FORM
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10-K
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☒
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ANNUAL 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)
|
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(I.R.S. Employer Identification No.)
|
|
|
|
|
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1770 Promontory Circle
|
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80634-9038
|
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Greeley
|
CO
|
|
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(Address of principal executive offices)
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(Zip code)
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Title of each class
|
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Trading Symbol
|
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Name of each exchange on which registered
|
Common Stock, par value $0.01 per share
|
|
PPC
|
|
The Nasdaq Stock Market LLC
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Large Accelerated Filer
|
x
|
|
Accelerated Filer
|
|
o
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Non-accelerated Filer
|
o
|
|
Smaller reporting company
|
|
☐
|
|
|
|
Emerging growth company
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|
☐
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PART I
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Page
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Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
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PART II
|
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Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
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||
Item 9B.
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||
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PART III
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Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
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||
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PART IV
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Item 15.
|
||
Item 16.
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||
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2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
U.S. chicken:
|
|
|
|
|
|
||||||
Fresh
|
$
|
6,214,954
|
|
|
$
|
5,959,458
|
|
|
$
|
5,700,503
|
|
Prepared
|
842,365
|
|
|
773,983
|
|
|
950,378
|
|
|||
Export
|
282,791
|
|
|
258,732
|
|
|
213,595
|
|
|||
Total U.S. chicken
|
7,340,110
|
|
|
6,992,173
|
|
|
6,864,476
|
|
|||
U.K. and Europe chicken:
|
|
|
|
|
|
||||||
Fresh
|
918,852
|
|
|
925,124
|
|
|
846,575
|
|
|||
Prepared
|
817,292
|
|
|
865,864
|
|
|
792,284
|
|
|||
Export
|
262,041
|
|
|
303,921
|
|
|
318,699
|
|
|||
Total U.K. and Europe chicken
|
1,998,185
|
|
|
2,094,909
|
|
|
1,957,558
|
|
|||
Mexico chicken:
|
|
|
|
|
|
||||||
Fresh
|
1,245,976
|
|
|
1,252,403
|
|
|
1,245,144
|
|
|||
Prepared
|
95,733
|
|
|
76,860
|
|
|
58,512
|
|
|||
Total Mexico chicken
|
1,341,709
|
|
|
1,329,263
|
|
|
1,303,656
|
|
|||
Total chicken
|
10,680,004
|
|
|
10,416,345
|
|
|
10,125,690
|
|
|||
U.K. and Europe pork:
|
|
|
|
|
|
||||||
Fresh
|
135,985
|
|
|
—
|
|
|
—
|
|
|||
Prepared
|
134,426
|
|
|
—
|
|
|
—
|
|
|||
Export
|
16,174
|
|
|
—
|
|
|
—
|
|
|||
Total U.K. and Europe pork
|
286,585
|
|
|
—
|
|
|
—
|
|
|||
Other products:
|
|
|
|
|
|
||||||
U.S.
|
296,606
|
|
|
433,488
|
|
|
578,746
|
|
|||
U.K. and Europe
|
99,023
|
|
|
53,757
|
|
|
38,761
|
|
|||
Mexico
|
47,001
|
|
|
34,194
|
|
|
24,666
|
|
|||
Total other products
|
442,630
|
|
|
521,439
|
|
|
642,173
|
|
|||
Total net sales
|
$
|
11,409,219
|
|
|
$
|
10,937,784
|
|
|
$
|
10,767,863
|
|
Name
|
Age
|
Background and Experience
|
Dates
|
Jayson J. Penn
|
51
|
President and Chief Executive Officer
|
March 2019 to Present
|
Executive Vice President
|
January 2012 to March 2019
|
||
Senior Vice President of Commercial Business
|
March 2011 to January 2012
|
||
Fabio Sandri
|
48
|
Chief Financial Officer
|
June 2011 to Present
|
|
|
Number of Facilities(a)
|
|
|
|
|
|
||||||||
|
|
Owned
|
|
Leased
|
|
Total
|
|
Capacity(b)
|
|
Unit of Measure
|
Average Capacity Utilization
|
||||
Chicken Operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fresh processing facilities
|
|
35
|
|
|
1
|
|
|
36
|
|
|
8.7 million
|
|
Birds per day
|
84.4
|
%
|
Prepared foods facilities
|
|
14
|
|
|
2
|
|
|
16
|
|
|
511,703
|
|
Tons per year
|
71.8
|
%
|
Hatcheries
|
|
47
|
|
|
2
|
|
|
49
|
|
|
3.3 billion
|
|
Eggs per year
|
64.0
|
%
|
Other operation facilities(c)
|
|
49
|
|
|
3
|
|
|
52
|
|
|
17.3 million
|
|
Tons per year
|
65.7
|
%
|
Grain elevator
|
|
1
|
|
|
—
|
|
|
1
|
|
|
8.6 million
|
|
Bushels per year
|
30.3
|
%
|
Pork Operations:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fresh processing facilities
|
|
3
|
|
|
—
|
|
|
3
|
|
|
9,800
|
|
Pigs per day
|
83.8
|
%
|
Prepared foods facilities
|
|
11
|
|
|
—
|
|
|
11
|
|
|
73,539
|
|
Tons per year
|
75.1
|
%
|
Distribution centers and other facilities
|
|
11
|
|
|
18
|
|
|
29
|
|
|
N/A
|
|
|
N/A
|
|
(a)
|
Substantially all of our U.S. property, plant and equipment is used as collateral for our secured U.S. credit facility. See Part II, Item 8, Notes to Consolidated Financial Statements, “Note 12. Long-Term Debt and other Borrowing Arrangements.”
|
(b)
|
Capacity and utilization numbers do not include idled facilities.
|
(c)
|
Other operation facilities includes feed mills, protein conversion and rendering facilities, pet food facilities, and one freezer in the U.S.
|
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 (a)
|
||||||
September 30, 2019 through October 27, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
196,865,927
|
|
October 28, 2019 through December 1, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196,865,927
|
|
||
December 2, 2019 through December 29, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196,865,927
|
|
||
Total
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
196,865,927
|
|
(a)
|
Reflects the remaining dollar value of shares that may yet be repurchased under our share repurchase authorization, the parameters of which are described above. The plan was announced on October 31, 2018.
|
|
12/28/14
|
|
06/30/15
|
|
12/27/15
|
|
06/30/16
|
|
12/25/16
|
|
06/30/17
|
|
12/31/17
|
|
06/30/18
|
|
12/30/18
|
|
06/30/19
|
|
12/29/19
|
||||||||||||||||||||||
PPC
|
$
|
100.00
|
|
|
$
|
81.29
|
|
|
$
|
79.59
|
|
|
$
|
100.19
|
|
|
$
|
74.79
|
|
|
$
|
86.19
|
|
|
$
|
122.13
|
|
|
$
|
79.15
|
|
|
$
|
61.30
|
|
|
$
|
99.83
|
|
|
$
|
129.64
|
|
Russell 2000
|
100.00
|
|
|
104.75
|
|
|
95.59
|
|
|
97.70
|
|
|
115.95
|
|
|
121.74
|
|
|
132.94
|
|
|
143.12
|
|
|
118.30
|
|
|
138.39
|
|
|
148.49
|
|
|||||||||||
Peer Group
|
100.00
|
|
|
105.68
|
|
|
141.65
|
|
|
150.43
|
|
|
144.99
|
|
|
145.79
|
|
|
173.90
|
|
|
160.56
|
|
|
153.47
|
|
|
186.68
|
|
|
213.77
|
|
(In thousands, except ratios and per share data)
|
2019(f)
|
|
2018(f)
|
|
2017(f)
|
|
2016
|
|
2015
|
||||||||||
Operating Results Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
11,409,219
|
|
|
$
|
10,937,784
|
|
|
$
|
10,767,863
|
|
|
$
|
9,878,564
|
|
|
$
|
8,752,672
|
|
Gross profit(a)
|
1,070,394
|
|
|
843,476
|
|
|
1,471,614
|
|
|
1,103,983
|
|
|
1,298,724
|
|
|||||
Operating income(a)
|
690,568
|
|
|
495,686
|
|
|
1,072,322
|
|
|
792,082
|
|
|
1,061,132
|
|
|||||
Interest expense, net(b)
|
118,353
|
|
|
149,001
|
|
|
99,453
|
|
|
73,335
|
|
|
42,721
|
|
|||||
Gain on bargain purchase
|
(56,880
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss on early extinguishment of debt
|
—
|
|
|
16,758
|
|
|
166
|
|
|
—
|
|
|
1,470
|
|
|||||
Income before income taxes(a)
|
617,545
|
|
|
332,227
|
|
|
982,066
|
|
|
724,036
|
|
|
1,001,324
|
|
|||||
Income tax expense(c)
|
161,009
|
|
|
85,423
|
|
|
263,899
|
|
|
243,919
|
|
|
338,352
|
|
|||||
Net income(a)
|
456,536
|
|
|
246,804
|
|
|
718,167
|
|
|
480,117
|
|
|
662,972
|
|
|||||
Net income (loss) attributable to noncontrolling interest
|
612
|
|
|
(1,141
|
)
|
|
102
|
|
|
(803
|
)
|
|
48
|
|
|||||
Net income attributable to Pilgrim’s Pride Corporation(a)
|
455,924
|
|
|
247,945
|
|
|
694,579
|
|
|
440,532
|
|
|
645,914
|
|
|||||
Per Common Diluted Share Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Pilgrim’s Pride Corporation
|
$
|
1.83
|
|
|
$
|
1.00
|
|
|
$
|
2.79
|
|
|
$
|
1.73
|
|
|
$
|
2.50
|
|
Adjusted net income attributable to Pilgrim’s Pride Corporation(d)
|
1.85
|
|
|
1.28
|
|
|
2.89
|
|
|
1.75
|
|
|
2.60
|
|
|||||
Book value
|
10.11
|
|
|
8.06
|
|
|
7.45
|
|
|
8.21
|
|
|
10.28
|
|
|||||
Balance Sheet Summary:
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
|
$
|
950,081
|
|
|
$
|
938,434
|
|
|
$
|
1,063,765
|
|
|
$
|
624,728
|
|
|
$
|
1,090,129
|
|
Total assets
|
7,102,364
|
|
|
5,931,202
|
|
|
6,248,652
|
|
|
5,021,942
|
|
|
5,668,292
|
|
|||||
Notes payable and current maturities of long-term debt
|
26,392
|
|
|
30,405
|
|
|
47,775
|
|
|
15,712
|
|
|
28,108
|
|
|||||
Long-term debt, less current maturities
|
2,276,029
|
|
|
2,295,190
|
|
|
2,635,617
|
|
|
1,396,124
|
|
|
1,436,852
|
|
|||||
Total stockholders’ equity
|
2,536,060
|
|
|
2,019,585
|
|
|
1,855,661
|
|
|
2,086,132
|
|
|
2,659,875
|
|
|||||
Cash Flow Summary:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from operating activities
|
$
|
666,521
|
|
|
$
|
491,650
|
|
|
$
|
801,321
|
|
|
$
|
795,362
|
|
|
$
|
1,020,380
|
|
Depreciation and amortization
|
287,230
|
|
|
274,088
|
|
|
271,824
|
|
|
226,384
|
|
|
169,734
|
|
|||||
Impairment of property, plant and equipment
|
—
|
|
|
3,504
|
|
|
5,156
|
|
|
790
|
|
|
4,813
|
|
|||||
Acquisitions of property, plant and equipment
|
(348,120
|
)
|
|
(348,666
|
)
|
|
(339,872
|
)
|
|
(340,960
|
)
|
|
(190,262
|
)
|
|||||
Purchase of acquired business, net of cash acquired
|
(384,694
|
)
|
|
—
|
|
|
(658,520
|
)
|
|
—
|
|
|
(373,532
|
)
|
|||||
Payment of cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(714,785
|
)
|
|
(1,498,470
|
)
|
|||||
Cash flows from financing activities
|
(34,526
|
)
|
|
(384,246
|
)
|
|
466,395
|
|
|
(828,219
|
)
|
|
(585,005
|
)
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
EBITDA(e)
|
$
|
1,023,128
|
|
|
$
|
755,316
|
|
|
$
|
1,353,343
|
|
|
$
|
1,023,755
|
|
|
$
|
1,213,779
|
|
Adjusted EBITDA(e)
|
973,771
|
|
|
798,187
|
|
|
1,388,029
|
|
|
1,029,682
|
|
|
1,245,633
|
|
|||||
Key Indicators (as a percent of net sales):
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit(a)
|
9.4
|
%
|
|
7.7
|
%
|
|
13.7
|
%
|
|
11.2
|
%
|
|
14.8
|
%
|
|||||
Selling, general and administrative expenses
|
3.3
|
%
|
|
3.1
|
%
|
|
3.6
|
%
|
|
3.1
|
%
|
|
2.6
|
%
|
|||||
Operating income(a)
|
6.1
|
%
|
|
4.5
|
%
|
|
10.0
|
%
|
|
8.0
|
%
|
|
12.1
|
%
|
|||||
Interest expense, net
|
1.0
|
%
|
|
1.4
|
%
|
|
0.9
|
%
|
|
0.7
|
%
|
|
0.5
|
%
|
|||||
Net income(a)
|
4.0
|
%
|
|
2.3
|
%
|
|
6.5
|
%
|
|
4.5
|
%
|
|
7.4
|
%
|
(a)
|
Operating income and net income include the following restructuring charges for each of the years presented:
|
(b)
|
Interest expense, net, consists of interest expense less interest income.
|
(c)
|
Income tax expense in 2019, 2018, 2017, 2016 and 2015 resulted primarily from expense recorded on our year-to-date income.
|
(d)
|
Adjusted net income attributable to Pilgrim’s Pride Corporation per common diluted share is presented because it is used by us, and we believe it is frequently used by securities analysts, investors and other interested parties, in addition to and not in lieu of results prepared in conformity with U.S. GAAP, to compare the performance of companies. We also believe that this non-U.S. GAAP financial measure, in combination with the our financial results calculated in accordance with U.S. GAAP, provides investors with additional perspective regarding the impact of such charges on net income attributable to Pilgrim’s Pride Corporation per common diluted share. Adjusted net income attributable to Pilgrim’s Pride Corporation per common diluted share is not a measurement of financial performance under U.S. GAAP, has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under U.S. GAAP. It does not reflect the impact of earnings or charges resulting from matters we consider to not be indicative of our ongoing operations.
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In thousands except per share data)
|
||||||||||||||||||
Net income attributable to Pilgrim’s Pride Corporation
|
$
|
455,924
|
|
|
$
|
247,945
|
|
|
$
|
694,579
|
|
|
$
|
440,532
|
|
|
$
|
645,914
|
|
Adjustments, net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss on early extinguishment of debt
|
—
|
|
|
12,449
|
|
|
122
|
|
|
—
|
|
|
957
|
|
|||||
Restructuring activities and transaction costs related to acquisitions
|
900
|
|
|
3,778
|
|
|
21,478
|
|
|
699
|
|
|
3,746
|
|
|||||
Other nonrecurring losses
|
—
|
|
|
14,475
|
|
|
5,896
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency transaction losses (gains)
|
5,112
|
|
|
12,748
|
|
|
(1,944
|
)
|
|
2,652
|
|
|
17,022
|
|
|||||
Gain on bargain purchase
|
(56,880
|
)
|
|
|
|
|
|
|
|
|
|||||||||
|
405,056
|
|
|
291,395
|
|
|
720,131
|
|
|
443,883
|
|
|
667,639
|
|
|||||
U.S. Tax Cuts & Jobs Act transition tax
|
—
|
|
|
26,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Adjusted net income attributable to Pilgrim’s Pride Corporation
|
405,056
|
|
|
317,795
|
|
|
720,131
|
|
|
443,883
|
|
|
667,639
|
|
|||||
Weighted average diluted shares of common stock outstanding
|
249,709
|
|
|
249,149
|
|
|
248,971
|
|
|
254,126
|
|
|
258,676
|
|
|||||
Adjusted net income attributable to Pilgrim’s Pride Corporation
per common diluted share
|
$
|
1.62
|
|
|
$
|
1.28
|
|
|
$
|
2.89
|
|
|
$
|
1.75
|
|
|
$
|
2.58
|
|
(e)
|
Refer below for the calculation of earnings before interest, tax, depreciation and amortization (“EBITDA”) and Adjusted EBITDA
|
(f)
|
Includes the material impact of new business acquisitions as follows:
|
•
|
Fiscal 2019 includes approximately two and one-half months of operating results from the acquisition of Tulip, acquired for cash of $391.5 million on October 15, 2019.
|
•
|
Fiscal 2017 includes approximately three and one-half months of operating results from the acquisition of Moy Park, acquired for cash of $303.3 million and a note payable to the seller in the amount of £562.5 million on September 8, 2017. Fiscal 2018 and thereafter includes a full year of operating results.
|
•
|
Fiscal 2017 includes approximately eleven and one-half months of operating results from the acquisition of GNP, acquired for a cash purchase price of $350 million on January 6, 2017. Fiscal 2018 and thereafter includes a full year of operating results.
