UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q | | | For the quarterly period ended March 26, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File number 1-9273 | Securities registered pursuant to Section 12(b) of the Act: | | | | --- | --- | --- | | Title of each class | Trading Symbol | Name of Exchange on which Registered | | Common Stock, Par Value $0.01 | PP ...

PART I Part I provides an overview of business operations, risks, property details, and legal/regulatory disclosures [Business](index=4&type=section&id=Item%201.%20Business) PPC is a vertically integrated global protein company operating in the U.S., U.K. and Europe, and Mexico segments, offering diverse chicken and pork products - Pilgrim's Pride Corporation is a **vertically integrated global protein company** engaged in the production, processing, marketing, and distribution of fresh, frozen, and value-added chicken and pork products[12](index=12&type=chunk) - The company serves over **51,100 customers** across the U.S., U.K. and Europe, Mexico, and over 120 other countries, with sales efforts largely targeted towards the foodservice industry and retail customers[13](index=13&type=chunk) - PPC operates in **three reportable segments**: U.S., U.K. and Europe, and Mexico, producing or purchasing for resale chicken and pork products[17](index=17&type=chunk) - In 2021, PPC acquired Pilgrim's Food Masters (PFM) for **£698.8 million ($958.9 million)**, a leading manufacturer of branded and private label meats and ready meals in the U.K. and Republic of Ireland[15](index=15&type=chunk) 2022 Product Sales by Segment | Segment | Fresh Products (%) | Prepared Foods (%) | Export Products (%) | | :-------------- | :----------------- | :----------------- | :------------------ | | U.S. | 80.2 | 10.3 | 5.1 | | U.K. and Europe | 18.6 | 63.7 | 14.6 | | Mexico | 86.0 | 9.1 | N/A | Net Sales by Product Line and Segment (2020-2022, in thousands) | Product Line / Segment | 2022 ($) | 2021 ($) | 2020 ($) | | :--------------------- | :---------- | :---------- | :---------- | | **U.S. reportable segment:** | | | | | Fresh products | 8,624,421 | 7,264,448 | 6,137,264 | | Prepared foods | 1,107,734 | 898,614 | 714,563 | | Export | 552,823 | 459,371 | 306,478 | | Other products | 463,372 | 491,446 | 337,712 | | **Total U.S.** | **10,748,350**| **9,113,879** | **7,496,017** | | **U.K. and Europe reportable segment:** | | | | | Fresh products | 908,882 | 1,151,330 | 1,594,373 | | Prepared foods | 3,104,347 | 2,214,180 | 1,237,486 | | Export | 712,685 | 458,588 | 297,414 | | Other products | 148,824 | 109,964 | 145,019 | | **Total U.K. & Europe** | **4,874,738** | **3,934,062** | **3,274,292** | | **Mexico reportable segment:** | | | | | Fresh products | 1,587,809 | 1,515,453 | 1,210,952 | | Prepared foods | 167,589 | 128,208 | 66,572 | | Other products | 89,891 | 85,856 | 44,068 | | **Total Mexico** | **1,845,289** | **1,729,517** | **1,321,592** | | **Total net sales** | **17,468,377**| **14,777,458**| **12,091,901**| - Raw materials, primarily corn, soybean meal, and wheat, accounted for approximately **46.1%**, **35.2%**, and **4.6%** of feed costs in 2022, respectively, with derivative financial instruments used to mitigate price volatility[26](index=26&type=chunk) - The company employed over **61,500 persons** as of December 25, 2022, focusing on health and safety, diversity, retention, career development, and community support[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from commodity price volatility, disease outbreaks, operational challenges, regulatory compliance, and financial leverage - The **COVID-19 pandemic continues to pose risks**, including reduced production, labor shortages, shifts in demand, and potential negative impacts on brand reputation[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - Profitability is materially affected by **cyclical fluctuations in commodity prices** of feed ingredients and market prices of chicken and pork, which derivative instruments do not always successfully manage[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - **Outbreaks of livestock diseases** (e.g., avian influenza, African swine fever) can significantly disrupt operations, reduce demand, and lead to governmental restrictions or destruction of flocks/herds[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - **Product contamination risks** can lead to product liability claims, recalls, adverse publicity, and increased regulatory scrutiny, potentially not fully covered by insurance[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - **Foreign operations expose the company to currency exchange rate fluctuations, trade barriers, and regulatory changes**, including data protection regulations like GDPR[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - The company faces **intense competition** in the chicken and pork industries, where failure to manage costs and maintain efficiency could adversely affect business[65](index=65&type=chunk) - **Dependence on contract growers** and independent producers for livestock supply means failure to attract or maintain these relationships could negatively impact production[77](index=77&type=chunk)[78](index=78&type=chunk) - **Climate change poses long-term risks**, including impacts on agricultural productivity, increased extreme weather, potential regulatory requirements for emissions reduction, and higher energy/compliance costs[80](index=80&type=chunk) - Significant leverage (approximately **$483.7 million** secured and **$2.7 billion** unsecured indebtedness as of December 25, 2022) could affect financial flexibility, debt servicing ability, and access to additional financing[102](index=102&type=chunk) - The **phase-out of LIBOR** by June 30, 2023, and its replacement with SOFR, requires renegotiation of credit agreements, which may impact interest rates and financial results[106](index=106&type=chunk)[107](index=107&type=chunk) - **Weak or unstable national/global economic conditions**, including inflation, the Russia-Ukraine war, and disruptions in credit markets, can negatively affect consumer demand, raw material costs, and supply chains[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) [Unresolved Staff Comments](index=23&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - No unresolved staff comments were reported[117](index=117&type=chunk) [Properties](index=24&type=section&id=Item%202.%20Properties) Pilgrim's Pride Corporation operates a comprehensive network of owned and leased facilities across its chicken, pork, lamb, and prepared meals operations Operating Facilities Overview (as of December 25, 2022) | Operation Type | Owned | Leased | Total Facilities | Capacity | Unit of Measure | Average Utilization | | :------------------------- | :---- | :----- | :--------------- | :------------------- | :-------------- | :------------------ | | Chicken Fresh Processing | 35 | 1 | 36 | 8.7 million | Birds per day | 88.4% | | Chicken Prepared Foods | 12 | 2 | 14 | 37.3 million | Tons per year | 95.9% | | Hatcheries | 45 | 2 | 47 | 3.2 billion | Eggs per year | 90.9% | | Other Chicken Operations | 47 | 2 | 49 | 16.0 million | Tons per year | 72.0% | | Pork Fresh Processing | 3 | — | 3 | 10,913 | Pigs per day | 88.6% | | Pork Prepared Foods | 9 | — | 9 | 269,488 | Tons per year | 70.8% | | Other Pork Operations | 2 | — | 2 | 11,023 | Pigs per day | 100.0% | | Lamb Fresh Processing | 1 | — | 1 | 4,960 | Lambs per day | 64.4% | | Lamb Prepared Foods | 1 | — | 1 | 8,530 | Tons per year | 46.6% | | Prepared Meals Facilities | 5 | 4 | 9 | 288,350 | Tons per year | 68.1% | | Distribution Centers & Other | 11 | 20 | 31 | NA | NA | NA | - **Substantially all U.S. property, plant, and equipment** are used as collateral for the secured U.S. credit facility[119](index=119&type=chunk) [Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 21, Commitments and Contingencies, in the Consolidated Financial Statements - Information on legal proceedings is found in Note 21. Commitments and Contingencies[122](index=122&type=chunk) [Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no disclosures related to mine safety - No mine safety disclosures were reported[123](index=123&type=chunk) PART II Part II covers market information for common equity, financial data, management's discussion and analysis, and market risk disclosures [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) PPC common stock is listed on Nasdaq, with JBS USA holding a controlling interest and no current dividend payment intentions - Pilgrim's Pride Corporation's common stock is listed on the Nasdaq Global Select Market under the symbol "**PPC**"[126](index=126&type=chunk) - As of February 9, 2023, there were approximately **59,300 holders** of the Company's common stock[126](index=126&type=chunk) - The Company has **no current intention to pay dividends**, with any change dependent on future conditions and subject to restrictions from credit facilities and senior note indentures[127](index=127&type=chunk)[128](index=128&type=chunk) - JBS S.A., through its indirect wholly-owned subsidiaries, beneficially owns **82.65%** of PPC's outstanding common stock, granting it control over management, policies, and financing decisions[12](index=12&type=chunk) Cumulative 5-Year Total Stockholder Return (December 31, 2017 - December 25, 2022) | Date | PPC ($) | Russell 2000 ($) | Peer Group ($) | | :--------- | :------ | :--------------- | :------------- | | 12/31/17 | 100.00 | 100.00 | 100.00 | | 06/30/18 | 64.18 | 107.66 | 92.60 | | 12/30/18 | 50.19 | 88.99 | 86.69 | | 06/30/19 | 81.75 | 104.10 | 107.30 | | 12/29/19 | 106.15 | 111.70 | 121.92 | | 06/30/20 | 54.38 | 97.20 | 101.96 | | 12/27/20 | 62.30 | 134.00 | 105.86 | | 06/30/21 | 71.41 | 157.49 | 114.89 | | 12/26/21 | 88.70 | 153.85 | 125.43 | | 06/30/22 | 100.55 | 117.81 | 126.90 | | 12/25/22 | 76.63 | 122.41 | 106.20 | [Selected Financial Data](index=27&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is reserved and contains no selected financial data [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) PPC achieved strong 2022 financial results with **$745.9 million** net income and **$1.0 billion** profit before tax, driven by **18.2%** net sales growth and improved operating income Key Financial Highlights (2022) | Metric | Amount (Millions USD) | | :---------------------------------------- | :-------------------- | | Net income attributable to PPC | $745.9 | | Diluted EPS | $3.10 | | Profit before tax | $1,000.0 | | Gross profit | $1,800.0 | | Cash from operations | $669.9 | | Operating margins | 6.7% | | EBITDA | $1,570.0 | | Adjusted EBITDA | $1,650.0 | - In 2022, the company faced **significant challenges from inflation** in commodity, labor, and other operating costs, exacerbated by the Russia-Ukraine war and U.K. labor shortages[138](index=138&type=chunk) - The company responded to challenges by **negotiating with customers for cost recovery and focusing on operational initiatives** for labor efficiencies, agricultural performance, and improved yields[139](index=139&type=chunk) - The **COVID-19 pandemic continued to cause intermittent disruptions** in 2022, including supply chain issues, increased broiler and chick costs, and higher payroll and benefits costs, though demand shifted back towards pre-pandemic levels[145](index=145&type=chunk)[147](index=147&type=chunk) - **Average chicken market prices were higher in the first half of 2022** due to stable demand and low cold storage, but declined in the second half due to increased production and stagnant volume demand[150](index=150&type=chunk)[151](index=151&type=chunk) - U.K. chicken market experienced **unprecedented cost increases** in feed, utilities, and labor in the first three quarters of 2022, largely offset by customer