What changed in this filing

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Item 1. Business

2021-02-11 compared with 2020-02-21 · 81 added, 30 removed, 124 unchanged (47% of the section changed)

1 unchanged sentence

Pilgrim’s Pride Corporation (referred to herein as “Pilgrim’s,” “PPC,” “the Company,” “we,” “us,” “our,” or similar terms) is primarily engaged in the production, processing, marketing and distribution of fresh, frozen and value-added chicken and pork products to retailers, distributors and foodservice operators.

The Company was incorporated in Texas in 1968 and reincorporated in Delaware in 1986, is the successor to a partnership founded in 1946 as a retail feed store.

JBS S.A., through its indirect wholly-owned subsidiaries (together, “JBS”), beneficially owns 80.26% of our outstanding common stock.

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and Europe, and grocery store chains such as Wal-Mart® in Mexico.

As a vertically integrated company, we control every phase of the production process, which helps us better manage food safety and quality, as well as more effectively control margins and improve customer service.

As a vertically integrated company, we are able to control every phase of the production process, which helps us manage food safety and quality, control margins and improve customer service.

Our plants are strategically located to ensure that customers timely receive fresh products.

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On October 15, 2019, the Company acquired 100% of the equity of Tulip Limited and its subsidiaries (together, “Tulip”) from Danish Crown AmbA for £311.3 million, or $393.3 million for cash.

Tulip is a leading integrated prepared pork supplier headquartered in Warwick, U.K.

Tulip, which has subsequently changed its name to Pilgrim’s Pride Ltd.

(“PPL”), is a leading, integrated prepared pork supplier headquartered in Warwick, U.K.

This acquisition solidifies Pilgrim's as a leading European food company, creating one of the largest integrated prepared foods businesses in the U.K.

The Tulip operations are included in our U.K.

The PPL operations are included in our U.K.

and Europe reportable segment.

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and Europe, and Mexico.

We either produce or purchase for resale chicken and pork products through our operations in the U.S., the U.K and continental Europe, and Mexico.

We either produce or purchase for resale chicken and pork products through our operations in the U.S., the U.K.

and continental Europe, and Mexico.

We conduct separate operations in the U.S., the U.K., continental Europe, Puerto Rico and Mexico;

however, for geographic reporting purposes, we

include Puerto Rico with our U.S.

however, for geographic reporting

purposes, we include Puerto Rico with our U.S.

See “Note 19.

Reportable Segments” of our Consolidated and Combined Financial Statements included in this annual report for additional information.

Reportable Segments” of our Consolidated Financial Statements included in this annual report for additional information.

Products and Markets

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We based the table on our internal sales reports and their classification of product types.

December 27, 2020 December 29, 2019 December 30, 2018

(In thousands)

Fresh $ 6,137,265 $ 6,214,954 $ 5,959,458

Prepared 714,563 842,365 773,983

Export 306,478 282,791 258,732

chicken 7,158,306 7,340,110 6,992,173

and Europe chicken:

Fresh 863,670 918,852 925,124

Prepared 751,196 817,292 865,864

Export 227,224 262,041 303,921

and Europe chicken 1,842,090 1,998,185 2,094,909

Mexico chicken:

Fresh 1,210,952 1,245,976 1,252,403

Prepared 66,572 95,733 76,860

Total Mexico chicken 1,277,524 1,341,709 1,329,263

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and Europe pork:

Fresh 730,703 135,985 —

Prepared 486,290 134,426 —

Export 70,190 16,174 —

and Europe pork 1,287,183 286,585 —

Other products:

337,711 296,606 433,488

and Europe 145,019 99,023 53,757

Mexico 44,068 47,001 34,194

Total other products 526,798 442,630 521,439

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Should breeder stock from its present suppliers not be available for any reason, the Company believes that it could obtain adequate breeder stock from other suppliers in the regions in which it operates.

The Company’s pork operations maintain a pig production base that makes up slightly more than 50% of the total number of pigs processed by the Company each year.

The Company’s pork operations maintain a pig production base that makes up approximately 65% of the total number of pigs processed by the Company each year.

Additionally, the Company’s pork operations procure live pigs for slaughter within a few days of purchase from numerous independent farmers throughout the U.K.

Live pigs sourced from independent farmers make up slightly less than 50% of the total number of pigs processed by the Company each year.

Live pigs sourced from independent farmers make up approximately 35% of the total number of pigs processed by the Company each year.

Although we generally expect adequate supply of live pigs in the U.K., there may be periods of imbalance in supply and demand.

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In the U.K., all Moy Park poultry farms which exceed a threshold size of 40,000 birds placed are required to carry out activities in compliance with their environmental permits and they must use Best Available Techniques in order to achieve a high level of environmental protection.

Tulip’s sites are independently audited and certified by the British Retail Consortium standard.

Many of Tulip’s sites are certified by additional and traceability schemes including Royal Society for the Prevention of Cruelty to Animals Assured, Soil Association, Organic Farmers and Growers and Assured Food Standards.

PPL’s sites are independently audited and certified by the British Retail Consortium standard.

Many of PPL’s sites are certified by additional and traceability schemes including Royal Society for the Prevention of Cruelty to Animals Assured, Soil Association, Organic Farmers and Growers and Assured Food Standards.

Human Capital Resources

As of December 27, 2020, we employed approximately 30,900 persons in the U.S., approximately 10,500 persons in Mexico and approximately 15,000 persons in the U.K.

and continental Europe.

Our success is largely dependent on the skills, experience and efforts of our employees.

We rely on an adequate number of skilled employees to serve in critical production roles, such as processing workers and operations supervisors.

In managing our business, we focus on a number of human capital measures or objectives, which are rooted in our core values and include the following items:

Health and Safety.

