FORM 10-Q
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
75-1285071
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
1770 Promontory Circle,
Greeley, CO
|
|
80634-9038
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(Address of principal executive offices)
|
|
(Zip code)
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Large Accelerated Filer
|
ý
|
|
Accelerated Filer
|
|
¨
|
|
|
|
|
||
Non-accelerated Filer
|
¨
(Do not check if a smaller reporting company)
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|
Smaller reporting company
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|
¨
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|
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|
Emerging growth company
|
|
¨
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|
||
Item 1.
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||
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||
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||
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||
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||
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||
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Item 2.
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||
Item 3.
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||
Item 4.
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||
Item 1.
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||
Item 1A.
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||
Item 2.
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||
Item 6.
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||
PART I.
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FINANCIAL INFORMATION
|
ITEM 1.
|
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
PILGRIM’S PRIDE CORPORATION
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
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||||||||
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|
March 26, 2017
|
|
December 25, 2016
|
||||
|
|
(Unaudited)
|
|
|
||||
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|
(In thousands)
|
||||||
Cash and cash equivalents
|
|
$
|
30,762
|
|
|
$
|
120,328
|
|
Restricted cash
|
|
4,415
|
|
|
4,979
|
|
||
Trade accounts and other receivables, less allowance for doubtful accounts
|
|
367,351
|
|
|
317,170
|
|
||
Account receivable from related parties
|
|
3,282
|
|
|
3,913
|
|
||
Inventories
|
|
924,169
|
|
|
813,262
|
|
||
Income taxes receivable
|
|
6,754
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
|
77,587
|
|
|
57,457
|
|
||
Assets held for sale
|
|
5,015
|
|
|
5,259
|
|
||
Total current assets
|
|
1,419,335
|
|
|
1,322,368
|
|
||
Other long-lived assets
|
|
16,509
|
|
|
15,710
|
|
||
Identified intangible assets, net
|
|
121,880
|
|
|
38,593
|
|
||
Goodwill
|
|
222,778
|
|
|
125,607
|
|
||
Property, plant and equipment, net
|
|
1,709,843
|
|
|
1,505,940
|
|
||
Total assets
|
|
$
|
3,490,345
|
|
|
$
|
3,008,218
|
|
|
|
|
|
|
||||
Accounts payable
|
|
$
|
575,781
|
|
|
$
|
555,097
|
|
Account payable to related parties
|
|
5,089
|
|
|
1,421
|
|
||
Accrued expenses and other current liabilities
|
|
284,834
|
|
|
290,699
|
|
||
Income taxes payable
|
|
50,993
|
|
|
20,990
|
|
||
Current maturities of long-term debt
|
|
96
|
|
|
94
|
|
||
Total current liabilities
|
|
916,793
|
|
|
868,301
|
|
||
Long-term debt, less current maturities
|
|
1,346,990
|
|
|
1,011,858
|
|
||
Deferred tax liabilities
|
|
158,494
|
|
|
142,651
|
|
||
Other long-term liabilities
|
|
88,717
|
|
|
88,661
|
|
||
Total liabilities
|
|
2,510,994
|
|
|
2,111,471
|
|
||
Common stock
|
|
2,602
|
|
|
2,597
|
|
||
Treasury stock
|
|
(231,758
|
)
|
|
(217,117
|
)
|
||
Additional paid-in capital
|
|
1,688,197
|
|
|
1,686,742
|
|
||
Accumulated deficit
|
|
(426,714
|
)
|
|
(520,635
|
)
|
||
Accumulated other comprehensive loss
|
|
(62,921
|
)
|
|
(64,243
|
)
|
||
Total Pilgrim’s Pride Corporation stockholders’ equity
|
|
969,406
|
|
|
887,344
|
|
||
Noncontrolling interest
|
|
9,945
|
|
|
9,403
|
|
||
Total stockholders’ equity
|
|
979,351
|
|
|
896,747
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
3,490,345
|
|
|
$
|
3,008,218
|
|
PILGRIM’S PRIDE CORPORATION
|
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|||||||||
(Unaudited)
|
|||||||||
|
|
||||||||
|
|
Thirteen Weeks Ended
|
|
||||||
|
|
March 26, 2017
|
|
March 27, 2016
|
|
||||
|
|
(In thousands, except per share data)
|
|||||||
Net sales
|
|
$
|
2,020,492
|
|
|
$
|
1,962,937
|
|
|
Cost of sales
|
|
1,805,287
|
|
|
1,725,375
|
|
|
||
Gross profit
|
|
215,205
|
|
|
237,562
|
|
|
||
Selling, general and administrative expense
|
|
62,853
|
|
|
48,788
|
|
|
||
Operating income
|
|
152,352
|
|
|
188,774
|
|
|
||
Interest expense, net of capitalized interest
|
|
12,386
|
|
|
12,033
|
|
|
||
Interest income
|
|
(302
|
)
|
|
(693
|
)
|
|
||
Foreign currency transaction loss (gain)
|
|
619
|
|
|
(235
|
)
|
|
||
Miscellaneous, net
|
|
(2,715
|
)
|
|
(2,946
|
)
|
|
||
Income before income taxes
|
|
142,364
|
|
|
180,615
|
|
|
||
Income tax expense
|
|
47,901
|
|
|
62,604
|
|
|
||
Net income
|
|
94,463
|
|
|
118,011
|
|
|
||
Less: Net income (loss) attributable to noncontrolling interests
|
|
542
|
|
|
(360
|
)
|
|
||
Net income attributable to Pilgrim’s Pride Corporation
|
|
$
|
93,921
|
|
|
$
|
118,371
|
|
|
|
|
|
|
|
|
||||
Weighted average shares of common stock outstanding:
|
|
|
|
|
|
||||
Basic
|
|
248,692
|
|
|
254,807
|
|
|
||
Effect of dilutive common stock equivalents
|
|
234
|
|
|
340
|
|
|
||
Diluted
|
|
248,926
|
|
|
255,147
|
|
|
||
|
|
|
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|
||||
Net income attributable to Pilgrim’s Pride Corporation per
share of common stock outstanding:
|
|
|
|
|
|
||||
Basic
|
|
$
|
0.38
|
|
|
$
|
0.46
|
|
|
Diluted
|
|
$
|
0.38
|
|
|
$
|
0.46
|
|
|
PILGRIM’S PRIDE CORPORATION
|
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|||||||||
(Unaudited)
|
|||||||||
|
|
||||||||
|
|
Thirteen Weeks Ended
|
|
||||||
|
|
March 26, 2017
|
|
March 27, 2016
|
|
||||
|
|
(In thousands)
|
|||||||
Net income
|
|
$
|
94,463
|
|
|
$
|
118,011
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||
Gain associated with available-for-sale securities, net of tax
benefit of $41 |
|
—
|
|
|
30
|
|
|
||
Gain (loss) associated with pension and other postretirement
benefits, net of tax expense (benefit) of $802 and $(4,155), respectively |
|
1,322
|
|
|
(6,885
|
)
|
|
||
Total other comprehensive income (loss), net of tax
|
|
1,322
|
|
|
(6,855
|
)
|
|
||
Comprehensive income
|
|
95,785
|
|
|
111,156
|
|
|
||
Less: Comprehensive income (loss) attributable to
noncontrolling interests
|
|
542
|
|
|
(360
|
)
|
|
||
Comprehensive income attributable to Pilgrim’s Pride
Corporation
|
|
$
|
95,243
|
|
|
$
|
111,516
|
|
|
PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||
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Pilgrim’s Pride Corporation Stockholders
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
Paid-in Capital |
|
Retained Earnings (Accumulated
Deficit) |
|
Accumulated
Other Comprehensive Loss |
|
Noncontrolling
Interest |
|
Total
|
||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||||||
|
|
(In thousands)
|
||||||||||||||||||||||||||||||||
Balance at December 25, 2016
|
|
259,682
|
|
|
$
|
2,597
|
|
|
(10,636
|
)
|
|
$
|
(217,117
|
)
|
|
$
|
1,686,742
|
|
|
$
|
(520,635
|
)
|
|
$
|
(64,243
|
)
|
|
$
|
9,403
|
|
|
$
|
896,747
|
|
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93,921
|
|
|
—
|
|
|
542
|
|
|
94,463
|
|
|||||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,322
|
|
|
—
|
|
|
1,322
|
|
|||||||
Share-based compensation plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock issued under compensation plans
|
|
486
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Requisite service period recognition
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,460
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,460
|
|
|||||||
Common stock purchased under share repurchase
program
|
|
—
|
|
|
—
|
|
|
(780
|
)
|
|
(14,641
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,641
|
)
|
|||||||
Balance at March 26, 2017
|
|
260,168
|
|
|
$
|
2,602
|
|
|
(11,416
|
)
|
|
$
|
(231,758
|
)
|
|
$
|
1,688,197
|
|
|
$
|
(426,714
|
)
|
|