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Net income
|
$
|
456,536
|
|
|
$
|
246,804
|
|
|
$
|
718,167
|
|
|
$
|
480,117
|
|
|
$
|
662,972
|
|
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net(a)
|
118,353
|
|
|
149,001
|
|
|
99,453
|
|
|
73,335
|
|
|
42,721
|
|
|||||
Income tax expense
|
161,009
|
|
|
85,423
|
|
|
263,899
|
|
|
243,919
|
|
|
338,352
|
|
|||||
Depreciation and amortization
|
287,230
|
|
|
274,088
|
|
|
271,824
|
|
|
226,384
|
|
|
169,734
|
|
|||||
EBITDA(e)(f)
|
1,023,128
|
|
|
755,316
|
|
|
1,353,343
|
|
|
1,023,755
|
|
|
1,213,779
|
|
|||||
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency transaction loss (gain)(b)
|
6,917
|
|
|
17,160
|
|
|
(2,659
|
)
|
|
4,055
|
|
|
26,148
|
|
|||||
Restructuring activities loss (gain)(c)
|
(84
|
)
|
|
4,765
|
|
|
9,775
|
|
|
1,069
|
|
|
5,754
|
|
|||||
Transaction costs related to acquisitions
|
1,302
|
|
|
320
|
|
|
19,606
|
|
|
—
|
|
|
—
|
|
|||||
Other nonrecurring losses(d)
|
—
|
|
|
19,485
|
|
|
8,066
|
|
|
—
|
|
|
—
|
|
|||||
Minus:
|
|
|
|
|
|
|
|
|
|
||||||||||
Gain on bargain purchase
|
(56,880
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) attributable to noncontrolling interest
|
612
|
|
|
(1,141
|
)
|
|
102
|
|
|
(803
|
)
|
|
48
|
|
|||||
Adjusted EBITDA(e)(f)
|
$
|
973,771
|
|
|
$
|
798,187
|
|
|
$
|
1,388,029
|
|
|
$
|
1,029,682
|
|
|
$
|
1,245,633
|
|
(a)
|
Interest expense, net, consists of interest expense less interest income.
|
(b)
|
The Company measures the financial statements of its Mexico subsidiaries as if the U.S. dollar were the functional currency. Accordingly, we remeasure assets and liabilities, other than nonmonetary assets, of the Mexico subsidiaries at current exchange rates. We remeasure nonmonetary assets using the historical exchange rate in effect on the date of each asset’s acquisition. Currency exchange gains or losses resulting from these remeasurements are included in the line item Foreign currency transaction losses (gains) in the Consolidated and Combined Statements of Income.
|
(c)
|
Restructuring charges includes tangible asset impairment, severance and change-in-control compensation costs, and losses incurred on both the sale of unneeded broiler eggs and flock depletion.
|
(d)
|
Other nonrecurring losses include expenses incurred for Hurricane Maria in Puerto Rico, Hurricane Michael in Florida and certain Moy Park severance charges.
|
(e)
|
“EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we believe are not indicative of our ongoing operating performance consisting of: (1) foreign currency transaction losses (gains) in the period from 2015 through 2019, (2) restructuring activities in the period from 2015 through 2019, (3) transaction costs from business acquisitions in the period from 2015 through 2019, (4) gain on bargain purchase in the period from 2015 through 2019, (5) net income (loss) attributable to noncontrolling interests in the period from 2015 through 2019 and (6) other nonrecurring losses in the period from 2015 through 2019. EBITDA is presented because it is used by us and we believe it is frequently used by securities analysts, investors and other interested parties, in addition to and not in lieu of results prepared in conformity with U.S. GAAP, to compare the performance of companies. We believe investors would be interested in our Adjusted EBITDA because this is how our management analyzes EBITDA
|
•
|
They do not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
|
•
|
They do not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
They do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;
|
•
|
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;
|
•
|
They are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;
|
•
|
EBITDA does not reflect the impact of earnings or charges attributable to noncontrolling interests;
|
•
|
They do not reflect the impact of earnings or charges resulting from matters we consider to not be indicative of our ongoing operations; and
|
•
|
They do not reflect limitations on or costs related to transferring earnings from our subsidiaries to us.
|
(f)
|
In addition, other companies in our industry may calculate these measures differently than we do, limiting their usefulness as a comparative measure. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. You should compensate for these limitations by relying primarily on our U.S. GAAP results and using EBITDA and Adjusted EBITDA only on a supplemental basis.
|
|
|
|
|
Change from 2018
|
|||||||
Sources of net sales
|
|
2019
|
|
Amount
|
|
Percent
|
|||||
|
|
(In thousands, except percent data)
|
|||||||||
U.S.
|
|
$
|
7,636,716
|
|
|
$
|
211,055
|
|
|
2.8
|
%
|
U.K. and Europe
|
|
2,383,793
|
|
|
235,127
|
|
|
10.9
|
%
|
||
Mexico
|
|
1,388,710
|
|
|
25,253
|
|
|
1.9
|
%
|
||
Total net sales
|
|
$
|
11,409,219
|
|
|
$
|
471,435
|
|
|
4.3
|
%
|
|
|
|
|
Change from 2018
|
|
Percent of Net Sales
|
|||||||||||
Components of gross profit
|
|
2019
|
|
Amount
|
|
Percent
|
|
2019
|
|
2018
|
|||||||
|
|
(In thousands, except percent data)
|
|||||||||||||||
Net sales
|
|
$
|
11,409,219
|
|
|
$
|
471,435
|
|
|
4.3
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
|
10,338,825
|
|
|
244,517
|
|
|
2.4
|
%
|
|
90.6
|
%
|
|
92.3
|
%
|
||
Gross profit
|
|
$
|
1,070,394
|
|
|
$
|
226,918
|
|
|
26.9
|
%
|
|
9.4
|
%
|
|
7.7
|
%
|
Sources of gross profit
|
|
2019
|
|
Change from 2018
|
|||||||
Amount
|
|
Percent
|
|||||||||
|
(In thousands, except percent data)
|
||||||||||
U.S.
|
|
$
|
733,479
|
|
|
$
|
217,597
|
|
|
42.2
|
%
|
U.K. and Europe
|
|
171,751
|
|
|
923
|
|
|
0.5
|
%
|
||
Mexico
|
|
165,068
|
|
|
8,434
|
|
|
5.4
|
%
|
||
Elimination
|
|
96
|
|
|
(36
|
)
|
|
(27.3
|
)%
|
||
Total gross profit
|
|
$
|
1,070,394
|
|
|
$
|
226,918
|
|
|
26.9
|
%
|
Sources of cost of sales
|
|
2019
|
|
Change from 2018
|
|||||||
Amount
|
|
Percent
|
|||||||||
|
(In thousands, except percent data)
|
||||||||||
U.S.
|
|
$
|
6,903,237
|
|
|
$
|
(6,542
|
)
|
|
(0.1
|
)%
|
U.K. and Europe
|
|
2,212,042
|
|
|
234,204
|
|
|
11.8
|
%
|
||
Mexico
|
|
1,223,642
|
|
|
16,819
|
|
|
1.4
|
%
|
||
Elimination(a)
|
|
(96
|
)
|
|
36
|
|
|
(27.3
|
)%
|
||
Total cost of sales
|
|
$
|
10,338,825
|
|
|
$
|
244,517
|
|
|
2.4
|
%
|
(a)
|
Our Consolidated and Combined Financial Statements include the accounts of our company and our majority owned subsidiaries. We eliminate all significant affiliate accounts and transactions upon consolidation.
|
Sources of SG&A expenses
|
|
2019
|
|
Change from 2018
|
|||||||
Amount
|
|
Percent
|
|||||||||
|
|
(In thousands, except percent data)
|
|||||||||
U.S.
|
|
$
|
246,288
|
|
|
$
|
23,927
|
|
|
10.8
|
%
|
U.K. and Europe
|
|
92,569
|
|
|
8,890
|
|
|
10.6
|
%
|
||
Mexico
|
|
41,053
|
|
|
4,068
|
|
|
11.0
|
%
|
||
Total SG&A expense
|
|
$
|
379,910
|
|
|
$
|
36,885
|
|
|
10.8
|
%
|
Sources of administrative restructuring activities
|
|
2019
|
|
Change from 2018
|
|||||||
Amount
|
|
Percent
|
|||||||||
|
|
(In thousands, except percent data)
|
|||||||||
U.S.
|
|
$
|
(84
|
)
|
|
$
|
(2,224
|
)
|
|
(103.9
|
)%
|
U.K. and Europe
|
|
—
|
|
|
(2,625
|
)
|
|
(100.0
|
)%
|
||
Total administrative restructuring activities
|
|
$
|
(84
|
)
|
|
$
|
(4,849
|
)
|
|
(101.8
|
)%
|
|
|
|
|
Change from 2017
|
|||||||
Sources of net sales
|
|
2018
|
|
Amount
|
|
Percent
|
|||||
|
|
(In thousands, except percent data)
|
|||||||||
U.S.
|
|
$
|
7,425,661
|
|
|
$
|
(17,561
|
)
|
|
(0.2
|
)%
|
U.K. and Europe
|
|
2,148,666
|
|
|
152,347
|
|
|
7.6
|
%
|
||
Mexico
|
|
1,363,457
|
|
|
35,135
|
|
|
2.6
|
%
|
||
Total net sales
|
|
$
|
10,937,784
|
|
|
$
|
169,921
|
|
|
1.6
|
%
|
Sources of gross profit
|
|
2018
|
|
Change from 2017
|
|||||||
Amount
|
|
Percent
|
|||||||||
|
(In thousands, except percent data)
|
||||||||||
U.S.
|
|
$
|
515,882
|
|
|
$
|
(578,929
|
)
|
|
(52.9
|
)%
|
U.K. and Europe
|
|
170,828
|
|
|
(17,352
|
)
|
|
(9.2
|
)%
|
||
Mexico
|
|
156,634
|
|
|
(31,894
|
)
|
|
(16.9
|
)%
|
||
Elimination
|
|
132
|
|
|
37
|
|
|
38.9
|
%
|
||
Total gross profit
|
|
$
|
843,476
|
|
|
$
|
(628,138
|
)
|
|
(42.7
|
)%
|
Sources of cost of sales
|
|
2018
|
|
Change from 2017
|
|||||||
Amount
|
|
Percent
|
|||||||||
|
(In thousands, except percent data)
|
||||||||||
U.S.
|
|
$
|
6,909,779
|
|
|
$
|
561,368
|
|
|
8.8
|
%
|
U.K. and Europe
|
|
1,977,838
|
|
|
169,699
|
|
|
9.4
|
%
|
||
Mexico
|
|
1,206,823
|
|
|
67,029
|
|
|
5.9
|
%
|
||
Elimination(a)
|
|
(132
|
)
|
|
(37
|
)
|
|
38.9
|
%
|
||
Total cost of sales
|
|
$
|
10,094,308
|
|
|
$
|
798,059
|
|
|
8.6
|
%
|
(a)
|
Our Consolidated and Combined Financial Statements include the accounts of our company and our majority owned subsidiaries. We eliminate all significant affiliate accounts and transactions upon consolidation.
|
|
|
|
|
Change from 2017
|
|
Percent of Net Sales
|
|||||||||||
Components of operating income
|
|
2018
|
|
Amount
|
|
Percent
|
|
2018
|
|
2017
|
|||||||
|
|
(In thousands, except percent data)
|
|||||||||||||||
Gross profit
|
|
$
|
843,476
|
|
|
$
|
(628,138
|
)
|
|
(42.7
|
)%
|
|
7.7
|
%
|
|
13.7
|
%
|
SG&A expenses
|
|
343,025
|
|
|
(46,492
|
)
|
|
(11.9
|
)%
|
|
3.1
|
%
|
|
3.6
|
%
|
||
Administrative restructuring activities
|
|
4,765
|
|
|
(5,010
|
)
|
|
(51.3
|
)%
|
|
—
|
%
|
|
10.0
|
%
|
||
Operating income
|
|
$
|
495,686
|
|
|
$
|
(576,636
|
)
|
|
(53.8
|
)%
|
|
4.5
|
%
|
|
10.0
|
%
|
|
|
|
|
Change from 2017
|
|||||||
Sources of operating income
|
|
2018
|
|
Amount
|
|
Percent
|
|||||
|
|
(In thousands, except percent data)
|
|||||||||
U.S.
|
|
$
|
291,381
|
|
|
$
|
(550,111
|
)
|
|
(65.4
|
)%
|
U.K. and Europe
|
|
84,524
|
|
|
7,419
|
|
|
9.6
|
%
|
||
Mexico
|
|
119,649
|
|
|
(33,982
|
)
|
|
(22.1
|
)%
|
||
Elimination(a)
|
|
132
|
|
|
38
|
|
|
40.4
|
%
|
||
Total operating income
|
|
$
|
495,686
|
|
|
$
|
(576,636
|
)
|
|
(53.8
|
)%
|
(a)
|
Our Consolidated and Combined Financial Statements include the accounts of our company and our majority owned subsidiaries. We eliminate all significant affiliate accounts and transactions upon consolidation.
|
Sources of SG&A expenses
|
|
2018
|
|
Change from 2017
|
|||||||
Amount
|
|
Percent
|
|||||||||
|
|
(In thousands, except percent data)
|
|||||||||
U.S.
|
|
$
|
222,361
|
|
|
$
|
(22,700
|
)
|
|
(9.3
|
)%
|
U.K. and Europe
|
|
83,679
|
|
|
(25,880
|
)
|
|
(23.6
|
)%
|
||
Mexico
|
|
36,985
|
|
|
2,088
|
|
|
6.0
|
%
|
||
Total SG&A expense
|
|
$
|
343,025
|
|
|
$
|
(46,492
|
)
|
|
(11.9
|
)%
|
Sources of administrative restructuring activities
|
|
2018
|
|
Change from 2017
|
|||||||
Amount
|
|
Percent
|
|||||||||
|
|
(In thousands, except percent data)
|
|||||||||
U.S.
|
|
$
|
2,140
|
|
|
$
|
(6,119
|
)
|
|
(74.1
|
)%
|
U.K. and Europe
|
|
2,625
|
|
|
1,109
|
|
|
73.2
|
%
|
||
Total administrative restructuring activities
|
|
$
|
4,765
|
|
|
$
|
(5,010
|
)
|
|
(51.3
|
)%
|
Sources of Liquidity(a)
|
|
Facility
Amount |
|
Amount
Outstanding |
|
Available
|
||||||
|
|
(In millions)
|
||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
280.6
|
|
Borrowing arrangements:
|
|
|
|
|
|
|
||||||
U.S. Credit Facility(a)
|
|
750.0
|
|
|
41.6
|
|
|
708.4
|
|
|||
Mexico Credit Facility(b)
|
|
79.6
|
|
|
—
|
|
|
79.6
|
|
|||
U.K. and Europe Credit Facilities(c)
|
|
141.9
|
|
|
—
|
|
|
141.9
|
|
(a)
|
Availability under the U.S. Credit Facility is also reduced by our outstanding standby letters of credit. Standby letters of credit outstanding at December 29, 2019 totaled $41.6 million.
|
(b)
|
As of December 29, 2019, the U.S. dollar-equivalent of the amount available under the Mexican Credit Facility was $79.6 million. The Mexican Credit Facility provides for a loan commitment of $1.5 billion Mexican pesos.
|
(c)
|
As of December 29, 2019, the U.S. dollar-equivalent of the amount available under the U.K. and Europe Credit Facilities were $141.9 million. The U.K. and Europe Credit Facilities provide for loan commitments of £100.0 million (or $130.8 million U.S. dollar-equivalent) under the Bank of Ireland Facility Agreement and €10.0 million (or $11.1 million U.S. dollar-equivalent) under the Invoice Discounting Facility.
|
|
|
Payments Due By Period
|
||||||||||||||||||
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)
|
|
$
|
2,325,949
|
|
|
$
|
25,906
|
|
|
$
|
50,043
|
|
|
$
|
400,000
|
|
|
$
|
1,850,000
|
|
Interest(c)
|
|
763,931
|
|
|
121,220
|
|
|
240,058
|
|
|
224,090
|
|
|
178,563
|
|
|||||
Finance leases
|
|
2,414
|
|
|
586
|
|
|
988
|
|
|
840
|
|
|
—
|
|
|||||
Operating leases
|
|
347,389
|
|
|
81,544
|
|
|
124,292
|
|
|
81,545
|
|
|
60,008
|
|
|||||
Derivative liabilities
|
|
10,830
|
|
|
10,830
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase obligations(d)
|
|
328,570
|
|
|
328,570
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
3,779,083
|
|
|
$
|
568,656
|
|
|
$
|
415,381
|
|
|
$
|
706,475
|
|
|
$
|
2,088,571
|
|
(a)
|
The total amount of unrecognized tax benefits at December 29, 2019 was $12.8 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 $41.6 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 December 29, 2019.
|
(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.
