~~Table~~UNITED ~~of Contents~~STATES SECURITIES AND EXCHANGE COMMISSION

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)

x T QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~May 29~~November 27, 2010

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 333-111407

NATIONAL BEEF PACKING COMPANY, LLC

(Exact name of registrant as specified in its charter)

DELAWARE	48-1129505
(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)

Telephone: (800) 449-2333

(Registrant’s telephone number, including area code)

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 xT No o

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 o No o

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

Large Accelerated Filer o Accelerated Filer o Non-Accelerated Filer xT Small Reporting Company o

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

There is no market for the Registrant’s equity. As of ~~July 9~~January 7, ~~2010~~2011, there were 203,990,136 Class A units and 15,381,317 Class B units outstanding.

Table of Contents

TABLE OF CONTENTS

		Page No.
PART I.	FINANCIAL INFORMATION	Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements.	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	1917
Item 4.	Controls and Procedures.	2018
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings.	2119
Item 1A.	Risk Factors.	2119
Item 6.	Exhibits.	2119
	Signatures.	2220

Unless the context indicates or otherwise requires, the terms “National Beef,” “NBP,” “Company,” “we,” “our,” and “us” refer to National Beef Packing Company, LLC and its consolidated subsidiaries. As used in this report, the term “U.S. Premium Beef” ~~or “USPB”~~ refers to U.S. Premium Beef, LLC, a Delaware limited liability company, formerly U.S. Premium Beef, Ltd., a Kansas cooperative, which owns a majority interest in National Beef.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited).

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NATIONAL BEEF PACKING COMPANY, LLC

AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

	May 29, 2010
	November 27, 2010				August 28, 2010
	(unaudited)			August 29, 2009
Assets
Assets
Current assets:
Current assets:
Cash and cash equivalents	$	26,209			$	20,405
Cash and cash equivalents	$	20,082		$	17,373
Accounts receivable, less allowance for returns and doubtful accounts of $2,971 and $2,891, respectively		177,462				182,234
Accounts receivable, less allowance for returns and doubtful accounts of $3,391 and $1,511, respectively	205,784			172,420
Due from affiliates		4,896				4,961
Due from affiliates	3,837			4,532
Other receivables		7,860				7,399
Other receivables	7,070			7,165
Inventories		240,811				232,943
Inventories	216,706			175,300
Other current assets		68,431				45,999
Other current assets	18,596			16,602
Total current assets		525,669				493,941
Total current assets	472,075			393,392
Property, plant and equipment, at cost		538,923				526,712
Property, plant and equipment, at cost	507,286			479,926
Less accumulated depreciation		231,630				220,274
Less accumulated depreciation	208,685			174,295
Net property, plant and equipment		307,293				306,438
Net property, plant and equipment	298,601			305,631
Goodwill		81,242				81,242
Goodwill	81,242			81,242
Other intangibles, net of accumulated amortization of $13,735 and $13,661, respectively		22,795				22,858
Other intangibles, net of accumulated amortization of $13,129 and $11,450, respectively	23,392			24,760
Other assets		7,612				8,213
Other assets	4,976			4,120
	$	944,611			$	912,692
Total assets	$	880,286		$	809,145
Liabilities and Members’ Capital
Liabilities and Members’ Capital
Current liabilities:
Current liabilities:
Current installments of long-term debt	$	21,413			$	21,382
Current installments of long-term debt	$	6,635		$	11,458
Cattle purchases payable		88,713				70,208
Cattle purchases payable	63,100			49,806
Accounts payable – trade		69,374				73,522
Accounts payable — trade	66,671			69,073
Due to affiliates		942				718
Due to affiliates	1,101			1,042
Accrued compensation and benefits		31,362				78,401
Accrued compensation and benefits	61,751			50,857
Accrued insurance		17,841				15,048
Accrued insurance	15,162			16,344
Other accrued expenses and liabilities		34,910				27,091
Other accrued expenses and liabilities	11,353			14,585
Distributions payable		171,144				27,364
Distributions payable	32,698			35,183
Total current liabilities		435,699				313,734
Total current liabilities	258,471			248,348
Long-term debt, excluding current installments		257,771				225,090
Long-term debt, excluding current installments	280,116			287,370
Other liabilities		2,482				2,443
Other liabilities	2,155			2,364
Total liabilities		695,952				541,267
Total liabilities	540,742			538,082
Capital subject to redemption		268,291				291,746
Capital subject to redemption	264,371			183,407
Members’ capital:
Members’ capital:
Members’ capital attributable to NBP		(22,489	)			76,894
Members’ capital attributable to NBP	72,518			85,290
Accumulated other comprehensive income attributable to NBP		33				23
Accumulated other comprehensive income / (loss) attributable to NBP	6			(1		)
Noncontrolling interest in Kansas City Steak Company, LLC		2,824				2,762
Non-controlling interest in Kansas City Steak Company, LLC	2,649			2,367
Total members’ capital		(19,632	)			79,679
Total members’ capital	75,173			87,656
Commitments and contingencies		-				-
Commitments and contingencies	—			—
	$	944,611			$	912,692
Total liabilities, capital subject to redemption and members’ capital	$	880,286		$	809,145

See accompanying notes to consolidated financial statements.

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NATIONAL BEEF PACKING COMPANY, LLC

AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands)

	13 weeks ended			~~13 weeks ended~~	13 weeks ended		~~39 weeks ended~~			~~39 weeks ended~~
	May 29, 2010			May 30, 2009			May 29, 2010			May 30, 2009
	November 27, 2010				November 28, 2009
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net sales	$	1,587,320			$	1,342,610
Net sales	$	1,537,879		$	1,318,020		$	4,221,415		$	4,045,215
Costs and expenses:
Costs and expenses:
Cost of sales		1,505,439				1,273,312
Cost of sales	1,429,435			1,242,304			3,962,607			3,882,639
Selling, general and administrative		12,887				11,229
Selling, general and administrative	13,196			10,862			36,489			32,066
Depreciation and amortization		12,213				11,908
Depreciation and amortization	12,471			11,594			36,756			32,823
Total costs and expenses		1,530,539				1,296,449
Total costs and expenses	1,455,102			1,264,760			4,035,852			3,947,528
Operating income		56,781				46,161
Operating income	82,777			53,260			185,563			97,687
Other income (expense):
Other income (expense):
Interest income		7				29
Interest income	4			40			39			145
Interest expense		(2,598	)			(4,532	)
Interest expense	(3,513		)	(5,816		)	(11,563		)	(18,191		)
Other, net		596				7
Equity in loss of aLF Ventures, LLC	—			(8		)	—			(57		)
Income before taxes		54,786				41,665
Other, net	217			(617		)	(3,559		)	(4,452		)
Income tax expense		334				400
Income before taxes	79,485			46,859			170,480			75,132
Net income		54,452				41,265
Income tax expense	326			338			678			899
Net income attributable to noncontrolling interest		(62	)			(223	)
Net income	79,159			46,521			169,802			74,233
Net income attributable to NBP	$	54,390			$	41,042
Net income attributable to the non-controlling interest	(58		)	(232		)	(850		)	(950		)
Net income attributable to NBP	$	79,101		$	46,289		$	168,952		$	73,283

See accompanying notes to consolidated financial statements.

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NATIONAL BEEF PACKING COMPANY, LLC

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

	39 weeks ended			39 weeks ended
	13 weeks ended				13 weeks ended
	May 29, 2010			May 30, 2009
	November 27, 2010				November 28, 2009
	(unaudited)			(unaudited)
Cash flows from operating activities:
Cash flows from operating activities:
Net income	$	54,452			$	41,265
Net income	$	169,802		$	74,233
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		12,213				11,908
Depreciation and amortization	37,528			32,823
Gain on disposal of property, plant and equipment		(365	)			(128	)
(Gain) / loss on disposal of property, plant and equipment	(154		)	119
Amortization of debt issuance costs		345				195
Write-off of debt issuance costs	418			1,317
Change in assets and liabilities:
Change in assets and liabilities:
Accounts receivable		4,772				7,573
Accounts receivable	(33,364		)	29,247
Due from affiliates		65				982
Due from affiliates	695			3,758
Other receivables		(461	)			(2,491	)
Other receivables	95			(2,316		)
Inventories		(7,868	)			(12,020	)
Inventories	(41,406		)	11,702
Other assets		(22,187	)			(646	)
Other assets	(3,334		)	(3,970		)
Cattle purchases payable		15,986				8,713
Cattle purchases payable	5,505			7,767
Accounts payable		(747	)			(1,887	)
Accounts payable	(1,470		)	(4,569		)
Due to affiliates		224				(196	)
Due to affiliates	59			9
Accrued compensation and benefits		(47,039	)			(23,738	)
Accrued compensation and benefits	10,894			(10,465		)
Accrued insurance		2,793				(569	)
Accrued insurance	(1,182		)	(87		)
Other accrued expenses and liabilities		7,858				(671	)
Other accrued expenses and liabilities	(3,441		)	8,387
Net cash provided by operating activities		20,041				28,290
Net cash provided by operating activities	140,645			147,955
Cash flows from investing activities:
Cash flows from investing activities:
Capital expenditures, including interest capitalized		(13,405	)			(9,532	)
Capital expenditures, including interest capitalized	(28,867		)	(35,573		)
Proceeds from sale of property, plant and equipment		776				484
Proceeds from sale of property, plant and equipment	974			1,240
Net cash used in investing activities		(12,629	)			(9,048	)
Net cash used in investing activities	(27,893		)	(34,333		)
Cash flows from financing activities:
Cash flows from financing activities:
Net receipts under revolving credit lines		37,991				(29,168	)
Net receipts under revolving credit lines	8,718			52,448
Repayments under term note payable		(5,000	)			-
Repayments under term note payable	(23,102		)	(25,713		)
Borrowings under term note payable		-				75,000
Borrowings of term note payable	75,000			—
Change in overdraft balances		(882	)			12,705
Change in overdraft balances	6,857			(1,750		)
Purchase and cancellation of Senior Notes		-				(39,798	)
Purchase and cancellation of Senior Notes	(66,855		)	(45,479		)
Repayments of other indebtedness/capital leases		(279	)			(4,576	)
Net repayments of other indebtedness	(5,838		)	(3,104		)
Cash paid for financing costs		-				(1,018	)
Member capital redeemed	—			(125,484		)
Member distributions		(33,448	)			(36,083	)
Member capital contribution	—			75,484
Net cash used in financing activities		(1,618	)			(22,938	)
Cash paid for financing costs	(1,017		)	—
Effect of exchange rate changes on cash		10				22
Member distributions	(103,245		)	(50,369		)
Net increase (decrease) in cash		5,804				(3,674	)
Distributions paid to non-controlling interest	(568		)	(390		)
Cash and cash equivalents at beginning of period		20,405				17,373
Net cash used in financing activities	(110,050		)	(124,357		)
Cash and cash equivalents at end of period	$	26,209			$	13,699
Effect of exchange rate changes on cash	7			(32		)
Supplemental disclosures:
Net increase (decrease) in cash	2,709			(10,767		)
Cash paid during the period for interest	$	2,437			$	3,516
Cash and cash equivalents at beginning of period	17,373			25,466
Cash paid during the period for taxes	$	14			$	79
Cash and cash equivalents at end of period	$	20,082		$	14,699
Supplemental non-cash disclosures of investing and financing activities;
Supplemental disclosures:
Assets acquired through capital lease	$	52			$	55
Cash paid during the period for interest	$	11,285		$	15,802
Cash paid/(received) during the period for taxes, net of $0 and $925 refunds, respectively	729			(771		)

See accompanying notes to consolidated financial statements.

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NATIONAL BEEF PACKING COMPANY, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) Interim Financial Statements

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles, (or GAAP), for interim financial information; therefore, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments. For further information, refer to the audited Consolidated Financial Statements and Notes to Consolidated Financial Statements, which are included in NBP’s Annual Report on Form 10-K on file with the Securities and Exchange Commission, (or SEC), for the fiscal year ended August 29 28, ~~2009~~2010. The results of operations for the interim periods presented are not necessarily indicative of the results for a full fiscal year.

(2) New Accounting Pronouncements

~~On June 29,~~In ~~2009~~January 2010, the Financial Accounting Standards Board (“FASB”) issued ~~FASB~~ Accounting Standards ~~Codification~~Update (~~the ASC~~“ASU”) ~~under~~No. ~~ASC 105~~2010-1006, asFair ~~the~~Value ~~source~~Measurements ofand ~~authoritative~~Disclosures. The ~~accounting~~Update ~~principles~~issued ~~recognized~~guidance byto amend the ~~FASB to~~disclosure berequirements ~~applied~~related byto ~~nongovernmental~~recurring ~~entities. This~~and ~~pronouncement~~nonrecurring ~~was~~fair ~~effective~~value ~~for~~measurements. The ~~financial~~guidance ~~statements~~requires ~~issued~~additional ~~for interim~~disclosures ~~and~~about ~~annual~~the ~~periods~~different ~~ending~~classes ~~after~~of ~~September 15,~~assets ~~2009~~and ~~for~~liabilities ~~most entities. On~~measured ~~the~~at ~~effective~~fair ~~date~~value, ~~all non-SEC~~the ~~accounting~~valuation ~~and~~techniques ~~reporting standards were superseded. Rules~~ and ~~interpretive~~inputs ~~releases~~used, of the ~~SEC~~ ~~under~~activity ~~the~~in ~~authority~~Level of3 ~~federal~~fair ~~securities~~value ~~laws~~measurements, ~~are~~and ~~also~~the ~~sources~~transfers ~~of authoritative~~between ~~GAAP~~Levels ~~for~~1, ~~SEC~~2, ~~registrants. All~~and ~~other~~3 ~~accounting~~of ~~literature~~the isfair ~~considered~~value ~~non-authoritative~~measurement hierarchy. ~~The~~ This ~~switch~~guidance towill ~~ASC~~become ~~affects~~effective for the ~~manner~~Company’s inyear ~~which companies~~ending ~~refer to U.S. GAAP~~ in ~~financial~~fiscal ~~statements and note disclosures~~2012. The ~~Company~~adoption ~~adopted this body~~ of ~~accounting for~~ASU ~~the~~No. ~~quarterly~~2010-06 ~~period~~should ~~ended November 28, 2009, as required, and adoption did~~ not ~~have~~significantly ~~a material~~ impact onthe ~~our~~Company’s consolidated financial ~~statements~~ ~~taken~~position asor aresults ~~whole~~of operations.

