeeding distribution or distributions that would otherwise have been made to such Member or, if such distributions are not sufficient for that purpose, by reimbursement by such Member). NBM and the Company will be entitled to take any other action determined to be necessary or appropriate in connection with any obligation or possible obligation to impose withholding pursuant to any tax law or to pay any tax with respect to a Member.

10.2.5 The obligations under this Section 10.2 shall survive a Member's ceasing to be a Member of the Company and/or the termination, dissolution, liquidation and winding up of the Company.

10.3 Tax Returns. Unless otherwise agreed by the Board of Managers, all returns of the Company shall be prepared by the Company's independent certified tax accountants under the direction of the Board of Managers, with such returns being prepared consistent with past practice except to the extent otherwise required by applicable law.

10.4 Tax Elections. Subject to Section 7.4.2, NBM shall, without any further consent of the Members being required (except as specifically required herein), cause the Company to make any and all elections for federal, state, local, and foreign tax purposes including, without limitation, any election, if permitted by applicable law: (i) to make the election provided for in Code Section 6231(a)(1)(B)(ii) (prior to amendment under to the Bipartisan Budget Act of 2015) or take any other action necessary to cause the provisions of Code Sections 6221 through 6231 (as amended by the Bipartisan Budget Act of 2015) to apply to the Company (ii) to take any action necessary or appropriate to continue the election made by the Company pursuant to Code Section 754 as in effect on the 2018 Effective Date, including making a new or a protective Section 754 election, to ensure that such Section 754 election is and remains effective and that the Section 754 election is not revoked without the consent of all Members, and to adjust the basis of Property pursuant to Code Sections 734(b) and 743(b), or comparable provisions of state, local or foreign law, in connection with Transfers of Interests and Company distributions; (iii) to extend the statute of limitations for assessment of tax deficiencies against the Members with respect to adjustments to the Company's federal, state, local or foreign tax returns; and (iv) acting at the direction of the Board of Managers, and keeping the Board of Managers informed as to all material developments with respect thereto, to represent the Company and the Members before taxing authorities or courts of competent jurisdiction in tax matters affecting the Company or the Members in their capacities as Members (other than those matters described in Sections 10.1 and 10.2 that are represented by the Tax Matters Member or the Partnership Representative, as applicable), and to file any tax returns and execute any agreements or other documents relating to or affecting such tax matters, including agreements or other documents that bind the Members with respect to such tax matters or otherwise affect the rights of the Company and the Members.

10.5 Tax Information. Necessary tax information shall be delivered to each Member as soon as practicable after the end of each Fiscal Year of the Company but not later than 5 months after the end of each Fiscal Year.

11. TRANSFER OF INTERESTS

11.1 Transfer.

11.1.1 During the Lock Up Period, except for Transfers (a) pursuant to Section 11.2 to a Permitted Transferee, (b) for a Permitted Financing Pledge or (c) pursuant to Article 12, no Member shall Transfer all or any part of its Units, or the economic or other rights that comprise such Member's Interest, unless such Transfer is first approved by a majority of the Managers who were not appointed by the Member seeking approval for such Transfer, which approval may be granted or withheld in the sole discretion of such Managers; provided, that following the Lock Up Period Early Termination Date, this Section 11.1.1 shall not apply to the Minority Members.

11.1.2 A Minority Member may not Transfer all or any part of its Units, or the economic or other rights that comprise such Member's Interest, to any Named Competitors, unless such Transfer is first approved by a majority of the Managers who were not appointed by the Member seeking approval for such Transfer, which approval may be granted or withheld in the sole discretion of such Managers.

11.1.3 The Company shall maintain a record of the ownership of Units, which shall be as set forth on Exhibit A and shall be amended from time to time to reflect permitted Transfers of ownership of Units. Subject to restrictions on the transferability of Units as set forth herein, Units shall be Transferred by delivery to the Company of an instruction by the registered owner of a Unit requesting registration of Transfer of such Units and the recording of such Transfer in the records of the Company.

11.2 Permitted Transferees. Subject to Sections 11.3 and 11.4, a Member shall be entitled to Transfer all or any portion of such Member's Units to a direct or indirect Subsidiary of such Member; provided that (a) NBM and NBM Ultimate Parent shall also be permitted to Transfer its Units to another Subsidiary of NBM Ultimate Parent, and (b) Jefferies shall also be permitted to Transfer its Units to another Subsidiary of Jefferies (each such Subsidiary is referred to herein as a "Permitted Transferee"). In no event shall all or any part of a Unit be Transferred to a minor or incompetent except in trust or pursuant to the Uniform Gifts to Minors Act.

11.3 Transfer Requirements. No Person to whom any of a Member's Units are Transferred (including a Permitted Transferee) shall be admitted to the Company as a Member (as limited under certain circumstances in accordance with Section 11.8) unless the following conditions are satisfied or such conditions are waived by the Board of Managers:

(a) a duly executed written instrument of Transfer is provided to the Board of Managers, specifying the Units being Transferred and setting forth the intention of the Member effecting the Transfer that the transferee succeed to a portion or all of such Member's Units;

(b) an opinion of responsible counsel (who may be counsel for the Company), reasonably satisfactory in form and substance to the Board of Managers to the effect that:

(i) such Transfer would not violate the Securities Act or any state securities or blue sky laws applicable to the Company or the Interest to be Transferred;

(ii) such Transfer would not cause the Company to be considered a publicly traded partnership under Section 7704(b) of the Code; and

(iii) such Transfer would not cause the Company to lose its status as a partnership for federal income tax purposes; and

(c) the transferee provides a statement, in form and substance reasonably satisfactory to the Board of Managers, certifying that it has complied with its withholding obligations under Section 1446(f) of the Code (including having obtained an executed affidavit described in Section 1446(f)(2) of the Code from the Member effecting the Transfer, if applicable);

(d) the Member effecting the Transfer and the transferee, as applicable, execute and deliver to the Board of Managers a joinder hereto, a special power of attorney as provided in Section 18.3 and any other instruments reasonably necessary to evidence acceptance by the transferee of this Agreement and such transferee's agreement to be bound by and comply with the provisions hereof; and

(e) the Member effecting the Transfer or the transferee pays to the Company a transfer fee in an amount sufficient to cover the reasonable expenses incurred by the Company in connection with the admission of the transferee.

11.4 Consent. Subject to Section 11.8, each Member hereby agrees that upon satisfaction of the terms and conditions of this Article 11 with respect to any proposed Transfer, the Person proposed to be such transferee may be admitted as a Member.

11.5 Withdrawal of Member. If a Member Transfers all of its Units pursuant to Section 11.1 and the transferee of such interest is admitted as a Member pursuant to Section 11.3 (whether or not such Member's status is limited pursuant to Section 11.8), such transferee shall be admitted to the Company as a Member effective on the effective date of the Transfer or such other date as may be specified when the transferee is admitted and, immediately following such admission, the transferor Member shall cease to be a Member of the Company. Upon the transferor Member's withdrawal from the Company, the withdrawing Member shall not be entitled to any Distributions, or any other rights associated with an Interest in the Company, from and after the date of such withdrawal or Transfer.

11.6 Noncomplying Transfers Void. Any Transfer in contravention of this Article 11 shall be void ab initio and of no force or effect, and shall not bind nor be recognized by the Company.

11.7 Amendment of Exhibit A. In the event of the admission of any transferee as a Member of the Company, the Board of Managers shall promptly amend Exhibit A to reflect such Transfer or admission, as the case may be, and it shall deliver promptly to each Member a copy of such amended Exhibit A.

11.8 Limited Interests. If the Interests with respect to Units held by a Member have been limited as required by Section 3.5 and such Member shall wish to Transfer, or shall have Transferred, Units in accordance with this Article 11, the limitations imposed by Section 3.5 on such Interests shall be removed only with the consent of the Board of Managers.

11.9 Permitted Financing Pledge. The Units owned by NBM or its Permitted Transferee and all associated rights and powers may be pledged or assigned to any lender or lenders (or an agent therefor) in a Permitted Financing Pledge as collateral for the indebtedness, liabilities and obligations of NBM or such Permitted Transferee to such lender or lenders, and any such pledged or assigned Units and all associated rights and powers shall be subject to such lender's or lenders' (or agent's) rights under any collateral documentation governing or pertaining to the Permitted Financing Pledge. The Permitted Financing Pledge shall not, except as otherwise may result due to an exercise of rights and remedies under such collateral documentation, cause NBM or its Permitted Transferee to cease to be a Member or to have the power to exercise any rights or powers of a Member and, except as provided in such collateral documentation, such lender or lenders (and agent therefor) shall not have any liability solely as a result of such Permitted Financing Pledge. Without limiting the generality of the foregoing, the right of such lender or lenders (or an agent therefor) to enforce and exercise their rights and remedies under such collateral documentation is hereby acknowledged and, subject to compliance with the terms and conditions of Section 11.3 of this Agreement, any such action taken in accordance therewith shall be valid and effective for all purposes under this Agreement, the Certificate of Formation (in each case, regardless of any restrictions or procedures otherwise herein or therein contained) and applicable law (including the Act), and any Transfer of the Units to or by such lender or lenders (or an agent therefor) pursuant to any such collateral documentation in connection with the exercise of any such lender's or lenders' or agent's rights under the Permitted Financing Pledge shall be valid and effective for all purposes, including, without limitation, under Sections 18-702 and 18-704 of the Act, this Agreement, the Certificate of Formation and other applicable law, to transfer all right, title and interest (including all rights, powers, liabilities and obligations) of NBM or its Permitted Transferee to itself or themselves or its or their owned and controlled designee or any other Person (each an "Assignee") in accordance with such collateral documentation, the terms and conditions of Section 11.3 of this Agreement and applicable law, and such Assignee shall (without further requirements or restrictions, including under any other section of Articles 11, 12 and 13 hereof) be a Member of the Company with all rights, powers, liabilities and obligations that NBM or its Permitted Transferee enjoyed or was subject to prior to its exercise of its rights under the Permitted Financing Pledge collateral documents (and, where applicable, as a "member" under the Act); provided that all Transfers of such Units after the Transfer in which the Assignee became a Member pursuant to the exercise of the Permitted Financing Pledge collateral documents shall be subject to all of the terms and conditions of this Agreement.

11.10 Member Bankruptcy Events. Any Member, or any assignee who becomes a Member, shall not cease to be a Member upon the occurrence of any of the events set forth in Section 18-304 of the Delaware Limited Liability Company Act (with respect to such Member) and shall continue to be a Member until such time as such Member's Units are effectively Transferred.

12. RIGHT OF FIRST OFFER; TAG-ALONG RIGHTS; LIQUIDITY OPTION

12.1 Right of First Offer.

12.1.1 Following the Lock Up Period, if any Member (for purposes of this Section 12.1, the "Selling Member"), wishes to Transfer all or any portion of its Units, whether on its own initiative or in response to a bona fide offer from any Person, such Selling Member shall give written notice (the "Notice of Sale") to NBM (if NBM is not the Selling Member) and Jefferies (if Jefferies is not the Selling Member), with a copy in each case to the other Members, of the Units subject to such proposed Transfer (the "Offered Units").

12.1.2 NBM or Jefferies shall have 20 Business Days to evaluate the Offered Units and to make an irrevocable written offer to the Selling Member to purchase all and not less than all of the Offered Units at a specified price. The Selling Member may elect to accept any offer made by NBM or Jefferies, to reject any offer made by either of them; provided that it may not sell to NBM or Jefferies if the offer of the other is for better terms, or the Selling Member may seek a third party offer.

12.1.3 If the Selling Member seeks a third party offer, it shall have 120 days from the time of the delivery of the Notice of Sale to enter into a definitive binding agreement, subject only to required regulatory approvals, with a third party buyer for the Offered Units. The Selling Member may only sell the Offered Units to a third party for a price greater than the higher price offered by NBM or Jefferies (as applicable), and under terms and conditions (payment conditions, representations, warranties, indemnities and holdback/ escrow) not more beneficial to such third party than those terms and conditions offered to NBM or Jefferies (as applicable).

12.1.4 If the Selling Member does not enter into a definitive agreement to sell the Offered Units prior to the expiration of such 120 day period, or changes the amount of Offered Units it intends to sell, it must again comply with the notice and offer requirements of this Section 12.1 prior to offering the Offered Units to any third party.

12.2 Rights of First Refusal.

12.2.1 In the event that the Right of First Offer set forth in Section 12.1 is not exercised, and (a) any Minority Member wishes to Transfer all or any portion of its Units to a Similar Competitor, or (b) NBM wishes to Transfer all or any portion of its Units to an Insufficient Rated Party (in the case of each of the foregoing clauses (a) and (b)), whether on its own initiative or in response to a bona fide offer from any Person, to any Person, (for purposes of this Section 12.2, such Transferring Member being the "Selling Member"), the Selling Member, in addition to complying with Section 12.1, shall give written notice (the "ROFR Notice of Sale") to NBM (if NBM is not the Selling Member) and/or Jefferies (if Jefferies is not the Selling Member), with a copy in each case to the other Members, of the price and other terms and conditions of such sale for the Units (the "ROFR Offered Units") to a third party, and the name and address of the proposed transferee (if applicable). The receipt of the ROFR Notice of Sale by NBM or Jefferies, as applicable (the "ROFR Offerees"), shall constitute an offer by the Selling Member to sell the Offered Units to the ROFR Offerees. Such offer, unless revoked by written notice given by the Selling Member to the ROFR Offerees prior to acceptance by ROFR Offerees shall remain outstanding for a period of 20 Business Days after receipt of the ROFR Notice of Sale by ROFR Offerees (the "ROFR Offer Period"). The ROFR Offeree may accept such offer as to all of the ROFR Offered Units by giving written notice to the Selling Member (with a copy to the other Members) (a "ROFR Notice of Purchase") of its intention to purchase such Offered Units at the same price and on the same terms specified in the ROFR Notice of Sale. If the Selling Member is Jefferies or a Permitted Transferee of Jefferies, the proposed transferee is a Similar Competitor and NBM does not exercise its right of first refusal under this Section 12.2.1, the transferee will not assume Jefferies's right to approve any of the matters set out on Exhibit B pursuant to Section 7.4.2.

12.2.2 Closing. If the ROFR Offeree gives a ROFR Notice of Purchase for the ROFR Offered Units pursuant to this Section 12.2, the closing of the purchase by ROFR Offeree of the ROFR Offered Units shall take place as soon as reasonably practicable and in no event later than 60 days after the date of such ROFR Notice of Purchase or such longer period of time as may be required to obtain final regulatory approval, which the ROFR Offeree and the Selling Member agree to use their respective commercially reasonable efforts to obtain, at the principal office of the Company, or at such other time and location as the parties to such purchase may mutually determine at the same price and on terms identical in all material respects to the terms as specified in the ROFR Notice of Sale.

12.2.3 Transfer. If, at the close of the ROFR Offer Period, the ROFR Offeree has not given a ROFR Notice of Purchase for all of the Offered Units, or if payment therefor has not been made within 60 days (or such longer period of time as authorized under Section 12.2.2) after receipt of the ROFR Notice of Purchase (or such longer period as authorized under Section 12.2.2) from the ROFR Offeree, the Selling Member shall have 90 days (the conclusion of such period, the "ROFR Final Transfer Date") in which to Transfer the ROFR Offered Units to the purchaser specified in the ROFR Notice of Sale, if one was specified, at a price not less than 100% of the price specified in the ROFR Notice of Sale and on terms and conditions not materially more favorable to the transferee than the terms and conditions specified in the ROFR Notice of Sale. If the Selling Member is NBM or a Permitted Transferee of NBM, and the purchaser specified in the ROFR Notice of Sale is rated BB or above by S&P or Ba2 by Moody's, then the Guarantees shall terminate with respect to such Units being sold and be of no further force or effect with respect to such Units being sold following completion of such sale.

12.2.4 New Notice of Sale Required if Reduction in Price. If (a) after the close of the ROFR Offer Period and prior to the consummation of the Transfer permitted by Section 12.2.3, the Selling Member wishes to Transfer the ROFR Offered Units at a price that is lower than 100% of the price stated in the ROFR Notice of Sale or on terms and conditions materially more favorable to the transferee than the price and other terms and conditions contained in the ROFR Notice of Sale or the identity of the proposed transferee shall change, or (b) the Selling Member shall not have completed the proposed Transfer on or before the ROFR Final Transfer Date, then the ROFR Notice of Sale shall be null and void, and the Selling Member shall be required to separately comply with the provisions of this Section 12.2 (including re-offering the ROFR Offered Units to ROFR Offeree on such new terms and conditions, if applicable.)

