PILGRIMS PRIDE CORP

Previous wording

Pilgrim’s Pride Corporation (referred to herein as “Pilgrim’s,” “PPC,” “the Company,” “we,” “us,” “our,” or similar terms) is one of the largest chicken producers in the world, with operations in the United States (“U.S.”), the United Kingdom (“U.K.”), Mexico, France, Puerto Rico, the Netherlands and the Republic of Ireland. We reported net income attributable to Pilgrim’s of $850.6 million, or $3.58 per diluted common share, and income before tax totaling $1.1 billion, for the nine months ended September 29, 2024. These operating results included net sales of $13.5 billion, gross profit of $1.8 billion and $1.6 billion of cash provided by operating activities. We generated a consolidated operating margin of 8.9%. For the nine months ended September 29, 2024, we generated EBITDA and Adjusted EBITDA of $1.5 billion and $1.7 billion, respectively. A reconciliation of net income to EBITDA and Adjusted EBITDA is included below.

Current wording

Pilgrim’s Pride Corporation (referred to herein as “Pilgrim’s,” “PPC,” “the Company,” “we,” “us,” “our,” or similar terms) is one of the largest chicken producers in the world, with operations in the United States (“U.S.”), the United Kingdom (“U.K.”), Mexico, France, Puerto Rico, the Netherlands and the Republic of Ireland. We reported net income attributable to Pilgrim’s of $296.0 million, or $1.24 per diluted common share, and income before tax totaling $390.4 million, for the three months ended March 30, 2025. These operating results included net sales of $4.5 billion, gross profit of $554.9 million and $126.9 million of cash provided by operating activities. We generated a consolidated operating margin of 9.1%. For the three months ended March 30, 2025, we generated EBITDA and Adjusted EBITDA of $511.7 million and $533.2 million, respectively. A reconciliation of net income to EBITDA and Adjusted EBITDA is included below.

Previous wording

U.S. commodity market prices for chicken products trended above the historical five-year average as sustained price support delayed the normal seasonal price decreases until late in the quarter. Year-over-year price increases were supported by each major cut. Per the October 2024 U.S. Department of Agriculture (or “USDA”) report on poultry slaughter, estimated industry ready-to-cook production ended the quarter 2.7% above prior year levels primarily due to incremental increases in broilers processed and average liveweights.

Current wording

U.S. commodity market prices for chicken products trended above the historical five-year average and above the prior year average through first quarter, primarily driven by rapid increases in boneless breast pricing that greatly exceeded normal seasonal movements. Per the April 2025 U.S. Department of Agriculture (or “USDA”) report on poultry slaughter, estimated industry ready-to-cook production during the first quarter of 2025 was 1.1% above prior year levels primarily due to heavier average liveweights.

Previous wording

During the third quarter of 2024, the U.S. chicken market experienced firm volume demand, supported by growth in both the retail and foodservice distribution channels throughout the quarter. Export volume in shipments were lower than the five-year historical average for the first two months of the quarter, but were sufficient to prevent buildup of dark meat inventories in cold storage while sustaining price levels that were higher than prior year. Chicken cold storage inventories ended the quarter 6.9% below prior year levels after declining seasonally during the quarter.

Current wording

During the first quarter of 2025, the U.S. chicken market experienced firm volume demand, supported by growth in the retail distribution channel and steady foodservice channel demand. The total domestic demand growth continued to outpace supply. Export volume in shipments were lower than the five-year historical average for the first quarter of 2025, though demand continues to support stable pricing for export product types. Chicken cold storage inventories ended the quarter 3.1% above prior year levels and 3% below the historical five-year average.

Previous wording

Prices for the remainder of the year will depend on (1) the evolution of foodservice, retail and export meat demand and (2) factors such as feed production input costs, further spread of avian influenza both domestically and abroad, uncertainty surrounding the general economy and overall protein supply.

Current wording

Global market prices for the remainder of the year will depend on (1) the evolution of foodservice, retail and export meat demand and (2) factors such as feed production input costs, further spread of avian influenza, or other bird diseases, both domestically and abroad, uncertainty surrounding the general economy and overall protein supply.

Previous wording

We operate in three reportable segments: U.S., Europe (formerly known as “U.K. and Europe”), and Mexico. We measure segment profit as operating income. Certain corporate expenses are allocated to the Mexico and Europe reportable segments based upon various apportionment methods for specific expenditures incurred related thereto with the remaining amounts allocated to the U.S. For additional information, see “Note 18. Reportable Segments” of our Condensed Consolidated Financial Statements included in this quarterly report.