$
|
(62,921
|
)
|
|
$
|
9,945
|
|
|
$
|
979,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at December 27, 2015
|
|
259,685
|
|
|
$
|
2,597
|
|
|
(4,862
|
)
|
|
$
|
(99,233
|
)
|
|
$
|
1,675,674
|
|
|
$
|
(261,252
|
)
|
|
$
|
(58,930
|
)
|
|
$
|
2,954
|
|
|
$
|
1,261,810
|
|
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118,371
|
|
|
—
|
|
|
(360
|
)
|
|
118,011
|
|
|||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,855
|
)
|
|
—
|
|
|
(6,855
|
)
|
|||||||
Share-based compensation plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Requisite service period recognition
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
880
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
880
|
|
|||||||
Common stock purchased under share repurchase
program |
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
(2,657
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,657
|
)
|
|||||||
Balance at March 27, 2016
|
|
259,685
|
|
|
$
|
2,597
|
|
|
(4,975
|
)
|
|
$
|
(101,890
|
)
|
|
$
|
1,676,554
|
|
|
$
|
(142,881
|
)
|
|
$
|
(65,785
|
)
|
|
$
|
2,594
|
|
|
$
|
1,371,189
|
|
PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
|
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(Unaudited)
|
||||||||
|
||||||||
|
|
Thirteen Weeks Ended
|
||||||
|
|
March 26, 2017
|
|
March 27, 2016
|
||||
|
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
94,463
|
|
|
$
|
118,011
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
50,390
|
|
|
42,391
|
|
||
Foreign currency transaction loss
|
|
2,158
|
|
|
—
|
|
||
Loss (gain) on property disposals
|
|
118
|
|
|
(129
|
)
|
||
Loss on equity method investments
|
|
(13
|
)
|
|
—
|
|
||
Share-based compensation
|
|
1,460
|
|
|
880
|
|
||
Deferred income tax expense (benefit)
|
|
13,330
|
|
|
(215
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Trade accounts and other receivables
|
|
(33,681
|
)
|
|
(1,894
|
)
|
||
Inventories
|
|
(54,448
|
)
|
|
22,829
|
|
||
Prepaid expenses and other current assets
|
|
(16,715
|
)
|
|
7,023
|
|
||
Accounts payable, accrued expenses and other current liabilities
|
|
(18,072
|
)
|
|
(55,990
|
)
|
||
Income taxes
|
|
25,380
|
|
|
55,261
|
|
||
Long-term pension and other postretirement obligations
|
|
(1,633
|
)
|
|
(2,311
|
)
|
||
Other operating assets and liabilities
|
|
(1,283
|
)
|
|
(362
|
)
|
||
Cash provided by operating activities
|
|
61,454
|
|
|
185,494
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Acquisitions of property, plant and equipment
|
|
(114,487
|
)
|
|
(37,074
|
)
|
||
Purchase of acquired business, net of cash acquired
|
|
(359,698
|
)
|
|
—
|
|
||
Proceeds from property disposals
|
|
181
|
|
|
610
|
|
||
Cash used in investing activities
|
|
(474,004
|
)
|
|
(36,464
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from note payable to bank
|
|
—
|
|
|
8,885
|
|
||
Payments on note payable to bank
|
|
—
|
|
|
(16,034
|
)
|
||
Proceeds from revolving line of credit and long-term borrowings
|
|
662,795
|
|
|
—
|
|
||
Payments on revolving line of credit, long-term borrowings and capital lease
obligations |
|
(330,772
|
)
|
|
(21
|
)
|
||
Proceeds from equity contribution under Tax Sharing Agreement between
JBS USA Food Company Holdings and Pilgrim’s Pride Corporation
|
|
5,038
|
|
|
3,691
|
|
||
Payment of capitalized loan costs
|
|
—
|
|
|
(13
|
)
|
||
Purchase of common stock under share repurchase program
|
|
(14,641
|
)
|
|
(2,657
|
)
|
||
Cash provided by (used in) financing activities
|
|
322,420
|
|
|
(6,149
|
)
|
||
Increase (decrease) in cash, cash equivalents and restricted cash
|
|
(90,130
|
)
|
|
142,881
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
|
125,307
|
|
|
439,638
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
35,177
|
|
|
$
|
582,519
|
|
1.
|
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
|
|
|
March 26, 2017
|
|
December 25, 2016
|
||||
|
|
(In thousands)
|
||||||
Cash and cash equivalents
|
|
$
|
30,762
|
|
|
$
|
120,328
|
|
Restricted cash
|
|
4,415
|
|
|
4,979
|
|
||
Total cash, cash equivalents and restricted cash shown in the
Condensed Consolidated Statements of Cash Flows |
|
$
|
35,177
|
|
|
$
|
125,307
|
|
2.
|
BUSINESS ACQUISITION
|
Negotiated sales price
|
$
|
350,000
|
|
Working capital adjustment
|
7,252
|
|
|
Preliminary purchase price
|
$
|
357,252
|
|
Cash and cash equivalents
|
$
|
10
|
|
Trade accounts and other receivables
|
18,453
|
|
|
Inventories
|
56,459
|
|
|
Prepaid expenses and other current assets
|
3,414
|
|
|
Property, plant and equipment
|
135,259
|
|
|
Identifiable intangible assets
|
85,610
|
|
|
Other long-lived assets
|
829
|
|
|
Total assets acquired
|
300,034
|
|
|
Accounts payable
|
23,848
|
|
|
Other current liabilities
|
12,712
|
|
|
Long-term deferred tax liabilities
|
—
|
|
|
Other long-term liabilities
|
3,393
|
|
|
Total liabilities assumed
|
39,953
|
|
|
Total identifiable net assets
|
260,081
|
|
|
Goodwill
|
97,171
|
|
|
Total net assets
|
$
|
357,252
|
|
|
Fair Value
|
|
Useful Life
|
||
Assets subject to amortization:
|
|
|
|
||
Customer relationships
|
$
|
16,360
|
|
|
10.0
|
Non-compete agreement
|
510
|
|
|
3.0
|
|
Total fair value
|
16,870
|
|
|
|
|
Weighted average useful life
|
|
|
9.8
|
||
Assets not subject to amortization:
|
|
|
|
||
Trade names
|
68,740
|
|
|
|
|
Total fair value
|
$
|
85,610
|
|
|
|
Balance, beginning of period
|
$
|
125,607
|
|
Preliminary purchase price attributed to goodwill
|
97,171
|
|
|
Balance, end of period
|
$
|
222,778
|
|
|
Thirteen Weeks
Ended
March 26, 2017
|
|
Thirteen Weeks
Ended
March 27, 2016 |
||||
|
(In thousands, except per share amount)
|
||||||
Net sales
|
$
|
2,026,290
|
|
|
$
|
2,069,103
|
|
Net income attributable to Pilgrim's Pride Corporation
|
92,599
|
|
|
116,096
|
|
||
Net income attributable to Pilgrim's Pride Corporation
per common share - diluted |
0.37
|
|
|
0.46
|
|
3.
|
FAIR VALUE MEASUREMENTS
|
Level 1
|
|
Unadjusted quoted prices in active markets for identical assets or liabilities;
|
|
|
|
Level 2
|
|
Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or
|
|
|
|
Level 3
|
|
Unobservable inputs, such as discounted cash flow models or valuations.
|
|
|
March 26, 2017
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Fair value assets:
|
|
|
|
|
|
|
|
|
||||||||
Commodity futures instruments
|
|
$
|
3,978
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,978
|
|
Fair value liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Commodity futures instruments
|
|
(3,321
|
)
|
|
—
|
|
|
—
|
|
|
(3,321
|
)
|
||||
Commodity options instruments
|
|
(913
|
)
|
|
—
|
|
|
—
|
|
|
(913
|
)
|
||||
Foreign currency instruments
|
|
(605
|
)
|
|
—
|
|
|
—
|
|
|
(605
|
)
|
|
|
December 25, 2016
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Fair value assets:
|
|
|
|
|
|
|
|
|
||||||||
Commodity futures instruments
|
|
$
|
5,341
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,341
|
|
Commodity options instruments
|
|
98
|
|
|
—
|
|
|
—
|
|
|
98
|
|
||||
Fair value liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Commodity futures instruments
|
|
(4,063
|
)
|
|
—
|
|
|
—
|
|
|
(4,063
|
)
|
||||
Commodity option instruments
|
|
(2,764
|
)
|
|
—
|
|
|
—
|
|
|
(2,764
|
)
|
|
|
March 26, 2017
|
|
December 25, 2016
|
||||||||||||
|
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
||||||||
|
|
|
|
(In thousands)
|
|
|
||||||||||
Fixed-rate senior notes payable at 5.75%, at Level 1 inputs
|
|
$
|
(500,000
|
)
|
|
$
|
(510,250
|
)
|
|
$
|
(500,000
|
)
|
|
$
|
(503,395
|
)
|
4.
|
TRADE ACCOUNTS AND OTHER RECEIVABLES
|
|
|
March 26, 2017
|
|
December 25, 2016
|
||||
|
|
(In thousands)
|
||||||
Trade accounts receivable
|
|
$
|
353,103
|
|
|
$
|
305,337
|
|
Notes receivable - current
|
|
630
|
|
|
630
|
|
||
Other receivables
|
|
18,451
|
|
|
15,766
|
|
||
Receivables, gross
|
|
372,184
|
|
|
321,733
|
|
||
Allowance for doubtful accounts
|
|
(4,833
|
)
|
|
(4,563
|
)
|
||
Receivables, net
|
|
$
|
367,351
|
|
|
$
|
317,170
|
|
|
|
|
|
|
||||
Account receivable from related parties
(a)
|
|
$
|
3,282
|
|
|
$
|
3,913
|
|
Balance, beginning of period
|
|
$
|
(4,563
|
)
|
Provision charged to operating results
|
|
(55
|
)
|
|
Account write-offs and recoveries
|
|
24
|
|
|
GNP acquisition
|
|
(17
|
)
|
|
Effect of exchange rate
|
|
(222
|
)
|
|
Balance, end of period
|
|
$
|
(4,833
|
)
|
5.
