JBS S.A.

Wesley Batista – Global Chief Executive Officer, JBS Jerry Barag – Investor Relations Officer Andre Nogueira – Chief Executive Officer, JBS USA

Alex Robarts – Citibank Carla Cazella – JP Morgan Alan Alanis – UBS Daniel Simpson – JP Morgan Brett Hundley – BB&T Capital Markets Luca Cipiccia – Goldman Sachs Jose Jordan – Deutsche Bank

Thank you, good morning to you all, thank you very much for your participation on this conference call in which we will present the results of the fourth quarter and the year of 2014. Before moving forward, I’d like to specially thank our more than 215,000 team members as this is only because of them that we have been able to achieve better and better results every quarter in every year.

These people not only dedicate themselves daily to this success of the company and made a difference. Whatever they are, but also keep the spirit of our cultural and then our values alive.

I’d like also to specially thank all of our shareholders, bondholders and stakeholders who have always believed and continue to believe in our company. Thank you very much all of you.

Before going into details about our results, I’d like to make a short summary of what we have achieved over in the past few years. Over the last 10 years, we have made transformation of movements following internationalization and extension of the strategy.

These movements were we talked about very bold and have resulted in a significant growth of our company. Movements that sometimes did not follow market consensus and may have feel impossible to achieve, but became a reality only because of a lot of hard work, dedication, confidence, a successful strategy and all of these steps that we have.

In all of our history of more than 60 years since JBS was created 1953 by my father [indiscernible] initials of his name to the company’s name, we have been – always been faithful to our conditions. Conditions that have lead us, took a form, all of this transformation of movements as we have said before, as I had said before today when I look back at all that we have done, we are very proud to say that we were to capable of taking unique opportunities that we now in our opinion, we will not see again at least for the next decade.

In addition, we were able to put together a spectacular team, we absolutely focus on execution and search for excellence. Our process of internationalization, the company has been very successful, we took the opportunity of being in the most favorite moment that our country has experienced over the past last decade.

When our currency was over valued between 2007 and 2010, we are quite high potential company overseas at attractive price, but we were going to difficult times. Now as we see a recover in the North American economy and depreciation of the U.S.

dollar, we are clearly in a privileged position in which our assets overseas are significantly increasing the value. In addition, approximately 80% of our revenue and our cash generation are denominated in U.S.

dollars. Nevertheless, none of these would have been possible resulted commitment and dedication of all of our team members and the support of our shareholders and bondholders, who have always given us their trust and believe in our company.

To all of them thank you very much. Now I’ll turn the call to Jerry to go through our fourth quarter results and our annual results.

Thank you very much.

Thank you, Wesley, thank you very much once again, good morning and thank you for being on the line with us. So I will make reference to our presentation as I go through the results and I’d like you if possible for you to accompany me as I go through page by page, I’ll mention the page numbers, talking with the disclaimer on page 2 of our presentation which I requested for you as you go forward.

Firstly page 4 of our presentation talking about our consolidated results, in the fourth quarter of 2014, we had revenues of just R$34.3 billion that was up 26% from the R$27.2 billion in the fourth quarter of the previous year. On an annual basis, our revenue grew from R$92.9 billion in 2013 to almost R$120.5 billion in 2014, again just on the 30% year-on-year.

When we look at our gross profit, especially for this quarter and then for the year, gross profit went from R$3.7 billion in the fourth quarter of 2013 to R$5.4 billion in the fourth quarter of 2014, an increase of 45.7% and our gross margin went from 13.7% to 15.8%. On an annual basis, our gross profit went from R$11.84 billion to R$18.67 billion, 57.6% increase.

And our gross profit margin year-over-year went from 12.8% to 15.5%. Moving on to EBITDA, and firstly for the quarter again, our EBITDA for the fourth quarter of 2014 was R$3.29 billion, an increase of 75.6% from the R$1.87 billion at the end of the last quarter of 2013.

Looking ahead on an annual basis, our EBITDA on an annual basis we went from R$6.13 billion in 2013 to R$11.1 billion in 2014, it was an increase of 81% year-on-year, absolute EBITDA. EBITDA margin went from 6.6% to 9.2%.

And then finally on a consolidated basis speaking of our net income, net income for the quarter was just under R$620 million, 340% above the net income for the last quarter of 2013 which was R$49 million. On an annual basis net income went from R$927 million to just over R$2 billion, an increase of 120% year-on-year.