12.2.5 Remain Subject. Units transferred pursuant to this Section 12.2 shall remain subject to the terms of this Agreement (including this Section 12.2), and such Transfers shall be subject to Section 11.3.

12.2.6 Right to Delegate ROFR Offeree shall have the right to delegate all or part of its rights and obligations pursuant to this Section 12.1 to any Permitted Transferee or to the Company; provided, however, that in the event that after any such delegation from ROFR Offeree to such Permitted Transferee or the Company, such Permitted Transferee or the Company fails to perform its obligations hereunder in accordance with the provisions of this Section 12.1, ROFR Offeree shall be responsible to perform and complete such Permitted Transferee's or the Company's obligations contained in this Section 12.2.

12.3 Tag-Along Rights.

12.3.1 Tag-Along Right. In the event of a Transfer by NBM (or its Permitted Transferees) (a "Tag-Along Sale") to a Person other than a Permitted Transferee (for purposes of this Section 12.3, the "Proposed Transferee"), each Member other than the Member initiating such Tag-Along Sale (such Member for the purposes of this Section 12.3, the "Initiating Seller") shall have the right (the "Tag-Along Right", and each Member electing to exercise its Tag-Along Right, a "Selling Member") to include in the Tag-Along Sale a number of Units equal to such Selling Member's Sale Percentage multiplied by the total number of Units proposed to be Transferred by the Initiating Seller as set forth in the Notice of Proposed Sale. Any Units purchased from a Selling Member pursuant to this Section 12.3 shall be purchased at the same price per Unit and for the same form of consideration, and shall be purchased on the same terms and conditions, as the Units being transferred by the Initiating Seller.

12.3.2 Notice of Proposed Sale. The Initiating Seller shall, not less than 30 days prior to a proposed Tag-Along Sale to which Section 12.3.1 is applicable, give written notice to each other Member of such proposed Tag-Along Sale. Such notice (the "Notice of Proposed Sale") shall set forth: (a) the number of Units proposed to be Transferred, (b) the name and address of the Proposed Transferee, (c) the maximum and minimum per Unit purchase price or, if not in cash, proposed consideration and the other principal terms and conditions of the proposed Tag-Along Sale, (d) that the Proposed Transferee has been informed of the Tag-Along Right provided for in Section 12.3.1 and has agreed to purchase Units in accordance with the terms of this Section 12.3 and (e) that the Initiating Seller has agreed to consummate the Tag-Along Sale, subject only to any required regulatory approvals, this Section 12.3 and Article 11 of this Agreement.

12.3.3 Exercise of Tag Along Right. The Tag-Along Right may be exercised by a Selling Member by giving written notice to the Initiating Seller (the "Tag-Along Notice") within 15 days following such Selling Member's receipt of the Notice of Proposed Sale (the "Tag-Along Period"). Each Member who does not deliver a Tag-Along Notice to the Initiating Seller within the Tag-Along Period shall be deemed to have waived all of such Member's rights under this Section 12.3 with respect to inclusion of such Member's Units in such proposed Tag-Along Sale, and the Initiating Seller, subject to the participation of the Selling Members, if any, shall have the right, for a 180- day period after the expiration of the Tag-Along Period (or for such longer period of time as may be required to obtain any final regulatory approvals, which the Initiating Seller agrees to use its commercially reasonable efforts to obtain) to Transfer the Units specified in the Notice of Proposed Sale to the Proposed Transferee at a per Unit purchase price no greater than the maximum (and no less than the minimum) per Unit purchase price set forth in the Notice of Proposed Sale and on other principal terms that are not materially more favorable to the Initiating Seller and the Selling Members than those set forth in the Notice of Proposed Sale.

12.3.4 Irrevocable Offer. The offer of each Selling Member contained in such Selling Member's Tag-Along Notice shall be irrevocable, and, to the extent such offer is accepted, such Selling Member shall be bound and obligated to Transfer in the proposed Tag-Along Sale on the same terms and conditions, as the Initiating Seller, up to such amount of Units as such Selling Member shall have specified in such Selling Members Tag-Along Notice; provided, however, that (a) if the principal terms of the proposed sale change with the result that the per Unit purchase price shall be less than the minimum per Unit purchase price set forth in the Notice of Proposed Sale to Members or the other principal terms shall be materially less favorable to the Initiating Seller and the Selling Members than those set forth in the Notice of Proposed Sale to Members, each Selling Member shall be permitted to withdraw the offer contained in such Selling Members Tag-Along Notice and shall be released from such Selling Member's obligations thereunder, and (b) if at the end of the 180th day following the date of the effectiveness of the Notice of Proposed Sale (or for such longer period of time as may be required to obtain any final regulatory approvals, which the Initiating Seller agrees to use its commercially reasonable efforts to obtain) the Initiating Seller has not completed the proposed Tag-Along Sale, each Selling Member shall be released from the obligations under such Member's respective Tag-Along Notice, any related Notice of Proposed Sale shall be null and void, and it shall be necessary for separate such notice to be furnished, and the terms and provisions of this Section 12.3 separately complied with, in order to consummate such Tag-Along Sale pursuant to this Section 12.3.

12.3.5 Additional Compliance. If, prior to consummation, the terms of the proposed Tag-Along Sale shall change with the result that the per Unit purchase price shall be greater than the maximum per Unit purchase price set forth in any Notice of Proposed Sale or the other principal terms shall be materially more favorable to the Initiating Seller and the Selling Members than those set forth in such Notice of Proposed Sale, then, unless all Members have exercised their Tag-Along Rights, such Notice of Proposed Sale shall be null and void, and it shall be necessary for a separate such Notice of Proposed Sale to be furnished, and the terms and provisions of this Section 12.3 separately complied with, in order to consummate such proposed Tag-Along Sale pursuant to this Section 12.3.

12.4 Miscellaneous. The following provisions shall be applied to any Transfer to which Section 12.1, 12.2 or 12.3 applies:

12.4.1 Consideration. In the event the consideration to be paid in exchange for the Units in the proposed sale pursuant to Section 12.1, 12.2 or 12.3 includes any securities and the receipt thereof by any Selling Member would require under applicable law (a) the registration or qualification of such securities or of any Person as a broker or dealer or agent with respect to such securities or (b) the provision to any Selling Member of any information other than such information as a prudent issuer would generally furnish in an offering made solely to Accredited Investors, the Initiating Seller shall be obligated only to use its commercially reasonable efforts to cause such requirements to be complied with to the extent necessary to permit such Selling Member to receive such securities, it being understood and agreed that the Initiating Seller shall not be under any obligation to effect a registration of such securities under the Securities Act or similar statutes. Notwithstanding any provisions of this Section 12.4, if use of commercially reasonable efforts by the Initiating Seller shall not have resulted in such requirements being complied with to the extent necessary to permit such Selling Member to receive such securities, or if regulatory restrictions prevent a Selling Member from holding such securities and the Initiating Seller, after using commercially reasonable efforts, is unable to structure the transaction in a way that meets such regulatory requirements, the Initiating Seller shall cause to be paid to such Selling Member in lieu thereof, against surrender of the Interest which would have otherwise been sold by such Selling Member to the Proposed Transferee in the sale, an amount in cash equal to the fair market value (as determined by the Board of Managers in good faith) of the securities which such Selling Member would otherwise receive as of the date of the issuance of such securities in exchange for Members' Units. The obligation of the Initiating Seller to use commercially reasonable efforts to cause such requirements to have been complied with to the extent necessary to permit a Selling Member to receive such securities shall be conditioned on such Selling Member executing such documents and instruments, and taking such other actions (including without limitation, if required by the Initiating Seller, agreeing to be represented during the course of such transaction by a "purchaser representative" (as defined in Regulation D) in connection with evaluating the merits and risks of the prospective investment and acknowledging that such Selling Member was so represented), as the Initiating Seller shall reasonably request in order to permit such requirements to be complied with. Unless the Selling Member in question shall have taken all actions reasonably requested by the Initiating Seller in order to comply with the requirements under Regulation D, such Selling Member shall not have the right to require the payment of cash in lieu of securities under this Section 12.4.1.

12.4.2 Cooperation. Each Selling Member in a sale pursuant to Section 12.1, 12.2, or 12.3, as the case may be, whether in its capacity as such or as a Member, member of the Board of Managers, officer or agent of the Company, or otherwise, shall to the fullest extent permitted by law take or cause to be taken all such actions as may be reasonably requested in order expeditiously to consummate each sale pursuant to Section 12.1, 12.2 or 12.3 hereof and any related transactions, including, without limitation, executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments; furnishing information and copies of documents; filing applications, reports, returns, filings and other documents or instruments with governmental authorities; and otherwise cooperating with the Initiating Seller and the Proposed Transferee; provided, however, that the Selling Members shall be obligated to become liable (severally and not jointly) in respect of any representations, warranties, covenants, indemnities or otherwise to the Proposed Transferee solely to the extent provided in the immediately following sentence, and not to any non-compete or non-solicit or strategic covenant. Without limiting the generality of the foregoing, each Selling Member agrees to execute and deliver such agreements as may be reasonably specified by the Initiating Seller to which the Initiating Seller will also be party, including, without limitation, agreements to (a) make individual representations as to the title to its Interest and the power, authority and legal right to transfer such Interest to the extent such agreements are also made by the Initiating Seller and (b) be liable in respect of any purchase price escrow or adjustment provisions or reduction in purchase price as may apply to Members generally resulting from representations, warranties, covenants and indemnities in respect of the Company to the extent that the Initiating Seller is also liable; provided, however, that, (i) except with respect to individual representations, warranties, covenants, indemnities and other agreements of holders of Units, the aggregate amount of such liability shall not exceed the lesser of (a) such Selling Member's pro rata portion of any such liability, in accordance with such Selling Member's portion of the total value of Interests included in the sale or (b) the proceeds to such Selling Member as a result of such sale and (ii) with respect to individual representations, warranties, covenants, indemnities and other agreements of holders of Interests, the aggregate amount of such liability shall not exceed the proceeds to such Selling Member as a result of such sale.

12.4.3 Closing The closing of a sale pursuant to Section 12.1, 12.2 or 12.3 shall take place at such time and place as the Initiating Seller shall specify by reasonable advance notice to each Selling Member. It is understood and agreed that the Initiating Seller shall not have any liability to any other Member arising from, relating to or in connection with any proposed transaction which has been the subject of a Tag-Along Notice, whether or not such proposed transaction is consummated, other than liability for breach of the applicable provisions of this Agreement.

12.4.4 Remain Subject Units transferred pursuant to Sections 12.1, 12.2 or 12.3 shall remain subject to the provisions of this Agreement.

12.5 Liquidity Options.

12.5.1 Put.

(a) Put Notice. Each Minority Member (including for the purposes of this Section 12.5, their respective Permitted Transferees that have become Members) may, by giving written notice (the "Put Notice") to NBM at any time during a Put Election Period, elect to sell to NBM up to the (x) Put Fraction multiplied by (y) Put Base Amount of such Member (each such Member delivering a Put Notice, for purposes of this Section 12.5, a "Putting Member", and the number of Units specified in a Put Notice shall be the "Put Units"). All Put Units referred to in a Put Notice shall be valued at Fair Value as determined pursuant to Section 12.5.3 Putting Members with respect to a particular Put Date are referred to herein as the "Put Member(s)". By delivering a Put Notice, the Putting Member is, subject to Section 12.5.3(e), irrevocably committing to sell to NBM (or the Company, as provided in Section 12.4.2 below) the Put Units specified in the Put Notice. Each Member hereby agrees to be bound by the terms of any Put Notice delivered in accordance with this Agreement.

(b) Put Period.

(i) Each Putting Member (together with its respective Permitted Transferees that have become Members) shall be eligible to deliver a Put Notice in accordance with Section 12.5.1(a) (A) during the period commencing on January 1, 2023, and ending on January 31, 2023, and thereafter, annually during each January thereafter (the "Annual Trigger") and (B) to the extent NBM remains a Member, if a NBM Change of Control occurs, within 60 days of the NBM Change of Control (the "COC Trigger"); provided, however, that upon delivery of notice to the Minority Members that a lender or the agent holding a Permitted Financing Pledge intend to exercise remedies thereunder that will result in an NBM Change of Control (such notice being an "Enforcement Notice"), each Putting Member (together with its respective Permitted Transferees that have become Members) shall instead be required to deliver a Put Notice in accordance with Section 12.5.1(a) within ten Business Days after the date of the Enforcement Notice and any failure to deliver such Put Notice within such ten Business Day period shall be deemed a waiver of the put rights of the Putting Members and their Permitted Transferees pursuant to this Section 12.5.1(b)(i)(B) (it being acknowledged that nothing in this Section shall require any holder of a Permitted Financing Pledge to deliver any Enforcement Notice). Notwithstanding anything to the contrary herein, (1) no Putting Member may provide a Put Notice pursuant to this Section 12.5.1 with respect to less than 20% of such Putting Member's Put Base Amount, and (2) if NBM or its Permitted Transferee has notified the Putting Members and their respective Permitted Transferees that such Person has, in good faith, taken steps to sell the Company, the applicable Put Election Period shall be tolled for a period not to exceed 120 days to permit such Person to implement such sale.

(ii) With respect to USPB, USPB shall also have the right to deliver a Put Notice to NBM at any time during the period commencing on the date on which USPB is no longer obligated to deliver cattle to the Company pursuant to the Cattle Purchase and Sale Agreement (the "Cattle Agreement Trigger") and ending 180 days thereafter. With respect to New Kleinco, New Kleinco shall also have the right to deliver a Put Notice to NBM at any time during the period commencing on the date on which Klein is no longer employed by the Company (the "Klein Separation Trigger") and ending 180 days thereafter. Any Trigger is individually referred to herein as a "Put Date" and are collectively referred to here as the "Put Dates." The applicable period beginning on each Put Date shall be referred to as a "Put Election Period"; provided that if NBM or its Permitted Transferee has notified USPB, NBPCo and New Kleinco and their respective Permitted Transferees that such Person has, in good faith, taken steps to sell the Company, the applicable Put Election Period shall be tolled for a period not to exceed 120 days to permit such Person to implement such sale.

12.5.2 Call.

(a) Call Notice. NBM (including, for the purposes of this Section 12.5, its Permitted Transferees that have become Members) may, upon the occurrence of a Klein Separation Trigger or the Cattle Agreement Trigger, by giving written notice (the "Call Notice") to each of USPB or New Kleinco, as applicable, (including for purposes of this Section 12.5, their respective Permitted Transferees that have become Members) following the occurrence of either such Trigger, elect to purchase from New Kleinco or USPB, respectively, all or any portion of the Units held by New Kleinco or USPB, respectively, specified in the Call Notice (each such Member to which NBM delivers a Call Notice, for purposes of this Section 12.5, a "Call Member", and the Units identified in a Call Notice with respect to a particular Member shall be referred to as "Call Units"). All Call Units referred to in a Call Notice shall be valued at Fair Value as determined pursuant to Section 12.5.3 By delivering a Call Notice, NBM is irrevocably committing to purchase the Call Units from the Call Member. Each Member hereby agrees to be bound by the terms of any Call Notice delivered in accordance with this Agreement.

(b) Call Period. NBM shall be eligible to deliver a Call Notice in accordance with Section 12.5.2(a) with respect to all or any portion of the Units held by such Member (i) in the case of USPB, at any time (A) during the period commencing on the date of the Cattle Agreement Trigger and ending 180 days thereafter and (B) during the period commencing on the date USPB owns less than 20% of USPB's Aggregate Units and ending 180 days thereafter, and (ii) in the case of New Kleinco, at any time during the period commencing on the date of the Klein Separation Trigger and ending 180 days thereafter. The beginning dates of such periods are individually referred to herein as a "Call Date" and are collectively referred to here as the "Call Dates." The 180-day periods beginning on the Call Dates shall be referred to as a "Call Election Period"; provided that if NBM or its Permitted Transferee has notified USPB and New Kleinco and their respective Permitted Transferees that such Person has, in good faith, taken steps to sell the Company, the applicable Call Election Period shall be tolled for a period not to exceed 120 days to permit NBM to implement such sale.

