UNITED STATES ~~SECURITIES AND EXCHANGE COMMISSION~~

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark one)

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

For the fiscal year ended August 2827, ~~2010~~2011

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

For the transition period from to .

Commission file number 333-111407

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)
(State or other jurisdiction ofincorporation 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)

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

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

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

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

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

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

Large Accelerated ~~Filer~~Filero o Accelerated ~~Filer~~Filero o Non-Accelerated ~~Filer~~Filerx x Smaller reporting ~~company o~~companyo

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

There is no market for the Registrant’s equity. As of ~~October~~November 2916, ~~2010~~2011, there were 203,990,136 Class A units and 15,381,317 Class B units outstanding, all of which were held by affiliates.

DOCUMENTS INCORPORATED BY REFERENCE

None

Table of Contents

TABLE OF CONTENTS

		Page No.
	PART I.
Item 1.	Business.	4
Item 1A.	Risk Factors.	1613
Item 1B.	Unresolved Staff Comments.	2520
Item 2.	Properties.	2520
Item 3.	Legal Proceedings.	2621
	PART II.
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	2722
Item 6.	Selected Financial Data.	2823
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2924
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	4337
Item 8.	Financial Statements and Supplementary Data.	4438
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	4438
Item 9A.	Controls and Procedures.	4438
Item 9B.	Other Information.	4539
	PART III.
Item 10.	Directors, Executive Officers and Corporate Governance.	4640
Item 11.	Executive Compensation.	4842
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	5851
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	6053
Item 14.	Principal Accounting Fees and Services.	6153
	PART IV.
Item 15.	Exhibits and Financial Statement Schedules.	6255
	Signatures.	6558

Table of Contents

MARKET AND INDUSTRY DATA AND FORECASTS

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

_______________________________________________________

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 “USPB” refers to U.S. Premium Beef, LLC, a Delaware limited liability company, formerly U.S. Premium Beef, Ltd., a Kansas cooperative. As used in this report, the terms “fiscal year” or “fiscal year ended” refers to our fiscal year, which ends on the last Saturday in August.

Table of Contents

PART I


ITEM 1.	BUSINESS

General

We are one of the largest beef processing companies in the United States, or U.S., accounting for approximately 14% of the federally inspected steer and heifer slaughter during our fiscal year ended August 2827, ~~2010~~2011 as reported by the United States Department of Agriculture, or USDA. During the fiscal year ended August 2827, ~~2010~~ 2011, we generated approximately $56.8 billion in total net sales and had net income of approximately $~~248~~259.0 million.

Led by an entrepreneurial management team, we began operations in 1992 with a single facility in Dodge City, Kansas. Since then, we have successfully grown through internal expansion, selective facility acquisitions, process improvements and a focus on increasing our value-added product offerings consisting of branded boxed beef, case ready beef, portion control beef and further processed hides. We have invested approximately $~~410~~478.2 million from the beginning of fiscal 2001 through the end of fiscal ~~2010~~2011 to expand our operations, modernize and increase the capacity of our facilities, and increase our ability to produce and sell higher margin, value-added products. In 1997, we entered into a strategic relationship with our current majority owner, U.S. Premium Beef, or USPB, an organization owned by cattle ranchers and feedlot operators. USPB members supply us with approximately 20% of the cattle we process pursuant to our contractual arrangement with USPB. Some of these members also sell us additional cattle outside of this arrangement. We do not own any USPB member cattle or feedlots. We believe the USPB relationship provides us with a competitive advantage through a consistent and dependable supply of high-quality cattle, including for processing in our value-added and other programs.

We process, package and deliver fresh and frozen beef and beef by-products for sale to customers in the U.S. and international markets. Our products include boxed beef, ground beef, hides, tallow, and other beef and beef by-products. We emphasize the sale of higher-margin, value-added beef products including branded boxed beef, case-ready beef, portion control beef, and further processed hides. We market our branded products under several trade names that we own including Black Canyon® Angus Beef ,Black Canyon® Premium Reserve, Certified Premium Beef®, Naturewell® Natural Beef, NatureSource® Natural Angus Beef, Vintage Natural Beef® and Imperial Valley® Premium Beef. In addition to ~~the~~ brands we own, we also ~~part~~market ~~of our~~ value-added ~~product~~products ~~line~~under isthe following registered trademarks pursuant to license agreements: Certified Angus Beef®, a registered trademark ~~(used with permission)~~ of Certified Angus Beef LLC, a wholly-owned subsidiary of the American Angus Association; and Certified Hereford Beef® and Nuestro Rancho®, registered trademarks ~~(used with permission)~~ of Certified Hereford Beef, LLC.

~~In addition~~We market our products to retailers, food service providers, distributors, further processors, and the United States military. Value-added products represented approximately 36% of our total net sales, and a substantially higher proportion of our operating profit during fiscal year 2011. We currently export our products to more than 30 countries and we have dedicated sales offices in Japan, South Korea and China. Our export sales represented approximately 13% of our net sales for the fiscal year ended August 27, 2011. According to export data from PIERS, we are currently the largest exporter of chilled beef produced in the U.S. to Japan. We also are a majority owner of Kansas City Steak Company, LLC, or Kansas City Steak, which sells portioned beef and other products directly to customers in the food service and retail channels as well as direct to consumers through the internet, direct mail and QVC.

We ~~market~~ believe our ~~products~~Dodge ~~to retailers~~City, ~~food~~Kansas ~~service~~and ~~providers~~Liberal, ~~distributors,~~Kansas ~~further processors,~~beef ~~and~~processing ~~the~~facilities ~~United~~are ~~States~~among ~~military. Value-added~~the ~~products~~highest ~~represented~~capacity ~~approximately~~and ~~35%~~most ofefficient ~~our~~plants ~~total~~in ~~net sales~~the U.S. In addition, ~~and~~we abelieve ~~substantially~~our ~~higher~~beef ~~proportion~~processing offacility ~~our~~in ~~operating~~Brawley, ~~profit~~California ~~during fiscal~~is ~~year~~among ~~2010~~the newest in the industry. WeThese ~~currently~~three ~~export our~~beef ~~products~~processing facilities are located to ~~more~~provide ~~than~~efficient 25access ~~countries~~to ~~and~~a weready ~~have~~supply ~~dedicated~~of ~~sales~~high ~~offices~~quality ~~in Japan~~cattle. Our two case-ready facilities, ~~South~~which ~~Korea~~take primal cuts and ~~China. Our~~further ~~export sales~~process ~~represented~~and ~~approximately~~package ~~11%~~meat ofto ~~our~~customer ~~net~~specifications, ~~sales~~are ~~for~~located ~~the~~in ~~fiscal~~Hummels ~~year~~Wharf, ~~ended~~Pennsylvania ~~August 28~~and Moultrie, ~~2010~~ Georgia and service key customers in readily accessible high density population centers. ~~According~~We toalso ~~export~~own ~~data~~and ~~from PIERS~~operate a refrigerated and livestock transportation company, weNational ~~are~~Carriers, Inc., ~~currently~~or ~~the~~National ~~largest~~Carriers, ~~exporter~~as part of ~~chilled~~our ~~beef~~commitment ~~produced~~to inprovide ~~the U.S.~~high service levels to ~~Japan~~our customers and suppliers.

We believe our Dodge City, Kansas and Liberal, Kansas beef processing facilities are among the highest capacity and most efficient plants in the U.S. In addition, we believe our beef processing facility in Brawley, California is among the newest in the industry. These three beef processing facilities are located to provide efficient access to a ready supply of high quality cattle. Our ~~two~~Competitive case-ready facilities, which take primal cuts and further process and package meat to customer specifications, are located in Hummels Wharf, Pennsylvania and Moultrie, Georgia and service key customers in readily accessible high density population centers. We also own and operate a refrigerated and livestock transportation company, National Carriers, Inc., or National Carriers, as part of our commitment to provide high service levels to our customers and suppliers.Strengths

4Significant Value-Added Product Portfolio. We are a leading producer of value-added beef products. Our customers market these products under our brands as well as through their own premium private label programs. We believe our value-added products are able to command higher prices because of our ability to consistently meet product specifications, based on quality, trim, weight, size, breed or other factors tailored to the needs of our customers. We also provide marketing support for our value-added programs. We believe our value-added products and programs not only provide higher profitability, but also improve customer acquisition and retention.

~~Table of Contents~~4

~~Our Competitive~~Table ~~Strengths~~of Contents

~~Significant Value-Added~~In ~~Product~~March 2009, ~~Portfolio. We~~we ~~are~~expanded aour ~~leading producer of~~ value-added ~~beef~~product ~~products.~~portfolio ~~Our~~through ~~customers market these products under~~ our ~~brands~~acquisition asof ~~well~~a aswet ~~through~~blue ~~their~~tanning ~~own~~facility ~~premium~~in ~~private~~Saint ~~label~~Joseph, ~~programs~~Missouri. We ~~believe~~sell our ~~value-added~~wet ~~products~~blue ~~are~~tanned ~~able~~hides to ~~command~~processors ~~higher~~that ~~prices~~produce ~~because of~~finished ~~our~~leather ~~ability~~for tohigh ~~consistently~~quality ~~meet~~applications ~~product~~in ~~specifications,~~industries ~~based~~such onas ~~quality~~automotive, ~~trim,~~ ~~weight,~~luxury ~~size~~goods, ~~breed~~apparel orand ~~other factors tailored to the needs of our customers~~furniture. We ~~also~~believe ~~provide~~supplementing ~~marketing support for~~ our value-added ~~programs. We believe~~product ~~our~~portfolio ~~value-added~~through ~~products~~further ~~and~~processing ~~programs~~of ~~not~~a ~~only~~portion ~~provide~~of ~~higher profitability,~~our ~~but~~hides ~~also~~will ~~improve~~generate ~~customer~~additional ~~acquisition~~profit ~~and~~for ~~retention~~us.

~~In March 2009,~~Our wetotal ~~expanded our~~ value-added ~~product~~sales ~~portfolio~~in ~~through~~fiscal ~~our acquisition~~2011 ofwere aapproximately ~~wet~~$2,482.2 ~~blue~~million, ~~tanning~~comprising ~~facility~~approximately in36% ~~Saint~~of ~~Joseph, Missouri. We sell~~ our ~~wet~~total ~~blue~~net ~~tanned~~sales. ~~hides~~This ~~to processors~~represents ~~that~~a ~~produce~~compound ~~finished~~annual ~~leather~~growth ~~for~~rate ~~high~~of ~~quality~~17% ~~applications~~from ~~in industries~~approximately ~~such~~$595.2 asmillion ~~automotive,~~of ~~luxury~~total ~~goods,~~value-added ~~apparel~~sales ~~and~~in ~~furniture~~fiscal 2002. We believe ~~supplementing~~ our value-added ~~product~~ ~~portfolio~~products ~~through~~will ~~further~~continue ~~processing~~to ofbe aan ~~portion~~important ofcontributor to our ~~hides~~profitability. Margins ~~will generate~~on ~~additional~~our ~~profit~~value-added ~~for~~products ushistorically have been less volatile than margins on our commodity products.

~~Our total~~Differentiated ~~value-added~~Cattle ~~sales~~Supply. USPB, ina ~~fiscal~~limited ~~2010~~liability ~~were~~company ~~approximately~~whose ~~$2,038.4~~owners ~~million~~consist of cattle ranchers and feedlot operators, ~~comprising~~ is contractually obligated to deliver approximately ~~35%~~735,000 head of ~~our~~cattle ~~total~~per ~~net~~year ~~sales~~to us. We ~~This~~do ~~represents~~not aown ~~compound annual~~any ~~growth~~USPB ~~rate~~member ofcattle ~~17%~~or feedlots. We believe the cattle we receive from ~~approximately~~USPB ~~$595.2~~members ~~million~~are of ~~total~~ high quality, which is important for our value-added ~~sales~~programs. In in fiscal ~~2002~~2011, pursuant to our contractual arrangement with USPB, USPB members provided us with approximately 20% of the total cattle we processed. Some USPB members also sold us additional cattle outside of this arrangement. We believe ~~our~~this ~~value-added~~supply ~~products~~relationship ~~will~~with ~~continue~~USPB tomembers beprovides anus ~~important~~with ~~contributor~~ significant competitive advantages, including: (i) the ability to consistently provide our ~~profitability. Margins~~customers onwith ~~our~~ higher margin, value-added products ~~historically~~and ~~have~~(ii) a ~~been~~predictable ~~less~~supply ~~volatile~~of ~~than~~cattle ~~margins~~that onenhances ~~our commodity~~production ~~products~~efficiencies.

~~Differentiated~~Our ~~Cattle~~two ~~Supply. USPB,~~largest abeef ~~limited~~processing ~~liability company~~facilities, ~~whose~~which ~~owners~~represent ~~consist~~approximately 86% of ~~cattle~~our ~~ranchers~~slaughter ~~and~~capacity, ~~feedlot~~are ~~operators,~~located ~~is contractually~~in ~~obligated~~southwest toKansas. The ~~deliver~~primary ~~approximately~~market ~~735,000~~area ~~head~~for the purchase of cattle ~~per year~~for tothose usfacilities includes Kansas, Texas and Oklahoma. WeAccording doto ~~not~~information ~~own~~from ~~any~~the ~~USPB member~~USDA, cattle oron ~~feedlots. We~~feed ~~believe~~ in the ~~cattle~~Kansas, weTexas ~~receive~~and ~~from~~Oklahoma ~~USPB~~area ~~members~~represented ~~are~~approximately 48% of ~~high~~the ~~quality,~~cattle ~~which~~on isfeed ~~important for~~in ~~our~~the ~~value-added programs~~U. InS. during fiscal ~~2010,~~ ~~pursuant~~2011. A tosignificant ~~our~~portion ~~contractual~~of ~~arrangement with~~ USPB,’s ~~USPB~~ members ~~provided us~~are ~~with~~located ~~approximately~~in ~~20%~~this ofarea, ~~the~~further ~~total~~enhancing our cattle wesupply ~~processed~~chain. Our ~~Some~~third ~~USPB~~beef ~~members also~~processing ~~sold~~facility usis ~~additional~~located ~~cattle~~in ~~outside~~southeastern ~~of this arrangement~~California. WeAn ~~believe~~important ~~this~~source ~~supply~~of ~~relationship~~cattle ~~with~~for ~~USPB members~~this ~~provides~~facility usis ~~with~~an ~~significant~~alliance ~~competitive~~of ~~advantages,~~cattle ~~including:~~producers (~~i) the ability~~which toalliance ~~consistently~~is ~~provide~~a ~~our~~member ~~customers~~of ~~with~~USPB) ~~higher~~in ~~margin,~~Arizona ~~value-added products~~ and ~~(ii) a~~California ~~predictable~~with ~~supply~~whom ofwe have cattle ~~that~~supply ~~enhances production efficiencies~~agreements.

~~Our two largest beef processing facilities, which represent approximately 86% of our slaughter capacity, are located in southwest Kansas.~~ The ~~primary~~close ~~market~~proximity ~~area for the purchase~~ of ~~cattle~~ ~~for~~our ~~those~~ facilities ~~includes Kansas, Texas and Oklahoma. According~~ to ~~information~~large ~~from~~supplies ~~the~~of ~~USDA,~~ cattle ongives ~~feed~~our inbuyers the ~~Kansas,~~ability ~~Texas~~to ~~and~~visit ~~Oklahoma~~feedlots ~~area represented approximately 48% of the cattle~~ on ~~feed~~a inregular ~~the~~basis, ~~U.S.~~which ~~during~~enables ~~fiscal~~us ~~2010. A~~to ~~significant~~develop ~~portion~~strong ofworking ~~USPB’s~~relationships ~~members~~with ~~are located~~our ~~in this area~~suppliers, ~~further~~reduces ~~enhancing~~ our ~~cattle~~reliance ~~supply~~on ~~chain. Our~~any ~~third~~one ~~beef processing facility is located in southeastern California. An important source of~~ cattle ~~for~~supplier ~~this~~and ~~facility~~lowers ~~is an alliance of cattle producers (which alliance is a member of USPB)~~ in-bound ~~Arizona~~transportation ~~and California with whom we have cattle supply agreements~~costs.

~~The close~~Modern ~~proximity~~and Efficient Facilities. We have invested more than $478.2 million from the beginning of fiscal 2001 through the end of fiscal 2011 to expand our operations, modernize and increase the capacity of our facilities, and increase our ability to ~~large~~produce ~~supplies~~and ofsell ~~cattle~~higher ~~gives~~margin, value-added products. We believe our ~~buyers~~ beef processing facilities in Dodge City, Kansas and Liberal, Kansas are among the ~~ability~~largest, most modern and efficient processing facilities in the U.S. With the acquisition of the Brawley, California plant in June 2006, we expanded our daily processing capacity to ~~visit~~approximately ~~feedlots~~14,000 oncattle per day and gained a ~~regular~~strategic ~~basis~~location to access more efficiently western U.S. and Asian export markets. Our two case-ready facilities in Hummels Wharf, Pennsylvania and Moultrie, Georgia, which ~~enables~~began operating in 2001, are outfitted with state-of-the-art processing and packaging equipment that allows us to ~~develop strong~~serve ~~working~~key ~~relationships~~customers ~~with~~in high density population centers in the Eastern U.S. We are in the process of an expansion project (budgeted at approximately $28.9 million) at our ~~suppliers~~tannery in St. Joseph, ~~reduces~~Missouri, which is expected to be completed in 2012. This project, which was contemplated as part of our ~~reliance~~acquisition onplan ~~any~~ for the tannery assets in March 2009, is designed to increase the capacity and product capabilities of our tannery facility. We believe this facility will be one ~~cattle~~of ~~supplier~~the largest and ~~lowers~~most efficient wet blue processing plants in~~-bound~~ ~~transportation~~the ~~costs~~world once this expansion is completed.

~~Modern~~Customer and ~~Efficient~~ ~~Facilities~~Channel Diversification. We have ~~invested~~a ~~more~~diversified ~~than~~sales ~~$410~~mix ~~million~~across ~~from the~~distribution ~~beginning~~channels ofand ~~fiscal~~customers. This ~~2001~~approach ~~through~~provides ~~the~~multiple ~~end~~avenues of ~~fiscal~~potential ~~2010~~growth toand ~~expand~~reduces our ~~operations,~~ ~~modernize~~dependence ~~and~~on ~~increase~~any ~~the~~one ~~capacity~~market ofor ~~our~~customer. We ~~facilities,~~sell ~~and increase~~ our ~~ability~~products to ~~produce and sell higher margin~~retailers, ~~value-added~~food ~~products.~~service ~~We believe our beef processing facilities in Dodge City~~providers, ~~Kansas and Liberal~~distributors, ~~Kansas~~further ~~are among the largest~~processors, ~~most modern and efficient processing facilities in~~ the U.S. ~~With~~ ~~the acquisition of the Brawley~~military, ~~California plant in June 2006, we expanded our daily processing capacity to approximately 14,000 cattle per day~~ and ~~gained~~through aother ~~strategic location to access more efficiently Western U~~channels.S. Across ~~and Asian~~these ~~export~~channels, ~~markets.~~we ~~Our~~serve ~~two~~over ~~case-ready facilities in Hummels Wharf~~1,100 ~~Pennsylvania and~~customers ~~Moultrie~~worldwide, ~~Georgia,~~ which ~~began~~represent ~~operating~~most inmajor ~~2001,~~retailers ~~are outfitted with state-of-the-art processing~~ and ~~packaging~~food ~~equipment~~service ~~that~~providers ~~allows us to serve key customers~~ in ~~high density population centers in~~ the ~~Eastern~~ U.S. In Wefiscal ~~are~~2011, inno ~~the~~one ~~process~~customer ofrepresented anmore ~~expansion~~than ~~project~~3% ~~(budgeted~~of ~~at approximately $28.5 million) at~~ our ~~tannery~~total innet ~~St. Joseph~~sales, ~~Missouri,~~other ~~which~~than ~~is expected~~Wal-Mart toand beits ~~completed~~affiliate inSam’s ~~2012. This project~~Club, which ~~was~~together ~~contemplated~~represented asapproximately ~~part~~ 9% of our ~~acquisition~~total ~~plan~~net ~~for~~sales. Our ~~the~~top ~~tannery~~10 ~~assets~~customers inrepresented ~~March 2009,~~approximately is30% ~~designed~~of ~~to increase~~our ~~the~~total ~~capacity~~net ~~and~~sales ~~product~~in ~~capabilities~~fiscal ~~of our tannery~~ 2011.

5Export products provide us with geographic diversification and reduce our reliance on the U.S. market. Of our export sales for fiscal 2011, approximately 56% were meat and offal products. The balance was hides and other by-products, which are not generally subject to animal health, food safety or political risks.

~~Table~~Disciplined Financial Management. Our indebtedness of ~~Contents~~$360.4 million as of August 27, 2011 represents approximately 1.1 times our earnings before interest, taxes, depreciation and amortization, or EBITDA, for the 52 weeks ended

~~facility. We believe this facility will be one of the largest and most efficient wet blue processing plants in the world once this expansion is completed.~~5

~~Customer~~Table ~~and Channel Diversification. We have a diversified sales mix across distribution channels and customers. This approach provides multiple avenues~~ of ~~potential~~ growth and reduces our dependence on any one market or customer. We sell our products to retailers, food service providers, distributors, further processors, the U.S. military, and through other channels. Across these channels, we serve over 1,100 customers worldwide, which represent most major retailers and food service providers in the U.S. In fiscal year 2010, no one customer represented more than 3% of our total net sales, other than Wal-Mart and its affiliate Sam’s Club, which together represented approximately 10% of our total net sales. Our top 10 customers represented approximately 31% of our total net sales in fiscal year 2010.Contents

~~Export products~~August ~~provide~~27, us2011 ~~with~~(EBITDA ~~geographic~~is ~~diversification~~calculated ~~and~~in ~~reduce~~a substantially similar manner under our ~~reliance~~amended on and restated credit facility, or the ~~U.S.~~Credit ~~market~~Facility). OfThis ~~our~~relatively ~~export~~low ~~sales~~leverage ~~for fiscal~~provides ~~year~~us ~~2010,~~with ~~approximately~~significant ~~57%~~operating ~~were~~and ~~meat~~financial flexibility to respond to market conditions and ~~offal~~to ~~products~~capitalize on business opportunities. ~~The~~ ~~balance~~A ~~was~~core ~~hides~~aspect ~~and~~of ~~other~~our ~~by-products, which~~disciplined ~~are~~approach ~~not~~to ~~generally~~financial ~~subject~~management is our proprietary management information systems that enable us to ~~animal~~make ~~health~~data driven, ~~food~~analytical ~~safety~~decisions orto ~~political risks~~operate efficiently, allocate capital prudently and manage risk.

~~Disciplined~~Experienced ~~Financial~~ Management. ~~Our~~Team ~~indebtedness~~and ofWorkforce ~~$246~~with Entrepreneurial Company Culture.5 ~~million~~We asare ofled ~~August 28,~~by ~~2010 represents~~an ~~approximately~~experienced 0management team.8 ~~times~~Timothy M. Klein, our ~~earnings~~Chief ~~before~~Executive ~~interest~~Officer, ~~taxes, depreciation~~has ~~and~~more ~~amortization,~~than or31 ~~EBITDA,~~years ~~for~~of ~~the~~experience 52in ~~weeks~~the ~~ended~~beef ~~August 28, 2010~~processing ~~(EBITDA~~industry and is ~~calculated~~a infounding amember ~~substantially~~and ~~similar~~significant ~~manner~~owner ~~under~~of NBP. The rest of our ~~amended and~~executive ~~restated~~management ~~credit~~team ~~facility~~has, oron ~~the~~average, ~~Credit~~over ~~Facility). This~~25 ~~relatively~~years ~~low~~of ~~leverage~~industry ~~provides~~experience usand over 13 years with ~~significant~~ ~~operating~~NBP. ~~and~~We ~~financial~~believe ~~flexibility~~our toentrepreneurial ~~respond~~company toculture, ~~market~~advancement ~~conditions~~ opportunities, benefits, training programs and employee safety policies contribute to ~~capitalize~~relatively onlow ~~business~~employee ~~opportunities~~turnover rates. AOur ~~core~~entrepreneurial ~~aspect~~culture ofis ~~our~~evidenced ~~disciplined approach~~by toour ~~financial~~record ~~management~~of isgrowth, ~~our~~emphasis ~~proprietary~~on ~~management~~individual ~~information systems~~employee ~~that~~accountability ~~enable~~and uscompany-wide tofocus ~~make~~on ~~data~~profitability. ~~driven,~~We ~~analytical~~have ~~decisions~~never toexperienced ~~operate efficiently,~~a ~~allocate~~work ~~capital~~stoppage at ~~prudently~~any ~~and~~of ~~manage~~our ~~risk~~facilities.

Experienced Management Team and Workforce with Entrepreneurial Company Culture. We are led by an experienced management team. Timothy M. Klein, our Chief Executive Officer, has more than 30 years of experience in the beef processing industry and is a founding member and significant owner of NBP. The rest of our executive management team has, on average, over 24 years of industry experience and over 12 years with NBP. We believe our entrepreneurial company culture, advancement opportunities, benefits, training programs and employee safety policies contribute to relatively low employee turnover rates. Our ~~entrepreneurial culture~~Business ~~is evidenced by our record of growth, emphasis on individual employee accountability and company-wide focus on profitability. We have never experienced a work stoppage at any of our facilities.~~Strategy

Expand Sales of Value-Added Products. Our ~~Business~~ ~~Strategy~~value-added sales grew to approximately $2,482.2 million in fiscal 2011 from approximately $595.2 million in fiscal 2002, representing a compound annual growth rate of approximately 17%. We intend to continue expanding sales of value-added products by increasing our penetration with existing customers, targeting new customers that are well-suited for our value-added programs and expanding the number of value-added products we offer. We believe the investments we have already made in our value-added business, including in retail merchandising expertise, customer service and fulfillment capabilities and operational/processing technologies, along with our differentiated cattle supply chain, position us well to capitalize on this strategy. For example, we have been a leader in establishing the case-ready market, and we believe our experience will enable us to benefit from increased customer interest in the advantages case-ready products provide, such as reducing labor costs and workplace injuries associated with slicing beef, reducing food safety risks and shifting the square footage currently used by “back-of-the-store” portioning and packaging to higher profit uses. In addition to beef products, our value-added initiatives also include our wet blue tanning business. We are in the process of expanding our tanning operation, which is expected to be completed in 2012. When the project is complete, we expect to be able to process nearly all of the hides we produce at our Kansas beef processing plants.

~~Expand Sales~~Pursue ofAdditional ~~Value-Added~~Export ~~Products~~Opportunities. ~~Our~~We ~~value-added~~believe ~~sales~~international ~~grew to~~markets ~~approximately~~present ~~$2,038.4~~a ~~million~~significant ingrowth ~~fiscal~~and ~~2010~~profit ~~from~~opportunity ~~approximately~~for ~~$595~~us.~~2 million~~ inWe ~~fiscal~~believe ~~2002,~~protein ~~representing~~demand awill ~~compound~~increase ~~annual~~in ~~growth~~the ~~rate~~long ~~of approximately~~term ~~17%.~~due ~~We intend~~ to ~~continue~~rising ~~expanding~~living ~~sales~~standards ofand ~~value-added products~~a bygrowing ~~increasing~~middle ~~our~~class ~~penetration~~in ~~with~~developing ~~existing~~countries. ~~customers,~~As ~~targeting~~a ~~new customers~~leading ~~that~~producer ~~are well-suited for our value-added programs and expanding the number~~ of ~~value-added~~beef products, we ~~offer. We~~ believe ~~the investments~~ we ~~have already~~are ~~made in our value~~well-~~added~~positioned ~~business,~~to ~~including~~serve inthis ~~retail~~growing ~~merchandising expertise,~~global ~~customer~~demand. According ~~service and fulfillment capabilities and operational/processing technologies, along with our differentiated cattle supply chain, position us well~~ to ~~capitalize~~export ondata ~~this~~from ~~strategy. For example~~PIERS, we ~~have~~ ~~been~~are acurrently ~~leader in establishing~~ the ~~case-ready~~largest ~~market,~~exporter ~~and~~of wechilled ~~believe~~beef ~~our experience~~produced ~~will enable us to benefit from increased customer interest~~ in the ~~advantages~~ ~~case-ready~~U.S. ~~products~~to ~~provide,~~Japan. South ~~such~~Korea asis ~~reducing~~another ~~labor~~significant ~~costs~~market ~~and workplace~~for ~~injuries~~U.S. ~~associated with slicing~~ beef, ~~reducing food safety risks~~ and ~~shifting~~ ~~the~~we ~~square~~believe ~~footage~~we ~~currently~~can ~~used~~leverage byour ~~“back-of-the-store”~~existing ~~portioning and~~relationships ~~packaging~~ to ~~higher~~grow ~~profit uses. In addition to beef products,~~ our ~~value-added initiatives also include our wet blue tanning~~ business there. WeAlthough ~~are in~~ the ~~process~~margins ofwe ~~expanding~~realize ~~our~~on ~~tanning operation,~~export ~~which~~sales iscan ~~expected~~vary tosignificantly beby ~~completed~~product inand ~~2012. When~~market, ~~the~~on ~~project~~average ~~is complete,~~ we ~~expect~~currently torealize ~~be able~~higher tomargins ~~process~~on ~~nearly~~export ~~all~~sales ofthan ~~the~~on ~~hides~~domestic ~~we produce at our Kansas beef processing plants~~sales.

~~Pursue~~Maintain ~~Additional~~Highly ~~Export~~Disciplined ~~Opportunities.~~Approach Weto ~~believe international~~Acquisitions ~~markets present a significant growth~~ and ~~profit~~Capital ~~opportunity for us~~Expenditures. WeOur ~~believe~~management ~~protein~~team ~~demand~~has ~~will~~a ~~increase~~history inof ~~the~~following ~~long~~a ~~term~~disciplined ~~due~~approach to ~~rising living~~capital ~~standards~~investment. ~~and~~We ahave ~~growing~~effectively ~~middle~~executed ~~class~~and inintegrated ~~developing~~several ~~countries.~~acquisitions Asin ~~a leading~~core ~~producer~~and ofcomplementary ~~beef products~~businesses, weas ~~believe we are~~ well~~-positioned~~ toas ~~serve this~~numerous ~~growing~~capital ~~global~~expenditure ~~demand~~initiatives. ~~According~~ ~~to export~~We ~~data~~believe ~~from~~the ~~PIERS,~~success weof ~~are~~these ~~currently~~activities ~~the~~is ~~largest~~reflected ~~exporter~~in ofour ~~chilled~~rates ~~beef produced~~of inreturn ~~the~~on Uinvested capital.S. We plan to ~~Japan. South Korea~~continue isto ~~another~~pursue ~~significant~~opportunities ~~market~~that ~~for~~generate ~~U.S.~~attractive ~~beef,~~returns ~~and~~on invested capital.

6Continuing Focus on Margin Expansion. Our operating philosophy is to seek to maximize our profit on all cattle we process regardless of prevailing commodity prices or stage of the cattle cycle. We endeavor to accomplish this through management actions, such as reduction of operating costs, increasing price realization across the entire carcass and improving product yields. We believe our proprietary management information systems allow us to more accurately measure our costs and yields against relevant benchmarks and to make better processing decisions with respect to the cattle we procure in order to increase our profitability.

~~Table~~Industry ~~of Contents~~Overview

weBeef ~~believe~~products werepresent ~~can~~the ~~leverage our~~largest ~~existing~~segment ~~relationships~~of tothe ~~grow~~U.S. ~~our~~meat ~~business~~industry ~~there~~based on retail sales and the U.S. ~~Although~~is the ~~margins~~largest ~~we realize~~producer onof ~~export~~beef ~~sales~~in ~~can~~the ~~vary~~world, ~~significantly~~producing byapproximately ~~product~~26.4 ~~and~~billion ~~market~~pounds of beef in calendar 2010. According to the USDA, ~~on average~~beef weconsumption ~~currently~~in ~~realize~~the ~~higher~~United ~~margins~~States onincreased ~~export~~from ~~sales~~approximately ~~than~~24.3 onbillion ~~domestic sales~~pounds in 1992 to approximately 26.4 billion pounds in calendar 2010, representing a compound annual growth rate of 0.5%.

~~Maintain~~Beef ~~Highly~~production, ~~Disciplined~~from ~~Approach~~the tobirth ~~Acquisitions~~of ~~and Capital~~the ~~Expenditures.~~animal ~~Our~~through ~~management~~the ~~team~~delivery ~~has a history~~ of ~~following~~ abeef ~~disciplined~~products ~~approach~~ to ~~capital~~the ~~investment.~~end ~~We have effectively executed and integrated several acquisitions in core and complementary businesses~~customer, ~~as well as numerous capital expenditure initiatives. We believe the success of these activities~~ is ~~reflected~~comprised ~~in our rates~~ of ~~return on invested capital. We plan to continue to pursue opportunities that generate attractive returns on invested capital.~~

Continuing Focus on Margin Expansion. Our operating philosophy is to seek to maximize our profit on all cattle we process regardless of prevailing commodity prices or stage of the cattle cycle. We endeavor to accomplish this through management actions, such as reduction of operating costs, increasing price realization across the entire carcass and improving product yields. We believe our proprietary management information systems allow us to more accurately measure our costs and yields against relevant benchmarks and to make better processing decisions with respect to the cattle we procure in order to increase our profitability.6

~~Industry Overview~~Table of Contents

~~Beef~~two ~~products~~primary ~~represent~~segments: ~~the largest~~production and processing. The production segment ofraises ~~the~~cattle ~~U.S.~~for ~~meat~~slaughter ~~industry~~and ~~based~~the onprocessing ~~retail~~segment ~~sales~~slaughters cattle and ~~the~~packages Ubeef for delivery to customers.S. Beef ~~is the~~processors ~~largest~~seek ~~producer~~to ofprocure ~~beef~~cattle inthrough ~~the~~multiple ~~world~~methods, ~~producing~~including ~~approximately~~spot ~~25.4~~market ~~billion pounds~~purchases ofand ~~beef~~a invariety ~~calendar~~of ~~2009~~contractual arrangements. ~~According~~The toowners of the ~~USDA,~~cattle ~~beef~~bear ~~consumption~~the incost of feeding the ~~United~~ ~~States~~cattle ~~increased~~to ~~from~~the ~~approximately~~appropriate ~~24.3~~market ~~billion~~weights ~~pounds~~and inhave ~~1992~~direct financial exposure to ~~approximately~~ 26the volatility in grain and other input costs.9 ~~billion~~Beef ~~pounds~~processors inare ~~calendar~~primarily ~~2009~~“spread” operators, ~~representing~~earning amargin ~~compound annual~~between ~~growth~~the ~~rate~~price they realize for their products and the cost of 0procuring and processing the cattle.~~6%.~~

~~Beef~~The ~~production,~~domestic ~~from~~beef ~~the birth~~industry ofis ~~the~~characterized ~~animal~~by ~~through~~prices ~~the~~that ~~delivery~~change ofdaily ~~beef~~based ~~products~~on toseasonal ~~the~~consumption ~~end~~patterns ~~customer, is~~and ~~comprised~~overall ofsupply ~~two~~and ~~primary~~demand ~~segments:~~for ~~production~~beef and ~~processing. The~~other ~~production~~proteins ~~segment~~in ~~raises~~the ~~cattle~~U.S. ~~for slaughter~~and abroad. In general, domestic and ~~the~~worldwide ~~processing~~consumer ~~segment~~demand ~~slaughters~~for ~~cattle~~beef ~~and~~products ~~packages~~determines beef ~~for delivery~~processors’ tolong-term ~~customers~~demand for cattle. ~~Beef~~In order to operate profitably, beef processors seek to ~~procure~~acquire cattle ~~through~~at ~~multiple~~the ~~methods,~~lowest ~~including~~possible ~~spot~~cost ~~market purchases~~and to minimize processing costs by optimizing plant utilization and aminimizing ~~variety~~the cost of ~~contractual~~packaging ~~arrangements~~and other input costs. Cattle ~~The~~prices ~~owners~~vary ofseasonally ~~the~~and are affected by cattle ~~bear~~ inventory levels, weather and other factors. In addition to seasonal factors, cattle prices are impacted by the ~~cost~~longer ofterm ~~feeding~~nature of the cattle tocycle. Cattle supply in the ~~appropriate~~beef ~~market~~industry ~~weights~~typically ~~and~~follows ~~have direct~~a ~~financial~~ten ~~exposure~~to twelve year cycle, consisting of about six to ~~the~~seven ~~volatility~~years inof ~~grain~~expansion followed by one to two years of consolidation and ~~other~~three ~~input~~to ~~costs~~four years of contraction. ~~Beef~~ ~~processors~~This ~~are~~cycle ~~primarily~~is ~~“spread”~~unique ~~operators,~~to ~~earning~~cattle ~~margin~~among ~~between~~major ~~the price~~protein ~~they~~sources ~~realize~~as ~~for~~other ~~their~~animals ~~products~~(such as hogs and ~~the~~chickens) ~~cost~~can ofgenerate ~~procuring~~multiple offspring and ~~processing the~~have ~~cattle~~shorter incubation periods.

~~The~~During ~~domestic~~the ~~beef~~past ~~industry is~~few ~~characterized~~decades, byconsumer ~~prices that change daily based on seasonal consumption patterns and overall supply and~~ demand for beef ~~and~~products ~~other proteins~~ in the U.S. ~~and~~ ~~abroad. In~~has ~~general,~~grown ~~domestic~~in ~~and worldwide~~line ~~consumer~~with ~~demand~~population ~~for~~growth, ~~beef~~which ~~products~~is ~~determines~~a ~~beef~~key ~~processors’ long-term~~driver ~~demand~~of ~~for~~aggregate ~~cattle~~demand. InWe ~~order~~believe ~~to operate~~consumer ~~profitably,~~demand ~~beef~~for ~~processors~~U.S. ~~seek~~exports toin ~~acquire~~international ~~cattle~~markets atis ~~the~~driven ~~lowest possible~~not ~~cost~~only ~~and~~by topopulation ~~minimize~~growth, ~~processing~~but ~~costs~~also by ~~optimizing~~economic ~~plant utilization and minimizing the cost of packaging and other input costs~~growth. ~~Cattle~~ ~~prices~~As ~~vary~~international ~~seasonally~~consumers’ ~~and~~economic ~~are affected~~circumstances byimprove, ~~cattle~~they ~~inventory~~increasingly ~~levels,~~shift ~~weather~~their ~~and~~diets ~~other~~to ~~factors~~protein. InThe ~~addition~~ability toof ~~seasonal~~the ~~factors,~~U.S. ~~cattle prices~~beef ~~are~~industry ~~impacted~~to bysupply the ~~longer~~growing ~~term~~international ~~nature~~demand ofhas ~~the~~been ~~cattle~~hindered ~~cycle. Cattle~~in ~~supply~~certain ininternational ~~the~~markets ~~beef~~following ~~industry~~the ~~typically follows~~discovery ain ~~ten~~2003 toand ~~twelve~~2004 ~~year~~of ~~cycle,~~isolated ~~consisting~~cases of ~~about~~Bovine ~~six~~Spongiform toEncephalopathy, ~~seven~~or ~~years~~BSE ~~of expansion~~(also ~~followed~~commonly byreferred ~~one~~ to ~~two~~as ~~years~~mad ofcow ~~consolidation~~disease), ~~and~~which ~~three~~resulted toin ~~four~~the ~~years of~~temporary ~~contraction.~~closing ~~This~~of ~~cycle~~those ismarkets ~~unique~~ to ~~cattle~~U.S. ~~among~~beef. Industry-wide ~~major~~export ~~protein~~sales, ~~sources~~however, ~~as other~~have ~~animals~~been ~~(such~~increasing asfrom ~~hogs~~2004 ~~and~~through ~~chickens)~~mid-2010, ~~can~~trending ~~generate~~toward ~~multiple~~their ~~offspring~~pre-2003 ~~and have shorter incubation periods~~levels.

~~During the~~In ~~past~~recent ~~few decades~~years, ~~consumer~~one ~~demand for beef products in the~~ U.S. ~~has~~beef ~~grown in~~processor ~~line~~eliminated ~~with~~approximately ~~population~~two ~~growth,~~million ~~which~~head isper ayear ~~key driver~~ of ~~aggregate~~slaughter ~~demand. We~~capacity ~~believe consumer demand for U.S. exports~~ in ~~international~~four ~~markets is driven not only by population growth, but also by economic growth~~plants. These Aseliminations ~~international~~represented ~~consumers’~~a ~~economic~~reduction ~~circumstances~~of ~~improve, they~~approximately ~~increasingly~~7% ~~shift their diets to protein. The ability~~ of ~~the~~total U.S. ~~beef~~ industry-wide tocapacity ~~supply~~based ~~the~~on ~~growing international~~information ~~demand~~from ~~has~~Cattle ~~been~~Buyers ~~hindered in certain international markets following the discovery of isolated cases of Bovine Spongiform Encephalopathy~~Weekly, or ~~BSE~~an ~~(also~~industry ~~commonly referred to as mad cow disease)~~publication, ~~in 2003~~ and ~~2004,~~have ~~that resulted~~helped inimprove the ~~temporary~~supply/demand ~~closing~~balance of ~~those~~beef ~~markets~~in tothe U.S. ~~beef~~and export markets. ~~Industry-wide~~We ~~export~~currently ~~sales,~~do ~~however,~~not ~~have been~~expect ~~increasing~~the ~~from~~industry ~~2004~~to ~~through~~experience ~~mid-2010,~~a ~~trending~~material ~~toward~~increase ~~their~~in ~~pre-2003 levels~~capacity for the foreseeable future.

~~In recent~~Our ~~years,~~Business one U.S. beef processor eliminated approximately two million head per year of slaughter capacity in four plants. These eliminations represented a reduction of approximately 7% of total U.S. industry-wide Segments

The Company reports in two business segments: Core Beef and Other. The Company measures segment profit as operating income. Financial information about those segments may be found in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

~~Table~~Core ~~of Contents~~Beef

~~capacity based on information from Cattle Buyers Weekly~~Products, anSales ~~industry publication,~~ and have helped improve the supply/demand balance of beef in the U.S. and export markets. We currently do not expect the industry to experience a material increase in capacity for the foreseeable future.Marketing

~~Our Business~~The ~~Segments~~majority of our revenues are generated from the sale of fresh meat either as a boxed beef product or a case-ready product. Boxed beef and case-ready products accounted for approximately 89% of our revenues in fiscal 2011. In addition, we sell beef by-products to the variety meat, feed processing, fertilizer and pet food industries. We also supply cattle hides, including hides further processed by our subsidiary National Beef Leathers, LLC, or NBL, to tanners who primarily supply the automotive, luxury goods, apparel and furniture industries for both domestic and international use. The seasonal demand for beef products is generally highest in the summer and spring months as weather patterns permit more outdoor activities and there is an increased demand for higher value items that are grilled, such as steaks. As a result, boxed beef prices tend to be at seasonal highs during the summer and spring.

~~The Company~~We ~~reports~~emphasize inthe ~~two~~sale ~~business~~of ~~segments: Core~~higher-margin, branded beef products, and we market these products under several brand names including Black Canyon® Angus Beef, Black Canyon® Premium Reserve, Certified Premium Beef®, Naturewell® Natural Beef, NatureSource® Natural Angus Beef, Vintage Natural Beef®, and ~~Other~~Imperial Valley® Premium Beef. ~~The~~In ~~Company measures~~addition ~~segment~~to ~~profit~~the asbrands ~~operating~~we ~~income. Financial~~own, ~~information~~we ~~about~~also ~~those~~market ~~segments~~value-added ~~may~~products beunder ~~found~~the infollowing ~~Item~~registered 7trademarks pursuant to license agreements: Certified Angus Beef®, ~~Management’s~~a ~~Discussion~~registered ~~and~~trademark ~~Analysis~~of Certified Angus Beef LLC, a wholly-owned subsidiary of ~~Financial~~the ~~Condition~~American Angus Association; and ~~Results~~ Certified Hereford Beef® and Nuestro Rancho®, registered trademarks of ~~Operations~~Certified Hereford Beef, LLC.

