Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Lehman High Yield Conference 2007
42 slides from Pilgrim's Pride's conference presentation, Mar 26, 2007
Slide 1: Pilgrim's Pride Corporation – Lehman High Yield Conference
Pilgrim’s Pride Corporation Lehman High Yield Conference March 26, 2007
Slide 2: Cautionary Notes and Forward-Looking Statements
Cautionary Notes and Forward-Looking Statements Statements contained in this presentation that state the intentions, plans, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim's Pride Corporation and its management, including as to the expected benefifs and synergies.
Slide 3: Attendees
Attendees O.B. Goolsby Pilgrim’s Pride Corporation President and CEO Richard Cogdill Pilgrim’s Pride Corporation CFO
Slide 4: Pilgrim's Pride: Company Snapshot
Pilgrim’s Pride: Company Snapshot = Founded in 1946 by Pilgrim family brothers; IPO in 1986 = Largest chicken producer in the U.S. = Second largest chicken producer in Mexico = On apro forma basis (“PF”), PPC sold 9 billion pounds of dressed chicken in FY2006 Recent acquisition of Gold Kist (Decembe
Slide 5: Number One Chicken Company in U.S.
Number One Chicken Company in U.S. U.S. Chicken Industry Leaders Market Share by Production™ Pilgrim's Pride 24.8% Tyson Foods 20.7% Perdue Farms Wayne Farms Sanderson Farms Mountaire Farms Foster Farms Source: WATT Poultry USA, February 2007, (1) Ready-To-Caok million pounds per week
Slide 6: Formidable Protein Industry Player
Formidable Protein Industry Player LTM Revenues 3-Year Average ‘ inmilions) EBITDAS) Chicken Beef Pork ‘Tyson Foods $25,663 $1,065 ¥v v v Smithfield " 798 vo Teds $11,535 § Swift & Co. 39,695 $130 voy Pilgrim's jai ¥ Bide PF $7,332 $689! Hormel voy rosde 35,834 9533 Sanderson ve ¥ Farms Note: LTM re
Slide 7: Gold Kist acquisition expanded Southeast presence
Gold Kist acquisition expanded Southeast presence A Pilarin's Pride's Chicken Processing I Pilgrim's Pride's Turkey Processing © Pilgrim's Pride's Prepared Foods @ Pilgrim's Pride's Distribution Centers Ay Gald Kist Chicken Processing © Gold Kist Distribution Centers @ Gold Kist Prepared Food Plant
Slide 8: $100 Million Net Synergies Identified from GKIS Acquisition
$100 Million Net Synergies Identified from GKIS Acquisition Procurement 26% Overhead 14% Processing 23% Live Operations 11% &
Slide 9: U.S. Industry Overview
U.S. Industry Overview
Slide 10: U.S. Chicken Consumption
U.S. Chicken Consumption 7 cee cage 2. gj), CREE “ = Per Capita Consumption iin Pounds] 8 | Source: March 2007 Ntional Chicken Coun Cold Storage Inventories Source: USDA, Weekly Broiler Slaughtered i) 150% 10.0% 5.0% 6.0%) (10.0%) (15.0%) re Source: e (ory growth) FF CC CS SES SS FP PLL LS LK S oi u
Slide 11: Leading to Improved Pricing Outlook
a ..Leading to Improved Pricing Outlook ne Sits —— ate see $1.20 $1.10 $1.00 WMI J AS OND JFMAMJJASOND JF MO 2008 2006 2007 —#—Boneless Skinless Breast Spot Prices —®— Boneless Skinless Breast 5 Year Rolling Averages —t Boneless Skinless Breast 6 Month Rolling Averages Source: Bloomberg, (1) Month t
Slide 12: Leading to Improved Pricing Outlook Cont.
..Leading to Improved Pricing Outlook Cont. T 1 1 1 $0.40 1 A 1 1 1 $0.30 u iS T x 1 1 1 $0.20 + 1 Wl 1 1 $0.10 ‘D0 01 02 03 04 05 06 MAMJIJASONDJFMAMJJASONOD JF mM 2008 2008 2007 —a—Leg Quarter Spot Prices —e—Leg Quarter 5 Year Rolling Averages, —@ Leg Quarter 6 Month Rolling Averages Source: Bloom
Slide 13: Leading to Improved Pricing Outlook Cont.