12.5.3 Determination of Fair Value; Appraisal.

(a) The Fair Value of the Put/Call Units shall be as of the applicable Put/Call Date, which shall be determined by agreement between NBM, on the one hand, and the Put/Call Member(s) on the other hand, if such agreement can be reached within ten Business Days after the delivery of the Put Notice or Call Notice, as the case may be.

(b) If NBM and the Put/Call Member(s) are unable to agree on the Fair Value of the Put/Call Units as of the applicable Put/Call Date within such period, NBM and Jefferies or, if (i) USPB is a Putting Member or a Call Member and (ii) Jefferies is not a Putting Member, USPB will each designate an investment bank from the list of advisors identified in the letter agreement, dated as of June 5, 2018, among NBM and the Minority Members (each, a "Valuator") to determine their estimate of the Fair Value of the Put/Call Units as of the applicable Put/Call Date, such estimate of Fair Value to be delivered by each Valuator no later than 30 Business Days after such Valuator's engagement.

(i) If the higher of the estimated Fair Values as determined by the Valuators is equal to or less than 110% of the lower of the estimated Fair Values as determined by the Valuators, then the Fair Value shall be finally determined to be equal to (i) (x) the higher estimate plus (y) the lower estimate divided by (ii) two.

(ii) If the higher of the estimated Fair Values as determined by the Valuators is greater than 110% of the lower of the estimated Fair Values as determined by the Valuators, then Jefferies shall select a third advisor from a list of five advisors (excluding the Valuators) to be selected by NBM from the list of advisors identified in the letter agreement, dated as of June 5, 2018, among NBM and the Minority Members (the "Resolving Firm").

(iii) The Resolving Firm shall determine its estimate of the Fair Value of the Put/Call Units as of the applicable Put/Call Date, such estimate of Fair Value to be delivered by the Resolving Firm each advisor no later than 30 Business Days after such Resolving Firm's engagement.

(iv) If the Resolving Firm's estimate of Fair Value is equal to or between the estimate of Fair Values made by the initial two Valuators, then the Resolving Firm's estimate of the Fair Value shall be the finally determined Fair Value.

(v) If the Resolving Firm's estimate of Fair Value is not between the estimate of Fair Values made by the initial two Valuators, then the finally determined Fair Value shall be equal to (1) (x) the Resolving Firm's estimate of Fair Value plus (y) the estimate of Fair Value by the initial Valuator who was closest to the estimate of Fair Value by the Resolving Firm divided by two.

(c) The determination of estimated Fair Value by the Valuators and/or Resolving Firm shall be final and binding on all parties. In making their determination, each of the Valuators and the Resolving Firm shall rely solely on written submissions made by NBM and any Put/Call Member(s). The "Fair Value" with respect to a Unit shall be the fair market value of a Unit, determined on the basis of the aggregate equity value of the Company, valuing such Unit as a proportionate interest in a going concern, but without discount for marketability, lack of liquidity, minority status or otherwise. The Fair Value shall not take into account the value of the Company or NBM's Interests, in each case, reflected on NBM's books and records or financial statements, nor shall it take into account any synergies resulting from exercise of a Put.

(d) NBM shall pay the cost of the Valuator it appoints, and (i) Jefferies, if Jefferies is a Put Member, or (ii) USPB, if USPB designates a Valuator pursuant to Section 12.5.3(b), as applicable, shall pay for the other Valuator (provided that if (A) (1) Jefferies shall not be a Put Member or (2) the Fair Value is being calculated with respect to the Call Units, and (B) USPB is not designating a Valuator pursuant to Section 12.5.3(b), then the Company shall pay for the second Valuator). The Resolving Firm, if needed, shall be paid by the Company.

(e) Notwithstanding anything to the contrary herein, once the Fair Value has been determined pursuant to this Section 12.5, if the applicable Minority Member is not satisfied with the Fair Value, such Minority Member may determine not to proceed with the exercise of its put option; provided that if Jefferies did not submit a notice of exercise with respect to the put option, the Minority Members that determine not to proceed with the exercise of the put option shall reimburse the Company for their pro rata portion of the fees and expenses of the Valuator selected by Jefferies.

12.5.4 Sale Notice. Following the establishment of the Fair Value of the Put/Call Units, as of the applicable Put/Call Date, the Put/Call Member(s) shall sell, and NBM shall purchase, all of the Put/Call Units for the Fair Value of the Put/Call Units, without interest, on a date mutually agreed by NBM and the applicable Put/Call Members (the "Pay Date") that is no later than 180 days following the date that the Put Notice or Call Notice, as the case may be, was received by the applicable Party,

12.5.5 Default by NBM In the event that NBM (or its Permitted Transferee) does not fulfill its obligations with respect to a Put Notice by a Minority Member, (a) the payment owed by NBM to the applicable Minority Member shall accrue interest at a rate of 12% per annum from the six-month anniversary of the date on which NBM receives the Put Notice until paid in full, (b) beginning on the 12-month anniversary of the date on which NBM receives the Put Notice, the putting Minority Members will be entitled to receive all distributions from the Company that would have otherwise been distributed to NBM; provided that (i) if more than one Minority Member has delivered a Put Notice, each such Minority Member will be entitled to receive its pro rata share of such distributions based on the amount of Units it is putting in relation to the total amount of Units being put by all of the putting Members, and (ii) any such distributions received by a Minority Member will reduce the amount owed by NBM to such Minority Member in connection with the Put Notice on a dollar-for-dollar basis, (c) beginning on the 12-month anniversary of the date on which NBM receives the Put Notice, Jefferies will be entitled to initiate a sale process (including dual sale processes with respect to both (x) and (y) below) to (x) sell the Company or (y) find a third party to purchase NBM's Units; provided that in the event of a sale process pursuant to this clause (c) (i) Jefferies will have a right of first refusal with respect to any proposed transaction under the same terms and conditions (including price, payment conditions, representations, warranties, indemnities and holdback/escrow) offered by the proposed purchaser, (ii) NBM will be obligated to accept the purchase price resulting from any such sale process, which proceeds will be used to satisfy the outstanding amount owed by NBM with respect to all previously exercised Put Options, including any interest accrued with respect thereto (the "Outstanding Balance"), and (A) if the proceeds from such sale process are in excess of the Outstanding Balance, NBM will retain any such excess proceeds, and (B) if the proceeds from such sale process are less than the Outstanding Balance, NBM will remain liable for any such shortfall, (iii) NBM may terminate such sale process at any time by paying the Outstanding Balance in full, (iv) during such sale process, NBM will retain its management rights in the Company, but will, and will cause the Company to, fully cooperate with Jefferies in support of such sale process and (v) if no offers are received pursuant to such sale process, Jefferies will have the option to either (A) release all claims for the Outstanding Balance in exchange for receipt of NBM's membership interests or (B) retain the right to pursue NBM for the Outstanding Balance.

13. DISSOLUTION OF COMPANY

13.1 Termination of Membership. No Member shall resign or withdraw from the Company except that, subject to the restrictions set forth in Article 11, any Member may Transfer its Interest in the Company to a transferee and a transferee may become a Member in place of the Member assigning such Interest.

13.2 Events of Dissolution. The Company shall be dissolved upon the happening of any of the following events: (a) the entry of a decree of judicial dissolution under Section 18-802 of the Act, (b) the written determination of the Members holding two-thirds of the outstanding Units or (c) the disposition of all of the Company's assets.

13.3 Liquidation. Upon dissolution of the Company for any reason, the Company shall immediately commence to wind up its affairs. A reasonable period of time shall be allowed for the orderly termination of the Company's business, discharge of its liabilities, and distribution or liquidation of the remaining assets so as to enable the Company to minimize the normal losses attendant to the liquidation process. After the payment of the debts and liabilities of the Company and the establishment of reasonable reserves, any property or assets of the Company, including proceeds from the liquidation thereof, remaining upon the dissolution and liquidation of the Company shall be Distributed to the Members in accordance with Section 5.2.2 A full accounting of the assets and liabilities of the Company shall be taken and a statement thereof shall be furnished to each Member promptly after the distribution of all of the assets of the Company. Such accounting and statements shall be prepared under the direction of the Board of Managers.

13.4 No Action for Dissolution. The Members acknowledge that irreparable damage would be done to the goodwill and reputation of the Company if any Member should bring an action in court to dissolve the Company under circumstances where dissolution is not required by Section 13.2 This Agreement has been drawn carefully to provide fair treatment of all parties and equitable payment in liquidation of the Interests of all Members. Accordingly, except where the Board of Managers has failed to liquidate the Company as required by Section 13.3 and except as specifically provided in Section 18 802 of the Act, each Member hereby waives and renounces its right to initiate legal action to seek dissolution or to seek the appointment of a receiver or trustee to liquidate the Company.

13.5 No Further Claim. Upon dissolution, each Member shall have recourse solely to the assets of the Company for the return of such Member's capital, and if the Company's property remaining after payment or discharge of the debts and liabilities of the Company, including debts and liabilities owed to one or more of the Members, is insufficient to return the aggregate Capital Contributions of each Member, such Member shall have no recourse against the Company, the Board of Managers or any other Member.

14. INDEMNIFICATION

14.1 General. To the fullest extent permitted by law, the Company shall indemnify, defend and hold harmless the Board of Managers and each Manager, each Member, including the Tax Matters Member and Partnership Representative in such Member's capacities as such (as applicable), and the officers of the Company (all indemnified persons being referred to as "Indemnified Persons" for purposes of this Article 14), from any liability, loss or damage incurred by the Indemnified Person by reason of any act performed or omitted to be performed by the Indemnified Person in connection with the business of the Company, from liabilities or obligations of the Company imposed on such Person by virtue of such Person's position with the Company, including reasonable attorneys' fees and costs and any amounts expended in the settlement of any such claims of liability, loss or damage; provided, however, that if the liability, loss, damage or claim arises out of any action or inaction of an Indemnified Person, indemnification under this Section 14.1 shall be available only if (a) either (i) the Indemnified Person, at the time of such action or inaction, determined in good faith that its course of conduct was in, or not opposed to, the best interests of the Company or (ii) in the case of inaction by the Indemnified Person, the Indemnified Person did not intend its inaction to be harmful or opposed to the best interests of the Company and (b) the action or inaction did not constitute fraud or willful misconduct by the Indemnified Person; provided, further, however, that indemnification under this Section 14.1 shall be recoverable only from the assets of the Company, and not from any assets of the Members. The Company shall pay or reimburse reasonable attorneys' fees of an Indemnified Person as incurred; provided that such Indemnified Person executes an undertaking, with appropriate security if requested by the Board of Managers, to repay the amount so paid or reimbursed in the event of a final non-appealable determination by a court of competent jurisdiction that such Indemnified Person is not entitled to indemnification under this Article 14 The Company may pay for insurance covering liability of the Indemnified Persons for negligence in operation of the Company's affairs.

14.2 Exculpation. No Indemnified Person shall be liable, in damages or otherwise, to the Company or to any Member for any loss that arises out of any act performed or omitted to be performed by it, him or her pursuant to the authority granted by this Agreement if (a) either (i) the Indemnified Person, at the time of such action or inaction, determined in good faith that such Indemnified Person's course of conduct was in, or not opposed to, the best interests of the Company, or (ii) in the case of inaction by the Indemnified Person, the Indemnified Person did not intend such Indemnified Person's inaction to be harmful or opposed to the best interests of the Company and (b) the conduct of the Indemnified Person did not constitute fraud or willful misconduct by such Indemnified Person.

14.3 Persons Entitled to Indemnity. Any Person who is within the definition of Indemnified Person at the time of any action or inaction in connection with the business of the Company shall be entitled to the benefits of this Article 14 as an Indemnified Person with respect thereto, regardless of whether such Person continues to be within the definition of Indemnified Person at the time of such Indemnified Person's claim for indemnification or exculpation hereunder.

14.4 Procedure Agreements. The Company may enter into an agreement with any of its officers, or the Managers, setting forth procedures consistent with applicable law for implementing the indemnities provided in this Article 14.

14.5 Duties of Board of Managers. Without limiting applicability of any other provision of this Agreement, including without limitation the other provisions of this Article 14, which shall control notwithstanding anything to the contrary in this Section 14.5, the following provisions shall be applicable to the Board of Managers and the members thereof in their capacity as members of the Board of Managers:

(a) The Board of Managers and the Managers and the decisions of the Board of Managers shall have the benefit of the business judgment rule to the same extent as the Board of Managers, such members and such decisions would have the benefit of such rule if the Board of Managers were a board of directors of a Delaware corporation.

(b) Except as set forth in Section 14.7.3, the Managers shall have the same duties of care and loyalty as such Persons would have if such Persons were directors of a Delaware corporation but in no event shall any Manager be liable for any action or inaction for which exculpation is provided under Section 14.2.

14.6 Interested Transactions. To the fullest extent permitted by law, no member of the Board of Managers shall be deemed to have breached his duty of loyalty to the Company or the Members (and such member of the Board of Managers shall not be liable to the Company or to the Members for breach of any duty of loyalty or analogous duty) with respect to any action or inaction in connection with or relating to any transaction that was approved in accordance with Section 6.11.

14.7 Fiduciary and Other Duties.

14.7.1 An Indemnified Person acting under this Agreement shall not be liable to the Company or to any other Indemnified Person for his, her or its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict the duties (including fiduciary duties) and liabilities of an Indemnified Person otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person.

14.7.2 Notwithstanding any other provision of this Agreement or otherwise applicable law, whenever in this Agreement an Indemnified Person is permitted or required to make a decision (a) in his, her or its discretion or under a grant of similar authority, the Indemnified Person shall be entitled to consider only such interests and factors as such Indemnified Person desires, including his, her or its own interests, and shall, to the fullest extent permitted by applicable law, have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Person, or (b) in his, her or its good faith or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standards.

14.7.3 Notwithstanding any other provision of this Agreement or otherwise applicable law, other than corporate opportunities belonging to the Company, which shall be only acquiring any interest in any cattle slaughtering facilities in the United States (unless such corporate opportunity is waived by a vote of the Board of Managers, which vote shall include a majority of the Managers not appointed by Jefferies or NBM, as applicable), NBM and Jefferies (or any of their Affiliates) may each engage in any other business activities whatsoever and engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business conducted or proposed to be conducted by the Company or any of its Affiliates, and none of the Company, any of its Affiliates or any other Member (including such other Member's Affiliates) shall have any rights in, with respect to, or to be informed of such other business activities or ventures or the income or profits derived therefrom. Other than corporate opportunities belonging to the Company, which shall be only acquiring any interest in any cattle slaughtering facilities in the United States (unless such corporate opportunity is waived by a vote of the Board of Managers, which vote shall include a majority of the Managers not appointed by Jefferies or NBM, as applicable), NBM or Jefferies (or any of their Affiliates) shall not be obligated to present any business or investment opportunity to the Company or its Affiliates even if such opportunity is of a character that, if presented to the Company or such Affiliates, could be taken by the Company or such Affiliates, and NBM or Jefferies (or any of their Affiliates) shall have the right to take for its own account (individually or as a partner, member, shareholder, fiduciary or otherwise) or to recommend to any other Person any such particular business or investment opportunity

15. REPRESENTATIONS AND COVENANTS BY THE MEMBERS

Each Member hereby represents and warrants to, and agrees with, the Board of Managers, the other Members and the Company as follows:

15.1 Investment Intent. Such Member is acquiring such Member's Interest with the intent of holding the same for investment for such Member's own account and without the intent or a view of participating directly or indirectly in any distribution of such Interests within the meaning of the Securities Act or any applicable state securities laws.

15.2 Securities Regulation. Such Member acknowledges and agrees that such Member's Interest is being issued and sold in reliance on the exemption from registration under the Securities Act and exemptions contained in applicable state securities laws, and that such Member's Interest cannot and will not be sold or transferred except in a transaction that is exempt under the Securities Act and applicable state securities laws or pursuant to an effective registration statement under the Securities Act and applicable state securities laws. Such Member understands that such Member has no contractual right for the registration under the Securities Act of such Member's Interest for public sale and that, unless such Member's Interest is registered or an exemption from registration is available, such Member's Interests may be required to be held indefinitely.

15.3 Knowledge and Experience. Such Member has such knowledge and experience in financial, tax and business matters as to enable such Member to evaluate the merits and risks of such Member's investment in the Company and to make an informed investment decision with respect thereto.