Current wording

We operate in three reportable segments: U.S., Europe, and Mexico. We measure segment profit as operating income. Certain corporate expenses are allocated to the Mexico and Europe reportable segments based upon various apportionment methods for specific expenditures incurred related thereto with the remaining amounts allocated to the U.S. For additional information, see “Note 18. Reportable Segments” of our Condensed Consolidated Financial Statements included in this quarterly report.

Previous wording

Net sales. Net sales generated in the three months ended September 29, 2024 increased $224.8 million, or 5.2%, from net sales generated in the three months ended September 24, 2023. The following table provides net sales information:

Current wording

Net sales. Net sales generated in the three months ended March 30, 2025 increased $101.1 million, or 2.3%, from net sales generated in the three months ended March 31, 2024. The following table provides net sales information:

Previous wording

U.S. Reportable Segment. U.S. net sales generated in the three months ended September 29, 2024 increased $285.1 million, or 11.5%, from U.S. net sales generated in the three months ended September 24, 2023 primarily due to an increase in net sales per pound of $248.4 million, or 10.0 percentage points, and an increase in sales volume of $36.7 million, or 1.5 percentage points. The increase in net sales per pound was driven primarily by favorable market pricing conditions and shift in product mix. The third quarter average commodity chicken market prices were above both prior year and the historical five-year average.

Current wording

U.S. Reportable Segment. U.S. net sales generated in the three months ended March 30, 2025 increased $163.9 million, or 6.4%, from U.S. net sales generated in the three months ended March 31, 2024 primarily due to an increase in net sales per pound and an increase in sales volume of $115.8 million, or 4.5 percentage points, and $48.1 million, or 1.9 percentage points, respectively. The increase in net sales per pound was driven primarily by favorable market pricing conditions and shift in consumer demand to higher value products.

Previous wording

Europe Reportable Segment. Europe net sales generated inthe three months ended September 29, 2024 decreased $4.1 million, or 0.3%, from Europe net sales generated in the three months ended September 24, 2023 primarily due to a decrease in net sales per pound of $51.3 million, or 3.9 percentage points. The decrease in net sales per pound was primarily due to shift in product mix and due to the structure of certain customer contracts impacted by lower input costs. The decrease in net sales per pound was partially offset by the favorable impact of foreign currency translation and an increase in sales volume of $31.0 million, or 2.4 percentage points, and $16.2 million, or 1.2 percentage points, respectively.

Current wording

Europe Reportable Segment. Europe net sales generated inthe three months ended March 30, 2025 decreased $36.4 million, or 2.9%, from Europe net sales generated in the three months ended March 31, 2024 primarily due to a decrease in sales volume, the unfavorable impact of foreign currency translation, and net sales per pound of $26.2 million, or 2.1 percentage points, $9.2 million, or 0.7 percentage points, and $1.0 million, or 0.1 percentage points, respectively. The decrease in sales volume was primarily across the retail channel, though was partially offset by increases in the foodservice channel. The decrease in net sales per pound was primarily due to the structure of certain customer contracts impacted by lower input costs.

Previous wording

Gross profit and cost of sales. Gross profit increased by $338.1 million, or 97.7%, from $345.9 million generated in the three months ended September 24, 2023 to $684.0 million generated in the three months ended September 29, 2024. The following tables provide information regarding gross profit and cost of sales information:

Current wording

Gross profit and cost of sales. Gross profit increased by $171.0 million from $383.9 million generated in the three months ended March 31, 2024 to $554.9 million generated in the three months ended March 30, 2025. The following tables provide information regarding gross profit and cost of sales information:

Previous wording

U.S. Reportable Segment. Cost of sales incurred by our U.S. operations during the three months ended September 29, 2024 decreased $37.2 million, or 1.6%, from cost of sales incurred by our U.S. segment during the three months ended September 24, 2023. The decrease in cost of sales was primarily driven by a decrease in cost per pound sold of $71.5 million, or 3.1 percentage points, partially offset by an increase in sales volume of $34.2 million, or 1.5 percentage points. The decrease from prior year in cost per pound sold is primarily due to declining feed ingredients costs, specifically corn and soybean meal. Corn market prices decreased approximately 28% from prior year levels and soybean meal market prices decreased approximately 14% from prior year levels. Factors that are partially offsetting the decrease in cost of sales from feed ingredients are increased payroll and incentive compensation costs, grower costs, and other operating costs.

