Slide 1: Mid-4th Quarter 2005 Update
b ORIDE Mid-4'" Quarter 2005 Update September 12, 2005
Slide 2: Forward-looking statements
Staternents contained in this presentation that state the intentions, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim's Pride Corporation and its management , including the fourth quarter of fiscal 2005 eamings guidance, are forward-looking statements. It is impor
Slide 3: Presenters: Chief Operating Officer and Chief Financial Officer
Clint Rivers Chief Operating Officer Rick Cogdill Chief Financial Officer, Secretary and Treasurer
Slide 4: Company Overview
Slide 5: Founded in 1946, second-largest poultry producer in U.S. and Mexico
Founded in 1946 by Pilgrim Family, went public in 1986 2nd-largest poultry producer in the U.S. & Mexico LTM 77205 Sales $5.7 billion EBITDA” $578.5 million FY 2004- Pro forma Sales $5.8 billion EBITDA" $407.2 million Adj. EBITDA” $4745 million NYSE - traded under PPC Market capitalization as of Sep
Slide 6: Market share of U.S. and Mexico poultry producers
2004 April 2005 Company Market Share Company Market Share Tyson Foods, Inc. 23.23% Bachoco S.A. 32.50% Pilgrim's Pride 15.41 Pilgrim's Pride, S.A. 14.20 Gold Kist, Inc 8.85 Provemex Industrias (Tyson) 10.40 Perdue Farms, Inc. 7.36 Grupo Pecuario San Antonia 3.60 Sanderson Farms, Inc. 3.95 Productos
Slide 7: Pilgrim's Pride growth vs U.S. chicken industry
39% 27% 37% z E a @ S 8 2 2 = H @ = i & 2004 1999-2004 1994-2004 Ml U.S. Chicken Industry ME Pilgrim's Pride Source: National Chicken Council
Slide 8: Chicken and turkey processing facilities
merit hnada | \ 2 ainegan Previous: A. Chicken Processing MH Turkey Processing ‘Acquired in November of 2003: A. Chicken Processing
Slide 9: Prepared foods facilities
tent ‘ © mara x Previous: @ Prepared Foods - Chicken Prepared Foods - Turkey ‘Acquired in Noveniber of 2003 @ Prepared Foods - Chicken
Slide 10: U.S. Industry Overview
Slide 11: Recent Events.... Hurricane Katrina
Slide 12: Hurricane Katrina made landfall on the Gulf Coast
On Monday, August 29, 2005, Hurricane Katrina made landfall in the Gulf Coast region, impacting Louisiana, Mississippi and Alabama and spawning tornados that affected Georgia. = Katrina is expected to have an economic impact throughout the U.S. Along with many other industries, the U.S. Poultry indu
Slide 13: Facilities not directly affected; expected short-term benefit
As Pilgrim’s Pride facilities were not directly affected by Hurricane Katrina, over the short term, we expect to benefit from the overall decrease in U.S. chicken production. Our major customers have reported no significant sales decreases as a result of Katrina. The hurricane has in fact resulted i
Slide 14: Supply disruptions expected in coming weeks
= Disruptions in supply are expected in the next few weeks as the number of broilers, breeders, and pullets were all affected by Katrina. — Bird losses are reported (but not confirmed) to be several million with no reliable breakout Gf broilers/breeder/pullet numbers — An unknown number of hatching
Slide 15: No major change in feed ingredient pricing expected
No major change in feed ingredient pricing as a result of Hurricane Katrina is expected. » Grain Export + Export facilities should be operational by the time the new crop is harvested * Aglutof feed ingredients on the U.S. market is not expected * No sustained change in feed ingredient pricing due t
Slide 16: U.S. Energy Prices: Medium Recovery Case
