As filed with the Securities and Exchange Commission on July 22, 2009

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

under

The Securities Act of 1933

JBS USA Holdings, Inc.

(Exact name of Registrant as specified in its charter)

Delaware

2011

20-1413756

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

JBS USA Holdings, Inc.

1770 Promontory Circle

Greeley, Colorado 80634

(970) 506-8000

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

André Nogueira de Souza

Chief Financial Officer

JBS USA Holdings, Inc.

1770 Promontory Circle

Greeley, Colorado 80634

(970) 506-8000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Donald E. Baker

John R. Vetterli

White & Case LLP

1155 Avenue of the Americas

New York, New York 10036

(212) 819-8200

Arthur D. Robinson

John C. Ericson

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

(212) 455-7086

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ¨.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

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. (Check one):



Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer x	Smaller reporting company ¨

(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE



Title of each class of securities to be registered	Proposed maximum aggregate offering price(1)	Amount of registration fee
Common stock, par value $0.01 per share	$2,000,000,000	$111,600

(1)

Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933. Includes amounts attributable to shares of common stock that may be purchased by the underwriters to cover over-allotments, if any. See “Underwriting.”

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion, dated , 2009

Prospectus

shares

LOGO

JBS USA HOLDINGS, INC.

Common stock

This is the global initial public offering of our common stock, which consists of an international offering in the United States and other countries outside Brazil and a concurrent offering in the form of Brazilian depositary receipts, or “BDRs,” in Brazil. Each BDR represents shares of our common stock. Of the shares of common stock to be sold in the offering, we are selling shares and JBS Hungary Holdings Kft., or the selling stockholder, is selling shares. We will not receive any of the proceeds from the shares of common stock being sold by the selling stockholder. We expect the initial public offering price to be between $ and $ per share.

The international offering is being underwritten by the international underwriters named in this prospectus. The Brazilian offering is being underwritten by a syndicate of Brazilian underwriters. The closing of the Brazilian offering will be conditioned upon the closing of the international offering.

Prior to the global offering, there has been no public market for our common stock. We expect to apply for listing of our common stock on The New York Stock Exchange under the symbol “JBS.” We also expect to apply to list the BDRs on the São Paulo Stock Exchange under the symbol “ .”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.


	Per share	Total

Initial public offering price	$	$

Underwriting discount	$	$

Proceeds to JBS USA Holdings, Inc., before expenses	$	$

Proceeds to the selling stockholder, before expenses	$	$

We have granted the international underwriters an option for a period of 30 days to purchase from us up to additional shares of our common stock to cover over-allotments, if any, in connection with the international offering.

Investing in our common stock involves a high degree of risk. See “Risk factors” beginning on page 20 to read about certain factors you should consider before buying shares of our common stock.

The underwriters expect to deliver the shares on or about , 2009.



J.P.Morgan		BofA Merrill Lynch

, 2009

Table of contents


Prospectus summary		1

The offering		12

Summary historical and pro forma financial data		15

Risk factors		20

Special note regarding forward-looking statements and industry data		36

Basis of presentation		38

Use of proceeds		39

Dividend policy		40

Capitalization		41

Dilution		43

Selected historical consolidated financial data		45

Unaudited pro forma combined financial statements		49

Management’s discussion and analysis of financial condition and results of operations		55


Business		95

Management		119

Compensation discussion and analysis		125

Certain relationships and related party transactions		135

Principal and selling stockholder		139

Description of capital stock		143

Shares eligible for future sale		148

Certain material United States federal income and estate tax considerations for non-U.S. holders		151

Underwriting		154

Legal matters		161

Experts		161

Where you can find more information		162

Index to consolidated financial statements		F-1

You should rely only on the information contained in this prospectus or in any free writing prospectus prepared by or on behalf of us and delivered or made available to you. Neither we nor the selling stockholder have authorized anyone to provide you with information different from that contained in this prospectus. We and the selling stockholder are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

No action is being taken in any jurisdiction outside the United States to permit a public offering of our common stock or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in a jurisdiction outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to that jurisdiction.

Until , 2009, all dealers that buy, sell or trade in our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotment or subscriptions.

Prospectus summary

The following summary highlights information contained elsewhere in this prospectus. Before deciding whether to buy shares of our common stock, you should read this summary and the more detailed information in this prospectus, including our consolidated financial statements and related notes and the discussion of the risks of investing in our common stock in the section entitled “Risk factors.” Except as the context otherwise requires, references in this prospectus to JBS USA Holdings, Inc. and the terms “we,” “us” and “our” refer to JBS USA Holdings, Inc. and its subsidiaries. When we present financial data “on a pro forma basis,” it means that the financial data as of and for the fiscal year ended December 28, 2008 and as of and for the fiscal quarter ended March 30, 2008 reflects our acquisition of Smithfield Beef Group, Inc. (which we subsequently renamed JBS Packerland, Inc., or JBS Packerland), which included the acquisition of 100% of Five Rivers Ranch Cattle Feeding LLC, or Five Rivers, as if it had occurred at the beginning of the period presented as further discussed under “Unaudited pro forma combined financial information.”

JBS USA Holdings, Inc.

We process, prepare, package and deliver fresh, processed and value-added beef and pork products for sale to customers in over 60 countries on six continents. Our operations consist of supplying fresh meat products, processed meat products and value-added meat products. Fresh meat products include refrigerated beef and pork processed to standard industry specifications and sold primarily in boxed form. Our processed meat offerings, which include beef and pork products, are cut, ground and packaged in a customized manner for specific orders. Additionally, we process lamb and mutton products. Our value-added products include moisture-enhanced, seasoned, marinated and consumer-ready products. We also provide services to our customers designed to help them develop more comprehensive and profitable sales programs. Our customers are in the food service, international, further processor and retail distribution channels. We also produce and sell by-products that are derived from our meat processing operations, such as hides and variety meats, to customers in the clothing, pet food and automotive industries, among others.

We are a wholly owned indirect subsidiary of JBS S.A., the world’s largest beef producer, which has a daily slaughtering capacity of 73,940 head of cattle. In the fiscal quarter ended March 29, 2009, we represented approximately 78% of JBS S.A.’s gross revenues. Over the past few years, JBS S.A. has acquired several U.S. and Australian beef and pork processing companies and slaughterhouses, which now comprise JBS USA Holdings, Inc. and its subsidiaries:

•

on July 11, 2007, JBS S.A. acquired Swift Foods Company (our predecessor company, which was subsequently renamed JBS USA Holdings, Inc.), which we refer to as the Swift Acquisition;

•

on May 2, 2008, we acquired substantially all of the assets of the Tasman Group Services, Pty. Ltd., or the Tasman Group, which we refer to as the Tasman Acquisition; and

•

on October 23, 2008, we acquired Smithfield Beef Group, Inc. (which we subsequently renamed JBS Packerland), which included the 100% acquisition of Five Rivers. We refer to this transaction as the JBS Packerland Acquisition.

In the United States, we conduct our operations through eight beef processing facilities, three pork processing facilities, one lamb processing facility, one case-ready beef and pork facility, one hide tannery, seven leased regional distribution centers, two grease-producing facilities, and 11 feedlots operated by Five Rivers, which supply approximately 30% of our fed cattle needs. In Australia, we operate ten beef and small animals processing facilities, including the largest and what we believe is the most technologically advanced facility in the country, and five feedlots which supply approximately 18% of our fed cattle needs. Our small animals processing facilities in Australia process hogs, lamb and sheep, or smalls. Our Australian facilities are strategically located to access raw materials in a cost effective manner and to service our global customer base. We have the capacity to process approximately 28,600 cattle, 48,500 hogs and 4,500 lambs daily in the United States and 8,690 cattle and 15,000 smalls daily in Australia based on our facilities’ existing configurations.

Our business operations are organized into two segments:

•

our Beef segment, through which we conduct our domestic beef processing business, including the beef operations we acquired in the JBS Packerland Acquisition, and our international beef, lamb and sheep processing businesses that we acquired in the Tasman Acquisition; and

•

our Pork segment, through which we conduct our domestic pork and lamb processing business.

We had consolidated net sales of $15.4 billion on a pro forma basis in the fiscal year ended December 28, 2008, and we had consolidated net sales of $3.2 billion in the fiscal quarter ended March 29, 2009. In the same periods, we had gross profit of $608.0 million on a pro forma basis and $73.0 million, respectively, and Adjusted EBITDA of $531.8 million on a pro forma basis and $66.1 million, respectively. Our net income for the fiscal year ended December 28, 2008 was $192.1 million on a pro forma basis and $2.3 million for the fiscal quarter ended March 29, 2009. Our Beef and Pork segments represented 84% and 16%, respectively, of our net sales on a pro forma basis during the fiscal year ended December 28, 2008, and 84% and 16%, respectively, of our net sales during the fiscal quarter ended March 29, 2009.

Industry overview

Beef

United States

Beef products are second to chicken as the largest source of meat protein in the United States. The United States has the largest grain-fed cattle industry in the world and is the world’s largest producer of beef, which is primarily high-quality grain-fed beef for domestic and export use. The domestic beef industry is characterized by daily price changes based on seasonal consumption patterns and overall supply and demand for beef and other proteins in the United States and abroad. Cattle prices vary over time and are impacted by inventory levels, the production cycle, weather and feed prices, among other factors.

Beef processors include vertically integrated companies, who own and raise cattle on feed for use in their processing facilities, and pure processors, who do not own cattle on feed. Vertically integrated beef processors can be subjected to significant working capital demands, since cattle typically feed in the yards for 90-180 days without any revenue generation until processed. Additionally, as cattle on feed consume feed with a replacement price that is subject to market changes, vertically integrated beef processors have direct financial exposure to the volatility in corn and other feedstock prices. Pure U.S. beef processors generally purchase cattle in the spot market or pursuant to market-priced supply arrangements from feedlot operators, process the cattle in their own facilities and sell the beef at spot prices. Cattle are usually purchased at market prices and held for less than a day before processing, thus such processors are not exposed to changing market prices over as great a time span as vertically integrated beef processors. Pure beef processors are primarily “spread” operators, and their operating profit is largely determined by plant operating efficiency rather than by fluctuations in prices of cattle and beef.

During the past few decades, consumer demand for beef products in the United States has been in line with population growth, which is the primary driver of aggregate demand. Export demand has fluctuated widely due to the closing of certain international markets following the discovery of isolated cases of bovine spongiform encephalopathy, or BSE (also commonly referred to as mad cow disease), in 2003 and 2004, and the sporadic re-opening of such markets. We believe that consumer demand for U.S. exports in developing countries is driven by population growth compounded by economic growth. As consumers’ economic circumstances improve, they increasingly shift their diets to protein. Industry-wide export sales have been ramping up from 2004 through mid-2009, trending toward pre-2003 levels.

Between 2006 and January 2008, our largest U.S. beef competitor eliminated two million head per year of slaughter capacity in four plants. This represented a reduction of nearly 7% of total U.S. industry-wide capacity and has helped improve the supply/demand balance of beef in the U.S. and export markets.

Australia

Australia has traditionally been a supplier of grass-fed beef. Grass is a much cheaper feed source than grain. With the vast amount of land in Australia available for cattle raising and feeding, grass is the predominant feeding method. Australia also has a grain-fed beef cattle sector which primarily supplies processed cattle for export to Japan and South Korea and to the domestic market. Grain-fed cattle accounted for 27% of the adult cattle slaughter in 2008, representing 34% of total beef production in Australia. The majority of cattle slaughtered in Australia are range or grass-fed and not finished in the feedlots. Australia has been one of the leading beef export countries for more than a decade. We believe that approximately 75% of exports have historically been sold to the United States, Japan and South Korea, but Australian beef has been increasingly exported to Russia, Taiwan, Mexico, Chile and the United Arab Emirates, among other countries. Although Australian meat packers, including our Australian operations, benefited from the closure of many markets to North American beef as a result of BSE detections in North American cattle, Australian exports have remained strong following the reopening of international markets to North American beef.

Global exports

We sell our products in over 60 countries on six continents, and exports accounted for approximately 24% of our sales in 2008 on a pro forma basis and 21% of our sales for the fiscal quarter ended March 29, 2009. The international beef market is divided into two blocks based on factors that include common sanitary criteria, such as restrictions on imports of fresh beef from countries that permit foot-and-mouth disease, or FMD, vaccination programs or beef treated with growth hormones.

The United States has been an FMD-free country since the eradication of the disease, and it does not implement vaccination programs. However, the United States treats most of their cattle with growth hormones, and, accordingly, the European Union and several other countries have banned imports of beef treated with growth hormones from the United States.

In contrast, Brazil and Argentina have prohibited the use of growth hormones on their cattle. JBS S.A. is a large exporter of beef to the European Union.

We believe that our U.S. export operations of fresh beef today do not directly compete with our parent company’s Brazilian and Argentine export operations of fresh beef in our main export destinations. Consequently, we do not have formal arrangements with JBS S.A. to coordinate our exports in our export markets. However, to the extent that sanitary restrictions change in the future, we could become direct competitors of our parent company in certain export markets.

We do compete with JBS S.A. to a limited degree, however, for example, to the extent that our Australian operations export to the European Union, the Middle East and Southeast Asia, which are also export markets for JBS S.A. We do not believe our Australian business’ competition with JBS S.A. in these markets has a material adverse effect on our current business.

Pork

Pork products are the most widely consumed meat in the world. Pork is the third largest source of meat protein in the United States, behind chicken and beef. The United States, which is widely regarded as a world leader in food safety standards, is the third largest producer worldwide, behind China and the European Union, and one of the largest exporters of pork products.

The domestic pork industry is characterized by daily price changes based on seasonal consumption patterns and overall supply/demand for pork and other meats in the United States and abroad. Generally, domestic and worldwide consumer demand for pork products drive pork processors’ long-term demand for hogs. To operate profitably, hog processors seek to acquire or raise hogs at the lowest possible costs and minimize processing costs by maximizing plant operating rates. Hog prices vary over time and are impacted by inventory levels, the production cycle, weather and feed prices, among other factors.

the volatility in corn and other feedstock prices. Pure processors generally purchase finished hogs under long-term supply contracts at prevailing market prices, process the hogs in their own facilities and sell the finished products at spot prices. Finished hogs are typically purchased at market prices and held for less than one day before processing, thus pure processors are not exposed to changing market prices over as great a time span as vertically integrated processors. Pure pork processors are primarily “spread” operators, and their operating profit is largely determined by plant operating efficiency and not by fluctuations in prices of hogs and pork.

While affected by seasonal consumption patterns, demand for pork has remained consistently strong. During the past few decades, population growth has been the primary driver of increased aggregate pork product demand in the United States. We believe that consumer demand for U.S. exports in developing countries is driven by population growth compounded by economic growth: as consumers’ economic circumstances improve, they increasingly shift their diets to protein. To satisfy the growing global demand, U.S. pork exports have more than tripled in the past decade. The top three leading export markets for U.S. pork and pork variety meats are Japan, Mexico and Canada.

Competitive strengths

We are well positioned as a leading meat processor in the U.S. and Australia. We have implemented significant operational improvements over the last several years, resulting in increases in throughput, additional value-added products, improved food safety and industry-leading worker safety. Our competitive strengths include:

Scale and leading market positions in beef and pork industries

As a standalone company we would be the largest beef processor in the world. In terms of daily slaughtering capacity, we are among the leading beef and pork processors in the United States and we have been the number one processor of beef in Australia for the past 15 years. With a slaughtering capacity of 37,290 heads per day in beef, 48,500 heads per day in hogs and over 19,500 heads per day in smalls, our scale provides us with operational flexibility to:

•

source our products based on the most favorable conditions of input costs,

•

diversify our operations to minimize sanitary risk, and

•

attain proximity to our raw materials and end customers given our geographical reach, saving freight and storage costs.

During the past few decades, consumer demand for beef and pork products in the United States has been increasing primarily as a result of population growth. Global protein demand has remained strong due to continued population growth and economic growth in developing countries. Despite the current economic recession, we believe protein demand will continue to increase in the long-term in conjunction with rising living standards and a growing middle class in developing countries. As part of JBS S.A., the world’s leading beef producer, and given the industry’s significant barriers to entry, we believe we are well-positioned to serve this growing global demand.

Diversified business model with international reach

Our business is well diversified across proteins and all major distribution channels, as well as geographically with respect to production and distribution.

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Diversified protein offerings: We sell beef, pork and lamb products. Selling multiple proteins offers us the opportunity to cross-sell to our customers and to diversify typical industry risks such as industry cycles, the impact of species-based diseases and changes in consumer protein preferences. As a result of our multiple proteins, our businesses, when taken as a whole, are less likely to be severely impacted by issues affecting any one protein. Additionally, our JBS Packerland beef processing facilities are engineered to provide us with the flexibility to process a variety of cattle, which allows further diversification of our beef product offerings. For example, our JBS Packerland facilities are engineered to process both cattle raised for beef production and cattle bred for dairy production. This flexibility enables us to shift our operations on a daily basis between beef and dairy cattle depending on market availability, seasonal demand and relative margin attractiveness, setting us apart from many beef processing facilities in the United States.

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Sales and distribution channel diversification: We benefit from our diversified sales and distribution channels, which include national and regional retailers (including supermarket chains, independent grocers, club stores and wholesale distributors), further processors (including those that make bacon, sausage and deli and luncheon meats), international markets and the food service industry (including food service distributors, which service restaurant and hotel chains and other institutional customers). We sell our products to over 6,000 customers worldwide with no customer accounting for more than 4.5% of our net sales. This reduces our dependence on any market or customer and provides multiple channels for potential growth. In the retail segment, we further benefit from a variety of widely recognized brands, including Swift, Swift Premium, Swift Angus Select, Swift Premium Black Angus, Miller Blue Ribbon Beef and G.F. Swift 1855 among others. We also manufacture products for some of our main customers’ private label brands.

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Geographic diversification: We sell our products in over 60 countries on six continents. During fiscal 2008, on a pro forma basis, and the fiscal quarter ended March 29, 2009, we had international sales of $3.8 billion and $0.7 billion, respectively. Overall, exports accounted for approximately 24% of our sales in 2008 on a pro forma basis and 21% of our sales for the fiscal quarter ended March 29, 2009. Exports are an important part of our strategy and a competitive advantage. In fiscal 2008, we supplied Japan and South Korea with 36% and 47% of their total beef imports, respectively, according to Meat & Livestock Australia Limited. We believe we were the largest supplier of beef imported into Japan and South Korea in 2008. Our imports of beef to the United States from Australia totaled 32% of total Australian beef imports to the United States during fiscal 2008. Our geographic diversification enables us to reduce exposure to any one market and concurrently have access to all export markets. Additionally, having access to international markets allows us to potentially generate higher returns as many of our export products, such as tongue, heart, kidney and other variety meats, garner higher demand and pricing in foreign markets, particularly in Asia.

Our processing platforms in the United States and Australia, which are two major beef producing countries, provide us with enough geographic diversification and operating flexibility to satisfy

demand depending on market conditions and sanitary restrictions. For example, our facilities in Dinmore, Beef City, Brooklyn and Longford, Australia accommodate non-hormone-treated fed cattle allowing us to market our products to the European Union (which prohibits imports of hormone-treated products). Accordingly, each of these facilities is eligible to ship to the European Union. We also benefit from greater international market access through our Worthington pork plant, which is one of only three facilities in the United States certified for export to the European Union. Additionally, our JBS Packerland facilities are located near major metropolitan areas, resulting in lower freight costs relative to cattle processing facilities in more rural locations.

While the closure of foreign markets to U.S. beef in 2003 negatively impacted the U.S. beef industry, our Australian beef operation retained access to those markets and benefited from reduced competition. Furthermore, we have a U.S. sales office which annually sources over $160 million of meat products from our Australian facilities into the U.S. market—products that provide U.S. customers, particularly in the food service and further processing channels, with a source of lean protein.

World class operations

We believe our operations are among the most efficient in the industry. We operate three of the six highest-throughput beef facilities in the United States. Furthermore, we continuously focus on improving our operating efficiencies. We have developed a program to improve the coordination of our planning, forecasting, scheduling, procurement and manufacturing functions to drive performance in the supply chain. Our efforts in 2008 were focused on increasing beef yields, reducing operational costs and lowering overhead. One of the key initiatives in delivering on this strategy was returning our Greeley, Colorado processing facility to its originally designed capacity as a two-shift operation. Producing more volume in the same length of time reduces our cost per pound. As a measure of our progress, excluding the JBS Packerland Acquisition and the Tasman Acquisition, during the fiscal year ended December 28, 2008, our Beef and Pork segments demonstrated an 8.5% and 3.8% increase in throughput, respectively, compared to the fiscal year ended December 30, 2007. As a result, we remain focused on leveraging our fixed cost base to improve our operating margins.

Strong balance sheet and limited derivative exposure relative to our peers

We have lower leverage than certain of our competitors. Moreover, since we are not vertically integrated in our U.S. operations, we are not significantly exposed to commodity hedging losses. We believe that our business and capital structure provides us with flexibility to respond to market conditions and to capitalize on business opportunities, particularly in the current credit-constrained environment.

Established customer relationships

with our customers, who we believe view us as a long-term strategic partner and consider us an extended part of their operations. We believe that the high-quality long-standing relationships we have developed provide us with revenue stability and forecasting transparency.

Proven management team and high performance work force

We have a proven senior management team whose experience in the protein industry has spanned numerous market cycles. Since the Swift Acquisition, we have simplified our management structure through headcount reduction and streamlined decision-making processes, effectively empowering our employees. We also benefit from management ideas, best practices, and talent shared with the seasoned management team at our parent company, who has over 50 years of experience operating beef processing facilities in Brazil. Members of JBS S.A.’s South American management team have been appointed to management positions in our United States and Australian operations. In addition, members of our Australian management team have been appointed to management positions in the United States, and vice-versa. Moreover, our management and that of our parent company have significant experience in acquiring and successfully integrating operations as evidenced by the more than 30 acquisitions made by JBS S.A. in the last 15 years, and more recently the integration of the JBS Packerland Acquisition and the Tasman Acquisition by us.

Our strategy

Prior to 2002, our predecessor was owned and operated by a multinational food company. From 2002 to 2007, our predecessor was owned by a private equity company. Since the Swift Acquisition in July 2007, we have significantly changed our business strategy. Our current strategy is to continue to grow our business’ revenues and profitability through the following strategic initiatives:

Continuously improve profitability through process optimization

We continue to focus on enhancing our production yields and operational abilities and improving our information technology systems, with a view toward reducing our operating costs and improving throughput yields. Our initiatives in 2008 geared towards cost reductions led to approximately $90 million in cost savings as compared to the fiscal year ended December 30, 2007. These cost reductions included renegotiating vendor contracts, insourcing of contract services previously outsourced and plant cost initiatives. We expect to further improve our operating performance by adopting best practices and leveraging additional operating expertise that we have access to as a member of the JBS S.A. group. Separately, we have been able to reduce operating costs by, among other measures, eliminating our reliance on third-party consultants and performing certain services in-house that were formerly outsourced at a premium. We have decreased our selling, general and administrative expenses by eliminating multiple layers of management positions and by requiring our service providers to participate in competitive bidding processes. As a measure of this progress, we have reduced annual selling, general and administrative expenses by over $24.5 million, or 20.7%, for the fiscal year ended December 28, 2008, and in 2008 ranked as having the lowest ratio of selling, general and administrative expense to net sales among publicly traded protein companies in the United States. In addition to contract renegotiations and management efficiencies, operating efficiencies

have led to annual incremental cost savings and margin improvements of approximately $115 million for the fiscal year ended December 28, 2008. These operating efficiencies include adding a second shift at our Greeley plant, our yield improvement projects, including introduction of a pork casing sorting system (a margin enhancement strategy brought to the United States by JBS S.A.) in all of our U.S. pork plants, improved deboning training and cutting techniques on the fabrication floor and increased value-added production.

Continue to successfully integrate recent acquisitions and selectively pursue additional value-enhancing growth opportunities

We have a proven track record of successfully acquiring and integrating companies, resulting in production and operating synergies. In 2008, we increased production through the Tasman Acquisition and the JBS Packerland Acquisition. These acquisitions have increased our daily cattle processing capacity from approximately 26,500 to 37,290 cattle. Additionally, as a result of the Tasman Acquisition, we added the ability to process 15,000 smalls per day in Australia. The Tasman Group is currently fully integrated with our legacy northern Australia operations in livestock procurement and sales. We expect to complete full integration of all information technology systems by the end of 2009. Similarly, JBS Packerland is fully integrated with respect to our customer credit, legal, treasury, financial reporting, insurance procurement and tax functions and certain employee benefit plans. We have identified and captured shared purchasing opportunities in certain packaging areas and continue to identify additional opportunities as contracts expire. We intend to complete our operational and financial information technology integration of JBS Packerland by September 2009. We will continue to work to maximize potential synergies from these acquisitions. Additionally, we intend to continue to selectively pursue additional value-enhancing growth opportunities as they arise.

Increase sales and enhance margins by significantly expanding our direct distribution network

Since the Swift Acquisition, we have built a leading global production platform. Capitalizing on our production platform, we are now pursuing a global direct distribution strategy that will enable us to improve our ability to service current customers and allow us the opportunity to directly service new customers, primarily in the food service and retail channels. Our historical sales strategy has relied upon the use of third-party distributors who purchase our product and resell it to end-user customers at higher prices, retaining the incremental margin for their own benefit. We intend to shift a significant part of our sales efforts into direct sales to end-user customers in order to capture this incremental margin. This is consistent with our approach of in-sourcing activities previously outsourced in order to eliminate margin leakage to third parties. Direct distribution will include regional distribution centers, portion control fabrication, or “cutting room” facilities (taking primal cuts which we would have sold only as whole muscle cuts to third parties and fabricating them into individual serving chops or steaks), and direct sales and shipment of products to individual end-user customers by our sales personnel using our own delivery vehicles. This direct distribution strategy will require us to substantially expand our distribution network and sales force domestically and internationally by both acquisitions and greenfield investments. During the next five years, we intend to make substantial investments, including with a portion of the net proceeds of this offering, in order to significantly expand our direct distribution network. Ultimately, we believe that our investment in this direct distribution strategy will allow us to capture incremental sales and operating margin opportunities.

Increase processed and value-added offerings

Historically, we have realized greater margins by offering value-added products and services to our customers. These offerings reduce their costs and help stimulate consumer demand. Examples of our value-added product and service offerings include additional processing to create sliced, cubed and tenderized products and consumer-ready chops and steaks. Similarly we also provide marinated and seasoned meats. These services help reduce labor costs for our food service customers and are examples of our focus on providing our customers with solutions to increase their beef and pork sales.

We believe our retail and food service customers will continue to value more convenient processed products from us. We currently operate 20 plants that produce beef and pork products that are cut, ground and packaged in a customized manner for specific orders that are primarily sold through the food service and retail distribution channels. We intend to expand our processed offerings through line expansions, acquisitions and/or greenfield investments. Increasing our value-added offerings is not limited to growth in processing capabilities, as our Five Rivers operations provide us the ability to design feeding programs that allow us to consistently deliver products that meet the exact specifications desired by our customers. We believe that increased value-added capabilities will drive margin improvement and increase the value we provide to customers.

Promote innovation across the value chain

We believe we can increase our profitability by developing and implementing innovative process and product improvements across the value chain. Our innovations include implementing a casing sorting system utilized in Brazil which enables the sorting of hog intestines (casings) for sale to end-users from all of our U.S. pork processing facilities, resulting in significantly improved margins. Additionally, we have developed and implemented energy conversion and recovery processes including real-time processes by which byproducts of purchased natural gas or grease produced in our rendering operations are converted into useable fuels and a methane recovery process resulting in useable methane gas that is subsequently resold in North American pipelines. We have also instituted Halal processing capabilities in our Australian operations, providing us with the opportunity to expand our exports to Muslim customers located in the Middle East, which we believe sets us apart from our competitors in Australia. We will continue to seek to develop innovative process and product improvements across the value chain.

Maintain leadership in food and employee safety

We prioritize our food and employee safety objectives in order to accomplish two principal goals. First, we focus on maintaining a high standard of food safety in order to ensure the quality of our products and attempt to avoid the potential adverse market reaction that is associated with recalls that occur from time to time in the meat processing industry. Second, we strive to continuously improve our employee safety in order to increase the efficiency of our facilities and reduce our operating costs. Since January 2003, we have reduced the number of lost-time injury events by approximately 50% at our beef processing facilities and by approximately 45% at our pork processing facilities through design and implementation of a comprehensive multi-faceted employee safety and injury prevention program.

Recent developments

On April 27, 2009, our wholly owned subsidiaries JBS USA, LLC and JBS USA Finance, Inc. issued $700.0 million in senior unsecured notes due May 2014 bearing interest at 11.625%, which, after deducting initial purchaser discounts, commissions and expenses in respect of this notes offering, generated net proceeds of approximately $650.8 million. The notes have semi-annual interest payment dates in May and November, commencing November 2009. The proceeds of the notes issuance were used to repay $100.0 million of borrowings under our secured revolving credit facility and to repay $550.8 million of the outstanding principal and accrued interest on intercompany loans to us from a subsidiary of JBS S.A., as described below.

As of March 29, 2009, we owed to JBS S.A. an aggregate of $658.6 million under various intercompany loans, which were subsequently assigned to JBS HU Liquidity Management LLC (Hungary), a wholly owned, indirect subsidiary of JBS S.A. The proceeds of these intercompany loans were used for the Tasman Acquisition and the JBS Packerland Acquisition, as well as to fund our operations. On April 27, 2009, these intercompany loan agreements were consolidated into one loan agreement. The maturity dates of the intercompany loans were extended to April 18, 2019, and the interest rate was changed to 12% per annum. The net proceeds of the offering of the 11.625% senior unsecured notes due 2014 (other than $100.0 million) were used to repay accrued interest and a portion of the principal on these intercompany loans. As of May 31, 2009, we owed an aggregate principal amount of $133.0 million under the consolidated intercompany loan agreement. See “Certain relationships and related party transactions.”

Corporate information

JBS USA Holdings, Inc. was incorporated in Delaware on July 23, 2004. We are a holding company and a direct, wholly owned subsidiary of JBS Hungary Holdings Kft., the selling stockholder, and a wholly owned, indirect subsidiary of JBS S.A. JBS S.A. is a publicly traded company in Brazil and the world’s largest beef producer. On July 11, 2007, JBS S.A. acquired Swift Foods Company for an aggregate purchase price of $1,470.6 million. JBS S.A. made this acquisition through J&F Acquisition Co., which thereafter merged with Swift Foods Company and changed its name to JBS USA, Inc., and subsequently JBS USA, Inc. changed its name to JBS USA Holdings, Inc.

Our corporate headquarters and principal executive offices are located at 1770 Promontory Circle, Greeley, Colorado, and our telephone number is (970) 506-8000. Our website is www.jbsswift.com. Information contained on our website is not incorporated into, and does not constitute a part of, this prospectus.

The offering

The following summary contains basic information about the shares and is not intended to be complete. It does not contain all of the information that is important to you. For a more complete understanding of the shares, please read the section of this prospectus entitled “Description of capital stock.”

Issuer

JBS USA Holdings, Inc.

Selling stockholder

JBS Hungary Holdings Kft.

Global offering

The global offering consists of the international offering and the concurrent Brazilian offering.

International offering

We and the selling stockholder are offering shares of common stock through the international underwriters in the United States and other countries outside Brazil.

