Edgar Filing: PILGRIMS PRIDE CORP

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 25, 2017



¨	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

PILGRIM’S PRIDE CORPORATION

(Exact name of registrant as specified in its charter)



Delaware		75-1285071
(State or other jurisdiction of incorporation or organization)		(I.R.S. 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

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer	ý	Accelerated Filer	¨

Non-accelerated Filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨
		Emerging growth company	¨

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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

Number of shares outstanding of the issuer’s common stock, $0.01 par value per share, as of August 2, 2017, was 248,752,508.

INDEX

PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES



PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	2
	Condensed Consolidated Balance Sheets June 25, 2017 and December 25, 2016	2
	Condensed Consolidated Statements of Income Thirteen and Twenty-Six Weeks Ended June 25, 2017 and June 26, 2016	3
	Condensed Consolidated Statements of Comprehensive Income Thirteen and Twenty-Six Weeks Ended June 25, 2017 and June 26, 2016	4
	Condensed Consolidated Statements of Stockholders’ Equity Twenty-Six Weeks Ended June 25, 2017 and June 26, 2016	5
	Condensed Consolidated Statements of Cash Flows Twenty-Six Weeks Ended June 25, 2017 and June 26, 2016	6
	Notes to Condensed Consolidated Financial Statements as of June 25, 2017	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.	Controls and Procedures	42
PART II. OTHER INFORMATION		43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 6.	Exhibits	45
SIGNATURES		46
EXHIBIT INDEX		47

Table of Contents


PART I.	FINANCIAL INFORMATION


ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

	June 25, 2017			December 25, 2016
	(Unaudited)
	(In thousands)
Cash and cash equivalents	$	303,937		$	120,328
Restricted cash	20,348			4,979
Trade accounts and other receivables, less allowance for doubtful accounts	406,586			317,170
Accounts receivable from related parties	4,050			3,913
Inventories	967,577			813,262
Income taxes receivable	13,659			—
Prepaid expenses and other current assets	66,572			57,457
Assets held for sale	5,542			5,259
Total current assets	1,788,271			1,322,368
Other long-lived assets	17,484			15,710
Identified intangible assets, net	153,855			38,593
Goodwill	175,444			125,607
Property, plant and equipment, net	1,721,948			1,505,940
Total assets	$	3,857,002		$	3,008,218

Accounts payable	$	519,820		$	555,097
Accounts payable to related parties	3,622			1,421
Accrued expenses and other current liabilities	324,727			290,699
Income taxes payable	93,910			20,990
Current maturities of long-term debt	40,098			94
Total current liabilities	982,177			868,301
Long-term debt, less current maturities	1,404,264			1,011,858
Deferred tax liabilities	171,042			142,651
Other long-term liabilities	89,422			88,661
Total liabilities	2,646,905			2,111,471
Common stock	2,602			2,597
Treasury stock	(231,758		)	(217,117		)
Additional paid-in capital	1,688,684			1,686,742
Accumulated deficit	(193,073		)	(520,635		)
Accumulated other comprehensive loss	(66,735		)	(64,243		)
Total Pilgrim’s Pride Corporation stockholders’ equity	1,199,720			887,344
Noncontrolling interest	10,377			9,403
Total stockholders’ equity	1,210,097			896,747
Total liabilities and stockholders’ equity	$	3,857,002		$	3,008,218

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.



PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	June 25, 2017			June 26, 2016			June 25, 2017			June 26, 2016
	(In thousands, except per share data)
Net sales	$	2,251,604		$	2,028,315		$	4,272,096		$	3,991,252
Cost of sales	1,826,217			1,742,184			3,631,504			3,467,559
Gross profit	425,387			286,131			640,592			523,693
Selling, general and administrative expense	61,636			49,520			124,489			98,308
Administrative restructuring charges	4,349			—			4,349			—
Operating income	359,402			236,611			511,754			425,385
Interest expense, net of capitalized interest	15,935			11,548			28,321			23,581
Interest income	(1,044		)	(683		)	(1,346		)	(1,376		)
Foreign currency transaction gain	(1,810		)	(4,744		)	(1,191		)	(4,979		)
Miscellaneous, net	(970		)	(950		)	(3,685		)	(3,896		)
Income before income taxes	347,291			231,440			489,655			412,055
Income tax expense	113,218			78,398			161,119			141,002
Net income	234,073			153,042			328,536			271,053
Less: Net income (loss) attributable to noncontrolling interests	432			156			974			(204		)
Net income attributable to Pilgrim’s Pride Corporation	$	233,641		$	152,886		$	327,562		$	271,257

Weighted average shares of common stock outstanding:
Basic	248,753			254,554			248,722			254,681
Effect of dilutive common stock equivalents	220			390			228			364
Diluted	248,973			254,944			248,950			255,045

Net income attributable to Pilgrim’s Pride Corporation per share of common stock outstanding:
Basic	$	0.94		$	0.60		$	1.32		$	1.07
Diluted	$	0.94		$	0.60		$	1.32		$	1.06

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.



PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

	Thirteen Weeks Ended						Twenty-Six Weeks Ended
	June 25, 2017			June 26, 2016			June 25, 2017			June 26, 2016
	(In thousands)
Net income	$	234,073		$	153,042		$	328,536		$	271,053
Other comprehensive loss:
Loss associated with available-for-sale securities, net of tax benefit of $59 and $41, respectively	—			(97		)	—			(67		)
Loss associated with pension and other postretirement benefits, net of tax benefit of $2,314, $1,118, $1,512 and $5,294, respectively	(3,814		)	(1,844		)	(2,492		)	(8,729		)
Total other comprehensive loss, net of tax	(3,814		)	(1,941		)	(2,492		)	(8,796		)
Comprehensive income	230,259			151,101			326,044			262,257
Less: Comprehensive income (loss) attributable to noncontrolling interests	432			156			974			(204		)
Comprehensive income attributable to Pilgrim’s Pride Corporation	$	229,827		$	150,945		$	325,070		$	262,461

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.



PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

	Pilgrim’s Pride Corporation Stockholders
	Common Stock			Treasury Stock					Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total
	Shares	Amount		Shares		Amount			Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total
	(In thousands)
Balance at December 25, 2016	259,682	$	2,597	(10,636	)	$	(217,117	)	$	1,686,742		$	(520,635	)	$	(64,243	)	$	9,403		$	896,747
Net income	—	—		—		—			—			327,562			—			974			328,536
Other comprehensive loss, net of tax	—	—		—		—			—			—			(2,492		)	—			(2,492		)
Share-based compensation plans:
Common stock issued under compensation plans	486	5		—		—			(5		)	—			—			—			—
Requisite service period recognition	—	—		—		—			1,947			—			—			—			1,947
Common stock purchased under share repurchase program	—	—		(780	)	(14,641		)	—			—			—			—			(14,641		)
Balance at June 25, 2017	260,168	$	2,602	(11,416	)	$	(231,758	)	$	1,688,684		$	(193,073	)	$	(66,735	)	$	10,377		$	1,210,097

Balance at December 27, 2015	259,685	$	2,597	(4,862	)	$	(99,233	)	$	1,675,674		$	(261,252	)	$	(58,930	)	$	2,954		$	1,261,810
Net income (loss)	—	—		—		—			—			271,257			—			(204		)	271,053
Other comprehensive income, net of tax	—	—		—		—			—			—			(8,796		)	—			(8,796		)
Share-based compensation plans:
Requisite service period recognition	—	—		—		—			1,869			—			—			—			1,869
Common stock purchased under share repurchase program	—	—		(309	)	(7,328		)	—			—			—			—			(7,328		)
Balance at June 26, 2016	259,685	$	2,597	(5,171	)	$	(106,561	)	$	1,677,543		$	(689,910	)	$	(67,726	)	$	2,750		$	818,693

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.



PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Twenty-Six Weeks Ended
	June 25, 2017			June 26, 2016
	(In thousands)
Cash flows from operating activities:
Net income	$	328,536		$	271,053
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	107,671			88,683
Foreign currency transaction loss related to borrowing arrangements	5,634			—
Asset impairment	3,534			—
Gain on property disposals	(768		)	(6,755		)
Gain on equity method investments	(30		)	—
Share-based compensation	1,947			1,869
Deferred income tax expense (benefit)	26,904			(700		)
Changes in operating assets and liabilities:
Trade accounts and other receivables	(73,684		)	6,610
Inventories	(97,857		)	(31,208		)
Prepaid expenses and other current assets	(5,702		)	(19,817		)
Accounts payable, accrued expenses and other current liabilities	(34,565		)	(23,028		)
Income taxes	60,695			6,967
Long-term pension and other postretirement obligations	(3,916		)	(3,952		)
Other operating assets and liabilities	(2,265		)	(738		)
Cash provided by operating activities	316,134			288,984
Cash flows from investing activities:
Acquisitions of property, plant and equipment	(174,150		)	(93,978		)
Purchase of acquired business, net of cash acquired	(359,698		)	—
Proceeds from property disposals	1,466			8,097
Cash used in investing activities	(532,382		)	(85,881		)
Cash flows from financing activities:
Proceeds from note payable to bank	—			36,838
Payments on note payable to bank	—			(65,564		)
Proceeds from revolving line of credit and long-term borrowings	1,013,662			351,089
Payments on revolving line of credit, long-term borrowings and capital lease obligations	(586,056		)	(219,812		)
Proceeds from equity contribution under Tax Sharing Agreement between JBS USA Food Company Holdings and Pilgrim’s Pride Corporation	5,038			3,691
Payment of capitalized loan costs	(2,777		)	(693		)
Purchase of common stock under share repurchase program	(14,641		)	(7,328		)
Payment of special cash dividends	—			(699,915		)
Cash provided by (used in) financing activities	415,226			(601,694		)
Increase (decrease) in cash, cash equivalents and restricted cash	198,978			(398,591		)
Cash, cash equivalents and restricted cash, beginning of period	125,307			439,638
Cash, cash equivalents and restricted cash, end of period	$	324,285		$	41,047

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


1.	DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Business

Pilgrim’s Pride Corporation (referred to herein as “Pilgrim’s,” “PPC,” “the Company,” “we,” “us,” “our,” or similar terms) is one of the largest chicken producers in the world, with operations in the United States (“U.S.”), Mexico and Puerto Rico. Pilgrim's products are sold to foodservice, retail and frozen entrée customers. The Company's primary distribution is through retailers, foodservice distributors and restaurants throughout the United States and Puerto Rico and in the northern and central regions of Mexico. Additionally, the Company exports chicken products to approximately 80 countries. Pilgrim’s fresh chicken products consist of refrigerated (nonfrozen) whole chickens, whole cut-up chickens and selected chicken parts that are either marinated or non-marinated. The Company’s prepared chicken products include fully cooked, ready-to-cook and individually frozen chicken parts, strips, nuggets and patties, some of which are either breaded or non-breaded and either marinated or non-marinated. As a vertically integrated company, we control every phase of the production of our products. We operate feed mills, hatcheries, processing plants and distribution centers in 14 U.S. states, Puerto Rico and Mexico. As of June 25, 2017, Pilgrim’s had approximately 42,000 employees and the capacity to process approximately 39.2 million birds per five-day work week for a total of approximately 11.5 billion pounds of live chicken annually. Approximately 4,400 contract growers supply poultry for the Company’s operations. As of June 25, 2017, JBS S.A., through its indirect wholly-owned subsidiaries (together, “JBS”), beneficially owned 78.6% of the Company’s outstanding common stock.

Consolidated Financial Statements

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments unless otherwise disclosed) considered necessary for a fair presentation have been included. Operating results for the twenty-six weeks ended weeks ended June 25, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 25, 2016.

Pilgrim’s operates on a 52/53-week fiscal year that ends on the Sunday falling on or before December 31. The reader should assume any reference we make to a particular year (for example, 2017) in the notes to these Condensed Consolidated Financial Statements applies to our fiscal year and not the calendar year.

The Condensed Consolidated Financial Statements include the accounts of the Company and its majority-owned subsidiaries. We eliminate all significant affiliate accounts and transactions upon consolidation.

The Company measures the financial statements of its Mexico subsidiaries as if the U.S. dollar were the functional currency. Accordingly, we remeasure assets and liabilities, other than non-monetary assets, of the Mexico subsidiaries at current exchange rates. We remeasure non-monetary assets using the historical exchange rate in effect on the date of each asset’s acquisition. We remeasure income and expenses at average exchange rates in effect during the period. Currency exchange gains or losses are included in the line item Foreign currency transaction loss in the Condensed Consolidated Statements of Income.

Reportable Segment

We operate in one reportable business segment, as a producer and seller of chicken products we either produce or purchase for resale.

Revenue Recognition

We recognize revenue when all of the following circumstances are satisfied: (i) persuasive evidence of an arrangement exists, (ii) price is fixed or determinable, (iii) collectability is reasonably assured and (iv) delivery has occurred. Delivery occurs in the period in which the customer takes title and assumes the risks and rewards of ownership of the products specified in the customer’s purchase order or sales agreement. Revenue is recorded net of estimated incentive offerings including special pricing agreements, promotions and other volume-based incentives. Revisions to these estimates are charged back to net sales in the period in which the facts that give rise to the revision become known.

Table of Contents

Book Overdraft

The majority of the Company’s disbursement bank accounts are zero balance accounts where cash needs are funded as checks are presented for payment by the holder. Checks issued pending clearance that result in overdraft balances for accounting purposes are classified as accounts payable and the change in the related balance is reflected in operating activities on the Condensed Consolidated Statements of Cash Flows.

Restricted Cash

The Company is required to maintain cash balances with a broker as collateral for exchange traded futures contracts. These balances are classified as restricted cash as they are not available for use by the Company to fund daily operations. The balance of restricted cash may also include investments in U.S. Treasury Bills that qualify as cash equivalents, as required by the broker, to offset the obligation to return cash collateral.

The following table reconciles cash, cash equivalents and restricted cash as reported in the Condensed Consolidated Balance Sheets to the total of the same amounts shown in the Condensed Consolidated Statements of Cash Flows:



	June 25, 2017		December 25, 2016
	(In thousands)
Cash and cash equivalents	$	303,937	$	120,328
Restricted cash	20,348		4,979
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows	$	324,285	$	125,307

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on revenue recognition, which provides for a single five-step model to be applied to all revenue contracts with customers. The new standard also requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts. Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard. In June 2015, the FASB agreed to defer by one year the mandatory effective date of this standard, but will also provide entities the option to adopt the new guidance as of the original effective date. The provisions of the new guidance will be effective as of the beginning of our 2018 fiscal year, but we had the option to adopt the guidance as early as the beginning of our 2017 fiscal year. We have elected to adopt this standard as of January 1, 2018, the beginning of our 2018 fiscal year, using the modified retrospective approach. We are currently assessing our contracts with customers and evaluating the impact of the new guidance on these contracts. Although we are still evaluating the impact, we do not currently expect the new guidance to have a material impact on our financial statements beyond additional disclosure requirements.

In July 2015, the FASB issued new accounting guidance on the subsequent measurement of inventory, which, in an effort to simplify unnecessarily complicated accounting guidance that can result in several potential outcomes, requires an entity to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Current accounting guidance requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The provisions of the new guidance were effective as of the beginning of our 2017 fiscal year. The initial adoption of this guidance did not have a material impact on our financial statements.

In February 2016, the FASB issued new accounting guidance on lease arrangements, which, in an effort to increase transparency and comparability among organizations utilizing leasing, requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. In transition, the entity is required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The provisions of the new guidance will be effective as of the beginning of our 2019 fiscal year. Early adoption is permitted. We are currently evaluating the impact of the new guidance on our financial statements and have not yet selected an adoption date.

In March 2016, the FASB issued new accounting guidance on employee share-based payments, which, in an effort to simplify unnecessarily complicated aspects of accounting and reporting for share-based payment transactions, requires an entity to amend accounting and reporting methodology for areas such as the income tax consequences of share-based payments, classification of share-based awards as either equity or liabilities, and classification of share-based payment transactions in the statement of cash flows. The transition approach will vary depending on the area of accounting and reporting methodology to be

Table of Contents

amended. The Company adopted this standard on December 26, 2016, the beginning of our 2017 fiscal year, and will prospectively present excess tax benefits or deficiencies in the income statement as a component of "Provision for income taxes" rather than in the "Equity" section of the Balance Sheet. As part of the adoption, the Company did not have a cumulative-effect adjustment, as there were no previous unrecognized excess tax benefits that would impact retained earnings. As a result, there was no retrospective adjustment to the prior period statement of cash flows of excess tax benefits as an operating activity rather than a financing activity.