Current wording

U.S. Reportable Segment. Cost of sales incurred by our U.S. operations during the three months ended March 30, 2025 increased $13.5 million, or 0.6%, from cost of sales incurred by our U.S. segment during the three months ended March 31, 2024. The increase in cost of sales was primarily driven by an increase in sales volume of $43.6 million, or 1.9 percentage points, partially offset by a decrease in cost per pound sold of $30.1 million, or 1.3 percentage points. The increase in sales volume was driven by consumer demand. The decrease from prior year in cost per pound sold is primarily due to declining feed ingredients costs, specifically soybean meal which decreased approximately 25% from prior year levels.

Previous wording

Europe Reportable Segment. Cost of sales incurred by our Europe operations during the nine months ended September 29, 2024 decreased $55.4 million, or 1.5%, from cost of sales incurred by our Europe segment during the nine months ended September 24, 2023. The decrease in cost of sales was primarily driven by a decrease in cost per pound sold. The decrease in cost per pound sold was driven by lower feed ingredients, labor, utilities and other operating costs and was partially offset by an increase related to the prior year one-time recognition of business interruption insurance income.

Current wording

Europe Reportable Segment. Cost of sales incurred by our Europe operations during the three months ended March 30, 2025 decreased $60.5 million, or 5.1%, from cost of sales incurred by our Europe segment during the three months ended March 31, 2024. The decrease in cost of sales was primarily driven by a decrease in cost per pound sold, sales volume, and the favorable impact of foreign currency translation of $27.7 million, or 2.3 percentage points, $24.3 million, or 2.1 percentage points, and $8.5 million, or 0.7 percentage points, respectively. The decrease in cost per pound sold was driven by lower labor costs, feed ingredients, labor, utilities and other operating costs, some of which was driven by the recent restructuring initiatives throughout the Europe reportable segment. The decrease in sales volume was primarily across the retail channel, though was partially offset by increases in the foodservice channel.

Previous wording

Operating income and SG&A expense. Operating income increased by $302.0 million, or 146.3%, from income of$206.4 million generated in the three months ended September 24, 2023 to income of $508.4 million generated in the three months ended September 29, 2024. The following tables provide information regarding operating income and selling, general and administrative (“SG&A”) expense:

Current wording

Operating income and SG&A expense. Operating income increased by$154.2 million, or 61.6%, from income of$250.3 million generated in the three months ended March 31, 2024 to income of $404.5 million generated in the three months ended March 30, 2025. The following tables provide information regarding operating income and selling, general and administrative (“SG&A”) expense:

Previous wording

U.S. Reportable Segment. SG&A expense incurred by our U.S. reportable segment during the three months ended September 29, 2024 increased $3.8 million, or 5.6%, from SG&A expense incurred by our U.S. reportable segment during the three months ended September 24, 2023. The increase in SG&A expense resulted primarily from an increase in incentive compensation costs, partially offset by a net decrease in legal settlement expense.

Current wording

U.S. Reportable Segment. SG&A expense incurred by our U.S. reportable segment during the three months ended March 30, 2025 increased $10.9 million, or 18.9%, from SG&A expense incurred by our U.S. reportable segment during the three months ended March 31, 2024. The increase in SG&A expense resulted primarily from an increase in legal settlement expense, incentive compensation costs, and legal defense costs.

Previous wording

Europe Reportable Segment. SG&A expense incurred by our Europe reportable segment during the three months ended September 29, 2024 increased $3.2 million, or 6.1%, from SG&A expense incurred by our Europe segment during the three months ended September 24, 2023. The increase in SG&A expense was primarily due to an increase in incentive compensation expense.

Current wording

Europe Reportable Segment. SG&A expense incurred by our Europe reportable segment during the three months ended March 30, 2025 increased $4.1 million, or 8.9%, from SG&A expense incurred by our Europe segment during the three months ended March 31, 2024. The increase in SG&A expense was primarily due to increases in incentive compensation costs and software license fees.

