Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 14, 2018
PILGRIM'S PRIDE CORPORATION
(Exact Name of registrant as specified in its charter)
 
Delaware
1-9273
75-1285071
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
 
 
1770 Promontory Circle
Greeley, CO
80634-9038
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (970) 506-8000
 
Not Applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 Emerging growth company o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o






Item 2.02. Results of Operations and Financial Condition.
On February 14, 2018, Pilgrim’s Pride Corporation (the “Company”) issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Effective February 14, 2018, Tarek Farahat notified the Company that he has resigned as a director of the Company. Mr. Farahat had been nominated to serve as director by the JBS Nominating Committee. In connection with his leaving the Board of Directors, Mr. Farahat did not advise the Company of any disagreement with the Company on any matter relating to its operations, policies or practices. The JBS Nominating Committee will convene to begin a search to fill the vacancy on the Board of Directors created by Mr. Farahat's resignation as soon a practicable.
On February 14, 2018, the Board of Directors approved the grant of restricted stock units (“RSUs”) of 157,928 shares and 47,378 shares for William W. Lovette and Fabio Sandri, respectively. The shares covered by the RSUs will vest on January 1, 2019.

Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1Press release dated February 14, 2018






SIGNATURE  
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
PILGRIM’S PRIDE CORPORATION
 
 
 
 
Date:
February 14, 2018
 
/s/ Fabio Sandri
 
 
 
Fabio Sandri
 
 
 
Chief Financial Officer



Exhibit


http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12062739&doc=4

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12062739&doc=3

Pilgrim’s Pride Ends Fiscal Year 2017 with Net Sales of $10.77 Billion, Operating Income of 10% and Record GAAP EPS of $2.79

GREELEY, Colo., February 14, 2018 (GLOBE NEWSWIRE) - Pilgrim’s Pride Corporation (NASDAQ: PPC) reports fourth quarter and year-end 2017 financial results.

2017 Highlights
Adjusted Operating Income margins of 11.8% in U.S., 10.6% in Mexico and 3.9% in Europe operations, respectively.
Adjusted EBITDA of $1.39 billion (or a 12.9% margin and +54.3% versus last year, excluding Moy Park).
Acquisition of Moy Park positions us as the global leader in chicken and chicken-based Prepared Foods, and aligns with our strategic priorities while providing a strong platform for future growth.
GNP integration is progressing well; operations and profitability significantly improved with synergies captured ahead of plan, and are already on par with legacy operations.
Completion of $141MM in strategic capital investments, including the Sanford, NC organic tray-pack facility and Prepared Foods Line, further increasing product portfolio differentiation, strengthening key customer relationships, and improving margin profile.
Fourth Quarter Results
Consolidated numbers reflect Moy Park for the entire quarter and year, including historical data in accordance to U.S. GAAP.
Net Sales of $2.74 billion (+43.5% versus same quarter last year of $1.91 billion, excluding Moy Park).
Net Income of $134.3 million and GAAP EPS of $0.54.
Adjusted Operating Income margins of 7.3% in U.S., 4.0% in Mexico and 5.0% in Europe operations, respectively, adjusted for non-recurring items related to weather events, Moy Park acquisition and Exchange Rate fluctuations.
Adjusted EBITDA of $241.0 million (or an 8.8% margin).



1



Unaudited (2), In Millions, Except Per Share and Percentages
 
 
Fourteen Weeks Ended
Thirteen Weeks Ended
 
 
Fifty-Three Weeks Ended
Fifty-Two Weeks Ended
 
 
 
Dec 31, 2017
 
Dec 25, 2016
 
Y/Y Change
 
Dec 31, 2017
 
Dec 25, 2016
 
Y/Y Change
Net Sales
$2,742.4
 
$2,370.9
 
+15.7%
 
$10,767.9
 
$9,878.6
 
+9.0%
GAAP EPS
$0.54
 
$0.28
 
+92.9%
 
$2.79
 
$1.73
 
+61.3%
Operating Income
$155.0
 
$147.0
 
+5.4%
 
$1,072.3
 
$792.1
 
+35.4%
Adjusted EBITDA (1)
$241.0
 
$205.4
 
+17.3%
 
$1,388.0
 
$1,029.7
 
+34.8%
Adjusted EBITDA Margin (1)
8.8%
 
8.7%
 
+0.1pts
 
12.9%
 
10.4%
 
+2.5pts
(1)
Reconciliations for non-GAAP measures are provided in subsequent sections within this release.
(2)
Figures have been adjusted to include full-quarter and year of Moy Park, in accordance to U.S. GAAP.