In June 2016, the FASB issued new accounting guidance on the measurement of credit losses on financial instruments, which, in an effort to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments, replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments affect loans, debt securities, trade receivables, net investments in leases, off-balance sheet credit exposures, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. The provisions of the new guidance will be effective as of the beginning of our 2020 fiscal year. Early adoption is permitted after our 2018 fiscal year. We are currently evaluating the impact of the new guidance on our financial statements and have not yet selected an adoption date.

In November 2016, the FASB issued new accounting guidance on the classification and presentation of restricted cash in the statement of cash flows in order to eliminate the diversity that currently exists in how companies present these changes. The new guidance requires restricted cash to be included with cash and cash equivalents when explaining the changes in cash in the statement of cash flows. We elected to early adopt this guidance as of December 26, 2016, the beginning of our 2017 fiscal year. An entity should apply the new guidance on a retrospective basis, wherein the statement of cash flow of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. Upon transition, an entity is required to comply with the applicable disclosures for a change in an accounting principle. These disclosures include the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted and the effect of the change on the financial statement line items. A description of the prior-period information that has been retrospectively adjusted and the effect of the change on the statement of cash flow line items is not disclosed as it is not material.

In March 2017, the FASB issued new accounting guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost, which, in an effort to improve consistency and transparency, requires the service cost component of defined benefit pension cost and postretirement benefit cost (“net benefit cost”) to be reported in the same line of the income statement as other compensation costs earned by the employee and the other components of net benefit cost to be reported below income from operations. The new guidance will be effective as of the beginning of our 2019 fiscal year with early adoption permitted. We are currently evaluating the impact of the new guidance on our financial statements and have not yet selected an adoption date.


2.	BUSINESS ACQUISITION

On January 6, 2017, the Company acquired 100% of the membership interests of JFC LLC and its subsidiaries (together, “GNP”) from Maschhoff Family Foods, LLC for cash. GNP is a vertically integrated poultry business based in Saint Cloud, Minnesota. The acquired business has a production capacity of 2.1 million birds per five-day work week in its three plants and employs approximately 1,750 people.

The following table summarizes the consideration paid for GNP (in thousands):



Negotiated sales price	$	350,000
Working capital adjustment	7,252
Preliminary purchase price	$	357,252

The preliminary purchase price includes $2.5 million due to PPC from Maschhoff Family Foods, LLC for working capital adjustments. Transaction costs incurred in conjunction with the purchase were approximately $0.5 million. These costs were expensed as incurred.

The results of operations of the acquired business since January 6, 2017 are included in the Company’s Condensed Consolidated Statements of Income. Net sales generated by the acquired business during the thirteen and twenty-six weeks ended June 25, 2017 totaled $115.9 million and $213.7 million, respectively The acquired business generated net income during the thirteen and twenty-six weeks ended June 25, 2017 totaling $10.2 million and $14.8 million, respectively.

The assets acquired and liabilities assumed in the GNP acquisition were measured at their fair values at January 6, 2017 as set forth below. The excess of the purchase price over the fair values of the net tangible assets and identifiable intangible assets

Table of Contents

was recorded as goodwill. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the acquisition as well the assembled workforce. These benefits include (i) complementary product offerings, (ii) an enhanced footprint in the U.S., (iii) shared knowledge of innovative technologies such as gas stunning, aeroscalding and automated deboning, (iv) enhanced position in the fast-growing antibiotic-free and certified organic chicken segments due to the addition of GNP’s portfolio of Just BARE® Certified Organic and Natural/American Humane Certified^TM/No-Antibiotics-Ever product lines and (v) attractive cost-reduction synergy opportunities and value creation. The Company has tax basis in the goodwill, and therefore, the goodwill is deductible for tax purposes. The preliminary fair values recorded were determined based upon a preliminary valuation. The estimates and assumptions used in such valuation are subject to change, which could be significant, within the measurement period (up to one year from the acquisition date). The primary areas of acquisition accounting that are not yet finalized relate to the preliminary nature of the valuation of property, plant and equipment, intangible assets and residual goodwill. We continue to review inputs and assumptions used in the preliminary valuations.

The fair values recorded for the assets acquired and liabilities assumed for GNP are as follows (in thousands):



Cash and cash equivalents	$	10
Trade accounts and other receivables	18,453
Inventories	56,459
Prepaid expenses and other current assets	3,414
Property, plant and equipment	144,138
Identifiable intangible assets	123,220
Other long-lived assets	829
Total assets acquired	346,523
Accounts payable	23,848
Other current liabilities	11,866
Other long-term liabilities	3,393
Total liabilities assumed	39,107
Total identifiable net assets	307,416
Goodwill	49,836
Total net assets	$	357,252

The Company recognized certain identifiable intangible assets during the twenty-six weeks ended June 25, 2017 due to this acquisition. The following table presents the fair values and useful lives, where applicable, of these assets:



	Fair Value		Useful Life
	(In thousands)		(In years)
Customer relationships	$	85,000	13.0
Trade names	38,200		20.0
Non-compete agreement	20		3.0
Total fair value	$	123,220
Weighted average useful life			15.2

The Company performed a valuation of the assets and liabilities of GNP as of January 6, 2017. Significant assumptions used in the preliminary valuation and the bases for their determination are summarized as follows:

•

Property, plant and equipment, net. Property, plant and equipment at fair value gave consideration to the highest and best use of the assets. The valuation of the Company's real property improvements and the majority of its personal property was based on the cost approach. The valuation of the Company's land, as if vacant, and certain personal property assets was based on the market or sales comparison approach.

•

Trade names. The Company valued two trade names using the income approach, specifically the relief from royalty method. Under this method, the asset value of each trade name was determined by estimating the hypothetical royalties that would have to be paid if it was not owned. Royalty rates were selected based on consideration of several factors, including (i) prior transactions involving GNP trade names, (ii) incomes derived from license agreements on comparable

Table of Contents

trade names within the food industry and (iii) the relative profitability and perceived contribution of each trade name. The royalty rate used in the determination of the fair values of the two trade names was 2.0% of expected net sales related to the respective trade names. In estimating the fair value of the trade names, net sales related to the respective trade names were estimated to grow at a rate of 2.5%. Income taxes were estimated at 39.3% of pre-tax income, a tax amortization benefit factor was estimated at 1.2098 and the hypothetical savings generated by avoiding royalty costs were discounted using a rate of 13.8%.

•

Customer relationships. The Company valued GNP customer relationships using the income approach, specifically the multi-period excess earnings model. Under this model, the fair value of the customer relationships asset was determined by estimating the net cash inflows from the relationships discounted to present value. In estimating the fair value of the customer relationships, net sales related to existing GNP customers were estimated to grow at a rate of 2.5% annually, but we also anticipate losing existing GNP customers at an attrition rate of 4.0%. Income taxes were estimated at 39.3% of pre-tax income, a tax amortization benefit factor was estimated at 1.2098 and net cash flows attributable to our existing customers were discounted using a rate of 13.8%.

The Company recognized the following change in goodwill due to this acquisition during the twenty-six weeks ended June 25, 2017 (in thousands):



Balance, beginning of period	$	125,607
Preliminary purchase price attributed to goodwill	49,836
Balance, end of period	$	175,443

During the thirteen weeks ended June 25, 2017, the Company recognized restructuring charges in the amounts of $0.7 million and $0.1 million related to the elimination of prepaid costs associated with obsolete GNP software and involuntary employee termination costs, respectively. These charges are reported in the line item Administrative restructuring charges on the Condensed Consolidated Statements of Income. The Company expects to incur additional involuntary employee termination costs of approximately $1.8 million during 2017.

The following unaudited pro forma information presents the combined financial results for the Company and GNP as if the acquisition had been completed at the beginning of the Company’s prior year, December 28, 2015.



	Twenty-Six Weeks Ended June 25, 2017		Twenty-Six Weeks Ended June 26, 2016
	(In thousands, except per share amount)
Net sales	$	4,277,896	$	4,209,015
Net income attributable to Pilgrim's Pride Corporation	325,179		266,341
Net income attributable to Pilgrim's Pride Corporation per common share - diluted	1.31		1.04

The above unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what the Company’s results of operations would have been had it completed the acquisition on the date assumed, nor is it necessarily indicative of the results that may be expected in future periods. Pro forma adjustments exclude cost savings from any synergies resulting from the acquisition.