Previous wording

Mexico Reportable Segment. SG&A expense incurred by our Mexico reportable segment during the nine months ended September 29, 2024 decreased $2.7 million, or 5.3%, from SG&A expense incurred by our Mexico segment during the nine months ended September 24, 2023. The primary driver of the decrease in SG&A expense was a decrease in marketing spend and labor costs, partially offset by an increase driven by the unfavorable impact of foreign currency translation.

Current wording

Mexico Reportable Segment. SG&A expense incurred by our Mexico reportable segment during the three months ended March 30, 2025 decreased $0.4 million, or 2.5%, from SG&A expense incurred by our Mexico segment during the three months ended March 31, 2024. The primary driver of the decrease in SG&A expense was the favorable impact of foreign currency translation due to the year-over-year depreciation of the Mexican peso against the U.S. dollar. This decrease was partially offset by increases in payroll and marketing costs.

Previous wording

Restructuring activities. Restructuring activities costs of $30.8 million were recognized in the three months ended September 29, 2024. These charges were incurred by our Europe reportable segment primarily as a result of severance, asset impairment, and other charges related to the closure of facilities within our Pilgrim’s Food Masters and Pilgrim's U.K. businesses.

Current wording

Restructuring activities. Restructuring activities costs of $16.6 million were recognized in the three months ended March 30, 2025. These charges were incurred by our Europe reportable segment primarily as a result of severance and warehouse closure costs.

Previous wording

Net interest expense. Net interest expense decreased to $19.5 million recognized in the three months ended September 29, 2024 from $33.5 million recognized in the three months ended September 24, 2023. The decrease in net interest expense resulted primarily from a decrease in interest expense on outstanding borrowings due to decreased borrowings and an increase in interest income on higher cash balances.

Current wording

Net interest expense. Net interest expense decreased to $16.8 million recognized in the three months ended March 30, 2025 from $30.9 million recognized in the three months ended March 31, 2024. The decrease in net interest expense resulted primarily from an increase in interest income on higher cash balances.

Previous wording

Income taxes. Income tax expense increased to $284.3 million, a 25.0% effective tax rate, for the nine months ended September 29, 2024 compared to an income tax expense of $20.5 million, a 9.8% effective tax rate, for the nine months ended September 24, 2023. The change from an income tax benefit to an income tax expense in 2024 resulted primarily from the increase in profit before income taxes.

Current wording

Income taxes. Income tax expense increased to $94.1 million, a 24.1% effective tax rate, for the three months ended March 30, 2025 compared to an income tax expense of $52.1 million, a 22.9% effective tax rate, for the three months ended March 31, 2024. The increase in income tax expense resulted primarily from the increase in profit before income taxes.

Previous wording

(a)Availability under the U.S. Credit Facility is also reduced by our outstanding standby letters of credit. Standby letters of credit outstanding at September 29, 2024 totaled $24.7 million.

Current wording

(a)Availability under the U.S. Credit Facility is also reduced by our outstanding standby letters of credit. Standby letters of credit outstanding at March 30, 2025 totaled $24.2 million.

Previous wording

(b)The U.S. dollar-equivalent of the facility amount under the Mexico Credit Facility is $56.4 million (Mex$1.1 billion).

Current wording

(b)The U.S. dollar-equivalent of the facility amount under the Mexico Credit Facility is $54.0 million (Mex$1.1 billion).

Previous wording

(c)The U.S. dollar-equivalent of the facility amount under the Europe Credit Facility is $200.6 million (£150 million).

Current wording

(c)The U.S. dollar-equivalent of the facility amount under the Europe Credit Facility is $194.1 million (£150 million).

Previous wording

Items necessary to reconcile from net income to cash flow provided by operating activities included net noncash expenses of $398.4 million for the nine months ended September 29, 2024. Net noncash expense items included depreciation and amortization of $321.8 million, asset impairment of $26.6 million, deferred income tax expense of $45.2 million, gain on early extinguishment of debt recognized as component of interest expense of $11.2 million, stock-based compensation costs of $9.2 million, loan cost amortization of $3.8 million, accretion of discounts related to Senior Notes of $1.9 million, and losses on property disposals of $1.1 million. Other net noncash items were immaterial.

