PROFILE: BATISTA FAMILY BRAZIL

3-OCT-16 | JBS, J&F INVESTIMENTOS, ELDORADO BRASIL CELULOSE, BANCO ORIGINAL

 The Batista family founded and controls JBS, the world’s Shareholder-related risk
largest meat-processing company, which expanded globally
via acquisitions in the past decade. Succession Moderate JBS founder Jose Batista Sobrinho, who
Risk is in his 80s, has handed over leadership
 The family also owns pulp and paper company Eldorado Risk associated to his sons but remains involved.
Brasil Celulose, shoe maker Alpargatas, cosmetics and clean- with generational
All three sons have experience managing
transfer of wealth
ing product maker Flora and lender Banco Original. and management JBS and are in their 40s and 50s.
 Strong political connections and financing from state-owned Political High JBS has been Brazil’s top campaign
banks facilitated the growth of JBS and other group com- Risk contributor and the family is currently
panies. The family and its companies are now implicated in Political exposure implicated in corruption investigations
politically-linked corruption investigations. due to government
related to politically-linked financing.
relationships
 JBS CEO Wesley Batista was detained for questioning by
Legal and High Joesley and Wesley Batista, the group’s
police on 5 Sep in an investigation of fraud at state pension Regulatory Risk top executives, have been implicated in
funds that invested in Eldorado Brazil Celulose. He and his Risk associated corruption investigations. Joesley has
brother Joesley, the chairman of JBS, were suspended from with lawsuits, been charged with financial crimes.
management roles by a court order but reinstated in a prosecution and
regulatory sanctions JBS has been a target of anti-trust and
deal with prosecutors. labor regulators in Brazil and the US.

Transparency High A large stake in the family’s main holding

Risk company is held by Delaware-based
CONTENTS PAGE Risk due to opaque Blessed Holdings, whose ultimate own-
Family structure 3 corporate owner-
ership has been disputed. JBS denied
Corporate structure 4 ship and offshore
holding structures being behind Blessed and has named
Affiliations 6 offshore companies as the owners.
Risk factors 7
Governance High Anti-trust regulator CARF imposed BRL
Capital structure (JBS) 8
Risk 3bn in fines and back taxes on JBS for
Acquisitions 10 Risk associated alleged fraud and damage to minority
News 11 with corporate
shareholders through mispricing of
governance, fraud
and corruption shares and use of an illegal structure in
its 2009 merger with Bertin.
INTRODUCTION Expansion Risk High Rapid expansion and diversification
The family of Jose Batista Sobrinho controls JBS SA, which has grown Risk created by beyond the group’s core business may
rapidly from a regional beef producer into world’s largest meatpacker business growth pressure the group’s financial and
through a series of acquisitions funded in large part by the Brazilian and diversification management resources.
government. The purchase of US-based Swift & Co. (renamed JBS
USA Holdings) in 2007, Smithfield Inc (renamed JBS Packerland) in 2008 Credit History Moderate Near-term liquidity is adequate but
and NASDAQ-listed Pilgrim’s Pride Corp in 2009 gave JBS large shares Risk legal difficulties create uncertainty.
Bankruptcy or The family has made use of the foreign
of the US markets in beef, pork and chicken. Through its holding com-
default risk
pany, J&F Investimentos SA, the family also controls pulp and paper related to share- capital markets, but also long relied on
company Eldorado Brasil Celulose SA, dairy product maker Vigor Ali- holder history state banks for loans, some of which
mentos SA, shoe and apparel manufacturer Alpargatas SA, online lender were converted to equity.
Banco Original SA and cosmetics and cleaning product maker Flora. Ratings indicate the probability of business disruption or loss of investment value.
J&F is also involved in the property, media and energy sectors. Jose High = over 50% or already occurring; Low = not of concern in the foreseeable future
Batista Junior controls a separate, beef-focused business group.

Jose Batista Sobrinho founded JBS predecessor Friboi in 1953 in Goias Media coverage of the Batista family often focuses on their rural origins
state. He is described variously as having started out as a butcher or and blue-collar upbringing. They present themselves as hyper-successful
rancher, but his primary business began with the acquisition of slaughter- butchers, rather than owners of what has essentially become a state-
houses. The company had government ties early on, obtaining contracts backed investment fund. There is some truth to the rustic image –
to supply beef to workers building the new capital, Brasilia. Most of Jose Batista Sobrinho speaks with a country accent and boasts that he
the company’s expansion, however, has come under the leadership put his children to work in slaughterhouses as teenagers. But while the
of his three sons: Jose Batista Junior, Wesley and Joesley. Each has Batistas prefer to talk about their butchering skills, their business owes
had his turn as CEO, with Wesley holding the title as of 2016. more to aggressive deal-making and government financing.

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PROFILE: BATISTA FAMILY BRAZIL
3-OCT-16 | JBS, J&F INVESTIMENTOS, ELDORADO BRASIL CELULOSE, BANCO ORIGINAL