|
INVENTORIES
|
|
March 26, 2017
|
|
December 25, 2016
|
||||
|
(In thousands)
|
||||||
Live chicken and hens
|
$
|
388,663
|
|
|
$
|
362,054
|
|
Feed, eggs and other
|
315,265
|
|
|
250,680
|
|
||
Finished chicken products
|
215,138
|
|
|
182,918
|
|
||
Total chicken inventories
|
919,066
|
|
|
795,652
|
|
||
Commercial feed and other
|
5,103
|
|
|
17,610
|
|
||
Total inventories
|
$
|
924,169
|
|
|
$
|
813,262
|
|
6.
|
INVESTMENTS IN SECURITIES
|
|
|
March 26, 2017
|
|
December 25, 2016
|
||||||||||||
|
|
Amortized Cost
|
|
Fair
Value |
|
Amortized Cost
|
|
Fair
Value |
||||||||
|
|
(In thousands)
|
||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44,865
|
|
|
$
|
44,865
|
|
Other
|
|
62
|
|
|
62
|
|
|
61
|
|
|
61
|
|
7.
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
|
March 26, 2017
|
|
December 25, 2016
|
||||
|
(Fair values in thousands)
|
||||||
Fair values:
|
|
|
|
||||
Commodity derivative assets
|
$
|
3,978
|
|
|
$
|
5,439
|
|
Commodity derivative liabilities
|
(4,234
|
)
|
|
(6,827
|
)
|
||
Foreign currency derivative liabilities
|
(605
|
)
|
|
—
|
|
||
Cash collateral posted with brokers
|
4,415
|
|
|
4,979
|
|
||
Derivatives coverage
(a)
:
|
|
|
|
||||
Corn
|
0.3
|
%
|
|
2.3
|
%
|
||
Soybean meal
|
0.9
|
%
|
|
0.3
|
%
|
||
Period through which stated percent of needs are covered:
|
|
|
|
||||
Corn
|
September 2018
|
|
|
September 2018
|
|
||
Soybean meal
|
December 2017
|
|
|
July 2017
|
|
(a)
|
Derivatives coverage is the percent of anticipated commodity needs covered by outstanding derivative instruments through a specified date.
|
8.
|
PROPERTY, PLANT AND EQUIPMENT
|
|
March 26, 2017
|
|
December 25, 2016
|
||||
|
(In thousands)
|
||||||
Land
|
$
|
162,010
|
|
|
$
|
112,132
|
|
Buildings
|
1,247,579
|
|
|
1,169,984
|
|
||
Machinery and equipment
|
1,839,555
|
|
|
1,789,550
|
|
||
Autos and trucks
|
48,214
|
|
|
50,964
|
|
||
Construction-in-progress
|
301,451
|
|
|
231,874
|
|
||
PP&E, gross
|
3,598,809
|
|
|
3,354,504
|
|
||
Accumulated depreciation
|
(1,888,966
|
)
|
|
(1,848,564
|
)
|
||
PP&E, net
|
$
|
1,709,843
|
|
|
$
|
1,505,940
|
|
9.
|
CURRENT LIABILITIES
|
|
March 26, 2017
|
|
December 25, 2016
|
||||
|
(In thousands)
|
||||||
Accounts payable:
|
|
|
|
||||
Trade accounts
|
$
|
478,628
|
|
|
$
|
487,214
|
|
Book overdrafts
|
78,490
|
|
|
63,577
|
|
||
Other payables
|
18,663
|
|
|
4,306
|
|
||
Total accounts payable
|
575,781
|
|
|
555,097
|
|
||
Accounts payable to related parties
(a)
|
5,089
|
|
|
1,421
|
|
||
Accrued expenses and other current liabilities:
|
|
|
|
||||
Compensation and benefits
|
91,826
|
|
|
110,385
|
|
||
Interest and debt-related fees
|
2,578
|
|
|
8,685
|
|
||
Insurance and self-insured claims
|
83,705
|
|
|
82,544
|
|
||
Derivative liabilities:
|
|
|
|
||||
Futures
|
3,321
|
|
|
4,063
|
|
||
Options
|
913
|
|
|
2,764
|
|
||
Foreign currency
|
605
|
|
|
—
|
|
||
Other accrued expenses
|
101,886
|
|
|
82,258
|
|
||
Total accrued expenses and other current liabilities
|
284,834
|
|
|
290,699
|
|
||
|
$
|
865,704
|
|
|
$
|
847,217
|
|
10.
|
LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS
|
|
Maturity
|
|
March 26, 2017
|
|
December 25, 2016
|
||||
|
|
|
(In thousands)
|
||||||
Long-term debt and other long-term borrowing arrangements:
|
|
|
|
|
|
||||
Senior notes payable at 5.75%
|
2025
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
U.S. Credit Facility (defined below):
|
|
|
|
|
|
||||
Term note payable at 2.23%
|
2020
|
|
500,000
|
|
|
500,000
|
|
||
Revolving note payable at 2.17%
|
2020
|
|
314,559
|
|
|
—
|
|
||
Mexico Credit Facility (defined below) with notes payable at
TIIE Rate plus 0.95% |
2019
|
|
42,949
|
|
|
23,304
|
|
||
Capital lease obligations
|
Various
|
|
353
|
|
|
376
|
|
||
Long-term debt
|
|
|
1,357,861
|
|
|
1,023,680
|
|
||
Less: Current maturities of long-term debt
|
|
|
(96
|
)
|
|
(94
|
)
|
||
Long-term debt, less current maturities
|
|
|
1,357,765
|
|
|
1,023,586
|
|
||
Less: Capitalized financing costs
|
|
|
(10,775
|
)
|
|
(11,728
|
)
|
||
Long-term debt, less current maturities, net of capitalized financing costs:
|
|
|
$
|
1,346,990
|
|
|
$
|
1,011,858
|
|
11.
|
INCOME TAXES
|
12.
|
PENSION AND OTHER POSTRETIREMENT BENEFITS
|
|
Thirteen Weeks Ended
March 26, 2017 |
|
Thirteen Weeks Ended
March 27, 2016 |
||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
Change in projected benefit obligation:
|
(In thousands)
|
||||||||||||||
Projected benefit obligation, beginning of period
|
$
|
167,159
|
|
|
$
|
1,648
|
|
|
$
|
165,952
|
|
|
$
|
1,672
|
|
Interest cost
|
1,393
|
|
|
13
|
|
|
1,396
|
|
|
12
|
|
||||
Actuarial losses (gains)
|
785
|
|
|
(24
|
)
|
|
4,417
|
|
|
51
|
|
||||
Benefits paid
|
(2,237
|
)
|
|
(37
|
)
|
|
(2,365
|
)
|
|
(35
|
)
|
||||
Projected benefit obligation, end of period
|
$
|
167,100
|
|
|
$
|
1,600
|
|
|
$
|
169,400
|
|
|
$
|
1,700
|
|
|
Thirteen Weeks Ended
March 26, 2017 |
|
Thirteen Weeks Ended
March 27, 2016 |
||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
Change in plan assets:
|
(In thousands)
|
||||||||||||||
Fair value of plan assets, beginning of period
|
$
|
97,526
|
|
|
$
|
—
|
|
|
$
|
96,947
|
|
|
$
|
—
|
|
Actual return on plan assets
|
3,965
|
|
|
—
|
|
|
(5,446
|
)
|
|
—
|
|
||||
Contributions by employer
|
1,926
|
|
|
37
|
|
|
2,541
|
|
|
35
|
|
||||
Benefits paid
|
(2,237
|
)
|
|
(37
|
)
|
|
(2,365
|
)
|
|
(35
|
)
|
||||
Fair value of plan assets, end of period
|
$
|
101,180
|
|
|
$
|
—
|
|
|
$
|
91,677
|
|
|
$
|
—
|
|
|
March 26, 2017
|
|
December 25, 2016
|
||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
Funded status:
|
(In thousands)
|
||||||||||||||
Unfunded benefit obligation, end of period
|
$
|
(65,920
|
)
|
|
$
|
(1,600
|
)
|
|
$
|
(69,633
|
)
|
|
$
|
(1,648
|
)
|
|
March 26, 2017
|
|
December 25, 2016
|
||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
Amounts recognized in the Condensed Consolidated Balance Sheets at end of period:
|
(In thousands)
|
||||||||||||||
Current liability
|
$
|
(13,108
|
)
|
|
$
|
(147
|
)
|
|
$
|
(13,113
|
)
|
|
$
|
(147
|
)
|
Long-term liability
|
(52,812
|
)
|
|
(1,453
|
)
|
|
(56,520
|
)
|
|
(1,501
|
)
|
||||
Recognized liability
|
$
|
(65,920
|
)
|
|
$
|
(1,600
|
)
|
|
$
|
(69,633
|
)
|
|
$
|
(1,648
|
)
|
|
March 26, 2017
|
|
December 25, 2016
|
||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
Amounts recognized in accumulated other comprehensive loss at end of period:
|
(In thousands)
|
||||||||||||||
Net actuarial loss (gain)
|
$
|
44,394
|
|
|
$
|
(55
|
)
|
|
$
|
46,494
|
|
|
$
|
(31
|
)
|
|
Thirteen Weeks Ended
March 26, 2017 |
|
Thirteen Weeks Ended
March 27, 2016 |
||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
|
(In thousands)
|
||||||||||||||
Interest cost
|
$
|
1,393
|
|
|
$
|
13
|
|
|
$
|
1,396
|
|
|
$
|
12
|
|
Estimated return on plan
assets
|
(1,313
|
)
|
|
—
|
|
|
(1,314
|
)
|
|
—
|
|
||||
Amortization of net loss
|
233
|
|
|
—
|
|
|
165
|
|
|
—
|
|
||||
Net costs
|
$
|
313
|
|
|
$
|
13
|
|
|
$
|
247
|
|
|
$
|
12
|
|
|
March 26, 2017
|
|
December 25, 2016
|
||||||||
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||
Assumptions used to measure benefit obligation at end of period:
