Investment in National Beef Packing Company, LLC

9 Months Ended

Sep. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

Investment in National Beef Packing Company, LLC

(6) Investment in National Beef Packing Company, LLC

USPB’s 15.0729% investment in NBP is accounted for using the equity method of accounting because the Company has the ability to exercise significant influence over NBP, but does not have financial or operational control. The table below summarizes the changes to USPB’s investment in NBP for the fourteen and thirty-nine week periods ended September 30, 2023 and thirteen and thirty-nine week periods ended September 24, 2022 (unaudited) (thousands of dollars):

Investment at December 31, 2022	$	179,556
Equity in net income for twelve-week period		7,600
Distributions		–
Investment at March 25, 2023		187,156
Equity in net income for thirteen-week period		14,705
Distributions		(10,464	)
Investment at June 24, 2023		191,397
Equity in net income for fourteen-week period		14,755
Distributions		(24,808	)
Investment at September 30, 2023	$	181,344
Investment at December 25, 2021	$	213,290
Equity in net income for thirteen-week period		62,606
Distributions		(52,755	)
Investment at March 26, 2022		223,141
Equity in net income for thirteen-week period		52,779
Distributions		(82,907	)
Investment at June 25, 2022		193,013
Equity in net income for thirteen-week period		44,509
Distributions		(27,318	)
Investment at September 24, 2022	$	210,204

The difference between USPB’s percentage ownership share of NBP earnings and the recorded amount of Equity in income of NBP is attributable to the amortization of a basis difference related to the purchase accounting for NBP’s acquisition of Ohio Beef in 2019.

Below is a summary of the results of operations for NBP for the quarterly and year-to-date periods ended September 30, 2023 and September 24, 2022 (thousands of dollars): 

	14 weeks ended			13 weeks ended			39 weeks ended
	September 30, 2023			September 24, 2022			September 30, 2023			September 24, 2022
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net sales	$	3,374,888		$	2,846,156		$	8,896,989		$	8,819,780
Costs and expenses:
Cost of sales		3,208,887			2,492,127			8,453,249			7,587,149
Selling, general, and administrative expenses		23,232			24,408			75,323			69,628
Depreciation and amortization		36,278			30,945			98,835			90,254
Total costs and expenses		3,268,397			2,547,480			8,627,407			7,747,031
Operating income		106,491			298,676			269,582			1,072,749
Other income (expense):
Interest income		4			23			47			90
Interest expense		(8,105	)		(1,121	)		(19,266	)		(4,809	)
Income before taxes		98,390			297,578			250,363			1,068,030
Income tax expense		504			(1,285	)		(1,491	)		(4,225	)
Net income	$	98,894		$	296,293		$	248,872		$	1,063,805

As of September 30, 2023 and December 31, 2022, USPB’s balance sheet reflected receivables from affiliates of $2.1 million, which included $1.9 million due from NBP for Connecticut, New Jersey and Iowa income taxes, and $0.9 million, respectively. The balance relates to amounts due from USPB members for state income taxes. The balance sheet also reflects amounts due to members and associates for leasing delivery rights to other cattle deliverers.