15.4 Economic Risk. Such Member is able to bear the economic risk of such Member's investment in such Member's Interest.

15.5 Binding Agreement. Such Member has all requisite power and authority to enter into and perform this Agreement and this Agreement is and will remain such Member's valid and binding agreement, enforceable in accordance with its terms (subject, as to the enforcement of remedies, to any applicable bankruptcy, insolvency or other laws affecting the enforcement of creditors rights).

15.6 Tax Position. A Member will not take a position on such Member's tax returns, in any claim for refund or in any administrative or legal proceedings that is inconsistent with this Agreement or with any information return filed by the Company unless such Member provides prior written notice to the Company and consults with and considers in good faith the suggestions of the Company with respect to such position.

15.7 Information. Such Member has received all documents, books and records pertaining to an investment in the Company requested by such Member. Such Member has had a reasonable opportunity to ask questions of and receive answers concerning the Company, and all such questions have been answered to such Member's satisfaction.

15.8 Licenses and Permits. Such Member will cooperate in providing such information, in signing such documents and in taking any other action as may reasonably be requested by the Company in connection with obtaining any foreign, federal, state or local license or permit needed to operate its business or the business of any entity in which the Company invests.

16. COMPANY REPRESENTATIONS

In order to induce the Members to enter into this Agreement and to make the Capital Contributions contemplated hereby, the Company hereby represents and warrants to each Member as follows:

16.1 Duly Formed. All action of the Company necessary to authorize the effectiveness of this Agreement has been taken. The Company has been duly formed and is validly existing limited liability company under the Act, with all necessary power and authority under the Act to issue the Interests issued to the Members hereunder.

16.2 Valid Issue. The Interests issued to the Members have been duly and validly issued, and no liability for any additional Capital Contributions or for any obligations of the Company will attach thereto.

17. AMENDMENTS TO AGREEMENT

17.1 Amendments. This Agreement may be modified or amended with the prior written consent of the Board of Managers, subject to Sections 6.6 and 7.4.2 Notwithstanding the foregoing provisions of this Section 17.1: (1) this Section 17.1 may not be amended without the approval of each Member; and (2) other provisions of this Agreement may not be amended without the approval of each Member affected if the amendment (a) would reduce any such Member's Interests or would reduce the allocation to such Member of Net Profit or Net Loss, or would reduce the Distributions of cash or property to such Member from that which is provided or contemplated herein, unless such amendment treats all Members ratably based on their Interests and such amendment is being executed to reflect (i) any dilution in such Member's Interest resulting from the issuance of Units contemplated by Article 3 or (ii) the admission of a new Member pursuant to Article 11; or (b) would increase such Person's obligation to make Capital Contributions or obligation with respect to other liabilities. Sections 14.1, 14.2 and 14.3 of this Agreement may not be amended in a manner to reduce or restrict the indemnification rights provided in Sections 14.1, 14.2 and 14.3 unless any Indemnified Person that is a Member has consented; provided, however that such indemnification rights with respect to any officer or manager of the Company may be so amended, on a prospective basis with respect to acts occurring after the date of such amendment only, upon 30 days prior written notice to such officer. All proposed amendments to this Agreement will be sent to each Member within a reasonable period of time prior to being presented for approval whether by the Board of Managers or the Members and also promptly after the effectiveness thereof.

17.2 Corresponding Amendment of Certificate of Formation. The Board of Managers shall cause to be prepared and filed any amendment to the Certificate of Formation that may be required to be filed under the Act as a consequence of any amendment to this Agreement.

17.3 Binding Effect. Any modification or amendment to this Agreement pursuant to this Article 17 shall be binding on all Members.

18. GENERAL

18.1 Successors; Delaware Law; Etc. This Agreement: (a) shall be binding upon the executors, administrators, estates, heirs and legal successors and permitted assigns of the Members, (b) shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws, and (c) may be executed in more than one counterpart (including by electronic transmission or attachment to e-mail), all of which together shall constitute one agreement. This Agreement constitutes the entire agreement among the parties with respect to the formation of, and the terms and conditions relating to the management, operation, business and affairs of, the Company, and supersedes all prior oral and written, and all contemporaneous oral, understandings, negotiations and agreements with respect to the subject matter hereof.

18.2 Notices, Etc. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given upon personal delivery or receipt (which may be evidenced by a return receipt if sent by registered mail or by signature if delivered by courier or delivery service), addressed (a) if to any Member, at the address of such Member set forth in the records of the Company or at such other address as such Member shall have furnished to the Company in writing as the address to which notices are to be sent hereunder and (b) if to the Company or to the Board of Managers to it at: 12200 N. Ambassador Drive, Kansas City, MO 64163, with copies to (i) Jefferies (which copy shall not constitute notice to Jefferies) at 520 Madison Avenue, New York, NY 10022, Attention: President and (ii) NBM Ultimate Parent (which copy shall not constitute notice to NBM or NBM Ultimate Parent) at Rua Queiroz Filho, 1.560 - Torre Sabiá, 3º andar - Vila Hamburguesa, CEP: 05319-000 - São Paulo - Brazil, Attention: Legal Vice-President.

18.3 Execution of Documents. From time to time after the Effective Date, upon the request of the Board of Managers, each Member shall perform, or cause to be performed, all such additional acts, and shall execute and deliver, or cause to be executed and delivered, all such additional instruments and documents, as may be required to effectuate the purposes of this Agreement. Each Member, including each new and substituted Member, by the execution of this Agreement or by agreeing in writing to be bound by this Agreement, irrevocably constitutes and appoints the Board of Managers or any Person designated by the Board of Managers to act on such Member's behalf for purposes of this Section 18.3 as such Member's true and lawful attorney-in-fact with full power and authority in such Member's name and stead to execute, deliver, swear to, file and record at the appropriate public offices such documents as may be necessary or appropriate to carry out this Agreement, including:

(a) all certificates and other instruments (specifically including counterparts of this Agreement), and any amendment thereof, that the Board of Managers deems appropriate to qualify or to continue the Company as a limited liability company in any jurisdiction in which the Company may conduct business or in which such qualification or continuation is, in the opinion of the Board of Managers, necessary to protect the limited liability of the Members;

(b) all amendments to this Agreement adopted in accordance with the terms hereof and all instruments that the Board of Managers deems appropriate to reflect a change or modification of the Company in accordance with the terms of this Agreement; and

(c) all conveyances and other instruments that the Board of Managers deems appropriate to reflect the dissolution of the Company.

The appointment by each Manager or any Person designated by the Board of Managers to act on its behalf for purposes of this Section 18.3 as such Member's attorney-in-fact shall be deemed to be a power coupled with an interest, in recognition of the fact that each of the Members under this Agreement will be relying upon the power of the Board of Managers to act as contemplated by this Agreement in any filing and other action by him, her or it on behalf of the Company, and shall survive the bankruptcy, dissolution, death, adjudication of incompetence or insanity of any Member giving such power and the transfer or assignment of all or any part of such Member's Interests; provided, however, that in the event of a Transfer by a Member of all of its Interest, the power of attorney given by the transferor shall survive such assignment only until such time as the transferee shall have been admitted to the Company as a substituted Member and all required documents and instruments shall have been duly executed, filed, and recorded to effect such substitution.

18.4 Consent to Jurisdiction. Each of the parties agrees that all actions, suits or proceedings arising out of or based upon this Agreement or the subject matter hereof shall be brought and maintained exclusively in the federal courts located in the State of Delaware. Each of the parties by execution hereof (a) hereby irrevocably submits to the jurisdiction of the federal courts located in the State of Delaware for the purpose of any action, suit or proceeding arising out of or based upon this Agreement or the subject matter hereof and (b) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such action, suit or proceeding, any claim that such party is not subject personally to the jurisdiction of the above-named court, that he or it is immune from extraterritorial injunctive relief or other injunctive relief, that such party's property is exempt or immune from attachment or execution, that any such action, suit or proceeding may not be brought or maintained in one of the above-named court should be dismissed on the grounds of forum non conveniens, should be transferred to any court other than one of the above-named court, should be stayed by virtue of the pendency of any other action, suit or proceeding in any court other than one of the above-named court, or that this Agreement or the subject matter hereof may not be enforced in or by any of the above-named court. Each of the parties hereto hereby consents to service of process in any such suit, action or proceeding in any manner permitted by the laws of the State of Delaware, agrees that service of process by registered or certified mail, return receipt requested, at the address specified in or pursuant to Section 18.2 hereof is reasonably calculated to give actual notice and waives and agrees not to assert by way of motion, as a defense or otherwise, in any such action, suit or proceeding any claim that service of process made in accordance with Section 18.2 hereof does not constitute good and sufficient service of process. The provisions of this Section 18.4 shall not restrict the ability of any party to enforce in any court any judgment obtained in the federal courts located in the State of Delaware.

18.5 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE COMPANY AND EACH MEMBER HEREBY WAIVES, AND COVENANTS THAT SUCH PERSON WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE.

18.6 Specific Enforcement; Remedies; Waiver. Each party hereto acknowledges and agrees that each party hereto will be irreparably damaged in the event any of the provisions of this Agreement are not performed by the parties in accordance with their specific terms or are otherwise breached. Accordingly, it is agreed that each of the Company and each Member shall be entitled to an injunction to prevent breaches of this Agreement, and to specific enforcement of this Agreement and its terms and provisions in any action instituted to enforce the provisions hereof. The rights and remedies provided by this Agreement are cumulative, and the use of any one right or remedy by any party will not preclude or waive such party's right to use any or all other remedies. Said rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise. Neither any failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or any of the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable Laws, (a) no claim or right arising out of this Agreement or any of the documents referred to in this Agreement can be waived by a party, in whole or in part, unless made in a writing signed by the party against whom such waiver is sought to be enforced; (b) a waiver given by a party will only be applicable to the specific instance for which it is given; and (c) no notice to or demand on a party will (i) waive or otherwise affect any obligation of that party or (ii) affect the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

18.7 Severability. If any provision of this Agreement is determined by a court to be invalid or unenforceable, that determination shall not affect the other provisions hereof, each of which shall be construed and enforced as if the invalid or unenforceable portion were not contained herein. Such invalidity or unenforceability shall not affect any valid and enforceable application thereof, and each such provision shall be deemed to be effective, operative, made, entered into or taken in the manner and to the full extent permitted by law.

18.8 Table of Contents, Headings. The table of contents and headings used in this Agreement are used for administrative convenience only and do not constitute substantive matter to be considered in construing this Agreement.

18.9 No Third Party Rights. Except for the provisions of Section 7.15, the provisions of this Agreement are for the benefit of the Company, the Board of Managers and the Members and no other Person, including creditors of the Company, shall have any right or claim against the Company, the Board of Managers or any Member by reason of this Agreement or any provision hereof or be entitled to enforce any provision of this Agreement.

[REMAINDER OF THIS PAGE BLANK]

THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE EFFECTIVE DATE.

JEFFERIES FINANCIAL GROUP INC.

(F/K/A LEUCADIA NATIONAL CORPORATION)

By: /s/ Brian P. Friedman

Name: Brian Friedman

Title: President

U.S. PREMIUM BEEF, LLC

By: /s/ Stanley D. Linville

Name: Stanley D. Linville

Title: Chief Executive Officer, USPB

NBPCO HOLDINGS, LLC

By: /s/ Rich Jochum

Name: Rich Jochum

Title: Vice President

TMK HOLDINGS, LLC

By: /s/ Timothy M. Klein

Name: Timothy M. Klein

Title: Manager

NBM US HOLDINGS, INC.

By: /s/ Jose Eduardo de Oliveira

Name: Jose Eduardo de Oliveira

Title: President

NATIONAL BEEF PACKING COMPANY, LLC

By: /s/ Timothy M. Klein

Name: Timothy M. Klein

Title: CEO & President

Exhibit A

MEMBERS OF THE COMPANY, CAPITAL CONTRIBUTIONS AND ISSUED UNITS AND PERCENTAGE INTEREST

Member	Units	Capital Contributions¹	Percentage Interest
NBM	5,448.40	$129,266,974	51.0000%
Jefferies	3,330.09	$79,008,735	31.1715%
USPB	1,610.26	$38,204,474	15.0729%
NBPCo	224.71	$5,331,376	2.1034%
New Kleinco	69.68	$1,653,096	0.6522%
TOTAL	10,683.14	$253,464,655	100%

[1] Consistent with Section 3.1, the amount of Capital Contributions set forth opposite each Member's name reflects that Member's pro rata share, by Percentage Interest, of all Capital Contributions made by all Members to the Company (including, with respect to any Member that purchased its Units from another Member, the Capital Contributions that had been made by that other Member). Each Member's Capital Account shall be computed and adjusted pursuant to the terms of the Agreement and may differ from the amount shown in this column.

Exhibit B

ITEMS REQUIRING JEFFERIES/NBM APPROVAL

Approval of any capital expenditures in excess of $60 million in the aggregate in any Fiscal Year;
Public offerings or material acquisitions, mergers, joint ventures or similar transactions by the Company to the extent not included in the annual Capex budget;
Sale, lease, license or other disposition of substantially all of the assets of the Company;
Related party transactions by the Company that are (a) on an arm's length basis and would result in annual payments by or to the Company in excess of $5,000,000 or (b) not on an arm's length basis;
Fundamental changes in the scope of the Company's business;
Amendments to the Company's Certificate of Formation or Limited Liability Company Agreement;
Issuance by the Company of equity securities or other convertible securities;
Incurrence of debt by the Company in excess of the Company's existing lines of credit on the 2018 Effective Date;
Non-pro rata payment of dividends, Distributions and other payments by the Company to any Member of the Company (including in consideration for the redemption or repurchase of any Units);
Appointment or removal of the Company's auditors (to the extent the appointment is of an auditor that is not one of the following auditors: Deloitte, PricewaterhouseCoopers, Ernst & Young, KPMG, BDO International and Grant Thornton);
Any appointment or removal of the Company's tax accountants;
Any reduction to the Company's Tax Distribution rate to less than 54%; provided that Jefferies must provide an economic justification in order to veto such a reduction; provided, further, that maximizing cash distributions to Members shall be a valid economic justification;
Any splits, Distributions, combinations, subdivisions, recapitalizations or similar changes to the capitalization of the Company;
Any conversion of the Company from a limited liability company, any change in the Company's status as a partnership for U.S. federal income tax purposes; and
Any settlement or compromise of any tax audit, dispute or controversy or proceeding relating to the Company with a taxing authority, and any tax election that is inconsistent with past practice and not required by applicable law, that would reasonably be expected to have a material, adverse and disproportionate effect on Jefferies, versus NBM and the other Members.

Exhibit C

MATTERS REQUIRING APPROVAL OF THE JEFFERIES MANAGERS AND THE USPB MANAGER

The full or partial withdrawal by the Company or Ohio Beef from the UFCW Heartland Pension Fund solely in the event that NBM Ultimate Parent is no longer rated by any of Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody's Investors Service, Inc., or the Fitch Group.