BNDES FINANCING AND AUDIT Key family members in JBS

The Batista family’s government relationships, particularly their ties with
state-owned banks, have been both a strength and a weakness (see Jose Batista Sobrinho Founded JBS in 1953 as a butcher
Affiliations on p.6 and Risk Factors on p.7). JBS was the largest donor (led JBS 1953-1980s) shop and expanded into slaughter-
in the 2010 and 2014 presidential election campaigns, giving mostly to Regional growth houses starting in the 1960s;
developed government ties while
President Dilma Rousseff’s Worker’s Party (PT) and the Brazilian Social
supplying beef to contractors in Brasilia
Democracy Party (PSDB), but also to the Brazilian Democratic Move-
ment Party (PMDB) of current president Michel Temer, according to
Jose Batista Junior Refocused JBS from regional to national
campaign finance disclosures. Rousseff was suspended in May amid (1980s-2005) market, and expanded domestically
allegations the she allowed manipulation of government accounts, and National expansion via acquisitions; began diversification
was impeached in August. beyond meat industry with founding
State-owned Brazilian Development Bank (BNDES) provided financing of hygiene product-maker Flora;
for the Batista family’s landmark acquisitions, including Swift, Smithfield left JBS to run for political office
and Pilgrim’s Pride. Other Brazilian conglomerates that enjoyed the
patronage of BNDES include the EBX Group – controlled by Eike Batista Joesley Batista Oversaw the most aggressive period of
(no relation), whose fall has come to symbolize Brazil’s economic (2007-2011) JBS’ M&A-driven global expansion,
collapse – and the Odebrecht Group, whose CEO Marcelo Odebrecht Acquisition-fueled marked by the acquisition of Pilgrim’s
global expansion Pride, Swift and Smithfield with
was sentenced to prison this year for paying kickbacks to Petrobras
financing from BNDES;
officials. BNDES has a history of picking and supporting “national
named chairman in 2011
champions” with the aim of cultivating globally competitive Brazilian
companies. This has led to accusations of preferential treatment for Wesley Batista Moved to the US in 2007 to oversee
politically favored conglom-erates, as well as complaints that the (2011-present) the integration of acquisitions there;
bank’s subsidized lending distorts markets in Brazil and abroad. Consolidation and returned to Brazil in 2011 as CEO;
BNDES has provided both debt and equity financing, and at one point damage control leadership has been marked by reduced
owned over 30% of JBS. The stake was reduced in 2012 when some M&A, less dependence on Brazil
shares were transferred to state-owned bank Caixa Econômica Fed- government funds, and increased use
eral, and now stands at 20.36%. BNDES provided BRL 10.6bn in financing international capital markets with
to JBS between 2005 and 2014, according to press reports citing Brazil’s frequent USD bond issuance
Federal Court of Accounts (TCU).
An audit of BNDES by the TCU in 2015 found evidence that JBS had In addition, Joesley has been charged with financial crimes in rela-
received “privileged treatment”. The TCU raised questions about the tion to alleged illegal loans made indirectly by Banco Original to group
speed with which BNDES approved loans to JBS, and alleged that the companies. Batista family members and companies have denied all
financing caused losses to BNDES and the government. The audit is also accusations against them.
investigating alleged irregularities in a loan to finance the attempted
acquisition of National Beef, which was abandoned after an antitrust NEW YORK IPO
lawsuit by the US Justice Department, according to Brazilian daily Valor. Amid difficulties in Brazil, the Batista family is working to refocus JBS
overseas. While the pace of deals has slowed, JBS made two large
OTHER INVESTIGATIONS
foreign acquisitions last year: it paid USD 1.45bn for Cargill Pork LLC,
J&F Investimentos and Eldorado Brasil Celulose are also implicated
in the “Greenfield” investigation into fraud at state-owned pension and USD 1.5bn for poultry producer Moy Park Ltd, the UK unit of Bra-
funds. The funds are accused of acquiring stakes in favored companies zil’s Marfrig Global Foods SA. JBS announced in May that its overseas
at inflated prices. Wesley and Joesley Batista were briefly suspended holdings and some of its Brazilian assets would be listed on the New
from management roles last month before being reinstated in a deal York Stock Exchange as JBS Foods International. It cited access to cap-
with prosecutors. ital as the motivation, but the move may also offer some insulation
While the Batista family’s companies are not central to the Lava Jato against political and legal hazards in Brazil. Wesley Batista, who pre-
scandal, police investigated payments by JBS to a shell company under viously ran JBS’ US operations, will be the new company’s CEO.
inquiry in the probe, Valor Econômico reported in 2014. The offices He has also overseen a transition in JBS’ financing, issuing USD bonds in
of Eldorado and J&F, as well as Joesley Batista’s home, were raided recent years and reducing reliance on state-owned banks (see JBS
in July 2016 based on evidence from a plea bargain by Fábio Cleto,
capital structure on p.8). However, it remains to be seen how the family
a former VP of Caixa Econômica Federal questioned in the Lava Jato
will weather ongoing investigations and the disruption of the political
investigation. Cleto claimed to have received bribes in exchange for
loans to Eldorado. relationships that helped propel its rise.

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PROFILE: BATISTA FAMILY BRAZIL
3-OCT-16 | JBS, J&F INVESTIMENTOS, ELDORADO BRASIL CELULOSE, BANCO ORIGINAL

Batista Family

José Batista Sobrinho

b.1933
Wife: Flora Mendonça

Founded JBS in 1953 in Goias state;

director of JBS SA and Eldorado
Brasil Celulose

José Batista
Wesley Joesley
Júnior
Mendonça Mendonça Valere Batista Vanessa Batista Vivianne Batista
b. 1960
Batista Batista
Ex-chairman of JBS;
CEO of JBS 2011-
owns JBJ Shareholder of J&F
present; director of Chairman of JBS and Shareholder of J&F
Investimentos, a meat- Shareholder of J&F Investimentos; former
Eldorado; previously Eldorado; CEO of JBS Investimentos; director
focused conglomerate Investimentos head of CSR-focused
based in US as head of 2007-2011 of Instituto JBS
independent of JBS Instituto JBS
JBS USA Beef

Wesley Batista
Filho

President of JBS USA

Beef; former head of
Asian sales for JBS
Uruguay & Paraguay

Note: This chart is based on public information and is not intended to be comprehensive. It includes individuals relevant to the family business.