~~Core Beef~~7

~~Products,~~Table ~~Sales~~of ~~and Marketing~~Contents

~~The majority~~We ofcontinue ~~our~~to ~~revenues~~focus ~~are~~on ~~generated~~adding ~~from~~further ~~the~~processing, ~~sale~~specialized ofcutting, ~~fresh~~packaging ~~meat~~and ~~either~~other ~~as a boxed beef product or a case~~value-~~ready~~added ~~product.~~components ~~Boxed~~to ~~beef~~our ~~and case-ready~~ products ~~accounted~~ ~~for~~that ~~approximately~~generate ~~87%~~higher ~~of our revenues in fiscal year 2010~~profitability. In ~~addition~~2001, we ~~sell~~opened ~~beef~~two bystate-~~products to~~ of-the ~~variety~~-art ~~meat,~~case-ready ~~feed processing~~facilities, ~~fertilizer~~which ~~and~~enabled ~~pet~~us ~~food~~to ~~industries.~~expand Wemargins ~~also supply cattle hides, including hides further processed~~ by ~~our~~producing ~~subsidiary~~additional ~~National~~quantities ~~Beef Leathers,~~of ~~LLC,~~value-added orproducts ~~NBL,~~using ~~to tanners who primarily supply~~ the ~~automotive,~~beef ~~luxury goods,~~we ~~apparel~~process. ~~and~~Our ~~furniture~~case-ready ~~industries~~operations ~~for~~further ~~both~~process ~~domestic~~our ~~and~~boxed ~~international use. The seasonal demand for~~ beef products isby ~~generally~~trimming ~~highest in the summer~~ and ~~spring~~cutting ~~months~~our asproducts ~~weather~~into ~~patterns~~individual ~~permit~~portions. ~~more~~These ~~outdoor~~portions ~~activities and there is an increased demand for higher value items that~~ are ~~grilled,~~then ~~such~~packaged ~~as steaks. As~~to aincrease ~~result,~~the ~~boxed~~shelf ~~beef~~life ~~prices tend~~of tothese beproducts atversus ~~seasonal~~traditional ~~highs~~packaging ~~during the summer and spring~~methods.

~~We emphasize~~Our ~~the~~wet ~~sale~~blue oftanning ~~higher-margin,~~facility ~~branded~~(acquired ~~beef~~in ~~products,~~2009) ~~and~~sells weprocessed ~~market~~hides ~~these products~~to ~~under~~tanners ~~several~~that ~~brand~~produce ~~names~~finished ~~including~~leather ~~Black Canyon®~~for ~~Angus~~high ~~Beef,~~quality ~~Black~~applications ~~Canyon®~~in ~~Premium~~industries ~~Reserve,~~such ~~Certified~~as ~~Premium Beef®~~automotive, ~~Naturewell®~~ ~~Natural~~luxury ~~Beef~~goods, ~~NatureSource®~~apparel ~~Natural Angus Beef, Vintage Natural Beef®,~~ and ~~Imperial Valley® Premium Beef~~furniture. InWet ~~addition~~blue tanning refers to the ~~brands~~ wefirst ~~own,~~step ~~also~~in ~~part~~further ofprocessing ~~our~~raw ~~value~~and brine-~~added~~cured ~~product~~hides ~~line~~into istanned ~~Certified~~leather. The ~~Angus~~name ~~Beef®,~~is aderived ~~registered~~from ~~trademark~~the ~~(used~~process ~~with permission)~~that ofresults ~~Certified~~in ~~Angus Beef LLC, a wholly-owned subsidiary of~~ the ~~American~~ ~~Angus~~further ~~Association;~~processed ~~and~~hides ~~Certified~~having ~~Hereford~~a ~~Beef® and~~blue ~~Nuestro Rancho®, registered trademarks (used with permission) of Certified Hereford Beef, LLC~~coloring.

~~We continue~~During tofiscal ~~focus on adding further processing~~2011, ~~specialized~~we ~~cutting,~~sold ~~packaging and other value-added components to~~ our beef products ~~that generate higher profitability. In 2001, we opened two state-of-the-art case-ready facilities, which enabled us~~ to ~~expand~~more ~~margins~~than by900 ~~producing additional~~customers ~~quantities~~located ofin ~~value-added products using~~ the ~~beef we process~~U.S. ~~Our case-ready operations further process our boxed beef products by trimming~~ and ~~cutting~~ ~~our~~more ~~products~~than ~~into~~30 ~~individual~~foreign ~~portions~~countries. ~~These~~We ~~portions~~market ~~are~~our ~~then~~beef ~~packaged to increase the shelf-life of these~~ products ~~versus~~through ~~traditional~~several ~~packaging methods.~~channels, including:

~~Our~~• ~~wet~~national ~~blue~~and ~~tanning facility~~regional ~~(acquired~~retailers, inincluding ~~2009)~~supermarket ~~sells~~chains, ~~processed~~independent ~~hides~~grocers, toclub ~~tanners~~stores, ~~that~~wholesalers ~~produce finished~~and ~~leather~~distributors ~~for high quality applications in industries~~ such as ~~automotive~~ Publix, ~~luxury~~Winn ~~goods~~Dixie, ~~apparel~~Kroger, ~~and~~Sam's ~~furniture. Wet~~Club, ~~blue~~Costco, ~~tanning~~C&S ~~refers~~Grocers, toAssociated ~~the~~Wholesale ~~first~~Grocers, ~~step~~Porky ~~in further~~Products ~~processing raw~~ and ~~brine-cured~~Sherwood ~~hides into tanned leather. The name is derived from the process which results in the further processed hides having a blue coloring.~~Foods;

~~During fiscal~~• ~~year~~national ~~2010,~~retailers wesuch ~~sold~~as ~~our beef products to more than 1~~Wal-Mart,~~100~~ ~~customers located~~who inpurchase ~~the~~a ~~U.S.~~substantial ~~and~~portion ~~more~~of ~~than 25 foreign countries. We market~~ our ~~beef products~~case-ready ~~through~~and ~~several~~branded ~~channels, including:~~products;

~~· national~~• ~~and regional~~the ~~retailers~~food service industry, including ~~supermarket~~food ~~chains,~~service ~~independent grocers~~distributors, ~~club stores~~hotel chains and ~~wholesale~~other ~~distributors~~institutional customers such as ~~C&S Grocers~~Sysco, ~~Topco,~~U.S. ~~Associated Wholesale~~Foodservice ~~Grocers,~~and ~~Sam’s~~Food ~~Club,~~Services ~~and~~of ~~Sherwood Foods~~America;

~~· national retailers~~• ~~such~~further asprocessors, ~~Wal~~including Oscar-~~Mart~~Mayer, ~~who~~Sara ~~purchase~~Lee ~~a substantial portion of our case-ready~~ and ~~branded products~~ConAgra;

8• the United States military; and

~~Table~~• ~~of Contents~~international markets, including Mexico, Japan, South Korea, Canada, China (for hides), Hong Kong, Egypt and Taiwan.

· Exports to Mexico and a number of other foreign markets have been limited to boxed beef products from cattle younger than 30 months subsequent to the ~~food service~~December 23, ~~industry~~2003 discovery of a single case of BSE in Washington state. Many international importers, ~~including~~such ~~food~~as ~~service~~Japan ~~distributors~~and South Korea (who were two of our largest export markets for edible beef products in fiscal year 2003), ~~hotel~~closed ~~chains~~their borders to U.S. edible beef products after this report of BSE. In July 2006, Japan agreed to reopen its market to U.S. beef from cattle 20 months and ~~other institutional~~younger. In ~~customers~~September 2006, ~~such~~South Korea announced it would resume the importation of U.S. boneless beef from cattle less than 30 months of age. South Korea has closed its borders to U.S. beef from time to time as ~~Sysco,~~a result of alleged findings of products shipped to South Korea by U.S. ~~Foodservice~~export businesses that are not allowed by South Korea. Additional information regarding the Company’s export sales and ~~Food~~long-lived ~~Services~~assets in foreign markets is set forth in Note 13, Business Segments of ~~America;~~ the notes to the consolidated financial statements in Item 8.

~~· further processors,~~The ~~including~~sales ~~Oscar-Mayer~~office for domestic operations is located in our headquarters building in Kansas City, ~~Sara~~Missouri. Our ~~Lee~~sales team in this office is responsible for selling and ~~ConAgra;~~coordinating the movement of approximately 50.6 million pounds of boxed beef products per week to our customers nationwide. This centralized sales concept allows us to respond quickly to customer requests for pricing and load information. We have also integrated the satellite tracking capabilities of refrigerated carriers into our website allowing customers to track shipments in process. While providing significant customer advantages, our centralized sales concept also enables our sales force to share key market intelligence in a manner that allows them to react to changing market conditions in an efficient manner.

· The sales office for international operations is located in Chicago, Illinois. This office coordinates all aspects of sales, pricing and shipping to all destinations outside of the United States. ~~military;~~We also have three satellite offices in Japan, South Korea and China (for hides) that assist in the coordination of sales in those regions. Historically, two of our largest international markets for edible beef products have been in Japan and South Korea while our largest international market for hides has been in China.

~~· international markets,~~Our ~~including~~marketing ~~Mexico,~~efforts ~~Japan,~~include ~~South~~engaging ~~Korea,~~in ~~Canada,~~business-to-business ~~China~~programming (and communications to create preferences for ~~hides)~~our products among our customers. In addition, ~~Hong Kong~~we support our value-added, ~~Egypt~~branded beef business through in-store merchandising and ~~Taiwan~~feature advertising support.

Exports to Mexico and a number of other foreign markets have been limited to boxed beef products from cattle younger than 30 months subsequent to the December 23, 2003 discovery of a single case of BSE in Washington state. Many international importers, such as Japan and South Korea (who were two of our largest export markets for edible beef products in fiscal year 2003), closed their borders to U.S. edible beef products after this report of BSE. In July 2006, Japan agreed to reopen its market to U.S. beef from cattle 20 months and younger. In September 2006, South Korea announced it would resume the importation of U.S. boneless beef from cattle less than 30 months of age. South Korea has closed its borders to U.S. beef from time-to-time as a result of alleged findings of products shipped to South Korea by U.S. export businesses that are not allowed by South Korea. Additional information regarding the Company’s export sales and long-lived assets in foreign markets is set forth in Note 13, Business Segments of the notes to the consolidated financial statements in Item 8.

~~The sales~~Table ~~office for domestic operations is located in our headquarters building in Kansas City, Missouri. Our sales team in this office is responsible for selling and coordinating the movement~~ of ~~approximately~~ 47.8 million pounds of boxed beef products per week to our customers nationwide. This centralized sales concept allows us to respond quickly to customer requests for pricing and load information. We have also integrated the satellite tracking capabilities of refrigerated carriers into our website allowing customers to track shipments in process. While providing significant customer advantages, our centralized sales concept also enables our sales force to share key market intelligence in a manner that allows them to react to changing market conditions in an efficient manner.Contents

~~The sales~~Raw ~~office~~Materials ~~for international operations is located in Chicago, Illinois. This office coordinates all aspects of sales, pricing~~ and shipping to all destinations outside of the United States. We also have three satellite offices in Japan, South Korea and China (for hides) that assist in the coordination of sales in those regions. Historically, two of our largest international markets for edible beef products have been in Japan and South Korea while our largest international market for hides has been in China.Procurement

Our ~~marketing~~ ~~efforts~~primary ~~include~~raw ~~engaging~~material infor ~~business-to-business~~our ~~programming~~processing ~~and communications~~plants tois ~~create~~live ~~preferences~~cattle. Seasonal factors affect the price we pay for ~~our~~livestock, ~~products~~with ~~among~~live ~~our~~cattle ~~customers~~prices tending to be at seasonal highs during the summer and fall. Because ~~In addition~~of higher consumption, wemore ~~support~~favorable ~~our~~growing ~~value-added~~conditions and the housing of animals in feedlots for the winter months, ~~branded~~there ~~beef~~are ~~business~~generally ~~through~~more cattle available in~~-store merchandising~~ ~~and~~the ~~feature~~summer ~~advertising~~and ~~support~~fall.

~~Raw~~During ~~Materials~~fiscal 2011, we obtained approximately 20% of the cattle we processed from USPB members using the USPB pricing grid pursuant to our contractual arrangement with USPB. During fiscal 2010 and ~~Procurement~~2009, we obtained approximately 20% and 19%, respectively, of the cattle we processed from USPB members using the USPB pricing grid. Our arrangement with USPB provides us with a consistent supply of high-quality cattle. For information regarding this agreement, see Item 13, Certain Relationships and Related Transactions and Note 9, Related Party Transactions to our consolidated financial statements in Item 8. We purchase cattle through cash bids and other arrangements from cattle producers in our primary and secondary markets. In addition to our arrangement with USPB, we have other, non-affiliated supplier arrangements that provide us with high-quality cattle. We believe we are a first choice processor for suppliers seeking to attain premium pricing for their high-quality cattle and cattle suppliers view us more favorably than our competitors due to our business model, which emphasizes building relationships and cooperating with suppliers and paying a premium for high-quality cattle. During fiscal 2011, we had approximately 1,000 suppliers provide us with cattle. We believe our relationships with USPB members and other suppliers have resulted in such suppliers improving their methods to produce more high-quality cattle and sell more of their high-quality cattle to us.

~~Our primary~~Each ~~raw~~cattle ~~material~~supplier ~~for~~must ~~our~~verify ~~processing~~its ~~plants~~use isof ~~live~~antibiotics ~~cattle.~~or ~~Seasonal~~other ~~factors affect~~agricultural chemicals follows the ~~price~~manufacturer’s weintended ~~pay~~purpose. ~~for~~They ~~livestock~~must also confirm they use only Federal Drug Administration, or FDA-approved pharmaceutical compounds and comply with ~~live~~dosage and administrative standards. Furthermore, each cattle ~~prices~~supplier ~~tending~~must toconfirm bethey ~~at seasonal~~do ~~highs~~not ~~during~~use ~~the~~feed ~~summer~~containing ~~and~~animal-based ~~fall~~protein products. ~~Because~~ Many of ~~higher~~our ~~consumption,~~producers ~~more~~participate ~~favorable~~in ~~growing~~state ~~conditions~~beef quality assurance training programs and ~~the housing~~have ofestablished ~~animals~~certification inand ~~feedlots~~verification ~~for~~practices. These programs emphasize meeting and/or exceeding the ~~winter~~USDA, ~~months~~FDA and live animal Best Practice guidelines. Using guidelines established by National Cattleman’s Beef Association, ~~there~~or NCBA, beef safety and quality assurance programs are ~~generally~~administered ~~more cattle~~by ~~available~~various instate ~~the~~beef ~~summer~~associations. State associations certifying our suppliers include, among others, Texas Cattle Feeders Association, Kansas Livestock Association, California Cattlemen Association, Arizona Cattle Feeders Association and ~~fall~~Nebraska Cattlemen’s Association.

~~During fiscal~~Processing ~~year~~Facilities ~~2010, we obtained approximately 20% of the cattle we processed from USPB members using the USPB pricing grid pursuant to our contractual arrangement with USPB. During fiscal years 2009~~ and 2008, we obtained approximately 20% and 19%, respectively, of the cattle we processed from USPB members using the USPB pricing grid. Our arrangement with USPB provides us with a consistent supply of high-quality cattle. For information regarding this agreement, see Item 13, Certain Relationships and Related Transactions and Note 9, Related Party Transactions to our consolidated financial statements in Item 8. We purchase cattle through cash bids and other arrangements from cattle producers in our primary and secondary markets. In addition to our arrangement with USPB, we have other, non-affiliated supplier arrangements that provide us with high-quality cattle. We believe we are a first choice processor for suppliers seeking to attain premium pricing for their high-quality cattle and cattle suppliers view us more favorably than our competitors due to our business model, which emphasizes building Operations

9We operate a total of five beef processing facilities in the U.S. Our Liberal, Kansas and Dodge City, Kansas facilities are among the largest in the industry and are geographically positioned near our suppliers to efficiently source raw materials by reducing transportation costs. Our Brawley, California facility is among the newest in the industry, and geographically positioned to give us greater access to customers in the Western U.S. and Asia. Our case-ready facilities in Hummels Wharf, Pennsylvania and Moultrie, Georgia are located in close proximity to key customers in high density population centers in the Eastern U.S. resulting in decreased delivery times. Our case-ready facilities are also located in areas with a highly-skilled and cost-effective labor force. Our wet blue tanning facility is located in St. Joseph, Missouri. This facility is located in relative proximity to our two Kansas beef processing facilities and is at the junction of major transportation routes. We have begun and continue to invest in this recently acquired facility to improve its production capabilities and better align it to serve our expanded ongoing hide processing capacity needs. See Item 2, Properties for further information about these facilities.

~~Table~~Cattle delivered to our facilities are generally processed into beef products within 36 hours after arrival. On average, in a typical week, approximately 87% of ~~Contents~~ the boxed beef expected to be produced from the cattle we process is committed to sale before the cattle are delivered to our facilities. Our facilities utilize modern, highly automated equipment to process and package beef products. We have invested more than $478.2 million from the beginning of fiscal year 2001 through the end of fiscal 2011 to expand our operations, modernize and increase the capacity of our facilities and increase our ability to produce and sell higher margin, value-added products. The design of our facilities emphasizes worker safety to ensure compliance with all regulations and to reduce worker injury and turnover. Additionally, we have placed a substantial amount of ammonia piping on the roof versus in the production areas, not in response to regulatory requirements, but in the interest of worker safety. These and other changes designed the workplace to better fit our employees. All expansions are reviewed by internal personnel, including our Corporate Environmental Director, Vice President of Safety, Vice President of Technical Services, Vice President of Engineering and Corporate Project Engineer, for regulatory compliance prior to construction. Our facilities are also intended to reduce waste products and emissions and dispose of waste in accordance with applicable environmental standards.

~~relationships and cooperating with suppliers and paying a premium for high-quality cattle. During fiscal year 2010, we had approximately 1,000 suppliers provide us with cattle.~~ We ~~believe~~distribute our ~~relationships~~ ~~with~~beef ~~USPB~~products ~~members~~domestically ~~and~~directly ~~other~~from ~~suppliers~~our ~~have~~processing ~~resulted~~facilities ~~in such suppliers improving their methods to produce more high-quality cattle~~ and ~~sell more of their high~~case-~~quality~~ready ~~cattle~~facilities. toWe ~~us.~~utilize

Each cattle supplier must verify its use of antibiotics or other agricultural chemicals follows the manufacturer’s intended purpose. They must also confirm they use only Federal Drug Administration, or FDA-approved pharmaceutical compounds and comply with dosage and administrative standards. Furthermore, each cattle supplier must confirm they do not use feed containing animal-based protein products. Many of our producers participate in state beef quality assurance training programs and have established certification and verification practices. These programs emphasize meeting and/or exceeding the USDA, FDA and live animal Best Practice guidelines. Using guidelines established by National Cattleman’s Beef Association, or NCBA, beef safety and quality assurance programs are administered by various state beef associations. State associations certifying our suppliers include, among others, Texas Cattle Feeders Association, Kansas Livestock Association, California Cattlemen Association, Arizona Cattle Feeders Association and Nebraska Cattlemen’s Association.9

~~Processing~~Table ~~Facilities~~of ~~and Operations~~Contents

~~We operate a total of five beef processing facilities in the U.S. Our Liberal, Kansas and Dodge City, Kansas facilities are among the largest in the industry and are geographically positioned near~~ our ~~suppliers~~subsidiary toNational ~~efficiently~~Carriers ~~source raw materials by reducing transportation costs. Our Brawley, California facility is among the newest in the industry,~~ and ~~geographically~~third ~~positioned~~party tocarriers ~~give us greater access~~ to ~~customers~~ indeliver the Western U.S. and Asia. Our case-ready facilities in Hummels Wharf, Pennsylvania and Moultrie, Georgia are located in close proximity to key customers in high density population centers in the Eastern U.S. resulting in decreased delivery times. Our case-ready facilities are also located in areas with a highly-skilled and cost-effective labor force. Our wet blue tanning facility is located in St. Joseph, Missouri. This facility is located in relative proximity to our ~~two~~products ~~Kansas beef processing facilities and is at the junction of major transportation routes. We have begun and continue~~ to ~~invest in this recently acquired facility to improve its production capabilities and better align it to serve~~ our ~~expanded ongoing hide processing capacity needs~~customers. ~~See Item 2, Properties for further information about these facilities.~~

Cattle delivered to our facilities are generally processed into beef products within 36 hours after arrival. On average, in a typical week, approximately 87% of the boxed beef expected to be produced from the cattle we process is committed to sale before the cattle are delivered to our facilities. Our facilities utilize modern, highly automated equipment to process and package beef products. We have invested more than $410 million from the beginning of fiscal year 2001 through the end of fiscal 2010 to expand our operations, modernize and increase the capacity of our facilities and increase our ability to produce and sell higher margin, value-added products. The design of our facilities emphasizes worker safety to ensure compliance with all regulations and to reduce worker injury and turnover. Additionally, we have placed a substantial amount of ammonia piping on the roof versus in the production areas, not in response to regulatory requirements, but in the interest of worker safety. These and other changes designed the workplace to better fit our employees. All expansions are reviewed by internal personnel, including our Corporate Environmental Director, Vice President of Safety, Vice President of Technical Services, Vice President of Engineering and Corporate Project Engineer, for regulatory compliance prior to construction. Our facilities are also intended to reduce waste products and emissions and dispose of waste in accordance with applicable environmental standards.Other

~~We distribute~~Products, ~~our~~Sales ~~beef products domestically directly from our processing facilities~~ and ~~case-ready facilities. We utilize our subsidiary National Carriers and third party carriers to deliver our products to our customers.~~Marketing

~~Other~~We also sell value-added beef products through our portion control business, Kansas City Steak. Kansas City Steak provides premium-quality trimmed and cut individual portions both directly to customers in the food service and retail channels as well as direct to consumers through the internet, direct mail and QVC. National Carriers currently operates approximately 1,200 refrigerated and livestock trailers. NBP contracts substantially all of its in-bound and approximately 26% of its out-bound freight services from National Carriers. In February 2008, we began providing third-party logistics services to the transportation industry through our wholly-owned subsidiary National Elite Transportation, LLC, or National Elite. Logistics services involve arranging for another company to transport freight for our customers to reduce overall transportation costs while we retain the billing, collection and customer management responsibilities. We believe these transportation services enable us to provide superior customer service and enhance our ability to be a consistent, reliable and timely supplier, particularly of our value-added products.

~~Products,~~Raw ~~Sales~~Materials and ~~Marketing~~Procurement

~~We also~~The ~~sell~~primary ~~value-added~~raw material for our Kansas City Steak processing facility is boxed beef. Approximately ~~products~~27% of Kansas City Steak’s boxed beef purchases are made through ~~our~~contractual ~~portion~~agreements ~~control~~predetermined ~~business~~by the customer for whom the product is produced. These contractual agreements are typically one year in duration and stipulate from whom the boxed beef can be purchased. In fiscal 2011, approximately 46% of Kansas City Steak’s boxed beef was purchased from NBP. The balance of Kansas City Steak ~~provides~~’s ~~premium-quality~~raw ~~trimmed~~material ~~and~~is ~~cut~~purchased ~~individual~~at ~~portions~~our ~~both~~discretion ~~directly~~on ~~to customers~~the inopen ~~the~~market ~~food~~from ~~service~~primary and ~~retail~~secondary ~~channels~~suppliers aswith ~~well~~similar ~~as direct-to-consumers~~quality ~~through~~and ~~the~~yield ~~internet,~~grade ~~direct~~specifications ~~mail~~as ~~and~~required ~~QVC. National~~under ~~Carriers~~our contracts.

10Processing Facilities and Operations

~~Table~~Kansas City Steak processes trimmed and cut individual portions at a processing facility in Kansas City, Kansas. See Item 2, Properties for further information about this facility. National Carriers has offices located in Liberal, Kansas and Dodge City, Kansas, both of ~~Contents~~which are within close proximity to our beef processing facilities in those locations, enabling us to efficiently transport product thereby reducing transportation costs. National Carriers also has offices in Denison, Iowa, Springdale, Arkansas, and Dallas, Texas as well as administrative offices located in Kansas City, Missouri. National Elite has an office in Springdale, Arkansas.

currently operates approximately 1,200 refrigerated and livestock trailers. NBP contracts substantially all of its in-bound and approximately 23% of its out-bound freight services from National Carriers. In February 2008, we began providing third-party logistics services to the transportation industry through our wholly-owned subsidiary National Elite Transportation, LLC, or National Elite. Logistics services involve arranging for another company to transport freight for our customers to reduce overall transportation costs while we retain the billing, collection and customer management responsibilities. We believe these transportation services enable us to provide superior customer service and enhance our ability to be a consistent, reliable and timely supplier, particularly of our value-added products.Competition

~~Raw~~The ~~Materials~~beef processing industry is highly competitive. Competition exists both in the purchase of live cattle, as well as in the sale of beef products. Our products compete with a large number of other protein sources, including pork and ~~Procurement~~poultry, but our principal competition comes from other beef processors, including Tyson Foods, Inc., Cargill Incorporated, and JBS USA LLC. Management believes the principal competitive factors in the beef processing industry are price, quality, food safety, customer service, product distribution, technological innovations and brand loyalty. In particular, we focus on quality, food safety, customer service and the offering of value-added programs on an ongoing basis. Some of our competitors have substantially larger beef operations, greater financial and other resources and wider recognition for their consumer branded products than we do.

The primary raw material for our Kansas City Steak processing facility is boxed beef. Approximately 30% of Kansas City Steak’s boxed beef purchases are made through contractual agreements predetermined by the customer for whom the product is produced. These contractual agreements are typically one year in duration and stipulate from whom the boxed beef can be purchased. In fiscal year 2010, approximately 34% of Kansas City Steak’s boxed beef was purchased from NBP. The balance of Kansas City Steak’s raw material is purchased at our discretion on the open market from primary and secondary suppliers with similar quality and yield grade specifications as required under our contracts.Regulation

~~Processing~~Our ~~Facilities~~operations are subject to extensive regulation by the USDA, the Grain Inspection Packers and ~~Operations~~Stockyards Administration, or GIPSA, the FDA, the U.S. EPA and other state, local and foreign authorities regarding the processing, packaging, storage, distribution, advertising and labeling of our products, including food safety standards. Recently, the food safety practices and procedures in the beef processing industry have been subject to more intense scrutiny and oversight by the USDA. For example, on January 12, 2004, the Food Safety and Inspection Services, or FSIS, published an interim final rule on Specified Risk Materials, or SRMs, and requirements for non-ambulatory disabled cattle due to the finding of BSE in routine testing. We immediately implemented the appropriate programs/policies to ensure compliance with FSIS rules. FSIS published a final rule on July 13, 2007, making permanent the interim regulations issued in January 2004 that prohibits the slaughter of non-ambulatory disabled cattle, requires the description and removal of SRMs that are considered to be inedible, and restricts the use of captive bolt stunners that deliberately inject compressed air into the cranium of an animal. We work closely with the USDA and other regulatory agencies to help ensure our operations comply with all applicable food safety laws and regulations.

Kansas City Steak processes trimmed and cut individual portions at a processing facility in Kansas City, Kansas. See Item 2, Properties for further information about this facility. National Carriers has offices located in Liberal, Kansas and Dodge City, Kansas, both of which are within close proximity to our beef processing facilities in those locations, enabling us to efficiently transport product thereby reducing transportation costs. National Carriers also has offices in Denison, Iowa, Springdale, Arkansas, and Dallas, Texas as well as administrative offices located in Kansas City, Missouri. National Elite has an office in Springdale, Arkansas.10

~~Competition~~Table of Contents

~~The beef~~Our ~~processing~~domestic ~~industry~~operations isare ~~highly~~subject ~~competitive.~~to ~~Competition~~the ~~exists~~Packers ~~both~~and inStockyards ~~the purchase~~Act of ~~live cattle~~1921, asor ~~well~~PSA. asThis statute generally prohibits meat packers in the ~~sale~~livestock industry from engaging in certain practices including violations of ~~beef~~the ~~products~~PSA’s prompt payment provisions. ~~Our~~In ~~products compete~~general ~~with~~(unless aotherwise ~~large~~agreed ~~number~~in ofwriting ~~other~~by ~~protein~~our ~~sources~~livestock suppliers), ~~including~~this ~~pork~~statute ~~and poultry,~~requires ~~but~~us ~~our~~to ~~principal~~make ~~competition~~full ~~comes~~payment ~~from~~for ~~other~~our ~~beef~~livestock ~~processors, including~~purchases ~~Tyson~~in ~~Foods,~~the ~~Inc.,~~case ~~Cargill~~of ~~Incorporated,~~cash ~~and~~sales ~~JBS~~before ~~USA~~the ~~LLC. Management~~close ~~believes~~of the ~~principal~~next ~~competitive factors~~business inday following the ~~beef~~purchase ~~processing~~and ~~industry~~transfer ~~are~~of ~~price,~~possession ~~quality,~~of ~~food~~the ~~safety~~livestock we purchase, ~~customer~~ ~~service~~or, ~~product~~in ~~distribution,~~the ~~technological~~case ~~innovations~~of a cash purchase on a carcass or ‘‘grade and ~~brand loyalty. In~~yield’’ ~~particular~~basis, that we ~~focus~~make ~~on quality,~~full ~~food~~payment ~~safety,~~of ~~customer~~the ~~service~~purchase ~~and~~price not later than the ~~offering~~close of ~~value-added~~the ~~programs on~~first business day following determination of the purchase price. Any delay or attempt to delay payment as required by the PSA will be deemed an ~~ongoing~~unfair ~~basis~~practice in violation of the statute. ~~Some~~Under the PSA, we must hold in trust for the benefit of our ~~competitors~~unpaid ~~have~~livestock ~~substantially~~suppliers ~~larger~~all ~~beef operations,~~livestock ~~greater~~we ~~financial~~purchase ~~and~~in ~~other~~cash ~~resources~~sales ~~and~~(as ~~wider~~well ~~recognition~~as all inventories of, or receivables for ~~their~~ ~~consumer~~or ~~branded~~proceeds from, meat, meat food products ~~than~~or welivestock doproducts derived from these cash sales) until the sellers have received full payment. As of August 27, 2011, NBP LLC has secured a bond of $35.9 million to satisfy these requirements.

~~Regulation~~On June 22, 2010, GIPSA published a proposed rule that would add new regulations under the PSA. Among other things, the proposed rule would eliminate the requirement that GIPSA or livestock producers demonstrate competitive harm to prove violations of Sections 202(a) and 202(b) of the PSA, which sections limit unfair, unjustly discriminatory or deceptive practices and undue or unreasonable preferences or advantages in livestock purchasing practices. Elimination of this requirement could have a significant impact on cattle procurement and marketing practices in the beef processing industry. In particular, it could impair our ability to pay premiums for cattle that meet the quality standards for our value-added or export programs, thus affecting how we (i) procure cattle for these programs and (ii) process and market value-added and exported products. We cannot predict whether the proposed rule or some modified rule will be adopted or the extent of the effect of any such rule on the beef processing industry or on our operations or financial results.

Our ~~operations~~ Dodge City, Kansas and Liberal, Kansas facilities are subject to ~~extensive~~Title ~~regulation~~V bypermitting ~~the~~pursuant ~~USDA,~~to the ~~Grain~~federal ~~Inspection Packers~~Clean Air Act and ~~Stockyards~~the ~~Administration,~~Kansas orAir ~~GIPSA,~~Quality ~~the~~Act ~~FDA,~~and ~~the~~implementing Uregulations.S. These ~~EPA~~permits ~~and other~~expired ~~state~~on January 25, ~~local~~2010, ~~and~~but ~~foreign~~were ~~authorities~~administratively ~~regarding~~extended pending renewal by the ~~processing,~~Kansas ~~packaging, storage,~~Department ~~distribution,~~of ~~advertising~~Health and ~~labeling~~Environment, ofor ~~our products~~KDHE, ~~including~~of ~~food safety~~our ~~standards~~renewal applications. ~~Recently,~~Our ~~the~~Brawley ~~food safety practices~~ and ~~procedures~~St. inJoseph ~~the~~plants ~~beef~~are ~~processing industry have been~~ subject to ~~more~~secondary ~~intense~~air ~~scrutiny~~permits ~~and~~which ~~oversight~~are byin ~~the USDA~~place. ~~For~~The ~~example,~~Moultrie onand ~~January~~Hummels ~~12,~~Wharf ~~2004,~~plants ~~FSIS published~~are ansubject ~~interim~~only ~~final~~to ~~rule~~certain onreporting ~~Specified~~requirements. ~~Risk~~Our ~~Materials~~Dodge City, orLiberal, ~~SRMs~~Hummels Wharf, Moultrie and ~~requirements~~ ~~for~~Brawley, ~~non-ambulatory~~facilities ~~disabled~~are ~~cattle~~subject ~~due~~ to ~~the~~Clean ~~finding~~Air ofAct ~~BSE~~Risk ~~in routine~~Management ~~testing. We~~Plan ~~immediately implemented~~requirements ~~the~~relating ~~appropriate programs/policies~~ to ~~ensure~~our ~~compliance~~use ~~with~~of ~~FSIS rules.~~ammonia ~~FSIS~~as ~~published~~ a ~~final~~refrigerant. ~~rule~~In onFebruary ~~July 13~~2010, ~~2007,~~KDHE ~~making~~requested ~~permanent~~ the ~~interim~~ ~~regulations~~Liberal ~~issued~~plant insubmit ~~January~~a ~~2004~~construction ~~that~~permit ~~prohibits~~application ~~the~~and ~~slaughter~~a ~~of non-ambulatory~~‘‘Best ~~disabled~~Available ~~cattle~~Control Technology,’’ ~~requires~~or ~~the~~BACT, ~~description~~analysis ~~and~~for ~~removal~~a ofbone ~~SRMs~~ dryer that ~~are~~was ~~considered~~installed toin ~~be inedible, and restricts~~ the ~~use~~Liberal ofplant ~~captive~~in ~~bolt stunners~~1981 ~~that~~by ~~deliberately~~a ~~inject~~prior ~~compressed~~owner ~~air~~of ~~into~~ the ~~cranium~~Liberal ~~of an animal~~plant. We ~~work~~have ~~closely~~completed ~~with~~ the ~~USDA and~~BACT ~~other~~analysis ~~regulatory~~and ~~agencies~~have tosubmitted ~~help~~a ~~ensure~~construction ~~our~~permit ~~operations~~for ~~comply~~the ~~with~~bone ~~all applicable~~dryer ~~food~~pursuant ~~safety~~to ~~laws~~KDHE’s ~~and regulations~~request.

11All of our plants are indirect dischargers of wastewater to publicly-owned treatment works and are subject to requirements under the federal Clean Water Act and corresponding state laws and implementing municipal laws as well as agreements or permits with municipal or county authorities. We have an agreement with the City of Liberal for wastewater and storm water treatment and are working with the City regarding expansion of the City’s treatment facilities to address new and more stringent discharge requirements that will apply to the City’s discharge in the context of the renewal of the City’s discharge permit. Depending upon the ultimate cost of the required upgrade, there may be significant expenditures associated with the expansion of the City’s treatment facilities. We have an agreement with the City of Moultrie and The Joint Development Authority of Brooks, Colquitt, Grady, Mitchell and Thomas Counties for treatment of wastewater from the Moultrie plant, and we have a pretreatment permit from the City of Moultrie for treatment of wastewater from the Moultrie plant. This permit was reissued in March 2010, and we are making the capital improvements needed to meet new phosphorus limits that are in the reissued permit. Estimated capital expenditures associated with the treatment of phosphorus in our wastewater at Moultrie are estimated at approximately $3.0 million, of which approximately $2.7 million was spent during fiscal years 2010 and 2011, with the remaining included in our 2012 capital expenditure budget. We have upgraded our treatment facilities at the Brawley plant to provide treatment that meets the ammonia requirements of the Brawley City Ordinance and we are in the process of making improvements that will allow us to consistently meet the total suspended solids limits in such Ordinance. The City of Brawley is in the process of upgrading its publicly-owned treatment works in order to comply with its direct discharge permit, including requirements for ammonia and nutrient controls.

~~Table~~Storm water discharges from our plants are regulated pursuant to general permits issued by the respective states with the exception of ~~Contents~~ Missouri which does not have a general permit program available to our St. Joseph tannery. The Missouri Department of Natural Resources made a comprehensive storm water inspection at the tannery in April-May 2009 and in an inspection report and Notice of Violation requested that the plant submit an application for storm water discharges which previously had been determined to be discharged to the City publicly-owned treatment works and, thus, not requiring a permit. We submitted the requested permit application in November 2009.

Our domestic operations are subject to the Packers and Stockyards Act of 1921, or PSA. This statute generally prohibits meat packers in the livestock industry from engaging in certain practices including violations of the PSA’s prompt payment provisions. In general (unless otherwise agreed in writing by our livestock suppliers), this statute requires us to make full payment for our livestock purchases in the case of cash sales before the close of the next business day following the purchase and transfer of possession of the livestock we purchase, or, in the case of a cash purchase on a carcass or ‘‘grade and yield’’ basis, that we make full payment of the purchase price not later than the close of the first business day following determination of the purchase price. Any delay or attempt to delay payment as required by the PSA will be deemed an unfair practice in violation of the statute. Under the PSA, we must hold in trust for the benefit of our unpaid livestock suppliers all livestock we purchase in cash sales (as well as all inventories of, or receivables for or proceeds from, meat, meat food products or livestock products derived from these cash sales) until the sellers have received full payment. As of August 28, 2010, NBP LLC has secured a bond of $35.9 million to satisfy these requirements.11

~~On June~~Table ~~22,~~of ~~2010, GIPSA published a proposed rule that would add new regulations under the PSA. If adopted as written, the proposed rule appears to, among other things:~~Contents

·Our ~~eliminate~~Dodge ~~the~~City, ~~requirement~~Liberal, ~~that~~Hummels ~~GIPSA~~Wharf, orand ~~livestock producers~~St. ~~demonstrate~~Joseph ~~competitive~~plants ~~harm~~are tosupplied ~~prove~~by ~~violations~~water from supply wells on our property. We purchase water from the City of ~~Sections~~Moultrie ~~202(a)~~ and ~~202(b)~~the City of Brawley and some water is purchased from the ~~PSA~~City of St. Joseph, all pursuant to municipal water rate structures. We have purchased irrigation water rights for the majority of water needed at our Dodge City plant which ~~sections~~originally ~~limit~~were ~~unfair,~~governed ~~unjustly~~by ~~discriminatory~~renewable ~~or deceptive~~term ~~practices~~permits. We have since converted the renewable term permits into certificates of appropriation. We hold public water supply permits allowing us to supply potable water to our employees at our Dodge City, Kansas and ~~undue~~Liberal, orKansas ~~unreasonable~~facilities. ~~preferences~~The orpublic ~~advantages~~water ~~in livestock~~supply ~~purchasing~~permits ~~practices;~~do not have expiration dates.

·All ~~require~~of ~~packers~~our facilities generate solid wastestreams, including small quantities of hazardous wastes. While we are subject to ~~maintain~~laws ~~written~~that ~~records justifying~~provide ~~deviations~~for ~~from~~strict, ~~standard~~and ~~price~~in certain circumstances joint and several, liability for remediation of hazardous substances at contaminated sites, which could include current or ~~contract~~former ~~terms~~facilities ~~offered~~or toother ~~livestock producers;~~sites where wastes we generated have been disposed, we have not received any demands nor are we aware that we have any liability at such sites under the Comprehensive Environmental Response, Compensation and Liability Act, or Superfund, or state counterparts.

·Our ~~prohibit~~plants ~~packers~~are ~~from~~subject ~~purchasing~~to ~~cattle~~community ~~from~~right ~~other packers~~to orknow ~~their~~reporting ~~affiliates;~~requirements under the Superfund Amendments and Reauthorization Act of 1986, which requires yearly filings as to the substances used on the plant premises. We also report accidental releases of hazardous substances pursuant to the Superfund law and amendments and state law counterparts.

·In ~~limit~~fiscal a2011, ~~packer’s~~we ~~ability~~incurred toexpenses ~~purchase~~of ~~cattle~~approximately ~~through dealers~~$4.1 ~~operating~~million asin ~~packer~~environmentally-related ~~buyers~~capital expenditures, of which approximately $1.1 million was spent for wastewater improvements at our Moultrie plant.

IfIn ~~adopted~~addition asto ~~written,~~ the ~~new~~ ~~regulations~~environmental ~~could~~matters ~~have~~discussed ~~a significant impact on cattle procurement and marketing practices in the beef processing industry. In particular~~above, iffrom ~~adopted as~~time ~~written,~~to ~~the~~time ~~proposed~~we ~~regulations~~receive ~~could~~notices ~~impair~~from ~~our~~regulatory ~~ability~~authorities toand ~~pay~~others ~~premiums for~~asserting ~~cattle~~ that ~~meet the quality standards for our value-added or export programs, thus affecting how~~ we ~~(i)~~are ~~procure~~not ~~cattle~~in ~~for~~compliance ~~these~~with ~~programs~~some ~~and~~laws ~~(ii) process~~ and ~~market value-added and exported products~~regulations. WeIn ~~cannot predict whether the proposed rule or~~ some ~~modified~~instances, ~~rule~~litigation ~~will be adopted or the extent of the effect of any such rule on the beef processing industry or on our operations or financial results~~ensues.

Our Dodge City, Kansas and Liberal, Kansas facilities are subject to Title V permitting pursuant to the federal Clean Air Act and the Kansas Air Quality Act and implementing regulations. These permits expired on January 25, 2010, but were administratively extended pending renewal by the Kansas Department of Health and Environment, or KDHE, of our renewal applications. Our Brawley and St. Joseph plants are subject to secondary air permits which are in place. The Moultrie and Hummels Wharf plants are subject only to certain reporting requirements. Our Dodge City, Liberal, Hummels Wharf, Moultrie and Brawley, facilities are subject to Clean Air Act Risk Management Plan requirements relating to our use of ammonia as a refrigerant. In February 2010, KDHE requested the Liberal plant submit a construction permit application and a ‘‘Best Available Control Technology,’’ or BACT, analysis for a bone dryer that was installed in the Liberal plant in 1981 by a prior owner of the Liberal plant. We have completed the BACT analysis and have submitted a construction permit for the bone dryer pursuant to KDHE’s request.Employees

~~All~~ As of ~~our~~August 27, ~~plants~~2011, ~~are~~we ~~indirect~~had ~~dischargers~~approximately of9,100 ~~wastewater~~employees, toof ~~publicly-owned treatment~~which ~~works~~approximately ~~and~~44% are ~~subject~~represented toby ~~requirements~~collective ~~under~~bargaining ~~the~~agreements. Approximately ~~federal~~2,800 ~~Clean~~employees ~~Water Act~~at ~~and~~our ~~corresponding~~Liberal, ~~state~~Kansas ~~laws~~facility ~~and~~are ~~implementing~~represented ~~municipal~~by ~~laws~~the asUnited ~~well~~Food ~~as agreements~~and orCommercial ~~permits~~Workers ~~with~~International ~~municipal~~Union orunder ~~county~~a ~~authorities.~~collective Webargaining ~~have an~~ agreement ~~with~~scheduled ~~the~~to ~~City~~expire ofDecember ~~Liberal~~16, ~~for~~2012. ~~wastewater~~Approximately ~~and~~1,100 ~~storm~~employees ~~water~~at ~~treatment~~our ~~and are~~Brawley, ~~working~~California ~~with~~facility ~~the~~are ~~City~~jointly ~~regarding~~represented ~~expansion~~by of the ~~City’s~~United ~~treatment facilities~~Food ~~to address new~~ and ~~more~~Commercial ~~stringent~~Workers ~~discharge~~International ~~requirements~~Union ~~that~~and ~~will apply to~~ the ~~City’s~~Teamsters ~~discharge~~International inUnion ~~the~~under ~~context~~a ofcollective ~~the~~bargaining ~~renewal~~agreement ofscheduled ~~the~~to ~~City’s discharge~~expire ~~permit.~~on ~~Depending~~December ~~upon~~8, ~~the~~2013. Approximately ~~ultimate~~90 ~~cost~~employees ofat ~~the~~our ~~required~~St. ~~upgrade~~Joseph, ~~there~~ ~~may~~Missouri befacility ~~significant~~are ~~expenditures~~represented ~~associated~~by ~~with~~ the ~~expansion~~United ofCereal ~~the City’s~~Workers ~~treatment~~of ~~facilities. We have an agreement with~~ the ~~City~~United ofFood ~~Moultrie~~ and ~~The~~ ~~Joint~~Commercial ~~Development~~Workers ~~Authority~~International ofUnion ~~Brooks,~~under ~~Colquitt,~~a ~~Grady,~~collective ~~Mitchell~~bargaining ~~and~~agreement ~~Thomas Counties~~scheduled ~~for~~to ~~treatment~~expire ofon ~~wastewater~~May ~~from the Moultrie plant~~18, ~~and we have a pretreatment permit from the~~ 2014.