Department of Energy - U.S. Energy Prices: Medium Recovery Case 2004 2005, 2006. tst_[ and [| xa [ath | tet [and | 3rd [ 4th | ast | and | 3rd Diesel*(Giga) 159 1.72 183 210 207 226 253 273 254 245 2.46 581 629 565 6. | 7.14 1003 11.49 10.02 *onchighweyretal "Residential Averane. Analysis of Effects
Slide 17: U.S. Industry Overview - Historical Perspective
Slide 18: U.S. chicken industry data
a) So 23 gs $e ea ag §4 £2 5 Ea oc 5 a 3 ‘Suuaeutien SETSESTRSTSSTIISSIEE SESE SE Source: U.S.D.AJNCC, July 2008
Slide 19: Continued consolidation of U.S. chicken industry
CONTINUED CONSOLIDATION OF U.S. CHICKEN INDUSTRY HAS LED TO MORE RATIONAL BEHAVIOR 69.06% 56.75% y 52 52 54.61% y 3 © 8 g FY = sajueduioD Jo “oy 1e}01 40 g doy sajueduoy Jo oN 1e}01 40 g doy 5 2 <F 9 $ 3 s 3. > e
Slide 20: Per capita chicken consumption growth
Convenient praducts _ Health benefits Economic advantage F = a EE. og 28 3 oe F zs ; g a E 1980 1983 1986 1989 1992 1995 1998 2001 ‘Does not include effects of Hurricane Katrina) 2004 Chicken — Turkey —— Pork — Beef. Source: August 26, 2005 National Chicken Council 20076 GAGR 42.4%
Slide 21: U.S. meat production and exports
[Does not include effects of Hurricane Katrina (rilian bs.) % % % 2003 Change 2004 Change 2005P Change 2006P Change Beef 28234 3% «= 24d 8% = 24805) 1% «= 25 BA 8% Pork 19945 1% 20509 3% 20738 1% 21281 2% Total Red Meat 45179 -1% «© 45053 -2% «= 4B B43 1% «© AB BIS 8% Chicken 32749 2% «= 34083 4% =
Slide 22: Source: USDA chart
Source: USDA
Slide 23: Source: USDA chart
Source: USDA
Slide 24: Exports complement U.S. business
OR Complements U.S. business _ Provides strong market for dark meat _ Assists in stabilizing market pricing 15.2 — 15.4% % of U.S. Chicken Exporte —_ PIEPF PIII SE EEE SE Does not include the effects of Muieane Katina 24 Souroe: August 26, 2005 Altona! Chicken Council
Slide 25: Duties on chicken leg quarter imports into Mexico decreasing
DUTIES ON CHICKEN LEG QUARTER IMPORTS INTO MEXICO DECREASING Tariffs on chicken leg quarters imported into Mexico will decrease to 0% by 2008 = Gn July 23, 2003 the United States and the Mexican Government signed a definitive bilateral safeguard agreement, providing for a 5 year transition of import
Slide 26: U.S. Industry Outlook
Slide 27: U.S. Industry Outlook
Slide 28: Pricing environment and export market
Pricing environment during (vs. prior year periods) : duly August 2005 October 2004 - August 2005. 452.08% to $0.45 fb. 48.93% to §0.364b. -25.8% to $0.77 -8.59% to $0.96. -31.A7% to $1.41 Ab. -25.31% to $1.44. “7.14% to $0.75/lb 40.93% to $0.74 Mb, * Dark Meat = Wings * Breast Meat * GA Dock > > >
Slide 29: Broiler cold storage inventories
J 2001 Source: USDA
Slide 30: U.S. Business Overview
Slide 31: Grain market
+ Grain Market FY2005 Actuals: 3" Qtr FYOS 3! Qtr YTD FYOS Near-by Futures Near-by Futures vs, Prior Year YTD — Corn* -25.4% to $2.28!bushel -20.4% to $2.21 Ibushel — Soybean Meal* -30.7% to $207.90iton -30.1% to $184.62iton 2005-2006 Crop Year 2005-2006 Crop Year USDA Outlook 919105 Futures (CBOT)
Slide 32: U.S. Sales Overview
Slide 33: Prepared foods focus
OUR PREPARED FCO FOCUS naw Siamso $1,906.53 $226.5 2001 LTH MMM Foodservice NNN Retail Proforma 712/05
Slide 34: Sales volume (MM of lbs)
(MM of Ibs) 760 700 650 600 550 500 450 400 350 300 260 200 150 5. 3. 1a.1)) i3t4 100 = 50 2008 LM Proforma 772105 IgF/other
Slide 35: Pilgrim's has national coverage across all channels
Slide 36: Pilgrim's has national coverage across all channels
PILGRIM’S HAS NATIONAL COVERAGE ACROSS ALL CHANNELS...