In December 2007, the FASB issued Business Combinations under ASC 805. This statement requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date to be measured at their fair value as of that date. An acquirer is required to recognize assets or liabilities arising from all other contingencies (~~contractual contingencies~~3) as of the acquisition date, measured at their acquisition-date fair values, only if it is more likely than not that they meet the definition of an asset or a liability in FASB Concepts Statement No. 6, Elements of Financial Statements. Any acquisition-related costs are to be expensed instead of capitalized. The Company adopted ASC 805 on August 30, 2009 and the impact will depend on future acquisitions at the time.Inventories

~~Also in~~Inventories ~~December 2007,~~consist ~~the~~primarily ~~FASB~~of ~~issued~~meat ~~Noncontrolling Interests~~products inand ~~Consolidated Financial Statements - an Amendment of ARB No~~supplies. ~~51 under~~ Product ~~ASC~~inventories ~~810-10-65,~~are ~~which~~considered ~~establishes~~commodities ~~accounting~~ and ~~reporting~~are ~~standards~~recorded ~~for the~~based ~~noncontrolling~~on ~~interest~~quoted ~~(minority~~commodity ~~interest)~~prices, inwhich aapproximate ~~subsidiary. ASC 810-10-65~~net ~~requires~~realizable ~~non-controlling~~value. Supply ~~interests~~and ~~held~~other byinventories ~~parties~~are ~~other~~valued ~~than~~on the ~~parent~~ inbasis ~~subsidiaries~~of ~~be clearly identified~~first-in, ~~labeled~~first-out, ~~and~~specific ~~presented~~or inaverage ~~the consolidated~~cost ~~balance sheet within equity, but separate from the parent’s equity~~methods. ~~The~~Product ~~Company’s~~inventories ~~adoption~~are ofrelieved ~~ASC~~from ~~810-10-65~~inventory asutilizing ofthe ~~August 30~~first-in, ~~2009~~ ~~changed the presentation of the non~~first-~~controlling~~out ~~interest~~method.

5Inventories at November 27, 2010 and August 28, 2010 consisted of the following (in thousands):

Table of Contents

	November 27, 2010		August 28, 2010

Dressed and boxed meat products	$	157,490	$	154,927
Beef by-products		45,863		46,891
Supplies and other		37,458		31,125
Total inventory	$	240,811	$	232,943

In February 2008, the FASB issued Fair Value Measurements under ASC 820-10, which deferred the effective date of fair value measurement for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in an entity’s financial statements on a recurring basis, at least annually. There was no impact when the Company adopted for these nonfinancial assets and nonfinancial liabilities on August 30, 2009. These assets and liabilities are measured at fair value on an ongoing basis but are reported at fair value only in certain circumstances.5

~~(3) Inventories~~Table of Contents

~~Inventories~~(4) ~~consist primarily~~Comprehensive of meat products and supplies. Product inventories are considered commodities and are recorded based on quoted commodity prices, which approximate net realizable value. Supply and other inventories are valued on the basis of first-in, first-out, specific or average cost methods. Product inventories are relieved from inventory utilizing the first-in, first-out method.Income

~~Inventories~~Comprehensive ~~at May 29~~income, ~~2010~~ which consists of net income and ~~August 29~~foreign currency translation adjustments, ~~2009~~was ~~consisted~~as offollows for the ~~following~~periods indicated (in thousands):

	May 29, 2010			August 29, 2009
	13 weeks ended				13 weeks ended
Dressed and boxed meat products	$	141,139		$	119,274
	November 27, 2010				November 28, 2009
Beef by-products	39,546			29,756
Net income	$	54,452			$	41,265
Supplies and other	36,021			26,270
Other comprehensive income (loss):
Total inventory	$	216,706		$	175,300
Foreign currency translation adjustments		10				22
Comprehensive income		54,462				41,287
Comprehensive income attributable to the noncontrolling interest		(62	)			(223	)
Comprehensive income attributable to NBP	$	54,400			$	41,064

(45) ~~Comprehensive~~ ~~Income~~Contingencies

~~Comprehensive~~National ~~income~~Beef Leathers, ~~which consists~~LLC, or NBL, a wholly-owned subsidiary of ~~net~~NBP, ~~income~~has ~~and~~been ~~foreign~~a ~~currency~~named ~~translation~~defendant ~~adjustments~~in two purported class actions involving NBL's tannery located in St. Joseph, ~~was~~Missouri, ~~as follows~~which NBL purchased in March 2009. These lawsuits were filed on July 22, 2009 in the U.S. District Court for the ~~periods~~Western ~~indicated~~District (of Missouri. The lawsuits alleged that NBL spread wastewater sludge containing hexavalent chromium in ~~thousands):~~four counties in northwest Missouri. The plaintiffs were seeking an unspecified amount of damages for economic damages, punitive damages, diminished property values and medical monitoring. The claims against NBL in these lawsuits were dismissed on December 2, 2010 and December 10, 2010. As a result of these dismissals, NBL is no longer a party to these lawsuits.

	13 weeks ended			13 weeks ended			39 weeks ended			39 weeks ended
	May 29, 2010			May 30, 2009			May 29, 2010			May 30, 2009
Net income	$	79,159		$	46,521		$	169,802		$	74,233
Other comprehensive income / (loss):
Foreign currency translation Adjustments	(11		)	42			7			(32		)
Comprehensive income	79,148			46,563			169,809			74,201
Comprehensive income attributable to the non-controlling interest	(58		)	(232		)	(850		)	(950		)
Comprehensive income attributable to NBP	$	79,090		$	46,331		$	168,959		$	73,251

The Company 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 the Company’s financial condition, results of operations or liquidity.

(56) ~~Contingencies~~ Capital Subject to Redemption

~~National Beef~~At ~~Leathers, LLC,~~any ortime ~~NBL~~after certain dates, athe ~~wholly-owned~~earliest ~~subsidiary~~being ofJuly ~~NBP LLC~~31, ~~is a~~2010 ~~named defendant~~ in ~~two~~the ~~currently~~case ~~pending~~of ~~purported~~NBPCo ~~class~~Holdings, ~~actions~~the ~~involving NBL’s~~latest ~~tannery~~being ~~located~~July ~~in St. Joseph~~31, ~~Missouri,~~2011 ~~which NBL purchased~~ in ~~March 2009. These lawsuits were filed on July 22, 2009 in~~ the ~~U.S.~~case ~~District~~of ~~Court~~certain ~~for~~affiliates ~~the Western District~~ of ~~Missouri.~~our ~~The lawsuits~~Chief ~~allege~~Executive ~~that~~officer, ~~NBL~~Timothy ~~spread wastewater sludge containing hexavalent chromium in four counties in northwest Missouri~~M. ~~The~~Klein, ~~plaintiffs~~or ~~are~~the ~~seeking~~Klein ~~an unspecified amount of damages for economic damages~~Affiliates, ~~punitive~~NBPCo ~~damages, diminished~~Holdings ~~property values~~ and ~~medical~~the ~~monitoring.~~Klein OnAffiliates ~~May 11,~~have ~~2010,~~ the ~~court~~ ~~issued~~right anto ~~order~~request ~~ruling~~ that ~~NBL~~the isCompany ~~not~~repurchase ~~liable~~their ~~under~~interests, ~~a successor liability theory for~~ the ~~conduct~~value of ~~the~~which ~~tannery’s~~is ~~previous~~to ~~owner~~be ~~and~~determined ~~another~~by ~~party~~a ~~prior to~~mutually ~~NBL’s~~agreed ~~purchase~~appraisal ofprocess ~~the~~or ~~tannery. As~~ a ~~result~~ ofspecified ~~this~~formula. If ~~ruling,~~ the ~~plaintiffs~~Company inis 15unable ~~lawsuits~~to ~~filed~~effect ~~between April 22, 2009 and April 29, 2010, in~~ the ~~Circuit~~repurchase ~~Courts~~within ofa ~~Buchannan~~specified ~~County~~time, ~~Clinton~~ ~~County,~~the ~~and~~requesting ~~DeKalb~~member(s) ~~County,~~have ~~Missouri~~the ~~seeking~~right ~~damages~~to ~~for~~cause ~~economic damages,~~a ~~punitive~~sale ~~damages,~~process ~~diminished~~to ~~property values and~~commence.

6Generally accepted accounting principles require the Company to determine the fair value of the capital subject to redemption at the end of each reporting period. To the extent this value increases, this change in fair value is accreted over the redemption period. In determining the fair value of the capital subject to redemption held by NBPCo Holdings as of November 27, 2010, management has considered previous redemption prices, valuations of peer companies and other factors. The capital subject to redemption held by the Klein Affiliates as of November 27, 2010 was valued based upon a contractually stipulated valuation formula.

~~Table~~The Company accounts for changes in the redemption value of ~~Contents~~ these interests by accreting the change in value from the date of change through the earliest redemption date of the respective interests. At November 27, 2010, the value of the capital subject to redemption was determined to be $273.9 million, which was in excess of its carrying value. The total value of the capital subject to redemption at November 27, 2010, decreased by approximately $23.3 million compared to the value at August 28, 2010, primarily related to distributions offset by net income. The carrying value of the capital subject to redemption increased by approximately $14.2 million through accretion during the three months ended November 27, 2010, resulting in the $268.3 million carrying value, as reflected in the accompanying consolidated balance sheet as of November 27, 2010. Offsetting the change in value of capital subject to redemption is a corresponding change in members’ capital.

medical monitoring voluntarily dismissed their claims against NBL in June 2010. NBL believes it has meritorious defenses to the claims in the remaining two lawsuits and intends to defend them vigorously.6

~~The Company~~Table ~~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 the Company’s financial condition, results of operations or liquidity.Contents

(67) ~~Capital~~ ~~Subject~~Fair ~~to Redemption~~Value Measurements

~~At any~~The ~~time~~Company ~~after~~determines ~~certain~~fair ~~dates,~~value ~~the~~utilizing ~~earliest~~a ~~being~~three-level ~~July 31,~~fair ~~2010,~~value ~~the~~hierarchy ~~latest being~~that ~~July 31,~~prioritizes ~~2011,~~the ~~certain~~inputs ~~affiliates~~used ofto ~~our~~measure ~~Chief~~fair ~~Executive officer, Timothy M~~value. The ~~Klein~~fair ~~(collectively~~value ~~referred~~hierarchy togives ~~herein as~~ the ~~“Klein~~highest ~~Affiliates”), and/or~~priority ~~NBPCo Holdings have the right~~ to ~~request~~quoted ~~that~~market ~~the~~prices ~~Company~~(Level ~~repurchase their~~1) ~~interests,~~and the ~~value~~lowest ofpriority ~~which is~~ to beunobservable ~~determined~~inputs by(Level ~~a specified formula or a mutually agreed appraisal process~~3). If The ~~the~~three ~~Company~~levels isof ~~unable~~inputs toused ~~effect the repurchase within a specified time, the requesting member(s) have the right~~ to ~~cause~~measure afair ~~sale~~value ~~process~~are ~~to commence.~~as follows:

~~Generally~~• ~~accepted~~Level ~~accounting~~1 ~~principles~~– ~~require~~quoted the Company to determine the fair value of the capital subject to redemption at the end of each reporting period. To the extent this value increases, the change in fair value is accreted over the redemption period. In determining the fair value of the capital subject to redemption held by NBPCo Holdings as of May 29, 2010, management has considered previous redemption prices, valuations of peer companies and other factors. A portion of the Klein Affiliates’ capital subject to redemption as of May 29, 2010 was valued based upon the redemption that occurred on June 2, 2010, as described in ~~Note~~active 10markets ~~below. The remaining~~for ~~capital~~identical ~~subject~~assets toor ~~redemption~~liabilities ~~held~~accessible by the ~~Klein~~reporting ~~Affiliates as of May 29, 2010 was valued based upon a contractually stipulated valuation formula~~entity.

~~The~~• ~~Company~~Level ~~accounts~~2 ~~for~~– ~~changes~~observable ininputs ~~the~~other ~~redemption~~than ~~value~~quoted ofprices ~~these interests~~included ~~by accreting the change~~ in ~~value~~Level ~~from the date of change through the earliest redemption date of the respective interests. At May 29~~1, ~~2010,~~such ~~the~~as ~~value~~quoted ofprices ~~the capital~~for ~~subject~~similar toassets ~~redemption was~~and ~~determined to~~liabilities ~~be $295.4 million, which was~~ in ~~excess~~active ofmarkets; ~~its~~quoted ~~carrying~~prices ~~value. Accordingly,~~for ~~the~~identical ~~carrying~~or ~~value~~similar ofassets ~~the capital~~and ~~subject~~liabilities toin ~~redemption~~markets ~~increased~~that byare ~~approximately~~not ~~$31.2~~active; ~~million~~or ~~through accretion~~other ~~during~~inputs ~~the~~that ~~thirteen~~are ~~weeks~~observable ~~ended~~or ~~May 29,~~can ~~2010,~~be ~~resulting~~corroborated inby ~~the $264.4~~observable ~~million~~market ~~carrying value, as reflected in the accompanying consolidated balance sheet as of May 29, 2010~~data.