12The employees at our Dodge City, Kansas facility have voted in favor of union representation in a two day National Labor Relations Board-supervised secret ballot election. The tally of ballots, released November 5, 2011, was in favor of representation by the United Food and Commercial Workers International Union. The union has been certified as the representative of a bargaining unit of approximately 2,600 employees in production and maintenance, shipping and receiving, grounds keeping and the warehouse. The election was conducted on November 3, 2011 and November 4, 2011.

~~Table~~We consider our relations with our employees and the United Food and Commercial Workers International Union and the Teamsters International Union and the United Cereal Workers of ~~Contents~~the United Food and Commercial Workers International Union to be good.

~~City~~Food of Moultrie for treatment of wastewater from the Moultrie plant. This permit was reissued in March 2010, and we are making the capital improvements needed to meet new phosphorus limits that are in the reissued permit. Estimated capital expenditures associated with the treatment of phosphorus in our wastewater at Moultrie are estimated at approximately $3.2 million, of which approximately $1.6 million was spent during fiscal year 2010, with the remaining included in our 2011 capital expenditure budget. The Eastern Snyder County Regional Authority has informed us that we will need to reduce nutrients in our wastewater in the future at our Hummels Wharf plant. We expect to construct additional wastewater treatment facilities at the plant to respond to such request at a future date. We have upgraded our treatment facilities at the Brawley plant to provide treatment that meets the ammonia requirements of the Brawley City Ordinance and we are in the process of making improvements that will allow us to consistently meet the total suspended solids limits in such Ordinance. The City of Brawley is in the process of upgrading its publicly-owned treatment works in order to comply with its direct discharge permit, including requirements for ammonia and nutrient controls. The City has increased sewer rates to the Brawley Plant and has suggested that a capacity charge may also be needed in connection with the required upgrades. Such charges may significantly increase our operational costs at Brawley.Safety

~~Storm water~~Food ~~discharges~~safety ~~from~~is one of our ~~plants~~top ~~are~~priorities. ~~regulated~~We ~~pursuant~~believe toour ~~general~~food ~~permits issued~~safety byprocess utilizes many of the ~~respective~~industry’s ~~states~~most effective intervention technologies. These intervention technologies are coupled with ~~the~~our ~~exception~~ongoing ofefforts ~~Missouri~~to ~~which~~incorporate ~~does~~and ~~not have~~promote a“best ~~general~~practices” ~~permit~~throughout ~~program~~our ~~available~~production process to ~~our~~enhance ~~St.~~product ~~Joseph~~quality ~~tannery.~~and ~~The~~to ~~Missouri Department~~produce ofsafe, ~~Natural~~wholesome ~~Resources~~beef ~~made~~products. Our food safety system incorporates a ~~comprehensive~~multiple ~~storm~~hurdle strategy that includes multiple hot water ~~inspection~~thermal ~~at the~~pasteurization ~~tannery~~cabinets, inanti-microbial ~~April~~washes, organic rinses, in-~~May~~line ~~2009~~steam vacuums, specific carcass trimming procedures, detailed carcass and inproduct anmonitoring ~~inspection~~standard ~~report~~operating procedures, and ~~Notice~~a ~~of Violation~~rigorous ~~requested~~cold ~~that~~chain ~~the~~management ~~plant~~system. ~~submit~~We ansupport ~~application~~our ~~for~~food ~~storm~~safety ~~water discharges~~process ~~which~~in ~~previously~~each ~~had~~of ~~been~~our ~~determined~~major toprocessing befacilities ~~discharged~~with toon-site ~~the~~microbiological ~~City publicly~~laboratories. These on-~~owned~~site ~~treatment~~laboratories ~~works~~conduct ~~and~~microbial tests, ~~thus~~monitor facility processes, ~~not~~test ~~requiring~~intervention aefficacies, ~~permit.~~and Wevalidate ~~submitted the~~that ~~requested~~all ~~permit~~of ~~application~~our inprocesses ~~November~~are ~~2009~~meeting design parameters.

~~Our Dodge~~Intellectual City, Liberal, Hummels Wharf, and St. Joseph plants are supplied by water from supply wells on our property. We purchase water from the City of Moultrie and the City of Brawley and some water is purchased from the City of St. Joseph, all pursuant to municipal water rate structures. We purchased irrigation water rights for the majority of water needed at our Dodge City plant and are in the process of converting the existing renewable term permits governing our exercise of the irrigation rights to certificates of appropriation for municipal use for a majority of the Dodge City plant water supply. We hold public water supply permits allowing us to supply potable water to our employees at our Dodge City, Kansas and Liberal, Kansas facilities. The public water supply permits do not have expiration dates.Property

All of our facilities generate solid wastestreams, including small quantities of hazardous wastes. While we are subject to laws that provide for strict, and in certain circumstances joint and several, liability for remediation of hazardous substances at contaminated sites, which could include current or former facilities or other sites where wastes we generated have been disposed, we have not received any demands nor are we aware that we have any liability at such sites under the Comprehensive Environmental Response, Compensation and Liability Act, or Superfund, or state counterparts.12

~~Our National~~Table Beef Leathers subsidiary is cooperating with governmental investigations related to the St. Joseph tannery. The company’s operations began at this facility in March 2009. Region 7 EPA, in cooperation with the Missouri Department of Natural Resources, or MDNR, is investigating the land application of sludge from the tannery wastewater treatment facility to numerous parcels of farmland in a four county area in Northwest Missouri over many years by the former owner of the tannery. The sludge was classified as a fertilizer in Missouri. We have cooperated with the investigations in providing records of land application prepared by the prior owner/operator of the tannery, Prime Tanning, and have provided assistance in interpreting those records. For a six and one-half week period of time following our purchase of certain assets of Prime Tanning, we land applied wastewater treatment sludge to portions of two parcels of land. In April-May, 2009, Region 7 EPA and MDNR conducted a multi-media inspection of our St. Joseph tannery. Following that inspection, EPA issued one information request pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, the Resource Conservation and Recovery Act, the Clean Water Act, and the Clean Air Act; a second information request pursuant to the Resource Conservation and Recovery Act, and one Notice of Violation under the Resource Conservation and Recovery Act. The Missouri Department of Natural Resources has issued a Storm Water Notice of Violation (discussed above). We have responded to the information requests and to the Notices of Violation.Contents

13We hold a number of trademarks and domain names we believe are material to our business and which are registered with the United States Patent and Trademark Office, including National Beef®, BioLogic® Food Safety System, Black Canyon® Angus Beef, Black Canyon® Premium Reserve, Certified Premium Beef®, Naturewell® Natural Beef, NatureSource® Natural Angus Beef, Vintage Natural Beef®, Imperial Valley® Premium Beef, Leading the Way in Quality Beef®, Royal Blue® Leather, Regal Blue Leather®, Radiant Blue Leather®, and W.E.L.L Initiatives®. We have also registered the National Beef® trade name and trademark in most of the foreign countries to which we sell our products. Currently, we have a number of trademark registrations pending in the U.S. and in foreign countries. In addition to trademark protection, we attempt to protect our unregistered marks and other proprietary information under trade secret laws, employee and third-party non-disclosure agreements and other laws and methods of protection. All other trademarks or trade names referred to in this report are the property of their respective owners.

~~Table~~Management ofInformation ~~Contents~~Systems

~~Our plants~~We ~~are~~have ~~subject~~developed proprietary management information systems tailored to ~~community~~our ~~right~~business processes which help enable us to ~~know~~make ~~reporting~~coordinated, ~~requirements~~data ~~under~~driven decisions and enable us to operate more profitably. For example, we use individual carcass data (including information on weight, grade and breed as well as historical information with respect to similar animals) to make decisions regarding the ~~Superfund~~ ~~Amendments~~appropriate products to process from each carcass, taking into account current supply and ~~Reauthorization~~demand. Furthermore, ~~Act~~coordinated information systems help the procurement department to anticipate the quality and quantity of ~~1986,~~cattle ~~which~~it ~~requires~~needs ~~yearly filings~~to asprocure to fill sales orders in the ~~substances~~short ~~used~~term, onand the ~~plant~~sales ~~premises~~department to tailor its sales efforts to take into account changes in available supply. Our Wesophisticated systems also ~~report accidental~~permit ~~releases~~our ofsales ~~hazardous~~force ~~substances~~to ~~pursuant~~readily compare orders by location to ~~the~~trailer ~~Superfund~~capacity ~~law~~to reduce transportation costs by better using trailer capacity. In addition, our management information systems at our plants have been developed to fit our operating and ~~amendments~~ maintenance needs, thereby reducing training time for our employees and ~~state~~simplifying ~~law~~the ~~counterparts~~work order process.

InLegal fiscal year 2010, we incurred expenses of approximately $4.4 million in environmentally-related capital expenditures, of which approximately $1.6 million was spent for wastewater improvements at our Moultrie plant. We anticipate environmentally-related capital expenditures of approximately $4.4 million in fiscal 2011, of which approximately $1.6 million is budgeted for wastewater improvements at our Moultrie plant.Proceedings

~~In addition~~The Company is a party to ~~the~~a ~~environmental~~number ~~matters~~of ~~discussed~~lawsuits ~~above,~~and ~~from~~claims ~~time~~arising toout ~~time~~of ~~we receive~~the ~~notices~~operation ~~from~~of ~~regulatory~~its ~~authorities~~business. ~~and~~Management ~~others~~believes ~~asserting~~the ~~that~~ultimate weresolution ~~are~~ of such matters should not inhave ~~compliance~~a ~~with~~material ~~some~~adverse ~~laws~~effect ~~and~~on ~~regulations.~~the InCompany’s ~~some~~financial ~~instances~~condition, ~~litigation ensues~~results of operations or liquidity.

~~Employees~~1A. RISK FACTORS

~~As of~~Our ~~August~~business ~~28,~~operations ~~2010,~~and wethe ~~had~~implementation ~~approximately 9,100 employees,~~ of ~~which approximately~~our ~~43%~~business strategy are ~~represented~~subject byto ~~collective~~significant ~~bargaining~~risks ~~agreements. Approximately~~inherent ~~2,700~~in ~~employees at~~ our ~~Liberal~~business, ~~Kansas~~ ~~facility~~including, ~~are~~without ~~represented~~limitation, by the ~~United~~risks ~~Food~~ and ~~Commercial~~uncertainties ~~Workers International~~described ~~Union~~below. The ~~under~~occurrence aof ~~collective~~any ~~bargaining~~one ~~agreement~~or ~~scheduled~~more toof ~~expire December~~the ~~16,~~risks ~~2012.~~or ~~Approximately~~uncertainties ~~1,100~~described ~~employees~~below atcould ~~our~~have ~~Brawley,~~a ~~California facility~~material ~~are~~adverse ~~jointly~~effect ~~represented~~on byour ~~the~~financial ~~United~~condition, ~~Food~~results ~~and~~of ~~Commercial~~operations ~~Workers International~~and ~~Union~~cash ~~and~~flows. While ~~the~~we ~~Teamsters~~believe ~~International~~we ~~Union~~have ~~under~~identified aand ~~collective bargaining~~discussed ~~agreement~~below ~~scheduled~~the tokey ~~expire~~risk onfactors ~~December~~affecting 8our business, ~~2013. Approximately~~there 80may ~~employees~~be atadditional ~~our~~risks ~~St.~~and ~~Joseph, Missouri~~uncertainties ~~facility~~that are ~~represented~~not bypresently ~~the~~known ~~United~~or ~~Cereal~~are ~~Workers~~not ofcurrently ~~the~~believed ~~United Food~~to ~~and~~be ~~Commercial~~significant ~~Workers~~that ~~International~~may ~~Union~~adversely ~~under~~affect aour ~~collective~~business, ~~bargaining agreement~~operations, ~~scheduled~~industry, tofinancial ~~expire~~position onand ~~May~~financial ~~18,~~performance ~~2014~~in the future.

~~We consider~~Risks ~~our~~Related ~~relations~~to ~~with~~Our ~~our~~Industry ~~employees~~ and ~~the~~Our ~~United Food and Commercial Workers International Union and the Teamsters International Union and the United Cereal Workers of the United Food and Commercial Workers International Union to be good.~~Business

~~Food Safety~~Outbreaks of disease affecting livestock can adversely affect demand for our products and the supply of cattle and thereby adversely affect our business.

~~Food safety~~We isare ~~one~~subject ofto ~~our~~risks ~~top~~relating ~~priorities.~~to Weanimal ~~believe~~health ~~our~~and ~~food~~disease ~~safety~~control. ~~process utilizes~~An ~~many~~outbreak of ~~the~~disease ~~industry’s~~affecting ~~most~~livestock, ~~effective~~such ~~intervention~~as ~~technologies.~~BSE ~~These intervention~~(also ~~technologies~~commonly ~~are~~referred ~~coupled~~to ~~with~~as ~~our~~mad ~~ongoing~~cow ~~efforts~~disease) toor ~~incorporate~~ foot-and-mouth ~~promote~~disease ~~“best~~could ~~practices”~~result ~~throughout~~in ~~our~~restrictions ~~production~~on ~~process~~sales of products to ~~enhance product~~our ~~quality~~customers ~~and~~or topurchases ~~produce~~of ~~safe,~~livestock ~~wholesome~~from ~~beef~~our ~~products~~suppliers. ~~Our~~Also, ~~food~~outbreaks ~~safety system~~of ~~incorporates~~these adiseases, ~~multiple~~or ~~hurdle~~the ~~strategy~~perception by the public that ~~includes~~such ~~multiple~~an ~~hot~~outbreak ~~water thermal~~has ~~pasteurization~~occurred ~~cabinets,~~or ~~anti-microbial~~other ~~washes,~~concerns ~~organic~~regarding ~~rinses~~such disease, ~~in-line steam~~whether ~~vacuums,~~or ~~specific~~not ~~carcass~~resulting ~~trimming~~in ~~procedures~~regulatory action, ~~detailed~~can ~~carcass~~lead ~~and product~~to ~~monitoring~~cancellation ~~standard~~of ~~operating~~orders ~~procedures,~~by ~~and~~our acustomers ~~rigorous~~and ~~cold~~create ~~chain management~~adverse ~~system.~~publicity Wethat ~~support~~may ~~our~~have ~~food~~a ~~safety~~material ~~process~~adverse ineffect ~~each~~on ofconsumer ~~our~~demand ~~major processing~~and, ~~facilities~~as ~~with~~a result, on~~-site~~ ~~microbiological~~our ~~laboratories~~results of operations. ~~These~~Furthermore, ~~on-site laboratories~~an ~~conduct~~outbreak ~~microbial~~of ~~tests,~~disease ~~monitor~~could ~~facility~~lead ~~processes,~~to ~~test intervention~~widespread ~~efficacies,~~destruction ~~and~~of ~~validate~~cattle, ~~that~~which ~~all~~could ofhave ~~our~~a ~~processes~~negative ~~are~~impact ~~meeting design~~on ~~parameters~~us.

~~Intellectual Property~~If our products or products made by others using our products become contaminated or are alleged to be contaminated, we may be subject to product liability claims and product recalls that would adversely affect our business.

We ~~hold~~ amay ~~number~~be ofsubject ~~trademarks~~to ~~and~~significant ~~domain~~liability ~~names~~potentially wein ~~believe~~excess ~~are~~of ~~material~~applicable toliability ~~our business~~insurance ~~and~~policy ~~which~~limits ~~are~~if ~~registered with~~ the ~~United~~consumption ~~States~~of ~~Patent~~any ~~and~~of ~~Trademark Office,~~our ~~including~~products ~~National~~or ~~Beef®,~~products ~~BioLogic®~~made ~~Food~~by ~~Safety System,~~others ~~Black~~using ~~Canyon®~~our ~~Angus~~products ~~Beef,~~causes ~~Black Canyon® Premium Reserve~~injury, ~~Certified Premium~~illness ~~Beef®,~~or ~~Naturewell®~~death ~~Natural~~due ~~Beef,~~to ~~NatureSource®~~contamination ~~Natural~~or ~~Angus~~otherwise. In ~~Beef~~addition, ~~Vintage~~ ~~Natural~~we ~~Beef®,~~may ~~Imperial Valley® Premium Beef, Leading the Way~~ in ~~Quality~~ ~~Beef®, Royal Blue™ Leather, Regal Blue Leather™, and Radiant Blue Leather™. We have also registered~~ the ~~National~~future ~~Beef®~~recall ~~trade~~products ~~name and trademark~~ in ~~most of~~ the ~~foreign~~ ~~countries~~event ~~to which we sell~~ our products. ~~Currently,~~are we have a number of trademark registrations pending in the U.S. and in foreign countries. In addition to trademark protection, we attempt to protect our unregistered marks and other proprietary information under trade secret laws, employee and third-party non-disclosure agreements and other laws and methods of protection. All other trademarks or ~~trade~~may ~~names~~be ~~referred to in this report are the property of their respective owners.~~

1413

Table of Contents

~~Management Information~~contaminated, ~~Systems~~spoiled or inappropriately labeled. Contamination of our products or those of our competitors also may create adverse publicity or cause consumers to lose confidence in the safety and quality of our products that could negatively affect our business. We may encounter the same risks of contamination or negative publicity if a third party tampers with our products. Allegations of contamination of our products may also be harmful to us even if such allegations are untrue. The occurrence of any of these risks may increase our costs and decrease demand for our products, which could negatively affect our business, financial condition, results of operations and cash flows. Organisms producing food borne illnesses are generally found in the environment and there is a risk that as a result of food processing they could be present in our products. For example, E. coli is one of many food borne bacteria commonly associated with beef products. Once contaminated products have been shipped for distribution and consumption, illness or death may result if pathogens are present or increase due to handling or temperatures, and are not otherwise eliminated at the further processing, food service or consumer level. There can be no assurance that we will not be required to perform product recalls, or that product liability claims will not be asserted against us, in the future.

~~We have~~Our ~~developed~~margins ~~proprietary~~may ~~management~~be ~~information~~negatively ~~systems~~impacted ~~tailored~~by tofluctuating ~~our business~~raw ~~processes~~material ~~which help enable us to make coordinated, data driven decisions~~ and ~~enable~~utility ~~us to operate more profitably. For example~~costs, weselling ~~use individual carcass data (including information on weight~~prices, grade and breed as well as historical information with respect to similar animals) to make decisions regarding the appropriate products to process from each carcass, taking into account current supply and demand. Furthermore, coordinated information systems help the procurement department to anticipate the quality and quantity of cattle it needs to procure to fill sales orders in the short term, and the sales department to tailor its sales efforts to take into account changes in ~~available supply. Our sophisticated systems also permit~~ our ~~sales~~relationships ~~force~~with ~~to readily compare orders by location to trailer capacity to reduce transportation costs by better using trailer capacity. In addition,~~ our ~~management~~ ~~information~~suppliers ~~systems at our plants have been developed to fit our operating~~ and ~~maintenance~~other ~~needs,~~factors ~~thereby~~that ~~reducing~~are ~~training~~outside ~~time~~of ~~for~~ our ~~employees~~ ~~and simplifying the work order process~~control.

~~Legal Proceedings~~Our margins are dependent on the price at which our beef products can be sold and the price we pay for our raw materials, among other factors. These prices can vary significantly over a relatively short period of time as a result of a number of factors, including the relative supply and demand for live cattle and beef products, as well as the market for competing or complimentary products, such as pork and poultry. In addition, closure of international markets to U.S. beef product exports as a result of the December 23, 2003 BSE discovery negatively affected U.S. beef product margins, as certain by-products, classified as Specific Risk Materials, or SRMs, have been banned from use in feedstocks and the human food chain. Some of these products previously enjoyed a market in foreign countries.

~~National Beef~~The ~~Leathers, LLC,~~supply orand ~~NBL,~~market aprice ~~wholly-owned subsidiary~~ of ~~NBP LLC,~~the ~~is a~~livestock ~~named~~that ~~defendant~~constitute inour ~~two~~principal ~~currently~~raw ~~pending~~material ~~purported~~and ~~class~~represent ~~actions~~the ~~involving NBL’s~~substantial ~~tannery~~majority ~~located~~of inour ~~St. Joseph,~~cost ~~Missouri,~~of ~~which~~goods ~~NBL~~sold ~~purchased~~are ~~in March~~dependent ~~2009. These~~upon ~~lawsuits~~a ~~were~~variety ~~filed on July 22, 2009 in the U.S. District Court for the Western District~~ of ~~Missouri.~~ ~~The~~factors ~~lawsuits~~over ~~allege~~which ~~that~~we ~~NBL~~have ~~spread~~little ~~wastewater~~or ~~sludge~~no ~~containing hexavalent~~control, ~~chromium~~including influctuations ~~four counties~~ in ~~northwest~~the ~~Missouri.~~size ~~The plaintiffs are seeking an unspecified amount~~ of ~~damages~~herds ~~for~~maintained ~~economic~~by ~~damages~~producers, ~~punitive damages, diminished property values and medical monitoring. On May 11, 2010,~~ the ~~court~~relative ~~issued~~cost ~~an order ruling that NBL is not liable under a successor liability theory for the conduct~~ of ~~the~~feed ~~tannery’s~~and ~~previous~~energy, ~~owner~~weather and ~~another party~~livestock ~~prior~~diseases. In toaddition, ~~NBL’s~~we purchase ofapproximately ~~the~~52% ~~tannery. As a result~~ of ~~this ruling,~~ the ~~plaintiffs~~cattle inwe 15process ~~lawsuits~~on ~~filed between April 22, 2009 and April 29, 2010, in~~ the ~~Circuit~~open ~~Courts~~market. If ofwe ~~Buchannan~~do ~~County, Clinton~~not ~~County,~~attract and ~~DeKalb~~maintain ~~County,~~acceptable ~~Missouri~~relationships ~~seeking~~with ~~damages for economic damages~~growers, ~~punitive~~the ~~damages~~quantity, ~~diminished~~quality ~~property~~or ~~values~~pricing ~~and~~of ~~medical~~our ~~monitoring voluntarily~~supply ~~dismissed~~of ~~their~~cattle ~~claims~~could ~~against~~be ~~NBL~~negatively ~~in June 2010~~affected. ~~NBL believes it has meritorious defenses to the claims in the remaining two lawsuits and intends to defend them vigorously.~~

~~The Company~~Severe isprice aswings ~~party~~in toraw amaterials, ~~number~~and ofthe ~~other~~resulting ~~lawsuits~~impact ~~and~~on ~~claims~~the ~~arising~~prices ~~out~~we ofcharge ~~the operation~~for ofour ~~its~~products, ~~business.~~have ~~Management~~at ~~believes~~times ~~the~~had, ~~ultimate~~and ~~resolution~~may ofin ~~such matters~~the ~~should~~future ~~not~~ have, a material adverse effect on ~~the~~our ~~Company’s~~ financial condition, results of operations orand ~~liquidity~~cash flows. If we experience increased costs, we may not be able to pass them along to our customers. In addition, our costs for utilities, such as energy and water may fluctuate over time.

15Our international operations expose us to political and economic risks in foreign countries, as well as to risks related to currency fluctuations and could negatively affect our sales to customers in foreign countries and our operations and assets in such countries.

~~Table~~In fiscal 2011, exports, primarily to Mexico, Japan, South Korea, Canada, China (for hides), Hong Kong, Egypt, and Taiwan accounted for approximately 12.6% of ~~Contents~~our total net sales and these sales on average had a higher margin than our sales generally. A reduction in our international sales would likely adversely affect our margins. In addition, our international activities expose us to risks not faced by companies that limit themselves to the domestic market. One significant risk is that the international operations may be affected by tariffs, other trade protection or food safety measures and import or export licensing requirements.

~~ITEM~~An ~~1A.~~example ~~RISK~~of ~~FACTORS~~a risk related to our international operations is BSE, as discussed above in Item 1, Business — Industry Overview — Beef Export Markets.

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

~~Risks Related~~• tochanges ~~Our~~in ~~Industry~~foreign currency exchange rates and ~~Our~~inflation ~~Business~~or deflation in the foreign countries in which we operate;

~~Outbreaks~~• the closing of ~~disease~~borders ~~affecting~~by ~~livestock~~foreign ~~can~~countries ~~adversely~~to ~~affect~~the ~~demand for~~import of our products ~~and~~due ~~the~~to ~~supply~~disease ofor ~~cattle~~other ~~and~~perceived ~~thereby~~health ~~adversely~~or ~~affect~~food ~~our business.~~safety issues;

~~We are~~• ~~subject~~exchange to risks relating to animal health and disease control. An outbreak of disease affecting livestock, such as BSE (also commonly referred to as mad cow disease) or foot-and-mouth disease could result in restrictions on sales of products to our customers or purchases of livestock from our suppliers. Also, outbreaks of these diseases, or the perception by the public that such an outbreak has occurred or other concerns regarding such disease, whether or not resulting in regulatory action, can lead to cancellation of orders by our customers and create adverse publicity may have a material adverse effect on consumer demand and, as a result, on our results of operations. Furthermore, an outbreak of disease could lead to widespread destruction of cattle, which could have a negative impact on us.controls;

If• ~~our~~changes ~~products~~in or products made by others using our products become contaminated or are alleged to be contaminated, we may be subject to product liability claims and product recalls that would adversely affect our business.tariffs;

We may be subject to significant liability potentially in excess of applicable liability insurance policy limits if the consumption of any of our products or products made by others using our products causes injury, illness or death due to contamination or otherwise and we may in the future recall products in the event our products are or may be contaminated, spoiled or inappropriately labeled. Contamination of our products or those of our competitors also may create adverse publicity or cause consumers to lose confidence in the safety and quality of our products that could negatively affect our business. We may encounter the same risks of contamination or negative publicity if a third party tampers with our products. Allegations of contamination of our products may also be harmful to us even if such allegations are untrue. The occurrence of any of these risks may increase our costs and decrease demand for our products, which could negatively affect our business, financial condition, results of operations and cash flows. Organisms producing food borne illnesses are generally found in the environment and there is a risk that as a result of food processing they could be present in our products. For example, E. coli is one of many food borne bacteria commonly associated with beef products. Once contaminated products have been shipped for distribution and consumption, illness or death may result if pathogens are present, increase due to handling or temperatures, and are not otherwise eliminated at the further processing, food service or consumer level. We cannot assure you that we will not be required to perform product recalls, or that product liability claims will not be asserted against us, in the future.14

~~Our~~Table ~~margins may be negatively impacted by fluctuating raw material and utility costs, selling prices, changes in our relationships with our suppliers and other factors that are outside~~ of ~~our control.~~Contents

~~Our margins~~• ~~are~~changes ~~dependent~~in onpolitical ~~the~~or ~~price~~economic atconditions ~~which~~in ~~our beef products can be sold and the price we pay for our raw materials, among other factors. These prices can vary significantly over~~ a ~~relatively~~specific ~~short~~country ~~period of time as a result of a number of factors, including the relative supply and demand for live cattle and beef products, as well as the market for competing~~ or ~~complimentary products~~region, ~~such~~ asparticularly pork and poultry. In addition, closure of international markets to U.S. beef product exports as a result of the December 23, 2003 BSE discovery negatively affected U.S. beef product margins, as certain by-products, classified as Specific Risk Materials, or SRMs, have been banned from use in ~~feedstocks~~emerging ~~and the human food chain. Some of these products previously enjoyed a market in foreign countries.~~markets;

16• trade restrictions imposed by countries with respect to the importation of our products, including actions taken in connection with trade disputes;

~~Table~~• ~~of Contents~~potentially negative consequences from changes in regulatory requirements; and

~~The supply~~• ~~and~~international market price of the livestock that constitute our principal raw material and represent the substantial majority of our cost of goods sold are dependent upon a variety of factors over which we have little or no controlconflict, including ~~fluctuations~~terrorist ~~in the size of herds maintained by producers~~acts, the relative cost of feed and energy, weather and livestock diseases. Additionally, the closure of the U.S. border to Canadian livestock from May 2003 until July 2005 constrained the supply of cattle in the U.S. which ~~resulted~~could insignificantly ~~higher overall cattle prices in the U.S. compared to Canada, and the closure prompted Canada to increase its processing capabilities, which may also have an adverse~~ impact on our ~~future~~financial ~~margins. In~~condition ~~addition, we purchase approximately 52% of the cattle we process on the open market. If we do not attract~~ and ~~maintain~~results ~~acceptable relationships with growers, the quantity, quality or pricing~~ of ~~our supply of cattle could be negatively affected~~operations.

~~Severe price~~The ~~swings~~occurrence inof ~~raw~~any ~~materials,~~of ~~and~~these ~~the~~events ~~resulting~~could ~~impact~~increase onour ~~the~~costs, ~~prices~~lower wedemand ~~charge~~ for our products, ~~have~~or atlimit ~~times~~our ~~had~~operations, ~~and~~which ~~may~~could ~~in the future~~ have, a material adverse effect on our business, financial condition, results of operations ~~and~~or ~~cash flows~~prospects. ~~If we experience increased costs, we may not be able to pass them along to our customers. In addition, our costs for utilities, such as energy and water may fluctuate over time.~~

~~Our~~Compliance ~~international~~with ~~operations~~environmental ~~expose~~regulations uscould toresult ~~political~~in significant costs and ~~economic~~failure ~~risks in~~to ~~foreign~~comply ~~countries,~~with asenvironmental ~~well~~regulations asand toour ~~risks~~use ~~related~~of tohazardous ~~currency~~substances, ~~fluctuations~~including ~~and could~~at ~~negatively~~National ~~affect~~Beef ~~our~~Leather’s ~~sales~~tannery tofacility, ~~customers~~could result in ~~foreign~~civil ~~countries~~as ~~and~~well ~~our operations~~as ~~and~~criminal ~~assets~~penalties, inliability ~~such~~for ~~countries~~damages and negative publicity.

~~In fiscal~~Our ~~year~~operations ~~2010,~~are ~~exports,~~subject ~~primarily~~ to ~~Mexico,~~extensive ~~Japan,~~and ~~South~~increasingly ~~Korea,~~stringent ~~Canada~~regulations, ~~China~~ ~~(for~~including ~~hides),~~those ~~Hong~~relating ~~Kong~~to wastewater and stormwater discharges, ~~Egypt~~air emissions, ~~and~~waste ~~Taiwan~~handling ~~accounted~~and ~~for~~disposal ~~approximately~~and ~~11%~~ remediation of ~~our~~soil ~~total~~and ~~net~~groundwater ~~sales~~contamination ~~and~~that ~~these~~are ~~sales~~administered onby ~~average~~the ~~had~~U.S. aEnvironmental ~~higher~~Protection ~~margin~~Agency, ~~than~~or ~~our sales~~EPA ~~generally~~and state, local and other authorities. AIn ~~reduction~~many inareas, ~~our international~~these ~~sales~~laws ~~would~~and ~~likely~~regulations ~~adversely~~are ~~affect~~becoming ~~our~~increasingly ~~margins~~stringent. InFailure ~~addition,~~to ~~our~~comply ~~international~~with ~~activities expose~~these laws and regulations can have serious consequences for us, including criminal as well as civil and administrative penalties and negative publicity. We have incurred and will continue to ~~risks~~incur ~~not~~significant ~~faced~~capital byand ~~companies~~operating ~~that~~expenditures ~~limit~~to ~~themselves~~adapt to ~~the~~more ~~domestic market~~stringent regulations and to avoid violations of these laws and regulations. ~~One~~ ~~significant~~Additional ~~risk~~environmental isrequirements ~~that~~imposed in the ~~international~~ ~~operations~~future could result in currently unanticipated investigations, assessments or expenditures, and may berequire ~~affected~~us byto ~~tariffs~~incur significant additional costs. Because the nature of these potential future charges is unknown, ~~other~~management ~~trade~~is ~~protection~~not ~~or food~~able ~~safety~~to ~~measures~~estimate the magnitude of any future costs and ~~import~~we orhave ~~export~~not ~~licensing~~accrued ~~requirements~~any reserve for any potential future costs.

AnSome ~~example~~of our facilities have been in operation for many years. During that time, we and previous owners of athese ~~risk~~facilities ~~related to~~have ~~our~~generated ~~international~~and ~~operations~~disposed isof ~~BSE~~wastes that are or may be considered hazardous or may have polluted the soil or groundwater at our facilities, asincluding ~~discussed~~adjacent ~~above~~properties. The discovery of previously unknown contamination of property underlying or in ~~Item~~the 1vicinity of our present or former properties or manufacturing facilities and/or waste disposal sites could require us to incur material unforeseen expenses. Occurrences of any of these events may have a material adverse effect on our business, ~~Business~~financial —condition, ~~Industry~~results ~~Overview~~of —operations ~~Beef~~and ~~Export~~cash ~~Markets~~flows.

~~Other risks~~In ~~associated~~most ~~with~~locations, our ~~international~~processing ~~activities~~facilities ~~include:~~rely on municipal or other regional governmental agencies for our water supply and for the treatment of our wastewater discharges. These entities themselves are subject to environmental laws regarding the quality of their water discharges, and must meet permit limits. If permit limits become more stringent, upgrades and capital improvements to these municipal treatment facilities are likely. In those locations where we are a significant volume discharger, it is possible we may be asked to contribute toward the costs of such upgrades, or we may become subject to significant increases in water or sewer charges in order for such upgrade costs to be recouped.

~~· changes~~Our ~~in foreign~~indebtedness ~~currency~~could ~~exchange~~adversely ~~rates~~affect ~~and~~our ~~inflation~~business orand ~~deflation~~our inliquidity ~~the foreign countries in which we operate;~~position.

~~· the~~As ~~closing~~of August 27, 2011, we had $360.4 million of ~~borders~~ bylong-term ~~foreign~~debt, ~~countries~~of towhich ~~the~~$38.5 ~~import~~million was classified as a current liability. As of August 27, 2011, our ~~products~~Credit ~~due~~Facility toconsisted ~~disease~~of ~~or other~~a ~~perceived~~$375.0 ~~health~~million orterm ~~food~~loan, ~~safety~~$342.3 ~~issues;~~million of which was outstanding, a $250.0 million revolving line of credit loan, which had no outstanding borrowings, outstanding letters of credit of $24.1 million and available borrowings of $225.9 million, based on the most restrictive financial covenant calculations. In addition, as of August 27, 2011, we had outstanding industrial revenue bonds of $12.2 million and capital leases and other obligations of $5.9 million.

~~· exchange controls;~~Our indebtedness may increase from time to time in the future for various reasons, including fluctuations in operating results, working capital requirements, capital expenditures and potential acquisitions.

~~· changes~~Our indebtedness, together with additional future indebtedness we may incur, and restrictive covenants contained in ~~tariffs;~~ the Credit Facility could:

~~· changes~~• ~~in political~~make orit ~~economic~~difficult ~~conditions~~for inus ato ~~specific~~satisfy ~~country~~our ~~or region~~obligations, ~~particularly in~~including ~~emerging~~making ~~markets~~interest payments on our debt obligations;

~~· trade restrictions imposed by countries with respect to the importation of our products, including actions taken in connection with trade disputes;~~15

~~· potentially negative~~Table ~~consequences~~of ~~from changes in regulatory requirements; and~~Contents

~~· international conflict,~~• ~~including~~limit ~~terrorist~~our ~~acts,~~ability ~~which~~to ~~could~~obtain ~~significantly~~additional ~~impact~~financing ~~our financial~~to ~~condition~~operate ~~and~~our ~~results of operations.~~business;

~~The occurrence~~• ofrequire ~~any~~us ofto ~~these~~dedicate ~~events~~a ~~could~~substantial ~~increase~~portion of our ~~costs,~~cash ~~lower~~flow ~~demand~~to ~~for our~~payments ~~products~~on orour ~~limit~~debt, reducing our ~~operations,~~ability ~~which~~to ~~could~~use ~~have~~our acash ~~material~~flow ~~adverse effect~~to onfund ~~our~~capital ~~business,~~expenditures ~~financial~~and ~~condition,~~working ~~results~~capital ofand ~~operations~~other ~~or prospects.~~general operational requirements;

17• limit our flexibility to plan for and react to changes in our business and the beef processing industry;

~~Table~~• place us at a competitive disadvantage relative to some of ~~Contents~~ our competitors that have less debt than us;

~~Compliance~~• ~~with~~limit ~~environmental~~our ~~regulations~~ability ~~could result in significant costs and failure~~ to ~~comply~~pursue ~~with~~acquisitions; ~~environmental regulations~~ and ~~our use of hazardous substances, including at National Beef Leather’s tannery facility, could result in civil as well as criminal penalties, liability for damages and negative publicity.~~

~~Our operations~~• ~~are~~increase ~~subject~~our tovulnerability ~~extensive and increasingly stringent regulations, including those relating~~ to ~~wastewater~~general ~~and~~adverse ~~stormwater~~economic ~~discharges, air emissions, waste handling~~ and ~~disposal~~industry ~~and remediation of soil and groundwater contamination that are administered by the U.S. Environmental Protection Agency~~conditions, or EPA and state, local and other authorities. In many areas, these laws and regulations are becoming increasingly stringent. Failure to comply with these laws and regulations can have serious consequences for us, including ~~criminal~~changes as well as civil and administrative penalties and negative publicity. We have incurred and will continue to incur significant capital and operating expenditures to adapt to more stringent regulations and to avoid violations of these laws and regulations. Additional environmental requirements imposed in ~~the~~interest ~~future~~rates, ~~could~~changes ~~result~~ in ~~currently~~cattle ~~unanticipated~~prices ~~investigations, assessments~~ or ~~expenditures,~~a ~~and~~downturn ~~may~~in ~~require~~our usbusiness toor ~~incur significant additional costs. Because~~ the ~~nature of these potential future charges is unknown, management is not able to estimate the magnitude of any future costs and we have not accrued any reserve for any potential future costs~~economy.

~~Some of~~The ~~our~~occurrence ~~facilities~~of ~~have~~any ~~been~~one ~~in operation for many years. During that time, we and previous owners~~ of these ~~facilities~~events ~~have~~could ~~generated and disposed of wastes that are or may be considered hazardous or may~~ have ~~polluted~~a ~~the~~material ~~soil~~adverse ~~or groundwater~~effect aton our ~~facilities~~business, ~~including~~financial ~~adjacent~~condition ~~properties.~~and ~~The~~results ~~discovery~~ of ~~previously~~ ~~unknown~~operations ~~contamination~~or ofcause ~~property~~a ~~underlying~~significant ordecrease in ~~the vicinity of~~ our ~~present~~liquidity ~~or former properties or manufacturing facilities~~ and~~/or~~ ~~waste disposal~~impair ~~sites~~our ~~could~~ability ~~require us~~ to ~~incur~~pay ~~material~~amounts ~~unforeseen~~due ~~expenses. Occurrences of any of these events may have a material adverse effect~~ on our ~~business,~~ ~~financial condition, results of operations and cash flows~~indebtedness.

InThe ~~most~~Credit ~~locations~~Facility contains, ~~our processing~~among ~~facilities~~other ~~rely~~things, onrestrictive ~~municipal~~covenants orthat ~~other~~will ~~regional~~limit ~~governmental agencies for~~ our ~~water supply~~ and ~~for the treatment of~~ our ~~wastewater~~subsidiaries’ ~~discharges.~~ability ~~These entities themselves are subject~~ to ~~environmental~~finance ~~laws~~future ~~regarding~~operations ~~the~~or ~~quality~~capital ~~of their~~needs ~~water~~or ~~discharges,~~to ~~and~~engage ~~must~~in ~~meet~~other ~~permit~~business ~~limits~~activities. The IfCredit ~~permit~~Facility ~~limits become more stringent~~restricts, ~~upgrades~~among ~~and~~other ~~capital improvements to these municipal treatment facilities are likely. In those locations where we are a significant volume discharger~~things, itour isability ~~possible~~and ~~we may be asked to contribute toward~~ the ~~costs~~ability of ~~such~~ ~~upgrades,~~our orsubsidiaries ~~we may become subject~~ to ~~significant increases in water or sewer charges in order for such upgrade costs to be recouped.~~:

As• ~~described~~incur inadditional ~~Item~~indebtedness 1,or ~~Business~~issue — Legal Proceedings, NBL, a wholly-owned subsidiary of NBP LLC, is a named defendant in two currently pending purported class actions involving NBL’s tannery located in St. Joseph, Missouri, which NBL purchased in March 2009. These lawsuits were filed on July 22, 2009 in the U.S. District Court for the Western District of Missouri. The lawsuits allege that NBL spread wastewater sludge containing hexavalent chromium in four counties in northwest Missouri. The plaintiffs are seeking an unspecified amount of damages for economic damages, punitive damages, diminished property values and medical monitoring. NBL believes it has meritorious defenses to the claims in the two lawsuits and intends to defend them vigorously.guarantees;

~~Our~~• ~~indebtedness~~create ~~could~~liens ~~adversely~~on ~~affect~~ our ~~business and our liquidity position.~~assets;

~~As of~~• ~~August~~make ~~28,~~distributions 2010, we had $246.5 million of long-term debt, of which $21.4 million was classified as a current liability. As of August 28, 2010, our Credit Facility consisted of a $375.0 million term loan, $200.0 million of which was outstanding, a $250.0 million revolving line of credit loan, which had outstanding borrowings of $27.0 million, outstanding letters of credit of $26.0 million and available borrowings of $197.0 million, based on ~~the~~or ~~most~~redeem ~~restrictive~~equity ~~financial covenant calculations. In addition, as of August 28, 2010, we had outstanding industrial revenue bonds of $12.2 million and capital leases and other obligations of $7.3 million.~~interests;

~~Our indebtedness~~• ~~may~~make ~~increase from time to time in the future for various reasons, including fluctuations in operating results, working capital requirements, capital expenditures and potential acquisitions.~~investments;

~~Our indebtedness,~~• ~~together~~transfer ~~with~~or ~~additional~~sell ~~future~~properties ~~indebtedness~~or weother ~~may~~assets; ~~incur,~~ and ~~restrictive covenants contained in the Credit Facility could:~~

18• engage in mergers, consolidations or acquisitions.

~~Table~~In ~~of Contents~~addition, the Credit Facility requires us to meet specified financial ratios and tests under certain circumstances.

~~· make~~If itour ~~difficult~~cash ~~for~~flow usand capital resources are insufficient to ~~satisfy~~fund our debt service obligations, ~~including~~we ~~making~~may ~~interest~~be forced to reduce or delay capital expenditures, sell material assets or operations, obtain additional capital or restructure debt. Our ability to generate cash and make scheduled payments or refinance our obligations depends on our ~~debt~~successful ~~obligations;~~financial and operating performance, which depend upon prevailing economic conditions and other factors, many of which are beyond our control.

~~· limit~~Our ~~our~~operating ~~ability~~results tocould ~~obtain~~be ~~additional financing~~negatively toimpacted ~~operate~~by our ~~business;~~hedging and derivative positions.

~~· require~~We ususe toderivative ~~dedicate~~financial ainstruments ~~substantial~~and ~~portion of~~other hedging strategies in an attempt to reduce our ~~cash~~exposure ~~flow~~to various market risks, including changes in commodity prices. We hold certain positions that do not qualify as hedges for financial reporting purposes. These positions are marked to ~~payments~~fair onvalue, ~~our~~and ~~debt~~the unrealized gains and losses are reported in earnings at each reporting date. Therefore, ~~reducing~~losses on these contracts will adversely affect our ~~ability~~reported tooperating results. The use of such instruments may ultimately limit our ~~cash flow~~ability to ~~fund~~benefit ~~capital~~from ~~expenditures~~favorable ~~and~~commodity ~~working~~price ~~capital~~movements, ~~and~~which ~~other~~may ~~general operational~~adversely ~~requirements;~~affect our reported operating results.