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands, except share and par value data)
|
||||||
Cash and cash equivalents
|
$
|
260,568
|
|
|
$
|
338,386
|
|
Restricted cash and cash equivalents
|
20,009
|
|
|
23,192
|
|
||
Trade accounts and other receivables, less allowance for doubtful accounts
|
741,281
|
|
|
561,549
|
|
||
Accounts receivable from related parties
|
944
|
|
|
1,331
|
|
||
Inventories
|
1,383,535
|
|
|
1,159,519
|
|
||
Income taxes receivable
|
60,204
|
|
|
38,479
|
|
||
Prepaid expenses and other current assets
|
131,695
|
|
|
112,201
|
|
||
Total current assets
|
2,598,236
|
|
|
2,234,657
|
|
||
Deferred tax assets
|
4,426
|
|
|
4,248
|
|
||
Other long-lived assets
|
36,325
|
|
|
16,717
|
|
||
Operating lease assets, net
|
301,513
|
|
|
—
|
|
||
Identified intangible assets, net
|
596,053
|
|
|
564,128
|
|
||
Goodwill
|
973,750
|
|
|
949,750
|
|
||
Property, plant and equipment, net
|
2,592,061
|
|
|
2,161,702
|
|
||
Total assets
|
$
|
7,102,364
|
|
|
$
|
5,931,202
|
|
|
|
|
|
||||
Accounts payable
|
$
|
993,780
|
|
|
$
|
827,825
|
|
Accounts payable to related parties
|
3,819
|
|
|
7,269
|
|
||
Revenue contract liability
|
41,770
|
|
|
33,328
|
|
||
Accrued expenses and other current liabilities
|
575,319
|
|
|
389,175
|
|
||
Income taxes payable
|
7,075
|
|
|
8,221
|
|
||
Current maturities of long-term debt
|
26,392
|
|
|
30,405
|
|
||
Total current liabilities
|
1,648,155
|
|
|
1,296,223
|
|
||
Noncurrent operating lease liability, less current maturities
|
235,382
|
|
|
—
|
|
||
Long-term debt, less current maturities
|
2,276,029
|
|
|
2,295,190
|
|
||
Noncurrent income taxes payable
|
7,731
|
|
|
7,731
|
|
||
Deferred tax liabilities
|
301,907
|
|
|
237,422
|
|
||
Other long-term liabilities
|
97,100
|
|
|
75,051
|
|
||
Total liabilities
|
4,566,304
|
|
|
3,911,617
|
|
||
|
|
|
|
||||
Common stock, $.01 par value, 800,000,000 shares authorized; 261,119,064 and
260,396,032 shares issued at year-end 2019 and year-end 2018, respectively;
249,572,119 and 248,965,081 shares outstanding at year-end 2019 and year-end
2018, respectively
|
2,611
|
|
|
2,604
|
|
||
Treasury stock, at cost, 11,546,945 shares and 11,430,951 shares at year-end 2019 and year-end 2018, respectively
|
(234,892
|
)
|
|
(231,994
|
)
|
||
Additional paid-in capital
|
1,955,261
|
|
|
1,945,136
|
|
||
Retained earnings
|
877,812
|
|
|
421,888
|
|
||
Accumulated other comprehensive loss
|
(75,129
|
)
|
|
(127,834
|
)
|
||
Total Pilgrim’s Pride Corporation stockholders’ equity
|
2,525,663
|
|
|
2,009,800
|
|
||
Noncontrolling interest
|
10,397
|
|
|
9,785
|
|
||
Total stockholders’ equity
|
2,536,060
|
|
|
2,019,585
|
|
||
Total liabilities and stockholders’ equity
|
$
|
7,102,364
|
|
|
$
|
5,931,202
|
|
|
Fifty-Two Weeks Ended December 29, 2019
|
|
Fifty-Two Weeks Ended December 30, 2018
|
|
Fifty-Three Weeks Ended December 31, 2017
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Net sales
|
$
|
11,409,219
|
|
|
$
|
10,937,784
|
|
|
$
|
10,767,863
|
|
Cost of sales
|
10,338,825
|
|
|
10,094,308
|
|
|
9,296,249
|
|
|||
Gross profit
|
1,070,394
|
|
|
843,476
|
|
|
1,471,614
|
|
|||
Selling, general and administrative expense
|
379,910
|
|
|
343,025
|
|
|
389,517
|
|
|||
Administrative restructuring activities
|
(84
|
)
|
|
4,765
|
|
|
9,775
|
|
|||
Operating income
|
690,568
|
|
|
495,686
|
|
|
1,072,322
|
|
|||
Interest expense, net of capitalized interest
|
132,630
|
|
|
162,812
|
|
|
107,183
|
|
|||
Interest income
|
(14,277
|
)
|
|
(13,811
|
)
|
|
(7,730
|
)
|
|||
Foreign currency transaction loss (gain)
|
6,917
|
|
|
17,160
|
|
|
(2,659
|
)
|
|||
Gain on bargain purchase
|
(56,880
|
)
|
|
—
|
|
|
—
|
|
|||
Miscellaneous, net
|
4,633
|
|
|
(2,702
|
)
|
|
(6,538
|
)
|
|||
Income before income taxes
|
617,545
|
|
|
332,227
|
|
|
982,066
|
|
|||
Income tax expense
|
161,009
|
|
|
85,423
|
|
|
263,899
|
|
|||
Net income
|
456,536
|
|
|
246,804
|
|
|
718,167
|
|
|||
Less: Net income from Granite Holdings Sàrl prior to acquisition by Pilgrim’s Pride Corporation
|
—
|
|
|
—
|
|
|
23,486
|
|
|||
Less: Net income (loss) attributable to noncontrolling interest
|
612
|
|
|
(1,141
|
)
|
|
102
|
|
|||
Net income attributable to Pilgrim’s Pride Corporation
|
$
|
455,924
|
|
|
$
|
247,945
|
|
|
$
|
694,579
|
|
|
|
|
|
|
|
||||||
Weighted average shares of Pilgrim's Pride Corporation common stock outstanding:
|
|
|
|
|
|
||||||
Basic
|
249,401
|
|
|
248,945
|
|
|
248,738
|
|
|||
Effect of dilutive common stock equivalents
|
308
|
|
|
204
|
|
|
233
|
|
|||
Diluted
|
249,709
|
|
|
249,149
|
|
|
248,971
|
|
|||
|
|
|
|
|
|
||||||
Net income attributable to Pilgrim's Pride Corporation per share of common stock outstanding:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.83
|
|
|
$
|
1.00
|
|
|
$
|
2.79
|
|
Diluted
|
$
|
1.83
|
|
|
$
|
1.00
|
|
|
$
|
2.79
|
|
|
Fifty-Two Weeks
Ended
December 29, 2019
|
|
Fifty-Two Weeks
Ended
December 30, 2018
|
|
Fifty-Three Weeks
Ended
December 31, 2017
|
||||||
|
(In thousands)
|
||||||||||
Net income
|
$
|
456,536
|
|
|
$
|
246,804
|
|
|
$
|
718,167
|
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
|
|
|
|
|
||||||
Gains (losses) arising during the period
|
54,662
|
|
|
(99,475
|
)
|
|
100,081
|
|
|||
Income tax effect
|
—
|
|
|
1,624
|
|
|
3,137
|
|
|||
Derivative financial instruments designated as cash
flow hedges |
|
|
|
|
|
||||||
Gains (losses) arising during the period
|
(2,106
|
)
|
|
817
|
|
|
60
|
|
|||
Reclassification to net earnings for losses (gains)
realized |
383
|
|
|
348
|
|
|
(639
|
)
|
|||
Available-for-sale securities
|
|
|
|
|
|
||||||
Gains arising during the period
|
510
|
|
|
1,146
|
|
|
132
|
|
|||
Income tax effect
|
(124
|
)
|
|
(279
|
)
|
|
(50
|
)
|
|||
Reclassification to net earnings for gains realized
|
(619
|
)
|
|
(1,118
|
)
|
|
(34
|
)
|
|||
Income tax effect
|
151
|
|
|
272
|
|
|
13
|
|
|||
Defined benefit plans
|
|
|
|
|
|
||||||
Gains (losses) realized during the period
|
(2,161
|
)
|
|
(1,242
|
)
|
|
(8,738
|
)
|
|||
Income tax effect
|
1,016
|
|
|
303
|
|
|
968
|
|
|||
Reclassification to net earnings of losses realized
|
1,313
|
|
|
1,203
|
|
|
932
|
|
|||
Income tax effect
|
(320
|
)
|
|
(293
|
)
|
|
(353
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
52,705
|
|
|
(96,694
|
)
|
|
95,509
|
|
|||
Comprehensive income
|
509,241
|
|
|
150,110
|
|
|
813,676
|
|
|||
Less: Comprehensive income (loss) for Granite
Holdings Sàrl prior to acquisition by Pilgrim's Pride Corporation |
—
|
|
|
—
|
|
|
88,050
|
|
|||
Less: Comprehensive income (loss) attributable to
noncontrolling interests |
612
|
|
|
(1,141
|
)
|
|
102
|
|
|||
Comprehensive income attributable to Pilgrim's Pride
Corporation |
$
|
508,629
|
|
|
$
|
151,251
|
|
|
$
|
725,524
|
|
|
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
|
272,682
|
|
|
$
|
307,288
|
|
|
(10,636
|
)
|
|
$
|
(217,117
|
)
|
|
$
|
3,100,332
|
|
|
$
|
(782,785
|
)
|
|
$
|
(329,858
|
)
|
|
$
|
8,272
|
|
|
$
|
2,086,132
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
718,065
|
|
|
—
|
|
|
102
|
|
|
718,167
|
|
|||||||
Other comprehensive income, net of tax expense of $3,715
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95,509
|
|
|
—
|
|
|
95,509
|
|
|||||||
Capital contribution under Tax Sharing Agreement between JBS USA Food Company Holdings and Pilgrim's Pride Corporation (the “TSA”)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,558
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,558
|
|
|||||||
Share-based compensation plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock issued under compensation plans
|
486
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Requisite service period recognition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,019
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,019
|
|
|||||||
Common stock purchased under share repurchase program
|
—
|
|
|
—
|
|
|
(780
|
)
|
|
(14,641
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,641
|
)
|
|||||||
Deemed equity contribution resulting from the transfer of Granite Holdings
Sàrl net assets from JBS S.A. to Pilgrim's Pride Corporation in a common-control transaction |
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
237,195
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
237,195
|
|
|||||||
Transfer of Granite Holdings Sàrl to Pilgrim's from JBS S.A.
|
(13,000
|
)
|
|
(304,691
|
)
|
|
—
|
|
|
—
|
|
|
(1,413,590
|
)
|
|
238,663
|
|
|
203,209
|
|
|
1,131
|
|
|
(1,275,278
|
)
|
|||||||
Balance at December 31, 2017
|
260,168
|
|
|
$
|
2,602
|
|
|
(11,416
|
)
|
|
$
|
(231,758
|
)
|
|
$
|
1,932,509
|
|
|
$
|
173,943
|
|
|
$
|
(31,140
|
)
|
|
$
|
9,505
|
|
|
$
|
1,855,661
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
247,945
|
|
|
—
|
|
|
(1,141
|
)
|
|
246,804
|
|
|||||||
Other comprehensive loss, net of tax benefit of $1,627
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(96,694
|
)
|
|
—
|
|
|
(96,694
|
)
|
|||||||
Capital contribution under TSA
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(524
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(524
|
)
|
|||||||
Share-based compensation plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Common stock issued under compensation plans
|
228
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Requisite service period recognition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,153
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,153
|
|
|||||||
Common stock purchased under share repurchase program
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(236
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(236
|
)
|
|||||||
Capital contribution to subsidiary by noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,421
|
|
|
1,421
|
|
|||||||
Balance at December 30, 2018
|
260,396
|
|
|
$
|
2,604
|
|
|
(11,431
|
)
|
|
$
|
(231,994
|
)
|
|
$
|
1,945,136
|
|
|
$
|
421,888
|
|
|
$
|
(127,834
|
)
|
|
$
|
9,785
|
|
|
$
|
2,019,585
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
455,924
|
|
|
—
|
|
|
612
|
|
|
456,536
|
|
|||||||
Other comprehensive income, net of tax benefit of $733
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52,705
|
|
|
—
|
|
|
52,705
|
|
|||||||
Capital distribution under the TSA
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Share-based compensation plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock issued under compensation plans
|
723
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Requisite service period recognition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,132
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,132
|
|
|||||||
Common stock purchased under share repurchase program
|
—
|
|
|
—
|
|
|
(116
|
)
|
|
(2,898
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,898
|
)
|
|||||||
Balance at December 29, 2019
|
261,119
|
|
|
$
|
2,611
|
|
|
(11,547
|
)
|
|
$
|
(234,892
|
)
|
|
$
|
1,955,261
|
|
|
$
|
877,812
|
|
|
$
|
(75,129
|
)
|
|
$
|
10,397
|
|
|
$
|
2,536,060
|
|
|
Fifty-Two Weeks Ended December 29, 2019
|
|
Fifty-Two Weeks Ended December 30, 2018
|
|
Fifty-Three Weeks Ended
December 31, 2017
|
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
456,536
|
|
|
$
|
246,804
|
|
|
$
|
718,167
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
287,230
|
|
|
274,088
|
|
|
271,824
|
|
|||
Gain on bargain purchase
|
(56,880
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income tax expense (benefit)
|
42,478
|
|
|
32,540
|
|
|
(49,963
|
)
|
|||
Share-based compensation
|
10,132
|
|
|
13,153
|
|
|
3,020
|
|
|||
Gain on property disposals
|
(10,896
|
)
|
|
(1,889
|
)
|
|
(506
|
)
|
|||
Foreign currency transaction losses (gains) related to borrowing arrangements
|
(4,970
|
)
|
|
5,267
|
|
|
(1,387
|
)
|
|||
Loan cost amortization
|
4,821
|
|
|
5,569
|
|
|
5,968
|
|
|||
Accretion of bond discount
|
982
|
|
|
812
|
|
|
—
|
|
|||
Amortization of bond premium
|
(668
|
)
|
|
(668
|
)
|
|
(180
|
)
|
|||
Gain on equity method investments
|
(63
|
)
|
|
(63
|
)
|
|
(59
|
)
|
|||
Loss on early extinguishment of debt recognized as a component of interest expense
|
—
|
|
|
15,818
|
|
|
—
|
|
|||
Asset impairment
|
—
|
|
|
3,504
|
|
|
5,156
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Trade accounts and other receivables
|
(25,000
|
)
|
|
(10,918
|
)
|
|
(82,169
|
)
|
|||
Inventories
|
(111,748
|
)
|
|
83,174
|
|
|
(207,399
|
)
|
|||
Prepaid expenses and other current assets
|
(15,490
|
)
|
|
(11,612
|
)
|
|
(14,827
|
)
|
|||
Accounts payable and accrued expenses
|
119,892
|
|
|
86,834
|
|
|
(22,827
|
)
|
|||
Income taxes
|
(26,378
|
)
|
|
(248,470
|
)
|
|
188,120
|
|
|||
Long-term pension and other postretirement obligations
|
(9,221
|
)
|
|
(6,751
|
)
|
|
(10,864
|
)
|
|||
Other
|
5,764
|
|
|
4,458
|
|
|
(753
|
)
|
|||
Cash provided by operating activities
|
666,521
|
|
|
491,650
|
|
|
801,321
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchase of acquired business, net of cash acquired
|
(384,694
|
)
|
|
—
|
|
|
(658,520
|
)
|
|||
Acquisitions of property, plant and equipment
|
(348,120
|
)
|
|
(348,666
|
)
|
|
(339,872
|
)
|
|||
Proceeds from property disposals
|
15,753
|
|
|
9,775
|
|
|
4,475
|
|
|||
Proceeds from settlement of life insurance contract
|
—
|
|
|
—
|
|
|
1,845
|
|
|||
Cash used in investing activities
|
(717,061
|
)
|
|
(338,891
|
)
|
|
(992,072
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Payments on revolving line of credit, long-term borrowings and finance lease obligations
|
(289,917
|
)
|
|
(1,117,009
|
)
|
|
(628,677
|
)
|
|||
Proceeds from revolving line of credit and long-term borrowings
|
259,466
|
|
|
748,382
|
|
|
1,871,818
|
|
|||
Purchase of common stock under share repurchase program
|
(2,898
|
)
|
|
(236
|
)
|
|
(14,641
|
)
|
|||
Payment of capitalized loan costs
|
(652
|
)
|
|
(12,581
|
)
|
|
(13,631
|
)
|
|||
Proceeds (distribution) from capital contribution under the TSA
|
(525
|
)
|
|
5,558
|
|
|
5,038
|
|
|||
Capital contributions to subsidiary by noncontrolling stockholders
|
—
|
|
|
1,421
|
|
|
—
|
|
|||
Payment on early extinguishment of debt
|
—
|
|
|
(9,781
|
)
|
|
—
|
|
|||
Payment of note payable to affiliate
|
—
|
|
|
—
|
|
|
(753,512
|
)
|
|||
Cash provided by (used in) financing activities
|
(34,526
|
)
|
|
(384,246
|
)
|
|
466,395
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
4,065
|
|
|
3,534
|
|
|
16,364
|
|
|||
Increase (decrease) in cash and cash equivalents
|
(81,001
|
)
|
|
(227,953
|
)
|
|
292,008
|
|
|||
Cash and cash equivalents, beginning of period
|
361,578
|
|
|
589,531
|
|
|
297,523
|
|
|||
Cash and cash equivalents, end of period
|
$
|
280,577
|
|
|
$
|
361,578
|
|
|
$
|
589,531
|
|
Supplemental Disclosure Information:
|
|
|
|
|
|
||||||
Interest paid (net of amount capitalized)
|
$
|
130,882
|
|
|
$
|
154,627
|
|
|
$
|
81,260
|
|
Income taxes paid
|
125,856
|
|
|
253,932
|
|
|
122,956
|
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
260,568
|
|
|
$
|
338,386
|
|
Restricted cash
|
20,009
|
|
|
23,192
|
|
||
Total cash, cash equivalents and restricted cash shown in the
Consolidated and Combined Statements of Cash Flows
|
$
|
280,577
|
|
|
$
|
361,578
|
|
•
|
Commodity Price Risk - The Company utilizes various raw materials, which are all considered commodities, in its operations, including corn, soybean meal, soybean oil, wheat, natural gas, electricity and diesel fuel. The Company considers these raw materials to be generally available from a number of different sources and believes it can obtain them to meet its requirements. These commodities are subject to price fluctuations and related price risk due to factors beyond our control, such as economic and political conditions, supply and demand, weather, governmental regulation and other circumstances. Generally, the Company enters into derivative contracts such as physical forward contracts and exchange-traded futures or option contracts in an attempt to mitigate price risk related to its anticipated consumption of commodity inputs for periods up to 12 months. The Company may enter into longer-term derivatives on particular commodities if deemed appropriate.