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PROFILE: BATISTA FAMILY BRAZIL
3-OCT-16 | JBS, J&F INVESTIMENTOS, ELDORADO BRASIL CELULOSE, BANCO ORIGINAL

Batista Family
Corporate Structure
(Meat Business)
Holding companies
Alpargatas 31Mar2016
ZMF Fundo de Investimento em Participações (ZMFF):Joesley, Wesley, Valere, Vanessa & Alpargatas 31Mar2016 Alpargatas 31Mar2016
Vivianne Batista 20% each J&F Investimentos SA FIP Pinheiros
ZMF Participações Ltda (ZMFP): José Batista Sobrinho 100%, Flora Batista (nominal stake)
JJMB Participações Ltda: Joesley Batista 100%, José Batista Sobrinho (nominal stake) ZMFF 40.54%, ZMFP 6.81%, JJMB, WWMB, VLMB,
WWMB Participações Ltda: WesleyBatista 100%,José Batista Sobrinho (nominal stake) Blessed Holdings 85.73%
VNMB & VVMB 5.58% each
VLMB Participações Ltda:Valere Batista 100%,José Batista Sobrinho (nominal stake) J&F 14.25%
Pinheiros Fundo de Investimento em
VNMB Participações Ltda:VanessaBatista 100%, José Batista Sobrinho (nominal stake) JJMB 0.01%
Participações (FIP Pinheiros, formerly FIP Bertin)
VVMB Participações Ltda:Vivianne Batista 100%, José Batista Sobrinho (nominal stake) WWMB 0.01%
24.76%

Alpargatas 31Mar2016 J&F2016 J&F2016 JBJ2016 JBJ2016

Blessed Holdings (Delaware) J&F Participações JBJ Investimentos Fratelli Dorazio

FB Participações SA
Ltda SA Investimentos SA
Lighhouse Capital Insurance Co (Cayman Islands) 50%
US Commonwealth Life, AI (Puerto Rico) 50%
[LCI: Colin Murdoch-Muirhead 75%, Cogent Holdings Intl 25%; J&F Investimentos SA J&F Investimentos SA Controlled by José Batista Subsidiary of JBJ
USCL: Colin Murdoch-Muirhead 51%, James Walker 24%, Nicholas 100% 100% Júnior Investimentos
Ferris & Paul Blackhouse 12.5% each;
Cogent Holdings Intl: Nicholas Ferris & Paul Blackhouse 50% each]

Mcap BRL 34bn J&F2016

JBS SA [BOVESPA:JBSS3]
Chairman: Joesley; CEO: Wesley; Dir: José Sr.

FB Participações 42.36%
BNDESPar 20.36%
Caixa Economica Federal 6.92%
Banco Original 0.19%

Non-JBS
JBS 2Q16 JBS 2Q16 JBS 2Q16 JBJweb2016

Seara Alimentos Ltda JBS USA Holdings Inc Mataboi Alimentos Ltda
JBS Foods SA
(formerly Swift & Co)
JBS SA 100% Subsidiary of Fratelli Dorazio
JBS USA Holdings Inc 100% JBS SA 100% Investimentos
JBS 2Q16

JBS USA Finance Inc

JBS SA 100% Mcap USD 5.3bn JBS USAweb2016 JBS 2Q16 JBJweb2016
8.25% sr unsec notes 2020 Pilgrim's Pride (USA)
7.25% sr unsec notes 2021 JBJ Agropecuaria Ltda
[NASDAQ: PPC] JBS USA LLC
5.875% sr unsec notes 2025
Directors: Wesley and Joesley Batista
5.75% sr unsec notes 2525
JBS USA 75.3%
Subsidiary of JBJ Investimentos
JBS 2Q16 JBS USA Holdings Inc 100%
5.75% sr unsec notes 2025
JBS Investments GmbH
(Germany)
JBS SA 100% JBS 2Q16 JBS 2Q16 J&Fweb2016

7.75% sr unsec notes 2020

JBS Packerland Inc
7.25% sr unsec notes 2024 Swift Beef Co (USA) J&F Oklahoma Holdings Inc
(formerly Smithfield Inc)
JBS 2Q16
JBS USA LLC 100% JBS USA LLC 100% Subsidiary of J&F Investimentos
ESAL GmbH (Germany)
JBS SA 100%

6.25% sr unsec notes 2023

JBS 2Q16 JBS 2Q16 J&Fweb2016

JBS 2Q16 J&F Floresta

Swift Pork Co (USA) JBS US Holding LLC (USA)
Bertin SA Agropecuária Ltda
JBS SA 100%
JBS USA LLC 100% JBS USA LLC 100% Subsidiary of J&F Investimentos
10.25% sr unsec notes 2016

Note: This organizational chart is based on public information. It contains key family companies but is not intended to be comprehensive.
Shareholders and USD-denominated bonds are indicated for each company, with family members and family companies in italics.
Companies are domiciled in Brazil unless otherwise noted. Market capitalization is as of 30 Sep 2016

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PROFILE: BATISTA FAMILY BRAZIL
3-OCT-16 | JBS, J&F INVESTIMENTOS, ELDORADO BRASIL CELULOSE, BANCO ORIGINAL

Batista Family
Corporate Structure
(Non-Meat Business)
Holding companies
Alpargatas 31Mar2016
ZMF Fundo de Investimento em Participações (ZMFF):Joesley, Wesley, Valere, Vanessa & Alpargatas 31Mar2016 Alpargatas 31Mar2016
Vivianne Batista 20% each J&F Investimentos SA FIP Pinheiros
ZMF Participações Ltda (ZMFP): José Batista Sobrinho 100%, Flora Batista (nominal stake)
JJMB Participações Ltda: Joesley Batista 100%, José Batista Sobrinho (nominal stake) ZMFF 40.54%, ZMFP 6.81%, JJMB, WWMB, VLMB,
WWMB Participações Ltda: WesleyBatista 100%,José Batista Sobrinho (nominal stake) Blessed Holdings 85.73%
VNMB & VVMB 5.58% each
VLMB Participações Ltda:Valere Batista 100%,José Batista Sobrinho (nominal stake) J&F 14.25%
Pinheiros Fundo de Investimento em
VNMB Participações Ltda:VanessaBatista 100%, José Batista Sobrinho (nominal stake) JJMB 0.01%
Participações (FIP Pinheiros, formerly FIP Bertin)
VVMB Participações Ltda:Vivianne Batista 100%, José Batista Sobrinho (nominal stake) WWMB 0.01%
24.76%