Current wording

Items necessary to reconcile from net income to cash flow provided by operating activities included net noncash expenses of $103.8 million for the three months ended March 30, 2025. Net noncash expense items included depreciation and amortization of $104.5 million, deferred income tax benefit of $11.0 million, stock-based compensation costs of $7.0 million, loan cost amortization of $1.2 million, losses on property disposals of $0.9 million, asset impairment of $0.6 million, accretion of discounts related to Senior Notes of $0.6 million, and gain on early extinguishment of debt recognized as component of interest expense of $0.1 million. Other net noncash items were immaterial.

Previous wording

Items necessary to reconcile from net income to cash flow provided by operating activities included net noncash expenses of $269.4 million for the nine months ended September 24, 2023. Net noncash expense items included depreciation and amortization of $307.4 million, loan cost amortization of $6.1 million, stock-based compensation of $5.2 million, asset impairment of $4.0 million, accretion of discounts related to Senior Notes of $1.6 million, and loss on equity method investment of $0.3 million. These expense items were partially offset by a deferred income tax benefit of $46.8 million and gains on property disposals of $8.4 million.

Current wording

Items necessary to reconcile from net income to cash flow provided by operating activities included net noncash expenses of $127.3 million for the three months ended March 31, 2024. Net noncash expense items included depreciation and amortization of $103.4 million, deferred income tax expense of $15.5 million, stock-based compensation costs of $4.7 million, losses on property disposals of $1.8 million, loan cost amortization of $1.3 million, and accretion of discounts related to Senior Notes of $0.6 million. Other net noncash items were immaterial.

Previous wording

The change in trade accounts and other receivables represented a $62.6 million source of cash related to operating activities for the nine months ended September 29, 2024. This change primarily resulted from a decrease in trade accounts receivable due to timing of payments received. The change in trade accounts and other receivables represented a $65.2 million use of cash related to operating activities for the nine months ended September 24, 2023. This change primarily resulted from an increase in trade accounts receivable from increased sales prices in the U.K. and Mexico and increased volumes.

Current wording

The change in trade accounts and other receivables represented a $91.5 million use of cash related to operating activities for the three months ended March 30, 2025. This change resulted from an increase in trade accounts receivable primarily due to an increase in sales from more favorable market pricing and a decrease in the use of our discounted accounts receivable program. The change in trade accounts and other receivables represented a $72.4 million source of cash related to operating activities for the three months ended March 31, 2024. This change primarily resulted from a decrease in trade accounts receivable and receivables from insurance recoveries.

Previous wording

The change in inventories represented a $173.0 million source of cash related to operating activities for the nine months ended September 29, 2024. This change resulted primarily from decreased raw materials, work-in-process inventories due to lower feed ingredient costs, and lower finished goods inventories. The change in inventories represented a $13.0 million use of cash related to operating activities for the nine months ended September 24, 2023. This change resulted primarily from increased finished goods inventories.

Current wording

The change in inventories represented a $64.2 million use of cash related to operating activities for the three months ended March 30, 2025. This change resulted primarily from increased input costs and an increase in inventories after higher seasonal sales in the fourth quarter of 2024. The change in inventories represented a $114.5 million source of cash related to operating activities for the three months ended March 31, 2024. This change resulted primarily from decreased raw materials and work-in-process and finished goods inventories primarily due to lower feed ingredient costs.

Previous wording

The change in prepaid expenses and other current assets represented a $65.6 million use of cash related to operating activities for the nine months ended September 29, 2024. This change resulted primarily from an increase in prepaid indirect taxes in our Mexico and Europe reportable segments. The change in prepaid expenses and other current assets represented a $8.0 million use of cash related to operating activities for the nine months ended September 24, 2023. This change resulted primarily from a net increase in prepaid insurance and prepaid maintenance of information technology.

Current wording

The change in prepaid expenses and other current assets represented a $44.0 million use of cash related to operating activities for the three months ended March 30, 2025. This change resulted primarily from an increase in prepaid indirect taxes in our Mexico and Europe reportable segments. The change in prepaid expenses and other current assets represented a $27.6 million use of cash related to operating activities for the three months ended March 31, 2024. This change resulted primarily from an increase in prepaid indirect taxes in our Mexico and Europe reportable segments.

Previous wording

The change in accounts payable, accrued expenses and other current liabilities represented a $79.7 million source of cash related to operating activities for the nine months ended September 29, 2024. This change resulted primarily from timing of payments to our suppliers, a reduction in grain input costs, and timing of legal settlement payments. The change in accounts payable, revenue contract liabilities, accrued expenses and other current liabilities represented a $12.2 million source of cash related to operating activities for the nine months ended September 24, 2023. This change resulted primarily from timing of payments to our suppliers, a reduction in grain input costs, an increase in our revenue contract liabilities and year-to-date fair value fluctuations of our derivative instruments.