~~· limit~~We ~~our~~generally ~~flexibility~~do tonot ~~plan~~have ~~for~~long-term ~~and~~contracts ~~react to~~with ~~changes in~~ our ~~business~~customers, and, as a result, the prices at which we sell our beef ~~processing~~products ~~industry;~~are subject to market forces.

~~· place~~We usgenerally do not have long-term sales arrangements with our customers and, as a result, the prices at which we sell products to them are determined in large part by market forces. Our customers, mostly excluding those with which we have long-term contracts, place orders for products on an as-needed basis and, as a ~~competitive~~result, ~~disadvantage relative~~their order levels have varied from period to ~~some~~period in the past and may vary significantly in the future. The loss of one or more of our ~~competitors~~key ~~that~~customers, ~~have~~a ~~less~~significant ~~debt~~decline ~~than~~in ~~us;~~the number of orders from one or more of our key customers or a significant decrease in beef product prices for a

~~· limit our ability to pursue acquisitions; and~~16

~~· increase~~Table ~~our~~of ~~vulnerability to general adverse economic and industry conditions, including changes in interest rates, changes in cattle prices or a downturn in our business or the economy.~~Contents

~~The occurrence~~sustained ofperiod ~~any one~~ of ~~these~~time ~~events~~ could have a material adverse effect on our business, financial condition ~~and~~or results of operations ~~or cause a significant decrease in our liquidity and impair our ability to pay amounts due on our indebtedness~~.

~~The Credit Facility contains, among other things, restrictive covenants that will limit our and our subsidiaries~~Wal-Mart’s ~~ability~~failure to ~~finance~~continue ~~future~~purchasing ~~operations~~from orus ~~capital needs~~could orhave toa ~~engage~~material inadverse ~~other~~effect ~~business~~on ~~activities. The Credit Facility restricts, among other things,~~ our ~~ability and the ability of our subsidiaries to:~~sales.

~~· incur~~Sales ~~additional~~to ~~indebtedness~~Wal-Mart Stores, Inc., or ~~issue guarantees;~~Wal-Mart, and its affiliate, Sam’s Club, represented approximately 9% of our total net sales in fiscal year 2011. Our contractual agreement with Wal-Mart expired on January 31, 2004, and we have not entered into a new agreement. If Wal-Mart and its affiliates do not continue to purchase from us, it could have a material adverse effect on our sales, financial position, results of operations and cash flows.

~~· create~~We ~~liens~~are onsubject to extensive governmental regulation and our ~~assets;~~noncompliance with or changes in applicable requirements could adversely affect our business, financial condition, results of operations and cash flows.

· In addition to the environmental regulations discussed above, our operations are subject to extensive regulation and oversight by the USDA (including GIPSA), the FDA, and other state, local and foreign authorities regarding the processing, packaging, storage, distribution, advertising and labeling of our products, including food safety standards. Our domestic operations are subject to the PSA. This statute generally prohibits meat packers in the livestock industry from engaging in certain practices including violations of the PSA’s prompt payment provisions. In general (unless otherwise agreed in writing by our livestock suppliers), this statute requires us to make ~~distributions~~full payment for our livestock purchases in the case of cash sales before the close of the next business day following the purchase and transfer of possession of the livestock we purchase, or, in the case of a cash purchase on a carcass or ~~redeem~~‘‘grade ~~equity interests;~~and yield’’ basis, that we make full payment of the purchase price not later than the close of the first business day following determination of the purchase price. On June 22, 2010, GIPSA published a proposed rule that would add new regulations under the PSA. Among other things, the proposed rule would eliminate the requirement that GIPSA or livestock producers demonstrate competitive harm to prove violations of Sections 202(a) and 202(b) of the PSA, which sections limit unfair, unjustly discriminatory or deceptive practices and undue or unreasonable preferences or advantages in livestock purchasing practices. Elimination of this requirement could have a significant impact on cattle procurement and marketing practices in the beef processing industry. In particular, it could impair our ability to pay premiums for cattle that meet the quality standards for our value-added or export programs, thus affecting how we (i) procure cattle for these programs and (ii) process and market value-added and exported products. We cannot predict whether the proposed rule or some modified rule will be adopted or the extent of the effect of any such rule on the beef processing industry or on our operations or financial results.

~~· make~~Recently, ~~investments;~~the food safety practices and procedures in the meat processing industry have been subject to more intense scrutiny and oversight by the USDA. Food safety standards, processes and procedures are subject to the USDA Hazard Analysis Critical Control Point program, which includes compliance with the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. In hopes of reducing the development and spread to humans of dangerous antibiotic-resistant bacteria, the Obama administration announced in July 2009 that it would seek to ban routine use of antibiotics, which are fed to farm animals to encourage growth.

~~· transfer~~We are also subject to a variety of immigration, labor and worker safety laws and regulations, including those relating to the hiring and retention of employees. Our failure to comply with applicable laws and regulations could subject us to administrative penalties and injunctive relief, civil remedies, including fines, injunctions, interruption of our operations, recalls of our products or ~~sell~~seizures of our properties, as well as potential criminal sanctions or personal injury or other ~~assets;~~ damage claims. These remedies, changes in the applicable laws and regulations or discovery of currently unknown conditions could increase our costs and limit our business operations.

~~· engage~~Failure into ~~mergers~~successfully implement our business strategy may impede our plans to increase revenues, ~~consolidations~~margins ~~or acquisitions~~and cash flow.

~~In addition~~Our revenues, ~~the~~margins ~~Credit~~and ~~Facility~~cash ~~requires~~flows uswill not increase as planned if we fail to ~~meet~~implement ~~specified~~the ~~financial~~key ~~ratios~~ elements of our strategy, and ~~tests~~our ~~under~~ability ~~certain~~to ~~circumstances~~successfully implement this strategy is dependent at least in part on factors beyond our control. For example, the willingness of consumers to purchase value-added products depends in part on economic conditions. In periods of economic uncertainty, consumers tend to purchase more private label or less-expensive products. Thus, if we encounter periods of economic uncertainty, the sales volume for our value-added products could suffer. Also, we may not be successful in identifying favorable international expansion opportunities.

~~If our~~Changes ~~cash~~in ~~flow~~consumer ~~and~~preferences ~~capital~~could ~~resources~~adversely ~~are~~affect ~~insufficient to fund~~ our ~~debt service obligations, we may be forced to reduce or delay capital expenditures, sell material assets or operations, obtain additional capital or restructure debt~~business. Our ability to generate cash and make scheduled payments or refinance our obligations depends on our successful financial and operating performance, which depend upon prevailing economic conditions and other factors, many of which are beyond our control.

19The food industry in general is subject to changing consumer trends, demands and preferences. Our products compete with other protein sources, such as pork and poultry, and other foods. Trends within the food industry change often and our failure to anticipate, identify or react to changes in these trends could lead to, among other things, reduced demand and price

~~Table of Contents~~17

~~Our~~Table ~~operating~~of ~~results could be negatively impacted by our hedging and derivative positions.~~Contents

~~We use~~reductions ~~derivative~~for ~~financial~~our ~~instruments~~products, and ~~other~~could ~~hedging~~have ~~strategies~~a inmaterial anadverse ~~attempt to~~effect ~~reduce~~on our ~~exposure~~business, tofinancial ~~various~~condition, ~~market~~results ~~risks,~~of ~~including~~operations ~~changes~~and incash ~~commodity prices~~flows. WeIn ~~hold~~addition, ~~certain~~we ~~positions that~~ do not ~~qualify~~have asany ~~hedges~~other ~~for~~material ~~financial reporting~~lines ~~purposes.~~of ~~These~~business ~~positions~~or ~~are~~other ~~marked~~sources toof ~~fair~~revenue ~~value,~~to ~~and~~rely ~~the unrealized~~upon ~~gains~~if ~~and~~we ~~losses~~ are ~~reported~~unable into ~~earnings~~efficiently atprocess ~~each~~and ~~reporting~~sell ~~date. Therefore,~~beef ~~losses~~products onor ~~these~~if ~~contracts~~the ~~will~~market ~~adversely~~for ~~affect~~beef ~~our reported operating results~~declines. ~~The~~This ~~use~~lack of ~~such~~diversification ~~instruments~~means that we may ~~ultimately~~not ~~limit~~be ~~our~~able ~~ability~~ to ~~benefit~~adapt ~~from~~to ~~favorable~~changing ~~commodity~~market ~~price~~conditions ~~movements,~~or ~~which~~withstand ~~may~~any ~~adversely~~significant ~~affect our~~decline ~~reported~~in ~~operating~~the ~~results~~beef industry.

WeThe ~~generally~~beef doprocessing ~~not~~industry ~~have~~is ~~long-term~~highly ~~contracts~~competitive ~~with~~and our customers, ~~and, as~~might anot ~~result,~~continue ~~the~~to ~~prices~~purchase atour ~~which~~products from us or prices we ~~sell~~receive for our ~~beef~~ products ~~are~~could ~~subject~~fluctuate ~~to market~~or ~~forces~~be adversely impaired by actions taken by our competitors.

~~We generally~~The dobeef ~~not~~processing ~~have~~industry ~~long-term~~is ~~sales~~highly ~~arrangements with our customers and, as a result, the prices at which we sell products to them are determined in large part by market forces~~competitive. ~~Our~~Competition ~~customers,~~exists ~~mostly~~both ~~excluding those with which we have long-term contracts, place orders for products on an as-needed basis and, as a result, their order levels have varied from period to period~~ in the ~~past~~purchase ~~and may vary significantly in the future. The loss~~ of ~~one~~live orcattle ~~more~~and ~~of our key customers, a significant decline~~ in the ~~number~~sale of ~~orders~~beef ~~from~~products. ~~one~~In oraddition, ~~more of~~ our ~~key~~products ~~customers~~compete orwith a ~~significant~~number ~~decrease in beef product prices for a sustained period~~ of ~~time~~other ~~could~~protein ~~have a material adverse effect on our business~~sources, ~~financial~~ ~~condition~~including orpork ~~results~~and ~~of operations~~poultry.

~~Wal-Mart’s~~Our ~~failure~~principal competition arises from other beef processors, including Tyson Foods, Inc., Cargill Meat Solutions and JBS USA LLC. The principal competitive factors in the beef processing industry are price, quality, food safety, product distribution, technological innovations and brand loyalty. Our ability to ~~continue~~be ~~purchasing~~an ~~from~~effective uscompetitor ~~could~~will ~~have~~depend aon ~~material adverse~~our ~~effect~~ability to compete on the basis of these characteristics. Some of our ~~sales~~competitors have substantially larger beef operations, greater financial and other resources and wider recognition for their consumer branded products than we do. There can be no assurance that we will be able to compete effectively with these companies, and our ability to compete could be adversely affected by our debt levels.

~~Sales to~~Extreme ~~Wal-Mart~~weather ~~Stores, Inc.,~~ or ~~Wal-Mart,~~other ~~and~~forces ~~its~~beyond ~~affiliate, Sam’s Club, represented approximately 10% of~~ our ~~total~~control net sales in fiscal year 2010. Our contractual agreement with Wal-Mart expired on January 31, 2004, and we have not entered into a new agreement. If Wal-Mart and its affiliates do not continue to purchase from us, it could ~~have~~negatively aimpact ~~material adverse effect on~~ our ~~sales,~~ ~~financial position, results of operations and cash flows~~business.

WeNatural ~~are~~disasters, ~~subject~~fire, tobioterrorism, ~~extensive~~pandemic ~~governmental~~or ~~regulation~~extreme ~~and~~weather, ~~our noncompliance~~including ~~with~~droughts, floods, excessive cold or ~~changes~~heat, inhurricanes ~~applicable~~or ~~requirements~~other storms, could ~~adversely~~impair ~~affect~~ the health or growth of livestock or interfere with our ~~business~~operations due to power outages, ~~financial~~fuel ~~condition~~shortages, ~~results~~water ofshortages, ~~operations~~damage to our production and ~~cash~~processing ~~flows~~facilities or disruption of transportation channels, among other things. Any of these factors, as well as disruptions in our information systems, could have an adverse effect on our financial results.

InThe ~~addition~~sales to the environmental regulations discussed above, our operations are subject to extensive regulation and oversight by the USDA (including GIPSA), the FDA, and other state, local and foreign authorities regarding the processing, packaging, storage, distribution, advertising and labeling of our beef products, ~~including food safety standards. Our domestic operations~~ are subject to ~~the~~seasonal ~~PSA. This~~variations statute generally prohibits meat packers in the livestock industry from engaging in certain practices including violations of the PSA’s prompt payment provisions. In general (unless otherwise agreed in writing by our livestock suppliers), this statute requires us to make full payment for our livestock purchases in the case of cash sales before the close of the next business day following the purchase and ~~transfer of possession of the livestock we purchase~~, ~~or,~~as ~~in the case of~~ a ~~cash purchase on a carcass or ‘‘grade and yield’’ basis~~result, ~~that~~our wequarterly ~~make~~operating ~~full~~results ~~payment of~~may ~~the purchase price not later than the close of the first business day following determination of the purchase price~~fluctuate. ~~On June 22, 2010, GIPSA published a proposed rule that would add new regulations under the PSA. If adopted as written, the proposed rule appears to, among other things:~~

~~· eliminate~~The ~~the~~beef ~~requirement~~industry is characterized by prices that ~~GIPSA~~change orbased ~~livestock~~on ~~producers~~seasonal ~~demonstrate competitive~~consumption ~~harm~~patterns. toThe ~~prove~~highest ~~violations~~period of ~~Sections~~demand ~~202(a)~~for our products is usually the summer and ~~202(b)~~spring months when weather patterns permit more outdoor activities and there is increased demand for higher value items that are grilled, such as steaks. In addition, because of higher consumption, more favorable growing conditions and the ~~PSA~~housing of animals in feedlots for the winter months, ~~which~~ ~~sections~~there ~~limit~~are ~~unfair~~generally more cattle available in the summer and fall. As a result of these seasonal fluctuations, ~~unjustly~~our ~~discriminatory~~revenue orand ~~deceptive~~profitability ~~practices~~tend to be higher for our third and ~~undue~~ orfourth ~~unreasonable~~fiscal ~~preferences~~quarters orended ~~advantages~~May inand ~~livestock~~August, ~~purchasing practices;~~respectively, than for our first and second fiscal quarters ended November and February, respectively. However these seasonal patterns may vary substantially from year to year.

~~· require~~We ~~packers~~depend toon ~~maintain~~the ~~written~~service ~~records~~of ~~justifying~~key ~~deviations~~individuals, ~~from~~the ~~standard price~~loss orof ~~contract~~whom ~~terms~~could ~~offered~~materially toharm ~~livestock~~our ~~producers;~~business.

~~· prohibit~~Our ~~packers~~success ~~from~~will ~~purchasing~~depend, ~~cattle~~in ~~from~~part, on the efforts of our officers and other ~~packers~~key employees. In addition, the market for qualified personnel is competitive and our future success will depend on our ability to attract and retain these personnel. With the exception of our Chief Executive Officer, we do not have long-term employment agreements with our officers or ~~their~~maintain ~~affiliates;~~ key-person insurance on any officer. The loss of the services of any of our key employees or the failure to attract and retain employees could have a material adverse effect on our business, results of operations and financial condition.

~~· limit~~Our aperformance ~~packer’s~~depends ~~ability~~on tofavorable ~~purchase~~labor ~~cattle~~relations ~~through~~with ~~dealers~~our ~~operating~~employees. asAny ~~packer buyers~~deterioration of those relations or increase in labor costs could adversely affect our business.

20As of August 27, 2011, we had approximately 9,100 employees worldwide. Approximately 2,800 employees at our Liberal, Kansas facility are represented by the United Food and Commercial Workers International Union under a collective bargaining agreement that expires on December 16, 2012. Approximately 1,100 employees at our Brawley, California facility are jointly represented by the United Food and Commercial Workers International Union and Teamsters International Union under a collective bargaining agreement that expires on December 8, 2013. Approximately 90 employees at our St. Joseph, Missouri facility are represented by the United Cereal Workers of the United Food and Commercial Workers International Union under a collective bargaining agreement scheduled to expire on May 18, 2014.

~~Table~~The employees at our Dodge City, Kansas facility have voted in favor of ~~Contents~~union representation in a two day National Labor Relations Board-supervised secret ballot election. The tally of ballots, released November 5, 2011, was in favor of

If adopted as written, the new regulations could have a significant impact on cattle procurement and marketing practices in the beef processing industry. In particular, if adopted as written, the proposed regulations could impair our ability to pay premiums for cattle that meet the quality standards for our value-added or export programs, thus affecting how we (i) procure cattle for these programs and (ii) process and market value-added and exported products. We cannot predict whether the proposed rule or some modified rule will be adopted or the extent of the effect of any such rule on the beef processing industry or on our operations or financial results.18

~~Recently, the~~Table food safety practices and procedures in the meat processing industry have been subject to more intense scrutiny and oversight by the USDA. Food safety standards, processes and procedures are subject to the USDA Hazard Analysis Critical Control Point program, which includes compliance with the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. In hopes of reducing the development and spread to humans of dangerous antibiotic-resistant bacteria, the Obama administration announced in July 2009 that it would seek to ban routine use of antibiotics, which are fed to farm animals to encourage growth.Contents

~~We are~~representation ~~also~~by ~~subject~~the toUnited aFood ~~variety of immigration, labor~~ and ~~worker~~Commercial ~~safety~~Workers ~~laws~~International ~~and regulations,~~Union. The ~~including~~union ~~those~~has ~~relating~~been tocertified as the ~~hiring~~representative ~~and retention~~ of ~~employees. Our~~ ~~failure~~a tobargaining ~~comply~~unit ~~with applicable laws and regulations could subject us to administrative penalties and injunctive relief, civil remedies, including fines, injunctions, interruption~~ of ~~our~~approximately ~~operations~~2,600 ~~recalls~~employees ofin ~~our~~production ~~products~~and ~~or seizures of our properties~~maintenance, asshipping ~~well~~and ~~as potential criminal sanctions or personal injury or other damage claims. These remedies~~receiving, ~~changes~~grounds inkeeping ~~the applicable laws~~ and ~~regulations or~~the ~~discovery~~warehouse. The ofelection ~~currently~~was ~~unknown~~conducted ~~conditions~~on ~~could~~November ~~increase~~3, ~~our~~2011 ~~costs~~ and ~~limit our~~November ~~business~~4, ~~operations~~2011.

~~Failure~~A labor-related work stoppage by our unionized employees could limit our ability to ~~successfully~~process ~~implement~~and ship our ~~business~~products ~~strategy~~or ~~may~~increase ~~impede~~our costs, which could adversely affect our ~~plans~~ results of operations and financial condition. In addition, it is possible that any labor union efforts to organize employees at our non-unionized facilities might be successful and that any labor-related work stoppages at these non-unionized facilities in the future could adversely affect our results of operations and financial condition. In general, any significant increase ~~revenues~~in labor costs, ~~margins~~deterioration of employee relations, slowdowns or work stoppages at any of our locations, whether due to union activities, employee turnover or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash ~~flow~~flows.

~~Our revenues,~~The ~~margins~~consolidation ~~and cash flows will not increase as planned if we fail to implement the key elements~~ of our ~~strategy,~~retail and ~~our~~food ~~ability~~service tocustomers ~~successfully implement~~may ~~this~~put ~~strategy~~pressures ~~is dependent at least in part~~ on ~~factors beyond~~ our ~~control. For~~ ~~example,~~operating ~~the willingness of consumers to purchase value-added products depends in part on economic conditions~~margins. In periods of economic uncertainty, consumers tend to purchase more private label or less-expensive products. Thus, if we encounter periods of economic uncertainty, the sales volume for our value-added products could suffer. Also, we may not be successful in identifying favorable international expansion opportunities.

~~Changes~~In recent years, the trend among our retail and food service customers, such as supermarkets, warehouse clubs and food service distributors, has been towards consolidation. These consolidations, along with the entry of mass merchants into the grocery industry, have resulted in ~~consumer~~customers ~~preferences~~with ~~could~~increasing ~~adversely~~negotiating ~~affect~~strength ~~our~~who tend to exert pressure on us with respect to pricing terms, product quality and new products. As the customer base continues to consolidate, competition for the business of fewer customers is expected to intensify. If we do not negotiate favorable terms of sale with our customers and implement appropriate pricing to respond to these trends, or if we lose our existing large customers, our profitability could decrease.

~~The food~~We ~~industry~~may innot ~~general~~be isable ~~subject~~ to ~~changing~~successfully ~~consumer~~complete ~~trends~~acquisitions, ~~demands~~affecting ~~and preferences.~~our ~~Our~~ability ~~products~~to ~~compete with other protein sources~~grow, ~~such~~or asintegrate ~~pork~~completed and ~~poultry,~~ ~~and~~future ~~other foods. Trends within the food industry change often and our failure to anticipate~~acquisitions, ~~identify~~which orcould ~~react~~result ~~to changes~~ in ~~these~~failure ~~trends could lead~~ to, ~~among~~achieve ~~other things, reduced demand and price reductions for~~ our ~~products, and~~expected ~~could~~acquisition ~~have a material adverse effect on our business~~benefits, ~~financial~~the ~~condition, results~~disruption of ~~operations~~our ~~and cash flows. In addition, we do not have any other material lines of~~ business ~~or other sources of revenue to rely upon if we are unable to efficiently process~~ and ~~sell~~an ~~beef~~increase ~~products or if the market for beef declines. This lack of diversification means that we may not be able to adapt to changing market conditions or withstand any significant decline~~ in ~~the~~our ~~beef industry~~costs.

~~The~~We ~~beef~~continually ~~processing~~explore ~~industry~~opportunities isto ~~highly~~acquire ~~competitive~~related ~~and~~businesses, ~~our~~some ~~customers might~~of ~~not~~which could be material to us. Our ability to continue to ~~purchase~~grow ~~our~~may ~~products~~depend ~~from~~upon usidentifying orand ~~prices~~successfully weacquiring ~~receive~~attractive ~~for our~~companies, ~~products~~effectively ~~could~~integrating ~~fluctuate~~these orcompanies, beachieving ~~adversely~~cost ~~impaired~~efficiencies byand ~~actions~~managing ~~taken~~these bybusinesses as part of our ~~competitors~~ Company.

~~The beef~~We ~~processing~~may ~~industry~~not isbe ~~highly~~able ~~competitive.~~to ~~Competition~~effectively ~~exists~~execute ~~both~~on inacquisitions ~~the purchase~~or ofintegrate ~~live~~acquired ~~cattle~~companies and insuccessfully implement appropriate operational, financial and management systems and controls to achieve the ~~sale~~benefits expected to result from these acquisitions. Our efforts to integrate these businesses could be affected by a number of ~~beef~~factors ~~products~~beyond our control, such as regulatory developments, general economic conditions and increased competition. In addition, the process of integrating these businesses could cause the interruption of, or loss of momentum in, the activities of our ~~products~~ ~~compete~~existing business. The diversion of management’s attention and any delays or difficulties encountered in connection with athe ~~number~~integration of ~~other~~these ~~protein~~businesses ~~sources,~~or ~~including~~relating ~~pork~~to legacy liabilities of businesses acquired by us could negatively impact our business and ~~poultry~~ results of operations. Further, the benefits we anticipate from acquisitions may not develop.

Our ~~principal~~ ~~competition~~operations ~~arises from other beef processors, including Tyson Foods, Inc., Cargill Meat Solutions and JBS USA LLC. The principal competitive factors in the beef processing industry~~ are ~~price,~~subject ~~quality, food safety, product distribution, technological innovations and brand loyalty. Our ability~~ to ~~be an effective competitor will depend on our ability to compete on~~ the ~~basis~~general ~~of these~~risks ~~characteristics. Some~~ of ~~our competitors have substantially larger beef operations, greater financial and other resources and wider recognition for their consumer~~ litigation.

21We are involved on an ongoing basis in litigation arising in the ordinary course of business or otherwise. Trends in litigation may include class actions involving consumers, employees or injured persons, and claims related to commercial, labor, employment, antitrust, securities or environmental matters. These actions could also divert the attention of our management team and expose us to significant liability and adverse publicity, which might adversely affect our brands, reputation and/or customer preference for our products. Due to the unpredictable nature of litigation, it is not possible to predict the ultimate outcome of any potential lawsuits, and we may be held liable for significant judgments, or other losses, that are not fully covered by our insurance, and could have a material adverse effect on our business.

~~Table~~Deterioration of ~~Contents~~ economic conditions could negatively impact our business.

~~branded~~Our ~~products~~business ~~than~~may webe ~~do.~~adversely Weaffected ~~cannot~~by ~~assure you~~changes ~~that~~in wenational ~~will~~or beglobal ~~able~~economic toconditions, ~~compete~~including ~~effectively~~inflation, ~~with~~interest ~~these~~rates, ~~companies~~availability of capital markets, consumer spending rates, energy availability and ~~our ability~~costs (including fuel surcharges) and the effects of governmental initiatives to ~~compete~~manage ~~could~~economic beconditions. Any such changes could adversely ~~affected~~affect bythe demand for our ~~significant~~products ~~debt~~or ~~levels~~the cost and availability of our needed raw materials and packaging materials, thereby negatively affecting our financial results.

~~Extreme~~A ~~weather~~downturn orin ~~other~~the ~~forces~~U.S. ~~beyond~~economy may result in reduced demand for certain of our ~~control~~products, downward pressure on prices and shifts to less profitable private label products. Moreover, any material reduction in demand for our products in our key export markets (Japan and South Korea) could ~~negatively impact~~have an adverse effect on our ~~business~~results of operations.

Natural disasters, fire, bioterrorism, pandemic or extreme weather, including droughts, floods, excessive cold or heat, hurricanes or other storms, could impair the health or growth of livestock or interfere with our operations due to power outages, fuel shortages, water shortages, damage to our production and processing facilities or disruption of transportation channels, among other things. Any of these factors, as well as disruptions in our information systems, could have an adverse effect on our financial results.19

~~The~~Table ~~sales~~ of ~~our beef products are subject to seasonal variations and, as a result, our quarterly operating results may fluctuate.~~Contents

The ~~beef~~recent ~~industry~~disruptions ~~is characterized by prices that change based on seasonal consumption patterns. The highest period of demand for our products is usually the summer~~ and ~~spring~~instability ~~months~~in ~~when~~credit ~~weather patterns permit more outdoor activities~~ and ~~there~~ isother ~~increased~~financial ~~demand~~markets ~~for higher value items that are grilled, such as steaks. In addition, because of higher consumption, more favorable growing conditions~~ and ~~the~~deterioration ~~housing~~ of ~~animals~~national ~~in feedlots for the winter months, there are generally more cattle available in the summer~~ and ~~fall.~~global Aseconomic ~~a result of these seasonal fluctuations~~conditions, ~~our revenue and profitability tend to be higher for our third and fourth fiscal quarters ended May and August~~could, ~~respectively, than~~among ~~for~~other ~~our first and second fiscal quarters ended November and February, respectively. However these seasonal patterns may vary substantially from year to year.~~things:

We• ~~depend~~make onit ~~the~~more ~~service~~difficult ofor ~~key~~costly ~~individuals,~~for ~~the~~us ~~loss~~to ofobtain ~~whom~~financing ~~could materially~~for ~~harm~~our operations or investments or to refinance our ~~business.~~debt in the future;

~~Our success~~• ~~will~~cause ~~depend, in part, on the efforts of~~ our ~~officers~~lenders ~~and~~to ~~other~~depart ~~key employees. In~~from ~~addition,~~prior ~~the~~credit ~~market~~industry ~~for qualified~~practice ~~personnel is competitive~~ and ~~our~~make ~~future~~more ~~success~~difficult ~~will~~or ~~depend~~expensive ~~on our ability to attract and retain these personnel. With~~ the ~~exception~~granting of ~~our~~any ~~Chief Executive~~technical ~~Officer,~~or weother dowaivers ~~not~~under ~~have~~our ~~long-term~~credit ~~employment~~ agreements ~~with~~to ~~our officers or maintain key-person insurance on any officer. The loss of~~ the ~~services~~extent ofwe ~~any~~may ofseek ~~our~~them ~~key employees~~in or the ~~failure to attract and retain employees could have a material adverse effect on our business, results of operations and financial condition.~~future;

~~Our~~• ~~performance~~impair ~~depends~~the onfinancial ~~favorable~~condition ~~labor~~of ~~relations~~some ~~with~~of our ~~employees.~~ ~~Any~~customers, ~~deterioration~~suppliers ofor ~~those~~counterparties ~~relations~~to orour ~~increase~~derivative ininstruments, ~~labor~~thereby ~~costs could~~increasing ~~adversely~~customer ~~affect~~bad debts, non-performance by suppliers or counterparty failures negatively impacting our ~~business.~~treasury operations; and

~~As of~~• ~~August~~negatively ~~28,~~impact ~~2010,~~global wedemand ~~had~~for ~~approximately~~beef 9products,~~100~~ ~~employees~~which ~~worldwide. Approximately~~could ~~2,700~~result ~~employees~~in ~~at our Liberal, Kansas facility are represented by the United Food and Commercial Workers International Union under~~ a ~~collective~~ ~~bargaining~~reduction agreement that expires on December 16, 2012. Approximately 1,100 employees at our Brawley, California facility are jointly represented by the United Food and Commercial Workers International Union and Teamsters International Union under a collective bargaining agreement that expires on December 8, 2013. Approximately 80 employees at our St. Joseph, Missouri facility are represented by the United Cereal Workers of ~~the United Food and Commercial Workers International Union under a collective bargaining agreement scheduled to expire on May 18~~sales, ~~2014.~~operating Inincome ~~November 2009, the United Food~~ and ~~Commercial~~cash ~~Workers Union filed a petition with the Regional Office of the National Labor Relations Board in Kansas City, Missouri seeking to represent employees who work at our Dodge City, Kansas facility~~flows. ~~This union withdrew its petition in January 2010.~~

~~A labor-related~~Risks ~~work~~Related ~~stoppage by our unionized employees could limit our ability~~ to ~~process and ship our products or increase our costs, which could adversely affect our results of operations and financial condition~~U. In addition, it is possible that any labor union efforts to organize employees at our non-unionized facilities might be successful and that any labor-related work stoppages at these non-unionized facilities in the future could adversely affect our results of operations and financial conditionS. In ~~general,~~Premium any significant increase in labor costs, deterioration of employee relations, slowdowns or work stoppages at any of our locations, whether due to union activities, employee turnover or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash flows.Beef

22USPB has a majority interest in our Company and, through their representative on our Board of Managers, has the ability to significantly influence our business and affairs; USPB’s interests could conflict with other stakeholders.

~~Table~~USPB owns a majority interest in our Company of ~~Contents~~ approximately 69.3% of the Class B interests, as well as Class A and Class A-1 interests, with an aggregate face amount of approximately $150.5 million. As a result, USPB has the ability, through the actions of its representative on our Board of Managers, to cast the majority vote on many matters related to the business and affairs of our Company. However, pursuant to our limited liability company agreement, USPB’s ability to cause us to take certain major corporate actions without the consent of NBPCo Holdings and management is limited.

~~The~~We ~~consolidation~~purchase a portion of our ~~retail~~cattle through USPB and ~~food~~its ~~service~~producer-owners ~~customers~~and, because USPB has a majority interest in our Company, we may ~~put pressures~~not be able to resolve conflicts with respect to these purchases on ~~our~~the ~~operating~~most ~~margins~~favorable terms to us.

~~In recent~~USPB's ~~years,~~producer-owners ~~the~~provided ~~trend~~us ~~among~~with ~~our~~approximately ~~retail~~20% ~~and~~of ~~food~~our ~~service~~cattle ~~customers,~~requirements ~~such~~in ~~as supermarkets,~~fiscal ~~warehouse~~year ~~clubs~~2011 ~~and~~through ~~food~~the ~~service~~pricing ~~distributors,~~grid ~~has~~process ~~been~~as ~~towards consolidation. These~~more ~~consolidations, along~~fully ~~with~~described ~~the~~in ~~entry~~Item ~~of mass merchants into the grocery industry~~13, ~~have~~Certain ~~resulted in~~Relationships ~~customers~~and ~~with~~Related ~~increasing~~Transactions. ~~negotiating~~Conflicts ~~strength~~of ~~who~~interest ~~tend~~may toarise ~~exert~~between ~~pressure~~USPB on and us ~~with~~relating ~~respect~~ to ~~pricing~~our ~~terms,~~cattle ~~product quality and new products~~purchases. As ~~the~~If ~~customer~~a ~~base~~dispute ~~continues~~arises ~~to consolidate~~with USPB, ~~competition for~~ the ~~business~~settlement of ~~fewer~~the ~~customers~~dispute ismay ~~expected~~not ~~to intensify. If~~be weon doterms ~~not~~as ~~negotiate~~ favorable ~~terms of sale with our customers and implement appropriate pricing~~ to ~~respond~~ tous ~~these~~as ~~trends, or~~ if we ~~lose~~were ~~our~~dealing ~~existing~~with ~~large~~an ~~customers,~~unaffiliated ~~our profitability could decrease~~party.

WeITEM ~~may~~1B. ~~not~~UNRESOLVED beSTAFF able to successfully complete acquisitions, affecting our ability to grow, or integrate completed and future acquisitions, which could result in failure to achieve our expected acquisition benefits, the disruption of our business and an increase in our costs.COMMENTS

~~We continually~~Not ~~explore opportunities to acquire related businesses, some of which could be material to us~~applicable. Our ability to continue to grow may depend upon identifying and successfully acquiring attractive companies, effectively integrating these companies, achieving cost efficiencies and managing these businesses as part of our Company.

~~We may~~ITEM not be able to effectively execute on acquisitions or integrate acquired companies and successfully implement appropriate operational, financial and management systems and controls to achieve the benefits expected to result from these acquisitions2. ~~Our~~ efforts to integrate these businesses could be affected by a number of factors beyond our control, such as regulatory developments, general economic conditions and increased competition. In addition, the process of integrating these businesses could cause the interruption of, or loss of momentum in, the activities of our existing business. The diversion of management’s attention and any delays or difficulties encountered in connection with the integration of these businesses or relating to legacy liabilities of businesses acquired by us could negatively impact our business and results of operations. Further, the benefits we anticipate from acquisitions may not develop.PROPERTIES

~~Our~~We ~~operations~~own ~~are~~our ~~subject~~Liberal, toKansas, ~~the~~Dodge ~~general~~City, ~~risks~~Kansas, Brawley, California, Hummels Wharf, Pennsylvania, Moultrie, Georgia, and St. Joseph, Missouri facilities, as well as our National Carriers headquarters in Irving, Texas. We lease our headquarters facility in Kansas City, Missouri (which includes approximately 27,200 square feet of ~~litigation~~office space), and our Kansas City Steak processing facility in Kansas City, Kansas. We also have short-term leases in place for our offices in Chicago, Illinois, Denison, Iowa, Springdale, Arkansas, Tokyo, Japan, Seoul, South Korea, and Guangzhou, China. The Credit Facility is secured by a first priority lien on substantially all of our real and personal property. The table below provides additional information regarding our primary facilities:

We are involved on an ongoing basis in litigation arising in the ordinary course of business or otherwise. Trends in litigation may include class actions involving consumers, stockholders, employees or injured persons, and claims related to commercial, labor, employment, antitrust, securities or environmental matters. These actions could also divert the attention of our management team and expose us to significant liability and adverse publicity, which might adversely affect our brands, reputation and/or customer preference for our products. Due to the unpredictable nature of litigation, it is not possible to predict the ultimate outcome of any potential lawsuits, and we may be held liable for significant judgments, or other losses, that are not fully covered by our insurance, which could have a material adverse effect on our business.



Location		Daily Processing Capacity
Processing Facilities (Core Beef):
Liberal, Kansas		6,000 head
Dodge City, Kansas		6,000 head
Brawley, California		2,000 head

~~Deterioration of economic conditions could negatively impact our business.~~20

~~Our business~~Table ~~may be adversely affected by changes in national or global economic conditions, including inflation, interest rates, availability~~ of capital markets, consumer spending rates, energy availability and costs (including fuel surcharges) and the effects of governmental initiatives to manage economic conditions. Any such changes could adversely affect the demand for our products or the cost and availability of our needed raw materials and packaging materials, thereby negatively affecting our financial results.Contents

A downturn in the U.S. economy may result in reduced demand for certain of our products, downward pressure on prices and shifts to less profitable private label products. Moreover, any material reduction in demand for our products in our key export markets (Japan and South Korea) could have an adverse effect on our results of operations.



Location		Approximate Square Footage
Case-Ready Facilities (Core Beef):
Hummels Wharf, Pennsylvania		90,000 square feet
Moultrie, Georgia		112 ,000 square feet
Tannery Facility (Core Beef):
St. Joseph, Missouri		221,000 square feet
Kansas City Steak Facility (Other):
Kansas City, Kansas		63,000 square feet

~~The recent~~ITEM ~~disruptions~~3. ~~and~~LEGAL ~~instability in credit and other financial markets and deterioration of national and global economic conditions, could, among other things:~~PROCEEDINGS

23For information regarding legal proceedings, see Note 12, Legal Proceedings, to our consolidated financial statements included in Item 8 of this report. In addition, see Item 1, Business — Regulation for information regarding information requests, investigations and proceedings pertaining to environmental matters.

~~Table of Contents~~21

~~· make~~Table itof ~~more difficult or costly for us to obtain financing for our operations or investments or to refinance our debt in the future;~~Contents

~~· cause~~PART our lenders to depart from prior credit industry practice and make more difficult or expensive the granting of any technical or other waivers under our credit agreements to the extent we may seek them in the future;II

~~· impair~~ITEM ~~the~~5. ~~financial condition~~MARKET ofFOR ~~some~~THE ofREGISTRANT’S ~~our~~COMMON ~~customers~~EQUITY, ~~suppliers~~RELATED orSTOCKHOLDER ~~counterparties~~MATTERS toAND ~~our derivative~~ISSUER ~~instruments,~~PURCHASES ~~thereby~~OF ~~increasing~~EQUITY ~~customer bad debts, non-performance by suppliers or counterparty failures negatively impacting our treasury operations; and~~SECURITIES

~~· negatively~~There ~~impact~~is ~~global demand~~no established public trading market for ~~beef~~any ~~products~~class of common equity of National Beef Packing Company, ~~which~~LLC. As ~~could~~of ~~result~~November 16, in2011, athere ~~reduction~~were four record holders of ~~sales~~Class A, ~~operating income~~Class A1 and/or ~~cash~~Class ~~flows~~B interests.

24Cash distributions are paid not later than 30 days after the close of the tax year quarter end to the interest holders of Class A and Class A1 shares on a priority basis, and to the holders of Class B shares to make tax payments, to the extent permitted by our senior lenders and the indenture governing our senior notes. See Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The payment of any other cash distributions would be made only from assets legally available for that purpose and would depend on the Company’s financial condition, results of operations, and other factors then deemed relevant by the Board of Managers.

~~Table~~During the Company's fiscal quarters ended February 26, 2011 and February 27, 2010, the Company paid cash distributions to certain members in the aggregate of ~~Contents~~$150 million and $15 million, respectively, in addition to its normal cash distributions to members for tax payments. The Company did not make any other special distributions during its two most recent fiscal years.

~~Risks~~For ~~Related~~a todiscussion ~~U.S.~~of ~~Premium~~equity ~~Beef~~compensation plans, see Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

USPB has a majority interest in our Company and, through their representative on our Board of Managers, has the ability to significantly influence our business and affairs; USPB’s interests could conflict with other stakeholders.22

~~USPB owns~~Table ~~a majority interest in our Company~~ of approximately 69.3% of the Class B interests, as well as Class A and Class A-1 interests, with an aggregate face amount of approximately $150.5 million,. As a result, USPB has the ability, through the actions of its representative on our Board of Managers, to cast the majority vote on many matters related to the business and affairs of our Company. However, pursuant to our limited liability company agreement, USPB’s ability to cause us to take certain major corporate actions without the consent of NBPCo Holdings and management is limited.Contents

WeITEM ~~purchase~~6. aSELECTED ~~portion~~FINANCIAL of our cattle through USPB and its producer-owners and, because USPB has a majority interest in our Company, we may not be able to resolve conflicts with respect to these purchases on the most favorable terms to us.DATA

~~USPB~~ The following table sets forth selected consolidated financial and ~~its~~other ~~producer-owners~~data ~~provided~~for, usand ~~with~~as ~~approximately~~of ~~20%~~the end of, ~~our~~each ~~cattle requirements~~of inthe fiscal years in the five-year ~~2010~~period ~~through~~ended ~~the~~August 27, ~~pricing~~2011. The ~~grid~~selected ~~process~~consolidated asfinancial ~~more~~information ~~fully described~~for inthe ~~Item~~five 13fiscal years ended August 27, ~~Certain~~2011 ~~Relationships~~(statement ~~and Related~~of ~~Transactions.~~operations ~~Conflicts~~data) and as of ~~interest~~the ~~may~~five ~~arise~~fiscal ~~between~~years ~~USPB~~ ended August 27, 2011, August 28, 2010, August 29, 2009, August 30, 2008, and usAugust ~~relating~~25, to2007 (balance sheet data) has been derived from our ~~cattle~~audited ~~purchases.~~consolidated Iffinancial astatements ~~dispute~~included ~~arises~~elsewhere ~~with~~in ~~USPB~~this filing or from prior years filing, which was adjusted for the ~~settlement~~ presentation requirements of ~~the~~Accounting ~~dispute~~Standards ~~may~~Codification ~~not~~(“ASC”) be810 on— ~~terms~~Consolidation, which aswas ~~favorable~~adopted toby usthe Company as ifof weAugust ~~were dealing~~30, 2009 with anretrospective ~~unaffiliated~~application ~~party~~to the historical years presented. Our fiscal year ends on the last Saturday in August.

~~ITEM~~The ~~1B.~~following ~~UNRESOLVED~~table ~~STAFF~~(amounts ~~COMMENTS~~in millions) should be read in conjunction with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8, Financial Statements and Supplementary Data (including the accompanying notes) contained elsewhere in this report.

Not applicable.



	52 weeks ended August 27, 2011			52 weeks ended August 28, 2010			52 weeks ended August 29, 2009			53 weeks ended August 30, 2008			52 weeks ended August 25, 2007
Statements of Operations Data
Net sales	$	6,849.5		$	5,807.9		$	5,449.3		$	5,847.3		$	5,578.5
Costs and expenses:
Cost of sales	6,473.3			5,438.0			5,187.1			5,612.4			5,444.0
Selling, general and administrative	52.0			49.3			43.1			43.7			42.5
Depreciation and amortization	51.2			49.6			44.4			36.4			32.4
Operating income	273.0			271.0			174.7			154.8			59.6
Other income (expense):
Interest income	—			—			0.2			0.5			0.7
Interest expense	(11.7		)	(14.8		)	(23.3		)	(34.0		)	(39.4		)
Other, net	0.2			(7.3		)	(6.5		)	5.7			1.3
Total other expense, net	(11.5		)	(22.1		)	(29.6		)	(27.8		)	(37.4		)
Income tax expense	2.5			0.9			0.9			1.8			1.9
Net income	259.0			248.0			144.2			125.2			20.3
Less net income attributable to noncontrolling interest in income of Kansas City Steak Company, LLC	(0.5		)	(0.9		)	(1.3		)	(0.7		)	(0.3		)
Net income attributable to controlling interest in income of consolidated entity	$	258.5		$	247.1		$	142.9		$	124.5		$	20.0
Selected Balance Sheet Data
Working capital (1)	$	233.2		$	180.2		$	145.0		$	209.6		$	249.3
Total assets	$	998.8		$	912.7		$	809.1		$	875.9		$	815.5
Long-term debt, including current maturities	$	360.4		$	246.5		$	298.8		$	377.8		$	438.8
Capital subject to redemption	$	351.1		$	291.7		$	183.4		$	186.5		$	76.9
Other Financial Data
Beef sold (pounds in billions)	4.0			4.1			3.9			4.0			4.1
Capital expenditures	$	68.3		$	49.5		$	40.8		$	59.9		$	41.7
Member distributions	$	290.1		$	147.0		$	78.3		$	43.1		$	22.1

~~ITEM 2. PROPERTIES~~______________________________

We own our Liberal, Kansas, Dodge City, Kansas, Brawley, California, Hummels Wharf, Pennsylvania, Moultrie, Georgia, and St. Joseph, Missouri facilities. We lease our headquarters facility in Kansas City, Missouri (~~which includes approximately 27,200 square feet of office space~~1) ~~and~~Working ~~our~~capital ~~Kansas~~represents ~~City~~the ~~Steak processing~~excess facility in Kansas City, Kansas. We also have short-term leases in place for our offices in Chicago, Illinois, Denison, Iowa, Dallas, Texas, Springdale, Arkansas, Tokyo, Japan, Seoul, South Korea, and Beijing, China. The Credit Facility is secured by a first priority lien on substantially all of ~~our~~current ~~real~~assets ~~and~~over ~~personal property. The~~current ~~table below provides additional information regarding our primary facilities:~~liabilities.