Earnings per share went from R$323 per loss of thousand shares to R$706 per loss of thousand shares. Now on page five of our presentation just to mention a couple of the financial highlights of the company net operating cash generation, very substantially increase quarter-on-quarter from R$355 million in the fourth quarter of 2013 to R$5.32 billion in the fourth quarter of 2014 an increase of 1400%.

Looking ahead on annual basis, operating cash went from R$2.54 billion to just under R$9 billion, an increase of 254% a year-on-year taking the year as a whole. And then free cash in the fourth quarter of 2014 was R$3.67 billion and we had negative cash generation, free cash generation in the fourth quarter of 2013.

On an annual basis free cash went from R$635 million in 2013 to R$4.7 billion in 2014. On to net debt and leverage, our net debt at the end of 2014 stable in relation to the third quarter was R$25.2 billion, with the leverage declined by substantially.

If you look at leverage on a quarter-by-quarter basis it declined from 3.7 times at the end of 2013 and we gradually reduced the quarter-on-quarter we were just about two times at the end of 2010 and 2014. And finally on page five, regarding debt – our net debt in U.S.

dollars. So we’ve taken on net debt at the end of the fourth quarter over the last four quarter and if we look at just from the third to the fourth quarter 2014, our net debt declined by $1 billion quarter-on-quarter, $1 billion net.

On page six, to highlight the percentage of our revenue and EBITDA which was generated in U.S. dollars and we have a breakdown of revenues at the top of page six, JBS USA represents 66% of our revenue, JBS Mercosul, which is our beef and related business in South America 23% in JBS foods, 11%.

But if we take the JBS Mercosul business in the JBS Foods which on our big percentage of the sales generated through exports and we have broken that down in the pie-charts on page six, 83% of our revenues is in U.S. dollars and 17% in Reais.

And then looking at our EBITDA 59% of our EBITDA generated JBS USA, 22% of JBS Mercosul, 19% of JBS Foods but again doing a calculation across the percentages of revenue that are generated in the exports. Our EBITDA have been just under 80% in U.S.

dollars and just over 20% in Reais for 2014. So with 83% of our net revenue and 79% of our EBITDA linked to the U.S.

dollars, the strengthening of this currency is highly performing – is highly positive for the performance of JBS. On page seven, we listed 10 priorities for our business in 2015 and number one, our focus is on organic growth and not on acquisitions.

We made a number of substantial acquisitions over the last couple of years in Brazil and abroad. We would be focusing on integrating and capturing the synergies associated with those businesses in 2015 and our focus will not be on acquisitions.

Operational excellence, we pride ourselves in our ability to run our plans well, many of the metrics that we see from public members demonstrate our ability to run our businesses well, on an operational basis. We plan to continue improving our operational excellence in 2015 to continue to extract better margins out of our business.

And we saw relevant reduction in our working capital cycle in the last quarter of 2014 when compared with the previous quarter. We will continue to focus upon reducing our working capital as a percentage of our revenue.

Free cash, again we saw very relevant free cash and particularly in the second half of 2014, we will continue to focus on free cash flow generation 2015 and that will help us continue to deleverage our business. At the beginning of last year, we’ve talked about being under 2.5 times by the end of 2014.

We were just about two times. We believe we can continue to improve on that in 2015 and we will be focused on that and obviously as we reduced our leverage, we’ll look to utilize that to reduce the cost of our debt.

We will be working on that replacing expensive debt with longer term cheaper debt and part of that is working with the rating agencies to improve the perception of the company, the rating of the company and we’ve been in meetings with the rating agencies and we continue to have dialog with them in order to reach its scope. Another question is our effective tax rate is quite high because of the structure of our business.

We will be focusing a lot on improving our effective tax rate in 2015, meaning we will be looking to take all the measures necessary to reallocate that and other measures in order to be more tax effective in 2015 and obviously as a result of all of these measures we will continue to focus on improving our net income and our earnings per share and generating better return on equity in 2015. So moving on to our business units now in our presentation, we will start with JBS Foods on page 10 of our presentation.

We have five business units, so we will spend just a couple of minutes on each one of these business units. Net revenues at JBS Foods from the third to the fourth quarter went from R$3.37 billion to R$3.65 billion in the fourth quarter, an increase of 8.1% quarter-on-quarter.