Slide 37: Clear #2 in the industry
Clear #2 in the industry Leading supplier of quick-service restaurants TOWING Growing presence in food service distribution Great position in retail + One of only two companies able to serve the largest customers
Slide 38: Financial Overview
Slide 39: ConAgra released from lock-up
Released ConAgra from lock-up expiring December 2005 and December 2006. — Overhang appeared to have a “capping” effect to stock price — ConAgra widely perceived to be a seller as soon as lock-ups were to expire — Opportunity to capture “option value" for our shareholders Effect of Sale — We controll
Slide 40: Stock price and trading volume history
40 35 30 25 4 20 une 8, 2003 CAG Chicken Division ‘Acquistion Announced ‘August 21, 2008 Combination of Class A and Class & Common Stack Annaunced ae hs ‘ | 15 10 hoings Sales: 0 Milion Shares 4 Milion Shares November 24, 2003 ConAgra Chicken Division Acquistion & Stock Combination Completed 5 o- s
Slide 41: Earnings estimate: fourth quarter guidance
Eamings Estimate (00's) Current Guidance. Adjusted 4th Quarter 4th Quarter 2005 2004~ Sales $1,385,000 to $1,425,000 § 1,486,454 Cogs 86% - 87% of Sales 4,319,609 SG&A 6.4% ~ 5.7% of Sales 46,704 Operating Income 7.2% = 8.0% of Sales 420,244 Other Expenses (Income) Interest expense (net) 800 per wee
Slide 42: Compounded annual growth rates in sales and equity
7000 6000 5000 4000 & 3000 2000 1000 Compounded Annual Growth Rates Historical Pro forma © Thru FY2003 Thru FY2004 Sales 14.4% 17.3% 17.7% Equity 19.0% 21.9% SLESLEEPLESLESPESPPESS SSS "BF ee rs © Compound annual growth rates mere computed from 1981 actuals thru Fiscal Year 2004 Pro forma balances W
Slide 43: Pro forma operating results
Proforrs Operating Remix Sales: (Chicken ard Other Products: United States Mesica Sub Total Turkey Total Grovth Operating Income (Loss) ‘Chicken and Other Products United States Mexico Sub Total Turkey - Normal Turkey -Resructuing Charge Sub Total Margin % Turkey Restructuring & Other Nor-recurring
Slide 44: Fiscal years ended
Fiscal Years Ended 17.5 15.5 13.5 11.5 9.5 75 5.5 3.5 1.5 1998 «= 1998 «= 2000S 2001» 2002S 2003» 2004 SQ YTD 3Q YTD FYo4 —- FYOS -S-Adual —S-3Q7D Actual
Slide 45: Fiscal year comparison
200s mod 3a. YTo saYTD 3a YTD ProfarmaProferma FYd Fd FYDS Proforma
Slide 46: Earnings per share by fiscal year
Fiscal Years Ended $2.50 $2.00 $1.58 $1.50 E $1.21 ; { 1.01 $1.00 $0.86 $0.50 : ; | | $0.00 5 199 19992000 2001 2002 20022004 zoos 2008 yo yToyro Proform:?rofams Tens 7e04 7205 Proform fm ctual EB rotor MN Fro forma Adjusted (1) 10980 2004 Proforma Agjucted CAGR (@) EFSisadustedto axle heeft ofthe r
Slide 47: EBITDA by fiscal year
Fiscal Years Ended 9215.0 §204.7 $1424 $140.2 wg s108.3 ] 115.4 li 1998 1999-2000 2001-2002 2003 2004 [RR Fy Actual MI Proformam! MINN Froforma Adjusted? ENN Adjustedm See slide 51forrecomiiations of FY 1008 thr FY2000, See lide 64forrecoriaon for FY2004andthe LTM periods ended 7004 and 72/2006, See
Slide 48: Capital expenditures
Fiscal Years Ended Maintenanee‘Other MN. Expansion go $109.8 100 80 60 40 1998 ©1389 -2000«S2001 2002 = 2003 «2008 =S 2004 SLT Proforma 72205 = The Company projects FY 2005 capital expenditures of approximately §130- 145 milion
Slide 49: Fiscal years ended