Location		Daily Processing Capacity
Processing Facilities (Core Beef):
Liberal, Kansas		6,000 head
Dodge City, Kansas		6,000 head
Brawley, California		2,000 head

Location		Approximate Square Footage
Case-Ready Facilities (Core Beef):
Hummels Wharf, Pennsylvania		79,000 square feet
Moultrie, Georgia		112 ,000 square feet
Tannery Facility (Core Beef):
St. Joseph, Missouri		221,000 square feet
Kansas City Steak Facility (Other):
Kansas City, Kansas		63,000 square feet

Table of Contents

25ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Table~~The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this report. In addition to historical information, the following discussion and other parts of ~~Contents~~ this report contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by such forward-looking information due to the factors discussed under Item 1A, Risk Factors, Item 7, Disclosure Regarding Forward-Looking Statements and elsewhere in this report.

~~ITEM~~Disclosure 3.Regarding ~~LEGAL~~Forward-Looking ~~PROCEEDINGS~~Statements

~~For~~This ~~information~~report ~~regarding~~contains ~~legal~~“forward-looking ~~proceedings~~statements,” ~~see Note~~which ~~12,~~are ~~Legal~~subject ~~Proceedings~~to a number of risks and uncertainties, tomany of which are beyond our ~~consolidated financial~~control. Forward-looking statements ~~included~~are typically identified by the words “believe,” “expect,” “anticipate,” “intend,” “estimate” and similar expressions. Actual results could differ materially from those contemplated by these forward-looking statements as a result of many factors, including economic conditions generally and in ~~Item~~our 8principal markets, the availability and prices of ~~this~~live ~~report. In~~cattle ~~addition~~and commodities, ~~see~~food ~~Item~~safety, 1livestock disease, ~~Business~~including ~~— Regulation~~the ~~for~~identification ~~information~~of ~~regarding~~cattle ~~information~~with ~~requests~~BSE, ~~investigations~~ competitive practices and ~~proceedings~~consolidation ~~pertaining~~in tothe cattle production and processing industries, actions of domestic or foreign governments, hedging risk, changes in interest rates and foreign currency exchange rates, consumer demand and preferences, the cost of compliance with environmental ~~matters~~and health laws, loss of key customers, loss of key employees, labor relations, and consolidation among our customers.

26In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking information contained in this report will in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Please review Item 1A, Risk Factors, included in this report, for other important factors that could cause actual results to differ materially from those in any such forward-looking statements.

~~Table of Contents~~Overview

~~PART~~We IIare one of the largest beef processing companies in the U.S., accounting for approximately 14% of the federally inspected steer and heifer slaughter during our fiscal year ended August 27, 2011 as reported by the USDA. We process, package and deliver fresh and frozen beef and beef by-products for sale to customers in the United States and international markets. Our products include boxed beef, ground beef, hides, tallow and other beef and beef by-products. In addition, we sell value-added beef and beef by-products, including branded boxed beef, case-ready beef, portion control beef and further processed hides. We market our products to retailers, food service providers, distributors, further processors and the United States military. We believe our relationship with USPB is a competitive advantage within the industry and provides us with a consistent and dependable supply of high-quality cattle, including for processing in value-added and other programs.

~~ITEM~~In 5July 1992, John R. ~~MARKET~~Miller, ~~FOR~~Timothy M. ~~THE~~Klein ~~REGISTRANT’S~~and ~~COMMON~~Scott H. ~~EQUITY~~Smith, ~~RELATED~~or ~~STOCKHOLDER~~the ~~MATTERS~~Management ~~AND~~Team, ~~ISSUER~~in ~~PURCHASES~~partnership OFwith ~~EQUITY~~Farmland ~~SECURITIES~~Industries, Inc., or Farmland, purchased the assets of Hyplains Dressed Beef, Inc. of Dodge City, Kansas. Upon completion of the purchase, the Management Team formed Hyplains Beef, LLC and commenced a $20.0 million expansion project to add boxed beef processing operations to the Dodge City facility. In December 1992, the management team assumed responsibility for the day-to-day operations of National Beef Packing Company, L.P. and, with Farmland, purchased its assets in April 1993. In 1995, Hyplains Beef, LLC and National Beef Packing Company, L.P. were merged into Farmland National Beef Packing Company, L.P., or FNBPC. In 1997, USPB purchased the interest in FNBPC then owned by the Management Team and became partners with Farmland.

~~There~~In isDecember 1997, noFNBPC ~~established~~acquired ~~public~~what ~~trading~~became ~~market~~a ~~for any~~75% ~~class~~interest ofin ~~common~~Kansas ~~equity~~City ofSteak ~~National~~Company, LLC, ~~Beef~~or ~~Packing~~Kansas ~~Company~~City Steak, ~~LLC~~a portion control steak cutting operation. AsIn ofMarch 2003, ~~October~~FNBPC 29acquired National Carriers, Inc., ~~2010~~or National Carriers, ~~there~~a ~~were~~refrigerated ~~four record~~and ~~holders~~livestock oftransportation ~~Class~~company, Afrom Farmland. Effective August 6, ~~Class~~2003, A1USPB ~~and/or~~acquired ~~Class~~a Bcontrolling ~~interests~~interest in FNBPC and formed NBP.

~~Cash~~Effective ~~distributions are paid not later than~~ May 30, ~~days after~~2006, NBP completed the ~~close~~acquisition of ~~the~~substantially ~~tax~~all ~~year~~of ~~quarter end to~~ the ~~interest~~assets ~~holders~~ of ~~Class~~Brawley ~~A and~~Beef, LLC ~~Class~~(Brawley A1Beef), ~~shares~~consisting onof a ~~priority basis, and to~~ state-of-the-art ~~holders~~beef ofprocessing ~~Class~~facility Bin ~~shares to~~Brawley, ~~make~~California ~~tax~~pursuant ~~payments,~~ to the ~~extent~~Contribution ~~permitted~~Agreement bywith ~~our~~Brawley ~~senior~~Beef ~~lenders~~ and ~~the indenture~~National ~~governing~~Beef ~~our~~California, LP, ~~senior~~or ~~notes~~NBC. ~~See~~ NBC ~~Item~~is ~~12,~~a ~~Security~~limited ~~Ownership~~partnership ~~of Certain~~formed ~~Beneficial~~with ~~Owners~~National ~~and~~Carriers, ~~Management~~a ~~and~~wholly-owned ~~Related~~subsidiary ~~Stockholder~~of ~~Matters. The~~NBP, ~~payment~~acting ofas ~~any~~its ~~other~~general ~~cash~~partner. ~~distributions would~~Brawley beBeef ~~made~~was ~~only~~an ~~from~~alliance ~~assets~~of ~~legally~~cattle ~~available~~producers ~~for~~in ~~that~~Arizona ~~purpose~~ and ~~would depend~~California onwho owned the ~~Company’s~~beef ~~financial~~processing ~~condition,~~facility ~~results of operations,~~ and ~~other factors~~supplied ~~then~~it ~~deemed~~with ~~relevant~~cattle. byThe ~~the~~facility ~~Board~~commenced ofoperations ~~Managers~~in December 2001.

~~For a discussion of equity compensation plans, see Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.~~24

27Table of Contents

~~Table~~National Beef Leathers, LLC, a wholly-owned subsidiary of ~~Contents~~ NBP, purchased certain assets of a wet blue tannery located in St. Joseph, Missouri from Prime Tanning in March 2009.

~~ITEM~~Financial 6.Statement ~~SELECTED FINANCIAL DATA~~Accounts

~~The following~~Net ~~table~~Sales. Our ~~sets~~net ~~forth~~sales ~~selected~~are ~~consolidated~~generated ~~financial~~from sales of boxed beef, case-ready beef, chilled and ~~other~~frozen ~~data~~export ~~for~~beef, portion control beef and asbeef ofby-products. ~~the~~Our ~~end~~net ~~of,~~sales ~~each~~are ofaffected by the ~~fiscal~~volume ~~years~~of inanimals processed and the ~~five-year~~value ~~period~~we ~~ended August~~extract ~~28,~~from ~~2010~~each animal. The ~~selected consolidated~~value ~~financial~~we ~~information~~extract ~~for~~from ~~the~~cattle ~~three~~processed, ~~fiscal~~referred ~~years~~to ~~ended~~as ~~August~~the 28cut-out value, ~~2010~~ ~~(statement~~is ofaffected ~~operations~~by ~~data)~~beef prices and product mix, as ofvalue-added ~~the~~products ~~fiscal~~and ~~years~~export ~~ended~~sales ~~August~~typically ~~28, 2010~~generate higher prices and ~~August~~operating ~~29,~~margins. Our ~~2009~~value-added ~~(balance~~products ~~sheet~~contribute ~~data)~~significantly ~~has~~more, ~~been~~in ~~derived~~terms ~~from~~of profits, than our ~~audited consolidated~~traditional ~~financial~~boxed ~~statements~~beef ~~included~~products ~~elsewhere~~and inare ~~this~~an ~~filing~~important component of our profitability. ~~The~~Wholesale ~~selected~~beef ~~consolidated~~prices ~~financial information~~fluctuate ~~for~~seasonally ~~the~~because ~~two~~of ~~fiscal~~higher ~~years~~demand ~~ended~~during ~~August~~the ~~25,~~summer ~~2007~~months. Wholesale ~~(statements~~beef ~~of operations~~prices ~~data)~~also ~~and~~fluctuate asbecause of ~~the~~changes ~~fiscal~~in ~~years~~supply ~~ended~~and ~~August~~demand ~~28,~~for ~~2008,~~competing ~~August~~proteins ~~25, 2007,~~ and ~~August~~other 26foods, ~~2006~~as ~~(balance~~well ~~sheet~~as ~~data)~~changes ~~has~~in ~~been~~cattle ~~derived~~supply, ~~from~~which ~~our audited~~have ~~financial~~typically ~~statements~~followed ~~for~~a ~~those~~ten ~~years~~to ~~which~~twelve ~~are~~year ~~not~~cycle, ~~included~~consisting inof ~~this filing,~~about assix ~~adjusted~~to ~~for~~seven ~~the~~years ~~presentation~~of ~~requirements~~expansion offollowed ~~Accounting~~by ~~Standards Codification~~one ~~(“ASC”)~~to ~~810~~two —years ~~Consolidation, which~~of ~~was~~consolidation ~~adopted~~and bythree ~~the~~to ~~Company~~four asyears of ~~August 30,~~contraction. While ~~2009~~we ~~with~~expect ~~retrospective~~the ~~application~~supply of cattle to expand at some point in the ~~historical~~next few years, ~~presented~~we do not expect any growth in the near term. ~~Our~~In ~~fiscal~~addition, ~~year~~beef ~~ends~~and onby-product sales are affected by the ~~last~~general ~~Saturday~~economic ~~in August~~environment and other factors.

~~The following~~Cost ~~table~~of ~~(amounts~~Sales. Our incost ~~millions)~~of ~~should~~sales beis ~~read~~comprised inof ~~conjunction~~the ~~with~~cost ~~Item 7~~of livestock and plant costs such as labor, ~~Management’s~~packaging ~~Discussion~~and utilities, and ~~Analysis~~other facility expenses. Total livestock costs are a function of ~~Financial Condition~~the volume of animals processed and ~~Results~~the ofprice ~~Operations~~paid for each animal. Cattle prices vary over time and ~~Item~~are 8affected by production cycles, ~~Financial Statements~~weather, feed prices and ~~Supplementary~~other ~~Data~~factors ~~(including~~that affect the ~~accompanying~~supply ~~notes) contained~~of ~~elsewhere~~and demand for livestock. Cut-out value is a measure of the sales value of a beef carcass expressed on a per hundred weight basis. Historically, changes in ~~this~~cut-out ~~report~~values and corresponding livestock costs have been positively correlated.

	52 weeks ended			52 weeks ended			53 weeks ended			52 weeks ended			52 weeks ended
	August 28, 2010			August 29, 2009			August 30, 2008			August 25, 2007			August 26, 2006
Statements of Operations Data
Net sales	$	5,807.9		$	5,449.3		$	5,847.3		$	5,578.5		$	4,636.0
Costs and expenses:
Cost of sales	5,438.0			5,187.1			5,612.4			5,443.9			4,503.8
Selling, general and administrative	49.3			43.1			43.7			42.5			34.0
Depreciation and amortization	49.6			44.4			36.4			32.4			28.7
Operating income	271.0			174.7			154.8			59.7			69.5
Other income (expense):
Interest income	—			0.2			0.5			0.6			0.4
Interest expense	(14.8		)	(23.3		)	(34.0		)	(39.4		)	(32.0		)
Other, net	(7.3		)	(6.5		)	5.7			1.3			3.2
Total other expense, net	(22.1		)	(29.6		)	(27.8		)	(37.5		)	(28.4		)
Income tax expense	(0.9		)	(0.9		)	(1.8		)	(1.9		)	(1.5		)
Net income	248.0			144.2			125.2			20.3			39.6
Less net income attributable to noncontrolling interest in income of Kansas City Steak Company, LLC	(0.9		)	(1.3		)	(0.7		)	(0.3		)	(0.2		)
Net income attributable to controlling interest in income of consolidated entity	$	247.1		$	142.9		$	124.5		$	20.0		$	39.4
Selected Balance Sheet Data
Working capital (1)	$	180.2		$	145.0		$	209.6		$	249.3		$	196.7
Total assets	$	912.7		$	809.1		$	875.9		$	815.5		$	757.9
Long-term debt, including current maturities	$	246.5		$	298.8		$	377.8		$	438.8		$	378.7
Capital subject to redemption	$	291.7		$	183.4		$	186.5		$	76.9		$	72.2
Other Financial Data
Beef sold (pounds in billions)	4.1			3.9			4.0			4.1			3.7
Capital expenditures	$	49.5		$	40.8		$	59.9		$	41.7		$	34.5
Member distributions	$	147.0		$	78.3		$	43.1		$	22.1		$	17.7

Selling, General and Administrative Expenses. Selling expenses consist primarily of salaries, trade promotions, advertising, commissions and other marketing costs. General and administrative costs consist primarily of general management, insurance and professional expenses.

~~(1) Working~~Overall ~~capital~~Industry ~~represents the excess of current assets over current liabilities.~~Outlook

28Growing global demand and increases in beef exports continue to provide underlying demand support for record cattle and beef prices. Meanwhile, drought-accelerated placements continue to keep total cattle on feed supplies above the prior year, which is expected to continue through the first quarter of 2012. Herd liquidation in the southern plains continues to offset slight gains in other areas. The lack of any measurable moisture persists in limiting winter grazing while hay shortages keep beef cow culling very active in this very important cow-calf region. Nationally, the US cattle herd continues to shrink and is expected to keep the supply situation very supportive to cattle and beef prices through 2012 and potentially 2013.

~~Table~~Beef ~~of Contents~~Export Markets

~~ITEM~~Export 7markets for U.S. ~~MANAGEMENT’~~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. ~~DISCUSSION~~beef ~~AND~~from ~~ANALYSIS~~cattle OFaged ~~FINANCIAL~~20 ~~CONDITION~~months ~~AND~~and ~~RESULTS~~younger. South OFKorea ~~OPERATIONS~~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.

~~The following~~We ~~discussion~~cannot ~~should~~presently beassess ~~read~~the infull ~~conjunction~~economic ~~with~~impact ~~our~~of ~~consolidated financial~~the ~~statements~~consequences ~~and~~of ~~related~~BSE ~~notes~~on ~~and~~the ~~other~~U.S. ~~financial~~beef ~~information appearing~~packing ~~elsewhere~~industry inor ~~this~~on ~~report~~our operations. ~~In addition~~Existing toor ~~historical~~new ~~information,~~import ~~the~~restrictions ~~following~~or ~~discussion~~additional ~~and~~regulatory ~~other~~restrictions ~~parts~~or ~~of this~~disruptions ~~report~~in ~~contain~~domestic ~~forward-looking information that involves risks~~ and ~~uncertainties.~~ ~~Our~~foreign ~~actual~~consumer ~~results~~demand ~~could~~for ~~differ~~beef ~~materially~~may ~~from~~have ~~those anticipated~~a bymaterial ~~such~~adverse ~~forward-looking~~effect ~~information~~on ~~due~~our torevenues ~~the factors discussed under Item 1A, Risk Factors, Item 7, Disclosure Regarding Forward-Looking Statements~~ and ~~elsewhere~~ innet ~~this report~~income.

~~Disclosure Regarding~~In ~~Forward~~December 2010, the 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-~~Looking~~opening ~~Statements~~China’s market for U.S. beef under the age of 30 months in 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.

~~This~~In ~~report~~March ~~contains “forward-looking statements~~2011,” ~~which are subject to~~ a ~~number~~major ofearthquake ~~risks~~followed ~~and uncertainties, many of which are beyond our control. Forward-looking statements are typically identified~~ by the words “believe,” “expect,” “anticipate,” “intend,” “estimate” and similar expressions. Actual results could differ materially from those contemplated by these forward-looking statements as a ~~result~~tsunami ofhit ~~many factors, including economic conditions generally and in our principal markets,~~ the ~~availability~~east ~~and~~coast ~~prices~~ of ~~live~~Japan ~~cattle~~ and ~~commodities,~~caused ~~food~~significant ~~safety, livestock~~damage ~~disease,~~to including the identification of cattle with BSE, competitive practices and consolidation in the cattle production and processing industries, actions of domestic or foreign governments, hedging risk, changes in interest rates and foreign currency exchange rates, consumer demand and preferences, the cost of compliance with environmental and health laws, loss of key customers, loss of key employees, labor relations, and consolidation among our customers.

In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking information contained in this report will in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Please review Item 1A, Risk Factors, included in this report, for other important factors that could cause actual results to differ materially from those in any such forward-looking statements.25

~~Overview~~Table of Contents

Weparts ~~are one~~ of the ~~largest beef processing companies in the U~~country.~~S.,~~ A ~~accounting~~portion ~~for approximately 14%~~ of ~~the federally inspected steer and heifer slaughter during~~ our ~~fiscal~~export ~~year~~sales ~~ended~~are ~~August 28,~~delivered ~~2010 as reported by the USDA. We process, package and deliver fresh and frozen beef and beef by-products for sale~~ to ~~customers in the United States and international markets. Our products include boxed beef~~Japan, ~~ground beef, hides, tallow~~ and ~~other beef~~while ~~and beef by-products. In addition,~~ we ~~sell~~cannot ~~value-added~~presently ~~beef~~assess ~~and~~the ~~beef by-products,~~full ~~including branded boxed beef, case~~long-~~ready~~term ~~beef,~~economic ~~portion~~impact ~~control beef~~of ~~and~~the ~~further~~earthquake ~~processed hides. We market our products to retailers, food service providers, distributors, further processors~~ and ~~the~~tsunami ~~United~~on ~~States military. We believe~~ our ~~relationship with USPB is a competitive advantage within the industry and provides us with a consistent and dependable supply of high-quality cattle~~operations, ~~including~~so ~~for~~far ~~processing~~there inhave ~~value-added~~been ~~and~~few ~~other programs~~interruptions.

InCritical ~~July 1992,~~Accounting ~~John R.~~Policies ~~Miller, Timothy M. Klein~~ and Scott H. Smith, or the Management Team, in partnership with Farmland Industries, Inc., or Farmland, purchased the assets of Hyplains Dressed Beef, Inc. of Dodge City, Kansas. Upon completion of the purchase, the Management Team formed Hyplains Beef, LLC and commenced a $20.0 million expansion project to add boxed beef processing operations to the Dodge City facility. In December 1992, the management team assumed responsibility for the day-to-day operations of National Beef Packing Company, L.P. and, with Farmland, purchased its assets in April 1993. In 1995, Hyplains Beef, LLC and National Beef Packing Company, L.P. were merged into Farmland National Beef Packing Company, L.P., or FNBPC. In 1997, USPB purchased the interest in FNBPC then owned by the Management Team and became partners with Farmland.Estimates

29The following discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, our management evaluates and revises its estimates based on historical experience and other assumptions we believe are reasonable under the circumstances. Actual results may differ from those estimates. Changes in our estimates could materially affect our results of operations and financial condition for any particular period. Our fiscal year ends on the last Saturday in August. We believe our most critical accounting policies are as follows:

~~Table~~Allowance ~~of Contents~~for Returns and Doubtful Accounts. The allowance for returns and doubtful accounts reflects reserves for customer receivables to reduce receivables to amounts expected to be collected. Management uses significant judgment in estimating uncollectible amounts. In estimating uncollectible amounts, management considers factors such as current overall economic conditions, industry-specific economic conditions, historical customer performance, and anticipated customer performance. Specific accounts are also reviewed for collectability. While management believes these processes effectively address our exposure to doubtful accounts, changes in the economy, industry or specific customer conditions may require adjustment to the recorded allowance for doubtful accounts. Management uses significant judgment in estimating amounts expected to be returned. Management considers factors such as historical performance and customer conditions in estimating return amounts.

InInventory ~~December 1997,~~Valuation. Inventories ~~FNBPC~~consist ~~acquired~~primarily ~~what~~of ~~became~~meat ~~a 75%~~products ~~interest~~and insupplies. Product ~~Kansas~~inventories ~~City~~are ~~Steak~~considered ~~Company, LLC~~commodities ~~(Kansas~~and ~~City~~are ~~Steak)~~based on quoted commodity prices, ~~a portion~~which ~~control~~approximate ~~steak~~net ~~cutting~~realizable ~~operation~~value. In Supply ~~March 2003~~and other inventories are valued on the basis of first-in, ~~FNBPC~~first-out, ~~acquired~~specific ~~National~~or ~~Carriers~~average cost methods. Product inventories are relieved from inventory utilizing the first-in, ~~Inc~~ first-out method. Management periodically reviews inventory balances and purchase commitments to estimate if inventories will be sold at amounts (~~National~~net ~~Carriers~~of estimated selling costs), aless ~~refrigerated~~than ~~and~~their ~~livestock~~carrying ~~transportation~~amounts. ~~company,~~If actual results differ from ~~Farmland. Effective~~ ~~August 6,~~management ~~2003, USPB~~estimates ~~acquired~~with arespect ~~controlling~~to ~~interest~~the inselling ~~FNBPC~~of ~~and~~inventories ~~formed~~at ~~NBP~~amounts less than their carrying amounts, we would adjust our inventory balances accordingly.

~~Effective~~Goodwill ~~May 30,~~and ~~2006,~~Other ~~NBP completed~~Intangible ~~the acquisition~~Assets. We ofrecognize ~~substantially~~excess ~~all~~cost over the fair value of the net tangible and identifiable intangible assets ofacquired ~~Brawley~~in ~~Beef, LLC (Brawley~~a ~~Beef)~~reporting unit, ~~consisting~~and ofrecord athis ~~state-~~excess as goodwill. We calculate the fair value of- the~~-art~~ ~~beef~~applicable ~~processing~~reporting ~~facility~~unit ~~in Brawley,~~using ~~California~~estimates ~~pursuant~~of future cash flows. All of our goodwill has been allocated to the ~~Contribution~~Core ~~Agreement~~Beef segment. In accordance with ~~Brawley~~the ~~Beef~~ provisions included within Intangibles — Goodwill and ~~National~~Other ~~Beef~~under ~~California~~ASC 350, ~~LP,~~ orwe ~~NBC. NBC~~assess isgoodwill aand ~~limited~~other ~~partnership~~indefinite ~~formed~~life ~~with~~intangible ~~National~~assets ~~Carriers~~annually for impairment. If there is impairment, ~~a wholly-owned~~the ~~subsidiary~~carrying amount of ~~NBP,~~goodwill ~~acting~~and asother ~~its~~intangible ~~general~~assets ~~partner~~is written down to the implied fair value. For ~~Brawley~~goodwill, ~~Beef~~this ~~was an~~test ~~alliance~~involves ofcomparing ~~cattle~~the ~~producers~~fair invalue ~~Arizona~~of ~~and~~each ~~California~~reporting ~~who~~unit ~~owned~~to the ~~beef processing~~unit’s ~~facility~~book ~~and~~value ~~supplied~~to itdetermine ~~with~~if ~~cattle~~any impairment exists. Goodwill ~~The~~and ~~facility~~other ~~commenced operations~~indefinite inlife ~~December~~intangible assets were tested for impairment, and, as of August ~~2001~~27, 2011, management determined there was no impairment.

~~National~~Workers’ ~~Beef~~Compensation ~~Leathers~~Accrual. We incur certain expenses associated with workers’ compensation. In order to measure the expense associated with these costs, ~~LLC,~~ management must make a ~~wholly-owned subsidiary~~variety of ~~NBP,~~estimates ~~purchased~~including ~~certain~~employee ~~assets~~accidents ofincurred abut ~~wet~~not ~~blue~~yet ~~tannery~~reported ~~located~~to ~~in St~~us. ~~Joseph,~~ ~~Missouri~~The ~~from~~estimates ~~Prime~~used ~~Tanning~~by inmanagement ~~March 2009~~are based on our historical experience as well as current facts and circumstances.

~~Financial Statement~~Automobile ~~Accounts~~Liability Accrual. We incur certain expenses associated with automobile liability. In order to measure the expense associated with these costs, management must make a variety of estimates to determine the ultimate cost to us related to incurred accidents. The estimates used by management are based on our historical experience as well as current facts and circumstances.

~~Net~~Valuation ~~Sales. Our net sales are generated from sales~~ of ~~boxed~~Capital ~~beef,~~Subject ~~case-ready~~to ~~beef~~Redemption. Historically, ~~chilled~~NBP has ~~and~~had ~~frozen~~agreements ~~export~~whereby ~~beef, portion~~certain ~~control~~of ~~beef~~its ~~and~~members ~~beef~~have ~~by-products.~~had ~~Our net sales are affected by~~ the ~~volume~~ ofright ~~animals~~to ~~processed~~require ~~and~~that ~~the~~NBP repurchase ~~value~~their ~~we extract from each animal~~interests. ~~The~~This ~~value~~has weresulted ~~extract~~in ~~from~~a ~~cattle~~portion ~~processed, referred~~of toits asequity ~~the~~being ~~cut-out~~classified ~~value, is affected by beef prices and product mix,~~ as ~~value-added~~capital ~~products~~subject ~~and~~to ~~export sales typically generate higher prices and operating margins~~redemption. ~~Our~~At ~~value-added products~~any ~~contribute~~time ~~significantly~~after ~~more~~certain dates, inthe ~~terms~~earliest ofbeing ~~profits~~July 31, ~~than~~2010, ~~our~~the ~~traditional boxed~~latest ~~beef~~being ~~products~~July 31, ~~and~~2011, ~~are~~affiliates ~~an important component~~ of our ~~profitability. Wholesale~~President ~~beef~~and ~~prices~~Chief ~~fluctuate~~Executive ~~seasonally because~~Officer, ~~of higher demand during the summer months~~Timothy M. ~~Wholesale~~ ~~beef~~Klein, ~~prices also fluctuate because of changes in supply~~ and/or ~~demand~~NBPCo ~~for~~Holdings ~~competing~~have ~~proteins~~the ~~and~~right ~~other~~to ~~foods,~~require asthat ~~well as~~NBP ~~changes~~repurchase intheir ~~cattle supply~~interests, ~~which~~the ~~have~~value ~~typically followed a ten to twelve year cycle, consisting~~ of ~~about~~which ~~six~~is to ~~seven~~be ~~years~~determined ~~of expansion followed~~ by ~~one~~a ~~to two~~specified ~~years~~formula ofor ~~consolidation~~a ~~and~~mutually ~~three~~agreed ~~to four years of contraction~~process. ~~While~~If weNBP is ~~expect~~unable ~~the~~to ~~supply~~effect ofthe ~~cattle~~repurchase ~~to expand~~within ata ~~some~~specified ~~point~~time, in the ~~next~~requesting ~~few~~member(s) have ~~years,~~the weright doto ~~not~~cause ~~expect~~a ~~any~~sale ~~growth~~process into ~~the near term~~commence. InOn ~~addition~~April 13, ~~beef~~2009, ~~and by-product~~NBP entered ~~sales~~into ~~are~~two ~~affected~~Unit byRedemption Agreements (the ~~general~~“Unit ~~economic~~Redemption ~~environment and other factors.~~

Cost of Sales. Our cost of sales is comprised of the cost of livestock and plant costs such as labor, packaging and utilities, and other facility expenses. Total livestock costs are a function of the volume of animals processed and the price paid for each animal. Cattle prices vary over time and are affected by production cycles, weather, feed prices and other factors that affect the supply of and demand for livestock. Cut-out value is a measure of the sales value of a beef carcass expressed on a per hundred weight basis. Historically, changes in cut-out values and corresponding livestock costs have been positively correlated.26

~~Selling,~~Table ~~General and Administrative Expenses. Selling expenses consist primarily~~ of ~~salaries, trade promotions, advertising, commissions and other marketing costs. General and administrative costs consist primarily of general management, insurance and professional expenses.~~Contents

~~Overall~~Agreements”) ~~Industry~~pursuant ~~Outlook~~to Section 12.5 of NBP’s limited liability company agreement to redeem at agreed upon redemption prices all of the membership interests in NBP that were owned or controlled by NBP’s former Chief Executive Officer, John R. Miller, and an affiliate of its former General Counsel, Scott H. Smith, as well as 25% of the membership interests in NBP that were owned by affiliates of Mr. Klein. As a result, Mr. Miller and Mr. Smith and their affiliates received approximately $91.3 million and $22.8 million, respectively, for their units and are no longer members of NBP. Mr. Klein’s affiliates received approximately $11.4 million for their redeemed units. On June 2, 2010, NBP entered into a Unit Redemption Agreement to redeem at agreed upon redemption prices approximately 5% of the membership interests in NBP that were owned by Mr. Klein’s affiliates. As a result, Mr. Klein’s affiliates received $8.0 million for their redeemed units.

~~Cattle~~At onAugust 27, ~~feed~~2011, ~~supplies for~~ the ~~fall~~value ~~quarter~~of ~~are expected to be near prior year supplies although, active marketing during~~ the ~~summer~~capital ~~months~~subject ~~resulted~~to inredemption ~~cattle~~was ~~weights~~determined ~~below~~to ~~prior~~be ~~year weights~~$351.1 ~~and~~million, ~~fewer~~which ~~market~~was ~~ready~~equal ~~cattle~~to ~~than~~its incarrying ~~the fall of 2009~~value. ~~Nationally,~~The ~~beef~~total ~~cow~~value ~~and~~of ~~bull~~the ~~slaughter levels~~capital ~~remain~~subject ~~above~~to ~~prior~~redemption ~~year~~at ~~levels~~August 27, ~~resulting~~2011, inincreased ~~the~~by ~~continuation~~approximately ~~of herd liquidation~~$53. ~~Meanwhile,~~8 ~~rising~~million ~~grain prices~~through ~~have~~valuation ~~kept~~changes ~~expansion~~compared ofto ~~pork~~the ~~and~~value ~~poultry~~at ~~stable~~August 28, ~~and~~2010, ~~per~~resulting ~~capita~~in ~~animal protein~~the ~~supplies supportive to cattle and beef values~~$351. ~~Growing~~1 ~~global~~million ~~demand~~carrying ~~for~~value, ~~U.S.~~as ~~beef~~reflected ~~realized over~~in the ~~past~~accompanying 18consolidated ~~months~~balance issheet ~~expected~~as toof ~~continue~~August 27, ~~into calendar year~~ 2011. ~~Barring~~ Offsetting ~~significant~~the ~~deterioration~~change in ~~current economic~~the ~~conditions,~~value ~~consumer~~of ~~demand~~the iscapital ~~expected~~subject to beredemption ~~positive~~is ~~given~~a ~~available supplies~~corresponding ~~and~~change ~~supportive~~in tothe ~~recent~~members’ ~~beef and cattle price increases~~capital.

~~Beef~~Generally ~~Export~~accepted ~~Markets~~accounting principles require NBP to determine the fair value of the capital subject to redemption at the end of each reporting period. As the latest redemption period discussed above, was in July 2011, the carrying value of the capital subject to redemption is equal to its fair value. Management has considered previous redemption prices, valuations of peer companies and other factors in measuring the fair value of the capital subject to redemption for units held by NBPCo Holdings as of August 27, 2011. The capital subject to redemption held by Mr. Klein’s affiliates as of August 27, 2011 was valued based upon a contractually stipulated valuation formula.

~~Export~~New ~~markets~~Accounting 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 itsPolicies

30In May 2011, the Financial Accounting Standards Board, or FASB, issued Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS under ASU 2011-04, or ASU 2011-04. ASU 2011-04 amends ASC 820, Fair Value Measurements (“ASC 820”), providing a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles, clarifies the application of existing fair value measurement and expands the ASC 820 disclosure requirements, particularly for Level 3 fair value measurements. ASU 2011-04 will be effective for the Company's third quarter of fiscal 2012. The amendments in ASU 2011-04 are to be applied prospectively. The adoption of ASU 2011-04 is not expected to have a material effect on the Company's consolidated financial statements, but may require certain additional disclosures.

~~Table~~In June 2011, the FASB issued Presentation of ~~Contents~~ Comprehensive Income under ASU 2011-05 or ASU 2011-05. ASU 2011-05 requires the presentation of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. ASU 2011-05 will be effective for the Company's first quarter of fiscal 2013. The adoption of ASU 2011-05 is not expected to have a material effect on the Company's condensed consolidated financial statements, but may require a change in the presentation of the Company's comprehensive income from the statement of members' (deficit)/capital, where it is currently disclosed, to the presentation of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The amendments in ASU 2011-05 are to be applied retrospectively. The adoption of ASU 2011-05 is not expected to have a material effect on the Company's consolidated financial statements.

~~market to~~In ~~U.S.~~September ~~beef~~2011, ~~from~~the ~~cattle~~FASB ~~aged~~issued 20Testing ~~months~~Goodwill ~~and~~for ~~younger. South~~Impairment ~~Korea~~under ~~announced~~ASU2011-08, awhich ~~provisional~~is ~~opening~~ intended to reduce the cost and complexity of ~~its~~the ~~border~~annual togoodwill ~~U.S.~~impairment ~~beef~~test ~~from~~by ~~animals~~providing 30entities ~~months~~with ~~and~~the ~~younger~~option inof ~~September 2006 but~~performing ~~subsequently~~a ~~closed~~qualitative ~~its~~assessment ~~border~~to ~~again~~determine inwhether ~~October 2007~~impairment testing is necessary. ~~South~~ The ~~Korea~~revised ~~reopened~~standard ~~its~~will ~~border~~be effective for annual and ~~started inspecting~~interim ~~U.S.~~goodwill ~~beef~~impairment ~~near~~tests performed beginning in the ~~end~~first quarter of ~~June 2008. These~~fiscal ~~constraints~~2013, ~~and~~with ~~uncertainties~~early ~~have historically~~adoption ~~had~~permitted aunder ~~negative~~certain ~~impact~~circumstances. The onCompany ~~beef~~is ~~demand~~currently ~~during~~evaluating ~~the~~options ~~periods~~related into ~~which they~~early ~~occurred~~adoption.

WeResults ~~cannot presently assess the full economic impact~~ of the consequences of BSE on the U.S. beef packing industry or on our operations. Existing or new import restrictions or additional regulatory restrictions or disruptions in domestic and foreign consumer demand for beef may have a material adverse effect on our revenues and net income.Operations

~~Critical Accounting~~The ~~Policies~~following ~~and~~table ~~Estimates~~shows consolidated statements of operations data for the periods indicated (amounts in millions):

The following discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, our management evaluates and revises its estimates based on historical experience and other assumptions we believe are reasonable under the circumstances. Actual results may differ from those estimates. Changes in our estimates could materially affect our results of operations and financial condition for any particular period. Our fiscal year ends on the last Saturday in August. We believe our most critical accounting policies are as follows:27

~~Allowance~~Table ~~for~~of Returns and Doubtful Accounts. The allowance for returns and doubtful accounts reflects reserves for customer receivables to reduce receivables to amounts expected to be collected. Management uses significant judgment in estimating uncollectible amounts. In estimating uncollectible amounts, management considers factors such as current overall economic conditions, industry-specific economic conditions, historical customer performance, and anticipated customer performance. Specific accounts are also reviewed for collectability. While management believes these processes effectively address our exposure to doubtful accounts, changes in the economy, industry or specific customer conditions may require adjustment to the recorded allowance for doubtful accounts. Management uses significant judgment in estimating amounts expected to be returned. Management considers factors such as historical performance and customer conditions in estimating return amounts.Contents

Inventory Valuation. Inventories consist primarily of meat products and supplies. Product inventories are considered commodities and are 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. Management periodically reviews inventory balances and purchase commitments to estimate if inventories will be sold at amounts (net of estimated selling costs) less than their carrying amounts. If actual results differ from management estimates with respect to the selling of inventories at amounts less than their carrying amounts, we would adjust our inventory balances accordingly.



	52 weeks ended August 27, 2011			52 weeks ended August 28, 2010			52 weeks ended August 29, 2009
Net sales	$	6,849.5		$	5,807.9		$	5,449.3
Costs and expenses:
Cost of sales	6,473.3			5,438.0			5,187.1
Selling, general and administrative	52.0			49.3			43.1
Depreciation and amortization	51.2			49.6			44.4
Operating income	273.0			271.0			174.7
Other income (expense):
Interest income	—			—			0.2
Interest expense	(11.7		)	(14.8		)	(23.3		)
Other, net	0.2			(7.3		)	(6.5		)
Total other expense, net	(11.5		)	(22.1		)	(29.6		)
Income tax expense	2.5			0.9			0.9
Net income	259.0			248.0			144.2
Less net income attributable to noncontrolling interest in income of Kansas City Steak Company, LLC	(0.5		)	(0.9		)	(1.3		)
Net income attributable to the controlling interest in income of consolidated entity	$	258.5		$	247.1		$	142.9

~~Goodwill~~Our ~~and~~fiscal ~~Other~~year Intangible Assets. We recognize excess cost over the fair value of the net tangible and identifiable intangible assets acquired in a reporting unit, and record this excess as goodwill. We calculate the fair value of the applicable reporting unit using estimates of future cash flows. All of our goodwill has been allocated to the Core Beef segment. In accordance with the provisions included within Intangibles — Goodwill and Other under ASC 350, we assess goodwill and other indefinite life intangible assets annually for impairment. If there is ~~impairment,~~ the ~~carrying~~52 ~~amount~~or of53 ~~goodwill~~week ~~and~~period ~~other~~ending ~~intangible~~on ~~assets is written down to~~ the ~~implied~~last ~~fair~~Saturday ~~value. For~~in goodwill, this test involves comparing the fair value of each reporting unit to the unit’s book value to determine if any impairment exists. Goodwill and other indefinite life intangible assets were tested for impairment, and, as of August ~~28, 2010, management determined there was no impairment~~.

~~Workers’~~Fiscal ~~Compensation~~Year ~~Accrual. We~~Ended ~~incur~~August 27, ~~certain expenses~~2011 ~~associated~~Compared ~~with workers’ compensation. In order~~ to ~~measure~~Fiscal ~~the~~Year ~~expense associated~~Ended ~~with these costs~~August 28, ~~management~~2010 must make a variety of estimates including employee accidents incurred but not yet reported to us. The estimates used by management are based on our historical experience as well as current facts and circumstances.

31General. Net income for the fiscal year ended ended August 27, 2011 was approximately $259.0 million compared to net income of approximately $248.0 million for the fiscal year ended August 28, 2010, an increase of approximately $11.0 million, or 4.4%.

~~Table~~Total costs and expenses of ~~Contents~~ approximately $6,576.5 million for the fiscal year ended August 27, 2011, were 96.0% of net sales compared to approximately $5,536.9 million for the fiscal year ended August 28, 2010, or 95.3% of net sales. Continued stable demand for beef products and increases in cattle prices during the the fiscal year 2011 as compared to the fiscal 2010 resulted in an increase in the percentage of total costs to net sales during the period.

~~Automobile~~Net ~~Liability Accrual~~Sales. WeNet ~~incur~~sales ~~certain expenses~~were ~~associated~~approximately ~~with~~$6,849.5 ~~automobile~~million ~~liability.~~for the fiscal year ended August In27, ~~order~~2011 compared to ~~measure~~approximately $5,807.9 million for the ~~expense~~fiscal ~~associated~~year ~~with~~ended ~~these~~August 28, ~~costs~~2010, ~~management must~~an ~~make~~increase of approximately $1,041.6 million, or 17.9%. The increase in net sales resulted primarily from a ~~variety~~16.7% ofincrease ~~estimates~~in tothe ~~determine~~net sales per head during the ~~ultimate~~fiscal ~~cost~~year toended usAugust 27, ~~related~~ 2011 compared to ~~incurred~~the ~~accidents. The~~same ~~estimates used~~period byin ~~management~~the ~~are~~prior ~~based~~year, onas ~~our~~the ~~historical~~demand ~~experience~~for asbeef ~~well~~products asremained ~~current facts~~strong, and ~~circumstances~~price of beef products increased during the period.

~~Valuation~~Cost of ~~Capital Subject to Redemption~~Sales. ~~Historically,~~ Cost ~~NBP has had agreements whereby certain~~ of ~~its~~sales ~~members~~was ~~have~~approximately ~~had the right to require that NBP repurchase their interests~~$6,473. ~~This~~3 ~~has~~million ~~resulted~~for ~~in a portion of its equity being classified as capital subject to redemption. At any time after certain dates,~~ the ~~earliest~~fiscal ~~being~~year ~~July 31,~~ended ~~2010, the latest being July~~August 3127, 2011, ~~affiliates~~compared ~~of our President and Chief Executive Officer, Timothy M. Klein, and/or NBPCo Holdings have the right~~ to ~~require~~approximately ~~that NBP repurchase their interests~~$5, ~~the value of which is to be determined by a specified formula or a mutually agreed process~~438. If0 ~~NBP is~~million ~~unable~~for ~~to effect~~ the ~~repurchase~~fiscal ~~within~~year aended ~~specified time, the requesting member(s)~~August ~~have the right to cause a sale process to commence. On April 13~~28, ~~2009~~2010, ~~NBP entered~~ into two Unit Redemption Agreements (the “Unit Redemption Agreements”) pursuant to Section 12.5 of NBP’s limited liability company agreement to redeem at agreed upon redemption prices all of the membership interests in NBP that were owned or controlled by NBP’s former Chief Executive Officer, John R. Miller, and an ~~affiliate~~increase of ~~its~~approximately ~~former General Counsel~~$1, ~~Scott H~~035.3 ~~Smith~~million, asor ~~well as 25~~19.0%. The ofincrease ~~the~~was ~~membership~~primarily ~~interests in NBP that were owned by affiliates of Mr. Klein. As~~ a result, ~~Mr. Miller and Mr. Smith and their affiliates received approximately $91.3 million and $22.8 million, respectively, for their units and are no longer members~~ of ~~NBP. Mr. Klein’s~~an ~~affiliates received~~ approximately ~~$11~~19.~~4 million~~1% ~~for~~increase ~~their~~in ~~redeemed~~average ~~units. On~~cattle ~~June 2,~~prices ~~2010,~~during ~~NBP~~the ~~entered~~period ~~into~~compared ~~a Unit Redemption Agreement~~ to ~~redeem at agreed upon redemption prices approximately 5% of~~ the ~~membership~~prior ~~interests in NBP that were owned by Mr~~period. ~~Klein’s affiliates. As a result, Mr. Klein’s affiliates received $8.0 million for their redeemed units.~~

~~NBP~~Selling, ~~accounts~~General ~~for~~and ~~changes~~Administrative inExpenses. Selling, ~~the~~general ~~redemption~~and ~~value~~administrative ofexpenses ~~these~~were ~~interests~~approximately ~~by accreting~~$52.0 ~~the~~million ~~change~~for ~~in value from~~ the ~~date~~fiscal ofyear ~~change~~ended ~~through the earliest redemption date of the respective interests. At~~ August 2827, ~~2010,~~2011 ~~the~~compared ~~value of the capital subject~~ to ~~redemption was~~approximately ~~determined to be~~ $~~297~~49.23 million, ~~which~~for ~~was in excess of its carrying value. The total value of~~ the ~~capital~~fiscal ~~subject~~year toended ~~redemption at~~ August 28, 2010, ~~increased~~an by increase of approximately $562.7 million, ~~compared~~or to5.5%. This ~~the~~increase ~~value~~is atprimarily ~~August 29, 2009. Accordingly,~~ the ~~carrying~~result ~~value~~ of ~~the capital~~an ~~subject to redemption increased by~~ approximately $821.79 million ~~through accretion~~increase ~~during~~in ~~fiscal year 2010~~salaries, ~~resulting~~an inapproximately ~~the~~ $~~291~~1.70 million ~~carrying value,~~increase ~~as reflected~~ in ~~the~~travel ~~accompanying~~related ~~consolidated~~expenditures, ~~balance~~offset ~~sheet~~by asan ofapproximately ~~August 28, 2010~~$0. ~~Offsetting~~8 ~~the~~million ~~change~~reduction in ~~the value~~bad ofdebt ~~the capital subject to redemption is a corresponding change in the members’ capital~~expense.