negotiations[152](index=152&type=chunk) - **Mexico chicken commodity prices increased** in 2022 due to demand outpacing supply and higher production costs from feed ingredients and avian influenza impacts[153](index=153&type=chunk) - U.K. pork product market prices recovered in 2022, increasing **44%** over the year, supported by E.U. market recovery and clearing pig backlogs, though production costs still exceeded market prices[155](index=155&type=chunk) - The company is committed to sustainability, aiming for **net zero greenhouse gas emissions by 2040**, supported by **$1.0 billion** in sustainability-linked bonds requiring a **30% reduction** in Scope 1 and 2 emissions intensity by 2030[157](index=157&type=chunk)[158](index=158&type=chunk) Net Sales by Reportable Segment (2022 vs. 2021) | Segment | 2022 Net Sales ($ thousands) | Change from 2021 ($ thousands) | Change from 2021 (%) | | :-------------- | :--------------------------- | :----------------------------- | :------------------- | | U.S. | 10,748,350 | 1,634,471 | 17.9% | | U.K. and Europe | 4,874,738 | 940,676 | 23.9% | | Mexico | 1,845,289 | 115,772 | 6.7% | | **Total** | **17,468,377** | **2,690,919** | **18.2%** | Gross Profit and Operating Income (2022 vs. 2021) | Metric | 2022 ($ thousands) | Change from 2021 ($ thousands) | Change from 2021 (%) | | :--------------- | :----------------- | :----------------------------- | :------------------- | | Gross profit | 1,811,803 | 445,976 | 32.7% | | Operating income | 1,176,595 | 965,431 | 457.2% | - U.S. operating income increased significantly by **6,521.8%** to **$1,094.0 million** in 2022, primarily due to a **$622.1 million** net decrease in legal settlement recognition[170](index=170&type=chunk) Liquidity Sources (as of December 25, 2022, in millions) | Source | Amount ($) | | :-------------------------------------- | :--------- | | Cash and cash equivalents | 434.8 | | U.S. Credit Facility Revolving Note Payable (available) | 765.0 | | Mexico Credit Facility (available) | 77.5 | | U.K. and Europe Revolver Facility (available) | 124.5 | Cash Flows from Operating Activities (2022 vs. 2021, in millions) | Metric | 2022 ($) | 2021 ($) | | :--------------------------- | :------- | :------- | | Net income | 746.5 | 31.3 | | Cash provided by operations | 669.9 | 326.5 | - Cash provided by operating activities increased significantly in 2022 due to higher net income and changes in operating assets and liabilities, including a **$472.2 million** use of cash for inventories due to higher input costs[178](index=178&type=chunk)[182](index=182&type=chunk) - Capital expenditures are projected to be **$400 million to $500 million** in 2023, funded by cash flow from operations and revolving credit lines, primarily for growth, efficiency, and cost reduction[189](index=189&type=chunk) Contractual Obligations (as of December 25, 2022, in thousands) | Obligation Type | Total ($) | Less than One Year ($) | One to Three Years ($) | Three to Five Years ($) | Greater than Five Years ($) | | :------------------- | :---------- | :--------------------- | :--------------------- | :---------------------- | :-------------------------- | | Long-term debt | 3,230,078 | 24,453 | 50,625 | 1,255,000 | 1,900,000 | | Interest | 931,235 | 130,195 | 259,369 | 251,171 | 290,500 | | Finance leases | 3,867 | 1,064 | 1,471 | 1,079 | 253 | | Operating leases | 345,183 | 90,356 | 122,993 | 71,651 | 60,183 | | Derivative liabilities | 18,917 | 18,917 | — | — | — | | Purchase obligations | 721,753 | 588,077 | 117,279 | 3,890 | 12,507 | | **Total** | **5,251,033** | **853,062** | **551,737** | **1,582,791** | **2,263,443** | Reconciliation of Net Income to EBITDA and Adjusted EBITDA (2022 vs. 2021, in thousands) | Metric | 2022 ($) | 2021 ($) | | :---------------------------------------- | :---------- | :---------- | | Net income | 746,538 | 31,268 | | EBITDA | 1,572,227 | 612,950 | | Adjusted EBITDA | 1,648,356 | 1,289,028 | Reconciliation of Adjusted Net Income (2022 vs. 2021, in thousands) | Metric | 2022 ($) | 2021 ($) | | :---------------------------------------- | :---------- | :---------- | | Net income attributable to Pilgrim's | 745,930 | 31,000 | | Adjusted net income attributable to Pilgrim's | 803,552 | 557,381 | | Adjusted net income per diluted share | $3.34 | $2.28 | [Quantitative and Qualitative Disclosures about Market Risk](index=42&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from commodity prices, interest rates, and foreign currency, using derivatives to mitigate these exposures - Market risk-sensitive instruments and positions are primarily exposed to potential loss from adverse changes in **commodity prices, foreign currency exchange rates, interest rates, and credit quality** of available-for-sale securities[217](index=217&type=chunk) Impact of 10% Increase in Feed Ingredient Prices (Year Ended December 25, 2022, in thousands) | Item | Amount ($) | Impact of 10% Increase ($) | | :------------------------- | :---------- | :------------------------- | | Feed ingredient purchases | 4,536,861 | 453,686 | | Feed ingredient inventory | 240,151 | 24,015 | - A hypothetical **10% increase** in interest rates would decrease the fair value of fixed-rate debt by **$73.5 million** as of December 25, 2022[222](index=222&type=chunk) - Variable-rate debt constitutes approximately **15.2%** of total debt, and a **100 basis point increase** in interest rates would increase interest expense by **$7.2 million** for the year ended December 25, 2022[223](index=223&type=chunk) Impact of 10% Change in Mexican Peso Exchange Rate (Year Ended December 25, 2022, in thousands) | Scenario | Foreign Currency Remeasurement Gain (Loss) ($) | | :-------------------------------------- | :--------------------------------------------- | | 10% Deterioration in Exchange Rate | (4,672) | | 10% Appreciation in Exchange Rate | 5,710 | - A **10% weakening** in the British pound against the U.S. dollar would decrease the net assets of U.K. and Europe subsidiaries by **$240.9 million**, while a **10% strengthening** would increase them by **$294.4 million**[228](index=228&type=chunk) - Global operations were **significantly impacted by inflation** in 2022, leading to price negotiations with customers to mitigate increased input costs, with moderate inflation anticipated for 2023[232](index=232&type=chunk) [Financial Statements and Supplementary Data](index=45&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements, including balance sheets, income statements, cash flows, and extensive notes, with an unqualified auditor's opinion - KPMG LLP issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 25, 2022[236](index=236&type=chunk) - A **critical audit matter** identified was the evaluation of the company's qualitative **goodwill impairment assessment**, particularly for reporting units in the U.K. and Europe segment, due to subjective auditor judgment[243](index=243&type=chunk)[244](index=244&type=chunk) Consolidated Balance Sheets (as of December 25, 2022 vs. December 26, 2021, in thousands) | Item | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :-------------------------------------- | :--------------- | :--------------- | | **Assets:** | | | | Total current assets | 3,891,618 | 3,305,954 | | Goodwill | 1,227,944 | 1,337,252 | | Property, plant and equipment, net | 2,940,846 | 2,917,806 | | Total assets | 9,255,769 | 8,913,205 | | **Liabilities & Stockholders' Equity:** | | | | Total current liabilities | 2,570,169 | 2,390,823 | | Long-term debt, less current maturities | 3,166,432 | 3,191,161 | | Total liabilities | 6,402,493 | 6,324,271 | | Total stockholders' equity | 2,853,276 | 2,588,934 | Consolidated Statements of Income (Years Ended December 25, 2022, December 26, 2021, December 27, 2020, in thousands) | Item | 2022 ($) | 2021 ($) | 2020 ($) | | :-------------------------------------- | :----------- | :----------- | :----------- | | Net sales | 17,468,377 | 14,777,458 | 12,091,901 | | Gross profit | 1,811,803 | 1,365,827 | 838,196 | | Operating income | 1,176,595 | 211,164 | 245,463 | | Income before income taxes | 1,025,473 | 92,390 | 161,825 | | Net income attributable to Pilgrim's Pride Corporation | 745,930 | 31,000 | 94,757 | | Diluted EPS | $3.10 | $0.13 | $0.39 | Consolidated Statements of Cash Flows (Years Ended December 25, 2022, December 26, 2021, December 27, 2020, in thousands) | Item | 2022 ($) | 2021 ($) | 2020 ($) | | :-------------------------------------- | :----------- | :----------- | :----------- | | Cash provided by operating activities | 669,863 | 326,459 | 724,247 | | Cash used in investing activities | (445,252) | (1,323,713) | (327,002) | | Cash provided by (used in) financing activities | (232,014) | 901,311 | (136,708) | | End of year cash and cash equivalents | 434,759 | 450,121 | 548,406 | - The company acquired Pilgrim's Food Masters (PFM) for **$958.9 million** in September 2021, and Randall Parker Foods Limited (RPF) for **$13.4 million** in November 2021, both included in the U.K. and Europe segment[317](index=317&type=chunk)[324](index=324&type=chunk) - Goodwill balance as of December 25, 2022, was **$1.2 billion**, with **$1.1 billion** related to the U.K. and Europe segment, and no goodwill impairment was deemed necessary after qualitative assessment[243](index=243&type=chunk)[293](index=293&type=chunk)[363](index=363&type=chunk) - Total net sales to customers by customer location in 2022 were **$10.2 billion** for U.S., **$4.8 billion** for Europe, and **$1.9 billion** for Mexico[489](index=489&type=chunk) - In 2022, the company initiated a restructuring initiative in the U.K. and Europe segment, expected to incur total pre-tax charges of approximately **$58.0 million**, with **$30.5 million** recognized as expenses in 2022[469](index=469&type=chunk)[471](index=471&type=chunk) - The company is involved in various legal proceedings, including antitrust litigation related to broiler chickens and grower services, and tax claims in Mexico, with settlements for broiler antitrust litigation totaling **$195.5 million**[498](index=498&type=chunk)[499](index=499&type=chunk)[501](index=501&type=chunk)[496](index=496&type=chunk)[497](index=497&type=chunk) [1. Business and Summary of Significant Accounting Policies](index=52&type=section&id=1.%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) PPC is a global chicken producer operating on a 52/53-week fiscal year, recognizing revenue upon product transfer and valuing inventories at lower of cost or net realizable value - Pilgrim's Pride Corporation is **one of the largest chicken producers globally**, with operations in the U.S., U.K., Mexico, France, Puerto Rico, the Netherlands, and the Republic of Ireland, selling fresh, prepared, and other products to various customers[261](index=261&type=chunk) - The company operates on a **52/53-week fiscal year** ending on the Sunday falling on or before December 31[262](index=262&type=chunk) - The **functional currency** for U.S. and Mexico operations is the U.S. dollar, for U.K. operations is the British pound, and for France, Netherlands, and Republic of Ireland operations is the euro[265](index=265&type=chunk) - **Revenue is recognized when control of products transfers** to the customer, typically upon destination, with minimal variable consideration due to commodity market pricing[268](index=268&type=chunk)[269](index=269&type=chunk) - Inventories are stated at the **lower of cost or net realizable value**, with costs allocated using a by-product costing technique[281](index=281&type=chunk)[282](index=282&type=chunk)[283](index=283&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually or more frequently if indicators arise; **no impairment was identified** as of December 25, 2022[293](index=293&type=chunk) - The company uses **derivative financial instruments** (futures, forwards, options, swaps) to mitigate exposure to changes in commodity prices, foreign currency exchange rates, and interest rates[303](index=303&type=chunk) [2. Business Acquisitions](index=59&type=section&id=2.