We saw an increase in sales volumes in all of the categories on the domestic market, highlight for – an increase in sales in our fresh chickens in Brazil up to 50% in relation to the third quarter of 2014. We also saw an increase of our pork sales of almost 5% of the domestic market and we saw higher volume, almost 5% up and higher prices and the exports of our prepared and convenience products for the export market.

EBITDA came in at R$6.56 billion, up from R$5.76 million in the third quarter, the margin increasing from 17.1% and the third quarter to 18%, in the fourth quarter. We had a decrease in raw material cost and obviously we had seasonality associated with this period, the Christmas period in Brazil and we also had an improvement in our chicken prices on the international market, our fresh chicken sales on the international market which represents about 83% of our total exports at JBS Foods.

We saw an increase in the prices. On page 11 of our presentation, a little bit about the synergies and the gains that we observed at JBS Foods, some of you might recall that after we acquired Seara in the middle of 2013, we indicated that we aimed to capture about R$1.2 billion in synergies and improvement at JBS Foods in 2014.

We actually surpassed that and we gained about R$1.75 billion those with the actual gains in 2014 and it was up 43% or R$529 million in relation to what we’ve targeted for the year. If we look at the prices of our prepared products on the domestic market in Brazil also we had quite a relevant increase in the pricing partially as a result of price increase, but also as a result of mixed optimization and that resulted in an average price increase of 22.8% for our domestic sales and our JBS Foods business in Brazil.

Moving on to JBS Mercosul, which is our beef business and beef and related businesses primarily in Brazil, we have operations in Paraguay and Uruguay and in Argentina as well and so this in reais, we had an increase of 16.6% in sales quarter-on-quarter from R$6.47 billion up to R$7.54 billion quarter-on-quarter. We saw an increase in our fresh beef sales in domestic market in Brazil and also in the international market.

Paraguay and Uruguay operations continue to maintain their good performance. In Argentina, we’ve been focusing on reducing cost and rationalization.

We’ve been increasing our domestic sales in Argentina quite substantially by value-added branded products. We’ve had substantial market share increase as a result of our efforts to increase our participation and the value added business in Argentina.

EBITDA in this business one can see on page 13, we had slight decline in EBITDA with the last five quarters, it was R$534 million, down from R$554 million with previous quarter. EBITDA margin coming from 8.6% to 7.1%, we’ve seen an increase in cattle prices particularly in Brazil and we’ve been maintaining our strategy to increase our branded and value added beef products in the domestic market in Brazil.

We had launched a number of convenience products on the domestic market and we’ve seen substantial increase in our sales of beef price and sales have been up more than 16% in the value added branded beef business in Brazil. Moving on to JBS USA, where we had three business units, our beef business or pork business and our pork business.

Starting with our beef business, which includes our Australian and our Canadian business, so these numbers from now on are in U.S. dollars, firstly, revenues in our USA beef business $5.85 billion to just under $6 billion an increase of 1.2% quarter-on-quarter.

Although there was some seasonality associated with the fourth quarter on the beef business and we had an increase in prices of 26% in the domestic and 25% in the international market which was partially offset by a decline in sales and compared to the third quarter, as I mentioned net revenues were up 1.3%. EBITDA, if we look at EBITDA for the second half of last year, it was up quite substantially there $505 million in EBITDA in the third quarter, $325 million in the fourth quarter.

EBITDA margin 8.6% and 5.5% when we consider the seasonality associated with the last quarter that is quite a strong fourth quarter and in this business we outperformed the industry through 2014 was a better performance than our industry peers. Domestic sales in Australia and exports from the U.S.

were highlights also during this quarter, and our operation in Canada has also been improving compared to the same period of previous year, presenting volume and price growth. Our beef business – excuse me pork business which is US centric, our pork sales in the fourth quarter were $964 million up from $938 million in the third quarter.

So again an increase of 2.8% going into the fourth quarter, we had EBITDA coming in just under $96 million down from $113 million in the third quarter. But EBITDA margin we look over the last five quarters EBITDA margin has been double-digits or very close to double-digits.

As a result the performance of the management in this business unit, again we’ve outperformed the industry public indicators indicted we’ve been the strongest company in the pork business in the U.S. in 2014 and our sales also have increased by substantially out of this business.