Alpargatas 31Mar2016 J&F2016 J&F2016 JBJ2016 JBJ2016

Blessed Holdings (Delaware) J&F Participações JBJ Investimentos Fratelli Dorazio

FB Participações SA
Ltda SA Investimentos SA
Lighhouse Capital Insurance Co (Cayman Islands) 50%
US Commonwealth Life, AI (Puerto Rico) 50%
[LCI: Colin Murdoch-Muirhead 75%, Cogent Holdings Intl 25%; J&F Investimentos SA J&F Investimentos SA Controlled by José Batista Subsidiary of JBJ
USCL: Colin Murdoch-Muirhead 51%, James Walker 24%, Nicholas 100% 100% Júnior Investimentos
Ferris & Paul Blackhouse 12.5% each;
Cogent Holdings Intl: Nicholas Ferris & Paul Blackhouse 50% each]

Shoes & Clothing Dairy Products Pulp & Paper Financial Services
Mcap BRL 4.8bn J&Fweb2016 J&Fweb2016 J&Fweb2016 BOweb2016

Alpargatas SA Vigor Alimentos SA Eldorado Brasil Celulose SA

[BOVESPA:VIGR3] Chairman: Joesley Batista Conglomerado Financiero Original
[BOVESPA:ALPA4]
Chairman: Wesley Batista Directors: Wesley and Jose Batista
Directors: Joesley and Wesley Batista
Director: Joesley Batista
J&F Investimentos 81%
J&F Investimentos 44% J&F Participações Ltda. 100%
J&F Investimentos 72% Petros 8.53%; Funcef 8.53%

Cosmetics/Cleaning Products
J&Fweb2016 VigorFS1Q16 Eldorado AR2015 BOweb2016

Flora Produtos de Higiene e Dan Vigor Indústria e Eldorado International Finance Banco Original SA
Limpeza SA Comércio de Laticínios Ltda GmbH (Germany) (Cayman Branch)
Eldorado Brasil Celulose S.A. 100%
Subsidiary of J&F Investimentos Vigor Alimentos S.A. 100% Banco Original S.A. 100%
8.625% sr unsec notes 2021

Real Estate & Construction

Folha 09Oct2015 Ambarweb2016 Eldorado AR2015 BOweb2016

Rishis Empreendimentos e Original Corporate Corretora

JFG Incorporações Itambé Alimentos SA
Participações SA de Seguros Ltda

Subsidiary of JBJ Investimentos Vigor Alimentos S.A. 50%. Eldorado Brasil Celulose S.A. 100% Banco Original S.A. 100%

Media
JBJweb2016 J&Fweb2016 Eldorado AR2015 BOweb2016

JFG Construções e Original Asset

Canal Rural Produções Ltda Eldorado USA Inc
Participações Ltda Management Ltda

Subsidiary of JBJ Investimentos Subsidiary of J&F Investimentos Eldorado Brasil Celulose S.A. 100% Banco Original S.A. 100%

Restaurants Mobile Payment Application

JBJweb2016 J&Fweb2016 BOweb2016

Brasil Desenvolvimento FB Alimentos Ltda

Pic Pay
Urbano Ltda (Beef Bistrô)

Subsidiary of JBJ Investimentos Subsidiary of JBJ Investimentos Banco Original S.A. 51%

Note: This organizational chart is based on public information. It contains key family companies but is not intended to be comprehensive.
Shareholders and USD-denominated bonds are indicated for each company, with family members and family companies in italics.
Companies are domiciled in Brazil unless otherwise noted. Market capitalization is as of 30 Sep 2016

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 PROFILE: BATISTA FAMILY BRAZIL
3-OCT-16 | JBS, J&F INVESTIMENTOS, ELDORADO BRASIL CELULOSE, BANCO ORIGINAL

AFFILIATIONS

Affiliation Notes

Brazilian Democratic The party of current president Michel Temer received about BRL 35m from JBS during the most recent national elections in 2014, according to press
Movement Party (PMDB) reports and campaign finance disclosures. Jose Batista Junior ran unsuccessfully for governor of Goias state as a member of PMDB.

The Batista family has a longstanding relationship with the Brazilian Development Bank (BNDES), which has helped finance many of its acquisitions,
according to corporate filings and press reports. In addition to being a lender to JBS and Eldorado Celulose, BNDES is the second-largest shareholder
Brazilian Development Bank
of JBS, with a 24% stake as of July 2016. The relationship between the family and BNDES is under investigation by Brazilian authorities as part of a
(BNDES)
broader audit of the bank. A November 2015 report by Brazil's Court of Accounts estimated BNDES' loss from JBS-related investments at BRL 847.7m.
JBS has denied wrongdoing in its deals with BNDES.

Brazilian state-owned lender Caixa Econômica Federal holds a 6.92% stake in JBS as of July 2016. It has also been a lender to Eldorado Celulose.
Former Caixa VP Fabio Cleto claimed in a plea bargain that he received kickbacks from Eldorado, and that the payments had been discussed with
Caixa Econômica Federal Joesley Batista, Folha de São Paulo reported. In 2012 Eldorado issued BRL 940m in bonds to infrastructure fund FI-FGTS, which is managed by Caixa.
Separately, the “Greenfield” investigation into fraud at state-owned companies’ pension funds has investigated investments in Eldorado by Caixa’s
Funcef fund. Wesley and Joesley Batista were questioned by police in Sept 2016.