|
|
|
|
|
|
|
|
||||
Discount rate
|
4.29
|
%
|
|
3.78
|
%
|
|
4.31
|
%
|
|
3.81
|
%
|
|
Thirteen Weeks Ended
March 26, 2017 |
|
Thirteen Weeks Ended
March 27, 2016 |
||||||||
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||
Assumptions used to measure net pension and other postretirement cost:
|
|
|
|
|
|
|
|
||||
Discount rate
|
4.31
|
%
|
|
3.81
|
%
|
|
4.47
|
%
|
|
4.47
|
%
|
Expected return on plan assets
|
5.50
|
%
|
|
NA
|
|
|
5.50
|
%
|
|
NA
|
|
|
Increase in Discount Rate of 0.25%
|
|
Decrease in Discount Rate of 0.25%
|
||||
|
(In thousands)
|
||||||
Impact on projected benefit obligation for pension benefits
|
$
|
(4,617
|
)
|
|
$
|
4,909
|
|
|
March 26, 2017
|
|
December 25, 2016
|
||
Cash and cash equivalents
|
—
|
%
|
|
—
|
%
|
Pooled separate accounts
(a)
:
|
|
|
|
||
Equity securities
|
5
|
%
|
|
5
|
%
|
Fixed income securities
|
5
|
%
|
|
5
|
%
|
Common collective trust funds
(a)
:
|
|
|
|
||
Equity securities
|
60
|
%
|
|
60
|
%
|
Fixed income securities
|
30
|
%
|
|
30
|
%
|
Total assets
|
100
|
%
|
|
100
|
%
|
(a)
|
Pooled separate accounts (“PSAs”) and common collective trust funds (“CCTs”) are two of the most common types of alternative vehicles in which benefit plans invest. These investments are pooled funds that look like mutual funds, but they are not registered with the SEC. Often times, they will be invested in mutual funds or other marketable securities, but the unit price generally will be different from the value of the underlying securities because the fund may also hold cash for liquidity purposes, and the fees imposed by the fund are deducted from the fund value rather than charged separately to investors. Some PSAs and CCTs have no restrictions as to their investment strategy and can invest in riskier investments, such as derivatives, hedge funds, private equity funds, or similar investments.
|
|
March 26, 2017
|
|
December 25, 2016
|
||||||||||||||||||||||||||||
|
Level 1
(a)
|
|
Level 2
(b)
|
|
Level 3
(c)
|
|
Total
|
|
Level 1
(a)
|
|
Level 2
(b)
|
|
Level 3
(c)
|
|
Total
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||
Cash and cash equivalents
|
$
|
140
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
140
|
|
|
$
|
119
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
119
|
|
Pooled separate accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Large U.S. equity funds
(d)
|
—
|
|
|
3,456
|
|
|
—
|
|
|
3,456
|
|
|
—
|
|
|
3,302
|
|
|
—
|
|
|
3,302
|
|
||||||||
Small/Mid U.S. equity funds
(e)
|
—
|
|
|
409
|
|
|
—
|
|
|
409
|
|
|
—
|
|
|
406
|
|
|
—
|
|
|
406
|
|
||||||||
International equity funds
(f)
|
—
|
|
|
1,349
|
|
|
—
|
|
|
1,349
|
|
|
—
|
|
|
1,231
|
|
|
—
|
|
|
1,231
|
|
||||||||
Fixed income funds
(g)
|
—
|
|
|
4,828
|
|
|
—
|
|
|
4,828
|
|
|
—
|
|
|
4,867
|
|
|
—
|
|
|
4,867
|
|
||||||||
Common collective trusts funds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Large U.S. equity funds
(d)
|
—
|
|
|
24,785
|
|
|
—
|
|
|
24,785
|
|
|
—
|
|
|
24,547
|
|
|
—
|
|
|
24,547
|
|
||||||||
Small U.S. equity funds
(e)
|
—
|
|
|
17,080
|
|
|
—
|
|
|
17,080
|
|
|
—
|
|
|
17,344
|
|
|
—
|
|
|
17,344
|
|
||||||||
International equity funds
(f)
|
—
|
|
|
18,784
|
|
|
—
|
|
|
18,784
|
|
|
—
|
|
|
17,006
|
|
|
—
|
|
|
17,006
|
|
||||||||
Fixed income funds
(g)
|
—
|
|
|
30,349
|
|
|
—
|
|
|
30,349
|
|
|
—
|
|
|
28,704
|
|
|
—
|
|
|
28,704
|
|
||||||||
Total assets
|
$
|
140
|
|
|
$
|
101,040
|
|
|
$
|
—
|
|
|
$
|
101,180
|
|
|
$
|
119
|
|
|
$
|
97,407
|
|
|
$
|
—
|
|
|
$
|
97,526
|
|
(a)
|
Unadjusted quoted prices in active markets for identical assets are used to determine fair value.
|
(b)
|
Quoted prices in active markets for similar assets and inputs that are observable for the asset are used to determine fair value.
|
(c)
|
Unobservable inputs, such as discounted cash flow models or valuations, are used to determine fair value.
|
(d)
|
This category is comprised of investment options that invest in stocks, or shares of ownership, in large, well-established U.S. companies. These investment options typically carry more risk than fixed income options but have the potential for higher returns over longer time periods.
|
(e)
|
This category is generally comprised of investment options that invest in stocks, or shares of ownership, in small to medium-sized U.S. companies. These investment options typically carry more risk than larger U.S. equity investment options but have the potential for higher returns.
|
(f)
|
This category is comprised of investment options that invest in stocks, or shares of ownership, in companies with their principal place of business or office outside of the U.S.
|
(g)
|
This category is comprised of investment options that invest in bonds, or debt of a company or government entity (including U.S. and non-U.S. entities). It may also include real estate investment options that directly own property. These investment options typically carry more risk than short-term fixed income investment options (including, for real estate investment options, liquidity risk), but less overall risk than equities.
|
|
Pension Benefits
|
|
Other Benefits
|
||||
|
(In thousands)
|
||||||
2017 (remaining)
|
$
|
12,723
|
|
|
$
|
110
|
|
2018
|
11,617
|
|
|
147
|
|
||
2019
|
11,088
|
|
|
146
|
|
||
2020
|
11,019
|
|
|
144
|
|
||
2021
|
10,790
|
|
|
142
|
|
||
2022-2026
|
49,927
|
|
|
640
|
|
||
Total
|
$
|
107,164
|
|
|
$
|
1,329
|
|
|
Thirteen Weeks Ended
March 26, 2017 |
|
Thirteen Weeks Ended
March 27, 2016 |
||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||
|
(In thousands)
|
||||||||||||||
Net actuarial loss (gain), beginning of period
|
$
|
46,494
|
|
|
$
|
(31
|
)
|
|
$
|
38,115
|
|
|
$
|
(79
|
)
|
Amortization
|
(233
|
)
|
|
—
|
|
|
(165
|
)
|
|
—
|
|
||||
Curtailment and settlement adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Actuarial loss (gain)
|
785
|
|
|
(24
|
)
|
|
4,417
|
|
|
51
|
|
||||
Asset loss (gain)
|
(2,652
|
)
|
|
—
|
|
|
6,759
|
|
|
—
|
|
||||
Net actuarial loss (gain), end of period
|
$
|
44,394
|
|
|
$
|
(55
|
)
|
|
$
|
49,126
|
|
|
$
|
(28
|
)
|
13.
|
STOCKHOLDERS' EQUITY
|
|
Thirteen Weeks Ended March 26, 2017
(a)
|
|
Thirteen Weeks Ended
March 27, 2016
(a)
|
||||||||||||
|
Losses Related
to Pension and
Other
Postretirement
Benefits
|
|
Losses Related to Pension and Other Postretirement Benefits
|
|
Unrealized Holding Gains on Available-for-Sale Securities
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance, beginning of period
|
$
|
(64,243
|
)
|
|
$
|
(58,997
|
)
|
|
$
|
67
|
|
|
$
|
(58,930
|
)
|
Other comprehensive income (loss)
before reclassifications
|
1,177
|
|
|
(6,988
|
)
|
|
171
|
|
|
(6,817
|
)
|
||||
Amounts reclassified from accumulated
other comprehensive loss to net
income
|
145
|
|
|
103
|
|
|
(141
|
)
|
|
(38
|
)
|
||||
Net current period other comprehensive
income (loss)
|
1,322
|
|
|
(6,885
|
)
|
|
30
|
|
|
(6,855
|
)
|
||||
Balance, end of period
|
$
|
(62,921
|
)
|
|
$
|
(65,882
|
)
|
|
$
|
97
|
|
|
$
|
(65,785
|
)
|
(a)
|
All amounts are net of tax. Amounts in parentheses indicate debits to accumulated other comprehensive loss.