Brazilian offering

Concurrently with the international offering, we and the selling stockholder are offering shares of common stock in the form of BDRs through the Brazilian underwriters in Brazil.

Common stock offered by us

shares.

Common stock offered by the selling stockholder

shares.

Common stock to be outstanding after this offering

shares (or shares if the underwriters exercise in full their option to purchase additional shares to cover over-allotments, if any).

Offering price

We expect the offering price to be between $ and $ per share.

Over-allotment option

We have granted the international underwriters an option for a period of 30 days to purchase from us up to additional shares of our common stock to cover over-allotments, if any.

Use of proceeds

We expect to receive net proceeds from the sale of our common stock in this global offering, after deducting the underwriting discount and other estimated expenses, of approximately $ million. We intend to use a portion of our net proceeds from this offering to selectively pursue value-enhancing growth opportunities as they arise. For example, during the next five years, we intend to make substantial investments in order to significantly expand our direct distribution

network. We also intend to use a portion of the net proceeds from this offering for working capital and general corporate purposes. See “Use of proceeds.”

We will not receive any of the sales proceeds associated with common stock offered by the selling stockholder.

Dividend policy

Our board of directors will adopt a dividend policy pursuant to which any future determination relating to dividend policy will be made at its discretion and will depend on a number of factors, including our business and financial condition, any covenants under our debt agreements and our parent company’s legal obligation to distribute dividends described below. However, our board of directors may, in its discretion and for any reason, amend or repeal this dividend policy. Our board of directors may increase or decrease the level of dividends provided for in our dividend policy or entirely discontinue the payment of dividends. Future dividends with respect to our common shares, if any, will depend on, among other things, our results of operations, cash requirements, financial condition, distribution of dividends made by our subsidiaries, contractual restrictions, business opportunities, provisions of applicable law and other factors that our board of directors may deem relevant.

Our parent company, JBS S.A., is required by the Brazilian corporate law to distribute on an annual basis dividends representing 25% of its net income (as calculated under generally accepted accounting principles in Brazil, subject to certain adjustments mandated by Brazilian corporate law) unless its board of directors has determined, in its discretion, that such distribution would not be advisable or appropriate in light of its financial condition.

Voting rights

Holders of our common stock will be entitled to one vote per share on all matters submitted to a vote of our stockholders.

Proposed New York Stock Exchange and São Paulo Stock Exchange symbols

We intend to apply to have our common stock listed on The New York Stock Exchange under the trading symbol “JBS.”

We expect to apply to have the BDRs listed on the São Paulo Stock Exchange under the symbol “ .”

Directed share program

At our request, the underwriters have reserved up to % of the shares of common stock for sale at the initial public offering price to persons who are directors, officers or employees, or who are otherwise associated with us, through a directed share program. The sales will be made by through a directed share program. We do not

know if these persons will choose to purchase all or any portion of these reserved shares, but any purchases they do make will reduce the number of shares available to the general public. See “Underwriting.”

Lock-up agreements

In connection with this offering, we, the selling stockholder and our executive officers and directors will enter into lock-up agreements with the underwriters of this global offering under which neither we nor they may, for a period of 180 days after the date of this prospectus, directly or indirectly sell, dispose of or hedge, or file or cause to be filed a registration statement with the SEC under the Securities Act or the Brazilian Securities Commission (Comissão de Valores Mobiliários, or “CVM”) relating to, any shares of common stock, including BDRs representing such shares, or any securities convertible into or exchangeable for shares of common stock, including BDRs representing such shares, without the prior written consent of J.P. Morgan Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated on behalf of the international underwriters and the Brazilian underwriters.

Certain relationships and related party transactions

Please read “Certain relationships and related party transactions” for a discussion of business relationships between us and related parties and “Underwriting” for information regarding relationships between us and the underwriters.

Risk factors

You should carefully read and consider the information set forth under “Risk factors” and all other information set forth in this prospectus before investing in our common stock.

Unless otherwise indicated, all information contained in this prospectus assumes:

•

no exercise of the international underwriters’ option to purchase up to additional shares of common stock to cover over-allotments, if any, and

•

that the common stock to be sold in this global offering is sold at $ , which is the midpoint of the range set forth on the cover page of this prospectus.

Except as otherwise noted, the number of shares of our common stock to be outstanding after this global offering:

•

excludes shares available for future awards under our stock option plan (see “Compensation discussion and analysis—2009 stock incentive compensation plan” for more information), and

•

gives effect to a -for-one stock split to take place immediately prior to completion of this offering.

Summary historical and pro forma financial data

The following tables set forth our summary historical and unaudited pro forma financial data at the dates and for the periods indicated.

Our summary historical financial information contained in this prospectus is derived from:

(1)

our predecessor’s audited historical consolidated financial statements as of and for

(a)

the fiscal year ended December 24, 2006, and

(b)

the 198 days from December 25, 2006 through July 10, 2007 (the date immediately preceding the Swift Acquisition),

(2)

our audited historical consolidated financial statements as of and for

(a)

the 173 days from July 11, 2007 through December 30, 2007, and

(b)

the fiscal year ended December 28, 2008,

(3)

our unaudited historical consolidated financial statements for the fiscal quarter ended March 30, 2008, and

(4)

our unaudited historical consolidated financial statements as of and for the fiscal quarter ended March 29, 2009.

The financial statements in (1)(a) and (b) and (2)(a) were audited by Grant Thornton LLP. The financial statements in (2)(b) were audited by BDO Seidman, LLP. The financial statements in (4) were reviewed by BDO Seidman, LLP.

The financial statements in (1), (2) and (4) above are included elsewhere in this prospectus, all of which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. We have prepared our unaudited historical consolidated financial statements on the same basis as our audited financial statements and have included all adjustments, consisting of normal and recurring adjustments, that we consider necessary to present fairly our financial position and results of operations for the unaudited periods. The results of operations for any partial period are not necessarily indicative of the results of operations for other periods or for the full fiscal year.

Also included in the tables below are unaudited pro forma combined balance sheet data as of March 29, 2009 and unaudited pro forma combined statement of operations data for the fiscal year ended December 28, 2008 and the fiscal quarter ended March 29, 2009. The summary unaudited pro forma combined statement of operations data for the fiscal year ended December 28, 2008 have been prepared as if

•

our issuance and sale of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom,

•

the JBS Packerland Acquisition, and

•

the acquisition of 50% of the equity interest in Five Rivers not previously owned by JBS Packerland had occurred as of December 31, 2007.

The summary unaudited pro forma combined financial data for the fiscal year ended December 28, 2008 are derived from (1) our audited historical consolidated financial statements for the fiscal year ended December 28, 2008, (2) unaudited historical financial information of Smithfield Beef Group, Inc. for the period from January 1, 2008 through October 22, 2008 and (3) unaudited historical financial information of Five Rivers for the period from January 1, 2008 through October 22, 2008.

The summary unaudited pro forma combined financial data as of and for the fiscal quarter ended March 29, 2009 have been prepared as if our issuance and sale of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom had occurred as of December 30, 2007, and the unaudited pro forma combined balance sheet data as of March 29, 2009 have been prepared as if such event had occurred on March 29, 2009. The unaudited pro forma combined financial data do not give any pro forma effect to the Tasman Acquisition as it was not material and did not constitute a significant subsidiary under Regulation S-X.

The summary unaudited pro forma combined financial data as of and for the fiscal quarter ended March 29, 2009 are derived from our unaudited historical consolidated financial statements for the fiscal quarter ended March 29, 2009.

Historically, Smithfield Beef Group, Inc. and Five Rivers reported their financial results using the last Sunday in April, and March 31, respectively, as their fiscal year ends. Accordingly, the historical amounts presented for JBS Packerland and Five Rivers in the unaudited pro forma combined financial information do not agree with Smithfield Beef Group, Inc.’s and Five Rivers’ financial statements appearing elsewhere in this prospectus.

All pro forma financial information in this prospectus is presented for informational purposes only and does not purport to be indicative of what would have occurred had (1) our issuance of our 11.625% senior unsecured notes due 2014, (2) the JBS Packerland Acquisition and (3) the acquisition of 50% of the equity interest in Five Rivers actually been consummated at the beginning of the period presented or as of the balance sheet date, as the case may be, nor is it necessarily indicative of our future combined operating results.

You should read the information contained in this table in conjunction with “Unaudited pro forma combined financial data,” “Selected historical consolidated financial data,” “Management’s discussion and analysis of financial condition and results of operations” and the financial statements and the accompanying notes thereto included elsewhere in this prospectus.


	JBS USA Holdings, Inc.
	Predecessor						Successor
	As of and for the fiscal year ended December 24, 2006			As of and for the 198 days from December 25, 2006 through July 10, 2007			As of and for the 173 days from July 11, 2007 through December 30, 2007			As of and for the fiscal year ended December 28, 2008						As of and for the fiscal quarter ended March 30, 2008			As of and for the fiscal quarter ended March 29, 2009
in thousands, except earnings per share	Historical			Historical			Historical			Historical			Pro forma(1)			Historical			Historical			Pro forma(2)

	(audited)			(audited)			(audited)			(audited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)

Statement of operations data:
Net sales	$	9,691,432		$	4,970,624		$	4,988,984		$	12,362,281		$	15,445,791		$	2,461,657		$	3,196,339		$	3,196,339
Cost of goods sold		9,574,715			4,920,594			5,013,084			11,917,777			14,837,751			2,451,413			3,123,358			3,123,358

Gross profit (loss)		116,717			50,030			(24,100	)		444,504			608,040			10,244			72,981			72,981
Selling, general and administrative		158,783			92,333			60,727			148,785			218,697			31,042			61,598			61,598
Foreign currency transaction loss (gain)(3)		(463	)		(527	)		(5,201	)		75,995			75,995			(12,614	)		(5,075	)		(5,075	)
Other income		(4,937	)		(3,821	)		(3,581	)		(10,107	)		(10,470	)		(3,782	)		(1,475	)		(1,475	)
Loss (gain) on sales of property, plant and equipment		(666	)		(2,946	)		182			1,082			1,096			19			180			180
Interest expense, net		118,754			66,383			34,340			36,358			82,621			8,108			14,592			24,616

Total expenses		271,471			151,422			86,467			252,113			367,939			22,773			69,820			79,844

Income (loss) before income tax expense		(154,754	)		(101,392	)		(110,567	)		192,391			240,101			(12,529	)		3,161			(6,863	)
Income tax expense (benefit)		(37,348	)		(18,380	)		1,025			31,287			47,986			5,613			909			(2,600	)

Net income (loss)	$	(117,406	)	$	(83,012	)	$	(111,592	)	$	161,104		$	192,115		$	(18,142	)	$	2,252		$	(4,263	)

Basic and diluted net income (loss) per share of common stock(4)		N/A			N/A		$	(1,115,920.00	)	$	1,611,040.00		$	1,921,150.00		$	(181,420.00	)	$	22,520.00		$	(42,630.00	)
Basic and diluted pro forma net income (loss) per share of common stock(5)		N/A			N/A		$			$			$			$			$			$
Balance sheet data (at period end):
Cash and cash equivalents	$	83,420		$	44,673		$	198,883		$	254,785					$	77,365		$	156,737		$	154,322
Accounts receivable, net		334,341			365,642			417,375			588,985						438,515			514,160			514,160
Inventories		457,829			487,598			466,756			649,000						541,519			650,026			650,026
Property, plant and equipment, net		487,427			505,172			708,056			1,229,316						716,334			1,241,055			1,241,055
Total assets		1,538,597			1,578,350			2,165,815			3,315,571						2,125,696			3,308,815			3,309,315
Long-term debt		1,065,553			1,201,975			32,433			806,808						32,347			901,517			933,242
Total debt		1,067,503			1,203,912			810,718			878,319						395,154			977,048			1,008,773
Stockholder’s equity		(40,090	)		(98,818	)		838,818			1,388,250						1,281,075			1,394,939			1,394,939
Other financial data:
EBITDA(6)		53,122			9,829			(40,983	)		321,123			454,724			14,718			51,105			51,105
Adjusted EBITDA(6)		51,993			6,356			(46,002	)		398,200			531,815			2,123			66,110			66,110
Cash provided by (used in):
Operating activities		67,823			(110,661	)		(107,784	)		282,147						(128,911	)		51,003
Investing activities(7)		(11,923	)		(27,777	)		(39,409	)		(783,739	)					(15,376	)		(206,440	)
Financing activities		(25,947	)		100,492			346,711			571,265						22,135			55,689
Capital expenditures	$	47,294		$	33,700		$	33,461		$	118,320		$	137,958		$	11,676		$	35,189		$	35,189
Other operating data:
Heads killed, Beef		5,808			2,731			2,824			6,872			8,721			1,355			2,025			2,025
Heads killed, Pork		12,105			6,511			6,123			13,113			13,113			3,315			3,114			3,114

(1)

As adjusted to (i) give effect to the JBS Packerland Acquisition as if it had occurred at the beginning of the period presented, and (ii) give effect to the sale of $560.9 million of our 11.625% senior unsecured notes due 2014 and the application of proceeds therefrom as if they had occurred at the beginning of the period presented.

(2)

As adjusted to give effect to the sale of $560.9 million of our 11.625% senior unsecured notes due 2014 and the use of proceeds therefrom as if it had occurred at the beginning of the period presented, in the case of statement of operations data, and give effect to the sale of all of our 11.625% senior unsecured notes due 2014 and the use of proceeds therefrom as if it had occurred at the end of the period presented, in the case of balance sheet data.

(3)

Foreign currency transaction loss (gain) reflects changes in value of our U.S. dollar-denominated intercompany note payable and receivable within Australia due to changes in the exchange rate between the U.S. dollar and the Australian dollar.

(4)

The capital structure of our predecessor company was significantly different from our capital structure. Prior to this offering, our capital structure consists of 100 common shares issued and outstanding, and we do not have any warrants or options that may be exercised. Accordingly, we do not believe our predecessor company’s earnings per share information is meaningful to investors and have not included such information.

(5)

In calculating shares of our common stock outstanding, we give retroactive effect to the stock split to occur immediately prior to completion of this offering.

(6)

EBITDA represents net income (loss) before income tax expense (benefit), interest expense, net, and depreciation and amortization. EBITDA and Adjusted EBITDA are presented as supplemental financial measurements in the evaluation of our business. Adjusted EBITDA as used in this prospectus represents EBITDA as defined in our 11.625% senior unsecured notes due 2014. Adjusted EBITDA, as used in our 11.625% senior unsecured notes due 2014, represents EBITDA as adjusted to exclude loss (gain) on sales of property, plant and equipment, non-recurring items and foreign currency transaction losses (gains). We present Adjusted EBITDA because we believe (1) the ratio of our net debt to Adjusted EBITDA is an important term of our 11.625% senior unsecured notes due 2014, (2) our 11.625% senior unsecured notes due 2014 is material indebtedness to our company and (3) information about this ratio is important to investors to understand our liquidity. See “Management’s discussion and analysis of financial condition and results of operations––Liquidity and capital resources––Covenant compliance” for more information about this ratio. In addition, because EBITDA and Adjusted EBITDA exclude certain non-cash charges, as well as other items that we believe are not representative of our core business operations, we believe that the presentation of these financial measures helps investors to assess our operating performance from period to period and enhances understanding of our financial performance and highlights operational trends. These measures are widely used by investors and rating agencies in the valuation, comparison, rating and investment recommendations of companies. However, the measurement of EBITDA and Adjusted EBITDA in this prospectus may not be comparable to that of other companies in our industry, which limits their usefulness as a comparative measure. EBITDA and Adjusted EBITDA are not measures required by or calculated in accordance with GAAP and should not be considered as a substitute for income (loss) from continuing operations, net income (loss) or any other measure of financial performance reported in accordance with GAAP or as measures of operating cash flows or liquidity. You should rely primarily on our GAAP results, and use this non-GAAP financial measure only supplementally, in making your investment decision.

Each of EBITDA and Adjusted EBITDA is reconciled to net income (loss) as follows:


	JBS USA Holdings, Inc.
	Predecessor						Successor
	As of and for the fiscal year ended December 24, 2006			As of and for the 198 days from December 25, 2006 through July 10, 2007			As of and for the 173 days from July 11, 2007 through December 30, 2007			As of and for the fiscal year ended December 28, 2008				As of and for the fiscal quarter ended March 30, 2008			As of and for the fiscal quarter ended March 29, 2009
in thousands	Historical			Historical			Historical			Historical		Pro forma		Historical			Historical			Pro forma


Net income (loss)	$	(117,406	)	$	(83,012	)	$	(111,592	)	$	161,104	$	192,115	$	(18,142	)	$	2,252		$	(4,263	)
Income tax expense (benefit)		(37,348	)		(18,380	)		1,025			31,287		47,986		5,613			909			(2,600	)
Interest expense, net		118,754			66,383			34,340			36,358		82,621		8,108			14,592			24,616
Depreciation and amortization(a)		89,122			44,838			35,244			92,374		132,002		19,139			33,352			33,352


EBITDA (unaudited)		53,122			9,829			(40,983	)		321,123		454,724		14,718			51,105			51,105
Loss (gain) on sales of property, plant and equipment		(666	)		(2,946	)		182			1,082		1,096		19			180			180
Foreign currency transaction loss (gain)(b)		(463	)		(527	)		(5,201	)		75,995		75,995		(12,614	)		(5,075	)		(5,075	)
National Beef termination fee(c)		—			—			—			—		—		—			19,900			19,900

Adjusted EBITDA (unaudited)	$	51,993		$	6,356		$	(46,002	)	$	398,200	$	531,815	$	2,123		$	66,110		$	66,110

(a)

Depreciation and amortization includes a goodwill impairment charge of $4.5 million for the fiscal year ended December 24, 2006.

(b)

(c)

On February 18, 2009, we reached an agreement to terminate our efforts to acquire National Beef Packing Company, LLC, or National Beef, effective February 23, 2009. As a result of the termination of the agreement, we paid a breakage fee to the shareholders of National Beef totaling $19.9 million as full and final settlement of any and all liabilities relating to the potential acquisition in the fiscal quarter ended March 29, 2009.

(7)

Investing activities for the fiscal year ending December 28, 2008 include cash used in connection with the Tasman Acquisition and the JBS Packerland Acquisition.

Risk factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below as well as the other information contained in this prospectus before deciding to purchase any shares of our common stock. These risks could harm our business, operating results, financial condition and prospects. In addition, the trading price of our common stock could decline due to any of these risks and you might lose all or part of your investment.

Risks relating to our business and the beef and pork industries

Outbreaks of BSE, Foot-and-Mouth Disease, or FMD, or other species-based diseases in the United States, Australia or elsewhere may harm demand for our products.

An outbreak of disease affecting livestock, such as BSE, could result in restrictions on sales of products to our customers or purchases of livestock from our suppliers. Also, outbreaks of these diseases or concerns that these diseases may occur and spread in the future, whether or not resulting in regulatory action, can lead to cancellation of orders by our customers and create adverse publicity that may have a material adverse effect on customer demand for our products. In December 2003, the USDA reported the first confirmed case of BSE in the United States. Following the announcement, substantially all international export markets banned the import of U.S. beef. Canada also confirmed its first case of BSE in 2003, leading to the USDA’s closure to imports of live cattle from Canada. As a result, export demand declined and negatively impacted the volume of processing at our facilities. The United States currently imports cattle that is 30 months of age or younger from Canada, and Mexico reopened its borders to U.S. beef in April 2004. However, the late June 2005 announcement by the USDA of a second confirmed case of BSE in the United States followed by a third confirmed case in March 2006 has extended some border closures and slowed the re-entry of U.S. beef to some foreign markets. On July 27, 2006, Japan announced it would resume importing some U.S. beef, restricted to cattle that is 20 months or younger from approved U.S. processing plants. In 2006, South Korea reopened its market to boneless beef from the United States. However, disagreements and lack of clarity over import rules and procedures slowed the re-entry of U.S. boneless beef such that such exports to South Korea did not truly commence until 2008. As of March 29, 2009, 16 countries were still closed to U.S. beef. We are currently unable to assess whether or when these remaining foreign markets may fully open to U.S. beef or whether existing open markets may close.

In addition to BSE (in the case of cattle) and FMD (a highly contagious animal disease), cattle, sheep and pigs are subject to outbreaks of other diseases affecting such livestock. An actual outbreak of BSE, FMD or any other diseases, or the perception by the public that such an outbreak has occurred, could result in restrictions on domestic and export sales of our products (even if our products are not actually affected by any disease), cancellations of orders by our customers and adverse publicity. In addition, if the products of our competitors become contaminated, the adverse publicity associated with such an event may lower consumer demand for our products. Any of these events could have a material adverse effect on us.

Any perceived or real health risks related to the food industry could adversely affect our ability to sell our products. If our products become contaminated, we may be subject to product liability claims and product recalls.

We are subject to risks affecting the food industry generally, including risks posed by the following:

•

food spoilage or food contamination,

•

evolving consumer preferences and nutritional and health-related concerns,

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consumer product liability claims,

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product tampering,

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the possible unavailability and expense of product liability insurance, and

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the potential cost and disruption of a product recall.

Our beef products and our pork products in the United States have in the past been, and may in the future be, exposed to contamination by organisms that may produce foodborne illnesses, such as E. coli, Listeria monocytogenes and Salmonella. These organisms are generally found in the environment and, as a result, there is a risk that they could be present in our products. These pathogens can also be introduced to our products through tampering or as a result of improper handling at the further processing, food service or consumer level. Once contaminated products have been shipped for distribution, illness or death may result if the products are not properly prepared prior to consumption or if the pathogens are not eliminated in further processing.

Although we have systems in place designed to monitor food safety risks throughout all stages of our processes, such systems, even when working effectively, may not eliminate the risks related to food safety. As a result, we may voluntarily recall, or be required to recall, our products if they are or may be contaminated, spoiled or inappropriately labeled. For example, on June 25, 2009, we voluntarily recalled 41,280 pounds of beef products that may have been contaminated with E. coli. Following further investigations, on June 28, 2009, we voluntarily expanded this recall to include an additional 380,000 pounds of assorted beef products. The recalled beef products were produced on April 21 and April 22, 2009 at our Greeley, Colorado facility and were shipped to distributors and retailers in multiple states and internationally. While we are unable to ascertain the exact cost we will incur relating to these voluntary recalls, we anticipate the total cost of these recalls to be less than $4 million. Although no direct link has been confirmed, the Centers for Disease Control and Prevention has stated that cases of E. coli illnesses may be associated with the consumption of these beef products.

We may be subject to significant liability in the jurisdictions in which our products are sold if the consumption of any of our products causes injury, illness or death and such liability may be in excess of applicable liability insurance policy limits. Adverse publicity concerning any perceived or real health risk associated with our products could also cause customers to lose confidence in the safety and quality of our food products, which could adversely affect our ability to sell our products. We could also be adversely affected by perceived or real health risks associated with similar products produced by others to the extent such risks cause customers to lose confidence in the safety and quality of such products generally. Any of these events may have a material adverse effect on us.

Our pork business could be negatively affected by concerns about A(H1N1) influenza.

In 2009, A(H1N1) influenza spread to several countries. More than 94,000 cases and over 400 deaths worldwide have been recorded since the outbreak of A(H1N1) influenza in Mexico, and

on June 11, 2009, the World Health Organization, or WHO, declared a flu alert level six, signaling a “global pandemic.” Although the WHO has stated that there is no relation between those infected with Influenza A(H1N1) and contact with persons living near swine or the consumption of pork, several countries, including Russia, Thailand, Ukraine, China and the Philippines, have stopped importing some or all pork produced in the affected states in the United States and certain other affected regions in the world.

Any further outbreaks of the disease could have a negative impact on the consumption of pork in our markets, and a significant outbreak could negatively affect our Pork net sales and overall financial performance. Any further outbreak of A(H1N1) influenza could lead to the imposition of costly preventive controls on pork imports in our international markets. Accordingly, any spread of A(H1N1) influenza, or increasing concerns about this disease could negatively impact our Pork results of operations and our ability to sell pork in existing and new markets.

Our results of operations may be negatively impacted by fluctuations in the prevailing market prices for livestock.

We are dependent on the cost and supply of livestock and the selling price of our products and competing protein products, all of which can vary significantly over a relatively short period of time. Livestock prices demonstrate a cyclical nature both seasonally and over periods of years, reflecting the supply of and demand for livestock on the market and the market for other protein products such as livestock and fish. These costs are determined by constantly changing market forces of supply and demand as well as other factors over which we have little or no control. These other factors include:

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environmental and conservation regulations,

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import and export restrictions,

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economic conditions,

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livestock diseases, and

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declining cattle inventory levels in the United States and/or Australia.

We do not generally enter into long-term sales arrangements with our customers with fixed price contracts, and, as a result, the prices at which we sell our products are determined in large part by market conditions. A majority of our livestock is purchased from independent producers who sell livestock to us under marketing contracts or on the open market. A significant decrease in beef or pork prices for a sustained period of time could have a material adverse effect on our net sales revenue and, unless our raw material costs and other costs correspondingly decrease, on our operating margins.

We attempt to manage certain of these risks through the use of risk management and hedging programs, which include forward purchase and sale agreements and futures and options, but these strategies cannot and do not fully eliminate these risks. Furthermore, these programs may also limit our ability to participate in gains from favorable commodity price fluctuations. Also, a portion of our forward purchase and sale contracts are marked-to-market such that the related unrealized gains and losses are reported in earnings on a quarterly basis. Therefore, losses on those contracts would adversely affect our earnings and may cause significant volatility in our quarterly earnings. See “Management’s discussion and analysis of financial condition and results of operations—Quantitative and qualitative disclosure about market risk.”

Accordingly, we may be unable to pass on all or part of any increased costs we experience from time to time to consumers of our products directly, in a timely manner or at all. Additionally, if

we do not attract and maintain contracts or marketing relationships with independent producers and growers, our production operations could be disrupted.

Our businesses are subject to government policies and extensive regulations affecting the cattle, hog, beef and pork industries.

Livestock production and trade flows are significantly affected by government policies and regulations. Governmental policies affecting the livestock industry, such as taxes, tariffs, duties, subsidies and import and export restrictions on livestock products, can influence industry profitability, the use of land resources, the location and size of livestock production, whether unprocessed or processed commodity products are traded, and the volume and types of imports and exports.

Our plants and our products are subject to periodic inspections by federal, state and municipal authorities and to comprehensive food regulation, including controls over processed food. Our operations are subject to extensive regulation and oversight by state, local and foreign authorities regarding the processing, packaging, storage, distribution, advertising and labeling of our products, including food safety standards. Our exported products are often inspected by foreign food safety authorities, and any violation discovered during these inspections may result in a partial or total return of a shipment, partial or total destruction of the shipment and costs due to delays in product deliveries to our customers.

Our operations in the United States are subject to extensive regulation and oversight by the USDA, the U.S. Environmental Protection Agency, or the EPA, and other state, local and foreign authorities regarding the processing, packaging, labeling, storage, distribution and advertising of our products. Recently, the food safety practices and procedures of the meat processing industry have been subject to more intense scrutiny and oversight by the USDA. Food safety standards, processes and procedures are subject to the USDA Hazard Analysis Critical Control Point program, which includes compliance with the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. Wastewater, storm water and air discharges from our operations are subject to extensive regulations by the EPA and other state and local authorities. Our facilities for processing beef, pork and lamb are subject to a variety of federal, state and local laws relating to the health and safety of our employees including those administered by the U.S. Occupational Safety and Health Administration, or OSHA. Our Australian operations also are subject to extensive regulation by the Australian Quarantine Inspection Service, or AQIS, and other state, local and foreign authorities. Additionally, we are routinely affected by new or amended laws, regulations and accounting standards. Our failure to comply with applicable laws and regulations or failure to obtain necessary permits and registrations could delay or prevent us from meeting current product demand or acquiring new businesses, as well as possibly subjecting us to administrative penalties, damages, injunctive relief, fines, injunctions, recalls of our products or seizure of our properties as well as potential criminal sanctions, any of which could materially adversely affect our financial results.

Government policies in the United States, Australia and other jurisdictions may adversely affect the supply, demand for and prices of livestock products, restrict our ability to do business in existing and target domestic and export markets and could adversely affect our results of operations. For example, the European Union has banned the importation of beef raised using hormones. Our facilities in the U.S. and, to a limited extent, our facilities in Australia process cattle that have been raised with hormones and therefore, we are prohibited from exporting our products from these facilities to the European Union. In addition, the Obama administration

announced recently that it would seek to ban many routine uses of antibiotics, which are fed to farm animals to encourage rapid growth, in hopes of reducing the spread of dangerous bacteria in humans.

In addition, if we are required to comply with future material changes in food safety regulations, we could be subject to material increases in operating costs and we could be required to implement regulatory changes on schedules that cannot be met without interruptions in our operations.

Compliance with environmental requirements may result in significant costs, and failure to comply may result in civil liabilities for damages as well as criminal and administrative sanctions and liability for damages.

Our operations are subject to extensive and increasingly stringent federal, state, local and foreign laws and regulations pertaining to the protection of the environment, including those relating to the discharge of materials into the environment, the handling, treatment and disposition of wastes and remediation of soil and ground water contamination. Failure to comply with these requirements can have serious consequences for us, including criminal as well as civil and administrative penalties, claims for property damage, personal injury and damage to natural resources and negative publicity. We have incurred significant capital and operating expenditures and we expect to incur approximately $30 million in additional capital expenditures between 2009 and 2012, including for the upgrade our wastewater treatment facilities and remediation of previous contamination from the release of wastewater from certain of our plants under predecessor ownership as described in “Business—Wastewater issues.” Additional environmental requirements imposed in the future and/or stricter enforcement of existing requirements could require currently unanticipated investigations, assessments or expenditures and may require us to incur significant additional costs. As the nature of these potential future charges is unknown, we are not able to estimate the magnitude of any future costs, and we have not accrued any reserve for any potential future costs.

Some of our facilities have been in operation for many years. During that time, we and previous owners and operators of these facilities have generated and disposed of wastes that are or may be considered hazardous or may have polluted the soil, surface water or groundwater at our facilities and adjacent properties. Some environmental laws impose strict and, in certain circumstances, joint and several liability for costs of investigation and remediation of contaminated sites on current and former owners and operators of the sites, and on persons who arranged for disposal of wastes at such sites. Discovery of previously unknown contamination of property underlying or in the vicinity of our or our predecessor’s present or former properties or manufacturing facilities and/or waste disposal sites could require us to incur material unforeseen expenses. Occurrences of any of these events may have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, increasing efforts to control emissions of greenhouse gases, or GHG, are likely to impact us. In the United States, the EPA recently proposed a mandatory GHG reporting system for certain activities, including manure management systems, which exceed specified emission thresholds. The EPA has also announced a proposed finding relating to GHG emissions that may result in promulgation of GHG air quality standards. The U.S. Congress is considering various options, including a cap and trade system which would impose a limit and a price on GHG emissions and establish a market for trading GHG credits. The House of Representatives recently passed a bill contemplating such a cap and trade system, and the bill is now before the Senate.

Certain states have taken steps to regulate GHG emissions that may be more stringent than federal regulations. In Australia, the federal government has proposed a GHG cap and trade system that would cover agricultural operations, including certain of our feedlots, and at least two of our processing plants. Certain states in Australia could also adopt regulations of GHG emissions which are stricter than Australian federal regulations. While it is not possible to estimate the specific impact final GHG regulations will have on our operations, there can be no guarantee that these measures will not have significant additional impact on us.