|
•
|
Foreign Currency Risk - The Company has foreign operations and, therefore, has exposure to foreign exchange risk when the financial results of those operations are translated to US dollars. The Company will occasionally purchase derivative financial instruments such as foreign currency forward contracts in an attempt to mitigate currency exchange rate exposure related to the net assets of its Mexico operations that are denominated in Mexican pesos. The Company’s Moy Park operation also attempts to mitigate foreign currency exposure on certain euro- and U.S. dollar-denominated transactions through the use of derivative financial instruments.
|
Cash and cash equivalents
|
$
|
6,854
|
|
Trade accounts and other receivables
|
146,423
|
|
|
Inventories
|
104,211
|
|
|
Prepaid expenses and other current assets
|
6,579
|
|
|
Operating lease assets
|
5,613
|
|
|
Property, plant and equipment
|
329,711
|
|
|
Identified intangible assets
|
40,418
|
|
|
Other assets
|
14,647
|
|
|
Total assets acquired
|
654,456
|
|
|
|
|
||
Accounts payable
|
110,296
|
|
|
Other current liabilities
|
55,830
|
|
|
Operating lease liabilities
|
5,613
|
|
|
Deferred tax liabilities
|
14,798
|
|
|
Pension obligations
|
18,435
|
|
|
Other long-term liabilities
|
1,056
|
|
|
Total liabilities assumed
|
206,028
|
|
|
Total identifiable net assets
|
448,428
|
|
|
Gain on bargain purchase
|
(56,880
|
)
|
|
Total consideration transferred
|
$
|
391,548
|
|
•
|
Property, plant and equipment, net. Property, plant and equipment at fair value gave consideration to the highest and best use of the assets. The valuation of the Company's real property improvements and the majority of its personal property was based on the cost approach. The valuation of the Company's land, as if vacant, and certain personal property assets was based on the market or sales comparison approach.
|
•
|
Customer relationships. The Company valued Tulip customer relationships using the income approach, specifically the multi-period excess earnings model. Under this model, the fair value of the customer relationships asset was determined by estimating the net cash inflows from the relationships discounted to present value. In estimating the fair value of the customer relationships, net sales related to existing Tulip customers were estimated to grow at a rate of 2.0% annually, but we also anticipate losing existing Tulip customers at an attrition rate of 10.0%. Income taxes were estimated at 18.0% of pre-tax income in 2020 and 17.0% of pre-tax income thereafter and net cash flows attributable to our existing customers were discounted using a rate of 22.0%. The resulting customer relationships intangible asset has a fair value of $40.4 million and a useful life of 11 years.
|
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
|
144,138
|
|
|
Identifiable intangible assets
|
131,120
|
|
|
Other long-lived assets
|
829
|
|
|
Total assets acquired
|
354,423
|
|
|
Accounts payable
|
23,848
|
|
|
Other current liabilities
|
11,866
|
|
|
Other long-term liabilities
|
3,393
|
|
|
Total liabilities assumed
|
39,107
|
|
|
Total identifiable net assets
|
315,316
|
|
|
Goodwill
|
41,936
|
|
|
Total net assets
|
$
|
357,252
|
|
|
Fair Value
|
|
Useful Life
|
||
|
(In thousands)
|
|
(In years)
|
||
Customer relationships
|
$
|
92,900
|
|
|
13.0
|
Trade names
|
38,200
|
|
|
20.0
|
|
Non-compete agreement
|
20
|
|
|
3.0
|
|
Total fair value
|
$
|
131,120
|
|
|
|
Weighted average useful life
|
|
|
15.2
|
•
|
Property, plant and equipment, net. Property, plant and equipment at fair value gave consideration to the highest and best use of the assets. The valuation of the Company's real property improvements and the majority of its personal property was based on the cost approach. The valuation of the Company's land, as if vacant, and certain personal property assets was based on the market or sales comparison approach.
|
•
|
Trade names. The Company valued two trade names using the income approach, specifically the relief from royalty method. Under this method, the asset value of each trade name was determined by estimating the hypothetical royalties that would have to be paid if it was not owned. Royalty rates were selected based on consideration of several factors, including (1) prior transactions involving GNP trade names, (2) incomes derived from license agreements on comparable trade names within the food industry and (3) the relative profitability and perceived contribution of each trade name. The royalty rate used in the determination of the fair values of the two trade names was 2.0% of expected net sales related to the respective trade names. In estimating the fair value of the trade names, net sales related to the respective trade names were estimated to grow at a rate of 2.5%. Income taxes were estimated at 39.3% of pre-tax income, a tax amortization benefit factor was estimated at 1.2098 and the hypothetical savings generated by avoiding royalty costs were discounted using a rate of 13.8%.
|
•
|
Customer relationships. The Company valued GNP customer relationships using the income approach, specifically the multi-period excess earnings model. Under this model, the fair value of the customer relationships asset was determined by estimating the net cash inflows from the relationships discounted to present value. In estimating the fair value of the customer relationships, net sales related to existing GNP customers were estimated to grow at a rate of 2.5% annually, but we also anticipate losing existing GNP customers at an attrition rate of 4.0%. Income taxes were estimated at 39.3% of pre-tax income, a tax amortization benefit factor was estimated at 1.2098 and net cash flows attributable to our existing customers were discounted using a rate of 13.8%.
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Net sales
|
$
|
12,462,566
|
|
|
$
|
12,342,475
|
|
|
$
|
12,165,647
|
|
Net income attributable to Pilgrim's Pride Corporation
|
385,958
|
|
|
140,508
|
|
|
608,188
|
|
|||
Net income attributable to Pilgrim's Pride Corporation
per common share - diluted |
1.55
|
|
|
0.56
|
|
|
2.44
|
|
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.
|
|
December 29, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Fair value assets:
|
|
|
|
|
|
|
|
||||||||
Commodity futures instruments
|
$
|
4,147
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,147
|
|
Commodity options instruments
|
906
|
|
|
—
|
|
|
—
|
|
|
906
|
|
||||
Foreign currency instruments
|
426
|
|
|
—
|
|
|
—
|
|
|
426
|
|
||||
Fair value liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity futures instruments
|
(4,797
|
)
|
|
—
|
|
|
—
|
|
|
(4,797
|
)
|
||||
Commodity options instruments
|
(633
|
)
|
|
—
|
|
|
—
|
|
|
(633
|
)
|
||||
Foreign currency instruments
|
(5,400
|
)
|
|
—
|
|
|
—
|
|
|
(5,400
|
)
|
|
December 30, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Fair value assets:
|
|
|
|
|
|
|
|
||||||||
Commodity futures instruments
|
$
|
2,244
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,244
|
|
Commodity options instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Foreign currency instruments
|
1,311
|
|
|
—
|
|
|
—
|
|
|
1,311
|
|
||||
Fair value liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity futures instruments
|
(1,479
|
)
|
|
—
|
|
|
—
|
|
|
(1,479
|
)
|
||||
Commodity option instruments
|
(3,312
|
)
|
|
—
|
|
|
—
|
|
|
(3,312
|
)
|
||||
Foreign currency instruments
|
(6,649
|
)
|
|
—
|
|
|
—
|
|
|
(6,649
|
)
|
|
December 29, 2019
|
|
December 30, 2018
|
||||||||||||
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
||||||||
|
|
|
(In thousands)
|
|
|
||||||||||
Fixed-rate senior notes payable at 5.75%, at Level 1 inputs
|
$
|
(1,002,095
|
)
|
|
$
|
(1,034,200
|
)
|
|
$
|
(1,002,497
|
)
|
|
$
|
(937,300
|
)
|
Fixed-rate senior notes payable at 5.875%, at Level 1 inputs
|
(844,433
|
)
|
|
(919,505
|
)
|
|
(843,717
|
)
|
|
(768,188
|
)
|
||||
Secured loans, at Level 3 inputs
|
(948
|
)
|
|
(939
|
)
|
|
(319
|
)
|
|
(319
|
)
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Trade accounts receivable
|
$
|
696,372
|
|
|
$
|
533,645
|
|
Notes receivable
|
4,187
|
|
|
4,630
|
|
||
Other receivables
|
48,189
|
|
|
31,331
|
|
||
Receivables, gross
|
748,748
|
|
|
569,606
|
|
||
Allowance for doubtful accounts
|
(7,467
|
)
|
|
(8,057
|
)
|
||
Receivables, net
|
$
|
741,281
|
|
|
$
|
561,549
|
|
|
|
|
|
||||
Accounts receivable from related parties(a)
|
$
|
944
|
|
|
$
|
1,331
|
|
(a)
|
Additional information regarding accounts receivable from related parties is included in “Note 19. Related Party Transactions.”
|
|
Total
|
||
|
(In thousands)
|
||
Balance as of December 30, 2018
|
$
|
(8,057
|
)
|
Provision charged to operating results
|
(1,690
|
)
|
|
Account write-offs and recoveries
|
2,390
|
|
|
Tulip acquisition
|
(134
|
)
|
|
Effect of exchange rate
|
24
|
|
|
Balance as of December 29, 2019
|
$
|
(7,467
|
)
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Raw materials and work-in-process
|
$
|
800,749
|
|
|
$
|
747,801
|
|
Finished products
|
425,919
|
|
|
317,410
|
|
||
Operating supplies
|
82,447
|
|
|
43,825
|
|
||
Maintenance materials and parts
|
74,420
|
|
|
50,483
|
|
||
Total inventories
|
$
|
1,383,535
|
|
|
$
|
1,159,519
|
|
|
December 29, 2019
|
|
December 30, 2018
|
||||||||||||
|
Cost |
|
Fair
Value |
|
Cost |
|
Fair
Value |
||||||||
|
(In thousands)
|
||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
$
|
159,623
|
|
|
$
|
159,623
|
|
|
$
|
135,286
|
|
|
$
|
135,286
|
|
Other
|
—
|
|
|
—
|
|
|
67,474
|
|
|
67,474
|
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(Fair values in thousands)
|
||||||
Fair values:
|
|
|
|
||||
Commodity derivative assets
|
$
|
5,053
|
|
|
$
|
2,263
|
|
Commodity derivative liabilities
|
(5,430
|
)
|
|
(4,791
|
)
|
||
Foreign currency derivative assets
|
426
|
|
|
1,311
|
|
||
Foreign currency derivative liabilities
|
(5,400
|
)
|
|
(6,649
|
)
|
||
Cash collateral posted with brokers(a)
|
20,009
|
|
|
23,192
|
|
||
Derivatives Coverage(b):
|
|
|
|
||||
Corn
|
12.0
|
%
|
|
6.0
|
%
|
||
Soybean meal
|
44.0
|
%
|
|
6.0
|
%
|
||
Period through which stated percent of needs are covered:
|
|
|
|
||||
Corn
|
December 2020
|
|
|
March 2020
|
|
||
Soybean meal
|
July 2020
|
|
|
December 2019
|
|
(a)
|
Collateral posted with brokers consists primarily of cash, short term treasury bills, or other cash equivalents.
|
(b)
|
Derivatives coverage is the percent of anticipated commodity needs covered by outstanding derivative instruments through a specified date.
|
|
Gain (Loss) Recognized in Other Comprehensive Loss on Derivative (Effective Portion)
|
||||||||||
|
December 29, 2019
|
|
December 30, 2018
|
|
December 31, 2017
|
||||||
|
|
||||||||||
Foreign currency derivatives
|
$
|
(2,052
|
)
|
|
$
|
829
|
|
|
$
|
60
|
|
Total
|
$
|
(2,052
|
)
|
|
$
|
829
|
|
|
$
|
60
|
|
|
|
|
|
|
|
||||||
|
Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
|
||||||||||
|
December 29, 2019
|
|
December 30, 2018
|
|
December 31, 2017
|
||||||
|
|
||||||||||
Foreign currency derivatives
|
$
|
383
|
|
|
$
|
(348
|
)
|
|
$
|
639
|
|
Total
|
$
|
383
|
|
|
$
|
(348
|
)
|
|
$
|
639
|
|
|
December 30, 2018
|
|
Additions
|
|
Other
|
|
Currency Translation
|
|
December 29, 2019
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
U.S.
|
$
|
41,936
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
41,936
|
|
U.K. and Europe
|
782,207
|
|
|
—
|
|
|
—
|
|
|
24,000
|
|
|
806,207
|
|
|||||
Mexico
|
125,607
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,607
|
|
|||||
Total
|
$
|
949,750
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,000
|
|
|
$
|
973,750
|
|
|
December 31, 2017
|
|
Additions
|
|
Other
|
|
Currency Translation
|
|
December 30, 2018
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
U.S.
|
$
|
41,936
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
41,936
|
|
U.K. and Europe
|
834,346
|
|
|
—
|
|
|
(1,156
|
)
|
|
(50,983
|
)
|
|
782,207
|
|
|||||
Mexico
|
125,607
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,607
|
|
|||||
Total
|
$
|
1,001,889
|
|
|
$
|
—
|
|
|
$
|
(1,156
|
)
|
|
$
|
(50,983
|
)
|
|
$
|
949,750
|
|
|
December 30, 2018
|
|
Additions
|
|
Amortization
|
|
Currency Translation
|
|
Reclassification
|
|
December 29, 2019
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Carrying amount:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
$
|
78,343
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
78,343
|
|
Customer relationships
|
247,706
|
|
|
40,418
|
|
|
—
|
|
|
4,154
|
|
|
—
|
|
|
292,278
|
|
||||||
Non-compete agreements
|
320
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
320
|
|
||||||
Trade names not subject to
amortization
|
380,067
|
|
|
—
|
|
|
—
|
|
|
11,364
|
|
|
—
|
|
|
391,431
|
|
||||||
Accumulated amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
(43,552
|
)
|
|
—
|
|
|
(1,966
|
)
|
|
—
|
|
|
—
|
|
|
(45,518
|
)
|
||||||
Customer relationships
|
(98,441
|
)
|
|
—
|
|
|
(20,920
|
)
|
|
(1,120
|
)
|
|
—
|
|
|
(120,481
|
)
|
||||||
Non-compete agreements
|
(315
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(320
|
)
|
||||||
Total
|
$
|
564,128
|
|
|
$
|
40,418
|
|
|
$
|
(22,891
|
)
|
|
$
|
14,398
|
|
|
$
|
—
|
|
|
$
|
596,053
|
|
|
December 31, 2017
|
|
Additions
|
|
Amortization
|
|
Currency Translation
|
|
Reclassification
|
|
December 30, 2018
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Carrying amount:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
$
|
79,686
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,343
|
)
|
|
$
|
78,343
|
|
Customer relationships
|
251,952
|
|
|
—
|
|
|
—
|
|
|
(5,589
|
)
|
|
1,343
|
|
|
247,706
|
|
||||||
Non-compete agreements
|
320
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
320
|
|
||||||
Trade names not subject to
amortization
|
403,594
|
|
|
—
|
|
|
—
|
|
|
(23,527
|
)
|
|
—
|
|
|
380,067
|
|
||||||
Accumulated amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
(40,888
|
)
|
|
—
|
|
|
(3,287
|
)
|
|
—
|
|
|
623
|
|
|
(43,552
|
)
|
||||||
Customer relationships
|
(77,194
|
)
|
|
—
|
|
|
(22,441
|
)
|
|
1,817
|
|
|
(623
|
)
|
|
(98,441
|
)
|
||||||
Non-compete agreements
|
(307
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(315
|
)
|
||||||
Total
|
$
|
617,163
|
|
|
$
|
—
|
|
|
$
|
(25,736
|
)
|
|
$
|
(27,299
|
)
|
|
$
|
—
|
|
|
$
|
564,128
|
|
Customer relationships
|
5-16 years
|
Trade names
|
3-20 years
|
Non-compete agreements
|
3 years
|
9.
|
LEASES
|
|
Fifty-Two Weeks Ended
|
||
|
December 29, 2019
|
||
Operating lease cost(a)
|
$
|
99,242
|
|
Amortization of finance lease assets
|
167
|
|
|
Interest on finance leases
|
32
|
|
|
Short-term lease cost
|
59,225
|
|
|
Variable lease cost
|
3,031
|
|
|
Net lease cost
|
$
|
161,697
|
|
(a)
|
Sublease income is immaterial and not included in operating lease costs.
|
|
December 29, 2019
|
|
Weighted-average remaining lease term (years):
|
|
|
Operating leases
|
5.77
|
|
Finance leases
|
4.54
|
|
Weighted-average discount rate:
|
|
|
Operating leases
|
4.80
|
%
|
Finance leases
|
5.21
|
%
|
|
Fifty-Two Weeks Ended
|
||
|
December 29, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
100,473
|
|
Operating cash flow from finance leases
|
32
|
|
|
Financing cash flows from finance leases
|
167
|
|
|
|
|
||
Operating lease assets obtained in exchange for operating lease liabilities
|
$
|
34,648
|
|
Finance lease assets obtained in exchange for finance lease liabilities
|
2,182
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
For the fiscal years ending December:
|
|
|
|
||||
2020
|
$
|
81,544
|
|
|
$
|
586
|
|
2021
|
67,082
|
|
|
494
|
|
||
2022
|
57,210
|
|
|
494
|
|
||
2023
|
46,897
|
|
|
494
|
|
||
2024
|
34,648
|
|
|
346
|
|
||
Thereafter
|
60,008
|
|
|
—
|
|
||
Total future minimum lease payments
|
347,389
|
|
|
2,414
|
|
||
Less: imputed interest
|
(45,768
|
)
|
|
(264
|
)
|
||
Present value of lease liabilities
|
$
|
301,621
|
|
|
$
|
2,150
|
|
|
Capital Lease
Obligations
|
|
Noncancellable
Operating Lease
Obligations
|
||||
For the fiscal years ending December:
|
|
|
|
||||
2019
|
$
|
2,971
|
|
|
$
|
84,220
|
|
2020
|
1,033
|
|
|
63,196
|
|
||
2021
|
36
|
|
|
53,908
|
|
||
2022
|
3
|
|
|
45,557
|
|
||
2023
|
—
|
|
|
36,136
|
|
||
Thereafter
|
—
|
|
|
66,637
|
|
||
Net minimum lease payments
|
4,043
|
|
|
$
|
349,654
|
|
|
Amount representing interest
|
(337
|
)
|
|
|
|||
Present value of net minimum lease payments
|
$
|
3,706
|
|
|
|
|
Operating Leases
|
|
Finance Leases(a)
|
||||
Accrued expenses and other current liabilities
|
$
|
66,239
|
|
|
$
|
—
|
|
Current maturities of long-term debt
|
—
|
|
|
486
|
|
||
Noncurrent operating lease liability, less current maturities
|
235,382
|
|
|
—
|
|
||
Long-term debt, less current maturities
|
—
|
|
|
1,664
|
|
||
Total lease liabilities
|
$
|
301,621
|
|
|
$
|
2,150
|
|
(a)
|
Additional information regarding finance lease assets is included in “Note 10. Property, Plant and Equipment.”