%20Business%20Acquisitions) In 2021, PPC acquired Pilgrim's Food Masters for **$958.9 million** and Randall Parker Foods for **$13.4 million**, expanding its European footprint and product diversification - On September 24, 2021, the Company acquired **100%** of Pilgrim's Food Masters (PFM) for **$958.9 million**, solidifying its position as a leading European food company and diversifying its product mix[317](index=317&type=chunk) - PFM's acquired operations generated **$1.0 billion** in net sales and **$8.4 million** in net income during 2022[318](index=318&type=chunk) - The PFM acquisition resulted in **$353.4 million** in goodwill, attributed to strategic and synergistic benefits like complementary product offerings and enhanced market position[319](index=319&type=chunk)[320](index=320&type=chunk) - On November 12, 2021, the Company acquired Randall Parker Foods Limited (RPF) for **$13.4 million**, integrating lamb processing and retail packaging operations into its U.K. and Europe segment[324](index=324&type=chunk) PFM Acquisition: Fair Values of Assets Acquired and Liabilities Assumed (as of September 24, 2021, in thousands) | Item | Amount ($) | | :---------------------------------- | :--------- | | Cash and cash equivalents | 113 | | Trade accounts and other receivables| 7,387 | | Inventories | 60,341 | | Property, plant and equipment | 247,133 | | Identified intangible assets | 415,157 | | Total assets acquired | 746,841 | | Total liabilities assumed | 141,331 | | Identified net assets | 605,510 | | Goodwill | 353,397 | | **Total consideration transferred** | **958,907** | [3. Revenue Recognition](index=61&type=section&id=3.%20Revenue%20Recognition) Revenue is recognized when control of products transfers to the customer, typically at destination, with performance obligations fulfilled rapidly - **Revenue is recognized when a customer's order is accepted and control of the products transfers**, typically at the destination point, or at the company's facilities for customer pick-up[325](index=325&type=chunk)[326](index=326&type=chunk) - The company's **performance obligations are usually fulfilled within days to weeks** of order acceptance, with minimal variable consideration due to commodity market pricing[326](index=326&type=chunk)[327](index=327&type=chunk) Disaggregated Revenue by Product Line and Segment (2022, in thousands) | Segment | Fresh ($) | Prepared ($) | Export ($) | Other ($) | Total Net Sales ($) | | :-------------- | :----------- | :----------- | :----------- | :--------- | :------------------ | | U.S. | 8,624,421 | 1,107,734 | 552,823 | 463,372 | 10,748,350 | | U.K. and Europe | 908,882 | 3,104,347 | 712,685 | 148,824 | 4,874,738 | | Mexico | 1,587,809 | 167,589 | — | 89,891 | 1,845,289 | | **Total** | **11,121,112** | **4,379,670**| **1,265,508**| **702,087**| **17,468,377** | Revenue Contract Liabilities (2022 vs. 2021, in thousands) | Item | 2022 ($) | 2021 ($) | | :-------------------------------------- | :------- | :------- | | Balance, beginning of year | 22,321 | 65,918 | | Revenue recognized | (19,712) | (60,764) | | Cash received, excluding amounts recognized as revenue during the period | 31,877 | 17,167 | | **Balance, end of year** | **34,486** | **22,321** | [4. Leases](index=62&type=section&id=4.%20Leases) The company holds operating lease agreements for various facilities across its segments, along with a limited number of finance leases - The company has **operating lease agreements** for various facilities across its segments, along with a limited number of **finance leases** in the U.S[335](index=335&type=chunk)[336](index=336&type=chunk) Net Lease Cost (2022 vs. 2021, in thousands) | Item | 2022 ($) | 2021 ($) | | :-------------------------- | :------- | :------- | | Operating lease cost | 98,353 | 93,024 | | Amortization of finance lease assets | 472 | 745 | | Interest on finance leases | 132 | 128 | | Short-term lease cost | 77,100 | 63,588 | | Variable lease cost | 4,102 | 4,490 | | **Net lease cost** | **180,159**| **161,975**| Weighted-Average Lease Terms and Discount Rates (as of December 25, 2022 vs. December 26, 2021) | Metric | Dec 25, 2022 | Dec 26, 2021 | | :------------------------------------ | :----------- | :----------- | | Weighted-average remaining lease term (years): | | |\ | Operating leases | 5.80 | 6.07 | | Finance leases | 4.52 | 5.32 | | Weighted-average discount rate: | | |\ | Operating leases | 4.00% | 3.92% | | Finance leases | 3.19% | 3.32% | Future Minimum Lease Payments (as of December 25, 2022, in thousands) | Fiscal Year Ending December | Operating Leases ($) | Finance Leases ($) | | :-------------------------- | :------------------- | :----------------- | | 2023 | 90,356 | 1,064 | | 2024 | 67,082 | 908 | | 2025 | 55,911 | 563 | | 2026 | 41,955 | 553 | | 2027 | 29,697 | 526 | | Thereafter | 60,182 | 253 | | **Total future minimum lease payments** | **345,183** | **3,867** | | Less: imputed interest | (35,260) | (243) | | **Present value of lease liabilities** | **309,923** | **3,624** | [5. Derivative Financial Instruments](index=64&type=section&id=5.%20Derivative%20Financial%20Instruments) The company uses derivative financial instruments to mitigate price risk for commodity inputs and foreign currency exchange rates - The company uses **derivative financial instruments** (exchange-traded futures and options) to **mitigate price risk** for anticipated commodity inputs for approximately the next twelve months[344](index=344&type=chunk) - **Foreign currency forward contracts** are purchased to manage translational foreign exchange risk from operations in Mexico, the U.K., France, the Netherlands, and the Republic of Ireland[345](index=345&type=chunk) - An **interest rate swap contract** was used to convert variable interest rates on U.S. long-term debt to a fixed rate, though no such contract was outstanding at year-end 2022[346](index=346&type=chunk) - **Most derivative contracts are undesignated**, with changes in fair value recognized immediately in earnings, while **Cash flow hedges are applied** to certain foreign currency and interest rate derivatives in the U.K. and Europe and U.S. segments, respectively[348](index=348&type=chunk)[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) Outstanding Derivative Instruments and Cash Collateral (as of December 25, 2022 vs. December 26, 2021, in thousands) | Item | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :-------------------------------------- | :--------------- | :--------------- | | Commodity derivative assets | 17,922 | 17,567 | | Commodity derivative liabilities | (9,042) | (14,119) | | Foreign currency derivative assets | 555 | 518 | | Foreign currency derivative liabilities | (6,170) | (4,958) | | Interest rate swap derivative liabilities | — | (98) | | Sales contract derivative liabilities | (3,705) | (12,691) | | Cash collateral posted with brokers | 33,771 | 22,459 | Gains and Losses of Undesignated Derivative Instruments (2022 vs. 2021 vs. 2020, in thousands) | Type of Contract | 2022 ($) | 2021 ($) | 2020 ($) | Affected Line Item in the Consolidated Statements of Income | | :-------------------------------- | :------- | :------- | :------- | :---------------------------------------------------------- | | Foreign currency derivatives gain (loss) | (35,586) | 12,806 | (6,637) | Foreign currency transaction losses (gains) | | Commodity derivative gain (loss) | 53,899 | 50,404 | 47,554 | Cost of sales | | Sales contract derivative gain (loss) | 8,985 | (12,691) | (209) | Net sales | | **Total** | **27,298** | **50,519** | **40,708** | | [6. Trade Accounts and Other Receivables](index=66&type=section&id=6.%20Trade%20Accounts%20and%20Other%20Receivables) This section details the company's trade accounts, notes, and other receivables, including those from related parties Trade Accounts and Other Receivables (as of December 25, 2022 vs. December 26, 2021, in thousands) | Item | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :-------------------------------------- | :--------------- | :--------------- | | Trade accounts receivable | 984,332 | 947,697 | | Notes receivable | 33,477 | 18,697 | | Other receivables | 88,962 | 56,716 | | Receivables, gross | 1,106,771 | 1,023,110 | | Allowance for credit losses | (9,559) | (9,673) | | **Receivables, net** | **1,097,212** | **1,013,437** | | Accounts receivable from related parties| 2,512 | 1,345 | [7. Inventories](index=67&type=section&id=7.%20Inventories) This section provides a breakdown of the company's inventories, including raw materials, finished products, and operating supplies Inventories (as of December 25, 2022 vs. December 26, 2021, in thousands) | Item | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :------------------------------ | :--------------- | :--------------- | | Raw materials and work-in-process | 1,204,092 | 1,044,739 | | Finished products | 596,375 | 379,705 | | Operating supplies | 95,367 | 76,590 | | Maintenance materials and parts | 94,350 | 74,624 | | **Total inventories** | **1,990,184** | **1,575,658** | [8. Investments in Securities](index=67&type=section&id=8.%20Investments%20in%20Securities) The company's current investments are highly liquid, classified as cash equivalents and available-for-sale securities - The company's current investments are **highly liquid**, with original maturities of three months or less, classified as cash equivalents and available-for-sale securities[362](index=362&type=chunk) Investments in Available-for-Sale Securities (as of December 25, 2022 vs. December 26, 2021, in thousands) | Item | Dec 25, 2022 Cost ($) | Dec 25, 2022 Fair Value ($) | Dec 26, 2021 Cost ($) | Dec 26, 2021 Fair Value ($) | | :-------------------- | :-------------------- | :-------------------------- | :-------------------- | :-------------------------- | | Fixed income securities | 167,366 | 167,430 | 48,851 | 48,851 | - Gross realized gains from available-for-sale securities totaled **$7.1 million** in 2022 and **$5.4 million** in 2021[362](index=362&type=chunk) [9. Goodwill and Intangible Assets](index=67&type=section&id=9.%20Goodwill%20and%20Intangible%20Assets) This section details goodwill by segment and intangible assets, with no impairment identified as of December 25, 2022 Goodwill by Reportable Segment (as of December 25, 2022 vs. December 26, 2021, in thousands) | Segment | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :-------------- | :--------------- | :--------------- | | U.S. | 41,936 | 41,936 | | U.K. and Europe | 1,058,204 | 1,167,512 | | Mexico | 127,804 | 127,804 | | **Total** | **1,227,944** | **1,337,252** | Intangible Assets (as of December 25, 2022 vs. December 26, 2021, in thousands) | Item | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :---------------------------------- | :--------------- | :--------------- | | Trade names not subject to amortization | 549,024 | 609,713 | | Trade names subject to amortization | 112,057 | 114,268 | | Customer relationships | 427,662 | 455,459 | | Non-compete agreements | — | 320 | | Accumulated amortization | (242,723) | (216,517) | | **Total** | **846,020** | **963,243** | - The company recognized amortization expense related to intangible assets of **$33.7 million** in 2022, **$26.4 million** in 2021, and **$22.7 million** in 2020[366](index=366&type=chunk) - **No quantitative impairment tests were deemed necessary** for goodwill or indefinite-lived intangible assets as of December 25, 2022, based on qualitative assessments[367](index=367&type=chunk) [10. Property, Plant and Equipment](index=69&type=section&id=10.