Our export and international operations expose us to political and economic risks in foreign countries, as well as to risks related to currency fluctuations.

Sales outside the United States, primarily to Russia, Japan, Mexico, South Korea, Canada, Taiwan and China, accounted for approximately 21% of our total net sales for the fiscal quarter ended March 29, 2009. Our international activities expose us to risks not faced by companies that limit themselves to the United States. One significant risk is that the international operations may be affected by import restrictions and tariffs, other trade protection measures, and import or export licensing requirements. For example, in 2008, exports to Japan from our processing plant in Wisconsin were suspended, as were exports to South Korea from our Colorado plant and to Russia from one of our pork production plants. In April 2009, Russia halted imports from our pork facility in Louisville, Kentucky. Our future financial performance will depend significantly on economic, political and social conditions in our and JBS S.A.’s principal export markets (the European Union, Russia, the United States, Japan, Mexico, Canada, Taiwan, China and the Middle East). Other risks associated with our international activities include:

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changes in foreign currency exchange rates and inflation in the foreign countries in which we operate;

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exchange controls;

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changes in a specific country’s or region’s political or economic conditions, particularly in emerging markets;

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potentially negative consequences from changes in regulatory requirements;

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difficulties and costs associated with complying with, and enforcing remedies under, a wide variety of complex international laws, treaties, and regulations, including, without limitation, the Foreign Corrupt Practices Act;

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tax rates that may exceed those in the United States and earnings that may be subject to withholding requirements and incremental taxes upon repatriation;

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potentially negative consequences from changes in tax laws; and

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distribution costs, disruptions in shipping or reduced availability of freight transportation.

While we attempt to manage certain of these risks through the use of risk management and hedging programs, which include futures and options, these strategies cannot and do not fully eliminate these risks. An occurrence of any of these events could negatively impact our results of operations and our ability to transact business in existing or developing markets.

Deterioration of economic conditions could negatively impact our business.

Our business may be adversely affected by changes in national or global economic conditions, including inflation, interest rates, availability of capital markets, consumer spending rates, energy

availability and costs (including fuel surcharges) and the effects of governmental initiatives to manage economic conditions. Any such changes could adversely affect the demand for our products both in domestic and export markets, or the cost and availability of our needed raw materials, cooking ingredients and packaging materials, thereby negatively affecting our financial results.

The recent disruptions in credit and other financial markets and deterioration of national and global economic conditions, could, among other things:

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negatively impact global demand for protein products, which could result in a reduction of sales, operating income and cash flows;

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cause our customers or end consumers of our products to “trade down” to other protein sources such as chicken or fish, or to cuts of beef or pork that are less profitable, putting pressure on our profit margins;

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make it more difficult or costly for us to obtain financing for our operations or investments or to refinance our debt in the future;

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cause our lenders to depart from prior credit industry practice and make more difficult or expensive the granting of any technical or other waivers under our debt agreements to the extent we may seek them in the future;

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impair the financial condition of some of our customers, suppliers or counterparties to our derivative instruments, thereby increasing customer bad debts or non-performance by suppliers or counterparties;

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decrease the value of our investments; and

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impair the financial viability of our insurers.

Failure to successfully implement our business strategies may affect our plans to increase our revenue and cash flow.

Our growth and financial performance depends, in part, on our success in implementing numerous elements of our strategies that are dependent on factors that are beyond our control.

We may be unable to fully or successfully implement our strategies. The beef and pork industries and the food distribution industry are particularly influenced by changes in customer preferences, governmental regulations, regional and national economic conditions, demographic trends and sales practices by retailers, among other factors. Some aspects of our strategy require an increase in our operating costs and a significant increase in capital expenditures that may not be offset by a corresponding increase in revenue, resulting in a decrease in our operating margins.

For example, we are pursuing a global direct distribution strategy as we seek to enhance our operating margins. The implementation of this strategy will require us to make substantial investments in order to build a distribution center network, as well as related operating expenses. There can be no assurance that the increased sales levels and enhanced margins that we anticipate will result from this strategic initiative, or that we will achieve an adequate return on the required investment. In addition, this strategy may expose us to direct competition with our existing third party distribution customers in some segments, which could affect our relationship with these customers.

Our business strategies require substantial capital and long-term investments, which we may be unable to fund.

Our business strategies will require substantial additional capital investment following this offering, including, for example, our strategy of creating a global direct distribution network. To the extent that the net proceeds from this offering and cash generated internally and cash available under our revolving credit facility are not sufficient to fund our capital requirements, we will require additional debt and/or equity financing. However, this type of financing may not be available or, if available, may not be available on satisfactory terms, including as a result of adverse macroeconomic conditions. Our parent company, JBS S.A., has invested over $1.4 billion in equity capital in us since the Swift Acquisition in 2007. In addition, since July 11, 2007, we have invested $187.0 million in our U.S. and Australian manufacturing operations, excluding the JBS Packerland and Tasman Acquisitions. Our parent company may not agree to provide us with additional financing in the future. Our parent company is a public company in Brazil and may in the future have interests that conflict or compete with ours. In addition, we are limited in our ability to incur indebtedness in certain circumstances under the terms of our outstanding indebtedness under our revolving credit facility, the indenture governing our 11.625% senior unsecured notes issued by us earlier this year and the indentures governing the 10.50% notes due 2016 in an aggregate principal amount of $300.0 million issued by JBS S.A. in 2006.

We may be unable to obtain sufficient additional capital in the future to fund our capital requirements and our business strategy at acceptable costs. If we are unable to access additional capital on terms acceptable to us, we may not be able to fully implement our business strategy, which may limit the future growth and development of our business. In addition, equity financings could result in dilution to our stockholders, and equity or debt securities issued in future financings may have rights, preferences and privileges that are senior to those of our common stock. If our need for capital arises because of significant losses, the occurrence of these losses may make it more difficult for us to raise the necessary capital.

Implementation of any of our strategies depends on factors that are beyond our control, such as changes in the conditions of the markets in which we operate, actions taken by our competitors, or existing laws and regulations at any time by U.S. federal government or by any other state, local or national government. Our failure to successfully implement any part of our strategy may materially adversely impact our business, financial condition and results of operations.

We may not be able to successfully integrate any growth opportunities we may undertake in the future.

We intend to pursue selected growth opportunities in the future as they arise. These types of opportunities may expose us to successor liability relating to actions involving any acquired entities, their respective management or contingent liabilities incurred prior to our involvement. A material liability associated with these types of opportunities, or our failure to successfully integrate any acquired entities into our business, could adversely affect our reputation and have a material adverse effect on us.

We may not be able to successfully integrate any growth opportunities we may undertake in the future or successfully implement appropriate operational, financial and administrative systems and controls to achieve the benefits that we expect to result therefrom. These risks include: (1) failure of the acquired entities to achieve expected results, (2) possible inability to retain or hire key personnel of the acquired entities and (3) possible inability to achieve expected synergies and/or economies of scale. In addition, the process of integrating businesses could cause interruption of, or loss of momentum in, the activities of our existing business. The diversion of

our management’s attention and any delays or difficulties encountered in connection with the integration of these businesses could negatively impact our business and results of operations.

We face competition in our business, which may adversely affect our market share and profitability.

The beef and pork industries are highly competitive. Competition exists both in the purchase of live cattle and hogs and in the sale of beef and pork products. In addition, our beef and pork products compete with a number of other protein sources, including poultry and fish. We compete with numerous beef producers, including companies based in the United States (Tyson Foods Inc., National Beef Packing Company, LLC and Cargill Inc.) and in Australia (Teys Bros Pty Ltd. and Nippon Meat Packers Ltd.), as well as pork producers (Smithfield Foods, Inc., Tyson Foods Inc. and Cargill Inc.). The principal competitive factors in the beef and pork processing industries are operating efficiency and the availability, quality and cost of raw materials and labor, price, quality, food safety, product distribution, technological innovations and brand loyalty. Our ability to be an effective competitor depends on our ability to compete on the basis of these characteristics. Some of our competitors have greater financial and other resources and enjoy wider recognition for their consumer branded products. We may be unable to compete effectively with these companies, and if we are unable to remain competitive with these beef and pork producers in the future, our market share may be adversely affected.

Changes in consumer preferences could adversely affect our business.

The food industry, in general, is subject to changing consumer trends, demands and preferences. Our products compete with other protein sources, including poultry and fish. Trends within the food industry frequently change, and our failure to anticipate, identify or react to changes in these trends could lead to reduced demand and prices for our products, among other concerns, and could have a material adverse effect on our business, financial condition, results of operations and market price of our common stock.

Our business could be materially adversely affected as a result of adverse weather conditions or other unanticipated extreme events in our areas of operations.

Changes in the historical climate in the areas in which we operate could have a material adverse effect on our business. For instance, the timing of delivery to market and availability of livestock for our grass fed division in Australia is dependent on access to range lands and paddocks which can be negatively impacted by periods of extended drought. In addition, our cattle feeding operations in Australia and meat packing facilities in the U.S. and Australia rely on large volumes of potable water for the raising of healthy livestock and the fabrication of our meat products. Potable water is generally available from municipal supplies and/or naturally replenished aquifers, the access to which and availability of which could be affected in the event rainfall patterns change, aquifers become depleted or contaminated and municipal supplies are not maintained. While we own substantial water rights, occurrences of any of these events, or inability to enforce existing or secure additional water rights in the future, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Natural disasters, fire, bioterrorism, pandemics or extreme weather, including floods, excessive cold or heat, hurricanes or other storms, could impair the health or growth of livestock or interfere with our operations due to power outages, fuel shortages, damage to our production and processing facilities or disruption of transportation channels, among other things. Any of

these factors, as well as disruptions in our information systems, could have an adverse effect on our financial results.

Our performance depends on favorable labor relations with our employees and our compliance with labor laws. Any deterioration of those relations or increase in labor costs due to our compliance with labor laws could adversely affect our business.

As of March 29, 2009 we had a total of approximately 31,900 employees worldwide. A majority of these employees are represented by labor organizations, and our relationships with these employees are governed by collective bargaining agreements. In the U.S., we have 11 collective bargaining or other labor agreements expiring in 2009 and 2010, covering approximately 24,300 employees. In Australia, we have 20 collective bargaining or other collective labor agreements, 14 of which expire between 2010 and 2014. Upon the expiration of existing collective bargaining agreements or other collective labor agreements, we may not reach new agreements without union action and any such new agreements may not be on terms satisfactory to us. In addition, any new agreements may be for shorter durations than those of our historical agreements. Moreover, additional groups of currently non-unionized employees may seek union representation in the future. If we are unable to negotiate acceptable collective bargaining agreements, we may become subject to union-initiated work stoppages, including strikes.

Additionally, it is expected that the Employee Free Choice Act, which was passed in the U.S. House of Representatives in 2007, will be reintroduced in the new U.S. Congress. If reintroduced and enacted in its most recent form, the Employee Free Choice Act could make it significantly easier for union organizing drives to be successful. The Employee Free Choice Act could also give third-party arbitrators the ability to impose terms, which may be harmful to us, of collective bargaining agreements if the relevant company and union are unable to agree to the terms of a collective bargaining agreement. This legislation could increase the penalties we may incur if we engage in labor practices in violation of the National Labor Relations Act. Any significant increase in labor costs, deterioration of employee relations, slowdowns or work stoppages at any of our locations, whether due to union activities, employee turnover or otherwise, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

On December 12, 2006, at which time we were under our previous private equity ownership, agents from the U.S. Department of Homeland Security’s Immigration and Customs Enforcement division, or ICE, and other law enforcement agencies conducted on-site employee interviews at all of our production facilities except with respect to our production facilities located in Louisville, Kentucky and Santa Fe Springs, California, in connection with an investigation of the immigration status of an unspecified number of our workers. Approximately 1,300 individuals were detained by ICE and removed from our U.S. domestic labor force. To date, no civil or criminal charges have been filed by the U.S. government against us or any of our current or former management employees. On December 12, 2006, after a six- to seven-hour suspension of operations due to the employee interview process, we resumed production at all facilities in the United States, but at reduced output levels. We refer to this event in this prospectus as either the ICE incident or the ICE event. We estimate that the ICE event resulted in additional costs of approximately $82 million, as well as reduced revenues at the affected facilities, as lower levels of experienced staffing resulted in lower volumes of beef that met processing specifications. We resumed normal production at our pork processing facilities in March 2007 and reported in May 2007 that we had returned to standard staffing levels at all of our beef processing facilities. We have enhanced our previous hiring and legal compliance practices to mitigate this risk; however, we may face similar disruptions in the future at our U.S. facilities, our enhanced hiring practices

may expose us to an increased risk of lawsuits related to such practices, and our labor costs may be negatively affected as a result.

The consolidation of our customers could negatively impact our business.

Our customers, such as supermarkets, warehouse clubs and food distributors, have consolidated in recent years, and consolidation is expected to continue throughout the United States and in other major markets. These consolidations have produced large, sophisticated customers with increased buying power who are more capable of operating with reduced inventories, opposing price increases, and demanding lower pricing, increased promotional programs and specifically tailored products. These customers also may use shelf space currently used for our products for their own private label products. If we fail to respond to these trends, our volume growth could slow or we may need to lower prices or increase promotional spending for our products, any of which would adversely affect our financial results.

We are dependent on certain key members of our management.

Our operations, particularly in connection with the implementation of our strategies and the development of our operations, depend on certain key members of our management. If any of these key management personnel leaves us, our results of operations and our financial condition may be adversely affected.

Our debt could adversely affect our business.

On April 27, 2009, our wholly owned subsidiaries JBS USA, LLC and JBS USA Finance, Inc. issued $700.0 million in senior unsecured notes due May 2014 bearing interest at 11.625%. As of March 29, 2009, after giving effect to our issuance and sale of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom, we have total outstanding consolidated debt on our balance sheet of approximately $1.0 billion.

While our level of indebtedness is lower than certain of our competitors, our consolidated debt could:

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make it difficult for us to satisfy our respective obligations;

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limit our ability to obtain additional financing to operate our business;

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require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing our ability to use our cash flow to fund working capital, capital expenditures and other general corporate requirements;

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limit our flexibility to plan for and react to changes in our business and the industry in which we operate;

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place us at a competitive disadvantage relative to some of our competitors that have less debt than us; and

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increase our vulnerability to general adverse economic and industry conditions, including changes in interest rates, lower cattle and hog prices or a downturn in our business or the economy.

In addition to our existing debt, we are not prohibited from incurring significantly more debt, which could intensify the risks described above. The terms of the indenture governing our

11.625% senior unsecured notes due 2014 permit us to incur significant additional indebtedness in the future, including secured debt. We may borrow additional funds to fund our capital expenditures, working capital needs or other purposes, including future acquisitions.

Risks related to our common stock and this offering

We are controlled by JBS S.A., which is a publicly traded company in Brazil, whose interest in our business may be different than yours.

We are a wholly owned indirect subsidiary of JBS S.A., a publicly traded company in Brazil. JBS S.A. will indirectly own approximately % of our outstanding common stock after the consummation of this offering (or % if the international underwriters exercise their over-allotment in full). The Batista family indirectly owns and controls approximately 50.1% of the voting equity capital of JBS S.A. Prior to this offering, all of our directors and our president and chief executive officer were members of the Batista family. Members of the Batista family are also officers of JBS S.A. Accordingly, JBS S.A. is, and will continue to be, able to exercise significant influence over our business policies and affairs, including the composition of our board of directors, which has the authority to direct our business and appoint and remove our officers, and over any action requiring the approval of our stockholders, including the adoption of amendments to our certificate of incorporation and bylaws, which govern the rights attached to our shares of common stock, and the approval of mergers or sales of substantially all of our assets.

JBS S.A. and its subsidiaries comprise the largest exporter of canned beef in the world. With respect to business opportunities relating to customers or markets which would otherwise be available to both us and JBS S.A.’s other subsidiaries, JBS S.A. may not permit us to pursue those opportunities or JBS S.A.’s other subsidiaries may directly compete with us for those opportunities. For example, in January 2007, JBS S.A. acquired SB Holdings and its subsidiaries, which comprise one of the largest distributors of processed beef in the United States. This acquisition provided JBS S.A. (and not us) with access to the processed beef market in the United States through two distribution centers located in Fort Lauderdale, Florida and Newport Beach, California. JBS S.A. is a public company in Brazil, and therefore, its directors have their own independent fiduciary duties and their interests may conflict or compete with those of our company.

The concentration of ownership of our shares may also delay, defer or even prevent an acquisition by a third party or other change of control of our company in a transaction that might otherwise give you the opportunity to realize a premium over the then-prevailing market price of our common stock, even if you perceive such transaction to be in the best interests of minority stockholders. This concentration of ownership may also adversely affect our stock price. For additional information regarding the share ownership of, and our relationship with, JBS S.A., you should read the information under the headings “Business—Description of business segments—Beef segment—Global exports,” “Principal and selling stockholder” and “Certain relationships and related party transactions.”

Our directors who have relationships with our controlling stockholder may have conflicts of interest with respect to matters involving our company.

Upon completion of this offering, the majority of our directors will be affiliated with JBS S.A. These persons will have fiduciary duties to both us and JBS S.A. As a result, they may have real or apparent conflicts of interest on matters affecting both us and JBS S.A., which in some

circumstances may have interests adverse to ours. It may also limit the ability of these directors to participate in consideration of certain matters. In addition, as a result of JBS S.A.’s ownership interest, conflicts of interest could arise with respect to transactions involving business dealings between us and JBS S.A. including, but not limited to, potential acquisitions of businesses or properties, the issuance of additional securities, the payment of dividends by us and other matters.

We will be a “controlled company” within the meaning of the NYSE rules, and, as a result, will rely on exemptions from certain corporate governance requirements that provide protection to stockholders of other companies.

Upon completion of this offering, JBS S.A. will own more than 50% of the total voting power of our common shares and we will be a “controlled company” under the New York Stock Exchange, or NYSE, corporate governance standards. As a controlled company, exemptions under the NYSE standards will free us from the obligation to comply with certain NYSE corporate governance requirements, including the requirements:

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that a majority of our board of directors consists of “independent directors,” as defined under the rules of the NYSE;

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that we have a corporate governance and nominating committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

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that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

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for an annual performance evaluation of the nominating and governance committee and compensation committee.

Accordingly, for so long as we are a “controlled company,” you will not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.

There has been no prior public market for our common stock and the trading price of our common stock may be adversely affected if an active trading market in our common stock does not develop.

Prior to this offering, there has been no public market for our common stock, and an active trading market may not develop or be sustained upon the completion of this offering. We cannot predict the extent to which investor interest will lead to the development of an active trading market in shares of our common stock or whether such a market will be sustained. The initial public offering price of the common stock offered in this prospectus was determined through our negotiations with the underwriters and may not be indicative of the market price of the common stock after this offering. The market price of shares of our common stock may decline below the initial public offering price, and you may not be able to sell your shares of common stock at or above the initial public offering price, or at all.

Our stock price may be volatile, and you may be unable to resell your shares at or above the offering price or at all.

The market price of our common stock after this offering will be subject to significant fluctuations in response to, among other factors, variations in our operating results and market

conditions specific to our industry. The combination of the relatively limited number of locations that we operate and the significant investment associated with each new unit may cause our operating results to fluctuate significantly, which could add to the volatility of our stock price. Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. Future market fluctuations may negatively affect the market price of our common stock.

Future sales of shares of our common stock in the public market could cause our stock price to fall significantly even if our business is profitable.

Upon the completion of this offering, we will have outstanding shares of common stock (or approximately shares if the international underwriters exercise their over-allotment option in full). Of these shares, the shares of common stock offered in this prospectus will be freely tradable without restriction in the public market, unless purchased by our affiliates. We expect that the remaining shares of common stock will become available for resale in the public market as shown in the chart below. Our officers, directors and the holders of all of our outstanding shares of common stock will sign lock-up agreements pursuant to which they have agreed not to sell, transfer or otherwise dispose of any of their shares for a period of 180 days following the date of this prospectus, subject to extension in the case of an earnings release or material news or a material event relating to us. The underwriters may, in their sole discretion and without notice, release all or any portion of the common stock subject to lock-up agreements. The underwriters are entitled to waive the underwriter lock-up provisions at their discretion prior to the expiration dates of such lock-up agreements.

Immediately following the consummation of this offering, our shares of common stock will become available for resale in the public market as follows:


Number of shares	Percentage	Date of availability for resale into the public market

	%	Upon the effectiveness of this prospectus

	%	180 days after the date of this prospectus, of which approximately shares of our common stock are subject to holding period, volume and other restrictions under Rule 144

As restrictions on resale end, the market price of our common stock could drop significantly if the holders of these restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our common stock or other securities. Following the completion of this offering, we intend to file a registration statement on Form S-8 to register the total number of common stock reserved for issuance under our stock option plan.

Actual dividends paid on our shares may not be consistent with the dividend policy adopted by our board of directors.

company, JBS S.A., is required to pay dividends equal to 25% of its net income (as calculated under generally accepted accounting principles in Brazil, subject to certain adjustments mandated by Brazilian corporate law and other exceptions). However, our board of directors may, in its discretion and for any reason, amend or repeal this dividend policy. Our board of directors may increase or decrease the level of dividends provided for in our dividend policy or entirely discontinue the payment of dividends. Future dividends with respect to our common shares, if any, will depend on, among other things, our results of operations, cash requirements, financial condition, distribution of dividends made by our subsidiaries, contractual restrictions, business opportunities, provisions of applicable law and other factors that our board of directors may deem relevant. For the foregoing reasons, you will not be able to rely on dividends to receive a return on your investment. In addition, to the extent that we pay dividends, the amounts distributed to our shareholders may not be available to us to fund future growth and may affect our other liquidity needs.

You will incur immediate and substantial dilution.

The initial public offering price of our common stock is substantially higher than the net tangible book values per share of outstanding common stock prior to completion of the offering. Based on our net tangible book value as of March 29, 2009 and upon the issuance and sale of shares of common stock by us at an assumed initial public offering price of $ per share (the midpoint of the initial public offering price range indicated on the cover of this prospectus), if you purchase our common stock in this offering, you will pay more for your shares than the amounts paid by our existing stockholders for their shares and you will suffer immediate dilution of approximately $ per share in net tangible book value. We also intend to implement a stock option plan that will grant options to our executive officers to purchase common stock with exercise prices that may be below the estimated initial public offering price of our common stock. To the extent that these options are granted and exercised, you will experience further dilution.

We will have broad discretion in applying the net proceeds of this offering and we may not use those proceeds in ways that will ultimately enhance the market value of our common stock.

We have broad discretion in applying any net proceeds we will receive in this offering. As part of your investment decision, you will not be able to assess or direct how we apply these net proceeds. If we do not apply these funds effectively, we may lose significant business opportunities. Furthermore, our stock price could decline if the market does not view our use of the net proceeds from this offering favorably. A significant portion of the offering is by selling stockholders, and we will not receive proceeds from the sale of the shares offered by them.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law may discourage, delay or prevent a change of control of our company or changes in our management.

Our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law will contain provisions that could act to discourage, delay or prevent a change of control of our company or changes in our management. These provisions:

•

authorize the issuance of “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt;

•

provide for a classified board of directors (three classes);

•

provide that stockholders may only remove directors for cause;

•

provide that any vacancy on our board of directors, including a vacancy resulting from an increase in the size of the board, may only be filled by the affirmative vote of a majority of our directors then in office, even if less than a quorum;

•

provide that a special meeting of stockholders may only be called by our board of directors or by the chairman of the board of directors;

•

provide that action by written consent of the stockholders may be taken only if JBS S.A. and any of its subsidiaries own at least 50% of our outstanding shares of common stock;

•

limit the liability of, and provide indemnification to, our directors and officers;

•

limit the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting; and

•

provide that the board of directors is expressly authorized to make, alter or repeal our bylaws.

Additionally, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.

These provisions may act to prevent a change of control, a change in our management or other actions, including actions that our stockholders may deem advantageous. These provisions may also have a negative effect on the trading price of our stock.

Special note regarding forward-looking statements and industry data

All statements included in this prospectus, other than statements of historical fact, that address, activities, events or developments that we or our management expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements represent our reasonable judgment on the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “project,” “forecast,” “plan,” “may,” “will,” “should,” “could,” “expect” and other words of similar meaning. In particular, these include, but are not limited to, statements of our current views and estimates of future economic circumstances, industry conditions in domestic and international markets and our performance and financial results. These forward-looking statements are subject to a number of factors and uncertainties that could cause the actual results and experiences of us to differ materially from the anticipated results and expectations expressed in such forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the factors that may cause actual results and experiences to differ from the anticipated results and expectations expressed in such forward-looking statements are the following:

•

outbreaks of livestock disease, or product contamination or recall concerns;

•

fluctuations in live cattle and hog prices;

•

fluctuations in the selling prices of beef and pork products;

•

developments in, or changes to, the laws, regulations and governmental policies governing our business and products or failure to comply with them, including environmental and sanitary liabilities;

•

currency exchange rate fluctuations, trade barriers, exchange controls, political risk and other risks associated with export and foreign operations;

•

deterioration of economic conditions;

•

our strategic direction and future operation;

•

our ability to implement our business plan, including our ability to arrange financing when required and on reasonable terms and the implementation of our financing strategy and capital expenditure plan;

•

our acquisitions, joint ventures, strategic alliances or divestiture plans;

•

the competitive nature of the industry in which we operate and the consolidation of our customers;

•

customer demands and preferences;

•

adverse weather conditions in our areas of operations;

•

continued access to a stable workforce and favorable labor relations with employees;

•

consolidation of our customers;

•

our dependence on key members of our management;

•

interests of our controlling shareholders;

•

the declaration or payment of dividends or interest attributable to shareholders’ equity;

•

the risk factors discussed under the heading “Risk factors”;

•

other factors or trends affecting our financial conditions or results of operations; and

•

other statements contained in this prospectus regarding matters that are not historical facts.

Any or all of our forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors, many of which are beyond our control, including those set forth under “Risk factors.”

In addition, there may be other factors that could cause our actual results to be materially different from the results referenced in the forward-looking statements. Many of these factors will be important in determining our actual future results. Consequently, no forward-looking statement can be guaranteed. Our actual future results may vary materially from those expressed or implied in any forward-looking statements.

All forward-looking statements contained in this prospectus are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date they are made.

Basis of presentation

Industry data

Certain market and industry data included in this prospectus have been obtained from third-party sources that we believe to be reliable, such as the United States Department of Agriculture, or USDA, Meat and Livestock Australia Limited, and the U.S. Meat Export Federation. We have not independently verified such third-party information and cannot assure you of its accuracy or completeness. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed above and in “Risk factors.”

Certain definitions

References in this prospectus to “$” or “U.S.$” are to U.S. dollars. References in this prospectus to “A$” are to Australian dollars.

Brands

Swift, Swift Premium, Swift Angus Select, Swift Premium Black Angus, Miller Blue Ribbon Beef and G.F. Swift 1855 are brands that belong to us. This prospectus also includes trademarks, trade names and trade dress of other companies. Use or display by us of other parties’ trademarks, trade names or trade dress or products is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, the trademark, trade name or trade dress owners. Solely for the convenience of the reader, in some cases we refer to our brands in this prospectus without the ^® symbol, but these references are not intended to indicate in any way that we will not assert our rights to these brands to the fullest extent permitted by law.

Rounding

Certain figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Use of proceeds

We estimate that the net proceeds from our sale of shares of common stock in this offering at an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the front cover of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses, will be approximately $ million. A $1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) the net proceeds to us from this offering by $ million, assuming the number of shares offered by us, as set forth on the front cover of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions.

We intend to use a portion of our net proceeds from this offering to selectively pursue additional value-enhancing growth opportunities as they arise. For example, during the next five years, we intend to make substantial investments in order to significantly expand our direct distribution network. We also intend to use a portion of our net proceeds from this offering for working capital and general corporate purposes. However, our management will have broad discretion in the application of these proceeds and investors will be relying on the judgment of our management regarding their application. Pending their use, we plan to invest our net proceeds from this offering in short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

We will not receive any proceeds from the sale of our common stock by the selling stockholder, including any proceeds resulting from the underwriters’ exercise of their option to purchase additional shares from the selling stockholder.

Dividend policy

Our board of directors will adopt a dividend policy pursuant to which any future determination relating to dividend policy will be made at its discretion and will depend on a number of factors, including our business and financial condition, and any covenants under our debt agreements and our parent company’s legal obligation to distribute dividends described below. However, our board of directors may, in its discretion and for any reason, amend or repeal this dividend policy. Our board of directors may increase or decrease the level of dividends provided for in our dividend policy or entirely discontinue the payment of dividends. Future dividends with respect to our common shares, if any, will depend on, among other things, our results of operations, cash requirements, financial condition, distribution of dividends made by our subsidiaries, contractual restrictions, business opportunities, provisions of applicable law and other factors that our board of directors may deem relevant.

Capitalization

The following table sets forth our consolidated cash and cash equivalents and capitalization as of March 29, 2009 on:

•

an actual basis;

•

a pro forma basis to give effect to the offering and sale of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom as if it had occurred on March 29, 2009; and

•

a pro forma as adjusted basis to give effect to

(1)

the issuance and sale of shares of our common stock sold by us in this offering and our receipt of approximately $ million in net proceeds from such sale, based on an assumed public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting the underwriting discount and estimated offering expenses payable by us, and

(2)

a -for-one stock split to take place immediately prior to completion of this offering.

The information below is illustrative only, and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this table together with “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements and the related notes appearing elsewhere in this prospectus.


(in thousands, except shares data)	As of March 29, 2009
(in thousands, except shares data)	Actual			Pro forma			Pro forma as adjusted

Cash and cash equivalents	$	156,737		$	154,322		$

Indebtedness:

Short-term:
Secured credit facility	$	36,828		$	36,828		$	36,828
Unsecured credit facility		34,600			34,600			34,600

Total short-term debt:		71,428			71,428			71,428

Current portion of long-term debt:
Installment note payable		1,008			1,008			1,008
Capital lease obligations		3,095			3,095			3,095

Total current portion of long-term debt:		4,103			4,103			4,103


Long-term:
Intercompany loans		658,597			139,000			139,000
Senior secured revolving credit facility		210,187			110,187			110,187
Capital lease obligations		22,940			22,940			22,940
11.625% senior unsecured notes due 2014		—			651,322			651,322
Installment note payable		9,793			9,793			9,793

Total long-term debt:		901,517			933,242			933,242

Total debt:	$	977,048		$	1,008,773		$	1,008,773

Stockholders’ equity:
Common stock, $0.01 par value per share (actual, authorized 500,000,000 shares, 100 shares issued and outstanding; pro forma, authorized 500,000,000 shares, 100 shares issued and outstanding; pro forma as adjusted, authorized shares, shares issued and outstanding)	$	—		$	—		$
Paid-in capital		1,400,159			1,400,159
Accumulated comprehensive income (loss)		(56,984	)		(56,984	)
Retained earnings		51,764			51,764
Total stockholders’ equity		1,394,939			1,394,939

Total capitalization (long-term debt plus stockholders’ equity)	$	2,296,456		$	2,328,181		$

A $1.00 decrease or increase in the initial public offering price would result in an approximately $ million decrease or increase in each of pro forma as adjusted total stockholders’ equity and total capitalization. The above table does not reflect shares of common stock reserved for future issuance under our stock option plan.

Dilution

If you invest in our common stock, you will be diluted to the extent the initial public offering price per share of our common stock exceeds the net tangible book value per share of our common stock immediately after this offering.