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Land
|
$
|
222,076
|
|
|
$
|
196,769
|
|
Buildings
|
1,754,219
|
|
|
1,697,703
|
|
||
Machinery and equipment
|
3,139,748
|
|
|
2,618,213
|
|
||
Autos and trucks
|
64,122
|
|
|
59,195
|
|
||
Finance leases
|
2,182
|
|
|
—
|
|
||
Construction-in-progress
|
229,015
|
|
|
269,166
|
|
||
PP&E, gross
|
5,411,362
|
|
|
4,841,046
|
|
||
Accumulated depreciation
|
(2,819,301
|
)
|
|
(2,679,344
|
)
|
||
PP&E, net
|
$
|
2,592,061
|
|
|
$
|
2,161,702
|
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Accounts payable:
|
|
|
|
||||
Trade accounts(a)
|
$
|
875,374
|
|
|
$
|
741,871
|
|
Book overdrafts
|
98,267
|
|
|
69,475
|
|
||
Other payables
|
20,139
|
|
|
16,479
|
|
||
Total accounts payable
|
993,780
|
|
|
827,825
|
|
||
Accounts payable to related parties(b)
|
3,819
|
|
|
7,269
|
|
||
Revenue contract liability(c)
|
41,770
|
|
|
33,328
|
|
||
Accrued expenses and other current liabilities:
|
|
|
|
||||
Compensation and benefits(d)
|
164,946
|
|
|
144,391
|
|
||
Taxes(d)
|
41,901
|
|
|
25,208
|
|
||
Interest and debt-related fees
|
31,183
|
|
|
33,596
|
|
||
Insurance and self-insured claims
|
67,332
|
|
|
80,990
|
|
||
Current maturities of operating lease liabilities
|
66,239
|
|
|
—
|
|
||
Derivative liability
|
10,830
|
|
|
11,440
|
|
||
Other accrued expenses(d)
|
192,888
|
|
|
93,550
|
|
||
Total accrued expenses and other current liabilities
|
575,319
|
|
|
389,175
|
|
||
Total current liabilities
|
$
|
1,614,688
|
|
|
$
|
1,257,597
|
|
(a)
|
Trade accounts contains a $2.2 million reclassification related to trade accounts discounts previously presented in Other accrued expenses on our annual report on Form 10-K for the year ended December 30, 2018 to conform to Current liabilities presented as of December 29, 2019.
|
(b)
|
Additional information regarding accounts payable to related parties is included in “Note 19. Related Party Transactions.”
|
(c)
|
Additional information regarding revenue contract liabilities is included in “Note 14. Revenue Recognition.”
|
(d)
|
Taxes contains a $5.1 million reclassification related to payroll withholding taxes previously presented in Compensation and benefits and a $20.0 million reclassification related to accrued taxes previously presented in Other accrued expenses on our annual report on Form 10-K for the year ended December 30, 2018 to conform to Current liabilities presented as of December 29, 2019.
|
|
Maturity
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
Long-term debt and other long-term borrowing arrangements:
|
|
|
(In thousands)
|
||||||
Senior notes payable, net of premium and discount at 5.75%
|
2025
|
|
$
|
1,002,095
|
|
|
$
|
1,002,497
|
|
Senior notes payable, net of discount at 5.875%
|
2027
|
|
844,433
|
|
|
843,717
|
|
||
U.S. Credit Facility (defined below):
|
|
|
|
|
|
||||
Term note payable at 2.94%
|
2023
|
|
475,000
|
|
|
500,000
|
|
||
Revolving note payable at 5.00%
|
2023
|
|
—
|
|
|
—
|
|
||
Moy Park France Invoice Discounting Revolver with payables at
EURIBOR plus 0.8% |
2019
|
|
—
|
|
|
2,277
|
|
||
Moy Park Credit Agricole Bank Overdraft with notes payable at
EURIBOR plus 1.50% |
On Demand
|
|
—
|
|
|
88
|
|
||
Moy Park Bank of Ireland Revolving Facility with notes payable at
LIBOR or EURIBOR plus 1.25% to 2.00% |
2023
|
|
—
|
|
|
—
|
|
||
Mexico Credit Facility (defined below) with notes payable at
TIIE Rate plus 1.50% |
2023
|
|
—
|
|
|
—
|
|
||
Secured loans with payables at weighted average of 3.34%
|
Various
|
|
948
|
|
|
319
|
|
||
Capital/finance lease obligations
|
Various
|
|
2,150
|
|
|
3,707
|
|
||
Long-term debt
|
|
|
2,324,626
|
|
|
2,352,605
|
|
||
Less: Current maturities of long-term debt
|
|
|
(26,392
|
)
|
|
(30,405
|
)
|
||
Long-term debt, less current maturities
|
|
|
2,298,234
|
|
|
2,322,200
|
|
||
Less: Capitalized financing costs
|
|
|
(22,205
|
)
|
|
(27,010
|
)
|
||
Long-term debt, less current maturities, net of capitalized
financing costs |
|
|
$
|
2,276,029
|
|
|
$
|
2,295,190
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
U.S.
|
$
|
342,110
|
|
|
$
|
175,805
|
|
|
$
|
773,160
|
|
Foreign
|
275,435
|
|
|
156,422
|
|
|
208,906
|
|
|||
Total
|
$
|
617,545
|
|
|
$
|
332,227
|
|
|
$
|
982,066
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Current:
|
|
|
|
||||||||
Federal
|
$
|
27,585
|
|
|
$
|
8,835
|
|
|
$
|
213,146
|
|
Foreign
|
78,099
|
|
|
45,311
|
|
|
65,100
|
|
|||
State and other
|
12,847
|
|
|
(1,263
|
)
|
|
35,614
|
|
|||
Total current
|
118,531
|
|
|
52,883
|
|
|
313,860
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
51,387
|
|
|
41,104
|
|
|
(19,434
|
)
|
|||
Foreign
|
(18,596
|
)
|
|
(17,160
|
)
|
|
(34,264
|
)
|
|||
State and other
|
9,687
|
|
|
8,596
|
|
|
3,737
|
|
|||
Total deferred
|
42,478
|
|
|
32,540
|
|
|
(49,961
|
)
|
|||
|
$
|
161,009
|
|
|
$
|
85,423
|
|
|
$
|
263,899
|
|
|
2019
|
|
2018
|
|
2017
|
|
|||
Federal income tax rate
|
21.0
|
|
%
|
21.0
|
|
%
|
35.0
|
|
%
|
State tax rate, net
|
3.0
|
|
|
3.6
|
|
|
2.6
|
|
|
One-time transition tax
|
—
|
|
|
7.9
|
|
|
—
|
|
|
Permanent items
|
(1.7
|
)
|
|
1.4
|
|
|
—
|
|
|
Domestic production activity
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
Difference in U.S. statutory tax rate and foreign
country effective tax rate
|
2.1
|
|
|
2.3
|
|
|
(1.4
|
)
|
|
Rate change
|
(0.1
|
)
|
|
(2.5
|
)
|
|
(5.3
|
)
|
|
Tax credits
|
(0.7
|
)
|
|
(7.9
|
)
|
|
(0.5
|
)
|
|
Change in reserve for unrecognized tax benefits
|
2.7
|
|
|
(1.7
|
)
|
|
(0.7
|
)
|
|
Change in valuation allowance
|
0.1
|
|
|
2.7
|
|
|
(1.2
|
)
|
|
Other
|
(0.3
|
)
|
|
(1.1
|
)
|
|
—
|
|
|
Total
|
26.1
|
|
%
|
25.7
|
|
%
|
26.9
|
|
%
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Deferred tax liabilities:
|
|
|
|
||||
PP&E and identified intangible assets
|
$
|
290,427
|
|
|
$
|
217,353
|
|
Inventories
|
81,469
|
|
|
69,464
|
|
||
Insurance claims and losses
|
31,642
|
|
|
29,964
|
|
||
Business combinations
|
47,450
|
|
|
46,779
|
|
||
Incentive compensation
|
12,860
|
|
|
11,838
|
|
||
Operating lease assets
|
68,846
|
|
|
—
|
|
||
Other
|
14,267
|
|
|
11,596
|
|
||
Total deferred tax liabilities
|
546,961
|
|
|
386,994
|
|
||
Deferred tax assets:
|
|
|
|
||||
Net operating losses
|
3,120
|
|
|
2,923
|
|
||
Foreign net operating losses
|
50,806
|
|
|
38,531
|
|
||
Credit carry forwards
|
15,575
|
|
|
14,461
|
|
||
Allowance for doubtful accounts
|
5,429
|
|
|
6,788
|
|
||
Accrued liabilities
|
51,148
|
|
|
60,572
|
|
||
Workers compensation
|
36,147
|
|
|
25,297
|
|
||
Pension and other postretirement benefits
|
29,429
|
|
|
28,266
|
|
||
Operating lease liabilities
|
68,846
|
|
|
—
|
|
||
Other
|
22,502
|
|
|
3,133
|
|
||
Total deferred tax assets
|
283,002
|
|
|
179,971
|
|
||
Valuation allowance
|
(33,522
|
)
|
|
(26,150
|
)
|
||
Net deferred tax assets
|
249,480
|
|
|
153,821
|
|
||
Net deferred tax liabilities
|
$
|
297,481
|
|
|
$
|
233,173
|
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Unrecognized tax benefits, beginning of year
|
$
|
12,412
|
|
|
$
|
11,866
|
|
Increase as a result of tax positions taken during the current year
|
—
|
|
|
261
|
|
||
Increase as a result of tax positions taken during prior years
|
597
|
|
|
1,152
|
|
||
Decrease for lapse in statute of limitations
|
(233
|
)
|
|
(867
|
)
|
||
Unrecognized tax benefits, end of year
|
$
|
12,776
|
|
|
$
|
12,412
|
|
|
Fifty-Two Weeks Ended December 29, 2019
|
||||||||||
|
Domestic
|
|
Export
|
|
Net Sales
|
||||||
|
(In thousands)
|
||||||||||
U.S.
|
$
|
7,353,925
|
|
|
$
|
282,791
|
|
|
$
|
7,636,716
|
|
U.K. and Europe
|
2,105,578
|
|
|
278,215
|
|
|
2,383,793
|
|
|||
Mexico
|
1,388,710
|
|
|
—
|
|
|
1,388,710
|
|
|||
Net Sales
|
$
|
10,848,213
|
|
|
$
|
561,006
|
|
|
$
|
11,409,219
|
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Balance, beginning of year
|
$
|
33,328
|
|
|
$
|
36,607
|
|
Revenue recognized
|
(57,074
|
)
|
|
(59,332
|
)
|
||
Cash received, excluding amounts recognized as revenue during the period
|
65,516
|
|
|
56,053
|
|
||
Balance, end of year
|
$
|
41,770
|
|
|
$
|
33,328
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Change in projected benefit obligation:
|
(In thousands)
|
||||||||||||||
Projected benefit obligation, beginning of year
|
$
|
157,619
|
|
|
$
|
178,247
|
|
|
$
|
1,462
|
|
|
$
|
1,603
|
|
Interest cost
|
6,673
|
|
|
5,463
|
|
|
52
|
|
|
46
|
|
||||
Actuarial losses (gains)
|
20,729
|
|
|
(15,635
|
)
|
|
132
|
|
|
(72
|
)
|
||||
Benefits paid
|
(8,288
|
)
|
|
(10,456
|
)
|
|
—
|
|
|
—
|
|
||||
Settlements(a)
|
(10,076
|
)
|
|
—
|
|
|
(119
|
)
|
|
(115
|
)
|
||||
Other
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Tulip acquisition
|
198,417
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Currency translation loss
|
3,984
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Projected benefit obligation, end of year
|
$
|
369,066
|
|
|
$
|
157,619
|
|
|
$
|
1,527
|
|
|
$
|
1,462
|
|
(a)
|
A settlement is a transaction that is an irrevocable action, relieves the employer or the plan of primary responsibility for a pension or postretirement obligation and eliminates significant risks related to the obligation and the assets used to affect the settlement. A settlement can be triggered when a plan pays lump sums totaling more than the sum of the plan’s interest cost and service cost. The GK Pension Plan met this threshold in 2019 and the Retiree Life Plan met this threshold in 2019 and 2018.
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Change in plan assets:
|
(In thousands)
|
||||||||||||||
Fair value of plan assets, beginning of year
|
$
|
102,414
|
|
|
$
|
112,570
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
18,904
|
|
|
(10,881
|
)
|
|
—
|
|
|
—
|
|
||||
Contributions by employer
|
8,295
|
|
|
11,181
|
|
|
119
|
|
|
115
|
|
||||
Benefits paid
|
(8,288
|
)
|
|
(10,456
|
)
|
|
—
|
|
|
—
|
|
||||
Settlements
|
(10,076
|
)
|
|
—
|
|
|
(119
|
)
|
|
(115
|
)
|
||||
Other
|
(70
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Tulip acquisition
|
179,702
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Currency translation gain
|
3,708
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets, end of year
|
$
|
294,589
|
|
|
$
|
102,414
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Funded status:
|
(In thousands)
|
||||||||||||||
Unfunded benefit obligation, end of year
|
$
|
(74,477
|
)
|
|
$
|
(55,205
|
)
|
|
$
|
(1,527
|
)
|
|
$
|
(1,462
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Amounts recognized in accumulated other
comprehensive loss at end of year:
|
(In thousands)
|
||||||||||||||
Net actuarial loss (gain)
|
$
|
58,239
|
|
|
$
|
54,343
|
|
|
$
|
91
|
|
|
$
|
(34
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Interest cost
|
$
|
6,673
|
|
|
$
|
5,463
|
|
|
$
|
5,571
|
|
|
$
|
52
|
|
|
$
|
46
|
|
|
$
|
51
|
|
Estimated return on plan assets
|
(6,921
|
)
|
|
(6,065
|
)
|
|
(5,254
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlement loss (gain)
|
3,538
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(3
|
)
|
|
2
|
|
||||||
Other
|
(62
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of net loss
|
1,313
|
|
|
1,203
|
|
|
932
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net cost
|
$
|
4,541
|
|
|
$
|
601
|
|
|
$
|
1,249
|
|
|
$
|
59
|
|
|
$
|
43
|
|
|
$
|
53
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||
Benefit obligation:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
2.56
|
%
|
|
4.40
|
%
|
|
3.69
|
%
|
|
2.77
|
%
|
|
4.07
|
%
|
|
3.39
|
%
|
Net pension and other postretirement cost:
|
|
|
|
||||||||||||||
Discount rate
|
3.10
|
%
|
|
3.69
|
%
|
|
4.32
|
%
|
|
4.07
|
%
|
|
3.39
|
%
|
|
3.81
|
%
|
Expected return on plan assets
|
4.62
|
%
|
|
5.50
|
%
|
|
5.50
|
%
|
|
NA
|
|
|
NA
|
|
|
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
|
$
|
(9,920
|
)
|
|
$
|
10,444
|
|
|
2019
|
|
2018
|
||
Cash and cash equivalents
|
4
|
%
|
|
—
|
%
|
Pooled separate accounts for the Union Plan(a):
|
|
|
|
||
Equity securities
|
2
|
%
|
|
4
|
%
|
Fixed income securities
|
2
|
%
|
|
5
|
%
|
Pooled separate accounts and common collective trust funds for the GK Pension Plan(a):
|
|
|
|
||
Equity securities
|
20
|
%
|
|
45
|
%
|
Fixed income securities
|
12
|
%
|
|
41
|
%
|
Real estate
|
2
|
%
|
|
5
|
%
|
Pooled separate accounts for the U.K. Plans(a):
|
|
|
|
||
Equity securities
|
40
|
%
|
|
—
|
%
|
Fixed income funds
|
18
|
%
|
|
—
|
%
|
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 Securities and Exchange Commission. 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.