EX-31.1 3 exhibit31-1.htm Exhibit 31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Stanley D. Linville, certify that:

1. I have reviewed this annual report on Form 10-K of U.S. Premium Beef, LLC;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:

/s/ Stanley D. Linville

Stanley D. Linville

Chief Executive Officer

Date: March 13, 2019

EX-31.2 4 exhibit31-2.htm Exhibit 31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Scott J. Miller, certify that:

1. I have reviewed this annual report on Form 10-K of U.S. Premium Beef, LLC;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:

/s/ Scott J. Miller

Scott J. Miller

Chief Financial Officer

Date: March 13, 2019

EX-32.1 5 exhibit32-1.htm Exhibit 32.1

EXHIBIT 32.1

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of U.S. Premium Beef, LLC (the "Company") on Form 10-K for the period ended December 29, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Stanley D. Linville, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:

/s/ Stanley D. Linville

Stanley D. Linville

Chief Executive Officer

Date: March 13, 2019

EX-32.2 6 exhibit32-2.htm Exhibit 32.2

EXHIBIT 32.2

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of U.S. Premium Beef, LLC (the "Company") on Form 10-K for the period ended December 29, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Scott J. Miller, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:

/s/ Scott J. Miller

Scott J. Miller

Chief Financial Officer

Date: March 13, 2019

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5687000 0 0

NOTE 2.    Basis of Presentation and Accounting Policies   Basis of Presentation        USPB’s investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control.   Fiscal Year        The Company’s fiscal year ends on the last Saturday in December. The Company files annual reports for each 52 week or 53 week period ended on the last Saturday in December.   Use of Estimates        The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments.   Cash and Cash Equivalents        The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.   Investment in National Beef Packing Company, LLC        USPB’s 15.0729% investment in NBP accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control.        For fiscal years 2018 and 2017, USPB conducted an evaluation to determine if its investment in NBP was impaired as of the end of the fiscal year in accordance with Auditing Standards Codification (ASC) 323 Investments Equity Method and Joint Ventures. The evaluation included both quantitative and qualitative factors. The quantitative approach computed the fair value of the investment using a market based approach, and resulted in a fair value that exceeded the carrying value. As a result of the analysis, USPB concluded that the carrying value of its investment in NBP was not impaired as of December 29, 2018 and December 30, 2017.        USPB presents the distributions received from its equity method investee within the Statement of Cash Flows in accordance with ASU 2016-15-Statement of Cash Flows (Topic 230); Classification of Certain Cash Receipts and Cash Payments, under the cumulative earnings approach.   Property, Plant, and Equipment        Property, plant, and equipment are recorded at cost. Property, plant, and equipment are depreciated principally on a straight-line basis over the estimated useful life (based upon original acquisition date) of the individual asset by major asset class as follows:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="background-color: #C6FFFF"> <td>Machinery and equipment</td> <td style="width: 29%">2 to 15 years</td></tr> <tr> <td>Furniture and fixtures</td> <td>3 to 5 years</td></tr> <tr style="background-color: #C6FFFF"> <td>Trailers and automotive equipment</td> <td>2 to 4 years</td></tr> </table>        Upon disposition of these assets, any resulting gain or loss is included in other, net. Normal repairs and maintenance costs are charged to Selling, general and administrative expenses, as incurred.        A summary of cost and accumulated depreciation for property, plant, and equipment as of December 29, 2018 and December 30, 2017 follows (thousands of dollars):   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr> <td> </td> <td colspan="2" style="text-align: center">December 29, 2018 </td> <td colspan="2" style="text-align: center">December 30, 2017 </td></tr> <tr style="background-color: #C6FFFF"> <td>Machinery and equipment</td> <td style="text-align: right">$</td> <td style="text-align: right">24</td> <td style="text-align: right">$</td> <td style="text-align: right">24</td></tr> <tr> <td>Furniture and fixtures</td> <td> </td> <td style="text-align: right">147</td> <td> </td> <td style="text-align: right">140</td></tr> <tr style="background-color: #C6FFFF"> <td>Trailers and automotive equipment</td> <td> </td> <td style="text-align: right">29</td> <td> </td> <td style="text-align: right">59</td></tr> <tr> <td>   Total property, plant, and equipment, at cost</td> <td> </td> <td style="text-align: right">200</td> <td> </td> <td style="text-align: right">223</td></tr> <tr style="background-color: #C6FFFF"> <td>Accumulated depreciation</td> <td> </td> <td style="text-align: right">183</td> <td> </td> <td style="text-align: right">201</td></tr> <tr> <td>   Property, plant, and equipment, net</td> <td style="text-align: right">$</td> <td style="text-align: right">17</td> <td style="text-align: right">$</td> <td style="text-align: right">22</td></tr> </table>        Depreciation expense was immaterial for fiscal years ended December 29, 2018 and December 30, 2017.   New Accounting Standard        In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases. The new standard requires the recognition of all leases that are longer than one year on the balance sheet, which will result in the recognition of a right-of-use asset and a corresponding lease liability. The right-of-use asset and lease liability will be measured initially using the present value of the remaining lease payments. The new standard is effective for annual and interim periods beginning after December 15, 2018. The new guidance will not have a material impact on our financial statements.   In terms of practical expedients, USPB accepts:   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">·</td><td>Its original determination of whether a contract contained a lease.</td></tr></table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">·</td><td>That a subsequent review of existing contracts is not necessary.</td></tr></table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">·</td><td>That USPB does not have to reassess the initial direct costs assigned to leases under previous leasing guidance as USPB did not occur any initial direct costs for the leases subject to previous leasing guidance.</td></tr></table>   Distributions Payable        USPB utilizes a controlled disbursement account to fund cash distribution checks presented for payment by the holder. Checks issued that have not cleared are included in distributions payable and the change in the related balances are reflected in financing activities on the statement of cash flows. Distributions payable totaled $5.7 million and $28.3 million as of December 29, 2018 and December 30, 2017, respectively.   Income Taxes        Effective August 29, 2004, the Company converted to an LLC, and under this structure, taxes are not provided at the Company level because the results of operations are included in the taxable income of the individual members.   Selling, General, and Administrative        Selling expenses consist primarily of salaries, bonuses, phantom unit option expense, trade promotions, advertising, commissions and other marketing costs. General and administrative costs consist primarily of general management, insurance and professional expenses.   Noncompetition Payments        The former CEO’s employment agreement provided for him to receive noncompetition payments in connection with the Leucadia Transaction. During fiscal years 2018 and 2017, the former CEO was paid $844,938 and $853,263, respectively, in noncompetition payments. He will continue to receive noncompetition payments of approximately $845,000 per year during calendar years 2019 through 2021.        The current CEO’s employment agreement provides for him to receive noncompetition payments for a twelve month period following his termination of employment with USPB.        As of December 29, 2018 and December 30, 2017, the Company had accrued $2.7 million and $3.4 million, respectively, for the noncompetition agreements. The current and long-term portion of the accrued amounts are included in Accrued compensation and benefits and Other liabilities, respectively, on the balance sheet.   Business Segments        USPB is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, USPB has one reportable segment.   Earnings Per Unit        Under the LLC structure, earnings of the Company are to be distributed to unitholders based on their proportionate share of underlying equity, and, as a result, earnings per unit (EPU) has been presented in the accompanying Statement of Operations and in the table that follows.        Basic EPU excludes dilution and is computed by first allocating 10% of net income or loss attributable to USPB to Class A units and the remaining 90% is allocated to Class B units. Net income or loss allocated to the Class A and Class B units is then divided by the weighted-average number of Class A and Class B units outstanding for the period to determine the basic EPU for each respective class of unit.        Diluted EPU reflects the potential dilution that could occur to the extent that any outstanding dilutive Class A or Class B units were exercised. There are no potentially dilutive Class A or Class B units outstanding.   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr> <td>Income Per Unit Calculation</td> <td colspan="2" style="text-align: center">52 weeks ended</td> <td> </td> <td colspan="2" style="text-align: center">52 weeks ended</td> <td> </td> <td colspan="2" style="text-align: center">53 weeks ended</td> <td> </td></tr> <tr> <td>(thousands of dollars, except unit and per unit data)</td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 29, 2018</td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 30, 2017</td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 31, 2016</td> <td> </td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td colspan="10">Basic and diluted earnings per unit:</td></tr> <tr> <td>Income attributable to USPB available to</td> <td style="width: 2%"> </td> <td style="width: 9%"> </td> <td style="width: 3%"> </td> <td style="width: 2%"> </td> <td style="width: 9%"> </td> <td style="width: 3%"> </td> <td style="width: 2%"> </td> <td style="width: 9%"> </td> <td style="width: 3%"> </td></tr> <tr style="background-color: #C6FFFF"> <td>   unitholders (numerator)</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr> <td>      Class A</td> <td style="text-align: center">$</td> <td style="text-align: right">8,659</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">5,748</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">4,637</td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>      Class B</td> <td style="text-align: center">$</td> <td style="text-align: right">77,929</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">51,733</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">41,731</td> <td> </td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td colspan="10">Weighted average outstanding units (denominator)</td></tr> <tr> <td>   Class A</td> <td> </td> <td style="text-align: right">735,385</td> <td> </td> <td> </td> <td style="text-align: right">735,385</td> <td> </td> <td> </td> <td style="text-align: right">735,385</td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>   Class B</td> <td> </td> <td style="text-align: right">755,385</td> <td> </td> <td> </td> <td style="text-align: right">755,385</td> <td> </td> <td> </td> <td style="text-align: right">755,385</td> <td> </td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>Per unit amount</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr> <td>   Class A</td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">11.77</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">7.82</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6.31</td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>   Class B</td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">103.16</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">68.49</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">55.24</td> <td> </td></tr> </table>

Basis of Presentation        USPB’s investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control.

Fiscal Year        The Company’s fiscal year ends on the last Saturday in December. The Company files annual reports for each 52 week or 53 week period ended on the last Saturday in December.

Use of Estimates        The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments.

Cash and Cash Equivalents        The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Investment in National Beef Packing Company, LLC        USPB’s 15.0729% investment in NBP accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control.        For fiscal years 2018 and 2017, USPB conducted an evaluation to determine if its investment in NBP was impaired as of the end of the fiscal year in accordance with Auditing Standards Codification (ASC) 323 Investments Equity Method and Joint Ventures. The evaluation included both quantitative and qualitative factors. The quantitative approach computed the fair value of the investment using a market based approach, and resulted in a fair value that exceeded the carrying value. As a result of the analysis, USPB concluded that the carrying value of its investment in NBP was not impaired as of December 29, 2018 and December 30, 2017.        USPB presents the distributions received from its equity method investee within the Statement of Cash Flows in accordance with ASU 2016-15-Statement of Cash Flows (Topic 230); Classification of Certain Cash Receipts and Cash Payments, under the cumulative earnings approach.

Property, Plant, and Equipment        Property, plant, and equipment are recorded at cost. Property, plant, and equipment are depreciated principally on a straight-line basis over the estimated useful life (based upon original acquisition date) of the individual asset by major asset class as follows:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="background-color: #C6FFFF"> <td>Machinery and equipment</td> <td style="width: 29%">2 to 15 years</td></tr> <tr> <td>Furniture and fixtures</td> <td>3 to 5 years</td></tr> <tr style="background-color: #C6FFFF"> <td>Trailers and automotive equipment</td> <td>2 to 4 years</td></tr> </table>        Upon disposition of these assets, any resulting gain or loss is included in other, net. Normal repairs and maintenance costs are charged to Selling, general and administrative expenses, as incurred.        A summary of cost and accumulated depreciation for property, plant, and equipment as of December 29, 2018 and December 30, 2017 follows (thousands of dollars):   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr> <td> </td> <td colspan="2" style="text-align: center">December 29, 2018 </td> <td colspan="2" style="text-align: center">December 30, 2017 </td></tr> <tr style="background-color: #C6FFFF"> <td>Machinery and equipment</td> <td style="text-align: right">$</td> <td style="text-align: right">24</td> <td style="text-align: right">$</td> <td style="text-align: right">24</td></tr> <tr> <td>Furniture and fixtures</td> <td> </td> <td style="text-align: right">147</td> <td> </td> <td style="text-align: right">140</td></tr> <tr style="background-color: #C6FFFF"> <td>Trailers and automotive equipment</td> <td> </td> <td style="text-align: right">29</td> <td> </td> <td style="text-align: right">59</td></tr> <tr> <td>   Total property, plant, and equipment, at cost</td> <td> </td> <td style="text-align: right">200</td> <td> </td> <td style="text-align: right">223</td></tr> <tr style="background-color: #C6FFFF"> <td>Accumulated depreciation</td> <td> </td> <td style="text-align: right">183</td> <td> </td> <td style="text-align: right">201</td></tr> <tr> <td>   Property, plant, and equipment, net</td> <td style="text-align: right">$</td> <td style="text-align: right">17</td> <td style="text-align: right">$</td> <td style="text-align: right">22</td></tr> </table>        Depreciation expense was immaterial for fiscal years ended December 29, 2018 and December 30, 2017.

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="background-color: #C6FFFF"> <td>Machinery and equipment</td> <td style="width: 29%">2 to 15 years</td></tr> <tr> <td>Furniture and fixtures</td> <td>3 to 5 years</td></tr> <tr style="background-color: #C6FFFF"> <td>Trailers and automotive equipment</td> <td>2 to 4 years</td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr> <td> </td> <td colspan="2" style="text-align: center">December 29, 2018 </td> <td colspan="2" style="text-align: center">December 30, 2017 </td></tr> <tr style="background-color: #C6FFFF"> <td>Machinery and equipment</td> <td style="text-align: right">$</td> <td style="text-align: right">24</td> <td style="text-align: right">$</td> <td style="text-align: right">24</td></tr> <tr> <td>Furniture and fixtures</td> <td> </td> <td style="text-align: right">147</td> <td> </td> <td style="text-align: right">140</td></tr> <tr style="background-color: #C6FFFF"> <td>Trailers and automotive equipment</td> <td> </td> <td style="text-align: right">29</td> <td> </td> <td style="text-align: right">59</td></tr> <tr> <td>   Total property, plant, and equipment, at cost</td> <td> </td> <td style="text-align: right">200</td> <td> </td> <td style="text-align: right">223</td></tr> <tr style="background-color: #C6FFFF"> <td>Accumulated depreciation</td> <td> </td> <td style="text-align: right">183</td> <td> </td> <td style="text-align: right">201</td></tr> <tr> <td>   Property, plant, and equipment, net</td> <td style="text-align: right">$</td> <td style="text-align: right">17</td> <td style="text-align: right">$</td> <td style="text-align: right">22</td></tr> </table>

New Accounting Standard        In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases. The new standard requires the recognition of all leases that are longer than one year on the balance sheet, which will result in the recognition of a right-of-use asset and a corresponding lease liability. The right-of-use asset and lease liability will be measured initially using the present value of the remaining lease payments. The new standard is effective for annual and interim periods beginning after December 15, 2018. The new guidance will not have a material impact on our financial statements.   In terms of practical expedients, USPB accepts:   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">·</td><td>Its original determination of whether a contract contained a lease.</td></tr></table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">·</td><td>That a subsequent review of existing contracts is not necessary.</td></tr></table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">·</td><td>That USPB does not have to reassess the initial direct costs assigned to leases under previous leasing guidance as USPB did not occur any initial direct costs for the leases subject to previous leasing guidance.</td></tr></table>

Distributions Payable        USPB utilizes a controlled disbursement account to fund cash distribution checks presented for payment by the holder. Checks issued that have not cleared are included in distributions payable and the change in the related balances are reflected in financing activities on the statement of cash flows. Distributions payable totaled $5.7 million and $28.3 million as of December 29, 2018 and December 30, 2017, respectively.

Income Taxes        Effective August 29, 2004, the Company converted to an LLC, and under this structure, taxes are not provided at the Company level because the results of operations are included in the taxable income of the individual members.

Selling, General, and Administrative        Selling expenses consist primarily of salaries, bonuses, phantom unit option expense, trade promotions, advertising, commissions and other marketing costs. General and administrative costs consist primarily of general management, insurance and professional expenses.

Noncompetition Payments        The former CEO’s employment agreement provided for him to receive noncompetition payments in connection with the Leucadia Transaction. During fiscal years 2018 and 2017, the former CEO was paid $844,938 and $853,263, respectively, in noncompetition payments. He will continue to receive noncompetition payments of approximately $845,000 per year during calendar years 2019 through 2021.        The current CEO’s employment agreement provides for him to receive noncompetition payments for a twelve month period following his termination of employment with USPB.        As of December 29, 2018 and December 30, 2017, the Company had accrued $2.7 million and $3.4 million, respectively, for the noncompetition agreements. The current and long-term portion of the accrued amounts are included in Accrued compensation and benefits and Other liabilities, respectively, on the balance sheet.

Business Segments        USPB is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, USPB has one reportable segment.