~~Generally~~Depreciation ~~accepted accounting~~and ~~principles~~Amortization ~~require~~Expense. Depreciation ~~NBP to~~and ~~determine~~amortization ~~the~~expenses ~~fair~~were ~~value~~approximately of$51.2 ~~the capital~~million ~~subject~~for ~~to redemption at~~ the ~~end~~fiscal ofyear ~~each~~ended ~~reporting period. To the extent this value increases~~August 27, ~~this change~~2011 incompared ~~fair~~to ~~value~~approximately is$49.6 ~~accreted~~million ~~over~~for the ~~redemption~~fiscal ~~period~~year asended ~~discussed above. Management has~~August 28, ~~considered previous redemption prices~~2010, ~~valuations~~an increase of ~~peer~~approximately ~~companies~~$1.6 ~~and other~~million, ~~factors~~or in3.2%. Depreciation ~~measuring~~expense ~~the~~increased ~~fair~~due ~~value of the capital subject~~ to ~~redemption for~~assets ~~units~~being ~~held~~placed byinto ~~NBPCo~~service ~~Holdings~~during asfiscal ofyear ~~August 28~~2011, ~~2010. The~~primarily ~~capital~~at ~~subject~~our tothree ~~redemption~~beef ~~held~~plants byand ~~Mr. Klein’s affiliates~~two ascase ofready ~~August 28, 2010 was valued based upon a contractually stipulated valuation formula~~plants.

3228

Table of Contents

~~Results~~Operating Income. Operating income was approximately $273.0 million for the fiscal year ended August 27, 2011 compared to operating income of ~~Operations~~approximately $271.0 million for the fiscal year ended August 28, 2010, an increase of approximately $2.0 million, or 0.7%.

Interest Expense. Interest expense was $11.7 million for fiscal year 2011 compared to $14.8 million for fiscal year 2010, a decrease of $3.1 million, or 20.9%. The ~~following~~ ~~table~~decrease ~~shows~~in ~~consolidated~~interest ~~statements~~expense during fiscal year 2011 as compared to the fiscal year 2010 was due primarily to a decrease of ~~operations~~approximately ~~data~~1.39% ~~for~~of the ~~periods~~ ~~indicated~~average ~~(amounts~~daily ininterest ~~millions):~~rate during the period.

	52 weeks ended			52 weeks ended			53 weeks ended
	August 28, 2010			August 29, 2009			August 30, 2008
Net sales	$	5,807.9		$	5,449.3		$	5,847.3
Costs and expenses:
Cost of sales	5,438.0			5,187.1			5,612.4
Selling, general and administrative	49.3			43.1			43.7
Depreciation and amortization	49.6			44.4			36.4
Operating income	271.0			174.7			154.8
Other income (expense):
Interest income	—			0.2			0.5
Interest expense	(14.8		)	(23.3		)	(34.0		)
Other, net	(7.3		)	(6.5		)	5.7
Total other expense, net	(22.1		)	(29.6		)	(27.8		)
Income tax expense	(0.9		)	(0.9		)	(1.8		)
Net income	248.0			144.2			125.2
Less net income attributable to noncontrolling interest in income of Kansas City Steak Company, LLC	(0.9		)	(1.3		)	(0.7		)
Net income attributable to the controlling interest in income of consolidated entity	$	247.1		$	142.9		$	124.5

Other, net. Other, net non-operating income was $0.2 million in the fiscal year ended August 27, 2011 compared to other, net non-operating expense of $7.3 million in the fiscal year ended August 28, 2010, an increase of $7.5 million. Other non-operating income, net for fiscal year 2011 primarily includes approximately $1.5 million of income related to gains on the sale of fixed assets, offset by an expense of approximately $0.8 million related to an abandoned IPO effort. Other non-operating expense, net for fiscal year 2010 primarily includes approximately $2.4 million related to tannery litigation and approximately $2.2 million related to an abandoned IPO effort. In addition, other non-operating expense, net includes approximately $3.3 million accrued for a potential settlement of a dispute with the city of Dodge City, Kansas pertaining to the transfer of certain water rights.

~~Our~~ Income Tax Expense/Benefit. Income tax expense was $2.5 million for the fiscal year isended ~~the~~August 27, 522011 orcompared 53to ~~week~~income tax expense of $0.9 million for the same period ~~ending~~of fiscal year 2010, an increase of $1.6 million resulting from an increase in taxable income at National Carriers. Income tax expense is recorded on taxable income from National Carriers, which is organized as a C Corporation, and the ~~last~~apportioned ~~Saturday~~taxable inincome ~~August~~of NBP by certain states which impose privilege taxes.

~~Fiscal~~Net ~~Year~~Income. As ~~Ended~~a ~~August 28~~result of the factors described above, ~~2010~~net ~~Compared~~income for fiscal year 2011 was approximately $259.0 million compared to ~~Fiscal~~net ~~Year~~income ~~Ended~~of ~~August 29~~approximately $248.0 million for fiscal year 2010, ~~2009~~ an increase of approximately $11.0 million.

~~Net~~Fiscal ~~Sales. Net~~Year ~~sales~~Ended ~~increased approximately~~August 28, ~~$358.6 million or 6.6% in fiscal year~~ 2010 ~~compared~~Compared to ~~fiscal year~~Fiscal ~~2009~~Year ~~primarily~~Ended ~~due~~August 29, ~~to an approximate 1.8% increase in the volume of cattle processed and an approximate 5.9% increase in the average sales price per head processed.~~2009

~~Cost~~Net of Sales. ~~Cost of~~ Net sales ~~was~~increased approximately $~~5,438~~358.06 million ~~for~~or 6.6% in fiscal year 2010 compared to ~~$5,187.1~~ ~~million in~~ fiscal year 2009, ~~an increase of approximately $250.9 million, or 4.8%. The increase in cost of sales for the period resulted~~ primarily ~~from~~due to an ~~approximately~~approximate 1.8% increase in the volume of cattle processed ~~during the fiscal year,~~ and an ~~increase~~approximate ~~of approximately 3~~5.89% increase in the average ~~live~~sales ~~cattle~~price ~~prices~~per ashead ~~compared to the prior fiscal year~~processed.

~~Selling,~~Cost ~~General~~of ~~and Administrative Expenses~~Sales. ~~Selling,~~ Cost ~~general,~~of ~~and administrative~~sales ~~expenses~~was ~~were~~approximately $495,438.30 million for fiscal ~~the~~ year ~~ended August 28,~~ 2010 compared to $435,187.1 million ~~for~~in ~~the~~ fiscal ~~year ended August 29,~~ 2009, an increase of approximately $6250.29 million, or ~~14.~~4.8%. The increase in cost of sales for the period isresulted primarily ~~attributable~~ tofrom an ~~increase in bad debt expense of~~ approximately $1.78% ~~million,~~ increase in ~~consulting~~the volume of ~~approximately~~cattle ~~$1.3~~processed ~~million,~~during ~~increase~~the infiscal ~~salaries~~year, ~~of approximately~~and ~~$1.3~~an ~~million,~~ increase ~~in marketing~~ of approximately ~~$1.~~3.8% ~~million and~~in anaverage ~~increase~~live incattle ~~travel~~prices ~~related~~as ~~expense~~compared ofto ~~approximately~~the ~~$0.6~~prior ~~million~~fiscal year.

~~Depreciation~~Selling, General and ~~Amortization Expense~~Administrative Expenses. ~~Depreciation~~Selling, general, and ~~amortization~~administrative expenses were ~~approximately~~ $49.63 million infor fiscal the ~~2010~~year ~~fiscal~~ended ~~year~~August 28, 2010 compared to $4443.4 1 million infor the ~~2009~~ fiscal year ended August 29, 2009, an increase of approximately $56.2 million, or 11 14.74%. ~~Depreciation~~The ~~expense~~increase ~~increased~~ for the period is primarily ~~due~~attributable to an increase in bad debt expense of approximately $361.7 million, increase in consulting of ~~assets~~approximately ~~being~~$1.3 ~~placed~~million, increase in ~~service~~salaries of approximately $1.3 million, ~~primarily~~ atincrease ~~our~~in ~~three~~marketing ~~beef~~of ~~plants~~approximately $1.3 million and ~~two~~an ~~case~~increase ~~ready~~in ~~plants,~~travel ~~during~~related ~~fiscal year~~expense ~~2010~~of approximately $0.6 million.

~~Operating~~Depreciation ~~Income~~and Amortization Expense. ~~Operating income~~Depreciation ~~was~~and amortization expenses were approximately $~~271~~49.06 million ~~for~~in the 2010 fiscal year ~~2010~~compared to $44.4 million in the 2009 fiscal year, an increase of approximately $965.32 million, or 5511.17%,. Depreciation ~~from~~expense increased primarily due to approximately $~~174~~36.7 million of assets being placed in ~~fiscal~~service, ~~year~~primarily ~~2009. The~~at ~~increase~~our inthree ~~operating~~beef ~~income~~plants ~~for~~and ~~the~~ two case ready plants, during fiscal year ~~ended~~ 2010.

33Operating Income. Operating income was $271.0 million for fiscal year 2010, an increase of $96.3 million, or 55.1%, from $174.7 million in fiscal year 2009. The increase in operating income for the fiscal year ended August 28, 2010, resulted primarily from an approximately 1.5% decrease in operating costs as a percentage of net sales from the fiscal year ended August 29, 2009.

~~Table~~Interest Expense. Interest expense was $14.8 million for fiscal year 2010 compared to $23.3 million for fiscal year 2010, a decrease of ~~Contents~~$8.5 million, or 36.5%. The decrease in interest expense during the 52 week period of fiscal 2010 as compared to the 52 week period of fiscal 2009 was due primarily to the purchase and cancellation of an aggregate principal amount of our Senior Notes of approximately $66.9 million during the second quarter of fiscal 2010.

~~August 28, 2010, resulted primarily from an approximately 1.5% decrease in operating costs as a percentage of net sales from the fiscal year ended August~~ 29~~, 2009.~~

~~Interest~~Table ~~Expense. Interest expense was $14.8 million for fiscal year 2010 compared to $23.3 million for fiscal year 2010, a decrease~~ of $8.5 million, or 36.5%. The decrease in interest expense during the 52 week period of fiscal 2010 as compared to the 52 week period of fiscal 2009 was due primarily to the purchase and cancellation of an aggregate principal amount of our Senior Notes of approximately $66.9 million during the second quarter of fiscal 2010.Contents

Other, net. Other, net non-operating expense was $7.3 million in fiscal year 2010 compared to other, net non-operating expense of $6.5 million in fiscal year 2009, an increase of $0.8 million or 12.3%.

Income Tax Expense. Income tax expense was $0.9 million for fiscal year 2010 as compared to $0.9 million for fiscal year 2009. Income tax expense is recorded on taxable income from National Carriers, which is organized as a C Corporation. The effective tax rate for National Carriers was relatively consistent for both fiscal years 2010 and 2009.

Net Income. As a result of the factors described above, net income for fiscal year 2010 was approximately $248.0 million compared to net income of approximately $144.2 million for fiscal year 2009, an increase of approximately $103.8 million.

~~Fiscal~~Segment ~~Year Ended August 29, 2009 Compared to Fiscal Year Ended August 30, 2008~~Results

~~Net~~The ~~Sales. Sales~~Company’s ~~were~~operating ~~approximately 6.8%~~segments ~~lower~~are inbased ~~fiscal~~on ~~year~~segment ~~2009~~profit ~~compared to fiscal year 2008 due in part to an approximate 2.5% decrease in the average volume of cattle processed per week~~ and inevaluated ~~part~~by to the ~~extra~~Chief ~~week~~Executive inOfficer, ~~fiscal~~who ~~year~~also ~~2008~~serves as ~~compared~~the toChief ~~fiscal~~Operating ~~year 2009~~Decision Maker. ~~The~~Segment ~~average~~profit ~~beef~~is ~~sales~~measured ~~prices~~as ~~per head~~operating ~~decreased~~income ~~approximately~~for ~~2.3%~~NBP’s ~~during~~two ~~fiscal~~reporting ~~year~~segments, ~~2009~~Core asBeef ~~the~~and ~~demand~~Other, ~~for beef~~based ~~products~~on ~~during~~the ~~fiscal~~definitions ~~year~~provided ~~2009~~in ~~was~~ASC ~~not~~280, asSegment ~~strong compared to fiscal year 2008~~Reporting.

~~Cost~~Core ofBeef—the ~~Sales. Cost~~ majority of ~~sales~~NBP’s ~~was~~revenues ~~$5,187.1~~are ~~million~~generated ~~for~~from ~~fiscal~~the ~~year~~sale ~~2009~~of fresh meat, awhich ~~decrease~~include ofchuck ~~$425.3 million~~cuts, orrib ~~7.6%~~cuts, ~~from~~loin $5cuts,~~612.4~~ ~~million~~round ~~for~~cuts, ~~fiscal~~thin ~~year~~meats, ~~2008. The~~ground ~~decrease~~beef, ~~resulted~~and ~~partially~~other ~~from a decrease of approximately 2~~products.5% In inaddition, ~~the~~we ~~number~~sell ofbeef ~~live~~by-products ~~cattle~~including ~~purchased~~hides ~~on a per week basis in addition~~ to the ~~additional~~variety ~~week~~meat, infeed ~~fiscal~~processing, ~~year~~fertilizer, ~~2008. Also~~pet ~~contributing~~food toand ~~this~~leather ~~decrease~~tanning ~~was a decrease in live cattle prices of approximately 7~~industries.~~4%.~~ ~~Partially~~Aggregation ~~offsetting~~criteria ~~these~~were ~~decreases~~applied ~~was~~to ~~an increase~~determine in the ~~average~~constituents ~~cattle weights by approximately 0.8% during fiscal year 2009 as compared to fiscal year 2008. Cost~~ of ~~sales,~~the asCore aBeef ~~percentage of net sales, was 95~~segment.~~2% and 96.0% for fiscal years 2009 and 2008, respectively.~~

~~Selling,~~Other—the ~~General~~Other ~~and Administrative~~segments ~~Expenses. Selling, general, and administrative expenses were $43.1 million for fiscal year 2009, a decrease~~ of ~~$0.6~~ ~~million~~NBP orconsists ~~1.4%, from $43.7 million for fiscal year 2008. The decrease for this period is primarily due to a decrease in legal fees~~ of approximately $1.3 million, a decrease in travel and related expenses of approximately $0.9 million and a decrease in marketing expense of approximately $0.7 million. Fiscal year 2008 reflects an extra week of expense as compared to fiscal year 2009 which contributed to the ~~decreases~~operations ~~in the marketing expenses discussed above as well as the selling, general and administrative expenses in general. Partially offsetting these decreases was an increase in payroll and benefits~~ of ~~approximately~~National ~~$1.1 million and an increase in the provision for bad debts of approximately $0.4 million. Selling~~Carriers, ~~general,~~National ~~and administrative expenses~~Elite, as a ~~percentage~~provider of ~~net~~transportation ~~sales~~logistics services, ~~were 0.8%~~ and ~~0.7%~~Kansas ~~for~~City ~~the fiscal years 2009 and 2008, respectively~~Steak.

~~Depreciation~~Eliminations—this ~~and~~line ~~Amortization Expense. Depreciation~~item ~~and~~includes ~~amortization~~eliminations ~~expense increased~~of ~~$8.0~~inter-segment ~~million,~~and orintra-segment ~~22.0%,~~activity ~~for~~resulting ~~fiscal~~from ~~year 2009 as compared to fiscal year 2008. Depreciation expense increased due to assets being placed into service, primarily at~~ the ~~Dodge~~consolidation ~~City and Liberal beef plants, during fiscal year 2009 and to assets being placed into service at our three beef plants and two case ready plants during fiscal year 2008~~process. ~~Partially offsetting these increases, fiscal year 2008 reflects an extra week of expense as compared to fiscal year 2009.~~

~~Operating~~The ~~Income. Operating income~~following ~~was~~table ~~$174.7~~represents ~~million~~segment ~~for~~results ~~fiscal year 2009, an increase of $19.9 million, or 12.9%, from $154.8 million~~ for ~~fiscal~~the ~~year~~periods ~~2008. Operating~~indicated ~~income,~~(amounts asin ~~a percentage of net sales, was 3.2% and~~ thousands):

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2.6% for fiscal years 2009 and 2008, respectively. The improvement in operating income during fiscal year 2009 resulted primarily from increased profitability from sales of our commodity beef products, exports and our value-added product offerings during that fiscal year. The improvement in profitability from sales of our commodity beef products was primarily attributable to the improvement in demand relative to the price of cattle.



	52 weeks ended August 27, 2011			52 weeks ended August 28, 2010			52 weeks ended August 29, 2009
Net sales:
Core beef	$	7,003,430		$	5,927,646		$	5,494,866
Other	246,964			228,119			239,406
Eliminations	(400,927		)	(347,836		)	(284,994		)
Total net sales	$	6,849,467		$	5,807,929		$	5,449,278
Depreciation and amortization:
Core beef	$	47,622		$	46,521		$	42,128
Other	3,573			3,095			2,240
Total depreciation and amortization	$	51,195		$	49,616		$	44,368
Operating income:
Core beef	$	268,192		$	266,848		$	167,394
Other	4,765			4,166			7,323
Total operating income	272,957			271,014			174,717
Interest income	15			37			173
Interest expense	(11,708		)	(14,769		)	(23,344		)
Other, net	305			(7,344		)	(6,468		)
Total income before taxes	$	261,569		$	248,938		$	145,078
	August 27, 2011			August 28, 2010
Assets:
Core beef	$	950,354		$	868,902
Other	50,067			44,776
Eliminations	(1,656		)	(986		)
Total assets	$	998,765		$	912,692

~~Interest~~Fiscal ~~Expense. Interest expense~~Year ~~was~~Ended ~~$23.3 million for fiscal year 2009 compared to $34.0 million for fiscal year 2008~~August 27, a2011 ~~decrease~~Compared ~~of $10.7 million, or 31.5%. The decrease in interest expense during the 52 week period of fiscal 2009 as compared~~ to ~~the~~Fiscal 53Year ~~week~~Ended period of fiscal 2008 was due primarily to the purchase and cancellation of an aggregate principal amount of our senior notes of approximately $62.5 million and $30.6 million during fiscal years 2009 and 2008, respectively. The repayment of approximately $25.7 million of our term note in DecemberAugust ~~2008 also contributed to the decline in interest expense for fiscal year 2009. Also contributing to the decrease in interest expense was lower interest rates on our variable rate debt~~28, a2010 decrease of approximately 189 basis points, during the comparable periods and an approximate $13.8 million decrease in the weighted average principal amount of our variable rate debt for fiscal year 2009 as compared to fiscal year 2008. Also contributing to these decreases was an extra week of interest expense in fiscal year 2008 as compared to fiscal year 2009.

~~Other,~~Core net. Other non-operating expense, net was $6.5 million in fiscal year 2009 compared to other non-operating income, net of $5.7 million in fiscal year 2008, a decrease of $12.2 million. The decrease in other, net was primarily related to the write-off of approximately $5.6 million in legal fees which was primarily related to the termination of a purchase agreement in February 2009 and approximately $1.5 million related to the write-off of debt issuance costs. Also contributing to the decrease was the approximate $0.7 million write-off of obsolete parts at our case ready facilities during the second quarter of fiscal 2009. Fiscal year 2008 included approximately $3.4 million in income for a settlement of a lawsuit related to corrugated packaging materials and about $1.3 million in income related to proceeds received in redemption of an investment interest in which our basis had previously been written down to zero, both of which did not recur during the comparable period of this year. Fiscal years 2009 and 2008 also included $1.4 million and $0.4 million, respectively, in expense for the write-off of unamortized loan costs associated with the repurchase and cancellation of our senior notes during fiscal years 2009 and 2008 and amending and restating our credit facility during fiscal year 2009.Beef

~~Income Tax~~Net ~~Expense~~Sales. ~~Income~~Net ~~tax expense~~sales ~~was~~for Core Beef were approximately $07,003.94 million ~~for~~in fiscal year ~~2009~~2011 as compared to approximately $15,927.86 million ~~for~~ in fiscal year ~~2008~~2010, aan ~~decrease~~increase of $01,075.98 million, or 5018.01%,. The ~~primarily~~increase ~~related~~in ~~to our~~net ~~subsidiary,~~sales ~~National~~resulted ~~Carriers~~primarily from a 16. ~~Income~~7% ~~tax~~increase ~~expense~~in isthe ~~recorded~~net onsales ~~income~~per ~~from~~head ~~National~~during ~~Carriers,~~the ~~which is~~fiscal ~~organized~~year asended aAugust 27, C2011 ~~Corporation. The effective~~compared ~~tax~~to ~~rate~~the ~~for~~same ~~National~~period ~~Carriers~~in ~~was~~the ~~relatively~~prior ~~consistent~~year, as the demand for ~~both fiscal~~beef ~~years~~products ~~2009~~remained strong, and ~~2008~~price of beef products increased during the period.

~~Net~~Depreciation ~~Income~~and Amortization. AsDepreciation aand ~~result~~amortization of ~~the~~Core ~~factors~~Beef ~~described~~was ~~above, net~~approximately ~~income~~$47.6 ~~for~~million in fiscal year ~~2009~~2011 ~~was~~as ~~approximately $144.2 million~~ compared to ~~net income of~~ approximately $~~125~~46.2 5 million ~~for~~in fiscal year ~~2008~~2010, an increase of ~~approximately~~ $191.01 million or 2.4%. Depreciation expense increased due to assets being placed into service at our three beef processing plants and two case ready plants during fiscal year 2011.

~~Segment Results~~Operating Income. Operating income for Core Beef was approximately $268.2 million in fiscal year 2011 compared to $266.8 million in fiscal year 2010, an increase of $1.4 million or 0.5%.

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.~~

~~Core~~Net ~~Beef—the~~Sales. Net ~~majority~~sales offor ~~NBP’s~~Other ~~revenues~~were ~~are~~$247.0 ~~generated~~million ~~from the~~in ~~sale~~fiscal ofyear ~~fresh~~2011 ~~meat,~~compared ~~which~~to ~~include~~$228.1 ~~chuck~~million ~~cuts,~~in ~~rib~~fiscal ~~cuts,~~year ~~loin cuts~~2010, ~~round cuts,~~a ~~thin~~increase ~~meats,~~of ~~ground~~$18.9 ~~beef,~~million ~~and~~or ~~other products~~8.3%. InThe ~~addition,~~increase wewas ~~sell~~due ~~beef~~to ~~by-products including~~an ~~hides~~increase toin ~~the~~sales ~~variety~~at ~~meat,~~both ~~feed~~our ~~processing,~~transportation ~~fertilizer,~~operation ~~pet~~and ~~food~~at ~~and leather~~our ~~tanning~~portion ~~industries. Aggregation criteria~~control ~~were~~beef ~~applied~~facility toduring ~~determine~~fiscal ~~the~~year ~~constituents~~2011 ofas ~~the~~compared ~~Core~~to ~~Beef~~fiscal ~~segment~~year 2010.

~~Other—the~~Depreciation and Amortization. Depreciation and amortization for Other ~~segments~~was of$3.6 ~~NBP~~million ~~consists~~in offiscal ~~the operations~~year of2011 ~~National~~as ~~Carriers,~~compared ~~National~~to ~~Elite~~$3.1 million in fiscal year 2010,a ~~provider~~an increase of ~~transportation logistics~~$0.5 ~~services~~million or 16.1%. Depreciation expense increased due to assets being placed into service, ~~and~~primarily ~~Kansas~~at ~~City~~our ~~Steak~~transportation company during fiscal year 2011.

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~~Eliminations—this~~Operating ~~line~~Income. Operating ~~item~~income ~~includes~~for ~~eliminations~~Other was $4.8 million in fiscal year 2011 compared to $4.2 million in fiscal year 2010, an increase of ~~inter-segment~~ $0.6 million or 14.3%. The increase in operating income was primarily due to increased sales at both our transportation operation and ~~intra-segment~~portion ~~activity~~control ~~resulting~~beef ~~from~~facility, as well as a decrease in selling, general, and administrative expenses at our transportation operation during the ~~consolidation process~~fiscal year ended August 27, 2011.

~~The~~Fiscal ~~following~~Year ~~table~~Ended ~~represents~~August 28, ~~segment~~2010 ~~results~~Compared ~~for the~~to ~~periods~~Fiscal ~~indicated~~Year ~~(amounts~~Ended inAugust 29, ~~thousands):~~2009

	52 weeks ended August 28, 2010			52 weeks ended August 29, 2009			53 weeks ended August 30, 2008
Net sales:
Core beef	$	5,927,646		$	5,494,866		$	5,877,374
Other	228,119			239,406			237,100
Eliminations	(347,836		)	(284,994		)	(267,182		)
Total net sales	$	5,807,929		$	5,449,278		$	5,847,292
Depreciation and amortization:
Core beef	$	46,521		$	42,128		$	35,119
Other	3,095			2,240			1,289
Total depreciation and amortization	$	49,616		$	44,368		$	36,408
Operating income:
Core beef	$	266,848		$	167,394		$	148,478
Other	4,166			7,323			6,303
Total operating income	271,014			174,717			154,781
Interest income	37			173			460
Interest expense	(14,769		)	(23,344		)	(33,996		)
Other, net	(7,344		)	(6,468		)	5,723
Total income before taxes	$	248,938		$	145,078		$	126,968
	August 28, 2010			August 29, 2009
Assets:
Core beef	$	868,902		$	764,486
Other	44,776			45,857
Eliminations	(986		)	(1,198		)
Total assets	$	912,692		$	809,145

Core Beef

~~Fiscal Year~~Net ~~Ended~~Sales. Net ~~August 28~~sales for Core Beef were approximately $5,927.6 million in fiscal year 2010 ~~Compared~~compared to ~~Fiscal~~approximately ~~Year~~$5,494.9 ~~Ended~~million ~~August 29~~in fiscal year 2009, an increase of $432.7 million or 7.9%. Net sales increased primarily due to an approximately 1.8% increase in the volume of cattle processed and an approximately 5.9% increase in the average sales per head processed during fiscal year 2010 as compared to fiscal year 2009.

Depreciation and Amortization. Depreciation and amortization of Core Beef was approximately $46.5 million in fiscal year 2010 as compared to approximately $42.1 million in fiscal year 2009, an increase of $4.4 million or 10.5%. Depreciation expense increased due to assets being placed into service at our three beef processing plants and two case ready plants during fiscal year 2010.

~~Net Sales~~Operating Income. ~~Net~~Operating ~~sales~~income for Core Beef ~~were~~ was approximately $~~5,927~~266.68 million in fiscal year 2010 compared to ~~approximately~~ $~~5,494~~167.94 million in fiscal year 2009, an increase of $~~432~~99.74 million or 7 59.94%. ~~Net~~The ~~sales~~improvement ~~increased~~in ~~primarily~~operating ~~due to~~income anduring ~~approximately~~the ~~1.8%~~52 ~~increase~~week inperiod ~~the~~of ~~volume~~fiscal ofyear ~~cattle~~2010 ~~processed~~resulted ~~and~~primarily from an ~~approximately~~ ~~5.9%~~ increase in ~~the average~~ sales price per head processed ~~during fiscal~~of ~~year~~beef ~~2010~~products asof ~~compared~~approximately to5.9%, ~~fiscal~~partially ~~year~~offset ~~2009~~by an increase in live cattle prices of approximately 3.8%.

~~Operating~~Net ~~Income~~Sales. ~~Operating~~Net ~~income~~sales for ~~Core Beef~~Other ~~was~~were ~~approximately~~ $~~266~~228.81 million in fiscal year 2010 compared to $~~167~~239.4 million in fiscal year 2009, ana ~~increase~~decrease of $9911.43 million or ~~59.~~4.7%. The ~~improvement~~decrease inwas ~~operating~~primarily ~~income~~due ~~during the~~to 52decreased ~~week~~fuel ~~period~~surcharge ofrevenues ~~fiscal~~at ~~year~~our ~~2010~~transportation ~~resulted~~operation, ~~primarily~~partially ~~from~~offset anby a slight increase in sales ~~price~~at ~~per~~our portion control beef facility during fiscal year 2010 as compared to fiscal year 2009.

36Depreciation and Amortization. Depreciation and amortization for Other was $3.1 million in fiscal year 2010 as compared to $2.2 million in fiscal year 2009, an increase of $0.9 million or 40.9%. Depreciation expense increased due to assets being placed into service, primarily at our transportation company during fiscal year 2010.

~~Table~~Operating Income. Operating income for Other was $4.2 million in fiscal year 2010 compared to $7.3 million in fiscal year 2009, a decrease of ~~Contents~~$3.1 million or 42.5%. The decrease in operating income was primarily due to lower sales and higher depreciation expense from our transportation operation and higher depreciation expense at our portion control beef facility during the fiscal year ended August 28, 2010.

~~head~~Liquidity ~~processed~~and ofCapital ~~beef products of approximately 5.9%, partially offset by an increase in live cattle prices of approximately 3.8%.~~Resources

~~Other~~As of August 27, 2011, we had net working capital (the excess of current assets over current liabilities) of approximately $233.2 million, which included cash and cash equivalents of $50.7 million, with $26.3 million in distributions payable. 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 operations and available borrowings under our amended and restated credit facility, or Credit Facility.

~~Net~~As ~~Sales~~of August 27, 2011, we had $360.4 million of long-term debt, of which $38.5 million was classified as a current liability. ~~Net~~As ~~sales~~of ~~for~~August 27, ~~Other~~2011, ~~were~~ our Credit Facility consisted of a $~~228~~375.10 million interm ~~fiscal~~loan, ~~year~~of ~~2010~~which ~~compared~~$342.3 tomillion was outstanding and a $~~239~~250.40 million inrevolving ~~fiscal~~line ~~year 2009~~of credit loan, awhich ~~decrease~~had no outstanding borrowings, outstanding letters of credit of $1124.31 million orand 4available borrowings of $225.7%9 million, based on the most restrictive financial covenant calculations. ~~The~~ Cash ~~decrease~~flows ~~was~~from ~~primarily~~operations ~~due~~and toborrowings ~~decreased~~under ~~fuel~~our ~~surcharge~~Credit ~~revenues~~Facility at have funded our ~~transportation~~acquisitions, ~~operation~~working capital requirements, ~~partially~~capital ~~offset~~expenditures byand aother ~~slight~~general ~~increase~~corporate purposes. We were in ~~sales~~compliance ~~at our~~with ~~portion~~all ~~control~~of ~~beef~~our ~~facility~~financial ~~during~~covenants ~~fiscal~~under ~~year~~our ~~2010~~Credit Facility as ~~compared~~of toAugust 27, ~~fiscal year 2009~~2011.

~~Depreciation~~Effective ~~and~~June 4, ~~Amortization. Depreciation and~~2010, ~~amortization~~we ~~for~~amended ~~Other~~and ~~was~~restated ~~$3.1~~the ~~million~~Credit inFacility ~~fiscal~~to ~~year~~increase ~~2010~~the asmaximum ~~compared~~borrowings ~~to $2.2~~under ~~million~~the infacility ~~fiscal~~by ~~year~~increasing ~~2009,~~the anrevolving ~~increase~~line of ~~$0.9~~credit ~~million or 40.9%. Depreciation expense increased due~~ to ~~assets being~~$250 ~~placed~~million ~~into~~and ~~service,~~the ~~primarily~~availability atunder ~~our~~the ~~transportation~~term ~~company~~loan ~~during fiscal~~to ~~year~~$375 ~~2010.~~million

Operating Income. Operating income for Other was $4.2 million in fiscal year 2010 compared to $7.3 million in fiscal year 2009, a decrease of $3.1 million or 42.5%. The decrease in operating income was primarily due to lower sales and higher depreciation expense from our transportation operation and higher depreciation expense at our portion control beef facility during the fiscal year ended August 28, 2010.32

~~Fiscal Year~~Table ~~Ended~~of ~~August 29, 2009 Compared to Fiscal Year Ended August 30, 2008~~Contents

~~Core~~($342.3 ~~Beef~~million of which was outstanding as of August 27, 2011). Based on the borrowing base tests in the amended and restated Credit Facility, $225.9 million of the revolving line of credit was available at August 27, 2011.

~~Net Sales. Net~~On ~~sales~~June ~~for~~10, ~~Core~~2011, ~~Beef~~the ~~were $5,494.9~~Company's ~~million~~Credit inFacility ~~fiscal~~was ~~year~~amended ~~2009~~and ~~compared~~restated to: ~~$5,877.4~~(1) ~~million~~reduce inthe ~~fiscal year~~applicable ~~2008,~~margin aby ~~decrease~~up ofto ~~$382~~0.~~5 million or 6.5~~75%~~. The~~ ~~decrease~~for in“LIBOR ~~net~~Rate” ~~sales~~advances ~~resulted~~and in“Base ~~part from~~Rate” anadvances, ~~approximate~~ (2~~.5%~~) ~~decrease~~revise in the ~~average~~“fixed ~~volume~~charge ofcoverage ~~cattle~~ratio” ~~processed~~covenant ~~per week~~provisions ~~and in part~~ to provide the ~~extra~~Company ~~week~~credit inof ~~fiscal~~up ~~year~~to ~~2008~~$30 asmillion ~~compared~~for tomaintaining ~~fiscal year~~net ~~2009. The~~asset ~~average~~borrowing ~~beef~~base ~~sales~~levels ~~prices per~~that ~~head~~exceed ~~decreased~~the ~~approximately~~lenders' ~~2.3%~~aggregate ~~during~~credit ~~fiscal~~commitments ~~year~~under ~~2009 as~~ the ~~demand~~Credit ~~for beef~~Facility ~~products~~and ~~during~~(3) ~~fiscal~~extend ~~year~~the ~~2009~~maturity ~~was~~date ~~not~~of asthe ~~strong~~Credit ~~compared~~Facility to ~~fiscal~~June ~~year 2008~~4, 2016.

~~Depreciation~~In ~~and Amortization. Depreciation and~~addition ~~amortization~~to ofoutstanding ~~Core~~borrowings ~~Beef~~under ~~was~~the ~~$42.1~~Credit ~~million~~Facility, inwe ~~fiscal~~had ~~year~~outstanding ~~2009~~borrowings asunder ~~compared to~~industrial ~~$35.1~~revenue ~~million~~bonds ~~in fiscal year 2008, an increase~~ of $712.02 million ~~or 19.9%. Depreciation expense increased due to assets being placed into service, primarily at the Dodge City~~ and ~~Liberal~~ ~~beef~~capital ~~plants,~~lease ~~during the fiscal year 2009~~ and toother ~~assets~~obligations ~~being~~of ~~placed into service at our three beef plants and two case ready plants during fiscal year 2008~~$5. ~~Partially~~9 ~~offsetting~~million ~~these increases,~~as ~~fiscal year 2008 reflects an extra week~~ of ~~expense~~August 27, ~~as compared to the fiscal year 2009~~2011.

~~Operating~~Capital ~~Income. Operating~~spending ~~income~~through ~~for~~fiscal ~~Core Beef~~2012 ~~was~~is expected to be approximately $~~167~~75.40 million. inThese ~~fiscal~~expenditures ~~year~~are ~~2009~~planned ~~compared~~primarily tofor ~~$148.5~~plant ~~million~~expansion ~~in fiscal~~(including ~~year~~funding ~~2008,~~a anportion ~~increase~~ of ~~$18~~the remaining expansion costs for our St.9 ~~million~~Joseph orplant), 12equipment renewals and improvements.~~7%.~~ ~~The~~We ~~improvement~~believe inavailable ~~operating~~borrowings ~~income~~under ~~during~~ the 52Credit ~~week~~Facility ~~period~~and ofcash ~~fiscal~~provided ~~year~~by ~~2009~~operating ~~resulted~~activities ~~primarily~~will ~~from~~be ansufficient ~~overall improved~~to ~~demand~~support our working capital, capital expenditures and debt service requirements for ~~boxed~~the ~~beef~~foreseeable ~~across~~future. ~~commodity~~Our ~~beef~~ability to generate sufficient cash, ~~exports~~however, ~~and~~is ~~value-added products~~subject asto ~~well~~certain asgeneral ~~lower~~economic, ~~cattle~~financial, ~~prices~~industry, aslegislative, ~~compared~~regulatory toand ~~the~~other 53factors ~~week~~beyond ~~period~~our control. For a review of ~~fiscal~~ ~~year~~our ~~2008~~obligations that affect liquidity, please see the ‘‘Cash Payment Obligations’’ table below.

~~Other~~Operating Activities

Net ~~Sales. Net~~cash ~~sales~~provided ~~for~~by ~~Other~~operating ~~were~~ activities was $~~239~~273.4 million in fiscal ~~year~~2011 ~~2009~~as compared to $~~237~~244.15 million in fiscal ~~year 2008,~~2010. The an$28.9 million increase ofwas primarily due to approximately $211.30 million orof ~~1.0%. The~~additional ~~slight~~net ~~increase~~income ~~was~~in ~~primarily~~fiscal ~~due~~2011 as compared to ~~increased~~fiscal ~~sales~~2010, atand ~~our~~an ~~portion control~~increase ~~facility~~in ~~which~~the ~~were~~change ~~offset~~in other assets and inventories by ~~decreased~~approximately ~~fuel~~$50.5 ~~surcharge~~million, ~~revenues~~and at$13.8 ~~our transportation~~million ~~company~~respectively. These ~~during~~increases ~~fiscal~~were ~~year~~offset ~~2009~~by asa ~~compared~~decrease toin ~~fiscal~~the ~~year 2008. In~~change ~~addition,~~in ~~fiscal~~accrued ~~year~~compensation ~~2008 reflects~~and anbenefits ~~extra~~and ~~week~~other ofaccrued ~~sales~~expenses ~~activity~~by asapproximately ~~compared~~$28.7 tomillion ~~fiscal~~and ~~year~~$20.9 ~~2009~~million respectively.

~~Depreciation~~Net ~~and~~cash ~~Amortization. Depreciation and~~provided ~~amortization~~by ~~for~~operating ~~Other~~activities was $2244.25 million in fiscal year ~~2009~~2010 as compared to $1264.3 million in fiscal year ~~2008,~~2009. The ~~an increase of~~ $019.98 million ordecrease ~~69.2%. Depreciation~~was ~~expense~~primarily ~~increased~~ due to ~~assets being~~changes ~~placed~~in ~~into~~inventory ~~service,~~and ~~primarily~~accounts atreceivable ~~our~~of ~~transportation~~approximately ~~company~~$74.8 ~~during fiscal~~million ~~year~~and ~~2009~~$55. ~~Partially~~4 ~~offsetting these~~million, ~~increases~~respectively, ~~fiscal~~which ~~year~~more ~~2008~~than ~~reflects~~offset anthe ~~extra~~approximately ~~week~~$103.9 ofmillion ~~expense~~in additional net income in fiscal year 2010 as compared to fiscal year 2009.

37Investing Activities

~~Table~~Net cash used in investing activities was $63.2 million in fiscal 2011 as compared to $48.1 million in fiscal 2010, an increase of ~~Contents~~ $15.1 million. The increase was primarily due to an increase in capital expenditures by approximately $18.8 million during 2011 compared to 2010, offset by an increase in proceeds from the sale of property, plant and equipment of approximately $3.7 million in 2011 compared to 2010.

~~Operating~~Net ~~Income. Operating~~cash ~~income~~used ~~for~~in ~~Other~~ investing activities was $748.31 million in fiscal year ~~2009~~2010 as compared to $650.34 million in fiscal year ~~2008~~ 2009, ana ~~increase~~decrease of $12.03 million ~~or 15~~.~~9%.~~ The ~~increase~~decrease was ~~due~~ primarily attributable to ~~improved~~the ~~operating~~acquisition ~~income~~ of ~~our portion~~National ~~control~~Beef ~~beef~~Leathers ~~facility~~for ~~which~~approximately ~~was~~$11.0 ~~offset~~million byduring a2009, ~~reduction~~offset ofby ~~operating income~~approximately of$8.7 ~~our~~million ~~transportation~~additional ~~operations~~capital ~~due~~expenditures ~~to lower sales and higher depreciation expense~~ during ~~the~~2010 ~~52 week period of fiscal year 2009 as~~ compared to ~~the 53 week period of fiscal year 2008~~2009.

~~Liquidity and~~Financing ~~Capital Resources~~Activities

~~As of~~Net ~~August 28,~~cash ~~2010,~~used wein ~~had~~financing ~~net~~activities ~~working~~was ~~capital~~approximately ~~(the~~$179.9 ~~excess~~million ofin ~~current assets~~fiscal ~~over~~2011 ~~current~~compared ~~liabilities)~~to ofnet ~~approximately $180.2 million, which included~~ cash ~~and~~used ~~cash~~in ~~equivalents~~financing activities of $20193.43 million, ~~with~~in ~~$27~~fiscal 2010.4 The ~~million~~decrease in ~~distributions~~ ~~payable. As~~cash ofused ~~August 29, 2009,~~in wefinancing ~~had~~activities ~~net~~was ~~working~~primarily ~~capital~~attributable ofto ~~approximately~~an approximate $~~145~~119.02 million, ~~which included~~decrease ~~cash~~in ~~and~~net ~~cash~~payments ~~equivalents~~on ofthe ~~$17.4~~term ~~million~~loan, ~~with~~and a $3566.29 million ~~in distributions~~purchase ~~payable. Our~~and ~~primary sources~~cancelation of ~~liquidity~~senior notes during fiscal 2010. These changes are ~~cash~~offset ~~flow~~by ~~from~~an ~~operations~~increase ~~and~~in ~~available~~revolver ~~borrowings under~~payments ~~our~~of ~~amended~~$24.8 ~~and~~million, ~~restated~~as ~~credit~~well ~~facility~~as ~~(Credit~~an ~~Facility)~~increase in member distributions of approximately $143.2 million.

