U. S. Premium Beef, LLC Annual Report - Your Investor's Guide to 2025

Welcome to your investor's guide to U. S. Premium Beef, LLC's (USPB) performance for the fiscal year ending December 27, 2025. This summary breaks down the key facts, figures, and future outlook in clear, accessible language.

1. Business Overview

U. S. Premium Beef (USPB) is a producer-owned company dedicated to maximizing value for cattle producers who supply high-quality beef. It aims to create a fully integrated system, from farm to plate, focusing on premium beef products. USPB helps producers earn more by delivering higher-quality beef.

How USPB operates: USPB connects its Class A unitholders (cattle producers) with National Beef Packing Company, LLC (NBP), facilitating cattle delivery. NBP then processes and markets the beef. Unitholders benefit in several ways:

• Premiums for higher-quality cattle.
• A share of NBP's profits through USPB.
• Potential increases in their unit value.
• Valuable data on their cattle's performance.

USPB's core business plan consistently focuses on facilitating cattle delivery to NBP and maximizing unitholder value.

In 2025, USPB continued its crucial partnership with NBP. Since its inception, USPB has delivered over 20.8 million cattle to NBP. In fiscal year 2025, USPB delivered approximately 1.4 million cattle to NBP, maintaining a consistent supply. USPB maintains a lean operation, employing just 8 people at year-end 2025. The company capitalizes on growing consumer demand for branded, higher-value beef products (like Certified Angus Beef®) by ensuring NBP receives the quality cattle required for these premium markets.

2. Risk Factors

Investing always carries risks, and USPB is no exception. Here are the most critical factors that could impact USPB and its unitholders:

• Extreme Reliance on National Beef Packing Company (NBP): USPB's most significant risk stems from its extreme reliance on NBP. USPB's financial performance depends almost entirely on NBP's profitability and the continuation of their cattle delivery agreements. Any adverse event affecting NBP—such as operational issues, financial distress, loss of market share, or a change in its relationship with USPB—would directly and severely impact USPB. NBP is the only beef processor with which USPB has a cattle delivery agreement.
• Illiquidity of Units: USPB's equity units are not traded on any public exchange. This means no readily available market exists for buying or selling units, making them highly illiquid. Unitholders may find it difficult to sell their units quickly or at a desired price, if at all.
• Commodity Market Volatility: The beef industry is subject to significant fluctuations in the cost of live cattle, feed, and other inputs, as well as cattle availability, demand, and pricing for beef products. These swings directly impact NBP's profitability and, consequently, USPB's share of NBP's earnings.
• Economic Downturns: General economic conditions can impact consumer spending on beef, affecting demand and prices, which in turn impacts NBP's sales and USPB's financial performance.
• Food Safety and Disease Outbreaks: Issues like food safety scares (e.g., E. coli) or livestock diseases (e.g., Bovine Spongiform Encephalopathy - BSE) could severely disrupt the beef industry, impacting NBP's operations and profitability.
• Regulatory and Environmental Changes: New government regulations, both domestic and foreign, related to food safety, environmental protection, animal welfare, or trade could increase NBP's operating costs or restrict its markets.
• Competition: NBP operates in a highly competitive industry. Increased competition or consolidation among beef processors or customers could affect NBP's market share and profitability.
• Key Personnel Risk: With only 8 employees, the loss of key management or operational personnel could be disruptive for USPB.
• "Smaller Reporting Company" Status: As a "Non-accelerated filer" and "Smaller reporting company," USPB has fewer and less complex reporting requirements compared to larger public companies. This means investors may have access to less frequent or detailed financial information.

3. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)

This section provides a narrative overview of USPB's financial performance and condition, highlighting significant trends and factors affecting its business.

Results of Operations for 2025: USPB's financial performance in 2025 showed continued strength, primarily driven by its significant investment in National Beef Packing Company, LLC (NBP). NBP generated $13.8 billion in total revenues, highlighting its scale and activity. USPB's total revenues increased to $15.5 million in 2025 from $14.8 million in 2024, a 4.7% year-over-year growth. This increase stemmed primarily from USPB's allocated share of NBP's earnings and administrative fees, reflecting NBP's robust performance. Net income also rose to $12.2 million in 2025 from $11.5 million in 2024, a 6.1% improvement. This consistent net income growth reflects NBP's performance and USPB's effective management of its lean operations.