~~The~~• ~~total~~Level ~~value~~3 of– ~~the capital~~unobservable ~~subject~~inputs tofor ~~redemption~~an atasset ~~May 29,~~or ~~2010, increased by approximately $54~~liability.9 ~~million~~Unobservable ~~compared~~inputs toshould ~~the~~only ~~value~~be atused ~~August 29,~~to ~~2009. Offsetting~~ the ~~change~~extent inobservable ~~the~~inputs ~~value~~are ofnot ~~the capital subject to redemption is a corresponding change in members’ capital~~available.

~~(7) Fair~~The ~~Value~~following ~~Measurements~~table details the assets and liabilities measured at fair value on a recurring basis as of November 27, 2010 and August 28, 2010 and also the level within the fair value hierarchy used to measure each category of assets (in thousands).

The Company 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:

Description	November 27, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Other current assets – derivatives	$	27,639	$	4,966	$	22,673	$	-
Other accrued expenses and liabilities – derivatives	$	22,925	$	22,925	$	-	$	-
Capital subject to redemption	$	268,291	$	-	$	56,720	$	211,571

· Level 1 — quoted prices in active markets for identical assets or liabilities accessible by the reporting entity.

Description	August 28, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Other current assets – derivatives	$	15,563	$	61	$	15,502	$	-
Other accrued expenses and liabilities – derivatives	$	14,672	$	14,672	$	-	$	-
Capital subject to redemption	$	291,746	$	-	$	61,854	$	229,892

~~· Level~~Management 2has ~~— observable~~used ~~inputs~~certain ~~other~~contractual ~~than~~redemption ~~quoted~~ prices ~~included~~ in ~~Level~~measuring 1,the ~~such~~fair asvalue ~~quoted prices~~of ~~for~~the ~~similar~~Klein ~~assets~~Affiliates ~~and~~capital ~~liabilities~~subject into ~~active~~redemption, ~~markets;~~which ~~quoted~~is ~~prices~~included ~~for identical~~in orlevel ~~similar~~2 ~~assets~~as of November 27, 2010 and ~~liabilities~~August in28, ~~markets~~2010. NBPCo ~~that~~Holdings ~~are~~capital ~~not~~subject ~~active;~~to ~~or other~~redemption is based upon unobservable inputs, ~~that~~thus ~~are~~included ~~observable~~in orlevel ~~can~~3 beas ~~corroborated~~of byNovember ~~observable~~27, ~~market data~~2010 and August 28, 2010.

~~· Level 3 — unobservable inputs for an asset or liability. Unobservable inputs should only be used to the extent observable inputs are not available.~~7

7Table of Contents

~~Table~~ The following table presents a reconciliation of ~~Contents~~capital subject to redemption measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended November 27, 2010 (in thousands).

The following table details the assets and liabilities measured at fair value on a recurring basis as of May 29, 2010 and August 29, 2009 and also the level within the fair value hierarchy used to measure each category of assets (in thousands).

	Level 3 Fair Value Measurements at November 27, 2010
	Capital Subject to Redemption
Balance, August 28, 2010	$	229,892
Allocation of net income		13,486
Class A 5% priority distributions		(736	)
Class B distributions		(6,021	)
Equity distribution		(37,156	)
Appraisal valuation adjustment		12,106
Balance, November 27, 2010	$	211,571

Description	May 29, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other current assets — derivatives	$	4,629	$	4,629	$	—	$	—
Other accrued expenses and liabilities — derivatives	$	3,008	$	261	$	2,747	$	—
Capital subject to redemption	$	264,371	$	—	$	61,963	$	202,408

(8) Disclosure about Derivative Instruments and Hedging Activities

Description	August 29, 2009		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Other current assets — derivatives	$	1,442	$	1,442	$	—	$	—
Other accrued expenses and liabilities — derivatives	$	5,087	$	3,535	$	1,552	$	—
Capital subject to redemption	$	183,407	$	—	$	183,407	$	—

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

~~Management~~· ~~has~~Forward ~~used~~purchase ~~certain agreed-upon~~contracts ~~redemption~~for ~~prices~~cattle infor ~~measuring~~use the fair value of the Klein Affiliates capital subject to redemption, which is classified as level 2 as of May 29, 2010. NBPCo Holdings shares are based upon unobservable inputs, thus classified as level 3 as of May 29, 2010. Management has used certain agreed-upon redemption prices in ~~measuring~~our ~~the~~beef fair value of the capital subject to redemption as of August 29, 2009. During the 3 months ended May 29, 2010 we have transferred the calculated fair value of NBPCO’s capital subject to redemption from level 2 to level 3 based upon the change in valuation techniques due to the amount of time lapsed and changes in business from the previous agreed-upon redemption price.plants

~~(8) Disclosure~~· ~~about Derivative~~Exchange ~~Instruments~~traded ~~and~~futures ~~Hedging~~contracts ~~Activities~~for cattle

As· ~~part~~Exchange oftraded ~~the~~futures ~~Company’s ongoing~~contracts ~~operations,~~for the Company is exposed to market risks such as changes in commodity prices. To manage these risks, the Company may enter into the following derivative instruments pursuant to our established policies:grain

~~· Forward~~While ~~purchase~~management ~~contracts for~~believes ~~cattle~~each of these instruments helps mitigate various market risks, they are not designated and accounted for ~~use~~as hedges as a result of the extensive recordkeeping requirements associated with hedge accounting. Accordingly, the gains and losses associated with the change in ~~our~~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 ~~plants~~sales are treated as normal purchases and sales and not recorded at fair value.

~~· Exchange~~The Company enters into certain commodity derivatives, primarily with a diversified group of highly rated 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 November 27, 2010 as all derivatives in an asset position are exchange-traded ~~futures~~ contracts. The ~~for~~exchange-traded ~~cattle~~contracts have been entered into under a master netting agreement. None of the derivatives entered into have credit-related contingent features. The Company has $27.9 million in cash collateral posted on its derivative liabilities.

~~· Exchange~~The ~~traded~~following ~~futures contracts~~table ~~for~~presents ~~grain~~the fair values as discussed in Note 6 and other information regarding derivative instruments not designated as hedging instruments as of November 27, 2010, and August 28, 2010 (in thousands):

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 treated as normal purchases and sales and not recorded at fair value.

	Derivative Asset			Derivative Liability

	As of November 27, 2010			As of November 27, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Other current assets	$	27,639	Other accrued expenses and liabilities	$	22,925
Totals		$	27,639		$	22,925

The Company enters into certain commodity derivatives, primarily with a diversified group of highly rated 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 May 29, 2010 as all derivatives in an asset position are exchange-traded contracts. The exchange-traded contracts have been entered into under a master netting agreement, and are netted on the8

8Table of Contents

Table of Contents

	Derivative Asset			Derivative Liability

	As of August 28, 2010			As of August 28, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Other current assets	$	15,563	Other accrued expenses and liabilities	$	14,672
Totals		$	15,563		$	14,672

~~consolidated balance~~The ~~sheets. None~~following table presents the impact of derivative instruments on the ~~derivatives entered~~Consolidated ~~into~~Statement ~~have~~of ~~credit-related~~Operations ~~contingent~~for ~~features. The~~the ~~Company~~thirteen-week ~~has~~period ~~$3.4~~ended ~~million~~November in27, ~~cash~~2010 ~~collateral posted~~and onNovember ~~its~~28, ~~derivative~~2009 ~~liabilities.~~(in thousands):

The following table presents the fair values as discussed in Note 6 and other information regarding derivative instruments not designated as hedging instruments as of May 29, 2010 and August 29, 2009 (in thousands of dollars):

Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivatives	Amount of Gain or (Loss) Recognized in Income on Derivatives			Amount of Gain or (Loss) Recognized in Income on Derivatives
		13 Weeks Ended November 27, 2010			13 Weeks Ended November 28, 2009
Commodity contracts	Net sales	$	6,970		$	(6,757	)
Commodity contracts	Cost of sales		(6,489	)		3,543
Totals		$	481		$	(3,214	)

	Derivative Asset			Derivative Liability
	As of May 29, 2010			As of May 29, 2010
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Other current assets	$	4,629	Other accrued expenses and liabilities	$	3,008
Totals		$	4,629		$	3,008

(9) Segments

	Derivative Asset			Derivative Liability
	As of August 29, 2009			As of August 29, 2009
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Commodity contracts	Other current assets	$	1,442	Other accrued expenses and liabilities	$	5,087
Totals		$	1,442		$	5,087

The Company’s operating segments are based on segment profit and evaluated by the Chief Executive Officer, who also serves as the Chief Operating Decision Maker. Segment profit is measured as operating income for NBP’s two reporting segments, Core Beef and Other, based on the definitions provided in ASC 280, Segment Reporting.

~~The~~Core ~~following~~Beef—the ~~table~~majority ~~presents~~of NBP’s revenues are generated from the ~~impact~~sale of ~~derivative~~fresh ~~instruments~~meat, ~~on the~~which ~~Consolidated~~include ~~Statement~~chuck ofcuts, ~~Operations~~rib ~~for~~cuts, ~~the~~loin ~~thirteen~~cuts, round cuts, thin meats, ground beef, and ~~thirty~~other products. In addition, we sell beef by-~~nine~~products ~~week periods~~including ~~ended~~hides ~~May 29~~to the variety meat, ~~2010~~feed ~~(in~~processing, ~~thousands~~fertilizer, pet food and leather tanning industries. Aggregation criteria were applied to determine the constituents of ~~dollars):~~the Core Beef segment.

Derivatives Not Designated as Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivatives	Amount of Gain or (Loss) Recognized in Income on Derivatives
		13 Weeks ended May 29, 2010			39 Weeks ended May 29, 2010
Commodity contracts	Net sales	$	(11,866	)	$	(8,697	)
Commodity contracts	Cost of sales	8,794			857
Totals		$	(3,072	)	$	(7,840	)

Other—the Other segment of NBP consists of the operations of National Carriers, National Elite Transportation, LLC, or National Elite, a provider of transportation logistics services, and Kansas City Steak.

~~(9) Segments~~Eliminations—this line item includes eliminations of inter-segment and intra-segment activity resulting from the consolidation process.

The Company’s operating segments are based on segment profit and evaluated by the Chief Executive Officer, who also serves as the Chief Operating Decision Maker (CODM). Segment profit is measured as operating income for NBP’s two reporting segments, Core Beef and Other, based on the definitions provided in ASC 280, Disclosures about Segments of an Enterprise and Related Information.9

~~Core~~Table ~~Beef—the majority~~ of NBP’s revenues are generated from the sale of fresh meat, which include chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef, and other products. In addition, we also sell beef by-products to the variety meat, feed processing, fertilizer and pet food industries. Aggregation criteria were applied to determine the constituents of the Core Beef segment.Contents

9The following table represents segment results for the periods indicated (amounts in thousands):

Table of Contents

	13 weeks ended			13 weeks ended
	November 27, 2010			November 28, 2009
Net sales:
Core beef	$	1,620,788		$	1,363,131
Other		53,646			54,920
Eliminations		(87,114	)		(75,441	)
Total net sales	$	1,587,320		$	1,342,610

Operating income:
Core beef	$	56,432		$	44,729
Other		349			1,432
Total operating income		56,781			46,161

Interest income		7			29
Interest expense		(2,598	)		(4,532	)
Other income, net		596			7
Total income before taxes	$	54,786		$	41,665

	November 27, 2010			November 28, 2009
Assets:
Core beef	$	899,616		$	766,041
Other		46,885			45,027
Eliminations		(1,890	)		(904	)
Total assets	$	944,611		$	810,164

~~Other—the~~(10) ~~Other~~Subsequent segment of NBP consists of the operations of National Carriers, Inc., a refrigerated and livestock contract carrier company, National Elite Transportation, LLC, a provider of transportation logistics services, and Kansas City Steak Company, LLC, a portion control steak cutting operation.Events

~~Eliminations—this~~On ~~line~~November ~~item~~29, ~~includes~~2010, ~~eliminations~~the ~~of inter-segment~~Company drew $175 million under the Amended and ~~intra-segment~~Restated ~~activity~~Credit ~~resulting~~Agreement. The ~~from~~draw was made to fund distributions to the ~~consolidation process~~Company’s members and for general corporate purposes. The draw constitutes the last of a series of term loans under the Credit Facility not to exceed $375 million in the aggregate. The total amount of term loans outstanding under the Credit Facility immediately following the draw was approximately $370 million.

~~The~~On ~~following~~November ~~table represents~~29, ~~segment~~2010, ~~results~~the ~~for~~Company paid an approximately $141.2 million cash distribution to certain members based on approval by the ~~periods~~Board ~~indicated~~of ~~(in~~Managers ~~thousands):~~on October 27, 2010 of a $150 million cash distribution. The remaining $8.8 million was paid to certain members on January 3, 2011.