Fabio Cleto, a former VP of state-owned bank Caixa Econômica Federal, said in a plea bargain that he received kickbacks from Eldorado Celulose,
Folha de São Paulo reported. His statement provided the basis for the Attorney General’s Office to ask the Brazilian Supreme Court to order raids on
Fabio Cleto
Eldorado and J&F offices on 1 July. According to newspaper O Globo, Cleto also claimed that part of that money went to Eduardo Cunha, the former
president of the lower house of congress, and one of the main supporters of Dilma Rousseff’s impeachment.

Former Petrobras director Paulo Roberto Costa, who was convicted in 2015 of racketeering and money laundering, had a contract with J&F to provide
Paulo Roberto Costa consulting services to the company, according to Folha Politica. The contract was found on a computer that was searched during the Petrobras
kickback investigation, according to the report. J&F denied the existence of the contract.

Fabio Cleto, former vice president of state-owned bank Caixa Econômica Federal, said in his plea bargain that a portion of the kickbacks he received in
Eduardo Cunha
exchange for loans to Eldorado Celulose went to Eduardo Cunha, the former president of the lower house of congress, according to press reports.

Lobbyist Lúcio Funaro has emerged as a central figure in the Lava Jato scandal involving kickbacks paid for Petrobras contracts, according to press
reports. At least two depositions by suspects in the case name Funaro as collecting money on behalf of Eduardo Cunha, the former president of the
lower house of congress. The website G1 reported that according to Fabio Cleto, former VP of state-owned bank Caixa Econômica Federal, Joesley
Lúcio Funaro Batista gifted his house to Funaro. Batista family holding company J&F Investimentos denied the accusations and said that Joesley Batista, through his
personal holding company JJMB, sold his home to Lucio Funaro’s wife. J&F said that the deal was legal and offered documentation to demonstrate this.
Brazilian newspaper Extra reported that Cleto claimed to have taken a leisure trip to the Caribbean with Funaro and Batista in 2011. Batista and Funaro
declined to comment on the matter, according to Extra.

JPMorgan Chase & Co. JPMorgan has advised JBS on several major acquisitions over the past decade, according to company filings.

Henrique Meirelles was appointed Finance Minister in May 2016 by President Michel Temer. He served as president of the Central Bank of Brazil under
Henrique Meirelles President Luiz Inacio Lula de Silva. After his central bank tenure ended in 2011, Meirelles was appointed chairman of J&F Investimentos, the Batista
family's main holding company, and held the position until becoming Finance Minister.

Colin Murdoch-Muirhead is the controlling shareholder of Blessed Holdings, a Delaware-based company that owns an indirect 21% stake in J&F
Investimentos, according to a filing by Alpargatas SA dated 31 Mar 2016. He controls Cayman Islands-based Lighthouse Capital Insurance Co and
Puerto Rico-based US Commonwealth Life, AI, each of which owns 50% of Blessed Holdings. Blessed Holdings in turn owns 85% of Pinheiros Fundo de
Investimento em Participações (FIP Pinheiros, formerly called FIP Bertin), which has a 24.76% stake in J&F Investimentos. The other shareholders of
Blessed Holdings are James Walker, Nicholas Ferris and Paul Blackhouse. According to the website of Lighthouse Capital, Murdoch-Muirhead is a
Colin Murdoch-Muirhead
former senior executive of HSBC Bank of Bermuda. Blessed Holdings and FIP Bertin were employed in JBS’ 2009 acquisition of Brazilian meatpacker
Bertin via a share swap. In 2013, Grupo Bertin filed a lawsuit in São Paulo alleging that shares from FIP Bertin, which it controlled, had been fraudulently
transferred to Blessed, according to industry news website Meatingplace. Bertin also alleged that Blessed was controlled by the Batista family.
JBS at the time denied having any relationship with Blessed. The matter was settled out of court as part of Bertin’s exit from JBS in 2014, according to
press reports.

Iris Rezende is a senator and former governor of Goias state, where JBS was founded and is based. According to Piaui magazine, during the company's
Iris Rezende early period of expansion, it was rumored that Rezende a patron or even a partner of Jose Batista Sobrinho. The family has denied benefiting from
political patronage.

Political publicist and campaign advisor Joao Santana has admitted, as part of a plea bargain, to handling illegal donations to Dilma Rousseff’s
presidential campaign, according to press reports. His wife, Monica Moura, told prosecutors in May 2016 that JBS made illegal contributions to the
Joao Santana
Worker's Party (PT) in 2014, according to O Globo. She alleged that JBS made the payments through a company called Focal. JBS told O Globo that it
had no records of those payments and no relationship to Focal or its owners.

Brazil’s former ruling party (2003-2016) has received substantial donations from JBS over the past decade. According to data compiled by newspaper
Workers' Party (PT) Estadao, JBS donated roughly USD 107m to the party over this time period. The Batista family's companies received loans and equity financing
from state-owned banks and pension funds while PT was in power.

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RISK FACTORS

Risk Factor Notes

Brazilian police raided the offices of Eldorado Brasil Celulose and holding company J&F on 1 July 2016 amid accusations Eldorado had paid bribes
Eldorado Brasil Celulose,
in exchange for loans from Caixa Econômica Federal. The headquarters of Eldorado are located in the same building as JBS, and the meat company
J&F Investimentos and Joesley
issued a press release stating that it was not under investigation. The São Paulo home of Joseley Batista was searched by police on the same day,
Batista: police raid
according to Folha.

Wesley and Joesley Batista were barred by a federal court on 6 Sept 2016 from holding management roles after being implicated in the “Greenfield”
investigation into fraud at state pension funds. They were allowed to return to their jobs after reaching a deal with prosecutors to provide BRL 1.52bn
Eldorado Brazil Celulose and
in guarantees by 21 Oct. Jose Batista Jr and Jose Batista Sobrinho were named interim CEO and chairman of JBS in the interval. Prosecutors are
J&F Investimentos: Pension
investigating alleged overpayment for shares of Eldorado Brasil Celulose by pension funds Funcef (affiliated with Caixa Econômica Federal) and Petros
fund (Greenfield) investigation
(affiliated with Petrobras) in 2009. Wesley Batista was detained by police for questioning on 5 Sept, as part of an operation targeting over 100
individuals and companies, according to press reports.

On 19 Jan 2016, the Federal Court of São Paulo State accepted a criminal complaint by the Federal Prosecutor’s Office against Joesley Batista and
Joesley Batista: criminal others related to alleged violations of financial system laws, according to Eldorado Brasil Celulose disclosures. Prosecutors claimed that Banco Original
charges for financial violations used an indirect structure to illegally make loans to group companies. Banco Rural (which is not controlled by the Batista family) allegedly lent money
to J&F Investimentos and Flora, while Banco Original lent the same amount to Banco Rural.

In 2013, Joesley Batista was charged with tax evasion by the federal prosecutor for the state of Goias. Eldorado Industria e Comercio de Carnes,
Joesley Batista: a meat packer of which Batista was the controlling shareholder, allegedly failed to pay BRL 4.8m in taxes in 1998 and 1999, according to press reports.
Goias State tax evasion The prosecutors said that the company, which had been removed from the tax registry, maintained an active bank account during that time and
conducted undeclared transactions.

Jose Batista Jr.:

Jose Batista Jr. was expelled from the Goias state branch of the Brazilian Democratic Movement Party (PMDB) in 2015, according to O Globo.
expulsion from Brazilian
The expulsion was due largely to Batista’s support for an opposing party’s candidate, Marconi Perillo of the Brazilian Social Democratic Party (PSDB),
Democratic Movement Party
over PMDB candidate Iris Rezende. Batista had planned to run for governor in 2014 but withdrew after Rezende announced his candidacy.
(PMDB)

In February 2016, O Estado do São Paulo reported that the Administrative Council of Fiscal Resources (CARF) had imposed a total of BRL 3bn in fines
and back taxes related to the 2009 acquisition by JBS of Bertin’s meatpacking business through a share swap. Tax authorities claimed to have found
JBS: Bertin merger fraud
irregularities in the pricing of shares in the merger, and alleged that the deal had harmed minority shareholders. In addition, CARF said the acquisition
allegations and BRL 3bn fine
has been carried out using an illegal structure. Batista holding company J&F Investimentos responded that the deal had been done
with “total transparency.” According to Folha, as of March 2016, Bertin was contesting the penalty.

In April 2013 the Brazilian Antitrust Authority (CADE) issued a report warning that of JBS' last 12 acquisitions, seven had not been reported to CADE
JBS: Brazil anti-trust fines and within the legally mandated period. CADE imposed fines of BRL 7.4m, and ordered JBS to report all future acquisitions, including deals that did not
acquisition of JBS competitor meet the usual criteria for mandatory reporting. However, it is not clear whether CADE's requirements apply to other companies owned by the
by JBJ Investimentos Batista family in the same industry. In December 2014, JBJ Investimentos, a company controlled by José Batista Jr., acquired Fratelli Dorazio
Investimentos SA, which controlled distressed Brazilian JBS competitor Mataboi Alimentos SA.

In April 2016, JBS subsidiary Seara was fined approximately BRL 2m for the use of child labor, according to Valor Economico, citing the office of the
labor prosecutor in Santa Catarina state. JBS was also ordered to pay BRL 500,000 in damages. The company appealed the ruling. JBS was cited as
JBS: Brazil child labor fine
saying that the proceeding against Seara was initiated on 8 November 2011, when the subsidiary was owned by competitor Marfrig.
JBS acquired Seara in September 2013.

In April 2016, JBS was fined BRL 7m fine over the non-negotiated collective dismissal of 650 workers when it closed a plant in the state of Mato Grosso,
JBS: Brazil labor fine
Valor Economico reported.

The government of the state of Goias claimed in 2014 that it had discovered 49 irregularities in JBS' financials over nine years, and that the
JBS: Goias State tax
company owed a total of BRL 1.3bn in back taxes. At the time, according to O Popular, this accounted for 18% of total tax debt in the state.
irregularities
JBS denied wrongdoing.

In December 2014, Valor Econômico reported that federal police were investigating payments by JBS totalling BRL 800,000 to a shell company
JBS: Petrobras (Lava Jato)
under inquiry in the Lava Jato investigation. JBS responded that the payments were legitimate and related to the purchase of an industrial facility
investigation
and a distribution center.

According to Brazilian daily O Estado de São Paulo, JBS made political contributions totalling more than BRL 367m in the 2014 national elections.
JBS: political contributions About 30% of the donations went to the Workers' Party, 20.8% to the Brazilian Social Democracy Party (PSDB) and 9.7% to Michel Temer’s Brazilian
Democratic Movement Party (PMDB). JBS was the top political contributor in the country, representing 18.7% of all large donations.

JBS has faced anti-trust action in the US. After receiving Justice Department approval in March 2008 for its acquisition of Smithfield Beef, JBS agreed the
JBS: US Justice Department same year to acquire National Beef Packing Co. The Justice Department, together with 13 state attorneys general, filed a lawsuit in the
anti-trust lawsuit to prevent US District Court for the Northern District of Illinois to prevent the merger on competition grounds. JBS eventually called off the acquisition.
National Beef acquisition JBS' acquisitions became a political issue in the 2008 presidential campaign. Hillary Clinton opposed the Smithfield deal, and told the South Dakota
Rapid City Journal that she would “fight consolidation” in the beef industry.

According to labor rights watchdog Good Jobs First, US companies owned by JBS have been penalized 60 times since 2010 by the Environmental
JBS: US labor fines
Protection Agency (EPA) or Occupational Safety and Health Administration (OSHA), paying a total of USD 2.65m in fines.

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JBS SA CAPITAL STRUCTURE

Face Face Next Est Annual
Leverage
Instrument Currency Coupon Maturity Outstanding Outstanding Call Interest
at Face
(BRL m) (USD m) Date (USD m)

2018 USD 475m Secured Credit Facility USD 3.8 25-May-18 1,611.9 408.3 18

2018 USD 500m Secured Bank loan USD 7.875 31-Dec-18 1,973.8 500.0 29.4

2020 USD 400m Secured Credit Facility USD 18-Sep-20 1,579.0 400.0

Total Secured Debt 5,164.7 1,308.3 0.4x

2016 USD 300m Sr. Unsecured Int. bond USD 10.5 4-Aug-16 724.8 183.6 - 19.3

2016 USD 350m Sr. Unsecured Int. bond USD 10.25 5-Oct-16 798.6 202.3 - 20.7

2020 USD 700m Sr. Unsecured Int. bond USD 8.25 1-Feb-20 2,775.5 700.0 57.8

2020 USD 1.0bn Sr. Unsecured Int. bond USD 7.75 28-Oct-20 3,947.5 1,000.0 28-Oct-17 77.5

2021 USD 1.15bn Sr. Unsecured Int. bond USD 7.25 1-Jun-21 4,606.4 1,150.0 83.4

2023 USD 775m Sr. Unsecured Int. bond USD 6.25 5-Feb-23 3,059.3 775.0 5-Feb-18 48.4

2024 USD 750m Sr. Unsecured Int. bond USD 7.25 3-Apr-24 2,960.3 750.0 3-Apr-19 54.4

2024 USD 750m Sr. Unsecured Int. bond USD 5.875 15-Jul-24 2,991.7 750.0 15-Jul-19 44.1

2025 USD 900m Sr. Unsecured Int. bond USD 5.75 15-Jun-25 3,607.7 900.0 15-Jun-20 51.8

2025 USD 500m Sr. Unsecured Int. bond USD 5.75 2025 1,972.0 500.0 28.8

2020 USD 1bn - Term loan USD 1.43 11-Feb-20 1,943.5 500.0 7.1
USD/
Revolving credit facility 3.0 - 4.5 1,093.8 277.1
CAD
Export notes BRL 14.08 3,435.4 870.3 122.5

Rural credit BRL 6.7 682.3 172.8 11.6

2.42 -
Working capital financing 2,095.1 530.8
16.58
PP&E financing 2.80 - 5.23 1,054.5 267.1

Advances on currency exchange contracts 2.43 9,129.7 2,312.8 56.2

Other 13,672.6 3,483.6

Total Unsecured debt 60,550.7 15,325.4 4.5x

Total debt 65,715.4 16,633.7 4.9x

Cash and cash equivalent 24,008.3 6,081.9

Net debt 41,707.1 10,551.8 3.1x

Minority interest 1,507.2 381.8

Market capitalization 31,300.0 7,825.0

Enterprise value 74,514.3 18,758.6 5.5x

Data as of 31 Dec 2015. Source: Debtwire, Corporate documents, S&P Capital IQ, market sources. 1) Enterprise value and leverage were calculated using book value of debt. 2) BRL 3.9475 per USD.

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JBS ACQUISITIONS (2005-present)

Completion
Target Buyer Seller USD (m) Country
Date

4/14/2016 Scott Technology Ltd JBS Australia Pty Ltd 69 Australia

10/30/2015 Cargill Pork, LLC JBS USA, LLC Cargill Meat Solutions Corp 1450 USA

9/28/2015 Moy Park Group JBS SA Marfrig Global Foods SA 1507.3 Brazil

3/30/2015 P&M Quality Smallgoods Pty Ltd JBS Australia Pty Limited Affinity Equity Partners; Lederer family 1248.2 Australia

Tyson Do Brasil Alimentos Ltda; Tyson de Mexico, Pilgrim's Pride Corporation;

6/29/2015 Tyson Foods Inc 575 Brazil, Mexico
SRL de CV JBS Foods SA

8/6/2014 Avebom Industria de Alimentos JBS SA 47.3 Brazil

10/6/2014 Ceu Azul Alimentos JBS SA 110.9 Brazil

7/9/2014 Andrews Meat Industries Pty Ltd JBS Australia Pty Ltd Andrews Family Australia

2/28/2014 Slaughterhouse in Anastacio JBS SA 10 Brazil

4/4/2014 Frinal SA Frigorifico e Integracao Avicola JBS SA R.P. Administracao e Participacao 42.9 Brazil

6/24/2014 Massa Leve JBS SA 109.1 Brazil

9/18/2013 Agroveneto SA - Industria de Alimentos JBS SA 62.1 Brazil

1/30/2014 Vigor Alimentos SA (55.38% stake) FB Participacoes SA 693.3 Brazil

10/1/2013 Seara Alimentos SA; Grupo Zenda JBS SA Marfrig Global Foods SA 2761.9 Brazil

BRF Brasil Foods (Ana Rech Industrial Unit and Granja

6/4/2013 JBS SA BRF SA 99.7 Brazil
Andre da Rocha)

4/8/2013 XL Foods Inc. (US operations) JBS USA, LLC XL Foods Inc. 20 USA

J&F Participacoes
2/18/2013 Canal Rural Grupo RBS Ltda 76.3 Brazil
Financeiras SA

FR Participacoes; SSB Administracao e Participacoes;

4/18/2013 JBS SA Brazil
Tiroleza Alimentos; Rodo GS

1/31/2013 Independencia S.A. JBS SA 85.4 Brazil

1/14/2013 XL Foods Inc (Canadian operations) JBS SA XL Foods Inc 100 Brazil

3/26/2012 Pilgrim's Pride Corporation (7.30% stake) JBS USA LLC Lonnie Pilgrim (Private Investor) 107.7 USA

Flora Produtos De Higiene

10/24/2011 Hypermarcas SA (Domicile products line) Hypermarcas SA 78.9 Brazil
E Limpeza SA

Source: Mergermarket.

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ACQUISITIONS (2005-present)
Completion
Target Buyer Seller USD (m) Country
Date

5/31/2011 Bertin Higiene e Limpeza J&F Participacoes Financeiras SA Heber Participacoes Ltda 219.1 Brazil

7/13/2010 Toledo Group JBS SA 14 Brazil

9/20/2010 Rockdale Beef Pty Ltd JBS Australia Pty Ltd Mitsubishi Corp; Itoham Yonekyu Holdings 41.2 Australia

2/22/2010 Tatiara Meat Company JBS Australia Pty Ltd A Moksel AG 27.5 Australia

BNDES Participacoes SA; J&F Participacoes

1/31/2010 Bertin Ltda JBS SA Financeiras SA; ZMF Fundo de 6814.8 Brazil
Investimento em Participacoes

12/28/2009 Pilgrim's Pride Corp (64.00% stake) JBS USA LLC 2750 USA

5/28/2009 Slaughter plant in Teofilo Otoni JBS SA 8.3 Brazil

10/23/2008 Smithfield Beef Group JBS SA Smithfield Foods Inc; Continental Grain Co 565 Brazil

5/7/2008 Tasman Group Services Pty Ltd JBS Southern Australia Pty Ltd 148.4 Australia

5/22/2008 Inalca S.p.A. (50.00% stake) JBS SA 560.9 Brazil

2/1/2008 Col Car SA Swift Armour SA 20.3 Brazil

HM Capital Partners LLC; Booth Creek

7/12/2007 Swift & Company J&F Acquisition Co 1500 USA
Management Corp

1/10/2007 SB Holdings JBS SA Brazil

11/1/2006 CEPA SA Swift Armour SA 15.8 Brazil

GSC Partners; JPMorgan Latin America

9/5/2005 Swift Armour SA (85.00% stake) JBS SA 200 Brazil
Capital Partners

Source: Mergermarket.

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NEWS

Date Headline

28 Sep 2016 China places temporary ban on chicken imports from two Brazilian JBS slaughterhouses for sanitation reasons - report (translated)

23 Sep 2016 Eldorado to finalize expansion project financing structure within six months - CEO

20 Sep 2016 OAS settles with prosecutors for USD 73.4m in Greenfield probe (translated)

19 Sep 2016 JBS announces filing of registration statements with US SEC as part of corporate reorganization

19 Sep 2016 JBS, Marfrig make first fresh beef exports to US (translated)

19 Sep 2016 Gol Linhas Aereas, Vale and JBS among companies affected by Brazil's decision to add Ireland and Austria to its tax haven list

15 Sep 2016 Eldorado’s aggressive hedging strategy raises risk perception

13 Sep 2016 JBS's Batista brothers return to management after company parent pays BRL 1.5bn collateral (translated)

13 Sep 2016 JBS board appoints Jose Batista Junior as interim president and CEO

12 Sep 2016 Brazil’s Federal Audit Court reviewing Caixa loan used by J&F to buy Alpargatas from Camargo Correa (translated)

09 Sep 2016 Eldorado and JBS plunge on Greenfield probe – Trading Chatter

06 Sep 2016 Eldorado expansion project facing delay due to corruption probe

05 Sep 2016 Brazil court orders JBS owners to be removed from company's management (translated)

22 Aug 2016 JBS could halt operations at Mato Grosso plant over water shortage (translated)

18 Aug 2016 Brazil’s AG wants Caixa corruption investigation to be submitted to lower court hearing Petrobras probe (translated)

17 Aug 2016 JBS USA Lux, JBS receive consents from holders of a majority in aggregate principal amount of each series of notes due 2020, 2021, 2023, 2024, 2025

16 Aug 2016 Eldorado Celulose's second production line at Tres Lagoas plant to be operational by early 2019 (translated)

15 Aug 2016 Pilgrim Pride CCR downgraded to BB from BB+ on deteriorating parent company operations - S&P

12 Aug 2016 JBS, JBS USA downgraded to 'BB' from 'BB+' on weaker liquidity - S&P

11 Aug 2016 JBS to increase prices and cut production in light of higher costs

01 Aug 2016 Brazil opens its markets to US beef imports, US allows Brazilian beef imports in return

26 Jul 2016 Sao Paulo court orders JBS to suspend layoffs at Epitacio plant (translated)

19 Jul 2016 JBS to shut down Presidente Epitacio plant (translated)

Disclaimer: We have obtained the information provided in this report in good faith from sources that we consider to be reliable, but we d o not independently
verify the information. The information is not intended to provide tax, legal or investment advice. We shall not be liable for any mistakes, errors, inaccuracies or
omissions in, or incompleteness of, any information contained in this report. All such liability is excluded to the fullest extent permitted by law. Data has been derived
from corporate disclosures, regulatory announcements, government publications, media reports, press releases, presentations and Debtwire intelligence.

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