What changed in this filing

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Item 1. Business

2024-02-27 compared with 2023-02-09 · 37 added, 44 removed, 156 unchanged (34% of the section changed)

2 unchanged sentences

JBS S.A., through its indirect wholly-owned subsidiaries (together, “JBS”), beneficially owns 82.54% of our outstanding common stock.

We market our balanced portfolio of fresh, prepared and value-added meat products to a diverse set of over 51,100 customers across the U.S., the U.K.

We market our balanced portfolio of fresh, prepared and value-added meat products to a diverse set of customers across the U.S., the U.K.

and Europe, Mexico and in over 115 other countries.

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

With our global network of approximately 4,950 growers, 36 feed mills, 47 hatcheries, 40 processing plants, 33 prepared foods cook plants, 31 distribution centers, nine rendering facilities, four pet food plants and three other facilities, 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 Kerry Consumer Foods’ meats and meals businesses, collectively known as Pilgrim’s Food Masters (“PFM”), for cash of £698.8 million, or $958.9 million.

The specialty meats business is a leading manufacturer of branded and private label meats, meat snacks and food-to-go products in the U.K.

and the Republic of Ireland.

The specialty meats business is a leading manufacturer of branded and private label meats, meat snacks and food-to-go products in the U.K.

and the Republic of Ireland.

The ready meals business is a leading ethnic chilled and frozen ready meals business in the U.K.

The acquired operations are included in the Company’s U.K.

and Europe reportable segment.

With our global network of approximately 4,800 growers, 34 feed mills, 47 hatcheries, 39 processing plants, 30 prepared foods cook plants, 27 distribution centers, ten protein conversion facilities and five pet food plants, we believe we are well-positioned to supply the growing demand for our products.

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

Any reference we make to a particular year (for example 2022) in the notes to these Condensed Consolidated Financial Statements applies to our fiscal year and not the calendar year.

Any reference we make to a particular year (for example 2023) in the notes to these Consolidated Financial Statements applies to our fiscal year and not the calendar year.

Fiscal year 2023 was a 53-week fiscal year.

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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 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.

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

and continental Europe, and Mexico and pork products through our operations in the U.K.

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

however, for geographic reporting purposes, we include Puerto Rico with our U.S.

See “Note 20.

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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.

Our fresh products consist of refrigerated whole or cut-up chicken, frozen whole chickens, breast fillets, mini breast fillets and prepackaged case-ready chicken, and in the U.K., primary pork cuts, added value pork and pork ribs.

Our case-ready chicken includes various combinations of freshly refrigerated, whole chickens, chicken parts in trays, bags or other consumer packs labeled and priced ready for the retail grocer’s fresh meat counter.

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

Additionally, we are an

important player in the live chicken market in Mexico.

In 2023, our fresh product sales accounted for 80.8%, 20.7%, and 84.3% of our total U.S., U.K.

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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.

In addition, these products may be breaded and/or marinated.

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.

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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.

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

In 2023, our export product sales accounted for 5.3% and 9.1% of our total U.S.

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In 2023, corn, soybean meal and wheat accounted for approximately 43.9%, 38.1% and 4.1% of our feed costs, respectively.

The production of feed ingredients is positively or negatively affected primarily by the global level of supply inventories, demand for feed ingredients, the agricultural policies of the U.S.

The production of feed ingredients is positively or negatively affected primarily by the global level of supply, demand for feed ingredients, the agricultural policies of the U.S.

and foreign governments and weather patterns throughout the world.

We attempt to mitigate the impact of price volatility on our profitability by decreasing the amount of our products that are sold under longer term fixed-price contracts, broadening our product portfolio and expanding the variety of contracts within our book of business.

We attempt to mitigate the impact of price

volatility on our profitability by decreasing the amount of our products that are sold under longer term fixed-price contracts, broadening our product portfolio and expanding the variety of contracts within our book of business.

To also manage this risk, we purchase derivative financial instruments.

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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 approximately 35.7% of the total number of pigs processed by the Company each year.

The Company’s pork operations in the U.K.

maintain a pig production base that makes up approximately 34.2% 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.

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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®, Pierce Chicken®, Pilgrim’s® Mexico, County Post®, Savoro, To-Ricos, Del Dia®, Moy Park, O’Kane, Richmond, Fridge Raiders and Denny.