Earnings Per Unit        Under the LLC structure, earnings of the Company are to be distributed to unitholders based on their proportionate share of underlying equity, and, as a result, earnings per unit (EPU) has been presented in the accompanying Statement of Operations and in the table that follows.        Basic EPU excludes dilution and is computed by first allocating 10% of net income or loss attributable to USPB to Class A units and the remaining 90% is allocated to Class B units. Net income or loss allocated to the Class A and Class B units is then divided by the weighted-average number of Class A and Class B units outstanding for the period to determine the basic EPU for each respective class of unit.        Diluted EPU reflects the potential dilution that could occur to the extent that any outstanding dilutive Class A or Class B units were exercised. There are no potentially dilutive Class A or Class B units outstanding.   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr> <td>Income Per Unit Calculation</td> <td colspan="2" style="text-align: center">52 weeks ended</td> <td> </td> <td colspan="2" style="text-align: center">52 weeks ended</td> <td> </td> <td colspan="2" style="text-align: center">53 weeks ended</td> <td> </td></tr> <tr> <td>(thousands of dollars, except unit and per unit data)</td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 29, 2018</td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 30, 2017</td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 31, 2016</td> <td> </td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td colspan="10">Basic and diluted earnings per unit:</td></tr> <tr> <td>Income attributable to USPB available to</td> <td style="width: 2%"> </td> <td style="width: 9%"> </td> <td style="width: 3%"> </td> <td style="width: 2%"> </td> <td style="width: 9%"> </td> <td style="width: 3%"> </td> <td style="width: 2%"> </td> <td style="width: 9%"> </td> <td style="width: 3%"> </td></tr> <tr style="background-color: #C6FFFF"> <td>   unitholders (numerator)</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr> <td>      Class A</td> <td style="text-align: center">$</td> <td style="text-align: right">8,659</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">5,748</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">4,637</td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>      Class B</td> <td style="text-align: center">$</td> <td style="text-align: right">77,929</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">51,733</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">41,731</td> <td> </td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td colspan="10">Weighted average outstanding units (denominator)</td></tr> <tr> <td>   Class A</td> <td> </td> <td style="text-align: right">735,385</td> <td> </td> <td> </td> <td style="text-align: right">735,385</td> <td> </td> <td> </td> <td style="text-align: right">735,385</td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>   Class B</td> <td> </td> <td style="text-align: right">755,385</td> <td> </td> <td> </td> <td style="text-align: right">755,385</td> <td> </td> <td> </td> <td style="text-align: right">755,385</td> <td> </td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>Per unit amount</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr> <td>   Class A</td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">11.77</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">7.82</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6.31</td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>   Class B</td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">103.16</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">68.49</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">55.24</td> <td> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr> <td>Income Per Unit Calculation</td> <td colspan="2" style="text-align: center">52 weeks ended</td> <td> </td> <td colspan="2" style="text-align: center">52 weeks ended</td> <td> </td> <td colspan="2" style="text-align: center">53 weeks ended</td> <td> </td></tr> <tr> <td>(thousands of dollars, except unit and per unit data)</td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 29, 2018</td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 30, 2017</td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 31, 2016</td> <td> </td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td colspan="10">Basic and diluted earnings per unit:</td></tr> <tr> <td>Income attributable to USPB available to</td> <td style="width: 2%"> </td> <td style="width: 9%"> </td> <td style="width: 3%"> </td> <td style="width: 2%"> </td> <td style="width: 9%"> </td> <td style="width: 3%"> </td> <td style="width: 2%"> </td> <td style="width: 9%"> </td> <td style="width: 3%"> </td></tr> <tr style="background-color: #C6FFFF"> <td>   unitholders (numerator)</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr> <td>      Class A</td> <td style="text-align: center">$</td> <td style="text-align: right">8,659</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">5,748</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">4,637</td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>      Class B</td> <td style="text-align: center">$</td> <td style="text-align: right">77,929</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">51,733</td> <td> </td> <td style="text-align: center">$</td> <td style="text-align: right">41,731</td> <td> </td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td colspan="10">Weighted average outstanding units (denominator)</td></tr> <tr> <td>   Class A</td> <td> </td> <td style="text-align: right">735,385</td> <td> </td> <td> </td> <td style="text-align: right">735,385</td> <td> </td> <td> </td> <td style="text-align: right">735,385</td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>   Class B</td> <td> </td> <td style="text-align: right">755,385</td> <td> </td> <td> </td> <td style="text-align: right">755,385</td> <td> </td> <td> </td> <td style="text-align: right">755,385</td> <td> </td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>Per unit amount</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr> <td>   Class A</td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">11.77</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">7.82</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">6.31</td> <td> </td></tr> <tr style="background-color: #C6FFFF"> <td>   Class B</td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">103.16</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">68.49</td> <td> </td> <td style="border-bottom: black 2.25pt double; text-align: center">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">55.24</td> <td> </td></tr> </table>

NOTE 3.   Long-Term Debt and Loan Agreements       (a)    Master Loan Agreement        On June 13, 2017, USPB and CoBank entered into a Revolving Term Loan Supplement to the Master Loan Agreement dated July 26, 2011. The Revolving Term Loan Supplement provides for a $5 million revolving credit commitment. The new commitment carries a term of three years, maturing on June 30, 2020. The Pledge Agreement provides CoBank with a first-priority security interest in USPB’s membership interests in, and distributions from, NBP.        All of the $5 million revolving credit commitment was available as of December 29, 2018. Borrowings under the revolving credit commitment bear interest at the base rate or LIBOR rate plus applicable margin. The applicable margin over LIBOR was 200 bps at December 29, 2018.        On December 30, 2011, in connection with the closing of the transaction with Leucadia, the Company and CoBank entered into the Consent and First Amendment to Pledge Agreement and Security Agreement, by which CoBank agreed to (i) consent to the Membership Interest Sale and the PA Distribution, (ii) release its security interest in, and liens on, the Membership Interests being sold pursuant to the Membership Interest Sale, (iii) consent to the NBP Pledge and (iv) consent to the amendments and restatements of the NBP Operating Agreement and the PA Newco Operating Agreement. The NBP Pledge grants NBP a perfected security interest in and to USPB’s membership interests in, and distributions from, NBP, subject only to the prior first priority security interest held by CoBank.        The Company was in compliance with the Master Loan Agreement’s Net Worth covenant as of December 29, 2018.       (b)    Capital and Operating Leases        USPB leases its office space in Kansas City, Missouri and Dodge City Kansas. Lease expense associated with operating leases was $0.1 million for fiscal years 2018, 2017, and 2016. USPB expects that it will renew lease agreements or enter into new leases as the existing leases expire.

NOTE 4.    Employee Options and Benefit Plans        In September 2010, USPB’s Board of Directors approved a management phantom unit plan. The phantom unit plan provides for the award of unit appreciation rights to management employees of USPB. USPB’s CEO administers the phantom unit plan and awards “Phantom Units” (Class A and Class B Units) to employees in amounts determined by the CEO, subject to the total Phantom Unit amount approved by the Board of Directors of USPB. A total of 5,000 Class A phantom units and 5,000 Class B phantom units were awarded to management employees, with a strike price of $118 and $157, respectively. The closing of the Leucadia Transaction resulted in management employees receiving a payment under the management phantom unit plan. As a result of that payment, the strike price for both the Class A phantom units and Class B phantom units was satisfied and is now $0. As a result of the retirement of one of USPB’s employees on December 31, 2014, 50 Class A phantom units and 50 Class B phantom units were forfeited as they were not vested. One third of the retiring employee’s vested phantom units will be exercised and the appreciation rights paid in three tranches (retirement, and first and second anniversary of retirement). At the end of fiscal year 2018, 4,750 Class A phantom units and 4,750 Class B phantom units remain outstanding. The phantom units became fully vested in August 2015. For the management phantom unit plan, compensation expense of $0.6 million, $0.3 million, and $0.2 million was recognized in fiscal years 2018, 2017, and 2016, respectively.        On November 16, 2012, USPB’s Board of Directors approved the issuance of an additional 1,500 Class A phantom units, with a strike price of $66.04 and 1,500 Class B phantom units, with a strike price of $73.70, to certain members of management, to be effective on January 28, 2013. The phantom units became fully vested in January 2018. Compensation expense of $0.2 million, $0.1 million and $0.0 million was recognized in fiscal years 2018, 2017, and 2016, respectively.        The Company maintains a tax-qualified employee savings and retirement plan (401(k) Plan) covering the Company’s non-union employees. Pursuant to the 401(k) Plan, eligible employees may elect to reduce their current compensation by up to the lesser of 75% of their annual compensation or the statutorily prescribed annual limit and have the amount of such reduction contributed to the 401(k) Plan. The 401(k) Plan provides for additional matching contributions by the Company, based on specific terms contained in the 401(k) Plan. The trustee of the 401(k) Plan, at the direction of each participant, invests the assets of the 401(k) Plan in designated investment options. The 401(k) Plan is intended to qualify under Section 401 of the   Internal Revenue Code. Expenses related to the 401(k) Plan totaled approximately $0.1 million, $0.1 million, and $0.0 million for fiscal years 2018, 2017, and 2016, respectively.

NOTE 5.    Other Income        Other non-operating income, net was $0.4 million, $0.1 million, and $0.7 million, for fiscal years 2018, 2017, and 2016, respectively. Other non-operating income primarily includes income related to lease income on additional delivery rights made available by the Company.

NOTE 6.    Income Taxes         USPB is structured as an LLC and is taxed as a partnership for federal income tax purposes. As a result, its taxable income/loss are passed through to the unitholders at the end of each tax year. Certain states assess an entity level tax, which is paid by USPB. Such taxes are generally immaterial, and the current provision in tax years 2018, 2017, and 2016 was $0.0 million.

NOTE 7.    Related Party Transactions        All of the Company’s directors hold Class A units of the Company. By virtue of their ownership of the units, each of these individuals is obligated to deliver cattle to the Company. The amount and terms of the payments received by these individuals (or the entities they represent) for the delivery of cattle are made on exactly the same basis as those received by other unitholders of the Company for the delivery of their cattle.        On December 30, 2011, USPB entered into a new Cattle Purchase and Sale Agreement with NBP. Per the terms and conditions of the Agreement, NBP is required to purchase through USPB from its members, and USPB is required to cause to be sold and delivered from its members to NBP, a base amount of 735,385 (subject to adjustment) head of cattle per year. The purchase price for the cattle is determined by pricing grids, which, at all times, are required to be no less favorable than any other pricing grid being utilized by NBP and the pricing grid shall be competitive with NBP’s major competitors for the purchase of cattle. NBP believes the pricing grids are based on terms that could be obtained from an unaffiliated party. The cattle supply agreement extends through December 30, 2022, with automatic, but optional one year extensions on each December 30, unless either party provides a notice not to extend sixty days prior to the annual anniversary date. Neither party provided sixty day notice prior to December 29, 2018, the current year annual anniversary date. NBP also purchased additional cattle from certain USPB members and associates outside of the cattle supply agreement.        USPB facilitates the delivery of cattle owned by its unitholders and associates to NBP. During fiscal years 2018, 2017, and 2016, USPB’s members and associates provided approximately 25%, 24%, and 27%, respectively, of NBP’s total cattle requirements.        At December 29, 2018 and December 30, 2017, the Company had receivables from unitholders and associates in the amount of $0.0 million and $0.1 million, respectively.        At December 29, 2018 and December 30, 2017, the Company had payables to unitholders and associates in the amount of $5.7 million and $28.7 million, respectively.

NOTE 8.    Legal Proceedings        As of December 29, 2018, USPB was not a party to any lawsuit or claim arising out of the operation of its business.

NOTE 9.    Quarterly Results (Unaudited)        Selected quarterly financial data for fiscal years 2018 and 2017 are set forth below (dollars in thousands, except per unit data):   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr> <td style="white-space: nowrap"> </td> <td colspan="2" style="white-space: nowrap; text-align: center"> </td> <td style="white-space: nowrap"> </td> <td colspan="2" style="white-space: nowrap; text-align: center">Operating</td> <td style="white-space: nowrap; text-align: center"> </td> <td style="white-space: nowrap; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; text-align: center">Net</td> <td style="white-space: nowrap"> </td> <td colspan="5" style="white-space: nowrap; text-align: center">Basic and Diluted Earnings Per</td></tr> <tr> <td style="white-space: nowrap"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center">Net Sales</td> <td style="white-space: nowrap"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center">Loss</td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center"> </td> <td style="white-space: nowrap; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center">Income</td> <td style="white-space: nowrap"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center">Class A Unit</td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center">Class B Unit</td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap; width: 28%">2018 quarterly results:</td> <td style="white-space: nowrap; width: 2%"> </td> <td style="white-space: nowrap; width: 10%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 2%"> </td> <td style="white-space: nowrap; width: 10%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 7%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 4%"> </td> <td style="white-space: nowrap; width: 14%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 3%"> </td> <td style="white-space: nowrap; width: 14%"> </td></tr> <tr> <td style="white-space: nowrap">   March 31, 2018</td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">(1,445</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">9,201</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">1.25</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">10.96</td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap">   June 30, 2018</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">(1,092</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">27,788</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">3.78</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">33.11</td></tr> <tr> <td style="white-space: nowrap">   September 29, 2018</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">(816</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">28,928</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">3.93</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">34.47</td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap">   December 29, 2018</td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">(1,135</td> <td style="white-space: nowrap; border-bottom: black 1pt solid">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">20,671</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">2.81</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">24.63</td></tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">(4,488</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">86,588</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td></tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap">2017 quarterly results:</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td></tr> <tr> <td style="white-space: nowrap">   March 25, 2017</td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">(1,067</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">7,576</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">1.03</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">9.03</td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap">   June 24, 2017</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">(840</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">10,954</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">1.49</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">13.05</td></tr> <tr> <td style="white-space: nowrap">   September 30, 2017</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">(862</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">25,501</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">3.47</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">30.38</td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap">   December 30, 2017</td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">(1,252</td> <td style="white-space: nowrap; border-bottom: black 1pt solid">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">13,450</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">1.83</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">16.02</td></tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">(4,021</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">57,481</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr> <td style="white-space: nowrap"> </td> <td colspan="2" style="white-space: nowrap; text-align: center"> </td> <td style="white-space: nowrap"> </td> <td colspan="2" style="white-space: nowrap; text-align: center">Operating</td> <td style="white-space: nowrap; text-align: center"> </td> <td style="white-space: nowrap; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; text-align: center">Net</td> <td style="white-space: nowrap"> </td> <td colspan="5" style="white-space: nowrap; text-align: center">Basic and Diluted Earnings Per</td></tr> <tr> <td style="white-space: nowrap"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center">Net Sales</td> <td style="white-space: nowrap"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center">Loss</td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center"> </td> <td style="white-space: nowrap; text-align: center"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center">Income</td> <td style="white-space: nowrap"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center">Class A Unit</td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td colspan="2" style="white-space: nowrap; border-bottom: black 1pt solid; text-align: center">Class B Unit</td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap; width: 28%">2018 quarterly results:</td> <td style="white-space: nowrap; width: 2%"> </td> <td style="white-space: nowrap; width: 10%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 2%"> </td> <td style="white-space: nowrap; width: 10%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 7%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 4%"> </td> <td style="white-space: nowrap; width: 14%"> </td> <td style="white-space: nowrap; width: 1%"> </td> <td style="white-space: nowrap; width: 3%"> </td> <td style="white-space: nowrap; width: 14%"> </td></tr> <tr> <td style="white-space: nowrap">   March 31, 2018</td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">(1,445</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">9,201</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">1.25</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">10.96</td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap">   June 30, 2018</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">(1,092</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">27,788</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">3.78</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">33.11</td></tr> <tr> <td style="white-space: nowrap">   September 29, 2018</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">(816</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">28,928</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">3.93</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">34.47</td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap">   December 29, 2018</td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">(1,135</td> <td style="white-space: nowrap; border-bottom: black 1pt solid">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">20,671</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">2.81</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">24.63</td></tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">(4,488</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">86,588</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td></tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap">2017 quarterly results:</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td></tr> <tr> <td style="white-space: nowrap">   March 25, 2017</td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">(1,067</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">7,576</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">1.03</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">9.03</td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap">   June 24, 2017</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">(840</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">10,954</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">1.49</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">13.05</td></tr> <tr> <td style="white-space: nowrap">   September 30, 2017</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">(862</td> <td style="white-space: nowrap">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">25,501</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">3.47</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">30.38</td></tr> <tr style="background-color: #C6FFFF"> <td style="white-space: nowrap">   December 30, 2017</td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">(1,252</td> <td style="white-space: nowrap; border-bottom: black 1pt solid">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid"> </td> <td style="white-space: nowrap; border-bottom: black 1pt solid; text-align: right">13,450</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">1.83</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; text-align: right">$</td> <td style="white-space: nowrap; text-align: right">16.02</td></tr> <tr> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">-</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">(4,021</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double">)</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">$</td> <td style="white-space: nowrap; border-bottom: black 2.25pt double; text-align: right">57,481</td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td> <td style="white-space: nowrap"> </td></tr> </table>

NOTE 10. Subsequent Events   On March 11, 2019, USPB and the other members of NBP entered into an agreement to acquire 100% of the ownership interests in Iowa Premium, LLC.  USPB’s proportionate share of the Purchase Price is approximately $22.6 million, which will be funded by a distribution by NBP to USPB.  Once the purchase of Iowa Premium, LLC is closed, USPB and the other members of NBP will subsequently transfer their respective ownership interests in Iowa Premium, LLC to NBP in the form of a capital contribution.  Closing the transaction is subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.   USPB evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through March 13, 2019, the date the financial statements were available for issuance.