20032004 SQFYD4 _3QFYOS Fiscal Years Ended
Slide 50: Leverage and coverage ratios
FYE2004 9-MoFY04 9-Mo FYOS EBITDA? Interest Expense 7.15%. §.28x 12.42x Total Debt ! EBITDA (*) 1.46x 230x 092x Net Debt / EBITDA [(*) 1.36x 2.16x 0.40x Total Debt! Total Capital 37.1% 41.4% 32.3% Net Debt / Total Capital 35.4% 39.8% 7.3% Net Worth (millions) $823.0 $o49.9 $1,110.6 Book ValuelGCommo
Slide 51: Reconciliation of Non-GAAP Measures and Other Computations
Slide 52: EBITDA reconciliation FY1998-FY2003
(in milions, except per share figures) Fiscal Years Ended Fy1998 FY 1999 Fy2000 Fy7001 Fyz002__ _FY2003 EBITDA Reconciliation Net Income § s0o10 65,253, 52,344 41137 § 14335 § 56036 Ad Income Tax Expense (benefit) 6512 25,051 10,442 20724 (12,425) 7499 Interest expense, net 20148, 17,886 17,778 3078
Slide 53: EBITDA reconciliation pro forma
Ginmilions, exceptper share figures) EBITDA Reconciliation Net Income Add, Income Tax Expense (benefit) Interest expense, net Depreciation and amortization Minus: Amortization of capitalized financing casts EBITDA- as reported Fiscal Year Ended Nine Months Ended Proforma Fy2003 Proforma Fyzo04 Profo
Slide 54: Non-recurring items by period
FYTD July 2.2008 (ralions) Litigation Proceeds Turkey Restructuring asset sales Total FYTD July 3, 204 (rations) Recall EMects (estimate) Vitarin Turkey Restructuring Other Charges - Turkey Total FY 2008 (railions) Recall EMects (estimate) Vitarnin Turkey Restructing Turkey Recall insurance Other Ch
Slide 55: EBITDA reconciliation FY2003, FY2004 and LTM periods
EBITD AReconeilistion of FY2003,FY2004 andl TM Periods EBITDA Proforma Fy2003 Net Income $ 34731 Ak Income TaxEmense (6.983) Interest exense net 70813 Depreciationand amortization 118854 Minus: 8 Proforma Fyz004) 142,798 a90s4 56,500, 120,833 4.951 8 F -¥2008 128,340 80,195 52123 113,788 4.951 ure E
Slide 56: Pro forma adjusted income statement
Praforma F¥2004 Proforma F¥2003 {0012} AcRepored Adjustments! _AsAdhisied As Reporled Adjustment=t _ As Adjusted Net Soles o Sams § 9 Sp2uIs § aessg 9 4p88.356 Costs and Expenses: Costat sales 6,201,234 (2000) sas1294 4728098 (72300) 485,798 Norvreourring recoveries (23,6831 23883 {6.4731 48473 Sall
Slide 57: Quarterly EBITDA reconciliation
NetIncome Add: Income Tax Expense (benefit) Interest exnense, net Depreciation and amortization Minus’ Amortization of capitalized financing casts EBITDA Adjustments: Turkey Restructuring Other Restructuring Turkey Recall Effects Vitarnin, Methionine and other litigation Settlements Avian Influenza
Slide 58: Quarterly EBITDA reconciliation LTM
Quarters Ended TM Ending 7onzOs 01015 040205070205 70205 NetIncome $75200 §48809 $56309 §85352 § 265640 Add: Income Tax Expense (benefit) 46.016 31.400 34.204 38.324 449988 Interest exnense, net 11471 12224 9318 12.322 45.335 Depreciation and amortization 25 BBB 30065 33777 30.421 119981 Minus: Amor
Slide 59: Earnings estimate 4th quarter 2004 adjustments
Earnings Estimate (000's) Sales cogs Cogs-Restructuring Non-Recurring Recoveries saa Operating Income Other Expenses (Income) Interest expense (net) Foreign exchange loss (gain) Miscellaneous, net Income hefare Income Taxes Income Tax Net Income Net income per Common Share 4th Quarter 2004 az Report
Slide 60: Pilgrim's Pride Corporation