~~As of~~Net ~~August 28,~~cash ~~2010,~~used wein ~~had~~financing ~~$246.5~~activities ~~million~~was ofapproximately ~~long-term debt, of which~~ $21193.43 million ~~was~~in ~~classified~~fiscal asyear a2010 ~~current~~compared ~~liability. As~~to ofnet ~~August 28,~~cash ~~2010,~~used ~~our~~in ~~Credit Facility~~financing ~~consisted~~activities of a $~~375~~222.0 million ~~term~~in ~~loan,~~fiscal of2009. The ~~which~~decrease ~~$200.0~~in ~~million~~cash used in financing activities was ~~outstanding~~ ~~and~~primarily aattributable to an approximate $~~250~~125.05 million ~~revolving~~redemption ~~line~~ of ~~credit~~member ~~loan,~~capital ~~which~~in ~~had outstanding~~the ~~borrowings~~prior offiscal year compared to an $278.0 million, ~~outstanding~~redemption ~~letters~~in ofthe ~~credit~~current ofyear, an additional $2648.0 8 million ~~and~~in ~~available~~net borrowings ofon ~~$197.0~~the ~~million~~term loan, ~~based~~primarily onrelated to the ~~most restrictive~~amended ~~financial~~and ~~covenant~~restated ~~calculations. Cash~~Credit ~~flows~~Facility ~~from~~on ~~operations~~June 4, 2010, and ~~borrowings~~approximately ~~under~~$32.8 ~~our~~million ~~Credit~~change ~~Facility~~in ~~have funded~~overdraft ~~our~~balances ~~acquisitions,~~at ~~working capital requirements~~August 28, ~~capital~~2010 ~~expenditures~~as ~~and other~~compared ~~general~~to ~~corporate~~August 29, ~~purposes~~2009. We These decreases were inpartially ~~compliance~~offset ~~with~~by ~~all~~an ofapproximate ~~our~~$75.5 ~~financial~~million ~~covenants~~member ~~under~~capital ~~our~~contribution ~~Credit Facility~~during asthe offiscal year ended August 2829, ~~2010~~2009, ofan ~~which~~approximate $2768.07 million ~~was~~increase ~~borrowed~~in ~~and $26.0~~member ~~million~~distributions ~~was~~paid ~~used to support letters of credit.~~

Effective June 4, 2010, we amended and restated the Credit Facility to increase the maximum borrowings under the facility by increasing the revolving line of credit to $250 million and the availability under the term loan to $375 million ($200 million of which was outstanding as of August 28, 2010). During the 52 weeks ended August 28, 2010 and August 29, 2009, we retired all of our previously outstanding 101/2% senior notes. Based on the borrowing base tests in the amended and restated Credit Facility, all of the revolving line of credit was available at August 28, 2010.33

~~In addition~~Table ~~to outstanding borrowings under the Credit Facility, we had outstanding borrowings under industrial revenue bonds~~ of ~~$12.2 million and capital lease and other obligations of $7.3 million as of August 28, 2010.~~Contents

~~Capital spending~~in ~~through~~the ~~fiscal~~current year, ~~2011~~a ~~is expected to be approximately~~ $7520.0 million. ~~These~~reduction ~~expenditures~~in ~~are~~net ~~planned~~borrowings ~~primarily~~under ~~for plant expansion (including funding a portion of~~ the ~~expansion~~revolving ~~costs for our St. Joseph plant)~~loan, ~~equipment~~ ~~renewals~~ and ~~improvements. We believe available borrowings under~~ the ~~Credit~~purchase ~~Facility~~ and ~~cash~~cancellation ~~provided~~of ~~by operating~~approximately ~~activities~~$66.9 ~~will~~million bein ~~sufficient~~aggregate toprincipal ~~support~~amount of our ~~working~~Senior ~~capital,~~Notes ~~capital expenditures~~compared ~~and~~to ~~debt service requirements for~~ the ~~foreseeable~~purchase ~~future.~~of ~~Our ability~~only ~~to generate sufficient cash, however, is subject to certain general economic, financial, industry, legislative, regulatory and other factors beyond our control~~$62.5 ~~For~~million ~~a review~~ of our ~~obligations~~Senior ~~that~~notes ~~affect~~in ~~liquidity, please see~~ the ~~‘‘Cash~~prior ~~Payment~~fiscal ~~Obligations’’ table below~~year.

~~Operating~~Credit ~~Activities~~Facility

~~Net~~Effective ~~cash~~as ~~provided~~of ~~by operating~~June 4, ~~activities~~2010, the Credit Facility was ~~$244.5~~amended ~~million~~and inrestated ~~fiscal~~to: ~~year~~(1) increase ~~2010~~the asborrowings ~~compared~~under the Credit Facility by providing for a term loan facility of up to $~~264.3~~375 million inand ~~fiscal~~a ~~year~~revolving ~~2009. The~~ line of credit of up to $~~19.8~~250 million; ~~decrease~~(2) reduce ~~was~~the ~~primarily~~applicable ~~due~~margin toon ~~changes~~the inrates ~~inventory~~of interest of the term loan and ~~accounts~~revolving ~~receivable~~ line of ~~approximately~~credit; ~~$74.8~~(3) revise ~~million~~the ~~and~~payment ~~$55.~~schedule of the term loan; (4) extend ~~million,~~the ~~respectively~~maturity date of the Credit Facility to June 4, ~~which~~2015; ~~more~~(5) remove ~~than offset~~limitations ~~the~~on ~~approximately~~capital ~~$103.9~~expenditures; ~~million~~(6) add innew ~~additional~~financial covenants regarding adjusted net ~~income~~worth inand ~~fiscal~~a ~~year 2010~~fixed charge coverage ratio; and (7) add two wholly owned subsidiaries, National Beef California, LP and National Carriers, Inc., as ~~compared~~loan toparties ~~fiscal~~and ~~year~~guarantors. ~~2009~~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.

~~Net cash~~On ~~provided~~June by10, ~~operating~~2011, ~~activities~~the Company's Credit Facility was ~~$264~~amended and restated to: (1) reduce the applicable margin by up to 0.375% ~~million~~for in“LIBOR ~~fiscal~~Rate” ~~year~~advances ~~2009~~and ~~as compared~~“Base Rate” advances, (2) revise the “fixed charge coverage ratio” covenant provisions to provide the Company credit of up to $~~159.6~~30 million for maintaining net asset borrowing base levels that exceed the lenders' aggregate credit commitments under the Credit Facility in ~~fiscal~~the ~~year~~calculation ~~2008. The~~of ~~$104.7~~the ~~million~~fixed ~~increase~~charge ~~was~~coverage ~~due~~ratio ~~partially~~and (3) extend the maturity date of the Credit Facility to anJune ~~increase~~4, 2016. The related financing charges of approximately $~~19.~~0.8 million will be amortized over the life of the loan.

38The borrowings under the Credit Facility bear interest at LIBOR or the Base Rate, 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 EBITDA. As of August 27, 2011, the interest rates for the term loan was approximately 1.96%.

~~Table~~The 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 ~~Contents~~ our assets and the assets of our subsidiaries.

~~million~~Effective inas ~~net~~of ~~income~~the inJune ~~fiscal~~10, ~~year~~2011 ~~2009~~amendment, ~~as compared~~the toprincipal ~~fiscal~~amount ~~year~~outstanding ~~2008. Also contributing~~under to the ~~improvement~~term ~~was~~loan ~~net~~is ~~cash~~due ~~being~~and ~~provided~~payable ~~through~~in ~~inventory~~ equal quarterly installments of $9.25 million. All outstanding loan amounts are due and ~~accounts~~payable ~~receivable~~on ~~reductions~~June 4, ~~during~~2016. ~~fiscal~~Prepayment ~~year~~of ~~2009~~the loans is allowed at any time.

~~Investing~~The ~~Activities~~Credit Facility contains customary affirmative covenants relating to NBP LLC and its subsidiaries, including, without limitation, conduct of business, maintenance of insurance, compliance with laws, maintenance of properties, keeping of books and records, and the furnishing of financial statements. The facility also contains customary negative covenants relating to NBP LLC and its subsidiaries, including, without limitation, restrictions on: distributions, mergers, asset sales, investments and acquisitions, encumbrances, 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.

~~Net cash~~The ~~used~~Credit inFacility ~~investing~~contains ~~activities~~customary ~~was~~events ~~$48.1~~of ~~million~~default, inincluding, ~~fiscal~~without ~~year~~limitation, ~~2010~~failure ~~as compared~~ to ~~$50.4~~make ~~million~~payment inwhen ~~fiscal~~due, ~~year~~materially ~~2009~~incorrect representations and warranties, abreach ~~decrease~~of covenants, events of ~~$2.3~~bankruptcy, ~~million.~~default ~~The decrease~~of ~~was~~other ~~primarily~~indebtedness ~~attributable~~that towould permit acceleration of such indebtedness, the ~~acquisition~~occurrence of ~~National~~one ~~Beef~~or ~~Leathers for~~more ~~approximately~~unstayed or undischarged judgments in excess of $113.0 million, ~~during~~changes ~~2009~~in custody or control of the Company’s property, ~~offset~~changes byin ~~approximately~~control $8of 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.~~7 million~~ ~~additional~~The Credit Facility also includes customary provisions protecting the lenders against increased costs or loss of yield resulting from changes in tax, reserve, capital ~~expenditures~~adequacy ~~during~~and ~~2010~~other ~~compared~~requirements toof ~~2009~~law.

~~Net cash~~Industrial ~~used~~Revenue in investing activities was $50.4 million in fiscal year 2009 as compared to $58.9 million in fiscal year 2008, a decrease of $8.5 million. The decrease was primarily attributable to more capital spending during fiscal year 2008 than fiscal year 2009.Bonds

~~Financing~~Effective ~~Activities~~December 30, 2004, we entered into a transaction with the City of Dodge City, Kansas, designed to provide NBP property tax savings. Under the transaction, the City issued $102.3 million in bonds due in December 2019, used the proceeds to purchase our Dodge City facility (“the facility”) and leased the facility to us for an identical term under a capital lease. We purchased the City’s bonds with proceeds of our term loan under the Credit Facility. Because the City has assigned the lease to the bond trustee for our benefit as the sole bondholder, we effectively control enforcement of the lease against ourselves. As a result of the capital lease treatment, the facility will remain a component of property, plant and equipment in our consolidated balance sheet. As a result of the legal right of offset, the capital lease obligation and the corresponding bond

Net cash used in financing activities was approximately $193.3 million in fiscal year 2010 compared to net cash used in financing activities of $222.0 million in fiscal 2009. The decrease in cash used in financing activities was primarily attributable to an approximate $125.5 million redemption of member capital in the prior fiscal year compared to an $8.0 million redemption in the current year, an additional $48.8 million in net borrowings on the term loan, primarily related to the amended and restated Credit Facility on June 4, 2010, and approximately $32.8 million change in overdraft balances at August 28, 2010 as compared to August 29, 2009. These decreases were partially offset by an approximate $75.5 million member capital contribution during the fiscal year ended August 29, 2009, an approximate $68.7 million increase in member distributions paid in the current year, a $20.0 million reduction in net borrowings under the revolving loan, and the purchase and cancellation of approximately $66.9 million in aggregate principal amount of our Senior Notes compared to the purchase of only $62.5 million of our Senior notes in the prior fiscal year.34

~~Net cash~~Table ~~used in financing activities was approximately $222.0 million in fiscal year 2009 compared to net cash used in financing activities~~ of $105.6 million in fiscal 2008. The change was primarily attributed to an approximate $125.5 million redemption of member capital, an approximate $35.2 million increase in member distributions paid, the purchase and cancellation of an additional $31.9 million of our senior notes, approximately $25.7 million in repayments on our term note, and an $11.6 million increase in overdraft balances at August 29, 2009 as compared to August 30, 2008. These changes were partially offset by an approximate $44.8 million increase in net revolver credit borrowings and by an approximate $75.5 million member capital contribution during fiscal year 2009.Contents

investments will be eliminated in consolidation. The transaction provides us with property tax exemptions for the leased facility that, after netting payments to the City and local school district under payment in lieu of tax agreements, result in an annual property tax savings of approximately 25%. The facility remains subject to a prior mortgage and security interest in favor of the lenders under the Credit Facility. Additional revenue bonds may be issued to cover the costs of certain improvements to this facility. The total amount of revenue bonds authorized for issuance is $120.0 million.

~~Effective as~~The cities of ~~June 4,~~Liberal ~~2010~~and Dodge City, ~~the~~Kansas ~~Credit~~issued ~~Facility~~an ~~was~~aggregate ~~amended~~of ~~and~~$13.8 ~~restated~~million of industrial development revenue bonds on our behalf to: ~~(1) increase~~ fund the ~~borrowings~~purchase ~~under~~of ~~the~~equipment ~~Credit~~and ~~Facility~~construction byof ~~providing~~improvements ~~for~~at aour ~~term~~facilities ~~loan~~in ~~facility of~~those upcities. toThese ~~$375~~bonds ~~million~~were issued in 1999 and a2000 ~~revolving~~in ~~line~~four series of ~~credit~~$1.0 ofmillion, up$1.0 tomillion, $~~250~~6.0 million; ~~(2) reduce the~~and ~~applicable~~$5.9 ~~margin~~million onand ~~the~~are ~~rates~~due ofon ~~interest~~demand ofor ~~the~~on ~~term~~February 1, ~~loan~~2029, ~~and~~March 1, ~~revolving line~~2027, ofMarch 1, ~~credit;~~2015 ~~(3)~~and October ~~revise~~1, ~~the~~2009, ~~payment~~respectively. Because ~~schedule~~each series of ~~the~~bonds ~~term~~is ~~loan;~~backed ~~(4) extend the~~by ~~maturity~~a ~~date~~letter of ~~the~~credit under our Credit Facility, tothese ~~June 4,~~due-on-demand ~~2015;~~bonds ~~(5) remove limitations~~have onbeen ~~capital~~presented ~~expenditures;~~as ~~(6) add~~non-current ~~new~~obligations ~~financial~~until ~~covenants regarding~~twelve ~~adjusted~~months ~~net~~prior ~~worth~~to ~~and~~their amaturity. As ~~fixed~~of ~~charge~~August 27, ~~coverage~~2011, ~~ratio;~~the ~~and~~amount ~~(7) add two~~outstanding ~~wholly~~on ~~owned~~the ~~subsidiaries,~~$6.0 ~~National~~million ~~Beef~~series ~~California,~~of LPbonds ~~and~~had ~~National Carriers, Inc~~been reduced to $3.4 million, asand ~~loan~~the ~~parties~~$5.9 ~~and~~million ~~guarantors~~series were paid at maturity on October 1, 2009. Pursuant ~~The~~to ~~lender~~a ~~financing charges~~lease ~~for~~agreement, we lease the ~~amended~~facilities, equipment and ~~restated~~improvements ~~Credit~~from ~~Facility~~the ofrespective ~~approximately~~cities ~~$4.2 million~~and ~~are~~make ~~being~~lease ~~amortized~~payments ~~over~~in the ~~life~~amount of principal and interest due on the ~~loan~~bonds.

The ~~borrowings~~ ~~under~~bonds ~~the~~issued ~~Credit~~in ~~Facility~~1999 and 2000 are variable rate demand obligations that bear interest at ~~LIBOR~~a orrate ~~the~~that ~~Base~~is ~~Rate~~adjusted weekly, ~~plus~~ ~~the~~which ~~applicable~~rate ~~margin~~will not exceed 10% per annum. The ~~applicable~~average ~~margin~~per ~~for~~annum ~~the~~interest ~~revolving~~rate ~~line~~for each series of ~~credit~~ ~~and~~bonds ~~the~~was ~~term~~0.3% ~~loan~~in ~~will~~fiscal be2011. asWe ~~set~~have ~~forth~~the onoption to redeem a ~~grid~~series ~~based~~of onbonds ~~different ratios~~at ofany ~~funded~~time ~~debt~~for an amount equal to ~~EBITDA~~the principal plus accrued interest to the date of such redemption. AsThe holders of ~~August 28,~~the ~~2010,~~bonds have the option to tender the bonds upon seven days’ notice for an amount equal to par plus accrued interest. ~~rates~~ To the extent the remarketing agent for the ~~term~~bonds ~~loan~~is ~~and~~unable ~~revolving~~to ~~loan~~resell ~~were~~any ~~approximately~~of ~~2.79%~~the ~~and~~bonds ~~3.66%~~that are tendered, ~~respectively~~ the remarketing agent will use the letter of credit to fund such tender.

~~The borrowings~~In ~~under~~connection with the ~~revolving~~Brawley ~~loan~~Beef ~~are~~acquisition, ~~available~~we ~~for~~assumed ~~our~~the ~~working~~obligation ~~capital requirements~~under a Trust Indenture securing $6.8 million in California Pollution Control Financing Authority Tax-Exempt variable rate demand solid waste disposal revenue bonds dated as of October 1, ~~capital~~2001. The ~~expenditures~~bonds ~~and~~bear ~~other~~a ~~general~~rate ~~corporate~~that ~~purposes~~is adjusted weekly, which rate will not exceed 12% per annum. The average per annum interest rate for this series of bonds for fiscal 2011 was 0.3%. These bonds have a maturity date of October 1, 2016. We have the option to redeem all or a portion of the bonds at any time for an amount equal to the principal plus accrued interest to the date of such redemption. The ~~advance~~ ~~rates~~holders ~~under~~of the ~~borrowing~~bonds ~~base~~have the option to tender the bonds upon seven days’ notice for an amount equal to par plus accrued interest. To the extent the remarketing agent for the bonds is unable to resell any of the bonds that are ~~90%~~tendered, onthe ~~eligible~~remarketing agent will use the letter of credit to fund such tender.

39On December 17, 2010, National Beef Leathers, LLC, or Leathers, a subsidiary of NBP, entered into various agreements with the city of St. Joseph, Missouri, designed to provide NBP property tax savings. Under the transaction, the city of St. Joseph issued $14.5 million in bonds due in December 2022, used the proceeds to purchase our equipment within our Leathers facility and subsequently leased the equipment back to us for an identical term under a capital lease. We purchased the city of St. Joseph bonds with proceeds of our term loan under the Credit Facility. Because the city of St. Joseph has assigned the lease to the bond trustee for our benefit as the sole bondholder, we effectively control enforcement of the lease against ourselves. As a result of the capital lease treatment, the equipment will remain a component of property, plant and equipment in NBP’s consolidated balance sheet. As a result of the legal right of offset, the capital lease obligation and the corresponding bond investments will be eliminated in consolidation.

~~Table~~Utilities ~~of Contents~~Commitment

~~accounts~~Effective ~~and 70%~~December on30, ~~eligible~~2004, ~~inventory.~~we ~~The~~finalized ~~Credit~~an ~~Facility~~agreement iswith ~~secured~~the byCity of Dodge City, Kansas, whereby in consideration of certain improvements made to the city water and wastewater systems we have committed to make a ~~first~~series ~~priority lien~~of onservice ~~substantially~~charge ~~all~~payments totaling $19.3 million over a 20 year period. Payments of ~~our~~$0.8 ~~assets~~million, $1.7 million and $1.4 million were made in fiscal years 2011, 2010, and 2009, respectively. Payments under the ~~assets~~commitment for fiscal years 2012 through 2016 will be $0.8 million per year, with the remaining balance of ~~our~~$6.5 ~~subsidiaries~~million to be paid in subsequent years.

~~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~~½% ofSenior ~~the remaining amount of the term loan. All outstanding loan amounts are due and payable on June 4, 2015. Prepayment of the loans is allowed at any time.~~Notes

~~The Credit~~During ~~Facility~~fiscal ~~contains~~year ~~customary~~2010 ~~affirmative~~we ~~covenants~~purchased ~~relating to NBP LLC~~ and ~~its~~cancelled ~~subsidiaries, including, without limitation, conduct of business, maintenance of insurance, compliance with laws, maintenance of properties, keeping of books and records, and~~ the ~~furnishing~~remaining ofapproximately ~~financial statements~~$66.9 ~~The facility~~million also contains customary negative covenants relating to NBP LLC and its subsidiaries, including, without limitation, restrictions on: distributions, mergers, asset sales, investments and acquisitions, encumbrances, affiliate transactions, and ERISA matters. The ability of ~~NBP~~our ~~LLC~~senior ~~and its subsidiaries to engage in other business, incur debt or grant liens is also restricted~~notes.

~~The Credit~~Cash ~~Facility~~Payment 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.Obligations

~~Industrial~~The ~~Revenue~~following ~~Bonds~~table describes our cash payment obligations as of August 27, 2011 (in thousands):

In conjunction with the fourth amendment and restatement of our credit facility, effective December 30, 2004, we entered into a transaction with the City of Dodge City, Kansas, in order to provide NBP property tax savings. Under the transaction, the City issued $102.3 million in bonds due in December 2019, used the proceeds to purchase our Dodge City facility (“the facility”) and leased the facility to us for an identical term under a capital lease. The City’s bonds were purchased by us using proceeds of our term loan under the Credit Facility. Because the City has assigned the lease to the bond trustee for the benefit of NBP as the sole bondholder, we, in effect, control enforcement of the lease against ourselves. As a result of the capital lease treatment, the facility will remain a component of property, plant and equipment in NBP’s consolidated balance sheet. As a result of the legal right of offset, the capital lease obligation and the corresponding bond investments will be eliminated in consolidation. The transaction provides us with property tax exemptions for the leased facility, which, after netting payments to the City and local school district under payment in lieu of tax agreements, result in an annual property tax savings of approximately 25%. The facility remains subject to a prior mortgage and security interest in favor of the lenders under the Credit Facility. Additional revenue bonds may be issued to cover the costs of certain improvements to this facility. The total amount of revenue bonds authorized for issuance is $120.0 million.35

~~The cities~~Table of Liberal and Dodge City, Kansas issued an aggregate of $13.8 million of industrial development revenue bonds on our behalf to fund the purchase of equipment and construction of improvements at our facilities in those cities. These bonds were issued in 1999 and 2000 in four series of $1.0 million, $1.0 million, $6.0 million and $5.9 million and are due on demand or on February 1, 2029, March 1, 2027, March 1, 2015 and October 1, 2009, respectively. However, because each series of bonds is backed by a letter of credit under our Credit Facility, these due on demand bonds have been presented as non-current obligations until twelve months prior to their maturity. As of August 28, 2010, the amount outstanding on the $6.0 million series of bonds had been reduced to $3.4 million. In addition, the $5.9 million series of bonds were paid off during the first quarter of fiscal 2010. Pursuant to a lease agreement, we lease the facilities, equipment and improvements from the respective cities and make lease payments in the amount of principal and interest due on the bonds.Contents

The bonds issued in 1999 and 2000 are variable rate demand obligations that bear interest at a rate that is adjusted weekly, which rate will not exceed 10% per annum. The average per annum interest rate for each series of bonds was 0.5% in fiscal year 2010. We have the option to redeem a series of bonds at any time for an amount equal



	Total		Year 1 FY12		Year 2 FY13		Year 3 FY14		Year 4 FY15		Year 5 FY16		After Year 5
Term loan facility	$	342,250	$	37,000	$	37,000	$	37,000	$	37,000	$	194,250	$	—
Interest on long-term debt (1)	24,868		6,506		5,766		5,026		4,286		3,284		—
Revolving credit facility	—		—		—		—		—		—		—
Industrial Revenue Bonds	12,245		—		—		—		3,430		—		8,815
Capital leases (including interest)	6,544		1,775		1,745		3,024		—		—		—
City of Brawley loan	80		40		40		—		—		—		—
Operating leases	40,824		12,811		9,592		8,578		5,228		1,953		2,662
Purchase commitments	17,695		17,695		—		—		—		—		—
Cattle commitments (2)	73,407		73,407		—		—		—		—		—
Utilities commitment	10,573		820		818		816		816		815		6,488
Total	$	528,486	$	150,054	$	54,961	$	54,444	$	50,760	$	200,302	$	17,965

40 ____________________________________

~~Table~~(1) ~~of Contents~~Computed based on scheduled maturities and current effective interest rates.

to(2) ~~the~~We ~~principal~~make ~~plus~~a ~~accrued~~verbal ~~interest~~commitment to ~~the date~~cattle ofproducers ~~such~~to ~~redemption.~~purchase ~~The~~cattle ~~holders~~about ofone ~~the~~week ~~bonds~~in ~~have~~advance ~~the~~of ~~option~~delivery toof ~~tender~~ the ~~bonds~~ ~~upon~~live ~~seven~~animals ~~days’ notice for an amount equal~~ to ~~par~~our ~~plus~~plants, ~~accrued~~with ~~interest. To~~ the ~~extent~~actual ~~the~~price ~~remarketing~~paid ~~agent~~ for the ~~bonds~~cattle isdetermined ~~unable~~after tothe ~~resell~~cattle ~~any~~are ~~of the~~delivered ~~bonds~~and ~~that~~inspected ~~are~~at ~~tendered,~~our ~~the~~facilities. ~~remarketing~~This ~~agent~~amount ~~will~~approximates ~~use~~our ~~the~~outstanding ~~letter~~cattle ~~of credit~~commitments toat ~~fund~~August ~~such~~27, ~~tender~~2011.

~~In connection with the Brawley Beef acquisition, we assumed the obligation under a Trust Indenture securing $6.8 million in California Pollution Control Financing Authority Tax~~Off-~~Exempt~~Balance ~~variable~~Sheet rate demand solid waste disposal revenue bonds dated as of October 1, 2001. The bonds bear a rate that is adjusted weekly, which rate will not exceed 12% per annum. The average per annum interest rate for this series of bonds for fiscal year 2010 was 0.4%. These bonds have a maturity date of October 1, 2016. We have the option to redeem all or a portion of the bonds at any time for an amount equal to the principal plus accrued interest to the date of such redemption. The holders of the bonds have the option to tender the bonds upon seven days’ notice for an amount equal to par plus accrued interest. To the extent the remarketing agent for the bonds is unable to resell any of the bonds that are tendered, the remarketing agent will use the letter of credit to fund such tender.Arrangements

~~Utilities~~As ~~Commitment~~of August 27, 2011 we did not have any significant off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Effective December 30, 2004, we finalized an agreement with the City of Dodge City, Kansas, whereby in consideration of certain improvements made to the city water and wastewater systems, we have committed to make a series of service charge payments totaling $19.3 million over a 20 year period, of which $1.7, $1.4 and $1.4 million was paid in fiscal years 2010, 2009, and 2008, respectively. Payments under the commitment will be $0.8 million in each of the fiscal years 2011, 2012, 2013, 2014 and 2015, with the remaining balance of $7.3 million to be paid in subsequent years.Inflation

10We ½%believe ~~Senior~~our ~~Notes~~results of operations are not materially affected by moderate changes in the inflation rate. Inflation and changing prices did not have a material effect on our operations in fiscal 2011, 2010 and 2009. Severe increases in inflation, however, could affect the global and U.S. economies and could have an adverse affect on our business, financial condition and results of operations.

~~During~~Seasonality ~~fiscal year 2010 we purchased~~ and ~~cancelled the~~Fluctuations ~~remaining~~in ~~approximately~~Operating ~~$66.9 million of our senior notes. During fiscal year 2009 we purchased and cancelled approximately $62.5 million of our senior notes.~~Results

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

~~The following table describes our cash payment obligations as of August 28, 2010 (in thousands):~~36

	Total		Year 1 FY11		Year 2 FY12		Year 3 FY13		Year 4 FY14		Year 5 FY15		After Year 5
Term loan facility	$	200,000	$	20,000	$	20,000	$	20,000	$	20,000	$	120,000	$	—
Interest on long-term debt (1)	23,588		6,107		5,467		4,827		4,187		3,000		—
Revolving credit facility	27,000		—		—		—		—		27,000		—
Industrial Revenue Bonds	12,245		—		—		—		—		3,430		8,815
Capital leases (including interest)	8,206		1,746		1,717		1,674		3,069		—		—
City of Brawley loan	120		40		40		40		—		—		—
Operating leases	23,188		10,060		6,470		3,534		2,525		599		—
Purchase commitments	17,143		17,143		—		—		—		—		—
Cattle commitments (2)	70,208		70,208		—		—		—		—		—
Utilities commitment	11,391		818		820		818		816		816		7,303
Total	$	393,089	$	126,122	$	34,514	$	30,893	$	30,597	$	154,845	$	16,118

Table of Contents

~~(1) Computed~~ITEM ~~based~~7A. onQUANTITATIVE ~~scheduled maturities~~AND ~~and~~QUALITATIVE ~~current~~DISCLOSURES ~~effective~~ABOUT ~~interest~~MARKET ~~rates.~~RISK

~~(2) We~~Market ~~make~~Risk a verbal commitment to cattle producers to purchase cattle about one week in advance of delivery of the live animals to our plants, with the actual price paid for the cattle determined after the cattle are delivered and inspected at our facilities. This amount approximates our outstanding cattle commitments at August 28, 2010.Disclosures

~~Off-Balance Sheet~~The ~~Arrangements~~principal market risks affecting our business are exposure to changes in prices for commodities, such as livestock and boxed beef, and interest rate risk.

As Commodities. We use various raw materials, many of ~~August~~which 28are commodities. Raw materials are generally available from several different sources, ~~2010~~and we ~~did~~presently believe we can obtain them as needed. Commodities are subject to price fluctuations that may create price risk. From time to time, we may hedge commodities 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 prices. To the extent the contracts are not ~~have~~designated ~~any~~as ~~significant~~normal ~~off-balance~~purchases, ~~sheet arrangements~~we reflect commodity contract gains and losses as ~~defined~~adjustments to the basis of underlying commodities purchased; gains or losses are recognized in ~~Item~~the ~~303(~~statement of operations as a~~)(4)(ii)~~ component of ~~SEC~~costs ~~Regulation~~of ~~S-K~~goods sold.

41We 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 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.

~~Inflation~~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 sixteen months. In accordance with ASC 815 Derivatives and Hedging, 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 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.

~~We believe~~While ~~our~~management ~~results~~believes each of ~~operations~~these instruments help mitigate various market risks, they are not ~~materially~~designated ~~affected~~and byaccounted ~~moderate~~for ~~changes in~~as hedges under ASC 815 as a result of the ~~inflation~~extensive ~~rate~~recordkeeping requirements of this statement. ~~Inflation~~Accordingly, the gains and ~~changing~~losses ~~prices~~associated ~~did~~with ~~not~~the ~~have~~change ain ~~material effect~~fair onvalue ~~our~~of ~~operations~~the ininstrument ~~fiscal~~and ~~years~~the ~~2010,~~offsetting ~~2009~~gains and ~~2008.~~losses ~~Severe~~associated ~~increases~~ with changes in ~~inflation,~~the ~~however,~~market ~~could~~value ~~affect~~of ~~the~~certain ~~global~~of ~~and~~the ~~U.S.~~firm ~~economies~~purchase ~~and~~commitments ~~could have~~related anto ~~adverse~~the ~~affect~~futures oncontracts ~~our~~are ~~business,~~recorded ~~financial~~to ~~condition~~income and ~~results~~expense in the period of ~~operations~~ change.

~~Seasonality~~ We 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 the sensitivity analysis appropriately reflects the potential market value exposure associated with the use of derivative instruments. As of August 27, 2011 and ~~Fluctuations~~August 28, 2010, the potential change in ~~Operating~~the ~~Results~~fair value of applicable commodity derivative instruments, assuming a hypothetical 10% decrease in the underlying commodity price in each year, was $11.6 million and $0.3 million, respectively.

~~Our operating~~Interest ~~results are influenced by seasonal factors in the beef industry~~Rates. ~~These~~ As ~~factors~~a ~~affect~~result ~~the~~of ~~price we pay for livestock as well as the ultimate price at which we sell~~ our ~~products.~~normal ~~The~~borrowing ~~seasonal demand for beef products is highest in the summer~~ and ~~spring~~leasing ~~months as weather patterns permit more outdoor~~ activities, ~~and~~our ~~there~~operating isresults ~~an increased demand for higher value items that~~ are ~~grilled, such~~exposed ~~as steaks. Both live cattle prices and boxed beef prices tend~~ to befluctuations ~~at seasonal~~in ~~highs~~interest ~~during the summer and fall. Because of higher consumption~~rates, ~~more favorable~~which ~~growing~~we ~~conditions~~manage ~~and~~primarily ~~the~~through ~~housing~~our ofregular ~~animals~~financing inactivities. ~~feedlots~~We ~~for the winter months, there are~~ generally ~~more~~maintain ~~cattle~~limited ~~available~~investments in ~~the~~cash ~~summer~~ and ~~fall~~ cash equivalents.

42We 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 August 27, 2011, the weighted average interest rate on our $354.5 million of variable

~~Table of Contents~~37

~~ITEM~~Table ~~7A.~~of ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Contents

~~Market Risk~~interest ~~Disclosures~~debt was approximately 1.90%. As of August 28, 2010, the weighted average interest rate on our $239.2 million of variable rate debt was approximately 2.77%

~~The principal~~We ~~market~~had ~~risks~~total ~~affecting~~interest ~~our~~expense ~~business~~of ~~are~~approximately ~~exposure~~$11.7 tomillion, ~~changes~~$14.8 million and $23.3 million in ~~prices for~~fiscal ~~commodities~~2011, ~~such~~2010 asand ~~livestock~~2009, ~~and~~respectively. The ~~boxed~~estimated ~~beef~~increase in interest expense from a hypothetical 200 basis point increase in applicable variable interest rates would have been approximately $7.4 million, $5.6 million and ~~interest~~$4.9 ~~rate~~million ~~risk~~in fiscal 2011, 2010 and 2009, respectively.

~~Commodities.~~Foreign ~~We use various raw materials, many of which are commodities~~Operations. Transactions ~~Raw~~denominated ~~materials~~in ~~are~~a ~~generally available~~currency ~~from~~other ~~several~~than ~~different~~an ~~sources,~~entity’s ~~and~~functional wecurrency ~~presently~~may ~~believe~~expose wethat ~~can obtain~~entity ~~them as needed. Commodities are subject~~ to ~~price~~currency ~~fluctuations that may create price~~ risk. ~~From~~Although ~~time to time,~~ we ~~may~~ ~~hedge~~operate ~~commodities~~ in ~~order~~international tomarkets ~~mitigate~~including ~~this~~Japan, ~~price~~South ~~risk.~~Korea ~~While~~and ~~this may tend to limit our ability to participate in gains from commodity price fluctuations~~China, it ~~also~~product ~~tends~~sales toare ~~reduce~~predominately ~~the~~made ~~risk of loss from changes~~ in ~~commodity~~United ~~prices. To~~States ~~the extent the contracts are not designated as normal purchases~~dollars, ~~we reflect commodity contract gains~~ and ~~losses as~~therefore, ~~adjustments~~currency torisks ~~the basis of underlying commodities purchased; gains or losses~~ are ~~recognized in the statement of operations as a component of costs of goods sold~~limited.

WeITEM ~~purchase cattle for use in our processing businesses~~8. ~~From~~FINANCIAL ~~time~~STATEMENTS toAND ~~time,~~SUPPLEMENTARY we enter into forward purchase contracts at prices determined prior to the delivery of 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.DATA

WeOur ~~sell~~consolidated ~~commodity~~financial ~~beef~~statements ~~products~~and innotes ~~our business. Commodity beef products are subject to price fluctuations that may create price risk. From time to time~~thereto, weand ~~enter~~other ~~into~~information ~~forward~~required ~~sales~~by ~~contracts at prices determined prior to shipment. We may hedge the commodity price risk associated with these activities in order to mitigate~~ this ~~price~~Item 8 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~~included ~~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~~this ~~statement~~report ofbeginning ~~operations~~on aspage ~~a component of net sales~~F-1.

~~From~~ITEM ~~time to time, we purchase cattle futures and options contracts~~9. ~~Our~~ ~~primary~~CHANGES ~~use~~IN ~~of these~~AND ~~contracts~~DISAGREEMENTS isWITH toACCOUNTANTS ~~partially~~ON ~~determine~~ACCOUNTING ~~our~~AND ~~future~~FINANCIAL input costs when we have committed forward sales purchase orders from customers at a specified fixed price. The longest duration futures contract owned is sixteen months. In accordance with ASC 815 Derivatives and Hedging, 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 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.DISCLOSURE

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

WeITEM ~~use a sensitivity analysis to evaluate the effect that changes in the market value of commodities will have on these commodity derivative instruments~~9A. We ~~feel~~CONTROLS ~~the sensitivity~~AND analysis appropriately reflects the potential market value exposure associated with the use of derivative instruments. As of August 28, 2010 and August 29, 2009, the potential change in the fair value of applicable commodity derivative instruments, assuming a hypothetical 10% decrease in the underlying commodity price in each year, was $0.3 million and $16.4 million, respectively. This significant change was primarily due to the cattle futures contracts we entered into during the first quarter of fiscal 2009 to offset the risk of fixed-price sales commitments.PROCEDURES

43We 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 Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in alerting them, in a timely manner, to material information required to be included in our periodic Securities and Exchange Commission filings. There have been no changes in our internal control over financial reporting during the thirteen weeks ended August 27, 2011 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.

~~Table~~Management’s ~~of Contents~~Report on Internal Control over Financial Reporting

~~Interest~~Management ~~Rates. As~~is aresponsible ~~result~~for ofestablishing ~~our~~and ~~normal borrowing~~maintaining ~~and~~adequate ~~leasing~~internal ~~activities~~control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, ~~our~~as ~~operating~~amended. The ~~results~~Company’s ~~are~~internal ~~exposed~~control over financial reporting is designed to ~~fluctuations~~ inprovide ~~interest~~reasonable ~~rates,~~assurance ~~which~~as weto ~~manage~~the ~~primarily~~reliability ~~through~~of ~~our~~the ~~regular financing~~Company’s ~~activities.~~financial Wereporting ~~generally~~and ~~maintain~~the ~~limited~~preparation ~~investments~~of financial statements in ~~cash~~accordance ~~and cash~~with ~~equivalents~~GAAP. Our internal control over financial reporting includes those policies and procedures that:

~~We have~~• ~~long-term~~Pertain ~~debt~~to ~~with variable interest rates. Short-term debt is primarily comprised of~~ the ~~current~~maintenance ~~portion~~ of ~~long-term~~records ~~debt~~that ~~maturing~~in ~~twelve~~reasonable ~~months~~detail ~~from the~~accurately ~~balance~~and ~~sheet~~fairly ~~date. Our~~reflect ~~variable interest expense is sensitive to changes in~~ the ~~general~~transactions ~~level~~and ofdispositions ~~interest rates. As~~ of ~~August 28, 2010,~~ the ~~weighted~~assets ~~average interest rate on our $239.2 million~~ of ~~variable interest debt was approximately 2.77%. As of August 29, 2009,~~ the ~~weighted average interest rate on our $222.4 million of variable rate debt was approximately 3.36%~~Company;

~~We had~~• ~~total~~Provide ~~interest~~reasonable ~~expense~~assurance ofthat ~~approximately~~transactions ~~$14.8,~~are ~~$23.3~~recorded ~~and~~as ~~$34.0~~necessary ~~million~~to ~~in fiscal~~permit ~~years~~preparation ~~2010,~~of ~~2009~~financial ~~and~~statements ~~2008,~~in ~~respectively. The~~accordance ~~estimated~~with ~~increase~~GAAP, inand ~~interest~~that ~~expense~~receipts ~~from~~and aexpenditures ~~hypothetical~~of ~~200~~the ~~basis point~~Company ~~increase~~are inbeing ~~applicable~~made ~~variable~~only ~~interest~~in ~~rates~~accordance ~~would~~with ~~have~~authorizations ~~been approximately~~of ~~$5.6,~~management ~~$4.9~~ and ~~$5.2~~managers ~~million~~of inthe ~~fiscal~~Company; ~~years 2010, 2009~~ and ~~2008, respectively.~~

~~Foreign~~• ~~Operations. Transactions denominated~~Provide inreasonable aassurance ~~currency~~regarding ~~other~~prevention ~~than~~or antimely ~~entity’s~~detection ~~functional~~of ~~currency~~unauthorized ~~may expose that entity to currency risk. Although we operate in international markets including Japan~~acquisition, ~~South~~use ~~Korea~~or ~~and~~disposition ~~China,~~of ~~product~~the ~~sales~~Company’s ~~are~~assets ~~predominately~~that ~~made~~could ~~in United~~have ~~States~~a ~~dollars,~~material ~~and~~effect ~~therefore,~~on ~~currency~~the ~~risks~~Company’s ~~are~~consolidated ~~limited~~financial statements.

~~ITEM~~Internal 8control over financial reporting, no matter how well designed, has inherent limitations. Because ~~FINANCIAL~~of ~~STATEMENTS~~its ~~AND~~inherent ~~SUPPLEMENTARY~~limitations, ~~DATA~~internal control over financial reporting may not prevent or detect misstatements. Therefore, internal control over financial reporting determined to be effective can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect all misstatements. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of

~~Our consolidated financial statements and notes thereto, and other information required by this Item 8 are included in this report beginning on page F-1.~~38

~~ITEM~~Table 9.of ~~CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE~~Contents

~~None~~compliance with the policies or procedures may deteriorate.

~~ITEM~~Management 9Ahas assessed the effectiveness of the Company’s internal control over financial reporting as of August 27, 2011. In ~~CONTROLS~~making ~~AND~~this ~~PROCEDURES~~assessment, management used the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control — Integrated Framework.

~~We maintain~~Based aon ~~system of controls and procedures designed to provide reasonable assurance as to~~ the ~~reliability~~Company’s ofprocesses ~~the consolidated financial statements~~ and ~~other~~ ~~disclosures included in this report~~assessment, as ~~well~~described asabove, 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~~has ~~our~~concluded ~~Chief Executive Officer and Chief Financial Officer. Based upon~~ that ~~evaluation~~, as of ~~the end~~ of ~~the period covered by this Annual Report on Form 10-K~~August 27, ~~our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in alerting them~~2011, inthe aCompany’s ~~timely manner, to material information required to be included in our periodic Securities and Exchange Commission filings. There have been no changes in our~~ internal control over financial reporting ~~during~~was ~~the thirteen~~operating ~~weeks ended August 28, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting~~effectively. ~~The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events.~~

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

~~Management~~ITEM ~~is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended~~9B. ~~The~~ ~~Company’s~~OTHER internal control over financial reporting is designed to provide reasonable assurance as to the reliability of the Company’s financial reporting and the preparation of financial statements in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:INFORMATION

44None.

~~Table of Contents~~39

~~· Pertain~~Table ~~to the maintenance~~ of ~~records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;~~Contents

~~· Provide~~PART reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and managers of the Company; andIII

~~· Provide~~ITEM ~~reasonable~~10. ~~assurance regarding prevention or timely detection of unauthorized acquisition~~DIRECTORS, ~~use~~EXECUTIVE orOFFICERS ~~disposition of~~AND ~~the~~CORPORATE ~~Company’s assets that could have a material effect on the Company’s consolidated financial statements.~~GOVERNANCE

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

~~Management~~The ~~has~~following ~~assessed~~table ~~the~~provides ~~effectiveness~~certain ofinformation regarding the ~~Company’s~~ ~~internal~~members ~~control~~of ~~over~~our ~~financial~~Board ~~reporting~~of asManagers ofand ~~August~~our ~~28,~~executive ~~2010~~officers. In ~~making~~Each ~~this~~member ~~assessment,~~of ~~management used~~ the ~~criteria~~Board ~~established~~of byManagers ~~the~~and ~~Committee~~executive ofofficer ~~Sponsoring~~will ~~Organizations~~hold ofoffice ~~the Treadway~~until ~~Commission,~~a successor is elected or ~~COSO,~~qualified inor ~~Internal~~until ~~Control~~the ~~— Integrated~~earlier ~~Framework~~of his death, resignation or removal.

Based on the Company’s processes and assessment, as described above, management has concluded that, as of August 28, 2010, the Company’s internal control over financial reporting was operating effectively.