%20Property%2C%20Plant%20and%20Equipment) This section details the company's property, plant, and equipment, including depreciation expense and capital expenditures Property, Plant and Equipment, Net (as of December 25, 2022 vs. December 26, 2021, in thousands) | Item | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :------------------------ | :--------------- | :--------------- | | Land | 263,494 | 260,079 | | Buildings | 2,065,042 | 2,043,034 | | Machinery and equipment | 3,651,464 | 3,594,482 | | Autos and trucks | 77,865 | 76,710 | | Finance lease assets | 5,710 | 5,710 | | Construction-in-progress | 358,819 | 229,837 | | PP&E, gross | 6,422,394 | 6,209,852 | | Accumulated depreciation | (3,481,548) | (3,292,046) | | **PP&E, net** | **2,940,846** | **2,917,806** | - Depreciation expense was **$369.4 million** in 2022, **$354.4 million** in 2021, and **$314.4 million** in 2020[369](index=369&type=chunk) - Capital expenditures totaled **$487.1 million** in 2022, primarily for operational efficiencies and cost reduction[370](index=370&type=chunk) - The company recognized an impairment loss on PP&E of **$3.6 million** in 2022 due to planned restructuring activities[372](index=372&type=chunk) [11. Current Liabilities](index=70&type=section&id=11.%20Current%20Liabilities) This section provides a detailed breakdown of the company's current liabilities, including trade accounts, compensation, and litigation settlements Current Liabilities (as of December 25, 2022 vs. December 26, 2021, in thousands) | Item | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :-------------------------------------- | :--------------- | :--------------- | | Trade accounts | 1,476,552 | 1,273,297 | | Book overdrafts | 93,800 | 77,139 | | Other payables | 17,587 | 27,641 | | **Total accounts payable** | **1,587,939** | **1,378,077** | | Accounts payable to related parties | 12,155 | 22,317 | | Revenue contract liabilities | 34,486 | 22,321 | | Compensation and benefits | 258,098 | 224,368 | | Litigation settlements | 99,230 | 172,440 | | Current maturities of operating lease liabilities | 79,222 | 82,947 | | Insurance and self-insured claims | 72,453 | 64,697 | | Accrued sales rebates | 55,002 | 35,613 | | Taxes | 33,550 | 68,163 | | Interest and debt-related fees | 32,433 | 31,810 | | Derivative liabilities | 18,917 | 31,866 | | Other accrued expenses | 201,994 | 147,981 | | **Total current liabilities (excluding income taxes and current maturities of long-term debt)** | **2,485,479** | **2,282,600** | [12. Income Taxes](index=70&type=section&id=12.%20Income%20Taxes) This section details income before taxes by jurisdiction, income tax expense, and the effective tax rate, which was **27.2%** in 2022 Income (Loss) Before Income Taxes by Jurisdiction (2022 vs. 2021 vs. 2020, in thousands) | Jurisdiction | 2022 ($) | 2021 ($) | 2020 ($) | | :----------- | :-------- | :--------- | :--------- | | U.S. | 928,709 | (141,940) | (27,095) | | Foreign | 96,764 | 234,330 | 188,920 | | **Total** | **1,025,473** | **92,390** | **161,825**| Components of Income Tax Expense (Benefit) (2022 vs. 2021 vs. 2020, in thousands) | Component | 2022 ($) | 2021 ($) | 2020 ($) | | :----------- | :-------- | :-------- | :-------- | | Total current| 257,640 | 147,513 | 29,419 | | Total deferred| 21,295 | (86,391) | 37,336 | | **Total** | **278,935** | **61,122**| **66,755**| - The effective tax rate for 2022 was **27.2%**, compared to **66.2%** in 2021 and **41.2%** in 2020, with the 2022 rate including a **3.8% increase** due to a Mexican tax audit claim[376](index=376&type=chunk)[377](index=377&type=chunk) - As of December 25, 2022, the company had a valuation allowance of **$64.4 million**, primarily for net operating loss carryforwards of certain foreign subsidiaries and U.S. foreign tax credits[379](index=379&type=chunk) - Unrecognized tax benefits totaled **$27.6 million** as of December 25, 2022, with **$0.9 million** that would reduce the effective tax rate if recognized[382](index=382&type=chunk) [13. Debt](index=72&type=section&id=13.%20Debt) This section details long-term debt, including senior notes and credit facilities, and amendments reflecting the company's investment grade status Long-Term Debt and Other Borrowing Arrangements (as of December 25, 2022 vs. December 26, 2021, in thousands) | Item | Maturity | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :-------------------------------------- | :------- | :--------------- | :--------------- | | Senior notes payable at 3.50% | 2032 | 900,000 | 900,000 | | Senior notes payable, net of discount of 4.25% | 2031 | 991,692 | 990,691 | | Senior notes payable, net of discount at 5.875% | 2027 | 846,582 | 845,866 | | U.S. Credit Facility Term note payable at 5.00% | 2026 | 480,078 | 506,250 | | Finance lease obligations | Various | 3,624 | 4,548 | | **Long-term debt** | | **3,221,976** | **3,247,358** | | Less: Current maturities of long-term debt | | (26,279) | (26,246) | | **Long-term debt, less current maturities, net of capitalized financing costs** | | **3,166,432** | **3,191,161** | - The **4.25% Senior Notes due 2031** are sustainability-linked, with the interest rate increasing to **4.50%** if the company fails to meet its greenhouse gas emissions intensity reduction target of **17.679%** by December 31, 2025[392](index=392&type=chunk)[393](index=393&type=chunk) - In September 2022, **amendments to the Senior Notes** due 2031 and 2032 indentures permanently eliminated certain covenants to reflect PPC's **investment grade status**[394](index=394&type=chunk)[397](index=397&type=chunk) - The U.S. Credit Facility provides an **$800.0 million** revolving credit commitment and a **$700.0 million** term loan commitment, with **$480.1 million** outstanding under the term loan and **$765.0 million** available under the revolving credit as of December 25, 2022[399](index=399&type=chunk)[400](index=400&type=chunk) - The U.K. and Europe Revolver Facility provides a multicurrency revolving loan commitment of up to **£150.0 million** (U.S. dollar-equivalent of **$124.5 million**) maturing on June 24, 2027, with no outstanding borrowings as of December 25, 2022[405](index=405&type=chunk) - The Mexico Credit Facility provides a **$1.5 billion Mexican pesos** (U.S. dollar-equivalent of **$77.5 million**) revolving loan commitment maturing on December 14, 2023, with no outstanding borrowings as of December 25, 2022[407](index=407&type=chunk) [14. Stockholders' Equity](index=76&type=section&id=14.%20Stockholders%27%20Equity) This section details changes in accumulated other comprehensive loss, share repurchase authorization, and dividend restrictions Changes in Accumulated Other Comprehensive Loss (2022 vs. 2021, in thousands) | Item | 2022 ($) | 2021 ($) | | :-------------------------------------- | :--------- | :--------- | | Balance, beginning of year | (47,997) | (20,620) | | Net current year other comprehensive income (loss) | (288,451) | (27,377) | | **Balance, end of year** | **(336,448)**| **(47,997)** | - The company's Board of Directors approved a **$200.0 million** share repurchase authorization on March 8, 2022, under which approximately **7.5 million shares** were repurchased for **$199.6 million** as of September 25, 2022[413](index=413&type=chunk) - **Restrictions on dividends** are imposed by the U.S. Credit Facility and senior note indentures, and the U.K. and Europe Revolver Facility further restricts payments and distributions from U.K. and Republic of Ireland entities to the company[414](index=414&type=chunk) [15. Pension and Other Postretirement Benefits](index=78&type=section&id=15.%20Pension%20and%20Other%20Postretirement%20Benefits) The company sponsors various defined benefit pension and postretirement plans, with total expenses of **$30.9 million** in 2022 - The company sponsors **qualified defined benefit pension plans** and **nonqualified defined benefit plans**, along with a defined benefit postretirement life insurance plan[417](index=417&type=chunk)[418](index=418&type=chunk)[419](index=419&type=chunk) - Total expenses recognized under all retirement plans were **$30.9 million** in 2022, **$19.2 million** in 2021, and **$17.4 million** in 2020[415](index=415&type=chunk) Projected Benefit Obligation (PBO) and Fair Value of Plan Assets (as of December 25, 2022 vs. December 26, 2021, in thousands) | Item | Pension Benefits 2022 ($) | Pension Benefits 2021 ($) | Other Benefits 2022 ($) | Other Benefits 2021 ($) | | :-------------------------------------- | :------------------------ | :------------------------ | :---------------------- | :---------------------- | | Projected benefit obligation, end of year | 236,147 | 373,062 | 1,169 | 1,346 | | Fair value of plan assets, end of year | 210,133 | 326,409 | — | — | | Unfunded benefit obligation, end of year| (26,014) | (46,653) | (1,169) | (1,346) | Net Periodic Benefit Costs (2022 vs. 2021 vs. 2020, in thousands) | Item | Pension Benefits 2022 ($) | Pension Benefits 2021 ($) | Pension Benefits 2020 ($) | Other Benefits 2022 ($) | Other Benefits 2021 ($) | Other Benefits 2020 ($) | | :-------------------------------------- | :------------------------ | :------------------------ | :------------------------ | :---------------------- | :---------------------- | :---------------------- | | Net cost (income) | (212) | 215 | 640 | 23 | 41 | 43 | Weighted Average Assumptions for Benefit Obligation (2022 vs. 2021 vs. 2020) | Metric | Pension Benefits 2022 | Pension Benefits 2021 | Pension Benefits 2020 | Other Benefits 2022 | Other Benefits 2021 | Other Benefits 2020 | | :------------ | :-------------------- | :-------------------- | :-------------------- | :------------------ | :------------------ | :------------------ | | Discount rate | 5.04% | 2.23% | 1.83% | 5.16% | 2.38% | 1.80% | - The company anticipates contributing **$0.8 million** to its pension plans and less than **$0.2 million** to its other postretirement plans during 2023[444](index=444&type=chunk) [16. Incentive Compensation](index=84&type=section&id=16.%20Incentive%20Compensation) The company offers short-term cash/stock-based incentive plans and a long-term equity-based incentive plan (LTIP) for employees - The company sponsors short-term incentive plans with cash or stock-based bonus awards based on performance goals, accruing **$61.8 million** for U.S., **$6.9 million** for U.K. & Europe, and **$3.5 million** for Mexico in 2022[451](index=451&type=chunk) - A performance-based, omnibus **long-term incentive plan (LTIP)** grants equity-based and liability-based awards to officers, employees, directors, and consultants[452](index=452&type=chunk) Stock-Based Compensation Costs and Income Tax Benefit (2022 vs. 2021 vs. 2020, in thousands) | Item | 2022 ($) | 2021 ($) | 2020 ($) | | :-------------------------------------- | :------- | :------- | :------- | | Equity-based awards compensation cost | 6,863 | 10,629 | 2,776 | | Equity-based awards income tax benefit | 1,671 | 2,587 | 676 | | Liability-based awards compensation cost| 1,773 | 7,715 | 1,081 | | Liability-based awards income tax benefit | 432 | 1,878 | 263 | - As of December 25, 2022, total unrecognized compensation cost for nonvested equity-based awards was **$9.5 million** (weighted average period of **2.17 years**) and for nonvested liability-based awards was **$2.5 million** (weighted average period of **1.60 years**)[457](index=457&type=chunk) [17. Fair Value Measurements](index=85&type=section&id=17.