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
|
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
|
$
|
11,582
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,582
|
|
|
$
|
110
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
110
|
|
PSAs for the Union Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Large U.S. equity funds(d)
|
—
|
|
|
3,071
|
|
|
—
|
|
|
3,071
|
|
|
—
|
|
|
2,491
|
|
|
—
|
|
|
2,491
|
|
||||||||
Small/Mid U.S. equity funds(e)
|
—
|
|
|
372
|
|
|
—
|
|
|
372
|
|
|
—
|
|
|
292
|
|
|
—
|
|
|
292
|
|
||||||||
International equity funds(f)
|
—
|
|
|
1,878
|
|
|
—
|
|
|
1,878
|
|
|
—
|
|
|
1,489
|
|
|
—
|
|
|
1,489
|
|
||||||||
Fixed income funds(g)
|
—
|
|
|
4,452
|
|
|
—
|
|
|
4,452
|
|
|
—
|
|
|
4,763
|
|
|
—
|
|
|
4,763
|
|
||||||||
PSAs and CCTs for the GK Pension Plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Large U.S. equity funds(d)
|
—
|
|
|
20,378
|
|
|
—
|
|
|
20,378
|
|
|
—
|
|
|
17,351
|
|
|
—
|
|
|
17,351
|
|
||||||||
Small/Mid U.S. equity funds(e)
|
—
|
|
|
12,495
|
|
|
—
|
|
|
12,495
|
|
|
—
|
|
|
5,880
|
|
|
—
|
|
|
5,880
|
|
||||||||
International equity funds(f)
|
—
|
|
|
25,149
|
|
|
—
|
|
|
25,149
|
|
|
—
|
|
|
22,516
|
|
|
—
|
|
|
22,516
|
|
||||||||
Fixed income funds(g)
|
—
|
|
|
35,627
|
|
|
—
|
|
|
35,627
|
|
|
—
|
|
|
42,217
|
|
|
—
|
|
|
42,217
|
|
||||||||
Real estate(h)
|
—
|
|
|
5,613
|
|
|
—
|
|
|
5,613
|
|
|
—
|
|
|
5,305
|
|
|
—
|
|
|
5,305
|
|
||||||||
PSAs for the U.K. Plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Large U.S. equity funds(d)
|
—
|
|
|
17,756
|
|
|
—
|
|
|
17,756
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
International equity funds(f)
|
—
|
|
|
102,494
|
|
|
—
|
|
|
102,494
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Fixed income funds(e)
|
—
|
|
|
53,722
|
|
|
—
|
|
|
53,722
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total assets
|
$
|
11,582
|
|
|
$
|
283,007
|
|
|
$
|
—
|
|
|
$
|
294,589
|
|
|
$
|
110
|
|
|
$
|
102,304
|
|
|
$
|
—
|
|
|
$
|
102,414
|
|
(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.
|
(h)
|
This category is comprised of investment options that invest in real estate investment trusts or private equity pools that own real estate. These long-term investments are primarily in office buildings, industrial parks, apartments or retail complexes. These investment options typically carry more risk, including liquidity risk, than fixed income investment options.
|
|
Pension Benefits
|
|
Other
Benefits
|
||||
|
(In thousands)
|
||||||
2020
|
$
|
21,271
|
|
|
$
|
158
|
|
2021
|
18,373
|
|
|
155
|
|
||
2022
|
17,985
|
|
|
150
|
|
||
2023
|
18,138
|
|
|
144
|
|
||
2024
|
18,128
|
|
|
137
|
|
||
2025-2029
|
87,922
|
|
|
565
|
|
||
Total
|
$
|
181,817
|
|
|
$
|
1,309
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Net actuarial loss (gain), beginning of year
|
$
|
54,343
|
|
|
$
|
54,235
|
|
|
$
|
46,494
|
|
|
$
|
(34
|
)
|
|
$
|
35
|
|
|
$
|
(31
|
)
|
Amortization
|
(1,313
|
)
|
|
(1,203
|
)
|
|
(932
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Settlement adjustments
|
(3,538
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
3
|
|
|
(2
|
)
|
||||||
Actuarial loss (gain)
|
20,729
|
|
|
(15,635
|
)
|
|
15,745
|
|
|
132
|
|
|
(72
|
)
|
|
68
|
|
||||||
Asset loss (gain)
|
(11,982
|
)
|
|
16,946
|
|
|
(7,072
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net actuarial loss (gain), end of year
|
$
|
58,239
|
|
|
$
|
54,343
|
|
|
$
|
54,235
|
|
|
$
|
91
|
|
|
$
|
(34
|
)
|
|
$
|
35
|
|
|
2019(a)
|
||||||||||||||||||
|
Losses Related to Foreign Currency Translation
|
|
Unrealized Losses on Derivative Financial Instruments Classified as Cash Flow Hedges
|
|
Losses Related to Pension and Other Postretirement Benefits
|
|
Unrealized Holding Losses on Available-for-Sale Securities
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Balance, beginning of year
|
$
|
(55,770
|
)
|
|
$
|
(683
|
)
|
|
$
|
(71,463
|
)
|
|
$
|
82
|
|
|
$
|
(127,834
|
)
|
Other comprehensive income (loss)
before reclassifications |
54,662
|
|
|
(2,052
|
)
|
|
(1,145
|
)
|
|
386
|
|
|
51,851
|
|
|||||
Amounts reclassified from
accumulated other comprehensive
loss to net income
|
—
|
|
|
383
|
|
|
993
|
|
|
(468
|
)
|
|
908
|
|
|||||
Currency translation
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
|||||
Net current year other comprehensive income (loss)
|
54,662
|
|
|
(1,723
|
)
|
|
(152
|
)
|
|
(82
|
)
|
|
52,705
|
|
|||||
Balance, end of year
|
$
|
(1,108
|
)
|
|
$
|
(2,406
|
)
|
|
$
|
(71,615
|
)
|
|
$
|
—
|
|
|
$
|
(75,129
|
)
|
|
2018(a)
|
|||||||||||||
|
Losses Related to Foreign Currency Translation
|
|
Unrealized Gains (Losses) on Derivative Financial Instruments Classified as Cash Flow Hedges
|
|
Losses Related to Pension and Other Postretirement Benefits
|
|
Unrealized Holding Gains on Available-for-Sale Securities
|
|
Total
|
|||||
|
(In thousands)
|
|||||||||||||
Balance, beginning of year
|
42,081
|
|
|
(1,848
|
)
|
|
(71,434
|
)
|
|
61
|
|
|
(31,140
|
)
|
Other comprehensive income (loss)
before reclassifications |
(97,851
|
)
|
|
829
|
|
|
(939
|
)
|
|
867
|
|
|
(97,094
|
)
|
Amounts reclassified from accumulated
other comprehensive loss to net income |
—
|
|
|
348
|
|
|
910
|
|
|
(846
|
)
|
|
412
|
|
Currency translation
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
Net current year other comprehensive
income (loss) |
(97,851
|
)
|
|
1,165
|
|
|
(29
|
)
|
|
21
|
|
|
(96,694
|
)
|
Balance, end of year
|
(55,770
|
)
|
|
(683
|
)
|
|
(71,463
|
)
|
|
82
|
|
|
(127,834
|
)
|
(a)
|
All amounts are net of tax. Amounts in parentheses indicate debits.
|
Details about Accumulated Other Comprehensive Loss Components
|
Amount Reclassified from Accumulated Other Comprehensive Loss(a)
|
|
Affected Line Item in the Consolidated and Combined Statements of Income
|
||||||
2019
|
|
2018
|
|
||||||
|
(In thousands)
|
|
|
||||||
Realized loss on settlement of
derivative financial instruments
classified as cash flow hedges
|
$
|
(383
|
)
|
|
$
|
(348
|
)
|
|
Cost of sales
|
Realized gain on sale of securities
|
619
|
|
|
1,118
|
|
|
Interest income
|
||
Amortization of pension and other
postretirement plan actuarial losses: |
|
|
|
|
|
||||
Union Plan(c)
|
(73
|
)
|
|
(49
|
)
|
|
Miscellaneous, net
|
||
Legacy Gold Kist Plans(b)(c)
|
(1,240
|
)
|
|
(1,154
|
)
|
|
Miscellaneous, net
|
||
Total before tax
|
(1,077
|
)
|
|
(433
|
)
|
|
|
||
Tax expense
|
169
|
|
|
21
|
|
|
|
||
Total reclassification for the period
|
$
|
(908
|
)
|
|
$
|
(412
|
)
|
|
|
(a)
|
Amounts in parentheses represent debits to results of operations.
|
(b)
|
The Company sponsors the GK Pension Plan, the SERP Plan, the Directors’ Emeriti Plan and the Retiree Life Plan (collectively, the “Legacy Gold Kist Plans”).
|
(c)
|
These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See “Note 15. Pension and Other Postretirement Benefits” to the Consolidated and Combined Financial Statements.
|
Award Type
|
|
Benefit Plan
|
|
Awards Granted
|
|
Grant Date
|
|
Intended Settlement Method
|
|
Grant Date Fair Value per Award
|
|
Milestone Date Fair Value per Award
|
|
Vesting Condition
|
|
Vesting Date
|
|
Awards Forfeited to Date
|
||
RSU
|
|
LTIP
|
|
410,000
|
|
|
02/14/2018
|
|
Stock
|
|
25.59
|
|
NA
|
|
Service
|
|
01/01/2019
|
|
—
|
|
RSU
|
|
LTIP
|
|
163,764
|
|
|
03/01/2018
|
|
Stock
|
|
24.93
|
|
NA
|
|
Service
|
|
(a)
|
|
45,755
|
|
RSU
|
|
LTIP
|
|
250,351
|
|
|
03/01/2018
|
|
Stock
|
|
24.93
|
|
NA
|
|
Performance / Service
|
|
(b)
|
|
151,229
|
|
RSU
|
|
LTIP
|
|
33,174
|
|
|
03/01/2018
|
|
Cash
|
|
24.93
|
|
32.97
|
|
Performance / Service
|
|
(c)
|
|
—
|
|
RSU
|
|
LTIP
|
|
8,358
|
|
|
05/10/2018
|
|
Stock
|
|
21.54
|
|
NA
|
|
Service
|
|
(d)
|
|
—
|
|
RSU
|
|
LTIP
|
|
2,786
|
|
|
05/10/2018
|
|
Cash
|
|
21.54
|
|
26.86
|
|
Service
|
|
05/01/2019
|
|
—
|
|
RSU
|
|
LTIP
|
|
262,500
|
|
|
12/18/2018
|
|
Stock
|
|
16.06
|
|
NA
|
|
Service
|
|
07/01/2019
|
|
—
|
|
RSU
|
|
LTIP
|
|
396,763
|
|
|
01/07/2019
|
|
Stock
|
|
16.47
|
|
NA
|
|
Performance / Service
|
|
(e)
|
|
92,075
|
|
RSU
|
|
LTIP
|
|
109,654
|
|
|
01/07/2019
|
|
Cash
|
|
16.47
|
|
32.97
|
|
Performance / Service
|
|
(f)
|
|
—
|
|
RSU
|
|
LTIP
|
|
200,000
|
|
|
04/30/2019
|
|
Stock
|
|
26.91
|
|
NA
|
|
Service
|
|
07/01/2020
|
|
—
|
|
RSU
|
|
LTIP
|
|
11,170
|
|
|
05/24/2019
|
|
Stock
|
|
27.86
|
|
NA
|
|
Service
|
|
(d)
|
|
—
|
|
RSU
|
|
LTIP
|
|
470,000
|
|
|
04/30/2019
|
|
Stock
|
|
26.91
|
|
NA
|
|
Performance
|
|
(g)
|
|
—
|
|
(a)
|
The restricted stock units vest in ratable tranches on December 31, 2018, December 31, 2019 and December 31, 2020. Expected compensation cost related to these units totals $2.9 million based on a closing stock price for the Company’s common stock of $24.93 per share on March 1, 2018. Compensation cost will be amortized to profit/loss over the remaining vesting period.
|
(b)
|
The restricted stock units vest in ratable tranches on December 31, 2019, December 31, 2020 and December 31, 2021. Expected compensation cost related to these units totals $2.5 million based on a closing stock price for the Company’s common stock of $24.93 per share on March 1, 2018. Compensation cost will be amortized to profit/loss over the remaining vesting period.
|
(c)
|
The restricted stock units vest in ratable tranches on December 31, 2019, December 31, 2020 and December 31, 2021. Expected compensation cost related to these units totals $1.0 million based on a closing stock price for the Company's common stock of $32.97 per share on December 29, 2019. Compensation cost will be amortized to profit/loss over the remaining vesting period.
|
(d)
|
These restricted stock units were granted to the non-employees who currently serve on the Company's Board of Directors. Each participating director's units will vest upon his departure from the Company's Board of Directors. Compensation cost was recognized in profit/loss upon the grant date.
|
(e)
|
If performance conditions related to the Company's 2019 operating results are satisfied, the restricted stock units vest in ratable tranches on December 31, 2020, December 31, 2021 and December 31, 2022. Expected compensation cost related to these units totals $5.0 million based on a closing stock price for the Company's common stock of $16.47 per share on January 7, 2019. Compensation cost will be amortized to profit/loss upon satisfaction of the performance conditions over the remaining vesting period.
|
(f)
|
If performance conditions related to the Company's 2019 operating results are satisfied, the restricted stock units vest in ratable tranches on December 31, 2020, December 31, 2021 and December 31, 2022. Expected compensation cost related to these units totals $3.6 million based on a closing stock price for the Company's common stock of $32.97 per share on December 29, 2019. Compensation cost will be amortized to profit/loss upon satisfaction of the performance conditions over the remaining vesting period.
|
(g)
|
If performance conditions related to the Company's 2019 free cash flow results are satisfied, the restricted stock units vest in ratable tranches on July 1, 2022, July 1 2023, and July 1, 2024. Expected compensation cost related to these units totals $6.3 million based on a closing price for the Company's common stock of $26.91 per share on April 30, 2019. Compensation cost will be amortized to profit/loss upon satisfaction of the performance conditions over the remaining vesting period. Currently, management assumes a 50% probability that the performance conditions will be satisfied.
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Equity-based awards compensation cost:
|
|
|
|
|
|
||||||
Cost of sales
|
$
|
461
|
|
|
$
|
389
|
|
|
$
|
256
|
|
Selling, general and administrative expense
|
9,671
|
|
|
12,764
|
|
|
2,763
|
|
|||
Total cost
|
10,132
|
|
|
13,153
|
|
|
3,019
|
|
|||
Income tax benefit
|
2,466
|
|
|
3,202
|
|
|
1,006
|
|
|||
Net cost
|
$
|
7,666
|
|
|
$
|
9,951
|
|
|
$
|
2,013
|
|
|
|
|
|
|
|
||||||
Liability-based awards compensation cost:
|
|
|
|
|
|
||||||
Selling, general and administrative expense
|
$
|
671
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Income tax benefit
|
163
|
|
|
—
|
|
|
—
|
|
|||
Net cost
|
$
|
508
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Number
|
|
Weighted Average Milestone Date Fair Value(a)
|
|
Number
|
|
Weighted Average Milestone Date Fair Value(a)
|
|
Number
|
|
Weighted Average Milestone Date Fair Value(a)
|
|||||||||
|
(In thousands, except weighted average fair values)
|
|||||||||||||||||||
Equity-based RSUs:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Outstanding at beginning of period
|
1,069
|
|
|
$
|
22.97
|
|
|
389
|
|
|
$
|
18.39
|
|
|
906
|
|
|
$
|
20.00
|
|
Transferred to liability-based awards
|
(36
|
)
|
|
24.67
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Granted
|
843
|
|
|
22.01
|
|
|
1,114
|
|
|
23.05
|
|
|
461
|
|
|
18.72
|
|
|||
Vested
|
(723
|
)
|
|
22.08
|
|
|
—
|
|
|
—
|
|
|
(714
|
)
|
|
18.09
|
|
|||
Forfeited
|
(227
|
)
|
|
21.51
|
|
|
(434
|
)
|
|
19.06
|
|
|
(264
|
)
|
|
25.33
|
|
|||
Outstanding at end of period
|
926
|
|
|
$
|
24.04
|
|
|
1,069
|
|
|
$
|
22.97
|
|
|
389
|
|
|
$
|
18.39
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Number
|
|
Weighted Average Milestone Date Fair Value(a)
|
|
Number
|
|
Weighted Average Milestone Date Fair Value(a)
|
|
Number
|
|
Weighted Average Milestone Date Fair Value(a)
|
|||||||||
|
(In thousands, except weighted average fair values)
|
|||||||||||||||||||
Liability-based RSUs:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Outstanding at beginning of period
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Transferred from equity-based awards
|
36
|
|
|
14.77
|
|
|
|
|
|
|
|
|
|
|||||||
Granted
|
110
|
|
|
16.47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Vested
|
(3
|
)
|
|
26.86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Outstanding at end of period
|
143
|
|
|
$
|
32.97
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
(a)
|
The milestone date fair value is either the closing price of the Company’s common stock on the grant date for equity-based awards or the closing price of a share of the Company's common stock on the respective milestone date for cash-based liability-based awards (i.e., grant date, vesting date, forfeiture date or financial reporting date).