Pilgrim’s Pride already performed published its numbers in earlier in at the end of January, beginning of February. We will quickly go through the numbers here JBS USA owns 75% of Pilgrim’s Pride.

We had sales in the quarter of $21 billion down from 2.26 in the third quarter, 6.9% decrease which is very much associated with the seasonality of this business. We had strong performance to our share, we had 19.2% EBITDA margin in this quarter, 17.4% in the fourth quarter.

But again seasonally that’s a very strong number $435 million down to $368 million in EBITDA in the fourth quarter. Net income for this business we reported separately came in at $167 million that was up from $48 million in the fourth quarter of 2013.

A word about exports, we have a slide on page 21 to demonstrate how relevant exports have grown our business. Our exports represent more than 30% of our total revenues.

In 2014, we had $16.2 billion in exports from all our production platforms, more substantially from South America and we also are relevant exporters out of North America and particularly out of Australia. We had $16.2 billion in sales and highlights South America as a whole, other South American countries, Chile, Peru being a big importers, Columbia is imported quite a lot more from the west more recently, Africa and the Middle East which is a very traditional market for the South American producers, Greater China, we served this Greater China primarily out of Australia, and Mexico we serve this Mexico out of our North American business.

Our export sales were up 38% year-on-year when we compare the numbers with 2013 and I’ll just briefly on our financial metrics talking a little bit about CapEx and cash generation, page 23 of our presentation. In the fourth quarter, we had a CapEx of R$1.65 billion, a R$434 million of those reais was related to the net effect of working capital, our companies that we acquired in the period and R$1.2 billion was related to the additions to property spent and equipment and an intangible asset.

Approximately 40% of that corresponds to acquisitions made during the period during the fourth quarter and the balance represents CapEx associated with modernization and maintenance of our facilities. For the year, our CapEx was R$4.27 billion including the acquisitions.

Cash generation I mentioned it earlier for the fourth quarter we had R$5.32 billion in operating cash and R$3.67 billion in free cash in the fourth quarter. For the year, we had R$9 billion in operating cash and R$4.7 billion in free cash flow for the year.

On page 24, looking at our leverage, our net debt and our debt breakdown by currency leverage as I mentioned earlier declined quarter-on-quarter to 2.1 times at the end of 2014. Net debt in U.S.

dollar is very relevant, net debt quarter-on-quarter was down $1 billion from 10.5 to 9.5 around numbers from the third or the fourth quarter in 2014. I’ll break down by currency and by cost out, 80% of our debt is in dollars, 30% is in reais.

Our cost in U.S. dollar is 5.5%, just under 5.5% in reais, just above 11.5%.

Where we capture our debt by source, 40% comes from the debt capital market and practically 60% from commercial banks and I’ll breakdown by company, 58% is that JBS SA, 14% is JBS Foods and the remaining 28% in other subsidiaries. And a little bit about our profile on maturity on page 26.

At the end of the quarter, we had just under R$15 billion in cash or cash equivalents, that’s 109% of our short-term debt that’s up R$2.4 billion in relation to the cash position we had at the end of the third quarter. Besides that we have R$1.43 billion are committed fully available lines in the U.S., which when added to our cash position represents practically 120% of our short-term debt.

Our short-term debt is just about one-third of our total debt at the end of the year. And then at the bottom of page 25, we have our debt maturity curve quite a portion of our debt and maturing beyond 2020.

And finally before handing over to our CEO for some comments before we open for Q&A or what about the performance of our share price and some recent events, I’d like to mention before I handover to [indiscernible]. Our share prices up 27.7%.

We closed at R$11, 20 on the public stock exchange, it was one of the top 10 performers on the stock exchange and then we compare with the performance of the exchange itself, it was quite an excellent performance. Our market cap at the end of the year was just under R$33 billion.

Recent events just briefly there were three recent events that we want to mention here in the call. Firstly, control subsidiary in the U.S.

Pilgrim’s Pride Corporation issued a bond and very recently 500 million bond in order to extend its maturity curve, a tenure bond at 5.75% yield, at the lowest yields for any debt contracted budget, our subsidiary in the industry or the company, tenure bond. We also had a very recently also early March the final approval from the Australian regulatory authorities with the acquisition of the Primo Group.