%20Fair%20Value%20Measurements) The company measures derivative assets and liabilities at fair value, categorizing them into Level 1 or Level 2 based on observable inputs - The company measures **derivative assets and liabilities at fair value** on a recurring basis, categorizing them into **Level 1 or Level 2** based on quoted prices or observable inputs[459](index=459&type=chunk)[460](index=460&type=chunk)[461](index=461&type=chunk) Fair Value Measurements of Derivative Assets and Liabilities (as of December 25, 2022, in thousands) | Item | Level 1 ($) | Level 2 ($) | Total ($) | | :-------------------------------------- | :---------- | :---------- | :-------- | | **Assets:** | | | | | Commodity derivative assets | 17,922 | — | 17,922 | | Foreign currency derivative assets | 555 | — | 555 | | **Liabilities:** | | | | | Commodity derivative liabilities | (9,042) | — | (9,042) | | Foreign currency derivative liabilities | (6,170) | — | (6,170) | | Interest rate swap derivative liabilities | — | — | — | | Sales contract derivative liabilities | — | (3,705) | (3,705) | - The **fair values of fixed-rate senior notes are based on quoted market prices (Level 2)**, while **variable-rate term notes and secured loans are based on discounted cash flow models (Level 3)**[465](index=465&type=chunk)[467](index=467&type=chunk) [18. Restructuring-Related Activities](index=87&type=section&id=18.%20Restructuring-Related%20Activities) In 2022, the company initiated a U.K. and Europe restructuring, expecting **$58.0 million** in pre-tax charges, largely completed by Q2 2023 - In 2022, the company initiated a **restructuring initiative in the U.K. and Europe segment** to phase out and reduce processing volumes at multiple production facilities[469](index=469&type=chunk) - The initiative is expected to result in total pre-tax charges of approximately **$58.0 million**, with **$53.0 million** estimated as cash outlays, and is expected to be substantially completed by Q2 2023[469](index=469&type=chunk) Estimated Restructuring Costs by Type (in thousands) | Type of Cost | Moy Park ($) | Pilgrim's Pride Ltd. ($) | Pilgrim's Food Masters ($) | Total Estimated Amount Expected to be Incurred ($) | | :---------------------- | :----------- | :----------------------- | :------------------------- | :------------------------------------------------- | | Contract termination | 9,437 | 833 | 2,170 | 12,440 | | Asset impairment | 3,559 | — | — | 3,559 | | Severance | 8,244 | 6,160 | 5,303 | 19,707 | | Employee retention benefits | 1,398 | 276 | — | 1,674 | | Other employee costs | 301 | 181 | 121 | 603 | | Lease termination | 458 | 642 | 1,808 | 2,908 | | Inventory adjustment | 470 | 615 | — | 1,085 | | Other charges | 7,543 | 1,386 | 7,110 | 16,039 | | **Total estimated costs, net**| **31,410** | **10,093** | **16,512** | **58,015** | Restructuring Expenses and Cash Outlays (2022, in thousands) | Initiative | Expenses ($) | Cash Outlays ($) | | :-------------------- | :----------- | :--------------- | | Moy Park | 19,325 | 10,526 | | Pilgrim's Pride Ltd. | 10,140 | 2,590 | | Pilgrim's Food Masters| 1,001 | 341 | | **Total** | **30,466** | **13,457** | [19. Related Party Transactions](index=88&type=section&id=19.%20Related%20Party%20Transactions) This section details sales, purchases, receivables, and payables with related parties, including JBS USA Food Company Sales to Related Parties (2022 vs. 2021 vs. 2020, in thousands) | Related Party | 2022 ($) | 2021 ($) | 2020 ($) | | :---------------------- | :------- | :------- | :------- | | JBS USA Food Company | 24,224 | 17,296 | 14,228 | | JBS Australia Pty. Ltd. | 2,855 | 2,439 | 2,540 | | Other related parties | 2,868 | 1,721 | 1,112 | | **Total sales** | **29,947** | **21,456** | **17,880** | Cost of Goods Purchased from Related Parties (2022 vs. 2021 vs. 2020, in thousands) | Related Party | 2022 ($) | 2021 ($) | 2020 ($) | | :---------------------------- | :------- | :------- | :------- | | JBS USA Food Company | 156,452 | 210,657 | 142,615 | | Seara Meats B.V. | 44,364 | 4,722 | 8,138 | | Penasul UK LTD | 13,516 | 6,697 | — | | JBS Asia CO Limited | 7,762 | 5 | — | | Other related parties | 1,476 | 1,054 | 829 | | **Total cost of goods purchased** | **223,570**| **223,135**| **151,582**| Accounts Receivable from Related Parties (as of December 25, 2022 vs. December 26, 2021, in thousands) | Related Party | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :------------------------------ | :--------------- | :--------------- | | JBS USA Food Company | 2,062 | 1,059 | | Seara Meats B.V. | 61 | — | | Other related parties | 389 | 286 | | **Total accounts receivable** | **2,512** | **1,345** | Accounts Payable to Related Parties (as of December 25, 2022 vs. December 26, 2021, in thousands) | Related Party | Dec 25, 2022 ($) | Dec 26, 2021 ($) | | :------------------------------ | :--------------- | :--------------- | | JBS USA Food Company | 7,434 | 21,628 | | JBS Asia Co Limited | 2,099 | — | | Seara Meats B.V. | 1,565 | 534 | | Penasul UK LTD | 940 | 147 | | Other related parties | 117 | 8 | | **Total accounts payable** | **12,155** | **22,317** | - The company has **agreements with JBS USA** to allocate costs for SAP licenses and maintenance services, and for supporting business operations by a consolidated corporate team[479](index=479&type=chunk) - A tax sharing agreement with JBS USA Holdings resulted in a **$1.6 million** net tax payable for 2022, accrued as a capital distribution and related party account payable[386](index=386&type=chunk)[480](index=480&type=chunk) [20. Reportable Segments](index=89&type=section&id=20.%20Reportable%20Segments) The company operates in three reportable segments: U.S., U.K. and Europe, and Mexico, with segment profit measured as operating income - The company operates in **three reportable segments**: U.S., U.K. and Europe, and Mexico, with segment profit measured as operating income and corporate expenses allocated based on specific expenditures[481](index=481&type=chunk) Net Sales by Reportable Segment (2022 vs. 2021 vs. 2020, in thousands) | Segment | 2022 ($) | 2021 ($) | 2020 ($) | | :-------------- | :----------- | :----------- | :----------- | | U.S. | 10,748,350 | 9,113,879 | 7,496,017 | | U.K. and Europe | 4,874,738 | 3,934,062 | 3,274,292 | | Mexico | 1,845,289 | 1,729,517 | 1,321,592 | | **Total** | **17,468,377** | **14,777,458** | **12,091,901** | Operating Income by Reportable Segment (2022 vs. 2021 vs. 2020, in thousands) | Segment | 2022 ($) | 2021 ($) | 2020 ($) | | :-------------- | :---------- | :--------- | :--------- | | U.S. | 1,094,025 | (17,036) | 69,377 | | U.K. and Europe | (934) | (627) | 102,734 | | Mexico | 83,450 | 228,773 | 72,879 | | Eliminat

Financial Data and Key Metrics Changes - For Q4 2022, the company reported net revenues of $4.13 billion, an increase from $4.04 billion in the previous year, with adjusted EBITDA of $63 million and an adjusted EBITDA margin of 1.5%, down from $317 million and 7.8% in Q4 2021 [3][37] - For the fiscal year, net revenues were $17.5 billion, an 18.2% increase over the previous year, with adjusted EBITDA of $1.65 billion and a margin of 9.4%, compared to $1.29 billion and 8.7% in 2021 [24][66] Business Line Data and Key Metrics Changes - In the U.S., adjusted EBITDA for Q4 was $15.8 million, slightly above breakeven, while for the full year, adjusted EBITDA was $1.37 billion with a margin of 12.7%, up from $896 million and 9.8% in 2021 [38][67] - The European business saw adjusted EBITDA of $62.9 million in Q4, up from $24.7 million in 2021, and for the full year, adjusted EBITDA was $168.7 million compared to $137.8 million in 2021 [39] - Mexico reported a loss of $15.8 million in adjusted EBITDA for Q4, down from a profit of $27 million last year, but achieved $113 million in adjusted EBITDA for the full year [40] Market Data and Key Metrics Changes - The U.S. chicken supply for Q4 increased by 6% year-over-year, driven by headcount and higher average live weights, while total protein availability was much higher than anticipated [26][27] - The retail channel for chicken experienced stable volumes in Q4, with dollar sales growing at a double-digit rate, while volume sales remained relatively flat [10] - The foodservice channel grew in volume and dollar sales, with non-commercial segments posting significant year-over-year gains [11] Company Strategy and Development Direction - The company emphasized portfolio diversification, key customer focus, and operational excellence to mitigate market volatility [22] - Investments in operational excellence and automation are ongoing, with a focus on enhancing margins and scaling profitable growth [23][34] - The company is committed to capital spending plans that prioritize safety, optimize product mix, and strengthen partnerships with key customers [41] Management's Comments on Operating Environment and Future Outlook - Management noted that inflationary headwinds and market volatility were significant challenges throughout the year, but the team effectively engaged with key customers to mitigate costs [24] - The outlook for 2023 includes expectations for improved market conditions, particularly in the big bird segment, as supply-demand dynamics are anticipated to stabilize [87] - The company remains confident in the long-term prospects for both its Prepared Foods and Fresh branded business, particularly in Mexico [64] Other Important Information - The company recorded a GAAP net loss of $155 million in Q4, influenced by a discrete income tax charge related to a Mexican tax matter [66] - The company has a strong balance sheet with approximately $1.4 billion in total cash and available credit, and no immediate cash requirements [42] Q&A Session Summary Question: Supply and demand in the U.S. market - Management indicated that USDA estimates suggest a significant reduction in chicken production for the second half of the year, with expectations of demand shifting from beef to chicken due to its affordability [47][50] Question: Profitability in the non-commodity parts of the U.S. chicken segment - Management highlighted that despite challenges in the big bird market, the small bird segment continues to see stable margins due to strong partnerships with key customers [86] Question: Challenges in the Mexican market - Management acknowledged the volatility in the Mexican market but noted improvements in financial results as the market has moved towards balance [40][88] Question: Cold storage levels and inventory management - Management discussed the high levels of breast meat in cold storage and indicated that it typically takes several months to work through such inventory levels [117]

Net sales $ 4,127,365 $ 4,038,769 $17,468,377 $14,777,458 $4,127,365 $4,038,769 $17,468,377 $14,777,458 Appendix: Reconciliation of EBITDA Margin EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by net sales for the applicable period. EBITDA margins are presented because they are used by management and we believe they are frequently used by securities analysts, investors and other interested parties, as a supplement to our results prepared in accordance with ...

Pilgrim's Pride Corporation (NASDAQ:PPC) Q3 2022 Earnings Conference Call October 27, 2022 9:00 AM ET Company Participants Andy Rojeski - Head-Strategy, IR and Net Zero Programs Fabio Sandri - President and CEO Matt Galvanoni - CFO Conference Call Participants Ben Theurer - Barclays Ben Bienvenu - Stephens Ken Zaslow - Bank of Montreal Peter Galbo - Bank of America Adam Samuelson - Goldman Sachs Operator Good morning, and welcome to the Third Quarter 2022 Pilgrim's Pride Earnings Conference Call and Webcast ...

Pilgrim's. Financial Results for Third Quarter Ended September 25, 2022 Pilgrim's Pride Corporation (NASDAQ: PPC) Cautionary Notes and Forward-Looking Statements ◼ Statements contained in this press release that state the intentions, plans, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim's Pride Corporation and its management are considered forward-looking statements. Without limiting the foregoing, words such as "anticipates," "believes," "estimates," "expects," "intends ...