Our net tangible book value as of March 29, 2009 was approximately $ million, or $ per share of common stock. Net tangible book value per share presented below represents the amount of our tangible net worth, or total tangible assets less total liabilities as of March 29, 2009, divided by the number of shares of our common stock outstanding immediately prior to completion of this offering after giving effect to a -for-one stock split of our common stock that will occur immediately prior to consummation of this offering.

After giving effect to the issuance and sale of shares of our common stock sold by us in this offering and our receipt of approximately $ million in net proceeds from such sale, based on an assumed public offering price of $ per share, the midpoint of the range set forth on the cover page of this prospectus, after deducting the underwriting discount and estimated offering expenses payable by us, our as adjusted net tangible book value per share as of March 29, 2009 would have been approximately $ million, or $ per share. This amount represents an immediate increase in net tangible book value of $ to existing stockholders and an immediate dilution in net tangible book value of $ per share to new investors purchasing shares of our common stock in this offering. Dilution per share is determined by subtracting the net tangible book value per share as adjusted for this offering from the amount of cash paid by a new investor for a share of our common stock. Net tangible book value is not affected by the sale of shares of our common stock offered by the selling stockholder.

The following table illustrates the per share dilution:


		Per share


Assumed initial public offering price per share		$

Net tangible book value per share as of March 29, 2009	$

Increase in net tangible book value per share attributable to existing investors	$

Adjusted net tangible book value per share after this offering		$

Dilution per share to new investors		$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) our net tangible book value by $ , the net tangible book value per share after this offering by $ and the dilution per share to new investors by $ , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The foregoing discussion and table do not give effect to shares of common stock that we will issue if the international underwriters exercise their over-allotment option in full. If the underwriters exercise their option to purchase additional shares of common stock in full, the as adjusted net tangible book value per share as of March 29, 2009 would be approximately $ per share and the dilution per share to new investors would be $ per share.

The following table summarizes, as of March 29, 2009, the number of shares of our common stock we issued and sold, the total consideration we received and the average price per share paid to us by existing stockholders prior to this offering, and by new investors purchasing shares of common stock in this offering. The table assumes an initial public offering price of $ per share (the midpoint of the price range set forth on the cover page of this prospectus):


	Shares purchased		Total consideration		Average price per share
	Number	Percent	Number	Percent	Average price per share

Existing stockholders		%		%	$
New investors in this offering		%		%	$

Total		100.0%		100.0%	$

The number of shares of our common stock held by new investors will increase to , or approximately % of the total number of shares of our common stock outstanding after this offering, and the number of shares held by the selling stockholder, will decrease to shares, or approximately % of the total number of shares of our common stock outstanding after this offering. If the international underwriters exercise their over-allotment option to purchase additional shares of common stock in full, the number of shares of our common stock held by new investors will increase to , or approximately $ per share and the dilution per share to new investors would be $ per share.

In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities could result in further dilution to our stockholders.

Selected historical consolidated financial data

The following tables set forth our selected historical consolidated financial data at the dates and for the periods indicated. Our selected historical consolidated financial information contained in this prospectus is derived from

(1)

our predecessor’s unaudited historical consolidated financial statements as of and for the fiscal years ended May 30, 2004, May 29, 2005 and May 28, 2006,

(2)

our predecessor’s audited historical consolidated financial statements as of and for

(a)

the fiscal year ended December 24, 2006, and

(b)

the 198 days from December 25, 2006 through July 10, 2007 (the date immediately preceding the Swift Acquisition),

(3)

our audited historical consolidated financial statements as of and for

(a)

the 173 days from July 11, 2007 through December 30, 2007, and

(b)

the fiscal year ended December 28, 2008,

(4)

our unaudited historical consolidated financial statement for the fiscal quarter ended March 30, 2008, and

(5)

our unaudited historical financial statements as of and for the fiscal quarter ended March 29, 2009.

The financial statements in (1) and (4) were reviewed by Grant Thornton LLP, and the financial statements in (2)(a) and (b) and (3)(a) were audited by Grant Thornton LLP. The financial statements in (3)(b) were audited by BDO Seidman, LLP. The financial statements in (5) were reviewed by BDO Seidman, LLP.

The financial statements in (2), (3) and (5) above are included elsewhere in this prospectus and have been prepared in accordance with generally accepted accounting principles in the United States. Our current fiscal year is based on the 52- or 53-week period ending on the last Sunday in December. Our predecessor company’s fiscal year was based on the 52- or 53-week period ending on the last Sunday in May. The Swift Acquisition closed on July 11, 2007, and the financial statements for the 198 days from December 25, 2006 to July 10, 2007 represent the period between the end of the fiscal year ended December 24, 2006 and the day prior to the closing of the Swift Acquisition. The periods ended prior to July 11, 2007 are referred to as the “predecessor” periods. The financial statements for the 173-day period from July 11, 2007 through December 30, 2007 represent the period from the date of the Swift Acquisition through December 30, 2007. The periods ended subsequent to July 10, 2007 are referred to as the “successor” periods.

The results of operations for any partial period are not necessarily indicative of the results of operations for other periods or for the full fiscal year. We have prepared our unaudited historical consolidated financial statements on the same basis as our audited financial statements and have included all adjustments, consisting of normal and recurring adjustments, that we consider necessary to present fairly our financial position and results of operations for the unaudited periods.

On May 26, 2006, we completed the sale of our non-fed cattle business, including our operating plant assets in Omaha, Nebraska and our idled Nampa, Idaho assets. Due to our significant continuing involvement with the non-fed processing facilities through a raw material supply agreement, the operating results related to these plants have been reflected in our continuing operations through the fiscal year ended December 24, 2006.

Our consolidated results of operations for the 198-day period ended July 10, 2007 and the 173-day period ended December 30, 2007 are not fully comparable to our results for the fiscal year ended December 24, 2006 due to the change in cost basis and recapitalization that occurred on July 11, 2007.

Our consolidated results of operations for the fiscal year ended December 28, 2008 are not fully comparable to our results of operations for the combined 198-day period ended July 10, 2007 and the 173-day period ended December 30, 2007 due to the (1) change in cost basis and recapitalization that occurred on July 11, 2007, (2) Tasman Acquisition that closed on May 2, 2008 and (3) JBS Packerland Acquisition that closed on October 23, 2008.

Our consolidated results of operations for the fiscal quarter ended March 29, 2009 are not fully comparable to our results of operations for the fiscal quarter ended March 30, 2008 due to the (1) Tasman Acquisition that closed on May 2, 2008 and (2) JBS Packerland Acquisition that closed on October 23, 2008.

You should read the selected historical consolidated financial data set forth below in conjunction with, and the data is qualified by reference to, “Unaudited pro forma combined financial statements,” “Management’s discussion and analysis of financial condition and results of operations” and the consolidated financial statements and accompanying notes thereto included elsewhere in this prospectus (other than our predecessor’s unaudited historical consolidated financial statements as of and for the fiscal years ended May 30, 2004, May 29, 2005 and May 28, 2006, which are not included elsewhere in this prospectus).


	Predecessor
	Fiscal year ended
	May 30, 2004		May 29, 2005		May 28, 2006
in thousands	Unaudited		Unaudited		Unaudited

Statement of operations data:
Net sales	$9,427,235		$9,664,249		$9,348,151
Cost of goods sold	9,165,466		9,452,638		9,267,142

Gross profit	261,769		211,611		81,009
Selling, general and administrative	134,016		146,830		166,172
Goodwill impairment	—		11,869		4,488
Foreign currency transaction loss (gain)	824		(396	)	19
Other income, net	(9,776	)	(5,884	)	(3,357	)
Loss on sales of property, plant and equipment	851		1,031		662
Interest expense, net	91,802		100,237		112,264

Total expenses	217,717		253,687		280,248

Income (loss) from continuing operations before income taxes	44,052		(42,076	)	(199,239	)
Income tax expense (benefit)	14,965		(31,645	)	(57,736	)
Equity method investment earnings (losses)	(6,592	)	4,247		—
Income from discontinued operations	3,672		27,852		—

Net income (loss)	$26,167		$21,668		$(141,503	)

Balance sheet data (at period end):
Cash and cash equivalents	$136,195		$79,712		$52,291
Accounts receivable, net	329,944		373,167		366,744
Inventories	480,679		499,039		503,426
Property, plant and equipment, net	602,416		562,454		504,271
Total assets	1,784,833		1,709,481		1,604,928
Long-term debt	787,428		946,496		1,102,717
Total debt	791,667		997,978		1,104,519
Stockholder’s equity (deficit)	411,659		124,137		(20,029	)


	Predecessor				Successor
in thousands, except earnings per share	Fiscal year ended December 24, 2006		198 days from December 25, 2006 through July 10, 2007		173 days from July 11, 2007 through December 30, 2007		Fiscal year ended December 28, 2008		Fiscal quarter ended March 30, 2008		Fiscal quarter ended March 29, 2009
in thousands, except earnings per share	Audited		Audited		Audited		Audited		Unaudited		Unaudited


Statement of operations data:
Net sales	$9,691,432		$4,970,624		$4,988,984		$12,362,281		$2,461,657		$3,196,339
Cost of goods sold	9,574,715		4,920,594		5,013,084		11,917,777		2,451,413		3,123,358

Gross profit (loss)	116,717		50,030		(24,100	)	444,504		10,244		72,981
Selling, general and administrative expenses(1)	158,783		92,333		60,727		148,785		31,042		61,598
Foreign currency transaction loss (gain)(2)	(463	)	(527	)	(5,201	)	75,995		(12,614	)	(5,075	)
Other income, net	(4,937	)	(3,821	)	(3,581	)	(10,107	)	(3,782	)	(1,475	)
Loss (gain) on sales of property, plant and equipment	(666	)	(2,946	)	182		1,082		19		180
Interest expense, net	118,754		66,383		34,340		36,358		8,108		14,592

Total expenses	271,471		151,422		86,467		252,113		22,773		69,820

Income (loss) before income tax expense	(154,754	)	(101,392	)	(110,567	)	192,391		(12,529	)	3,161
Income tax expense (benefit)	(37,348	)	(18,380	)	1,025		31,287		5,613		909

Net income (loss)	$(117,406	)	$(83,012	)	$(111,592	)	$161,104		$(18,142	)	$2,252

Basic and diluted net income (loss) per share of common stock(3)	N/A		N/A		$(1,115,920.00	)	$1,611,040.00		$(181,420.00	)	$22,520.00
Basic and diluted pro forma net income (loss) per share of common stock(4)	N/A		N/A		$		$		$		$

Balance sheet data (at period end):
Cash and cash equivalents	$83,420		$44,673		$198,883		$254,785		$77,365		$156,737
Accounts receivable, net	334,341		365,642		417,375		588,985		438,515		514,160
Inventories	457,829		487,598		466,756		649,000		541,519		650,026
Property, plant and equipment, net	487,427		505,172		708,056		1,229,316		716,334		1,241,055
Total assets	1,538,597		1,578,350		2,165,815		3,315,571		2,125,696		3,308,815
Long-term debt	1,065,553		1,201,975		32,433		806,808		32,347		901,517
Total debt	1,067,503		1,203,912		810,718		878,319		395,154		977,048
Stockholder’s equity (deficit)	(40,090	)	(98,818	)	838,818		1,388,250		1,281,075		1,394,939

(1)

(2)

Foreign currency transaction loss (gain) reflects changes in the value of our U.S. dollar-denominated intercompany note payable and receivable within Australia due to changes in the exchange rate between the U.S. dollar and the Australian dollar.

(3)

(4)

In calculating shares of our common stock outstanding, we give retroactive effect to the stock split to occur immediately prior to completion of this offering.

Unaudited pro forma combined financial statements

On October 23, 2008, we acquired Smithfield Beef Group, Inc. (now known as JBS Packerland) for $563.2 million in cash (including $26.1 million of transaction related costs). This acquisition included 100% of Five Rivers, which had been previously held by Smithfield Beef Group, Inc. in a 50/50 joint venture with Continental Grain Company.

On April 27, 2009, our wholly owned subsidiaries, JBS USA, LLC and JBS USA Finance, Inc., issued 11.625% senior unsecured notes due 2014 in an aggregate principal amount of $700 million and applied the net proceeds to repay $100.0 million of borrowings under our secured revolving credit facility and to repay $550.8 million of the outstanding principal and accrued interest on intercompany loans to us from a subsidiary of JBS S.A.

The following unaudited pro forma combined statement of operations for the fiscal year ended December 28, 2008 has been prepared as if

•

the issuance and sale of $560.9 million of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom,

•

the JBS Packerland Acquisition, and

•

the acquisition of 50% of the equity interest in Five Rivers not previously owned had occurred at the beginning of the period presented.

The unaudited pro forma combined statement of operations for the fiscal year ended December 28, 2008 is derived from

•

our audited historical consolidated financial statements for the fiscal year ended December 28, 2008,

•

unaudited historical financial information of Smithfield Beef Group, Inc. for the period from January 1, 2008 through October 22, 2008, and

•

unaudited historical financial information of Five Rivers for the period from January 1, 2008 through October 22, 2008.

The following unaudited pro forma combined statement of operations for the fiscal quarter ended March 29, 2009 has been prepared as if the issuance and sale of $560.9 million of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom had occurred as of December 30, 2007, and the unaudited pro forma combined balance sheet as of March 29, 2009 has been prepared as if the sale of all of the 11.625% senior unsecured notes due 2014 had occurred on March 29, 2009. The unaudited pro forma combined financial statements as of and for the fiscal quarter ended March 29, 2009 are derived from our unaudited historical consolidated financial statements for the fiscal quarter ended March 29, 2009.

The unaudited pro forma combined financial statements set forth herein reflect certain adjustments for:

•

the 50% equity ownership in Five Rivers owned by Smithfield Beef Group, Inc. prior to October 22, 2008 to avoid double counting such equity ownership since the historical financial statements of JBS USA Holdings, Inc. reflect such ownership under the equity method of accounting, but, on a pro forma basis, we have reflected the ownership of Five Rivers on a fully consolidated basis,

•

expenses incurred by Smithfield Foods, Inc. in anticipation of the sale of the Smithfield Beef Group, Inc. to JBS USA, LLC,

•

revenue and expenses associated with Five Rivers company owned cattle during the period January 1 through October 22, 2008, since subsequent to that date, Five Rivers does not own cattle but operates solely as a hotelling operation for other entities’ cattle,

•

revenue and expenses of cattle owned by Smithfield Beef Group, Inc. during the period January 1 through October 22, 2008, since subsequent to that date, JBS Packerland does not own cattle, and

•

other assets and insignificant businesses not acquired and liabilities not assumed.

The unaudited pro forma combined financial statements reflect pro forma adjustments that are described above and in the accompanying notes and are based on available information and certain assumptions that we believe are reasonable under the circumstances, and the actual results could differ materially from these anticipated results. In our opinion, all adjustments that are necessary to present fairly the unaudited pro forma consolidated data have been made. The unaudited pro forma combined financial statements are presented for informational purposes only and do not purport to be indicative of what would have occurred had the JBS Packerland Acquisition actually been consummated at the beginning of the period presented, nor are they necessarily indicative of our future consolidated operating results.

You should read the following unaudited pro forma combined financial statements in conjunction with, and the data is qualified by reference to, “Management’s discussion and analysis of financial condition and results of operations” and the financial statements and accompanying notes included elsewhere in this prospectus.

Unaudited pro forma combined statement of operations for the fiscal year ended December 28, 2008


	JBS USA Holdings, Inc.		JBS Packerland		JBS Packerland		JBS Packerland		Five Rivers		Five Rivers		Adjustment for transaction			JBS USA Holdings, Inc.
	Fiscal year ended December 28, 2008		December 31, 2007 through October 22, 2008 (a)(i)		Adjustment for 50% equity interest in Five Rivers (b)		Adjustment for assets not acquired (c)(i)		December 31, 2007 through October 22, 2008 (a)(ii)		Adjustment for assets not acquired (c)(ii)		Adjustment for transaction			Fiscal year ended December 28, 2008
	Historical		Historical						Historical						Notes	Pro forma

in thousands, except earnings per share	(+)		(+)		(-)		(-)		(+)		(-)		(+)

Net sales	$12,362,281		$2,548,224		—		$4,923		$1,461,140		$912,920		$(8,011	)	(d)	$15,445,791
Cost of goods sold	11,917,777		2,397,551		—		4,949		1,511,462		988,814		4,724		(d),(e)	14,837,751

Gross profit (loss)	444,504		150,673		—		(26	)	(50,322	)	(75,894	)	(12,735	)		608,040
Selling, general and administrative expenses	148,785		78,793		—		24,017		11,093		9		4,052		(e)	218,697
Foreign currency transaction losses	75,995		—		—		—		—		—		—			75,995
Other (income) expense	(10,107	)	44,465		39,139		5,555		(208	)	(74	)	—			(10,470	)
Loss on sales of property, plant and equipment	1,082		107		—		—		131		224		—			1,096
Interest expense, net	36,358		30,837		—		31,005		16,940		16,940		46,431		(f)	82,621

Total expenses, net	252,113		154,202		39,139		60,577		27,956		17,099		50,483			367,939

Income (loss) from continuing operations before	192,391		(3,529	)	(39,139	)	(60,603	)	(78,278	)	(92,993	)	(63,218	)		240,101
Income tax expense	31,287		2,222		—		2,222		—		—		16,699		(g)	47,986

Net income (loss)	$161,104		$(5,751	)	$(39,139	)	$(62,825	)	$(78,278	)	$(92,993	)	$(79,917	)		$192,115

Basic and diluted net income (loss) per share of common stock	$1,611,040.00															$1,921,150.00

(a)

Represents the historical results of

(i)

JBS Packerland, and

(ii)

Five Rivers

for the period from December 31, 2007 through October 22, 2008.

(b)

Represents the elimination of the 50% equity interest in Five Rivers from the historical results of JBS Packerland for the period December 31, 2007 through October 22, 2008. On a pro forma basis, the results of Five Rivers are reflected on a fully consolidated basis as part of the JBS Packerland Acquisition.

(c)

Reflects the elimination of assets not acquired for

(i)

JBS Packerland and

(ii)

Five Rivers.

The adjustment for assets not acquired includes (1) revenue and expenses associated with cattle owned by Smithfield Beef Group, Inc. that were retained by Smithfield Foods, Inc., (2) revenue and expenses associated with cattle owned by Five Rivers that were retained by Smithfield Foods, Inc., (3) the elimination of corporate overhead charge by Smithfield Foods, Inc. and (4) other assets and insignificant businesses not acquired and liabilities not assumed.

(d)

Reflects the elimination of $8.0 million of intercompany sales and $8.0 million of cost of goods sold between JBS Packerland and the legacy Swift Beef segment for the period from December 31, 2007 through October 22, 2008.

(e)

Represents the adjustment of $12.7 million to historical cost of goods sold and to selling, general and administrative expenses of $4.1 million to reflect depreciation and amortization expense based on the estimated fair values and useful lives of identified tangible and intangible assets for JBS Packerland and Five Rivers based on a preliminary third-party valuation report. The purchase price allocation is preliminary pending completion of independent valuations of identified tangible and intangible assets acquired and certain liabilities acquired, including, but not limited to deferred taxes. The allocation of the purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of October 23, 2008 (in thousands), and the following table details the purchase price components:



Purchase price allocation:
Purchase price paid to previous shareholders	$537,068
Fees and direct expenses	26,134

Total purchase price	$563,202


Preliminary purchase price allocation:
Current assets and liabilities	$ 43,052
Property, plant and equipment(i)	423,955
Deferred tax liabilities	(142,997	)
Goodwill	95,998
Intangible assets(ii)	138,023
Other noncurrent assets and liabilities, net	5,171

Total purchase price allocation	$563,202

(i)

Property, plant and equipment was recorded at fair value at the date of the JBS Packerland Acquisition. Depreciation and amortization is recorded using the straight-line method over the estimated useful lives of the assets as follows:



Furniture, fixtures, office equipment and other		5 to 7 years
Machinery and equipment		5 to 15 years
Buildings and improvements		15 to 40 years
Leasehold improvements		shorter of useful life or the lease term

(ii)

Intangible assets include customer relationships and customer contracts resulting from the JBS Packerland Acquisition that are being amortized on an accelerated basis over 21 and 10 years, respectively. These represent management’s estimates of the period of expected economic benefit and annual customer profitability.

(f)

Reflects the following adjustments to interest expense, net relating to the transactions:



Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$ 467
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)	7,802
Interest expense, 11.625% senior unsecured notes due 2014(iii)	65,209
Interest expense, intercompany debt(iv)	(27,047	)

Total Interest expense, net(v)	$46,431

(i)

Includes pro forma interest expense for the amortization of debt issuance costs on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through December 28, 2008, calculated on a straight-line basis.

(ii)

Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through December 28, 2008, calculated on a straight-line basis.

(iii)

Includes pro forma interest expense on $560.9 million ($519.6 million of proceeds plus $39.0 million of bond discount and $2.3 million of debt issuance cost) of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through December 28, 2008.

(iv)

Includes the reduction of pro forma interest expense for the period from December 31, 2007 through December 28, 2008 on our consolidated intercompany loans from JBS S.A. due to a $519.6 million reduction in the aggregate principal amount of those intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

(v)

We have applied the adjustments in clauses (i), (ii) and (iii) above to $560.9 million in proceeds, bond discount and debt issuance costs of our 11.625% senior unsecured notes due 2014 because that is the amount of debt we would have to have issued to repay the portion of our intercompany loans from JBS S.A. described in clause (iv) above. The total principal amount of our 11.625% senior secured notes due 2014 is $700.0 million, and our pro forma interest expense accordingly does not purport to be indicative of what our interest expense will be in the future.

(g)

Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

Unaudited pro forma combined statement of operations for the fiscal quarter ended March 29, 2009


	JBS USA Holdings, Inc.							JBS USA Holdings, Inc.
	March 29, 2009			Adjustments				March 29, 2009
in thousands, except earnings per share	Historical			(+)			Notes	Pro forma

Net sales	$	3,196,339		$	—			$	3,196,339
Cost of goods sold		3,123,358			—				3,123,358

Gross profit		72,981			—				72,981
Selling, general and administrative expenses		61,598			—				61,598
Foreign currency transaction gains		(5,075	)		—				(5,075	)
Other income, net		(1,475	)		—				(1,475	)
Loss on sales of property, plant and equipment		180			—				180
Interest expense, net		14,592			10,024		(a)		24,616

Total expenses		69,820			10,024				79,844

Income (loss) from continuing operations before income tax		3,161			(10,024	)			(6,863	)
Income tax expense (benefit)		909			(3,509	)	(b)		(2,600	)

Net income (loss)	$	2,252		$	(6,515	)		$	(4,263	)

Basic and diluted net income (loss) per share of common stock	$	22,250.00						$	(42,630.00	)

(a)

Reflects the following adjustments to interest expense, net relating to the transactions:


Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$	117
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)		1,950
Interest expense, 11.625% senior unsecured notes due 2014(iii)		16,302
Interest expense, intercompany debt(iv)		(8,345	)

Total interest expense, net(v)	$	10,024

(i)

Includes pro forma interest expense for the amortization of debt issuance costs on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 29, 2008 through March 29, 2009, calculated on a straight-line basis.

(ii)

Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period December 29, 2008 through March 29, 2009, calculated on a straight-line basis.

(iii)

Includes pro forma interest expense for the period December 29, 2008 through March 29, 2009 on $560.9 million ($519.6 million of proceeds plus $39.0 million of bond discount and $2.3 million of debt issuance cost) of our 11.625% senior unsecured notes due 2014.

(iv)

Includes the reduction of pro forma interest expense on our intercompany loans from JBS S.A. due to the $519.6 million reduction in the aggregate principal amount of those intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

(v)

(b)

Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

Unaudited pro forma combined balance sheet as of March 29, 2009


in thousands	JBS USA Holdings, Inc.
in thousands	Historical			Adjustments			Notes	Pro forma

Assets
Current assets:
Cash and cash equivalents	$	156,737		$	(2,415	)	(a)	$	154,322
Trade accounts receivable, net of allowance for doubtful accounts of $4,142		514,160			—				514,160
Inventories		650,026			—				650,026
Other current assets		77,555			—				77,555

Total current assets		1,398,478			(2,415	)			1,396,063
Property, plant, and equipment, net		1,241,055			—				1,241,055
Goodwill		149,093			—				149,093
Other intangibles, net		299,097			—				299,097
Other assets		221,092			2,915		(b)		224,007

Total assets	$	3,308,815		$	500			$	3,309,315

Liabilities and stockholder’s equity
Current liabilities:
Short-term debt	$	71,428			—			$	71,428
Current portion of long-term debt		4,103			—				4,103
Accounts payable, including book overdrafts		273,547			—				273,547
Accrued liabilities		303,691			(31,225	)	(c)		272,466

Total current liabilities		652,769			(31,225	)			621,544
Long-term debt, less current portion		901,517			31,725		(d)		933,242
Other non-current liabilities		359,590							359,590

Total liabilities		1,913,876			500				1,914,376


Stockholder’s equity:
Common stock, 500,000,000 shares authorized, 100 issued and outstanding		—			—				—
Additional paid-in capital		1,400,159			—				1,400,159
Retained earnings		51,764			—				51,764
Accumulated other comprehensive (loss)		(56,984	)		—				(56,984	)

Total stockholder’s equity		1,394,939			—				1,394,939

Total liabilities and stockholder’s equity	$	3,308,815		$	500			$	3,309,315

(a)

Reflects the pro forma use of cash which was used to pay a portion of the debt issuance costs which were not paid from the proceeds of the issuance of our 11.625% senior unsecured notes due 2014.

(b)

Reflects debt issuance costs of $2.9 million related to the issuance of our 11.625% senior unsecured notes due 2014. These debt issuance costs will be capitalized and amortized on a straight-line basis over a period of five years.

(c)

Reflects the reduction of accrued interest on our intercompany loans, a portion of which were repaid using the net proceeds of our 11.625% senior unsecured notes due 2014.

(d)

Reflects the principal amount of our 11.625% senior unsecured notes due 2014 reduced by (1) original issue discount on our 11.625% senior unsecured notes due 2014 of $48.7 million, (2) a $100.0 million reduction in outstanding borrowings under our senior secured revolving credit facility using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014, and (3) a $519.6 million reduction in the aggregate principal amount of our intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

Management’s discussion and analysis of financial condition and results of operations

Overview

JBS USA Holdings, Inc.

Our business operations are organized into two segments:

•

our Pork segment, through which we conduct our domestic pork and lamb processing business.

We also present “Corporate and other” in our financial statements, which include certain revenues and expenses not directly attributable to the primary segments, as well as eliminations resulting from the consolidation process.

•

on July 11, 2007, JBS S.A. acquired Swift Foods Company (our predecessor company, which was subsequently renamed JBS USA Holdings, Inc.), which we refer to as the Swift Acquisition;

•

on May 2, 2008, we acquired substantially all of the assets of the Tasman Group Services, Pty. Ltd., or the Tasman Group, which we refer to as the Tasman Acquisition; and

•

Critical accounting policies and estimates

The preparation of consolidated financial statements requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of certain accounting estimates we consider critical. See Note 5, “Basis of presentation and accounting policies,” to our audited combined financial statements included elsewhere in this prospectus for a detailed discussion of these and other accounting policies.

Contingent liabilities

From time to time we are subject to lawsuits, investigations and other claims related to wage and hour/labor, livestock procurement, securities, environmental, product, taxes and other matters, and are required to assess the likelihood of any adverse judgments or outcomes to these matters, as well as potential ranges of probable losses. A determination of the amount of reserves and disclosures required, if any, for these contingencies is made after considerable analysis of each individual issue. We accrue for contingent liabilities when an assessment of the risk of loss is probable and can be reasonably estimated. We disclose contingent liabilities when the risk of loss is reasonably possible or probable. Due to the unpredictable nature of these lawsuits, investigations, and claims, our contingent liabilities reflect uncertainties. The eventual outcome will result from future events, and determination of current reserves requires estimates and judgments related to future changes in facts and circumstances, differing interpretations of the law and assessments of the amount of damages, and the effectiveness of strategies or other factors beyond our control. We have not made any material changes in the accounting methodology used to establish our contingent liabilities during the past three fiscal years. We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our contingent liabilities. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to gains or losses that could be material.

Marketing and advertising costs

We incur advertising, retailer incentive and consumer incentive costs to promote products through marketing programs. These programs include cooperative advertising, volume discounts, in-store display incentives, coupons and other programs. Marketing and advertising costs are charged in the period incurred. We accrue costs based on the estimated performance, historical utilization and redemption of each program. Cash consideration given to customers is considered a reduction in the price of our products, and thus is recorded as a reduction to sales. The remainder of marketing and advertising costs is recorded as a selling, general and administrative expense. Recognition of the costs related to these programs contains uncertainties due to the judgment required to estimate the potential performance and redemption of each program. These estimates are based on many factors, including experience of similar promotional programs. We have not made any material changes in the accounting methodology used to

establish our marketing accruals during the past three fiscal years. We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our marketing accruals. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to gains or losses that could be material.

Accrued self-insurance

We are self-insured for employee medical and dental benefits and purchase insurance policies with deductibles for certain losses related to worker’s compensation and general liability claims. We purchase stop-loss coverage in order to limit our exposure to any significant level of certain claims. Self-insured losses are accrued based upon periodic assessments of estimated settlements for known and anticipated claims. We have not made any material changes in the accounting methodology used to establish our self-insurance liability during the past three fiscal years. We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate our self-insurance liability. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to gains or losses that could be material. A 10% increase in our estimated self-insurance liability at March 29, 2009 would increase the amount we recorded for our self-insurance liability by approximately $15.4 million.

Impairment of long-lived assets

Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Examples include a significant adverse change in the extent or manner in which we use a long-lived asset or a change in its physical condition. When evaluating long-lived assets for impairment, we compare the carrying value of the asset to the asset’s estimated undiscounted future cash flows. An impairment is indicated if the estimated future cash flows are less than the carrying value of the asset. The impairment is the excess of the carrying value over the fair value of the long-lived asset. Our impairment analysis contains uncertainties due to judgment in assumptions and estimates surrounding undiscounted future cash flows of the long-lived asset, including forecasting useful lives of assets and selecting the discount rate that reflects the risk inherent in future cash flows to determine fair value. We have not made any material changes in the accounting methodology used to evaluate the impairment of long-lived assets during the last three fiscal years. We do not believe there is a reasonable likelihood there will be a material change in the estimates or assumptions used to calculate impairments of long-lived assets. However, if actual results are not consistent with our estimates and assumptions used to calculate estimated future cash flows, we may be exposed to impairment losses that could be material.

Impairment of goodwill and other non-amortizing intangible assets

Goodwill impairment is determined using a two-step process. The first step is to identify if a potential impairment exists by comparing the fair value of an operating unit, which for us is a reportable segment, with its carrying amount, including goodwill. If the fair value of a segment exceeds its carrying amount, goodwill of the segment is not considered to have a potential impairment and the second step of the impairment test is not necessary. However, if the carrying amount of a segment exceeds its fair value, a second step is performed to determine if goodwill is impaired and to measure the amount of impairment loss to recognize, if any. The second step compares the implied fair value of goodwill with the carrying amount of goodwill. If the implied

fair value of goodwill exceeds the carrying amount, then goodwill is not considered impaired. However, if the carrying amount of goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess.