Remembering the Primo Group is a leading producer of value added meat products for the more than 50% market share in Australia and New Zealand with some very strong brands like Primo Smallgoods, Hans Beehive, Hunter Valley Quality Meats and Primo Quality Meats. And it’s finally again just to lead call recently Pilgrim’s Pride approved and paid a special dividend of $1.5 billion to the shareholders, it was approved in January by the board and was paid out in February.

For JBS owner of 75% for the company that represents an income of $1.13 billion which I mentioned is more than totality of the investment that JBS made through acquiring 75% of Pilgrim’s Pride. With that, I’ll hand it over to Mr.

Wesley Batista. Wesley Batista, our CEO to make some comments before we open up to Q&A.

Thank you very much.

Thank you, Jerry. We are so excited to see our 2014 results but looking forward, and looking in 2015.

We strong believe that we can do more and better, when we look our – all of our business across enterprise, I am very confident that we are going to see even a strong year in our company’s and with our results in our metrics. Jerry mentioned our 10 priorities for 2015 and we are very focused on these priorities and we are going to be 100% focused on these priorities.

We strongly believe that we can add and create a lot of value for all of our shareholders, being very focused on these priorities. We did a lot of transformational movements in our company in this past 10 years.

And we strongly believe that 2015 time for us to consolidate even more and create even more of that through our company and our shareholder. So with that I will turn to the operator to open for Q&A.

Thank you.

Hi, good morning.

Hi, Farha, good morning.

Hi, Farha.

Could you comment on [indiscernible] in the U.S.? How you anticipate that to impact on global poultry is you do have a global view and in particular how that would affect your Mexican operations, would it benefit it and are you still able to shift out of U.S.

and supply in Mexican operations.

Farha, I will give you a brief comment and I will transfer to André to talk more about that but look. As we have operation in U.S., Mexico and in Brazil.

Forget the asset as a whole we don’t see any recent big impact on our earnings and as well for Pilgrim’s as [indiscernible] 8% of our revenues is export, so it’s not a big amount or portion of our business itself. We don’t see this being any big hurt for all business overall, but please André if you can add more comments on that please.

I think that is, first we naturally reduced the import of some of the restated would be beneficial from our business in domestic, but more important I don’t think that we would be meaningful in that first in terms of the financial year but we are I think that response to see that is [indiscernible] describe by the wide board and then the boundary stop integration that go back, so they start to believe I think that we’ll see a little bit more strategy state [indiscernible] but I don’t think that we will start much more than that and which they [indiscernible] business state is more than the seasonal for us to move [indiscernible] so I really don’t see and meaningfully back on these [indiscernible] production or in the exports of the [indiscernible].

Great. Thank you very much.

Thank you, Farha.

Thank you for taking my question, just a few, one, I was wondering if you could talk about the [indiscernible] strike in Brazil kind of where it is geographically and how you feel like I could may impact the results in the near-term.

Bryan, yeah, we have a strike few weeks ago, now it’s over, things is normal and we are running all the glance normally in a normal situation now. We are going to see some impact on our result this year, but it’s not going to strike me, so we’re going to see a stronger result in our JBS Food business in the [indiscernible] 2014 even with the strike.

So I don’t like to minimize the problem that was a real problem that is not meaningful to our fact our earnings, so we are going to see strong first quarter in our JBS food division and especially with the real in the [indiscernible] is now March will be a very strong year and going forward even more remember that 50% of our revenue in JBS Food is export and we control all the supply chain we’ve reduced all of our chickens and which will boost here in Brazil all of the port that we process so we are not seeing an increase in our output and we are going to see a strong benefit in terms of our revenue, help to buy the weakness of the real.

You mentioned in your slideshow you expect capital supplies in the U.S. is increased in 2015.

I was wondering one if you could put maybe a percentage around that as well as give us some color on your anticipation for cattle supplies in Brazil as well as Australia if I recall correctly Brazilian kind of process and was up double digit this past year so I think probably a little room for growth. Again I was wondering if you could just comment on that.

I will handle the Brazil and parts in our real transfer to [indiscernible] U.S. and Australian part of the question so yeah, in Brazil we’ve seen quite a strong growth in our [indiscernible] in the best for years or so.

More in the end of last year and now we’re going to – we are seeing our [indiscernible] in Brazil that is going to keep increasing the size of the hurdle, but in short just put a pressure in [indiscernible] you have less get or available to process in the plan so [indiscernible] middle term and long-term but for in middle term, we are seeing some pressure in kind of supply and in [indiscernible] handle the U.S. and Australia.