3.	FAIR VALUE MEASUREMENTS

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Assets and liabilities measured at fair value must be categorized into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation:



Level 1		Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2		Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or

Level 3		Unobservable inputs, such as discounted cash flow models or valuations.

Table of Contents

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety.

As of June 25, 2017 and December 25, 2016, the Company held derivative assets and liabilities that were required to be measured at fair value on a recurring basis. Derivative assets and liabilities consist of long and short positions on exchange-traded commodity futures instruments and foreign currency forward contracts to manage translation risk.

The following items were measured at fair value on a recurring basis:



	June 25, 2017
	Level 1			Total
	(In thousands)
Fair value assets:
Commodity futures instruments	$	3,855		$	3,855
Commodity options instruments	9			9
Fair value liabilities:
Commodity futures instruments	(8,717		)	(8,717		)
Commodity options instruments	(3,019		)	(3,019		)
Foreign currency instruments	(186		)	(186		)



	December 25, 2016
	Level 1			Total
	(In thousands)
Fair value assets:
Commodity futures instruments	$	5,341		$	5,341
Commodity options instruments	98			98
Fair value liabilities:
Commodity futures instruments	(4,063		)	(4,063		)
Commodity option instruments	(2,764		)	(2,764		)

See “Note 7. Derivative Financial Instruments” for additional information.

Fair value and carrying value for our fixed-rate debt obligation is as follows:



	June 25, 2017						December 25, 2016
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
				(In thousands)
Fixed-rate senior notes payable at 5.75%, at Level 1 inputs	$	(500,000	)	$	(504,005	)	$	(500,000	)	$	(503,395	)

See “Note 10. Long-Term Debt and Other Borrowing Arrangements” for additional information.

The valuation of financial assets and liabilities classified in Level 1 is determined using a market approach, taking into account current interest rates, creditworthiness, and liquidity risks in relation to current market conditions, and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of financial assets and liabilities in Level 2 is determined using a market approach based upon quoted prices for similar assets and liabilities in active markets or other inputs that are observable for substantially the full term of the financial instrument. The valuation of financial assets in Level 3 is determined using an income approach based on unobservable inputs such as discounted cash flow models or valuations.

In addition to the fair value disclosure requirements related to financial instruments carried at fair value, accounting standards require periodic disclosures regarding the fair value of all of the Company’s financial instruments. The methods and significant assumptions used to estimate the fair value of financial instruments and any changes in methods or significant assumptions from prior periods are also required to be disclosed.

Derivative assets were recorded at fair value based on quoted market prices and are included in the line item Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. Derivative liabilities were recorded at fair value

Table of Contents

based on quoted market prices and are included in the line item Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. The fair value of the Company’s fixed-rate debt obligation was based on the quoted market price at June 25, 2017 or December 25, 2016, as applicable.

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records certain assets and liabilities at fair value on a nonrecurring basis. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment charges when required by U.S. GAAP. There were no significant fair value measurement losses recognized for such assets and liabilities in the periods reported.


4.	TRADE ACCOUNTS AND OTHER RECEIVABLES

Trade accounts and other receivables, less allowance for doubtful accounts, consisted of the following:



	June 25, 2017			December 25, 2016
	(In thousands)
Trade accounts receivable	$	394,219		$	305,337
Notes receivable - current	630			630
Other receivables	17,041			15,766
Receivables, gross	411,890			321,733
Allowance for doubtful accounts	(5,304		)	(4,563		)
Receivables, net	$	406,586		$	317,170

Account receivable from related parties^(a)	$	4,050		$	3,913

(a) Additional information regarding accounts receivable from related parties is included in “Note 15. Related Party Transactions.”

Activity in the allowance for doubtful accounts for the twenty-six weeks ended June 25, 2017 was as follows (in thousands):



Balance, beginning of period	$	(4,563	)
Provision charged to operating results	(771		)
Account write-offs and recoveries	374
GNP acquisition	(17		)
Effect of exchange rate	(327		)
Balance, end of period	$	(5,304	)


5.	INVENTORIES

Inventories consisted of the following:



	June 25, 2017		December 25, 2016
	(In thousands)
Live chicken and hens	$	411,445	$	362,054
Feed, eggs and other	274,785		250,680
Finished chicken products	276,749		182,918
Total chicken inventories	962,979		795,652
Commercial feed and other	4,598		17,610
Total inventories	$	967,577	$	813,262


6.	INVESTMENTS IN SECURITIES

We recognize investments in available-for-sale securities as cash equivalents, current investments or long-term investments depending upon each security's length to maturity. Additionally, those securities identified by management at the time of purchase for funding operations in less than one year are classified as current.

Table of Contents

The following table summarizes our investments in available-for-sale securities:



	June 25, 2017				December 25, 2016
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In thousands)
Cash equivalents:
Fixed income securities	$	85,849	$	85,849	$	44,865	$	44,865
Other	62		62		61		61

Securities classified as cash and cash equivalents mature within 90 days. Securities classified as short-term investments mature between 91 and 365 days. Securities classified as long-term investments mature after 365 days. The specific identification method is used to determine the cost of each security sold and each amount reclassified out of accumulated other comprehensive loss to earnings. Gross realized gains and gross realized losses recognized during the thirteen and twenty-six weeks ended June 25, 2017 and June 26, 2016 related to the Company’s available-for-sale securities were immaterial. Proceeds received from the sale or maturity of available-for-sale securities recognized as either short- or long-term investments are historically disclosed in the Condensed Consolidated Statements of Cash Flows. No proceeds were received from the sale or maturity of available-for-sale securities recognized as either short- or long-term investments during the twenty-six weeks ended June 25, 2017 and June 26, 2016. Net unrealized holding gains and losses on the Company’s available-for-sale securities recognized during the twenty-six weeks ended June 25, 2017 and June 26, 2016 that have been included in accumulated other comprehensive loss and the net amount of gains and losses reclassified out of accumulated other comprehensive loss to earnings during the twenty-six weeks ended June 25, 2017 and June 26, 2016 is disclosed in “Note 13. Stockholders’ Equity - Accumulated Other Comprehensive Loss.”


7.	DERIVATIVE FINANCIAL INSTRUMENTS

The Company utilizes various raw materials in its operations, including corn, soybean meal, soybean oil, sorghum and energy, such as natural gas, electricity and diesel fuel, which are all considered commodities. The Company considers these raw materials generally available from a number of different sources and believes it can obtain them to meet its requirements. These commodities are subject to price fluctuations and related price risk due to factors beyond our control, such as economic and political conditions, supply and demand, weather, governmental regulation and other circumstances. Generally, the Company purchases derivative financial instruments, specifically exchange-traded futures and options, in an attempt to mitigate price risk related to its anticipated consumption of commodity inputs for approximately the next 12 months. The Company may purchase longer-term derivative financial instruments on particular commodities if deemed appropriate.

The Company has operations in Mexico and, therefore, has exposure to translational foreign exchange risk when the financial results of those operations are translated to U.S. dollars. The Company has purchased foreign currency forward contracts to manage this translational foreign exchange risk.

The fair value of derivative assets is included in the line item Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets while the fair value of derivative liabilities is included in the line item Accrued expenses and other current liabilities on the same statements. Our counterparties require that we post cash collateral for changes in the net fair value of the derivative contracts.

We have not designated the derivative financial instruments that we have purchased to mitigate commodity purchase or foreign currency transaction exposures as cash flow hedges. Therefore, we recognized changes in the fair value of these derivative financial instruments immediately in earnings. Gains or losses related to these derivative financial instruments are included in the line item Cost of sales in the Condensed Consolidated Statements of Income. The Company recognized net gains of $3.2 million and $1.8 million related to changes in the fair value of its derivative financial instruments during the thirteen weeks ended June 25, 2017 and June 26, 2016, respectively. The Company also recognized net gains of $0.4 million and $5.9 million related to changes in the fair value of its derivative financial instruments during the twenty-six weeks ended June 25, 2017 and June 26, 2016, respectively. Information regarding the Company’s outstanding derivative instruments and cash collateral posted with (owed to) brokers is included in the following table:

Table of Contents



	June 25, 2017			December 25, 2016
	(Fair values in thousands)
Fair values:
Commodity derivative assets	$	3,864		$	5,439
Commodity derivative liabilities	(11,736		)	(6,827		)
Foreign currency derivative liabilities	(186		)	—
Cash collateral posted with brokers	20,348			4,979
Derivatives coverage^(a):
Corn	2.0		%	2.3		%
Soybean meal	12.0		%	0.3		%
Period through which stated percent of needs are covered:
Corn	September 2018			September 2018
Soybean meal	January 2018			July 2017


(a)	Derivatives coverage is the percent of anticipated commodity needs covered by outstanding derivative instruments through a specified date.