PART I. FINANCIAL INFORMATION Presents the company's comprehensive financial statements and detailed notes for the reporting period [ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Pilgrim's Pride Corporation's unaudited condensed consolidated financial statements and detailed notes for periods ended September 25, 2022, and December 26, 2021 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, as of specific reporting dates Condensed Consolidated Balance Sheet Highlights (In thousands) | Metric | Sep 25, 2022 | Dec 26, 2021 | | :--------------------------------- | :----------- | :----------- | | Cash and cash equivalents | $654,213 | $427,661 | | Total current assets | $4,032,920 | $3,305,954 | | Total assets | $9,079,012 | $8,913,205 | | Total current liabilities | $2,607,815 | $2,390,823 | | Total liabilities | $6,338,763 | $6,324,271 | | Total stockholders' equity | $2,740,249 | $2,588,934 | - **Total assets** increased to **$9.08 billion** as of September 25, 2022, from **$8.91 billion** at December 26, 2021, while **total liabilities** slightly increased to **$6.34 billion** from **$6.32 billion**[11](index=11&type=chunk) - **Total stockholders' equity** increased to **$2.74 billion** as of September 25, 2022, from **$2.59 billion** at December 26, 2021[11](index=11&type=chunk) [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Details the company's revenues, expenses, and net income (loss) over specific reporting periods Condensed Consolidated Statements of Income Highlights (In thousands, except per share data) | Metric | 3 Months Ended Sep 25, 2022 | 3 Months Ended Sep 26, 2021 | 9 Months Ended Sep 25, 2022 | 9 Months Ended Sep 26, 2021 | | :------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $4,468,969 | $3,827,566 | $13,341,012 | $10,738,689 | | Gross profit | $497,270 | $371,843 | $1,716,021 | $1,013,327 | | Operating income | $339,202 | $120,777 | $1,254,119 | $156,110 | | Net income (loss) attributable to Pilgrim's Pride Corporation | $258,352 | $60,725 | $900,906 | $(5,754) | | Diluted EPS | $1.08 | $0.25 | $3.73 | $(0.02) | - **Net sales** for the nine months ended September 25, 2022, increased by **24.2%** to **$13.34 billion**, compared to **$10.74 billion** in the prior year period[13](index=13&type=chunk) - **Net income attributable to Pilgrim's Pride Corporation** significantly improved to **$900.9 million** (**$3.73 diluted EPS**) for the nine months ended September 25, 2022, from a net loss of **$5.75 million** (**$0.02 diluted EPS**) in the same period last year[13](index=13&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Reports net income and other comprehensive income (loss) components, reflecting total changes in equity from non-owner sources Condensed Consolidated Statements of Comprehensive Income Highlights (In thousands) | Metric | 3 Months Ended Sep 25, 2022 | 3 Months Ended Sep 26, 2021 | 9 Months Ended Sep 25, 2022 | 9 Months Ended Sep 26, 2021 | | :------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net income (loss) | $258,999 | $60,835 | $901,580 | $(5,200) | | Total other comprehensive income (loss), net of tax | $(313,019) | $(42,156) | $(556,997) | $37,818 | | Comprehensive income (loss) attributable to Pilgrim's Pride Corporation | $(54,667) | $18,569 | $343,909 | $32,064 | - **Total other comprehensive loss**, net of tax, was **$(557.0) million** for the nine months ended September 25, 2022, primarily due to foreign currency translation adjustments[15](index=15&type=chunk) - **Comprehensive income attributable to Pilgrim's Pride Corporation** for the nine months ended September 25, 2022, was **$343.9 million**, a significant increase from **$32.1 million** in the prior year period[15](index=15&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Outlines changes in the company's equity accounts, including net income, other comprehensive income, and share transactions Changes in Stockholders' Equity (Nine Months Ended Sep 25, 2022, In thousands) | Metric | Balance at Dec 26, 2021 | Net Income | Other Comprehensive Loss | Stock-based Compensation | Common Stock Purchased | Balance at Sep 25, 2022 | | :--------------------------------- | :---------------------- | :--------- | :----------------------- | :----------------------- | :--------------------- | :---------------------- | | Total Stockholders' Equity | $2,588,934 | $900,906 | $(556,997) | $6,285 | $(199,553) | $2,740,249 | - The company repurchased **7.47 million shares** of common stock for approximately **$199.6 million** during the nine months ended September 25, 2022[18](index=18&type=chunk) - **Retained earnings** increased significantly from **$1,003.57 million** at December 26, 2021, to **$1,904.48 million** at September 25, 2022, driven by net income[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows Highlights (Nine Months Ended, In thousands) | Cash Flow Activity | Sep 25, 2022 | Sep 26, 2021 | | :--------------------------------- | :----------- | :----------- | | Operating activities | $790,613 | $327,495 | | Investing activities | $(330,334) | $(1,211,871) | | Financing activities | $(212,375) | $901,546 | | Effect of exchange rate changes | $(13,932) | $(381) | | Increase in cash, cash equivalents, restricted cash and restricted cash equivalents | $233,972 | $16,789 | - **Cash provided by operating activities** increased significantly to **$790.6 million** for the nine months ended September 25, 2022, from **$327.5 million** in the prior year period[22](index=22&type=chunk) - **Cash used in investing activities** decreased to **$330.3 million**, compared to **$1.21 billion** in the prior year, primarily due to a lower purchase of acquired businesses[22](index=22&type=chunk) - **Cash used in financing activities** was **$212.4 million**, a shift from **$901.5 million** provided in the prior year, mainly due to common stock repurchases and changes in debt activities[22](index=22&type=chunk) [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=9&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=1.%20BUSINESS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Describes the company's operations, product offerings, and key accounting principles applied in financial reporting - Pilgrim's Pride Corporation is one of the largest chicken producers globally, with operations in the U.S., U.K., Mexico, France, Puerto Rico, the Netherlands, and the Republic of Ireland, serving foodservice, retail, and frozen entrée customers[25](index=25&type=chunk) - The Company's product offerings include fresh (refrigerated whole or cut-up chicken, primary pork cuts) and prepared products (fully cooked chicken parts, processed sausages, bacon), as well as plant-based protein, ready-to-eat meals, and hot food-to-go solutions[25](index=25&type=chunk) - As of September 25, 2022, Pilgrim's had over **61,800 employees**, capacity to process approximately **43.1 million birds** and **49,500 pigs** per 5-day work week, and JBS S.A. beneficially owned **82.7%** of its outstanding common stock[25](index=25&type=chunk) - The Company adopted ASU 2021-10, Government Assistance, in 2022, which did not materially impact its financial statements, and plans to adopt ASU 2020-04, Reference Rate Reform, and ASU 2022-04, Supplier Finance Programs, effective December 26, 2022, with no material impact expected from the former[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [2. BUSINESS ACQUISITION](index=11&type=section&id=2.%20BUSINESS%20ACQUISITION) Details the financial impact and strategic rationale of recent business acquisitions - On September 24, 2021, Pilgrim's acquired **100%** of Kerry Consumer Foods' meats and meals businesses (Pilgrim's Food Masters, PFM) for **$954.1 million**, solidifying its position as a leading European food company[38](index=38&type=chunk) - The PFM acquisition contributed **$247.6 million** in net sales and **$4.9 million** in net income for the three months ended September 25, 2022, and **$774.1 million** in net sales and **$10.3 million** in net income for the nine months ended September 25, 2022[40](index=40&type=chunk) - **Goodwill of $353.4 million** was recorded, driven by strategic and synergistic benefits including complementary products, enhanced footprint in the U.K. and Republic of Ireland, and strengthened position in plant-based protein, direct-to-consumer, and hot food-to-go markets[41](index=41&type=chunk)[42](index=42&type=chunk) [3. REVENUE RECOGNITION](index=12&type=section&id=3.%20REVENUE%20RECOGNITION) Explains the company's policies and disaggregated data related to revenue generation from customer contracts - Revenue is primarily derived from customer orders, with control transferring upon destination or customer pick-up, typically within days to weeks of order acceptance[45](index=45&type=chunk)[46](index=46&type=chunk) Disaggregated Net Sales by Segment and Product Type (In thousands) | Segment | Fresh (9M Sep 2022) | Prepared (9M Sep 2022) | Export (9M Sep 2022) | Other (9M Sep 2022) | Total (9M Sep 2022) | | :---------------- | :------------------ | :--------------------- | :------------------- | :------------------ | :------------------ | | U.S. | $6,709,441 | $839,164 | $421,517 | $347,885 | $8,318,007 | | U.K. and Europe | $674,758 | $2,320,873 | $538,878 | $105,620 | $3,640,129 | | Mexico | $1,200,329 | $116,264 | — | $66,283 | $1,382,876 | | **Total** | **$8,584,528** | **$3,276,301** | **$960,395** | **$519,788** | **$13,341,012** | - **Revenue contract liabilities** increased to **$35.7 million** as of September 25, 2022, from **$22.3 million** at December 26, 2021, reflecting payments received in advance of satisfying performance obligations[51](index=51&type=chunk)[53](index=53&type=chunk) [4. DERIVATIVE FINANCIAL INSTRUMENTS](index=14&type=section&id=4.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) Discusses the company's use of derivatives to manage commodity price and foreign currency risks, including their fair values - The Company uses exchange-traded futures and options to mitigate price risk for commodity inputs (corn, soybean meal, wheat, etc.) and foreign currency forward contracts to manage translational foreign exchange risk in its international operations[55](index=55&type=chunk)[56](index=56&type=chunk) Derivative Financial Instruments Fair Values (In thousands) | Metric | Sep 25, 2022 | Dec 26, 2021 | | :--------------------------------- | :----------- | :----------- | | Commodity derivative assets | $16,641 | $17,567 | | Commodity derivative liabilities | $(11,720) | $(14,119) | | Foreign currency derivative assets | $5,403 | $518 | | Foreign currency derivative liabilities | $(2,027) | $(4,958) | | Sales contract derivative liabilities | $(11,243) | $(12,691) | | Cash collateral posted with brokers | $29,880 | $22,459 | - For the nine months ended September 25, 2022, commodity derivatives generated **$47.8 million** in gains (recognized in Cost of sales), while foreign currency derivatives resulted in **$18.6 million** in losses (recognized in Foreign currency transaction losses)[64](index=64&type=chunk) [5. TRADE ACCOUNTS AND OTHER RECEIVABLES](index=16&type=section&id=5.%20TRADE%20ACCOUNTS%20AND%20OTHER%20RECEIVABLES) Provides a breakdown of the company's receivables and the allowance for credit losses Trade Accounts and Other Receivables (In thousands) | Metric | Sep 25, 2022 | Dec 26, 2021 | | :--------------------------------- | :----------- | :----------- | | Trade accounts receivable | $1,031,180 | $947,697 | | Receivables, gross | $1,124,560 | $1,023,110 | | Allowance for credit losses | $(9,404) | $(9,673) | | Receivables, net | $1,115,156 | $1,013,437 | | Accounts receivable from related parties | $9,855 | $1,345 | - **Net receivables** increased to **$1.12 billion** as of September 25, 2022, from **$1.01 billion** at December 26, 2021, primarily driven by an increase in trade accounts receivable[71](index=71&type=chunk) - The **allowance for credit losses** decreased slightly from **$(9.67) million** at the beginning of the period to **$(9.40) million** at September 25, 2022, with a provision charged to operating results of **$(0.77) million**[72](index=72&type=chunk) [6. INVENTORIES](index=17&type=section&id=6.%20INVENTORIES) Details the composition and valuation of the company's inventory, including raw materials and finished products Inventories Composition (In thousands) | Metric | Sep 25, 2022 | Dec 26, 2021 | | :--------------------------------- | :----------- | :----------- | | Raw materials and work-in-process | $1,215,034 | $1,034,518 | | Finished products | $548,960 | $369,292 | | Operating supplies | $82,949 | $87,332 | | Maintenance materials and parts | $87,755 | $84,516 | | Total inventories | $1,934,698 | $1,575,658 | - **Total inventories** increased to **$1.93 billion** as of September 25, 2022, from **$1.58 billion** at December 26, 2021, primarily due to increases in raw materials and work-in-process and finished products[73](index=73&type=chunk) [7. INVESTMENTS IN SECURITIES](index=17&type=section&id=7.%20INVESTMENTS%20IN%20SECURITIES) Outlines the company's investments in available-for-sale securities and related realized gains or losses Available-for-Sale Securities (In thousands) | Metric | Cost (Sep 25, 2022) | Fair Value (Sep 25, 2022) | Cost (Dec 26, 2021) | Fair Value (Dec 26, 2021) | | :-------------------- | :------------------ | :------------------------ | :------------------ | :------------------------ | | Fixed income securities | $359,542 | $359,660 | $48,851 | $48,851 | - **Gross realized gains** from available-for-sale securities were **$3.3 million** for the nine months ended September 25, 2022, compared to **$3.9 million** in the prior year period[74](index=74&type=chunk) [8. GOODWILL AND INTANGIBLE ASSETS](index=18&type=section&id=8.