The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination (i.e., the fair value of the segment is allocated to all the assets and liabilities, including any unrecognized intangible assets, as if the segment had been acquired in a business combination and the fair value of the segment was the purchase price paid to acquire the segment).

For our other non-amortizing intangible assets, if the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. We have elected to make the last day of the fourth quarter the annual impairment assessment date for goodwill and other intangible assets. However, we could be required to evaluate the recoverability of goodwill and other intangible assets prior to the required annual assessment if we experience disruptions to the business, unexpected significant declines in operating results, cash flows, or upon divestiture of a significant component of the business.

We estimate the fair value of our segments using various valuation techniques, with the primary technique being a discounted cash flow analysis. A discounted cash flow analysis requires us to make various judgmental assumptions about sales, operating margins, growth rates and discount rates. Assumptions about sales, operating margins and growth rates are based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data. Assumptions are also made for varying perpetual growth rates for periods beyond the long-term business plan period.

While estimating the fair value of our Beef and Pork segments, we assumed operating margins in future years in excess of the margins realized in the most current year. The fair value estimates for these segments assume normalized operating margin assumptions and improved operating efficiencies based on long-term expectations and margins historically realized in the beef and chicken industries.

Other intangible asset fair values have been calculated for trademarks using a royalty rate method and using the present value of future cash flows for patents and in-process technology. Assumptions about royalty rates are based on the rates at which similar brands and trademarks are licensed in the marketplace. Our impairment analysis contains uncertainties due to uncontrollable events that could positively or negatively impact the anticipated future economic and operating conditions.

We have not made any material changes in the accounting methodology used to evaluate impairment of goodwill and other intangible assets during the last three years. As a result of the first step of the 2008 goodwill impairment analysis, the fair value of each segment exceeded its carrying value. The second step could have resulted in an impairment loss for goodwill.

While we believe we have made reasonable estimates and assumptions to calculate the fair value of the segments and other intangible assets, it is possible a material change could occur. If our actual results are not consistent with our estimates and assumptions used to calculate fair value, we may be required to perform the second step which could result in a material impairment of our goodwill.

Income taxes

We estimate total income tax expense based on statutory tax rates and tax planning opportunities available to us in various jurisdictions in which we earn income. Federal income taxes include an estimate for taxes on earnings of foreign subsidiaries expected to be remitted to the United States and be taxable, but not for earnings considered indefinitely invested in the foreign subsidiary. Deferred income taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse. Valuation allowances are recorded when it is likely a tax benefit will not be realized for a deferred tax asset. We record unrecognized tax benefit liabilities for known or anticipated tax issues based on our analysis of whether, and the extent to which, additional taxes will be due. This analysis is performed in accordance with the requirements of Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” or FIN 48, which we adopted on May 28, 2007. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. Changes in projected future earnings could affect the recorded valuation allowances in the future. Our calculations related to income taxes contain uncertainties due to judgment used to calculate tax liabilities in the application of complex tax regulations across the tax jurisdictions where we operate. Our analysis of unrecognized tax benefits contain uncertainties based on judgment used to apply the more likely than not recognition and measurement thresholds of FIN 48. We do not believe there is a reasonable likelihood there will be a material change in the tax related balances or valuation allowances. However, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the tax liabilities. To the extent we prevail in matters for which FIN 48 liabilities have been established, or are required to pay amounts in excess of our recorded FIN 48 liabilities, our effective tax rate in a given financial statement period could be materially affected. Any change to our valuation allowance will impact our effective tax rate in a given financial statement period and could materially impact our tax expense. An unfavorable tax settlement would require use of our cash and result in an increase in our effective tax rate in the period of resolution. A favorable tax settlement would be recognized as a reduction in our effective tax rate in the period of resolution.

Recent accounting pronouncements

In February 2008, the FASB issued FASB Staff Position (FSP) No. 157-2, which defers the effective date of SFAS No. 157, “Fair Value Measurements,” for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in an entity’s financial statements on a recurring basis, at least annually. We will be required to adopt for these nonfinancial assets and nonfinancial liabilities as of December 29, 2008. We believe the adoption of SFAS No. 157 deferral provisions will not have a material impact on our financial position results of operations or cash flows.

In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R),” or SFAS No. 167. SFAS No. 167 provides for enhanced financial reporting by enterprises involved with variable interest entities and is effective for fiscal years beginning after November 15, 2009. We are currently evaluating the impact, if any, of SFAS No. 167 on our financial position, results of operations and cash flows.

Factors affecting our results of operations

Our results of operations have been influenced and will continue to be influenced by a variety of factors. Our management monitors a number of metrics and indicators that affect our operations, including the following:

•

production volume,

•

plant capacity utilization,

•

sales volume,

•

selling prices of beef and pork products,

•

customer demands and preferences (see “Risk factors—Risks relating to our business and the beef and pork industries—Changes in consumer preferences could adversely affect our business”),

•

commodity futures board prices for livestock (see “Risk factors—Risks relating to our business and the beef and pork industries—Our results of operations may be negatively impacted by fluctuations in the prevailing market prices for livestock” and Note 6, “Derivative financial instruments,” to our unaudited consolidated financial statements included in this prospectus),

•

spread between livestock prices and selling prices for finished goods,

•

utility prices and trends,

•

livestock availability,

•

production yield,

•

currency exchange rate fluctuations (in particular, between the U.S. dollar and the Australian dollar) (see “Risk factors—Risks relating to our business and the beef and pork industries—Our export and international operations expose us to political and economic risks in foreign countries, as well as to risks related to currency fluctuations”), and

•

trade barriers, exchange controls and political risk and other risks associated with export and foreign operations. See “Risk factors—Risks relating to our business and the beef and pork industries—Our export and international operations expose us to political and economic risks in foreign countries, as well as to risks related to currency fluctuations.”

Our operating results are also influenced by seasonal factors, which impact the price that we pay for livestock as well as the ultimate price at which we sell our products.

In the beef industry, the seasonal demand for beef products is highest in the summer and fall months as weather patterns permit more outdoor activities and there is typically an increased demand for higher value items that are grilled, such as steaks. Both live cattle prices and boxed beef prices tend to be at seasonal highs during the summer and fall. Because of higher consumption, more favorable growing conditions and the housing of animals in feedlots for the winter months, there are generally more cattle available in the summer and fall. In Australia, seasonal demand does not fluctuate as significantly as it does in the United States.

The pork industry has similar seasonal cycles but in different months. It takes an average of 11 months from conception for a hog to reach market weight. Generally, sows are less productive in summer months, resulting in fewer hogs available in the spring and early summer, which causes prices of hogs and boxed pork to rise, but production to fall. The highest demand for pork occurs from October to March, as hog availability and holiday occasions increase the demand for hams, tenderloins and other higher value pork products. During the quarter ended March 29, 2009, seasonal demand followed normal historical patterns.

We believe that our results of operations are not materially affected by moderate changes in the inflation rate. Inflation and changing prices did not have a material effect on our operations in fiscal years 2008, 2007 and 2006. Severe increases in inflation, however, could affect the global and U.S. economies and could have an adverse effect on our business, financial condition and results of operations.

Other factors that impact the results of our operations include outbreaks of livestock disease, product contamination or recalls, our ability to implement our business plan (including our ability to arrange financing when required and on reasonable terms), and the implementation of our financing strategy and capital expenditure plan.

RESULTS OF OPERATIONS

Our current fiscal year is based on the 52- or 53-week period ending on the last Sunday in December. Our predecessor company’s fiscal year was based on the 52- or 53-week period ending on the last Sunday in May. We present financial statements for the following periods:

•

the fiscal year ended December 24, 2006,

•

the 198 days from December 25, 2006 through July 10, 2007,

•

the 173 days from July 11, 2007 (the date of the Swift Acquisition) through December 30, 2007,

•

the fiscal year ended December 28, 2008, and

•

the fiscal quarters ended March 30, 2008 and March 29, 2009.

The Swift Acquisition closed on July 11, 2007, and the financial statements for the 198 days from December 25, 2006 to July 10, 2007 represent the period between the end of the last day of the fiscal year ended December 24, 2006 and the day prior to the closing of the Swift Acquisition. The periods ended prior to July 11, 2007 are referred to as the “predecessor” periods. The financial statements for the 173-day period from July 11, 2007 through December 30, 2007 represent the period from the date of the Swift Acquisition through December 30, 2007. The periods ended subsequent to July 10, 2007 are referred to as the “successor” periods.

Prior to the Tasman Acquisition, we had significant operations in northern Australia through our legacy Australian subsidiaries. As a result, even prior to the Tasman Acquisition, the value of the Australian dollar as compared to the U.S. dollar had an effect on our Australian operations.

Supplemental financial data

The following table presents segment results for the fiscal year ended December 24, 2006, the 198 days ended July 10, 2007, the 173 days ended December 30, 2007, the fiscal year ended December 28, 2008, and the fiscal quarters ended March 30, 2008 and March 29, 2009.


	Predecessor						Successor
in thousands	Fiscal year ended December 24, 2006			198 days ended July 10, 2007			173 days ended December 30, 2007			Fiscal year ended December 28, 2008			Fiscal quarter ended March 30, 2008			Fiscal quarter ended March 29, 2009

	(audited)			(audited)			(audited)			(audited)			(unaudited)			(unaudited)

Net sales:
Beef	$	7,576,136		$	3,757,295		$	3,942,231		$	9,975,510		$	1,935,142		$	2,680,205
Pork		2,152,583			1,234,133			1,063,644			2,438,049			535,509			526,283
Corporate and other		(37,287	)		(20,804	)		(16,891	)		(51,278	)		(8,994	)		(10,149	)


Total	$	9,691,432		$	4,970,624		$	4,988,984		$	12,362,281		$	2,461,657		$	3,196,339


Depreciation, amortization expense and goodwill impairment(1):
Beef	$	65,443		$	32,913		$	25,627		$	68,721		$	14,114		$	26,568
Pork		23,679			11,925			9,617			23,653			5,025			6,784


Total	$	89,122		$	44,838		$	35,244		$	92,374		$	19,139		$	33,352

(1)

The fiscal year ended December 24, 2006 included a $4.5 million goodwill impairment charge.

Fiscal quarter ended March 29, 2009 compared to fiscal quarter ended March 30, 2008

Net sales. Net sales is defined as gross sales (amounts invoiced to customers) less any sales returns and allowances. We grant allowances that are customary in our business. Net sales for the fiscal quarter ended March 29, 2009 totaled $3,196.3 million as compared to net sales of $2,461.7 million for the fiscal quarter ended March 30, 2008. Net sales for the fiscal quarter ended March 29, 2009 increased $734.7 million, or 29.8%, as compared to the fiscal quarter ended March 30, 2008, primarily reflecting an overall 10% increase in sales volume, which was partially offset by a 6.1% overall decrease in sales prices. Excluding the JBS Packerland and Tasman Acquisitions, net sales would have been $2,307.1 million for the fiscal quarter ended March 29, 2009, representing a decrease of $154.5 million. This sales price decrease reflected a 7.3% decrease in Beef segment prices, partially offset by a 4.6% increase in Pork segment prices. Volumes increased in our Beef segment by 49.4% driven by the JBS Packerland and Tasman Acquisitions (a 1.6% decrease excluding the JBS Packerland and Tasman Acquisitions primarily due to market conditions, including demand), and a 6.1% decrease in our Pork segment related to overall market conditions, including demand and margins. The addition of smalls in Australia for the period ended March 29, 2009 was the primary driver of the decline in per unit selling

prices. For calculation of the price changes in the period subsequent to the Tasman Acquisition, we utilized a 12 to 1 ratio of smalls to cattle equivalents based on relative weights. The value of the Australian dollar as compared to the U.S. dollar decreased 27.0% between the two periods which negatively affected net sales from our international operations included in our Beef segment.

Cost of goods sold. Cost of goods sold totaled $3,123.4 million for the fiscal quarter ended March 29, 2009 as compared to $2,451.4 million for the fiscal quarter ended March 30, 2008. Cost of goods sold increased $671.9 million, or 27.4%, for the fiscal quarter ended March 29, 2009 as compared to the fiscal quarter ended March 30, 2008. Excluding the JBS Packerland and Tasman Acquisitions, cost of goods sold would have been $2,268.7 million for fiscal quarter ended March 29, 2009, representing a decrease of $182.7 million. Cost of goods sold increased 34.6% in our Beef segment as a result of a 49.4% increase in slaughter volumes (primarily attributable to the JBS Packerland and Tasman Acquisitions), offset by a 1.6% decrease in slaughter volumes at the legacy Swift beef facilities and an 11.7% decrease in cattle prices and further offset by a 0.2% decrease in cost of goods sold in our Pork segment (which was driven by a 6.1% decrease in hog slaughter volumes, partially offset by a 7.2% increase in hog prices). Although total cost of goods sold increased quarter over quarter due to increased Beef segment production volume, we demonstrated reductions in per head cost for the following categories: freight costs, hourly wages including overtime, utilities costs (driven by lower natural gas prices), repairs and maintenance costs and storage costs.

Gross margin percentages. Gross margin percentage (gross profit as a percent of net sales) was 2.3% for the fiscal quarter ended March 29, 2009 as compared to 0.4% for the fiscal quarter ended March 30, 2008. The increase in gross margin percentage reflects a 2.7 percentage point increase in our Beef segment, partially offset by a decrease of 1.6 percentage points in our Pork segment. Margin enhancements in our Beef segment reflect cost reductions due to renegotiation of supply contracts, elimination of certain third-party service providers (including cattle hotelling, lab services and maintenance service providers) and the insourcing of these items at lower cost, operational yield enhancements which generated additional pounds to sell from each carcass and improved margins due to enhanced product mix resulting from increased volume sold to international markets where products like the special cuts described above generate a higher return. Margin declines in our Pork segment were driven by a 7.2% increase in hog prices, which could not be fully passed on through higher selling prices, especially for rendered products used for fuel for which demand and prices decreased due to lower petroleum product prices between the corresponding periods. Excluding the JBS Packerland and Tasman Acquisitions, gross margin percentage would have been 1.7% for fiscal quarter ended March 29, 2009, representing an increase of 1.3% year over year.

Selling, general and administrative expenses. Selling, general and administrative expenses were $61.6 million for the fiscal quarter ended March 29, 2009 as compared to $31.0 million for the fiscal quarter ended March 30, 2008. These expenses increased by $30.6 million, or 98.4%. Excluding the JBS Packerland and Tasman Acquisitions, selling, general and administrative expenses increased $19.4 million, or 62.4%, when compared to the same period in the prior year. During the fiscal quarter ended March 29, 2009, we reached an agreement to terminate our efforts to acquire National Beef Packing Company, LLC, or National Beef, and as a result, we paid a breakage fee to the shareholders of National Beef totaling $19.9 million, and we recorded as an expense the related incurred legal costs totaling an additional $1.0 million. These non-recurring costs of $20.9 million were recorded in selling, general and administrative

expenses in the “Corporate and other” segment. This increase was partially offset by the effect of the depreciation of 27.0% in the value of the Australian dollar as compared to the U.S. dollar between the comparative fiscal quarters.

Foreign currency transaction, net. Foreign currency transaction, net for the fiscal quarter ended March 29, 2009 was a gain of $5.1 million as compared to a gain of $12.6 million for the fiscal quarter ended March 30, 2008. This $7.5 million change related to the effects of the variation in the value of the Australian dollar as compared to the U.S. dollar on our U.S. dollar-denominated intercompany note payable and receivable within Australia. The value of the Australian dollar as compared to the U.S. dollar depreciated 24.4% between the two period ends.

Interest expense, net. Interest expense, net for the fiscal quarter ended March 29, 2009 was $14.6 million as compared to $8.1 million for the fiscal quarter ended March 30, 2008. This increase of $6.5 million related to additional borrowings under our intercompany loans and our revolving credit facility. As part of the Tasman Acquisition, we also assumed incremental debt. The additional borrowings were used to finance our working capital needs following the JBS Packerland and Tasman Acquisitions in 2008. In addition, the average interest rate applicable to these borrowings was slightly higher in the 2009 period as compared to the 2008 period. See Note 16, “Subsequent event,” to our unaudited consolidated financial statements included elsewhere in this prospectus and “—Liquidity and capital resources.”

Income tax expense, net. Income tax expense, net for the fiscal quarter ended March 29, 2009 was $0.9 million as compared to $5.6 million for the fiscal quarter ended March 30, 2008. The expense for both periods relates mainly to our Australian operations as we had established a valuation allowance in the United States. Therefore, the $4.7 million decrease related to a decrease in our international income.

Net income (loss). As a result of the factors discussed above, our net income for the fiscal quarter ended March 29, 2009 increased to income of $2.3 million from a loss of $18.1 million for the fiscal quarter ended March 30, 2008.

Beef segment

Net sales. Net sales totaled $2,680.2 million for the fiscal quarter ended March 29, 2009 as compared to $1,935.1 million for the fiscal quarter ended March 30, 2008. Net sales increased by $745.1 million, or 38.5%, as a result of an increase in production volume of 49.4%, which was partially offset by a 7.3% decrease in selling prices. For calculation of the price changes in the period subsequent to the Tasman Acquisition, we have used a 12 to 1 ratio of smalls to cattle equivalents based on relative weights. Increases in production related primarily to the JBS Packerland and Tasman Acquisitions, partially offset by a 1.6% decrease in volume from the legacy Swift beef facilities between the two quarters. Excluding the JBS Packerland and Tasman Acquisitions, net sales would have been $1,791.0 million for the fiscal quarter ended March 29, 2009, representing a decrease of $144.2 million, or 7.4%, primarily driven by the 27.0% depreciation of the Australian dollar compared to the U.S. dollar between the two quarters.

Cost of goods sold. Cost of goods sold totaled $2,619.6 million in the fiscal quarter ended March 29, 2009 as compared to $1,945.6 million in the fiscal quarter ended March 30, 2008. This increase of $673.9 million, or 34.6%, resulted from a 49.4% increase in slaughter volumes (primarily attributable to the JBS Packerland and Tasman Acquisitions, offset by a 1.6% decrease in slaughter volumes at the legacy Swift beef facilities), further offset by an 11.7% decrease in

cattle prices. Excluding the JBS Packerland and Tasman Acquisitions, cost of goods sold would have been $1,764.9 million for fiscal quarter ended March 29, 2009, representing a decrease of $180.7 million. The increase in cost of goods sold was also offset by the 27.0% percent decrease in the value of the Australian dollar as compared to the U.S. dollar. Notwithstanding the overall increase in cost of goods sold, on a cost per head basis, reductions occurred in hourly production overtime, maintenance costs, freight (driven by lower diesel fuel prices) and utilities (driven by lower natural gas prices).

Gross margin percentages. Gross margin percentage (gross profit as a percent of net sales) was 2.3% for the fiscal quarter ended March 29, 2009 as compared to (0.5)% for the fiscal quarter ended March 30, 2008. Excluding the JBS Packerland and Tasman Acquisitions, gross margin percentage would have been 1.5% for the fiscal quarter ended March 29, 2009, representing a 2.0 percentage point increase. The margin improvement in our Beef segment was driven by improvements in the product mix resulting from identification of higher value markets for certain products, coupled with manufacturing cost reductions and improved operational efficiency, as further described in the discussion of our consolidated results above.

Selling, general and administrative expenses. Selling general and administrative expenses were $28.6 million for the fiscal quarter ended March 29, 2009 as compared to $19.7 million for the fiscal quarter ended March 30, 2008. This increase of $8.9 million, or 45.4%, resulted primarily from the JBS Packerland and Tasman Acquisitions. Excluding the JBS Packerland and Tasman Acquisitions, selling, general and administrative expenses totaled $17.4 million for the fiscal quarter ended March 29, 2009, a decrease of $2.3 million from the fiscal quarter ended March 30, 2008. The decrease was partially due to the 27.0% depreciation in the value of the Australian dollar as compared to the U.S. dollar between the comparative quarters.

Depreciation and amortization expense. Depreciation and amortization expense for the fiscal quarter ended March 29, 2009 was $26.6 million as compared to $14.1 million for the fiscal quarter ended March 30, 2008. This increase of $12.5 million, or 88.2%, related to the JBS Packerland and Tasman Acquisitions. Excluding the JBS Packerland and Tasman Acquisitions, depreciation and amortization would have decreased $0.5 million, or 3.9%, resulting primarily from the depreciation recorded on assets placed in service, offset by the impact of assets fully depreciated during the period. See Note 4, “Property, plant and equipment,” to our unaudited consolidated financial statements included in this prospectus for more information about how this depreciation and amortization is reflected in our financial statements.

Pork segment

Net sales. Net sales totaled $526.3 million for the fiscal quarter ended March 29, 2009 as compared to $535.5 million for the fiscal quarter ended March 30, 2008. This decrease in of $9.2 million, or 1.7%, as compared to the fiscal quarter ended March 30, 2008, was primarily due to an overall 6.1% decrease in volume, partially offset by a 4.6% overall increase in sales prices.

Cost of goods sold. Cost of goods sold totaled $ 513.9 million for the fiscal quarter ended March 29, 2009 as compared to $514.8 million for the fiscal quarter ended March 30, 2008. This decrease of $0.8 million, or 0.2%, was primarily a result of a 6.1% decrease in our Pork segment slaughter volumes partially offset by a 7.2% increase in hog prices. The following cost categories were reduced on a per head basis: storage, freight (driven by lower diesel fuel prices) and utilities (driven by lower natural gas prices and increased alternative fuel credits).

Gross margin percentages. Gross margin percentage (gross profit as a percentage of net sales) was 2.3% for the fiscal quarter ended March 29, 2009 as compared to 3.9% for the fiscal quarter ended March 30, 2008. This decrease of 1.6 percentage points reflects lower sales margins. Gross margin percentage was impacted by a 7.2% increase in hog prices. Sales margins were also negatively impacted by lower rendered product prices driven by lower petroleum prices. The following cost categories were reduced on a per head basis: storage, freight (driven by lower diesel fuel prices) and utilities (driven by lower natural gas prices and increased alternative fuel credits), each of which helped to partially offset the increase in hog costs.

Selling, general, and administrative expenses. Selling, general, and administrative expenses were $12.0 million for the fiscal quarter ended March 29, 2009 as compared to $11.4 million for the fiscal quarter ended March 30, 2008. These expenses increased by $0.6 million, or 5.9%.

Depreciation and amortization. Depreciation and amortization expense for the fiscal quarter ended March 29, 2009 was $6.8 million as compared to $5.0 million for the fiscal quarter ended March 30, 2008. This increase of $1.8 million, or 35%, resulted primarily from the depreciation recorded on assets placed in service, partially offset by the impact of assets fully depreciated during the period. See Note 4, “Property, plant and equipment,” to our unaudited consolidated financial statements included in this prospectus for more information about how this depreciation and amortization is reflected in our financial statements.

The 173-day period from July 11, 2007 through December 30, 2007 (successor) compared to the fiscal year ended December 28, 2008 (successor)

Net sales. Net sales in the 173-day period from July 11, 2007 through December 30, 2007 (successor) were $4,989.0 million compared to $12,362.3 million for the fiscal year ended December 28, 2008 (successor). Net sales per day increased due to per day volume increases of 12.1%, partially offset by a price decline of 6.4%.

Cost of goods sold. Cost of goods sold totaled $11,917.8 million for the fiscal year ended December 28, 2008 (successor) as compared to $5,013.1 million for the 173-day period from July 11, 2007 through December 30, 2007 (successor). This increase was due to the per day volume increases of 12.1%, partially offset by a price decline of 10.7%. In addition, the increase is also attributable to the JBS Packerland and Tasman Acquisitions, coupled with the 28.3% appreciation in the Australian dollar relative to the U.S. dollar between the two periods.

Gross margin percentages. Gross margin percentage (gross profit as a percentage of net sales) in the 173-day period from July 11, 2007 through December 30, 2007 (successor) was (0.5)% compared to 3.6% for the fiscal year ended December 28, 2008 (successor). The increase in gross margin percentage in the more recent period was due principally to continuing improvements in production throughput, operating costs, efficiency and product yields as employees hired subsequent to the December 12, 2006 investigation by the U.S. Department of Homeland Security’s Immigration and Customs Enforcement division, or the ICE event, gained the ability to perform at the level of pre-ICE event production employees. See “Risk factors—Risks relating to our business and the beef and pork industries—Our performance depends on favorable labor relations with our employees and our compliance with labor laws. Any deterioration of those relations or increase in labor costs due to our compliance with labor laws could adversely affect our business.”

Selling, general and administrative expenses. Selling, general and administrative expenses in the 173-day period from July 11, 2007 through December 30, 2007 (successor) were $60.7 million compared to $148.8 million for the fiscal year ended December 28, 2008 (successor). Selling, general and administrative expenses per day increased due to the JBS Packerland and Tasman Acquisitions, more than offsetting the favorable impact of the company’s de-layering of management effective July 13, 2007 and the renegotiation of professional service contracts in the areas of audit, tax and legal services. In addition, the Australian dollar appreciated relative to the U.S. dollar by 28.3% between the two periods.

Foreign currency transaction, net. Foreign currency transaction, net was a net $5.2 million gain in the 173-day period from July 11, 2007 to December 30, 2007 as compared to a net $76.0 million loss in the fiscal year ended December 28, 2008. The foreign currency transaction loss resulted from the depreciation of the Australian dollar relative to the U.S. dollar by 22.1% between the two period ends applied against a $250 million intercompany note payable between JBS Swift Australia Pty Ltd and its U.S. parent company.

Interest expense, net. Interest expense, net for the 173-day period from July 11, 2007 through December 30, 2007 (successor) was $34.3 million compared to $36.4 million for the fiscal year ended December 28, 2008 (successor). This increase of 5.9% in the more recent period as compared to the prior period reflects the fact that borrowings decreased an average of $393.2 million due primarily to improved operating cash flows, as well as a one-time cost of $12.7 million incurred in the 2007 period associated with an unconsummated debt offering in July 2007.

Income tax expense (benefit). Income tax expense, net for the 173-day period from July 11, 2007 through December 30, 2007 (successor) was $1.0 million as compared to $31.2 million for the fiscal year ended December 28, 2008. This $30.2 million increase is related primarily to a change in our valuation allowance due to the JBS Packerland Acquisition in which we acquired additional deferred income tax liabilities.

Net income (loss). As a result of the factors discussed above, we had net income for the fiscal year ended December 28, 2008 of $161.1 million as compared to an $111.6 million net loss for the 173-day period from July 11, 2007 to December 30, 2007.

The 198-day period from December 25, 2006 to July 10, 2007 (predecessor) compared to the fiscal year ended December 24, 2006 (predecessor)

Net sales. Net sales for the 198-day period from December 25, 2006 to July 10, 2007 (predecessor) were $4,970.6 million compared to $9,691.4 million for the fiscal year ended December 24, 2006 (predecessor). Net sales per day decreased due to volume decreases of 5.2% offset by price increases of 5.6%. In addition, the value of the Australian dollar as compared to the U.S. dollar decreased 7.1% between the two periods.

Cost of goods sold. Cost of goods sold totaled $4,920.6 million for the 198-day period from December 25, 2006 to July 10, 2007 (predecessor) as compared to $9,574.7 million for the fiscal year ended December 24, 2006 (predecessor). Cost of goods sold per day decreased due to volume decreases of 5.2%, partially offset by price increases of 5.9%. In addition, the value of the Australian dollar as compared to the U.S. dollar decreased 7.1% between the two periods.

Gross margin percentages. Gross margin percentage (gross profit as a percentage of net sales) for the 198-day period from December 25, 2006 to July 10, 2007 (predecessor) was 1.0% as

compared to 1.2% for the fiscal year ended December 24, 2006 (predecessor). This decrease in gross margin percentage in the more recent period was due principally to the negative impact of the ICE event on production throughput, operating costs, efficiency and product yields as lesser-trained replacement workers were not able to perform at the level of pre-ICE event production employees. See “Risk factors—Risks relating to our business and the beef and pork industries—Our performance depends on favorable labor relations with our employees and our compliance with labor laws. Any deterioration of those relations or increase in labor costs due to our compliance with labor laws could adversely affect our business.”

Selling, general and administrative expenses. Selling, general and administrative expenses for the 198-day period from December 25, 2006 to July 10, 2007 (predecessor) were $92.3 million as compared $158.8 million for the fiscal year ended December 24, 2006 (predecessor). Selling, general and administrative expense per day increased between the two periods primarily as a result of the one-time costs of approximately $13.0 million incurred relating sell-side expenses incurred by our predecessor in connection with the Swift Acquisition, including legal costs, employee severance costs and employee retention bonuses accrued as earned in the days immediately prior to the acquisition. These costs were partially offset by a decrease of 7.1% in the value of the Australian dollar as compared to the U.S. dollar between the two periods.

Interest expense. Interest expense for the 198-day period December 25, 2006 to July 10, 2007 (predecessor) was $66.4 million as compared to $118.8 million for the fiscal year ended December 24, 2006 (predecessor). Interest expense on a per day basis increased 2.8% in the more recent period as compared to the prior fiscal year as borrowings had increased an average of $136.4 million due primarily to negative operating cash flows resulting from the ICE event impact on production volumes.

Income tax expense (benefit). Income tax benefit, net for the 198-day period from December 25, 2006 to July 10, 2007 (predecessor) was $18.4 million as compared to $37.3 million for the fiscal year ended December 24, 2006. This $18.9 million decrease related primarily to a change in our valuation allowance due to our history of losses in the United States.

Net loss. As a result of the factors described above, we recorded a net loss for the 198-day period ended July 10, 2007 of $83.0 million, as compared to a net loss incurred in the fiscal year ended December 24, 2006 of $117.4 million.

Pro forma results of operations

Our consolidated results of operations for the fiscal quarter ended March 29, 2009 are not fully comparable to our results of operations for the fiscal quarter ended March 30, 2008 due to (1) the Tasman Acquisition that closed on May 2, 2008 and (2) the JBS Packerland Acquisition that closed on October 23, 2008.

In addition, our consolidated results of operations for the fiscal year ended December 28, 2008 are not fully comparable to our results of operations for the fiscal year ended December 30, 2007 due to (1) the change in cost basis and recapitalization that occurred on July 11, 2007 in connection with the Swift Acquisition, (2) the Tasman Acquisition that closed on May 2, 2008 and (3) the JBS Packerland Acquisition that closed on October 23, 2008.

In light of these transactions, as well as the offering and sale of our 11.625% senior unsecured notes due 2014 that occurred in April 2009, and in order to facilitate an analysis of our financial

information, we are presenting pro forma statements of operations for the fiscal quarter ended March 29, 2009 and for the fiscal year ended December 28, 2008. See “Unaudited pro forma financial statements.”

We are also presenting supplementary pro forma statements of operations for the following periods for comparative purposes:

•

the fiscal quarter ended March 30, 2008 as if (a) our offering of our 11.625% senior unsecured notes due 2014 and the application of proceeds therefrom, and (b) the JBS Packerland Acquisition, in each case, had occurred at the beginning of the period presented; and

•

the fiscal year ended December 30, 2007 as if (a) the change in cost basis and recapitalization that occurred on July 11, 2007 in connection with the Swift Acquisition and (b) the JBS Packerland Acquisition, in each case, had occurred at the beginning of the period presented.