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Loss
(a)
|
|
|
||||||
Details about Accumulated Other Comprehensive Loss Components
|
|
Thirteen Weeks Ended
March 26, 2017
|
|
Thirteen Weeks Ended
March 27, 2016
|
|
Affected Line Item in the Condensed Consolidated Statements of Operations
|
||||
|
|
(In thousands)
|
|
|
||||||
Realized gain on sale of securities
|
|
$
|
—
|
|
|
$
|
226
|
|
|
Interest income
|
Amortization of defined benefit pension
and other postretirement plan actuarial
losses:
|
|
|
|
|
|
|
||||
Union employees pension plan
(b)(d)
|
|
(6
|
)
|
|
(5
|
)
|
|
Cost of sales
|
||
Legacy Gold Kist plans
(c)(d)
|
|
(71
|
)
|
|
(50
|
)
|
|
Cost of sales
|
||
Legacy Gold Kist plans
(c)(d)
|
|
(156
|
)
|
|
(110
|
)
|
|
Selling, general and administrative expense
|
||
Total before tax
|
|
(233
|
)
|
|
61
|
|
|
|
||
Tax benefit (expense)
|
|
88
|
|
|
(23
|
)
|
|
|
||
Total reclassification for the period
|
|
$
|
(145
|
)
|
|
$
|
38
|
|
|
|
(a)
|
Amounts in parentheses represent debits to results of operations.
|
(b)
|
The Company sponsors the Pilgrim’s Pride Retirement Plan for Union Employees, a qualified defined benefit pension plan covering certain locations or work groups with collective bargaining agreements.
|
(c)
|
The Company sponsors the Pilgrim’s Pride Plan for Legacy Gold Kist Employees, a qualified defined benefit pension plan covering certain eligible U.S. employees who were employed at locations that the Company purchased through its acquisition of Gold Kist in 2007, the Former Gold Kist Inc. Supplemental Executive Retirement Plan, a nonqualified defined benefit retirement plan covering certain former Gold Kist executives, the Former Gold Kist Inc. Directors’ Emeriti Plan, a nonqualified defined benefit retirement plan covering certain former Gold Kist directors, and the Gold Kist Inc. Retiree Life Insurance Plan, a defined benefit postretirement life insurance plan covering certain retired Gold Kist employees.
|
(d)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See “Note 12. Pension and Other Postretirement Benefits” to the Condensed Consolidated Financial Statements.
|
14.
|
INCENTIVE COMPENSATION
|
Award Type
|
|
Benefit
Plan
|
|
Awards Granted
|
|
Grant
Date
|
|
Grant Date Fair Value per Award
(a)
|
|
Vesting Condition
|
|
Vesting Date
|
|
Vesting Date Fair Value per Award
(a)
|
|
Estimated Forfeiture Rate
|
|
Awards Forfeited to Date
|
|
Settlement Method
|
|||||||
RSU
|
|
LTIP
|
|
449,217
|
|
|
02/19/2014
|
|
$
|
16.70
|
|
|
Service
|
|
12/31/2016
|
|
$
|
18.99
|
|
|
13.49
|
%
|
|
86,458
|
|
|
Stock
|
RSU
|
|
LTIP
|
|
223,701
|
|
|
03/03/2014
|
|
17.18
|
|
|
Performance / Service
|
|
12/31/2017
|
|
|
|
12.34
|
%
|
|
55,516
|
|
|
Stock
|
|||
RSU
|
(b)
|
LTIP
|
|
45,961
|
|
|
02/11/2015
|
|
25.87
|
|
|
Service
|
|
12/31/2017
|
|
18.99
|
|
|
12.34
|
%
|
|
—
|
|
|
Stock
|
||
RSU
|
|
LTIP
|
|
251,136
|
|
|
03/30/2016
|
|
25.36
|
|
|
Performance / Service
|
|
12/31/2019
|
|
18.99
|
|
|
(d)
|
|
|
251,136
|
|
|
Stock
|
||
RSU
|
(b)
|
LTIP
|
|
74,536
|
|
|
10/13/2016
|
|
20.93
|
|
|
Service
|
|
12/31/2016
|
|
|
|
—
|
%
|
|
—
|
|
|
Stock
|
|||
RSU
|
|
LTIP
|
|
389,424
|
|
|
01/19/2017
|
|
18.39
|
|
|
Performance / Service
|
|
(e)
|
|
|
|
—
|
%
|
|
—
|
|
|
Stock
|
|||
RSU
|
(c)
|
LTIP
|
|
48,586
|
|
|
02/13/2017
|
|
20.52
|
|
|
Service
|
|
2/13/2017
|
|
|
|
—
|
%
|
|
—
|
|
|
Stock
|
|||
RSU
|
(c)
|
LTIP
|
|
23,469
|
|
|
02/13/2017
|
|
20.52
|
|
|
Service
|
|
12/31/2017
|
|
|
|
—
|
%
|
|
—
|
|
|
Stock
|
(a)
|
The fair value of each RSU granted or vested represents the closing price of the Company's common stock on the respective grant date or vesting date.
|
(b)
|
On February 17, 2015, the Company paid a special cash dividend to stockholders of record as of January 30, 2015 totaling
$5.77
per share. On January 27, 2015, the Compensation Committee of the Company's Board of Directors agreed to grant additional RSUs to LTIP participants that were equal to the amount of the dividend that would be awarded to them had their RSUs existing as of the dividend record date been vested. The additional RSUs that were granted to the LTIP participants are subject to the same vesting requirements as the underlying RSUs granted under the LTIP.
|
(c)
|
On May 18, 2016, the Company paid a special cash dividend to stockholders of record as of May 10, 2015 totaling
$2.75
per share. On October 27, 2016, the Compensation Committee of the Company's Board of Directors agreed to grant additional RSUs to LTIP participants that were equal to the amount of the dividend that would be awarded to them had their RSUs existing as of the dividend record date been vested. The additional RSUs that were granted to the LTIP participants are subject to the same vesting requirements as the underlying RSUs granted under the LTIP.
|
(d)
|
Performance conditions associated with these awards were not satisfied. Therefore,
100%
of the awards were forfeited during the thirteen weeks ended
March 26, 2017
.
|
(e)
|
The subject RSUs will vest in ratable tranches on December 31, 2018, December 31, 2019, and December 31, 2020.
|
|
Thirteen Weeks Ended
|
||||||
|
March 26, 2017
|
|
March 27, 2016
|
||||
|
(In thousands)
|
||||||
Share-based compensation cost:
|
|
|
|
||||
Cost of sales
|
$
|
149
|
|
|
$
|
99
|
|
Selling, general and administrative expense
|
1,311
|
|
|
781
|
|
||
Total
|
$
|
1,460
|
|
|
$
|
880
|
|
|
|
|
|
||||
Income tax benefit
|
$
|
417
|
|
|
$
|
257
|
|
|
Thirteen Weeks Ended March 26, 2017
|
|
Thirteen Weeks Ended March 27, 2016
|
||||||||||
|
Number
|
|
Weighted Average Grant Date Fair Value
|
|
Number
|
|
Weighted Average Grant Date Fair Value
|
||||||
|
(In thousands, except weighted average fair values)
|
||||||||||||
Outstanding at beginning of period
|
906
|
|
|
$
|
20.00
|
|
|
774
|
|
|
$
|
18.78
|
|
Granted
|
462
|
|
|
18.72
|
|
|
—
|
|
|
—
|
|
||
Vested
|
(486
|
)
|
|
17.73
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(251
|
)
|
|
25.36
|
|
|
(148
|
)
|
|
26.82
|
|
||
Outstanding at end of period
|
631
|
|
|
$
|
18.68
|
|
|
626
|
|
|
$
|
16.88
|
|
15.
|
RELATED PARTY TRANSACTIONS
|
|
Thirteen Weeks Ended
|
|
||||||
|
March 26, 2017
|
|
March 27, 2016
|
|
||||
|
(In thousands)
|
|||||||
JBS USA Food Company Holdings
:
|
|
|
|
|
||||
Letter of credit fees
(a)
|
$
|
—
|
|
|
$
|
202
|
|
|
JBS USA Food Company:
|
|
|
|
|
||||
Purchases from JBS USA Food Company
(b)
|
27,289
|
|
|
20,511
|
|
|
||
Expenditures paid by JBS USA Food Company on behalf of Pilgrim’s Pride Corporation
(c)
|
10,949
|
|
|
7,604
|
|
|
||
Sales to JBS USA Food Company
(b)
|
4,563
|
|
|
3,302
|
|
|
||
Expenditures paid by Pilgrim’s Pride Corporation on behalf of JBS USA Food Company
(c)
|
865
|
|
|
6,963
|
|
|
||
JBS Chile Ltda.:
|
|
|
|
|
||||
Sales to JBS Chile Ltda.