“We generated strong, well-balanced consolidated performance in 2017. Our U.S. and Mexico operations were solid despite logistical challenges in Q4 due to the after-effects from natural events in Puerto Rico, Mexico and the U.S., while our newly acquired U.K. and continental Europe operations were consistent. The performance once again demonstrated the strength and diversity of our portfolio of bird sizes, and is what fundamentally differentiates us from the competition, giving us the potential to reduce volatility and generate higher margins over time. While small-bird and tray-pack have remained strong during Q4, conditions in the commodity markets declined in-line with seasonality but are already recovering well in the new year, indicating the continuation of chicken demand as the protein of choice in domestic and international markets. Facing significant challenges, we are very proud of our team members who had worked tirelessly to continue the operations of our facilities while assisting with rebuilding the local communities,” stated Bill Lovette, Chief Executive Officer of Pilgrim's.

“We completed the announced strategic capital investment improvements, including Sanford, NC and Moorefield, WV, which will diversify our portfolio by improving mix, reduce the impact of commodity markets, and further raise our margin profile. The Sanford conversion from commodity to organic tray-pack and the acquisition of GNP bring us leadership in premium-branded and NAE chickens while fulfilling our strategy of creating a portfolio of differentiated products to key customers.”

“We are continuing to improve the performance of the GNP operations. Margins have substantially increased since the acquisition just over a year ago and have reached parity with our legacy business during Q4. The integration is going well and we have extracted significant operating and product synergies, and are also preparing to expand the distribution of our premium Just Bare Brand. Combined with the success in improving the profitability of our acquired Mexican operations, we believe we have the methodology and the experienced personnel required to grow the operating and financial performance of our U.K. and continental Europe business.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, February 15, at 7:00 a.m. MT (9 a.m. ET). Participants are encouraged to pre-register for the conference call using the link below. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.
To pre-register, go to: https://services.choruscall.com/links/ppc180215.html

You may also reach the pre-registration link by logging in through the investor section of our website at www.pilgrims.com and clicking on the link under “Upcoming Events.”


2



For those who would like to join the call but have not pre-registered, access is available by dialing +1 (844) 883-3889 within the US, or +1 (412) 317-9245 internationally, and requesting the “Pilgrim’s Pride Conference.” Please note that to submit a question to management during the call, you must be logged in via telephone.

Replays of the conference call will be available on Pilgrim’s website approximately two hours after the call concludes and can be accessed through the “Investor” section of www.pilgrims.com. The webcast will be available for replay through May 15, 2018.

About Pilgrim’s Pride

Pilgrim’s employs approximately 51,300 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K, Ireland and continental Europe. The Company’s primary distribution is through retailers and foodservice distributors. For more information, please visit www.pilgrims.com.

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. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those projected in such forward-looking statements include: matters affecting the poultry industry generally; the ability to execute the Company’s business plan to achieve desired cost savings and profitability; future pricing for feed ingredients and the Company’s products; outbreaks of avian influenza or other diseases, either in Pilgrim’s Pride’s flocks or elsewhere, affecting its ability to conduct its operations and/or demand for its poultry products; contamination of Pilgrim’s Pride’s products, which has previously and can in the future lead to product liability claims and product recalls; exposure to risks related to product liability, product recalls, property damage and injuries to persons, for which insurance coverage is expensive, limited and potentially inadequate; management of cash resources; restrictions imposed by, and as a result of, Pilgrim’s Pride’s leverage; changes in laws or regulations affecting Pilgrim’s Pride’s operations or the application thereof; new immigration legislation or increased enforcement efforts in connection with existing immigration legislation that cause the costs of doing business to increase, cause Pilgrim’s Pride to change the way in which it does business, or otherwise disrupt its operations; competitive factors and pricing pressures or the loss of one or more of Pilgrim’s Pride’s largest customers; currency exchange rate fluctuations, trade barriers, exchange controls, expropriation and other risks associated with foreign operations; disruptions in international markets and distribution channel, including anti-dumping proceedings and countervailing duty proceedings; and the impact of uncertainties of litigation as well as other risks described under “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Pilgrim’s Pride Corporation undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.