	13 weeks ended			13 weeks ended			39 weeks ended			39 weeks ended
	May 29, 2010			May 30, 2009			May 29, 2010			May 30, 2009
Net sales:
Core beef	$	1,575,926		$	1,331,722		$	4,306,246		$	4,070,295
Other	53,954			61,387			173,962			180,857
Eliminations	(92,001		)	(75,089		)	(258,793		)	(205,937		)
Total net sales	$	1,537,879		$	1,318,020		$	4,221,415		$	4,045,215
Operating income:
Core beef	$	82,252		$	51,865		$	181,911		$	92,370
Other	525			1,395			3,652			5,317
Total operating income	82,777			53,260			185,563			97,687
Interest income	4			40			39			145
Interest expense	(3,513		)	(5,816		)	(11,563		)	(18,191		)
Other (expense) / income, net	217			(625		)	(3,559		)	(4,509		)
Total income before taxes	$	79,485		$	46,859		$	170,480		$	75,132
	May 29, 2010			May 30, 2009
Assets:
Core beef	$	836,339		$	784,636
Other	44,155			42,668
Eliminations	(208		)	(516		)
Total assets	$	880,286		$	826,788

On December 17, 2010, the Company entered into a series of agreements with the City of St. Joseph, Missouri to provide Missouri Chapter 100 bonds in the amount of $14.5 million. The Company agreed to purchase the bonds which would effectively provide property tax abatement on certain equipment, which will be leased to the Company by the City of St. Joseph under a capital lease, located at the Company’s hide processing facilities in St. Joseph, Missouri. Additionally, the Company entered into a Payment in Lieu of Taxes Agreement related to the abatement. As a result of the legal right of offset, the capital lease obligation and corresponding bond investment will be eliminated in consolidation.

(10~~) Subsequent Events~~

~~On June 2,~~Table ~~2010, the Company entered into a Unit Redemption Agreement pursuant to Section 12.5~~ of our LLC Agreement to redeem at agreed-upon redemption prices a portion of the membership interests in the Company that are owned or controlled by our Chief Executive Officer, Timothy M. Klein. As a result, Mr. Klein’s affiliates received $8.0 million for their redeemed units, and he retained his position with the Company.Contents

~~In addition,~~Item ~~the Company~~2. Management’s ~~Credit~~Discussion ~~Facility was amended~~ and ~~restated~~Analysis ~~on June 4, 2010. The amendment and restatement increased the available borrowings under our term loan to $375.0 million, increased the revolving line~~ of ~~credit~~ toFinancial ~~$250.0~~Condition ~~million, reduced the applicable margin of the term loan~~ and ~~revolving~~ ~~line~~Results of ~~credit, extended the maturity date of the term loan to June 2015 and revised the payment schedule of the term loan, among other things~~Operations. ~~The related bank financing charges of approximately $4.1 million will be amortized over the life of the loan.~~

10The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this report.

~~Table~~Disclosure ~~of Contents~~Regarding Forward-Looking Statements

~~Item~~This 2report contains “forward-looking statements,” which are subject to a number of risks and uncertainties, many of which are beyond our control. Forward-looking ~~Management’s~~statements ~~Discussion~~are typically identified by the words “believe,” “expect,” “anticipate,” “intend,” “estimate” and ~~Analysis~~similar expressions. Actual results could differ materially from those contemplated by these forward-looking statements as a result of ~~Financial~~many ~~Condition~~factors, including economic conditions generally and ~~Results~~in our principal markets, the availability and prices of ~~Operations~~live cattle and commodities, food safety issues, livestock disease, including the identification of cattle with Bovine Spongiform Encephalopathy, or BSE, product contamination and recall concerns, competitive practices and consolidation in the cattle production and processing industries and among our customers, actions of domestic or foreign governments, hedging risk, changes in interest rates and foreign currency exchange rates, trade barriers and exchange controls, 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.

~~The following~~In ~~discussion~~light ~~should~~of these risks and uncertainties, there can be ~~read~~no assurance that the results and events contemplated by the forward-looking information contained in ~~conjunction~~this ~~with~~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 ~~Consolidated Financial~~behalf ~~Statements~~are ~~and~~expressly ~~related~~qualified ~~notes~~in ~~and~~their ~~other~~entirety ~~financial~~by ~~information appearing~~these ~~elsewhere~~factors. Please review Part II. 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.

~~Disclosure Regarding~~Industry ~~Forward-Looking Statements~~Outlook

~~This~~We ~~report~~anticipate ~~contains~~fed ~~“forward-looking~~cattle ~~statements,”~~supplies ~~which~~to ~~are~~remain ~~subject~~above ~~to a~~prior ~~number~~year oflevels ~~risks~~through ~~and~~the ~~uncertainties,~~winter ~~many~~quarter offollowing ~~which~~active ~~are~~late ~~beyond~~summer ~~our~~placements ~~control. Forward-looking~~and ~~statements~~very ~~are~~favorable ~~typically identified~~cattle byfeeding ~~the~~conditions ~~words~~through ~~“believe,”~~the ~~“expect,”~~fall. The ~~“anticipate,”~~anticipated ~~“intend,”~~greater ~~“estimate”~~ supplies and ~~similar~~heavier ~~expressions. Actual~~weights ~~results could~~should ~~differ~~contribute ~~materially~~to ~~from~~gains ~~those~~in ~~contemplated~~beef byproduction ~~these~~compared ~~forward-looking statements~~to asthe aprior ~~result~~year. Beyond ofthe ~~many~~first ~~factors,~~calendar ~~including~~quarter ~~economic~~of ~~conditions~~2011, ~~generally and~~we inexpect ~~our~~fed ~~principal~~cattle ~~markets;~~supplies ~~the~~to ~~availability~~tighten ~~and~~following ~~prices~~placement of ~~live~~ cattle~~, natural~~ ~~resources~~with ~~and~~more ~~commodities;~~diverse ~~food~~placement ~~safety;~~weights ~~livestock~~and ~~disease, including~~ the ~~identification~~continuing ofcalf ~~cattle~~crop ~~with~~decline. Larger ~~Bovine~~cow ~~Spongiform~~and ~~Encephalopathy~~bull ~~(BSE); competitive~~slaughter ~~practices~~during ~~and~~2010 ~~consolidation~~continues into ~~the~~imply ~~cattle~~herd ~~production~~liquidation and ~~processing industries;~~the ~~actions~~trend of ~~domestic~~smaller orcattle ~~foreign~~supplies ~~governments;~~into ~~hedging~~the ~~risk;~~coming ~~changes in~~years. While ~~interest~~the ~~rates~~cattle ~~and~~supply ~~foreign~~may ~~currency~~appear ~~exchange~~negative ~~rates;~~to ~~consumer~~our operation, recent beef demand, ~~and preferences;~~supported ~~the~~by ~~cost~~beef export tonnage near that of ~~compliance~~pre-BSE ~~with~~(2003) ~~environmental~~levels and ~~health~~encouraging ~~laws;~~domestic ~~loss~~economic ~~of key~~conditions, ~~customers;~~appears ~~loss~~positive. Absent ofsignificant ~~key~~deterioration ~~employees;~~in ~~labor~~domestic ~~relations;~~and global economic conditions, we expect cattle and ~~consolidation~~beef ~~among our~~prices ~~customers~~to remain strong throughout 2011.

~~In light~~Beef ofExport 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. See also the Risk Factors in Item 1A. of our Annual Report for the year ended August 29, 2009 on Form 10-K filed with the Securities and Exchange Commission for other important factors that could cause actual results to differ materially from those in any such forward-looking statements, and which should be read in conjunction with this report.Markets

~~Industry Outlook~~Export markets for U.S. beef products remain constrained since the discovery of a single case of BSE in the State of Washington in December 2003, as well as other isolated cases. In July 2006, Japan agreed to reopen its market to U.S. beef from cattle aged 20 months and younger. South Korea announced a provisional opening of its border to U.S. beef from animals 30 months and younger in September 2006 but subsequently closed its border again in October 2007. South Korea reopened its border and started inspecting U.S. beef near the end of June 2008. These constraints and uncertainties have historically had a negative impact on beef demand during the periods in which they occurred.

Year-to-year increases in placement of cattle on feed during the spring quarter will provide adequate fed cattle supplies going into the fall quarter. However, industry herd liquidation persists and from a macro perspective keeps longer term cattle supplies in a downward trend. The lack of expansion in pork output and very modest growth in poultry will keep per capita protein supplies in check and provide underlying support to cattle and beef prices. General economic conditions remain tenuous and will continue to dominate market potential over the coming months. Global trade prospects remain positive on similar global supply issues as well as the potential for stronger economic performance.11

~~Recent~~Table ~~Developments~~of Contents

~~On June 22,~~We ~~2010,~~cannot ~~the~~presently ~~Grain~~assess ~~Inspection~~the ~~and~~full ~~Packers~~economic ~~and~~impact ~~Stockyards Administration~~of ~~published~~the aconsequences ~~proposed~~of ~~rule adding~~BSE ~~new~~on ~~regulations under~~ the ~~Packers~~ ~~and Stockyards Act~~U. IfS. ~~adopted, the~~beef ~~new~~packing ~~regulations~~industry ~~could~~or ~~have a significant impact~~ on ~~marketing~~our ~~and procurement~~operations. Existing ~~practices~~or innew ~~the~~import ~~beef~~restrictions ~~processing~~or ~~industry~~additional ~~and~~regulatory ~~could~~restrictions ~~affect~~or ~~how~~disruptions ~~we procure~~in ~~cattle~~domestic ~~for our value-added programs~~ and ~~how~~foreign weconsumer ~~process~~demand ~~and~~for ~~market value-added~~ beef ~~products.~~may Wehave ~~cannot~~a ~~presently~~material ~~assess~~adverse ~~the~~effect ~~full economic impact of the proposed rule~~ on ~~the~~our ~~beef~~revenues ~~processing~~and ~~industry~~net ~~or on our operations~~income.

~~Beef Export~~In ~~Markets~~December 2010, the United States Department of Agriculture, or USDA, announced that China has agreed to resume talks with the United States regarding beef market access and that technical talks will resume with the goal of re-opening China’s market for U.S. beef under the age of 30 months in early 2011. We cannot presently assess the full economic impact of the re-opening of China’s market to age verified beef on the U.S. beef packing industry or our operations and there can be no assurance that such talks will occur or result in re-opening of China’s market to U.S. beef products.

~~Export markets~~Recent for U.S. beef products remain constrained since the discovery of a case of BSE in the State of Washington in December 2003, as well as other isolated cases. In July 2006, Japan agreed to reopen its market to U.S. beef from cattle aged 20 months and younger. South Korea announced a provisional opening of its border to U.S. beef from animals 30 months and younger in September 2006,Events

11On June 22, 2010, the Grain Inspection and Packers and Stockyards Administration published a proposed rule adding new regulations under the Packers and Stockyards Act. If adopted as currently proposed, the new regulations could have a significant impact on marketing and procurement practices in the beef processing industry and could affect how we procure cattle for our value-added programs and how we process and market value-added beef products. We cannot presently assess the full economic impact of the proposed rule on the beef processing industry or on our operations.

~~Table~~Results of ~~Contents~~ Operations

~~however, its~~Thirteen ~~border~~weeks ~~was~~ended ~~subsequently~~November ~~closed~~27, in2010 ~~October 2007. South~~compared ~~Korea~~to ~~reopened~~thirteen ~~its~~weeks ~~border~~ended ~~and~~November ~~started inspecting~~28, ~~U.S. beef near the end of June 2008. These constraints and uncertainties have had a negative impact on beef export demand.~~2009

~~We cannot~~General. Net ~~presently~~income ~~assess~~for the ~~full~~thirteen ~~economic~~weeks ~~impact~~ended ofNovember ~~the~~27, ~~consequences~~2010 was approximately $54.5 million compared to net income of ~~BSE~~approximately on $41.3 million for the Uthirteen weeks ended November 28, 2009, an increase of $13.S2 million. Sales ~~beef~~were ~~packing~~higher ~~industry~~in orthe onthirteen ~~our~~weeks ~~operations. Existing~~ended orNovember ~~new import~~27, ~~restrictions~~2010 orcompared ~~additional~~to ~~regulatory~~the ~~restrictions~~thirteen orweeks ~~disruptions~~ended ~~in domestic~~November ~~and~~28, ~~foreign~~2009 ~~consumer~~due ~~demand~~in ~~for~~part ~~beef~~to ~~could~~an ~~have~~approximate a4.0% ~~material~~increase ~~adverse affect~~in onthe ~~our~~volume ~~revenues~~of cattle processed and ~~net~~increase ~~income~~in the average sales price per head of approximately14.3% during the current reporting period.

~~Results~~Total costs and expenses of ~~Operations~~$1,530.5 million for the thirteen weeks ended November 27, 2010 were 96.4% of sales compared to approximately $1,296.4 million for the thirteen weeks ended November 28, 2009, or 96.6% of sales. An increase in the volume of cattle processed, and a decrease in total costs as a percentage of sales resulted in increased operating income of approximately $10.6 million for the thirteen weeks ended November 27, 2010 compared to the thirteen weeks ended November 28, 2009.

~~Thirteen~~Net Sales. Net sales were $1,587.3 million for the thirteen weeks ended ~~May 29~~November 27, 2010 compared to $1,342.6 million for the thirteen weeks ended ~~May 30~~November 28, 2009, an increase of $244.7 million or 18.2%. The increase in net sales primarily resulted from an approximately 14.3% increase in the average sales price per head during the thirteen weeks ended November 27, 2010 as the demand for beef products was stronger as compared to the thirteen weeks ended November 28, 2009. Also contributing to the increase in net sales was an approximately 4.0% increase in the volume of cattle processed.

~~General~~Cost of Sales. ~~Net~~ Cost ~~income~~of sales was $1,505.4 million for the thirteen weeks ended ~~May 29~~November 27, 2010 ~~was approximately $79.2 million~~ compared to ~~approximately~~ $461,273.53 million for the thirteen weeks ended ~~May 30~~November 28, 2009, an increase of ~~approximately~~ $32232.71 million or 18. ~~Sales~~2%. The ~~were~~increase ~~higher~~was inprimarily ~~the thirteen~~a ~~weeks~~result ~~ended~~of ~~May 29,~~an ~~2010~~approximate ~~compared~~15.3% toincrease ~~the~~in ~~thirteen~~cattle ~~weeks~~prices ~~ended~~for ~~May 30, 2009~~the ~~due~~comparable inperiods. Also ~~part~~contributing to anthe ~~approximate~~increase ~~3.1%~~was an increase in the ~~average~~ volume of cattle processed ~~per~~of ~~week~~approximately ~~and~~4.0% ~~increase~~during in the ~~average~~13 ~~sales~~weeks ~~prices~~ended ~~per~~November ~~head~~27, ~~of approximately~~2010 ~~14.8%~~compared ~~during~~to ~~this~~the ~~reporting~~thirteen ~~period~~weeks ended November 28, 2009.