The following unaudited pro forma statements of operations tables reflect pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions that we believe are reasonable under the circumstances, and the actual results could differ materially from these anticipated results. In our opinion, all adjustments that are necessary to present fairly the unaudited pro forma consolidated data have been made. The following unaudited pro forma statements of operations tables are presented for informational purposes only and do not purport to be indicative of what would have occurred had the JBS Packerland Acquisition, Tasman Acquisition, Swift Acquisition or the offering of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom actually been consummated at the beginning of the period presented, nor are they necessarily indicative of our future consolidated operating results.

Unaudited pro forma combined statement of operations

for the fiscal quarter ended March 29, 2009


	JBS USA Holdings, Inc.							JBS USA Holdings, Inc.
in thousands, except for earnings per share	March 29, 2009			Adjustments				March 29, 2009
in thousands, except for earnings per share	Historical			(+)			Notes	Pro forma

Net sales	$	3,196,339		$	—			$	3,196,339
Cost of goods sold		3,123,358			—				3,123,358

Gross profit		72,981			—				72,981
Selling, general and administrative expenses		61,598			—				61,598
Foreign currency transaction gains		(5,075	)		—				(5,075	)
Other income		(1,475	)		—				(1,475	)
Loss on sales of property, plant and equipment		180			—				180
Interest expense, net		14,592			10,024		(a)		24,616

Total expenses		69,820			10,024				79,844

Income (loss) from continuing operations before income tax		3,161			(10,024	)			(6,863	)
Income tax expense (benefit)		909			(3,509	)	(b)		(2,600	)

Net income (loss)	$	2,252		$	(6,515	)		$	(4,263	)

Basic and diluted net income (loss) per share	$	22,520.00						$	(42,630.00	)

(a)

Reflects the following adjustments to interest expense, net relating to the transactions:


Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$	117
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)		1,950
Interest expense, 11.625% senior unsecured notes due 2014(iii)		16,302
Interest expense, intercompany debt(iv)		(8,345	)

Total interest expense, net(v)	$	10,024

(i)

(ii)

Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 29, 2008 through March 29, 2009, calculated on a straight-line basis.

(iii)

Includes pro forma interest expense for the period from December 29, 2008 through March 29, 2009 on $560.9 million ($519.6 million of proceeds plus $39.0 million of bond discount and $2.3 million of debt issuance cost) of our 11.625% senior unsecured notes due 2014.

(iv)

Includes the reduction of pro forma interest expense for our intercompany loans due to the $519.6 million reduction in the aggregate principal amount of those intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

(v)

(b)

Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

Unaudited pro forma combined statement of operations for the fiscal quarter ended March 30, 2008


	JBS USA Holdings, Inc.			JBS Packerland			JBS Packerland			JBS Packerland			Five Rivers			Five Rivers							JBS USA Holdings, Inc.
	December 31, 2007 through March 30, 2008			December 31, 2007 through March 30, 2008 (a)(i)			Adjustment for 50% equity interest in Five Rivers (b)			Adjustment for assets not acquired (c)(i)			December 31, 2007 through March 30, 2008 (a)(ii)			Adjustment for assets not acquired (c)(ii)			Adjustment for transaction				December 31, 2007 through March 30, 2008
	Historical			Historical									Historical									Notes	Pro forma

in thousands, except earnings per share	(+)			(+)			(-)			(-)			(+)			(-)			(+)


Net sales	$	2,461,657		$	729,130		$	—		$	775		$	480,701		$	325,614		$	(960	)	(d)	$	3,344,139
Cost of goods sold		2,451,413			696,897			—			(3,389	)		473,618			329,215			2,705		(d),(e)		3,298,807

Gross profit		10,244			32,233			—			4,164			7,083			(3,601	)		(3,665	)			45,332
Selling, general and administrative expenses		31,042			22,168			—			6,319			3,473			—			1,202		(e)		51,566
Foreign currency transaction gains		(12,614	)		—			—			—			—			—			—				(12,614	)
Other income (expense)		(3,782	)		2,136			884			1,290			(78	)		42			—				(3,940	)
Loss on sales of property, plant and equipment		19			1			—			—			2			—			—				22
Interest expense, net		8,108			10,352			—			10,402			5,453			5,453			12,172		(f)		20,230

Total expenses		22,773			34,657			884			18,011			8,850			5,495			13,374				55,264

Loss from continuing operations before income tax		(12,529	)		(2,424	)		(884	)		(13,847	)		(1,767	)		(9,096	)		(17,037	)			(9,932	)
Income tax expense (benefit)		5,613			558			—			558			—			—			907		(g)		6,520

Net income (loss)	$	(18,142	)	$	(2,982	)	$	(884	)	$	(14,405	)	$	(1,767	)	$	(9,096	)	$	(17,946	)		$	(16,452	)

Basic and diluted net income (loss) per share	$	(181,420.00	)																				$	(164,520.00	)

(a)

Represents the historical results of

(i)

JBS Packerland, and

(ii)

Five Rivers

for the period from December 31, 2007 through March 30, 2008.

(b)

Represents the elimination of the 50% equity interest in Five Rivers from the historical results of JBS Packerland for the period December 31, 2007 through March 30, 2008. On a pro forma basis, the results of Five Rivers are reflected on a fully consolidated basis as part of the JBS Packerland Acquisition.

(c)

Reflects the elimination of assets not acquired for

(i)

JBS Packerland, and

(ii)

Five Rivers.

(d)

Reflects the elimination of $0.9 million of intercompany sales and $0.9 million of cost of goods sold between JBS Packerland and our legacy Swift Beef segment for the period from December 31, 2007 through March 30, 2008.

(e)

Represents the adjustment of $3.6 million to historical cost of goods sold and $1.2 million for selling, general and administrative expense to reflect depreciation and amortization expense based on the estimated fair values and useful lives of identified tangible and intangible assets for JBS Packerland and Five Rivers based on a preliminary third-party valuation report. The purchase price allocation is preliminary pending completion of independent valuations of identified tangible and intangible assets acquired and certain liabilities acquired, including, but not limited to deferred taxes. The allocation of the purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of October 23, 2008 (in thousands), and the following table details the purchase price components:


Purchase price allocation:
Purchase price paid to previous shareholders	$537,068
Fees and direct expenses	26,134

Total purchase price	$563,202


Preliminary purchase price allocation:
Current assets and liabilities	$43,052
Property, plant and equipment(i)	423,955
Deferred tax liabilities	(142,997	)
Goodwill	95,998
Intangible assets(ii)	138,023
Other noncurrent assets and liabilities, net	5,171

Total purchase price allocation	$563,202

(i)


Furniture, fixtures, office equipment and other		5 to 7 years
Machinery and equipment		5 to 15 years
Buildings and improvements		15 to 40 years
Leasehold improvements		shorter of useful life or the lease term

(ii)

(f)

Reflects the following adjustments to interest expense, net relating to the transactions:


Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$117
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)	1,950
Interest expense, 11.625% senior unsecured notes due 2014(iii)	16,302
Interest expense, other debt(iv)	(6,197	)

Total Interest expense, net(v)	$12,172

(i)

Includes pro forma interest expense for the amortization of debt issuance costs on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through March 30, 2008, calculated on a straight-line basis.

(ii)

Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 31, 2007 through March 30, 2008, calculated on a straight-line basis.

(iii)

(iv)

Includes the reduction of pro forma interest expense for the period from December 31, 2007 through March 30, 2008 on our outstanding bank debt and intercompany loans from JBS S.A. due to a $519.6 million reduction in the aggregate principal amount of those intercompany loans using a portion of the net proceeds of our 11.625% senior unsecured notes due 2014.

(v)

(g)

Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

Pro forma fiscal quarter ended March 29, 2009 compared to the pro forma fiscal quarter ended March 30, 2008

Net sales. Net sales were $3,196.3 million for the pro forma fiscal quarter ended March 29, 2009 as compared to $3,344.1 million for the pro forma fiscal quarter ended March 30, 2008. Net sales decreased by $147.8 million, or 4.4%, due to a sales price decrease of 10.6% in Beef segment prices coupled with a decrease in slaughter volumes of 1.6% in the legacy Swift beef facilities and a 6.1% decrease in hog slaughter volumes in our Pork segment, which was partially offset by a 4.6% increase in Pork segment prices. The addition of smalls in Australia for the period ended March 29, 2009 was the primary driver of the decline in per unit selling prices in our Beef segment. For calculation of the price changes in the period subsequent to the Tasman Acquisition, we have used a 12 to 1 ratio of smalls to cattle equivalents based on relative weights. The value of the Australian dollar as compared to the U.S. dollar declined 27.0% between the two periods. The 1.6% decrease in slaughter volumes was primarily due to overall differences in market conditions, including demand and margins, and the 6.1% decrease in the Pork segment was primarily due to overall differences in market conditions, including demand and margins.

Cost of goods sold. Cost of goods sold totaled $3,123.4 million for the pro forma fiscal quarter ended March 29, 2009 as compared to $3,298.8 million for the pro forma fiscal quarter ended March 30, 2008. Cost of goods sold decreased $175.5 million, or 5.3%, for the pro forma fiscal quarter ended March 29, 2009 as compared to the pro forma fiscal quarter ended March 30, 2008. Cost of goods sold declined in our Beef segment as a result of an 11.7% decrease in cattle prices coupled with a 1.6% decrease in slaughter volumes in the legacy Swift beef facilities. In addition, we recorded a 0.2% decrease in cost of goods sold in our Pork segment driven by a 6.1% decrease in slaughter volumes, partially offset by a 7.2% increase in hog prices. We demonstrated reductions in per head cost for the following categories: lower freight costs, hourly wages including overtime, utilities costs (driven by lower natural gas prices), repairs and maintenance costs and storage costs.

Gross margin percentages. Gross margin percentage (gross profit as a percentage of net sales) was 2.3% for the pro forma fiscal quarter ended March 29, 2009 as compared to 1.4% for the pro forma fiscal quarter ended March 30, 2008. This increase reflected improvements in sales markets which place higher value on certain cuts, reductions in our operating costs and improvements in plant efficiency and yields. The increase also reflects a margin increase of 1.4% in our Beef segment, partially offset by a margin decrease of 1.5% in our Pork segment. Margin enhancements in our Beef segment reflect cost reductions due to renegotiation of supply contracts, elimination of certain third- party service providers (including cattle hotelling, lab services, and maintenance service providers) and the insourcing of these items at lower cost, operational yield enhancements which generated additional pounds to sell from each carcass and improved margins due to enhanced product mix resulting from the increases in volumes sold to international markets where products like the special cuts described above generate a higher return. Margin declines in our Pork segment were driven by a 7.2% increase in hog prices which could not be fully passed on through higher selling prices, especially for rendered products used for fuel for which demand and prices were lower due to lower petroleum product demand and prices from period to period.

Selling, general and administrative expenses. Selling, general and administrative expenses were $61.6 million for the pro forma fiscal quarter ended March 29, 2009 as compared to $51.6 million for the pro forma fiscal quarter ended March 30, 2008. These expenses increased by $10.0 million,

or 19.4%. During the pro forma fiscal quarter ended March 29, 2009, we reached an agreement to terminate our efforts to acquire National Beef, and as a result, we paid a breakage fee to the shareholders of National Beef totaling $19.9 million, and we recorded as an expense the related incurred legal costs totaling an additional $1.0 million. These non-recurring costs, totaling $20.9 million were recorded in selling, general and administrative expenses in the “Corporate and other” segment. This increase was partially offset by the effect of the depreciation of 27.0% in the value of the Australian dollar as compared to the U.S. dollar between the comparative fiscal quarters.

Foreign currency transaction, net. Foreign currency transaction, net for the pro forma fiscal quarter ended March 29, 2009 was a gain of $5.1 million as compared to a gain of $12.6 million for the pro forma fiscal quarter ended March 30, 2008. This $7.5 million decrease related to the variation in the value of the Australian dollar as compared to the U.S. dollar on our U.S. dollar-denominated intercompany note payable and receivable within Australia. The value of the Australian dollar as compared to the U.S. dollar depreciated 24.4% between the two period ends.

Interest expense, net. Interest expense was $24.6 million for the pro forma fiscal quarter ended March 29, 2009 as compared to $20.2 million for the pro forma fiscal quarter ended March 30, 2008. Interest expense increased by $4.4 million, or 21.8%, due primarily to increased borrowings under our revolving credit facility in 2009 that accrued interest at a higher average interest rate than the interest rate applicable to our intercompany loans in 2008.

Income tax expense, net. Income tax expense, net for the pro forma fiscal quarter ended March 29, 2009 was a benefit of $2.6 million as compared to an expense of $6.5 million for the pro forma fiscal quarter ended March 30, 2008. The expense for both periods relates mainly to our Australian operations as we had established a valuation allowance in the United States. Therefore, the $9.1 million decrease related to a decrease in our international income.

Net income. Our pro forma net income for the fiscal quarter ended March 29, 2009 was a loss of $4.3 million compared to a loss of $16.5 million in the prior period as a result of the factors described above.

Unaudited pro forma combined statement of operations for the fiscal year ended December 28, 2008


	JBS USA Holdings, Inc.			JBS Packerland			JBS Packerland			JBS Packerland			Five Rivers			Five Rivers			Adjustment for transaction					JBS USA Holdings, Inc.
	JBS USA Holdings, Inc.			JBS Packerland			JBS Packerland			JBS Packerland			Five Rivers			Five Rivers								JBS USA Holdings, Inc.
	Fiscal year ended December 28, 2008			December 31, 2007 through October 22, 2008 (a)(i)			Adjustment for 50% equity interest in Five Rivers (b)			Adjustment for assets not acquired (c)(i)			December 31, 2007 through October 22, 2008 (a)(ii)			Adjustment for assets not acquired (c)(ii)								Fiscal year ended December 28, 2008
	Historical			Historical									Historical									Notes		Pro forma

in thousands, except earnings per share	(+)			(+)			(-)			(-)			(+)			(-)			(+)

Net sales	$	12,362,281		$	2,548,224		$	—		$	4,923		$	1,461,140		$	912,920		$	(8,011	)	(d	)	$	15,445,791
Cost of goods sold		11,917,777			2,397,551			—			4,949			1,511,462			988,814			4,724		(d),(e	)		14,837,751

Gross profit (loss)		444,504			150,673			—			(26	)		(50,322	)		(75,894	)		(12,735	)				608,040
Selling, general and administrative expenses		148,785			78,793			—			24,017			11,093			9			4,052		(e	)		218,697
Foreign currency transaction losses		75,995			—			—			—			—			—			—					75,995
Other income, net		(10,107	)		44,465			39,139			5,555			(208	)		(74	)		—					(10,470	)
Loss on sales of property, plant and equipment		1,082			107			—			—			131			224			—					1,096
Interest expense, net		36,358			30,837			—			31,005			16,940			16,940			46,431		(f	)		82,621

Total expenses		252,113			154,202			39,139			60,577			27,956			17,099			50,483					367,939

Income (loss) from continuing operations before		192,391			(3,529	)		(39,139	)		(60,603	)		(78,278	)		(92,993	)		(63,218	)				240,101
Income tax expense		31,287			2,222			—			2,222			—			—			16,699		(g	)		47,986

Net income (loss)	$	161,104		$	(5,751	)	$	(39,139	)	$	(62,825	)	$	(78,278	)	$	(92,993	)	$	(79,917	)			$	192,115

Basic and diluted net income (loss) per share	$	1,611,040.00																						$	1,921,150.00

(a)

Represents the historical results of

(i)

JBS Packerland, and

(ii)

Five Rivers

for the period from December 31, 2007 through October 22, 2008.

(b)

(c)

Reflects the elimination of assets not acquired for

(i)

JBS Packerland, and

(ii)

Five Rivers.

The adjustment for assets not acquired includes (1) revenue and expenses associated with cattle owned by Smithfield Foods, Inc. that were retained by Smithfield Foods, Inc., (2) revenue and expenses associated with cattle owned by Five Rivers that were retained by Smithfield Foods, Inc., (3) the elimination of corporate overhead charge by Smithfield Foods, Inc. and (4) other assets and insignificant businesses not acquired and liabilities not assumed.

(d)

Reflects the elimination of $8.0 million of intercompany sales and $8.0 million of cost of goods sold between JBS Packerland and our Beef segment for the period from December 31, 2007 through October 22, 2008.

(e)

Represents the adjustment of $12.7 million to historical cost of goods sold and to selling, general and administrative expense of $4.1 million to reflect depreciation and amortization expense based on the estimated fair values and useful lives of identified tangible and intangible assets for JBS Packerland and Five Rivers based on a preliminary third-party valuation report. The purchase price allocation is preliminary pending completion of independent valuations of identified tangible and intangible assets acquired and certain liabilities acquired, including, but not limited to deferred taxes. The allocation of the purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of October 23, 2008 (in thousands), and the following table details the purchase price components:


Purchase price allocation:
Purchase price paid to previous shareholders	$537,068
Fees and direct expenses	26,134

Total purchase price	$563,202


Preliminary purchase price allocation:
Current assets and liabilities	$43,052
Property, plant and equipment(i)	423,955
Deferred tax liabilities	(142,997	)
Goodwill	95,998
Intangible assets(ii)	138,023
Other noncurrent assets and liabilities, net	5,171

Total purchase price allocation	$563,202

(i)


Furniture, fixtures, office equipment and other		5 to 7 years
Machinery and equipment		5 to 15 years
Buildings and improvements		15 to 40 years
Leasehold improvements		shorter of useful life or the lease term

(ii)

(f)

Reflects the following adjustments to interest expense, net relating to the transactions:


Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$ 467
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)	7,802
Interest expense, 11.625% senior unsecured notes due 2014(iii)	65,209
Interest expense, intercompany debt(iv)	(27,047	)

Total Interest expense, net(v)	$46,431

(i)

(ii)

(iii)

(iv)

(v)

(g)

Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

Unaudited pro forma combined statement of operations for the fiscal year ended December 30, 2007


	JBS USA Holdings, Inc.		JBS USA Holdings, Inc.		JBS Packerland		JBS Packerland		JBS Packerland		Five Rivers		Five Rivers						JBS USA Holdings, Inc.
	Dec. 25, 2006 to July 10, 2007 (a)		July 11, 2007 to Dec. 30, 2007 (a)		Dec. 25, 2006 through Dec. 30, 2007 (b)(i)		Adjust- ment for 50% equity interest in Five Rivers (c)		Adjust- ment for assets not acquired (d)(i)		Dec. 25, 2006 through Dec. 30, 2007 (b)(ii)		Adjust- ment for assets not acquired (d)(ii)		Adjust- ment for trans- action				Dec. 25, 2006 to Dec. 30, 2007
in thousands, except earnings per share	Historical		Historical		Historical						Historical						Notes		Pro forma

	(+)		(+)		(+)		(-)		(-)		(+)		(-)		(+)


Net sales	$	4,970,624	$	4,988,984	$	2,823,496	$	—	$	8,083	$	1,995,238	$	1,410,422	$	(6,091)	(e)		$	13,353,746
Cost of goods sold		4,920,594		5,013,084		2,750,464		—		41,475		1,941,093		1,393,107		18,917	(e),(f	),(g)		13,209,570

Gross profit (loss)		50,030		(24,100)		73,032		—		(33,392)		54,145		17,315		(25,008)				144,176
Selling, general and administrative expenses		92,333		60,727		60,850		—		1,938		12,953		—		10,012	(f),(g	)		234,937
Foreign currency transaction gains		(527)		(5,201)		—		—		—		—		—		—				(5,728)
Other income, net		(3,821)		(3,581)		(7,635)		(7,446)		(79)		(1,996)		(54)		—				(9,454)
(Gain) loss on sales of property, plant and equipment		(2,946)		182		133		—		—		324		—		—				(2,307)
Interest expense, net		66,383		34,340		41,056		—		41,056		27,972		28,136		(13,974)	(h	)		86,585

Total expenses		151,422		86,467		94,404		(7,446)		42,915		39,253		28,082		(3,962)				304,033

Income (loss) from continuing operations before income tax		(101,392)		(110,567)		(21,372)		7,446		(76,307)		14,892		(10,767)		(21,046)				(159,857)
Income tax expense (benefit)		(18,380)		1,025		—		—		—		—		—		18,236	(i	)		881

Net income (loss)	$	(83,012)	$	(111,592)	$	(21,372)	$	7,446	$	(76,307)	$	14,892	$	(10,767)	$	(39,282)			$	(160,738)

Basic and diluted net income (loss) per share(j)		N/A	$	(1,115,920.00)															$	(1,607,380.00)

(a)

Represents the historical results of JBS USA Holdings, Inc. for the period from December 25, 2006 through July 10, 2007 (predecessor) and the period from July 11, 2007 through December 30, 2007 (successor).

(b)

Represents the historical results of

(i)

JBS Packerland, and

(ii)

Five Rivers

for the period from December 25, 2006 through December 30, 2007.

(c)

Represents the elimination of the 50% equity interest in Five Rivers from the historical results of JBS Packerland for the period from December 25, 2006 through December 30, 2007. On a pro forma basis, the results of Five Rivers are reflected on a fully consolidated basis as part of the JBS Packerland Acquisition.

(d)

Reflects the elimination of assets not acquired for

(i)

JBS Packerland, and

(ii)

Five Rivers.

(e)

Reflects the elimination of $6.1 million of intercompany sales and $6.1 million of cost of goods sold between JBS Packerland and our legacy Swift Beef segment for the period from December 25, 2006 through December 30, 2007.

(f)

Represents the adjustment of $15.4 million to historical cost of goods sold and to selling, general and administrative expenses of $4.7 million to reflect an increase in depreciation and amortization expense based on the estimated fair values and useful lives of identified tangible and intangible assets for JBS Packerland and Five Rivers, based on a preliminary third-party valuation report. The purchase price allocation is preliminary pending completion of independent valuations of identified tangible and intangible assets acquired and certain liabilities acquired, including, but not limited to deferred taxes. The allocation of the purchase price presented below is preliminary and subject to change. The allocation presented below reflects the estimated fair value of the individual assets and liabilities as of October 23, 2008 (in thousands), and the following table details the purchase price components:


Purchase price allocation:
Purchase price paid to previous shareholders	$537,068
Fees and direct expenses	26,134

Total purchase price	$563,202


Preliminary purchase price allocation:
Current assets and liabilities	$43,052
Property, plant and equipment(i)	423,955
Deferred tax liabilities	(142,997	)
Goodwill	95,998
Intangible assets(ii)	138,023
Other noncurrent assets and liabilities, net	5,171

Total purchase price allocation	$563,202

(i)


Furniture, fixtures, office equipment and other		5 to 7 years
Machinery and equipment		5 to 15 years
Buildings and improvements		15 to 40 years
Leasehold improvements		shorter of useful life or the lease term

(ii)

Intangible assets include customer relationships and customer contracts resulting from the JBS Packerland Acquisition which are being amortized on an accelerated basis over 21 and 10 years, respectively. These represent management’s estimates of the period of expected economic benefit and annual customer profitability.

(g)

Represents the adjustment of $9.6 million to historical cost of goods sold and $5.3 million to selling, general and administrative expenses to reflect depreciation and amortization expense based on the fair values and useful lives of identified tangible and intangible assets for the Swift Acquisition. The aggregate purchase price for the acquisition was $1,470.6 million (including approximately $48.5 million of transaction costs). We accounted for the acquisition in accordance with the Statement of Financial Accounting Standard No. 141, Business Combinations.

(h)

Reflects the following adjustments to interest expense, net relating to the transactions:


Debt issuance amortization, 11.625% senior unsecured notes due 2014(i)	$	467
Debt discount accretion, 11.625% senior unsecured notes due 2014(ii)		7,802
Interest expense, 11.625% senior unsecured notes due 2014(iii)		65,209
Interest expense, predecessor(iv)		(102,573)
Interest expense, successor(v)		15,121

Total Interest expense, net(vi)	$	(13,974)

(i)

Includes pro forma interest expense for the amortization of debt issuance costs on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 25, 2006 through December 30, 2007, calculated on a straight-line basis.

(ii)

Includes pro forma interest expense for the accretion of the bond discount on $560.9 million of our 11.625% senior unsecured notes due 2014 for the period from December 25, 2006 through December 30, 2007, calculated on a straight-line basis.

(iii)

(iv)

Includes pro forma elimination of predecessor interest expense for the period from December 25, 2006 through December 30, 2007 related to debt that was repaid in connection with the Swift Acquisition.

(v)

Includes pro forma interest expense related to the residual outstanding balance of $230.4 million on unsecured bank loans resulting from the reduction of an initial $750.0 million in aggregate principal amount of those unsecured bank loans in connection with the Swift Acquisition reduced by the pro forma application of the net proceeds of $519.6 million in aggregate principal amount of 11.625% senior unsecured notes due 2014, calculated using an average interest rate of 6.37%.

(vi)

We have applied the adjustments in clauses (i), (ii) and (iii) above to $560.9 million in proceeds, bond discount and debt issuance costs of our 11.625% senior unsecured notes due 2014 because that is the amount of debt we would have to have issued to repay the portion of our intercompany loans from JBS S.A. described in clause (v) above. The total principal amount of our 11.625% senior secured notes due 2014 is $700.0 million, and our pro forma interest expense accordingly does not purport to be indicative of what our interest expense will be in the future.

(i)

Reflects the tax effect of the pro forma adjustments at an estimated 35% effective tax rate.

(j)

Pro forma fiscal year ended December 28, 2008 (53 weeks) compared to the pro forma fiscal year ended December 30, 2007 (52 weeks)

Net sales. Net sales were $15,445.8 million for the pro forma fiscal year ended December 28, 2008 as compared to $13,353.7 million for the pro forma fiscal year ended December 30, 2007. Net sales increased by $2,092.0 million, or 15.7%, primarily reflecting an overall 7.3% increase in volume combined with a 3.9% overall increase in sales prices. The volume increase was primarily due to an additional week of operating activity in the fiscal year ended December 28, 2008, coupled with increases in production volumes from the ramp-up of the Greeley plant’s second shift commencing in September 2007. The sales price increase included a 4.1% increase in Beef prices and a 2.2% increase in Pork prices. Volumes increased 13.0% in our Beef segment and 3.8% in our Pork segment. The volume increases in our Pork segment occurred across all of our facilities. The volume increases in our Beef segment were driven primarily by adding the second shift of production at our Greeley plant, but they also included volume increases at all of our Beef segment plants in the United States. In part, these volume increases were attributable to the return in mid-year 2008 of the South Korean beef market, as well as the identification of markets which maximize the margin of certain cuts, such as short rib to South Korea, picanha to Brazil, and the introduction of Australian meat to South American markets. For calculation of the price changes in the period subsequent to the Tasman Acquisition, we have used a 12 to 1 ratio of smalls to cattle equivalents based on relative weights. The value of the Australian dollar average exchange rate relative to the U.S. dollar declined 0.1% between the two periods, which negatively affected net sales from our Australian operations in U.S. dollar terms.

Cost of goods sold. Cost of goods sold totaled $14,837.8 million for the pro forma fiscal year ended December 28, 2008 as compared to $13,209.6 million for the pro forma fiscal year ended December 30, 2007. The increase, of $1,628.2 million, or 12.3%, was partially due to an additional week of operating activity in the fiscal year ended December 28, 2008. Cost of goods sold increased 13.7% in our Beef segment as a result of a 0.6% increase in cattle prices and a 13.0% increase in slaughter volumes, coupled with a 5.6% increase in our Pork segment driven by a 1.7% increase in hog prices and a 3.8% increase in slaughter volumes. Although total cost of sales increased year over year due to increased production volumes, we demonstrated reductions in per head cost for the following categories: renegotiation of contracts, operational performance improvements, packaging, freight, hourly labor, overtime, maintenance, contract services and operating supplies.

Gross margin percentages. Gross margin percentage (gross profit as a percentage of net sales) was 3.9% for the pro forma fiscal year ended December 28, 2008 as compared to 1.1% for the pro forma fiscal year ended December 30, 2007. This increase reflects improvements in sales to

markets which place higher value on certain cuts, reductions in our operating costs and improvements in plant efficiency and yields. This increase reflects a margin increase of 3.4% in our Beef segment and a margin increase of 0.5% in our Pork segment. Margin enhancements in our Beef segment reflect cost reductions due to the renegotiation of supply contracts, elimination of certain third-party service providers (including cattle hotelling, lab services and maintenance service providers) and the insourcing of these items at lower cost, operational yield enhancements which generated additional pounds to sell from each carcass and improved margins due to enhanced product mix resulting from the increases in volumes sold to international markets where products like the special cuts described above generate a higher return.

Selling, general and administrative expenses. Selling, general and administrative expenses were $218.7 million for the pro forma fiscal year ended December 28, 2008 as compared to $234.9 million for the pro forma fiscal year ended December 30, 2007. These expenses decreased by $16.2 million, or 6.9%. The reduction in selling, general and administrative costs was a result of increased management focus on spending, the elimination of outside consultants, reductions in professional service fees and reductions in the number of executive management personnel in mid-2007 for which a full year of cost savings is reflected in fiscal 2008, partially offset by the inclusion of higher management incentives in fiscal 2008 due to improved business performance. In addition, the 0.1% decrease in the value of the Australian dollar relative to the U.S. dollar between the periods contributed to the decrease in expenses, partially offset by the additional week of operating expenses for the period ended December 28, 2008.

Foreign currency transaction, net. Foreign currency transaction, net for the pro forma fiscal year ended December 28, 2008 was a loss of $76.0 million as compared to a gain of $5.7 million for the pro forma fiscal year ended December 30, 2007. This decrease of $81.7 million related to the variation in the exchange rate relating to the U.S. dollar-denominated intercompany note payable and receivable in Australia. The value of the Australian dollar relative to the U.S. dollar decreased 20.1% between the two periods.

Interest expense, net. Interest expense, net was $82.6 million for the pro forma fiscal year ended December 28, 2008 as compared to $86.6 million for the pro forma fiscal year ended December 30, 2007. Interest expense, net decreased by $4.0 million, or 4.6%, due primarily to reduced borrowings.

Income tax expense, net. Income tax expense, net for the pro forma fiscal year ended December 28, 2008 was $48.0 million as compared to $1.0 million for the pro forma fiscal year ended December 30, 2007. This $47.0 million decrease is related primarily to a change in our valuation allowance due to the JBS Packerland Acquisition in which we acquired additional deferred tax liabilities.

Net income. Our pro forma net income for the fiscal year ended December 28, 2008 was $192.1 million as compared to a net loss of $160.7 million for the fiscal year ended December 30, 2007.

Liquidity and capital resources

Our ongoing operations require the availability of funds to service debt, fund working capital needs, invest in our business, and pay our liabilities. We currently finance and expect to continue to finance these activities through cash flow from operations and from amounts available under our senior secured revolving credit facility.

As of March 29, 2009, we had working capital of $745.7 million compared to $829.1 million as of December 28, 2008. The decrease from December 2008 is primarily due to normal seasonality factors in the beef and pork industries. Our average Days Inventory Outstanding, or DIO, and Days Sales Outstanding, or DSO, for the fiscal quarter ended March 29, 2009 were 18.9 and 14.6, respectively, compared to 20.1 and 16.2, respectively, for the fiscal quarter ended March 30, 2008. We consider accounts receivable and inventory to be readily convertible to cash and an additional source of cash liquidity as compared to companies and industries with longer DSO or DIO.

