What changed in this filing

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Item 1. Business

2022-02-18 compared with 2021-02-11 · 53 added, 57 removed, 148 unchanged (43% of the section changed)

8 unchanged sentences

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

With our global network of approximately 5,100 growers, 39 feed mills, 48 hatcheries, 39 processing plants, 27 prepared foods cook plants, 25 distribution centers, ten rendering facilities and four pet food plants, we believe we are well-positioned to supply the growing demand for our products.

With our global network of approximately 5,100 growers, 35 feed mills, 48 hatcheries, 43 processing plants, 37 prepared foods cook plants, 30 distribution centers, 10 rendering facilities and four pet food plants, we believe we are well-positioned to supply the growing demand for our products.

On September 24, 2021, the Company acquired 100% of the equity of the specialty meats and ready meals businesses of Kerry Group plc for cash of £695.3 million, or $954.1 million, subject to customary working capital adjustments.

The specialty meats and ready meals businesses of Kerry Group plc, which have subsequently changed their name to Pilgrim’s Food Masters (“PFM”), are leading manufacturers of branded and private label meats, meat snacks, food to-go products in the U.K.

and the Republic of Ireland and a leading ethnic chilled and frozen ready meals business in the U.K.

The acquired operations are included in our U.K.

and Europe reportable segment.

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.

4 unchanged sentences

and Europe reportable segment.

In 2017, we acquired (1) Granite Holdings Sàrl and its subsidiaries (together, “Moy Park”), which is one of the top-ten food companies in the U.K., Northern Ireland’s largest private sector business and one of Europe’s leading poultry producers and (2) JFC LLC and its subsidiaries (together, “GNP”), a vertically integrated poultry business that was based in Saint Cloud, Minnesota.

Moy Park is included in our U.K.

and Europe reportable segment and GNP is included in our U.S.

reportable segment.

In 2015, we acquired (3) Provemex Holdings, LLC and its subsidiaries (together, “Tyson Mexico”), a vertically integrated poultry business based in Gómez Palacio, Durango, Mexico.

Tyson Mexico is included in our Mexico reportable segment.

We operate on the basis of a 52/53-week fiscal year that ends on the Sunday falling on or before December 31.

12 unchanged sentences

Products and Markets

Fresh Chicken and Pork Overview.

Fresh Products Overview.

Our fresh products consist of refrigerated (nonfrozen) whole or cut-up chicken, either pre-marinated or non-marinated, frozen whole chickens, breast fillets, mini breast fillets and prepackaged case-ready chicken, primary pork cuts, added value pork and pork ribs.

1 unchanged sentence

Additionally, we are an important player in the live market in Mexico.

In 2020, our fresh chicken sales accounted for 85.7%, 46.9%, and 94.8% of our total U.S., U.K.

and Europe, and Mexico chicken sales, respectively.

In 2020, our fresh pork sales accounted for 56.8% of our total U.K.

and Europe pork sales.

Prepared Chicken and Pork Overview.

Our prepared chicken products include portion-controlled breast fillets, tenderloins and strips, delicatessen products, salads, formed nuggets and patties and bone-in chicken parts.

In 2021, our fresh product sales accounted for 79.7%, 29.3%, and 87.6% of our total U.S., U.K.

and Europe, and Mexico product sales, respectively.

Prepared Products Overview..

Our prepared products include portion-controlled breast fillets, tenderloins and strips, delicatessen products, salads, formed nuggets and patties and bone-in chicken parts.

These products are sold either refrigerated or frozen and may be fully cooked, partially cooked or raw.

In addition, these products are breaded or non-breaded and either pre-marinated or non-marinated.

Our prepared pork includes processed sausages, bacon, slow cooked, smoked meat, gammon joints, ready-to-cook variety of meat products, pre-packed meats, sandwich and deli counter meats, pulled pork balls, meatballs and coated foods.

In 2020, our prepared chicken products sales accounted for 10.0%, 40.8%, and 5.2% of our total U.S., U.K.

and Europe, and Mexico chicken sales, respectively.

In 2020, our prepared pork products sales accounted for 37.8% of our total U.K.

and Europe pork sales.

Exported Chicken and Pork Overview.

Exported chicken and pork products primarily consist of whole chickens and chicken parts sold either refrigerated for distributors in the U.S.

Our prepared products include processed sausages, bacon, slow cooked, smoked meat, gammon joints, ready-to-cook variety of meat products, pre-packed meats, sandwich and deli counter meats, pulled pork balls, meatballs and coated foods.

In 2021, our prepared foods products sales accounted for 9.9%, 56.3%, and 7.4% of our total U.S., U.K.

and Europe, and Mexico chicken and pork sales, respectively.

Exported Products Overview.

Exported products primarily consist of whole chickens and chicken parts sold either refrigerated for distributors in the U.S.

or frozen for distribution to export markets and primary pork cuts, hog heads and trotters frozen for distribution to export markets.

In 2020, our export chicken products sales accounted for 4.3% and 12.3% of our total U.S.

and Europe chicken sales, respectively.

In 2020, our export pork products sales accounted for 5.5% of our total U.K.

and Europe pork sales.

In 2021, our export product sales accounted for 5.0% and 11.7% of our total U.S.

and Europe product sales, respectively.