Contact:
Dunham Winoto
 
Director, Investor Relations
 
IRPPC@pilgrims.com
 
(970) 506-8192
 
www.pilgrims.com


3




PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
December 31, 2017
 
December 25, 2016
 
 
(Unaudited)
 
 
 
 
(In thousands, except share and par value data)
Cash and cash equivalents
 
$
581,510

 
$
292,544

Restricted cash and cash equivalents
 
8,021

 
4,979

Trade accounts and other receivables, less allowance for doubtful accounts
 
565,478

 
445,553

Account receivable from related parties
 
2,951

 
4,010

Inventories
 
1,255,070

 
975,608

Prepaid expenses and other current assets
 
102,550

 
81,932

Assets held for sale
 
708

 
5,259

Total current assets
 
2,516,288

 
1,809,885

Other long-lived assets
 
18,165

 
19,260

Identified intangible assets, net
 
617,163

 
471,591

Goodwill
 
1,001,889

 
887,221

Property, plant and equipment, net
 
2,095,147

 
1,833,985

Total assets
 
$
6,248,652

 
$
5,021,942

 
 
 
 
 
Accounts payable
 
$
762,444

 
$
790,378

Accounts payable to related parties
 
2,889

 
4,468

Accrued expenses
 
417,342

 
347,021

Income taxes payable
 
222,073

 
27,578

Current maturities of long-term debt
 
47,775

 
15,712

Total current liabilities
 
1,452,523

 
1,185,157

Long-term debt, less current maturities
 
2,635,617

 
1,396,124

Deferred tax liabilities
 
208,492

 
251,807

Other long-term liabilities
 
96,359

 
102,722

Total liabilities
 
4,392,991

 
2,935,810

Commitments and contingencies
 
 
 
 
Preferred stock, $.01 par value, 50,000,000 shares authorized; no shares issued
 

 

Common stock, $.01 par value, 800,000,000 shares authorized; 260,167,881 and
259,682,000 shares issued at year-end 2017 and year-end 2016, respectively;
248,752,508 and 249,046,139 shares outstanding at year-end 2017 and year-end
2016, respectively
 
2,602

 
307,288

Treasury stock, at cost, 11,415,373 shares and 10,635,861 shares at year-end 2017 and year-end 2016, respectively
 
(231,758
)
 
(217,117
)
Additional paid-in capital
 
1,932,509

 
3,100,332

Retained earnings (accumulated deficit)
 
173,943

 
(782,785
)
Accumulated other comprehensive loss
 
(31,140
)
 
(329,858
)
Total Pilgrim’s Pride Corporation stockholders’ equity
 
1,846,156

 
2,077,860

Noncontrolling interest
 
9,505

 
8,272

Total stockholders’ equity
 
1,855,661

 
2,086,132

Total liabilities and stockholders' equity
 
$
6,248,652

 
$
5,021,942



4




PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 
 
Fourteen Weeks Ended
 
Thirteen Weeks Ended
 
Fifty-Three Weeks Ended
 
Fifty-Two Weeks Ended
 
 
December 31, 2017
 
December 25, 2016
 
December 31, 2017
 
December 25, 2016
 
 
(In thousands, except per share data)
Net sales
 
$
2,742,352

 
$
2,370,883

 
$
10,767,863

 
$
9,878,564

Cost of sales
 
2,480,548

 
2,142,013

 
9,296,249

 
8,774,581

Gross profit
 
261,804

 
228,870

 
1,471,614

 
1,103,983

Selling, general and administrative expense
 
105,508

 
81,046

 
389,517

 
310,832

Administrative restructuring charges
 
1,279

 
790

 
9,775

 
1,069

Operating income
 
155,017

 
147,034

 
1,072,322

 
792,082

Interest expense, net of capitalized interest
 
40,868

 
17,156

 
107,183

 
75,636

Interest income
 
(4,130
)
 
(301
)
 
(7,730
)
 
(2,301
)
Foreign currency transaction loss (gain)
 
(159
)
 
5,824

 
(2,659
)
 
4,055

Miscellaneous, net
 
(1,340
)
 
(2,017
)
 
(6,538
)
 
(9,344
)
Income before income taxes
 
119,778

 
126,372

 
982,066

 
724,036

Income tax expense
 
(14,147
)
 
40,940

 
263,899

 
243,919

Net income
 
133,925

 
85,432

 
718,167

 
480,117

Less: Net income (loss) from Granite holdings Sarl prior to acquisition by PPC
 

 
15,283

 
23,486

 
40,388

Less: Net income (loss) attributable to noncontrolling interests
 
(412
)
 
(469
)
 