We believe that cash on hand, cash flows from operations, availability under our senior secured revolving credit facility and other long-term borrowings will be sufficient to meet ongoing operating requirements, make scheduled principal and interest payments on debt, and fund ordinary capital expenditures for the foreseeable future. Our ability to generate sufficient cash, however, is subject to certain general economic, financial, industry, legislative, regulatory and other factors beyond our control. Capital expenditures for 2009 are expected to approximate $150 million, of which approximately 50% is expected to be for maintenance and the remainder for major renewals, improvements and the development of new processing capabilities. We anticipate that we may spend approximately $1.5 billion to $2.0 billion from 2010 through 2012, of which approximately $500 million is expected to be for maintenance, major renewals, improvements and the development of new processing capabilities, and the remainder, or approximately $1.0 to 1.5 billion, may be used to fund our strategy to enhance our direct distribution capabilities.

Cash flows

Operating activities. Net cash provided by (used in) operating activities increased to $282.1 million for the fiscal year ended December 28, 2008 as compared to $(110.7) million for the 173-day period from July 11, 2007 through December 30, 2007 (successor) and $(107.8) million for the 198-day period December 25, 2006 to July 10, 2007 (predecessor), respectively. The primary source of operational cash flow improvements was improved operational results between the periods driven by increased volumes, higher sales margins and lower operating costs, coupled with a deferred revenue advance payment of $175.0 million. See “—External sources of liquidity and description of indebtedness—Customer advance payment relating to raw material supply agreement.”

Net cash provided by (used in) operating activities increased by $179.9 million to $51.0 million for the fiscal quarter ended March 29, 2009 as compared to $(128.9) million for the fiscal quarter ended March 30, 2008. The increase is attributable to improved margins which are the result of improvements in our sales product mix, identification of higher value markets for certain of our products, reduction in our manufacturing costs and improved operational efficiencies including year-over-year inventory management.

Investing activities. Cash used in investing activities totaled $783.7 million for the fiscal year ended December 28, 2008 as compared to cash used of $39.4 million for the 173-day period July 11, 2007 through December 30, 2007 (successor) and $27.8 million for the 198-day period December 25, 2006 to July 10, 2007 (predecessor), respectively. The primary factors in the increase in investments were the JBS Packerland and Tasman Acquisitions during the fiscal year ended December 28, 2008.

Cash used in investing activities totaled $206.4 million for the fiscal year quarter ended March 29, 2009 as compared to cash used of $15.4 million for the fiscal quarter ended March 30, 2008. The increase in cash used was primarily due to the issuance by us of a $171.3 million note receivable

to an unconsolidated affiliate. The cash we loaned to the affiliate was used to acquire live cattle to feed in the Five Rivers feedlots and ultimately to be delivered for processing to our Beef segment plants. See “Certain relationships and related party transactions—Arrangements with J&F Oklahoma—Cattle purchase and sale agreement.”

Financing activities. For the fiscal year ended December 28, 2008, cash provided by financing activities totaled $571.3 million, as compared to cash provided by financing activities of $346.7 million for the 173-day period July 11, 2007 through December 30, 2007 (successor) and $100.5 million for the 198-day period December 25, 2006 to July 10, 2007 (predecessor), respectively. The primary source of the increase in financing activities was the increase in capital contributions from our parent and intercompany borrowings as compared to the prior year periods.

Cash provided by financing activities totaled $55.7 million for the fiscal quarter ended March 29, 2009, an increase of $22.1 million from the fiscal quarter ended March 30, 2008. The increase resulted primarily from increased borrowings under our senior secured revolving credit facility in the current year while the prior year funding was from investments from JBS S.A., net of payments on outstanding debt.

External sources of liquidity and description of indebtedness

Our primary financing objective is to maintain a balance sheet that provides the flexibility to pursue our business strategy. To finance our working capital needs, we utilize cash flow from operations and borrow from our senior secured revolving credit facility in addition to a combination of equity and long-term debt to finance non-current assets.

Senior secured revolving credit facility

On November 5, 2008, we entered into a senior secured revolving credit facility that allows borrowings up to $400.0 million, and terminates on November 5, 2011. On April 22, 2009, we entered into an amendment to our senior secured revolving facility that allows us to request an increase in the size of the facility to $500.0 million, to the extent we receive additional commitments.

Up to $75.0 million of the revolving credit facility is available for the issuance of letters of credit. Borrowings that are index rate loans will bear interest at a per annum rate equal to the prime rate plus a margin of 2.25% while LIBOR rate loans will bear interest at a per annum rate equal to the applicable LIBOR rate plus a margin of 3.25%. At March 29, 2009, the rates were 5.50% and 3.75%, respectively. Upon approval by the lender, LIBOR rate loans may be taken for one, two-, or three-month terms (or six months at the discretion of the agent under our senior secured revolving credit facility).

Availability. Availability under our senior secured revolving credit facility is subject to a borrowing base. The borrowing base is based on certain of our domestic wholly owned subsidiaries’ assets as described below, with the exclusion of Five Rivers. The borrowing base consists of percentages of eligible accounts receivable, inventory, and supplies and less certain eligibility and availability reserves. As of March 29, 2009, our borrowing base totaled $303.6 million.

Security and guarantees. Borrowings made by us and all guarantees of those borrowings are collateralized by a first priority perfected lien and interest in accounts receivable, inventory, and general intangibles related thereto and proceeds of the foregoing.

Covenants. Our senior secured revolving credit facility contains customary representations and warranties and a springing financial covenant that requires a minimum fixed charge coverage ratio of not less than 1.15 to 1.00. The fixed charge coverage ratio is defined as the ratio of EBITDA to fixed charges, each as defined in our senior secured revolving credit facility. This ratio is only applicable if borrowing availability falls below the minimum threshold, which is the greater of 20% of the aggregate commitments or $70.0 million. Our senior secured revolving credit facility also contains negative covenants that limit our ability and the ability of our subsidiaries to, among other things:

•

make capital expenditures greater than $175.0 million per year;

•

incur additional indebtedness;

•

create liens on property, revenue, or assets;

•

make certain loans or investments;

•

sell or dispose of assets;

•

pay certain dividends and other restricted payments;

•

prepay, cancel or amend certain indebtedness;

•

dissolve, consolidate, merge, or acquire the business or assets of other entities;

•

enter into joint ventures other than certain permitted joint ventures or create certain other subsidiaries;

•

enter into new lines of business;

•

enter into certain transactions with affiliates; and

•

enter into sale/leaseback transactions.

Events of default. Our senior secured revolving credit facility also contains customary events of default, including failure to perform or observe terms, covenants or agreements included in our senior secured revolving credit facility, payment of defaults on other indebtedness, defaults on other indebtedness if the effect is to permit acceleration, entry of unsatisfied judgments or orders against a loan party or its subsidiaries, failure of any collateral document to create or maintain a priority lien, and certain events related to bankruptcy and insolvency or ERISA matters. If an event of default occurs the lenders under our senior secured revolving credit facility may, among other things, terminate their commitments, declare all outstanding borrowings to be immediately due and payable together with accrued interest, and fees and exercise remedies under the collateral documents relating to our senior secured revolving credit facility. At March 29, 2009, we were in compliance with all covenants.

11.625% senior unsecured notes due 2014

Our wholly owned subsidiaries JBS USA, LLC and JBS USA Finance, Inc. issued 11.625% notes due 2014 in an aggregate principal amount of $700.0 million on April 27, 2009. These notes are guaranteed by JBS S.A., us, JBS Hungary Holdings Kft. (a wholly owned, indirect subsidiary of JBS S.A., the selling stockholder in this offering and our direct controlling stockholder), and each of our U.S. restricted subsidiaries that guarantee our senior secured revolving facility (subject to certain exceptions). Interest on these notes accrues at a rate of 11.625% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2009. The principal amount of these notes is payable in full on May 1, 2014.

Covenants. The indenture for the 11.625% senior unsecured notes due 2014, contains customary negative covenants that limit our, JBS USA, LLC’s and restricted subsidiaries’ ability to, among other things:

•

incur additional indebtedness subject to complying with certain net debt to EBITDA incurrence ratios;

•

incur liens;

•

sell or dispose of assets;

•

pay dividends or make certain payments to our shareholders;

•

permit restrictions on dividends and other restricted payments by its restricted subsidiaries;

•

enter into related party transactions;

•

enter into sale/leaseback transactions; and

•

undergo changes of control without making an offer to purchase the notes.

Events of default. The indenture also contains customary events of default, including failure to perform or observe terms, covenants or other agreements in the indenture, defaults on other indebtedness if the effect is to permit acceleration, failure to make a payment on other indebtedness waived or extended within the applicable grace period, entry of unsatisfied judgments or orders against the issuer or its subsidiaries, and certain events related to bankruptcy and insolvency matters. If an event of default occurs, the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding, may declare such principal and accrued interest on the notes to be immediately due and payable.

Guarantee of 10.50% senior notes due 2016 of JBS S.A.

On August 4, 2006, JBS S.A. issued 10.50% senior notes due 2016, or the 2016 Notes, in an aggregate principal amount of $300.0 million. Interest on the 2016 Notes accrues at a rate of 10.50% per annum and is payable semi-annually in arrears on February 4 and August 4 of each year, beginning on February 4, 2007. The principal amount of the 2016 Notes is payable in full on August 4, 2016.

Guarantees. The indenture governing the 2016 Notes requires any significant subsidiary (any subsidiary constituting at least 20% of JBS S.A.’s total assets or annual gross revenues, as shown on the latest financial statements of JBS S.A.) to guarantee all of JBS S.A.’s obligations under the 2016 Notes. The 2016 Notes are guaranteed by JBS Hungary Holdings Kft. (a wholly owned, indirect subsidiary of JBS S.A., the selling stockholder in this offering and our direct controlling stockholder), our company and our subsidiaries, JBS USA Holdings, Inc., JBS USA, LLC and Swift Beef Company. Additional subsidiaries of JBS S.A. (including our subsidiaries) may be required to guarantee the 2016 Notes in the future.

Covenants. The indentures, for the 10.50% senior notes due 2016 contain customary negative covenants that limit the ability of JBS S.A. and its subsidiaries (including us) to, among other things:

•

incur additional indebtedness;

•

incur liens;

•

sell or dispose of assets;

•

pay dividends or make certain payments to JBS S.A.’s shareholders;

•

permit restrictions on dividends and other restricted payments by its subsidiaries;

•

enter into related party transactions;

•

enter into sale/leaseback transactions; and

•

undergo changes of control without making an offer to purchase the notes.

Events of default. The indentures also contain customary events of default, including for failure to perform or observe terms, covenants or other agreements in the indenture, defaults on other indebtedness if the effect is to permit acceleration, failure to make a payment on other indebtedness waived or extended within the applicable grace period, entry of unsatisfied judgments or orders against the issuer or its subsidiaries, and certain events related to bankruptcy and insolvency matters. If an event of default occurs, the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding, may declare such principal and accrued interest on the notes to be immediately due and payable.

Unsecured Australian revolving credit facility

Our Australian subsidiary Swift Australia Pty Limited, entered into an Australian dollar denominated, or A$120 million unsecured revolving credit facility on February 26, 2008 to fund working capital and letter of credit requirements. Under this facility, A$80 million can be borrowed for cash needs, and A$40 million is available to fund letters of credit. Borrowings are made at the cash advance rate (BBSY) plus a margin of 0.975% plus a commitment fee of 0.1%. This credit facility contains certain financial covenants which require JBS Holdco Australia Pty Ltd and its subsidiaries to maintain predetermined ratio levels related to interest coverage, debt coverage, tangible net worth and current assets to current liabilities. As of March 29, 2009, Swift Australia Pty Limited was in compliance with all covenants and had U.S.$34.6 million outstanding. This facility will terminate on October 1, 2009. We intend to seek to refinance this facility. The lenders under this facility may terminate the facility if the ratings of JBS S.A. are downgraded.

Secured Australian credit facility

Our Australian subsidiary Swift Australia (Southern) Pty Limited (formerly known as Tasman Group Services Pty Ltd A.C.N.), entered into an A$80 million secured revolving credit facility on May 2, 2008. Under this facility, up to (1) A$50 million can be borrowed to provide funding relating to the Tasman Acquisition, (2) A$15 million may be used to provide working capital and to fund letters of credit, and (3) A$15 million may be used to finance payroll and general expenses. This credit facility contains covenants that limit the borrowers’ ability to, among other things, repay loans, make redemptions of equity, create liens, raise any financial accommodation from any other party, merge with or acquire another company or entity and dispose of assets. The credit amount is secured by certain registered mortgages and a subordination agreement over intercompany loan providers. As of March 29, 2009, we were in compliance with all covenants and had U.S. $36.8 million outstanding. This facility will terminate on October 1, 2009. We intend to seek to refinance this facility.

Cactus bonds

On May 15, 2007, we entered into an Installment Bond Purchase Agreement with the city of Cactus, Texas. Under this agreement, we committed to purchase up to $26.5 million of bonds from the city of Cactus, which are being issued to fund improvements to the city’s sewer system, which is used by our beef processing plant located in Cactus, Texas. We will purchase the bonds in installments as improvements are completed through an anticipated date of June 2010. The interest rate on the bonds is six-month LIBOR plus 350 basis points. The bonds mature on June 1, 2032 and are subject to annual mandatory sinking fund redemption payments beginning on June 1, 2011. We have purchased $12.0 million in bonds as of March 31, 2009 and expect to purchase the remaining $14.5 million in 2009.

Related party debt

As of March 31, 2009, we owed an aggregate of $658.6 million under various intercompany loans from JBS S.A., which were subsequently assigned to JBS HU Liquidity Management LLC (Hungary), a wholly owned, indirect subsidiary of JBS S.A. The proceeds of these intercompany loans were used to fund our operations, the Tasman Acquisition and the JBS Packerland Acquisition. On April 27, 2009, in connection with the issuance of the 11.625% senior unsecured notes due 2014 by our subsidiary JBS USA LLC, these intercompany loan agreements were consolidated into one loan agreement, the maturity dates of the principal of the intercompany loans were extended to April 18, 2019, and the interest rate was changed from approximately 6.5% to 12% per annum. The net proceeds of the offering of the 11.625% senior unsecured notes due 2014 (other than $100.0 million) were used to repay accrued interest and a portion of the principal on these intercompany loans. As of May 31, 2009, we owed an aggregate principal amount of $133.0 million under the consolidated intercompany loan agreement. In addition, we recently entered into an additional intercompany term loan agreement in the aggregate principal amount of $6.0 million on the same terms as the consolidated intercompany loan agreement.

Customer advance payment relating to raw material supply agreement

On October 22, 2008, we received an advance cash payment of $175 million relating to a raw material supply agreement entered into on February 27, 2008 pursuant to which we granted a customer the exclusive right to collect a certain beef fabrication by-product from all of our U.S. beef plants for the term of the agreement. This customer advance payment is recorded as deferred revenue in our audited financial statements and is amortized as sales revenue as the agreed upon by-product is delivered to the customer over the term of the agreement. The customer advance payment is secured by a note agreement, which bears interest at two-month LIBOR plus 200 basis points and provides the lender with an option to convert the outstanding amount of the loan under the note agreement into our common stock upon the occurrence and continuance of any event of default under the note agreement.

Dividend restrictions

Certain covenants of our debt agreements include restrictions on our ability to pay dividends. As of December 28, 2008 and March 29, 2009, we had $22.7 million and $17.7 million, respectively, of retained earnings available to pay dividends.

Covenant compliance

JBS S.A. pro forma net debt to EBITDA ratio

The terms and conditions of (1) our 11.625% senior unsecured notes due 2014 and (2) JBS S.A.’s 10.50% senior notes due 2016 both include a covenant prohibiting JBS S.A. and its subsidiaries, including us, from incurring any debt (subject to certain exceptions) unless JBS S.A.’s pro forma net debt to EBITDA ratio at the date of such incurrence is less than 4.5 to 1.0.

The terms and conditions of both of these notes define:

•

the Net Debt to EBITDA ratio as the ratio of JBS S.A.’s Net Debt to JBS S.A.’s EBITDA for the then most recently concluded period of four consecutive fiscal quarters, subject to adjustments for asset dispositions and investments made during the period;

•

Net Debt at any time as the aggregate amount of debt of JBS S.A. and its subsidiaries (including us) less the sum of cash, cash equivalents and marketable securities recorded as current assets (except for any capital stock in any person); and

•

EBITDA for any period as to JBS S.A. and its subsidiaries (on a consolidated basis) as

•

aggregate net income (or loss) plus

•

current and deferred income tax and social contribution; minus

•

non-operating income (expense), net; plus

•

equity in the earnings (loss) of subsidiary companies; plus

•

financial income (expenses), net; plus

•

any depreciation or amortization;

as each such item is reported on the most recent financial statements or financial information prepared in accordance with generally accepted accounting principles in Brazil.

JBS S.A. has informed us that it believes it will be able to comply with this financial ratio for the foreseeable future to the extent that it or any of its subsidiaries decides to incur debt.

JBS USA, LLC pro forma net debt to EBITDA ratio

In addition, our 11.625% senior unsecured notes due 2014 include a covenant prohibiting our subsidiary, JBS USA, LLC and its subsidiaries that are guaranteeing the 11.625% senior unsecured notes due 2014 from incurring any debt or issuing any disqualified capital stock (subject to certain exceptions) unless JBS USA, LLC’s pro forma net debt to EBITDA ratio at the date of such incurrence and the application of the proceeds therefrom, would be less than 3.0 to 1.0. The co-issuers of our 11.625% senior unsecured notes due 2014 were our wholly-owned subsidiaries JBS USA, LLC and JBS USA Finance, Inc.

The calculation of the net debt to EBITDA ratio thereunder is calculated based on the net debt and EBITDA of JBS USA, LLC and its restricted subsidiaries, and not our company.

The terms and conditions of these notes define:

•

the Net Debt to EBITDA ratio as of any date of determination (the “Calculation Date”) the ratio of JBS USA, LLC’s Net Debt as of the Calculation Date to consolidated EBITDA for JBS USA, LLC and its restricted subsidiaries for the period of the then most recently concluded period of four consecutive fiscal quarters, subject to adjustments for asset dispositions and investments made during the period;

•

Net Debt at any time as the aggregate amount of debt of JBS USA, LLC and its restricted subsidiaries less the sum of cash, cash equivalents and marketable securities recorded as current assets (except for any capital stock in any person); provided that Net Debt shall include the aggregate principal amount of JBS S.A.’s 10.50% senior notes due 2016 and any other debt of JBS S.A. that may be guaranteed by JBS USA, LLC or its restricted subsidiaries; and

•

consolidated EBITDA of JBS USA, LLC and its restricted subsidiaries for any period as

(1)

consolidated net income for such period, subject to certain adjustments, minus

(2)

the sum of:

(a)

income tax credits;

(b)

interest income;

(c)

gain from extraordinary items;

(d)

any aggregate net gain (but not any aggregate net loss) arising from the sale, exchange or other disposition of capital assets by JBS USA, LLC and its restricted subsidiaries (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities); and

(e)

any other non-cash gains that have been added in determining consolidated net income,

in each case to the extent included in the calculation of consolidated net income of JBS USA, LLC in accordance with GAAP, but without duplication, plus

(3)

the sum of:

(a)

any provision for income taxes;

(b)

consolidated interest expense;

(c)

loss from extraordinary items;

(d)

depreciation and amortization;

(e)

any aggregate net loss (but not any aggregate net gain) arising from the sale, exchange or other disposition of capital assets by JBS USA, LLC (including any fixed assets, whether tangible or intangible);

(f)

amortized debt discount;

(g)

the amount of any deduction to consolidated net income as the result of any grant to any members of the management of JBS USA, LLC or its restricted subsidiaries of any equity interests; and

(h)

any other non-cash losses that have been deducted in determining consolidated net income (other than non-cash losses related to write-downs or write-offs of accounts receivable or inventory);

in each case to the extent included in the calculation of consolidated net income of JBS USA, LLC in accordance with GAAP, but without duplication, and as further adjusted to exclude certain non-cash items and non-recurring items.

For purposes of this covenant, consolidated net income is adjusted to exclude, among other things, (1) income from restricted subsidiaries to the extent that the payment of dividends or similar distributions by the restricted subsidiaries is not permitted by law or any agreement to which the restricted subsidiaries are parties, (2) income of any entity in which JBS USA, LLC has a joint interest, except to the extent of the dividends or other distributions actually paid to JBS USA, LLC or one of its wholly owned restricted subsidiaries and (3) certain non-cash items and non-recurring items.

As mentioned above, the calculation of our net debt to EBITDA ratio is calculated based on the net debt and EBITDA of JBS USA, LLC and its restricted subsidiaries, and not our net debt and EBITDA. We had Adjusted EBITDA of $537.7 million on a pro forma basis in the fiscal year ended December 28, 2008 and $66.1 million in the fiscal quarter ended March 29, 2009. For these same periods, JBS USA, LLC and its restricted subsidiaries had Adjusted EBITDA of $398.2 million and $67.1 million, respectively. The main differences between our Adjusted EBITDA and JBS USA, LLC and its restricted subsidiaries’ Adjusted EBITDA are that JBS USA, LLC’s Adjusted EBITDA excludes (1) Five Rivers’ consolidated net income because Five Rivers is currently an unrestricted subsidiary under the 11.625% senior unsecured notes due 2014 and (2) the payment by us (and not JBS USA, LLC) of a one-time breakage fee to the shareholders of National Beef totaling $19.9 million as full and final settlement of any and all liabilities relating to the potential acquisition of National Beef in the first quarter ended March 29, 2009 that we (and not JBS USA, LLC) recorded as a non-recurring expense. For the Five Rivers’ assets that we acquired, Five Rivers had consolidated pro forma net income of $9.6 million for the period from January 1, 2008 through October 22, 2008 and $2.9 million for the period from October 23, 2008 through December 28, 2008.

We had net debt of $657.6 million on a pro forma basis as of December 28, 2008 and $854.5 million on a pro forma basis as of March 29, 2009. We calculated pro forma net debt as of December 28, 2008 as pro forma total debt of $910.0 minus pro forma cash and cash equivalents of $252.4 million and pro forma net debt as of March 29, 2009 as total debt of $1,008.8 million minus cash and cash equivalents of $154.3 million. For these same periods, JBS USA, LLC and its restricted subsidiaries had net debt of $(35.1) million and $161.8 million, respectively. JBS USA, LLC calculated net debt as of December 28, 2008 as total debt of $219.7 million minus cash and cash equivalents of $254.8 million and net debt as of March 29, 2009 as total debt of $318.5 million minus cash and cash equivalents of $156.7 million. The main differences between our net debt and the net debt of JBS USA, LLC and its restricted subsidiaries are that (1) JBS USA, LLC’s net debt excludes Five Rivers’ debt and cash because Five Rivers is an unrestricted subsidiary and (2) JBS USA, LLC’s guarantee of JBS S.A.’s 10.50% senior notes due 2016 would also be included in JBS USA, LLC’s net debt (and not in ours) for purposes of calculating its net debt to EBITDA ratio.

For the four fiscal quarters ended June 30, 2009, JBS USA, LLC had a net debt to EBITDA ratio of to 1.00. We cannot assure you that JBS USA, LLC will not need to incur additional indebtedness at a time when its net debt to EBITDA ratio is equal to or greater than 3.0 to 1.0. JBS USA, LLC’s compliance with this covenant could limit its flexibility in planning for, or reacting to changes in, our business by limiting the funds that we can seek to borrow or raise in the capital markets to pursue capital expenditures, acquisitions, our distribution strategy or other plans.

We have included this calculation of JBS USA, LLC’s net debt, EBITDA and net debt to EBITDA ratio, as we believe that this ratio is important to investors, and the indenture governing our 11.625% senior unsecured notes due 2014 is a material debt agreement for us.

Contractual obligations

The following table summarizes our contractual obligations as of December 28, 2008:


in millions	2009		2010		2011		2012		2013		After year 5		Total


Contractual obligations:
Revolving credit facilities	$	67.0	$	—	$	114.7	$	—	$	—	$	—	$	181.7
Related party debt		—		658.6		—		—		—		—		658.6
Deferred revenue		18.0		18.0		18.0		18.0		18.0		83.2		173.2
Interest(1)		59.8		54.2		12.1		6.3		6.0		15.8		154.2
Capital lease obligations		3.2		3.0		2.6		2.3		2.4		13.2		26.7
Operating leases(2)		17.4		13.4		11.0		4.9		4.1		5.1		55.9
Installment note payable		1.3		1.3		0.9		0.9		6.9		—		11.3

Purchase obligations:
Livestock procurement(3)		3,395.2		1,035.1		862.4		710.2		483.7		99.1		6,585.7
Cactus bonds(4)		14.5		—		—		—		—		—		14.5
Other(5)		—		—		—		—		—		16.2		16.2

Total contractual obligations	$	3,576.4	$	1,783.6	$	1,021.7	$	742.6	$	521.1	$	232.6	$	7,878.0

(1)

Interest expense assumes the continuation of interest rates and outstanding borrowings under our credit facilities as of December 28, 2008.

(2)

Excludes amounts associated with operating leases having remaining non-cancelable lease terms of one year or less.

(3)

Represents hog and cattle purchase agreements with certain hog and cattle producers. The number of animals that we will be obligated to purchase is based on minimum quantity commitments to the extent the agreements contain those commitments, or management estimates based on past history for such hog and cattle purchases. The contracts are subject to market pricing at delivery. Due to the uncertainty of market prices at the time of future delivery we have estimated market prices based on futures contracts and applied those prices to all years. Cattle purchase agreements are short-term contracts with renewal options. Therefore, cattle purchase commitments have only been estimated through year one. See Note 13, “Commitments and contingencies” to our audited consolidated financial statements included in this prospectus.

(4)

On May 15, 2007, we entered into an Installment Bond Purchase Agreement with the City of Cactus, Texas, or the City. Under this agreement, we committed to purchase up to $26.5 million of bonds from the City, which are being issued to fund improvements to its sewer system, which is used by our beef processing plant located in Cactus, Texas. We will purchase the bonds in installments as improvements are completed through an anticipated date of June 2010. The interest rate on the bonds is six-month LIBOR plus 350 basis points. The bonds mature on June 1, 2032 and are subject to annual mandatory sinking fund redemption payments beginning on June 1, 2011. We have purchased $12.0 million in bonds as of December 28, 2008 and expect to purchase the remaining $14.5 million in 2009.

(5)

Includes certain obligations for capital expenditures and other insignificant purchase obligations.

The following table summarizes our contractual obligations, on a pro forma basis as of March 29, 2009, giving effect to the offering and sale of our 11.625% senior unsecured notes due 2014 and the application of the proceeds therefrom as if they had occurred on March 29, 2009 (including the use of a portion of the proceeds of our 11.625% senior unsecured notes due 2014 to repay $100.0 million of borrowings under our secured revolving credit facility):


in millions	2009		2010		2011		2012		2013		After year 5		Total


Contractual obligations:
Revolving credit facilities	$	71.4	$	—	$	110.2	$	—	$	—	$	—	$	181.6
11.625% senior unsecured notes due 2014		—		—		—		—		—		700.0		700.0
Related party debt		—		—		—		—		—		139.0		139.0
Deferred revenue		13.6		18.0		18.0		18.0		18.0		83.2		168.8
Interest(1)		113.1		111.0		110.7		104.4		104.0		99.2		642.4
Capital lease obligations		2.3		3.0		2.7		2.2		2.4		13.4		26.0
Operating leases(2)		13.1		13.8		11.4		5.1		4.4		5.4		53.2
Installment note payable		1.1		1.3		0.9		0.9		6.6		—		10.8

Purchase obligations:
Livestock procurement(3)		3,178.8		1,088.1		808.8		722.2		489.3		98.2		6,385.4
Cactus bonds(4)		14.5		—		—		—		—		—		14.5
Other(5)		—		—		—		—		—		16.2		16.2

Total contractual obligations	$	3,407.9	$	1,235.2	$	1,062.7	$	852.8	$	624.7	$	1,154.6	$	8,337.9

(1)

Interest expense assumes the continuation of interest rates and outstanding borrowings under our credit facilities as of March 29, 2009.

(2)

Excludes amounts associated with operating leases having remaining non-cancelable lease terms of one year or less.

(3)

Represents hog and cattle purchase agreements with certain hog and cattle producers. The number of animals that we will be obligated to purchase is based on minimum quantity commitments to the extent the agreements contain those commitments, or management estimates based on past history for such hog and cattle purchases. The contracts are subject to market pricing at delivery. Due to the uncertainty of market prices at the time of future delivery we have estimated market prices based on futures contracts and applied those prices to all years. Cattle purchase agreements are short-term contracts with renewal options. Therefore, cattle purchase commitments have only been estimated through year one. See Note 12, “Commitments and contingencies” to our unaudited consolidated financial statements included in this prospectus.

(4)

On May 15, 2007, we entered into an Installment Bond Purchase Agreement with the City of Cactus, Texas, or the City. Under this agreement, we committed to purchase up to $26.5 million of bonds from the City, which are being issued to fund improvements to its sewer system which is utilized by our beef processing plant located in Cactus, Texas. We will purchase the bonds in installments as improvements are completed through an anticipated date of June 2010. The interest rate on the bonds is six-month LIBOR plus 350 basis points. The bonds mature on June 1, 2032 and are subject to annual mandatory sinking fund redemption beginning on June 1, 2011. We have purchased $12.0 million in bonds as of December 28, 2008 and expect to purchase the remaining $14.5 million in 2009.

(5)

Includes certain obligations for capital expenditures and other insignificant purchase obligations.

Off-balance sheet arrangements

As of March 29, 2009, we did not have any significant off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

However, as of March 29, 2009, we did have the following guarantees and keepwell obligations that are not recorded on our balance sheet: (1) our guarantee of JBS S.A.’s 10.5% senior notes due 2016 described under “—Liquidity and capital resources—External sources of liquidity and description of indebtedness—Guarantee of 10.5% senior notes due 2016 of JBS S.A.” and (2) Five Rivers’ obligation under a keepwell agreement to pay up to $250.0 million of the obligations of J&F Oklahoma under J&F Oklahoma’s credit facility described in “Certain relationships and related party transactions—Arrangements with J&F Oklahoma—Guarantee of J&F Oklahoma revolving credit facility.”

Quantitative and qualitative disclosures about market risk

Market risk relating to our operations results primarily from changes in commodity prices, interest rates and foreign exchange rates, as well as credit risk concentrations. To address certain of these risks, we enter into various derivative transactions as described below. If a derivative instrument is accounted for as a hedge, as defined by Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended (SFAS No. 133(R)), depending on the nature of the hedge, changes in the fair value of the instrument either will be offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings, or be recognized in other comprehensive income (loss) until the hedged item is recognized in earnings. The ineffective portion of an instrument’s change in fair value, as defined by SFAS No. 133(R), is recognized immediately. Additionally, we hold certain positions, primarily in grain and livestock futures, that either do not meet the criteria for hedge accounting or are not designated as hedges. These positions are marked to market, and the unrealized gains and losses are reported in earnings at each reporting date. Changes in market value of derivatives used in our risk management activities relating to forward sales contracts are recorded in net sales. Changes in market value of derivatives used in our risk management activities surrounding inventories on hand or anticipated purchases of inventories are recorded in cost of sales.

The sensitivity analyses presented below are the measures of potential losses of fair value resulting from hypothetical changes in market prices related to commodities. Sensitivity analyses do not consider the actions we may take to mitigate our exposure to changes, nor do they consider the effects such hypothetical adverse changes may have on overall economic activity. Actual changes in market prices may differ from hypothetical changes.