cee + 8 ..Leading to Improved Pricing Outlook Cont. WWIII MAMJJASONDJFMAMJJASONODJFM® 2006 2006 2007 4 GA Dock Spot Prices —®-GA Dock5 Year Rolling Averages HL GA Dock 6 Month Rolling Averages Source: UrnerBerry Publications, (1) Month to date thraugh March 19, 2007,
Slide 14: Historical Corn Prices
Historical Corn Prices $450 @ Treas Com Year Aug $2.49 sao0 {Vea $2.36 $3.90 0-Year Avg $2341 Z s350 S300 $2.71 $250 $200 5150 $1.00 1 a2 G3 G4 01 G2 G3 G4 G1 G2 G9 O¢ Gt a2 OS G4 G1 G2 Go G4 G1 G2 G3 a OI G2 a G4car 2000 2004 2002 2003 2008 2005 2006 «(2007 —e—Corn Spot —®7-Year Rolling Average Sou
Slide 15: Advantage
15 Advantage Despite the recent increase incom prices, the chicken industry will benefit from a better feed conversion rate compared to beef and pork companies The chicken industry has the lowest feed conversion rate among the three key protein segments and therefore would be the least impacted by t
Slide 16: Business Overview
Business Overview
Slide 17: Geographic Sales Mix
Geographic Sales Mix Pro forma LTM For the Period Ending 12/30/06* : $7,332.1 million * Pro forma for acquisition of Gold Kist. See Appendix A for reconciliation.
Slide 18: With More Diversified End Markets
..With More Diversified End Markets - Enhances prepared foods and food service opportunities Pilgrim’s Pride Gold Kist Combined? 20% FY 2006 Net Sales: $5.3 bn FY 2006 Net Sales: $2.1 bn FY 2006 Net Sales: $7.4 bn @ Foodservice @Retail @ Export/Other Source: (1) Percentages represent FY2005, WATT Po
Slide 19: Our Prepared Foods Focus
Our Prepared Foods Focus Differentiates Pilgrim’s 2.000 $1:906.3 sie7se $1,094.9 CAGR $1,767.6 1,800- 2000 - 2003 12.0% Re 2000-2006 19.7% 1,400)- 1,200)- 1,000) $818.2 2001 HE HM Foodservice 202 2003 2o04 ER excludes any Prepared Foods items from the Gald Kist acquistion. See Appendix B for reconci
Slide 20: Pilgrim's Has National Coverage Across All Channels
Pilgrim’s Has National Coverage Across All Channels... Broadline National distributors haat iced account QSR otal * 6 Gsysco @ . WAL*MART [aes] Brent eet — 1@ Ahold STOP: SHOR® USDA unites sates department of Agriculture EE: Food and Nutrition Service
Slide 21: Driving Growth thru Innovation
Driving Growth thru Innovation At Pilgrim’s Pride, we understand that delivering innovative ideas to our customers is the key to growth.
Slide 22: A "Natural" Growth Opportunity
A “Natural” Growth Opportunity m= Research indicates that consumers want “natural” chicken = Tremendous opportunity for us to leverage our consumer-trusted brand to meet growing demand for “natural” products = USDA standards strictly define “natural” - Chill pack products are branded as “natural” wi
Slide 23: Awards & Honors
Awards & Honors Wal-Mart Supplier of the Year Brinker Internationah Outstanding Vendor Award ee Supplier Award € , Forbes Bést Managed)Company Fortune Most’Admired Company -#2 Food Production Co/Fifth Consecutive Year ae
Slide 24: Financial Overview
Rick Cogdill Chief Financial Officer Financial Overview
Slide 25: GKIS Financing Transaction Overview
GKIS Financing Transaction Overview - On January 9, 2007, Pilgrim’s Pride (“PPC”) completed the acquisition of Gold Kist (“GKIS”) (for $21 per share) for an aggregate purchase price of $1.1 billion, plus the assumption of GKIS’ debt (the “Transaction”) - As part of the Transaction: @ $128.6 million
Slide 26: Historical Financial Performance
Historical Financial Performance (Sin thousands) Aggregate Combined Results™ Pro Forma Results Fiscal Year Ended ited ttm? 20042 2005, 2006. 2006, 2006 Adjusted EBITDA? Total Adjusted EBITDA? 755,192 9834 329 $176,639 9295 317 $227,621 (1) Pro Forma giving effect to the Gold Kist acquisition 24, 200
Slide 27: Capital Expenditures: Investing Behind Growth & Efficiency
Capital Expenditures: Investing Behind Growth & Efficienc Fiscal Years Ended HE Maintenance/Other Expansion/Efficiency aa (8 in mitions) $221.0 160 $143.9 eeeeey 140 $1126 $116.6 420 —" se $89.9 | $20.4 emmy $79.6 . = a 60 $92.2 40 s67.9 sear S72" $48.0 20 S188 0 2000 = 2001 -2002,»S 2003» 2004 «200
Slide 28: Strong Balance Sheet
Strong Balance Sheet Fiscal Years Ended Million $ $2,400 $2,000 $1,600 $1,224 $1,117 $609 $733] 59 57 2005 2006 1QFYO? $1,200 $800 $400 $0 mAssets Short-Term Liabilities mLong-Term Liabilities mEquity
Slide 29: Total Debt to Total Capitalization
Total Debt to Total Capitalization Fiscal Years Ended 70 62.3 55.4 535 % li | 30.5 2000 ©2001 «= 2002-2003. 2004 = 2005 2006 1QFYOS 1QFYO7 Proforma GOAL < 45%
Slide 30: Liquidity and Capital Resources
Liquidity and Capital Resources - We intend to maintain significant liquidity post Transaction As of December 30, 2006 (8 in miltions) Pro forma for Notes Offering Source of Liquidity Facility Amount_ “Amount Outstanding __Net Availabilty Cash and cash equivalents $- $- $146.5 Investments in availab
Slide 31: Pro Forma Credit Metrics
Pro Forma Credit Metrics Pro Forma Credit Metrics (8 in milions) Pro Forma 12/90/2008 FY04 thru FYO6 Average Adjusted EBITDA? $689 LTM 12/30/2006 Adjusted EBITDA 228 LTM 12/30/2006 Interest Expense® 151 3-Year Average Adjusted EBITDA. Sr, Secured Debt / 3-Year Average Adjusted EBITDA O.ex [Dotal Den
Slide 32: Going Forward...Our Financial Goals Remain Clear
Going Forward...Our Financial Goals Remain Clear We believe our growth opportunities are still outstanding!