102

 
(803
)
Net income attributable to Pilgrim’s Pride Corporation
 
$
134,337

 
$
70,618

 
$
694,579

 
$
440,532

 
 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
248,753

 
250,853

 
248,738

 
253,669

Effect of dilutive common stock equivalents
 
241

 
542

 
233

 
457

Diluted
 
248,994

 
251,395

 
248,971

 
254,126

 
 
 
 
 
 
 
 
 
Net income attributable to Pilgrim's Pride Corporation per share of
common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
$
0.54

 
$
0.28

 
$
2.79

 
$
1.74

Diluted
 
$
0.54

 
$
0.28

 
$
2.79

 
$
1.73



5



PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
 
Fifty-Three Weeks Ended
 
Fifty-Two Weeks Ended
 
 
December 31, 2017
 
December 25, 2016
 
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net income
 
$
718,167

 
$
480,117

Adjustments to reconcile net income to cash provided by operating
activities:
 
 
 
 
Depreciation and amortization
 
277,792

 
231,708

Asset impairment
 
5,156

 
790

Foreign currency transaction gain related to borrowing arrangements
 
(1,387
)
 

Amortization of bond premium
 
(180
)
 

Gain on property disposals
 
(506
)
 
(8,914
)
Loss (gain) on equity method investments
 
(59
)
 
452

Share-based compensation
 
3,020

 
6,102

Deferred income tax expense (benefit)
 
(49,963
)
 
(5,034
)
Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and other receivables
 
(82,169
)
 
(32,428
)
Inventories
 
(207,399
)
 
(33,083
)
Prepaid expenses and other current assets
 
(14,827
)
 
19,270

Accounts payable and accrued expenses
 
(22,827
)
 
75,893

Income taxes
 
188,120

 
75,238

Long-term pension and other postretirement obligations
 
(10,864
)
 
(10,165
)
Other
 
(753
)
 
(4,584
)
Cash provided by operating activities
 
801,321

 
795,362

Cash flows from investing activities:
 
 
 
 
Acquisitions of property, plant and equipment
 
(339,872
)
 
(340,960
)
Business acquisition
 
(658,520
)
 

Proceeds from property disposals
 
4,475

 
13,375

Proceeds from settlement of life insurance contract
 
1,845

 

Cash used in investing activities
 
(992,072
)
 
(327,585
)
Cash flows from financing activities:
 
 
 
 
Proceeds from notes payable to banks
 

 
36,838

Payments on note payable to bank
 

 
(65,564
)
Proceeds from long-term debt
 
1,871,818

 
593,015

Payments on long-term debt
 
(628,677
)
 
(570,015
)
Proceeds from equity contribution under Tax Sharing Agreement between
JBS USA Food Company Holdings and Pilgrim's Pride Corporation
 
5,038

 
3,690

Tax benefit related to share-based compensation
 

 

Contributions from noncontrolling interests
 

 
7,252

Payment of capitalized loan costs
 
(13,631
)
 
(693
)
Purchase of common stock under share repurchase program
 
(14,641
)
 
(117,884
)
Purchase of common stock from retirement plan participants
 

 
(73
)
Payment of cash dividends
 

 
(714,785
)
Cash provided by financing activities
 
1,219,907

 
(828,219
)
Effect of exchange rate changes on cash and cash equivalents
 
16,364

 
(38,587
)
Increase in cash and cash equivalents
 
1,045,520

 
(399,029
)

6



Cash and cash equivalents, beginning of period
 
297,523

 
696,552

Cash and cash equivalents, end of period
 
$
1,343,043

 
$
297,523

Supplemental Disclosure Information:
 
 
 
 
Interest paid (net of amount capitalized)
 
$
81,260

 
$
69,857

Income taxes paid
 
122,956

 
161,026


7



PILGRIM’S PRIDE CORPORATION
Selected Financial Information
(Unaudited)

“EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we believe are not indicative of our ongoing operating performance consisting of: (i) income (loss) attributable to non-controlling interests, (ii) restructuring charges, (iii) reorganization items, (iv) losses on early extinguishment of debt and (v) foreign currency transaction losses (gains). EBITDA is presented because it is used by management and we believe it is frequently used by securities analysts, investors and other interested parties, in addition to and not in lieu of results prepared in conformity with accounting principles generally accepted in the US (“GAAP”), to compare the performance of companies. We believe investors would be interested in our Adjusted EBITDA because this is how our management analyzes EBITDA. The Company also believes that Adjusted EBITDA, in combination with the Company’s financial results calculated in accordance with GAAP, provides investors with additional perspective regarding the impact of certain significant items on EBITDA and facilitates a more direct comparison of its performance with its competitors. EBITDA and Adjusted EBITDA are not measurements of financial performance under GAAP. They should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with GAAP.

PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted EBITDA
 
 
 
 
 
(Unaudited)
 
Fourteen Weeks Ended
 
Thirteen Weeks Ended
 
Fifty-Three Weeks Ended
 
Fifty-Two Weeks Ended
 
 
December 31, 2017
 
December 25, 2016
 
December 31, 2017
 
December 25, 2016
 
 
(In thousands)
Net income
 
$
133,925

 
$
85,432

 
$
718,167

 
$
480,117

Add:
 
 
 
 
 
 
 
 
Interest expense, net
 
36,738

 
16,855

 
99,453

 
73,335

Income tax expense (benefit)
 
(14,147
)
 
40,940

 
263,899

 
243,919

Depreciation and amortization
 
73,167

 
57,580

 
277,792

 
231,708

Minus:
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
2,839

 
2,465

 
5,968

 
5,324

EBITDA
 
226,844

 
198,342

 
1,353,343

 
1,023,755

Add:
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
(159
)
 
5,824

 
(2,659
)
 
4,055

Acquisition charges
 
4,567

 

 
19,606

 

Restructuring charges
 
1,279

 
790

 
9,775

 
1,069

Puerto Rico hurricane impact
 
8,066

 

 
8,066

 

Minus:
 
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
 
(412
)
 
(469
)
 
102

 
(803
)
Adjusted EBITDA
 
$
241,009

 
$
205,425

 
$
1,388,029

 
$
1,029,682



8



PILGRIM'S PRIDE CORPORATION
Reconciliation of EBITDA Margin
 
(Unaudited)
 
Fourteen Weeks Ended
 
Thirteen Weeks Ended
 
Fifty-Three Weeks Ended
 
Fifty-Two Weeks Ended
 
Fourteen Weeks Ended
 
Thirteen Weeks Ended
 
Fifty-Three Weeks Ended
 
Fifty-Two Weeks Ended
 
 
December 31, 2017
 
December 25, 2016
 
December 31, 2017
 
December 25, 2016
 
December 31, 2017
 
December 25, 2016
 
December 31, 2017
 
December 25, 2016
 
(In thousands)
Net income
 
$
133,925

 
$
85,432

 
$
718,167

 
$
480,117

 
4.88
 %
 
3.60
 %
 
6.67
 %
 
4.86
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
36,738

 
16,855

 
99,453

 
73,335

 
1.34
 %
 
0.71
 %
 
0.92
 %
 
0.74
 %
Income tax expense (benefit)
 
(14,147
)
 
40,940

 
263,899

 
243,919

 
(0.52
)%
 
1.73
 %
 
2.45
 %
 
2.47
 %
Depreciation and amortization
 
73,167

 
57,580

 
277,792

 
231,708

 
2.67
 %
 
2.43
 %
 
2.58
 %
 
2.35
 %
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
2,839

 
2,465

 
5,968

 
5,324

 
0.10
 %
 
0.10
 %
 
0.06
 %
 
0.05
 %
EBITDA
 
226,844

 
198,342

 
1,353,343

 
1,023,755

 
8.27
 %
 
8.37
 %
 
12.57
 %
 
10.36
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
(159
)
 
5,824

 
(2,659
)
 
4,055

 
(0.01
)%
 
0.25
 %
 
(0.02
)%
 
0.04
 %
Acquisition charges
 
4,567

 

 
19,606

 

 
0.17
 %
 
 %
 
0.18
 %
 
 %
Restructuring charges
 
1,279

 
790

 
9,775

 
1,069

 
0.05
 %
 
0.03
 %
 
0.09
 %
 
0.01
 %
Puerto Rico hurricane impact
 
8,066

 

 
8,066

 

 
0.29
 %
 
 %
 
0.07
 %
 
 %
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
 
(412
)
 
(469
)
 
102

 
(803
)
 
(0.02
)%
 
(0.02
)%
 
 %
 
(0.01
)%
Adjusted EBITDA
 
$
241,009

 
$
205,425

 
$
1,388,029

 
$
1,029,682

 
8.79
 %
 
8.66
 %
 
12.89
 %
 
10.42
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Revenue:
 