~~Total~~Selling, ~~costs~~General and Administrative Expenses. Selling, general and administrative expenses ~~of approximately~~were $~~1,455~~12.19 million for the thirteen weeks ended ~~May 29~~November 27, 2010 ~~were~~ ~~94.6% as a percent of sales~~ compared to ~~approximately~~ $~~1,264~~11.82 million for the thirteen weeks ended ~~May 30~~November 28, 2009, oran ~~96.0% as a percent of sales. An~~ increase ~~in the volume~~ of ~~cattle~~approximately ~~processed and~~$1.7 ~~cost~~million ofor ~~live~~15.2%. The ~~cattle,~~increase ~~and~~primarily areflects ~~decrease~~an inincrease ~~total costs as a percentage~~ of ~~sales resulted in increased operating income of~~ approximately $290.5 million ~~for~~in ~~the thirteen~~both ~~week~~consulting ~~period~~and ofsalaries ~~fiscal~~expense ~~2010~~for ~~as compared to~~ the ~~thirteen week~~ period ~~of fiscal 2009~~.

Net Sales. Net sales were approximately $1,537.9 million for the thirteen weeks ended May 29, 2010 compared to approximately $1,318.0 million for the thirteen weeks ended May 30, 2009, an increase of approximately $219.9 million, or 16.7%. The increase in net sales resulted from an approximate 3.1% increase in the average volume of cattle processed per week. Also contributing to the increase in sales was an increase in average sales prices per head of about 14.8% during the thirteen week period ended May 29, 2010 compared to the similar thirteen week period of fiscal 2009. .12

~~Cost~~Table of Sales. Cost of sales was approximately $1,429.4 million for the thirteen weeks ended May 29, 2010 compared to approximately $1,242.3 million for the thirteen weeks ended May 30, 2009, an increase of approximately $187.1 million, or 15.1%. The increase resulted primarily from an approximate 3.1% increase in the number of cattle processed, and an increase in live cattle prices of approximately 14.2%. Partially offsetting these increases was a decrease in the average cattle weights of approximately 1.2% during the thirteen week period of fiscal 2010 as compared to the thirteen week period of fiscal 2009.Contents

~~Selling,~~Depreciation ~~General~~ and ~~Administrative Expenses~~Amortization Expense. ~~Selling, general~~ Depreciation and ~~administrative~~amortization expenses were ~~approximately~~ $1312.2 million for the thirteen weeks ended ~~May 29~~November 27, 2010 compared to ~~approximately~~ $1011.9 million for the thirteen weeks ended ~~May 30~~November 28, 2009, an increase of ~~approximately~~ $20.3 million, or 212.15%. The ~~increase~~slight ~~reflects an~~ increase in ~~bad~~depreciation ~~debt~~ expense ofwas ~~approximately~~primarily ~~$1.4~~related ~~million,~~to ~~advertising~~fixed ~~and promotion~~assets ~~expense~~being ofplaced ~~approximately~~into ~~$0.4~~service ~~million,~~during ~~and~~fiscal anyear ~~increase in salaries of approximately $0~~2011.~~3 million.~~

~~Depreciation~~Operating ~~and Amortization Expense~~Income. ~~Depreciation~~ Operating ~~and~~income ~~amortization expenses~~was ~~were~~ approximately $1256.58 million for the thirteen weeks ended ~~May 29~~November 27, 2010 compared to operating income of approximately $1146.62 million for the thirteen weeks ended ~~May 30~~November 28, 2009, an increase of ~~approximately~~ $010.96 million, or 722.89%. ~~Depreciation~~ ~~expense~~The ~~increased~~improvement ~~due~~in tooperating ~~assets being~~income ~~placed~~during ~~into~~the ~~service,~~first quarter of fiscal 2010 resulted primarily atfrom ~~our~~an ~~three~~increase ~~beef~~in ~~plants~~the sales per head of approximately 14.3% and ~~two~~increase ~~case ready~~in ~~plants,~~the volume of cattle processed of approximately 4.0% during ~~fiscal~~the ~~year~~thirteen weeks ended November 27, 2010. These increases were offset by an increase in average live cattle prices of approximately 15.3% during the period.

12Interest Expense. Interest expense was $2.6 million for the thirteen weeks ended November 27, 2010 compared to $4.5 million for the thirteen weeks ended November 28, 2009, a decrease of $1.9 million or 42.2%. The decrease in interest expense during the thirteen weeks ended November 27, 2010 as compared to the thirteen weeks ended November 28, 2009 was due primarily to a decrease in the average borrowings during the period of approximately12.3%, and a decrease of approximately 226 basis points on the average daily interest rate during each of the respective reporting periods. These decreases are primarily due to the purchase and cancellation of the remaining approximately $66.9 million of our Senior Notes. Portions of these notes were outstanding during the thirteen weeks ended November 28, 2009, but were retired and cancelled in their entirety prior to the beginning of the thirteen weeks ending November 27, 2010.

~~Table~~ Income Tax Expense. Income tax expense was $0.3 million and $0.4 million for the thirteen weeks ended November 27, 2010 and November 28, 2009, respectively. Income tax expense is recorded on taxable income from National Carriers, which is organized as a C Corporation, and the apportioned taxable income of ~~Contents~~NBP by certain states which impose privilege taxes.

~~Operating~~Net Income. ~~Operating~~ As ~~income~~a ~~was~~result ~~approximately~~of ~~$82.8 million for~~ the ~~thirteen~~factors ~~weeks~~described ~~ended May 29~~above, ~~2010~~net ~~compared~~income ~~to approximately $53.3 million~~ for the thirteen-week ~~weeks~~period ended ~~May 30,~~November ~~2009~~27, ~~an increase~~2010 ofwas approximately $2954.5 million~~. The~~ ~~increase~~compared into ~~operating~~net income of approximately $41.3 million for the thirteen -week period ~~ending~~ended ~~May 29~~November 28, ~~2010~~ 2009, ~~resulted~~an ~~primarily~~increase ~~from a decrease in the percentage~~ of ~~costs as a percentage of sales of~~ approximately 1$13.~~4%,~~2 ~~driven~~million byor ~~improved demand characteristics for beef products, as compared to the thirteen week period ended May 30, 2009~~32.0%.

~~Interest~~Segment Expense. Interest expense was approximately $3.5 million for the thirteen weeks ended May 29, 2010 compared to approximately $5.8 million for the thirteen weeks ended May 30, 2009, a decrease of approximately $2.3 million, or 39.7%. The decrease in interest expense during the thirteen weeks ended May 29, 2010 as compared to the thirteen week period ended May 30, 2009 was due primarily to the purchase and cancellation of the remaining $66.9 million of our Senior Notes during the 2nd quarter of fiscal 2010 resulting in a decrease of approximately $3.0 million in interest expense compared to the thirteen week period ended May 30, 2009.Results

~~Other,~~The ~~net. Other,~~Company’s ~~net non-~~operating ~~income~~ ~~was~~segments ~~approximately~~are ~~$0.2~~based ~~million~~on ~~for~~segment ~~the~~profit ~~thirteen~~and ~~weeks~~evaluated ~~ended~~by ~~May 29, 2010~~the ~~compared~~Chief toExecutive ~~other~~Officer, ~~net~~who ~~non-operating~~also ~~expense~~serves ofas ~~approximately~~the $0Chief Operating Decision Maker.6 Segment ~~million for~~profit ~~the~~is ~~thirteen~~measured ~~weeks~~as ~~ended~~operating ~~May 30~~income for NBP’s two reporting segments, ~~2009~~Core Beef and Other, anbased ~~increase~~on ofthe ~~approximately $0.8~~definitions ~~million~~provided in ASC 280, Segment Reporting.

~~Thirty-nine~~Core ~~weeks~~Beef—the ~~ended~~majority ~~May 29~~of NBP’s revenues are generated from the sale of fresh meat, ~~2010~~ ~~compared~~which toinclude ~~thirty~~chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef, and other products. In addition, we sell beef by-~~nine~~products ~~weeks~~including ~~ended~~hides ~~May 30~~to the variety meat, ~~2009~~feed processing, fertilizer, pet food and leather tanning industries. Aggregation criteria were applied to determine the constituents of the Core Beef segment.

~~General. Net income for~~ Other—the ~~thirty-nine~~Other ~~weeks~~segment ~~ended~~of ~~May 29, 2010~~NBP ~~was~~consists ~~approximately $169.8 million compared to net income~~ of ~~approximately $74.2 million for~~ the ~~thirty-nine~~operations ~~weeks ended May 30, 2009, an increase~~ of ~~approximately~~ ~~$95.6~~National ~~million. Sales were 4.4% higher in the thirty-nine week period ended May 29~~Carriers, ~~2010~~National ~~compared to the thirty-nine week period ended May 30~~Elite, ~~2009~~a ~~primarily~~provider ~~due in part to an approximate 1.1% increase in the number~~ of ~~cattle~~transportation ~~processed~~logistics services, and aKansas ~~4.6% increase~~City ~~in the average sales price per head~~Steak.

~~Total~~Eliminations—this ~~costs~~line ~~and~~item ~~expenses~~includes ~~of approximately~~eliminations ~~$4,035.9 million for the thirty-nine weeks ended May 29, 2010 were 95.6% as a percent~~ of ~~sales compared to approximately $3,947.5 million for the thirty~~inter-~~nine~~segment ~~weeks ended May 30, 2009, or 97.6% as a percent of sales. An increase in the volume of cattle processed~~ and ~~cost~~intra-segment ofactivity ~~live~~resulting ~~cattle~~from ~~and a decrease in total costs as a percentage of sales resulted in increased operating income of approximately $87.8 million for~~ the ~~thirty~~consolidation ~~nine weeks ended May 29, 2010 compared to the same thirty nine week period of fiscal 2009~~process.

Net Sales. Net sales were approximately $4,221.4 million for the thirty-nine weeks ended May 29, 2010 compared to approximately $4,045.2 million for the thirty-nine weeks ended May 30, 2009, an increase of approximately $176.2 million, or 4.4%. Net sales increased primarily due to an approximate 1.1% increase in the number of cattle processed, and a 4.6% increase in the average sales price per head, during the thirty-nine weeks ended May 29, 2010 as compared to the thirty-nine weeks ended May 30, 2009.13

~~Cost~~Table of Sales. Cost of sales was approximately $3,962.6 million for the thirty-nine weeks ended May 29, 2010 compared to approximately $3,882.6 million for the thirty-nine weeks ended May 30, 2009, an increase of approximately $80.0 million, or 2.1%. The increase in cost of sales for the thirty-nine weeks ended May 29, 2010 resulted primarily from an approximate 1.1% increase in the number of cattle processed, and an increase of approximately 0.9% in live cattle prices as compared to the thirty-nine week period of fiscal 2009.Contents

~~Selling,~~The ~~General~~following ~~and Administrative~~table ~~Expenses. Selling,~~represents ~~general~~segment ~~and~~results ~~administrative expenses were approximately $36.5 million~~ for the ~~thirty-nine~~periods ~~weeks~~indicated ~~ended~~(amounts May 29, 2010 compared to approximately $32.1 million for the thirty-nine weeks ended May 30, 2009, an increase of approximately $4.4 million, or 13.7%. The increase for this period is primarily due to an increase in bad debt expense of approximately $1.6 million, increase in marketing of approximately $1.1 million, increase in travel for the period of approximately $0.9 million, and increased consulting expenses of approximately $0.8 million.thousands):

	13 weeks ended			13 weeks ended
	November 27, 2010			November 28, 2009
Net sales:
Core beef	$	1,620,788		$	1,363,131
Other		53,646			54,920
Eliminations		(87,114	)		(75,441	)
Total net sales	$	1,587,320		$	1,342,610

Operating income:
Core beef	$	56,432		$	44,729
Other		349			1,432
Total operating income		56,781			46,161

Interest income		7			29
Interest expense		(2,598	)		(4,532	)
Other income, net		596			7
Total income before taxes	$	54,786		$	41,665

	November 27, 2010			November 28, 2009
Assets:
Core beef	$	899,616		$	766,041
Other		46,885			45,027
Eliminations		(1,890	)		(904	)
Total assets	$	944,611		$	810,164

~~Table of~~Thirteen ~~Contents~~weeks ended November 27, 2010 compared to thirteen weeks ended November 28, 2009

~~Depreciation~~Core and Amortization Expense. Depreciation and amortization expenses were approximately $36.8 million for the thirty-nine weeks ended May 29, 2010 compared to approximately $32.8 million for the thirty-nine weeks ended May 30, 2009, an increase of approximately $4.0 million, or 12.2%. Depreciation expense increased due to assets being placed into service, primarily at our three beef plants and two case ready plants, during fiscal year 2010.Beef

~~Operating~~Net ~~Income~~Sales. ~~Operating~~ Net ~~income~~sales ~~was~~for ~~approximately~~Core Beef were $~~185~~1,620.6 8 million for the ~~thirty-nine~~thirteen weeks ended ~~May 29~~November 27, 2010 compared to ~~approximately~~ $971,363.71 million for the ~~thirty-nine~~thirteen weeks ended ~~May 30~~November 28, 2009, an increase of ~~approximately~~ $87257.97 million or 18. 9%. The increase in ~~operating~~net ~~income~~sales ~~for~~primarily ~~the~~resulted ~~thirty-nine~~from ~~week~~an ~~period~~approximately14.3% ~~ended~~increase ~~May 29, 2010,~~in ~~resulted~~the ~~primarily~~average ~~from~~sales aprice ~~decrease~~per inhead during the ~~percentage~~thirteen ofweeks ~~costs~~ended November 27, 2010 as athe ~~percentage of~~demand ~~sales~~for ofbeef ~~approximately~~products ~~2.0%,~~was stronger as compared to the ~~thirty-nine~~thirteen ~~week~~weeks ~~period~~ ended ~~May 30~~November 28, 2009. Also contributing to the increase in net sales was an approximately 4.0% increase in the volume of cattle processed.