A core tenet of our Company is the promotion of a healthy and safe working environment.

Key examples of our focus and commitment include:

• We conduct safety audits of all facilities on an annual basis.

These audits include auditing the physical state of the plant, policies, safety culture and our occupational health clinics.

• We engage with our team members through the use of safety committees and other safety initiatives to improve the overall safety of the workplace and advance a safety first culture.

• We seek to control ergonomic risks and prevent injuries by conducting focused annual ergonomic and physical hazard assessment at all facilities.

• Our efforts have resulted in year-over-year reductions in severe injuries, total recordable incident rate, lost time incident rate and days away restricted or transferred of 12%, 22%, 7% and 19%, respectively.

• As discussed in “Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Impact of COVID-19,” we have implemented and continue to implement numerous health and safety policies and procedures focused on reducing the spread of novel coronavirus (“COVID-19”) and protecting our facility workers from risks of illness while maintaining our business continuity.

Diversity and Inclusion.

We believe that promoting diversity and inclusion among our workforce helps to create a trusting and productive workplace.

We encourage the management teams at each facility to hire from the local regions in which they are located.

• Our Equal Employment Opportunity Policy (“EEO Policy”) affirms our commitment to employ and support employees of all races, religions, colors, national origins, sexes, sexual orientations, gender identities and ages.

Through the EEO Policy, we have been involved in diversity hiring initiatives and partnered with universities with an aim of recruiting from a diverse talent pool.

• We track our progress in our efforts to promote diversity and inclusion.

For example, in 2019, women comprised 43%, 37% and 35% of our total workforce in the U.S., the U.K.

and Europe, and Mexico, respectively, and 68% of our total workforce in the U.S.

were minorities.

• Our management team members are expected to attend People First leadership training, which includes a model dedicated to training and awareness on diversity and inclusion.

• We provide workshops on diversity and inclusion for our employees and we engage in targeted recruitment at 20 of the nation’s largest historically black colleges and universities.

Retention and Career Development.

We are committed to retaining talented employees at both production and management levels by offering competitive compensation and benefits, as well as leadership training and development opportunities.

• We strive to provide competitive pay to our team members and reward top performers.

Our benefits offerings include a minimum paid time off and paid sick leave for salaried employees, life and disability insurance and Company-matching retirement plans.

• We have extensive leadership training programs, such as our Summit Program, designed to improve the skill set of our senior leadership, and our Supervisor Development Program, created to help identify and develop production workers into frontline supervisors.

We have found that recognizing our employees’ efforts through training for continued advancement strengthens their performance and helps with our goals to achieve business results.

Our employees completed over 390,000 training hours during 2019 and over 330,000 training hours during 2020 for our career development programs.

Community Support .

We are focused on supporting the communities in which we operate and serve.

• Hometown Strong Initiative.

During 2020, we launched our Hometown Strong initiative to help the communities in which we operate respond to the unexpected challenges on society, such as the COVID-19 pandemic.

We believe the Hometown Strong initiative will provide consequential investment projects and help them prepare for unanticipated challenges and build for the future.

For 2020, we committed to Hometown Strong donations of $20.0 million and during the year ended December 27, 2020 we recorded $15.0 million in incremental donations expense relating to this initiative.

• Tomorrow Fund.

During 2019, we launched the Tomorrow Fund, a scholarship program designed to support the collegiate scholastic pursuits of our employees and their direct dependents.

The Tomorrow Fund awards certain employees scholarships to an eligible university of their choice.

Employee Relations.

We respect our team members’ rights of association, including by joining labor unions and collective bargaining.

Approximately 35.2% of our workforce are covered by a collective bargaining agreement.

For additional information, see “Item 1A.

Risk Factors - Our performance depends on favorable labor relations with our employees and our compliance with labor laws.

Any deterioration of those relations or increase in labor costs due to our compliance with labor laws could adversely affect our business.”

Available Information

The Company’s Internet website is www.pilgrims.com.

The Company makes available, free of charge, through its Internet website, the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, directors and officers Forms 3, 4 and 5, and amendments to those reports, as soon as reasonably practicable after electronically filing such materials with, or furnishing them to, the SEC.

The Company’s website is www.pilgrims.com.

The Company makes available, free of charge, through its website, the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, directors and officers Forms 3, 4 and 5, and amendments to those reports, as soon as reasonably practicable after electronically filing such materials with, or furnishing them to, the SEC.

The Company may use its website as a distribution channel of material company information.

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Information about our Executive Officers

Background and Experience

President and Chief Executive Officer

March 2019 to Present

Executive Vice President

January 2012 to March 2019

Senior Vice President of Commercial Business

March 2011 to January 2012

Chief Financial Officer

June 2011 to Present

Penn has served as our President and Chief Executive Officer since March 2019.

Penn joined Pilgrim’s in March of 2011 as Senior Vice President of the Commercial Business Group, bringing to the Company more than 23 years of experience in the poultry industry, and later served as Executive Vice President and most recently, as President of Pilgrim’s USA.

Penn began his career in his family’s poultry operations and has held management positions at several leading poultry companies.

He has also served on the board of directors and the executive committee of the USA Poultry and Egg Export Council and currently serves on the board and executive committee of the National Chicken Council and the board of directors of The World Poultry Foundation.

He is a graduate of Florida State University and the Advanced Management Program at the Harvard Business School.

Fabio Sandri has served as our Chief Financial Officer since June 2011.

Name Age Background and Experience Dates

Fabio Sandri 49 President and Chief Executive Officer September 2020 to Present

Chief Financial Officer June 2011 to Present

Fabio Sandri was named the Chief Executive Officer in September 2020 and has served as our Chief Financial Officer since June 2011.

From April 2010 to June 2011, Mr.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business