So in U.S. Bryan, we’re seeing a very strong expansion continue, half a retention and you remember [indiscernible] we should believe the [indiscernible] 10% development and so very clear that the retention will be very strong, I think that the number shared the subcategory, we’ve gone the benchmark of 30% less on get for the full year probably more of [indiscernible] with second part of the year compares the first part of the year.

The 30% less than [indiscernible] these operation continuous strong EBITDA now, but it could be part of that. [Indiscernible] but the ownerships with U.S.

dollar but good news for 16 with better reais where we did residential [indiscernible] 16 as we more than. In Australia I conduct with the number of [indiscernible] available we do a little bit more because then we’re seeing some inflation going on good results by conduct the U.S.

talk about week [indiscernible] conditions in the [indiscernible] very strong which above weeks. Our perspective we are not grew the Australia prevention, on important that seeing with our CEO on 70% high [indiscernible] expected [indiscernible] I just talk about Merrill Lynch on again [indiscernible].

Alright and two last quick questions. One of you – Andre while you on the phone, puts advice for the cash flow increase United States, but U.S.

came up 6% on [indiscernible]. Are you concerned about the markets of ability to absorb what production and do you think as most the [indiscernible] margins in 2015?

By talk about sales force reduction.

Yes.

Unfair. I mean U.S.

[indiscernible] I think about 6% increasing supply, so I’m just wanted do you think the market can absorb that.

How much we [indiscernible] of last year the pork actually absorb very, very high of that stock amended above global days and that [indiscernible] my expectations that which you note have been these going to talk about [indiscernible] team right place more, these go to up in U.S. and extremely competitive on commission to export.

So my expectation but we balance that to export, we important much we have been import [indiscernible] that we [indiscernible] built much [indiscernible] last year and I think that we believe [indiscernible] report much you have and we export much more. So that will balance the supply and demand for [indiscernible] we can get the expect much more.

And question Jerry, you talked about just reason and choosing at another talked about. Was [indiscernible] company in [indiscernible] 12, March.

Do you want to be investment grade or can you use some primers and one of much expectations are board from your ratings?

Not all of the company is to reduce the cost of that, that’s the grow basically and whatever we possibly we can due to reduce cost of that we will do. Why not the one of the instrument is to what improve the perception of the company for the rating agencies.

We working with that communicating by the lot of that debt capital market in general and [indiscernible] banks with the relationships and [indiscernible] to expand their the maturity and reduce the cost of that and we think rating agencies this could be an increment so [indiscernible].

Thank you so much for your time.

Thank you, [indiscernible].

Hi, Andre, thank you for taking the question. My question is on the personal improvements… these strategy working out from [indiscernible] that given being these improvements on coming together with [indiscernible] comments are focused a little more on the product side this time around good shareholders that JBS S3 perhaps expect higher digitals in our goal in 15 or go ahead over the first.

[Indiscernible] we are going to look the amount of free cash flow, the real generate we strong believe the generate strong amount of free cash flow. And we are going to watch our leverage [indiscernible] leverage decline the more than the level that we are looking is the possible that we can arise a special dividend to all our shareholders can be a possibility, but we’re going to watch and we’re going to do this if our leverage is below the level that we believe we’re going to do.

Okay, thank you, so I have an operational question on 4Q [indiscernible] the great just America still be stood out little bit weaker and look at it what’s let’s solve on the gross margin front, but it was a big SG&A pressure on EBITDA margins if you want to – could you elaborate a little bit [indiscernible] SG&A hike is sort of unusual for the quarter and we expect – what do you expect [indiscernible] margins into ’15.