|
—
|
|
|
205
|
|
|
||
JBS Global (UK) Ltd.:
|
|
|
|
|
||||
Sales to JBS Global (UK) Ltd.
|
19
|
|
|
122
|
|
|
||
JBS Five Rivers
|
|
|
|
|
||||
Sales to JBS Five Rivers
|
7,122
|
|
|
—
|
|
|
||
J&F Investimentos Ltd.:
|
|
|
|
|
||||
Sales to J&F Investimentos Ltd.
|
104
|
|
|
—
|
|
|
(a)
|
JBS USA Food Company Holdings (“JBS USA Holdings”) arranged for letters of credit to be issued on its account in the aggregate amount of
$56.5 million
to an insurance company on behalf of the Company in order to allow that insurance company to return cash it held as collateral against potential workers’ compensation, auto liability and general liability claims. In return for providing this letter of credit, the Company has agreed to reimburse JBS USA Holdings for the letter of credit fees the Company would otherwise incur under its U.S. Credit Facility. The letter of credit arrangements for
$40.0 million
and
$16.5 million
were terminated on March 7, 2016 and April 1, 2016, respectively. For the thirteen weeks ended March 27, 2016, the Company paid JBS USA Holdings $
0.2 million
for letter of credit fees.
|
(b)
|
We routinely execute transactions to both purchase products from JBS USA Food Company (“JBS USA”) and sell products to them. As of
March 26, 2017
and December 25, 2016, the outstanding payable to JBS USA was
$5.1 million
and
$1.4 million
, respectively. As of
March 26, 2017
and December 25, 2016, the outstanding receivable from JBS USA was
$3.3 million
and
$3.8 million
, respectively. As of
March 26, 2017
, approximately $
2.0 million
of goods from JBS USA were in transit and not reflected on our Condensed Consolidated Balance Sheet.
|
(c)
|
The Company has an agreement with JBS USA to allocate costs associated with JBS USA’s procurement of SAP licenses and maintenance services for its combined companies. Under this agreement, the fees associated with procuring SAP licenses and maintenance services are allocated between the Company and JBS USA in proportion to the percentage of licenses used by each company. The agreement expires on the date of expiration, or earlier termination, of the underlying SAP license agreement. The Company also has an agreement with JBS USA to allocate the costs of supporting the business operations by one consolidated corporate team, which have historically been supported by their respective corporate teams. Expenditures paid by JBS USA on behalf of the Company will be reimbursed by the Company and expenditures paid by the Company on behalf of JBS USA will be reimbursed by JBS USA. This agreement expires on December 31, 2019.
|
16.
|
COMMITMENTS AND CONTINGENCIES
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Corn
|
|
Soybean Meal
|
||||||||||||
|
Highest Price
|
|
Lowest Price
|
|
Highest Price
|
|
Lowest Price
|
||||||||
2017:
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
$
|
3.86
|
|
|
$
|
3.55
|
|
|
$
|
352.70
|
|
|
$
|
314.10
|
|
2016:
|
|
|
|
|
|
|
|
||||||||
Fourth Quarter
|
3.98
|
|
|
3.58
|
|
|
320.70
|
|
|
269.00
|
|
||||
Third Quarter
|
3.94
|
|
|
3.16
|
|
|
401.00
|
|
|
302.80
|
|
||||
Second Quarter
|
4.38
|
|
|
3.52
|
|
|
418.30
|
|
|
266.80
|
|
||||
First Quarter
|
3.73
|
|
|
3.52
|
|
|
275.30
|
|
|
257.20
|
|
||||
2015:
|
|
|
|
|
|
|
|
||||||||
Fourth Quarter
|
3.98
|
|
|
3.58
|
|
|
320.70
|
|
|
269.00
|
|
||||
Third Quarter
|
4.34
|
|
|
3.48
|
|
|
374.80
|
|
|
302.40
|
|
||||
Second Quarter
|
4.10
|
|
|
3.53
|
|
|
326.40
|
|
|
286.50
|
|
||||
First Quarter
|
4.13
|
|
|
3.70
|
|
|
377.40
|
|
|
317.50
|
|
Sources of net sales
|
|
Thirteen
Weeks Ended March 26, 2017 |
|
Change from
Thirteen Weeks Ended March 27, 2016 |
|
|||||||
Amount
|
|
Percent
|
|
|||||||||
|
|
(In thousands, except percent data)
|
|
|||||||||
United States
|
|
$
|
1,736,405
|
|
|
$
|
66,124
|
|
|
4.0
|
%
|
(a)
|
Mexico
|
|
284,087
|
|
|
(8,569
|
)
|
|
(2.9
|
)%
|
(b)
|
||
Total net sales
|
|
$
|
2,020,492
|
|
|
$
|
57,555
|
|
|
2.9
|
%
|
|
(a)
|
U.S. net sales generated in the
thirteen weeks
ended
March 26, 2017
increased
$66.1 million
, or
4.0%
, from U.S. net sales generated in the
thirteen weeks
ended
March 27, 2016
primarily because of net sales generated by the recently acquired GNP operations and an increase in net sales per pound experienced by our existing operations. The impact of the acquired business contributed $97.8 million, or 5.9 percentage points, to the increase in net sales. The net sales per pound increase experienced by our existing operations contributed $26.8 million, or 1.6 percentage points, to the increase in net sales. A decrease in sales volume experienced by of our existing operations partially offset the effect that the acquired business and the increase in net sales per pound experienced by our existing operations had on U.S. net sales by $58.5 million, or 3.5 percentage points. Included in U.S. net sales generated during the thirteen weeks ended
March 26, 2017
and
March 27, 2016
were net sales to JBS USA Food Company totaling
$4.6 million
and
$3.3 million
, respectively.
|
(b)
|
Mexico net sales generated in the
thirteen weeks
ended
March 26, 2017
decreased
$8.6 million
, or
2.9%
, from Mexico net sales generated in the
thirteen weeks
ended
March 27, 2016
primarily because of the impact of foreign currency translation partially offset by increases in net sales per pound and sales volume. The impact of foreign currency translation contributed $38.5 million, or 13.2 percentage points, to the decrease in net sales. Higher net sales per pound, which resulted primarily from higher market prices, and increased sales volume partially offset the effect that the foreign currency impact had on Mexico net sales by $22.6 million, or 7.7 percentage points, and $7.4 million, or 2.5 percentage points, respectively. Other factors affecting the decrease in Mexico net sales were immaterial.
|
Sources of gross profit
|
|
Thirteen
Weeks Ended March 26, 2017 |
|
Change from
Thirteen Weeks Ended March 27, 2016 |
|
|||||||
Amount
|
|
Percent
|
|
|||||||||
|
|
(In thousands, except percent data)
|
|
|||||||||
United States
|
|
$
|
188,306
|
|
|
$
|
(28,020
|
)
|
|
(13.0
|
)%
|
(a)
|
Mexico
|
|
26,875
|
|
|
5,663
|
|
|
26.7
|
%
|
(b)
|
||
Elimination
|
|
24
|
|
|
—
|
|
|
—
|
%
|
|
||
Total gross profit
|
|
$
|
215,205
|
|
|
$
|
(22,357
|
)
|
|
(9.4
|
)%
|
|
Sources of cost of sales
|
|
Thirteen
Weeks Ended March 26, 2017 |
|
Change from
Thirteen Weeks Ended March 27, 2016 |
|
|||||||
Amount
|
|
Percent
|
|
|||||||||
|
|
(In thousands, except percent data)
|
|
|||||||||
United States
|
|
$
|
1,548,099
|
|
|
$
|
94,144
|
|
|
6.5
|
%
|
(a)
|
Mexico
|
|
257,212
|
|
|
(14,232
|
)
|
|
(5.2
|
)%
|
(b)
|
||
Elimination
|
|
(24
|
)
|
|
—
|
|
|
—
|
%
|
|
||
Total cost of sales
|
|
$
|
1,805,287
|
|
|
$
|
79,912
|
|
|
4.6
|
%
|
|
(a)
|
Cost of sales incurred by our U.S. operations during the
thirteen weeks
ended
March 26, 2017
increased
$94.1 million
, or
6.5%
, from cost of sales incurred by our U.S. operations during the
thirteen weeks
ended
March 27, 2016
. Cost of sales increased primarily because of costs incurred by the acquired GNP operations. Cost of sales incurred by the acquired GNP operations contributed $84.2 million, or 5.8 percentage points, to the increase in U.S. cost of sales. Increased cost of sales incurred by our existing operations contributed $9.9 million, or 0.7 percentage points, to the increase in U.S. cost of sales. Other factors affecting cost of sales were individually immaterial.