Slide 33: Pilgrim's Pride Corporation
Pilgrim’s Pride Corporation Lehman High Yield Conference March 26, 2007
Slide 34: Appendix
Appendix Reconciliation of Non-GAAP Measures and Other Computations
Slide 35: Appendix A - Reconciliation
Appendix A - Reconciliation Other Pro forma Reconciliations LTM Ending 12/30/06” Pro forma in mitions) FYE QEnded QEnded LTM Ending goo = - 121912005 + = 1202006 == 12/30/2006" Net Sales U.S. Net Sales $ 6,916,328 $ 1790741 $ 1,739,585 $$ 6,865,172 Mexico Net Sales 435,751 94,212 126,358 466,897 Tot
Slide 36: Appendix B - Reconciliation
Appendix B - Reconciliation LTM U.S. Chicken Net Sales (6 in rtions) 2q2006 3q2006 4q2006 192007 = LTMEnding Actual Actual Actual Actual" 12/30/06~ U.S Chicken Sales: Prepared Foods Foodservice $ 3815 $ 3999 $ 4087 $ 3825 $ 15636 Retail 726 83.2 79.5 96.0 331.3 Total Prepared Foods $ 441 $4747 4082
Slide 37: Appendix C - Reconciliation
Appendix C - Reconciliation Gold Kist Financial Performance Gold Kist Summary Finan (Bin thousands) Fiseal Year 2004 - 2003 + 2004 Net sales $2,260,728 $516,688 $646,511 $2,390,551 9% Growth ne ne na ne Gross profit 361,338 62,690 92,269 391,012 56 of Net Sates 16.086 12.1% 14.396 16.4% Adjusted EBI
Slide 38: Appendix D - Reconciliation
Appendix D - Reconciliation Combined Summary Financial Information Combined Summary Financial Information (in thousands) Pro Forma LIM OOO FYE @ Ended @ Ended @ Ended goons? . 127312008 + 1200/2008" 42/50/2008 Net Sales PPC $5,235,565 $1,343,812 $1,837,132 $5,228,885 Skis 227.374 545,380, 529,300 24
Slide 39: Appendix E - Reconciliation
Appendix E - Reconciliation Pro forma LTM Ending 12/30/06 Adjusted EBITDA 1 proforma am nmans Fiscal Year | _fiscaivesr [Pro Forma LTH zooatt! 2005 2006 1 2ongtt 1 1 s2nome tT Pilgsim's Pride H i Net income 128.040 ao4.a70 aa2a2 | 112622 | 186.120 Add-Backs i i ihoome Tax Expense (Beneft) 0.198 190.
Slide 40: Appendix F - Reconciliation
Appendix F - Reconciliation GKIS LTM Ending 10/2/04 Adjusted EBITD. 8 in ritions) FYE QEnded Transition L™ 66nd —- ~—9a7m3 + <QEnd 1024 = 10/2104 Net Income 110.894 23.485 34.018 121.427 Add-backs: Income Tax Expense (Benefit) 41817 11.748 18.772 48.843 Net Interest Expense 27.799 7.430 7.879 28.248
Slide 41: Appendix G - Reconciliation
Appendix G - Reconciliation Pro forma LTM Ending 12/30/06 Adjusted EBITDA Gin witions) Pro forma LTM. 1 s201005 9130106 szisoing | _ 121301067") Pilgeim's Pride ! Net Income 25.678 -34.232 2.736 | “166.128 Add-Backs: I Income Tax Expense (Benefit) 10.962 -2.085 -6.764 | -79.658 Net Intereat Expense
Slide 42: Appendix H - Reconciliation
Appendix H - Reconciliation Pro forma LTM 12/30/06 Adjusted EBITDA in mifons) FYE Q Ended QEnded = Pro forma LTM grsomo0s - 12/1/2008 + 12/0/2005 = 12/00/2006" Net Income -112.622 13.218 40,294 166.129 Add-backs: Income Tax Expense (Beneft) -80.822 3.698 -25.038 -79.558 Net Interest Expense 129.935