8.	PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment (“PP&E”), net consisted of the following:



	June 25, 2017			December 25, 2016
	(In thousands)
Land	$	164,157		$	112,132
Buildings	1,256,981			1,169,984
Machinery and equipment	1,888,854			1,789,550
Autos and trucks	47,840			50,964
Construction-in-progress	268,175			231,874
PP&E, gross	3,626,007			3,354,504
Accumulated depreciation	(1,904,059		)	(1,848,564		)
PP&E, net	$	1,721,948		$	1,505,940

The Company recognized depreciation expenses of $52.0 million and $43.5 million during the thirteen weeks ended June 25, 2017 and June 26, 2016, respectively. The Company recognized depreciation expense of $97.8 million and $81.9 million during the twenty-six weeks ended June 25, 2017 and June 26, 2016, respectively.

During the twenty-six weeks ended June 25, 2017, Pilgrim's spent $174.2 million on capital projects and transferred $139.6 million of completed projects from construction-in-progress to depreciable assets. During the twenty-six weeks ended June 26, 2016, the Company spent $94.0 million on capital projects and transferred $128.1 million of completed projects from construction-in-progress to depreciable assets. Capital expenditures were primarily incurred during the twenty-six weeks ended June 25, 2017 to improve efficiencies and reduce costs.

During the thirteen and twenty-six weeks ended June 25, 2017, the Company sold certain PP&E for cash of $2.0 million and $1.5 million, respectively, and recognized net gains on these sales of $0.9 million and $0.8 million, respectively. PP&E sold in the twenty-six weeks ended June 25, 2017 included poultry farms in Alabama and Texas, vacant land in Texas and miscellaneous equipment. During the thirteen and twenty-six weeks ended June 26, 2016, the Company sold certain PP&E for cash of $7.5 million and $8.1 million, respectively, and recognized net gains on these sales of $6.6 million and $6.8 million, respectively. PP&E sold in the twenty-six weeks ended June 26, 2016 included poultry farms in Mexico and Texas, an office building in Texas, vacant land in Alabama and Texas and miscellaneous equipment.

Management has committed to the sale of certain properties and related assets, including, but not limited to, a processing complex in Texas, a processing complex in Alabama and miscellaneous machinery and equipment, which no longer fit into the operating plans of the Company. The Company is actively marketing these properties and related assets for immediate sale and believes a sale of each property can be consummated within the next 12 months. At both June 25, 2017 and December 25, 2016, the Company reported properties and related assets totaling $5.5 million and $5.3 million, respectively, in the line item Assets held for sale on its Condensed Consolidated Balance Sheets. The fair values of the Texas processing complex and the Alabama

Table of Contents

processing complex were both based on quoted market prices. The fair values of the miscellaneous assets were based on prices for similar assets. The Company tested the recoverability of its assets held for sale and determined that the aggregate carrying amount of the Texas processing complex asset group was recoverable over the remaining life of the respective primary asset in that asset group. However, the aggregate carrying amount of the Alabama processing complex asset group was not recoverable over the remaining life of the respective primary asset in that asset group. The Company recognized impairment cost of $3.5 million, which it reported in the line item Administrative restructuring charges on its Condensed Consolidated Statements of Income.

The Company has closed or idled various processing complexes, processing plants, hatcheries, broiler farms, and feed mills throughout the U.S. Neither the Board of Directors nor JBS has determined if it would be in the best interest of the Company to divest any of these idled assets. Management is therefore not certain that it can or will divest any of these assets within one year, is not actively marketing these assets and, accordingly, has not classified them as assets held for sale. The Company continues to depreciate these assets. At June 25, 2017, the carrying amount of these idled assets was $52.7 million based on depreciable value of $174.0 million and accumulated depreciation of $121.3 million.

The Company last tested the recoverability of its long-lived assets held and used in December 2016. At that time, the Company determined that the carrying amount of its long-lived assets held and used was recoverable over the remaining life of the primary asset in the group and that long-lived assets held and used passed the Step 1 recoverability test under ASC 360-10-35, Impairment or Disposal of Long-Lived Assets. There were no indicators present during the twenty-six weeks ended June 25, 2017 that required the Company to test its long-lived assets held and used for recoverability.


9.	CURRENT LIABILITIES

Current liabilities, other than current notes payable to banks, income taxes and current maturities of long-term debt, consisted of the following components:



	June 25, 2017		December 25, 2016
	(In thousands)
Accounts payable:
Trade accounts	$	457,952	$	487,214
Book overdrafts	46,964		63,577
Other payables	14,904		4,306
Total accounts payable	519,820		555,097
Accounts payable to related parties^(a)	3,622		1,421
Accrued expenses and other current liabilities:
Compensation and benefits	107,631		110,385
Interest and debt-related fees	10,934		8,685
Insurance and self-insured claims	77,540		82,544
Derivative liabilities:
Futures	8,717		4,063
Options	3,019		2,764
Foreign currency	186		—
Other accrued expenses	116,700		82,258
Total accrued expenses and other current liabilities	324,727		290,699
	$	848,169	$	847,217

(a) Additional information regarding accounts payable from related parties is included in “Note 15. Related Party Transactions.”

Table of Contents


10.	LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS

Long-term debt and other borrowing arrangements, including current notes payable to banks, consisted of the following components:



	Maturity	June 25, 2017			December 25, 2016
		(In thousands)
Long-term debt and other long-term borrowing arrangements:
Senior notes payable at 5.75%	2025	$	500,000		$	500,000
U.S. Credit Facility (defined below):
Term note payable at 4.75%	2022	800,000			500,000
Revolving note payable at 4.56%	2022	73,262			—
Mexico Credit Facility (defined below) with notes payable at TIIE Rate plus 0.95%	2019	83,328			23,304
Capital lease obligations	Various	330			376
Long-term debt		1,456,920			1,023,680
Less: Current maturities of long-term debt		(40,098		)	(94		)
Long-term debt, less current maturities		1,416,822			1,023,586
Less: Capitalized financing costs		(12,558		)	(11,728		)
Long-term debt, less current maturities, net of capitalized financing costs:		$	1,404,264		$	1,011,858

Senior Notes

On March 11, 2015, the Company completed a sale of $500.0 million aggregate principal amount of its 5.75% senior notes due 2025 (the “Senior Notes”). The Company used the net proceeds from the sale of the Senior Notes to repay $350.0 million and $150.0 million of the term loan indebtedness under the U.S. Credit Facility (defined below) on March 12, 2015 and April 22, 2015, respectively. The Notes were sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act.

The Senior Notes are governed by, and were issued pursuant to, an indenture dated as of March 11, 2015 by and among the Company, its guarantor subsidiary and Wells Fargo Bank, National Association, as trustee (the “Indenture”). The Indenture provides, among other things, that the Senior Notes bear interest at a rate of 5.75% per annum from the date of issuance until maturity, payable semi-annually in cash in arrears, beginning on September 15, 2015. The Senior Notes are guaranteed on a senior unsecured basis by the Company’s guarantor subsidiary. In addition, any of the Company’s other existing or future domestic restricted subsidiaries that incur or guarantee any other indebtedness (with limited exceptions) must also guarantee the Senior Notes. The Senior Notes and related guarantees are unsecured senior obligations of the Company and its guarantor subsidiary and rank equally with all of the Company’s and its guarantor subsidiary’s other unsubordinated indebtedness. The Senior Notes and the Indenture also contain customary covenants and events of default, including failure to pay principal or interest on the Senior Notes when due, among others.