Market Overview.

8 unchanged sentences

(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

reportable segment:

Fresh products $ 7,264,448 $ 6,137,265 $ 6,214,954

Prepared foods 898,614 714,563 842,365

Export 459,371 306,478 282,791

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

Total chicken 10,277,920 10,680,004 10,416,345

and Europe pork:

Fresh 730,703 135,985 —

Prepared 486,290 134,426 —

Other products 491,446 337,711 296,606

reportable segment 9,113,879 7,496,017 7,636,716

and Europe reportable segment:

Fresh products 1,151,330 1,594,373 1,054,837

Prepared foods 2,214,180 1,237,486 951,718

Export 458,588 297,414 278,215

and Europe pork 1,287,183 286,585 —

Other products 109,964 145,019 99,023

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

and Europe reportable segment 3,934,062 3,274,292 2,383,793

Mexico reportable segment:

Fresh products 1,515,453 1,210,952 1,245,976

Prepared foods 128,208 66,572 95,733

Other products 85,856 44,068 47,001

Total Mexico reportable segment 1,729,517 1,321,592 1,388,710

Total net sales $ 14,777,458 $ 12,091,901 $ 11,409,219

20 unchanged sentences

As long as the Company continues to use its trademarks, they are renewed indefinitely.

Some of the more significant owned or licensed trademarks used by the Company or its affiliates are Pilgrim’s®, Just BARE®, Gold’n Pump®, Gold Kist®, County Pride Chicken®, Pierce Chicken®, Pilgrim’s® Mexico, County Post®, Savoro, To-Ricos, Del Dia®, Moy Park, and O’Kane.

Some of the more significant owned or licensed trademarks used by the Company or its affiliates are Pilgrim’s®, Just BARE®, Gold’n Pump®, Gold Kist®, County Pride®, Pierce Chicken®, Pilgrim’s® Mexico, County Post®, Savoro, To-Ricos, Del Dia®, Moy Park, O’Kane, Richmond, Fridge Raiders and Denny.

The demand for our chicken products generally is greatest during the spring and summer months and lowest during the winter months.

24 unchanged sentences

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.

As of December 26, 2021, we employed almost 59,400 persons.

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

2 unchanged sentences

Health and Safety.

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

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

Key examples of our focus and commitment include:

• 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 train team members on how to identify physical hazards, conduct focused daily, monthly and annual physical hazard assessments at all facilities, ensure that all identified physical hazards are logged and ensure timely remediation.

• Leveraging third party experts, we conduct regular ergonomic assessments, ensure that all identified ergonomic issues are logged and ensure timely remediation.

• 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.

• Our efforts have resulted in year-over-year reductions in severe injuries, lost time incident rate and days away restricted or transferred of 13%, 6% and 8%, 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.

14 unchanged sentences

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 extensive leadership training programs, such as our Supervisor Development Program, created to help identify and develop production workers into frontline supervisors, the aforementioned People First Program, designed to equip frontline supervisors with the behavioral and technical skills needed to effectively lead their production teams and our Summit Program, designed to improve the skill set of our senior leadership team.

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.

Our employees completed over 350,000 training hours during 2021 and over 330,000 training hours during 2020.

Community Support .

7 unchanged sentences

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

• Better Futures.

During 2021, we launched Better Futures, the largest privately funded free community college program in rural America, offering free community college to our team members and their dependents.

So far, nearly 400 team members or dependents have signed up and nearly 200 have already started their selected academic pathway.

Employee Relations.

13 unchanged sentences

Fabio Sandri 50 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.

Matthew Galvanoni 49 Chief Financial Officer March 2021 to Present

Fabio Sandri was named the Chief Executive Officer in September 2020 and previously served as our Chief Financial Officer from June 2011 to March 2021.

From April 2010 to June 2011, Mr.

2 unchanged sentences

Commencing in 2005 through October 2008, he was employed by Braskem S.A., a New York Stock Exchange-listed petrochemical company headquartered in Camaçari, Brazil, first from 2005 to 2007 as its strategy director, then from 2007 until his departure as its corporate controller.

He earned his Masters in Business Administration in 2001 from the Wharton School at the University of Pennsylvania and a degree in electrical engineering in 1993 from Escola Politécnica da Universidade de São Paulo.

He earned his Master of Business Administration degree in 2001 from the Wharton School at the University of Pennsylvania and a degree in electrical engineering in 1993 from Escola Politécnica da Universidade de São Paulo.

Matthew Galvanoni was named the Chief Financial Officer in February 2021, effective March 2021.

Prior to his appointment to the Company, Mr.

Galvanoni served as Vice President, Finance, of Ingredion Incorporated, a leading global ingredients solution company, since 2016.

Galvanoni joined Ingredion in 2012, serving in the role of Global Corporate Controller and Chief Accounting Officer, where he managed the company’s accounting-related and external financial reporting responsibilities.

Galvanoni started his career at PricewaterhouseCoopers LLP in 1994 and subsequently held several financial leadership positions at Exelon Corporation, where he most recently served as Assistant Corporate Controller.

Galvanoni graduated from the University of Illinois with a Bachelor of Accounting degree and later received a Master of Business Administration degree from the Kellogg School of Management at Northwestern University.

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