~~Interest~~Operating ~~Expense~~Income. ~~Interest~~ Operating ~~expense~~income for Core Beef was approximately $1156.6 4 million ~~for~~during the ~~thirty-nine~~thirteen weeks ended ~~May 29~~November 27, 2010 compared to operating income of approximately $1844.27 million ~~for~~during the ~~thirty-nine~~thirteen weeks ended ~~May 30~~November 28, 2009, a ~~decrease~~an improvement of approximately $611.67 million~~, or 36~~.~~3%.~~ The ~~decrease~~improvement in ~~interest~~operating ~~expense~~income during the ~~thirty-nine~~ ~~weeks~~first ~~ended~~quarter ~~May 30,~~of ~~2009~~fiscal as2010 ~~compared~~resulted toprimarily ~~the~~from ~~thirty-nine~~an ~~week period~~increase ~~ended~~in ~~May 30,~~the ~~2009~~sales ~~was~~per ~~due~~head ~~primarily~~of toapproximately ~~the~~14.3% ~~purchase~~ and ~~cancellation~~ ofincrease in the ~~remaining~~volume ~~$66.9~~of ~~million~~cattle processed of ~~our~~approximately ~~Senior~~4.0% ~~Notes~~ during the ~~2nd quarter~~thirteen ofweeks ~~fiscal~~ended ~~2010~~November ~~resulting~~27, in2010. These aincreases ~~decrease of~~were ~~approximately~~offset ~~$7.6~~by ~~million~~an increase in ~~interest~~average ~~expense~~live ~~compared~~cattle toprices ~~the~~of ~~thirty-nine week~~approximately ~~period~~15.3% ~~ended~~during ~~May 30,~~the ~~2009~~period.

Other, net. Other, net non-operating expense was approximately $3.6 million for the thirty-nine weeks ended May 29, 2010 compared to other, net non-operating expense of approximately $4.5 million for the thirty-nine weeks ended May 30, 2009, a decrease of approximately $0.9 million.

~~Income~~Net ~~Tax Expense~~Sales. ~~Income~~ Net ~~tax~~sales ~~expense~~for ~~was~~Other were approximately $053.7 6 million for the ~~thirty-nine~~thirteen weeks ended ~~May 29~~November 27, 2010 compared to approximately $054.9 million for the ~~thirty-nine~~thirteen weeks ended ~~May 30~~November 28, 2009, a decrease of approximately $01.23 million, or ~~22.~~2.4%. ~~This~~ The decrease in ~~income~~net ~~taxes~~sales for ~~the~~other ~~period of~~was ~~approximately~~primarily ~~$0.2~~due ~~million~~to ~~was~~reduced ~~related~~revenues toat both our ~~subsidiary,~~transportation ~~National Carriers. Income~~company ~~tax~~and ~~expense~~portion iscontrol ~~recorded on~~facility ~~income~~during ~~from~~the ~~National~~thirteen ~~Carriers,~~weeks ~~which~~ended isNovember ~~organized~~27, 2010 as acompared Cto ~~Corporation~~the thirteen weeks ended November 28, 2009.

~~Segment Results~~14

~~The Company’s~~Table operating segments are based on segment profit and evaluated by the Chief Executive Officer, who also serves as the Chief Operating Decision Maker (CODM). Segment profit is measured as operating income for NBP’s two reporting segments, Core Beef and Other, based on the definitions provided in ASC 280, Disclosures about Segments of ~~an Enterprise and Related Information.~~Contents

~~Core~~Operating ~~Beef—the~~Income. Operating ~~majority~~income offor ~~NBP’s~~Other ~~revenues~~was ~~are~~approximately ~~generated~~$0.3 ~~from~~ million for the ~~sale~~thirteen ofweeks ~~fresh~~ended ~~meat~~November 27, ~~which~~2010 ~~include~~compared ~~chuck~~to ~~cuts,~~approximately ~~rib~~$1.4 ~~cuts,~~million ~~loin~~for ~~cuts,~~the ~~round cuts,~~thirteen ~~thin~~weeks ~~meats,~~ended ~~ground~~November ~~beef~~28, ~~and~~2009, ~~other~~a ~~products.~~decrease Inof ~~addition,~~approximately we$1.1 ~~also~~million. This ~~sell beef~~decrease ~~by-products~~was due primarily to ~~the~~a ~~variety~~reduction ~~meat,~~of ~~feed~~operating ~~processing,~~income ~~fertilizer~~at both our transportation company and ~~pet~~portion ~~food industries. Aggregation~~control ~~criteria~~facility ~~were applied~~due to ~~determine~~lower ~~the~~sales ~~constituents~~at ofboth ~~the~~locations ~~Core~~and ~~Beef~~higher ~~segment~~depreciation expense at our transportation company.

~~Other—the~~Liquidity ~~Other segment of NBP consists of the operations of National Carriers, Inc., a refrigerated~~ and ~~livestock~~Capital ~~contract carrier company, National Elite Transportation, LLC, a provider of transportation logistics services, and Kansas City Steak Company, LLC, a portion control steak cutting operation.~~Resources

~~Eliminations—this~~As ~~line~~of ~~item~~November ~~includes~~27, ~~eliminations~~2010, we had net working capital of ~~inter-segment~~ approximately $90.0 million, which included $171.1 million in distributions payable, and ~~intra-segment~~cash ~~activity~~and ~~resulting~~cash equivalents of $26.2 million. As of August 28, 2010, we had net working capital of approximately $180.2 million, which included cash and cash equivalents of $20.4 million, with $27.4 million in distributions payable. Our primary sources of liquidity are cash flow from ~~the~~operations ~~consolidation process~~and available borrowings under our amended and restated credit facility, or Credit Facility.

14As of November 27, 2010, we had $279.2 million of long-term debt, $21.4 million of which was classified as a current liability. As of November 27, 2010, our Credit Facility originally consisted of a $375.0 million term loan, of which $195.0 million was outstanding and a $250.0 million revolving line of credit loan, which had outstanding borrowings of $65.0 million, outstanding letters of credit of $24.1 million and available borrowings of $159.6 million, based on the most restrictive financial covenant calculations. Cash flows from operations and borrowings under our Credit Facility have funded our working capital requirements, acquisitions, capital expenditures and other general corporate purposes. We were in compliance with all of our financial covenants under our Credit Facility as of November 27, 2010.

~~Table~~In addition to outstanding borrowings under our Credit Facility, we had outstanding borrowings under industrial revenue bonds of ~~Contents~~$12.2 million and capital lease and other obligations of $7.0 million as of November 27, 2010.

~~The~~We ~~following~~believe ~~table represents~~that ~~segment~~available ~~results~~borrowings under our Credit Facility and cash provided by operating activities will be sufficient to support our working capital, capital expenditures and debt service requirements for the ~~periods~~foreseeable ~~indicated~~future. Our (ability to generate sufficient cash, however, is subject to certain general economic, financial, industry, legislative, regulatory and other factors beyond our control. For a review of our obligations that affect liquidity, please see the “Cash Payment Obligations” table in ~~thousands):~~“Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended August 28, 2010.

	13 weeks ended			13 weeks ended			39 weeks ended			39 weeks ended
	May 29, 2010			May 30, 2009			May 29, 2010			May 30, 2009
Net sales:
Core beef	$	1,575,926		$	1,331,722		$	4,306,246		$	4,070,295
Other	53,954			61,387			173,962			180,857
Eliminations	(92,001		)	(75,089		)	(258,793		)	(205,937		)
Total net sales	$	1,537,879		$	1,318,020		$	4,221,415		$	4,045,215
Operating income:
Core beef	$	82,252		$	51,865		$	181,911		$	92,370
Other	525			1,395			3,652			5,317
Total operating income	82,777			53,260			185,563			97,687
Interest income	4			40			39			145
Interest expense	(3,513		)	(5,816		)	(11,563		)	(18,191		)
Other (expense) / income, net	217			(625		)	(3,559		)	(4,509		)
Total income before taxes	$	79,485		$	46,859		$	170,480		$	75,132
	May 29, 2010			May 30, 2009
Assets:
Core beef	$	836,339		$	784,636
Other	44,155			42,668
Eliminations	(208		)	(516		)
Total assets	$	880,286		$	826,788

Operating Activities

~~Thirteen~~Net cash provided through operating activities in the thirteen weeks ended ~~May 29~~November 27, 2010 was $20.0 million compared to net cash provided through operating activities of $28.3 million in the thirteen weeks ended ~~May 30~~November 28, 2009. The $8.3 million decrease in operating activities was primarily related to a decrease in working capital changes during the period, primarily related to an increase in cash paid in fiscal year 2011 for bonuses earned in fiscal year 2010 and an increase in cash collateral posted on derivatives liabilities. These decreases are partially offset by an increase in net income of approximately $13.2 million during the thirteen weeks ended November 27, 2010 as compared to the thirteen weeks ended November 28, 2009.

~~Core~~Investing ~~Beef~~Activities

Net ~~Sales. Net~~cash ~~sales~~used ~~for~~in ~~Core~~investing ~~Beef~~activities ~~were~~was ~~approximately~~ $~~1,575~~12.96 million ~~for~~in the thirteen weeks ended ~~May 29~~November 27, 2010 compared to ~~approximately~~ $~~1,331~~9.70 million ~~for~~in the thirteen weeks ended ~~May 30,~~November ~~2009~~28, an ~~increase of approximately $244~~2009.2 This ~~million, or 18.3%. The~~ increase in ~~net~~cash ~~sales~~used ~~resulted~~was ~~from~~primarily attributable to an approximate $3.1%9 million increase in ~~the~~expenditures ~~average~~for ~~volume~~property, ofplant ~~cattle processed per week,~~ and anequipment ~~increase in average sales per head of approximately 14.8%~~ during the ~~current~~ thirteen ~~week~~weeks ~~period~~ended ofNovember ~~fiscal~~27, 2010 as compared to the thirteen ~~week period~~weeks ofended ~~fiscal~~November 28, 2009.

Operating Income. Operating income for Core Beef was approximately $82.3 million for the thirteen weeks ended May 29, 2010 compared to approximately $51.9 million for the thirteen weeks ended May 30, 2009, an increase of approximately $30.4 million. The increase in operating income resulted primarily from improved demand characteristics for beef products during the thirteen week period ended May 29, 2010, as compared to the thirteen week period ended May 30, 2009.15

~~Other~~Table of Contents

~~Net~~Financing Sales. Net sales for Other were approximately $54.0 million for the thirteen weeks ended May 29, 2010 compared to approximately $61.4 million for the thirteen weeks ended May 30, 2009, a decrease of approximately $7.4 million, or 12.1%. The decrease was attributable to lower sales volume within both the transportation operations as well as the portion control business.Activities

15Net cash used in financing activities was $1.6 million during the thirteen weeks ended November 27, 2010 compared to net cash used in financing activities of $22.9 million during the thirteen weeks ended November 28, 2009. The change was primarily attributed to an approximately $67.2 increase in net receipts under our revolving credit lines during the thirteen weeks ended November 27, 2010 compared to the thirteen weeks ended November 28, 2009, and the purchase and cancellation of approximately $39.8 million of our Senior Notes during the thirteen weeks ended November 28, 2009. These increases in cash provided by financing activities was partially offset by an approximate $75.0 million in borrowings under our term note payable during the thirteen weeks ended November 28, 2009 and an approximate $13.6 million change in the overdraft balances during the period.

~~Table of~~Amended ~~Contents~~and Restated Senior Credit Facility

~~Operating~~Effective ~~Income. Operating~~as ~~income~~of ~~for~~June ~~Other~~4, 2010, the Credit Facility was ~~approximately $0.5~~amended ~~million~~and ~~for~~restated to: (1) increase the ~~thirteen~~borrowings ~~weeks~~under ~~ended~~the ~~May 29,~~Credit ~~2010~~Facility ~~compared~~by providing for a term loan facility of up to ~~operating~~ ~~income~~$375 million and a revolving line of ~~approximately~~credit of up to $~~1.4~~250 million; ~~for~~(2) reduce the ~~thirteen~~applicable ~~weeks~~margin ~~ended~~on ~~May 30, 2009,~~the arates ~~decrease~~of interest of ~~approximately~~the ~~$0.9~~term ~~million. The~~loan ~~decrease~~and ~~was~~revolving ~~due~~line ~~primarily~~of tocredit; a(3) ~~reduction~~revise the payment schedule of the term loan; (4) extend the maturity date of the Credit Facility to June 4, 2015; (5) remove limitations on capital expenditures; (6) add new financial covenants regarding adjusted net ~~sales~~worth ~~within~~and ~~our transportation~~a ~~operations~~fixed charge coverage ratio; and ~~portion~~(7) ~~controlled~~add ~~business~~two wholly owned subsidiaries, ~~along~~National ~~with~~Beef ~~an increase~~California, inLP ~~depreciation~~and ~~expense~~National ~~within~~Carriers, ~~our~~Inc., ~~portion~~as ~~controlled~~loan ~~business~~parties and guarantors. The lender financing charges for the amended and restated Credit Facility of approximately $4.2 million are being amortized over the life of the loan.