U.S. Credit Facility

On May 8, 2017, the Company and certain of its subsidiaries entered into a Third Amended and Restated Credit Agreement (the “U.S. Credit Facility”) with Coöperatieve Rabobank U.A., New York Branch (“Rabobank”), as administrative agent and collateral agent, and the other lenders party thereto. The U.S. Credit Facility provides for a revolving loan commitment of up to $750.0 million and a term loan commitment of up to $800.0 million (the “Term Loans”). The U.S. Credit Facility also includes an accordion feature that allows the Company, at any time, to increase the aggregate revolving loan and term loan commitments by up to an additional $1.0 billion, subject to the satisfaction of certain conditions, including obtaining the lenders’ agreement to participate in the increase.

The revolving loan commitment under the U.S. Credit Facility matures on May 6, 2022. All principal on the Term Loans is due at maturity on May 6, 2022. Installments of principal are required to be made, in an amount equal to 1.25% of the original principal amount of the term loans, on a quarterly basis prior to the maturity date of the term loans. Covenants in the U.S. Credit Facility also require the Company to use the proceeds it receives from certain asset sales and specified debt or equity issuances and upon the occurrence of other events to repay outstanding borrowings under the U.S. Credit Facility. As of June 25, 2017, the company had Term Loans outstanding totaling $800.0 million and the amount available for borrowing under the revolving loan

Table of Contents

commitment was $631.9 million. The Company had letters of credit of $44.8 million and borrowings of $73.3 million outstanding under the revolving loan commitment as of June 25, 2017.

The U.S. Credit Facility includes a $75.0 million sub-limit for swingline loans and a $125.0 million sub-limit for letters of credit. Outstanding borrowings under the revolving loan commitment and the Term Loans bear interest at a per annum rate equal to (i) in the case of LIBOR loans, LIBOR plus 1.50% through June 25, 2017 and, thereafter, based on the Company’s net senior secured leverage ratio, between LIBOR plus 1.25% and LIBOR plus 2.75% and (ii) in the case of alternate base rate loans, the base rate plus 0.50% through June 25, 2017 and, based on the Company’s net senior secured leverage ratio, between the base rate plus 0.25% and base rate plus 1.75% thereafter.

The U.S. Credit Facility contains financial covenants and various other covenants that may adversely affect the Company’s ability to, among other things, incur additional indebtedness, incur liens, pay dividends or make certain restricted payments, consummate certain assets sales, enter into certain transactions with JBS and the Company’s other affiliates, merge, consolidate and/or sell or dispose of all or substantially all of our assets. The U.S. Credit Facility requires the Company to comply with a minimum level of tangible net worth covenant. The U.S. Credit Facility also provides that we may not incur capital expenditures in excess of $500.0 million in any fiscal year. The Company is currently in compliance with the covenants under the U.S. Credit Facility.

All obligations under the U.S. Credit Facility continue to be unconditionally guaranteed by certain of the Company’s subsidiaries and continue to be secured by a first priority lien on (i) the accounts receivable and inventory of our company and its non-Mexico subsidiaries, (ii) 100% of the equity interests in our domestic subsidiaries, To-Ricos, Ltd. and To-Ricos Distribution, Ltd., and 65% of the equity interests in our direct foreign subsidiaries and (iii) substantially all of the assets of the Company and the guarantors under the U.S. Credit Facility.

Mexico Credit Facility

On September 27, 2016, certain of our Mexican subsidiaries entered into an unsecured credit agreement (the “Mexico Credit Facility”) with BBVA Bancomer, S.A. Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer, as lender. The loan commitment under the Mexico Credit Facility was $1.5 billion Mexican pesos. Outstanding borrowings under the Mexico Credit Facility accrued interest at a rate equal to the Interbank Equilibrium Interest Rate plus 0.95%. The Mexico Credit Facility is scheduled to mature on September 27, 2019. As of June 25, 2017, the U.S. dollar-equivalent loan commitment under the Mexico Credit Facility was $83.3 million, and there were $83.3 million outstanding borrowings under the Mexico Credit Facility that bear interest at a per annum rate of 8.10%. As of June 25, 2017, the U.S. dollar-equivalent borrowing availability was $5,600.


11.	INCOME TAXES

The Company recorded income tax expense of $161.1 million, a 32.9% effective tax rate, for the twenty-six weeks ended June 25, 2017 compared to income tax expense of $141.0 million, a 34.2% effective tax rate, for the twenty-six weeks ended June 26, 2016. The increase in income tax expense in 2017 resulted primarily from an increase in pre-tax income.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carry back and carry forward periods), projected future taxable income and tax-planning strategies in making this assessment. As of June 25, 2017, the Company did not believe it had sufficient positive evidence to conclude that realization of its federal capital loss carry forwards and a portion of its foreign net deferred tax assets are more likely than not to be realized.

For the twenty-six weeks ended June 25, 2017 and June 26, 2016, there is a tax effect of $1.5 million and $5.3 million, respectively, reflected in other comprehensive income.

Beginning in 2017, as a result of new FASB guidance on share-based payments, excess tax benefits are now required to be reported in income tax expense rather than in additional paid-in capital. For the twenty-six weeks ended June 25, 2017, there is an immaterial tax effect reflected in income tax expense due to excess tax benefits related to share-based compensation. For the twenty-six weeks ended June 26, 2016, there is no tax effect reflected in additional paid-in capital due to excess tax benefits related to share-based compensation. See “Note 1. Description of Business and Basis of Presentation” for additional information.

With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by taxing authorities for years prior to 2010 and is no longer subject to Mexico income tax examinations by taxing authorities for years prior to 2010.

Table of Contents

The United States Fifth Circuit Court of Appeals rendered judgment in favor of the Company regarding the IRS’ amended proof of claim relating to the tax year ended June 26, 2004 for Gold Kist Inc. (“Gold Kist”). See “Note 16. Commitments and Contingencies” for additional information.


12.	PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company sponsors programs that provide retirement benefits to most of its employees. These programs include qualified defined benefit pension plans, nonqualified defined benefit retirement plans, a defined benefit postretirement life insurance plan and defined contribution retirement savings plans. Expenses recognized under all of these retirement plans totaled $1.6 million and $1.4 million in the thirteen weeks ended June 25, 2017 and June 26, 2016, respectively, and $3.2 million and $3.0 million in the twenty-six weeks ended June 25, 2017 and June 26, 2016, respectively.

Defined Benefit Plans Obligations and Assets

The change in benefit obligation, change in fair value of plan assets, funded status and amounts recognized in the Condensed Consolidated Balance Sheets for these defined benefit plans were as follows:



	Twenty-Six Weeks Ended June 25, 2017						Twenty-Six Weeks Ended June 26, 2016
	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
Change in projected benefit obligation:	(In thousands)
Projected benefit obligation, beginning of period	$	167,159		$	1,648		$	165,952		$	1,672
Interest cost	2,786			25			2,793			26
Actuarial losses (gains)	8,885			101			12,736			72
Benefits paid	(4,430		)	(74		)	(4,581		)	(70		)
Projected benefit obligation, end of period	$	174,400		$	1,700		$	176,900		$	1,700



	Twenty-Six Weeks Ended June 25, 2017						Twenty-Six Weeks Ended June 26, 2016
	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
Change in plan assets:	(In thousands)
Fair value of plan assets, beginning of period	$	97,526		$	—		$	96,947		$	—
Actual return on plan assets	7,142			—			1,084			—
Contributions by employer	4,502			74			4,412			70
Benefits paid	(4,430		)	(74		)	(4,581		)	(70		)
Fair value of plan assets, end of period	$	104,740		$	—		$	97,862		$	—



	June 25, 2017						December 25, 2016
	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
Funded status:	(In thousands)
Unfunded benefit obligation, end of period	$	(69,660	)	$	(1,700	)	$	(69,633	)	$	(1,648	)



	June 25, 2017						December 25, 2016
	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
Amounts recognized in the Condensed Consolidated Balance Sheets at end of period:	(In thousands)
Current liability	$	(13,103	)	$	(147	)	$	(13,113	)	$	(147	)
Long-term liability	(56,557		)	(1,553		)	(56,520		)	(1,501		)
Recognized liability	$	(69,660	)	$	(1,700	)	$	(69,633	)	$	(1,648	)

Table of Contents



	June 25, 2017				December 25, 2016
	Pension Benefits		Other Benefits		Pension Benefits		Other Benefits
Amounts recognized in accumulated other comprehensive loss at end of period:	(In thousands)
Net actuarial loss (gain)	$	50,398	$	70	$	46,494	$	(31	)

The accumulated benefit obligation for our defined benefit pension plans was $174.4 million and $167.2 million at June 25, 2017 and December 25, 2016, respectively. Each of our defined benefit pension plans had accumulated benefit obligations that exceeded the fair value of plan assets at June 25, 2017 and December 25, 2016, respectively. As of June 25, 2017, the weighted average duration of our defined benefit pension obligation is 32.44 years.