|
(b)
|
Cost of sales incurred by our Mexico operations during the
thirteen weeks
ended
March 26, 2017
decreased
$14.2 million
, or
5.2%
, from cost of sales incurred by our Mexico operations during the
thirteen weeks
ended
March 27, 2016
. Mexico c
ost of sales decreased primarily because of the
$34.4 million impact of foreign currency translation. The decrease was partially offset by a $4.2 million increase in the cost of contract labor and outsourcing services, a $3.1 million increase in the cost of natural gas utilities and a $3.0 million increase in the cost of contracted grower services. Other factors affecting cost of sales were individually immaterial.
|
Components of operating income
|
|
Thirteen
Weeks Ended March 26, 2017 |
|
Change from
Thirteen Weeks Ended March 27, 2016 |
|
Percent of Net Sales
|
|
|||||||||||
Thirteen Weeks Ended
|
|
|||||||||||||||||
Amount
|
|
Percent
|
|
March 26, 2017
|
|
March 27, 2016
|
|
|||||||||||
|
|
(In thousands, except percent data)
|
|
|||||||||||||||
Gross profit
|
|
$
|
215,205
|
|
|
$
|
(22,357
|
)
|
|
(9.4
|
)%
|
|
10.7
|
%
|
|
12.1
|
%
|
|
SG&A expense
|
|
62,853
|
|
|
14,065
|
|
|
28.8
|
%
|
|
3.1
|
%
|
|
2.5
|
%
|
(a)(b)
|
||
Operating income
|
|
$
|
152,352
|
|
|
$
|
(36,422
|
)
|
|
(19.3
|
)%
|
|
7.5
|
%
|
|
9.6
|
%
|
|
Sources of operating income
|
|
Thirteen
Weeks Ended March 26, 2017 |
|
Change from
Thirteen Weeks Ended March 27, 2016 |
|
|||||||
Amount
|
|
Percent
|
|
|||||||||
|
|
(In thousands, except percent data)
|
|
|||||||||
United States
|
|
$
|
133,556
|
|
|
$
|
(41,034
|
)
|
|
(23.5
|
)%
|
|
Mexico
|
|
18,772
|
|
|
4,612
|
|
|
32.6
|
%
|
|
||
Elimination
|
|
24
|
|
|
—
|
|
|
—
|
%
|
|
||
Total operating income
|
|
$
|
152,352
|
|
|
$
|
(36,422
|
)
|
|
(19.3
|
)%
|
|
|
|
|
|
|
|
|
|
|||||
Sources of SG&A expense
|
|
Thirteen
Weeks Ended March 26, 2017 |
|
Change from
Thirteen Weeks Ended March 27, 2016 |
|
|||||||
Amount
|
|
Percent
|
|
|||||||||
|
|
(In thousands, except percent data)
|
|
|||||||||
United States
|
|
$
|
54,750
|
|
|
$
|
13,014
|
|
|
31.2
|
%
|
(a)
|
Mexico
|
|
8,103
|
|
|
1,051
|
|
|
14.9
|
%
|
(b)
|
||
Total SG&A expense
|
|
$
|
62,853
|
|
|
$
|
14,065
|
|
|
28.8
|
%
|
|
(a)
|
SG&A expense incurred by our U.S. operations during the thirteen weeks ended
March 26, 2017
increased
$13.0 million
, or
31.2%
, from SG&A expense incurred by our U.S. operations during the thirteen weeks ended
March 27, 2016
, primarily because of expenses incurred by the acquired GNP operations and an increase in SG&A expense incurred by our existing operations. Expenses incurred by the acquired GNP business contributed $8.9, or 21.4 percentage points, to the overall increase in SG&A expenses. An increase in expenses incurred by our existing operations contributed $4.1 million, or 9.8 percentage points, to the overall increase in SG&A expenses. SG&A expense incurred by our existing operations increased primarily because of a $3.1 million increase in allocated costs charged for administrative functions shared with JBS USA Food Company, a $3.0 million increase in outside services expenses, a $1.1 million increase in legal services expenses and a $1.1 million increase in advertising and promotion expenses partially offset by a $3.9 million decrease in wages and benefits and a $1.4 million decrease in brokerage expenses. Other factors affecting SG&A expense were individually immaterial.
|
(b)
|
SG&A expense incurred by our Mexico operations during the thirteen weeks ended
March 26, 2017
increased
$1.1 million
, or
14.9%
, from SG&A expense incurred by our Mexico operations during the thirteen weeks ended
March 27, 2016
primarily because of a $1.1 million increase in contract labor expenses and a $1.0 million increase in losses recognized on asset disposals. Other factors affecting SG&A expense were individually immaterial.
|
Source of Liquidity
|
|
Facility
Amount
|
|
Amount
Outstanding
|
|
Amount
Available
|
|
||||||
|
|
(In millions)
|
|
||||||||||
Cash and cash equivalents
|
|
|
|
|
|
$
|
30.8
|
|
|
||||
Borrowing arrangements:
|
|
|
|
|
|
|
|
||||||
U.S. Credit Facility
|
|
$
|
700.0
|
|
|
$
|
314.6
|
|
|
340.6
|
|
(a)
|
|
Mexico Credit Facility
(c)
|
|
79.9
|
|
|
42.9
|
|
|
37.0
|
|
(b)
|
(a)
|
Actual borrowings under the revolving loan commitment of our U.S. Credit Facility are subject to a borrowing base, which is a formula based on certain eligible inventory and eligible receivables. The borrowing base in effect at
March 26, 2017
was $700.0 million. Availability under the U.S. Credit Facility is also reduced by our outstanding standby letters of credit. Standby letters of credit outstanding at
March 26, 2017
totaled $44.8 million.
|
(b)
|
As of
March 26, 2017
, the U.S. dollar-equivalent of the amount available under the Mexico Credit Facility (as described below) was $37.0 million. The Mexico Credit Facility provides for a loan commitment of $1.5 billion Mexican pesos.
|
Contractual Obligations
(a)
|
|
Total
|
|
Less than
One Year
|
|
One to
Three Years
|
|
Three to
Five Years
|
|
Greater than
Five Years
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Long-term debt
(b)
|
|
$
|
1,357,508
|
|
|
$
|
—
|
|
|
$
|
42,949
|
|
|
$
|
814,559
|
|
|
$
|
500,000
|
|
Interest
(c)
|
|
290,474
|
|
|
30,310
|
|
|
97,302
|
|
|
62,237
|
|
|
100,625
|
|
|||||
Capital leases
|
|
352
|
|
|
71
|
|
|
194
|
|
|
87
|
|
|
—
|
|
|||||
Operating leases
|
|
127,295
|
|
|
30,755
|
|
|
51,599
|
|
|
30,170
|
|
|
14,771
|
|
|||||
Derivative liabilities
|
|
4,840
|
|
|
4,840
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase obligations
(d)
|
|
199,107
|
|
|
192,424
|
|
|
6,683
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
1,979,576
|
|
|
$
|
258,400
|
|
|
$
|
198,727
|
|
|
$
|
907,053
|
|
|
$
|
615,396
|
|
(a)
|
The total amount of unrecognized tax benefits at
March 26, 2017
was $16.9 million. We did not include this amount in the contractual obligations table above as reasonable estimates cannot be made at this time of the amounts or timing of future cash outflows.
|
(b)
|
Long-term debt is presented at face value and excludes
$44.8 million
in letters of credit outstanding related to normal business transactions.
|
(c)
|
Interest expense in the table above assumes the continuation of interest rates and outstanding borrowings as of
March 26, 2017
.
|
(d)
|
Includes agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
|
•
|
Matters affecting the chicken industry generally, including fluctuations in the commodity prices of feed ingredients and chicken;
|
•
|
Our ability to obtain and maintain commercially reasonable terms with vendors and service providers;
|
•
|
Our ability to maintain contracts that are critical to our operations;
|
•
|
Our ability to retain management and other key individuals;
|
•
|
Outbreaks of avian influenza or other diseases, either in our own flocks or elsewhere, affecting our ability to conduct our operations and/or demand for our poultry products;
|
•
|
Contamination of our products, which has previously and can in the future lead to product liability claims and product recalls;
|
•
|
Exposure to risks related to product liability, product recalls, property damage and injuries to persons, for which insurance coverage is expensive, limited and potentially inadequate;
|
•
|
Changes in laws or regulations affecting our operations or the application thereof;
|
•
|
New immigration legislation or increased enforcement efforts in connection with existing immigration legislation that cause our costs of business to increase, cause us to change the way in which we do business or otherwise disrupt our operations;
|
•
|
Competitive factors and pricing pressures or the loss of one or more of our largest customers;
|
•
|
Inability to consummate, or effectively integrate, any acquisition, including the acquisition of GNP, or to realize the associated anticipated cost savings and operating synergies;
|
•
|
Currency exchange rate fluctuations, trade barriers, exchange controls, expropriation and other risks associated with foreign operations;
|
•
|
Disruptions in international markets and distribution channels;
|
•
|
Our ability to maintain favorable labor relations with our employees and our compliance with labor laws;
|
•
|
Extreme weather or natural disasters;
|
•
|
The impact of uncertainties in litigation; and
|
•
|
Other risks described herein and under “Risk Factors” in our annual report on Form 10-K for the year ended December 25, 2016 as filed with the SEC.