$
2,742,352

 
$
2,370,883

 
$
10,767,863

 
$
9,878,564

 
$
2,742,352

 
$
2,370,883

 
$
10,767,863

 
$
9,878,564



9



A reconciliation of GAAP operating income to adjusted operating income is as follows:
PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted Operating Income
(Unaudited)
 
 
 
 
 
 
 
 
 
Fourteen Weeks Ended
 
Thirteen Weeks Ended
 
Fifty-Three Weeks Ended
 
Fifty-Two Weeks Ended
 
December 31, 2017
 
December 25, 2016
 
December 31, 2017
 
December 25, 2016
 
(In thousands)
GAAP operating income (US operations)
$
122,370

 
$
92,279

 
$
841,491

 
$
572,559

Administrative restructuring charges
529

 
790

 
9,025

 
1,069

Acquisition charges
4,567

 

 
19,606

 

Puerto Rico hurricane impact
8,066

 

 
8,066

 

Adjusted operating income (US operations)
$
135,532

 
$
93,069

 
$
878,188

 
$
573,628

 
 
 
 
 
 
 
 
Adjusted operating income margin (US operations)
7.19
%
 
5.82
%
 
11.80
%
 
8.60
%
 
 
 
 
 
 
 
 
GAAP operating income (Mexico operations)
$
7,390

 
$
32,000

 
$
153,631

 
$
140,856

Foreign exchange
6,100

 

 
(13,000
)
 

Adjusted operating income (Mexico operations)
$
13,490

 
$
32,000

 
$
140,631

 
$
140,856

 
 
 
 
 
 
 
 
Adjusted operating income margin (Mexico operations)
4.04
%
 
10.35
%
 
10.59
%
 
11.18
%
 
 
 
 
 
 
 
 
GAAP operating income (Europe operations)
$
25,231

 
$
22,731

 
$
77,105

 
$
78,572

Administrative restructuring charges
750

 

 
750

 

Adjusted operating income (Europe operations)
$
25,981

 
$
22,731

 
$
77,855

 
$
78,572

 
 
 
 
 
 
 
 
Adjusted operating income margin (Europe operations)
4.97
%
 
4.91
%
 
3.90
%
 
4.03
%


10



PILGRIM'S PRIDE CORPORATION
Supplementary Selected Segment and Geographic Data
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Fourteen Weeks Ended
 
Thirteen Weeks Ended
 
Fifty-Three Weeks Ended
 
Fifty-Two Weeks Ended
 
 
December 31, 2017
 
December 25, 2016
 
December 31, 2017
 
December 25, 2016
 
 
(In thousands)
Sources of net sales by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
1,886,133

 
$
1,599,052

 
$
7,443,222

 
$
6,671,403

Europe:
 
522,465

 
462,733

 
1,996,319

 
1,947,441

Mexico
 
333,754

 
309,098

 
1,328,322

 
1,259,720

Total net sales:
 
$
2,742,352

 
$
2,370,883

 
$
10,767,863

 
$
9,878,564

 
 
 
 
 
 
 
 
 
Sources of cost of sales by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
1,691,586

 
$
1,458,670

 
$
6,348,411

 
$
5,929,318

Europe:
 
472,016

 
414,576

 
1,808,139

 
1,757,818

Mexico
 
316,972

 
268,791

 
1,139,794

 
1,087,540

Elimination:
 
(26
)
 
(24
)
 
(95
)
 
(95
)
Total cost of sales:
 
$
2,480,548

 
$
2,142,013

 
$
9,296,249

 
$
8,774,581

 
 
 
 
 
 
 
 
 
Sources of gross profit by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
194,549

 
$
140,382

 
$
1,094,811

 
$
742,085

Europe:
 
50,446

 
48,157

 
188,180

 
189,623

Mexico
 
16,783

 
40,306

 
188,528

 
172,180

Elimination:
 
26

 
25

 
95

 
95

Total gross profit:
 
$
261,804

 
$
228,870

 
$
1,471,614

 
$
1,103,983

 
 
 
 
 
 
 
 
 
Sources of operating income by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
122,370

 
$
92,279

 
$
841,491

 
$
572,559

Europe:
 
25,231

 
22,731

 
77,105

 
78,572

Mexico
 
7,390

 
32,000

 
153,631

 
140,856

Elimination:
 
26

 
24

 
95

 
95

Total operating income:
 
$
155,017

 
$
147,034

 
$
1,072,322

 
$
792,082




11