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Presents the carrying amounts and changes in goodwill and other intangible assets by segment Goodwill by Segment (In thousands) | Segment | Dec 26, 2021 | Additions | Currency Translation | Sep 25, 2022 | | :---------------- | :----------- | :-------- | :------------------- | :----------- | | U.S. | $41,936 | — | — | $41,936 | | U.K. and Europe | $1,167,512 | $5,401 | $(218,367) | $954,546 | | Mexico | $127,804 | — | — | $127,804 | | Total | $1,337,252 | $5,401 | $(218,367) | $1,124,286 | - **Total goodwill** decreased to **$1.12 billion** as of September 25, 2022, from **$1.34 billion** at December 26, 2021, primarily due to a **$(218.4) million** negative currency translation impact in the U.K. and Europe segment[75](index=75&type=chunk) Intangible Assets, Net (In thousands) | Metric | Dec 26, 2021 | Amortization | Disposals | Currency Translation | Sep 25, 2022 | | :-------------------------- | :----------- | :----------- | :-------- | :------------------- | :----------- | | Trade names not subject to amortization | $609,713 | — | — | $(119,483) | $490,230 | | Customer relationships | $455,459 | — | — | $(53,724) | $401,735 | | Accumulated amortization | $(216,517) | $(25,629) | $320 | $17,079 | $(224,747) | | Intangible assets, net | $963,243 | $(25,629) | — | $(157,993) | $779,621 | - **Net intangible assets** decreased to **$779.6 million** as of September 25, 2022, from **$963.2 million** at December 26, 2021, largely due to currency translation impacts and amortization[75](index=75&type=chunk) [9. PROPERTY, PLANT AND EQUIPMENT](index=18&type=section&id=9.%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT) Details the company's tangible long-lived assets, including their gross value, accumulated depreciation, and capital expenditures Property, Plant and Equipment, Net (In thousands) | Metric | Sep 25, 2022 | Dec 26, 2021 | | :--------------------------------- | :----------- | :----------- | | PP&E, gross | $6,141,422 | $6,209,852 | | Accumulated depreciation | $(3,329,373) | $(3,292,046) | | PP&E, net | $2,812,049 | $2,917,806 | - **Net property, plant, and equipment** decreased to **$2.81 billion** as of September 25, 2022, from **$2.92 billion** at December 26, 2021[77](index=77&type=chunk) - **Depreciation expense** for the nine months ended September 25, 2022, was **$275.3 million**, up from **$256.9 million** in the prior year period[77](index=77&type=chunk) - **Capital expenditures** totaled **$342.6 million** for the nine months ended September 25, 2022, primarily for efficiency improvements and cost reduction[78](index=78&type=chunk) [10. CURRENT LIABILITIES](index=20&type=section&id=10.%20CURRENT%20LIABILITIES) Provides a breakdown of the company's short-term financial obligations, excluding income taxes and long-term debt maturities Current Liabilities (Excluding Income Taxes and Current Maturities of Long-Term Debt, In thousands) | Metric | Sep 25, 2022 | Dec 26, 2021 | | :--------------------------------- | :----------- | :----------- | | Total accounts payable | $1,539,752 | $1,378,077 | | Accounts payable to related parties | $17,055 | $22,317 | | Revenue contract liabilities | $35,734 | $22,321 | | Total accrued expenses and other current liabilities | $857,189 | $859,885 | | Total | $2,449,730 | $2,282,600 | - **Total current liabilities** (excluding income taxes and current maturities of long-term debt) increased to **$2.45 billion** as of September 25, 2022, from **$2.28 billion** at December 26, 2021, mainly due to higher trade accounts payable[83](index=83&type=chunk) - **Litigation settlements accrued** decreased from **$172.4 million** to **$93.4 million**[83](index=83&type=chunk) [11. INCOME TAXES](index=21&type=section&id=11.%20INCOME%20TAXES) Discusses the company's income tax expense, effective tax rates, and the impact of recent tax legislation - **Income tax expense** for the nine months ended September 25, 2022, was **$253.7 million** (**21.9% effective tax rate**), a significant increase from **$55.9 million** (**110.3% effective tax rate**) in the prior year, primarily due to increased profit before income taxes[84](index=84&type=chunk) - The Company is analyzing the tax effects of the Inflation Reduction Act of 2022, which includes significant law changes applicable for tax years beginning after December 31, 2022[89](index=89&type=chunk) [12. DEBT](index=21&type=section&id=12.%20DEBT) Details the company's long-term debt obligations, credit facilities, and recent amendments to debt covenants Long-Term Debt (In thousands) | Debt Type | Maturity | Sep 25, 2022 | Dec 26, 2021 | | :--------------------------------- | :------- | :----------- | :----------- | | Senior notes payable at 3.50% | 2032 | $900,000 | $900,000 | | Senior notes payable at 4.25% | 2031 | $991,441 | $990,691 | | Senior notes payable at 5.875% | 2027 | $846,403 | $845,866 | | U.S. Credit Facility Term note payable at 4.43% | 2026 | $486,405 | $506,250 | | Long-term debt, less current maturities, net of capitalized financing costs | $3,183,951 | $3,191,161 | - On September 22, 2022, the Company amended its Senior Notes due 2031 and 2032 indentures to reflect its investment grade status, permanently eliminating certain restrictive covenants such as limitations on additional debt, restricted payments, and asset sales[95](index=95&type=chunk)[98](index=98&type=chunk) - The U.S. Credit Facility provides an **$800.0 million** revolving credit commitment (with **$763.9 million** available as of Sep 25, 2022) and a **$700.0 million** term loan commitment (**$486.4 million** outstanding)[100](index=100&type=chunk)[101](index=101&type=chunk) - The U.K. and Europe Revolver Facility provides a multicurrency revolving loan commitment of up to **£150.0 million** (**$162.9 million** U.S. dollar-equivalent), with **$10.9 million** outstanding as of September 25, 2022[105](index=105&type=chunk) [13. STOCKHOLDERS' EQUITY](index=24&type=section&id=13.%20STOCKHOLDERS%27%20EQUITY) Explains changes in the company's equity, including accumulated other comprehensive loss and share repurchase programs Accumulated Other Comprehensive Loss Components (Nine Months Ended Sep 25, 2022, In thousands) | Component | Balance, beginning of period | Other comprehensive income (loss) before reclassifications | Amounts reclassified to net income | Currency translation | Balance, end of period | | :--------------------------------- | :--------------------------- | :--------------------------------------------------------- | :--------------------------------- | :------------------- | :--------------------- | | Gains (Losses) Related to Foreign Currency Translation | $27,241 | $(572,130) | — | — | $(544,889) | | Losses on Derivative Financial Instruments Classified as Cash Flow Hedges | $(2,365) | $(2,317) | $2,637 | $75 | $(1,970) | | Losses Related to Pension and Other Postretirement Benefits | $(72,873) | $14,061 | $698 | — | $(58,114) | | Gains (Losses) on Available-for-Sale Securities | — | $(21) | — | — | $(21) | | Total | $(47,997) | $(560,407) | $3,335 | $75 | $(604,994) | - **Accumulated other comprehensive loss** increased to **$(605.0) million** as of September 25, 2022, from **$(48.0) million** at December 26, 2021, primarily due to significant foreign currency translation losses[108](index=108&type=chunk) - The Board of Directors approved a **$200.0 million** share repurchase program on March 8, 2022, under which the Company repurchased approximately **7.5 million shares** for **$199.6 million** as of September 25, 2022[111](index=111&type=chunk) [14. PENSION AND OTHER POSTRETIREMENT BENEFITS](index=25&type=section&id=14.%20PENSION%20AND%20OTHER%20POSTRETIREMENT%20BENEFITS) Outlines the company's defined benefit and contribution plans, including their funded status and related expenses - **Total expenses** for all retirement plans were **$23.9 million** for the nine months ended September 25, 2022, compared to **$13.6 million** in the prior year period[114](index=114&type=chunk) Defined Benefit Plans Funded Status (In thousands) | Metric | Pension Benefits (Sep 25, 2022) | Other Benefits (Sep 25, 2022) | Pension Benefits (Dec 26, 2021) | Other Benefits (Dec 26, 2021) | | :--------------------------------- | :------------------------------ | :---------------------------- | :------------------------------ | :---------------------------- | | Projected benefit obligation, end of period | $236,565 | $1,121 | $386,424 | $1,472 | | Fair value of plan assets, end of period | $218,144 | — | $331,879 | — | | Unfunded benefit obligation, end of period | $(18,421) | $(1,121) | $(46,653) | $(1,346) | - The **unfunded benefit obligation for pension plans** decreased to **$(18.4) million** as of September 25, 2022, from **$(46.7) million** at December 26, 2021, primarily due to actuarial gains[115](index=115&type=chunk) - **Defined contribution plan expenses** were **$21.0 million** for the nine months ended September 25, 2022[121](index=121&type=chunk) [15. FAIR VALUE MEASUREMENT](index=28&type=section&id=15.%20FAIR%20VALUE%20MEASUREMENT) Describes the company's methodology for fair value measurements of financial instruments across different input levels - The Company categorizes fair value measurements into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[122](index=122&type=chunk) Fair Value of Financial Instruments (In thousands) | Instrument | Level 1 (Sep 25, 2022) | Level 2 (Sep 25, 2022) | Total (Sep 25, 2022) | | :--------------------------------- | :--------------------- | :--------------------- | :------------------- | | Commodity derivative assets | $16,641 | — | $16,641 | | Foreign currency derivative assets | $5,403 | — | $5,403 | | Commodity derivative liabilities | $(11,721) | — | $(11,721) | | Foreign currency derivative liabilities | $(2,027) | — | $(2,027) | | Sales contract derivative liabilities | — | $(11,243) | $(11,243) | - The **fair value of fixed-rate senior notes payable** (Level 2 inputs) was lower than their carrying amount as of September 25, 2022, indicating a market discount[129](index=129&type=chunk) [16. RELATED PARTY TRANSACTIONS](index=29&type=section&id=16.%20RELATED%20PARTY%20TRANSACTIONS) Details significant transactions and balances with related parties, including sales and purchases Related Party Transactions (Nine Months Ended, In thousands) | Transaction Type | Sep 25, 2022 | Sep 26, 2021 | | :--------------------------------- | :----------- | :----------- | | Total sales to related parties | $22,025 | $14,844 | | Total cost of goods purchased from related parties | $165,517 | $178,770 | | Total expenditures paid by related parties | $73,045 | $68,039 | | Total expenditures paid on behalf of related parties | $46,895 | $35,457 | - **Sales to related parties** increased to **$22.0 million** for the nine months ended September 25, 2022, from **$14.8 million** in the prior year, with JBS USA Food Company being the largest counterparty[133](index=133&type=chunk) - **Cost of goods purchased from related parties** decreased to **$165.5 million** for the nine months ended September 25, 2022, from **$178.8 million** in the prior year[133](index=133&type=chunk) [17. REPORTABLE SEGMENTS](index=31&type=section&id=17.%20REPORTABLE%20SEGMENTS) Provides financial performance data, including net sales and operating income, for each of the company's operating segments - The Company operates in three reportable segments: U.S., U.K. and Europe, and Mexico, with segment profit measured as operating income[135](index=135&type=chunk) Net Sales by Reportable Segment (Nine Months Ended, In thousands) | Segment | Sep 25, 2022 | Sep 26, 2021 | | :---------------- | :----------- | :----------- | | U.S. | $8,318,007 | $6,714,879 | | U.K. and Europe | $3,640,129 | $2,721,019 | | Mexico | $1,382,876 | $1,302,791 | | Total | $13,341,012 | $10,738,689 | Reportable Segment Profit (Operating Income, Nine Months Ended, In thousands) | Segment | Sep 25, 2022 | Sep 26, 2021 | | :---------------- | :----------- | :----------- | | U.S. | $1,146,821 | $(85,380) | | U.K. and Europe | $406 | $32,771 | | Mexico | $106,850 | $208,677 | | Total operating income | $1,254,119 | $156,110 | - The **U.S. segment's operating income** significantly improved to **$1.15 billion** for the nine months ended September 25, 2022, from a loss of **$(85.4) million** in the prior year[142](index=142&type=chunk) [18. COMMITMENTS AND CONTINGENCIES](index=32&type=section&id=18.%20COMMITMENTS%20AND%20CONTINGENCIES) Details the company's legal and regulatory exposures, including antitrust litigation and tax assessments - The Company is appealing Mexican tax assessments totaling approximately **$276.8 million** for tax years 2009, 2010, and related to the acquisition of Tyson de México, with no loss recorded at this time[147](index=147&type=chunk)[148](index=148&type=chunk) - In the Broiler Chicken Antitrust Litigation, PPC settled claims with Direct Purchaser Plaintiffs (DPPs) for **$75.0 million**, End-User Consumer Indirect Purchaser Plaintiff Class (EUCPs) for **$75.5 million**, and Commercial and Institutional Indirect Purchaser Plaintiff Class (CIIPPs) for **$45.0 million**[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - PPC has recognized an expense of **$508.6 million** to cover settlements with various Opt Outs in the Broiler Chicken Antitrust Litigation and continues to litigate against remaining Opt Outs[153](index=153&type=chunk) - The DOJ opened civil investigations into human resources antitrust matters (Feb 2022) and grower contracts and payment practices (Oct 2022), with PPC cooperating[170](index=170&type=chunk) [19. BUSINESS INTERRUPTION INSURANCE](index=36&type=section&id=19.%20BUSINESS%20INTERRUPTION%20INSURANCE) Reports on insurance proceeds received related to business interruptions, such as natural disasters - Following a tornado in Mayfield, Kentucky in December 2021, the Company received **$5.5 million** in business interruption insurance proceeds and recognized **$12.2 million** in income from such insurance for the three and nine months ended September 25, 2022[171](index=171&type=chunk) [20. SUBSEQUENT EVENTS](index=36&type=section&id=20.