~~Thirty-nine~~The ~~weeks~~borrowings ~~ended~~under ~~May 29~~the Credit Facility bear interest at LIBOR or the Base Rate, ~~2010~~ ~~compared~~plus the applicable margin. The applicable margin for the revolving line of credit and the term loan will be as set forth on a grid based on different ratios of funded debt to ~~thirty-nine~~EBITDA. ~~weeks~~As ~~ended~~of ~~May 30~~November 27, ~~2009~~2010, the interest rates for the term loan and revolving loan were approximately 2.76% and 3.53%, respectively.

~~Core~~The ~~Beef~~borrowings under the revolving loan are available for our working capital requirements, capital expenditures and other general corporate purposes. The advance rates under the borrowing base are 90% on eligible accounts and 70% on eligible inventory. The Credit Facility is secured by a first priority lien on substantially all of our assets and the assets of our subsidiaries.

~~Net~~The ~~Sales. Net~~principal ~~sales~~amount ~~for~~outstanding ~~Core~~under ~~Beef~~the ~~were~~term ~~approximately $4,306.2~~loan ~~million~~is ~~for~~due ~~the~~and ~~thirty-nine~~payable ~~weeks~~in ~~ended~~equal ~~May 29,~~quarterly ~~2010~~installments ~~compared~~beginning ~~to approximately~~in $4October 2010,~~070.3~~ ~~million~~based ~~for~~on ~~the~~a ~~thirty~~10-~~nine~~year ~~weeks~~level ~~ended~~amortization ~~May 30, 2009, an increase~~ of ~~approximately $235.9 million, or 5.8%. Net sales increased primarily due to an approximate 1.1% decrease in~~ the ~~average~~remaining ~~volume~~amount of ~~cattle~~the ~~processed~~term ~~per~~loan. ~~week, along~~All ~~with~~outstanding anloan ~~increase~~amounts inare ~~the~~due ~~average~~and ~~sales~~payable ~~per~~on ~~head~~June ~~of approximately~~ 4~~.6%~~, ~~during~~ ~~the~~2015. ~~first~~Prepayment ~~thirty-nine weeks~~ of ~~fiscal 2010 as compared to~~ the ~~first thirty-nine~~loans ~~weeks~~is ofallowed ~~fiscal~~at ~~2009~~any time.

~~Operating~~The ~~Income. Operating~~Credit ~~income~~Facility ~~for~~contains ~~Core~~customary ~~Beef~~affirmative ~~was approximately~~covenants ~~$181.9~~relating ~~million~~to ~~for~~NBP ~~the~~LLC ~~thirty-nine~~and ~~weeks~~its ~~ended~~subsidiaries, ~~May 29~~including, ~~2010 compared~~without tolimitation, ~~approximately~~conduct ~~$92.4~~of ~~million~~business, ~~for~~maintenance ~~the~~of ~~thirty-nine~~insurance, ~~weeks~~compliance ~~ended~~with ~~May 30~~laws, ~~2009~~ maintenance of properties, ankeeping ~~increase~~of books and records, and the furnishing of ~~approximately~~financial ~~$89~~statements.5 ~~million.~~ The ~~improvement~~facility inalso ~~operating~~contains ~~income~~customary ~~during the~~negative ~~thirty-nine~~covenants ~~week~~relating ~~period~~to ~~ended~~NBP ~~May 29~~LLC and its subsidiaries, ~~2010~~including, ~~resulted~~without ~~primarily~~limitation, ~~from~~restrictions ~~an increase~~on: indistributions, mergers, asset sales, ~~price~~investments ~~per~~and ~~head~~acquisitions, ofencumbrances, ~~beef~~affiliate ~~products~~transactions, ofand ~~approximately~~ERISA 4matters.~~6%,~~ ~~with~~The ~~a relatively~~ability ~~moderate~~of ~~increase~~NBP LLC and its subsidiaries to engage in ~~live~~other ~~cattle~~business, ~~costs~~incur ofdebt ~~approximately~~or 0grant liens is also restricted.~~9%.~~

~~Other~~The Credit Facility contains customary events of default, including, without limitation, failure to make payment when due, materially incorrect representations and warranties, breach of covenants, events of bankruptcy, default of other indebtedness that would permit acceleration of such indebtedness, the occurrence of one or more unstayed or undischarged judgments in excess of $3.0 million, changes in custody or control of NBP LLC’s property, changes in control of National Beef or the Company, failure of any of the loan documents to remain in full force, and the Company’s failure to properly fund its employee benefit plans. The Credit Facility also includes customary provisions protecting the lenders against increased costs or loss of yield resulting from changes in tax, reserve, capital adequacy and other requirements of law.

Net Sales. Net sales for Other were approximately $174.0 million for the thirty-nine weeks ended May 29, 2010 compared to approximately $180.9 million for the thirty-nine weeks ended May 30, 2009, a decrease of approximately $6.9 million, or 3.8%. The slight decrease was primarily due to decreased fuel surcharge revenues at our transportation company, offset by a slight increase in sales at our portion control beef facility during the thirty-nine week period ended May 29, 2010 as compared to the thirty-nine week period ended May 30, 2009.16

~~Operating~~Table Income. Operating income for Other was approximately $3.7 million for the thirty-nine weeks ended May 29, 2010 compared to approximately $5.3 million for the thirty-nine weeks ended May 30, 2009, a decrease of approximately $1.6 million. The decrease was due primarily to our transportation operations lower sales and higher depreciation expense and our portion control beef facilities higher depreciation expense during the period resulting in a reduction in operating income for the current thirty-nine week period ended May 29, 2010 as compared to the thirty-nine week period ended May 30, 2009.Contents

~~Liquidity~~Item 3. Quantitative and ~~Capital~~Qualitative ~~Resources~~Disclosures about Market Risk.

AsThe ofprincipal ~~May 29,~~market ~~2010,~~risks ~~we had~~affecting ~~net~~our ~~working~~business ~~capital~~are ofexposure ~~approximately~~to ~~$213.6~~changes ~~million, which included $32.7 million~~ in ~~distributions~~prices ~~payable~~for ~~and cash and cash equivalents of $20.1 million. As of August 29~~commodities, ~~2009,~~such ~~we had~~as ~~net~~livestock ~~working~~and ~~capital~~boxed ~~of approximately $145.0 million~~beef, ~~which included $35.2 million in distributions payable~~ and ~~cash~~interest ~~and~~rate ~~cash equivalents of $17~~risk.~~4 million. Our primary sources of liquidity are cash flows from operations and available borrowings under our amended and restated credit facility (Credit Facility).~~

AsCommodities. ofWe ~~May 29,~~use ~~2010~~various raw materials, ~~we had~~many ~~$286~~of which are commodities.8 ~~million~~Raw ofmaterials ~~long-term~~are ~~debt~~generally available from several different sources, ofand ~~which~~we ~~$6.6~~presently ~~million~~believe ~~was~~that ~~classified~~we can obtain them as ~~a current~~needed. Commodities ~~liability~~are subject to price fluctuations that may create price risk. As ofFrom ~~May 29~~time to time, ~~2010,~~ ~~our~~we ~~Credit~~may ~~Facility~~hedge ~~consisted~~commodities ofin aorder ~~$228~~to mitigate this price risk.8 ~~million~~While ~~term~~this ~~loan~~may tend to limit our ability to participate in gains from commodity price fluctuations, ~~all~~it also tends to reduce the risk of ~~which was~~loss ~~outstanding,~~from ~~and~~changes ain ~~$225~~commodity prices.0 To ~~million~~the ~~revolving~~extent ~~line~~the ofcontracts ~~credit~~are ~~loan~~not designated as normal purchases, ~~which~~we ~~had outstanding~~reflect ~~borrowings~~commodity contract gains and losses as adjustments to the basis of ~~$37.9~~underlying ~~million,~~commodities ~~outstanding~~purchased; ~~letters~~gains or losses are recognized in the statement of ~~credit~~operations as a component of ~~$26.0 million~~costs ~~and~~of ~~available~~goods sold.

16We purchase cattle for use in our processing businesses. From time to time, we enter into forward purchase contracts at prices determined prior to the delivery of the cattle. The commodity price risk associated with these activities can be hedged by selling (or buying) the underlying commodity, or by using an appropriate commodity derivative instrument. The particular hedging instrument we use depends on a number of factors, including availability of appropriate derivative instruments.

~~Table~~We sell commodity beef products in our business. Commodity beef products are subject to price fluctuations that may create price risk. From time to time, we enter into forward sales contracts at prices determined prior to shipment. We may hedge the commodity price risk associated with these activities in order to mitigate this price risk. While this may tend to limit our ability to participate in gains from commodity price fluctuations, it also tends to reduce the risk of ~~Contents~~loss from changes in commodity beef prices. To the extent the contracts are not designated as normal sales, we reflect commodity contract gains and losses as adjustments to the basis of underlying commodities sold; gains or losses are recognized in the statement of operations as a component of net sales.

~~borrowings~~From oftime ~~$161.2 million~~to time, ~~based~~we onpurchase ~~the~~cattle ~~most~~futures ~~restrictive~~and ~~financial~~options ~~covenant calculations~~contracts. ~~Cash~~ Our ~~flows~~primary ~~from~~use ~~operations~~of ~~and~~these ~~borrowings under~~contracts is to partially determine our ~~Credit~~future ~~Facility~~input costs when we have ~~funded~~committed ~~our~~forward ~~working~~sales ~~capital~~purchase ~~requirements~~orders from customers at a specified fixed price. The longest duration futures contract owned is sixteen months. In accordance with ASC 815, ~~acquisitions~~ Derivatives and Hedging, ~~capital~~as ~~expenditures~~amended, we account for futures contracts and ~~other~~their ~~general~~related ~~corporate~~firm purchase commitments at fair value. Certain firm commitments for live cattle purchases and all firm commitments for boxed beef sales are treated as “normal purchases and sales” and not marked to market. ASC 815 imposes extensive recordkeeping requirements in order to treat a derivative instrument as a hedge for accounting purposes. We ~~were~~Derivatives qualify for treatment as hedges when there is a high correlation between the change in ~~compliance~~fair ~~with~~value ~~all~~of the instrument and the related change in fair value of ~~our financial~~the ~~covenants~~underlying ~~under~~commitment. ~~our~~For ~~Credit~~derivatives ~~Facility~~that qualify as effective hedges, the change in fair value has no net effect on earnings until the hedged transaction affects earnings. For derivatives that are not designated as hedging instruments, or for the ineffective portion of ~~May 29~~a hedging instrument, ~~2010~~the change in fair value does affect current period net earnings.

InWhile ~~addition~~management tobelieves ~~outstanding borrowings~~each ~~under~~of ~~our~~these ~~Credit~~instruments ~~Facility~~helps mitigate various market risks, wethey ~~had~~are ~~outstanding~~not ~~borrowings~~designated ~~under industrial~~and ~~revenue~~accounted ~~bonds~~for as hedges as a result of ~~$12~~the extensive recordkeeping requirements of this statement.2 ~~million~~Accordingly, the gains and ~~capital~~losses ~~leases~~associated ~~and~~with ~~other~~the ~~obligations~~ change in fair value of ~~$7.9~~the ~~million~~instrument asand the offsetting gains and losses associated with changes in the market value of ~~May 29,~~certain ~~2010~~of the firm purchase commitments related to the futures contracts are recorded to income and expense in the period of change.

As noted within Footnote 10, we have amended and restated the terms of our Credit Facility as of June 4, 2010. See the “Amended and Restated Senior Credit Facility” section below for additional details related to the amendment and restatement.17

WeTable believe that available borrowings under our Credit Facility and cash provided by operating activities will be sufficient to support our working capital, capital expenditures and debt service requirements for the foreseeable future. Our ability to generate sufficient cash, however, is subject to certain general economic, financial, industry, legislative, regulatory and other factors beyond our control. For a review of our obligations that affect liquidity, please see the “Cash Payment Obligations” table in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended August 29, 2009.Contents

~~Operating~~We ~~Activities~~use a sensitivity analysis to evaluate the effect that changes in the market value of commodities will have on these commodity derivative instruments. We feel that sensitivity analysis more appropriately reflects the potential market value exposure associated with the use of derivative instruments. As of November 27, 2010 and August 28, 2010, the potential change in the fair value of the derivative instruments we hold that are not designated as normal purchases or sales, assuming a hypothetical 10% decrease in the underlying commodity price in each year, was $9.3 million and $0.3 million, respectively.

~~Net~~Interest ~~cash provided by operating activities in the thirty-nine weeks ended May 29, 2010 was $140~~Rates.6 As ~~million~~a ~~compared~~result ~~to net cash provided by operating activities~~ of ~~$148.0 million~~our innormal ~~the~~borrowing ~~thirty-nine~~and ~~weeks~~leasing ~~ended May 30~~activities, ~~2009. The~~our ~~$7.4~~operating ~~million~~results ~~change~~are ~~was~~exposed ~~primarily due~~ to ~~net~~ ~~income~~fluctuations ofin ~~approximately~~interest ~~$169.8 million during the thirty-nine week period ended May 29~~rates, ~~2010~~which aswe ~~compared~~manage toprimarily ~~the~~through ~~net~~our ~~income~~regular offinancing ~~$74~~activities.2 ~~million~~We ~~during the~~generally ~~thirty-nine~~maintain ~~week~~limited ~~period~~investments ~~ended May 30, 2009. The increase~~ in ~~net income is offset by a decrease in~~ cash ~~provided by accounts receivable~~ and ~~inventory~~cash ~~of approximately of $62~~equivalents.~~6 and $53.1 million respectively.~~

~~Investing~~We ~~Activities~~have long-term debt with variable interest rates. Short-term debt is primarily comprised of the current portion of long-term debt maturing twelve months from the balance sheet date. Our variable interest expense is sensitive to changes in the general level of interest rates. As of November 27, 2010, the weighted average interest rate on our $272.2 million of variable interest debt was approximately 2.84%. As of August 28, 2010, the weighted average interest rate on our $239.2 million of variable interest debt was approximately 2.77%.