|
Type of Cost
|
40 North Foods
|
|
GNP
|
|
Total Estimated Amount Expected to be Incurred
|
||||||
|
(In thousands)
|
||||||||||
Employee termination benefits
|
$
|
449
|
|
|
$
|
4,224
|
|
|
$
|
4,673
|
|
Inventory adjustments
|
—
|
|
|
472
|
|
|
472
|
|
|||
Asset impairments
|
103
|
|
|
781
|
|
|
884
|
|
|||
Other, net(a)
|
18
|
|
|
736
|
|
|
754
|
|
|||
|
$
|
570
|
|
|
$
|
6,213
|
|
|
$
|
6,783
|
|
(a)
|
Comprised of other costs directly related to the restructuring initiatives, including prepaid software impairment, St. Cloud, Minnesota office lease costs, Luverne, Minnesota plant closure costs, and Boulder, Colorado office lease costs.
|
|
Expenses (Income)
|
|
Cash Outlays (Receipts)
|
||||
|
(In thousands)
|
||||||
40 North Foods - Other, net
|
$
|
(84
|
)
|
|
$
|
1
|
|
GNP - Employee termination benefits
|
—
|
|
|
76
|
|
||
|
$
|
(84
|
)
|
|
$
|
77
|
|
|
40 North Foods
|
|
GNP
|
||||||||||||||||||||||||
|
Employee Termination Benefits
|
|
Other,
Net |
|
Total
|
|
Employee Termination Benefits
|
|
Inventory
Impairments |
|
Other,
Net |
|
Total
|
||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||
Restructuring charges incurred
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,381
|
|
|
$
|
699
|
|
|
$
|
752
|
|
|
$
|
4,832
|
|
Cash payments and disposals
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,581
|
)
|
|
—
|
|
|
—
|
|
|
(2,581
|
)
|
|||||||
Liability or reserve as of December 31, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
800
|
|
|
699
|
|
|
752
|
|
|
2,251
|
|
|||||||
Restructuring charges incurred
|
449
|
|
|
150
|
|
|
599
|
|
|
936
|
|
|
(227
|
)
|
|
(17
|
)
|
|
692
|
|
|||||||
Restructuring income recognized
|
—
|
|
|
(35
|
)
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Cash payments and disposals
|
(449
|
)
|
|
(65
|
)
|
|
(514
|
)
|
|
(1,500
|
)
|
|
(472
|
)
|
|
(735
|
)
|
|
(2,707
|
)
|
|||||||
Cash received
|
—
|
|
|
36
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Liability or reserve as of December 30, 2018
|
—
|
|
|
86
|
|
|
86
|
|
|
236
|
|
|
—
|
|
|
—
|
|
|
236
|
|
|||||||
Restructuring income recognized
|
—
|
|
|
(84
|
)
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Cash payments and disposals
|
—
|
|
|
(85
|
)
|
|
(85
|
)
|
|
(76
|
)
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
|||||||
Cash received
|
—
|
|
|
84
|
|
|
84
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Liability or reserve as of December 29, 2019
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
160
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
160
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Sales to related parties:
|
|
|
|
|
|
||||||
JBS USA Food Company(a)
|
$
|
14,108
|
|
|
$
|
13,843
|
|
|
$
|
15,289
|
|
JBS Five Rivers
|
—
|
|
|
7,096
|
|
|
31,004
|
|
|||
JBS Global (UK) Ltd.
|
141
|
|
|
—
|
|
|
44
|
|
|||
JBS Chile Ltda.
|
482
|
|
|
60
|
|
|
178
|
|
|||
J&F Investimentos Ltd.
|
—
|
|
|
—
|
|
|
104
|
|
|||
Combo, Mercado de Congelados
|
207
|
|
|
159
|
|
|
—
|
|
|||
Seara International Ltd.
|
—
|
|
|
—
|
|
|
104
|
|
|||
Total sales to related parties
|
$
|
14,938
|
|
|
$
|
21,158
|
|
|
$
|
46,723
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Cost of goods purchased from related parties:
|
|
|
|
|
|
||||||
JBS USA Food Company(a)
|
$
|
134,790
|
|
|
$
|
117,596
|
|
|
$
|
101,685
|
|
Seara Meats B.V.
|
22,797
|
|
|
36,223
|
|
|
13,949
|
|
|||
JBS Aves Ltda.
|
—
|
|
|
1,123
|
|
|
—
|
|
|||
Seara Internatonal Ltd.
|
—
|
|
|
—
|
|
|
11,236
|
|
|||
JBS Toledo NV
|
307
|
|
|
445
|
|
|
231
|
|
|||
JBS Global (UK) Ltd.
|
170
|
|
|
21
|
|
|
—
|
|
|||
Total cost of goods purchased from related parties
|
$
|
158,064
|
|
|
$
|
155,408
|
|
|
$
|
127,101
|
|
|
|
|
|
|
|
||||||
Expenditures paid by related parties:
|
|
|
|
|
|
||||||
JBS USA Food Company(b)
|
$
|
32,161
|
|
|
$
|
62,189
|
|
|
$
|
40,313
|
|
JBS S.A.
|
—
|
|
|
—
|
|
|
3,777
|
|
|||
JBS Chile Ltda.
|
6
|
|
|
33
|
|
|
—
|
|
|||
Seara Food Europe Holdings
|
77
|
|
|
—
|
|
|
—
|
|
|||
Seara Alimentos
|
—
|
|
|
—
|
|
|
64
|
|
|||
Total expenditures paid by related parties
|
$
|
32,244
|
|
|
$
|
62,222
|
|
|
$
|
44,154
|
|
|
|
|
|
|
|
||||||
Expenditures paid on behalf of related parties:
|
|
|
|
|
|
||||||
JBS USA Food Company(b)
|
$
|
9,103
|
|
|
$
|
9,192
|
|
|
$
|
5,376
|
|
JBS S.A.
|
—
|
|
|
170
|
|
|
5
|
|
|||
Seara International Ltd.
|
—
|
|
|
45
|
|
|
—
|
|
|||
Seara Meats B.V.
|
—
|
|
|
—
|
|
|
12
|
|
|||
Rigamonti Salumificio S.P.A.
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total expenditures paid on behalf of related parties
|
$
|
9,103
|
|
|
$
|
9,407
|
|
|
$
|
5,393
|
|
|
|
|
|
|
|
||||||
Other related party transactions:
|
|
|
|
|
|
||||||
Capital contribution (distribution) under tax sharing agreement(c)
|
$
|
—
|
|
|
$
|
(525
|
)
|
|
$
|
5,558
|
|
Total other related party transactions
|
$
|
—
|
|
|
$
|
(525
|
)
|
|
$
|
5,558
|
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Accounts receivable from related parties:
|
|
|
|
||||
JBS USA Food Company(a)
|
$
|
643
|
|
|
$
|
1,236
|
|
JBS Chile Ltda.
|
301
|
|
|
—
|
|
||
Combo, Mercado de Congelados
|
—
|
|
|
79
|
|
||
Seara International Ltda.
|
—
|
|
|
16
|
|
||
Total accounts receivable from related parties
|
$
|
944
|
|
|
$
|
1,331
|
|
|
|
|
|
||||
Accounts payable to related parties:
|
|
|
|
||||
JBS USA Food Company(a)
|
$
|
2,826
|
|
|
$
|
5,121
|
|
JBS Global UK Ltd
|
5
|
|
|
—
|
|
||
Seara Meats B.V.
|
988
|
|
|
2,142
|
|
||
JBS Chile Ltda.
|
—
|
|
|
6
|
|
||
Total accounts payable to related parties
|
$
|
3,819
|
|
|
$
|
7,269
|
|
(a)
|
The Company routinely execute transactions to both purchase products from JBS USA Food Company (“JBS USA”) and sell products to them. As of December 29, 2019 and December 30, 2018, the outstanding payable to JBS USA was $2.8 million and $5.1 million, respectively. As of December 29, 2019 and December 30, 2018, the outstanding receivable from JBS USA was $0.6 million and $1.2 million, respectively. As of December 29, 2019, approximately $0.9 million of goods from JBS USA were in transit and not reflected on our Consolidated Balance Sheets.
|
(b)
|
The Company has an agreement with JBS USA to allocate costs associated with JBS USA’s procurement of SAP licenses and maintenance services for both 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, 2020.
|
(c)
|
The Company entered into a tax sharing agreement during 2014 with JBS USA Holdings effective for tax years starting in 2010. The net tax payable for tax year 2018 was accrued in 2018 and was paid in 2019. The net tax receivable for tax year 2017 was accrued in 2017 and was paid in 2018. The net tax receivable for tax year 2016 was accrued in 2016 and paid in January 2017.
|
|
December 29, 2019(a)
|
|
December 30,2018(b)
|
|
December 31, 2017(c)
|
||||||
|
(In thousands)
|
||||||||||
Net sales
|
|
|
|
|
|
||||||
U.S.
|
$
|
7,636,716
|
|
|
$
|
7,425,661
|
|
|
$
|
7,443,222
|
|
U.K. and Europe
|
2,383,793
|
|
|
2,148,666
|
|
|
1,996,319
|
|
|||
Mexico
|
1,388,710
|
|
|
1,363,457
|
|
|
1,328,322
|
|
|||
Total
|
$
|
11,409,219
|
|
|
$
|
10,937,784
|
|
|
$
|
10,767,863
|
|
(a)
|
For the year 2019, the United States reportable segment had intercompany sales to the Mexico reportable segment of $188.9 million. These sales consisted of fresh products, prepared products and grain.
|
(b)
|
For the year 2018, the United States reportable segment had intercompany sales to the Mexico reportable segment of $100.7 million. These sales consisted of fresh products, prepared products and grain.
|
(c)
|
For the year 2017, the United States reportable segment had intercompany sales to the Mexico reportable segment of $84.3 million. These sales consisted of fresh products, prepared products and grain.
|
|
December 29, 2019
|
|
December 30, 2018
|
|
December 31, 2017
|
||||||
|
(In thousands)
|
||||||||||
Operating income
|
|
|
|
|
|
||||||
U.S.
|
$
|
487,275
|
|
|
$
|
291,381
|
|
|
$
|
841,492
|
|
U.K. and Europe
|
79,182
|
|
|
84,524
|
|
|
77,105
|
|
|||
Mexico
|
124,015
|
|
|
119,649
|
|
|
153,631
|
|
|||
Elimination
|
96
|
|
|
132
|
|
|
94
|
|
|||
Total operating income
|
690,568
|
|
|
495,686
|
|
|
1,072,322
|
|
|||
Interest expense, net of capitalized interest
|
132,630
|
|
|
162,812
|
|
|
107,183
|
|
|||
Interest income
|
(14,277
|
)
|
|
(13,811
|
)
|
|
(7,730
|
)
|
|||
Foreign currency transaction loss (gain)
|
6,917
|
|
|
17,160
|
|
|
(2,659
|
)
|
|||
Gain on bargain purchase
|
(56,880
|
)
|
|
—
|
|
|
—
|
|
|||
Miscellaneous, net
|
4,633
|
|
|
(2,702
|
)
|
|
(6,538
|
)
|
|||
Income before income taxes
|
617,545
|
|
|
332,227
|
|
|
982,066
|
|
|||
Income tax expense
|
161,009
|
|
|
85,423
|
|
|
263,899
|
|
|||
Net income
|
$
|
456,536
|
|
|
$
|
246,804
|
|
|
$
|
718,167
|
|
|
December 29, 2019
|
|
December 30, 2018
|
|
December 31, 2017
|
||||||
|
(In thousands)
|
||||||||||
Depreciation and amortization:
|
|
|
|
|
|
||||||
U.S.
|
$
|
207,584
|
|
|
$
|
196,079
|
|
|
$
|
195,259
|
|
U.K. and Europe
|
60,499
|
|
|
50,586
|
|
|
49,562
|
|
|||
Mexico
|
19,147
|
|
|
27,423
|
|
|
27,003
|
|
|||
Total
|
$
|
287,230
|
|
|
$
|
274,088
|
|
|
$
|
271,824
|
|
|
December 29, 2019
|
|
December 30, 2018
|
|
December 31, 2017
|
||||||
|
(In thousands)
|
||||||||||
Capital expenditures:
|
|
|
|
|
|
||||||
U.S.
|
$
|
269,609
|
|
|
$
|
257,913
|
|
|
$
|
258,495
|
|
U.K. and Europe
|
58,795
|
|
|
58,334
|
|
|
52,349
|
|
|||
Mexico
|
19,716
|
|
|
32,419
|
|
|
29,028
|
|
|||
Total
|
$
|
348,120
|
|
|
$
|
348,666
|
|
|
$
|
339,872
|
|
|
December 29, 2019
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Total assets:
|
|
|
|
||||
U.S.
|
$
|
3,364,171
|
|
|
$
|
3,067,248
|
|
U.K. and Europe
|
2,824,382
|
|
|
1,986,938
|
|
||
Mexico
|
913,811
|
|
|
877,016
|
|
||
Total
|
$
|
7,102,364
|
|
|
$
|
5,931,202
|
|
|
December 29, 2019
|
|
December 30, 2018
|
|
December 31, 2017
|
||||||
|
(In thousands)
|
||||||||||
Net sales to customers by customer location:
|
|
|
|
|
|
||||||
U.S.
|
$
|
7,355,631
|
|
|
$
|
7,173,280
|
|
|
$
|
7,452,758
|
|
Mexico
|
1,437,081
|
|
|
1,411,727
|
|
|
1,019,170
|
|
|||
Asia
|
175,296
|
|
|
158,864
|
|
|
136,144
|
|
|||
Europe
|
2,363,017
|
|
|
2,134,822
|
|
|
2,000,843
|
|
|||
Canada, Caribbean and Central America
|
31,808
|
|
|
26,450
|
|
|
114,543
|
|
|||
Africa
|
28,400
|
|
|
21,286
|
|
|
29,905
|
|
|||
South America
|
17,384
|
|
|
10,704
|
|
|
13,279
|
|
|||
Pacific
|
602
|
|
|
651
|
|
|
1,221
|
|
|||
Total
|
$
|
11,409,219
|
|
|
$
|
10,937,784
|
|
|
$
|
10,767,863
|
|
|
December 29, 2019(b)
|
|
December 30, 2018
|
||||
|
(In thousands)
|
||||||
Long-lived assets(a):
|
|
|
|
||||
U.S.
|
$
|
1,789,530
|
|
|
$
|
1,506,217
|
|
U.K. and Europe
|
801,887
|
|
|
359,621
|
|
||
Mexico
|
302,157
|
|
|
295,864
|
|
||
Total
|
$
|
2,893,574
|
|
|
$
|
2,161,702
|
|
(a)
|
For this disclosure, we exclude financial instruments, deferred tax assets and intangible assets in accordance with ASC 280-10-50-41, Segment Reporting. Long-lived assets, as used in ASC 280-10-50-41, implies hard assets that cannot be readily removed.
|
(b)
|
For the year 2019 and going forward, operating leases assets are and will be included in long-lived assets for this disclosure.