Net Periodic Benefit Costs

Net defined benefit pension and other postretirement costs included the following components:



	Thirteen Weeks Ended June 25, 2017					Thirteen Weeks Ended June 26, 2016					Twenty-Six Weeks Ended June 25, 2017					Twenty-Six Weeks Ended June 26, 2016
	Pension Benefits			Other Benefits		Pension Benefits			Other Benefits		Pension Benefits			Other Benefits		Pension Benefits			Other Benefits
	(In thousands)
Interest cost	$	1,393		$	12	$	1,397		$	14	$	2,786		$	25	$	2,793		$	26
Estimated return on plan assets	(1,313		)	—		(1,314		)	—		(2,626		)	—		(2,628		)	—
Amortization of net loss	233			—		164			—		466			—		329			—
Net costs	$	313		$	12	$	247		$	14	$	626		$	25	$	494		$	26

Economic Assumptions

The weighted average assumptions used in determining pension and other postretirement plan information were as follows:



	June 25, 2017				December 25, 2016
	Pension Benefits		Other Benefits		Pension Benefits		Other Benefits
Assumptions used to measure benefit obligation at end of period:
Discount rate	3.88	%	3.41	%	4.31	%	3.81	%



	Twenty-Six Weeks Ended June 25, 2017				Twenty-Six Weeks Ended June 26, 2016
	Pension Benefits		Other Benefits		Pension Benefits		Other Benefits
Assumptions used to measure net pension and other postretirement cost:
Discount rate	4.31	%	3.81	%	4.47	%	4.47	%
Expected return on plan assets	5.50	%	NA		5.50	%	NA

The discount rate represents the interest rate used to determine the present value of future cash flows currently expected to be required to settle the Company's pension and other benefit obligations. The weighted average discount rate for each plan was established by comparing the projection of expected benefit payments to the AA Above Median yield curve. The expected benefit payments were discounted by each corresponding discount rate on the yield curve. For payments beyond 30 years, the Company extended the curve assuming the discount rate derived in year 30 is extended to the end of the plan's payment expectations. Once the present value of the string of benefit payments was established, the Company determined the single rate on the yield curve, that when applied to all obligations of the plan, would exactly match the previously determined present value. As part of the evaluation of pension and other postretirement assumptions, the Company applied assumptions for mortality that incorporate generational white and blue collar mortality trends. In determining its benefit obligations, the Company used generational tables that take into consideration increases in plan participant longevity. As of June 25, 2017 and December 25, 2016, all pension and other postretirement benefit plans used variations of the RP2014 mortality table and the MP2015 mortality improvement scale.

Table of Contents

The sensitivity of the projected benefit obligation for pension benefits to changes in the discount rate is set out below. The impact of a change in the discount rate of 0.25% on the projected benefit obligation for other benefits is less than $1,000. This sensitivity analysis is based on changing one assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to variations in significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as for calculating the liability recognized in the Condensed Consolidated Balance Sheet.



	Increase in Discount Rate of 0.25%			Decrease in Discount Rate of 0.25%
	(In thousands)
Impact on projected benefit obligation for pension benefits	$	(4,819	)	$	5,123

The expected rate of return on plan assets was primarily based on the determination of an expected return and behaviors for each plan's current asset portfolio that the Company believes are likely to prevail over long periods. This determination was made using assumptions for return and volatility of the portfolio. Asset class assumptions were set using a combination of empirical and forward-looking analysis. To the extent historical results were affected by unsustainable trends or events, the effects of those trends or events were quantified and removed. The Company also considered anticipated asset allocations, investment strategies and the views of various investment professionals when developing this rate.

Plan Assets

The following table reflects the pension plans’ actual asset allocations:



	June 25, 2017		December 25, 2016
Cash and cash equivalents	—	%	—	%
Pooled separate accounts^(a):
Equity securities	5	%	5	%
Fixed income securities	5	%	5	%
Common collective trust funds^(a):
Equity securities	60	%	60	%
Fixed income securities	30	%	30	%
Total assets	100	%	100	%

(a)

Pooled separate accounts (“PSAs”) and common collective trust funds (“CCTs”) are two of the most common types of alternative vehicles in which benefit plans invest. These investments are pooled funds that look like mutual funds, but they are not registered with the SEC. Often times, they will be invested in mutual funds or other marketable securities, but the unit price generally will be different from the value of the underlying securities because the fund may also hold cash for liquidity purposes, and the fees imposed by the fund are deducted from the fund value rather than charged separately to investors. Some PSAs and CCTs have no restrictions as to their investment strategy and can invest in riskier investments, such as derivatives, hedge funds, private equity funds, or similar investments.

Absent regulatory or statutory limitations, the target asset allocation for the investment of pension assets in the pooled separate accounts is 50% in each of fixed income securities and equity securities and the target asset allocation for the investment of pension assets in the common collective trust funds is 30% in fixed income securities and 70% in equity securities. The plans only invest in fixed income and equity instruments for which there is a readily available public market. We develop our expected long-term rate of return assumptions based on the historical rates of returns for equity and fixed income securities of the type in which our plans invest.

Table of Contents

The fair value measurements of plan assets fell into the following levels of the fair value hierarchy as of June 25, 2017 and December 25, 2016:



	June 25, 2017								December 25, 2016
	Level 1^(a)		Level 2^(b)		Level 3^(c)		Total		Level 1^(a)		Level 2^(b)		Level 3^(c)		Total
	(In thousands)
Cash and cash equivalents	$	127	$	—	$	—	$	127	$	119	$	—	$	—	$	119
Pooled separate accounts:
Large U.S. equity funds^(d)	—		3,583		—		3,583		—		3,302		—		3,302
Small/Mid U.S. equity funds^(e)	—		419		—		419		—		406		—		406
International equity funds^(f)	—		1,419		—		1,419		—		1,231		—		1,231
Fixed income funds^(g)	—		4,749		—		4,749		—		4,867		—		4,867
Common collective trusts funds:
Large U.S. equity funds^(d)	—		25,699		—		25,699		—		24,547		—		24,547
Small U.S. equity funds^(e)	—		18,489		—		18,489		—		17,344		—		17,344
International equity funds^(f)	—		18,581		—		18,581		—		17,006		—		17,006
Fixed income funds^(g)	—		31,674		—		31,674		—		28,704		—		28,704
Total assets	$	127	$	104,613	$	—	$	104,740	$	119	$	97,407	$	—	$	97,526


(a)	Unadjusted quoted prices in active markets for identical assets are used to determine fair value.


(b)	Quoted prices in active markets for similar assets and inputs that are observable for the asset are used to determine fair value.


(c)	Unobservable inputs, such as discounted cash flow models or valuations, are used to determine fair value.


(d)	This category is comprised of investment options that invest in stocks, or shares of ownership, in large, well-established U.S. companies. These investment options typically carry more risk than fixed income options but have the potential for higher returns over longer time periods.


(e)	This category is generally comprised of investment options that invest in stocks, or shares of ownership, in small to medium-sized U.S. companies. These investment options typically carry more risk than larger U.S. equity investment options but have the potential for higher returns.


(f)	This category is comprised of investment options that invest in stocks, or shares of ownership, in companies with their principal place of business or office outside of the U.S.

(g)

This category is comprised of investment options that invest in bonds, or debt of a company or government entity (including U.S. and non-U.S. entities). It may also include real estate investment options that directly own property. These investment options typically carry more risk than short-term fixed income investment options (including, for real estate investment options, liquidity risk), but less overall risk than equities.

The valuation of plan assets in Level 2 is determined using a market approach based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities primarily include equity and fixed income securities funds.

Benefit Payments

The following table reflects the benefits as of June 25, 2017 expected to be paid through 2026 from our pension and other postretirement plans. Because our pension plans are primarily funded plans, the anticipated benefits with respect to these plans will come primarily from the trusts established for these plans. Because our other postretirement plans are unfunded, the anticipated benefits with respect to these plans will come from our own assets.