	Age as of
Name	August 27, 2011	Positions
Timothy M. Klein	54	President, Chief Executive Officer and Manager

Simon P. McGee	44	Chief Financial Officer

Jay D. Nielsen	56	Chief Accounting Officer and Treasurer

Terry L. Wilkerson	60	Chief Operating Officer

David L. Grosenheider	54	Executive Vice President, Business Planning and Analysis

Monte E. Lowe	53	Executive Vice President, Sales and Marketing

Michael J. Eckman	61	Executive Vice President, Human Resources

Bret G. Wilson	52	Vice President, General Counsel and Secretary

Steven D. Hunt	52	Chairman of Board of Managers

Richard A. Jochum	51	Manager

~~This~~Timothy ~~annual~~M. ~~report~~Klein ~~does~~has ~~not~~served ~~include~~as anour ~~attestation report~~President ofand Chief Operating Officer from 1998 through 2009 and currently serves as our ~~registered~~President ~~public~~and ~~accounting~~Chief ~~firm~~Executive ~~regarding~~Officer ~~internal~~and ~~control~~has ~~over financial~~served ~~reporting~~as a member of our Board of Managers since 2009. ~~Management’s~~ ~~report was~~Mr. ~~not~~Klein ~~subject~~served toas ~~attestation~~the byExecutive ~~our~~Vice ~~registered~~President, ~~public~~Sales ~~accounting~~and ~~firm pursuant~~Procurement of the Company from 1992 through 1998. Prior to ~~rules~~1992, Mr. Klein served as Vice President, Planning and Analysis at Cargill Inc. and as Vice President of ~~the~~Operations ~~Securities~~Analysis at Armour Food Company, a subsidiary of ConAgra Foods, Inc. Mr. Klein also served as Vice President of Sales and ~~Exchange~~Pricing ~~Commission~~at ~~that~~EA ~~permit~~Miller, usInc., ~~to provide~~a ~~only~~beef ~~management~~slaughter and fabrication business. Mr. Klein began his career in the meat industry at IBP, inc. (a predecessor of Tyson Fresh Meats and was one of the nation’s ~~report~~largest inbeef ~~this~~processors), ~~annual~~where ~~report~~he served as Manager of Scheduling from 1980 through 1983.

~~ITEM~~Manager 9BQualifications: Mr. Klein’s ~~OTHER~~day-to-day ~~INFORMATION~~leadership as the Company’s chief executive officer and his many years of experience in the beef industry, including in finance, operations and sales positions, provide him with deep knowledge of the Company’s operations and the beef industry. This experience provides special insights regarding the Company’s strategic and operational challenges and opportunities.

~~None~~Simon P. McGee has served as our Chief Financial Officer since February 2011, and has previously served as our Executive Vice President, Corporate Strategy and Acquisitions from April 2010 through February 2011. Mr. McGee served as our Senior Vice President, Corporate Strategy and Acquisitions from September 2009 to April 2010 and as our Vice President, Corporate Strategy and Acquisitions from 2006 to 2009. Prior to joining the Company, from 1999 to 2006, Mr. McGee served as an investment banker with Christenberry Collet & Company, Inc., an investment banking firm providing strategic corporate finance consulting on merger and acquisition and capital markets projects for middle-market public and private corporate clients. From 1988 to 1999, Mr. McGee was the founder and majority owner of McGee Ranch Company, Inc., a seedstock and commercial cow-calf enterprise.

4540

Table of Contents

~~PART~~Jay ~~III~~D. Nielsen has served as our Chief Accounting Officer and Treasurer since February 2011 and has previously served as our Chief Financial Officer from 1997 through February 2011. Mr. Nielsen joined Hyplains Beef, LLC in 1992. Mr. Nielsen’s previous experience in the meat industry includes positions at ConAgra Foods, Inc., where he served as Controller of Armour Food Company from 1988 to 1991, and at EA Miller, Inc., a beef slaughter and fabrication business, where he served as Transportation Brokerage Manager from 1986 to 1988.

~~ITEM~~Terry 10L. ~~DIRECTORS~~Wilkerson has served as our Chief Operating Officer since February 2011 and has previously served as our Executive Vice President, ~~EXECUTIVE~~Operations ~~OFFICERS~~of ~~AND~~the ~~CORPORATE~~Company ~~GOVERNANCE~~from March 2006 through February 2011. Mr. Wilkerson served as the Executive Vice President, Strategic Business Development of the Company from April 2005 to March 2006. From 1998 to 2005, Mr. Wilkerson served as the Company’s Executive Vice President of Operations. Mr. Wilkerson began his career with Excel Corporation (Cargill Meat Solutions) and held various operational positions within that company from 1974 to 1998. While at Cargill, he served as HR Director, Production Superintendent, Slaughter Operations Manager, General Manager/VP, Friona Division, General Manager of the Buena Vista Poultry Complex, VP of Transportation/Logistics, and VP of Logistics/IT.

~~Managers~~David L. Grosenheider has served as our Executive Vice President, Business Planning and Analysis since March 2006. Mr. Grosenheider served as the Company’s (i) Executive ~~Officers~~Vice President, Beef Operations from April 2005 to March 2006, (ii) Executive Vice President of Case-Ready Meats from June 2003 to April 2005, (iii) Executive Vice President of Systems and Planning from 1999 to June 2003, and (iv) Vice President of Operational Affairs of NBP LLC from 1993 to 1998. From 1987 through 1993, Mr. Grosenheider served as Manager of Scheduling and Director of Financial Planning for Swift Independent/Monfort. Mr. Grosenheider served as Controller for North Star Foods, Inc., a poultry processing company, from 1986 to 1987 and served in various accounting positions for IBP, inc. from 1979 to 1986.

~~The following~~Monte ~~table~~E. ~~provides~~Lowe ~~certain~~has ~~information~~served ~~regarding~~as ~~the~~our ~~members~~Executive ofVice ~~our~~President, ~~Board of~~Sales ~~Managers~~ and ~~our~~Marketing ~~executive~~since ~~officers~~1993. ~~Each~~Prior ~~member~~to of1993, Mr. Lowe’s previous experience in the ~~Board~~meat ofindustry ~~Managers and~~included ~~executive~~sales ~~officer~~representative ~~will~~positions ~~hold~~at ~~office~~Beef ~~until~~America afrom ~~successor~~1988 isto ~~elected~~1993, orat ~~qualified or~~Swift/Val-Agri, ~~until~~Inc. ~~the~~from ~~earlier~~1986 ofto ~~his~~1987, ~~death~~and at IBP, ~~resignation~~inc. orfrom ~~removal~~1980 to 1986.

	Age as of
Name	August 28, 2010	Positions
Timothy M. Klein	53	President, Chief Executive Officer and Manager
Jay D. Nielsen	55	Chief Financial Officer
Terry L. Wilkerson	59	Executive Vice President, Operations
David L. Grosenheider	53	Executive Vice President, Business Planning and Analysis
Monte E. Lowe	52	Executive Vice President, Sales and Marketing
Simon P. McGee	43	Executive Vice President, Corporate Strategy and Acquisitions
Michael J. Eckman	60	Executive Vice President, Human Resources
Bret G. Wilson	51	Vice President, General Counsel and Secretary
Steven D. Hunt	51	Chairman of Board of Managers
Richard A. Jochum	50	Manager

Michael J. Eckman has served as our Executive Vice President, Human Resources since November 2001. Prior to joining the Company, Mr. Eckman served as Executive Vice President of Human Resources for Solo Cup Co. from 1999 to 2001. Mr. Eckman held numerous positions within ConAgra Foods, Inc. from 1984 through 1998, including Senior Vice President of Human Resources of ConAgra Refrigerated Foods, Vice President of Human Resources of Armour Swift Eckrich, Vice President of Human Resources of Armour Food Company and Director of Labor Relations and Employee Benefits of Banquet Frozen Foods. Mr. Eckman also served as Banquet Frozen Foods’ Director of Labor Relations and Employee Benefits when it was owned by RCA Corporation from 1978 to 1984, and held various Human Resources management positions within RCA’s Picture Tube Division from 1972 to 1977.

~~Timothy~~Bret MG. ~~Klein~~Wilson has served as our ~~President~~Vice ~~and Chief Operating Officer from 1998 through 2009 and currently serves as our~~ President, ~~and~~General ~~Chief~~Counsel ~~Executive Officer~~ and ~~has~~Secretary ~~served~~since ~~as a~~September ~~member~~2009. ofFrom ~~our~~1994 ~~Board~~to ~~of Managers since~~ 2009., Mr. ~~Klein~~Wilson ~~served~~held asnumerous ~~the~~positions ~~Executive Vice~~with ~~President~~H&R Block, ~~Sales~~Inc., ~~and~~a ~~Procurement~~tax ofservices ~~the~~and ~~Company~~financial ~~from~~services ~~1992~~company, ~~through~~and ~~1998. Prior~~its ~~to 1992~~subsidiaries, ~~Mr.~~including ~~Klein served as~~ Vice President, ~~Planning~~ and ~~Analysis~~Secretary ~~at Cargill Inc.~~ and as Vice President ~~of Operations Analysis at Armour Food Company~~, aCorporate ~~subsidiary~~Development ofand ~~ConAgra~~Risk ~~Foods,~~Management ~~Inc. Mr. Klein also served as Vice President~~ of ~~Sales~~H&R ~~and Pricing at EA Miller~~Block, Inc., ~~a beef slaughter~~ and ~~fabrication~~ ~~business.~~Vice ~~Mr. Klein began his career in the meat industry at IBP~~President, ~~inc.~~ (aCorporate ~~predecessor~~Counsel of ~~Tyson~~Block ~~Fresh~~Financial ~~Meats and was one of the nation’s largest beef processors), where he served as Manager of Scheduling from 1980 through 1983~~Corporation.

~~Manager Qualifications:~~Steven MrD. ~~Klein’s~~ ~~day-to-day~~Hunt ~~leadership~~has served as the ~~Company’s~~Chair ~~chief executive~~of ~~officer~~the ~~and~~Board ~~his~~of ~~many~~Managers ~~years~~ of ~~experience~~the inCompany ~~the~~since ~~beef~~USPB ~~industry, including~~acquired a majority interest in ~~finance,~~the ~~operations~~Company ~~and~~on ~~sales~~August ~~positions~~6, ~~provide~~2003. ~~him~~Mr. ~~with~~Hunt ~~deep knowledge~~served as a member of the ~~Company’s~~Board ~~operations~~of ~~and~~Managers ~~the~~of ~~beef~~FNBPC ~~industry~~from 1997 to 2003. ~~This~~Mr. ~~experience provides~~Hunt ~~special~~was ~~insights~~one ~~regarding~~of the ~~Company’s~~founders ~~strategic~~of USPB and ~~operational challenges~~has ~~and~~served ~~opportunities~~as its Chief Executive Officer since 1996.

~~Jay~~Manager DQualifications: Mr. ~~Nielsen has~~ Hunt’s ~~served~~experience as ~~our~~a ~~Chief~~member ~~Financial Officer~~and ~~since~~the ~~1997.~~Chair ~~Mr.~~of ~~Nielsen~~the ~~joined~~Board ~~Hyplains~~of ~~Beef,~~Managers ~~LLC~~and inChief ~~1992.~~Executive ~~Mr.~~Officer ~~Nielsen’s previous~~and ~~experience~~founder inof ~~the~~USPB ~~meat~~provides ~~industry~~an ~~includes~~extensive ~~positions~~knowledge atof ~~ConAgra~~the ~~Foods, Inc.,~~beef ~~where~~industry heand ~~served~~also asthe ~~Controller~~specific ofstrategic ~~Armour~~challenges ~~Food~~and opportunities facing the Company. ~~from~~In ~~1988~~addition to ~~1991, and~~this atknowledge EAand ~~Miller~~experience, ~~Inc~~Mr., Hunt’s aservice ~~beef~~as ~~slaughter~~the Chief Executive Officer and ~~fabrication~~a ~~business,~~founder ~~where~~of ~~he served~~USPB asalso ~~Transportation~~provides ~~Brokerage~~the ~~Manager~~Board of Managers with valuable insight from ~~1986~~the toperspective ~~1988~~of someone who is in contact with a substantial number of the Company’s cattle suppliers.

~~Terry~~Richard LA. ~~Wilkerson has~~ ~~served~~Jochum serves as ~~our~~ ~~Executive~~one ~~Vice President, Operations~~ of ~~the~~our ~~Company~~managers. ~~since~~Since March ~~2006.~~2002, ~~Mr. Wilkerson~~he has served as the ~~Executive~~General ~~Vice~~Counsel ~~President,~~and ~~Strategic~~Corporate ~~Business Development~~Administrator of ~~the~~Beef ~~Company~~Products, ~~from~~Inc. ~~April~~(BPI), ~~2005~~which tois ~~March~~an ~~2006.~~affiliate of NBPCo Holdings. From ~~1998~~March 2000 to ~~2005~~March 2002, Mr. ~~Wilkerson~~Jochum served as the ~~Company’s~~Assistant ~~Executive~~ Vice President, ofLegal ~~Operations. Mr.~~Affairs ~~Wilkerson~~for ~~began~~IBP, ~~his~~inc. ~~career~~From ~~with~~1994 ~~Excel~~to ~~Corporation~~March ~~(Cargill~~2000, ~~Meat~~Mr. ~~Solutions) and~~Jochum ~~held~~served ~~various~~as ~~operational~~Assistant ~~positions~~Vice ~~within that company from 1974 to 1998. While at Cargill~~President, hePersonnel ~~served~~Administration asfor ~~HR Director~~IBP, inc.

46Manager Qualifications: Mr. Jochum has extensive legal and administrative experience at BPI and IBP, inc., a former Fortune 500 publicly traded food company that was purchased by Tyson Foods. This experience provides our Board of Managers with a broad perspective on operational and strategic aspects of the beef industry.

~~Table of Contents~~41

~~Production Superintendent,~~Table ~~Slaughter Operations Manager, General Manager/VP, Friona Division, General Manager~~ of ~~the Buena Vista Poultry Complex, VP of Transportation/Logistics, and VP of Logistics/IT.~~Contents

~~David~~Audit L. Grosenheider has served as our Executive Vice President, Business Planning and Analysis since March 2006. Mr. Grosenheider served as the Company’s (i) Executive Vice President, Beef Operations from April 2005 to March 2006, (ii) Executive Vice President of Case-Ready Meats from June 2003 to April 2005, (iii) Executive Vice President of Systems and Planning from 1999 to June 2003, and (iv) Vice President of Operational Affairs of NBP LLC from 1993 to 1998. From 1987 through 1993, Mr. Grosenheider served as Manager of Scheduling and Director of Financial Planning for Swift Independent/Monfort. Mr. Grosenheider served as Controller for North Star Foods, Inc., a poultry processing company, from 1986 to 1987 and served in various accounting positions for IBP, inc. from 1979 to 1986.Committee

~~Monte~~The ~~E. Lowe~~ Board of Managers has ~~served~~established asan ~~our~~audit ~~Executive~~committee ~~Vice President,~~consisting ~~Sales~~of Messrs. Hunt and ~~Marketing~~Jochum, ~~since~~even ~~1993.~~though ~~Prior~~it is not required to ~~1993,~~do Mrso. ~~Lowe’s~~The ~~previous experience~~Board inof ~~the~~Managers ~~meat~~has ~~industry~~determined ~~included~~that ~~Sales~~Mr. ~~Representative~~Hunt ~~positions~~is atan ~~Beef America~~“audit ~~from~~committee ~~1988~~financial toexpert” ~~1993,~~as atdefined ~~Swift/Val-Agri,~~in ~~Inc.~~Item ~~from~~407(d)(5)(ii) ~~1986~~of toRegulation ~~1987,~~S-K promulgated by the Securities and ~~at IBP~~Exchange Commission, ~~inc.~~but ~~from~~is ~~1980~~not toindependent ~~1986~~as defined by NASDAQ.

~~Michael~~Code ~~J. Eckman has served as our Executive Vice President, Human Resources since November 2001. Prior to joining the Company, Mr. Eckman served as Executive Vice President~~ of Human Resources for Solo Cup Co. from 1999 to 2001. Mr. Eckman held numerous positions within ConAgra Foods, Inc. from 1984 through 1998, including Senior Vice President of Human Resources of ConAgra Refrigerated Foods, Vice President of Human Resources of Armour Swift Eckrich, Vice President of Human Resources of Armour Food Company and Director of Labor Relations and Employee Benefits of Banquet Frozen Foods. Mr. Eckman also served as Banquet Frozen Foods’ Director of Labor Relations and Employee Benefits when it was owned by RCA Corporation from 1978 to 1984, and held various Human Resources management positions within RCA’s Picture Tube Division from 1972 to 1977.Ethics

~~Simon~~NBP ~~P. McGee~~ has ~~served~~ asadopted ~~our~~a ~~Executive~~corporate ~~Vice~~code ~~President,~~of ~~Corporate~~ethics ~~Strategy~~for ~~and~~its ~~Acquisitions since~~principal ~~April~~executive ~~2010.~~officer, ~~Mr.~~principal ~~McGee~~financial ~~served~~officer asand ~~our~~principal ~~Senior~~accounting ~~Vice~~officer ~~President,~~or ~~Corporate Strategy~~controller ~~and~~within ~~Acquisitions~~the ~~from~~meaning ~~September~~of ~~2009~~the torules ~~April 2010~~ and asregulations ~~our~~of ~~Vice President,~~the ~~Corporate~~Securities ~~Strategy~~ and ~~Acquisitions~~Exchange ~~from 2006 to 2009~~Commission. A ~~Prior~~copy ~~to joining~~of the ~~Company,~~Code ~~from~~may ~~1999~~be ~~to 2006~~obtained, ~~Mr.~~without ~~McGee served as an investment banker with Christenberry Collet & Company~~charge, ~~Inc.,~~upon anwritten ~~investment~~request ~~banking firm~~to ~~providing~~Bret ~~strategic corporate finance consulting on merger and acquisition and capital markets projects for middle-market public and private corporate clients~~G. ~~From~~Wilson, ~~1988~~Vice ~~to 1999~~President, ~~Mr.~~General ~~McGee~~Counsel ~~was the founder~~ and ~~majority~~Secretary, ~~owner~~National ~~of McGee~~Beef ~~Ranch~~Packing Company, ~~Inc.~~LLC, aP.O. ~~seedstock~~Box ~~and~~20046, ~~commercial~~Kansas ~~cow-calf~~City, ~~enterprise~~Missouri 64195.

~~Bret~~ITEM G11. EXECUTIVE Wilson has served as our Vice President, General Counsel and Secretary since September 2009. From 1994 to 2009, Mr. Wilson held numerous positions with H&R Block, Inc., a tax services and financial services company, and its subsidiaries, including Vice President and Secretary and Vice President, Corporate Development and Risk Management of H&R Block, Inc. and Vice President, Corporate Counsel of Block Financial Corporation.COMPENSATION

~~Steven~~Compensation ~~D. Hunt has~~Discussion served as the Chair of the Board of Managers of the Company since USPB acquired a majority interest in the Company on August 6, 2003. Mr. Hunt served as a member of the Board of Managers of FNBPC from 1997 to 2003. Mr. Hunt was one of the founders of USPB and ~~has served as its Chief Executive Officer since 1996.~~Analysis

Manager Qualifications: Mr. Hunt’s experience as a member and the Chair of the Board of Managers and Chief Executive Officer and founder of USPB provides an extensive knowledge of the beef industry and also the specific strategic challenges and opportunities facing the Company. In addition to this knowledge and experience, Mr. Hunt’s service as the Chief Executive Officer and a founder of USPB also provides the Board of Managers with valuable insight from the perspective of someone who is in contact with a substantial number of the Company’s cattle suppliers.Introduction

~~Richard~~This A.section ~~Jochum~~provides ~~serves~~a asdiscussion ~~one~~ of ~~our managers. Since March 2002, he has served as~~ the ~~General~~background ~~Counsel~~ and ~~Corporate Administrator~~objectives of ~~Beef~~our ~~Products,~~compensation ~~Inc.~~programs ~~(BPI),~~for ~~which~~senior ~~is an affiliate of NBPCo Holdings. From March 2000 to March 2002~~management, ~~Mr.~~ ~~Jochum~~including ~~served as~~ the ~~Assistant~~following ~~Vice~~officers ~~President,~~whom ~~Legal~~we ~~Affairs~~refer ~~for IBP, inc. From 1994~~ to ~~March 2000, Mr. Jochum served~~ as ~~Assistant~~our ~~Vice~~named ~~President, Personnel~~executive ~~Administration for IBP, inc.~~officers:

47Name Title Timothy M. Klein President and Chief Executive Officer Simon P. McGee Chief Financial Officer Jay D. Nielsen Chief Accounting Officer Terry L. Wilkerson Chief Operating Officer David L. Grosenheider Executive Vice President, Business Planning and Analysis Monte E. Lowe Executive Vice President, Sales and Marketing

~~Table~~The descriptions of ~~Contents~~ various employee benefit plans and employment-related agreements in this section are qualified in their entirety by reference to the full text or detailed descriptions of the plans and agreements, which are incorporated by reference into this Annual Report on Form 10-K.

Manager Qualifications: Mr. Jochum has extensive legal and administrative experience at BPI and IBP, inc., a former Fortune 500 publicly traded food company that was purchased by Tyson Foods. This experience provides our Board of Managers ~~with a broad perspective on operational~~ and ~~strategic~~Role ~~aspects~~ of ~~the beef industry.~~Management

~~Audit~~The ~~Committee~~Board of Managers of the Company, or the Board, has the overall responsibility for monitoring and approving the compensation programs for our named executive officers and making decisions regarding compensation to be paid or awarded to them.

~~The Board~~Objectives ~~of Managers has established an audit committee consisting of Messrs. Hunt~~ and ~~Jochum,~~Design ~~even though it is not required to do so. The Board~~ of ~~Managers~~Our ~~has~~Compensation determined that Mr. Hunt is an “audit committee financial expert” as defined in Item 401(h)(2) of Regulation S-K promulgated by the Securities and Exchange Commission, but is not independent as defined by NASDAQ.Program

~~Code~~Our ofexecutive ~~Ethics~~compensation program is designed to attract, retain, and reward talented executives who can contribute to our long-term success and is based on the following general principles:

~~NBP~~• ~~has~~compensation ~~adopted~~must a corporate code of ethics for its principal executive officer, principal financial officer and principal accounting officer or controller within the meaning of the rules and regulations of the Securities and Exchange Commission. A copy of the Code may be ~~obtained,~~competitive ~~without charge,~~with ~~upon~~that ~~written~~offered ~~request~~by toother ~~Bret~~companies G.that ~~Wilson,~~compete ~~Vice~~with ~~President~~us ~~General~~for ~~Counsel and~~executive ~~Secretary, National Beef Packing Company, LLC, P.O. Box 20046, Kansas City, Missouri 64195.~~talent;

~~ITEM~~• ~~11.~~differences ~~EXECUTIVE~~in ~~COMPENSATION~~compensation should reflect differing levels of responsibilities; and

~~Compensation Discussion~~• performance-based compensation should focus on critical business objectives and ~~Analysis~~align pay through performance-leveraged incentive opportunities.

~~Introduction~~The Board recognizes that the engagement of strong talent in critical functions may entail recruiting new executives at times and involve negotiations with individual candidates. As a result, the Board may determine in a particular situation that it is in the best interests of the Company to negotiate compensation packages that deviate from our general compensation philosophy.

This section provides a discussion of the background and objectives of our compensation programs for senior management, including the following officers whom we refer to as our named executive officers:42

~~Name~~Table ~~Title~~of Timothy M. Klein President and Chief Executive Officer Jay D. Nielsen Chief Financial Officer Terry L. Wilkerson Executive Vice President, Operations David L. Grosenheider Executive Vice President, Business Planning and Analysis Monte E. Lowe Executive Vice President, Sales and MarketingContents

The ~~descriptions~~Board ofgenerally ~~various~~does ~~employee~~not ~~benefit~~seek ~~plans and~~input ~~employment-related~~from ~~agreements~~outside incompensation ~~this~~consultants ~~section~~with ~~are~~respect ~~qualified in their entirety by reference~~ to ~~the~~annual ~~full~~compensation ~~text or detailed descriptions of the plans and agreements, which are incorporated by reference into this Annual Report on Form 10-K~~decisions.

~~Board~~ Elements of ~~Managers~~Our ~~and~~Compensation ~~Role of Management~~Program

~~The~~Base Board of Managers of the Company, or the Board, has the overall responsibility for monitoring and approving the compensation programs for our named executive officers and making decisions regarding compensation to be paid or awarded to them.Salaries

48Base salaries are intended to provide a level of compensation sufficient to attract and retain an effective management team, when considered in combination with the other components of our executive compensation program. The relative levels of base salary for our named executive officers are designed to reflect each executive officer’s scope of responsibility and accountability with the Company. Mr. Klein from time to time may have received a substantially greater portion of his total compensation in the form of incentive pay because of the incentive opportunities negotiated as part of his employment agreements described later in this section.

~~Table~~Annual ~~of Contents~~and Long Term Incentives

~~Objectives~~ We maintain an annual incentive plan called the Management Incentive Program for the purpose of providing additional incentive compensation opportunities for our management and ~~Design~~professional employees. With the exception of ~~Our~~Mr. ~~Compensation~~Klein, all of our named executive officers participated in the Management Incentive Program for fiscal 2011. Bonuses are earned under the plan if the Company attains certain minimum profit objectives in the applicable fiscal year, and paid to participants by November 30 following the end of the applicable fiscal year. The Management Incentive Program was designed to align the interests of management towards the achievement of a common goal of maximizing net income for the Company. The common goal upon which awards are based in the Management Incentive Program is “pre-bonus net income”. “Pre-bonus net income” for the relevant business units is net income as normally calculated under generally accepted accounting principles, but before bonus expenses of the Company. Generally, no bonuses are paid under the Management Incentive Program unless the Company achieves a threshold “pre-bonus net income” determined by the Board prior to or shortly after the beginning of each fiscal year. Management may recommend to the Board, however, that bonuses be awarded notwithstanding the fact that the Company did not achieve the threshold “pre-bonus net income” in order to provide competitive compensation to employees. Under the Management Incentive Program for fiscal 2011, $20.0 million in “pre-bonus net income” had to be achieved before bonuses could be paid. The Company believes “pre-bonus net income” is an appropriate measure of Company performance to utilize in making performance-based compensation decisions as senior management uses the same measure to evaluate the day-to-day performance of the business. According to the terms of the plan, if the pre-bonus net income threshold is met, a bonus pool is established as a percentage of pre-bonus net income and allocated to the named executive officers who are plan participants in proportion with their salaries relative to other salaried employees of the Company.

~~Our~~We ~~executive~~also ~~compensation~~maintain ~~program~~a islong-term ~~designed~~incentive ~~to attract,~~plan ~~retain~~called the Management Long-Term Incentive Plan, ~~and~~or ~~reward~~LTIP. Participation ~~talented~~is ~~executives~~determined ~~who~~by ~~can~~the ~~contribute~~Chief toExecutive ~~our~~Officer ~~long term~~for ~~success~~each fiscal year and is ~~based~~limited solely to key management employees who have a significant impact on the ~~following~~Company’s ~~general~~long-term, ~~principles:~~strategic results. With the exception of Mr. Klein, all of our named executive officers participated in this plan for fiscal 2011.

~~· compensation~~Prior ~~must~~to beor ~~competitive~~shortly after the beginning of each fiscal year, our Chief Executive Officer establishes the performance goals for the fiscal year and allocates to each participant a specified portion of the total incentive pool available for award under our LTIP. In determining each participant’s portion of the total pool, the Chief Executive Officer considers the participant’s ability to influence overall performance. The more senior the employee’s position with ~~that offered~~the byCompany, ~~other~~the ~~companies~~greater the portion of compensation that ~~compete~~varies with usperformance. The Chief Executive Officer is not required to allocate the entire LTIP incentive pool for a given fiscal year and may reserve a portion to be used for discretionary awards in recognition of extraordinary individual performance. Amounts earned for any fiscal year vest in three equal installments, with the first tranche vesting at the end of the third year following the year in which the award is earned. For example, fiscal 2011 awards will vest in equal installments of 33-1/3% each following the end of fiscal years 2014, 2015 and 2016. Until paid, amounts credited under the LTIP accrue interest at the weighted cost of debt capital for the Company. An executive ~~talent;~~will receive his incentive payment in cash at the time of vesting unless he elects to defer receipt of payment by making a timely deferral election in accordance with the terms of the plan.

~~· differences~~According to the terms of the plan, if the minimum earnings before interest and taxes, or EBIT, return on invested capital threshold is met, a bonus pool is established as a percentage of the Company’s return on invested capital and allocated to the named executive officers who are plan participants in ~~compensation~~relation ~~should~~to ~~reflect differing~~their ~~levels~~shares granted in the plan. No bonuses will be earned under the LTIP unless the Company attains a return on capital of ~~responsibilities;~~at least 15%. In fiscal 2011, $6,325,653 was generated under the formula used to calculate the LTIP. Of this amount, approximately 3.6% 5.4%, 8.9%, 8.9% and 8.9% was allocated to Messrs. McGee, Nielsen, Wilkerson, Grosenheider and Lowe, respectively.

~~· performance-based compensation should focus on critical business objectives and align pay through performance-leveraged incentive opportunities.~~43

~~The Board~~Table ~~recognizes that the engagement~~ of strong talent in critical functions may entail recruiting new executives at times and involve negotiations with individual candidates. As a result, the Board may determine in a particular situation that it is in the best interests of the Company to negotiate compensation packages that deviate from our general compensation philosophy.Contents

~~The~~Mr. ~~Board~~Klein ~~generally~~did ~~does~~ not ~~seek~~participate ~~input~~in ~~from~~our ~~outside compensation~~annual ~~consultants~~or long term incentive plans. Instead, he is eligible for annual and long term incentives set forth with ~~respect~~the toemployment agreement described below. The annual ~~compensation~~incentive ~~decisions~~under the employment agreement has been based on the Company’s earnings before taxes and the long-term incentive is based on the Company’s earnings before interest and taxes.

~~Elements of~~Employee ~~Our Compensation Program~~Benefits

~~Base~~Each ~~Salaries~~of our named executive officers is entitled to participate in the Company’s employee benefit plans (including 401(k) retirement savings, medical, dental, and life insurance benefits) on the same basis as other employees.

~~Base~~Employment-Related salaries are intended to provide a level of compensation sufficient to attract and retain an effective management team, when considered in combination with the other components of our executive compensation program. The relative levels of base salary for our named executive officers are designed to reflect each executive officer’s scope of responsibility and accountability with the Company. Mr. Klein from time to time may have received a substantially greater portion of his total compensation in the form of incentive pay because of the incentive opportunities negotiated as part of his employment agreements described later in this section.Agreements

~~Annual~~Mr. ~~and~~Klein ~~Long~~is ~~Term~~the ~~Incentives~~only named executive officer of the Company covered by an employment agreement. Each of our other named executive officers, other than Mr. McGee, are parties to supplemental bonus agreements.

WeAgreement ~~maintain~~with anTimothy ~~annual incentive plan called the Management Incentive Program for the purpose of providing additional incentive compensation opportunities for our management and professional employees~~M. ~~With~~ ~~the exception of Mr.~~ Klein, all of our named executive officers participated in the Management Incentive Program for fiscal year 2010. Bonuses are earned under the plan if the Company attains certain minimum profit objectives in the applicable fiscal year, and paid to participants by November 30 following the end of the applicable fiscal year. The Management Incentive Program was designed to align the interests of management towards the achievement of a common goal of maximizing net income for the Company. The common goal upon which awards are based in the Management Incentive Program is “pre-bonus net income”. “Pre-bonus net income” for the relevant business units is net income as normally calculated under generally accepted accounting principles, but before bonus expenses of the Company. Generally, no bonuses are paid under the Management Incentive Program unless the Company achieves a threshold “pre-bonus net income” determined by the Board prior to or shortly after the beginning of each fiscal year. Management may recommend to the Board, however, that bonuses be awarded notwithstanding the fact that the Company did not achieve the threshold “pre-bonus net income” in order to provide competitive compensation to employees. Under the Management Incentive Program for fiscal year 2010, $20.0 million in “pre-bonus net income” had to be achieved before bonuses could be paid. The Company believes “pre-bonus net income” is an appropriate measure of Company performance to utilize in making performance-based compensation decisions as senior management uses the same measure to evaluate the day-to-day performance of the business. According to the terms of the plan, if the pre-bonus net income threshold is met, a bonus pool is established as a percentage of pre-bonus net income and allocated to the named executive officers who are plan participants in proportion with their salaries relative to other salaried employees of the Company.

49On July 27, 2009, in connection with and effective upon his promotion to Chief Executive Officer, the Company entered into an amendment to Mr. Klein’s employment agreement. Mr. Klein’s employment agreement provided that he would receive an annual salary of $900,000. The agreement also provided that Mr. Klein would have an annual bonus opportunity based on our earnings before taxes for each year and long-term bonus opportunities based on our earnings before interest and taxes. Pursuant to his employment agreement, Mr. Klein’s annual earnings-based bonus was computed applying the formula described in footnote 1 to the Grants of Plan-Based Awards table set forth below. Mr. Klein’s long-term bonus opportunities include the following:

~~Table~~• If Mr. Klein is continuously employed through the last day of ~~Contents~~fiscal year 2012, he will be entitled to an additional long-term bonus equal to: (a) if the Company’s cumulative EBIT during the period from the first day of fiscal year 2010 through the last day of fiscal year 2012 exceeds $115,000,000, 4.0% of such excess, up to cumulative EBIT of $150,000,000; plus (b) if such cumulative EBIT exceeds $150,000,000, .75% of such excess.

We• ~~also~~If ~~maintain~~Mr. aKlein ~~long~~is ~~term~~continuously ~~incentive~~employed ~~plan~~through ~~called~~ the ~~Management~~last ~~Long~~day ~~Term~~of ~~Incentive~~fiscal ~~Plan~~year 2014, orhe ~~LTIP. Participation~~will isbe ~~determined~~entitled byto ~~the~~an ~~Chief Executive~~additional ~~Officer~~long-term ~~for~~bonus ~~each~~equal ~~fiscal~~to: ~~year~~(a) ~~and~~if isthe ~~limited~~Company’s ~~solely~~cumulative toEBIT ~~key~~during ~~management employees~~the ~~who~~period ~~have~~from athe ~~significant~~first ~~impact~~day onof ~~the~~fiscal ~~Company’s~~year ~~long~~2013 ~~term,~~through ~~strategic results. With~~ the ~~exception~~last day of Mrfiscal year 2014 exceeds $76,667,000, 4. ~~Klein~~0% of such excess, ~~all~~up to cumulative EBIT of ~~our~~$100,000,000; ~~named~~plus ~~executive~~(b) ~~officers~~if ~~participated~~such incumulative ~~this~~EBIT ~~plan~~exceeds ~~for~~$100,000,000, ~~fiscal year~~.75% ~~2010~~of such excess.

~~Prior~~Supplemental toBonus or shortly after the beginning of each fiscal year, our Chief Executive Officer establishes the performance goals for the fiscal year and allocates to each participant a specified portion of the total incentive pool available for award under our LTIP. In determining each participant’s portion of the total pool, the Chief Executive Officer considers the participant’s ability to influence overall performance. The more senior the employee’s position with the Company, the greater the portion of compensation that varies with performance. The Chief Executive Officer is not required to allocate the entire LTIP incentive pool for a given fiscal year and may reserve a portion to be used for discretionary awards in recognition of extraordinary individual performance. Amounts earned for any fiscal year vest in three equal installments, with the first tranche vesting at the end of the third year following the year in which the award is earned. For example, fiscal year 2010 awards will vest in equal installments of 33-1/3% each following the end of fiscal years 2013, 2014 and 2015. Until paid, amounts credited under the LTIP accrue interest at the weighted cost of debt capital for the Company. An executive will receive his incentive payment in cash at the time of vesting unless he elects to defer receipt of payment by making a timely deferral election in accordance with the terms of the plan.Agreements

~~According~~On toOctober 27, 2010, the ~~terms~~Company ofentered ~~the~~into ~~plan,~~supplemental ifbonus ~~the~~agreements ~~minimum earnings~~with ~~before~~each ~~interest~~of ~~and~~Messrs. Nielsen, ~~taxes~~Wilkerson, orGrosenheider ~~EBIT,~~and ~~return~~Lowe. The onCompany ~~invested~~awarded ~~capital threshold~~the isbonuses ~~met,~~provided afor ~~bonus~~by ~~pool~~these isagreements ~~established~~to as(i) reward athe ~~percentage~~executives offor the Company’s ~~return~~ onsuperior ~~invested~~financial ~~capital~~performance ~~and~~over ~~allocated~~the tofour ~~the~~fiscal ~~named~~years ~~executive~~ending ~~officers~~with ~~who are~~fiscal ~~plan~~year ~~participants~~2010 inand ~~relation~~(ii) serve toas ~~their~~additional ~~shares~~retention ~~granted~~incentives infor the ~~plan~~executives. NoPursuant ~~bonuses~~to ~~will~~the besupplemental ~~earned~~bonus ~~under~~payments, the ~~LTIP unless~~Company will pay the ~~Company~~executives ~~attains~~supplemental abonuses ~~return~~in onthe ~~capital~~amounts ofset atforth ~~least~~below ~~15%. In~~within ~~fiscal~~60 ~~year~~days ~~2010,~~following ~~$6,325,339~~the ~~was~~end ~~generated under~~of ~~the~~fiscal ~~formula~~years ~~used~~2011, to2012, ~~calculate~~2013 and 2014 if the ~~LTIP. Of~~executive ~~this~~remains ~~amount,~~continuously ~~approximately~~employed ~~5.4%,~~through ~~8.9%,~~the ~~8.9%~~last ~~and~~day ~~8.9%~~of ~~was~~the ~~allocated~~applicable ~~to Messrs.~~fiscal ~~Nielsen,~~year ~~Wilkerson,~~for ~~Grosenheider~~which ~~and~~the ~~Lowe,~~supplemental ~~respectively~~bonus relates.

Mr. Klein did not participate in our annual or long term incentive plans. Instead, he is eligible for annual and long term incentives set forth with the employment agreement described below. The annual incentive under the employment agreement has been based on the Company’s earnings before taxes and the long-term incentive is based on the Company’s earnings before interest and taxes.



Executive	Annual Supplemental Bonus
Jay D. Nielsen	$	250,000
Terry L. Wilkerson	$	500,000
David L. Grosenheider	$	500,000
Monte E. Lowe	$	500,000

~~Employee~~The ~~Benefits~~supplemental bonus agreements provide for the acceleration of any unpaid annual supplemental bonus payments if the executive’s employment with the Company ends as a result of death, disability or involuntary termination without cause.

~~Each~~Impact of ~~our~~Tax ~~named executive officers is entitled to participate in the Company’s employee benefit plans (including 401(k) retirement savings, medical, dental,~~ and ~~life~~Accounting ~~insurance benefits) on the same basis as other employees.~~Treatments

~~Employment-Related Agreements~~44

~~Mr.~~Table ~~Klein is the only named executive officer~~ of ~~the Company covered by an employment agreement. Each of our other named executive officers are parties to supplemental bonus agreements.~~Contents

~~Agreement~~We ~~with~~believe ~~Timothy~~the Mcompensation paid to our named executive officers is fully deductible under the Internal Revenue Code at the time it is paid. We ~~Klein~~further believe ASC 718, Compensation — Stock Compensation, did not have a material effect on our compensation program because we historically have not awarded stock options, restricted shares or other equity-based compensation.

OnTiming July 27, 2009, in connection with and effective upon his promotion to Chief Executive Officer, the Company entered into an amendment to Mr. Klein’s employment agreement. Mr. Klein’s employment agreement provided that he would receive an annual salary of ~~$900,000. The agreement~~Compensation also provided that Mr. Klein would have an annual bonus opportunity based on our earnings before taxes for each year and long term bonus opportunities based on our earnings before interest and taxes. Pursuant to his employment agreement, Mr. Klein’s annual earnings-based bonus was computed applying the formula described in footnote 1 to the Grants of Plan-Based Awards table set forth below. Mr. Klein’s long-term bonus opportunities include the following:Decisions

~~· If~~Prior ~~Mr.~~to ~~Klein~~or isshortly ~~continuously employed~~after ~~through~~ the ~~last~~beginning ~~day~~ of each fiscal year ~~2012~~, hethe ~~will~~Board beand ~~entitled~~our toChief ~~an additional~~Executive ~~long~~Officer ~~term~~review ~~bonus~~prior ~~equal~~year ~~to:~~performance ~~(a)~~and ifauthorize the ~~Company’s~~distribution ~~cumulative~~of ~~EBIT during~~annual ~~the~~and ~~period~~long-term ~~from~~incentives, ~~the~~if ~~first~~any, ~~day~~for ofthe ~~fiscal~~prior year. Any ~~2010~~changes ~~through~~in ~~the~~base ~~last~~salaries ~~day of~~may ~~fiscal~~also ~~year~~be ~~2012~~considered ~~exceeds~~at ~~$115,000,000,~~this 4time.0% The ofBoard ~~such~~and ~~excess,~~Chief Executive Officer may deviate from this general practice when appropriate under the circumstances.

50Stock Ownership Guidelines

~~Table~~The ofCompany ~~Contents~~does not impose any minimum equity guidelines for our named executive officers.

upCompensation toBoard ~~cumulative EBIT of $150,000,000; plus (b) if such cumulative EBIT exceeds $150,000,000, .75% of such excess.~~Report

~~· If~~The ~~Mr. Klein~~Board ~~is continuously~~has ~~employed~~reviewed ~~through~~and discussed the ~~last~~foregoing ~~day~~Compensation ofDiscussion ~~fiscal~~and ~~year~~Analysis ~~2014,~~with ~~he will be entitled to an additional long term bonus equal to: (a) if~~ the Company’s ~~cumulative~~ ~~EBIT~~senior ~~during~~management. Based ~~the~~on ~~period from~~ the ~~first~~Board’s ~~day~~review of ~~fiscal~~and ~~year~~discussions ~~2013 through~~with ~~the last day of fiscal year 2014 exceeds $76~~management,~~667,000,~~ ~~4.0%~~the ofBoard ~~such excess,~~has upincluded tothis ~~cumulative~~Compensation ~~EBIT~~Discussion ofand ~~$100,000,000;~~Analysis ~~plus~~in ~~(b) if~~this ~~such~~Annual ~~cumulative EBIT~~Report ~~exceeds~~on ~~$100,000,000,~~ Form 10-K.~~75% of such excess.~~

~~Supplemental~~The ~~Bonus~~foregoing ~~Agreements~~report is provided by the following managers, who constitute the Board:

OnSteven ~~October 27, 2010, the Company entered into supplemental bonus agreements with each of Messrs~~D. ~~Nielsen, Wilkerson,~~ Grosenheider and Lowe. The Company awarded the bonuses provided for by these agreements to (i) reward the executives for the Company’s superior financial performance over the four fiscal years ending with fiscal year 2010 and (ii) serve as additional retention incentives for the executives. Pursuant to the supplemental bonus payments, the Company will pay the executives supplemental bonuses in the amounts set forth below within 60 days following the end of fiscal years 2011, 2012, 2013 and 2014 if the executive remains continuously employed through the last day of the applicable fiscal year for which the supplemental bonus relates.Hunt

Executive	Annual Supplemental Bonus
Jay D. Nielsen	$	250,000
Terry L. Wilkerson	$	500,000
David L. Grosenheider	$	500,000
Monte E. Lowe	$	500,000

Richard A. Jochum

~~The supplemental~~Timothy bonus agreements provide for the acceleration of any unpaid annual supplemental bonus payments if the executive’s employment with the Company ends as a result of death, disability or involuntary termination without causeM. Klein

~~Impact of Tax and Accounting Treatments~~45

~~We believe~~Table ~~the~~of compensation paid to our named executive officers is fully deductible under the Internal Revenue Code at the time it is paid. We further believe ASC 718, Compensation — Stock Compensation, did not have a material effect on our compensation program because we historically have not awarded stock options, restricted shares or other equity-based compensation.Contents

~~Timing of~~Summary Compensation ~~Decisions~~Table

~~Prior~~The totable orbelow ~~shortly~~sets ~~after~~forth ~~the~~information ~~beginning~~regarding ofthe ~~each~~ fiscal year, ~~the~~compensation ~~Board and~~for our ~~Chief~~named ~~Executive~~executive ~~Officer review prior year performance and authorize the distribution of annual and long term incentives, if any, for the prior year~~officers. ~~Any changes in base salaries may also be considered at this time. The Board and Chief Executive Officer may deviate from this general practice when appropriate under the circumstances.~~

Stock Ownership Guidelines



Name and Principal Position	Fiscal Year	Salary (1)		Bonus	Non-Equity Incentive Plan Compensation			All Other Compensation			Total
Timothy M. Klein,	2011	$	900,000	—	$	3,018,418		$	10,742		$	3,929,160
President and Chief Executive Officer	2010	$	900,000	—	$	2,879,748		$	5,892		$	3,785,640
	2009	$	565,385	—	$	4,137,310		$	6,309		$	4,709,004
					(2		)	(3		)

Simon P. McGee, Chief	2011	$	365,385

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