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®, Country Pride®, Pierce Chicken®, Pilgrim’s® Mexico, 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.

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No single customer accounted for ten percent or more of our consolidated net sales in either 2023 or 2022.

The chicken and pork industry in the U.S., the U.K., continental Europe and Mexico is highly competitive.

The chicken and pork industries in the U.S., the U.K., continental Europe and Mexico are highly competitive.

The competitive factors in our business include price, product quality, product development, brand identification, breadth of product line and customer service.

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Regulation and Environmental Matters

The poultry, pork and prepared foods industries are subject to government regulation, particularly in the health, workplace safety and environmental areas, including provisions relating to the discharge of materials into the environment, treatment and disposal of agricultural and food processing wastes, the use and maintenance of refrigeration systems, ammonia-based chillers, noise, odor and dust management, the operation of mechanized processing equipment and other operations, storm water, air emissions, treatment, storage and disposal of wastes, handling of hazardous substances and remediation of contaminated soil, surface water and groundwater, by the Centers for Disease Control, the United States Department of Agriculture (“USDA”), the Food and Drug Administration (“FDA”), the Environmental Protection Agency (“EPA”), the Occupational Safety and Health Administration and state and local regulatory authorities in the U.S.

and by similar governmental agencies in the U.K., continental Europe and Mexico.

The chicken, pork and prepared foods industries are subject to government regulation, particularly in the health, workplace safety and environmental areas, including provisions relating to the discharge of materials into the environment, treatment and disposal of agricultural and food processing wastes, the use and maintenance of refrigeration systems, ammonia-based chillers, noise, odor and dust management, the operation of mechanized processing equipment and other operations, storm water, air emissions, treatment, storage and disposal of wastes, handling of hazardous substances and remediation of contaminated soil, surface water and groundwater, by the Centers for Disease Control, the United States Department of Agriculture (“USDA”), the Food and Drug Administration (“FDA”), the Environmental Protection Agency (“EPA”), the Occupational Safety and Health Administration and state and local regulatory authorities in the U.S.

and by similar

governmental agencies in the U.K., the Republic of Ireland, continental Europe and Mexico.

Our chicken processing facilities in the U.S.

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Our food processing facilities and feed mills in the U.K., continental Europe and Mexico are subject to on-site examination, inspection and regulation by government agencies that perform functions similar to those performed by the USDA and FDA.

The EPA, environmental authorities in the U.K., continental Europe and Mexico, and/or other U.S.

The EPA, environmental authorities in the U.K., the Republic of Ireland, continental Europe and Mexico, and/or other U.S.

or Mexican state and local authorities may, from time to time, adopt revisions to environmental rules and regulations, and/or changes in the terms and conditions of our environmental permits, with which we must comply.

Compliance with existing or new environmental requirements, including more stringent limitations imposed or expected in recently-renewed or soon-to be renewed environmental permits, may require capital expenditures and operating expenses which may be significant.

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.

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.

In the U.K., all 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.

Our pork sites are independently audited and certified by the British Retail Consortium standard.

Many of our pork sites are additionally certified by farm-to-fork 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

7 unchanged sentences

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

• Leveraging third-party experts, we conduct regular ergonomic assessments, ensure that 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.

• Our efforts have resulted in year-over-year reductions in severe injuries and days away restricted or transferred of 42% and 10%, 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.

• Our efforts in 2023 have resulted in year-over-year reductions in severe injuries and days away restricted or transferred of 25% and 8%, respectively.

Diversity and Inclusion.

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• 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 million and during the year ended December 27, 2020 we recorded $15 million in incremental donations expense relating to this initiative.

Hometown Strong, which we launched in 2020, is an initiative to help the communities in which we operate respond to the unexpected challenges on society.

We believe the Hometown Strong initiative has provided consequential investment projects and helped communities prepare for unanticipated challenges and build for the future.

Since inception, we have committed to Hometown Strong donations of $20 million.

• 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, which we launched in 2019, is 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.

• 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.

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

So far, over 1,634 team members or dependents have signed up and 390 have started their selected academic pathway.

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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 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.

He earned his Master’s 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.

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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.

Galvanoni graduated from the University of Illinois with a Bachelor’s of Accounting degree and later received a Master’s 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