Yeah, good, we have a good spike in SG&A, actually in SG&A line but it’s part of the non-recurring expense that you can see that we incurred in R$500 million in non-recurring expenses and around 400 million of this 500 million non-recurring expenses that went through the SG&A line is a litigation process there we were litigating [indiscernible] one of the states in Brazil that we have a sizable operation, seems the acquisition of [indiscernible] the company [indiscernible] mitigating affects this build with [indiscernible] states and these dispute, there were claims for sizable amount of money and our legal to [indiscernible] cash was low and the cost was low as following the IRS loss, we did never book deals position, we never get this position, but the [indiscernible] they decide to report I don’t know exactly how to call this, a program to incentivize companies to settle dispute litigation and the program that [indiscernible] gets up interest rate then panel to all these things to attract the company shows stop mitigating and [indiscernible] just cause almost R$400 million that this is one-time event that we book all in our fourth quarter so this was the reason that our SG&A line went up. I think the last part of your question is about this business in Brazil outlook, we have seen a headwinds coming from the depreciation of the real, but in the other hand Brazil was quietly heavy exploding [indiscernible] Russia and through counters in the Middle East and to all the counters that is quite heavily that [indiscernible] production and as the ruble depreciated the lot in Russia, we have seen a reduction in volume in terms of imports in Russia and some other accounts [indiscernible] January and February export declined around 30% so these headwind for sure.

We have a very strong platform, these platform we’re going to see some pressure in these margin in Brazil, but we have a strong platform and we believe we can handle now our business to try to not to lose ground in terms of margin. Overall, fortunately I have been saying this for a long time fortunately JBS today, our [indiscernible] and geography and as well in terms of the segment that we are achieved in this form and factors would brought us well the same is give us a good opportunity to have more stable [indiscernible] even with this challenge in the business like I mentioned in my remarks, I strongly believe that we are going to do better in 2015 than we believe in 2014 and all of the flows in terms of net income, in terms of you know operating income, in terms of cash flow generation, in terms of leverage in our balance sheet, and hopefully improving our credit rate, and so we are confident.

Great, thank you.

Thank you. Operator Our next question comes from Allison Redlund [ph] with Bank of America – Merrill Lynch.

Good morning everyone.

Good morning.

Two questions if I may. The first one Jerry, you were mentioning at the end of the call that your group’s paid dividend, right of $1.1 billion dividend through JBS.

What would be the use of proceeds?

The – sorry, Allison this is Wesley, I am going to answer. So [Audio gap] and we are holding this cash dividend of almost in the same amount in U.S.

dollars. So the use of this cash is we are going to pay to suppliers to fund the premium acquisition, we are looking to close in the end of March or more exactly March 30.

Okay so premium will close at March 30. Okay.

Yeah.

And then I think you also have Tyson, Mexico which is closing this year, and I think it’s $400 million acquisition.

Yeah that’s right, we are waiting for them like to get approval in Mexico that we believe we are going to get this in the second quarter, and we will have more than cash available to fund this accreditation.

Okay great. And you expect Tyson to close in the second quarter of this year, is that a safe assumption?

Yeah.

Okay thank you. And then my second question would be, as you look to reduce the cost of debt, I imagine you are thinking of doing liability management with your debt particularly in the U.S., you have a bond that is due now in a month or so, would you be thinking of calling the 2018 bond and also engaging a liability management more in the U.S.

than in Brazil, let’s say.

Well the 2018’s callable seems to be in December, if I am not wrong or general, sorry general, the 2018’s callable, and we are always looking options to see what is the best way. The real option that we can solve this bond, the question is going to be if we are going to do our liability management, we are going to use cash, we are conceding quite a strong amount of cash to call these bonds, but the way we should do, from things to balance all our debt profile should be more tax efficient.

So yeah we are going to be looking with the units to balance our balance sheets between all our sub, yeah.

And do you see more out of the USA and it is rather than you know the USA you have a higher cost of that, right.

Yeah there is like clear possibility for sure.

Okay that’s great. Thank you so much.

Thank you.

Hi, good morning everyone. Just a couple of questions…

Hi Jordan.

Can you remind us – has there been a change or whether you are maintaining your sort of normalized margin for the JBS USA, I think you had mentioned 4% to 5% before, but obviously part of that has been trending well above that. And I guess a related question is that you had losses in that business, and with the EBITDA for the last couple of years during the first quarter.

Should we not expect that that will be the case this year, given that this structural change is happening, so any idea of again margins in the first quarter and then the rest of the year and going forward for JBS U.S? And then my second is, I know your financial position of the company has changed so much that you cancelled your IPO of JBS Foods and I wonder whether it’s even necessary or desirable going forward given that the leverage position is improving so much, I mean what’s your view on the desirability that you have been having, trading, and all those complications that come with that and obviously you already have one for the subsidiary, having two might complicate it further, and then sort of if you don’t need it, it’s off the table indefinitely.