~~Net~~We ~~cash~~had ~~used~~total ininterest ~~investing activities~~expense ~~was~~of approximately $272.96 million induring the ~~thirty-nine~~thirteen weeks ended ~~May 29~~November 27, 2010 ~~compared to $34~~.3 The ~~million~~estimated increase in ~~the~~interest ~~thirty-nine~~expense ~~weeks~~from ~~ended~~a ~~May 30, 2009. The~~hypothetical ~~decrease~~200 inbasis ~~cash~~point ~~used~~increase ~~was primarily attributable to a decrease~~ in ~~expenditures~~applicable ~~for~~variable ~~property,~~interest ~~plant~~rates ~~and equipment~~would ~~related~~have tobeen ~~improving~~approximately ~~operating~~$1.3 ~~efficiencies,~~million ~~primarily~~during atthe ~~our Liberal,~~thirteen ~~Dodge~~weeks ~~City~~ended ~~and~~November ~~Case Ready facilities~~27, ~~in the current year~~2010.

~~Financing~~Foreign ~~Activities~~Operations. Transactions denominated in a currency other than an entity’s functional currency may expose that entity to currency risk. Although we operate in international markets including Japan, South Korea and China, product sales are predominately made in United States dollars, and therefore, currency risks are limited.

~~Net~~Item ~~cash used in financing activities was approximately $110.1 million in the thirty-nine weeks ended May 29, 2010 compared to net cash used in financing activities of $124.~~4 ~~million in the thirty-nine weeks ended May 30, 2009~~. ~~The~~ ~~decrease~~Controls ~~in cash used in financing activities was primarily attributed to an approximate $125.5 million redemption of member capital in the prior period,~~ and ~~an additional $75~~Procedures.0 million borrowings on the term loan during the current period. These decreases are offset by an approximate $52.9 million increase in member distributions paid in the current year, the purchase and cancellation of approximately $66.9 million aggregate principal amount of our Senior Notes compared to only $45.5 million in the same period of the prior year, $43.7 million reduction in net receipts under the revolving loan, and an approximate $75.5 million member capital contribution during the prior reporting period.

~~Amended~~We maintain a system of controls and ~~Restated~~procedures ~~Senior Credit~~designed ~~Facility~~to provide reasonable assurance as to the reliability of the Consolidated 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 Quarterly Report on Form 10-Q, 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 controls over financial reporting during the thirteen weeks ended November 27, 2010 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.

Effective as of June 4, 2010, our Credit Facility was amended and restated to: (1) increase the borrowings under the Credit Facility by providing for a term loan facility of up to $375 million and a 18

17Table of Contents

~~Table~~PART ~~of Contents~~II. OTHER INFORMATION

~~revolving line~~Item of credit of up to $250 million; (2) reduce the applicable margin on the rates of interest of the term loan and revolving line of credit; (3) revise the payment schedule of the term loan; (4) extend the maturity date of the Credit Facility to June 4, 2015; and (5) remove the limitations on capital expenditures; (6) add new financial covenants regarding adjusted net worth and a fixed charge coverage ratio; and (7) add two wholly owned subsidiaries, National Beef California, LLP and National Carriers, Inc1.~~, as~~ ~~loan~~Legal ~~parties and guarantors~~Proceedings. ~~The related financing charges, of approximately $4.1 million, will be amortized over the life of the loan.~~

~~The borrowings~~For ~~under~~information ~~the~~regarding ~~Credit~~legal ~~Facility~~proceedings, ~~bear~~see ~~interest~~Note at5, ~~LIBOR~~“Contingencies” orto ~~the~~our ~~Base~~Consolidated ~~Rate, plus~~Financial ~~the~~Statements ~~applicable~~included ~~margin. The applicable~~in ~~margin~~Part ~~for~~I- ~~the~~Item ~~revolving~~1 ~~line~~ of ~~credit~~this ~~and~~Form ~~the~~10-Q, ~~term~~which ~~loan~~is ~~will~~incorporated ~~be based~~herein onby ~~funded debt to EBITDA ratio with grids based on different ratios~~reference.

~~The~~Item ~~borrowings under the revolving loan are available for our working capital requirements, capital expenditures and other general corporate purposes~~1A. ~~The~~ ~~Credit~~Risk ~~Facility is secured by a first priority lien on substantially all of the assets of the Company and its subsidiaries~~Factors. The principal amount outstanding under the term loan is due and payable in equal quarterly installments, beginning in October 2010, based on a 10-year level amortization of the remaining amount of the term loan. All outstanding loan amounts are due and payable June 4, 2015. Prepayment of the loans is allowed at any time.

The ~~Credit~~risk ~~Facility~~factors ~~contains customary~~set ~~affirmative~~forth ~~covenants~~in ~~relating~~our toAnnual ~~NBP~~Report ~~LLC~~on ~~and~~Form ~~its~~10-K ~~subsidiaries, including,~~for ~~without limitation, conduct of business,~~ the ~~maintenance~~fiscal ~~of insurance,~~year ~~compliance~~ended ~~with~~August ~~laws~~27, ~~maintenance~~2010 ofhave ~~properties,~~not ~~keeping~~materially ~~of books and records, and the furnishing of financial statements~~changed. The facility also contains customary negative covenants relating to NBP LLC and its subsidiaries, including, without limitation, restrictions on the following: cash distributions to its members, mergers, sale of assets, investments and acquisitions, encumbrances, indebtedness, affiliate transactions, and ERISA matters. The ability of NBP LLC and its subsidiaries to engage in other business, incur debt or grant liens is also restricted.

~~The~~Item Credit Facility contains customary events of default, including without limitation, failure to make payment when due, materially incorrect representations and warranties, breach of covenants, events of bankruptcy, default of other indebtedness that would permit acceleration of such indebtedness, the occurrence of one or more unstayed or undischarged judgments in excess of $36.0 million, changes in custody or control of the Company’s property, changes in control of the Company, or failure of any of the loan documents to remain in full force, and the Company’s failure to properly fund its employee benefit plansExhibits. The Credit Facility also includes customary provisions protecting the lenders against increased cost or loss of yield resulting from changes in tax, reserve, capital adequacy and other requirements of law.

18(A) Exhibits

~~Table~~31.1 Certification of ~~Contents~~ the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~Item 3~~31.2 ~~Quantitative~~Certification ~~and~~of ~~Qualitative~~the ~~Disclosures~~Chief ~~About~~Financial ~~Market~~Officer ~~Risk~~pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~The~~32.1 ~~principal~~Certification ~~market~~of ~~risks~~the ~~affecting~~Chief ~~our~~Executive ~~business~~Officer ~~are~~pursuant ~~exposure~~ to ~~changes~~ in18 ~~prices~~U.S.C. ~~for~~Section ~~commodities~~1350, ~~such~~ as ~~livestock~~adopted ~~and~~pursuant ~~boxed~~to ~~beef,~~Section ~~and interest~~906 ~~rate~~of ~~risk~~the Sarbanes-Oxley Act of 2002.

~~Commodities~~32. We2 ~~use~~Certification ~~various raw materials, many~~ of ~~which~~the ~~are~~Chief ~~commodities.~~Financial ~~Raw materials~~Officer ~~are~~pursuant ~~generally available from several different sources, and we presently believe that we can obtain them as needed. Commodities are subject~~ to ~~price~~18 ~~fluctuations that may create price risk~~U. ~~From time to time, we may hedge commodities in order to mitigate this price risk~~S. ~~While this may tend to limit our ability to participate in gains from commodity price fluctuations, it also tends to reduce the risk of loss from changes in commodity prices~~C. To ~~the~~Section ~~extent the contracts are not designated as normal purchases~~1350, ~~we reflect commodity contract gains and losses~~ as ~~adjustments~~adopted pursuant to ~~the~~Section ~~basis~~906 of ~~underlying commodities purchased; gains or losses are recognized in~~ the ~~statement~~Sarbanes-Oxley ofAct ~~operations as a component~~ of ~~costs of goods sold~~2002.

We purchase cattle for use in our processing businesses. From time to time, we enter into forward purchase contracts at prices determined prior to the delivery of the cattle. The commodity price risk associated with these activities can be hedged by selling (or buying) the underlying commodity, or by using an appropriate commodity derivative instrument. The particular hedging instrument we use depends on a number of factors, including availability of appropriate derivative instruments.19

~~We sell~~Table commodity beef products in our business. Commodity beef products are subject to price fluctuations that may create price risk. From time to time, we enter into forward sales contracts at prices determined prior to shipment. We may hedge the commodity price risk associated with these activities in order to mitigate this price risk. While this may tend to limit our ability to participate in gains from commodity price fluctuations, it also tends to reduce the risk of loss from changes in commodity beef prices. To the extent the contracts are not designated as normal sales, we reflect commodity contract gains and losses as adjustments to the basis of underlying commodities sold; gains or losses are recognized in the statement of operations as a component of net sales.Contents

From time to time, we purchase cattle futures and options contracts. Our primary use of these contracts is to partially determine our future input costs when we have committed forward sales purchase orders from customers at a specified fixed price. The longest duration futures contract owned is thirteen months. In accordance with ASC Topic 815, Accounting for Derivative Instruments and Hedging Activities, as amended, we account for futures contracts and their related firm purchase commitments at fair value. Certain firm commitments for live cattle purchases and all firm commitments for boxed beef sales are treated as “normal purchases and sales” and not marked to market. ASC topic 815 imposes extensive recordkeeping requirements in order to treat a derivative 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 affects earnings. 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.SIGNATURES

~~While management~~Pursuant ~~believes~~to ~~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 of ~~this statement. Accordingly,~~ the ~~gains and~~Securities ~~losses~~Exchange ~~associated~~Act ~~with the change in fair value~~ of ~~the~~1934, ~~instrument and~~ the ~~offsetting~~ ~~gains~~registrant ~~and~~has ~~losses~~duly ~~associated~~caused ~~with~~this ~~changes~~report ~~in the market value of certain of the firm purchase commitments related~~ to ~~the~~be ~~futures~~signed ~~contracts~~on ~~are recorded~~its tobehalf ~~income~~by ~~and expense in~~ the ~~period~~undersigned ofthereunto ~~change~~duly authorized.

~~We use~~National aBeef ~~sensitivity~~Packing ~~analysis~~Company, toLLC ~~evaluate~~By: ~~the~~/s/ ~~effect~~Timothy ~~that~~M. ~~changes~~Klein inTimothy ~~the market value of commodities will have on these commodity derivative instruments~~M. We ~~feel~~Klein ~~that~~Chief ~~sensitivity~~Executive ~~analysis~~Officer ~~more appropriately~~and ~~reflects~~Manager ~~the~~(Principal ~~potential~~Executive ~~market~~Officer) ~~value~~By: ~~exposure~~/s/ ~~associated~~Jay ~~with the use of derivative instruments~~D. As ofNielsen ~~May 29, 2010,~~Jay ~~the potential change in the fair value of applicable commodity prices, assuming a hypothetical 10% decrease in the underlying commodity price in each year, was $1~~D.7 ~~million. As~~Nielsen ofChief ~~August 30, 2009,~~Financial ~~the~~Officer ~~potential~~(Principal ~~change~~Financial inand ~~fair~~Accounting ~~value of applicable commodity prices, assuming a hypothetical 10% decrease in the underlying commodity price, was $16.4 million. This change was~~Officer)

19Date: January 7, 2011

~~Table of Contents~~20

primarily due to the cattle futures contracts that we entered into during the first quarter of fiscal 2009 to offset the risk of fixed-price sales commitments.

Foreign Operations. Transactions denominated in a currency other than an entity’s functional currency may expose that entity to currency risk. Although we operate in international markets including Japan and South Korea, product sales are predominately made in United States dollars, and therefore, currency risks are limited.

Interest Rates. As a result of our normal borrowing and leasing activities, our operating results are exposed to fluctuations in interest rates, which we manage primarily through our regular financing activities. We generally maintain limited investments in cash and cash equivalents.

We have long-term debt with variable interest rates. Short-term debt is primarily comprised of the current portion of long-term debt maturing twelve months from the balance sheet date. Our variable interest expense is sensitive to changes in the general level of interest rates. As of May 29, 2010, the weighted average interest rate on our $278.9 million of variable rate debt was approximately 5.2%.

We had total interest expense of approximately $11.6 million during the thirty-nine week period ending May 29, 2010. The estimated increase in interest expense from a hypothetical 200 basis point increase in applicable variable interest rates would have been approximately $4.0 million in the thirty-nine week period ending May 29, 2010.

Item 4. Controls and Procedures.

We maintain a system of controls and procedures designed to provide reasonable assurance as to the reliability of the Consolidated 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 Quarterly Report on Form 10-Q, 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 controls over financial reporting during the thirteen weeks ended May 29, 2010 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.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

For information regarding legal proceedings, see Note 5, “Contingencies” to our Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Item 1A. Risk Factors.

The risk factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended August 29, 2009 have not materially changed.

Item 6. Exhibits.

(A) Exhibits

31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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.
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.

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SIGNATURES

Pursuant to the requirements 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.

National Beef Packing Company, LLC By: /s/ Timothy M. Klein Timothy M. Klein Chief Executive Officer and Manager (Principal Executive Officer) By: /s/ Jay D. Nielsen Jay D. Nielsen Chief Financial Officer (Principal Financial and Accounting Officer)

Date: July 9, 2010

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