103.16

11.77

7.82

68.49

6.31

55.24

3.93

34.47

1.25

3.78

2.81

10.96

33.11

24.63

1.03

1.49

3.47

1.83

9.03

13.05

30.8

16.02

22600000

NOTE 1.   Description of Business        U.S. Premium Beef (USPB or the Company) was formed as a closed marketing cooperative on July 1, 1996. Its mission is to increase the quality of beef and long-term profitability of cattle producers by creating a fully integrated producer-owned beef processing system that is a global supplier of high quality, value-added beef products responsive to consumer desires. USPB operates an integrated cattle processing and beef marketing enterprise where consumer and processor demands and requirements are implemented through changes in genetics, feeding, and management. USPB’s unitholders benefit from its supplier alliance with National Beef Packing Company, LLC (NBP) through (i) premiums received in excess of cash market prices for higher quality cattle, (ii) allocations of profits and potential distributions, (iii) potential unit price appreciation, and (iv) information that permits unitholders to make informed production decisions.        On August 18, 2004, the shareholders of U.S. Premium Beef, Ltd. approved the conversion of the cooperative into a Delaware LLC.        On December 5, 2011, USPB entered into a Membership Interest Purchase Agreement with Leucadia National Corporation (Leucadia). The Purchase Agreement provided for Leucadia to purchase 56.2415% of the membership interests in NBP (National Interests) from the Company for approximately $646.8 million. The Leucadia Transaction closed on December 30, 2011. Following the close, USPB owned 15.0729% of NBP’s membership interests.        As a result of the sale to Leucadia, USPB’s investment in NBP will be accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control.   Ownership Structure        As USPB is structured as a Limited Liability Company, its members are not personally liable for liabilities of USPB. USPB’s members are taxed on their proportionate share of USPB’s taxable income.        Class A Units. There are 735,385 Class A units outstanding. Class A unitholders are allocated 10% of the Company’s profits and losses. Holders of USPB Class A units, committed under Uniform Cattle Delivery and Marketing Agreements, have the right and obligation to deliver one head of cattle to USPB annually for each unit held.        Class B Units. There are 755,385 Class B units outstanding. Class B unitholders are allocated 90% of the Company’s profits and losses. Holders of USPB Class B units have no cattle delivery commitment.

113620000 27419000 35815000

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Subsequent Events (Details Narrative) link:presentationLink link:calculationLink link:definitionLink EX-101.CAL 9 uspb-20181229_cal.xml EX-101.DEF 10 uspb-20181229_def.xml EX-101.LAB 11 uspb-20181229_lab.xml Class of Stock [Axis] Class A Units [Member] Class B Units [Member] Equity Components [Axis] Members' Capital Legal Entity [Axis] National Beef Packing Company, LLC [Member] Property, Plant and Equipment, Type [Axis] Machinery and Equipment [Member] Furniture and Fixtures [Member] Trailers and Automotive Equipment [Member] Lender Name [Axis] CoBank [Member] Credit Facility [Axis] Revolving Credit Facility [Member] Plan Name [Axis] Management Phantom Unit Plan [Member] Award Type [Axis] Class A Phantom Units [Member] Class B Phantom Units [Member] Concentration Risk Benchmark [Axis] Cattle requirements [Member] Certain Members of Management [Member] Subsequent Event Type [Axis] Subsequent Event [Member] Statement [Table] Statement [Line Items] Entity Registrant Name Entity Central Index Key Document Type Document Period End Date Amendment Flag Current Fiscal Year End Date Entity a Well-known Seasoned Issuer Entity a Voluntary Filer Entity's Reporting Status Current Entity Filer Category Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Entity Public Float Entity Emerging Growth Entity Small Business Entity Shell Company Statement of Financial Position [Abstract] Assets Current assets: Cash and cash equivalents Due from affiliates Other current assets Total current assets Property, plant, and equipment, at cost Less accumulated depreciation Net property, plant, and equipment Investment in National Beef Packing Company, LLC Other assets Total assets Liabilities and Capital Shares and Equities Current liabilities: Accounts payable - trade Due to affiliates Accrued compensation and benefits Other accrued expenses and liabilities Distributions payable Total current liabilities Long-term liabilities: Other liabilities Total long-term liabilities Total liabilities Commitments and contingencies Capital shares and equities: Members' capital, 735,385 Class A units and 755,385 Class B units authorized, issued and outstanding Total capital shares and equities Total liabilities and capital shares and equities Members' capital, units authorized Members' capital, units issued Members' capital, units outstanding Net sales Costs and expenses: Cost of sales Selling, general, and administrative expenses Depreciation and amortization Total costs and expenses Operating loss Other income (expense): Interest income Interest expense Equity in net income of National Beef Packing Company, LLC Other, net Total other income Net income Income per unit: Basic and diluted Outstanding weighted-average Class A and Class B units: Basic and diluted Beginning Balance Net income for the year Member distribution Ending Balance Statement of Cash Flows [Abstract] Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Equity in net income of National Beef Packing Company, LLC Distributions from National Beef Packing Company, LLC Changes in assets and liabilities: Due from affiliates Other assets Accounts payable Due to affiliates Accrued compensation and benefits Other accrued expenses and liabilities Net cash provided by operating activities Cash flows from investing activities: Capital expenditures, including interest capitalized Distributions from National Beef Packing Company, LLC Net cash provided by investing activities Cash flows from financing activities: Partnership distributions and redemptions Net cash used in financing activities Net (decrease) increase in cash Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental cash disclosures: Cash paid during the period for interest Supplemental noncash disclosures of financing activities: Distributions payable Accounting Policies [Abstract] Description of Business Basis of Presentation and Accounting Policies Debt Disclosure [Abstract] Long-Term Debt and Loan Agreements Disclosure of Compensation Related Costs, Share-based Payments [Abstract] Employee Options and Benefit Plans Other Income and Expenses [Abstract] Other Income Income Tax Disclosure [Abstract] Income Taxes Related Party Transactions [Abstract] Related Party Transactions Commitments and Contingencies Disclosure [Abstract] Legal Proceedings Quarterly Financial Information Disclosure [Abstract] Quarterly Results (Unaudited) Subsequent Events [Abstract] Subsequent Events Basis of Presentation Fiscal Year Use of Estimates Cash and Cash Equivalents Investment in National Beef Packing Company, LLC Property, Plant and Equipment New Accounting Standard Distributions Payable Income Taxes Selling, General and Administrative Noncompetition Payments Business Segments Earnings Per Unit Schedule of Property Plant And Equipment Estimated Useful Life Schedule of cost and accumulated depreciation for property, plant, and equipment Schedule of Income Per Unit Calculation Schedule of selected quarterly financial data for fiscal years Equity method percentage owned Property and equipment useful lives Property, plant and equipment, gross Accumulated depreciation Property, plant and equipment, net Basic and diluted earnings per unit: Income attributable to USPB available to unitholders (numerator) Weighted average outstanding units (denominator) Per unit amount Payments for noncompetition agreement Accrued Noncompetition Payments Credit line maximum borrowing capacity Credit line, remaining borrowing capacity Credit line expiration date Rent expense Share-based compensation expense Phantom units outstanding 401K plan expenses Other non-operating income Income tax expense Concentration percentage Accounts receivable from unitholders Accounts payables to unitholders Net Sales Operating Loss Net Income (Loss) Basic and Diluted Earnings Per Unit Proportionate share price of purchase price of Iowa Premium Class A Units [Member] Class B Units [Member] Distributions from equity method investments classified as operating activities Distributions payable Document and entity information [Abstract] Total of the carrying values as of the balance sheet date of obligations incurred through that date and payable for obligations related to services received from employees, such as accrued salaries and bonuses, payroll taxes and fringe benefits. Used to reflect the noncurrent portion of the liabilities due after one year (or the normal operating cycle, if longer). This item represents the entity's proportionate share for the period of the net income (loss) of its investee (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. National Beef Packing Company, LLC [Member] Post employment payments provided for in former CEO';s employment agreements [Policy Text Block] Tabular disclosure of useful life of long lived, physical assets used in the normal conduct of business and not intended for resale, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Examples include, but not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment. Distributions payable [Policy Text Block] Proportionate share of purchase price of Iowa Premium Partnership distributions and redemptions Assets, Current Assets [Default Label] EX-101.PRE 12 uspb-20181229_pre.xml XML 13 R1.htm IDEA: XBRL DOCUMENT

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 29, 2018	Feb. 23, 2019
Entity Registrant Name	U. S. Premium Beef, LLC
Entity Central Index Key	0001289237
Document Type	10-K
Document Period End Date	Dec. 29, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-29
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2018
Entity Public Float	$ 0
Entity Emerging Growth	false
Entity Small Business	false
Entity Shell Company	false
Class A Units [Member]
Entity Common Stock, Shares Outstanding		735,385
Class B Units [Member]
Entity Common Stock, Shares Outstanding		755,385

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Balance Sheets - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017
Current assets:
Cash and cash equivalents	$ 88,411	$ 119,074
Due from affiliates	21	137
Other current assets	27	35
Total current assets	88,459	119,246
Property, plant, and equipment, at cost	200	223
Less accumulated depreciation	183	201
Net property, plant, and equipment	17	22
Investment in National Beef Packing Company, LLC	143,361	140,030
Other assets	69	103
Total assets	231,906	259,401
Current liabilities:
Accounts payable - trade	12	58
Due to affiliates	44	388
Accrued compensation and benefits	2,158	2,250
Other accrued expenses and liabilities	515	284
Distributions payable	5,687	28,328
Total current liabilities	8,416	31,308
Long-term liabilities:
Other liabilities	3,734	3,946
Total long-term liabilities	3,734	3,946
Total liabilities	12,150	35,254
Commitments and contingencies
Capital shares and equities:
Members' capital, 735,385 Class A units and 755,385 Class B units authorized, issued and outstanding	219,756	224,147
Total capital shares and equities	219,756	224,147
Total liabilities and capital shares and equities	$ 231,906	$ 259,401

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Balance Sheets (Parenthetical) - shares	Dec. 29, 2018	Dec. 30, 2017
Class A Units [Member]
Members' capital, units authorized	735,385	735,385
Members' capital, units issued	735,385	735,385
Members' capital, units outstanding	735,385	735,385
Class B Units [Member]
Members' capital, units authorized	755,385	755,385
Members' capital, units issued	755,385	755,385
Members' capital, units outstanding	755,385	755,385

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Statements of Operations - USD ($) $ in Thousands	12 Months Ended
Statements of Operations - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Net sales	$ 0	$ 0	$ 0
Costs and expenses:
Cost of sales	0	0	0
Selling, general, and administrative expenses	4,476	4,008	3,621
Depreciation and amortization	12	13	13
Total costs and expenses	4,488	4,021	3,634
Operating loss	(4,488)	(4,021)	(3,634)
Other income (expense):
Interest income	1,073	321	48
Interest expense	(15)	(13)	(13)
Equity in net income of National Beef Packing Company, LLC	89,610	61,056	49,267
Other, net	408	138	700
Total other income	91,076	61,502	50,002
Net income	$ 86,588	$ 57,481	$ 46,368
Class A Units [Member]
Income per unit:
Basic and diluted	$ 11.77	$ 7.82	$ 6.31
Outstanding weighted-average Class A and Class B units:
Basic and diluted	735,385	735,385	735,385
Class B Units [Member]
Income per unit:
Basic and diluted	$ 103.16	$ 68.49	$ 55.24
Outstanding weighted-average Class A and Class B units:
Basic and diluted	755,385	755,385	755,385

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Statements of Capital Shares and Equities - USD ($) $ in Thousands	3 Months Ended				12 Months Ended
	Dec. 29, 2018	Mar. 31, 2018	Dec. 30, 2017	Mar. 25, 2017	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Members' Capital
Beginning Balance		$ 224,147		$ 221,195	$ 224,147	$ 221,195	$ 211,770
Net income for the year					86,588	57,481	46,368
Member distribution					(90,979)	(54,529)	(36,943)
Ending Balance	$ 219,756		$ 224,147		219,756	224,147	221,195
Net income for the year	$ 20,671	$ 9,201	$ 13,450	$ 7,576	$ 86,588	$ 57,481	$ 46,368

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

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Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net income	$ 86,588	$ 57,481	$ 46,368
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12	13	13
Equity in net income of National Beef Packing Company, LLC	(89,610)	(61,056)	(49,267)
Distributions from National Beef Packing Company, LLC	68,023	33,531	10,923
Changes in assets and liabilities:
Due from affiliates	116	(89)	89
Other assets	42	34	32
Accounts payable	(46)	(8)	52
Due to affiliates	(344)	351	37
Accrued compensation and benefits	(304)	33	(21)
Other accrued expenses and liabilities	231	31	74
Net cash provided by operating activities	64,708	30,321	8,300
Cash flows from investing activities:
Capital expenditures, including interest capitalized	(7)	0	0
Distributions from National Beef Packing Company, LLC	18,256	30,942	27,525
Net cash provided by investing activities	18,249	30,942	27,525
Cash flows from financing activities:
Partnership distributions and redemptions	(113,620)	(27,419)	(35,815)
Net cash used in financing activities	(113,620)	(27,419)	(35,815)
Net (decrease) increase in cash	(30,663)	33,844	10
Cash and cash equivalents at beginning of period	119,074	85,230	85,220
Cash and cash equivalents at end of period	88,411	119,074	85,230
Supplemental cash disclosures:
Cash paid during the period for interest	13	13	13
Supplemental noncash disclosures of financing activities:
Distributions payable	$ 5,687	$ 0	$ 0

XML 19 R7.htm IDEA: XBRL DOCUMENT

1. Description of Business

12 Months Ended

Dec. 29, 2018

Accounting Policies [Abstract]

Description of Business

NOTE 1. Description of Business

On August 18, 2004, the shareholders of U.S. Premium Beef, Ltd. approved the conversion of the cooperative into a Delaware LLC.

Ownership Structure

XML 20 R8.htm IDEA: XBRL DOCUMENT

2. Basis of Presentation and Accounting Policies

12 Months Ended

Dec. 29, 2018

Accounting Policies [Abstract]

Basis of Presentation and Accounting Policies

NOTE 2. Basis of Presentation and Accounting Policies

Basis of Presentation

USPB’s investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control.

Fiscal Year

The Company’s fiscal year ends on the last Saturday in December. The Company files annual reports for each 52 week or 53 week period ended on the last Saturday in December.

Use of Estimates

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Investment in National Beef Packing Company, LLC

Property, Plant, and Equipment

Machinery and equipment	2 to 15 years
Furniture and fixtures	3 to 5 years
Trailers and automotive equipment	2 to 4 years

Upon disposition of these assets, any resulting gain or loss is included in other, net. Normal repairs and maintenance costs are charged to Selling, general and administrative expenses, as incurred.

A summary of cost and accumulated depreciation for property, plant, and equipment as of December 29, 2018 and December 30, 2017 follows (thousands of dollars):

	December 29, 2018		December 30, 2017
Machinery and equipment	$	24	$	24
Furniture and fixtures		147		140
Trailers and automotive equipment		29		59
Total property, plant, and equipment, at cost		200		223
Accumulated depreciation		183		201
Property, plant, and equipment, net	$	17	$	22

Depreciation expense was immaterial for fiscal years ended December 29, 2018 and December 30, 2017.

New Accounting Standard

In terms of practical expedients, USPB accepts:

Its original determination of whether a contract contained a lease.

That a subsequent review of existing contracts is not necessary.

That USPB does not have to reassess the initial direct costs assigned to leases under previous leasing guidance as USPB did not occur any initial direct costs for the leases subject to previous leasing guidance.

Distributions Payable

Income Taxes

Selling, General, and Administrative

Noncompetition Payments

The current CEO’s employment agreement provides for him to receive noncompetition payments for a twelve month period following his termination of employment with USPB.