Current wording

The change in accounts payable, accrued expenses and other current liabilities represented a $118.7 million use of cash related to operating activities for the three months ended March 30, 2025. This change resulted primarily from the payment of incentive compensation accrued for in 2024. The change in accounts payable, accrued expenses and other current liabilities represented a $212.8 million use of cash related to operating activities for the three months ended March 31, 2024. This change resulted primarily from timing of payments to our suppliers and a reduction in grain input costs.

Previous wording

The change in income taxes, which includes income taxes receivable, income taxes payable, deferred tax assets, deferred tax liabilities, reserves for uncertain tax positions, and the tax components within accumulated other comprehensive loss, represented a $151.9 million and $40.5 million source of cash for the nine months ended September 29, 2024 and September 24, 2023, respectively.

Current wording

The change in income taxes, which includes income taxes receivable, income taxes payable, deferred tax assets, deferred tax liabilities, reserves for uncertain tax positions, and the tax components within accumulated other comprehensive loss, represented a $51.9 million and $35.8 million source of cash for the three months ended March 30, 2025 and March 31, 2024, respectively.

Previous wording

Capital expenditures were incurred for growth projects, such as the South Georgia protein conversion plant, and to improve operational efficiencies, system enhancement projects, and reduce costs for the nine months ended September 29, 2024.

Current wording

Capital expenditures were incurred for growth projects, such as the South Georgia protein conversion plant, and to improve operational efficiencies, system enhancement projects, and reduce costs for the three months ended March 31, 2024.

Previous wording

Payments on revolving line of credit, long-term borrowings and finance lease obligations are primarily related to open market repurchases of outstanding senior notes. The proceeds from contribution of capital under the Tax Sharing Agreement with JBS USA Holdings were an allocation made during tax year 2023 for payment of historical tax adjustments. Payments on early extinguishment of debt are transaction fees related to the bond repurchases.

Current wording

The proceeds from the Tax Sharing Agreement with JBS USA Holdings were a payment of net tax incurred during the tax year 2023. Payments on revolving line of credit, long-term borrowings and finance lease obligations are primarily related to payments on finance lease obligations.

Previous wording

“EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we believe are not indicative of our ongoing operating performance consisting of: (1) foreign currency transaction losses (gains), (2) costs related to litigation settlements, (3) restructuring activities losses, (4) loss on settlement of pension obligations due to plan termination, (5) write-downs of inventory as a result of hurricane, (6) property insurance recoveries for property damage losses, and (7) net income attributable to noncontrolling interests. EBITDA is presented because it is used by us and we believe it is frequently used by securities analysts, investors and other interested parties, in addition to and not in lieu of results prepared in conformity with U.S. GAAP, to compare the performance of companies. We believe investors would be interested in our Adjusted EBITDA because this is how our management analyzes EBITDA applicable to continuing operations. We also believe that Adjusted EBITDA, in combination with our financial results calculated in accordance with U.S. GAAP, provides investors with additional perspective regarding the impact of certain significant items on EBITDA and facilitates a more direct comparison of our performance with our competitors. EBITDA and Adjusted EBITDA are not measurements of financial performance under U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under U.S. GAAP. Some of the limitations of these measures are:

Current wording

“EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we believe are not indicative of our ongoing operating performance consisting of: (1) foreign currency transaction gains, (2) costs related to litigation settlements, (3) restructuring activities losses, and (4) net income attributable to noncontrolling interests. EBITDA is presented because it is used by us and we believe it is frequently used by securities analysts, investors and other interested parties, in addition to and not in lieu of results prepared in conformity with U.S. GAAP, to compare the performance of companies. We believe investors would be interested in our Adjusted EBITDA because this is how our management analyzes EBITDA applicable to continuing operations. We also believe that Adjusted EBITDA, in combination with our financial results calculated in accordance with U.S. GAAP, provides investors with additional perspective regarding the impact of certain significant items on EBITDA and facilitates a more direct comparison of our performance with our competitors. EBITDA and Adjusted EBITDA are not measurements of financial performance under U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under U.S. GAAP. Some of the limitations of these measures are: