2011 Annual Report

1
SUSTAINABILITY 2011
ANNUAL REPORT
SUMMARY
ANNUAL REPORT SUSTAINABILITY 2011
SUMMARY
2 4 Mission, Vision and Values Main Operating and Financial Indicators Corporate Profile A Message from the CEO
6 8
10 Operations and Markets 16 Financial Results 24 Corporate Governance 28 Awards in 2011 30 Sustainability 38 Sustainable Farming 40 Employees 46 Corporate Information
MISSION, VISION AND VALUES
Mission
To be the best at whatever we set out to do, focusing exclusively on our activities, ensuring the best products and services for our customers, solidity with our suppliers, satisfactory profitability for our shareholders and the certainty of a better future for all our employees.
Our values
Planning Determination Discipline Accessibility Honesty Simplicity
Our pillars
Our culture, our people, our products, and our customers.
Who we are
People with the same attitude, complementary expertise, a sense of urgency and a spirit of leadership.
What bring us together

Trust.
MAIN OPERATING AND FINANCIAL INDICATORS
MAIN OPERATING AND FINANCIAL INDICATORS

Economic and financial Indicators R$ (million) Net revenue Cost of goods sold Gross income Gross margin Selling expenses General and administrative expenses Financial expense, net Other income (expenses) Operating result Net income from discontinued operations Income Tax and social contributions Share for non-controlling shareholders Net income/loss(1) EBITDA EBITDA margin Net profit / loss per share
Results attributed to the participation of controlling shareholders.
2011 61,796.8 (55,100.2) 6,696.6 10.8% (3,144.1) (1,739.2) (2,010.7) (32.7) (230.1) (92.8) (247.2) (75.7) 3,151.0 5.1% (0.03)
2010 54,712.8 (47,994.8) 6,718.0 12.3% (2,627.2) (1,641.0) (2,223.0) (168.2) 58.6 12.2 (325.4) 38.2 (292.8) 3,766.1 6.9% (0.12)
% 12.9% 14.8% -0.3% 19.7% 6.0% -9.5% -71.5% -16.3% -
Distribution of net revenue and EBITDA by Business Unit in 2011

Net revenue by Business Unit 2011
JBS USA pork business 8% JBS Mercosul 57% JBS USA beef business 39% JBS USA beef business 26%
EBITA by Business Unit 2011
JBS USA chicken business 18%
JBS Mercosul 35%
JBS USA chicken business 5%
JBS USA pork business 12%
Net revenue (R$ million)
EBITDA (R$ million)

3,766 3,151
61,797 54,713
30,340
34,312 1,156 1,276
14,142
602
2007 2007 2008 2009 2010 2011
2008
2009
2010
2011
EBITDA Margin (%)

4.3
6.9 5.10
3.8
3.7
2007
2008
2009
2010
2011
NET REVENUE AND EBITDA BY SEGMENT AND REGION

Total net revenues by segment
Chicken 20% Others 6%
EBITDA by segment
Chicken 6% Others 7%
NET Revenue by region

South America 24% Others 3% South America 51%
EBITDA by region
Pork 10%
Pork 15%
Beef 64%
Beef 72%
USA and Austrlia 73%
USA and Austrlia 49%
Operational and Commercial Indicators 2011 Head slaughtered (thousand) Cattle Hogs Smalls* Volume Sold (000 tons)* Domestic Market Exports TOTAL
* Not including chicken.
2010 15,112.6 12,841.8 2,531.1 6,696.6 2,030.9 8,727.5
% -0.2% 2.3% 26.4% -0.8% 1.2% -0.3%
15,088.9 13,132.2 3,198.3 6,642.5 2,055.4 8,697.9
retranca CORPORATE PROFILE
BS is the world leader in production of animal protein and the second largest private Brazilian multinational company. With net revenue of R$61.8 billion in 2011, the Company has a global platform for producing and distributing meats, with operations in Brazil, the United States, Australia, Mexico, Paraguay, Uruguay and Argentina. Its operations also extend to Europe, Asia and Africa, through sales offices and distribution centers. JBS 286 production units employ over 135,000 global citizens across five continents. In late 2011 the Companys slaughter capacity reached 81,400 head of cattle, 18,300 lambs, 7.2 million birds and 50,100 hogs a day. The Company is the only one in the sector that operates directly in the worlds three main producing countries (Brazil, the USA and Australia), also having a relevant share of global markets for beef, lamb (the worlds leader in both markets), chicken (second largest company in the world) and pork (third-ranked on the US market). JBS is also the worlds largest leather processor, with plants in Brazil, the United States, China and Australia, with a daily production capacity of 86,300 hides. Privileged geographical distribution allows JBS to reach consumers in over 140 countries on five continents. In addition to the supply of fresh meat, the Company operates in high value added sectors, with several brands around the world, such as Friboi, Maturatta, Organic Beef (Brazil), Swift (Brazil, the USA and Argentina), Pilgrims Pride, Gold Kist Farms (USA), King Island Beef and Tasmanian Premium Beef (Australia). In 2011 the Company invested in a high profile advertising campaign to strengthen the Friboi brand in Brazil. The Companys main goals are operational excellence and the continuous search for the best margins in the various markets in which it operates, always in full compliance with the best
CORPORATE PROFILE
social and environmental practices. JBS was the first company in the beef industry to go public in Brazil, in 2007, and it is run in accordance with the corporate governance rules established by the Novo Mercado of BMF&BOVESPA. The Board of Directors, made up of 11 members, participates actively in the decision making process of JBS.
Corporate headquarters in the United States
JBS pursues operational excellence and continuously strives for the best margins in the various markets in which it operates
JBS is always modernizing, striving for improved product and raw material quality
MESSAGE FROM THE CEO
MESSAGE FROM THE CEO

e take great pride in the fact that over the last 59 years we have built a company that today is the global leader in the animal protein market. We have the worlds largest and best-positioned platform for meat production and distribution, with direct access to consumers in over 140 countries. Our growth cycle was fast and intense, especially as of 2005. In seven years we went from the leadership in Brazil to the leadership in the worlds principal and most efficient production centers: the United States and Australia. We knew how to take the opportunities that arose at a time of economic uncertainty in developed countries. At the same time we managed to gain the confidence of capital markets and we have had the invaluable support of our shareholders in making the decisions that have led us to our current position. We pride ourselves in being a company that was founded modestly in Gois and which has reached its current size without ever compromising our principles or values. Always faithful to our roots and our culture, we have proven that we have the expertise and talent needed to take on a global role. We are constantly striving to maintain levels of excellence in everything we do, but we want to go further. We want to be the best at what we do, the most efficient, the most profitable, the most remembered by consumers, and the most sustainable. We want all of this while keeping our feet on the ground and without betraying the culture of simplicity and efficiency that has brought us this far. The integration of our operations around the world moved forward in 2010 and 2011. JBS operates nowadays according to the same procedures and quality standards in its four divisions: JBS Mercosul, JBS USA Bovines (including Australia), JBS USA Pork and Pilgrims Pride, which operates our chicken division. We have overcome cultural shocks and economic barriers to introduce our way of producing animal protein to each of our plants whether they are in the Midwest of Brazil, the Australian coast, or the Great Plains of the United States. Now it is time to reap the rewards of the operational integration project we have been involved in and, as of 2012, entered the fine tuning phase. Thanks to this integration, we have been able to reduce our corporate costs by over US$100 million. This is the moment to go after results and pay our shareholders back with financial returns for the trust they have
put into our work. I am convinced that our management team is able to make the most of our productive platform. In 2011 we performed better than the year before in most of our units - except in the chicken business in the United States, which had an atypical year. Our organic growth was 12.9% and we achieved a cash flow from operational activities of R$606.5 million, reversing the negative results in 2010. In addition to the gains from synergies and the constant striving for improvements in our plants, JBS is expanding its operations in product lines of higher added value, through meat processing and the use of our various brands. One example of this effort was the campaign launched in 2011 to strengthen the Friboi brand among beef consumers in Brazil. I must take this opportunity to reiterate JBS commitment to best social and environmental practices. This report provides several examples of how the Company leads the meat industry not only in volume and revenue, but also in terms of sustainable action. JBS Sustainability Committee works hand in hand with the highest levels of the Companys management, which makes our social and environmental practices a strategic element of the Companys operations. I also want to thank the 135,000 people who working at JBS worldwide. Our executive team and our workforce are what truly support the Company on a daily basis and have made it the benchmark on the markets where it operates. Best regards, Wesley Mendona Batista
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OPERATIONS AND MARKETS
Its privileged geographical distribution allows JBS to reach consumers in over 140 countries on five continents
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JBS Mercosul
ercosul operation encompasses activities in Brazil, Paraguay, Uruguay, and Argentina. In 2011, the division posted R$14.9 billion and accounted for approximately 25% of the Companys global net revenue, which had an increase of 11.9% over 2010. JBS is the leading company in the beef market in Mercosul. In Brazil, the Company also operates in leather, being the worlds largest processor and exporter, in dairy, through its subsidiary Vigor, and it also has a division called New Business, which covers operations directly related to the production and processing of the by-products of its slaughter business. Besides striving for operational efficiency at its plants, in 2011 JBS adopted as strategic elements in Mercosul the strengthening of its own distribution network, investment in strengthening the Friboi brand in Brazil, and its continued efforts to maintain the premium positioning enjoyed by the Swift brand throughout the region. It should be noted that in Brazil, in 2011, the merger with Bertin, which was absorbed in 2009 by JBS, went through. More than R$500 million in redundant costs and expenses were eliminated during the integration project. Guided by the pursuit of operational efficiency, the effort involved the standardization of procedures, the concentration of activities in larger and more efficient plants, and the modernization of facilities. JBS so began 2012 ready to reap the rewards of its intense integration work done in 2010 and 2011.
BOVINES
The most relevant of JBS businesses in Mercosul is its bovines operation. The division involves more than 55,000 employees in 50 slaughterhouse units, 12 distribution centers, and five feedlots. Considering all the countries in the region, JBS has a total daily slaughter capacity of 53,000 head of cattle. The units are strategically distributed throughout every region of Brazil, in the major cattle farming states in the country. In addition, the Company is recognized for being present in the largest production hubs in Argentina, Paraguay and Uruguay.
The bovine division also includes five feedlots that the Company has in Brazil. In 2011, more than 211,000 animals were finished in feedlots owned by JBS in partnership with farmers around the country, ensuring top quality meat for the industry and closer contact with the farmers, who also achieved attractive returns due to the partnerships that were developed. JBSs operations in Mercosul are capable of serving large retailers to small and medium markets, in addition to various food service segments. Starting from industrial kitchens and going through to the finest haute cuisine restaurants, in 2011 more than 150,000 customers were served. Among the divisions main products are fresh and frozen beef, special cuts, offal and processed products, including frozen pre-cooked or cooked meat, dried meat, diced meat, burgers and sausages. As for exports, JBS Mercosul certified to sell its products to more than 140 countries. Last year, beef exports from Mercosul went to Russia, Hong Kong, Egypt, the Middle East, Italy, the Netherlands, Peru and Singapore, some of the major importers, earning R$5.3 billion in revenue, 2% up on the previous year.
DAIRY
Also at JBS Mercosul are the dairy businesses, which the Company operates through its subsidiary Vigor Alimentos. The Company only operates in Brazil, where it ranks fourth-largest in its segment, and it has features that put it in a prominent position in relation to its competitors. It focuses on the development and marketing of high value added products and it is a market leader in several categories it operates in. The Company lends its name to its main brand, but also has consumer brands such as Leco, Faixa Azul, Danubio and Serrabella in its portfolio. With 3,300 employees at its seven production units, four dairy stations, and seven distribution centers in Brazil, Vigor
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ended 2011 with net revenue of R$1.2 billion. Approximately 80% of this revenue came from sales in the Southeast, with the state of So Paulo being Vigors largest consumer market. The dairy stations are strategically positioned in the states of So Paulo, Paran and Minas Gerais, where the main dairy production in Brazil is located. The nearly 1,300 farmers, with whom Vigor has had a relationship for decades, provide about 22 million liters a month, supplying all the Companys plants. JBS Mercosuls main dairy products are yogurt, fermented milk, UHT milk, cheese, butter, dairy drinks, fresh white cheese, light cheese, cream cheese, small Swiss cheeses, and other desserts, as well as products derived from animal and vegetable fat, such as margarine, mayonnaise, vegetable creams and edible vegetable oils. In 2009 Vigor was integrated into JBS in the merger with Bertin. Between 2010 and 2011 the Company went through a process to strengthen the executive body and investments in its product line. In 2012 a voluntary public exchange offer of shares is being made, to make Vigor more independent and visible, making it a publicly traded company, listed on the stock exchange, complying with the highest and most rigorous levels of corporate governance established by the Novo Mercado.
JBS Couros is the largest leather processor and producer in the world
LEATHER
JBS Leather is the worlds largest leather producer and processor, accounting for one third of all Brazils exports in the segment, with an integrated production system that runs throughout every stage of the process. With 26 units, all in Brazil, JBS Mercosuls leather division markets its products to footwear, automotive, and furniture sectors and it has the capacity to turn 35,000 tons a month of raw hide into 4.5 million square meters of semi-finished and finished leather. In 2011, JBS Leather completed the reorganization process of its operation when it absorbed Bertin. It invested more than US$60 million in the units in Cascavel (CE), Itumbiara (GO), Lins (SP) and Uberlndia (MG). This investment was required to ensure that the production lines were the most modern on the market, to improve efficiency and working conditions, and to reduce social and environmental impacts. This reorganization saved the Company US$45 million a year through better logistics and production processes. Another milestone in 2011 for JBS Leather was its international expansion. The division organized and structured production outside Brazil with a factory in China and distribution centers in Italy and the Czech Republic. This made it possible to increase the efficiency and its participation on the worlds leading leather markets, also ensuring that all the groups units were standardized. JBS Leather hold certification from the international standards bodies, ISO 9001, the Leather Working Group (environmental) and SATRA (in the footwear industry).
Always true to its culture and origins, JBS has the proven competence and talent needed for a global role
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NEW BUSINESS
Another big business division at JBS Mercosul is JBS Novos Negcios (New Business). This division runs complementary operations to the beef business and have their own strategies and goals, working as companies within the group in Brazil. This New Business division employs approximately 4,500 people in ten plants, serving eight different businesses: Ambiental Recicladora (Environmental Recycler): with its main center in the city of Lins, So Paulo state, the Company manages solid waste from JBS industrial activities, transforming and reusing materials and industrial waste into reusable inputs. JBS Biodiesel: the Companys two biodiesel plants, in Colder (MT) and Lins (SP), have the capacity to produce 240 million liters of biodiesel per year. Its raw material is fat from cattle slaughtered by the JBS Meat Division, and vegetable oils, primarily from soybeans. In 2011 JBS Biodiesel accelerated its selective collection program, in which the Company swaps used cooking oil from cities in So Paulo state outside the capital for new oil. For every five liters of used oil, the Company offers a liter of fresh oil. JBS Transportadora (Transporter): The Company transports animals between farms and JBS meat divisions slaugh-
terhouses and it is responsible for loading the meat containers sent to Brazils ports for export. The fleet is entirely tracked by satellite, which ensures that the commitments to both cattle suppliers and end customers are met. A total of 1,200 vehicles operate within the cattle farming, retailing, tanker, bagasse, refrigerated and container segments. JBS Higiene e Limpeza (Hygiene and Cleaning): focused solely on B2B, the division uses beef fat in soap production. With modern facilities using the latest technology, JBS H&L has an annual production capacity of 165,600 tons of soap, and 132,000 tons of base paste, marketed for the cosmetic industries. JBS Embalagens Metlicas (Metal Packaging): Brazils second-largest tin mill facility, with two production units, in Lins (SP) and Barretos (SP), the Company provides packaging for products manufactured by the meat division. It has a production capacity of 70 million cans a month, 40% of which are sold to JBS and the remaining 60% to others, including some of the leading manufacturers of vegetables, tomato sauces and dairy products in Brazil. With one of the most modern industrial complexes in Latin America, JBS Embalagens Metlicas is also among the leaders in the field of sustainability. Producing 100% recyclable cans, the Company adopts the best practices available, such as printing with UV inks and using machines that apply and cure the coating with the Regenerative Thermal Oxidizer (RTO) system, which eliminates the emission of solvents into the atmosphere and provides fresh air for the employees and society. NovaProm: a pioneer in the production of bovine collagen, used in the food, cosmetics and beauty treatment industries, as well as the pharmaceutical industry. NovaProm, founded in 2002, is based at the industrial park in Lins (SP). JBS Trading: marketing varied inputs, both to JBS and other companies, JBS Trading operates on domestic and international markets. In 2011 it sold 22,300 tons of vegetable oil, 23,200 tons of chemicals, and 172 tons of animal fat, among other products. JBS Envoltrios (Casings): a strong presence on the international market, the Company sells beef tripe to sausage producers. JBS Envoltrios is the worlds largest producer in this category and has three manufacturing units, in Goinia (GO), Ituiutaba (MG) and Lins (SP). It meets global standards in veterinary procedures and food safety, and is recognized as a premium producer. Its largest customers are in Russia, Eastern Europe and Asia.
Its entire fleet is tracked to ensure targets are met
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JBS USA
BOVINES
JBS got into the beef and lamb markets in the United States in 2007 through the acquisition of Swift Foods, which also had operations in Australia. One year later, the Company took over the beef division of Smithfield Beef and then became the countrys largest company in the sector, with a market share of approximately 22%. The division also manages the assets acquired from SB Holding in the USA and the Australian companies Tasman Group, Rockdale, and Tatiara Meat. JBS USA now operates 24 cattle slaughtering units and 19 feedlots in the two countries. Its slaughter capacity is 34,100 head of cattle and 18,300 head of lambs and sheep a day. The integration process of the assets related to bovines in the United States and Australia moved forward in 2011, the year that net revenue reached US$16.5 billion, with an EBITDA margin of 4.5%. Sales growth for the year was a very impressive 25.6% on 2010. This strong result was due mainly to the expansion of exports from the US operations. Hitherto unexplored markets by the division, such as Japan and Southeast Asian countries, were made a priority, while countries that already consumed meat produced in North America - such as Mexico and Canad and South Korea performed well. In 2012, the Company will continue to push for gains in productivity and efficiency at its plants.
JBS works to ensure the supply of ethically and professionally produced meat
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About 20% of revenue for the division came from exports, following a growth trend that is expected to take hold in the coming years. The Australian unit exports about 80% of its production, mainly to Asian and European countries. JBS is the market leader in Australia. The domestic market in the United States continued to experience strong demand, despite the economic crisis in the country. About a third of the cattle slaughtered by the division came from its own feedlots, which enable JBS to produce meat with unique characteristics, tailored to the demand from certain groups of consumers.
JBS is expanding higher added value product lines, processing meat and using its various brands
CHICKEN
JBS got into the chicken market in 2009, through the acquisition of US Company Pilgrims Pride, the worlds second- largest company in the sector. The Company has a production capacity of 7.2 million birds per day in its 31 slaughter units in the United States. Three plants in Mexico, one in Puerto Rico, and 27 distribution centers in the three countries complete its structure. The division, headquartered in Greeley, Colorado, employs over 45,000 people.
In 2011, net revenue reached US$7.5 billion, up by 9.5% on the previous year. Unusual market conditions, however, led to the EBITDA margin closing at -2%. Since late 2010, the sector has had to live with over-production, which has strongly impacted prices. This has been accentuated by the decrease in domestic consumption over the same period, and has caused major losses for every company in the sector in the USA. The crisis led JBS to speed up and further the changes that had been made in Pilgrims Pride since its acquisition. More than US$200 million in costs were identified and removed from operation. The administrative structure was streamlined with the elimination of hierarchical levels and downsizing. The division thus began 2012 ready to make positive margins. Besides the internal adjustments, the market as a whole got through overproduction and resumed operations under normal conditions at the beginning of the year. The difficulties on the US market also led the JBS division to look for new markets in Asia, the Middle East and Africa. Exports grew by 50% in 2011. About 20% of revenue came from exports, and JBS believes that there are still many opportunities to be explored in this area.
HOGS
The segment was created in 2007, through the acquisition of Swift Foods, and it has three slaughterhouses and one industrial plant in the United States. Production capacity is 50,100 head a day. In 2011 net revenue reached US$3.5 billion, with an EBITDA margin of 9.8%. Sales rose by a significant 17.5% in the year. JBS USA Hogs ranks in third place in the US sector, with a 14% market share. The constant search for efficiency in industrial operations and a continued effort to develop sales channels were mainly responsible for the successful outcome in the year. The segment also benefited from the opening of new export markets for US pork, including China, Japan and South Korea. In the past two years export volume has grown from 15% to 20% of total production at JBS USA Hogs.
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FINANCIAL RESULTS
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FINANCIAL RESULTS
n 2011, JBS focused mainly on the integration of the acquisitions it made in recent years. Upon completing the period of high investment in plants in order to obtain efficiency and integration, the Company finished its phase of heavy outlay. JBS earned, in 2011, net revenue of US$61.8 billion, a significant organic growth of 12.9% comparing to 2010. Reversing 2010s negative cash position, in 2011 JBS generated an operating cash flow of R$606.5 million. All its business units performed better in 2011 than the previous year, except the chicken division in the United States, operated by Pilgrims Pride (PPC). Oversupply on the domestic market caused a sharp fall in prices and, consequently, losses for the entire industry. PPC ended the year with revenues of US$7.5 billion (up by 9.5% on 2010) and negative EBITDA of US$149.8 million.
Net revenue and Ebitda

The Companys EBITDA in 2011 was R$3.2 billion, a decrease of 16.3% comparing to 2010, once more due to the negative results of Pilgrims Pride. The consolidated EBITDA margin was 5.1%. Net revenue for beef at JBS USA, including Australia, totaled US$16.5 billion in the year, up by 25.6% comparing to 2010. EBITDA was US$739.1 million, up 11.4% on the same period the year before.
JBS RESULTS (CONSOLIDATED) R$ (million) Net revenue Gross income Gross Margin Net financial results Results Before Tax Net profit-/loss EBITDA EBITDA margin
(1)
Net revenue in pork at JBS USA was US$3.5 billion, up by 17.5% on 2010. EBITDA was US$338.2 million, 22.2% up on the previous year. The operation of JBS Mercosul obtained R$ 14.9 billion in net revenue, 11.9% over 2010. EBITDA was up by 23.9% on the same period, to R$1.6 billion. The loss for the period was R$75.7 million, due to the negative results in the chicken segment in the USA (PPC), at US$495.7 million (US GAAP) in 2011. Eliminating this result, JBS would have made a profit of R$482.6 million. Net revenue was up significantly in every business unit in 2011. The significant organic growth of the Company in 2011 was due to the effective increase in sales at every unit. In particular, with an increase of 25.6% in sales, the beef division in the United States was the one that contributed most significantly. Net revenue at the chicken and pork units in the United States was up by 9.5% and 17.5%, respectively. At JBS Mercosul, sales were up by 11.9%, even with the situation in Argentina, which forced the Company to concentrate on just two units in that country in 2011.
In 2011 JBS filed record net revenue of R$ 61.8 billion, up by 12.9% on 2010
Net revenue and Ebitda by unit
2011 61,796.8 6,696.6 10.8% (2,010.7) (230.1) (75.7) 3,151.0 5.1%
2010 54,712.8 6,718.0 12.3% (2,223.0) 58.6 (292.8) 3,766.1 6.9%
% 12.9% -0.3% -9.5% -16.3%
Net revenue (billion local currency) JBS USA Bovinos US$ JBS USA Sunos US$ JBS USA Frangos US$ JBS Mercosul R$ Ebitda (million local currency) JBS USA Bovinos US$ JBS USA Sunos JBS USA Frangos US$ JBS Mercosul R$
2011 16.5 3.5 7.5 14.9
2010 13.1 2.9 6.9 13.3
% 25.6 17.5 9.5 11.9
739.1 338.2 1,600
663.7 11.4 276.8 22.2 1,289 23.9
Result attributed to controlling shareholder participation.
(149.8) 481.9 --
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FINANCIAL RESULTS
indebtedness
The Company ended the year with R$5.3 billion held in cash, equivalent to 100% of its short-term debt. The leverage has been stable at 3.0x EBITDA, excluding the chicken business in the USA. JBS considers this appropriate for the moment, but expects to reduce it on the next few years.
Value added remained stable comparing to 2010, at R$13 billion. The major portion of that capital (52.4%) was distributed among the Companys employees, which demonstrates how important the human capital is to the Company. The financial sector (third party capital) accounted for 37% of value added, while the different levels of government accounted for 13%, showing how important social efforts are to JBS.
Capital Expenditure
Capital expenditure by JBS on goods, plant and equipment was R$1.2 billion, 4.2% down on 2010. The main investments were concentrated on improving productivity and increasing storage and distribution capacity in all the regions where the Company operates.
Risk Management
JBS uses an integrated risk management model, taking into account market, credit and liquidity risks. These risks arise during the operation of the various areas of the Company and are constantly monitored. Given its nature as a processor of commodities and exporter, price fluctuation risk is significant at JBS and gets special attention. The global nature of JBS requires international analysis of variables that could affect the prices of its inputs, such as the peculiarities of supply and demand, changes in the weather, sanitary issues, restrictions on exports and the economic environment. Likewise, the exchange rates that impact the value of its exports are observed closely and influence its commercial and financial decisions, seeking balance and greater efficiency in its global operations. The risk management team is responsible for this monitoring, acting in a way to protect the financial flow at the Company.
Value Added
In 2011 the Company achieved R$13 billion in added value, which was distributed as follows:
Value Added (in R$ billion) People Fees, taxes and contributions Third-party equity remuneration Equity remuneration Total 6.8 1.7 4.8 -0.3 12.98
DEBT JBS (Excluding Pilgrims Pride) R$ (million) Gross debt (+) Short term (+) Long term (-) Available Net debt Net debt / EBITDA
(1)
Shares
12/31/2011 16,201.8 5,310.1 10,891.7 5,195.7 11,006.1 3.0x 9/30/2011 16,501.1 5,315.7 11,185.3 5,387.8 11,113.3 3.0x Var. % -1.8% -0.1% -2.6% -3.6% -1.0%
EBITDA in the last 12 months. Dollar rate on the last day in the period.
DEBT JBS (including Pilgrims Pride) R$ (million) Gross debt (+) Short term (+) Long term (-) Available Net debt Net debt /EBITDA (1) 31/12/11 18,872.2 5,339.4 13,532.8 5,288.2 13,584.0 4.0x 30/9/11 19,235.4 5,344.7 13,890.7 5,581.0 13,654.4 4.0x Var. % -1.9% -0.1% -2.6% -5.2% -0.5%
JBS went public in 2007 and since then its shares have been traded on the BM&FBovespa market (under the code JBSS3) and the Over The Counter market (OTCQX) in the United States (under the code JBSAY). In 2011 US$6.6 billion worth of shares in the Company were traded, or 19.1% of the shares in the sector and 2.2% of the shares on the Bovespa market in the year. JBS shares are traded on the Bovespa Index (Ibovespa), the main on the country, Brazil Index 50 (IBrX-50), Brazil Index (IbrX), Carbon Efficient Index (ICO2), Index of Differentiated Corporate Governance (IGC), The Differentiated Tag Along Stock Market (ITAG) and the Industrial Sector Index (INDX), among others.
EBITDA in the last 12 months. Dollar rate on the last day in the period.
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In 2011 its shares began the year trading at R$7.14 and fell by 14.85%. In the first quarter of 2012, the Companys shares gained 33.45%, ending the quarter priced at $ 7.50 per share.
The Company is currently controlled by FB Participaes, with 47% of the shares. BNDESPar has 31% and the market trades 22% of JBS shares.
Shareholder structure at JBS on December 31, 2011

Treasury 3%
Return to Shareholders
JBS mandatory dividend is at least 25% of adjusted net profit, in the form of Brazils corporations act and the Companys bylaws, determined in the non-consolidated financial statements. The annual declaration of dividends, including dividends in excess of the mandatory minimum, requires approval by the General Ordinary Meeting, by a majority vote of the shareholders of JBS and depends on several factors. These include the operating results, its financial condition, cash requirements and the future prospects for the Company, and other factors that the board of directors and shareholders in JBS deem relevant.
Market 21%
FB Participaes S.A. 46%
BNDESPAR 30%
Dividend payment record

On January 31, 2012, the board approved the cancellation of the shares held by the treasury and the shareholder base looked like this: JBS distributed to its shareholders dividends and interest on capital of R$0.8 million for 2002, R$21.8 million for 2004, R$31.7 million for 2005, R$11.2 million for 2006, R$17.5 million for 2007, R$12.3 million for 2008, and R$61.5 million for 2009. There was no payment of dividends for the years ending in 2010 and 2011 due to accounting losses in the period.
Shareholder structure at JBS on February 1, 2012

Market 22%
FB Participaes S.A. 47%
BNDESPAR 31%
JBS uses an integrated management model, covering market, credit, and liquidity risks
STOCK VARIATIONS THROUGHOUT 2011 and the 1st Quarter of 2012

9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Jan. 2011 Feb. 2011 Mar. 2011 Apr. 2011 May 2011 June 2011 July 2011 Aug. 2011 Sept. 2011 Oct. 2011 Nov. 2011 Dec. 2011 Jan. 2012 Fev. 2012 Mar. 2012
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FINANCIAL RESULTS
JBS S.A. Balance sheets

JBS S.A. Balance sheets (In thousands of Reais) Company 12.31.2011 CURRENT ASSETS Cash and cash equivalents Trade accounts receivable, net Inventories Biological assets Recoverable taxes Prepaid expenses Other investment and discontinued operations Other current assets TOTAL CURRENT ASSETS NON-CURRENT Realizable in the Long Term Credits with related parties Judicial deposits and others Recoverable taxes Total Realizable in the Long Term Investments in subsidiaries Property, plant and equipment, net Intangible assets, net TOTAL NON-CURRENT TOTAL ASSETS 88,505 104,207 562,027 754,739 7,561,574 7,803,582 9,531,506 24,896,662 25,651,401 34,286,604 88,218 553,770 641,988 10,443,000 7,598,963 9,531,739 27,573,702 28,215,690 35,765,762 552,197 389,947 626,126 1,568,270 15,378,714 12,532,619 27,911,333 29,479,603 47,410,884 332,679 448,875 616,297 1,397,851 14,624,201 12,425,499 27,049,700 28,447,551 43,835,619 3,612,867 1,883,093 1,544,261 1,330,609 8,148 256,225 8,635,203 3,000,649 1,672,729 1,109,472 1,088,310 13,844 504,002 161,066 7,550,072 5,288,194 4,679,846 5,405,705 209,543 1,690,311 131,033 526,649 17,931,281 4,074,574 4,036,104 4,476,934 417,028 1,419,784 107,825 504,002 351,817 15,388,068 12.31.10 Consolidated 12.31.2011 12.31.10
All its business units performed better in 2011 than the year before, except the chicken division in the United States.
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JBS S.A. Balance sheets (In thousands of Reais) Company 12.31.11 LIABILITIES AND SHAREHOLDERS EQUITY CURRENT LIABILITIES Trade accounts payable Loans and financings Income taxes Payroll, social charges and tax obligation Payables related to facilities acquisitions Other current liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Loans and financings Convertible debentures Payroll, social charges and tax obligation Payables related to facilities acquisitions Deferred income taxes Provision for lawsuits risk Debts with related parties Other non-current liabilities TOTAL NON-CURRENT LIABILITIES SHAREHOLDERS EQUITY Capital stock Capital transaction Capital reserve Revaluation reserve Profit reserves Treasury shares Accumulated translation Attributable to controlling interest Attributable to non-controlling interest TOTAL SHAREHOLDERS EQUITY TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 21,506,247 (10,212) 985,944 101,556 1,440,799 (610,550) (2,877,033) 20,663,822 20,663,822 34,286,604 18,046,067 (9,949) 985,944 106,814 1,511,246 (485,169) (1,719) (2,558,863) 17,594,371 17,594,371 35,765,762 21,506,247 (10,212) 985,944 101,556 1,440,799 (610,550) 127,071 (2,877,033) 20,663,822 935,366 21,599,188 47,410,884 18,046,067 (9,949) 985,944 106,814 1,511,246 (485,169) (1,719) (2,558,863) 17,594,371 1,100,478 18,694,849 43,835,619 7,095,193 1,283 2,048 289,798 140,975 27,554 7,556,851 6,679,915 3,462,212 5,144 390,774 136,002 1,532,002 124,939 12,330,988 13,532,761 1,283 683,812 2,048 678,372 251,560 266,161 15,415,997 10,217,156 3,462,212 317,633 5,144 1,003,050 321,660 397,430 15,724,285 666,375 4,574,702 347,863 10,589 466,402 6,065,931 566,982 4,342,593 375,600 45,746 509,482 5,840,403 3,323,886 5,339,433 211,528 1,167,163 10,589 343,100 10,395,699 2,962,395 4,966,198 14,251 1,095,687 45,746 332,208 9,416,485 12.31.10 Consolidated 12.31.11 12.31.10
Valuation adjustments to shareholders equity in subsidiaries 127,071
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FINANCIAL RESULTS
Statements of income for the years ended December 31, 2011 and 2010(In thousands of Reais) Company 12.31.2011 NET SALE REVENUE Cost of goods sold GROSS INCOME OPERATING INCOME (EXPENSE) General and administrative expenses Selling expenses Financial expense, net Equity in earnings of subsidiaries Other income (expenses), net INCOME (LOSS) BEFORE TAXES Current income taxes Deferred income taxes LOSS OF CONTINUED OPERATIONS Net income of discontinued operations LOSS OF THE YEAR ATTRIBUTABLE TO: Controlling interest Non-controlling interest Loss basic per thousand shares - in reais Loss diluted per thousand shares - in reais (27.77) (27.77) (117.46) 81.71 (75,705) (247,180) (322,885) (27.77) (27.77) (292,799) 38,187 (254,612) (117.46) 81.71 (595,453) (1,274,996) (1,468,238) 113,264 28,031 (3,197,392) (160,407) 2,710 81,992 84,702 (75,705) (75,705) (503,405) (995,067) (1,927,045) 815,611 (85,645) (2,695,551) (263,886) 2,853 (44,012) (41,159) (305,045) 12,246 (292,799) (1,739,198) (3,144,069) (2,010,728) (32,667) (6,926,662) (230,108) (520,711) 427,934 (92,777) (322,885) (322,885) (1,641,024) (2,627,201) (2,223,021) (168,224) (6,659,470) 58,570 (358,774) 33,346 (325,428) (266,858) 12,246 (254,612) 13,060,853 (10,023,868) 3,036,985 12.31.2010 11,770,293 (9,338,628) 2,431,665 Consolidated 12.31.2011 61,796,761 (55,100,207) 6,696,554 12.31.2010 54,712,832 (47,994,792) 6,718,040
One of the main focal points in 2011 was a the integration of the acquisitions made in recent years
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Statement of comprehensive income for the years ended December 31, 2011 and 2010 (In thousands of Reais)
Company 12.31.2011 Cash flow from operating activities Loss of the year attributable to controlling interest Adjustments to reconcile loss to cash provided on operating activities Depreciation and amortization Allowance for doubtful accounts Equity in earnings of subsidiaries Net income on discontinued operations Gain on assets sales Deferred income taxes Current and non-current financial charges Provision for lawsuits risk Impairment Decrease (increase) in operating assets Trade accounts receivable Inventories Recoverable taxes Other current and non-current assets Related party receivable Biological assets Increase (decrease) operating liabilities Trade accounts payable Other current and non-current liabilities Related party payable Non-controlling interest Valuation adjustments to shareholders equity in subsidiaries Net cash provided by (used in) operating activities Cash flow from investing activities Additions to property, plant and equipment and intangible assets Increase in investments in subsidiaries Decrease in investments in subsidiaries Proceeds received from termination of Inalca JBS agreement Net effect of working capital of acquired (merged) company Net cash provided by (used in) investing activities Cash flow from financing activities Proceeds from loans and financings Payments of loans and financings Debentures payment Capital increase Transaction costs for issuing of titles and securities Capital transactions Shares acquisition of own emission Net cash provided by (used in) financing activities Effect of exchange variation on cash and cash equivalents Variance in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 6,181,618 (7,341,304) (749) (263) (125,381) (1,286,079) 612,218 3,000,649 3,612,867 5,693,809 (4,309,777) 1,600,000 (55,252) (213,728) 2,715,052 (1,096,378) 4,097,027 3,000,649 17,532,838 (749) (263) (125,381) 1,181,467 130,003 1,213,620 4,074,574 5,288,194 14,191,471 1,600,000 (55,252) (213,728) 2,059,844 11,122 (963,810) 5,038,384 4,074,574 (16,224,978) (13,462,647) (569,741) (963,638) 2,491,708 504,002 718 1,463,049 (533,831) (3,038,408) (3,572,239) (1,173,780) 504,002 (34,584) (704,362) (1,225,581) (338,119) (1,563,700) 435,248 77,789 (100,210) (60,870) (311,617) 1,598,237 (247,180) (239,191) (28,742) (75,275) 38,187 (351,964) 606,512 (943,717) (1,471,076) 344,962 (67,419) (149,369) (433,292) (195,802) (104,145) (360,521) (531,026) (350,936) (239,357) 31,791 (278,778) (627,902) (295,794) (43,156) (171,501) 247,255 (957,276) (1,251,438) (275,947) 225,296 (2,101) (189,908) 436,501 10,021 (113,264) (24,998) (81,992) 1,544,673 5,562 1,700,798 286,115 7,180 (815,611) (12,246) 6,961 44,012 448,829 (73,368) 25,514 (375,413) 1,291,411 15,577 (8,132) (427,934) 1,611,274 9,865 63,193 2,479,549 1,215,454 16,132 (12,246) 11,005 (33,346) 642,763 (22,509) 83,831 1,608,285 (75,705) (292,799) (75,705) (292,799) 12.31.2010 Consolidated 12.31.2011 12.31.2010
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CORPORATE GOVERNANCE
25
BS bases its conduct on the highest principles of ethics and transparency, and strictly follows the corporate governance model provided by the BM&Fs Novo Mercado, on which been traded since 2007. Because it operates on a global scale and in highly dynamic markets which require fast decision making, JBS seeks to keep its governance structure as small as possible and always very close to the situation experienced by the executive body. As a result, the Company believes it can meet the demands of its shareholders, and the different levels of government and society, without running the risk of jeopardizing the progress of the business. JBS main strategic decisions are made at the General Shareholders Meeting, where each share is equal to one vote - once again following the model recommended by the Novo Mercado. The corporate governance structure is headed up by the Board of Directors, comprising eleven members who are responsible for determining long-term strategies and over-
JBS bases its conduct and governance on the highest principles of ethics and transparency
seeing the Companys performance. The ordinary meetings are held quarterly, but the board members are constantly monitoring the business and are often called upon to make decisions. An information technology system integrating the Companys data will be made available to members in 2012, which will make them more familiar with the managers.
Board of Directors
Currently the Board of Directors at JBS is made up of eleven members - a chairman, seven members without any specific denomination, and three independent members. The Companys Board of Directors is responsible for, among other things, determining policies and guidelines. The Board also oversees the directors and monitors the implementation of policies and guidelines established periodically by the Board. The Board of Directors at JBS is made up of the following members:
Modernity and innovation are part of JBS' decision-making process
Members of the Board Joesley Mendona Batista Wesley Mendona Batista Jos Batista Sobrinho Jos Batista Jr. Marcus Vinicius Pratini de Moraes Natalino Bertin Peter Dvorsak Valere Batista Mendona Ramos Vanessa Mendona Batista Guilherme Radolfo Laager Carlos Alberto Caser
independent member.
Position President Vice President Member Member Member Member Member Member Member Member Member
Date elected 04/29/2011 04/29/2011 04/29/2011 04/29/2011 04/29/2011 04/29/2011 04/29/2011 04/29/2011 04/29/2011 04/29/2011 05/03/2012
Mandate ends Aug. of 2013 Aug. of 2013 Aug. of 2013 Aug. of 2013 Aug. of 2013 Aug. of 2013 Aug. of 2013 Aug. of 2013 Aug. of 2013 Aug. of 2013 Aug. of 2013
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The Board has the support of the following internal bodies: Sustainability Committee: it assists in the formulation of best social and environmental practices applied to the business. It may have three to five professionals appointed by the Board.
Corporate Strategy Committee: develops and proposes policies relating to the Companys business strategy. Comprises three to five members appointed by the Board. Audit Committee: advises on the evaluation of standards, business rules, internal systems and the disclosure of financial results. Also comprised of three to five members appointed by the Board.
The corporate governance structure is led by the Board of Directors
Finance Committee: analyzes the economic situation and identifies possible impacts on the Companys financial position, and monitors the Companys financial policy. Comprised of three to five people.
People Management Committee: analyzes and validates the Companys human resources policies. This Committee is comprised of three to five members, who can be members of the Board or Company executives.
Board of Executive Officers

JBS board of executive officers is its managing executive body. The members of the board of executive officers are its legal representatives and are responsible for the internal organization, decision-making, day-to-day operations and the implementation of the general policies and guidelines established from time to time by the board of directors. The members of the Companys board of executive officers are elected by the board of directors and are eligible for reelection. JBS board meets whenever called by the President or by the majority of its members. The direct management of the Company is the responsibility of the Board of Executive Officers, comprised of the following people:
All the business units performed better in 2011
Directors Wesley Mendona Batista Francisco de Assis e Silva Jeremiah OCallaghan Eliseo Santiago Perez Fernandez
Position Chief Executive Officer Executive Director of Institutional Relations Director of Investor Relations Executive Director of Administration and Control
Date elected 1/26/2011 5/13/2010 5/13/2010 11/11/2010
Mandate ends 5/13/2013 5/13/2013 5/13/2013 5/13/2013
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Audit Committee
The primary responsibilities of the Audit Committee are to oversee the managers, to report on proposals made by administrative bodies to be submitted to the general meeting for deliberation, and to review the financial accounts. Following the Ordinary and Extraordinary General Meeting held on April 27, 2012, JBS Audit Committee has been made up of the following members:
JBS has a lean and quick governance structure that meets the demands of all its stakeholders
Member name Divino Aparecido dos Santos Florisvaldo Caetano de Oliveira John Shojiro Suzuki Demetrius Nichele Macei Alexandre Aparecido de Barros
Position President of the Audit Committee Member Member Member Member
Date elected 04/27/2012 04/27/2012 04/27/2012 04/27/2012 04/27/2012
Mandate 1 year 1 year 1 year 1 year 1 year
The elected members of the Audit Committee will carry out their duties until the Ordinary General Meeting in 2013, when they may be re-elected.
The company is managed in accordance with ethical practices, shared by the management and all the employees
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AWARDS AND RECOGNITION
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AWARDS AND RECOGNITION

CATEGORY New Business Leader 10 Biggest Employers 20 Biggest Companies in Industry 20 Biggest Companies in Net Assets 20 fastest growing companies in gross revenue 16th Ponto Extra Award (APAS) Meat Category Best Meat Supplier Agribusiness Leader Ranking of Biggest Feedlots in Brazil Produz Brasil Award Environmental responsibility category Most-used brand in Brazilian cattle farming Slaughterhouse Category Ranking of Brazilian Trans-national Companies Supplier of the Year Award Executive of the Year Award Sustainable Action Gold Seal Award Exporter of the Year Award ORGANIZATION Frum de Lderes Valor Grandes Grupos Valor Grandes Grupos Valor Grandes Grupos Valor Grandes Grupos Ponto Extra (APAS) Supermercado Moderno Lderes do Brasil BeefPoint Revista Produz Touro de Ouro Fundao Dom Cabral Supermercado Nordesto Valor Econmico APAS Associao Paulista de Supermercados Johnson & Johnson Comisso de Comrcio Exterior Cear RECOGNIITON Leadership Forum 2011 Trophy Wesley Batista 1st Place 3rd Place 7th Place 5th Place Ponto Extra Apas Trophy Top Five Award Wesley Batista 1st Place 2nd Place Touro de Ouro Award 1st Place Most Trans-national Brazilian Company Swift Butchers Meat Category Agriculture Executive Sustainable Action Award SEM Best Board J&J Quality Winning New Markets
JBS is now reaping the rewards of the immense task of integrating its operations
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SUSTAINABILITY AT JBS
31
rom the beginning when JBS processed only five head of cattle per day - to its current position as the largest animal protein company in the world, sustainability has been a fundamental part of the JBS culture. While the term is relatively new, sustainability is part of the three pillars the company is built upon: social responsibility, economic viability, and environmental sustainability. At JBS, this is a vision guided by the companys culture and its mission to be the best at what it do while securing a brighter future for its employees, shareholders, suppliers and the next generation. JBS recognizes the scale and scope of its global business comes with the obligation to contribute to the well-being of its employees and the communities in which the Company operates. By successfully managing its operations, JBS satisfies its shareholders, customers and suppliers, and responsibly marshals its natural resources and protects the environment. This is why it works hard on efficiency, going beyond regulatory and legislative requirements, to promote improvements throughout the value chain, to contribute to the social fabric, and to invest in the future.
JBS is now reaping the rewards of the immense task of integrating its operations
SUSTAINABLE BUSINESS
For JBS, sustainability is a critical element in the success of its operations. Proof of this lies in its social and environmental actions and commitments that exceed legislative and regulatory guidelines. These are actions that demonstrate JBS willingness to maintain the same entrepreneurial spirit under which it was founded. JBS strives to incorporate environmental soundness and social justice in its operations, and it has adopted a posture of transparency in openly communicating its efforts to improve the management of its operations and to promote the wellbeing of its workforce and the community. Added to this is the constant challenge of including new social and environmental targets in its operations. The company recognizes that its actions alone are not sufficient to address the challenges of today, and thus it collaborates to guide suppliers and other supply chain partners. In addition, JBS also has several initiatives to address social progress, such as the Germinare Institute, which provides free primary and secondary education to talented students at a learning facility located on the grounds of its corporate campus in So Paulo. Finally, JBS believes in the future. Through a three-year environmental investment plan that will drive improved environmental
Sustainability Vision
Sustainability is a fundamental part of the JBS culture and is based on the triple bottom line of social responsibility, economic viability, and environmental sustainability. This commitment is demonstrated by the manner in JBS does business, by its internal guidelines established to foster progress, and the way in which it enters into partnerships.
Timeline Sustainability
2000
2006
2007
Establishment of the
Inclusion of a clause in the Boi a
Participation as Member of the
Environmental Department
Termo (Long-term Cattle) contract regarding the mandatory nature of complying with all Labor and Environmental regulations.
Sustainable Livestock Farming Workshop (GTPS)
2004
Introduction of the JBS
2008
Ethical Conduct Manual
Development of the 1st Project to
Creation of the Business Strategy
Reduce Greenhouse Gases
and Sustainability Committee and Sustainability Committee
2005
Joined the UMs International Pact
Signed the The Animal Husbandry Pact
for the Eradication of Child Labor, Analogous to Forced Labor
of the So Paulo-Amaznia Sustainable Connections Initiative - Ethos
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performance across its operations which includes setting operational targets in water consumption, waste water management and treatment, emissions reductions, and waste disposal.
chain through leadership, science and multi-stakeholder engagement and collaboration.
JBS SUSTAINABILITY GUIDELINES

JBS sustainability vision is expressed through its adherence to the sustainability guidelines established by JBS executives, including members of the Board and Operational Directors, and results in a uniform management model that provides clarity for its daily activities and prioritizes a balance between the three pillars of sustainability. The JBS guidelines are consistent with the parameters set forth by some of the major national and international references in Corporate Sustainability, such as: the Dow Jones Sustainability Index, the Business Sustainability Index (ISE), the GRI (Global Reporting Initiative) and the United Nations Global Pact.
SOCIAL RESPONSIBILITY
Being a sustainable company is an essential part of JBS mission. The company acknowledges that, besides the economic impact by global generation of more than 135,000 jobs, it also play a positive role in the communities where JBS is present and thereby contribute to social and economic development farther beyond the direct and indirect impacts of its operations. JBS believes a strong relationship with local communities is crucial for the success of its business. Each of its facilities seeks to play an active and positive manner within the communities in which it operates. JBS provides financial support for several charities and supports local events near its facilities, such as cancer prevention campaigns, food drives, and educational projects. In addition, in 2009, it founded the JBS Institute, which recently changed its name to the Germinare Institute, focused on social initiatives.
SUSTAINABLE PARTNERSHIPS
JBS commitment to sustainability is evidenced by the manner in which it relates to partners who seek a positive working agenda. JBS has established dialogue with Non-Governmental Organizations (NGOs), such as the World Wildlife Fund (WWF), Solidaridad, Aliana da Terra, The Nature Conservancy (TNC), and the National Wildlife Federation (NWF), and is a member of GTPS the Brazilian Roundtable on Sustainable Livestock Farming (BRSLF), where it serves on the Steering Committee. In addition, JBS is a founding member of and serves on the Executive Committee and Executive Board of the Global Roundtable for Sustainable Beef (GRSB), a multi-stakeholder forum that includes companies, NGOs, and producer and retailer organizations, whose mission is to advance continuous improvement in sustainability of the global beef value
Germinare School
One of the main initiatives run by the Germinare Institute is the Germinare School. Established in February 2010, the school, built next to JBS headquarters in So Paulo, offers free primary and secondary education to qualified students with the goal of better preparing citizens to meet lifes challenges through rigorous academic training and broad cultural exposure. Currently, 360 students are enrolled, receiving free school supplies, food and uniforms. This investment in future generations will empower these youth with moral and ethical values that will allow them to positively contribute to society. The Germinare School represents what JBS believes to be the main instrument for societal transformation: education.
Timeline Sustainability
2009
2010
Greenhouse Gas Emission Participation on the Carbon Participation at COP-15 Founding of the JBS Institute Public commitment to end logging
Beginning of the Amazon
Sustainability team to support suppliers
Inventory at units of JBS Brasil
Biome Satellite Image Monitoring ProgramPartnership with the Brazilian Agricultural Research Corporation (Embrapa) to promote the implementation of the Program for Best Agricultural Practices (BPA) with the farmers

Social and environmental Participation in structuring the Implementation of Traceability
diagnosis of all the Companys units
Disclosure Project (CDP)
Carbon Efficient Index - BM&F Bovespa
(Copenhagen Denmark)

System on the JBS institutional website demonstrating its transparency in relation to the end consumers and ensuring the legal origin of meat
Opening of the Germinare School Development and launch of JBS Structuring of the Technicians in
Sustainability Guidelines
JBS Brasil Greenhouse
Gas Emissions Inventory
33
JBS has consolidated its Sustainability Guidelines in a public document
Participation in the 2010 Participation in COP-16
Sustainability and Operational Environment areas for better synergy in finishing projects in the areas
Procedure, focused on criteria in the Legal Origin Guarantee
Carbon Disclosure Project (CDP)
Meetings with federal bodies
(Cancun - Mexico)
Integration of the Quality Farms
to set up programs that provide data to comply with social and environmental commitments
Program with Sustainable Livestock
2011
Farming, supporting our suppliers
Structuring and implementation
Inventory of Greenhouse Creation of ICO2 BM&FBOVESPA Participation in Carbon Auditing of Cattle Purchasing
Preparation of the 1st JBS
of the Environment Investment Plan for the next three years
Gas Emissions at JBS Brasil

Sustainability Report GRI Guidelines - With reference to 2010
Creation of the portfolio Carbon
Efficient Index (ICO2) BM&FBOVESPA Integration of the Strategic
Disclosure Project (CDP) 2011
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SUSTAINABLE LIVESTOCK TRAINING FOR SUPPLIERS

JBS supports the sustainable growth of the Brazilian livestock sector through its Sustainable Livestock Program, which raises awareness and trains suppliers on socio-environmental themes, food safety and animal welfare. To facilitate this training, JBS signed a partnership with the Brazilian Agricultural Research Corporation (EMBRAPA). The Sustainable Livestock Farming Program offers free technical support and assistance to JBS suppliers through a specialized technical team.
JBS social and environmental commitments go beyond compliance with current legislation
JBS EMPLOYEES
JBS enjoys a diverse, global workforce and bases its employment decisions on meritocracy, respecting the diversity among its employees and making no distinction between age, race, religion or sexual orientation. The company offers its employees an initiation program which takes in the companys values, mission and principles. The training program includes areas such as Corporate Governance, Human Resources, Quality Control, Sustainability, the Environment and Ethics.
ECONOMIC VIABILITY
As a public company, JBS recognizes its responsibility to produce positive financial results for its investors, shareholders and employees. Its opportunities to drive improvement in the lives of its employees and to make investments that enhance its stewardship of the environment are only possible due to the Companys successful financial performance. In 2011 JBS filed growth in consolidated net revenue of 12.9% (compared with 2010). The company is today focused on creating opportunities in export markets, as evidenced by its sales distribution. In 2011 approximately 75% of global sales were generated in domestic markets (where its facilities are located), and 25% of sales came from exports. JBS generated R$ 606.5 million in cash flow from operating activities in 2011 (before investments). In the same year, the Company invested more than R$ 1 billion in property, plant and equipment. This reinvestment ensures the continuity of operations and the confidence of consumers, suppliers and clients.
ENVIRONMENTAL RESPONSIBILITY
With 286 facilities and offices on five continents, JBS embraces its obligation to responsibly manage natural resources, mitigate its environmental footprint, and ethically source its raw materials. To accomplish these goals, JBS has adopted an environmental management system to improve its performance in critical areas, such as water and energy consumption, waste reduction, and mitigation of greenhouse gas emissions. In addition, the company has developed a livestock procurement system to aid in the fight against illegal deforestation in the Amazon Biome.
ADDED ECONOMIC VALUE

In 2011, JBS posted R$ 13 billion in added economic value, distributed as shown below:
ENVIRONMENTAL MANAGEMENT SYSTEM

In January 2011, JBS began the implementation of the Environmental Management System (EMS, based on the ISO 14001:2004 standard) in all its beef operations. Each meat plant will have completed the implementation by December 2012 to ensure the minimization of environmental impacts related to operations, and to improve environmental performance by focusing on three distinct areas: Pollution prevention Compliance with all applicable legal requirements The establishment of goals for continuous improvement
Added Economic Value (R$ billion) Labor Taxes and contributions Capital Remuneration from third parties Capital remuneration from the company Total 6.8 1.7 4.8 0.3 12.98
ENVIRONMENTAL INVESTMENTS
In addition to the Environmental Management System, JBS has adopted an Environmental Investment Plan to provide financial support to its operations for specific projects focused on: Reduced water consumption Treatment of waste water Management and control of GHG emissions Proper storage and disposal of solid waste
The main share of this capital (52.4%) was distributed to the Companys employees, which demonstrates the importance of the workforce to JBS. Various levels of government collected 13%, which represents the companys social relevance and its contribution to local economies and the tax base.
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ENVIRONMENTAL INVESTMENTS 2011 JBS MEAT DIVISION By type of investment

Solid waste 8,59% Atmospheric emissions 12,49% Others* 4,4%
Water captured at source JBS MERCOSUL

Public supply Rain 2,09% 0,98%
Underground 28,53%
Liquid effluent 74,52%

* Reforestation, erosion recovery, water consumption and effluent discharge monitoring equipment, infrastructure improvements for employees, and other projects.
Surface 68,40%
WASTEWATER TREATMENT
Each JBS Brasil facility has a wastewater treatment system that properly handles such discharges. These facilities have a combined total daily capacity to handle 125,400.91 cubic meters of wastewater. JBS has made significant investments in modernizing its treatment facilities to ensure a high level of efficiency in the removal of waste, byproducts and pollutants.
Examples of projects implemented and successful case studies:

1. Replacement of the sprinkler system in the stalls, to keep the temperature comfortable for the animals before slaughter, and to improve efficiency in animal welfare. The system reduced the consumption from 700 L / h to 40 L / h (per piece). 2. Installation of sprinkler nozzles the industrial sinks, reducing water consumption by 69%. 3. Withdrawal of dry ruminal matter. 4. Automation of industrial equipment. 5. Reuse of water in external operations for secondary purposes. 6. Raising awareness among employees about the efficient use of water in the production process.
OPTIMIZATION OF WATER USE

JBS has adopted goals for water consumption in all its units. As part of the policy to address the efficient use of natural resources, several projects were implemented to optimize water use. As a result, JBS was able to reduce water consumption by approximately 6% in its slaughterhouses.
LIQUID EFFLUENT JBS MERCOSUL By type of disposal 4 Water body Fertirrigation Reuse Public network Brazil 82.59% 11.01% 3.32% 3.08%
Paraguay 100% -
Uruguay 39.82% 60.18%
Argentina Mercosul 100% 84.98% 9.16% 2.76% 3.10%
WATER JBS MERCOSUL Water consumption Volume (milhes de m/ano) Captured by source Surface Underground Rain Public supply 66,57% 30,26% 1,16% 2,01% 96,02% 3,98% 25,09% 62,88% 12,04% 86,90% 13,10% 68,40% 28,53% 0,98% 2,09% Brazil 33,8 Paraguay 0,30 Uruguay 0,75 Argentina 28,6 Mercosul 4,2
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MANAGEMENT OF GREENHOUSE GAS (GHG) EMISSIONS

JBS develops tools to measure and mitigate greenhouse gas emissions from its activities. Since 2009 it has produced a Greenhouse Gas Emissions Inventory. This diagnosis allows the company to identify and prioritize actions to mitigate GHG emissions through the implementation of low carbon projects. Since 2009, the Company has produced an Inventory of Emissions of Greenhouse Gases. This diagnosis allows the company to identify and prioritize actions to mitigate GHG emissions through the implementation of low carbon projects. In addition, to maintain transparency regarding its emissions, since 2010 JBS has been a member of the ICO2 Portfolio (BM&FBOVESPA), an index that includes the degree of efficiency related to emissions and the companys revenue.
JBS joined the CDP (Carbon Disclosure Project) in 2009, where it discloses its management and strategies related to climate change mitigation.
SOLID WASTE
Every JBS unit has a Solid Waste Management Program that governs the storage, processing and disposal of solid waste produced in its facilities. The program also supports a long term strategy on solid waste impact mitigation. JBS promotes selective collection of recyclable and non-recyclable waste at all of its units. JBS uses organic waste (rumen) from its slaughtering houses as biomass for the boilers, reducing fossil fuels consumption. At the Leather / Hide Division, JBS has invested R$ 5 million in the deployment of a Recycling Unit for hide waste. This unit, located in Campo Grande (Mato Grosso do Suk state), has an annual processing capacity of 4,800 tons.
TOTAL EMMISSIONS (tCO2e)

858,364
By classification jbs mercosul

Hazardous 0,43%
417,451
417,920
*2008: JBS Carnes e Couros 2009: JBS Couros e Carnes 2010: JBS Couros e Carnes (incorporation of the units) 2011: In the preparation period, with the JBS Global scope. (tCO2e tons of CO2 equivalent
2008
2009
2010
Non-hazardous 99,57%
JBS AMBIENTAL
A division of the JBS Group, JBS Ambiental (Environmental), provides solutions for solid waste management through the treatment, processing, reuse and/or proper disposal of recyclable, non-recyclable, and hazardous industrial material and waste. The industrial unit in the city of Lins (So Paulo state), develops, from industrial plastic waste, recycled products such as High Density Polyethylene (HDPE), Low Density Polyethylene (LDPE ), Linear Low Density Polyethylene (LLDPE ) and polypropylene (PP ), for producing new products. With an installed capacity to recycle 500 tons of plastic waste a month, the unit has modern and innovative equipment that keeps the technical characteristics very similar to the original inputs. The unit also manages more than 1,000 tons a month of other waste (such as paper, cardboard and ferrous and nonferrous scrap metal) which is recycled.
the first company in the sector to register a Clean Development project
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JBS is in the process of establishing other JBS Ambiental branches in its other industrial units to manage solid waste.
By type of disposal - JBS MERCOSUL

Recovery 2,72% recycling 5,52% landfill 14,36% Reuse 8,49% Others 0,91%
Composting 68%
ENERGY
JBS has established a goal to introduce renewable energy sources to its industrial boilers and its fleet of vehicles. In 2011, direct energy consumption from renewable sources was 89%, which represented an 11% increase on 2010.
Indirect energy (GJ) Argentina Paraguay Uruguay Brazil JBS Mercosul 59.023,44 29.474,93 57.762,56 2.193.960,31 2.340.221,24
Biodiesel
JBS Biodiesel has the capacity to produce biodiesel from vegetable oils and animal fat in fully automated plants, using a modern production system and laboratory testing. JBS Transportation performed tests using B20 and B100 fuel (20% and 100% biodiesel, respectively) in its fleet of trucks and found that there was a significant reduction in the emission of pollutants. Through the use of biodiesel, JBS aims to mitigate the environmental impacts of its fleet and encourage the automotive industry to develop new technologies that can further improve vehicle performance and mitigate harmful emissions.
Direct energy
Non-renewable 11% Renewable 89%
Renewable: Firewood, wood chips, briquettes, sugarcane bagasse, ruminal content, ethanol, animal fat. Non-renewable: diesel oil, gasoline, LPG, GMP, natural gas, nitrogen.
Recycling of waste oil

Since 2009 JBS has run a project to collect and recycle used cooking vegetable oil in several Brazilian municipalities. The project aims to increase environmental awareness and encourage recycling. In 2011, the company collected 313,450 liters of used vegetable oil. All of this was sent for reuse and transformed into biodiesel. In the same year, the company won the Sustainable Action Award from the Paulista Association of Supermarkets (APAS), at the 27th International Congress and Fai, for its collection of used vegetable oil.
Thermal Power Station

Biolins, a unit of JBS, produces electricity and steam from cogeneration, using bagasse from sugar cane as fuel. The Biolins power station has an installed capacity of 28,000kw, enough to supply the JBS industrial complex in Lins and produce a surplus of energy. The available surplus is sold to other companies in the area.
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SUSTAINABLE LIVESTOCK FARMING

JBS has the compromise to buy cattle only from regular farms, which respected and fulfilled the Brazilian legislation.. In order to guarantee adherence to this policy and provide the highest level of transparency, the Company invested continuously in a system of monitoring through the most high technology which allowed for the verification of the fulfillment of the legal criteria of each supplier before the purchase of cattle and so guaranteeing the legal origin of every cattle bought. In addition, JBS has implemented a satellite-based tracking system to monitor the Amazon biome area. This monitoring system involves a series of procedures and analytical data tools that allow the Company to identify its suppliers and determine their sustainability status. The integrated livestock procurement system follows guidelines issued from the boardroom and is supported by the companys most senior executives.
With the Sustainable Livestock Farming program, JBS provides Brazilian cattle farmers with information on best practices in the sector today
ETHICAL SOURCING OF CATTLE

JBS commitment Rejection of illegal deforestation Rejection of slave labor and/or child labor Rejection of land disputes and/or squatting Rejection of the invasion of Indigenous Lands or Protected Areas Monitoring of the Amazon Biome 100% of JBSs cattle supplier properties in Brazil are georeferenced 1100% of the geo-referenced points are monitored via satellite images of the Amazon Biome Any property that is included on the official lists of the Brazilian Institute of Environment and Natural Resources (IBAMA) and/or the Ministry of Labor and Employment (MTE) for illegal activities is automatically blocked on the JBS livestock procurement system The consultation of these official lists occurs in three stages: - When the animals are purchased - Before entering the property - Before the animals go to slaughter In an effort to promote transparency, JBS invites its customers, consumers and the public to review its livestock procurement system at: www.jbs.com.br/Rastreabilidade.aspx. Moreover, to affirm its commitment to sustainability, JBS executed the International Covenant on the Elimination of Child Labor Similar to Slavery - United Nations and the Pact of Livestock Initiative for Sustainable Connections So Paulo Amaznica - Ethos.
Brazilian Roundtable on Sustainable Livestock Farming (BRSLF) JBS supports and participates as a Board Member the BRSLF, formed by representatives of different segments of the cattle value chain in Brazil. The BRSLF includes representatives of companies and organizations in the sector, associations of farmers, retailers, banks, civil society organizations, research centers and universities. The group discusses and formulates, in a transparent manner, principles, standards and common practices to be adopted by the sector, which contribute to the development of sustainable livestock farming, meaning socially responsible, environmentally correct, and economically viable. JBS Feedlots The JBS Feedlot Division provides farmers interested in increasing their production structure with cutting edge technology that addresses the areas of nutrition, livestock management
39
and animal welfare, in addition to offering modern marketing techniques. The company currently has five feedlots in So Paulo, Mato Grosso and Gois. In 2011 approximately 211,000 animals were fed in its feedlot system. That same year, in the feedlots in Gois, JBS began composting projects to produce bio-fertilizer (enriched with phosphate), recycling approximately 21% of the waste generated at that facility. JBS Hides/Leather The JBS Leather Division plays an important role in promoting sustainable livestock through its actions to verify the legal origin of hides and the traceability of materials. As a member of the Leather Working Group (LWG), a multistakeholder forum that seeks to improve the tanning industry through alignment of environmental priorities and guidelines for continuous improvement, the company seeks to achieve high levels of hide traceability. Nine of
the companys facilities are certified by the LWG as having achieved Grade A that is, the hides can be traced back to the packing plant and the supplier farm. JBS Hides/Leather prioritizes clean production techniques to minimize its environmental impact. Investments in research, technology and training allow the more efficient use of raw materials and natural resources, while also reducing the generation of waste and minimizing its environmental footprint. The leather shavings and trimmings recycling plant in Campo Grande applies a pioneering concept that allows the company to transform leather waste into reusable raw materials for leather processing and other industrial applications. These raw materials also provide an excellent source of nitrogen that can be used in agricultural production. In addition, JBS Hides/ Leather has developed several projects focused on reducing the use of water in its operations. In 2011, these actions resulted in a reduction of approximately 23% in water consumption in the tanning plants.
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colaboradores
41
EMPLOYEES
BS enjoys a diverse, global workforce and bases its employment decisions on meritocracy, respecting the diversity among our employees and making no distinction between age, race, religion or sexual orientation. JBS provides a training program for employees to expose them to the Companys values, mission and principles. The program includes training in several areas including Corporate Governance, Human Resources, Quality Control, Sustainability, Environment and Ethics. At JBS S.A. there are seasonal closures of some production units. When this is necessary, the labor union involved and the Department of Labor (STR) are notified of the shutdown two weeks in advance, and usually collective vacations for employees are granted. Collective holidays are also granted in the case of unit closure for maintenance, which depends on the complexity of the work. JBS S.A. has a Transfer Policy to support its employees if a plant is shut down, being transferred to the nearest unit, or being offered support to move and temporary board. In Brazil, every employee is represented by a labor union and is covered by collective bargaining agreements. JBS in the United States follows market practices to offer jobs with competitive salaries and benefits for its employees. The Company runs various initiatives to attract, develop and retain a world class workforce, including personal planning, recruitment, selection and hiring, special guidance on management, training, team development and building, succession planning, and leadership development. To avoid hiring unauthorized workers, in the United States JBS has strict controls and programs to verify the immigration status of its employees. This led the Company to participate voluntarily in the E-Verify system, which checks on the eligibility for employment of new hires.
JBS respects diversity and makes no distinction between race, religion, or sexual orientation
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colaboradores
EMPLOYMENT - NUMBER OF EMPLOYEES (JBS Global)

Australia 6% Mxico 4% Others 1%
COUNTRY Brazil Argentina USA Australia Mexico Others TOTAL 59,055 2,121 59,180 7,905 4996 1930 135,187
Brazil 44%
USA 44% Argentina 1%
BY BUSINES DIVISION Meat Leather Dairy Pork Sheep and Lamb Chicken Corporate New Business TOTAL 64.489 7.661 3.614 6.994 1.114 45.560 1.006 4.748 135.187
Chicken 34%
Corporate 1%
New Business 3%
Meat 48%
Ovinos 1% Pork 5% Lcteos 3%
Leather 5%
TRAINEE PROGRAM
The Trainee Program is conducted at the JBS Meat Division, lasts 18 months and focuses on the production of fresh beef, and processed products. Its goal is to create opportunities for young professionals, to fast-track leaders, enhance the training, expertise and people management, and to produce people who are better prepared for succession, with international job opportunities. In 2011, the JBS Trainee selection process was applied to by approximately 14,500 people, and 22 young people were hired.
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Internal Talent Program

The Internal Talent Program aims to develop and train potential employees in order to produce qualified professionals who can meet the Companys demands and take on positions as production supervisors. For six months, employees get technical and behavioral training at their base unit, during which they are dedicated exclusively to the program, being away from their current role. After completion of training, the employees take on a position as production supervisors at their unit, or they are relocated. In 2011, 300 people applied for the program, which offered 15 Production Supervisor positions. The successful applicants were invited to have lunch with Wesley Mendona Batista, Company President, Jos Batista Sobrinho, the founder of JBS, and other directors.
Every employee take part in an integration program to facilitate their adaptation to their new job and to disseminate knowledge, principles, and values
EMPLOYEE AWARENESS
In 2011 JBS has trained all its employees at its Meat and Leather units in the conscientious use of water. The practices discussed were not restricted to the work workplace, but also explained how to make proper use of water at home. In celebration of World Environment Day (June 5), JBS held Environment Week at several production units. These events addressed issues related to the sustainable use of natural resources, with various activities, ranging from treasure hunts to the donation of native plants, getting employees involved with the topic and changing their behavior. In the production units there is also Project ESW, focusing on consumer awareness of Energy, Steam and Water. It includes periodic internal audits and employee awareness programs. Employees at the head office (Anhanguera - the administrative unit), Distribution Centers (DCs) and Beef Shopping - Meat Market - who were not familiar with the production processes at a slaughterhouse, had the opportunity to visit an industrial unit, with costs paid for by the Company, to learn about the Companys business.
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desempenho social
Germinare offers excellent, free primary and secondary education, producing people who are better prepared in academic and human terms
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Social Performance
THE GERMINARE INSTITUTE
Since 2009, the Companys activities in the social have gone through the Germinare Institute. It shares the same principles as the Companys in the constant search for innovation and entrepreneurship, according to strict ethical and quality standards, in the building of a fairer society. Founded in February 2010, the Germinare School is the Germinare Institutes main focal point. Built along with the Companys headquarters in So Paulo (SP), Germinare offers excellent free primary and secondary school education, producing citizens who are better prepared in academic and human terms, with a broad cultural repertoire, consolidated ethical values and positive attitudes with regard to life and society. With the opening of the Germinare School, education became the center point of JBS policy on social responsibility. The school offers free education to students from the 6th grade of elementary school to the 3rd grade of high school. In 2011, about 1,200 students applied, and 87 students were selected. Germinare now has 360 students enrolled who are given free school supplies, food and uniforms. In 2012, it began its third school year, with groups in the 6th, 7th, 8th and 9th grades, completing Elementary School II. From 2013, classes in high school, up to the 3rd year, will begin. Study is full time, with access to a computerized library, complete laboratories, a gymnasium and semi-Olympic swimming pool. S The young people complete their education with physical and competitive exercises, which also developed team spirit, respect for rules and a sense of achievement. All the laboratories are well equipped for experimental work in the field of physical, chemical and biological sciences, as well as educational technology. In a project that aims for meaningful education, these are of great importance and are made great use of. A member of the UNESCO Associated Schools Project, in 2011 Germinare participated in UNESCOs International Year of Chemistry. The project gave students a new view of chemistry as a tool for a more sustainable world, far removed from the idea still prevalent in society that associates chemistry with pollution.
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Informaes corporativas
Corporate information
Identification JBS S.A. CNPJ/MF: 02.916.265/0001-60 NIRE: 35300330587 CVM : 20575 Institutional website: www.jbs.com.br HQ Avenida Marginal Direita do Tiet, 500 - CEP 05118-100 - So Paulo/SP, Brasil Investor Relations Jeremiah Alphonsus OCallaghan Director of Investor Relations Eduardo Pavanelli Galvo Manager of Investor Relations Address: Av. Marginal Direita do Tiet, 500 - CEP 05118-100 - So Paulo/SP, Brasil Tel.: (55 11) 3144-4224 Fax: (55 11) 3144-4171 E-mail: ri@jbs.com.br Website: www.jbs.com.br/ri Independent Auditors KPMG Auditores Associados Avenida Paulista, 2.313, 6 andar, CEP 01311-300 So Paulo/SP, Brasil Tel.: (55 11) 3138-5000 Fax.: (55 11) 3138-5058 Bank Banco Bradesco S.A. Shareholder services Investor Relations (see above) Banco Bradesco S.A. In charge: Jos Donizetti de Oliveira Av. Yara, S/N, Prdio Amarelo, 2 Andar, Cidade de Deus CEP 06029-900 Osasco/SP, Brasil Tel.: (55 11) 3684-3749 e (55 11) 3684-8013 Fax: (55 11) 3684-2714 E-mail: donizetti@bradesco.com.br. Stocks and Bonds Issued The Companys stocks, exclusively ordinary with voting rights, are listed on the BM&FBOVESPA market Bolsa de Valores, Mercadorias e Futuros (BM&FBOVESPA) under code JBSS3, in the Novo Mercado segment. Newspapers for the release of information Dirio Oficial do Estado de So Paulo O Estado de S. Paulo
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CREDITS Overall Coordination JBS Investor Relations Team Collaboration Departments of Sustainability, Press Relations, and Institutional Marketing at JBS. Content and editorial TV1 Contedo Departments of Investor Relations, Sustainability, and Press Relations at JBS. Design and Layout TV1 Contedo

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ANNUAL REPORT SUSTAINABILITY 2011

MISSION, VISION AND VALUES

What bring us together

MAIN OPERATING AND FINANCIAL INDICATORS

MAIN OPERATING AND FINANCIAL INDICATORS

% 12.9% 14.8% -0.3% 19.7% 6.0% -9.5% -71.5% -16.3% -

Distribution of net revenue and EBITDA by Business Unit in 2011

EBITA by Business Unit 2011

JBS USA chicken business 18%

JBS Mercosul 35%

JBS USA chicken business 5%

JBS USA pork business 12%

Net revenue (R$ million)

EBITDA (R$ million)

34,312 1,156 1,276

2007 2007 2008 2009 2010 2011

EBITDA Margin (%)

NET REVENUE AND EBITDA BY SEGMENT AND REGION

NET Revenue by region

USA and Austrlia 73%

USA and Austrlia 49%

2010 15,112.6 12,841.8 2,531.1 6,696.6 2,030.9 8,727.5

% -0.2% 2.3% 26.4% -0.8% 1.2% -0.3%

15,088.9 13,132.2 3,198.3 6,642.5 2,055.4 8,697.9

retranca CORPORATE PROFILE

Corporate headquarters in the United States

MESSAGE FROM THE CEO

MESSAGE FROM THE CEO

OPERATIONS AND MARKETS

OPERATIONS AND MARKETS

OPERATIONS AND MARKETS

Its entire fleet is tracked to ensure targets are met

OPERATIONS AND MARKETS

Net revenue and Ebitda

2011 61,796.8 6,696.6 10.8% (2,010.7) (230.1) (75.7) 3,151.0 5.1%

2010 54,712.8 6,718.0 12.3% (2,223.0) 58.6 (292.8) 3,766.1 6.9%

% 12.9% -0.3% -9.5% -16.3%

2011 16.5 3.5 7.5 14.9

2010 13.1 2.9 6.9 13.3

% 25.6 17.5 9.5 11.9

739.1 338.2 1,600

663.7 11.4 276.8 22.2 1,289 23.9

Result attributed to controlling shareholder participation.

Shareholder structure at JBS on December 31, 2011

FB Participaes S.A. 46%

Dividend payment record

Shareholder structure at JBS on February 1, 2012

FB Participaes S.A. 47%

STOCK VARIATIONS THROUGHOUT 2011 and the 1st Quarter of 2012

JBS S.A. Balance sheets

Valuation adjustments to shareholders equity in subsidiaries 127,071

Modernity and innovation are part of JBS' decision-making process

The corporate governance structure is led by the Board of Directors

Board of Executive Officers

All the business units performed better in 2011

Date elected 1/26/2011 5/13/2010 5/13/2010 11/11/2010

Mandate ends 5/13/2013 5/13/2013 5/13/2013 5/13/2013

Position President of the Audit Committee Member Member Member Member

Date elected 04/27/2012 04/27/2012 04/27/2012 04/27/2012 04/27/2012

Mandate 1 year 1 year 1 year 1 year 1 year

AWARDS AND RECOGNITION

AWARDS AND RECOGNITION