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
U.S. chicken:
|
|
|
|
|
|
||||||
Fresh
|
$
|
6,214,954
|
|
|
$
|
5,959,458
|
|
|
$
|
5,700,503
|
|
Prepared
|
842,365
|
|
|
773,983
|
|
|
950,378
|
|
|||
Exports
|
282,791
|
|
|
258,732
|
|
|
213,595
|
|
|||
Total U.S. chicken
|
7,340,110
|
|
|
6,992,173
|
|
|
6,864,476
|
|
|||
U.K. and Europe chicken:
|
|
|
|
|
|
||||||
Fresh
|
918,852
|
|
|
925,124
|
|
|
846,575
|
|
|||
Prepared
|
817,292
|
|
|
865,864
|
|
|
792,284
|
|
|||
Exports
|
262,041
|
|
|
303,921
|
|
|
318,699
|
|
|||
Total U.K. and Europe chicken
|
1,998,185
|
|
|
2,094,909
|
|
|
1,957,558
|
|
|||
Mexico chicken:
|
|
|
|
|
|
||||||
Fresh
|
1,245,976
|
|
|
1,252,403
|
|
|
1,245,144
|
|
|||
Prepared
|
95,733
|
|
|
76,860
|
|
|
58,512
|
|
|||
Total Mexico chicken
|
1,341,709
|
|
|
1,329,263
|
|
|
1,303,656
|
|
|||
Total chicken
|
10,680,004
|
|
|
10,416,345
|
|
|
10,125,690
|
|
|||
U.K. and Europe pork:
|
|
|
|
|
|
||||||
Fresh
|
135,985
|
|
|
—
|
|
|
—
|
|
|||
Prepared
|
134,426
|
|
|
—
|
|
|
—
|
|
|||
Exports
|
16,174
|
|
|
—
|
|
|
—
|
|
|||
Total U.K. and Europe pork
|
286,585
|
|
|
—
|
|
|
—
|
|
|||
Other products:
|
|
|
|
|
|
||||||
U.S.
|
296,606
|
|
|
433,488
|
|
|
578,746
|
|
|||
U.K. and Europe
|
99,023
|
|
|
53,757
|
|
|
38,761
|
|
|||
Mexico
|
47,001
|
|
|
34,194
|
|
|
24,666
|
|
|||
Total other products
|
442,630
|
|
|
521,439
|
|
|
642,173
|
|
|||
Total net sales
|
$
|
11,409,219
|
|
|
$
|
10,937,784
|
|
|
$
|
10,767,863
|
|
2019
|
|
First
|
|
Second
|
|
Third
|
|
Fourth(a)
|
|
Year
|
||||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Net sales
|
|
$
|
2,724,675
|
|
|
$
|
2,843,085
|
|
|
$
|
2,777,970
|
|
|
$
|
3,063,489
|
|
|
$
|
11,409,219
|
|
Gross profit
|
|
218,939
|
|
|
367,864
|
|
|
282,197
|
|
|
201,394
|
|
|
1,070,394
|
|
|||||
Net income attributable to PPC
common stockholders
|
|
84,011
|
|
|
170,068
|
|
|
109,765
|
|
|
92,080
|
|
|
455,924
|
|
|||||
Net income per share amounts -
basic
|
|
0.34
|
|
|
0.68
|
|
|
0.44
|
|
|
0.37
|
|
|
1.83
|
|
|||||
Net income per share amounts -
diluted
|
|
0.34
|
|
|
0.68
|
|
|
0.44
|
|
|
0.37
|
|
|
1.83
|
|
|||||
Number of days in period
|
|
91
|
|
|
91
|
|
|
91
|
|
|
91
|
|
|
364
|
|
2018
|
|
First(b)
|
|
Second(c)
|
|
Third(d)
|
|
Fourth(e)
|
|
Year
|
||||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Net sales
|
|
$
|
2,746,678
|
|
|
$
|
2,836,713
|
|
|
$
|
2,697,604
|
|
|
$
|
2,656,789
|
|
|
$
|
10,937,784
|
|
Gross profit
|
|
287,665
|
|
|
274,222
|
|
|
169,741
|
|
|
111,848
|
|
|
843,476
|
|
|||||
Net income (loss) attributable to PPC
common stockholders |
|
119,418
|
|
|
106,541
|
|
|
29,310
|
|
|
(7,324
|
)
|
|
247,945
|
|
|||||
Net income (loss) per share amounts -
basic |
|
0.48
|
|
|
0.43
|
|
|
0.12
|
|
|
(0.03
|
)
|
|
1.00
|
|
|||||
Net income (loss) per share amounts -
diluted |
|
0.48
|
|
|
0.43
|
|
|
0.12
|
|
|
(0.03
|
)
|
|
1.00
|
|
|||||
Number of days in period
|
|
91
|
|
|
91
|
|
|
91
|
|
|
91
|
|
|
364
|
|
2017
|
|
First(f)
|
|
Second(g)
|
|
Third(h)
|
|
Fourth(i)
|
|
Year
|
||||||||||
|
|
(In thousands, except per share data)
|
||||||||||||||||||
Net sales
|
|
$
|
2,479,340
|
|
|
$
|
2,752,286
|
|
|
$
|
2,793,885
|
|
|
$
|
2,742,352
|
|
|
$
|
10,767,863
|
|
Gross profit
|
|
256,388
|
|
|
474,838
|
|
|
478,584
|
|
|
261,804
|
|
|
1,471,614
|
|
|||||
Net income attributable to PPC
common stockholders |
|
93,921
|
|
|
233,641
|
|
|
232,680
|
|
|
134,337
|
|
|
694,579
|
|
|||||
Net income per share amounts -
basic |
|
0.38
|
|
|
0.94
|
|
|
0.94
|
|
|
0.54
|
|
|
2.79
|
|
|||||
Net income per share amounts -
diluted |
|
0.38
|
|
|
0.94
|
|
|
0.93
|
|
|
0.54
|
|
|
2.79
|
|
|||||
Number of days in period
|
|
91
|
|
|
91
|
|
|
91
|
|
|
98
|
|
|
371
|
|
(a)
|
On October 15, 2019, the Company acquired 100% of the equity of Tulip Limited and its subsidiaries (together, “Tulip”) from Danish Crown AmbA for £310.0 million, or $391.5 million for cash. In the fourth quarter of 2019, the Company recognized a bargain purchase gain of $56.9 million and transaction costs of approximately $1.3 million related to the acquisition of Tulip.
|
(b)
|
In the first quarter of 2018, the Company recognized impairment charges of approximately $0.5 million related to the Luverne, Minnesota plant held for sale. Also in the first quarter of 2018, the Company had transaction costs of approximately $0.2 million related to the acquisition of Moy Park and GNP.
|
(c)
|
In the second quarter of 2018, the Company recognized impairment charges of approximately $0.1 million related to its 40 North Foods leasehold improvements.
|
(d)
|
In the third quarter of 2018, the Company recognized impairment charges of approximately $0.3 million related to the Luverne, Minnesota plant held for sale.
|
(e)
|
In the fourth quarter of 2018, the Company recognized impairment charges of approximately $2.6 million related to Rose Energy Ltd. within its U.K. and Europe reportable segment. Also in the fourth quarter of 2018, the Company recognized nonrecurring charges of $3.0 million and $11.9 million related to Hurricane Michael and Hurricane Maria, respectively. Hurricane Michael hit the Company’s Live Oak complex in October 2018, causing two days of plant closure. Hurricane Maria hit the Company’s Puerto Rico complex in September 2017, causing six months of plant closure.
|
(f)
|
On January 6, 2017, the Company acquired 100% of the membership interests of GNP from Maschhoff Family Foods, LLC for a cash purchase price of $350 million. In the first quarter, the Company had transaction costs of approximately $0.6 million for the acquisition of GNP.
|
(g)
|
In the second quarter of 2017, the Company recognized impairment charges of approximately $3.5 million related to its Athens, Alabama plant held for sale.
|
(h)
|
In the third quarter of 2017, the Company had transaction costs of approximately $15.0 million for the acquisition of Moy Park.
|
(i)
|
In the fourth quarter of 2017, the Company had transaction costs of approximately $4.5 million for the acquisition of Moy Park.
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
|
Beginning
Balance
|
|
Charged to
Operating Results
|
|
Charged to
Other
Accounts
|
|
Deductions
|
|
Ending
Balance
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Trade Accounts and Other Receivables—
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for Doubtful Accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
8,057
|
|
|
$
|
1,690
|
|
|
$
|
110
|
|
|
$
|
2,390
|
|
(a)
|
$
|
7,467
|
|
2018
|
8,145
|
|
|
1,633
|
|
|
(39
|
)
|
|
1,682
|
|
(a)
|
8,057
|
|
|||||
2017
|
6,661
|
|
|
2,683
|
|
|
339
|
|
|
1,538
|
|
(a)
|
8,145
|
|
|||||
Trade Accounts and Other Receivables—
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for Sales Adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
12,987
|
|
|
$
|
267,165
|
|
|
$
|
—
|
|
|
$
|
271,772
|
|
(b)
|
$
|
8,380
|
|
2018
|
9,477
|
|
|
254,135
|
|
|
—
|
|
|
250,625
|
|
(b)
|
12,987
|
|
|||||
2017
|
4,874
|
|
|
185,198
|
|
|
—
|
|
|
180,595
|
|
(b)
|
9,477
|
|
|||||
Deferred Tax Assets—
|
|
|
|
|
|
|
|
|
|
||||||||||
Valuation Allowance:
|
|
|
|
|
|
|
|
|
|
||||||||||
2019
|
$
|
26,150
|
|
|
$
|
—
|
|
|
$
|
8,190
|
|
|
$
|
818
|
|
(c)
|
$
|
33,522
|
|
2018
|
14,479
|
|
|
11,776
|
|
|
—
|
|
|
105
|
|
(c)
|
26,150
|
|
|||||
2017
|
25,611
|
|
|
—
|
|
|
—
|
|
|
11,132
|
|
(c)
|
14,479
|
|
Plan Category(a)
|
|
Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights(b)
|
|
Weighted-Average Exercise Price of Outstanding Option, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column)
|
||||
Equity compensation plans approved by securities holders
|
|
926
|
|
|
$
|
24.04
|
|
|
2,000,000
|
|
Equity compensation plans not approved by securities holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
926
|
|
|
$
|
24.04
|
|
|
2,000,000
|
|
(a)
|
The table provides certain information about our common stock that may be issued under the Long Term Incentive Plan (the “LTIP”), as of December 29, 2019. For additional information concerning terms of the LTIP, see “Note 17. Incentive Compensation” of our Consolidated and Combined Financial Statements included in this annual report.
|
(b)
|
These amounts represent restricted stock units outstanding, but not yet vested, as of December 29, 2019.
|
(a)
|
Financial Statements
|
(1)
|
The financial statements and schedules listed in the index to financial statements and schedules on page 1 of this annual report are filed as part of this annual report.
|
(2)
|
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are not applicable and therefore have been omitted.
|
(3)
|
The financial statements schedule entitled “Valuation and Qualifying Accounts and Reserves” is filed as part of this annual report on page 105.
|
(b)
|
Exhibits
|
2.1
|
|
|
|
|
|
|
|
2.2
|
|
|
|
|
|
|
|
2.3
|
|
|
|
|
|
|
|
2.4
|
|
|
|
|
|
|
|
2.5
|
|
|
|
|
|
|
|
3.1
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
|
|
|
4.1
|
|
|
|
|
|
||
4.2
|
|
|
|
|
|
||
4.3
|
|
|
|
|
|
||
4.4
|
|
|
|
|
|
||
4.5
|
|
|
|
4.6
|
|
|
|
|
|
|
|
4.7
|
|
|
|
|
|
|
|
10.1
|
|
|
|
|
|
|
10.2
|
|
|
|
|
|
|
|
10.3
|
|
|
|
|
|
|
|
10.4
|
|
|
|
|
|
||
10.5
|
|
|
|
|
|
||
10.6
|
|
|
|
|
|
|
|
10.7
|
|
|
|
|
|
|
|
10.8
|
|
|
|
|
|
||
10.9
|
|
|
|
|
|
|
|
10.10
|
|
|
|
|
|
|
|
10.11
|
|
|
|
|
|
|
|
10.12
|
|
|
|
|
|
|
|
10.13
|
|
|
|
|
|
|
|
10.14
|
|
|
|
|
|
|
|
10.15
|
|
|
|
|
|
||
21
|
|
|
|
|
|
||
23.1
|
|
|
|
|
|
||
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
101.INS
|
|
|
Inline XBRL Instance Document
|
|
|
|
|
101.SCH
|
|
|
Inline XBRL Taxonomy Extension Schema
|
|
|
|
|
101.CAL
|
|
|
Inline XBRL Taxonomy Extension Calculation
|
|
|
|
|
101.DEF
|
|
|
Inline XBRL Taxonomy Extension Definition
|
|
|
|
|
101.LAB
|
|
|
Inline XBRL Taxonomy Extension Label
|
|
|
|
|
101.PRE
|
|
|
Inline XBRL Taxonomy Extension Presentation
|
|
|
|
|
104
|
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
*
|
|
Filed herewith
|
|
|
|
**
|
|
Furnished herewith
|
|
|
|
†
|
|
Represents a management contract or compensation plan arrangement
|
|
|
PILGRIM’S PRIDE CORPORATION
|
|
|
|
By:
|
|
/s/ Fabio Sandri
|
|
|
Fabio Sandri
|
|
|
Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
||
/s/ Gilberto Tomazoni
|
|
Chairman of the Board
|
|
February 20, 2020
|
Gilberto Tomazoni
|
|
|
||
|
|
|
|
|
|
|
|
|
|
/s/ Jayson J. Penn
|
|
President and Chief Executive Officer
|
|
February 20, 2020
|
Jayson J. Penn
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
/s/ Fabio Sandri
|
|
(Principal Financial Officer and
|
|
February 20, 2020
|
Fabio Sandri
|
|
Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Farha Aslam
|
|
Director
|
|
February 20, 2020
|
Farha Aslam
|
|
|
||
|
|
|
|
|
|
|
|
|
|
/s/ Arquimedes A. Celis
|
|
Director
|
|
February 20, 2020
|
Arquimedes A. Celis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Michael L. Cooper
|
|
Director
|
|
February 20, 2020
|
Michael L. Cooper
|
|
|
||
|
|
|
|
|
|
|
|
|
|
/s/ Wallim Cruz de Vasconcellos Junior
|
|
Director
|
|
February 20, 2020
|
Wallim Cruz de Vasconcellos Junior
|
|
|
||
|
|
|
|
|
|
|
|
|
|
/s/ Charles Macaluso
|
|
Director
|
|
February 20, 2020
|
Charles Macaluso
|
|
|
||
|
|
|
|
|
|
|
|
|
|
/s/ Denilson Molina
|
|
Director
|
|
February 20, 2020
|
Denilson Molina
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Andre Nogueira de Souza
|
|
Director
|
|
February 20, 2020
|
Andre Nogueira de Souza
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Vincent Trius
|
|
Director
|
|
February 20, 2020
|
Vincent Trius
|
|
|
|
|
|
Jurisdiction of Incorporation or Organization
|
U.S. Subsidiaries
|
|
PFS Distribution Company
|
Delaware
|
Pilgrim's Pride, LLC
|
Delaware
|
POPPSA 3, LLC
|
Delaware
|
POPPSA 4, LLC
|
Delaware
|
PPC Transportation Company
|
Delaware
|
Merit Provisions, LLC
|
Delaware
|
40 North Foods, Inc.
|
Delaware
|
GC Properties
|
Georgia
|
PPC of Alabama, Inc.
|
Georgia
|
Gold'n Plump Farms, LLC
|
Minnesota
|
Gold'n Plump Poultry, LLC
|
Minnesota
|
JFC LLC
|
Minnesota
|
Pilgrim's Pride Affordable Housing Corporation
|
Nevada
|
Pilgrim's Pride of Nevada, Inc.
|
Nevada
|
PPC Marketing, Ltd.
|
Texas
|
Pilgrim's Pride Corporation of West Virginia, Inc.
|
West Virginia
|
|
|
Foreign Subsidiaries
|
|
To-Ricos Distribution, Ltd.
|
Bermuda
|
To-Ricos, Ltd.
|
Bermuda
|
Moy Park Beef Orléans Sàrl
|
France
|
Moy Park France Holdco Sàrl
|
France
|
Moy Park France Holdings SAS
|
France
|
Moy Park France SAS
|
France
|
Arkose Investments ULC
|
Ireland
|
Moy Park Food Service Dublin ULC
|
Ireland
|
Granite Holdings Sàrl
|
Luxembourg
|
Ivory Investments Luxembourg Sàrl
|
Luxembourg
|
Sandstone Holdings Sàrl
|
Luxembourg
|
Avícola Pilgrim's Pride de Mexico, S. A. de C.V.
|
Mexico
|
Comercializadora de Carnes de Mexico S. de R.L. de C.V.
|
Mexico
|
Gallina Pesada S.A.P.I. de C.V.
|
Mexico
|
Inmobiliaria Avicola Pilgrim's Pride, S. de R.L.
|
Mexico
|
Pilgrim's Operaciones Laguna, S. de R.L. de C.V.
|
Mexico
|
Pilgrim's Pride S. de R.L. de C.V.
|
Mexico
|
Servicios Administrativos Pilgrim's Pride S. de R.L. de C.V.
|
Mexico
|
Albert van Zoonen B.V.
|
Netherlands
|
|
Jurisdiction of Incorporation or Organization
|
Foreign Subsidiaries (Continued)
|
|
Bakewell Foods Ltd.
|
United Kingdom
|
Dungannon Proteins Ltd.
|
United Kingdom
|
Kitchen Range Foods Ltd.
|
United Kingdom
|
Moy Park (Bondco) Plc
|
United Kingdom
|
Moy Park Holdings (Europe) Ltd.
|
United Kingdom
|
Moy Park Ltd.
|
United Kingdom
|
Moy Park Newco Ltd.
|
United Kingdom
|
O'Kane Blue Rose (Newco 1) Ltd.
|
United Kingdom
|
O'Kane Poultry Ltd.
|
United Kingdom
|
Onix Investments UK Ltd.
|
United Kingdom
|
Rose Energy Ltd.
|
United Kingdom
|
Tulip Limited
|
United Kingdom
|
1.
|
I have reviewed this annual report on Form 10-K for the year ended December 29, 2019, of Pilgrim's Pride Corporation;
|
2.
|
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;
|
3.
|
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;
|
4.
|
The registrant's other certifying officer(s) 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:
|
a.
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
The registrant's other certifying officer(s) 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):
|
a.
|
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
|
b.
|
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.
|
Date: February 20, 2020
|
/s/ Jayson J. Penn
|
|
Jayson J. Penn
|
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K for the year ended December 29, 2019, of Pilgrim's Pride Corporation;
|
2.
|
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;
|
3.
|
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;
|
4.
|
The registrant's other certifying officer(s) 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:
|
a.
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
The registrant's other certifying officer(s) 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):
|
a.
|
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
|
b.
|
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.
|
Date: February 20, 2020
|
/s/ Fabio Sandri
|
|
Fabio Sandri
|
|
Chief Financial Officer
|
Date: February 20, 2020
|
/s/ Jayson J. Penn
|
|
Jayson J. Penn
|
|
Chief Executive Officer
|
Date: February 20, 2020
|
/s/ Fabio Sandri
|
|
Fabio Sandri
|
|
Chief Financial Officer
|