Yeah sure, let me answer the last part of your question about JBS Foods, and I will ask Andre to answer your question about the USA margin. So first of all we were looking for an IPO in JBS, JBS Foods, and we decided to stop the process because the market conditions in Brazil is not favorable, sorry, so that could remark that Brazil is not favorable to that now.

But the reason IPO in JBS was not to improve volunteers or was not because we were looking to raise equity because of cash. The reason we should go on an IPO on JBS Foods was more looking to unlock value, we believe value that our [indiscernible] as we look at some of the parts is well below in our view, in the level that this should be and in one of the options that we were looking we should go for an IPO on JBS Foods to try, you know to demonstrate that the real value of this unit should unlock that.

If I look, I have been doing a lot of exercise here, when I look at all of these residuals, JBS USA, all our earnings in U.S., applying the U.S. meat for comparing using our peers, when they think when we do here on JBS Foods, our earnings comparing to be here in Brazil, and in our beef business, some of the part is well below the level that we think is the right value.

So there is a loss that we will have if we go on an IPO, but we are not going to try this, unless the market change substantially, Brazil we have a niche to do, we are only going to do this, if this – if we can create value, this is the reason. Andre, can you answer the question about the U.S.

beef margin please.

Well although we saw that we have the size, we believe in 2014, 4.2%, I will tell that the main reason we have been [indiscernible] so beef business in U.S., beef is about, the reason we are doing the business is, so the combination of it, [indiscernible] you see a lot of contention in it, despite that the market conditions, there are multiple things, we are very close that we can believe a better results. Even if the market is just not like we have seen in the years, we can believe a year, [indiscernible] about we are doing in the last two years, not consequence of the release, but consequence of we doing that business in the company.

So I do not expect quality, I will be looking than in the last year, the first quarter, we expect that we are going to achieve better than that.

Great, thanks a lot.

Thank you.

Thank you for taking my question, and congratulations for the results. I just had a couple of questions also regarding leverage, regarding that level, and they have to do with the full year numbers more than the quarterly.

Basically, I mean if my assumption is right, all the reduction that you had in net debt is because your cash balance has been increasing much faster than your gross debt. I mean in Reais, your gross debt year-over-year 2014 versus 2013 has grown up 22%, while your cash has grown up 65%, and we do the same calculation in dollars, I mean you gross that in dollars went up 9% in the year and your cash went up 47%.

So my first question is, why not reduce some of the gross debt with the intended objective that you declared earlier regarding reducing the cost of debt, I mean why not paying more expensive growth debt. That would be my first question.

The second is also related to that.

You are exactly right, Alan. We are going to see to reduce our gross debt and to reduce our amount of cash, reduce more cash than we think we need, and we are building more even in the first quarter, and we are just starting to – to start to see that debt that is even is not maturing now that we can see without any balance or [indiscernible] should reduce, you know we were looking what’s going on in Brazil as you know, the Brazilian market is volatile in this last three months or so and we would think that was prudent to have our strong [indiscernible] we are not seeing any problem now that we cannot rebuild the amount of cash that we have, so we are going to do what you said.

Got it, and my second question I guess is related, maybe it’s the same answer. But I mean you have 72% of your debt in Brazil, in JBS SA or in JBS Foods, and 80% of your debt is in U.S.

dollars, and why not take some of this debt in JBS USA in dollars directly or even in Pilgrim’s Pride. I’d guess that that will have a couple of benefits, also resulting in the financial expenses, the interest rate that you are paying and also in your effective tax rate, because you will see again the full year numbers, your effective tax rate still increased from a high level.

It was 37% in 2013, you basically paid a 43% effective tax rate in 2014, so…

Yeah look you are correct, exactly, in points that despite of our priority for 2015, and we are going to do that exactly what is needed, so we are going to look to rebalance our debt, we are unbalanced today with too much of debt, we have less debt in other places that we are fully tax payer today, we have MRLs to size our actual, to almost size here in Brazil and we are going to do that exactly what we said Alan, we can benefit from lower interest rates, and also we can benefit from a better set ratio rate on our business.

Got it, that’s very acute. Thank you so much and again congratulations.

Thank you very much.

Thank you.

I’d like to thank you all for being in our earnings call this morning, and again thank you for all of your support. And we look forward to keep generating value and delivering better results every quarter.

Thank you all.