	Pension Benefits		Other Benefits
	(In thousands)
2017 (remaining)	$	8,482	$	73
2018	11,617		147
2019	11,088		146
2020	11,019		144
2021	10,790		142
2022-2026	49,927		640
Total	$	102,923	$	1,292

We anticipate contributing $6.1 million and $0.1 million, as required by funding regulations or laws, to our pension plans and other postretirement plans, respectively, during the remainder of 2017.

Table of Contents

Unrecognized Benefit Amounts in Accumulated Other Comprehensive Loss

The amounts in accumulated other comprehensive loss that were not recognized as components of net periodic benefits cost and the changes in those amounts are as follows:



	Twenty-Six Weeks Ended June 25, 2017						Twenty-Six Weeks Ended June 26, 2016
	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
	(In thousands)
Net actuarial loss (gain), beginning of period	$	46,494		$	(31	)	$	38,115		$	(79	)
Amortization	(466		)	—			(329		)	—
Curtailment and settlement adjustments	—			—			—			—
Actuarial loss (gain)	8,885			101			12,736			72
Asset loss (gain)	(4,515		)	—			1,543			—
Net actuarial loss (gain), end of period	$	50,398		$	70		$	52,065		$	(7	)

The Company expects to recognize in net pension cost throughout the remainder of 2017 an actuarial loss of $0.5 million that was recorded in accumulated other comprehensive loss at June 25, 2017.

Risk Management

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility. The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets under perform this yield, this will create a deficit. The pension plans hold a significant proportion of equities, which are expected to outperform corporate bonds in the long-term while contributing volatility and risk in the short-term. The Company monitors the level of investment risk but has no current plan to significantly modify the mixture of investments. The investment position is discussed more below.

Changes in bond yields. A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.

The investment position is managed and monitored by a committee of individuals from various departments. This group actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the pension obligations. The group has not changed the processes used to manage its risks from previous periods. The group does not use derivatives to manage its risk. Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. The majority of equities are in U.S. large and small cap companies with some global diversification into international entities. The plans are not exposed to significant foreign currency risk.

Remeasurement

The Company remeasures both plan assets and obligations on a quarterly basis.


13.	STOCKHOLDERS' EQUITY

Accumulated Other Comprehensive Loss

The following tables provide information regarding the changes in accumulated other comprehensive loss:

Table of Contents



	Twenty-Six Weeks Ended June 25, 2017^(a)								Twenty-Six Weeks Ended June 26, 2016^(a)
	Losses Related to Pension and Other Postretirement Benefits			Unrealized Holding Gains on Available-for-Sale Securities		Total			Losses Related to Pension and Other Postretirement Benefits			Unrealized Holding Gains on Available-for-Sale Securities			Total
	(In thousands)
Balance, beginning of period	$	(64,243	)	$	—	$	(64,243	)	$	(58,997	)	$	67		$	(58,930	)
Other comprehensive income (loss) before reclassifications	(2,782		)	—		(2,782		)	(8,934		)	265			(8,669		)
Amounts reclassified from accumulated other comprehensive loss to net income	290			—		290			205			(332		)	(127		)
Net current period other comprehensive loss	(2,492		)	—		(2,492		)	(8,729		)	(67		)	(8,796		)
Balance, end of period	$	(66,735	)	$	—	$	(66,735	)	$	(67,726	)	$	—		$	(67,726	)


(a)	All amounts are net of tax. Amounts in parentheses indicate debits to accumulated other comprehensive loss.



	Amounts Reclassified from Accumulated Other Comprehensive Loss^(a)
Details about Accumulated Other Comprehensive Loss Components	Twenty-Six Weeks Ended June 25, 2017			Twenty-Six Weeks Ended June 26, 2016			Affected Line Item in the Condensed Consolidated Statements of Operations
	(In thousands)
Realized gain on sale of securities	$	—		$	534		Interest income
Amortization of defined benefit pension and other postretirement plan actuarial losses:
Union employees pension plan^(b)(d)	(12		)	(10		)	Cost of sales
Legacy Gold Kist plans^(c)(d)	(142		)	(100		)	Cost of sales
Legacy Gold Kist plans^(c)(d)	(312		)	(220		)	Selling, general and administrative expense
Total before tax	(466		)	204
Tax benefit (expense)	176			(77		)
Total reclassification for the period	$	(290	)	$	127


(a)	Amounts in parentheses represent debits to results of operations.


(b)	The Company sponsors the Pilgrim’s Pride Retirement Plan for Union Employees, a qualified defined benefit pension plan covering certain locations or work groups with collective bargaining agreements.

(c)

The Company sponsors the Pilgrim’s Pride Plan for Legacy Gold Kist Employees, a qualified defined benefit pension plan covering certain eligible U.S. employees who were employed at locations that the Company purchased through its acquisition of Gold Kist in 2007, the Former Gold Kist Inc. Supplemental Executive Retirement Plan, a nonqualified defined benefit retirement plan covering certain former Gold Kist executives, the Former Gold Kist Inc. Directors’ Emeriti Plan, a nonqualified defined benefit retirement plan covering certain former Gold Kist directors, and the Gold Kist Inc. Retiree Life Insurance Plan, a defined benefit postretirement life insurance plan covering certain retired Gold Kist employees.


(d)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost. See “Note 12. Pension and Other Postretirement Benefits” to the Condensed Consolidated Financial Statements.

Share Repurchase Program and Treasury Stock

On July 28, 2015, the Company’s Board of Directors approved a $150.0 million share repurchase authorization. The Company plans to repurchase shares through various means, which may include but are not limited to open market purchases, privately negotiated transactions, the use of derivative instruments and/or accelerated share repurchase programs. The share repurchase program was originally scheduled to expire on July 27, 2016. On February 10, 2016, the Company’s Board of Directors approved an increase of the share repurchase authorization to $300.0 million and an extension of the expiration to February 9, 2017. On February 8, 2017, the Company's Board of Directors further extended the program expiration to August 9, 2017. The extent to which the Company repurchases its shares and the timing of such repurchases will vary and depend upon market conditions and other corporate considerations, as determined by the Company’s management team. The Company reserves the right to limit or terminate the repurchase program at any time without notice. As of June 25, 2017, the Company had repurchased approximately 11.4 million shares under this program with a market value at the time of purchase of approximately $231.8 million. The Company accounted for the shares repurchased using the cost method.

Table of Contents

Restrictions on Dividends

Both the U.S. Credit Facility and the Indenture governing the Senior Notes restrict, but do not prohibit, the Company from declaring dividends.


14.	INCENTIVE COMPENSATION

The Company sponsors a short-term incentive plan that provides the grant of either cash or share-based bonus awards payable upon achievement of specified performance goals (the “STIP”). Full-time, salaried exempt employees of the Company and its affiliates who are selected by the administering committee are eligible to participate in the STIP. The Company has accrued $11.9 million in costs related to the STIP at June 25, 2017 related to cash bonus awards that could potentially be awarded during the remainder of 2017 and 2018. The Company assumed responsibility for the JFC LLC Long-Term Equity Incentive Plan dated January 1, 2014, as amended (the “JFC LTIP”) through its acquisition of GNP on January 6, 2017. The Company has accrued $3.4 million in costs related to the JFC LTIP at June 25, 2017.

The Company also sponsors a performance-based, omnibus long-term incentive plan that provides for the grant of a broad range of long-term equity-based and cash-based awards to the Company’s officers and other employees, members of the Board of Directors and any consultants (the “LTIP”). The equity-based awards that may be granted under the LTIP include “incentive stock options,” within the meaning of the Internal Revenue Code, nonqualified stock options, stock appreciation rights, restricted stock awards and restricted stock units (“RSUs”). At June 25, 2017, we have reserved approximately 4.8 million shares of common stock for future issuance under the LTIP.

The following awards were outstanding during the twenty-six weeks ended June 25, 2017:

Award Type

Benefit

Plan

Awards Granted

Grant

Date

Grant Date Fair Value per Award^(a)

Vesting Condition

Vesting Date

Vesting Date Fair Value per Award^(a)

Estimated Forfeiture Rate

Awards Forfeited to Date

Settlement Method

RSU

LTIP

449,217

02/19/2014

16.70

Service

12/31/2016