Key Factors and Trends Affecting Performance:

• Consistent Cattle Supply: USPB maintained a consistent supply of approximately 1.4 million quality cattle to NBP in 2025. This consistent supply provides NBP with a crucial operational advantage for targeting higher-margin products and maintaining its market position.
• Strong Partnership & Investment Value: USPB's long-standing relationship and 15.0729% ownership in NBP connect it to a major force in the beef industry. NBP accounts for about 14% of all fed cattle slaughtered in the U.S., a significant market share that directly benefits USPB's unitholders through its equity earnings.
• Producer Empowerment: USPB continued to provide valuable carcass data and feedback to producers, helping them improve their cattle quality and ultimately achieve better returns. This strengthens the supply chain and ensures a consistent flow of premium cattle.
• Heavy Reliance on a Single Partner: As detailed in the Risk Factors, USPB's business depends almost entirely on NBP. Any significant negative impact on NBP's operations or financial health would directly and severely affect USPB's results.
• Commodity Market Volatility: NBP, and by extension USPB, operates in a commodity market. NBP's profitability can fluctuate significantly with the availability and cost of live cattle, as well as the demand and pricing for beef products. These inherent market swings directly impact USPB's share of NBP's earnings and thus its overall financial performance.

Liquidity and Capital Resources: As of December 27, 2025, USPB maintained a strong financial position with $25 million in cash and cash equivalents. The company's primary liquidity sources are its share of NBP's earnings and its efficient management of lean operational expenses. USPB carries no significant long-term debt, which contributes to its robust balance sheet and financial stability. Cash flow from operations remained strong at $13.0 million in 2025, up from $12.0 million in 2024, providing ample resources for distributions and operational needs. In 2025, USPB distributed $10.0 million to its unitholders, demonstrating its commitment to returning value.

4. Financial Performance

USPB's financial health is deeply intertwined with its significant investment in NBP, unlike traditional companies. USPB owns a substantial 15.0729% stake in NBP, a major beef industry player. In 2025, NBP generated $13.8 billion in total revenues, highlighting its scale and activity.

For USPB specifically, here's a snapshot of its financial performance for the fiscal year ending December 27, 2025, compared to the previous year:

USPB's revenues primarily come from its allocated share of NBP's earnings and administrative fees. Consistent net income growth reflects NBP's performance and USPB's effective operational management.

In 2025, USPB distributed $10.0 million to its unitholders, equating to approximately $0.0067 per unit (based on total units outstanding). This marks a slight increase from the $9.5 million distributed in 2024, demonstrating USPB's commitment to returning value.

As of February 28, 2026, 735,385 Class A units and 755,385 Class B units were outstanding, totaling 1,490,770 units.

• Class A units are generally held by active cattle producers who deliver cattle to NBP through USPB. These units typically carry voting rights and are often tied to specific delivery requirements.
• Class B units are often held by former producers or investors who do not actively deliver cattle. They typically have limited or no voting rights and may have different transferability restrictions compared to Class A units.
• The specific rights and restrictions for each class of units are detailed in USPB's operating agreement and should be thoroughly reviewed by any potential investor.

5. Financial Health

As of December 27, 2025, USPB maintained a strong financial position, primarily driven by its equity investment in NBP.

USPB maintains a healthy cash balance, covering its operational needs and distributions. The company's relatively low liabilities compared to its assets indicate a robust balance sheet. Its equity stake in NBP represents the vast majority of its total assets. USPB carries no significant long-term debt, further strengthening its financial stability and liquidity.

6. Competitive Position

USPB operates a unique business model. It does not directly compete with other beef packers. Instead, it serves as a specialized, producer-owned entity, partnering exclusively with NBP to provide a consistent supply of high-quality cattle. This model offers unitholders a distinct way to market their cattle for premium value and participate in a major beef processor's profits.

Its main partner, NBP, is an industry giant, processing about 14% of all fed cattle in the U.S. NBP's strong market position significantly benefits USPB and its unitholders, providing scale and market access individual producers might not otherwise achieve. USPB's competitive advantage lies in aggregating high-quality cattle from its unitholders, providing NBP with a reliable source for its premium beef programs. This, in turn, benefits unitholders through shared profits and premiums.

7. Future Outlook

USPB's future strategy remains clear: strengthen its partnership with NBP and enhance unitholder value. The "evergreen" renewal provision for its cattle delivery agreements suggests a sustained focus on providing NBP with a consistent supply of quality cattle. Its mission to increase beef quality and producer profitability remains central to its ongoing operations. USPB will likely continue focusing on operational efficiency and leveraging its NBP investment to drive returns.

In 2019, Jefferies (formerly Leucadia) sold its remaining stake in NBP. USPB chose not to participate in that sale, maintaining its 15.0729% ownership. This decision underscores USPB's long-term commitment to its strategic partnership with NBP and its current investment level, indicating a stable future strategic direction for its core asset.

8. Properties

USPB maintains a lean operational structure. Its primary physical assets consist of office space for administrative functions. The company does not own or operate significant processing facilities or large-scale agricultural properties; its partner, NBP, manages these.

9. Legal Proceedings

As of December 27, 2025, USPB was not involved in any material legal proceedings, nor did governmental authorities contemplate any such proceedings that would materially adversely affect its financial condition or results of operations.

10. Directors and Executive Officers

In fiscal year 2025, USPB experienced no significant changes in its executive leadership or Board of Directors. The company's governance structure supports its mission to maximize value for its producer-owners.