Commodity risk

We utilize various raw materials in our operations, including cattle, hogs, and energy, such as natural gas, electricity and diesel fuel, which are all considered commodities. We consider these raw materials generally available from a number of different sources and believe we can obtain them to meet our 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, we purchase derivatives in an attempt to mitigate price risk related to our anticipated consumption of commodity inputs for periods of up to 12 months. We may enter into longer-term derivatives on particular commodities if deemed appropriate. As of December 28, 2008 and March 29, 2009, we had derivative positions in place covering less than 1% and 2.5% of anticipated cattle needs and 11% and 14%, respectively, of anticipated hog needs, in each case through December 2009.

We use derivatives for the purpose of mitigating exposure to market risk, such as changes in commodity prices and foreign currency exchange rates. We use exchange-traded futures and options to hedge livestock commodities. The fair value of derivative assets is recognized within other current assets, while the fair value of derivative liabilities is recognized within accrued liabilities. The fair value of derivatives at December 28, 2008 and March 29, 2009 are as follows:


in thousands	As of December 28, 2008	As of March 29, 2009


Assets:
Commodity derivatives	$42,087	$23,582
Foreign currency rate derivatives	12,002	14,463

Total fair value, assets	$54,089	$38,045


Liabilities:
Commodity derivatives	$16,392	$7,056
Foreign currency rate derivatives	592	5,246

Total fair value, liabilities	$16,984	$12,302


Net commodity derivatives	$25,695	$16,526
Net foreign currency rate derivatives	11,410	9,217

Total net fair value	$37,105	$25,743

As of December 28, 2008 and March 29, 2009, the net deferred amount of derivative losses recognized in accumulated other comprehensive income was $0.3 million and $90,000, net of tax. We anticipate these amounts will be transferred out of accumulated other comprehensive income and recognized within earnings over the next 12 months.

Interest rate risk

As of December 28, 2008 and March 29, 2009, we had fixed-rate debt of $19.0 million and $17.8 million, respectively, with a weighted average interest rate of 8.4% for each period. We have exposure to changes in interest rates on this fixed-rate debt. Market risk for fixed-rate debt is estimated as the potential increase in fair value resulting from a hypothetical 10% decrease in interest rates. A hypothetical 10% decrease in interest rates would have increased the fair value of our fixed-rate debt by approximately $0.4 million at March 29, 2009 and $0.4 million at December 28, 2008. The fair values of our debt were estimated based on quoted market prices and/or published market interest rates.

As of December 28, 2008 and March 29, 2009, we had variable rate debt of $859.3 million and $959.2 million, respectively, with a weighted average interest rate of 6.2% and 5.8%, respectively. A hypothetical 10% increase in interest rates effective at March 29, 2009, and December 28, 2008, would have increased interest expense by approximately $5.6 million for the fiscal quarter ended March 29, 2009 and $5.3 million for the fiscal year ended December 28, 2008.

Foreign currency risk

We have foreign exchange gain/loss exposure from fluctuations in foreign currency exchange rates primarily as a result of a U.S. dollar-denominated intercompany note between two of our subsidiaries located in Australia. The primary currency exchange rate to which we have exposure is the U.S. dollar to Australian dollar exchange rate due to: (1) our significant investment in our Australian subsidiaries and (2) sales denominated in currencies other than U.S. dollars. While we use foreign currency forward contracts to mitigate price risk on committed future deliveries, we have elected not to use foreign currency forward contracts to mitigate the risk related to our investment in Australia, primarily since the effect of these fluctuations is non-cash in nature and the purchase of forward contracts would have a cash cost. In addition, the definition of EBITDA used by our lending institutions eliminates foreign currency gains and losses prior to calculating covenant compliance. In the future we may elect to enter into forward contracts to mitigate this foreign currency risk.

Sensitivity analysis

The following sensitivity analysis table estimates our exposure to changes in the fair value of commodity price derivatives and foreign currency exchange rate derivatives at December 28, 2008 and March 29, 2009. The sensitivity analysis reflects the impact of a hypothetical 10% adverse change in the fair value of applicable commodity prices and foreign exchange currency rates and excludes the underlying items that are being hedged, such as future sales commitments or future livestock commitments.


in thousands	As of December 28, 2008	As of March 29, 2009


Fair value:
Commodity derivatives	$25,695	$16,526
Foreign currency rate derivatives	11,410	9,217

Total	$37,105	$25,743


Estimated fair value volatility (-10%):
Commodity derivatives	$17,680	$11,607
Foreign currency rate derivatives	25,391	18,865

Total	$43,071	$30,472

Business

Overview

We are a global leader in beef and pork processing with approximately $15.4 billion in net sales for the fiscal year ended December 28, 2008 on a pro forma basis. In terms of daily slaughtering capacity, we are among the leading beef and pork processors in the United States and we have been the number one processor of beef in Australia for the past 15 years. As a standalone company, we would be the largest beef processor in the world. We also own and operate the largest feedlot business in the United States. We process, prepare, package and deliver fresh, processed and value-added beef and pork products for sale to customers in over 60 countries on six continents. Our operations consist of supplying fresh meat products, processed meat products and value-added meat products. Fresh meat products include refrigerated beef and pork processed to standard industry specifications and sold primarily in boxed form. Our processed meat offerings, which include beef and pork products, are cut, ground and packaged in a customized manner for specific orders. Additionally, we process lamb and mutton products. Our value-added products include moisture-enhanced, seasoned, marinated and consumer-ready products. We also provide services to our customers designed to help them develop more comprehensive and profitable sales programs. Our customers are in the food service, international, further processor and retail distribution channels. We also produce and sell by-products that are derived from our meat processing operations, such as hides and variety meats, to customers in the clothing, pet food and automotive industries, among others.

Prior to 2002, our predecessor was owned and operated by a multinational food company and not operated as a raw material supplier for the processed portions of its business. From 2002 to 2007, we were owned by a private equity company that pursued a strategy of restricting our capital expenditures and maximizing dividends, including reducing the operations at our Greeley, Colorado plant to a single shift and selling five feedlot facilities, two cow slaughter facilities, and an Australian beef patty making and distribution facility.

•

on July 11, 2007, JBS S.A. acquired Swift Foods Company (our predecessor company, which was subsequently renamed JBS USA Holdings, Inc.), which we refer to as the Swift Acquisition;

•

on May 2, 2008, we acquired substantially all of the assets of the Tasman Group Services, Pty. Ltd., or the Tasman Group, which we refer to as the Tasman Acquisition; and

•

what we believe is the most technologically advanced facility in the country, and five feedlots which supply approximately 18% of our fed cattle needs. Our small animals processing facilities in Australia process hogs, lamb and sheep, or smalls. Our Australian facilities are strategically located to access raw materials in a cost effective manner and to service our global customer base. We have the capacity to process approximately 28,600 cattle, 48,500 hogs and 4,500 lambs daily in the United States and 8,690 cattle and 15,000 smalls daily in Australia based on our facilities’ existing configurations.

Our business operations are organized into two segments:

•

our Pork segment, through which we conduct our domestic pork and lamb processing business.

Industry overview

Beef

United States

processors are primarily “spread” operators, and their operating profit is largely determined by plant operating efficiency rather than by fluctuations in prices of cattle and beef.

During the past few decades, consumer demand for beef products in the United States has been in line with population growth, which is the primary driver of aggregate demand. Export demand has fluctuated widely due to the closing of certain international markets following the discovery of isolated cases of BSE (also commonly referred to as mad cow disease), in 2003 and 2004, and the sporadic re-opening of such markets. We believe that consumer demand for U.S. exports in developing countries is driven by population growth compounded by economic growth. As consumers’ economic circumstances improve, they increasingly shift their diets to protein. Industry-wide export sales have been ramping up from 2004 through mid-2009, trending toward pre-2003 levels.

Australia

Global exports

In contrast, Brazil and Argentina have prohibited the use of growth hormones on their cattle. JBS S.A. is a large exporter of beef to the European Union.

Pork

Pork processors include vertically integrated companies, which own and raise hogs on feed for use in their processing facilities, and pure processors, who do not own hogs on feed. Vertically integrated pork processors can be subjected to significant financial impact from working capital demands, since hogs feed in the yards for approximately 180 days without revenue generation until processed. Additionally, since hogs on feed consume feed with a replacement price that is subject to market changes, vertically integrated pork processors have direct financial exposure to the volatility in corn and other feedstock prices. Pure processors generally purchase finished hogs under long-term supply contracts at prevailing market prices, process the hogs in their own facilities and sell the finished products at spot prices. Finished hogs are typically purchased at market prices and held for less than one day before processing, thus pure processors are not exposed to changing market prices over as great a time span as vertically integrated processors. Pure pork processors are primarily “spread” operators, and their operating profit is largely determined by plant operating efficiency and not by fluctuations in prices of hogs and pork.

Competitive strengths

Scale and leading market positions in beef and pork industries

•

source our products based on the most favorable conditions of input costs,

•

diversify our operations to minimize sanitary risk, and

•

attain proximity to our raw materials and end customers given our geographical reach, saving freight and storage costs.

Diversified business model with international reach

Our business is well diversified across proteins and all major distribution channels, as well as geographically with respect to production and distribution.

•

Sales and distribution channel diversification: We benefit from our diversified sales and distribution channels, which include national and regional retailers (including supermarket

chains, independent grocers, club stores and wholesale distributors), further processors (including those that make bacon, sausage and deli and luncheon meats), international markets and the food service industry (including food service distributors, which service restaurant and hotel chains and other institutional customers). We sell our products to over 6,000 customers worldwide with no customer accounting for more than 4.5% of our net sales. This reduces our dependence on any market or customer and provides multiple channels for potential growth. In the retail segment, we further benefit from a variety of widely recognized brands, including Swift, Swift Premium, Swift Angus Select, Swift Premium Black Angus, Miller Blue Ribbon Beef and G.F. Swift 1855 among others. We also manufacture products for some of our main customers’ private label brands.

•

Our processing platforms in the United States and Australia, which are two major beef producing countries, provide us with enough geographic diversification and operating flexibility to satisfy demand depending on market conditions and sanitary restrictions. For example, our facilities in Dinmore, Beef City, Brooklyn and Longford, Australia accommodate non-hormone-treated fed cattle allowing us to market our products to the European Union (which prohibits imports of hormone-treated products). Accordingly, each of these facilities is eligible to ship to the European Union. We also benefit from greater international market access through our Worthington pork plant, which is one of only three facilities in the United States certified for export to the European Union. Additionally, our JBS Packerland facilities are located near major metropolitan areas, resulting in lower freight costs relative to cattle processing facilities in more rural locations.

World class operations

100

of our planning, forecasting, scheduling, procurement and manufacturing functions to drive performance in the supply chain. Our efforts in 2008 were focused on increasing beef yields, reducing operational costs and lowering overhead. One of the key initiatives in delivering on this strategy was returning our Greeley, Colorado processing facility to its originally designed capacity as a two-shift operation. Producing more volume in the same length of time reduces our cost per pound. As a measure of our progress, excluding the JBS Packerland Acquisition and the Tasman Acquisition, during the fiscal year ended December 28, 2008, our Beef and Pork segments demonstrated an 8.5% and 3.8% increase in throughput, respectively, compared to the combined fiscal year ended December 30, 2007. As a result, we remain focused on leveraging our fixed cost base to improve our operating margins.

Strong balance sheet and limited derivative exposure relative to our peers

Established customer relationships

We have developed long-standing relationships with numerous well-established, global customers, many of whom have been doing business with us for more than 20 years. We serve many of the largest food service distributors, quick-service restaurants and retail chains in the United States. Additionally, we are focused on developing close, mutually beneficial relationships with our customers, who we believe view us as a long-term strategic partner and consider us an extended part of their operations. We believe that the high-quality long-standing relationships we have developed provide us with revenue stability and forecasting transparency.

Proven management team and high performance work force

Our strategy

Prior to 2002, our predecessor was owned and operated by a multinational food company. From 2002 to 2007, our predecessor was owned by a private equity company. Since the Swift

101

Acquisition in July 2007, we have significantly changed our business strategy. Our current strategy is to continue to grow our business’ revenues and profitability through the following strategic initiatives:

Continuously improve profitability through process optimization

Continue to successfully integrate recent acquisitions and selectively pursue additional value-enhancing growth opportunities

102

Increase sales and enhance margins by significantly expanding our direct distribution network

Increase processed and value-added offerings

Promote innovation across the value chain

103

margins. Additionally, we have developed and implemented energy conversion and recovery processes including real-time processes by which byproducts of purchased natural gas or grease produced in our rendering operations are converted into useable fuels and a methane recovery process resulting in useable methane gas that is subsequently resold in North American pipelines. We have also instituted Halal processing capabilities in our Australian operations, providing us with the opportunity to expand our exports to Muslim customers located in the Middle East, which we believe sets us apart from our competitors in Australia. We will continue to seek to develop innovative process and product improvements across the value chain.

Maintain leadership in food and employee safety

Description of business segments

Beef segment

Products, sales and marketing

United States

The majority of our beef revenues in the U.S. are generated from the sale of fresh beef, which includes chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef and other products. In addition, we sell beef by-products to the variety meat, feed processing, fertilizer, and pet food industries. Cattle hides are sold for both domestic and international use, primarily to the clothing and automotive industries. We market products under several brand names, including “Swift Premium, Swift Angus Select, Swift Premium Black Angus, Miller Blue Ribbon Beef and G.F. Swift 1855.” Our hallmark brand, Swift, was founded in 1855 and we believe it is synonymous with our industry leadership in innovation and food quality. We believe that our brands, marketed primarily at the wholesale level, provide a platform for further growth and expansion of our value-added and premium program product lines.

We market our beef products through several channels including:

•

national and regional retailers including supermarket chains, independent grocers, club stores and wholesale distributors;

•

further processors who use our beef products as a food ingredient for prepared meals, raw materials for hamburger, and by-products for pharmaceutical and leather production;

•

the food service industry, including food service distributors, which service restaurant and hotel chains and other institutional customers; and

104

•

international markets, including Japan, Mexico, South Korea, Canada, and China among others, many of which have reopened to U.S. beef following the 2003 BSE outbreak, as well as other smaller foreign markets, some of which are limited to boxed beef products from cattle younger than 30 months of age.

Our largest distribution channel is retail. We have increased sales to the international channels by approximately 139% from 176 million pounds in 2005 to 420 million pounds in 2008, trending toward pre-BSE levels, which were 456 million pounds in 2003. We intend to continue to focus on increasing our sales in the food service and international distribution channels, in particular, quick-service restaurants and their suppliers, which we believe are likely to continue to be profitable and growing over time.

Total net sales contribution by channel is:


	Fiscal year ended			Fiscal quarter ended March 29, 2009
	2006	2007	2008	Fiscal quarter ended March 29, 2009

Retail	48%	47%	48%	54%
Further processors	23	23	26	23
Food service	22	21	14	14
International	7	9	12	9

Total	100%	100%	100%	100%

Australia

The majority of our beef revenues in Australia are generated from the sale of fresh beef, which includes chuck cuts, rib cuts, loin cuts, round cuts, thin meats, ground beef and other products. We also produce value-added meat products, including toppings for pizza. Approximately 79% of the beef products sold by us are derived from grass-fed cattle. The remainder of our beef products is derived from grain-fed animals that are sold primarily to Japan. Grain-fed cattle provide higher quality meat, which commands a premium price. Our Beef segment also includes our lamb and sheep operations in Australia.

Our Australian operations currently generate approximately 89% of total net sales as exports to foreign countries, including Japan, our largest export market, as well as the United States. Australia’s sales to export markets have continued to benefit from the 2003 North American BSE incident, which had closed key Asian markets to the import of U.S. beef. Since 2003, these market closings increased the marketability of our Australian beef into those markets as Australia had no similar import restrictions on its production.

Global exports

We sell our products in over 60 countries on six continents. Overall, exports accounted for approximately 24% of our sales in 2008 on a pro forma basis and 21% of our sales for the fiscal quarter ended March 29, 2009. The international beef market is divided between the Pacific Block (which includes the United States, Japan, Canada, Mexico and South Korea) and the Atlantic Block (Europe, Africa, the Middle East and South America). This division reflects not only historical and geographical ties but also certain common sanitary criteria.

The Pacific Block prohibits imports of fresh beef from countries or regions where there is still a risk of new outbreaks of foot-and-mouth disease, or FMD, and from countries or regions that are

105

FMD-free but implement FMD vaccination programs. However, the Pacific Block permits imports of processed beef (including cooked and pre-cooked products) from these countries.

Most countries of the Atlantic Block permit imports of fresh beef from FMD-free countries that implement FMD vaccination programs. They also recognize that FMD can be eradicated on a regional (as opposed to national) basis in certain countries, including Brazil, which has areas that are FMD-free and have vaccination programs, qualifying them to export fresh beef. Under this regionalization concept, many beef producing regions in Brazil are thus qualified to export fresh beef to countries in the Atlantic Block. Notwithstanding the foregoing, most countries in the Atlantic Block impose import restrictions on beef treated with growth hormones, citing health concerns. Brazil and Argentina have prohibited the use of growth hormones on their cattle.

Australia is an FMD-free country and does not implement vaccination programs against the disease. It also does not use growth hormones in a small part of its cattle herd and is therefore able to export to any country in the world.

As a result of this division and the sanitary restrictions between the Pacific Block and the Atlantic Block, we believe that our U.S. export operations of fresh beef today do not directly compete with our parent company’s Brazilian and Argentine export operations of fresh beef in our main export destinations. Although JBS S.A. is a large exporter of beef to the European Union, for example, we do not have relevant export volume to the European Union because of its restrictions on beef treated with growth hormones. Consequently, we do not have formal arrangements with JBS S.A. to coordinate our exports in our export markets. However, to the extent that sanitary restrictions change in the future, we could become direct competitors of our parent company in certain export markets.

Raw material and feedlot operations

United States

The primary raw material for our U.S. processing facilities is live cattle. All of our U.S. cattle procurement process is centralized at our headquarters in Greeley, Colorado, except for our JBS Packerland procurement process, which is centralized in Green Bay, Wisconsin. We require all of our cattle suppliers to document the quality of their feedlot operations, verify that the use of antibiotics and agricultural chemicals follow the manufacturer’s intended standards and confirm that feed containing animal based protein products, which have been associated with outbreaks of BSE, has not been used. We have in excess of 3,000 cattle suppliers.

We secure approximately 29% of our annual cattle needs under forward purchase arrangements and purchase our remaining needs on the spot market. These forward purchase contracts are not fixed price contracts but rather they are priced at market upon delivery, thus generally

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minimizing our exposure to price volatility before delivery. On a pro forma basis, we will purchase approximately 24% of our U.S. cattle needs under an arrangement whereby we are entitled to a portion of the seller’s gains, and are obligated to reimburse the seller for a portion of its losses, in its sale of cattle to us. See “Certain relationships and related party transactions— Arrangements with J&F Oklahoma—Cattle purchase and sale agreement.”

Five Rivers operates 11 cattle feedlots with a one-time feeding capacity of 820,000 cattle, located in Colorado, Idaho, Kansas, Oklahoma and Texas, adjacent to our existing Beef segment slaughter facilities. Almost 1.5 million head of cattle were fattened in these feedlots in 2008 and approximately 334 thousand head of cattle during the fiscal quarter ended March 29, 2009. Five Rivers does not own cattle and simply operates its feedlots and charges beef companies (including us) to feed and care for their cattle. Five Rivers supplies us with approximately 30% of our cattle needs and is obligated to sell to us, on an annual basis, a minimum of 500,000 cattle at market prices upon delivery.

Historically, cattle prices have been subject to substantial fluctuations. Cattle supplies and prices are affected by factors such as corn and soybean meal prices, weather and farmers’ access to capital. JBS Packerland’s four processing plants purchase lean Holstein steers and cows and other cattle primarily from feedlots, auction barns, direct contract relationships with suppliers in close proximity to processing plants and from its existing cattle feeding operations. The close proximity of these plants to most of their suppliers reduces transportation costs, shrinkage and bruising of livestock in transit.

Vertically integrated beef processors, which own cattle on feed, can be subject to significant financial impact in terms of working capital utilization, since cattle on feed eat in the yards for 90-180 days and do not generate revenue until slaughtered. Since cattle on feed consume feed with a replacement price that is subject to market changes, vertically integrated beef processors have direct financial exposure to the volatility in corn and other feedstock prices. We do not own cattle on feed, and we generally purchase cattle in the spot market or pursuant to market-priced supply arrangements from feedlot operators, and, except as described below, typically hold cattle for less than one day before processing. After processing, we sell the beef at spot prices. Because we generally buy cattle at market prices and sell the finished beef product at market prices with just a short time between the purchase and sale, we are not exposed to changing market prices over as great a span of time as vertically integrated processors. As such we are primarily a “spread” operator, and our operating profit is largely determined by plant operating efficiency and not by fluctuations in prices of cattle and beef.

Australia

The primary raw materials we use in our Australian processing facilities are live cattle, lamb and sheep. Our cattle procurement function is focused on efficiently sourcing both grass-fed cattle and feeder cattle for our grain-fed business. Grass-fed cattle are primarily sourced from third-party suppliers with specific weight and grade characteristics. This process helps ensure that the cattle we source meet our future order requirements. The majority of grain-fed cattle are sourced from company-owned feedlot operations.

We operate five feedlots that provide grain-fed cattle exclusively for our processing operations in Australia. We source feeder cattle from livestock producers in Australia. On average, cattle remain in our feedlots for approximately 140 days before they are transferred to our processing operations. Our feedlots produce approximately 288,000 cattle per year for processing. Our

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Australian feedlots operate essentially in the same manner as retained ownership feedlots in the United States, meaning that we own the cattle and therefore carry the risk on the cattle. For a large proportion of these cattle, we know the eventual customers and their product requirements based on our close relationship with these customers and their purchasing history. Feed rations are determined based on scientific analysis. It is worth highlighting the distinction between retained ownership feedlots and custom feedlots, like our U.S. feedlots. In custom feedlots the animals are sold by the feedlot to beef processors on behalf of the livestock owner and the livestock owner’s proceeds are paid to the livestock owner after the feedlot has deducted the yardage cost for fattening the animal and delivering the fattened animal to the meat processor. The distinction is important since in custom feedlots the livestock owner is at risk for the ultimate sale of the animal at completion, whereas in retained ownership feedlots the feedlot carries the risk of holding the cattle until they are sold.

Processing facilities

United States

Our beef operations in the United States consist of eight fed cattle facilities. Steers and heifers raised on concentrated rations are typically referred to in the cattle industry as “fed cattle,” and cattle not fed such concentrated rations are usually referred to as “non-fed cattle.”

Our facilities utilize modern, highly-automated equipment to process and package beef products, which are typically marketed in the form of boxed beef. We also customize production and packaging of beef products for several large domestic and international customers. The designs of our facilities emphasize worker safety to ensure regulatory compliance and to reduce worker injuries. Our facilities are also designed to reduce waste products and emissions and dispose of waste in accordance with applicable environmental standards. We have equipped our Santa Fe Springs, California facility to process value-added products, including, for example, the G.F. Swift 1855 brand line of premium beef products. Our Greeley, Colorado, Cactus, Texas, and Grand Island, Nebraska facilities have been equipped to produce value-added operations, including slicing, grinding and cubing of beef products for retail and food service customers.

Our JBS Packerland facilities are engineered to slaughter both fed cattle and cows. Many beef processing facilities in the United States are engineered to slaughter only cows or only fed cattle. This flexibility enables us to shift operations between fed cattle and cows based upon market availability, seasonal demand and margins. In addition, JBS Packerland facilities are located near major metropolitan areas, resulting in lower freight costs compared to cattle processing facilities in other localities. JBS Packerland’s Tolleson, Arizona plant is located near Phoenix, Tucson, and Los Angeles; the Plainwell, Michigan plant is located near Chicago and Detroit; the Green Bay plant is located near Milwaukee and Chicago; and the Souderton, Pennsylvania plant is located near Baltimore, Philadelphia and New York.

Our food safety efforts incorporate what we believe to be a comprehensive network of leading technologies, such as MultiCheck, that minimize the risks involved in beef processing. Two of the elements of MultiCheck are double pasteurization of carcasses prior to chilling and a chilled carcass treatment using organic acid immediately prior to carcass disassembly. SwiftTrace^TM is another element we implemented as part of our on-going commitment to animal and human safety. SwiftTrace^TM is a process whereby live animals and finished animal products can be traced backward or forward in the supply chain. This process helps to build confidence from suppliers, customers and consumers in the food supply chain.

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Australia

Our ten processing facilities are strategically located for efficient livestock acquisition, availability of labor and access to shipping and distribution. Our facilities utilize modern, highly-automated equipment to process and package beef products. The Dinmore facility is the largest plant in Australia. The Beef City plant processes grain-fed cattle.

Since July 2007, we have made important capital and operational expenditures, including the installation of plate freezers and finely textured meat processing, as well as value-added variety meats capture technology. These expenditures have enhanced product quality, improved customer satisfaction and increased sales potential. We have equipped our facilities to process value-added products and consumer-ready products. Our facilities produce additional value-added products, including seasoned and marinated beef items. The design of our facilities emphasizes worker safety to ensure regulatory compliance and to reduce worker injuries. Our facilities are also designed to reduce waste products and emissions and dispose of waste in accordance with applicable environmental standards.

All products are subject to stringent animal husbandry and food safety procedures. Our processing facilities are operating under the strictest food safety and quality assurance regime to comply with international customer requirements. Our Dinmore and Beef City facilities are European Union-certified facilities, which enable us to export primal cuts to Europe. Our feedlots are managed with cattle friendly policies, providing a clean and scientific feeding regimen to ensure that safe grain-fed products are delivered to our customers.

Pork segment

Products, sales and marketing

We are the third largest pork producer in the United States, with a slaughtering capacity of 48,500 head per day. A significant portion of our revenues are generated from the sale of fresh pork products, including trimmed cuts such as loins, roasts, chops, butts, picnics and ribs. Other pork products, including hams, bellies and trimmings, are sold predominantly to further processors who, in turn, manufacture bacon, sausage and deli and luncheon meats. The remaining sales are derived from by-products and from further-processed, higher margin products. Due to the higher margins attributable to value-added products, we intend to place greater emphasis on the sale of moisture-enhanced, seasoned, marinated and consumer-ready pork products to the retail channel and boneless ham and skinless bellies to the further processor channel. Our U.S. lamb business currently operates under our Pork segment and accounted for less than 1% of our total net sales for the fiscal quarter ended March 29, 2009. During the fiscal quarter ended March 29, 2009, our Pork segment had net sales of $526.3 billion and EBITDA of $7.5 million. See “Management’s discussion and analysis of financial condition and results of operations–Supplemental financial data.”

We market our pork products through several channels, including:

•

national and regional retailers including supermarket chains, independent grocers, club stores and wholesale distributors;

•

further processors that use its pork products as a food ingredient for prepared meals, raw material for sausage manufacturing and by-products for pharmaceutical production;

•

international markets including Japan, Mexico and China, among others; and

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•

the food service industry, including food service distributors, fast food, restaurant and hotel chains and other institutional customers.

Pork products sold to the domestic retail and further processor channels comprised approximately 80% of total net sales for the fiscal quarter ended March 29, 2009. Pork exports contributed approximately 16% of net sales over the same period. We consider the overseas markets an opportunity for future growth.

Total net sales contribution by channel were:


				Fiscal quarter ended March 29, 2009
	Fiscal year ended
	2006	2007	2008

Retail	44%	42%	40%	44%
Further processors	41	42	40	36
International	11	12	16	16
Food service	4	4	4	4

Total	100%	100%	100%	100%

Raw material

The primary raw material that we use in our processing facilities is live hogs. We employ a network of hog buyers at our processing plants and buying stations to secure our hog supply. Approximately 69% of our hog purchases are made through various forms of supply contracts that provide us with a stable supply of high-quality hogs. These supply contracts are typically four to five years in duration and stipulate minimum and maximum purchase commitments with prices based in part on the market price of hogs upon delivery, with adjustments based on quality, weight, lean composition and meat quality. We purchase the remaining approximately 31% of our hogs on the spot market at a daily market price with the same general quality and yield grade as we require under our contracts. We require an extensive supplier certification program and conduct comprehensive cutting tests of our potential suppliers’ animals to determine carcass composition and leanness.

Vertically integrated pork processors, which own hogs on feed, can be subject to significant financial impact in terms of working capital utilization, since hogs on feed eat in the yards for approximately 180 days and do not generate revenue until slaughtered. In addition, since hogs on feed consume feed with a replacement price that is subject to market changes, vertically integrated pork processors have direct financial exposure to the volatility in corn and other feedstock prices. We are a non-vertically integrated pork processor. We do not own hogs on feed and generally purchase finished hogs under long-term supply contracts at prevailing market prices, fabricate the hogs in our production facilities and sell the finished products at spot prices. Because the finished hogs typically are acquired within 24 hours of slaughter, they are not exposed to changing market prices over as great a span of time as vertically integrated processors.

Processing facilities

Our operations in the United States consist of three processing facilities located in close proximity to major hog growing regions of the country, a value-added facility that produces consumer-ready pork for certain customers and a lamb processing facility.

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Our facilities utilize modern, highly-automated equipment to process and package pork products, which are typically marketed in the form of boxed pork. Since July 2007, we have made important capital and operational expenditures, including the installation of plate freezers and finely textured meat processing, as well as value-added variety meats capture technology. We believe that these expenditures have enhanced product quality, improved customer satisfaction and increased sales potential. We have equipped our Santa Fe Springs, California facility to process value-added products and consumer-ready products. Our Louisville, Kentucky and Marshalltown, Iowa facilities produce additional value-added products, including seasoned and marinated pork items. The design of our facilities emphasizes worker safety to ensure regulatory compliance and to reduce worker injuries. Our facilities are also designed to reduce waste products and emissions and dispose of waste in accordance with applicable environmental standards. Our Worthington, Minnesota and Marshalltown, Iowa pork plants currently have International Standards Organization (ISO) 9001 certified quality management systems, and Worthington is a European Union-certified facility that enables us to export primal cuts to Europe.

Our food safety task force consists of experts in the field of meat processing, food microbiology and quality assurance, all working together to assure compliance at all stages of the production chain and distribution channels. Our internal programs, policies and standards are designed to exceed both regulatory requirements and customer specifications. Our food safety efforts incorporate what we believe is a comprehensive network of leading technologies, such as MultiCheck, that minimize the risks involved in pork processing.

Facilities

In the United States, we conduct our Beef and Pork segment operations through eight beef processing facilities, three pork processing facilities, one lamb slaughter facility, one case-ready beef and pork facility, one hide tannery, seven leased regional distribution centers and two grease producing facilities, as well as 11 feedlots operated by Five Rivers. In Australia, we operate our Beef segment operations through ten beef and smalls processing facilities, including the largest and what we believe is the most technologically advanced facility in Australia, and five feedlots, all of which are owned by us. Our facilities are strategically located to access raw materials in a cost effective manner and to service our global customer base. We have the ability to process approximately 28,600 cattle, 48,500 hogs, and 4,500 lambs daily in the United States and the ability to process 8,690 cattle and 15,000 smalls daily in Australia based on our facilities’ existing configurations. In addition, our leased Sante Fe Springs facility is used to process beef and pork products.

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The following table shows the location, capacity and segments represented by our processing facilities in the United States and Australia as of March 29, 2009, all of which are owned:


Facility location by segment
Beef segment	Cattle/day	Smalls/day	Hogs/day


*United States*
Cactus, TX	6,000	—	—
Grand Island, NE

JBS USA Holdings, Inc. S-1