%20SUBSEQUENT%20EVENTS) Discloses significant events occurring after the reporting period that may impact the company's financial position - On September 6, 2022, a U.K. subsidiary announced proposed closures of two facilities, potentially affecting **610 employees** and incurring estimated exit or disposal costs of approximately **£7.9 million**[172](index=172&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=37&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Provides an executive summary of Pilgrim's Pride Corporation's financial performance, global economic impacts, and operational strategies for the nine months ended September 25, 2022 [Executive Summary](index=37&type=section&id=Executive%20Summary) Summarizes Pilgrim's Pride Corporation's financial performance, including net income, sales, and operating margins, for the nine months ended September 25, 2022 - For the nine months ended September 25, 2022, Pilgrim's reported **net income of $900.9 million** (**$3.73 diluted EPS**), **net sales of $13.3 billion**, and **cash provided by operating activities of $790.6 million**[173](index=173&type=chunk) - Consolidated operating margin was **9.4%**, with segment operating margins of **13.8%** (U.S.), **0.0%** (U.K. and Europe), and **7.7%** (Mexico)[173](index=173&type=chunk) - The Company faced significant challenges from inflation in commodity, labor, and other operating costs across all businesses, exacerbated by the Russia-Ukraine war impacting global feed ingredient and energy markets[174](index=174&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - In the U.K., labor shortages due to Brexit continued to affect processing, packing, and transport, while Mexico experienced volatility from inflationary pressures and bird disease[174](index=174&type=chunk)[184](index=184&type=chunk) - The Company is responding by negotiating with customers for cost recovery and focusing on operational initiatives to improve labor efficiencies, agricultural performance, and yields[175](index=175&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance, including net sales, gross profit, and operating income, across its segments for the reporting periods Net Sales Growth by Segment (YoY Change) | Segment | 3 Months Ended Sep 25, 2022 | 9 Months Ended Sep 25, 2022 | | :---------------- | :-------------------------- | :-------------------------- | | U.S. | +15.0% | +23.9% | | U.K. and Europe | +29.3% | +33.8% | | Mexico | -0.3% | +6.1% | | Total | +16.8% | +24.2% | - **U.S. net sales** increased by **$1.6 billion** (**23.9%**) for the nine months ended September 25, 2022, driven by price increases to recover higher feed ingredients, labor, and utility costs[200](index=200&type=chunk) - **U.K. and Europe net sales** increased by **$919.1 million** (**33.8%**) for the nine months, with **$774.1 million** attributed to the PFM acquisition and the remainder from price increases offsetting foreign currency translation and volume decreases[201](index=201&type=chunk) - **Gross profit** increased by **$702.7 million** (**69.3%**) to **$1.7 billion** for the nine months ended September 25, 2022, with the U.S. segment contributing **$1.4 billion**, up **116.8%** YoY[202](index=202&type=chunk) - **Operating income** surged by **$1.1 billion** (**703.4%**) to **$1.3 billion** for the nine months, primarily due to a significant improvement in the U.S. segment's operating income, which rose by **$1.2 billion**[205](index=205&type=chunk)[206](index=206&type=chunk) - **U.S. SG&A expense** decreased by **$471.5 million** (**64.0%**) for the nine months, mainly due to the recognition of legal settlements and acquisition transaction costs in the prior year[207](index=207&type=chunk) - **Net interest expense** slightly decreased to **$106.3 million** for the nine months, benefiting from a **$24.7 million** loss on early extinguishment of debt in the prior year, despite increased average borrowings[210](index=210&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet its financial obligations and fund operations through cash flows and available credit facilities Available Sources of Liquidity (As of Sep 25, 2022, In millions) | Source | Facility Amount | Amount Outstanding | Amount Available | | :--------------------------------- | :-------------- | :----------------- | :--------------- | | Cash and cash equivalents | — | — | $654.2 | | U.S. Credit Facility Revolving Note Payable | $800.0 | — | $763.9 | | U.S. Credit Facility Term Loans | $700.0 | $486.4 | — | | Mexico Credit Facility | $74.2 | — | $74.2 | | U.K. and Europe Revolver Facility | $162.9 | $10.9 | $152.0 | - The Company expects cash flows from operations and available credit facilities to provide sufficient liquidity for current obligations, working capital, debt maturities, and capital spending for at least the next twelve months[215](index=215&type=chunk) - **Cash provided by operating activities** for the nine months ended September 25, 2022, was **$790.6 million**, driven by net income and noncash expenses, partially offset by increased trade accounts receivable and inventories[216](index=216&type=chunk)[217](index=217&type=chunk)[219](index=219&type=chunk)[221](index=221&type=chunk) - **Cash used in financing activities** was **$212.4 million**, including **$199.5 million** for common stock repurchases and net payments on borrowings[226](index=226&type=chunk)[227](index=227&type=chunk) [Reconciliation of Net Income to EBITDA and Adjusted EBITDA](index=47&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA%20and%20Adjusted%20EBITDA) Provides a reconciliation of net income to non-GAAP measures EBITDA and Adjusted EBITDA, highlighting adjustments for specific financial items - EBITDA and Adjusted EBITDA are non-GAAP measures used by management and investors to compare company performance, with Adjusted EBITDA excluding foreign currency transaction losses, acquisition costs, litigation settlements, and property insurance recoveries[231](index=231&type=chunk) EBITDA and Adjusted EBITDA Reconciliation (Nine Months Ended Sep 25, 2022, In thousands) | Metric | Amount | | :--------------------------------- | :------- | | Net income | $901,580 | | Add: Interest expense, net | $106,346 | | Add: Income tax expense | $253,679 | | Add: Depreciation and amortization | $300,962 | | **EBITDA** | **$1,562,567** | | Add: Foreign currency transaction losses | $14,348 | | Add: Transaction costs related to business acquisitions | $972 | | Add: Litigation settlements | $28,282 | | Minus: Property insurance recoveries for Mayfield tornado losses | $19,997 | | Minus: Net income attributable to noncontrolling interest | $674 | | **Adjusted EBITDA** | **$1,585,498** | [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=49&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Outlines Pilgrim's Pride Corporation's exposure to market risks, including commodity prices, interest rates, and foreign currency exchange rates, with sensitivity analyses - A hypothetical **10% increase** in the weighted-average cost of primary feed ingredients would increase cost of sales by **$119.7 million** for the three months ended September 25, 2022, and increase inventories by **$24.7 million**[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) - A hypothetical **10% increase in interest rates** would decrease the fair value of fixed-rate debt by **$75.6 million** as of September 25, 2022[242](index=242&type=chunk) - An increase of **25 basis points** in variable interest rates would increase interest expense by **$2.5 million** for the three months ended September 25, 2022, given that variable-rate debt constitutes approximately **15.7%** of total debt[243](index=243&type=chunk) - A **10% weakening of the British pound** against the U.S. dollar would decrease the net assets of U.K. and Europe subsidiaries by **$218.8 million**, while a **10% appreciation** would increase them by **$267.4 million**[249](index=249&type=chunk) - The Company is responding to pronounced inflation in the U.S., Mexico, and Europe by negotiating with customers for cost recovery and implementing operational initiatives to improve efficiencies and yields[252](index=252&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=51&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Confirms that Pilgrim's Pride Corporation's management evaluated the effectiveness of its disclosure controls and procedures, concluding they were effective with no material changes - As of September 25, 2022, the Company's Chief Executive Officer and Chief Financial Officer concluded that the **disclosure controls and procedures were effective**[259](index=259&type=chunk) - No changes in internal control over financial reporting occurred during the three months ended September 25, 2022, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[260](index=260&type=chunk) PART II. OTHER INFORMATION Provides additional information including legal proceedings, risk factors, equity sales, and required exhibits [ITEM 1. LEGAL PROCEEDINGS](index=52&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Refers to Note 18, 'Commitments and Contingencies,' for detailed information regarding the Company's legal proceedings - Information regarding legal proceedings is incorporated by reference from Note 18. Commitments and Contingencies in Part I, Item 1 of this quarterly report[262](index=262&type=chunk) [ITEM 1A. RISK FACTORS](index=52&type=section&id=ITEM%201A.%20RISK%20FACTORS) Updates the Company's risk factors, highlighting new and ongoing concerns such as global economic impacts, commodity prices, and potential operational disruptions - The Russia-Ukraine war poses risks including higher commodity prices (food, ingredients, energy), increased inflation, and disrupted trade and supply chains, which could adversely affect the Company's business[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - Extreme weather, natural disasters, and man-made problems like power disruptions (e.g., potential U.K. power cuts in winter 2023) could impair operations, production, or transportation, materially impacting financial results[268](index=268&type=chunk)[269](index=269&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=53&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Details Pilgrim's Pride Corporation's share repurchase program, approved for $200.0 million, and the shares repurchased as of September 25, 2022 - On March 8, 2022, the Board of Directors approved a **$200.0 million** share repurchase program with no termination date[270](index=270&type=chunk) Issuer Purchases of Equity Securities (Three Months Ended Sep 25, 2022) | 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 | | :--------------------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :--------------------------------------------------------------------------------------- | | June 27, 2022 through July 24, 2022 | 260,464 | $29.9139 | 260,464 | $72,219,363 | | July 25, 2022 through August 28, 2022 | 494,654 | $29.7796 | 494,654 | $57,488,765 | | August 29, 2022 through September 25, 2022 | 2,081,950 | $27.3980 | 2,081,950 | $447,475 | | Total | 2,837,068 | $28.0442 | 2,837,068 | $447,475 | - As of September 25, 2022, the Company repurchased **7,468,645 shares** for an aggregate cost of **$199.6 million** at an average price of **$26.7187 per share**[270](index=270&type=chunk) [ITEM 6. EXHIBITS](index=54&type=section&id=ITEM%206.%20EXHIBITS) Lists the exhibits filed with the Form 10-Q, including corporate documents, supplemental indentures, and certifications - Exhibits include Amended and Restated Certificate of Incorporation and Bylaws, First Supplemental Indentures for Senior Notes, and Certifications of Principal Executive and Financial Officers (31.1, 31.2, 32.1, 32.2)[276](index=276&type=chunk) - The filing also includes Inline XBRL Instance Document and Taxonomy Extension files (Schema, Calculation, Definition, Label, Presentation)[276](index=276&type=chunk) [SIGNATURES](index=57&type=section&id=SIGNATURES) Contains the required signatures for the Form 10-Q, certifying its submission on behalf of Pilgrim's Pride Corporation - The report was signed on October 26, 2022, by Matthew Galvanoni, Chief Financial Officer and Chief Accounting Officer[279](index=279&type=chunk)

Pilgrim's Pride Corporation (NASDAQ:PPC) Q2 2022 Earnings Conference Call July 28, 2022 9:00 AM ET Company Participants Andy Rojeski - Head-Strategy, IR and Net Zero Programs Fabio Sandri - President and CEO Matt Galvanoni - CFO Conference Call Participants Ben Bienvenu - Stephens Ben Theurer - Barclays Ken Zaslow - Bank of Montreal Adam Samuelson - Goldman Sachs Michael Piken - Cleveland Research Peter Galbo - Bank of America Operator Good morning, and welcome to the Second Quarter 2022 Pilgrim's Pride Ear ...

Pilgrim's. Financial Results for Second Quarter Ended June 26, 2022 Pilgrim's Pride Corporation (NASDAQ: PPC) Cautionary Notes and Forward-Looking Statements ◼ Statements contained in this press release that state the intentions, plans, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim's Pride Corporation and its management are considered forward-looking statements. Without limiting the foregoing, words such as "anticipates," "believes," "estimates," "expects," "intends," " ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q | | | For the quarterly period ended June 26, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 PILGRIM'S PRIDE CORPORATION (Exact name of registrant as specified in its charter) Delaware 75-1285071 (State or other jurisdiction of incorporation or organization) 1770 Promontory Circle 80634-9038 Greeley CO (Address of principal executive offices) (Zip code) Registrant's telephone ...