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Issuer Purchases of Equity Securities
|
||||||||||||||
Period
|
|
Total Number of Shares Purchased
|
|
Average Price
Paid per Share |
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of the Shares That May Yet Be Purchased Under the Plans or Programs
|
||||||
December 26, 2016 through January 22, 2017
|
|
388,397
|
|
|
$
|
18.79
|
|
|
388,397
|
|
|
$
|
80,254,218
|
|
January 23, 2017 through February 26, 2017
|
|
391,115
|
|
|
18.77
|
|
|
391,115
|
|
|
72,913,018
|
|
||
February 27, 2017 through March 26, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,913,018
|
|
||
Total
|
|
779,512
|
|
|
$
|
18.78
|
|
|
779,512
|
|
|
$
|
72,913,018
|
|
*
|
|
Filed herewith.
|
**
|
|
Furnished herewith.
|
|
|
PILGRIM’S PRIDE CORPORATION
|
|
|
|
Date: May 3, 2017
|
|
/s/ Fabio Sandri
|
|
|
Fabio Sandri
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer, Chief Accounting Officer and Duly Authorized Officer)
|
*
|
|
Filed herewith.
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**
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Furnished herewith.
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BORROWERS:
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PILGRIM'S PRIDE CORPORATION
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By:
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/s/ Fabio Sandri
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Name: Fabio Sandri
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Title: Chief Financial Officer
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TO-RICOS, LTD.
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By:
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/s/ Fabio Sandri
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Name: Fabio Sandri
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Title: Chief Financial Officer
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TO-RICOS DISTRIBUTION, LTD.
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By:
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/s/ Fabio Sandri
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Name: Fabio Sandri
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Title: Chief Financial Officer
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OTHER LOAN PARTIES:
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PILGRIM'S PRIDE CORPORATION OF WEST
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VIRGINIA, INC.
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By:
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/s/ Fabio Sandri
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Name: Fabio Sandri
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Title: Chief Financial Officer
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JFC LLC
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By:
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/s/ Fabio Sandri
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Name: Fabio Sandri
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Title: Chief Financial Officer
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GOLD'N PLUMP POULTRY, LLC
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By:
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/s/ Fabio Sandri
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Name: Fabio Sandri
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Title: Chief Financial Officer
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GOLD'N PLUMP FARMS, LLC
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By:
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/s/ Fabio Sandri
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Name: Fabio Sandri
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Title: Chief Financial Officer
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ADMINISTRATIVE AGENT
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COÖPERATIEVE RABOBANK U.A., NEW YORK
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AND LENDERS:
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BRANCH,
as Administrative Agent and a Lender
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By:
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/s/ Eric J Rogowski
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Name: Eric J Rogowki
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Title: Executive Director
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By:
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/s/ Naoko Kojima
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Name: Naoko Kojima
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Title: Executive Director
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AMERICAN AGCREDIT, PCA,
as a Lender
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By:
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/s/ Bradley K. Leafgren
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Name: Bradley K. Leafgren
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Title: Vice President
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BANK OF MONTREAL,
as a Lender
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By:
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/s/ Joan Murphy
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Name: Joan Murphy
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Title: Director
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ING CAPITAL LLC,
as a Lender
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By:
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/s/ Bill Redmond
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Name: Bill Redmond
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Title: Managing Director
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By:
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/s/ Ben Whitehurst
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Name: Ben Whitehurst
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Title: Vice President
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WELLS FARGO BANK, N.A.,
as a Lender
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By:
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/s/ Matthew E Eyrich
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Name: Matthew E. Eyrich
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Title: Senior Vice President
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BANK OF AMERICA, N.A.,
as a Lender
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By:
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/s/ Kory Clark
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Name: Kory Clark
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Title: Senior Vice President
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SOCIÉTÉ GÉNÉRALE,
as a Lender
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By:
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/s/ Cliff Niebling
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Name: Cliff Niebling
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Title: Managing Director
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ROYAL BANK OF CANADA,
as a Lender
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By:
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/s/ Anthony Pistilli
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Name: Anthony Pistilli
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Title: Authorized Signatory
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CITIBANK, N.A.,
as a Lender
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By:
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/s/ Siddarth Bansal
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Name: Siddarth Bansal
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Title: Director
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U.S. BANK NATIONAL ASSOCIATION,
as a
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Lender
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By:
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/s/ Brigitte M Sinclair
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Name: Brigitte M Sinclair
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Title: Vice President
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BARCLAYS BANK PLC,
as a Lender
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By:
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/s/ Marguerite Sutton
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Name: Marguerite Sutton
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Title: Vice President
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DEUTSCHE BANK AG, NEW YORK
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BRANCH
, as a Lender
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By:
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/s/ Peter Cucchiara
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Name: Peter Cucchiara
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Title: Vice President
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By:
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/s/ Marcus Tarkington
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Name: Marcus Tarkington
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Title: Director
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MORGAN STANLEY SENIOR FUNDING,
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INC.
, as a Lender
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By:
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/s/ Dmitriy Barskiy
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Name: Dmitriy Barskiy
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Title: Vice President
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[INTENTIONALLY OMITTED]
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By:
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Name:
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Title:
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FIFTH THIRD BANK
, as a Lender
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By:
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/s/ Greg Cannon
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Name: Greg Cannon
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Title: Managing Director
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BRANCH BANKING AND TRUST COMPANY
,
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as a Lender
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By:
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/s/ Erron Powers
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Name: Erron Powers
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Title: Senior Vice President
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COBANK, FCB
, as a Lender
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By:
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/s/ Christopher J. Allsteadt
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Name: Christopher J. Allsteadt
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Title: Vice President
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1
ST
FARM CREDIT SERVICES, FLCA
, as a
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Voting Participant
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By:
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/s/ Corey J Waldinger
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Name: Corey J. Waldinger
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Title: Vice President, Capital Markets Group
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AGFIRST FARM CREDIT BANK
, as a Voting
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Participant
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By:
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/s/ Matt Jeffords
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Name: Matt Jeffords
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Title: Vice President
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AGSTAR FINANCIAL SERVICES, FLCA
, as a
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Voting Participant
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By:
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/s/ Graham J. Dee
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Name: Graham J. Dee
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Title: VP Capital Markets
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BADGERLAND FINANCIAL, FLCA
, as a
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Voting Participant
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By:
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/s/ Terry A. McMahon
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Name: Terry A. McMahon
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Title: Chief Credit Officer
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FARM CREDIT BANK OF TEXAS
, as a Voting
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Participant
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By:
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/s/ Alan Robinson
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Name: Alan Robinson
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Title: Vice President
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FARM CREDIT EAST, ACA
, as a Voting
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Participant
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By:
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/s/ Kerri B. Sears
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Name: Kerri B. Sears
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Title: Vice President
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FARM CREDIT MID-AMERICA, FLCA
, as a
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Voting Participant
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By:
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/s/ Aaron T. Miller
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Name: Aaron T. Miller
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Title: Credit Officer
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FARM CREDIT WEST, FLCA
, as a Voting
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Participant
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By:
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/s/ Barbara J. Bartlett
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Name: Barbara J. Bartlett
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Title: Assistant Vice President
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UNITED FCS, FLCA D/B/A FCS
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COMMERCIAL FINANCE GROUP
, as a Voting
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Participant
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By:
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/s/ Daniel J. Best
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Name: Daniel J. Best
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Title: Vice President
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FARM CREDIT SERVICES OF AMERICA,
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FLCA
, as a Voting Participant
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By:
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/s/ Bruce Dean
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Name: Bruce Dean
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Title: Vice President
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GREENSTONE FARM CREDIT SERVICES,
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FLCA
, as a Voting Participant
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By:
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/s/ Jeff Pavlik
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Name: Jeff Pavlik
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Title: SVP/Managing Director
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NORTHWEST FARM CREDIT SERVICES,
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FLCA
, as a Voting Participant
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By:
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/s/ Paul Hadley
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Name: Paul Hadley
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Title: Vice President
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YOSEMITE LAND BANK, FLCA
, as a Voting
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Participant
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By:
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/s/ Leslie C. Crutcher
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Name: Leslie C. Crutcher
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Title: Executive Vice President, CCO
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Thirteen Weeks Ended
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||||||
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March 26, 2017
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March 27, 2016
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||||
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(In thousands)
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||||||
Earnings:
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Income before income taxes
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$
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142,364
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$
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180,615
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Add: Total fixed charges (see below)
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17,122
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14,934
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Less: Interest capitalized
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1,824
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308
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Total earnings
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$
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157,662
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$
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195,241
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Fixed charges:
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Interest
(a)
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$
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14,209
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$
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12,341
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Portion of noncancelable lease expense representative of interest factor
(b)
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2,913
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2,593
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Total fixed charges
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$
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17,122
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$
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14,934
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Ratio of earnings to fixed charges
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9.21
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13.07
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1.
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I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended
March 26, 2017
, of Pilgrim's Pride Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: May 3, 2017
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/s/ William W. Lovette
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William W. Lovette
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Principal Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended
March 26, 2017
, of Pilgrim's Pride Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: May 3, 2017
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/s/ Fabio Sandri
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Fabio Sandri
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Chief Financial Officer
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Date: May 3, 2017
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/s/ William W. Lovette
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William W. Lovette
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Principal Executive Officer
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Date: May 3, 2017
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/s/ Fabio Sandri
|
|
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Fabio Sandri
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|
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Chief Financial Officer
|