Business Segments

USPB is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, USPB has one reportable segment.

Earnings Per Unit

Income Per Unit Calculation	52 weeks ended		52 weeks ended		53 weeks ended
(thousands of dollars, except unit and per unit data)	December 29, 2018		December 30, 2017		December 31, 2016

Basic and diluted earnings per unit:
Income attributable to USPB available to
unitholders (numerator)
Class A	$	8,659	$	5,748	$	4,637
Class B	$	77,929	$	51,733	$	41,731

Weighted average outstanding units (denominator)
Class A		735,385		735,385		735,385
Class B		755,385		755,385		755,385

Per unit amount
Class A	$	11.77	$	7.82	$	6.31
Class B	$	103.16	$	68.49	$	55.24

XML 21 R9.htm IDEA: XBRL DOCUMENT

3. Long-Term Debt and Loan Agreements

12 Months Ended

Dec. 29, 2018

Debt Disclosure [Abstract]

Long-Term Debt and Loan Agreements

NOTE 3. Long-Term Debt and Loan Agreements

(a) Master Loan Agreement

The Company was in compliance with the Master Loan Agreement’s Net Worth covenant as of December 29, 2018.

(b) Capital and Operating Leases

XML 22 R10.htm IDEA: XBRL DOCUMENT

4. Employee Options and Benefit Plans

12 Months Ended

Dec. 29, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Employee Options and Benefit Plans

NOTE 4. Employee Options and Benefit Plans

Internal Revenue Code. Expenses related to the 401(k) Plan totaled approximately $0.1 million, $0.1 million, and $0.0 million for fiscal years 2018, 2017, and 2016, respectively.

XML 23 R11.htm IDEA: XBRL DOCUMENT

5. Other Income

12 Months Ended

Dec. 29, 2018

Other income (expense):

Other Income

NOTE 5. Other Income

XML 24 R12.htm IDEA: XBRL DOCUMENT

6. Income Taxes

12 Months Ended

Dec. 29, 2018

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 6. Income Taxes

XML 25 R13.htm IDEA: XBRL DOCUMENT

7. Related Party Transactions

12 Months Ended

Dec. 29, 2018

Related Party Transactions

NOTE 7. Related Party Transactions

On December 30, 2011, USPB entered into a new Cattle Purchase and Sale Agreement with NBP. Per the terms and conditions of the Agreement, NBP is required to purchase through USPB from its members, and USPB is required to cause to be sold and delivered from its members to NBP, a base amount of 735,385 (subject to adjustment) head of cattle per year. The purchase price for the cattle is determined by pricing grids, which, at all times, are required to be no less favorable than any other pricing grid being utilized by NBP and the pricing grid shall be competitive with NBP’s major competitors for the purchase of cattle. NBP believes the pricing grids are based on terms that could be obtained from an unaffiliated party. The cattle supply agreement extends through December 30, 2022, with automatic, but optional one year extensions on each December 30, unless either party provides a notice not to extend sixty days prior to the annual anniversary date. Neither party provided sixty day notice prior to December 29, 2018, the current year annual anniversary date. NBP also purchased additional cattle from certain USPB members and associates outside of the cattle supply agreement.

At December 29, 2018 and December 30, 2017, the Company had receivables from unitholders and associates in the amount of $0.0 million and $0.1 million, respectively.

At December 29, 2018 and December 30, 2017, the Company had payables to unitholders and associates in the amount of $5.7 million and $28.7 million, respectively.

XML 26 R14.htm IDEA: XBRL DOCUMENT

8. Legal Proceedings

12 Months Ended

Dec. 29, 2018

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

NOTE 8. Legal Proceedings

As of December 29, 2018, USPB was not a party to any lawsuit or claim arising out of the operation of its business.

XML 27 R15.htm IDEA: XBRL DOCUMENT

9. Quarterly Results (Unaudited)

12 Months Ended

Dec. 29, 2018

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results (Unaudited)

NOTE 9. Quarterly Results (Unaudited)

Selected quarterly financial data for fiscal years 2018 and 2017 are set forth below (dollars in thousands, except per unit data):

			Operating			Net		Basic and Diluted Earnings Per
	Net Sales		Loss			Income		Class A Unit		Class B Unit
2018 quarterly results:
March 31, 2018	$	-	$	(1,445	)	$	9,201	$	1.25	$	10.96
June 30, 2018		-		(1,092	)		27,788	$	3.78	$	33.11
September 29, 2018		-		(816	)		28,928	$	3.93	$	34.47
December 29, 2018		-		(1,135	)		20,671	$	2.81	$	24.63
	$	-	$	(4,488	)	$	86,588

2017 quarterly results:
March 25, 2017	$	-	$	(1,067	)	$	7,576	$	1.03	$	9.03
June 24, 2017		-		(840	)		10,954	$	1.49	$	13.05
September 30, 2017		-		(862	)		25,501	$	3.47	$	30.38
December 30, 2017		-		(1,252	)		13,450	$	1.83	$	16.02
	$	-	$	(4,021	)	$	57,481

XML 28 R16.htm IDEA: XBRL DOCUMENT

10. Subsequent Events

12 Months Ended

Dec. 29, 2018

Subsequent Events [Abstract]

Subsequent Events

NOTE 10. Subsequent Events

On March 11, 2019, USPB and the other members of NBP entered into an agreement to acquire 100% of the ownership interests in Iowa Premium, LLC. USPB’s proportionate share of the Purchase Price is approximately $22.6 million, which will be funded by a distribution by NBP to USPB. Once the purchase of Iowa Premium, LLC is closed, USPB and the other members of NBP will subsequently transfer their respective ownership interests in Iowa Premium, LLC to NBP in the form of a capital contribution. Closing the transaction is subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

XML 29 R17.htm IDEA: XBRL DOCUMENT

2. Basis of Presentation and Accounting Policies (policies)

12 Months Ended

Dec. 29, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

USPB’s investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control.

Fiscal Year

Fiscal Year

The Company’s fiscal year ends on the last Saturday in December. The Company files annual reports for each 52 week or 53 week period ended on the last Saturday in December.

Use of Estimates

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Investment in National Beef Packing Company, LLC

Investment in National Beef Packing Company, LLC

Property, Plant and Equipment

Property, Plant, and Equipment

Machinery and equipment	2 to 15 years
Furniture and fixtures	3 to 5 years
Trailers and automotive equipment	2 to 4 years

Upon disposition of these assets, any resulting gain or loss is included in other, net. Normal repairs and maintenance costs are charged to Selling, general and administrative expenses, as incurred.

A summary of cost and accumulated depreciation for property, plant, and equipment as of December 29, 2018 and December 30, 2017 follows (thousands of dollars):

	December 29, 2018		December 30, 2017
Machinery and equipment	$	24	$	24
Furniture and fixtures		147		140
Trailers and automotive equipment		29		59
Total property, plant, and equipment, at cost		200		223
Accumulated depreciation		183		201
Property, plant, and equipment, net	$	17	$	22

Depreciation expense was immaterial for fiscal years ended December 29, 2018 and December 30, 2017.

New Accounting Standard

New Accounting Standard

In terms of practical expedients, USPB accepts:

Its original determination of whether a contract contained a lease.

That a subsequent review of existing contracts is not necessary.

Distributions Payable

Distributions Payable

Income Taxes

Income Taxes

Selling, General and Administrative

Selling, General, and Administrative

Noncompetition Payments

Noncompetition Payments

The current CEO’s employment agreement provides for him to receive noncompetition payments for a twelve month period following his termination of employment with USPB.

Business Segments

Business Segments

USPB is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, USPB has one reportable segment.

Earnings Per Unit

Earnings Per Unit

Income Per Unit Calculation	52 weeks ended		52 weeks ended		53 weeks ended
(thousands of dollars, except unit and per unit data)	December 29, 2018		December 30, 2017		December 31, 2016

Basic and diluted earnings per unit:
Income attributable to USPB available to
unitholders (numerator)
Class A	$	8,659	$	5,748	$	4,637
Class B	$	77,929	$	51,733	$	41,731

Weighted average outstanding units (denominator)
Class A		735,385		735,385		735,385
Class B		755,385		755,385		755,385

Per unit amount
Class A	$	11.77	$	7.82	$	6.31
Class B	$	103.16	$	68.49	$	55.24

XML 30 R18.htm IDEA: XBRL DOCUMENT

2. Basis of Presentation and Accounting Policies (Tables)

12 Months Ended

Dec. 29, 2018

Accounting Policies [Abstract]

Schedule of Property Plant And Equipment Estimated Useful Life

Machinery and equipment	2 to 15 years
Furniture and fixtures	3 to 5 years
Trailers and automotive equipment	2 to 4 years

Schedule of cost and accumulated depreciation for property, plant, and equipment

	December 29, 2018		December 30, 2017
Machinery and equipment	$	24	$	24
Furniture and fixtures		147		140
Trailers and automotive equipment		29		59
Total property, plant, and equipment, at cost		200		223
Accumulated depreciation		183		201
Property, plant, and equipment, net	$	17	$	22

Schedule of Income Per Unit Calculation

Income Per Unit Calculation	52 weeks ended		52 weeks ended		53 weeks ended
(thousands of dollars, except unit and per unit data)	December 29, 2018		December 30, 2017		December 31, 2016

Basic and diluted earnings per unit:
Income attributable to USPB available to
unitholders (numerator)
Class A	$	8,659	$	5,748	$	4,637
Class B	$	77,929	$	51,733	$	41,731

Weighted average outstanding units (denominator)
Class A		735,385		735,385		735,385
Class B		755,385		755,385		755,385

Per unit amount
Class A	$	11.77	$	7.82	$	6.31
Class B	$	103.16	$	68.49	$	55.24

XML 31 R19.htm IDEA: XBRL DOCUMENT

9. Quarterly Results (Unaudited) (Tables)

12 Months Ended

Dec. 29, 2018

Quarterly Financial Information Disclosure [Abstract]

Schedule of selected quarterly financial data for fiscal years

			Operating			Net		Basic and Diluted Earnings Per
	Net Sales		Loss			Income		Class A Unit		Class B Unit
2018 quarterly results:
March 31, 2018	$	-	$	(1,445	)	$	9,201	$	1.25	$	10.96
June 30, 2018		-		(1,092	)		27,788	$	3.78	$	33.11
September 29, 2018		-		(816	)		28,928	$	3.93	$	34.47
December 29, 2018		-		(1,135	)		20,671	$	2.81	$	24.63
	$	-	$	(4,488	)	$	86,588

2017 quarterly results:
March 25, 2017	$	-	$	(1,067	)	$	7,576	$	1.03	$	9.03
June 24, 2017		-		(840	)		10,954	$	1.49	$	13.05
September 30, 2017		-		(862	)		25,501	$	3.47	$	30.38
December 30, 2017		-		(1,252	)		13,450	$	1.83	$	16.02
	$	-	$	(4,021	)	$	57,481

XML 32 R20.htm IDEA: XBRL DOCUMENT

1. Description of Business (Details Narrative)	Dec. 29, 2018
Equity method percentage owned	15.0729%
National Beef Packing Company, LLC [Member]
Equity method percentage owned	15.0729%

XML 33 R21.htm IDEA: XBRL DOCUMENT

2. Basis of Presentation and Accounting Policies (Details - Useful lives)	12 Months Ended
	Dec. 29, 2018
Machinery and Equipment [Member]
Property and equipment useful lives	2 to 15 years
Furniture and Fixtures [Member]
Property and equipment useful lives	3 to 5 years
Trailers and Automotive Equipment [Member]
Property and equipment useful lives	2 to 4 years

XML 34 R22.htm IDEA: XBRL DOCUMENT

2. Basis of Presentation and Accounting Policies (Details - Property schedule) - USD ($) $ in Thousands	Dec. 29, 2018	Dec. 30, 2017
Property, plant and equipment, gross	$ 200	$ 223
Accumulated depreciation	183	201
Property, plant and equipment, net	17	22
Machinery and Equipment [Member]
Property, plant and equipment, gross	24	24
Furniture and Fixtures [Member]
Property, plant and equipment, gross	147	140
Trailers and Automotive Equipment [Member]
Property, plant and equipment, gross	$ 29	$ 59

XML 35 R23.htm IDEA: XBRL DOCUMENT

2. Basis of Presentation and Accounting Policies (Details - Income (Loss) calculation) - USD ($)	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Class A Units [Member]
Basic and diluted earnings per unit:
Income attributable to USPB available to unitholders (numerator)	$ 8,659	$ 5,748	$ 4,637
Weighted average outstanding units (denominator)	735,385	735,385	735,385
Per unit amount	$ 11.77	$ 7.82	$ 6.31
Class B Units [Member]
Basic and diluted earnings per unit:
Income attributable to USPB available to unitholders (numerator)	$ 77,929	$ 51,733	$ 41,731
Weighted average outstanding units (denominator)	755,385	755,385	755,385
Per unit amount	$ 103.16	$ 68.49	$ 55.24

XML 36 R24.htm IDEA: XBRL DOCUMENT

2. Basis of Presentation and Accounting Policies (Details Narrative) - USD ($)	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017
Accounting Policies [Abstract]
Equity method percentage owned	15.0729%
Distributions payable	$ 5,687,000	$ 28,328,000
Payments for noncompetition agreement	844,938	853,263
Accrued Noncompetition Payments	$ 2,700,000	$ 3,400,000

XML 37 R25.htm IDEA: XBRL DOCUMENT

3. Long-Term Debt and Loan Agreements (Details Narrative) - USD ($)	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Rent expense	$ 100,000	$ 100,000	$ 100,000
CoBank [Member] \| Revolving Credit Facility [Member]
Credit line maximum borrowing capacity	5,000,000
Credit line, remaining borrowing capacity	$ 5,000,000
Credit line expiration date	Jun. 30, 2020

XML 38 R26.htm IDEA: XBRL DOCUMENT

4. Employee Options and Benefit Plans (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
401K plan expenses	$ 100	$ 100	$ 0
Management Phantom Unit Plan [Member]
Share-based compensation expense	600	300	200
Certain Members of Management [Member]
Share-based compensation expense	$ 200	$ 100	$ 0
Class A Phantom Units [Member]
Phantom units outstanding	4,750
Class B Phantom Units [Member]
Phantom units outstanding	4,750

XML 39 R27.htm IDEA: XBRL DOCUMENT

5. Other Income (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Other income (expense):
Other non-operating income	$ 408	$ 138	$ 700

XML 40 R28.htm IDEA: XBRL DOCUMENT

6. Income Taxes (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income tax expense	$ 0	$ 0	$ 0

XML 41 R29.htm IDEA: XBRL DOCUMENT

7. Related Party Transactions (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Accounts receivable from unitholders	$ 0	$ 100
Accounts payables to unitholders	$ 5,700	$ 28,700
National Beef Packing Company, LLC [Member] \| Cattle requirements [Member]
Concentration percentage	25.00%	24.00%	27.00%

XML 42 R30.htm IDEA: XBRL DOCUMENT

9. Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 29, 2018	Sep. 29, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 30, 2017	Sep. 30, 2017	Jun. 24, 2017	Mar. 25, 2017	Dec. 29, 2018	Dec. 30, 2017	Dec. 31, 2016
Net Sales	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0
Operating Loss	(1,135)	(816)	(1,092)	(1,445)	(1,252)	(862)	(840)	(1,067)	(4,488)	(4,021)	(3,634)
Net Income (Loss)	$ 20,671	$ 28,928	$ 27,788	$ 9,201	$ 13,450	$ 25,501	$ 10,954	$ 7,576	$ 86,588	$ 57,481	$ 46,368
Class A Units [Member]
Basic and Diluted Earnings Per Unit	$ 2.81	$ 3.93	$ 3.78	$ 1.25	$ 1.83	$ 3.47	$ 1.49	$ 1.03
Class B Units [Member]
Basic and Diluted Earnings Per Unit	$ 24.63	$ 34.47	$ 33.11	$ 10.96	$ 16.02	$ 30.8	$ 13.05	$ 9.03

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

+ Details

XML 43 R31.htm IDEA: XBRL DOCUMENT

10. Subsequent Events (Details Narrative) $ in Thousands	2 Months Ended
10. Subsequent Events (Details Narrative) $ in Thousands	Mar. 11, 2019 USD ($)
Subsequent Event [Member]
Proportionate share price of purchase price of Iowa Premium	$ 22,600

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